Corus Entertainment Announces Fiscal 2012 Third Quarter Results

• Year-to-date free cash flow⁽¹⁾ up 17%
• Net income attributable to shareholders up 7%
• Basic earnings per share up 6% to $0.52 per share
• Consolidated revenues and segment profit⁽¹⁾ down 4%
• Strong segment profit⁽¹⁾ margins at Television (43%) and Radio (33%)

TORONTO, July 12, 2012 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its third quarter financial results today.

"Despite tough year-over-year comparables, we delivered a solid performance in the quarter, growing net income and earnings per share, maintaining our exceptional margins through rigorous cost controls and continuing to generate impressive free cash flow," said John Cassaday, President and CEO of Corus Entertainment. "Our specialty advertising revenues in the quarter were impacted by soft demand in the Kids segment, which overshadowed the continued strong performance in our Women's vertical and newer services, including ABC Spark. Looking ahead, our exceptional brands, superior programming and disciplined cost controls position us well for a recovery in the advertising market."

Financial Highlights
(unaudited)		Three months ended				Nine months ended
(in thousands of Canadian dollars except per share amounts)		May 31,				May 31,
		2012		2011		2012		2011
Revenues
	Television	154,749		161,043		503,075		476,989
	Radio ^(2)	49,329		50,745		143,577		148,031
		204,078		211,788		646,652		625,020
Segment profit^(1)
	Television	66,732		69,992		207,648		210,184
	Radio ^(2)	16,151		16,000		42,432		44,186
	Corporate	(7,227)		(7,223)		(20,963)		(24,963)
		75,656		78,769		229,117		229,407
Net income attributable to shareholders:
From continuing operations		43,221		40,352		125,340		113,841
From discontinued operations		—		—		—		5,023
		43,221		40,352		125,340		118,864
Basic earnings per share attributable to shareholders:
	From continuing operations	$ 0.52		$ 0.49		$ 1.51		$ 1.39
	From discontinued operations	—		—		—		0.06
		$ 0.52		$ 0.49		$ 1.51		$ 1.45

^(^1)	See definitions and discussion under Key Performance Indicators in MD&A
^(2)	Reflects the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented

Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended May 31, 2012 were $204.1 million, down 4% from $211.8 million last year.  Consolidated segment profit⁽¹⁾ was $75.7 million, down 4% from $78.8 million last year.  Net income attributable to shareholders for the quarter was $43.2 million ($0.52 basic and $0.51 diluted), up 7% compared to $40.4 million ($0.49 basic and diluted) last year.

Consolidated revenues for the nine months ended May 31, 2012 were $646.7 million, up 3% from $625.0 million last year.  Consolidated segment profit⁽¹⁾ was $229.1 million, consistent with $229.4 million last year.  Net income attributable to shareholders for the nine months was $125.3 million ($1.51 basic and $1.50 diluted), up 10% compared to $113.8 million ($1.39 basic and $1.38 diluted) last year.

Operational Results - Highlights

Television

• Segment revenues decreased 4% in Q3 2012, but increased 5% year-to-date
• Segment profit⁽¹⁾ decreased 5% in Q3 2012 and 1% year-to-date
• Specialty advertising revenues decreased 11% in the quarter and 1% year-to-date
• Subscriber revenues decreased 2% in the quarter and 1% year-to-date
• Merchandise, distribution and other revenue increased 8% in the quarter and 39% year-to-date
• Movie Central finished the quarter with 975,000 subscribers

Radio⁽²⁾

• Segment revenues decreased 3% in Q3 2012 and year-to-date
• Segment profit⁽¹⁾ increased 1% in Q3 2012, but decreased 4% year-to-date

^(^1)	See definitions and discussion under Key Performance Indicators in MD&A
^(2)	Radio results reflect the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented

Corus Entertainment Inc. reports in Canadian dollars.

About Corus Entertainment Inc.

Corus Entertainment Inc. is a Canadian-based media and entertainment company.  Corus is a market leader in specialty television and radio with additional assets in pay television, television broadcasting, children's book publishing and children's animation.  The company's multimedia entertainment brands include YTV, Treehouse, Nickelodeon (Canada), ABC Spark, W Network, OWN: Oprah Winfrey Network (Canada), CosmoTV, Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can Press and radio stations including CKNW AM 980, 99.3 The FOX, Country 105, 630 CHED, Q107, and 102.1 the Edge.  Corus creates engaging branded entertainment experiences for its audiences across multiple platforms.  A publicly traded company, Corus is listed on the Toronto Stock Exchange (CJR.B).  Experience Corus on the web at www.corusent.com.

The unaudited consolidated financial statements and accompanying notes for the three and nine months ended May 31, 2012 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 12, 2012 at 2:00 p.m. ET.  While this call is directed at analysts and investors, members of the media are welcome to listen in.  The dial-in number for the conference call for North America is 1.800.734.8583 and for local/international callers is 416.641.6705.  PowerPoint slides for the call will be posted 15 minutes prior the start of the call and can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

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 related 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.

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited)		As at May 31,			As at August 31,				As at September 1,
(in thousands of Canadian dollars)		2012			2011				2010
ASSETS
Current
Cash and cash equivalents		56,636			55,922				7,969
Accounts receivable		182,520			178,531				175,134
Income taxes recoverable		3,036			603				1,781
Prepaid expenses and other		11,490			13,497				18,008
Total current assets		253,682			248,553				202,892
Tax credits receivable		52,215			43,108				39,597
Intangibles, investments and other assets		44,544			39,980				22,699
Property, plant and equipment		166,537			169,600				161,585
Program and film rights		263,068			256,970				244,963
Film investments		76,119			83,133				80,611
Broadcast licenses		569,505			569,505				610,423
Goodwill		674,138			671,827				695,029
Deferred tax asset		27,240			30,915				32,130
		2,127,048			2,113,591				2,089,929
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities		217,947			206,773				192,839
Provisions		3,930			5,267				13,048
Total current liabilities		221,877			212,040				205,887
Long-term debt		527,594			600,796				691,891
Other long-term liabilities		84,374			104,574				95,840
Deferred tax liability		142,869			141,361				146,044
Total liabilities		976,714			1,058,771				1,139,662
SHAREHOLDERS' EQUITY
Share capital		913,467			882,679				856,655
Contributed surplus		7,566			10,299				12,706
Retained earnings		209,156			143,717				62,509
Accumulated other comprehensive income (loss)		642			(1,075)				342
Total equity attributable to shareholders		1,130,831			1,035,620				932,212
Equity attributable to non-controlling interest		19,503			19,200				18,055
Total shareholders' equity		1,150,334			1,054,820				950,267
		2,127,048			2,113,591				2,089,929

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
					Three months ended								Nine months ended
(unaudited)					May 31,								May 31,
(in thousands of Canadian dollars except per share amounts)					2012				2011				2012				2011
Revenues					204,078				211,788				646,652				625,020
Direct cost of sales, general and administrative expenses					128,422				133,019				417,535				395,613
Depreciation					6,339				6,203				19,231				18,364
Interest expense					13,190				14,693				40,027				43,483
Restructuring					2,325				92				2,325				2,342
Other income, net					(3,532)				(969)				(4,702)				(2,211)
Income before income taxes					57,334				58,750				172,236				167,429
Income tax expense					12,387				15,270				41,070				46,632
Net income for the period from continuing operations					44,947				43,480				131,166				120,797
Net income for the period from discontinued operations					—				—				—				5,023
Net income for the period					44,947				43,480				131,166				125,820
Net income attributable to:
	Shareholders from continuing operations				43,221				40,352				125,340				113,841
	Shareholders from discontinued operations				—				—				—				5,023
	Non-controlling interest				1,726				3,128				5,826				6,956
					44,947				43,480				131,166				125,820
Basic earnings per share attributable to shareholders:
	From continuing operations				$ 0.52				$ 0.49				$ 1.51				$ 1.39
	From discontinued operations				—				—				—				0.06
					$ 0.52				$ 0.49				$ 1.51				$ 1.45
Diluted earnings per share attributable to shareholders:
	From continuing operations				$ 0.51				$ 0.49				$ 1.50				$ 1.38
	From discontinued operations				—				—				—				0.06
					$ 0.51				$ 0.49				$ 1.50				$ 1.44
Net income for the period					44,947				43,480				131,166				125,820
Other comprehensive income (loss), net of tax
	Unrealized foreign currency translation adjustment				1,434				4				1,971				(1,857)
	Unrealized change in fair value of available-for-sale investments				(163)				(77)				(254)				(1)
	Actuarial gain on employee future benefits				—				—				—				433
					1,271				(73)				1,717				(1,425)
Comprehensive income for the period					46,218				43,407				132,883				124,395
Comprehensive income attributable to:
	Shareholders				44,492				40,279				127,057				117,439
	Non-controlling interest				1,726				3,128				5,826				6,956
					46,218				43,407				132,883				124,395

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 attributable to shareholders		Non- controlling interest		Total equity
At August 31, 2011		882,679		10,299		143,717		(1,075)		1,035,620		19,200		1,054,820
Comprehensive income		—		—		125,340		1,717		127,057		5,826		132,883
Dividends declared		—		—		(58,123)		—		(58,123)		(5,523)		(63,646)
Issuance of shares under stock option plan		13,669		(3,623)		—		—		10,046		—		10,046
Issuance of shares under dividend reinvestment plan		19,229		—		—		—		19,229		—		19,229
Shares repurchased		(2,110)		—		(1,778)		—		(3,888)		—		(3,888)
Share-based compensation expense		—		890		—		—		890		—		890
At May 31, 2012		913,467		7,566		209,156		642		1,130,831		19,503		1,150,334
(unaudited) (in thousands of Canadian dollars)		Share capital		Contributed surplus		Retained earnings		Accumulated other comprehensive income (loss)		Total attributable to shareholders		Non- controlling interest		Total equity
At September 1, 2010		856,655		12,706		62,509		342		932,212		18,055		950,267
Comprehensive income (loss)		—		—		118,864		(1,425)		117,439		6,956		124,395
Actuarial gain transfer		—		—		433		(433)		—		—		—
Dividends declared		—		—		(46,093)		—		(46,093)		(5,107)		(51,200)
Issuance of shares under stock option plan		12,954		(3,448)		—		—		9,506		—		9,506
Issuance of shares under dividend reinvestment plan		9,449		—		—		—		9,449		—		9,449
Share-based compensation expense		—		822		—		—		822		—		822
Other		—		—		—		—		—		(957)		(957)
At May 31, 2011		879,058		10,080		135,713		(1,516)		1,023,335		18,947		1,042,282

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
				Three months ended				Nine months ended
(unaudited)				May 31,				May 31,
(in thousands of Canadian dollars)				2012		2011		2012			2011
OPERATING ACTIVITIES
Net income for the period				44,947		43,480		131,166			125,820
Deduct earnings from discontinued operations				—		—		—			(5,023)
Add (deduct) non-cash items:
		Depreciation		6,339		6,203		19,231			18,364
		Amortization of program rights		46,317		44,174		139,805			129,563
		Amortization of film investments		4,002		7,501		21,949			26,378
		Deferred income taxes		(51)		2,541		4,735			3,365
		Stock-based compensation expense		298		274		890			822
		Imputed interest		2,894		2,827		8,904			7,911
		Gain on acquisition		(2,383)		—		(2,383)			—
		Other		(2,000)		(809)		(2,790)			(2,403)
Net change in non-cash working capital balances related to operations				11,466		7,700		(9,260)			5,300
Payment of program and film rights				(44,841)		(41,686)		(131,267)			(114,814)
Net additions to film investments				(6,391)		(23,131)		(40,364)			(56,251)
Cash provided by operating activities from continuing operations				60,597		49,074		140,616			139,032
Cash used in operating activities from discontinued operations				—		—		—			(13,262)
Cash provided by operating activities				60,597		49,074		140,616			125,770
INVESTING ACTIVITIES
Additions to property, plant and equipment				(5,501)		(5,387)		(13,585)			(32,602)
Business combination				(4,104)		—		(4,104)			—
Net cash flows for intangibles, investments and other assets				(4,868)		210		(3,859)			(4,057)
Other				(242)		(350)		(560)			(932)
Cash used in investing activities from continuing operations				(14,715)		(5,527)		(22,108)			(37,591)
Cash provided by investing activities from discontinued operations				—		—		—			74,996
Cash provided by (used in) investing activities				(14,715)		(5,527)		(22,108)			37,405
FINANCING ACTIVITIES
Decrease in bank loans				(40,103)		(28,458)		(74,777)			(73,222)
Issuance of shares under stock option plan				1,709		3,622		10,046			9,506
Shares repurchased				—		—		(3,888)			—
Dividends paid				(13,705)		(11,023)		(37,525)			(34,572)
Dividends paid to non-controlling interest				—		(741)		(4,423)			(5,107)
Other				(2,722)		(3,000)		(7,227)			(7,324)
Cash used in financing activities from continuing operations				(54,821)		(39,600)		(117,794)			(110,719)
Net change during the period in cash and cash equivalents from continuing operations				(8,939)		3,947		714			(9,278)
Net change during the period in cash and cash equivalents from discontinued operations				—		—		—			61,734
Net change in cash and cash equivalents during the period				(8,939)		3,947		714			52,456
Cash and cash equivalents, beginning of period				65,575		56,478		55,922			7,969
Cash and cash equivalents, end of period				56,636		60,425		56,636			60,425

CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited)
(in thousands of Canadian dollars)
Three months ended May 31, 2012
			Radio			Television			Corporate			Consolidated
Revenues			49,329			154,749			—			204,078
Direct cost of sales, general and administrative expenses			33,178			88,017			7,227			128,422
Segment profit (loss)^(^1^)			16,151			66,732			(7,227)			75,656
Depreciation			870			816			4,653			6,339
Interest expense			(256)			6,118			7,328			13,190
Restructuring			1,053			1,151			121			2,325
Other expense (income), net			(55)			(866)			(2,611)			(3,532)
Income (loss) before income taxes			14,539			59,513			(16,718)			57,334
Three months ended May 31, 2011
			Radio			Television			Corporate			Consolidated
Revenues			50,745			161,043			—			211,788
Direct cost of sales, general and administrative expenses			34,745			91,051			7,223			133,019
Segment profit (loss)^(1)			16,000			69,992			(7,223)			78,769
Depreciation			817			736			4,650			6,203
Interest expense			(74)			6,182			8,585			14,693
Restructuring			79			6			7			92
Other expense (income), net			(515)			396			(850)			(969)
Income (loss) before income taxes			15,693			62,672			(19,615)			58,750
Nine months ended May 31, 2012
			Radio			Television			Corporate			Consolidated
Revenues			143,577			503,075			—			646,652
Direct cost of sales, general and administrative expenses			101,145			295,427			20,963			417,535
Segment profit (loss)^(1)			42,432			207,648			(20,963)			229,117
Depreciation			2,427			2,168			14,636			19,231
Interest expense			(160)			19,350			20,837			40,027
Restructuring			1,053			1,151			121			2,325
Other expense (income), net			(42)			(1,861)			(2,799)			(4,702)
Income (loss) before income taxes			39,154			186,840			(53,758)			172,236
Nine months ended May 31, 2011
			Radio			Television			Corporate			Consolidated
Revenues			148,031			476,989			—			625,020
Direct cost of sales, general and administrative expenses			103,845			266,805			24,963			395,613
Segment profit (loss)^(1)			44,186			210,184			(24,963)			229,407
Depreciation			2,313			3,255			12,796			18,364
Interest expense			2,398			16,059			25,026			43,483
Restructuring			750			9			1,583			2,342
Other expense (income), net			(1,009)			(1,822)			620			(2,211)
Income (loss) before income taxes			39,734			192,683			(64,988)			167,429

⁽¹⁾See definitions and discussion under Key Performance Indicators in MD&A

Revenues by type
			Three months ended						Nine months ended
			May 31,						May 31,
			2012			2011			2012			2011
Advertising			97,076			104,374			300,395			306,873
Subscriber fees			74,285			76,176			224,350			225,537
Merchandise, distribution and other			32,717			31,238			121,907			92,610
			204,078			211,788			646,652			625,020

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