Nancy Chan-Palmateer - Director, Investor Relations Michael Donovan - Executive Chairman and Chief Executive Officer Doug Lamb - Chief Financial Officer Josh Scherba - President Aaron Ames - Chief Operating Officer

Rob Goff - Echelon Wealth Partners Jeff Fan - Scotiabank Global Banking and Markets Bentley Cross - TD Securities Tim Casey - BMO Capital Markets Drew McReynolds - RBC Dominion Securities Inc. Eric Wold - B.

Riley & Co. Edson Lai - GMP Securities Siddhant Dilawari - Cormark Securities

Thank you, operator and thank you, everyone, for joining us today. Speaking on the call today are Michael Donovan, our Executive Chairman and CEO; Doug Lamb, our Chief Financial Officer and Josh Scherba, our President.

Also, with us and available during the question-and-answer session are Aaron Ames, our Chief Operating Officer and David Regan our EVP, Strategy and Corporate Development. We have some standard cautionary statements.

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 business, strategies and key priorities and objectives of the company, expected results from the Strategic Review and other internal review processes of the company and the future financial and operating performance of the company. 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 most recent MD&A and Annual Information Form. Before the question-and-answer session that will follow, we ask that each analyst keep to one question with one followup, so that everyone has a chance to ask questions.

If you would like to ask an additional question, please rejoin the queue. Now turning to Slide 3, I will now hand the call over to our CEO and Executive Chairman, Michael Donovan.

Yes, thank you everyone for joining us on the call this morning. Today, we announced we have concluded our Strategic Review.

Over the last year the special committee of the Board of Directors reviewed a wide range of options to enhance shareholder value. The review generated strong interest in our content and brands leading to formal discussions with multiple parties.

Each of these opportunities was assessed diligently by the special committee of the board and the management. These discussions resulted in the previously announced sale of the minorities stake in Peanuts to Sony and also an agreement announced today for agency representation for Peanuts with Global Brands Group Asia.

I will discuss both of those in greater detail momentarily. In addition to these agreements, the special committee and the management determined that the best way to deliver shareholder value going forward is by pursuing a refocused content strategy, one that targets the two largest growth opportunities for children and family content.

First, we're going to continue to invest in WildBrain, where we see tremendous potential for value creation and continue double-digit growth. We will prioritize investment in short-form content to further drive WildBrain's growth and capitalize on the rising popularity of kids content on YouTube.

Secondarily, we are going to take a highly targeted approach to developing premium content for streaming services and key broadcasters, focusing on kids' shows with the greatest consumer products potential. We intend to develop and expand global franchise brands supported by this new premium content to drive consumer products royalties.

We are excited about both these priorities and our President, Josh Scherba, will be speaking more about our content strategy. Also during the Strategic Review we conducted a comprehensive internal evaluation of our teams, structures and processes.

As a result and as previously announced, we changed our management team and also consolidated a number of offices and made staffing adjustments across business units. This included consolidating our Vancouver animation business from two studio facilities into one and we also brought agency representation on Peanuts in-house to CPLG for the UK, for France, for the Middle East, Greece and Turkey.

Initial results from these and other changes contributed toward the company generating positive cash flow in the fiscal year. Turning to Slide 4, the Strategic Review generated multiple concrete actions that resulted in strengthening our balance sheet and reducing our leverage helping us progress towards our targeted leverage of 3.5x.

First, we completed the sale of the minority stake in Peanuts to Sony which generated $236 million. Secondly, this morning we announced a multimillion dollar five-year agency deal with GBG for Peanuts in China and Asia.

Third, we suspended our quarterly dividend freeing up approximately $10 million annually to invest in our growing WildBrain business and to continue to paydown debt. Lastly, we implemented an $11 million annualized cost savings from the operational synergies and rationalizations.

Going forward we plan to further rationalize overhead expenses and operating efficiencies. Our key priorities for these savings as well as for excess free cash flow is investing in WildBrain and paying down debt.

And to further discuss our Peanuts transaction with Sony, we sold 49% of our 80% interest in Peanuts at more than 20% premium to cost. As a result, $209 million in net proceeds were used to pay down our term loan.

As our territorial agent, Sony has grown peanuts by 200% in Japan since 2010. We have also extended the term of Sony's agency agreement for an additional 10 years in Japan.

As previously mentioned, we signed a multimillion dollar five-year agency agreement with Global Brands Group for Peanuts in Asia – in China and Asia excluding Japan. We expect this agreement to result in approximately 35% increase in revenue from this region over the next five years.

China and Asia are under monetized territories for Peanuts and we believe have significant potential for growth. CAA-GBG offers a network of offices across the territory and is committed to meaningfully increasing Peanuts' presence in these markets.

I will turn the call now over to Doug Lamb for fiscal Q4 2018 financial results.

Thanks Michael. Turning to Slide 7 which provides some financial highlights, in fiscal 2018 revenue increased 45% to $434 million or Q4 2018 revenue grew 11% to $97 million over the prior year period.

This growth was primarily driven by the acquisition of Peanuts and Strawberry Shortcake. Growth in our service business and also continued strong growth at WildBrain.

Growth in these businesses was partially offset by declines in our other businesses. For fiscal 2018 adjusted EBITDA increased to $97.5 million with a net loss of $14 million compared to adjusted EBITDA of $87 million and a net loss of $3.6 million in 2017.

The increase in adjusted EBITDA was a result of the Peanuts and Strawberry Shortcake acquisition, continued strong growth in WildBrain offset by declines in or partially offset by declines in our proprietary production, our distribution, our non-WildBrain distribution and our consumer products represented businesses. For Q4 adjusted EBITDA was $16 million with a net loss of $21.6 million compared to adjusted EBITDA of $23.7 million and a net loss of $18 million in the prior year period.

The decline in Q4 EBITDA was primarily due to declines non-WildBrain distribution revenue. The net loss was partially due to $12 million combined write down of investment in film, television programs acquired in library of content and intangible assets.

Turning now to Slide 8, WildBrain continued its strong growth with revenue increasing by 68% in fiscal 2018 compared with the year ago. Consumer products accounted for 36% of total revenue driven again by Peanuts.

Cash provided by operating activities was $37.8 million excluding one-time acquisition related financing and related refinancing payments. And our leverage ratio at June 30, 2018 of 6.1 times is reduced to 4.7 on a pro forma basis after giving effect to the Sony transaction.

In terms of the leverage ratio I just wanted to take this opportunity to clear up, there is some confusion regarding how we calculate them. The leverage ratio we report in our financial disclosures based on the total net leverage ratio is defined in our senior secure credit agreement.

This ratio is subject to the maintenance covenant set out in the credit agreement and also disclosed in our financial statements and MD&A and in our view is the most relevant metric from a debt perspective. It excludes all EBITDA cash and production financing associated with our unrestricted production entities and also excludes the non-cash film amortization derived from our investment in film asset.

Since our consolidated reporting does not provide details on the split between unrestricted and restricted subsidiaries it is not possible to calculate this ratio from our public reporting. Additional information can be found in our senior secured credit agreement which is filed on SEDAR and EDGAR.

Now turning to Slide 9, just - which provides some additional highlights of the continued growth we are seeing at WildBrain. During fiscal 2018 more than 129 billion minutes of videos were consumed on WildBrain up 135% from 2017.

This translated into revenue of $57million in 2018 representing 68% growth over the prior year. This growth was largely driven by investment in original content and then as Josh will discuss in greater detail continued investment in WildBrain content as the key priority for us going forward.

Turning now to Slide 10, we are beginning to see the benefits of our initiatives to drive improving cash generation. This has resulted in positive cash flow from operating activities of $13.4 million for fiscal 2018 compared to a cash outflow of $6.5 million from the prior year.

Both Q4 2018 and Q4 2017 generated positive operating cash flow of $8.3 million and $6.9 million respectively. And then finally if we add back approximately $24.4 million in fees and refinancing payments related to the Peanuts and Strawberry Shortcake acquisition, operating cash flow for the year ended June 30, 2018 would have been approximately $37.8 million.

With that, I'll now hand the call over to Josh who can provide more detail on our content strategy.

Thanks Doug. Turning to Slide 11, the global market for kids' content is evolving and there are two major opportunities that have emerged.

The first is premium original content as major streaming services such as Netflix, Amazon, Apple and Hulu compete with each other to win subscribers, the have become less reliant on high volume library content and are instead ramping up demand for original shows, meaning high profile and high budget premium content. The second is YouTube, which has become the leading platform for delivering advertising supported content to kids.

I will speak a bit about how we are prioritizing development and production of content to target each of these opportunities. Turning to Slide 12, premium exclusive content has become a driver for major streaming platforms.

Over the last year we have shifted our energies to focus on the development of select high-end originals with top-tier talent to meet this demand. Peanuts and Strawberry Shortcake are two properties that we are very excited about and we have a number of others in our development pipeline that we have not announced yet.

Central to these properties, aside from their huge appeal to kids, is that they have great consumer products potential. Our plan is to leverage a rich portfolio of IP to produce ten whole shows that drive consumer products programs worldwide.

So, does that mean that we are going to stop producing for linear? No, we will continue to partner with top-tier broadcasters as there is still a market for linear, but streaming is the major market now and that's where we're going to focus the majority of our efforts.

Turning to Slide 13, let’s look at WildBrain, our adds supported video-on-demand or AVOD network on YouTube. We have been building WildBrain for a few years now and with more than 110,000 videos for over 600 kids' brands, WildBrain is one of the largest networks of its kind.

As Doug highlighted, WildBrain generated 129 billion minutes watch time in fiscal 2018. That's 129 billion minutes of content watched on our network last year generating $57 million in gross revenue.

By way of comparison in fiscal 2017 WildBrain generated 55 billion minutes watch time with $34 million in revenue. So WildBrain’s revenue grew by 68% in 2018 and in fact has been growing since 2013 at a compound annual rate of 156%.

We are very excited by WildBrain. Short-form content will be created for the network at a much lower cost than premium content and because the volume of viewing we are able to generate there is a very rapid return on our investment.

We intend to increase our investment on WildBrain going forward and use the network to launch new kids series and brands to a massive global audience. Turning to Slide 14, I will hand the call back to Michael.

Thank you, Josh. So, the Strategic Review is now over.

It has resulted in a number of actions to enhance shareholder value. We are now generating positive cash flow which will allow us to invest in our growing WildBrain business and to further pay down debt.

We are on track to deliver growth and we are excited to move forward with our refocused content strategy and new leadership team. I’d like to thank the special committee for their work.

I’d like to thank the special committee for their work. I'd like to thank our investors for their patience and our employees for their dedication.

We look forward to inviting to updating I should say, updating investors as we proceed with our strategy. We are pleased now to take questions.

Good morning and thank you for taking my question. It would be on the distribution revenues, we understand that distribution revenues can be lumpy, could you address the significant year-over-year decline in distribution revenues excluding WildBrian and could you talk to the outlook whether there is a rebound going into fiscal 19?

And for further reference on that with respect to your Q3 release, you had indicated that you were in advanced negotiations for potentially large distribution deals, could you talk to whether or not those remain under negotiation or have you moved forward? Thank you.

Thank you. Rob, so I'll start, but I think I'll also invite both Josh and Doug to speak on the question of distribution and then I'll answer your – the second part of your question after they have spoken.

So yes the thing about the distribution business is that it's lumpy and so you have to be careful that as well, that one swallow does not make a spring. The anomalous distribution decline in Q4 was in fact anomalous and over the - one needs to look at this over the course of a year.

Having said that, the – we're in a very volatile environment. It's a dynamic environment, overall it's growing.

For example, with the arrival of Apple on the scene that's a gamechanger in our world. Amazon are investing more deeply.

Wal-Mart has entered, so that this is continuing to expand and grow. However, it is evolving and what we have done over the course of the special committee is take a rain check on what we've been doing in terms of our strategy and retooling it for these evolving environment and you'll see those results going forward.

And the key is focusing on short-form content for our AVOD platform which is world leading and also on premium content with brands and a consumer products focus. Doug, would do you want to add to that please?

I would just in terms of the actual factors effecting Q4, Rob I think there were really kind of three things. One was that large a very large library deal that was signed in Q4 of last year, so a tough kind of comp.

I think there were a few opportunities larger opportunities we were expecting in Q4 that did not land in Q4 some of those have moved into the next fiscal year. And then I think you know as Michael said there is - the market is evolving and we have a new strategy that we believe will evolve with the market.

I think with that I would hand it over to Josh.

Josh.

Sure, I would echo what's been said. Certainly we're in a dynamic and evolving environment and we're focused on where kids are increasing their consuming content and that's where our new or our refocused strategy comes in.

I would also add that WildBrain is continuing to prove the value of our library as it becomes a major distribution platform for monetizing our existing content, so I think that's worth noting as well.

Thank you and Rob to answer the second part of your question. Yes, we have been working on a number of large transactions involving our content and did so under the strategic review process, but and we are continuing to focus on and work on a number of transactions which we're expecting to be hopefully concluded in the next several quarters.

I think that should answer your question, I don't want to say too much.

That's great. Thank you very much on that.

Okay, thank you.

Thanks. Good morning.

Just on the new deal that you guys have just signed the agency deal with China, can you just maybe give us a little bit more details on how much revenue you're getting from that region today given that the comment was using that as context on the 35% growth of the revenue from this region, so just to give us a sense of how what the magnitude is on this deal and how quickly you expect that revenue stream to ramp up? And then the second question followup is just on the cost savings, you talked about $11 million annualized savings, how quickly does this ramp up, what's the in-year savings that we should be expecting for F 2019?

Okay. So I will start and Doug if you could add to what I say.

For competitive reasons and industry reasons we cannot give the number that’s reflected in the agreement other than to say that it is a material number and it’s a deal that we worked on for a number of months and we’re particularly pleased with. We feel that it's an excellent deal for both us and of course for CAA-GBG.

Asia is a priority for developing of the Peanuts Brand and directionally it’s a very, very significant deal for the company directionally. Again for competitive reasons, we can't give the exact numbers.

Doug?

So in terms of the question on the cost, the $11 million is sort of the synergy number we've announced previously number one and I think Jeff probably if you assumed half of that is already reflected in the financials you'll be in the right ballpark.

Great, thank you.

And then just in terms of the GBG deal, the one thing I would caution you is it’s over an extended period, so it will ramp up over time and also bear in mind that it is a Peanuts agreement which obviously we have now a smaller percentage ownership in and so just want to remind you of that.

Thank you very much.

Good morning.

Good morning.

Maybe I can first ask just, I mean obviously it's an evolving market and it's been pretty hard to call the shots lately and but just wondering if you're willing to provide any sort of metrics for 2019 outlook at this point?

Well, I think you're aware Bentley, we’re not providing guidance, I think just this business first of all I would say like – the business because it’s lumpy it’s really hard to look forward and evolving. But I would say that we're seeing improving trends like we're not seeing Q4 going forward, so I think we've got, it continues to be a very robust market for content, there's a lot of opportunity out there.

But and so we feel good about moving forward, but I think we're not going to get back into the game of providing guidance. I think we're focused on the long-term and making good decisions to rebuild the business from a growth perspective going forward.

Okay, I understand that. But maybe just following on from that, can you give any sort of update of some of the key properties that had previously been talked about where we are on the pipeline i.e.

Mega Man, Polly Pocket, Strawberry Shortcake or anything else that you want to talk about?

Okay, Josh do you mind to answer Bentley’s question?

Sure. So let's talk about a couple of properties.

Strawberry Shortcake we're really excited about where we're at in the development phase of relaunching that property. We expect to have more news coming, but we've had great reactions from global clients on where we've gone creatively and we're in the midst of various partner discussions.

I would say Mega Man launched in August on Cartoon Network in the U.S. and is off to a positive start.

It's going to be rolling out in other markets internationally in the coming months, but that has that has some really positive indicators. Polly Pocket launched in on Family Channel in July and has had an excellent start, it also recently launched in the U.K.

And has had a positive start there as well, so we're feeling good about Poly and we're going to be, there will be more news about additional deals on Poly for other markets in the near future. And then of course Peanuts, we continue to work closely with Schulz family, very excited about the various streams of content that we're working on with them in the development phase.

And what I would say there is that we have launched some short-form Snoopy content on WildBrain that helps feed the market and make sure we've been a content related to Peanuts in this ever increasing area of consumption for kids. And I would also say that Peanuts, our plans for Peanuts will mirror our overall content strategy which is that dual approach of premium long form content and short form content for WildBrain.

Thank you, Josh.

Thanks. Couple from me, I know you’re not giving guidance but how confident are you that you can grow your EBITDA line and your cash flow, your free cash flow line in 2019?

Yes, I would say we're confident that after bearing in mind Tim, first of all you've got to adjust for the fact that we’re losing some EBITDA as a result of the Sony sale. So if you start on like an apples-to-apples basis, I think we feel pretty good about where the business is at and the prospects ahead of us.

In addition to producing the cash flow, we’ve got net, as you’re aware we know to spend the dividend which provides additional free cash flow. So I think yes, I mean the company is in good shape.

I think the debt paydown has strengthened the balance sheet and we're confident in the new content strategy that Josh and Michael have been talking about made sense.

Second question, can you give us an update on the outlook for the broadcasting operations, because my understanding is some of the carriage deals are coming up soon, I don't know if it's in this calendar or if it's later in Fiscal 2019, but what is the outlook there in terms of how you expect those renegotiated carriage deals to go and what any assessment you can provide us for any financial impact on those renegotiations?

Yes, I think the way I would think about that Tim is that we expect to I would think of it in the context of steady EBITDA and cash flow coming out of that business. There is a big renewal coming up with that this year, but we - and I think we've compensated for any risk attached with that through cost reduction plans that have already been implemented in the past fiscal year.

So I suspect - we're confident you'll see it make us, but we will be able to maintain the EBITDA in that business.

Thank you.

Yes, thanks, thanks very much. Michael maybe one for you, looking at kind of the strategy going forward, you talk about targeting AVOD in the premium [indiscernible] market.

That is a bifurcation of the market that you I think alluded to the last two to three years, so just want to get your Monday morning quarterback view of what exactly happened in the last 12 to 18 months, did that bifurcation happened faster than you expected, was it an execution issue? Just putting one getting that that color and context?

Yes. So thanks.

Yes, we've been saying it probably for the last year and a half to two years, but it took the process of the strategic review to really focus all the minds at DHX onto the task of changing the tactic and sending us into different direction. In which case the Strategic Review process has been - has had a positive inside lot of problems, there are always opportunities and so we should have done so perhaps a year ago but we are doing so now and have been for the last two quarters and increasingly over the next period you'll see that bifurcation.

I mean for like 20 years, the market was fairly steady, the value of shows was $350,000 an episode typically maybe $450,000 and that was a fairly predictable and steady market, but streaming has changed everything. We've been bifurcating it into premium and shorter form, lower cost and we find that we are positioned for shorter form by virtue of our leadership and WildBrain, but also position because of our - some of our leading brands, not the least of which are Peanuts and Strawberry for the premium content.

So we've just had to re-imagine our processes from top to bottom on how to realize that opportunity and perhaps yes, we should have done so a year and a half ago, we are doing so now.

Okay, that's helpful. Maybe a quick follow up just on now WildBrain continue to see good growth there can you just speak to what presumably is a quickly changing AVOD environment, is this a property where the level of investment that's required to keep that kind of growth going continues to go up with time and then can you also talk to the need to continue to tuck-in other brands and whether you have the capital to do that strategy as well?

So we believe, I mean first of all that the AVOD market is growing across the board at about 36% per year and those are the figures put out by amongst others Google and YouTube. So if we did nothing we believe we would grow at that rate that is the rate of the market, that our brands because we are participating, and that's because more and more people are finding the iPad and other portable devices the best way for families and children to engage with media and with that the trends and as the habits builds, the rate of growth is about 36%, so we think that for the immediate future the next three, four, five years.

But we have been able to grow at a greater rate than that for a number of reasons; one is we've been bringing other content to our site and we've been able to do that through the network effect, which is that as we are, because we are the biggest we can obtain the best results in a number of areas including prices and that attracts more which allows us to be bigger which allows us to achieve a number of goals again most important which is pricing, so that's why we've been growing at a greater rate than the market. We believe now we can add investment to that, that we can because we haven’t been materially investing a little bit but not a lot, by making it a priority that we can accelerate that growth and by focusing on areas for example e-commerce.

And so that's why that is a priority area for investing. We think we can grow it at a greater rate with investment.

Thank you.

Thank you and good morning. One quick numbers question and then a followup on WildBrain and I apologize if it's in the filing I haven’t found it yet, but can you give us the pro forma EBITDA for last you are assuming that's the only deal around Peanuts was in place for the full year?

And then on WildBrain another period to period can be may not be the perfect relationship, but looking at last year the minutes viewed well more than doubled the revenues grew 68%. Is there anything there more on the composition of content that may have caused that relationship and as you move towards more short-form programming, obviously that there's a lower cost in programming the long-form is the content just as attractive to advertise around for brands and advertisers more opportunities for ads, for our [indiscernible] maybe some thoughts around how [indiscernible] the dynamics of WildBrain going forward?

Yes, in terms of - we don't have, I don't have the pro forma EBITDA, but I think if you think Peanuts is in the range of about $30 million in EBITDA.

Okay and I can address the WildBrain question there before we move on. So it's natural that ad inventory lies behind expansion in views and watch time, so you can look back to previous years and you would see this as well.

But obviously we continue to grow in these areas and we think there's still plenty of room to continue to grow. As it relates to short-form content, I think certainly it's the most popular form of content consumed on WildBrain, but I will say that there are a variety of lengths of content that work well producing short-form.

I would say that we're - it's not as simple as just throwing a two or three minute video up there and hoping. We use lots of channel optimization.

We combine short-form content together into longer compilations that do allow for the most ad placement and fit consumption patterns on the network. So it's a variety of techniques that we use, but as you alluded to certainly lower cost on short-form allows us to test lots of different types of content to really been in on the things that are working.

Thank you.

Good morning. Thanks for taking my questions.

I was wondering if you could talk about live action and how you guys see this segment going forward after the Strategic Review and is this something that you want to stay in? Thanks.

Josh?

Sure, so yes, I mean we're currently producing a live action comedy series for NBCUniversal called the [indiscernible]. We're also producing a second season of [indiscernible] which is a co-production with the BBC.

And as we talk about this bifurcated market and then opportunity on premium we definitely see live action as a continued opportunity in that area, particularly with the streaming services moving forward. So we're going to stay active in developing live action properties and we for the foreseeable future we see that as an opportunity.

Perfect, thanks for the answer. I was wondering if you could circle back to Teletubbies and obviously that was a large investment in the past, what's the prospect of improving returns on those going forward?

I'll answer first and then Josh if you could add please. Yes, note Teletubbies was a priority and continues to be a priority.

Our launch was not successful as we had hoped because it did not succeed in the United States sufficiently and you either get on the shelves or you don't. However, it continues to meet and exceed in the U.K.

and in certain other territories. And we are in the process and again as part of this process reimagining that strategy, the strategy I should say around Teletubbies and well, there are further announcements in the next year or two around the relaunch.

Josh?

Yes, I mean just a little bit of color. I think that the, I think we all know Teletubbies reaches that kind of youngest and of preschool and for many broadcasters who are looking to achieve the highest ratings they can in a competitive market they've gone broader, so it's been hard to get consistent scheduling on some of these networks and I think that's part of what happened in the U.S.

with Nickelodeon. And we're seeing the consumption of this youngest and of preschool migrate quickly over to YouTube and YouTube Kids in particular.

And so as we have rights come back off the various broadcast deals internationally we are going to focus our efforts on WildBrain with Teletubbies and we think there's – there will be potential to grow that audience in many markets.

Perfect thanks for that. I’ll pass the line.

Hi, good morning. So I just had a quick question on the cash flow statement.

So if you look at the net investment in film and television programs, it's quite variable as opposed to last year. So we had negative $57.2 million last year and positive $4.5 million this year.

Is there any specific reason to that and how should we be modeling this going forward? And then a quick followup on that would be, looking at the distribution in non-controlling interest, we’re standing at $12.1 million as of this year.

How should we be modeling this number going forward as well? That's it from me, thanks.

In terms of the, yes in terms of the investment in film I think there was a significant investment in some of the Mattel properties that affected the prior year was a big factor. I think in terms of going forward how I'd think about it is, a similar proprietary productions played in terms of volume to this year is what we're expecting in the next year or so.

And so, I think you should see a relatively stable like you've seen right here, big change swings in funding, so it should be more similar to this year. And the second question was the non-controlling interest rates, so the non-controlling interest is primarily related to, although not, there are some WildBrain properties that we've acquired that have retained interest and have small amount, there are some, some of that amount is related to those, but the majority of it is related to Peanuts and so that in the current year was related to the 20% ownership of the family and that will increase significantly because Sony is now a partner in that business and with roughly 40%.

Okay, thank you.

So you'll see that increase significantly.

Yes, thanks.

Just a quick followup for you, Doug. In years past, we've gotten service gross margins and looking through the release I must have missed it, it's not in there this year, I was just wondering if you can give us a ballpark just to try to differentiate between kind of the core content business and the services?

I mean, I think historically it's been in the range of 30% to 35%, we would still be, I would say probably 30% is a reasonable assumption.

Thank you.

Thanks. Just going back to the new deal that you signed on Peanuts, the agency deal, so it looks like in the past you have given some geographic disclosure around Peanuts for Asia, ex-Japan and at the time that you made the acquisition, I think it was around 11% of your revenue for Peanuts coming from Asia, ex-Japan.

I’m wondering if that's still a good number to start off with if we base it on 2017. Second part is just you said Doug, I think that it's going to take time to ramp up, do you expect any contribution from this in 2019?

And then finally just a bit of a numbers question, I apologize but wondering if you can kind of help walk us through how you'd get to the 4.7 times pro forma leverage starting with the disclosure that you have on net debt and adjusted EBITDA on your financial statement, just kind of walk us through how we get there because we're just trying to look forward to see how this leverage is going to look in the next couple of quarters?

Okay. So on the first one I think yes in the range of 10% is probably a good starting point.

In terms of contribution we will see some contribution, but bearing in mind it's got a filter through a cost structure in Peanuts which includes sort of royalty payment off the top to the family and then the ultimate EBITDA split between the three partners. So we will see a lift from that contract, but it's not going to be, it is like in the low single millions kind of thing, it's not, you're not talking about a massive increase in the first year.

In terms of the covenants, the biggest difference is the investment in film amort [ph]. So I think if you start, I think if you add that back which is disclosed you can go into the notes and see how much that is, I can’t reconcile it on the phone here because there's a whole bunch of it.

I mean if you go to the credit agreement, there's always these things, it is very long multi-page definition of how we calculate EBITDA and you could see the differences there. We - the reason we disclose the actual number is because you can't calculate it from our financial statements.

And just to clarify the denominator that you are using to get to the 4.7, have you backed out the EBITDA that is attributed to Sony?

Yes.

I guess the half that you sold, okay.

The short answer is yes, but the way it works practically and I don’t want to go down the rabbit hole too far, but essentially Peanuts is now an unrestricted sub, and so all of the EBITDA comes out and then we add back our proportion of cash, actual cash distributions goes back into the EBITDA for covenant purposes. So that is practically how it works and it so happens that EBITDA or the distributions in the last year have been somewhat higher than EBITDA, but going forward I think it’s going to be roughly similar.

Okay. And then the numerator you have taken into account the - I think $160 million of proceeds USD on your net debt to get to the 4.7?

Right.

Okay, great. That's all, thanks.

Just a clarification, Doug. On that Peanuts number of roughly $30 million, that is for all of Peanuts and is that in U.S.

or Canadian?

That would be, that is kind of the 80% that is in our statements in Canadian.

Also that is a 2018 number, 80%?

It’s roughly like, it’s roughly plus or minus.

Are you confident you will grow that number in fiscal 2019?

Well net off, I mean we’re starting with half of it, but because of the transaction rate, but yes that business is doing well.

Okay, thank you.

Thank you for joining us today and we look forward to speaking to you on the first quarter. Have a good day.