Corus Entertainment Announces Fiscal 2013 Fourth Quarter and Year-End Results

• Specialty advertising revenues up 6% in the quarter and 2% for the fiscal year
• Consolidated segment profit down 11% in the quarter and 7% for the fiscal year
• Strong segment profit margins for Television (40%) and Radio (30%) for the fiscal year
• Basic earnings per share attributable to shareholders up 7% for the fiscal year
• Free cash flow of $154 million for the fiscal year

TORONTO, Oct. 24, 2013 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its fourth quarter and year-end financial results today.

"Fiscal 2013 was a challenging year, but we made progress on a number of fronts, creating the foundation for strong growth moving forward," said John Cassaday, President and Chief Executive Officer of Corus Entertainment. "We were pleased to see an increase in specialty advertising revenue across all of our core Television networks, ongoing ratings momentum, and continued gains in our Pay television business. These gains were offset by a decline in the fourth quarter in our Radio division and higher corporate costs. Our outlook for 2014 is positive and the fundamentals are in place for a strong year ahead. The recent reorganization of our leadership team will support our growth objectives and we are excited about the significant value that our pending acquisitions will bring to the business."

Financial Highlights
			Three months ended				Year ended
			August 31,				August 31,
(unaudited - in thousands of Canadian dollars except per share amounts)			2013		2012		2013		2012
Revenues
		Television	149,622		147,874		619,850		650,949
		Radio	44,012		47,750		183,691		191,327
			193,634		195,624		803,541		842,276
Segment profit ^(1)
		Television	56,469		54,490		248,779		262,138
		Radio	11,664		14,995		55,148		57,427
		Corporate	(13,688)		(8,623)		(33,915)		(29,586)
			54,445		60,862		270,012		289,979
Net income attributable to shareholders			11,879		23,341		159,895		148,681
Adjusted net income attributable to shareholders ^(1) ^(2)			25,816		31,519		138,573		158,556
Basic earnings per share			$ 0.14		$ 0.28		$ 1.91		$ 1.79
Adjusted basic earnings per share ^(1) (2)			$ 0.31		$ 0.38		$ 1.65		$ 1.90
Diluted earnings per share			$ 0.14		$ 0.28		$ 1.90		$ 1.78
Free cash flow ^(1)			25,704		24,962		154,136		155,147

^(1)					See definitions and discussion under Key Performance Indicators in MD&A.
^(2)					For the year ended August 31, 2013, excludes the impact of $25.0 million ($0.22 per share) debt refinancing costs, gain on disposition of the Company's non-controlling interest in Food Network Canada of $55.4 million ($0.66 per share), broadcast license impairment of $5.7 million ($0.05 per share), business acquisition, integration and restructuring costs of $7.3 million ($0.06 per share) and investment impairment charges of $7.1 million ($0.07 per share).

Consolidated Results from Operations

Consolidated revenues for the three months ended August 31, 2013 were $193.6 million, down 1% from $195.6 million last year.  Consolidated segment profit was $54.4 million, down 11% from $60.9 million last year as Corporate costs were up $5.1 million due primarily to achievement of performance incentives and higher share-based compensation.  Net income attributable to shareholders for the quarter was $11.9 million ($0.14 per share basic and diluted), down 49% compared to $23.3 million ($0.28 per share basic and diluted) last year.  Net income attributable to shareholders for the fourth quarter includes an impairment charge related to broadcast license impairments of $5.7 million, business acquisition, integration and restructuring costs of $5.2 million and investment impairment charges of $7.1 million.  Removing the impact of these items results in adjusted basic earnings per share attributable to shareholders of $0.31 per share in the quarter.  Net income attributable to shareholders for the fourth quarter of the prior year includes a charge due to an income tax rate change of $6.8 million and business acquisition, integration and restructuring costs of $1.8 million.  Removing the impact of these items results in an adjusted basic earnings per share attributable to shareholders of $0.38 per share in the prior quarter.

Consolidated revenues for the year ended August 31, 2013 were $803.5 million, down 5% from $842.3 million last year.  Consolidated segment profit was $270.0 million, down 7% from $290.0 million last year.  Net income attributable to shareholders for the year was $159.9 million ($1.91 per share basic and $1.90 per share diluted), up 8% compared to $148.7 million ($1.79 per share basic and $1.78 per share diluted) last year.  Net income attributable to shareholders for the current fiscal year includes a charge for debt refinancing of $25.0 million, the gain related to the sale of the Company's non-controlling interest in Food Network Canada of $55.4 million, broadcast license impairments of $5.7 million, business acquisition, integration and restructuring costs of $7.3 million and investment impairment charges of $7.1 million.  Removing the impact of these items results in an adjusted net income attributable to shareholders of $138.6 million ($1.65 basic earnings per share attributable to shareholders) in the current year.  Net income attributable to shareholders for the prior fiscal year includes a charge due to an income tax rate change of $6.8 million and business acquisition, integration and restructuring costs of $4.2 million.  Removing the impact of these items results in an adjusted basic earnings per share attributable to shareholders of $1.90 per share in the prior year.  Free cash flow for the year ended August 31, 2013 was $154.1 million compared to $155.1 million in the prior year.

Operational Results - Highlights

Television

• Segment revenues increased 1% in Q4 and decreased 5% for the fiscal year
• Specialty advertising revenue increased 6% in Q4 and 2% for the fiscal year
• Subscriber revenues increased 1% for Q4 and were flat for the fiscal year
• Merchandising, distribution and other revenues declined 3% in Q4 and 24% for the fiscal year
• Segment profit⁽¹⁾ increased 4% in Q4 and decreased 5% for the fiscal year
• Segment profit margin of 40% for the fiscal year
• Movie Central finished the fiscal year with 996,000 subscribers, up 20,000 from the prior year

Radio

• Segment revenues decreased 8% in Q4 and 4% for the fiscal year
• Segment profit⁽¹⁾ decreased 22% in Q4 and 4% for the fiscal year
• Segment profit margin of 30% for the fiscal year

Other

• Corporate expenses were up $5.1 million in Q4 and $4.3 million for the fiscal year due to higher share-based compensation and achievement of performance incentives.

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

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, children's animation and animation software.  The Company's multimedia entertainment brands include YTV, Treehouse, Nickelodeon (Canada), ABC Spark, W Network, OWN: Oprah Winfrey Network (Canada), Cosmopolitan TV, Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can Press, Toon Boom and 37 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 months and year ended August 31, 2013 and Management's Discussion and Analysis are available on the Company's website at www.corusent.com in the Investor Relations section.

A conference call with Corus senior management is scheduled for October 24, 2013 at 12:30 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 Canada is 1.866.229.4144 and for international callers is 1.847.585.4422.  Please note that the audience passcode for both dial-in numbers is 7565 565.  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.

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
As at August 31,
(unaudited - in thousands of Canadian dollars)			2013				2012
ASSETS
Current
Cash and cash equivalents			86,081				24,588
Accounts receivable			176,504				173,421
Promissory note receivable			47,759				—
Income taxes recoverable			341				9,542
Prepaid expenses and other			16,416				12,664
Total current assets			327,101				220,215
Tax credits receivable			41,564				43,865
Intangibles, investments and other assets			42,975				42,390
Property, plant and equipment			151,398				163,563
Program and film rights			289,181				271,244
Film investments			62,734				67,983
Broadcast licenses			563,771				569,505
Goodwill			674,393				674,393
Deferred tax assets			39,463				28,327
			2,192,580				2,081,485
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities			172,663				185,991
Provisions			3,941				2,322
Total current liabilities			176,604				188,313
Long-term debt			538,966				518,258
Other long-term liabilities			105,020				87,853
Deferred tax liabilities			151,157				150,971
Total liabilities			971,747				945,395
SHAREHOLDERS' EQUITY
Share capital			937,183				910,005
Contributed surplus			7,221				7,835
Retained earnings			256,517				198,445
Accumulated other comprehensive income (loss)			1,653				(812)
Total equity attributable to shareholders			1,202,574				1,115,473
Equity attributable to non-controlling interest			18,259				20,617
Total shareholders' equity			1,220,833				1,136,090
			2,192,580				2,081,485

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
				Three months ended						Year ended
				August 31,						August 31,
(unaudited - in thousands of Canadian dollars except per share amounts)				2013			2012			2013			2012
Revenues				193,634			195,624			803,541			842,276
Direct cost of sales, general and administrative expenses				139,189			134,762			533,529			552,297
Depreciation and amortization				6,031			6,408			26,903			25,639
Interest expense				10,473			12,242			46,332			52,269
Broadcast license and goodwill impairment				5,734			—			5,734			—
Debt refinancing				—			—			25,033			—
Business acquisition, integration and restructuring costs				5,196			1,841			7,343			4,166
Gain on sale of associated company				—			—			(55,394)			—
Other expense (income), net				8,391			(785)			8,553			(5,487)
Income before income taxes				18,620			41,156			205,508			213,392
Income tax expense				5,279			16,171			39,759			57,241
Net income for the period				13,341			24,985			165,749			156,151
Net income attributable to:
Shareholders				11,879			23,341			159,895			148,681
Non-controlling interest				1,462			1,644			5,854			7,470
				13,341			24,985			165,749			156,151
Earnings per share attributable to shareholders:
		Basic		$ 0.14			$ 0.28			$ 1.91			$ 1.79
		Diluted		$ 0.14			$ 0.28			$ 1.90			$ 1.78
Net income for the period				13,341			24,985			165,749			156,151
Other comprehensive income (loss), net of tax
	Items that may be reclassified subsequently to income:
		Unrealized foreign currency translation adjustment		648			(1,485)			2,333			486
		Unrealized change in fair value of available-for-sale investments		174			31			132			(223)
		Actuarial gain (loss) on employee future benefits		616			(2,950)			616			(2,950)
				1,438			(4,404)			3,081			(2,687)
Comprehensive income for the period				14,779			20,581			168,830			153,464
Comprehensive income attributable to:
		Shareholders		13,317			18,937			162,976			145,994
		Non-controlling interest		1,462			1,644			5,854			7,470
				14,779			20,581			168,830			153,464

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, 2012		910,005				7,835				198,445				(812)				1,115,473				20,617				1,136,090
Comprehensive income		—				—				159,895				3,081				162,976				5,854				168,830
Actuarial gain transfer		—				—				616				(616)				—				—				—
Dividends declared		—				—				(84,452)				—				(84,452)				(6,331)				(90,783)
Issuance of shares under stock option plan		1,155				(2,200)				—				—				(1,045)				—				(1,045)
Issuance of shares under dividend reinvestment plan		26,731				—				—				—				26,731				—				26,731
Shares repurchased		(708)				—				(756)				—				(1,464)				—				(1,464)
Share-based compensation expense		—				1,586				—				—				1,586				—				1,586
Acquisition of non-controlling interest		—				—				(17,231)				—				(17,231)				(1,881)				(19,112)
At August 31, 2013		937,183				7,221				256,517				1,653				1,202,574				18,259				1,220,833
At August 31, 2011		882,679				10,299				143,717				(1,075)				1,035,620				19,200				1,054,820
Comprehensive income		—				—				148,681				(2,687)				145,994				7,470				153,464
Actuarial loss transfer		—				—				(2,950)				2,950				—				—				—
Dividends declared		—				—				(78,143)				—				(78,143)				(6,053)				(84,196)
Issuance of shares under stock option plan		13,668				(3,622)				—				—				10,046				—				10,046
Issuance of shares under dividend reinvestment plan		25,982				—				—				—				25,982				—				25,982
Shares repurchased		(12,435)				—				(12,860)				—				(25,295)				—				(25,295)
Share-based compensation expense		—				1,158				—				—				1,158				—				1,158
Repayment of executive stock purchase loans		111				—				—				—				111				—				111
At August 31, 2012		910,005				7,835				198,445				(812)				1,115,473				20,617				1,136,090

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
			Three months ended August 31,						Year ended August 31,
(unaudited - in thousands of Canadian dollars)			2013			2012			2013			2012
OPERATING ACTIVITIES
Net income for the period			13,341			24,985			165,749			156,151
Add (deduct) non-cash items:
	Depreciation and amortization		6,031			6,408			26,903			25,639
	Broadcast license and goodwill impairment		5,734			—			5,734			—
	Amortization of program and film rights		48,099			46,543			190,176			186,348
	Amortization of film investments		8,360			10,052			25,759			32,001
	Deferred income taxes		(1,356)			8,186			(11,332)			12,921
	Investment impairments		7,121			—			7,121			—
	Share-based compensation expense		424			268			1,586			1,158
	Imputed interest		4,137			2,444			11,816			11,348
	Debt refinancing		—			—			25,033			—
	Gain on sale of associated company		—			—			(55,394)			—
	Gain on acquisition		—			—			—			(2,383)
	Other		818			738			700			(2,052)
Net change in non-cash working capital balances related to operations			12,609			(3,939)			4,584			(13,199)
Payment of program and film rights			(79,000)			(65,422)			(185,327)			(196,689)
Net additions to film investments			2,869			(569)			(46,074)			(40,933)
Cash provided by operating activities			29,187			29,694			167,034			170,310
INVESTING ACTIVITIES
Additions to property, plant and equipment			(2,715)			(5,658)			(13,043)			(19,243)
Business combinations			—			—			—			(4,104)
Net cash flows for intangibles, investments and other assets			(1,568)			(7,431)			(10,855)			(11,290)
Other			(238)			(75)			(652)			(635)
Cash used in investing activities			(4,521)			(13,164)			(24,550)			(35,272)
FINANCING ACTIVITIES
Decrease in bank loans			—			(9,973)			(29,925)			(84,750)
Issuance of notes			—			—			550,000			—
Redemption of notes			—			—			(500,000)			—
Financing fees			—			—			(26,732)			—
Issuance of shares under stock option plan			—			—			884			10,046
Shares repurchased			—			(21,407)			(1,464)			(25,295)
Dividends paid			(15,112)			(13,258)			(56,696)			(50,783)
Dividends paid to non-controlling interest			(616)			(1,630)			(6,331)			(6,053)
Other			(1,138)			(2,310)			(10,727)			(9,537)
Cash used in financing activities			(16,866)			(48,578)			(80,991)			(166,372)
Net change in cash and cash equivalents during the period			7,800			(32,048)			61,493			(31,334)
Cash and cash equivalents, beginning of the period			78,281			56,636			24,588			55,922
Cash and cash equivalents, end of the period			86,081			24,588			86,081			24,588

CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited - in thousands of Canadian dollars)
Three months ended August 31, 2013
			Television			Radio			Corporate			Consolidated
Revenues			149,622			44,012			—			193,634
Direct cost of sales, general and administrative expenses			93,153			32,348			13,688			139,189
Segment profit (loss)^(1)			56,469			11,664			(13,688)			54,445
Depreciation and amortization												6,031
Interest expense												10,473
Broadcast license and goodwill impairment												5,734
Business acquisition, integration and restructuring costs												5,196
Other expense (income), net												8,391
Income before income taxes												18,620
Three months ended August 31, 2012
			Television			Radio			Corporate			Consolidated
Revenues			147,874			47,750			—			195,624
Direct cost of sales, general and administrative expenses			93,384			32,755			8,623			134,762
Segment profit (loss)^(1)			54,490			14,995			(8,623)			60,862
Depreciation and amortization												6,408
Interest expense												12,242
Business acquisition, integration and restructuring costs												1,841
Other expense (income), net												(785)
Income before income taxes												41,156
Year ended August 31, 2013
			Television			Radio			Corporate			Consolidated
Revenues			619,850			183,691			—			803,541
Direct cost of sales, general and administrative expenses			371,071			128,543			33,915			533,529
Segment profit (loss)^(1)			248,779			55,148			(33,915)			270,012
Depreciation and amortization												26,903
Interest expense												46,332
Broadcast license and goodwill impairment												5,734
Debt refinancing												25,033
Business acquisition, integration and restructuring costs												7,343
Gain on sale of associated company												(55,394)
Other expense (income), net												8,553
Income before income taxes												205,508
Year ended August 31, 2012
			Television			Radio			Corporate			Consolidated
Revenues			650,949			191,327			—			842,276
Direct cost of sales, general and administrative expenses			388,811			133,900			29,586			552,297
Segment profit (loss)^(1)			262,138			57,427			(29,586)			289,979
Depreciation and amortization												25,639
Interest expense												52,269
Business acquisition, integration and restructuring costs												4,166
Other expense (income), net												(5,487)
Income before income taxes												213,392

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

Revenues by type
		Three months ended						Year ended
		August 31,						August 31,
		2013			2012			2013			2012
Advertising		84,035			85,650			381,475			386,045
Subscriber fees		74,268			73,577			298,971			297,927
Merchandising, distribution and other		35,331			36,397			123,095			158,304
		193,634			195,624			803,541			842,276

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