(a) Broadcast licence additions
The Company received CRTC approval to convert four of its stations from AM to FM. As a result of these conversions, the Company became obligated in aggregate to a $175,000 commitment for CCD (2009 – one conversion for $35,000). These commitments are payable over seven years. Broadcast licence value and long-term obligations were increased by the CCD commitments.
(b) Disposal of broadcast assets
On December 30, 2009, the Company disposed of the net assets associated with its two FM radio stations located in Thunder Bay, Ontario for proceeds of $4,500,000 plus $253,000 for certain working capital amounts. As a result of this disposal, the Company decreased broadcast licences by $3,376,000, property and equipment by $463,000, current assets by $450,000 and has recorded a gain on disposal aggregating $270,000 within the results from discontinued operations. Refer to note 5 for additional information.
(c) Exchange of broadcast assets
In August 2009, the Company finalized the asset exchange transaction with Rogers Broadcasting Limited (“Rogers” – a Division of Rogers Communications Inc. RCI.A and RCI.B). The transaction involved the exchange of the Company’s AM broadcast licence in Halifax, Nova Scotia for Rogers’ AM broadcast licence in Sudbury, Ontario. The fair value of the asset given up was determined to be $6,898,000. Consideration received was $5,000,000 cash and the Sudbury AM broadcast licence valued at $1,898,000. As a result of this asset exchange, the Company increased its licence value by $1,898,000 for the Sudbury licence, increased CCD obligations by $523,000 related to the new licence, decreased the licence carrying value by $689,000 related to the Halifax AM licence given up and recorded a gain on the disposal of the Halifax licence totalling $5,616,000. The assets obtained and the results of their operations have been consolidated as of August 25, 2009.