Quebecor Inc. (TSX: QBR.A)(TSX: QBR.B) ("Quebecor" or the
"Corporation") today reported its consolidated financial results
for the first quarter of 2011. Quebecor consolidates the financial
results of its Quebecor Media Inc. ("Quebecor Media") subsidiary,
in which it holds a 54.7% interest.
Quebecor adopted International Financial Reporting Standards
("IFRS") on January 1, 2011. The Corporation's consolidated
financial statements for the three-month period ended March 31,
2011 have therefore been prepared in accordance with IFRS and
comparative data for 2010 have been restated. For more information,
see "Transition to IFRS" below.
Highlights since end of 2010
-- Quebecor records revenues of $990.5 million in the first quarter of
2011, up $42.4 million (4.5%) from the same quarter of 2010.
-- Operating income(1): $294.3 million, up $3.9 million (1.3%) from the
first quarter of 2010.
-- Net income attributable to shareholders: $34.3 million ($0.53 per basic
share) compared with $34.9 million ($0.54 per basic share) in the first
quarter of 2010, a decrease of $0.6 million ($0.01 per basic share) or
-1.7%.
-- Adjusted income from continuing operations(2): $35.9 million in the
first quarter of 2011 ($0.56 per basic share) compared with $43.4
million ($0.67 per basic share) in the first quarter of 2010, a decrease
of $7.5 million ($0.11 per basic share) or -17.3%.
-- Videotron Ltd. ("Videotron") net customer base change during three-month
period ended March 31, 2011: +28,600 subscriber connections to mobile
telephone service, +15,500 customers for cable telephone service,
+11,500 for cable Internet access, -3,000 for cable television services
(including 24,100 customer increase for Digital TV).
-- Videotron's new mobile services network, launched in September 2010, is
upgraded from 3G+ to 4G ("4G network").
-- 143,600 subscriber connections to Videotron's 4G network as of March 31,
2011, including 86,100 new connections and 57,500 migrations from the
mobile virtual network operator ("MVNO") service.
-- Pooling of sales forces at the national level and capital expenditures
plan in the News Media segment in order to increase revenue streams; new
contracts signed with Jean Coutu Group (PJC) Inc., Michael Rossy Ltd.,
Golf Town, Metro-Richelieu Inc. and PepsiCo.
(1) See "Operating income" under "Definitions."
(2) See "Adjusted income from continuing operations" under
"Definitions."
"Quebecor posted revenue and operating income growth in the
first quarter of 2011 despite the impact of major investments in
new products and services in 2011 for the purpose of protecting and
expanding our markets, without affecting our financial position,"
said Pierre Karl Peladeau, President and Chief Executive Officer of
Quebecor.
"In an increasingly competitive industry, Videotron continued
growing its customer base. It has added an average of nearly 12,500
new customers per month to its new mobile services network since it
launched in September 2010, exceeding targets. In view of our
mobile services' success to date, we are confident that our 4G
network will achieve strong market penetration in all the areas
where it has been rolled out. The 4G network now covers 90% of
Videotron's service area and is available to more than four million
people in Quebec.
"However, the roll-out of Videotron's new mobile services
network negatively impacted net income in the first quarter of
2011. In the first months following a product launch, the revenues
generated by the new product are not sufficient to cover the higher
expenses, including amortization charges in the case of the 4G
network. The impact is particularly evident in the first quarter
2011 comparative figures for adjusted income from continuing
operations.
"The News Media segment, which continued adapting to new market
realities, completed several stages in its revenue stream
development plan during the quarter. The results include a
five-year printing agreement with Jean Coutu Group. The estimated
$50.0 million contract, one of the largest commercial contracts in
Quebec, calls for the printing of approximately 150 million items
per year.
"The Quebecor Media Network's breadth, combined with Quebecor
Media's state-of-the-art printing platform, position the
Corporation as a supplier of choice when major retail printing and
distribution contracts in Canada come up for renewal. The Quebecor
Media Network now reaches nearly 90% of Quebec households and more
than 50% of the Ontario market; it also has a significant presence
in western Canada. The Quebecor Media Network now serves a total of
6.2 million households across Canada each week, almost 2.0 million
more than its nearest competitor.
"In the News Media segment's publishing operations, Sun Media
Corporation's urban dailies and free newspapers registered an
average 5.1% net increase in readership in the NADbank 2010 survey,
while competitors' readership was virtually flat at 0.8% growth.
Among other things, NADbank's numbers confirmed the strength of Le
Journal de Montreal and the Toronto Sun in their respective
markets. The survey also showed that the Corporation's spending on
its 24 Hourstm and 24 heuresmc newspapers is paying off, with 7.6%
growth in their national readership.
"While the series of investments made by the Corporation over
the past several quarters continue cutting into the News Media
segment's results, we believe that the initiatives taken to date
will equip it to take full advantage of future growth
opportunities.
"Following up on the initiatives it launched during 2010,
Quebecor forged ahead with various projects during the first
quarter of 2011 to position itself for the coming years. The
acquisition of Les Hebdos Monteregiens' 15 community newspapers,
the end of the labour dispute at Le Journal de Montreal, the
opening of the QMI Agency's Ottawa bureau, the launch of the Sun
News and Mlle specialty channels, the agreement on usage and naming
rights to the future arena in Quebec City, and the signing of
numerous multiplatform advertising agreements are all concrete
steps taken in the first quarter as part of our convergence and
synergy strategy. We plan to continue along the same path in order
to stand out in the Canadian media and telecommunications
landscape, constantly pursuing the goal of creating value for the
Corporation and its shareholders."
Table 1
Quebecor first quarter financial highlights, 2007-2011
(in millions of Canadian dollars, except per basic share data)
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2011(1) 2010(1) 2009(2) 2008(2) 2007(2)
--------------------------------------------------------------------------
Revenues $ 990.5 $ 948.1 $ 903.3 $ 884.7 $ 757.3
Operating income(3) 294.3 290.4 272.2 256.7 183.5
Net income from continuing
operations attributable to
shareholders 34.3 34.9 57.7 45.1 3.4
Net income (loss)
attributable to
shareholders 34.3 34.9 57.7 428.4 (14.4)
Adjusted income from
continuing operations(4) 35.9 43.4 43.1 34.6 16.8
Per basic share:
Net income from continuing
operations attributable
to shareholders 0.53 0.54 0.90 0.70 0.05
Net income (loss)
attributable to
shareholders 0.53 0.54 0.90 6.66 (0.22)
Adjusted income from
continuing operations(4) 0.56 0.67 0.67 0.54 0.26
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1 Financial figures for the first quarters of 2011 and 2010 have been
prepared in accordance with IFRS (see "Transition to IFRS" below).
2 Financial figures for the first quarters of 2007 to 2009 have been
prepared in accordance with Canadian GAAP (see "Transition to IFRS"
below).
3 See "Operating income" under "Definitions."
4 See "Adjusted income from continuing operations" under "Definitions."
Analysis of first quarter 2011 results
-- Revenues: $990.5 million, an increase of $42.4 million (4.5%).
-- Revenues increased in Telecommunications (by $49.7 million or 9.4%
of segment revenues) and in Interactive Technologies and
Communications ($3.0 million or 12.6%).
-- Revenues flat in the Leisure and Entertainment segment.
-- Revenues decreased in News Media ($2.8 million or -1.1%), mainly
because of lower circulation revenues, and in the Broadcasting
segment ($2.5 million or -2.3%).
-- Operating income: $294.3 million, an increase of $3.9 million (1.3%).
-- Operating income decreased in News Media (by $9.5 million or -23.0%
of segment operating income), Telecommunications ($1.5 million or
-0.6%), Broadcasting ($1.1 million or -19.3%) and Interactive
Technologies and Communications ($0.1 million or -10.0%).
-- Operating income increased in Leisure and Entertainment ($1.4
million).
-- The change in the fair value of Quebecor Media stock options
resulted in a $4.8 million favourable variance in the stock-based
compensation charge in the first quarter of 2011 compared with the
same period of 2010. The change in the fair value of Quebecor stock
options resulted in a $17.3 million favourable variance in the
Corporation's stock-based compensation charge in the first quarter
of 2011.
-- Excluding the impact of the consolidated stock-based compensation
charge, and if the figures for prior periods were restated to
retroactively reflect the reversal in the fourth quarter of 2009 of
the accumulated Canadian Radio-television and Telecommunications
Commission ("CRTC") Part II licence fee provision, operating income
would have decreased 5.9% in the first quarter of 2011, compared
with a 12.0% increase in the same period of 2010.
-- Net income attributable to shareholders: $34.3 million ($0.53 per basic
share) compared with $34.9 million ($0.54 per basic share) in the first
quarter of 2010, a decrease of $0.6 million ($0.01 per basic share) or
-1.7%.
-- The decrease was mainly due to:
-- $31.9 million increase in amortization charge;
-- $7.1 million increase in charge for restructuring of operations,
impairment of assets and other special items.
Partially offset by:
-- $15.2 million favourable variance in gains and losses on
valuation and translation of financial instruments;
-- $13.9 million decrease in net income attributable to non-
controlling interest;
-- $3.9 million increase in operating income;
-- $3.4 million decrease in income tax.
-- Adjusted income from continuing operations: $35.9 million in the first
quarter of 2011 ($0.56 per basic share) compared with $43.4 million
($0.67 per basic share) in the first quarter of 2010, a decrease of $7.5
million ($0.11 per basic share) or -17.3%.
Financing Activities
On January 5, 2011, Quebecor Media completed the issuance of
Senior Notes in the aggregate principal amount of $325.0 million,
for net proceeds of $319.9 million (net of financing fees). The
Notes bear interest at a rate of 7 3/8% and mature in January 2021.
This transaction marks Quebecor Media's inaugural offering on the
Canadian high-yield market, adding to its established presence in
the U.S. high-yield market. Quebecor Media used the net proceeds
from the placement primarily to finance the early repayment and
withdrawal, on February 15, 2011, of all of Sun Media Corporation's
7 5/8% Senior Notes maturing on February 15, 2013, in the aggregate
principal amount of US$205.0 million, and to finance the settlement
and cancellation of related hedges.
Transition to IFRS
On January 1, 2011, Canadian Generally Accepted Accounting
Principles ("GAAP"), as used by publicly accountable enterprises,
were fully converged to IFRS. Accordingly, the interim consolidated
financial statements for the three-month period ended March 31,
2011 are the first financial statements the Corporation prepared in
accordance with IFRS. Prior to the adoption of IFRS, for all
periods up to and including the year ended December 31, 2010, the
Corporation's consolidated financial statements were prepared in
accordance with Canadian GAAP. IFRS uses a conceptual framework
similar to Canadian GAAP, but there are significant differences
related to recognition, measurement and disclosures.
The date of the opening balance sheet under IFRS and the date of
transition to IFRS are January 1, 2010. The financial data for 2010
have therefore been restated. The Corporation is also required to
apply IFRS accounting policies retrospectively to determine its
opening balance sheet, subject to certain exemptions. However, the
Corporation is not required to restate figures for periods prior to
January 1, 2010 that were previously prepared in accordance with
Canadian GAAP.
The new significant accounting policies under IFRS are disclosed
in note 1 to the consolidated financial statements for the
three-month period ended March 31, 2011, while note 16 explains
adjustments made by the Corporation in preparing its IFRS opening
consolidated balance sheet as of January 1, 2010 and in restating
its previously published Canadian GAAP consolidated financial
statements for the three-month period ended March 31, 2010 and the
year ended December 31, 2010. Note 16 also provides details on
exemption choices made by the Corporation with respect to the
general principle of retrospective application of IFRS.
Dividends
On May 25, 2011, 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 July 5,
2011 to shareholders of record at the close of business on June 10,
2011. This dividend is designated to be an eligible dividend,
pursuant to 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 first
quarter of 2011, please refer to the Management Discussion and
Analysis and consolidated financial statements of Quebecor,
available on the Corporation's website at:
www.quebecor.com/en/quarterly_doc_quebecor_inc or from the SEDAR
filing service at www.sedar.com.
Conference call for investors and webcast
Quebecor will hold a conference call to discuss its first
quarter 2011 results on May 26, 2011, at 4:30 p.m. ET. There will
be a question period reserved for financial analysts. To access the
conference call, please dial 1 877 293-8052, access code 58309#. A
tape recording of the call will be available from May 26 to June
26, 2011 by dialling 1 877 293-8133, conference number 543597# and
access code 58309#. The conference call will also be broadcast live
on Quebecor's website at
www.quebecor.com/en/content/conference-call. 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 of Quebecor's Management Discussion and
Analysis for the year ended December 31, 2010.
The forward-looking statements in this press release reflect
Quebecor's expectations as of May 26, 2011 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 Corporation
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 with more than 16,000 employees. Quebecor Media Inc.'s
operating subsidiaries include Videotron Ltd., an integrated
communications company engaged in cable television, interactive
multimedia development, Internet access services, cable telephone
service and mobile telephone service; Sun Media Corporation, the
largest publisher of newspapers in Canada; Canoe.ca, operator of a
Canadian network of English- and French-language Internet
properties; TVA Group Inc., operator of the largest French-language
conventional television network in Quebec, a number of specialty
channels, and the English-language Sun News Network; and Nurun
Inc., a major interactive technologies and communications agency
with offices in Canada, the United States, Europe and Asia.
Quebecor Media Inc. is engaged in magazine publishing (TVA
Publishing Inc.); book publishing and distribution (Sogides Group
Inc. and CEC Publishing Inc.); production, distribution and
retailing of entertainment products (Archambault Group Inc. and TVA
Films); rental and retailing of DVDs, Blu-ray discs and console
games (Le SuperClub Videotron ltee); printing and distribution of
community newspapers and flyers (Quebecor Media Printing Inc. and
Quebecor Media Network Inc.); production and dissemination of news
content (QMI Agency); multiplatform advertising (QMI Sales); and
print and online directories (Quebecor MediaPages™).
DEFINITIONS
Operating Income
In its analysis of operating results, the Corporation uses
operating income, as reported in its consolidated statement of
income, to assess its financial performance. The Corporation's
management and Board of Directors use this measure in evaluating
the Corporation's consolidated results and the results of its
operating segments. This measure is unaffected by the capital
structure or investment activities of the Corporation and its
segments. Operating income is also relevant because it is a
significant component of the Corporation's annual incentive
compensation programs. Operating income is defined as an additional
IFRS measure.
Previously, under Canadian GAAP, operating income was a non-GAAP
measure (see "Transition to IFRS" above). The Corporation defined
operating income as net income in accordance with Canadian GAAP
before amortization, financial expenses, gain (loss) on valuation
and translation of financial instruments, charge for restructuring
of operations, impairment of assets and other special items, loss
on debt refinancing, income tax, and non-controlling interest.
Operating income as used by the Corporation may not be the same
as similarly titled measures reported by other companies.
Adjusted income from continuing operations
The Corporation defines adjusted income from continuing
operations, as reconciled to net income attributable to
shareholders under IFRS, as net income attributable to shareholders
before gain (loss) on valuation and translation of financial
instruments, charge for restructuring of operations, impairment of
assets and other special items, and loss on debt refinancing, net
of income tax and net income attributable to non-controlling
interest. Adjusted income from continuing operations, as defined
above, is not a measure of results that is consistent with IFRS. It
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Adjusted
income from continuing operations eliminates the impact of unusual
or one-time items. The Corporation's definition of adjusted income
from continuing operations may not be identical to similarly titled
measures reported by other companies.
Table 2 provides a reconciliation of adjusted income from
continuing operations to the net income attributable to
shareholders measure used in Quebecor's consolidated financial
statements.
Table 2
Reconciliation of the adjusted income from continuing operations measure
used in this press release to the net income attributable to shareholders
measure used in the consolidated financial statements
(in millions of Canadian dollars)
Three months ended March 31
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2011 2010
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Adjusted income from continuing operations $ 35.9 $ 43.4
Gain (loss) on valuation and translation of
financial instruments 10.5 (4.7)
Restructuring of operations, impairment of
assets and other
special items (9.5) (2.4)
Loss on debt refinancing (9.3) (10.4)
Income tax related to adjustments(1) 4.4 4.9
Net income attributable to non-controlling
interest related to adjustments 2.3 4.1
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Net income attributable to shareholders $ 34.3 $ 34.9
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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 the Corporation uses to measure
its monthly cable television, Internet access, cable telephone and
mobile telephone revenues per average basic cable customer. ARPU is
not a measurement that is consistent with IFRS and the
Corporation's definition and calculation of ARPU may not be the
same as identically titled measurements reported by other
companies. The Corporation calculates ARPU by dividing its combined
cable television, Internet access, cable telephone and mobile
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)
Three months ended
(unaudited) March 31
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2011 2010
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Revenues
Telecommunications $ 578.0 $ 528.3
News Media 245.3 248.1
Broadcasting 107.1 109.6
Leisure and Entertainment 61.4 61.3
Interactive Technologies and Communications 26.8 23.8
Inter-segment (28.1) (23.0)
---------------------
990.5 948.1
Cost of sales, selling and administrative expenses 696.2 657.7
---------------------
Operating income 294.3 290.4
Amortization 121.5 89.6
Financial expenses 81.4 82.3
(Gain) loss on valuation and translation of financial
instruments (10.5) 4.7
Restructuring of operations, impairment of assets and
other special items 9.5 2.4
Loss on debt refinancing 9.3 10.4
---------------------
Income before income taxes 83.1 101.0
Income taxes:
Current 0.4 20.8
Deferred 19.4 2.4
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19.8 23.2
---------------------
Net income $ 63.3 $ 77.8
---------------------
---------------------
Net income attributable to:
Shareholders $ 34.3 $ 34.9
Non-controlling interests 29.0 42.9
---------------------
---------------------
Earnings per share attributable to shareholders
Basic
Net income $ 0.53 $ 0.54
Diluted
Net income 0.52 0.53
---------------------
---------------------
Number of shares outstanding (in millions) 64.3 64.3
Number of diluted shares (in millions) 65.0 64.8
---------------------
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
Three months ended
(unaudited) March 31
-------------------------------------------------------------------------
2011 2010
-------------------------------------------------------------------------
Net income $ 63.3 $ 77.8
Other comprehensive income :
Gain (loss) on translation of net investments in
foreign operations 0.5 (3.5)
Cash flow hedges:
Gain on valuation of derivative financial
instruments 0.8 26.8
Deferred income taxes 2.2 (1.4)
Defined benefit plans:
Net change in asset limit or in minimum funding
liability (0.1) (1.4)
Deferred income taxes - 0.4
Reclassification to income of other comprehensive
loss related to cash flow hedges, net of income
taxes of $2.0 million - 4.5
---------------------
3.4 25.4
---------------------
Comprehensive income $ 66.7 $ 103.2
---------------------
---------------------
Attributable to:
Shareholders $ 36.2 $ 49.0
Non-controlling interests 30.5 54.2
---------------------
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QUEBECOR INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian dollars)
Three months ended
(unaudited) March 31
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2011 2010
---------------------------------------------------------------------------
Operating income
Telecommunications $ 251.0 $ 252.5
News Media 31.8 41.3
Broadcasting 4.6 5.7
Leisure and Entertainment 1.2 (0.2)
Interactive Technologies and Communications 0.9 1.0
Head Office 4.8 (9.9)
---------------------
$ 294.3 $ 290.4
---------------------
---------------------
Amortization
Telecommunications $ 100.3 $ 67.2
News Media 13.0 14.6
Broadcasting 4.1 3.7
Leisure and Entertainment 2.3 2.3
Interactive Technologies and Communications 0.8 0.9
Head Office 1.0 0.9
---------------------
$ 121.5 $ 89.6
---------------------
---------------------
Additions to property, plant and equipment
Telecommunications $ 178.6 $ 126.2
News Media 5.9 2.3
Broadcasting 8.9 3.6
Leisure and Entertainment 0.4 0.8
Interactive Technologies and Communications 1.0 0.5
Head Office 0.4 0.4
---------------------
$ 195.2 $ 133.8
---------------------
---------------------
Additions to intangible assets
Telecommunications $ 15.5 $ 15.7
News Media 2.1 2.7
Broadcasting 0.8 0.4
Leisure and Entertainment 1.2 1.4
---------------------
$ 19.6 $ 20.2
---------------------
---------------------
Externally acquired intangible assets 6.4 5.5
Internally generated intangible assets 13.2 14.7
---------------------
$ 19.6 $ 20.2
---------------------
---------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions of Canadian dollars)
(unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity attributable to shareholders
-----------------------------------------------------
Accumulated
other com-
Capital Contributed Retained prehensive
stock surplus earnings loss
----------------------------------------------------------------------------
Balance as of December
31, 2009 as previously
reported under
Canadian GAAP $ 346.6 $ 4.7 $ 830.1 $ (11.0)
IFRS adjustments - (2.7) (73.5) 1.0
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Balance as of January
1, 2010 346.6 2.0 756.6 (10.0)
Net income - - 34.9 -
Other comprehensive
income - - - 14.1
Dividends - - (3.2) -
----------------------------------------------------------------------------
Balance as of March 31,
2010 346.6 2.0 788.3 4.1
Net income - - 190.4 -
Other comprehensive
loss - - - (15.8)
Acquisition of non-
controlling interests - (1.1) - -
Dividends - - (9.7) -
----------------------------------------------------------------------------
Balance as of December
31, 2010 346.6 0.9 969.0 (11.7)
Net income - - 34.3 -
Other comprehensive
income - - - 1.9
Dividends - - (3.2) -
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Balance as of March 31,
2011 $ 346.6 $ 0.9 $ 1,000.1 $ (9.8)
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions of Canadian dollars)
(unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Equity
attributable
to non-
controlling Total
interests equity
---------------------------------------------------------------------------
Balance as of December
31, 2009 as previously
reported under
Canadian GAAP $ - $ 1,170.4
IFRS adjustments 1,162.6 1,087.4
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Balance as of January
1, 2010 1,162.6 2,257.8
Net income 42.9 77.8
Other comprehensive
income 11.3 25.4
Dividends (9.1) (12.3)
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Balance as of March 31,
2010 1,207.7 2,348.7
Net income 188.4 378.8
Other comprehensive
loss (14.4) (30.2)
Acquisition of non-
controlling interests (1.9) (3.0)
Dividends (32.9) (42.6)
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Balance as of December
31, 2010 1,346.9 2,651.7
Net income 29.0 63.3
Other comprehensive
income 1.5 3.4
Dividends (11.9) (15.1)
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Balance as of March 31,
2011 $ 1,365.5 $ 2,703.3
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
Three months ended
(unaudited) March 31
---------------------------------------------------------------------------
2011 2010
---------------------------------------------------------------------------
Cash flows related to operating activities
Net income $ 63.3 $ 77.8
Adjustments for:
Amortization of property, plant and equipment 93.0 76.9
Amortization of intangible assets 28.5 12.7
(Gain) loss on valuation and translation of
financial instruments (10.5) 4.7
Loss on debt refinancing 9.3 10.4
Amortization of financing costs and long-term debt
discount 3.0 3.0
Deferred income taxes 19.4 2.4
Other 0.3 1.2
---------------------
206.3 189.1
Net change in non-cash balances related to operating
activities (35.6) (33.5)
---------------------
Cash flows provided by operating activities 170.7 155.6
---------------------
Cash flows related to investing activities
Business acquisitions, net of cash and cash
equivalents (45.1) (1.0)
Additions to property, plant and equipment (195.2) (133.8)
Additions to intangible assets (19.6) (20.2)
Net change in temporary investments - 30.0
Net change in cash and cash equivalents in trust 2.9 -
Other 0.2 2.4
---------------------
Cash flows used in investing activities (256.8) (122.6)
---------------------
Cash flows related to financing activities
Net change in bank indebtedness (3.2) (0.5)
Net change under revolving facilities (8.3) 10.1
Issuance of long-term debt, net of financing fees 319.9 293.9
Repayment of long-term debt (224.9) (188.7)
Settlement of hedging contracts (105.4) (30.9)
Dividends (11.3) (8.5)
---------------------
Cash flows (used in) provided by financing activities (33.2) 75.4
---------------------
Net change in cash and cash equivalents (119.3) 108.4
Effect of exchange rate changes on cash and cash
equivalents denominated in foreign currencies 0.2 (0.7)
Cash and cash equivalents at beginning of period 242.7 300.0
---------------------
Cash and cash equivalents at end of period $ 123.6 $ 407.7
---------------------
---------------------
Cash and cash equivalents consist of
Cash $ 25.3 $ 126.6
Cash equivalents 98.3 281.1
---------------------
$ 123.6 $ 407.7
---------------------
---------------------
Non-cash investing activities
Net change in additions to property, plant and
equipment and intangible assets financed with
accounts payable $ 37.8 $ 17.6
---------------------
---------------------
Interest and taxes reflected as operating activities
Cash interest payments $ 36.1 $ 37.3
Cash income tax payments (net of refunds) 13.9 17.7
---------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited) March 31 December 31 January 1
---------------------------------------------------------------------------
2011 2010 2010
---------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 123.6 $ 242.7 $ 300.0
Cash and cash equivalents in trust 2.4 5.3 5.3
Temporary investments - - 30.0
Accounts receivable 496.8 588.5 519.8
Income taxes 7.6 6.4 1.3
Inventories 238.6 245.2 176.1
Prepaid expenses 50.1 38.0 29.1
-----------------------------------
919.1 1,126.1 1,061.6
Non-current assets
Property, plant and equipment 2,883.0 2,812.9 2,469.5
Intangible assets 1,027.1 1,029.1 1,022.2
Goodwill 3,536.9 3,505.2 3,506.1
Derivative financial instruments 9.2 28.7 49.0
Deferred income taxes 22.6 20.3 38.1
Other assets 94.4 93.8 93.7
-----------------------------------
7,573.2 7,490.0 7,178.6
-----------------------------------
Total assets $ 8,492.3 $8,616.1 $8,240.2
-----------------------------------
-----------------------------------
Liabilities and equity
Current liabilities
Bank indebtedness $ 2.5 $ 5.7 $ 1.8
Accounts payable and accrued charges 677.7 753.6 751.2
Provisions 55.9 72.2 72.6
Deferred revenue 246.0 275.1 234.7
Income taxes 7.9 33.6 16.3
Current portion of long-term debt 15.2 30.8 68.6
-----------------------------------
1,005.2 1,171.0 1,145.2
Non-current liabilities
Long-term debt 3,605.5 3,587.3 3,811.9
Derivative financial instruments 440.1 479.9 422.4
Other liabilities 266.3 274.0 218.3
Deferred income taxes 471.9 452.2 384.6
-----------------------------------
4,783.8 4,793.4 4,837.2
Equity
Capital stock 346.6 346.6 346.6
Contributed surplus 0.9 0.9 2.0
Retained earnings 1,000.1 969.0 756.6
Accumulated other comprehensive loss (9.8) (11.7) (10.0)
-----------------------------------
Equity attributable to shareholders 1,337.8 1,304.8 1,095.2
Non-controlling interests 1,365.5 1,346.9 1,162.6
-----------------------------------
2,703.3 2,651.7 2,257.8
-----------------------------------
Total liabilities and equity $ 8,492.3 $8,616.1 $8,240.2
-----------------------------------
-----------------------------------
Contacts: Jean-Francois Pruneau Chief Financial Officer Quebecor
Inc. and Quebecor Media Inc. 514 380-4144 jean
francois.pruneau@quebecor.com J. Serge Sasseville Vice President,
Corporate and Institutional Affairs Quebecor Media Inc. 514
380-1864 serge.sasseville@quebecor.com
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