40-F

As filed with the Securities and Exchange Commission on November 30, 2005

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

or

x ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: August 31, 2005

1-14148

(Commission file number)

CanWest Global Communications Corp.

(Exact name of Registrant as specified in its charter)

Canada	4833
(Jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)
3100 TD Centre 201 Portage Avenue Winnipeg, Manitoba, Canada R3B 3L7 (204) 956-8025	CanWest International Corp. c/o Corporation Service Company 2711 Centerville Road Wilmington, Delaware 19808 (302) 636-5400
(Address and telephone number of principal executive offices)	(Name, address and telephone number of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
Non-Voting Shares	The New York Stock Exchange, Inc. The Toronto Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

For annual reports, indicate by check mark the information filed with this Form:

x Annual information form x Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

98,813,655	Subordinate Voting Shares outstanding
76,785,976	Multiple Voting Shares outstanding
1,795,092	Non-Voting Shares outstanding

Indicate by check mark whether the registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate the filing number assigned to the registrant in connection with such Rule.

Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

CANWEST GLOBAL COMMUNICATIONS CORP.

REGISTRATION STATEMENT ON FORM 40-F

DOCUMENTS FILED PURSUANT TO GENERAL INSTRUCTIONS

In accordance with General Instruction B(3) of Form 40-F, the Registrant hereby files Exhibit 99.1 and Exhibit 99.2 as set forth in the Exhibit Index hereto.

In accordance with General Instruction B(6)(a)(1) of Form 40-F, the Registrant hereby files Exhibit 99.3 and Exhibit 99.4 as set forth in the Exhibit Index hereto.

In accordance with General Instruction B(6)(a)(2) of Form 40-F, the Registrant hereby files Exhibit 99.5 as set forth in the Exhibit Index hereto.

In accordance with General Instruction D(9) of Form 40-F, the Registrant hereby files Exhibit 99.6 as set forth in the Exhibit Index hereto.

Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2005. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that the disclosure controls and procedures as of August 31, 2005 were effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported as and when required, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during fiscal year 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Audit Committee Financial Expert

All of the members of the Audit Committee are financially literate and our Board has determined that Dr. Barber and Mr. Drybrough qualify as audit committee financial experts and are independent under the applicable New York Stock Exchange independence standards.

Code of Ethics

We have adopted a Code of Ethics which applies to our Chief Executive Officer and senior financial officers. The code of ethics is posted on our website at www.canwestglobal.com. If we make substantive amendments to the Code of Ethics or grant any waiver, we will disclose the nature of such amendment or waiver on our website within five days of such amendment or waiver.

Principal Accountant Fees and Services

The disclosure provided on page 49 of Exhibit 99.1 under the heading “Audit Committee Information—Principal Accountant Fees and Services” is incorporated herein by reference.

Contractual Obligations

The disclosure provided on page 26 of Exhibit 99.2 under the heading “Contractual Obligations and Commitments” is incorporated herein by reference.

Off Balance Sheet Arrangements

In connection with the disposition of assets, the Company has provided customary representations and warranties that range in duration. In addition, as is customary, the Company has agreed to indemnify the buyers of certain assets in respect of certain liabilities pertaining to events occurring prior to the respective sales relating to taxation, environmental, litigation and other matters. The Company is unable to estimate the maximum potential liability for these indemnifications as the underlying agreements often do not specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined.

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

Undertaking

We undertake to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

Consent to Service of Process

We filed an Appointment of Agent for Service of Process on Form F-X on November 29, 2005.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

	CANWEST GLOBAL COMMUNICATIONS INC.
Date: November 30, 2005	By:	/s/ John E. Maguire
		John E. Maguire Chief Financial Officer

EXHIBIT INDEX

Number	Description
99.1	Annual Information Form for the year ended August 31, 2005
99.2	Management’s Discussion and Analysis for the fiscal year ended August 31, 2005 and audited consolidated financial statements and the notes thereto for the fiscal years ended August 31, 2005 and 2004, together with the report of the auditors thereon
99.3	CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.4	CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.5	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.6	Consent of PricewaterhouseCoopers LLP

EX-99.1

Exhibit 99.1

CANWEST GLOBAL COMMUNICATIONS CORP.

ANNUAL INFORMATION FORM

November 28, 2005

ANNUAL INFORMATION FORM

CANWEST GLOBAL COMMUNICATIONS CORP.

NOVEMBER 28, 2005

TABLE OF CONTENTS

CORPORATE STRUCTURE	3
Name, Address and Incorporation	3
Intercorporate Relationships	4
GENERAL DEVELOPMENT OF THE BUSINESS	5
Historical Development	5
Recent Developments	5
DESCRIPTION OF THE BUSINESS	7
Our Business	7
Risk Factors	31
DIVIDEND POLICY	40
CAPITAL STRUCTURE	40
MARKET FOR SECURITIES	42
DIRECTORS AND OFFICERS	45
LEGAL PROCEEDINGS	46
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	47
INTEREST OF EXPERTS	47
TRANSFER AGENT AND REGISTRARS	47
ADDITIONAL INFORMATION	48
AUDIT COMMITTEE INFORMATION	48
APPENDIX – AUDIT COMMITTEE CHARTER	SCHEDULE A

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CORPORATE STRUCTURE

CanWest Global Communications Corp. is an international media company with interests in broadcast television, newspapers, radio, specialty cable channels, outdoor advertising and online operations in Canada, Australia, New Zealand, the Republic of Ireland and the United Kingdom.

The Company was originally incorporated as Keigwin Investments Limited under the laws of the Province of Ontario on June 14, 1979. The Company’s name was changed to CanWest Communications Enterprises, Inc. by articles of amendment dated April 16, 1985 and continued under the laws of the Province of Manitoba by articles of continuance dated May 27, 1986. By articles of amendment dated September 19, 1990, the Company’s name was changed to CanWest Global Communications Corp. and by articles of continuance dated July 25, 1991 the Company was continued under the laws of Canada (the Canada Business Corporations Act). Our registered office and corporate head office is located at CanWest Global Place, 31st Floor, 201 Portage Avenue, Winnipeg, Manitoba, Canada R3B 3L7.

Unless otherwise specified, all information in this annual information form is presented as at August 31, 2005.

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⁽¹⁾ CanWest MediaWorks Limited Partnership was created on September 7, 2005. On October 13, 2005, it acquired CanWest MediaWorks Publications Inc. A 25.8% interest was sold to CanWest MediaWorks Income Fund, a new public company.

⁽²⁾ We own a 14.5% interest, which, together with our ownership of subordinated and convertible debentures, represents a 56.4% economic interest.

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GENERAL DEVELOPMENT OF THE BUSINESS

Historical Background

We are an international media company with interests in broadcast television, newspapers, radio, specialty cable channels, outdoor advertising and online operations in Canada, Australia, New Zealand, the Republic of Ireland and the United Kingdom. In fiscal 2000, we significantly expanded our media operations in Canada with the acquisition of nine television stations of WIC Western International Communications Inc. and the purchase of all of the major Canadian and Internet assets of Hollinger Inc., including the metropolitan daily newspapers in nearly every large city in Canada and the National Post.

In the period subsequent to these acquisitions we have worked to integrate our Canadian media operations, reduce operating costs and improve profitability. We have also completed the sale of a number of non-strategic assets in the ongoing drive to reduce corporate debt. In fiscal 2004 we launched an IPO for our New Zealand television and radio operations through which we spun off a 30% interest in CanWest MediaWorks NZ. Recently we transferred a 25.8% interest in our Canadian publishing and interactive operations to an income fund, CanWest MediaWorks Income Fund.

Through these divestitures and partial divestitures as well as through refinancing of debt we have significantly reduced our debt and have established senior credit facilities which will provide us with increased financial flexibility.

Recent Developments

CanWest MediaWorks Income Fund

In October 2005, we transferred our investment in our Canadian newspaper and interactive operations excluding the National Post as well as certain shared service operations, which provide customer support and administrative services (the “Publications Group”) to a new entity, CanWest MediaWorks Limited Partnership (“Limited Partnership”). Concurrently, CanWest MediaWorks Income Fund (the “Fund”) closed its initial public offering of units on The Toronto Stock Exchange trading under the symbol CWM.UN and invested the net proceeds of $517.0 million for units of the Limited Partnership representing a 25.8% interest. We hold a 74.2% interest in the Limited Partnership. Monthly cash distributions are paid by the Limited Partnership to the Fund and to us out of the distributable cash generated by the operations of the Limited Partnership. A portion of our 74.2% interest, representing 20% of the total units of the Limited Partnership, is in the form of subordinated units. We will continue to consolidate the operations of the Publications Group with a minority interest charge to reflect the 25.8% ownership interest of the Fund. The dilution gain or loss related to the transaction has not been determined.

In October 2005, the Limited Partnership and its parent company CanWest MediaWorks Inc. obtained new senior credit facilities in the amounts of $1 billion and $500 million, respectively.

$517.0 net proceeds from the issuance of the Limited Partnership units to the Fund, $400.6 million in proceeds from the parent company facility, and $822.5 million in proceeds of Limited Partnership credit facilities were utilized to repay debt and associated cross currency interest rate swaps, resulting in a net reduction of consolidated debt of $400.0 million.

While we continue to have substantial involvement in the operation of the Limited Partnership, its operations are directed and governed by a separate management and Board of Directors. The ongoing relationships between the Limited Partnership, the Fund and us are subject to a number of agreements.

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Other Developments

In September 2005, OFCOM, the British broadcast and telecommunications regulator, awarded us a licence to launch an FM radio station in the Solent region on the south coast of England.

In September, 2005, together with Turkish investors, we were declared the highest bidder in an auction by a Turkish state agency of rights to acquire two Turkish national radio national stations Super FM and Metro FM.

In June 2005, we completed an offer to exchange up to US$761,054,211 aggregate principal amount of registered 8% Senior Subordinated Notes (the “New Notes”) due 2012 for any and all of our outstanding unregistered 8% Senior Subordinated Notes (the “Old Notes”) due 2012. This was the final step in registering the 8% Notes issued in November 2004 in connection with the refinancing of the 12 ¹/8% Hollinger Notes. The effect of these transactions was to replace $903.6 million of 12 ¹/8% junior subordinated notes with $908.1 million (US$760.1 million) of new 8% senior subordinated notes.

In July 2004, through a series of transactions, we transferred our net assets in our New Zealand media operations to CanWest MediaWorks (NZ) Limited for 70% of the ordinary shares of CanWest MediaWorks (NZ) Limited and repayment of inter-company debt. Concurrent with the transfer of the net assets, CanWest MediaWorks (NZ) Limited completed a Initial Public Offering for 30% of its ordinary shares for NZ$100 million, net of costs of NZ$4 million (net proceeds of $83.3 million). In addition, CanWest MediaWorks (NZ) Limited issued a term bank loan of NZ$200 million.

In June 2004, we sold our interest in UTV for proceeds of $144 million, which were used to reduce corporate debt.

In July 2003, we sold our holdings of more than 2 million shares of SBS Broadcasting S.A.. Proceeds of $44 million from this sale were used to reduce corporate debt.

In May 2003, our wholly owned subsidiary, Global Communications Ltd. was awarded a radio broadcast licence by the Canadian Radio-television and Telecommunications Commission (CRTC) for an FM station in the Kitchener-Waterloo region of Ontario. This radio licence was the second awarded to CanWest in Canada. The new station, The Beat, launched early 2004 and joins Cool FM in Winnipeg, which successfully launched in February 2003.

In February 2003 we completed the sale of certain community newspapers and related assets in Southern Ontario to Osprey Media Group Inc. for cash proceeds of $194 million, which were used to reduce corporate debt.

In December 2002, we redeemed all of our outstanding Series 2 Preference Shares for cash consideration of $57.7 million. The Series 2 Preference Shares were issued in May 2001 on the amalgamation of certain subsidiaries of CanWest.

In August 2002, we sold certain community newspapers and related assets in Atlantic Canada and Saskatchewan to G.T.C. Transcontinental Group Ltd. for aggregate cash consideration of $257 million, which was used to reduce corporate debt.

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DESCRIPTION OF THE BUSINESS

Our business

Overview

We are a public company whose shares are listed on the Toronto Stock Exchange and The New York Stock Exchange.

We are an international media company with interests in broadcast television, newspapers, radio, specialty cable channels, outdoor advertising and online operations in Canada, Australia, New Zealand, the Republic of Ireland and the United Kingdom.

In Canada, we are a major multi-platform media company, with television, publishing, radio and online operations that serve common geographic areas, providing our viewers, readers and advertisers with extensive local, regional and national coverage. We own and operate the Global Television Network, which covers approximately 97% of Canada’s English-language market. We are also the largest publisher of daily newspapers in Canada with aggregate daily paid circulation of approximately 1.3 million copies, representing 36% of Canada’s average daily English-language newspaper sales. In addition, we own an extensive collection of internet websites providing content of local, regional and national interest.

We believe the combination of our media assets in Canada provides us with a number of competitive advantages, including the ability to:

• provide advertisers with multi-platform media advertising solutions designed to reach a mass audience or to target specific demographic or special-interest groups;

• leverage the news and information production resources of our broadcasting, publishing and internet operations to provide our audiences with superior depth and scope in local, regional and national coverage; and

• cross-promote our brands, programs and other content across our various media platforms.

We also own significant interests in media properties in other English-language markets. In Australia, we own a 56.4% economic interest in TEN Group, which owns Network TEN, one of three privately-owned national television networks. In New Zealand, we own a 70% interest in CanWest MediaWorks (NZ), which operates two national television networks, 3 and C4, and a leading group of radio stations, RadioWorks. Our other investments include a 45% interest in the only privately-owned television network in the Republic of Ireland, TV3.

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For the year ended August 31, 2005, we generated revenue of $3,073 million, compared to $2,911 million in the prior year.

Operating Segments

	Revenue For the year ended August 31
	2005	2004 (1)
	$000	$000
Television
Canada	698,644	690,302
Australia - Network TEN	783,315	721,247
New Zealand	122,995	108,236
Ireland	37,519	34,152
	1,642,473	1,553,937
Radio - New Zealand	93,428	86,717
Publishing and Online – Canada	1,228,851	1,193,629
Outdoor – Australia	107,790	77,117
Total revenue	3,072,542	2,911,400

⁽¹⁾ Restated for the adoption of AcG-15 – Consolidation of Variable Interest Entities. Accordingly, we have consolidated the results of TEN Group; as a result the operating segments of Network Ten and Outdoor have been restated above. Previously, TEN Group was accounted on an equity basis.

Business Strategy

In the consolidating and converging media landscape, our objective is to increase our revenue and operating income before amortization by leveraging our media platforms and acquiring, developing and controlling content. To achieve this objective, we intend to:

• Offer comprehensive advertising solutions. Our broad range of media platforms allows us to deliver multi-platform solutions to our advertising clients. We are able to sell flexible packages of advertising across various media in local, regional and national markets. Our Canadian television, publishing and internet platforms provide advertisers with an effective means to reach a mass market or to target specific demographic and special interest groups. In New Zealand, our combination of a national television network and urban and rural radio networks allows us to design advertising solutions tailored to our clients’ needs.

• Leverage content. By creating our own news and sports content and purchasing or commissioning entertainment content from our affiliates and others, we are able to supply our own platforms and syndicate our content to non-competing media outlets, reducing our effective costs. The combination of our television, publishing and internet platforms makes us a leading owner and provider of content in Canada. Our news and information organization provides extensive resources to develop content for delivery across our multiple distribution platforms and enables us to provide complete and in-depth coverage of local, regional and national news and information to our audiences.

• Cross-promote and co-brand our properties. The geographic overlap of our television, publishing, radio and internet platforms enables us to cross-promote our properties in order to grow audiences, strengthen brand recognition and increase advertising revenue. For example, in Canada we use our newspapers to promote our television programs and websites. Our variety of platforms also enables us to pursue co-branding and brand extension opportunities.

• Achieve economies of scale. Through expansion of our operations across multiple markets and media platforms, we have achieved greater purchasing power, giving us a competitive advantage in acquiring the rights to content. In addition, we can amortize the cost of content across a larger number of viewers, readers and listeners.

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• Expand operations in English-language markets and other emerging markets. We intend to develop and acquire additional media assets in our existing markets and expand into other English-language markets. While tastes and preferences vary among each of the communities we serve, we are often able to utilize programming and other content purchased, developed or produced for one market in our other markets.

• Improve efficiency and reduce operating costs. We expect to realize cost savings through the integration of our publishing assets and other acquired assets into our existing operations and through the reduction of duplicative general and administrative expenses.

Canadian Media Operations

Canadian Television Industry

Three English-language national broadcast networks operate in Canada: the Global Television Network, the CTV television network and the Canadian Broadcasting Corporation. The Global Television Network and CTV are both privately-owned, commercial networks, while the CBC is government-owned and financed by a combination of federal government grants and commercial revenue. Several French-language networks and a number of independent stations also serve local markets. In addition to Canadian stations, Canadian viewers generally have access to U.S. stations, directly over the air, via cable or satellite.

Canada has a well-developed cable television market that provides viewers with a wide range of viewing alternatives. Most Canadians have access to a number of Canadian specialty channels as well as a number of American broadcast and cable channels. In fall 2005, there were approximately 10.9 million households in Canada with cable and/or satellite services.

A significant aspect of television broadcasting in Canada is simultaneous program substitution, or simulcasting, a regulatory requirement under which Canadian cable television systems with over 2,000 subscribers are required to substitute the local Canadian signal, including the Canadian commercials, for the broadcast of the identical program by a U.S. station when the two programs are broadcast at the same time. As a result, the local Canadian broadcaster’s signal and advertisements appear on two cable channels simultaneously, thereby increasing the size of the Canadian broadcaster’s audience. Direct-to-home satellite services also have program substitution obligations. Program substitution is primarily intended to compensate Canadian broadcasters that have purchased exclusive local broadcast rights for U.S. programs for the encroachment on their market by U.S. broadcasters via cable and direct-to-home satellite services.

Television broadcasting in Canada is subject to cable priority carriage rules, whereby cable systems with over 2,000 subscribers must carry the signals of local broadcasters as part of their basic service. The guaranteed carriage enjoyed by local television broadcasters under these rules is designed to ensure that they reach cable households and enjoy advantageous channel placement.

Also important to television broadcasting operations is the specialty service access rules, which require large cable systems operating in an English-language market to deliver each English-language analog specialty and category 1 digital specialty service licensed for the area, other than certain religious services, to the extent of available channels. Similarly, direct-to-home satellite services must, distribute all Canadian specialty services, other than certain religious services. These rules help ensure wider carriage for Canadian specialty services than might otherwise be secured through negotiation with the cable companies.

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In addition, Canadian broadcasters are required to show specified percentages of programming of Canadian origin during a broadcast day and, specifically, during the evening period.

The following table reflects the respective share of the English-language audience held by the major Canadian networks and station groups in Spring 2005 as a percentage of both Canadian television and total television viewership:

Network or Station Group	Share of Canadian Television		Share of Total Television
Global Television Network and our “CH” stations (1)	18.8	%	12.5	%
CTV	25.6		17.1
CBC	6.9		4.6
CHUM	11.2		7.5
Other Canadian broadcast stations	3.5		2.4
Pay and Specialty Canadian cable channels	34.0		22.8
Total English-language broadcasting	100.0	%	66.9	%

Source: Bureau of Broadcast Measurement (“BBM”) Spring 2005 Sweep, Monday to Sunday, 6:00 a.m. to 2:00 a.m. adults ages 18 to 49.

⁽¹⁾ Includes our two CBC affiliated stations, but not our specialty cable channels.

Television broadcasting in Canada is regulated by the CRTC. Canada maintains significant restrictions on the foreign ownership of Canadian broadcast television stations and specialty cable channels. For more information, see “Regulation—Canadian Television.”

Our Canadian Television Operations

General

We are one of the largest owners and operators of commercial broadcast television stations in Canada, as measured by both revenue and operating income before amortization. We own and operate 16 television stations licensed to provide over the air television broadcasting services in eight provinces. Eleven of our stations comprise the Global Television Network, which broadcasts to all major metropolitan areas in Canada, including Toronto, Montreal, Vancouver, Ottawa, Calgary, Edmonton, Quebec and Winnipeg and which covers an estimated 23.6 million people, or approximately 97% of Canada’s English-language market.

Four of our stations operate as independents under the “CH” brand with a schedule that is distinct from our Global Television Network. Our “CH” brand stations provide us with second stations covering several of the largest markets in Canada: Toronto/ Hamilton, Vancouver/ Victoria, Ottawa/Gatineau, Calgary, Edmonton and Greater Montreal. The programming on our “CH” brand stations is targeted at the adult audience ages 25 to 54, a more mature demographic group than the 18 to 49 year old audience targeted by our Global Television Network. Our CHCH station in Hamilton and our CHEK station in Victoria also offer a broad range of local entertainment, news and information programming, while our CH (CJNT) station in Montreal also broadcasts multi-cultural programming. Until September of 2005, CKRD in Red Deer was a CBC affiliate. It is now a full-fledged CH station providing a new programming stream for

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viewers in Red Deer, Calgary and Edmonton. In the near future, our CBC affiliate in Kelowna will also disaffiliate and become a CH service.

We also own Prime TV, a Canadian specialty channel providing entertainment and information programming to the “baby boomer” generation.

In November 2000, the CRTC awarded licenses to operate three new digital Category 1 specialty channels and 27 new digital Category 2 specialty channels to us and/or partnerships in which we have an interest. Cable and satellite service operators that offer digital services are legally required to carry Category 1 channels, and can carry Category 2 channels at their option. We launched two Category 1 services, mentv (49% owned) and Mystery TV (50% owned) and four Category 2 channels, Lonestar, DejaView, Fox Sports World Canada and Xtreme Sports, in September 2001. In September 2003, we launched CoolTV, a category 2 channel.

The following table sets forth the relative ranking and audience share of our originating broadcast television stations in each of their respective Demographic Market Areas or Extended Market Areas for Fall 2004/Spring2005:

	Call Sign	Stations in DMA/EMA	Rank in DMA/EMA (1)	Audience Share (1)
Global Television Network:
Global Ontario	CIII	13	2	10.3	%
Global Quebec (2)	CKMI	8	2	7.9
Global Vancouver	CHAN	13	2	12.7
Global Calgary	CICT	8	2	11.7
Global Edmonton	CITV	8	2	11.4
Global Winnipeg	CKND	8	2	11.9
Global Halifax	CIHFNS	8	2	9.0
Global Saskatoon	CFSK	7	2	8.8
Global Regina	CFRE	7	2	7.8
Global Saint John	CIHF-NB	8	2	7.7
Global Lethbridge (3)(4)	CISA	8	2	15.1
CH Television System:
Montreal, Quebec (2)	CJNT	8	7	2.2
Hamilton, Ontario (5)	CHCH	13	4	4.0
Victoria, British Columbia (6)	CHEK	13	4	5.1
CBC Affiliates:
Okanagan-Kamloops, British Columbia	CHBC	8	6	4.4
Red Deer, Alberta (7)	CKRD	8	6	2.3

⁽¹⁾ Monday to Sunday, Central Prime Time (8:00 p.m. to 11:00 p.m. in all markets except Saskatchewan and Manitoba where, due to time zone differences with U.S. border stations, Central Prime Time is 7:00 p.m. to 10:00 p.m.). For Toronto/Hamilton and Vancouver/Victoria, September 13, 2004 to December 19, 2004 and January 3, 2005 to May 29, 2005. BBM Meter Research adults ages 18 to 49. All other markets: Fall 2004/Spring 2005 average BBM Sweeps, adults ages 18 to 49.

⁽²⁾ Based on English language stations only.

⁽³⁾ BBM Area 8021 — Lethbridge area.

⁽⁴⁾ CISA is a repeater of CICT Calgary.

⁽⁵⁾ Rank and Share in the Toronto/Hamilton EMA.

⁽⁶⁾ Rank and Share in Vancouver EMA.

⁽⁷⁾ Effective September 1, 2005 this station became part of our CH Television System, known as CH Red Deer with the new call sign, CHCA.

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Programming

Our Global Television Network targets adults ages 18 to 49, while our “CH” brand stations target a more mature demographic, adults ages 25 to 54. The key elements of our programming strategy are:

• purchasing exclusive Canadian broadcasting rights to entertainment programs which appeal to our target audiences; and

• maximizing simulcasting opportunities.

We aggressively promote our television series and seek to develop viewer loyalty by offering a consistent programming schedule. By purchasing exclusive Canadian broadcasting rights to programming, we are able to control its distribution throughout the country. We are also able to offset programming costs through syndication to non-competing stations. We simulcast U.S.-originated programming whenever possible in order to maximize our ratings and advertising revenue.

Substantially all of our acquired programming is purchased for national exposure in Canada and the majority of the programming is produced within Canada and the United States. In order to gain economies of scale, the programming is often purchased for multiple levels, including telecast rights for our specialty and digital television channels as well as our conventional television stations. Many of our programming agreements are for multi-year program supply. Such agreements are currently held with several major non-Canadian studios, including Sony Pictures Television (Columbia), and Fox. These agreements require suppliers to provide, and us to buy, pre-agreed amounts of programming over one or more years. These agreements have provided price stability for our program acquisitions and have enhanced our ability to retain highly-rated U.S. network series programming and to acquire desirable new programming while, at the same time, helping to soften the effect of the very cyclical nature of most television programs.

Both our Global Television Network and our “CH” brand stations broadcast many of the most popular programs in Canada. Among the many “hit” shows in our current program schedules are a combination of recent entrants and established programs, including Survivor, The Apprentice, Will and Grace, Las Vegas, Without a Trace, Prison Break, Bones, House, E-Ring, Threshold, Numbers, Two and a Half Men, The Simpsons, Gilmore Girls, That 70’s Show, Malcolm in the Middle, Fear Factor and 24. Global Television also broadcasts world class sporting events such as NFL football (including the Super Bowl), Molson Indy, the Masters Golf Tournament and the Wimbledon Tennis Championships. In 2002, Global Television introduced a series of Canadian documentaries from independent producers across all the regions of Canada. Several of the programs have aired to strong national acclaim, including Jenin: Massacring the Truth and Confrontation at Concordia.

Since its launch in September 2001, Global National, Canada’s only supper-hour national newscast, has won several prestigious national awards including six from the Radio-Television News Directors Association, four Leo awards for best National newscast and best anchor as well as two Gemini nominations. Strategically, Global National has enhanced the news “brand” and credibility of many of Global television’s local news and public affairs programs with correspondents in Washington D.C., London, Tel Aviv and a large national bureau in Ottawa. The combination of local and national news at the supper hour has led to considerable expansion of news programming, especially in British Columbia, Alberta and Ontario. Global British Columbia, for example, is now broadcasting 43 hours of local news programming per week and commands one of the largest local English language news audiences in Canada.

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Ratings

The following table sets forth Global Television’s audience shares and that of its primary competitors in each of the Toronto/Hamilton and Vancouver/Victoria markets for the 2004 and 2005 broadcast years:

Audience Share in Selected Major Markets ⁽¹⁾

	Primetime 7PM - 11PM (2)				Rank (3)	6AM – Midnight (2)				Rank (3)
	2004/2005		2003/2004		2004/2005	2004/2005		2003/2004		2004/2005
Toronto/Hamilton (4):
CTV-CFTO	13.4	%	11.0	%	1	10.1	%	9.1	%	1
Global Ontario – CIII	9.2		10.5		2	7.5		8.5		2
CHUM – CITY	6.2		6.7		3	6.3		6.6		3
CBC – CBLT	4.0		6.5		4	3.3		4.8		4
“CH” Brand – CHCH	3.6		4.3		5	3.2		3.6		5
CHUM – CKVR	2.3		2.4		6	1.9		2.0		7
Fox – WUTV	1.9		2.3		7	2.4		2.7		6
Rogers – CFMT	1.7		1.5		8	1.7		1.7		8
Vancouver/Victoria (5):
CTV – CIVT	14.3		10.0		1	9.8		7.3		2
Global Vancouver – CHAN	11.9		12.9		2	13.8		13.9		1
CHUM-CKVU	5.1		5.0		3	4.0		4.1		5
“CH” Brand – CHEK	4.9		5.2		4	4.3		4.5		3
CBC – CBUT	4.7		7.9		5	4.1		6.7		4
CHUM – CIVI	3.4		3.7		6	3.0		2.7		6
Independent – KVOS	1.7		2.4		7	1.4		2.1		7

⁽¹⁾ Audience share among adults 18 to 49.

⁽²⁾ September 13, 2004 to May 29, 2005 and September 15, 2003 to May 30, 2004.

⁽³⁾ Based upon figures reported in this table.

⁽⁴⁾ BBM Toronto Meter Data, September 13, 2004 to May 29, 2005 and September 15, 2003 to May 30, 2004.

⁽⁵⁾ BBM Vancouver Meter Data, September 13, 2004 to May 29, 2005 and September 15, 2003, to May 30, 2004.

Advertising Sales and Revenue

Our Canadian television operations derive their revenue primarily from the sale of broadcast air time to national, regional and local advertisers. For fiscal 2005, we derived over 85% of the advertising revenue relating to our Canadian broadcasting operations from sales to national advertisers and the balance from sales to regional and local advertisers. Under the terms of our broadcasting licenses, our Global Ontario and Global Quebec stations may sell broadcast air time only to national advertisers.

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Intangible Assets

Within our Canadian television operations, we have identified broadcast licences in the amount of $494.9 million. These assets have indefinite lives.

Canadian Publishing Industry

The Canadian newspaper industry is comprised of over 100 daily paid circulation newspapers and numerous non-daily paid and free-distribution publications. The industry is mature and is dominated by a small number of major publishers. We are the largest newspaper publisher in Canada, with 36% of paid circulation in 2004, ahead of Torstar Corporation (17%), Sun Media (16%), The Globe and Mail (7%), Osprey Media Income Fund (7%) and others (17%).

Total Canadian daily newspaper industry revenue was $3.4 billion in 2004, with 78% derived from advertising and the balance of 22% coming from circulation. Advertising revenue and, to a lesser extent, circulation revenue are cyclical and dependent upon general economic conditions. Historically, increases in advertising revenue have corresponded with periods of economic growth, while decreases have corresponded with general economic downturns and regional and local recessions. Daily newspaper advertising revenue increased by 3.0%, or $80.0 million in 2004. In 2003, daily advertising revenue increased by 0.8%, or $18.8 million following a decrease of 0.3%, or $8.5 million in 2002. Declines in 2001 and 2002 followed six successive years of growth from the $1.8 billion posted in 1994.

Daily newspaper circulation revenue has been stable for the past ten years. From 2003 to 2004, average Canadian daily newspaper circulation revenue increased by $22 million or 3.1% to $745 million. The median single copy price for a weekday edition of a Canadian daily newspaper increased from $0.65 in 1995 to $0.80 in 2004. The industry has seen slight declines in circulation volumes. Total newspaper circulation of 4.9 million copies in 2004 compared to 5.3 million copies in 1995. In spite of the decline in circulation, newspaper readership (as measured by NADBank, 2004) has increased as a result of an increase in the number of readers per copy. Daily newspapers weekly readership in ten major Canadian markets increased to 10.4 million readers in 2004 from 10.3 million in 2003 and 9.5 million readers in 1995.

Our Publishing Operations

General

Our Canadian Publishing operations are comprised of our newspaper and interactive operations which are operated by the Limited Partnership as well as the National Post. We are the largest publisher of daily newspapers in Canada, as measured by paid circulation, readership and revenue. Our publications include 10 daily metropolitan newspapers, all of which serve markets also reached by our broadcast television signals. In addition, we own and operate two other daily newspapers, 21 non-daily community newspapers, interests in two free commuter publications and shopping guides. We also own the National Post, one of Canada’s two national daily newspapers.

Our newspapers have an aggregate daily paid circulation of 1.3 million copies, representing 36% of Canada’s daily average English-language newspaper circulation, and an estimated average weekly readership of 4.9 million people in 2004. Most of our newspapers have the highest circulation among publications in their markets. The high cost associated with starting a major daily newspaper operation constitutes a barrier to entry to potential new competitors to larger daily newspapers. While internet advertising may become more competitive in the future, it has not yet had a significant impact on revenue or operating income before amortization of our publishing assets.

Daily Newspapers

We publish 10 daily metropolitan newspapers (nine broadsheets and one tabloid) and two other daily newspapers (broadsheets). The average age of our daily newspapers is 120 years old. Our newspapers

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have consistently been recognized for the quality of their content, having received numerous nominations and awards

The following table sets forth the paid daily circulation for the six months ended September 30, 2005 for the major newspapers as well as their respective readership statistics as of the dates noted:

Publication	Market	Established	Total Daily Paid Circulation(1)	Weekly Readership(2)	Market Position(3)		Local Newspaper Market Share(1)(6)
The Vancouver Sun	Vancouver	1912	178,448	893,900	1		100	%(7)
The Province	Vancouver	1898	153,754	845,400	2	(4)
The Gazette	Montreal	1778	138,308	579,300	1	(5)	100	%
Ottawa Citizen	Ottawa	1845	132,093	474,300	1		73	%
Edmonton Journal	Edmonton	1903	128,259	476,700	1		64	%
Calgary Herald	Calgary	1883	121,499	476,800	1		65	%
The Windsor Star	Windsor	1918	71,823	206,800	1		100	%
Times Colonist	Victoria	1858	72,079	191,200	1		100	%
The StarPhoenix	Saskatoon	1902	54,616	141,400	1		100	%
Leader-Post	Regina	1885	50,370	122,100	1		100	%
Total			1,101,249

Notes:

⁽¹⁾ Source: ABC: September 2005 Publishers’ Statements.

⁽²⁾ Source: NADbank Weekly Readership of daily paid circulation newspapers by Resident Market 2004 Study (based upon 6/7 day cume, adults 18+).

⁽³⁾ As measured by paid circulation and readership.

⁽⁴⁾ Second to The Vancouver Sun, which is also owned by the Partnership.

⁽⁵⁾ Number one English-language newspaper; number three overall.

⁽⁶⁾ Based upon total weekly paid circulation of English-language local daily newspapers.

⁽⁷⁾ Includes The Vancouver Sun and The Province.

The National Post had daily circulation of approximately 236,473 for the six months ended September 30, 2005 and estimated weekly readership of 1,577,500. As a national newspaper, The National Post is second in its market position to the Globe and Mail. In Toronto the National Post competes with the Toronto Star and The Toronto Sun.

The National Post is printed at our facilities in Calgary, Montreal and Ottawa, and by third-party printing contractors in Vancouver, Winnipeg, Toronto and Borden.

Free Daily Publications

In March 2005, we entered into a joint venture with Metro International and Torstar to publish English-language free daily newspapers in various Canadian cities. We and Torstar have a 37.5% interest, and Metro International a 25% interest, in the new venture (subject to certain buy-sell rights between the partners). Metro International holds warrants which, subject to changes in Canadian law relating to the foreign ownership of newspapers, allow it to increase its ownership interest to 33.3%, which would in turn decrease the ownership of each of the Partnership and Torstar to 33.3%. The joint venture launched Metro, a free daily newspaper targeted to young urban commuters, in March of 2005. While Metro is distributed in cities across Canada, our involvement is currently limited to the Metro newspapers distributed in Vancouver and Ottawa. Target daily unpaid distribution after the first 12 months of operations for these publications in Vancouver and Ottawa are 160,000 and 60,000 copies, respectively.

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In April 2005, we launched Dose, a multi-platform product offering which we own, produce and distribute (subject to certain buy-in options of Metro International and Torstar in the Toronto market). Dose is targeted to the youth market and currently consists of a free daily magazine, a comprehensive online service (dose.ca) and an innovative wireless portal. Dose magazine is distributed in Vancouver, Edmonton, Calgary, Toronto and Ottawa. An aggregate total of 195,000 copies are printed and distributed daily in these markets.

Non-Daily Newspapers

We publish 21 non-daily newspapers distributed in various communities in British Columbia, consisting of one paid circulation and 20 free distribution publications. Our free distribution newspapers are generally delivered to every household in the respective regions in which they operate, thereby providing advertisers with total market coverage.

Lower Mainland Publishing Group (“LMPG”) publishes 13 community newspapers that run two or three times per week, providing complete market coverage of the Lower Mainland of British Columbia. The Vancouver Island Newspaper Group (“VING”) publishes six bi-weekly and two weekly newspapers on Vancouver Island in British Columbia. All of the VING newspapers are printed at the Nanaimo Daily News production plant.

Online Newspaper Operations

Our online newspaper websites, including the well-established montrealgazette.com and calgaryherald.com, extend the daily print editions of our newspapers to the internet. Through our expertise in converting printer files to web-friendly formats, we publish HTML versions of all of our daily newspapers, which serve as both online publishing and marketing platforms. Headlines and selected stories are available to the public, while complete and full editorial content is available to paying subscribers. The websites are also expected to serve as customer relationship tools, promoting subscriptions to the print editions, allowing for the purchase or renewal of print subscriptions, permitting notification of vacation stops and reactivations, and processing of billing inquiries, all via the internet. Future enhancements to subscriber value include special web offers and promotions, and exclusive access to premium editorial content and tools.

We also publish electronic editions of all of our major daily newspapers. These electronic editions are published daily and are available on a paid subscription basis (with reduced subscription rates for print newspaper subscribers). Readers of the electronic editions of our newspapers in this format are able to view page layouts, photos and advertisements exactly as they appear in the print edition of the newspaper. These electronic editions are particularly user-friendly and appeal especially to readers who may be travelling or who reside outside a newspaper’s area of circulation.

Classified Advertising Websites

We bring local newspaper classified advertising and listings to the internet and in doing so, we believe that we are converting our print classified business into a series of strong brands in various categories. Websites such as working.com (careers), driving.ca (autos), remembering.ca (obituaries), celebrating.com (announcements) and connecting.com (personals) leverage existing customer relationships and give customers the opportunity to extend the reach of their advertising to internet consumers. For example, working.com, a re-launch in October 2004 of careerclick.com, and the online version of the Working section of the Partnership’s newspapers have become the number one collection of career websites in western Canada (2.1 million unique monthly visitors in July 2005) and are the fastest growing collection of career websites in Canada based on number of unique visitors, having had 311% growth in monthly unique visitors from October 2004 to July 2005, compared to 55% growth for its nearest competitor.

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Operations

Newsprint

Newsprint comprised approximately $130 million, or 13% of the total costs of our publishing operations for the year ended August 31, 2005 and approximately $136 million or 15% of the total costs of our publishing operations for the year ended August 31, 2004. Newsprint is a commodity that can be subject to considerable price volatility, however, pricing has been relatively stable over the past two years. In fiscal 2005 our cost of newsprint decreased by 4% as compared to the prior year. Our publishing operations use approximately 180,000 metric tons of newsprint per year.

Advertising Sales and Revenue

Approximately 70% of newspaper advertising sales are generated locally, with each newspaper having a large sales force and classified advertising call center. The remainder of advertising sales are generated from national and multi-market retail accounts. For the year ended August 31, 2005, we derived approximately 77% of our total revenues from advertising and approximately 21% from subscriptions.

Intangible Assets

Within our publishing operations, we have identified finite life intangible assets consisting primarily of circulation lists in the amount of $48.7 million, net of accumulated amortization. The circulation lists have an expected remaining useful life of 35 years. In addition, we have identified newspaper mastheads in the amount of $338.9 million. These assets have indefinite lives.

Online Operations

Our internet and new media strategy is to create a strong internet presence to leverage our content across multiple platforms, provide integrated solutions to our advertisers and to cross-promote our publishing, broadcasting and internet operations. We intend to capitalize on the promotional capabilities of our publishing and broadcasting assets to create Canada’s leading network of local content websites. The internet is complementary to our existing businesses and a significant potential source of revenue.

Our internet operations include the following:

• canada.com

canada.com is a comprehensive 24/7 online news, entertainment and information network leveraging the content, brands and customer relationships of leading media properties across Canada. canada.com is a comprehensive internet network, with an average of 65.1 million page views and 2.7 million unique users per month, and provides a “Canadian perspective” regarding news, events and information of all kinds to Canadians, as well as visitors from around the world.

The canada.com network hosts the websites and electronic editions of the daily newspapers and the free daily magazine, Dose, as well as those of CanWest’s television networks and radio stations and the National Post. For these properties, canada.com offers a platform to extend reach, market and promote key off-line activities, and build and reinforce relationships with respect to both advertisers and end-users. The canada.com network also hosts two WAP-enabled wireless portals (www.canada.com and www.dose.ca).

Through its arrangements with world-class technology and content providers, canada.com provides a number of personalized online tools, including free e-mail, internet search, online shopping and many additional services. canada.com also provides up-to-date international, national and local news coverage from the daily newspapers, CanWest’s Global Television News, third-party newswire services and its own network interactive news bureaus. City portals, such as www.canada.com/vancouver and www.canada.com/ottawa, offer local news, weather, and services information.

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• FPInfomart.ca

FPinfomart.ca is an online news and business research service, providing businesses, government and the non-profit sector with more than 230 Canadian news sources on Web-based and wireless platforms. Sources include major Canadian daily newspapers and newswires, regional community papers, television and radio news transcripts, corporate databases, specialty trade journals and magazines.

FPinfomart.ca is a subscription-based service that provides a wide range of products to support desktop and cross-organizational research, media-monitoring and distribution of results. FPinfomart.ca can be used by its subscribers for online media monitoring and analysis, archival research using the newspapers in the database, and in-depth research on 4,600 publicly traded and more than 300,000 Canadian companies carried in FP Advisor.

• FP DataGroup

For 75 years, FP DataGroup has been a leading, unbiased source for corporate and financial information on publicly-traded Canadian companies and mutual funds.

FP DataGroup offers its subscribers a full-range of financial information products, both online and in print. Money managers, investment professionals, individual investors and information professionals use FP DataGroup’s products to make investment decisions and perform in-depth research on Canadian companies and industries. FP DataGroup’s subscribers have electronic access to custom data through five key products available at www.financialpost.com – FP Corporate Profiler, FP Corporate Analyzer, FP New Issues, FP Corporate Reports and FP Dividends.

Canadian Operations Sales and Marketing

Our broad range of media platforms allows us to deliver multi-platform solutions to our advertising clients. We are able to sell flexible packages of advertising across various media in local, regional and national markets.

Television Sales

Television revenues are split approximately 85% national sales and 15% local sales. National sales are driven predominantly from three markets, Toronto (90%), Montreal (5%) and Vancouver (5%). Each market has a national sales force. Almost all national accounts enlist the services of agencies to procure their advertising placement. There are five major agencies that are responsible for about 60% of the national business. On the local side each television station has a dedicated local sales force, which is responsible for all local and regional sales derived from that marketplace. All rates, sales policies and guidelines are driven from our central sales office in Toronto, Canada, CanWest MediaWorks, Sales and Marketing.

Newspaper sales

• Approximately 70% of newspaper advertising sales is generated locally with each paper having an outside and inside sales force and classified advertising call center.

• The balance of the advertising is generated by national and large multi-market retail accounts. They are sold by the national sales group operated by CanWest MediaWorks, Sales and Marketing with three offices in Canada and contract representatives in the U.S.

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Online sales

• Approximately 25% of revenues are generated by national sales for the canada.com network primarily from Toronto (85%) with representation also in Montreal (10%) and Vancouver (5%). Remaining sales are made by local newspaper sales forces.

Australian Operations

Industry Overview

Australia has five national broadcast networks and several unaffiliated regional commercial operations. Two of the national broadcast networks, the Australian Broadcasting Corporation and the Special Broadcasting System, are government-owned and largely commercial-free.

Three national networks, Seven, Nine and Network TEN, are privately-owned and broadcast commercial television to substantially all of the Australian population, including the major metropolitan areas of Sydney, Melbourne, Brisbane, Adelaide and Perth. Unaffiliated broadcasters serve rural areas and broadcast programs purchased from some or all of these three networks.

Australia also has two metropolitan pay television operators and one regional pay television operator, which broadcast primarily via cable and direct to home satellite delivery technologies. In 2004, there were approximately 710,000 cable subscribers, located primarily in metropolitan markets, and 940,000 satellite subscribers, located primarily in rural areas. While pay television operators have been permitted to broadcast paid advertising since July 1997, federal legislation requires that subscription fees remain the predominant source of revenue for pay television operators.

Network TEN

We have a 56.4% economic interest in TEN Group which owns Network TEN. Through its wholly-owned and affiliated stations, Network TEN covers 19 million people, or approximately 90% of Australia’s total population. In 1992, we organized a consortium which acquired TEN Group for total consideration of A$236.0 million. Since then, Network TEN has increased earnings by targeting selected demographic groups, expanding signal coverage and controlling operating costs.

Network TEN owns and operates television stations in the five major capital cities of Australia, Sydney, Melbourne, Brisbane, Adelaide and Perth, and has affiliate arrangements with regional broadcasters serving regional markets.

Programming

Network TEN sources programming material from international and Australian sources. Both prime-time and off peak schedules include a mix of local and international content. While Network TEN’s programming appeals predominantly to the 16 to 39 demographic, it is also increasingly popular with the broader 25 to 54 demographic. Local content regulations also place certain minimum requirements on drama, documentary and children’s programming as well as an overall domestic quota. Although Australian programming is generally more expensive to acquire than foreign programming, it generally attracts more viewers. As a result, Network TEN schedules a mix of Australian and foreign shows to maximize ratings while controlling costs.

Network TEN purchases most of its non-Australian programming from major U.S. studios. It has acquired Australian rights to shows that are popular with its target audience, such as Charmed, Medium, NCIS, Numb3rs, House, The Simpsons, and the Law & Order franchise. By obtaining “run of series” commitments, Network TEN ensures these series remain with the network for as long as they are produced. In addition, Network TEN enters into multi-year supply agreements with U.S. and other

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non-Australian production companies in order to acquire Australian rights to desirable programming at fixed prices.

Network TEN produces news, local sports and a limited number of other programs in-house, while entertainment programs are acquired from independent Australian producers. In-house productions include: the sports programs, Sports Tonight and RPM, the news program, Meet the Press, the reality based cooking program, Ready, Steady, Cook, and the afternoon children’s program, Totally Wild . Entertainment programs commissioned from Australian production companies include: Australian Idol, Big Brother, Neighbours, and Rove Live. For commissioned programs, Network TEN typically maintains an active role in the creative process. Network TEN seeks sponsorship of certain of its programs by advertisers and employs on-air promotion as well as radio and print advertising to market both the network and its programming.

Domestic production is a combination of news, sport, drama, light entertainment and children’s programming. News and some sports are produced internally, but most entertainment programming is acquired from independent producers. Australia has a large and efficient independent production sector that supplies programming to all commercial and government broadcasters.

Network TEN is the major broadcaster of Australia’s top football code, the AFL. Network TEN hosts exclusive coverage of the finals series, including the Grand Final. Motorsports have surged in popularity through Network TEN’s coverage of Formula One, the Indy Cars, the World Motorcycle Championships, the World and Australian Rally Championships and the V8 Supercar Championships.

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Market Share and Ratings

Television advertising expenditures in Australia were approximately A$3.3 billion in 2004, representing approximately 35% of total major media advertising expenditures of approximately A$9.3 billion. Sydney, Melbourne, Brisbane, Adelaide and Perth, all of which are reached by Network TEN’s owned and operated stations, account for approximately 78% of all television advertising expenditures in Australia. The following table sets forth advertising market shares of Australia’s three commercial networks:

Television Advertising Market Shares

	Twelve months ended June 30,
Network	2001(1)		2002		2003		2004		2005
Network TEN	23	%	27	%	29	%	30	%	31	%
Nine	38		39		39		39		38
Seven	39		34		32		31		31

⁽¹⁾ Includes the Sydney 2000 Olympics, aired by Seven.

Source: Free TV Australia.

Network TEN differentiates itself from other broadcasters by focusing primarily on the young adult demographic. The table below sets forth commercial network audience shares for calendar years: 16 to 39 year olds (Sunday-Saturday 6:00 p.m. to 10:30 p.m.) for each of the three national commercial networks:

Audience Share

	Twelve months ended December 31,
Network	2000(1)		2001		2002		2003		2004
Network TEN	31	%	34	%	37	%	37	%	37	%
Nine	36		33		34		35		35
Seven	33		33		29		28		28

⁽¹⁾ Excluding the impact of the Sydney 2000 Olympics.

Source: 2001-2004 OzTam television ratings; 1999-2000 AC Nielsen television ratings data.

Intangible Assets

Within our Australian television operations, we have identified broadcast licences in the amount of $220.0 million. These assets have indefinite lives.

Sales and Marketing

Television revenues are split between approximately 70% national sales and 30% local sales. Sales are derived from five markets, Sydney, Melbourne, Brisbane, Adelaide and Perth. Advertising agencies account for approximately 95% of revenues and almost all national clients enlist the services of advertising agencies to procure their advertising placement. There are fifteen major agencies that are responsible for approximately 90% of advertising revenues. On the local side, each television station has a dedicated local sales force, which is responsible for national and regional sales derived from that marketplace. All rates, sales policies and guidelines are driven from a central source in Sydney.

Eye Corp.

Eye Corp. is one of Australia’s premier out-of-home advertising companies. In December 2000, TEN Group acquired a 60% interest in Eye Corp. and then in August 2002 acquired the remaining 40% interest.

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Eye Corp., which was created from the consolidation of several smaller players, has become the second largest out-of-home advertising company in the marketplace, following APN News and Media Limited, which we estimate controls 58% of the domestic market.

Eye Corp.’s operations are comprised of five divisions:

• Eye Drive, which has Australia’s second largest stable of large format outdoor signage, and includes inventory of over 300 sites;

• Eye Fly, which has approximately 1,100 strategically located signs within all of Australia’s major domestic and international air terminals, giving Eye Fly 100% of the Australian airport market;

• Eye Shop, which controls more than 3,500 “eyelites” through more than 100 leading shopping centers across Australia and New Zealand;

• Adval, which is a visual merchandising and point-of-sale supplier to leading retailers; and

• the overseas division, which has made substantial inroads into southeast Asian markets, including Indonesia and Malaysia and encompasses large format outdoor advertising and internal airport signage.

Intangible Assets

Within our Australian outdoor advertising operations, we have identified intangible assets in the amount of $24.3 million. These assets are being amortized over a period of 20 to 40 years.

Sales and Marketing

Revenues are split 78% Australasian (including New Zealand) Media, 16% Australian Point of Sale Production and 6% Asia. National sales account for 60% of Australasian Media revenue and 40% is sold in local markets. Advertising agencies account for approximately 85% of these revenues. Australian Point of Sale Production and Asian revenues are sold in local markets to direct clients.

Our Economic Interest in TEN Group

Network TEN is owned and operated by TEN Group, an Australian private company. Approximately 84.4% of the ordinary shares of TEN Group are held by Ten Network Holdings Limited, a public company listed on the Australian Stock Exchange. We own approximately 14.5% of the ordinary shares of TEN Group, representing a 14.5% voting interest (the maximum voting interest that any one foreign person may own in an Australian television broadcaster under present Australian law is 15%). We also own all of the subordinated debentures and convertible debentures of TEN Group. The subordinated debentures have an aggregate principal amount of A$45.5 million and pay interest at a rate determined with reference to dividends to holders of ordinary shares. The convertible debentures have an aggregate principal amount of A$45,500 and pay interest at a market rate. The combination of our ordinary shares and subordinated debentures yield payments equivalent to approximately 56.4% of all payments made to TEN Group security holders.

The convertible debentures are convertible upon payment of an aggregate of A$45.5 million into a number of ordinary shares, which would represent approximately 49.1% of the issued and outstanding ordinary shares of TEN Group at the time of conversion. Under current regulations with respect to foreign ownership in Australia, we cannot exercise the conversion privilege.

Under TEN Group’s corporate constitution, we are entitled to nominate three of TEN Group’s 13 directors. The shareholders of Ten Network Holdings Limited have the right to nominate nine directors and the remaining director is nominated by the board and serves as chair. The corporate constitution also

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provides for pre-emptive rights, which allow us to purchase new securities issued by TEN Group to maintain our economic interest, subject to foreign ownership restrictions under Australian law.

The corporate constitution of TEN Group requires the distribution of annual dividends to the maximum amount permitted by law, subject to first making provisions for working capital, capital expenditures and corporate development activities, as well as compliance with the terms of any financing facilities that may be in place from time to time.

New Zealand Operations

In New Zealand, we own a 70% interest in CanWest MediaWorks (NZ), a company listed on the New Zealand Stock Exchange. CanWest MediaWorks (NZ) was formed in 2004 and in July 2004 it acquired our New Zealand radio and television operations, RadioWorks and TVWorks. TVWorks operates the leading privately owned free-to-air television group in New Zealand and RadioWorks operates one of the leading radio businesses in New Zealand.

Television Industry Overview

The New Zealand television industry includes two major free-to-air network operators, a pay television provider and several smaller UHF operators. Through its two free-to-air channels, TV One and TV2, the Government owned TVNZ has a 57% viewer share. Effective in July 2002, a new charter which imposes significant social obligations on TVNZ came into effect. Previously, TVNZ was more purely focused on commercial operations. TVWorks operates two national free-to-air television networks, 3 and C4. TVWorks has an aggregate viewer share of approximately 25%. 3 and C4 are transmitted through VHF frequencies reaching 98% and 75% of the population of New Zealand respectively, and are available on the SKY TV digital satellite platform. SKY TV operates direct-to-home subscription networks, and has a current market penetration of approximately 40% of homes in New Zealand. Prime TV operates a free-to-air UHF television service which covers 95% of New Zealand’s population. Prime TV is limited due to the low number of homes which are equipped with UHF receivers. Its audience share is approximately 4%. In addition, there are a number of small local UHF operators.

TVWorks

TVWorks owns and operates the 3 and C4 television networks. In October 2003, TV4 was relaunched as C4, a free-to-air music and youth programming television network. While 3 targets adults ages 18 to 49, C4 caters to a younger demographic of adults ages 15 to 39. 3 and C4’s signals reach approximately 98% and 75% of the New Zealand population, respectively.

Market Share and Ratings

Television advertising expenditures in New Zealand were approximately NZ$643 million for the twelve months ended December 31, 2004, representing approximately 31% of total advertising expenditures of NZ$2.1 billion. Television advertising expenditures increased by 9% for calendar 2004 compared to the prior year. In the five year period to December 31, 2004 total advertising expenditures increased by an average of 6% per year.

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The New Zealand television industry generates its revenue from the sale of advertising time. The distribution between TVNZ and 3 and C4 of their combined television market share (based on revenue) as estimated by us is set out below:

Television Advertising Market Share

	Year Ended March 31,
	2001		2002		2003		2004		2005
3/C4	23.9	%	24.0	%	25.9	%	25.7	%	25.8	%
TVNZ	72.3		71.5		68.8		67.2		65.0
Others	3.8		4.5		5.3		7.1		9.2

The table below sets forth audience shares of New Zealand’s commercial television networks during prime-time viewing hours:

Audience Share ⁽¹⁾

	Year Ended March 31,
	2001		2002		2003		2004		2005
3	22	%	23	%	25	%	23	%	24	%
C4	3		4		3		2		2
TV One	33		30		29		30		28
TV2	33		31		31		28		27
SKY/Other	9		12		12		17		19

⁽¹⁾ Among adults 18 to 49 (Sunday - Saturday 6:00 p.m. to 10:30 p.m.)

Source: AC Nielsen

Programming

3’s long-term programming strategy is designed to improve the ratings performance of both domestic productions and foreign series among its targeted demographic audience.

3 operates a significant news and current affairs department, responsible for over ten hours of peak programming and three and a half hours of off-peak programming weekly. News and current affairs programming is in constant high demand by advertisers and attracts premium rates. Sports play an integral role in the 3 programming schedule. 3 has free-to-air rights for rugby, which is New Zealand’s highest profile sport.

3’s entertainment programming strategy has positioned it as a young adult oriented network with a distinctive and fresh image. This has been achieved principally by the acquisition and exhibition of entertainment programming targeted at the 18 to 49 age demographic, the most attractive audience group to New Zealand advertisers and their agencies. 3 reaches its chosen target audience through a combination of New Zealand-produced programming, United States network series and other international programming, primarily from Australia and the United Kingdom.

3 dominates the crime drama genre with popular shows CSI: Crime Scene Investigation, CSI: Miami, CSI: New York, Law & Order: Special Victims Unit, Law and Order: Criminal Intent, 24 and Numb3rs. All three CSI franchises are now on “life-of-series” agreements, ensuring continued access to these popular programs.

Reality hit shows like Survivor, as well as comedies such as The Simpsons, That 70’s Show, Malcolm in the Middle and Sex and the City round out the network’s top-performing international programs. The majority of 3’s international programming is obtained from major United States studios such as FOX, CBS, Paramount, and NBC Universal pursuant to multi-year program purchase agreements. These agreements provide 3 with certainty of supply at agreed prices and enable the network to provide popular

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movies like X-2, Charlies Angels 2, Anger Management, Cheaper by the Dozen and Master and Commander.

3’s New Zealand-produced programming is acquired from a range of independent production companies or produced in-house. 3 sources programming from independent production companies by either commissioning the production of new programs or purchasing the free-to-air rights of programming already produced. Programs recently commissioned by 3 include Target, Inside New Zealand, Sticky TV and Outrageous Fortune.

In October 2003, TV4 was relaunched as C4, with a youth music format. The channel runs themed or “destination” programming focused upon specific musical genres, but is open to format changes based upon viewer surveys. New Zealand music plays a key role on the channel. C4 screens popular cartoon comedy Futurama, and has an agreement with MTV to bring the best of its youth programming to C4.

Intangible Assets

Within our New Zealand television operations, we have identified broadcast licences in the amount of $3.8 million.

Sales and Marketing

The vast majority (approximately 90%) of television revenue in New Zealand is generated through advertising agencies, with approximately 10% sold directly to clients. The largest agencies are predominantly based in either Auckland or Wellington, with the top six agencies generating approximately 50% of total revenue. Each quarter a ratecard is released to the market and air time inventory is made available for advertisers to book. Sales policies and rates are controlled from Auckland, where senior sales management is based. Smaller sales offices are also located in Hamilton, Wellington, Christchurch, Sydney and Melbourne (Australia).

Radio Industry Overview

There are effectively two major groupings of stations in New Zealand, which account for 90% of radio revenues for the year ended December 31, 2004, as follows:

Station Group	Approximate Revenue Share
The Radio Network (TRN)	46	%
RadioWorks	45
Others	9
	100	%

Radio advertising revenue in New Zealand was approximately NZ$247 million for the twelve months ended December 31, 2004, representing approximately 13% of total advertising expenditures. This represents an increase of NZ$22 million or 10% over the previous year.

New Zealand deregulated its radio broadcasting industry in 1989. This deregulation made it easier for new broadcasters to enter the industry, removed foreign ownership restrictions, facilitated the use of new technologies and separated the government’s commercial and non-commercial radio interests. While the government issues licenses and controls technical parameters, its policy is for the radio industry to self-regulate the format, style and content of radio broadcasts, provided that broadcasters meet standards for good taste and decency and respect privacy laws. As a result of these changes, there has been a significant increase in the number of commercial radio stations operating in New Zealand, from 56 in 1989 to over 200 today. Current government policy is that any further allocation of radio spectrum will be

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restricted for use by “not for profit or community service groups.” This policy effectively secures the market for existing commercial radio operators.

RadioWorks

RadioWorks operates six national networks—The Edge, The Rock, Kiwi FM, Solid Gold, Radio Pacific and the recently launched Radio Live, and 28 local stations that primarily operate under common brand names, either as More FM or The Breeze.

The formats of the six national networks are:

• The Edge (FM) – a contemporary station targeting a young audience with current hits;

• The Rock (FM) – targeted mainly to males in the 18 to 34 age group;

• Kiwi FM – broadcasts 100% New Zealand music, primarily targeting the younger audience;

• Solid Gold (FM) – a classic hits format targeted at the older demographic;

• Radio Pacific (AM) - a talkback format also targeted at the older demographic; and

• Radio Live (FM) – news and talk format targeted at a 25 to 54 age group.

The More FM adult contemporary brand is targeting the 25 to 39 age group, and The Breeze easy listening format primarily targets the female 35 to 54 age group.

We estimate that our signal reaches 99% of the New Zealand population. RadioWorks now covers both urban and rural markets and virtually the full range of formats.

Ratings

In the recent November 2005 nationwide survey of New Zealand’s major urban markets, key brands performed as follows in their respective target audiences. The Rock number 1 with a 19% share of its target audience; The Edge was number 1, with a 22% share; More FM was number 3, with an 11% share; and The Breeze was number 1, with a 17% share.

Intangible Assets

Within our New Zealand radio operations, we have identified broadcast licences in the amount of $11.3 million.

Sales and Marketing

Radio in New Zealand is primarily sold directly to advertisers, with only approximately 25% sold through advertising agencies. Direct revenue is generated by 24 sales teams located in the major cities and towns across the country. The majority of direct revenue is sold via various types of monthly installment plans, with the minority being via casual campaign or spot bookings. Approximately 66% of revenues are generated from the five largest New Zealand cities.

Republic of Ireland Operations

We own 45% of TV3, the only privately-owned broadcast television network in the Republic of Ireland.

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Industry Overview

Prior to the launch of TV3 Ireland in September 1998, the Irish television industry consisted of three national networks, RTE1, Net 2 and TG4, which are all available free-to-air and through cable, satellite and MMDS. In addition to commercial advertising revenue, these three networks are publicly funded and operate under the auspices of RTE, the state-owned broadcast organization. TV3 Ireland is the first and only privately owned independent commercial television channel in the Republic of Ireland. TV3 targets the 15 to 44 age group and is a full service FTA television network offering a mix of domestic and foreign general entertainment programming.

In addition to the four Irish channels, the major UK terrestrial channels, each of which serves Northern Ireland, including BBC1, BBC2, ITV (Channel 3), Channel 4 and Channel 5, are available to some or all Republic of Ireland viewers off-air, satellite to cable or MMDS. In addition, Sky One and other pay services are available on cable, MMDS or satellite. In April 2002, the four Irish terrestrial channels, including TV3, were made available on the “family package” offered by Sky Digital Satellite in the Republic of Ireland. The addition of Sky satellite distribution added to the 96% coverage of TV3, makes TV3 technically available to every Republic of Ireland home.

TV3 reaches approximately 30% of Northern Irish homes off-air through transmitters located in the northern part of the Irish Republic.

Overall, approximately 62% of the Irish television households are served by cable, MMDS or satellite services, reaching up to 92% in the major urban markets, including Dublin. Those homes served by retransmission systems or capable of receiving terrestrial overspill of the major UK channels now account for 79% of all homes nationally. In recent years, Sky Digital has grown its subscribers to approximately 234,000 Irish homes, which consequently receive a host of UK based services not available on the spectrum-limited cable services.

In 2004, television advertising expenditures in the Republic of Ireland generated approximately €236 million, representing approximately 17% of total advertising expenditures of €1.37 billion. This is supplemented by additional expenditures on advertising in the UK on services which reach into the Republic of Ireland, which expenditures are targeted at consumers in the Republic of Ireland. In calendar 2004, the television advertising market increased by approximately 21%.

TV3

TV3 Ireland quickly demonstrated the need for a third mainstream station. It has filled the gap between RTE1’s older audience and Net 2’s youthful franchise. With the addition of TV3 Ireland, there has been repatriation of Irish audiences and growth in the number of people viewing Irish channels each month.

After six years on-air, TV3 Ireland has again achieved year on year growth in terms of market share, expanding on its position in the market, second only to Irish state owned and funded RTE One. 2004 saw TV3 increase its peak audience share by 4% over the same period in 2003.

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Peak Audience Share

January to December 2004

Network
TV3	14	%
RTE1	32
Net2	12
UTV	8

Source: AC Nielsen: All individuals in the Republic of Ireland.

TV3 Ireland offers a wide variety of programming, including news, factual, comedy, drama, sports and local interest programming. The schedule is a mix of domestic and foreign programming.

TV3 Ireland’s programming is targeted to the 15 to 44 age group, audiences which are in high demand by Irish advertisers and which TV3 Ireland has proved to have been previously neglected in the Irish market. TV3 Ireland has quickly established itself with the viewing audience through the introduction of programs to the Irish market like Law and Order: Special Victims Unit, Will and Grace, Malcolm in the Middle, and and the US critical success Arrested Development. The tradition of U.S. movie premieres on a Sunday evening has continued with such titles as, The Matrix Trilogy, Red Dragon and Analyze That.

In 2001, as part of the agreement by which ITV acquired an interest in TV3, two new titles moved to TV3, Coronation Street and Emmerdale, which was new to Irish broadcasting at 7:00 p.m. These programs have improved the audience share for the 7:00 to 8:00 p.m. time-band and have greatly enhanced viewing of later programs. Other Granada products, like Heartbeat, the Royal, and reality shows I’m a Celebrity – Get Me Out of Here and Hell’s Kitchen, have further improved the channel. Support for TV3 Ireland’s coverage of Europe’s prime club soccer tournament, the UEFA Champions’ League continues, with particularly good audiences for the season that began in September 2004. So TV3 continues to maintain its role in international football coverage with the UEFA Champions League in the 2005/6 season and taped live coverage of Irish soccer internationals.

TV3 Ireland recognizes the importance of relevant domestic programming and in 2004 invested over 50% more in domestic programming than it did in programming acquired from outside the country. The channel continues to exceed its regulatory requirement of 25% Irish programming. In addition to three daily news bulletins, TV3 Ireland produces Sports Tonight, Week in Review, periodic news specials, and Ireland AM, Ireland’s first morning breakfast television service, which quickly established itself as the number one breakfast choice in Ireland. Ireland AM is a live, weekday magazine and lifestyle program. The program now has viewing greater than the accumulated audiences of all its breakfast program competitors available in the market. The Political Party, introduced in Fall 2004, has now become a part of the political scene, with appearances by all the major Irish politicians. Go Racing and Popcorn covered the popular Irish leisure pursuits of horseracing and cinema.

As part of a strategy to build a strong inventory of Irish dramatic programs, TV3 continues to actively invest in Irish theatrical productions. Since its launch in 1998, TV3 has invested in a recreation of the events of “Bloody Sunday,” a pivotal event in modern Irish history, Map Maker, Watermelon, and Halo Effect. In the past year TV3 has invested in three productions, Isolation (a horror movie), Studs (set around a local Irish soccer team) and The Wind That Shook the Barley directed by Ken Loach. The value of these independent Irish film investment budgets now approach €20 million and TV3 has taken great pride in being a part of this meaningful investment for independent producers.

Intangible Assets

Within our Irish television operations, we have identified broadcast licences in the amount of $2.2 million. These assets have indefinite lives.

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Sales and Marketing

The majority of TV3 Ireland’s airtime is sold to advertisers through advertising agencies in Ireland. In addition, we utilize a direct sales force to sell to advertisers who do not use agencies. In addition, TV3 derives some advertising revenues from the United Kingdom. TV3 Ireland contracts ITV Sales as its U.K. sales force.

Seasonality

Our business has experienced and is expected to continue to experience significant seasonality due to, among other things, seasonal advertising patterns and seasonal influences on people’s viewing, reading and listening habits. Typically, our revenue is lowest during the fourth quarter of the fiscal year, which ends in August, and highest during the first quarter of the fiscal year.

Employees

As at August 31, 2005 our Canadian television operations employed approximately 1,850 people on a full-time equivalent basis. Approximately 63% of our Canadian broadcast employees are unionized and are employed under a total of 15 collective agreements. Two of these agreements are currently in negotiation. In 2005, one agreement will expire and in 2006, four agreements will expire.

Thirteen of our bargaining units are represented by the Communications, Energy and Paper-workers Union of Canada (CEP). On April 27, 2001, this union applied to consolidate these 12 bargaining units covering approximately 1,000 employees into a single bargaining unit. On March 4, 2005, the Canadian Industrial Relations Board (CIRB) determined that the 12 bargaining units would be restructured into three bargaining units. The three bargaining units in Halifax and St. John would constitute a Maritimes bargaining unit. The eight bargaining units in western Canada (Victoria, Vancouver, Kelowna, Calgary, Lethbridge, Edmonton, Saskatoon and Winnipeg) would be amalgamated into a Western Canada bargaining unit. The Toronto bargaining unit would remain a stand-alone unit. Both parties have applied to the Board for a reconsideration of its decision in accordance with the procedures set out in the Canada Labour Code.

On July 11, 2005, CEP filed an application with the Board seeking to have the bargaining unit in CH Hamilton included in the reconsideration proceedings. This group had not been included in the initial application in 2001 because at that time, the employees were not represented by CEP.

As at August 31, 2005 we had approximately 5,650 full-time equivalent employees in our publishing and online assets. Approximately 49% of these employees are employed under a total of 41 collective agreements. Five of these collective agreements are in negotiation and no others will expire in 2005. In 2006, a further 10 agreements will expire. In general, our collective agreements cover operations at individual publications or business locations, rather than multiple locations.

As at August 31, 2005 we had approximately 163 full time equivalent employees in our Canadian online operations.

In addition, as at August 31, 2005, we had approximately 960 non-unionized employees working in corporate and central services areas including our Reach Canada call centre, our business services centre, our information technology group, and our sales and marketing group. These employee groups support our Canadian television, newspaper and online operations.

In Australia, Network TEN and Eye Corp. employed approximately 1,200 full-time employees at August 31, 2005. Approximately 30% are represented by labor unions.

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In New Zealand, as at August 31, 2005 TVWorks had 365 employees, and RadioWorks had approximately 650 employees. In the Republic of Ireland, TV3 had 181 employees. None of our employees in New Zealand or the Republic of Ireland are represented by trade unions.

We employ approximately 53 people at our corporate and international offices.

Environmental Protection

Substantially all of our operations are subject to laws and regulations concerning, among other things, emissions to the air, water and sewer discharges, handling, storage and disposal of wastes, recycling, remediation of contaminated sites or otherwise relating to protection of the environment. We believe all of our operations, including our publishing operations, are in compliance with applicable environmental protection laws and our own internal environmental compliance standards in all material respects. Ensuring environmental compliance has not given and is not expected to give rise, in the aggregate, to any material adverse financial or operational effects upon our business.

Nevertheless, more stringent environmental laws as well as more vigorous enforcement policies or discovery of previously unknown conditions requiring remediation could result in additional costs that may have such effects.

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Risks Relating to Our Debt

Our substantial debt could adversely affect our financial condition and prevent us from fulfilling our obligations.

We have a substantial amount of debt. As of August 31, 2005, we had $2,908 million in consolidated long-term debt (including the current portion) and consolidated shareholder’s equity of $1,196 million, resulting in a total debt to capitalization ratio of 71%. Our consolidated debt at August 31, 2005 includes obligations under our senior notes, our senior subordinated notes and our credit facility as well as debt of our consolidated subsidiaries, TEN Group, CanWest MediaWorks (NZ) Limited and TV3 Ireland. In October 2005, we utilized proceeds in connection with the initial public offering of the Fund and proceeds from our new senior secured credit facilities to repay substantially all of our 7 5/8% unsecured notes and our 10 5/8% subordinated notes and fully settle our old senior secured credit facility. As a result, our consolidated debt was reduced by $400 million.

Our substantial indebtedness could have important consequences. For example, it could:

• require us to dedicate a substantial portion of our cash flow from operations to payments on debt, which will reduce amounts available for working capital, capital expenditures, marketing, product and program development and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

• increase our vulnerability to general adverse economic and industry conditions;

• place us at a competitive disadvantage compared to our competitors with less debt; and

• limit our ability to borrow additional funds.

In addition, a portion of our debt bears interest at variable rates. An increase in the interest rates on the debt will reduce the funds available to repay the new notes and other debt and for operations and future business opportunities and will intensify the consequences of our leveraged capital structure.

The terms of our credit facility and the indentures governing our existing senior subordinated notes do not prohibit us or our subsidiaries from incurring substantial additional debt in the future, so long as we observe certain covenants, maintain certain specified financial ratios and meet certain specified financial tests.

To service our debt, we will require a significant amount of cash, and our ability to generate cash in the future depends on many factors beyond our control.

Our ability to make payments on and to refinance our debt will depend on our ability to generate cash in the future. This, to an extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

Based on the amount of our current indebtedness giving effect to the Income Fund transactions we estimate annual cash needs of approximately $157 million to pay cash interest expense. We cannot assure you that our business will generate sufficient cash flow or that future borrowings will be available to us in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. If our future cash flow from operations, including distributions from our non-wholly-owned subsidiaries and investments, and other capital resources are insufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional equity capital or restructure or refinance all or a portion of our debt on or before maturity. We cannot assure you that we will be able to refinance any of our debt on a timely basis

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or on satisfactory terms, if at all. In addition, the terms of our existing debt and other future debt may limit our ability to pursue any of these alternatives.

Our outstanding indebtedness imposes operational and financial restrictions on us. Our credit facility and the indentures that govern our senior subordinated notes impose operational and financial restrictions on us.

Our credit facility and the indentures that govern our existing senior notes and senior subordinated notes impose restrictive covenants that, among other things, restrict our ability to:

• incur debt;

• pay dividends and make distributions;

• issue stock of subsidiaries;

• make certain investments;

• repurchase stock;

• create liens;

• enter into transactions with affiliates;

• enter into sale-leaseback transactions;

• merge or consolidate; and

• transfer or sell assets.

Our credit facility also requires us to maintain certain specified financial ratios and meet certain specified financial tests. These covenants are subject to a number of important exceptions and several of our significant subsidiaries are not subject to them.

All of these restrictive covenants may restrict our ability to expand our business or to pursue our business strategies. Our ability to comply with these and other terms of our indebtedness may be affected by changes in our business condition or results of operations, adverse regulatory developments or other events beyond our control. The breach of any of these covenants would result in a default under our debt. A default could allow our creditors to accelerate the related debt, as well as any other debt to which a cross-acceleration or cross-default provision applies. If our indebtedness were to be accelerated, we cannot assure you that we would be able to repay it. In addition, a default could give the lenders the right to terminate any commitments they had made to provide us with further funds.

Risks Relating to Our Business

Multiple Class Stock; Control of the Company by Holder of Multiple Voting Shares

All of the Company’s Multiple Voting Shares and 3,462,874 of its Subordinate Voting Shares are held by CanWest Communications, the shares of which are indirectly owned and controlled by Mrs. Ruth M. Asper, and trusts for the benefit of members of the family of the late I.H. Asper, including his three children, David Asper, Gail Asper and Leonard Asper, who are senior officers and directors of the Company.

CanWest Communications, certain of its affiliates, the trusts, Mrs. Ruth M. Asper and her three children (as voting trustees) have entered into a voting trust agreement which requires the Multiple Voting Shares

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held by CanWest Communications to be voted as Mrs. Ruth M. Asper and the three children together determine.

The voting trust agreement also requires the Multiple Voting Shares held by CanWest Communications to be voted in favour of nominees to the Board of Directors (the “Board”) who are nominated by David Asper, Gail Asper and Leonard Asper, and who, together, will be sufficient to constitute at least a majority of the Board, but as close to a simple majority as possible. For this purpose, each of David Asper, Gail Asper and Leonard Asper are entitled to nominate an equal number of the nominees making up that majority. Such nominees will be provided to the Governance and Nominating Committee of the Board which has overall responsibility for recommending nominees to the Board.

As a result, the voting trustees will likely have the ability to control all matters submitted to our shareholders for approval, including the election and removal of directors, amendments to our articles and by-laws and approval of any business combination. This may delay or prevent an acquisition or cause our share price to decline.

We may not be able to effectively manage growth.

We intend to continue to increase our business in Canada and in foreign markets, to further expand the types of businesses in which we engage and to make selective acquisitions. This growth and expansion has placed, and will continue to place, a significant demand on management resources. To manage growth effectively, we must maintain a high level of content quality, efficiency and performance and must continue to enhance our operational, financial and management systems, and attract, train, motivate and manage our employees. We may not be able to effectively manage this expansion and any failure to do so could have a material adverse effect on our business, financial condition or results of operations.

We operate in highly competitive industries.

Participants in the broadcasting and publishing industries depend primarily upon the sale of advertising and paid subscriptions to generate revenue. Competition for advertising, subscribers, viewers, listeners, readers and distribution is intense and comes from broadcast television stations and networks and specialty cable channels; radio; local, regional and national newspapers; direct mail; and other communications and advertising media that operate in these markets. Our competitors include both privately-owned companies and government-owned market participants. In addition, there is increasing consolidation in the Canadian broadcasting, publishing and other media industries and competitors increasingly include market participants with interests in multiple industries and media. We cannot assure you that existing and future competitors will not pursue or be capable of achieving similar or competitive business strategies. Some of our competitors have greater financial and other resources than we do. Our ability to compete successfully depends on a number of factors, including our ability to secure popular television programs and high quality editorial content, our ability to achieve high distribution levels and subscriptions and our ability to generate advertising revenue. We cannot assure you that we will be able to compete successfully in the future against existing or potential competitors, or that increased competition will not have a material adverse effect on our business, financial condition or results of operations.

Our television, newspaper and other content may fail to attract large audiences, which may limit our ability to generate advertising and circulation revenue.

Our ability to attract advertisers and generate revenue and profits is dependent in large part on our success in attracting viewers, listeners and readers through the programming we broadcast and the newspapers we publish. Audience acceptance is a function of the content offered and is influenced by factors including the reviews of critics, promotions, the quality and acceptance of other competing content in the marketplace during the same time slots, the availability of alternative forms of entertainment, general economic conditions and public tastes and perceptions generally, as well as other intangible factors. Although we make significant investments in programming and in our newspapers, we cannot assure you that our programming will maintain satisfactory viewership levels, or that our newspapers will

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maintain satisfactory readership levels, in the future. All of these factors could change rapidly and many are beyond our control. Lack of audience acceptance of our programming and newspapers could have a material adverse effect on our businesses, financial condition or results of operations.

We are largely dependent on particular advertising customer segments, and variations in customer demand in these segments could adversely affect our ability to generate revenue.

A large portion of our advertising revenue is derived from the automobile, technology, retail, food and beverage, telecommunications, travel, packaged goods and entertainment sectors. These sectors have historically been sensitive to changes in economic conditions and economic cycles generally. Thus, a downturn in these sectors could impact our ability to generate advertising revenues and negatively affect our business, financial condition or results of operations.

We compete with alternative technologies and may be required to invest a significant amount of capital to address continued technological development.

The media industry is experiencing rapid and significant technological changes that may result in alternative means of program and content transmission that could have a material adverse effect on our business, financial condition or results of operation. The continued growth of the internet has presented alternative content distribution options that compete with traditional media. Further, in each of our broadcasting markets, industry regulators have authorized direct-to-home satellite, microwave and cable services, and may authorize other alternative methods of transmitting television, radio and other content with improved speed and quality. We may not be able to successfully compete with existing or newly developed alternative technologies or may be required to acquire, develop or integrate new technologies. The cost of the acquisition, development or implementation of new technologies could be significant and our ability to fund such implementation may be limited and could have a material adverse effect on our ability to successfully compete in the future.

Revenue is subject to cyclical and seasonal variations and is generated primarily from advertisers.

Our business is cyclical in nature. Because our business depends upon the sale of advertising for a substantial portion of revenue, our operating results are sensitive to prevailing economic conditions, including changes in local, regional and national economic conditions, particularly as they may affect advertising expenditures. In addition, newspaper publishing is both capital and labor intensive and, as a result, newspapers have relatively high fixed cost structures. During periods of economic contraction, revenue may decrease while some costs remain fixed, resulting in decreased earnings. Similarly, because a substantial portion of revenue is derived from retail advertisers, which have historically been sensitive to general economic cycles, our business, financial condition or results of operation could be materially adversely affected by a downturn in the retail sector.

Our business has experienced and is expected to continue to experience significant seasonality due to, among other things, seasonal advertising patterns and seasonal influences on people’s viewing, reading and listening habits. Typically, revenue is lowest during the fourth quarter of the fiscal year, which ends in August, and highest during the first quarter of the fiscal year.

Acts of terrorism and other political and economic developments could adversely affect revenue.

Our revenue and profitability depend on the sale of advertising. Our revenues were negatively affected by the impact of the September 11th tragedy on advertising expenditures in 2001 and, more recently, were modestly affected by war in Iraq in early 2003. If there are further acts of terrorism or other hostilities, or if other future financial, political, economic and other uncertainties arise, this could lead to a reduction in advertising expenditures, which could materially adversely affect our business, financial condition or results of operations.

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We may be adversely affected by variations in television programming acquisition costs.

The most significant cost in the broadcasting businesses is television programming. We cannot assure you that our broadcasting operations will not be exposed in the future to volatile or increased television programming costs which may adversely affect our operating results. Developments in cable, satellite or other forms of distribution could also affect both the availability and the cost of programming and increase competition for advertising expenditures. In addition, the production and distribution costs of television and other forms of entertainment, as well as television programming costs, may increase. Moreover, programs may be purchased for broadcasting two to three years in advance, making it difficult to predict how such programs will perform. In some instances, programs must be replaced before their costs have been fully amortized, resulting in revised amortization periods or impairments that would increase operating costs.

We may be adversely affected by strikes and other labor protests.

Approximately 39% of our employees are represented by unions and covered by collective bargaining agreements. Any strikes, lock-outs and other form of labor protests could disrupt operations and could have a material adverse effect on our business, financial conditions or results of operations.

Approximately 63% of our Canadian broadcast employees are unionized and are employed under a total of 15 collective agreements. Two of these agreements are currently in negotiation. In 2005, one agreement will expire and in 2006, four agreements will expire.

Thirteen of our Canadian broadcasting bargaining units are represented by the Communications, Energy and Paper-workers Union of Canada (CEP). On April 27, 2001, this union applied to consolidate these 12 bargaining units covering approximately 1,000 employees into a single bargaining unit. On March 4, 2005, the Canadian Industrial Relations Board (CIRB) determined that the 12 bargaining units would be restructured into three bargaining units. The three bargaining units in Halifax and St. John would constitute a Maritimes bargaining unit. The eight bargaining units in western Canada (Victoria, Vancouver, Kelowna, Calgary, Lethbridge, Edmonton, Saskatoon and Winnipeg) would be amalgamated into a Western Canada bargaining unit. The Toronto bargaining unit would remain a stand-alone unit. As a result of this decision, future labour conflicts may involve larger numbers of employees that could increase the cost and disruption to our business from strikes, lockouts and other forms of labour protest. Both parties have applied to the Board for a reconsideration of its decision in accordance with the procedures set out in the Canada Labour Code.

Approximately 49% of our Canadian publishing employees are employed under 41 collective bargaining agreements. Five of these collective agreements are in negotiation and no others will expire in 2005. In 2006, a further 10 agreements will expire. In general, our collective agreements cover operations at individual publications or business locations, rather than multiple locations. We may not be able to renew these collective agreements on satisfactory terms or at all, and we may experience strikes, lockouts and other forms of labor protests in the future.

Approximately 30% of TEN Group’s workforce is unionized and employed under the 2005 Network TEN Enterprise Agreement. A new three year agreement was ratified during 2005.

Any strike, lock-out, or other form of labor protest could have a material adverse effect on our business, financial condition or results from operations.

We may be adversely affected by variations in the cost of newsprint.

Newsprint expense represents one of our largest raw material expenses and, after wages and employee benefits expenses and programming acquisition costs, is our most significant operating cost. Newsprint costs vary widely from time to time and price changes in newsprint can significantly affect the overall

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earnings of our publishing operations. There can be no assurance that our publishing operations will not be exposed in the future to volatile or increased newsprint costs which could have a material adverse effect on our business, financial condition or results of operations.

The Publications Group has historically provided a substantial portion of our cash flow from operations.

Following the Income Fund transactions in October 2005, our cash flow from the Publications Group will be diluted for the 25.8% interest held by the Income Fund and will be received by way of distributions from the Limited Partnership, a portion of which are subordinated. If distributable cash of the Limited Partnership is not sufficient to pay the entire distribution our share will be disproportionately affected by the shortfall. We expect to receive annual distributions of approximately $146 million from the Limited Partnership related to our 74.2% interest. $108 million of these distributions will be payable to us on the same priority as the amounts payable to the Income Fund while the remaining $38 million is subordinated and will be payable on a quarterly basis only if the Limited Partnership has sufficient distributable cash.

We have historically received significant distributions for Australia’s TEN Group, and there can be no assurance that such distributions will continue at the same level or at all.

We have historically received significant distributions from the TEN Group, in the form of dividends and interest payments. Distributions form TEN Group amounted to $153 million in the year ended August 31, 2005. TEN Group maintains an A$700 million credit facility and, as at August 31, 2005, A$180 million was outstanding under this facility. Additional loans under TEN Group’s credit facility would increase TEN Group’s interest expense and could reduce the amount of cash available for distribution by TEN Group. We do not own a majority or controlling voting interest in TEN Group, nor do we exercise control over its management, strategic direction or daily operations. There can be no assurances that distributions from TEN Group will continue at a similar level or at all. A significant decline in distributions from TEN Group could have a material adverse effect on our ability to service our indebtedness.

We may be adversely affected by foreign exchange fluctuations.

Fluctuations in the values of the currencies of Australia, New Zealand and Ireland relative to the Canadian dollar have affected the comparison of Canadian dollar translated amounts over periods of time. The most significant impact relates to the Australian dollar as a result of our economic interest in TEN Group. For example, based on fiscal 2005 net earnings from TEN Group, a 1% increase or decrease in the average rate of exchange used to translate results from TEN Group would increase or decrease our consolidated net earnings by $1.2 million, respectively. In fiscal 2005 compared to fiscal 2004, the average rate of exchange used to translate results from TEN Group decreased by 3%. Additionally, as of August 31, 2005, since our initial acquisition of TEN Group in 1992, we have realized a total of $5.0 million in currency translation losses arising from distributions made by TEN Group to us.

Virtually all of our revenue is generated in the local currencies of countries in which we operate, while certain programming and other expenses are incurred in U.S. dollars. In addition, a significant portion of our borrowing is denominated in U.S. dollars and interest, principal and premium, if any, on such borrowing must be paid in U.S. dollars. As a result, we are exposed to foreign currency exchange risk. We have entered into cross currency interest rate swaps, which convert the U.S. dollar principal and interest payable under the senior credit facility and the senior and senior subordinated notes into Canadian dollar obligations, to hedge foreign exchange rate risk and cash flow risk, with the exception of US$41.9 million in senior subordinated notes which are not hedged. In the year ended August 31, 2005 we have been required to make payments of a net amount of $97 million to recoupon the swaps in order to maintain the fair value of our interest rate and cross currency swaps within the limits prescribed under our senior credit facility. Subsequent to year end, we were required to make additional swap recouponing payments of $118 million. There can be no assurance that exchange rate fluctuations in the future will not have a material adverse effect on our ability to make payments in respect of the new notes, as we may be

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required to provide additional cash or other collateral to secure our obligations in respect of our hedging transactions.

Changes in government regulation could adversely affect our business, financial condition or results of operations.

Changes to the regulations and policies governing broadcast television, specialty cable channels and program distribution through cable and direct-to-home satellite services, the introduction of new regulations or policies or terms of licenses or treatment of the tax deductibility of advertising expenditures could have a material adverse effect on our business, financial condition or results of operations.

Broadcasting operations are generally subject to extensive government regulation. Regulations govern the issuance, amendment, renewal, transfer and ownership of broadcast licenses in virtually all jurisdictions and, in some jurisdictions, govern the timing and content of programming; the timing, content and amount of commercial advertising; and the amount of foreign versus domestically produced programming. In many jurisdictions, including Australia and Canada, there are significant restrictions on the ability of foreign entities to own or control broadcasting businesses.

Our Canadian television operations are regulated pursuant to the Broadcasting Act (Canada). The Canadian Radio-television and Telecommunications Commission, or CRTC, administers the Broadcasting Act (Canada), and among other things, grants, amends and renews broadcasting licenses, approves certain changes in corporate ownership and control. The CRTC also may determine and implement broadcasting regulations and policies pursuant to the Broadcasting Act (Canada), subject to certain directions from the federal cabinet. Television broadcasting operations in Canada are also subject to simultaneous program substitution requirements, cable priority carriage rules, specialty service access rules, content rules and foreign ownership restrictions, all of which we must comply with. Changes to the regulations and policies governing broadcast television, specialty cable channels and program distribution through cable and direct-to-home satellite services or the introduction of new regulations, policies or terms of license or changes to the treatment of tax deductibility of advertising expenditures could have a material adverse effect on our business, financial condition or results of operations.

In June 2003, a House of Commons committee, the Standing Committee on Canadian Heritage, released the findings of a study of the current state and future direction of Canada’s broadcasting system and the efficacy of the Broadcasting Act (Canada) in meeting policy objectives. Included among the broad ranging issues considered by the Committee were cross-media ownership, foreign ownership, license fees, program funding, community, local and regional broadcasting, the effectiveness of the CRTC, digital transmission, performance measurement and Canadian content and cultural diversity. In November 2003 the government responded to the report, but did not deal substantively with any of the issues identified in the report. However, since that response there has been a federal general election, a change in the leadership in the responsible ministries and a series of events that have resulted in a great deal of public scrutiny of the CRTC and its decision making and regulatory processes. Following the election, the standing committee re-submitted its 2003 report to the Government of Canada. The Government of Canada again responded to this report. The response included a statement of support for further study of cross media ownership and encouraged the CRTC to support diversity in the consideration of license applications. The introduction of new laws, regulations or policies with respect to these matters may be forthcoming, and could have a material adverse effect on the our business, financial condition or results of operations.

Our operations outside of Canada are also subject to government regulation. In Australia, our investments are subject to statutes and regulation regarding licensing, programming standards, ownership and control of commercial broadcasting services and administering the allocation of broadcasting frequency spectrum. In March 2002, the Australian Government introduced the Broadcasting Services Amendment (Media Ownership) Bill 2002, which would remove limitations in the BSA on foreign ownership and control of the Australian media, leaving the sector to be regulated under the Foreign Acquisitions and Takeovers Act 1975 and Australia’s general foreign investment policy. At that time the Australian Senate did not support the bill. In 2004, the Government was re-elected and as

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of July 2005, also holds a majority of seats in the senate. The Australian Government has restated its commitment to reforming Australia’s cross ownership and foreign media ownership laws. Although the exact form of any legislation and the timing of its introduction are uncertain, any such legislation, if passed, could have a significant impact on the competitive environment in which we operate in Australia. Relaxation of the ownership restrictions may lead to further consolidation in the Australian media sector and allow our competitors to strengthen their positions. If we are unable to successfully adapt to changes in Australian competitive and regulatory environment, our business may be adversely affected.

Although the New Zealand radio and television broadcasting industry was deregulated in 1989, our New Zealand operations remain subject to broadcasting standards and to general legislation concerning foreign investment in New Zealand. Television broadcasting in the Republic of Ireland is regulated with respect to, among other things, licensing, ownership and control, advertising and programming. There can be no assurance that any changes to the rules and regulations affecting our operations outside of Canada will not have a material adverse effect on the business, financial condition or results of operations of our non-Canadian subsidiaries and investments or our ability to maintain our ownership interests in our non-Canadian subsidiaries and investments.

The CRTC and other applicable broadcasting regulatory authorities may not renew our existing broadcasting licenses or grant us new licenses on acceptable terms, or at all.

Our CRTC broadcasting licenses must be renewed from time to time, typically every seven years, and cannot be transferred without regulatory approval. The CRTC considered our applications for the renewal of the licenses for all of our Canadian television stations, except CJNT (Montreal) (the license for which expires in 2007) in 2001. New licenses were granted with effect from September 1, 2001 for the maximum seven-year term. Our license for Global Prime was renewed in 2004, for the maximum seven-year term and our licenses for our Category 1 and Category 2 digital specialty channels expire in 2007.

While CRTC regulations and policies do not require CRTC approval before a broadcaster purchases an unregulated media entity, such as a newspaper, the CRTC considered the issue of our cross-media ownership at license renewal proceedings. The CRTC has expressed its support for the promotion of diversity in broadcasting expression at a local and national level, primarily with respect to news voices, and has the power to preserve diversity of voices and prevent or address the emergence of undue competitive advantage on behalf of one licensee where it is found to exist. As a condition of the recent license renewals, the CRTC directed us to abide by its proposed code of conduct respecting the maintenance of separate management over the television and print news operations. There can be no assurance that, in future license renewal proceedings, the CRTC will not require us to take measures which could have a material adverse effect on the integration of Canadian publishing assets with our broadcasting assets and our ability to continue to realize certain of the anticipated benefits of acquiring our Canadian publishing operations.

Our New Zealand radio operations hold broadcasting licenses that will expire in 2011. All VHF television licenses expire in 2015. Both television and radio licenses have rights of incumbency. Discussions with government on the renewal of our FM radio frequencies in 2011 were successfully concluded during the 2005 financial year. As a consequence, we expect to pay approximately $40 million as a one time cash payment in 2011 to renew all of our FM radio frequencies for a further 20 years until 2031. It is expected that negotiations for renewal of television VHF frequencies will not take place for several years.

The licenses held by Network TEN’s stations in Sydney, Melbourne, Brisbane and Perth were renewed in 2002 and will be subject to renewal by the Australian Broadcasting Authority in 2007. The license for Network TEN’s Adelaide station was renewed in 2004 and will be subject to renewal in 2009. Licenses in other jurisdictions are also subject to renewal from time to time. Our inability to renew any of our licenses or acquire new interests or licenses on acceptable terms, or at all, could have a material adverse effect on our business, financial condition or results of operations. To date, we have not had a license renewal declined.

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We may not be successful in defending a lawsuit which has been commenced against us and certain of our subsidiaries.

On March 5, 2001, certain plaintiffs who owned a 29.3% interest in CanWest Broadcasting Ltd., or CBL, filed a statement of claim with the Ontario Superior Court of Justice against us, certain of our subsidiaries and Israel Asper (the “Ontario Action”). The plaintiffs claimed, among other things, that the defendants:

• acted in a manner that is oppressive and unfairly prejudicial to the plaintiffs;

• improperly favored the interests of the defendants over the interests of CBL and the plaintiffs (including the diversion of corporate opportunities);

• owe fiduciary duties to the plaintiffs; and

• wrongly terminated certain contracts with the plaintiffs and replaced them with non-arm’s length contracts.

At the time of the commencement of the action, we owned 70.67% of CBL and the plaintiffs owned the minority interest. CBL owned the Global Television Network stations in British Columbia (CKVU), Manitoba (CKND) and Saskatchewan (CFRE and CFSK). On May 1, 2001, CBL amalgamated with one of our indirect wholly-owned subsidiaries to continue as CBL Amalco. Under the terms of the amalgamation agreement, we received all of the shares of CBL Amalco and the minority shareholders of CBL received special preference shares of CanWest. CanWest redeemed the special preference shares for $57.7 million on December 18, 2002. By way of an application initiated by the defendants, the Ontario Superior Court in November, 2001 stayed the Ontario Action on the basis that the Ontario courts have no jurisdiction to try the claim and alternatively, that Manitoba was the convenient forum for trial of the action. The Ontario Court of Appeal subsequently upheld the Ontario decision by a decision issued in February 2003. In January 2004, the Supreme Court of Canada refused the plaintiffs leave to appeal the Ontario Court of Appeal’s decision. By a statement of claim dated April 5, 2004, issued in the Manitoba Court of Queen’s Bench, the plaintiffs commenced a suit against the defendants noted above as well as Leonard Asper, claiming in substance the same matters as in the Ontario Action and as well that the amalgamation was oppressive to the interests of the plaintiff. The plaintiffs are seeking, among other things, damages of $405 million (including aggravated and punitive damages). While the defendants intend to do so, they have yet to file a statement of defense. There can be no assurances as to the outcome of the lawsuit, the timing or amounts of any payments we may make in connection with the lawsuit (including litigation expenses), whether any additional allegations or claims will be made, how long the suit will last or as to any of the other risks inherent in any litigation. There can be no assurance that CanWest and the other defendants will be successful in defending this lawsuit. While we believe these claims to be substantially without merit, a significant adverse result could have a material adverse effect on our business, financial condition or results of operations.

We do not control and are not permitted to control some of our broadcasting assets.

We do not own a majority voting interest in Australia’s TEN Group, nor do we control its management or strategic direction, and we are not permitted under Australian law to own more than 15% of the equity of TEN Group. We do not own a majority interest in TV3 in Ireland. There can be no assurance that TEN Group and/or TV3 will not take any actions that could have a material adverse effect on our economic or ownership interest in such entities.

We may be adversely affected by changes in government incentive programs for Canadian program production.

The CRTC requires Canadian broadcasters to broadcast certain amounts of content of Canadian origin. Often, a portion of the production budgets of Canadian programs is financed by Canadian government

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agencies and incentive programs, such as the Canadian Television Fund, Telefilm Canada and federal and provincial tax credits. There can be no assurance that such financing will continue to be available at current levels, or at all. Reductions or other changes in the policies of Canada or its provinces in connection with their incentive programs could have an adverse effect on our business, financial condition or results of operations.

We are subject to extensive environmental regulations.

We are subject to a variety of Canadian and foreign environmental laws and regulations concerning emissions to the air, water and sewer discharges, handling, storage and disposal of wastes, recycling, remediation of contaminated sites, or otherwise relating to protection of the environment. Environmental laws and regulations and their interpretation have changed rapidly in recent years and may continue to do so in the future. Failure to comply with present or future laws or regulations could result in substantial liability. Our properties, as well as areas surrounding those properties, particularly those in areas of long-term industrial use, may have had historic uses (or may have current uses, in the case of surrounding properties) which may affect our properties and require further study or remedial measures. There can be no assurance that all environmental liabilities have been identified, that any prior owner of the properties did not create a material environmental condition not known to us, or that a material environmental condition does not otherwise exist at any of our properties.

DIVIDEND POLICY

We do not currently pay dividends. Any future determination to pay dividends will be at the discretion of our Board of Directors from time to time having regard to our capital requirements.

CAPITAL STRUCTURE

Our authorized capital consists of an unlimited number of preference shares issuable in series, multiple voting shares, subordinate voting shares and non-voting shares.

The multiple voting shares, the subordinate voting shares and the non-voting shares rank equally on a per share basis in respect of dividends and distributions of capital, and are subordinate to the preference shares. Subordinate voting shares carry one vote per share, and multiple voting shares carry ten votes per share. Non-voting shares do not vote, except at meetings where the holders of such shares would be entitled, by law, to vote separately as a class.

Multiple voting shares are convertible into subordinate voting shares and non-voting shares on a one-for-one basis at any time at the option of the holder. Subordinate voting shares are convertible into non-voting shares on a one-for-one basis at any time at the option of the holder. Non-voting shares are convertible into subordinate voting shares on a one-for-one basis provided the holder is Canadian.

Series 1 preference shares carry 19 votes per share, and carry preferential votes pertaining to the election of up to two directors. Each series 1 preference shares is convertible, at the option of the holder, into 0.15 subordinate voting or non-voting shares.

Series 2 preference shares are not eligible to vote. Series 2 preference shares are, at our option, redeemable for cash, or convertible to subordinate voting or non-voting shares based on the market value of the subordinate voting or non-voting shares at the date of conversion.

The series 1 and 2 preference shares are not entitled to dividends and distributions in the normal course or in respect of a liquidation or wind-up and have no right to vote separately as a class.

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We are a constrained-share company, of which at least 66.7% of the voting shares must be beneficially owned by persons who are Canadian citizens or corporations controlled in Canada. There is no limit on the number of non-voting shares that a non-Canadian can hold.

Any Canadian citizen purchasing non-voting shares can present them for registration as either subordinate voting shares or non-voting shares. Non-voting shares can be purchased by anyone, Canadian or otherwise. Subordinate voting shares purchased by a non-Canadian will, upon registration of transfer, be converted into non-voting shares by the our registrar, Computershare Trust Company of Canada.

Ratings

We, and our wholly owned subsidiary CanWest Media Inc., have received the following credit ratings from each of Dominion Bond Rating Service Limited (“DBRS”), Standard & Poors Rating Services (“S&P”) and Moody’s Investors Service (Moody’s”) (each a “Rating Agency”):

	DBRS	S&P	Moody’s
Corporate rating	BB Stable	B + / Watch / Dev	Ba3 Stable/ Under Review
Senior secured notes	Not rated	B +/ Watch / Dev	Ba2 Stable/ Under Review
Senior unsecured notes	BB (low) Stable	B - /Watch / Dev	Ba3 Stable/ Under Review
Senior subordinated notes	B (high) Stable	B - /Watch / Dev	B2 Stable/ Under Review

Dominion Bond Rating Service

DBRS’ credit ratings are on a long-term rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to DBRS, a rating of BB by DBRS is in the middle of three subcategories within the fifth highest of ten major categories and a rating of B is in the sixth highest of ten major categories. The assignment of a “(high)” or “(low)” modifier within each rating category indicates relative standing within such category. The “(high)” and “(low)” grades are not used for the AAA category.

In October 2005, DBRS confirmed the ratings of CanWest MediaWorks Inc. following the completion of the initial public offering of the CanWest MediaWorks Income Fund. Previously in September, on the announcement of the initial public offering, DBRS had placed the ratings “Under Review with Developing Implications”.

In confirming their ratings, DBRS noted our retention of a 74% interest in the Publishing Group and that they viewed the approximately $400 million reduction in consolidated debt as positive.

Standard & Poor’s Ratings Services

S&P’s credit ratings are on a long term debt rating scale that ranges from AAA to D, which represents the range from the highest to lowest quality of such securities rated. According to S&P, the B rating is the sixth highest of ten major rating categories. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

In September 2005, S&P placed credit ratings on CanWest MediaWorks Inc. on CreditWatch with developing implications. The CreditWatch placement followed the filing of the registration statement by CanWest MediaWorks in connection with the initial public offering of the CanWest MediaWorks Income Fund. S&P had previously assigned a B+ / Stable rating to the corporate rating.

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Moody’s Investors Service

Moody’s credit ratings are on a long term debt rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality of such securities rated. According to Moody’s, a rating of Ba is the fifth highest of nine major categories and a rating of B is in the sixth highest of the nine major categories. Moody’s applies numerical modifiers 1,2 and 3 in each generic rating classification from Aa to Caa in its corporate bond rating system. The modifier 1 indicates that the issue ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.

In September 2005, Moody’s placed ratings of CanWest MediaWorks Inc. under review for possible upgrade following our announcement that we intended to reduce debt as a result of the CanWest MediaWorks Income Fund transaction.

We understand that the ratings are based on, among other things, information furnished to the Ratings Agencies by us and information obtained by the Ratings Agencies from publicly available sources. The credit ratings given by the Ratings Agencies are not recommendations to buy, hold or sell any of our securities since such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future.

MARKET FOR SECURITIES

Subordinate and Non Voting Shares

The Subordinate Voting Shares are listed for trading on The Toronto Stock Exchange under the symbol CGS.SV. The Non-Voting Shares are listed for trading on the Toronto Stock Exchange under the symbol CGS.NV and on The New York Stock Exchange under the symbol CWG.

The price range and volume of trading of our subordinate voting stock (CGS.SV) on the TSX for the period from September 2004 to August 2005 are as follows:

Date	High	Low	Close	Volume
Aug-05	15.78	13.00	15.15	22,603,900
Jul-05	14.15	12.99	13.11	13,122,800
Jun-05	14.40	13.50	13.62	17,026,200
May-05	14.69	13.02	14.20	10,417,600
Apr-05	15.30	13.11	13.74	8,663,600
Mar-05	15.59	13.98	14.70	16,301,300
Feb-05	15.45	14.15	14.15	10,472,200
Jan-05	15.75	14.25	14.76	19,196,300
Dec-04	14.80	12.80	14.46	13,470,800
Nov-04	13.25	11.71	12.91	18,174,600
Oct-04	12.25	9.76	12.16	12,207,500
Sep-04	10.05	9.15	9.80	16,351,300

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The price range and volume of trading of our non-voting stock (CGS.NV) on the TSX for the period from September 2004 to August 2005 are as follows:

Date	High	Low	Close	Volume
Aug-05	15.75	12.90	15.14	136,800
Jul-05	14.15	12.96	13.08	129,400
Jun-05	14.28	13.51	13.60	108,400
May-05	14.79	13.05	14.17	89,100
Apr-05	15.20	13.28	13.65	112,700
Mar-05	15.68	13.81	14.81	201,100
Feb-05	15.44	14.00	14.22	250,000
Jan-05	15.65	14.00	14.84	138,100
Dec-04	14.70	12.75	14.52	122,600
Nov-04	13.21	11.71	12.82	124,800
Oct-04	12.49	9.75	12.24	183,200
Sep-04	10.89	9.05	9.87	79,200

The price range and volume of trading of our non-voting stock (CWG) on the NYSE for the period from September 2004 to August 2005 are as follows (in US$):

Date	High	Low	Close	Volume
Aug-05	13.04	10.75	12.78	40,500
Jul-05	11.74	10.55	10.68	41,600
Jun-05	11.62	11.00	11.10	45,500
May-05	11.40	10.49	11.30	36,600
Apr-05	12.55	10.75	10.89	64,900
Mar-05	12.82	11.34	12.24	46,600
Feb-05	12.40	11.51	11.51	135,300
Jan-05	12.95	11.59	11.93	67,200
Dec-04	12.00	10.58	12.00	73,600
Nov-04	11.00	9.55	10.79	75,000
Oct-04	9.95	7.87	9.94	104,900
Sep-04	7.81	7.06	7.81	41,600

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Debt Securities

The 7 5/8% Senior Unsecured Notes due April, 2013, the 10 5/8% Senior Subordinated Notes due May, 2011 and the 8% Senior Subordinated Notes due September, 2012 of CanWest Media are registered with the Securities Exchange Commission, unlisted, and eligible for trading in The Portal Market^™, an electronic screen based system which permits the trading of eligible privately placed securities by certain qualified institutional investors. Substantially all of the 7 5/8% Senior Unsecured Notes and the 10 5/8% Senior Subordinated Notes were retired in October 2005 pursuant to a tender offer and consent solicitation.

The 8% Senior Subordinated Notes due September 2012 were issued on November 18, 2004. These notes were registered June 2005 under the Securities Act of 1933, as amended, or any state securities laws and were issued only to “qualified institutional buyers” in accordance with Rule 144A under the Securities Act and outside the United States in accordance with Regulation S under the Securities Act.

The trading levels for these debt securities for the 2005 fiscal year are as follows:

	7.625% due 4/15/2013			10.625% due 5/15/2011			8.00% due 9/15/2012
	High	Low	Close	High	Low	Close	High	Low	Close
September 2004	108.000	106.000	107.500	114.125	113.500	113.750	—	—	—
October 2004	108.750	107.000	108.750	113.625	112.750	113.000	—	—	—
November 2004	109.500	108.250	108.250	113.250	112.500	112.500	107.000	104.000	107.000
December 2004	109.375	108.000	108.875	112.750	112.250	112.250	107.750	107.000	107.250
January 2005	109.000	107.750	108.000	112.500	111.250	111.375	107.875	107.000	107.000
February 2005	109.625	108.000	109.250	111.500	111.000	111.125	107.875	106.750	107.750
March 2005	109.250	105.500	105.500	111.250	108.750	109.000	107.750	104.000	105.250
April 2005	106.500	104.500	104.756	110.000	108.500	108.500	105.250	102.250	102.250
May 2005	107.000	104.000	107.000	109.125	108.250	109.125	104.000	101.500	104.000
June 2005	108.625	106.250	107.000	109.875	109.000	109.125	105.250	103.500	105.250
July 2005	107.625	106.500	107.000	109.500	108.750	109.000	106.250	104.750	106.125
August 2005	107.500	107.000	107.000	109.000	108.000	108.000	106.125	105.000	105.000

Source: FT Interactive, via Advantage Data.

Note: Prices are expressed as a percentage of par.

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DIRECTORS AND OFFICERS

The following table sets out certain information with respect to the directors and executive officers of CanWest Global Communications Corp. as of the date hereof.

Name and Municipality of Residence	Office or Position with Company	Principal Occupation	Director Since
David A. Asper(1) Winnipeg, Manitoba	Director	Executive Vice President of the Company Chairman of the National Post	January 1997
Gail S. Asper Winnipeg, Manitoba	Secretary and Director	Secretary of the Company	February 1992
Leonard J. Asper Winnipeg, Manitoba	President and Chief Executive Officer and Director	President and Chief Executive Officer of the Company	January 1997
Dr. Lloyd I. Barber, C.C., S.O.M., LL.D.(1)(3)(4) Regina Beach, Saskatchewan	Director	President Emeritus, University of Regina	February 1992
Derek Burney, OC(2) (3) Ottawa, Ontario	Director	Adjunct Professor and Senior Distinguished Fellow, Carleton University	April 2005
Ronald J. Daniels(3) Ardmore, Pennsylvania	Director	Provost, University of Pennsylvania	January 2004
David J. Drybrough, F.C.A.(4) East St. Paul, Manitoba	Chair of the Board of Directors and Director	Business Consultant	March 2003
Paul V. Godfrey, C.M. (2)(3) Toronto, Ontario	Director	President and Chief Executive Officer, Toronto Blue Jays Baseball Club	January 2004
Frank W. King, OC, P.Eng(2)(3) Calgary, Alberta	Director	President, Metropolitan Investment Corp.	November 2004
Richard M. Leipsic Winnipeg, Manitoba	Vice President and General Counsel of the Company	Vice President and General Counsel of the Company
John E. Maguire Winnipeg, Manitoba	Chief Financial Officer	Chief Financial Officer of the Company
Lisa M. Pankratz, CA, CFA(1)(4) Vancouver, British Columbia	Director	President, Corporate Compliance Officer, Cundill Investment Research Ltd.	April 2005
Thomas C. Strike Winnipeg, Manitoba	President, CanWest MediaWorks International	President, CanWest MediaWorks International
Peter D. Viner Toronto, Ontario	President and CEO, Canadian Operations, CanWest MediaWorks Inc.	President and CEO, Canadian Operations, CanWest MediaWorks Inc.

⁽¹⁾ Member of the Pension Committee.

⁽²⁾ Member of the Governance and Nominating Committee.

⁽³⁾ Member of the Human Resources Committee.

⁽⁴⁾ Member of the Audit Committee.

As at November 28, 2005, all of the Multiple Voting Shares and 3,462,874 of the Subordinate Voting Shares were owned by CanWest Communications Corporation, a company indirectly owned and controlled by trusts for the benefit of members of the family of the late I.H. Asper, including David A. Asper, Gail S. Asper and Leonard J. Asper, who are senior officers and directors of us and Mrs. Ruth M. Asper.

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All of the our directors serve one-year terms and are elected at our annual meeting of shareholders. The term of office of each of the current directors will expire at our annual meeting of shareholders to be held on January 12, 2006.

Each of our directors and officers has been engaged for more than five years in his or her present principal occupation or in other capacities with us (or one of our predecessors) in which he or she currently holds his or her principal occupation except: David A. Asper who, prior to January 2003 was President, Daremax Enterprises Inc., and prior to January 1999, was Vice President, Programming of the Company; Ronald J. Daniels, who, prior to July 2005, was Dean of the Faculty of Law at the University of Toronto; David J. Drybrough, who prior to January 2004 was Vice President, Finance of Gendis Inc.; Paul V. Godfrey, who, prior to September 2000 was President and Chief Executive Officer, Sun Media Corporation; Derek H. Burney, who prior to September 2004 was President and Chief Executive Officer of CAE Inc.; and Lisa M. Pankratz who prior to August 2002 was a corporate consultant and advisor. On November 17, 2005, the Board set at ten, the number of directors to be elected at the annual meeting of shareholders.

Certain of the directors and executive officers hold voting securities in us as described under the section entitled “Election of Directors” in the Management Information Circular dated November 17, 2005 and such information is incorporated by reference herein.

As of November 28, 2005, our directors and executive officers as a group beneficially owned, directly or indirectly, or exercised control or direction over 76,785,976 Multiple Voting Shares, 3,787,881 Subordinate Voting Shares and 556 Non-Voting Shares.

LEGAL PROCEEDINGS

CBL Litigation

On March 5, 2001, certain plaintiffs who owned a 29.3% interest in CanWest Broadcasting Ltd. (“CBL”) filed a statement of claim against us, certain subsidiaries, and Israel Asper. The plaintiffs claim, among other things, that the defendants have acted in a manner that is oppressive and unfairly prejudicial to the plaintiffs; have improperly favored the interests of the defendants over the interests of CBL and the plaintiffs (including the diversion of corporate opportunities); owe fiduciary duties to the plaintiffs; and have wrongly terminated certain contracts with the plaintiffs and replaced them with non-arm’s length contracts.

At the time of the commencement of the action, we owned 70.67% of CBL and the plaintiffs owned the minority interest. CBL owned the Global Television Network stations in British Columbia (CKVU), Manitoba (CKND) and Saskatchewan (CFRE and CFSK). On May 1, 2001, CBL amalgamated with one of our indirect wholly-owned subsidiaries to continue as CBL Amalco. Under the terms of the amalgamation agreement, we received all of the shares of CBL Amalco and the minority shareholders of CBL received special preference shares of CanWest. CanWest redeemed the special preference shares for $57.7 million on December 18, 2002.

By way of an application initiated by the defendants, the Ontario Superior Court in November, 2001 stayed the Ontario Action on the basis that the Ontario courts have no jurisdiction to try the claim and alternatively, that Manitoba was the convenient forum for trial of the action. The Ontario Court of Appeal subsequently upheld the Ontario decision by a decision issued in February 2003. In January 2004, The Supreme Court of Canada refused the plaintiffs leave to appeal the Ontario Court of Appeal’s decision. By a statement of claim dated April 5, 2004, issued in the Manitoba Court of Queen’s Bench, the plaintiffs commenced a suit against the defendants noted above as well as Leonard Asper, claiming in substance the same matters as in the Ontario Action and as well that the amalgamation was oppressive to the interests of the plaintiff. They are seeking, among other things, damages of $405 million (including aggravated and punitive damages). While the defendants intend to do so, they have yet to file a statement of defense.

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Hollinger Litigation

On December 17, 2003, we and The National Post Company filed a statement of claim in the Ontario Superior Court of Justice against Hollinger International Inc., Hollinger Inc. and certain related parties claiming the amount of $25.7 million plus interest for amounts owed to The National Post Company related to our acquisition of 50% of The National Post Company in March 2002. In August 2004, we and The National Post Company obtained partial summary judgment in respect of the claim against Hollinger International Inc. for $22.5 million, plus interest. A payment of $26.5 million was received in November 2004 in satisfaction of this claim. We have also referred to arbitration disputes related to a further approximately $86.5 million we claim to be owed by Hollinger International Inc. and certain of its affiliates related to certain unresolved matters arising from our November 15, 2000 acquisition of certain newspaper assets from Hollinger International Inc. and certain of its affiliates. In the arbitration, Hollinger International claims that it and certain of its affiliates are owed approximately $45 million by CanWest under the relevant agreement.

Other Litigation

We are one of several defendants to a claim by a proposed class of freelance writers instituted in July 2003 in respect of works that they provided to newspapers and other print publications in Canada. The total amount claimed (by all plaintiffs against all defendants) is $500 million in compensatory damages and $250 million in exemplary and punitive damages. While the final outcome of these proceedings cannot be predicted with certainty, any liability that may arise is not expected to have a material effect on our financial position or results of operations.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Senior subordinated notes held by CanWest Communications Corporation, our parent, totaled $49.7 million (US$41.9 million) at August 31, 2005 (2004 - $55 million). The shares of CanWest Communications Corporation are indirectly owned and controlled by Mrs. Ruth M. Asper and trusts for the benefit of members of the family of the late Israel Asper, including his three children, David A. Asper, Gail S. Asper and Leonard J. Asper, who are senior officers and directors of us. This debt matures on May 15, 2011 and bears interest at 10.625%. During 2005, interest expense related to this debt totaled $6.0 million (2004 - $6.3 million). In October 2005 we repaid these notes pursuant to the tender offer and consent solicitation.

In June 2005, a company owned by CanWest Communications Corporation acquired the 50% of CanWest Global Place that it did not already own. We are a tenant in this building. During 2005, rent paid to this company amounted to $1.1 million (2004 - $1.1 million).

INTEREST OF EXPERTS

Our auditors are PricewaterhouseCoopers LLP, chartered accountants, at its offices in Winnipeg, Manitoba. Certain employees, but not partners, of PricewaterhouseCoopers LLP may own our shares.

TRANSFER AGENTS AND REGISTRARS

Computershare Trust Company of Canada

Calgary, Canada

Bank of Nova Scotia Trust Company of New York

New York City, U.S.A.

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ADDITIONAL INFORMATION

Additional information relating to us may be found on SEDAR at www.sedar.com.

Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our securities and securities authorized for issuance under equity compensation plans, is contained in our management information circular dated November 17, 2005 for the annual meeting of shareholders to be held on January 12, 2006.

Additional financial information is provided in our financial statements and management discussion and analysis for the year ended August 31, 2005.

AUDIT COMMITTEE INFORMATION

Audit Committee Mandate

Our audit committee charter is attached as Schedule A to this Annual Information Form.

Composition of the Audit Committee

The Audit Committee is chaired by David J. Drybrough and also includes LLoyd L. Barber and Lisa M. Pankratz. All members of the audit committee are independent and financially literate as defined under Multilateral Instrument 52-110 and do not receive any compensation from us, either directly or indirectly, other than for service as a member of the Board of Directors and its committees.

Relevant Education and Experience

The members of our Audit Committee possess considerable education and business experience relevant to the performance of their audit committee responsibilities, as described below:

David J. Drybrough

Business Consultant

Mr. Drybrough, a Chartered Accountant by training, was, from his retirement in 1997 from the accounting firm PricewaterhouseCoopers LLP (then known as Coopers & Lybrand) Vice President, Finance of Winnipeg based Gendis Inc. until December 2003. From March 2005 he has been Chair of the Board of Directors. He is also Chair of the Board’s Audit Committee. Mr. Drybrough serves as a director and chair of the Audit Committee of Fort Chicago Energy Partners LP.

Dr. Lloyd I. Barber

President Emeritus, University of Regina

Dr. Barber is President Emeritus of the University of Regina. He was appointed an Officer of the Order of Canada in 1978 and was elevated to Companion of the Order in 1993. He serves as a director of several major public Canadian companies such as Teck Cominco Ltd., Greystone Capital Management and Fording Trust.

Lisa M. Pankratz

President, Cundill Investment Research Ltd.

Ms Pankratz, a Chartered Accountant, is President, Corporate Compliance Officer and a Director of Cundill Investment Research Ltd. Prior to her appointment to this position in August 2002, she was a corporate consultant and advisor from August 2000 until July 2002. Prior to this, she was Chief Financial Officer of BuildDirect.com Technologies Inc. Ms Pankratz is a Director of The Insurance Corporation of British Columbia.

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Principal Accountant Fees and Services

The Audit Committee establishes the external auditors’ compensation. For the years ended August 31, 2005 and August 31, 2004, we paid fees to PricewaterhouseCoopers LLP and its affiliates as follows:

For the year ended August 31,	2005	2004
	$000	$000
Audit services	3,092	3,655
Audit related services(1)	1,759	280
Tax services(2)	794	427
	5,645	4,362

⁽¹⁾ Audit related fees include fees for employee benefit plan audits, special audits in connection with the sale of certain operations and consultations concerning financial accounting and reporting standards.

⁽²⁾ Tax services relate to the review of foreign affiliate surplus calculations, consultations with respect to indirect taxation matters and consultations with respect to tax structuring for acquisitions, divestitures, and financing arrangements, including assistance to internal and external legal counsel.

Our Audit Committee pre-approved all audit and non-audit services provided to us or our consolidated subsidiaries. Our Audit Committee has adopted a pre-approval policy pursuant to which specific categories of services have been pre-approved. Engagements pursuant to the pre-approval policy require specific pre-approval as soon as they appear likely to exceed $50,000 in fees. The chair of the Audit Committee is authorized to pre-approve services on behalf of the Audit Committee provided that the chair reports such approvals to the committee. The Audit Committee receives quarterly reports from PricewaterhouseCoopers LLP on the nature and fee levels of all services.

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SCHEDULE A

CanWest Global Communications Corp.

AUDIT COMMITTEE CHARTER

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1. DEFINITIONS

In this Charter the following terms have the meaning set out below.

“Affiliated Entity” A person or company is considered to be an Affiliated Entity of another person or company if one of them controls or is controlled by the other or if both persons or companies are controlled by the same person or company, or the person or company is (i) both a director and an employee of an Affiliated Entity or (ii) an Executive Officer, general partner or management member of an Affiliated Entity.

“Audit Services” means the professional services rendered by the Corporation’s external auditor for the audit and review of the Corporation’s financial statements or services that are normally provided by the external auditor in connection with statutory and regulatory filings or engagements.

“Board” means the Board of Directors of the Corporation.

“Committee” means the Audit Committee of the Board.

“Control” means the direct or indirect power to direct or cause the direction of the management and policies of a person or company, whether through ownership of voting securities or otherwise.

“Corporation” means CanWest Global Communications Corp.

“Director” means an individual elected to the Board as a Director by shareholders at the annual meeting of shareholders of the Corporation or appointed to the Board.

“Executive Officer” of an entity means an individual who is (i) a chair of the entity; (ii) a vice-chair of the entity; (iii) the president of the entity; (iv) a vice-president of the entity in charge of a principal business unit, division or function including sales, finance or production; (v) an officer of the entity or any of its Subsidiary Entities who performs a policy-making function in respect of the entity; or (vi) any other individual who performs a policy-making function in respect of the entity.

“Financially Literate” An individual is Financially Literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements.

“Immediate Family Member” means an individual’s spouse, parent, child, sibling, mother or father-in-law, son or daughter-in-law, brother or sister-in-law, and anyone (other than an employee of either the individual or the individual’s immediate family member) who shares the individual’s home.

“Independent Director” means a Director who has no direct or indirect material relationship with the Corporation.

“Material Relationship” means a relationship which could, in the view of the Board, reasonably interfere with the exercise of a Member’s independent judgment and includes:

(i) an individual who is, or has been, an employee or Executive Officer of the Corporation, unless the prescribed period has elapsed since the end of the service or employment;

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(ii) an individual whose Immediate Family Member is, or has been, an Executive Officer of the Corporation, unless the prescribed period has elapsed since the end of service or employment;

(iii) an individual who is, or has been an Affiliated Entity of, a partner of, or employed by, a current or former internal or external auditor of the Corporation, unless the prescribed period has elapsed since the person’s relationship with the internal or external auditor, or the auditing relationship, has ended;

(iv) an individual whose Immediate Family Member is, or has been, an Affiliated Entity of, a partner of, or employed in a professional capacity by, a current or former internal or external auditor of the Corporation, unless the prescribed period has elapsed since the person’s relationship with the internal or external auditor, or the auditing relationship, has ended;

(v) an individual who is, or has been, or whose Immediate Family Member is or has been, an Executive Officer of an entity if any of the Corporation’s current Executive Officers serve on the entity’s compensation committee, unless the prescribed period has elapsed since the end of the service or employment;

(vi) an individual who has a relationship with the Corporation pursuant to which the individual may accept, directly or indirectly, any consulting, advisory or other compensatory fee from the Corporation or any Subsidiary Entity of the Corporation other than as remuneration for acting in his or her capacity as a Member of the Board or any board committee, or as a part-time chair or vice-chair of the Board or any board committee or receives, or whose Immediate Family Member receives, more than $75,000 per year in direct compensation from the Corporation, other than as remuneration for acting in his or her capacity as a Member of the Board or any board committee, or as a part-time chair or vice-chair of the Board or any board committee, unless the prescribed period has elapsed since he or she ceased to receive more than $75,000 per year in such compensation; and

(vii) an individual who is an Affiliated Entity of the Corporation or any of its Subsidiary Entities.

For the purposes of subclause (vi), the indirect acceptance by a person of any consulting, advisory or other compensatory fee includes acceptance of a fee by a person’s spouse, minor child or stepchild, or a child or stepchild who shares the person’s home or an entity in which such person is a partner, member, an officer such as a managing director occupying a comparable position or Executive Officer or occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to the Corporation or any Subsidiary Entity of the Corporation.

“MD&A” has the meaning ascribed to it in National Instrument 51-102.

“Member” means a Director.

“National Instrument 51-102” means National Instrument 51-102, Continuous Disclosure Obligations.

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“Non-Audit Services” means services other than Audit Services.

“prescribed period” means the shorter of the period commencing on March 30, 2004 and ending immediately prior to the determination required herein and the three (3) year period ending immediately prior to the determination required herein.

“Subsidiary Entity” A person or company is considered to be a Subsidiary Entity of another person or company if (i) it is controlled by that other, or that other and one or more persons or companies each of which is controlled by that other, or two or more persons or companies, each of which is controlled by that other, or (ii) it is a Subsidiary Entity of a person or company that is the other’s Subsidiary Entity.

2. OBJECTIVES

The main objectives of the Committee are to:

(a) assist the Board in meeting its responsibilities for identification of the principal risks of the business of the Corporation including financial, accounting and legal matters and for evaluating the internal systems and controls intended to manage such risks;

(b) evaluate the accuracy and credibility of the financial reports prepared by management;

(c) support and preserve the independence of the audit function;

(d) provide effective oversight of the financial reporting process and to report regularly to the Board on its activities and findings;

(e) recommend to the Board the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation and the compensation of the external auditor;

(f) oversee the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting;

(g) pre-approve all Non-Audit Services to be provided to the Corporation or its Subsidiary Entities by the Corporation’s external auditor;

(h) review the Corporation’s financial statements, MD&A and annual and interim earnings press releases before the Corporation publicly discloses this information;

(i) satisfy itself that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, other than the public disclosure referred to in paragraph (h), and must periodically assess the adequacy of those procedures;

(j) establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters; and

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(k) review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Corporation.

3. COMPOSITION

(a) The Committee shall be composed of not less than three Members, all of whom shall be Independent Directors and all of whom shall be Financially Literate. Notwithstanding the foregoing, a Member who is not Financially Literate may be appointed to Committee provided that the Member becomes Financially Literate within a reasonable period of time following his or her appointment.

(b) Members shall serve for a one year term unless they resign, and may be reappointed to serve consecutive terms.

(c) The Chair and the Secretary of the Committee shall be appointed by the Board.

(d) The Committee shall meet at least four times per year and may meet more often if required.

(e) A quorum at meetings of the Committee shall be two Members.

(f) The Committee shall establish its own procedures, including the timing and place of meetings and such other procedures as it considers necessary or advisable.

The Chair of the Board and Chief Executive Officer, the Chief Financial Officer, and, if any, the President and Chief Operating Officer, shall be entitled to attend all meetings of the Committee unless they are requested by the Committee not to do so.

4. AUTHORITY

The primary responsibility for the Corporation’s financial reporting, accounting systems and internal controls is vested in senior management and is overseen by the Board. The Committee is a standing committee of the Board established to assist the Board in fulfilling its responsibilities in this regard.

The Committee shall have unrestricted direct access to the Corporation’s personnel, documents, external auditors and internal auditors and will be provided with the resources necessary to carry out its responsibilities. The Committee shall have the authority to engage independent counsel and other advisers as it deems necessary to carry out its duties and to set and pay the compensation for any advisers so engaged. In carrying out its mandate, the Committee’s review of the various activities of the Corporation shall include such investigation, analysis and approval of such activities as it may consider necessary.

5. RESPONSIBILITIES

The responsibilities of the Committee shall be:

(a) ANNUAL FINANCIAL INFORMATION

Review with management and, where appropriate, with the external auditors and recommend or report to the Board with regard to:

• the annual financial statements and the accounting policies, accounting judgements, accruals, estimates, material related party transactions and other matters relevant to their preparation.

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• MD&A to be included in the Annual Report.

• other financial information to be included in the Annual Report.

• the Annual Information Form (AIF).

• the status of any material pending or threatened litigation.

• annual press releases.

• other matters in connection with the annual external audit including:

(i) the scope of the engagement and procedures to be followed

(ii) audit fees

(iii) an assessment by the external auditors of the quality and acceptability of the Corporation’s accounting practices as applied in its financial reporting.

(b) QUARTERLY REPORTS

• Review and approve the process, including the degree of involvement of the external auditors, for the preparation of quarterly reports to ensure their accuracy and reliability.

• Review with management and with the external auditors and approve, prior to release, any quarterly report to shareholders (including the unaudited year-end financial results as part of the 4^th quarter report).

• Review with management and recommend for adoption by the Board quarterly press releases.

(c) OTHER PUBLIC DISCLOSURE DOCUMENTS

• Review the process for the preparation of prospectuses and offering memoranda and other public disclosure documents to ensure their accuracy and reliability.

(d) ACCOUNTING SYSTEMS AND INTERNAL CONTROLS

• Advise the Board on the adequacy, accuracy, timeliness and reliability of financial reports and on the efficacy of internal accounting, auditing and management control procedures.

(e) INTERNAL AUDIT

• Review the resources, budget, reporting relationships and planned activities and results of the internal audit function.

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(f) LEGISLATIVE COMPLIANCE

• Review compliance with withholding and other deductions, remittances requirements e.g. Income tax, Canada Pension Plan.

(g) REPORTING

• Report to the Board on the results of monitoring compliance with the Corporation’s business conduct standards and potential conflicts of interest.

• Report, through the Chair, to the Board following each meeting of the Committee on the major items of discussion, decisions and recommendations made by the Committee.

(h) DUE DILIGENCE

• Report to the Board annually regarding receipt of certificates from management confirming compliance with:

(i) all required withholding, deductions and remittances

(ii) Corporate business conduct standards

(i) INDEPENDENCE OF EXTERNAL AUDITORS

• Obtain annually from the external auditors a formal written independence affirmation disclosing all relationships between them and their related entities and the Corporation and its related entities and engage in a dialogue with them if any disclosed relationship or service may impact their objectivity and independence.

(j) APPOINTMENT AND FEES OF EXTERNAL AUDITORS

• Review the performance of and service provided by the external auditors and make recommendation to the Board concerning the appointment and fees of external auditors for the ensuing financial year.

6. OTHER

(a) Make recommendations to the Board relating to its responsibilities herein.

(b) Annually review currency/appropriateness of the Charter and report to the Board in that regard.

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EX-99.2

Exhibit 99.2

CanWest Global Communications Corp.

Management’s Discussion and Analysis

For the year ended August 31, 2005

November 17, 2005

1

Certain statements in this report may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the control of the Company. Consequently, all forward-looking statements made in this Management Discussion and Analysis or the Company’s documents referred to herein are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized.

OVERVIEW

CanWest Global Communications Corp. (“CanWest”) is an international media company with interests in broadcast television, publishing, radio, specialty cable channels, outdoor advertising and Internet websites in Canada, Australia, New Zealand, Ireland and the United Kingdom. In each of our markets we seek to develop a broad media platform that enables us to provide a multimedia product offering to our customers. Our diversification within the Canadian market and internationally has contributed to the stability of our overall results.

On October 13, 2005, CanWest MediaWorks Income Fund (the “Fund”) completed its $550 million initial public offering. On the completion of the Fund’s initial public offering, CanWest transferred its Canadian newspaper and online media businesses, with the exception of the National Post, to CanWest MediaWorks Limited Partnership (the “Limited Partnership”) in exchange for units and indebtedness of the Limited Partnership. Substantially all of the indebtedness was repaid by the Limited Partnership using $517 million in net proceeds of the Fund’s initial public offering, together with $823 million advanced under the Limited Partnership’s new unsecured $1 billion senior unsecured credit facility. As a consequence, the Fund now holds a 25.8% equity interest in the Limited Partnership, with CanWest holding the remaining 74.2%. As a result of the transaction, we will record a dilution gain or loss on the sale of a 25.8% interest in the operations transferred to the Limited Partnership. The amount of the gain or loss has not been determined. We will continue to consolidate the results of these operations.

SELECTED ANNUAL INFORMATION

	Year ended August 31
	2005		2004			2003
	$000		$000 (revised)			$000 (revised)
Revenue		3,072,542		2,911,400			2,790,484
Net earnings from continuing operations		20,422		194,299			114,798
Net earnings (loss)		10,290		(13,478	)		46,088
Net earnings from continuing operations per share
Basic	$	0.12	$	1.10		$	0.60
Diluted	$	0.12	$	1.10		$	0.60
Net earnings (loss) per share
Basic	$	0.06	$	(0.08	)	$	0.22
Diluted	$	0.06	$	(0.08	)	$	0.22
Total Assets		5,328,418		5,573,643			5,934,508
Long term liabilities		3,261,798		3,502,813			3,713,050

Revised: The 2004 and 2003 results have been revised to reflect the adoption of the Institute of Chartered Accountants of Canada, Accounting Guideline 15, Consolidation of Variable Interest Entities, resulting in the consolidation of TEN Group Pty Limited, which was previously accounted for on an equity basis (see note 1 to the audited consolidated financial statements).

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Key Factors Affecting Segment Revenues and Operating Income

Television Broadcast

We have four television broadcast segments, one for each country in which we carry on such operations. Our Canadian television segment includes our broadcast television networks in Canada as well as specialty channels and two radio stations. Our New Zealand and Irish television segments cover our television operations in those countries. Our Australian television segment includes TEN Group Pty Limited (“TEN Group”), which owns and operates TEN Television Network (“Network TEN”).

We generate the majority of our television broadcast revenues from the sale of advertising, with the remainder generated from subscriber revenues earned by our specialty channels and the sale of broadcast rights to our programming. Demand for television advertising is driven primarily by advertisers in the packaged goods, automotive, retail and entertainment industries and is strongly influenced by general economic conditions. The attractiveness of our programs to advertisers and the rates we charge are primarily a function of the size and demographics of our viewing audience. The dependence of our advertising revenues on the ratings performance of our television programs makes our television broadcast revenues less predictable than our publishing revenues.

Following a 7% decline in advertising revenue in fiscal 2004 for Canadian television, advertising revenues have remained constant for fiscal 2005 as compared to fiscal 2004. The revenue decrease in 2004 and continued weakness in 2005 reflected a loss of market share resulting primarily from reduced ratings performance. Canadian television will remain a challenge for 2006. However, new programs that have attracted promising initial ratings include the new drama Prison Break, the comedy My Name is Earl and Entertainment Tonight Canada, which launched in the first two weeks of the season immediately rose to the number one spot for a Canadian entertainment magazine program. Canadian television has also achieved ratings gains in its key news programming. We believe that increased ratings will have a positive impact on revenues in fiscal 2007.

Our Australian television broadcast segment recorded a 9% increase in revenues in fiscal 2005 compared to fiscal 2004, driven by Network TEN’s strong ratings performance in a continuing strong television market. Local currency revenue increases of 11% were partially offset by the weakening of the local currency relative to the Canadian dollar. For fiscal 2006, we expect a slowdown in the Network TEN revenue growth. Our New Zealand television broadcast segment also had a strong performance in fiscal 2005, recording a 14% revenue increase that reflected an 12% increase in local currency revenues driven by improved audience share at 3 and C4 networks in a strong advertising environment and the effect of the strengthening local currency relative to the Canadian dollar, which increased revenue growth by an additional 2%. For fiscal 2006, we expect New Zealand to continue its growth relative to fiscal 2005, but at a lower growth rate reflecting a slowing in the advertising market. In our Irish television segment, revenues showed growth of 10% in fiscal 2005, as compared to fiscal 2004.

Our principal television broadcast operating expenses are programming costs and employee salaries. In our Canadian television segment, operating expenses increased 6% in fiscal 2005 compared to fiscal 2004, primarily as a result of increased programming and promotion costs. We expect this trend to continue in Canada into fiscal 2006 as we continue to invest in our program schedule. In Australia, segment operating expenses increased by 5% in fiscal 2005 compared to fiscal 2004, driven by an 8% local currency expense increase compared to the same period in the prior year, primarily reflecting increased programming costs. In New Zealand, segment operating expenses for fiscal year 2005 increased by 9% in fiscal 2005 compared to fiscal 2004 driven by a 7% local currency expense increase compared to the same period in the prior year, primarily as a result of increased promotion and programming costs. We expect that the trend will continue into fiscal 2006 as programming costs continue to increase. For our Irish broadcasting operation, segment operating expenses increased 3% in fiscal 2005 compared to fiscal 2004, reflecting general cost and wage increases and programming cost increases.

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Publishing and Online

Our publishing and online segment includes our Canadian newspaper operations as well as our internet operations including the canada.com web portal. Our publishing and online revenues are primarily earned from newspaper advertising and circulation revenues from our newspapers in Canada. Our newspaper and online advertising revenues are a function of the volume, or lineage, of advertising sold and the rates we charge. Circulation revenues are produced from home-delivery subscriptions for our newspapers and single-copy sales sold at retail outlets and vending machines and are a function of the number of newspapers we sell and the average per copy prices we charge.

Advertising and circulation revenues for the publishing and online operations were 3% higher in fiscal 2005 compared to fiscal 2004. The increase in advertising revenues resulted from advertising rate increases as well as from growth in online classified revenues, which increased to $12 million for fiscal 2005 compared to $4 million for fiscal 2004. Average daily newspaper circulation in Canada has declined, although the decline in circulation has been offset by an increase in the median sale price for a weekday edition of a Canadian daily newspaper. We believe that the circulation revenues of the publishing operations are reflective of this general trend in the newspaper industry. Circulation revenues were unchanged for fiscal 2005 compared to fiscal 2004, as declines in circulation volumes were offset by higher per copy prices. Circulation revenues constitute approximately 20% of total publishing and online revenues. For fiscal 2006, advertising revenues are expected to continue to increase, primarily as a result of rate increases, growth in insert volumes as well as from significant increases in online advertising. Circulation revenues are expected to be consistent with the prior year.

The principal operating expenses for publishing and online are salaries, newsprint and distribution expenses. Operating expenses increased by 5% in fiscal 2005 compared to fiscal 2004, primarily as a result of increased payroll and distribution costs. Newsprint expense for fiscal 2005 decreased by approximately 4% as a result of reduced pricing and a reduction in newsprint usage. For fiscal 2006, expenses are generally expected to increase moderately. Salary costs will increase due to increases in staffing to support certain key initiatives (e.g. increased online product offerings) and due to normal wage escalation. The declining newsprint expense trend experienced through fiscal 2005 is expected to reverse in fiscal 2006 as a result of increased newsprint pricing. Finally, increased gasoline prices are expected to result in increased distribution costs.

Radio Broadcast

Our radio broadcast segment consists of our radio operations in New Zealand, which earn substantially all of their revenues from advertising. Radio advertising revenues are a function of overall radio advertising demand and advertising rates. Radio advertising rates are determined based on the number and demographics of our listeners. Our radio broadcast segment revenues in fiscal 2005 increased 8% overall, driven by a 6% local currency revenue increase compared to the same period in the prior fiscal year, reflecting strong growth in radio advertising expenditures in New Zealand. In addition, a strengthened New Zealand currency contributed an additional 2% increase for fiscal 2005. We expect revenues in local currencies to continue to increase during 2006, bolstered by the addition of new FM frequencies acquired in 2005 and the continued growth of the recently launched “Radio Live” network.

The principal operating expenses in the radio broadcast segment are salaries, marketing costs and music royalties. Segment operating expenses increased 12% in fiscal 2005 compared to fiscal 2004, driven by a 10% increase in local currency expenses and an additional 2% as a result of the strengthened New Zealand currency. The increase in costs was due to costs associated with the launch of Radio Live network, and branding costs related to Kiwi FM. For fiscal 2006, we expect costs to continue to increase to reflect the continuing promotion and the full year operation of Radio Live and normal salary and wage increases.

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Australian outdoor advertising

Our outdoor advertising segment consists of TEN Group’s wholly owned subsidiary, Eye Corp. Eye Corp. generates its revenue from the sale of out-of-home advertising. Eye Corp.’s advertising revenues are a function of overall outdoor advertising demand and rates. Eye Corp.’s advertising rates are primarily a function of the number and demographics of the audience for Eye Corp.’s displays. Segment revenues increased by 40% in fiscal 2005 compared to fiscal 2004, in part reflecting Eye Corp.’s acquisition of the remaining 50% interest in its Eye Shop subsidiary. In addition, airport terminal advertising sales have increased with increases in rates and inventories. The principal operating expenses in this segment are salaries, site rental costs and production expenses. Segment operating expenses have decreased to 79% as a percentage of revenues for fiscal 2005 from 81% in fiscal 2004. For fiscal 2006, we expect revenues and expenses to continue to grow as a result of the acquisitions in 2005. 

Acquisitions and Divestitures

We have made a number of acquisitions and divestitures that affect the comparability of our results from period to period.

• In February 2003, we disposed of certain community newspapers.

• In July 2004, we completed the initial public offering and refinancing of our New Zealand operations, which reduced our ownership from 100% to 70%.

• In September 2004, Eye Corp acquired the remaining 50% of Eye Shop Pty Limited (formerly Eye Village Joint Venture). In addition, in July 2005, Eye Corp acquired 100% of Eye Drive Melbourne Pty Limited (formerly Southcoast Pty Limited).

• In September 2005, we acquired a radio licence to operate a station in the Solent region of the United Kingdom. This operation will commence in fiscal 2006.

Foreign currency effects

Our Australia, New Zealand and Ireland operations expose our segment revenues and operating expenses to fluctuations between the Canadian dollar and the Australian dollar and the New Zealand dollar and the Euro respectively. A decline in the value of the Canadian dollar against those currencies increases the Canadian dollar equivalent of the revenues and expenses we record in those currencies. An increase in the value of the Canadian dollar has the opposite effect. During fiscal 2005, the Canadian dollar appreciated against the Australian dollar and Euro by 2%, and depreciated against the New Zealand dollar by 2%.

Seasonality

Our advertising revenues are seasonal. Revenues are typically highest in the first and third quarters, while expenses are relatively constant throughout the year.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in Canada requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, as well as the disclosure of contingent assets and liabilities. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

We have identified below the critical accounting estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider these accounting estimates to be critical because changes in the assumptions or estimates we have selected have the potential of materially impacting our financial statements. For a summary of all of our significant accounting policies, see note 1 to our audited consolidated financial statements.

5

Goodwill and Intangible Assets

We estimate the useful lives of intangible assets and the value of goodwill based on historical customer patterns, industry trends and existing competitive factors. Significant long term changes in these factors could result in material impairment of the value and life of intangible assets and goodwill. As at August 31, 2005 we had $1,144 million of intangibles and $2,425 million of goodwill on our balance sheet.

In performing the annual impairment testing of goodwill and intangibles, management makes a number of assumptions and estimates in determining fair value. The fair value definition used is the amount at which an asset could be bought or sold in a current transaction between willing parties. Valuation for indefinite life broadcast licenses have been determined using an income approach and more specifically the “Greenfield” approach in which the value is determined based on the present value of the required resources and eventual returns from the build out of an operational network and the acquisition of advertisers, starting with only the broadcast licenses as assets. Other valuation techniques used include a market approach or a discounted cash flow (“DCF”) approach. The market approach is used where comparable public market data is available, or we have bona fide offers for assets. The projections used in the DCFs represent management’s best estimates of expected future operating results of the reporting units for the first three years and an extrapolation based on aggregate economic factors such as gross domestic product growth rates and inflation, for the final two years of the forecast period. Precedent transactions involving comparable companies and market statistics for comparable companies are used to select appropriate terminal value multiples. In addition, the expected risk-free and other rates of return, general economic conditions, historical and forecasted operating results, and valuations prepared by third parties are considered. The discount rates used are based on the weighted average costs of capital using the capital asset pricing model and adjusting for the size of the local reporting unit, local tax rates and risk profile. Had different assumptions or valuation techniques been used in performing the impairment testing at August 31, 2005, the carrying value of intangibles and goodwill might have been different.

During 2005, we determined that the value of goodwill and the circulation of the National Post were impaired and as a result, we have recorded goodwill and intangible asset impairments of $41 million and $10 million, respectively. The impairment resulted from the incurrence of successive years of operating losses in this business unit and its failure to achieve the profitability targets set out in its business plans.

Income Taxes

We are subject to income taxes in Canada and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Management uses judgment and estimates in determining the appropriate rates and amounts in recording future taxes, giving consideration to timing and probability. Actual income taxes could vary from these estimates as a result of future events, including changes in income tax law or the outcome of reviews by tax authorities and related appeals. To the extent that the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax provision in the period in which such determination is made. Our income tax provision was $20 million for the year ended August 31, 2005. Future tax assets were $201 million, while future tax liabilities were $264 million at August 31, 2005. See note 13 to our audited consolidated financial statements.

Accounting for Pension and Other Benefit Plans

The cost of defined benefit pension and other retirement benefits earned by employees is calculated based on management’s estimates of expected plan investment performance, salary escalation, retirement ages of employees, the discount rate used in measuring the liability and expected healthcare costs. For fiscal 2005 and 2004, based on the investment mix, current yields and experience, management estimated the long-term rate of return on plan assets to be 7.25%. For the same periods, the discount rate used in measuring the liability was 5.35% and 6.5%, respectively. The discount rate was estimated by applying Canadian corporate AA zero coupon bonds to the expected future benefit payments under the plans. Management assumed that salaries would increase by 3% to 3.5% per year. The defined benefit pension and other retirement benefit expense we recorded for the year ended August 31, 2005 was $33 million. Use of different assumptions would vary results.

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Broadcast Rights

At August 31, 2005, we had $210 million in broadcast rights. Broadcast rights represent the right to air various forms of programming. Broadcast rights and the corresponding payable are recorded when the license period begins and the programs are available for air. Foreign programming is primarily acquired on a “pay for play” basis, and is immediately aired, while some foreign and most domestic programming may be carried in inventory and amortized over a series of plays. Management must use estimates and judgment in determining the useful lives and carrying values of broadcast rights. Estimates of useful life relates to the expected number of plays over which the cost of acquiring the rights are amortized, while estimates of value primarily relate to the time slots in which the programs will be aired. Inventories are reviewed regularly to ensure recoverability of the net book value of broadcast rights.

CHANGES IN ACCOUNTING POLICIES

Consolidation of variable interest entities

Effective September 1, 2004 we have adopted the provisions of The Accounting Standards Board of the Institute of Chartered Accountants of Canada, Accounting Guideline 15 (“AcG-15”). We have determined that we are the primary beneficiary of TEN Group, a variable interest entity. Accordingly, as required by AcG-15, we have consolidated the results of TEN Group. AcG-15 has been adopted on a retroactive basis with restatement of prior periods. Previously, we accounted for our investment in TEN Group using the equity method. As at August 31, 2005 we hold a 56.4% economic interest in TEN Group (56.6% at August 31, 2004). The interest held by the 43.6% minority is classified in minority interests (43.4% at August 31, 2004). The change had no impact on net earnings or shareholders’ equity.

Valuation of Intangibles

In accordance with the Emerging Issues Task Force topic number D-108, Use of Residual Method to Value Acquired Assets Other than Goodwill, released September 29, 2004, we adopted a direct approach in the valuation of intangible assets for any business combinations completed after September 29,2004. We have performed impairment testing using a direct method on all intangible assets previously valued under the residual method. Previously, we utilized a residual value approach in valuing indefinite lived broadcast licenses. There was no effect on the audited consolidated financial statements as a result of this change in accounting policy.

FORTHCOMING CHANGES IN ACCOUNTING POLICIES

Financial Instruments, Hedges and Comprehensive Income

The Accounting Standards Board of the Institute of Chartered Accountants of Canada has issued CICA 3855, Financial Instruments—Recognition and Measurement, CICA 3865, Hedges, and CICA 1530, Comprehensive Income, which we must apply for our fiscal year beginning on September 1, 2007. CICA 3855 prescribes when a financial asset, financial liability, or non-financial derivative is to be recognized on the balance sheet and the measurement of such amount. It also specifies how financial instrument gains and losses are to be presented. CICA 3865 is applicable for designated hedging relationships and builds on existing Canadian GAAP guidance by specifying how hedge accounting is applied and what disclosures are necessary when it is applied. CICA 1530 introduces new standards for the presentation and disclosure of components of comprehensive income. Comprehensive income is defined as the change in net assets of an enterprise during a reporting period from transactions and other events and circumstances from non-owner sources. It includes all changes in net assets during a period except those resulting from investments by owners and distributions to owners. We are currently considering the impacts of the adoption of such standards.

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Implicit Variable Interest

The Emerging Issues Committee (“EIC”) of the Accounting Standards Board of the Institute of Chartered Accountants of Canada has issued EIC 157, Implicit Variable Interests under AcG-15, (“EIC 157”) which must be applied by the Company in the first interim period beginning subsequent to October 17, 2005. EIC 157 prescribes that an implicit variable interest, which is an implied pecuniary interest in an entity that changes with changes in the fair value of that entity’s net assets, exclusive of variable interests, be evaluated in accordance with AcG-15 to determine if consolidation is appropriate. The Company is currently considering the impact of the adoption of such standards.

RESTATEMENT OF PRIOR YEAR RESULTS

As described in note 1 to our consolidated financial statements, certain prior year results and balances have been revised for the reasons stated therein.

OPERATING RESULTS

Introductory Note

• Segment operating profit. In the discussion that follows, we provide information concerning our segment operating profit. See note 23 to our audited consolidated financial statements. Management utilizes segment operating profit as a measure of segment profitability in making strategic resource allocations.

• Operating income before amortization. We also discuss our consolidated operating income before amortization. We provide this measure because we and our lenders and investors use operating income before amortization to measure performance against our various leverage covenants. Operating income before amortization is not a recognized measure of financial performance under Canadian generally accepted accounting principles (“GAAP”). Investors are cautioned that operating income before amortization should not be construed as an alternative to net earnings determined in accordance with GAAP as an indicator of our performance. Our method of calculating operating income before amortization may not be comparable to similarly titled measures used by other companies. A reconciliation of operating income before amortization to net earnings, which is the most closely comparable GAAP measure, is set forth below under “Reconciliation of Non-GAAP Financial Measures” section of this report.

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Fiscal 2005 Compared to Fiscal 2004

Following is a table summarizing segmented results for August 31, 2005 and August 31, 2004. See note 23 to our audited consolidated financial statements:

	Revenue		Segment operating profit
	2005	2004	2005		2004
	$000	$000 (REVISED)(1)	$000		$000 (REVISED)(1)
Operating Segments
Publishing and Online – Canada	1,228,851	1,193,629	254,875		267,343
Television
Canada	698,644	690,302	124,699		147,430
Australia-Network TEN	783,315	721,247	293,528		256,033
New Zealand	122,995	108,236	30,713		23,291
Ireland	37,519	34,152	13,254		10,591
	1,642,473	1,553,937	462,194		437,345
Radio - New Zealand	93,428	86,717	26,994		27,488
Outdoor - Australia	107,790	77,117	23,173		14,477
Corporate and other	—	—	(34,249	)	(27,110	)
	3,072,542	2,911,400	732,987		719,543
Ravelston management contract termination			(12,750	)	—
Restructuring expense(2)			—		(2,445	)
Operating income before amortization			720,237	(3)	717,098	(3)

⁽¹⁾ See note 1 to our audited consolidated financial statements.

⁽²⁾ Restructuring expenses relate to Canadian television operations.

⁽³⁾ See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation to net earnings.

Consolidated Results

Revenues. Consolidated revenues increased by $161 million or 6% to $3,073 million for fiscal 2005 from consolidated revenues of $2,911 million fiscal 2004. The increase reflected higher revenues in each of our operating segments, with the most significant increases from our Canadian publishing and online, New Zealand television, Australian television and Australian outdoor advertising segments.

Operating expenses. Consolidated operating expenses (including selling, general, and administrative expenses) before amortization increased $148 million or 7% to $2,340 million. This increase reflects expense increases in all operating segments.

Ravelston management contract termination. Effective April 2005, we terminated the agreement under which we received management services from The Ravelston Corporation Limited (“Ravelston”). The agreement provided for annual payments of $6 million to Ravelston as well as the payment of a fee upon termination. In August 2005, we and RSM Richter Inc., in its capacity as interim receiver, receiver manager and monitor of Ravelston, received Court approval for a termination payment in the amount of $13 million, which was paid in September 2005. This charge was recorded in operating expenses for year ended August 31, 2005.

Restructuring charge. In fiscal 2004 we incurred $2 million in restructuring expenses related to Canadian television operations.

Operating income before amortization. Consolidated operating income before amortization increased nominally to $720 million for fiscal 2005 from $717 million for fiscal 2004. The increase in operating income before amortization reflected increases in revenues that were partially offset by losses in our operations under development, the contract termination fees, increases in television programming expenses and increases in compensation expenses related to executive management of Canadian operations.

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Amortization. Amortization of intangibles was $20 million for fiscal 2005 compared to $18 million for fiscal 2004. Amortization of property, plant and equipment and was $92 million for fiscal 2005 compared to $89 million for fiscal 2004. The increases in amortization expenses are due to acquisitions made in fiscal 2005 and fiscal 2004.

Interest expense. Interest expense was $252 million for fiscal 2005 compared to $339 million for fiscal 2004, reflecting a reduced level of debt as well as reduced interest rates achieved through our refinancing activities in fiscal 2005 and in fiscal 2004.

Interest rate and foreign currency swap losses. For fiscal 2005, we recorded a $189 million loss equivalent to the change in fair value of interest rate and foreign currency interest rate swaps on debt that has been retired (“overhanging swaps”) compared to a $111 million loss for fiscal 2004. The increase is due to an increase in amount of overhanging swaps as a result of reduced debt levels.

Foreign exchange gains. We recorded net foreign exchange gains of $76 million in fiscal 2005 compared to $45 million in fiscal 2004. This reflects gains of $68 million on repayment of US dollar denominated debt and a $5 million gain that arose on the translation of a portion of our U.S. debt which is not hedged.

Investment gains. For fiscal 2005, we recorded an investment gain of $2 million, compared to $116 million for fiscal 2004. This includes dilution gains on the exercise of stock options at TEN Group, a gain on disposal of non-core assets and gains on disposal of property plant and equipment. The gain in fiscal 2004 reflected a $66 million gain from completing the initial public offering and refinancing of our New Zealand operations, which reduced our ownership from 100% to 70%, a $52 million gain from selling our 29.9% interest in Ulster Television and dilution gains on the exercise of stock options at TEN Group.

Goodwill impairment. For fiscal 2005, we performed our annual impairment testing and determined that the value of goodwill related to the National Post was impaired and as a result, recorded an impairment of $41 million.

Asset impairment. For fiscal 2005, we performed our annual impairment testing and determined that the value of circulation related to the National Post was impaired and as a result, recorded an impairment of $10 million.

Loss on debt extinguishment. During the first quarter of fiscal 2005, we completed an exchange offer and concurrent debt offering through which we settled the $904 million 12.125% Senior Notes due 2010 by issuance of $908 million (US$761 million) of 8% Senior Subordinated Notes due 2012. The fair value of the new debt on its settlement date was determined to be $944 million. The excess of fair value of the new debt over the book value of the old debt together with certain costs of settling the debt has been charged to earnings for fiscal 2005 as a loss on debt extinguishment of $44 million. This refinancing reduces cash interest expense by approximately $40 million annually.

Income taxes. Our income tax expense was $20 million for fiscal 2005, compared to $37 million for fiscal 2004. The effective tax rate of 15% was below the Company’s statutory rate of 35% as a result of the impact of international tax rates which were lower than Canadian tax rates, as well as the impact of (i) a $10 million recovery related to the resolution of an uncertain tax position, (ii) a $7 million effect of recognizing temporary differences which were not previously tax effected, and (iii) a change in Australian tax legislation that allowed TEN Group to record a future taxes recovery of $18 million. The $7 million of temporary differences not previously tax effected related to earnings of periods prior to fiscal 2005. We have determined that these adjustments are not material to the current or previously reported results and accordingly, the amount has been included in current year’s earnings. This adjustment has the effect of increasing basic and diluted earnings per share for fiscal 2005, by $0.04 per share.

Minority interests. For fiscal 2005 we recorded minority interests charges related to the 30% minority interest in CanWest MediaWorks (NZ) and the 43.6% minority interest in TEN Group of $7 and $90 million, respectively. The minority interests charge related to TEN Group increased by 12% as compared to the $80 million charge for the same period in fiscal 2004 as a result of TEN Group’s increased net earnings. There was only a nominal minority interests charge related to CanWest MediaWorks (NZ) for fiscal 2004 because it was wholly owned to July 2004.

Net earnings from continuing operations. Our net earnings from continuing operations for fiscal 2005 were $20 million, or $0.12 per share, compared to $194 million, or $1.10 per share, for fiscal 2004.

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Discontinued operations. In July 2005, we sold a substantial portion of our entertainment operations. Net loss from discontinued operations was $10 million for fiscal 2005 compared to $208 million for fiscal 2004.

Net earnings (loss). Our net earnings for fiscal 2005 were $10 million or $0.06 per share compared to a net loss of $13 million or $0.08 per share for fiscal 2004.

Segment Results

Publishing and online

• Revenues. Revenues increased by $35 million or 3% to $1,229 million for fiscal 2005 as compared to fiscal 2004. Increases in advertising revenues resulted from rate increases as well as from increases in revenues from online classifieds. Revenues from online classified increased to $12 million for fiscal 2005 from $4 million for fiscal 2004. Circulation revenues of $247 million for both fiscal 2005 and 2004 represented 20% of publishing and online revenues for fiscal 2005 compared to 21% for fiscal 2004. Circulation volume decreased by 3%, while the average rate per copy increased by 3%, which resulted in a nominal decrease in circulation revenues for fiscal 2005 as compared to fiscal 2004.

• Operating expenses. Operating expenses of the publishing and online segment increased by $48 million or 5% to $974 million for fiscal 2005 as compared to fiscal 2004, primarily as a result of increased payroll costs, including increased costs of executive management, and higher distribution costs. Newsprint costs decreased by approximately 4% reflecting reduced pricing and newsprint usage.

• Segment operating profit. Segment operating profit for fiscal 2005 decreased by $12 million or 5% compared to the same period in the prior year. The decrease in segment operating profit arose from losses of $8 million related to Dose and the Metro joint venture, both of which commenced operations in fiscal 2005, and the increased costs of executive management and distribution expenses discussed above.

Canadian television

• Revenues. In total, revenues from our Canadian television operating segment of $699 million were approximately $8 million, or 1%, higher in fiscal 2005 than the $690 million recorded in fiscal 2004. This reflected a 22% increase in subscription revenues from our specialty television operations and flat advertising revenues.

• Our conventional television revenues for fiscal 2005 were flat compared to the prior year. This reflects the effect of continued ratings declines throughout fiscal 2005.

• Revenues from our digital specialty channels increased by 42% to $15 million in fiscal 2005 compared to fiscal 2004. This reflects increases in advertising and subscriber revenues as well as the effect of proportionately consolidating our 50% interest in Mystery, which was previously equity accounted. Our digital specialty channels achieved subscriber growth of 15% in fiscal 2005, increasing total subscriptions to 8.6 million subscribers at August 31, 2005.

• Operating expenses. Operating expenses (including selling, general and administrative expenses) of $574 million at our Canadian television segment were $31 million, or 6%, higher than in fiscal 2004 primarily because of increased programming and promotion expenses, to build ratings, and compensation cost increases associated with our new management structure.

• Segment operating profit. Reflecting an increase in segment operating expenses that more than offset an increase in segment revenues, Canadian television segment operating profit declined to $125 million in fiscal 2005 from the $147 million recorded for fiscal 2004.

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Australian television

• Revenues. Segment revenues increased by 9% to $783 million for fiscal 2005 from $721 million during fiscal 2004. In local currency, revenues increased 11%, reflecting TEN’s strong rating performance in a continuing strong television advertising environment.

• Operating expenses. Segment operating expenses increased 5% to $490 million for fiscal 2005 compared to $465 million for fiscal 2004, primarily reflecting increased programming costs.

• Segment operating profit. Segment operating profit increased by 15% to $294 million in fiscal 2005, compared to $256 million in fiscal 2004, as the increase in revenues more than offset the increase in expenses.

New Zealand television.

• Revenues. Revenues from television broadcast operations for New Zealand’s 3 and C4 television networks increased by 14% to $123 million for fiscal 2005 from $108 million for fiscal 2004. In local currency, revenues increased by 12%, reflecting improved audience share in a strong advertising environment. The strengthening New Zealand currency contributed an additional 2% on translation to Canadian dollar revenues.

• Operating expenses. Operating expenses in fiscal 2005 increased by 9% to $92 million. In local currency, expenses increased by 7%, driven primarily by higher programming expenses, which included costs related to the development and start up of a new weeknight current affairs program – Campbell Live – and the re-launch of 3 News. The appreciation of the New Zealand dollar relative to the Canadian dollar added an additional 2% increase on translation to Canadian dollar revenues.

• Segment operating profit. New Zealand 3 and C4 produced segment operating profit of $31 million, a $7 million or 32% increase from the results recorded in fiscal 2004.

Irish television.

Segment operating revenues increased by 10% to $38 million in fiscal 2005 as compared to $34 million in fiscal 2004. As a result of revenue increases, segment operating profit in fiscal 2005 increased by $3 million to $13 million compared to fiscal 2004.

New Zealand radio.

Due to the acquisition of new radio frequencies in 2005 and 2004, CanWest RadioWorks continued its steady performance, increasing revenues for fiscal 2005. Revenue grew by 8% to $93 million from $87 million in fiscal 2004, reflecting a 6% increase in revenue in local currency and an additional 2% increase as a result of currency translation. Segment operating profit declined by 2% to $27 million for fiscal 2005 as compared to fiscal 2004 due to the significant start up costs associated with “Radio Live” and the branding costs related to “Kiwi FM”.

Australian outdoor advertising.

Segment revenues increased by $31 million, or 40%, to $108 million for fiscal 2005 from $77 million for fiscal 2004. This increase reflected a 44% growth in revenue in local currency. Our segment operating profit from TEN’s outdoor advertising operations increased by $9 million to $23 million as compared to fiscal 2004 driven by Eye Corp.’s acquisition of the remaining 50% of Eye Shop as well as stronger airport advertising revenues.

Corporate and other.

Corporate and other segment expenses increased to $34 million in fiscal 2005 compared to $27 million in the same period in the prior year due to increased costs related to analysis and documentation of our internal controls in preparation for the requirements under section 404 of the Sarbanes Oxley Act as well as to expenses related to increased corporate development activities.

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Fiscal 2004 Compared to Fiscal 2003

Following is a table summarizing segmented results for August 31, 2004 and August 31, 2003:

	REVENUE		SEGMENT OPERATING PROFIT
	2004	2003	2004		2003
	$000 (REVISED)(1)	$000 (REVISED)(1)	$000 (REVISED)(1)		$000 (REVISED)(1)
Operating Segments
Publishing and Online – Canada	1,193,629	1,208,180	267,343		258,496
Television
Canada	690,302	730,407	147,430		216,346
Australia-Network TEN	721,247	586,998	256,033		186,644
New Zealand	108,236	95,055	23,291		10,095
Ireland	34,152	32,490	10,591		9,729
	1,553,937	1,444,950	437,345		422,814
Radio-New Zealand	86,717	73,400	27,488		20,751
Outdoor-Australia	77,117	63,954	14,477		4,466
Corporate and other	—	—	(27,110	)	(23,213	)
	2,911,400	2,790,484	719,543		683,314
Restructuring and film and television impairment expense (2)			(2,445	)	(31,071	)
Operating income before amortization			717,098	(3)	652,243	(3)

⁽¹⁾ See note 1 to our audited consolidated financial statements.

⁽²⁾ For 2004, restructuring expenses relate to Canadian television operations. For 2003, it includes Network TEN film and television impairment charges of $18 million and Canadian media operations restructuring expenses of $13 million.

⁽³⁾ See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation to net earnings.

Effect of Divestitures. In February 2003, we sold certain newspaper publishing assets to Osprey Media. The following table summarizes the contribution of these newspaper assets to consolidated revenues, operating income before amortization and net earnings during fiscal 2003.

	Year ended August 31, 2003
	Revenues Revised (1)		Operating Income Before Amortization Revised (1)
As Reported	2,790,484		652,243
Newspaper Publishing Properties Sold	(39,956	)	(10,105	)
	2,750,528		642,138

⁽¹⁾ See note 1 to our audited consolidated financial statements.

CONSOLIDATED RESULTS

Revenues. Consolidated revenues increased by $121 million to $2,911 million during fiscal year 2004, compared to $2,790 million during fiscal year 2003. This increase was driven by significant increases in revenues from our international media operations and an improvement in our continuing operations in the publishing and online segment, which were partially offset by a decrease in revenues from our Canadian television segment and from the sale of the newspaper assets to Osprey Media described above; these assets accounted for $40 million of our consolidated revenues for fiscal 2003.

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Operating expenses, excluding restructuring charge and film and television program impairment expense. Consolidated operating expenses (including selling, general and administrative expenses) increased by $85 million for fiscal year 2004 to $2,192 million. The assets sold to Osprey Media accounted for $30 million of our consolidated operating expenses during fiscal 2003. Consolidated operating expenses attributable to operations not sold increased $115 million, or 6%, from $2,077 million in fiscal 2003, as a result of significant programming expense increases for our Canadian television segment as well as general expense increases in other operating segments.

Restructuring and film and television program impairment expense. In fiscal 2004, we incurred $2 million in restructuring expenses related to Canadian television operations. In fiscal 2003, we undertook restructuring activities in our Canadian media operations that generated restructuring expenses of $13 million. The fiscal 2003 restructuring expenses related to the following operating segments: Canadian television - $3 million, Canadian publishing and online - $9 million and corporate and other - $1 million. In 2003, TEN wrote down program and television rights associated with certain features in the amount of $18 million.

Operating income before amortization. Consolidated operating income before amortization increased by 10% in fiscal year 2004 to $717 million from $652 million in fiscal 2003. The increase is due to increases in our New Zealand and Australian television segments and our publishing and online segment, which was partially offset by lower segment operating profit in our Canadian television segment.

Amortization. Amortization of intangibles was $18 million for both fiscal 2004 and 2003. Amortization of property, plant and equipment was $89 million in fiscal 2004, and $86 million in fiscal 2003.

Interest income and expense and other financing expenses. Interest expense was $339 million for fiscal year 2004, compared to $377 million for fiscal year 2003, reflecting a reduced level of debt as well as reduced interest rates achieved through refinancing of debt. Debt at August 31, 2004 was $3,217 million, $364 million less than the debt outstanding at August 31, 2003 of $3,581 million. We refinanced our senior secured debt in August 2003 and in June 2004 resulting in annual interest savings of approximately $8 million and $5 million, respectively.

In fiscal 2004, we recorded a $111 million loss equivalent to the change in fair value of interest rate swaps and foreign currency interest rate swaps that have not been settled and which relate to debt that has been retired. This compared to a loss of $23 million for the same period of fiscal 2003.

We recorded interest income of $9 million for fiscal year 2004, primarily related to interest received on an income tax refund related to an income tax issue which was resolved in the first quarter and interest received from Hollinger in settlement of a claim related to our acquisition of the National Post.

Foreign exchange gains. We recorded net foreign exchange gains of $45 million fiscal 2004. Approximately $36 million of this gain related to a gain on early retirement of U.S. dollar denominated debt in August 2004. In addition, we recorded translation gains on U.S. dollar denominated debt, which has not been hedged. This compared to a $4 million foreign exchange gain recorded in the previous year.

Investment gains and losses, net of write-down. For fiscal 2004, we recorded investment income of $116 million, compared to investment income of $9 million in fiscal 2003. In fiscal 2004, we recorded a gain on the sale of our interest in UTV of $52 million, a gain of $66 million related to the New Zealand transaction and a dilution gain of $2 million as a result of the exercise of stock options at TEN Group which effectively diluted our economic interest to 56.6%. For fiscal year 2003, we recorded a gain of $21 million on the sale of community newspapers and a dilution gain of $2 million as a result of the exercise of stock options at TEN Group, which were offset by a loss of $11 million on the sale of our shares in SBS Broadcasting and other write downs of $3 million. Dividend income of $4 million received from UTV in fiscal 2004 was 6% higher than in fiscal 2003. In June 2004, we sold our interest in UTV.

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Income taxes. The income tax provision was $37 million for fiscal year 2004, compared to a recovery of $47 million for fiscal year 2003. The effective tax rate of 12% in fiscal year 2004 differed from our statutory rate of 35% as a result of the $37 million reduction due to the non taxable portion of capital losses, the $41 million reduction due to foreign income rates differing from Canadian income tax rates, a $20 million credit from the resolution of tax issues and the effect of increases in future tax rates which caused a net increase in future tax liabilities and resulted in a $9 million income tax expense.

Minority interest. Minority interest remained constant at $80 million for both fiscal 2004 and 2003 and mainly represented the minority interest related to TEN Group.

Currency translation. We recorded net currency translation losses of $7 million in fiscal 2004 related to the realization of currency translation gains related to TEN Group distributions, currency translation losses related to the repayment of inter-company loans by our New Zealand operations and the divestiture of 30% of our interest in New Zealand. This compared to a $1 million gain in fiscal 2003.

Net earnings before discontinued operations. Our net earnings before discontinued operations for fiscal 2004 were $194 million compared to $115 million for fiscal 2003.

Discontinued operations. In 2004, we commenced a process to sell all of Fireworks Entertainment’s production and distribution operations, resulting in the classification of these operating results as a loss from discontinued operations and its assets and liabilities as assets and liabilities of discontinued operations. This process was completed in 2005. These operations were previously classified in the Canadian Entertainment segment. Impairment charges of $211 million including goodwill impairment of $31 million were recorded to adjust the assets to their fair values based upon recent estimates less cost to dispose. Net loss from discontinued operations was $208 million for the year ended August 31, 2004 compared to $69 million for the same operations for the year ended August 31, 2003.

Net earnings (loss). Our net loss for fiscal 2004 was $13 million or ($0.08) per share compared to a net earnings of $46 million or $0.22 per share for fiscal 2003.

SEGMENT RESULTS

Publishing and online

• Revenues. Segment revenues for fiscal year 2004 were $1,194 million, a decrease of $15 million, or 1%, from the revenues recorded in the fiscal 2003. This decline reflects the publishing asset sale in February 2003; the divested assets accounted for $40 million of our publishing and online revenues during fiscal 2003. Our remaining publishing assets recorded an increase of $25 million, or 2%, compared to fiscal 2003. Excluding the impact of the publishing asset sales, advertising revenues were up approximately 2% overall due to flat lineage and increased pricing. The flat lineage reflects increases in classified and retail advertising that were partially offset by decreases in national account lineage most significantly in the automotive sector. The increase in rates reflects increases for national accounts; the rates achieved for retail decreased as a result of an increased use of inserts versus run of press. While circulation numbers excluding the asset sales were flat, circulation revenue excluding those asset sales increased marginally as a result of achieving an increase in revenue per copy due to price increases.

• Operating expenses. Segment operating expenses (including selling, general and administrative expenses) for fiscal year 2004 declined by $23 million compared to fiscal 2003. This decline reflects a $30 million decrease in operating expenses attributable to publishing assets sold, partially offset by a $6 million increase in operating expenses attributable to our continuing operations. The modest increase reflected normal salary escalations and increases in certain administrative costs including pension expense, partially offset by cost reductions attributable to the restructuring undertaken in the latter part of fiscal 2003. Newsprint expenses increased approximately 1%, reflecting an increase in the cost of newsprint partially offset by reduced consumption.

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• Segment operating profit. Segment operating profit for fiscal year 2004 increased by $9 million compared to the same period in the prior year. Excluding the impact of the publishing assets sold to Osprey Media, segment operating profit was $19 million, or 8%, higher than in fiscal 2003, driven primarily by the increase in revenues.

• Restructuring Expenses. Restructuring expenses of $9 million were recorded in respect of this segment for fiscal year 2003 consisting of employee severance costs. These charges are not reflected in segment operating profit.

Canadian television

• Revenues. Segment revenues for fiscal year 2004 declined by 5%, or $40 million, to $690 million from $730 million recorded in fiscal 2003 as a result of a 7% decrease in airtime sales for fiscal year 2004. The decrease in airtime sales primarily reflects an increasingly competitive market place, a decline in ratings and decreased advertising spending from certain sectors, particularly packaged goods and retail. Airtime revenue decreases were most significant in the first quarter of fiscal 2004 with an 11% decrease compared to the first quarter of fiscal 2003.

This decrease was partially offset by an approximately $3 million increase in revenues from the sale of program rights resulting from an increase in television program production by Global Television. In addition, our seven digital specialty channels reported increases in both subscriber and advertising revenue. Overall, digital revenues increased by 22% to $10 million in fiscal year 2004 compared to the same period in the previous year. There are now more than 3.4 million subscribers to our digital services, representing a 17% increase in fiscal 2004. Our seventh channel, Cool TV was launched in the first quarter of fiscal 2004.

• Operating expenses. Segment operating expenses (including selling, general and administrative expenses) were $543 million for fiscal year 2004, which is $29 million, or 6%, higher than segment operating expenses for fiscal year 2003. This reflected increases in expenses due to the following:

• program amortization, which comprises approximately 50% of segment operating expenses, increased by approximately $14 million, or 6%, for fiscal 2004 as compared to fiscal 2003. This included charges related to the discontinuance of certain programming activities such as the Mike Bullard Show as well as increased costs of new program offerings;

• increased pension expense primarily as a result of an increase in the amortization of the actuarial loss in our defined benefit pension plans; and

• increased levies for the Society of Composers, Authors and Music Publishers of Canada, or SOCAN, were introduced resulting in an expense increase of approximately $2 million for fiscal year 2004, including approximately $1.5 million which related to retroactive assessment for prior fiscal years.

These increases were partially offset by cost reductions achieved through savings as a result of headcount reductions undertaken in the second half of fiscal 2003.

• Segment operating profit. As a result of revenue decreases and expense increases, Canadian television segment operating profit for fiscal 2004 decreased 32% to $147 million compared to $216 million for fiscal 2003.

• Restructuring Expenses. Restructuring expenses of $2 million were recorded in respect of this segment for fiscal 2004 and $3 million were recorded in respect of this segment for fiscal 2003 consisting of employee severance costs. These charges are not reflected in segment operating profit.

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Australian television

• Revenues. Segment revenues for fiscal year 2004 increased by 22% to $721 million from $587 million for the same period in the prior year. In domestic currency, segment revenues increased 14% reflecting Network TEN’s strong rating performance in a strong television advertising environment. The strength of the Australian currency contributed an additional 8% increase on translation to Canadian dollars.

• Operating expenses. Segment operating expenses for fiscal 2004 increased 16% to $465 million compared to $400 million for fiscal 2003. In domestic currency, operating expenses increased 8% primarily as a result of increased programming expenses. The strength of the Australian currency added an additional 8% increase on translation to Canadian dollars.

• Segment operating profit. Segment operating profit increased by 37% to $256 million for fiscal 2004, compared to $187 million for fiscal 2003, as the increase in revenues more than offset the increase in operating expenses.

New Zealand television

Revenues for New Zealand’s 3 and C4 television networks increased by 14% to $108 million for fiscal year 2004 from $95 million the previous year. In local currency, revenues increased by 6%, reflecting growth in New Zealand television advertising expenditures. C4 (formerly TV4) was re-launched in fiscal 2004 as New Zealand’s first free-to-air music channel and has contributed to the increase in revenues. The stronger New Zealand currency contributed an additional 8% increase. In local currency, operating expenses for New Zealand’s 3 and C4 television networks decreased by 6% primarily as a result of reduced programming costs partially due to the increased purchasing power of the New Zealand dollar. In addition, in fiscal 2003 programming expense was higher as a result of the write-down of inventory in anticipation of the C4 format change. On translation to Canadian dollars, operating expenses for New Zealand’s 3 and C4 television networks were flat as compared to fiscal 2003, as a result of the strengthened New Zealand currency. New Zealand’s 3 and C4 produced segment operating profit of $23 million, more than twice the segment operating profit of $10 million recorded in fiscal year 2003.

Irish television

Segment revenues increased by 5% to $34 million for fiscal 2004 from $32 million in fiscal 2003. Segment operating expenses increased by 4% as a result of general cost and wage increases. Segment operating profit increased by 9% to $11 million from $10 million recorded in fiscal 2003, reflecting the increase in segment revenues, which more than offset the increase in segment operating expenses.

New Zealand radio

CanWest RadioWorks in New Zealand continued its steady performance, with increasing revenues and segment operating profit for fiscal year 2004. Segment revenues grew by 18% to $87 million from $73 million in the same period in the previous year. Domestic currency segment revenues grew by 10%, with an additional 8% increase as a result of translation to Canadian currency. The revenue increase was driven principally by growth in radio advertising expenditures in New Zealand. As a result of growth segment revenue and a strengthening New Zealand currency, RadioWorks’ segment operating profit grew to $27 million from $21 million in fiscal 2003.

Australian outdoor advertising

Segment revenues increased by $13 million, or 21%, to $77 million from $64 million for fiscal 2003. This increase reflected 13% growth in revenue in domestic currency with a further 8% increase as a result of currency translation. Segment operating profit increased by $10 million to $14 million fiscal year 2004, as compared to $4 million for fiscal year 2003.

Corporate and other

Segment expenses increased from $23 million in fiscal 2003 to $27 million in fiscal 2004. Restructuring expenses of $1 million were incurred in respect of this segment in fiscal 2003 consisting of employee severance costs.

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CONSOLIDATED QUARTERLY FINANCIAL RESULTS

For the three month periods ended (in thousands of dollars, except as noted)

(unaudited)

2005

	31-Aug		31-May		28-Feb		30-Nov
Revenue	701,537			809,722		688,653		872,630
Operating income before amortization	84,322			197,614		148,696		289,605
Amortization of intangibles	5,456			4,988		4,958		4,939
Amortization of property, plant, and equipment and other	24,743			24,914		24,643		22,859
Net earnings (loss) from continuing operations	(102,089	)		58,823		28,242		35,446
Net earnings (loss)	(106,039	)		52,718		28,196		35,415
Cash flow from continuing operating activities	202,539			72,948		175,313		18,488
Cash flow from operating activities	214,141			83,298		181,628		36,629
Net earnings (loss) from continuing operations per share
Basic	($0.57	)	$	0.33	$	0.16	$	0.20
Diluted	($0.57	)	$	0.33	$	0.16	$	0.20
Net earnings (loss) per share
Basic	($0.60	)	$	0.30	$	0.16	$	0.20
Diluted	($0.59	)	$	0.30	$	0.16	$	0.20

2004

(Revised: see note 1 to the audited consolidated financial statements)

	31-Aug		31-May		28-Feb		30-Nov
Revenue		664,990		783,941	661,865			800,604
Operating income before amortization		120,837		202,367	143,495			250,399
Amortization of intangibles		4,542		4,552	4,550			4,538
Amortization of property, plant, and equipment and other		20,646		25,369	24,210			23,877
Net earnings (loss) from continuing operations		59,767		52,475	(1,535	)		83,592
Net earnings (loss)		61,966		54,337	(211,277	)		81,496
Cash flow from continuing operating activities		184,685		52,003	114,761			42,834
Cash flow from operating activities		186,943		75,962	105,862			41,507
Net earnings (loss) from continuing operations per share
Basic	$	0.34	$	0.30	($0.01	)	$	0.47
Diluted	$	0.34	$	0.30	($0.01	)	$	0.47
Net earnings (loss) per share
Basic	$	0.35	$	0.31	($1.19	)	$	0.46
Diluted	$	0.35	$	0.31	($1.19	)	$	0.46

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2005

Following is a table of segmented results for the three months ended August 31, 2005 and August 31, 2004:

	Revenue		Segment operating profit
	2005	2004	2005		2004
	$000 (unaudited)	$000 (unaudited) (REVISED)(1)	$000 (unaudited)		$000 (unaudited) (REVISED)(1)
Operating Segments
Publishing and Online - Canada	290,242	280,807	38,869		53,348
Television
Canada	133,949	130,590	(13,313	)	(20	)
Australia - Network TEN	187,439	175,415	61,634		58,405
New Zealand	33,192	29,682	7,894		5,630
Ireland	7,351	7,110	1,712		1,712
Total television	361,931	342,797	57,927		65,727
Radio - New Zealand	22,199	21,418	5,879		6,544
Outdoor - Australia	27,165	19,968	5,149		4,116
Corporate and other	—	—	(11,502	)	(6,453	)
	701,537	664,990	96,322		123,282
Ravelston management contract termination			(12,000	)	—
Restructuring and film and television impairment expense			—		(2,445	)
Operating income before amortization			84,322		120,837

⁽¹⁾ See note 1 to our audited consolidated financial statements.

CONSOLIDATED RESULTS

Revenues. Consolidated revenues increased by $37 million or 5% to $702 million for the three months ended August 31, 2005 from consolidated revenues of $665 million for the same period in fiscal 2004. Revenues for the fourth quarter reflected an 9% increase in revenues from international media operations, a 3% increase in Canadian television revenues and a 3% increase in Canadian Publishing and Online revenues.

Operating expenses. Consolidated operating expenses (including selling, general, and administrative expenses) before amortization increased $63 million or 12% to $605 million. This increase reflects expense increases in all operating segments.

Ravelston management contract termination. Effective April 2005, we terminated the agreement under which we received management services from The Ravelston Corporation Limited (“Ravelston”). The agreement provided for annual payments of $6 million to Ravelston as well as the payment of a fee upon termination. In August 2005, we and RSM Richter Inc., in its capacity as interim receiver, receiver manager and monitor of Ravelston, received Court approval for a termination payment in the amount of $12 million, which was paid in September 2005. This charge was recorded in operating expenses for the year ended August 31, 2005.

Operating income before amortization. Consolidated operating income before amortization decreased by 30% to $84 million for the three months ended August 31, 2005 from $121 million for the same period last year. The decrease in operating income before amortization reflected increases for international media operations that were offset by decreases in operating income from the Canadian media operations and the Ravelston management contract termination.

Amortization. Amortization of intangibles was $5 million in the fourth quarter of both fiscal 2005 and 2004. Amortization of property plant and equipment was $25 million in fiscal 2005 compared to $21 million in fiscal 2004. The increase in amortization of property plant and equipment reflect acquisitions made in fiscal 2005 and fiscal 2004.

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Financing costs. Interest expense was $59 million for the three months ended August 31, 2005 compared to $80 million in the previous year, reflecting a reduced level of debt as well as reduced interest rates achieved through our refinancing activities in fiscal 2005 and in fiscal 2004.

Interest rate and foreign currency swap losses. For the three months ended August 31, 2005, we recorded a $109 million loss equivalent to the change in fair value of interest rate and foreign currency interest rate swaps on debt that has been retired. This compared to a loss of $102 million for the same period in fiscal 2004.

Foreign exchange gains. We recorded net foreign exchange gains of $47 million in the three months ended August 31, 2005 compared to a gain of $41 million for the same period in 2004. This reflects gains of $49 million on repayment of US dollar denominated debt net of a $2 million loss on the translation of U.S. debt which is not hedged and a loss on the translation of US dollar cash.

Investment gains. For the three months ended August 31, 2005, we recorded an investment gain of $1 million, compared to a $118 million gain for the same period the previous year. The gain in 2005 relates to gains on disposal of property plant and equipment. The gain in fiscal 2004 reflects a $66 million gain from completing the initial public offering and refinancing of our New Zealand operations, which reduced our ownership from 100% to 70% and a $51 million gain from selling our 29.9% interest in Ulster Television.

Goodwill impairment. For fiscal 2005, we performed our annual impairment testing and determined that the goodwill related to the National Post was impaired and as a result, recorded an impairment of $41 million.

Asset impairment. For fiscal 2005, we performed our annual impairment testing and determined that an intangible asset related to the National Post was impaired and as a result, recorded an impairment of $10 million.

Income taxes. Our income tax recovery was $34 million for the three months ended August 31, 2005, compared to $10 million in the same period of fiscal 2004. The effective tax rate of 28% was below the Company’s statutory rate of 35% due to the effect of non-tax deductible goodwill impairment of $14 million offset by the resolution of uncertain tax position in the amount of $5 million.

Minority interests. For the three months ended August 31, 2005 we recorded minority interests charges related to the 30% minority interests in CanWest MediaWorks (NZ) and the 43.6% minority interests in TEN Group of $1 and $17 million, respectively. The minority interests charge related to TEN Group decreased 6% as compared to the $18 million charge for the same period in fiscal 2004 as a result of the decrease in TEN Group’s net earnings in the quarter. There was only a nominal minority interests charge related to CanWest MediaWorks (NZ) for fourth quarter of fiscal 2004 because it was wholly owned to July 2004.

Net earnings from continuing operations. Our net loss from continuing operations for the three months ended August 31, 2005 were $102 million, or ($0.57) per share, compared to net earnings of $60 million, or $0.34 per share, for the three months ended August 31, 2004.

Discontinued operations. In July 2005, we sold a substantial portion of our entertainment operations. The loss from discontinued operations was $4 million for the three months ended August 31, 2005 compared to earnings of $2 million for the same operations for the three months ended August 31, 2004.

Net earnings. Our net loss for the three months ended August 31, 2005 was $106 million or ($0.57) per share compared to net earnings $62 million or $0.34 per share for the fourth quarter of fiscal 2004.

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Segmented Results

Publishing and online

• Revenues. Revenues increased by $9 million or 3% to $290 million for the three months ended August 31, 2005 as compared to the same period in the prior year. Increases in advertising revenues resulted from rate increases as well as from increases in revenues from online classifieds. Revenues from online classifieds increased to $4 million for the three months ended August 31, 2005 from less than $1 million dollars for the same period in the prior year. Circulation revenues were $61 million for the three months ended August 31, 2005 and 2004 and represented 21% of newspaper and online segment revenues for the three months ended August 31, 2005 compared to 22% for the same period in the prior year. Circulation volume decreased by 2%, while the average rate per copy increased by 2%, which resulted in flat circulation revenues for the three months ended August 31, 2005 as compared to the same period in fiscal 2004.

• Operating expenses. Segment operating expenses increased by $24 million or 11% to $251 million for the three months ended August 31, 2005 as compared to the same period in the prior year, primarily as a result of increased payroll costs including increased costs of executive management. Newsprint costs increased by approximately 1% reflecting reduced pricing offset by increased newsprint usage.

• Segment operating profit. Segment operating profit for the three months ended August 31, 2005 decreased by $14 million or 27% compared to the same period in the prior year. The decrease in segment operating profit arose from increased operating costs and by losses of $5 million related to Dose and the Metro joint venture, both of which commenced operations in 2005.

Canadian television

• Revenues. In total, revenues from our Canadian television operating segment of $134 million were $3 million or 3% higher than the $131 million recorded in the same period in fiscal 2004. This reflected a 3% decrease in airtime revenues. Subscriber revenues from our specialty channels increased by 15% for the fourth quarter of fiscal 2005 as compared to the same period in fiscal 2004, reflecting a 16% increase in subscribers.

• Operating expenses. Operating expenses (including selling, general and administrative expenses) of $147 million at Canadian television operations were $17 million, or 13% higher than in the same period the prior year primarily the result of an increase in program amortization expense and promotion as we continue to invest in our schedule in order to increase ratings.

• Segment operating loss. Our Canadian television segment recorded an operating loss of $13 million for the fourth quarter of fiscal 2005 compared to break even for the same period in fiscal 2004. This reflects the increases in expenses off set by the increased revenue previously mentioned.

Australian television

• Revenues. Segment revenues increased by 7% to $187 million for the three months ended August 31, 2005, from $175 million during the same period in the prior year. In local currency, revenues increased 8%, reflecting TEN’s strong rating performance in the quarter in a tough television advertising environment.

• Operating expenses. Segment operating expenses increased 8% to $126 million for the three months ended August 31, 2005 compared to $117 million for the same period in fiscal 2004, primarily reflecting increased programming costs.

• Segment operating profit. Segment operating profit increased by 6% to $62 million for the fourth quarter of 2005, compared to $58 million in the same period in fiscal 2004.

New Zealand television

• Revenues. Revenues from television broadcast operations for New Zealand’s 3 and C4 television networks increased by 12% to $33 million for the fourth quarter of fiscal 2005 from $30 million for the same period in fiscal 2004 reflecting improved audience share in a strong advertising environment. In local currency, revenues increased 13%, reflecting New Zealand’s strong rating performance.

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• Operating expenses. Operating expenses increased by 5% to $25 million for the fourth quarter of fiscal 2005 from $24 million, as a result of increased programming expenses.

• Segment operating profit. New Zealand 3 and C4 produced segment operating profit of $8 million, a $2 million or 40% increase from the results recorded in the fourth quarter of 2004.

Irish television

Our 45% share of revenues at TV3 in the Republic of Ireland increased by 3% to $7 million in the fourth quarter of fiscal 2005 compared to the fourth quarter of fiscal 2004. Our share of TV3’s segment operating profit stayed flat at $2 million for both the three months ended August 31, 2005 and 2004.

New Zealand radio

CanWest RadioWorks continued its steady performance, increasing revenues for the three months ended August 31, 2005. Revenue grew by 4% to $22 million from $21 million during the fourth quarter of the previous year. Segment operating profit declined by 10% to $6 million for the three months ended August 31, 2005 as compared to the same period the previous year, due to the significant start up costs associated with Radio Live and the branding costs related to Kiwi FM.

Australian outdoor advertising

Segment revenues increased by $7 million, or 36%, to $27 million for the three months ended August 31, 2005 from $20 million for the fourth quarter in fiscal 2004. This increase reflected 38% growth in revenue in local currency. Our segment operating profit from TEN Group’s outdoor advertising operations increased by $1 million to $5 million as compared to the fourth quarter in fiscal 2004 driven by Eye Corp.’s acquisition of the remaining 50% of Eye Shop as well as stronger airport advertising revenues.

Corporate and other

Corporate and other segment expenses increased to $12 million in for the three months ended August 31, 2005 compared to $6 million in the same period in the prior year due to increased costs related to analysis and documentation of our internal controls in preparation for the requirements under section 404 of the Sarbanes Oxley Act, as well as, expenses related to a corporate reorganization and increased expenses related to corporate development initiatives.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our principal uses of funds are for capital expenditures and repayment of debt. We have historically met these requirements by using cash generated from operating activities and through short term and long term debt. We believe these sources of funds, together with our cash on hand, will continue to be adequate to meet our currently anticipated capital requirements.

We also review acquisition and investment opportunities in the course of our business and will, if a suitable opportunity arises and is permitted by the terms of our debt instruments, make selected acquisitions and investments to implement our business strategy. We expect that the funding for any such acquisitions or investments would come from working capital, borrowing under our credit facility or future credit facilities, additional equity and debt

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financing, entering into joint ventures or a combination of these methods. Similarly, from time to time, we review opportunities to dispose of non-core assets, and may, if a suitable opportunity arises, sell certain non-core assets.

For 2006, we expect our major non-operating cash requirements to include expected capital expenditures of approximately $151 million, swap recouponing payments as discussed below in swap transactions and repayment of $21 million in principal payments on long term debt due in fiscal 2006 and US$42 million related to the acquisition of Turkish radio operations. We expect to meet our cash needs for fiscal 2006 primarily through a combination of operating cash flow, cash on hand and our credit facilities.

CanWest MediaWorks Income Fund and related transactions

In October 2005, we transferred our investment in our newspaper and online operations (excluding the National Post) and certain shared service operations, which provide customer support and administrative services, to the Limited Partnership. In exchange, we received units of the Limited Partnership representing a 74.2% ownership interest and notes receivable of $1,340 million.

Concurrently, the Fund closed its initial public offering (“IPO”) of units and invested the net proceeds of $517 million for units of the Limited Partnership representing a 25.8% interest.

In addition, the Limited Partnership obtained credit facilities in the amount of $1 billion, consisting of an $825 million non-revolving term credit facility and a $175 million revolving term credit facility. The revolving facility matures in five years, is subject to certain restrictions and bears interest at the prevailing prime rate, U.S. base rate, banker’s acceptance rate or LIBOR plus, in each case, an applicable margin. The non-revolving facility matures in five years, and bears interest at the prevailing prime rate, U.S. base rate, banker’s acceptance rate or LIBOR plus, in each case, an applicable margin. On closing of the IPO, the Limited Partnership drew $830 million on its credit facilities. The Limited Partnership has entered into five year interest rate swap contracts to fix the interest payments on a notional amount of $825 million for the first three years and $660 million for the remaining two years resulting in an effective interest rate of 5.0%.

The Limited Partnership utilized the proceeds of the issuance of the units to the Fund and $823 million of drawings under its new credit facilities to repay the $1,340 million note payable to the Company.

As a result of the transaction, we will record a dilution gain or loss on the sale of a 25.8% interest in the operations transferred to the Limited Partnership. The amount of the gain or loss has not been determined. We will continue to consolidate the results of these operations.

In October 2005, we obtained a new $500 million revolving term credit facility. The revolving facility matures in five years, is subject to certain restrictions and bears interest at the prevailing prime rate, U.S. base rate, banker’s acceptance rate or LIBOR plus, in each case, an applicable margin. This facility is secured by substantially all our directly held assets, including the assets of our Canadian broadcast operations and the National Post as well as by other investments. The total leverage covenant under the new facility is 5.0 times cash flow. On October 13, 2005, we drew $418 million on this facility.

The net proceeds from the IPO and the Limited Partnership debt as well as proceeds of $401 million from our new credit facility were utilized to retire certain debt and interest rate and cross currency interest rate contracts as follows:

a. In October 2005, we completed tender offers for the 10.625% senior subordinated notes payable due in 2011 and the 7.625% senior unsecured notes payable due in 2013. Substantially all of the notes under these facilities were settled. Debt with a book value of $772 million, and related deferred financing costs of $28 million were retired for cash of $849 million. The transaction resulted in a loss on debt retirement of $71 million, net of tax of $34 million. As a result of the repayment of these notes we recorded a swap loss of $22 million, net of tax of $12 million related to the associated cross currency interest rate swaps in the first quarter of fiscal 2006.

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b. In October 2005, we retired the senior credit facility. Debt with a book value of $526 million and deferred financing costs of $6 million were settled for cash of $526 million. The transaction resulted in a loss on debt retirement of $4 million, net of tax of $2 million. In addition, as a result of the settlement of this debt, we recorded a loss of $48 million, net of tax of $27 million related to the associated interest rate and cross currency interest rate swaps in the first quarter of fiscal 2006.

c. In November 2005, we retired interest rate and cross currency interest rate swap contracts relating to the 7.625% notes, the 10.625% notes and 50% of the cross currency interest rate swap related to the senior secured credit facilities for cash of $365 million.

Upon closing of the above noted transactions, our consolidated debt was reduced by $400 million to $2,194 million.

Following the Income Fund transactions in October 2005 our cash flow from the Publications Group will be diluted for the 25.8% interest held by the Income Fund and will be received by way of distributions from the Limited Partnership, a portion of which are subordinated. If distributable cash of the Limited Partnership is not sufficient to pay the entire distribution our share will be disproportionately affected by the shortfall.

Sources of Funds

Our principal sources of liquidity are cash and cash equivalents on hand and cash flows from operating activities. At August 31, 2005, we had cash on hand of $30 million including $12 million of TEN Group cash and $2 million of CanWest MediaWorks (NZ) cash. We generated cash flows from operating activities of continuing operations of $469 million in fiscal 2005 and $394 million in fiscal 2004.

In addition to the above sources of liquidity, we had unused borrowing capacity under our credit facility of $413 million at August 31, 2005. TEN Group had unused borrowing capacity of A$520 million under its credit facilities.

In October 2005, we obtained a new $500 million revolving term credit facility as discussed in the CanWest MediaWorks Income Fund and related transactions section of this report.

Investing activities

In October 2005, we received proceeds of $1,340 million from the Limited Partnership which consisted of $517 million relating to the proceeds received from the initial public offering of the Fund and $823 million related to new debt obtained by the Limited Partnership. For further discussion of these activities, refer to CanWest MediaWorks Income Fund and related transactions section of this report.

We expect to receive annual distributions of approximately $146 million from the Limited Partnership related to our 74.2% interest. $108 million of these distributions will be payable to us on the same priority as the amounts payable to the Income Fund while the remaining $38 million is subordinated and will be payable on a quarterly basis only if the Limited Partnership has sufficient distributable cash.

Uses of Funds

Capital Expenditures

In fiscal 2005, our capital expenditures amounted to $99 million. We also invested $2 million in the acquisition of new FM radio frequencies related to our New Zealand radio operations. In fiscal 2006, we expect to increase our capital expenditures to approximately $151 million. This amount includes $40 million in technical upgrades, $10 million for a broadcast traffic system in Canada, and $75 million to replace existing equipment.

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Swap transactions

Under our credit facility, we are required to maintain the fair value of our foreign currency and interest rate swaps above a prescribed minimum liability ($600 million at August 31, 2005). In addition, there are prescribed minimums with individual counterparties. Under these agreements, which have two-way recouponing provisions, we were required to make net recouponing payments of $97 million in the year ended August 31, 2005. Subsequent to year-end, we were required to make further recouponing payments of $118 million. In October 2005, we settled swaps as described in the CanWest MediaWorks Income Fund and related transactions section of this report

Investing activities

In fiscal 2005, Eye Corp, Eye Corp acquired the remaining 50% of Eye Shop Pty Limited (formerly Eye Village Joint Venture). Also, in July 2005, Eye Corp acquired 100% of Eye Drive Melbourne Pty Limited (formerly Southcoast Pty Limited).

In addition, on September 21, 2005, we announced the acquisition of an equity interest in CGS Televizyon Ve Radyo Yayinciligi Ticaret Anonim Sirketi (“CGS”) that in turn was successful in its bid to acquire the assets of Super FM for consideration of US$33 million, which will be payable upon completion of the transaction. On September 22, 2005, we announced that Pasifik Televizyon Ve Radyo Yayinciligi Ticaret A.S. (“Pasifik”) was successful in its bid to acquire the assets of Metro FM for consideration of US$23 million, which will be payable upon completion of the transaction. In exchange for the payment of US$42 million, we will acquire a 75% economic interest in both CGS and Pasifik. These transactions, which are subject to regulatory approvals by certain Turkish authorities, are expected to be completed within 90 days of the announcement. Subject to a relaxation of foreign ownership restrictions and the receipt of all necessary regulatory approvals, we have the right to convert our interest to a 75% equity interest in Metro FM and Super FM.

Debt

General

At August 31, 2005, we had total outstanding consolidated debt of $2,907 million, including TEN Group debt of $309 million and CanWest MediaWorks (NZ) debt of $155 million, compared to debt of $3,216 million as at August 31, 2004. In addition, we had obligations under capital leases of $17 million. For additional information concerning our indebtedness see notes 7 and 8 to our audited consolidated financial statements for the year ended August 31, 2005.

In October 2005, specific debt was repaid and the credit facility was refinanced as described in the CanWest MediaWorks Income Fund and related transactions section of this report.

Credit Facility

Total credit available under our senior secured credit facility was $759 million as of August 31, 2005, of which we had drawn $346 million. The facility includes revolving and non-revolving tranches with terms ranging from two and a half to five years. The credit facility is collateralized by substantially all of our assets.

Total leverage as calculated under our credit facility was 4.7 times cash flow for debt covenant purposes for the twelve months ended August 31, 2005 compared to a covenant of 6.0 times. On closing of the CanWest MediaWorks Income Fund and related transactions in October 2005, our total leverage as calculated under our new credit facility was 3.74. The total leverage covenant under the new credit facility is 5.0 times.

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Refinancing of Junior Subordinated Notes

In November 2004, we successfully completed the refinancing of our junior subordinated notes. These notes were issued to Hollinger as consideration for the purchase of our publishing operations in November 2000. Interest obligations under these notes to November 2005 were payable via the issuance of additional notes. The $904 million (including accrued interest to November 18, 2004) 12.125% notes due November 2000 were effectively settled through the issuance of $908 million (US$761 million) in senior subordinated notes due 2012. The premium on the old notes was expensed in our first quarter of 2005. The new notes carry an interest rate coupon of 8%, which is settled in cash on a semi-annual basis, and will result in annual interest savings of approximately $40 million.

Tender offer

As discussed in the CanWest MediaWorks Income Fund and related transactions section of this report, we closed tender offers on the 10.625% senior subordinated notes and 7.625% senior unsecured notes payable in the principal amount of US$625 million.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The Company’s obligations under firm contractual arrangements, including commitments for future payments under long term debt arrangements, operating lease arrangements, purchase commitments and other long term liabilities as at August 31, 2005 are summarized below.

	Payments due by period
	Total	Less than 1 year	1 – 3 years	3 – 5 years	Thereafter
	$000	$000	$000	$000	$000
Long term debt (1)	2,907,107	21,017	9,853	748,177	2,128,060
Cash interest obligations on long term debt (2)	1,097,178	201,520	385,684	319,000	190,974
Cash payments on interest rate and foreign currency swap liabilities (3)	245,208	28,451	50,080	166,677	—
Obligations under capital leases	23,946	2,637	8,419	7,522	5,368
Operating leases	355,168	72,828	104,994	56,580	120,766
Purchase obligations (3)	1,684,771	401,571	684,817	598,383	—
Estimated pension funding obligations (4)	85,367	16,699	34,255	34,413	—
Other long term liabilities	126,432	—	82,127	—	44,305
Total	6,525,177	744,723	1,360,229	1,930,752	2,489,473

⁽¹⁾ Long term debt represents our contractual commitments as of August 31, 2005 and do not take into account the transactions discussed in the CanWest MediaWorks Income Fund and related transactions section of this report. As a result of the refinancing, long term debt repayments for the periods noted will be as follows: less than 1 year – $17 million, 1-3 years – $1 million, 3-5 years – $315 million and thereafter – $2,338 million.

⁽²⁾ Interest obligations on long term debt represents an estimate of future cash interest expense based on current interest rates, current debt levels and scheduled debt repayments and their related interest rate and foreign currency interest swaps. As a result of the Income Fund transaction cash interest expense for the periods noted will change as follows: lease than 1 year – decrease by $30 million, 1-3 years – $72 million, 3-5 years will decrease by $26 million and thereafter will decrease by $37 million.

⁽³⁾ Cash payments on interest rate and foreign currency swap liabilities represents an estimate of future cash payments based on current interest rate levels and current foreign exchange rates.

⁽⁴⁾ Purchase obligations represent an estimate of our contractual commitments to purchase broadcast rights and to make investments in television programs.

⁽⁵⁾ Pension funding obligation estimates have only been included for the next five years.

26

FINANCIAL INSTRUMENTS

Our primary market risk exposures are interest rate and foreign currency exchange rate risk. We are exposed to interest rate risk and foreign exchange rate fluctuations resulting from the issuance of floating rate debt and debt denominated in U.S. dollars. In addition to monitoring the ratio of fixed rate debt to total long-term debt, we use interest rate swaps to manage the proportion of total debt that is subject to variable rates. Cross currency swaps are used to hedge both the interest rate and the currency exposure on debt originally issued in U.S. dollars. We do not enter into any derivatives for trading purposes.

As at August 31, 2005, we have fully hedged the currency exposure on our U.S. dollar denominated debt with the exception of senior and senior subordinated notes in the amount of US$42 million, and have fixed the interest rate of 100% of our floating rate debt by entering into a combination of cross currency swaps and interest rate swaps.

As of August 31, 2005, we have entered into interest rate swap contracts to pay fixed rates of interest (at an average rate of 6.5%) and receive floating rates of interest (at an average rate of 2.7%) on a notional amount of $448 million. We have entered into pay fixed receive floating cross currency swap contracts at an average rate of 6.7% on a notional amount of $1,051 million and receive floating rates of 3.8% on a notional amount of US$679 million. We have also entered into pay floating receive fixed cross currency swap contracts at an average floating rate of 7.0% on a notional amount of $1,862 million and an average fixed rate of 8.9% on a notional amount of US$1,386 million. As part of the refinancing discussed in the CanWest MediaWorks Income Fund and related transactions section of this report, a portion of the cross currency swaps were settled in the first quarter of fiscal 2006.

We are also exposed to foreign exchange and interest rate risk as a result of debt and related swaps issued by CanWest MediaWorks (NZ), TV3 Ireland, and TEN Group. As at August 31, 2005, our share of the TV3 debt was $12 million (€8 million). €10 million of this debt was swapped to a fixed rate (at an average rate of 3.2%) and the remainder of the debt bears interest at a floating rate. As at August 31,2005, CanWest MediaWorks (NZ) had $155 million (NZ$188 million) of debt. NZ$165 million of this debt was swapped to a fixed rate (at an average rate of 6.5% until 2006), and the remainder of the debt bears interest at a floating rate.

At August 31, 2005, TEN Group had long term debt of $309 million (A$346 million). TEN Group has entered into “pay floating receive fixed” cross currency swap contracts at an average floating rate of 7.0% on a notional amount of A$210 million and “received fixed” swap contracts at an average rate of 5.4% on a notional amount of US$ 125 million. TEN Group has also entered into interest rate swap contracts to pay fixed rates of interest (at an average rate of 5.7%) on a notional amount of A$285 million.

Based on the swap contracts outstanding and the level of variable rate debt at August 31, 2005, we estimate that a 1% increase in floating interest rates would increase annual interest expense by $21 million. This estimate is based on the assumption of a constant variable rate debt and swap level and an immediate rate increase with no subsequent rate changes in the remaining term to maturity.

The fair value of the swap contracts represents an estimate of the amount that we would receive or pay if the contracts were closed out at a market price on the balance sheet date. As of August 31, 2005, our outstanding swap contracts were in a net unrealized loss position of $119 million (including $2 million related to TEN Group). In addition, we have recorded the effect of hedging instruments on the US$ principal balance of debt of $356 million (including $39 million related to TEN Group).

As of August 31, 2005, assuming all other variables are held constant, a 10 basis point parallel upward shift in the Canadian and U.S. fixed yield would result in a $4 million deterioration in the mark to market value of all swaps, excluding TEN Group. A $0.001 change in the value of the Canadian dollar against the U.S. dollar, assuming all other variables are held constant, would result in a $3 million change in the mark to market value of the cross currency swaps. A $0.001 change in the value of the Australian dollar against the U.S. dollar, assuming all other variables are held constant, would result in a $0.3 million change in the mark to market value of the cross currency swaps.

27

RELATED PARTY TRANSACTIONS

Senior subordinated notes held by CanWest Communications Corporation, our parent company totaled $50 million (US$42 million) at August 31, 2005 (2004 - $55 million (US$42 million)). This debt, issued in May 2001, matures May 15, 2011 and bears interest at 10.625%. Interest expense related to this debt totaled $6 million in fiscal 2004 (2003 - $6 million). In October 2005, we settled these notes under the same terms offered to unrelated senior subordinated note holders for $55.4 million.

A company which is owned by CanWest Communications Corporation owns CanWest Global Place in Winnipeg, Manitoba, a building in which the we are a tenant. Rent paid to this company in fiscal 2005 amounted to $1 million (2004 - $1 million) and is included in selling, general and administrative expenses. The obligations under these operating leases continue until 2010.

All the related party transactions have been recorded at the exchange amount, which are representative of market rates.

DIFFERENCES BETWEEN CANADIAN GAAP AND U.S. GAAP

The preceding discussion and analysis has been based upon financial statements prepared in accordance with Canadian GAAP, which differs in certain respects from United States GAAP. The significant differences relevant to the Company are discussed in detail in note 25 of Notes to the Consolidated Financial Statements for the years ended August 31, 2005 and August 31, 2004.

28

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Following is a reconciliation of operating income before amortization, a non-GAAP measure, to net earnings, its most closely comparable GAAP measure.

	For the three months ended August 31, (unaudited)				For the years ended August 31,
	2005		2004		2005		2004		2003
			(Revised)(1)				(Revised)(1)		(Revised)(1)
Net earnings (loss)	(106,039	)	61,966		10,290		(13,478	)	46,088
Amortization	30,199		25,188		117,500		112,284		111,604
Interest and other financing expenses	171,526		188,025		453,067		462,027		408,296
Investment gains, losses, interest and dividend income	(1,717	)	(121,145	)	(4,158	)	(128,665	)	(12,772	)
Foreign exchange gains	(47,319	)	(41,207	)	(76,025	)	(44,973	)	(3,919	)
Loss on debt extinguishment	—		—		43,992		—		—
Goodwill impairment	41,406		—		41,406		—		—
Asset impairment	9,629				9,629		—		—
Loss (income) from discontinued operations	3,950		(2,199	)	10,132		207,777		68,710
Provision for income tax expense (recovery)	(33,714	)	(9,701	)	20,472		37,485		(46,810	)
Interest in earnings (losses) of equity accounted affiliates	(492	)	(3,287	)	(2,043	)	(2,731	)	1,332
Minority interests	17,971		18,059		96,597		80,349		80,636
Realized currency translation adjustments	(1,078	)	5,138		(622	)	7,023		(922	)
Operating income before amortization	84,322		120,837		720,237		717,098		652,243

⁽¹⁾ See note 1 to our audited consolidated financial statements.

OTHER

Share Data

As at November 17, 2005 we had the following number of shares outstanding:

Multiple voting shares	76,785,976
Subordinate voting shares	98,772,468
Non-voting shares	1,844,092

Our AIF is filed on SEDAR at www.sedar.com.

29

CANWEST GLOBAL COMMUNICATIONS CORP.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2005 AND 2004

PricewaterhouseCoopers LLP
Chartered Accountants
One Lombard Place, Suite 2300
Winnipeg, Manitoba
Canada R3B 0X6
Telephone +1 (204) 926 2400
Facsimile +1 (204) 944 1020

November 17, 2005

Auditors’ Report

To the Shareholders of

CanWest Global Communications Corp.

We have audited the consolidated balance sheets of CanWest Global Communications Corp. as of August 31, 2005 and August 31, 2004 and the consolidated statements of earnings (loss), retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2005 and August 31, 2004 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants

Winnipeg, Canada

November 17, 2005

Comments by Auditors on Canada-U.S. Reporting Difference

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when there are changes in accounting principles that have a material effect on the comparability of the Company’s financial statements, such as the changes described in note 1. Our report to the shareholders dated November 17, 2005, is expressed in accordance with Canadian reporting standards which do not require a reference to such changes in accounting principles or corrections of errors in the auditors’ report when the changes are properly accounted for and adequately disclosed in the financial statements.

Chartered Accountants

Winnipeg, Canada

PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers LLP and the other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

CANWEST GLOBAL COMMUNICATIONS CORP.

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

FOR THE YEARS ENDED AUGUST 31

(In thousands of Canadian dollars except as otherwise noted)

	2005			2004
				(Revised note 1)
Revenue		3,072,542			2,911,400
Operating expenses		1,617,210			1,538,466
Selling, general and administrative expenses		722,345			653,391
Ravelston management contract termination (note 21)		12,750			—
Restructuring expenses (note 9)		—			2,445
		720,237			717,098
Amortization of intangibles (note 6)		20,341			18,182
Amortization of property, plant and equipment (note 4)		91,868			89,067
Other amortization		5,291			5,035
Operating income		602,737			604,814
Interest expense		(251,853	)		(338,528	)
Interest income		2,631			9,141
Amortization of deferred financing costs		(12,708	)		(12,641	)
Interest rate and foreign currency swap losses (note 7)		(188,506	)		(110,858	)
Foreign exchange gains (note 7)		76,025			44,973
Investment gains, losses and write-downs (note 14)		1,527			115,786
Goodwill impairment (note 5)		(41,406	)		—
Asset impairment (note 6)		(9,629	)		—
Loss on debt extinguishment (note 7)		(43,992	)		—
Dividend income		—			3,738
		134,826			316,425
Provision for income taxes (note 13)		20,472			37,485
Earnings before the following		114,354			278,940
Minority interests		(96,597	)		(80,349	)
Interest in earnings of equity accounted affiliates		2,043			2,731
Realized currency translation adjustments (note 12)		622			(7,023	)
Net earnings from continuing operations		20,422			194,299
Loss from discontinued operations (note 15)		(10,132	)		(207,777	)
Net earnings (loss) for the year		10,290			(13,478	)
Earnings per share from continuing operations (note 11):
Basic	$	0.12		$	1.10
Diluted	$	0.12		$	1.10
Earnings (loss) per share (note 11):
Basic	$	0.06			($0.08	)
Diluted	$	0.06			($0.08	)

The notes constitute an integral part of the consolidated financial statements.

32

CANWEST GLOBAL COMMUNICATIONS CORP.

CONSOLIDATED BALANCE SHEETS

AS AT AUGUST 31

(In thousands of Canadian dollars)

	2005		2004
			(Revised note 1)
ASSETS
Current Assets
Cash	29,858		97,271
Accounts receivable	486,568		488,418
Inventory	13,533		13,449
Investment in broadcast rights	188,729		194,099
Future income taxes (note 13)	3,893		6,166
Other current assets	26,043		22,574
Assets of discontinued operations (note 15)	2,850		89,094
	751,474		911,071
Other investments (note 3)	23,059		26,830
Investment in broadcast rights	21,197		35,157
Property, plant and equipment (note 4)	709,222		708,311
Future income taxes (note 13)	54,058		45,826
Other assets (note 17)	200,242		158,917
Intangible assets (note 6)	1,144,299		1,179,465
Goodwill (note 5)	2,424,867		2,469,690
Assets of discontinued operations (note 15)	—		38,376
	5,328,418		5,573,643
LIABILITIES
Current Liabilities
Accounts payable	174,602		158,461
Accrued liabilities (note 9)	294,380		240,502
Income taxes payable	51,883		27,419
Broadcast rights accounts payable	78,318		65,270
Deferred revenue	36,774		34,218
Future income taxes (note 13)	44,663		48,080
Current portion of long term debt and obligations under capital leases	22,216		31,008
Liabilities of discontinued operations (note 15)	—		69,716
	702,836		674,674		Signed on
Long term debt and related foreign currency swap liability (note 7)	2,886,090		3,185,755		behalf of
Interest rate and foreign currency swap liability (note 7)	215,075		120,341		the Board
Obligations under capital leases (note 8)	16,101		17,300
Other accrued liabilities (note 17)	144,532		179,417
Future income taxes (note 13)	77,255		139,280		/s/ David
Minority interests	90,581		77,456		Drybrough
	4,132,470		4,394,223		Director
Commitments, contingencies and guarantees (note 22)
SHAREHOLDERS’ EQUITY					/s/ Leonard
Capital stock (note 10)	849,909		848,628		Aspen
Contributed surplus	7,685		4,612		Director
Retained earnings	350,291		340,001
Cumulative foreign currency translation adjustments (note 12)	(11,937	)	(13,821	)
	1,195,948		1,179,420
	5,328,418		5,573,643

The notes constitute an integral part of the consolidated financial statements.

33

CANWEST GLOBAL COMMUNICATIONS CORP.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

FOR THE YEARS ENDED AUGUST 31

(In thousands of Canadian dollars)

	2005	2004
		(Revised note 1)
Retained earnings - beginning of year	340,001	353,479
Net earnings (loss) for the year	10,290	(13,478	)
Retained earnings – end of year	350,291	340,001

The notes constitute an integral part of the consolidated financial statements.

34

CANWEST GLOBAL COMMUNICATIONS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED AUGUST 31

(In thousands of Canadian dollars)

	2005		2004
			(Revised note 1)
CASH GENERATED (UTILIZED) BY:
OPERATING ACTIVITIES
Net earnings from continuing operations for the year	20,422		194,299
Items not affecting cash
Amortization	130,208		124,925
Non-cash interest expense	32,021		102,092
Future income taxes	(74,349	)	(8,310	)
Realized currency translation adjustments	(622	)	7,023
Interest rate and foreign currency swap losses net of settlements	105,366		98,055
Investment gains, losses, and write-downs	(1,527	)	(115,786	)
Loss on debt extinguishment	43,992		—
Goodwill and asset impairment	51,035		—
Amortization and write-down of film and television programs	6,163		5,656
Pension expense	8,254		6,276
Minority interests	96,597		80,349
Earnings of equity accounted affiliates	(2,043	)	(2,731	)
Foreign exchange gains	(10,407	)	(5,571	)
Stock compensation expense	3,073		964
Investment film and television programs	—		(12,234	)
	408,183		475,007
Changes in non-cash operating accounts (note 16)	61,105		(80,724	)
Cash flows from operating activities of continuing operations	469,288		394,283
Cash flows from operating activities of discontinued operations	46,408		15,991
Cash flows from operating activities	515,696		410,274
INVESTING ACTIVITIES
Other investments	426		(389	)
Investment in broadcast licences	(2,182	)	(5,813	)
Acquisitions	(19,487	)	—
Proceeds from sale of assets of discontinued operations	13,742		—
Proceeds from sales of other investments	2,171		144,127
Proceeds from divestitures	—		83,316
Proceeds from sale of property, plant and equipment	5,035		7,426
Purchase of property, plant and equipment	(99,191	)	(62,556	)
	(99,486	)	166,111
FINANCING ACTIVITIES
Issuance of long term debt	161,321		167,500
Repayment of long term debt	(510,323	)	(381,589	)
Advances (repayments) of revolving facilities	4,640		(243,883	)
Swap recouponing payments	(41,653	)	(27,957	)
Payments of capital leases	(1,100	)	(358	)
Issuance of share capital	1,281		1,804
Issuance of share capital of TEN Group	5,369		14,423
Payment of dividends to minority interests	(84,920	)	(93,002	)
Financing activities from discontinued operations	(18,354	)	(57,644	)
	(483,739	)	(620,706	)
Foreign exchange gain on cash denominated in foreign currencies	116		2,389
Net change in cash	(67,413	)	(41,932	)
Cash – beginning of year	97,271		139,203
Cash – end of year	29,858		97,271

The notes constitute an integral part of the consolidated financial statements.

35

CANWEST GLOBAL COMMUNICATIONS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2005 AND 2004

(In thousands of Canadian dollars except as otherwise noted)

1. SIGNIFICANT ACCOUNTING POLICIES

The Company is an international media company with interests in broadcast television, publishing, radio, specialty cable channels, outdoor advertising, and Internet websites in Canada, Australia, New Zealand and Ireland. The Company’s operating segments include television and radio broadcasting, publishing and online operations and outdoor advertising. In Canada, the Television Broadcast segment includes the operation of the Global Television Network, Prime TV, various other conventional and specialty channels and Cool FM and The Beat radio stations. The Australian Television Broadcast segment includes TEN Group Pty Limited’s (“TEN Group”) TEN Television Network (“Network TEN”). The Canadian Publishing and Online segment includes the publication of a number of newspapers, including metropolitan daily newspapers and the National Post, as well as operation of the canada.com web portal and other web-based operations. The New Zealand Television Broadcast segment includes CanWest MediaWorks NZ Limited’s 3 and C4 Television Networks. The New Zealand Radio Broadcast segment includes CanWest MediaWorks NZ Limited’s RadioWorks operation, which is comprised of six nationally-networked radio brands and two local radio brands. The Irish Television Broadcast segment includes the Company’s 45% interest in the Republic of Ireland’s TV3 Television Network. The Australian Outdoor Advertising segment includes EyeCorp Pty Limited (“Eye Corp”), an outdoor advertising operation which is wholly owned by TEN Group. Corporate and Other includes various investments in media operations, including a 29.9% interest in Northern Ireland’s Ulster Television plc (“UTV”) (sold in June 2004).

The Company’s broadcast customer base is comprised primarily of large advertising agencies, which place advertisements with the Company on behalf of their customers. Publishing and online revenues include advertising, circulation and subscriptions which are derived from a variety of sources. The Company’s advertising revenues are seasonal. Revenues and accounts receivable are highest in the first and third quarters, while expenses are relatively constant throughout the year.

A summary of significant accounting policies followed in the preparation of these consolidated financial statements is as follows:

Basis of presentation

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in Canada. All amounts are expressed in Canadian dollars unless otherwise noted. A reconciliation to accounting principles generally accepted in the United States is provided in note 25.

Principles of consolidation

The consolidated financial statements include the accounts of the Company, its subsidiaries, and the Company’s pro rata share of the assets, liabilities, and results of operations of TV3 Ireland (45%), Mystery (50%) (effective June 2004), and Metro (33%) (effective March 2005). The Company has determined that it is the primary beneficiary of TEN Group, a variable interest entity. Accordingly, as required by The Accounting Standards Board of the Institute of Chartered Accountants of Canada, Accounting Guideline 15 (“AcG-15”), Consolidation of Variable Interest Entities, the Company has consolidated the results of TEN Group.

36

Investments

The Company accounts for investments where significant influence can be exercised, but not control, using the equity method. Other investments are recorded at cost. A provision for loss in value of investments is made when a decline in value is considered other than temporary.

Investment in film and television program rights

(a) Broadcast rights

The Company has entered into various agreements for the rights to broadcast certain feature films and television programs. The Company records a liability for broadcast rights and the corresponding asset when the programs are available for telecast. Broadcast rights are charged to operations as programs are telecast over the anticipated period of use. A loss is recognized when the carrying amount exceeds net realizable value.

(b) Film and television programs

Investment in film and television programs represents the film and television assets that have been produced by the Company, or for which the Company has acquired distribution rights. Included in investment in film and television programs are film and television programs in progress and in development. These assets were held for sale and recorded at fair value.

Foreign currency translation

The Company’s operations in Australia, New Zealand and Ireland represent self-sustaining foreign operations, and the respective accounts have been translated into Canadian dollars in accordance with the current rate method. Assets and liabilities are translated at the exchange rates prevailing at the balance sheet dates, and revenue and expenses are translated on the basis of average exchange rates during the periods. Any gains or losses arising from the translation of these accounts are deferred and included as a component of shareholders’ equity as cumulative foreign currency translation adjustments. An applicable portion of these deferred gains and losses is included in the determination of net earnings when there is a reduction of the net investment.

Property, plant and equipment

Property, plant and equipment are recorded at cost. Amortization is provided over the assets’ estimated useful lives on a straight-line basis at the following annual rates:

Buildings	2 1/2	% -   5%
Machinery and equipment	4	% - 50%
Leasehold and land improvements	2 1/2	% - 20%

Impairment of long lived assets

Impairment of long lived assets is recognized when an event or change in circumstances causes the assets’ carrying value to exceed the total undiscounted cash flows expected from its use and eventual disposition. The impairment loss is calculated by deducting the fair value of the asset or group of assets from its carrying value.

37

Disposal of long-lived assets and discontinued operations

Long-lived assets are classified as held for sale when specific criteria are met, in accordance with CICA Handbook Section 3475, “Disposal of Long-Lived Assets and Discontinued Operations”. Assets held for sale are measured at the lower of their carrying amounts and fair values less costs to dispose and are no longer amortized. The fair value of film and television programs are estimated on a discounted cash flow basis or firm purchase commitments, if available. Assets and liabilities classified as held for sale are reported separately on the balance sheet. A component of the Company that is held for sale is reported as a discontinued operation if the operations and cash flows of the component will be eliminated from the ongoing operations as a result of the disposal transaction and the Company will not have a significant continuing involvement in the operations of the component after the disposal transaction.

Deferred Charges

Certain pre-operating costs incurred in new business undertakings are deferred prior to the commencement of commercial operations, which is generally the time at which subscriber and advertising revenues commence. Pre-operating costs deferred in the current year amounted to $3.6 million (2004 – $1.7 million). Pre-operating costs are amortized over a period of five years. Costs related to debt financing are deferred and amortized over the term of the debt.

Capitalization of interest

Interest is capitalized as part of the cost of certain assets while they are being prepared for use. Interest of $4.3 million was capitalized in 2005 (2004 - $3.8 million).

Intangible assets

Broadcast licences, site licences, newspaper mastheads, circulation and other intangible assets are recorded at their cost which, for business acquisitions, represents the fair market value at the date of the acquisition.

Circulation, broadcast licences, site licences and other finite life intangibles are amortized over periods from 5 to 40 years. Finite life intangibles are tested for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Intangibles with indefinite lives are not subject to amortization and are tested for impairment annually or when indicated by events or changes in circumstances. Impairment of an indefinite life intangible asset is recognized in an amount equal to the difference between the carrying value and the fair value of the related indefinite life intangible asset. The Company utilizes a direct valuation approach in determining the fair value of intangible assets.

Goodwill

Goodwill represents the cost of acquired businesses in excess of the fair value of net identifiable assets acquired. Goodwill is tested for impairment annually or when indicated by events or changes in circumstances by comparing the fair value of a particular reporting unit to its carrying value. When the carrying value exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying value to measure any impairment loss.

38

Revenue recognition

Revenue derived from broadcasting activities consists primarily of the sale of airtime which is recognized at the time commercials are broadcast, net of any provisions for viewer shortfalls. Circulation and advertising revenue from publishing activities is recognized when the newspaper is delivered. Revenue derived from out-of-home advertising is recognized over the period the advertisement is being displayed. Subscription revenues for newspapers and news, business research and corporate financial information services is recognized on a straight-line basis over the term of the subscription or relevant contract.

Revenue from the sale or licencing of film and television programs is recognized when all of the following conditions are met: persuasive evidence of a sale or licencing arrangement exists, the film is complete, the contractual delivery arrangements have been satisfied, the licence period has begun, the fee is fixed or determinable and collection of the fee is reasonably assured.

Amounts received that do not meet all of the above criteria are recorded as deferred revenue on the balance sheet.

Income taxes

The asset and liability method is used to account for income taxes. Under this method, future income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of assets and liabilities including equity accounted investments. Future income tax assets and liabilities are measured using substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the substantive enactment date. Future income tax assets are recognized to the extent that realization is considered more likely than not.

Income taxes on undistributed earnings of TEN Group and CanWest MediaWorks (NZ) Limited are provided at rates applicable to distributions. Income taxes on undistributed earnings of foreign operations, other than TEN Group and CanWest MediaWorks (NZ) Limited, are not provided as such earnings are expected to be indefinitely reinvested.

Inventory

Inventory, consisting primarily of printing materials, is valued at the lower of cost and net realizable values.

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Pension plans and post retirement benefits

The Company maintains a number of defined benefit and defined contribution pension and other post retirement defined benefit plans. For the defined benefit plans, the cost of pension and other retirement benefits earned by employees is determined using the projected benefit method pro rated on service and management’s estimate of expected plan investment performance, salary escalation, retirement ages of employees, expected health care costs, and other costs. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. Past service costs from plan amendments are amortized on a straight line basis over the average remaining service period of employees active at the date of the amendment. For each plan, the excess of the net actuarial gain or loss over 10% of the greater of the accrued benefit obligation and the fair value of plan assets at the beginning of the year is amortized over the average remaining service period of active employees. Transitional obligations are amortized on a straight line basis over the average remaining service life of the employees expected to receive benefits under the plans as of September 1, 2000. Gains or losses arising from the settlement of a pension plan are only recognized once responsibility for the pension obligation has been relieved. The average remaining service period of employees covered by the pension plans is 14 years (2004 – 15 years). The average remaining service period of the employees covered by the post retirement defined benefit plans is 15 years (2004 – 15 years). The Company also maintains post retirement defined benefit plans for certain of its employees, the cost of which is expensed as benefits are earned by the employees. For the defined contribution plans, the pension expense is the Company’s contribution to the plan.

Cash and cash equivalents

For the purpose of the statements of cash flows, cash includes cash and short-term investments with maturities at the date of purchase of up to three months.

Share-based compensation

The Company has share-based compensation plans as described in note 10. The Company utilizes the fair value approach to account for stock options issued subsequent to August 31, 2003. The fair value of share-based compensation is recorded as a charge to net earnings based on the vesting period with a credit to contributed surplus. No compensation expense was recorded for stock options issued prior to August 31, 2003. The Company’s proforma results, reflecting the fair value based method of accounting for stock-based compensation, are disclosed in note 10.

Derivative financial instruments

Derivative financial instruments, up to the principal balance of the hedged item, are used to reduce foreign currency and interest rate risk on the Company’s debt. Derivative financial instruments in excess of the principal balance of the hedged item are accounted for at fair value. The Company does not enter into financial instruments for trading or speculative purposes. The Company’s policy is to designate each derivative financial instrument as a hedge of a specifically identified debt instrument at the time the Company enters into the derivative financial instrument. In the event of early extinguishment of the debt obligations, the Company may continue to hold the related derivative financial instruments. The realized or unrealized gain or loss from these swaps is recognized in earnings, and the swaps are recorded on the balance sheet at fair value. Subsequent changes in the fair value of overhanging swaps are recognized in earnings.

40

Interest rate swap agreements are used as part of the Company’s program to manage the fixed and floating interest rate mix of the Company’s total debt portfolio and related overall cost of borrowing. The interest differential to be paid or received under interest rate swap agreements is recognized as an adjustment to interest expense.

Foreign currency interest rate swap agreements are used to manage exchange and interest rate exposures related to debt instruments denominated in foreign currencies. Translation gains and losses on the principal swapped are offset by corresponding translation losses and gains on the related debt in earnings. The Company translates its foreign currency denominated debt that is hedged by cross currency interest rate swaps at the current rate and also records the effect of the foreign currency exchange rate implicit in the swap agreement.

Gains and losses on terminations of interest rate and foreign currency interest rate swap agreements are deferred and amortized over the remaining term of the underlying debt as an adjustment to interest expense.

Reclassification of prior year amounts

Certain prior year amounts have been reclassified to conform with the financial statement presentation adopted in the current year.

Changes in accounting policies

Consolidation of variable interest entities

Effective September 1, 2004 the Company has adopted AcG-15. The Company has determined that it is the primary beneficiary of TEN Group, a variable interest entity. Accordingly, as required by AcG-15, the Company has consolidated the results of TEN Group. AcG-15 has been adopted on a retroactive basis with restatement of prior periods. Previously, the Company accounted for its investment in TEN Group using the equity method. As at August 31, 2005 the Company holds a 56.4% (56.6% at August 31, 2004) economic interest in TEN Group. The interest held by the 43.6% (43.4% at August 31, 2004) minority is classified in minority interests. The change had no impact on net earnings or shareholders’ equity.

In addition, as a result of the adoption of AcG-15, the Company determined that an immaterial entity should not be consolidated in its results, and accordingly the results of the entity have been excluded from the consolidation on a retroactive basis.

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A summary of the changes to other components of the financial statements is presented below:

	2004
Consolidated Statements of Earnings (Loss)
Revenue	798,366
Operating income	251,940
Consolidated Statements of Cash Flows
Cash flows generated (utilized) by:
Operating activities	82,171
Investing activities	(9,483	)
Financing activities	(73,790	)
Consolidated Balance Sheets
Current assets	232,271
Non-current assets	402,463
Current liabilities	183,364
Non-current liabilities	453,683
Shareholders’ equity	(2,313	)

Proposed accounting policies

The Accounting Standards Board of the Institute of Chartered Accountants of Canada issued CICA 3855, Financial Instruments - Recognition and Measurement, CICA 3865, Hedges, and CICA 1530, Comprehensive Income, which must be applied by the Company for its fiscal years beginning on September 1, 2007. CICA 3855 prescribes when a financial asset, financial liability, or non-financial derivative is to be recognized on the balance sheet and the measurement of such amount. It also specifies how financial instrument gains and losses are to be presented. CICA 3865 is applicable for designated hedging relationships and builds on existing Canadian GAAP guidance by specifying how hedge accounting is applied and what disclosures are necessary when it is applied. CICA 1530 introduces new standards for the presentation and disclosure of components of comprehensive income. Comprehensive income is defined as the change in net assets of an enterprise during a reporting period from transactions and other events and circumstances from non-owner sources. It includes all changes in net assets during a period except those resulting from investments by owners and distributions to owners. The Company is currently considering the impacts of the adoption of such standards.

The Emerging Issues Committee (“EIC”) of the Accounting Standards Board of the Institute of Chartered Accountants of Canada has issued EIC 157, Implicit Variable Interests under AcG-15, (“EIC 157”) which must be applied by the Company in the first interim period beginning subsequent to October 17, 2005. EIC 157 prescribes that an implicit variable interest, which is an implied pecuniary interest in an entity that changes with changes in the fair value of that entity’s net assets, exclusive of variable interests, be evaluated in accordance with AcG-15 to determine if consolidation is appropriate. The Company is currently considering the impact of the adoption of such standards.

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2. ACQUISITIONS AND DIVESTITURES

Acquisitions

(a) On September 1, 2004, Eye Corp acquired the remaining 50% of Eye Shop Pty Limited (formerly Eye Village Joint Venture). In addition, on July 1, 2005, Eye Corp acquired 100% of Eye Drive Melbourne Pty Limited (formerly Southcoast Pty Limited). The total purchase price was $19.5 million (AUS$21.2 million). The principal business activities of these companies is the sale of outdoor advertising.

Eye Corp accounted for these acquisitions using the purchase method. As such, the results of operations reflect revenue and expenses of the acquired operations since the date of acquisition. A summary of the fair value of the assets and liabilities acquired is as follows:

Current assets	5,872
Property, plant and equipment	5,224
Site licences	3,931
Goodwill	9,633
Liabilities	(1,607	)
	23,053
Consideration:
Cash	19,487
Carrying value of investment at date of acquisition	3,566
	23,053

(b) On November 16, 2000, the Company acquired substantially all of the Canadian newspaper and other Canadian media assets including a 50% interest in the National Post (“CanWest Publications”) of Hollinger International Inc. and certain of its affiliates (“Hollinger”) for consideration of approximately $3.1 billion, including certain costs related to the acquisition.

The purchase price is subject to adjustment based on the working capital of CanWest Publications at August 31, 2000 and the results of its operations from September 1, 2000 to November 16, 2000. As a result of the inability to resolve disagreements with Hollinger regarding amounts owing, the Company has referred a claim of $86.5 million to arbitration. When finalized, the working capital adjustment payable or refundable will increase or decrease the amount of goodwill recorded on the acquisition.

Divestitures

(a) In July 2004, through a series of transactions, the Company transferred its net assets and the operations of its New Zealand media operations to CanWest MediaWorks (NZ) Limited for a 70% interest in the ordinary shares of CanWest Mediaworks (NZ) Limited and repayment of inter-company debt. Concurrent with the transfer of the net assets and operations, CanWest MediaWorks (NZ) Limited completed an Initial Public Offering for 30% of its ordinary shares for NZ$104.0 million, net of costs of NZ$4.0 million (net proceeds of NZ$83.3 million). In addition, CanWest MediaWorks (NZ) Limited entered into a term bank loan of NZ$200.0 million. In preparation of these consolidated financial statements, the transfer of the net assets to CanWest MediaWorks (NZ) Limited has been accounted for at their carrying values. As a result of the reduction in the Company’s interest in the New Zealand media operations, the Company recorded a gain of $65.5 million in the year ended August 31, 2004.

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3. OTHER INVESTMENTS

	2005	2004
Investments in private companies – at cost	12,715	12,998
Investments – on an equity basis	10,344	13,832
	23,059	26,830

In June 2004, the Company sold its investment in Ulster Television for proceeds of $143.8 million, resulting in an investment gain of $51.7 million in the year ended August 31, 2004.

In November 2004, the Company received proceeds of $2.2 million from the liquidation of an investment in a private company, resulting in an investment gain of $2.2 million as the investment was previously written off as a result of an impairment.

4. PROPERTY, PLANT AND EQUIPMENT

	2005
	Cost	Accumulated amortization	Net
Land	62,421	—	62,421
Buildings	203,368	40,511	162,857
Machinery and equipment	944,219	482,000	462,219
Leasehold and land improvements	41,424	19,699	21,725
	1,251,432	542,210	709,222

	2004
	Cost	Accumulated amortization	Net
Land	65,259	—	65,259
Buildings	206,408	35,520	170,888
Machinery and equipment	875,099	423,477	451,622
Leasehold and land improvements	38,214	17,672	20,542
	1,184,980	476,669	708,311

The net book value of property, plant and equipment located in Canada was $587.5 million (2004 - $586.0 million) and in foreign jurisdictions was $121.7 million (2004 - $122.3 million).

During 2005, the Company had no additions related to assets under capital leases. In 2004, the Company recorded additions of $19.2 million related to assets under capital leases, of which $15.4 million was added to buildings, and $3.8 million was added to machinery and equipment.

The Company has assets under capital leases with original cost of $19.2 million (2004 – $15.4 million) and accumulated amortization of $1.0 million (2004 – $0.3).

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5. GOODWILL

	2004	Additions		Divestitures	Other		2005
Operating segment
Publishing and Online - Canada	1,707,595	—		—	(41,803	)(2),(3)	1,665,792
Television – Canada	510,876	—		—	(535	)(3)	510,341
Television – Network TEN	32,395	—		—	(1,384	)(4)	31,011
Television – New Zealand	44,868	—		—	(1,975	)(4)	42,893
Television – Ireland	4,280	—		—	(264	)(4)	4,016
Radio – New Zealand	105,823	—		—	(5,950	)(4)	99,873
Outdoor – Australia	63,853	9,633	(1)	—	(2,545	)(4)	70,941
Total	2,469,690	9,633		—	(54,456	)	2,424,867
	2003	Additions		Divestitures	Other		2004
Operating segment
Publishing and Online - Canada	1,707,595	—		—	—		1,707,595
Television – Canada	510,876	—		—	—		510,876
Television – Network TEN	31,300	—		—	1,095	(4)	32,395
Television – New Zealand	43,672	—		—	1,196	(4)	44,868
Television – Ireland	4,280	—		—	—		4,280
Radio – New Zealand	100,353	—		—	5,470	(4)	105,823
Outdoor – Australia	61,972	—		—	1,881	(4)	63,853
Total	2,460,048	—		—	9,642		2,469,690

⁽¹⁾ Increase in goodwill related to TEN Group’s acquisitions of Eye Shop Pty Limited and Eye Drive Melbourne Pty Limited (note 2).

⁽²⁾ Decrease in goodwill of the Publishing and Online segment related to the National Post. Through its annual goodwill impairment testing the Company determined that the fair value of the National Post was less than its book value. As a result the Company recorded a goodwill impairment of $41.4 million. In addition, the value of intangible assets related to National Post circulation was determined to be impaired (see note 6). The impairments resulted from the incurrence of successive years of operating losses in this business unit and its failure to achieve the profitability targets set out in its business plans.

⁽³⁾ Decrease in goodwill related to an adjustment to reflect the reversal of certain unutilized restructuring provisions (note 9).

⁽⁴⁾ Increase (decrease) in goodwill was related to fluctuations in currency translation rates.

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6. INTANGIBLE ASSETS

	2005
	Cost	Accumulated Amortization	Net
Finite life:
Circulation and other	126,766	78,099	48,667
Broadcast and site licences	44,750	5,336	39,414
	171,516	83,435	88,081
Indefinite life:
Broadcast licences			717,332
Newspaper mastheads			338,886
			1,056,218
Total intangible assets			1,144,299

	2004
	Cost	Accumulated Amortization	Net
Finite life:
Circulation and other	137,466	61,732	75,734
Broadcast and site licences	40,758	2,444	38,314
	178,224	64,176	114,048
Indefinite life:
Broadcast licences			726,531
Newspaper mastheads			338,886
			1,065,417
Total intangible assets			1,179,465

The Australian Outdoor Advertising segment acquired site licences during the year in the amount of $3.9 million (note 2). The New Zealand Radio Broadcast segment purchased broadcast licences during the year in the amount of $2.2 million. These acquisitions are classified as broadcast and site licences in the note above.

An impairment loss of $9.6 million (net of accumulated amortization of $1.1 million) relating to finite-lived intangible assets classified as circulation and other was recorded during the year (note 5⁽²⁾). The impairment relates to the Publishing and Online – Canada segment.

Amortization of intangible assets of $20.3 million was recorded in 2005 (2004 -$18.2 million).

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7. LONG TERM DEBT

	Interest Rate (1)		2005		Interest Rate (1)		2004
Senior secured credit facility (2)	6.9	%	346,100		8.6	%	665,011
Senior unsecured notes (3)	6.3	%	237,420		6.3	%	263,340
Senior subordinated notes (4)	7.5	%	549,632		7.3	%	608,373
Senior subordinated notes – exchange offer(5)	6.9	%	936,967				—
Term and demand loan €8,368 (2004 - €13,678) (6)	3.2	%	12,270		3.4	%	21,943
Term bank loan NZ$187,802 (2004 – NZ$200,000) (7)	6.9	%	154,824		6.2	%	173,120
Unsecured bank loan AUS$180,000 (2004 – AUS$175,000) (8)	5.7	%	160,794		5.7	%	163,048
Senior unsecured notes US$125,000 (2004 – US$125,000) (9)	6.4	%	148,609		6.7	%	164,585
Junior subordinated notes (10)			—		12.1	%	881,116
Other			4,250				—
			2,550,866				2,940,536
Effect of foreign currency swap			356,241				275,127
Long term debt			2,907,107				3,215,663
Less portion due within one year			(21,017	)			(29,908	)
Long term portion			2,886,090				3,185,755

⁽¹⁾ The weighted average interest rate gives effect to interest rate swaps.

⁽²⁾ Credit facilities provide for revolving and term loans in the maximum amounts of $413.1 million and $346.1 million, respectively as at August 31, 2005. At August 31, 2005 the Company had drawn on availabilities under its term facilities, including U.S. dollar loans of US$278.9 million, Canadian dollar loans of $15.0 million, and had nil drawn under revolving facilities. The revolving credit facility matures in November 2006. The amount of credit available under the $346.1 million term facilities decreases periodically based on scheduled repayments until maturity in August 2009. This credit facility is collateralized by substantially all the Canadian assets of the Company. The Canadian dollar debt bears interest at CDOR plus a margin and the US dollar debt bears interest at LIBOR plus a margin. During 2005, the Company repaid US$209.6 million under this credit facility which resulted in a foreign exchange gain of $68.3 million, which has been included in foreign exchange gains on the income statement. In October 2005 these credit facilities were extinguished, see note 24.

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The Company has entered into an interest rate swap in the notional amount of $250 million to fix the interest payments on this revolving facility and subsequent revolving facilities until November 2009, resulting in an effective interest rate of 6.7% plus a margin. As a result of the revolving facility not being drawn upon, the notional amount of $250 million was overhanging as at August 31, 2005 (2004 - $250 million) and its fair value was recognized in earnings. The Company has entered into an interest rate swap to fix the interest payments on its Canadian dollar term loans, until maturity, with a notional value of $197.8 million (2004 - $278.3 million) resulting in an effective interest rate of 6.3% plus a margin. As a result of debt repayments and the reduction of notional amounts, a notional amount of $182.8 million was overhanging as at August 31, 2005 (2003 - $256.5 million) and its fair value was recognized in earnings. The Company has also entered into a cross currency interest rate swap to fix its payments on its U.S. dollar term loans, until maturity, with a notional amount of $1,050.5 million (2004 - $1,061.5 million) resulting in an effective interest rate of 6.7% and a fixed currency exchange rate of US$1:$1.5485. As a result of debt repayments a notional amount of $618.6 million was overhanging as at August 31, 2005 (2004 - $305.0 million) and its fair value was recognized in earnings. For the year ended August 31, 2005, total overhanging swap losses of $186.1 million (2004 - $110.9 million) were charged to earnings. The resulting overhanging swap liability as at August 31, 2005 was $212.8 million (2004 - $120.3 million). In November 2005, $525.3 million of the notional amount cross currency interest rate swaps were settled, see note 24.

⁽³⁾ The US$200.0 million senior unsecured notes mature in April 2013 and bear interest at 7.625%. The notes are redeemable at the Company’s option, in whole at any time or in part from time to time, on or after April 15, 2008. The Company has entered into a US$200 million cross-currency interest rate swap resulting in floating interest rates on its senior unsecured notes at interest rates based on CDOR plus a margin and a fixed currency exchange rate of US$1:$1.4735 until May 2013. In October 2005, US$199.8 million of these notes were settled and in November 2005, the cross-currency interest rate swaps were settled, see note 24.

⁽⁴⁾ The senior subordinated notes include loans of US$425.0 million, $4.6 million and loans held by the majority shareholder of the Company in the amount of US$41.9 million (2004 – US$41.9 million) which mature on May 15, 2011 and bear interest at 10.625%. The notes rank junior to the Company’s senior credit facility and are guaranteed by certain subsidiaries of the Company. The notes are redeemable at the Company’s option, in whole at any time or in part from time to time, on or after May 15, 2006. The Company has entered into a US$425.0 million cross-currency interest rate swap resulting in floating interest rates on its senior subordinated notes at interest rates based on CDOR plus a margin and a fixed currency exchange rate of US$1:$1.5505. In October 2005, US$419.9 million and $0.7 million of the notes, and all of the loans held by the majority shareholder were settled. In addition, in November 2005, the cross-currency interest rate swap was settled, see note 24.

⁽⁵⁾ On November 18, 2004, the Company completed an exchange offer to exchange a new series of 8% Senior Subordinated notes due 2012 for the outstanding 12.125% Senior notes due 2010 issued by the Hollinger Participation Trust. In the exchange offer, the holders of the trust notes received US$1,240 principal amount of new notes in exchange for each US$1,000 of trust notes. In addition, the Company completed a concurrent offer of notes, proceeds of which were used to retire the 12.125% junior subordinated notes held by Hollinger, which had not been participated to the Hollinger Participation Trust. The effect of these transactions replaced the Company’s existing $903.6 million 12.125% junior subordinated notes (including accrued interest to November 18, 2004) with new $908.1 million (US$761.1 million) 8% senior subordinated notes.

48

The issuance of the new notes was recorded at their fair value at November 18, 2004 of $944 million. The difference between the fair value of the new notes and the book value of the junior subordinated notes together with certain other costs of settling the debt totaling $44 million, was charged to earnings as a loss on debt extinguishment.

The new senior subordinated notes include loans of US$761.1 million mature on September 15, 2012 and bear interest at 8.0%. The notes rank junior to the Company’s senior credit facility and are guaranteed by certain subsidiaries of the Company. The notes are redeemable at the Company’s option on or after September 15, 2009. The Company has entered into a US$761.1 million cross-currency interest rate swap resulting in floating interest rates on its senior subordinated notes at interest rates based on CDOR plus a margin and a fixed currency exchange rate of US$1:$1.1932 until September 2012.

⁽⁶⁾ These credit facilities provide for demand bank loans maturing December 2005 in the maximum amount of €36.5 million (2004 - €38.5 million). This facility is expected to be renewed annually. The debt bears interest at floating rates. The Company has entered into an interest rate swap to fix the interest payments on €10.0 million of its loan resulting in an effective interest rate of 3.23% until March 2008.

⁽⁷⁾ These credit facilities provide for revolving working capital and revolving term loans in the amount of NZ$25.0 million and NZ$200.0 million respectively, and are subject to a negative pledge deed. The working capital facility matures July 2007 and the term facility matures July 2009. At August 31, 2005 NZ$1.0 million (August 31, 2004 – nil) and NZ$186.8 million (August 31, 2004 – NZ$200.0 million) were drawn under the working capital and revolving term loan facilities, respectively. The debt bears interest at floating rates. The Company has entered into an interest rate swap to fix the interest payments on NZ$165.0 million of its New Zealand term bank loan resulting in an effective interest rate of 6.17% until July 2006.

⁽⁸⁾ Credit facility provides for a maximum of $625.3 million (AUS$700.0 million) in advances. At August 31, 2005 the TEN Group had drawn AUS$180.0 million against this facility leaving an availability of AUS$520.0 million. This facility matures in December 2008. The TEN Group entered into interest rate swap contracts with a notional amount of AUS$250.0 million to fix the interest on this facility and subsequent facilities with maturities to 2011. The swap contracts are not designated as hedging instruments and accordingly, the fair value of $2.3 million were charged to net earnings (2004 - $0.1 million) and a corresponding liability of $2.3 million (2004-$0.1 million) was recorded. The effective interest rate of this debt is approximately 5.7%.

⁽⁹⁾ The US$125.0 million unsecured notes mature in March 2013. The TEN Group has entered into a US$125.0 million cross currency interest rate swap resulting in floating rates and a fixed currency exchange rate of US$1:AUS$1.6807. The effective interest rate of this debt is approximately 6.9%.

⁽¹⁰⁾ The 12.125% junior subordinated notes due November 2010 were settled through the exchange offer (see note 7⁽⁵⁾). Under the terms of the notes interest obligations were satisfied by the issuance of additional notes. In 2005, the related interest was $22.5 million (2004 - - $98.0 million).

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Under its Senior Secured Credit facility the Company was required to maintain a fair value of its interest rate swaps and foreign currency and interest rate swaps above a prescribed minimum liability ($600.0 million as at August 31, 2005). There were also prescribed minimum liabilities with individual counterparties, which have two-way recouponing provisions. The Company was required to make net recouponing payments of $97.0 million during 2005 (2004 – $28.0 million), $55.3 million of this recouponing payment related to overhanging swaps and accordingly was reflected in cash flows from operating activities. Subsequent to August 31, 2005 the Company made further net recouponing payments of $118.5 million. Further strengthening of the Canadian currency and/or declining interest rates may result in further payments to counterparties.

The Company is subject to covenants under certain of the credit facilities referred to above, including thresholds for leverage and interest coverage, and is also subject to certain restrictions under negative covenants.

Principal payments of long term debt, based on terms existing at August 31, 2005 over the next five years, are:

Year ending August 31,	2006	21,017
	2007	5,339
	2008	4,514
	2009	748,177
	2010	—

Subsequent to August 31, 2005 the Company entered into new senior secured credit facilities, see note 24.

8. OBLIGATIONS UNDER CAPITAL LEASES

The Company has entered into capital leases with future minimum lease payments for the years ended August 31 as follows:

2006	2,637
2007	4,890
2008	3,529
2009	3,868
2010	3,654
Thereafter	5,368
Total minimum lease payments	23,946
Amount representing interest (at rates of 5.9% to 9.6%)	(6,646	)
Present value of minimum capital lease payments	17,300
Less current portion of obligations under capital leases	(1,199	)
	16,101

Interest expense recorded on the obligations under capital leases was $1.4 million (2004 – $0.2 million).

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9. RESTRUCTURING ACCRUALS

As at August 31, 2003, the Company had restructuring accruals of $15.2 million related to its acquisition and restructuring of WIC Western International Communications Ltd. (“WIC”), its publishing properties, as well as a result of operating restructuring activities undertaken in its Canadian Media and Entertainment operations.

In 2004, the Company restructured certain other Canadian broadcast operations including the centralization of traffic and master control operations. The $2.4 million cost consisted of employee severance.

For the year ended August 31, 2005, expenditures charged to the restructuring accruals were $3.6 million (August 31, 2004—$11.2 million).

In 2005, the Company reversed unutilized restructuring accruals in the amount of $1.4 million. The reversals of $0.8 million related to the Canadian Television segment and $0.6 million related to the Canadian Publishing and Online segment with related tax effects of $0.3 million and $0.2 million, respectively, were recorded as reductions of goodwill.

	Severance		Lease/ contract termination		Integration		Other		Total
Balance August 31, 2003	10,203		2,428		250		2,340		15,221
Canadian television	2,445		—		—		—		2,445
Expenditures – 2004	(7,630	)	(2,269	)	—		(1,341	)	(11,240	)
Balance August 31, 2004	5,018		159		250		999		6,426
Expenditures – 2005	(3,208	)	(143	)	(250	)	—		(3,601	)
Reversal – 2005	(594	)	(16	)	—		(800	)	(1,410	)
Balance August 31, 2005	1,216		—		—		199		1,415

10. CAPITAL STOCK

Authorized

Authorized capital consists of an unlimited number of preference shares issuable in series, multiple voting shares, subordinate voting shares and non-voting shares.

The multiple voting shares, the subordinate voting shares and the non-voting shares rank equally on a per share basis in respect of dividends and distributions of capital, and are subordinate to the preference shares. Subordinate voting shares carry one vote per share, and multiple voting shares carry ten votes per share. Non-voting shares do not vote, except at meetings where the holders of such shares would be entitled, by law, to vote separately as a class.

Multiple voting shares are convertible into subordinate voting shares and non-voting shares on a one-for-one basis at any time at the option of the holder. Subordinate voting shares are convertible into non-voting shares on a one-for-one basis at any time at the option of the holder. Non-voting shares are convertible into subordinate voting shares on a one-for-one basis provided the holder is Canadian.

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Series 1 preference shares carry 19 votes per share with certain limitations. Under certain conditions, the series 1 preference shares carry preferential voting rights pertaining to the election of up to two directors of the Company. Each series 1 preference shares is convertible, at the option of the holder, into 0.15 subordinate voting or non-voting shares.

Series 2 preference shares are not eligible to vote, and at the option of the Company, are redeemable for cash, or convertible to subordinate voting or non-voting shares based on the market value of the subordinate voting or non-voting shares at the date of conversion.

The series 1 and 2 preference shares are not entitled to dividends and distributions in the normal course or in respect of a liquidation or wind-up and have no right to vote separately as a class.

At August 31, 2005, and August 31, 2004, there were no series 1 or series 2 preference shares outstanding.

Issued	2005	2004
76,785,976 (2004 – 76,785,976) multiple voting shares	3,199	3,199
98,813,655 (2004 – 98,667,438) subordinate voting shares	824,543	820,625
1,795,092 (2004 – 1,825,718) non-voting shares	22,167	24,804
	849,909	848,628

Changes in outstanding share capital during the two years ended August 31, 2005 were as follows:

	Number of shares		$
Multiple voting share capital:
Balance – August 31, 2004 and 2005	76,785,976		3,199
Subordinate voting share capital:
Balance – August 31, 2003	98,280,291		815,545
Changes pursuant to:
Share purchase plans	32,561		446
Exercise of stock options	114,056		1,358
Conversion from non-voting shares – net	240,530		3,276
Balance – August 31, 2004	98,667,438		820,625
Changes pursuant to:
Share purchase plans	25,711		371
Exercise of stock options	89,242		901
Redeemed fractions	(4	)	—
Conversion from non-voting shares – net	31,268		2,646
Balance – August 31, 2005	98,813,655		824,543
Non-voting share capital:
Balance – August 31, 2003	2,066,248		28,080
Changes pursuant to:
Conversion to subordinate voting shares – net	(240,530	)	(3,276	)
Balance – August 31, 2004	1,825,718		24,804
Changes pursuant to:
Share purchase plans	642		9
Conversion to subordinate voting shares – net	(31,268	)	(2,646	)
Balance –August 31, 2005	1,795,092		22,167

52

Share Compensation Plans

The Company’s board of directors has approved share compensation plans, the purpose of which is to provide employees of the Company and its subsidiaries with the opportunity to participate in the growth and development of the Company through the granting of options and share purchase loans. At any time, the number of subordinate voting and non-voting shares reserved and set aside for purposes of the plans may not exceed 10% of the issued shares of the Company.

Options vest over a five or six-year period, are fully exercisable on vesting and expire ten years after issuance, except that under certain specified conditions the options vest and become exercisable immediately. Except as described below the exercise price represents the market trading price at the date on which the option was granted.

Under management and employee share purchase plans, employees may purchase subordinate voting shares or non-voting shares from treasury at the market trading price using non-interest bearing short term loans provided by the Company. The shares are held as collateral by a trustee until the loans are repaid.

The Company adopted the fair value method of accounting for share based compensation on a prospective basis for options granted subsequent to September 1, 2003, resulting in compensation expense and a credit to contributed surplus of $2.5 million for the year ended August 31, 2005 (2004 – $1.0 million). The fair value of the options granted during the year ended August 31, 2005 was estimated using the Black-Scholes option pricing model with the assumptions of no dividend yield (2004 – nil), an expected volatility of 42% (2004 – 52%), risk free interest rates of 4.2% (2004 – 4.4% to 4.9%) and an expected life of 7 years (2004 – 7 to 9 years).

The total fair value of 1,177,500 stock options granted by the Company in the year ended August 31, 2005 with an average exercise price of $12.06 per option was $6.4 million, a weighted average fair value per option of $5.44. During 2004, 523,000 stock options were granted with a total fair value of $4.0 million, and a weighted average fair value per option of $7.58. During the year, the Company agreed to issue approximately 187,000 shares, which vest in two years, for no consideration. The fair value of the shares at the time of issuance was $10.40 per share. During the year ended August 31, 2005, the Company recorded compensation expense, and a credit to contributed surplus, of $0.6 million related to these shares.

53

The proforma cost of share compensation expense if the Company had adopted the fair value method retroactively for the year ended August 31, 2005 would be $1.3 million (2004 –$1.6 million). A value of $1.6 million would be charged to proforma net earnings in future years according to the vesting terms of the options. The resulting proforma net earnings from continuing operations, basic and diluted earnings per share for the year ended August 31, 2005 would have been $19.2 million, $0.11 and $0.11 respectively (2004 - $192.7 million, $1.09, and $1.09). The resulting proforma net earnings (loss), basic and diluted earnings per share for the year ended August 31, 2005 would have been $9.0 million, $0.05 and $0.05 respectively (2004 – ($15.0) million, ($0.09), and ($0.09)).

Changes in outstanding options to purchase subordinate voting shares or non-voting shares for the two years ended August 31 were as follows:

	2005			2004
	Options		Average Price $	Options		Average Price $
Options outstanding, beginning of year	2,360,483		13.74	2,075,561		13.95
Changes pursuant to:
Options granted	1,177,500		12.06	523,000		12.85
Options exercised	(89,242	)	10.10	(114,056	)	11.91
Options expired	(583,113	)	13.74	(5,798	)	15.22
Options forfeited	(371,426	)	11.25	(118,224	)	15.21
Options outstanding, end of year	2,494,202		13.45	2,360,483		13.74
Options exercisable as at August 31	1,725,914		15.10	1,314,380		15.45

The following options to purchase subordinate voting shares or non-voting shares were outstanding and exercisable as at August 31, 2005:

Range of exercise prices $	Number outstanding	Weighted average remaining life years	Weighted average exercise price $	Number exercisable	Weighted average exercise price $
5 – 10	259,410	7.1	7.21	56,810	7.19
10 – 15	1,581,144	8.5	12.29	885,843	12.43
15 – 20	402,397	4.6	16.24	498,785	16.48
20 – 25	246,558	2.5	22.63	279,783	22.54
25 and over	4,693	2.3	25.67	4,693	25.67
	2,494,202	7.1	13.45	1,725,914	15.10

11. EARNINGS PER SHARE

Basic earnings per share are calculated using the daily weighted average number of shares outstanding.

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Diluted earnings per share are calculated using the daily weighted average number of shares that would have been outstanding during the year had all potential common shares been issued at the beginning of the year, or when the underlying options or convertible securities were granted or issued, if later. The treasury stock method is employed to determine the incremental number of shares that would have been outstanding had the Company used proceeds from the exercise of options to acquire shares.

The following table provides a reconciliation of the numerators and denominators used in computing basic and diluted earnings per share.

	2005		2004
Net earnings from continuing operations	20,422		194,299
Net loss from discontinued operations	(10,132	)	(207,777	)
Net earnings (loss) available to common shareholders	10,290		(13,478	)
Basic weighted average shares outstanding during the year	177,319,675		177,235,944
Dilutive effect of options	328,915		158,074
Diluted weighted average shares outstanding during the year	177,648,590		177,394,018
Options outstanding that would have been anti-dilutive	859,609		1,930,283

12. CUMULATIVE TRANSLATION ADJUSTMENTS

The cumulative foreign currency translation adjustments account reflects the net changes in the respective book values of the Company’s investments in self-sustaining foreign operations due to exchange rate fluctuations since the respective dates of their acquisition or start-up.

The changes in this account arise from changes in the Australian, New Zealand, Euro and U.S. currencies relative to the Canadian currency, and changes in the Company’s net investment in the book values of international operations.

Changes in this account were as follows:

	2005		2004
Deferred loss, beginning of year	13,821		30,646
Deferred foreign currency gain during the year	(2,506	)	(9,802	)
Realization of translation gains (losses) due to distributions and divestitures	622		(7,023	)
Deferred loss, end of year	11,937		13,821

The balance of cumulative translation adjustments at the end of the year represents net unrealized losses (gains) as follows:

	2005	2004
Australian dollar	9,880	8,242
New Zealand dollar	1,498	(1,102	)
Euro	559	1,032
United States dollar	—	5,649
	11,937	13,821

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13. INCOME TAXES

The Company’s provision for income taxes reflects an effective income tax rate which differs from the combined Canadian statutory rate as follows:

	2005		2004
Income taxes at combined Canadian statutory rate of 34.9% (2004 – 35.2%)	47,054		111,382
Non-taxable portion of capital gains	(521	)	(36,733	)
Effect of valuation allowance on future tax assets	2,853		2,200
Effect of foreign income tax rates differing from Canadian income tax rates	(16,001	)	(40,883	)
Incremental taxes on debt extinguishment	5,652		—
Large corporation tax and withholding tax	2,839		7,721
Effect of change in tax rates	(2,896	)	9,398
Non-deductible expenses	4,126		3,389
Goodwill impairment	14,546		—
Prior period temporary differences not previously tax effected	(6,644	)	—
Effect of resolved tax dispute	(10,299	)	(19,667	)
Change in Australian tax consolidation legislation	(17,710	)	—
Other	(2,527	)	678
Provision for income taxes	20,472		37,485

An analysis of net earnings (loss) from continuing operations before tax by jurisdiction follows:

	2005		2004
Canada	(183,627	)	(85,551	)
Foreign	318,453		401,976
Net earnings before tax	134,826		316,425

An analysis of the provision for current and future income taxes by jurisdiction follows:

	2005		2004
Current income taxes
Canada	(1,588	)	9,704
Foreign	96,409		36,091
	94,821		45,795
Future income taxes
Canada	(55,710	)	(23,149	)
Foreign	(18,639	)	14,839
	(74,349	)	(8,310	)
Provision for income taxes	20,472		37,485

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Significant components of the Company’s future tax assets and liabilities are as follows:

	2005		2004
Future tax assets
Non-capital loss carryforwards	186,933		154,831
Provision for write down of investments	11,337		12,442
Accounts payable, other accruals and interest rate and foreign currency swap liability	90,402		60,575
Post retirement benefits	14,402		9,028
Less: Valuation allowance	(102,573	)	(96,351	)
Total future tax assets	200,501		140,525
Future tax liabilities
Capital cost allowances in excess of book amortization	86,059		85,038
Pension assets - net	3,505		2,428
Broadcast rights	38,590		42,008
Intangible assets	116,466		131,201
Other assets	19,848		15,623
Total future tax liabilities	264,468		276,298
Net future tax liability	63,967		135,773
Current portion of future tax asset	3,893		6,166
Long term portion of future tax asset	54,058		45,826
Current portion of future tax liability	(44,663	)	(48,080	)
Discontinued operations’ future tax liability	—		(405	)
Net long term future tax liability	77,255		139,280

The provision for income taxes for the year ended August 31, 2005, includes adjustments for prior period temporary differences not previously tax effected aggregating to $6.6 million ($5.8 million future income tax, and $0.8 million current income tax). The Company has determined these adjustments are not material to the previously reported and current year results, accordingly, the adjustments have been included in the current year’s earnings. These adjustments have the effect of increasing basic and diluted earnings per share for the year ended August 31, 2005, by $0.04 per share.

As at August 31, 2005, the Company had non-capital loss carry forwards for income tax purposes of $672.8 million, that expire as follows: 2006 - $2.0 million, 2007 - $6.8 million, 2008 - $22.1 million, 2009 - $87.3 million, 2010 - $53.9 million, thereafter - $500.7 million.

The recognition and measurement of the current and future tax assets and liabilities involves dealing with uncertainties in the application of complex tax regulations in a number of jurisdictions and in the assessment of the recoverability of future tax assets. Actual income taxes could vary from these estimates as a result of future events, including changes in income tax laws or the outcome of tax reviews by tax authorities and related appeals. To the extent that the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax provision in the period in which the determination is made.

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14. INVESTMENT GAINS, LOSSES AND WRITE-DOWNS

The Company has recorded the following investment gains, losses and writedowns.

	2005		2004
Gain on sale of other investment (note 3)	2,171		—
Gain on sale of investment in UTV (note 3)	—		51,717
Dilution gain – CanWest MediaWorks (NZ) Limited (note 2)	—		65,515
Dilution gain – TEN Group	660		1,889
Other losses and write-downs	(1,304	)	(3,335	)
	1,527		115,786

15. DISCONTINUED OPERATIONS

In the year ended August 31, 2004 the Company commenced a process to sell its Fireworks Entertainment Division. As a result, the results of operations of Fireworks were classified as a loss from discontinued operations in the consolidated statements of earnings, the net cash flows were classified as operating, investing and financing activities from discontinued operations in the consolidated statements of cash flows and the assets and liabilities were classified on the consolidated balance sheets as assets and liabilities of discontinued operations. Prior to the classification as a discontinued operation, these results were reported within the Canadian Entertainment segment. In July 2005, a subsidiary of the Company sold certain assets and operations which comprise its film and television program operations for net proceeds of $16.1 million. $2.3 million of these proceeds are recorded in accounts receivable as they have been held in escrow to be released over a 30 month period. In September 2005, a subsidiary of the Company completed the sale of its remaining film and television program rights for net proceeds of $2.9 million. Certain remaining accounts receivable and accounts payable will be settled by the Company.

The loss from discontinued operations of Fireworks is summarized as follows:

	2005		2004
Revenue	56,748		115,852
Loss from discontinued operations before tax expense	(9,428	)	(207,078	)
Income tax expense	(704	)	(699	)
Loss from discontinued operations	(10,132	)	(207,777	)
Loss from discontinued operations per share:
Basic and diluted	($0.06	)	($1.18	)

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The carrying values of the net assets related to the discontinued Fireworks Entertainment division are as follows:

	2005	2004
Accounts receivable	329	85,269
Investment in film and television programs	2,521	—
Other current assets	—	3,825
Total current assets	2,850	89,094
Investment in film and television programs	—	37,971
Other assets	—	405
Total non current assets	—	38,376
Debt	—	(23,571	)(1)
Other current liabilities	—	(46,145	)
Total current liabilities	—	(69,716	)
Net assets	2,850	57,754

⁽¹⁾ This included a three year revolving facility collateralized by certain assets of Fireworks Entertainment Inc. This loan was fully repaid and effective December 21, 2004, the facility has been terminated.

16. STATEMENTS OF CASH FLOWS

The following amounts comprise the net change in non-cash operating accounts included in the statements of cash flows excluding non-cash operating accounts related to discontinued operations:

	2005		2004
CASH GENERATED (UTILIZED) BY:
Accounts receivable	30,664		(1,787	)
Investment in film and television programs	12,448		(3,781	)
Inventory	(84	)	1,060
Other current assets	(6,726	)	(5,052	)
Other assets	(26,605	)	(6,086	)
Accounts payable and accrued liabilities	24,550		(21,638	)
Income taxes payable	20,721		(26,101	)
Deferred revenue	2,556		4,151
Film and television program accounts payable	3,581		(21,490	)
	61,105		(80,724	)

The following amounts were paid on account of interest and income taxes:

	2005	2004
Interest	216,198	226,702
Income taxes	76,445	71,371

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17. RETIREMENT ASSETS AND OBLIGATIONS

The Company has a number of funded and unfunded defined benefit plans, as well as defined contribution plans, that provide pension, other retirement and post retirement benefits to its employees. Its defined benefit pension plans are based on years of service and final average salary. Information on the Company’s pension and post retirement benefit plans follows:

	Pension benefits (1)				Post retirement benefits (2)
	2005		2004		2005		2004
Plan Assets
Fair value – beginning of year	276,707		250,877		—		—
Divestiture	—		(25	)	—		—
Actual return on plan assets	32,184		19,538		—		—
Employer contributions	15,913		13,883		249		277
Employee contributions	6,153		6,125		—		—
Benefits paid and administrative expenses	(14,109	)	(13,691	)	(249	)	(277	)
Fair value – end of year	316,848		276,707		—		—
Plan Obligations
Accrued benefit obligation – beginning of year	366,149		337,436		34,985		30,724
Accrued interest on benefits	24,440		22,413		2,346		2,334
Current service costs	18,002		17,078		1,329		1,260
Benefits paid	(12,770	)	(13,064	)	(249	)	(277	)
Actuarial losses	49,967		2,286		7,177		944
Accrued benefit obligation – end of year	445,788		366,149		45,588		34,985
The Company’s accrued benefit asset (liability) is determined as follows:
Accrued benefit obligations	445,788		366,149		45,588		34,985
Fair value of plan assets	316,848		276,707		—		—
Plan deficits	(128,940	)	(89,442	)	(45,588	)	(34,985	)
Unamortized net actuarial losses (gains)	118,858		82,609		(395	)	(7,930	)
Unamortized transitional obligations	5,353		5,786		2,723		3,026
Unamortized past service costs	13,730		14,936		838		973
Accrued plan asset (liability)	9,001		13,889		(42,422	)	(38,916	)
Valuation allowance	(572	)	(722	)	—		—
Accrued net plan asset (liability), net of valuation allowance	8,429		13,167		(42,422	)	(38,916	)
The accrued plan asset of $27.2 million (2004 - - $27.9 million) is included in long term other assets, the accrued plan liability of $18.8 million (2004 - $14.8 million) and the accrued post retirement plan liability is included in other long term liabilities in the consolidated balance sheet.

	Actual		Target
Plan assets consist of:
Equity securities	54	%	53	%
Debt securities	41	%	42	%
Other	5	%	5	%
Total	100	%	100	%

The pension plans have no investment in securities of CanWest entities.

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The Company measures its accrued benefit obligation and the fair value of plan assets for accounting purposes as at June 30 of each year. The most recent actuarial valuation for the most significant of our pension plans, which make up over half of our accrued benefit obligation, was as of December 31, 2003. The valuation indicated that the plan had an unfunded liability. As a result, the Company is required to make additional contributions of $1.0 million annually for fifteen years. The next required valuation will be as of December 31, 2004 with an expected completion date of December 2005. The investment strategy for pension plan assets is to utilize a balanced mix of equity and fixed income portfolios, with limited additional diversification, to earn a long-term investment return that meets our pension plan obligations. Active management strategies and style diversification strategies are utilized in anticipation of realizing investment returns in excess of market indices.

Total cash payments for 2005, consisting of cash contributed by the Company to its funded pension plans, cash payments to beneficiaries for its post-retirement plans, and cash contributed to its defined contribution plans, was $25.1 million (2004 - $22.6 million)

The Company’s pension benefit expense is determined as follows:

	Year ended August 31, 2005						Year ended August 31, 2004
	Incurred in year		Matching adjustments(3)		Recognized In year		Incurred in year		Matching adjustments(3)		Recognized In year
Current service cost	18,002		—		18,002		17,078		—		17,078
Employee contributions	(6,153	)	—		(6,153	)	(6,125	)	—		(6,125	)
Accrued interest on benefits	24,440		—		24,440		22,413		—		22,413
Return on plan assets	(32,184	)	11,881		(20,303	)	(19,538	)	1,227		(18,311	)
Administrative expenses	1,339		(1,339	)	—		627		(627	)	—
Transitional obligation	—		433		433		—		434		434
Past service costs	—		1,206		1,206		—		1,206		1,206
Net actuarial loss	49,967		(46,782	)	3,185		2,286		1,227		3,513
Changes in valuation allowance	—		(150	)	(150	)	—		(48	)	(48	)
Benefit expense	55,411		(34,751	)	20,660		16,741		3,419		20,160
Employer contribution to the defined contribution plan	8,973		—		8,973		8,488		—		8,488
Total pension benefit expense	64,384		(34,751	)	29,633		25,229		3,419		28,648

The Company’s post retirement benefit expense is determined as follows:

	Year ended August 31, 2005					Year ended August 31, 2004
	Incurred in year	Matching adjustments(3)		Recognized In year		Incurred in year	Matching adjustments(3)		Recognized In year
Current service cost	1,329	—		1,329		1,260	—		1,260
Accrued interest on benefits	2,346	—		2,346		2,334	—		2,334
Transitional obligation	—	303		303		—	303		303
Past service costs	—	135		135		—	137		137
Net actuarial loss	7,177	(7,535	)	(358	)	944	(941	)	3
Total post retirement benefit expense	10,852	(7,097	)	3,755		4,538	(501	)	4,037

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	Pension benefits				Post retirement benefits
	2005		2004		2005		2004
Significant actuarial assumptions in measuring the Company’s accrued benefit obligations as at June 30 are as follows:
Discount rate	5.35	%	6.50	%	5.35	%	6.50	%
Rate of compensation increase	3.00	%	3.50	%	—		—
Significant actuarial assumptions in measuring the Company’s benefit costs as at June 30 are as follows:
Discount rate	6.50	%	6.50	%	6.50	%	6.50	%
Expected long-term rate of return on pension plan assets	7.25	%	7.25	%	—		—
Rate of compensation increase	3.50	%	3.50	%	—		—

The discount rate was estimated by applying Canadian corporate AA zero coupon bonds to the expected future benefit payments under the plans. For fiscal 2006, the expected long-term rate of return on plan assets will continue to be 7.25%, based on the investment mix, current yields and experience. In 2006, the Company expects to contribute $16.5 million to its defined benefit pension plans and $0.3 million to its other postretirement benefit plans.

Benefit payments, which reflect expected future service, are expected to be paid as follows for the years ending August 31:

Year ending August 31,	2006	14,189
	2007	16,210
	2008	18,028
	2009	20,329
	2010	22,249
	2011 – 2015	151,266

⁽¹⁾ As at August 31, 2005 the Company has defined benefit pension plans that are not fully funded. These plans have aggregate plan assets of $309.9 million (2004 - $196.7 million) and aggregate benefit obligations of $439.1 million (2004 - $291.0 million)

⁽²⁾ Post retirement plans are non-contributory and include health, dental, and life insurance benefits. The assumed health care cost trend rates for the next year used to measure the expected cost of benefits covered for the post retirement health and life plans were 9.0% for medical and 7.0% for dental, decreasing to an ultimate rate of 5.0% for medical and 6.0% for dental in 2009 and 2013, respectively. A one percentage point increase in assumed health care cost trend rates would have increased the service and interest costs and obligation by $0.6 million and $6.8 million, respectively. A one percentage point decrease in assumed health care cost trends would have lowered the service and interest costs and the obligation by $0.5 million and $5.3 million, respectively.

⁽³⁾ Accounting adjustments to allocate costs to different periods so as to recognize the long-term nature of employee future benefits.

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18. FINANCIAL INSTRUMENTS

Financial instruments consist of the following:

	2005		2004
	Carrying Value	Fair Value	Carrying Value	Fair Value
Short term assets	516,426	516,426	585,689	585,689
Other investments	23,059	25,619	26,830	32,978
Short term liabilities	599,183	599,183	491,652	491,652
Long term debt	2,550,866	2,774,648	2,940,536	3,100,279
Obligations under capital leases	17,300	17,300	18,400	18,400
Other long term accrued liabilities	83,344	83,344	125,725	125,725
Interest rate and cross currency swap liabilities	516,175	634,828	377,979	465,127

The fair values of short-term assets and liabilities, which include cash, accounts receivable, accounts payable and accrued liabilities, income taxes payable and film and program accounts payable, approximate their fair values due to the short term nature of these financial instruments.

The fair value of other investments is primarily based on quoted market prices for publicly traded securities, and the most recent purchase transactions and agreements and comparable valuations for non-listed securities.

The fair value of long term debt subject to floating interest rates approximates its carrying value. The fair value of long term debt, subject to fixed interest rates, is estimated by discounting future cash flows, including interest payments, using rates currently available for debt of similar terms and maturity.

The fair values of the obligations under capital leases approximate their carrying values as interest rates for similar leases have not changed significantly.

The fair values of other long term liabilities, including film and television program accounts payable, approximate their carrying values.

The fair values of interest rate and cross-currency interest rate swaps are based on the amounts at which they could be settled based on estimates of market rates.

Credit risk

The Company is exposed to credit risk, primarily in relation to accounts receivable. Exposure to credit risk varies due to the concentration of individual balances with large advertising agencies. The Company performs regular credit assessments of its customers and provides allowances for potentially uncollectible accounts receivable.

Interest rate risk

The Company manages its exposure to fluctuations in interest rates through the use of interest rate and cross-currency interest rate swap agreements, more fully described in note 7.

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19. JOINTLY CONTROLLED ENTERPRISES

The following amounts included in the consolidated financial statements represent the Company’s proportionate interest in joint ventures.

	2005		2004
Balance sheets
Assets
Current assets	10,304		11,140
Long term assets	10,205		9,695
	20,509		20,835
Liabilities
Current liabilities	23,488		28,902
Long term liabilities	958		—
	24,446		28,902
Statements of earnings
Revenue	37,002		31,634
Expenses	31,284		27,591
Net earnings	5,718		4,043
Statements of cash flows
Cash generated (utilized) by:
Operating activities	6,271		7,633
Investing activities	(688	)	117
Financing activities	(8,144	)	(5,230	)
Net increase (decrease) in cash	(2,561	)	2,520

20. RELATED PARTY TRANSACTIONS

Senior subordinated notes held by CanWest Communications Corporation, the Company’s parent, totaled $49.7 million (US$41.9 million) at August 31, 2005 (2004 - $55.0 million). This debt matures on May 15, 2011 and bears interest at 10.625%. During 2005, interest expense related to this debt totaled $6.0 million (2004 - $6.3 million). In October 2005, these notes were settled by the Company under the same terms offered to the unrelated senior subordinated note holders for $55.4 million.

A company which is owned by CanWest Communications Corporation owns CanWest Global Place in Winnipeg, Manitoba, a building in which the Company is a tenant. During 2005, rent paid to this company amounted to $1.1 million (2004 - $1.1 million) and is included in selling, general and administrative expenses. The obligations under these operating leases continue until August 2010.

All the related party transactions have been recorded at the exchange amounts, which are representative of market rates.

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21. CONTRACT TERMINATION

Effective April 2005, the Company terminated the agreement under which the Company received management services from The Ravelston Corporation Limited (“Ravelston”). The agreement provided for annual payments of $6.0 million to Ravelston as well as the payment of a fee upon termination. In August 2005, the Company and RSM Richter Inc., in its capacity as interim receiver, receiver manager and monitor of Ravelston, received Court approval for a termination payment in the amount of $12.8 million, which was paid in September 2005. This charge was recorded in operating expenses for year ended August 31, 2005.

22. COMMITMENTS, CONTINGENCIES and GUARANTEES

COMMITMENTS

(a) The Company has entered into various agreements for the right to broadcast certain feature films and syndicated television programs in the future. These agreements, which range in term from one to five years, generally commit the Company to acquire specific programs or films or certain levels of future productions. The acquisition of these additional broadcast rights is contingent on the actual production and/or the airing of the programs or films. Management estimates that these agreements will result in future annual broadcast rights expenditures of approximately $335 million.

(b) The Company’s future minimum payments under the terms of its operating leases are as follows:

2006	72,828
2007	57,475
2008	47,519
2009	32,084
2010	24,496
Thereafter	120,766

(c) As part of the joint venture agreement with Metro International S.A. and Torstar Corporation, the Company has agreed to fund its proportionate share of capital requirements and operating losses up to a prescribed limit per city. Currently, the Company has agreed to the launch of Metro in four cities with the aggregate amount of the commitment being $8.8 million.

CONTINGENCIES

(d) The Company has requested arbitration related to $86.5 million owed by Hollinger International Inc., Hollinger Inc. and certain related parties (collectively “Hollinger”) related to certain unresolved adjustments and claims related to its November 15, 2000 acquisition of certain newspaper assets from Hollinger. Hollinger disputes this claim and claims that it and certain of its affiliates are owed $45 million by the Company. The outcome and recoverability of this claim is not determinable.

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(e) In March 2001, a statement of claim was filed against the Company and certain of the Company’s subsidiaries by CanWest Broadcasting Ltd.’s (“CBL’s”) former minority shareholders requesting, among other things, that their interests in CBL be purchased without minority discount. In addition, the claim alleges the Company wrongfully terminated certain agreements and acted in an oppressive and prejudicial manner towards the plaintiffs. The action was stayed on the basis that the Ontario courts have no jurisdiction to try the claim. In April 2004, a statement of claim was filed in Manitoba by the same minority shareholders, which was substantially the same as the previous claim, seeking damages of $405 million. In June 2005, the Company filed a Statement of Defence and Counterclaim. In its Counterclaim, the Company is seeking a declaration of the fair value of the former minority shareholders’ interest in CBL and repayment of the difference between the fair value and the redemption amount paid by the Company to the former shareholders. The Company believes the allegations in the Statement of Claim are substantially without merit and not likely to have a material adverse effect on its business, financial condition or results of operation. The outcome of this claim is not determinable and the Company intends to vigorously defend this lawsuit.

(f) The Company is one of several defendants to a claim by a proposed class of freelance writers instituted in July 2003 in respect of works that they provided to newspapers and other print publications in Canada. The total amount claimed (by all plaintiffs against all defendants) is $500 million in compensatory damages and $250 million in exemplary and punitive damages. The outcome of this claim is not determinable.

The Company is involved in various legal matters arising in the ordinary course of business. The resolution of these matters is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

GUARANTEES

In connection with the disposition of assets, the Company has provided customary representations and warranties that range in duration. In addition, as is customary, the Company has agreed to indemnify the buyers of certain assets in respect of certain liabilities pertaining to events occurring prior to the respective sales relating to taxation, environmental, litigation and other matters. The Company is unable to estimate the maximum potential liability for these indemnifications as the underlying agreements often do not specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined.

The Company has agreed to indemnify its current and former directors and officers to the extent permitted by law against any and all charges, costs, expenses, amounts paid in settlement and damages incurred by the directors and officers as a result of any lawsuit or any other judicial, administrative or investigative proceeding in which the directors and officers are sued as result of their service. These indemnification claims will be subject to any statutory or other legal limitation period. The nature of such indemnification prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counter parties. The Company has $30 million in directors’ and officers’ liability insurance coverage.

23. SEGMENTED INFORMATION

The Company operates primarily within the publishing, online, broadcasting, entertainment and outdoor advertising industries in Canada, New Zealand, Ireland and Australia.

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Each segment operates as a strategic business unit with separate management. Segment performance is measured primarily upon the basis of segment operating profit. Segmented information and a reconciliation from segment operating profit to earnings before income taxes are presented below:

	Revenue		Segment Operating profit				Total assets		Capital expenditures
	2005	2004	2005		2004		2005	2004	2005	2004
Operating Segments
Publishing and Online – Canada	1,228,851	1,193,629	254,875		267,343		2,669,128	2,813,850	21,765	28,197
Television
Canada	698,644	690,302	124,699		147,430		1,379,495	1,397,175	21,431	22,840
Australia – Network TEN	783,315	721,247	293,528		256,033		604,369	642,342	9,065	7,009
New Zealand	122,995	108,236	30,713		23,291		115,991	120,196	5,953	2,962
Ireland	37,519	34,152	13,254		10,591		22,775	20,920	939	255
	1,642,473	1,553,937	462,194		437,345		2,122,630	2,180,633	37,388	33,066
Radio – New Zealand	93,428	86,717	26,994		27,488		138,584	142,136	4,508	3,231
Outdoor – Australia	107,790	77,117	23,173		14,477		147,443	116,730	7,036	2,380
Corporate and other	—	—	(34,249	)	(27,110	)	247,783	192,824	28,494	11,880
Discontinued operations	—	—	—		—		2,850	127,470	—	—
	3,072,542	2,911,400	732,987		719,543		5,328,418	5,573,643	99,191	78,754
Restructuring expenses(1)			—		(2,445	)
Ravelston management contract termination			(12,750	)	—
			720,237		717,098
Amortization of intangibles			20,341		18,182
Amortization of property, plant and equipment			91,868		89,067
Other amortization			5,291		5,035
Operating income			602,737		604,814
Interest expense			(251,853	)	(338,528	)
Interest income			2,631		9,141
Amortization of deferred financing costs			(12,708	)	(12,641	)
Interest rate and foreign currency swap losses			(188,506	)	(110,858	)
Foreign exchange gains			76,025		44,973
Investment gains, losses and write-downs			1,527		115,786
Goodwill impairment			(41,406	)	—
Asset impairment			(9,629	)	—
Loss on debt extinguishment			(43,992	)	—
Dividend income			—		3,738
Earnings before income taxes			134,826		316,425

⁽¹⁾ Canadian television restructuring expenses.

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24. SUBSEQUENT EVENTS

(a) In October 2005, the Company transferred its investment in its newspaper and interactive operations (excluding the National Post) and certain shared service operations, which provide customer support and administrative services to the Company (the “Publications Group”) to a new entity, CanWest MediaWorks Limited Partnership (the “Limited Partnership”). In exchange, the Company received units of the Limited Partnership representing a 74.2% ownership interest and notes receivable of $1,339.5 million.

Concurrently, the CanWest MediaWorks Income Fund (the “Fund”) closed its initial public offering (“IPO”) of units and invested the proceeds for units of the Limited Partnership representing a 25.8% interest. Total proceeds for the offering were $550 million and costs of the offering were approximately $33 million and were paid by the Limited Partnership.

In addition, the Limited Partnership obtained credit facilities in the amount of $1 billion consisting of an $825 million non-revolving term credit facility and a $175 million revolving term credit facility. The revolving facility matures in five years, is subject to certain restrictions and bears interest at the prevailing prime rate, U.S. base rate, banker’s acceptance rate or LIBOR plus, in each case, an applicable margin. The non-revolving facility matures in five years, and bears interest at the prevailing prime rate, U.S. base rate, banker’s acceptance rate or LIBOR plus, in each case, an applicable margin. On closing of the IPO, the Limited Partnership drew $830.0 million on its credit facilities. The Limited Partnership has entered into five year interest rate swap contracts to fix the interest payments on a notional amount of $825.0 million for the first three years and $660.0 million for the remaining two years resulting in an effective interest rate of 5%.

The Limited Partnership utilized the proceeds of the issuance of the units to the Fund and $822.5 million drawings under its new credit facilities to repay the $1,339.5 million note payable to the Company.

In conjunction with these transactions, the Limited Partnership entered into agreements with the Company that will entitle it to recover certain costs from the Company’s Canadian television and radio broadcasting operations and the National Post and also require the Limited Partnership to make payments for certain services provided by the Company.

As a result of the transaction, the Company will record a dilution gain or loss on the sale of a 25.8% interest in the operations transferred to the Limited Partnership. The amount of the gain or loss has not been determined. The Company will continue to consolidate the results of the Publications Group with a minority interest charge to reflect the ownership interest of the Fund. Approximately 36% of the Company’s units of the Limited Partnership are subordinated in the payment of distributions if the Limited Partnership does not have adequate resources on a quarterly basis to fund distributions.

(b) In October 2005, the Company obtained a new $500 million revolving term credit facility. The revolving facility matures in five years, is subject to certain restrictions and bears interest at the prevailing prime rate, U.S. base rate, banker’s acceptance rate or LIBOR plus, in each case, an applicable margin. This facility is secured by substantially all of the Company’s directly held assets including the assets of its Canadian broadcast operations and the National Post as well as by its other investments.

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(c) The net proceeds from the IPO and the Limited Partnership debt as well as proceeds of $400.6 million from the new credit facility (note 24 (b)) were utilized to retire certain debt and interest rate and cross currency interest rate contracts as follows:

i. In October 2005, the Company completed a tender offer for its 10.125% senior subordinated notes payable due in 2011 and its 7.625% senior unsecured notes payable due in 2013. Substantially all of the notes under these facilities were settled. Debt with a book value of $772.4 million, and related deferred financing costs of $27.7 million were retired for cash of $849.3 million. The transaction resulted in a loss on debt retirement of $71.1 million, net of tax of $33.5 million. As a result of the repayment of these notes the Company will record a swap loss of $21.8 million, net of tax of $12.1 million related to the associated cross currency interest rate swaps.

ii. In October 2005, the Company retired its senior credit facility. Debt with a book value of $526.4 million and deferred financing costs of $6.0 million were settled for cash of $526.4 million. The transaction resulted in a loss on debt retirement of $3.9 million, net of tax of $2.1 million. In addition, as a result of the settlement of this debt, the Company will record a loss of $48.2 million, net of tax of $26.7 million related to the associated interest rate and cross currency interest rate swaps.

iii. In November 2005, the Company retired interest rate and cross currency interest rate swap contracts relating to the 7.625% notes, the 10.625% notes and 50% of the cross currency interest rate swap related to the senior secured credit facilities for cash of $364.8 million.

(d) Subsequent to year end, the Company announced its successful bids to acquire interests in two radio stations in Turkey. On September 21, 2005, the Company announced that it acquired an equity interest in CGS Televizyon Ve Radyo Yayinciligi Ticaret Anonim Sirketi (“CGS”) that in turn was successful in its bid to acquire the assets of Super FM for consideration of US$33 million, which will be payable upon completion of the transaction. On September 22, 2005, the Company announced that Pasifik Televizyon Ve Radyo Yayinciligi Ticaret A.S. (“Pasifik”) was successful in its bid to acquire the assets of Metro FM for consideration of US$23 million, which will be payable upon completion of the transaction. In exchange for the payment of US$42.0 million, the Company will acquire a 75% economic interest in both CGS and Pasifik. These transactions, which are subject to regulatory approvals by certain Turkish authorities, are expected to be completed within 90 days of the announcement. Subject to a relaxation of foreign ownership restrictions and the receipt of all necessary regulatory approvals, the Company has the right to convert its interest to a 75% equity interest in Metro FM and Super FM.

25. UNITED STATES ACCOUNTING PRINCIPLES

These consolidated financial statements have been prepared in accordance with Canadian GAAP. In certain aspects GAAP as applied in the United States (“U.S.”) differs from Canadian GAAP. Amounts are in thousands of Canadian dollars, unless otherwise noted.

Principal differences affecting the Company

(a) Comprehensive income

Comprehensive income, defined as all changes in equity other than those resulting from investments by owners and distributions to owners, must be reported under U.S. GAAP. There is currently no similar requirement under Canadian GAAP, however upon adoption of CICA 1530, Comprehensive Income, no such GAAP difference will exist.

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(b) Pre-operating costs

In the U.S., pre-operating costs are expensed in the period incurred. In accordance with Canadian GAAP, the Company defers pre-operating costs until commencement of commercial operations and amortizes the deferred costs over a period of five years. The U.S. GAAP reconciliation reflects the expensing of amounts which were deferred for Canadian GAAP of: 2005 - $3,568 (2004 - $1,748), with related tax recoveries of: 2005 - $1,273 (2004-$305) and the reversal of amortization of pre-operating costs of: 2005 - $2,297 (2004 - $1,471), with related tax provisions of 2005 - $820 (2004 – $646). The balance sheet effect of these adjustments was: other assets reduced by $7,769 (2004-$6,498), long term future tax liability reduced by 2005 - $2,781 (2004 - $2,328) and shareholder’s equity reduced by the net amount of: 2005 - $4,988 (2004 - $4,170).

(c) Foreign currency translation

In the U.S., distributions from self-sustaining foreign operations do not result in a realization of the cumulative translation adjustments account. Realization of such foreign currency translation adjustments occurs only upon the sale of all or a part of the investment giving rise to the translation adjustments. In accordance with Canadian GAAP, reductions in the net investment in self-sustaining foreign operations result in a proportionate reduction in the cumulative foreign currency translation adjustment accounts. The U.S. GAAP reconciliation reflects the reversal of realization of cumulative translation adjustments resulting in a decrease in net earnings of: 2005 – $622 (2004 – increase in net earnings of $4,526). The balance sheet effect of these adjustments was: increase retained earnings by: 2005 - $9,412 (2004 - $10,034) and decrease accumulated other comprehensive income by: 2005 - $9,412 (2004 – $10,034).

Under Canadian GAAP cumulative currency translation adjustments are presented as a separate component of shareholder’s equity. Under US GAAP it is a component of accumulated other comprehensive income. The US GAAP reconciliation reflects this reclassification.

(d) Programming commitments

Under Canadian GAAP, certain programming commitments imposed by regulatory requirements related to an acquisition, completed prior to January 1, 2001, were accrued in the purchase equation resulting in additional goodwill. Under U.S. GAAP, these costs were expensed as incurred. The U.S. GAAP reconciliation reflects the expensing of these programming costs as incurred of: 2005 - $6,463 (2004 - - $6,012), with related tax recoveries of 2005 - $2,321 (2004 - $1,683). The balance sheet effect of these adjustments was to reduce goodwill by: 2005 and 2004-$18,639, increase long term future tax liability by: 2005 - $2,500 (2004 - $7,372), reduce other long term accrued liabilities by: 2005 - $7,558 (2004 - $14,021), and reduce shareholders’ equity by: 2005 - $13,581 (2004 - $11,052).

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(e) Investment in a broadcasting operation on an equity basis

Under Canadian GAAP, the Company’s investment in a broadcasting operation was accounted for using the equity method during the period that this investment was held in trust pending completion of the regulatory approval process. Under U.S. GAAP, the investment was initially accounted for on a cost basis; then, as a result of receiving approval to complete the purchase of the broadcasting operation, the Company changed its method of accounting for the investment to the equity method. The change in accounting policy was retroactively applied as required under APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock, to the date that the Company initially acquired its investment. Effective July 6, 2000, the Company consolidated this investment for both Canadian and U.S. GAAP purposes. The U.S. GAAP reconciliation had no effect on earnings for the periods presented. The effect on the balance sheet was to increase goodwill by: 2005 and 2004 - $ 38,503 and increase shareholder’s equity by: 2005 and 2004 - $38,503.

(f) Intangible assets

Under Canadian GAAP, certain costs related to the development of broadcast licences, other than through a business combination, were recorded as intangible assets. Under U.S. GAAP such costs are expensed as incurred. The U.S. GAAP reconciliation had no effect on earnings for the periods presented. The balance sheet effect was to reduce intangible assets by: 2005 and 2004 - $2,325 to reduce long term future tax liability by: 2005 and 2004 - $860 and to reduce shareholders equity by: 2005 and 2004 - $1,465.

(g) Investment in marketable securities

For U.S. GAAP, investment assets classified as “available for sale” are carried at market, and unrealized temporary gains and losses are included, net of tax, in other comprehensive income. In accordance with Canadian GAAP, the Company carries its investment in marketable securities at cost. For the Company’s other investments, fair value is not readily determinable and are accordingly carried at cost. The effect of the U.S. GAAP reconciliation was to decrease other comprehensive income by: 2005 - nil (2004 – ($16,834)), to increase other investments by: 2005 and 2004 – nil, and to increase shareholder’s equity by: 2005 and 2004 – nil.

(h) Pension valuation allowances

Under Canadian GAAP a valuation allowance against pension assets is the excess of the adjusted benefit asset over the expected future benefit. Changes in the valuation allowance are recorded as adjustments to pension expense. Under U.S. GAAP valuation allowances are not recorded. The U.S. GAAP reconciliation reflects the elimination of pension valuation allowances resulting in reduced earnings of: 2005 - $150 (2004 - $48), with related tax recoveries of: 2005 - $52 (2004 - $19). The balance sheet effect was to increase long term other assets by: 2005 - $572 (2004 - $722), increase long term future tax liability by: 2005 - $214 (2004 - $266) and increase shareholders’ equity by: 2005 - $358 (2004 - $456).

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(i) Proportionate consolidation

Canadian GAAP requires the accounts of jointly controlled enterprises to be proportionately consolidated. Under U.S. GAAP, investments in jointly controlled entities are accounted as equity investments. This accounting difference applies to the Company’s investment in TV3 Ireland, Mystery, and Metro. The proportionate interest is disclosed in note 19. Accordingly, under accommodation provided by the SEC this difference is not included in the following reconciliation.

(j) Accounting for derivative instruments and hedging activities

Under U.S. GAAP, entities are required to recognize all derivative instruments as either assets or liabilities in the balance sheet, and measure those instruments at fair value. The changes in fair value of the derivatives are included in the statement of earnings. Under Canadian GAAP hedge accounting is applied for derivatives that are eligible for hedge accounting if certain criteria are met and non-hedging derivatives are recognized at their fair value as either assets or liabilities. As a result of adopting FAS 133 on September 1, 2001, the Company discontinued hedge accounting. The fair values of derivatives designated as hedges before August 31, 2000 have been included in a transitional adjustment and are included in income over the term of the hedged transaction. The U.S. GAAP reconciliation reflects the recording of gains on interest rate and cross-currency swaps of: 2005 - $3,315 (2004 - $77,770), with related tax provision of: 2005 - $18,624 (2004 - $31,875) and the recording of minority interests share of gains (losses) on interest rate and cross-currency swaps and translation of foreign denominated debt of: 2005 - $809 (2004 - ($2,032)). The balance sheet effect was to increase long term swap liabilities by: 2005 - $65,776 (2004 - $69,586), reduce future tax liabilities by: 2005 - $19,981 (2004 - $38,781) and decrease minority interests by: 2005 - $1,393 (2004 – $584), and reduce shareholders’ equity by: 2005 - $44,402 (2004 - $30,221).

(k) Integration costs related to the acquisition of the publishing properties

Under Canadian GAAP certain integration costs related to the acquisition of the Company’s publishing properties were accrued in the purchase equation. Under U.S. GAAP, these costs are expensed as incurred. The U.S. GAAP reconciliation had no effect on earnings for the periods presented. The balance sheet effect was to decrease goodwill by: 2005 and 2004 -$1,663 and reduce shareholders’ equity by: 2005 and 2004 - $1,663.

(l) Resolution of acquired tax contingencies

Under U.S. GAAP, the settlement of tax contingencies acquired through a business acquisition result in an adjustment to the purchase equation. In accordance with Canadian GAAP, the resolution of such tax contingencies is included in earnings once the purchase price allocation is finalized. The U.S. GAAP reconciliation reflects the reduction of earnings related to the reversal of tax recoveries of: 2005 - nil (2004 - $7,000). The balance sheet effect was to reduce goodwill and shareholder’s equity by: 2005 and 2004 - $7,000.

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(m) Future income taxes

Under U.S. GAAP, the changes to future tax balances upon the adoption of FAS 142, Goodwill and Other Intangible Assets, in 2001, were reflected as a future income tax recovery in the year FAS 142 was adopted. In accordance with Canadian GAAP, the adjustment was recorded as a reduction in goodwill. The related U.S. GAAP balance sheet effect would be to increase goodwill by: 2005 and 2004 - $160,500 and increase retained earnings by: 2005 and 2004 - $160,500.

(n) Additional minimum liability

Under FAS 87, Employers’ Accounting for Pensions, the Company recognizes an additional minimum pension liability when the accumulated benefit obligation exceeds the fair value of plan assets to the extent that such excess is greater than accrued pension costs otherwise recorded. For the purposes of determining the additional minimum pension liability, the accumulated benefit obligation does not incorporate projections of future compensation increases in the determination of the obligation. No such adjustment is required under Canadian GAAP. The effect on the U.S. GAAP reconciliation was to decrease other comprehensive income by $28,674 with related tax recovery of $10,323. The balance sheet effect was to increase other long term liabilities by $84,274, increase intangible assets by $13,558, increase other assets by $3,015, decrease future tax liabilities by $24,372, and decrease shareholders equity by $43,329.

The minimum pension liability for the year ended August 31, 2005, includes a comprehensive income adjustment for the current year of $18,351, net of tax of $10,323. Comprehensive income adjustments for 2004 and prior years of $24,978, net of tax of $14,049 are included in the comprehensive income (loss) accumulated balances. The Company has determined these adjustments are not material to the previously reported results, accordingly, the adjustments have been included in the current year’s comprehensive income (loss) accumulated balances.

Proposed accounting policies

Share-Based Payments

In December 2004, The Financial Accounting Standards Board issued the Statement of Financial Accounting Standards No. 123 (Revised 2004), Share Based Payment, which requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). FAS 123 (Revised 2004) is applicable for as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. The Company utilizes a similar approach under Canadian GAAP and does not expect the adoption of this accounting policy to have a material impact on its results.

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Adopted Accounting Pronouncements

Consolidating Variable Interest Entities

For its year ended August 31, 2004, for U.S. GAAP, the Company was required to apply the Financial Accounting Standards Board (FASB) Interpretation No. 46(R) (“FIN 46(R)”), Consolidation of Variable Interest Entities. The Company had determined that it is the primary beneficiary of Network TEN Group, a variable interest entity. Accordingly, for U.S. GAAP, as required by FIN 46(R) the Company consolidated its investment in TEN Group effective May 31, 2004. This was applied on a prospective basis. As explained in Note 1, effective September 1, 2004, under Canadian GAAP, the Company adopted AcG-15 and consolidated its investment in the TEN Group on a retroactive basis and restated the prior years’ financial statements of the Company. There are no material differences between the consolidation principles under FIN 46(R) and AcG-15. With the adoption of AcG-15, the Company changed the transition method previously adopted for US GAAP purposes by restating previously issued US GAAP financial information as permitted under paragraph 40 of FIN 46(R). Management is of the opinion that this change in method is preferable as it presents comparable information for all periods of the consolidation of the TEN Group which was encouraged in FIN 46(R).

Comparative Reconciliation of Net Earnings (Loss)

The following is a reconciliation of net earnings reflecting the differences between Canadian and U.S. GAAP:

	2005			2004
Net earnings in accordance with Canadian GAAP from continuing operations		20,422			194,299
Pre-operating costs incurred (b)		(3,568	)		(1,748	)
Amortization of pre-operating costs (b)		2,297			1,471
Realization of currency translation adjustments (c)		(622	)		4,526
Programming costs imposed by regulatory requirement (d)		(6,463	)		(6,012	)
Pension valuation allowances (h)		(150	)		(48	)
Gain on interest rate and cross currency swaps and translation of foreign denominated debt (j)		3,315			77,770
Resolution of acquired tax contingencies (l)		—			(7,000	)
Minority interests effect of adjustments		809			(2,032	)
Tax effect of adjustments		(13,408	)		(30,514	)
Net earnings for the year from continuing operations in accordance with U.S. GAAP		2,632			230,712
Loss from discontinued operations		(10,132	)		(207,777	)
Net earnings (loss) for the year in accordance with U.S. GAAP		(7,500	)		22,935
Earnings per share from continuing operations
Basic	$	0.01		$	1.30
Diluted	$	0.01		$	1.30
Earnings (loss) per share
Basic		($0.04	)	$	0.13
Diluted		($0.04	)	$	0.13
Loss from discontinued operations per share:
Basic		($0.06	)	($	1.18	)
Diluted		($0.06	)	($	1.18	)

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Consolidated Statements of Comprehensive Income (Loss)

Comprehensive income (loss) – current periods

	2005		2004
Net earnings (loss) in accordance with U.S. GAAP	(7,500	)	22,935
Unrealized foreign currency translation gain (c)	2,506		9,802
Realized foreign currency translation loss (c)	—		2,497
Foreign currency translation gain	2,506		12,299
Unrealized gains (losses) on securities available for sale net of tax of nil (h)	—		34,883
Realized (gains) losses on securities available for sale net of tax of nil (h)	—		(51,717	)
Transition adjustment on swaps net of tax of $176 (2004 - $177) (k)	316		313
Additional minimum liability net of tax of $10,323 (n)	(18,351	)	—
	(15,529	)	(4,222	)
Comprehensive income (loss)	(23,029	)	18,713

Comprehensive income (loss) – accumulated balances

	Foreign currency translation		Unrealized gains (losses) on securities		Transition adjustment on swaps		Additional minimum liability		Total
Accumulated other comprehensive income (loss) – August 31, 2003	(36,154	)	16,834		(2,230	)	—		(21,550	)
Change during the year	12,299		(16,834	)	313		—		(4,222	)
Accumulated other comprehensive income (loss) – August 31, 2004	(23,855	)	—		(1,917	)	—		(25,772	)
Change during the year	2,506		—		316		(43,329	)	(40,507	)
Accumulated other comprehensive income (loss) – August 31, 2005	(21,349	)	—		(1,601	)	(43,329	)	(66,279	)

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Comparative Reconciliation of Shareholders’ Equity

A reconciliation of shareholders’ equity reflecting the differences between Canadian and U.S. GAAP is set out below:

	2005		2004
Shareholders’ equity in accordance with Canadian GAAP	1,195,948		1,179,420
Pre-operating costs incurred (b)	(7,769	)	(6,498	)
Goodwill adjustment related to retroactive equity accounting of WIC upon regulatory approval (e)	38,503		38,503
Goodwill adjustment related to programming costs incurred (d)	(25,142	)	(18,679	)
Goodwill adjustment related to integration costs (k)	(1,663	)	(1,663	)
Historical amortization of goodwill related to future programming costs imposed by regulatory requirement on business combination (d)	938		938
Costs to develop intangible assets expensed (f)	(2,325	)	(2,325	)
Pension valuation allowance (h)	572		722
Goodwill adjustment related to resolution of acquired tax contingencies (l)	(7,000	)	(7,000	)
Future income taxes (m)	160,500		160,500
Adjustment to reflect losses on interest rate and cross-currency swaps (j)	(63,210	)	(66,525	)
Transition adjustment on interest rate swaps (j)	(2,566	)	(3,058	)
Additional minimum liability (n)	(67,701	)	—
Minority interests effect of adjustments	1,393		584
Tax effect of adjustments	59,180		48,392
Shareholders’ equity in accordance with U.S. GAAP	1,279,658		1,323,311

Other

The following amounts are included in accounts receivable:

	2005		2004
			(Revised note 1)
Allowance for doubtful accounts – beginning of year	17,074		18,860
Bad debt expense	6,813		5,634
Write offs during the year	(8,092	)	(7,513	)
Foreign exchange	(186	)	93
	15,609		17,074

The following amounts are included in operating expenses:

	2005	2004
		(Revised note 1)
Rent expense	68,141	53,297

The following amounts are included in accrued liabilities:

	2005	2004
		(Revised note 1)
Employment related accruals	88,000	75,000

Amortization expense related to existing finite life intangibles will be $11.5 million per year in 2006 and $4.2 million in 2007 to 2010.

76

EX-99.3

Exhibit 99.3

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Leonard Asper, certify that:

1. I have reviewed this annual report on Form 40-F of CanWest Global Communications Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: November 30, 2005

/s/ Leonard Asper

Leonard Asper

Chief Executive Officer

EX-99.4

Exhibit 99.4

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John Maguire, certify that:

1. I have reviewed this annual report on Form 40-F of CanWest Global Communications Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: November 30, 2005

/s/ John Maguire

John Maguire

Chief Financial Officer

EX-99.5

Exhibit 99.5

Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 (“Section 906”) of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of CanWest Global Communications Corp. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Company’s Annual Report on Form 40-F for the fiscal year ended August 31, 2005 (the “Form 40-F”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Form 40-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 30, 2005

/s/ Leonard Asper

Name: Leonard Asper

Title:   Chief Executive Officer

Dated: November 30, 2005

/s/ John Maguire

Name: John Maguire

Title:   Chief Financial Officer

EX-99.6

Exhibit 99.6

[Logo of PRICEWATERHOUSECOOPERS]

PricewaterhouseCoopers LLP

Chartered Accountants

One Lombard Place, Suite 2300

Winnipeg, Manitoba

Canada R3B 0X6

Telephone +1 (204) 926 2400

Facsimile +1 (204) 944 1020

November 17, 2005

Consent of Independent Auditors

We hereby consent to the inclusion in this Annual Report on Form 40-F of CanWest Global Communications Corp. of our report dated November 17, 2005 relating to the consolidated financial statements of CanWest Global Communications Corp. as of August 31, 2005 and 2004 and for the years ended August 31, 2005 and 2004. We also consent to the inclusion in this Annual Report on Form 40-F of our comments by auditors on Canada-US reporting difference dated November 17, 2005.

/S/    PRICEWATERHOUSECOOPERS

Chartered Accountants

PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers LLP and the other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.