Corus Entertainment Announces Fiscal 2015 First Quarter Results

• Record high consolidated revenues and segment profit for the quarter
• Annual dividend increased by $0.05 per share
• Television revenues and segment profit up 2% for the quarter
• Net income attributable to shareholders of $51.9 million for the quarter
• Adjusted basic earnings per share of $0.60 per share, down 8% for the quarter

TORONTO, Jan. 13, 2015 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today.

"In the first quarter, the Company's recent acquisitions drove consolidated revenue and segment profit growth in a soft advertising market.  In addition, we continued to deliver strong ratings in Television, particularly on our Women's and Family networks," said John Cassaday, President and Chief Executive Officer of Corus Entertainment. "Looking forward, signs of a recovery in television advertising demand are materializing and we expect this to gain traction as the year progresses.  We are also encouraged by our recent repositioning of key large market Radio stations, which is starting to translate into improved ratings, particularly in Toronto, Vancouver and Calgary. Importantly, we are making good progress on our key strategic priorities, which will further strengthen our business going forward."

Financial Highlights
			Three months ended
			November 30,
(unaudited - in thousands of Canadian dollars except per share amounts)			2014		2013
Revenues
	Television		181,490		177,949
	Radio		45,621		48,056
			227,111		226,005
Segment profit ^(1)
	Television		83,779		82,524
	Radio		12,820		15,837
	Corporate		(3,323)		(6,085)
			93,276		92,276
Net income attributable to shareholders			51,906		150,891
Adjusted net income attributable to shareholders ^(1) (2)			51,906		55,177
Basic earnings per share			$ 0.60		$ 1.78
Adjusted basic earnings per share ^(1) (2)			$ 0.60		$ 0.65
Diluted earnings per share			$ 0.60		$ 1.78
Free cash flow ^(1)			33,382		49,636

^(1)		Adjusted net income attributable to shareholders, adjusted basic earnings per share, segment profit and free cash flow do not have standardized meanings prescribed by IFRS. The Company reports on segment profit 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 2015 Report to Shareholders.
^(2)		For the quarter ended November 30, 2013, 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, business acquisition, integration and restructuring costs of $21.9 million ($0.25 per share), an increase in the purchase price obligation of $7.3 million ($0.09 per share), and investment impairment related charges of $3.3 million ($0.04 per share).

Consolidated Results from Operations

Consolidated revenues for the three months ended November 30, 2014 were $227.1 million, up from $226.0 million last year.  Consolidated segment profit was $93.3 million, up 1% from $92.3 million last year.  Net income attributable to shareholders for the quarter was $51.9 million ($0.60 per share basic and diluted), compared to net income attributable to shareholders of $150.9 million ($1.78 per share basic and diluted) last year.  Net income attributable to shareholders for the prior year quarter includes charges related to a non-cash gain of  $127.9 million ($1.51 per share) 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, business acquisition, integration and restructuring costs of $21.9 million ($0.25 per share), an increase in the purchase price obligation of $7.3 million ($0.09 per share) and investment impairment charges of $3.3 million ($0.04 per share).  Removing the impact of these items results in an adjusted basic earnings per share of $0.65 per share in the prior year.  

Operational Results - Highlights

Television

• Specialty advertising revenues increased 1% in Q1 2015 
• Subscriber revenues increased 8% in Q1 2015
• Merchandising, distribution and other revenues declined 14% in Q1 2015
• Segment profit⁽¹⁾ increased 2% in Q1 2015
• Segment profit margin⁽¹⁾ of 46% in Q1 2015

Radio

• Segment revenues decreased 5% in Q1 2015
• Segment profit⁽¹⁾ decreased 19% in Q1 2015
• Segment profit margin⁽¹⁾ of 28% in Q1 2015

^(1)	Segment profit and segment profit margin do not have standardized meanings prescribed by IFRS.  The Company reports on segment profit and segment profit margin because they are key measures used to evaluate performance.  For definitions and explanations, see discussion under the Key Performance Indicators section of the 2015 Report to Shareholders.

Corus Entertainment Inc. reports in Canadian dollars.

The unaudited consolidated financial statements and accompanying notes for the three month period ended November 30, 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 January 13, 2015 at 8:30 a.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 416.981.9030 and for North America is 1.800.768.2950.  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 attributable to shareholders, segment profit margin, 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, Rock 101, 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 November 30,			As at August 31,
(unaudited - in thousands of Canadian dollars)		2014			2014
ASSETS
Current
Cash and cash equivalents		27,840			11,585
Accounts receivable		216,887			183,009
Income taxes recoverable		—			9,768
Prepaid expenses and other		12,330			13,032
Total current assets		257,057			217,394
Tax credits receivable		30,764			29,044
Intangibles, investments and other assets		60,214			47,630
Property, plant and equipment		141,483			143,618
Program and film rights		348,790			330,437
Film investments		62,794			63,455
Broadcast licenses		979,984			979,984
Goodwill		934,859			934,859
Deferred tax assets		36,534			38,161
		2,852,479			2,784,582
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities		229,543			170,411
Income taxes payable		3,611			—
Provisions		3,644			5,314
Total current liabilities		236,798			175,725
Long-term debt		894,680			874,251
Other long-term liabilities		123,099			171,793
Deferred tax liabilities		253,877			252,687
Total liabilities		1,508,454			1,474,456
SHAREHOLDERS' EQUITY
Share capital		974,526			967,330
Contributed surplus		8,622			8,385
Retained earnings		341,803			313,361
Accumulated other comprehensive income		4,649			3,767
Total equity attributable to shareholders		1,329,600			1,292,843
Equity attributable to non-controlling interest		14,425			17,283
Total shareholders' equity		1,344,025			1,310,126
		2,852,479			2,784,582

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
				Three months ended
				November 30,
(unaudited - in thousands of Canadian dollars except per share amounts)				2014			2013
Revenues				227,111			226,005
Direct cost of sales, general and administrative expenses				133,835			133,729
Depreciation and amortization				5,774			5,735
Interest expense				12,681			9,270
Business acquisition, integration and restructuring costs				—			21,922
Gain on acquisition				—			(127,884)
Other expense, net				1,806			9,711
Income before income taxes				73,015			173,522
Income tax expense				19,833			21,180
Net income for the period				53,182			152,342
Net income attributable to:
Shareholders				51,906			150,891
Non-controlling interest				1,276			1,451
				53,182			152,342
Earnings per share attributable to shareholders:
		Basic		$ 0.60			$ 1.78
		Diluted		$ 0.60			$ 1.78
Net income for the period				53,182			152,342
Other comprehensive income (loss), net of tax:
	Items that may be reclassified subsequently to income:
		Unrealized foreign currency translation adjustment		1,230			375
		Unrealized change in fair value of available-for-sale investments		(310)			74
		Unrealized change in fair value of cash flow hedges		(38)			—
				882			449
Comprehensive income for the period				54,064			152,791
Comprehensive income attributable to:
		Shareholders		52,788			151,340
		Non-controlling interest		1,276			1,451
				54,064			152,791

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		Total equity attributable to shareholders		Non- controlling interest		Total equity
At August 31, 2014		967,330		8,385		313,361		3,767		1,292,843		17,283		1,310,126
Comprehensive income		—		—		51,906		882		52,788		1,276		54,064
Dividends declared		—		—		(23,464)		—		(23,464)		(4,134)		(27,598)
Issuance of shares under stock option plan		1,711		(292)		—		—		1,419		—		1,419
Issuance of shares under dividend reinvestment plan		5,485		—		—		—		5,485		—		5,485
Share-based compensation expense		—		529		—		—		529		—		529
At November 30, 2014		974,526		8,622		341,803		4,649		1,329,600		14,425		1,344,025
At August 31, 2013		937,183		7,221		256,517		1,653		1,202,574		18,259		1,220,833
Comprehensive income		—		—		150,891		449		151,340		1,451		152,791
Dividends declared		—		—		(21,602)		—		(21,602)		(4,068)		(25,670)
Issuance of shares under stock option plan		160		(24)		—		—		136		—		136
Issuance of shares under dividend reinvestment plan		5,860		—		—		—		5,860		—		5,860
Share-based compensation expense		—		457		—		—		457		—		457
At November 30, 2013		943,203		7,654		385,806		2,102		1,338,765		15,642		1,354,407

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
			Three months ended
			November 30,
(unaudited - in thousands of Canadian dollars)			2014		2013
OPERATING ACTIVITIES
Net income for the period			53,182		152,342
Add (deduct) non-cash items:
	Depreciation and amortization		5,774		5,735
	Amortization of program and film rights		54,337		50,531
	Amortization of film investments		6,921		3,912
	Deferred income taxes		2,847		2,455
	Increase in purchase price obligation		—		7,344
	Share-based compensation expense		529		457
	Imputed interest		3,496		3,036
	Tangible benefit obligation		—		20,023
	Gain on acquisition		—		(127,884)
	Other		482		1,255
Net change in non-cash working capital balances related to operations			(26,449)		(22,659)
Payment of program and film rights			(50,417)		(28,091)
Net additions to film investments			(13,815)		(10,066)
Increase in restricted cash			—		(6,407)
Cash provided by operating activities			36,887		51,983
INVESTING ACTIVITIES
Additions to property, plant and equipment			(2,823)		(1,936)
Net cash flows for intangibles, investments and other assets			(15,161)		(1,907)
Other			(511)		(67)
Cash used in investing activities			(18,495)		(3,910)
FINANCING ACTIVITIES
Increase in bank loans			19,791		—
Issuance of shares under stock option plan			1,419		136
Dividends paid			(17,919)		(15,698)
Dividends paid to non-controlling interest			(4,134)		(4,068)
Other			(1,294)		(665)
Cash used in financing activities			(2,137)		(20,295)
Net change in cash and cash equivalents during the period			16,255		27,778
Cash and cash equivalents, beginning of the period			11,585		81,266
Cash and cash equivalents, end of the period			27,840		109,044

CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited - in thousands of Canadian dollars)
Three months ended November 30, 2014
		Television		Radio		Corporate		Consolidated
Revenues		181,490		45,621		—		227,111
Direct cost of sales, general and administrative expenses		97,711		32,801		3,323		133,835
Segment profit (loss)^(1)		83,779		12,820		(3,323)		93,276
Depreciation and amortization								5,774
Interest expense								12,681
Other expense, net								1,806
Income before income taxes								73,015
Three months ended November 30, 2013
		Television		Radio		Corporate		Consolidated
Revenues		177,949		48,056		—		226,005
Direct cost of sales, general and administrative expenses		95,425		32,219		6,085		133,729
Segment profit (loss)^(1)		82,524		15,837		(6,085)		92,276
Depreciation and amortization								5,735
Interest expense								9,270
Gain on acquisition								(127,884)
Business acquisition, integration and restructuring costs								21,922
Other expense, net								9,711
Income before income taxes								173,522

^(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 2015 Report to Shareholders.

Revenues by type
						Three months ended
						November 30,
						2014			2013
Advertising						120,966			123,372
Subscriber fees						85,414			79,115
Merchandising, distribution and other						20,731			23,518
						227,111			226,005

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