annual report 2023
contents
4
6
9
10
11
12
50
Financial Highlights
Message to Shareholders
Board of Directors
Executive Leadership Team
Officers
Corus Television Brands
Corus Radio Brands
Management’s
Discussion and Analysis
Management’s Responsibility
for Financial Reporting
51
54
55
56
57
58
Independent Auditor’s Report
Consolidated Statements
of Financial Position
Consolidated Statements
of Income and Comprehensive
Income
Consolidated Statements of
Changes in Equity
Consolidated Statements
of Cash Flows
Notes to Consolidated
Financial Statements
103
Corporate Information
Corus Entertainment Annual Report 2023 | 3
financial highlights 2023
$1,511
million
consolidated revenue
$334
million
consolidated segment profit1
22%
consolidated segment
profit margin1
$107
million
free cash flow1
3.62x
proforma net debt to
segment profit1,2
at August 31, 2023
1 Segment profit, segment profit margin, free cash flow and proforma net debt to segment profit do not have a standardized
meaning prescribed by IFRS. The Company believes these non-IFRS measures are frequently used as key measures to evaluate
performance. For definitions, explanations and reconciliations refer to the “Key Performance Indicators and Non-GAAP Financial
Measures” section of Management’s Discussion and Analysis on page 12.
2 Proforma net debt to segment profit ratio excludes contributions to segment profit from Toon Boom Animation Inc. for the
most recent four quarters.
4 | Corus Entertainment Annual Report 2023
ANNUAL SELECTED FINANCIAL INFORMATION(1)
The following table presents summary financial information for Corus for each of the listed years ended August 31:
(in millions of Canadian dollars, except per share amounts)
Revenue
Segment profit (2)
Net loss attributable to shareholders
Adjusted net income attributable to shareholders (2)
Basic loss per share
Adjusted basic earnings per share (2)
Diluted loss per share
Free cash flow(2)
Total assets
Long-term debt (inclusive of current portion)
Cash dividends declared per share
Class A Voting
Class B Non-Voting
2023
1,511.2
334.0
(428.8)
28.6
($2.15)
$0.14
($2.15)
106.8
2,746.1
1,092.4
$0.1750
$0.1800
2022
1,598.6
443.6
(245.0)
106.9
($1.19)
$0.52
($1.19)
239.6
3,502.5
1,261.7
$0.2350
$0.2400
Notes:
(1) For further information refer to Management’s Discussion and Analysis on page 12.
(2) Segment profit, adjusted net income attributable to shareholders, adjusted basic earnings per share, and free cash flow do not have a
standardized meaning prescribed by IFRS. The Company believes these non-IFRS measures are frequently used as key measures to evaluate
performance. For definitions, explanations and reconciliations refer to the “Key Performance Indicators and Non-GAAP Financial Measures”
section of Management’s Discussion and Analysis on page 12.
FISCAL 2023 FINANCIAL PROFILE
Business Segment
Revenues
Sources of Revenue
Business
Segment Profit
television
93%
advertising
57%
television
96%
radio
7%
distribution,
production
& other
10%
subscriber
33%
radio
4%
Corus Entertainment Annual Report 2023 | 5
message to
shareholders
This is a challenging time for our business. In an unusual
year marked by an advertising recession, media industry
labour actions and near-term cost pressures, we focused on
navigating a difficult environment and reducing our operating
costs while advancing important initiatives that position Corus
for a video-first future. In the coming quarters, we are poised
to benefit from the normalization of our foreign programming
supply and Canadian content spending obligations, and a
streamlined operating structure as we advance our strategic
plan and its priorities.
Post-pandemic distortions which first materialized in
mid-2022 continue to affect advertising demand across
the broader media industry. These include supply chain
disruptions, labour shortages, inflation, rising interest rates
and shifts in consumer behaviour. We have successfully
navigated similar cycles in the past, benefitting significantly
from a return in advertising spending once the advertising
recovery takes hold.
The Writer’s Guild of America (WGA) and Screen Actors
Guild-American Federation of Television and Radio Artists
(SAG-AFTRA) strikes, which impacted our Fall 2023 foreign
programming supply, are now resolved (WGA) or pending
ratification (SAG-AFTRA). We are excited to welcome a strong
line-up of hit programming back to our prime-time schedule
in the coming months, which is expected to positively impact
audience levels and advertising demand.
The one-time COVID-19 ‘catch up’ regulatory spending
obligation which increased programming costs for fiscal 2022
and 2023 by over $50 million in aggregate is now also in the
rear-view mirror.
Against this backdrop, our results for the year were:
• Consolidated revenue of $1.5 billion;
• Consolidated segment profit1 of $334 million;
• Free cash flow1 of $107 million; and
• Year-end leverage of 3.62x proforma net debt to segment
profit1,2.
fit for the future
We have taken prudent actions to ensure the resiliency of
our company over the longer-term. Our “Fit for the Future”
initiatives demonstrate the purposeful work we are doing to
streamline our operating model and rationalize our asset base.
In response to a challenging operating environment, we
proactively secured amendments to our credit agreement,
and redirected our use of free cash flow1 to debt repayment.
This will provide additional financial flexibility while we position
Corus for the expected eventual recovery in advertising and
the normalization of our content supply and programming
costs.
Our long-term goal to drive net debt to segment profit1 below
2.5 times is our priority. We have paid down $912 million of
total debt in the last five years, demonstrating a consistently
strong commitment to financial and operating discipline.
We have tenaciously implemented cost cuts and workforce
structural reviews throughout the company while ensuring
minimal disruption to our operations or clients. Our guiding
principle is to deliver reductions quarter by quarter, as we
find ways to work differently to improve productivity across
all aspects of our business and lower our cost base. In the
fourth quarter we rationalized our asset base, successfully
completing the sale of Toon Boom Animation Inc., with net
proceeds of $141 million used to pay down bank debt.
our video first strategy
At Corus, we are purposefully moving from being a Television
broadcaster to a multi-platform video aggregator, delivering
content everywhere our audiences are while we expand our
cross-platform monetization capabilities. This is what we call
our “Video First” strategy.
We see significant opportunity ahead in the large and
expanding total addressable premium video advertising
market. The successful renewal, extension and broadening of
the rights acquired through our content supply agreements
are foundational to this strategy. These targeted investments
support the long-term viability of our traditional channels
business while we simultaneously identify streaming
opportunities in premium digital video.
Corus is pursuing a partner-led, capital-light streaming
strategy. Our extensive content licensing agreements with our
US studio partners provide access to the depth and breadth
of content we require for our multi-platform networks, linear
and digital alike. Our required Canadian content spending
produces beloved local content in service of our networks and
platforms in Canada while providing an opportunity to grow
our content licensing revenues the world over.
6 | Corus Entertainment Annual Report 2023
Our leading portfolio of streaming platforms in Canada
includes STACKTV, the Global TV App, our Global News
over-the-top (OTT) news streams, TELETOON+, and now
Pluto TV3. This highly complementary portfolio addresses
the Subscription Video on Demand (SVOD), Advertising
Supported Video on Demand (AVOD) and Free Advertising
Supported Television (FAST) digital market segments and
appeals to premium video subscribers, cord-cutters, cord-
nevers and advertisers who want to reach them. We are
actively pursuing new distribution partners to support the
continued growth of these premium video services.
And finally, Pluto TV3 is now available in Canada – The most
robust content launch of any international market, Paramount
Global’s Pluto TV features a channel line-up that pairs their
content with Corus Entertainment’s original Canadian
content. Pluto TV is off to a great start. Corus is the domestic
advertising representative for Pluto TV, which is now Canada’s
largest FAST platform.4
We measure our streaming and digital platforms’ progress
through our New Platform Revenue1 metric, which was
$33 million or 13% of total Television advertising and
subscriber revenue in our fourth quarter and increased
to $146 million or 11% of total Television advertising and
subscriber revenue for the year.
growing slate of original content
A few notable highlights of our Video-First strategy in action
include:
The optimization of our Kids portfolio. Our long-lived heritage
network TELETOON was rebranded as Cartoon Network
on linear platforms and on STACKTV last Fall. As part of an
additional channel rebrand, Corus introduced a new kids’
television channel from our partners at Warner Bros Discovery,
with the debut of Boomerang.
The TELETOON brand remains alive and well as TELETOON+,
available as an SVOD service on Amazon Prime Video and Bell
platforms, and is jam packed with fan favourite series from
Warner Bros Discovery and Cartoon Network.
Two years ago, STACKTV launched Dynamic Advertising
Insertion in partnership with Amazon Prime Video. This
popular offering for advertisers is becoming a significant
revenue contributor to our digital advertising portfolio and
represents a compelling growth opportunity.
The Global TV App is a first-of-its-kind TV Everywhere
product designed to improve the value proposition and
viewing experience for traditional television subscribers with
live and on demand access to our most popular networks
and brands anytime, anywhere in one app. With the additions
of Magnolia Network Canada and Lifetime this past year, the
Global TV App now provides 11 channels for authenticated
subscribers in Canada. And, for those who like FREE, we
introduced an all new “Freeplay” section, featuring 24/7 FAST
Television access to fan favourite series and movies which has
meaningfully improved the Global TV App’s audience delivery.
Outside of our domestic portfolio, the international content
marketplace continues to evolve, providing opportunities
for our owned content business. As operators of streaming
platforms look to balance their production investments with
more cost-effective content acquisitions, this is a perfect set
up for our owned content offerings at Corus. Our growing
slate of content in production and for sale benefitted from this
demand, resulting in significant distribution, production and
other revenue growth of 21% this past year. Original series
from our content portfolio, comprised of Nelvana, Corus
Studios, Aircraft Pictures and Waterside Studios, are building
audiences across leading networks and streaming services in
the U.S. and around the world.
Girl from “The Most Magnificent Thing”
1 Segment profit, free cash flow, net debt to segment profit, proforma net debt to segment profit, and new platform revenue do not have a standardized meaning prescribed by IFRS.
The Company believes these non-IFRS measures are frequently used as key measures to evaluate performance. For definitions, explanations and reconciliations refer to the “Key Performance
Indicators and Non-GAAP Financial Measures” section of Management’s Discussion and Analysis on page 12.
2 Proforma net debt to segment profit ratio excludes contributions to segment profit from Toon Boom Animation Inc. for the most recent four quarters.
3 Corus is the domestic advertising representative and an original content partner for Pluto TV, a Paramount Company, which is the leading free ad-supported streaming television (FAST) service.
4 Source: Numeris VAM Data, Ontario, May 1, 2023 – July 30, 2023.
Corus Entertainment Annual Report 2023 | 7
advanced focus on sustainability
view to the future
We remain committed to our People, Planet and Responsibility
Goals and have a sound roadmap in place to advance our ESG
efforts. Despite a year of distortions in the macroeconomic
environment and continued evolution of the media industry,
our targeted approach to ESG delivered strong results.
It is precisely at these moments when we see the true
character of our Corus team at play. Despite a challenging
year, our talented team remains steadfast in their efforts to
advance our strategic priorities and support the needs of our
clients and partners.
In 2023, our aim was to advance real change within Corus
for our people, our partners and our audiences. Overall, we
focused on advancing our diversity, equity and inclusion (DEI)
action plan, expanding our well-being offerings for employees,
augmenting our youth engagement and mentorship,
focusing on energy and waste efficiencies in our direct
operations to prepare for a decarbonization plan and engaging
with suppliers to help pave the way for more progress on
environmental and social risk due diligence.
This past year, we looked for opportunities to reduce our
operating footprint, engaged with our clients and business
partners on how Corus can support their ESG goals and
continued to make a positive impact in our communities,
while enabling our teams to grow and thrive in a respectful and
inclusive workplace.
Our ESG performance over the past year is a testament to
the remarkable work taking place, in our operations and in
the communities in which we live and work. We look forward
to advancing our sustainability goals while contributing to a
sustainable, inclusive media and entertainment industry – a
journey that will sharpen and strengthen Corus for the future.
We are controlling what we can control, building on our run-
rate cost savings as we continue to implement our “Fit for
the Future” initiatives, designed to rationalize our asset base
and streamline our operating model to improve productivity
across all aspects of our business while lowering costs.
We are prudent allocators of capital and have made some
difficult yet forward-thinking decisions to accelerate the
repayment of debt and improve the financial flexibility
of our company. Advertising is a cyclical business and, at
some point in the quarters ahead, we expect a rebound in
advertising demand and revenue. We will enter this rebound
with a streamlined cost structure, a much-needed return to
regular levels of required Canadian program spending and a
normalized supply of high-quality foreign programming.
Regulatory change is on the horizon, with strides towards
modernization of Canadian broadcasting regulations well
underway. We are actively participating in this process
and support its goal to ensure a more fair and equitable
broadcasting system.
In the meantime, our work continues as we move beyond
being a television broadcaster to becoming an aggregator
of premium digital video and building cross-platform
monetization capabilities to embrace the Video First business
model of the future. This model builds on our extensive
relationships with world-leading studios and distributors,
our ‘client first’ approach with advertisers and the pursuit of
audiences across all video platforms. We have a well-thought-
out strategy and we are confident that it is the right one for
Corus to create value over the longer-term.
Doug Murphy
Heather Shaw
President and CEO
Executive Chair
8 | Corus Entertainment Annual Report 2023
executive
leadership
team
Doug Murphy
President and Chief Executive Officer
John Gossling, FCPA, FCA
Executive Vice President and Chief Financial Officer
Cheryl Fullerton
Executive Vice President,
People and Communications
Shawn Kelly
Executive Vice President, Technology
Jennifer Lee
Executive Vice President and General Counsel
Greg McLelland
Executive Vice President and Chief Revenue Officer
Troy Reeb
Executive Vice President, Networks and Content
officers
Heather Shaw
Executive Chair
Executive Leadership Team
All members of the Executive Leadership Team
are Officers of the Company.
board of
directors
Heather Shaw
Chair of the Board of Directors
Doug Murphy
President and Chief Executive Officer
Fernand Bélisle
Independent Lead Director
Chair of the Human Resources and
Compensation Committee
Michael Boychuk*
Member of the Audit Committee
Stephanie Coyles*
Member of the Audit Committee
Member of the Corporate Governance Committee
Charmaine Crooks
Member of the Human Resources and
Compensation Committee
Michael D’Avella*
Sameer Deen*
Member of the Corporate Governance Committee
Mark Hollinger
Chair of the Corporate Governance Committee
Member of the Human Resources and
Compensation Committee
Barry James
Chair of the Audit Committee
Margaret O’Brien
Member of the Audit Committee
Julie Shaw
Vice Chair of the Board of Directors
* Director has chosen to not stand for re-election at the 2024
Annual General Meeting of Shareholders as part of Corus’
cost-reduction initiatives.
Corus Entertainment Annual Report 2023 | 9
Corus Television
Conventional Stations
B.C.
Okanagan
Lethbridge
Calgary
Edmonton
Saskatoon
Regina
Winnipeg
Toronto
Durham
Peterborough
Kingston
Montreal
New Brunswick
Halifax
News Programming
1
Lifestyle
Drama
Kids
Original Content
Multi-platform Presence: Premium Digital Video Streaming + Digital Platforms
2
1 BC1 is a specialty network dedicated to Global News programming. 2 Corus is the domestic advertising representative and an original content partner for Pluto TV, a Paramount
Company, which is the leading free ad-supported streaming television (FAST) service.
10 | Corus Entertainment Annual Report 2023
Corus Radio
Vancouver, British Columbia
CKGO-AM
AM730 All Traffic
All The Time
CKNW-AM
980 CKNW
CFMI-FM
Rock 101
Vancouver’s
Greatest Hits
CFOX-FM
The World
Famous CFOX
Calgary, Alberta
Edmonton, Alberta
CFGQ-FM
CHQR-AM
CHED-AM
630 CHED
Winnipeg, Manitoba
CKRY-FM
Country 105
CHQT-AM
Global News Radio
880 Edmonton
CISN-FM
CISN Country
103.9
CKNG-FM
CHUCK @ 92.5
CJOB-AM
680 CJOB
CFPG-FM
Country 99
CJKR-FM
Power 97
Barrie/Collingwood, Ontario
CHAY-FM
Fresh 93.1
CIQB-FM
Big 101.1
CKCB-FM
95.1 The Peak FM
Kitchener, Ontario
Cornwall, Ontario
CJDV-FM
107.5 Dave Rocks
CKBT-FM
91.5 The Beat
CFLG-FM
104.5 Fresh Radio
CJSS-FM
Boom 101.9
Guelph, Ontario
Kingston, Ontario
CJOY-AM
1460 CJOY
CIMJ-FM
Magic 106.1
CKWS-FM
104.3 Fresh Radio
CFMK-FM
Big 96.3
Hamilton, Ontario
CHML-AM
900 CHML
CING-FM
Energy 95.3
CJXY-FM
Y108
London/Woodstock, Ontario
CFPL-AM
980 CFPL
CFHK-FM
103.1 Fresh Radio
CFPL-FM
FM96
CKDK-FM
Country 104
Ottawa, Ontario
Peterborough, Ontario
CKQB-FM
Jump! 106.9
CJOT-FM
boom 99.7
CKRU-FM
100.5 Fresh
Radio
CKWF-FM
The Wolf
101.5 FM
Toronto, Ontario
CFIQ-AM
640 Toronto
CFNY-FM
102.1 the Edge
CILQ-FM
Q107
Corus Entertainment Annual Report 2023 | 11
MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis of the financial position and results of operations for the year ended
August 31, 2023 is prepared as at October 26, 2023. The following should be read in conjunction with the
Company’s August 31, 2023 audited consolidated financial statements and notes therein. The financial
highlights included in the discussion of the segmented results are derived from the audited consolidated financial
statements. All amounts are stated in Canadian dollars unless specified otherwise.
Corus Entertainment Inc. (“Corus” or the “Company”) reports its financial results under International Financial
Reporting Standards (“IFRS”) in Canadian dollars. Per share amounts are calculated using the weighted average
number of shares outstanding for the applicable period.
USE OF NON-GAAP FINANCIAL MEASURES
The Management’s Discussion and Analysis contains references to certain measures that do not have a
standardized meaning under IFRS as prescribed by the International Accounting Standards Board (“IASB”) and are
therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures
are provided as additional information to complement IFRS measures by providing a further understanding of
operations from management’s perspective. Accordingly, non-IFRS or non-Generally Accepted Accounting
Principles (“GAAP”) measures should not be considered in isolation nor as a substitute for analysis of financial
information reported under IFRS. The Company presents non-IFRS or non-GAAP measures, specifically,
segment profit (loss), segment profit margin, adjusted segment profit, adjusted net income (loss) attributable
to shareholders, adjusted basic earnings (loss) per share, free cash flow, net debt and net debt to segment profit,
proforma net debt to segment profit, as well as supplementary financial measures such as optimized advertising
revenue and new platform revenue.
The Company believes these non-IFRS or non-GAAP and supplementary financial measures are frequently
used by securities analysts, investors and other interested parties as measures of financial performance and to
provide supplemental measures of operating performance and thus highlight trends that may not otherwise
be apparent when relying solely on IFRS financial measures. A reconciliation of the Company’s non-IFRS or
non-GAAP measures is included in the Key Performance Indicators and Non-GAAP Financial Measures section of
this report.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
To the extent any statements made in this document contain information that is not historical, these statements
are forward-looking statements and may be forward-looking information within the meaning of applicable
securities laws (collectively, “forward-looking information”). This forward-looking information relates to, among
other things, the Company’s objectives, goals, strategies, targets, intentions, plans, estimates and outlook,
including the adoption and anticipated impact of the Company’s strategic plan, advertising and expectations
of advertising trends for fiscal 2024, subscriber revenue and anticipated subscription trends, distribution,
production and other revenue, the Company’s dividend policy and the payment of future dividends; the
Company’s leverage target; the Company’s ability to manage retention and reputation risks related to its on-air
talent; expectations regarding financial performance, including capital allocation strategy and capital structure
management, operating costs and tariffs, taxes and fees, and can generally be identified by the use of words such
as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” or the negatives of these terms and other similar
expressions. In addition, any statements that refer to expectations, projections or other characterizations of
future events or circumstances may be considered forward-looking information.
Although Corus believes that the expectations reflected in such forward-looking information are reasonable,
such information involves assumptions, risks and uncertainties and undue reliance should not be placed on
such statements. Certain material factors or assumptions are applied with respect to the forward-looking
information, including without limitation: the estimates and judgments set out under the heading “Critical
Accounting Estimates and Judgments”, in this document; factors and assumptions regarding the general
market conditions and general outlook for the industry including: the impact of recessionary conditions
and continuing supply chain constraints; the potential impact of new competition and industry mergers and
acquisitions; changes to applicable tax, licensing and regulatory regimes; inflation and interest rates, stability of
the advertising, subscription, production and distribution markets; changes to key suppliers or clients; operating
and capital costs and tariffs, taxes and fees, the Company’s ability to source, produce or sell desirable content
and the Company’s capital and operating results being consistent with its expectations. Actual results may differ
materially from those expressed or implied in such information.
12 | Corus Entertainment Annual Report 2023
Important factors that could cause actual results to differ materially from these expectations include, among
other things: the Company’s ability to attract, retain and manage fluctuations in advertising revenue; the
Company’s ability to maintain relationships with key suppliers and clients and on anticipated financial terms
and conditions; audience acceptance of the Company’s television programs and cable networks; the Company’s
ability to manage retention and reputation risks related to its on-air talent; the Company’s ability to recoup
production costs; the availability of tax credits; the availability of expected news, production and related credits,
programs and funding; the existence of co-production treaties; the Company’s ability to compete in any of the
industries in which it does business including with competitors which may not be regulated in the same way or
to the same degree; the business and strategic opportunities (or lack thereof) that may be presented to and
pursued by the Company; 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 including statements, decisions or positions by applicable regulators including, without
limitation, the Canadian Radio-television and Telecommunications Commission (“CRTC”), Canadian Heritage
and Innovation, Science and Economic Development Canada (“ISED”); changes to licensing status or conditions;
unanticipated or un-mitigable programming costs; the Company’s ability to integrate and realize anticipated
benefits from its acquisitions and to effectively manage its growth; the Company’s ability to successfully defend
itself against litigation matters and complaints; failure to meet covenants under the Company’s senior credit
facility, senior unsecured notes or other instruments or facilities; epidemics, pandemics or other public health
and safety crises in Canada and globally; physical and operational changes to the Company’s key facilities and
infrastructure; cybersecurity threats or incidents to the Company or its key suppliers and vendors; and changes
in accounting standards.
Additional information about these factors and about the material assumptions underlying any forward-looking
information may be found under the heading “Risks and Uncertainties” in this document. Corus cautions that
the foregoing list of important assumptions and factors that may affect future results is not exhaustive. When
relying on the Company’s forward-looking information to make decisions with respect to Corus, investors and
others should carefully consider the foregoing factors and other uncertainties and potential events. Unless
otherwise specified, all forward-looking information in this document speaks as of the date of this document.
Except as otherwise required by applicable securities laws, Corus disclaims any intention or obligation to
publicly update or revise any forward-looking information whether as a result of new information, events or
circumstances that arise after the date thereof or otherwise.
Corus Entertainment Annual Report 2023 | 13
OVERVIEW
Corus is a leading media and content company that develops and delivers high quality brands and content
across platforms for audiences around the world. Engaging audiences since 1999, the Company’s portfolio of
multimedia offerings encompass 33 specialty television services, 15 conventional television stations, 39 radio
stations, digital and streaming platforms, technology and media services, and a global content business.
Corus operates through two reporting segments: Television and Radio. The Corporate results represent
the incremental cost of corporate overhead in excess of the amount allocated to the operating segments.
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, platforms and other advertising media, government regulation, market competition from
other distributors of animated and unscripted and scripted lifestyle programming and Corus’ ability to continue
to provide popular programming.
TELEVISION
The Television segment is comprised of 33 specialty television networks, 15 conventional television stations,
streaming platforms, a social media digital agency, a social media creator network, technology and media
services, and the Corus content business, which includes the production and distribution of films and television
programs, merchandise licensing, book publishing, and animation software (disposed of August 23, 2023).
Revenue for the specialty television networks is generated from both advertising and subscribers, while revenue
from the conventional television stations are derived primarily from advertising. Revenue for the content
business is generated from the licensing of proprietary films and television programs as well as the provision of
production services, merchandise licensing, book publishing, and animation software. Media and technology
services revenue is generated principally from the provision of services. For both advertising and subscriber
revenue, it is critical that the Company offer Canadians entertaining content that engages them. The Company’s
content is available to Canadians through a variety of platforms, including conventional or specialty television,
streaming platforms, online websites, mobile apps and connected TVs. Catering to consumer demand for quality
and choice, the Company strives to offer the best content available to Canadians when and where they choose
to consume it.
RADIO
The Radio segment is comprised of 39 radio stations across Canada situated primarily in urban centres in English
Canada, with a concentration in the densely populated area of Southern Ontario. The Company’s primary
method of distribution is over-the-air, analog radio transmission, with additional delivery platforms including
HD Radio, websites, podcasts and mobile apps.
Revenue for the Company’s radio business is derived primarily from advertising.
14 | Corus Entertainment Annual Report 2023
KEY FINANCIAL INFORMATION
The following table presents key summary financial information for Corus, its operating segments, and a
reconciliation of segment profit to net income for each of the listed years ended August 31:
(in millions of Canadian dollars, except per share amounts)
2023
2022
Revenue
Television
Radio
Consolidated revenue
Segment profit (loss) (1)
Television
Radio
Corporate
Consolidated segment profit (1)
Depreciation and amortization
Interest expense
Goodwill, broadcast licence and other asset impairment
Debt refinancing
Restructuring and other costs
Gain on disposition
Other expense (income), net
Loss before income taxes
Income tax expense (recovery)
Net loss for the year
Net income (loss) attributable to:
Shareholders
Non-controlling interest
Net loss for the year
1,408.4
102.8
1,511.2
340.6
13.4
(20.0)
334.0
157.7
135.4
690.0
—
20.6
(142.3)
(3.7)
(523.7)
(100.8)
(422.9)
(428.8)
5.9
(422.9)
1,492.7
105.9
1,598.6
458.1
13.3
(27.8)
443.6
156.9
107.1
350.0
(3.4)
8.1
—
16.8
(191.9)
40.3
(232.2)
(245.0)
12.8
(232.2)
Adjusted net income attributable to shareholders (1)
28.6
106.9
Earnings (loss) per share
Basic loss per share
Adjusted basic earnings per share (1)
Diluted loss per share
Free cash flow (1)
Total assets
Long-term debt (inclusive of current portion)
Cash dividends declared per share
Class A Voting
Class B Non-Voting
Notes:
(1) As defined in “Key Performance Indicators and Non-GAAP Financial Measures” section.
($2.15)
$0.14
($2.15)
$(1.19)
$0.52
$(1.19)
106.8
239.6
2,746.1
1,092.4
3,502.5
1,261.7
$0.1750
$0.1800
$0.2350
$0.2400
Corus Entertainment Annual Report 2023 | 15
FISCAL 2023 COMPARED TO FISCAL 2022
For a discussion on the Company’s results of operations for the fourth quarter of fiscal 2023, we refer you to
Corus’ Fourth Quarter 2023 Report to Shareholders filed on SEDAR+ on October 27, 2023.
The following discussion describes the significant changes in the consolidated results from operations for the
year ended August 31, 2023 compared to the prior year.
REVENUE
For the year ended August 31, 2023, consolidated revenue of $1,511.2 million decreased 5% from $1,598.6 million
in the prior year. On a consolidated basis, advertising revenue decreased 10%, subscriber revenue was down
3%, while distribution, production and other revenue increased 20% from the prior year. Revenue decreased
6% in Television and 3% in Radio. Further analysis of revenue is provided in the discussion of segmented results.
DIRECT COST OF SALES, GENERAL AND ADMINISTRATIVE EXPENSES
For the year ended August 31, 2023, direct cost of sales and general and administrative expenses of $1,177.2
million increased 2% from $1,154.9 million in the prior year. On a consolidated basis, direct cost of sales increased
7%, while employee costs decreased 5% and other general and administrative costs decreased 2% from the
prior year. The increase in direct cost of sales was driven principally by the increases in amortization of program
rights and film assets, offset by lower other cost of sales that are positively correlated with revenue. The
decrease in employee costs was primarily due to lower short-term compensation accruals, lower share-based
compensation expense, reduced commission costs, and lower pension costs. Other general and administrative
expenses decreased as a result of the passage of Bill C-11 which introduced the elimination of CRTC Part II
fees effective April 1, 2023, as well as reduced tariff royalties and trade mark fees that are positively correlated
with revenue, and lower consulting costs and professional fees, offset by increased advertising and marketing
costs as well as software and system license fees. Further analysis of expenses is provided in the discussion of
segmented results.
SEGMENT PROFIT
For the year ended August 31, 2023, segment profit was $334.0 million, a decrease of 25% from $443.6 million
in the prior year. The decrease in segment profit was principally a result of Television advertising and subscriber
revenue declines combined with an increase in amortization of program rights in the current year. Segment
profit margin of 22% for the year ended August 31, 2023 was down from 28% in the prior year. Further analysis
is provided in the discussion of segmented results.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense for the year ended August 31, 2023 was $157.6 million, an increase from
$156.9 million in the prior year. The increase was a result of higher amortization of brands of $1.2 million and
intangible assets of $0.7 million, offset by lower amortization of capital assets of $1.1 million.
INTEREST EXPENSE
On February 17, 2023, the Company’s credit facility with a syndicate of banks was amended. The amendment
revised total debt to cash flow ratio covenants on both the senior secured term credit facility (the “Term Facility”)
and the senior secured revolving credit facility (the “Revolving Facility”, together with the Term Facility collectively
referred to hereafter as the “Credit Facility”).
On October 26, 2023, the Company’s Credit Facility was amended to increase the maximum total debt to cash
flow ratio required under the financial covenants up to and including August 31, 2024, reintroduce mandatory
quarterly repayments of the Term Facility, change certain conditions related to the use of proceeds on asset
disposals and to introduce additional restrictions on distributions to shareholders. Further information about
debt financing can be found in the Liquidity and Capital Resources section of this report, under the subheading
Liquidity.
Interest expense for the year ended August 31, 2023 of $135.4 million increased from $107.1 million in the prior
year. The increase principally results from higher interest on long-term debt of $16.8 million and higher imputed
interest of $11.3 million on long-term liabilities associated with program rights, trade marks and right-of-use
assets in the current year. Interest on long-term debt was higher due to interest payable on the $250.0 million
6.0% Senior Unsecured Notes due 2030 (the “2030 Notes”) issued on February 28, 2022, as well as increased
interest rates on floating interest rate bank debt.
16 | Corus Entertainment Annual Report 2023
The effective interest rate on bank debt and the 2030 Notes together with the $500.0 million of 5.0% Senior
Unsecured Notes due 2028 (the “2028 Notes”, collectively referred to hereafter as the “Notes”) for the year
ended August 31, 2023 was 6.0% compared to 4.5% in the prior year. The increase in the effective rate results
from higher interest rates on the Notes and higher floating interest rates, offset partially by lower total bank
debt.
GOODWILL, BROADCAST LICENCES AND OTHER ASSET IMPAIRMENT
Broadcast licences and goodwill are tested for impairment annually as at August 31 or more frequently if events
or changes in circumstances indicate that they may be impaired. The macroeconomic environment became
increasingly uncertain in the fourth quarter of fiscal 2022, characterized by persistently high inflation and
continuing supply chain constraints, as a result advertising demand and spending across the North American
television media industry contracted meaningfully. These conditions have persisted throughout fiscal 2023. In
addition, the continued labour action of the Screen Actors Guild-American Federation of Television and Radio
Artists (“SAG-AFTRA”) continues to impact the majority of scripted productions world-wide that employ
SAG-AFTRA talent, which impacts the timing of premium content premiers and types of programming available
for airing on the Company’s services. This has resulted in a further tightening of advertising demand, particularly
in the Television operating segment. The Company’s share price has continued to decline meaningfully from
August 31, 2021, which resulted in the Company’s carrying value being greater than its market enterprise value
at August 31, 2022, May 31, 2023, and August 31, 2023. Accordingly, impairment testing was required for both
the Television and Radio cash generating units (“CGUs”) at all of the preceding period ends.
For the year ended August 31, 2023, the Company has recorded total non-cash impairment charges in the
Television operating segment against goodwill, broadcast licences, as well as brand and trade marks totalling
$690.0 million. No impairment was identified in the Radio operating segment CGUs (refer to note 10 of the
audited consolidated financial statements for further details).
For the year ended August 31, 2022, as the Television operating segment had actual results that fell short of
previous estimates and an outlook that was less robust, a non-cash goodwill impairment charge of $350.0
million was recorded in the Television CGU.
DEBT REFINANCING
On March 18, 2022, the Company amended and restated its Credit Facility (refer to note 13 of the audited
consolidated financial statements for further details), which resulted in a non-cash gain on debt modification
of $4.2 million, offset by a write-off of unamortized debt financing fees of $0.8 million.
RESTRUCTURING AND OTHER COSTS
Restructuring and other costs for the year ended August 31, 2023 was $20.6 million compared to $8.1 million
in the prior year. The current year costs relate primarily to restructuring costs associated with employee exits,
while the prior year costs relate to restructuring costs associated with employee exits and ongoing system
integration costs.
DISPOSITION GAIN
On August 23, 2023, the Company completed its sale of Toon Boom Animation Inc. (“Toon Boom”), an indirect
wholly owned subsidiary, which resulted in a net gain on disposition of $142.3 million. The Company received
net cash proceeds of $141.2 million (net of divested cash, refer to note 26 of the audited consolidated financial
statements for further details).
OTHER EXPENSE (INCOME), NET
Other income for the year ended August 31, 2023 was $3.7 million compared to other expense of $16.8 million in
the prior year. In the current year, other income includes other income of $9.8 million comprised of miscellaneous
interest and rental income, net of redundant rent, the retroactive portion of a Radio tariff, as well as a reversal of
liabilities related to program rights, an impairment recovery of $0.8 million on an equity investment, offset by net
foreign exchanges losses of $4.6 million and fair value losses on the Notes prepayment options of $2.3 million.
In the prior year’s comparable period, other expense included net foreign exchange losses of $9.8 million, fair
value losses on the Notes prepayment options of $7.3 million, trade mark intangible write-off of $2.2 million
resulting from the rebranding of the DIY channel to Magnolia, offset by $2.4 million from miscellaneous interest
income and rental income, net of redundant rent.
Corus Entertainment Annual Report 2023 | 17
INCOME TAX EXPENSE
The Company’s effective income tax recovery rate for the year ended August 31, 2023 was 19.2% compared to
a 21.0% income tax expense rate in the prior year. The difference between the statutory rate of 26.5% and the
effective tax recovery rate for the year resulted from reductions related to the non-taxable capital gains realized
on the sale of Toon Boom as well as a decrease in valuation allowances recorded against future income tax assets,
offset by additions related to goodwill, broadcast licence and other asset impairment charges recorded in the
Television operating segment.
NET INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS AND EARNINGS (LOSS) PER SHARE
Net loss attributable to shareholders for the year ended August 31, 2023 was $428.7 million ($2.15 loss per
share basic), compared to $245.1 million ($1.19 loss per share basic) in the prior year. Net loss attributable
to shareholders for the year ended August 31, 2023 includes goodwill, broadcast licence and other asset
impairment charges of $690.0 million ($2.90 per share) in the Television operating segment, a gain on a business
divestiture of $142.3 million ($0.68 per share) and restructuring and other costs of $20.6 million ($0.07 per
share). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of
$28.6 million ($0.14 per share basic). Net loss attributable to shareholders for the year ended August 31, 2022
includes a non-cash goodwill impairment charge of $350.0 million ($1.69 per share) in the Television operating
segment, restructuring and other costs of $8.1 million ($0.03 per share basic) and a debt refinancing gain of $3.4
million ($0.01 per share). Adjusting for the impact of these items results in an adjusted net income attributable
to shareholders of $106.9 million ($0.52 per share basic) for the same comparable period of the prior year.
The weighted average number of basic shares outstanding for the year ended August 31, 2023, was 199,521,000
compared to 205,905,000 in the prior year. The average number of shares outstanding in the current year
decreased as a result of the purchase and cancellation of Class B Non-Voting Participating Shares under the
Company’s normal course issuer bid (“NCIB”), which took place between January 2022 and October 2022.
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
Other comprehensive income for the year ended August 31, 2023 was $14.4 million, compared to $15.7 million
in the prior year. For the year ended August 31, 2023, other comprehensive income includes an actuarial gain
on the remeasurement of post-employment benefit plans of $9.6 million, an unrealized gain on the fair value
of cash flow hedges of $4.9 million and an unrealized gain from foreign currency translation adjustments of
$1.1 million, offset by an unrealized loss on the fair value of financial assets of $1.2 million. In the year ended
August 31, 2022, other comprehensive income includes an unrealized gain on the fair value of financial assets
of $5.0 million, an unrealized gain on the fair value of cash flow hedges of $4.9 million, an actuarial gain on the
remeasurement of post-employment benefit plans of $4.5 million and an unrealized gain from foreign currency
translation adjustments of $1.3 million.
TELEVISION
The Television segment is comprised of 33 specialty television services, 15 conventional television stations,
digital and streaming platforms, a social media digital agency, a social media creator network, technology and
media services, and the Corus content business, which consists of the production and distribution of films and
television programs, merchandise licensing, book publishing and animation software (disposed of on August
23, 2023).
FINANCIAL HIGHLIGHTS
(thousands of Canadian dollars)
Revenue
Advertising
Subscriber
Distribution, production and other
Total revenue
Expenses
Segment profit (1)
Segment profit margin (1)
(1) As defined in the “Key Performance Indicators and Non-GAAP Financial Measures” section
Year ended August 31,
2023
2022
768,036
502,257
138,175
1,408,468
1,067,888
340,580
24%
859,598
518,483
114,627
1,492,708
1,034,563
458,145
31%
18 | Corus Entertainment Annual Report 2023
Revenue for the year ended August 31, 2023 decreased 6% as a result of declines of 11% in advertising revenue
and 3% in subscriber revenue, partially offset by an increase of 21% in distribution, production and other
revenue. Advertising demand and spending across the North American television media industry remains
challenged due to macroeconomic conditions, lower audiences and the lack of new scripted shows as a result
of the Writers Guild of America (“WGA”) and SAG-AFTRA strikes. For the year, almost all advertising categories
showed declines as advertisers continued to hold, reduce or cut spending compared to the prior year with the
exception of the iGaming and travel categories. Subscriber revenue declined from the prior year as a result
of declines in the traditional linear business that exceeded growth from streaming services. The increase in
distribution, production and other revenue was primarily driven by higher production deliveries by Nelvana,
production service work at Aircraft Pictures as well as higher Corus Studios content distribution revenue,
partially offset by a decline in merchandising and book publishing sales.
Expenses for the year ended August 31, 2023 were up 3% from the prior year as a result of a 7% increase in direct
cost of sales, offset by a 4% decrease in employee costs and a 1% decrease in other general and administrative
costs. The increase in direct cost of sales was driven by a $35.6 million (or 6%) increase in amortization of
program rights and a $12.8 million (or 54%) increase in amortization of film investments. The increase in
amortization of program rights was driven by a ramp up of Canadian content expenditures and renewed
foreign output deals, while the increase in amortization of film investments was driven by a higher number of
deliveries at both Nelvana and Aircraft Pictures. The decrease of $9.7 million in employee costs resulted from
lower commission costs, lower short-term compensation accruals and lower pension costs. Other general and
administrative expenses decreased $1.4 million from the prior year as a result of the elimination of CRTC Part II
fees effective April 1, 2023, reduced tariff royalties that are positively correlated with revenue, lower professional
fees and signal transmission costs, offset by increases in marketing costs for the promotion of the traditional
linear business and streaming services, which included the return of the upfront event, and higher software and
system license fees.
Segment profit(1) for the year ended August 31, 2023 was down 26%. This decline was primarily a result of the
decrease in advertising and subscriber revenue and the increase in amortization of program rights and film
investments. Segment profit margin(1) for the year ended August 31, 2023 was 24%, down from 31% in the
prior year.
(1) As defined in the “Key Performance Indicators and Non-GAAP Financial Measures” section of this report.
RADIO
The Radio segment is comprised of 39 radio stations situated primarily in urban centres in English Canada,
with a concentration in the densely populated area of Southern Ontario. Corus is one of Canada’s leading radio
operators in terms of audience reach.
FINANCIAL HIGHLIGHTS
(thousands of Canadian dollars)
Revenue
Expenses
Segment profit (1)
Segment profit margin (1)
(1) As defined in the “Key Performance Indicators and Non-GAAP Financial Measures” section
Year ended August 31,
2022
2023
105,878
102,772
92,611
89,312
13,460
13,267
13%
13%
Revenue in the year ended August 31, 2023, decreased $3.1 million (3%) from the prior year. The decline in
advertising revenue for the year was across all categories with the largest declines in the professional services,
retail, entertainment and automotive categories.
Direct cost of sales and general and administrative expenses decreased $3.3 million (4%) for the year ended
August 31, 2023. The decrease was a result of cost containment measures and the elimination of the CRTC
Part II fees effective April 1, 2023, which were offset by increased copyright tariff fees, higher podcasting costs
and premise rental costs.
Radio’s segment profit(1) in the year ended August 31, 2023 increased by $0.2 million from the prior year as a
result of cost control measures. Segment profit margin(1) for the year at 13% was consistent with the prior year.
(1) As defined in the “Key Performance Indicators and Non-GAAP Financial Measures” section of this report.
Corus Entertainment Annual Report 2023 | 19
CORPORATE
The Corporate results are comprised of the incremental cost of corporate overhead in excess of the amount
allocated to the operating divisions.
FINANCIAL HIGHLIGHTS
(thousands of Canadian dollars)
Share-based compensation
Other general and administrative costs
Year ended August 31,
2022
4,196
23,573
2023
(1,257)
21,292
20,035
27,769
Share‐based compensation includes expenses related to the Company’s stock options and other long‐term
incentive plans (such as Performance Share Units ‐ “PSUs”, Deferred Share Units – “DSUs”, and Restricted Share
Units – “RSUs”). The expense fluctuates with changes in assumptions, primarily regarding the Company’s share
price and number of units estimated to vest.
Share-based compensation in the year ended August 31, 2023 decreased by $5.5 million from the prior year. The
decrease for the year results from the decline in the Company’s share price from the prior year, which is partially
offset by the change in the fair value of the total return swaps (refer to note 13 in the audited consolidated
financial statements for further details on this swap arrangement).
Other general and administrative costs decreased $2.3 million for the year ended August 31, 2023 from the prior
year. The decrease from the year is principally attributable to decreases in short-term compensation accruals
and lower consulting and professional fees, offset by increases in system and license fees, as well as costs related
to changes in the supplementary executive retirement plan recorded in the first quarter of fiscal 2023.
QUARTERLY CONSOLIDATED FINANCIAL INFORMATION
SEASONAL FLUCTUATIONS
Corus’ operating results are subject to seasonal fluctuations that can significantly impact quarter-to-quarter
operating results. The Company’s advertising revenue is dependent on general advertising revenue and retail
cycles associated with consumer spending activity, accordingly the first and third quarter results tend to be the
highest and second and fourth quarter results tend to be the lowest in a fiscal year. The Company’s distribution
and production revenue is dependent on the number and timing of film and television programs delivered.
Consequently, the Company’s results may fluctuate materially from period-to-period and the results of any
one period are not necessarily indicative of results for future periods.
The following table sets forth certain unaudited data derived from the Company’s interim condensed consolidated
financial statements for each of the eight most recent quarters ended August 31, 2023. In Management’s
opinion, these unaudited interim condensed consolidated financial statements have been prepared on a basis
consistent with the audited consolidated financial statements filed on SEDAR+ on October 30, 2023, for the
years ended August 31, 2023 and August 31, 2022, except as disclosed in note 3 of the consolidated financial
statements.
20 | Corus Entertainment Annual Report 2023
(thousands of Canadian dollars, except per share amounts)
Earnings (loss) per share
Revenue
Segment
profit (1)
Net
income (loss)
attributable to
shareholders
Adjusted
net income (loss)
attributable to
shareholders (1) Basic
Diluted
Adjusted
basic (1)
Free
cash
flow (1)
2023
4th quarter
3rd quarter
2nd quarter
1st quarter
2022
4th quarter
3rd quarter
2nd quarter
338,843
397,335
343,871
46,273
96,905
59,135
50,412
(495,073)
(15,450)
(9,075) $ 0.25
(2.48)
18,042 $
(0.08)
(13,880) $
$ 0.25 $
(2.48) $
$
(0.08) $
$
431,191
131,692
31,387
33,466 $ 0.16
$ 0.16 $
339,594
433,458
361,661
56,189
123,728
86,556
(367,065)
29,621
16,221
(17,116) $
(1.82)
30,159 $ 0.14
16,964 $ 0.08
$
(1.82) $
$ 0.14 $
$ 0.08 $
1st quarter
(1) As defined in the “Key Performance Indicators and Non-GAAP Financial Measures” section of this report.
76,931 $ 0.37
177,170
76,165
463,873
$ 0.36 $
(0.04)
0.09
(0.07)
31,654
25,979
28,397
0.17
20,810
(0.08)
0.15
0.08
44,713
27,468
88,417
0.37
79,987
ITEMS CAUSING VARIATIONS IN QUARTERLY RESULTS
• Net income attributable to shareholders for the fourth quarter of fiscal 2023 was negatively impacted by non-
cash television broadcast licence and other asset impairment charges of $100.0 million ($0.37 per share) and
restructuring and other costs of $5.0 million ($0.02 per share), while positively impacted by a gain on a business
disposition of $142.3 million ($0.68 per share).
• Net loss attributable to shareholders for the third quarter of fiscal 2023 was negatively impacted by non-cash
television goodwill, broadcast licence and other asset impairment charges of $590.0 million ($2.53 per share)
and restructuring and other costs of $10.6 million ($0.04 per share).
• Net loss attributable to shareholders for the second quarter of fiscal 2023 was negatively impacted by
restructuring and other costs of $2.1 million ($0.01 per share).
• Net income attributable to shareholders for the first quarter of fiscal 2023 was negatively impacted by
restructuring and other costs of $2.8 million ($0.01 per share).
• Net loss attributable to shareholders for the fourth quarter of fiscal 2022 was negatively impacted by a non-
cash television goodwill impairment charge of $350.0 million ($1.73 per share) and restructuring and other
costs of $1.8 million ($0.01 per share).
• Net income attributable to shareholders for the third quarter of fiscal 2022 was negatively impacted by
restructuring and other costs of $4.2 million ($0.02 per share) and was positively impacted by a debt refinancing
gain of $3.4 million ($0.01 per share).
• Net income attributable to shareholders for the second quarter of fiscal 2022 was negatively impacted by
restructuring and other costs of $1.0 million ($nil per share).
• Net income attributable to shareholders for the first quarter of fiscal 2022 was negatively impacted by
restructuring and other costs of $1.0 million ($nil per share).
OUTLOOK
Given continuing macroeconomic uncertainty and its impact on advertising demand, combined with the
extended WGA strike (resolved on October 9, 2023) and ongoing labour action of SAG-AFTRA, which impedes
the Company’s ability to deliver new episodes of scripted programming on television, resulting in lower audience
levels and advertising demand, the Company expects its Television advertising revenue in the first quarter of fiscal
2024 will decline in the range of 15-20% compared to the prior year. Amortization of program rights is expected
to decline by a similar range along with the further implementation of additional cost management initiatives.
The Company has suspended its dividend and intends to redirect the use of free cash flow from dividends on
Class A and Class B shares to debt repayment. While the Company continues to expect improvement in the
macro-environment and the normalization of program supply over the medium term, visibility remains limited
at this time.
Corus Entertainment Annual Report 2023 | 21
FINANCIAL POSITION
Total assets at August 31, 2023 were $2.7 billion, compared to $3.5 billion at August 31, 2022. The following
discussion describes the significant changes in the consolidated statements of financial position since August
31, 2022.
Current assets at August 31, 2023 were $394.2 million, down $10.3 million from August 31, 2022.
Cash and cash equivalents increased by $1.3 million from August 31, 2022. Refer to the discussion of cash flows
in the next section.
Accounts receivable decreased $15.8 million from August 31, 2022. The decrease was primarily as a result of a
decrease in trade accounts receivable. The accounts receivable balance is subject to seasonal trends. Typically,
the balance of trade receivables is higher at the end of the first and third quarters and lower at the end of the
second and fourth quarters as a result of the broadcast advertising revenue seasonality. The Company carefully
monitors the aging and collection performance of its accounts receivable.
Tax credits receivable increased $11.5 million from August 31, 2022 as a result of accruals relating to film
productions exceeding tax credit receipts.
Investments and other assets increased $10.5 million from August 31, 2022, primarily as a result of an increase
in the net asset position of certain post employment benefit plans, increases in fair value of the foreign exchange
forward contracts, the interest rate swap and the fair value adjustment to venture funds.
Property, plant and equipment decreased $25.8 million from August 31, 2022 as a result of depreciation expense
exceeding additions.
Program rights increased $8.3 million from August 31, 2022, as additions of acquired rights of $603.4 million
were offset by amortization of $595.2 million.
Film investments decreased $6.0 million from August 31, 2022, as film additions (net of tax credit accruals) of
$30.7 million were offset by film amortization of $36.8 million.
Intangibles decreased $738.9 million from August 31, 2022, as a result of non-cash impairments in the Television
CGU to goodwill of $295.2 million, broadcast licences of $219.8 million, brands and trade marks of $175.0 million,
as well as amortization of $119.6 million, offset by renewals and extensions of several trade mark agreements
of $58.3 million and net additions to other assets of $12.4 million.
Accounts payable and accrued liabilities increased $38.2 million from August 31, 2022, principally as a result of
higher trade marks payable, trade accounts payable, program rights payable, and increases in software license
liabilities, offset by lower dividends payable and short-term compensation accruals.
Provisions, including the long-term portion, increased $0.5 million from August 31, 2022, principally as a result
of restructuring-related additions exceeding payments and a reduction in asset retirement obligations as a
result of property disposals.
Long-term debt, including the current portion, as at August 31, 2023 was $1,092.4 million compared to $1,261.7
million as at August 31, 2022. As at August 31, 2023, the $13.4 million classified as the current portion of
long-term debt consists of interim production financing. During the year ended August 31, 2023, the Company
decreased bank debt and interim production financing by $171.7 million, incurred $1.0 million of deferred fees
for an amendment to the Credit Facility and amortized $3.5 million of deferred financing charges.
Other long-term liabilities decreased $59.7 million from August 31, 2022, primarily from decreases in long-term
program rights payable, trade mark liabilities, lease liabilities, unearned revenues and long-term employee
obligations, offset by increases in software license liabilities.
Share capital decreased by $500.9 million from August 31, 2022 as a result of the reduction in stated capital
approved at the Company’s Annual General and Special Meeting of Shareholders on January 19, 2023 as well as
785,000 shares repurchased and canceled under the NCIB. Contributed surplus increased from the reduction
in stated capital, the share repurchases under the NCIB and share-based compensation expense.
22 | Corus Entertainment Annual Report 2023
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Overall, the Company’s cash and cash equivalents position increased by $1.3 million for the year ended August
31, 2023. Free cash flow(1) for the year ended August 31, 2023 was $106.8 million compared to $239.6 million in
the prior year. The decrease in free cash flow(1) for the year is mainly attributable to a decrease in cash provided
by operating activities of $94.2 million and a decrease in cash provided by investing activities, which excluded
the net proceeds from the sale of Toon Boom on August 23, 2023 of $141.2 million that was used to pay down
bank debt and are not included in free cash flow(1) in the current year and in the prior year related to a $43.5
million non-recurring venture fund distribution as well as a decline in cash used to purchase property, plant and
equipment of $4.5 million.
Cash provided by operating activities for the year ended August 31, 2023 was $122.7 million compared to
$216.8 million for the prior year. The decrease for the year of $94.2 million arises from a lower net income
from operations, adjusted for non-cash items of $50.0 million and a higher spend on program rights and film
investments of $110.3 million and $19.2 million, respectively, offset by a decrease of non-cash working capital
balances of $85.3 million.
Cash provided by investing activities for the year ended August 31, 2023 was $125.3 million compared to $25.2
million in the prior year. The increase of $100.1 million in the year was attributable to net proceeds from the
sale of Toon Boom of $141.2 million, net of divested cash and a decrease in cash used on property, plant and
equipment of $4.5 million, offset by cash provided in the prior year related to a venture fund distribution of $43.5
million and a business combination, net of cash acquired of $3.6 million.
Cash used in financing activities in the year ended August 31, 2023 was $246.7 million compared to $230.8
million for the prior year. The increase in cash used of $15.9 million in the year arises principally from the prior
year issuance of the $250.0 million 2030 Notes, offset by a decrease in bank loan repayments of $183.1 million, a
decrease in shares repurchased under the NCIB of $32.6 million, lower dividends paid of $16.0 million and lower
financing fees of $4.9 million.
(1) A definition and reconciliation of free cash flow to the consolidated statements of cash flows is provided in the “Key Performance Indicators
and Non-GAAP Financial Measures” section of this report.
LIQUIDITY
The Company manages its capital structure in accordance with changes in economic conditions and with
appropriate prudence. Currently, the Company’s capital management activities are focused on maintaining
appropriate financial flexibility in order to pursue organic growth and achieve business objectives and repaying
debt, all with the objective to provide returns to its shareholders.
The Company defines capital as the aggregate of its shareholders’ equity and total long-term debt less cash and
cash equivalents. In order to maintain or adjust its capital structure and enable its capital management activities,
from time to time, the Company may elect to issue or repay long-term debt, issue shares, repurchase shares
through a normal course issuer bid, pay dividends or undertake any other activities as deemed appropriate
under the specific circumstances.
The Company monitors capital using several key performance metrics including net debt to segment profit ratio.
The Company’s stated long-term objective is a leverage target (net debt to segment profit ratio) below 2.5 times.
In the short term, the Company may permit the long-term leverage range to be exceeded, but endeavours to
return to the leverage target range.
As at August 31, 2023, the Company was in compliance with all loan covenants, had a cash and cash equivalents
balance of $56.2 million and had available $300.0 million under the Revolving Facility, $285.9 million of which could
be drawn. Management believes that cash flow from operations and the existing Credit Facility will provide the
Company with sufficient financial resources to fund its operations for the following 12 months.
On October 26, 2023, the Company’s Credit Facility was amended to increase the maximum total debt to cash
flow ratio required under the financial covenants up to and including August 31, 2024, reintroduce mandatory
quarterly repayments of the Term Facility, change certain conditions related to the use of proceeds on asset
disposals and to introduce additional restrictions on distributions to shareholders. For further details on the
Credit Facility, refer to note 13 of the Company’s consolidated financial statements.
On February 17, 2023, the Company’s Credit Facility with a syndicate of banks was amended. The amendment
revised total debt to cash flow ratio covenants on the Term Facility and the Revolving Facility.
Corus Entertainment Annual Report 2023 | 23
On February 28, 2022, the Company issued the 2030 Notes that pay interest at 6.0%. The Company used the
net proceeds of the Notes issuance to repay bank debt.
On March 18, 2022, the Company’s credit agreement with a syndicate of banks was amended and restated. The
principal amendments were to extend the maturity on both the Term Facility and Revolving Facility to March 18,
2027 and to eliminate quarterly mandatory repayments and mandatory repayments from the net proceeds from
the issue of other debt on the Term Facility.
TOTAL CAPITALIZATION
As at August 31, 2023, total capitalization was $1,480.1 million compared to $2,093.1 million at August 31, 2022,
a decrease of $613.0 million. The decrease in total capitalization is due to an increase in accumulated deficit of
$439.7 million, a decrease in bank debt of $169.3 million and a reduction in lease liabilities of $8.3 million, offset
by an increase in accumulated other comprehensive income of $4.8 million and cash and cash equivalents of
$1.3 million.
OFF BALANCE SHEET ARRANGEMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS
The Company has a Canadian interest rate swap agreement to fix the interest rate on a portion of its outstanding
term loan facility, which expires on March 18, 2027. The fair value of future cash flows of interest rate swap
derivatives change with fluctuations in market interest rates. The estimated fair value of these agreements as
at August 31, 2023 was an asset of $6.7 million (2022 – $nil) (refer to note 13 of the audited consolidated financial
statements for further details on interest rate swap agreements).
As at August 31, 2023, the Company has a series of forward foreign exchange contracts totalling $45.0 million
U.S. dollars, to fix the foreign exchange rate and therefore cash flows related to a portion of the Company’s U.S.
dollar denominated liabilities. These forward contracts are not designated as hedges for accounting purposes;
they are measured at fair value at each reporting date by reference to prices provided by the counterparty. The
counterparty of the forward contracts is a highly rated financial institution and the Company does not anticipate
any non-performance. The estimated fair value of future cash flows of the forward contract derivatives change
with fluctuations in the foreign exchange rate of the U.S. dollar to Canadian dollars. The estimated fair value
of these agreements as at August 31, 2023 was an asset of $2.2 million (2022 – an asset of $1.6 million), which
has been recorded in the consolidated statements of financial position as investment and other assets (refer to
note 5 of the audited consolidated financial statements for further details), and within other expense (income),
net in the consolidated statements of loss and comprehensive loss (refer to note 19 of the audited consolidated
financial statements for further details).
The Company has a total return swap agreement on 1,706,000 share units to offset its exposure to changes in
the fair value of certain cash settled share-based compensation awards. The estimated fair value of this Level 1
financial instrument will fluctuate with the market price of the Company’s shares. The counterparty of this swap
agreement is a highly rated financial institution and the Company does not anticipate any non-performance.
The estimated fair value of this agreement as at August 31, 2023 is a liability of $6.0 million (2022 – a liability of
$4.0 million), which has been recorded in the consolidated statement of financial position as an other long-term
liability (refer to note 14 of the audited consolidated financial statements for further details) and within employee
expenses in the consolidated statement of loss and comprehensive loss (refer to note 17 of the audited
consolidated financial statements for further details).
24 | Corus Entertainment Annual Report 2023
CONTRACTUAL COMMITMENTS
The Company has the following undiscounted contractual obligations at August 31, 2023:
(thousands of Canadian dollars)
Total debt (1)
Purchase obligations (2)
Lease liabilities (3)
Other obligations (4)
Total Within 1 year
2 - 3 years
4 - 5 years More than 5 years
1,334,909
918,655
280,015
181,497
53,434
619,197
32,694
104,311
80,000
292,910
61,986
77,169
928,975
6,548
55,971
17
272,500
—
129,364
—
Total contractual obligations
401,864
(1) Principal and interest repayments on bank debt and Notes. Credit Facility amendments effective October 26, 2023 will increase principal
2,715,076
991,511
512,065
809,636
repayments on Term Facility within 1 year by $17.5 million, 2-3 years by $34.9 million and decrease 4-5 years by $52.4 million.
(2) Purchase obligations are contractual obligations under contracts relating to program rights, satellite distribution and license costs and
various other operating expenditures, that the Company has committed to for periods ranging from one to five years.
(3) Lease liabilities relate to right-of-use assets which include land and buildings related to television and radio operations and equipment
leases.
(4) Other obligations include financial liabilities, trade marks, other intangibles and forward foreign exchange contracts.
In addition to the contractual obligations in the table above, the Company will pay interest on any bank debt and
Notes outstanding in future periods. In fiscal 2023 the Company incurred interest on bank debt and Notes of
$75.2 million (2022 – $58.5 million).
KEY PERFORMANCE INDICATORS AND NON-GAAP FINANCIAL MEASURES
The Company measures the success of its strategies using a number of key performance indicators. Certain
investors, analysts and others utilize these measures in assessing the Company’s operational and financial
performance and as an indicator of its ability to service debt and return cash to shareholders. These have been
outlined below, including a discussion as to their relevance, definitions, calculation methods and underlying
assumptions. In addition to disclosing results in accordance with IFRS as issued by the IASB, the Company also
provides non-IFRS or non-GAAP financial measures as a method of evaluating the Company’s performance.
Certain key performance indicators are not financial measurements in accordance with IFRS and should not be
considered as an alternative to net income or any other measure of performance under IFRS. These non-IFRS
or non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other issuers.
The Company also uses supplementary financial measures that are not (a) presented in the financial statements
and (b) are, or are intended to be, disclosed periodically to depict the historical or expected future financial
performance, financial position or cash flow, that are not a non-GAAP financial measure or a non-GAAP ratio.
The Company has disclosed optimized advertising revenue and new platform revenue as supplementary
financial measures as discussed below.
REVENUE
Revenue is a measurement defined by IFRS. Revenue is the gross inflow of economic benefits arising in the
course of the ordinary activities of an entity that results in increases in equity, such as cash, receivables or
other consideration arising from the sale of products and services and is net of items such as trade or volume
discounts and certain excise and sales taxes. It is one of the bases upon 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 marketplace.
The primary sources of revenue for the Company are outlined in the Overview section.
The Company’s sources of revenue are well diversified, with revenue streams for the year ended August 31, 2023
derived primarily from three areas: advertising 57%, subscriber fees 33% and distribution, production and other
10% (2022 – 60%, 32% and 8%, respectively).
OPTIMIZED ADVERTISING REVENUE
Optimized advertising revenue is calculated as advertising revenue attributable to audience segment selling
and to the Cynch automated buying platform expressed as a percentage of Television advertising revenue.
The Company believes this is an important measure to enable the Company and investors to evaluate the
performance on how Television advertising is sold.
Corus Entertainment Annual Report 2023 | 25
(thousands of Canadian dollars, except percentages)
Optimized advertising revenue (numerator)
Television advertising revenue (denominator)
Optimized advertising revenue percentage
2023
2022
% change
411,461
371,540
768,036
859,598
54%
43%
11%
(11%)
NEW PLATFORM REVENUE
This metric combines subscriber revenue from streaming initiatives and advertising revenue from digital
platforms expressed as a percentage of total Television advertising and subscriber revenue. New platform
revenue reflects progress on the Company’s participation in rapidly growing streaming distribution platforms
and digital advertising markets.
(thousands of Canadian dollars, except percentages)
New platform revenue (numerator)
Television advertising revenue
Television subscriber revenue
2023
145,521
768,036
502,257
Total Television advertising and subscriber revenue (denominator)
1,270,293
1,378,081
New platform revenue percentage
11%
10%
2022
142,284
% change
2%
859,598
518,483
(11%)
(3%)
(8%)
DIRECT COST OF SALES, AND GENERAL AND ADMINISTRATIVE EXPENSES
Direct cost of sales, and general and administrative expenses include amortization of program rights (costs of
programming intended for broadcast, from which advertising and subscriber revenue is derived); amortization of
film investments (costs associated with internally produced and acquired television and film programming, from
which distribution and licensing revenue is derived); other cost of sales relating to production service work, book
publishing, merchandising, marketing (research and advertising costs); employee remuneration; regulatory
licence fees; and, selling, general administration which includes overhead costs. For the year ended August 31,
2023, consolidated direct cost of sales, and general and administrative expenses were comprised of direct cost
of sales 57%, employee remuneration 28% and general and administrative expenses 15% (2022 – 54%, 30%,
and 16%, respectively).
SEGMENT PROFIT AND SEGMENT PROFIT MARGIN
Segment profit is calculated as revenue less direct cost of sales, general and administrative expenses as reported
in the Company’s consolidated statements of income (loss) and comprehensive income (loss). Segment profit
and segment profit margin may be calculated and presented for an individual operating segment, a line of
business, or for the consolidated Company. The Company believes these are important measures as they
allow the Company to evaluate the operating performance of its business segments or lines of business and its
ability to service and/or incur debt; therefore, it is calculated before (i) non-cash expenses such as depreciation
and amortization; (ii) interest expense; and (iii) items not indicative of the Company’s core operating results,
and not used in management’s evaluation of the business segment’s performance, such as: goodwill and
broadcast licence impairment; intangible and other asset impairment; debt refinancing; non-cash gains or
losses; restructuring and other costs; gain (loss) on disposition; and certain other income and expenses as
included in note 19 to the audited consolidated financial statements. Segment profit is also one of the measures
used by the investing community to value the Company and is included in note 21 to the audited consolidated
financial statements. Segment profit margin is calculated by dividing segment profit by revenue. Segment profit
and segment profit margin do not have any standardized meaning prescribed by IFRS and are not necessarily
comparable to similar measures presented by other companies. Segment profit and segment profit margin
should not be considered in isolation or as a substitute for net income prepared in accordance with IFRS as
issued by the IASB.
(thousands of Canadian dollars, except percentages)
Revenue
Direct cost of sales, general and administrative expenses
Segment profit
Segment profit margin
2023
1,511,240
1,177,235
334,005
22.0%
2022
1,598,586
1,154,943
443,643
28.0%
26 | Corus Entertainment Annual Report 2023
FREE CASH FLOW
Free cash flow is calculated as cash provided by operating activities less cash used in investing activities, as
reported in the consolidated statements of cash flows, and then adding back cash used specifically for business
combinations and strategic investments and deducting net proceeds from dispositions. Free cash flow is a key
metric used by the investment community that measures the Company’s ability to repay debt, finance strategic
business acquisitions and investments, pay dividends, and repurchase shares. Free cash flow does not have any
standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by
other companies. Free cash flow should not be considered in isolation or as a substitute for cash flows prepared
in accordance with IFRS as issued by the IASB.
(thousands of Canadian dollars)
Cash provided by:
Operating activities
Investing activities
Deduct: cash provided by business dispositions, acquisitions and strategic
investments (1)
Free cash flow
(1) Strategic investments are comprised of investments in venture funds and associated companies.
2023
2022
122,667
125,274
247,941
(141,101)
106,840
216,835
25,172
242,007
(2,422)
239,585
ADJUSTED NET INCOME AND ADJUSTED BASIC EARNINGS PER SHARE
Management uses adjusted net income attributable to shareholders and adjusted basic earnings per share as a
measure of enterprise-wide performance. Adjusted net income attributable to shareholders and adjusted basic
earnings per share are defined as net income and basic earnings per share before items such as: non-recurring
gains or losses related to acquisitions and/or dispositions of investments; costs of debt refinancing; non-cash
impairment charges; and business acquisition and restructuring costs. Management believes that adjusted net
income attributable to shareholders and adjusted basic earnings per share are useful measures that facilitate
period-to-period operating comparisons. Adjusted net income attributable to shareholders and adjusted basic
earnings per share do not have any standardized meaning prescribed by IFRS and are not necessarily comparable
to similar measures presented by other companies. Adjusted net income attributable to shareholders and
adjusted basic earnings per share should not be considered in isolation or as a substitute for net income (loss)
and basic earnings (loss) per share attributable to shareholders as prepared in accordance with IFRS as issued
by the IASB.
(thousands of Canadian dollars, except per share amounts)
Net loss attributable to shareholders
Adjustments, net of income tax:
Goodwill, broadcast licence and other asset impairment
Debt refinancing
Gain on disposition
Restructuring and other costs
Adjusted net income attributable to shareholders
Basic loss per share
Adjustments, net of income tax:
Goodwill, broadcast licence and other asset impairment
Debt refinancing
Gain on disposition
Restructuring and other costs
Adjusted basic earnings per share
2023
(428,724)
578,453
—
(136,479)
15,303
28,553
2022
(245,058)
348,597
(2,526)
—
5,925
106,938
($2.15)
($1.19)
$2.90
—
($0.68)
$0.07
$0.14
$1.69
($0.01)
—
$0.03
$0.52
Corus Entertainment Annual Report 2023 | 27
NET DEBT
Net debt is calculated as long-term debt plus lease liabilities, less cash and cash equivalents as reported in the
consolidated statements of financial position. Net debt is an important measure as it reflects the principal
amount of debt owing by the Company as at a particular date. Net debt does not have any standardized meaning
prescribed by IFRS and is not necessarily comparable to similar measures presented by other companies.
(thousands of Canadian dollars)
Total debt, net of unamortized financing fees and prepayment options
Lease liabilities
Cash and cash equivalents
Net debt
2023
1,092,384
126,084
(56,163)
1,162,305
2022
1,261,650
134,369
(54,912)
1,341,107
NET DEBT TO SEGMENT PROFIT
Net debt to segment profit is calculated as net debt divided by segment profit for the year. Net debt to segment
profit is an important measure of the Company’s liquidity and it is one of the key metrics used by the investing
community to measure the Company’s ability to repay debt through ongoing operations. Net debt to segment
profit does not have any standardized meaning prescribed by IFRS and is not necessarily comparable to similar
measures presented by other companies.
(thousands of Canadian dollars)
2022
1,341,107
Net debt (numerator)
Segment profit (denominator) (1)
443,643
3.02
Net debt to segment profit
Proforma net debt to segment profit (2)
3.02
(1) Reflects aggregate amounts for the most recent four quarters, as detailed in the table in the “Quarterly Consolidated Financial
2023
1,162,305
334,005
3.48
3.62
Information” section.
(2) Proforma net debt to segment profit ratio as at August 31, 2023 excludes contributions to segment profit from Toon Boom for the most
recent four quarters.
ENTERPRISE RISK MANAGEMENT FRAMEWORK AND APPROACH
Risks primarily arise from the Company’s business environment, strategies and objectives. Corus strives to
proactively mitigate its risk exposures through rigorous performance planning, risk review and reporting, and
effective operations and business management. Residual exposure for certain risks is further mitigated through
appropriate insurance coverage where this is deemed to be most effective and commercially available.
Corus strives to avoid taking on undue risk outside of its risk appetite and assesses potential risks for alignment
with business strategies, objectives, values and risk tolerance. The Company has established an Enterprise
Risk Management Framework (“ERMF”) which includes identifying, assessing, managing, monitoring and
communicating the principal business risks that impact the Company.
Corus’ ERMF supports its risk culture, capabilities and practices that we rely on to manage risks in creating,
preserving and realizing value. The ERMF emphasizes transparency and accountability and supports a common
understanding among stakeholders of how Corus manages risk. Principally, the ERMF enables Corus to:
• determine and define the types risks arising from or most relevant to its strategy and operations;
• create and maintain effective risk management governance and oversight; and
• appropriately manage and respond to risks.
Corus has defined the following major risk categories and related subcategories to which its businesses and
operations could be exposed:
28 | Corus Entertainment Annual Report 2023
MAJOR RISK CATEGORY
STRATEGIC
FINANCIAL
OPERATIONAL
LEGAL AND COMPLIANCE
REPUTATIONAL
RISK
Customer Change and Adoption
Industry and Competition (including suppliers)
Economic Conditions
Credit
Tax
Market
Liquidity
Process
People
Health and Safety
Technology and Cybersecurity
Physical and Infrastructure
Legal
Regulatory
Privacy
Compliance
Reputational
Environmental & Social
Risk Culture
Corus believes that risk culture starts with the “tone at the top” i.e. set by the Board of Directors (“Board”),
Chief Executive Officer (“CEO”), and the Executive Leadership Team (“ELT”). The Company’s culture embraces
accountability, listening, learning, communication, and transparency. This includes a culture and approach to
risk taking and management, which means that all employees are encouraged to identify and escalate risks when
they believe the Company is or could be operating outside of its risk appetite.
At Corus, ethical conduct is an important part of the risk culture. Corus has a Code of Business Conduct that
applies to and guides employees and directors in their business activities and conduct and requires them to
act, at all times, with integrity, professionalism and ethically. If there are any concerns that cannot be or are
not addressed through the governance structures in place to identify, discuss and manage risk, Corus has
comprehensive policies and processes to enable any employee to raise a concern, including anonymously
through a hotline.
Risk Appetite
Part of delivering against Corus’ strategy and doing the right thing for its stakeholders is growing value. As such,
Corus takes risks necessary to build and grow its businesses, products and brands, but only if they:
• fit the Corus business strategy;
• are understood and manageable; and
• do not harm the reputation of the Company or its brand(s).
RISK GOVERNANCE
The Company’s governance structure emphasizes and balances Board and management level oversight with
clear ownership of and management of risks within businesses. The Company’s Board has overall responsibility
for risk governance and ensures that there are processes in place to effectively identify, assess, monitor, and
manage principal business risks to which the Company is exposed. This includes oversight of the implementation
of enterprise risk management procedures and the development of entity level controls. The Board carries out
its risk management mandate primarily through its Committees and senior management as follows:
• the Audit Committee, which is responsible for overseeing the Company’s policies and processes designed
to mitigate and manage applicable regulatory compliance risk, including the adequacy of internal control
over financial reporting;
• the Human Resources and Compensation Committee, which is responsible for the Company’s policies and
processes designed to mitigate and manage risks associated with the Company’s compensation plans;
Corus Entertainment Annual Report 2023 | 29
• the Corporate Governance Committee, which is responsible for maintaining and monitoring the Company’s
governance processes, including its Code of Conduct;
• the Executive Leadership Team, which is responsible for the establishment of enterprise risk management
processes; and
• the Company’s Risk Management Committee (“RMC”), which oversees and manages risk management
processes.
In addition, entity level controls, (including the Company’s Code of Business Conduct), financial controls and
other governance processes are in place and monitored regularly by the Company’s Risk and Compliance group,
which functions independently from management and provides the Audit Committee and management with
objective evaluations of the Company’s risk and control environment.
A strategic risk assessment is conducted as part of the Company’s strategic planning process to identify and
assess the principal business risks facing the Company and their potential impact on the achievement of the
Company’s strategic objectives. Emerging risks are included in the assessment and risks are prioritized using
standard risk assessment criteria.
The RMC, which reports to the ELT, is mandated to maintain the Company’s ERMF for identifying, assessing,
managing, monitoring, and reporting the principal business risks that impact the Company. The RMC is
comprised of various senior managers from across the organization, with all key operating segments and
functions represented. The Committee meets on a quarterly basis to review strategic, operational, financial,
legal and compliance as well as reputational risks to the Company. The likelihood and impact of these risks are
ranked on a high, medium and low basis. These risks are reviewed by the Company’s Disclosure Committee, the
ELT, and finally, with the Board as part of the quarterly risk review process.
As part of comprehensive risk management, Corus has risk identification and assessment mechanisms that
are focused on recognizing and understanding existing risks, risks that may arise from new or evolving business
initiatives, aggregate risks, and non-traditional or emerging risks. The Company supports a process of risk
identification and assessment that enable and enhance its understanding of risk interdependencies and support
the identification of emerging risk.
Corus has risk control processes that are established and communicated through the Audit Committee and other
committees of the Board, ELT and management approved policies. The Company also has associated processes,
guidelines and procedures that further enable compliance with these policies. In addition, where required or
appropriate, there are risk controls in the form of monetary limits, limitations on delegated authorities to risk
tolerances, processes for escalating concerns, incidents or breaches, and review and testing procedures for key
controls. The Risk and Compliance group has a direct line of reporting to the Audit Committee and conducts
independent testing of key controls in the Company as well as continuous monitoring.
There is regular reporting on risk throughout business activities and in business forums. In addition, the RMC
regularly reports on its risk monitoring activities to the ELT, the Board and its committees. Finally, committees
are established and convened to monitor and report on certain specific risk areas that may require more focus,
particular expertise or frequency of monitoring.
RISKS AND UNCERTAINTIES
This section provides a summary description of the principal risks and uncertainties that could have a material
adverse effect on the business and financial results of the Company. This discussion is not exhaustive and any
discussion about risks should be read in conjunction with the “Cautionary Statement Regarding Forward-Looking
Information” and the Company’s most recent public disclosure documents.
A. STRATEGIC RISKS
ECONOMIC CONDITIONS
The Company’s operating performance is affected by general Canadian and worldwide economic conditions.
Changes or volatility in domestic or international economic conditions or economic uncertainty or geopolitical
conflict and tensions, may affect discretionary consumer and business spending, resulting in increased or
decreased demand for Corus’ product offerings. In addition, elevated consumer price index inflation driven by
sharp increases in energy and food prices as well as supply disruptions and strong demand for goods can also
affect the Company’s business, operations and financial performance. All of the foregoing factors may adversely
affect the Company through disruption to supply chains, increased costs of labour or disruption to availability
of labour, related reduced advertising demand or spending, or lower demand for the Company’s products
and services, all of which may lead to decreased revenue or profitability. Finally, in all cases, the Company’s
business and financial condition are subject to audience and consumer acceptance of its brands, programming,
30 | Corus Entertainment Annual Report 2023
and talent. Changes to or negative perception of any of Corus’ brands, programming or talent could adversely
affect the Company, including by affecting audience and consumer acceptance, reducing the attractiveness
or value of the Company’s brand, programming or talent to advertisers or partners, or disrupting its ability to
provide programming as planned or anticipated. Any or all of the foregoing can negatively impact the Company’s
operations and financial results and plans.
INDUSTRY AND COMPETITION; CUSTOMER CHANGE AND ADOPTION
Industry and Competition
Corus operates in an open and highly competitive marketplace. The television production industry and television
and radio broadcasting services have always involved a substantial degree of risk. There can be no assurance of
the economic success of the Company’s radio stations, music formats, talent, television programs or networks
because the revenue derived from such services and products depend upon audience acceptance of these or
other competing programs released into, or networks existing in the marketplace 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 which could rapidly change, and many of which are
beyond Corus’ control. The lack of audience acceptance for Corus’ radio stations, television programs, specialty
(discretionary) television networks and conventional (basic) television stations would have an adverse impact on
Corus’ businesses, results of operations, prospects and financial condition. Corus’ failure to compete in these
areas could materially adversely affect Corus’ results of operations.
Corus also faces competition from both regulated and unregulated players using existing, new or evolving
technologies and from illegal services. The rapid deployment of evolving technologies, services, products
and strategic partnerships have reduced the traditional lines between internet and broadcast services and
further expanded the competitive landscape. The Company may also be affected by changes in customer
discretionary spending patterns, which in turn are dependent on consumer confidence, disposable consumer
income and general economic conditions. New or alternative media technologies and business models, such
as video-on-demand, subscription-video-on-demand, personal video recorders, mobile television, internet
protocol television, over-the-top internet-based video entertainment services, connected TVs, virtual
multichannel programming distributors, audio streaming platforms, digital radio services, satellite radio,
podcasting and direct-to-home satellite compete with, or may in the future compete with, Corus’ services for
programming and audiences. As well, mobile devices like smartphones and tablets allow consumers to access
content anywhere, anytime and are creating consumer demand for mobile, portable or free content. These
technologies and business models may increase audience fragmentation, reduce subscribers to Corus’ services,
reduce Corus’ linear television and radio ratings or have an adverse effect on advertising revenue from local and
national audiences. Technological developments may also disrupt traditional distribution platforms by enabling
content owners to provide content directly to consumers, thus bypassing traditional content aggregators. While
Corus invests in infrastructure, technology and programming to maintain its competitive position, there can
be no assurance that these investments will be sufficient to maintain Corus’ market share or performance in
the future.
Television – Broadcast Business
The financial success of Corus’ specialty television services depend on obtaining revenue from advertising
and subscribers, while Corus’ conventional television services depend primarily on obtaining revenue from
advertising. These services are also dependent on the effective management of programming costs. Any failure
by Corus’ discretionary and basic television services to compete effectively could materially adversely affect
Corus’ results of operations.
i) Advertising and Subscriber Revenue
The conventional and specialty television business and the advertising markets the Company operates in are
highly competitive. Numerous broadcast and specialty television networks, alternative forms of entertainment,
as well as online advertising platforms and websites, and over-the-top digital distribution services that are not
regulated by the CRTC compete with Corus for advertising and subscriber revenue. The CRTC also does not
require the licensing of new discretionary services. These services can be launched at any time using the CRTC’s
exemption order which further increases competition. Corus’ services also compete with a number of foreign
programming services which have been authorized for distribution in Canada by the CRTC, such as A+E and CNN.
This competition is for both supply of programming and also for audiences and can affect both the costs and
revenue of a network. 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 favourably position and package the services to subscribers to achieve
high distribution levels. Corus’ ability to compete successfully depends on a number of factors, including its
Corus Entertainment Annual Report 2023 | 31
ability to secure popular television and other programming rights for all platforms, including traditional linear
broadcast rights and non-linear rights, in order to achieve audience acceptance, high distribution levels and
attract advertising. Corus’ ability to continue to attract advertising customers also depends on its ability to
meet the evolving expectations of its advertising customers. Accordingly, there can be no assurance that Corus’
television services will be able to maintain or increase their current share of audience and advertising revenue
as well as maintain or increase current levels of subscriber distribution and penetration.
ii) Programming Expenditures / Audience Acceptance
Programming costs are the most significant expenses in the Television segment. Although the Company has
processes to effectively manage these costs, increased competition in the television broadcasting industry due
to factors mentioned above, changes in viewer preferences and other developments could impact the availability
of premium content and/or increase the cost of programming content which could have a material adverse effect
on Corus’ operations and/or financial results. Labour action by the WGA (resolved on October 9, 2023) and
SAG-AFTRA are currently having a significant impact on the availability of programming. Programming costs
are also subject to inflationary factors and macroeconomic conditions.
In addition, programming content may be purchased or commissioned for broadcast one or two years in advance,
making it more difficult to predict how such content will perform in terms of audience acceptance. Audience
acceptance cannot be accurately predicted. The success of a program also depends on the type and extent of
promotional and marketing activities, the quality and acceptance of competing programs, general economic
conditions and other intangible factors, all of which can rapidly change and many of which are beyond Corus’
control. A failure to select and obtain content demanded by viewers or otherwise a lack of audience acceptance
of Corus’ television programming could have a material adverse effect on Corus’ operations and/or financial
results.
Commission of original television programs requires a significant amount of capital. Factors such as labour
disputes, technology changes or other disruptions affecting aspects of production may affect Corus or its
independent production partners and cause cost overruns and delay or hamper completion of a production
(see also Reliance on Key Suppliers and Customers).
Television – Content Business
The production and distribution of 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, streaming entities, independent television production companies and book publishers around the
world. Many of these competitors are significantly larger than Corus and have substantially greater resources,
including easier access to capital. Corus competes with other television and motion picture production
companies (including streamed content producers) for ideas and storylines created by third parties as well as
for actors, directors and other personnel required for a production.
Further, vertical integration of the television broadcast industry worldwide and the creation and expansion of
new networks, which create a substantial portion of their own programming, have decreased the number of
available timeslots for programs produced by third-party production companies. There also continues to be
intense competition for the most attractive timeslots offered by those services. 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 favourable to Corus or that Corus will be able to increase or maintain
penetration of broadcast schedules.
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. Radio advertising revenue is highly dependent
upon audience share (derived from interest in on-air talent, music formats, and other intangible factors). Other
stations may change programming formats at any time 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’ stations could be adversely impacted, resulting in lower net revenue.
Radio broadcasting is also subject to competition from other media, such as television, outdoor advertising,
print and internet as well as alternative media technologies, such as satellite, music streaming, podcasting and
music downloading services. Potential advertisers can substitute advertising through the broadcast television
system (which can offer concurrent exposure on a number of networks to enlarge the potential audience)
32 | Corus Entertainment Annual Report 2023
or through daily, weekly and free-distribution newspapers, outdoor billboard advertising, magazines, other
print media, direct mail marketing, internet and mobile advertising. Competing media commonly target the
customers of their competitors, and advertisers regularly shift dollars from radio to these competing media
and vice versa. In markets near the U.S. border, such as Kingston, Ontario, Corus also competes with U.S. radio
stations. Accordingly, there can be no assurance that Corus’ radio stations will be able to maintain or increase
their current audience share and advertising revenue share.
KEY CUSTOMERS AND SUPPLIERS
Corus uses and recognizes the value of using third parties to support its businesses, as they provide access to
leading applications, processes, products and services, specialized expertise, innovation, economies of scale,
and operational efficiencies. However, they may also create reliance upon the provider with respect to continuity,
reliability, and security, and their associated processes, people and facilities. Applications, processes, products,
and services of its providers could be subject to failures or disruptions as a result of human error, natural disasters,
utility disruptions, pandemics or other public health emergencies, malicious insiders, cyber-attacks or other
criminal or terrorist acts, or non-compliance with regulations, which could in turn impact Corus’ operations.
Such adverse effects could limit Corus’ ability to deliver products and services to customers, or damage its
reputation, which in turn could lead to disruptions to its businesses and financial loss.
Reliance on Key Customers and Suppliers
Corus procures its content from a limited number of key third party suppliers, some of whom are global in scale
and have significant negotiating leverage. Certain of these third parties are launching or have launched their
own direct-to-consumer businesses in Canada, which could impact the terms on which the Company is able
to secure premium content. While Corus may have alternate sources of content, there can be no assurance
that Corus would be able to source alternate content desirable to the Company’s viewers. The loss of a key
supplier may adversely affect Corus’ operations and/or its financial results. Suppliers may also experience
business difficulties, including labour strikes, privacy and/or security incidents, restructure their operations, be
consolidated with other suppliers, discontinue products or sell their operations or products to other vendors,
which could affect the future development and support of the Company’s services.
Corus enters into long-term agreements with various Broadcasting Distribution Undertakings (“BDUs”) for
the distribution of its television services. Corus derives most of its subscriber revenue from its relationships
with a small number of the largest BDUs. As these contracts expire, there could be an adverse effect on Corus’
operations and/or its financial results if Corus is unable to renew them on acceptable terms or at all, including
revenue per subscriber and packaging that affects the networks’ subscriber reach. Similarly, the majority of
Corus’ advertising revenue is derived from a small number of large advertising agency “upfront commitments”.
Any significant change in volume, rates and/or other terms associated with these sales commitments may have
a positive or adverse effect on Corus’ operations and/or financial results.
Corus relies on certain information technology providers, telecommunications carriers and certain utilities to
conduct Corus’ business. Any disruption to the services provided by these suppliers, including labour strikes and
other work disruptions, bankruptcies, technical difficulties or other events affecting the business operations of
these information technology providers, telecommunications carriers and utilities may affect Corus’ ability to
operate and therefore have an adverse impact on its operations and/or its financial results.
The media industry continues to evolve with a number of recently announced mergers and acquisitions, which
may have commercial and competitive implications for the Company and the industry generally. For example,
on April 3, 2023 a transaction closed whereby Rogers Communications Inc. (“Rogers”) purchased all outstanding
Class A Shares and Class B Shares of Shaw Communications Inc. (“Shaw”, with the transaction referred to as
the “Rogers/Shaw Transaction”). As a result of this transaction, the Shaw Family Living Trust (“SFLT”) is one
of the largest shareholders in Rogers, but SFLT is not the controlling shareholder. As the integration takes
place, there is uncertainty as to the commercial and competitive landscape implications of the merger. While
Corus maintains strong business relationships with its key suppliers, clients and partners, including Rogers,
the terms and conditions or revenue derived from current subscriber, programming, licensing and advertising
arrangements may change in the future and the other risks noted above in respect of BDUs and advertiser
revenues may also materialize. In addition, the funding that was provided by Shaw to Corus for the production
of local news, pursuant to CRTC policies, has been discontinued as Rogers has redirected these funds to its
affiliated Citytv television stations.
Corus Entertainment Annual Report 2023 | 33
ACQUISITIONS AND OTHER STRATEGIC TRANSACTIONS
The Company may, from time to time, make strategic acquisitions which involve significant risks and
uncertainties. As such, the Company may experience difficulties in realizing the anticipated benefits, incur
unanticipated expenses and/or have difficulty incorporating or integrating the acquired business, the occurrence
of which could have a material adverse effect on the Company.
B. OPERATIONAL RISKS
Corus inherently, and in normal course business, faces operational risks. This includes risks, losses, or other
negative impacts associated with or loss resulting from inadequate or failed internal processes or technology
or from human activities or from external events. Corus seeks to actively and continuously identify, monitor,
manage, mitigate and, where required, remediate operational risk in order to create and sustain shareholder
value, successfully execute its business strategies, and operate efficiently. However, failure to adequately
mitigate such risks could impact Corus’ ability to meet strategic objectives, pose a risk of censure or penalty,
may lead to litigation, and increase reputational, financial, legal and other risks.
PEOPLE
Employee Retention, Recruitment, Engagement and Diversity
Corus’ operations depend on the expertise, efforts and engagement of its employees. The talent and workforce
in Corus’ industry is highly competitive and the Company’s success is highly linked to its ability to attract and
retain a high-performing, diverse, and engaged workforce, including in key growth areas, of technology and
digital media fields as well as in specialized creative, and on-air areas. To achieve this, the Company recognizes
the need to focus on providing career and development opportunities, competitive compensation and benefits,
fostering an inclusive, equitable and diverse workplace, and a great employee experience to both attract and
retain qualified and high performing individuals. The Company undertakes annual talent review and succession
planning processes to assess capabilities for all areas of the business. The outcomes from these processes
inform plans throughout the Company to retain, develop, or acquire talent.
Failure to maintain and achieve this focus, and changes to the Company’s workforce as a result of factors
such as turnover, restructuring, retirement, inadequate succession planning, cost reduction initiatives, labour
disruption, deterioration in overall employee morale and engagement, or other events, could have an adverse
impact on Corus’ operations and/or financial results.
The Company’s broadcasting assets in television and radio are federally regulated by statute and by related
policies governing on air depiction and employment diversity. The Company is committed to building and
maintaining a diverse workforce and an inclusive and equitable work environment throughout the organization.
To this end the Company has a dedicated Diversity, Equity and Inclusion team to define and lead execution of
action plans, as well as a Diversity, Equity and Inclusion Council to provide feedback and ideas about diversity,
equity and inclusion priorities, and monitors the implementation of the triennial Employment Equity Plan.
The Company recognizes that an essential element of building a strong and successful company is having and
hiring people with the right capabilities, experiences, character and mind-set, and a diverse, equitable and
inclusive workforce. In fiscal 2023, the Company continued to enhance how it sources, attracts and selects
new Board candidates and employees, with a lens of diversity, equity and inclusion, and a goal of better reflecting
the diversity of the communities in which it operates. To further support its commitment to diversity, equity
and inclusion, seven Employee Resource Groups have been formed to support Black, Latinx / Hispanic, Asian,
2SLGBTQ+ and indigenous communities, as well as people with disabilities and Women. These groups provide
the Company an important sounding board, resource and partners to develop Corus’ diversity, equity and
inclusion initiatives. Failure to address perceived or actual systemic racism and bias, to recruit and retain a
diverse workforce or foster and maintain a diverse, equitable and inclusive work environment could have an
adverse impact on Corus’ ability to execute its strategies, reputation, operations or financial results.
Unionized Labour
As at August 31, 2023, 28% of the Company’s employees were employed under one of six collective agreements
represented by two unions. Renegotiating collective bargaining agreements could result in higher labour
costs and be challenging in the context of a declining workload due to transformation, a maturing footprint
and improved efficiencies. During the bargaining process there may be project delays and work disruptions,
including work stoppages or work slowdowns, which could have an adverse impact on Corus’ operational and/
or financial results.
34 | Corus Entertainment Annual Report 2023
TECHNOLOGY AND CYBERSECURITY
Technology and cyber security risks for virtually all businesses have increased in recent years. This is due, in part,
to the proliferation, sophistication and constant evolution of new technologies and attack methodologies used
by sociopolitical entities, organized criminals, malicious insiders, or service providers, nation states, hackers
and other internal or external parties. In the normal course of business, Corus’ technologies, systems and
networks, and those of third parties including key suppliers and partners (including mobile, internal, and cable
providers) providing services to Corus or distributing Corus’ product and content, continue to be subject to
cyber-attacks, and may be subject to disruption of services, data security or other breaches. In the ordinary
course and from time to time, it does experience a limited number of service disruptions. In general, Corus can
experience financial, operational, reputational and other losses or damage arising from technology or cyber
security threats to itself or to key suppliers, customers and partners.
Information Technology Systems
The day-to-day operations of Corus are highly dependent on information technology systems and internal
business processes and the ability of Corus and its service providers to protect the Company’s networks and
information technology systems. An inability to operate or enhance information technology systems could have
an adverse impact on Corus’ business, including its ability to manage its day-to-day business and operations,
deliver programming and services, produce accurate and timely invoices, manage operating expenses and
produce accurate and timely financial reports. Although Corus has taken steps to reduce these risks, there can
be no assurance that potential failures of, or deficiencies in, these systems or processes will not have an adverse
effect on Corus’ operations and/or its financial results.
An inability to protect the Company’s systems, applications and information repositories against cyber threats,
which include cyber-attacks such as, but not limited to, hacking, computer viruses, denial of service attacks,
industrial espionage, unauthorized access to confidential, proprietary or sensitive information, unauthorized
access to corporate or network information technology systems or other breaches of security could result in
service disruptions to, or could have an adverse impact on, the Company’s business operations, including the
ability to deliver programming and other related services, and could harm the Company’s brand, reputation
and customer relationships. Although the Company has taken steps to reduce these risks, there can be no
assurance that future cyber threats, if to occur, will not have an adverse effect on the Company’s operating
results. Establishing response strategies and business continuity protocols to maintain operations if any
disruptive event materializes is critical to the Company. A failure to complete planned and sufficient testing,
maintenance or replacement of the Company’s networks, equipment and facilities as appropriate, could disrupt
the Company’s operations or require significant resources.
The Company uses several cloud-based systems in the operation of its business. The Company depends on
these cloud-based technology system providers to provide uninterrupted system access as well as to ensure the
Company’s data, which resides in those systems, is appropriately protected and safeguarded. An inability to have
continuous access to these systems could result in an adverse impact to Corus’ day-to-day operations, including
the inability to generate accurate and timely financial data. The third party cloud-based system providers may
also be subject to cyber-attacks, which could result in the loss of data and/or reputational damage. There can be
no assurance that the steps Corus takes to reduce the risk of service outages or cyber-attacks will be adequate
to prevent them in the future.
INTELLECTUAL PROPERTY RIGHTS
Television / Radio – Broadcast Business
Corus pays significant licence fees to acquire rights to content and branding on an exclusive basis.
From time to time, various third parties may contest or infringe upon these owned or licensed rights. Any such
infringement, including increasingly rampant online piracy and illegal distribution of copyrighted television
content, may have a material adverse impact on Corus’ operations and financial results. Corus takes commercially
reasonable efforts to minimize these risks including negotiating and enforcing protective covenants in its
content licensing agreements.
There are systems in place to track proper registration and renewal of Corus’ owned trade mark portfolio, and
to have notice of third-party applications that may potentially conflict with Corus’ trade marks, all with a view to
ensuring that Corus’ registrable intellectual property is afforded the maximum protection under applicable law.
Upon notice of a potential infringement of its owned or licensed intellectual property, Corus reviews these
matters to determine what, if any, steps may be required or should be taken to protect its rights, including legal
action, negotiated settlement and/or seeking remedies from intellectual property licensors. There can be no
assurance that the steps that Corus takes to establish and protect its intellectual property will be adequate to
Corus Entertainment Annual Report 2023 | 35
prevent or eliminate infringement of its intellectual property and protect Corus’ ability to competitively market
and brand its television and digital services and/or be the exclusive distribution source of key licensed content
in Canada.
Corus’ linear television and digital platforms and services broadcast, make available, distribute and may
contain many forms of content including licensed audio-visual programming, text, news, graphics, databases,
photographs, recipes, audio files (music or otherwise) and rich interactive content, blog content, and
user-generated content including story comments, and internal and external links. Corus takes steps to
ensure that procedures are in place to clear rights and to monitor user-generated content. There remains a
risk, however, that some potentially defamatory or infringing content can be posted on a Corus website. Corus
carries insurance coverage against this risk but there remains an exposure to liability for third-party claims, as
well as potential for reputational or brand risk.
Television – Content Business
Corus must be able to protect its trade marks, copyrights and other proprietary rights to competitively produce,
distribute and licence its television programs and published materials and market its merchandise. Accordingly,
Corus devotes resources to the establishment and protection of trade marks, copyrights and other proprietary
rights on a worldwide basis.
From time to time, various third parties may 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 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 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.
NEWS OPERATIONS
Global News’ primary directive is to report accurate, balanced, timely and comprehensive news and information
in the public interest. Independence is a fundamental Global News value and, accordingly, Global News will resist
attempts at censorship or pressure to alter news content, real or apparent. Integrity, fairness and transparency
are at the foundation of the Company’s news gathering process, and Global News is committed to reporting
news without distortion or misrepresentation.
In support of this directive, the Company has promulgated and has in effect a comprehensive set of Journalistic
Principles and Practices setting out guidelines and standards for all news staff in their dealings with frequently
asked editorial, ethical and legal, and professional conduct questions. These Journalistic Principles and Practices
adhere closely to, amongst other things, the Radio Television Digital News Association Canada’s Code of
Ethics and Professional Standards, the Canadian Association of Broadcasters’ Code of Ethics and the Canadian
Association of Journalists Ethics Guidelines.
Due to the unique nature of news-gathering and news-reporting, a number of risks may also arise in the
ordinary course of Global News’ investigation and reporting on the activities of individuals, corporations and
governments. These include legal and ethical risks such as claims in respect of defamation, invasion of privacy,
misrepresentation, and infringement of other rights (for example, Intellectual Property Rights and Piracy). A
significant part of news-gathering and reporting arises in the context of court proceedings. Certain mandatory
publication bans apply to criminal proceedings and, in addition, a court may impose a discretionary publication
ban or sealing order in respect of the proceedings or materials used or related to investigations leading to a
criminal charge. Where Global News has not otherwise successfully overturned or reduced the scope of a
publication ban or sealing order through proper legal process, its policy is to fully comply with court-ordered
publication bans and sealing orders. However, because there is no formalized publication ban notice system in
place in most provinces, and because publication bans can often be subject to different interpretations, there
is no assurance that Global News will not inadvertently breach a publication ban or sealing order and if that
happens, there is a risk that Global News may be held to be in contempt of court. Similarly, Global News’ policy
is to resist production orders, warrants and subpoenas for its footage and other materials through proper
legal process but, where this is not successful, Global News will comply with production orders, warrants and
subpoenas of proper scope and detail.
36 | Corus Entertainment Annual Report 2023
Due to Global News’ strong commitment to editorial independence, certain news-reporting may pose a risk to the
Company’s advertising revenue streams if advertisers are displeased with their portrayal in news programming
and, as a result, choose to reduce or withdraw entirely, their advertising business with the Company.
The deliberate deployment of journalists to dangerous and hostile environments may expose employees and the
Company to risks related to kidnapping, injury and death, as well as costs related to medical care and emergency
repatriation of employees.
The Journalistic Principles and Practices articulate appropriate ways to deal with the above risks and describes
proper protocol when such risks arise. In addition, news staff are provided with regular training to mitigate these
risks and the Company carries customary and appropriate insurance to further mitigate risks. However, there
can be no assurances that the Journalistic Principles and Practices comprehensively mitigate such risks. Events
out of the Company’s control may affect the Company’s ability to operate and therefore have an adverse impact
on its operations and/or its financial results.
PRODUCTION OF FILM AND TELEVISION PROGRAMS
Each production is an individual artistic work and its commercial success is determined primarily by the size
of the market and audience acceptance. The latter cannot be accurately predicted. The success of a program
is also dependent on the type and extent of promotional and marketing activities, the quality and acceptance
of other competing programs, general economic conditions and other ephemeral and intangible factors, all of
which can rapidly change and many of which are beyond Corus’ control.
Production of film and television programs requires 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 (see Reliance
on Key Customers and Suppliers).
Financial risks exist in productions relating to tax credits and co-production treaties. The aggregate amount
of federal and provincial tax credits a qualifying production may receive can constitute a material portion of a
production budget and typically can be as much as 30% to 40% of the Canadian production budget. 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, a number of Corus’
productions are co-productions involving international treaties that 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, revenue 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.
Revenue from the film library can vary substantially from year to year, both by geographic territory and by year
of production. The timing of the Company’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.
HEALTH & SAFETY
Pandemics, epidemics and other systemic or widespread health and safety risks could occur, and could materially
negatively impact the Company’s business, affairs, operations, financial condition, liquidity, availability of
credit and results of operations, including but not limited to its ability to maintain operations or meet revenue
or expense targets, projections or plans. These health and safety risks could have an adverse effect on the
Company’s ability to maintain operations, the general economy and financial markets and the ability of suppliers
to provide products and serviced needed to operate the business. Any or all of the foregoing can result in a
declining level of retail and commercial activity, which could, in turn, have a negative impact on the demand for,
and prices of, the Company’s products and services. By nature, the severity and length of such risks depend on
future developments that are highly uncertain and cannot be predicted with any meaningful precision.
Corus Entertainment Annual Report 2023 | 37
ENVIRONMENTAL
Global climate change could exacerbate certain of the threats facing the Company, including the frequency and
severity of weather-related events. Corus’ operations, service performance, reputation and business continuity
depend on how well the Company and its contracted service providers, protect networks and IT systems, as
well as other infrastructure and facilities, from events such as fire, natural disaster (including, without limitation,
seismic and severe weather-related events such as snow and wind storms, wildfires, flooding, extended heat
waves, and tornadoes), power loss, building cooling loss and other events. Establishing response strategies
and business continuity protocols to maintain service consistency if any disruptive event materializes is critical
to the achievement of continued operations and could require significant resources and result in significant
remediation costs.
The Company also owns or leases a variety of properties, including its transmitter sites. Some or all of these
sites may contain fuel storage systems for backup power generation. Leaks or spills from any of these storage
tanks may pose an environmental risk or result in adverse environmental conditions that could result in liability
for the Company.
Failure to understand the opportunities and expectations resulting from the societal shift to increased focus
on Environmental, Social and Governance (“ESG”) factors could result in additional operational costs and
overlooking areas for innovation or differentiation.
Any of the above-mentioned events could have an adverse effect on Corus’ operational and/or financial results.
C. FINANCIAL RISKS
LEVERAGE AND FINANCIAL COVENANT RISK
While the Company aims to prudently manage capital and debt levels, there is always risk associated with financial
covenants. This risk is exacerbated by significant changes in operations or in the macroeconomic environment.
In certain circumstances, the Company may exceed the historic or targeted leverage range, but endeavours to
return to historic levels as the Company believes that provides a reasonable framework for providing a return
to shareholders and is supportive of maintaining the Company’s credit ratings.
Under the Credit Facility and unsecured Notes, the Company has undertaken to comply with financial covenants
including leverage ratios. Failure to remain in compliance with financial covenants could result in the termination
of lender commitments to make advances under the Credit Facility, the acceleration of debt repayment and, in
the case of secured lenders, the exercise of any and all rights under the security provided.
The Company’s maintenance of increased levels of debt could adversely affect its financial condition and results
of operations. In addition, increased debt service payments could adversely impact cash flows from operating
activities, thereby reducing the amount of cash flows available for working capital, capital expenditures,
acquisitions, future business opportunities, and other general corporate purposes, as well as limiting the
Company’s ability to pay dividends.
DIVIDEND PAYMENTS
Payment of dividends on the Company’s Class A Voting Shares and Class B Non-Voting Shares is dependent
on the cash flow of the Company, compliance with financial covenants under the Credit Facility and Notes, and
approval of the Board of Directors, and is subject to change. The Company manages its approach to capital
allocation with prudence and in accordance with changes in economic and industry conditions. In fiscal 2024,
the Company announced it would prudently suspend the dividend and redirect the use of free cash flow from
dividends to debt repayment given the impact of continuing macroeconomic uncertainty, the extended WGA
strike (which resolved on October 9, 2023) and the ongoing labour action of SAG-AFTRA on audience levels,
advertising demand and revenue. Actual results may differ from the Company’s expectations and there can be
no assurance that the Company will resume dividend payments in the future. Suspension or cessation of the
payment of dividends could materially affect the trading price of the Class B Non-Voting Shares.
MARKET VOLATILITY
The market price for the Class B Non-Voting Shares may be volatile and subject to fluctuations in response to
numerous factors, many of which may be beyond Corus’ control. Financial markets have experienced significant
price and volume fluctuations that have been particularly affected by the market prices of equity securities
of companies and that have often been unrelated to the operating performance, underlying asset values or
prospects of such companies. The market price for the Company’s Class B Non-Voting Shares may decline in
the future, even if the Company’s operating results, underlying asset values or prospects have not changed.
38 | Corus Entertainment Annual Report 2023
CAPITAL MARKETS
The Company may require continuing access to capital markets to sustain its operations. Disruptions in the
capital markets, including changes in market interest rates or lending practices or the availability of capital,
could have a materially adverse effect on the Company’s ability to raise or refinance debt. There can be no
assurances that additional financing could be available to the Company when needed or on terms that are
acceptable. The Company’s inability to raise or refinance capital when required to fund on-going operations or
capital expenditures could limit growth and may have a material adverse effect on Corus, its operations and/or
its financial results.
TAXES
Corus’ business is subject to various tax laws, changes to tax laws and the adoption of new tax laws, regulations
thereunder and interpretations thereof, which may have adverse tax consequences to the Company. While
Corus believes it has adequately provided for all income and commodity taxes based on information that is
currently available, the calculation and the applicability of taxes in many cases require significant judgement
in interpreting tax rules and regulations. In addition, Corus’ tax filings are subject to government audits which
could result in material changes in the amount of current and deferred income tax assets and liabilities and other
liabilities which may, in certain circumstances, result in the assessment of interest and penalties.
INTEREST RATE RISK
The Company utilizes long-term financing extensively in its capital structure, which includes a banking facility, as
more fully described in note 14 to the audited consolidated financial statements. Interest rates on the balance of
the bank loans fluctuate with Canadian bankers’ acceptances. As such, Corus is exposed to risk on the interest
rate of the Company’s debt.
The Company manages its exposure to floating interest rates through the maintenance of a balance of fixed rate
and floating rate debt or through the use of interest rate swap contracts to fix the interest rate on its floating
rate debt. As at August 31, 2023, 91% (2022 – 59%) of the Company’s consolidated long-term debt was fixed
with respect to interest rates. Increases in interest rates could materially increase the cost of its financing and
have a material adverse effect on the Company’s financial performance.
CREDIT RISK
In the normal course of business, the Company is exposed to credit risk from its accounts receivable from
customers. The carrying amounts for accounts receivable are net of applicable allowances for doubtful accounts,
which are estimated based on past experience, specific risks associated with the customer and other relevant
information. As at August 31, 2023, the Company’s trade receivables and allowance for doubtful accounts
balances were $271.1 million and $2.7 million, respectively.
FOREIGN CURRENCY RISK
A portion of the Company’s revenue and expenses are in currencies other than Canadian dollars and, therefore,
are subject to fluctuations in exchange rates. In fiscal 2023 approximately 7% (2022 – 5%) of Corus’ total revenue
was in foreign currencies, the majority of which was U.S. dollars. As at August 31, 2023, the Company had U.S.
dollar denominated payables of approximately $182.0 million (2022 – $238.8 million). Accordingly, fluctuations
in the Canadian dollar - U.S. dollar exchange rate may adversely affect Corus’ financial results.
The Company manages its exposure to foreign exchange risk on U.S. dollar payments through the use of foreign
exchange forward contracts to fix the exchange rate on a portion of its U.S. denominated payables. As at August
31, 2023, $45.0 million (2022 – $80.5 million in U.S. dollar) of the Company’s U.S. denominated payables were
fixed with respect to foreign exchange rates.
The impact of foreign exchange gains and losses are described in note 23 to the audited consolidated financial
statements in the Risk Management section.
HOLDING COMPANY STRUCTURE
Substantially all of Corus’ business activities are operated by its subsidiaries. As a holding company, the
Company’s ability to meet its financial obligations is dependent primarily upon the receipt of interest and
principal payments on intercompany advances, management fees, cash dividends and other payments from
its subsidiaries together with proceeds raised by the Company through the issuance of equity and the incurrence
of debt, and from proceeds received on the sale of assets. The payment of dividends and the making of loans,
advances and other payments to the Company by its subsidiaries may be subject to statutory or contractual
restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business and
other considerations.
Corus Entertainment Annual Report 2023 | 39
D. OWNERSHIP RISK
CONTROL OF CORUS BY THE SHAW FAMILY
A majority of the outstanding Class A Voting Shares of the Company are held by SFLT and its subsidiaries. As at
August 31, 2023, SFLT and its subsidiaries hold 2,885,530 Class A Voting Shares, representing approximately
86% of the outstanding Class A Voting Shares, for the benefit of descendants of the late JR Shaw and Carol Shaw.
The sole trustee of SFLT is a private company controlled by a board comprised of seven directors, including,
as at August 31, 2023, Heather Shaw, Julie Shaw, three other members of their family and two independent
directors. The Class A Voting Shares are the only shares entitled to vote in all shareholder matters except in
limited circumstances as described in the Company’s Annual Information Form. Accordingly, SFLT is, and as
long as it holds a majority of the Class A Voting Shares will continue to be able to elect a majority of the Board
of Directors of the Company and to control the vote on matters submitted to a vote of the Company’s Class A
shareholders.
E. LEGAL AND COMPLIANCE
Legal and compliance risk includes legal, regulatory, compliance and related risks. These are risks associated
with the Company’s actual, threatened, anticipated or perceived failure to comply with applicable laws, rules,
regulations, regulatory guidance, contractual obligations, Code of Conduct, or standards of fair business
conduct or market conduct, which could lead to financial loss, fines, sanctions, liabilities, or reputational harm
that could be material to the Company.
Corus is exposed to such risks, inherently, in virtually all of its activities as part of the normal course of business.
While it strives to appropriately and continuously identify, monitor, manage, mitigate and if required, remediate,
such risks, failure to adequately mitigate such risks could impact Corus’ ability to meet strategic objectives,
pose a risk of censure or penalty, may lead to litigation, and increase reputational risks. Financial penalties,
reputational damage, and other costs associated with legal proceedings, and unfavourable judicial or regulatory
determinations may also adversely affect Corus’ prospects, plans, business, results of operations and financial
condition.
Impact of Regulation and Regulatory Matters
Corus’ radio and television business activities are regulated by the CRTC under the Broadcasting Act. Accordingly,
Corus’ results of operations could be adversely affected by changes in regulations, policies and decisions by the
CRTC. These changes may relate to, or may have an impact on, among other matters, licencing, licence renewal,
competition, the television programming services the Company must distribute, infrastructure access and the
potential for new or increased fees or costs, described below. In addition, the costs of providing services may be
increased from time to time as a result of compliance with industry or legislative initiatives to address consumer
protection concerns or Internet-related issues such as copyright infringement, unsolicited commercial e-mail,
cybercrime, and lawful access. There can be no assurance that future regulatory requirements will not be
imposed on Corus. Any changes in the regulatory regime could have a material adverse effect on Corus and its
reputation, as well as Corus’ results of operations and future prospects.
The CRTC, among other things, issues licences to operate radio and television stations. The Company’s CRTC
licences must be renewed from time to time and cannot be transferred without regulatory approval. Corus’ radio
stations must also meet technical operating requirements under the Radiocommunication Act and regulations
promulgated under the Broadcasting Act.
The CRTC imposes a range of obligations upon licencees, including exhibition (number of hours broadcast)
requirements for Canadian content, Canadian content expenditure requirements and access obligations (i.e.
closed captioning or descriptive video). Any failure by the Company to comply with the conditions of a licence
could result in a revocation or forfeiture of the licence or imposition of mandatory orders from the Federal Court
that could lead to the imposition of fines.
Canadian content programming is also subject to certification by various agencies of the Canadian federal
government. If programming fails to so qualify, the Company’s television licencees would not be able to use
the programs to meet its Canadian content programming obligations and Corus’ Nelvana operations might not
qualify for certain Canadian tax credits and industry incentives.
Corus’ radio, conventional television and specialty television undertakings rely upon blanket licences held by
rights-holding collectives in order to make use of the music component of the programming and other uses
of works used or distributed by these undertakings. Under these licences, Corus is required to pay a range of
tariff royalties established by the Copyright Board pursuant to the requirements of the Copyright Act (Canada)
(the “Copyright Act”) to collectives (which represent the copyright owners) and individual copyright owners.
These royalties are paid by these undertakings in the normal course of their business. The levels of the tariff
40 | Corus Entertainment Annual Report 2023
royalties payable by Corus are subject to change upon application by the collecting societies and approval by
the Copyright Board. The Government of Canada may, from time to time, make amendments to the Copyright
Act to implement Canada’s international treaty obligations and for other purposes. Any such amendments
could result in Corus’ broadcasting undertakings being required to pay additional royalties for these licences.
Refer also to the Canadian Communications Industry – Regulatory Environment section of the Company’s
Annual Information Form for further information.
Group Based Licensing
In 2010, the CRTC adopted a “group based licensing” (“GBL”) approach for the renewal of the televisions licences
of larger groups such as Corus. This established a framework of policy and regulation that is applied on a group
basis rather than to individual licensees. The CRTC grouped all services into three licence categories: basic;
discretionary; and on-demand services. Radio licensees continue to be renewed on an individual basis.
During the weeks of November 22, 2016 through December 2, 2016, the CRTC held public hearings concerning
the renewal of the group based television licences held by the large English- and French-language ownership
groups including Corus. On May 15, 2017, the CRTC issued its decisions. All Corus English-language and
French-language television services were given new five-year licence terms, which began on September 1, 2017
and were scheduled to conclude on August 31, 2022. The key issues arising from these decisions include the
Canadian Program Expenditure (“CPE”) requirements and expenditure towards programming of public national
interest (“PNI”) which for the first time were standardized across all of the large English market media groups.
CPE requirements were set at 30% and PNI requirements were set at 5%. The CRTC also removed the vestiges
of legacy conditions of licence in accordance with the CRTC’s Let’s Talk TV policy.
Following an appeal of the 2017 GBL decisions to the federal Cabinet, on August 30, 2018, the CRTC released
“reconsideration” decisions for the television services of the large English- and French-language private
ownership groups, including Corus. Revised and additional conditions came into effect on September 1, 2018
and were intended to apply until August 31, 2022, the intended conclusion of the licence term.
As a result of the reconsideration, effective September 1, 2018, Corus’ English-language group of services
became subject to an 8.5% PNI expenditure requirement of the previous year’s gross revenue, and a requirement
to direct 0.17% of previous year’s gross revenue to the Foundation Assisting Canadian Talent on Recordings
(or “FACTOR”). Also, per the reconsideration, and effective September 1, 2018, Corus’ French-language group
of services became subject to a requirement to devote at least 50% of their CPE to original French-language
programs. That requirement increased from 50% to 75% as of September 1, 2019. Corus’ French-language
group was also required to direct 0.17% of their previous year’s gross revenue to La Fondation Musicaction était
née (or “MUSICACTION”) until the intended end of the licence term.
On July 4, 2022, the CRTC administratively renewed all Corus (and the other large television groups’) English-
and French-language television licences for two years on their existing terms and conditions with the intention
that those licences would expire on August 31, 2024.
On November 17, 2022, Corus filed an application under Part 1 of the Canadian Radio-television and
Telecommunications Rules of Practice and Procedures seeking interim relief on CPE, expenditure on PNI, and
other changes that have emerged since the Company’s last full renewal. Corus filed that application to mitigate
the impact of the CRTC’s decision to administratively renew Corus’ television licences.
On October 11, 2023, Corus filed a new application under Part 1 with the CRTC for interim relief focusing on
PNI expenditure relief and greater flexibility of the CPE underspend. On October 19, 2023, the CRTC gazetted a
proposed order to reduce Corus’ PNI to 5% of the previous year’s gross revenues and remove the requirement
that all CPE and PNI underspend be made up by the end of the licence term. The order remains pending before
the CRTC.
On February 17, 2023, the CRTC confirmed that the requirements to direct payments to FACTOR and Musication
expired on August 31, 2022, at their end of the original licence term.
On August 8, 2023, the CRTC administratively renewed Corus’ English- and French-language television licences
(and those of the other large television groups) on the existing terms and conditions for an additional two years.
These licences are now scheduled to expire on August 31, 2026.
More information can be found at www.crtc.gc.ca. Information contained on, or accessible through, third party
websites is not deemed to form a part of, or be incorporated by reference into, this MD&A.
Corus Entertainment Annual Report 2023 | 41
Broadcasting Act Amendments
On April 27, 2023, Bill C-11 (“Bill”) received royal assent. The Bill enacted amendments to the Broadcasting
Act which explicitly incorporated online broadcasting undertakings that operate in Canada into the Canadian
broadcasting regulatory framework.
Rather than prescribe an entire new broadcasting regulatory framework, the Bill brings a new class of “online
undertakings” into the existing framework and delegates authority to the CRTC to execute the transition.
To assist the CRTC, the Bill grants the regulator new regulatory tools such as: the authority to issue “administrative
monetary penalties” for non-compliance; comprehensive information-gathering and monitoring powers; and
the flexibility to structure service conditions at a business segment, corporate group and a service level.
To further guide the CRTC in those processes, on June 10, 2023, the Government published proposed directions
to guide the CRTC during its implementation of the Online Streaming Act in the Canada Gazette, Part 1 for public
consultation. Following the public consultation, the final policy directions will be published in the Canada Gazette,
Part II and will become binding on the CRTC at that time.
Concurrently, the CRTC commenced proceedings to implement changes to the Broadcasting Act in regulation.
Among other things, the CRTC is considering which online undertakings should be required to contributed to the
policy objective of the Broadcasting Act. A public appearing hearing is scheduled as part of those proceedings
in November 2023.
There is no guarantee that future broadcasting regulations will apply equitably between foreign digital and
traditional Canadian broadcasters, or will result in new reductions in regulatory requirements on Canadian
broadcasting groups.
Proposed Amendments to the Food and Drugs Act
On February 9, 2022, Liberal Member of Parliament, Patricia Lattanzio, introduced a new private member’s
bill, Bill C-252, which proposed amendments to the Food and Drug Act to prohibit certain food and beverage
advertising meeting specified nutritional criteria that are directed at children under 13. Bill C-252 is currently
at Third Reading in the House of Commons. If Bill C-252 passes Third Reading, it will go to the Senate for further
study and consultation. If passed, the legislation and related regulations would enact new restrictions on the
sale of advertising on Canadian broadcast networks.
More information can be found at www.canada.ca. Information contained on, or accessible through, third party
websites is not deemed to form a part of, or be incorporated by reference into, this MD&A.
Copyright Act Requirements
The Company’s radio, conventional television and specialty television undertakings rely upon licences issued
under the Copyright Act to make use of the music component of the programming and other uses of works used
or distributed by these undertakings. Under these licences, the Company is required to pay a range of tariff
royalties established by the Copyright Board pursuant to the requirements of the Copyright Act to collectives
(which represent the copyright owners) and individual copyright owners. These royalties are paid by these
undertakings in the normal course of their business.
The levels of the tariff royalties payable by the Company are subject to change upon application by the
collective societies and approval by the Copyright Board. The Government of Canada may, from time to time,
make amendments to the Copyright Act to implement Canada’s international treaty obligations and for other
purposes. Any such amendments could result in Corus’ broadcasting undertakings being required to pay
additional royalties for these licences.
PRIVACY
Canada’s anti-spam legislation (together with the related regulations, “CASL”) sets out a comprehensive
regulatory regime regarding online commerce, including requirements to obtain consent prior to sending
commercial electronic messages and installing computer programs. CASL is administered primarily by the
CRTC and non-compliance may result in fines of up to $10 million. To minimize risks of non-compliance, Corus
maintains a set of CASL compliance guidelines for its employees, and provides support to employees through
its Privacy Office.
The Personal Information Protection and Electronic Documents Act (“PIPEDA”) sets out the federal standards for
obtaining consent for the collection, use and retention of personal information, and similar privacy requirements
apply in Quebec, British Columbia, Alberta and the European Union. Protection of personal information is an
area of law that is fast evolving in order to keep pace with technological and business model changes. Corus
believes it takes reasonable steps to comply with privacy legislation, including having appointed a Privacy Officer
42 | Corus Entertainment Annual Report 2023
to manage all privacy issues relating to Corus’ business activities, maintaining privacy breach protocols, and
implementing a privacy impact assessment protocol on all new data collection initiatives. Breaches of security
safeguards that expose personal information collected or retained by Corus are inherently difficult to predict
and may be beyond the Company’s capacity to prevent, including in breaches of third party vendor systems
which collect or retain personal information on Corus’ behalf. In such cases, the Company may become subject
to investigations, orders or penalties from relevant privacy regulators and/or liable for civil damages through
legal actions commenced by affected individuals.
On June 16, 2022, Bill C-27 was tabled by the Minister of Innovation, Science, and Industry in Parliament. If
passed, Bill C-27 will establish a new, federal private sector privacy law, the Consumer Privacy Protection Act
(replacing PIPEDA), the Artificial Intelligence and Data Act and a new Personal Information and Data Protection
Tribunal. Bill-27 has yet to receive Royal Assent and become law. There can be no assurance that the Company’s
compliance procedures will prevent a non-compliance event, which could materially adversely impact Corus’
results of operations.
Restrictions on non-Canadian Ownership and Control
The Company is subject to Canadian ownership and control restrictions, including restrictions on the ownership
of the Class A Voting Shares under the Broadcasting Act. Although the Company believes it to be in compliance
with the relevant legislation, there can be no assurance that a future CRTC determination, or events beyond
the Company’s control, will not result in Corus ceasing to be in compliance with the relevant legislation. If
such a development were to occur, the ability of Corus’ subsidiaries to operate as Canadian carriers under the
Broadcasting Act could be jeopardized and the Company’s business could be materially adversely affected.
Litigation and Contingencies
The Company and its subsidiaries are involved in litigation arising in the ordinary course and conduct of its
business from time to time. The Company recognizes liabilities for contingencies when a loss is probable and
capable of being estimated. As at August 31, 2023, 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. Should any litigation in which
the Company becomes involved be determined against the Company, such a decision could adversely affect the
Company’s ability to continue operating as well as the trading price of the Class B Non-Voting Shares.
F. REPUTATIONAL
Corus has reputational risk associated with the potential that stakeholder perceptions, whether true or not,
regarding its business prospects, plans, practices, actions or inactions, will or may cause a significant decline in
its value, brand, liquidity or customer base, or require costly measures to address. This could include negative
perception or publicity of individuals, particularly public-facing talent, who work for or with Corus, whether true
or not. Such negative perceptions could harm Corus’ reputation overall as well as the reputations, financial
values, and prospects of individual brands, programs, stations or businesses.
The Company includes the consideration of Environmental and Social risks as part of reputational risk while
recognizing that such risks may impact or be impacted by other types of risks. Environmental and social risk is
the risk of financial loss or reputational damage resulting from the Company’s inability to appropriately meet
or adapt to changing environmental or social risks and opportunities, that impact or are associated with its
business and operations, including affects on clients or the communities in which Corus operates. A failure to
monitor and address evolving stakeholder expectations, environmental management standards, and prepare
for or comply with regulatory requirements related to ESG or sustainability disclosures and performance could
adversely impact the Company’s reputation and result in higher operational costs and, in the event of regulatory
non-compliance, financial loss.
Corus Entertainment Annual Report 2023 | 43
TRANSACTIONS WITH RELATED PARTIES
Related party transactions are reviewed by Corus’ Corporate Governance Committee, the majority of whom
are independent directors. The following sets forth the certain transactions in which the Company is involved
(see CONTROL OF CORUS BY THE SHAW FAMILY).
SHAW COMMUNICATIONS INC.
The Company has transacted business in the normal course with Shaw and its subsidiaries. These transactions
are measured at the exchange amount, which is the amount of consideration established and agreed to by the
related parties, and have normal trade terms. Shaw ceased to be a related party on April 3, 2023, when purchased
by Rogers Communications Inc.
The Company recognizes these transactions at the amounts agreed to by the related parties, which were
also approved by the Corus Corporate Governance Committee. The amounts owing for these services were
unsecured, interest-free, and generally due for payment within one month of the date of the transaction.
(thousands of Canadian dollars)
Revenue
Advertising
Subscriber
Distribution, production and other
Expenses
Cable and satellite system distribution access fees
Administrative and other fees
Advertising
Accounts receivable from Shaw
Accounts payable to Shaw
Note: Fiscal 2023 data is for the period September 1, 2022 through April 3, 2023.
OUTSTANDING SHARE DATA
2023
2022
16,807
59,724
2,165
4,960
1,024
2,152
—
—
28,772
107,171
3,673
8,510
1,762
4,009
20,793
2,292
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 as described in the Company’s most recent Annual Information Form.
(shares/units)
Shares Outstanding
Class A Voting Shares
Class B Non-Voting Shares
Stock Options
Vested
Non-vested
As at October 26,
2023
As at August 31,
2022
3,365,526
196,074,632
3,371,526
196,873,632
4,811,925
4,490,775
4,852,325
2,730,775
44 | Corus Entertainment Annual Report 2023
IMPACT OF NEW ACCOUNTING POLICIES
NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN FISCAL 2023
IFRS 3 – Business Combinations (“IFRS 3”)
Amendments to IFRS 3 were issued in May 2020, and are effective for annual periods beginning on or after
January 1, 2022, with earlier application permitted. The amendments update references within IFRS 3 to the
2018 Conceptual Framework and require that the principles in IAS 27 - Provisions, Contingent Liabilities and
Contingent Assets be used to identify liabilities and contingent assets arising from business combination. The
Company has concluded that there is no impact of adopting these amendments on its consolidated financial
statements on September 1, 2023.
IAS 37 – Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”)
Amendments to IAS 37 were issued in May 2020, and are effective for annual reporting periods beginning on
or after January 1, 2022, with earlier application permitted. The amendments address identifying onerous
contracts and specify the cost of fulfilling a contract which includes all costs directly related to the contract.
These include incremental direct costs and allocations of other costs that relate directly to fulfilling the contract.
The Company has concluded that there is no impact of adopting these amendments on its consolidated financial
statements on September 1, 2023.
PENDING ACCOUNTING PRONOUNCEMENTS
IFRS 16 – Leases (“IFRS 16”)
In September 2022, the IASB issued an amendment to IFRS 16, which add subsequent measurement
requirements for sale and leaseback transactions for seller-lessees. The amendments are effective for annual
reporting periods beginning on or after January 1, 2024 and are to be applied retrospectively. The Company is
currently assessing the impact of adopting these amendments on its consolidated financial statements.
IAS 1 – Presentation of Financial Statements (“IAS 1”)
In January 2020, the IASB issued an amendment to IAS 1, which affects only the presentation of liabilities in the
statement of financial position and not the amount or timing of their recognition. The amendments clarify that
the classification of liabilities as current or non-current should be based on rights that are in existence at the end
of the reporting period and align the wording in all affected paragraphs to refer to the right to defer settlement
by at least 12 months. That classification is unaffected by the likelihood that an entity will exercise its deferral
right. The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and are
to be applied retrospectively. The Company is currently assessing the impact of adopting these amendments
on its consolidated financial statements.
IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”)
Amendments to IAS 8 were issued in February 2021, the IASB issued Definition of Accounting Estimates, which
amends IAS 8. The amendment replaces the definition of accounting estimates. Under the new definition,
accounting estimates are “monetary amounts in financial statements that are subject to measurement
uncertainty”. The amendment provides clarification to help entities to distinguish between accounting policies
and accounting estimates. The amendments are effective for annual reporting periods beginning on or after
January 1, 2023. The Company has concluded that there is no impact of adopting these amendments on its
consolidated financial statements on September 1, 2023.
IAS 12 – Income Taxes (“IAS 12”)
Amendments to IAS 12 were issued in May 2021, the IASB issued Deferred Tax related to Assets and Liabilities
arising from a Single Transaction, which amends IAS 12. The amendment narrows the scope of the initial
recognition exemption so that it does not apply to transactions that give rise to equal and offset temporary
differences. As a result, companies will need to recognize a deferred tax asset and deferred tax liability for
temporary differences arising on initial recognition of transactions such as leases and decommissioning
obligations. The amendments are effective for annual reporting periods beginning on or after January 1, 2023
and are to be applied retrospectively. The Company has concluded that there is no impact of adopting these
amendments on its consolidated financial statements on September 1, 2023.
Corus Entertainment Annual Report 2023 | 45
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Company’s significant accounting policies are described in note 3 to the fiscal 2023 audited consolidated
financial statements and notes thereto, which have been prepared in accordance with IFRS. The preparation
of these fiscal 2023 consolidated financial statements requires management to make estimates, assumptions
and judgments that affect the reported amounts of assets and liabilities, and related disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue
and expenses during the reporting periods.
Management uses estimates when accounting for certain items such as revenue, allowance for doubtful
accounts, amortization of programming and film investments, useful lives of capital assets, asset impairments,
provisions, share-based compensation plans, employee benefit plans, deferred income taxes and impairment of
goodwill and intangible assets. Estimates are also made by management when recording the fair value of assets
acquired and liabilities assumed in a business combination.
Estimates are based on a number of factors, including historical experience, current events and other assumptions
that management believes are reasonable under the circumstances. By their nature, these estimates are subject
to measurement uncertainty and actual results could differ. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are
revised and in any future periods affected.
Actual results could differ from those estimates. Critical accounting estimates and significant judgments are
generally discussed with the Audit Committee each quarter. The most significant estimates and judgments
made by management are described below.
IMPAIRMENT OF LONG-LIVED ASSETS
At each reporting date, the Company assesses its long-lived assets, including property, plant and equipment,
program rights, film investments, goodwill and intangible assets, for potential indicators of impairment, such as
an adverse change in business climate that may indicate that these assets may be impaired. If any impairment
indicator exists, the Company estimates the asset’s recoverable amount. The recoverable amount is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets, in which case the asset is assessed as part of the CGU to which it belongs. An asset’s or CGU’s
recoverable amount is the higher of its fair value less costs to sell and its value in use. The determination of the
recoverable amount in the impairment assessment requires estimates based on quoted market prices, prices
of comparable businesses, present value or other valuation techniques, or a combination thereof, necessitating
management to make subjective judgments and assumptions.
Goodwill is allocated to a CGU or group of CGUs for the purposes of impairment testing based on the level
at which management monitors it, which is not larger than an operating segment. The Company records an
impairment loss if the recoverable amount of the CGU or the group of CGUs is less than the carrying amount.
Goodwill and indefinite-life assets, such as broadcast licences, are not amortized but are tested for impairment
at least annually or more frequently if events or changes in circumstances indicate that an impairment may have
occurred. The Company completes its annual impairment testing process for broadcast licences and goodwill
during the fourth quarter each year.
The test for impairment of either an intangible asset or goodwill is to compare the recoverable amount of the
asset or CGU (or group of CGUs in the case of goodwill) to the carrying value. The recoverable amount is the
higher of an asset’s or CGU’s (or group of CGUs in the case of goodwill) fair value less costs to sell and its value
in use. The recoverable amount is determined for an individual asset unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets (such as broadcast licences
and goodwill) and the asset’s value in use cannot be determined to equal its fair value less costs to sell. If this is
the case, the recoverable amount is determined for the CGU to which the asset belongs.
In calculating the recoverable amount, management is required to make several assumptions including, but not
limited to, segment profit growth rates, future levels of capital expenditures, expected future cash flows and
discount rates. The Company’s assumptions are influenced by current market conditions and general outlook
for the industry, both of which may affect expected segment profit growth rates and expected cash flows. The
Company has made certain assumptions for the discount and terminal growth rates to reflect possible variations
in the cash flows; however, the risk premiums expected by market participants related to uncertainties about the
industry, specific CGU or groups of CGUs may differ or change quickly depending on economic conditions and
other events. Changes in any of these assumptions could have a significant impact on the recoverable amount
of the CGU or groups of CGUs and the results of the related impairment testing.
46 | Corus Entertainment Annual Report 2023
The macroeconomic environment became increasingly uncertain in the fourth quarter of fiscal 2022,
characterized by persistently high inflation and continuing supply chain constraints, as a result advertising
demand and spending across the North American television media industry contracted meaningfully. These
conditions have persisted throughout fiscal 2023. In addition, the continued labour action of the SAG-AFTRA
continues to impact the majority of scripted productions world-wide that employ SAG-AFTRA talent, which
impacts the timing of premium content premiers and types of programming available for airing on the Company’s
services in the coming months. This has resulted in a further tightening of advertising demand, particularly
in the Television operating segment. The Company’s share price has continued to decline meaningfully from
August 31, 2021, which resulted in the Company’s carrying value being greater than its market enterprise value
at August 31, 2022, May 31, 2023, and August 31, 2023. Accordingly, impairment testing was required for both
the Television and Radio CGUs at all of the preceding period ends.
For the year ended August 31, 2023, the Company has recorded non-cash impairment charges in the Television
CGU against goodwill of $295.2 million, broadcast licences of $219.8 million, as well as brand and trade marks
of $175.0 million. No impairment was identified in the Radio operating segment CGUs (refer to note 10 of the
consolidated financial statements). There were no previously recorded impairment charges reversed.
For the year ended August 31, 2022, as the Television CGU had actual results that fell short of previous estimates
and an outlook that is less robust, a non-cash goodwill impairment charge of $350.0 million was recorded in the
Television CGU. The Company also assessed for indicators that previous impairment losses had decreased.
There were no previously recorded impairment charges reversed.
Due to the uncertainty related to the economic environment, the Company has noted there is significant
estimation uncertainty related to the Company’s growth rates and future cash flow estimates, which could
change in the near term and the effect of such changes could be material. An increase of 50 basis points in the
pre-tax discount rate, a decrease of 50 basis points in the earnings growth rate each year, or a decrease of 50
basis points in the terminal growth rate, each used in isolation to perform the radio broadcast licence and both
the television and radio goodwill impairment tests, would have resulted in an additional impairment charge in
the Television segment of between $nil million to $65.0 million.
A significant portion of the Company’s total assets are long-lived intangible assets. As at August 31, 2023
44% (2022 — 55%) of the Company’s total assets were long-lived intangible assets. The Company records
impairment losses on its long-lived assets when it believes that their carrying value may not be recoverable.
Recoverability is highly dependent on the projected operating results of the Company. There can be no assurance
that the Company will not record impairment charges in the future that could materially adversely impact Corus’
financial results.
INCOME TAXES
The Company is subject to income taxes in Canada and foreign jurisdictions. The calculation of income taxes
in many cases, however, requires significant judgment in interpreting tax rules and regulations. The Company’s
tax filings are subject to audits which could materially change the amount of current and deferred income tax
assets and liabilities and could, in certain circumstances, result in the assessment of interest and penalties.
Additionally, estimation of the income tax provision includes evaluating the recoverability of deferred tax assets
based on the assessment of the Company’s ability to use the underlying future tax deductions before they
expire against future taxable income. The assessment is based upon existing tax laws, estimates of future
profitability and tax planning strategies. If the future taxable results of the Company differ significantly from
those expected, the Company would be required to increase or decrease the carrying value of the deferred tax
assets with a potentially material impact on the Company’s consolidated statements of financial position and
consolidated statements of income (loss) and comprehensive income (loss). The carrying amount of deferred
tax assets is reassessed at each reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to utilize all or part of the deferred tax assets. Unrecognized deferred
tax assets are recognized to the extent that it is more likely than not that taxable profit will be available against
which deferred tax assets can be utilized.
Corus Entertainment Annual Report 2023 | 47
POST-EMPLOYMENT BENEFIT PLANS
The Company has various registered defined benefit plans for certain unionized and non-unionized employees
and a supplementary executive non-registered retirement plan which provides pension benefits to certain
of its key senior executives. The amounts reported in the consolidated financial statements relating to the
defined benefit plans are determined using actuarial valuations that are based on several assumptions including
the discount rate, rate of compensation increase, trend in healthcare costs, and expected average remaining
years of service of employees. While the Company believes these assumptions are reasonable, differences
in actual results or changes in assumptions could affect employee benefit obligations and the related income
and comprehensive income statement impact. The differences between actual and assumed results are
immediately recognized in other comprehensive income (loss). The most significant assumption used to
determine the present value of the future cash flows that is expected will be needed to settle employee benefit
obligations and is also used to calculate the interest income on plan assets. It is based on the yield of long-term,
high-quality corporate fixed income investments closely matching the term of the estimated future cash flows
and is reviewed and adjusted as changes are required. The following table illustrates the incremental increase
on the accrued benefit obligation and pension expense of a 1% decrease in the discount rate:
(thousands of Canadian dollars)
Weighted average discount rate – registered plans
Weighted average discount rate – non-registered plans
Impact of: 1% decrease – registered plans
Impact of: 1% decrease – non-registered plans
Accrued benefit obligation
at August 31, 2023
Pension expense for the
year ended August 31, 2023
5.20%
5.20%
$25,168
$4,238
4.80%
4.80%
$2,404
$205
The significant assumptions used on the benefit obligation are disclosed in note 28 of the audited consolidated
financial statements.
SHARE-BASED COMPENSATION
In the evaluation of the fair value of stock options, DSUs, PSUs, and RSUs granted to eligible officers, directors
and employees, the Company makes estimates and assumptions. Critical estimates and assumptions related
to stock options include their expected life, the risk-free interest rate and the expected volatility of the market
price of the shares. Critical estimates and assumptions related to DSUs, PSUs and RSUs include number of
units expected to vest, the estimated dividend equivalents, and the achievement of specific vesting conditions.
The Company believes that the assumptions used are reasonable based on information currently available, but
changes to these assumptions could impact the fair value of stock options, DSUs, PSUs and RSUs and therefore,
the share-based compensation costs recorded in direct cost of sales, general and administrative expenses.
48 | Corus Entertainment Annual Report 2023
CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management, under the supervision of the President and CEO and Executive Vice President and Chief Financial
Officer (“CFO”), is responsible for establishing and maintaining disclosure controls and procedures, as defined in
National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings, and have designed
such disclosure controls and procedures (or have caused it to be designed under their supervision) to provide
reasonable assurance that material information with respect to Corus, including its consolidated subsidiaries,
is made known to them. Disclosure controls and procedures ensure that information required to be disclosed
by Corus in the reports that it files or submits under the provincial securities legislation is recorded, processed,
summarized and reported within the time periods required. Corus has adopted or formalized such disclosure
controls and procedures as it believes are necessary and consistent with its business and internal management
and supervisory practices.
Management evaluated, under the supervision of and with the participation of the CEO and CFO, the
effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by
these annual filings, and have concluded that, as of August 31, 2023, the Company’s disclosure controls and
procedures were effective.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management, under the supervision of the CEO and CFO, is responsible for establishing and maintaining
adequate internal control over financial reporting, as defined by National Instrument 52-109 – Certification of
Disclosure in Issuers’ Annual and Interim Filings, and have designed such internal control over financial reporting (or
have caused it to be designed under their supervision) to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of the consolidated financial statements in accordance with IFRS.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements
on a timely basis. Also, projections of any of the effectiveness of internal control are subject to the risk that the
controls or that the degree of compliance with the policies and procedures may deteriorate. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to the financial
statement preparation and presentation.
Management evaluated, under the supervision of and with the participation of the CEO and CFO, the effectiveness
of the Company’s internal control over financial reporting, as of August 31, 2023, based on the criteria established
in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”). Based on its evaluation under this framework, management concluded that
the Company’s internal control over financial reporting was effective as at August 31, 2023.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in the Company’s internal control over financial reporting that occurred during fiscal
2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control
over financial reporting.
The design of any system of controls and procedures is based in part upon certain assumptions about the
likelihood of certain events. There can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions, regardless of how remote.
ADDITIONAL INFORMATION
Additional information relating to the Company, including the Annual Information Form, can be found on SEDAR
at www.sedarplus.ca.
Corus Entertainment Annual Report 2023 | 49
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying consolidated financial statements of Corus Entertainment Inc. (“Corus” or the “Company”)
and all of the information in this Annual Report are the responsibility of management and have been approved
by the Board of Directors (the “Board”).
The consolidated financial statements have been prepared by management in accordance with International
Financial Reporting Standards (“IFRS”). When alternative accounting methods exist, management has chosen
those it deems most appropriate in the circumstances. Financial statements are not precise since they
include certain amounts based on estimates and judgments. Management has determined such amounts on
a reasonable basis in order to ensure that the consolidated financial statements are presented fairly in all material
respects. Management has prepared the financial information presented elsewhere in this Annual Report and
has ensured that it is consistent with the consolidated financial statements.
Corus maintains systems of internal accounting and administrative controls of high quality, consistent with
reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is
relevant, reliable and accurate, and that the Company’s assets are appropriately accounted for and adequately
safeguarded. During the past year, management has maintained the operating effectiveness of internal
control over external financial reporting. As at August 31, 2023, the Company’s Chief Executive Officer and
Chief Financial Officer evaluated, or caused an evaluation of, under their direct supervision, the design and
operation of the Company’s internal controls over financial reporting (as defined in National Instrument 52-109
- Certification of Disclosure in Issuers’ Annual and Interim Filings) and, based on that assessment, determined that
the Company’s internal controls over financial reporting were appropriately designed and operating effectively.
The Board is responsible for ensuring that management fulfills its responsibilities for financial reporting and is
ultimately responsible for reviewing and approving the consolidated financial statements. The Board carries
out this responsibility through its Audit Committee (the “Committee”).
The Committee is appointed by the Board, and all of its members are independent unrelated directors. The
Committee meets periodically with management, as well as with the internal and external auditors, to discuss
internal controls over the financial reporting process, auditing matters and financial reporting items, to
satisfy itself that each party is properly discharging its responsibilities, and to review the Annual Report, the
consolidated financial statements and the external auditor’s report. The Committee reports its findings to the
Board for consideration when approving the consolidated financial statements for issuance to the shareholders.
The Committee also considers, for review by the Board and approval by the shareholders, the engagement or
re-appointment of the external auditor.
The consolidated financial statements have been audited by Ernst & Young LLP, the external auditor on behalf
of the shareholders. Ernst & Young LLP has full and free access to the Committee.
Douglas D. Murphy
President and
Chief Executive Officer
John R. Gossling, FCPA, FCA
Executive Vice President and
Chief Financial Officer
50 | Corus Entertainment Annual Report 2023
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Corus Entertainment Inc.
Opinion
We have audited the consolidated financial statements of Corus Entertainment Inc. and its subsidiaries (the
Group), which comprise the consolidated statements of financial position as at August 31, 2023 and August 31,
2022, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes
in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects the
consolidated financial position of the Group as at August 31, 2023 and August 31, 2022, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matter
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of
the financial statements of the current period. These matters were addressed in the context of the audit of the
financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to this matter. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of
the financial statements. The results of our audit procedures, including the procedures performed to address the
matter below, provide the basis for our audit opinion on the accompanying consolidated financial statements.
Assessment of goodwill and intangible asset impairment
Key Audit Matter
As at August 31, 2023, goodwill and indefinite life intangible assets amounted to $21 million and $676 million,
as disclosed in notes 9 and 10 to the consolidated financial statements, respectively. During the year, the Group
recorded an impairment of $690 million related to the Television cash generating unit (“CGU”), of which $295
million, $220 million and $175 million was related to goodwill, broadcast licenses, and brands and trademarks
intangibles, respectively.
Management assesses at least annually, or at any time if an indicator of impairment exists, whether there has
been an impairment loss in the carrying value of these assets. When performing impairment tests, the Group
estimates the recoverable amount of the cash generating unit (CGU) or group of CGUs, to which goodwill and
indefinite life intangible assets have been allocated, using a value in use (“VIU”) discounted cash flow model or fair
value less costs to sell (“FVLCS”) model. The Group discloses significant judgments, estimates and assumptions
and the result of their analysis in respect of impairment in Note 10 to the consolidated financial statements.
Auditing management’s annual goodwill and indefinite life intangible assets impairment test was complex, given
the degree of judgment and subjectivity in evaluating management’s estimates and assumptions in determining
the recoverable amount of the respective CGU and group of CGUs. Significant assumptions included growth
rates, earnings margins, and discount rate, which are affected by expectations about future market and economic
conditions. There is also judgment in estimating the allocation of impairment to assets other than goodwill.
Corus Entertainment Annual Report 2023 | 51
How our audit addressed the key audit matter
To test the estimated recoverable amount of the CGU and group of CGUs, our audit procedures included, among
others:
• Tested the mathematical accuracy of the impairment models;
• Evaluated the historical accuracy of management’s estimates on growth rates and earnings margins by
comparing management’s past projections to actual performance;
• Compared management’s estimated growth rates and the earnings margins to historical performance and
economic trends;
• Involved our valuation specialists to assess the Group’s impairment models, valuation methodologies, and
to compare the aggregate recoverable amounts of the CGUs to the Group’s enterprise value;
• With the assistance of our valuation specialists, assessed the selection and application of the discount
rate used in the VIU and FVLCS models by comparing the risk-free rate and risk premiums to comparable
market data;
• With the assistance of our valuation specialists, assessed the allocation of impairment to assets other
than goodwill based on the valuation of the assets being the highest of fair value less costs to dispose and
value in use;
• Performed sensitivity analysis on the significant assumptions to evaluate the change in calculated
recoverable amounts that would result from changes in the underlying inputs; and
• Assessed the adequacy of the Group’s disclosures included in Note 10 of the accompanying consolidated
financial statements in relation to this matter.
Other information
Other information consists of the information included in the Annual Report, other than the financial statements
and our auditor’s report thereon. Management is responsible for the other information. The other information
comprises:
• Management’s Discussion and Analysis; and
• The information, other than the consolidated financial statements and our auditor’s report thereon, in the
Annual Report.
Our opinion on the consolidated financial statements does not cover the other information and we do not and
will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact in this auditor’s report. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If based on
the work we will perform on this other information, we conclude there is a material misstatement of other
information, we are required to report that fact to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements
in accordance with IFRS, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
52 | Corus Entertainment Annual Report 2023
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure, and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Laura Sluce.
Toronto, Canada
October 26, 2023
Chartered Professional Accountants
Licensed Public Accountants
Corus Entertainment Annual Report 2023 | 53
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at August 31,
(in thousands of Canadian dollars)
ASSETS
Current
Cash and cash equivalents
Accounts receivable (note 4)
Income taxes recoverable
Prepaid expenses and other assets
Total current assets
Tax credits receivable
Investments and other assets (note 5)
Property, plant and equipment (note 6)
Program rights (note 7)
Film investments (note 8)
Intangibles (notes 9 and 10)
Deferred income tax assets (note 20)
LIABILITIES AND EQUITY
Current
Accounts payable and accrued liabilities (note 11)
Current portion of long-term debt (note 13)
Provisions (note 12)
Total current liabilities
Long-term debt (note 13)
Other long-term liabilities (note 14)
Provisions (note 12)
Deferred income tax liabilities (note 20)
Total liabilities
Share capital (note 15)
Contributed surplus (note 15)
Accumulated deficit
Accumulated other comprehensive income (note 16)
Total equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Commitments, contingencies and guarantees (notes 13 and 27)
See accompanying notes
2023
2022
56,163
295,175
21,597
21,285
394,220
44,270
74,415
268,214
668,976
53,085
1,198,229
44,653
2,746,062
565,052
13,434
9,811
588,297
1,078,950
316,912
9,041
293,862
2,287,062
281,052
2,012,936
(2,014,077)
37,841
317,752
141,248
459,000
2,746,062
54,912
311,015
17,180
21,423
404,530
32,744
63,931
294,026
660,722
59,122
1,937,104
50,301
3,502,480
526,899
15,574
8,540
551,013
1,246,076
376,570
9,830
415,010
2,598,499
781,918
1,511,481
(1,574,358)
33,000
752,041
151,940
903,981
3,502,480
54 | Corus Entertainment Annual Report 2023
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
For the years ended August 31,
(in thousands of Canadian dollars, except per share amounts)
Revenue (notes 21 and 25)
Direct cost of sales, general and administrative expenses (note 17)
Depreciation and amortization (notes 6 and 9)
Interest expense (note 18)
Goodwill, broadcast licence and other asset impairment (notes 9 and 10)
Debt refinancing (note 13)
Restructuring and other costs (note 12)
Gain on disposition (note 26)
Other expense (income), net (note 19)
Loss before income taxes
Income tax expense (recovery) (note 20)
Net loss for the year
Other comprehensive income, net of income taxes (note 16):
Items that may be subsequently reclassified to income (loss):
Unrealized change in fair value of cash flow hedges
Unrealized foreign currency translation adjustment
Items that will not be reclassified to income (loss):
Unrealized change in fair value of financial assets
Actuarial gain on post-retirement benefit plans
Other comprehensive income, net of income taxes
Comprehensive loss for the year
Net loss attributable to:
Shareholders
Non-controlling interests
Comprehensive loss attributable to:
Shareholders
Non-controlling interests
Loss per share attributable to shareholders:
Basic
Diluted
See accompanying notes
2023
1,511,240
1,177,235
157,645
135,410
690,000
—
20,569
(142,288)
(3,670)
(523,661)
(100,806)
(422,855)
4,945
1,067
6,012
(1,171)
9,601
8,430
14,442
(408,413)
(428,724)
5,869
(422,855)
(414,282)
5,869
(408,413)
2022
1,598,586
1,154,943
156,937
107,108
350,000
(3,428)
8,062
—
16,847
(191,883)
40,355
(232,238)
4,891
1,296
6,187
5,002
4,466
9,468
15,655
(216,583)
(245,058)
12,820
(232,238)
(229,403)
12,820
(216,583)
($2.15)
($2.15)
$(1.19)
$(1.19)
Corus Entertainment Annual Report 2023 | 55
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of Canadian dollars)
As at August 31, 2022
Comprehensive income (loss)
Dividends declared
Reduction of stated capital
Change in fair value of put
option liability
Shares repurchased under
normal course issuer bid
(“NCIB”)
Reversal of automatic share
purchase commitment
Actuarial gain on post-
retirement benefit plans
Share-based compensation
expense
Reallocation of equity
interest
Equity funding by a non-
controlling interest
Share
capital
(note 15)
Contributed
surplus
(note 15)
Accumulated
deficit
781,918 1,511,481 (1,574,358)
— (428,724)
— (23,475)
—
—
—
(500,000)
500,000
Accumulated
other
comprehensive
income
(note 16)
33,000
14,442
—
—
Total equity
attributable
to
shareholders
752,041
(414,282)
(23,475)
—
Non-
controlling
interest Total equity
151,940
903,981
5,869 (408,413)
(40,841)
—
(17,366)
—
—
—
(347)
(3,090)
1,119
2,224
(504)
—
—
—
—
—
—
—
—
—
—
9,601
(9,601)
840
—
—
—
3,226
—
—
—
—
(347)
176
(171)
(1,971)
1,720
—
840
—
—
—
—
3,226
(3,226)
(1,971)
1,720
—
840
—
—
3,855
3,855
As at August 31, 2023
281,052 2,012,936 (2,014,077)
37,841
317,752
141,248
459,000
(in thousands of Canadian dollars)
As at August 31, 2021
Comprehensive income (loss)
Dividends declared
Business acquisition
Change in fair value of put
option liability
Shares repurchased under
normal course issuer bid
Share repurchase
Share
capital
Contributed
surplus
Accumulated
deficit
816,189 1,512,431 (1,282,897)
— (245,058)
(49,561)
—
—
—
—
—
—
—
—
(1,308)
(32,047)
(2,719)
—
—
commitment under NCIB
(2,224)
504
(1,720)
Accumulated
other
comprehensive
income
Total equity
attributable
to
shareholders
21,811
15,655
—
—
1,067,534
(229,403)
(49,561)
—
Non-
controlling
interests Total equity
152,829 1,220,363
(216,583)
(69,333)
864
12,820
(19,772)
864
(1,308)
(520)
(1,828)
(34,766)
— (34,766)
—
—
—
—
—
—
(1,720)
—
1,265
—
—
—
4,466
(4,466)
—
1,265
—
—
1,265
—
—
781,918 1,511,481 (1,574,358)
—
—
33,000
—
752,041
5,719
151,940
5,719
903,981
Actuarial gain on post-
retirement benefit plans
Share-based compensation
expense
Equity funding by a non-
controlling interest
As at August 31, 2022
See accompanying notes
56 | Corus Entertainment Annual Report 2023
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended August 31,
(in thousands of Canadian dollars)
OPERATING ACTIVITIES
Net loss for the year
Adjustments to reconcile net loss to cash flow from operations:
Amortization of program rights (notes 7 and 17)
Amortization of film investments (notes 8 and 17)
Depreciation and amortization (notes 6 and 9)
Deferred income tax recovery (note 20)
Goodwill, broadcast licence and other asset impairment (note 10)
Gain on business divestiture (note 26)
Share-based compensation expense (note 15)
Imputed interest (note 18)
Debt refinancing
Payment of program rights
Net spend on film investments
Other
Cash flow from operations
Net change in non-cash working capital balances related to operations (note 24)
Cash provided by operating activities
INVESTING ACTIVITIES
Additions to property, plant and equipment (notes 6 and 21)
Proceeds from sale of property
Business divestiture, net of divested cash (note 26)
Business combination, net of cash acquired
Venture fund distribution
Net cash flows for intangibles, investments and other assets
Cash provided by investing activities
FINANCING ACTIVITIES
Decrease in bank loans
Financing fees
Issuance of senior unsecured notes
Share repurchase under NCIB (note 15)
Equity funding by a non-controlling interest
Payment of lease liabilities (note 6)
Dividends paid (note 15)
Dividends paid to non-controlling interest
Other
Cash used in financing activities
Net change in cash and cash equivalents during the year
Cash and cash equivalents, beginning of the year
Cash and cash equivalents, end of the year
Supplemental cash flow disclosures (note 24)
See accompanying notes
2023
2022
(422,855)
(232,238)
595,179
36,760
157,645
(124,516)
690,000
(142,288)
840
57,547
—
(674,535)
(60,341)
1,345
114,781
7,886
122,667
(13,302)
736
141,172
—
—
(3,332)
125,274
(171,742)
(998)
—
(2,045)
3,855
(17,943)
(35,923)
(17,366)
(4,528)
(246,690)
1,251
54,912
56,163
559,810
23,929
156,937
(10,437)
350,000
—
1,265
46,201
(3,428)
(564,214)
(41,168)
7,628
294,285
(77,450)
216,835
(17,810)
299
—
3,606
43,478
(4,401)
25,172
(354,846)
(5,892)
250,000
(34,691)
3,742
(17,031)
(49,561)
(19,772)
(2,729)
(230,780)
11,227
43,685
54,912
Corus Entertainment Annual Report 2023 | 57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
1. CORPORATE INFORMATION
Corus Entertainment Inc. (the “Company” or “Corus”) is a diversified Canadian-based integrated media and
content company. The Company is incorporated under the Canada Business Corporations Act and its Class B
non-voting participating shares (“Class B Non-Voting Shares”) are listed on the Toronto Stock Exchange (the
“TSX”) under the symbol CJR.B.
The Company’s registered office is at 1500, 850 – 2nd Street SW, Calgary, Alberta, T2P 0R8. The Company’s
executive office is at Corus Quay, 25 Dockside Drive, Toronto, Ontario, M5A 0B5.
These consolidated financial statements include the accounts of the Company and all its subsidiaries and
joint ventures. The Company’s principal business activities are: the operation of specialty television networks
and conventional television stations, the operation of radio stations; the operation of digital and streaming
services, a social media digital agency, a social media creator network, technology and media services; and the
Corus content business, which consists of the production and distribution of films and television programs,
merchandise licensing, book publishing and animation software (disposed of August 23, 2023).
2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in accordance with IFRS as issued by the
International Accounting Standards Board (“IASB”). These consolidated financial statements have been
prepared using the accounting policies in note 3.
These consolidated financial statements have been authorized for issue in accordance with a resolution from
the Board of Directors on October 26, 2023.
3. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements have been prepared on a cost basis, except for derivative financial
instruments and certain available-for-sale financial assets, which have been measured at fair value. The
consolidated financial statements are presented in Canadian dollars, which is also the Company’s functional
currency and all values are rounded to the nearest thousand, except where otherwise noted. Each entity
consolidated by the Company determines its own functional currency based on the primary economic
environment in which the entity operates.
BASIS OF CONSOLIDATION
Subsidiaries
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries,
which are the entities over which the Company has control. Control exists when the entity is exposed, or has
rights, to variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity. The non-controlling interest component of the Company’s subsidiaries is included as
a separate component in equity.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains
control, and continue to be consolidated until the date when such control ceases.
The financial statements of the Company’s subsidiaries are prepared for the same reporting period as the
Company, using consistent accounting policies. All intercompany balances, transactions, unrealized gains and
losses resulting from intercompany transactions and dividends are eliminated in full.
Associates and joint arrangements
Associates are entities over which the Company has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the associate but is not control or joint control
over those policies. In assessing the level of control or influence that the Company has over an investment,
management considers ownership percentages, board representation, as well as other relevant provisions in
the shareholder agreements.
A joint venture is a type of joint arrangement in which the parties that have joint control of the arrangement
have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities require unanimous consent of
the parties sharing control.
58 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The considerations made in determining joint control or significant influence are similar to those necessary to
determine control over subsidiaries. The Company accounts for investments in associates and joint ventures
using the equity method.
Investments in associates and joint ventures accounted for using the equity method are originally recognized at
cost. Under the equity method, the investment in the associate or joint venture is carried on the consolidated
statements of financial position at cost plus post-acquisition changes in the Company’s share of income (loss)
and other comprehensive income (loss) (“OCI”), less distributions of the associate. Goodwill on the acquisition
of the associates and joint ventures is included in the cost of the investments and is neither amortized nor
assessed for impairment separately.
The financial statements of the Company’s equity-accounted investments are prepared for the same reporting
period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those
of the Company. All intercompany unrealized gains resulting from intercompany transactions and dividends are
eliminated against the investment to the extent of the Company’s interest in the associate. Unrealized losses
are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
After the application of the equity method, the Company determines at each reporting date whether there
is any objective evidence that the investment in the associate or joint venture is impaired and consequently,
whether it is necessary to recognize an additional impairment loss on the Company’s investment in its associate
or joint venture. If this is the case, the Company calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying value and recognizes the amount in the consolidated
statements of income (loss) and comprehensive income (loss).
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method of accounting, which requires the
Company to identify and attribute values and estimated lives to the identifiable intangible assets acquired based
on their estimated fair value. These determinations involve significant estimates and assumptions regarding
cash flow projections, economic risk and weighted average cost of capital. The purchase consideration of an
acquisition is measured as the aggregate of the consideration transferred, measured at acquisition-date fair
value and the amount of any non-controlling interest in the acquiree.
For each business combination, the acquirer measures the non-controlling interest in the acquiree either at
fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are
expensed and included in restructuring and other costs.
The Company determines that it has acquired a business when the acquired set of activities and assets include
an input and a substantive process that together significantly contribute to the ability to create outputs. The
acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the
inputs acquired include an organized workforce with the necessary skills, knowledge, or experience to perform
that process or it significantly contributes to the ability to continue producing outputs and is considered unique
or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing
outputs.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts
by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date in the consolidated statements
of income (loss) and comprehensive income (loss).
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be a financial asset
or liability will be recognized in accordance with IFRS 9 – Financial Instruments: Classification and Measurement
(“IFRS 9”) either in profit or loss or as a change to OCI. If the contingent consideration is classified as equity, it
should not be remeasured until it is finally settled within equity.
Corus Entertainment Annual Report 2023 | 59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
REVENUE RECOGNITION
The Company derives revenue from the transfer of goods and services. Revenue recognition is based on the
delivery of performance obligations and an assessment of when control is transferred to the customer. Revenue
is recognized either when the performance obligation in the contract has been performed (“point in time”
recognition) or “over time” as control of the performance obligation is transferred to the customer.
Advertising revenue is recognized in the period in which the advertising is aired on the Company’s television and
radio stations or posted on various websites or other digital assets and when collection is reasonably assured.
Subscriber fee revenue is recognized monthly based on estimated subscriber levels for the period end, which
are based on the preceding month’s actual subscribers as submitted by the distributors.
Customer contracts can have a wide variety of performance obligations, from production contracts to distribution
activities, training and support services. For these contracts each performance obligation is identified and
evaluated. Under IFRS 15 – Revenue from Contracts with Customers, the Company needs to evaluate if a license
represents a right to access the content (revenue recognized over time) or represents a right to use the content
(revenue recognized at a point in time). The Company has determined that most license revenue is satisfied at a
point in time due to there being limited ongoing involvement in the use of the license following its transfer to the
customer. The Company has determined that most service revenue is satisfied over a period of time as project
milestones are met and the Company has an enforceable right to payment for performance completed to date.
The Company’s distribution and production revenue from the distribution and licensing of film rights; royalties
from merchandise licensing, publishing and music contracts; sale of licenses, customer support, training and
consulting related to the animation software business; revenue from customer support; and sale of books are
recognized when the significant risks and rewards of ownership have transferred to the buyer; the amount of
revenue can be measured reliably and the Company has a present right to payment for the good or service;
the stage of completion of the transaction at the end of the reporting period can be measured reliably; the
costs incurred for the transaction and the costs to complete the transaction can be measured reliably; and the
Company does not retain either continuing managerial involvement or effective control.
Customer advances on contracts are recorded as unearned revenue until all of the foregoing revenue recognition
conditions have been met.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash and short-term deposits with maturities of less than three months at
the date of purchase. Cash that is held in escrow, or otherwise restricted from use, is reported separately from
cash and cash equivalents.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated
impairment losses, if any. Such cost includes the cost of replacing part of the property, plant and equipment,
and borrowing costs for long-term construction projects if the recognition criteria are met. When significant
parts of property, plant and equipment are required to be replaced at intervals, the Company recognizes such
parts as individual assets with specific useful lives and depreciation, respectively. Repair and maintenance costs
are recognized in the consolidated statements of income (loss) and comprehensive income (loss) as incurred.
Leases and right-of-use assets
The Company assesses whether a contract is, or contains, a lease at the inception of the contract. The Company
recognizes a lease liability with a corresponding right-of-use asset for all lease agreements in which it is the
lessee, except for short-term leases and leases of low-value assets. The lease liability is initially measured at the
present value of the lease payments that are not paid at the commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
60 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The lease liability is subsequently measured by increasing its carrying amount to reflect accretion on the
lease liability (using the effective interest rate method) and by reducing the carrying amount to reflect lease
payments made. The right-of-use asset is depreciated over the shorter of the lease term and the useful life of
the underlying asset. The Company applies International Accounting Standard (“IAS”) 36 – Impairment of Assets,
to determine whether the asset is impaired and account for any identified impairment loss.
The Company does not recognize right-of-use assets and lease liabilities for leases that have a lease term of 12
months or less and do not contain a purchase option or for leases related to low-value assets. Lease payments
on short-term leases and lease of low-value assets are recognized as general and administrative expenses in
the consolidated statements of income (loss) and comprehensive income (loss).
Right-of-use assets are measured at cost, comprised of the initial measurement of the corresponding lease
liabilities and lease payments made at or before the commencement date of any initial direct costs. They are
subsequently depreciated on a straight-line basis over their expected useful lives and reduced by impairment
losses. Right-of-use assets are tested for impairment if indicators of impairment exist.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability
and the right-of-use asset. The related payments are recognized as an expense in the period in which the event
or condition that triggers those payments occurs and are presented as such in the consolidated statements of
income (loss) and comprehensive income (loss).
Right-of-use assets are included in property, plant and equipment on the consolidated statements of financial
position. The current portion of lease liabilities are included in accounts payable and accrued liabilities on the
consolidated statements of financial position, while the long-term portion is included in other long-term
liabilities.
Operating lease commitments, for which lease payments are recognized as an expense in the consolidated
statements of income (loss) and comprehensive income (loss), are recognized on a straight-line basis over the
lease term.
Depreciation
Depreciation is recorded on a straight-line basis over the estimated useful lives of the property, plant and
equipment and right-of-use assets as follows:
Land and assets not available for use
Broadcasting equipment
Computer equipment
Leasehold improvements
Right-of-use assets
Buildings
Structure
Components
Furniture and fixtures
Other
Not depreciated
5 – 10 years
3 – 5 years
Lease term
Lease term
20 – 30 years
10 – 20 years
7 years
4 – 10 years
An item of property, plant and equipment and any significant part initially recognized are derecognized upon
disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the consolidated statements of income (loss) and comprehensive income
(loss) when the asset is derecognized.
The assets’ residual values, useful lives and methods of depreciation are reviewed at least annually and the
depreciation charge is adjusted prospectively, if appropriate.
BORROWING COSTS
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of
funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of
the cost of the asset. All other borrowing costs are expensed in the period they are incurred.
Corus Entertainment Annual Report 2023 | 61
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
PROGRAM RIGHTS
Program rights represent contract rights acquired from third parties to broadcast television programs, feature
films and radio programs. The assets and liabilities related to these rights are recorded when the Company
controls the asset, the expected future economic benefits are probable and the cost is reliably measurable. The
Company generally considers these criteria to be met and records the assets and liabilities when the license
period has begun, the program material is accepted by the Company and the material is available for airing.
Long-term liabilities related to these rights are recorded at the net present value of future cash flows, using an
appropriate discount rate. These costs are amortized over the contracted exhibition period as the programs or
feature films are aired. Program and film rights are carried at cost less accumulated amortization.
The amortization period and the amortization method for program rights are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the assets are accounted for by changing the amortization period or method, as
appropriate, and are treated as changes in accounting estimates. Amortization of program rights is included in
direct cost of sales, general and administrative expenses, and has been disclosed separately in the consolidated
statements of cash flows.
FILM INVESTMENTS
Film investments represent the costs of projects in development, projects in process, the unamortized costs of
proprietary films and television programs that have been produced by the Company or for which the Company
has acquired distribution rights. Such costs include development and production expenditures and attributed
studio and other costs that are expected to benefit future periods. Costs are capitalized upon project greenlight
for produced and acquired films and television programs. The Company has segregated its film investments into
two categories: current productions and library or acquired productions. Current productions are considered
library productions immediately subsequent to their initial availability for licensing as they are considered
completed.
Current productions are amortized using a declining balance method of 50% at the time of initial episodic
delivery and at annual rates ranging from 15 – 25% thereafter. Library content is amortized using a declining
balance method at rates ranging from 15 – 25% annually. Acquired rights are amortized using a straight-line
method over the license term.
The amortization period and the amortization method for film investments are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the assets are accounted for by changing the amortization period or method,
as appropriate, and are treated as changes in accounting estimates.
Projects in process represent the accumulated costs of television series or feature films currently in production.
Amortization of film investments is included in direct cost of sales, general and administrative expenses, and
has been disclosed separately in the consolidated statements of cash flows.
GOODWILL AND INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets acquired in
a business combination are measured at fair value as at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated amortization and accumulated impairment charges, if
any. Internally generated intangible assets such as goodwill, brands and customer lists, excluding capitalized
program and film development costs, are not capitalized and expenditures are reflected in the consolidated
statements of income (loss) and comprehensive income (loss) in the year in which the expenditure is incurred.
Intangible assets are recognized separately from goodwill when they are separable or arise from contractual or
other legal rights and their fair value can be measured reliably. The useful lives of intangible assets are assessed
as either finite or indefinite.
Intangible assets with finite lives are amortized over their useful economic lives and assessed for impairment
whenever there is an indication that the intangible assets may be impaired. The amortization period and the
amortization method for intangible assets with finite useful lives are reviewed at least at the end of each reporting
period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the assets are accounted for by changing the amortization period or method, as appropriate, and
are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives
is recognized in the consolidated statements of income (loss) and comprehensive income (loss) in the expense
category, consistent with the function of the intangible assets.
62 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
Amortization is recorded on a straight-line basis over the estimated useful life of the asset as follows:
Brand names, trade marks and digital rights
Software
3 – 15 years
3 – 5 years
Intangible assets with indefinite useful lives are not amortized. Broadcast licences are considered to have an
indefinite life based on management’s intent and ability to renew the licences without significant cost and without
material modification of the existing terms and conditions of the licence. The assessment of an indefinite life
is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a prospective basis.
Goodwill is initially measured at the excess of the aggregate of the consideration transferred and the amount
recognized for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net identifiable assets of the subsidiary acquired, the difference
is recognized in the consolidated statements of income (loss) and comprehensive income (loss).
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to a cash
generating unit (“CGU”) or group of CGUs that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The group of CGUs
is not larger than the level at which management monitors goodwill or the Company’s operating segments.
Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining
the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on
the relative fair value of the operation disposed of and the portion of the CGU retained.
Broadcast licences, indefinite life intangible assets and goodwill are tested for impairment annually or more
frequently if events or circumstances indicate that they may be impaired. The Company completes its annual
testing during the fourth quarter each year.
Broadcast licences and indefinite life intangible assets by themselves do not generate cash inflows and therefore,
when assessing these assets for impairment, the Company looks to the CGU to which the asset belongs.
The identification of CGUs involves judgment and is based on how senior management monitors operations;
however, the lowest aggregations of assets that generate largely independent cash inflows represent CGUs for
broadcast licence and indefinite life intangible asset impairment testing.
CGUs for broadcast licence and indefinite life intangible asset impairment testing
For the Television segment, the Company has determined that the CGU is the combined group of the conventional
television stations and specialty television networks. This is the lowest level at which management monitors
broadcast licences for internal management purposes and have independent cash inflows.
For the Radio segment, the Company has determined that the CGU is a radio cluster whereby a cluster represents
a geographic area, generally a city, where radio stations are combined for the purpose of managing performance.
These clusters are managed as a single asset and overhead costs are allocated amongst the cluster and have
independent cash inflows at the cluster level.
Groups of CGUs for goodwill impairment testing
For purposes of impairment testing of goodwill, the Company has grouped the CGUs within the Television and
Radio operating segments and performs the test at the Television CGU and Radio Group of CGUs. This is the
lowest level at which management monitors goodwill for internal management purposes.
Other intangible assets
Gains or losses on an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognized in the consolidated statements of income (loss) and
comprehensive income (loss) when the asset is derecognized.
Corus Entertainment Annual Report 2023 | 63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
GOVERNMENT FINANCING AND ASSISTANCE
The Company has access to several government programs that are designed to assist film and television
production in Canada. Funding from certain programs provides a supplement to a series’ Canadian license
fee and is recorded as revenue when cash has been received. Government assistance with respect to federal
and provincial production tax credits is recorded as a reduction of film investments when eligible expenditures
are made and there is reasonable assurance of realization. Assistance in connection with internally produced
film investments is recorded as a reduction in film investments. The accrual of production tax credits on a
contemporaneous basis with production expenditures are based on a five-year historical trending of the ratio
of actual production tax credits received to total production tax credits applied for.
Government grants approved for specific publishing projects are recorded as revenue when the related expenses
are incurred and there is reasonable assurance of realization.
FOREIGN CURRENCY TRANSLATION
Assets and liabilities of operations having a functional currency other than Canadian dollars are translated at
the rate of exchange as at the consolidated statements of financial position date. Revenue and expenses are
translated at average exchange rates for the year. The resulting foreign currency translation adjustments are
recognized in OCI.
Foreign currency transactions are translated into the functional currency at the rate of exchange at the
transaction date. Foreign currency denominated monetary assets and liabilities are translated into the
functional currency at the rate of exchange as at the consolidated statements of financial position date. Gains
and losses on translation of monetary items are recognized in the consolidated statements of income (loss)
and comprehensive income (loss).
INCOME TAXES
Income tax expense is comprised of current and deferred income taxes. Income tax expense is recognized in the
consolidated statements of income (loss) and comprehensive income (loss), unless it relates to items recognized
outside the consolidated statements of income (loss) and comprehensive income (loss). Income tax expense
relating to items recognized outside of the consolidated statements of income (loss) and comprehensive income
(loss) is recognized in correlation to the underlying transaction in either OCI or equity.
Current income tax
The Company records current income tax expense or recovery based on taxable income earned or loss incurred
for the period in each tax jurisdiction where it operates, and for any adjustment to taxes payable in respect of
previous years, using tax laws that are enacted or substantively enacted as at the consolidated statements of
financial position date.
Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation. The Company establishes provisions related to tax
uncertainties, where appropriate, based on its best estimate of the amount that will ultimately be paid to or
received from taxation authorities.
Deferred income tax
The Company uses the liability method of accounting for deferred income taxes. Under this method, the
Company recognizes deferred income tax assets and liabilities for future income tax consequences attributable
to temporary differences between the financial statement carrying amounts of assets and liabilities and their
respective income tax bases, and on unused tax losses and tax credit carryforwards. The deferred income tax
assets and liabilities related to intangible assets with indefinite useful lives have been measured based on the
Company’s expectation that these assets will be recovered through use. The Company measures deferred
income taxes using tax rates and laws that have been enacted or substantively enacted at the reporting date
and are expected to apply when the related deferred income tax asset is realized or the deferred income tax
liability is settled.
64 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The Company recognizes deferred income tax assets only to the extent that it is probable that future taxable
profits will be available against which the deductible temporary differences as well as unused tax losses and tax
credit carryforwards can be utilized. Deferred income tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realized. Unrecognized
deferred income tax assets are reassessed at each reporting date and are recognized to the extent that it has
become probable that future taxable profits will allow the deferred income tax asset to be recovered. The
Company recognizes the effect of a change in income tax rates in the period of enactment or substantive
enactment.
Deferred income taxes are not recognized if they arise from the initial recognition of goodwill, nor are they
recognized on temporary differences arising from the initial recognition of an asset or liability in a transaction
that is not a business combination and that affects neither accounting nor taxable profit nor loss. Deferred
income taxes are also not recognized on temporary differences relating to investments in subsidiaries to the
extent that it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to
set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
To determine the provision for income taxes, certain assumptions are made, including filing positions on certain
items and the ability to realize deferred income tax assets. In the event the outcome differs from management’s
assumptions and estimates, the effective tax rate in future periods could be affected.
PROVISIONS
Provisions are recognized if the Company has a present legal or constructive obligation as a result of past events,
if it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation as of the date of the consolidated statements of financial position, taking into account the risks and
uncertainties surrounding the obligation. In some situations, external advice may be obtained to assist with
the estimates.
Provisions are discounted and measured at the present value of the expenditure expected to be required to
settle the obligation, using an after-tax discount rate that reflects the current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is
recognized as interest expense. Future information could change the estimates and thus impact the Company’s
consolidated financial position and results of operations.
FINANCIAL INSTRUMENTS
The Company’s financial assets and liabilities (financial instruments) include cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities, long-term debt and derivative financial instruments. All
financial instruments are recorded at fair value at recognition. Financial instruments are measured by grouping
them into classes upon initial recognition, based on the purpose of the individual instruments. All financial
instruments are measured at fair value plus, in the case of the Company’s financial instruments not classified
as fair value through profit and loss (“FVTPL”) or fair value through other comprehensive income (“FVTOCI”),
transaction costs that are directly attributable to the acquisition or issuance of the financial instruments. The
classifications and methods of measurement subsequent to initial recognition of the Company’s financial assets
and financial liabilities are as follows:
Corus Entertainment Annual Report 2023 | 65
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
Financial instrument
Financial assets
Cash and cash equivalents
Accounts receivable
Investments in venture funds
Financial liabilities
Accounts payable and accrued liabilities
Long-term debt
Other long-term liabilities
Derivatives (2)
Interest rate swap agreements (3)
Prepayment options of Notes (4)
Foreign exchange forward contracts (4)
Total return swap agreements (5)
Classification and measurement method
FVTPL
Amortized cost
FVTOCI with no reclassification to net income (1)
Amortized cost
Amortized cost
Amortized cost
FVTOCI
FVTPL
FVTPL
FVTPL
(1) Subsequently measured at fair value with changes recognized in the FVTOCI investment reserve.
(2) Derivatives can be in an asset or liability position at a point in time historically or in the future. For derivatives designated as cash flow
hedges for accounting purposes, the effective portion of the hedge is recognized in accumulated other comprehensive income (loss) and
the ineffective portion of the hedge is recognized immediately into profit and loss. Derivatives not designated as hedges for accounting
purposes are recognized directly in profit and loss.
(3) Debt derivatives related to the Company’s Credit Facility have been designated as hedges for accounting purposes and are measured
at FVTOCI.
(4) Subsequent changes are offset against other expense (income), net.
(5) Subsequent changes are offset against stock-based compensation expense or recovery in operating costs.
Investments in venture funds
The Company’s investments in venture funds consist primarily of investments in common shares of a venture
fund, which invests in common and preferred shares of entities in the media and entertainment industry
recorded using trade date accounting. Equity securities of venture funds are designated as FVTOCI pursuant to
the irrevocable election under IFRS 9. Changes in the fair value of equity securities are permanently recognized
in OCI and are not reclassified to profit or loss.
Derivative instruments and hedge accounting
The Company uses derivative financial instruments (primarily swaps and forward contracts) to manage exposure
to fluctuations in interest rates, foreign currency exchange rates, and certain share-based payment awards.
The Company recognizes all derivative financial instruments in the consolidated financial statements at fair
value and they are classified based on contractual maturity. Derivative instruments are classified as either
hedges of highly probable forecasted transactions (cash flow hedges) or non-hedge derivatives. Derivatives
designated as a cash flow hedge that are expected to be highly effective in achieving offsetting changes in cash
flows are assessed on an ongoing basis to determine that they have actually been highly effective throughout
the financial reporting periods for which they were designated. Derivative assets and derivative liabilities are
shown separately in the consolidated statements of financial position unless there is a legal right of offset and
intent to settle on a net basis.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognized in OCI. The gain or loss relating to the ineffective portion, if any, is recognized in the
consolidated statements of income (loss) and comprehensive income (loss). Amounts deferred in OCI are
reclassified when the hedged transaction has occurred.
Hedge accounting is applied to interest rate swap agreements that fix the interest rate on the term facility. In
order to apply hedge accounting, a high correlation (which indicates effectiveness) is required in the offsetting
changes in the values of the financial instruments (the hedging items) used to establish the designated hedging
relationships at inception and actual effectiveness for each reporting period thereafter.
66 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
A designated hedging relationship is assessed at inception for its anticipated effectiveness and actual
effectiveness for each reporting period thereafter. Any ineffectiveness is reflected in the consolidated
statements of income (loss) and comprehensive income (loss) as debt financing costs.
Determination of fair value
Fair value is defined as the price at which an asset or liability could be exchanged in a current transaction between
knowledgeable, willing parties, other than in a forced or liquidation sale. The fair value of instruments that are
quoted in active markets is determined using the quoted prices where they represent those at which regularly and
recently occurring transactions take place. The Company uses valuation techniques to establish the fair value
of instruments where prices quoted in active markets are not available. Therefore, where possible, parameter
inputs to the valuation techniques are based on observable data derived from prices of relevant instruments
traded in an active market. These valuation techniques involve some level of management estimation and
judgment, the degree of which will depend on the price transparency for the instrument or market and the
instrument’s complexity.
The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy
prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value
measurement based on the lowest level input significant to the fair value measurement in its entirety. The
three levels of the fair value hierarchy are defined as follows:
Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets
and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Significant unobservable inputs that are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value.
The fair values of cash and cash equivalents as well as total return swaps are classified within Level 1 because
they are based on quoted prices for identical assets in active markets.
The fair value of portfolio investments measured at fair value are classified within Level 2 because even though
the security is listed, it is not actively traded. The Company determines the fair value for interest rate swaps as
the net discounted future cash flows using the implied zero-coupon forward swap yield curve. The change in
the difference between the discounted cash flow streams for the hedged item and the hedging item is deemed
to be hedge ineffectiveness and is recorded in the consolidated statements of income (loss) and comprehensive
income (loss). The fair value of the interest rate swap is based on forward yield curves, which are observable
inputs provided by banks and available in other public data sources, and are classified within Level 2. The fair
value of foreign exchange forward contracts is based on net discounted future cash flows using projected market
rates, which are observable inputs provided by banks and available in other public data sources and are classified
within Level 2.
The Company’s investments in venture funds consist primarily of investments in common shares of a venture
fund that invests in common and preferred shares of entities in the media and entertainment industry, which
have little to no market activity. As a result, these investments are classified within Level 3.
Both bank credit facilities and interest rate swap agreements are classified within Level 2, as their fair value is
determined by observable market data. The carrying value of bank credit facilities approximates fair value as the
debt bears interest at rates that fluctuate with market rates. The fair value of interest rate swap agreements is
calculated by way of discounted cash flows, using market interest rates and applicable credit spreads.
SHARE-BASED COMPENSATION
The Company has a stock option plan, two Deferred Share Units (“DSUs”) plans, a Performance Share Units
(“PSUs”) plan and a Restricted Share Units (“RSUs”) plan, with units under such plans awarded to certain
employees and directors.
Corus Entertainment Annual Report 2023 | 67
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The fair value of the stock options granted that represent equity awards are measured using the Black-Scholes
option pricing model. For stock options, the model considers each tranche with graded vesting features as a
separate share option grant. Forfeitures for the stock options are estimated on the grant date and revised if the
actual forfeitures differ from previous estimates.
This fair value is recognized as share-based compensation expense over the vesting periods, with a related
credit to contributed surplus. The contributed surplus balance is reduced as options are exercised through a
credit to share capital. The consideration paid by option holders is credited to share capital when the options
are exercised.
Eligible executives and non-employee directors may elect to receive DSUs equivalent in value to Class B
Non-Voting Shares of the Company in lieu of certain cash payments. Share-based compensation expense is
recorded in the year of receipt of the DSUs and changes in the fair value of outstanding DSUs, including deemed
dividend equivalents, are recorded as an expense in the period that they occur with a corresponding increase
to the liability. These DSUs can only be redeemed once the executive or director is no longer employed with
the Company.
Eligible executives may be granted awards of DSUs, PSUs and RSUs equivalent in value to Class B Non-Voting
Shares of the Company. DSUs, PSUs and RSUs vest after three to five years and are settled in cash at the end
of the restriction period or in the case of DSUs when the executive is no longer employed with the Company.
DSUs, PSUs and RSUs are accrued over the three- to five-year vesting period as share-based compensation
expense and a related liability.
Forfeitures are estimated on the grant date and revised if the actual forfeitures differ from the estimates. The
liability is recorded at fair value, which includes deemed dividend equivalents at each reporting date. Accrued
DSUs, PSUs and RSUs are recorded as long-term liabilities, except for the portion that will vest within 12 months,
which is recorded as a current liability.
Each DSU, PSU and RSU entitles the participant to receive a cash payment in an amount generally equal to
the 20-day volume weighted average price of the Company’s Class B Non-Voting Shares traded on the TSX at
the end of the restriction period, multiplied by the number of vested units and deemed dividend equivalents
determined by achievement of vesting conditions. The cost of share-based compensation is included in direct
cost of sales, general and administrative expenses.
EMPLOYEE BENEFIT PLANS
The Company maintains capital accumulation (defined contribution), post-retirement benefit plans and defined
benefit employee benefit plans. Company contributions to capital accumulation plans and post-retirement
benefit plans are expensed as incurred.
The defined benefit plans are unfunded plans for certain members of senior management and funded plans
for certain other employees. The costs of providing benefits under the defined benefit plans are calculated by
independent actuaries separately for each plan using the projected unit credit method prorated on service and
management’s best estimate of assumptions of salary increases and retirement ages of employees. On an
interim basis, management estimates the changes in the actuarial gains and losses based on changes in discount
rates. These estimates are adjusted when the annual valuation or estimate is completed by the independent
actuaries. The present value of the defined benefit obligations are determined by discounting estimated future
cash flows using a discount rate based on high-quality corporate bonds with maturities that match the expected
maturity of the obligations. A lower discount rate would result in a higher employee benefit obligation.
Current service, interest and past service costs and gains or losses on settlement are recognized in the
consolidated statements of income (loss) and comprehensive income (loss). Actuarial gains and losses for the
plans are recognized in full in the period in which they occur in OCI. Such actuarial gains and losses are also
transferred to retained earnings and are not reclassified to profit or loss in subsequent periods. The asset
or liability that is recognized on the consolidated statements of financial position is the present value of the
defined benefit obligation at the reporting date less the fair value of the plans’ assets. For the funded plans, the
value of any additional minimum funding requirements (as determined by the applicable pension legislation) is
recognized to the extent that the amounts are not considered recoverable. Recoverability is primarily based on
the extent to which the Company can reduce the future contributions to the plans.
Past service costs are recognized immediately upon the introduction of, or changes to, the defined benefit plans.
68 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
IMPAIRMENT OF LONG-LIVED ASSETS
At each reporting date, the Company assesses its long-lived assets, including property, plant and equipment,
program and film rights, film investments, goodwill and intangible assets, for potential indicators of impairment,
such as an adverse change in business climate that may indicate that these assets may be impaired. If any
impairment indicator exists, the Company estimates the asset’s recoverable amount. The recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets, in which case the asset is assessed as part of the CGU to which it belongs. An
asset’s or CGU’s recoverable amount is the higher of its fair value less costs to sell (“FVLCS”) and its value in
use (“VIU”). The determination of the recoverable amount in the impairment assessment requires estimates
based on quoted market prices, prices of comparable businesses, present value or other valuation techniques,
or a combination thereof, necessitating management to make subjective judgments and assumptions.
The Company records impairment losses on its long-lived assets when the Company believes that their carrying
value may not be recoverable. For assets excluding goodwill, an assessment is made at each reporting date as to
whether there is any indication that previously recognized impairment losses may no longer exist or may have
decreased. If the reasons for impairment no longer apply, impairment losses may be reversed up to a maximum
of the carrying amount of the respective asset if the impairment loss had not been recognized.
Goodwill
Goodwill is reviewed for impairment annually or more frequently if there are indications that impairment may
have occurred.
Goodwill is allocated to a CGU or group of CGUs for the purposes of impairment testing based on the level
at which management monitors it, which is not larger than an operating segment. The Company records an
impairment loss if the recoverable amount of the CGU or group of CGUs is less than the carrying amount.
Refer to note 10 for further details on the Company’s annual impairment testing for goodwill.
Broadcast licences and indefinite life intangible assets
Broadcast licences and indefinite life intangible assets are reviewed for impairment annually or more frequently
if there are indications that impairment may have occurred.
Broadcast licences and indefinite life intangible assets are allocated to a CGU for the purposes of impairment
testing. The Company records an impairment loss if the recoverable amount of the CGU is less than the carrying
amount.
Refer to note 10 for further details on the Company’s annual impairment testing for broadcast licences and
indefinite life intangible assets.
Intangible assets and property, plant and equipment
The useful lives of the intangible assets with definite lives (that are amortized) and property, plant and equipment
are assessed at least annually and only tested for impairment if events or changes in circumstances indicate
that an impairment may have occurred.
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding
during the year. The computation of diluted earnings (loss) per share assumes the basic weighted average
number of common shares outstanding during the year is increased to include the number of additional common
shares that would have been outstanding if the dilutive potential common shares had been issued. The dilutive
effect of stock options is determined using the treasury stock method.
USE OF ESTIMATES AND JUDGMENTS
The preparation of these consolidated financial statements in conformity with IFRS requires management
to make estimates, judgments and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of
the consolidated financial statements and the reported amounts of revenue and expenses during the reporting
periods. Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
Accounting estimates will, by definition, seldom equal the actual results.
Corus Entertainment Annual Report 2023 | 69
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The most significant estimates made by management in the preparation of the Company’s consolidated financial
statements include estimates related to:
• the recoverability of long-lived assets including property, plant and equipment, right-of-use assets,
program rights, film investments, goodwill, broadcast licences and intangible assets; and fair value
assessments on acquired identifiable assets and obligations;
• certain actuarial and economic assumptions used in determining defined benefit pension costs, accrued
pension benefit obligations, pension plan assets, and accrued supplemental post-employment benefit
plan obligations;
• determining fair value of share-based compensation;
• the estimated useful lives of assets and right-of-use assets;
• determining discount rates used to measure lease liabilities; and
• income tax provisions and uncertain income tax positions in each of the jurisdictions in which the
Company operates.
The most significant judgments made by management in the preparation of the Company’s consolidated
financial statements include judgments related to:
• assessments about whether line items are sufficiently material to warrant separate presentation in
the primary financial statements and, if not, whether they are sufficiently material to warrant separate
presentation in the consolidated financial statement notes;
• identifying CGUs;
• the allocation of net assets, including shared corporate and administrative assets, to the Company’s
CGUs when determining their carrying amounts;
• determining that broadcast licences have indefinite lives;
• inclusion of renewal periods covered by options to extend lease terms included in the measurement of
right-of-use assets and liabilities;
• determining control for purposes of consolidation of an investment; and
• determining income tax rates for recognition of deferred income tax on broadcast licences.
The significant assumptions that affect these estimates and judgments in the application of accounting policies
are noted throughout these consolidated financial statements.
CHANGES IN ACCOUNTING POLICIES
IFRS 3 – BUSINESS COMBINATIONS (“IFRS 3”)
Amendments to IFRS 3 were issued in May 2020, and are effective for annual periods beginning on or after
January 1, 2022, with earlier application permitted. The amendments update references within IFRS 3 to the
2018 Conceptual Framework and require that the principles in IAS 27 - Provisions, Contingent Liabilities and
Contingent Assets be used to identify liabilities and contingent assets arising from business combination.
The Company has concluded there is no impact of adopting these amendments on its consolidated financial
statements.
IAS 37 – PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (“IAS 37”)
Amendments to IAS 37 were issued in May 2020, and are effective for annual periods beginning on or after
January 1, 2022, with earlier application permitted. The amendments address identifying onerous contracts
and specify the cost of fulfilling a contract which includes all costs directly related to the contract. These include
incremental direct costs and allocations of other costs that relate directly to fulfilling the contract. The Company
has concluded that there is no impact of adopting these amendments on its consolidated financial statements.
PENDING ACCOUNTING PRONOUNCEMENTS
IFRS 16 – LEASES (“IFRS 16”)
In September 2022, the IASB issued an amendment to IFRS 16, which add subsequent measurement
requirements for sale and leaseback transactions for seller-lessees. The amendments are effective for annual
reporting periods beginning on or after January 1, 2024 and are to be applied retrospectively. The Company is
currently assessing the impact of adopting these amendments on its consolidated financial statements.
70 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
IAS 1 – PRESENTATION OF FINANCIAL STATEMENTS (“IAS 1”)
In January 2020, the IASB issued an amendment to IAS 1, which affects the presentation of liabilities in the
statement of financial position and not the amount or timing of their recognition. The amendments clarify
that the classification of liabilities as current or non-current should be based on rights that are in existence
at the end of the reporting period and align the wording in all affected paragraphs to refer to the right to defer
settlement by at least 12 months. That classification is unaffected by the likelihood that an entity will exercise
its deferral right. The amendments are effective for annual periods beginning on or after January 1, 2024 and
are to be applied retrospectively. The Company is still assessing the impact of adopting these amendments on
its consolidated financial statements.
IAS 8 – ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS (“IAS 8”)
Amendments to IAS 8 were issued in February 2021, IASB issued Definition of Accounting Estimates, which
amends IAS 8. The amendment replaces the definition of accounting estimates. Under the new definition,
accounting estimates are “monetary amounts in financial statements that are subject to measurement
uncertainty.” The amendment provides clarification to help entities to distinguish between accounting policies
and accounting estimates. The amendments are effective for annual periods beginning on or after January 1,
2023. The Company has concluded that there is no impact of adopting these amendments on its consolidated
financial statements on September 1, 2023.
IAS 12 – INCOME TAXES (“IAS 12”)
Amendments to IAS 12 were issued in May 2021, IASB issued Deferred Tax related to Assets and Liabilities arising
from a Single Transaction, which amends IAS 12. The amendment narrows the scope of the initial recognition
exemption so that it does not apply to transactions that give rise to equal and offset temporary differences. As a
result, companies will need to recognize a deferred tax asset and deferred tax liability for temporary differences
arising on initial recognition of transactions such as leases and decommissioning obligations. The amendments
are effective for annual periods beginning on or after January 1, 2023 and are to be applied retrospectively. The
Company has concluded that there is no impact of adopting these amendments on its consolidated financial
statements on September 1, 2023.
4. ACCOUNTS RECEIVABLE
Trade
Other
Less allowance for doubtful accounts
2023
271,130
26,718
297,848
2,673
295,175
2022
291,175
23,000
314,175
3,160
311,015
Corus Entertainment Annual Report 2023 | 71
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
5. INVESTMENTS AND OTHER ASSETS
Balance - August 31, 2021
Increase in investments
Fair value adjustment through OCI with no reclassification to
net income (note 16)
Distribution from a venture fund investment
Post-retirement plan asset change (note 28)
Derivative fair value change (note 13)
Balance - August 31, 2022
Decrease in investments
Fair value adjustment through OCI with no reclassification to
net income (note 16)
Investment recovery (note 19)
Post-retirement plan asset change (note 28)
Derivative fair value change (note 13)
Balance - August 31, 2023
Investments in
venture funds
61,320
126 5
12,894
(43,478)
—
—
30,862
(457)
(2,066)
—
—
28,339
Other
assets
37,347
(6,239)
—
(1,971)
3,927
33,069
(8)
—
800
7,225
4,990
46,076
Total
98,667
131
6,655
(43,478)
(1,971)
3,927
63,931
(465)
(2,066)
800
7,225
4,990
74,415
INVESTMENT IN VENTURE FUNDS
In accordance with IFRS 9, the Company made the irrevocable election to designate all of its investments in
venture funds as financial assets at fair value through OCI and measured at fair value. The Company considers
this to be an appropriate classification because these investments are strategic in nature and not held for
trading. Changes in fair value of venture funds are permanently recognized in OCI and will not be reclassified
into profit and loss.
OTHER ASSETS
Other assets is comprised of net asset position of registered pension plans, derivative financial instruments
and investments in associates.
6. PROPERTY, PLANT AND EQUIPMENT AND LEASE LIABILITIES
Broadcasting
and computer
equipment
Buildings and
leasehold
improvements
Furniture
and
fixtures
Right-of-
use assets
Land
Other
Total
1,722
(430)
(6,492)
(976)
141,172 18,632 603,897
18,438
(3,322)
142,464 11,164 619,013
16,028
(16,016)
8,127 619,025
3,620
(1,916)
144,168
(2,598)
(439)
Cost
Balance - August 31, 2021
Additions
Disposals and retirements
Balance - August 31, 2022
Additions
Disposals and retirements
Balance - August 31, 2023
34,555
—
(100)
34,455
—
(367)
34,088
234,976
21,097
(574)
255,499
11,877
(12,879)
254,497
161,157
1,867
(1,242)
161,782
2,897
(308)
164,371
13,405
244
—
13,649
232
(107)
13,774
72 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
Broadcasting
and computer
equipment
Buildings and
leasehold
improvements
Furniture
and
fixtures
Right-of-
use assets
Land
Other
Total
—
—
—
—
—
—
—
172,323
17,274
(243)
189,354
15,992
(9,683)
195,663
76,610
7,456
(443)
83,623
7,418
(245)
90,796
10,818
916
—
11,734
809
(107)
12,436
23,857
12,605
(216)
36,246
12,934
(1,816)
47,364
960
(993)
4,063 287,671
39,211
(1,895)
4,030 324,987
38,075
(12,251)
4,552 350,811
922
(400)
34,455
34,088
66,145
58,834
78,159
73,575
1,915
1,338
106,218
96,804
7,134 294,026
3,575 268,214
Accumulated depreciation
Balance - August 31, 2021
Depreciation
Disposals and retirements
Balance - August 31, 2022
Depreciation
Disposals and retirements
Balance - August 31, 2023
Net book value
Balance - August 31, 2022
Balance - August 31, 2023
LEASES AND RIGHT-OF-USE ASSETS
The Company has the right-of-use of land and buildings under leases. The Company primarily leases land and
buildings related to its television and radio operations. The non-cancellable contract period for the Company’s
leases typically range from 2 to 23 years for offices and 5 to 30 years for transmitter sites.
Variable lease payments included in operating costs were $13.6 million in fiscal 2023 (2022 – $12.6 million).
For the year ended August 31,
Variable lease payment expenses not included in the measurement of lease liabilities
Interest expense on lease liabilities
Expenses for leases of low-value assets
Expenses for short-term leases
Rental income from subleasing activities
2023
13,590
6,144
999
2,345
3,690
Lease liabilities
Below is a summary of the activity related to lease liabilities for the year ended August 31:
As at August 31, 2021
Additions
Lease terminations
Interest expense
Payments
As at August 31, 2022
Additions
Lease terminations
Interest expense
Payments
Less current portion of lease liabilities (note 11)
Long-term portion of lease liabilities (note 14)
2022
12,639
6,456
1,120
2,297
3,403
143,546
1,722
(324)
6,456
(17,031)
134,369
3,620
(106)
6,144
(17,943)
(14,335)
111,749
Corus Entertainment Annual Report 2023 | 73
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
7. PROGRAM RIGHTS
Balance - August 31, 2021
Additions
Transfers from film investments (note 8)
Amortization (note 17)
Balance - August 31, 2022
Additions
Transfers from film investments (note 8)
Amortization (note 17)
Balance - August 31, 2023
576,076
636,412
8,044
(559,810)
660,722
595,282
8,151
(595,179)
668,976
The Company expects that approximately 40% of the net book value of program rights will be amortized
during the year ending August 31, 2024. The Company expects the net book value of program rights to be
fully amortized by August 2029.
8. FILM INVESTMENTS
Balance - August 31, 2021
Additions
Tax credit accrual
Transfer to program rights (note 7)
Acquisitions (note 26)
Amortization (note 17)
Balance - August 31, 2022
Additions
Tax credit accrual
Transfer to program rights (note 7)
Amortization (note 17)
Balance - August 31, 2023
39,732
60,168
(15,497)
(8,044)
6,692
(23,929)
59,122
73,786
(34,912)
(8,151)
(36,760)
53,085
The Company expects that approximately 18% of the net book value of film investments will be amortized
during the year ending August 31, 2024. The Company expects the net book value of film investments to be
substantially amortized by August 2042.
74 | Corus Entertainment Annual Report 2023
9. INTANGIBLES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
Broadcast
licences (1)
895,983
—
—
—
—
895,983
—
(219,791)
Balance - August 31, 2021
Additions
Acquisitions (note 26)
Impairments (note 10)
Amortization
Balance - August 31, 2022
Additions
Impairment (note 10)
Disposition (note 26)
Amortization
Balance - August 31, 2023
(1) Broadcast licences and goodwill are located in Canada.
(2) Other intangibles are principally comprised of computer software.
—
—
676,192
780,748
46,673
—
(2,204)
(110,021)
715,196
58,272
(175,000)
Brands and
trade marks Goodwill (1)
664,958
—
1,350
(350,000)
—
316,308
—
(295,209)
—
—
21,099
—
(111,212)
487,256
Other (2)
10,701
6,621
—
—
(7,705)
9,617
13,674
—
(1,251)
(8,358)
13,682
Total
2,352,390
53,294
1,350
(352,204)
(117,726)
1,937,104
71,946
(690,000)
(1,251)
(119,570)
1,198,229
The Company expects that approximately 16% of the net book value of brands and trade marks with a finite life
will be amortized during the year ending August 31, 2024. The Company expects the net book value of brands
and trade marks with a finite life to be fully amortized by August 2038.
Indefinite life intangibles, such as broadcast licences and goodwill, are tested for impairment annually as at
August 31 or more frequently if events or changes in circumstances indicate that they may be impaired.
At August 31, 2023, the Company performed impairment testing and has recorded total non-cash impairment
charges in the Television CGU against goodwill of $295.2 million, broadcast licences of $219.8 million, as well as
brand and trade marks of $175.0 million. No impairment was identified in the Radio operating segment CGUs.
For the year ended August 31, 2022, as the Television operating segment had actual results that fell short of
previous estimates and an outlook that was less robust, a non-cash goodwill impairment charge of $350.0
million was recorded in the Television CGU.
10. IMPAIRMENT TESTING
The test for impairment of either an intangible asset or goodwill is to compare the recoverable amount of the
asset or CGU or groups of CGUs to the carrying value. The recoverable amount is the higher of an asset’s or
CGU’s or groups of CGUs FVLCS and its VIU.
In fiscal 2023, the Company determined the VIU calculation for the Television CGU was higher than FVLCS and,
therefore, the recoverable amount was based on VIU. The recoverable amount for the Radio CGUs was based
on FVLCS as it was determined that it was higher than the VIU.
In fiscal 2022, the Company determined the VIU calculation was higher than FVLCS and, therefore, the
recoverable amount for all CGUs or groups of CGUs was based on VIU. The recoverable amount for the Television
CGU was less than the Television CGU carrying value, while the recoverable amount for the Radio group of CGUs
was greater than the Radio group of CGUs carrying value.
In determining FVLCS, recent market transactions are taken into account, if available. If no such transactions can
be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other available fair value indicators.
The VIU calculation uses cash flow projections, generally for a five-year period, and a terminal value. The terminal
value is the value attributed to the individual CGU’s or groups of CGU’s operations beyond the projected period
using a perpetual growth rate. The key assumptions in the VIU calculations are segment profit growth rates (for
periods within the cash flow projections and in perpetuity for the calculation of the terminal value) and discount
rates.
Segment profit growth rates are based on management’s best estimates considering historical and expected
operating plans, strategic plans, economic considerations and the general outlook for the industry and markets in
which the CGU or groups of CGUs operates. The projections are prepared separately for each of the Company’s
Corus Entertainment Annual Report 2023 | 75
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
CGUs or groups of CGUs to which the individual assets are allocated and are based on the most recent financial
budgets approved by the Company’s Board and management forecasts generally covering a period of five years
with growth rate assumptions. For longer periods, a terminal growth rate is determined and applied to project
future cash flows after the fifth year.
The discount rate applied to each asset, CGU or group of CGUs to determine VIU is a pre-tax rate that reflects
an optimal debt-to-equity ratio and considers the risk-free rate, market equity risk premium, size premium and
the risks specific to each asset or CGU’s or groups of CGU’s cash flow projections.
In calculating the VIU, the Company uses an appropriate range of discount rates in order to establish ranges of
values for each CGU or group of CGUs.
The pre-tax discount and growth rates used by the Company for the purpose of its VIU calculations of the
Television CGU generally range from 12% to 16% (2022 – 12% to 15%) and nil to 1% (2022 – nil to 1%), respectively.
The pre-tax discount and growth rates included in the FVLCS calculation of the Radio groups of CGUs generally
ranged from 12% to 16% (2022 – 12% to 15%) and nil to 1% (2022 – nil to 1%), respectively.
As a result of intangible impairment testing in the third and fourth quarter of fiscal 2023, the Company recorded
total non-cash impairment charges in the Television CGU against goodwill of $295.2 million, broadcast licences
of $219.8 million, as well as brands and trade marks of $175.0 million. No impairment was identified in the Radio
operating segment CGUs. The recoverable amount for the Televisions CGU was less than the carrying value
for the impairment tests, while the recoverable amount for the Radio CGUs was greater than the carrying value
for the Radio group of CGUs. The Company also assessed for any indicators of whether previous impairment
losses had decreased. No previously reported impairment losses on broadcast licenses or other intangible
assets were reversed.
As a result of the the goodwill impairment testing in fiscal 2022 of the Television CGU, the Company recorded
a goodwill impairment charge of $350.0 million in the Television segment that reduced the carrying value of
goodwill of this CGU to its recoverable amount. No goodwill or broadcast licence impairments were identified
on the Radio groups of CGUs. The Company also assessed for any indicators of whether previous impairment
losses had decreased. No previously recorded impairment losses on broadcast licences were reversed.
Sensitivity to changes in assumptions
Due to the uncertainty related to the macroeconomic environment, characterized by persistently high inflation
and continuing supply chain constraints, and as a result advertising demand and spending across the North
American television media industry has contracted meaningfully, the Company has noted there is significant
estimation uncertainty related to the Company’s growth rates and future cash flow estimates, which could
change in the near term and the effect of such changes could be material. An increase of 50 basis points in the
pre-tax discount rate, a decrease of 50 basis points in the earnings growth rate each year, or a decrease of 50
basis points in the terminal growth rate, each used in isolation to perform the Radio broadcast licence and both
the Television and Radio goodwill impairment tests, would have resulted in an additional incremental impairment
charge in the Television CGU between $nil and $65.0 million.
76 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The carrying amount of goodwill and broadcast licences allocated to each CGU and/or group of CGUs are set
out in the following tables:
Broadcast licences
Television
Radio
Toronto
Vancouver
Goodwill
Television
Radio
11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Program rights payable
Trade accounts payable and accrued liabilities
Trade marks and distribution rights
Short-term portion of lease liabilities (note 6)
Software license liabilities
Film investment accruals
Dividends payable
12. PROVISIONS
2023
2022
633,114
852,905
21,775
21,303
676,192
—
21,099
21,099
2023
317,166
156,236
71,558
14,335
4,145
1,612
—
21,775
21,303
895,983
295,209
21,099
316,308
2022
312,254
136,360
48,906
14,632
996
1,280
12,471
565,052
526,899
The Company recorded restructuring and other costs of $20,569 (2022 – $8,062) associated with employee
exits and system integration costs.
Balance – August 31, 2021
Additions
Interest
Payments
Balance – August 31, 2022
Additions (reductions) (1)
Interest
Payments
Balance – August 31, 2023
Restructuring
5,927
4,135
—
(2,893)
7,169
17,340
—
(12,699)
11,810
Onerous lease
obligation
1,660
—
—
(194)
1,466
(1,160)
—
(55)
251
Asset retirement
obligations (ARO)
8,932
—
216
7
9,155
(3,337)
193
—
6,011
Total
Other
16,699
180
4,535
400
216
—
(3,080)
—
18,370
580
13,043
200
—
193
— (12,754)
18,852
780
Current
Long-term
Balance – August 31, 2023
(1) Includes an ARO and onerous lease obligation write-down relating to decommissioned transmitter sites with a
corresponding reduction to the net book value of towers and transmitters and integration expense.
8,780
3,030
11,810
—
6,011
6,011
251
—
251
780
—
780
9,811
9,041
18,852
Corus Entertainment Annual Report 2023 | 77
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
13. LONG-TERM DEBT
Senior unsecured guaranteed notes (“Notes”)
Bank loans
Interim production financing
Deferred financing charges
Net debt
Less current portion of long-term debt
2023
750,000
337,295
13,434
(8,345)
1,092,384
(13,434)
1,078,950
2022
750,000
505,577
15,574
(9,501)
1,261,650
(15,574)
1,246,076
SENIOR UNSECURED NOTES AND CREDIT FACILITIES
The carrying value of the debt is accreted using the effective interest rate method over the remaining term of
the Credit Facility or the Senior Unsecured Notes with the accretion recognized within interest expense on the
condensed consolidated statements of loss and comprehensive loss.
Senior Unsecured Notes
The Company has $500.0 million in principal amount of 5.0% Senior Unsecured Notes due May 11, 2028 (the
“2028 Notes”) and $250.0 million in principal amount of 6.0% Senior Unsecured Notes due February 28, 2030
(the “2030 Notes” and, collectively with the 2028 Notes, the “Notes”). The 2030 Notes were issued on February
28, 2022 and the net proceeds were used to repay amounts under the Term Facility.
The Notes are senior unsecured obligations guaranteed by certain of the Company’s subsidiaries and contain
covenants that limit the Company’s ability to incur additional debt, make certain restricted payments and
investments, create liens, enter into transactions with affiliates, and consolidate, merge, transfer or sell all or
substantially all of its property and assets. Interest on the Notes is paid semi-annually.
At any time prior to May 11, 2024 (first optional early redemption date for the 2028 Notes), the Company may
redeem all or part of the 2028 Notes at a make-whole price determined by discounting the future interest and
early redemption payments to the first optional early redemption date with reference to prevailing market
Government of Canada rates plus 1%, but in any case at a redemption price that is no less than 101% of the
principal amount of the 2028 Notes being redeemed, plus accrued and unpaid interest to the date of redemption.
On or after May 11, 2024, the Company may redeem all or part of the 2028 Notes at the redemption price of
102.5% to May 11, 2025, 101.25% to May 11, 2026 and 100% thereafter, plus accrued and unpaid interest to
the date of redemption.
At any time prior to February 28, 2025 (first optional early redemption date for the 2030 Notes), the Company
may redeem all or part of the 2030 Notes at a make-whole price determined by discounting the future interest
and early redemption payments to the first optional early redemption date with reference to prevailing market
Government of Canada rates plus 1%, but in any case at a redemption price that is no less than 101% of the
principal amount of the 2030 Notes being redeemed, plus accrued and unpaid interest to the date of redemption.
On or after February 28, 2025, the Company may redeem all or part of the 2030 Notes at the redemption price of
103% to February 28, 2026, 101.5% to February 28, 2027 and 100% thereafter, plus accrued and unpaid interest
to the date of redemption.
The prepayment options associated with the Notes were fair valued at the time of debt issuance. The initial
value of the prepayment options related to the Notes was a $9.6 million increase to indebtedness. This liability
has been subsequently amortized using the effective interest rate method and as at August 31, 2023 was $7.4
million.
Credit Facility
Interest rates on the bank loans fluctuate with Canadian bankers’ acceptances. As at August 31, 2023, the
weighted average interest rate on the outstanding bank loans and Notes was 5.9% (2022 – 5.6%). The effective
interest rate on the bank loans averaged 6.0% for fiscal 2023 (2022 – 4.5%).
78 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The banks hold, as collateral, a first ranking charge on all assets and undertakings of Corus and certain of Corus’
subsidiaries as designated under the Credit Facility, as amended from time to time. Under the Credit Facility,
the Company has undertaken to comply with financial covenants regarding a minimum interest coverage ratio
and a maximum debt to cash flow ratio. Management has determined that the Company was in compliance with
the covenants provided under the Credit Facility as at August 31, 2023.
Term Facility
On October 26, 2023, the Company’s Credit Facility was amended to increase the maximum total debt to cash
flow ratio required under the financial covenants up to and including August 31, 2024, reintroduce mandatory
quarterly repayments of the Term Facility, change certain conditions related to the use of proceeds on asset
disposals and to introduce additional restrictions on distributions to shareholders.
On February 17, 2023, the Credit Facility was amended. The principal amendment was to increase the maximum
total debt to cash flow ratio required under the financial covenants up to and including November 30, 2023. The
amendment of the Credit Facility resulted in the Company recording additional deferred financing fees of $1.0
million.
On March 18, 2022, the Credit Facility was amended and restated. The principal amendments were to extend
the maturity on both the Term Facility and the Revolving Facility to March 18, 2027 and to eliminate quarterly
mandatory repayments and mandatory repayments from the net proceeds from the issue of other debt on the
Term Facility. Net proceeds from the 2030 Notes issued on February 28, 2022 were used for repayment of the
Term Facility and resulted in the Company recording net debt refinancing costs of $0.8 million for the non-cash
write-off of unamortized financing fees. The March 18, 2022 amendment and restatement of the Credit Facility
resulted in the Company recording a net debt refinancing gain of approximately $4.2 million.
As at August 31, 2023, the Term Facility balance was $337.3 million with a maturity date of March 18, 2027.
Advances under the Term Facility may be outstanding in the form of either prime loans or bankers’ acceptances
and bear interest at the applicable reference rate plus an applicable margin depending on the type of advance
and Corus’ total debt to cash flow ratio.
Voluntary prepayments on the amount outstanding under the Term Facility are permitted at any time without
penalty, subject to payment of customary breakage costs, if applicable, and provided that advances in the form
of bankers’ acceptances may only be paid on their maturity.
Revolving Facility
With the amendment and restatement of the Credit Facility effective March 18, 2022, the maturity of the
Revolving Facility was extended to March 18, 2027. The Revolving Facility is available on a revolving basis to
finance permitted acquisitions and capital expenditures and for general corporate purposes. Amounts owing
under the Revolving Facility will be payable in full at maturity. The Revolving Facility permits full or partial
cancellation of the facility and, if applicable, concurrent prepayment of the amounts drawn thereunder at any
time without penalty, subject to payment of customary breakage costs, if applicable, and provided that advances
in the form of bankers’ acceptances may only be paid on their maturity.
Advances under the Revolving Facility may be drawn in Canadian dollars as either a prime rate loan, bankers’
acceptance or Canadian dollar denominated letters of credit (to a sub-limit of $50.0 million total), or in U.S. dollars
as either a base rate loan, Secured Overnight Financing Rate (“SOFR”) advance or U.S. dollar denominated letters
of credit (to a sub-limit of $50.0 million total). Amounts drawn under the Revolving Facility will bear interest at
the applicable reference rate plus an applicable margin depending on the type of advance and Corus’ total debt
to cash flow ratio. A standby fee will also be payable on the unutilized amount of the Revolving Facility. As at
August 31, 2023, the Company has approximately $300.0 million under the Revolving Facility, $285.9 million of
which could be drawn.
Interim Production Financing
A non-wholly owned subsidiary of Corus has incurred revolving demand loans with certain financial institutions
as interim financing for film or television productions. As at August 31, 2023, four interim financing agreements
for television productions are drawn in the total amount of $13.4 million.
Corus Entertainment Annual Report 2023 | 79
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
INTEREST RATE SWAP AGREEMENTS
The Company had a Canadian interest rate swap agreement to fix the interest rate on a portion of its outstanding
term loan facility, which expires on March 18, 2027. The counterparties of the swap agreement were highly
rated financial institutions and the Company did not experience any non-performance. The fair value of Level 2
financial instruments, such as interest rate swap agreements, is calculated by way of discounted cash flows, using
market interest rates and applicable credit spreads. In fiscal 2023, the Company had assessed that there was no
ineffectiveness in the hedge of its interest rate exposure. As an effective hedge, unrealized gains or losses on
the interest rate swap agreement were recognized in other comprehensive loss (note 16). The estimated fair
value of these agreements as at August 31, 2023 was an asset of $6.7 million ( 2022 – $nil). The effectiveness
of the hedging relationship was reviewed on a quarterly basis.
TOTAL RETURN SWAPS
The Company has a total return swap agreement on 1,706,000 share units to offset its exposure to changes in
the fair value of certain cash settled share-based compensation awards. The estimated fair value of this Level 1
financial instrument will fluctuate with the market price of the Company’s shares. The counterparty of this swap
agreement is a highly rated financial institution and the Company does not anticipate any non-performance.
The estimated fair value of this agreement as at August 31, 2023 is a liability of $6.0 million (2022 – $4.0 million),
which has been recorded in the consolidated statements of financial position as an other long-term liability and
within employee costs in the consolidated statements of loss and comprehensive loss (note 17).
On December 8, 2022, 1,891,500 shares under a total return swap were settled at a cost of $4.7 million.
FORWARD CONTRACTS
All foreign exchange forward contracts fix the foreign exchange rate and cash flows related to a portion of the
Company’s U.S. dollar denominated liabilities. As at August 31, 2023, the total amount of foreign exchange
forward contracts outstanding was $45.0 million U.S dollars. The forward contracts are not designated as hedges
for accounting purposes; they are measured at fair value at each reporting date. The counterparty of the forward
contracts is a highly rated financial institution and the Company does not anticipate any non-performance. The
estimated fair value of future cash flows of the U.S. dollar forward contract derivatives change with fluctuations
in the foreign exchange rate of U.S. dollars to Canadian dollars. The estimated fair value of these agreements as
at August 31, 2023 was an asset of $2.2 million (2022 – $1.6 million), which has been recorded in the consolidated
statements of financial position as investment and other assets (note 5), and within other expense (income),
net (note 19) , in the consolidated statements of loss and comprehensive loss.
14. OTHER LONG-TERM LIABILITIES
Program rights payable
Lease liabilities (note 6)
Trade mark liabilities
Long-term employee obligations
Post employment benefit plans
Unearned revenue
Software license liabilities
Aircraft Pictures Limited put option (note 26)
2023
115,534
111,749
35,996
25,688
12,316
9,511
4,119
1,999
316,912
2022
147,671
119,737
45,687
31,419
12,624
15,856
1,748
1,828
376,570
80 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
15. SHARE CAPITAL
AUTHORIZED
The Company is authorized to issue, upon approval of holders of no less than two-thirds of the existing Class
A shares, an unlimited number of Class A participating shares (“Class A Voting Shares”), as well as an unlimited
number of Class B Non-Voting Shares, Class A Preferred Shares, and Class 1 and Class 2 Preferred Shares.
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.
The Class A Preferred Shares are redeemable at any time at the demand of Corus and retractable at any time at
the demand of a holder of a Class A Preferred Share for an amount equal to the consideration received by Corus
at the time of issuance of such Class A Preferred Shares. Holders of Class A Preferred Shares are entitled to
receive a non-cumulative dividend at such rate as Corus’ Board may determine on the redemption amount of the
Class A Preferred Shares. Each of the Class 1 Preferred Shares, the Class 2 Preferred Shares, the Class A Voting
Shares and the Class B Non-Voting Shares rank junior to and are subject in all respects to the preferences, rights,
conditions, restrictions, limitations and prohibitions attached to the Class A Preferred Shares in connection with
the payment of dividends.
The Class 1 and Class 2 Preferred Shares are issuable in one or more series with attributes designated by the
Board of Directors. The Class 1 Preferred Shares rank senior to the Class 2 Preferred Shares.
In the event of liquidation, dissolution or winding-up of the Company or other distribution of assets of the
Company for the purpose of winding up its affairs, the holders of Class A Preferred Shares are entitled to a
payment in priority to all other classes of shares of the Company to the extent of the redemption amount of the
Class A Preferred Shares, but will not be entitled to any surplus in excess of that amount. The remaining property
and assets will be available for distribution to the holders of the Class A Voting Shares and Class B Non-Voting
Shares, which shall be paid or distributed equally, share for share, between the holders of the Class A Voting
Shares and the Class B Non-Voting Shares, without preference or distinction.
No Class A Preferred Shares, Class 1 Preferred Shares or Class 2 Preferred Shares are outstanding as at August
31, 2023.
ISSUED AND OUTSTANDING
Balance – August 31, 2021
Conversion of Class A Voting Shares to Class B
Non-Voting Shares
Shares repurchased under NCIB
Shares repurchase commitment under NCIB
Balance – August 31, 2022
Conversion of Class A Voting Shares to Class B
Non-Voting Shares
Class A Voting Shares Class B Non-Voting Shares
Total
# $
# $
$
3,412,392
9,439 204,954,666
806,750
816,189
(40,866)
—
—
3,371,526
(113)
—
—
40,866
(8,141,900)
(565,000)
9,326 196,288,632
113
(32,047)
(2,224)
772,592
—
(32,047)
(2,224)
781,918
Reduction of stated capital (1)
Shares repurchased under NCIB
Reversal of automatic share purchase commitment
Balance – August 31, 2023
3,367,526
(1) Reduction of stated capital approved at the Company’s Annual General and Special Meeting of Shareholders on January 19, 2023.
(494,000)
(3,090)
2,224
277,730
(4)
(6,000)
—
—
4,000 4
—
(785,000)
565,000
3,322 196,072,632
(4,000)
—
—
—
—
(500,000)
(3,090)
2,224
281,052
Corus Entertainment Annual Report 2023 | 81
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
LOSS PER SHARE
The following is a reconciliation of the numerator and denominator (in thousands) used for the computation
of the basic and diluted earnings per share amounts:
Net loss attributable to shareholders (numerator)
Weighted average number of shares outstanding (denominator)
Weighted average number of shares outstanding – basic
Effect of dilutive securities
Weighted average number of shares outstanding – diluted
2023
2022
(428,724)
(245,058)
199,521
—
199,521
205,905
337
206,242
The calculation of diluted loss per share for fiscal 2023 excluded 7,255 (2022 – 6,335) weighted average Class B
Non-Voting Shares issuable under the Company’s Stock Option Plan because these options were anti-dilutive.
STOCK OPTION PLAN
Under the Company’s Stock Option Plan (the “Plan”), the Company may grant options to purchase Class B
Non-Voting Shares to eligible officers, directors and employees of or consultants to the Company. The number
of Class B Non-Voting Shares that the Company is authorized to issue under the Plan is 10% of the issued and
outstanding Class B Non-Voting Shares. All options granted prior to fiscal 2023 are for terms not to exceed
7 years, while all options granted in fiscal 2023 are for terms not to exceed 10 years from the grant date. The
exercise price of each option equals the closing market price on the TSX of the Company’s stock on the trading
date immediately preceding the date of the grant. Options vest 25% on each of the first, second, third and fourth
anniversary dates of the date of grant.
A summary of the changes to the stock options outstanding is presented as follows:
Outstanding – August 31, 2021
Granted
Forfeited or expired
Outstanding – August 31, 2022
Granted
Forfeited or expired
Outstanding – August 31, 2023
Number of options
(#)
7,225,650
889,100
(531,650)
7,583,100
3,004,200
(1,284,600)
9,302,700
Weighted average
exercise price per share
($)
8.41
5.74
18.53
7.38
1.43
9.38
5.19
As at August 31, 2023, the options outstanding and exercisable consist of the following:
Range of exercise price ($)
1.43 – 2.40
2.41 – 4.13
4.14 – 5.59
5.60 – 8.82
8.83 – 12.62
Options outstanding
Weighted average
remaining
contractual life
(years)
9.5
4.6
3.1
5.1
1.0
5.2
Number
outstanding
(#)
3,004,200
1,249,500
2,071,400
1,062,900
1,914,700
9,302,700
Weighted
average
exercise price
($)
1.43
3.38
5.14
5.80
11.97
5.19
Options exercisable
Number
outstanding
(#)
—
624,750
1,849,550
422,925
1,914,700
4,811,925
Weighted
average
exercise price
($)
—
3.38
5.11
5.88
11.97
7.68
82 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The fair value of each option granted has been estimated on the date of the grant using the Black-Scholes option
pricing model. The estimated fair value of the options is amortized to income over the options’ vesting period on
a straight-line basis. In fiscal 2023, the Company recorded share-based compensation expense of $840 (2022
– $1,265). This charge has been credited to contributed surplus. Unrecognized share-based compensation
expense at August 31, 2023 related to the Plan was $1,091 (2022 – $1,097).
The fair value of each option granted in fiscals 2023 and 2022 was estimated on the date of the grant using the
Black-Scholes option pricing model with the following assumptions:
Grant date
Fair value
Risk-free interest rate
Expected dividend yield
Expected share price volatility
Expected time until exercise (years)
April 2023
$0.31
3.1%
8.4%
48.8%
6
October
2021
$1.66
1.4%
4.3%
45.7%
6
The expected life of the options is based on historical data and current expectations and is not necessarily
indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the
historical volatility over a period similar to the life of the options is indicative of future trends, which may also
not necessarily be the actual outcome.
In the third quarter of fiscal 2023, 3,004,200 stock options were granted at a weighted average exercise price
of $1.43.
SHARE-BASED COMPENSATION
The following table provides a summary of the changes in the number of units for the PSUs, DSUs and RSUs
as follows:
Balance – August 31, 2021
Additions
Deemed dividend equivalents
Forfeitures
Payments
Balance – August 31, 2022
Additions
Deemed dividend equivalents
Forfeitures
Payments
Balance – August 31, 2023
PSUs
3,116,096
762,350
143,010
(19,200)
(1,005,603)
2,996,653
3,021,200
265,165
(76,600)
(826,786)
5,379,632
DSUs
2,295,982
148,811
122,508
—
(119,132)
2,448,169
347,169
224,626
—
(252,580)
2,767,384
RSUs
1,996,849
634,810
101,834
(54,906)
(473,154)
2,205,433
2,479,574
216,094
(78,713)
(396,660)
4,425,728
Share-based compensation recorded for the fiscal year in respect of these plans was a recovery of $2,097 (2022
– expense of $2,931). As at August 31, 2023, the carrying value of the liability for PSU, DSU and RSU units was
$6,698 (2022 – $16,949).
Corus Entertainment Annual Report 2023 | 83
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
DIVIDENDS
The holders of Class A Voting Shares and Class B Non-Voting Shares are entitled to receive such dividends as the
Board of Directors determines to declare on a share-for-share basis, as and when any such dividends are declared
or paid. The holders of Class B Non-Voting Shares are entitled to receive, during each dividend period, in priority
to the payment of dividends on the Class A Voting Shares, a dividend which is $0.005 per share per annum higher
than that received on the Class A Voting Shares. This higher dividend rate is subject to proportionate adjustment
in the event of future consolidations or subdivisions of shares and in the event of any issue of shares by way of
stock dividend. After payment or setting aside for payment of the additional non-cumulative dividends on the
Class B Non-Voting Shares, holders of Class A Voting Shares and Class B Non-Voting Shares participate equally,
on a share-for-share basis, on all subsequent dividends declared.
The total amount of dividends declared in fiscal 2023 was $23,971 (2022 – $49,561).
DIVIDEND REINVESTMENT PLAN (“DRIP”)
There is a DRIP that does not currently provide for a discount for the Class B Non-Voting Shares. Shares are
purchased in the open market to satisfy the Company’s delivery obligations pursuant to its DRIP.
NORMAL COURSE ISSUER BID (“NCIB”)
On January 13, 2022, the Company announced that the TSX had accepted the notice filed by the Company
for the renewal of an NCIB for its Class B Non-Voting Shares through the facilities of the TSX, and/or other
alternative Canadian trading systems. The Company could purchase for cancellation a maximum of 9,669,705
Class B Non-Voting Shares during the period from January 17, 2022 through January 16, 2023.
On August 9, 2022, the Company announced that the TSX had accepted the notice filed by the Company to
amend its NCIB for its Class B Non-Voting Shares. The principle amendment increases the maximum number of
Class B Non-Voting Shares that could be repurchased from 9,669,705 Class B Non-Voting Shares to 19,339,410
Class B Non-Voting Shares. The NCIB was not renewed upon expiration of the term on January 16, 2023.
The shares purchased for cancellation are as follows:
January 2022
February 2022
March 2022
April 2022
May 2022
June 2022
July 2022
August 2022
Fiscal 2022
September 2022 (1)
October 2022
#
300,000
949,600
395,000
500,000
3,223,000
1,454,600
874,700
445,000
8,141,900
#
435,000
350,000
Average per
share
$
4.93
5.14
4.98
4.55
4.15
4.04
3.64
3.87
4.27
Average per
share
$
2.67
2.31
$
1,480
4,878
1,967
2,275
13,379
5,882
3,184
1,721
34,766
$
1,163
808
Fiscal 2023
2.51
(1) Amount does not include the reversal of an automatic share purchase commitment from August 31, 2022 of 565,000 shares at $1.7
785,000
1,971
million, net of 435,000 shares purchased at $1.2 million.
During fiscal 2023, the total cash consideration paid was lower than the carrying value of the shares repurchased
by $1,119, (2022 – exceeded carrying value by $2,719), which was charged to contributed surplus.
84 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
16. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance – August 31, 2021
(4,891)
6,882
19,820
—
21,811
Unrealized
change in
fair value of
cash flow
hedges
Unrealized
foreign currency
translation
adjustment
Unrealized
change in
fair value of
financial assets
Actuarial gains
(losses) on
defined benefit
plans
Total
Items that may be subsequently reclassified to
income (loss):
Amount
Income tax
Items that will not be reclassified to income (loss):
Amount
Income tax
Transfer to retained earnings
Balance – August 31, 2022
Items that may be subsequently reclassified to
income (loss):
Amount
Income tax
Items that will not be reclassified to income (loss):
Amount
Income tax
Transfer to retained earnings
Balance – August 31, 2023
6,655
(1,764)
—
—
—
—
—
—
6,728
(1,783)
4,945
—
—
—
—
1,296
—
8,178
—
—
—
—
8,178
1,067
—
9,245
—
—
—
—
4,945
9,245
—
—
19,820
6,655
(1,653)
5,002
—
24,822
—
—
24,822
(2,066)
895
(1,171)
—
23,651
—
—
—
7,951
(1,764)
27,998
6,076
12,731
(1,610)
(3,263)
4,466
9,468
(4,466)
(4,466)
—
33,000
—
—
—
7,795
(1,783)
39,012
13,062
10,996
(3,461)
(2,566)
9,601
8,430
(9,601)
(9,601)
—
37,841
17. DIRECT COST OF SALES, GENERAL AND ADMINISTRATIVE EXPENSES
Direct cost of sales
Amortization of program rights (note 7)
Amortization of film investments (note 8)
Other cost of sales
General and administrative expenses
Employee costs
Other general and administrative
2023
2022
595,179
36,760
39,976
322,890
182,430
559,810
23,929
43,488
341,565
186,151
1,177,235
1,154,943
Corus Entertainment Annual Report 2023 | 85
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
18. INTEREST EXPENSE
Interest on long-term debt
Imputed interest on long-term liabilities
Other expense
19. OTHER EXPENSE (INCOME), NET
Foreign exchange loss (notes 13 and 23)
Fair value loss on Notes prepayment options (note 13)
Asset impairment reversal (note 5)
Trademark intangible write-off (note 9)
Equity gain of associates
Other income
20. INCOME TAXES
The significant components of income tax expense are as follows:
Current income tax expense
Deferred income tax expense (recovery)
Resulting from temporary differences
Resulting from the utilization of tax losses
Resulting from tax rate changes
Resulting from the creation of various future tax reserves
Other
Income tax expense reported in the consolidated statements of loss and
comprehensive loss
2023
75,240
57,547
2,623
2022
58,481
46,201
2,426
135,410
107,108
2023
4,625
2,324
(800)
—
(31)
(9,788)
(3,670)
2023
23,711
(127,309)
14,521
6
(12,517)
782
2022
9,821
7,301
—
2,204
(41)
(2,438)
16,847
2022
50,793
(12,732)
1,662
(1)
890
(257)
(100,806)
40,355
86 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
A reconciliation of income tax computed at the statutory tax rates to income tax expense is as follows:
Income tax at combined federal and provincial rates
Differences from statutory rates relating to:
Goodwill impairment
Increase (reduction in deferred income taxes resulting from rate
changes
Miscellaneous differences
Non-taxable portion of capital gains
Transaction costs
Increase in (recovery of) various income tax reserves
Income subject to tax at less than statutory rates
($)
(138,644)
2023
(%)
($)
26.5 (50,665)
2022
(%)
26.4
71,065
(13.6)
91,003
(47.4)
6
1,586
(19,568)
187
(15,354)
(84)
(100,806)
—
(0.3)
3.7
—
2.9
—
19.2
(1)
227
(4)
(57)
771
—
(0.1)
—
—
(0.4)
(919)
40,355
0.5
(21.0)
The movement in the net deferred income tax asset (liability) was as follows:
Broadcast
Accrued
Fixed
Non-capital
Financing
licences and
compen-
assets and
Program
loss carry-
Invest-
and debt
other intangibles
sation
film assets
rights
forwards
ments
retirement
Other
Total
Balance – August 31, 2021
(425,220)
11,361
16,779
10,422
7,423
(3,439)
(744)
4,505
(378,913)
Recognized in profit or loss
17,509
(3,192)
(1,959)
(1,913)
(1,662)
1,266
1,796
(1,408)
10,437
Recognized in OCI
—
(1,610)
—
Balance – August 31, 2022
(407,711)
6,559
14,820
Recognized in profit or loss
127,398
243
(2,671)
Recognized in OCI
Acquisitions (dispositions)
—
(3,461)
—
—
—
3
—
8,509
2,335
—
—
—
7,141
(1,764)
—
3,767
5,761
4,968
(3,670)
442
(712)
719
3,097
(364,709)
(280)
124,516
—
—
(3,831)
(1,783)
—
—
—
56
(9,075)
59
Balance – August 31, 2023
(280,313)
3,341
12,152
10,844
2,091
1,579
(1,776)
2,873
(249,209)
At August 31, 2023, the Company had approximately $9,370 (2022 – $26,047) of non-capital loss carryforwards
available, which expire between the years 2026 and 2043. A deferred income tax asset of $2,092 (2022 – $5,761)
has been recognized in respect of these losses and an income tax benefit of $392 (2022 – $1,084) has not been
recognized.
At August 31, 2023, the Company had approximately $4,170 (2022 – $40,882) of capital loss carryforwards
available, which have no expiry date. No income tax benefit has been recognized in respect of these losses.
The Company has taxable temporary differences associated with its investments in its subsidiaries. No deferred
income tax liabilities have been provided with respect to such temporary differences as the Company is able to
control the timing of the reversal and such reversal is not probable in the foreseeable future.
There are no income tax consequences to the Company attached to the payment of dividends, in either 2023
or 2022, by the Company to its shareholders.
Corus Entertainment Annual Report 2023 | 87
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
21. BUSINESS SEGMENT INFORMATION
The Company’s business activities are conducted through two segments: Television and Radio.
TELEVISION
The Television segment comprises 33 specialty television networks, 15 conventional television stations, digital
and streaming services, a social media digital agency, a social media creator network, technology and media
services, and the Corus content business, which includes the production and distribution of films and television
programs, merchandise licensing, book publishing, and animation software (sold August 23, 2023). Revenue
is generated from advertising, subscribers and the licensing of proprietary films and television programs,
merchandise licensing, book publishing, animation software, and technology and media service sales.
RADIO
The Radio segment comprises 39 radio stations across Canada, situated primarily in urban centres in English
Canada, with a concentration in the densely populated area of Southern Ontario. Revenue is derived from
advertising aired over these stations.
CORPORATE
Corporate results represent the incremental cost of corporate overhead in excess of the amount allocated to
the other operating segments.
Management evaluates each division’s performance based on revenue less direct cost of sales, general and
administrative expenses. Segment profit (loss) excludes depreciation and amortization, interest expense, debt
refinancing costs, restructuring and other costs, impairments, gains or losses on dispositions, and certain other
income and expenses.
The accounting policies of the segments are the same as those described in the summary of significant
accounting policies in note 3.
REVENUE AND SEGMENT PROFIT
Year ended August 31, 2023
Revenue
Direct cost of sales, general and administrative expenses
Segment profit (loss)
Depreciation and amortization
Interest expense
Goodwill, broadcast licence and other asset impairment
Restructuring and other costs
Gain on disposition
Other income, net
Loss before income taxes
Year ended August 31, 2022
Revenue
Direct cost of sales, general and administrative expenses
Segment profit (loss)
Depreciation and amortization
Interest expense
Goodwill, broadcast licence and other asset impairment
Debt refinancing
Restructuring and other costs
Other expense, net
Loss before income taxes
Television
Radio Corporate Consolidated
1,408,468
1,067,888
340,580
102,772
89,312
13,460
—
1,511,240
20,035
1,177,235
(20,035)
334,005
Television
1,492,708
1,034,563
458,145
Radio
105,878
92,611
13,267
157,645
135,410
690,000
20,569
(142,288)
(3,670)
(523,661)
—
27,769
(27,769)
Corporate Consolidated
1,598,586
1,154,943
443,643
156,937
107,108
350,000
(3,428)
8,062
16,847
(191,883)
88 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The following tables present further details on revenue composition, location and timing of recognition in the
Television and Radio segments.
Revenue is derived from the following areas:
Advertising
Subscriber fees
Distribution, production and other
2023
865,633
502,257
143,350
2022
960,192
518,483
119,911
1,511,240
1,598,586
Revenue is derived from the following geographical sources, by location of customer:
Canada
International
2023
1,411,819
99,421
1,511,240
2022
1,519,216
79,370
1,598,586
International revenue pertains to customers in the Television segment only.
The following table includes revenue from contracts disaggregated by the timing of revenue recognition:
Products transferred at a point in time
Products and services transferred over time
SEGMENT ASSETS AND LIABILITIES
Assets
Television
Corporate
Radio
Liabilities
Corporate
Television
Radio
CAPITAL EXPENDITURES BY SEGMENT
Television
Corporate
Radio
Property, plant and equipment are located primarily within Canada.
2023
971,392
539,848
1,511,240
2022
1,045,852
552,734
1,598,586
2023
2022
2,374,571
252,169
119,322
2,746,062
1,282,667
941,229
63,166
2,287,062
2023
9,730
2,158
1,414
13,302
3,124,315
254,213
123,952
3,502,480
1,438,328
1,090,061
70,110
2,598,499
2022
10,871
4,795
2,144
17,810
Corus Entertainment Annual Report 2023 | 89
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
22. CAPITAL MANAGEMENT
The Company’s capital management objectives are to maintain appropriate financial flexibility in order to
pursue organic growth, achieve business goals and repay debt, all with the objective to provide returns to
its shareholders. The Company defines capital as the aggregate of its shareholders’ equity and long-term
debt less cash and cash equivalents. Total managed capital is as follows:
Total debt, net of unamortized financing fees (note 13)
Lease liabilities (notes 11 and 14)
Cash and cash equivalents
Net debt
Equity attributable to shareholders
2023
1,092,384
126,084
(56,163)
1,162,305
317,752
1,480,057
2022
1,261,650
134,369
(54,912)
1,341,107
752,041
2,093,148
The Company monitors capital using several key performance metrics, including net debt to segment profit
ratio. The Company’s stated long-term objective is a leverage target (net debt to segment profit ratio) of below
2.5 times. In the short term, the Company may permit the long-term range to be exceeded, but endeavours to
return to the leverage target range. As at August 31, 2023, the Company’s leverage ratio was 3.48 times net
debt to segment profit, up from 3.02 times at August 31, 2022.
23. FINANCIAL INSTRUMENTS
The following tables set out the classification of financial and non-financial assets and liabilities.
As at August 31, 2023
Fair value
through profit
or loss
Amortized
cost
Fair value
through
OCI with no
reclassification
to net income
Fair value
through
OCI with
reclassification
to net income Non-financial
Total carrying
amount
59,401
392,530
64,449
6,728
2,222,954
2,746,062
—
—
64,449
—
—
—
—
6,728
—
—
—
—
—
56,163
295,175
74,415
1,198,229
1,198,229
1,024,725
1,122,080
—
—
31,823
—
31,823
—
—
—
—
—
—
—
—
293,862
574,863
1,092,384
325,953
293,862
293,862
2,287,062
Cash and cash equivalents
56,163
—
Accounts receivable
—
295,175
Investments and other assets
Intangibles
Other assets
Total assets
Accounts payable, accrued
liabilities and provisions
Long-term debt
Other long-term liabilities and
provisions
3,238
—
—
—
—
97,355
—
—
574,863
1,092,384
15,692
278,438
Deferred income tax liabilities
—
—
Total liabilities
15,692
1,945,685
90 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
As at August 31, 2022
Cash and cash equivalents
Accounts receivable
Investments and other assets
Intangibles
Other assets
Total assets
Accounts payable, accrued
liabilities and provisions
Long-term debt
Other long-term liabilities and
provisions
Deferred income tax liabilities
Total liabilities
Fair value
through profit
or loss
54,912
—
4,189
—
—
59,101
Amortized
cost
—
311,015
—
—
91,866
402,881
—
—
535,439
1,261,650
29,156
326,501
—
—
29,156
2,123,590
Fair value
through
OCI with no
reclassification
to net income
Fair value
through OCI with
reclassification
to net income Non-financial
Total carrying
amount
—
—
59,742
—
—
59,742
—
—
30,743
—
30,743
—
—
—
—
—
—
—
—
—
—
—
—
—
—
54,912
311,015
63,931
1,937,104
1,937,104
1,043,652
1,135,518
2,980,756
3,502,480
—
—
—
415,010
415,010
535,439
1,261,650
386,400
415,010
2,598,499
FAIR VALUES
The fair values of financial instruments included in current assets and current liabilities approximate their
carrying values due to their short-term nature.
The fair value of publicly traded shares included in investments is determined by quoted share prices in active
markets. The fair value of other financial instruments included in this category is determined using other
valuation techniques.
The fair value of bank loans is estimated based on discounted cash flows using year-end market yields, adjusted
to take into account the Company’s own credit risk. The long-term debt is regularly repriced to floating market
interest rates and as such, the carrying value of the Company’s bank loans approximate their fair value.
The fair value of the Company’s Notes is based on the trading price of the Notes, which takes into account the
Company’s own credit risk. As at August 31, 2023, the Company has estimated the fair value of its Notes to be
approximately $511,250 (2022 – $632,188).
Periodically, the Company enters into Canadian dollar interest rate swap agreements. The fair value of the
interest rate swap agreements is calculated by way of discounted cash flows, using market interest rates and
applicable credit spreads.
Periodically, the Company enters into U.S. dollar foreign currency forward contracts. The fair value of the foreign
currency forward contracts is calculated by way of discounted cash flows, using market foreign exchange rates
and applicable discount factors.
Periodically, the Company enters into total return swaps. The fair value of these equity instruments is based on
the quoted share price in the active market at the period end.
The fair values of financial instruments in other long-term liabilities approximate their carrying values as they
are recorded at the net present values of their future cash flows, using an appropriate discount rate.
Fair value estimates are made at a specific point in time, based on relevant market information and information
about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters
of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.
The following tables present information related to the Company’s financial assets measured at fair value on a
recurring basis and the level within the guidance hierarchy in which the fair value measurements fall as at August
31 as follows:
Corus Entertainment Annual Report 2023 | 91
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
Quoted prices in active markets
for identical assets or liabilities
Significant other
observable inputs
As at August 31, 2023
Assets
Cash and cash equivalents
Prepayment option of Notes
Foreign exchange forward contracts
Interest return swap
Investments in venture funds
Assets carried at fair value
Liabilities
Total return swap
Liabilities carried at fair value
As at August 31, 2022
Assets
Cash and cash equivalents
Prepayment option of Notes
Foreign exchange forward contracts
Investments in venture funds
Assets carried at fair value
Liabilities
Total return swap
Liabilities carried at fair value
(Level 1)
56,163
—
—
—
—
56,163
5,998
5,998
54,912
—
—
—
54,912
4,005
4,005
Significant
unobservable inputs
(Level 3)
(Level 2)
—
9
2,180
6,728
—
8,917
—
—
—
2,333
1,594
—
3,927
—
—
—
—
—
—
28,339
28,339
—
—
—
—
—
30,862
30,862
—
—
RISK MANAGEMENT
The Company is exposed to various risks related to its financial assets and liabilities. These risk exposures are
managed on an ongoing basis.
Credit risk
In the normal course of business, the Company is exposed to credit risk from its accounts receivable from
customers. The carrying amounts for accounts receivable are net of applicable allowances for doubtful accounts,
which are estimated based on past experience, specific risks associated with the customer and other relevant
information. The maximum exposure to credit risk is the carrying amount of the financial assets.
The following tables set out the details of the aging for accounts receivable and allowance for doubtful accounts
as at August 31 as follows:
Trade
Current
One to three months past due
Over three months past due
Other
Less allowance for doubtful accounts
92 | Corus Entertainment Annual Report 2023
2023
2022
152,518
100,223
18,389
271,130
26,718
297,848
2,673
295,175
140,117
97,295
53,763
291,175
23,000
314,175
3,160
311,015
Balance, beginning of year
Reversal for doubtful accounts
Dispositions (note 26)
Recoveries
Balance, end of year
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
2023
3,160
(263)
(177)
(47)
2,673
2022
3,948
(652)
—
(136)
3,160
In fiscal 2023, the Company earned 8% of its revenue from Rogers Communications Inc. (2022 - 5%). This entity
is not a related party, but comprises 11% of the accounts receivable balance as at August 31, 2023 (2022 - 4%).
In fiscal 2023, the Company earned 5% of its revenue from Shaw Communications Inc. (2022 – 9%). This related
party comprises nil of the accounts receivable balance as at August 31, 2023 (2022 – 7%) (note 29).
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments
associated with financial obligations. The Company manages liquidity risk primarily by maintaining sufficient
unused capacity within its credit facilities, and by continuously monitoring forecast and actual cash flows. The
unused capacity as at August 31, 2023 was $285,900 (2022 – $300,000). Further information with respect to
the Company’s credit facilities is provided in note 13.
The following table sets out the undiscounted contractual obligations as at August 31, 2023:
Total debt (1)
Accounts payable and accrued
Total
Less than one year
One to three years
1,334,909
53,434
80,000
Beyond three years
1,201,475
liabilities
—
Other obligations (2)
17
(1) Principal and interest repayments on bank debt and Notes. Credit Facility amendments effective October 26, 2023 will increase principal
565,052
181,497
565,052
104,311
77,169
—
repayments on Term Facility within 1 year by $17.5 million, 2-3 years by $34.9 million and decrease 4-5 years by $52.4 million.
(2) Other obligations included financial liabilities, trade marks, other intangibles and U.S. dollar forward currency swaps.
In fiscal 2023, the Company incurred interest on bank loans, Notes and swaps on credit facilities of $75,240
(2022 – $58,481).
Market risk
Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market
prices, whether those changes are caused by factors specific to the individual instrument or its issuers or factors
affecting all instruments traded in the market.
The Company is exposed to foreign exchange risk through its international content distribution operations
and U.S. dollar denominated programming purchasing. The most significant foreign currency exposure is to
movements in the U.S. dollar to Canadian dollar exchange rate and the U.S. dollar to euro exchange rate. The
impact of foreign exchange on income before income taxes and non-controlling interest is detailed in the table
below:
Direct cost of sales, general and administrative expenses
Other expense (income), net (note 19)
2023
23
4,625
2022
100
9,821
9,921
An assumed 10% increase or decrease in exchange rates as at August 31, 2023 would have an impact of
approximately $19,900 (2022 – $26,500) on net income (loss) or OCI for the year. As a result of the Company’s
exposure to this risk, it has entered into a series of foreign exchange forward contracts, as described in note
13, to fix the foreign exchange rate and therefore cash flows related to a portion of the Company’s U.S. dollar
denominated liabilities.
4,648
Corus Entertainment Annual Report 2023 | 93
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The Company is exposed to interest rate risk on the bankers’ acceptances issued at floating rates under its bank
loan facility. An assumed 1% increase or decrease in short-term interest rates during the year ended August
31, 2023 would have had a significant impact on net loss for the year. As a result of the Company’s exposure to
this risk, it has entered into interest rate swap agreements, as described in note 13, to reduce its exposure to
changes in floating rates on bankers’ acceptances.
Other considerations
The Company does not engage in trading or other speculative activities with respect to derivative financial
instruments.
24. CONSOLIDATED STATEMENTS OF CASH FLOWS
Net change in non-cash working capital balances related to operations consists of the following:
Accounts receivable
Prepaid expenses and other
Accounts payable and accrued liabilities
Provisions
Income taxes payable (recoverable)
Other long-term liabilities
Other
2023
14,161
(361)
27,639
1,271
510
(46,956)
11,622
7,886
2022
23,575
3,959
(48,821)
1,338
(20,436)
(32,052)
(5,013)
(77,450)
Interest paid, interest received and income taxes paid and classified as operating activities are as follows:
Interest paid
Interest received
Income taxes paid
2023
77,837
3,921
13,952
2022
61,235
518
64,257
25. GOVERNMENT FINANCING AND ASSISTANCE
Revenue includes $2,056 (2022 – $2,672) of production financing obtained from government programs. This
financing provides a supplement to a production series’ Canadian license fees and is not repayable.
As well, revenue includes $1,227 (2022 – $1,308) of government grants relating to the marketing of books in
both Canada and international markets. The majority of the grants are repayable if the average profit margin for
the three-year period following receipt of the funds equals or is greater than 15%.
94 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
26. BUSINESS COMBINATIONS AND DIVESTITURES
Disposition of Toon Boom Animation Inc. (“Toon Boom”)
On August 23, 2023, the Company sold 100% of its interest in Toon Boom, a subsidiary of Nelvana Limited,
for $149.3 million, the fair value at the date of the sale. The operating results of Toon Boom are included in the
consolidated financial statements to the date of disposal.
Net gain on disposition
Consideration in cash (1)
Carrying amount of Toon Boom
Disposition related costs
Gain on disposal
Income taxes
Net gain on disposal
(1) Net cash proceeds $141.2 million
149,288
(985)
(6,015)
142,288
(5,809)
136,479
Acquisition of 51% interest in Aircraft Pictures Limited (“Aircraft”)
On February 1, 2022, the Company acquired a 51% interest in Aircraft for cash consideration of $2.2 million. The
purchase was accounted for using the purchase method. This business is included in the Television segment
effective February 1, 2022.
In connection with this business acquisition, the Company has established a liability for put options in respect
of non-controlling interests. The Company has provided put options to the selling shareholders under which
they could require the Company to acquire a further 29% of the non-controlling interests at, or after, a specified
date. As at August 31, 2022, the fair value of the puttable shares held by the non-controlling shareholders are
recorded as an other long-term liability in the amount of $1.8 million.
The Company has made an accounting policy choice to account for these put options as if exercised by the
holders of the non-controlling interest. In accordance with IFRS 10 – Consolidated Financial Statements, any
changes in the fair value of the put option, net of the 29% non-controlling interest is reflected as a reallocation
of equity interest at each period end.
27. COMMITMENTS, CONTINGENCIES AND GUARANTEES
The Company has the following commitments as at August 31, 2023 as detailed in the following table:
Total Within 1 year
4 - 5 years More than 5 years
Purchase obligations (1)
—
129,364
Lease liabilities
Other obligations (2)
—
Total contractual obligations
129,364
(1) Purchase obligations are contractual obligations under contracts relating to program rights, satellite costs and various other operating
918,655
280,015
181,497
1,380,167
292,910
61,986
77,169
432,065
619,197
32,694
104,311
756,202
6,548
55,971
17
62,536
2 - 3 years
expenditures that the Company has committed to, for periods ranging from 1 to 5 years.
(2) Other obligations included financial liabilities, trade marks, other intangibles, and forward foreign exchange contracts.
Generally, it is not the Company’s policy to issue guarantees to non-controlled affiliates or third parties, with
limited exceptions.
LITIGATION
The Company, its subsidiaries and joint ventures are involved in litigation matters arising out of the ordinary
course and conduct of its business. Although such matters cannot be predicted with certainty, management
does not consider the Company’s exposure to litigation to be material to these consolidated financial statements.
Corus Entertainment Annual Report 2023 | 95
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
OTHER MATTERS
Many of the Company’s agreements, specifically those related to acquisitions and dispositions of business
assets, include indemnification provisions where the Company may be required to make payments to a vendor
or purchaser for breach of fundamental representation and warranty terms in the agreements with respect
to matters such as corporate status, title of assets, environmental issues, consents to transfer, employment
matters, litigation, taxes payable and other potential material liabilities. The maximum potential amount of
future payments that the Company could be required to make under these indemnification provisions is not
reasonably quantifiable, as certain indemnifications are not subject to a monetary limitation. As at August 31,
2023, management believed there was only a remote possibility that the indemnification provisions would
require any material cash payment.
The Company indemnifies its directors and officers against any and all claims or losses reasonably incurred in
the performance of their service to the Company to the extent permitted by law. The Company has acquired
and maintains liability insurance for directors and officers of the Company and its subsidiaries.
28. EMPLOYEE BENEFIT PLANS
DEFINED CONTRIBUTION PENSION PLANS
The Company has various defined contribution plans for qualifying full-time employees. Under these plans, the
Company contributes up to 6% (2022 – 6%) of an employee’s earnings, not exceeding the limits set by the Income
Tax Act (Canada). The amount contributed in fiscal 2023 related to the defined contribution plans was $9,284
(2022 – $9,237). The amount contributed is approximately the same as the expense included in the consolidated
statements of loss and comprehensive loss.
NON-REGISTERED DEFINED BENEFIT PENSION PLANS
The Company provides supplemental executive retirement plans (“SERP”), which are non-contributory,
unfunded defined benefit pension plans for certain of its senior executives that are included in long-term
employee obligations (note 14). Benefits under these plans are generally based on the employee’s length of
service and their highest three-year average rate of pay during their most recent 10 years of service, accrued
starting from the date of the implementation of the plan, and currently includes a benefit for past service for
certain senior executives, as applicable under the terms of the plan.
The table below shows the change in the benefit obligation for these plans.
Accrued benefit obligation and plan deficit, beginning of year
Current service costs
Past service cost
Interest cost
Payment of benefits
Remeasurements:
Effect of changes in financial assumptions
Effect of experience adjustments
Accrued benefit obligation and liability, end of year
2023
15,325
935
1,044
823
(326)
(891)
(372)
16,538
2022
17,611
955
—
553
(326)
(4,087)
619
15,325
The weighted average duration of the defined benefit obligation of the SERP as at August 31, 2023 is 14.3 years.
The tables below show the significant weighted-average assumptions used to measure the pension obligation
and costs for this plan.
96 | Corus Entertainment Annual Report 2023
Accrued benefit obligation
Discount rate
Rate of compensation increase
Benefit cost for the year
Discount rate
Rate of compensation increase
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
2023
(%)
5.20
2.00
2023
(%)
4.80
2.00
2022
(%)
4.80
2.00
2022
(%)
3.00
2.00
The following table illustrates the incremental impact on the defined benefit obligation as at August 31, 2023
and the pension expense for the fiscal year then ended, with respect to the three key factors in determining
the benefit obligation:
Sensitivity analysis
Discount rate – 1% decrease
Salary increase – 1% increase
Mortality – one-year increase in the expected future lifetime
Benefit obligation
at August 31, 2023
2,361
424
Pension expense
for fiscal 2023
183
141
333
154
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the
present value of the defined benefit obligation has been calculated using the projected benefit method, which
is the same method that is applied in calculating the defined benefit liability recognized in the consolidated
statements of financial position. The sensitivity analysis presented above may not be representative of the
actual change in the accrued benefit obligation as it is unlikely that the change in assumptions would occur in
isolation of one another as some assumptions may be correlated.
The net pension benefit plan expense, which is included in employee costs, is comprised of the following
components:
Current service cost
Past service cost
Interest cost
Pension expense
2023
935
1,044
823
2,802
2022
955
—
553
1,508
REGISTERED PENSION PLANS
The Company has a number of funded defined benefit pension plans that provide pension benefits to certain
unionized and non-unionized employees in its conventional television operations. Benefits under these plans
are based on the employee’s length of service and final average salary. These plans are regulated by the Office
of the Superintendent of Financial Institutions, Canada in accordance with the provisions of the Pension Benefits
Standards Act and regulations. The regulations set out minimum standards for funding the plans.
The following table shows the change in the benefit obligations, change in fair value of plan assets and the funded
status of these defined benefit plans:
Corus Entertainment Annual Report 2023 | 97
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
Accrued benefit obligation, beginning of year
Current service cost
Interest cost
Employee contributions
Payment of benefits
Effect of changes in financial assumptions
Effect of experience adjustments
Accrued benefit obligation, end of year
Fair value of plan assets, beginning of year
Employer contributions
Employee contributions
Interest income
Payment of benefits
Administrative expenses paid from plan assets
Return on plan assets, excluding interest income
Fair value of plan assets, end of year
Effect of asset ceiling limit
Fair value of plan assets, end of year, net of asset ceiling limit
Accrued benefit asset and plan surplus, end of year
2023
189,687
3,834
9,107
643
(10,992)
(9,438)
(1,834)
181,007
220,340
—
643
10,352
(10,992)
(866)
743
220,220
(3,103)
217,117
36,110
The weighted average duration of the defined benefit obligation as at August 31, 2023 is 13.9 years.
The plan assets as at August 31, are comprised of investments in pooled funds as follows:
Equity – Canadian
Equity – Foreign
Fixed income – Canadian
2023
23,265
82,955
114,000
220,220
2022
238,655
5,841
7,364
750
(9,262)
(53,231)
(430)
189,687
270,396
2,908
750
8,163
(9,262)
(871)
(51,744)
220,340
(1,768)
218,572
28,885
2022
25,870
81,568
112,902
220,340
The underlying securities in the pooled funds have quoted prices in an active market.
The significant weighted average assumptions used to measure the pension obligation and cost for these
plans are as follows:
2023
(%)
5.20
2.00
(%)
4.80
2.00
2022
(%)
4.80
2.00
(%)
3.10
2.00
Accrued benefit obligation
Discount rate
Rate of compensation increase
Benefit cost for the year
Discount rate
Rate of compensation increase
98 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The following table illustrates the incremental impact on the defined benefit obligation at August 31, 2023 and
the pension expense for the fiscal year then ended, with respect to the three key factors in determining the
benefit obligation:
Sensitivity analysis
Discount rate – 1% decrease
Salary – 1% increase
Weighted average duration of defined benefit obligation in years
Effective discount rate 1% decrease
Benefit obligation
at August 31, 2023
25,168
4,166
Fiscal 2023
benefit cost
2,404
545
13.9
n/a
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the
present value of the defined benefit obligation has been calculated using the projected benefit method, which
is the same method that is applied in calculating the defined benefit liability recognized in the consolidated
statements of financial position. The sensitivity analysis presented above may not be representative of the
actual change in the accrued benefit obligation as it is unlikely that the change in assumptions would occur in
isolation of one another as some assumptions may be correlated.
The net pension benefit plan expense, which is included in employee costs, is comprised of the following
components:
Current service cost
Pension expense
2023
4,700
4,700
2022
6,712
6,712
OTHER BENEFIT PLANS
The Company provides supplemental post-retirement non-pension benefit plans that provide post-retirement
health and life insurance coverage to certain employees and are funded on a pay-as-you-go basis. The table
below shows the change in the accrued post-retirement obligation, which is recognized in the consolidated
statements of financial position.
The change in the benefit obligation for these plans is as follows:
Accrued benefit obligation and plan deficit, beginning of year
Current service costs
Interest cost
Payment of benefits
Remeasurements:
Effect of demographic assumptions
Effect of changes in financial assumptions
Effect of experience adjustments
Accrued benefit obligation and liability, end of year
2023
12,708
222
571
(506)
(265)
(698)
384
12,416
2022
13,960
151
392
(538)
259
(3,534)
2,018
12,708
The weighted average duration of the defined benefit obligation of the post-retirement plans as at August 31,
2023 is 13.9 years.
Corus Entertainment Annual Report 2023 | 99
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
The significant weighted-average assumptions used to measure the obligation and costs for this plan are as
follows:
Accrued benefit obligation
Discount rate
Salary increase
Benefit cost for the year
Discount rate
Salary increase
2023
(%)
5.20
2.00
2023
(%)
4.80
2.00
2022
(%)
4.80
2.00
2022
(%)
2.98
2.00
The following table illustrates the incremental impact on the benefit obligation as at August 31, 2023 and the
expense for the fiscal year then ended, with respect to the two key factors in determining the benefit obligation:
Service and
interest costs
fiscal 2023
22
205
Sensitivity analysis
Discount rate – 1% decrease
Trend rate – 1% increase
Benefit
obligation at
August 31, 2023
1,877
2,689
When calculating the sensitivity of the benefit obligation to significant actuarial assumptions, the present value
of the benefit obligation has been calculated using the projected benefit method, which is the same method
that is applied in calculating the benefit liability recognized in the consolidated statements of financial position.
The sensitivity analysis presented above may not be representative of the actual change in the accrued benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some
assumptions may be correlated.
The net benefit plan expense, which is included in employee costs, is comprised of the following components:
2022
2023
Current service cost
Interest cost
Pension expense
222
571
793
151
392
543
29. TRANSACTIONS WITH RELATED PARTIES
CONTROLLING SHAREHOLDER
A majority of the outstanding Class A Voting Shares of the Company are held by entities owned by the Shaw
Family Living Trust (“SFLT”) and its subsidiaries. As at August 31, 2023, SFLT and its subsidiaries hold 2,885,530
Class A Voting Shares, representing approximately 86% of the outstanding Class A Voting Shares, for the
benefit of the descendants of the late JR Shaw and Carol Shaw. The sole trustee of SFLT is a private company
controlled by a board comprised of seven directors, including as at August 31, 2023, Heather Shaw, Julie Shaw,
three other members of their family and two independent directors. The Class A Voting Shares are the only
shares entitled to vote in all shareholder matters, except in limited circumstances as described in the Company’s
Annual Information Form. Accordingly, SFLT is, and as long as it holds a majority of the Class A Voting Shares,
will continue to be able to elect a majority of the Board of Corus and to control the vote on matters submitted
to a vote of Corus’ Class A shareholders.
SFLT was the controlling shareholder of Shaw Communications Inc. (“Shaw”), and as a result, Shaw and Corus
were subject to common voting control until Shaw was purchased by Rogers Communications Inc. (“Rogers”)
on April 3, 2023. Rogers is not a related party for accounting purposes.
100 | Corus Entertainment Annual Report 2023
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
NORMAL COURSE TRANSACTIONS
The Company has transacted business in the normal course with Shaw and with entities over which the Company
exercises significant influence and joint control. These transactions are measured at the exchange amount,
which is the amount of consideration established and agreed to by the parties and having normal trade terms.
Revenue
Advertising
Subscriber
Distribution, production and other
Expenses
Cable and satellite system distribution access fees
Administrative and other fees
Advertising
Accounts receivable from Shaw
Accounts payable to Shaw
Note: Fiscal 2023 data is for the period September 1, 2022 through April 3, 2023.
SIGNIFICANT SUBSIDIARIES
The following table includes the significant subsidiaries of the Company:
Name
Corus Television Limited Partnership
Corus Media Holdings Inc.
Corus Radio Inc.
Corus Sales Inc.
9329994 Canada Inc.
Food Network Canada Inc.
HGTV Canada Inc.
History Television Inc.
NGC Channel Inc.
Nelvana Limited
Showcase Television Inc.
TELETOON Canada Inc.
W Network Inc.
YTV Canada, Inc.
Jurisdiction
Manitoba
Alberta
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Ontario
Canada
Canada
Canada
Canada
2023
2022
16,807
59,724
2,165
4,960
1,024
2,152
—
—
2023
(%)
100
100
100
100
100
71
67
100
50
100
100
100
100
100
28,772
107,171
3,673
8,510
1,762
4,009
20,793
2,292
Equity interest
2022
(%)
100
100
100
100
100
71
67
100
50
100
100
100
100
100
Corus Entertainment Annual Report 2023 | 101
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except per share information)
KEY MANAGEMENT PERSONNEL
Key management personnel consists of the Board and the Executive Leadership Team (“ELT”), who have
the authority and responsibility for planning, directing and controlling the activities of the Company. All
members of the ELT are also officers of the Company.
Salaries and benefits
Post-employment benefits
Share-based compensation expense (recovery) (note 15)
2023
7,033
2,802
(6,667)
3,168
2022
8,736
1,508
(4,130)
6,114
Except for the President and Chief Executive Officer, the Executive Vice President and Chief Financial Officer
and the Executive Vice President and General Counsel, no member of the ELT has an employment agreement
or any other contractual arrangement in place with the Company in connection with any termination or change
of control event, other than the conditions provided in the compensation plans of the Company. Generally,
severance entitlements, including short-term incentives payable to the ELT and officers of the Company, other
than the President and Chief Executive Officer, the Executive Vice President and Chief Financial Officer and the
Executive Vice President and General Counsel, under their employment agreements with the Company, would
be determined in accordance with applicable common law requirements. Long-term incentive plans, such as
stock options, are exercisable if vested, while DSUs, PSUs, RSUs and SERP would be payable if vested pursuant
to the terms of the plans.
102 | Corus Entertainment Annual Report 2023
CORUS ENTERTAINMENT INC.
Sustainability
Corus Entertainment has
broadened the scope of its
sustainability efforts with an
expanded environmental, social
and governance (ESG) program.
Further information about the
Company’s ESG program and
goals, related activities, and the
Sustainability Report are available
in the Sustainability section of
Corus Entertainment’s website
(www.corusent.com). To receive a
copy of the Sustainability Report,
please email your request to
sustainability@corusent.com.
Corporate Governance
The Board of Directors of the
Company endorses the principles
that sound corporate governance
practices are important to the
proper functioning
of the Company and the
enhancement of the interests
of its shareholders. For further
information, please visit the
Investor Relations - Corporate
Governance section of Corus
Entertainment’s website (www.
corusent.com).
Further Information
Financial analysts, portfolio
managers, other investors
and interested parties may
contact Corus Entertainment
at 416.479.7000 or visit the
Company’s website
(www.corusent.com).
Corus Entertainment’s Annual
Reports, Annual Information Forms,
Management Information Circulars,
quarterly financial reports, press
releases, investor presentations
and other relevant materials are
available in the Investor Relations
section of Corus Entertainment’s
website (www.corusent.com).
To receive additional copies of
Corus Entertainment’s Annual
Report, please email your request to
investor.relations@corusent.com.
Copyright and Sources
© Corus® Entertainment Inc.
All rights reserved.
Trademarks appearing in this
Annual Report are Trademarks of
Corus® Entertainment Inc., or a
subsidiary thereof which might be
used under license.
For specific copyright information
on any images used in this
Annual Report, or specific source
information for any media research
used in this Annual Report, please
contact the Director, Corporate
Communications at 416.479.7000.
Stock Exchange Listing and
Trading Symbol
Toronto Stock Exchange
TSX:CJR.B
Registered Office
1500, 850-2nd Street SW
Calgary, Alberta T2P 0R5
Executive Office
Corus Quay
25 Dockside Drive
Toronto, Ontario MSA 085
Telephone: 416.479.7000
Facsimile: 416.479.7007
Website
www.corusent.com
Auditors
Ernst & Young LLP
Shareholder Services
For assistance with the following:
• Change of address or account
updates
• Transfer or replace share
certificates
• Dividend payments or direct
deposit of dividends
• Dividend Reinvestment Plan
• Enrol in e-delivery to receive
corporate documents
electronically
please contact our Transfer Agent
and Registrar:
TSX Trust Company
301,100 Adelaide Street West
Toronto, Ontario, M5H 4H1
Telephone:
North America: 1.800.387.0825
International: 1.416.682.3860
Email Inquiries:
shareholderinquiries@tmx.com
Website: www.tsxtrust.com
Corus Entertainment Annual Report 2023 | 103