TVA Group reports increased adjusted operating income(1) for the third straight quarter

TVA Group reports increased adjusted operating income(1) for the third straight quarter

MONTREAL, May 10, 2016 /CNW Telbec/ - TVA Group Inc. ("TVA Group" or the "Corporation") today announced that it recorded adjusted operating income(1) in the amount of $0.3 million in the first quarter of fiscal 2016, compared with a $7.7 million adjusted operating loss in the same quarter of 2015.

The Corporation also declared a net loss attributable to shareholders of $7.4 million or a loss of $0.17 per share for the quarter, compared with a net loss attributable to shareholders of $14.7 million or a loss of $0.57 per share in the same quarter of 2015.

First quarter operating highlights:


-- Adjusted operating loss(1) in the Broadcasting & Production segment:
$3,884,000, up $4,775,000 (55%) due mainly to the following factors:
-- 21% decrease in the adjusted operating loss(1) of "TVA Sports";
-- Increase in adjusted operating income(1) at the specialty services
other than "TVA Sports"; and
-- Increase in the adjusted operating income(1) at TVA Network, mainly
due to lower operating expenses, other than the expenses generated
by increased commercial production volume of activity.
-- Adjusted operating income(1) in the Film Production & Audiovisual
Services segment ("MELS"): $2,122,000, up $2,119,000 due to increased
volume of activity in soundstage and production equipment leasing
compared with the same quarter of 2015.
-- Adjusted operating income(1) in the Magazines segment: $2,059,000, up
$1,094,000 (113%) mainly because of the addition of the adjusted
operating results of the magazines acquired from Transcontinental and a
decrease in the magazines' expenses due to a decline in the volume of
activity for comparable magazines.
"We are very satisfied that we have increased our adjusted operating income(1) for the third consecutive quarter," commented Julie Tremblay, President and Chief Executive Officer of the Corporation. "The improvement was driven by the addition of the magazines we acquired in the second quarter of 2015 combined with significant volume of activity growth at MELS and stringent control of operating expenses. The turmoil in the media industry is forcing us to constantly question our products and brands with a view to maintaining their profitability. We therefore had to resign ourselves to relinquishing the licence for our "Argent" specialty service when we filed our licence renewal applications to Canadian Radio-television and Telecommunications Commission in April. We will continue operating the prestigious "Argent" brand through the TVA Nouvelles newscasts, the "LCN" news and public affairs channel, and digital platforms, which hold the greatest potential for business news consumption. TVA Group's total market share held strong at 35.7%(2) in the last quarter compared with 34.6% in the same quarter of 2015. TVA Network carried 22 of the 30 most-watched programs in Quebec, including the smash hit variety show La Voix, which attracted an average audience of nearly 2.6 million for an average market share of 57.5% and peaked at more than 3.5 million viewers", also commented Ms. Tremblay.

"We are pleased with the response from local and foreign producers of films and television series, who are making extensive use of MELS's soundstage facilities and equipment, as well as its postproduction and visual effects services. The financial results for the last quarter and the utilization rate of our film production facilities indicate increasing interest in our services and strong growth potential for this line of business", added Julie Tremblay.

"Finally, in the Magazines segment, we are very proud to have Canada's leading brands in our portfolio, with 9 million readers(3) across all platforms. On April 12, we launched "Molto", our digital newsstand, to address our readers' adoption of multiple content delivery methods. "Molto" gives all users unlimited access to the full content of all our publications on their tablets and smartphones, making our magazines that much more accessible. This new product fits into our digital strategy and will increase the reach of our brands," concluded Julie Tremblay.

Definition

Adjusted operating income (loss) ("Adjusted operating results")

In its analysis of operating results, the Corporation defines adjusted operating income (loss) as net income (loss) before depreciation of property, plant and equipment, amortization of intangible assets, financial expenses, operational restructuring costs, impairment of assets and others, income taxes and share of loss (income) of associated corporations. Adjusted operating income (loss) as defined above is not a measure of results that is consistent with International Financial Reporting Standards ("IFRS"). 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 should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS. This measure is used by management and the Board of Directors to evaluate the Corporation's consolidated results and the results of its segments. This measure eliminates the significant level of impairment, depreciation and amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments. Adjusted operating income (loss) is also relevant because it is a significant component of the Corporation's annual incentive compensation programs. The Corporation's definition of adjusted operating income (loss) 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 may be forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Corporation'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. Factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors and risks related to loss of key customers in the Film Production and Audiovisual Services segment), programming, content and production cost risks, credit risk, government regulation risks, government assistance risks, changes in economic conditions, fragmentation of the media landscape, and labour relation risks. 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 Corporation's actual results to differ from current expectations, please refer to the Corporation's public filings available at www.sedar.com and http://groupetva.ca, including, in particular, the "Risks and Uncertainties" section of the Corporation's annual Management's Discussion and Analysis for the year ended December 31, 2015 and the "Risk Factors" section of the Corporation's 2015 annual information form.

The forward-looking statements in this news release reflect the Corporation's expectations as of May 10, 2016, and are subject to change after this date. The Corporation 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

TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company engaged in the broadcasting and production, film production and audiovisual services and magazine publishing industries. TVA Group Inc. is North America's largest broadcaster of French-language entertainment, information and public affairs programming, largest publisher of French-language magazines, and one of the largest private-sector producers of French-language content. The Corporation's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.

____________________



(1) See definition of
adjusted operating
income (loss) below.

(2) Source: Numeris - French
Quebec, January 1 to
March 31, 2016, Mon-
Sun, 2:00 - 2:00, All 2+

(3) Source: Vividata, 2015
Q4, Total Canada, 12+




TVA GROUP INC.

Interim consolidated statements of loss


(unaudited)

(in thousands of Canadian dollars, except per-share amounts)


Three-month periods
ended March 31
--------------

Note 2016 2015
---- ---- ----



Revenues 2 $145,523 $126,514


Purchases of goods and
services 3 103,533 93,411

Employee costs 41,693 40,794

Depreciation of property, plant and
equipment and amortization of intangible
assets 8,434 6,808

Financial expenses 4 970 1,935

Operational restructuring
costs, impairment of
assets and others 5 452 407
------------------------- --- --- ---

Loss before tax recovery and share of
(income) loss of associated corporations (9,559) (16,841)
----------------------------------------- ------ -------


Tax recovery (2,099) (5,982)


Share of (income) loss of
associated corporations 9 a) (106) 3,852
------------------------- --- ---- -----

Net loss $(7,354) $(14,711)
======== ======= ========


Net (loss) income attributable to:

Shareholders $(7,389) $(14,711)

Non-controlling interest 35 -


Basic and diluted loss per
share attributable to
shareholders 6 c) $(0.17) $(0.57)
========================== === ====== ======


See accompanying notes to interim condensed consolidated financial statements.






TVA GROUP INC.

Interim consolidated statements of comprehensive loss


(unaudited)

(in thousands of Canadian dollars)


Three-month periods
ended March 31
==============

Note 2016 2015
---- ---- ----


Net loss $(7,354) $(14,711)


Other comprehensive items that may be reclassified
to income:

Cash flow hedge:

Gain (loss) on valuation of
derivative financial instruments 8 92 (547)

Deferred income taxes 8 (25) 147

Other comprehensive items that will not be
reclassified to income:

Defined benefit
plans:

Re-measurement loss 8 (15,000) -

Deferred income taxes 8 4,000 -
--------------------- --- ----- ---

(10,933) (400)
------- ----

Comprehensive loss $(18,287) $(15,111)
================== ======== ========


Comprehensive (loss) income attributable to:

Shareholders $(18,322) $(15,111)

Non-controlling interest 35 -


See accompanying notes to interim condensed consolidated financial statements.





TVA GROUP INC.

Interim consolidated statements of equity


(unaudited)

(in thousands of Canadian dollars)


Equity
attributable
to non-
controlling
Equity attributable to shareholders interest Total
equity
--- ------

Capital Contributed Retained Accumula-ted
surplus earnings other
comprehen-
sive loss
stock
(note 6) (note 8)
------- -------


Balance as at December
31, 2014 $98,647 $581 $162,595 $(3,618) $ - $258,205

Net loss - - (14,711) - - (14,711)

Issuance of share capital, net
of transaction costs 108,725 - - - - 108,725

Other comprehensive loss - - - (400) - (400)
------------------------ --- --- --- ---- --- ----

Balance as at March 31, 2015 207,372 581 147,884 (4,018) - 351,819

Business acquisitions - - - - 417 417

Net (loss) income - - (40,515) - 259 (40,256)

Transaction costs related to
issuance of share capital (92) - - - - (92)

Other comprehensive loss - - - (2,456) - (2,456)
------------------------ --- --- --- ------ --- ------

Balance as at December 31, 2015 207,280 581 107,369 (6,474) 676 309,432

Net (loss) income - - (7,389) - 35 (7,354)

Other comprehensive loss - - - (10,933) - (10,933)
------------------------ --- --- --- ------- --- -------

Balance as at March
31, 2016 $207,280 $581 $99,980 $(17,407) $711 $291,145
=================== ======== ==== ======= ======== ==== ========


See accompanying notes to interim condensed consolidated financial statements.





TVA GROUP INC.

Interim consolidated balance sheets


(unaudited)

(in thousands of Canadian dollars)


March 31, December 31,
2016 2015
---- ----


Assets


Current assets

Cash $4,671 $11,996

Accounts receivable 150,253 150,930

Income taxes 7,046 6,787

Programs, broadcast rights and
inventories 74,080 79,495

Prepaid expenses 5,819 4,064
---------------- ----- -----

241,869 253,272

Non-current assets

Broadcast rights 46,580 36,321

Investments 12,700 12,594

Property, plant and equipment 208,152 208,103

Intangible assets 37,760 39,770

Goodwill 77,985 77,985

Deferred income taxes 12,573 7,069
--------------------- ------ -----

395,750 381,842
------- -------

Total assets $637,619 $635,114
============ ======== ========




TVA GROUP INC.

Interim consolidated balance sheets (continued)


(unaudited)

(in thousands of Canadian dollars)


Note March 31, December 31,
2016 2015
---- ----


Liabilities and equity


Current liabilities

Bank overdraft $11,818 $ -

Accounts payable and accrued
liabilities 108,757 112,914

Income taxes 588 1,769

Broadcast rights payable 98,538 88,867

Provisions 5,358 7,107

Deferred revenues 18,952 28,148

Short-term debt 4,688 4,219
--------------- ----- -----

248,699 243,024

Non-current liabilities

Long-term debt 67,485 68,812

Defined benefit plan liability 18,896 2,322

Other liabilities 8,760 8,652

Deferred income taxes 2,634 2,872
--------------------- ----- -----

97,775 82,658

Equity

Capital stock 6 207,280 207,280

Contributed surplus 581 581

Retained earnings 99,980 107,369

Accumulated other comprehensive loss 8 (17,407) (6,474)
------------------------------------ --- ------- ------

Equity attributable to shareholders 290,434 308,756

Non-controlling interest 711 676
------------------------ --- ---

291,145 309,432
------- -------

Total liabilities and equity $637,619 $635,114
============================ ======== ========


See accompanying notes to interim condensed consolidated financial statements.

On May 10, 2016, the Board of Directors approved the interim condensed consolidated financial statements for the three-month periods ended March 31, 2016 and 2015.





TVA GROUP INC.

Interim consolidated statements of cash flows


(unaudited)

(in thousands of Canadian dollars)


Three-month periods
ended March 31
--------------

Note 2016 2015
---- ---- ----


Cash flows related to operating activities

Net loss $(7,354) $(14,711)

Adjustments for:

Depreciation and amortization 8,503 6,915

Share of (income) loss of
associated corporations (106) 3,852

Deferred income taxes (1,768) (5,693)

Loss on valuation of derivative
financial instrument 4 2 15
------------------------------- --- --- ---

Cash flows used
in current
operations (723) (9,622)

Net change in
non-cash
balances
related to
operating
activities (4,053) 34,749
-------------- ------ ------

Cash flows (used in) provided by operating
activities (4,776) 25,127
------------------------------------------ ------ ------


Cash flows related to investing activities

Additions to
property, plant
and equipment (12,891) (6,060)

Additions to
intangible
assets (499) (508)

Net change in
investments 9 a) - (2,081)
-------------- --- --- ------

Cash flows used in investing activities (13,390) (8,649)
--------------------------------------- ------- ------


Cash flows related to financing activities

Change in bank
overdraft 11,818 (4,486)

(Repayment of)
increase in
long-term debt (927) 189

Repayment of
credit facility
from parent
corporation 9 b) - (100,000)

Issuance of
share capital,
net of
transaction
costs 6 - 108,725

Repayment of
derivative
financial
instruments (50) (56)
------------- --- ---

Cash flows provided by financing activities 10,841 4,372
------------------------------------------- ------ -----


Net change in cash (7,325) 20,850

Cash at beginning of period 11,996 -
--------------------------- ------ ---

Cash at end of period $4,671 $20,850
===================== ====== =======


Interest and taxes reflected as operating
activities

Net interest
paid $634 $1,715

Income taxes
paid (net of
refunds) 1,110 1,416
============= ===== =====


See accompanying notes to interim condensed consolidated financial statements.




TVA GROUP INC.

Notes to interim condensed consolidated financial statements

Three-month periods ended March 31, 2016 and 2015 (unaudited)

(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)

TVA Group Inc. ("TVA Group" or the "Corporation") is governed by the Québec Business Corporations Act. TVA Group is an integrated communications company engaged in the broadcasting and production, film production and audiovisual services and magazine publishing industries (note 11). The Corporation is a subsidiary of Quebecor Media Inc. ("Quebecor Media" or the "parent corporation") and its ultimate parent corporation is Quebecor Inc. ("Quebecor"). The Corporation's head office is located at 1600 de Maisonneuve Boulevard East, Montreal, Quebec, Canada.

The Corporation's businesses experience significant seasonality due to, among other factors, seasonal advertising patterns, consumers' viewing, reading and listening habits, and demand for production services from international and local producers. Because the Corporation depends on the sale of advertising for a significant portion of its revenues, 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.

1. Basis of presentation

These consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), except that they do not include all disclosures required under IFRS for annual consolidated financial statements. In particular, these consolidated financial statements were prepared in accordance with IAS 34, Interim Financial Reporting, and accordingly, they are condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Corporation's 2015 annual consolidated financial statements, which describe the accounting policies used to prepare these financial statements.

Certain comparative figures for the three-month period ended March 31, 2015, have been restated to conform to the presentation adopted for the three-month period ended March 31, 2016.

2. Revenues

The breakdown of revenues between advertising services, royalties, leasing and postproduction services and other services rendered, and product sales is as follows:







Three-month periods
ended March 31
--------------

2016 2015
---- ----


Advertising services $64,450 $58,632

Royalties, leasing and postproduction
services and other services rendered 56,488 46,758

Product sales 24,585 21,124
------------- ------ ------

$145,523 $126,514
======== ========


3. Purchases of goods and services

The main components of purchases of goods and services are as follows:




Three-month periods
ended March 31
--------------

2016 2015
---- ----


Royalties,
rights
and
production
costs $70,457 $69,144

Printing and
distribution 8,188 4,000

Services rendered
by parent
corporation

-Commissions on advertising
sales 4,868 3,151

- Other 2,202 2,452

Building costs 5,623 4,332

Marketing,
advertising and
promotion 3,597 4,567

Other 8,598 5,765
----- ----- -----

$103,533 $93,411
======== =======


4. Financial expenses




Three-month periods
ended March 31
--------------

2016 2015
---- ----


Interest on long-term debt $673 $838

Interest on credit facility from parent
corporation (note 9 b)) - 805

Foreign exchange loss 135 141

Amortization of financing costs 69 107

Interest expense on net defined benefit
liability 87 13

Loss on valuation of derivative
financial instrument 2 15

Other 4 16
----- --- ---

$970 $1,935
==== ======


5. Operational restructuring costs, impairment of assets and others

In the three-month period ended March 31, 2016, the Corporation recorded $392,000 in operational restructuring costs in connection with staff reductions, including $314,000 in the Magazines segment and $78,000 in the Film Production & Audiovisual Services segment ($245,000 in the Film Production & Audiovisual Services segment in the three-month period ended March 31, 2015). During the same period, the Corporation recognized $60,000 in professional fees in connection with business acquisitions made in 2014 and 2015 ($162,000 in the three-month period ended March 31, 2015).

6. Capital stock

a) Authorized capital stock

An unlimited number of Class A common shares, participating, voting, without par value.

An unlimited number of Class B shares, participating, non-voting, without par value.

An unlimited number of preferred shares, non-participating, non-voting, with a par value of $10 each, issuable in series.

b) Issued and outstanding capital stock




March 31, December 31,
2016 2015
---- ----


4,320,000 Class A common
shares $72 $72

38,885,535 Class B shares 207,208 207,208
------------------------- ------- -------

$207,280 $207,280
======== ========


On March 20, 2015, the Corporation completed a subscription rights offering to its shareholders, whereby it received gross proceeds totalling $110,000,000 from the issuance of 19,434,629 Class B non-voting shares. Transaction costs of $1,744,000, less $469,000 in income tax, were charged to capital stock as a reduction of gross proceeds from the issuance. The transaction costs included $1,100,000 in commitment fees paid to Quebecor Media.

c) Loss per share attributable to shareholders

The following table shows the computation of loss per basic and diluted share attributable to shareholders:




Three-month periods
ended March 31
--------------

2016 2015
---- ----


Net loss attributable
to shareholders $(7,389) $(14,711)
===================== ======= ========


Weighted average number of basic
and diluted shares outstanding 43,205,535 25,693,012
================================ ========== ==========


Basic and diluted loss
per share attributable
to shareholders $(0.17) $(0.57)
======================= ====== ======


The loss per diluted share calculation does not take into consideration the potential dilutive effect of stock options of the Corporation, because their impact is non-dilutive

7. Stock-based compensation and other stock-based payments




Three-month period
ended March 31, 2016
--------------------

Corporation's Class B Quebecor Media

stock options stock options
------------- -------------

Number Weighted Number Weighted

average average

exercise exercise
price price
--------- ---------


Balance
as
at
December
31,
2015 463,371 $13.30 226,200 $61.70

Expired (49,250) 15.99 - -
------- ------- ----- --- ---

Balance
as
at
March
31,
2016 414,121 $12.98 226,200 $61.70
======= ======= ====== ======= ======


Of the options outstanding as at March 31, 2016, 334,121 Corporation Class B stock options at an average exercise price of $14.30 and 14,000 Quebecor Media stock options at an average price of $66.96 could be exercised.

During the three-month period ended March 31, 2016, no Quebecor Media stock options were exercised (11,625 stock options were exercised for a cash consideration of $292,000 during the three-month period ended March 31, 2015).

During the same period, the Corporation recorded no compensation expense in relation to its Class B stock options ($11,000 reversal in the same period of 2015) and it recorded a $329,000 compensation expense in relation to Quebecor Media stock options ($934,000 in the same period of 2015).

8. Accumulated other comprehensive loss







Cash flow Defined
hedge
benefits plans Total
-------------- -----


Balance as at
December 31, 2014 $ - $(3,618) $(3,618)

Other
comprehensive
loss (400) - (400)
-------------- ---- --- ----

Balance as at
March 31, 2015 (400) (3,618) (4,018)

Other
comprehensive
income (loss) 62 (2,518) (2,456)
-------------- --- ------ ------

Balance as at
December 31, 2015 (338) (6,136) (6,474)

Other
comprehensive
income (loss) 67 (11,000) (10,933)
-------------- --- ------- -------

Balance as at
March 31, 2016 $(271) $(17,136) $(17,407)
=============== ===== ======== ========


9. Related-party transactions

a) ROC Television G.P. ("ROC Television," formerly SUN News General Partnership)

Since the announcement on February 13, 2015 of the discontinuation of the operations of ROC Television, in which TVA Group holds a 49% interest, the Corporation has continued making capital contributions to ROC Television to cover its operating losses up to the closure date as well as costs related to the discontinuation of operations. A $1,760,000 allowance was recorded under accounts payable and accrued liabilities at March 31, 2016 to cover those costs.

The partners made no capital contribution in the first quarter of 2016, compared with a $4,800,000 contribution in the first quarter of 2015, including $2,352,000 from TVA Group and $2,448,000 from Sun Media Corporation, a company under common control.

b) Credit facility from parent corporation

In connection with the funding of the acquisition of substantially all of the assets of A.R. Global Vision Ltd., the Corporation obtained a $100,000,000 credit facility from Quebecor Media, which was paid down in full in the first quarter of 2015 with the proceeds from the subscription rights offering (note 6). The Corporation recognized and paid interest in the amount of $805,000 on that credit facility in the first quarter of 2015.

10. Fair value of financial instruments

In accordance with IFRS 13, Fair Value Measurement, the Corporation has considered the following fair value hierarchy. This hierarchy reflects the significance of the inputs used in measuring the financial instruments accounted for at fair value on the consolidated balance sheet:



Level 1: quoted prices (unadjusted) in
active markets for identical
assets or liabilities;


Level 2: inputs other than quoted prices
included in Level 1 that are
observable for the asset or
liability, either directly (i.e.,
as prices) or indirectly (i.e.,
derived from prices); and


Level 3: inputs that are not based on
observable market data
(unobservable inputs).


The fair values of long-term debt and of the derivative financial instrument are estimated based on a valuation model using Level 2 inputs. The fair values are based on discounted cash flows using period-end market yields or the market value of similar financial instruments with the same maturity.

The carrying amount and the fair values of the long-term debt and of the derivative financial instrument as at March 31, 2016 and December 31, 2015 were as follows:




March 31, 2016 December 31, 2015
-------------- -----------------

Carrying Fair Carrying Fair
amount value amount value
------ ----- ------ -----


Derivative
financial
instrument $674 $674 $814 $814

Term loan(1) 72,870 72,870 73,797 73,797
=========== ====== ====== ====== ======
(1 )The carrying amount of long-term debt excludes financing fees.



11. Segmented information

Management made changes to the Corporation's management structure at the beginning of 2016. Some Broadcasting & Production segment operations formerly conducted by TVA Accès inc. (now Mels Dubbing Inc.) were transferred to other units of the Corporation. Commercial production remained in the Broadcasting & Production segment, while custom publishing, commercial printed production and premedia services were integrated into the operations of the Magazines segment and dubbing became part of the Film Production & Audiovisual Services segment. Prior period disclosures have been restated to reflect this new presentation.

The Corporation's operations now consist of the following segments:





-- The Broadcasting & Production segment, which includes the operations of
TVA Network (including the subsidiary and divisions TVA Productions
Inc., TVA Nouvelles and TVA Interactif), specialty services, the
marketing of digital products associated with the various televisual
brands, the commercial production and distribution of audiovisual
products by the TVA Films division.
-- The Magazines segment, which through its subsidiaries, notably TVA
Publications inc. and Les Publications Charron & Cie inc., publishes
French- and English-language magazines in various fields such as the
arts, entertainment, television, fashion, sports and decoration, and
markets digital products associated with the various magazine brands,
and provides custom publishing, commercial print production and premedia
services.
-- The Film Production & Audiovisual Services segment, which through its
subsidiaries Mels Studios and Postproduction G.P. and Mels Dubbing Inc.
provides soundstage and equipment leasing, dubbing and postproduction
and visual effects services.





Three-month periods
ended March 31
--------------

2016 2015
---- ----


Revenues

Broadcasting &
Production $105,963 $103,523

Magazines 27,487 14,878

Film Production & Audiovisual
Services 15,512 10,249

Intersegment items (3,439) (2,136)
------------------ ------ ------

145,523 126,514

Adjusted operating income (loss)
(1)

Broadcasting & Production (3,884) (8,659)

Magazines 2,059 965

Film Production & Audiovisual
Services 2,122 3
----------------------------- ----- ---

297 (7,691)

Depreciation of property, plant
and equipment and amortization of
intangible assets 8,434 6,808

Financial expenses 970 1,935

Operational restructuring costs,
impairment of assets and others 452 407
-------------------------------- --- ---

Loss before tax
recovery and share of
(income) loss of
associated
corporations $(9,559) $(16,841)
====================== ======= ========


The above-noted intersegment items represent the elimination of normal course business transactions between the Corporation's business segments regarding revenues.



(1) The Chief Executive Officer uses
adjusted operating income (loss)
as a measure of financial
performance for assessing the
performance of each of the
Corporation's segments. Adjusted
operating income (loss) is
defined as net income (loss)
before depreciation of property,
plant and equipment,
amortization of intangible
assets, financial expenses,
operational restructuring costs,
impairment of assets and others,
income taxes and share of loss
(income) of associated
corporations. Adjusted operating
income (loss) as defined above
is not a measure of results that
is consistent with IFRS.


SOURCE TVA Group

TVA Group

CONTACT: Denis Rozon, CPA, CA, Vice President and Chief Financial Officer, (514) 598-2808

Web Site: tva.canoe.ca/groupetva


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