Quebecor Inc. ("Quebecor") (TSX: QBR.A) (TSX: QBR.B) today reported
its consolidated financial results for the second quarter of 2009.
Quebecor consolidates the financial results of its Quebecor Media
Inc. subsidiary ("Quebecor Media"), in which it holds a 54.7%
interest.
Quebecor Media has renamed two of its business segments to
better reflect its comprehensive product line: the Cable segment
has become the Telecommunications segment and the Newspapers
segment has become the News Media segment.
Highlights since end of first quarter 2009
- Quebecor records revenues of $939.4 million, down $2.9 million
(-0.3%) from second quarter 2008.
- Operating income(1): up $39.0 million (14.1%) to $315.9
million.
- Net income: $76.8 million ($1.19 per basic share), up $19.3
million (33.6%) from $57.5 million ($0.90 per basic share) in the
same period of 2008.
- Adjusted income from continuing operating activities(2): $56.3
million in second quarter 2009 ($0.88 per basic share), up $14.8
million ($0.23 per basic share), or 35.7%, from $41.5 million
($0.65 per basic share) in the same period of 2008.
- Telecommunications segment: operating income up $50.5 million
(27.7%). Customer growth in second quarter 2009: +43,900 for cable
telephone service, +20,600 for cable Internet access, +3,400 for
cable television service (including 27,100 customer increase for
illico Digital TV), +5,500 activated phones for wireless telephone
service.
- Roaming agreements with wireless providers Rogers
Communications Inc. ("Rogers") and T-Mobile USA, Inc.: Videotron
Ltd. ("Videotron") will be able to serve future customers for its
Advanced Wireless Services ("AWS") in Canada and in the United
States.
- Tower-sharing agreements with Rogers and Bell Mobility in
Quebec and in the Ottawa area: Videotron will be able to build
network at anticipated cost.
(1)See "Operating income" under "Definitions."
(2)See "Adjusted income from continuing operations" under
"Definitions."
"In what continues to be a constantly challenging economic and
financial environment, Quebecor's net income grew 33.6% in the
second quarter of 2009 to $76.8 million, or $1.19 per basic share,"
said Pierre Karl Peladeau, President and Chief Executive Officer of
Quebecor. "Once again, the improved results are being driven by the
Telecommunications segment, which significantly increased its
operating income; Videotron registered customer growth for all its
services for the 16th consecutive quarter. At the same time,
Videotron is pushing ahead with its AWS project: it has reached
roaming and tower-sharing agreements, which will enable it to build
out its network within budget, offer customers service of the
highest quality across Canada and the United States, and limit the
proliferation of towers in Quebec. Meanwhile, in our News Media
segment, the restructuring programs and other cost reduction
initiatives launched in late 2008 have already generated estimated
savings of $25.0 million in the first half of 2009. They are
expected to yield still greater savings in the second half of the
year."
Table 1
Quebecor second quarter financial highlights, 2005-2009
(in millions of Canadian dollars, except per share data)
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2009 2008 2007 2006 2005
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Revenues $ 939.4 $ 942.3 $ 815.3 $ 739.9 $ 669.1
Operating
income(1) 315.9 276.9 230.6 205.9 194.0
Income from
continuing
operations 76.8 57.5 50.1 17.6 60.8
Net income 76.8 57.5 43.4 13.7 56.2
Adjusted income
from continuing
operating
activities(2) 56.3 41.5 37.7 30.4 16.9
Per share data:
Income from
continuing
operations 1.19 0.90 0.78 0.27 0.95
Net income 1.19 0.90 0.67 0.21 0.87
Adjusted income
from continuing
operating
activities(2) 0.88 0.65 0.59 0.47 0.26
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(1)See "Operating income" under "Definitions."
(2)See "Adjusted income from continuing operating activities" under
"Definitions."
Analysis of second quarter 2009 results
- Quebecor's revenues decreased $2.9 million (-0.3%) to $939.4 million.
- Revenues increased in the following segments: Telecommunications (by
$39.9 million or 8.9% of segment revenues) mainly because of customer
growth for all services; Leisure and Entertainment ($4.5 million or
7.1%); and Broadcasting ($0.5 million or 0.5%).
- Revenues decreased in News Media (by $49.5 million or -15.6%) almost
entirely as a result of lower advertising revenues.
- Operating income increased $39.0 million (14.1%) to $315.9 million, due
primarily to an increase in the Telecommunications segment ($50.5 million
or 27.7% of segment operating income) resulting mainly from customer
growth. Operating income more than doubled in the Leisure and
Entertainment segment, rising $2.7 million. Operating income decreased
$18.1 million (-24.6%) in News Media.
The increase in operating income includes a $21.6 million favourable
variance (including $16.7 million in the Telecommunications segment and
$4.9 million in the Broadcasting segment) related to retroactive
recognition in the second quarter of 2008 of a provision for Canadian
Radio-television and Telecommunications Commission ("CRTC") Part II
licence fees.
- Quebecor's net income totalled $76.8 million ($1.19 per basic share),
compared with $57.5 million ($0.90 per basic share) in the same period of
2008, an increase of $19.3 million (33.6%).
- The increase was mainly due to:
- $39.0 million increase in operating income;
- $17.1 million decrease in financial expenses.
Offset by:
- recognition in the second quarter of 2009 of a $13.6 million
non-cash charge for impairment of goodwill and intangible assets;
- $13.5 million unfavourable variance in the gain on valuation and
translation of financial instruments;
- $7.5 million increase in non-controlling interest;
- $5.5 million increase in amortization charge.
- Adjusted income from continuing operating activities: $56.3 million in
the second quarter of 2009 ($0.88 per basic share), compared with $41.5
million ($0.65 per basic share) in the same period of 2008, an increase
of $14.8 million ($0.23 per basic share), or 35.7%.
Analysis of year-to-date results
- Quebecor's revenues increased $16.2 million (0.9%) to $1.84 billion.
- Revenues increased in the following segments: Telecommunications (by
$86.8 million or 9.9% of segment revenues), Leisure and Entertainment
($6.0 million or 4.8%), Broadcasting ($3.8 million or 1.7%) and
Interactive Technologies and Communications ($2.3 million or 5.2%).
- Revenues decreased in News Media (by $82.1 million or -13.8%).
- Operating income increased $54.5 million (10.2%) to $588.1 million, due
primarily to an increase in the Telecommunications segment ($77.5 million
or 20.5% of segment operating income). Operating income decreased in News
Media (by $34.4 million or -28.7%).
- Quebecor's year-to-date net income totalled $134.5 million ($2.09 per
basic share) compared with $485.9 million ($7.56 per basic share) in the
same period of 2008.
- Favourable variances in the following items:
- $54.5 million increase in operating income;
- $30.1 million decrease in financial expenses;
- $18.4 million decrease in income tax expense.
Outweighed by:
- recognition in the first quarter of 2008 of income from discontinued
operations in the amount of $383.3 million;
- $29.5 million increase in non-controlling interest;
- recognition in the first half of 2009 of $13.6 million non-cash
charge for impairment of goodwill and intangible assets;
- $13.1 million increase in amortization charge;
- $13.0 million unfavourable variance in the gain on valuation and
translation of financial instruments.
- Adjusted income from continuing operating activities: $99.4 million in
the first half of 2009 ($1.55 per basic share), compared with $76.1
million ($1.19 per basic share) in the same period of 2008, an increase
of $23.3 million ($0.36 per basic share) or 30.6%.
Dividends
On August 5, 2009, the Board of Directors of Quebecor declared a
quarterly dividend of $0.05 per share on Class A Multiple Voting
Shares and Class B Subordinate Voting Shares, payable on September
15, 2009 to shareholders of record at the close of business on
August 21, 2009. This dividend is designated to be an eligible
dividend, as provided under subsection 89(14) of the Canadian
Income Tax Act and its provincial counterpart.
Detailed financial information
For a detailed analysis of Quebecor's results for the second
quarter of 2009, please refer to the Management Discussion and
Analysis and consolidated financial statements of Quebecor,
available on the Company's website at
http://www.quebecor.com/InvestorCenter/QIQuarterlyReports.aspx or
from the SEDAR filing service at http://www.sedar.com .
Conference call for investors and webcast
Quebecor will hold a conference call to discuss the second
quarter 2009 results of Quebecor and Quebecor Media on August 6,
2009, at 10:30 a.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 77467#. A tape recording of the call
will be available from August 6 to September 12, 2009 by dialling 1
877 293-8133, access code 895426#. The conference call will also be
broadcast live on Quebecor's 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'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'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
associated with government acts and regulations, risks related to
changes in tax legislation, 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's actual
results to differ from current expectations, please refer to
Quebecor's public filings available at www.sedar.com and
www.quebecor.com including, in particular, the "Risks and
Uncertainties" section in Quebecor's Management Discussion and
Analysis for the year ended December 31, 2008.
The forward-looking statements in this press release reflect
Quebecor's expectations as of August 6, 2009, and are subject to
change after that date. Quebecor 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.
The Company
Quebecor Inc. (TSX: QBR.A) (TSX: QBR.B) is a holding company
with a 54.7% interest in Quebecor Media Inc, one of Canada's
largest media groups. Quebecor Media owns operating companies in
numerous media related businesses: Videotron Ltd., an integrated
communications company engaged in cable television, interactive
multimedia development, Internet access services, cable telephony
and wireless telephone service; Sun Media Corporation, the largest
publisher of newspapers in Canada; Canoe Inc., operator of a
network of English- and French-language Internet properties in
Canada; 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;
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 publishers and
distributors Sogides Group Inc. and CEC Publishing Inc.;
Archambault Group Inc. and TVA Films, companies engaged in the
production, distribution and retailing of cultural products; Le
SuperClub Videotron ltee, a DVD and console game rental and retail
chain; and Quebecor MediaPages, publisher of print and online
directories.
DEFINITIONS
Operating income
In its analysis of operating results, the Company defines
operating income or loss, as reconciled to net income under
Canadian generally accepted accounting principles ("Canadian
GAAP"), as net income before amortization, financial expenses, gain
on valuation and translation of financial instruments, charge for
restructuring of operations and other special items, impairment of
goodwill and intangible assets, 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 uses operating income in order to assess
the performance of its investment in Quebecor Media. The Company's
management and Board of Directors use this measure in evaluating
its consolidated results as well as the results of the Company's
operating segments. This measure eliminates the significant level
of depreciation and amortization of tangible and 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 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 such as 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 identical to similarly titled measures reported by other
companies.
Table 2 below reconciles Quebecor's operating income with the
closest Canadian GAAP measure.
Table 2
Reconciliation of the operating income measure used in this press release
to the net income measure used in the consolidated financial statements
(in millions of Canadian dollars)
Three months ended Six months ended
June 30 June 30
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2009 2008 2009 2008
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Operating income:
Telecommunications $ 232.7 $ 182.2 $ 456.3 $ 378.8
News Media 55.6 73.7 85.3 119.7
Broadcasting 25.1 21.7 37.5 32.7
Leisure and
Entertainment 4.8 2.1 5.6 0.5
Interactive
Technologies and
Communications 1.3 1.8 1.7 1.1
Head Office (3.6) (4.6) 1.7 0.8
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315.9 276.9 588.1 533.6
Amortization (85.1) (79.6) (170.4) (157.3)
Financial expenses (63.0) (80.1) (122.9) (153.0)
Gain on valuation and
translation of
financial instruments 12.1 25.6 26.2 39.2
Restructuring of
operations and other
special items (0.8) (0.7) (4.2) (2.3)
Impairment of goodwill
and intangible assets (13.6) - (13.6) -
Income tax (22.9) (26.3) (52.3) (70.7)
Non-controlling
interest (65.8) (58.3) (116.4) (86.9)
Income from
discontinued
operations - - - 383.3
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Net income $ 76.8 $ 57.5 $ 134.5 $ 485.9
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Adjusted income from continuing operating activities
The Company defines adjusted income from continuing operating
activities, as reconciled to net income under Canadian GAAP, as net
income before gain on valuation and translation of financial
instruments, charge for restructuring of operations and other
special items, impairment of goodwill and intangible assets, and
the results of discontinued operations, net of income tax and
non-controlling interest. Adjusted income from continuing operating
activities as defined above is not a measure of results that is
consistent with Canadian GAAP. It should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with Canadian GAAP. Management believes that adjusted
income from continuing operating activities is a meaningful measure
that provides an indication of the long-term profitability of the
Company's operating activities by eliminating the impact of unusual
or one-time items. The Company's definition of adjusted income from
continuing operating activities may not be identical to similarly
titled measures reported by other companies.
Table 3 provides a reconciliation of adjusted income from
continuing operating activities to the net income measure used in
the consolidated financial statements of Quebecor.
Table 3
Reconciliation of the adjusted income from continuing operating activities
measure used in this report to the net income measure used in the
consolidated financial statements
(in millions of Canadian dollars)
Three months ended Six months ended
June 30 June 30
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2009 2008 2009 2008
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Adjusted income from
continuing operating
activities $ 56.3 $ 41.5 $ 99.4 $ 76.1
Gain on valuation and
translation of
financial instruments 12.1 25.6 26.2 39.2
Restructuring of
operations and other
special items (0.8) (0.7) (4.2) (2.3)
Impairment of goodwill
and intangible assets (13.6) - (13.6) -
Income tax related to
adjustments(1) 27.7 0.7 35.2 (6.0)
Non-controlling
interest related to
adjustments (4.9) (9.6) (8.5) (4.4)
Income from
discontinued
operations - - - 383.3
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Net income $ 76.8 $ 57.5 $ 134.5 $ 485.9
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(1)Includes the impact of fluctuations in tax rates applicable to
adjusted items, for statutory reasons or in connection with tax
planning arrangements.
Average Monthly Revenue per User
ARPU is an industry metric that the Company uses to measure its
average cable, Internet, cable telephone and wireless telephone
revenues per month per customer. ARPU is not a measurement that is
consistent with Canadian GAAP and the Company's definition and
calculation of ARPU may not be the same as identically titled
measurements reported by other companies. The Company calculates
ARPU by dividing its combined cable television, Internet access,
cable telephone and wireless telephone revenues by the average
number of customers during the applicable period, and then dividing
the resulting amount by the number of months in the applicable
period.
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars, except for earnings per share data)
(unaudited)
Three months ended June 30 Six months ended June 30
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2009 2008 2009 2008
-------------------------------------------------------------------------
(restated) (restated)
Revenues
Telecommunications $ 487.4 $ 447.5 $ 964.9 $ 878.1
News Media 268.7 318.2 514.2 596.3
Broadcasting 111.5 111.0 221.3 217.5
Leisure and
Entertainment 68.2 63.7 132.3 126.3
Interactive
Technologies and
Communications 23.6 23.4 46.3 44.0
Head Office and
inter-segment (20.0) (21.5) (43.4) (42.8)
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939.4 942.3 1,835.6 1,819.4
Cost of sales and
selling and
administrative
expenses 623.5 665.4 1,247.5 1,285.8
Amortization 85.1 79.6 170.4 157.3
Financial expenses 63.0 80.1 122.9 153.0
Gain on valuation and
translation of
financial instruments (12.1) (25.6) (26.2) (39.2)
Restructuring of
operations and other
special items 0.8 0.7 4.2 2.3
Impairment of goodwill
and intangible assets 13.6 - 13.6 -
-------------------------------------------------------------------------
Income before income
taxes and non-
controlling interest 165.5 142.1 303.2 260.2
Income taxes:
Current 7.4 3.4 6.6 2.3
Future 15.5 22.9 45.7 68.4
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22.9 26.3 52.3 70.7
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142.6 115.8 250.9 189.5
Non-controlling
interest (65.8) (58.3) (116.4) (86.9)
-------------------------------------------------------------------------
Income from continuing
operations 76.8 57.5 134.5 102.6
Income from
discontinued
operations - - - 383.3
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Net income $ 76.8 $ 57.5 $ 134.5 $ 485.9
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Earnings per share
Basic
From continuing
operations $ 1.19 $ 0.90 $ 2.09 $ 1.60
From discontinued
operations - - - 5.96
Net income 1.19 0.90 2.09 7.56
Diluted
From continuing
operations $ 1.19 $ 0.89 $ 2.09 $ 1.59
From discontinued
operations - - - 5.96
Net income 1.19 0.89 2.09 7.55
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Weighted average number
of shares outstanding
(in millions) 64.3 64.3 64.3 64.3
Weighted average number
of diluted shares
(in millions) 64.3 64.4 64.3 64.4
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QUEBECOR INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian dollars)
(unaudited)
Three months ended June 30 Six months ended June 30
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2009 2008 2009 2008
-------------------------------------------------------------------------
(restated) (restated)
Income from continuing
operations before
amortization,
financial expenses,
gain on valuation
and translation of
financial instruments,
restructuring of
operations and other
special items,
impairment of
goodwill and
intangible assets,
income taxes and non-
controlling interest
Telecommunications $ 232.7 $ 182.2 $ 456.3 $ 378.8
News Media 55.6 73.7 85.3 119.7
Broadcasting 25.1 21.7 37.5 32.7
Leisure and
Entertainment 4.8 2.1 5.6 0.5
Interactive
Technologies and
Communications 1.3 1.8 1.7 1.1
Head Office (3.6) (4.6) 1.7 0.8
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$ 315.9 $ 276.9 $ 588.1 $ 533.6
-------------------------------------------------------------------------
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Amortization
Telecommunications $ 62.1 $ 56.7 $ 124.1 $ 112.7
News Media 15.2 16.5 29.9 31.9
Broadcasting 3.5 3.3 7.1 6.6
Leisure and
Entertainment 2.4 1.9 4.8 3.7
Interactive
Technologies and
Communications 1.1 1.0 2.2 1.9
Head Office 0.8 0.2 2.3 0.5
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$ 85.1 $ 79.6 $ 170.4 $ 157.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Additions to property,
plant and equipment
Telecommunications $ 102.1 $ 96.7 $ 203.9 $ 183.2
News Media 6.3 8.7 16.8 43.0
Broadcasting 3.5 3.8 8.5 5.6
Leisure and
Entertainment 0.4 2.3 1.1 3.7
Interactive
Technologies and
Communications 1.4 0.9 2.2 1.4
Head Office 1.4 2.8 2.0 7.4
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$ 115.1 $ 115.2 $ 234.5 $ 244.3
-------------------------------------------------------------------------
Additions to
intangible assets
Telecommunications $ 24.6 $ 8.4 $ 45.0 $ 18.9
News Media 0.9 0.5 2.8 3.3
Broadcasting 2.5 1.1 2.9 1.8
Leisure and
Entertainment 1.2 2.8 2.4 2.8
-------------------------------------------------------------------------
$ 29.2 $ 12.8 $ 53.1 $ 26.8
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Externally acquired
intangible assets $ 18.5 $ 2.8 $ 30.0 $ 9.5
Internally generated
intangible assets 10.7 10.0 23.1 17.3
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$ 29.2 $ 12.8 $ 53.1 $ 26.8
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
(unaudited)
Three months ended June 30 Six months ended June 30
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-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
(restated) (restated)
Net income $ 76.8 $ 57.5 $ 134.5 $ 485.9
Other comprehensive
income (loss), net of
income taxes and non-
controlling interest:
Unrealized (loss)
gain on translation
of net investments
in foreign
operations (0.8) (0.1) (0.8) 1.2
Gain (loss) on
valuation of
derivative financial
instruments 12.5 (31.9) 11.1 (22.1)
Reclassification to
income of other
comprehensive loss
related to
discontinued
operations - - - 326.5
-------------------------------------------------------------------------
11.7 (32.0) 10.3 305.6
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Comprehensive income $ 88.5 $ 25.5 $ 144.8 $ 791.5
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in millions of Canadian dollars)
(unaudited)
--------------------------------------------------------------------------
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Accumulated Total
other share-
Capital Contributed Retained compre- holders'
stock surplus earnings hensive loss equity
--------------------------------------------------------------------------
Balance as of
December 31, 2007,
as previously
reported $ 346.6 $ - $ 391.5 $(321.8) $ 416.3
Cumulative effect
of changes in
accounting
policies - - (1.3) - (1.3)
--------------------------------------------------------------------------
Balance as of
December 31, 2007,
as restated 346.6 - 390.2 (321.8) 415.0
Net income - - 485.9 - 485.9
Dividends - - (6.4) - (6.4)
Other comprehensive
income - - - 305.6 305.6
--------------------------------------------------------------------------
Balance as of June
30, 2008, as
restated 346.6 - 869.7 (16.2) 1,200.1
Net loss - - (297.9) - (297.9)
Dividends - - (6.5) - (6.5)
Other comprehensive
loss - - - (11.3) (11.3)
--------------------------------------------------------------------------
Balance as of
December 31, 2008,
as restated 346.6 - 565.3 (27.5) 884.4
Net income - - 134.5 - 134.5
Dividends - - (6.4) - (6.4)
Related party
transactions - 4.8 - - 4.8
Other comprehensive
income - - - 10.3 10.3
--------------------------------------------------------------------------
Balance as of June
30, 2009 $ 346.6 $ 4.8 $ 693.4 $ (17.2) $ 1,027.6
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited)
Three months ended June 30 Six months ended June 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
(restated) (restated)
Cash flows related to
operations
Income from
continuing
operations $ 76.8 $ 57.5 $ 134.5 $ 102.6
Adjustments for:
Amortization of
property, plant
and equipment 73.0 69.6 146.5 138.1
Amortization of
intangible assets
and other assets 12.1 10.0 23.9 19.2
Impairment of
goodwill and
intangible assets 13.6 - 13.6 -
Gain on valuation
and translation
of financial
instruments (12.1) (25.6) (26.2) (39.2)
Amortization of
financing costs
and long-term debt
discount 2.7 2.3 4.8 4.3
Future income taxes 15.5 22.9 45.7 68.4
Non-controlling
interest 65.8 58.3 116.4 86.9
Other (4.0) 1.7 (2.1) 2.1
-------------------------------------------------------------------------
243.4 196.7 457.1 382.4
Net change in non-
cash balances
related to
operations (36.4) (10.0) (124.8) (157.3)
-------------------------------------------------------------------------
Cash flows provided
by continuing
operations 207.0 186.7 332.3 225.1
Cash flows provided
by discontinued
operations - - - 20.5
Cash flows provided by
operations 207.0 186.7 332.3 245.6
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Cash flows related to
investing activities
Business acquisitions,
net of cash and cash
equivalents (1.5) (52.2) (2.5) (138.5)
Business disposals,
net of cash and cash
equivalents 5.0 - 11.4 1.2
Additions to property,
plant and equipment (115.1) (115.2) (234.5) (244.3)
Additions to
intangible assets (29.2) (12.8) (53.1) (26.8)
Increase in cash and
cash equivalents in
trust - (218.0) - (218.0)
Other 0.3 0.8 1.0 (0.9)
Cash flows used in
continuing investing
activities (140.5) (397.4) (277.7) (627.3)
Cash flows used in
discontinued
investing activities
and cash and cash
equivalents of
Quebecor World at
the date of
deconsolidation - - - (117.7)
-------------------------------------------------------------------------
Cash flows used in
investing activities (140.5) (397.4) (277.7) (745.0)
-------------------------------------------------------------------------
Cash flows related to
financing activities
Net (decrease)
increase in bank
indebtedness (7.8) (14.4) 11.7 23.1
Issuance of long-
term debt, net of
financing fees - 449.3 325.5 449.8
Net repayments
under revolving
bank facilities (16.3) (208.1) (221.9) (54.8)
Repayments of
long-term debt (9.9) (4.5) (23.9) (12.9)
Dividends (6.4) (6.4) (6.4) (6.4)
Dividends paid to
non-controlling
shareholders (9.2) (0.8) (18.3) (1.5)
Other - - - 2.6
-------------------------------------------------------------------------
Cash flows (used in)
provided by
continuing financing
activities (49.6) 215.1 66.7 399.9
Cash flows provided
by discontinued
financing activities - - - 37.3
-------------------------------------------------------------------------
Cash flows (used in)
provided by financing
activities (49.6) 215.1 66.7 437.2
-------------------------------------------------------------------------
Net increase (decrease)
in cash and cash
equivalents 16.9 4.4 121.3 (62.2)
Effect of exchange
rate changes on cash
and cash equivalents
denominated in foreign
currencies (0.3) (0.2) (0.4) 0.2
Cash and cash
equivalents at
beginning of period 114.3 0.3 10.0 66.5
-------------------------------------------------------------------------
Cash and cash
equivalents at end
of period $ 130.9 $ 4.5 $ 130.9 $ 4.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash
equivalents
consist of
Cash $ 38.2 $ 3.4 $ 38.2 $ 3.4
Cash equivalents 92.7 1.1 92.7 1.1
-------------------------------------------------------------------------
$ 130.9 $ 4.5 $ 130.9 $ 4.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Continuing operations
Cash interest
payments $ 92.7 $ 83.9 $ 151.2 $ 144.0
Cash income tax
payments (net of
refunds) 3.7 4.1 8.8 16.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
June 30 December 31
2009 2008
-------------------------------------------------------------------------
(restated)
Assets
Current assets
Cash and cash equivalents $ 130.9 $ 10.0
Cash and cash equivalents in trust 5.3 5.3
Accounts receivable 440.8 484.6
Income taxes 4.6 9.4
Inventories and programs, broadcast and
distribution rights 165.2 189.3
Prepaid expenses 54.1 31.5
Future income taxes 54.2 115.2
-------------------------------------------------------------------------
855.1 845.3
Property, plant and equipment 2,353.8 2,272.9
Intangible assets 1,008.6 985.9
Derivative financial instruments 194.8 317.9
Other assets 115.1 105.9
Future income taxes 8.9 12.3
Goodwill 3,506.8 3,516.7
-------------------------------------------------------------------------
$ 8,043.1 $ 8,056.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness $ 24.0 $ 12.3
Accounts payable and accrued charges 616.4 788.6
Deferred revenue 233.3 224.0
Income taxes 6.7 9.8
Current portion of long-term debt 137.1 42.3
-------------------------------------------------------------------------
1,017.5 1,077.0
Long-term debt 4,159.5 4,407.1
Derivative financial instruments 199.3 117.3
Exchangeable debentures and other liabilities 118.7 117.0
Future income taxes 434.0 469.1
Non-controlling interest 1,086.5 985.0
Shareholders' equity
Capital stock 346.6 346.6
Contributed surplus 4.8 -
Retained earnings 693.4 565.3
Accumulated other comprehensive loss (17.2) (27.5)
-------------------------------------------------------------------------
1,027.6 884.4
-------------------------------------------------------------------------
$ 8,043.1 $ 8,056.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Contacts: Quebecor Inc. Jean-Francois Pruneau Vice President,
Finance 514-380-4144 Quebecor Inc. Isabelle Dessureault Vice
President, Public Affairs 514-380-7501
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