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Corus Entertainment Announces Fiscal 2013 Second Quarter Results



       Corus Entertainment Announces Fiscal 2013 Second Quarter Results

PR Newswire

TORONTO, April 11, 2013

  * Adjusted net income attributable to shareholders of $24.4 million for the
    second quarter and $76.6 million year-to-date
  * Free cash flow up 12% year-to-date
  * Consolidated segment profit margins of 30% for the second quarter and 36%
    year-to-date
  * Movie Central finished the quarter above 1 million subscribers

TORONTO, April 11, 2013 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B)
announced its second quarter and six months year-to-date financial results
today.

"The second quarter business results were soft, as expected, but we were  able 
to end the first half of  the year with significant increases in  year-to-date 
free cash flow and improved margins," said John Cassaday, President and  Chief 
Executive Officer of Corus Entertainment.   "The highlight of the quarter  was 
the successful refinancing  of our  Senior Unsecured  Guaranteed Notes,  which 
resulted in a 300 basis point reduction in our financing costs.  This activity
was followed up  by a  series of  significant transactions  subsequent to  the 
quarter, certain of which are subject  to CRTC approval, which will enable  us 
to expand our presence in Radio, consolidate our position in TELETOON and  ABC 
Spark, enter the  Quebec specialty television  market and realize  substantial 
gains on the sale of our minority interest in the Food Network (Canada) and on
the revaluation of TELETOON."

Financial Highlights

                               Three months ended          Six months ended
                              February    February        February    February
                              28,              29,             28,         29,
(unaudited - in thousands                               
of Canadian dollars
except per share amounts)
                                  2013       2012            2013        2012 
Revenues                                                                      
        Television             143,423     163,299         317,246     348,326
        Radio                   40,277      42,384          92,601      94,248
                               183,700     205,683         409,847     442,574
                                                                              
Segment profit ^(1)                                                           
        Television              51,796      60,421         130,494     140,916
        Radio                    9,654       9,879          28,610      26,281
        Corporate               (6,802)    (8,053)        (11,763)    (13,736)
                                54,648      62,247         147,341     153,461
                                                                              
Net income attributable                                             
to shareholders                  5,944      31,571          58,103      82,119
Adjusted net income                                                 
attributable to
shareholders ^(1) ^(2)  
                                24,432      31,571          76,591      82,119
                                                                              
                                                                              
Basic earnings per share                                            
                                 $ 0.07     $ 0.38          $ 0.70      $ 0.99
Adjusted basic earnings                                             
per share ^(1) (2)               $ 0.29     $ 0.38          $ 0.92      $ 0.99
Diluted earnings per                                                
share                            $ 0.07     $ 0.38          $ 0.69      $ 0.99
                                                                      
Free cash flow ^(1)              45,974     50,772          83,859      74,831
^(1) See definitions and discussion under Key Performance Indicators in MD&A
^(2) Excludes the impact of debt refinancing costs of $25.0 million ($0.22 per
share)

Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended February 28, 2013 were $183.7
million, down 11% from $205.7 million last year.  Consolidated segment  profit 
was $54.6  million,  down  12%  from $62.2  million  last  year.   Net  income 
attributable to shareholders for the quarter was $5.9 million ($0.07 basic and
diluted per share),  compared to $31.6  million ($0.38 basic  and diluted  per 
share) last  year.  Net  income for  the current  quarter includes  a  pre-tax 
charge for debt  refinancing of $25.0  million.  Removing the  impact of  this 
item results  in adjusted  net income  attributable to  shareholders of  $24.4 
million ($0.29 per share) in the current quarter.

Consolidated revenues for the six months  ended February 28, 2013 were  $409.8 
million, down 7% from $442.6  million last year.  Consolidated segment  profit 
was $147.3  million,  down 4%  from  $153.5  million last  year.   Net  income 
attributable to shareholders for the six months was $58.1 million ($0.70 basic
and $0.69  diluted per  share), compared  to $82.1  million ($0.99  basic  and 
diluted per share)  last year.  Removing  the impact of  the debt  refinancing 
costs results in  adjusted net  income attributable to  shareholders of  $76.6 
million ($0.92 per share) in the current year.

Operational Results - Highlights

Television

  * Movie Central finished the quarter with 1,013,000 subscribers, up 37,000
    year-to-date
  * Segment profit margin of 41% year-to-date
  * Segment revenues decreased 12% in Q2 2013 and 9% year-to-date
  * Segment profit^(1) decreased 14% in Q2 2013 and 7% year-to-date

Radio

  * Segment profit margin of 31% year-to-date
  * Segment revenues decreased 5% in Q2 2013 and 2% year-to-date
  * Segment profit^(1) decreased 2% in Q2 2013, but increased 9% year-to-date

Other

  * Issued $550.0 million of 4.25% Senior Unsecured Guaranteed Notes due in
    2020
  * Agreements completed, subsequent to the quarter, to extend Radio presence
    into Ottawa, consolidate ownership of TELETOON and ABC Spark, acquire 100%
    of Historia and Séries+, and divest Corus' minority interest in the Food
    Network (Canada)

^(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 and six months ended February  28, 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 April 11, 2013
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    1.800.732.6870   and    for 
local/international callers is 416.981.9030.   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 February 28,       As at August 31,
(unaudited - in thousands of                      2013                   2012 
Canadian dollars)
ASSETS                                                                        
Current                                                                       
Cash and cash equivalents                      573,781                 24,588 
Accounts receivable                            181,842                173,421 
Income taxes recoverable                           961                  9,542 
Prepaid expenses and other                      12,134                 12,664 
Asset held-for-sale                              9,881                       —
Total current assets                           778,599                220,215 
                                                                              
Tax credits receivable                          45,799                 43,865 
Intangibles, investments and other              39,361                 42,390 
assets
Property, plant and equipment                  157,070                163,563 
Program and film rights                        274,749                271,244 
Film investments                                79,382                 67,983 
Broadcast licenses                             569,505                569,505 
Goodwill                                       674,393                674,393 
Deferred tax assets                             35,096                 28,327 
                                             2,653,954              2,081,485 
                                                                              
LIABILITIES AND SHAREHOLDERS'                                                 
EQUITY
Current                                                                       
Accounts payable and accrued                   191,672                185,991 
liabilities
Provisions                                       1,198                  2,322 
Current portion of long-term debt              518,125                      — 
Total current liabilities                      710,995                188,313 
                                                                              
Long-term debt                                 537,957                518,258 
Other long-term liabilities                     88,167                 87,853 
Deferred tax liabilities                       151,071                150,971 
Total liabilities                            1,488,190                945,395 
                                                                              
                                                                              
SHAREHOLDERS' EQUITY                                                          
Share capital                                  923,806                910,005 
Contributed surplus                              8,322                  7,835 
Retained earnings                              214,347                198,445 
Accumulated other comprehensive                    995                   (812)
income (loss)
Total equity attributable to                 1,147,470              1,115,473 
shareholders
Equity attributable to                          18,294                 20,617 
non-controlling interest
Total shareholders' equity                   1,165,764              1,136,090 
                                             2,653,954              2,081,485 
                                                               

                           CORUS ENTERTAINMENT INC.
          CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                                              
                                  Three months ended      Six months ended
(unaudited - in thousands of      February    February    February    February
Canadian dollars except per            28,         29,         28,         29,
share amounts)                        2013        2012        2013        2012
Revenues                          183,700     205,683     409,847     442,574 
Direct cost of sales, general     129,052     143,436     262,506     289,113 
and administrative expenses
Depreciation and amortization       7,517       6,653      13,946      12,892 
Interest expense                   13,271      13,410      25,403      26,837 
Debt refinancing                   25,033           —      25,033          —  
Other (income) expense, net          (426)     (1,617)         80      (1,170)
                                                                              
Income before income taxes          9,253      43,801      82,879     114,902 
Income tax expense                  2,373      10,262      21,983      28,683 
                                                                              
Net income for the period           6,880      33,539      60,896      86,219 
                                                                              
Net income attributable to:                                                   
       Shareholders                 5,944      31,571      58,103      82,119 
       Non-controlling                936       1,968       2,793       4,100 
       interest
                                    6,880      33,539      60,896      86,219 
                                                                              
Earnings per share                                                            
attributable to shareholders:
       Basic                        $ 0.07      $ 0.38      $ 0.70      $ 0.99
       Diluted                      $ 0.07      $ 0.38      $ 0.69      $ 0.99
                                                                              
Net income for the period           6,880      33,539      60,896      86,219 
Other comprehensive income                                                    
(loss), net of tax:
Items that may be reclassified                                                
subsequently to income:
       Unrealized foreign           1,191        (587)      1,481         537 
       currency translation
       adjustment
       Unrealized change in            36         (17)        326         (91)
       fair value of
       available-for-sale
       investments
                                    1,227        (604)      1,807         446 
Comprehensive income for the        8,107      32,935      62,703      86,665 
period
                                                                              
Comprehensive income                                                          
attributable to:
       Shareholders                 7,171      30,967      59,910      82,565 
       Non-controlling                936       1,968       2,793       4,100 
       interest
                                    8,107      32,935      62,703      86,665 
                                                                      

                                  CORUS ENTERTAINMENT INC.
                        CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
                                                                                             
                                                                                             
                                                                                             
(unaudited -                                  Accumulated Total equity
in thousands                                        other attributable        Non-
of Canadian      Share Contributed Retained comprehensive           to controlling      Total
dollars)       capital     surplus earnings income (loss) shareholders    interest     equity
                                                                                             
At August 31,                                       (812)   1,115,473 
2012          910,005       7,835  198,445                                 20,617  1,136,090 
Comprehensive                                      1,807       59,910 
income             —           —    58,103                                  2,793     62,703 
Dividends                                               —     (41,445)
declared           —           —   (41,445)                                (5,116)   (46,561)
Issuance of                                             —         749 
shares under
stock option
plan              994        (245)      —                                       —        749 
Issuance of                                             —      13,515 
shares under
dividend
reinvestment
plan           13,515          —        —                                       —     13,515 
Shares                                                  —      (1,464)
repurchased      (708)         —      (756)                                     —     (1,464)
Share-based                                             —         732 
compensation
expense            —          732       —                                       —        732 
                                                                                             
At February                                          995    1,147,470 
28, 2013      923,806       8,322  214,347                                 18,294  1,165,764 
                                                                                             
                                                                                             
At August 31,                                     (1,075)   1,035,620 
2011          882,679      10,299  143,717                                 19,200  1,054,820 
Comprehensive                                        446       82,565 
income             —           —    82,119                                  4,100     86,665 
Dividends                                             —       (37,968)
declared           —           —   (37,968)                                (4,423)   (42,391)
Issuance of                                           —         8,337 
shares under
stock option
plan           11,448      (3,111)      —                                      —       8,337 
Issuance of                                           —        12,839 
shares under
dividend
reinvestment
plan           12,839          —        —                                      —      12,839 
Shares                                                —        (3,888)
repurchased    (2,110)         —    (1,778)                                    —      (3,888)
Share-based                                           —           592 
compensation
expense            —          592       —                                      —         592 
                                                                                             
At February                                         (629)   1,098,097 
29, 2012      904,856       7,780  186,090                                 18,877  1,116,974 
                                                                                    

                           CORUS ENTERTAINMENT INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                              
                                 Three months ended       Six months ended
                                  February    February    February    February
(unaudited - in thousands of           28,         29,         28,         29,
Canadian dollars)                     2013        2012        2013        2012
OPERATING ACTIVITIES                                                          
Net income for the period           6,880      33,539      60,896      86,219 
Add (deduct) non-cash items:                                                  
      Depreciation and              7,517       6,653      13,946      12,892 
      amortization
      Amortization of program      46,908      46,433      92,601      93,488 
      and film rights
      Amortization of film          3,501       7,960       9,708      17,947 
      investments
      Deferred income taxes        (5,432)      3,424      (6,726)      4,786 
      Share-based compensation        392         299         732         592 
      expense
      Imputed interest              2,628       2,976       5,153       6,010 
      Debt refinancing             25,033          —       25,033          —  
      Other                           590        (547)        286        (790)
Net change in non-cash working                                                
capital
      balances related to          19,587      20,665      (9,546)    (20,726)
      operations
Payment of program and film       (39,806)    (50,997)    (67,432)    (86,426)
rights
Net additions to film             (18,160)    (16,837)    (34,234)    (33,973)
investments
Cash provided by operating         49,638      53,568      90,417      80,019 
activities
                                                                              
INVESTING ACTIVITIES                                                          
Additions to property, plant       (3,930)     (4,714)     (7,472)     (8,084)
and equipment
Net cash flows for                 (7,039)       (122)     (6,966)      1,009 
intangibles, investments and
other assets
Other                                (236)       (165)       (324)       (318)
Cash used in investing            (11,205)     (5,001)    (14,762)     (7,393)
activities
                                                                              
FINANCING ACTIVITIES                                                          
Decrease in bank loans            (39,910)    (34,674)    (29,925)    (34,674)
Issuance of notes                 550,000          —      550,000          —  
Financing fees                     (8,607)         —       (8,607)         —  
Issuance of shares under stock        749       8,251         749       8,337 
option plan
Shares repurchased                     —           —       (1,464)     (3,888)
Dividends paid                    (13,775)    (12,145)    (26,998)    (23,820)
Dividends paid to                    (803)       (200)     (5,116)     (4,423)
non-controlling interest
Other                              (2,789)     (2,233)     (5,101)     (4,505)
Cash provided by (used in)        484,865     (41,001)    473,538     (62,973)
financing activities
Net change in cash and cash       523,298       7,566     549,193       9,653 
equivalents during the period
Cash and cash equivalents,         50,483      58,009      24,588      55,922 
beginning of the period
Cash and cash equivalents, end    573,781      65,575     573,781      65,575 
of the period
                                                                      

                           CORUS ENTERTAINMENT INC.
                         BUSINESS SEGMENT INFORMATION
                                                                              
(unaudited - in thousands of Canadian dollars)
                                                                              
Three months ended February 28, 2013
                                 Radio   Television   Corporate   Consolidated
Revenues                       40,277      143,423          —         183,700 
Direct cost of sales,
general and administrative
expenses                       30,623       91,627       6,802        129,052 
Segment profit (loss)^(1)       9,654       51,796      (6,802)        54,648 
Depreciation and
amortization                                                            7,517 
Interest expense                                                       13,271 
Debt refinancing                                                       25,033 
Other expense (income), net                                              (426)
Income before income taxes                                              9,253 
                                                                              
Three months ended February 29, 2012
                                 Radio   Television   Corporate   Consolidated
Revenues                       42,384      163,299          —         205,683 
Direct cost of sales,
general and administrative
expenses                       32,505      102,878       8,053        143,436 
Segment profit (loss)^(1)       9,879       60,421      (8,053)        62,247 
Depreciation and
amortization                                                            6,653 
Interest expense                                                       13,410 
Other expense (income), net                                            (1,617)
Income before income taxes                                             43,801 
                                                                              
Six months ended February
28, 2013                                                                      
                                 Radio   Television   Corporate   Consolidated
Revenues                       92,601      317,246          —         409,847 
Direct cost of sales,
general and administrative
expenses                       63,991      186,752      11,763        262,506 
Segment profit (loss)^(1)      28,610      130,494     (11,763)       147,341 
Depreciation and
amortization                                                           13,946 
Interest expense                                                       25,403 
Debt refinancing                                                       25,033 
Other expense (income), net                                                80 
Income before income taxes                                             82,879 
                                                                              
Six months ended February
29, 2012                                                                      
                                 Radio   Television   Corporate   Consolidated
Revenues                       94,248      348,326          —         442,574 
Direct cost of sales,
general and administrative
expenses                       67,967      207,410      13,736        289,113 
Segment profit (loss)^(1)      26,281      140,916     (13,736)       153,461 
Depreciation and
amortization                                                           12,892 
Interest expense                                                       26,837 
Other expense (income), net                                            (1,170)
Income before income taxes                                            114,902 
^(1) See definitions and discussion under Key Performance Indicators in MD&A.
                                                                   

Revenues by type                                                              
                                Three months ended         Six months ended
                                February    February      February    February
                                     28,         29,           28,         29,
                                   2013        2012          2013        2012 
Advertising                      80,506      83,870       198,400     203,319 
Subscriber fees                  73,798      75,924       148,779     150,065 
Merchandising, distribution      29,396      45,889        62,668      89,190 
and other
                                183,700     205,683       409,847     442,574 

  

SOURCE Corus Entertainment Inc.

Contact:

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
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