MONTREAL, CANADA--(Marketwired - Nov 4, 2014) - TVA Group Inc. (the "Corporation") (TSX:TVA.B) announces that it recorded a net loss attributable to shareholders in the amount of $35.7 million, or $1.50 per share, in the third quarter of 2014, compared with net income attributable to shareholders of $6.3 million, or $0.27 per share, in the same quarter of 2013.

During the third quarter of 2014, the Corporation continued to be negatively affected by declining advertising revenues, particularly at its over-the-air television network. In view of observed trends in the television industry and in the media landscape in general, the Corporation reviewed its business plan and operating forecasts, particularly in the Broadcasting & Production segment. The Corporation concluded that the recoverable amounts were less than the carrying amounts of its broadcasting licence and goodwill. As a result, non-cash impairment charges of $32,462,000 and $8,538,000 respectively were recorded with respect to those assets.

Third quarter operating highlights:

  • The consolidated adjusted operating income1 totalled $7,638,000 compared with $18,401,000 for the same quarter of 2013.
  • The Broadcasting & Production segment generate an adjusted operating income of $4,796,000, an $9,956,000 unfavourable variance primarily due to:
    • recognition in third quarter of 2013 of $6,841,000 in retroactive royalties on the retransmission of its television signals in markets located outside the local service areas of its over-the-air stations;
    • 7.6% decrease in advertising revenues at TVA Network;

partially offset by:

    • decrease in the adjusted operating loss of the specialty services, directly attributable to the TVA Sports channel.
  • The Magazines segment generated an adjusted operating income in the amount of $2,842,000, an $807,000 unfavourable variance due mainly to the 8.5% decrease in operating revenues exceeded the reduction in expenses resulting from volume-related cost savings.

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

"As the entire media industry faces a challenging business environment, advertising revenues continued to decline during the third quarter of 2014 at both TVA Network and our specialty services," commented Julie Tremblay, President and CEO of the Corporation.

"However, we also achieved a noteworthy success during the quarter: TVA Sports' advertising revenues are soaring and its subscription revenues were up 104%. The response to National Hockey League games on TVA Sports has been enormously positive, with audiences of up to 1.4 million and a market share of more than 25%. Fan response to our multiplatform offering has also been very strong, with more than 100,000 downloads of our 'TVA Sports' and 'TVA Sports-Hockey' applications. Meanwhile, TVA Network continued scoring ratings successes: it had 19 of the top 30 shows during the last quarter. For example, TVA's new program L'Été indien, the first Quebec variety show to be aired in France and other countries, drew more than 1.7 million viewers in Quebec alone," also commented Julie Tremblay.

"The Magazines segment saw an across-the-board decline in operating revenues during the quarter. Among other things, advertising revenues were down 9.3%, excluding the magazines that ceased publication in the first quarter of 2014. Fortunately, the operating expense reduction plan instituted in 2013 and our decision to stop publishing certain titles in the first quarter of 2014 enabled us to maintain a 17.5% profit margin in the third quarter of 2014," concluded Julie Tremblay.

Cash flows provided by operating activities totalled $6.3 million in the quarter, compared with $13.0 million in the same quarter of 2013. The decrease was essentially due to the decline in adjusted operating income.

Definition

Adjusted operating income (loss)

In its analysis of operating results, the Corporation defines adjusted operating income (loss) as net income (loss) before amortization of property, plant and equipment and intangible assets, financial expenses, operational restructuring costs, impairment of assets and other costs, income taxes and share of loss (income) of associated corporations. Adjusted operating income (loss) as defined above is not a measure of results that is consistent with International Financial Reporting Standards ("IFRS"). Neither is it intended to be regarded as an alternative to other financial performance measures or to the statement of cash flows as a measure of liquidity. This measure should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS.

This measure is used by management and the Board of Directors to evaluate the Corporation's consolidated results and the results of its business segments. This measure eliminates the significant level of impairment and amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments. Adjusted operating income (loss) is also relevant because it is a significant component of the Corporation's annual incentive compensation programs. The Corporation's definition of adjusted operating income (loss) may not be identical to similarly titled measures reported by other companies.

Forward-looking information disclaimer

The statements in this news release that are not historical facts may be forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Corporation's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements generally can be identified by the use of the conditional, the use of forward-looking terminology such as "propose," "will," "expect," "may," "anticipate," "intend," "estimate," "plan," "foresee," "believe" or the negative of these terms or variations of them or similar terminology. Factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors), programming, content and production cost risks, credit risk, government regulation risks, government assistance risks, changes in economic conditions, fragmentation of the media landscape, and labour relation risks. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause the Corporation's actual results to differ from current expectations please refer to the Corporation's public filings available at www.sedar.com and http://groupetva.ca including, in particular, the "Risks and Uncertainties" section of the Corporation's annual Management's Discussion and Analysis for the year ended December 31, 2013.

The forward-looking statements in this news release reflect the Corporation's expectations as of November 4, 2014, and are subject to change after this date. The Corporation expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.

TVA Group

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

TVA GROUP INC.
Consolidated statements of (loss) income
(unaudited)
(in thousands of Canadian dollars, except per-share amounts)
Three-month periodsNine-month periods
ended September 30ended September 30
Note2014201320142013
Revenues3$94,525$102,217$309,546$324,794
Purchases of goods and services4,1257,10552,051191,508183,966
Employee costs29,78231,76595,426100,592
Amortization of property, plant and equipment and intangible assets5,8705,49416,57115,956
Financial expenses51,0781,5883,1734,789
Impairment of a licence and goodwill641,000-41,000-
Operational restructuring costs, impairment of assets and other costs71098751093,874
(Loss) income before tax (recovery) expense and share of loss of associated corporations
(40,419		)
10,444
(38,241		)
15,617
Tax (recovery) expense(6,176)2,444(6,695)3,546
Share of loss of associated corporations1,4271,6755,1244,653
Net (loss) income attributable to shareholders$(35,670)$6,325$(36,670)$7,418
Basic and diluted (loss) earnings per share attributable to shareholders9 c)$(1.50)$0.27$(1.54)$0.31

See accompanying notes to condensed consolidated financial statements.

TVA GROUP INC.
Consolidated statements of comprehensive (loss) income
(unaudited)
(in thousands of Canadian dollars)
Three-month periodsNine-month periods
ended September 30ended September 30
2014201320142013
Net (loss) income$(35,670)$6,325$(36,670)$7,418
Other comprehensive items that will not be reclassified to income:
Defined benefit plans:
Re-measurement gain-24,000-24,000
Deferred income taxes-(6,500)-(6,500)
-17,500-17,500
Comprehensive (loss) income attributable to shareholders$(35,670)$23,825$(36,670)$24,918

See accompanying notes to condensed consolidated financial statements.

TVA GROUP INC.
Consolidated statements of equity
(unaudited)
(in thousands of Canadian dollars)
Equity attributable to shareholders
Total
equity




Capital
stock
(note 9)




Contributed
surplus




Retained
earnings		Accumula-
ted other
comprehen-
sive (loss)
income -
Defined
benefit plans
Balance as at December 31, 2012$98,647$581$187,937$(20,620)$266,545
Net income--7,418-7,418
Other comprehensive income---17,50017,500
Balance as at September 30, 201398,647581195,355(3,120)291,463
Net income--8,328-8,328
Other comprehensive income---8,2688,268
Balance as at December 31, 201398,647581203,6835,148308,059
Net loss--(36,670)-(36,670)
Balance as at September 30, 2014$98,647$581$167,013$5,148$271,389

See accompanying notes to condensed consolidated financial statements.

TVA GROUP INC.
Consolidated balance sheets
(unaudited)
(in thousands of Canadian dollars)
September 30,December 31,
Note20142013
Assets
Current assets
Cash$10,279$7,717
Accounts receivable108,752136,408
Income taxes7,074124
Programs, broadcast and distribution rights and inventories761,78161,428
Prepaid expenses3,2042,380
191,090208,057
Non-current assets
Broadcast and distribution rights736,29631,985
Investments14,24614,822
Property, plant and equipment103,310100,962
Licences and other intangible assets677,432112,566
Goodwill635,93144,536
Defined benefit plan asset14,5158,238
Deferred income taxes675885
282,405313,994
Total assets$473,495$522,051
TVA GROUP INC.
Consolidated balance sheets (continued)
(unaudited)
(in thousands of Canadian dollars)
September 30,December 31,
Note20142013
Liabilities and equity
Current liabilities
Accounts payable and accrued liabilities $74,773$85,960
Income taxes4681,828
Broadcast and distribution rights payable20,62917,304
Provisions230645
Deferred revenues8,4989,302
Short-term debt1474,79174,640
179,389189,679
Non-current liabilities
Other liabilities6,7323,974
Deferred income taxes15,98520,339
22,71724,313
Equity
Capital stock998,64798,647
Contributed surplus581581
Retained earnings167,013203,683
Accumulated other comprehensive income5,1485,148
Equity attributable to shareholders271,389308,059
Guarantees12
Event after the reporting period14
Total liabilities and equity $473,495$522,051

See accompanying notes to condensed consolidated financial statements.

On November 4, 2014, the Board of Directors approved the condensed consolidated financial statements for the three- month and nine-month periods ended September 30, 2014 and 2013.

TVA GROUP INC.
Consolidated statements of cash flows
(unaudited)
(in thousands of Canadian dollars)
Three-month periodsNine-month periods
ended September 30ended September 30
Note2014201320142013
Cash flows related to operating activities
Net (loss) income$(35,670)$6,325$(36,670)$7,418
Adjustments for:
Amortization5,9205,54416,72216,107
Impairment of a licence and goodwill641,000-41,000-
Impairment of assets7-611-1,610
Share of loss of associated corporations1,4271,6755,1244,653
Deferred income taxes(5,129)339(4,168)1,248
7,54814,49422,00831,036
Net change in non-cash balances related to operating activities(1,292)(1,497)5,200(9,852)
Cash flows provided by operating activities6,25612,99727,20821,184
Cash flows related to investing activities
Additions to property, plant and equipment(6,094)(4,642)(17,914)(14,190)
Additions to intangible assets(188)(773)(1,683)(1,695)
Business acquisition8-(6,607)(501)(6,607)
Net change in investments11(1,781)(1,477)(4,548)(2,148)
Cash flows used in investing activities(8,063)(13,499)(24,646)(24,640)
Net change in cash(1,807)(502)2,562(3,456)
Cash at beginning of period12,0867,6657,71710,619
Cash at end of period$10,279$7,163$10,279$7,163
Interest and taxes reflected as operating activities
Interest paid$21$130$2,052$2,326
Income taxes paid (received)1,079(575)5,780814

See accompanying notes to condensed consolidated financial statements.

TVA GROUP INC.
Notes to condensed consolidated financial statements
Three-month and nine-month periods ended September 30, 2014 and 2013 (unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)

TVA Group Inc. ("TVA Group" or the "Corporation") is governed by the Québec Business Corporations Act. TVA Group is an integrated communications company with two operating segments: Broadcasting & Production and Magazines (note 13). The Corporation is a subsidiary of Quebecor Media Inc. ("Quebecor Media" or the "parent corporation") and the ultimate parent corporation is Quebecor Inc. ("Quebecor"). The Corporation's head office is located at 1600 de Maisonneuve Boulevard East, Montreal, Quebec, Canada.

The Corporation's businesses experience significant seasonality due, among other factors, to seasonal advertising patterns and influences on people's viewing, reading and listening habits. Because the Corporation depends on the sale of advertising for a significant portion of its revenues, operating results are also sensitive to prevailing economic conditions, including changes in local, regional and national economic conditions, particularly as they may affect advertising expenditures. Accordingly, the results of operations for interim periods should not necessarily be considered indicative of full-year results.

1. Basis of presentation

These consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), except that they do not include all disclosures required under IFRS for annual consolidated financial statements. In particular, these consolidated financial statements were prepared in accordance with IAS 34, Interim Financial Reporting, and accordingly, they are condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Corporation's 2013 annual consolidated financial statements, which describe the accounting policies used to prepare these financial statements.

Comparative figures for the three-month and nine-month periods ended September 30, 2013 have been restated to conform to the presentation adopted for the three-month and nine-month periods ended September 30, 2014.

2. Change in accounting policies and recent accounting pronouncements

Change in accounting policies

On January 1, 2014, the Corporation adopted retrospectively IFRIC 21 - Levies, which clarifies the timing of accounting for a liability for outflow of resources that is imposed by governments in accordance with legislation, based on the activity that triggers the payment. The adoption of this interpretation did not have a material impact on the consolidated financial statements.

Recent accounting pronouncements

The Corporation has not yet completed its assessment of the impact of the adoption of these pronouncements on its consolidated financial statements.

  1. IFRS 9 - Financial Instruments is required to be applied retrospectively, with early adoption permitted.

    IFRS 9 simplifies the measurement and classification of financial assets by reducing the number of measurement categories in IAS 39, Financial Instruments: Recognition and Measurement. The new standard also provides for a fair value option in the designation of a non-derivative financial liability and its related classification and measurement, as well as for a new hedge accounting model more closely aligned with risk management activities undertaken by entities.
  2. IFRS 15 - Revenue from Contracts with Customers is required to be applied for periods beginning on or after January 1, 2017.

    IFRS 15 specifies how and when an entity must recognize revenue as well as requiring such entities to provide users of financial statements with more informative disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers.

3. Revenues

The breakdown of revenues between services rendered and product sales is as follows:

Three-month periodsNine-month periods
ended September 30ended September 30
2014201320142013
Services rendered1$70,023$77,711$238,735$250,555
Product sales24,50224,50670,81174,239
$94,525$102,217$309,546$324,794

1The Corporation collects royalties on the retransmission of its television signal in markets located outside the local service areas of its over-the-air stations. During the third quarter of 2013, the Copyright Board of Canada (the "Board") completed its consultations on the issues surrounding an agreement on a new division of royalties between copyright collective societies for the 2009-2013 period, whereby the Corporation's share of the royalties is significantly increased. The agreement was endorsed by the Board. Accordingly, based on the confirmed new information, the Corporation recorded in the third quarter of 2013 an amount to reflect the increase in its share of the royalties, of which $6,111,000 applied to the years 2009 to 2012 and $730,000 to the first two quarters of 2013.

4. Purchases of goods and services

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

Three-month periodsNine-month periods
ended September 30ended September 30
2014201320142013
Royalties, rights and production costs$35,431$30,771$128,119$112,481
Printing and distribution4,1945,02412,69414,342
Marketing, advertising and promotion4,1583,97210,75312,512
Building costs2,1182,1346,7986,526
Services rendered by parent corporation5,4654,57016,90816,542
Other5,7395,58016,23621,563
$57,105$52,051$191,508$183,966

5. Financial expenses

Three-month periodsNine-month periods
ended September 30ended September 30
2014201320142013
Interest on long-term debt$1,125$1,139$3,370$3,387
Amortization of financing costs5050151151
(Revenues) interest expense on net defined benefit asset or liability(72)420(215)1,260
Other(25)(21)(133)(9)
$1,078$1,588$3,173$4,789


6. Impairment of a licence and goodwill

During the third quarter of 2014, the Corporation completed the annual update of its strategic plan for the next three years. Market conditions in the television industry led the Corporation to perform an impairment test on its Broadcasting & Production cash-generating unit ("CGU"). The Corporation concluded that the recoverable amount based on fair value less costs of disposal of the Broadcasting & Production CGU was less than its carrying amount. A $32,462,000 non-cash impairment charge with respect to the broadcasting licence and an $8,538,000 non-cash goodwill impairment charge were therefore recorded in the third quarter of 2014. The Corporation used a pre-tax discount rate of 11.08% and a perpetual growth rate of 1.0% to calculate the recoverable amount.

7. Operational restructuring costs, impairment of assets and other costs

In the three-month and nine-month periods ended September 30, 2014, the Corporation recorded $109,000 in operational restructuring costs in connection with the elimination of positions in the Broadcasting & Production segment. In the three-month period ended September 30, 2013, the Corporation recorded $138,000 in operational restructuring costs in connection with staff reductions, mainly in the Magazines segment ($1,784,000 for the nine- month period ended September 30, 2013, including $879,000 in the Broadcasting & Production segment and $905,000 in the Magazines segment).

During the three-month period ended September 30, 2013 the Corporation recorded an additional $611,000 inventory impairment charge in connection with the discontinuation of its TVA Boutiques division's home shopping and online shopping operations. For the nine-month period ended September 30, 2013, the impairment charge related to the discontinuation of operations totalled $1,223,000 in addition to a $303,000 provision for operational restructuring costs.

During the nine-month period ended September 30, 2013, the Corporation also recorded a $387,000 impairment charge related to its long-term distribution rights inventory following its decision in the first quarter of 2013 to discontinue theatrical distribution of new Quebec films.

8. Business acquisition

On July 18, 2013, the Corporation acquired all of the issued and outstanding shares of Les Publications Charron & Cie inc., publisher of La Semaine magazine, for a total consideration of $7,701,000, including $501,000 in respect of acquired working capital items. As part of this transaction, the Corporation also acquired all of the issued and outstanding shares of Charron Éditeur inc., a publishing house, and simultaneously transferred its operations to Sogides Group, a corporation under common control, for the equivalent of the price paid, namely an agreed price of $219,000, net of transferred working capital items. The results of the new subsidiary, Les Publications Charron & Cie inc., have been included in the Corporation's consolidated results since July 18, 2013. The process of allocating the acquisition price was completed during the three-month period ended March 31, 2014.

The final allocation of the acquisition price of Les Publications Charron & Cie inc. is as follows:

2013
Assets acquired
Cash$593
Current assets1,127
Non-current assets29
Property, plant and equipment94
Intangible assets3,030
Goodwill4,688
9,561
Liabilities assumed
Current liabilities(1,219)
Deferred income taxes(641)
(1,860)
Net assets acquired at fair value$7,701
Consideration
Cash7,200
Liability related to the preliminary adjustment in working capital501
$7,701

No goodwill is deductible for income tax purposes.

9. Capital stock

a) Authorized capital stock

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

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

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

b) Issued and outstanding capital stock

September 30,December 31,
20142013
4,320,000 Class A Common Shares$72$72
19,450,906 Class B shares98,57598,575
$98,647$98,647

c) (Loss) earnings per share attributable to shareholders

The following table sets forth the computation of basic and diluted (loss) earnings per share attributable to shareholders:

Three-month periodsNine-month periods
ended September 30ended September 30
2014201320142013
Net (loss) income attributable to shareholders$(35,670)$6,325$(36,670)$7,418
Weighted average number of basic and diluted shares outstanding
23,770,906
23,770,906
23,770,906
23,770,906
Basic and diluted (loss) earnings per share attributable to shareholders
$
(1.50
)
$
0.27
$
(1.54
)
$
0.31

The diluted (loss) earnings per share calculation does not take into consideration the potential dilutive effect of stock options of the Corporation since their impact is anti-dilutive.

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

Nine-month period ended September 30, 2014
Corporation's Class BQuebecor Media
stock optionsstock options


Number		Weighted
average
exercise price

Number		Weighted
average
exercise price
Balance as at December 31, 2013691,076$16.54331,407$53.35
Granted30,0008.9067,00063.60
Exercised--(29,375)49.52
Cancelled(69,208)15.32(13,600)57.64
Expired(126,500)20.75--
Balance as at September 30, 2014525,368$15.25355,432$55.44

Of the number of options outstanding as at September 30, 2014, 495,368 Corporation's Class B stock options at an average exercise price of $15.63 and 67,432 Quebecor Media stock options at an average price of $46.55 could be exercised.

During the three-month period ended September 30, 2014, 8,000 Quebecor Media stock options were exercised for a cash consideration of $61,000 (no stock options were exercised in the same period of 2013). During the nine- month period ended September 30, 2014, 29,375 Quebecor Media stock options were exercised for a cash consideration of $413,000 (41,884 stock options were exercised for a cash consideration of $471,000 for the same period of 2013).

During the three-month period ended September 30, 2014, the Corporation did not record a compensation expense (a compensation expense reversal of $99,000 was recorded in the same period of 2013) in relation to the Corporation's Class B stock options. During the nine-month period ended September 30, 2014, the Corporation recorded a compensation expense reversal of $46,000 (compared with a compensation expenses reversal of $130,000 in the same period of 2013) in relation to those options. During the three-month and nine-month periods ended September 30, 2014, the Corporation also recorded compensation expense of $262,000 and $859,000 respectively (compared with compensation expense of $387,000 and $317,000 respectively in the same periods of 2013) in relation to Quebecor Media stock options.

11. Related party transactions

Capital contributions to SUN News

During the three-month period ended September 30, 2014, the partners in SUN News made a capital contribution of $4,100,000 ($4,500,000 in 2013), including $2,009,000 ($2,205,000 in 2013) from the Corporation and $2,091,000 ($2,295,000 in 2013) from Sun Media Corporation, a company under common control.

During the nine-month period ended September 30, 2014, the partners in SUN News made a capital contribution of $10,300,000 ($7,500,000 in 2013), including $5,047,000 ($3,675,000 in 2013) from the Corporation and $5,253,000 ($3,825,000 in 2013) from Sun Media Corporation.

12. Guarantees

In the normal course of business, the Corporation enters into indemnification agreements with third parties as part of certain transactions, including acquisition contracts for goods, service agreements and leases. These indemnification agreements require the Corporation to compensate the third parties for costs incurred as a result of specific circumstances. The terms of these indemnification agreements vary from transaction to transaction, based on the contract terms. The nature of these indemnification agreements prevents the Corporation from making a reasonable estimate of the maximum potential amount it could be required to pay to third parties for all of its commitments. In light of new developments in the first quarter of 2014, the liability risk under specific commitments, which totalled $4,700,000 as at December 31, 2013, was recognized in purchases of goods and services in the three-month period ending March 31, 2014.

13. Segmented information

During the third quarter of 2014, management changed the names of the Corporation's business segments to better reflect operational realities. The Television segment is now called Broadcasting & Production and the Publishing segment is now called Magazines.

Management made changes to the Corporation's management structure at the beginning of 2014. As a result of those changes, the custom publishing, commercial print production and premedia services previously provided by the TVA Studio division in the Magazines segment became part of the operations of TVA Accès inc. in the Broadcasting & Production segment. Prior period disclosures have been restated to reflect this new presentation.

The Corporation's operations consist of the following segments:

- The Broadcasting & Production segment includes the operations of TVA Network (including the subsidiaries and divisions TVA Productions Inc., TVA Sales and Marketing Inc., TVA Nouvelles and TVA Interactif), specialty services, the marketing of digital products associated with the various televisual brands, the commercial production and dubbing operations of TVA Accès Inc., the distribution of audiovisual products by the TVA Films division and the home and online shopping services of the TVA Boutiques division up to the second quarter of 2013.

- The Magazines segment includes the operations of TVA Publications Inc. and Les Publications Charron & Cie Inc., which publish French-language magazines in various fields such as the arts, entertainment, television, fashion and decoration, and market digital products associated with the various magazine brands.

Three-month periodsNine-month periods
ended September 30ended September 30
2014201320142013
Revenues
Broadcasting and Production$78,829$85,195$264,005$281,237
Magazines16,24317,75047,33946,017
Intersegment items(547)(728)(1,798)(2,460)
$94,525$102,217$309,546$324,794
Adjusted operating income(1)
Broadcasting and Production4,79614,75214,65534,636
Magazines2,8423,6497,9575,600
7,63818,40122,61240,236
Amortization of property, plant and equipment and intangible assets
5,870
5,494
16,571
15,956
Financial expenses1,0781,5883,1734,789
Impairment of a licence and goodwill41,000-41,000-
Operational restructuring costs, impairment of assets and other costs
109
875
109
3,874
(Loss) income before tax (recovery) expense and share of loss of associated corporations
$
(40,419		)
$
10,444
$
(38,241		)$
15,617

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

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

14. Event after the reporting period

On November 3, 2014, TVA Group changed the terms and conditions of its bank credit facilities to increase the size of its revolving credit facilities from $100 million to $150 million, to extend their term by two years until February 24, 2019, and to replace the existing $75-million term loan maturing on December 11, 2014 by a new term loan of an equivalent amount and maturing on November 3, 2019. Moreover, TVA Group granted a security on all of its movable assets and an immovable hypothec on its head-office building as part of the modification of the terms and conditions of its bank credit facilities.