NOTE 2: BUSINESS ACQUISITION SUBSEQUENT TO YEAR-END

On July 13, 2006, Astral and Corus Entertainment Inc. ("Corus") entered into an agreement to acquire an additional 20% ownership interest in TELETOON Canada Inc. ("TELETOON") for a total cash consideration of approximately $96.0 million. The acquisition, which increases their respective direct and indirect ownership interest in TELETOON to 50%, was approved by the Canadian Radio-television and Telecommunications Commission ("CRTC") on August 28, 2006 and was recorded using the purchase method upon its closing on October 23, 2006.