- Consolidated revenues up 14% for the quarter and 11%
year-to-date
- Consolidated segment profit up 23% for the quarter and 16%
year-to-date
- Adjusted net income attributable to shareholders of
$41.6 million, up 21% in the
quarter
- Adjusted basic earnings per share attributable to shareholders
of $0.49, up 20% in the quarter
- Free cash flow of $182.4 million
year-to-date, up from $121.1 million
in the prior year
TORONTO, July 10, 2014 /CNW/ - Corus Entertainment
Inc. (TSX: CJR.B) announced its third quarter financial results
today.
"In the third quarter, the Company delivered impressive
double-digit revenue and segment profit growth fueled by our newly
acquired television and radio assets," said John Cassaday, President and Chief Executive
Officer of Corus Entertainment. "While we experienced
continued softness in the ad markets, we are encouraged by the
ratings strength of our flagship networks W and YTV, which have
maintained a leadership position with their core audiences, as well
as the strong ratings gains from our family brands CMT and ABC
Spark. The strength of our recent acquisitions, combined with our
core business, continue to drive shareholder value with strong free
cash flow and adjusted earnings per share growth for the
Company."
|
Financial
Highlights
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
May
31,
|
May
31,
|
|
(unaudited - in
thousands of Canadian dollars except per share amounts)
|
2014
|
2013(3)
|
2014
|
2013(3)
|
|
Revenues
|
|
|
|
|
|
Television
|
170,565
|
139,995
|
500,615
|
429,960
|
|
Radio
|
43,476
|
47,078
|
130,844
|
139,679
|
|
214,041
|
187,073
|
631,459
|
569,639
|
|
|
|
|
|
|
Segment profit
(1)
|
|
|
|
|
|
Television
|
75,679
|
58,154
|
216,237
|
176,786
|
|
Radio
|
11,678
|
14,874
|
35,985
|
43,484
|
|
Corporate
|
(7,626)
|
(8,464)
|
(20,933)
|
(20,227)
|
|
79,731
|
64,564
|
231,289
|
200,043
|
|
|
|
|
|
|
Net income (loss)
attributable to shareholders
|
(30,325)
|
89,913
|
126,682
|
148,016
|
|
Adjusted net income
attributable to shareholders (1) (2)
|
41,602
|
34,519
|
123,560
|
111,110
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
($
0.36)
|
$ 1.07
|
$
1.49
|
$ 1.77
|
|
Adjusted basic
earnings per share (1) (2)
|
$
0.49
|
$ 0.41
|
$
1.46
|
$ 1.33
|
|
Diluted earnings
(loss) per share
|
($
0.36)
|
$ 1.07
|
$
1.49
|
$ 1.76
|
|
|
|
|
|
|
Free cash flow
(1)
|
59,399
|
41,475
|
182,440
|
121,084
|
|
|
|
|
|
|
(1) Adjusted
net income attributable to shareholders, adjusted basic earnings
per share, segment profit, segment profit margin and free cash flow
do not have standardized meanings prescribed by IFRS. The
Company reports on segment profit, segment profit margin and free
cash flow because they are key measures used to evaluate
performance. For definitions and explanations, see discussion
under the Key Performance Indicators section of the 2014 Report to
Shareholders.
|
|
(2) For the
three months ended May 31, 2014, excludes radio broadcast license
and goodwill impairment charges of $75.0 million ($0.85 per share),
business acquisition, integration and restructuring costs of $0.6
million ($0.01 per share), capital asset impairment charges of $1.2
million ($0.01 per share) and a decrease in the purchase price
obligation of $2.0 million ($0.02 per share). For the nine
month period ended May 31, 2014, excludes the impact of a $127.9
million ($1.51 per share) gain on remeasurement to fair value of
the Company's 50% interest in TELETOON which was held prior to
consolidation on September 1, 2013, radio broadcast license
and goodwill impairment charges of $83.0 million ($0.92 per share),
capital asset impairment charges of $1.2 million ($0.01 per share),
business acquisition, integration and restructuring costs of $41.2
million ($0.47 per share), an increase in the purchase price
obligation of $3.3 million ($0.04 per share), and investment
impairment related charges of $3.3 million ($0.04 per share).
For the three and nine month periods ended May 31, 2013, excludes
the impact of a gain on disposition of the Food Network Canada
investment of $55.4 million ($0.66 per share), while for the nine
month period, the impact of debt refinancing costs of $25.0 million
($0.22 per share) are excluded as well.
|
|
(3)
Prior period figures have been restated to reflect the changes in
accounting standards described in note 3 to the interim condensed
consolidated financial statements contained in the 2014 Report to
Shareholders.
|
Consolidated Results from Operations
For fiscal 2014, the operating results of TELETOON Canada Inc.
("TELETOON"), as well as its assets and liabilities, have been
fully consolidated effective September 1,
2013 as a consequence of meeting the definition of control
under IFRS 10 - Consolidated Financial Statements.
Accordingly, a business combination had occurred in accordance with
IFRS 3 – Business Combinations and as a result, TELETOON
must be accounted for by applying the acquisition method. On
December 20, 2013, the Company
received Canadian Radio-television and Telecommunications
Commission ("CRTC") approval to complete the acquisition of the
remaining 50% interest in TELETOON that it did not already own, as
well as the acquisition of Historia and Séries+, s.e.n.c.
("H&S"). These acquisitions closed on January 1, 2014. On January 24, 2014, the CRTC approved the Company's
acquisition of the Ottawa-based
radio stations (CKQB-FM and CJOT-FM) and the transaction closed on
January 31, 2014. As a result
of these business combinations, the Company's consolidated results
for fiscal 2014 reflect 100% interest in TELETOON effective
September 1, 2013, 100% interest in
H&S effective January 1, 2014,
and 100% interest in the two Ottawa-based radio stations effective
January 31, 2014 (refer to note 17 of
the interim condensed consolidated financial statements for further
details on all acquisitions).
For fiscal 2013, as a result of retroactive application of IFRS
11 - Joint Arrangements, the Company is no longer permitted
to proportionately consolidate its 50% equity interest in the
operations of TELETOON up to August 31,
2013 (i.e. prior to the business combination on September 1, 2013) and is required to account for
its investment using the equity method of accounting. As a
consequence, the Television revenues and segment profit for the
third quarter of fiscal 2013 were reduced by $13.0 million and $3.7
million, respectively and instead, Corus' share of
TELETOON's net income of $2.3 million
was reported as Other expense (income) in the Consolidated
Statements of Income and Comprehensive Income. For the nine
months ended May 31, 2013, the
Television revenues and segment profit were reduced by $40.3 million and $15.5
million, respectively, and Corus' share of TELETOON's net
income of $11.0 million was reported
as Other expense (income) in the Consolidated Statements of
Income and Comprehensive Income. The restatement did not change
reported net income for fiscal 2013.
Consolidated revenues for the three months ended May 31, 2014 were $214.0
million, up 14% from $187.1
million last year. Consolidated segment profit was
$79.7 million, up 23% from
$64.6 million last year. Net
loss attributable to shareholders for the quarter was $30.3 million ($0.36 basic and diluted per share), compared to
net income of $89.9 million
($1.07 basic and diluted per share)
last year. Net income attributable to shareholders for the
third quarter includes radio broadcast license and goodwill
impairment charges of $75.0 million,
capital asset impairment charges of $1.2
million, business acquisition, integration and restructuring
costs of $0.6 million and a decrease
in the purchase price obligation of $2.0
million related to the acquisition of control of
TELETOON. Removing the impact of these items results in an
adjusted net income of $41.6 million
($0.49 per share) in the
quarter. Net income attributable to shareholders for the
prior year quarter includes a gain related to the sale of the
Company's non-controlling interest in Food Network Canada of
$55.4 million. Removing the
impact of this item results in an adjusted net income attributable
to shareholders of $34.5 million
($0.41 per share) in the prior year
quarter.
Consolidated revenues for the nine months ended May 31, 2014 were $631.5
million, up 11% from $569.6
million last year. Consolidated segment profit was
$231.3 million, up 16% from
$200.0 million last year. Net
income attributable to shareholders for the nine months ended
May 31, 2014 was $126.7 million ($1.49 per share both basic and diluted)
compared to $148.0 million
($1.77 per share basic and
$1.76 per share diluted) last
year. Net income attributable to shareholders for the nine
months ended May 31, 2014 includes a
non-cash gain of $127.9 million
resulting from the remeasurement to fair value of the Company's 50%
interest in TELETOON which was held prior to consolidation on
September 1, 2013, radio broadcast
license and goodwill impairment charges of $83.0 million, capital asset impairment charges
of $1.2 million, business
acquisition, integration and restructuring costs of $41.2 million, an increase in the purchase price
obligation of $3.3 million and
investment impairment related charges of $3.3 million. Removing the impact of these
items results in an adjusted net income of $123.6 million ($1.46 per share) for the current year-to-date.
Prior year-to-date net income includes a pre-tax charge for debt
refinancing of $25.0 million and a
gain related to the sale of the Company's non-controlling interest
in Food Network Canada of $55.4
million. Removing the impact of these items results in
an adjusted net income attributable to shareholders of $111.1 million ($1.33 per share) in the prior
year-to-date.
Operational Results - Highlights
Television
- Fiscal 2014 reflects consolidation of 100% interest in
TELETOON, effective September 1, 2013
and 100% interest in Historia and Séries+, effective January 1, 2014; Fiscal 2013 was retroactively
restated to apply IFRS 11 – Joint Arrangements, resulting in
equity accounting for Corus' 50% economic interest in TELETOON
(i.e. prior to the business combination on September 1, 2013)
- Segment revenues increased 22% in Q3 2014 and 16%
year-to-date
- Specialty advertising revenues increased 42% in Q3 2014 and 38%
year-to-date
- Subscriber revenues increased 24% in Q3 2014 and 20%
year-to-date
- Merchandising, distribution and other revenues declined 27% in
Q3 2014 and 33% year-to-date
- Segment profit(1) increased 30% in Q3 2014 and 22%
year-to-date
- Segment profit margin(1) of 44% in Q3 2014 and 43%
year-to-date
Radio
- Fiscal 2014 reflects consolidation of 100% interest in two
Ottawa-based radio stations,
CKQB-FM and CJOT-FM, effective January 31,
2014
- Segment revenues decreased 8% in Q3 2014 and 6%
year-to-date
- Segment profit(1) decreased 21% in Q3 2014 and 17%
year-to-date
- Segment profit margin(1) of 27% in Q3 2014 and 28%
year-to-date
- Non-cash broadcast license and goodwill impairment charges of
$75.0 million recorded in Q3 2014 and
$83.0 million year-to-date.
|
(1) |
Segment profit,
segment profit margin and free cash flow do not have standardized
meanings prescribed by IFRS. The Company reports on segment
profit, segment profit margin and free cash flow because they are
key measures used to evaluate performance. For definitions
and explanations, see discussion under the Key Performance
Indicators section of the 2014 Report to Shareholders.
|
Corus Entertainment Inc. reports in Canadian dollars.
The unaudited consolidated financial statements and accompanying
notes for the three and nine month periods ended May 31, 2014 and Management's Discussion and
Analysis are available on the Company's website at www.corusent.com
in the Investor Relations section.
A conference call with Corus senior management is scheduled for
July 10, 2014 at 3:00 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 local and
international callers is 1.416.981.9038 and for North America is 1.800.734.8582.
PowerPoint slides for the call will be posted 15 minutes prior to
the start of the call and can be found on the Corus Entertainment
website at www.corusent.com in the Investor Relations section.
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures of
adjusted net income, adjusted basic earnings per share and free
cash flow that are not in accordance with, nor an alternate to,
generally accepted accounting principles ("GAAP") and may be
different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles.
Non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. They are limited in value because
they exclude charges that have a material effect on the Company's
reported results and, therefore, should not be relied upon as the
sole financial measures to evaluate the Company's financial
results. The non-GAAP financial measures are meant to supplement,
and to be viewed in conjunction with, GAAP financial results.
A reconciliation of the Company's non-GAAP measures is included in
the Company's most recent Report to Shareholders which is available
on Corus' website at www.corusent.com as well as on SEDAR.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking information and
should be read subject to the following cautionary
language:
To the extent any statements made in this report contain
information that is not historical, these statements are
forward-looking statements and may be forward-looking information
within the meaning of applicable securities laws (collectively,
"forward-looking statements"). These forward-looking
statements relate to, among other things, our objectives, goals,
strategies, intentions, plans, estimates and outlook, including
advertising, distribution, merchandise and subscription revenues,
operating costs and tariffs, taxes and fees, and can generally be
identified by the use of the words such as "believe", "anticipate",
"expect", "intend", "plan", "will", "may" and other similar
expressions. In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances are forward-looking statements.
Although Corus believes that the expectations reflected in such
forward-looking statements are reasonable, such statements involve
risks and uncertainties and undue reliance should not be placed on
such statements. Certain material factors or assumptions are
applied in making forward-looking statements, including without
limitation factors and assumptions regarding advertising,
distribution, merchandise and subscription revenues, operating
costs and tariffs, taxes and fees and actual results may differ
materially from those expressed or implied in such
statements. Important factors that could cause actual results
to differ materially from these expectations include, among other
things: our ability to attract and retain advertising revenues;
audience acceptance of our television programs and cable networks;
our ability to recoup production costs, the availability of tax
credits and the existence of co-production treaties; our ability to
compete in any of the industries in which we do business; the
opportunities (or lack thereof) that may be presented to and
pursued by us; conditions in the entertainment, information and
communications industries and technological developments therein;
changes in laws or regulations or the interpretation or application
of those laws and regulations; our ability to integrate and realize
anticipated benefits from our acquisitions and to effectively
manage our growth; our ability to successfully defend ourselves
against litigation matters arising out of the ordinary course of
business; and changes in accounting standards. Additional
information about these factors and about the material assumptions
underlying such forward-looking statements may be found in our
Annual Information Form. Corus cautions that the foregoing
list of important factors that may affect future results is not
exhaustive. When relying on our forward-looking statements to
make decisions with respect to Corus, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. Unless otherwise required by applicable
securities laws, we disclaim any intention or obligation to
publicly update or revise any forward-looking statements whether as
a result of new information, events or circumstances that arise
after the date thereof or otherwise.
About Corus Entertainment Inc.
Corus Entertainment Inc. is a Canadian-based media and
entertainment company that creates, broadcasts and licenses content
across a variety of platforms for audiences around the world. The
Company's portfolio of multimedia offerings encompasses specialty
television and radio with additional assets in pay television,
television broadcasting, children's book publishing, children's
animation and animation software. Corus' brands include YTV,
TELETOON, ABC Spark, W Network, OWN: Oprah Winfrey Network
(Canada), HBO Canada, Historia and
Séries+, as well as Nelvana, Kids Can Press, Toon Boom and 39 radio
stations including CKNW AM 980, 99.3 The FOX, Country 105, 630
CHED, Fresh FM London, JUMP! 106.9, Q107 and 102.1 the Edge. A
publicly traded company, Corus is listed on the Toronto Stock
Exchange (CJR.B). Experience Corus on the web at
www.corusent.com.
|
CORUS ENTERTAINMENT
INC.
|
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
As at May
31,
|
As at August
31,
|
As at September
1,
|
|
(unaudited - in
thousands of Canadian dollars)
|
2014
|
2013(1)
|
2012(1)
|
|
ASSETS
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
38,236
|
81,266
|
19,198
|
|
Accounts
receivable
|
203,206
|
164,302
|
163,345
|
|
Promissory note
receivable
|
—
|
47,759
|
—
|
|
Income taxes
recoverable
|
4,789
|
351
|
9,542
|
|
Prepaid expenses and
other
|
10,447
|
16,392
|
12,619
|
|
|
|
|
|
Total current
assets
|
256,678
|
310,070
|
204,704
|
|
|
|
|
|
Tax credits
receivable
|
45,133
|
41,564
|
43,865
|
|
Intangibles,
investments and other assets
|
44,345
|
42,975
|
42,390
|
|
Investment in joint
venture
|
—
|
125,931
|
121,704
|
|
Property, plant and
equipment
|
143,274
|
151,192
|
163,280
|
|
Program and film
rights
|
287,442
|
232,587
|
229,306
|
|
Film
investments
|
68,284
|
62,274
|
67,847
|
|
Broadcast
licenses
|
979,984
|
515,036
|
520,770
|
|
Goodwill
|
937,191
|
646,045
|
646,045
|
|
Deferred tax
assets
|
38,093
|
39,463
|
28,327
|
|
2,800,424
|
2,167,137
|
2,068,238
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
|
|
|
|
|
Accounts payable and
accrued liabilities
|
248,422
|
164,443
|
177,367
|
|
Income taxes
payable
|
—
|
—
|
1,303
|
|
Provisions
|
3,912
|
3,941
|
2,322
|
|
Total current
liabilities
|
252,334
|
168,384
|
180,992
|
|
|
|
|
|
Long-term
debt
|
873,587
|
538,966
|
518,258
|
|
Other long-term
liabilities
|
119,174
|
93,241
|
87,588
|
|
Deferred tax
liabilities
|
254,504
|
145,713
|
145,310
|
|
Total
liabilities
|
1,499,599
|
946,304
|
932,148
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Share
capital
|
957,477
|
937,183
|
910,005
|
|
Contributed
surplus
|
8,432
|
7,221
|
7,835
|
|
Retained
earnings
|
315,185
|
256,517
|
198,445
|
|
Accumulated other
comprehensive income (loss)
|
3,618
|
1,653
|
(812)
|
|
Total equity
attributable to shareholders
|
1,284,712
|
1,202,574
|
1,115,473
|
|
Equity attributable
to non-controlling interest
|
16,113
|
18,259
|
20,617
|
|
Total
shareholders' equity
|
1,300,825
|
1,220,833
|
1,136,090
|
|
2,800,424
|
2,167,137
|
2,068,238
|
|
(1) Prior
period figures have been restated to reflect the changes in
accounting standards described in note 3
to the interim condensed consolidated financial statements
contained in the 2014 Report to Shareholders.
|
|
CORUS ENTERTAINMENT
INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
May
31,
|
May
31,
|
|
(unaudited - in
thousands of Canadian dollars except per share amounts)
|
2014
|
2013
(1)
|
2014
|
2013
(1)
|
|
Revenues
|
214,041
|
187,073
|
631,459
|
569,639
|
|
Direct cost of sales,
general and administrative expenses
|
134,310
|
122,509
|
400,170
|
369,596
|
|
Depreciation and
amortization
|
7,385
|
6,904
|
18,653
|
20,805
|
|
Interest
expense
|
13,453
|
10,456
|
35,327
|
35,859
|
|
Broadcast license and
goodwill impairment
|
75,000
|
—
|
83,000
|
—
|
|
Debt
refinancing
|
—
|
—
|
—
|
25,033
|
|
Business acquisition,
integration and restructuring costs
|
560
|
2,147
|
41,216
|
2,147
|
|
Gain on
acquisition
|
—
|
(55,394)
|
(127,884)
|
(55,394)
|
|
Other (income)
expense, net
|
(1,489)
|
(2,193)
|
7,216
|
(10,860)
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(15,178)
|
102,644
|
173,761
|
182,453
|
|
Income tax
expense
|
13,691
|
11,132
|
43,224
|
30,045
|
|
|
|
|
|
|
Net income (loss)
for the period
|
(28,869)
|
91,512
|
130,537
|
152,408
|
|
|
|
|
|
|
Net income (loss)
attributable to:
|
|
|
|
|
|
Shareholders
|
(30,325)
|
89,913
|
126,682
|
148,016
|
|
Non-controlling
interest
|
1,456
|
1,599
|
3,855
|
4,392
|
|
(28,869)
|
91,512
|
130,537
|
152,408
|
|
|
|
|
|
|
Earnings (loss)
per share attributable to shareholders:
|
|
|
|
|
|
Basic
|
($
0.36)
|
$ 1.07
|
$
1.49
|
$ 1.77
|
|
Diluted
|
($
0.36)
|
$ 1.07
|
$
1.49
|
$ 1.76
|
|
|
|
|
|
|
Net income (loss)
for the period
|
(28,869)
|
91,512
|
130,537
|
152,408
|
|
Other
comprehensive income (loss), net of tax:
|
|
|
|
|
|
Items that may be
reclassified subsequently to income:
|
|
|
|
|
|
Unrealized foreign
currency translation adjustment
|
(646)
|
204
|
1,620
|
1,685
|
|
Unrealized change in
fair value of available-
|
|
|
|
|
|
for-sale
investments
|
392
|
(368)
|
454
|
(42)
|
|
Unrealized change in
fair value of cash flow
|
|
|
|
|
|
hedges
|
37
|
—
|
(109)
|
—
|
|
(217)
|
(164)
|
1,965
|
1,643
|
|
|
|
|
|
|
Comprehensive
income (loss) for the period
|
(29,086)
|
91,348
|
132,502
|
154,051
|
|
|
|
|
|
|
Comprehensive
income (loss) attributable to:
|
|
|
|
|
|
Shareholders
|
(30,542)
|
89,749
|
128,647
|
149,659
|
|
Non-controlling
interest
|
1,456
|
1,599
|
3,855
|
4,392
|
|
(29,086)
|
91,348
|
132,502
|
154,051
|
|
(1) Prior
period figures have been restated to reflect changes in accounting
standards described in note 3 to the interim condensed
consolidated financial statements contained in the 2014 Report to
Shareholders.
|
|
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,
2013
|
937,183
|
7,221
|
256,517
|
1,653
|
1,202,574
|
18,259
|
1,220,833
|
|
|
Comprehensive
income
|
—
|
—
|
126,682
|
1,965
|
128,647
|
3,855
|
132,502
|
|
|
Dividends
declared
|
—
|
—
|
(68,014)
|
—
|
(68,014)
|
(6,001)
|
(74,015)
|
|
|
Issuance of shares
under stock option plan
|
1,737
|
(278)
|
—
|
—
|
1,459
|
—
|
1,459
|
|
|
Issuance of shares
under dividend reinvestment plan
|
18,557
|
—
|
—
|
—
|
18,557
|
—
|
18,557
|
|
|
Share-based
compensation expense
|
—
|
1,489
|
—
|
—
|
1,489
|
—
|
1,489
|
|
|
At May 31,
2014
|
957,477
|
8,432
|
315,185
|
3,618
|
1,284,712
|
16,113
|
1,300,825
|
|
|
|
|
|
|
|
|
|
|
|
At August 31,
2012
|
910,005
|
7,835
|
198,445
|
(812)
|
1,115,473
|
20,617
|
1,136,090
|
|
|
Comprehensive
income
|
—
|
—
|
148,016
|
1,643
|
149,659
|
4,392
|
154,051
|
|
|
Dividends
declared
|
—
|
—
|
(62,914)
|
—
|
(62,914)
|
(5,715)
|
(68,629)
|
|
|
Issuance of shares
under stock option plan
|
1,155
|
(2,200)
|
—
|
—
|
(1,045)
|
—
|
(1,045)
|
|
|
Issuance of shares
under dividend reinvestment plan
|
20,350
|
—
|
—
|
—
|
20,350
|
—
|
20,350
|
|
|
Shares
repurchased
|
(708)
|
—
|
(756)
|
—
|
(1,464)
|
—
|
(1,464)
|
|
|
Share-based
compensation expense
|
—
|
1,162
|
—
|
—
|
1,162
|
—
|
1,162
|
|
|
Acquisition of
non-controlling interest
|
—
|
—
|
(17,231)
|
—
|
(17,231)
|
(1,881)
|
(19,112)
|
|
|
At May 31,
2013
|
930,802
|
6,797
|
265,560
|
831
|
1,203,990
|
17,413
|
1,221,403
|
|
|
|
|
|
|
|
|
|
|
|
CORUS ENTERTAINMENT
INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
Three months ended May
31,
|
Nine months ended May
31,
|
|
(unaudited - in
thousands of Canadian dollars)
|
2014
|
2013(1)
|
2014
|
2013(1)
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
Net income (loss) for
the period
|
(28,869)
|
91,512
|
130,537
|
152,408
|
|
Add (deduct) non-cash
items:
|
|
|
|
|
|
Depreciation and amortization
|
7,385
|
6,904
|
18,653
|
20,805
|
|
Broadcast license and goodwill impairment
|
75,000
|
—
|
83,000
|
—
|
|
Amortization of program and film rights
|
51,624
|
43,493
|
153,768
|
126,714
|
|
Amortization of film investments
|
4,201
|
7,691
|
13,256
|
17,399
|
|
Deferred
income taxes
|
(637)
|
(3,250)
|
4,384
|
(9,976)
|
|
Increase
(decrease) in purchase price obligation
|
(1,952)
|
—
|
3,336
|
—
|
|
Share-based compensation expense
|
528
|
430
|
1,489
|
1,162
|
|
Imputed
interest
|
3,840
|
2,526
|
10,985
|
7,679
|
|
Tangible
benefit obligation
|
—
|
—
|
31,916
|
—
|
|
Debt
refinancing
|
—
|
—
|
—
|
25,033
|
|
Gain on
sale of associated company
|
—
|
(55,394)
|
—
|
(55,394)
|
|
Gain on
acquisition
|
—
|
—
|
(127,884)
|
—
|
|
Other
|
485
|
(4,174)
|
1,900
|
(12,624)
|
|
Net change in
non-cash working capital
|
|
|
|
|
|
balances
related to operations
|
14,870
|
1,978
|
3,312
|
(7,325)
|
|
Payment of program
and film rights
|
(43,975)
|
(33,968)
|
(104,653)
|
(95,491)
|
|
Net additions to film
investments
|
(19,017)
|
(14,709)
|
(32,765)
|
(48,943)
|
|
Cash provided by
operating activities
|
63,483
|
43,039
|
191,234
|
121,447
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
Additions to
property, plant and equipment
|
(3,435)
|
(2,853)
|
(7,715)
|
(10,317)
|
|
Business
combinations
|
(5,265)
|
—
|
(496,706)
|
—
|
|
Dividends from
investment in joint venture
|
—
|
1,290
|
—
|
9,041
|
|
Net cash flows for
intangibles, investments and other assets
|
(2,321)
|
(2,321)
|
(7,395)
|
(9,287)
|
|
Other
|
(201)
|
(90)
|
(323)
|
(414)
|
|
Cash used in
investing activities
|
(11,222)
|
(3,974)
|
(512,139)
|
(10,977)
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
Increase (decrease)
in bank loans
|
(39,964)
|
—
|
333,101
|
(29,925)
|
|
Issuance of
notes
|
—
|
—
|
—
|
550,000
|
|
Redemption of
notes
|
—
|
(500,000)
|
—
|
(500,000)
|
|
Financing
fees
|
—
|
(18,125)
|
(587)
|
(26,732)
|
|
Issuance of shares
under stock option plan
|
566
|
135
|
1,459
|
884
|
|
Shares
repurchased
|
—
|
—
|
—
|
(1,464)
|
|
Dividends
paid
|
(16,380)
|
(14,586)
|
(48,316)
|
(41,584)
|
|
Dividends paid to
non-controlling interest
|
—
|
(599)
|
(6,001)
|
(5,715)
|
|
Other
|
(532)
|
(4,488)
|
(1,781)
|
(9,589)
|
|
Cash provided by
(used in) financing activities
|
(56,310)
|
(537,663)
|
277,875
|
(64,125)
|
|
Net change in cash
and cash equivalents
|
|
|
|
|
|
during
the period
|
(4,049)
|
(498,598)
|
(43,030)
|
46,345
|
|
Cash and cash
equivalents, beginning of the period
|
42,285
|
564,141
|
81,266
|
19,198
|
|
Cash and cash
equivalents, end of the period
|
38,236
|
65,543
|
38,236
|
65,543
|
|
(1) Prior
period figures have been restated to reflect changes in accounting
standards described in note 3 to the interim
condensed consolidated financial statements contained in the 2014
Report to Shareholders.
|
|
CORUS ENTERTAINMENT
INC.
|
|
BUSINESS SEGMENT
INFORMATION
|
|
|
(unaudited - in
thousands of Canadian dollars)
|
|
|
|
|
|
|
|
Three months ended
May 31, 2014
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenues
|
170,565
|
43,476
|
—
|
214,041
|
|
Direct cost of sales,
general
|
|
|
|
|
|
and administrative
expenses
|
94,886
|
31,798
|
7,626
|
134,310
|
|
Segment profit
(loss) (1)
|
75,679
|
11,678
|
(7,626)
|
79,731
|
|
Depreciation and
amortization
|
|
|
|
7,385
|
|
Interest
expense
|
|
|
|
13,453
|
|
Broadcast license and
goodwill impairment
|
|
|
|
75,000
|
|
Business acquisition,
integration and restructuring costs
|
|
|
|
560
|
|
Other income,
net
|
|
|
|
(1,489)
|
|
Loss before income
taxes
|
|
|
|
(15,178)
|
|
|
|
|
|
|
|
Three months ended
May 31, 2013
|
|
|
Television
(2)
|
Radio
|
Corporate
|
Consolidated
|
|
Revenues
|
139,995
|
47,078
|
—
|
187,073
|
|
Direct cost of sales,
general
|
|
|
|
|
|
and administrative
expenses
|
81,841
|
32,204
|
8,464
|
122,509
|
|
Segment profit
(loss) (1)
|
58,154
|
14,874
|
(8,464)
|
64,564
|
|
Depreciation and
amortization
|
|
|
|
6,904
|
|
Interest
expense
|
|
|
|
10,456
|
|
Gain on sale of
associated company
|
|
|
|
(55,394)
|
|
Business acquisition,
integration and restructuring costs
|
|
|
|
2,147
|
|
Other income,
net
|
|
|
|
(2,193)
|
|
Income before
income taxes
|
|
|
|
102,644
|
|
|
|
|
|
|
|
Nine months ended
May 31, 2014
|
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenues
|
500,615
|
130,844
|
—
|
631,459
|
|
Direct cost of sales,
general
|
|
|
|
|
|
and administrative
expenses
|
284,378
|
94,859
|
20,933
|
400,170
|
|
Segment profit
(loss)(1)
|
216,237
|
35,985
|
(20,933)
|
231,289
|
|
Depreciation and
amortization
|
|
|
|
18,653
|
|
Interest
expense
|
|
|
|
35,327
|
|
Broadcast license and
goodwill impairment
|
|
|
|
83,000
|
|
Business acquisition,
integration and restructuring costs
|
|
|
|
41,216
|
|
Gain on
acquisition
|
|
|
|
(127,884)
|
|
Other expense,
net
|
|
|
|
7,216
|
|
Income before
income taxes
|
|
|
|
173,761
|
|
|
|
|
|
|
|
Nine months ended May
31, 2013
|
|
|
|
|
|
|
Television
(2)
|
Radio
|
Corporate
|
Consolidated
|
|
Revenues
|
429,960
|
139,679
|
—
|
569,639
|
|
Direct cost of sales,
general
|
|
|
|
|
|
and administrative
expenses
|
253,174
|
96,195
|
20,227
|
369,596
|
|
Segment profit
(loss) (1)
|
176,786
|
43,484
|
(20,227)
|
200,043
|
|
Depreciation and
amortization
|
|
|
|
20,805
|
|
Interest
expense
|
|
|
|
35,859
|
|
Gain on sale of
associated company
|
|
|
|
(55,394)
|
|
Debt
refinancing
|
|
|
|
25,033
|
|
Business acquisition,
integration and restructuring costs
|
|
|
|
2,147
|
|
Other income,
net
|
|
|
|
(10,860)
|
|
Income before
income taxes
|
|
|
|
182,453
|
|
(1)
Segment profit does not have a standardized meaning prescribed by
IFRS. For definitions and explanations, see discussion
under the Key Performance Indicators section of the 2014 Report to
Shareholders.
|
|
(2) Prior
period figures have been restated to reflect the changes in
accounting standards described in note 3 to the interim
consolidated financial statements contained in the 2014 Report to
Shareholders.
|
|
Revenues by
type
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
May
31,
|
May 31,
|
May
31,
|
May 31,
|
|
2014
|
2013(1)
|
2014
|
2013(1)
|
|
Advertising
|
108,039
|
91,961
|
319,281
|
274,475
|
|
Subscriber
fees
|
86,522
|
70,006
|
249,199
|
207,622
|
|
Merchandising,
distribution and other
|
19,480
|
25,106
|
62,979
|
87,542
|
|
214,041
|
187,073
|
631,459
|
569,639
|
|
|
|
|
|
|
(1) Prior
period figures have been restated to reflect the changes in
accounting standards described in note 3 to the interim condensed
consolidated
financial statements contained in the 2014 Report to
Shareholders.
|
Reconciliation of
changes related to the retroactive adoption of IFRS 11 - Joint
Arrangements in the consolidated statements of financial
position, income and comprehensive income, and cash flows for the
periods indicated.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Financial Position
|
|
|
|
|
|
|
(in thousands of
Canadian dollars)
|
August 31,
2013
|
September 1,
2012
|
|
Originally
Reported
|
IFRS 11
Adjustment
|
Restated
|
Originally
Reported
|
IFRS 11
Adjustment
|
Restated
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
86,081
|
(4,815)
|
81,266
|
24,588
|
(5,390)
|
19,198
|
|
Accounts
receivable
|
176,504
|
(12,202)
|
164,302
|
173,421
|
(10,076)
|
163,345
|
|
Promissory note
receivable
|
47,759
|
—
|
47,759
|
—
|
—
|
—
|
|
Income taxes
recoverable
|
341
|
10
|
351
|
9,542
|
—
|
9,542
|
|
Prepaid expenses and
other
|
16,416
|
(24)
|
16,392
|
12,664
|
(45)
|
12,619
|
|
Total current
assets
|
327,101
|
(17,031)
|
310,070
|
220,215
|
(15,511)
|
204,704
|
|
|
|
|
|
|
|
|
Tax credits
receivable
|
41,564
|
—
|
41,564
|
43,865
|
—
|
43,865
|
|
Intangibles,
investments and other assets
|
42,975
|
—
|
42,975
|
42,390
|
—
|
42,390
|
|
Investments in joint
venture
|
—
|
125,931
|
125,931
|
—
|
121,704
|
121,704
|
|
Property, plant and
equipment
|
151,398
|
(206)
|
151,192
|
163,563
|
(283)
|
163,280
|
|
Program and film
rights
|
289,181
|
(56,594)
|
232,587
|
271,244
|
(41,938)
|
229,306
|
|
Film
investments
|
62,734
|
(460)
|
62,274
|
67,983
|
(136)
|
67,847
|
|
Broadcast
licenses
|
563,771
|
(48,735)
|
515,036
|
569,505
|
(48,735)
|
520,770
|
|
Goodwill
|
674,393
|
(28,348)
|
646,045
|
674,393
|
(28,348)
|
646,045
|
|
Deferred tax
assets
|
39,463
|
—
|
39,463
|
28,327
|
—
|
28,327
|
|
2,192,580
|
(25,443)
|
2,167,137
|
2,081,485
|
(13,247)
|
2,068,238
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
172,663
|
(8,220)
|
164,443
|
185,991
|
(8,624)
|
177,367
|
|
Income taxes
payable
|
—
|
—
|
—
|
—
|
1,303
|
1,303
|
|
Provisions
|
3,941
|
—
|
3,941
|
2,322
|
—
|
2,322
|
|
Total current
liabilities
|
176,604
|
(8,220)
|
168,384
|
188,313
|
(7,321)
|
180,992
|
|
Long-term
debt
|
538,966
|
—
|
538,966
|
518,258
|
—
|
518,258
|
|
Other long-term
liabilities
|
105,020
|
(11,779)
|
93,241
|
87,853
|
(265)
|
87,588
|
|
Deferred tax
liabilities
|
151,157
|
(5,444)
|
145,713
|
150,971
|
(5,661)
|
145,310
|
|
Total
liabilities
|
971,747
|
(25,443)
|
946,304
|
945,395
|
(13,247)
|
932,148
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
Share
capital
|
937,183
|
—
|
937,183
|
910,005
|
—
|
910,005
|
|
Contributed
surplus
|
7,221
|
—
|
7,221
|
7,835
|
—
|
7,835
|
|
Retained
earnings
|
256,517
|
—
|
256,517
|
198,445
|
—
|
198,445
|
|
Accumulated other
comprehensive income (loss)
|
1,653
|
—
|
1,653
|
(812)
|
—
|
(812)
|
|
Total equity
attributable to shareholders
|
1,202,574
|
—
|
1,202,574
|
1,115,473
|
—
|
1,115,473
|
|
Equity attributable
to non-controlling interest
|
18,259
|
—
|
18,259
|
20,617
|
—
|
20,617
|
|
Total
shareholders' equity
|
1,220,833
|
—
|
1,220,833
|
1,136,090
|
—
|
1,136,090
|
|
2,192,580
|
(25,443)
|
2,167,137
|
2,081,485
|
(13,247)
|
2,068,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Income and Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
Canadian dollars)
|
Three months ended May
31, 2013
|
Nine months ended May
31, 2013
|
|
Originally
Published
|
IFRS 11
Adjustment
|
Restated
|
Originally
Published
|
IFRS 11
Adjustment
|
Restated
|
|
|
|
|
|
|
|
|
Revenues
|
200,060
|
(12,987)
|
187,073
|
609,907
|
(40,268)
|
569,639
|
|
Direct cost of sales,
general and
|
|
|
|
|
|
|
|
administrative expenses
|
131,834
|
(9,325)
|
122,509
|
394,340
|
(24,744)
|
369,596
|
|
Segment
profit
|
68,226
|
(3,662)
|
64,564
|
215,567
|
(15,524)
|
200,043
|
|
Depreciation and
amortization
|
6,926
|
(22)
|
6,904
|
20,872
|
(67)
|
20,805
|
|
Interest
expense
|
10,456
|
—
|
10,456
|
35,859
|
—
|
35,859
|
|
Debt
refinancing
|
—
|
—
|
—
|
25,033
|
—
|
25,033
|
|
Business acquisition,
integration and restructuring costs
|
2,147
|
—
|
2,147
|
2,147
|
—
|
2,147
|
|
Gain on sale of
associated company
|
(55,394)
|
—
|
(55,394)
|
(55,394)
|
—
|
(55,394)
|
|
Other expense
(income), net
|
82
|
(5)
|
77
|
162
|
(16)
|
146
|
|
Income from joint
venture
|
—
|
(2,270)
|
(2,270)
|
—
|
(11,006)
|
(11,006)
|
|
Income before income
taxes
|
104,009
|
(1,365)
|
102,644
|
186,888
|
(4,435)
|
182,453
|
|
Income tax
expense
|
12,497
|
(1,365)
|
11,132
|
34,480
|
(4,435)
|
30,045
|
|
Net income for the
period
|
91,512
|
—
|
91,512
|
152,408
|
—
|
152,408
|
|
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
|
|
Shareholders
|
89,913
|
—
|
89,913
|
148,016
|
—
|
148,016
|
|
Non-controlling
interest
|
1,599
|
—
|
1,599
|
4,392
|
—
|
4,392
|
|
91,512
|
—
|
91,512
|
152,408
|
—
|
152,408
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders:
|
|
|
|
|
|
|
|
Basic
|
$ 1.07
|
—
|
$ 1.07
|
$ 1.77
|
—
|
$ 1.77
|
|
Diluted
|
$ 1.07
|
—
|
$ 1.07
|
$ 1.76
|
—
|
$ 1.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
period
|
91,512
|
—
|
91,512
|
152,408
|
—
|
152,408
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to income:
|
|
|
|
|
|
|
|
Unrealized foreign
currency translation adjustment
|
204
|
—
|
204
|
1,685
|
—
|
1,685
|
|
Unrealized change in
fair value of available-for-sale investments
|
(368)
|
—
|
(368)
|
(42)
|
—
|
(42)
|
|
(164)
|
—
|
(164)
|
1,643
|
—
|
1,643
|
|
Comprehensive
income for the period
|
91,348
|
—
|
91,348
|
154,051
|
—
|
154,051
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to:
|
|
|
|
|
|
|
|
Shareholders
|
89,749
|
—
|
89,749
|
149,659
|
—
|
149,659
|
|
Non-controlling
interest
|
1,599
|
—
|
1,599
|
4,392
|
—
|
4,392
|
|
91,348
|
—
|
91,348
|
154,051
|
—
|
154,051
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
|
(in thousands of
Canadian dollars)
|
Three months ended May
31, 2013
|
Nine months ended May
31, 2013
|
|
Originally
Published
|
IFRS 11
Adjustment
|
Restated
|
Originally
Published
|
IFRS 11
Adjustment
|
Restated
|
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income for the
period
|
91,512
|
—
|
91,512
|
152,408
|
—
|
152,408
|
|
Add (deduct)
non-cash items:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
6,926
|
(22)
|
6,904
|
20,872
|
(67)
|
20,805
|
|
Amortization of program and
film rights
|
49,476
|
(5,983)
|
43,493
|
142,077
|
(15,363)
|
126,714
|
|
Amortization of film
investment
|
7,691
|
—
|
7,691
|
17,399
|
—
|
17,399
|
|
Deferred income
taxes
|
(3,250)
|
—
|
(3,250)
|
(9,976)
|
—
|
(9,976)
|
|
Share-based compensation
expense
|
430
|
—
|
430
|
1,162
|
—
|
1,162
|
|
Imputed interest
|
2,526
|
—
|
2,526
|
7,679
|
—
|
7,679
|
|
Debt refinancing
|
—
|
—
|
—
|
25,033
|
—
|
25,033
|
|
Gain on sale of associated
company
|
(55,394)
|
—
|
(55,394)
|
(55,394)
|
—
|
(55,394)
|
|
Other
|
(404)
|
(3,770)
|
(4,174)
|
(118)
|
(12,506)
|
(12,624)
|
|
Net change in
non-cash working capital balances related to operations
|
1,521
|
457
|
1,978
|
(8,025)
|
700
|
(7,325)
|
|
Payment of program
and film rights
|
(38,895)
|
4,927
|
(33,968)
|
(106,327)
|
10,836
|
(95,491)
|
|
Net additions to film
investment
|
(14,709)
|
—
|
(14,709)
|
(48,943)
|
—
|
(48,943)
|
|
Cash provided by
operating activities
|
47,430
|
(4,391)
|
43,039
|
137,847
|
(16,400)
|
121,447
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
(2,856)
|
3
|
(2,853)
|
(10,328)
|
11
|
(10,317)
|
|
Dividends from
investments in joint venture
|
—
|
1,290
|
1,290
|
—
|
9,041
|
9,041
|
|
Net cash flows for
intangibles, investments and other assets
|
(2,321)
|
—
|
(2,321)
|
(9,287)
|
—
|
(9,287)
|
|
Other
|
(90)
|
—
|
(90)
|
(414)
|
—
|
(414)
|
|
Cash used in
investing activities
|
(5,267)
|
1,293
|
(3,974)
|
(20,029)
|
9,052
|
(10,977)
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Decrease in bank
loans
|
—
|
—
|
—
|
(29,925)
|
—
|
(29,925)
|
|
Issuance of
notes
|
—
|
—
|
—
|
550,000
|
—
|
550,000
|
|
Redemption of
notes
|
(500,000)
|
—
|
(500,000)
|
(500,000)
|
—
|
(500,000)
|
|
Financing
fees
|
(18,125)
|
—
|
(18,125)
|
(26,732)
|
—
|
(26,732)
|
|
Issuance of shares
under stock option plan
|
135
|
—
|
135
|
884
|
—
|
884
|
|
Shares
repurchased
|
—
|
—
|
—
|
(1,464)
|
—
|
(1,464)
|
|
Dividends
paid
|
(14,586)
|
—
|
(14,586)
|
(41,584)
|
—
|
(41,584)
|
|
Dividends paid to
non-controlling interest
|
(599)
|
—
|
(599)
|
(5,715)
|
—
|
(5,715)
|
|
Other
|
(4,488)
|
—
|
(4,488)
|
(9,589)
|
—
|
(9,589)
|
|
Cash used in
financing activities
|
(537,663)
|
—
|
(537,663)
|
(64,125)
|
—
|
(64,125)
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents during the period
|
(495,500)
|
(3,098)
|
(498,598)
|
53,693
|
(7,348)
|
46,345
|
|
Cash and cash
equivalents, beginning of the period
|
573,781
|
(9,640)
|
564,141
|
24,588
|
(5,390)
|
19,198
|
|
Cash and cash
equivalents, end of the period
|
78,281
|
(12,738)
|
65,543
|
78,281
|
(12,738)
|
65,543
|
SOURCE Corus Entertainment Inc.