Corus Entertainment Announces Fiscal 2014 Second Quarter Results

Corus Entertainment Announces Fiscal 2014 Second Quarter Results


-- Consolidated revenue up 11% for the quarter and 9% year-to-date
-- Consolidated segment profit up 16% for the quarter and 12%
year-to-date
-- Adjusted net income attributable to shareholders of $26.8
million, up 10% in the quarter
-- Adjusted basic earnings per share attributable to shareholders
of $0.32 per share, up 10% in the quarter
-- Free cash flow of $123.0 million year-to-date


TORONTO, April 10, 2014 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter financial results today.



"We are already beginning to realize benefits from the integration of
our newly acquired services; Historia, Séries+ and TELETOON. In the
second quarter, our acquisitions drove significant segment profit and
margin growth in our Television business, delivering immediately
accretive earnings per share and free cash flow," said John Cassaday,
President and Chief Executive Officer of Corus Entertainment. "While
our merchandising business faced tough year-over-year comparables in
the quarter and Radio continues to be challenged, we are excited about
the opportunities that our newly acquired assets, combined with the
continued strength of our core brands, bring to the business."




Financial
Highlights

Three months ended Six months ended

February 28, February 28,

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

Revenues

Television 152,101 132,343 330,050 289,965

Radio 39,312 40,277 87,368 92,601

191,413 172,620 417,418 382,566



Segment profit (1)

Television 58,034 48,110 140,558 118,632

Radio 8,470 9,654 24,307 28,610

Corporate (7,222) (6,802) (13,307) (11,763)

59,282 50,962 151,558 135,479



Net income
attributable to
shareholders 6,116 5,944 157,007 58,103

Adjusted net income
attributable to
shareholders (1)
(2) 26,780 24,432 81,957 76,591



Basic earnings per
share $ 0.07 $ 0.07 $ 1.85 $ 0.70

Adjusted basic
earnings per share
(1) (2) $ 0.32 $ 0.29 $ 0.97 $ 0.92

Diluted earnings
per share $ 0.07 $ 0.07 $ 1.85 $ 0.69



Free cash flow (1) 73,405 39,785 123,041 79,609







(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 February 28, 2014, excludes radio
broadcast license impairment charges of $8.0 million ($0.07 per
share), business acquisition, integration and restructuring costs
of $18.7 million ($0.20 per share) and a decrease in the purchase
price obligation of $2.1 million ($0.02 per share).For the six
month period ended February 28, 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 impairment charges of $8.0 million ($0.07 per share),
business acquisition, integration and restructuring costs of $40.7
million ($0.46 per share), an increase in the purchase price
obligation of $5.3 million ($0.06 per share), and investment
impairment related charges of $3.3 million ($0.04 per share). For
the three and six month periods ended February 28, 2013, excludes
the impact of debt refinancing costs of $25.0 million ($0.22 per
share).

(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 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 second quarter of fiscal 2013 were reduced by $11.1
million and $3.7 million, respectively and instead, Corus' share of
TELETOON's net income of $2.7 million was reported as Other expense (income) in the Consolidated Statements of Income and Comprehensive Income. For
the six months ended February 28, 2013, the Television revenues and
segment profit were reduced by $27.3 million and $11.9 million,
respectively, and Corus' share of TELETOON's net income of $8.7 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 February 28, 2014 were
$191.4 million, up 11% from $172.6 million last year. Consolidated
segment profit was $59.3 million, up 16% from $51.0 million last year.
Net income attributable to shareholders for the quarter was $6.1
million ($0.07 basic and diluted per share), compared to $5.9 million
($0.07 basic and diluted per share) last year. Net income attributable
to shareholders for the second quarter includes radio broadcast license
impairment charges of $8.0 million, business acquisition, integration
and restructuring costs of $18.7 million and a decrease in the purchase
price obligation of $2.1 million related to the acquisition of control
of TELETOON. Removing the impact of these items results in an adjusted
net income of $26.8 million ($0.32 per share) in the quarter. Net
income attributable to shareholders for the prior year quarter includes
a pre-tax charge for debt refinancing of $25.0 million. Removing the
impact of this item results in an adjusted net income attributable to
shareholders of $24.4 million ($0.29 per share) in the prior year
quarter.



Consolidated revenues for the six months ended February 28, 2014 were
$417.4 million, up 9% from $382.6 million last year. Consolidated
segment profit was $151.6 million, up 12% from $135.5 million last
year. Net income attributable to shareholders for the six months ended
February 28, 2014 was $157.0 million ($1.85 per share basic and
diluted) compared to $58.1 million ($0.70 per share basic and $0.69
per share diluted) last year. Net income attributable to shareholders
for the six months ended February 28, 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 impairment
charges of $8.0 million, business acquisition, integration and
restructuring costs of $40.7 million, an increase in the purchase price
obligation of $5.3 million and investment impairment related charges of
$3.3 million. Removing the impact of these items results in an
adjusted net income of $82.0 million ($0.97 per share) for the current
year to date. Removing the impact of the prior year pre-tax charge for
debt refinancing of $25.0 million results in an adjusted net income
attributable to shareholders of $76.6 million ($0.92 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 15% in Q2 2014 and 14% year-to-date
-- Specialty advertising revenues increased 38% in Q2 2014 and 36%
year-to-date
-- Subscriber revenues increased 23% in Q2 2014 and 18%
year-to-date
-- Merchandising, distribution and other revenues declined 38% in
Q2 2014 and 35% year-to-date
-- Segment profit(1) increased 21% in Q2 2014 and 18%
year-to-date
-- Segment profit margin(1) of 38% in Q2 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 2% in Q2 2014 and 6% year-to-date
-- Segment profit(1) decreased 12% in Q2 2014 and 15% year-to-date
-- Segment profit margin(1) of 22% in Q2 2014 and 28% year-to-date
-- Radio broadcast license impairment charge of $8.0 million
recorded in Q2 2014





(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 six month periods ended February 28, 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 April
10, 2014 at 2:00 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
1.416.981.9095 and for North America is 1.800.410.1397. 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 February As at August As at September
28, 31, 1,

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

ASSETS

Current

Cash and cash
equivalents 42,285 81,266 19,198

Accounts
receivable 209,648 164,302 163,345

Promissory note
receivable -- 47,759 --

Income taxes
recoverable 6,267 351 9,542

Prepaid
expenses and
other 12,605 16,392 12,619



Total current
assets 270,805 310,070 204,704



Tax credits
receivable 41,929 41,564 43,865

Intangibles,
investments and
other assets 43,210 42,975 42,390

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

Property, plant
and equipment 146,096 151,192 163,280

Program and
film rights 300,178 232,587 229,306

Film
investments 67,926 62,274 67,847

Broadcast
licenses 989,435 515,036 520,770

Goodwill 999,991 646,045 646,045

Deferred tax
assets 37,651 39,463 28,327

2,897,221 2,167,137 2,068,238



LIABILITIES AND
SHAREHOLDERS'
EQUITY

Current

Accounts
payable and
accrued
liabilities 228,326 164,443 177,367

Purchase price
obligations 8,127 -- --

Income taxes
payable -- -- 1,303

Provisions 5,199 3,941 2,322

Total current
liabilities 241,652 168,384 180,992



Long-term debt 913,649 538,966 518,258

Other long-term
liabilities 142,213 93,241 87,588

Deferred tax
liabilities 254,451 145,713 145,310

Total
liabilities 1,551,965 946,304 932,148



Share capital 949,991 937,183 910,005

Contributed
surplus 8,012 7,221 7,835

Retained
earnings 368,761 256,517 198,445

Accumulated
other
comprehensive
income (loss) 3,835 1,653 (812)

Total equity
attributable to
shareholders 1,330,599 1,202,574 1,115,473

Equity
attributable to
non-controlling
interest 14,657 18,259 20,617

Total
shareholders'
equity 1,345,256 1,220,833 1,136,090

2,897,221 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 Six months ended

February 28, February 28,

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

Revenues 191,413 172,620 417,418 382,566

Direct cost of sales,
general and
administrative
expenses 132,131 121,658 265,860 247,087

Depreciation and
amortization 5,533 7,495 11,268 13,901

Interest expense 12,604 13,271 21,874 25,403

Broadcast license -- --
impairment 8,000 8,000

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

Business acquisition,
integration and -- --
restructuring costs 18,734 40,656

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

Other (income)
expense, net (1,006) (3,138) 8,705 (8,667)



Income before income
taxes 15,417 8,301 188,939 79,809

Income tax expense 8,353 1,421 29,533 18,913



Net income for the
period 7,064 6,880 159,406 60,896



Net income
attributable to:

Shareholders 6,116 5,944 157,007 58,103

Non-controlling
interest 948 936 2,399 2,793

7,064 6,880 159,406 60,896



Earnings per share
attributable to
shareholders:

Basic $ 0.07 $ 0.07 $ 1.85 $ 0.70

Diluted $ 0.07 $ 0.07 $ 1.85 $ 0.69



Net income for the
period 7,064 6,880 159,406 60,896

Other comprehensive
income (loss), net of
tax:

Items that may be
reclassified
subsequently to
income:

Unrealized foreign
currency
translation
adjustment 1,891 1,191 2,266 1,481

Unrealized change
in fair value of
available-for-sale
investments (12) 36 62 326

Unrealized change
in fair value of
cash flow hedges (146) -- (146) --

1,733 1,227 2,182 1,807



Comprehensive income
for the period 8,797 8,107 161,588 62,703



Comprehensive income
attributable to:

Shareholders 7,849 7,171 159,189 59,910

Non-controlling
interest 948 936 2,399 2,793

8,797 8,107 161,588 62,703







(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.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



(unaudited - Accumulated Total equity
in thousands other attributable Non-
of Canadian Share Contributed Retained comprehensive to controlling Total
dollars) capital surplus earnings income (loss) shareholders interest equity



At August 31,
2013 937,183 7,221 256,517 1,653 1,202,574 18,259 1,220,833

Comprehensive --
income -- 157,007 2,182 159,189 2,399 161,588

Dividends --
declared -- (44,763) -- (44,763) (6,001) (50,764)

Issuance of
shares under
stock option --
plan 1,063 (170) -- 893 -- 893

Issuance of
shares under
dividend
reinvestment --
plan 11,745 -- -- 11,745 -- 11,745

Share-based
compensation -- --
expense 961 -- 961 -- 961

At February
28, 2014 949,991 8,012 368,761 3,835 1,330,599 14,657 1,345,256





At August 31,
2012 910,005 7,835 198,445 (812) 1,115,473 20,617 1,136,090

Comprehensive --
income -- 58,103 1,807 59,910 2,793 62,703

Dividends --
declared -- (41,445) -- (41,445) (5,116) (46,561)

Issuance of
shares under
stock option --
plan 994 (245) -- 749 -- 749

Issuance of
shares under
dividend
reinvestment --
plan 13,515 -- -- 13,515 -- 13,515

Shares
repurchased (708) -- (756) -- (1,464) -- (1,464)

Share-based
compensation -- --
expense 732 -- 732 -- 732

At February
28, 2013 923,806 8,322 214,347 995 1,147,470 18,294 1,165,764











CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Three months ended Six months ended

February 28, February 28,

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

OPERATING
ACTIVITIES

Net income for
the period 7,064 6,880 159,406 60,896

Add (deduct)
non-cash items:

Depreciation
and
amortization 5,533 7,495 11,268 13,901

Broadcast
license
impairment 8,000 -- 8,000 --

Amortization
of program
and film
rights 51,613 42,093 102,144 83,221

Amortization
of film
investments 5,143 3,501 9,055 9,708

Deferred
income taxes 2,566 (5,432) 5,021 (6,726)

Increase in
purchase
price
obligation (2,056) -- 5,288 --

Share-based
compensation
expense 504 392 961 732

Imputed
interest 4,109 2,628 7,145 5,153

Tangible
benefit
obligation 11,892 -- 31,915 --

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

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

Other 160 (2,120) 1,415 (8,450)

Net change in
non-cash
working capital
balances
related to
operations 11,102 15,175 (11,557) (9,303)

Payment of
program and
film rights (32,587) (36,898) (60,678) (61,523)

Net additions
to film
investments (3,682) (18,160) (13,748) (34,234)

Decrease in
restricted cash 6,407 -- -- --

Cash provided
by operating
activities 75,768 40,587 127,751 78,408



INVESTING
ACTIVITIES

Additions to
property, plant
and equipment (2,344) (3,929) (4,280) (7,464)

Business
combinations (491,441) -- (491,441) --

Dividends from
investment in
joint venture -- 2,861 -- 7,751

Net cash flows
for
intangibles,
investments and
other assets (3,167) (7,039) (5,074) (6,966)

Other (55) (236) (122) (324)

Cash used in
investing
activities (497,007) (8,343) (500,917) (7,003)



FINANCING
ACTIVITIES

Increase
(decrease) in
bank loans 373,065 (39,910) 373,065 (29,925)

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

Financing fees (587) (8,607) (587) (8,607)

Issuance of
shares under
stock option
plan 757 749 893 749

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

Dividends paid (16,238) (13,775) (31,936) (26,998)

Dividends paid
to
non-controlling
interest (1,933) (803) (6,001) (5,116)

Other (584) (2,789) (1,249) (5,101)

Cash provided
by financing
activities 354,480 484,865 334,185 473,538

Net change in
cash and cash
equivalents
during the
period (66,759) 517,109 (38,981) 544,943

Cash and cash
equivalents,
beginning of
the period 109,044 47,032 81,266 19,198

Cash and cash
equivalents,
end of the
period 42,285 564,141 42,285 564,141







(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 February
28, 2014

Television Radio Corporate Consolidated

Revenues 152,101 39,312 -- 191,413

Direct cost of
sales, general
and
administrative
expenses 94,067 30,842 7,222 132,131

Segment profit
(loss)(1) 58,034 8,470 (7,222) 59,282

Depreciation
and
amortization 5,533

Interest
expense 12,604

Broadcast
license
impairment 8,000

Business
acquisition,
integration
and
restructuring
costs 18,734

Other expense
(income), net (1,006)

Income before
income taxes 15,417



Three months
ended February
28, 2013

Television
(2) Radio Corporate Consolidated

Revenues 132,343 40,277 -- 172,620

Direct cost of
sales, general
and
administrative
expenses 84,233 30,623 6,802 121,658

Segment profit
(loss)(1) 48,110 9,654 (6,802) 50,962

Depreciation
and
amortization 7,495

Interest
expense 13,271

Debt
refinancing 25,033

Other expense
(income), net (3,138)

Income before
income taxes 8,301



Six months
ended February
28, 2014

Television Radio Corporate Consolidated

Revenues 330,050 87,368 -- 417,418

Direct cost of
sales, general
and
administrative
expenses 189,492 63,061 13,307 265,860

Segment profit
(loss)(1) 140,558 24,307 (13,307) 151,558

Depreciation
and
amortization 11,268

Interest
expense 21,874

Broadcast
license
impairment 8,000

Business
acquisition,
integration
and
restructuring
costs 40,656

Gain on sale
of associated
company (127,884)

Other expense
(income), net 8,705

Income before
income taxes 188,939



Six months
ended February
28, 2013

Television
(2) Radio Corporate Consolidated

Revenues 289,965 92,601 -- 382,566

Direct cost of
sales, general
and
administrative
expenses 171,333 63,991 11,763 247,087

Segment profit
(loss)(1) 118,632 28,610 (11,763) 135,479

Depreciation
and
amortization 13,901

Interest
expense 25,403

Debt
refinancing 25,033

Other expense
(income), net (8,667)

Income before
income taxes 79,809







(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 condensed
consolidated financial statements contained in the 2014 Report to
Shareholders.











Revenues by
type

Three months ended Six months ended

February February February
28, 28, 28, February 28,

2014 2013 (1) 2014 2013 (1)

Advertising 87,870 75,021 211,242 182,514

Subscriber
fees 83,562 68,204 162,677 137,616

Merchandising,
distribution
and other 19,981 29,395 43,499 62,436

191,413 172,620 417,418 382,566







(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 period indicated.




Consolidated Statements of Financial Position



(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 ventures -- 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



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
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,
except per share
amounts) Three months ended February 28, 2013 Six months ended February 28, 2013

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



Revenues 183,700 (11,080) 172,620 409,847 (27,281) 382,566

Direct cost of
sales, general and
administrative
expenses 129,052 (7,394) 121,658 262,506 (15,419) 247,087

Segment profit 54,648 (3,686) 50,962 147,341 (11,862) 135,479



Depreciation and
amortization 7,517 (22) 7,495 13,946 (45) 13,901

Interest expense 13,271 -- 13,271 25,403 -- 25,403

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

Other expense
(income), net (426) (2) (428) 80 (11) 69

Income from joint
ventures -- (2,710) (2,710) -- (8,736) (8,736)

Income before income
taxes 9,253 (952) 8,301 82,879 (3,070) 79,809

Income tax expense 2,373 (952) 1,421 21,983 (3,070) 18,913

Net income for the
period 6,880 -- 6,880 60,896 -- 60,896



Net income
attributable to:

Shareholders 5,944 -- 5,944 58,103 -- 58,103

Non-controlling
interest 936 -- 936 2,793 -- 2,793

6,880 -- 6,880 60,896 -- 60,896



Earnings per share
attributable to
shareholders:

Basic $ 0.07 -- $ 0.07 $ 0.70 -- $ 0.70

Diluted $ 0.07 -- $ 0.07 $ 0.69 -- $ 0.69





Net income for the
period 6,880 -- 6,880 60,896 -- 60,896



Other comprehensive
income (loss), net
of tax

Items that may be
reclassified
subsequently to
income:

Unrealized foreign
currency
translation
adjustment 1,191 -- 1,191 1,481 -- 1,481

Unrealized change
in fair value of
available-for-sale
investments 36 -- 36 326 -- 326

1,227 -- 1,227 1,807 -- 1,807

Comprehensive income
for the period 8,107 -- 8,107 62,703 -- 62,703



Comprehensive income
attributable to:

Shareholders 7,171 -- 7,171 59,910 -- 59,910

Non-controlling
interest 936 -- 936 2,793 -- 2,793

8,107 -- 8,107 62,703 -- 62,703













Consolidated statements of Cash Flows



(in thousands
of Canadian
dollars) Three months ended February 28, 2013 Six months ended February 28, 2013

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

Operating
Activities

Net income for
the period 6,880 -- 6,880 60,896 -- 60,896

Add (deduct)
non-cash items:

Depreciation
and
amortization 7,517 (22) 7,495 13,946 (45) 13,901

Amortization
of program
and film
rights 46,908 (4,815) 42,093 92,601 (9,380) 83,221

Amortization
of film
investment 3,501 -- 3,501 9,708 -- 9,708

Deferred
income taxes (5,432) -- (5,432) (6,726) -- (6,726)

Share-based
compensation
expense 392 -- 392 732 -- 732

Imputed
interest 2,628 -- 2,628 5,153 -- 5,153

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

Other 590 (2,710) (2,120) 286 (8,736) (8,450)

Net change in
non-cash
working capital
balances
related to
operations 19,587 (4,412) 15,175 (9,546) 243 (9,303)

Payment of
program and
film rights (39,806) 2,908 (36,898) (67,432) 5,909 (61,523)

Net additions
to film
investment (18,160) -- (18,160) (34,234) -- (34,234)

Cash provided
by operating
activities 49,638 (9,051) 40,587 90,417 (12,009) 78,408



Investing
Activities

Additions to
property, plant
and equipment (3,930) 1 (3,929) (7,472) 8 (7,464)

Dividends from
investment in
joint venture -- 2,861 2,861 -- 7,751 7,751

Net cash flows
for
intangibles,
investments and
other assets (7,039) -- (7,039) (6,966) -- (6,966)

Other (236) -- (236) (324) -- (324)

Cash used in
investing
activities (11,205) 2,862 (8,343) (14,762) 7,759 (7,003)



Financing
Activities

Increase in
bank loans (39,910) -- (39,910) (29,925) -- (29,925)

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

Financing fees (8,607) -- (8,607) (8,607) -- (8,607)

Issuance of
shares under
stock option
plan 749 -- 749 749 -- 749

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

Dividends paid (13,775) -- (13,775) (26,998) -- (26,998)

Dividends paid
to
non-controlling
interest (803) -- (803) (5,116) -- (5,116)

Other (2,789) -- (2,789) (5,101) -- (5,101)

Cash provided
by financing
activities 484,865 -- 484,865 473,538 -- 473,538



Net change in
cash and cash
equivalents
during the
period 523,298 (6,189) 517,109 549,193 (4,250) 544,943

Cash and cash
equivalents,
beginning of
the period 50,483 (3,451) 47,032 24,588 (5,390) 19,198

Cash and cash
equivalents,
end of the
period 573,781 (9,640) 564,141 573,781 (9,640) 564,141







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 


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Profile: intent