Nancy Chan-Palmateer - Director, IR Michael Donovan - Executive Chairman Dana Landry - CEO Keith Abriel - CFO David Reagan - EVP of Strategy and Corporate Development Josh Scherba - EVP of Distribution and Content.

Rob Goff - Echelon Aravinda Galappatthige - Canaccord Genuity Adam Shine - National Bank Drew McReynolds - RBC Capital Markets David McFadgen - Cormark Securities Bentley Cross - TD Securities Drew McReynolds - RBC Capital Markets Tim Casey - BMO Bentley Cross - TD Securities

Thank you, operator and thank you everyone for joining us this morning. People on the call with us today are Dana Landry, our Chief Executive Officer; and Keith Abriel, our Chief Financial Officer.

Also with us on the call and available for question-and-answer during the question discussion are Michael Donovan, our Executive Chairman; David Reagan, our Executive Vice President of Strategy and Corporate Development; and Josh Scherba, Executive Vice President of Distribution and Content. Turning to slide 2, we have some standard cautionary statement.

The matters discussed on this call include forward-looking statements under applicable securities laws with respect to DHX Media, including, but not limited to, statements regarding the effect of the adoption of the amendment to IAS 38 on gross margin and adjusted EBITDA of the company, the integration of the acquisitions of Peanuts and Strawberry Shortcake and the expected financial and other impacts associated with such acquisitions, the timing of production schedules and deliveries, expectations regarding the growth and financial performance of WildBrain, expected benefits associated with the company’s agreement with Mattel, the performance and growth of the Teletubbies brand, expectations regarding promotion and advertising revenues derived from DHX Media’s TV channels, strategic priorities of the company, the effect of course corrections made by management, the realization of synergies and other cost reductions, the markets and industries in which the company operates, including demand for and consumption of kids’ content, the business strategies and operational activities of DHX Media and its subsidiaries, and the growth and financial and operating performance of DHX Media, its subsidiaries, and investments. Such statements are based on information currently available and are subject to a number of risks and uncertainties.

Actual results or events in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the Risk Factors set out in the company's MD&A and the company's AIF Annual Information Form, which also form part of the company's Annual Report on Form 40-F. For the question-and-answer session that will follow, we ask that each analyst keeps to one question with one follow-up so that everyone has a chance to ask a question.

If you would like to ask an additional question, please re-join the queue. Now turning to slide 3 I will now hand the call over to our CEO Dana Landry.

Thank you, Nancy, and thanks to everyone for joining us today. Management is sorry and disappointed to be reporting that revenues were down 2% on a year-over-year basis for fiscal 2017 to $299 million.

Adjusted EBITDA was also off coming in at $87.3 million or down 16% year-over-year. These are results are not acceptable to management and we would like to provide reassurance to investors who after many years of solid growth expect stronger performance from DHX Media that we have identified the issues and has taken immediate corrective measures.

The shortfall rose from localized issues relating to execution and were specifically impacted by five factors. Teletubbies' delayed performance in the U.S.

market; number two, our execution on the content side; number three, the winding down of a significant CPLG licensing contract, number four, foreign exchange rates, and number five, distraction due to our Peanut's acquisition effort. I'm going to now invite Keith onto the call to build the bridge to our revenue and gross margin shortfalls.

This we will add up to our numbers in our fiscal 2017 MD&A. Keith?

Thank you, Dana and thank you for everything for dialling in today. The revenue shortfall for the quarter was approximately $15 million.

This is comprised or broken down as follows. Approximately $2.5 million related to two light action shows that were abandoned later in the quarter, approximately $3.5 million related to consumer products represented revenues and a contract that has ended, $3 million related to the underperformance of Teletubbies in the U.S., approximately $3 million related to the impact of the slate slippage and certain timing impacts on distribution revenues, approximately $2 million related to the reclassification of certain revenues on a net basis and approximately $1 million related to FX and other impacts for a total of $15 million.

And looking at this revenue bridge from another angle and breaking it down in other way, was approximately $2.5 million of that related to strategy course corrections, approximately $2 million of that was related to timing, approximately $3 million of that was related to foreign exchange, the reclassification previously mentioned and other factors, and approximately $7.5 million of that was related to the underperformance of various business units for a total of $15 million. And looking at the gross margin bridge, the expected gross margin, approximate gross margin shortfall was $18 million.

Approximately $9 million of that relates to the EBITDA flow through on the impact on the revenue shortfall, approximately $5 million of that relates to the impact of higher than expected third-party distribution revenues which carry a lower margin, approximately $2 million of it relates to the underperformance of Teletubbies in the U.S., approximately $2 million of it relates to lower than expected production service margins for a total of $18 million. With that, I will hand it back to Dana.

Thanks, Keith. And then for those following along on the slide deck, we're now turning to slide 7.

Management has now taken a comprehensive review of the company and we have reached at our corporate priorities to focused our energy on creating content, leveraging our extensive library and driving consumer products to increase cash flow and cash flow per share while improving our management of corporate's SG&A. Based on these core priorities management is providing the following new outlook metrics for fiscal 2018.

Those metrics are as follows. Fiscal 2018 outlook for adjusted EBITDA is a range of CAD$125 million to CAD$155 million.

It is very important to communicate at this point. The following key estimates that work into the adjusted EBITDA range.

First, the range has been calculated in CAD using a spot rate for U.S. dollars at 1.23.

As a comparison, this rate was 1.35 near fiscal year-end. This hits across multiple revenue streams some more than others as unfortunate by is outside of management’s control.

The net is a drag of $10 million to $15 million on this range. So, for example, the midpoint would move from 140 to 150 to 155 should be using the higher spot rate, which is generally in line with consensus leading up to these results.

Additionally, estimates include growth of 10% to 15% on core DHX business plus $4 million of the $11 million synergies now estimated for the go forward 4 million of which FX fiscal 2018 plus modest growth in Peanuts and Strawberry Shortcake is assumed to be flat. All these assumptions and estimates are compiled using prudent assumptions.

Further, we’ve included for the first time in our outlook a free cash flow range, I would guide you to the MD&A for a description and definition of that the range of which is CAD$50 to CAD$70 and an estimated net investment and film of CAD$20 million to CAD$30 million. Turning to slide eight now.

First, I’ll discuss how we have refocused and realigned our content business. We’ve integrated our content and distribution management under a single veteran team promoting Josh Scherba to the position of Executive Vice President of Content and Distribution and Anne Loi, the position of Executive Vice President of Global Operations.

Together Josh and Anne are responsible for all content, studios and distribution group operations and we’ll employ their considerable expertise to identify and exploit trends and opportunities in the kids and family content market focusing on our best properties. We are also taking a data driven approach to content development by exploiting WildBrain's access to extensive user analytics.

In summary, the strategy forward for content is as follows. Leveraging DHX Media’s existing production platform, our main content will now focus, will now be.

First, pursuing branded premium content, generally larger budgets, focusing on our core IP and driving consumer products. And continuing to drive growth in WildBrain by producing lower cost, more efficient content, data driven, following the trends specifically for the Ad Ward network and focusing on return on invested capital.

Turning now to slide nine, we will now look at how we are reshaping our licensing business. While the launch of the Teletubbies in the U.S.

has not yet gain traction, Teletubbies is performing ahead of management expectations in the United Kingdom where the brand continues to occupy top five position based on toy sales. Management is further encouraged by the early signs for the Teletubbies in Germany and also in China where the new series has received almost 50 million views since launching on our on-stream platforms last June.

Turning now to our corrections, we have signed on most of the Peanuts Worldwide team headed up by Roz Nowicki, an industry veteran with deep experience having worked previously on such brands as the Simpsons, and the Cabbage Patch Kids. We have also now closed our LA office and going forward we will be centralizing our US licensing activities under Ross’ leadership out of the Peanuts Worldwide office in New York set to open in October.

We have been impressed with the Peanuts Worldwide team so far and we will be looking to leverage the scale of that business and the team’s relationships across all of these as brands activities. On the agency side, Peter Byrne is refocusing his efforts on CPLG as we turn our laser focus on repatriate Peanuts and Strawberry Shortcake licensing contracts and achieving on our integration synergies.

Turning now to Slide 10. In fiscal 2018 and beyond we will focus on generating free cash flow in order to de-lever rapidly and as discussed earlier, we will measure our progress in EBITDA on an annual basis.

To-date on the Peanuts integration side we have realized $3 million in cost synergies following the Peanuts acquisition and are on track to achieve $5 million in targeted cost synergies for year one. Our longer-term target is still set to achieve $25 million in cost synergies by the fifth year.

We have identified six key territories to repatriate third-party Peanuts agency contracts to CPLG. The first agency conversion is expected by the end of calendar fiscal 2017 -- sorry by the end of calendar '17 with two more targeted for calendar 2018.

Furthermore, we also reasonably initiated an incremental SG&A cost reduction program and have already achieved cuts of $3 million towards our target of $6 million within one year. Turning now to slide 11.

There has never been a better time for the global kids and family content business. In fiscal 2017, we closed the Peanuts and Strawberry Shortcake acquisitions.

We are executing on that integration plan that will result in 6 million of incremental savings and we have an active strategy for realizing synergies through agency conversion for Peanuts with CPLG. Further all major streaming platforms are boosting content budgets and players such as Facebook, Apple and YouTube Red are entering the markets.

Consumption of digital content and video-on-demand services worldwide is skyrocketing and e-commerce for consumer products is poised for growth. Our commitment to investors is to more effectively execute against the tremendous opportunities to deliver kids and family content worldwide.

With improving industry tailwinds and a renewed focus on execution across our best properties, we look forward to getting back to growth. We look forward to connecting with many of you next week at our Investor Day in New York to provide a much deeper guide in the plans across our business.

With that, we’ll now turn it over for questions.

Good morning, and thank you. Dana, given the magnitude of the missed on the quarter, can you address the confidence factor that you would apply to guidance and whether there may be some de-risking issue if there is with respect to achievement on the new guidance relates.

Yeah Rob, this is Michael Donovan and I'll just start with that answer and turn it over to Dana. Yes, our commitments are that our guidance will be met or exceeded for the future.

And this is of the past. That's my personal commitment that our collective commitment.

And so, we have gone as conservative as we can be and still be within the range. Dana?

Yeah, thank you Michael. The only thing I would add to that is there are sort of incremental upside within our projection again going back to Michael's point to being conservative.

We've only forecasted modest growth for Peanuts given it's the first year. Strawberry Shortcake we've forecast flat which we expect will have some upside.

And further we've projected in our estimates that deceleration in the WildBrain business although on the call phase we're not seeing that, we're actually seeing an acceleration. But to be prudent we've come up with these estimates.

Good morning, thanks for taking my question. I wanted to focus on the free cash flow guidance, $30 million to $40 million.

Obviously given that you've starting off with an elevated level of leverage, what gives you confidence in achieving that number, because if you look at obviously there is obviously bigger range when you think about the EBITDA guidance of about $30 million. And as you discussed in the past, it's not always easy to kind of land on free cash flow even on an annual basis, given the nature of the business.

So maybe just touch on what kind of gives you confidence if you can hit the free cash flow expectations that you set for 2018?

Yeah, we are completely confident in those cash flow numbers which once again are I believe at the conservative end. Dana and Keith, do you mind to add to that please?

Yeah, I would say that our confidence is based on our changes that we've implemented starting a couple of months ago in our refocused strategy which is to focused on cash. And that really goes throughout the company number one.

And number two, to Michael's point a conservative estimate in terms of EBITDA and what we're expecting for flow through the free cash flow, Keith?

I think when you break the cash flow down with the Peanuts & Strawberry acquisition, with considerably more predictability and proprietary production growth is not as accelerated as we have been in the past so there is increased predictability there.

And just to follow up on that particular point. As the year goes along, if you're not seeing -- and you just starting to see the numbers maybe slightly there of course.

What kind of the levers do you have to put it back into back within that range from an operational perspective? Thank you.

Well, fundamentally, the business has been retooled in the last several months, particularly since the Peanuts acquisition to, with the consumer increased -- focus on consumer products which has much, much more predictable cash flow provenance than the production. And as that shift in the SKU takes effects predictability has commensurately increased.

So that’s the reason for our confidence. And to answer your question specifically in terms in the event that is wrong and we are really truly confident the production business is adjustable fact.

Dana?

To add further, I would say, there is leverage within being able to pull back levers on production.

Exactly.

When we look to the free cash flow calculation, I think there is a bit of a change in the way you previously adjust free cash flow and obviously that relates to the guidance. Can you speak to that at all?

Maybe Keith?

Yes. So, the way, we’ve -- over the last couple of months, we’ve talk with you the analysts in defining our free cash flow.

And the way that we’ve decided to define it is free cash flow from operations before our net investment in film and television programs and including the net change in production financing. We look at our investment in content as deploying our free cash flow, I think it’s critical to show that to investors.

So, we look at the free cash flow with the range, when we define that was 50 million to 70 million. And then we take and deploy that on a combination of A, deleveraging and B, investing in content.

And that definition also makes it a little easier to predict, because you are excluding some of the period swings that do come with production from quarter-to-quarter.

And can you give us the comparable number to that '17, I think it somewhere in the 50s, 57 or something.

I don’t have that rate with me. So, do you mean in terms of the investment in film and television Adam?

No. I need in terms of just a comparable, in the context of your guidance for F'18, the comparable number and F'17 for free cash flow.

Maybe I’m wrong, but is it sort of $59 million, when you make the related adjustments?

Here is what we'll do. Keith makes sure he's calculates that right now, we’ll come back to you, if that’s okay.

Just one follow-up on Adam’s question. I guess, Keith, just in terms of the change in interim production financing obviously, it’s a vehicle that rightfully should be used as much as possible.

Is there any kind of comment, you can give on what that net change is expected to be in fiscal ‘18 just so we can square off the rest?

Maybe I'll just give a high level and then I’ll ask Keith to give a little more detail. So, in terms of the -- generally what we try to do is if you think about our investment thesis about 85% is covered by hard cost of contracts which we’ve pledged today.

So really 85% of any change in investment should run through the internal production financing. Generally.

And sorry, and just one comment to add to that Drew, typically what you will see is interim production financing moves in one direction, net change in working capital moves in the other direction and that is almost without fail you will see them moving in opposite directions.

Yes, yes, understood. Okay.

That’s great. And then just my actual question just when we look at the balance sheet and just in terms of your targeted leverage by the end of fiscal ‘19 obviously nudged up a little bit versus where it was a quarter or so ago.

Just can you comment on your updated target, is that a function of slightly lower adjusted EBITDA trajectory, a slightly lower free cash flow, just kind of the different components that brought it down slightly versus where you were a couple of quarters ago?

Yes, and that is our goal, just to repeat to bring our leverage down by 2019 and our target is 3.5. And we have a number of initiatives underway, at least one of which we hope to announce very, very shortly and others over the next several quarters.

But Dana could you add to that?

Yes, I think the only I would say Drew in addition to what Michael has said is the -- when we were looking at a number of closer to three we were doing it before what we settled in on what the convertible debenture would be, the 3.5 now we are factoring attributable debenture. We are also factoring in the changes in the USD that we talked a bit earlier, in addition to the priority of the EBITDA being lower affected by the FX that I spoke about earlier is that the debt is also commensurately lower by about $60 million to $70 million on the difference in terms of Canadian dollars.

So although you lose it on the EBITDA side you pick it up on the lower debt side in CD.

Hi thanks for taking my question. I just had a general question in terms of the content strategy going forward.

Will there be a shift in the charges towards more original content and the buying and refreshing of it?

That’s a good question. And that’s may be what I will do today we have our Head of Content, Josh Scherba present so I will turn it over to you Josh please.

Sure. So, there’s tremendous opportunity with all the large variety of SLR platforms all looking for content be it Netflix or Amazon.

The one key advantage we have is having own IP. In a fragmented world, the opportunity to have something that has built in brand recognition is a really positive thing considered to be a real advantage that we have.

So, when we talk to these platforms that have actually expressed the most interest in things that have built in awareness. So, while our slate won't be limited to refreshing, remaking of existing brands, we think it's an advantage that we need to continue to exploit.

And if I can just add particularly our year-end ended June 30, but since July 1 and through August and September the climate has picked up considerably in terms of the demand because of the new SVOD players that have entered the market. And the demand is for new content.

But particularly in children's where stickiness is the one of the drivers for the SVODs and children contributes and family contributes to stickiness. It's the known brands that provide the most amount of torque.

That's what we have to offer and we're one of the leading players in terms of delivering those known brands. And of course, our strategy has been to leverage our production advantage, our studios et cetera and our finance advantages with respect to production into developing the old brand, the familiar brands, the ones with provenance, recognizable in families and households into new content.

That's basically the essence of our strategy and we have as everyone on the call I suspect knows 450 brands with which to do this, that is our priority, that is our focus. And that is then something that is materially picked up in literally the last several months.

Josh, do you have anything more to add to that? Because Josh is dealing with it every day.

Well, yeah. To speak in terms of market opportunity it's never been stronger, and I think the one key announcement that's happened in the last couple of months is Disney launching their own SVOD service, which has a two-fold effect for a company like DHX.

On the one hand, it did potentially provide us with another customer in to sell our content to in Disney bringing their own SVOD service, but also the effect of their pulling back from their content on Netflix and other services provides a larger opportunity for independent contract companies like DHX.

Hi, just a question or a comment that Michael said. Michael, I think you've said that you're expecting to make some announcement soon to allow you to deliver quickly.

Can I understand that correctly, and if so is that an asset sale?

Yes. We have a number of -- since we leveraged in order to buy the transformational Peanuts & Strawberry Shortcake assets, which is as you know is core to our strategy, those name brands with problems in the children's space.

Since but we've leveraged the priority or the high priority has been to deleverage and we have a number of initiatives underway and we expect to be announcing those over the next several quarters. However, one of those announcements an incremental one is, we are expecting to announce very soon within 24 to 48 hours and possibly maybe a little bit later, but probably within a day or two.

Does that answer the question?

But is it very contemplating in asset sale or asset sales?

Well yes. We’re contemplating many things including asset sales.

But it's very important to point out that what we’re doing is focusing our strategy, our IP strategy. IP is the key and with an emphasis on known brands and both data driven, digital driven strategy matched with consumer products.

Because we believe, the consumer products delivery mechanism is transitioning rapidly into digital, where we have leadership. So, focus on that is what we are doing.

So, things that don’t contribute very specifically to that strategy are on the hit list, if you will to as part of our deleverage initiatives as well. But some of those involve sales.

Yes, but there are other things. As the announcement that we are on the cusp of making believe is there is a transition of certain parts of our debt into a different vehicle.

And in order to hit that leverage target of 3.5 times by the end of fiscal 2019 that would envision executing on these announcements you’re going to make very soon, right?

Well, first of all, I’ll like my colleagues to answer. I believe that we will not only meet that target, but exceed this and that is extremely conservative.

And that these announcements are not necessary to meet that target, that’s my belief. The announcements will help us exceed the target.

Dana, do you have anything more, no. Keith, anything more, no.

Okay. So, thank you.

Any other questions?

If I may, if I can just on a different topic. Can you just talk about why Teletubbies underperformed in the U.S.?

And I’ll answer that. There's a number of reasons.

Essentially comes down to our team’s execution. Because that particular piece of IP remains strong in every other territory where we launched it, with the primary focus on the UK.

But now, it’s showing tremendous providence in German and China as we indicated earlier. So, we feel that that is and this is my opinion and this is management’s opinion but that is a unique situation related to our own execution in that market.

And we have a number of initiatives underway to restart that program and I believe as it has succeeded in other territories it will succeed there. And this is not on common for IP, children’s IP, when it’s relaunched to take more sometimes, more than one initiative to succeed.

And so, having said that the headline for our shift in strategy is more toward a digital initiative which we think is the future anyway. And so that’s where our focus is now and we expect in the next several quarters to have announcements in that regard.

First may be switching gears and may be talking about something little bit more positive. CBC came with an article this morning suggesting Mr.

Jolly will announce $500 million of our commitment for Netflix to fund continued production, to the extent maybe you guys are able to talk about that at all, just curious to hear any colour that you may have.

Yes, no that’s exactly it, and that’s what’s the most important thing I believe for investors to note. I have been in this business for 37 years and it has never been this positive and it’s getting more and more positive in terms of demand than it was six months ago and that was breaking new ground.

But particularly in -- since Josh referred to early I mentioned, the Disney, Netflix announcement we basically have starting on go off of that for a whole new arms race if you will, in this content sector. And we are very, very well positioned as the leading independent owner of content in this space and with some of the -- with having completed the Peanuts acquisition.

And by the way one of the reasons in my opinion for our misses here is that acquiring Peanuts and Strawberry took really all of management’s time for six months and it was the one-year process and for the last six months and we unfortunately took our eye off the ball. However, the good news is we have now these incredible assets which we are working 24/7 to flow into this incredible opportunity.

One example of which is the Netflix announcement today in Canada which we are primed to position, in front row position to benefit from and before I get carried away, I can go on, Josh could you -- who is dealing with it every day.

It sounds like a very positive development. We look forward to the official announcement later today and hearing more about the details related to it and I will be catching up with my friends from Netflix later as well.

And just one follows on to that and not at all related. But Dana you mentioned FX impacting 10% to 15%, just wondering how exactly you get to that number because I can’t quite get there, so hoping you might bridge the gap for me?

Sure. If you look at the delta between the end of the year of about $1.35 to now the spot rate around $1.23 it’s about sort of $0.12.

If you look at our total revenue base around 55% of that is denominated in US dollars and crosses all revenue streams. So, if you take a normal EBITDA flow through from that 55% and use that math you will get into that range of 10% to 15%.

In this case a lot of US dollar revenues are at a higher -- also one thing I would add is that our higher flow through, so it’s probably at the high end of the flow through more like 40% to 45% rather than a traditional EBITDA flow through.

And just to clarify on that Dana, that 55% you're setting is pro forma for all?

Correct. Peanuts being the biggest contributor to that obviously, because it's mostly denominated in foreign currency, but U.S.

in particular.

Okay. I still didn’t get there, but maybe I'll follow up with Keith after.

Thanks.

Okay. Happy with that.

I'm sure Keith will follow up.

Yeah, thanks well I appreciate the follow up here. And maybe Michael, with your kind of view and experience on, can you just talk to the SVOD market and obviously you're pivoting to what I kind of looked at as kind of barbell approach kind of going up market and down market, want to serve SVOD when you're -- one that to serve AVOD.

What's happening in the middle there in terms of the demand and how are you positioned in that middle -- is that kind of middle declining and therefore you're kind of investing in the end? Whatever you have in the middle is that something you can monetize?

Can you just flush out that SVOD mix if you can.

Yes. Good question, so for a number of years, the price points have basically stayed strangely constant literally for 20 years at around $350,000 an episode.

But first had to come down in real terms because the nominal has stayed constant. But however, what's happened is the market is now shifting in a number of very important ways in interesting ways.

One of which is prices are moving for the first time quite a bit higher into the 750, million, million plus price range, higher end. And that's driven by that SVODs who are able to monetize to a much higher degree and are looking for that premium content.

So, as we reposition our IP, we are repositioning it with a priority on the higher end, that is our -- and our studios are perfectly positioned for that. But that's all just starting now, that’s all in the last several months, nine months I would say, like year.

And again, I'll get Josh to give detail on that. That’s my sense.

But also, you're right, there is in the AVOD space, the price points is being driven down to 50,000, 75,000, 150,000 an episode. So, we are working that as a priority to WildBrain moving into the price range that is ideal for that space.

In other words, the medium is the message and the new money, considerable new money coming into the system is changing the shape of content and the structure and the price points and we are working both in terms of the middle, that's still remains the majority and likely will for the foreseeable future but again that is been our core focus and we are -- and so essentially, we are making money, we are working all three of those fronts as it evolves, and we make money on everyone irrespective. A goal I think that’s what's happening now the most significant is this change in SVODs that is as I said earlier a kind of an arms race, a fight for a market share where budget seem to be exploding on the upside.

Essentially the content spend literally in the last two years has doubled. Its projected to be next year, total of 19 billion, that’s from 10 billion last year.

That has doubled, we are critically positioned on that, to do that. And a lot of that is more high-end.

Again, I can talk all day, I won't use up too much air time here. Josh?

So just to touch on a couple of things there. So certainly, the competition amongst the SVOD services is heating up.

And they’re all looking for content that’s going to differentiate their service. And so, what the net effect of that is that, in the original space, the commissioning space, they are going with higher budgets, more premium content.

So that’s why we are putting an emphasis on that with our new slate moving forward. But I think Netflix, has even publicly stated that they’re looking for a mix of 50-50 between original, high price originals and the acquisitions.

We’re still extremely well position on the acquisition side. We’ve do have the largest independent library in the world and that’s still very valuable for these services, because they need a variety of content.

So, I think our library serves the middle ground very well, as you illustrate in your Barbell approach. But for the new content, we need to be taking advantage of this high price opportunity.

That’s really, really helpful. So, thanks both on that and if I can just squeeze into housekeeping.

Just Keith, just on the CapEx guidance for fiscal ’18, just comment on kind of what’s in there and then what maybe falls off longer term? And then secondly, just on the DHX TV, you alluded to kind of a net versus growth impact.

Just wondering, how that effectively flows through the revenue line for DHX television in fiscal '18? Thank you.

Yes. Okay.

These are, I’ll take that one straight up. So, we guided on the CapEx, we guided 10 million.

Included in there is there is some intangible spend that is already, it is required payments on some of our intangible assets that we acquired. And there is also some IT spent within our company that needs to be made.

That number at 10 million actually going forward, I see that number coming down more to 5 million to 10 million range going forward. So, at a run rate, I would use 7.5 million, if my models sort of comes down a little bit after this year.

And what was the second question? Sorry, the…

Yes. Just on the DHX TV?

Yes. Purely an accounting thing, we had some ancillary revenues in there that we had expected to realize on a gross basis, they were recognized on a net basis no impact on the bottom-line.

And then for fiscal ’18, just in terms of kind of that revenue line, just trying to figure out, if we still kind of declined 15% to 20% or things kind of normalized a little bit more in ’18 on off the ’17 comp?

No. I think you normalized that down.

There will be, first of all, the majority of our rates from the BDUs are set to the fiscal year. We’ve been quite modest in my view in terms of advertising and promotion revenue.

And then you’re into whatever a normal subscriber churn rate would be.

A few questions. Just Dana, can we just go over the definition of leverage that you’re using your target of 3.5.

Does that include the converts and is that in LTM or a forward-looking number?

Yes, that does -- that includes the converge and it’s a forward-looking number by the time we get to 2019 what our expectations on EBITDA growth would be versus what we would use on free cash flow between now and then to pay down and some assumptions there] I am sure Keith can happily walk through that with you.

But just so we are clear, that’s basically a full year ‘19 number looking at 2020 EBITDA?

Correct.

Is there any cash costs related to the acquisition or anything that have to flow through the statements in fiscal ‘18 or is that all done?

You will see a bit of a cash impact on working capital in Q1 of fiscal ‘18 but forward-looking beyond that not much go beyond Q1.

So, if all the cash costs related to the acquisition fees, everything like that are all -- they are on the balance sheet now?

They are. Everything has been recognized.

All of the acquisition costs, early redemption costs et cetera, et cetera have been recognized in the P&L. There is a portion of it in that are still sitting in accounts payable and will be settled in Q1.

Last question I guess is for Michael. Michael, I appreciate that Peanuts was a big acquisition.

But your comment that it was a huge distraction and led to some of the misses here, but I mean isn’t this a core competency of you guys, I mean you have done many deals through the existence of this company and yet now you are asking us to ignore this and go forward. It just seems this is what you guys do, I mean this is a core competency to integrate these brands you buy, integrate them into your core operations and go forward, it just seems to be a disconnect here between what’s happened and what your message to shareholders has been.

Okay. So that’s a great question actually and an important one, so thank you.

So yes, we’ve rolled up 12, 13, 14 different entities over 10 years average of about one per year. However most of have been in the 10 million, 20 million even 30 million range, at 500 million this was material for this company, and that’s in CAD.

And also, critically what’s different because it involves leverage beyond our comfort zone. And so, for that reason was particularly preoccupying at every level of this company and there was a constant process of -- since everything in our company is -- we are in the front row position to realize the digital opportunity critically as well as the current SVOD opportunity because of our breadth and depth of library and our leadership with WildBrain.

So, this was something we didn’t necessarily have to do, except it was core to building IT which remains essential to this company and was a unique opportunity once in 20 years, once a 50-year opportunity. So, we felt that we really had to focus completely on it and get the deal and the structure and the terms as optimal as possible.

And unfortunately, there was some collateral damage. And that's my two mile of view as Chair of this company.

And so that as what I see as well as the FX as the two primary unexpected factors that led to our disappointing numbers. High priority in this company has been to focus and fix.

And one thing is the Peanut's integration has gone extremely well and the company has executed in my opinion, better than ever on any of our acquisitions in terms of integrating that assets led, we brought in an expert, an integration expert with whom we worked before [Aron Hames] and together with our team has led a flawless integration expert, exercise I should say. And I believe we're basically done and dusted in terms of acquisitions for the foreseeable future.

Now it is use that cash to drive our leverage down, realize the SVOD opportunity, focused on the digital future where we're in leadership.

Michael just following on your question about being done with acquisitions. You also did two little ones in the last little Wild.

Keith or David or anybody, can you give us any sort of EBITDA contribution from those little access to be picking up?

Dana?

I'll ask to turn to David Reagan. David, are you on the call?

Yes, I am Dana.

Good, and can you answer that question? I think the question just clarifying Bentley is EBITDA forward on this two WildBrain small acquisitions we did?

Is that the right one, Bentley?

You got it.

Yeah. And we haven't disclosed that.

We did one acquisition in January and we've made one recent one in the past months. These are diminutive deals and consistent with the WildBrain model.

The keeping is the multiple on these businesses has been very, very attractive, they're highly accretive deals in the sense that they're being done in the four to six times range. And we bring a great deal of value because the WildBrain platform of course has such a volume of viewership that adding in smaller channels means that those channels can then benefit from a higher placement rate on CPMs for ads as well as bringing greater viewership to us.

The second component of the benefit is of course the WildBrain team has a tremendous ability to enhance viewership through modifying the content of some of these channels that we've taken on. And so, I think you'll see and you'll learn more particularly at our Investor Day next week about how that's being done.

If I could just clarify though that yes, in terms of WildBrain, we are rolling up channels and that's part of the -- as we view the operations of that enterprise to just clarify in terms of large pure IP acquisitions that may change in the future. But our current focus has shifted from such acquisitions to deleverage it.

Thank you all for joining us. We look forward to speaking with most of you over the next day or so and a lot of you at the Investor Day.

Thanks for dialling in.