Newfoundland Capital Corporation Limited - Fourth Quarter 2009 - Period Ended
December 31, 2009 (unaudited)

DARTMOUTH, NS, March 4 /CNW/ - Newfoundland Capital Corporation Limited (the "Company"), one of Canada's leading radio broadcasters, today announces its financial results for the fourth quarter ended December 31, 2009.

Highlights

    
    - Revenue rebounded from a soft third quarter to grow 4% during the
      fourth quarter to reach $30.5 million. For the year the Company
      maintained a positive growth rate of 2% ending the year at $105.3
      million.
    - Earnings before interest, taxes, depreciation and amortization
      ("EBITDA"(1)) were $9.9 million in the quarter, as compared to
      $0.5 million in 2008, and $23.9 million year-to-date, as compared to
      $9.1 million last year. These results were significantly better than
      the respective prior periods as 2008 included significant realized and
      unrealized losses from the Company's marketable securities aggregating
      $7.1 million in the quarter and $9.4 million for the year.
    - Net income was $5.5 million in the fourth quarter, as compared to a
      loss of $3.8 million in 2008, and $15.4 million for
      the year, as compared to a loss of $4.6 million last year. The 2009
      results were significantly higher than 2008 because of the investment
      losses recorded in the prior periods and also because 2009 results
      included a $5.6 million gain from disposal of a broadcasting licence.
    - A dividend of $0.10 per share was declared in December 2009 and paid
      January 2010.

    Significant events

    - In November, the Company split its Class A Common Shares and Class B
      Common Shares on a three-for-one basis.
    - In December, the Company completed the disposal of its broadcasting
      assets in Thunder Bay, Ontario for proceeds of $4.5 million plus
      working capital.
    - The December 2009 listener ratings results were among the best the
      Company has ever achieved.
    

"We began this year with a lot of uncertainty but we ended it with the best fourth quarter ever from our Radio properties. We achieved our goals and posted positive revenue growth despite the fact the radio industry experienced negative growth for the year", commented Rob Steele, President and Chief Executive Officer. "This year we aggressively paid down our debt, lowering our outstanding balance by $18.6 million. Our listener ratings results in December further strengthened our competitive position in many of our key operating markets laying the foundation for 2010."

    
    Financial Highlights - Fourth Quarter                         (restated)
                                                                         (2)
    (thousands of dollars except share information)          2009      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Revenue                                             $  30,458    29,306
    EBITDA(1)                                               9,861       495
    Net income (loss)                                       5,461    (3,796)
    -------------------------------------------------------------------------
    Earnings per share - basic                               0.17     (0.12)
                       - diluted                             0.16     (0.12)
    Share price, NCC.A (closing)                             7.00      5.67
    Weighted average number of shares outstanding
     (in thousands)                                        32,973    32,973
    -------------------------------------------------------------------------
    Total assets                                          232,853   235,776
    Long-term debt, including current portion              57,100    73,845
    Shareholders' equity                                  103,789    88,643
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to page 8 for the reconciliation of EBITDA to net income
        (loss).
    (2) Restatement due to new accounting policy issued by Canadian Institute
        of Chartered Accountants.
    

Corporate Developments

The following is a review of the key corporate developments which should be considered when reviewing the "Consolidated Financial Review" section.

2009 Developments:

    
    - January 2009 - Launched the new FM station in Pincher Creek, Alberta
      playing country music.
    - January 2009 - Received CRTC approval for four new FM repeater
      licences. These will allow the Company to broadcast the two FM stations
      in Charlottetown, Prince Edward Island to two new communities in the
      same province. These are expected to be on-air in the first quarter of
      2010.
    - April 2009 - CRTC approved two AM to FM conversions for stations in
      St. Paul and High Prairie, Alberta. These are expected to be launched
      sometime in summer 2010.
    - June 2009 - CRTC approved the Company's applications to convert AM
      stations to FM in Wabush and Goose Bay, Newfoundland and Labrador.
      Anticipated on-air dates are late spring 2010.
    - June 2009 - Re-launched CFUL in Calgary, Alberta as a Contemporary Hits
      Radio format, branded as AMP Radio. This format is similar to the very
      popular Ottawa station, Hot 89.9, which was named the 2008 Contemporary
      Hits Radio station of the year.
    - July 2009 - Completed the previously announced exchange of assets with
      Rogers Broadcasting Limited. The Company's Halifax AM licence was
      exchanged for Rogers' AM licence in Sudbury, Ontario plus $5.0 million.
    - August 2009 - Launched Hot 93.5, the newly acquired Sudbury, Ontario
      radio station which was converted to FM. Its format is Top 40 and has
      been met with a very positive response from both listeners and clients.
    - August 2009 - Launched the converted FM radio station in Athabasca,
      Alberta. 94.1 FM The River plays Classic Hits.
    - November 2009 - The Company's stock was split on a three-for-one basis.
    - December 2009 - Completed the previously announced sale of the
      broadcasting assets related to the two FM stations in Thunder Bay,
      Ontario for $4.5 million plus working capital.

    2008 Developments:

    - January 2008 - Launched the FM station in Carbonear, Newfoundland and
      Labrador playing country music.
    - March 2008 - Re-launched two stations in Alberta; CIQX-FM in Calgary as
      XL103-FM, and CKRA-FM in Edmonton as Capital-FM. Both stations featured
      prominently in the December 2009 ratings results.
    - June 2008 - Launched new FM stations in Fort McMurray, Alberta, and in
      Kentville and Sydney, Nova Scotia. All three stations have exceeded
      management's expectations.
    - July 2008 - Completed the purchase of the remaining 50% interest in
      Metro Radio Group Inc. for $8.5 million. Metro Radio Group Inc.
      operates CKUL-FM in Halifax, Nova Scotia.
    

Consolidated Financial Review

Revenue

Consolidated revenue of $30.5 million in the fourth quarter improved by 4% or $1.2 million and for the year ended December 31, 2009, consolidated revenue of $105.3 million was 2% or $1.9 million higher than 2008. This improvement came exclusively from the broadcasting segment.

Other income (expense)

Other expense was $0.3 million in the quarter, $6.5 million better than the same period last year while year-to-date other income of $2.8 million was $11.3 million higher than the prior year. In 2008, stock prices in the general Canadian trading market experienced declines. This resulted in the recognition of significant unrealized losses last year - $4.6 million in the fourth quarter and $7.9 million year-to-date. Realized losses on the divestiture of marketable securities in 2008 were $2.5 million in the quarter and $1.5 million for the year.

Operating expenses

Consolidated operating expenses for the fourth quarter were $20.3 million, 8% or $1.7 million lower than 2008 while for the twelve months ended December 31, 2009, they were $84.2 million, 2% or $1.5 million lower than 2008. CRTC Part II Licence fees that had been accrued since September 2006 were reversed in the fourth quarter as a result of a court decision more fully explained under the "Financial Results by Segment" section.

    
    Earnings before interest, taxes, depreciation and amortization
    ("EBITDA" (1))
    

Fourth quarter consolidated EBITDA was $9.9 million and $23.9 million year-to-date. These consolidated EBITDA results were significantly higher than their respective comparative periods largely due to the aforementioned unrealized investment losses recognized in 2008. The CRTC Part II fees' reversal and higher revenue resulted in improved EBITDA in 2009.

More detailed disclosure on revenue, other income (expense), operating expenses and EBITDA are described in the section entitled "Financial Results by Segment".

Depreciation and amortization

Depreciation and amortization expense was $1.0 million in the quarter, slightly lower than 2008, while year-to-date depreciation and amortization of $3.8 million was 7% higher than last year. These variations were not significant overall but varied depending on the asset base and timing of capital expenditures.

Interest expense

Interest expense in the quarter was $1.5 million and year-to-date interest was $4.4 million; both $0.4 million higher than the same periods last year. In the fourth quarter, the Company de-designated a portion of one of its interest rate swaps which resulted in the recognition of interest expense of almost $0.6 million. Excluding the de-designation adjustment, interest expense would have been lower than 2008 due to lower average debt levels throughout 2009.

Accretion of other liabilities

Accretion of other liabilities arises from discounting Canadian Content Development ("CCD") commitments to reflect the fair value of the obligations. The expense in the quarter of $0.2 million and $0.9 million year-to-date was $0.1 million and $0.2 million lower than the respective periods last year as a result of the expense being higher in the initial years of payment.

Goodwill impairment loss

As a result of conducting the 2008 annual goodwill impairment analysis, the value for goodwill that arose on the 2005 and 2006 business acquisitions in Winnipeg, Manitoba could not be supported and therefore, a goodwill impairment loss of $1.3 million was recorded in 2008. No impairment loss was recorded in 2009.

Gain on disposal of broadcasting licence

In July 2009, upon the completion of the radio asset exchange with Rogers, the Company disposed of its AM licence in Halifax, Nova Scotia and recorded a gain of $5.6 million.

Provision for Income Taxes

The provision for income taxes is higher than 2008 due to improved pre-tax earnings. The effective income tax rate was 27% which is lower than the statutory rate of 35% primarily due to the non-taxable portion of realized and unrealized capital gains and losses as well as a lower statutory rate for the Company's wholly-owned subsidiaries.

Discontinued operations

The Company disposed of its net assets associated with the two FM radio stations located in Thunder Bay, Ontario and therefore, the financial results of operations from this component were treated as discontinued operations in the consolidated statements of income. Comparative figures were restated to exclude the results of these discontinued operations from the Broadcasting segment.

Net income (loss)

Fourth quarter net income of $5.5 million, as compared to a loss of $3.8 million in 2008, and net income of $15.4 million for the year, as compared to a loss of $4.6 million last year, were significantly higher than the same periods last year. The primary reasons for these positive variances were the unrealized investment losses and the goodwill impairment loss recorded in 2008 while in 2009 the gain on disposal of a broadcasting licence was recognized.

Other comprehensive income ("OCI")

OCI consists of the net change in the fair value of the Company's cash flow hedges. These include interest rate swaps and an equity total return swap. The after-tax unrealized income recorded in OCI for the interest rate swaps was $0.8 million in the fourth quarter and $2.8 million year-to-date (2008 - $3.6 million after-tax expense in the quarter and $4.6 million after-tax expense year-to-date). The after-tax unrealized loss related to the equity total return swap was $0.3 million for the quarter (2008 - $0.1 million). Year-to-date, the unrealized after-tax gain was $0.1 million (2008 - $0.3 million after-tax loss).

    
    Financial Results by Segment
    (thousands of dollars, except percentages)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                   Three months ended Dec. 31         Year ended Dec. 31
                     2009      2008    Growth      2009      2008    Growth
                            (restated)                    (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Revenue
      Broad-
       casting   $ 29,670    28,396         4%  101,763    99,811         2%
      Corporate
       and Other      788       910       (13%)   3,535     3,571        (1%)
    -------------------------------------------------------------------------
    Consolidated
     revenue       30,458    29,306         4%  105,298   103,382         2%
    -------------------------------------------------------------------------
    Other income
     (expense)
      Corporate
       and Other     (273)   (6,749)       96%    2,809    (8,516)      133%
    -------------------------------------------------------------------------
    Consolidated
     revenue and
     other income
     (expense)     30,185    22,557        34%  108,107    94,866        14%
    -------------------------------------------------------------------------
    Operating
     expenses
      Broad-
       casting     17,756    19,501        (9%)  73,951    74,909        (1%)
      Corporate
       and Other    2,568     2,561         -    10,296    10,856        (5%)
    -------------------------------------------------------------------------
    Consolidated
     operating
     expenses      20,324    22,062        (8%)  84,247    85,765        (2%)
    -------------------------------------------------------------------------
    EBITDA
      Broad-
       casting     11,914     8,895        34%   27,812    24,902        12%
      Corporate
       and Other   (2,053)   (8,400)       76%   (3,952)  (15,801)       75%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consolidated
     EBITDA       $ 9,861       495         -    23,860     9,101       162%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    EBITDA Margins   2009      2008    Growth      2009      2008    Growth
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Broadcasting       40%       31%        9%       27%       25%        2%
    Consolidated       33%        2%       31%       22%       10%       12%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Broadcasting segment

Broadcasting revenue in the quarter of $29.7 million was $1.3 million or 4% better than last year while for the year broadcasting revenue of $101.8 million was $2.0 million or 2% ahead of last year. Organic (same-station) operations accounted for primarily all of the revenue growth in the quarter and for the year.

The Atlantic Canada radio properties led the way in revenue growth for the Company. A softening in revenue impacted the stations in Central Canada and in Alberta throughout 2009; however, the Central Canadian properties rebounded with 4% organic growth in the fourth quarter which is encouraging going into 2010. Although the Central and Alberta properties experienced a decline in year-over-year revenue, they outperformed the industry in their respective markets.

Overall, the industry's average growth rate in 2009 was negative 9%; the Company posted positive growth of 2% year-over-year. Revenue bookings in 2010 have been very strong to-date. Management anticipates that it will be able to continue generating positive growth in 2010.

Broadcasting operating expenses for the quarter were $17.8 million, 9% or $1.7 million lower than 2008 while year-to-date operating expenses of $74.0 million were also lower than last year by 1% or $1.0 million.

The Company restated certain comparative figures as a result of adopting a new accounting policy on how to account for pre-operating costs. In the past, these types of costs were capitalized and amortized over a period of five to seven years. Now, these costs are expensed as incurred. The impact of the restatement was to increase the 2008 operating expenses by $1.0 million year-to-date; the fourth quarter impact was nominal. Similar costs were not as significant in 2009 as the Company launched fewer new stations.

Over the past number years the Canadian Association of Broadcasters (on behalf of all radio broadcasters) has been disputing the amount of Part II fees charged by the Canadian Radio-television Telecommunications Commission ("CRTC"). This has led to court filings, appeals and a final settlement in 2009. During 2007, 2008 and 2009 the Company was required to record a provision based on the court decisions at each stage of the dispute. As a result the amount expensed for CRTC Part II fees has changed significantly over the past three years and is summarized as follows:

    
    - 2007 operating expenses were reduced by $0.6 million;

    - 2008 operating expenses were increased by $1.3 million; and

    - 2009 operating expenses were reduced by $2.0 million.
    

Excluding the impact of CRTC Part II fees, prior period restatements and other one-time expenditures, operating expenses in the quarter and year-to-date would have been less than 1% higher than last year. The small increases in the 2009 operating expenses were primarily because of higher variable costs due to higher revenue.

Fourth quarter broadcasting EBITDA of $11.9 million was 34% or $3.0 million higher than 2008. Year-to-date EBITDA of $27.8 million was 12% or $2.9 million better than last year.

Excluding the impact of CRTC Part II fees and the prior year restatements explained above, EBITDA in the quarter would have been $10.1 million and $28.0 million year-to-date. This represents a $1.2 million or 14% increase over the fourth quarter last year and a $0.8 million or 3% increase on a year-to-date basis. The improved EBITDA is attributable to revenue growth in the quarter and in the year.

Corporate and Other segment

Corporate and other revenue decreased by $0.1 million or 13% in the fourth quarter and by less than $0.1 million or 1% year-to-date; this was due to decreased hotel revenue.

Other income (expense) relates to investment income and consists of realized and unrealized gains and losses related to the Company's investment portfolio of marketable securities, interest, dividends and distributions from investments. In 2008, stock prices in the Canadian trading market experienced significant declines. As a result, the value of the Company's marketable securities decreased significantly and unrealized losses of $4.6 million were recognized in the fourth quarter and $7.9 million year-to-date in 2008. Realized losses due to the divestiture of marketable securities totaled $2.5 million in the quarter and $1.5 million for the year in 2008.

During 2009, the Company's marketable securities partially recovered in value. This resulted in unrealized gains of $2.8 million for the year. The Company also disposed of certain of the investments it held in its portfolio of marketable securities. As a result of the disposals, the Company triggered losses of $5.1 million in the quarter and $5.3 million year-to-date which were previously recognized in the Company's results in 2008.

Operating expenses of $2.6 million were just slightly higher than the fourth quarter last year; however, year-to-date operating expenses of $10.3 million were 5% or $0.6 million lower than 2008. This decrease was a result of a targeted plan to reduce discretionary costs throughout the year.

Fourth quarter and year-to-date EBITDA were much higher than the same periods last year primarily due to the declines in value of the Company's portfolio of marketable securities in 2008.

Liquidity and capital resources

Selected cash flow information - three months ended December 31, 2009

Cash from operating activities of $7.1 million along with proceeds from the disposal of broadcasting assets of $4.8 million were used to repay $9.8 million of bank debt and to pay $1.8 million in CCD payments.

Selected cash flow information - year ended December 31, 2009

Cash flows from operating activities of $18.3 million along with the proceeds of $9.8 million on the disposal of broadcasting assets were used to repay debt by $18.6 million, to pay CCD commitments of $5.0 million and to purchase property and equipment totaling $4.0 million.

The most significant expenditures in capital assets for the year were due to the FM station launched in Sudbury, Ontario and for the relocation to new premises in Halifax, Nova Scotia.

Credit facility and future financing

The Company's syndicated credit facility of $76.5 million is a revolving credit facility. The Company chooses this type of credit facility because it provides flexibility with no scheduled repayment terms.

The Company is subject to covenants on its credit facility. The Company's bank covenants include certain maximum or minimum ratios such as total debt to EBITDA ratio, interest coverage and fixed charge coverage ratio. Other covenants include dividend payment restrictions, seeking prior approval for capital expenditures over a certain dollar limit, acquisitions in excess of a quantitative threshold and limits on the number of shares that can be repurchased in any given year. The Company was in compliance with the covenants throughout the year and at year end and continues to have access to the available funds under the existing credit facilities.

The Company's revolving credit facility expires in June 2010, and as a result, this debt has been classified as a current liability as at December 31, 2009. Management has held preliminary discussions with its lenders and has developed a timeline for the renegotiation of its credit facilities to ensure the new facilities are in place prior to the expiry of its current credit facilities. As a result, repayment of the debt is not expected and the Company does not deem its liquidity risk to be higher than in previous years. Management did not renew the credit facility early to delay the increased interest costs which will begin once the facility is renewed. The Company has saved significant funds by not renewing before year end.

Outlook

The Company's operations continued to post positive revenue growth throughout 2009 despite the negative growth experienced by the industry. Early indications in 2010 show the Company continuing with positive revenue growth in the first quarter of 2010.

The Company's reduction of bank debt in 2009 was one of management's critical goals and this improvement in the balance sheet positions the Company positively for future growth.

During 2010, the Company will continue to focus on organic growth while also concentrating on its expansionary activities which include:

    
    - Launching the repeater signals in Prince Edward Island which will
      expand the audience base;
    - Converting from AM to FM the stations in St. Paul and High Prairie,
      Alberta; and
    - Completing the AM to FM conversions in Wabush and Goose Bay,
      Newfoundland and Labrador.
    

The Company actively reviews new business and licence opportunities that would allow it to expand its asset base. The Company continuously applies to the CRTC for new licences and for AM to FM conversions.

Non-GAAP Measure

    
    (1) EBITDA is defined as net income (loss) from continuing operations
        excluding depreciation and amortization expense, interest expense,
        accretion of other liabilities, goodwill impairment loss, gain on
        disposal of broadcasting licence and provision for income taxes. A
        calculation of this measure is as follows:

                                     Three months ended         Year ended
                                          December 31          December 31
                                         2009      2008      2009      2008
    (thousands of dollars)                    (restated)          (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income (loss) from
     continuing operations           $  5,124    (3,877)   14,934    (4,753)
    Provision for income taxes          1,996     1,930     5,506     3,930
    Gain on disposal of broadcasting
     licence                                -         -    (5,616)        -
    Goodwill impairment loss                -         -         -     1,334
    Accretion of other liabilities        202       274       867     1,022
    Interest expense                    1,520     1,098     4,374     4,019
    Depreciation and amortization
     expense                            1,019     1,070     3,795     3,549
                                    -----------------------------------------
    EBITDA                           $  9,861       495    23,860     9,101
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

This measure is not defined by Generally Accepted Accounting Principles and is not standardized for public issuers. This measure may not be comparable to similar measures presented by other public enterprises. The Company has included this measure because the Company's key decision makers believe certain investors use it as a measure of the Company's financial performance and for valuation purposes. The Company also uses this measure internally to evaluate the performance of management.

    
    Consolidated Balance Sheets
    (unaudited)

                                                                  (restated)
    (thousands of dollars)                                   2009      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    ASSETS

    Current assets
      Marketable securities                             $   4,923     4,196
      Receivables                                          23,831    24,054
      Prepaid expenses                                        778       974
      Other assets                                          1,810         -
      Future income tax assets                              1,173     4,156
                                                      -----------------------
        Total current assets                               32,515    33,380
    Property and equipment                                 37,248    37,342
    Other assets                                            4,216     4,167
    Broadcast licences                                    149,641   151,773
    Goodwill                                                7,045     7,045
    Future income tax assets                                2,188     2,069
                                                      -----------------------
                                                        $ 232,853   235,776
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
      Bank indebtedness                                 $      99     2,003
      Accounts payable and accrued liabilities             17,118    17,446
      Dividends payable                                     3,297         -
      Income taxes payable                                  6,836     8,719
      Current portion of long-term debt*                 57,100         5
                                                      -----------------------
        Total current liabilities                          84,450    28,173
    Long-term debt*                                           -    73,840
    Other liabilities                                      18,946    23,953
    Future income tax liabilities                          25,668    21,167
    Shareholders' equity                                  103,789    88,643
                                                      -----------------------
                                                        $ 232,853   235,776
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    * Please refer to the previous discussion under the heading "Credit
        facility and future financing"


    Consolidated Statements of Income (Loss)
    (unaudited)

                                     Three months ended         Year ended
                                          December 31          December 31
                                              (restated)          (restated)
    (thousands of dollars except
     per share data)                     2009      2008      2009      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Revenue                          $ 30,458    29,306   105,298   103,382
    Other income (expense)               (273)   (6,749)    2,809    (8,516)
                                    -----------------------------------------
                                       30,185    22,557   108,107    94,866
    Operating expenses                 20,324    22,062    84,247    85,765
    Depreciation                        1,007     1,058     3,746     3,501
    Amortization of deferred charges       12        12        49        48
                                    -----------------------------------------
    Operating income (loss)             8,842      (575)   20,065     5,552
    Interest expense                    1,520     1,098     4,374     4,019
    Accretion of other liabilities        202       274       867     1,022
    Goodwill impairment loss                -         -         -     1,334
                                    -----------------------------------------
                                        7,120    (1,947)   14,824      (823)
    Gain on disposal of
     broadcasting licence                   -         -     5,616         -
                                    -----------------------------------------
    Earnings (loss) from continuing
     operations before income taxes     7,120    (1,947)   20,440      (823)
    Provision for income taxes          1,996     1,930     5,506     3,930
                                    -----------------------------------------
    Net income (loss) from
     continuing operations              5,124    (3,877)   14,934    (4,753)
    Net income from discontinued
     operations                           337        81       432       108
                                    -----------------------------------------
    Net income (loss)                $  5,461    (3,796)   15,366    (4,645)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings per share from
     continuing operations
        - basic                      $   0.16     (0.12)     0.45     (0.14)
        - diluted                        0.15     (0.12)     0.44     (0.14)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings per share
        - basic                      $   0.17     (0.12)     0.47     (0.14)
        - diluted                        0.16     (0.12)     0.45     (0.14)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


     Consolidated Statements of Shareholders' Equity
     (unaudited)

                                                               Year ended
                                                              December 31
                                                             2009      2008
    (thousands of dollars)                                        (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Retained earnings, beginning of year, as restated   $  48,547    59,621
    Retrospective application of change in accounting
     policy                                                     -    (1,758)
                                                      -----------------------
    Retained earnings, beginning of year, as restated      48,547    57,863
    Net income (loss)                                      15,366    (4,645)
    Dividends declared                                     (3,297)   (3,298)
    Repurchase of capital stock                                 -    (1,373)
                                                      -----------------------
    Retained earnings, end of year                         60,616    48,547
    Capital stock                                          42,913    42,913
    Contributed surplus                                     2,157     1,945
    Accumulated other comprehensive loss                   (1,897)   (4,762)
                                                      -----------------------
    Total shareholders' equity                          $ 103,789    88,643
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Comprehensive Income (Loss)
    (unaudited)

                                     Three months ended         Year ended
                                          December 31          December 31
                                         2009      2008      2009      2008
    (thousands of dollars)                    (restated)          (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss)                $  5,461    (3,796)   15,366    (4,645)
                                    -----------------------------------------
    Other comprehensive
     income (loss):
    Change in fair values of cash
     flow hedges
      Interest rate swaps:
        Increase (decrease) in
         fair value                       384    (5,158)    2,947    (6,715)
        Reclassification to net
         income of realized
         interest expense                 590       156       757       253
        Credit risk adjustment             95         -        95         -
        Income tax (expense)
         recovery                        (290)    1,414    (1,014)    1,815
                                    -----------------------------------------
                                          779    (3,588)    2,785    (4,647)
                                    -----------------------------------------
    Total equity return swap:
        Increase (decrease) in
         fair value                      (372)     (829)    1,700    (1,275)
        Reclassification to net
         income of realized
         (gains) losses                   (89)      740    (1,613)      817
        Income tax recovery (expense)     152         9        (7)      135
                                    -----------------------------------------
                                         (309)      (80)       80      (323)
                                    -----------------------------------------

    Other comprehensive income (loss)     470    (3,668)    2,865    (4,970)
                                    -----------------------------------------
    Comprehensive income (loss)      $  5,931    (7,464)   18,231    (9,615)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Accumulated Other Comprehensive Loss
    (unaudited)
                                                               Year ended
                                                              December 31
    (thousands of dollars)                                   2009      2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other comprehensive (loss) income,
     beginning of year                                  $  (4,762)      208
    Other comprehensive income (loss) for the year          2,865    (4,970)
                                                      -----------------------

    Accumulated other comprehensive loss, end of year   $  (1,897)   (4,762)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows
    (unaudited)

                                     Three months ended         Year ended
                                          December 31          December 31
                                         2009      2008      2009      2008
    (thousands of dollars)                    (restated)          (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Operating Activities
    Net income (loss) from
     continuing operations           $  5,124    (3,877)   14,934    (4,753)
    Items not involving cash
      Depreciation and amortization     1,019     1,070     3,795     3,549
      Future income taxes               2,605         6     6,188     2,498
      Gain on disposal of
       broadcasting licence                 -         -    (5,616)        -
      Executive stock-based
       compensation plans                 200      (613)    1,688      (523)
      Accretion of other liabilities      202       274       867     1,022
      Unrealized losses (gains) on
       marketable securities            1,530     4,649    (1,754)    7,906
      Goodwill impairment loss              -         -         -     1,334
      Other                              (134)      817    (1,497)      676
                                    -----------------------------------------
                                       10,546     2,326    18,605    11,709
    Change in non-cash working
     capital relating to operating
     activities from continuing
     operations                        (3,607)    3,983      (646)    1,869
                                    -----------------------------------------
    Cash flow from continuing
     operating activities               6,939     6,309    17,959    13,578
    Cash flow from discontinued
     operations                           209        93       383       207
                                    -----------------------------------------
                                        7,148     6,402    18,342    13,785
    -------------------------------------------------------------------------
    Financing Activities
    Change in bank indebtedness        (1,107)   (2,039)   (1,904)      886
    Long-term debt borrowings               -     1,500         -    12,840
    Long-term debt repayments          (8,740)       (6)  (16,745)      (23)
    Repurchase of capital stock             -         -         -    (1,805)
    Dividends paid                          -    (3,298)        -    (4,962)
                                    -----------------------------------------
                                       (9,847)   (3,843)  (18,649)    6,936
    -------------------------------------------------------------------------
    Investing Activities
    Property and equipment additions     (228)     (620)   (3,961)   (5,591)
    Proceeds from disposal of
     broadcasting assets                4,753         -     9,753         -
    Acquisition of businesses
     and licences                           -         -         -    (8,500)
    Canadian Content Development
     commitment payments               (1,837)   (2,158)   (4,973)   (3,944)
    Other                                  11       219      (512)   (2,686)
                                    -----------------------------------------
                                        2,699    (2,559)      307   (20,721)
    -------------------------------------------------------------------------
    Cash, beginning and end of
     period                          $      -         -         -         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

The Company's Annual Report, which includes the annual audited consolidated financial statements along with related notes and the annual Management's Discussion and Analysis, will be available on www.sedar.com and the Company's website by March 31, 2010.

About Newfoundland Capital Corporation Limited

Newfoundland Capital Corporation Limited (TSX: NCC.A, NCC.B) is one of Canada's leading radio broadcasters with 79 licences across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking.

This press release contains forward-looking statements. By their very nature, these statements involve inherent risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from those expressed in such forward-looking statements. Readers are cautioned not to place undue reliance on these statements. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

%SEDAR: 00002995E

SOURCE Newfoundland Capital Corporation Limited

For further information: For further information: REF: Robert G. Steele, President and Chief Executive Officer; Scott G.M. Weatherby, Chief Financial Officer and Corporate Secretary, Newfoundland Capital Corporation Limited, 745 Windmill Road, Dartmouth, Nova Scotia B3B 1C2, Tel: (902) 468-7557, Fax: (902) 468-7558, e-mail: investorrelations@ncc.ca, Web: www.ncc.ca


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