CTV Inc. Releases Results for the Quarter ended November 30, 1999


	CTV Inc. Releases Results for the Quarter ended November 30, 1999 TORONTO,Jan. 18 2000 --CTV's income before interest, depreciation, amortization and income taxes (EBITDA) for the three months ended November 30, 1999, was $47,300,000, equal to EBITDA recorded in the same period last year. This was achieved despite a two percent revenue decline in the quarter compared to the same period last year, due to continuing control of costs resulting in reduced operating and administrative expenses. Total revenue for the three months was $151,590,000 compared to $154,939,000. The revenue softness was in conventional television, which was down four percent compared to the previous year's first quarter. This is in part due to the building strength of the specialty channel sector. All of the Company's specialty channels had significant percentage revenue increases during the quarter, however only CTV Newsnet and The Comedy Network are consolidated in the Company's results. Sportsnet and OLN are not consolidated, as the Company's interest in these channels is less than 50%. CTV's 68% interest in NetStar is also not consolidated as the transaction is still before the regulators. Ratings for the Company's conventional television stations improved strongly during the first quarter, achieving some of their best numbers in years. In the competitive Toronto-Hamilton market, CTV achieved a 15% improvement in the key 18 to 49 age group, making CTV number one in the Toronto market according to A.C. Nielsen. These ratings improvements reflect the break-out hit Who Wants to be a Millionaire, and the positive effect this show had on the rest of the schedule. Strong numbers for Ally McBeal, Law & Order, ER and Jeopardy were also achieved. New shows like The West Wing, Third Watch and Law & Order: Special Victims Unit are also delivering very promising results. This bodes well for revenue improvements in subsequent quarters of this fiscal year. EBITDA margin improved from 30.5% to 31.2% during the quarter. Net income for the three months was $14,135,000 compared to $16,316,000 last year. Higher interest expense arising from the NetStar transaction and the inclusion of the Company's share of CTV Sportsnet's loss for the period accounted for the decrease. CTV Sportsnet celebrated its first anniversary on October 9, 1999, having solidified its position as one of the highest rated specialty channels in Canada. The Company accounts for its interest in Sportsnet using the equity method and commenced recording its 40% share of Sportsnet's results September 1, 1999, after completion of the start-up period. Sportsnet is meeting operating expectations and is anticipated to break even in terms of cash flow next fiscal year. The Company's specialty channel interests, while barely two years old, are becoming enormous value creators. When NetStar is added, subject to regulatory approval, the combination of specialty and conventional television assets will be the finest in the country. Earnings per share were 24 cents, compared to 38 centes in the same period in the prior year. Weighted average shares outstanding for the period increased from 42,700,500 to 57,872,500 shares outstanding. Cash flow from operations per share was 70 cents compared to $1.00 last year. The Company is accounting for its investment in NetStar on an equity basis while the acquisition is proceeding through the regulatory process. If NetStar's results were consolidated with the Company's results, cash flow per share would have amounted to 88 cents during the first quarter. During December 1999, the Company presented its application to the CRTC at a public hearing to acquire a 68% controlling interest in NetStar Communications Inc. The Competition Bureau has advised the Company that it is reserving its final decision until the outcome of the CRTC proceedings. A decision on the Company's application is anticipated by early March. Also during December 1999, the Company announced the licencing of technology from Blue Zone Productions Ltd., of Vancouver, which will create an interactive and broadband Internet site for CTV news, expected to be operational by September, 2000, that will provide consumers with full motion video and news search capabilities, both in terms of text and video. During January 2000, Sportsnet and ExtendMedia launched ctvsportsnet.com, which provides high quality video streaming over the Internet as well as scores, statistics and standings. The site has e-commerce capabilities enabling visitors to purchase a variety of sports memorabilia, equipment and clothing as well as other products and services. The site complements CTV Sportsnet, providing viewers with a broadened entertainment experience and creating new marketing opportunities for the Company's customers. Ivan Fecan President and Chief Executive Officer << CTV INC. INTERIM FINANCIAL REPORT (unaudited) FOR THE THREE MONTHS ENDED NOVEMBER 30, 1999 (With Comparative Figures for 1998) ------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF INCOME THREE MONTHS ENDED NOVEMBER 30 --------------------- 1999 1998 ---- ---- Revenue: $ (thousands) $ Net airtime 140,695 145,826 Production, distribution and sundry 6,119 5,257 Subscriber 4,776 3,856 --------------------- Total Revenue 151,590 154,939 --------------------- Expenses: Programming and production 80,427 84,270 Selling and administrative 23,863 23,419 --------------------- Operating and administrative expenses 104,290 107,689 --------------------- Income before interest, depreciation, amortization, other and income taxes 47,300 47,250 Interest 7,787 4,520 Depreciation 6,786 6,901 Amortization 3,320 3,264 --------------------- Income before income taxes 29,407 32,565 Income taxes 14,332 15,987 --------------------- Income before the following 15,075 16,578 Equity in income of investees (650) (68) Minority interest (290) (194) --------------------- Net income 14,135 16,316 --------------------- --------------------- Weighted average of shares outstanding (000's) 57,873 42,701 Earning per share $ 0.24 $ 0.38 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS THREE MONTHS ENDED NOVEMBER 30 --------------------- 1999 1998 ---- ---- $ (thousands) $ Operating activities: Net income 14,135 16,316 Add (deduct) items not affecting cash: Depreciation, amortization and other 11,641 10,422 Equity in income of investees 650 68 Minority interest 290 194 Deferred income taxes 14,079 15,786 --------------------- Cash flow from operations 40,795 42,786 Net change in non-cash operating items (73,911) (86,588) --------------------- Cash provided by (used in) operating activities (33,116) (43,802) --------------------- Investing activities: Purchase of capital assets (3,715) (5,893) --------------------- Cash (used in) investing activities (3,715) (5,893) --------------------- Financing activities: Increase in long term bank indebtedness 36,831 49,695 --------------------- Cash provided by financing activities 36,831 49,695 --------------------- Net increase in current bank indebtedness during the period - - Current bank indebtedness, beginning of period - - --------------------- Current bank indebtedness, end of period - - --------------------- --------------------- Weighted average of shares outstanding (000's) 57,873 42,701 Cash flow from operations per share before net change in non-cash operating items $ 0.70 $ 1.00 ------------------------------------------------------------------------- >> -30- For further information: R.A. Fillingham, C.A., Executive Vice-President, Chief Financial Officer and Secretary, CTV Inc., Tel.: (416) 332-5020, Fax.: (416) 332-5022

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