CANWEST GLOBAL COMMUNICATIONS CORP. / FORM 6-K

6-K 1 y65213e6vk.htm CANWEST GLOBAL COMMUNICATIONS CORP. CANWEST GLOBAL COMMUNICATIONS CORP. / FORM 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of November 2002


Commission File Number:	001-14148

CANWEST GLOBAL COMMUNICATIONS CORP.
(Translation of registrant’s name into English)

3100 TD Centre
201 Portage Avenue
Winnipeg, Manitoba,
Canada R3B 3L7
(204) 956-2025
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.


Form 20-F	Form 40-F	ü

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ______.

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______.

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes	No	ü

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	CANWEST GLOBAL COMMUNICATIONS CORP.

Date: November 6, 2002	By:	/s/ John E. Maguire John E. Maguire Vice President, Finance and Chief Financial Officer

[CanWest Global Communications Corp. Logo]

News Release

For Immediate Release
November 5, 2002

CanWest Reports Preliminary 2002 Financial Results

Combined EBITDA up 9% on 2% combined revenue increase from pro forma prior year
Asset sales in fiscal 2002 contribute approximately $500 million to senior debt reduction

WINNIPEG, MB — CanWest Global Communications Corp., Canada’s largest integrated international media company, today reported preliminary results for the year ended August 31, 2002. The results are preliminary, pending completion of the year-end audit at Fireworks Entertainment that was delayed due to a combination of executive time required to complete the recently concluded Comerica credit facility and the application of complex new accounting rules for film and television productions. The Company expects to issue final results within the next two weeks. Management believes that the finalization of the Fireworks audit will not result in a material change to the Company’s overall operating results or financial condition.

The Company reported consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) for the fiscal year ended August 31, 2002 of $470 million, a 7% increase from the $441 million actual results recorded for the previous year. On a combined basis, including the Company’s 57.5% proportional share of EBITDA of Network TEN, the Company’s EBITDA was $553 million, a 9% increase from the $507 million combined pro forma and $510 million combined actual results recorded for the previous year. Pro forma results provide a fiscal 2001 comparison based on the same asset base as existed for the year ended August 31, 2002. Actual results for the previous year included only a partial contribution from newspaper assets, which were acquired on November 16, 2000, and also included a contribution for the full year from CKVU (Vancouver), a television station that was sold effective September 1, 2001.

Consolidated revenues for the 2002 fiscal year were $2,273 million versus consolidated revenues of $1,945 million for the 2001 fiscal year. On a combined basis, revenues for the year increased by 2% to $2,592 million from pro forma combined revenues of $2,546 million last year, and were 18% above actual combined revenues of $2,201 million reported for the prior year.

EBITDA for the Company’s newspaper assets increased by 18% to $292 million, compared to the pro forma result (including the National Post) of $246 million for the previous year. The EBITDA improvement was attributable to cost reductions at all major newspapers and substantially reduced EBITDA losses at the National Post. EBITDA for the year for Canadian television declined by 6% to $195 million from a pro forma (same station) result of $208 million in the previous year, primarily due to higher programming costs associated with investment spending in new program franchises.

Network TEN’s contribution to CanWest’s combined EBITDA increased by 18% to $82 million. New Zealand broadcasting assets reported a 169% increase in EBITDA to $14 million for the year as a result of a substantial improvement in results from TV3/4 and continued growth in EBITDA from radio operations. TV3 Ireland also grew, with CanWest’s share of EBITDA

increasing to $8 million for the year compared to a pro forma result of less than $2 million for the prior year.

The resilience and the steady results in the face of one of the most difficult advertising environments in the last 50 years proved the quality of CanWest’s underlying media businesses.

The preliminary annual results include revenues from Fireworks Entertainment in the amount of $157 million and an EBITDA loss of $0.7 million. Last year, Fireworks Entertainment reported revenues of $182 million and EBITDA of $13.5 million.

Consolidated fourth quarter revenues were $484 million in fiscal 2002 compared to consolidated revenues of $508 million in the prior fiscal year. On a combined basis, revenues in the fourth quarter dropped by 4% to $575 million compared to pro forma combined revenues of $596 million for the previous year. The overall revenue decline for the quarter was attributable to lower revenues from Canadian newspaper operations and from Fireworks Entertainment. Newspaper revenues declined by 6% to $286 million from $304 million for the fourth quarter of last year, but newspaper EBITDA, in fact, improved significantly for the quarter (see below).

Revenues at Fireworks Entertainment declined to $27 million from $76 million in the same quarter last year. The principle reason for the revenue decline was the absence of a major motion picture release in the fourth quarter of fiscal 2002, whereas the release of Rat Race contributed substantial revenues in the fourth quarter of the prior year.

Consolidated fourth quarter EBITDA was $53 million in fiscal 2002, compared to $66 million in the same quarter in the prior fiscal year. On a combined basis the Company recorded EBITDA of $73 million for the fourth quarter, a 20% improvement from the pro forma combined result of $61 million for the same period last year. EBITDA from Canadian television operations declined by 16% to $10 million due mainly to increased investment in programming, while EBITDA generated by CanWest’s publications group (including the National Post) increased by 40% to $52 million from the pro forma result of $37 million last year. All of CanWest’s overseas operations registered significant year-over-year EBITDA growth, with Network TEN recording a 36% increase in its contribution to CanWest’s EBITDA, to $21 million, for the quarter. The decline in fourth quarter revenues at Fireworks contributed to its EBITDA loss of $5.0 million for the quarter compared to EBITDA of $5.5 million last year.

“The past year was a challenge by any measure, but on balance, our results for 2002 reflected good progress on the fundamentals, including concrete accomplishments in the implementation of our multi-platform media strategy,” said Leonard Asper, CanWest’s President and Chief Executive Officer. “Improved operating results are particularly noteworthy at all of our international broadcasting operations. Network TEN solidified its position as the most watched Australian network in its target 16 to 39 year old demographic while increasing TEN’s appeal among older viewers, registering significantly higher revenues and EBITDA in the process. Cost reductions across the board at our newspaper operations were instrumental in achieving a 18% gain in newspaper EBITDA, despite a 6% reduction in revenues. Much of this was a result of significant progress in reducing EBITDA losses at the National Post.”

Aggressive pursuit of operating efficiencies, cost reductions and multi-platform advertising products was a significant factor in ameliorating the negative impact of the weaker economy. As a result, the Company believes it has become more resilient to the effects of difficult ad markets. These operating improvements should contribute to higher EBITDA as advertising demand picks up.

At the end of the year, the Company and certain of its operations recorded a number of one-time items that did not affect EBITDA or the generation of free cash flow. These items, which include write-downs of certain investments, did however negatively affect net earnings, reducing what would otherwise have been a net profit of $37 million or $0.21 per share to net earnings for the year of $13 million, or $0.07 per share, for the twelve months compared to net earnings of $46.6 million or $0.27 per share last year. Net earnings on a combined basis and a consolidated basis are the same.

Highlights of the fourth quarter and for the period after the end of the year include the following:

• The Company completed the sale to GTC of all CanWest-owned community newspapers and related assets in Atlantic Canada and Saskatchewan for a cash price of $255 million, the proceeds of which were applied to the reduction of senior debt.

• Network TEN reached a favourable settlement of a tax dispute with the Australian Tax Office that ensures the continued tax deductibility of subordinated debenture interest until June 30, 2004. The settlement does not affect TEN’s contribution to CanWest’s EBITDA in 2002, will not affect TEN’s EBITDA contributions to CanWest’s combined EBITDA in future years and will not affect expected cash distributions from TEN in 2003.

• Network TEN acquired the remaining 40% of Eye Corp, Australia’s leading out-of-home advertising company, for A$10 million. Complete ownership will enable TEN to implement the necessary realignments of management and strategy to enable Eye Corp to achieve its full earnings potential more quickly than would have otherwise been possible.

• CanWest will soon enter the Canadian radio business with the launch of 99.1COOL in Winnipeg in early 2003. The new station will go on air early in calendar 2003 with programming designed to appeal to the underserved community of jazz music lovers.

• The Company secured a stand-alone financing facility of US $110 million(C$172 million) for its production and distribution subsidiary, Fireworks Entertainment. The facility reflects investor confidence in the business strategy of Fireworks and the underlying value of its extensive film library.

Looking ahead to 2003, Mr. Asper said, “ Our most important task will be to press ahead on the many projects we initiated in 2001 and 2002. Debt reduction remains our top priority. We have made significant progress in the divestiture of non-core newspaper and TV assets over the past year, bringing in approximately $500 million in proceeds that were applied to reduce our senior debt. We continue to explore opportunities to divest or monetize additional assets that are not central to our corporate strategy, at prices which we believe reflect their fair value.”

Mr. Asper added, “We see encouraging signs of improved ad markets as we move into fiscal 2003. Up-front television advertising sales in Canada are tracking well ahead of last year. Global remains the first choice of Canadians, with ratings in major markets well ahead of our main competitor. BBM Spring Diaries report that Global National, the early evening national news program with Kevin Newman, has overtaken CBC’s The National with Peter Mansbridge and is closing in on CTV National News with Lloyd Robertson. An average of 802,000 viewers 18 years or older tuned in to Global National compared to 748,000 to CBC and 856,000 to CTV. The CBC’s Canada Now early evening news trails with an average of 532,000 viewers.” (Source: BBM diary survey spring, 2002)

“Readership is growing at many of our major metro newspapers, and the National Post is ahead of its principal competitor in most markets outside Toronto with gains being made in Toronto over the summer months as more Toronto and arts content was added to this paper. We are encouraged that the trend line is positive in newspaper ad sales with room for significant further growth just to attain their peak levels of two years ago,” said Mr. Asper.

This press release contains certain comments or forward-looking statements that are based largely on the Company’s current expectations and are subject to certain risks, trends and uncertainties. These factors could cause actual future performance to vary materially from current expectations.

CanWest Global Communications Corp. (NYSE: CWG; TSE: CGS.S and CGS.A; www.canwestglobal.com) is an international media company. CanWest, now Canada’s largest publisher of daily newspapers owns, operates and/or holds substantial interests in newspapers, conventional television, out-of-home advertising, specialty cable channels, radio networks and Internet portals in Canada, New Zealand, Australia, Ireland and the United Kingdom. Fireworks, the Company’s program production and distribution division, operates in several countries throughout the world.

For further information contact:

Geoffrey Elliot,
Vice President, Corporate Affairs
gelliot@canwest.com

John Maguire,
Chief Financial Officer and Vice President, Finance
jmaguire@canwest.com

Telephone: (204) 956-2025
Fax: (204) 947-9841

CANWEST GLOBAL COMMUNICATIONS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(In thousands of Canadian dollars except as otherwise noted)


		For the three months ended						For the year ended
		August 31			August 31			August 31			August 31
		2002			2001			2002			2001

Revenue			484,059			508,382			2,272,783			1,944,775
Operating expenses			302,848			352,981			1,244,263			1,121,392
Selling general and administrative expense			128,699			89,629			558,214			382,312

Operating profit before amortization (EBITDA)			52,512			65,772			470,306			441,071
Amortization of intangibles and goodwill			4,375			23,904			17,500			90,159
Amortization of property and equipment			19,290			18,889			74,654			60,565
Other amortization			1,839			187			6,670			5,240

Earnings before financing expenses (EBIT)			27,008			22,792			371,482			285,107
Financing expenses			(90,409	)		(92,804	)		(376,632	)		(356,755	)
Investment income and gains net of writedowns of investments			(30,977	)		—			32,043			28,630
Dividend income			—			—			3,241			2,952

Earnings (loss) before income taxes			(94,378	)		(70,012	)		30,134			(40,066	)
Provision for (recovery of) income taxes			(24,794	)		(2,318	)		7,108			(59,019	)

Earnings (loss) before the following			(69,584	)		(67,694	)		23,026			18,953
Minority interests			—			1,497			4,330			(3,196	)
Interest in earnings (loss) of Network TEN			(34,003	)		34,819			(11,815	)		52,567
Interest in loss of equity accounted affiliates			(557	)		(5,670	)		(1,523	)		(14,491	)
Realized currency translation adjustments			—			—			(1,000	)		(7,200	)

Net earnings (loss)			(104,144	)		(37,048	)		13,018			46,633
Amortization of indefinite life intangibles and goodwill – net of tax			—			17,355			—			64,338
Amortization of indefinite life intangibles and goodwill in equity accounted affiliates			—			1,771			—			6,211

Adjusted net earnings (loss)			(104,144	)		(17,922	)		13,018			117,182

Earnings per share:⁽¹⁾
Net earnings (loss)
	Basic		($0.59	)		($0.22	)	$	0.07		$	0.27
	Diluted		($0.59	)		($0.22	)	$	0.07		$	0.27
Adjusted net earnings (loss)
	Basic		($0.59	)		($0.10	)	$	0.07		$	0.68
	Diluted		($0.59	)		($0.10	)	$	0.07		$	0.68

⁽¹⁾

Earnings per share have been calculated on the basis of the weighted average number of shares outstanding during the year of 176,956,800 (2001 – 171,421,200).

The following statements have been prepared on a combined basis to proportionately consolidate the Company’s 57.5% interest in Network TEN. These financial statements are supplementary information for shareholders, designed to provide more meaningful and complete disclosure of the Company’s operations.

CANWEST GLOBAL COMMUNICATIONS CORP.
COMBINED STATEMENTS OF EARNINGS
(UNAUDITED)
(in thousands of Canadian dollars, except as otherwise noted)


		For the three months ended						For the year ended
		August 31			August 31			August 31			August 31
		2002			2001			2002			2001

Revenue			574,535			576,085			2,592,283			2,200,753
Operating expenses			493,317			490,039			2,012,513			1,670,972

Operating profit before undernoted			81,218			86,046			579,770			529,781
Corporate and development expenses			8,417			6,953			26,808			19,606

Operating profit before amortization (EBITDA)			72,801			79,093			552,962			510,175
Amortization of intangibles and goodwill			4,375			25,675			17,500			96,370
Amortization of property and equipment			21,531			20,402			82,292			65,477
Other amortization			2,114			287			7,731			5,692

Earnings before financing expenses (EBIT)			44,781			32,729			445,439			342,636
Financing expenses			(94,382	)		(96,290	)		(389,800	)		(365,176	)
Investment income and gains net of loss on
writedown of investments			(40,879	)		28,643			22,141			43,825
Dividend income			—			—			3,241			2,952

Earnings (loss) before income taxes			(90,480	)		(34,918	)		81,021			24,237
Provision for (recovery of) income taxes			(4,883	)		(367	)		42,364			(44,239	)

Earnings (loss) before the following			(85,597	)		(34,551	)		38,657			68,476
Minority interests			792			3,173			7,053			(693	)
Goodwill impairment loss			(18,782	)		—			(30,169	)		—
Interest in loss of equity accounted affiliates			(557	)		(5,670	)		(1,523	)		(13,950	)
Realized currency translation adjustments			—			—			(1,000	)		(7,200	)

Net earnings (loss)			(104,144	)		(37,048	)		13,018			46,633
Amortization of indefinite life intangibles
and goodwill – net of tax			—			19,126			—			70,549

Adjusted net earnings (loss)			(104,144	)		(17,922	)		13,018			117,182

Earnings per share:⁽¹⁾
Net earnings (loss)
	Basic		($0.59	)		($0.22	)	$	0.07		$	0.27
	Diluted		($0.59	)		($0.22	)	$	0.07		$	0.27
Adjusted net earnings (loss)
	Basic		($0.59	)		($0.10	)	$	0.07		$	0.68
	Diluted		($0.59	)		($0.10	)	$	0.07		$	0.68

⁽¹⁾

Earnings per share have been calculated on the basis of the weighted average number of shares outstanding during the year of 176,956,800 (2001 – 171,421,200).

CANWEST GLOBAL COMMUNICATIONS CORP. ⁽¹⁾
COMBINED BUSINESS SEGMENT INFORMATION
(in thousands of Canadian dollars)
(unaudited)


		For the year ended August 31

		2002			2001			2001
		Actual			Actual			Proforma
								(2)

REVENUE
*Television*
Canada			687,833			632,857			632,857
	– CKVU		—			68,170			—
Australia – Network TEN			281,427			233,117			233,117
New Zealand – TV3 and TV4			69,079			58,436			58,436
Ireland – TV3⁽³⁾			28,317			31,056			20,321

			1,066,656			1,023,636			944,731
Television operations in development – Canada			4,055			—			—
*Radio – New Zealand*			60,724			56,864			56,864
*Entertainment – Canada*			156,914			181,985			181,985
*Publications – Canada*⁽⁴⁾			1,263,715			917,775			1,339,842
*Outdoor – Australia*			38,074			22,861			22,861
*On-line Operations – Canada*			7,360			6,532			8,336
Inter-segment revenues			(5,215	)		(8,900	)		(8,900	)

TOTAL REVENUE			2,592,283			2,200,753			2,545,719

OPERATING PROFIT
*Television*			195,025			208,249			208,249
Canada
	– CKVU		—			21,245			—
Australia – Network TEN			81,782			69,212			69,212
New Zealand – TV3 and TV4			(1,938	)		(8,939	)		(8,939	)
Ireland – TV3 ⁽³⁾			7,654			2,748			1,734

			282,523			292,515			270,256
Television operations in development – Canada			(4,273	)		—			—
*Radio – New Zealand*			16,361			14,301			14,301
*Entertainment – Canada*			(743	)		13,551			13,551
*Publications – Canada* ⁽⁴⁾			291,952			224,083			246,470
*Outdoor – Australia*			874			1,610			1,610
*On-line Operations – Canada*			(6,924	)		(16,279	)		(19,493	)

SEGMENT OPERATING PROFIT			579,770			529,781			526,695
Corporate expenses			26,808			19,606			19,606

OPERATING PROFIT (EBITDA)			552,962			510,175			507,089

⁽¹⁾		Combined results include the Company’s 57.5% economic interest in Network TEN.

⁽²⁾		Proforma results include the results from Southam Publications for the quarter ended November 30, 2000, include the results of the National Post on a consolidated basis, exclude CKVU which was sold effective August 31, 2001 and include TV3 Ireland on a proportionately consolidated basis.

⁽³⁾		Effective April 1, 2001 results include CanWest’s proportionate interest (45%) in the operations of TV3 Ireland. Prior periods are consolidated.

⁽⁴⁾		Includes results of the National Post on a consolidated basis from September 1, 2001. These results were previously accounted at equity.

CANWEST GLOBAL COMMUNICATIONS CORP. ⁽¹⁾
COMBINED BUSINESS SEGMENT INFORMATION
(in thousands of Canadian dollars)
(unaudited)


		For the three months ended August 31

		2002			2001			2001
		Actual			Actual			Proforma
								(2)

REVENUE
*Television*
Canada			125,199			114,574			114,574
	– CKVU		—			11,386			—
Australia – Network TEN			81,331			59,280			59,280
New Zealand – TV3 and TV4			20,341			15,247			15,247
Ireland – TV3 ⁽³⁾			6,344			4,744			4,744

			233,215			205,231			193,845
Television operations in development
	– Canada		1,694			—			—
*Radio – New Zealand*			15,815			13,603			13,603
*Entertainment – Canada*			27,252			76,206			76,206
*Publications – Canada* ⁽⁴⁾			285,597			272,420			303,669
*Outdoor – Australia*			9,146			8,424			8,424
*On-line Operations – Canada*			1,816			1,686			1,686
Inter-segment Revenues			—			(1,485	)		(1,485	)

TOTAL REVENUE			574,535			576,085			595,948

OPERATING PROFIT
*Television*
Canada			9,879			11,770			11,770
	– CKVU		—			331			—
Australia – Network TEN			20,693			15,162			15,162
New Zealand – TV3 and TV4			2,105			(2,373	)		(2,373	)
Ireland – TV3 ⁽³⁾			847			123			123

			33,524			25,013			24,682
Television operations in development – Canada			(1,901	)		—			—
*Radio – New Zealand*			4,713			3,595			3,595
*Entertainment – Canada*			(4,968	)		5,511			5,511
*Publications – Canada* ⁽⁴⁾			51,724			54,963			36,968
*Outdoor – Australia*			(404	)		(114	)		(114	)
*On-line Operations – Canada*			(1,470	)		(2,922	)		(2,922	)

SEGMENT OPERATING PROFIT			81,218			86,046			67,720
Corporate expenses			8,417			6,953			6,953

OPERATING PROFIT (EBITDA)			72,801			79,093			60,767

⁽¹⁾		Combined results include the Company’s 57.5% economic interest in Network TEN.

⁽²⁾		Proforma results include the results from Southam Publications for the quarter ended November 30, 2000, include results of the National Post on a consolidated basis, exclude CKVU which was sold effective August 31, 2001 and include TV3 Ireland on a proportionately consolidated basis.

⁽³⁾		Effective April 1, 2001 results include CanWest’s proportionate interest (45%) in the operations of TV3 Ireland. Prior periods are consolidated.

⁽⁴⁾		Results of the National Post are consolidated from September 1, 2001, these results were previously accounted at equity.

	•		The Company completed the sale to GTC of all CanWest-owned community newspapers and related assets in Atlantic Canada and Saskatchewan for a cash price of $255 million, the proceeds of which were applied to the reduction of senior debt.

	•		Network TEN reached a favourable settlement of a tax dispute with the Australian Tax Office that ensures the continued tax deductibility of subordinated debenture interest until June 30, 2004. The settlement does not affect TEN’s contribution to CanWest’s EBITDA in 2002, will not affect TEN’s EBITDA contributions to CanWest’s combined EBITDA in future years and will not affect expected cash distributions from TEN in 2003.

	•		Network TEN acquired the remaining 40% of Eye Corp, Australia’s leading out-of-home advertising company, for A$10 million. Complete ownership will enable TEN to implement the necessary realignments of management and strategy to enable Eye Corp to achieve its full earnings potential more quickly than would have otherwise been possible.

	•		CanWest will soon enter the Canadian radio business with the launch of 99.1COOL in Winnipeg in early 2003. The new station will go on air early in calendar 2003 with programming designed to appeal to the underserved community of jazz music lovers.

	•		The Company secured a stand-alone financing facility of US $110 million(C$172 million) for its production and distribution subsidiary, Fireworks Entertainment. The facility reflects investor confidence in the business strategy of Fireworks and the underlying value of its extensive film library.