Quebecor Inc. ("Quebecor" or the "Corporation")
(TSX:QBR.A)(TSX:QBR.B) today reported its consolidated financial
results for the second quarter of 2012. Quebecor consolidates the
financial results of its Quebecor Media Inc. ("Quebecor Media")
subsidiary, in which it holds a 54.7% interest.
Second quarter 2012 highlights
-- Revenues: $1.09 billion, up $33.0 million (3.1%) from the second quarter
of 2011.
-- Operating income:(1) down $0.7 million (-0.2%) to $357.8 million.
-- Net income attributable to shareholders: $67.0 million ($1.05 per basic
share), up $11.8 million ($0.19 per basic share) from $55.2 million
($0.86 per basic share) in the second quarter of 2011.
-- Adjusted income from continuing operations:(2) $48.7 million ($0.77 per
basic share), down $11.3 million ($0.16 per basic share) from $60.0
million ($0.93 per basic share) in the second quarter of 2011.
-- Revenue increases for all the core services of Videotron Ltd.
("Videotron"): Internet access ($20.4 million or 11.9%), cable
television ($15.4 million or 6.1%), mobile telephony service ($14.8
million or 56.9%), and cable telephony service ($4.9 million or 4.5%).
-- Telecommunications segment's operating income: up $27.5 million (10.0%).
"Quebecor's revenues rose by 3.1% in the second quarter of 2012,
mainly because of sustained growth in Videotron's sales," said
Pierre Karl Peladeau, President and Chief Executive Officer of
Quebecor. "Our second quarter results were marked by the
Telecommunications segment's excellent results while our News Media
segment's results declined from the same period of 2011, mainly
because of significant investments in, among other things, the
distribution network and the publishing of community newspapers.
However, the newspaper publishing and printing operations posted
the highest operating margins, expressed as a percentage of
revenues, of all the major industry players in the second quarter
of 2012. We also made major investments in expanding the specialty
services of TVA Group Inc. ("TVA Group"), so that their financial
performance will no longer be entirely dependent on the
conventional television network's results.
"Videotron continued to grow despite the fiercely competitive
environment. The mobile telephony service attracted new customers
and generated additional revenue streams. We continued our business
strategy, which is based on bundling services into attractive
packages, coupled with superior product quality and outstanding
customer service. Revenues from Videotron's core services were all
up significantly, boosting the Telecommunications segment's
operating income by $27.5 million, a 10.0% increase from the same
quarter of 2011. Videotron also posted a net increase of 31,100
revenue generating units(3) during the second quarter of 2012. The
illico TV new generation service was rolled out across all of
Videotron's service area during the quarter and more than six
million Quebecers now have access to the new cable television
service, which is distinguished by its user-friendliness and
superior interfaces. Videotron also launched Ultimate Speed
Internet 200, an Internet access service that sets a new standard
for speed.
(1) See "Operating income" under "Definitions."
(2) See "Adjusted income from continuing operations" under "Definitions."
(3) Revenue generating units are the sum of cable television, cable and
wireless Internet access, and cable telephony service subscriptions,
plus subscriber connections to the mobile telephony service.
"The News Media segment was busy during the second quarter of
2012, acquiring Pub Extra magazine and the weekly L'Impact de
Drummondville, and launching L'Echo de Victoriaville. Quebecor
Media's Quebec community newspapers network now has a combined
weekly circulation of over 2.5 million copies.
"To offer its customers expanded media exposure and broaden its
convergence strategy, Quebecor Media has entered an entirely new
media platform. Quebecor Media was chosen through a call for
tenders to install, maintain and advertise on Societe de transport
de Montreal (STM) bus shelters for the next 20 years. For us, this
is a promising move into a line of business that is experiencing
significant technological change.
"In the field of electronic media, Quebecor Media announced a
partnership with ReadBooks SAS, a Franco-Quebec company
specializing in ebooks. The partnership will support the
development of new software for Archambault Group Inc.
("Archambault Group") and Librairie Paragraphe Bookstore that will
allow them to increase their offerings and enhance their customers'
reading experience.
"Finally, on another front, Quebecor Media welcomed with great
satisfaction the Quebec Superior Court judgements of July 23, 2012
ordering Bell TV (formerly Bell ExpressVu) to compensate Videotron
and TVA Group. The court found that Bell TV committed serious
misconduct by not taking the appropriate measures at the opportune
time to prevent the illegal decoding of its satellite television
signals, even though it knew the extent of the piracy of its system
and had the required technology at its disposal to end it. We were
glad to see Superior Court rule against Bell for resorting to
illegal means that weaken its competitors and for having failed to
meet its obligations to protect rather than undermine the integrity
of the Quebec and Canadian broadcasting industry.
"In the first half of 2012, Quebecor actively pursued its
customer, product and business development strategies, combined
with vigorous operating cost-control initiatives, in order to
achieve its long-term growth and profitability targets."
Table 1
Quebecor second quarter financial highlights, 2008 to 2012
(in millions of Canadian dollars, except per share data)
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2012(1) 2011(1) 2010(1) 2009(2) 2008(2)
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Revenues $ 1,086.4 $ 1,053.4 $ 994.0 $ 946.4 $ 949.9
Operating
income(3) 357.8 358.5 351.9 315.9 276.9
Net income
attributable to
shareholders 67.0 55.2 60.8 76.8 57.5
Adjusted income
from continuing
operations(4) 48.7 60.0 62.9 56.3 41.5
Per basic share:
Net income
attributable
to
shareholders 1.05 0.86 0.95 1.19 0.90
Adjusted
income from
continuing
operations(4) 0.77 0.93 0.98 0.88 0.61
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(1) Financial figures for the second quarters of years 2010 to 2012 are
presented in accordance with International Financial Reporting
Standards ("IFRS").
(2) Financial figures for the second quarters of years 2008 and 2009 are
presented in accordance with Canadian Generally Accepted Accounting
Principles ("GAAP").
(3) See "Operating income" under "Definitions."
(4) See "Adjusted income from continuing operations" under "Definitions."
2012/2011 second quarter comparison
Revenues: $1.09 billion, an increase of $33.0 million
(3.1%).
-- Revenues increased in Telecommunications ($50.7 million or 8.4% of
segment revenues) and Interactive Technologies and Communications ($11.2
million or 39.7%).
-- Revenues decreased in News Media ($12.7 million or -4.7%), Leisure and
Entertainment ($8.6 million or -12.0%) and Broadcasting ($2.1 million or
-1.8%).
Operating income: $357.8 million, a decrease of $0.7 million
(-0.2%).
-- Operating income decreased in News Media ($9.3 million or -20.4% of
segment operating income), Leisure and Entertainment ($7.4 million),
Broadcasting ($2.6 million or -11.7%), and Head Office ($10.6 million).
The decrease at Head Office was caused mainly by the unfavourable
variation in the fair value of stock options, as well as higher
operating expenses, including the donations and sponsorships expense.
-- Operating income increased in Telecommunications ($27.5 million or
10.0%) and Interactive Technologies and Communications ($1.7 million or
130.8%).
-- The change in the fair value of Quebecor Media stock options resulted in
a $5.0 million unfavourable variance in the stock-based compensation
charge in the second quarter of 2012 compared with the same period of
2011. The change in the fair value of Quebecor stock options resulted in
a $7.8 million unfavourable variance in the Corporation's stock-based
compensation charge in the second quarter of 2012.
Net income attributable to shareholders: $67.0 million ($1.05
per basic share) compared with $55.2 million ($0.86 per basic
share) in the second quarter of 2011, an increase of $11.8 million
($0.19 per basic share).
-- The increase was due mainly to:
-- $45.9 million favourable variance in gain on valuation and
translation of financial instruments;
-- $18.6 million favourable variance in charge for restructuring of
operations, impairment of assets and other special items.
-- Offset by:
-- $22.7 million increase in amortization charge.
Adjusted income from continuing operations: $48.7 million in the
second quarter of 2012 ($0.77 per basic share) compared with $60.0
million ($0.93 per basic share) in the same period of 2011, a
decrease of $11.3 million ($0.16 per basic share).
2012/2011 year-to-date comparison
Revenues: $2.15 billion, an increase of $106.5 million
(5.2%).
-- Revenues increased in Telecommunications ($113.3 million or 9.6% of
segment revenues), Interactive Technologies and Communications ($21.0
million or 38.2%) and Broadcasting ($8.6 million or 3.8%).
-- Revenues decreased in News Media ($19.7 million or -3.9%) and Leisure
and Entertainment ($2.9 million or -2.2%).
Operating income: $680.0 million, an increase of $27.2 million
(4.2%).
-- Operating income increased in Telecommunications ($76.0 million or 14.4%
of segment operating income) and Interactive Technologies and
Communications ($3.8 million or 172.7%).
-- Operating income decreased in News Media ($21.0 million or -28.4%),
Broadcasting ($13.0 million or -48.3%), Leisure and Entertainment ($8.3
million), and Head Office ($10.3 million). The decrease at Head Office
was caused mainly by the unfavourable variance in the fair value of
stock options.
-- The change in the fair value of Quebecor Media stock options resulted in
a $9.7 million unfavourable variance in the stock-based compensation
charge in the first half of 2012 compared with the same period of 2011.
The change in the fair value of Quebecor stock options resulted in a
$14.3 million unfavourable variance in the Corporation's stock-based
compensation charge in the first half of 2012.
Net income attributable to shareholders: $139.9 million ($2.20
per basic share) compared with $89.5 million ($1.39 per basic
share) in the first half of 2011, an increase of $50.4 million
($0.81 per basic share).
-- The increase was due mainly to:
-- $117.3 million favourable variance in gain on valuation and
translation of financial instruments;
-- $27.2 million increase in operating income;
-- $27.0 million favourable variance in charge for restructuring of
operations, impairment of assets and other special items.
-- Partially offset by:
-- $43.2 million increase in amortization charge;
-- $14.5 million goodwill impairment charge recognized in the first
half of 2012.
Adjusted income from continuing operations: $88.0 million in the
first half of 2012 ($1.39 per basic share) compared with $95.9
million ($1.49 per basic share) in the same period of 2011, a
decrease of $7.9 million ($0.10 per basic share).
Dividends
On August 8, 2012, the Board of Directors of Quebecor declared a
quarterly dividend of $0.05 per share on Class A Multiple Voting
Shares ("Class A shares") and Class B Subordinate Voting Shares
("Class B shares") payable on September 18, 2012 to shareholders of
record at the close of business on August 24, 2012. 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.
Normal course issuer bid
The Board of Directors of Quebecor has authorized a normal
course issuer bid for a maximum of 980,357 Class A shares,
representing approximately 5% of the issued and outstanding Class A
shares, and for a maximum of 4,351,276 Class B shares, representing
approximately 10% of the public float for the Class B shares as of
July 31, 2012.
The purchases will be made from August 13, 2012 to August 12,
2013, at prevailing market prices, on the open market through the
facilities of the Toronto Stock Exchange and will be made in
accordance with the requirements of said Exchange. All shares
purchased will be cancelled. As of July 31, 2012, 19,607,151 Class
A Shares and 43,725,831 Class Bshares were issued and
outstanding.
The average daily trading volume of the Class A shares and the
Class B shares of the Corporation from February 1, 2012 to July 31,
2012 has been 979 Class A shares and 110,324 Class B shares.
Consequently, the Corporation will be authorized to purchase a
maximum of 1,000 Class A shares and of 27,581 Class B shares during
the same trading day pursuant to its normal course issued bid.
The Corporation believes that the repurchase of these shares,
pursuant to this normal course issuer bid, is in the best interest
of the Corporation and its shareholders.
Within the past twelve months, the Corporation has not
repurchased any outstanding Class A shares and has repurchased
1,121,500 Class B Shares at a volume weighted average price of
$33.2596 per share.
Shareholders may obtain a copy of the Notice filed with the
Toronto Stock Exchange, without charge, by contacting the
Secretary's office of the Corporation at (514) 380-1994.
Detailed financial information
For a detailed analysis of Quebecor's second quarter 2012
results, please refer to the Management Discussion and Analysis and
consolidated financial statements of Quebecor, available on the
Corporation's website at:
http://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 second
quarter 2012 results on August 9, 2012, at 11 a.m. EDT. There will
be a question period reserved for financial analysts. To access the
conference call, please dial 1 877 293-8052, access code for
participants 58308#. A tape recording of the call will be available
from August 9 to November 9, 2012 by dialling 1 877 293-8133,
conference number 801836#, access code for participants 58308#. 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.
Cautionary statement regarding 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 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, 2011.
The forward-looking statements in this press release reflect
Quebecor's expectations as of August 9, 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 telephony,
and mobile telephony. 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.), video game development (BlooBuzz Studios Holding, L.P.),
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), DVD,
Blu-ray disc and videogame rental and retailing (Le SuperClub
Videotron ltee), 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).
DEFINITIONS
Operating income
In its analysis of operating results, the Corporation 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, impairment of assets and other special
items, impairment of goodwill, loss on debt refinancing, 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. The Corporation uses
operating income in order to assess the performance of its
investment in Quebecor Media. The Corporation's management and
Board of Directors use this measure in evaluating its consolidated
results as well as the results of the Corporation's operating
segments. This measure eliminates the significant level of
depreciation and amortization of tangible and intangible assets and
is unaffected by the capital structure or investment activities of
the Corporation and its segments. Operating income is also relevant
because it is a significant component of the Corporation's annual
incentive compensation programs. A limitation of this measure,
however, is that it does not reflect the periodic costs of tangible
and intangible assets used in generating revenues in the
Corporation's segments. The Corporation also uses other measures
that do reflect such costs, such as cash flows from segment
operations and free cash flows from operations. In addition,
measures like operating income are commonly used by the investment
community to analyze and compare the performance of companies in
the industries in which the Corporation is engaged. The
Corporation'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 Quebecor's condensed consolidated
financial statements.
Table 2
Reconciliation of the operating income measure used in this press release to
the net income measure used in the condensed consolidated financial
statements
(in millions of Canadian dollars)
Three months ended June 30 Six months ended June 30
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2012 2011 2012 2011
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Operating income
(loss):
Telecommunications $ 301.7 $ 274.2 $ 604.7 $ 528.7
News Media 36.4 45.7 53.0 74.0
Broadcasting 19.7 22.3 13.9 26.9
Leisure and
Entertainment (1.1) 6.3 (0.8) 7.5
Interactive
Technologies and
Communications 3.0 1.3 6.0 2.2
Head Office (1.9) 8.7 3.2 13.5
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357.8 358.5 680.0 652.8
Amortization (144.2) (121.5) (286.2) (243.0)
Financial expenses (79.1) (80.4) (162.3) (161.8)
Gain (loss) on
valuation and
translation of
financial
instruments 41.9 (4.0) 123.8 6.5
Restructuring of
operations,
impairment of
assets and other
special items 12.0 (6.6) 10.9 (16.1)
Impairment of
goodwill - - (14.5) -
Loss on debt
refinancing - - (7.3) (9.3)
Income taxes (52.0) (40.0) (91.8) (59.8)
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Net income $ 136.4 $ 106.0 $ 252.6 $ 169.3
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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, impairment of goodwill and loss on
debt refinancing, net of income tax and net income attributable to
non-controlling interests. 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. The Corporation'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 operations to the net income attributable to
shareholders measure used in Quebecor's condensed consolidated
financial statements.
Table 3
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 condensed consolidated financial statements
(in millions of Canadian dollars)
Three months ended June 30 Six months ended June 30
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2012 2011 2012 2011
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Adjusted income from
continuing
operations $ 48.7 $ 60.0 $ 88.0 $ 95.9
Gain (loss) on
valuation and
translation of
financial
instruments 41.9 (4.0) 123.8 6.5
Restructuring of
operations,
impairment of
assets and other
special items 12.0 (6.6) 10.9 (16.1)
Impairment of
goodwill - - (14.5) -
Loss on debt
refinancing - - (7.3) (9.3)
Income taxes related
to adjustments(1) (13.2) 1.7 (26.5) 6.1
Net income
attributable to
non-controlling
interest related to
adjustments (22.4) 4.1 (34.5) 6.4
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Net income
attributable to
shareholders $ 67.0 $ 55.2 $ 139.9 $ 89.5
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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
transactions.
Average Monthly Revenue per User
Average monthly revenue per user ("ARPU") is an industry metric
that the Corporation 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 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 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.
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian
dollars, except for
earnings per share data)
Three months ended Six months ended
(unaudited) June 30 June 30
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2012 2011 2012 2011
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Revenues
Telecommunications $ 651.8 $ 601.1 $ 1,297.6 $ 1,184.3
News Media 254.8 267.5 487.9 507.6
Broadcasting 115.4 117.5 233.2 224.6
Leisure and Entertainment 62.9 71.5 130.0 132.9
Interactive Technologies
and Communications 39.4 28.2 76.0 55.0
Inter-segment (37.9) (32.4) (74.3) (60.5)
------------------------------------------------
1,086.4 1,053.4 2,150.4 2,043.9
Cost of sales, selling and
administrative expenses 728.6 694.9 1,470.4 1,391.1
Amortization 144.2 121.5 286.2 243.0
Financial expenses 79.1 80.4 162.3 161.8
(Gain) loss on valuation and
translation of financial
instruments (41.9) 4.0 (123.8) (6.5)
Restructuring of operations,
impairment of assets and
other special items (12.0) 6.6 (10.9) 16.1
Impairment of goodwill - - 14.5 -
Loss on debt refinancing - - 7.3 9.3
------------------------------------------------
Income before income taxes 188.4 146.0 344.4 229.1
Income taxes:
Current 20.3 (5.5) 25.8 (5.1)
Deferred 31.7 45.5 66.0 64.9
------------------------------------------------
52.0 40.0 91.8 59.8
------------------------------------------------
Net income $ 136.4 $ 106.0 $ 252.6 $ 169.3
------------------------------------------------
------------------------------------------------
Net income attributable to:
Shareholders $ 67.0 $ 55.2 $ 139.9 $ 89.5
Non-controlling interests 69.4 50.8 112.7 79.8
------------------------------------------------
------------------------------------------------
Earnings per share
attributable to
shareholders
Basic $ 1.05 $ 0.86 $ 2.20 $ 1.39
Diluted 1.05 0.85 2.19 1.37
------------------------------------------------
------------------------------------------------
Weighted average number of
shares outstanding (in
millions) 63.5 64.3 63.5 64.3
Weighted average number of
diluted shares (in
millions) 63.6 65.0 63.6 65.0
------------------------------------------------
------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian
dollars)
Three months ended Six months ended
(unaudited) June 30 June 30
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2012 2011 2012 2011
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Net income $ 136.4 $ 106.0 $ 252.6 $ 169.3
Other comprehensive income
(loss) :
(Loss) gain on translation
of net investments in
foreign operations (0.4) 0.3 (0.8) 0.8
Cash flow hedges:
Gain (loss) on valuation
of derivative financial
instruments 6.5 (6.8) 25.4 (6.0)
Deferred income taxes (3.2) 0.7 (0.9) 2.9
Defined benefit plans:
Net change in asset
limit or in minimum
funding liability - (0.1) - (0.2)
Deferred income taxes - 0.1 - 0.1
Reclassification to
income:
Other comprehensive
income related to cash
flow hedges - - (3.3) -
Deferred income taxes - - (1.2) -
------------------------------------------------
2.9 (5.8) 19.2 (2.4)
------------------------------------------------
Comprehensive income $ 139.3 $ 100.2 $ 271.8 $ 166.9
------------------------------------------------
------------------------------------------------
Attributable to:
Shareholders $ 68.6 $ 51.8 $ 150.4 $ 88.0
Non-controlling interests 70.7 48.4 121.4 78.9
------------------------------------------------
------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian
dollars)
Three months ended Six months ended
(unaudited) June 30 June 30
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2012 2011 2012 2011
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Net income before
amortization, financial
expenses, (gain) loss on
valuation and translation of
financial instruments,
restructuring of operations,
impairment of assets and
other special items,
impairment of goodwill, loss
on debt refinancing and
income taxes
Telecommunications $ 301.7 $ 274.2 $ 604.7 $ 528.7
News Media 36.4 45.7 53.0 74.0
Broadcasting 19.7 22.3 13.9 26.9
Leisure and Entertainment (1.1) 6.3 (0.8) 7.5
Interactive Technologies and
Communications 3.0 1.3 6.0 2.2
Head Office (1.9) 8.7 3.2 13.5
----------------------------------------------
$ 357.8 $ 358.5 $ 680.0 $ 652.8
----------------------------------------------
----------------------------------------------
Amortization
Telecommunications $ 119.3 $ 99.6 $ 236.7 $ 199.9
News Media 14.7 13.8 29.2 26.8
Broadcasting 5.3 4.3 10.6 8.4
Leisure and Entertainment 2.6 2.1 5.1 4.4
Interactive Technologies and
Communications 1.4 0.8 2.8 1.6
Head Office 0.9 0.9 1.8 1.9
----------------------------------------------
$ 144.2 $ 121.5 $ 286.2 $ 243.0
----------------------------------------------
----------------------------------------------
Additions to property, plant
and equipment
Telecommunications $ 161.5 $ 160.4 $ 345.0 $ 337.6
News Media 1.6 2.5 3.5 8.4
Broadcasting 6.8 6.5 12.1 15.4
Leisure and Entertainment 0.9 1.2 1.8 1.6
Interactive Technologies and
Communications 1.1 2.2 2.2 3.2
Head Office 0.7 0.3 1.2 0.7
----------------------------------------------
$ 172.6 $ 173.1 $ 365.8 $ 366.9
----------------------------------------------
----------------------------------------------
Additions to intangible assets
Telecommunications $ 14.8 $ 14.8 $ 33.7 $ 31.7
News Media 3.3 3.3 6.1 5.4
Broadcasting 0.7 1.2 1.3 2.0
Leisure and Entertainment 2.1 1.4 2.8 2.6
Inter-segment (0.5) - (1.0) -
----------------------------------------------
$ 20.4 $ 20.7 $ 42.9 $ 41.7
----------------------------------------------
----------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions of Canadian dollars)
(unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity attributable to shareholders
--------------------------------------
Accumu- Equity
lated attri-
other butable
com- to non-
Contri- prehen- control-
Capital buted Retained sive ling Total
stock surplus earnings income interests equity
----------------------------------------------------------------------------
Balance as of
December 31,
2010 $ 346.6 $ 0.9 $ 943.6 $ 13.7 $ 1,346.9 $2,651.7
Net income - - 89.5 - 79.8 169.3
Other
comprehensive
loss - - - (1.5) (0.9) (2.4)
Issuance of
shares of a
subsidiary - - - - 1.0 1.0
Dividends - - (6.4) - (23.8) (30.2)
----------------------------------------------------------------------------
Balance as of
June 30, 2011 346.6 0.9 1,026.7 12.2 1,403.0 2,789.4
Net income - - 111.5 - 102.2 213.7
Other
comprehensive
loss - - (31.5) (3.6) (38.1) (73.2)
Repurchase of
Class B shares (7.1) - (23.1) - - (30.2)
Dividends - - (6.4) - (22.7) (29.1)
----------------------------------------------------------------------------
Balance as of
December 31,
2011 339.5 0.9 1,077.2 8.6 1,444.4 2,870.6
Net income - - 139.9 - 112.7 252.6
Other
comprehensive
income - - - 10.5 8.7 19.2
Issuance of
Class B shares 3.6 1.5 - - - 5.1
Repurchase of
Class B shares (1.1) - (4.2) - - (5.3)
Acquisition of
non-controlling
interests - (0.1) - - 0.1 -
Dividends - - (6.3) - (22.7) (29.0)
----------------------------------------------------------------------------
Balance as of
June 30, 2012 $ 342.0 $ 2.3 $ 1,206.6 $ 19.1 $ 1,543.2 $3,113.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian
dollars)
Three months ended Six months ended
(unaudited) June 30 June 30
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2012 2011 2012 2011
----------------------------------------------------------------------------
Cash flows related to
operating activities
Net income $ 136.4 $ 106.0 $ 252.6 $ 169.3
Adjustments for:
Amortization of
property, plant and
equipment 109.7 92.9 218.6 185.9
Amortization of
intangible assets 34.5 28.6 67.6 57.1
(Gain) loss on valuation
and translation of
financial instruments (41.9) 4.0 (123.8) (6.5)
Gain on business
disposals (12.9) - (12.9) -
Impairment of goodwill - - 14.5 -
Loss on debt refinancing - - 7.3 9.3
Amortization of
financing costs and
long-term debt discount 3.6 2.9 7.3 5.9
Deferred income taxes 31.7 45.5 66.0 64.9
Other (1.2) (0.5) 1.7 (0.2)
------------------------------------------------
259.9 279.4 498.9 485.7
Net change in non-cash
balances related to
operating activities (31.8) (137.9) (33.5) (173.5)
------------------------------------------------
Cash flows provided by
operating activities 228.1 141.5 465.4 312.2
------------------------------------------------
Cash flows related to
investing activities
Business acquisitions, net
of cash and cash
equivalents (0.8) (5.0) (0.8) (50.1)
Business disposals, net of
cash and cash equivalents 17.9 - 17.9 -
Additions to property,
plant and equipment (172.6) (173.1) (365.8) (366.9)
Additions to intangible
assets (20.4) (20.7) (42.9) (41.7)
Proceeds from disposals of
assets 1.2 4.0 2.4 5.0
Other (1.0) 0.7 (1.0) 2.8
------------------------------------------------
Cash flows used in investing
activities (175.7) (194.1) (390.2) (450.9)
------------------------------------------------
Cash flows related to
financing activities
Net change in bank
indebtedness 4.7 0.3 2.1 (2.9)
Net change under revolving
credit facilities (24.2) (2.6) (22.9) (10.9)
Issuance of long-term
debt, net of financing
fees - - 787.6 319.9
Repayment of long-term
debt (190.9) (1.3) (709.0) (226.2)
Settlement of hedging
contracts (3.6) - (44.1) (105.4)
Issuance of Class B shares - - 3.6 -
Repurchase of Class B
shares (4.9) - (5.3) -
Dividends (6.3) (3.2) (6.3) (3.2)
Dividends paid to non-
controlling interests (11.4) (12.5) (22.7) (23.8)
Other - 1.0 - 1.0
------------------------------------------------
Cash flows used in financing
activities (236.6) (18.3) (17.0) (51.5)
------------------------------------------------
Net change in cash and cash
equivalents (184.2) (70.9) 58.2 (190.2)
Effect of exchange rate
changes on cash and cash
equivalents denominated in
foreign currencies (0.2) 0.1 (0.2) 0.3
Cash and cash equivalents at
beginning of period 388.8 123.6 146.4 242.7
------------------------------------------------
Cash and cash equivalents at
end of period $ 204.4 $ 52.8 $ 204.4 $ 52.8
------------------------------------------------
------------------------------------------------
Cash and cash equivalents
consist of
Cash $ 18.4 $ - $ 18.4 $ -
Cash equivalents 186.0 52.8 186.0 52.8
------------------------------------------------
$ 204.4 $ 52.8 $ 204.4 $ 52.8
------------------------------------------------
------------------------------------------------
Interest and taxes reflected
as operating activities
Cash interest payments $ 129.7 $ 127.1 $ 151.1 $ 163.2
Cash income tax payments
(net of refunds) 2.4 6.0 7.5 34.0
------------------------------------------------
------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited) June 30 December 31
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2012 2011
----------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 204.4 $ 146.4
Accounts receivable 565.3 603.7
Income taxes 13.7 29.0
Inventories 257.8 283.6
Prepaid expenses 53.6 31.3
---------------------------------------
1,094.8 1,094.0
Non-current assets
Property, plant and equipment 3,289.9 3,211.1
Intangible assets 1,007.1 1,041.0
Goodwill 3,529.5 3,543.8
Derivative financial instruments 52.3 34.9
Deferred income taxes 17.8 20.6
Other assets 96.6 93.4
---------------------------------------
7,993.2 7,944.8
---------------------------------------
Total assets $ 9,088.0 $ 9,038.8
---------------------------------------
---------------------------------------
Liabilities and equity
Current liabilities
Bank indebtedness $ 6.3 $ 4.2
Accounts payable and accrued
charges 631.3 776.5
Provisions 23.0 33.7
Deferred revenue 294.5 295.7
Income taxes 4.3 2.7
Derivative financial instruments 24.1 -
Current portion of long-term debt 215.4 114.5
---------------------------------------
1,198.9 1,227.3
Non-current liabilities
Long-term debt 3,536.4 3,688.3
Derivative financial instruments 242.9 315.4
Other liabilities 338.8 344.7
Deferred income taxes 657.8 592.5
---------------------------------------
4,775.9 4,940.9
Equity
Capital stock 342.0 339.5
Contributed surplus 2.3 0.9
Retained earnings 1,206.6 1,077.2
Accumulated other comprehensive
income 19.1 8.6
---------------------------------------
Equity attributable to shareholders 1,570.0 1,426.2
Non-controlling interests 1,543.2 1,444.4
---------------------------------------
3,113.2 2,870.6
---------------------------------------
Total liabilities and equity $ 9,088.0 $ 9,038.8
---------------------------------------
---------------------------------------
Contacts: Jean-Francois Pruneau Chief Financial Officer Quebecor
Inc. and Quebecor Media Inc.jean-francois.pruneau@quebecor.com
(514) 380-4144 J. Serge Sasseville Senior Vice President, Corporate
and Institutional Affairs Quebecor Media
Inc.serge.sasseville@quebecor.com (514) 380-1864
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