Newfoundland Capital : announces its financial results for the first quarter ending March 31, 2017

• Revenue of $35.7 million was $1.1 million or 3% lower than last year. The decrease was primarily due to revenue declines in the Alberta markets due to continued economic uncertainty in that region and declines in Ottawa due to downward pressure on advertising rates.
• Earnings before interest, taxes, depreciation and amortization ("EBITDA"(1)) of $7.0 million was $1.1 million or 14% lower than last year as a result of lower revenue.
• Profit for the period was $3.0 million, a decrease of $1.6 million or 35% compared to last year due to lower revenue and a higher provision for income taxes. Significant events

  • In April 2017, the Company announced it has entered into an agreement with Rogers Media to sell CISL-AM in Vancouver. The sale is subject to approval by the Canadian Radio-television and Telecommunications Commission ("CRTC").

  • Today the Company announced it has entered into an agreement to purchase three radio stations in Kamloops, British Columbia. The acquisition is subject to approval by the CRTC.

"The first quarter was challenging as our Company experienced revenue declines consistent with the overall radio industry" commented Rob Steele, President and Chief Executive Officer. "We believe that our quality product and keen focus on cost control will allow us to overcome some of this shortfall during the remainder of the year."

Financial Highlights - First Quarter

Three months ended March 31

(thousands of Canadian dollars, except share information) 2017 2016

Revenue

$ 35,734

36,879

EBITDA (1) 7,041 8,162

Profit 2,956 4,571

Earnings per share - basic 0.12 0.17

Earnings per share - diluted 0.11 0.16

Weighted average number of shares outstanding (in thousands) 25,57426,630

March 31 December 31

2017 2016

Share price, NCC.A (closing)

$ 9.84

9.76

Total assets 365,948 372,663

Long-term debt, including current portion 126,216 129,455

Shareholders' equity 154,259 151,155

(1) Refer to page 10 "Non-IFRS Accounting Measure"

MANAGEMENT'S DISCUSSION AND ANALYSIS

The purpose of the Management's Discussion and Analysis ("MD&A") is to provide readers with additional complementary information regarding the financial condition and results of operations for Newfoundland Capital Corporation Limited (the "Company") and should be read in conjunction with the unaudited condensed interim consolidated financial statements ("interim financial statements") and related notes for the periods ended March 31, 2017 and 2016, as well as the annual audited consolidated financial statements and related notes prepared in accordance with International Financial Reporting Standards ("IFRS") and the MD&A contained in the Company's 2016 Annual Report. The Company's first quarter 2017 interim financial statements and the accompanying notes have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB") and using the accounting policies described therein. These interim financial statements include the accounts of the Company and other entities in which the Company controls in accordance with IFRS 10, "Consolidated Financial Statements" and are reported in Canadian dollars. These documents along with the Company's Annual Information Form, its Management Proxy Circular dated March 9, 2017 and other public information are filed electronically with various securities commissions in Canada through the System for Electronic Document Analysis and Retrieval and can be accessed at www.sedar.com. This information is also available on the Company's website at www.ncc.ca.

The Board of Directors, upon recommendation of the Audit and Governance Committee, approved the content of this MD&A on May 10, 2017. Disclosure contained in this document is current to this date, unless otherwise stated.

Management's Discussion and Analysis of financial condition and results of operations contains forward-looking statements and forward-looking information within the meaning of Canadian provincial securities laws. These forward-looking statements are based on current expectations. The use of terminology such as "expect", "intend", "anticipate", "believe", "may", "will", "should", "would", "plan" and other similar terminology relate to, but are not limited to, objectives, goals, plans, strategies, intentions, outlook and estimates. By their very nature, these statements involve inherent risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from those expressed in such forward-looking statements. As a result, there is no guarantee that any forward-looking statements will materialize and readers are cautioned not to place undue reliance on these statements. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause our actual results to differ materially from our current expectations are discussed in detail in the Risks, Uncertainties and Opportunities section of this MD&A. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.

CORPORATE PROFILE

Newfoundland Capital Corporation Limited owns and operates Newcap Radio, which is one of Canada's leading radio broadcasters with 95 licences across Canada. The Company reaches millions of listeners each week through a variety of formats and is a recognized industry leader in radio programming, sales and networking. It is Canada's largest pure-play radio company, employing approximately 800 of the best radio professionals across the country. The Company's portfolio of radio assets includes 80 FM and 15 AM licences which can be heard throughout Canada. Most of the stations are globally accessible via the internet and various mobile device applications, allowing listeners the flexibility to tune in to the stations at anytime from anywhere. The shares of the Company trade on the Toronto Stock Exchange under the symbols NCC.A and NCC.B.

STRATEGY AND OBJECTIVES

The Company's long-term strategy is to maximize returns on existing operations and add new licences through business and licence acquisitions and through the Canadian Radio-television and Telecommunications Commission ("CRTC") licence application process.

The Company's day-to-day operating objective is to grow its existing operations by increasing advertising revenue and remaining focused on controlling discretionary costs to continuously improve EBITDA margins. The Company will continue to explore acquisition and expansion opportunities that fit with the Company's objectives. The Company's commitment to its talented employees, its customers, its listeners and to the communities it serves remains critical to its success.

CORPORATE DEVELOPMENTS

The following is a review of the key corporate developments which should be considered when reviewing the "Consolidated Financial Performance Review" section. The results of the launched stations have been included in the interim financial statements since their respective launch dates.

Recent Developments:

• May 2017 - the Company announced it had entered into an agreement to purchase three radio stations in Kamloops, British Columbia. The acquisition is subject to approval by the CRTC.

• April 2017 - the Company announced it had entered into an agreement to sell CISL-AM in Vancouver, British Columbia. The sale is subject to approval by the CRTC.

• January and February 2017 - rebranded all British Columbia, New Brunswick, and Nova Scotia country stations as New Country.

• January 2017 - launched a new FM licence in Hinton, Alberta.

• November 2016 - rebranded all Alberta country stations as "Real Country" except CFCW which will remain as its own brand as it is a well-known country brand in Alberta.

• May 2016 - launched a new FM licence in Clarenville, Newfoundland and Labrador.

• March 2016 - rebranded CKDQ in Drumheller to 910 CFCW, an extension of the Company's legendary CFCW brand, the voice of rural Alberta, which is a well-known country brand that is now available in nearly all of Alberta.

• February 2016 - rebranded CFXJ-FM in Toronto to 93.5 The Move, a rhythmic hot adult contemporary station targeting adults 25 to 44.

• February 2016 - rebranded CKUL-FM in Halifax to Mix 96.5, a hot adult contemporary station playing a variety of pop/rock hits from the 90s to now.

Consolidated Financial Results of Operations

(thousands of Canadian dollars, except percentages

Three months ended March 31

(1) EBITDA - Earnings before interest, taxes, depreciation and amortization - refer to page 10 "Non-IFRS Accounting Measure"

ANALYSIS OF CONSOLIDATED FINANCIAL RESULTS

A detailed analysis of the variations in revenue, operating expenses and EBITDA are included in the section entitled

Financial Review by Segment.

Revenue

In the quarter, consolidated revenue of $35.7 million was $1.1 million or 3% lower than last year due to lower revenue in the Broadcasting segment, particularly the Company's Alberta and Ottawa operations.

Operating expenses

Consolidated operating expenses of $28.7 million were consistent with the first quarter last year as lower costs in the broadcasting segment were offset by higher costs in the corporate and other segment.

EBITDA

Consolidated EBITDA in the quarter of $7.0 million was $1.1 million or 14% lower than last year. The decrease was primarily due to the lower revenue.

Accretion of other liabilities

Accretion of other liabilities arises from discounting Canadian Content Development ("CCD") commitments to reflect the fair value of the obligations. Accretion expense was lower than last year because of the payment of CCD commitments during 2016 which reduced the balance on which accretion was recorded.

Interest expense

Interest expense in the first quarter was $1.2 million, less than $0.1 million or 4% lower than the prior year. This variance relates primarily to fluctuations in the valuation of the Company's interest rate swap payable.

Other income

Other income consists of items that are not indicative of the Company's core operating results and should therefore not be used in the evaluation of the consolidated Company's performance. These include items such as realized and unrealized gains and losses on marketable securities, acquisition-related costs and impairment charges. Other income was less than $0.1 million in the quarter. In 2016, the Company recognized $0.2 million of other income which was a result of unrealized gains on marketable securities.

Provision for income taxes

The effective income tax rate was 37% in the quarter, higher than the statutory income tax rate of 31% as the Company recognized a deferred tax liability on an investment in a subsidiary which was held for disposal at the end of the quarter. This was partially offset by the subsidiary rate differential that arises from consolidated entities that are taxed in different jurisdictions with lower tax rates.

Profit

First quarter profit of $3.0 million was $1.6 million or 35% lower than the prior year primarily due to lower revenue and a higher provision for income taxes.

FINANCIAL REVIEW BY SEGMENT

Consolidated financial figures include the results of operations of the Company's two separately reported segments - Broadcasting and Corporate and Other. The Company provides information about segment revenue and segment EBITDA because these financial measures are used by its key decision makers in making operating decisions and evaluating performance. For additional information about the Company's segmented information, see note 11 of the Company's interim financial statements.

Broadcasting Segment

The broadcasting segment derives its revenue from the sale of broadcast advertising from its licences across the country. Advertising revenue can vary based on market and economic conditions, the audience share of a radio station, the quality of programming and the effectiveness of a company's team of sales professionals. Cash- generating units ("CGUs") within the broadcasting segment are managed and evaluated based on their revenue and EBITDA. The following summarizes the key operating results ofdd the broadcasting segment.