Quebecor Inc. ("Quebecor")(TSX:QBR.A)(TSX:QBR.B) today reported
Videotron Ltd.'s ("Videotron") 2011 full-year and fourth quarter
financial results.
Videotron's results are being released ahead of schedule due to
certain reporting requirements in Canada and the United States. The
financial year-end process and audit for Quebecor's other business
segments are in progress and have not yet been completed. Quebecor
plans to release its audited consolidated financial results for
2011 on March 15, 2012.
Quebecor and Videotron adopted International Financial Reporting
Standards ("IFRS") on January 1, 2011. Videotron's 2011 full-year
and fourth quarter consolidated financial statements have therefore
been prepared in accordance with IFRS and comparative data for 2010
have been restated. Fore more information, refer to "Transition to
IFRS" below.
2011 highlights
-- Videotron's revenues totalled $2.43 billion, up $201.9 million (9.1%)
from 2010.
-- Operating income(1) up $51.5 million (4.9%) to $1.10 billion.
-- Net income attributable to shareholder down $35.1 million (-6.9%) to
$469.0 million.
-- Videotron recorded its largest annual customer increase since 2008,
adding 375,800 revenue-generating units,(2) 39.3% more than the number
added in 2010.
-- Net increase of 49,900 cable television customers in 2011 (34,600 in
2010), including a 181,200-subscriber increase for the digital
service (135,500 in 2010), the strongest annual growth for the
digital service since it was launched in 1999. Total revenues from
cable television services passed the $1 billion mark.
-- Net increase of 80,400 customers for the cable Internet access
service (81,500 in 2010).
-- Net increase of 91,000 customers for the cable telephony service
(100,300 in 2010).
-- Net increase of 154,500 subscriber connections for the mobile
telephony service. At December 31, 2011, Videotron's 4G network was
available to nearly seven million people in Quebec and eastern
Ontario.
Fourth quarter 2011 highlights
-- Revenues up $43.6 million (7.4%) from the same quarter in 2010 to reach
$634.8 million.
-- Operating income up $31.5 million (12.0%) to $294.7 million.
-- Net income attributable to shareholder up $66.0 million (68.8%) to
$161.9 million.
(1) See "Operating income" under "Definitions."
(2) Revenue-generating units are the sum of cable television, Internet
access and cable telephony service subscriptions, plus subscriber
connections to the mobile telephony service.
2011 operating results
Revenues: $2.43 billion in 2011, an increase of $201.9 million
(9.1%).
-- Combined revenues from all cable television services topped $1 billion
for the first time, increasing by $62.0 million (6.5%) to $1.01 billion,
mainly because of the higher revenue per user generated by increases in
some rates, the success of high definition ("HD") packages, increased
pay TV orders, and the impact of customer base growth.
-- Revenues from Internet access services increased $54.0 million (8.4%) to
$698.2 million. The improvement was mainly due to customer growth,
increases in some rates, and customer migration to upgraded service
plans.
-- Revenues from cable telephony service increased $26.8 million (6.5%) to
$436.7 million, primarily as a result of customer base growth and more
lines per customer.
-- Revenues from mobile telephony service increased $59.6 million (112.1%)
to $112.7 million, essentially due to customer growth resulting largely
from the launch of the new network in September 2010.
-- Revenues of Videotron Business Solutions increased $3.2 million (5.4%)
to $63.0 million, mainly because of higher revenues from network
solutions.
-- Revenues from customer equipment sales decreased $4.0 million (-6.7%) to
$55.9 million, mainly because of campaigns promoting cable television
equipment leasing, partially offset by increased sales of mobile
telephony equipment.
-- Revenues of Le SuperClub Videotron ltee ("Le SuperClub Videotron")
decreased $1.6 million (-6.9%) to $21.6 million, mainly as a result of
store closures in 2011, partially offset by higher franchise fee
revenues.
-- Other revenues increased $1.9 million (6.8%) to $29.9 million.
Average monthly revenue per user(3) ("ARPU"): $103.28 in 2011
compared with $95.73 in 2010, an increase of $7.55 (7.9%).
Customer statistics
Revenue-generating units - As of December 31, 2011, the total
number of revenue-generating units stood at 4,689,900, an increase
of 375,800 (8.7%) from the end of 2010 (Table 1). The net increase
in revenue-generating units in 2011 was 39.3% greater than in 2010
and constituted the largest annual increase, in absolute terms, in
three years. This solid performance was due to the effective
strategy of marketing bundled services, including mobile telephony
service, at a time of technological change in television
broadcasting. The number of revenue-generating units had increased
by 269,700 in 2010.
Cable television - The combined customer base for all of
Videotron's cable television services increased by 49,900 (2.8%) in
2011 (Table 1), compared with an increase of 34,600 in 2010. As of
December 31, 2011, Videotron had 1,861,500 customers for its cable
television services, a household penetration rate of 70.1% (number
of subscribers as a proportion of total homes passed by Videotron's
network, i.e., 2,657,300 homes, as of the end of December 2011),
compared with 69.3% a year earlier.
-- The customer base for the Digital TV service stood at 1,400,800 as at
December 31, 2011, an increase of 181,200 (14.9%) during the year,
compared with a 135,500 increase in 2010 (Table 1). It was the largest
annual customer growth for Digital TV since the service was launched in
1999. As of December 31, 2011, illico Digital TV had a household
penetration rate of 52.7% versus 46.7% a year earlier.
-- Migration from analog to digital service was the main reason for the
131,300 (-22.2%) decrease in the customer base for analog cable
television services in 2011. By comparison, the number of subscribers to
analog cable services decreased by 100,900 in 2010.
Cable Internet access - The number of subscribers to cable
Internet access services stood at 1,332,500 as at December 31,
2011, an increase of 80,400 (6.4%) from year-end 2010, compared
with an increase of 81,500 in 2010 (Table 1). As at December 31,
2011, Videotron's cable Internet access services had a household
penetration rate of 50.1%, compared with 47.9% a year earlier.
Cable telephony service - The number of subscribers to cable
telephony service stood at 1,205,300 as at the end of December
2011, an increase of 91,000 (8.2%) from year-end 2010, compared
with an increase of 100,300 in 2010 (Table 1). As at December 31,
2011, the IP telephony service had a household penetration rate of
45.4%, compared with 42.7% a year earlier.
Mobile telephony service - As of December 31, 2011, the number
of subscriber connections to the mobile telephony service stood at
290,600, an increase of 154,500 (113.5%) from year-end 2010,
compared with an increase of 53,300 connections in 2010 (Table 1).
At December 31, 2011, there were 3,100 connections to the MVNO
network.
(3) The average monthly revenue per user is defined under "Definitions."
Table 1
Telecommunications segment year-end customer numbers (2007-2011)
(in thousands of customers)
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2011 2010 2009 2008 2007
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Cable television:
Analog 460.7 592.0 692.9 788.3 869.9
Digital 1,400.8 1,219.6 1,084.1 927.3 768.2
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1,861.5 1,811.6 1,777.0 1,715.6 1,638.1
Cable Internet 1,332.5 1,252.1 1,170.6 1,063.8 933.0
Cable telephony 1,205.3 1,114.3 1,014.0 852.0 636.4
Mobile telephony(1) 290.6 136.1 82.8 63.4 45.1
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Total (revenue-generating
units) 4,689.9 4,314.1 4,044.4 3,694.8 3,252.6
----------------------------------------------------------------------------
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(1) Thousands of connections
Operating income: $1.10 billion, an increase of $51.5 million
(4.9%).
-- The increase in operating income was mainly due to:
-- impact of higher revenues;
-- reduction in the stock-based compensation charge.
-- Partially offset by:
-- increases in operating expenses, among them costs related to the
roll-out of the 4G network, including acquisition costs of
approximately $489 per subscriber addition (direct costs, including
selling, advertising and marketing expenses and equipment subsidies)
and site overhead costs;
-- capitalization of some operating expenses during the build-out of
the new mobile network, which also explains the unfavourable
variance in operating expenses in 2011 compared with 2010.
Net income attributable to shareholder: $469.0 million, a $35.1
million (-6.9%) decrease.
-- The decrease was mainly due to:
-- $116.4 million increase in amortization charge;
-- $4.8 million increase in financial expenses;
-- $1.2 million increase in charge for restructuring of operations and
other special items.
-- Partially offset by:
-- $51.5 million increase in operating income;
-- $31.8 million favourable variance in gain on valuation and
translation of financial instruments;
-- $4.1 million decrease in income tax expense.
Fourth quarter 2011 operating results
Revenues: $634.8 million, an increase of $43.6 million (7.4%),
essentially due to the same factors as those noted above under
"2011 operating results."
-- Combined revenues from all cable television services increased $15.9
million (6.5%) to $261.8 million.
-- Revenues from Internet access services increased $16.9 million (10.2%)
to $183.2 million.
-- Revenues from cable telephony service increased $4.6 million (4.3%) to
$111.5 million.
-- Revenues from mobile telephony service increased $17.4 million (103.0%)
to $34.3 million.
-- Revenues of Videotron Business Solutions increased $0.5 million (3.1%)
to $16.6 million.
-- Revenues from customer equipment sales decreased $11.2 million (-45.0%)
to $13.7 million.
-- Revenues of Le SuperClub Videotron decreased $0.5 million (-7.1%) to
$6.0 million.
-- Other revenues were flat at $7.7 million.
ARPU: $106.90 in the fourth of quarter 2011, compared with
$98.85 in the same period of 2010, an increase of $8.05 (8.1%).
Customer statistics
Revenue-generating units - 101,800 (2.2%) unit increase in the
fourth quarter of 2011, 20.0% more than the 84,800 unit increase in
the same period of 2010.
Cable television - 17,300 (0.9%) increase in the combined
customer base for all cable television services in the fourth
quarter of 2011, compared with an increase of 9,600 in the same
quarter of 2010.
-- Digital TV: 52,700 (3.9%) subscriber increase in the fourth quarter of
2011, compared with 37,300 in the same period of 2010.
-- Analog cable TV: 35,400 (-7.1%) subscriber decrease in the fourth
quarter of 2011, compared with a decrease of 27,700 in the same period
of 2010.
Cable Internet access - 26,100 (2.0%) increase in the fourth
quarter of 2011, compared with 18,300 in the same period of
2010.
Cable telephony - 25,900 (2.2%) subscriber increase in the
fourth quarter of 2011, compared with 16,200 in the same period of
2010.
Mobile telephony service - 32,500 (12.6%) increase in subscriber
connections in the fourth quarter of 2011, compared with 40,700 in
the same period of 2010.
Operating income: $294.7 million, an increase of $31.5 million
(12.0%).
-- The increase in operating income was mainly due to:
-- impact of higher revenues.
-- Partially offset by:
-- increases in operating costs, including costs related to the roll-
out of the 4G network.
Net income attributable to shareholder: $161.9 million, an
increase of $66.0 million (68.8%).
-- The increase was due mainly to:
-- $86.4 million favourable variance in gains and losses on valuation
and translation of financial instruments in the fourth quarter 2011,
compared with the same period of 2010;
-- $31.5 million increase in operating income;
-- $8.9 million decrease in the charge for restructuring of operations
and other special items.
-- Partially offset by:
-- $39.4 million increase in income tax expense;
-- $18.0 million increase in amortization charge;
-- $3.4 million increase in financial expenses.
Financing activities
-- On July 20, 2011, Videotron amended its $575.0 million revolving credit
facility to extend the expiry date from April 2012 to July 2016 and
modify some of the terms and conditions.
-- On July 5, 2011, Videotron issued 6 7/8% Senior Notes maturing in 2021
in the aggregate principal amount of $300.0 million, for a net principal
amount of $294.8 million. The net proceeds were used to finance the
early repayment and withdrawal of US$255.0 million principal amount of
Videotron's 6 7/8% Senior Notes maturing in 2014, and settlement of the
related hedges.
Detailed financial information
For a detailed analysis of Videotron's 2011 full year and fourth
quarter results, please refer to the Management Discussion and
Analysis and consolidated financial statements of Videotron,
available on Quebecor's website at www.quebecor.com/en/.
Transition to IFRS
On January 1, 2011, Canadian Generally Accepted Accounting
Principles ("GAAP"), as used by publicly accountable enterprises,
were fully converged into IFRS. Prior to the adoption of IFRS, for
all periods up to and including the year ended December 31, 2010,
Videotron'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 is January 1, 2010. The financial data for 2010
have therefore been restated. Videotron is also required to apply
IFRS accounting policies retrospectively to determine its opening
balance sheet, subject to certain exemptions. However, Videotron 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 Videotron's consolidated financial statements for the
year ended December 31, 2011. Note 27 describes the adjustments
made by Videotron 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
year ended December 31, 2010. Note 27 also provides details on
exemption choices made by Videotron with respect to the general
principle of retrospective application of IFRS.
DEFINITIONS
Operating Income
In its analysis of operating results, Quebecor defines operating
income, as reconciled to net income under IFRS, as net income
before amortization, financial expenses, gain (loss) on valuation
and translation of financial instruments, charge for restructuring
of operations and other special items, and income tax. Operating
income as defined above is not a measure of results that is
consistent with IFRS. 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 IFRS. 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 its 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 the 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. In addition, measures like operating income are commonly
used by the investment community to analyze and compare the
performance of companies in the industries in which Quebecor is
engaged. Quebecor's definition of operating income may not be the
same as similarly titled measures reported by other companies.
Table 2 below provides a reconciliation of operating income to
net income as disclosed in the consolidated financial
statements.
Table 2
Reconciliation of Videotron's operating income, as reported in this press
release, to the net income measure used in the consolidated financial
statements
(in millions of Canadian dollars)
Year Ended Three months
December 31 ended December 31
----------------------------------------------------------------------------
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2011 2010 2011 2010
----------------------------------------------------------------------------
Operating Income $ 1,098.8 $ 1,047.3 $ 294.7 $ 263.2
Amortization (408.1) (291.7) (110.2) (92.2)
Financial expenses (158.0) (153.2) (39.1) (35.7)
Gain (loss) on valuation and
translation of financial
instruments 56.2 24.4 57.0 (29.4)
Restructuring of operations
and other special items (12.6) (11.4) (0.5) (9.4)
Income tax (107.0) (111.1) (39.9) (0.5)
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Net income $ 469.3 $ 504.3 $ 162.0 $ 96.0
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Average Monthly Revenue per User
ARPU is an industry metric that Videotron uses to measure its
monthly cable television, Internet access, cable telephony and
mobile telephony revenues per average basic cable customer. ARPU is
not a measurement that is consistent with IFRS and the Videotron's
definition and calculation of ARPU may not be the same as
identically titled measurements reported by other companies.
Videotron calculates ARPU by dividing its combined cable
television, Internet access, cable telephony and mobile telephony
revenues by the average number of basic customers during the
applicable period, and then dividing the resulting amount by the
number of months in the applicable period.
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 that 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 risks (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 to 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 February 29, 2012 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.,
through its subsidiary Videotron Ltd., is an integrated
communications company engaged in cable television, interactive
multimedia development, Internet access services, cable telephone
services and mobile telephone services. Through Sun Media
Corporation, Quebecor Media Inc. is the largest publisher of
newspapers in Canada. It also operates Canoe.ca and its network of
English and French language Internet properties in Canada. In the
broadcasting sector, Quebecor Media Inc. operates, through TVA
Group Inc., the number one French language general interest
television network in Quebec, a number of specialty channels and
the SUN News English language channel. Another subsidiary of
Quebecor Media Inc., Nurun Inc., is a major interactive
technologies and communications agency with offices in Canada, the
United States, Europe and Asia. Quebecor Media Inc. is also active
in magazine publishing (TVA Publishing Inc.), book publishing and
distribution (Sogides Group Inc. and CEC Publishing Inc.), the
production, distribution and retailing of cultural products
(Archambault Group Inc. and TVA Films), video game development
(BlooBuzz Studios, L.P.), DVD, Blu-ray disc and videogame rental
and retailing (Le SuperClub Videotron Ltd), the printing and
distribution of regional newspapers and flyers (Quebecor Media
Printing Inc. and Quebecor Media Network Inc.), news content
production and distribution (QMI Agency), multiplatform advertising
solutions (QMI Sales) and the publishing of printed and online
directories, through Quebecor MediaPages(TM).
VIDEOTRON LTD.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of Canadian dollars)
(unaudited)
Three months ended Twelve months ended
December 31 December 31
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2011 2010 2011 2010
----------------------------------------------------------------------------
(restated) (restated)
Revenues
Cable television $ 261,751 $ 245,897 $ 1,012,604 $ 950,590
Internet 183,209 166,272 698,234 644,283
Cable telephony 111,474 106,868 436,694 409,858
Mobile telephony 34,297 16,892 112,743 53,167
Business solutions 16,562 16,122 63,025 59,803
Equipment sales 13,744 24,922 55,885 59,893
Other 13,747 14,214 51,529 51,214
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634,784 591,187 2,430,714 2,228,808
Cost of sales and
operating expenses 340,123 327,973 1,331,935 1,181,535
Amortization 110,223 92,166 408,133 291,738
Financial expenses 39,115 35,775 158,042 153,193
(Gain) loss on
valuation and
translation of
financial
instruments (57,040) 29,363 (56,142) (24,373)
Restructuring of
operations and
other special items 506 9,366 12,619 11,380
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Income before income
taxes 201,857 96,544 576,127 615,335
Income taxes
Current (2,584) (13,716) (22,549) 27,375
Deferred 42,507 14,211 129,424 83,642
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39,923 495 106,875 111,017
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Net income $ 161,934 $ 96,049 $ 469,252 $ 504,318
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Net income
attributable to:
Shareholder $ 161,882 $ 95,901 $ 469,023 $ 504,074
Non-controlling
interest 52 148 229 244
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VIDEOTRON LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of Canadian dollars)
(unaudited)
Three months ended Twelve months ended
December 31 December 31
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----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
(restated) (restated)
Net income $ 161,934 $ 96,049 $ 469,252 $ 504,318
Other comprehensive
(loss) income:
Cash flow hedges:
(Loss) gain on
valuation of
derivative
financial
instruments (17,594) (25,750) 1,173 19,968
Deferred income
taxes 4,014 5,879 (2,879) (1,275)
Defined benefit
plans:
Actuarial loss
and net change
in asset limit
and in minimum
funding
liability (32,356) (8,109) (32,356) (9,427)
Deferred income
taxes 8,700 2,181 8,700 2,571
Reclassification to
income:
Other
comprehensive
loss related to
cash flow hedges - - 801 -
Deferred income
taxes - - (200) -
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(37,236) (25,799) (24,761) 11,837
----------------------------------------------------------------------------
Comprehensive income $ 124,698 $ 70,250 $ 444,491 $ 516,155
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Comprehensive income
attributable to:
Shareholder $ 124,646 $ 70,102 $ 444,262 $ 515,911
Non-controlling
interest 52 148 229 244
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VIDEOTRON LTD.
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands of Canadian dollars) (unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity attributable to shareholder
Equity
Accumu- attribu-
lated table
other to non-
Contri- compre- control-
Capital buted Retained hensive ling Total
stock surplus earnings loss interest equity
----------------------------------------------------------------------------
Balance as of
December 31,
2009 as
previously
reported
under
Canadian GAAP
(restated) $ 1 $ 7,155 $ 726,444 $ (22,832)$ - $ 710,768
IFRS
adjustments - (7,155) (52,819) - 991 (58,983)
----------------------------------------------------------------------------
Balance as of
January 1,
2010 1 - 673,625 (22,832) 991 651,785
Net income - - 504,074 - 244 504,318
Other
comprehensive
(loss)
income - - (6,856) 18,693 - 11,837
Issuance of
shares 3,400 - - - - 3,400
Dividends - - (437,000) - (95) (437,095)
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Balance as of
December 31,
2010 3,401 - 733,843 (4,139) 1,140 734,245
Net income - - 469,023 - 229 469,252
Other
comprehensive
loss - - (23,656) (1,105) - (24,761)
Acquisition of
a subsidiary
from an
affiliated
corporation - - (32,140) - - (32,140)
Dividends - - (140,000) - (55) (140,055)
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Balance as of
December 31,
2011 $ 3,401 $ - $1,007,070 $ (5,244)$ 1,314 $1,006,541
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VIDEOTRON LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of Canadian dollars)
(unaudited)
Three months ended Twelve months ended
December 31 December 31
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----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
(restated) (restated)
Cash flows related to
operating activities
Net income $ 161,934 $ 96,049 $ 469,252 $ 504,318
Adjustments for:
Amortization of
fixed assets 87,352 73,100 322,878 254,469
Amortization of
intangible
assets 22,871 19,066 85,255 37,269
(Gain) loss on
valuation and
translation of
financial
instruments (57,040) 29,363 (56,142) (24,373)
Amortization of
financing costs
and long-term
debt premium or
discount 1,372 901 4,238 3,556
Deferred income
taxes 42,507 14,211 129,424 83,642
Gain on debt
refinancing - - (2,713) -
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Other (3,021) (37) (1,058) (9)
Net change in non-
cash balances
related to operating
activities (37,434) (83,651) (44,094) (77,397)
----------------------------------------------------------------------------
Cash flows provided
by operating
activities 218,541 149,002 907,040 781,475
Cash flows related to
investing activities
Additions to fixed
assets (189,158) (190,371) (725,404) (651,146)
Additions to
intangible assets (28,247) (24,124) (73,253) (72,244)
Acquisition of a
subsidiary from an
affiliated
corporation - - (32,140) -
Disposal
(acquisition) of
preferred shares
of a company under
common control - 930,000 - (370,000)
Acquisition of tax
deductions from
the ultimate
parent corporation - (5,974) - (5,974)
Net change in
temporary
investments - - - 30,000
Other 1,836 1,827 4,893 7,319
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Cash flows (used in)
provided by
investing activities (215,569) 711,358 (825,904) (1,062,045)
Cash flows related to
financing activities
Issuance of long-
term debt, net of
financing fees - - 294,846 293,888
Net borrowings
under bank credit
facility 69,643 - 69,643 -
Financing costs (1,413) - (3,862) -
Repayment of long-
term debt and
settlement of
related hedging
contracts - - (303,068) -
(Repayment)
issuance of
subordinated loan
from parent
corporation - (930,000) - 370,000
Dividends (65,000) (102,000) (140,000) (437,000)
Other - - (14) (292)
----------------------------------------------------------------------------
Cash flows provided
by (used in)
financing activities 3,230 (1,032,000) (82,455) 226,596
Net change in cash
and cash equivalents 6,202 (171,640) (1,319) (53,974)
Cash and cash
equivalents at
beginning of period 88,814 267,975 96,335 150,309
----------------------------------------------------------------------------
Cash and cash
equivalents at end
of period $ 95,016 $ 96,335 $ 95,016 $ 96,335
----------------------------------------------------------------------------
----------------------------------------------------------------------------
VIDEOTRON LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands of Canadian dollars)
(unaudited)
Three months ended Twelve months ended
December 31 December 31
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Additional information on the consolidated
statements of cash flows
Cash and cash
equivalents consist
of:
Bank overdraft $ (21,483) $ (24,214) $ (21,483) $ (24,214)
Cash equivalents 116,499 120,549 116,499 120,549
----------------------------------------------------------------------------
$ 95,016 $ 96,335 $ 95,016 $ 96,335
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Non-cash investing
activities
Net change in
additions to fixed
and intangible
assets financed with
accounts payable $ (56,029) $ 11,611 $ (28,956) $ (16,589)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest and taxes
reflected as operating
activities
Cash interest
payments $ 67,300 $ 59,464 $ 163,365 $ 150,241
Cash income tax
payments (net of
refunds) 5,164 2,058 6,141 6,456
----------------------------------------------------------------------------
----------------------------------------------------------------------------
VIDEOTRON LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)
(unaudited)
December 31, December 31,
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2011 2010
----------------------------------------------------------------------------
(restated)
Assets
Current assets
Cash and cash equivalents $ 95,016 $ 96,335
Accounts receivable 264,497 245,691
Income taxes 10,819 434
Amounts receivable from affiliated
corporations 33,391 10,608
Inventories 122,870 96,549
Prepaid expenses 16,319 21,689
----------------------------------------------------------------------------
Total current assets 542,912 471,306
----------------------------------------------------------------------------
Non-current assets
Investments 1,630,000 1,630,000
Fixed assets 2,602,215 2,179,600
Intangible assets 711,426 720,970
Derivative financial instruments 3,207 -
Other assets 43,434 46,028
Deferred income taxes 5,243 6,134
Goodwill 451,545 451,475
----------------------------------------------------------------------------
Total non-current assets 5,447,070 5,034,207
----------------------------------------------------------------------------
Total assets $ 5,989,982 $ 5,505,513
----------------------------------------------------------------------------
----------------------------------------------------------------------------
VIDEOTRON LTD.
CONSOLIDATED BALANCE SHEETS (continued)
(in thousands of Canadian dollars)
(unaudited)
December 31, December 31,
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2011 2010
----------------------------------------------------------------------------
(restated)
Liabilities and Equity
Current liabilities
Accounts payable and accrued charges $ 435,627 $ 382,162
Amounts payable to affiliated
corporations 23,789 23,248
Provisions 7,383 17,716
Deferred revenue 248,195 227,211
Income taxes - 19,603
Current portion of long-term debt 10,714 -
----------------------------------------------------------------------------
Total current liabilities 725,708 669,940
----------------------------------------------------------------------------
Non-current liabilities
Long-term debt 1,846,343 1,786,076
Subordinated loan from parent
corporation 1,630,000 1,630,000
Derivative financial instruments 222,212 289,032
Deferred income taxes 454,716 316,185
Other liabilities 104,462 80,035
----------------------------------------------------------------------------
Total non-current liabilities 4,257,733 4,101,328
----------------------------------------------------------------------------
Total liabilities 4,983,441 4,771,268
----------------------------------------------------------------------------
Equity
Capital stock 3,401 3,401
Retained Earnings 1,007,070 733,843
Accumulated other comprehensive loss (5,244) (4,139)
----------------------------------------------------------------------------
Equity attributable to shareholder 1,005,227 733,105
Non-controlling interest 1,314 1,140
----------------------------------------------------------------------------
Total equity 1,006,541 734,245
----------------------------------------------------------------------------
Total liabilities and equity $ 5,989,982 $ 5,505,513
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contacts: Jean-Francois Pruneau Chief Financial Officer Quebecor
Inc. and Quebecor Media Inc.jean-francois.pruneau@quebecor.com 514
380-4144 J. Serge Sasseville Vice President, Corporate and
Institutional Affairs Quebecor Media
Inc.serge.sasseville@quebecor.com 514 380-1864
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