6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2016

Commission File Number:  001-37408

DHX Media Ltd.

(Name of registrant)

1478 Queen Street,

Halifax, Nova Scotia, Canada

B3J 2H7 

(Address of principal executive offices)

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

¨   Form 20-F x   Form 40-F

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

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

SIGNATURES

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

	DHX Media Ltd.
Date: May 16, 2016	By:	/s/ Mark Gosine
		Name:  Mark Gosine
		Title:    Corporate Secretary

Form 6-K Exhibit Index

Exhibit Number	Document Description
99.1	News Release Dated May 16, 2016
99.2	Management Discussion and Analysis for the Three and Nine Months Ended March 31, 2016
99.3	Unaudited Interim Condensed Consolidated Financial Statements as at and for the Three and Nine Months Ended March 31, 2016
99.4	Certification of the Chief Executive Officer pursuant to Form 52-109F2
99.5	Certification of the Chief Financial Officer pursuant to Form 52-109F2

EX-99.1

Exhibit 99.1

 

DHX MEDIA ANNOUNCES THIRD QUARTER FISCAL 2016 RESULTS

Halifax, NS, May 16, 2016 – DHX Media Ltd. (“DHX” or the “Company”) (NASDAQ: DHXM; TSX: DHX.A, DHX.B), the world’s leading independent, pure-play kids’ content company, reports its unaudited financial results for the third quarter of fiscal 2016 and nine months ended March 31, 2016.

“Our strategy to be the ‘go-to' company for children’s content in an expanding on-demand market is delivering strong results,” said Dana Landry, CEO of DHX. “Our top-rated original productions are generating strong demand from major digital and linear customers around the globe. We have built a large and growing online audience for both our own content and third-party brands through our WildBrain Multi-Platform Kids’ Network. Furthermore, we are expanding our lineup of high-profile brands with the inherent potential for multiple revenue streams.”

Financial Highlights (in millions of Cdn$)	Three Months Ended March 31,						Nine Months Ended March 31,
	2016			2015			2016			2015
Revenue	$	84.1		$	85.6		$	229.5		$	192.9
Gross Margin	$	50.5		$	44.8		$	129.4		$	107.4
Gross Margin (%)		60	%		52	%		56	%		56	%
Adjusted EBITDA1	$	32.7		$	29.8		$	78.9		$	67.4
Net Income	$	10.2		$	18.0		$	29.4		$	15.8
Adjusted Net Income1	$	11.4		$	18.0		$	32.3		$	33.4

¹Adjusted EBITDA represents income of the Company before amortization, finance income (expense), taxes, development expenses, impairments, share-based compensation expense, and adjustments for other identified charges. Adjusted Net Income adjusts net income (loss) for certain identified charges, net of the tax affect. (See the definition of Adjusted EBITDA and Adjusted Net Income in the Company’s Q3 2016 Management Discussion and Analysis for full details).

Highlights of Q3 2016:

· Fiscal 2016 third-quarter revenue was $84.1 million, in line with Management’s expectation;

· DHX’s focus on high-profile brands is contributing to strong merchandise and licensing revenues for our owned brands, which were up 63% (52% excluding live tour revenues) compared with Q3 2015;

TORONTO Queen’s Quay Terminal 207 Queens Quay W. Suite 550 Toronto, ON M5J 1A7 +1 416-363-8034 HALIFAX 1478 Queen Street, 2^nd Floor Halifax, NS B3J 2H7 +1 902-423-0260 LOS ANGELES Sunset Media Center 6255 West Sunset Blvd., Suite 800 Hollywood, CA 90028 +1 323-790-8840 VANCOUVER 190 Alexander Street, 6^th Floor Vancouver, BC V6A 1B5 +1.604-684-2363 LONDON 3 Shortlands London, W6 8PP, UK +44 020-8563-6400

· Adjusted EBITDA rose 10% to $32.7 million from the prior year quarter while net income was $10.2 million, a decline of 43%, largely due to fluctuations in currency exchange rates;

· DHX continued to add to its library of kids TV content. 63 half-hours of proprietary titles were delivered in Q3 2016, and 178 half-hours in Fiscal 2016 YTD;

· New commissions for three original series were announced for Chuck’s Choice, Space Ranger Roger and Season 2 of Inspector Gadget, which collectively represent almost 60 half-hours of our proprietary programming;

· High demand for our brands was evidenced by the announcement of a second season of the Twirlywoos series, commissioned by CBeebies, and 10 more broadcast deals in Europe, the Middle East, Africa and Asia for Teletubbies;

Activities subsequent to the quarter-end driving near- and longer-term growth included:

· The unveiling of WildBrain, our ad-based Multi-Platform Kids’ Network, from an incubator project launched in 2012 to an accelerating organic growth business that generated $12.8 million in gross revenue for the first nine months of fiscal 2016 and is attracting 750 million monthly views;

· An expansion of our strategic partnership with Mattel to a fifth marquee property, Rainbow Magic. We aim to grow this global girls’ publishing brand with new content, toys and other merchandise for participation across multiple revenue streams;

· A commission from the UK’s CBeebies for a second season of Teletubbies; a Nickelodeon announcement of its May 30^th US premiere of the new Teletubbies series; and a renewal order from Netflix for 20 more episodes of Degrassi: Next Class on an exclusive worldwide basis;

· On May 2, 2016, the Company closed a $65 million equity bought deal to fund our growing roster of key brands including strategic deals with Mattel, pursuing additional global brands, general corporate purposes, including investing in the growth of our WildBrain business, and to repay borrowings under the Company’s senior secured credit facilities; and

· On May 13, 2016, the Company closed a private offering of an additional $50 million aggregate principal amount of its 5.875% Senior Unsecured Notes due December 2, 2021 through a syndicate of underwriters at a price of $975 per $1,000 principal amount, plus accrued interest from and including December 2, 2015 through May 13, 2016. The net proceeds of the bond offering will be used to repay borrowings under the Company’s senior secured credit facilities.

Dividend Declaration

Today, the Company declared a dividend for the quarter of $0.016 on each common voting share and variable voting share outstanding to the shareholders of record at the close of business on May 30, 2016 to be paid on June 20, 2016.

2

Outlook

Management is pleased to reconfirm its Outlook for fiscal 2016. Details of Management’s expectations for revenues, gross margin and operating expense for fiscal 2016 can be found in the Outlook section of the Company’s Q3 MD&A, available at www.dhxmedia.com, on www.sedar.com or http://www.sec.gov/edgar.

Analyst call details

DHX will hold a conference call for analysts and investors to discuss its fiscal Q3 2016 results on Monday, May 16, 2016 at 8:00 a.m. ET. Media are welcome to listen in.

Conference call numbers:

To access the call, please dial +1(888) 231-8191 toll-free or +1(647) 427-7450 internationally. Please allow 10 minutes to be connected to the conference call.

Replay: Instant replay will be available beginning approximately two hours after the call on +1(855) 859-2056 toll free or +1(416) 849-0833, and passcode 98696178, until 11:59 p.m. ET, May 23, 2016.

3

Consolidated Statements of Income and Comprehensive Income Data

	Three Months Ended			Three Months Ended
	March 31, 2016			March 31, 2015
($000, except per share data)
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Data:
Revenues		84,095			85,582
Direct production costs and expense of film and television produced		(33,388	)		(39,361	)
Expense of book value of acquired libraries		(195	)		(1,428	)
Gross margin		50,512			44,793
Selling, general, and administrative		(19,304	)		(16,368	)
Write-down of certain investment in film and television programs		(450	)		(517	)
Amortization, finance and other expenses, net		(19,783	)		(3,211	)
Recovery of (provision for) income taxes		(756	)		(6,666	)
Net income		10,219			18,031
Cumulative translation adjustment		(3,323	)		(4,260	)
Comprehensive income		6,896			13,771
Basic earnings per common share		0.08			0.15
Diluted earnings per common share		0.08			0.14
Weighted average common shares outstanding (expressed in thousands)
Basic		125,218			123,207
Diluted for net income and normalized net income		126,218			126,098
Normalized net income		11,384			18,031
Basic normalized earnings per common share		0.09			0.15
Diluted normalized earnings per common share		0.09			0.14

Revenues

Revenues for Q3 2016 were $84.10 million, down 2% from $85.58 million for Q3 2015. The decrease in Q3 2016 was largely a result of Q3 2015 distribution revenues having included $12.78 million in streaming revenues for Degrassi, approximately $6-8 million of which represented a catch up from calendar 2014. A detailed review of each source of revenue is included below.

Proprietary production revenues: Proprietary production revenues for Q3 2016 were $12.11 million, a decrease of 20% compared to $15.05 million for Q3 2015, partially a result of certain titles being delivered early in Q2 2016, as noted in the Q2 2016 MD&A. For Q3 2016, the Company added 63.0 proprietary half-hours to the library up 5% versus 60.0 proprietary half-hours for Q3 2015. For Q3 2016, the Company added 74.0 half-hours of third party produced titles with distribution rights (Q3 2015-nil). The proprietary production revenue was slightly below Management's expected range for quarterly pacing provided in the Q2 2016 MD&A. Management has revised its annual proprietary production revenue expectations slightly downward to reflect expected deliveries for the remainder of the year.

4

Distribution revenues: For Q3 2016, distribution revenues were down 21% to $23.93 million, from $30.48 million for Q3 2015, an uneven comparison as Q3 2015 distribution revenues included $12.78 million in streaming for Degrassi, approximately $6-8 million of which represented a catch up from calendar 2014. Management continues to see strong annual growth from new digital customers, platforms, and territories. For Q3 2016, amongst other key distribution deals for both linear and digital platforms, the Company closed significant deals with Buena Vista International, Sony, Super RTL, and Viacom, Inc. Also included in these figures are certain digital revenues such as advertising and subscription video on demand revenues, from multiple platforms including Amazon and YouTube (now unveiled as Wildbrain).

Television revenues: For Q3 2016, DHX Television revenues were down 23% to $15.73 million from $20.41 million from Q3 2015, and were within Management's expected range from the Q2 2016 MD&A. Approximately 92% or $14.49 million of the television revenues were subscriber revenues, while advertising, promotion, and digital revenues accounted for a combined 8% or $1.24 million of the total television revenues. Advertising and promotion revenues typically peak during the holiday season. Management has slightly reduced its annual revenue expectations for DHX Television.

M&L-owned revenues (including music and royalties): For Q3 2016, the M&L-owned revenues were $10.43 million, up 63% as compared to $6.40 million for Q3 2015. For Q3 2016, M&L-owned revenues included $3.65 million from the 22 city Canadian leg of The Next Step Wild Rhythm Tour, compared to Q3 2015, which included combined revenues of $1.96 million from The Next Step Live on Stage tour and Yo Gabba Gabba! Live! show. Excluding the live tour revenues, Management was very pleased with M&L-owned revenues for Q3 2016 which were up 52% as the Company continued to recognize revenues related to non-refundable minimum guarantees associated with Teletubbies, In The Night Garden, and Twirlywoos. M&L-owned revenues were above the mid-point of Management's quarterly expectations from the Q2 2016 MD&A based on the timing of recognition of certain minimum guarantees.

M&L-represented revenues: For Q3 2016, M&L-represented revenues were up $3.92 million to $7.42 million compared to Q3 2015 at $3.50 million, and were above the high end of Management's previously reported expectations from the Q2 2016 MD&A, driven mainly by the strong performance of our represented brands Despicable Me and Minions in several territories but also significant growth in Sesame Street, Dora the Explorer, The Pink Panther, and Jurassic World. As a result, Management has increased its annual revenue expectations.

Producer and service fee revenues: For Q3 2016, the Company earned $14.05 million for producer and service fee revenues, an increase of 71% versus the $8.21 million from Q3 2015, which was at the high end of Management's expectations and as a result management has increased its annual revenue expectations.

New media revenues: For Q3 2016, new media revenues were down $1.09 million or 71% to $0.44 million (Q3 2015-$1.53 million) based primarily on apps and games as the UMIGO project has now been completed, accounting for the decline in revenues.

5

Gross Margin

Gross margin for Q3 2016 was $50.51 million, an increase in absolute dollars of $5.72 million or 13% compared to $44.79 million for Q3 2015. The overall gross margin for Q3 2016 at 60% of revenue was above the mid-point of Management's quarterly expectations as reported in the Q2 2016 MD&A, the result of strong margins for DHX Television, which at 71% was above the high end of Management's expectations, and higher than expected margins for net producer and service fee revenues, offset by slightly lower than expected distribution margins and lower proprietary production margins as the product delivery mix contained a higher than normal percentage of live action shows, which typically carry lower margins. Gross margin for Q3 2016, including DHX Television, was calculated as revenues of $84.10 million, less direct production costs and expense of investment in film of $33.39 million and $0.20 million expense of book value of acquired libraries, (Q3 2015-$85.58 million less $39.36 million and less $1.43 million, respectively).

Operating Expenses (Income)

SG&A

SG&A costs for Q3 2016 increased 18% to $19.30 million compared to $16.36 million for Q3 2015. SG&A reflects increased levels of SG&A within DHX Brands and DHX Distribution as Management has continued to add resources in these areas to take advantage of the M&L opportunities associated with Teletubbies and Twirlywoos and the global expansion of digital distribution platforms, including opportunities in China. Resources have also been added, and will continue to be added, to grow the Company's recently announced Wildbrain Multi-Platform Kids' Network. The Q3 2016 SG&A also includes accruals for certain contractually required incentives, a direct result of the strong year-to-date performance of CPLG, the Company's M&L-represented business unit. SG&A includes $1.53 million (Q3 2015-$1.38 million) in non-cash share-based compensation, the result of the acceleration of the vesting of certain stock options based on performance. When adjusted, cash SG&A at $17.77 million was slightly above Management’s quarterly SG&A expectations.

Adjusted EBITDA

For Q3 2016, Adjusted EBITDA was $32.74 million, up $2.93 million or 10% over $29.80 million for Q3 2015.

Please see the "Use of Non-GAAP Financial Measures", "Reconciliation of Historical Results to Adjusted EBITDA", and “Reconciliation of Historical Results to Adjusted Net Income” sections of the Company’s Q3 2016 MD&A for the definition and calculation of Adjusted EBITDA and Adjusted Net Income.

6

About DHX Media Ltd.

DHX Media Ltd. (www.dhxmedia.com) is the world’s leading independent, pure-play kids’ content company. Owner of the world's largest independent library of kids' and family content, at more than 11,500 half-hours, DHX Media is recognized globally for such brands as Teletubbies, Yo Gabba Gabba!, Caillou, In the Night Garden, Inspector Gadget, Make It Pop, Slugterra and the multiple award-winning Degrassi franchise. DHX Media is comprised of four main business units: DHX Studios creates high-quality original entertainment at its Vancouver and Halifax animation studios, its Toronto live-action studio, and in working with top international producers; DHX Distribution is a major provider of content to the global market; DHX Television, home to the Family suite of channels, is dedicated to delivering best-in-class programming to Canadian families; and DHX Brands specializes in creating, building and managing high-profile global entertainment brands within the children's and young-adult markets. DHX Media also owns the full-service international licensing agency, Copyright Promotions Licensing Group Ltd. (CPLG), which represents numerous entertainment, sport and design brands. DHX Media has offices in 15 cities worldwide, including Toronto, Vancouver, Halifax, Los Angeles, London, Paris, Barcelona, Milan, Munich, Amsterdam and Beijing. The Company is listed on the NASDAQ Global Select Market under the ticker symbol DHXM, and on the Toronto Stock Exchange under the ticker symbols DHX.A and DHX.B.

Disclaimer

This press release contains “forward looking statements” under applicable securities laws with respect to DHX including, but not limited to, estimates with respect to the size of DHX’s library and growth thereof, statements regarding the Company’s production pipeline, the business strategies and operational activities of DHX, the use of proceeds from the Company’s recent bought deal public offering of common voting shares and variable voting shares and allocation of other resources of the Company, the markets and industries in which it operates, and the growth and financial and operating performance of DHX, its subsidiaries, and investments. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, such statements involve risks and uncertainties and are based on information currently available to the Company. Actual results or events may differ materially from those expressed or implied by such forward looking statements. Factors that could cause actual results or events to differ materially from current expectations, among other things, include risk factors discussed in materials filed with applicable securities regulatory authorities from time to time including matters discussed under "Risk Factors" in the Company's Annual Information Form and annual Management Discussion and Analysis, which also form part of the Company’s annual report on Form 40-F filed with the United States Securities and Exchange Commission. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

7

For more information, please contact:

Investor Relations:

Nancy Chan-Palmateer – Director, Investor Relations, DHX Media Ltd.

nancy.chanpalmateer@dhxmedia.com

+1 416-977-7358

Media Relations: 
Shaun Smith – Director, Corporate Communications, DHX Media Ltd. 
shaun.smith@dhxmedia.com
+1 416-977-7230

8

EX-99.2

Exhibit 99.2  

Q3 2016  

Management Discussion and Analysis

Of Financial Condition and Results of Operations

For the Three and Nine Months Ended March 31, 2016 ("Q3 2016") and March 31, 2015 ("Q3 2015")

(Unaudited)

MANAGEMENT DISCUSSION AND ANALYSIS

The following Management Discussion & Analysis (“MD&A”) prepared as of May 11, 2016, should be read in conjunction with DHX Media Ltd.’s (the “Company” or “DHX”) unaudited interim condensed consolidated financial statements and accompanying notes for the three and nine months ended March 31, 2016 and 2015, as well as the Company's latest annual MD&A ("2015 Annual MD&A") and audited financial statement for the years ended June 30,2015 and 2014 (as found on www.sedar.com or on DHX's website at www.dhxmedia.com). The unaudited interim condensed consolidated financial statements and accompanying notes for the three and nine months ended March 31, 2016 and 2015 have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

DHX is a public company incorporated under the Canadian Business Corporations Act whose Variable Voting Shares and Common Voting Shares are traded on the Toronto Stock Exchange (“TSX”), admitted on May 19, 2006, under the symbols DHX.A and DHX .B, respectively. On June 23, 2015, the Company's Variable Voting Shares commenced trading on the NASDAQ Global Trading Market (the "NASDAQ") under the symbol DHXM. Additional information relating to the Company can be found on its website at www.dhxmedia.com, on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml.

The Company prepares its financial statements in accordance with Canadian generally accepted accounting principles as set out in the CICA Handbook. In 2010, the CICA Handbook was revised to incorporate IFRS, and require publicly accountable enterprises to apply such standards effective for years beginning on or after January 1, 2011. Accordingly, the Company commenced reporting on this basis in its unaudited interim condensed consolidated financial statements for the first quarter of 2012 (three months ended September 30, 2011).

Figures in this MD&A are shown as millions (for example, $100,000 is shown as $0.10 million) and are approximate and have been rounded to the nearest ten thousand. Due to this rounding, some individual items, once totalled, may be slightly different than the corresponding total.

This MD&A contains certain forward-looking statements, which reflect DHX management’s (“Management”) expectations regarding the Company’s growth, results of operations, performance, and business prospects and opportunities.

Statements about the Company’s future plans and intentions, results, levels of activity, performance, goals or achievements, or other future events constitute forward-looking statements. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “pursue”, “continue”, “seek”, or “potential” or the negative or other variations of these words, or other similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management’s current beliefs and are based on information currently available to Management. Specific forward-looking statements in this document include, but are not limited to:

• the business strategies of DHX;

• the future financial and operating performance of DHX and its subsidiaries;

• the timing for implementation of certain business strategies and other operational activities of DHX; and

• the markets and industries, including competitive conditions, in which DHX operates.

Forward-looking statements involve significant risk, uncertainties, and assumptions. Many factors could cause actual results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this MD&A are based on what Management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this MD&A, and the Company assumes no obligation to update or revise them to reflect new events or circumstances. Many factors could cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, competitor activity, product capability and acceptance, international risk and currency exchange rates, and technology changes. An assessment of the risks that could cause actual results to materially differ from current expectations is contained in the “Risk Assessment” section of this MD&A and the 2015 Annual MD&A, as well as noted in the “Risk Factors” section of the Company’s most recent “Annual Information Form”.

The foregoing is not an exhaustive list and other risks are detailed from time to time in other continuous disclosure filings of the Company, including, among other filings, the Company’s recent “Management Information Circular”. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, or expected.

2

Business of the Company

DHX is the world leading independent creator, producer, distributor, licensor, and broadcaster of kids and family television and film productions. The Company was originally the result of the combination of The Halifax Film Company Limited (“Halifax Film”) and Decode Entertainment Inc. (“Decode”) during Fiscal 2006 and at the time of initial public offering. Since that time DHX has grown organically and through the following significant acquisitions:

• Studio B Productions (“Studio B”) on December 4, 2007;

• imX Communications Inc. (“imX”) on July 20, 2008;

• W!ldbrain Entertainment Inc. (“DHX Wildbrain”) on September 14, 2010;

• Cookie Jar Entertainment (“DHX Cookie Jar”) on October 22, 2012;

• Ragdoll Worldwide Ltd. (“Ragdoll”) on September 13, 2013;

• Epitome Pictures and related companies (“Epitome”) on April 3, 2014;

• Family Channel (“DHX Television”) on July 31, 2014;

• Certain assets of Echo Bridge Entertainment, LLC and affiliated companies ("Echo Bridge") on November 13, 2014; and

• Nerd Corps Entertainment Inc. ("Nerd Corps") on December 23, 2014.

The Company produces, distributes, broadcasts, and exploits the rights for television and film programming. DHX’s primary focus is on children’s, youth, and family (collectively “Children’s and Family”) productions because of the international sales potential and longer-term and multiple revenue streams that this genre of programming provides. Children’s and Family programming travels across cultures more easily than other genres and can therefore be sold into numerous markets, typically has a longer lifespan than other genres, and can be leveraged for library and distribution revenues and merchandising and licensing revenues.

DHX’s content library includes more than 11,500 half hours of award winning programming. DHX is recognized for  brands such as Caillou, Yo Gabba Gabba!, Inspector Gadget, Teletubbies, In the Night Garden, Johnny Test, Animal Mechanicals, Super WHY!, Degrassi, our new series' Make It Pop, and Slugterra. With the acquisition of DHX Television, the Company added broadcasting by acquiring the Family Channel (the"Family Channel"), including its multiplex feed known as Family Jr ("Family Jr"), the French-language Category B specialty television channel known as Télémagino ("Télémagino"), and the English-language Category B specialty television channel known as Family CHRGD ("Family CHRGD") (together, the "Family Channel Business"). DHX’s wholly owned European licensing brand representation agency business, Copyright Promotions Licensing Group, (“CPLG”), represents numerous entertainment, sport, and design brands. The Company’s prime-time production slate also includes notable achievements in the comedy genre, including the award-winning Canadian prime-time comedy series This Hour Has 22 Minutes, which is produced for the CBC and is in its 23^rd season. DHX has a global footprint and has offices in Toronto, Los Angeles, Vancouver, Halifax, London, Paris, Barcelona, Milan, Munich, and Amsterdam, among others.

Revenue Model

The Company earns revenues primarily from seven categories: 1) proprietary production, which includes Canadian and other rights proprietary programs, 2) distribution (including digital distribution) of its proprietary and third party acquired titles, 3) television (subscriber, advertising, and digital revenue) through DHX Television's ownership of the Family Channel Business, 4) merchandising and licensing (“M&L”) for owned brands and music and royalties (including, among others, Teletubbies, Yo Gabba Gabba!, Caillou, Johnny Test, In the Night Garden, and Twirlywoos), 5) M&L represented through CPLG, 6) producer and service fees, which includes production services for third parties, and 7) other revenues which also includes new media and mobile.

The Company is able to generate revenue from productions by licensing its initial broadcast rights and pre-licensing of territories for its programs. Production revenues include the initial broadcast license revenues and any pre-sales or advances included in the initial financing of the production of a film and television program. Once a production is completed and delivered, the program is included in the Company’s library of film and television programming. Further revenue from exploitation of the program is included in distribution revenue if it relates to television licenses and in M&L if it relates to royalties or revenues generated from non-television licenses. The Company also generates revenue from programs in which it retains Canadian and other limited participation rights and, in certain instances, from production services for productions whose copyright is owned by third parties.

Production Revenue

The Company derives proprietary production revenues, which includes other proprietary titles with Canadian and other rights, from the grant of initial broadcast rights for the initial showing of commissioned productions and pre-licensing of territories. These fees are typically collected partially upon commissioning of a production, during production, and finally once a completed production is delivered for broadcast, and at some point in time after delivery as a holdback (see note 3 of the audited consolidated financial statements for the years ended June 30, 2015 and 2014 for details on revenue recognition).

3

Distribution Revenue

The Company is able to retain or obtain the ownership rights to its proprietary, other proprietary titles, and third party acquired titles, which permits the Company to generate further revenues from the distribution of the Company’s productions. In addition to generating revenues from the sale of initial broadcast rights, the Company is able to concurrently generate revenues from the sale of broadcast rights in other jurisdictions and on other platforms (such as digital platforms, including, amongst others, YouTube, Amazon, and home entertainment) for specified periods of time. Distribution revenue also includes theatrical and other revenues generated on its feature films and movies of the week (“MOW’s”).

Television Revenue

The Company generates television revenues through DHX Television's ownership of Family Channel, Family Jr, Télémagino, and Family CHRGD. Family Channel and Family Jr are licensed as a pay television service and therefore derive revenues primarily through subscription fees earned by charging a monthly subscriber fee to various Canadian cable and satellite television distributors. Family CHRGD and Télémagino have specialty television licenses, which permit them to generate advertising revenues, but the majority of the revenues are subscriber fees. In addition to linear television, all four channels have multiplatform applications which allow for their content to be distributed both on-demand and streamed and are supported by popular and robust websites designed to engage viewers and support their loyalty to the brands. Traffic to the sites is monetized through advertising and sales sponsorships. Subscriber revenues account for 80-90% of the revenues for DHX Television.

Producer and Service Fee Revenue

Producer and service fee revenue includes revenue accounted for using the percentage of completion method for production service and corporate overhead fees earned for producing television shows and MOW’s for third parties.

M&L-Owned (Including Music and Other Royalties)

M&L for owned brands and other various licensing royalties includes revenues from DHX’s proprietary brands (among others, Teletubbies, Yo Gabba Gabba!, Caillou, Johnny Test, In the Night Garden, and Twirlywoos) and revenues earned on music publishing rights, music retransmission rights, and other royalties. M&L revenues for owned brands include non-refundable minimum guarantees associated with M&L deals, which the Company recognizes on a straight-line basis over the term of the deal, unless the underlying royalties exceed the minimum guarantee.

M&L-Represented

M&L-represented includes revenues earned from CPLG. CPLG is an agency business based in Europe that earns commissions on M&L from representing independently owned brands from film studios and other third parties.

Other Revenue

Other revenue includes new media revenues earned on new media and interactive games and apps, including mobile smartphones and tablets, and other revenue.

4

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The summary consolidated financial information set out below for the three and nine months ended March 31, 2016 and 2015 has been derived from the Company’s unaudited interim condensed consolidated financial statements and accompanying notes for the three and nine months ended March 31, 2016 and 2015, and can be found at www.sedar.com, DHX’s website at www.dhxmedia.com, or on EDGAR at www.sec.gov/edgar.shtml.

Each reader should read the following information in conjunction with those statements and the related notes.

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	March 31, 2016			March 31, 2015			March 31, 2016			March 31, 2015
($000, except per share data)
Consolidated Statements of Income and Comprehensive Income (Loss) Data:1
Revenues		84,095			85,582			229,485			192,869
Direct production costs and expense of film and television produced2		(33,388	)		(39,361	)		(96,589	)		(82,782	)
Expense of book value of acquired libraries		(195	)		(1,428	)		(3,540	)		(2,713	)
Gross margin3		50,512			44,793			129,356			107,374
Selling, general, and administrative		(19,304	)		(16,368	)		(54,925	)		(43,064	)
Write-down of certain investment in film and television programs		(450	)		(517	)		(950	)		(532	)
Amortization, finance and other expenses, net2,4		(19,783	)		(3,211	)		(38,672	)		(41,638	)
Recovery of (provision for) income taxes		(756	)		(6,666	)		(5,395	)		(6,303	)
Net income		10,219			18,031			29,414			15,837
Cumulative translation adjustment		(3,323	)		(4,260	)		(9,348	)		(9,470	)
Comprehensive income		6,896			13,771			20,066			6,367
Basic earnings per common share		0.08			0.15			0.24			0.13
Diluted earnings per common share		0.08			0.14			0.23			0.13
Weighted average common shares outstanding (expressed in thousands)
Basic		125,218			123,207			124,644			121,157
Diluted		126,218			126,098			126,361			124,202
Adjusted net income5		11,384			18,031			32,299			33,398
Basic adjusted earnings per common share5		0.09			0.15			0.26			0.28
Diluted adjusted earnings per common share5		0.09			0.14			0.26			0.27

	As at March 31, 2016		As at June 30, 2015
Consolidated Balance Sheet Data:
Cash and restricted cash		48,741		42,907
Investment in film and television programs		238,617		194,226
Total assets		902,312		808,238
Total liabilities		623,359		546,284
Shareholders' equity		278,953		261,954

¹The financial information for the three and nine months ended March 31, 2016 includes the full results for all of the Company's operations. The financial information for the three months ended March 31, 2015 includes the full results for all the Company's operations. The financial information for the nine months ended March 31, 2015 includes the full results for all of the Company's operations except: 1) DHX Television, which had only 243 days of activity; ii) the Echo Bridge assets, which were owned for 139 days; and iii) Nerd Corps, which had only 99 days of activity.

²Direct production costs and expense of film and television produced for three and nine months ended March 31, 2016 excludes the expense of acquired libraries $2,378 and $8,916, respectively (three and nine months ended March 31, 2015-$3,594 and $8,334, respectively) for the amortization recorded on the purchase price allocation bump to investment in film, which is included in Amortization, finance and other expenses, net.

³Certain of the comparative Non-GAAP Financial Measures (“NGFM”) are adjusted for all necessary adjustments, consisting of normal recurring adjustments and any changes in the current definition of NGFM (see “Use of Non-GAAP Financial Measures” section of this MD&A for further details).

⁴Other costs for the three and nine months ended March 31, 2016 include acquisition costs of $nil and $nil (March 31, 2015-$nil and $4,995, respectively).

⁵See "Reconciliation of Historical Results to Adjusted Net Income" section of this MD&A for the details of Adjusted Net Income. Basic adjusted earnings per common share is computed by dividing adjusted net income for three and nine months ended March 31, 2016 of $11,384 and $32,299, respectively (March 31, 2015-$18,031 and $33,398, respectively) by basic weighted average common shares outstanding of 125,218 and 124,644, respectively (March 31, 2015-123,207 and 121,157, respectively). Diluted adjusted earnings per common share is computed by dividing adjusted net income for three and nine months ended March 31, 2016 of $11,384 and $32,299, respectively (March 31, 2015-$18,031 and $33,398, respectively) by diluted weighted average common shares outstanding of 126,218 and 126,361, respectively (March 31, 2015-126,098 and 124,202, respectively).

5

Results for the nine months ended March 31, 2016 (“Nine Months 2016”) compared to the nine months ended March 31, 2015 (“Nine Months 2015”)

Revenues

Revenues for Nine Months 2016 were $229.50 million, up 19% from $192.87 million for Nine Months 2015. The increase for Nine Months 2016 was due to higher distribution revenues (97% organic, 3% acquisitive), accounting for 9% of the increase, strong growth in proprietary production revenues (96% organic, 4% acquisitive), accounting for 11% of the increase, strong growth in M&L-represented revenues (all organic), accounting for 32% of the increase, a significant increase in producer and service fee revenues (87% organic, 13% acquisitive), accounting for 50% of the increase, and an increase in M&L-owned revenues (93% organic, 7% acquisitive), accounting for 9% of the growth, offset by a decrease in DHX Television revenues, which included nine months of activity, versus eight months in Nine Months 2015, offsetting 8% of the growth, and a decrease in new media revenues (79% organic, 21% acquisitive), offsetting 3% of the growth.

Proprietary production revenues: Proprietary production revenues for Nine Months 2016 were $36.92 million, an increase of 12% (8% organic and 4% acquisitive) compared to $32.97 million for Nine Months 2015. For Nine Months 2016, the Company added 178.0 proprietary half-hours to the library, up 19% from 149.0 half-hours for Nine Months 2015. For the Nine Months 2016, the Company added 120 half-hours of third party produced titles with distribution rights (Nine Months 2015-nil). The proprietary production revenue was just slightly below Management's quarterly pacing provided in the Q2 2016 MD&A. Overall proprietary deliveries are expected to track to previously reported annual expectations (see delivery chart below for further details).

6

The breakdown for content library deliveries (including proprietary deliveries and deliveries on distribution rights for third party produced titles) and dollar value subtotals per category for Nine Months 2016 and Nine Months 2015 was as follows:

		Nine Months 2016				Nine Months 2015
Category and Title	Season or Type	$ Million		Half-hours		$ Million		Half-hours
Children's and Family:
Proprietary
Airmageddon	I				11
The Deep	I				18				—
Degrassi	XIV				—				28
Degrassi	XV				20				—
Dr. Dimensionpants	I				—				6
Endangered Species	II				—				6
Hank Zipzer	II				—				13
Hank Zipzer	III				13				—
Inspector Gadget	I				—				26
Kate & Mim-Mim	II				5
Looped	I				—				20
Make It Pop	I				—				4
Make It Pop	II				21				—
Open Heart	I				—				12
The Other Kingdom	I				13
Slugterra	III				11				—
Slugterra	IV				1
Supernoobs	I				26				—
Teletubbies	I				15				—
You & Me	I				—				13
Subtotals		$	32.30		154	$	28.64		128
Third Party Produced Titles with Distribution Rights
Backstage					16				—
Fangbone					9				—
Gaming Show					21				—
Kuu Kuu Harajuku					12				—
Messy Goes to Okido					22				—
Rainbow Ruby					12				—
Super Why!					14				—
Topsy & Tim					2				—
Twirlywoos					10				—
Subtotals			—		118		—		—
Total Children's and Family		$	32.30		272	$	28.64		128
Comedy:
Proprietary
This Hour Has 22 Minutes	XXII				—				21
This Hour Has 22 Minutes	XXIII				24				—
Subtotals		$	4.62		24	$	4.33		21
Third Party Produced Titles with Distribution Rights
Body Buds					1				—
Disorderly					1				—
Subtotals					2				—
Total Comedy		$	4.62		26	$	4.33		21
Total Proprietary		$	36.92		178	$	32.97		149
Total Third Party Produced Titles with Distribution Rights			—		120		—		—
		$	36.92		298	$	32.97		149

7

Distribution revenues: For Nine Months 2016, distribution revenues were up 6% to $56.54 million (3% organic and 3% acquisitive), from $53.24 million for Nine Months 2015, primarily due to the continuing growth of new digital customers, platforms, and territories. The results for Nine Months 2016 continued to benefit somewhat from the weakness in the Canadian dollar relative to the USD and GBP, although this gap has narrowed as the Canadian dollar had a strong recovery in Q3 2016. For Nine Months 2016, the Company closed significant deals, among others previously announced, as follows: DirectTV Digital LLC, Hessischer Rundfunk, Lagardere Thematiques ,Netlflix, OTT Pacifico, Turner Broadcasting Corporation, Zhejiang Tmall Network Co., Ltd (Alibaba). Also included in these figures are advertising and subscription video on demand (“VOD”) revenues, from multiple platforms, including Amazon and YouTube. The gross revenue from the Company's Wildbrain subsidiary unveiled on April 25, 2016 (formerly known as Google (YouTube.com) relationship) for Nine Months 2016 was $12.78 million, up 38% versus Nine Months 2015 $9.24 million).

Television revenues: For Nine Months 2016, television revenues were $53.33 million compared to $56.31 million for Nine Months 2015, which included the 8 month period from July 31, 2014 through March 31, 2015, The results were near the mid-point of Management's previously reported expectations for DHX Television as reported in the Q2 2016 MD&A. Approximately 88% or $46.76 million of the television revenues were subscriber revenues, while advertising, promotion, and digital revenues accounted for a combined 12% or $6.56 million of the total television revenues.

M&L-owned revenues (including music and royalties): For Nine Months 2016, M&L-owned revenues increased 21% (13% organic and 8% acquisitive) to $19.49 million (Nine Months 2015-$16.06 million). For Nine Months 2016, the Company also recognized revenues of $3.65 million associated with the combination of the 2015 Big Ticket Concert tour and the Canadian leg of The Next Step Wild Rhythm Tour, a drop of 33%, versus $5.44 million in Nine Months 2015 for Yo Gabba Gabba! Live! and The Next Step Live on Stage tours (see "Live Tours Update" section for further details). Excluding the live tour revenues, M&L-owned revenues for Nine Months 2016 were up 5.21 million or 49% from Nine Months 2015 as the Company continued to see acceleration and recognized revenues related to non-refundable minimum guarantees associated with Telebubbies, In The Night Garden, and Twirlywoos. These results were consistent with Management's quarterly pacing expectations as reported in the Q2 2016 MD&A and Management was very pleased with the strong growth in the non-live tour M&L-owned revenues

M&L-represented revenues: For Nine Months 2016, M&L-represented revenue was $21.25 million up 122% (all organic) overall (Nine Months 2015-$9.56 million) and were well above the high end of Management's previously reported expectations, driven mainly by the exceptional performance of our represented brands Despicable Me and Minions in several territories, and also significant growth in Sesame Street, Dora the Explorer, The Pink Panther, and Jurassic World. The results also benefited somewhat from weakness in the Canadian dollar compared to the GBP.

Producer and service fee revenues: For Nine Months 2016, the Company earned $39.84 million for producer and service fee revenues, an increase of 86% (62% organic and 24% acquisitive) versus the $21.47 million for Nine Months 2015, and above mid-point of Management's previously reported expectations from the Q2 2016 MD&A. This increase was a result of a combination of the acquisition of Nerd Corps and strong global demand for children's content.

New media and rental revenues: For Nine Months 2016, new media revenues decreased 35% ((49)% organic and 14% acquisitive) to $2.13 million (Nine Months 2015-$3.26 million) based primarily on apps, games, and the final UMIGO deliverables.

Gross Margin

Gross margin for Nine Months 2016 was $129.36 million, an increase in absolute dollars of $21.99 million or 20% compared to $107.37 million for Nine Months 2015. The overall gross margin for Nine Months 2016 at 56% of revenue was near the mid-point of Management's previously reported expectations from the Q2 2016 MD&A, driven by slightly lower than expected distribution gross margins and proprietary production gross margins, offset by stronger than expected gross margins for DHX Television and net producer and service fees. Gross margin for Nine Months 2016 was calculated as revenues of $229.49 million, less direct production costs and expense of investment in film of $96.59 million and $3.54 million expense of book value of acquired libraries, (Nine Months 2015-$192.87 million less $82.78 million and less $2.71 million, respectively).

For Nine Months 2016, the margins for each revenue category in absolute dollars and as a margin percentage were as follows: production revenue margin of $11.84 million or 32%, net producer and service fee revenue margin of $18.82 million or 47%, distribution revenue margin of $30.68 million or 54% ($21.76 million or 38% when the remaining $8.92 million for the expense of acquired libraries below the line is considered), M&L-owned margin was $11.77 million or 60%, M&L-represented revenue margin was $21.25 million or 100%, and new media margin of $1.22 million or 57%. Gross margins for DHX Television was $33.79 million or 63%, calculated as revenue of $53.33 million less programming costs, third party content fees, and other direct creative costs of $19.54 million. DHX Television margins at 63% for the Nine Months 2016 were towards the high end of Management's previously reported expectations from the Q2 2016 MD&A for this stage of the rebranding and were a direct result of lower external content costs.

8

Production margin at 32%, varies on product delivery mix and was within Management’s quarterly expectations, albeit below the mid-point as the product delivery mix contained a higher percentage of live action titles than normal. Producer and service fee margins can vary greatly and at 47% (as compared to 37% for Nine Months 2015) were above the high end of Management’s expectations and have been positively impacted by the weakness in the Canadian dollar. Distribution margin can fluctuate greatly from title-to-title and at 54% was below the low end of Management’s expectations as the product mix for the Nine Months 2016 contained a higher than expected weighting towards newer titles, which typically carry lower gross margins than library sales. It does, however, continue to bode well for future margins and for additional sales as the newer titles are in high demand.

Operating Expenses (Income)

SG&A

SG&A costs for Nine Months 2016 were up 28% at $54.93 million compared to $43.06 million for Nine Months 2015. For Nine Months 2016, SG&A includes all of the SG&A associated with the DHX Television, Echo Bridge, and Nerd Corps acquisitions. SG&A also reflects increased levels of SG&A within DHX Brands and DHX Distribution as Management has continued to add resources in these areas to take advantage of the M&L opportunities associated with Teletubbies and Twirlywoos and the global expansion of digital distribution platforms, including opportunities in China. Resources have also been added, and will continue to be added, to grow the Company's recently announced Wildbrain Multi-Platform Kids' Network. SG&A also includes $4.44 million in non-cash share-based compensation (Nine Months 2015-$3.09 million). When adjusted, cash SG&A at $50.49 million was just above the top end of Management’s Nine Months 2016 SG&A expectations from the Q2 2016 MD&A.

Amortization and Expense of Acquired Libraries

For Nine Months 2016, amortization and expense of acquired libraries was up 25% to $19.53 million (Nine Months 2015-$15.57 million). For Nine Months 2016, the expense of acquired libraries was up to $8.92 million due to the Cookie Jar, Ragdoll, Epitome, Echo Bridge, and Nerd Corps acquisitions (Nine Months 2015-$8.33 million). This expense is shown below the line as it relates to the library titles that have a maximum 20 year life for expense purposes, have minimal ongoing cash costs associated with selling, and are viewed as long-term assets [note-the balance of expense of acquired library of $3.54 million (Nine Months 2015-$2.71 million) is shown as a reduction of gross margin noted above]. For Nine Months 2016, amortization of P&E was $3.26 million primarily due to the Epitome, DHX Television, and Nerd Corps acquisitions (Nine Months 2015-$2.46 million). For Nine Months 2016, amortization of intangible assets was up 54% to $7.35 million primarily due to the Epitome, DHX Television, and Nerd Corps acquisitions (Nine Months 2015-$4.77 million).

Development Expenses and Other Charges and Tangible Benefit Obligation

During Nine Months 2016, there was $4.12 million for development expenses and other charges (Nine Months 2015-$16.93 million), which was made up of $0.77 million in severance and other integration costs and $3.35 million related to the previously disclosed rebranding of the DHX television channels. The Company recorded $nil for Tangible Benefit Obligation Expense (Nine Months 2015-$14.22 million).

Write-down of Certain Investments in Film and Television Programs

During Nine Months 2016, there was $0.95 million recorded for write-down of certain investments in film and television programs (Nine Months 2015-$0.53 million).

Acquisition Costs

During Nine Months 2016, there was $nil for acquisition costs (Nine Months 2015-$5.00 million for DHX Television, Echo Bridge, and Nerd Corps).

Finance Income (Expense)

For Nine Months 2016, the Company recorded net finance expense of $15.03 million versus $4.15 million net finance expense for Nine Months 2015. Nine Months 2016 net finance expense consists of $13.88 million for interest on long-term debt and capital leases (Nine Months 2015-$10.43 million), $0.41 million for finance and bank charges including interest on the revolving line of credit (Nine Months 2015-$1.15 million), a debt extinguishment charge of $nil, being the pro-rata share of the unamortized debt issue costs recorded at the time of repayment of the Amended Term Facility (see "Senior Unsecured Notes" section of the MD&A for more details) (Nine Months 2015-$3.91 million), changes to the debt premium of the Senior Unsecured Notes of $0.02 million (Nine Months 2015-$(0.09) million), accretion on the tangible benefit obligation of $0.63 million (Nine Months 2015-$0.58 million), and changes in the fair value of the redemption option on the Senior Unsecured Notes of $1.00 million (Nine Months 2015-$(1.34) million), offset by finance income of $0.26 million (Nine Months 2015-$0.22 million) and a foreign exchange gain of $0.65 million (Nine Months 2015-$10.28 million).

Adjusted EBITDA

For Nine Months 2016, Adjusted EBITDA was $78.87 million, up $11.47 million or 17% over $67.40 million for Nine Months 2015. Please see the "Use of Non-GAAP Financial Measures" and "Reconciliation of Historical Results to Adjusted EBITDA" sections of this MD&A for the definition and calculation of Adjusted EBITDA.

9

Income Taxes

Income tax for Nine Months 2016 was an expense of $5.40 million (Nine Months 2015-$6.30 million tax expense) made up of $11.54 million expense (Nine Months 2015-$12.78 million expense) for current income tax and deferred income tax recovery of $6.14 million (Nine Months 2015-$6.48 million recovery). During Nine Months 2016, the Company completed a reorganization of certain of its operations. Going forward, the Company expects its effective tax rate to revert to historical norms.

Net Income (Loss) and Comprehensive Income (Loss)

For Nine Months 2016 net income was $29.41 million ($0.24 basic and diluted earnings per share), compared to net income of $15.84 million ($0.13 basic and diluted income per share) for Nine Months 2015, an increase of $13.57 million in absolute dollars. For Nine Months 2016, net income adjusted was $32.30 million, or $0.26 adjusted basic and adjusted diluted earnings per share, adjusted for identified charges totaling $2.89 million (net of $1.24 million tax effect). Net income adjusted is down (3)% as compared to $33.40 million adjusted net income for Nine Months 2015 adjusted identified charges of $17.57 million (net of $7.46 million tax effect) or $0.28 adjusted basic and $0.27 diluted earnings per share. Please see the "Use of Non-GAAP Financial Measures" and "Reconciliation of Historical Results to Adjusted Net Income" sections of this MD&A.

Comprehensive income for Nine Months 2016 was $20.07 million, compared to comprehensive income of $6.37 million for Nine Months 2015, or an increase of $13.70 million in absolute dollars.

10

SELECTED CONSOLIDATED QUARTERLY FINANCIAL INFORMATION

The following table sets out selected consolidated financial information for each of the last eight quarters with the last one being the most recent quarter ended March 31, 2016. In the opinion of Management, this information has been prepared on the same basis as the audited consolidated financial statements for the years ended June 30, 2015 and 2014 as filed on www.sedar.com, DHX’s website at www.dhxmedia.com, or on EDGAR at www.sec.gov/edgar.shtml, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the unaudited quarterly results when read in conjunction with the audited consolidated financial statements and the notes to those statements. The operating results for any quarter should not be relied upon as an indication of results for any future period.

	Fiscal 20161						Fiscal 20151									Fiscal 20141
	Q3		Q2		Q1		Q4		Q3		Q2		Q1			Q4
(All numbers are in thousands	31-Mar		31-Dec		30-Sep		30-Jun		31-Mar		31-Dec		30-Sep			30-Jun
except per share data)	$		$		$		$		$		$		$			$
Revenue		84,095		81,480		63,910		71,170		85,582		64,256		43,031			29,745
Gross Margin2		50,512		44,287		34,557		37,666		44,793		37,507		25,074			18,864
Adjusted EBITDA2 & 3		32,736		27,759		18,372		22,810		29,803		23,869		13,727			10,192
Net Income (Loss)		10,219		11,671		7,524		3,696		18,031		5,539		(7,733	)		1,040
Adjusted Net Income2		11,384		12,594		8,321		5,006		18,031		9,832		5,535			2,551
Comprehensive Income (Loss)		6,896		9,476		3,694		6,014		13,771		3,222		(10,626	)		2,197
Basic Earnings (Loss) Per Common Share4		0.08		0.09		0.06		0.03		0.15		0.05		(0.06	)		0.01
Diluted Earnings (Loss) Per Common Share4		0.08		0.09		0.06		0.03		0.14		0.04		(0.06	)		0.01
Adjusted Basic Earnings Per Common Share5		0.09		0.10		0.07		0.04		0.15		0.08		0.05			0.02
Adjusted Diluted Earnings Per Common Share5		0.09		0.10		0.07		0.04		0.14		0.08		0.05			0.02

¹The financial information for Q3 2016, Q2 2016, Q1 2016, Q4 2015, and Q3 2015 includes the full results for all of the Company’s operations. The financial information for the Q2 2015 includes the full results for all of the Company’s operations except: i) the Echo Bridge assets, which were owned for 49 days; and ii) Nerd Corps, which had only 9 days of activity. The financial information for Q1 2015 includes financial information for all operations except DHX Television, which only had 61 days of activity, and the Echo Bridge assets and Nerd Corps, as this was prior to these acquisitions. The financial information for Q4 2014 includes the full results for all the Company's operations except Epitome, which only had 89 days of financial activity, and DHX Television, the Echo Bridge assets, and Nerd Corps, as this was prior to these acquisitions.

²Certain of the comparative Non-GAAP Financial Measures (“NGFM”) are adjusted for all necessary adjustments, consisting of normal recurring adjustments and any changes in the current definition of NGFM (see “Use of Non-GAAP Financial Measures” section of this MD&A for further details) (also see the “Reconciliation of Historical Results to Adjusted EBITDA” and "Reconciliation of Historical Results to Adjusted Net Income") sections of this MD&A).

³Adjusted EBITDA is calculated as outlined in the “Use of Non-GAAP Financial Measures” and “Reconciliation of Historical Results to Adjusted EBITDA” sections of this MD&A as management believes the adjusted figures to be a more meaningful indicator of operating performance. A detailed reconciliation of Adjusted EBITDA for each period can be found in the "Reconciliation of Historical Results to Adjusted EBITDA" section of the MD&A for each respective period.

⁴Note for Fiscal 2015 basic earnings per common share is $0.16 and diluted earnings per common share is $0.16, however due to rounding Q1-Q4 2015 sums to $0.17 and $0.15, respectively.

⁵Basic adjusted and diluted adjusted earnings per share for Q3 2016 has been calculated by adding back identified charges of $1.17 million (net of tax effect of $0.50 million); Q2 2016 has been adjusted by identified charges of $0.92 million (net of tax effect of $0.40 million); Q1 2016 has been adjusted by identified charges of $0.80 million (net of tax effect of $0.34 million); Q4 2015 has been adjusted by acquisition costs and identified charges of $1.31 million (net of tax effect of $0.48 million); Q3 2015 does not contain any adjustments for identified charges; Q2 2015 - acquisition costs and identified charges of $1.48 million (net of $0.40 million tax recovery) and a debt extinguishment charge of $2.82 million (net of a tax effect of $1.10 million); Q1 2015 - acquisition costs and identified charges of $2.82 million (net of $1.10 million tax effect) and tangible benefit obligation expense of $10.45 million (net of tax effect of $3.77 million); Q4 2014 - acquisition costs and identified charges of $1.50 million (net of $0.68 million tax effect) to the period net income and dividing by the number of weighted average common shares outstanding for basic and diluted for each quarter (Q3 2016 - 125,218 and 126,218; Q2 2016 - 124,734 and 126,508; Q1 2016 - 123,987 and 126,290; Q4 2015 - 123,459 and 126,147; Q3 2015 - 123,207 and 126,098; Q2 2015 - 120,414 and 123,602; Q1 2015 - 119,894 and 122,969; and Q4 2014 - 119,585 and 122,485, respectively).

11

Results for the three months ended March 31, 2016 (“Q3 2016”) compared to the three months ended March 31, 2015 (“Q3 2015”)

Revenues

Revenues for Q3 2016 were $84.10 million, down 2% from $85.58 million for Q3 2015. The decrease in Q3 2016 was largely a result of Q3 2015 distribution revenues having included $12.78 million in streaming revenues for Degrassi, approximately $6-8 million of which represented a catch up from calendar 2014. A detailed review of each source of revenue is included below.

Proprietary production revenues: Proprietary production revenues for Q3 2016 were $12.11 million, a decrease of 20% compared to $15.05 million for Q3 2015, partially a result of certain titles being delivered early in Q2 2016, as noted in the Q2 2016 MD&A. For Q3 2016, the Company added 63.0 proprietary half-hours to the library up 5% versus 60.0 proprietary half-hours for Q3 2015. For Q3 2016, the Company added 74.0 half-hours of third party produced titles with distribution rights (Q3 2015-nil). The proprietary production revenue was slightly below Management's expected range for quarterly pacing provided in the Q2 2016 MD&A. Management has revised its annual proprietary production revenue expectations slightly downward to reflect expected deliveries for the remainder of the year (see delivery chart below for further details).

12

The breakdown for content library deliveries (including proprietary deliveries and deliveries on Distribution rights for third party produced titles) and dollar value subtotals per category for Q3 2016 and Q3 2015 was as follows:

		Q3 2016				Q3 2015
Category and Title	Season or Type	$ Million		Half-hours		$ Million		Half-hours
Children's and Family:
Proprietary
Airmageddon	I				11				—
The Deep	I				6				—
Degrassi	XIV				—				9
Endangered Species	II				—				5
Hank Zipzer	III				5				—
Inspector Gadget	I				—				10
Kate & Mim-Mim	II				5				—
Looped	I				—				12
Make it Pop!	I				—				4
Make it Pop!	II				8				—
Open Heart	I				—				10
The Other Kingdom	I				13				—
Slugterra	IV				1				—
Supernoobs	I				2				—
Subtotals		$	9.98		51	$	12.88		50
Third Party Produced Titles with Distribution Rights
Backstage					11				—
Fangbone					7				—
Gaming Show					15				—
Kuu Kuu Harajuku					11				—
Messy Goes to Okido					10				—
Rainbow Ruby					10				—
Twirlywoos					10				—
Subtotals			—		74		—		—
Total Children's and Family		$	9.98		125	$	12.88		50
Comedy:
Proprietary
This Hour Has 22 Minutes	XXII				—				10
This Hour Has 22 Minutes	XXIII				12				—
Total Comedy		$	2.13		12	$	2.17		10
Total Proprietary		$	12.11		63	$	15.05		60
Total Third Party Produced Titles with Distribution Rights			—		74		—		—
		$	12.11		137	$	15.05		60

Distribution revenues: For Q3 2016, distribution revenues were down 21% to $23.93 million, from $30.48 million for Q3 2015, an uneven comparison as Q3 2015 distribution revenues included $12.78 million in streaming for Degrassi, approximately $6-8 million of which represented a catch up from calendar 2014. Management continues to see strong annual growth from new digital customers, platforms, and territories. For Q3 2016, amongst other key distribution deals for both linear and digital platforms, the Company closed significant deals with Buena Vista International, Sony, Super RTL, and Viacom, Inc. Also included in these figures are certain digital revenues such as advertising and subscription video on demand ("VOD") revenues, from multiple platforms including Amazon and YouTube (now unveiled as Wildbrain).

Television revenues: For Q3 2016, DHX Television revenues were down 23% to $15.73 million from $20.41 million from Q3 2015, and were within Management's expected range from the Q2 2016 MD&A. Approximately 92% or $14.49 million of the television revenues were subscriber revenues, while advertising, promotion, and digital revenues accounted for a combined 8% or $1.24 million of the total television revenues. Advertising and promotion revenues typically peak during the holiday season. Management has slightly reduced its annual revenue expectations for DHX Television. See "DHX Television Update" section for additional details.

13

M&L-owned revenues (including music and royalties): For Q3 2016, the M&L-owned revenues were $10.43 million, up 63% as compared to $6.40 million for Q3 2015. For Q3 2016, M&L-owned revenues included $3.65 million from the 22 city Canadian leg of The Next Step Wild Rhythm Tour, compared to Q3 2015, which included combined revenues of $1.96 million from The Next Step Live on Stage tour and Yo Gabba Gabba! Live! show. Excluding the live tour revenues, Management was very pleased with M&L-owned revenues for Q3 2016 which were up 52% as the Company continued to recognize revenues related to non-refundable minimum guarantees associated with Teletubbies, In The Night Garden, and Twirlywoos. M&L-owned revenues were above the mid-point of Management's quarterly expectations from the Q2 2016 MD&A based on the timing of recognition of certain minimum guarantees.

M&L-represented revenues: For Q3 2016, M&L-represented revenues were up $3.92 million to $7.42 million compared to Q3 2015 at $3.50 million, and were above the high end of Management's previously reported expectations from the Q2 2016 MD&A, driven mainly by the strong performance of our represented brands Despicable Me and Minions in several territories but also significant growth in Sesame Street, Dora the Explorer, The Pink Panther, and Jurassic World. As a result, Management has increased its annual revenue expectations.

Producer and service fee revenues: For Q3 2016, the Company earned $14.05 million for producer and service fee revenues, an increase of 71% versus the $8.21 million from Q3 2015, which was at the high end of Management's expectations and as a result management has increased its annual revenue expectations.

New media revenues: For Q3 2016, new media revenues were down $1.09 million or 71% to $0.44 million (Q3 2015-$1.53 million) based primarily on apps and games as the UMIGO project has now been completed, accounting for the decline in revenues.

Gross Margin

Gross margin for Q3 2016 was $50.51 million, an increase in absolute dollars of $5.72 million or 13% compared to $44.79 million for Q3 2015. The overall gross margin for Q3 2016 at 60% of revenue was above the mid-point of Management's quarterly expectations as reported in the Q2 2016 MD&A, the result of strong margins for DHX Television, which at 71% was above the high end of Management's expectations, and higher than expected margins for net producer and service fee revenues, offset by slightly lower than expected distribution margins and lower proprietary production margins as the product delivery mix contained a higher than normal percentage of live action shows, which typically carry lower margins. Gross margin for Q3 2016, including DHX Television, was calculated as revenues of $84.10 million, less direct production costs and expense of investment in film of $33.39 million and $0.20 million expense of book value of acquired libraries, (Q3 2015-$85.58 million less $39.36 million and less $1.43 million, respectively).

For Q3 2016, the margins for each revenue category in absolute dollars and as a margin percentage were as follows: production revenue margin of $3.47 million or 29%, net producer and service fee revenue margin of $8.03 million or 57%, distribution revenue margin of $13.69 million or 57% ($11.32 million or 47% when the remaining $2.38 million for the expense of acquired libraries below the line is removed), television margin was $11.16 million or 71%, M&L-owned margin was $6.34 million or 61%, M&L-represented revenue margin was $7.42 million or 100%, and new media margin of $0.40 million or 91%.

Operating Expenses (Income)

SG&A

SG&A costs for Q3 2016 increased 18% to $19.30 million compared to $16.36 million for Q3 2015. SG&A reflects increased levels of SG&A within DHX Brands and DHX Distribution as Management has continued to add resources in these areas to take advantage of the M&L opportunities associated with Teletubbies and Twirlywoos and the global expansion of digital distribution platforms, including opportunities in China. Resources have also been added, and will continue to be added, to grow the Company's recently announced Wildbrain Multi-Platform Kids' Network. The Q3 2016 SG&A also includes accruals for certain contractually required incentives, a direct result of the strong year-to-date performance of CPLG, the Company's M&L-represented business unit. SG&A includes $1.53 million (Q3 2015-$1.38 million) in non-cash share-based compensation, the result of the acceleration of the vesting of certain stock options based on performance. When adjusted, cash SG&A at $17.77 million was slightly above Management’s quarterly SG&A expectations.

Amortization and Expense of Acquired Libraries

For Q3 2016, amortization and expense of acquired libraries was down 10% to $6.32 million (Q3 2015-$7.03 million). For Q3 2016, the expense of acquired libraries was $2.38 million, primarily due to the Cookie Jar, Epitome, Ragdoll, Echo Bridge, and Nerd Corps acquisitions (Q3 2015-$3.59 million). This expense is shown below the line as it relates to the library titles that have a maximum 20 year life for expense purposes, have minimal ongoing cash costs associated with selling, and are viewed as long-term assets [note-the balance of expense of acquired library of $0.20 million (Q3 2015-$1.43 million), relating to the book value of the investment in film upon acquisition, is shown as a reduction of gross margin noted above]. For Q3 2016, amortization of P&E was up 24% to $1.07 million primarily due to the Epitome, DHX Television, and Nerd Corps acquisitions (Q3 2015-$0.86 million). For Q3 2016, amortization of intangible assets was up 12% to $2.87 million primarily due to the Epitome, DHX Television, Ragdoll, and Nerd Corps acquisitions (Q3 2015-$2.57 million, Cookie Jar, Ragdoll, Epitome, and DHX Television only).

14

Development Expenses and Other Charges and Tangible Benefit Obligation

During Q3 2016, there was $1.67 million recorded for development expenses and other charges (Q3 2015-$0.81 million), which related entirely to rebranding of the DHX Television channels, which was made up of $0.37 million in severance and other integration costs and $1.30 million related to the rebranding of the DHX Television channels.

Write-down of Certain Investments in Film and Television Programs

During Q3 2016, there was $0.45 million recorded for write-down of certain investments in film and television programs (Q3 2015-$0.52 million).

Acquisition Costs

During Q3 2016, there was $nil recorded for acquisition costs (Q3 2015-$nil for Echo Bridge and Nerd Corps).

Finance Income (Expense)

For Q3 2016, the Company recorded net finance expense of $11.81 million versus $4.62 million net finance income for Q3 2015, largely a result of incurring a net foreign exchange loss of $6.00 million, versus a net foreign exchange gain of $7.98 million in Q3 2015, as the Canadian dollar rose swiftly in Q3 2016. As previously noted, the Company completed a reorganization of certain of its operations, which is expected to reduce the Company's accounting exposure to foreign exchange gains and losses on a go forward basis. Q3 2016 net finance expense consists of $5.37 million for interest costs on long-term debt and capital leases (Q3 2015-$4.06 million), $0.12 million for finance and bank charges including interest on the revolving line of credit (Q3 2015-$0.26 million), accretion on the tangible benefit obligation of $0.17 million (Q3 2015-$0.22 million), a foreign exchange loss of $6.00 million (Q3 2015-$7.98 million foreign exchange gain), changes in the fair value of the redemption option on the Senior Unsecured Notes of $0.25 million (Q3 2015-$1.07 million), and amortization of debt premiums of $0.01 million (Q3 2015-$(0.07) million), offset by finance income of $0.10 million (Q3 2015-$0.04 million).

Adjusted EBITDA

For Q3 2016, Adjusted EBITDA was $32.74 million, up $2.93 million or 10% over $29.80 million for Q3 2015. Please see the "Use of Non-GAAP Financial Measures" and "Reconciliation of Historical Results to Adjusted EBITDA" sections of this MD&A for the definition and calculation of Adjusted EBITDA.

Income Taxes

Income tax for Q3 2016 was an expense of $0.76 million (Q3 2015-$6.67 million tax expense) made up of $3.70 million expense (Q3 2015-$4.63 million expense) for current income tax and deferred income tax recovery of $2.94 million (Q3 2015-$2.04 million expense). During Q3 2016, the Company completed a reorganization of certain of its operations. Going forward, the Company expects its effective tax rate to revert to historical norms.

Net Income and Comprehensive Income

For Q3 2016 net income was $10.22 million ($0.08 basic and diluted earnings per share), compared to net income of $18.03 million ($0.15 basic and $0.14 diluted earnings per share) for Q3 2015, or a decrease of $7.81 million, or 43%. For Q3 2016, net income adjusted was $11.38 million or $0.09 adjusted basic and $0.09 adjusted diluted earnings per share, adjusted for identified charges of $1.17 million (net of $0.50 million tax effect), as compared to $18.03 million adjusted net income for Q3 2015 adjusted for identified charges of $nil (net of $nil tax effect) or $0.15 adjusted basic and $0.14 adjusted diluted earnings per share. Please see the "Use of Non-GAAP Financial Measures" and "Reconciliation of Historical Results to Adjusted Net Income" sections of this MD&A.

Comprehensive income for Q3 2016 was $6.90 million, compared to comprehensive income of $13.77 million for Q3 2015, or a decrease of $6.88 million, or 50%.

15

Liquidity and Capital Resources	March 31,		June 30,
	2016		2015
	$		$
	(Amounts in Thousands, Except Balance Sheet Ratios)
Key Balance Sheet Amounts and Ratios:
Cash and restricted cash		48,741		42,907
Long-term assets		395,020		370,951
Working capital		228,055		198,162
Long-term  and other liabilities		344,122		307,159
Working capital ratio (1)		1.82		1.83

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	March 31, 2016			March 31, 2015			March 31, 2016			March 31, 2015
	$			$			$			$
Cash Inflows (Outflows) by Activity:
Operating activities		2,551			20,095			(28,816	)		20,948
Financing activities		(11,817	)		(6,106	)		52,400			197,019
Investing activities		(2,074	)		(9,143	)		(18,100	)		(212,716	)
Effect of foreign exchange rate changes on cash		(480	)		335			350			607
Net cash inflows (outflows)		(11,820	)		5,181			5,834			5,858
Adjusted Operating Activities (2)		1,980			23,188			(4,756	)		34,507

(1) Working capital ratio is current assets divided by current liabilities (see the unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 2016 and 2015).

(2) See “Use of Non-GAAP Financial Measures” section of this MD&A for a definition of Adjusted Operating Activities. Certain of the past period figures for Adjusted Operating Activities may differ from the previously filed MD&A's due to Management's decision to change the definition of this calculation in 2015. Adjusted Operating Activities includes changes in bank indebtedness which Management believes relate to operations. Cash inflows from Adjusted Operating Activities are calculated as follows:

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	March 31, 2016			March 31, 2015			March 31, 2016			March 31, 2015
Operating activities		2,551			20,095			(28,816	)		20,948
Proceeds from (repayment of) bank indebtedness		(5,815	)		(1,700	)		3,358			(4,930	)
Proceeds from (repayment of) interim production financing		5,244			4,755			20,702			3,879
Decrease in restricted cash		—			38			—			4
Exclude effect of capital transaction on bank indebtedness		—			—			—			10,310
Acquisition costs, net of estimated taxes		—			—			—			4,296
Adjusted Operating Activities		1,980			23,188			(4,756	)		34,507

*Certain of the 2015 comparative figures have been adjusted to conform to the 2016 definitions.

Changes in Cash

Cash at March 31, 2016 was $48.74 million, as compared to $60.56 million and $42.91 million at December 31, 2015 and June 30, 2015, respectively.

For nine months ended March 31, 2016, cash flows used in operating activities were $28.82 million. Cash flows from operating activities were net income of $29.41 million and adding back non-cash items of amortization of P&E, intangible assets, unrealized foreign exchange loss, finance fee expenses, write-down of certain investment in film and television programs, amortization of bond premium, movement in fair value of the embedded derivatives, tangible benefit related accretion expense, and share-based compensation of $3.25 million, $7.35 million, $2.45 million, $1.22 million, $0.95 million, $0.02 million, $1.00 million, $0.63 million, and $4.44 million, respectively. Cash flows used in operating activities were for $26.60 million for net change in non-cash balances related to operations, which includes an outflow of $3.36 million in Tangible Benefit Obligation payments made during the period, $6.14 million for deferred income tax recovery, and $46.81 million for net change investment in film and television programs. The net cash outflow from operations for the nine months ended March 31, 2016 is a direct result of i) the Company making a decision to ramp up its production activities at a time when demand for content is robust, ii) the Company acquiring additional content as part of the rebranding of DHX Television, and iii) the natural seasonality of the production and content acquisition seasons in both the production and broadcasting businesses. Specifically, during Nine Months 2016, the Company had episodic deliveries for twelve proprietary series', including six live action series' (see page 7 for details of deliveries) and at March 31, 2016, the Company had 11 greenlit series' in progress. At March 31, 2016, the net cost of the Company's productions in progress (refer to note 5 to the unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 2016) was $29.0 million, at June 30, 2015 the balance was $23.2 million, and at March 31, 2015, the balance was $14.8 million. As indicated in the Q2 2016 MD&A, these figures began to reverse in Q3 2016 and are expected to further reverse in Q4 2016.

16

For nine months ended March 31, 2016, cash flows provided by financing activities were $52.40 million. Cash flows used in financing activities resulted from dividends paid of $5.41 million, funds used to repurchase and cancel shares pursuant to a normal course issuer bid of $5.04 million, and repayments on long term debt of $11.35 million. Cash flows from financing activities were provided by proceeds from interim production financing of $20.70 million, proceeds from long-term debt of $47.20 million, employee share purchase plan and options proceeds of $2.94 million, and proceeds from bank indebtedness of $3.36 million.

For nine months ended March 31, 2016, cash flows used in investing activities were $1.48 million for acquisitions of P&E and $16.62 million for acquisition of and cost of generating intangible assets.

Working Capital

Working capital (“Working Capital”) represents the Company’s current assets less current liabilities. Working Capital increased by $29.89 million as at March 31, 2016 versus June 30, 2015.

Based on the Company’s current revenue expectations for Fiscal 2016, which are based on contracted and expected production, distribution, M&L, broadcasting, and other revenue, the Company believes cash generated from operations and will be sufficient to satisfy Working Capital needs for at least the next twelve months. Management believes the current Working Capital totalling $228.06 million is sufficient to execute its current business plan.

Amended and Restricted Senior Credit Facilities

Concurrently with the closing of the acquisition of DHX Television, the Company entered into an Amended and Restated Senior Secured Credit Agreement (the “Amended Senior Secured Credit Agreement”) with a syndicate of lenders, which amended the terms of the existing credit facilities. The Amended Senior Secured Credit Agreement provides for a revolving facility (the “Amended Revolving Facility”) of up to $30,000 and a term facility (the “Amended Term Facility”) of up to $235,000, maturing on July 31, 2019.

Effective November 13, 2014, commensurate with the closing of the Company’s acquisition of the Echo Bridge assets, the Amended Term Facility was amended to include an additional principal amount of US$12,000, also maturing on July 31, 2019.

Effective December 23, 2014, commensurate with the closing of the Company’s acquisition of Nerd Corps, the Amended Term Facility was amended to include an additional principal amount of $20,000, also maturing on July 31, 2019.

Effective December 31, 2015, the Amended Term Facility was amended to include additional principal amounts of $20,000 and US $20,000.

The Amended Revolving Facility may be drawn down by way of either $CDN bankers acceptances, $CDN prime, $USD base rate, $USD LIBOR, €EUR LIBOR and/or £GBP LIBOR advances (the "Drawdown Rate") and bears interest at a floating rate ranging from the Drawdown Rate +1.25% to +4.50%. The Amended Term Facility may be drawn down by way of the Drawdown Rate and bears interest at a floating rate ranging from the Drawdown Rate +1.25% to +4.50%. The Amended Term Facility is repayable in annual amortization payments (expressed as a percentage of the initial principal amount of the Amended Term Facility) of 10% annually, payable in equal quarterly installments on the last day of each quarter, which commenced in Q2 2015, with the remaining amount due on maturity.

All amounts borrowed pursuant to the Amended Senior Secured Credit Facility are guaranteed by the Company and certain of its subsidiaries (the "Guarantors"), with certain of the Company’s subsidiaries providing a first priority security interest in respect of all of their capital stock in favour of the syndicate of lenders, as well as all present and after acquired real and personal property of the Company and the Guarantors.

Pursuant to the Amended Senior Secured Credit Agreement, the Company must maintain its Leverage Ratio at less than 3.50 times.

Senior Unsecured Notes

On December 2, 2014, the Company completed a private placement of senior unsecured notes due on December 2, 2021 with an aggregate principal amount of $175.0 million (the “Senior Unsecured Notes” or "Notes"). The Senior Unsecured Notes bear interest at 5.875% per annum, payable semi-annually in arrears on June 2 and December 2 of each year until maturity. The first interest payment was paid on June 2, 2015. The Senior Unsecured Notes are guaranteed by the Company and certain of its subsidiaries and are unsecured obligations.

17

Net proceeds of $169.76 million from the issuance of the Senior Unsecured Notes were used to repay indebtedness under the Company’s Amended and Restated Senior Secured Credit Agreement, with $18.0 million being repaid on the Amended Revolving Facility and $151.76 million being repaid on the Amended Term Facility, resulting in the recognition of a debt extinguishment charge, being a portion of the previously unamortized debt issue costs on the Amended Term Facility at the time of principal repayment.

The Senior Unsecured Notes contain embedded derivatives (the “Embedded Derivatives”). The Senior Unsecured Notes contain a redemption option (the "Redemption Option") whereby the Company can redeem all or part of the Senior Unsecured Notes. The Senior Unsecured Notes also contain a put option (the "Put Option") whereby the lender can redeem all or part of the Senior Unsecured Note upon a change of control of the Company. On initial recognition, the Embedded Derivatives were recorded at their calculated fair value and grouped with the Senior Unsecured Notes. The Embedded Derivatives are adjusted to its fair value at each reporting date and any change in fair value is recorded within finance expense in the consolidated statement of income. On initial recognition, the carrying value of the Senior Unsecured Notes was reduced by the net calculated fair value of the Embedded Derivatives, and is amortized over the term of the Senior Unsecured Notes.

The Notes contain non-financial covenants and customary events of default clauses. As of March 31, 2016, the Company was in compliance with all of its covenants under the Notes.

Production Financing Agreement

On August 5, 2014, the Company entered into an agreement with CIBC Commercial Banking to provide a $20.00 million demand revolving loan, available by way of an unlimited number of individual loans (the “Segment Loans”) made to finance production expenses related to eligible productions (the “Eligible Productions”). The Segment Loans may be drawn down in either Canadian dollars or US dollars and bear interest of $CDN prime plus 0.75% or $USD base rate plus 0.75%, respectively. Each Segment Loan is secured by the tangible and intangible assets of each Eligible Production, assignment and direction of production financing contracts and tax credits and a subordinated, unsecured guarantee from DHX Media Ltd. At March 31, 2016, the Company had $13.41 million available on this facility.

Capital Management

The Company’s objectives when managing capital are to provide an adequate return to shareholders, safeguard its assets, maintain a competitive cost structure and continue as a going concern in order to pursue the development, production, distribution, broadcasting, and licensing of its film and television properties.

To facilitate the management of its capital structure, the Company prepares annual expenditure operating budgets that are updated as necessary depending on various factors such as material acquisitions and including industry conditions and operating cash flow. The annual and updated budgets are reviewed by the Board of Directors.

The Company monitors capital using a number of financial ratios, specifically, as at March 31, 2016, pursuant to the amended Senior Secured Credit, including but not limited to:

• Leverage Ratio, defined as net funded debt (the total of all obligations for borrowed money which bear interest or imputed interest, net of all non-production related cash, excluding interim production financing, all capital lease obligations, and any contingent liabilities) (“Net Funded Debt”) to consolidated adjusted EBITDA (rolling consolidated adjusted EBITDA (pro-forma last 12 months) less foreign exchange gains or losses on intercompany debt, production-related EBITDA and certain acquisition costs); and

• The Fixed Charge Ratio, defined as consolidated adjusted EBITDA less current income taxes and unfunded capital expenditures to fixed charges (consolidated interest expense and scheduled principal payments on Funded Debt).

The following table illustrates the financial ratios calculated on a rolling twelve-month basis as at:

	Measure targets			March 31, 2016
Leverage Ratio		< 3.5	x		2.91
Fixed Charge Ratio		> 1.5	x		2.63

As of March 31, 2016, the Company is in compliance with these ratios.

18

Contractual Obligations6
As of March 31, 2016
Payments Due by Period
(All amounts are in thousands)	Total		Fiscal 2016		Fiscal 2017- 2018		Fiscal 2019- 2020		After Fiscal 2021
	$		$		$		$		$
Bank indebtedness (1)		3,358		3,358		—		—		—
Capital lease for equipment (2)		4,533		526		3,367		640		—
Other Liabilities (3)		29,676		3,023		19,233		4,947		2,473
Long-term debt payments (principal and interest) (4)		399,622		8,352		65,294		136,329		189,647
Operating leases (5)		46,605		1,786		13,806		9,285		21,728
Total Contractual Obligations		483,794		17,045		101,700		151,201		213,848

(1) Revolving Facility with a maximum amount of $30.0 million bearing implied interest based on Bankers Acceptances at 5.04%.

(2) Pursuant to finance leases for video editing, leaseholds, and other office and production equipment, the obligations bear implied interest ranging from 4.0% to 9.8% and mature from April 2016 to February 2019. Principal balances are included in note 7 to the unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 2016.

(3) Other liabilities include the tangible benefit obligation per DHX Television acquisition and other contractual liabilities.

(4) See note 7(c) to the unaudited interim condensed consolidated financial statements for three and nine months ended March 31, 2016 for details.

(5) Pursuant to operating leases. See note 13 to the unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 2016 for details.

(6) In addition to the totals above, the Company has interim production financing owing in the amount of $88.45 million (see note7(b) to the unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 2016 for further details). The Company also has entered into various contracts to buy broadcast rights with future commitments totalling $15.10 million.

Outlook

The Company’s March 31, 2016 balance sheet remains strong with approximately $48.7 million in cash on hand. Management continues to focus on its core strengths of developing, producing, distributing its 11,500 half-hour library, and licensing the best possible quality Children’s and Family programs with the goal of increasing cash flows from operations and profitability through existing production, television, and distribution streams and emerging distribution including digital, music and M&L opportunities. The Company is committed to growing its content library annually by a goal of 1-2% (approximately 100-200 half-hours) organically and through the acquisition of third party titles.

Management's annual 2016 outlook, as previously reported, is reproduced and updated as required below.

Management’s Annual Targets

Management targets the mid-point of the ranges that follow. The low-end represents contractual likely sales or Management’s conservative estimates for each revenue stream. For example, for production revenue, proprietary shows currently in production and contracted would fall in the low-end of the range and only be subject to delivery or scheduling risk. For distribution and M&L-owned, Management’s low-end estimate is based on the Company’s existing experience in executing and closing licensing deals and its ability to pull a reasonable amount of the potential sales through the pipeline. The high-end represents the likely upper boundary of additional possible licensing deals based on taking a more aggressive view on the existing pipeline. These potential additional licensing deals are mostly not yet contracted. Management's Annual Targets included in this section has been prepared by, and is the responsibility of, the Company's management. PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to Management's Annual Targets; and accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect to this financial information.

Revenues

For Fiscal 2016, DHX expects the following targeted ranges:

• For production revenue and producer and service fee revenues: $40-45 million, revised slightly downward, and $47.5-52.5 million, revised slightly upward, respectively. Management expects quarterly revenue pacing revised slightly to be approximately 10%, 49%, 28%, 13%, and 29%, 23%, 27%, 21%, for Q1 to Q4, respectively.

19

• For distribution (library) revenues, including both digital and traditional distribution revenue sources: $80-90 million, revised slightly downward. Management expects quarterly revenue pacing revised slightly to be approximately 16%, 22%, 28%, 34% for Q1 to Q4, respectively, noting that Q3 2015 included a couple of items which did not recur in Q3 2016.

• For M&L on owned brands (Teletubbies, Yo Gabba Gabba!, Caillou, Johnny Test, In the Night Garden, Degrassi, Twirlywoos, Slugterra, and Make It Pop) including music, royalty, and live tour revenue: $23-27 million. Management expects quarterly revenue pacing to be approximately 18%, 17%, 41%, 24% for Q1 to Q4, respectively.

• For M&L represented, revised slightly upwards: $26-29 million, with the pacing split equally between Q3 and Q4.

• For other revenue, including new media, revised slightly downwards: $2-3 million.

• For DHX TV, revised slightly downward: $67.5-72.5 million (see "DHX TV Update" section for further details).

Gross Margins

Management has set the following target ranges for gross margins across its various revenue categories:

	Expected Quarterly Ranges		Expected Annual Ranges
Proprietary Production	25-40	%	31-37	%**
Production Service	35-45	%	40-45	%
Distribution	55-75	%	55-70	%
M&L-owned	50-70	%	55-65	%
DHX Television	55-70	%	60-65	%*
M&L-represented	90-100	%	95-100	%
Other, including New Media	15-35	%	20-30	%

*after implementation of the rebranding on November 30, 2015, margin has increased as a result of lower programming costs.

** margins have been revised slightly to reflect the expected product mix.

Operating Expenses (Income)

For Fiscal 2016, DHX expects normalized quarterly cash SG&A revised slightly upwards to range from $16.5-17.5 million, including all operations as we slightly ramp up resources in both distribution and M&L to take advantage of emerging growth opportunities in digital platforms and new territories, for example, China. Resources will also continue to be added to grow the Company's recently announced Wildbrain Multi-Platform Network. Management expects this investment will pay off in the years to come with continued digital territory expansion and increased M&L revenues from owned properties. In addition, DHX expects to invest $3.5-4 million in non-recurring marketing and sales efforts in executing its rebranding strategy for DHX Television, a portion of which is not expected to be incurred until 2017 (Nine Months 2016-$3.35 million).

For Fiscal 2016, amortization for all categories and expense of acquired libraries for all categories (note: this is the amortization for below the line only and excludes expense of film and television and expense of book value of acquired libraries) and development expense when considered together are expected to be in the range of $24-29 million. For Fiscal 2016, non-cash share-based compensation and other expenses (including acquisition costs) are expected to be in the following ranges respectively: $5-6 million and $1.5-2.5 million. For Fiscal 2016, cash finance expense is expected to range from $16-18 million.

As previously disclosed, the Company recorded a non-recurring expense for the tangible benefit obligation related to the acquisition of DHX Television of $14.2 million, which is further detailed in the section entitled "Tangible Benefit Obligation" under Operating Expenses (Income). During Fiscal 2016, the Company expects to use cash of $2-4 million to fund the tangible benefit obligation, $3.36 million of which was incurred in the nine months ended March 31, 2016.

As noted, results of operations for any period are dependent on the number and timing of film and television programs delivered and the licensing deals contracted; accordingly, period results may vary.

Live Tours Update

During Q1 2016, the Company completed its 2015 Big Ticket Summer Concert tour, performing 7 shows in 7 Canadian cities. During Q3 2016, the Company completed the previously announced 22 city Canadian portion of The Next Step Wild Rhythm Tour, and in Q4 2016 will complete the 8 city international portion of the tour. Management believes that there are additional live tour opportunities based on other proprietary brands building momentum, including potentially Make It Pop, Backstage, Teletubbies, In The Night Garden, and Twirlywoos. This represents potential upside for touring and M&L revenues and Management will provide an update as these plans unfold in upcoming periods.

20

Recent Transactions

DHX Television Update

On April 15, 2015, the Company announced that it would rebrand three of DHX Television's four channels and transition away from its content supply agreement with the Walt Disney Company (“Disney”) and the rebranding strategy launched in early September 2015. In November 2015, as part of the transition following the discontinuation of the Disney output agreement, Disney Junior (English) and Disney XD was rebranded to leverage the Family Channel brand, as Family Junior (English) and Family CHRGD, respectively. Disney Junior (French) was rebranded as Télémagino. These rebrandings will leverage on Family Channel's status as the most watched children's service in the country among kids age 8-14, 12-17, and 2-17 in Canada.

We are very pleased to report that agreements are now in place for all broadcast distribution undertakings (or "BDUs") affiliate negotiations presently due for renewal and the majority of the underlying subscribers/economics are subject to multi-year agreements.

DHX Television commenced with the new and original lineup in January 2016. The content driven strategy and rebranding will be built upon on the following: i) commissioning new and original content, including utilizing its own proprietary animation and production teams; ii) leveraging its 11,500 + half-hour library; and iii)  augmenting its content strategy with new and compelling content supply agreements.

As outlined in "Results for the three months ended March 31, 2016 (“Q3 2016”) compared to the three months ended March 31, 2015 (“Q3 2015”)" section, though still very early in the rebranding process, Management is pleased to report that while DHX Television revenue for Q3 2016 was down 23% to $15.73 million from $20.41 million in Q3 2015, gross margins increased to 71%, above the high end of Management's expectations (see "Outlook" section) or $11.16 million in Q3 2016 from 50% or $10.14 million in Q3 2015 as a result of external lower content costs. Management has updated its annual targets for Fiscal 2016 which, while slightly reducing revenue targets, maintains the previously targeted gross margin levels and expected content cost savings. We will revise prospectively if and when new information becomes available.

In conjunction with the announcement of the rebranding and consistent with the planned strategy, the Company entered into a multi-year agreement with Mattel that brings more than 70 hours of new episodes and specials to air on DHX Television’s networks.  The deal will see the addition of content from premiere Mattel brands such as Barbie^™, Monster High^®, Hot Wheels^®, Thomas & Friends^® and Bob the Builder^® across DHX Media’s channels.

DHX Media/Mattel Strategic Pacts

During Nine Months 2016, the Company entered into a long-term co-production and license agreement with Mattel, Inc. ("Mattel") whereby DHX and Mattel will jointly fund, co-develop, and co-produce various forms of new content for certain Mattel properties, including Bob the Builder^®, Fireman Sam^®, Little People^®, and Polly Pocket^®. DHX Studios will work with Mattel to develop and produce the new content, while DHX Distribution will manage the global distribution of both the existing and new content, while Mattel will take the lead on global brand management and consumer products. Management expects the Mattel arrangement to be immediately accretive to results for Fiscal 2016 and beyond.

On April 19, 2016, the Company announced it had expanded its relationship with Mattel, Inc. by entering into a long term licensing agreement for certain rights to the Rainbow Magic publishing property from Mattel. The licensing agreement establishes a framework for DHX to produce and distribute a range of new, multi-platform content inspired by the Rainbow Magic publishing property, while Mattel will oversee global brand management and global toy rights. Rainbow Magic is a much-loved publishing property that has captured the attention of young readers around the world since 2003. With hundreds of titles published to date, Rainbow Magic has reached millions of readers worldwide in more than 30 languages. Rainbow Magic follows the exciting adventures of two young girls, Rachel and Kirsty, and their magical friends in Fairyland. Rainbow Magic is currently published by Orchard and Scholastic in Europe and the USA respectively.

DHX Media/DreamWorks Co-Production and Licensing Deals

During Nine Months 2016, the Company entered into a 5 year agreement with DreamWorks Animation ("DreamWorks") to co-produce 130 episodes of original animated children's content at DHX Studios, which will air in Canada on DHX Television's suite of channels. In addition to the co-production activities, DHX Television has licensed more than 1,000 half-hours of programming from DreamWorks, including Hail King Julien, The Mr. Peabody & Sherman Show, Dragons: Race to the Edge, The Croods, and others. DHX Television also licensed 300 half-hours of teen content for exclusive broadcast in Canada on Family Channel and includes SVOD and mobile rights. These co-production and licensing agreements help to further build out DHX Television's compelling content slate.

21

DHX Studios Vancouver

The Company announced that it will commence the construction of a 75,000 square foot leased studio in Vancouver. The studio will combine the Company's existing 2D and CGI animation studios in Vancouver and is expected to result in significant operating efficiencies. While the budget and timing have not yet been finalized, the incremental capital expenditures are expected to range from $7-10 million, commencing in late Fiscal 2016 and concluding in Fiscal 2018.

Listing on NASDAQ

On June 30, 2015, the Company's Variable Voting Shares commenced trading on NASDAQ under the symbol DHXM. On July 6, 2015, the Company announced a marketed, underwritten offering of up to 8,700,000 variable Voting Shares and Common Voting Shares, with an overallotment of up to 1,305,000 Variable Voting Shares and Common voting Shares ("the Offering"). On July 9, 2015, as a result of market conditions, the Company withdrew the Offering.

Equity Offering

On May 2, 2016, the Company announced that it had closed a bought deal public offering of shares of the Company (the “Equity Offering”), comprised of both Variable Voting Shares and Common Voting Shares (collectively, the “Shares”) through a syndicate of underwriters (the “Underwriters”) whereby the Company issued 8,667,000 Shares of the Company at a price of CDN$7.50 per Share for aggregate gross proceeds of CDN$65.0 million.  The Company also granted the Underwriters an over-allotment option exercisable at any time up to 30 days after closing of the Equity Offering to acquire up to an additional 1,300,050 Shares. In the event that the over-allotment option is exercised in full, the aggregate gross proceeds of the Equity Offering will be approximately CDN$74.8 million.  The net proceeds from the Equity Offering will be used to repay borrowings under the Company’s Amended Senior Secured Credit Agreement, to third party content properties and associated global distribution plans, as well as to pursue additional brand opportunities, and for general corporate and working capital purposes, including potential acquisitions.

Bond Offering

On May 13, 2016, the Company closed a private offering (the “Bond Offering”) of an additional $50 million aggregate principal amount of its 5.875% Senior Unsecured Notes due December 2, 2021 through a syndicate of underwriters at a price of $975.00 per $1,000.00 principal amount, plus accrued interest from and including December 2, 2015 through May 13, 2016.  The net proceeds of the Bond Offering will be used to repay borrowings under the Company’s Amended Senior Secured Credit Agreement.

Seasonality

Results of operations for any period are dependent on the number and timing of film and television programs delivered, which cannot be predicted with certainty. Consequently, the Company’s results from operations may fluctuate materially from period-to-period and the results of any one period are not necessarily indicative of results for future periods. Cash flows may also fluctuate and are not necessarily closely correlated with revenue recognition. During the initial broadcast of the rights the Company is somewhat reliant on the broadcaster’s budget and financing cycles and at times the license period gets delayed and commences at a later date than originally projected.

The Company’s film and television revenues vary significantly from quarter to quarter driven by contracted deliveries with the primary broadcasters. Although with the Company’s continued diversification of its revenue mix, particularly in the strengthening of the distribution revenue stream, some of the quarterly unevenness is improving slightly and becoming more predictable. Distribution revenues are contract and demand driven and can fluctuate significantly from period-to-period.

Critical Accounting Estimates

The preparation of the financial statements in conformity with IFRS requires Management to make estimates, judgments, and assumptions that Management believes are reasonable based upon the information available. These estimates, judgments, and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year or period. Actual results can differ from those estimates (refer to page 2 of this MD&A for more information regarding forward-looking information). For a discussion of all of the Company’s accounting policies, refer to note 3 of the audited consolidated financial statements for the years ended June 30, 2015 and 2014 on www.sedar.com or DHX’s website at www.dhxmedia.com.

Financial Instruments and Risk Management

The Company’s financial instruments consist of cash, restricted cash, amounts receivable, long-term amounts receivable, long-term investment, bank indebtedness, interim production financing, accounts payable and accrued liabilities, long-term debt and obligations under finance leases, and other liabilities. The Company, through its financial assets and liabilities, has exposure to the following risks from its use of financial instruments: credit risk, interest rate risk, liquidity risk, and currency risk. Management monitors risk levels and reviews risk management activities as they determine to be necessary.

22

Credit Risk

Credit risk arises from cash, restricted cash, and deposits, as well as credit exposure to customers, including outstanding receivables. The Company manages credit risk on cash and restricted cash by ensuring that the counterparties are banks, governments and government agencies with high credit ratings. The maximum exposure to credit risk for cash, restricted cash, deposits, and trade and other receivables approximate the amount recorded on the consolidated balance sheets.

The balance of trade amounts receivable are mainly with Canadian broadcasters and large international distribution companies. Management manages credit risk by regularly reviewing aged accounts receivables and appropriate credit analysis. The Company has booked an allowance for doubtful accounts of approximately 4% against the gross amounts for certain trade amounts receivable and management believes that the net amount of trade amounts receivable is fully collectible.

In assessing credit risk, management includes in its assessment the long-term receivables and considers what impact the long-term nature of the receivable has on credit risk. For certain arrangements with licensees, the Company is considered the agent, and only reports the revenue net of the licensor’s share. When the Company bills a third party in full where it is an agent for the licensor, the Company records an offsetting amount in accounts payable that is only payable to a licensee when the amount is collected from the third party. This reduces the risk, as the Company is only exposed to the amounts receivable related to the revenue it records.

Interest Rate Risk

The Company is exposed to interest rate risk arising from fluctuations in interest rates as its interim production financing, certain long-term debt, and a portion of cash bear interest at floating rates. A 1% fluctuation would have an approximate $1.50-2.00 million effect on annual net income before income taxes.

Liquidity Risk

The Company manages liquidity by forecasting and monitoring operating cash flows and through the use of finance leases and revolving credit facilities (see note 14 of the unaudited interim condensed consolidated financial statements for March 31, 2016 for further details). As at March 31, 2016 the Company had cash and restricted cash on hand of $48.74 million (June 30, 2015 - $42.91 million).

Results of operations for any period are dependent on the number and timing of film and television programs delivered, which cannot be predicted with certainty. Consequently, the Company’s results from operations may fluctuate materially from period-to-period and the results of any one period are not necessarily indicative of results for future periods. Cash flows may also fluctuate and are not necessarily closely correlated with revenue recognition. During the initial broadcast of the rights, the Company is somewhat reliant on the broadcaster’s budget and financing cycles and at times the license period gets delayed and commences at a later date than originally projected.

The Company’s film and television revenues vary significantly from quarter to quarter driven by contracted deliveries with the primary broadcasters. Although with the Company’s recent diversification of its revenue mix, particularly in the strengthening of the distribution revenue stream and addition of the broadcasting revenue stream, some of the quarterly unevenness is improving slightly and becoming more predictable. Distribution revenues are contract and demand driven and can fluctuate significantly from year to year. The Company maintains appropriate cash balances and has access to financing facilities to manage fluctuating cash flows.

The Company obtains interim production financing to provide funds until such time as the federal and provincial film tax credits (note 4) are collected. Upon collection of the film tax credits, the related interim production financing is repaid.

Currency Risk

The Company’s activities involve holding foreign currencies and incurring production costs and earning revenues denominated in foreign currencies. These activities result in exposure to fluctuations in foreign currency exchange rates. The Company periodically enters into foreign exchange purchases contracts to manage its foreign exchange risk on USD, GBP and Euro denominate contracts. While inherently difficult to estimate, Management estimates 1% change in the USD, GBP or Euro exchange rate would have less than a $1.5-2.0 million effect on net income and comprehensive income.

23

Risk Assessment

The following are the specific and general risks that could affect the Company that each reader should carefully consider. Additional risks and uncertainties not presently known to the Company or that the Company does not currently anticipate will be material, may impair the Company’s business operations and its operating results and as a result could materially impact its business, results of operations, prospects, and financial condition. These specific and general risks are as follows: risks related to the nature of the entertainment industry, risks related to television and film industries, risks related to doing business internationally, loss of Canadian status, competition, limited ability to exploit film and television content library, protecting and defending against intellectual property claims, fluctuating results of operations, raising additional capital, concentration risk, reliance on key personnel, market share price fluctuations, risks associated with acquisitions and joint ventures, potential for budget overruns and other production risks, management estimates in revenues and earnings, stoppage of incentive programs, financial risks resulting from the Company’s capital requirements, government incentive program, change in regulatory environment, litigation, technological change, labour relations, and exchanges rates.

For further details see “Risk Factors” contained in the Company’s 2015 Annual MD&A and the Company's most recent Annual Information Form, filed September 28, 2015, on www.sedar.com, DHX’s website at www.dhxmedia.com, or on EDGAR at www.sec.gov/edgar.shtml.

Disclosure Controls and Procedures and Internal Control over Financial Reporting

The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have designed or caused to be designed under their supervision, disclosure controls and procedures to provide reasonable assurance that material information is gathered and reported to senior management to permit timely decisions regarding public disclosure and to provide reasonable assurance that the information required to be disclosed in reports that are filed or submitted under Canadian securities legislation is recorded, processed, summarized, and reported within the time period specified in those rules.

The CEO and the CFO have also designed, or caused to be designed under their supervision, internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes.

In its annual filings dated September 28, 2015, the CEO and the CFO, after evaluating the effectiveness of the Company’s disclosure controls and procedures, and internal control over financial reporting, concluded that as at June 30, 2015, both the Company’s disclosure controls and procedures, and internal control over financial reporting were operating effectively. It should be noted that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, including instances of fraud, if any, have been detected.

There were no changes in internal controls over financial reporting during the nine months ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Use of Non-GAAP Financial Measures

In addition to the results reported in accordance with IFRS or GAAP as issued by the International Accounting Standards Board, the Company uses various non-GAAP financial measures, which are not recognized under IFRS or GAAP, as supplemental indicators of our operating performance and financial position. These non-GAAP financial measures are provided to enhance the user’s understanding of our historical and current financial performance and our prospects for the future. Management believes that these measures provide useful information in that they exclude amounts that are not indicative of our core operating results and ongoing operations and provide a more consistent basis for comparison between periods. The following discussion explains the Company’s use of certain non-GAAP financial measures, which are Adjusted EBITDA, Normalized Net Income, Gross Margin, and Adjusted Operating Activities.

“Adjusted EBITDA” means earnings (loss) before interest, taxes, depreciation, amortization, share-based compensation expense, finance expense (income), development expense, and impairment of certain investments in film and television programs, and also includes adjustments for other identified charges, as specified in the accompanying tables. Amortization includes amortization of property & equipment, expense of acquired libraries, and intangible assets. Adjusted EBITDA is not an earnings measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP; accordingly, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes Adjusted EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operation. The most comparable GAAP measure is net income (loss).

“Adjusted Net Income” is a non-GAAP financial measure which adjusts net income (loss) for identified charges, net of tax effect. Adjusted Net Income is not an earnings measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP; accordingly, Adjusted Net Income may not be comparable to similar measures presented by other issuers. Management believes Adjusted Net Income to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operation. The most comparable GAAP measure is net income (loss).

“Gross Margin” means revenue less direct production costs and expense of film and television programs produced and effective for Q2 2013 onward, less expense of the book value of the acquired libraries. Gross Margin is not an earnings measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP; accordingly, Gross Margin may not be comparable to similar measures presented by other issuers. The most comparable GAAP measure is net income (loss).

24

“Adjusted Operating Activities” is a non-GAAP financial measure of cash inflows and outflows from operating activities adjusted for increases and decreases in interim production financing, bank indebtedness, excluding specifically identified financing and investing activities, changes in restricted cash, and identified charges, net of tax, as in Management’s opinion, these are also an integral part of determining cash flows from operations. Adjusted Operating Activities is one of the key cash flow measurement tools used by Management in assessing cash flow performance. The most comparable GAAP measure is cash flows from operating activities.

Reconciliations of historical results to both Adjusted EBITDA and Adjusted Net Income are presented on the following pages.

25

Reconciliation of Historical Results to Adjusted EBITDA

Adjusted EBITDA is not a recognized earnings measure under GAAP and does not have standardized meanings prescribed by GAAP; accordingly, Adjusted EBITDA may not be comparable to similar measures presented by other companies or issuers. Investors are cautioned that Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with GAAP as an indicator of the Company’s performance or to cash flows from operating, investing, and financing activities as a measure of liquidity and cash flows. The following table reconciles net income, Adjusted EBITDA, and Gross Margin, based on the unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 2016 and 2015 of the Company found on www.sedar.com, www.dhxmedia.com, or on EDGAR at www.sec.gov/edgar.shtml. For further description see “Use of Non-GAAP Financial Measures” elsewhere in this MD&A.

The operating results for any period should not be relied upon as an indication of results for any future period.

						Nine Months		Nine Months
	Q3-20161		Q3-20151			20161		20151
	($000)		($000)			($000)		($000)
Net income (loss) for the period		10,219		18,031			29,414		15,837
Provision for income taxes		756		6,666			5,395		6,303
Interest expense, net2		5,380		4,280			14,027		11,370
Amortization3		6,315		7,028			19,526		15,569
Share-based compensation expense		1,528		1,378			4,436		3,089
Finance expense (excluding interest), net2		6,421		(8,904	)		997		(7,223	)
Tangible benefit obligation expense4		—		—			—		14,215
Acquisition costs5		—		—			—		4,995
Write-down of certain investment in film and television		450		517			950		532
Development and other expense6		1,667		807			4,122		2,712
Adjusted EBITDA1		32,736		29,803			78,867		67,399
Selling, general and administrative, net of share-based compensation expense and other one-time adjustments		17,776		14,990			50,489		39,975
Gross Margin1		50,512		44,793			129,356		107,374

¹See “Use of Non-GAAP Financial Measures” section of this MD&A for further details; certain of the 2015 comparatives have been reclassed to align with the 2016 definitions.

²Finance expense per the financial statements has been split between its interest and non-interest components.

³Amortization is made up of amortization of P&E and intangibles and the portion of expense of acquired library that relates to the amortization of the purchase accounting bump to fair value for all acquired libraries. These adjustments were as follows: Q3 2016-$3.94 million and $2.38 million, respectively (Q3 2015-$3.43 million and $3.59 million, respectively) and Nine Months 2016-$10.61 million and $8.92 million, respectively (Nine Months 2015-$7.23 million and $8.33 million, respectively).

⁴See the "DHX Television Tangible Benefit Obligation" section of the 2015 Annual MD&A for additional details.

⁵Adjustments for specifically identified acquisition costs of Q3 2016-$ nil (Nine Months 2016-$nil) (Q3 2015-$nil) (Nine Months 2015-$5.00 million).

⁶ For Q3 2016, Development and other expenses includes costs related to the rebranding of DHX television of $1.30 million, severance and integration costs of $0.37 million, lease termination costs of $nil, and development costs of $nil (Q3 2015-$nil, $nil, $nil, and $0.81 million, respectively) (Nine Months 2016-$3.35 million, $0.77 million, $nil, and $nil, respectively) (Nine Months 2015-$nil, $0.85 million, $1.05 million, and $0.81 million, respectively).

26

Reconciliation of Historical Results to Adjusted Net Income

Adjusted Net Income is not a recognized earnings measure under GAAP and does not have standardized meanings prescribed by GAAP. Accordingly, Adjusted Net Income may not be comparable to similar measures presented by other companies or issuers. Investors are cautioned that Adjusted Net Income should not be construed as an alternative to net income or loss determined in accordance with GAAP as an indicator or the Company's performance or to cash flows from operating, investing, and financing activities as a measure of liquidity and cash flows. The following table reconciles net income to adjusted net Income and on the Company's consolidated financial statements found on www.sedar.com, www.dhxmedia.com, or on EDGAR at www.sec.gov/edgar.shtml. For further description see "Use of Non-GAAP Financial Measures" elsewhere in the MD&A.

The operating results for any period should not be relied upon as an indication of results for any future period.

	Q3 - 20161		Q3 - 20151		Nine Months 20161		Nine Months 20151
	$000		$000		$000		$000
Net income (loss) for the period		10,219		18,031		29,414		15,837
Acquisition costs, net of estimated tax effect		—		—		—		4,296
Tangible benefit obligation, net of estimated tax effect		—		—		—		10,448
TV Rebranding costs, net of estimated tax effect		906		—		2,345		—
Severance costs, lease termination and other, net of estimated tax effect (included in Development expenses and other)		259		—		540		—
Debt extinguishment charge		—		—		—		2,817
Adjusted net income1		11,384		18,031		32,299		33,398

¹See "Use of Non-GAAP Financial Measures" section of this MD&A for further details.

27

DHX MEDIA LTD.

Q3 2016  

Supplemental Information

28

I. Summary of securities issued and options and warrants granted during the nine months ended March 31, 2016 (expressed in thousands of Canadian dollars, except for shares and amounts per share)

a. Summary of securities issued

	Number of Common Shares			Value $
Balance at  June 30, 2015		123,982,312			236,757
Shares issued as part of employee share purchase plan		7,587			69
Balance at  September 30, 2015		123,989,899			236,826
Shares issued as part of employee share purchase plan		7,101			60
Dividends reinvested		18,946			154
Options exercised		1,563,125			3,855
Balance at  December 31, 2015		125,579,071			240,895
Shares issued as part of employee share purchase plan		9,114			71
Dividends reinvested		25,676			180
Normal-course issuers bid		(659,000	)		(1,265	)
Options exercised		100,000			140
Balance at  March 31, 2016		125,054,861			240,021

b. Summary of options and warrants

Options	Number of Options			Weighted-average exercise price
Balance at June 30, 2015 and September 30, 2015		6,353,750		$	5.10
Options granted to employees		2,071,500		$	8.37
Options exercised		(1,563,125	)	$	1.70
Balance at December 31, 2015		6,862,125		$	6.84
Options granted to employees		25,000		$	6.76
Options exercised		(100,000	)	$	0.93
Options granted to officers		250,000		$	6.93
Options granted to directors		100,000		$	6.93
Balance at March 31, 2016		7,137,125		$	6.93

c. Summary of securities as at the end of the reporting period

1. Authorized share capital

100,000,000 Preferred Variable Voting Shares ("PVVS"), redeemable at the option of the Company at any time at a millionth of a cent per share, no entitlement to dividends, voting

Unlimited Common Voting Shares without nominal or par value

Unlimited Variable Voting Shares without nominal or par value

Unlimited Non-Voting Shares without nominal or par value

2. Shares outstanding and recorded value

125,054,861 common shares at a recorded value of 240,021, comprised of 96,951,091 common voting shares and 28,103,770 variable voting shares and nil non-voting shares;

100,000,000 preferred variable voting shares at a recorded value of $nil.

29

i. Preferred Variable Voting Shares

On November 12, 2014, the PVVS were transferred by the Company’s Executive Chairman, to the Company’s Chief Executive Officer, in accordance with the terms of a shareholders agreement among the Company and holder of the PVVS (the “PVVS Shareholder Agreement”). On the date of such transfer, the Company’s Chief Executive Officer entered into the PVVS Shareholder Agreement with the Company, pursuant to which the Company’s Chief Executive Officer (i) agreed not to transfer the PVVS, in whole or in part, except with the prior written approval of the Board, (ii) granted to the Company the unilateral right to compel the transfer of the PVVS, at any time and from time to time, in whole or in part, to a person designated by the Board and (iii) granted to DHX a power of attorney to effect any transfers contemplated by the PVVS Shareholder Agreement.  The Board will not approve or compel a transfer without first obtaining the approval of the TSX and the PVVS Shareholder Agreement cannot be amended, waived or terminated unless approved by the TSX.

ii. Common shares

On September 30, 2014, the Company’s shareholders approved a reorganization of the Company’s share capital structure (the “Share Capital Reorganization”) to address the Canadian ownership requirements of DHX Television. The Share Capital Reorganization was affected on October 9, 2014 and resulted in, among other things, the creation of three new classes of shares: Common Voting Shares, Variable Voting Shares and Non-Voting Shares.

On October 9, 2014, each outstanding Common Share of the Company that was not owned and controlled by a Canadian for the purposes of the Broadcasting Act (Canada) (the “Broadcasting Act”) was converted into one Variable Voting Share and each outstanding Common Share that was owned and controlled by a Canadian for the purposes of the Broadcasting Act was converted into one Common Voting Share. Each Common Voting Share carries one vote per share on all matters. Each Variable Voting Share carries one vote per share unless the number of Variable Voting Shares outstanding exceeds 33 1/3% of the total number of Variable Voting Shares and Common Voting Shares outstanding, in which case the voting rights per share of the Variable Voting Shares are reduced so that the total number of votes associated with the outstanding Variable Voting Shares equals 33 1/3% of the total votes associated with the outstanding Variable Voting Shares and Common Voting Shares combined. The economic rights of each Variable Voting Share, each Common Voting Share, and each Non-Voting Share are the same. All of the unissued Common Shares of the Company were cancelled on the completion of the Share Capital Reorganization. The Variable Voting Shares and Common Voting Shares are listed on the Toronto Stock Exchange under the ticker symbols DHX.A and DHX.B, respectively.

3. Description of options

See note 12(d) of the audited consolidated financial statements for the year ended June 30, 2015.

II. Directors and officers as at March 31, 2016

Directors

Elizabeth Beale (2) (4)	Director
David Colville (2) (3)	Director
Sir Graham Day (2) (3) (4)	Director
Michael Donovan (1)	Executive Chairman, Director
Deborah Drisdell (1) (3)	Director
Dana Landry	CEO, Director
Geoffrey Machum, QC (4)	Chair of Corporate Governance and Nominations Committee, Director
Robert Sobey (3)	Chair of the Human Resources and Compensation Committee, Director
Catherine Tait (1)	Director
Donald Wright (2) (3) (4) (5)	Lead Director of DHX, Chair of the Audit Committee

(1) Member of the Production Financing Committee

(2) Member of the Audit Committee

(3) Member of the Human Resources and Compensation Committee

(4) Member of the Corporate Governance and Nominations Committee

(5) Donald Wright is Chairman of the board of directors of Jaguar Resources Inc. (“Jaguar”). On May 6, 2015, the Alberta Securities Commission and on May 8, 2016 the British Columbia Securities Commission issued cease trade orders (the “Cease Trade Orders”) against Jaguar for failure to file its annual audited financial statements, annual management's discussion and analysis, and certification of the annual filings, for the year ended December 31, 2014 (the "Annual Disclosure Materials") pursuant to which trading in Jaguar’s securities was prohibited.  Although the Cease Trade Orders are still in effect, Jaguar filed the Annual Disclosure Materials on October 9, 2015 and is in the process of applying to have the Cease Trade Orders lifted.

Officers

Michael Donovan	Executive Chairman
Dana Landry	CEO
Keith Abriel	CFO
Steven DeNure	President and COO
Mark Gosine	EVP, Legal Affairs, Secretary and General Counsel
David Regan	EVP, Corporate Development

30

EX-99.3

Exhibit 99.3

DHX Media Ltd.

Unaudited Interim Condensed Consolidated

Financial Statements

March 31, 2016

(expressed in thousands of Canadian dollars)

May 16, 2016

Management’s Responsibility for Financial Reporting

The accompanying unaudited interim condensed consolidated financial statements of DHX Media Ltd. (the “Company”) are the responsibility of management and have been approved by the Audit Committee of the Board of Directors (the “Board”). The Board is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the unaudited interim condensed consolidated financial statements. The Board carries out this responsibility through its Audit Committee. The Audit Committee reviews the Company’s unaudited interim condensed consolidated financial statements and recommends their approval by the Board.

The Audit Committee is appointed by the Board and all of its members are independent directors. It meets with the Company’s management and reviews internal control and financial reporting matters to ensure that management is properly discharging its responsibilities before submitting the unaudited interim condensed consolidated financial statements to the Board for approval.

The unaudited interim condensed consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. When alternative methods of accounting exist, management has chosen those it deems most appropriate in the circumstances. The unaudited interim condensed consolidated financial statements include amounts based on informed judgments and estimates of the expected effects of current events and transactions with appropriate consideration to materiality. In addition, in preparing the unaudited interim condensed consolidated financial statements, management must make determinations as to the relevancy of information to be included, and make estimates and assumptions that affect reported information. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

(signed) “Dana Landry”	(signed) “Keith Abriel”
Chief Executive Officer	Chief Financial Officer
Halifax, Nova Scotia	Halifax, Nova Scotia

DHX Media Ltd.

Unaudited Interim Consolidated Balance Sheets

As at March 31, 2016 and June 30, 2015

(expressed in thousands of Canadian dollars)

	March 31, 2016		June 30, 2015
	$		$
Assets
Current assets
Cash		48,741		42,907
Amounts receivable (note 4)		211,848		178,076
Prepaid expenses and other		8,086		22,078
Investment in film and television programs (note 5)		238,617		194,226
		507,292		437,287
Long-term amounts receivable (note 4)		14,039		11,091
Deferred financing fees		571		706
Property and equipment		17,986		17,817
Intangible assets (note 6)		150,323		127,396
Goodwill		212,101		213,941
		902,312		808,238
Liabilities
Current liabilities
Bank indebtedness (note 7)		3,358		—
Accounts payable and accrued liabilities		125,725		109,143
Deferred revenue		43,848		49,323
Interim production financing (note 7)		88,445		67,743
Current portion of long-term debt and obligations under finance leases (note 7)		17,862		12,916
		279,238		239,125
Long-term debt and obligations under finance leases (note 7)		303,534		269,902
Long-term deferred revenue		949		1,686
Other liabilities		22,488		12,542
Deferred income taxes (note 9)		17,151		23,029
		623,360		546,284
Shareholders’ Equity		278,952		261,954
		902,312		808,238
Commitments and contingencies (note 13)

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.

DHX Media Ltd.

Unaudited Interim Consolidated Statement of Changes in Equity

For the nine months periods ended March 31, 2016 and 2015

(expressed in thousands of Canadian dollars)

	Common shares $			Contributed surplus $			Accumulated other comprehensive loss $			Retained earnings $			Total $
Balance - June 30, 2014		207,227			12,486			(1,203	)		4,839			223,349
Net income for the period		—			—			—			15,837			15,837
Other comprehensive loss for the period		—			—			(9,470	)		—			(9,470	)
Comprehensive income for the period		—			—			(9,470	)		15,837			6,367
Shares issued pursuant to the employee share purchase plan ("ESPP")		114			—			—			—			114
Share issue costs, net of tax		(136	)		—			—			—			(136	)
Shares issued for Nerd Corps acquisition		26,075			—			—			—			26,075
Dividends reinvested and paid		98			—			—			(4,848	)		(4,750	)
Share-based compensation		—			3,089			—			—			3,089
Stock options exercised		1,666			(531	)		—			—			1,135
Balance - March 31, 2015		235,044			15,044			(10,673	)		15,828			255,243
Balance - June 30, 2015		236,757			15,756			(8,355	)		17,796			261,954
Net income for the period		—			—			—			29,414			29,414
Other comprehensive loss for the period		—			—			(9,348	)		—			(9,348	)
Comprehensive income for the period		—			—			(9,348	)		29,414			20,066
Shares issued pursuant to the ESPP		200			—			—			—			200
Normal course issuer bid ("NCIB") shares repurchased and cancelled		(1,265	)		(3,775	)		—			—			(5,040	)
Stock options exercised		3,995			(1,249	)		—			—			2,746
Dividends reinvested and paid		334			—			—			(5,744	)		(5,410	)
Share-based compensation		—			4,436			—			—			4,436
Balance - March 31, 2016		240,021			15,168			(17,703	)		41,466			278,952

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.

DHX Media Ltd.

Unaudited Interim Consolidated Statements of Income

For the three and nine month periods ended March 31, 2016 and 2015

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

	Three months ended						Nine months ended
	March 31,  2016			March 31,  2015			March 31,  2016			March 31,  2015
	$			$			$			$
Revenues (note 17)		84,095			85,582			229,485			192,869
Expenses (note 11)
Direct production costs and expense of film and television produced		35,961			44,383			109,045			93,829
Acquisition costs		—			—			—			4,995
Amortization of property and equipment and intangible assets		3,937			3,434			10,610			7,235
Development expenses and other		1,667			807			4,122			2,712
Tangible benefit obligation expense		—			—			—			14,215
Write-down of investment in film and television programs		450			517			950			532
Selling, general and administrative		19,304			16,368			54,925			43,064
Finance expense (note 10)		11,905			3,402			15,288			14,641
Finance income (note 10)		(104	)		(8,026	)		(264	)		(10,494	)
		73,120			60,885			194,676			170,729
Income before income taxes		10,975			24,697			34,809			22,140
Provision for (recovery of) income taxes
Current income taxes (note 9)		3,696			4,626			11,537			12,783
Deferred income taxes (note 9)		(2,940	)		2,040			(6,142	)		(6,480	)
		756			6,666			5,395			6,303
Net income for the period		10,219			18,031			29,414			15,837
Basic earnings per common share (note 15)		0.08			0.15			0.24			0.13
Diluted earnings per common share (note 15)		0.08			0.14			0.23			0.13

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.

DHX Media Ltd.

Unaudited Interim Consolidated Statements of Comprehensive Income (Loss)

For the three and nine month periods ended March 31, 2016 and 2015

(expressed in thousands of Canadian dollars)

	Three months ended						Nine months ended
	March 31,  2016			March 31,  2015			March 31,  2016			March 31,  2015
	$			$			$			$
Net income for the period		10,219			18,031			29,414			15,837
Other comprehensive loss
Items that will be subsequently reclassified to the statement of income
Cumulative translation adjustment		(3,323	)		(4,260	)		(9,348	)		(9,470	)
Comprehensive income for the period		6,896			13,771			20,066			6,367

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.

DHX Media Ltd.

Unaudited Interim Consolidated Statements of Cash Flows

For the nine month periods ended March 31, 2016 and 2015

(expressed in thousands of Canadian dollars)

	2016			2015
	$			$
Cash provided by (used in)
Operating activities
Net income for the period		29,414			15,837
Charges (credits) not involving cash
Amortization of property and equipment		3,256			2,462
Amortization of intangible assets		7,354			4,773
Unrealized foreign exchange loss (gain)		2,454			(605	)
Amortization of deferred financing fees		1,218			1,094
Write-down of investment in film and television programs		950			532
Accretion on tangible benefit obligation		628			578
Debt extinguishment charge		—			3,912
Share-based compensation		4,436			3,089
Tangible benefit obligation expense		—			14,215
Amortization of debt premium		21			(94	)
Movement in the fair value of embedded derivatives		1,000			(1,341	)
Deferred tax recovery		(6,142	)		(6,480	)
Net investment in film and television programs (note16)		(46,810	)		(9,615	)
Net change in non-cash balances related to operations (note16)		(26,595	)		(7,409	)
Cash provided by (used in) operating activities		(28,816	)		20,948
Financing activities
Dividends paid		(5,410	)		(4,750	)
Proceeds from issuance of common shares related to ESPP and options exercised		2,944			1,254
Common shares repurchased and cancelled pursuant to the NCIB		(5,040	)		—
Deferred financing fees		—			(289	)
Proceeds from (repayment of) bank indebtedness		3,358			(4,930	)
Proceeds from interim production financing		20,702			3,879
Proceeds from long-term debt, net of costs		47,198			360,172
Decrease in restricted cash		—			4
Repayment of long-term debt and obligations under finance leases		(11,352	)		(158,321	)
Cash provided by financing activities		52,400			197,019
Investing activities
Business acquisitions, net of cash acquired		—			(208,062	)
Acquisition of property and equipment		(1,480	)		(4,386	)
Acquisition/cost of intangible assets		(16,620	)		(268	)
Cash used in investing activities		(18,100	)		(212,716	)
Effect of foreign exchange rate changes on cash		350			607
Net change in cash and cash equivalents during the period		5,834			5,858
Cash and cash equivalents - Beginning of period		42,907			26,679
Cash and cash equivalents - End of period		48,741			32,537

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

1 Nature of business

DHX Media Ltd. (the “Company”) is a public company, and the ultimate parent, whose common shares are traded on the Toronto Stock Exchange (“TSX”), admitted on May 19, 2006, under the symbols DHX.A and DHX.B. On June 23, 2015, the Company commenced trading its Variable Voting Shares on the NASDAQ Global Trading Market (“NASDAQ”) under the symbol DHXM. The Company, incorporated on February 12, 2004 under the laws of the Province of Nova Scotia, Canada, and continued on April 25, 2006 under the Canada Business Corporation Act, develops, produces and distributes films and television programs for the domestic and international market, broadcasts films and television programs for the domestic markets, as well, the Company manages copyrights, licensing and brands for third parties. The address of the Company’s head office is 1478 Queen Street, Halifax, Nova Scotia, Canada, B3J 2H7.

2 Basis of preparation

The Company prepares its unaudited interim condensed consolidated financial statements (the “financial statements”) in accordance with Canadian generally accepted accounting principles (“GAAP”) as set out in the Chartered Professional Accountants of Canada Handbook - Accounting - Part 1 (“CPA Canada Handbook”), which incorporates International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These financial statements are in compliance with the International Accounting Standards 34, Interim Financial Reporting ("IAS 34") Accordingly, certain information included in annual financial statements prepared in accordance with IFRS, issued by IASB, have been omitted or condensed. The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, have been set out in note 3 of the Company's annual consolidated statements for the year ended June 30, 2015. The financial statements should be read in conjunction with the Company's annual financial statements for the year ended June 30, 2015.

These financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position and cash flows.

These consolidated financial statements have been authorized for issuance by the Board of Directors on May 11, 2016.

3 Significant accounting policies, judgments and estimation uncertainty

These unaudited interim condensed consolidated financial statements have been prepared using the same policies and methods as the annual consolidated financial statements of the Company for the year ended June 30, 2015, unless otherwise noted. Refer to note 3 of the Company's financial statements for the year ended June 30, 2015 for more information on new accounting standards and amendments not yet effective.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

(1)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

3 Significant accounting policies, judgments and estimation uncertainty (continued)

Amendment to IAS 38

In May 2014, the IASB issued an amendment to IAS 38, stating that there is a rebuttable presumption that amortization methods based on the revenue generated by an activity that includes the use of an intangible asset is inappropriate. The amendment states that the presumption can be overcome when the intangible asset is expressed as a measure of revenue, or when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated. This amendment is effective for annual periods beginning on or after January 1, 2016, which will be July 1, 2016 for the Company, and is to be applied prospectively. The Company is currently reviewing the impact of this amendment on its financial statements. Based on its preliminary evaluation, the Company does not believe the amendment will have a material impact in its financial statements; however, the Company has not reached a final determination.

IFRS 16, Leases

In January 2016, the IASB issued IFRS 16, "Leases" ("IFRS 16") effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for entities that have also adopted IFRS 15. IFRS 16 provides a comprehensive model for the measurement, presentation and disclosure of leases and supersedes IAS 17, "Leases". The adoption of IFRS 16 will result in substantially all lessee leases being recorded on the balance sheet as an asset with a corresponding liability with both current and long-term portions. The Company is currently reviewing the impact of IFRS 16 on its financial statements.

4 Amounts receivable

	March 31,  2016			June 30,  2015
	$			$
Trade receivables		112,419			100,287
Less: provision for impairment of trade receivables		(5,472	)		(5,798	)
		106,947			94,489
Goods and services tax recoverable (payable), net		1,488			(279	)
Federal and provincial film tax credits and other government assistance		103,413			83,866
Short-term amounts receivable		211,848			178,076
Long-term amounts receivable		14,039			11,091
Total amounts receivable		225,887			189,167

(2)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

4 Amounts receivable (continued)

The aging of trade receivables not impaired is as follows:

	March 31,  2016		June 30,  2015
	$		$
Less than 60 days		91,176		88,151
Between 60 and 90 days		5,240		1,987
Over 90 days		10,531		4,351
		106,947		94,489

The Company does not have security over these balances. All impaired trade receivables are older than 90 days.

Trade receivables, goods and services taxes recoverable and federal and provincial film tax credits and other government assistance are provided for based on estimated recoverable amounts as determined by using a combination of historical default experience, any changes to credit quality and management estimates. Goods and services taxes recoverable and other government assistance do not contain any significant uncertainty.

Provision for impairment of trade receivables:

	March 31,  2016			June 30,  2015
	$			$
Opening balance		5,798			3,730
Provision for receivables		1,141			3,136
Receivables written off during the period		(1,119	)		(1,254	)
Recoveries of receivables previously provided for		(34	)		(43	)
Exchange differences		(314	)		229
Closing balance		5,472			5,798

(3)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

5 Investment in film and television programs

	March 31,  2016			June 30,  2015
	$			$
Development costs		1,334			1,290
Theatrical and non-theatrical productions in progress
Cost, net of government and third party assistance and third party participation		28,986			23,227
Acquired participation rights - theatrical and non-theatrical
Cost		123,361			123,361
Accumulated expense		(48,990	)		(36,534	)
		74,371			86,827
Non-theatrical productions completed and released
Cost, net of government and third party assistance and third party participation		410,949			344,263
Accumulated expense		(309,133	)		(261,347	)
Accumulated write-down of investment in film and television programs		(9,154	)		(8,204	)
		92,662			74,712
Program and film rights - broadcasting
Cost		98,663			46,006
Accumulated expense		(57,399	)		(37,836	)
		41,264			8,170
		238,617			194,226

All program and film rights - broadcasting, noted above, relate to DHX Television.

The Company expects that 12% of the costs related to theatrical and non-theatrical productions completed and released will be realized during the year ending June 30, 2016. The Company expects that 32% of the costs related to theatrical and non-theatrical productions completed and released will be realized during the period ending June 30, 2018. The Company expects that over 52% of the costs related to productions completed will be realized by June 30, 2020.

During the three and nine months ended March 31, 2016 interest of $350 and $1,652 (March 31, 2015 - $732 and $1,229) has been capitalized to investment in film and television programs.

(4)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

5 Investment in film and television programs (continued)

The continuity of investment in film and television programs is as follows:

	March 31,  2016			June 30,  2015
	$			$
Net opening investment in film and television programs		194,226			146,631
Productions acquired		—			24,327
Cost of productions (completed and released and productions in progress), net of government assistance and third party participation		67,548			89,493
Increase (decrease) in development costs		44			(1,116	)
Expense of investment in film and television programs		(60,242	)		(77,829	)
Expense of program and film rights - broadcasting		(19,563	)		(37,836	)
Increase of program and film rights - broadcasting		52,657			28,853
Write-down in value of certain investment in film and television programs		(950	)		(1,814	)
Program and film rights acquired - broadcasting		—			17,153
Exchange differences		4,897			6,364
		238,617			194,226

Consolidated Structured Entity

To facilitate the production of two new television series (the “Productions”), the Company has entered into two production financing structures whereby entities, in which the Company has no direct ownership interest, will complete the Productions. The Company, through contractual agreements, has creative control of the Productions and must fund any overspend on the Productions. Therefore, the Company has the ability to direct the relevant activities of the entities and can use its power to affect the amount of returns it obtains. Consequently, the Company controls these entities and consolidates them. The underlying assets of the entities at March 31, 2016 were investment in film and television programs, cash, amounts receivable and account payable and liabilities are included in the Company’s consolidated results and totalled assets of $12,436 and liabilities of $12,436 (June 30, 2015 - $12,920 and $12,920 respectively).

(5)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

6 Intangible assets

All broadcast licenses relate to the operations of DHX Television.

	Broadcast licenses		Broadcaster relationships			Customer relationships			Brands			Production and distribution rights (1)			Other			Total
	$		$			$			$			$			$			$
For the nine months ended March 31, 2015
Opening book value - June 30, 2014		—		2,871			11,612			18,622			—			885			33,990
DHX Television acquisition		110,200		—			—			5,600			—			—			115,800
Nerd Corps acquisition		—		—			15,800			7,300			—			3,590			26,690
Amortization		—		(607	)		(1,351	)		(2,494	)		—			(321	)		(4,773	)
Additions		—		—			—			268			—			—			268
Foreign exchange differences		—		2			139			30			—			—			171
Net book value		110,200		2,266			26,200			29,326			—			4,154			172,146
At March 31, 2015
Cost		110,200		7,362			27,620			35,019			—			6,517			186,718
Accumulated amortization		—		(5,112	)		(3,398	)		(6,267	)		—			(2,363	)		(17,140	)
Foreign exchange differences		—		16			1,978			574			—			—			2,568
Net book value		110,200		2,266			26,200			29,326			—			4,154			172,146
For the nine months ended March 31, 2016
Opening book value - June 30, 2015		67,800		2,075			25,990			27,686			—			3,845			127,396
Nerd Corps acquisition		—		—			—			—			—			820			820
Amortization		—		(615	)		(2,135	)		(2,858	)		(645	)		(1,101	)		(7,354	)
Additions		—		—			—			1,157			29,328			—			30,485
Foreign exchange differences		—		7			(787	)		(244	)		—			—			(1,024	)
Net book value		67,800		1,467			23,068			25,741			28,683			3,564			150,323
At March 31, 2016
Cost		67,800		7,362			27,920			35,077			29,328			7,327			174,814
Accumulated amortization		—		(5,939	)		(6,237	)		(9,846	)		(645	)		(3,763	)		(26,430	)
Foreign exchange differences		—		44			1,385			510			—			—			1,939
Net book value		67,800		1,467			23,068			25,741			28,683			3,564			150,323

(1) Production and distribution rights will be amortized on a straight line basis over the term of the contract, being 10 to 25 years.

(6)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

7 Bank indebtedness, interim production financing, long-term debt and obligations under finance leases

	March 31,  2016			June 30,  2015
	$			$
Bank indebtedness		3,358			—
Interim production financing		88,445			67,743
Long-term debt and obligations under finance leases		321,396			282,818
Interest bearing debt and obligations under finance leases		413,199			350,561
Amount due within 12 months		(109,665	)		(80,659	)
Amount due beyond 12 months		303,534			269,902

Effective July 31, 2014 and commensurate with the closing of the Company’s acquisition of DHX Television, the Company entered into an amended and restated senior secured credit agreement (the “Amended and Restated Senior Secured Credit Agreement”) with a syndicate of lenders, which amended the existing terms of the Company’s senior secured credit facility. The Amended and Restated Senior Secured Credit Agreement was further amended on October 31, 2014, November 30, 2014 and December 19, 2014 in conjunction with: i) The acquisition of the Echo Bridge assets; ii) The issuance of the Senior Unsecured Notes (note 7 (c)); and iii) The acquisition of Nerd Corps, respectively. Additional amendments were completed on June 30, 2015, September 30, 2015 and December 31, 2015.

All amounts borrowed pursuant to the Amended and Restated Senior Secured Credit Agreement are guaranteed by the Company and certain of its subsidiaries (the “Guarantors”). A first priority security interest in respect of all of the capital stock of certain of the subsidiaries of DHX Media Ltd. has been provided in favour of the syndicate of lenders, as well as all present and after acquired real and personal property of the Guarantors.

a) Bank indebtedness

As of December 31, 2015, the Amended and Restated Senior Secured Credit Agreement provides for a revolving facility (the “Amended Revolving Facility”) and a term facility (the “Amended Term Facility”). The Amended Revolving Facility is available to a maximum amount of $30,000, maturing on July 31, 2019. The Amended Revolving Facility may be drawn down by way of either $CDN bankers acceptances, $CDN prime, $USD base rate, $USD, €EUR and/or £GBP LIBOR advances (the “Drawdown Rate”) and bears interest at a floating rate ranging from the Drawdown Rate + 1.25% to the Drawdown Rate + 4.50% of the outstanding Amended Revolving Facility. At March 31, 2016, the entire amount of Amended Revolving Facility was payable in British pounds being £GBP 1,800 (June 30, 2015 - £GBP nil).

As at March 31, 2016, the Company had undrawn bank indebtedness of $26,642 available.

(7)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

7 Bank indebtedness, interim production financing, long-term debt and obligations under finance leases (continued)

b) Interim production financing

	March 31,  2016		June 30,  2015
	$		$
Interim production credit facilities with various institutions, bearing interest at bank prime plus 0.65% - 1.20%.  Assignment and direction of specific production financing, licensing contracts receivable and film tax credits receivable with a net book value of approximately $103,322 at March 31, 2016 (June 30, 2015 - $78,617).		88,445		67,743

As of March 31, 2016, the Company had $13,410 (June 30, 2015 - $16,604) in undrawn interim production financing pursuant to an agreement entered into on August 5, 2014 with CIBC Commercial Banking to provide a $20,000 demand revolving loan, available by way of an unlimited number of individual loans (the “Segment Loans”) made to finance production expenses related to eligible productions (the “Eligible Productions”). The Segment Loans may be drawn down in either Canadian dollars or US dollars and bear interest of $CDN prime plus 0.75% or $USD base rate plus 0.75%, respectively. Each Segment Loan is secured by the tangible and intangible assets of each Eligible Production, assignment and direction of production financing contracts and tax credits and a subordinated, unsecured guarantee from DHX Media Ltd.

During the nine months ended March 31, 2016, the $CDN bank prime rate averaged 2.71% (year ended June 30, 2015 - 2.93%).

Federal and provincial film tax credits receivable (see note 4) are provided as security for the interim production financing. Upon collection of the film tax credits, the related interim production financing is repaid, as required by the financing agreement.

c) Long-term debt and obligations under capital leases

	March 31,  2016			June 30,  2015
	$			$
Amended Term Facility entered into pursuant to the Amended and Restated Senior Secured Credit Facility Agreement, (note 7(c)(i)), net of unamortized issuance costs of $2,412 (June 30, 2015 - $2,476)		146,450			109,747
Senior Unsecured Notes net of issuance costs, fair value of the Redemption Option and the unamortized premium of $4,362 (June 30, 2015 - $5,094) (note 7 (c)(ii))		170,668			169,520
Obligations under various finance leases, bearing interest at rates ranging from 4.0% to 9.8%, maturing on dates ranging from April 2016 to February 2019		4,278			3,551
		321,396			282,818
Less: Current portion		(17,862	)		(12,916	)
		303,534			269,902

(8)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

7 Bank indebtedness, interim production financing, long-term debt and obligations under finance leases (continued)

c) Long-term debt and obligations under capital leases (continued)

(i) Amended Term Facility

The Amended and Restated Senior Secured Credit Agreement entered into on July 31, 2014, commensurate with the closing of the Company’s acquisition of DHX Television, provided for an Amended Term Facility with an initial principal amount of up to $235,000, maturing on July 31, 2019.

Effective November 13, 2014, commensurate with the closing of the Company’s acquisition of the Echo Bridge assets, the Amended Term Facility was amended to include an additional principal amount of US$12,000, maturing on July 31, 2019.

In conjunction with the issuance of the senior unsecured notes ("Senior Unsecured Notes" or "Notes"), the Company made a principal repayment on the Amended Term Facility of $151,760 and, accordingly, recognized a debt extinguishment charge, being a portion of the previously unamortized debt issue costs at the time of the principal repayment.

Effective December 23, 2014, commensurate with the closing of the Company’s acquisition of Nerd Corps, the Amended Term Facility was amended to include an additional principal amount of $20,000, maturing on July 31, 2019.

Effective December 31, 2015, the Amended Term Facility was amended to include additional principal amounts of $20,000 and US$20,000, maturing on July 31, 2019.

The Amended Term Facility is repayable in annual amortization payments (as a percentage of the principal amount of the Amended Term Facility) of 10% annually, payable in equal quarterly installments, which commenced on December 31, 2014, with the remaining balance due on maturity, which is July 31, 2019.

The Amended Term Facility may be drawn down by way of the Drawdown Rate and bears interest at a floating rate ranging from the Drawdown Rate + 1.25% to + 4.50%. All amounts borrowed pursuant to the Senior Amended and Restated Senior Secured Credit Agreement are guaranteed by the Guarantors. A first priority security interest in respect of all of the capital stock of certain of the subsidiaries of DHX Media Ltd. has been provided in favour of the syndicate of lenders, as well as all present and after acquired real and personal property of the Guarantors of the Amended Term Facility outstanding.

As at March 31, 2016, the Amended Term Facility is fully drawn, and the amount payable in US dollars was US$37,737 (June 30, 2015 - US$19,846); the remainder of the Amended Term Facility is payable in Canadian dollars.

The Senior Secured Credit Facilities require that the Company comply with certain financial ratios, including but not limited to:

• Leverage Ratio, defined as net funded debt (the total of all obligations for borrowed money which bear interest or imputed interest, net of all non-production cash, excluding interim production financing, all capital lease obligations, and any contingent liabilities (“Net Funded Debt”) to consolidated adjusted EBITDA (rolling consolidated adjusted EBITDA, pro-forma last 12 months) less foreign exchange gains or losses on intercompany debt, production-related EBITDA and certain acquisition costs), which must be maintained at less than 3.50.

(9)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

7 Bank indebtedness, interim production financing, long-term debt and obligations under finance leases (continued)

c) Long-term debt and obligations under finance leases (continued)

• The Fixed Charge Ratio, defined as consolidated adjusted EBITDA less current income taxes and unfunded capital expenditures to fixed charges (consolidated interest expense and scheduled principal payments on Funded Debt) which must be maintained at greater than 1.5.

As at March 31, 2016, the Company is in compliance with these ratios.

(ii) Senior Unsecured Notes

On December 2, 2014, the Company completed a private placement of Senior Unsecured Notes due on December 2, 2021, with an aggregate principal amount of $175,000. The Senior Unsecured Notes bear interest of 5.875% per annum, payable semi-annually in arrears on June 2 and December 2 of each year until maturity. The first interest payment was paid on June 2, 2015. The Senior Unsecured Notes are guaranteed by the Company and certain of its subsidiaries and are unsecured obligations.

As at March 31, 2016, the outstanding principal amount due on the Senior Unsecured Notes was $175,000 (June 30, 2015 - $175,000).

Net proceeds of $169,760 from the issuance of the Senior Unsecured Notes were used to repay debt under the Company’s Amended and Restated Senior Secured Credit Agreement, with $18,000 being repaid on the Amended Revolving Facility and $151,760 being repaid on the Amended Term Facility.

The Senior Unsecured Notes contain embedded derivatives (the “Embedded Derivatives”). The Senior Unsecured Notes contain a redemption option (the "Redemption Option") whereby the Company can redeem all or part of the Senior Unsecured Notes. The Senior Unsecured Notes also contain a put option (the “Put Option”) whereby the lender can redeem all or part of the Senior Unsecured Notes upon a change of control of the Company. The Embedded Derivatives are required to be accounted for as separate embedded derivative financial instruments. On initial recognition, the Embedded Derivatives are recorded at their calculated fair values and grouped with the Senior Unsecured Notes. The Embedded Derivatives are adjusted to their fair values at each reporting date and any change in fair value is recorded within finance income/expense in the consolidated statements of income (note 10). On initial recognition, the carrying value of the Senior Unsecured Notes was reduced by the net fair value of the Embedded Derivatives, and is amortized over the term of the Senior Unsecured Notes.

The Notes contain non-financial covenants and customary events of default clauses. As of March 31, 2016, the Company was in compliance with all of its covenants under the Notes.

(iii) Principal repayments and undrawn borrowing facilities

The aggregate amount of principal repayments required in each of the next five years is as follows:

	$
Year ended June 30, 2016		4,693
2017		18,705
2018		18,168
2019		17,285
2020 and beyond		269,285

(10)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

8 Share capital and contributed surplus

Common shares

The common shares of the Company are inclusive of Common Voting Shares, Variable Voting Shares and Non-Voting Shares. As at March 31, 2016, the Company had 96,951,091 Common Voting Shares, 28,103,770 Variable Voting Shares and nil Non-Voting Shares issued and outstanding.

During the nine months ended March 31, 2016, the Company issued 23,802 common shares, at an average price of $8.39 as part of the Company’s employee share purchase plan.

During the nine months ended March 31, 2016, 1,663,125 common shares were issued out of treasury at an average price of $1.65 upon exercise of stock options.

During the nine months ended March 31, 2016, the Company issued 44,622 shares at an average price of $7.48, as part of the shareholder enrollment in the Company's dividend reinvestment program.

During the nine months ended March 31, 2016, the Company repurchased and cancelled 659,000 Common Voting Shares at an average price of $7.64 for gross costs of $5,040 pursuant to a normal course issuer bid.

Options

On October 1, 2015, 1,446,500 stock options were issued to employees at $8.40 per share, vesting over four years, expiring on September 30, 2022.

On November 19, 2015, 25,000 stock options were issued to an employee at $8.03 per share, vesting over four years, expiring on November 18, 2022.

On December 18, 2015, 600,000 stock options were issued to an employee at $8.32 per share, vesting over three and four years, expiring on December 17, 2022.

On February 19, 2016, 350,000 stock options were issued to employees at $6.93 per share, vesting over four years, expiring on February 18, 2023.

On February 29, 2016, 25,000 stock options were issued to an employee at $6.76 per share, vesting over four years, expiring on February 28, 2023.

The weighted average grant date value of stock options and assumptions using the Black-Scholes option pricing model for the nine months ended March 31, 2016 are as follows:

Weighted average grant value date	$	2.75
Risk free interest rate		0.64	%
Expected option life		5 years
Expected volatility		41	%
Expected dividend yield		0.75	%

Changes in the assumptions can materially affect the fair value of estimates and therefore, the existing models do not necessarily provide a reliable measure of the fair value of stock options.

During the nine months ended March 31, 2016, 1,663,125 stock options were exercised at an average price of $1.65 per share for total proceeds of $2,746.

(11)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

9 Income taxes

Significant components of the Company’s net deferred income tax liability as at March 31, 2016 and June 30, 2015 are as follows:

	March 31,  2016			June 30,  2015
	$			$
Broadcast licenses		(8,984	)		(8,984	)
Tangible benefit obligation		3,261			3,979
Leasehold inducement		194			169
Foreign tax credits		303			303
Participation payables and finance lease obligations and other liabilities		64			64
Property and equipment		(1,180	)		(1,379	)
Share issuance costs and deferred financing fees		709			997
Investment in film and television programs		(14,580	)		(15,064	)
Intangible assets		(9,018	)		(11,735	)
Non-capital losses and other		12,080			8,621
Net deferred income tax liability		(17,151	)		(23,029	)

Deferred income tax liabilities have not been recognized for the withholding tax and other taxes that would be payable on unremitted earnings of certain subsidiaries, as such amounts are permanently reinvested. Unremitted earnings totalled $29,267 at March 31, 2016 (June 30, 2015 - $12,944).

The reconciliation of income taxes computed at the statutory tax rates to income tax expense (recovery) is as follows:

	Three months ended						Nine months ended
	March 31,  2016			March 31,  2015			March 31,  2016			March 31,  2015
	$			$			$			$
Income tax expense based on combined federal and provincial tax rates of 31% (March 31, 2015 - 31%)		3,402			7,657			10,791			6,864
Income taxes increased (reduced) by:
Share-based compensation		509			428			1,410			958
Non-deductible acquisition costs		—			114			—			765
Tax rate differential		(1,280	)		(974	)		(3,634	)		(1,459	)
Other		(1,875	)		(559	)		(3,173	)		(825	)
Provision for (recovery of) income taxes		756			6,666			5,394			6,303

The Company operates in multiple jurisdictions with differing tax rates. The Company’s effective tax rates are dependent on the jurisdiction to which income relates.

(12)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

10 Finance income and finance expense

Finance income and finance expense are comprised of the following:

	Three months ended					Nine months ended
	March 31,  2016		March 31,  2015			March 31,  2016			March 31,  2015
	$		$			$			$
Finance income
Interest income		104		42			264			216
Net foreign exchange gain		—		7,984			—			10,278
		104		8,026			264			10,494
Finance expense
Interest expense on bank indebtedness		118		264			411			1,152
Accretion of tangible benefit obligation		168		217			628			578
Interest on long-term debt, obligations under finance leases and other		5,366		4,058			13,880			10,434
Movement in fair value of the Embedded Derivatives on the Senior Unsecured Notes (note 7)		250		(1,066	)		1,000			(1,341	)
Debt extinguishment charge		—		—			—			3,912
Amortization of debt premium on Senior Unsecured Notes (note 7)		7		(71	)		21			(94	)
Net foreign exchange loss (gain)		5,996		—			(652	)		—
		11,905		3,402			15,288			14,641

(13)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

11 Expenses by nature and employee benefit expense

The following sets out the expenses by nature:

	Three months ended					NIne months ended
	March 31,  2016		March 31,  2015			March 31,  2016		March 31,  2015
	$		$
Investment in film and television programs
Direct production and new media costs		15,828		8,577			29,240		18,143
Expense of film and television programs		12,595		20,312			47,786		36,958
Expense of film and broadcast rights for broadcasting		4,494		10,472			19,563		27,681
Expense of acquired library		3,044		5,022			12,456		11,047
Write-down of investment in film and television programs		450		517			950		532
Development expenses and other		1,667		807			4,122		2,712
Office and administrative		8,641		6,069			19,425		15,564
Tangible benefit obligation expense		—		—			—		14,215
Finance expense, net		11,801		(4,624	)		15,024		4,147
Investor relations and marketing		181		550			898		922
Professional and regulatory		1,346		565			3,091		6,847
Amortization of property and equipment and intangible assets		3,937		3,434			10,610		7,235
		63,984		51,701			163,165		146,003
The following sets out the components of employee benefits expense:
Salaries and employee benefits		7,608		7,806			27,075		21,637
Share-based compensation		1,528		1,378			4,436		3,089
		9,136		9,184			31,511		24,726
		73,120		60,885			194,676		170,729

12 Financial instruments

Financial instruments recorded at fair value on the consolidated balance sheet are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The value hierarchy has the following levels:

Level 1 -	valuation based on quoted prices observed in active markets for identical assets and liabilities.
Level 2 -	valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 -	valuation techniques with significant unobservable market inputs.

A financial instrument is classified to the lowest of the hierarchy for which a significant input has been considered in measuring fair value.

(14)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

12 Financial instruments (continued)

Fair value estimates are made at a specific point in time based on relevant market information. These are estimates and involve uncertainties and matters of significant judgment and cannot be determined with precision. Change in assumptions and estimates could significantly affect fair values.

Financial assets and liabilities measured at fair value

	As at
	March 31, 2016					June 30, 2015
	Fair value hierarchy		Fair value liability(1)			Fair value hierarchy		Fair value liability(1)
Embedded Derivatives (2)		Level 2		(518	)		Level 2		482

⁽¹⁾ The Company values its derivatives using valuations that are calibrated to the initial trade prices. Subsequent valuations are based on observable inputs to the valuation model.

⁽²⁾ The fair values of the Embedded Derivatives are determined using valuation models.

Financial assets and liabilities not measured at fair value

The carrying amounts reported on the financial statements for cash and cash equivalents, restricted cash, trade receivables and accounts payable and accrued liabilities all approximate their fair values due to their immediate or short-term nature. Bank indebtedness was renegotiated during the previous year to reflect current interest rates; therefore, management believes the carrying amounts also approximate their fair values.

The following table summarizes the fair value and carrying value of other financial assets and liabilities that are not recognized at fair value on a recurring basis on the consolidated balance sheets:

	As at
	March 31, 2016								June 30, 2015
	Fair value hierarchy		Fair value liability			Carrying value			Fair value hierarchy		Fair value liability			Carrying value
Amended Term Facility (1)		Level 1		(146,450	)		(146,450	)		Level 2		(109,746	)		(109,746	)
Senior Secured Notes (2)		Level 2		(172,731	)		(171,433	)		Level 2		(173,250	)		(170,161	)
Obligations under finance leases (3)		Level 2		(4,278	)		(4,278	)		Level 2		(3,551	)		(3,551	)
Interim production financing (4)		Level 2		(88,445	)		(88,445	)		Level 2		(67,743	)		(67,743	)
Other liabilities (5)		Level 3		(22,488	)		(22,488	)		Level 3		(12,542	)		(12,542	)

⁽¹⁾ The interest rates on the Amended Term Facility resets every 90 days; therefore, the fair value, using a market approach approximates the carrying value.

⁽²⁾ Management estimates the fair value using a market approach, based on publicly disclosed trades between arm's length parties.

⁽³⁾ Management estimates the fair value using a discounted cash flow analysis, based on discount rates that reflect current conditions.

⁽⁴⁾ Variable interest rates were renegotiated during the previous year, therefore management believes the fair value approximates the carrying value.

⁽⁵⁾ The fair value of other liabilities, which includes the tangible benefit obligation and the long-term portion of certain other contractual liabilities, was estimated based on discounting the expected future cash flows at 6%. The key unobservable assumptions in calculating the fair value are the timing of the payments over the next six years related to the tangible benefit obligation included in other liabilities, and the discount rate used for discounting the other liabilities.

(15)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

13 Commitments and contingencies

Commitments

The Company has entered into various operating leases for operating premises and equipment. The future aggregate minimum payments are as follows:

	$
Year ended June 30, 2016		1,786
2017		7,395
2018		6,411
2019		5,172
Beyond 2019		25,841

The Company has entered into various contracts to buy broadcast rights with future commitments totalling $15,104.

Contingencies

The Company is, from time-to-time, involved in various claims, legal proceedings and complaints arising in the normal course of business and as such, provisions have been recorded where appropriate. Management does not believe that the final determination of these claims will have a material adverse effect on the financial position or results of operations of the Company. The maximum exposure at March 31, 2016, related to the above matters is estimated at $400.

14 Capital disclosures

The Company’s objectives when managing capital are to provide an adequate return to shareholders, safeguard its assets, maintain a competitive cost structure and continue as a going concern in order to pursue the development, production, distribution and licensing of its film and television properties and to sustain the operations of DHX Television. During the nine months ended March 31, 2016, the Company declared dividends totalling $5,744 (March 31, 2015 - $4,848). The balance of the Company’s cash is being used to maximize ongoing development and growth effort.

The Company’s capital is summarized in the table below:

	March 31,  2016			June 30,  2015
	$			$
Total bank indebtedness, long-term debt and obligations under capital leases		324,754			282,818
Less: Cash		(48,741	)		(42,907	)
Net debt		276,013			239,911
Total Shareholders’ Equity		278,952			261,954
		554,965			501,865

To facilitate the management of its capital structure, the Company prepares annual expenditure operating budgets that are updated as necessary depending on various factors including industry conditions and operating cash flow. The annual and updated budgets are reviewed by the Board of Directors.

(16)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

15 Earnings per common share

a) Basic

Basic earnings per share is calculated by dividing the net income by the weighted average number of common shares in issue during the period.

	Three months ended				Nine months ended
	March 31,  2016		March 31,  2015		March 31,  2016		March 31,  2015
	$		$		$		$
Net income		10,219		18,031		29,414		15,837
Weighted average number of common shares		125,217,741		123,206,989		124,644,405		121,156,759
Basic earnings per share		0.08		0.15		0.24		0.13

b) Diluted

Diluted earnings per common share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all potentially dilutive instruments which are convertible into common shares. The Company has two categories of potentially dilutive instruments which are convertible into common shares: stock options and warrants. For both the stock options and the warrants, a calculation is completed to determine the number of common shares that could have been acquired at fair value (determined as the average market price of the Company’s outstanding common shares for the period), based on the monetary value of the subscription rights attached to the stock options and warrants. The number of shares calculated above is compared with the number of shares that would have been issued assuming exercises of the warrants and stock options.

For the three and nine months ended March 31, 2016 the weighted average number of potentially dilutive instruments, comprised of shares issuable in respect of warrants and stock options, was 1,000,197 and 1,716,841 respectively (March 31, 2015 2,890,772 and 3,045,221).

	Three months ended				Nine months ended
	March 31,  2016		March 31,  2015		March 31,  2016		March 31,  2015
	$		$		$		$
Net income		10,219		18,031		29,414		15,837
Weighted average number of common shares		126,217,938		126,097,761		126,361,246		124,201,980
Diluted earnings per share		0.08		0.14		0.23		0.13

(17)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

16 Net change in non-cash balances related to operations

	March 31,  2016			March 31,  2015
	$			$
Increase in amounts receivable		(43,118	)		(29,795	)
Decrease in prepaid expenses and deposits		13,992			672
Decrease in long-term amounts receivable		(2,948	)		(1,714	)
Increase in accounts payable and accrued liabilities		14,444			20,265
Increase (decrease) in deferred revenue		(6,211	)		3,163
Tangible benefit obligation payments		(2,754	)		—
		(26,595	)		(7,409	)
During the period, the Company paid and received the following:
		$			$
Interest paid		16,091			16,808
Interest received		264			101
Taxes paid		6,619			6,219

Net investment in film and television programs

	March 31,  2016			March 31,  2015
	$			$
Expense of film and television programs		47,786			36,959
Expense of film and broadcast rights for broadcasting		19,563			27,681
Expense of acquired library		12,456			11,046
Decrease (increase) in development		(44	)		141
Increase in theatrical productions in progress		(5,759	)		(869	)
Increase in non-theatrical productions completed and released		(68,154	)		(59,139	)
Increase in program and film rights - broadcasting		(52,657	)		(25,434	)
		(46,809	)		(9,615	)

(18)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

17 Revenues and segmented information

The Company operates production entities and offices throughout Canada, the United States and Europe. In measuring performance, the Company does not distinguish or group its production, distribution and merchandising operations ("Core Business") on a geographic basis. The Company has determined that it has three reportable segments being the Core Business, CPLG, which manages copyrights, licensing and brands for third parties and DHX Television.

	Three months ended March 31, 2016
	CPLG		DHX Television		Core Business		Consolidated
	$		$		$		$
Revenues		7,416		15,727		60,952		84,095
Direct production cost and expenses, general and administrative expenses		5,771		8,839		40,655		55,265
Segment profit		1,645		6,888		20,297		28,830
Amortization								3,937
Finance expense, net								11,801
Other expense, net								2,117
Income before income taxes								10,975

	Three months ended March 31, 2015
	CPLG		DHX Television		Core Business		Consolidated
	$		$		$		$
Revenues		3,467		20,414		61,701		85,582
Direct production cost and expenses, general and administrative expenses		2,850		13,710		44,191		60,751
Segment profit		617		6,704		17,510		24,831
Amortization								3,434
Finance expense, net								(4,624	)
Acquisition costs								—
Other expense, net								1,324
Income before income taxes								24,697

(19)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

17 Revenues and segmented information (continued)

	Nine months ended March 31, 2016
	CPLG		DHX Television		Core Business		Consolidated
	$		$		$		$
Revenues		21,247		53,327		154,911		229,485
Direct production cost and expenses, general and administrative expenses		13,521		33,177		117,272		163,970
Segment profit		7,726		20,150		37,639		65,515
Amortization								10,610
Finance expense, net								15,024
Other expense, net								5,072
Income before income taxes								34,809

	As at March 31, 2016
Non-current assets
Long-term amounts receivable		—	—	14,039	14,039
Deferred financing fees		—	—	571	571
Property and equipment		350	636	17,000	17,986
Intangible assets		9,082	72,652	68,589	150,323
Goodwill		—	29,864	182,237	212,101
		9,432	103,152	282,436	395,020

	As at March 31, 2016
Current liabilities
Bank indebtedness		—	—	3,358	3,358
Accounts payable and accrued liabilities		12,375	25,793	87,557	125,725
Deferred revenue		1,542	—	42,306	43,848
Interim production financing		—	—	88,445	88,445
Current portion of long-term debt and obligations under finance leases		—	—	17,862	17,862
		13,917	25,793	239,528	279,238

(20)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

17 Revenues and segmented information (continued)

	Nine months ended March 31, 2015
	CPLG		DHX Television		Core Business		Consolidated
	$		$		$		$
Revenues		9,495		56,312		127,062		192,869
Direct production cost and expenses, general and administrative expenses		8,515		37,088		91,290		136,893
Segment profit		980		19,224		35,772		55,976
Amortization								7,235
Finance expense, net								4,147
Acquisition costs								4,995
Other expense, net								17,459
Income before income taxes								22,140

	As at June 30, 2015
Non-current assets
Long-term amounts receivable		—	—	11,091	11,091
Deferred financing fees		—	—	706	706
Property and equipment		549	918	16,350	17,817
Intangible assets		10,743	73,087	43,566	127,396
Goodwill		—	29,864	184,077	213,941
		11,292	103,869	255,790	370,951

	As at June 30, 2015
Current liabilities
Accounts payable and accrued liabilities		12,458	18,806	77,879	109,143
Deferred revenue		2,690	—	46,633	49,323
Interim production financing		—	—	67,743	67,743
Current portion of long-term debt and obligations under finance leases		—	—	12,916	12,916
		15,148	18,806	205,171	239,125

(21)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

17 Revenues and segmented information (continued)

The following table presents further components of revenue derived from the following areas:

	Three months ended				Nine months ended
	March 31,  2016		March 31,  2015		March 31,  2016		March 31,  2015
	$		$		$		$
Core Business
Production revenue		12,106		15,046		36,919		32,965
Distribution revenue		23,933		30,484		56,541		53,235
Producer and service fee revenue		14,048		8,208		39,839		21,471
Merchandising and licensing and other revenue		10,863		7,963		21,612		19,391
		60,950		61,701		154,911		127,062
DHX Television revenue
Subscriber revenue		14,491		18,271		46,764		48,603
Promotion and advertising revenue		1,235		2,143		6,563		7,709
		15,726		20,414		53,327		56,312
CPLG
Third party brand representation revenue		7,419		3,467		21,247		9,495
		84,095		85,582		229,485		192,869

Of the Company’s $84,095 and $229,485 in revenues for the three and nine months ended March 31, 2016, (March 31, 2015 - $85,582 and $192,869), $49,604 and $140,597 was attributable to the Company’s entities based in Canada (March 31, 2015 - $73,721 and $160,274), $792 and $4,746 (March 31, 2015 - $5,198 and $11,109) was attributable to the Company’s entities based in the USA and $33,699 and $84,142 (March 31, 2015 - $6,663 and $21,486) was attributable to the Companies entities based outside of Canada and the USA.

As at March 31, 2016, the following non-current assets were attributable to the Company’s entities based in the USA: $122 of property and equipment, $224 of intangible assets, and $893 of goodwill (June 30, 2015 - $180, $266, $867, respectively). As at March 31, 2016, the following non-current assets were attributable to the Company’s entities based outside of Canada and the USA: $472 of property and equipment, $13,090 of intangible assets and $4,172 of goodwill (June 30, 2015 - $549, $14,364, and $4,615 respectively). All other non-current assets were attributable to the Company’s entities based in Canada.

(22)

DHX Media Ltd.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the period ended March 31, 2016

(expressed in thousands of Canadian dollars unless otherwise noted, except for amounts per share)

18 Subsequent events

a) On May 2, 2016, the Company closed a bought deal public offering of shares (the “Equity Offering”), comprised of both Variable Voting Shares and Common Voting Shares (collectively, the “Shares”) through a syndicate of underwriters (the “Underwriters”), pursuant to which the Company issued 8,667,000 Shares of the Company at a price of $7.50 per Share for aggregate gross proceeds of $65.0 million.  As part of the Equity Offering, the Company granted to the Underwriters an over-allotment option exercisable at any time up to 30 days after closing of the Equity Offering to acquire up to an additional 1,300,050 Shares. In the event that the over-allotment option is exercised in full, the aggregate gross proceeds of the Equity Offering will be approximately $74.8 million.  The net proceeds from the Equity Offering will be used to repay borrowings under the Company’s Amended Term Facility, to fund its third party content properties and associated global distribution plans, and for general corporate and working capital purposes, including potential acquisitions.

b) On May 13, 2016, the Company closed a private offering (the “Bond Offering”) of an additional $50 million aggregate principal amount of its 5.875% Senior Unsecured Notes due December 2, 2021 through a syndicate of underwriters at a price of $975.00 per $1,000.00 principal amount, plus accrued interest from and including December 2, 2015 through May 13, 2016.  The net proceeds of the Bond Offering will be used to repay borrowings under the Company’s Amended Term Facility.

(23)

EX-99.4

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Dana Landry, the Chief Executive Officer of DHX Media Ltd., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of DHX Media Ltd. (the “issuer”) for the interim period ended March 31, 2016.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 

4. Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings

a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013 COSO Framework) published by The Committee of Sponsoring Organizations of Sponsoring Organization of the Treadway Commission.

5.2 ICFR – material weakness relating to design: N/A

5.3 Limitation on scope of design: N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2016 and ended on March 31, 2016 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. 

Date: May 16, 2016

(signed) “Dana Landry”

Chief Executive Officer

DHX Media Ltd. 

EX-99.5

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Keith Abriel, the Chief Financial Officer of DHX Media Ltd., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of DHX Media Ltd. (the “issuer”) for the interim period ended March 31, 2016.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 

4. Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings

a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013 COSO Framework) published by The Committee of Sponsoring Organizations of Sponsoring Organization of the Treadway Commission.

5.2 ICFR – material weakness relating to design: N/A

5.3 Limitation on scope of design: N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2016 and ended on March 31, 2016 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. 

Date: May 16, 2016

(signed) “Keith Abriel”

Chief Financial Officer

DHX Media Ltd.