## RESULTS OF OPERATIONS 

Corus manages its business in three operating segments: (1) Radio Broadcasting, (2) Specialty Programming and (3) Diversified Media (other), which includes digital audio services, cable advertising, and conventional television. Generally, Corus’ financial results depend on a number of factors, including the strength of the Canadian national economy and the local economies of Corus’ served markets, local market competition from other radio stations and other advertising media, govern- ment regulation and Corus’ ability to continue to provide popular programming. Corus’ radio broadcasting business and conventional television generate revenues from local and national advertising. Corus’ specialty television business derives its programming revenue from affiliate subscriber fees and advertising. Higher program ratings in radio as well as in specialty and conventional television will generate increased revenues from resulting increases in advertising rates. Digital ADventure derives its revenue from conventional advertisers and DMX Commercial derives its revenue from licensing fees. 

Operating, general and administrative expenses include costs relating to programming (both the cost of programming produced by third parties and our own production costs), employee remuneration, regulatory license fees, establishing and maintaining technical facilities, maintenance, research, advertising, general adminis- tration and overhead costs. Approximately 32% and 24% of operating, general and administrative expenses in fiscal 2000 consisted of employee remuneration and pro- gramming costs, respectively. Investments over which Corus exercises significant influence are accounted for using the equity method, and other investments are recorded at cost, including those held in trust pending CRTC approval. The investments in TELETOON Canada Inc. and Telelatino Network Inc. are accounted for using the equity method and the investment in The Comedy Network is recorded at cost. 

The following table sets forth certain financial information for each of the years in the three years ended August 31. The audited financial statements include the consolidated balance sheet of Corus Entertainment Inc. as at August 31, 2000 and the consolidated balance sheet of Shaw Communications Inc. – Corus Entertainment Division as at August 31, 1999 and the consolidated statements of income, retained earnings, net investment and cash flows for each of the years in the three-year period ended August 31, 2000. 

