Corus Entertainment Announces Fiscal 2014 Third Quarter Results

Corus Entertainment Announces Fiscal 2014 Third Quarter Results


-- Consolidated revenues up 14% for the quarter and 11% year-to-date
-- Consolidated segment profit up 23% for the quarter and 16% year-to-date
-- Adjusted net income attributable to shareholders of $41.6 million, up
21% in the quarter
-- Adjusted basic earnings per share attributable to shareholders of $0.49,
up 20% in the quarter
-- Free cash flow of $182.4 million year-to-date, up from $121.1 million in
the prior year
TORONTO, July 10, 2014 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its third quarter financial results today.

"In the third quarter, the Company delivered impressive double-digit revenue and segment profit growth fueled by our newly acquired television and radio assets," said John Cassaday, President and Chief Executive Officer of Corus Entertainment. "While we experienced continued softness in the ad markets, we are encouraged by the ratings strength of our flagship networks W and YTV, which have maintained a leadership position with their core audiences, as well as the strong ratings gains from our family brands CMT and ABC Spark. The strength of our recent acquisitions, combined with our core business, continue to drive shareholder value with strong free cash flow and adjusted earnings per share growth for the Company."






Financial
Highlights
-----------

Three months ended Nine months ended

May 31, May 31,

(unaudited -in
thousands of
Canadian dollars
except per share
amounts) 2014 2013(3) 2014 2013(3)
----------------- ---- ------ ---- ------

Revenues

Television 170,565 139,995 500,615 429,960

Radio 43,476 47,078 130,844 139,679
----- ------ ------ ------- -------

214,041 187,073 631,459 569,639
------- ------- ------- -------


Segment profit (1)

Television 75,679 58,154 216,237 176,786

Radio 11,678 14,874 35,985 43,484

Corporate (7,626) (8,464) (20,933) (20,227)
--------- ------ ------ ------- -------

79,731 64,564 231,289 200,043
------ ------ ------- -------


Net income (loss)
attributable to
shareholders (30,325) 89,913 126,682 148,016

Adjusted net
income
attributable to
shareholders (1)
(2) 41,602 34,519 123,560 111,110
----------------- ------ ------ ------- -------


Basic earnings
(loss) per share ($0.36) $1.07 $1.49 $1.77

Adjusted basic
earnings per
share (1) (2) $0.49 $0.41 $1.46 $1.33

Diluted earnings
(loss) per share ($0.36) $1.07 $1.49 $1.76
----------------- ------ ----- ----- -----


Free cash flow (1) 59,399 41,475 182,440 121,084
----------------- ------ ------ ------- -------


(1) Adjusted net income attributable
to shareholders, adjusted basic
earnings per share, segment profit,
segment profit margin and free cash
flow do not have standardized
meanings prescribed by IFRS. The
Company reports on segment profit,
segment profit margin and free cash
flow because they are key measures
used to evaluate performance. For
definitions and explanations, see
discussion under the Key Performance
Indicators section of the 2014
Report to Shareholders.

(2) For the three months ended May
31, 2014, excludes radio broadcast
license and goodwill impairment
charges of $75.0 million ($0.85 per
share), business acquisition,
integration and restructuring costs
of $0.6 million ($0.01 per share),
capital asset impairment charges of
$1.2 million ($0.01 per share) and a
decrease in the purchase price
obligation of $2.0 million ($0.02
per share). For the nine month
period ended May 31, 2014, excludes
the impact of a $127.9 million
($1.51 per share) gain on
remeasurement to fair value of the
Company's 50% interest in TELETOON
which was held prior to
consolidation on September 1, 2013,
radio broadcast license and goodwill
impairment charges of $83.0 million
($0.92 per share), capital asset
impairment charges of $1.2 million
($0.01 per share), business
acquisition, integration and
restructuring costs of $41.2 million
($0.47 per share), an increase in
the purchase price obligation of
$3.3 million ($0.04 per share), and
investment impairment related
charges of $3.3 million ($0.04 per
share). For the three and nine
month periods ended May 31, 2013,
excludes the impact of a gain on
disposition of the Food Network
Canada investment of $55.4 million
($0.66 per share), while for the
nine month period, the impact of
debt refinancing costs of $25.0
million ($0.22 per share) are
excluded as well.

(3) Prior period figures have been
restated to reflect the changes in
accounting standards described in
note 3 to the interim condensed
consolidated financial statements
contained in the 2014 Report to
Shareholders.
Consolidated Results from Operations

For fiscal 2014, the operating results of TELETOON Canada Inc. ("TELETOON"), as well as its assets and liabilities, have been fully consolidated effective September 1, 2013 as a consequence of meeting the definition of control under IFRS 10 - Consolidated Financial Statements. Accordingly, a business combination had occurred in accordance with IFRS 3 - Business Combinations and as a result, TELETOON must be accounted for by applying the acquisition method. On December 20, 2013, the Company received Canadian Radio-television and Telecommunications Commission ("CRTC") approval to complete the acquisition of the remaining 50% interest in TELETOON that it did not already own, as well as the acquisition of Historia and Séries+, s.e.n.c. ("H&S"). These acquisitions closed on January 1, 2014. On January 24, 2014, the CRTC approved the Company's acquisition of the Ottawa-based radio stations (CKQB-FM and CJOT-FM) and the transaction closed on January 31, 2014. As a result of these business combinations, the Company's consolidated results for fiscal 2014 reflect 100% interest in TELETOON effective September 1, 2013, 100% interest in H&S effective January 1, 2014, and 100% interest in the two Ottawa-based radio stations effective January 31, 2014 (refer to note 17 of the interim condensed consolidated financial statements for further details on all acquisitions).

For fiscal 2013, as a result of retroactive application of IFRS 11 - Joint Arrangements, the Company is no longer permitted to proportionately consolidate its 50% equity interest in the operations of TELETOON up to August 31, 2013 (i.e. prior to the business combination on September 1, 2013) and is required to account for its investment using the equity method of accounting. As a consequence, the Television revenues and segment profit for the third quarter of fiscal 2013 were reduced by $13.0 million and $3.7 million, respectively and instead, Corus' share of TELETOON's net income of $2.3 million was reported as Other expense (income) in the Consolidated Statements of Income and Comprehensive Income. For the nine months ended May 31, 2013, the Television revenues and segment profit were reduced by $40.3 million and $15.5 million, respectively, and Corus' share of TELETOON's net income of $11.0 million was reported as Other expense (income) in the Consolidated Statements of Income and Comprehensive Income. The restatement did not change reported net income for fiscal 2013.

Consolidated revenues for the three months ended May 31, 2014 were $214.0 million, up 14% from $187.1 million last year. Consolidated segment profit was $79.7 million, up 23% from $64.6 million last year. Net loss attributable to shareholders for the quarter was $30.3 million ($0.36 basic and diluted per share), compared to net income of $89.9 million ($1.07 basic and diluted per share) last year. Net income attributable to shareholders for the third quarter includes radio broadcast license and goodwill impairment charges of $75.0 million, capital asset impairment charges of $1.2 million, business acquisition, integration and restructuring costs of $0.6 million and a decrease in the purchase price obligation of $2.0 million related to the acquisition of control of TELETOON. Removing the impact of these items results in an adjusted net income of $41.6 million ($0.49 per share) in the quarter. Net income attributable to shareholders for the prior year quarter includes a gain related to the sale of the Company's non-controlling interest in Food Network Canada of $55.4 million. Removing the impact of this item results in an adjusted net income attributable to shareholders of $34.5 million ($0.41 per share) in the prior year quarter.

Consolidated revenues for the nine months ended May 31, 2014 were $631.5 million, up 11% from $569.6 million last year. Consolidated segment profit was $231.3 million, up 16% from $200.0 million last year. Net income attributable to shareholders for the nine months ended May 31, 2014 was $126.7 million ($1.49 per share both basic and diluted) compared to $148.0 million ($1.77 per share basic and $1.76 per share diluted) last year. Net income attributable to shareholders for the nine months ended May 31, 2014 includes a non-cash gain of $127.9 million resulting from the remeasurement to fair value of the Company's 50% interest in TELETOON which was held prior to consolidation on September 1, 2013, radio broadcast license and goodwill impairment charges of $83.0 million, capital asset impairment charges of $1.2 million, business acquisition, integration and restructuring costs of $41.2 million, an increase in the purchase price obligation of $3.3 million and investment impairment related charges of $3.3 million. Removing the impact of these items results in an adjusted net income of $123.6 million ($1.46 per share) for the current year-to-date. Prior year-to-date net income includes a pre-tax charge for debt refinancing of $25.0 million and a gain related to the sale of the Company's non-controlling interest in Food Network Canada of $55.4 million. Removing the impact of these items results in an adjusted net income attributable to shareholders of $111.1 million ($1.33 per share) in the prior year-to-date.

Operational Results - Highlights

Television


-- Fiscal 2014 reflects consolidation of 100% interest in TELETOON,
effective September 1, 2013 and 100% interest in Historia and Séries+,
effective January 1, 2014; Fiscal 2013 was retroactively restated to
apply IFRS 11 - Joint Arrangements, resulting in equity accounting for
Corus' 50% economic interest in TELETOON (i.e. prior to the business
combination on September 1, 2013)
-- Segment revenues increased 22% in Q3 2014 and 16% year-to-date
-- Specialty advertising revenues increased 42% in Q3 2014 and 38%
year-to-date
-- Subscriber revenues increased 24% in Q3 2014 and 20% year-to-date
-- Merchandising, distribution and other revenues declined 27% in Q3 2014
and 33% year-to-date
-- Segment profit((1)) increased 30% in Q3 2014 and 22% year-to-date
-- Segment profit margin((1)) of 44% in Q3 2014 and 43% year-to-date
Radio


-- Fiscal 2014 reflects consolidation of 100% interest in two Ottawa-based
radio stations, CKQB-FM and CJOT-FM, effective January 31, 2014
-- Segment revenues decreased 8% in Q3 2014 and 6% year-to-date
-- Segment profit((1)) decreased 21% in Q3 2014 and 17% year-to-date
-- Segment profit margin((1)) of 27% in Q3 2014 and 28% year-to-date
-- Non-cash broadcast license and goodwill impairment charges of $75.0
million recorded in Q3 2014 and $83.0 million year-to-date.

(1)
Segment profit, segment
profit margin and free cash
flow do not have
standardized meanings
prescribed by IFRS. The
Company reports on segment
profit, segment profit
margin and free cash flow
because they are key
measures used to evaluate
performance. For
definitions and
explanations, see
discussion under the Key
Performance Indicators
section of the 2014 Report
to Shareholders.
Corus Entertainment Inc. reports in Canadian dollars.

The unaudited consolidated financial statements and accompanying notes for the three and nine month periods ended May 31, 2014 and Management's Discussion and Analysis are available on the Company's website at www.corusent.com in the Investor Relations section.

A conference call with Corus senior management is scheduled for July 10, 2014 at 3:00 p.m. ET. While this call is directed at analysts and investors, members of the media are welcome to listen in. The dial-in number for the conference call for local and international callers is 1.416.981.9038 and for North America is 1.800.734.8582. PowerPoint slides for the call will be posted 15 minutes prior to the start of the call and can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

Use of Non-GAAP Financial Measures

This press release includes the non-GAAP financial measures of adjusted net income, adjusted basic earnings per share and free cash flow that are not in accordance with, nor an alternate to, generally accepted accounting principles ("GAAP") and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on the Company's reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company's financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. A reconciliation of the Company's non-GAAP measures is included in the Company's most recent Report to Shareholders which is available on Corus' website at www.corusent.com as well as on SEDAR.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking information and should be read subject to the following cautionary language:

To the extent any statements made in this report contain information that is not historical, these statements are forward-looking statements and may be forward-looking information within the meaning of applicable securities laws (collectively, "forward-looking statements"). These forward-looking statements relate to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook, including advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees, and can generally be identified by the use of the words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Although Corus believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, including without limitation factors and assumptions regarding advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: our ability to attract and retain advertising revenues; audience acceptance of our television programs and cable networks; our ability to recoup production costs, the availability of tax credits and the existence of co-production treaties; our ability to compete in any of the industries in which we do business; the opportunities (or lack thereof) that may be presented to and pursued by us; conditions in the entertainment, information and communications industries and technological developments therein; changes in laws or regulations or the interpretation or application of those laws and regulations; our ability to integrate and realize anticipated benefits from our acquisitions and to effectively manage our growth; our ability to successfully defend ourselves against litigation matters arising out of the ordinary course of business; and changes in accounting standards. Additional information about these factors and about the material assumptions underlying such forward-looking statements may be found in our Annual Information Form. Corus cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise required by applicable securities laws, we disclaim any intention or obligation to publicly update or revise any forward-looking statements whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.

About Corus Entertainment Inc.

Corus Entertainment Inc. is a Canadian-based media and entertainment company that creates, broadcasts and licenses content across a variety of platforms for audiences around the world. The Company's portfolio of multimedia offerings encompasses specialty television and radio with additional assets in pay television, television broadcasting, children's book publishing, children's animation and animation software. Corus' brands include YTV, TELETOON, ABC Spark, W Network, OWN: Oprah Winfrey Network (Canada), HBO Canada, Historia and Séries+, as well as Nelvana, Kids Can Press, Toon Boom and 39 radio stations including CKNW AM 980, 99.3 The FOX, Country 105, 630 CHED, Fresh FM London, JUMP! 106.9, Q107 and 102.1 the Edge. A publicly traded company, Corus is listed on the Toronto Stock Exchange (CJR.B). Experience Corus on the web at www.corusent.com.



CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


As at May 31, As at August 31, As at September 1,

(unaudited -in thousands
of Canadian dollars) 2014 2013(1) 2012(1)
------------------------ ---- ------ ------

ASSETS

Current

Cash and cash equivalents 38,236 81,266 19,198

Accounts receivable 203,206 164,302 163,345

Promissory note receivable - 47,759 -

Income taxes recoverable 4,789 351 9,542

Prepaid expenses and other 10,447 16,392 12,619


Total current assets 256,678 310,070 204,704
-------------------- ------- ------- -------


Tax credits receivable 45,133 41,564 43,865

Intangibles, investments
and other assets 44,345 42,975 42,390

Investment in joint venture - 125,931 121,704

Property, plant and
equipment 143,274 151,192 163,280

Program and film rights 287,442 232,587 229,306

Film investments 68,284 62,274 67,847

Broadcast licenses 979,984 515,036 520,770

Goodwill 937,191 646,045 646,045

Deferred tax assets 38,093 39,463 28,327
------------------- ------ ------ ------

2,800,424 2,167,137 2,068,238
--------- --------- ---------


LIABILITIES AND
SHAREHOLDERS' EQUITY

Current

Accounts payable and
accrued liabilities 248,422 164,443 177,367

Income taxes payable - - 1,303

Provisions 3,912 3,941 2,322
---------- ----- ----- -----

Total current liabilities 252,334 168,384 180,992
------------------------- ------- ------- -------


Long-term debt 873,587 538,966 518,258

Other long-term liabilities 119,174 93,241 87,588

Deferred tax liabilities 254,504 145,713 145,310

Total liabilities 1,499,599 946,304 932,148
----------------- --------- ------- -------

SHAREHOLDERS' EQUITY

Share capital 957,477 937,183 910,005

Contributed surplus 8,432 7,221 7,835

Retained earnings 315,185 256,517 198,445

Accumulated other
comprehensive income
(loss) 3,618 1,653 (812)
--------------------- ----- ----- ----

Total equity attributable
to shareholders 1,284,712 1,202,574 1,115,473

Equity attributable to non-
controlling interest 16,113 18,259 20,617
--------------------------- ------ ------ ------

Total shareholders' equity 1,300,825 1,220,833 1,136,090
-------------------------- --------- --------- ---------

2,800,424 2,167,137 2,068,238
--------- --------- ---------


(1) Prior period figures have been
restated to reflect the changes in
accounting standards described in
note 3
to the interim condensed
consolidated financial statements
contained in the 2014 Report to
Shareholders.










CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


Three months ended Nine months ended

May 31, May 31,

(unaudited -in thousands of
Canadian dollars except per
share amounts) 2014 2013 (1) 2014 2013 (1)
---------------------------- ---- ------- ---- -------

Revenues 214,041 187,073 631,459 569,639

Direct cost of sales,
general and administrative
expenses 134,310 122,509 400,170 369,596

Depreciation and
amortization 7,385 6,904 18,653 20,805

Interest expense 13,453 10,456 35,327 35,859

Broadcast license and
goodwill impairment 75,000 - 83,000 -

Debt refinancing - - - 25,033

Business acquisition,
integration and
restructuring costs 560 2,147 41,216 2,147

Gain on acquisition - (55,394) (127,884) (55,394)

Other (income) expense, net (1,489) (2,193) 7,216 (10,860)
--------------------------- ------ ------ ----- -------


Income (loss) before income
taxes (15,178) 102,644 173,761 182,453

Income tax expense 13,691 11,132 43,224 30,045


Net income (loss) for the
period (28,869) 91,512 130,537 152,408
------------------------- ------- ------ ------- -------


Net income (loss)
attributable to:

Shareholders (30,325) 89,913 126,682 148,016

Non-controlling interest 1,456 1,599 3,855 4,392
------------------------ ----- ----- ----- -----

(28,869) 91,512 130,537 152,408
------- ------ ------- -------


Earnings (loss) per share
attributable to
shareholders:

Basic ($0.36) $1.07 $1.49 $1.77

Diluted ($0.36) $1.07 $1.49 $1.76
------- ------ ----- ----- -----


Net income (loss) for the
period (28,869) 91,512 130,537 152,408

Other comprehensive income
(loss), net of tax:

Items that may be
reclassified subsequently
to income:

Unrealized foreign currency
translation adjustment (646) 204 1,620 1,685

Unrealized change in fair
value of available-

for-sale investments 392 (368) 454 (42)

Unrealized change in fair
value of cash flow

hedges 37 - (109) -

(217) (164) 1,965 1,643
---- ---- ----- -----


Comprehensive income (loss)
for the period (29,086) 91,348 132,502 154,051
--------------------------- ------- ------ ------- -------


Comprehensive income (loss)
attributable to:

Shareholders (30,542) 89,749 128,647 149,659

Non-controlling interest 1,456 1,599 3,855 4,392
------------------------ ----- ----- ----- -----

(29,086) 91,348 132,502 154,051
------- ------ ------- -------


(1) Prior period figures have been
restated to reflect changes in
accounting standards described in
note 3 to the interim condensed
consolidated financial statements
contained in the 2014 Report to
Shareholders.








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CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


Three months ended Nine months ended May
May 31, 31,

(unaudited -in
thousands of
Canadian dollars) 2014 2013(1) 2014 2013(1)
------------------ ---- ------ ---- ------

OPERATING
ACTIVITIES

Net income (loss)
for the period (28,869) 91,512 130,537 152,408

Add (deduct) non-
cash items:

Depreciation and
amortization 7,385 6,904 18,653 20,805

Broadcast license
and goodwill
impairment 75,000 - 83,000 -

Amortization of
program and film
rights 51,624 43,493 153,768 126,714

Amortization of
film investments 4,201 7,691 13,256 17,399

Deferred income
taxes (637) (3,250) 4,384 (9,976)

Increase (decrease)
in purchase price
obligation (1,952) - 3,336 -

Share-based
compensation
expense 528 430 1,489 1,162

Imputed interest 3,840 2,526 10,985 7,679

Tangible benefit
obligation - - 31,916 -

Debt refinancing - - - 25,033

Gain on sale of
associated company - (55,394) - (55,394)

Gain on acquisition - - (127,884) -

Other 485 (4,174) 1,900 (12,624)

Net change in non-
cash working
capital

balances related to
operations 14,870 1,978 3,312 (7,325)

Payment of program
and film rights (43,975) (33,968) (104,653) (95,491)

Net additions to
film investments (19,017) (14,709) (32,765) (48,943)

Cash provided by
operating
activities 63,483 43,039 191,234 121,447
---------------- ------ ------ ------- -------


INVESTING
ACTIVITIES

Additions to
property, plant
and equipment (3,435) (2,853) (7,715) (10,317)

Business
combinations (5,265) - (496,706) -

Dividends from
investment in
joint venture - 1,290 - 9,041

Net cash flows for
intangibles,
investments and
other assets (2,321) (2,321) (7,395) (9,287)

Other (201) (90) (323) (414)
----- ---- --- ---- ----

Cash used in
investing
activities (11,222) (3,974) (512,139) (10,977)
------------ ------- ------ -------- -------


FINANCING
ACTIVITIES

Increase (decrease)
in bank loans (39,964) - 333,101 (29,925)

Issuance of notes - - - 550,000

Redemption of notes - (500,000) - (500,000)

Financing fees - (18,125) (587) (26,732)

Issuance of shares
under stock option
plan 566 135 1,459 884

Shares repurchased - - - (1,464)

Dividends paid (16,380) (14,586) (48,316) (41,584)

Dividends paid to
non-controlling
interest - (599) (6,001) (5,715)

Other (532) (4,488) (1,781) (9,589)
----- ---- ------ ------ ------

Cash provided by
(used in)
financing
activities (56,310) (537,663) 277,875 (64,125)
---------------- ------- -------- ------- -------

Net change in cash
and cash
equivalents

during the period (4,049) (498,598) (43,030) 46,345

Cash and cash
equivalents,
beginning of the
period 42,285 564,141 81,266 19,198
----------------- ------ ------- ------ ------

Cash and cash
equivalents, end
of the period 38,236 65,543 38,236 65,543
----------------- ------ ------ ------ ------


(1) Prior period figures have been
restated to reflect changes in
accounting standards described in
note 3 to the interim
condensed consolidated financial
statements contained in the 2014
Report to Shareholders.







CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION


(unaudited - in thousands of Canadian dollars)


Three months ended May 31, 2014

Television Radio Corporate Consolidated
---------- ----- --------- ------------

Revenues 170,565 43,476 - 214,041

Direct cost of sales, general

and administrative expenses 94,886 31,798 7,626 134,310
--------------------------- ------ ------ ----- -------

Segment profit (loss) (1) 75,679 11,678 (7,626) 79,731

Depreciation and amortization 7,385

Interest expense 13,453

Broadcast license and goodwill impairment 75,000

Business acquisition, integration and restructuring costs 560

Other income, net (1,489)
----------------- ------

Loss before income taxes (15,178)
------------------------ -------


Three months ended May 31, 2013

Television (2) Radio Corporate Consolidated
------------- ----- --------- ------------

Revenues 139,995 47,078 - 187,073

Direct cost of sales, general

and administrative expenses 81,841 32,204 8,464 122,509
--------------------------- ------ ------ ----- -------

Segment profit (loss) (1) 58,154 14,874 (8,464) 64,564

Depreciation and amortization 6,904

Interest expense 10,456

Gain on sale of associated company (55,394)

Business acquisition, integration and restructuring costs 2,147

Other income, net (2,193)
----------------- ------

Income before income taxes 102,644
-------------------------- -------


Nine months ended May 31, 2014

Television Radio Corporate Consolidated
---------- ----- --------- ------------

Revenues 500,615 130,844 - 631,459

Direct cost of sales, general

and administrative expenses 284,378 94,859 20,933 400,170
--------------------------- ------- ------ ------ -------

Segment profit (loss)(1) 216,237 35,985 (20,933) 231,289

Depreciation and amortization 18,653

Interest expense 35,327

Broadcast license and goodwill impairment 83,000

Business acquisition, integration and restructuring costs 41,216

Gain on acquisition (127,884)

Other expense, net 7,216
------------------ -----

Income before income taxes 173,761
-------------------------- -------


Nine months ended May 31, 2013

Television (2) Radio Corporate Consolidated
------------- ----- --------- ------------

Revenues 429,960 139,679 - 569,639

Direct cost of sales, general

and administrative expenses 253,174 96,195 20,227 369,596
--------------------------- ------- ------ ------ -------

Segment profit (loss) (1) 176,786 43,484 (20,227) 200,043

Depreciation and amortization 20,805

Interest expense 35,859

Gain on sale of associated company (55,394)

Debt refinancing 25,033

Business acquisition, integration and restructuring costs 2,147

Other income, net (10,860)
----------------- -------

Income before income taxes 182,453
-------------------------- -------


(1) Segment profit does not have a
standardized meaning prescribed by
IFRS. For definitions and
explanations, see discussion
under the Key Performance
Indicators section of the 2014
Report to Shareholders.

(2) Prior period figures have been
restated to reflect the changes in
accounting standards described in
note 3 to the interim
consolidated financial statements
contained in the 2014 Report to
Shareholders.




Revenues by type

Three months ended Nine months ended

May 31, May 31, May 31, May 31,

2014 2013(1) 2014 2013(1)
---- ------ ---- ------

Advertising 108,039 91,961 319,281 274,475

Subscriber fees 86,522 70,006 249,199 207,622

Merchandising,
distribution and
other 19,480 25,106 62,979 87,542
----------------- ------ ------ ------ ------

214,041 187,073 631,459 569,639
------- ------- ------- -------


(1) Prior period figures have been restated to reflect the changes in accounting standards described in note 3 to the
interim condensed consolidated
financial statements contained in the 2014 Report to Shareholders.


Reconciliation of changes related to the retroactive adoption of IFRS 11 - Joint Arrangements in the consolidated statements of financial position, income and comprehensive income, and cash flows for the periods indicated.





Consolidated Statements of Financial Position

(in thousands of Canadian
dollars) August 31, 2013 September 1, 2012
------------------------- --------------- -----------------

Originally IFRS 11 Restated Originally IFRS 11 Restated
Reported Adjustment Reported Adjustment
-------- ---------- -------- ----------

Assets

Cash and cash equivalents 86,081 (4,815) 81,266 24,588 (5,390) 19,198

Accounts receivable 176,504 (12,202) 164,302 173,421 (10,076) 163,345

Promissory note
receivable 47,759 - 47,759 - - -

Income taxes recoverable 341 10 351 9,542 - 9,542

Prepaid expenses and
other 16,416 (24) 16,392 12,664 (45) 12,619

Total current assets 327,101 (17,031) 310,070 220,215 (15,511) 204,704
-------------------- ------- ------- ------- ------- ------- -------


Tax credits receivable 41,564 - 41,564 43,865 - 43,865

Intangibles, investments
and other assets 42,975 - 42,975 42,390 - 42,390

Investments in joint
venture - 125,931 125,931 - 121,704 121,704

Property, plant and
equipment 151,398 (206) 151,192 163,563 (283) 163,280

Program and film rights 289,181 (56,594) 232,587 271,244 (41,938) 229,306

Film investments 62,734 (460) 62,274 67,983 (136) 67,847

Broadcast licenses 563,771 (48,735) 515,036 569,505 (48,735) 520,770

Goodwill 674,393 (28,348) 646,045 674,393 (28,348) 646,045

Deferred tax assets 39,463 - 39,463 28,327 - 28,327
------------------- ------ --- ------ ------ --- ------

2,192,580 (25,443) 2,167,137 2,081,485 (13,247) 2,068,238
--------- ------- --------- --------- ------- ---------


Liabilities and
Shareholders' Equity

Accounts payable and
accrued liabilities 172,663 (8,220) 164,443 185,991 (8,624) 177,367

Income taxes payable - - - - 1,303 1,303

Provisions 3,941 - 3,941 2,322 - 2,322

Total current liabilities 176,604 (8,220) 168,384 188,313 (7,321) 180,992
------------------------- ------- ------ ------- ------- ------ -------

Long-term debt 538,966 - 538,966 518,258 - 518,258

Other long-term
liabilities 105,020 (11,779) 93,241 87,853 (265) 87,588

Deferred tax liabilities 151,157 (5,444) 145,713 150,971 (5,661) 145,310

Total liabilities 971,747 (25,443) 946,304 945,395 (13,247) 932,148
----------------- ------- ------- ------- ------- ------- -------


Shareholders' Equity

Share capital 937,183 - 937,183 910,005 - 910,005

Contributed surplus 7,221 - 7,221 7,835 - 7,835

Retained earnings 256,517 - 256,517 198,445 - 198,445

Accumulated other
comprehensive income
(loss) 1,653 - 1,653 (812) - (812)
--------------------- ----- --- ----- ---- --- ----

Total equity attributable
to shareholders 1,202,574 - 1,202,574 1,115,473 - 1,115,473
------------------------- --------- --- --------- --------- --- ---------

Equity attributable to
non-controlling
interest 18,259 - 18,259 20,617 - 20,617
---------------------- ------ --- ------ ------ --- ------

Total shareholders'
equity 1,220,833 - 1,220,833 1,136,090 - 1,136,090
------------------- --------- --- --------- --------- --- ---------

2,192,580 (25,443) 2,167,137 2,081,485 (13,247) 2,068,238
--------- ------- --------- --------- ------- ---------




Consolidated Statements of Income and Comprehensive Income




(in thousands of Canadian
dollars) Three months ended May 31, 2013 Nine months ended May 31, 2013
------------------------- ------------------------------- ------------------------------

Originally IFRS 11 Restated Originally IFRS 11 Restated
Published Adjustment Published Adjustment
--------- ---------- --------- ----------


Revenues 200,060 (12,987) 187,073 609,907 (40,268) 569,639

Direct cost of sales, general
and

administrative expenses 131,834 (9,325) 122,509 394,340 (24,744) 369,596
----------------------- ------- ------ ------- ------- ------- -------

Segment profit 68,226 (3,662) 64,564 215,567 (15,524) 200,043
-------------- ------ ------ ------ ------- ------- -------

Depreciation and amortization 6,926 (22) 6,904 20,872 (67) 20,805

Interest expense 10,456 - 10,456 35,859 - 35,859

Debt refinancing - - - 25,033 - 25,033

Business acquisition,
integration and restructuring
costs 2,147 - 2,147 2,147 - 2,147

Gain on sale of associated
company (55,394) - (55,394) (55,394) - (55,394)

Other expense (income), net 82 (5) 77 162 (16) 146

Income from joint venture - (2,270) (2,270) - (11,006) (11,006)

Income before income taxes 104,009 (1,365) 102,644 186,888 (4,435) 182,453

Income tax expense 12,497 (1,365) 11,132 34,480 (4,435) 30,045
------------------ ------ ------ ------ ------ ------ ------

Net income for the period 91,512 - 91,512 152,408 - 152,408
------------------------- ------ --- ------ ------- --- -------


Net income attributable to:

Shareholders 89,913 - 89,913 148,016 - 148,016

Non-controlling interest 1,599 - 1,599 4,392 - 4,392
------------------------ ----- --- ----- ----- --- -----

91,512 - 91,512 152,408 - 152,408
------ --- ------ ------- --- -------


Earnings per share
attributable to shareholders:

Basic $1.07 - $1.07 $1.77 - $1.77

Diluted $1.07 - $1.07 $1.76 - $1.76
------- ----- --- ----- ----- --- -----



Net income for the period 91,512 - 91,512 152,408 - 152,408


Other comprehensive income
(loss), net of tax:

Items that may be reclassified
subsequently to income:

Unrealized foreign currency
translation adjustment 204 - 204 1,685 - 1,685

Unrealized change in fair
value of available-for-sale
investments (368) - (368) (42) - (42)

(164) - (164) 1,643 - 1,643
---- --- ---- ----- --- -----

Comprehensive income for the
period 91,348 - 91,348 154,051 - 154,051
---------------------------- ------ --- ------ ------- --- -------


Comprehensive income
attributable to:

Shareholders 89,749 - 89,749 149,659 - 149,659

Non-controlling interest 1,599 - 1,599 4,392 - 4,392
------------------------ ----- --- ----- ----- --- -----

91,348 - 91,348 154,051 - 154,051
------ --- ------ ------- --- -------









Consolidated Statements
of Cash Flows



(in thousands of
Canadian dollars) Three months ended May 31, 2013 Nine months ended May 31, 2013
------------------ ------------------------------- ------------------------------

Originally IFRS 11 Restated Originally IFRS 11 Restated
Published Adjustment Published Adjustment
--------- ---------- --------- ----------

Operating Activities

Net income for the
period 91,512 - 91,512 152,408 - 152,408

Add (deduct) non-cash
items:

Depreciation and
amortization 6,926 (22) 6,904 20,872 (67) 20,805

Amortization of program
and film rights 49,476 (5,983) 43,493 142,077 (15,363) 126,714

Amortization of film
investment 7,691 - 7,691 17,399 - 17,399

Deferred income taxes (3,250) - (3,250) (9,976) - (9,976)

Share-based
compensation expense 430 - 430 1,162 - 1,162

Imputed interest 2,526 - 2,526 7,679 - 7,679

Debt refinancing - - - 25,033 - 25,033

Gain on sale of
associated company (55,394) - (55,394) (55,394) - (55,394)

Other (404) (3,770) (4,174) (118) (12,506) (12,624)

Net change in non-cash
working capital
balances related to
operations 1,521 457 1,978 (8,025) 700 (7,325)

Payment of program and
film rights (38,895) 4,927 (33,968) (106,327) 10,836 (95,491)

Net additions to film
investment (14,709) - (14,709) (48,943) - (48,943)
--------------------- ------- --- ------- ------- --- -------

Cash provided by
operating activities 47,430 (4,391) 43,039 137,847 (16,400) 121,447
--------------------- ------ ------ ------ ------- ------- -------


Investing Activities

Additions to property,
plant and equipment (2,856) 3 (2,853) (10,328) 11 (10,317)

Dividends from
investments in joint
venture - 1,290 1,290 - 9,041 9,041

Net cash flows for
intangibles,
investments and other
assets (2,321) - (2,321) (9,287) - (9,287)

Other (90) - (90) (414) - (414)
----- --- --- --- ---- --- ----

Cash used in investing
activities (5,267) 1,293 (3,974) (20,029) 9,052 (10,977)
---------------------- ------ ----- ------ ------- ----- -------


Financing Activities

Decrease in bank loans - - - (29,925) - (29,925)

Issuance of notes - - - 550,000 - 550,000

Redemption of notes (500,000) - (500,000) (500,000) - (500,000)

Financing fees (18,125) - (18,125) (26,732) - (26,732)

Issuance of shares
under stock option
plan 135 - 135 884 - 884

Shares repurchased - - - (1,464) - (1,464)

Dividends paid (14,586) - (14,586) (41,584) - (41,584)

Dividends paid to non-
controlling interest (599) - (599) (5,715) - (5,715)

Other (4,488) - (4,488) (9,589) - (9,589)
----- ------ --- ------ ------ --- ------

Cash used in financing
activities (537,663) - (537,663) (64,125) - (64,125)
---------------------- -------- --- -------- ------- --- -------


Net change in cash and
cash equivalents
during the period (495,500) (3,098) (498,598) 53,693 (7,348) 46,345

Cash and cash
equivalents, beginning
of the period 573,781 (9,640) 564,141 24,588 (5,390) 19,198
----------------------- ------- ------ ------- ------ ------ ------

Cash and cash
equivalents, end of
the period 78,281 (12,738) 65,543 78,281 (12,738) 65,543
-------------------- ------ ------- ------ ------ ------- ------
SOURCE Corus Entertainment Inc.

Corus Entertainment Inc.

CONTACT: John Cassaday, President and Chief Executive Officer, Corus Entertainment Inc., 416.479.6018; Tom Peddie, Executive Vice President and Chief Financial Officer, Corus Entertainment Inc., 416.479.6080; Sally Tindal, Director, Communications, Corus Entertainment Inc., 416.479.6107

Web Site: www.corusent.com


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