CJR.B Corus Entertainment Inc

• 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 /PRNewswire/- 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".

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

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.

SOURCE Corus Entertainment Inc.