Corus Entertainment Announces Fiscal 2014 Fourth Quarter and Year-End Results

Corus Entertainment Announces Fiscal 2014 Fourth Quarter and Year-End Results


-- Consolidated revenues up 11% for the quarter and for the fiscal year
-- Consolidated segment profit up 15% for the quarter and for the fiscal
year
-- Net income attributable to shareholders of $150.4 million, down 6% for
the fiscal year
-- Adjusted net income attributable to shareholders of $150.3 million, up
8% for the fiscal year
-- Adjusted basic earnings per share of $1.77 per share, up 7% for the
fiscal year
-- Free cash flow of $175.3 million, up 13% for the fiscal year
TORONTO, Oct. 23, 2014 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its fourth quarter and year-end financial results today.

"In fiscal 2014, with the successful integration of our newly acquired assets, Corus delivered double-digit revenue and segment profit growth, matching our best ever earnings and margin performance. These acquisitions were immediately accretive to earnings per share and contributed to our record-setting free cash flow in the year, significantly enhancing shareholder value," said John Cassaday, President and Chief Executive Officer of Corus Entertainment. "Looking ahead, although we have lowered our segment profit guidance for fiscal 2015, we are encouraged that with the recent repositioning of key large market Radio stations, ongoing ratings strength on our core TV networks and our entry into new markets, we are well positioned to deliver growth and increase the value of our strong brands."



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

Three months ended Year ended

August 31, August 31,

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

Revenues

Television 159,809 137,885 660,424 567,845

Radio 41,748 44,012 172,592 183,691
----- ------ ------ ------- -------

201,557 181,897 833,016 751,536
======= ======= ======= =======


Segment profit (1)

Television 57,036 52,955 273,273 229,741

Radio 9,502 11,664 45,487 55,148

Corporate (8,189) (13,688) (29,122) (33,915)
--------- ------ ------- ------- -------

58,349 50,931 289,638 250,974
====== ====== ======= =======


Net income attributable to shareholders 23,727 11,879 150,408 159,895

Adjusted net income attributable to shareholders (1) (2) 26,785 25,816 150,344 138,573
======================================================= ====== ====== ======= =======


Basic earnings per share $0.28 $0.14 $1.77 $1.91

Adjusted basic earnings per share (1) (2) $0.31 $0.31 $1.77 $1.65

Diluted earnings per share $0.28 $0.14 $1.76 $1.90
========================== ===== ===== ===== =====


Free cash flow (1) (7,164) 33,627 175,276 154,711
================= ====== ====== ======= =======



Error occurred while generating ASCII Content for table


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 fourth quarter of fiscal 2013 were reduced by $11.7 million and $3.5 million, respectively and instead, Corus' share of TELETOON's net income of $1.1 million was reported as Other expense (income) in the Consolidated Statements of Income and Comprehensive Income. For the year ended August 31, 2013, the Television revenues and segment profit were reduced by $52.0 million and $19.0 million, respectively, and Corus' share of TELETOON's net income of $12.1 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 August 31, 2014 were $201.6 million, up 11% from $181.9 million last year. Consolidated segment profit was $58.3 million, up 15% from $50.9 million last year. Net income attributable to shareholders for the quarter was $23.7 million ($0.28 per share basic and diluted), compared to net income of $11.9 million ($0.14 per share basic and diluted) last year. Net income attributable to shareholders for the fourth quarter includes business acquisition, integration and restructuring costs of $5.6 million and an investment impairment recovery of $1.0 million. Removing the impact of these items results in an adjusted net income attributable to shareholders of $26.8 million ($0.31 per share) in the quarter. Net income attributable to shareholders for the prior year quarter includes charges related to broadcast license impairments of $5.7 million, business acquisition, integration and restructuring costs of $5.2 million and asset impairment charges of $7.1 million. Removing the impact of these items results in an adjusted basic earnings per share attributable to shareholders of $0.31 per share in the prior year quarter.

Consolidated revenues for the year ended August 31, 2014 were $833.0 million, up 11% from $751.5 million last year. Consolidated segment profit was $289.6 million, up 15% from $251.0 million last year. Net income attributable to shareholders for the year ended August 31, 2014 was $150.4 million ($1.77 per share basic and $1.76 per share diluted) compared to $159.9 million ($1.91 per share basic and $1.90 per share diluted) last year. Net income attributable to shareholders for the year ended August 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 $46.8 million, an increase in the purchase price obligation of $3.3 million, and investment impairment related charges of $2.3 million. Removing the impact of these items results in an adjusted net income attributable to shareholders of $150.3 million ($1.77 per share basic) for the current year. Prior year net income includes a pre-tax charge for debt refinancing of $25.0 million, the gain related to the sale of the Company's non-controlling interest in Food Network Canada of $55.4 million, broadcast license impairments of $5.7 million, business acquisition, integration and restructuring costs of $7.3 million and investment impairment charges of $7.1 million. Removing the impact of these items results in an adjusted net income attributable to shareholders of $138.6 million ($1.65 per share) in the prior year. Free cash flow for the year ended August 31, 2014 was $175.3 million compared to $154.7 million in the prior year.

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 16% in both Q4 2014 and for the fiscal year
-- Specialty advertising revenues increased 26% in Q4 2014 and 36% for the
fiscal year
-- Subscriber revenues increased 26% in Q4 2014 and 21% for the fiscal year
-- Merchandising, distribution and other revenues declined 16% in Q4 2014
and 28% for the fiscal year
-- Segment profit((1)) increased 8% in Q4 2014 and 19% for the fiscal year
-- Segment profit margin((1)) of 36% in Q4 2014 and 41% for the fiscal year
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 5% in Q4 2014 and 6% for the fiscal year
-- Segment profit((1)) decreased 19% in Q4 2014 and 18% for the fiscal year
-- Segment profit margin((1)) of 23% in Q4 2014 and 26% for the fiscal year
-- Non-cash broadcast license and goodwill impairment charges of $83.0
million for the fiscal year


(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 months and year ended August 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 October 23, 2014 at 2:30 p.m. ET. While this call is directed to 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 416.641.6680 and for North America is 1.800.750.5845. 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 in the Management's Discussion and Analysis filed 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.

Change to Fiscal 2015 Financial Guidance

At its annual Investor Day on January 29, 2014, the Company provided fiscal 2015 financial guidance of $340.0 million to $360.0 million in consolidated segment profit, and free cash flow in excess of $170.0 million. The segment profit guidance assumed a starting point of $330.0 million, which was based on the proforma fiscal 2013 results of the Company's core business, assuming a full year of segment profit from the recently completed acquisitions (refer to note 17 of the interim condensed consolidated financial statements for further details) and projected synergies of $12.0 million. It also assumed growth scenarios of a 2%, 3% and 4% compound annual growth rate off the $330.0 million base segment profit and the Company's ability to successfully integrate the acquisitions to achieve targeted synergies within its expected timelines. The growth scenarios assumed the Canadian economy (GDP) would increase by 2% to 3% for 2015 to support the discretionary nature of advertising expenditures. The Company also assumed minimal subscriber growth based on historical subscriber trending and minimal growth in merchandising, distribution and other revenues based on timing of the launches of Corus' new merchandise brands. Free cash flow guidance for fiscal 2015 of $170.0 million plus was based on the Company's recent historical working capital run-rates, annual capital expenditures of $15.0 million to $20.0 million, inclusion of free cash flow from the acquisitions noted above and the Company's ability to meet its segment profit guidance for fiscal 2015 of $340.0 million to $360.0 million.

The actual fiscal 2014 financial results were below the Company's expectations, primarily due to a weak advertising market, lower than anticipated Pay Television subscribers, and slower actual Canadian economic growth than anticipated. Although the Company exceeded its annual acquisition synergies target of $12.0 million, the proforma starting point for its fiscal 2015 earnings based on actual fiscal 2014 results is closer to $300.0 million and not the previously stated $330.0 million. As a result, the Company is adjusting its fiscal 2015 consolidated segment profit guidance to a revised range of $300.0 million to $320.0 million. The lower end of the Company's revised guidance range is based on fiscal 2014 financial results, continued softness in the economy and its impact on the discretionary nature of advertising expenditures, minimal subscriber growth and minimal growth in merchandising, distribution and other revenues. The upper end of the Company's revised guidance range is based on a stronger economy and advertising expenditures while Corus focuses on delivering continued strong ratings on its Television properties and recovering its Radio ratings in the key advertising markets of Toronto and Vancouver. The Company has considerable operating leverage to achieve the upper end of its guidance range due to the fixed cost nature of its business and the conversion rate of its incremental revenue.

Free cash flow continues to be a key strength for the Company. Corus delivered fiscal 2014 free cash flow of $175.3 million and, as a result, fiscal 2015 free cash flow guidance will be increased to $180.0 million plus. The revised free cash flow guidance is based on achieving the Company's revised forecasted segment profit guidance of $300.0 million to $320.0 million, the Company's historical working capital run rates and a capital expenditures target of $20.0 million to $25.0 million. The Company will hold its annual Investor Day on November 20, 2014.

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 August 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 11,585 81,266 19,198

Accounts receivable 183,009 164,302 163,345

Promissory note receivable - 47,759 -

Income taxes recoverable 9,768 351 9,542

Prepaid expenses and other 13,032 16,392 12,619


Total current assets 217,394 310,070 204,704
-------------------- ------- ------- -------


Tax credits receivable 29,044 41,564 43,865

Intangibles, investments and other assets 47,630 42,975 42,390

Investment in joint ventures - 125,931 121,704

Property, plant and equipment 143,618 151,192 163,280

Program and film rights 330,437 232,587 229,306

Film investments 63,455 62,274 67,847

Broadcast licenses 979,984 515,036 520,770

Goodwill 934,859 646,045 646,045

Deferred tax assets 38,161 39,463 28,327
------------------- ------ ------ ------

2,784,582 2,167,137 2,068,238
========= ========= =========


LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Accounts payable and accrued liabilities 170,411 164,443 177,367

Income taxes payable - - 1,303

Provisions 5,314 3,941 2,322
---------- ----- ----- -----

Total current liabilities 175,725 168,384 180,992
------------------------- ------- ------- -------


Long-term debt 874,251 538,966 518,258

Other long-term liabilities 171,793 93,241 87,588

Deferred tax liabilities 252,687 145,713 145,310

Total liabilities 1,474,456 946,304 932,148
----------------- --------- ------- -------


SHAREHOLDERS' EQUITY

Share capital 967,330 937,183 910,005

Contributed surplus 8,385 7,221 7,835

Retained earnings 313,361 256,517 198,445

Accumulated other comprehensive income (loss) 3,767 1,653 (812)
-------------------------------------------- ----- ----- ----

Total equity attributable to shareholders 1,292,843 1,202,574 1,115,473

Equity attributable to non-controlling interest 17,283 18,259 20,617
----------------------------------------------- ------ ------ ------

Total shareholders' equity 1,310,126 1,220,833 1,136,090
-------------------------- --------- --------- ---------

2,784,582 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 Year ended

August 31, August 31,

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

Revenues 201,557 181,897 833,016 751,536

Direct cost of sales, general and administrative expenses 143,208 130,966 543,378 500,562

Depreciation and amortization 5,415 6,007 24,068 26,812

Interest expense 12,993 8,936 48,320 44,795

Broadcast license and goodwill impairment - 5,734 83,000 5,734

Debt refinancing - - - 25,033

Business acquisition, integration and restructuring costs 5,576 5,196 46,792 7,343

Gain on acquisition - - (127,884) -

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

Other (income) expense, net (1,476) 7,300 5,740 (3,560)
--------------------------- ------ ----- ----- ------


Income before income taxes 35,841 17,758 209,602 200,211

Income tax expense 10,208 4,417 53,433 34,462


Net income for the period 25,633 13,341 156,169 165,749
========================= ====== ====== ======= =======


Net income attributable to:

Shareholders 23,727 11,879 150,408 159,895

Non-controlling interest 1,906 1,462 5,761 5,854
------------------------ ----- ----- ----- -----

25,633 13,341 156,169 165,749
====== ====== ======= =======


Earnings per share attributable to shareholders:

Basic $0.28 $0.14 $1.77 $1.91

Diluted $0.28 $0.14 $1.76 $1.90
======= ===== ===== ===== =====


Net income for the period 25,633 13,341 156,169 165,749

Other comprehensive income (loss), net of tax:

Items that may be reclassified subsequently to income:

Unrealized foreign currency translation adjustment 100 648 1,720 2,333

Unrealized change in fair value of available-for-sale investments (8) 174 446 132

Unrealized change in fair value of cash flow hedges 57 - (52) -

Actuarial (loss) gain on employee future benefits (2,188) 616 (2,188) 616
------------------------------------------------- ------ --- ------ ---

(2,039) 1,438 (74) 3,081
------ ----- --- -----


Comprehensive income for the period 23,594 14,779 156,095 168,830
=================================== ====== ====== ======= =======


Comprehensive income attributable to:

Shareholders 21,688 13,317 150,334 162,976

Non-controlling interest 1,906 1,462 5,761 5,854
------------------------ ----- ----- ----- -----

23,594 14,779 156,095 168,830
====== ====== ======= =======

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


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

Comprehensive income (loss) - - 150,408 (74) 150,334 5,761 156,095

Actuarial loss transfer - - (2,188) 2,188 - - -

Dividends declared - - (91,376) - (91,376) (6,737) (98,113)

Issuance of shares under stock option plan 5,465 (862) - - 4,603 - 4,603

Issuance of shares under dividend reinvestment plan 24,682 - - - 24,682 - 24,682

Share-based compensation expense - 2,026 - - 2,026 - 2,026

At August 31, 2014 967,330 8,385 313,361 3,767 1,292,843 17,283 1,310,126
================== ======= ===== ======= ===== ========= ====== =========


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

Comprehensive income - - 159,895 3,081 162,976 5,854 168,830

Actuarial gain transfer - - 616 (616) - - -

Dividends declared - - (84,452) - (84,452) (6,331) (90,783)

Issuance of shares under stock option plan 1,155 (2,200) - - (1,045) - (1,045)

Issuance of shares under dividend reinvestment plan 26,731 - - - 26,731 - 26,731

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

Share-based compensation expense - 1,586 - - 1,586 - 1,586

Acquisition of non-controlling interest - - (17,231) - (17,231) (1,881) (19,112)
--------------------------------------- --- --- ------- --- ------- ------ -------

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









CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


Three months ended
August 31, Year ended August 31,

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

OPERATING ACTIVITIES

Net income for the period 25,633 13,341 156,169 165,749

Add (deduct) non-cash items:

Depreciation and amortization 5,415 6,007 24,068 26,812

Broadcast license and goodwill
impairment - 5,734 83,000 5,734

Amortization of program and film
rights 53,871 42,169 207,639 168,883

Amortization of film investments 6,552 8,360 19,808 25,759

Deferred income taxes 1,254 (1,356) 5,638 (11,332)

Increase in purchase price
obligation - - 3,336 -

Investment impairments - 7,121 - 7,121

Share-based compensation expense 537 424 2,026 1,586

Imputed interest 3,713 2,602 14,698 10,279

Tangible benefit obligation - - 31,916 -

Debt refinancing - - - 25,033

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

Gain on acquisition - - (127,884) -

Other 502 (1,769) 2,402 (14,393)

Net change in non-cash
working capital balances
related to operations 19,632 14,091 22,945 6,768

Payment of program and film
rights (121,282) (64,311) (225,935) (159,802)

Net additions to film
investments 7,416 2,869 (25,349) (46,074)
--------------------- ----- ----- ------- -------

Cash provided by operating
activities 3,243 35,282 194,477 156,729
-------------------------- ----- ------ ------- -------


INVESTING ACTIVITIES

Additions to property,
plant and equipment (4,261) (2,712) (11,976) (13,029)

Business combinations (687) - (497,393) -

Dividends from investment
in joint ventures - 1,825 - 10,866

Net cash flows for
intangibles, investments
and other assets (4,098) (1,568) (11,493) (10,855)

Other (5,061) (238) (5,384) (652)

Cash used in investing
activities (14,107) (2,693) (526,246) (13,670)
---------------------- ------- ------ -------- -------


FINANCING ACTIVITIES

Increase (decrease) in bank
loans 142 - 333,243 (29,925)

Issuance of notes - - - 550,000

Redemption of notes - - - (500,000)

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

Issuance of shares under
stock option plan 3,144 - 4,603 884

Shares repurchased - - - (1,464)

Dividends paid (17,158) (15,112) (65,474) (56,696)

Dividends paid to non-
controlling interest (736) (616) (6,737) (6,331)

Other (1,179) (1,138) (2,960) (10,727)

Cash provided by (used in)
financing activities (15,787) (16,866) 262,088 (80,991)
-------------------------- ------- ------- ------- -------

Net change in cash and cash equivalents

during the period (26,651) 15,723 (69,681) 62,068

Cash and cash equivalents,
beginning of the period 38,236 65,543 81,266 19,198
-------------------------- ------ ------ ------ ------

Cash and cash equivalents,
end of the period 11,585 81,266 11,585 81,266
========================== ====== ====== ====== ======

(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 August 31, 2014

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

Revenues 159,809 41,748 - 201,557

Direct cost of sales, general and administrative expenses 102,773 32,246 8,189 143,208
--------------------------------------------------------- ------- ------ ----- -------

Segment profit (loss)(1) 57,036 9,502 (8,189) 58,349

Depreciation and amortization 5,415

Interest expense 12,993

Business acquisition, integration and restructuring costs 5,576

Other income, net (1,476)
----------------- ------

Income before income taxes 35,841
========================== ======


Three months ended August 31, 2013

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

Revenues 137,885 44,012 - 181,897

Direct cost of sales, general and administrative expenses 84,930 32,348 13,688 130,966
--------------------------------------------------------- ------ ------ ------ -------

Segment profit (loss)(1) 52,955 11,664 (13,688) 50,931

Depreciation and amortization 6,007

Interest expense 8,936

Broadcast license and goodwill impairment 5,734

Business acquisition, integration and restructuring costs 5,196

Other expense, net 7,300
------------------ -----

Income before income taxes 17,758
========================== ======


Year ended August 31, 2014

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

Revenues 660,424 172,592 - 833,016

Direct cost of sales, general and administrative expenses 387,151 127,105 29,122 543,378
--------------------------------------------------------- ------- ------- ------ -------

Segment profit (loss)(1) 273,273 45,487 (29,122) 289,638

Depreciation and amortization 24,068

Interest expense 48,320

Broadcast license and goodwill impairment 83,000

Business acquisition, integration and restructuring costs 46,792

Gain on acquisition (127,884)

Other expense, net 5,740
------------------ -----

Income before income taxes 209,602
========================== =======


Year ended August 31, 2013

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

Revenues 567,845 183,691 - 751,536

Direct cost of sales, general and administrative expenses 338,104 128,543 33,915 500,562
--------------------------------------------------------- ------- ------- ------ -------

Segment profit (loss)(1) 229,741 55,148 (33,915) 250,974

Depreciation and amortization 26,812

Interest expense 44,795

Broadcast license and goodwill impairment 5,734

Gain on sale of associated company (55,394)

Debt refinancing 25,033

Business acquisition, integration and restructuring costs 7,343

Other income, net (3,560)
----------------- ------

Income before income taxes 200,211
========================== =======

(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 Year ended

Three months ended

August 31, August 31, August 31, August 31,

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

Advertising 85,063 77,986 404,344 352,461

Subscriber fees 86,075 68,588 335,274 276,211

Merchandising, distribution and other 30,419 35,323 93,398 122,864
------------------------------------- ------ ------ ------ -------

201,557 181,897 833,016 751,536
======= ======= ======= =======

(1) 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.



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


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, except per share information) Three months ended August 31, 2013 Twelve months ended August 31,
2013
---------------------------------- -------------------------------

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


Revenues 193,634 (11,737) 181,897 803,541 (52,005) 751,536

Direct cost of sales, general and administrative 139,189 (8,223) 130,966 533,529 (32,967) 500,562

expenses
--------

Segment profit 54,445 (3,514) 50,931 270,012 (19,038) 250,974
-------------- ------ ------ ------ ------- ------- -------

Depreciation and amortization 6,031 (24) 6,007 26,903 (91) 26,812

Interest expense 10,473 (1,537) 8,936 46,332 (1,537) 44,795

Broadcast license and goodwill impairment 5,734 - 5,734 5,734 - 5,734

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

Business acquisition, integration and restructuring costs 5,196 - 5,196 7,343 - 7,343

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

Other expense (income), net 8,391 (4) 8,387 8,553 (20) 8,533

Income from joint ventures - (1,087) (1,087) - (12,093) (12,093)
-------------------------- --- ------ ------ --- ------- -------

Income before income taxes 18,620 (862) 17,758 205,508 (5,297) 200,211

Income tax expense 5,279 (862) 4,417 39,759 (5,297) 34,462
------------------ ----- ---- ----- ------ ------ ------

Net income for the period 13,341 - 13,341 165,749 - 165,749
========================= ====== === ====== ======= === =======


Net income attributable to:

Shareholders 11,879 - 11,879 159,895 - 159,895

Non-controlling interest 1,462 - 1,462 5,854 - 5,854
------------------------ ----- --- ----- ----- --- -----

13,341 - 13,341 165,749 - 165,749
------ --- ------ ------- --- -------


Earnings per share attributable to shareholders:

Basic $0.14 - $0.14 $1.91 - $1.91

Diluted $0.14 - $0.14 $1.90 - $1.90
======= ===== === ===== ===== === =====



Net income for the period 13,341 - 13,341 165,749 - 165,749


Other comprehensive income (loss), net of tax:

Items that may be reclassified subsequently to income:

Unrealized foreign currency translation adjustment 648 - 648 2,333 - 2,333

Unrealized change in fair value of available-for-sale investments 174 - 174 132 - 132

Actuarial gain on employee future benefits 616 - 616 616 - 616
------------------------------------------ --- --- --- --- --- ---

1,438 - 1,438 3,081 - 3,081
----- --- ----- ----- --- -----

Comprehensive income for the period 14,779 - 14,779 168,830 - 168,830
=================================== ====== === ====== ======= === =======


Comprehensive income attributable to:

Shareholders 13,317 - 13,317 162,976 - 162,976

Non-controlling interest 1,462 - 1,462 5,854 - 5,854
------------------------ ----- --- ----- ----- --- -----

14,779 - 14,779 168,830 - 168,830
====== === ====== ======= === =======









Consolidated Statements of Cash Flows

(in thousands of Canadian dollars) Three months ended August 31, 2013 Twelve months ended August 31,
2013
--------------------------------------------------------------------------------------------------- ---------------------------------- -------------------------------

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

Operating Activities

Net income for the period 13,341 - 13,341 165,749 - 165,749

Add (deduct) non-cash items:

Depreciation and amortization 6,031 (24) 6,007 26,903 (91) 26,812

Broadcast license and goodwill impairment 5,734 - 5,734 5,734 - 5,734

Amortization of program and film rights 48,099 (5,930) 42,169 190,176 (21,293) 168,883

Amortization of film investment 8,360 - 8,360 25,759 - 25,759

Deferred income taxes (1,356) - (1,356) (11,332) - (11,332)

Investment impairments 7,121 - 7,121 7,121 - 7,121

Share-based compensation expense 424 - 424 1,586 - 1,586

Imputed interest 4,137 (1,535) 2,602 11,816 (1,537) 10,279

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

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

Other 818 (2,587) (1,769) 700 (15,093) (14,393)

Net change in non-cash working capital balances related to operations 12,609 1,482 14,091 4,584 2,184 6,768

Payment of program and film rights (79,000) 14,689 (64,311) (185,327) 25,525 (159,802)

Net additions to film investment 2,869 - 2,869 (46,074) - (46,074)
-------------------------------- ----- --- ----- ------- --- -------

Cash provided by operating activities 29,187 6,095 35,282 167,034 (10,305) 156,729
------------------------------------- ------ ----- ------ ------- ------- -------


Investing Activities

Additions to property, plant and equipment (2,715) 3 (2,712) (13,043) 14 (13,029)

Dividends from investments in joint ventures - 1,825 1,825 - 10,866 10,866

Net cash flows for intangibles, investments and other assets (1,568) - (1,568) (10,855) - (10,855)

Other (238) - (238) (652) - (652)
----- ---- --- ---- ---- --- ----

Cash used in investing activities (4,521) 1,828 (2,693) (24,550) 10,880 (13,670)
--------------------------------- ------ ----- ------ ------- ------ -------


Financing Activities

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

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

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

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

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

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

Dividends paid (15,112) - (15,112) (56,696) - (56,696)

Dividends paid to non-controlling interest (616) - (616) (6,331) - (6,331)

Other (1,138) - (1,138) (10,727) - (10,727)
----- ------ --- ------ ------- --- -------

Cash used in financing activities (16,866) - (16,866) (80,991) - (80,991)
--------------------------------- ------- --- ------- ------- --- -------


Net change in cash and cash equivalents during the period 7,800 7,923 15,723 61,493 575 62,068

Cash and cash equivalents, beginning of the period 78,281 (12,738) 65,543 24,588 (5,390) 19,198
-------------------------------------------------- ------ ------- ------ ------ ------ ------

Cash and cash equivalents, end of the period 86,081 (4,815) 81,266 86,081 (4,815) 81,266
============================================ ====== ====== ====== ====== ====== ======
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


-------
Profile: intent