cbc/radio-canada first quarter financial report 2012-2013€¦ · for more about this plan please...

0 CBC/Radio-Canada First Quarter Financial Report 2012-2013 Confidential Draft 5 March 1, 2013 10:58 AM

CBC/Radio-Canada First Quarter Financial Report 2012-2013

1 CBC/Radio-Canada Second Quarter Financial Report 2012-2013

CBC/Radio-Canada Second Quarter Financial Report 2012-2013



Table of Contents

CBC/Radio-Canada’s Commitment to Transparency and Accountability ..................................................... 3

Management Discussion and Analysis ......................................................................................................... 4

Quarter in Review ......................................................................................................................................... 5 Financial Highlights .............................................................................................................................. 5 Business Highlights.............................................................................................................................. 8

1. Performance Update .......................................................................................................................... 11 1.1 Strategic Indicators ................................................................................................................ 11 1.2 Operational Indicators ........................................................................................................... 13

2. Capability to Deliver Results .............................................................................................................. 15 2.1 People and Leadership ......................................................................................................... 15 2.2 Resource Capacity ................................................................................................................ 17

3. Results and Outlook ........................................................................................................................... 19 3.1 Results ................................................................................................................................... 19 3.2 Financial Condition, Cash Flow and Liquidity ....................................................................... 26 3.3 Outlook and Risk Update....................................................................................................... 28

4. Financial Reporting Disclosure ........................................................................................................... 30 4.1 Critical Accounting Estimates and Future Accounting Standards ......................................... 30 4.2 Transactions with Related Parties ......................................................................................... 30

5. Statement of Management Responsibility by Senior Officials ............................................................ 31

6. Condensed Consolidated Financial Statements ................................................................................ 32

7. Notes to the Condensed Consolidated Financial Statements ............................................................ 37



CBC/Radio-Canada’s Commitment to Transparency and Accountability

As the national public broadcaster, we take very seriously our obligation to be transparent and accountable to Canadians. To meet our responsibilities, we provide access on our corporate website to information about our activities and the way we manage public resources.

Access to Information& Privacy

CRTC

CorporateReports

Policies& Practices

OmbudsmenReport

Annual Public

Meeting

Parliamentary Committees

Auditor General

Official Languages

Proactive Disclosure

Transparency& Accountability

Bulletin

• Annual Report, tabled in Parliament

• Corporate Plan and Summary

• Quarterly Financial Reports• CBC and Radio-Canada Pension Annual Report

• Public Accounts of Canada

• Semi-Annual Report Card

• Environmental Performance Reports

• Annual OAG Attest Audit

• Special Examination, which

began in the fall of 2011

• Appearances before Parliamentary

Committees (Canadian Heritage,

Official Languages)

• Review on implementation of Section 41

of the Official Languages Act report

• Annual Report on Employment Equity to

the Department of Human Resources

and Skills Development Canada

(HRSDC)

• Journalistic policies and practices

• Code of conduct

• Periodic license renewals

• Annual reporting to the CRTC covering:

• Each of the Corporation’s licensed radio,

television and specialty services

• Audit reports for all the Corporation’s

television stations eligible for LPIF

• Independent Production Reports covering

CBC Television and la Télévision de

Radio-Canada

• New media reporting requirements

• Proactive Disclosure web

pages (including posting of

travel and hospitality expenses

of the Chair and Executives)

www.cbc-radio-canada.ca

Management Discussion and Analysis 4 CBC/Radio-Canada Second Quarter Financial Report 2012-2013


Management Discussion and Analysis

Quarterly Reporting Requirement

In addition to filing an annual report, we are required— like most Canadian federal Crown corporations — to file quarterly financial reports for the first three quarters of each fiscal year. In keeping with our commitment to transparency and effective oversight of public funds, we are pleased to present this quarterly report for the period ended September 30, 2012. It can be accessed on our corporate website.

These unaudited condensed consolidated financial statements for the quarter ended September 30, 2012 have not been reviewed by our Auditor.

Seasonality

The majority of our self-generated revenue comes from advertising, which follows seasonal patterns. Advertising revenue varies according to market and general economic conditions and the programming schedule. Subscriber-based revenue is relatively more stable on a quarter-by-quarter basis. Operating expenses also tend to follow a seasonal pattern because they are influenced by the programming schedule.

Government appropriations are recognized in income based on the annual budget, which reflects seasonal impacts on expenditures and self-generated revenue.

Note Regarding Forward-Looking Statements

This report contains forward-looking statements regarding objectives, strategies, and expected financial and operational results. Forward-looking statements are based on the following broad assumptions: CBC/Radio-Canada’s government funding remains consistent with amounts announced in Federal Budget 2012; the funding received from the Local Programming Improvement Fund (LPIF) will be phased out by August 31, 2014; the television advertising market will remain healthy; and the broadcasting regulatory environment will not change significantly. Key risks and uncertainties are described in the Outlook and Risk Update section of this report. However, some risks and uncertainties are by definition difficult to predict and beyond our control. They include, but are not limited to, economic, financial, technical and regulatory conditions. These and other factors may cause actual results to differ substantially from the expectations stated or implied in forward-looking statements.

5 Management Discussion and Analysis CBC/Radio-Canada Second Quarter Financial Report 2012-2013


Quarter in Review

Financial Highlights

13% 50.4

10%41.2

9%35.368%

269.4

Revenue and Sources of Funds for Q2 2012-2013

( i n millions of canadian dollars)

Advertising

Specialty services

Financing and other income

Government funding

83%319.7

8%31.7

6%23.3

3%10.1

Expense Breakdown for Q2 2012-2013

( i n millions of canadian dollars)

Television, radio and new media services

Specialty services

Transmission, distribution and collection

Other

(in thousands of Canadian dollars)

2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

Revenue 126,970 128,076 (0.9) 309,675 308,221 0.5

Expenses (384,829) (389,573) (1.2) (886,263) (861,188) 2.9

Government funding 269,377 291,008 (7.4) 572,425 568,890 0.6

N et result s bef ore non-

operat ing it ems 11,518 2 9 ,511 ( 6 1.0 ) ( 4 ,16 3 ) 15,9 2 3 ( 12 6 .1)

For t he six mont hs ended Sept ember 3 0For t he t hree mont hs ended Sept ember 3 0

Net results before non-operating items for the quarter amounted to $11.5 million, a decrease of $18.0 million compared to the second quarter of the previous year. This movement reflects the following changes in revenue, funding and expenses:

Revenue decreased by $1.1 million (0.9 per cent) compared to the same period in 2011−2012. This primarily reflects the reduction of the Local Programming Improvement Fund (LPIF) contribution rate effective September 1, 2012 as well as other non-recurring items. These decreases were partly offset by higher specialty services revenue.

Expenses were lower by $4.7 million (1.2 per cent) compared to the second quarter of last year. Programming costs were lower in English, French and specialty services. Overall reductions in spending following Federal Budget 2012 also contributed to this decrease.

Government funding recognized for accounting purposes was $21.6 million lower (7.4 per cent) compared to the second quarter of last year, reflecting the matching of funding to quarterly budgeted costs. Government appropriations for 2012−2013 are expected to be lower than the previous year by $27.8 million as a result of Federal Budget 2012 reductions.



Other Financial Matters

Same Strategy, Different Path

On April 4, 2012, we announced that we would be facing $200 million in financial pressures over three years. This comprises a $115 million reduction phased in over three years to our annual appropriation as part of Federal Budget 2012 and $85 million of unavoidable new costs including those required to keep pace as a modern public broadcaster. In addition, we estimate one-time restructuring costs to deal with these additional pressures are estimated at $25 million.

Starting in the first quarter, we began implementing the measures outlined in our plan and we remain on track this quarter. On July 31, 2012, we shut down our analogue over-the-air television transmission network, comprising 607 transmitters across Canada. Fewer than two per cent of Canadians were affected by the shutdown. This measure will result in operating costs savings. We also put up for sale certain assets related to the shutdown, including land, transmission towers, analogue television transmission equipment, and related buildings, located at approximately 100 different sites across the country.

During this quarter we also continued to move forward with our Workforce Adjustment Process. We expect to eliminate 650 full-time equivalent positions over three years, with up to 475 reductions taking place this financial year.

Local Programming Improvement Fund

On October 25, we informed our employees of our plans to deal with the loss of the LPIF, which will be phased out over three years. We made a decision to protect as much as possible the initiatives that the LPIF allowed us to implement. Regional programming is essential to our role as the national public broadcaster and improving our presence in communities across Canada is one of the top priorities of our five-year plan, Strategy 2015.

Last year, we drew $47.1 million from the Fund to improve service for viewers in 20 markets. That money was instrumental in allowing us to enhance our service. It funded the addition of weekend news in most of our French and English markets and allowed us to add late night local news at CBC, extend by 30 minutes our supper-hour news shows in several markets, and enhance our coverage of local events, sports and weather. We will protect many of these things; but this means that other priorities will be affected by the drop in funding.

http://cbc.radio-canada.ca/en/explore/strategies/analoguetv/

http://cbc.radio-canada.ca/en/media-centre/2012/08/30a/



We were aware of the CRTC’s intended review of the Fund and we had put in place plans for a reduction in our current three-year financial projections. The Commission’s decision to eliminate the fund entirely means that we now have to reduce our budget by a further $28.4 million by 2013−2014. To do so, the measures we will put in place include:

Cancellation of plans for four new local radio stations.

Elimination of the cross-cultural fund (this internal fund had already been reduced in the 2012 budget process) that supported major French-English joint projects such as 8th Fire, series like CBC Radio 2 and Espace musique's Rendez-Vous, and joint coverage of events like the Arab Spring.

Reduce regional contribution to non-news programming.

Reductions to network schedules.

Reduction of communications and promotional budgets, and seeking further efficiencies yet to be determined.

For more about this plan please read the communiqué.

http://cbc.radio-canada.ca/en/media-centre/2012/10/25/



Business Highlights

Over the quarter, we continued to implement our five-year strategic plan, Strategy 2015. The plan has three key thrusts:

More distinctly Canadian: Network programming and national public spaces

More regional: Regional presence and community spaces

More digital: New platforms and digital spaces

More Distinctly Canadian

We launched a diverse range of new Canadian programs this quarter across both French and English Services.

Radio-Canada’s fall launch included new Télévision de Radio-Canada programs Unité 9, Un air de famille and a new morning show, Alors on jase.

Literature is front and centre on multiple services, including the weekday show Plus on est de fous, plus on lit! on Première Chaîne and the new ARTV magazine Lire. One notable addition to the Première Chaîne schedule is Pas de midi sans info, a daily current-affairs show. In the evening, Radiorama serves up a selection of the day’s programming highlights across all television and radio platforms, including Radio-Canada International (RCI) and Réseau de l’information de Radio-Canada (RDI).

CBC Television and CBC Radio launched new seasons in September. On Radio One, The Current with Anna Maria Tremonti began its tenth season; other returning favourites include Q with Jian Ghomeshi, Day 6, As It Happens, The Sunday Edition and The Massey Lectures. The CBC Television schedule features new programs Over the Rainbow, Titanic, Blood and Steel, Scotiabank Giller Prize Gala and Murdoch Mysteries, as well as established favourites like Dragons' Den, Rick Mercer Report (also in its tenth season), The Big Decision and more.

As part of making CBC Television’s programming schedule more Canadian, George Stroumboulopoulos Tonight debuted in primetime on September 17. CBC Television also introduced a 30 minute version of the Lang & O’Leary Exchange (which also continues in its 60 minute format on CBC News Network) following local supper hours newscasts in most markets.

For the third consecutive year, we were the national broadcast partner of Culture Days, which featured thousands of free, hands-on, interactive activities in communities across the country from September 28 to 30. Culture Days was featured on national programming such as Q with Jian Ghomeshi and This is That and on local television and radio programs. La Maison de Radio-Canada in Montreal featured an Open Doors event in conjunction with Culture Days.



More Regional

On August 29, Radio-Canada officially opened the Maison Radio-Canada Est du Québec. With its state-of-the-art high definition (HD) equipment, it’s the most advanced and efficient multi-platform production facility in the country. For Lower St. Lawrence, North Shore and Gaspé–Magdalen Islands residents, it means access to regional news, seven days a week, on radio, television and the web, along with nearly 5,000 hours of regional production per year.

The Rive Sud/Rive Nord initiative allowed us to provide Montreal’s off-island communities with hyperlocal coverage during the recent Quebec election campaign. Through their unique deployment in the field and close monitoring of the election buzz on social networks, our teams were able to reflect residents’ concerns in reports that offered an original take on the issues. For instance, the Rive Nord crew produced a web video documentary on the youngest candidate ever to be elected to the National Assembly, Léo Bureau-Blouin.

Beginning on September 17, many of CBC Television’s local late-night newscasts expanded from 10 minutes to 30 minutes to offer increased coverage of local news and events. September 17 was also the premiere of CBC News Now with Ian Hanomansing on the CBC News Network. Broadcast live from Vancouver three hours each weeknight, this national program is in prime time in Western Canadian time zones, offering the region up-to-the-minute news.

CBC provided comprehensive coverage of the Canadian Country Music Association (CCMA) Awards in Saskatoon with a live broadcast on CBC Television on September 9, plus special content on CBCMusic.ca’s three country music web radio stations and a CBCMusic.ca channel featuring top hits and favourites from previous CCMA winners.

Between July 6 and 15, CBC and Radio-Canada offered Canadians multi-platform coverage of the 100th Calgary Stampede.

More Digital

Radio-Canada’s digital strategy continues to take shape, with a focus on enabling dialogue, original content and personalized access. Our new iPhone app offers a 360-degree tour of Canadian cities through Radio-Canada archival content. Our mobile radio app lets listeners record their response to the question of the day aired on C’est bien meilleur le matin and Pas de midi sans info. In addition, the Radio-Canada et moi personalized schedule on Facebook allows users to create a TV schedule tailored to their interests and schedule.

Since the end of the free preview period on July 2, Explora became available on demand through various francophone distributors. Early audience results confirm that Explora’s positioning is relevant and has gained audience interest.

Radio Canada International’s new web only service launched on June 24, RCI.net, has seen an increase in traffic indicating the continued relevance of RCI content.

CBC Music and Espace.mu continue to increase their content. New streams added to CBCMusic.ca include another Electronic stream, New Wave tracks personally selected by Q host Jian Ghomeshi, KIDS CBC, Bollywood, Canadian Roots and Classic Soul/R&B and a second Special Events stream. On Espace.mu music, Canadians were able to preview albums by Khaled, Louis-Jean Cormier, Catherine Durand and Zachary Richard before they came out in stores.

CBC launched the Inside the News with Peter Mansbridge website, offering a behind-the-scenes look at the news, in a magazine-style site optimized for tablets. The site includes essays by Peter Mansbridge, videos and photos, and his personal recommendations.



Other Business Matters

We hosted our fourth Annual Public Meeting (APM) on September 25, 2012, in front of a live audience in St. John’s, Newfoundland and Labrador, highlighting our commitment to enhancing our regional presence. Canadians from across the country also tuned in via Twitter and webcast to hear Chair of the Board of Directors Rémi Racine, President and CEO Hubert T. Lacroix and Vice-President and Chief Financial Officer Suzanne Morris provide highlights of 2011−2012 and an overview of the Corporation’s direction for the current fiscal year and beyond. Archived material from the APM can be viewed here.

During the quarter, we were awarded the Canadian broadcast rights for the Sochi 2014 Olympic Winter Games and the Rio de Janeiro 2016 Olympic Summer Games, as well as the Toronto 2015 Pan Am Games. We will present these Games as English and French language Signature Events, telling the story of talented Canadian athletes as they compete on the national, intercontinental and world stage. Canadians will be able to access all the excitement of these Games wherever and however they choose.

On September 5, 2012, the Canadian Radio-television and Telecommunications Commission (CRTC) re-launched the public process for the renewal of CBC/Radio-Canada’s broadcasting licences. Our licence renewal hearings began on November 19. Strategy 2015 sets out our vision for the future of Canada’s national public broadcaster, but to be able to respond to the evolving broadcasting environment and the preferences of Canadians, we need the CRTC to support a flexible regulatory framework. As part of the licence renewal process, the CRTC also intends to consider our applications to introduce national advertising on CBC Radio 2 and Espace musique.

Strategy, the national marketing and promotions magazine, chose CBC as one of its five “Brands of the Year” alongside companies like Loblaw and Lululemon. We were the only Canadian media company chosen for this honour.

Radio-Canada reached a multiyear agreement with video streaming service Netflix on October 1 that is a step forward in a key element of our digital strategy — delivering content on a range of platforms.

Looking Forward

On September 16, the NHL locked out its players, resulting in the cancellation of the pre-season and some regular season games. This has affected and will continue to affect CBC Television’s programming schedule. We have developed contingency plans to manage the situation.

On July 26, CBC announced that its new broadcast centre for Kitchener-Waterloo will be located in Kitchener. Starting this winter, CBC will offer new local radio and digital news services to residents of the region.

We also announced an initiative to spark a national conversation about Canada’s upcoming 150th anniversary. Our goal is to inform, inspire and incubate local, regional and national projects to mark the occasion. In partnership with other leading Canadian organizations, we will host a series of regional “2017 STARTS NOW” events in soon-to-be-announced cities across the country, commencing in April 2013 and culminating with a national conference in June 2013.

http://cbc.radio-canada.ca/en/media-centre/2012/09/25c/

http://cbc.radio-canada.ca/en/reporting-to-canadians/annual-public-meeting/apm2012-video-archives/






1. Performance Update

Our key performance indicators (KPIs), discussed below, fall into two categories:

Strategic indicators include survey results regarding fulfillment of our mandate and the degree to which programming adheres to our Guiding Principles. They also include measures of our Canadian content on television.

Operational indicators include measures of audience share, website visits, subscriber counts and revenue generation for English Services and French Services.

Further details, including 2012-2013 targets for all performance indicators, are provided in our 2011−2012 Annual Report.

1.1 Strategic Indicators

Measuring our success against Strategy 2015: Everyone Every way

A central feature of Strategy 2015 is the establishment of metrics that enable on-going tracking and monitoring of our performance. We have developed metrics for each of the four guiding principles upon which our vision rests and have applied these to all English and French services.

Twice a year, in January and June, our Board of Directors is presented with a Report Card that allows it to monitor our progress in achieving our goals. Once we have updated the Board, we post an abridged version of the Report Card on our website.

In addition to monitoring the overall performance of Strategy 2015, we have developed specific key performance indicators for English Services and French Services. These KPIs broadly measure the success of each media line across the breadth of its activities. They are taken from the media lines’ business plans and reflect performance benchmarks and trends.

Indicators for Specialty Channels, New Platforms and Revenues are measured from the beginning of the fiscal year, and second quarter results to date are presented in Section 1.2 of this report.

Annual targets for these performance measures in 2012−2013 are also provided, as are prior year results.



Canadian Content Expectations and Results

Regulatory requirements for Canadian content on television are specified by the CRTC, which sets expectations of service for Télévision de Radio-Canada and CBC Television. For the broadcast day between 6:00 a.m. and 12:00 a.m., a minimum of 75 per cent Canadian content is expected. For the peak period of 7:00 p.m. to 11:00 p.m., a minimum of 80 per cent Canadian content is expected. Both measures are averages over the entire broadcast year from September 1 to August 31. As shown in the table below, in the past two broadcast years, Télévision de Radio-Canada and CBC Television have exceeded the CRTC’s Canadian content expectations, both over the whole day and in prime time. Increasing Canadian programming is key to our five-year strategic plan, Strategy 2015.

Yearly

Regulatory

Expec tations

Results

Sep. 1, 2011 to

Aug 31, 2012

Results

Sep. 1, 2010 to

Aug. 31, 2011

Télévision de Radio-Canada

Broadcast day (Mon-Sun, 6:00 a.m.-12:00 a.m.) 75% 86% 86%

Prime time (Mon-Sun, 7:00 p.m.-11:00 p.m.) 80% 93% 93%

CBC Television

Broadcast day (Mon-Sun, 6:00 a.m.-12:00 a.m.) 75% 85% 84%

Prime time (Mon-Sun, 7:00 p.m.-11:00 p.m.) 80% 81% 82%

Canadian Content



1.2 Operational Indicators

Many of the principal broadcasting measures are measured from September to March and become available at the end of the fall. Performance results are not always available on a quarterly basis, such as those for CBC Radio, CBC Television and la radio and la télévision de Radio-Canada. These performance results will be added to the quarterly reports starting next quarter.

English Services

At the end of the second quarter, the KPIs shown below are mostly trending favourably, with Specialty Channel subscriptions, CBC-News Network share and revenue performing at or near expectations. However, as noted in the first quarter report, the monthly average Unique Visitor metrics are currently trending behind expectations. For the first six months to date, CBC.ca Unique Visitors are 6 per cent below the previous year and regional Unique Visitors are 3 per cent below. We will continue to monitor this online performance.

Revenue results to date are favourable to plan. However, we anticipate lower revenue than targeted for the full Fiscal Year as a result of the NHL labour disruption.

Annual

Targets

2012-2013

Results

to date

Annual

Results

2011-2012

Television

CBC News Network All– day audience share11.4% 1.3% 1.4%2

Regional

Regional web pages Monthly average unique visitors3975 K 886 K 940 K2

New Platforms

CBC.ca Monthly average unique visitors36.5 million 5.8 million 6.2 million2

Specialty Television Channels

CBC News Network Subscribers 11.4 million 11.3 million 11.3 million

bold Subscribers 2.7 million 2.6 million 2.6 million

documentary Subscribers 2.6 million 2.7 million 2.6 million

Revenue4

Conventional, specialty, online $399 million $178 million $399 million5

4. Revenue for documentary is reported at 100 per cent although CBC/ Radio-Canada owns 82 per cent. Includes

revenue from LPIF, a fund created by the CRTC to support local programming. It is available to conventional television

stations operating in non-metropolitan areas.

2. In 2011−2012, measurement was based on the television season (i.e. September - March). In 2012−2013,

measurement will be on the fiscal year (April - March).

1. Source: BBM Canada, Personal People Meter (PPM), persons aged 2 years and older.

3. Source: comScore, persons aged 2 years and older.

5. In 2011−2012, measurement excluded merchandising/ licensing revenue which are included in 2012−2013.



French Services

Based on our current performance, we’re confident that we will meet our annual targets. We surpassed our specialty channels audience target for several reasons, including a highly active news scene that attracted RDI audiences, the stabilization of Explora’s subscriber base once the free preview ended on July 2, and a successful summer season for ARTV. We anticipate our year-end results for our specialty channels to stabilize closer to target. On our digital platforms, special events in September led to a sharp increase in reach for Radio-Canada.ca and its regional microsites. Based on monthly averages throughout 2012−13, we expect to meet our annual digital targets. The same is true for our specialty channels subscriber numbers.

Where revenue is concerned, based on the second quarter consolidated results, we estimate that we’ll be close to hitting our target at the end of the year.

Annual

Targets

2012-2013

Results

to date

Annual

Results

2011-2012

Television

Specialty Channels1 Full-day audience share24.7% 5.8% 4.6%3

Regional

Regional web pages Monthly average unique visitors4497 K 566 K 476 K3

Website5

Radio-Canada.ca, TOU.TV,

Bandeapart.fm, RCI.net,

Espace.mu Monthly average unique visitors42.1 million 2.0 million 2.1 million3

Specialty Television Channels

RDI Subscribers 11.8 million 11.8 million 11.7 million

ARTV Subscribers 2.1 million 2.1 million 2.1 million

Revenue6

$253.5 million $114.9 million $228.6 million7

1. Specialty Channels includes RDI, ARTV and Explora.

7. In 2011−2012, measurement excluded ARTV and merchandising/ licensing revenue which are included in targets for

2012−2013.

Conventional, specialty, online

6. Revenue for ARTV is reported at 100 per cent although CBC/ Radio-Canada owns 85 per cent. Includes revenue from

LPIF, a fund reported by the CRTC to support local programming. It is available to conventional television stations

operating in non-metropolitan areas.

3. In 2011−2012, measurement was based on the television season (i.e. September - March). In 2012−2013,

measurement will be on the fiscal year (April - March).

2. Source: BBM Canada, Personal People Meter (PPM), Quebec francophones subscribing to a television distribution

service, aged 2 years and older.

5. Espace.mu was introduced on June 13, 2011. RCI Vision was introduced on June 20, 2011, and results are included

with RCI.net.

4. Source: comScore, persons aged 2 years and older.



2. Capability to Deliver Results

Our capability to execute our strategy and achieve planned results depends upon our people and other significant resources described below.

2.1 People and Leadership

Our people remain key to our success. We need to continue to engage our employees, encourage their professional development and implement initiatives to promote a healthy workplace. Activity in the quarter included the following:

Inclusion and Diversity gets some HELP

One of our organizational priorities is to implement inclusion and diversity initiatives that will make our workforce more representative of the Canadian population. Every year, we invite managers to apply for the Help Energize Local Projects (HELP) Fund. This $200,000 fund helps managers reach their hiring targets and recruit diversity candidates in the four designated groups — members of visible minorities, persons with disabilities, Aboriginal Peoples, and women in technical positions — by allocating funding for internships, development opportunities, and workplace accommodations. We received more than 30 proposals and have approved 26 for funding. This fund has increased our capacity to recruit and retain diverse candidates.

Action on Dialogue

In the fall of 2010, we launched a corporate-wide employee survey “Dialogue”, to measure employee engagement and identify ways to meet employee needs. Since then, we have launched many local and national initiatives to address the feedback received from employees. One key point was the need for expanded career opportunities at CBC/Radio-Canada.

As a result, between February and June 2012, we piloted a mentoring project in eight sectors across CBC/Radio-Canada. Employees were connected with mentors in an informal and non-traditional way, to have conversations focused on their specific needs and to facilitate their career and professional development. As phase two of the pilot launches this fall, we will first aim to expand our reach within the already participating sectors and then extend selectively across CBC/Radio-Canada.

In September 2012, we leveraged our recruitment system and improved the tools for both managers and employees. This will increase managers' ability to access the internal pool of talent while also making it easier for employees to access career opportunities that will help them grow.



Official languages – Linguistic Duality Day

On September 13, 2012, we celebrated Linguistic Duality Day which highlights the importance of linguistic diversity and cultural openness − both on our internal portal and on the corporate blog. We know that being compliant with the Official Languages Act is important − and we work hard to ensure that we are. Over and above compliance, Linguistic Duality Day was about showing respect for English- and French-speaking communities, and deepening our relationship with all Canadians.

Our 2011−2012 Review on the Implementation of Section 41 of the Official Languages Act is posted on our corporate website. This report outlines our key initiatives for developing Official Language Minority Communities (francophones outside of Quebec and anglophones in Quebec), and promoting English and French. It also highlights our regional achievements.

Recognition

In June and October, Hubert T. Lacroix visited Toronto, Montreal and Regina to present the 2011 President’s Awards. Celebrating our people’s exceptional contributions and sharing our appreciation for their work remains one of our top priorities.

Board and Management

The Honourable James Moore, Minister of Canadian Heritage and Official Languages, announced on October 5, 2012, the reappointment of Hubert T. Lacroix as President and Chief Executive Officer of CBC/Radio-Canada for a five-year term. He was first appointed as President and CEO of CBC/Radio-Canada on January 1, 2008, for a five-year term. Prior to his appointment, Mr. Lacroix practiced law for nearly 25 years with two of Montréal’s most prominent firms and gained broadcasting experience through his involvement with Telemedia Corporation and directorships with companies in this industry.

http://cbc.radio-canada.ca/_files/cbcrc/documents/languages/2011-12-official-languanges-report.pdf




2.2 Resource Capacity

We have four sources of direct funding: government operational and capital funding, advertising revenue, specialty services revenue and financing and other income.

50. 4 50. 7

41. 2 39. 6

35. 3 37. 8

269. 4 291. 0

0

50

100

150

200

250

300

350

400

450

2012 2011

Revenue and Sources of Funds for Three Months Ended September 30

(in

million

s o

f d

olla

rs)

419.1396.3

156. 5 161. 4

85. 2 81. 5

68. 0 65. 3

572. 4 568. 9

0

100

200

300

400

500

600

700

800

900

1,000

2012 2011

Revenue and Sources of Funds for Six Months Ended September 30

(in

million

s o

f d

olla

rs) 877.1882.1

For quarter and year-to-date variance analysis, see Section 3. Results and Outlook.

Government Funding

For the second quarter of 2012−2013, government funding represented approximately 68 per cent of total revenue and sources of funds. This included $36.6 million of amortization of deferred capital funding compared to $55.4 million in the first quarter, as a result of both accelerated depreciation on our remaining analogue transmission assets, and impairment related to the cessation of shortwave transmission of RCI programming.

The federal government announced funding reductions in its Federal Budget 2012. Our share of this reduction will be $115 million annually by 2014−2015. This includes the elimination, over that same period, of the $60 million in one-time funding for Canadian programming received since 2001. By the end of the current fiscal year, our operating appropriation is expected to be $999.5 million, a $27.8 million reduction in our operating appropriation for 2012−2013. This reduction grows to $69.6 million in 2013−2014, and to the full reduction of $115.0 million by 2014−2015.

Advertising Revenue

We generate revenue by selling advertising on our conventional television broadcasts and on other platforms. In the second quarter of 2012−2013, advertising accounted for approximately 13 per cent of our total revenue and sources of funds.

The proportion of advertising revenue in the second quarter is normally lower than in the first quarter, reflecting the seasonality of the broadcast schedule.

Government Funding Financing and other income Specialty Services Advertising



Specialty Services Revenue

Specialty services, which include subscription and advertising revenue from CBC News Network, bold, documentary, Explora, ARTV and the Réseau de l’information de Radio-Canada (RDI), generated approximately 10 per cent of total revenue and sources of funds in the second quarter of 2012−2013.


Financing and other income, which includes contributions from the LPIF and from activities such as program sales, merchandising activities, rental of mobile broadcasting vehicles to external parties, rental of real estate assets and leasing of space at our transmission sites, accounted for approximately 9 per cent of total revenue and sources of funds in the second quarter. Included in these funds was $11.8 million of LPIF contributions in the second quarter of 2011−2012. The fund will be completely eliminated by August 31, 2014.

Borrowing Authority

The Broadcasting Act, subsection 46.1, confers on CBC/Radio-Canada the authority to borrow as may be authorized by Parliament, subject to the approval of the Minister of Finance. Section 54 (3.1) of the Act requires that our borrowing authority be included in our corporate plan for the approval of the Minister of Finance.

The confirmation of the annual borrowing authority is currently pending and any borrowings will need to be individually approved. Guidelines established by the Department of Finance limit our borrowing activities to short-term initiatives with a quick payback period. Borrowing to meet working capital purposes is prohibited.

Under the Broadcasting Act, subsection 47(1), we are an agent of the Crown and therefore have the constitutional immunities, privileges and prerogatives that are enjoyed by the Crown. The Crown is also fully liable and financially exposed for all our actions and decisions while we are operating within our mandate. In other words, our assets and liabilities are the assets and liabilities of the Government.



3. Results and Outlook

3.1 Results

Summary – Net Results


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

Revenue 126,970 128,076 (0.9) 309,675 308,221 0.5

Expenses (384,829) (389,573) (1.2) (886,263) (861,188) 2.9

Government funding 269,377 291,008 (7.4) 572,425 568,890 0.6

N et result s bef ore non-

operat ing it ems 11,518 2 9 ,511 ( 6 1.0 ) ( 4 ,16 3 ) 15,9 2 3 ( 12 6 .1)

Non-operat ing items

Dilut ion (loss) gain from merger

transaction - (13,476) N/M - 25,775 N/M

Dividend income from merger

transaction - - N/A - 5,094 N/M

Net (loss) gain on disposal of property

and equipment (628) 37 N/M (1,124) (1,444) 22.2

N on- operat ing it ems ( 6 2 8 ) ( 13 ,4 3 9 ) 9 5.3 ( 1,12 4 ) 2 9 ,4 2 5 ( 10 3 .8 )

N et result s f o r t he period 10 ,8 9 0 16 ,0 72 ( 3 2 .2 ) ( 5,2 8 7) 4 5,3 4 8 ( 111.7)

N/A = Not applicable

N/M = Not meaningful


Net results before non-operating items for the second quarter of 2012−2013 amounted to $11.5 million, a decrease of $18.0 million compared to the same quarter of the previous fiscal year. Revenue decreased by $1.1 million (0.9 per cent), expenditures by $4.7 million (1.2 per cent), and government funding recognized in income by $21.6 million (7.4 per cent).

On a year-to-date basis, a loss of $4.2 million was incurred before non-operating items, compared to income of $15.9 million for the first six months of 2011−2012. These results are in line with year-to-date plans, and include the financial effect of certain one-time restructuring measures we are implementing in response to the financial pressures we will be facing over the next three years. The following pages provide further detail and explanation of the net results for the quarter and the year-to-date.



Revenue


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

A dvert ising

English Services 27,328 28,657 (4.6) 102,146 110,097 (7.2)

French Services 23,056 22,047 4.6 54,347 51,345 5.8

50,384 50,704 (0.6) 156,493 161,442 (3.1)

Specialt y services

CBC News Network 20,982 20,056 4.6 42,940 40,921 4.9

RDI 13,187 12,945 1.9 27,952 27,026 3.4

bo ld 1,022 954 7.1 2,070 1,971 5.0

Explora 404 - N/A 641 - N/A

documentary 1,466 1,380 6.2 2,987 2,784 7.3

ARTV 4,202 4,286 (2.0) 8,597 8,840 (2.7)

41,263 39,621 4.1 85,187 81,542 4.5

F inancing and o t her income

English Services 15,680 14,509 8.1 27,619 25,321 9.1

French Services 11,524 10,936 5.4 22,147 18,440 20.1

Corporate Services 8,119 12,306 (34.0) 18,229 21,476 (15.1)

35,323 37,751 (6.4) 67,995 65,237 4.2

TOTA L 12 6 ,9 70 12 8 ,0 76 ( 0 .9 ) 3 0 9 ,6 75 3 0 8 ,2 2 1 0 .5



Compared to the same periods in 2011−2012, revenue decreased by $1.1 million (0.9 per cent) in the second quarter and increased by $1.5 million (0.5 per cent) in the first six months of the fiscal year.

Advertising

Overall, advertising revenue in the second quarter of 2012−2013 was comparable to the same three months of 2011−2012. English Services’ advertising revenue decreased by $1.3 million (4.6 per cent) this year, largely because three pre-season hockey games were aired in 2011−2012 while none were aired in 2012−2013 because of the NHL lockout. French Services’ advertising revenue grew by $1.0 million (4.6 per cent). Increased revenue from successful new platforms, mostly Tou.tv and mobility, as well as growth in conventional advertising revenue, in line with Strategy 2015 expectations, are the main factors in this increase.

On a year-to date basis, advertising revenue decreased by $4.9 million (3.1 per cent) compared to the first six months of 2011−2012. The $8.0 million (7.2 per cent) decrease in English Services’ advertising revenue was mostly attributable to stronger audiences and revenues during the 2011−2012 hockey playoffs because a Canadian team, the Vancouver Canucks, reaching the Stanley Cup finals. French Services’ advertising revenue increased by $3.0 million (5.8 per cent). As mentioned above, this is a result of the success of new platforms and growth in conventional advertising revenue.



Specialty services

Specialty services revenue, which includes advertising and subscriber revenue, increased by $1.6 million (4.1 per cent) in the second quarter of 2012−2013 and by $3.6 million (4.5 per cent) in the first six months of 2012−2013 compared to the same periods last year.

In the second quarter, CBC News Network’s advertising revenue was higher by $0.9 million (4.6 per cent) as a result of increased advertising rates as CBC News Network’s audience grew.

CBC News Network is widely available across Canada, and is now in 11.3 million cable and satellite homes (compared to 11.2 million in September 2011). On a year-to-date basis, this growth in subscribers translated into increased revenue of $0.4 million. Advertising revenue also grew, by $1.6 million, due to increased sales and stronger advertising rates.

On a year-to-date basis, RDI revenues increased by $0.9 million (3.4 per cent). This was mostly due to a growth in subscribers as a result of the move from analogue transmission, as well as higher advertising sales.


For the quarter ending September 30, 2012, financing and other income decreased by $2.4 million (6.4 per cent) over the same period last year. This decrease was largely due to lower LPIF revenues of $1.1 million recognized for the quarter ended September 30, 2012, compared to the same period last year, as a result of the reduction of LPIF contributions to 1 per cent of Broadcast Distribution Undertakings (BDU) revenues effective September 1, 2012. Other non-recurring items also contributed to this decrease, which was partially offset by higher income received from facility rentals, program sales and commercial production in English and French Services.

On a year-to-date basis, increases in English and French Services financing and other income were greater than decreases in Corporate Services, resulting in an overall increase of $2.8 million (4.2 per cent). In addition to the areas of increased income mentioned above, English Services’ revenue also grew on a year-to-date basis as a result of a new agreement for digital services related to the NHL playoffs.



Operating Expenses


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

Television, rad io and new

med ia services

English Services 178,449 181,188 (1.5) 429,701 431,112 (0.3)

French Services 141,239 144,836 (2.5) 299,965 302,813 (0.9)

319,688 326,024 (1.9) 729,666 733,925 (0.6)

Specialt y services

CBC News Network 15,658 17,061 (8.2) 31,482 32,125 (2.0)

RDI 10,111 9,971 1.4 20,317 21,711 (6.4)

bo ld 779 1,598 (51.3) 1,352 2,484 (45.6)

Explora 663 - N/A 1,950 - N/A

documentary 936 1,037 (9.7) 1,853 1,812 2.3

ARTV 3,604 4,139 (12.9) 6,988 7,081 (1.3)

31,751 33,806 (6.1) 63,942 65,213 (1.9)

Transmission, distribut ion and

collect ion 23,285 19,531 19.2 70,595 39,171 80.2

Corporate management 2,385 2,389 (0.2) 5,221 5,599 (6.8)

Payments to private stat ions 638 528 20.8 1,272 1,299 (2.1)

Finance costs 8,021 8,390 (4.4) 15,953 16,711 (4.5)

Gain on investment in associate (939) (1,095) 14.2 (386) (730) 47.1

TOTA L 3 8 4 ,8 2 9 3 8 9 ,573 ( 1.2 ) 8 8 6 ,2 6 3 8 6 1,18 8 2 .9



Operating expenses for the three months ended September 30, 2012 were $384.8 million, a decrease of $4.7 million (1.2 per cent) compared to the second quarter of 2011−2012. On a year-to-date basis, expenditures of $886.3 million increased by $25.1 million (2.9 per cent) compared to the same period in 2011−2012.



Television, radio and new media services

English Services’ expenditures of $178.4 million for the second quarter decreased by $2.7 million (1.5 per cent) compared to the second quarter of 2011−2012. This variance is due in part to the Gemini awards being broadcast in March in 2013; in 2012 they were aired within the second quarter, in August 2011. An overall reduction in spending in response to the Federal Budget 2012 also contributed to the decrease.

French Services’ expenditures of $141.2 million for the second quarter were $3.6 million (2.5 per cent) lower than those of the same period last fiscal year. This variance is mostly due to a decrease in television and radio programming costs. The transformation of RCI from a short-wave and web radio service into a web-only international service also contributed to the decrease in expenses. In addition, expenditures for network circuits were lower for both the English and French Services following the implementation of the Next Generation Converged Network.

On a year-to-date basis, English Services’ expenditures decreased by $1.4 million (0.3 per cent) in comparison to the same period in 2011−2012. This decrease is partly explained by special programming and projects that occurred in the first six months of 2011−2012. In addition, expenditures related to network circuits are lower following the implementation of the Next Generation Converged Network. This was partly offset by an investment in the regions as planned in Strategy 2015 and by restructuring costs incurred as a result of recent budget reductions.

For the first six months, French Services’ expenditures decreased by $2.8 million (0.9 per cent) compared to the first half of 2011−2012. As explained above, the reduction in television and radio programming costs, the transformation of RCI and the implementation of the Next Generation Converged Network were the main factors contributing to the year-to-date decrease; however, this was partly offset by increased costs incurred in renting out facilities.

Specialty services

Specialty services’ expenditures of $31.8 million for the second quarter decreased by $2.1 million (6.1 per cent) compared to the second quarter of 2011−2012. The following were the main changes in specialty services expenses in the second quarter of the current year compared to the same period last year:

Expenses for CBC News Network decreased by $1.4 million (8.2 per cent) due to lower programming spending.

Reduced program acquisitions and decreased amortization of programming for bold as a result of the planned sale of the channel explain the decrease of $0.8 million (51.3 per cent).

A new specialty service, Explora, was launched on March 28, 2012.

In addition to the above, on a year-to-date basis, the decrease of $1.3 million (1.9 per cent) in specialty services expenses was partly related to a decrease in RDI’s expenses of $1.4 million (6.4 per cent) due to lower programming costs.

Other operating expenses

The expenditure increase of $3.8 million (19.2 per cent) for the second quarter and of $31.4 million (80.2 per cent) for the first half of the fiscal year for transmission, distribution and collection activities was primarily due to the cessation of shortwave transmission of RCI programming and the acceleration of the shutdown of remaining analogue TV transmitters. This resulted in additional depreciation, impairment charges and the recognition of decommissioning costs.

For the second quarter of 2012−2013, other operating expenses remained relatively stable in comparison to the same quarter of 2011−2012.



Government Funding


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

Parliamentary appropriat ions for

operat ing expenditures 231,819 257,664 (10.0) 478,432 502,433 (4.8)

Parliamentary appropriat ions for

working capital 1,000 999 0.1 2,000 1,999 0.1 Amort izat ion of deferred capital

funding 36,558 32,345 13.0 91,993 64,458 42.7

TOTA L 2 6 9 ,3 77 2 9 1,0 0 8 ( 7.4 ) 572 ,4 2 5 56 8 ,8 9 0 0 .6


Parliamentary appropriations for operating expenditures decreased by $25.8 million (10.0 per cent) in the second quarter of 2012−2013 compared to the same period of the previous fiscal year. On a year-to-date basis, the decrease was $24.0 million (4.8 per cent). Parliamentary appropriations are recognized based on expected needs according to forecasted revenues and forecasted expenditures for the period.

By fiscal year-end 2013, the operating appropriation recognized as revenue is expected to be $999.5 million, a $27.8 million reduction in our operating appropriation in accordance with Federal Budget 2012.

Capital funding received is recorded as deferred capital funding. It is amortized and recognized as revenue over the same periods as the related property and equipment, and intangible assets are used in CBC/Radio-Canada’s operations. The increase of $4.2 million (13.0 per cent) in the second quarter and of $27.5 million (42.7 per cent) in the first six months of 2012−2013 was mainly due to the accelerated depreciation due to the shutdown of our remaining analogue TV assets by July 31, 2012.

Non-Operating Items


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

Dilut ion (loss) gain from merger

transaction - (13,476) N/M - 25,775 N/M

Dividend income from merger

transaction - - N/A - 5,094 N/M

Net (loss) gain on disposal of property

and equipment (628) 37 N/M (1,124) (1,444) 22.2

N on- operat ing it ems ( 6 2 8 ) ( 13 ,4 3 9 ) 9 5.3 ( 1,12 4 ) 2 9 ,4 2 5 ( 10 3 .8 )




Non-operating losses of $1.1 million for the first six months of 2012−2013, including $0.6 million this quarter, were recorded on equipment disposals as we continue to update our transmission and technical equipment. The non-operating items in 2011−2012 were mostly attributed to a non-cash dilution gain and dividend income from the merger transaction of Sirius Canada/CSR, in which we are invested.



Total Comprehensive Income (loss)


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

N et result s f o r t he period 10 ,8 9 0 16 ,0 72 ( 3 2 .2 ) ( 5,2 8 7) 4 5,3 4 8 ( 111.7)

Ot her comprehensive income

( loss)

Actuarial losses on def ined benefit

plans (329,077) (195,112) (68.7) (310,079) (133,816) (131.7)

Net unrealized gain on available-for-

sale f inancial assets - - N/A - 94 N/M

Reclassif icat ion to income of net

unrealized gain on available-for-sale

f inancial assets arising from merger

transaction - - N/A - (5,094) N/M

Total other comprehensive loss (329,077) (195,112) (68.7) (310,079) (138,816) (123.4)

Tot al comprehensive loss f o r

t he period ( 3 18 ,18 7) ( 179 ,0 4 0 ) ( 77.7) ( 3 15,3 6 6 ) ( 9 3 ,4 6 8 ) ( 2 3 7.4 )




Total other comprehensive losses of $329.1 million were recognized in the second quarter of 2012−2013, compared to other comprehensive losses of $195.1 million in the same quarter last year. These losses are due to non-cash fluctuations in the value of our pension plans’ obligations and assets. Their values fluctuate significantly when actual results or interest rates differ from actuarial assumptions. Actuarial gains and losses are immediately recognized in other comprehensive income in each reporting period.

The $329.1 million of actuarial losses on defined benefit plans this quarter was mainly due to:

A decrease in the discount rate applied to the pension obligation from 4.25 per cent to 3.75 per cent, contributing to actuarial losses of $396.8 million; offset by

A $67.7 million gain arising from a higher actual return on plan assets (2.9 per cent) than expected (1.5 per cent).

On a year-to-date basis, the actuarial losses of $310.1 million was also due to the decrease in discount rate applied to pension obligations, offset partially by higher than expected returns on plan assets of 4.7 per cent actual compared to an expected 3.0 per cent.

In the second quarter of 2011−2012, the other comprehensive loss of $195.1 million was primarily due to a decrease in the discount rate on the pension obligation, partially offset by higher than expected returns on plan assets. On a year-to-date basis, the 2011−2012 actuarial losses of $133.8 million were also due to the lower discount rate applied to the pension obligations, partially offset by higher than expected returns on plan assets.

We expect that macroeconomic factors will continue to impact discount rates and asset returns used in determining the actuarial gains and losses during the remainder of 2012−2013.

Further information on our pension plan is provided in Note 11 of our financial statements.



3.2 Financial Condition, Cash Flow and Liquidity

Our main sources of liquidity are parliamentary appropriations for operating, capital and working capital requirements, and commercial activities such as advertising. As a result of Federal Budget 2012, we will see our annual appropriations reduced by $115.0 million over three years, with an initial reduction of $27.8 million confirmed for 2012−2013. This will be followed by a $69.6 million reduction scheduled for 2013−2014 prior to the full reduction of $115.0 million in 2014−2015. Additionally, $47.1 million in funding from LPIF will be phased out by August 31, 2014.

In response to these reductions, one-time restructuring costs, and additional financial pressures inherent in funding the business and pursuing Strategy 2015, we are implementing a financial plan that will allow us to continue to match our planned operating expenses with available financial resources. Our financial plan includes sourcing new television and radio advertising to partially offset the reduction in federal appropriations, combined with reducing operating and capital requirements through various cost reduction initiatives. The elimination of LPIF funding is also expected to result in a decrease in certain programming.

Our cash flows from operating, investing, and financing activities for the three and six months ended September 30 are summarized in the following table. Our cash balance at September 30 2012 was $48.5 million, compared to $64.3 million at March 31, 2012.

Cash Position


2 0 12 2 0 11 % change 2 0 12 2 0 11 % change

C ash - beg inning o f t he period 72 ,512 58 ,153 2 4 .7 6 4 ,2 77 6 3 ,2 2 4 1.7

Cash from (used in) operat ing act ivit ies (24,441) 25,236 (196.8) (5,016) 18,266 (127.5)

Cash used in f inancing act ivit ies (3,439) (3,439) - (29,135) (29,135) -

Cash from investing act ivit ies 3,865 3,068 26.0 18,371 30,663 (40.1)

Net change (24,015) 24,865 (196.6) (15,780) 19,794 (179.7)

C ash - end o f t he period 4 8 ,4 9 7 8 3 ,0 18 ( 4 1.6 ) 4 8 ,4 9 7 8 3 ,0 18 ( 4 1.6 )




Cash from (used in) operating activities

Cash used in operating activities was $24.4 million this quarter, a decrease of $49.7 million compared to the second quarter of last year. This change in cash from operations was primarily the result of using more cash to fund working capital requirements of $21.3 million combined with lower operating results.



Cash used in financing activities

Cash outflows for financing activities were consistent with 2011−2012, in both the second quarter and on a year-to-date basis. Cash used of $3.4 million in the second quarter each year related to meeting obligations under finance leases. Outflows totalled $29.1 million on a year-to-date basis for semi-annual repayments of the Toronto Broadcasting Centre bonds, payments of notes payable, and meeting obligations under finance leases.

Cash from investing activities

Investing activities generated cash of $3.9 million this quarter, compared with $3.1 million of cash from investing activities in the second quarter of 2011−2012. On a year-to-date basis, cash generated of $18.4 million was lower than 2011−2012 cash from investing activities of $30.7 million. The decrease in cash generated overall from investing activities on a year-to-date basis was primarily due to last year’s activities including a $9.9 million return of capital on our investment in Sirius/CSR, and a $5.1 million dividend received in connection with the Sirius/CSR merger. Our core business investment in capital remained comparable with last year, with year-to-date parliamentary appropriations received of $49.6 million and acquisitions of new property, equipment and intangible assets totalling $35.3 million.



3.3 Outlook and Risk Update

In the second quarter, we continued to implement our three-year financial plan announced on April 4, 2012. We developed budget measures to deal with the CRTC decision to discontinue the Local Programming Improvement Fund (LPIF) by August 31, 2014, and contingency plans for the disrupted NHL season and we prepared for our licence renewal hearings scheduled for November 2012.

Strategy 2015 has been adjusted to reflect the end of the LPIF, from which we drew over $47.1 million last year to improve service for viewers in 20 smaller markets. This adjustment minimizes the impact on programming and protects the core elements of Strategy 2015. Some of the enhancements implemented to improve services and funded through the LPIF will be maintained. However, given the magnitude of the reduction, other priorities will be affected. While Strategy 2015 sets out our vision for the future of Canada’s national public broadcaster, we need a flexible regulatory framework as part of the CRTC licence renewals to enable us to respond to the evolving broadcasting environment and preferences of Canadians.

We also face other potential pressures. The success of our financial plan will depend heavily on the strength of the advertising market, our overall revenue performance, the net impact of the NHL labour disruption and the CRTC’s approval of our application for a licence change to introduce advertising/sponsorships for CBC Radio 2 and Espace musique. As well, there has been no confirmation that salary inflation funding, which the federal government has not funded since 2010−2011, will resume in 2013−2014 and future years. We continue to closely monitor the financial plan and adjust as required.

Key factors that could impact our results are summarized in the following table, which outlines changes in risks since the March 31, 2012 Annual Report and the June 30, 2012 Quarterly Report. A full discussion of risks and mitigation strategies is included in the Annual Report.

Key Risk Update

1. Budget Concerns

a. Strategy, Budget and Planning

There is a risk that the objectives of Strategy 2015 will not be met due to inadequate financial resources. Strategy 2015 requires the redirection of funds and resources and an increase in revenues to succeed. The Federal Budget 2012 appropriation reduction, other financial pressures and the recent decision to phase out the Local Programming Improvement Fund (LPIF) challenge our ability to achieve the objectives of Strategy 2015.

Budget measures to manage the loss of LPIF contributions have been developed and integrated into the three-year financial plan. While the plan is being closely monitored and adjusted as required, there are significant challenges ahead.

b. Local Programming Improvement Fund (LPIF)

The LPIF is a critical source of funding for CBC/Radio-Canada and provided $47.1 million in funding for the broadcast year ended August 31, 2012. The phased in elimination by August 31, 2014 will have a negative impact on our programming.

The CRTC decision to end LPIF contributions by August 31, 2014 will result in a decrease in programming. Some of the enhancements to local news shows funded through the LPIF will be maintained. However, given the magnitude of the reduction, other priorities will be affected, including reductions in local and national programming, reductions to communication and promotional budgets and plans for four new local radio stations will be scaled back to digital offerings only.



Key Risk Update

c. Advertising Revenue −Impact of National Hockey League (NHL) Lockout

The NHL has locked out the players and the hockey season is disrupted. There is currently no timetable for the resumption of the season.

The disrupted NHL season has impacted advertising revenues. Contingency plans have been developed for replacement programming and cost containment to address anticipated lower revenues.

2. Regulatory Issues

a. Licence Renewal

Licence renewal hearings began on November 19, 2012. The outcome of these hearings will set the terms and conditions of our CRTC licence and could determine whether we are able to meet the objectives of Strategy 2015.

We are seeking: (1) a regulatory framework that will give us more agility and flexibility to reflect the realities of our current broadcasting environment and (2) the ability to generate new revenue by adding advertising and sponsorships to CBC Radio 2 and Espace musique



4. Financial Reporting Disclosure

4.1 Critical Accounting Estimates and Future Accounting Standards

For a description of future changes in accounting standards, see Note 2 of the condensed consolidated financial statements.

4.2 Transactions with Related Parties

The Corporation, through the normal course of business, is involved in transactions with related parties. See Note 17 of the condensed consolidated financial statements.



5. Statement of Management Responsibility by Senior Officials

Management is responsible for the preparation and fair presentation of these condensed consolidated quarterly financial statements in accordance with IAS 34: Interim Financial Reporting, and for such internal controls as management determines is necessary to enable the preparation of condensed consolidated quarterly financial statements that are free from material misstatement. Management is also responsible for ensuring all other information in this quarterly financial report is consistent, where appropriate, with the condensed consolidated quarterly financial statements.

Based on our knowledge, these unaudited condensed consolidated quarterly financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Corporation, as at the date of and for the periods presented in the condensed consolidated quarterly financial statements.

Hubert T. Lacroix,

President and Chief Executive Officer

Suzanne Morris,

Vice-President and Chief Financial Officer

Ottawa, Canada November 21, 2012

Condensed

A SSET S

C urrent Cash

Trade and

Programm

M erchand

Prepaid e

Promisso

Net invest

Derivat ive

Assets cla

Lo ng - t erm

Property

Intangible

Assets un

Promisso

Net invest

Deferred

Investmen

T OT A L A SS

LIA B ILIT IES

C urrent

Accounts

Provision

Pension p

Bonds pa

Obligat io

Notes pay

Deferred

Opt ion lia

Derivat ive

Lo ng - t erm

Deferred

Pension p

Bonds pa

Obligat io

Notes pay

Deferred

Eq uit y(Def icit) re

Total equit

Non-contro

T OT A L EQU

T OT A L LIA B

Commitments (

The accompany

Con

(in thousands o

Consolidated Fin

d other receivables (N

ming (NOTE 5)

dising inventory

expenses (NOTE 6)

ry notes receivable

tment in f inance lease

e f inancial instruments

assif ied as held for sa

and equipment (NOTE

e assets (NOTE 8)

nder f inance lease

ry notes receivable

tment in f inance lease

charges

nt in associate (NOTE

ET S

s payable and accrued

ns (NOTE 12)

plans and employee-re

ayable

ns under f inance lease

yable

revenue

ability

e f inancial instruments

revenue

plans and employee-re

ayable

ns under f inance lease

yable

capital funding (NOT

etained earnings

ty att ributable to the C

olling interests

IT Y

B ILIT IES A N D EQU

NOTE 19)

ying notes form an inte

densed

of Canadian dollars)

nancial StatemenCBC/Radio

OTE 4)

(NOTE 18)

ale (NOTE 7)

E 7)

9)

liabilit ies (NOTE 10)

elated liabilit ies (NOTE

e

(NOTE 18)

elated liabilit ies (NOTE

e

TE 14)

Corporat ion

U IT Y

egral part of the cond

Consol

nts o-Canada Secon

E 11)

E 11)

ensed consolidated f i

lidated (un

nd Quarter Financ

CBC/Ra

inancial statements.

Statemeaudited

cial Report 2012

adio-Canada S

S

ent of Fd)

-2013

Second Quar

Sep t ember 3 0 , 2 0

48,4

143,7

214,5

9

52,9

2,2

2,5

1

1,8 4 6 7,58

991,9

22,6

44,2

48,7

52,7

21,3

6,5 1,18 8 ,3 2

1,6 55,9 0

89,6

45,7

121,4

20,3

10,2

7,8

4,4

1,8

3 0 1,6 5

2,7

626,0

282,8

48,9

116,0

531,6 1,6 0 8 ,2 6

(254,4 ( 2 54 ,4 7

4 6

( 2 54 ,0 1

1,6 55,9 0

inancia

rter Financial

0 12 M arch 3

497

772

567

919

60

29

575

174

887 8 0 5

958 1,

82

42

779

770

03

594 2 8 1,2 4

0 8 1,76

42

730

447

30

39

870

454

875

70 57 3 3

797

071

877

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02 6 5 1,3

474) 74 ) 6

6 0

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0 8 1,76

l Positio

32

Report 2012-

1, 2 0 12

64,277

177,331

166,104

811

113,370

2,158

2,499

133

234 2 6 ,9 17

047,988

28,435

48,242

49,903

54,077

7,806

6,208 4 2 ,6 59

6 9 ,576

124,638

39,062

129,850

20,093

9,945

7,794

3,511

1,875

11 3 6 ,779

2,587

333,207

288,533

54,206

118,885

574,027 71,4 4 5

60,996 6 0 ,9 9 6

3 56

6 1,3 52

6 9 ,576

on

-2013

CBC/Ra

33

adio-Canada

(in thousands o

R EV EN U E (Advert is

Specialt

Other inc

Financin

EX PEN SESTelevisio

Specialt

Transmis

Corpora

Payment

Finance

Gain on

GOV ER N M EParliame

Parliame

Amort iz

N et result s

N ON - OPER ADilut ion

Dividend

Net (los

N et result s f

N et result s aThe Cor

Non-con

The accompany

Co

Op erat ing lo

Second Quar


N OT E 13 )sing

y services

come

ng income

on, radio and new med

y services

ssion, distribut ion and

ate management

ts to private stat ions

costs

investment in associat

EN T F U N D IN G ( Nentary appropriat ion f

entary appropriat ion f

zat ion of deferred cap

bef o re no n- o p era

A T IN G IT EM S(loss) gain from merg

d income from merger

ss) gain on disposal of

f o r t he p er io d

at t r ib ut ab le t o :rporat ion

ntrolling interests


ondense

o ss b ef o re Go ver

CBC/Radio

rter Financial

dia services costs

d collect ion (NOTE 7)

te

OT E 14 )or operat ing expendit

or working capital

ital funding

at ing i t ems

ger transact ion

t ransact ion

f property and equipm


ed Cons

nment f und ing and

o-Canada Secon

Report 2012

tures

ment


solidate(un

d no n- o p erat ing i

nd Quarter Financ

-2013

5

4

12 6

3

2

3 8 4

( 2 57

2

2 6 9

1

10


d Statenaudited

Three mo nt

it ems

Condencial Report 2012

2 0 12

50,384

41,263

33,170

2,153

6 ,9 70 12

19,688 3

31,751

23,285

2,385

638

8,021

(939)

4 ,8 2 9 3 8

7,8 59 ) ( 2 6

231,819 2

1,000

36,558

9 ,3 77 2 9

11,518 2

-

-

(628)

( 6 2 8 ) ( 13

0 ,8 9 0 1

10,859

31

10,890

ment ofd)

t hs end ed Sep t em

nsed Consolidate-2013

2 0 11

50,704

39,621

35,424

2,327

8 ,0 76 3 0

26,024 7

33,806

19,531

2,389

528

8,390

(1,095)

9 ,573 8 8

6 1,4 9 7) ( 57

257,664 4

999

32,345

1,0 0 8 57

2 9 ,511

(13,476)

-

37

3 ,4 3 9 )

6 ,0 72

16,157

(85)

16,072

f Income

mb er 3 0 Six mo nt h

ed Financial State

2 0 12

156,493

85,187

63,495

4,500

0 9 ,6 75 3

729,666

63,942

70,595

5,221

1,272

15,953

(386)

8 6 ,2 6 3 8

76 ,58 8 ) ( 5

478,432

2,000

91,993

72 ,4 2 5 56

( 4 ,16 3 )

-

-

(1,124)

( 1,12 4 ) 2

( 5,2 8 7) 4

(5,391)

104

(5,287)

e (Loss)

hs ended Sep t emb

ements

2 0 11

161,442

81,542

60,582

4,655

0 8 ,2 2 1

733,925

65,213

39,171

5,599

1,299

16,711

(730)

8 6 1,18 8

52 ,9 6 7)

502,433

1,999

64,458

6 8 ,8 9 0

15,9 2 3

25,775

5,094

(1,444)

2 9 ,4 2 5

4 5,3 4 8

45,264

84

45,348

)

b er 3 0

Condensed

(in thousands o

C OM PR EHE

N et resu

Ot her coActuaria

Net unre

T o t al comp r

T o t al comp r

The Cor

Non-con

The accompany

Reclassasset ar

Consolidated Fin


N SIV E IN C OM E (

lt s f o r t he p er iod

mp rehensive incoal losses on def ined be

ealized gain on availab

rehensive loss f o r

rehensive inco me

rporat ion

ntrolling interests


if icat ion to income of ising from merger tran

Co


( LOSS)

d

me ( lo ss)enefit plans (NOTE 11)

ble-for-sale f inancial as

r t he p er io d

( lo ss) at t r ib ut ab


net unrealized gain onnsact ion

ondenseComp

nts o-Canada Secon

)

ssets

le t o :


n available-for-sale f in

ed Consprehens

(un

nd Quarter Financ

CBC/Ra

(3

( 3 1

(3

(3


nancial

solidatedive Inco

nauditedThree mo nt

cial Report 2012

adio-Canada S

2 0 12

10,890

29,077)

-

-

8 ,18 7) ( 179

318,218) (

31

318,187) (1

d Statemome (Lod)

t hs end ed Sep t em

-2013

Second Quar

2 0 11

16,072

(195,112) (

-

-

9 ,0 4 0 ) ( 3 1

178,955) (

(85)

179,040) (

ment of oss)

mb er 3 0 Six mo nt h

rter Financial

2 0 12

(5,287)

(310,079)

-

-

15,3 6 6 ) ( 9

(315,470)

104

(315,366)

hs ended Sep t emb

34

Report 2012-

2 0 11

45,348

(133,816)

94

(5,094)

9 3 ,4 6 8 )

(93,552)

84

(93,468)

b er 3 0

-2013

CBC/Ra

35

adio-Canada

Balance as at J

Changes in pe

Net result

Actuarial

Balance at Sep

Balance as at J

Changes in pe

Net result

Actuarial

Balance at Sep

Balance as at M

Changes in pe

Net result

Actuarial

Balance at Sep

Balance as at M

Changes in pe

Net result

Actuarial

Net unreafinancial a

Reclassifgain on avarising fro

Balance at Sep

The accompany

(in thousands o

Co

(in thousands o

(in thousands o

Second Quar

June 30, 2012

riod

ts for the period

losses on defined ben

ptember 30, 2012

June 30, 2011

riod

ts for the period


ptember 30, 2011

March 31, 2012

riod

ts for the period


ptember 30, 2012

March 31, 2011

riod

ts for the period


alized gain on availablassets

ication to income of nevailable-for-sale finanom merger transaction

ptember 30, 2011

nying notes form an inte


ondense



CBC/Radio

rter Financial

nefit plans

Re

nefit plans

nefit plans

Re

nefit plans e-for-sale

et unrealized cial asset

n

tegral part of the conde

ed Conso

o-Canada Secon

Report 2012

(Deficit)Retained

earningTotco

63,744

10,859

(329,077)

(254,474)

etained earnings Totco

412,274

16,157

(195,112)

233,319

(Deficit)Retained

earningTotco

60,996

(5,391)

(310,079)

(254,474)

etained earnings Totco

321,871

45,264

(133,816)

-

-

233,319

densed consolidated fin

olidated (un

nd Quarter Financ

-2013

tal accumulated otheomprehensive income

-

-

-

-


-

-

-

-


-

-

-

-


5,000

-

-

94

(5,094

-

nancial statements.

Statemenaudited

Condencial Report 2012

r e

Total equity attribto the Corpo

6

1

(32

(254

r e


41

1

(19

233

r e


6

(

(31

(254

r e


32

4

(13

) (

233

Six months ende

Six months ende

ent of Ch)

Three months end

Three months end


utable oration

Non-c

3,744

0,859

9,077)

4,474)

utable oration

Non-c

2,274

6,157

5,112)

3,319

utable oration

Non-c

0,996

5,391)

0,079)

4,474)

utable oration

Non-c

6,871

5,264

3,816)

94

5,094)

3,319

ed September 30, 201

ed September 30, 201

hanges i

ded September 30, 20

ded September 30, 20

ed Financial State

controlling interests

429

31

-

460


2,432

(85)

-

2,347


356

104

-

460


2,263

84

-

-

-

2,347

12

11

n Equity

012

011

ements

Total

64,173

10,890

(329,077)

(254,014)

Total

414,706

16,072

(195,112)

235,666

Total

61,352

(5,287)

(310,079)

(254,014)

Total

329,134

45,348

(133,816)

94

(5,094)

235,666

y

Condensed

(in thousands o

C A SH F LOW

OPER A T IN GNet results

Adjustmen

Net lo

Intere

Finan

Depr

Amo

Depr

Impa

Loss

Dilut

Chan

Amo

Chan

Chan

Chan

Chan

Chan

Accre

M ovement

F IN A N C IN GRepaymen

Repaymen

Repaymen

Interest pa

IN V EST IN G Parliament

Acquisit io

Acquisit io

Return of

Proceeds

Collect ion

Collect ion

Dividend r

Interest re

C hang e in ca

C ash, b eg in

The accompany

Co

C ash, end o f

Chanthrou

Reclaf inanc

Consolidated Fin


W S FR OM ( U SED

G A C T IV IT IESs for the period

nts for:

oss (gain) on disposa

est revenue

nce costs

reciat ion of property a

rt izat ion of intangible

reciat ion of assets und

irment charge on prop

on investment in asso

ion loss (gain) f rom m

nge in deferred charge

rt izat ion of deferred c

nge in deferred operat

nge in deferred revenue

nge in pension plan ass

nge in pension plans an

nge in pension plans an

etion of promissory n

ts in working capital (

A C T IV IT IESnt of obligat ion under

nt of bonds

nt of notes

aid

A C T IV IT IEStary appropriat ions fo

on of property and equ

on of intangible assets

capital-investment in a

from disposal of prop

n of promissory notes

n of f inance lease recei

received

eceived

ash

ning o f t he p er iod


ondense

f t he p erio d

nge in fair value of f inaugh prof it and loss

assif icat ion to incomecial asset arising from


IN )

al of property and equ

and equipment

e assets

der f inance lease

perty and equipment

ociate

merger t ransaction

es

capital funding

ing appropriat ion

e [ long-term]

set

nd employee-related li

nd employee-related li

otes receivable

NOTE 16)

f inance lease

or capital funding (NO

uipment

s

associate

perty and equipment

receivable

ivables

d


ed Cons

ancial instruments desig

e of net unrealized gainm merger transact ion

nts o-Canada Secon

uipment

abilit ies [current]

abilit ies [ long-term]

OTE 14)


solidate(un

gnated as at fair value

n on available-for-sale

nd Quarter Financ

CBC/Ra

(

( 2

( 3

2

(2

3

( 2

7

4 8 inancial statements.

ed Statenaudited

T hree mo n

e

e

cial Report 2012

adio-Canada S

2 0 12

10,890

628

(2,153)

8,021

430 34,143

4,192

2,000

446

- (939)

-

(11,485)

(36,558)

(31,819)

105

-

(11,968)

(8,972)

(4)

18,602

4 ,4 4 1) 2

(2,451)

-

-

(988)

3 ,4 3 9 ) (

23,999

22,402) (

(1,251)

-

170

491

521

-

2,337

3 ,8 6 5

4 ,0 15) 2

72 ,512 5

8 ,4 9 7 8

ement ofd)nt hs end ed Sep t em

-2013

Second Quar

2 0 11

16,072

(37)

(2,327)

8,390

(1,409) 29,565

4,095

2,000

-

- (1,095)

13,476

(5,163)

(32,345)

(18,663)

418

(12,429)

(12,715)

1,025

(50)

36,428

5,2 3 6

(2,303)

-

-

(1,136)

3 ,4 3 9 ) (

25,000

(24,099)

(1,442)

-

235

457

485

-

2,432

3 ,0 6 8

4 ,8 6 5 (

58 ,153 6

8 3 ,0 18 4

f Cash F

Six mo nt hmb er 3 0

rter Financial

2 0 12

(5,287)

1,124

(4,500)

15,953

18 81,353

8,565

4,000

6,986

- (386)

-

(13,497)

(91,993)

-

210

-

1,104

(17,215)

(9)

8,558

( 5,0 16 )

(4,994)

(5,253)

(2,797)

(16,091)

2 9 ,13 5) (

49,568

(35,322)

(2,784)

-

210

973

1,032

-

4,694

18 ,3 71

15,78 0 )

6 4 ,2 77

4 8 ,4 9 7

Flows

hs end ed Sep t emb

36

Report 2012-

2 0 11

45,348

1,444

(4,655)

16,711

(1,524) 59,469

8,257

4,000

-

(5,094) (730)

(25,775)

(6,635)

(64,458)

-

263

(9,871)

(584)

1,964

(50)

186

18 ,2 6 6

(4,717)

(4,879)

(2,670)

(16,869)

( 2 9 ,13 5)

50,568

(39,787)

(2,233)

9,855

364

907

962

5,094

4,933

3 0 ,6 6 3

19 ,79 4

6 3 ,2 2 4

8 3 ,0 18

b er 3 0

-2013

CBC/Ra

37

adio-Canada

NotesStateSepte

(Canadian

(unaudited

1. G

CBC/Radfederal coaddress oCBC/Radboth the fe

As the natboth officiand its reg

These conDirectors

2. Si

A. State

The Corpo131.1 of thReportingthe Accou

B. Basis

Section 13and makeReports fo

These inte34 and thestatementupdate onMarch 31financial speriods prconsolidaannual co

Second Quar

s to the ments f

ember 3

n $)

d)

eneral

io-Canada (thorporate incomof the Corporaio-Canada is ederal and pr

tional public bal languagesgions to natio

ndensed conson Novembe

ignifican

ement of Co

oration prepahe Financial A

g (IAS 34), as unting Standa

s of Prepar

31.1 of the Fie public quartefor Crown Cor

erim consoliderefore do nots. These inten the latest co, 2012. Accorstatements. Tresented. Theted financial s

onsolidated fin

CBC/Radio

rter Financial

Condenfor the T30, 2012

Informa

he Corporatiome tax by virtuation’s registenot subject to

rovincial level

broadcaster, t, delivering d

onal and regio

solidated finar 21, 2012.

nt Acco

ompliance

ared these conAdministrationissued by the

ards Board (Ac

ration

inancial Admierly financial rporations.

ated financiaot include all derim condenseomplete set ofrdingly, they s

The interim coe accounting statements arnancial statem

o-Canada Secon

Report 2012

nsed CoThree a2

ation

on) is a federaue of the Inco

ered office is 1o any provincs.

the Corporatioistinct and pre

onal audience

ncial stateme

unting P

ndensed conson Act and Intee InternationacSB).

inistration Actreports in com

l statements adisclosures thed consolidatf audited annushould be reaondensed conpolicies usedre consistent

ments.

Notend Quarter Financ

-2013

onsolidand Six M

al Crown Corpome Tax Act (181 Queen Stcial corporate

on provides redominantly C

es.

ents have bee

Policies

solidated finaernational Accal Accounting

t requires thatmpliance with

are presentedat would othe

ted financial sual financial sd in conjunctisolidated fina in the preparwith those dis

es to the Condencial Report 2012

ated FinMonth P

poration domi(Canada) andtreet, Ottawa income taxes

radio, televisioCanadian pro

en authorized

s

ncial statemecounting StanStandards Bo

t most parenth the Standard

d on a condenerwise be reqstatements arstatements foion with the aancial statemeration of thesesclosed in the


nancial Periods

iciled in Canad the Regulati

ON K1P 1K9s but is subjec

on and new mogramming to

for issuance

ents in accordndard 34 Interoard (IASB) a

Crown Corpod on Quarterly

nsed basis asuired in a full e intended tor the year endudited annuaents are unaue interim conde Corporation

ed Financial State

Ended

ada and subjeons thereto. T

9. ct to sales tax

media servicesreflect Canad

by the Board

dance with Seerim Financial and as adopte

orations preply Financial

s permitted byset of financi provide an ded

al consolidatedudited for all densed

n’s last audited

ements

ect to The

xes at

s in da

d of

ection led by

are

y IAS ial

d

d

Notes to the

2. S

C. Futu

The Corpoannual imfollowing impact of

IFRS 7 A

IFRS 7 waincluding are effecti

IFRS 9 F

IFRS 9, iscurrent IAbased on contractuaIASB pubadditional

IFRS 10

IFRS 10 rSpecial PpreparatioStandard consolidaJanuary 1

IFRS 11

IFRS 11, Controlledobligationstandard ato accounbeginning

IFRS 12

IFRS 12 aunconsoliof, and risits financiaperiods be

IFRS 13

IFRS 13 ddisclosuremeasuremannual pe

e Condensed Con

ignifican

re Account

oration has remprovements 2

may have an each pronoun

Amendments

as amended ithe possible eive for annua

Financial Inst

ssued in NoveAS 39 Financia

how an entityal cash flow clished amend disclosures t

Consolidate

replaces IAS 2Purpose Entitieon of consolidestablishes ated financial s, 2013.

Joint Arrang

issued in Mayd Entities - Nos of a joint araddresses inc

nt for interestsg on or after J

Disclosure o

applies to entidated structu

sk associated al position, fineginning on o

Fair Value M

defines fair vaes about fair vments or discleriods beginni

nsolidated FinanCBC/Radio

nt Acco

ing Change

eviewed new 2009−2011 thimpact on the

ncement on it

s to IFRS 7 F

in October 20effects of anyl reporting pe

struments

ember 2009 aial Instrumenty manages itscharacteristicsdments that dto annual per

ed Financial

27 Consolidaies. The objecdated financiaa single basis statements. IF

gements

y 2011, superon-monetary Crrangement, rconsistenciess in jointly conanuary 1, 201

of Interests i

ities that havered entity. It awith, the Cor

nancial perforor after Janua

Measuremen

alue, sets out value measurlosures abouting on or afte

cial Statementso-Canada Secon

ounting P

es

and revised ahat have beene Corporationts consolidate

Financial Ins

010 to providey residual riskeriods beginni

and amended ts: Recognitios financial inss of its financiefer the mand

riods beginnin

l Statements

ated and Sepactive of IFRS 1al statements

of control to FRS 10 will b

rsedes IAS 31Contributionsather than its

s in the reportntrolled entitie13.

in Other Ent

e an interest iaims at enablrporation’s intrmance and cry 1, 2013.

nt

in a single frarements. IFRSt fair value mer January 1, 2

nd Quarter Financ

CBC/Ra

Policies

accounting prn issued but an. The Corpored financial st

struments: D

e additional dis that the tranng after July

in October 20on and Measu

truments in thial assets anddatory effectivng on or after

s

arate Financia10 is to estabwhen an entitdetermine whecome effect

1 Interests in s by Venturers legal form asting of joint ares. IFRS 11 w

tities

n a subsidiaring users of fterest in othercash flows. IF

amework for mS 13 applies teasurement. T2013.

cial Report 2012

adio-Canada S

s (Contin

ronouncemenare not yet effration is curretatements, ex

Disclosures

isclosure on tnsferring entit1, 2011.

010, is part ofurement. IFRShe context of d liabilities. Ove date for IFJanuary 1, 20

al Statementsblish principlesty controls onhether an entitive for annua

Joint Venturers. IFRS 11 focs is currently trrangements b

will become ef

y, a joint arrafinancial stater entities and RS 12 will be

measuring faito IFRSs that This Standard

-2013

Second Quar

nued)

nts in additionfective, and dently assessinxcept as noted

the transfer ofty retains. The

f a multi-step S 9 has adoptits business mn December RS 9 and req015.

s and SIC-12 s for the presene or more othity should be

al periods beg

es and SIC-13cuses on the the case undeby requiring thffective for an

ngement, an ements to evathe effects of

ecome effectiv

ir value and rerequire or ped will become

rter Financial

to the ongoinetermined tha

ng the potentiad below.

f financial assese amendme

project to repted an approamodel and the16, 2011, the

quire certain

Consolidationentation and her entities. Tincluded in th

ginning on or a

3 Jointly rights and er IAS 31. Thhe equity metnual periods

associate or aluate the natuf those interesve for annual

equires ermit fair valuee effective for

38

Report 2012-

ng at the al

sets ents

place ach e

e

n-

This he after

e thod

an ure sts on

e

-2013

CBC/Ra

39

adio-Canada

2. S

IAS 1 Am

IAS 1 wasand only relements translationunder IFRimplemencompreheafter July

IAS 12 A

IAS 12 wameasuremfrom the mdoes not eeffective f

IAS 19 A

IAS 19 waamend theComprehecorporate These amCorporatiothe year rcomprehediscount r

IAS 28 In

IAS 28 wathe requirand joint v

Second Quar

ignifican

mendments t

s amended inrevise the waywhich may ben), and those

RS 9).The Corntation of this ensive income1, 2012.

Amendments

as amended iment of deferrmanner in whexpect these for annual rep

Amendments

as amended ie presentatioensive Incom bond yield, a

mendments aron expects thecognized in

ensive incomerate in the cur

nvestments i

as amended iements for thventures. IAS

CBC/Radio

rter Financial

nt Acco

to IAS 1 Pre

June 2011 toy other compe “recycled” telements tha

rporation has Standard to re. These ame

s to IAS 12 In

n December red tax assetsich the entity amendments

porting period

s to IAS 19 E

n June 2011 n of changes e (Loss), to re

as well as to imre effective fohe most signif

net results ine, given that trrent year.

in Associate

n 2011 and phe application S 28 is effectiv

o-Canada Secon

Report 2012

ounting P

esentation of

o retain the “orehensive inchrough profit

at will not (e.gretained the

result in minoendments will

ncome Taxe

2010 to provis and liabilitieexpects to re

s to impact its s beginning o

Employee Be

to eliminate tin the defined

equire the nemprove disclor annual perioicant impact o the amount o

the Corporatio

es and Joint V

prescribes theof the equity

ve for annual


-2013

Policies

f financial sta

one or two stacome is preseand loss (e.g

g. fair value th“two statemer presentationbecome effe

es

de an exceptes should refleecover the car

financial staton or after Jan

enefits

he option to dd benefit obligt interest to bosure about thods beginningof adopting thof $92 millionon’s expected

Ventures

e accounting fmethod wheperiods begin


s (Contin

atements

atement” apprented: requiring. cash-flow hrough other c

ent” approach n changes relctive for annu

tion to the genect the tax corrying amounttements. The nuary 1, 2012

defer the recogation and plae calculated bhe risks arising on or after Jhis Standard t, with a corre

d return on pla

for investmenn accounting nning on or af


nued)

roach at the ong separate sedging, foreig

comprehensivand expects

lating to itemsual periods be

neral principlensequences tt of the asset.amendments

2.

ognition of gaian assets on by using a higng from defineJanuary 1, 20to be a highersponding decan assets is g

ts in associatfor investmen

fter January 1

ed Financial State

option of the esubtotals for thgn currency ve income itemthe

s of other eginning on o

e in IAS 12 ththat would fol. The Corporas to IAS 12 ar

ins and lossethe Statemen

gh quality ed benefit pla13. The r net expensecrease in othegreater than th

tes and sets onts in associa, 2013.

ements

entity hose

ms

r

at the low

ation re

s, to nt of

ans.

e for er he

out ates

Notes to the

3. KeJudge

A. Key

The prepamanagemat the dateduring the

The criticafinancial sassociateintangibleand other

When accbenefit ob

The primaChanges and amouand expecIncome.

In makingconditionsassumptiocommitmeassumptioEstimatesprospectivof the chachange af

e Condensed Con

ey Sourements

Sources of

aration of thesment to make e of such finae period.

al estimates astatements afd with the Fe

es and progracontingencie

counting for dbligations and

ary assumptioto these prim

unts recognizected return on

g estimates ans where possons have beeents, events oons utilized ins are regularlyvely by includange, if the chffects both. A


rces of

Estimation

se condensedestimates and

ancial stateme

and assumptioffect the assesderal Budget mming, allow

es.

efined benefi the future pe

ons and estimmary assumpti

ed in Other Cn plan assets

nd using assuible, supplem

en applied in aor uncertaintien making thesy reviewed byding them in thhange affects ctual results c


Estimat

n Uncertaint

d consolidatedd assumptionents and the r

ons utilized inssment of pen2012 restruc

wance for doub

t pension plaerformance of

mates include ons and estim

Comprehensivwould also im

umptions, manmented by intea manner cones that we be

se estimates iny managemenhe Condensethat period oncould significa

nd Quarter Financ

CBC/Ra

tion Unc

ty

d financial stans that affect treported amo

n preparing thnsion plans aturing, estimabtful accounts

ns, assumptiof plan assets.

the discount mates would ive Income, asmpact the am

nagement relernal analysis nsistent with plieve will maten these condent and changed Consolidatenly; or the peantly differ fro

cial Report 2012

adio-Canada S

certainty

atements in athe reported aunts of reven

he Corporationnd employee

ated useful livs, provisions a

ons are made

rate and the empact amoun

s applicable. Dounts recogn

ies on externas required.

prior periods aerially affect tensed consoles in those esed Statementriod of the ch

om those estim

-2013

Second Quar

y and C

ccordance wamounts of asues and expe

n’s condensee-related liabilves of propertassociated w

e in estimating

expected retunts recognizeDifferences beized in Other

al informationThese estima

and there are the methodololidated financstimates are rt of Income (Lange and futumates.

rter Financial

Critical

ith IFRS requssets and liabenses recorde

ed consolidateities, accrualsy and equipmith legal claim

g the valuatio

urn on plan ased in net resuletween the acComprehens

n and observaates and no known ogy or

cial statementecognized

Loss) in the peure periods, if

40

Report 2012-

uires bilities ed

ed s

ment, ms

on of

ssets. ts ctual sive

able

s.

eriod f the

-2013

CBC/Ra

41

adio-Canada

3. KeJudge

B. Critic

The criticaCorporatioeffect on tas follows

• Tofsh

• T4 m

• Tthte

• Tfr20

• Tmas

• Tcu

• T

Determina

Second Quar

ey Sourements

cal Judgem

al judgementson’s accountithe amounts rs:

he determinaf the CBC Mohould consoli

he determinaand the dete

meet the criter

he determinahe Corporatioemporary diffe

hat the Corpoom the date o0 per cent vot

he determinameets the crite

s an investme

he determinaurtailment ga

he determina

ations of critic

CBC/Radio

rter Financial

rces of (Contin

ments

s that the Corng policies, arecognized in

ation that the Conetization Trdate this entit

ation that an armination tha

ria of a finance

ation that, as on does not exerences are s

oration exerciof the merger ting control;

ation that an aeria of an opeent property;

ation that the Cin or loss; and

ation of the co

cal judgement

o-Canada Secon

Report 2012

Estimatnued)

rporation’s maapart from thon the Corporat

Corporation bust receivablety;

arrangement ft both this leae lease;

of the reportinxpect to genescheduled to r

sed significantransaction t

arrangement trating lease a

Corporation’sd

omponents rel

ts are reasse


-2013

tion Unc

anagement hase involving etion’s conden

bears the majoes through the

for satellite traase and the o

ng date, deferrate material reverse due to

nt influence ohrough to Ma

to lease a porand that the le

s current restr

lated to the C

ssed at each


certainty

as made in thestimations, tnsed consolida

ority of the rise guarantee i

ansponders cne related to

rred taxes shotaxable incomo its specific o

ver Canadianarch 26, 2012

rtion of a buildeased portion

ructuring activ

Corporation’s p

reporting dat


y and C

he process of hat have the ated financial

sk associatedt has provide

constitutes a lea mobile prod

ould not be reme or losses ioperating stru

n Satellite Rad, despite hold

ding owned byn of the buildin

vities do not re

property and

te.

ed Financial State

Critical

applying the most significal statements a

with the colled and as suc

ease under IFduction vehic

ecognized becin the periodsucture;

dio Holdings ding less than

y the Corporang does not q

esult in a

equipment.

ements

ant are

ection h,

FRIC le

cause s

Inc.

ation ualify

Notes to the

4. Tr

(in thousands

Trade receivab

Allowance for

Other

The Corpoevidence Corporatiopast the acorrelate w

Before accustomer.and defineevery thre

Trade recperiod for has not beCorporatio

Consistenthrough aaverage cpast due,

The Corpo

e Condensed Con

rade an

of dollars)

bles

r doubtful accounts

oration recogof impairmenon’s past exp

average creditwith default o

ccepting any n. An external e credit limits ee years to de

ceivables discwhich the Co

een a significon’s credit ter

nt with others gencies. The

credit term of but not impai

oration does


d Other

nizes an allownt. Objective eerience of cot terms as we

on receivables

new customercredit scoringby customer

etermine whet

closed includeorporation hasant change inrms average 3

in the industrse agencies t30 days. As sired.

not hold any c


r Receiv

wance for douevidence of imllecting paym

ell as observas.

r, the Corporag agency may. Limits and sther adjustme

e amounts (ses not recognizn credit quality30 days.

ry, the Corportypically remitsuch, a signifi

collateral or o

nd Quarter Financ

CBC/Ra

vables

ubtful accounmpairment for ments, an incre

ble changes i

ation reviews y be used to ascoring attribuents are requi

ee Note 4A) thzed an alloway and the amo

ration makes t their paymeicant portion o

other credit en

cial Report 2012

adio-Canada S

Sep t em

nts for receivaa group of re

ease in the nuin national or

the credit appassess the pouted to customired.

hat are past dance for doubounts are still

most of its cont over a periof the Corpora

nhancements

-2013

Second Quar

mb er 3 0 , 2 0 12

130,824

(3,292)

16,240

14 3 ,772

ables where theceivables coumber of delalocal econom

plication submotential custommers are revie

due at the endbtful accounts l considered r

onventional adod exceedingation’s trade

s over these b

rter Financial

M arch 3 1

17

here is objectuld include th

ayed paymentmic conditions

mitted by the mer's credit quewed at least

d of the reportbecause the

recoverable. T

dvertising salg the Corporareceivables a

balances.

42

Report 2012-

1, 2 0 12

163,871

(1,979)

15,439

77,3 3 1

ive he ts

s that

uality once

ting re The

es ation’s are

-2013

CBC/Ra

43

adio-Canada

4. Tr

A. Age

(in thousands

31 - 60 days

61 - 90 days

91 - 120 days

T o t al

B. Move

(in thousands

Balance at beg

Amounts writ t

Amounts reco

Impairment los

Increase in allo

B alance at

The conce

Second Quar

rade an

of Trade Re

of dollars)

ement in Al

of dollars)

ginning of the year

ten of f during the pe

vered during the per

sses reversed

owance for doubtful

end o f t he per io

entration of cr

CBC/Radio

rter Financial

nd Other

eceivables

llowance fo

eriod as uncollect ible

riod

accounts

o d

redit risk is lim

o-Canada Secon

Report 2012

r Receiv

that are Pa

or Doubtful A

e

mited due to t


-2013

vables (

ast Due but

Accounts

he fact that th


(Continu

t not Impair

Sep t em

Sep t em

he customer b


ued)

red

mb er 3 0 , 2 0 12

15,310

13,007

30,886

59 ,2 0 3

mb er 3 0 , 2 0 12

(1 979)

357

-

371

(2 041)

( 3 2 9 2 )

base is large

ed Financial State

M arch 3 1

7

M arch 3 1

and unrelated

ements

1, 2 0 12

36,182

25,381

17,736

79 ,2 9 9

1, 2 0 12

(1 103)

190

-

695

(1 761)

( 1 9 79 )

d.

Notes to the

5. Pr

A. Prog

(in thousands

Programs com

Programs in p

Broadcast rig

B. Move

(in thousands

Opening balan

Addit ions

Programs bro

Programm

The progr(2011—$1(2011—$2in the pas

6. Pr

(in thousands

Programming

Service agreem

e Condensed Con

rogramm

gramming b

of dollars)

mpleted

rocess of product io

hts available for bro

ement in Pr

of dollars)

nce

adcast

ming includes

ramming write.6 million) an.3 million). Pr

st two years, p

repaid e

of dollars)

rights

ments


ming

y Genre

on

oadcast

rogramming

amounts for

e-offs for the td the six monrogramming wprogramming

expense


g

television pro

three monthsnths ended Sewrite-offs are not suitable f

es

nd Quarter Financ

CBC/Ra

ograms includ

ended Septeeptember 30, mainly due tofor telecast or

cial Report 2012

adio-Canada S

Sep t em

Sep t em

ding specialty

ember 30, 2012012 amoun

o terminated pr pilots not pro

Sep t em

-2013

Second Quar

mb er 3 0 , 2 0 12

72,964

111,498

30,105

2 14 ,56 7

mb er 3 0 , 2 0 12

166,104

424,007

(375,544)

2 14 ,56 7

services.

12 represent $t to $1.6 millioprojects, progogressing into

mb er 3 0 , 2 0 12

35,117

17,843

52 ,9 6 0

rter Financial

M arch 3 1

16

M arch 3 1

1,

(1

16

$1.1 million on

grams not teleo a series.

M arch 3 1

11

44

Report 2012-

1, 2 0 12

90,973

46,045

29,086

6 6 ,10 4

1, 2 0 12

163,658

,013,491

1,011,045)

6 6 ,10 4

ecast

1, 2 0 12

95,809

17,561

13 ,3 70

-2013

CBC/Ra

45

adio-Canada

7. Pr

A. Cost

The prope

(in thousands

Cost

Accumulated d

(in thousands o

Cost at March 31, 2012

Additions

Transfers (referAssets classifiesale

Disposals and write-offs

Cost at September 30,

Accumulated deMarch 31, 2012

Depreciation fo

Impairment cha

Reverse deprecclassified as he

Reverse deprecdisposals

Accumulated dimpairment chaSeptember 30,

Net carrying amSeptember 30,

Second Quar

roperty

t , Accumula

erty and equip

of dollars)

depreciat ion and imp

of dollars)

2

r to Note 8) ed as held for

, 2012

epreciation at 2

r the period

arges

ciation on assets eld for sale

ciation on

depreciation and arges at , 2012

mount at , 2012

CBC/Radio

rter Financial

and Eq

ated Depre

pment carryin

pairment charges

Land

181,200

38

130

(447)

(1)

180,920

-

-

(423)

-

-

(423) (

180,497

o-Canada Secon

Report 2012

quipmen

eciation and

ng amounts ar

Buildings imp

525,009

1,536

1,908

(1,800)

(1,173)

525,480

(118,928)

(19,268)

-

594

629

(136,973)

388,507


-2013

nt

d Impairmen

re as follows:

Leasehold provements Technica

46,888

979

2,733

-

(205)

50,395

(21,249)

(1,496)

-

-

-

(22,745)

27,650


nt Charges

Sep t em

al equipment

1,287,700

20,630

12,754

-

(18,862)

1,302,222

(926,896) (

(53,817)

(6,117)

-

18,384

(968,446) (

333,776


mb er 3 0 , 2 0 12

2,223,355

(1,231,397)

9 9 1,9 58

Other Uncomple

139,325

1,637

1,869

-

(4,573)

138,258

(100,061)

(6,772)

(446)

-

4,469

102,810)

35,448

ed Financial State

M arch 3 1

2

(1

1,0 4

ted capital projects

35,000 2

10,502

(19,422)

-

-

26,080 2

- (1

-

-

-

-

- (1

26,080

ements

1, 2 0 12

,215,122

1,167,134)

4 7,9 8 8

Total

,215,122

35,322

(28)

(2,247)

(24,814)

,223,355

,167,134)

(81,353)

(6,986)

594

23,482

,231,397)

991,958

Notes to the

7. P

(in thousands

Cost at M arch 31, 201

Addit ions

Transfers

Asset classif iesale

Disposals andwrite-offs

C o st at M arch 3 1, 2

Accumulated dat M arch 31, 2

Depreciat ion f

Reverse depreasset classif iesale

Reverse depredisposals

A ccumulat ed epreciat ioat M arch 3 1, 2N et carryinat M arch 3

The contrSeptembe

B. Impa

On April 4announceshutdowndistributio(2011—nil)(2011—$2Condense

An additiomobile un

e Condensed Con

roperty

of dollars)

11

ed as held for

d

2 0 12

depreciat ion 2011

for the year

eciat ion on ed as held for

eciat ion on

ed o n

2 0 12 ng amo unt 1, 2 0 12

actual commier 30, 2012 (M

airment

4, 2012, as paed the cessati of remaining

on services, th) and an addi.4 million) fored Consolidat

onal charge onit which is no


and Eq

Land B ui

179,982 50

1,195

63

-

(40)

18 1,2 0 0 52 5

- (

- (

-

-

- ( 118

18 1,2 0 0 4 0

itments for theMarch 31, 201

art of the finanon of shortwa

g analogue telhe Corporatiotional deprec

r the three andted Statemen

f $0.4 million o longer in use


quipmen

ld ing sLea

imp ro v

08,003

6,822

11,982

-

(1,798)

5,0 0 9 4

86,790)

32,845)

-

707

8 ,9 2 8 ) ( 2

6 ,0 8 1 2

e acquisition 12—$16.0 mill

ncial plan addave transmisslevision transn recorded an

ciation expensd six month p

nt of Income (L

was recordedeable conditio

nd Quarter Financ

CBC/Ra

nt (Cont

aseho ld vement s

Teq

44,800

1,547

542

-

(1)

4 6 ,8 8 8 1,2

(18,609)

(2,641)

-

1

2 1,2 4 9 ) ( 9

2 5,6 3 9 3

of property aion).

dressing Fedesion of RCI prmitters. As a n impairmentse of $6.4 millperiods endedLoss).

d in the seconon.

cial Report 2012

adio-Canada S

tinued)

echnical q uip ment

1,315,115

47,427

59,346

(3,724)

(130,464) (

2 8 7,70 0 13 9

(984,429) (1

(70,988)

3,490

125,031

2 6 ,8 9 6 ) ( 10 0

6 0 ,8 0 4 3 9

nd equipmen

eral Budget 20rogramming aresult of ceascharge of $6

lion (2011—$0d September 3

nd quarter of

-2013

Second Quar

Ot her

U nco m

p r

141,158

10,435

3,363

(2,308)

13,323)

9 ,3 2 5 3

101,367)

(13,915)

2,308

12,913

0 ,0 6 1)

9 ,2 6 4 3

t are $20.4 m

012, the Corpand the accelesing these tra.5 million in it

0.6 million) an30, 2012, res

2012—2013 to

rter Financial

mplet ed cap it al ro ject s

82,732 2 ,2 7

31,142 9 8

(75,296)

- ( 6

(3,578) ( 14 9

3 5,0 0 0 2 ,2 1

- ( 1,19

- ( 12 0

-

- 13 8

- ( 1,16

3 5,0 0 0 1,0 4 7

million as at

poration eration of the nsmission ants first quarternd $26.0 milliopectively, in it

o fully impair

46

Report 2012-

T ot al

71,79 0

8 ,56 8

-

6 ,0 3 2 )

9 ,2 0 4 )

15,12 2

9 1,19 5)

0 ,3 8 9 )

5,79 8

8 ,6 52

7,13 4 )

7,9 8 8

nd r on ts

a

-2013

CBC/Ra

47

adio-Canada

7. P

C. Asse

The Corpothrough a probable acommittedyear from amount a

With the inits standadispose oSeptembe

As part ofbuildings.purposes:

• ASN

• Ais

• Aex

• Inthprha

• Aof20

8. In

A. Cost

The Corposoftware f

(in thousands

Cost

Accumulated a

Second Quar

roperty

ets Classifie

oration classisale transact

and the assetd to the sale, the date of c

nd fair value l

ncreased reqrd-definition m

of it within the er 30, 2012 (M

f the Corporat As part of thi:

A building and eptember 30

November 1, 2

A building and s expected to

Another propexpected to be

n order to conhe area have roperty in Rimas a net carry

A parcel of lanf analogue te012 is $0.1 m

ntangible

t and Accum

oration’s intanfor internal us

of dollars)

amort izat ion

CBC/Radio

rter Financial

and Eq

ed as Held

fies an asset tion rather that is available fwhich shouldlassification. Aless costs to s

uirements formobile units. Anext twelve m

March 31, 201

tion’s financiais initiative, th

land located , 2012 of $0.3

2012.

land located be sold befor

rty, located ine sold in the n

solidate its opbeen relocate

mouski for salying amount o

d located in Slevision opera

million.

e Asset

mulated Am

ngible assetsse. The intang

o-Canada Secon

Report 2012

quipmen

For Sale

as held for saan through cofor immediate

d be expectedAn asset heldsell.

r high-definitioAs such, the

months. This 12—$0.2 millio

al plan, it has he following p

in Cornerbro3 million. Sale

in Sydney, Nre the end of t

n Iqaluit, Nunanext twelve mo

perations in Red into a singe and intends

of $0.4 million

Stoneham, Quations. The to

ts

mortization

comprise sofgible assets c


-2013

nt (Cont

ale if its carryontinuing use.e sale in its prd to qualify ford for sale is m

on broadcastiCorporation hmobile unit haon).

developed a roperties are

ok, Newfounde and transfer

Nova Scotia, hthe Corporatio

avut, has a caonths.

Rimouski, Quele, leased pros to dispose on as at Septem

uebec, that isotal carrying a

ftware acquirearrying amou


tinued)

ying amount w. This conditioresent conditir recognition a

measured at th

ing, the Corpohas listed thisas a net carry

strategy to reclassified as

dland, with a r of this prope

having a total on’s third qua

arrying amoun

ebec, the regoperty. The Cof it in the nexmber 30, 2012

no longer reqamount of the

ed separatelyunts are as fol

Sep t em


will be recoveron is met onlyon. Managemas a completehe lower of its

oration no lons unit for sale ying amount o

educe ownersheld for sale

total carryingerty was comp

carrying amoarter.

nt of $0.5 mill

ional broadcaorporation ha

xt twelve mon2.

quired followi property at S

y and internalllows:

mb er 3 0 , 2 0 12

153,619

(130,937)

2 2 ,6 8 2

ed Financial State

red principallyy when the sament must be ed sale withins previous car

nger utilizes oand intends t

of $0.2 million

ship in land anfor accountin

amount at pleted on

ount of $0.3 m

ion and is

asting activitieas listed its owths. This prop

ng the shutdoSeptember 30

ly developed

M arch 3 1

(

2

ements

y le is

n one rrying

one of to n at

nd ng

million,

es in wned perty

own 0,

1, 2 0 12

150,807

122,372)

2 8 ,4 3 5

Notes to the

8. In

(in thousands

Cost at M arch

Addit ions

Transfers (refe

C o st at Sep

Accumulated a

Amort izat ion f

A ccumulat e

N et carryin

(in thousands

Cost at M arch

Addit ions

Transfers

Disposals

C o st at M a

Accumulated a

Amort izat ion f

Reverse amort

A ccumulat e

N et carryin

B. Impa

There werimpairmen

e Condensed Con

ntangible

of dollars)

h 31, 2012

er to Note 7)

pt emb er 3 0 , 2 0 1

amort izat ion at M arc

for the period

ed amo rt izat io n a

g amount at Sep

of dollars)

h 31, 2011

arch 3 1, 2 0 12

amort izat ion at M arc

for the year

t izat ion on disposals

ed amo rt izat io n a

g amount at M a

airment

re no indicatont expense w


e Asset

12

ch 31, 2012

at Sep t ember 3 0

p t emb er 3 0 , 2 0 12

ch 31, 2011

s

at M arch 3 1, 2 0

rch 3 1, 2 0 12

ors of impairmwas recorded (


ts (Cont

0 , 2 0 12

2

12

ment during th(2011—nil).

nd Quarter Financ

CBC/Ra

tinued)

Int ernadevelo p

so f t w

138,3

2

6

13 9 ,16

(120,8

(7,4

( 12 8 ,2 6

10 ,9 0

Int ernadevelo p

so f t w

136,5

1,

2

(

13 8 ,3

(105,4

(15,4

( 12 0 ,8 2

17,50

e second qua

cial Report 2012

adio-Canada S

ally p ed are

A cq uso f t w

331 10

209

629

6 9 11,7

822) (1

441) (1

6 3 ) ( 2 ,6

0 6 9 ,0

ally p ed are

A cq uso f t w

579 2,

713 1

220 6

(181)

3 1 10 ,5

437)

476) (1

91

2 2 ) ( 1,5

0 9 9 ,0

arter of 2012—

-2013

Second Quar

ired ware

U ncomplca

pro j

,596

1,113

31

74 0 2

1,550)

1,124)

6 74 )

0 6 6 2

ired ware

U ncomplca

pro j

,209 6

1,853 2

,534 (

-

59 6 1,

(63)

1,487)

-

550 )

0 4 6 1,

—2013 and, as

rter Financial

let ed ap it al ject s

1,880 150

1,462 2

(632)

,710 153

- ( 12 2

- ( 8

- ( 13 0

,710 2 2

let ed ap it al ject s

6,399 14

2,235 5

6,754)

-

8 8 0 150

- ( 10 5

- ( 16

-

- ( 12 2

8 8 0 2 8

s such, no

48

Report 2012-

To t al

0 ,8 0 7

2 ,78 4

2 8

3 ,6 19

2 ,3 72 )

8 ,56 5)

0 ,9 3 7)

2 ,6 8 2

To t al

5,18 7

5,8 0 1

-

( 18 1)

0 ,8 0 7

5,50 0 )

6 ,9 6 3 )

9 1

2 ,3 72 )

8 ,4 3 5

-2013

CBC/Ra

49

adio-Canada

9. Su

The follow

(in thousands

CSR - Class B

Other

The CorpoSatellite Rmerger traequity me20 per cethrough bjudges thashares.

The fair va(March 31shares at

The follow

(in thousands

Revenue

Net income 1Amounts fo2Amounts foto August 31

(in thousands

Assets

Liabilit ies1Amounts at2Amounts at

There areinvestors.

Second Quar

ubsidiar

wing is the sum

of dollars)

B

oration holds Radio Holdingansaction invo

ethod, and CSnt and that it oard represenat it has signif

alue of the Co1, 2012—$53.6September 3

wing tables pr

of dollars)

or the three and sor the three and s1, 2011.

of dollars)

t September 30, t March 31, 2012

e no significan

CBC/Radio

rter Financial

ries, Sp

mmarized fina

a 14.5 per cegs Inc. (CSR) olving Sirius C

SR that closedholds the powntation, and tficant influenc

orporation’s in6 million) and30, 2012.

resent the sum

six month periodssix month periods

2012 include bal2 include balance

nt restrictions

o-Canada Secon

Report 2012

pecial P

ancial informa

Sep t ember 3 0 ,

1

Ownership int er

ent equity intethrough its in

Canada Inc. (d in June 201wer to participhrough its once over CSR

nvestment in was determi

mmarized fina

2

68

Three mo nt hs e

s ended Septems ended Septem

lances for CSR aes for CSR as at

imposed on C


-2013

urpose

ation for the C

2 0 12 M arc

14.50%

-

-

rest as at :

erest and a 21nvestment in C(Sirius), an inv1. Given that

pate in the finagoing businesand applies e

CSR at Septened using the

ancial informa

0 12 1

8,252

6,117

nd ed Sept emb er

ber 30, 2012, incber 30, 2011, inc

as at August 31, February 29, 20

CSR relating


Entities

Corporation’s

ch 3 1, 2 0 12 Sep t

14.51%

-

-

C arr

1.7 per cent vClass B Votinvestee previothe Corporat

ancial and opss relationshi

equity accoun

ember 30, 20e closing mark

ation for CSR

2 0 112

55,546

8,154

r 3 0 Six m

clude results for Cclude results for t

Sep t emb

2012. 12.

to their ability


s and As

investments:

t emb er 3 0 , 2 0 12

6,577

17

6 ,59 4

rying value as at

voting interestg Shares, ob

ously accounttion’s voting inperating policyip with CSR, t

nting to its inve

12, is $75.9 mket price of C

:

2 0 12 1

132,970

1,928

mont hs end ed Se

CSR through to Athe combined CS

b er 3 0 , 2 0 12 1

407,128

361,873

y to transfer fu

ed Financial State

ssociate

:

M arch 3 1,

7

7

6

:

t in Canadian tained as parted for under tnterest exceey decisions ofthe Corporatioestment in Cl

million CSR Class A

9

ep t emb er 3 0

August 31, 2012SR/Sirius entity t

M arch 3 1,

3

unds to their

ements

es

2 0 12

6,191

17

6 ,2 0 8

rt of a the

eds f CSR on ass B

2 0 112

98,631

14,277 . hrough

2 0 12 2

397,158

354,367

Notes to the

10. Ac

(in thousands

Trade payable

Accruals

Other

11. PeAsset

Employee

(in thousands

Accrued pens

Employee futu

Vacat ion pay

Workforce red

Salary-related

The CorpoPlan, coveof pensionlast ten yesalary to tactuarial varrangembasis. Thegoing forwreflect the

e Condensed Con

ccounts

of dollars)

es

ension ts/Liabil

e-related asse

of dollars)

ion benef it liability

ure benef its

duct ion

liabilit ies

oration maintering substannable service ears of emplothe plan, with valuations. Thents. All plane actuarial vaward under nee latest valuat


s Payab

Plans alities

ets/liabilities a

Sep t emb e

ains a contribntially all emp

and on the aoyment. Emplo

the Corporathe Corporatios are subject luation of the

ew regulatorytions, which w


ble and A

and Emp

are as follows

er 3 0 , 2 0 12

-

-

51,827

10,240

59,380

12 1,4 4 7

C urrent

butory definedloyees of the verage of theoyees are reqtion providingon also mainta

to an actuari CBC/Radio-C

y requirementswere performe

nd Quarter Financ

CBC/Ra

Accrued

ployee-

s:

M arch 3 1, 2

57

6

66

12 9 ,8

d benefit pensCorporation.

e best five conquired to cont the balance ains unfundedal valuation, wCanada Penss. The amouned as of Dece

cial Report 2012

adio-Canada S

d Liabili

Sep t em

Related

2 0 12 Sep t em

-

-

7,099

6,310

6,441

8 50

sion plan, the Retirement b

nsecutive yeatribute a perceof the fundingd non-contribuwhich have bsion Plan will nts included inember 31, 201

-2013

Second Quar

ities

mb er 3 0 , 2 0 12

35,827

50,824

2,991

8 9 ,6 4 2

d

b er 3 0 , 2 0 12

464,128

161,782

-

-

161

6 2 6 ,0 71

Lo ng - t e

CBC/Radio-Cbenefits are baars of pensionentage of theg, as requiredutory defined een made at be required on these financ11.

rter Financial

M arch 3 1

12

M arch 3 1

1

15

3 3 3

erm

Canada Pensased on the le

nable salary inir pensionable

d, based on benefit pensleast on a trie

on an annual cial statemen

50

Report 2012-

1, 2 0 12

54,925

65,243

4,470

4 ,6 3 8

1,2 0 12

175,813

57,223

-

-

171

3 ,2 0 7

sion ength n the e

ion ennial basis ts

-2013

CBC/Ra

51

adio-Canada

11. PAsset

The CorpoApril 1, 20employeecash awapensionabthe categodisability adisability aterm bene

During theMarch 31

The princ

A ssump t io n

A ssump t io n

Expected lo

Discount rat

A ssump t io n

Discount rat

Discount rat

Discount rat

Discount rat

Long-term rate

Health care co

Indexation of

The amouCorporatio

(in thousands

Benefit obliga

Fair value of p

D ef icit

Less:

Unamort ized uN et l iab il it yo b ligat io n

Second Quar

Pensionts/Liabil

oration maint005, July 1, 20es retiring withrd upon retireble service anory of employand workers’ and post-retirefit plan and t

e year, the Co, 2012.

ipal assumpti

ns – annual rat es

ns f or t he calcul

ng-term rate of retur

e

ns f or t he calcul

e - pension

e - employee termina

e – LTD benef its

e – post-employmen

e of compensat ion in

st trend rate

pensions in payment

unt included inon's obligatio

of dollars)

ation

plan assets

unvested past servicy ar ising f ro m d

CBC/Radio

rter Financial

n Plans lities (C

ains a non-co005 or Octobeh more than thement or imprnd on the salayees. The Corcompensatio

rement life inshe continuatio

orporation has

ons used for

s

at io n o f p ensio n

rn on plan assets

at io n o f t he b en

ation benef it

nt benefit

ncrease, excluding m

n the Condenn in respect o

ce costsef ined b enef it

o-Canada Secon

Report 2012

and Emontinue

ontributory loner 11, 2005, dhree years ofrove their penary rate at Marporation also

on, continuatiosurance. The on of benefits

s updated its

the purposes

n b enef it cost s:

nef it o b lig at io n:

merit and promotion

nsed Consolidof its defined b

F undep ensio

p la

5,623,14

5,248,00

3 75,14

3 75,14


-2013

mployeeed)

ng-term benefdepending onservice with t

nsion benefitsarch 2005, Julo provides emon of benefits last actuarial

s coverage pla

measuremen

s of the actuar

dated Statemebenefit plans

ed o n an

U nf unded p ensio n

p lans

49 88,983

04 -

5 8 8 ,9 8 3

- -

5 8 8 ,9 8 3

Sep t em


e-Relate

fit plan for cen the categorythe Corporati. The benefitsly 2005 or at r

mployee futurecoverage forvaluations fo

an were made

nt of the pens

rial valuations

Sep t em

ent of Financiis as follows:

Ot her p o st -ret irement

p lans

161,514

-

16 1,514

(268)

16 1,78 2

mb er 3 0 , 2 0 12


ed

rtain employey of employeeon can chooss are based oretirement/dee benefits sucr employees oor the non-cone as at Decem

ion valuation

s were as follo

mb er 3 0 , 2 0 12

6.00%

4.25%

3.75%

3.50%

3.75%

4.25%

2.75%

7.00% per annum unt il 2019,

4.50% thereafter

1.65%

ial Position ar

Fund ed pension

p lan

U

5,184,634

5,090,814

9 3 ,8 2 0

-

9 3 ,8 2 0

ed Financial State

ees hired befoes. Under the se to receive aon the length oeath, dependinch as long-termon long-term ntributory longmber 2009.

completed as

ows:

M arch 3 1

7.00% pun

4.50% t

rising from the

U nf und ed pension

p lans

Ot herret i

81,993

-

8 1,9 9 3 15

-

8 1,9 9 3 15

M arch 3 1

ements

ore plan, a of ng on m

g-

s of

1, 2 0 12

6.50%

5.25%

4.25%

4.00%

3.75%

4.25%

2.75%

per annum nt il 2019, hereafter

1.65%

e

r p ost -rement

p lans

156,917

-

56 ,9 17

(306)

57,2 2 3

1, 2 0 12

Notes to the

11. PAsset

Movemen

(in thousands

Opening def in

Current servic

Interest cost

Contribut ions

Actuarial losse

Benef its paid

Past service co

C losing d ef1Estimated cCanada Pen31, 2012. 2The accrue3The accrue

Movemen

(in thousands

Opening fair v

Expected retu

Actuarial gains

Contribut ions

Contribut ions

Benef its paid

C losing f ai

The Corpoduring the

e Condensed Con

Pensionts/Liabil

nts in the pres

of dollars)

ned benefit obligat io

ce cost

s f rom employees

es

ost1

f ined benef it o b

cost of changes tnsion Plan. This c

ed benefit obligated benefit obligat

nts in the fair v

of dollars)

value of plan assets

urn on plan assets

s

s f rom employees

s f rom the Corporat io

r value o f p lan a

oration expece current fisca


n Plans lities (C

sent value of t

n

b lig at io n

to certain minimucost is a one-tim

ions for the fundeions for the funde

value of the p

on

asset s

cts to make a al year.


and Emontinue

the defined be

um benefit require charge to the C

ed plan and for ted plan and for t

plan assets we

contribution o

nd Quarter Financ

CBC/Ra

mployeeed)

enefit obligati

Pensp la

5,266,6

50,7

110,8

21,2

390,3

(127,

5,712 ,13

S

rements in the PeConsolidated Sta

he unfunded plahe unfunded pla

ere as follows

Pensp la

5,090,8

150,5

84,8

21,2

28,3

(127,

5,2 4 8 ,0 0

S

of $59.7 millio

cial Report 2012

adio-Canada S

e-Relate

on were as fo

ion ans

Ot her p oemploym

p

627 156

779 3

847 3

210

386 4

,717) (6

-

3 2 2 16 1,

Sep t emb er 3 0 , 2

ension Benefits Satement of Incom

ns are $5,623,14ns are $5,184,63

s:

ion ans

Ot her p oemploym

p

814

589

808

210

300 6,

,717) (6,

0 4 -

Sep t emb er 3 0 , 2

on to the defin

-2013

Second Quar

ed

ollows:

ost - ment lans

Penp

6,917 4,482

3,525 7

3,012 23

- 4

4,501 667

6,441) (244

- 15

514 5,2 6 6 ,

2 0 12

Standards Act afme (Loss) in the f

49 and $88,983 r34 and $81,993 r

ost - ment lans

Penp

4,56

29

379

4

,442 5

,442) (244

- 5,0 9 0

2 0 12

ned benefit pe

rter Financial

nsion p lans

Ot her emplo

2,903 14

72,541

1,924

41,186

7,400

4,327) (

5,000

6 2 7 3 156

M arch 3 1,

ffecting the CBC/fiscal year ended

respectively respectively.

nsion p lans

Ot her emplo

3,210

1,938

9,386

41,186

59,421

4,327) (

,8 14

M arch 3 1,

ension plans

52

Report 2012-

p o st - yment p lans

41,234

6,761

7,120

-

15,056

13,254)

-

6 ,9 17

2 0 12

/Radio-

d March

p o st - yment p lans

-

-

-

-

13,254

13,254)

-

2 0 12

-2013

CBC/Ra

53

adio-Canada

11. PAsset

Amounts the table b

(in thousands

Current servic

Interest on ob

Expected retu

Vested past s

Expense recog

Plus:

Actuarial losselossT o t al amouco mp rehens

The cumu$374.3 m

The total eConsolida

(in thousands

Television, rad

Specialty serv

Transmission,

Corporate ma

T o t al

The overaof plan astrends andactual retu$235.4 m

Second Quar

Pensionts/Liabil

recognized inbelow.

of dollars)

ce cost

ligat ion

urn on plan assets

service cost

gnized in net results

es recognized in oth

nt s reco g nized sive lo ss

ulative actuariillion as of Se

expense recoated Statemen

of dollars)

dio and new media se

vices

distribut ion and col

anagement

all expected rassets held. Thd analysts’ fourn on plan aillion or 4.66 p

CBC/Radio

rter Financial

n Plans lities (C

n comprehens

her comprehensive

in

ial losses recoeptember 30,

ognized in netnt of Income (

ervices costs

lect ion

ate of return ihe Corporationrecast of the ssets for the tper cent, resp

o-Canada Secon

Report 2012

and Emontinue

sive income in

2

56

(7

8

32

3 3 7,

Three mo nt hs e

ognized in Ot2012 (March

t results has b(Loss) as follo

8 ,

Three mo nt hs e

s a weighted n’s assessmemarket returnthree and six pectively (201


-2013

mployeeed)

n respect to th

2 0 12

27,152

6,930

5,295)

(19)

8,768

9,077

,8 4 5

nd ed Sep t ember

ther Compreh31, 2012 loss

been recordedows:

2 0 12

7,539

915

235

79

,76 8

nd ed Sep t ember

average of thent of the expens for the assemonths perio1—3.50 per c


e-Relate

hese defined

2 0 11

18,362

59,685

(72,984)

(19)

5,044

195,112

2 0 0 ,156

r 3 0 Six m

hensive Incomses — $64.3 m

d in the Corpo

2 0 11

4,028

848

126

42

5,0 4 4

r 3 0 Six m

he expected rected returnset over the life

ods was $143ent and 6.58


ed

benefit plans

2 0 12

54,304

113,860

(150,589)

(38)

17,537

310,079

3 2 7,6 16

mont hs ended Se

me (Loss) repmillion).

oration’s Con

2 0 12

15,251

1,651

476

159

17,53 7

mont hs ended Se

returns of the is based on e of the relate

3.0 million or 2per cent, resp

ed Financial State

s are indicated

3

1

) (14

)

2

13

158

ep t emb er 3 0

resent

ndensed

2

2 5

ep t emb er 3 0

various categhistorical retued obligations2.80 per cent pectively).

ements

d in

2 0 11

36,724

119,370

45,968)

14,962

25,088

33,816

8 ,9 0 4

2 0 11

22,431

1,722

701

234

5,0 8 8

gories urn s. The and

Notes to the

11. PAsset

The asset

(in thousands

Fixed income

Canadian equi

Global equit ie

Strategic1

1Strategic in

For the thbenefits in(2011—$2

12. Pr

(in thousands

Balance at M a

Addit ional pro

Provisions ut iRemeasuremewithout cost

B alance at

Addit ional pro

Increases due

Provisions ut iRemeasuremewithout costB alance at 2 0 12

e Condensed Con

Pensionts/Liabil

ts of the plan

of dollars)

t ies

es

vestments includ

ree and six mncurred by the24.5 million a

rovision

of dollars)

arch 31, 2012

ovisions recognized

lized nt or sett lement

June 3 0 , 2 0 12

ovisions recognized

to accret ion

lized nt or sett lement

Sep t emb er 3 0 ,


n Plans lities (C

have been in

de real estate, pr

month periodse Corporationand $491.7 m

ns

C laims and pro ceed

3

(2

4 0

4

(

(2

3 8 ,


and Emontinue

nvested as fol

rivate placement

s ended Septen was $217.3 illion, respect

legal d ing s Envir

8,762

5,268

2,649)

(702)

,6 79

4,969

-

(4,917)

2,687)

,0 4 4

nd Quarter Financ

CBC/Ra

mployeeed)

lows:

s, hedge funds a

ember 30, 201million and $tively).

ronment al

300

-

-

-

3 0 0

-

-

(40)

-

2 6 0

Sep t em

cial Report 2012

adio-Canada S

e-Relate

Sep t em

and infrastructure

12, the total e479.5 million,

W o rkf o rce red uct io n D

-

13,936

(11,751)

-

2 ,18 5

22

-

(1,170)

-

1,0 3 7

mb er 3 0 , 2 0 12

R est ruct ur in

-2013

Second Quar

ed

mb er 3 0 , 2 0 12

53%

11%

20%

16%

10 0 %

e funds.

expense relate, respectively

D eco mmissio nin

5,388

5,3 8 8

1,270

39

(308

6 ,3 8 9

ng co st s

rter Financial

Sep t emb er 3 0

ed to employey

g

- 3

8 2

- (1

-

8 4 8

0

9

8) (

- (

9 4 5

54

Report 2012-

0 , 2 0 11

55%

13%

17%

15%

10 0 %

ee

T ot al

9,062

24,592

14,400)

(702)

8 ,552

6,261

39

(6,435)

(2,687)

5,73 0

-2013

CBC/Ra

55

adio-Canada

12. P

(in thousands

Balance, begin

Addit ional pro

Provisions ut il

Remeasuremewithout cost

B alance, en

A. Rest

Restructuresponse recognizeacceleraticeasing sincrementcharges, a

For the trestructurcapital funThe majoexpenses

B. Claim

Various cthese claiexpenditutax issues

Litigation Claims thaconsiderefinancial s(March 31estimable

The Corpo

Second Quar

Provisio

of dollars)

nning of year

ovisions recognized

lized

nt or sett lement

nd o f year

tructuring co

ring costs incto the annou

ed to date ng the shutdo

shortwave tratal deferred cas presented

three and sring costs wasnding recognority of theses on the Corpo

ms and lega

laims and legms demand l

ures. The Cors, copyright ta

is subject to mat are uncerta

ed to be a constatements. A1, 2012—$38.8e, the Corpora

oration has n

CBC/Radio

rter Financial

ons (Co

C laims and p roceed

3

13

(

(

3 8

osts

curred duringuncement of include workown of analog

ansmission foapital fundingin Note 14.

ix months ps $8.0 millionized in incom

e costs have oration’s State

al proceedi

gal proceedingarge monetarporation’s pro

ariffs, grievanc

many uncertaain in terms ontingency andAt September 8 million) in reation expects

ot identified a

o-Canada Secon

Report 2012

ntinued

legal d ing s Envir

5,272

3,045

3,241)

6,314)

,76 2

g the first sixFederal Budgkforce reducgue television

or the Corporg has been re

periods enden and $53.4 mme was $6.4

been recordement of Inco

ngs

gs have beenry damages oovisions consces and other

ainties and theof the outcomed are not reco

30, 2012, theespect of legathem to be re

any onerous c


-2013

d)

o nment al

300

-

-

-

3 0 0

M ar

x months of thget 2012, as tions where

n transmittersation’s RCI s

ecognized in r

d Septembemillion, respecmillion and $

ded as part oome (Loss).

n asserted or ior other form oist mainly of rr legal claims

e outcome of e or potential rded in the Co

e Corporation al claims. All mesolved within

contracts.


W orkf o rce red uct io n D

-

-

-

-

-

ch 3 1, 2 0 12

R est ruct urin

he year havewell as other

demonstrab and associat

service as disrelation to the

r 30, 2012, ctively (2011—$32.1 million, of Transmiss

instituted agaof relief, and creal estate va.

individual maoutflow or thaorporation’s chad provision

matters are cln 12 months.


D ecommissio nin

-

ng co st s

e arisen fromr financial prebly committeted decommisscussed in Nse depreciatio

the total ex—nil and nil), arespectively

sion, distribut

ainst the Corpcould result in

aluation and re

atters is not aat are not mecondensed cons amountinglassified as cu

ed Financial State

g T

- 3

- 1

- (

- (

- 3 9

m the Corporaessures. Exped and estimssioning work

Note 7. In addon and impai

xpense relateand the assoc(2011—nil an

tion and colle

poration. Somn significant elated munici

lways predictasurable are

onsolidated g to $38.0 millurrent as, whe

ements

To t al

35,572

13,045

(3,241)

(6,314)

,0 6 2

ation’s enses

mable, k, and dition, rment

ed to ciated d nil). ection

e of

pal

table.

lion ere

Notes to the

12. P

C. Envir

At Septemmatters (MBiphenylsDévelopprequired afrom the sat these twministry aproperty, w$0.04 mill

D. Cont

Various cthese claiexpenditualways prone or moliabilities.

e Condensed Con

Provisio

ronmental l

mber 30, 2012March 31, 201s (PCB) conceement durabl

at the Corporasite’s former two sites are epprovals andwith spendingion.

tingencies

laims and legms demand l

ures. Litigationedictable. Co

ore future eve


ons (Co

liabilities

2, the Corpora12—$0.3 millioentrations excle, de l'Enviroation’s Mont Lransmission testimated at $ other environg for the three

gal proceedingarge monetarns are subjecontingent liabients occur or f


ntinued

ation had provon). One formceeding permonnement et dLogan properttower and ass$0.2 million, anmental reviee and six mon

gs have beenry damages ot to many unclities are potefail to occur. N

nd Quarter Financ

CBC/Ra

d)

visions totallinmer AM transmmitted levels dedes Parcs (MDty to clean-upsociated buildand $0.1 millioews. The Corpnth periods en

n asserted or ior other form ocertainties anential liabilitiesNo amounts h

cial Report 2012

adio-Canada S

ng $0.3 milliomission site inetermined by DDEP). Additp oil contaminding. Costs ason, respectiveporation has bnding Septem

instituted agaof relief and cd the outcoms, which may have been rec

-2013

Second Quar

on for two envn Rimouski ha

the Ministèretionally, remenants found inssociated withely. Both mattbegun work o

mber 30, 2012

ainst the Corpcould result ine of individuabecome actu

corded in rela

rter Financial

vironmental as Polychlorine du diation work i

n ground samph remediationters are subje

on the Mont Lo totalling

poration. Somn significant al matters is nual liabilities wation to contin

56

Report 2012-

nated

is ples

n work ect to ogan

e of

not when ngent

-2013

CBC/Ra

57

adio-Canada

13. R

The Corpo

(in thousands

Advert ising

Building, towe

Product ion rev

Digital progra

Retransmissio

Program spon

Other services

T o t al R end

T o t al Sp ec

T o t al F inan

Contribut ion fImprovement F

Contra revenu

(Loss) gain on

Net (loss) gaiinstruments

T o t al R eve

14. G

Parliamenare as foll

(in thousands

Operat ing fund

Capital fundin

Working capit

Governmethe conde

ParliamenStatemengenerated

Second Quar

evenue

oration recog

of dollars)

er, facility and servic

venue

amming

on rights

nsorship

s

ering o f service

ialt y Services

ncing inco me

f rom the Local ProgrFund (LPIF)

ues other than advert

n foreign exchange ra

n from fair value of f

nue

overnm

ntary approprlows:

of dollars)

ding

ng

tal funding

ent funding aensed consoli

ntary approprt of Income (L

d revenue.

CBC/Radio

rter Financial

e

nized revenu

ce rentals

s

ramming

ising

ates

f inancial

ment Fun

iations approv

pproved and dated financia

iations for opeLoss) based o

o-Canada Secon

Report 2012

e from the fol

50

10

4

71

4 1,

2

1

12 6 ,

Three mo nt hs e

nding

ved and the a

200

23

2 2 4 ,

Three mo nt hs e

received by tal statements

erating expenon the net diff


-2013

llowing source

2 0 12

0,384

0,049

4,700

1,990

827

3,136

295

,3 8 1

2 6 3

,153

11,764

889

(55)

(425)

,9 70

nd ed Sep t ember

amounts rece

2 0 12

0,000

3,999

1,000

9 9 9

nd ed Sep t ember

he Corporatios.

nditures are reference betwe


es:

2 0 11

50,704

10,356

3,438

1,280

2,873

2,082

530

71,2 6 3

3 9 ,6 2 1

2 ,3 2 7

12,877

440

89

1,459

12 8 ,0 76

r 3 0 Six m

ived by the C

2 0 11

239,001

25,000

999

2 6 5,0 0 0

r 3 0 Six m

on during the

ecognized in een quarterly


2 0 12

156,493

19,764

8,114

4,898

1,577

3,977

921

19 5,74 4

8 5,18 7

4 ,50 0

22,366

1,819

67

(8)

3 0 9 ,6 75

mont hs ended Se

Corporation du

2 0 12

478,432

49,568

2,000

53 0 ,0 0 0

mont hs ended Se

period is reco

the Condensbudgeted ex

ed Financial State

16

19 7

8 1

4

2

)

3 0 8

ep t emb er 3 0

uring the perio

50

5

555

ep t emb er 3 0

orded as follo

ed Consolidaxpenses and s

ements

2 0 11

61,442

19,241

6,636

2,277

3,875

3,311

664

7,4 4 6

1,54 2

4 ,6 55

22,320

904

(220)

1,574

8 ,2 2 1

od

2 0 11

02,433

50,568

1,999

5,0 0 0

ows in

ated self-

Notes to the

14 Go

Quarterly beginningexpenditu

(in thousands

Operat ing fund

Less: ParliameConsolidated

D ef erred o

Capital FuStatementhe same lease.

(in thousands

Balance, begin

Government fu

Amort izat ion o

B alance, en

e Condensed Con

overnm

budgets are g of each yearures and self-g

of dollars)

ding received during

entary appropriat ion Statement of Incom

p erat ing vot e d r

unding receivt of Financial periods as th

of dollars)

nning of year

unding for capital ex

of deferred capital f

nd o f p erio d


ent Fun

established frr and reflect egenerated rev

g period

for operat ing expene (Loss) during perio

rawd o wn

ed is recordePosition. Cap

he related pro

xpenditures

funding


nding (C

rom the annuexpected apprvenue.

nditures recognized od

ed as Deferredpital Funding perty, equipm

nd Quarter Financ

CBC/Ra

Continue

al budget appropriation fun

in the Condensed

d Capital Funis amortized

ment, intangib

cial Report 2012

adio-Canada S

ed)

proved by theding for the y

Sep t em

ding in the Coand recogniz

ble assets and

Sep t em

-2013

Second Quar

e Board of Direyear and seas

mb er 3 0 , 2 0 12

478,432

(478,432)

-

ondensed Cozed on the samd equipment u

mb er 3 0 , 2 0 12

574,027

49,568

(91,993)

53 1,6 0 2

rter Financial

ectors at the sonal impacts

M arch 3 1

1,0

(1,0

onsolidated me basis andunder capital

M arch 3 1

6

(

57

58

Report 2012-

of

1, 2 0 12

028,047

028,047)

-

d over

1, 2 0 12

602,025

102,272

130,270)

74 ,0 2 7

-2013

CBC/Ra

59

adio-Canada

15. Se

Excludingcome frombeing the varies accbased revthe Corpo

Operatingschedule.

16. M

(in thousand

C hang es in

Trade and o

Programmin

M erchandis

Prepaid exp

Promissory

Financial liab

Accounts pa

Provisions

Deferred rev

Pension plan

Second Quar

easona

g government m advertising lowest mainly

cording to mavenue is moreoration’s reven

g expenses te

Movemen

ds of dollars)

W o rking C ap it a

ther receivables

ng

ing inventory

enses

notes receivable

bility related to the s

ayable and accrued l

venue

ns and employee-rela

CBC/Radio

rter Financial

lity

appropriationrevenue that y due to the s

arket and genee stable on a qnue.

end also to fol

nts in W

al are co mp rised

sale of receivables

iabilit ies

ated liabilit ies

o-Canada Secon

Report 2012

ns, approximatend to follow

summer seasoeral economicquarter-by-qu

low a season

Working

d o f :

(

18

T hree mo nt hs


-2013

ately 55 per cw seasonal paon attracting fc conditions a

uarter basis a

nal pattern, as

Capital

2 0 12

43,666

34,644)

(116)

4,523

(2)

-

13,676

(677)

(9)

(7,815)

8 ,6 0 2

end ed Sep t emb


cent of the Coatterns, with tfewer viewersand the progrand represents

s they are influ

l

2 0 11

50,428

(22,869)

(45)

6,228

(1)

70

10,834

7,406

(1,068)

(14,555)

3 6 ,4 2 8

er 3 0 Six


rporation’s sohe second qus. Advertisingamming sches approximate

uenced by the

2 0 1

33,65

(48,46

(10

60,41

(

(35,49

6,62

1,44

(9,50

8 ,558

x mo nt hs ended

ed Financial State

ource of fundsuarter typicallyg revenue alsoedule. Subscrely 20 per cen

e programmin

12

57

63)

08)

10

(6)

-

96)

28

43

07)

8

Sep t emb er 3 0

ements

s y o riber-nt of

ng

2 0 11

24,100

(54,104)

115

80,225

(4)

140

(31,852)

(671)

(694)

(17,069)

18 6

Notes to the

17. R

The Corptrade termrecorded A. Tran

(in thousands

Associate

(in thousands

Other related e

(in thousands

Corporate Pe

The follow

(in thousands

Associate

The amouthe curren

B. Othe

During themerger bewell as to dilution ga

e Condensed Con

elated P

oration entersms applicableat fair value b

sactions wi

of dollars)

of dollars)

entit ies

of dollars)

nsion Plan

wing balances

of dollars)

unts outstandnt or prior per

er Transacti

e second quaetween CSR areflect previo

ain by $13.5 m


Parties

s into transace to all indiviby the Corpor

ith Related

s were outstan

Sep t emb e

A mo unt s o w

ing are unseciods for bad o

ion with Ass

arter of last yeand Sirius in o

ously unrecogmillion.


ctions with relduals and en

ration. The fol

Parties Ex

Three mo nt hs e

Three mo nt hs e

14

14 ,

Three mo nt hs e

nding at the e

er 3 0 , 2 0 12

347

3 4 7

wed b y relat ed p

cured and willor doubtful de

sociate

ear, the Corpoorder to reflec

gnized losses

nd Quarter Financ

CBC/Ra

lated parties nterprises anlowing transa

cluding Go

2 0 12

820

8 2 0

nd ed Sep t ember

2 0 12

-

-

nd ed Sep t ember

2 0 12

4,509

,50 9

nd ed Sep t ember

end of the per

M arch 3 1, 2

4

ar t ies

l be settled inebts in respec

oration adjustect the requirein Sirius. This

cial Report 2012

adio-Canada S

in the normad at market

actions were c

vernment-R

2 0 11

653

6 53

R end ering o f se

r 3 0 Six m

2 0 11

-

-

r 3 0 Six m

R eceip t o f ser

2 0 11

14,432

14 ,4 3 2

r 3 0 Six m

Pensio n cont r ib

riod:

2 0 12 Sep t em

446

4 4 6

A mount s o

cash. No expct of the amou

ed the dilutionments of reves change had

-2013

Second Quar

l course of buprices. Thescarried out wi

Related Ent

2 0 12

1,857

1,8 57

ervices

mont hs ended Se

2 0 12

23

2 3

mont hs ended Se

vices

2 0 12

28,300

2 8 ,3 0 0

mont hs ended Se

ut io ns

b er 3 0 , 2 0 12

-

-

o wed t o relat ed

pense has beunts owed by

n gain recorderse-takeoverd the effect of

rter Financial

usiness, on ne transactionth related par

tities

1

ep t emb er 3 0

ep t emb er 3 0

2

2 6

ep t emb er 3 0

M arch 3 1,

part ies

een recognizerelated partie

ed as part of r accounting, lowering the

60

Report 2012-

ormal ns are rties:

2 0 11

1,408

1,4 0 8

2 0 11

-

-

2 0 11

26,921

6 ,9 2 1

2 0 12

-

-

ed in es.

the as

-2013

CBC/Ra

61

adio-Canada

17. R

C. Tran

CBC/Radby entitiesagencies,The Corpoand purch

These tracomparabprocuremservices w

For the thtransactio(2011—$0six monthwith other(2011—$0no individ

Second Quar

Related

sactions wi

io-Canada is s directly or in affiliations anoration has tr

hases of good

nsactions areble to those went policies, p

which are inde

ree months eons with other.4 million) ans ended Sept

r government-.9 million) anually significa

CBC/Radio

rter Financial

d Parties

ith Governm

a federal Crondirectly contrnd other orgaransactions wds and render

e conducted inwith other entitpricing strategependent of w

ended Septemr government-d $0.2 milliontember 30, 20-related entitid $0.2 million

ant transactio

o-Canada Secon

Report 2012

s (Conti

ment-Relate

own Corporatirolled by the f

anizations (cowith other govering and recei

n the ordinaryties that are ngy and approvwhether the co

mber 30, 2012-related entitie

n of its purcha012, the aggrees amounted

n of its purchans during the


-2013

inued)

ed Entities

ion that operafederal governllectively refeernment-relatving of servic

y course of thnot governmeval process foounterparties

2, the aggregaes amounted

ase of goods aegate amoun to $0.6 millio

ase of goods a six months e


ates in an econment throug

erred to as “goted entities inces.

e Corporationnt-related. Thor purchases s are governm

ate amount ofto $0.5 millio

and services t of the Corpo

on of its rendeand services ended Septem


onomic envirogh its governmovernment-relcluding but no

n’s activities ohe Corporatioand sales of

ment-related e

f the Corporaon of its rende(2011—$0.06 oration’s signering of servic(2011—$0.4 m

mber 30, 2012

ed Financial State

onment dominment authoritielated entities”ot limited to s

on terms n has establisproducts and

entities or not.

tion’s significaering of servic

million). For tificant transac

ces million).There 2 (2011—none

ements

nated es, ”).

sales

shed d .

ant ces the ctions

were e).

Notes to the

18. Fi

The fair vareceivableliabilities, finance lecarrying v

The carryfollowing t

(in thousands

F inancial in

Derivat ive f inaDerivat ive f ina

Derivat ive f ina

F inancial in

Promissory noNet investmen(long-term)

Bonds payablObligat ions un(long-term)

Notes payable1Method refefair values o

• Le

• Le

• Le

(a) The fa

(b) The es

(c) The facash flows

(d) The faexpected character

e Condensed Con

inancial

alues of cashe, the short-tethe short-term

ease, the shorvalue due to th

ing values antable:

of dollars)

nst rument s meas

ancial asset instrumeancial asset instrume

ancial liability instrum

nst rument s meas

otes receivable (longnt in f inance lease

e (long-term)nder f inance lease

e (long-term)

ers to the hierarcof assets and liab

evel 1 – quote

evel 2 – direct

evel 3 – inputs

air value is bas

stimated fair v

ir values relats and discoun

air values relafuture cash flistics.


l Instrum

h, trade and oterm portion ofm portion of thrt-term portionhe short-term

nd fair values

ured at f air valu

ntsnts - stock opt ions

ments

ured at amort ize

g-term)

chy levels describbilities:

ed prices in ac

tly observable

s that are not

sed on quote

value is deter

ted to the varnted using rat

ted to the Colows and were


ments

ther receivabf the net inveshe bonds payn of the notes

m nature of the

of the Corpor

C arryinvalue

ue:

9 7

7

ed co st :

48,77

52,77

282,87

48,91

116,00

Sept e

bed below. Each

ctive markets

e market inpu

based on ob

d forward ma

rmined using a

rious amountstes that reflec

rporation’s vae discounted

nd Quarter Financ

CBC/Ra

les, the shortstment in finayable, the shos payable andese instrumen

ration’s remai

ng es F air values

96 96 78 78

70 70

79 58,504

70 64,789

77 394,084

16 55,754

02 136,075

emb er 3 0 , 2 0 12

level is based o

for identical a

uts other than

servable mar

arket prices at

an option pric

s receivable wct the credit w

arious financiausing Govern

cial Report 2012

adio-Canada S

-term portion nce lease, ac

ort-term portio the option lia

nts.

ining financia

C arryingvalues

80 53

11

49,903

54,077

288,533

54,206

118,885

M

on the transparen

assets or liab

Level 1 input

rket data (uno

t the end of th

cing model.

were determinworthiness of t

al liabilities wnment bond r

-2013

Second Quar

of the promisccounts payabon of the obligability approxi

l instruments

g s F air values

0 80 3 53

1 11

3 58,764

7 64,999

3 396,127

6 58,955

5 132,835

M arch 3 1, 2 0 12

ncy of the inputs

bilities instrum

ts

observable inp

he reporting p

ned using the the various co

were determineates with sim

rter Financial

ssory notes ble and accru

gations under imate their

are listed in t

M et ho d 1

Level 1Level 2

Level 1

used to measure

ments

puts)

eriod.

expected futounterparties.

ed using the ilar terms and

62

Report 2012-

ued

the

N o t e

(a)(b)

(a)

(c)

(c)

(d)

(d)

(d)

e the

ure

d

-2013

CBC/Ra

63

adio-Canada

19. C

A. Prog

The Corpopurchase ended SeSeptembenext 15 ye

B. The

The Corpowhich is eis for a teragreemen

Second Quar

ommitm

gram-related

oration entereagreements.

eptember 30, 2er 30, 2012, thears.

Corporation

oration receivexpected to corm of 49 yearnt amount to $

CBC/Radio

rter Financial

ments

d, Operatin

ed into commManagemen

2012, will reshe Corporatio

n as a Less

ved final apprommence in Ms and three m$344.6 million

o-Canada Secon

Report 2012

g Leases a

mitments by rent estimates thult in future e

on’s total com

sor – Operat

oval to lease March 2013 fomonths less a n.


-2013

and Other

enewing purchhat these newexpenditures ommitments am

ting Leases

out a portion ollowing the cday. Total un


hase agreemew commitmentof approximat

mounted to $92

s

of the Torontcompletion of ndiscounted r


ents and entets, for the six tely $223.4 m25.6 million a

to Broadcast certain buildient payments

ed Financial State

ering into newmonth period

million. As of and will span t

Centre. The ling improvems under the

ements

w d

the

ease, ments,

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