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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| TVA Group Inc | TSX:TVA.B | Toronto | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.05 | 4.39% | 1.19 | 1.20 | 1.29 | 1.19 | 1.13 | 1.15 | 4,300 | 20:07:06 |
From Jul 2019 to Jul 2024
MONTREAL, CANADA announces that the Company reported net income of $15.6 million, or $0.58 per share, for the fourth quarter of 2007, compared with a net loss of $13.0 million, or $0.48 per share, for the corresponding quarter of 2006.
Hot Features
Premium
Operating highlights for the fourth quarter:
- Growth in operating income in the Television sector of $569,000, or 3.0%,
compared with the corresponding quarter of 2006, mainly due to the
following:
- decrease of 3.8% in TVA Network's operating income, against the
results for the same quarter of 2006;
- Significant increase in the operating income of the Shopping TVA home
shopping division; and
- decrease of 40.6% in the operating loss of SUN TV.
- The Publishing sector saw another significant jump in its operating
income over the corresponding quarter of last year, with an increase from
$305,000 in 2006 to $1,594,000 in 2007.
- For the third consecutive quarter, the Distribution sector significantly
improved its profitability, generating operating income of $1,502,000,
against an operating loss of $502,000 for the corresponding quarter of
2006.
As a result, the Company's consolidated operating income was $22.8 million, against operating income of $18.9 million for the same quarter of 2006, representing growth of 20.9%.
"We are pleased with the progress made for all our business segments over the last fiscal year and in the last quarter. However, the situation in the conventional television market continues to be of great concern, as reflected by the 2.6% decline in our advertising revenues from this market within the TVA Group for the fourth quarter of 2007, in spite of the fact that TVA Network has 25 of the 30 best-watched programs and is still No. 1, seven days a week. The increase in our operating income from the Television sector for the last quarter comes essentially from operations other than those of the TVA Network. To support the growth of our specialty channels, we are pleased to announce the launch of a new specialty channel, Les Idees de ma maison, slated for February 19, 2008. The new channel's four main themes are renovation and do-it-yourself, cooking, design and decor, and lifestyle," said Mr. Pierre Dion, President and Chief Executive Officer of TVA Group Inc.
"In the Publishing sector, in spite of a context that required an aggressive pricing strategy to counter the competition, the stringent management of our operating costs allowed us to generate a profit margin of 8.0%, compared with 1.5% for the same quarter of 2006, while continuing to protect our market shares. Finally, in the Distribution sector, the successful exploitation of video products and the higher volume of rights sold in the television market largely explain the improvement in this business segment's operating results for the fourth quarter," concluded Mr. Pierre Dion.
Cash flows from operating activities were $21.0 million for the fourth quarter, against $8.2 million for the corresponding year-ago period. This increase is essentially due to the net change in non-cash working capital items, mainly in accounts payable and current income taxes.
Significant growth in fiscal 2007
For the year ended December 31, 2007, the Company's consolidated operating income was $59.4 million, compared with $42.1 million for the previous fiscal year, reflecting growth of 41.2%. For the same period, the Company generated net income of $38.4 million, or $1.42 per share, compared with a net loss of $3.1 million, or $0.12 per share, for 2006.
TVA Group's Board of Directors today declared a dividend of $0.05 per share, payable on March 19, 2008 to Class A and B shareholders of record as at March 4, 2008. This dividend is designated to be an eligible dividend, as provided under subsection 89(14) of the Income Tax Act and its provincial counterpart.
TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company involved in television, the production and distribution of audiovisual products, and in magazine publishing. TVA Group is one of the largest private sector producers and the largest private sector broadcaster of French-language entertainment, information and public affairs programming, and magazine publishing in North America. TVA also operates SUN TV, a general-interest station in Toronto. The Company's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.
The unaudited consolidated financial statements with notes and the annual Management's Discussion and Analysis can be consulted on TVA's Web site at: www.tva.canoe.ca.
Definition of operating income
In its analysis of operating results, the Company defines operating income or operating loss as earnings (loss) before amortization, financial expenses, restructuring costs of operations, impairment of intangible assets, gain on acquisition and disposal of business, (recovery) income taxes, non-controlling interest and equity in income of companies subject to significant influence. Operating income or operating loss, as defined above, is not a measure of results that is consistent with Canadian Generally Accepted Accounting Principles ("GAAP"). Neither is it intended to be regarded as an alternative to other financial performance measures or to the statement of cash flows as a measure of liquidity. This measure is not intended to represent funds available for debt service, dividend payment, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for other performance measures prepared in accordance with Canadian GAAP. Operating income is used by the Company because management believes it is a meaningful measurement of performance.
This measure is commonly used by senior management and the Board of Directors to evaluate the consolidated results of the Company and its sector's results. Measurements such as operating income are also commonly used by the investment community to analyze and compare the performance of companies in the industries in which we are engaged. The Company's definition of operating income may not be identical to similarly titled measures reported by other companies.
Forward-looking information disclaimer
The statements in this news release that are not historical facts are forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Company's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements generally can be identified by the use of the conditional, the use of forward-looking terminology such as "propose," "will," "expect," "may," "anticipate," "intend," "estimate," "plan," "foresee," "believe" or the negative of these terms or variations of them or similar terminology. Certain factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors), capital investment risks, environmental risks, credit risks, government regulation risks, governmental assistance risks and general changes in the economic environment. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the Company's public filings available at www.sedar.com and www.tva.canoe.ca including, in particular, the "Risks and Uncertainties" section of the Company's Management's Discussion and Analysis for the year ended December 31, 2007.
The forward-looking statements in this news release reflect the Company's expectations as of February 18, 2008, and are subject to change after this date. The Company expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.
TVA GROUP INC.
Consolidated statements of income
(unaudited)
(in thousands of dollars, except per share amounts)
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Three-month periods Years
ended December 31 ended December 31
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2007 2006 2007 2006
--------------------------------------------------------------------------
Operating revenues $124,073 $119,937 $415,486 $393,312
Operating, selling and
administrative expenses 101,279 101,078 356,105 351,256
Amortization of fixed
assets, intangible assets
and start-up costs 3,305 3,419 12,942 13,905
Financial expenses 1,063 1,359 4,477 5,308
Depreciation of intangible
assets (note 5) - 31,084 - 31,828
Restructuring costs of
operations (note 4) (357) (647) 1,382 507
Gain on business
acquisition (note 7) - (368) - (368)
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Income (loss) before
income taxes,
non-controlling
interest and equity
in income of companies
subject to significant
influence $18,783 $(15,988) $40,580 $(9,124)
Income taxes
(recovery) (note 6) 3,722 (2,792) 5,714 (2,591)
Non-controlling interest (474) (631) (2,651) (3,252)
Equity in (income) loss of
companies subject to
significant influence (71) 429 (867) (141)
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NET INCOME (NET LOSS) AND
COMPREHENSIVE INCOME $15 606 $(12,994) $38,384 $(3,140)
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EARNINGS (LOSS) PER SHARE
Basic and diluted
(note 10 c) $0.58 $(0.48) $1.42 $(0.12)
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See accompanying notes to consolidated financial statements
Consolidated statements of retained earnings
(unaudited)
(in thousands of dollars)
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Years
ended December 31
--------------------------------------------------------------------------
2007 2006
--------------------------------------------------------------------------
Balance, at beginning of period $62,631 $71,280
Net income (net loss) 38,384 (3,140)
Dividends paid (5,405) (5,405)
Share redemption - excess of
purchase price over net
carrying value (note 10 b) - (104)
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Balance, at end of period $95,610 $62,631
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See accompanying notes to consolidated financial statements
TVA GROUP INC.
Consolidated balance sheets
(in thousands of dollars)
--------------------------------------------------------------------------
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Dec. 31, 2007 Dec. 31, 2006
(unaudited) (audited)
--------------------------------------------------------------------------
ASSETS
Current assets
Cash $3,225 $2,956
Accounts receivable 107,854 103,637
Current income tax assets 946 8,992
Investments in televisual products and films 45,906 42,221
Inventories and prepaid expenses 5,969 6,259
Future income tax assets 4,629 4,267
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168,529 168,332
Investments in televisual products and films 27,253 27,186
Investments (note 8) 31,571 55,227
Fixed assets 77,275 74,038
Future income tax assets 2,319 3,448
Other assets 9,102 8,213
Licences and others intangible assets 69,732 69,589
Goodwill 71,981 71,868
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$457,762 $477,901
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft $2,435 $-
Accounts payable and accrued liabilities 85,812 76,589
Current income tax liabilities (note 6) 11,037 6,051
Broadcast and distribution rights payable 23,054 22,867
Deferred revenue 6,613 7,022
Deferred credit 471 864
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129,422 113,393
Broadcast rights payable 3,965 3,226
Long-term debt 56,333 96,515
Future income tax liabilities (note 6) 39,334 44,331
Others long term liabilities 731 610
Non-controlling interest and redeemable
preferred shares (note 8,9) 13,458 38,334
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243,243 296,409
SHAREHOLDERS' EQUITY
Capital stock (note 10) 115,137 115,137
Contributed surplus 3,772 3,724
Retained earnings 95,610 62,631
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214,519 181,492
Contingency (note 14)
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$457,762 $477,901
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See accompanying notes to consolidated financial statements
TVA GROUP INC.
Consolidated statements of cash flows
(unaudited)
(in thousands of dollars)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Three-month periods Years
ended December 31 ended December 31
--------------------------------------------------------------------------
2007 2006 2007 2006
--------------------------------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (net loss) $15,606 $(12,994) $38,384 $(3,140)
Non-cash items
Amortization 3,327 3,442 13,030 13,993
Equity in income of companies
subject to significant influence (71) 429 (867) (141)
Non-controlling interest (474) (631) (2,651) (3,252)
Tax benefits relating to tax
deductions (note 6) - - (3,670) -
Future income taxes (3,348) (3,892) (4,680) (5,853)
Impairment of an intangible
asset (note 5) - 31,084 - 31,828
Others (981) (3,546) (1,448) (3,444)
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Cash flows provided by current
operations 14,059 13,892 38,098 29,991
Net change in non-cash items 6,938 (5,708) 21,946 2,342
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Cash flows from operating
activities 20,997 8,184 60,044 32,333
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CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to fixed assets (6,465) (3,627) (16,200) (9,028)
Business acquisition (note 7) - 818 (2,899) 818
Proceeds from disposal
of a business - - - 91
Deferred charges - (1) - (287)
Decrease in investments (note 8) 24,475 2,925 24,701 3,474
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Cash flows from investing
activities 18,010 115 5,602 (4,932)
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CASH FLOWS FROM FINANCING
ACTIVITIES
Bank overdraft 420 (11,177) 2,435 (12,284)
(Decrease) increase in
long-term debt (14,166) 4,064 (40,182) (10,583)
Redemption of redeemable
preferred shares (note 8) (24,625) (2,925) (24,625) (2,925)
Issuance of shares of a
subsidiary (note 9) 350 291 2,400 5,149
Class B share redemption
(note10 b) - - - (154)
Dividends paid (1,351) (1,351) (5,405) (5,405)
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Cash flows from financing
activities (39,372) (11,098) (65,377) (26,202)
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Net change in cash (365) (2,799) 269 1,199
Cash, at beginning 3,590 5,755 2,956 1,757
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Cash, at end $3,225 $2,956 $3,225 $2,956
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SUPPLEMENTAL INFORMATION
Interest paid 923 1,417 4,054 5,204
Income taxes paid (received) 482 (315) (2,673) 4,007
Additions to fixed assets
financed by accounts
payable and accrued
liabilities at end of
period 1,453 1,953
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See accompanying notes to consolidated financial statements
TVA GROUP INC.
Notes to consolidated financial statements
Three-month periods and Years ended December 31, 2007 and 2006 (unaudited)
(Amounts presented in the tables are expressed in thousands of dollars, except per-share and per-option amounts)
1. FINANCIAL STATEMENT PRESENTATION
These consolidated financial statements have been prepared in conformity with Canadian Generally Accepted Accounting Principles ("GAAP"). With the exception of the accounting policies presented in Note 2 for the current quarter, the same accounting policies described in the consolidated financial statements included in the latest annual report of TVA Group Inc. ("the Company") have been used. However, these consolidated financial statements do not include all disclosures required under Canadian GAAP for an annual report and accordingly should be read in conjunction with the Company's latest annual consolidated financial statements and the notes thereto.
Some of the Company's businesses experience significant seasonality effects due to, among other things, seasonal advertising patterns and their influence on people's viewing, reading and listening habits. Because the Company depends on the sale of advertising for a significant portion of its revenue, operating results are also sensitive to prevailing economic conditions, including changes in local, regional and national economic conditions, particularly as they may affect advertising expenditures. Accordingly, the results of operations for interim periods should not necessarily be considered indicative of full-year results due to the seasonality of certain operations.
2. CHANGES IN ACCOUNTING POLICIES
Effective January 1, 2007, the Company adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 1530, Comprehensive Income and Section 3855, Financial Instruments -- Recognition and Measurement.
Changes in accounting policies in conformity with these new accounting standards are as follows:
a) Comprehensive Income
Section 1530 introduces comprehensive income, which is calculated by adding other comprehensive income to net income. Other comprehensive income represents changes in shareholders' equity arising from transactions and other events with non-owner sources such as unrealized gains and losses on financial assets classified as available-for-sale.
b) Financial Instruments
Section 3855 establishes standards for recognizing and measuring financial assets, financial liabilities and derivatives. Under these standards, financial instruments are now classified as held-for-trading, available-for-sale, held-to-maturity, receivables, or other financial liabilities and measurement in subsequent periods depends on their classification. Transaction costs are expensed as incurred for financial instruments classified as held-for- trading. For other financial instruments, transaction costs are capitalized on initial recognition and presented in reduction of the underlying financial instruments.
Financial assets and financial liabilities held-for-trading are measured at fair value with changes recognized in income. Available-for-sale financial assets are measured at fair value or at cost, in the case of financial assets that do not have a quoted market price in an active market and changes in fair value are recorded in comprehensive income. Financial assets held-to-maturity, receivables, and other financial liabilities are measured at amortized cost using the effective interest method of amortization. The Company has classified its cash and cash equivalent as held for trading. Trade receivables and receivables from related parties were classified as receivables. Portfolio investments include in the investments were classified as available-for-sales. All of the Company's financial liabilities were classified as other liabilities.
Derivative instruments are recorded as financial assets or liabilities at fair value, including those derivatives that are embedded in financial or non-financial contracts that are not closely related to the host contracts. Changes in the fair values of the derivatives are recognized in financial expenses with the exception of derivatives designated in a cash flow hedge for which hedge accounting is used. In accordance with the new standards, the Company selected January 1, 2003 as its transition date for embedded derivatives.
The adoption of these new sections did not have an significant effect on the consolidated financial statements.
3. GOODWILL AND LICENCES
During the second quarter of 2007, the Company changed the date of its annual impairment tests for its broadcasting licences and goodwill from October 1 to April 1. Accordingly, the Company performed its impairment tests for goodwill and broadcasting licences on April 1 and concluded that there was no impairment to be recorded.
4. RESTRUCTURING COSTS OF OPERATIONS
During the quarter, the Company recorded a provision for restructuring costs of $303,000 following the elimination of positions in its Television sector and revalued a provision, leading to a reduction of the initial balance, for an amount of $660,000, following the settlement of certain matters and based on new information available to the Company.
Since the beginning of the fiscal year, the Company recorded a provision for restructuring cost of $1,382,000, including a provision of $1,281,000 relating to the elimination of positions in the Television and Publishing sectors and a provision of $952,000 for new litigation relating to the production activities of its former subsidiary, TVA Acquisition Inc. The Company reduced liabilities initially recorded on certain productions of this former subsidiary for an amount of $851,000.
During the fourth quarter of 2006, the Company recorded a provision for a restructuring cost of $250,000 following the announcement of the elimination of some ten positions in its Television sector and and it reversed a portion of the provision for restructuring costs relating to the production activities of its former subsidiary, TVA Acquisition Inc., for an amount of $897,000, following the settlement of certain matters and based on new information available to the Company.
5. DEPRECIATION OF INTANGIBLE ASSETS
During the fourth quarter of 2006, in accordance with the provisions of Section 3062 of the CICA handbook, Goodwill and Others Intangible Assets, the Company performed the annual test for impairment of its broadcast licences and goodwill. Based on the results of these tests, the Company recorded a total depreciation expense of $31,084,000, of which $23,119,000 was for SUN TV's broadcast licence and $7,965,000 of goodwill. This depreciation became necessary following the review of SUN TV business plan in light of the market experience over the last two years and due to pressure being exerted on the advertising revenues of conventional broadcasters, including, the fragmentation of the television market.
During the third quarter of 2006, the Company recorded its share in the depreciation of an intangible asset, consisting in a magazine operating licence owned in a joint venture amounting to $744,000.
6. INCOME TAXES (RECOVERY)
During the fourth quarter of 2007, the Company recorded a reduction in income taxes of $2,592,000 following the announcement of a federal tax reduction brought into force by Bill C-28 on December 14, 2007. Since the beginning of the year, the decrease in future income tax expenses resulting from the federal tax reduction represents an amount of $2,970,000.
During the second quarter of 2007, following the federal government's adoption of Bill C-33, which provides for the modification of the deduction multiple for tax deductions, the Company recognized into income tax benefits an amount of $3,670,000 that had been recorded as a current income tax liability pending the official enactment of the Bill by taxation authorities.
During the fourth quarter of 2006, the Company obtained from Quebecor World Inc., a company under common control of its ultimate parent, Quebecor Inc., tax deductions representing income taxes of approximately $4,452,000. The total amount had been recorded as a current income tax asset. Tax benefits amounting to $1,113,000 relating to the transaction had been recorded as current income tax liabilities as at December 31, 2006, pending the official enactment of the Bill by taxation authorities. In addition, the transaction allowed the Company to realize a gain of $293,000 in 2006, which was recorded as a contributed surplus. As at December 31, 2007, an amount of $626,000 ($3,046,000 in 2006) payable to Quebecor World Inc. is included in section "Account payables and accrued liabilities".
7. ACQUISITION OF BUSINESS
Animal Hebdo inc.
On July 30, 2007, the Company acquired all of the issued and outstanding shares in Animal Hebdo inc., the company that publishes Animal magazine, for a total consideration of $274,000. The purchase price allocation is completed and effective July 30, 2007, the new magazine's operating income has been included in the Company's consolidated statement of income.
SUN TV
On January 8, 2007, the Company made the final payment of the purchase price for the conventional television station in Toronto, SUN TV, including a working capital adjustment of $2,625,000.
On December 8, 2006, the Company (75%) and Sun Media Corporation (25%), a company under common control of its ultimate parent, Quebecor Inc., reached an agreement with CHUM Limited in respect of the final settlement of the working capital that was part of the purchase price for SUN TV Company. Pursuant to this settlement, the Company recorded its share in the favourable adjustment of working capital of $81,000. The final purchase price for the Company's interest in SUN TV Company is $35,012,000, which represents the $34,500,000 initial purchase price agreed plus a working capital adjustment of $37,000 and transaction fees of $475,000.
Trustmedia inc.
On November 10, 2006, the Company acquired the totality of the shares in Trustmedia Inc., 50% of which was held by a co-owning shareholder, making it the sole shareholder in this company. Following this transaction, the Company posted a gain of $368,000, given that the purchase price was lower than the fair value of the nets assets acquired. The net consideration resulting from this transaction represents a cash inflow of $818,000. No taxes were recorded on this gain since the result is a permanent difference.
8. INVESTMENT
Convertible bonds with related party company
On December 20, 2007, a subsidiary of the Company, Sun TV Company, owned at 75% and operating the television channel SUN TV, entered into a fiscal consolidation reduction transaction created July 12, 2005 with the Company and its non-controlling shareholder Sun Media Corporation, a company under common control of its ultimate parent, Quebecor Inc. To realize this transaction, Sun TV Company received a partial repayment of the convertible bonds of the shareholding companies in the amount of $98,600,000 ($11,700,000 in 2006), of which Sun Media Corporation for $24,625,000 ($2,925,000 in 2006). In return, Sun TV Company repurchased 98,600 (11,700 in 2006) preferred shares redeemable at the option of the holder, carrying a 10.85% fixed cumulative dividend, of which 24,625 (2,925 in 2006) preferred shares from Sun Media Corporation for an amount of $24,625,000 ($2,925,000 in 2006). This transaction results for the Company, on a consolidated level, in a reduced long-term investment in convertible bonds of $24,625,000 ($2,925,000 in 2006), and an equivalent reduction in redeemable preferred shares disclosed under the heading "Non-controlling interest and redeemable preferred shares
9. NON-CONTROLLING INTEREST
On December 19, 2007, a subsidiary of the Company, Sun TV Company, in which the Company has a 75% interest and that operates the SUN TV television station, obtained from its non-controlling shareholder an investment in its capital stock of $350,000 ($291,000 in 2006), bringing the investments obtained since the beginning of 2007 to $2,400,000 ($5,149,000 in 2006). The respective percentage interests in SUN TV Company remain unchanged.
10.CAPITAL STOCK
a) Number of shares outstanding
----------------------------------------------------------------
----------------------------------------------------------------
Dec. 31, 2007 Dec. 31, 2006
----------------------------------------------------------------
Class A common shares 4,320,000 4,320,000
Class B shares 22,704,848 22,704,848
----------------------------------------------------------------
27,024,848 27,024,848
----------------------------------------------------------------
----------------------------------------------------------------
b) Share redemption
During the year ended December 31, 2006, pursuant to its normal course issuer bid programs, the Company redeemed for cancellation a total of 9,800 non-voting Class B shares for a net cash consideration of $154,000. As at December 31, 2006, all the shares redeemed were cancelled.
During fiscal 2006, the Company filed a notice of intent to redeem for cancellation between August 4, 2006 and August 3, 2007, in the normal course of its activities, a maximum of 1,135,242 outstanding Class B shares not held by insiders at the beginning of issuers bid. The Company redeemed its shares at the market price plus brokerage fees. No shares have been redeem under this new offer.
c) Earnings (loss) per share
The following table provides the calculation of basic and diluted earnings (loss) per share:
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Three-month periods Years ended
ended December 31 December 31
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2007 2006 2007 2006
-------------------------------------------------------------------------
Net income (Net loss) $15,606 $(12,994) $38,384 $(3,140)
Weighted average
number of shares
outstanding 27,024,848 27,024,848 27,024,848 27,025,666
Effect of dilutive
stock options 9,421 - 9,797 533
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Weighted average
number of diluted
shares outstanding 27,034,269 27,024,848 27,034,645 27,026,199
Basic and diluted
earnings (loss) per
share $0.58 $(0.48) $1.42 $(0.12)
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11.STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS
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Three-month period Year
ended December 31, 2007 ended December 31, 2007
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Conventional Quebecor Conventional Quebecor
Class B Media Inc. Class B Media Inc.
stock stock stock stock
options options options options
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Balance at
beginning 445,827 123,596 489,695 129,118
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Granted 537,866 204,563 561,875 204,563
Cancelled - - (67,877) (5,522)
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Balance as at
Dec.31, 2007 983,693 328,159 983,693 328,159
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Of the options outstanding as at December 31, 2007, 84,082 conventional Class B stock options at an average exercise price of $20.61 and 61,395 Quebecor Media Inc. stock options at an average exercise price of $17.58 can be exercised.
12.GUARANTEES
The maximum exposure in respect of the guaranteed portion of the residual values of certain assets under operating leases to the benefit of the lessor is $938,000. As at December 31, 2007, the Company did not record any liability related to these guarantees.
13.PENSION PLANS AND OTHER RETIREMENT BENEFITS
The Company maintains defined benefit and defined contribution pension plans for its employees. In addition, under an old plan, the Company maintains for certain retired employees other retirement benefits, such as health, life and dental insurance plans. Total costs for these benefits are as follows:
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Three-month periods Years ended
ended December 31 December 31
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2007 2006 2007 2006
-------------------------------------------------------------------------
Pension plans
Defined benefit plans $1,024 $939 $4,087 $3,606
Defined contribution plans 571 $465 2,214 $2,150
Other retirement benefits $47 $73 $186 $294
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14.CONTINGENCY
In 2003 and 2004, a number of companies, including TVA Group Inc., brought a suit against the Crown before the Federal Court, alleging that the Part II licence fees that broadcasters are required to pay annually constitute, in fact and in law, taxes, not fees. On December 14, 2006, the Federal Court decreed that these fees did indeed constitute taxes, that the Canadian Radio-television and Telecommunications Commission ("CRTC") was to cease collection of such fees, and ordered that the plaintiff companies would not be entitled to a reimbursement of the amounts already paid. On October 1, 2007, the CRTC issued a document, stating that it would adhere to the decision that was rendered and that it would not collect, in 2007 or in any subsequent years, the Part II licence fees payable on November 30 of each year unless a Superior Court reversed the Federal Court decision. The plaintiffs and the defendant both filed an appeal before the Federal Court of Appeal. In December 2007, the appeal was heared and the judgment should be rendered towards the end of the second quarter of 2008. The reduction of theses fees in the operating expenses for the period from September 1, 2006 to December 31, 2007 represents $4,139,000. Depending on the outcome of the Federal Court of Appeal's decision, the Company may be required to pay these fees for 2007 and subsequent years. The management considers it more unlikely than not that the decision will be overturned.
15. SEGMENTED INFORMATION
The following table includes information on operating income, as well as information on assets:
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Three-month periods Years ended
ended December 31 December 31
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2007 2006 2007 2006
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Operating revenues
Television $98,748 $96,040 $321,045 $309,317
Publishing 19,992 20,461 79,878 78,125
Distribution 6,725 5,475 19,828 14,369
Intersegment items (1,392) (2,039) (5,265) (8,499)
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124,073 119,937 415,486 393,312
Operating, selling and
administrative expenses
Television 79,139 77,000 270,688 266,354
Publishing 18,398 20,156 72,049 76,767
Distribution 5,223 5,977 18,533 16,076
Intersegment items (1,481) (2,055) (5,165) (7,941)
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101,279 101,078 356,105 351,256
Income before amortization,
financial expenses,
restructuring costs of
operations, income taxes
(recovery), non
controlling interest and
equity in income of
companies subject to
significant influence
Television 19,609 19,040 50,357 42,963
Publishing 1,594 305 7,829 1,358
Distribution 1,502 (502) 1,295 (1,707)
Intersegment items 89 16 (100) (558)
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$22,794 $18,859 $59,381 $42,056
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The intersegment items mentioned above represent the elimination of normal course business transactions made between the Company's business segments regarding revenues, expenses and unrealized profit.
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December 31, 2007 December 31, 2006
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Total assets
Television $342,500 $362,597
Publishing 84,237 85,071
Distribution 19,763 18,971
Unallocated items 11,262 11,262
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$457,762 $477,901
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16. COMPARATIVE FIGURES
Certain 2006 comparative figures have been reclassified to conform to the basis of presentation adopted in 2007.
Contacts: TVA Group Inc. Denis Rozon, CA Vice-President and Chief Financial Officer 514-598-2808 www.tva.canoe.ca
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