Corus Entertainment Announces Fiscal 2017 Third Quarter Results


  • Consolidated revenues increased 28% for the quarter and 65% for the year-to-date [up 3% on a pro forma basis(1) for the quarter and down 2% for the year-to-date(1)]
  • Consolidated segment profit(2) growth of 35% for the quarter and 54% for the year-to-date [up 14% on a pro forma basis(1) for the quarter and up 5% for the year-to-date(1)]
  • Consolidated segment profit margin (2) of 38% for the quarter and 36% for the year-to-date
  • Net income attributable to shareholders of $66.7 million ($0.33 per share basic) for the quarter and $162.7 million ($0.81 per share basic) for the year-to-date.
  • Adjusted basic earnings per share(2)(3) of $0.35 per share for the quarter

TORONTO, June 27, 2017– Corus Entertainment Inc. (TSX: CJR.B) announced its third quarter financial results today.

“Our Q3 results clearly demonstrate progress on our goal of returning Corus to growth”, said Doug Murphy, President and Chief Executive Officer. “We were pleased to deliver solid revenue gains, double-digit segment profit growth and impressive margin expansion in the quarter. In addition, we reached a key leverage ratio milestone earlier than anticipated. As we head into a new broadcast year, we expect our powerful brands and content will position us for continued audience share gains, supported by our exciting fall schedule. This coupled with our improved cost structure and the unwavering commitment of our talented team gives us confidence that we remain on the right track to achieving our long-term goals”.

Financial Highlights

Three months ended

Nine months ended

May 31,

May 31,

(in thousands of Canadian dollars except per share amounts)

2017

2016

2017

2016

Revenues

Television

422,324

321,176

1,183,784

668,326

Radio

39,304

39,648

114,012

118,521

461,628

360,824

1,297,796

786,847

Segment profit (2)

Television                                                                      

171,294

127,968

457,114

297,408

Radio

11,598

9,665

31,225

27,650

Corporate

(7,079)

(7,447)

(17,857)

(19,415)

175,813

130,186

470,482

305,643

Net income (loss) attributable to shareholders

66,719

(15,766)

162,746

127,786

Adjusted net income attributable to shareholders (2) (3)

70,141

52,950

176,544

116,378

Basic earnings (loss) per share

$0.33

$(0.10)

$0.81

$1.16

Adjusted basic earnings per share (2) (3)

$0.35

$0.34

$0.88

$1.05

Diluted earnings (loss) per share

$0.33

$(0.10)

$0.81

$1.15

Free cash flow (2)

82,527

67,947

212,458

126,768

(1)

Pro forma results reflect the inclusion of Shaw Media and the exclusion of Pay TV in the three and nine month period ended May 31, 2016. 

(2)

Segment profit, segment profit margin, adjusted net income attributable to shareholders, adjusted basic earnings per share, and free cash flow do not have standardized meanings prescribed by IFRS. The Company believes these non-IFRS measures are frequently used as key measures to evaluate performance. For definitions and explanations, see discussion under the Key Performance Indicators section of the Fiscal 2017 Report to Shareholders.

(3)

For the three months ended May 31, 2017, adjusted net income attributable to shareholders excludes business acquisition, integration and restructuring charges of $4.6 million ($0.02 per share). For the nine months ended May 31, 2017, adjusted net income attributable to shareholders excludes business acquisition, integration and restructuring charges of $18.7 million ($0.07 per share). For the three months ended May 31, 2016, adjusted net income attributable to shareholders excludes business acquisition, integration and restructuring charges of $29.3 million ($0.15 per share) and debt refinancing costs of $61.2 million ($0.29 per share). For the nine months ended May 31, 2016, adjusted net income attributable to shareholders represents net income attributable to shareholders adjusted to include amortization of disposed Pay TV programming assets of $15.6 million ($0.11 per share) and excludes business acquisition, integration and restructuring charges of $37.6 million ($0.29 per share), a gain on the disposal of the Pay TV disposal group of $86.2 million ($0.70 per share) and debt refinancing costs of $61.2 million ($0.41 per share).

Consolidated Results from Operations

Consolidated revenues for the three months ended May 31, 2017 were $461.6 million, an increase of 28% from $360.8 million last year. Consolidated segment profit was $175.8 million, up 35% from $130.2 million last year. Net income attributable to shareholders for the quarter ended May 31, 2017 was $66.7 million ($0.33 per share basic and diluted), as compared to a net loss of $15.8 million ($0.10 loss per share basic and diluted) last year. Net income attributable to shareholders for the third quarter of fiscal 2017 includes business acquisition, integration and restructuring costs of $4.6 million ($0.02 per share). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $70.1 million ($0.35 per share basic) in the quarter. Net loss attributable to shareholders for the prior year quarter includes business acquisition, integration and restructuring costs of $29.3 million ($0.15 per share) and debt refinancing costs of $61.2 million ($0.29 per share). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of $53.0 million ($0.34 per share basic) for the prior year quarter.

Consolidated revenues for the nine months ended May 31, 2017 were $1,297.8 million, up 65% from $786.8 million last year and consolidated segment profit was $470.5 million, up 54% from $305.6 million last year. Net income attributable to shareholders for the nine months ended May 31, 2017 was $162.7 million ($0.81 per share), compared to $127.8 million ($1.16 per share) last year. Net income attributable to shareholders for the nine months ended May 31, 2017, includes business acquisition, integration and restructuring costs of $18.7 million ($0.07 per share). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $176.5 million ($0.88 per share basic) for the current fiscal year-to-date. Net income attributable to shareholders for the nine months ended May 31, 2016 includes business acquisition, integration and restructuring costs of $37.6 million ($0.29 per share), debt refinancing costs of $61.2 million ($0.41 per share), a gain relating to the discontinuation of the Pay Television business and the disposal of certain assets of $86.2 million ($0.70 per share), and excludes amortization of disposed of Pay Television program and film rights of $15.6 million ($0.11 per share). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of $116.4 million ($1.05 per share) for the prior fiscal year-to-date.

Commencing April 1, 2016, 100% of the operating results of Shaw Media Inc. (“Shaw Media”), as well as its assets and liabilities, were fully consolidated as a business combination in accordance with IFRS 3 – Business Combinations and, as a result, Shaw Media was accounted for by applying the acquisition method as of that date. Shaw Media was reported as part of the Television segment as of April 1, 2016 (further discussion is provided in note 27 of the Company’s audited annual consolidated financial statements for the year ended August 31, 2016).

In addition, for fiscal 2016, certain of Corus’ Pay Television business’ (“Pay TV”) assets and liabilities were reclassified as held for disposal effective November 19, 2015 as a consequence of meeting the definition of assets held for sale under IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. The disposal group, Pay TV, did not qualify for discontinued operations presentation and as a result, its operating results remained in continuing operations in the consolidated statement of income and comprehensive income for the year ended August 31, 2016. However, intangible assets classified as held for disposal ceased being amortized effective November 19, 2015 and as a consequence, amortization of program and film rights in the Television segment for the nine months ended May 31, 2016 was lower by $15.6 million, than it would have been had amortization on these assets not ceased. On February 29, 2016, the Pay TV disposition was completed and the related proceeds and a gain associated with this disposal group was recognized (further discussion is provided in note 27 of the Company’s audited annual consolidated financial statements for the year ended August 31, 2016).

These transactions contributed to the significant year-over-year variances in the consolidated operating results for the three and nine months ended May 31, 2017, as the prior year includes the operating results of the Pay TV business up to the end of the second quarter of fiscal 2016 and only includes the operating results of Shaw Media for two months of the third quarter of fiscal 2016. In the prior year’s quarter, Shaw Media generated revenues and segment profit of $275.4 million and $78.8 million, respectively. On a pro forma basis, including Shaw Media for the full three months in the third quarter of last year, for the three months ended May 31, 2017 total revenues increased 3%, while segment profit increased 14% compared to the prior year. Segment profit margin of 38% in the third quarter of fiscal 2017 was up from 36% in the prior year (as reported) and up from 34% on a pro forma basis. In the nine months ended May 31, 2016, Shaw Media generated revenues and segment profit of $797.4 million and $248.1 million, respectively, while Pay TV generated revenues and segment profit of $67.8 million and $49.3 million, respectively. On a pro forma basis, including Shaw Media and excluding Pay TV for the same period last year, for the nine months ended May 31, 2017 total revenues declined 2%, while segment profit increased 5% from the prior year. Segment profit margin of 36% for the nine months ended May 31, 2017 was down from 39% in the prior year (as reported) and up from 34% on a pro forma basis.

Operational Results – Highlights

Television

  • Segment revenues increased 31% in Q3 2017 and 77% for the year-to-date [up 3% on a pro forma basis(1) for the quarter and down 2% year-to-date(1)]
  • Advertising revenues increased 33% in Q3 2017 and 130% for the year-to-date [flat on a pro forma basis(1) for the quarter and down 4% year-to-date(1)]
  • Subscriber revenues increased 26% in Q3 2017 and 37% for the year-to-date [up 4% on a pro forma basis(1) for both the quarter and year-to-date]
  • Merchandising, distribution and other revenues increased 47% in Q3 2017 and decreased 13% for the year-to-date [up 44% on a pro forma basis(1) and down 16% year-to-date(1)]
  • Segment profit(2) increased 34% in Q3 2017 and 54% for the year-to-date [up 13% on a pro forma basis(1) and up 4% year-to-date(1)]
  • Segment profit margin(2) of 41% in Q3 2017 and 39% for the year-to-date, compared to 40% and 45%, respectively, in the prior year comparable periods [37% for the quarter and 36% year-to-date on a pro forma basis(1)]

Radio

  • Segment revenues were down 1% in Q3 2017 and decreased 4% for the year-to-date
  • Advertising revenues were flat in Q3 2017 and decreased 3% for the year-to-date
  • Segment profit(1) increased 20% in Q3 2017 and 13% for the year-to-date
  • Segment profit margin(1) of 30% in Q3 2017 and 27% for the year-to-date, compared to 24% and 23%, respectively, in the prior year comparable periods

Corporate

  • Reduction of net debt to segment profit leverage to 3.5 times
  • Consolidated segment profit margin expansion in Q3 to 38%, up 400 basis points from 34% in the prior year, on a proforma basis

(1) 

Pro forma results reflect the inclusion of Shaw Media and the exclusion of Pay TV in the three months and year-to-date ended May 31, 2016

(2) 

Segment profit and segment profit margin do not have standardized meanings prescribed by IFRS. The Company reports on these because they are key measures used to evaluate performance. For definitions and explanations, see discussion under the Key Performance Indicators section of the 2017 Report to Shareholders.

Corus Entertainment Inc. reports in Canadian dollars.

The unaudited consolidated financial statements and accompanying notes for the three and nine months ended May 31, 2017 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 June 27, 2017 at 8:00 a.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 1.416.981.9013 and for North America is 1.800.786.0540. More information can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

Use of Non-IFRS Financial Measures

This press release includes the non-IFRS 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 (“IFRS”) and may be different from non-IFRS measures used by other companies. In addition, these non-IFRS measures are not based on any comprehensive set of accounting rules or principles.

Non-IFRS financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. 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-IFRS financial measures are meant to supplement, and to be viewed in conjunction with, IFRS financial results. A reconciliation of the Company’s non-IFRS 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 other should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise required by applicable securities laws, Corus disclaims 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. (TSX: CJR.B) is a leading media and content company that creates and delivers high quality brands and content across platforms for audiences around the world. The company’s portfolio of multimedia offerings encompasses 45 specialty television services, 39 radio stations, 15 conventional television stations, a global content business, digital assets, live events, children’s book publishing, animation software, technology and media services. The Corus roster of premium brands include Global Television, W Network, OWN: Oprah Winfrey Network Canada, HGTV Canada, Food Network Canada, HISTORY®, Showcase, National Geographic, Q107, CKNW, Fresh Radio, Disney Channel Canada, YTV and Nickelodeon Canada. Visit Corus at www.corusent.com.

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at May 31,

As at August 31,

(unaudited – in thousands of Canadian dollars)

2017

2016

ASSETS

Current

Cash and cash equivalents

78,011

71,363

Accounts receivable

485,820

379,861

Prepaid expenses and other assets

22,921

18,835

Total current assets

586,752

470,059

Tax credits receivable

17,293

19,860

Investments and other assets

51,966

46,759

Property, plant and equipment

258,211

282,105

Program rights

687,892

682,268

Film investments

46,101

45,164

Intangibles

2,053,339

2,076,237

Goodwill

2,387,652

2,390,652

Deferred income tax assets

80,334

80,281

6,169,540

6,093,385

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current

Accounts payable and accrued liabilities

482,513

393,367

Current portion of long-term debt

158,125

115,000

Provisions

15,737

21,390

Income taxes payable

22,641

1,982

Total current liabilities

679,016

531,739

 

Long-term debt

 

1,957,083

 

2,081,020

Other long-term liabilities

449,372

530,767

Provisions

11,124

8,905

Deferred income tax liabilities

487,739

464,607

Total liabilities

3,584,334

3,617,038

 

SHAREHOLDERS’ EQUITY

Share capital

2,260,779

2,168,543

Contributed surplus

11,076

10,444

Retained earnings

146,790

142,499

Accumulated other comprehensive income (loss)

6,627

(3,569)

Total equity attributable to shareholders

2,425,272

2,317,917

Equity attributable to non-controlling interest

159,934

158,430

Total shareholders’ equity

2,585,206

2,476,347

6,169,540

6,093,385

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)

2017

2016

2017

2016

Revenues

461,628

360,824

1,297,796

786,847

Direct cost of sales, general and administrative expenses

285,815

230,638

827,314

481,204

Depreciation and amortization

23,390

18,776

68,943

40,384

Interest expense

39,918

33,697

118,595

71,074

Debt refinancing

61,248

61,248

Business acquisition, integration and restructuring costs

4,638

29,264

18,718

37,639

Gain on disposition

(86,151)

Other (income) expense, net

4,626

(2,018)

7,521

7,036

Income (loss) before income taxes

103,241

(10,781)

256,705

174,413

Income tax expense

27,551

120

68,330

39,357

Net income (loss) for the period

75,690

(10,901)

188,375

135,056

Net income (loss) attributable to:

Shareholders

66,719

(15,766)

162,746

127,786

Non-controlling interest

8,971

4,865

25,629

7,270

75,690

(10,901)

188,375

135,056

Earnings (loss) per share attributable to shareholders:

Basic

$0.33

$(0.10)

$0.81

$1.16

Diluted

$0.33

$(0.10)

$0.81

$1.15

Net income (loss) for the period

75,690

(10,901)

188,375

135,056

Other comprehensive income (loss), net of income taxes:

Items that may be reclassified subsequently to income:

Unrealized foreign currency translation adjustment

191

(527)

404

(61)

Unrealized change in fair value of available-for-sale investments

(271)

114

(271)

(10)

Unrealized change in fair value of cash flow hedges

(3,253)

(5,527)

10,063

(5,208)

Actuarial gain (loss) on employee post-employment benefits

(3,756)

1,970

9,309

1,970

(7,089)

(3,970)

19,505

(3,309)

Comprehensive income (loss) for the period

68,601

(14,871)

207,880

131,747

Comprehensive income (loss) attributable to:

Shareholders

59,630

(19,736)

182,251

124,477

Non-controlling interest

8,971

4,865

25,629

7,270

68,601

(14,871)

207,880

131,747

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, 2016

2,168,543

10,444

142,499

(3,569)

2,317,917

158,430

2,476,347

Comprehensive income

162,746

19,505

182,251

25,629

207,880

Dividends declared

(172,264)

(172,264)

(27,125)

(199,389)

Issuance of shares under dividend reinvestment plan

 

92,236

 

 

 

 

92,236

 

 

92,236

Actuarial gain on post-

retirement benefit plans

 

 

 

9,309

 

(9,309)

 

 

 

Share-based compensation expense

 

 

632

 

 

 

632

 

 

632

Reallocation of equity interest

4,500

4,500

3,000

7,500

At May 31, 2017

2,260,779

11,076

146,790

6,627

2,425,272

159,934

2,585,206

At August 31, 2015

994,571

9,471

191,182

7,353

1,202,577

17,334

1,219,911

Comprehensive income

127,786

(3,309)

124,477

7,270

131,747

Dividends declared

(115,152)

(115,152)

(13,002)

(128,154)

Issuance of shares under public

equity offering

 

279,762

 

 

 

 

279,762

 

 

279,762

Issuance of shares to related party

 

833,541

 

 

 

 

833,541

 

 

833,541

Existing non-controlling ownership interest from acquisition

 

 

 

 

 

 

 

 

 

 

 

 

147,656

 

 

147,656

Issuance of shares under dividend reinvestment plan

 

30,292

 

 

 

 

30,292

 

 

30,292

Actuarial gain on post-

retirement benefit plans

 

 

 

1,970

 

(1,970)

 

 

 

Share-based compensation expense

669

669

669

At May 31, 2016

2,138,166

10,140

205,786

2,074

2,356,166

159,258

2,515,424

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

 Nine months ended

May 31,

 May 31,

(unaudited – in thousands of Canadian dollars)

2017

2016

2017

2016

OPERATING ACTIVITIES

Net income (loss) for the period

75,690

(10,901)

188,375

135,056

Adjustments to reconcile net income (loss) to cash flow from operations:

Amortization of program rights

136,598

100,533

391,009

198,786

Amortization of film investments

7,815

6,346

16,777

13,890

Depreciation and amortization

23,390

18,776

68,943

40,384

Deferred income taxes

8,584

(10,450)

15,798

(22,357)

Share-based compensation expense

178

213

632

669

Imputed interest

13,442

11,675

39,195

32,906

Debt refinancing costs

61,248

61,248

Gain on disposition

(86,151)

Payment of program rights

(132,557)

(103,274)

(375,919)

(215,788)

Net additions to film investments

(11,106)

(13,021)

(17,534)

(31,702)

CRTC benefit payments

(5,609)

(4,247)

(17,581)

(8,527)

Other

893

1,447

2,235

4,143

Cash flow from operations

117,318

58,345

311,930

122,557

Net change in non-cash working capital balances related to operations

(32,646)

5,420

(102,911)

4,657

Cash provided by operating activities

84,672

63,765

209,019

127,214

INVESTING ACTIVITIES

Additions to property, plant and equipment

(2,160)

(4,100)

(13,567)

(10,956)

Net proceeds from disposition

209,474

Business combinations, net of acquired cash

3,000

(1,836,847)

3,000

(1,839,323)

Proceeds from disposition of non-controlling interest

5,250

1,684

Net cash flows for intangibles, investments and other assets

(383)

(4,080)

(4,741)

(11,231)

Cash provided by (used in) investing activities

457

(1,845,027)

(10,058)

(1,650,352)

 

FINANCING ACTIVITIES

Increase (decrease) in bank loans

(28,144)

2,176,029

(85,616)

1,987,295

Redemption of notes

(550,000)

(550,000)

Debt refinancing costs

(55,671)

(55,671)

Financing fees

(20,167)

(23,595)

Share subscription net of issuance costs

276,529

276,529

Dividends paid

(25,716)

(24,453)

(78,600)

(64,569)

Dividends paid to non-controlling interest

(8,540)

(7,853)

(27,125)

(13,002)

Other

(495)

(964)

(972)

(3,634)

Cash provided by (used in) financing activities

(62,895)

1,793,450

(192,313)

1,553,353

 

Net change in cash and cash equivalents during the period

 

22,234

 

12,188

 

6,648

 

30,215

Cash and cash equivalents, beginning of the period

55,777

55,449

71,363

37,422

Cash and cash equivalents, end of the period

78,011

67,637

78,011

67,637

CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION

(unaudited – in thousands of Canadian dollars)

Three months ended May 31, 2017

Television

Radio

Corporate

Consolidated

Revenues

422,324

39,304

461,628

Direct cost of sales, general and administrative expenses

251,030

27,706

7,079

285,815

Segment profit (loss)(1)

171,294

11,598

(7,079)

175,813

Depreciation and amortization

23,390

Interest expense

39,918

Business acquisition, integration and restructuring costs

4,638

Other expense, net

4,626

Income before income taxes

103,241

 

Three months ended May 31, 2016

Television

Radio

Corporate

Consolidated

Revenues

321,176

39,648

360,824

Direct cost of sales, general and administrative expenses

193,208

29,983

7,447

230,638

Segment profit (loss)(1)

127,968

9,665

(7,447)

130,186

Depreciation and amortization

18,776

Interest expense

33,697

Debt refinancing costs

61,248

Business acquisition, integration and restructuring costs

29,264

Other income, net

(2,018)

Income before income taxes

(10,781)

 

Nine months ended May 31, 2017

Television

Radio

Corporate

Consolidated

Revenues

1,183,784

114,012

1,297,796

Direct cost of sales, general and administrative expenses

726,670

82,787

17,857

827,314

Segment profit (loss)(1)

457,114

31,225

(17,857)

470,482

Depreciation and amortization

68,943

Interest expense

118,595

Business acquisition, integration and restructuring costs

18,718

Other expense, net

7,521

Income before income taxes

256,705

(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 2017 Report to Shareholders.

Nine months ended May 31, 2016

(unaudited – in thousands of Canadian dollars)

Television

Radio

Corporate

Consolidated

Revenues

668,326

118,521

786,847

Direct cost of sales, general and administrative expenses

370,918

90,871

19,415

481,204

Segment profit (loss)(1)

297,408

27,650

(19,415)

305,643

Depreciation and amortization

40,384

Interest expense

71,074

Gain on disposition

(86,151)

Debt refinancing costs

61,248

Business acquisition, integration and restructuring costs

37,639

Other expense, net

7,036

Income before income taxes

174,413

(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 2017 Report to Shareholders.

REVENUES BY TYPE

Three months ended

 Nine months ended

May 31,

May 31,

(unaudited – in thousands of Canadian dollars)

2017

2016

2017

2016

Advertising

304,550

238,895

853,901

435,568

Subscriber fees

127,539

100,949

379,556

277,549

Merchandising, distribution and other

29,539

20,980

64,339

73,730

461,628

360,824

1,297,796

786,847

NON-IFRS FINANCIAL MEASURES

Adjusted segment profit

Reported segment profit

175,813

130,186

470,482

305,643

Adjustments:

Amortization not taken on Pay TV assets disposed of

(15,585)

Adjusted segment profit

175,813

130,186

470,482

290,058

Adjusted Net Income Attributable to Shareholders

Reported net income (loss) attributable to shareholders

66,719

(15,766)

162,746

127,786

Adjustments, net of income tax:

Gain on disposal of Pay TV assets

(76,631)

Amortization of Pay TV assets disposed of

(11,455)

Business acquisition, integration and restructuring costs

3,422

23,699

13,798

31,661

Debt refinancing costs

45,017

45,017

Adjusted net income attributable to shareholders

70,141

52,950

176,544

116,378

Basic earnings (loss) per share

$0.33

$(0.10)

$0.81

$1.16

Adjustments, net of income tax:

Gain on disposal of Pay TV assets

(0.70)

Amortization of Pay TV assets disposed of

(0.11)

Business acquisition, integration and restructuring costs

0.02

0.15

0.07

0.29

Debt refinancing costs

0.29

0.41

Adjusted basic earnings per share

$0.35

$0.34

$0.88

$1.03

Three months ended

 Nine months ended

May 31,

 May 31,

(unaudited – in thousands of Canadian dollars)

2017

2016

2017

2016

Free cash flow

Cash provided by (used in):

Operating activities

84,672

63,765

209,019

127,214

Investing activities

457

(1,845,027)

(10,058)

(1,650,352)

85,129

(1,781,262)

198,961

(1,523,138)

Add back: cash provided from (used for) business combinations and strategic investments (1)(2)

(2,602)

1,849,209

13,497

1,859,380

Deduct: net proceeds from disposition

(209,474)

Free cash flow

82,527

67,947

212,458

126,768

(1) Strategic investments are comprised of investments in venture funds and associated companies.

(2) Adjusted to remove the impact of disposing the Pay TV business

SOURCE Corus Entertainment Inc.

Related Links

www.corusent.com