Corus Entertainment Inc.

Good morning. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Course Entertainment Q3 2026 Analyst and Investor Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one in your telephone keypad. If you would like to withdraw your question, please press star, too. Thank you. As a reminder, this call is being recorded. I will now turn the call over to Mr. John Gossling, CEO of Chorus Entertainment. Mr. Gossling, you may begin your conference.

Thanks very much, Joelle, and good morning, everyone. Certainly nice to be back in our regularly scheduled time slot at 8 a.m. I'm John Gossling, Chief Executive Officer. Welcome to our fiscal 2026 third quarter earnings call for Chorus Entertainment. I'd like to remind everyone that we have slides that accompany today's call. You can find them on our website at www.courseent.com under the investor relations dash events and presentations section. I'll start off by drawing your attention to our standard cautionary statement, which can be found on slide two. We note that forward-looking statements may be made during this call. Actual results could differ materially from forecast projections or conclusions in these statements. We'd also like to remind those on our call today that in addition to disclosing results in accordance with IFRS, CORUS also provides supplementary non-IFRS or non-GAAP measures as a method of evaluating the company's performance and to provide a better understanding of how management views the company's performance. Today, we will be referring to certain non-GAAP measures in our remarks. Additional information on these non-GAAP measures, the company's reported results, and factors and assumptions related to forward-looking information can be found in our third quarter 2026 report shareholders and the 2025 annual report, all of which can be found on CDR Plus or on the investor relations dash financial reports section of our website. Joining me on today's call are Jennifer Lee, who is our chief administrative and legal officer, as well as senior finance team members Doug Spence, and Ann Duggan, all of whom are outlined on slide three. I'll start on slide four with a brief update on the recapitalization transaction, which is currently making its way through the CRTC approval process with the written consultation period closing late yesterday. We do not yet have any indication of timing to close, but we'll provide an update as more information becomes available. In the meantime, our focus remains on positioning Chorus for success in our upcoming broadcast season. A few weeks ago, we hosted our annual Upfront, which showcased another lineup of very strong programming for the 2026-2027 broadcast year and highlighted the momentum and new opportunities in our business for our clients and partners, and I'll take you through some of that now. Over to slide five. Looking back to the 25-26 season, Global has delivered success on multiple fronts this year, driven by audience momentum, scheduled depth, and the continued strength of Global News. Our balanced mix of established hits and compelling new programming supported strong primetime performance and reinforced Global's value to advertisers across both linear and streaming platforms. We're especially pleased to head into the upcoming fall season from this position of great strength. Global's exciting schedule is anchored by proven franchises with broad audience appeal, and we've secured 16.5 hours of primetime simulcast for global programming this fall. Hits include powerhouse performers like the number one program in Canada, Survivor, the number one drama, 911, and the number one new spring series, CIA, alongside a robust lineup that has more top 20 shows than any other Canadian broadcaster. Fan favorite and global original, Privatized West Coast, is also returning next season with a fresh new perspective on a proven franchise. Our lineup also built on one of television's most enduring brands, NCIS, and we'll see the return of NCIS, NCIS Origins, and NCIS Sydney, while expanding the franchise with all-new NCIS New York. We will also have highly anticipated new series in our fall slate, built around big talent, both storytelling and broad audience appeal, with the arrival of Cupertino from the creators of The Good Wife and The Good Fight, and Eternally Yours from the creators of hit comedy Ghosts. Finally, I'm thrilled to share that Global News is the number one morning, noon, and national newscast in Canada. Global News remains a key differentiator and an important driver of audience engagement, reaching more than 16 million Canadians each month across linear and digital platforms. 91% of viewing to our linear news broadcast is watched live, underscoring the immediacy and appeal of news. Live tuning across Global News digital platforms also remains encouraging and is up 5% this spring. Now turning to slide six, Cork is set to deliver another leading fall lineup across specialty and stack TV. We expect to once again lead the way in Canada's entertainment specialty landscape with more top 20 entertainment specialty programs than any other broadcaster this past spring. W Network is the number one special entertainment station, while Home and Flavor are the country's top lifestyle brands. History Leads and Factual and W Showcase remain leading drama destinations. Together, these brands deliver many of the most-watched programs in the category and the kind of repeat viewing that strengthens the portfolio. Reflecting the depth and breadth that audiences expect from Chorus, this fall's slate includes stand-up titles such as Ted, the animated series, The Paper, exclusive homework programming, The Verbs, Top Chef Canada, and The Curse of Oak Island. At the same time, Home and Flavor continue to build brand momentum, pairing premium programming audiences so actively seek out with growing value for clients through meaningful contextual connections. We remain committed to homegrown talent and original Canadian storytelling, and we are very pleased to share our upcoming slate of 11 Canadian original titles across lifestyle, factual, and entertainment programming. Returning favorites include Halloween and Holiday Bake Shop, Beer Budget Reno, Rock Solid Bills, and House of Alley. New original series such as Love It or List It West, Property Pursuit, and Top Chef Canada, The Dessert Table, further expand successful Canadian-built franchises. As a unified streaming platform, Stack TV continues to offer compelling value by bringing together specialty brands, global television, and global news all in one place. Further, the global TV app extends digital access for authenticated traditional television subscriptions, as well as an enticing selection of free content for anyone to access. This past quarter, these flagship brands together delivered growth in user engagement, including for on-demand viewing, delivering an all-time high for the quarter and underscoring their momentum. For audiences, that means flexible access to premium content, while for partners, it creates meaningful engagement opportunities at scale. All right, over to slide seven, focused on growth areas that reflect how audiences are watching and how advertisers want to connect. For instance, Vivio is our new French language streaming platform created to serve French Canadians with flexible, on-demand access to relevant content. At launch, the platform offered nearly 2,000 hours of programming across established hits and curated selections. This is a prime example of how we are expanding our streaming portfolio in ways that align with audience behavior and viewing preferences and seek to broaden addressable audience markets. We're also responding to growing demand for advertising solutions that do more than place a message beside content. And Chorus is uniquely positioned to connect content, creators, commerce, experiences, and advertisers in one integrated offering, giving partners more ways to engage audiences in relevant and measurable ways. That approach is reflected in the expansion of The Morning Show, the number one Canadian news and lifestyle morning show. This fall, TMS2 will launch as an expanded daily weekday series hosted by Global Entertainment's Morgan Hoffman, with strong lead-ins from global news broadcasts. We're continually looking for ways to expand audiences and opportunities for our clients, both in terms of content and platforms. Wrapping up this broadcast year and looking already to the next, I'm excited about our new offerings, our audience momentum, and the tremendous programming we have lined up. With all that, I'll turn it over to Doug for an overview of the third quarter results.

Thank you, John. I'll start on slide eight. In our third quarter, lower TV advertising revenue combined with lower subscription revenue contributed to consolidated revenue of $249 million. a 16% decrease from the prior year. Our results were impacted by lower demand for linear TV in the broader advertising market, persistent macroeconomic factors and election spending in the prior year period. The lower subscription revenue reflects ongoing declines in the traditional linear subscription business as well as the reduced number of specialty channels in our portfolio compared to the prior year. The lower Q3 revenue was partially offset by a 7% decrease in direct cost of sales, general, and administrative expenses. Direct cost of sales were consistent with the prior year, driven by decreases in amortization of program rights and other costs of sales, offset by an increase in amortization of film investments. As we highlighted on our last earnings call, approximately one-third of the year-over-year reduction and amortization of program rights in Q2 was shifted into Q3 due to the Olympics-related delayed start of the winter-spring programming schedule. This was more than offset by savings in Canadian programming costs and the discontinuation of certain program rights related to the changes in our specialty television portfolio at the start of this year. The increase in amortization of film investments was due to a change in estimate of the recoverability of film tax credits in the previous year period. General and administrative expenses were meaningfully lower, down 16%, including a 12% decrease in employee costs and a 25% decrease in other G&A. The benefits of our ongoing cost containment program are reflected in these results. In addition, Reduced advertising and marketing costs, a decrease in certain fees and tariffs tied to revenue, and the receipt of funding to offset news production costs in the current year are important contributing factors. Consolidated segment profit was $29 million for the quarter, down 53%. The consolidated segment profit margin was 12% for the quarter compared to 21% last year. The net debt to segment profit ratio was 8.2 times compared to 6.01 times at the end of last year. At the end of our third quarter, we had approximately $57 million of cash and cash equivalents and $15 million available to be drawn under the revolving credit facility. The company currently has in place a waiver and standstill agreement with the lenders under the credit facility, which provides waivers of certain financial covenants, including the total debt to segment profit ratio and the cash flow to interest expense ratio through June 30th, 2026. Free cash flow of positive $6 million in Q3 was higher than the prior year, driven mainly by increased cash provided by working capital and reduced investment in program rights and film assets. I'll now move on to slide 9. TV segment revenue was $229 million for the third quarter, down 16% from the prior year. This was mainly due to declines in advertising and subscriber revenues, while other revenues remained consistent with the prior year. TV advertising revenue declined 20% to $120 million, with approximately 4% attributable to election spending in the prior year quarter. Subscriber revenue decreased 13% to $96 million. Normalizing for the sunset of five specialty networks in September 2025, subscriber revenue declined 9% compared to last year. Distribution, production, and other revenue was $13 million, up 2% in the quarter as a result of higher international distribution sales. TV segment expenses of $200 million, were down 6% from the prior year driven by 12% lower employee costs and a 24% decline in other general and administrative expenses, while direct costs of sales were consistent. Direct costs of sales reflects a decline in amortization of program rights of $4 million due to factors noted earlier. Offset by an increase in amortization of film investments attributable to the change in estimate in the previous year period. General and administrative expenses decreased $13 million as a result of ongoing cost containment measures, lower advertising and revenue-related costs, and the receipt of funding to offset news production costs, as described earlier. TV segment profit of $30 million, a 52% decrease from the prior year, primarily reflects the impact of lower revenue, partially offset by a significant decrease in expenses from ongoing cost reduction initiatives, as well as lower programming costs and other savings as described earlier. TV segment profit margin was 13% compared to 23% in the prior year quarter. Over to slide 10. Radio Segment revenue of $20 million for the quarter decreased 15% from the prior year due to lower advertising demand. In particular, in the prior year we benefited from the depth of NHL playoff runs by Western Canadian teams, as well as elections, which did not repeat this year. Radio Segment profit of $4 million was 20% lower in the quarter, reflecting the lower advertising demand, partially offset by ongoing cost reduction initiatives. Radio segment profit margin was 21% compared to 22% in the prior year quarter. I'll turn it over to Jen.