Quebecor Media Inc. (TSX:QBR.A)(TSX:QBR.B)
HIGHLIGHTS SINCE END OF 2007
- Quebecor Media Inc. Q1 2008 revenues up $126.0 million (16.8%), year over
year, to $877.1 million.
- Operating income up $64.2 million (34.1%) to $252.4 million.
- Net income up $17.6 million (42.7%) to $58.8 million.
- Cable segment: operating income up $46.9 million (31.5%); quarter-over-quarter
net customer growth of 55,200 for cable telephone service, 32,100 for cable
Internet access, 14,100 for all cable television services combined (including
34,600 customer increase for illico Digital TV), and 4,200 activated phones for
wireless telephone service.
- Videotron Ltd. issues US$455.0 million aggregate principal amount of Senior Notes.
- Quebecor Media qualifies as new market entrant in spectrum auction for
Advanced Wireless Services (3G).
- Quebecor Media acquires Nurun Inc. Common Shares it did not already hold at
$4.75 per share, for a total cash consideration of $75.0 million.
Quebecor Media Inc. recorded revenues of $877.1 million in the first quarter of
2008, a $126.0 million (16.8%) increase. Revenue growth was strongest in the
following segments: Cable (up $71.8 million or 20.0%), reflecting continued
customer growth for all services; Newspapers ($47.1 million or 21.4%), due to
the impact of the acquisition of Osprey Media Income Fund ("Osprey Media") in
August 2007; and Broadcasting ($13.2 million or 14.1%) . Quebecor Media's
operating income was up $64.2 million (34.1%) to $252.4 million. Operating
income increased in the Cable segment ($46.9 million or 31.5%), due primarily to
customer growth, the Newspapers segment ($11.3 million or 32.8%), because of the
acquisition of Osprey Media, and the Broadcasting segment ($8.7 million).
"Quebecor Media's results showed robust growth in the first quarter of 2008,
with a 42.7% year-over-year increase in net income to $58.8 million," commented
Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor Inc.
"Once again, the excellent results were driven by sustained growth in the Cable
segment, which continued to register healthy customer increases in all its lines
of business. The Newspapers segment was boosted by the favourable impact of the
acquisition of Osprey Media, which closed in August 2007. The Broadcasting
segment also improved its revenues and operating income. Meanwhile, Quebecor
Media qualified as a new market entrant for the spectrum auction for Advanced
Wireless Services (3G), which begins on May 27, 2008. In the auction, Quebecor
Media intends to focus on the geographies it believes present attractive
prospects for its service offerings. This new communication platform promises to
be a growth driver for our Company."
Quebecor Media's net income was up $17.6 million (42.7%) to $58.8 million,
mainly because of the $64.2 million increase in operating income, which was
partially offset by an $8.2 million increase in the amortization charge and a
$20.0 million increase in financial expenses due primarily to higher debt levels
and adjustments related to financial instruments.
Quebecor Media Inc.
First quarter revenues and operating income - 2004 to 2008
(in millions of Canadian dollars)
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2008 2007 2006 2005 2004
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Revenues $877.1 $751.1 $698.7 $624.7 $561.8
Operating income 252.4 188.2 159.6 151.0 131.3
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Decision by Quebecor World to place itself under the protection of the
Companies' Creditors Arrangement Act
On January 21, 2008, Quebecor World was granted protection under the Companies'
Creditors Arrangement Act in Canada and Chapter 11 of the United States
Bankruptcy Code.
These procedures will have no material impact on the operations of Quebecor Media.
Conference call for investors and webcast
Quebecor Inc. will hold a conference call to discuss Quebecor Media's first
quarter 2008 results on May 6, 2008, at 5 p.m. EDT. There will be a question
period reserved for financial analysts. To access the conference call, please
dial 1 877 293-8052, access code 81277#. A tape recording of the call will be
available from May 7 through June 7, 2008, by dialling 1 877 293-8133, access
code 618953#. The conference call will also be broadcast live on the Quebecor
website at www.quebecor.com/InvestorCenter/QIConferenceCall.aspx. It is
advisable to ensure the appropriate software is installed before accessing the
call. Instructions and links to free player downloads are available at the
Internet address shown above.
Forward-looking statements
The statements in this press release that are not historical facts are
forward-looking statements and are subject to significant known and unknown
risks, uncertainties and assumptions which could cause Quebecor Inc.'s actual
results for future periods to differ materially from those set forth in the
forward-looking statements. Forward-looking statements may be identified by the
use of the conditional or by forward-looking terminology such as the terms
"plans," "expects," may," "anticipates," "intends," "estimates," "projects,"
"seeks," "believes" or similar terms, variations of such terms or the negative
of such terms. Certain factors that may cause actual results to differ from
current expectations include seasonality (including seasonal fluctuations in
customer orders), operating risk (including fluctuations in demand for Quebecor
Inc.'s products and pricing actions by competitors), insurance risk, risks
associated with capital investment (including risks related to technological
development and equipment availability and breakdown), environmental risks,
risks associated with labour agreements, risks associated with commodities and
energy prices (including fluctuations in the cost and availability of raw
materials), credit risk, financial risks, debt risks, risks related to interest
rate fluctuations, foreign exchange risks, risks related to government acts and
regulations, risks related to tax changes and changes in the general political
and economic environment. Investors and others are cautioned that the foregoing
list of factors that may affect future results is not exhaustive and that undue
reliance should not be placed on any forward-looking statements. For more
information on the risks, uncertainties and assumptions that could cause
Quebecor Inc.'s actual results to differ from current expectations, please refer
to Quebecor Inc.'s public filings available at www.sedar.com and
www.quebecor.com including, in particular, the "Risks and Uncertainties" section
in Quebecor Inc.'s Management Discussion and Analysis for the year ended
December 31, 2006.
The forward-looking statements in this press release reflect Quebecor Inc.'s
forecasts as of May 6, 2008, and are subject to change after that date. Quebecor
Inc. expressly disclaims any obligation or intention to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable securities laws.
Quebecor Inc.
Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B) is a holding company with interests in two
companies, Quebecor Media Inc. and Quebecor World Inc. Quebecor holds a 54.7%
interest in Quebecor Media, which owns operating companies in numerous
media-related businesses: Videotron Ltd., the largest cable operator in Quebec
and a major Internet Service Provider and provider of telephone and business
telecommunications services; Sun Media Corporation, the largest publisher of
newspapers in Canada; Quebecor MediaPages, a publisher of print and online
directories; TVA Group Inc., operator of the largest French-language
over-the-air television network in Quebec, a number of specialty channels, and
the English-language over-the-air station Sun TV; Canoe Inc., operator of a
network of English- and French-language Internet properties in Canada; Nurun
Inc., a major interactive technologies and communications agency with offices in
Canada, the United States, Europe and Asia; magazine publisher TVA Publishing
Inc.; book publisher and distributor Quebecor Media Book Group Inc.; Archambault
Group Inc. and TVA Films, companies engaged in the production, distribution and
retailing of cultural products, and Le SuperClub Videotron ltee, a DVD and
console game rental and retail chain. Quebecor World is a commercial print media
services company with operations in North America, Europe, Latin America and
Asia.
SEGMENTED ANALYSIS
Cable segment
Revenues up $71.8 million (20.0%) to $430.6 million.
- Combined revenues from all cable television services up $17.4 million
(9.8%) to $195.1 million due to the impact of customer base growth,
increases in some rates, the favourable impact of the growth in the
illico Digital TV customer base on revenues from illico on Demand, pay TV
and pay-per-view, and subscriber growth for the HD package.
- Revenues from the illico Digital TV service, excluding related
services, up $20.4 million (26.0%) to $98.8 million. The performance of
illico Digital TV more than compensates for decreased revenues from
analog cable television services.
- Revenues of Internet access services increase $20.8 million (21.0%) to
$120.0 million. The improvement is mainly due to customer growth, as well
as heavier consumption by existing customers and reduced discounts.
- Revenues of cable telephone service increase $25.0 million (62.8%) to
$64.9 million, essentially because of customer growth.
- Revenues of wireless telephone service increase $4.6 million to $6.9
million.
- Revenues of Le SuperClub Videotron ltee increase $0.9 million (7.0%) to
$13.8 million, primarily because of higher retail sales and rental
revenues, partially offset by the impact of the sale of the StarStruck
Entertainment chain and some store closings.
Operating income up $46.9 million (31.5%) to $195.9 million in the first
quarter of 2008.
- Increase due primarily to:
- customer growth for all services;
- increases in some rates;
- $6.0 million favourable variance in expenses related to Quebecor
Media's stock option plan, which are charged to its operating segments
as a direct charge, to reflect participation by segment managers in the
plan and management fees;
- $2.5 million favourable variance related to non-recognition in first
quarter 2008 of current Canadian Radio-television and
Telecommunications Commission ("CRTC") Part II licence fee accruals
following the notice issued on October 1, 2007 .
Customer statistics for Cable segment - net customer growth in first
quarter 2008:
- Cable telephone service: +55,200 (+50,900 in 2007);
- Cable Internet access: +32,100 (+35,900 in 2007);
- All cable television services combined (i.e., net increase for analog
service and illico Digital TV): +14,100 (+10,300 in 2007), including
34,600 more customers for illico Digital TV (+29,300 in 2007);
- Wireless telephone service: +4,200 activated phones (+8,500 in 2007).
Cable segment end-of-quarter customer numbers since end of 2006
(in thousands of customers)
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March 08 Dec.07 Sept.07 June 07 March 07 Dec. 06
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Cable television
Analog 849.4 869.9 896.0 905.4 929.8 948.8
Digital 802.8 768.2 720.3 679.1 652.9 623.6
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Total cable television 1,652.2 1,638.1 1,616.3 1,584.5 1,582.7 1,572.4
Cable Internet access 965.1 933.0 898.9 853.9 827.9 792.0
Cable telephone service 691.6 636.4 573.8 503.7 448.7 397.8
Wireless telephone
service 49.9 45.7 38.7 30.7 20.3 11.8
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Monthly ARPU of Videotron up $11.00 (16.3%) to $78.37, compared with $67.37
in the same quarter of 2007.
Developments since end of 2007
- On April 29, 2008, the Federal Court - Appeal Division overturned a
decision made by the Federal Court on December 14, 2006 concerning Part
II licence fees. The Federal Court - Trial Division had found that the
fees were a form of taxation beyond the jurisdiction of the CRTC. The
Company may therefore be required to pay these fees for 2007 and future
years. The reduction of these fees, in respect of the Cable segment's
operating expenses, represents $17.0 million for the period of September
1, 2006 to March 31, 2008, including $2.8 million for the first quarter
of 2008. To date, the CRTC has not publicly stated its position on the
collection of Part II licence fees prior to the date of the Federal Court
- Appeal Division ruling. Management is studying the ruling and will
decide in the coming weeks whether to apply for leave to appeal to the
Supreme Court of Canada.
- Canada's Auction for Spectrum Licenses for Advanced Wireless Services
(3G) is scheduled to commence on May 27, 2008. Quebecor Media has
qualified as a new market entrant and intends to focus in the 3G Spectrum
Auction on those areas that it believes present attractive growth
prospects for its service offering, based on an analysis of demographic,
economic and other factors.
- February 2008: Launch of two new Internet access services, Ultimate Speed
Internet 30 and Ultimate Speed Internet 50, which support speeds of 30
megabits per second and 50 megabits per second. The two new very high-
speed services make Videotron the first cable operator in North America
to offer service of this speed on a cable network. Roll-out begins in
Laval, Quebec, targeting a potential market of 112,000 households.
Newspapers segment
Revenues up $47.1 million (21.4%) to $267.4 million.
- Increase mainly reflects acquisition of Osprey Media ($50.1 million),
closed in August 2007.
- Excluding the impact of that acquisition, combined revenues from
commercial printing and other sources increase 37.6%, circulation
revenues decrease 9.1%, advertising revenues decrease 2.3%.
- Revenues of the urban dailies decrease 4.1% in the first quarter of 2008;
excluding the acquisition of Osprey Media, revenues of the community
newspapers decrease 2.1%.
- In the urban dailies group, the revenues of the free dailies increase
26.3% due to strong results posted by the Vancouver daily and the launch
of free dailies in Calgary and Edmonton in February 2007.
Operating income up $11.3 million (32.8%) to $45.8 million.
- Increase due primarily to:
- impact of the acquisition of Osprey Media ($10.3 million);
- lower newsprint costs;
- favourable impact on the comparative numbers for the first quarter of
2008 of the charges recognized the first quarter of 2007 in connection
with the labour dispute at Le Journal de Montreal;
- $2.7 million favourable impact of charges related to Quebecor Media's
stock option plan.
Partially offset by:
- impact of the revenue decrease, on a comparable basis;
- expenditures related to the start-up of Quebecor MediaPages and the
launch of free dailies in Calgary and Edmonton.
- Operating income from the dailies published in the Western provinces
and Ontario increases 13.0% first quarter of 2008.
- Despite the labour dispute at Le Journal de Quebec, its operating
income increases by 7.2% in the first quarter of 2008, compared with
the same period of 2007.
Developments since end of 2007
- Results of annual NADBank survey for 2007: Le Journal de Montreal remains
the most widely read newspaper in the greater Montreal area with
1,137,000 readers per week, 39% more than its nearest rival.
- February 2008: Quebecor Media acquires a controlling interest in Alex
Media Services, a provider of flyer distribution services.
Broadcasting segment
Revenues up $13.2 million (14.1%) to $106.5 million.
- Revenues from broadcasting operations increase $10.0 million, mainly
because of:
- higher advertising revenues at the TVA Network;
- higher subscription revenues and advertising revenues at the specialty
channels (Mystere, ARGENT, Prise 2, LCN, mentv, Mystery and Les idees
de ma maison);
- higher revenues at Shopping TVA and commercial production.
- Distribution revenues increase $1.2 million, mainly because of television
and video revenues.
- Publishing revenues increase $1.4 million, primarily as a result of
higher newsstand sales, advertising revenues and subscription revenues.
Operating income up $8.7 million to $11.4 million.
- Operating income from broadcasting operations up $5.8 million, mainly
because of:
- impact of overall revenue growth at the TVA Network and the specialty
channels;
Partially offset by:
- effect of higher content costs at the over-the-air stations;
- increases in some selling, advertising and promotion expenses.
- Operating income from distribution shows favourable variance of $2.2
million caused mainly by:
- costs related to a larger number of film releases in the first quarter
of 2007 than the same quarter of 2008;
- impact of the revenue increase.
- Operating income from publishing operations increases by $0.6 million,
mainly because of the impact of the revenue increase.
Developments since end of 2007
- On April 29, 2008, the Federal Court - Appeal Division overturned a
decision made by the Federal Court on December 14, 2006 concerning Part
II licence fees. The Federal Court - Trial Division had found that the
fees were a form of taxation beyond the jurisdiction of the CRTC. The
Company may therefore be required to pay these fees for 2007 and future
years. The reduction of these fees, in respect of the Broadcasting
segment's operating expenses, represents $5.0 million for the period of
September 1, 2006 to March 31, 2008, including $0.7 million for the first
quarter of 2008. To date, the CRTC has not publicly stated its position
on the collection of Part II licence fees prior to the date of the
Federal Court - Appeal Division ruling. Management is studying the
ruling and will decide in the coming weeks whether to apply for leave to
appeal to the Supreme Court of Canada.
- March 31, 2008: TVA Group announces an offer to purchase for cancellation
up to 2,000,000 of its participating Class B non-voting shares for $17.00
per share. The offer expires May 14, 2008.
Leisure and Entertainment segment
Revenues down $2.5 million (-3.8%) to $62.6 million.
- 7.5% decrease in revenues at Quebecor Media Book Group, due primarily to
lower business volume in early 2008 than 2007 and decreased sales in the
academic segment.
- 1.2% decrease in revenues at Archambault Group, mainly because of lower
retail sales and fewer CDs released and distributed.
Operating loss of $1.6 million, compared with an operating loss of $0.2
million in the same quarter of 2007, due primarily to the impact of the
revenue decreases.
Interactive Technologies and Communications segment
Revenues down $0.4 million (-1.9%) to $20.6 million.
- Decrease mainly due to the impact of reduced business volume from
governments, partially offset by higher revenues in Canada.
Operating loss of $0.7 million, compared with operating income of $0.5
million, an unfavourable variance of $1.2 million due primarily to one-time
costs related to taking Nurun private, including an impact related to the
stock option expense.
Developments since end of 2007
- February 26, 2008: Quebecor Media acquires all outstanding Common Shares
of Nurun it did not already hold at $4.75 per share, for a total cash
consideration of $75.0 million. Following this transaction, Nurun becomes
a wholly owned subsidiary of Quebecor Media and its shares are delisted
from the Toronto Stock Exchange.
Internet/Portals segment
Revenues up $0.6 million (5.3%) to $12.0 million.
- 10.3% increase in revenues at general-interest portals, due primarily to
higher advertising revenues.
- 2.2% increase in revenues at special-interest portals, primarily
attributable to revenue growth at autonet.ca sites due essentially to the
acquisition of ASL Ltd.
Operating income down $1.5 million (-88.2%) to $0.2 million, mainly because
of the impact of costs of introducing of a new business development
strategy and investment in new products.
Developments since end of 2007
- March 2008: autonet.ca acquires ASL, one of Canada's largest providers of
Web services to car dealers.
Financing activities
- April 15, 2008: Videotron issues US$455.0 million aggregate principal
amount of Senior Notes. Videotron plans to use the proceeds to repay
drawings on its senior secured credit facility and for general purposes.
- April 8, 2008: Videotron amends its senior secured credit facility to
increase commitments under the facility to $575.0 million and extend the
maturity date to April 2012.
DEFINITIONS
Operating income
In its analysis of operating results, Quebecor Inc. defines operating income or
loss, as reconciled to (net loss) net income under Canadian GAAP, as (net loss)
net income before amortization, financial expenses, reserve for restructuring of
operations, impairment of goodwill, (loss) gain on re-measurement of
exchangeable debentures and of a portfolio investment, loss on debt refinancing,
(loss) gain on sales of businesses and other assets, income taxes, dividends on
Preferred Shares of a subsidiary, net of income tax, non-controlling interest
and the results of discontinued operations. Operating income as defined above is
not a measure of results that is consistent with Canadian GAAP. It is not
intended to be regarded as an alternative to other financial operating
performance measures or to the statement of cash flows as a measure of
liquidity. It should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with Canadian GAAP. Management
believes that operating income is a meaningful measure of performance. The
Company considers the media and printing segments as a whole and uses operating
income in order to assess the performance of its investment in Quebecor Media
and Quebecor World. The Company's management and Board of Directors use this
measure in evaluating its consolidated results as well as results of the
Company's operating segments. This measure eliminates the significant level of
non-cash depreciation of tangible assets and amortization of certain intangible
assets, and is unaffected by the capital structure or investment activities of
the Company and its segments. Operating income is also relevant because it is a
significant component of the Company's annual incentive compensation programs. A
limitation of this measure, however, is that it does not reflect the periodic
costs of capitalized tangible and intangible assets used in generating revenues
in the Company's segments. The Company also uses other measures that do reflect
such costs, such as cash flows from segment operations and free cash flows from
operations. In addition, measures like operating income are commonly used by the
investment community to analyze and compare the performance of companies in the
industries in which the Company is engaged. The Company's definition of
operating income may not be the same as similarly titled measures reported by
other companies. The table below reconciles Quebecor Media's operating income
with the closest Canadian GAAP measure.
Quebecor Media Inc.
Reconciliation of operating income with net income as disclosed in
consolidated financial statements
(in millions of Canadian dollars)
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Three months ended March 31
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2008 2007
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Operating income
Cable $195.9 $149.0
Newspapers 45.8 34.5
Broadcasting 11.4 2.7
Leisure and Entertainment (1.6) (0.2)
Interactive Technologies and Communications (0.7) 0.5
Internet/Portals 0.2 1.7
Head office 1.4 -
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252.4 188.2
Amortization (78.1) (69.9)
Financial expenses (74.1) (54.1)
Reserve for restructuring of operations (1.6) (7.0)
Other 0.3 1.0
Income tax (39.7) (17.5)
Non-controlling interest (2.7) -
Income from discontinued operations 2.3 0.5
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Net income $ 58.8 $ 41.2
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Average Monthly Revenue per User
ARPU is an industry metric that Quebecor uses to measure its average cable,
Internet and telephony revenues per month per basic cable customer. ARPU is not
a measurement that is consistent with Canadian GAAP, and Quebecor's definition
and calculation of ARPU may not be the same as identically titled measurements
reported by other companies. Quebecor Inc. calculates ARPU by dividing its
combined cable television, Internet access and telephony revenues by the average
number of its basic cable customers during the applicable period, and then
dividing the resulting amount by the number of months in the applicable period.
QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars)
(unaudited)
Three months ended March 31
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2008 2007
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REVENUES
Cable $430.6 $358.8
Newspapers 267.4 220.3
Broadcasting 106.5 93.3
Leisure and Entertainment 62.6 65.1
Interactive Technologies and Communications 20.6 21.0
Internet/Portals 12.0 11.4
Head office and inter-segment (22.6) (18.8)
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877.1 751.1
Cost of sales and selling
and administrative expenses 624.7 562.9
Amortization 78.1 69.9
Financial expenses 74.1 54.1
Reserve for restructuring of operations 1.6 7.0
Other (0.3) (1.0)
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INCOME BEFORE INCOME TAXES 98.9 58.2
Income taxes:
Current (1.1) (2.0)
Future 40.8 19.5
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39.7 17.5
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59.2 40.7
Non-controlling interest (2.7) -
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INCOME FROM CONTINUING OPERATIONS 56.5 40.7
Income from discontinued operations 2.3 0.5
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NET INCOME $58.8 $41.2
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QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian dollars)
(unaudited)
Three months ended March 31
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2008 2007
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Income before amortization, financial expenses,
reserve for restructuring of operations
and other
Cable $195.9 $149.0
Newspapers 45.8 34.5
Broadcasting 11.4 2.7
Leisure and Entertainment (1.6) (0.2)
Interactive Technologies and Communications (0.7) 0.5
Internet/Portals 0.2 1.7
General corporate expenses 1.4 -
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$252.4 $188.2
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Amortization
Cable $56.5 $54.0
Newspapers 14.7 9.4
Broadcasting 3.4 3.2
Leisure and Entertainment 1.8 2.0
Interactive Technologies and Communications 0.9 0.8
Internet/Portals 0.7 0.3
Head Office 0.1 0.2
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$78.1 $69.9
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Additions to property, plant and equipment
Cable $96.4 $88.3
Newspapers 34.0 17.2
Broadcasting 2.5 3.5
Leisure and Entertainment 1.4 0.2
Interactive Technologies and Communications 0.5 0.9
Internet/Portals 1.6 0.9
Head Office - 0.1
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$136.4 $111.1
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QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
(unaudited)
Three months ended March 31
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2008 2007
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Net income $58.8 $41.2
Other comprehensive income
Unrealized gain (loss) on translation of net
investments in foreign operations 2.3 (0.1)
Unrealized gain on derivative instruments,
net of income taxes of $9.5 million in 2008
and including income taxes recovery
of $0.3 million in 2007 17.6 9.1
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19.9 9.0
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COMPREHENSIVE INCOME $78.7 $50.2
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CONSOLIDATED STATEMENTS OF DEFICIT
(in millions of Canadian dollars)
(unaudited)
Three months ended March 31
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2008 2007
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Deficit at beginning of period $2,528.7 $2,745.8
Net income (58.8) (41.2)
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2,469.9 2,704.6
Dividends - 11.3
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Deficit at end of period $2,469.9 $2,715.9
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QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited)
Three months ended March 31
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2008 2007
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Cash flows related to operations
Income from continuing operations $56.5 $40.7
Adjustments for:
Amortization of property, plant and equipment 72.5 67.5
Amortization of deferred charges
and of other assets 5.6 2.4
Net loss (gain) on derivative instruments
and on foreign currency translation of
financial instruments 6.4 (2.2)
Amortization of deferred financing costs and
long-term debt discount 2.0 1.0
Loss on revaluation of the Additional
Amount payable - 5.2
Non-controlling interest 2.7 -
Future income taxes 40.8 19.5
Other 0.5 (3.0)
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187.0 131.1
Net change in non-cash balances related
to operations (132.8) (41.9)
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Cash flows provided by continuing operations 54.2 89.2
Cash flows provided by discontinued operations - 0.5
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Cash flows provided by continuing operations 54.2 89.7
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Cash flows related to investing activities
Business acquisitions, net of cash
and cash equivalents (86.3) (4.0)
Business disposals, net of cash
and cash equivalents 1.2 -
Additions to property, plant and equipment (136.4) (111.1)
Proceeds from disposal of assets 0.2 2.5
Other (7.6) (0.1)
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Cash flows used in investing activities (228.9) (112.7)
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Cash flows related to financing activities
Net increase in bank indebtedness 37.5 1.1
Issuance of long-term debt, net of financing fees 0.5 8.3
Net borrowings under revolving bank facilities 140.3 35.7
Repayment of long-term debt (8.4) (5.3)
Dividends - (11.3)
Other 2.0 (0.8)
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Cash flows provided by financing activities 171.9 27.7
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Net (decrease) increase in cash and cash equivalents (2.8) 4.7
Effect of exchange rate changes on cash and cash
Equivalents denominated in foreign currencies 0.4 -
Cash and cash equivalents at beginning of period 26.1 34.1
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Cash and cash equivalents at end of period $23.7 $38.8
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Cash and cash equivalents consist of
Cash $0.1 $3.4
Cash equivalents 23.6 35.4
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$23.7 $38.8
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Cash interest payments $57.6 $55.7
Cash income tax payments (net of refunds) 12.1 (2.1)
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QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
March 31 December 31
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2008 2007
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(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $23.7 $26.1
Temporary investments 0.2 0.2
Accounts receivable 466.6 496.0
Income taxes 7.3 10.5
Amounts receivable from parent company and
Companies under common control 4.5 1.9
Inventories and investments in televisual
products and movies 154.9 169.0
Prepaid expenses 40.2 32.7
Future income taxes 116.9 153.6
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814.3 890.0
PROPERTY, PLANT AND EQUIPMENT 2,161.7 2,110.2
FUTURE INCOME TAXES 54.0 57.4
OTHER ASSETS 469.6 422.0
GOODWILL 4,136.9 4,081.3
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$7,636.5 $7,560.9
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank indebtedness $53.9 $16.3
Accounts payable and accrued charges 590.6 756.0
Deferred revenue 209.2 202.7
Income taxes 7.1 19.2
Current portion of long-term debt 24.8 24.7
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885.6 1,018.9
LONG-TERM DEBT 3,276.9 3,002.8
DERIVATIVE FINANCIAL INSTRUMENTS 419.9 538.7
OTHER LIABILITIES 97.0 103.5
FUTURE INCOME TAXES 303.0 292.5
NON-CONTROLLING INTEREST 127.8 154.2
SHAREHOLDERS' EQUITY
Capital stock 1,752.4 1,752.4
Contributed surplus 3,214.5 3,217.2
Deficit (2,469.9) (2,528.7)
Accumulated other comprehensive income 29.3 9.4
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2,526.3 2,450.3
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$7,636.5 $7,560.9
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