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.

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited - in thousands of Canadian dollars)	Share capital	Contributed surplus	Retained earnings	Accumulated other comprehensive income (loss)	Total equity attributable to shareholders	Non- controlling interest	Total equity
At August 31, 2013	937,183	7,221	256,517	1,653	1,202,574	18,259	1,220,833
Comprehensive income	—	—	126,682	1,965	128,647	3,855	132,502
Dividends declared	—	—	(68,014)	—	(68,014)	(6,001)	(74,015)
Issuance of shares under stock option plan	1,737	(278)	—	—	1,459	—	1,459
Issuance of shares under dividend reinvestment plan	18,557	—	—	—	18,557	—	18,557
Share-based compensation expense	—	1,489	—	—	1,489	—	1,489
At May 31, 2014	957,477	8,432	315,185	3,618	1,284,712	16,113	1,300,825
At August 31, 2012	910,005	7,835	198,445	(812)	1,115,473	20,617	1,136,090
Comprehensive income	—	—	148,016	1,643	149,659	4,392	154,051
Dividends declared	—	—	(62,914)	—	(62,914)	(5,715)	(68,629)
Issuance of shares under stock option plan	1,155	(2,200)	—	—	(1,045)	—	(1,045)
Issuance of shares under dividend reinvestment plan	20,350	—	—	—	20,350	—	20,350
Shares repurchased	(708)	—	(756)	—	(1,464)	—	(1,464)
Share-based compensation expense	—	1,162	—	—	1,162	—	1,162
Acquisition of non-controlling interest	—	—	(17,231)	—	(17,231)	(1,881)	(19,112)
At May 31, 2013	930,802	6,797	265,560	831	1,203,990	17,413	1,221,403

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three months ended May 31,		Nine months ended May 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 Reported		IFRS 11 Adjustment		Restated		Originally Reported		IFRS 11 Adjustment		Restated
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 Published	IFRS 11 Adjustment	Restated	Originally Published	IFRS 11 Adjustment	Restated
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 Published	IFRS 11 Adjustment	Restated	Originally Published	IFRS 11 Adjustment	Restated
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.

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