Quebecor Inc. ("Quebecor") (TSX: QBR.A)(TSX: QBR.B) today reported
its consolidated financial results for the third quarter of 2009.
Quebecor consolidates the financial results of its Quebecor Media
Inc. subsidiary ("Quebecor Media"), in which it holds a 54.7%
interest.
Highlights since end of second quarter 2009
- Quebecor records revenues of $918.4 million, up $10.3 million
(1.1%) from third quarter 2008.
- Operating income (1): up $23.6 million (8.5%) to $301.0
million.
- Net income: $69.4 million ($1.08 per basic share), up $23.7
million ($0.37 per basic share) or 51.9% from $45.7 million ($0.71
per basic share) in the same period of 2008.
- Adjusted income from continuing operating activities (2):
$52.9 million ($0.82 per basic share), up $10.4 million ($0.16 per
basic share), or 24.5%, from $42.5 million ($0.66 per basic share)
in the same period of 2008.
- Telecommunications segment: operating income up $34.7 million
(17.3%). Customer growth in third quarter 2009: +44,300 for cable
telephone service, +35,500 for cable Internet access, +27,100 for
cable television service (including 52,100-customer increase for
illico Digital TV), +6,300 activated phones for wireless telephone
service.
- illico Digital TV service provided by Videotron Ltd.
("Videotron") passes million-subscriber mark.
- Restructuring and other cost-reduction initiatives in News
Media segment generate estimated savings of $45.0 million in first
nine months of 2009.
"Quebecor's results trended strongly upward in the third quarter
of 2009 with a 51.9% increase in net income to $69.4 million, or
$1.08 per basic share," said Pierre Karl Peladeau, President and
Chief Executive Officer of Quebecor. "Videotron again posted a
significant increase in operating income, reflecting customer
growth for all its services for the 17th consecutive quarter. At
the same time, Videotron is pressing ahead with its advanced
wireless services network project. As of September 30, 2009, all
service and switching platforms had been installed, as well as the
interconnections with Videotron's existing network. The build-out
of antenna sites is proceeding on schedule. For nearly 60% of these
sites, leases have been signed or tower-sharing requests accepted
and the equipment is being installed. Meanwhile, in the News Media
segment, cost-cutting efforts continued to pay off. Total
year-to-date savings generated by these initiatives are estimated
at $45.0 million."
Table 1
Quebecor third quarter financial highlights, 2005-2009
(in millions of Canadian dollars, except per share data)
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2009 2008 2007 2006 2005
Revenues $918.4 $908.1 $834.6 $718.6 $649.1
Operating income(1) 301.0 277.4 256.9 191.9 173.7
Income from
continuing
operations 67.8 45.7 80.5 27.2 14.8
Net income (loss) 69.4 45.7 (35.0) 33.6 22.2
Adjusted income
from continuing
operating
activities(2) 52.9 42.5 42.3 25.4 17.1
Per share data:
Income from
continuing
operations 1.06 0.71 1.25 0.42 0.23
Net income (loss) 1.08 0.71 (0.54) 0.52 0.35
Adjusted income
from continuing
operating
activities(2) 0.82 0.66 0.66 0.40 0.27
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(1) See "Operating income" under "Definitions."
(2) See "Adjusted income from continuing operations" under
"Definitions."
Analysis of third quarter 2009 results
- Quebecor's revenues increased $10.3 million (1.1%) to $918.4 million.
- Revenues increased in the following segments: Telecommunications (by
$50.8 million or 11.2% of segment revenues) mainly because of customer
growth for all services, and in Leisure and Entertainment ($4.8 million
or 6.4%).
- Revenues decreased in News Media ($41.6 million or -14.7%) due
essentially to lower advertising revenues, Broadcasting ($3.1 million
or -3.4%) and Interactive Technologies and Communications ($0.4 million
or -1.9%).
- Operating income increased $23.6 million (8.5%) to $301.0 million, due
primarily to an increase in the Telecommunications segment ($34.7 million
or 17.3% of segment operating income). Operating income rose $3.2 million
(36.8%) in the Leisure and Entertainment segment and decreased $7.7
million (-14.6%) in News Media.
- Quebecor's net income totalled $69.4 million ($1.08 per basic share),
compared with $45.7 million ($0.71 per basic share) in the same period of
2008, an increase of $23.7 million ($0.37 per basic share) or 51.9%.
- The increase was mainly due to:
- $26.7 million favourable variance in gain on valuation and translation
of financial instruments resulting primarily from the fluctuation in
the fair value of early settlement options;
- $23.6 million increase in operating income;
- $8.1 million decrease in financial expenses.
Partially offset by:
- $21.7 million increase in non-controlling interest;
- $9.7 million increase in amortization charge;
- $3.0 million increase in income tax expense.
- Adjusted income from continuing operating activities: $52.9 million in
the third quarter of 2009 ($0.82 per basic share), compared with $42.5
million ($0.66 per basic share) in the same period of 2008, an increase
of $10.4 million ($0.16 per basic share) or 24.5%.
Analysis of year-to-date operating results
- Quebecor's revenues totalled $2.75 billion, an increase of $26.5 million
(1.0%).
- Revenues increased in the following segments: Telecommunications (by
$137.6 million or 10.3% of segment revenues), Leisure and Entertainment
($10.8 million or 5.4%), Interactive Technologies and Communications
($1.9 million or 2.9%) and Broadcasting ($0.7 million or 0.2%).
- Revenues decreased in News Media (by $123.7 million or -14.1%).
- Operating income increased $78.1 million (9.6%) to $889.1 million, due
primarily to an increase in the Telecommunications segment ($112.2
million or 19.4% of segment operating income). Operating income decreased
in News Media (by $42.1 million or -24.4%).
The increase in operating income includes an $18.0 million favourable
variance (including $13.9 million in the Telecommunications segment and
$4.1 million in the Broadcasting segment) related to recognition during
the first nine months of 2008 of a retroactive provision for Canadian
Radio-television and Telecommunications Commission ("CRTC") Part II
licence fees ("Part II fees").
- Quebecor's net income was $203.9 million ($3.17 per basic share),
compared with $531.6 million ($8.27 per basic share) in the same period
of 2008.
- Favourable variances in the following items:
- $78.1 million increase in operating income;
- $38.2 million decrease in financial expenses;
- $15.4 million decrease in income tax expense;
- $13.7 million favourable variance in gain on valuation and translation
of financial instruments;
were outweighed by:
- recognition in first quarter of 2008 of income from discontinued
operations in the amount of $383.3 million, compared with $1.6 million
in the third quarter of 2009;
- $51.2 million increase in non-controlling interest;
- $22.8 million increase in amortization charge;
- recognition of a $13.6 million non-cash impairment charge for goodwill
and intangible assets during the first nine months of 2009.
- Adjusted income from continuing operating activities: $152.3 million for
the first nine months of 2009 ($2.37 per basic share), compared with
$118.6 million ($1.85 per basic share) in the same period of 2008, an
increase of $33.7 million ($0.52 per basic share) or 28.4%.
Event after end of third quarter 2009
With respect to the Part II fees payable to the CRTC, Videotron
and TVA Group Inc. ("TVA Group") agreed on an out-of-court
settlement on October 7, 2009 whereby they withdrew their legal
challenge and monetary claims, and the government agreed not to
claim the unpaid Part II fees for the period of September 1, 2006
through August 31, 2009. In view of this settlement, Quebecor will
reverse in the fourth quarter of 2009 provisions totalling $42.8
million for unpaid Part II fees as of August 31, 2009. Under the
out-of-court settlement, the government also undertook to recommend
that the CRTC amend its regulations to limit the amount of the Part
II fees for periods subsequent to August 31, 2009. To date,
however, the current regulatory rate remains applicable to Quebecor
and will continue to apply until such time as it is amended by the
CRTC.
Dividends
On November 4, 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 December
15, 2009 to shareholders of record at the close of business on
November 20, 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 third
quarter of 2009, please refer to the Management Discussion and
Analysis and consolidated financial statements of Quebecor,
available on the Quebecor'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 third
quarter 2009 results of Quebecor and Quebecor Media on November 5,
2009, at 11:00 a.m. EST. 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 November 5 to December 5, 2009 by dialling 1
877 293-8133, access code 975898#. 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 November 5, 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; Quebecor Media Network, provider of flyer printing and
distribution services; 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, Quebecor 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. Quebecor
uses operating income in order to assess the performance of its
investment in Quebecor Media. Quebecor's management and Board of
Directors use this measure in evaluating its consolidated results
as well as the results of Quebecor'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 Quebecor and its
segments. Operating income is also relevant because it is a
significant component of Quebecor'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 Quebecor's segments. Quebecor 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 Quebecor is engaged.
Quebecor'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 Nine months ended
September 30 September 30
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2009 2008 2009 2008
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Operating income:
Telecommunications $235.7 $201.0 $692.0 $579.8
News Media 44.9 52.6 130.2 172.3
Broadcasting 10.3 10.8 47.8 43.5
Leisure and
Entertainment 11.9 8.7 17.5 9.2
Interactive
Technologies and
Communications 1.0 1.0 2.7 2.1
Head Office (2.8) 3.3 (1.1) 4.1
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301.0 277.4 889.1 811.0
Amortization (86.8) (77.1) (257.2) (234.4)
Financial expenses (65.9) (74.0) (188.8) (227.0)
Gain on valuation and
translation of
financial instruments 31.1 4.4 57.3 43.6
Restructuring of
operations and other
special items (3.9) (2.0) (8.1) (4.3)
Impairment of goodwill
and intangible assets - - (13.6) -
Income tax (41.8) (38.8) (94.1) (109.5)
Non-controlling
interest (65.9) (44.2) (182.3) (131.1)
Income from
discontinued operations 1.6 - 1.6 383.3
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Net income $69.4 $45.7 $203.9 $531.6
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Adjusted income from continuing operating activities
Quebecor 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
Quebecor's operating activities by eliminating the impact of
unusual or one-time items. Quebecor'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 press release to the net income measure used in the
consolidated financial statements
(in millions of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
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2009 2008 2009 2008
-------------------------------------------------------------------------
Adjusted income from
continuing operating
activities $52.9 $42.5 $152.3 $118.6
Gain on valuation and
translation of
financial instruments 31.0 4.4 57.3 43.6
Restructuring of
operations and other
special items (3.9) (2.0) (8.1) (4.3)
Impairment of goodwill
and intangible assets - - (13.6) -
Income tax related to
Adjustments(1) 0.2 2.6 35.2 (3.5)
Non-controlling interest
related to adjustments (12.4) (1.8) (20.8) (6.1)
Income from discontinued
operations 1.6 - 1.6 383.3
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Net income $69.4 $45.7 $203.9 $531.6
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(1) Includes the impact of fluctuations in tax rates applicable to
adjusted items, either for statutory reasons or in connection with
tax planning arrangements.
Average Monthly Revenue per User
ARPU is an industry metric that Quebecor 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 Quebecor's definition and
calculation of ARPU may not be the same as identically titled
measurements reported by other companies. Quebecor 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 Three months ended Nine months ended
dollars, except for earnings September 30 September 30
per share data)
(unaudited)
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2009 2008 2009 2008
--------------------------------------------------------------------------
(restated) (restated)
Revenues
Telecommunications $503.4 $452.6 $1,468.3 $1,330.7
News Media 241.5 283.1 755.7 879.4
Broadcasting 89.2 92.3 310.5 309.8
Leisure and Entertainment 80.0 75.2 212.3 201.5
Interactive Technologies
and Communications 21.2 21.6 67.5 65.6
Head Office and
inter-segment (16.9) (16.7) (60.3) (59.5)
--------------------------------------------------------------------------
918.4 908.1 2,754.0 2,727.5
Cost of sales and selling and
administrative expenses 617.4 630.7 1,864.9 1,916.5
Amortization 86.8 77.1 257.2 234.4
Financial expenses 65.9 74.0 188.8 227.0
Gain on valuation and
translation of financial
instruments (31.1) (4.4) (57.3) (43.6)
Restructuring of operations
and other special items 3.9 2.0 8.1 4.3
Impairment of goodwill
and intangible assets - - 13.6 -
--------------------------------------------------------------------------
Income before income taxes
and non-controlling interest 175.5 128.7 478.7 388.9
Income taxes:
Current 7.6 (1.1) 14.2 1.2
Future 34.2 39.9 79.9 108.3
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41.8 38.8 94.1 109.5
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133.7 89.9 384.6 279.4
Non-controlling interest (65.9) (44.2) (182.3) (131.1)
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Income from continuing
operations 67.8 45.7 202.3 148.3
Income from discontinued
operations 1.6 - 1.6 383.3
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Net income $69.4 $45.7 $203.9 $531.6
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Earnings per share
Basic
From continuing operations $1.06 $ 0.71 $3.15 $2.31
From discontinued
operations 0.02 - 0.02 5.96
Net income 1.08 0.71 3.17 8.27
Diluted
From continuing operations $1.05 $0.71 $3.14 $2.30
From discontinued
operations 0.02 - 0.02 5.96
Net income 1.07 0.71 3.16 8.27
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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) 64.6 64.4 64.6 64.4
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QUEBECOR INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian dollars) Three months ended Nine months ended
(unaudited) September 30 September 30
--------------------------------------------------------------------------
--------------------------------------------------------------------------
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 $235.7 $201.0 $692.0 $579.8
News Media 44.9 52.6 130.2 172.3
Broadcasting 10.3 10.8 47.8 43.5
Leisure and Entertainment 11.9 8.7 17.5 9.2
Interactive Technologies and
Communications 1.0 1.0 2.7 2.1
Head Office (2.8) 3.3 (1.1) 4.1
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$301.0 $277.4 $889.1 $811.0
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Amortization
Telecommunications $63.1 $56.8 $187.2 $169.5
News Media 15.8 13.3 45.7 45.2
Broadcasting 3.6 3.6 10.7 10.2
Leisure and Entertainment 2.2 2.1 7.0 5.8
Interactive Technologies and
Communications 0.9 1.0 3.1 2.9
Head Office 1.2 0.3 3.5 0.8
--------------------------------------------------------------------------
$86.8 $77.1 $257.2 $234.4
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--------------------------------------------------------------------------
Additions to property, plant
and equipment
Telecommunications $114.1 $82.1 $318.0 $265.3
News Media 3.4 20.8 20.2 63.8
Broadcasting 4.3 7.3 12.8 12.9
Leisure and Entertainment 0.4 1.9 1.5 5.6
Interactive Technologies and
Communications 0.4 1.2 2.6 2.6
Head Office 0.6 2.7 2.6 10.1
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$123.2 $116.0 $357.7 $360.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Additions to intangible assets
Telecommunications $23.8 $568.2 $68.8 $587.1
News Media 6.7 5.9 9.5 9.2
Broadcasting 1.2 0.7 4.1 2.5
Leisure and Entertainment 1.0 2.5 3.4 5.3
Interactive Technologies and
Communications 0.2 - 0.2 -
--------------------------------------------------------------------------
$32.9 $ 577.3 $86.0 $604.1
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Externally acquired
intangible assets $22.2 $562.4 $52.2 $571.9
Internally generated
intangible assets 10.7 14.9 33.8 32.2
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$32.9 $577.3 $86.0 $604.1
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian Three months ended Nine months ended
dollars) September 30 September 30
(unaudited)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
(restated) (restated)
Net income $69.4 $45.7 $203.9 $531.6
Other comprehensive income,
net of income taxes and
non-controlling interest:
Unrealized (loss) gain on
translation of net
investments in foreign
operations (0.3) (0.5) (1.1) 0.7
Gain (loss) on valuation
of derivative financial
instruments 16.3 15.5 27.4 (6.6)
Reclassification to income
of other comprehensive
loss related to
discontinued operations - - - 326.5
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16.0 15.0 26.3 320.6
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Comprehensive income $85.4 $60.7 $230.2 $852.2
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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
other Total
Capital Contributed Retained comprehensive shareholders'
stock surplus earnings 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 - - 531.6 - 531.6
Dividends - - (9.6) - (9.6)
Other
comprehensive
income - - - 320.6 320.6
--------------------------------------------------------------------------
Balance as of
September 30,
2008, as
restated 346.6 - 912.2 (1.2) 1,257.6
Net loss - - (343.6) - (343.6)
Dividends - - (3.3) - (3.3)
Other
comprehensive
loss - - - (26.3) (26.3)
--------------------------------------------------------------------------
Balance as of
December 31,
2008, as
restated 346.6 - 565.3 (27.5) 884.4
Net income - - 203.9 - 203.9
Dividends - - (9.6) - (9.6)
Related party
transactions - 4.8 - - 4.8
Other
comprehensive
income - - - 26.3 26.3
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Balance as of
September 30,
2009 $346.6 $4.8 $759.6 $(1.2) $1,109.8
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian Three months ended Nine months ended
dollars) September 30 September 30
(unaudited)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2009 2008 2009 2008
--------------------------------------------------------------------------
(restated) (restated)
Cash flows related to
Operations
Income from continuing
operations $67.8 $45.7 $202.3 $148.3
Adjustments for:
Amortization of property,
plant and equipment 73.8 67.2 220.3 205.3
Amortization of intangible
assets and other assets 13.0 9.9 36.9 29.1
Impairment of goodwill and
intangible assets - - 13.6 -
Gain on valuation and
translation of financial
instruments (31.1) (4.4) (57.3) (43.6)
Amortization of financing
costs and long-term debt
discount 2.7 2.4 7.5 6.7
Future income taxes 34.2 39.9 79.9 108.3
Non-controlling interest 65.9 44.2 182.3 131.1
Other 2.9 (2.2) 0.8 (0.1)
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229.2 202.7 686.3 585.1
Net change in non-cash
balances related to
operations 50.7 38.5 (74.1) (118.8)
--------------------------------------------------------------------------
Cash flows provided by
continuing operations 279.9 241.2 612.2 466.3
Cash flows provided by
discontinued operations - - - 20.5
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Cash flows provided by
operations 279.9 241.2 612.2 486.8
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Cash flows related to
investing activities
Business acquisitions, net
of cash and cash
equivalents (2.1) (8.2) (4.6) (146.7)
Business disposals, net of
cash and cash equivalents 1.3 0.4 12.7 1.6
Additions to property,
plant and equipment (123.2) (116.0) (357.7) (360.3)
Additions to intangible
assets (32.9) (577.3) (86.0) (604.1)
Decrease in cash and cash
equivalents in trust - 218.0 - -
Other 0.9 1.7 1.9 0.8
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Cash flows used in
continuing investing
activities (156.0) (481.4) (433.7) (1,108.7)
Cash flows used in
discontinued investing
activities and cash
and cash equivalents of
WCP at the date of
deconsolidation - - - (117.7)
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Cash flows used in
investing activities (156.0) (481.4) (433.7) (1,226.4)
--------------------------------------------------------------------------
Cash flows related to
financing activities
Net increase in bank
indebtedness 2.9 0.7 14.6 23.8
Issuance of long-term debt,
net of financing fees - 13.8 325.5 463.6
Net borrowings (repayments)
under revolving bank
facilities 7.9 245.7 (214.0) 190.9
Repayments of long-term debt (13.0) (8.4) (36.9) (21.3)
Dividends (3.2) (3.2) (9.6) (9.6)
Dividends paid to
non-controlling shareholders (9.1) (12.2) (27.4) (13.7)
Other 0.1 0.1 0.1 2.7
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Cash flows (used in)
provided by continuing
financing activities (14.4) 236.5 52.3 636.4
Cash flows provided by
discontinued financing
activities - - - 37.3
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Cash flows (used in) provided
by financing activities (14.4) 236.5 52.3 673.7
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Net increase (decrease) in
cash and cash equivalents 109.5 (3.7) 230.8 (65.9)
Effect of exchange rate
changes on cash and cash
equivalents denominated
in foreign currencies (0.2) 1.3 (0.6) 1.5
Cash and cash equivalents at
beginning of period 130.9 4.5 10.0 66.5
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Cash and cash equivalents
at end of period $240.2 $2.1 $240.2 $2.1
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Cash and cash equivalents
consist of
Cash $63.1 $1.2 $63.1 $1.2
Cash equivalents 177.1 0.9 177.1 0.9
--------------------------------------------------------------------------
$240.2 $2.1 $240.2 $2.1
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Continuing operations
Cash interest payments $38.7 $56.1 $189.9 $200.1
Cash income tax payments
(net of refunds) 4.3 3.7 13.1 19.9
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
September 30 2009 December 31 2008
--------------------------------------------------------------------------
(restated)
Assets
Current assets
Cash and cash equivalents $240.2 $10.0
Cash and cash equivalents in trust 5.3 5.3
Accounts receivable 450.3 484.6
Income taxes 2.3 9.4
Inventories and programs,
broadcast and distribution rights 192.7 189.3
Prepaid expenses 40.2 31.5
Future income taxes 61.5 115.2
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992.5 845.3
Property, plant and equipment 2,388.4 2,272.9
Intangible assets 1,027.5 985.9
Derivative financial instruments 106.0 317.9
Other assets 119.2 105.9
Future income taxes 11.3 12.3
Goodwill 3,506.2 3,516.7
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$8,151.1 $8,056.9
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--------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness $26.9 $12.3
Accounts payable and accrued charges 674.5 788.6
Deferred revenues 229.2 224.0
Income taxes 7.5 9.8
Current portion of long-term debt 153.5 42.3
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1,091.6 1,077.0
Long-term debt 3,863.4 4,407.1
Derivative financial instruments 344.7 117.3
Exchangeable debentures and other liabilities 125.8 117.0
Future income taxes 460.0 469.1
Non-controlling interest 1,155.8 985.0
Shareholders' equity
Capital stock 346.6 346.6
Contributed surplus 4.8 -
Retained earnings 759.6 565.3
Accumulated other comprehensive loss (1.2) (27.5)
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1,109.8 884.4
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$8,151.1 $8,056.9
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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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