• $52 million in free cash flow*, up 43%
• Adjusted net income* up 17%
• Net debt to segment profit target achieved
• Double-digit segment profit growth in specialty television
• Ontario and Quebec Radio outperform market growth
• Positive cash from Nelvana on reduced slate

(October 26, 2004 – Toronto, Canada) Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced fourth quarter and year-end results. The fourth quarter was highlighted by strong net income growth. Full year results included significant growth in free cash flow, a 17% increase in adjusted net income for the year and revenue growth in both Radio and Television divisions.

“We had solid performance in our television division and in most of our radio station clusters. Largely as a result of the non-cash write-down at Nelvana in the third quarter, our results in fiscal 2004 were below our expectations and guidance for segment profit growth but our free cash flow and net debt reduction exceeded our guidance,” said John Cassaday, President and CEO of Corus Entertainment. “Exclusive of the write-down, we posted record segment profit for the year. We are confident Nelvana will be a profit contributor for the future. We continue to operate the division on a cash neutral basis and we are still on track to reduce our production costs by 25% over a three year period.”

Fourth Quarter Results

Consolidated revenue for the fourth quarter ending August 31, 2004 was $163.0 million, down 7% from $175.1 million a year ago. Increased revenues in the Television and Radio divisions were offset by lower revenues in the quarter from the Content division as a result of cyclical nature for the Branded Consumer Products business. Consolidated segment profit for the quarter grew to $42.8 million from $41.7 million last year. Net income for the fourth quarter was $14.0 million ($0.33 per share) up 13% from $12.4 million ($0.29 per share) last year Corus Television revenues for the fourth quarter were up 4% to $78.3 million from $75.2 million last year, driven by strong subscriber revenue growth of 5% as well as advertising revenue growth of 2%. Quarterly segment profit in the Television divisions was down slightly to $28.7 million from $29.3 million last year. This was largely attributed to increases in operating expenses associated with increased programming expenditures in the quarter. However, on a full-year basis, Television once again finished the year with significantly higher segment profit and segment margin.

Corus Radio delivered fourth-quarter revenue growth of 1% to $58.3 million from $57.7 million last year, despite ongoing competitive pressures in western Canada. Segment profit in the quarter was $16.2 million, down only slightly from $16.6 million in the previous year. Increased operating, general and administrative expenses in the quarter reflect the investment in programming on several newly formatted stations which contributed to strong performances in the summer BBM measurements.

Content division revenues in the quarter were $27.7 million, down from $44.1 million in the previous year. The decline was largely the result of reduced merchandising revenues. In the previous year, sales were driven by the international launch of Beyblade in the fourth quarter. Segment profit in the Content division for the fourth quarter was $0.1 million, improving on last year’s fourth quarter loss of $0.9 million.

Full Year Results

Fiscal 2004 consolidated revenues were $666.8 million, up 4% from $643.9 million in the previous year, reflecting revenue growth in the core radio and television businesses. Consolidated segment profit for the year was $90.4 million. Excluding the non-cash write-down of film investments recorded in the third quarter and the required expensing of stock options, segment profit was $176.7 million, up 7% over $165.3 million in the prior year. Net loss for the year was $23.1 million ($0.54 per share), down from income of $40.0 million ($0.94 per share) last year. Adjusted net income and adjusted basic EPS for the year, which excludes various items not indicative of the Company’s core operating results, were $55.0 million and $1.29 per share compared to $47.1 million and $1.10 per share last year. See Appendix A for a reconciliation of adjusted net income and adjusted basic EPS.

Corus Television continued to benefit from impressive audience growth for its specialty and Pay-TV assets in 2004. Movie Central, Corus’ western-based pay television service, finished the year with 707,000 subscribers, up 7% since August 31, 2003. Advertising revenues grew by 13% in the year, driven by outstanding audience growth for W Network and CMT and continued market leadership by our kids’ television services during the year. Overall, television revenues for the year grew 8% to $332.3 million. Television segment profit grew 10% to $125.1 million from $113.4 million in the previous year. Television’s segment profit margin for the year was 38%, up from 37% last year.

Year-end results for Corus Radio reflected continued strong performance from the Ontario and Quebec regions which outperformed the market growth during the year according to the Trans-Canada Radio Advertising by Market (“TRAM”) report for the year ending August 31, 2004. This helped to offset weaker results from the western regions as the Company made changes to address competitive challenges in key markets. Increased investments in programming, marketing and promotion have positioned the stations well in their markets with both listeners and advertisers. Radio revenues in the year grew 1% to $227.9 million. Segment profit was up 3% to $60.0 million and segment profit margin remained unchanged at 26%.

The Content division delivered revenues for the year of $112.6 million, down 3% from $116.3 million in the previous year. As a result of a planned decrease in production and distribution revenues declined by 11%. In 2004, Nelvana delivered 121 episodes and three direct-to-video features, compared to 140 episodes and two features in 2003. The Branded Consumer Products business grew revenues in the year by 9%, largely driven by the continued success of the Beyblade brand. In fiscal 2004, the production and distribution business continued to be challenged by a difficult library market and lower U.S. dollar which resulted in an $85.0 million non-cash write-down of film investments during the year. Segment loss for the year was $83.7 million, down from a profit of $3.2 million in the previous year. Excluding the write-down, segment profit for the year was $1.3 million.

“The Company has shown impressive growth this year in its core specialty television assets while making solid progress in identifying and addressing challenges in the radio and content businesses,” added Heather Shaw, Executive Chair of Corus Entertainment. “With the write-downs at Nelvana behind us and a growing market for content across a variety of new distribution platforms, we believe that we have the right assets and the right business model in place to take advantage of the ever-changing opportunities in the media and entertainment sector.”

Corus Entertainment Inc. is a Canadian-based media and entertainment company. Corus is a market leader in both specialty TV and Radio. Corus also owns Nelvana Limited, a leading international producer and distributor of children’s programming and products. The company’s other interests include publishing, television broadcasting and advertising services. A publicly traded company, Corus is listed on the Toronto (CJR.B) and New York (CJR) Exchanges. Corus’ Web site can be found at

Corus Entertainment reports in Canadian dollars.
Supplemental Earnings Measures

In addition to providing earnings measures in accordance with Canadian and U.S. Generally Accepted Accounting Principles (“GAAP”), the Company presents certain supplemental earnings measures and financial information. These are segment profit and segment margin, free cash flow, adjusted net income and adjusted earnings per share. These measures and financial information do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.

Free Cash Flow
Free Cash Flow is calculated as cash provided by (used in) operating activities less cash provided by (used in investing activities as reported in the consolidated statement of cash flows. Free cash flow measures the Company’s ability to repay debt, finance the business and pay dividends.

Adjusted Net Income and Adjusted Earnings Per Share
Adjusted net income and adjusted earnings per share is provided to assist investors in comparing results between periods after giving effect to items not considered to be in the ordinary course of business and accounting policy changes. A reconciliation of net income and basic earnings per share with adjusted net income and adjusted basic earnings per share is provided in Appendix A. These measures should not be considered in isolation of or as a substitute for net income and basic earnings per share as a measure of the Company’s profitability.

Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release may constitute forward-looking statements and are subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current 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; and, changes in accounting standards. Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. 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.


For further information, please contact:

John Cassaday
President and Chief Executive Officer
Corus Entertainment Inc.
(416) 642-3770

Tom Peddie
Senior Vice President & Chief Financial Officer
Corus Entertainment Inc.
(416) 642-3780

Kerry Morgan
Vice President, Communications
Corus Entertainment Inc.
(416) 642-3792

Full financial details are available on the Corus Entertainment Web site at under Investor Information.




Net income for the year ended August 31, 2004 and 2003 reflect a number of items not indicative of the Company’s core operating results and ongoing operations which affect the comparability of the Company’s historical and current financial performance and the Company’s prospects for the future.

These items include:

• Change in Ontario tax rates in fiscal 2004
• Write-down of investment in film in fiscal 2004
• Losses on sale of investments in fiscal 2003
• Restructuring charges in fiscal 2003
• Asset write-downs in fiscal 2003

Comparable results, adjusted to exclude the above items are as follows: >

Year ended
(thousands of Canadian dollars)
August 31, 2004


August 31, 2004


Net income (loss), as reported (23,137) 40,021
Change in Ontario tax rates 60,308
Write-down of investment in film, after-tax
Loss on sale of investments, after-tax 1,536
Restructuring charge, after-tax 3,480
Asset write-downs, after-tax 2,030
Adjusted net income 54,971 47,067
Year ended
(dollars per share)
August 31, 2004


Basic earnings (loss) per share, as reported (0.54) 0.94
Change in Ontario tax rates 0.42
Write-down of investment in film, after-tax 1.41
Loss on sale of investments, after-tax 0.03
Restructuring charge, after-tax 0.08
Asset write-downs, after-tax 0.05
Adjusted basic earnings per share 1.29 1.10