Quebecor Inc. Reports Consolidated Results for First Quarter 2014
MONTREAL, QUEBEC--(Marketwired - May 8, 2014) - Quebecor Inc.
("Quebecor" or "the Corporation") (TSX:QBR.A)(TSX:QBR.B) today
reported its consolidated financial results for the first quarter
of 2014. Quebecor consolidates the financial results of its
Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it
holds a 75.4% interest.
Highlights
First quarter 2014
- Revenues up $11.4 million (1.1%) to $1.04 billion.
- Adjusted operating income(1): $346.5 million, up $21.5 million
(6.6%) compared with the first quarter of 2013.
- Net income attributable to shareholders: $40.7 million ($0.33
per basic share) in the first quarter of 2014 compared with $35.6
million ($0.29 per basic share) in the same period of 2013, a
favourable variance of $5.1 million ($0.04 per basic share).
- Adjusted income from continuing operations(2): $49.3 million
($0.40 per basic share) in the first quarter of 2014, compared with
$36.0 million ($0.29 per basic share) in the same period of 2013,
an increase of $13.3 million ($0.11 per basic share).
- The Telecommunications segment grew its revenues by $31.8
million (4.8%) and its adjusted operating income by $21.9 million
(7.0%) in the first quarter of 2014.
- Videotron Ltd. ("Videotron") recorded first quarter 2014
revenue increases for all of its major services: Internet access
($13.6 million or 6.9%), mobile telephony ($11.7 million or 23.4%),
cable telephony ($2.2 million or 1.9%), and cable television ($0.8
million or 0.3%).
- On April 28, 2014, Pierre Dion, President and Chief Executive
Officer of TVA Group Inc. ("TVA Group"), was appointed President
and Chief Executive Officer of Quebecor and Quebecor Media,
replacing Robert Dépatie who resigned as President and Chief
Executive Officer of Quebecor, Quebecor Media and Videotron for
health reasons. Pierre Dion will continue to serve as President and
Chief Executive Officer of TVA Group until a successor is named.
Manon Brouillette was named President and Chief Executive Officer
of Videotron on May 7, 2014.
- On March 9, 2014, Pierre Karl Péladeau resigned all his
positions on the Boards of Directors of Quebecor and its
subsidiaries following his decision to enter politics.
Subsequently, Sylvie Lalande was appointed Chairperson of the Board
of TVA Group on March 10, 2014 and Françoise Bertrand was appointed
Chairperson of the Board of Quebecor Media on March 12, 2014.
- Since March 28, 2014, Apple products have been included in the
selection of mobile devices Videotron offers to its customers. A
new illico app was released for the iPhone 4 and 5 (5C and 5S). It
makes thousands of hours of content from some 50 television
channels available free of charge to subscribers to Videotron's
cable television service.
- On April 3, 2014, Videotron completed the acquisition of seven
700 MHz spectrum licences in the Industry Canada spectrum auction
for a total consideration of $233.3 million. The licences for
Canada's four most populous provinces make it possible to reach
approximately 80% of Canada's population, more than 28 million
people.
(1) |
See "Adjusted operating income" under "Definitions." |
|
|
(2) |
See "Adjusted income from continuing operations" under
"Definitions." |
"Quebecor exhibited solid growth in the first quarter of 2014
with a 6.6% increase in adjusted operating income and a 36.9%
increase in adjusted income from continuing operations," noted
Pierre Dion, President and Chief Executive Officer of Quebecor.
"The growth was driven primarily by the Telecommunications segment,
as well as by the favourable impact of the various refinancing
operations completed at advantageous interest rates."
"Videotron posted outstanding results again in the first quarter
of 2014," commented Manon Brouillette, President and Chief
Operating Officer of Videotron. "Revenues grew $31.8 million or
4.8% and adjusted operating income rose $21.9 million or 7.0%.
Average monthly revenue per user ("ARPU") was $121.72 in the first
quarter of 2014, up $7.23 (6.3%) from the same period of 2013. The
strong results demonstrated once again Videotron's ability to
deliver the best experience to customers of all its services."
"Quebecor continued refocusing its news media activities," said
Julie Tremblay, President and Chief Executive Officer of Sun Media
Corporation. "Among other things, it withdrew from door-to-door
distribution of weekly newspapers and flyers in Québec and
discontinued distribution of the Le Sac Plus doorknob bag in
January 2014. With respect to results, the News Media segment's
adjusted operating income increased slightly despite an 8.6%
decrease in revenues, reflecting the positive impact of the
numerous cost-control and repositioning initiatives taken over the
past several years. These initiatives yielded $12.0 million in
savings in the first quarter of 2014. The segment will continue
focusing on its core businesses and on developing new content that
can be brought to all platforms."
"In the Broadcasting segment, TVA Network's hit show La
Voix was a phenomenal success in its second season, comparable
to season 1," said Pierre Dion. "Ratings were exceptional
throughout its run from January 19 to April 13, 2014. The weekly
gala drew an average audience of more than 2.6 million viewers and
an average market share of 56.9%. Under continuing adverse market
conditions for traditional media, TVA Group's conventional and
specialty channels had a combined market share of 32.8% during the
Winter 2014 season, including 24.2% for TVA Network, more than its
two main conventional rivals combined. During the same period, 20
of the 30 top-rated shows in Québec were on the TVA Network.
Adjusted operating income was negatively impacted in the first
quarter of 2014 by the decline in advertising revenues, by higher
content costs due, among other things, to the Québec election
campaign, and by certain non-recurring, retroactive indemnity
costs. Finally, to expand its programming, TVA Sports reached
long-term agreements during the quarter with prestigious properties
such as Major League Baseball, the Canadian Hockey League and the
Quebec Major Junior Hockey League."
"On the financial front, Videotron issued Senior Notes in the
aggregate principal amount of US$600.0 million, bearing interest at
an advantageous 5.375% rate, and used a portion of the proceeds to
prepay US$260.0 million principal amount of its 9.125% Senior
Notes," reported Jean-François Pruneau, Senior Vice President and
Chief Financial Officer of Quebecor. "Quebecor Media redeemed and
prepaid all of its 7.75% Senior Notes in the aggregate principal
amount of US$380.0 million. These opportunistic financing
transactions by Quebecor Media and Videotron will yield annual debt
interest savings of approximately $20.0 million."
The members of the Board of Directors of Quebecor wish to
express their gratitude to Robert Dépatie, who has played an
instrumental role in the Corporation's success for 13 years. They
wish him well in his future projects.
"During the first quarter of 2014, Quebecor posted solid
consolidated financial results and continued growth in the
Telecommunications segment," said Pierre Dion. "By leveraging all
its strengths, Quebecor will continue positioning itself to pursue
its business development and profitability targets and create
shareholder value."
Table 1 |
Quebecor first quarter financial highlights, 2010 to
2014 |
(in millions of Canadian dollars, except per share
data) |
|
2014 |
2013 |
2012 |
2011 |
2010 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
1,038.1 |
$ |
1,026.7 |
$ |
1,035.7 |
$ |
964.2 |
$ |
924.4 |
Adjusted operating income |
|
346.5 |
|
325.0 |
|
325.7 |
|
295.2 |
|
286.8 |
Income from continuing operations attributable to
shareholders |
|
41.2 |
|
38.5 |
|
73.1 |
|
34.3 |
|
33.3 |
Net income attributable to shareholders |
|
40.7 |
|
35.6 |
|
71.4 |
|
33.2 |
|
34.4 |
Adjusted income from continuing operations |
|
49.3 |
|
36.0 |
|
39.5 |
|
35.8 |
|
41.8 |
Per basic share1: |
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to shareholders |
|
0.33 |
|
0.31 |
|
0.57 |
|
0.27 |
|
0.26 |
|
Net
income attributable to shareholders |
|
0.33 |
|
0.29 |
|
0.56 |
|
0.26 |
|
0.27 |
|
Adjusted income from continuing operations |
|
0.40 |
|
0.29 |
|
0.31 |
|
0.28 |
|
0.32 |
(1) |
Per share data has been retroactively adjusted to reflect the
two-for-one split of the Corporation's shares on August 14,
2013. |
Discontinued operations
Quebecor Media
announced that it was abandoning door-to-door distribution of
community newspapers and flyers in Québec and discontinuing
distribution of the Le Sac Plus doorknob bag as of January 2014. On
December 5, 2013, Quebecor Media announced the sale of 74 Québec
weeklies to Transcontinental Interactive Inc., a subsidiary of
Transcontinental Inc., for a cash consideration of $75.0 million.
The transaction is subject to approval by regulatory authorities.
Quebecor Media sold its specialized websites Jobboom and
Réseau Contact on June 1, 2013 for a total cash
consideration of $59.2 million, net of disposed-of cash in the
amount of $5.8 million. The operating results and cash flows
related to those businesses, as well as the $37.6 million gain on
the sale of the two websites, were reclassified as discontinued
operations in the consolidated statements of income and cash
flows.
2014/2013 first quarter
comparison
Revenues: $1.04
billion, an $11.4 million (1.1%) increase.
- Revenues increased in Telecommunications ($31.8 million or 4.8%
of segment revenues).
- Revenues were flat in Interactive Technologies and
Communications.
- Revenues decreased in News Media ($16.0 million or -8.6%),
Broadcasting ($4.8 million or -4.2%), and Leisure and Entertainment
($2.7 million or -4.2%).
Adjusted operating
income: $346.5 million, a $21.5 million (6.6%) increase.
- Adjusted operating income increased in Telecommunications
($21.9 million or 7.0% of segment adjusted operating income),
Interactive Technologies and Communications ($1.3 million), News
Media ($0.3 million or 2.0%), and Head Office ($7.1 million). The
increase at Head Office was due to the change in the stock option
expense.
- Adjusted operating income decreased in Broadcasting ($7.0
million) and Leisure and Entertainment ($2.1 million).
- The change in the fair value of Quebecor Media stock options
resulted in a $1.9 million unfavourable variance in the stock-based
compensation charge in the first quarter of 2014 compared with the
same period of 2013. The change in the fair value of Quebecor stock
options and the impact of various transactions on the options
issued under this program resulted in an $8.4 million favourable
variance in the Corporation's stock-based compensation charge in
the first quarter of 2014.
Net income attributable to shareholders: $40.7 million ($0.33
per basic share) in the first quarter of 2014 compared with $35.6
million ($0.29 per basic share) in the same period of 2013, a
favourable variance of $5.1 million ($0.04 per basic share).
- The favourable variance was due primarily to:
- $21.5 million increase in adjusted operating income;
- $6.4 million decrease in financial expenses;
- $3.8 million decrease in tax on income from continuing
operations;
- $3.2 million favourable variance in the loss related to
discontinued operations;
- $2.1 million decrease in income attributable to non-controlling
interest.
- Partially offset by:
- $18.7 million loss on debt refinancing recorded in the first
quarter of 2014;
- $7.6 million increase in the amortization charge;
- $5.7 million unfavourable variance in gains on valuation and
translation of financial instruments.
Adjusted income from continuing operations: $49.3 million ($0.40
per basic share) in the first quarter of 2014 compared with $36.0
million ($0.29 per basic share) in the same period of 2013, an
increase of $13.3 million ($0.11 per basic share).
Financing activities
The following
financial transactions have been concluded since the end of
2013.
- On April 9, 2014, Videotron issued US$600.0 million aggregate
principal amount of 5.375% Senior Notes maturing on June 15, 2024,
for net proceeds of $646.4 million, net of financing fees of $7.8
million. Videotron fully hedged the exchange risk on the new Senior
Notes by means of cross-currency interest rate swaps. It also
converted the fixed interest rate on a US$158.6 million tranche of
the Senior Notes to a floating rate.
- Videotron used the proceeds from the April 9, 2014 issuance of
Senior Notes to prepay and withdraw on April 24, 2014 US$260
million principal amount of its outstanding 9.125% Senior Notes,
issued on March 5, 2009 and due April 15, 2018, to repay drawings
under its revolving credit facility, to pay transaction fees and
expenses, and for general corporate purposes. Strong demand enabled
Videotron to upsize the offering with favorable pricing, which
clearly demonstrates the strength of the subsidiary's business and
credit profile.
- On April 25, 2014, Quebecor Media completed the redemption and
early repayment of all of its outstanding 7.75% Senior Notes in the
aggregate principal amount of US$380.0 million, issued on October
5, 2007 and maturing on March 15, 2016, and unwound the hedges in
an asset position.
Dividends
On May 7, 2014, the Board of Directors of Quebecor declared a
quarterly dividend of $0.025 per share on its Class A Multiple
Voting Shares and Class B Subordinate Voting Shares, payable on
June 17, 2014 to shareholders of record at the close of business on
May 23, 2014. This dividend is designated to be an eligible
dividend, as provided under subsection 89(14) of the Canadian
Income Tax Act and its provincial counterpart.
Detailed financial information
For a detailed analysis of Quebecor's first quarter 2014
results, 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 2014 results on May 8, 2014, at 11:00 AM 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 16546#. A tape recording of the call will be available
from May 8 to June 14, 2014 by dialing 1 877 293-8133, conference
number 1155306, access code for participants 16546#. 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 the Corporation'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, 2013.
The forward-looking statements in this press release reflect
Quebecor's expectations as of May 8, 2014, 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, a Canadian telecommunications, entertainment and news
media leader, is one of the best-performing integrated
communications companies in the industry. Driven by their
determination to deliver the best possible customer experience, all
of Quebecor's subsidiaries and brands are differentiated by their
high-quality, multiplatform, convergent products and services.
Quebecor (TSX:QBR.A)(TSX:QBR.B) is firmly based in Québec. It
holds a 75.36% interest in Quebecor Media, which employs nearly
15,000 people in Canada.
A family business founded in 1950, Quebecor is strongly
committed to the community. Every year, it actively supports people
working with more than 400 organizations in the vital fields of
culture, health, education, the environment, and
entrepreneurship.
Visit our Web site: www.quebecor.com
Follow us on Twitter: twitter.com/QuebecorMedia
DEFINITIONS
Adjusted operating income
In its analysis of operating results, the Corporation defines
adjusted operating income, as reconciled to net income under
International Financial Reporting Standards ("IFRS"), as net income
before amortization, financial expenses, gain on valuation and
translation of financial instruments, charge for restructuring of
operations, impairment of assets and other special items, loss on
debt refinancing, income taxes, and loss related to discontinued
operations. Adjusted 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 adjusted 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 impairment and amortization of tangible and
intangible assets and is unaffected by the capital structure or
investment activities of the Corporation and its segments.
Adjusted 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 continuing operating activities of the Quebecor
Media subsidiary. In addition, measures like adjusted 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 adjusted
operating income may not be the same as similarly titled measures
reported by other companies.
Table 2 below provides a reconciliation of adjusted operating
income to net income as disclosed in Quebecor's condensed
consolidated financial statements.
Table 2 |
Reconciliation of the adjusted 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 March 31 |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Adjusted operating (loss) income: |
|
|
|
|
|
|
|
Telecommunications |
$ |
334.6 |
|
$ |
312.7 |
|
|
News
Media |
|
15.4 |
|
|
15.1 |
|
|
Broadcasting |
|
(10.8 |
) |
|
(3.8 |
) |
|
Leisure and Entertainment |
|
(2.0 |
) |
|
0.1 |
|
|
Interactive Technologies and Communications |
|
2.6 |
|
|
1.3 |
|
|
Head Office |
|
6.7 |
|
|
(0.4 |
) |
|
|
346.5 |
|
|
325.0 |
|
Amortization |
|
(169.6 |
) |
|
(162.0 |
) |
Financial expenses |
|
(90.8 |
) |
|
(97.2 |
) |
Gain on valuation and translation of financial
instruments |
|
2.0 |
|
|
7.7 |
|
Restructuring of operations, impairment of assets and
other special items |
|
(1.5 |
) |
|
(1.6 |
) |
Loss on debt refinancing |
|
(18.7 |
) |
|
- |
|
Income taxes |
|
(18.5 |
) |
|
(22.3 |
) |
Loss from discontinued operations |
|
(0.7 |
) |
|
(3.9 |
) |
Net income |
$ |
48.7 |
|
$ |
45.7 |
|
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 on valuation and translation of financial instruments,
charge for restructuring of operations, impairment of assets and
other special items, loss on debt refinancing, net of income tax
related to adjustments, net income attributable to non-controlling
interests related to adjustments, and loss from discontinued
operations attributable to shareholders. 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 uses adjusted
income from continuing operations to analyze trends in the
performance of its businesses. The above-listed items are excluded
from the calculation of this measure because they impair the
comparability of the financial results. Adjusted income from
continuing operations is more representative for the purpose of
forecasting income. In addition, this measure is commonly used by
the investment community to analyze and compare corporate
performance. The Corporation's definition of adjusted income from
continuing operations 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 March 31 |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Adjusted income from continuing operations |
$ |
49.3 |
|
$ |
36.0 |
|
Gain
on valuation and translation of financial instruments |
|
2.0 |
|
|
7.7 |
|
Restructuring of operations, impairment of assets and other special
items |
|
(1.5 |
) |
|
(1.6 |
) |
Loss
on debt refinancing |
|
(18.7 |
) |
|
− |
|
Income taxes related to adjustments1 |
|
7.3 |
|
|
(3.3 |
) |
Net
income attributable to non-controlling interest related to
adjustments |
|
2.8 |
|
|
(0.3 |
) |
Discontinued operations |
|
(0.5 |
) |
|
(2.9 |
) |
Net income attributable to shareholders |
$ |
40.7 |
|
$ |
35.6 |
|
|
|
|
|
|
|
|
(1) |
Includes impact of fluctuations in income tax applicable to
adjusted items, either for statutory reasons or in connection with
tax transactions. |
Average Monthly Revenue per User
ARPU is an industry metric that the Corporation uses to measure
its monthly cable television, Internet access, cable 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, and cable 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) |
|
|
|
(unaudited) |
Three months ended March 31 |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
1,038.1 |
|
$ |
1,026.7 |
|
|
|
|
|
|
|
|
Employee costs |
|
239.9 |
|
|
262.0 |
|
Purchase of goods and services |
|
451.7 |
|
|
439.7 |
|
Amortization |
|
169.6 |
|
|
162.0 |
|
Financial expenses |
|
90.8 |
|
|
97.2 |
|
Gain on valuation and translation of financial
instruments |
|
(2.0 |
) |
|
(7.7 |
) |
Restructuring of operations, impairment of assets and
other special items |
|
1.5 |
|
|
1.6 |
|
Loss on debt refinancing |
|
18.7 |
|
|
- |
|
|
|
|
|
|
|
|
Income before income taxes |
|
67.9 |
|
|
71.9 |
|
|
|
|
|
|
|
|
Income taxes: |
|
|
|
|
|
|
|
Current |
|
6.4 |
|
|
24.2 |
|
|
Deferred |
|
12.1 |
|
|
(1.9 |
) |
|
|
|
|
|
|
|
|
|
18.5 |
|
|
22.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
49.4 |
|
|
49.6 |
|
|
|
|
|
|
|
|
Loss from discontinued operations |
|
(0.7 |
) |
|
(3.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
48.7 |
|
$ |
45.7 |
|
|
|
|
|
|
|
|
Income from continuing operations attributable to |
|
|
|
|
|
|
|
Shareholders |
$ |
41.2 |
|
$ |
38.5 |
|
|
Non-controlling interests |
|
8.2 |
|
|
11.1 |
|
|
|
|
|
|
|
|
Net income attributable to |
|
|
|
|
|
|
|
Shareholders |
$ |
40.7 |
|
$ |
35.6 |
|
|
Non-controlling interests |
|
8.0 |
|
|
10.1 |
|
|
|
|
|
|
|
|
Earnings per share attributable to shareholders |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
From
continuing operations |
$ |
0.33 |
|
$ |
0.31 |
|
|
|
From
discontinued operations |
|
- |
|
|
(0.02 |
) |
|
|
Net
income |
|
0.33 |
|
|
0.29 |
|
|
Diluted: |
|
|
|
|
|
|
|
|
From
continuing operations |
|
0.29 |
|
|
0.26 |
|
|
|
From
discontinued operations |
|
- |
|
|
(0.02 |
) |
|
|
Net
income |
|
0.29 |
|
|
0.24 |
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding (in
millions) |
|
123.1 |
|
|
124.7 |
|
Weighted average number of diluted shares (in
millions) |
|
144.2 |
|
|
150.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR INC. AND ITS SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(in millions of Canadian dollars) |
|
|
|
(unaudited) |
Three months ended March 31 |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
48.7 |
|
$ |
45.7 |
|
|
|
|
|
|
|
|
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified to income: |
|
|
|
|
|
|
|
|
Gain on translation of net investments in foreign
operations |
|
1.9 |
|
|
1.1 |
|
|
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
Loss
on valuation of derivative financial instruments |
|
(11.6 |
) |
|
(25.9 |
) |
|
|
|
Deferred income taxes |
|
(7.7 |
) |
|
0.8 |
|
|
|
|
|
|
|
|
|
|
Reclassification to income: |
|
|
|
|
|
|
|
|
Gain related to cash flow hedges |
|
(10.8 |
) |
|
- |
|
|
|
Deferred income taxes |
|
0.4 |
|
|
- |
|
|
|
(27.8 |
) |
|
(24.0 |
) |
|
|
|
|
|
|
|
Comprehensive income |
$ |
20.9 |
|
$ |
21.7 |
|
|
|
|
|
|
|
|
Comprehensive income attributable to |
|
|
|
|
|
|
|
Shareholders |
$ |
19.7 |
|
$ |
17.5 |
|
|
Non-controlling interests |
|
1.2 |
|
|
4.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR INC. AND ITS SUBSIDIARIES |
SEGMENTED INFORMATION |
(in millions of Canadian dollars) |
(unaudited) |
|
|
Three months ended March 31, 2014 |
|
|
|
Telecommu-nications |
|
NewsMedia |
|
Broad-casting |
|
|
LeisureandEnter-tainment |
|
|
InteractiveTechno-logies andCommuni-cations |
|
Headofficeand Inter-segments |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
692.7 |
$ |
169.2 |
$ |
108.9 |
|
$ |
61.6 |
|
$ |
35.1 |
$ |
(29.4 |
) |
$ |
1,038.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee costs |
|
92.2 |
|
61.9 |
|
35.8 |
|
|
14.6 |
|
|
24.4 |
|
11.0 |
|
|
239.9 |
|
Purchase of goods and services |
|
265.9 |
|
91.9 |
|
83.9 |
|
|
49.0 |
|
|
8.1 |
|
(47.1 |
) |
|
451.7 |
|
Adjusted operating income(1) |
|
334.6 |
|
15.4 |
|
(10.8 |
) |
|
(2.0 |
) |
|
2.6 |
|
6.7 |
|
|
346.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169.6 |
|
Financial expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90.8 |
|
Gain
on valuation and translation of financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.0 |
) |
Restructuring of operations, impairment of assets and other special
items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.5 |
|
Loss on debt refinancing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18.7 |
|
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
67.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
$ |
143.0 |
$ |
1.8 |
$ |
8.7 |
|
$ |
2.3 |
|
$ |
0.5 |
$ |
- |
|
$ |
156.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to intangible assets |
|
68.9 |
|
1.4 |
|
0.8 |
|
|
0.9 |
|
|
- |
|
(0.2 |
) |
|
71.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2013 |
|
|
|
Telecommu- nications |
|
News Media |
|
Broad- casting |
|
|
Leisure and Enter- tainment |
|
Interactive Techno- logies and Communi- cations |
|
Head office and Inter- segments |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
660.9 |
$ |
185.2 |
$ |
113.7 |
|
$ |
64.3 |
$ |
35.2 |
$ |
(32.6 |
) |
$ |
1,026.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee costs |
|
94.3 |
|
72.1 |
|
37.8 |
|
|
14.8 |
|
25.0 |
|
18.0 |
|
|
262.0 |
|
Purchase of goods and services |
|
253.9 |
|
98.0 |
|
79.7 |
|
|
49.4 |
|
8.9 |
|
(50.2 |
) |
|
439.7 |
|
Adjusted operating income(1) |
|
312.7 |
|
15.1 |
|
(3.8 |
) |
|
0.1 |
|
1.3 |
|
(0.4 |
) |
|
325.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162.0 |
|
Financial expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97.2 |
|
Gain
on valuation and translation of financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.7 |
) |
Restructuring of operations, impairment of assets and other special
items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.6 |
|
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
71.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
$ |
145.6 |
$ |
2.2 |
$ |
5.4 |
|
$ |
0.5 |
$ |
0.8 |
$ |
0.2 |
|
$ |
154.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to intangible assets |
|
13.0 |
|
1.0 |
|
0.6 |
|
|
0.7 |
|
- |
|
0.1 |
|
|
15.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Chief Executive Officer uses adjusted operating income
as the measure of profit to assess the performance of each segment.
Adjusted operating income is referred as a non-IFRS measure and is
defined as net income before amortization, financial expenses, gain
on valuation and translation of financial instruments,
restructuring of operations, impairment of assets and other special
items, loss on debt refinancing, income taxes and loss from
discontinued operations.
QUEBECOR INC. AND ITS SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF EQUITY |
(in
millions of Canadian dollars) |
(unaudited) |
|
|
|
|
|
|
|
Equity attributable to shareholders |
|
Equityattributableto
non-controllinginterests |
|
Totalequity |
|
Capitalstock |
|
Contributedsurplus |
Equitycomponentof convertibledebentures |
Retainedearnings |
|
Accumulatedother com-prehensiveloss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
$ |
335.1 |
|
$ |
2.3 |
$ |
398.3 |
$ |
624.6 |
|
$ |
(50.3 |
) |
$ |
631.3 |
|
$ |
1,941.3 |
|
Net
income |
|
- |
|
|
- |
|
- |
|
35.6 |
|
|
- |
|
|
10.1 |
|
|
45.7 |
|
Other
comprehensive loss |
|
- |
|
|
- |
|
- |
|
- |
|
|
(18.1 |
) |
|
(5.9 |
) |
|
(24.0 |
) |
Repurchase of Class B Shares |
|
(1.2 |
) |
|
- |
|
- |
|
(5.0 |
) |
|
- |
|
|
- |
|
|
(6.2 |
) |
Dividends |
|
- |
|
|
- |
|
- |
|
(3.1 |
) |
|
- |
|
|
(6.2 |
) |
|
(9.3 |
) |
Balance as of March 31, 2013 |
|
333.9 |
|
|
2.3 |
|
398.3 |
|
652.1 |
|
|
(68.4 |
) |
|
629.3 |
|
|
1,947.5 |
|
Net
loss |
|
- |
|
|
- |
|
- |
|
(169.5 |
) |
|
- |
|
|
(42.2 |
) |
|
(211.7 |
) |
Other
comprehensive income |
|
- |
|
|
- |
|
- |
|
- |
|
|
45.3 |
|
|
27.3 |
|
|
72.6 |
|
Repurchase of Class B Shares |
|
(5.0 |
) |
|
- |
|
- |
|
(25.2 |
) |
|
- |
|
|
- |
|
|
(30.2 |
) |
Dividends |
|
- |
|
|
- |
|
- |
|
(9.3 |
) |
|
- |
|
|
(18.8 |
) |
|
(28.1 |
) |
Business acquisition |
|
- |
|
|
- |
|
- |
|
- |
|
|
- |
|
|
0.3 |
|
|
0.3 |
|
Balance as of December 31, 2013 |
|
328.9 |
|
|
2.3 |
|
398.3 |
|
448.1 |
|
|
(23.1 |
) |
|
595.9 |
|
|
1,750.4 |
|
Net
income |
|
- |
|
|
- |
|
- |
|
40.7 |
|
|
- |
|
|
8.0 |
|
|
48.7 |
|
Other
comprehensive loss |
|
- |
|
|
- |
|
- |
|
- |
|
|
(21.0 |
) |
|
(6.8 |
) |
|
(27.8 |
) |
Repurchase of Class B Shares |
|
(1.1 |
) |
|
- |
|
- |
|
(6.1 |
) |
|
- |
|
|
- |
|
|
(7.2 |
) |
Acquisition of non-controlling interests |
|
- |
|
|
- |
|
- |
|
(0.1 |
) |
|
- |
|
|
0.1 |
|
|
- |
|
Dividends |
|
- |
|
|
- |
|
- |
|
(3.1 |
) |
|
- |
|
|
(6.3 |
) |
|
(9.4 |
) |
Balance as of March 31, 2014 |
$ |
327.8 |
|
$ |
2.3 |
$ |
398.3 |
$ |
479.5 |
|
$ |
(44.1 |
) |
$ |
590.9 |
|
$ |
1,754.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR INC. AND ITS SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(in millions of Canadian dollars) |
(unaudited) |
|
Three months ended March 31 |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Cash flows related to operating activities |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
49.4 |
|
$ |
49.6 |
|
|
Adjustments for: |
|
|
|
|
|
|
|
|
Amortization of property, plant and equipment |
|
135.6 |
|
|
126.2 |
|
|
|
Amortization of intangible assets |
|
34.0 |
|
|
35.8 |
|
|
|
Gain
on valuation and translation of financial instruments |
|
(2.0 |
) |
|
(7.7 |
) |
|
|
Loss
on debt refinancing |
|
18.7 |
|
|
- |
|
|
|
Amortization of financing costs and long-term debt discount |
|
3.0 |
|
|
3.1 |
|
|
|
Deferred income taxes |
|
12.1 |
|
|
(1.9 |
) |
|
|
Other |
|
2.4 |
|
|
2.2 |
|
|
|
253.2 |
|
|
207.3 |
|
|
Net change in non-cash balances related to operating
activities |
|
(76.0 |
) |
|
(77.9 |
) |
Cash flows provided by continuing operating
activities |
|
177.2 |
|
|
129.4 |
|
Cash flows related to investing activities |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
(156.3 |
) |
|
(154.7 |
) |
|
Additions to intangible assets |
|
(71.8 |
) |
|
(15.4 |
) |
|
Proceeds from disposals of assets |
|
0.8 |
|
|
1.2 |
|
|
Other |
|
(0.6 |
) |
|
0.4 |
|
Cash flows used in continuing investing activities |
|
(227.9 |
) |
|
(168.5 |
) |
Cash flows related to financing activities |
|
|
|
|
|
|
|
Net change in bank indebtedness |
|
36.7 |
|
|
(0.3 |
) |
|
Net change under revolving facilities |
|
77.9 |
|
|
(5.7 |
) |
|
Repayments of long-term debt |
|
(6.4 |
) |
|
(5.5 |
) |
|
Settlement of hedging contracts |
|
(116.0 |
) |
|
(24.8 |
) |
|
Repurchase of Class B Shares |
|
(7.2 |
) |
|
(6.2 |
) |
|
Dividends paid to non-controlling shareholders |
|
(6.3 |
) |
|
(6.2 |
) |
Cash flows used in continuing financing activities |
|
(21.3 |
) |
|
(48.7 |
) |
|
|
|
|
|
|
|
Net change in cash and cash equivalents from continuing
operations |
|
(72.0 |
) |
|
(87.8 |
) |
|
|
|
|
|
|
|
Cash flows used in discontinued operations |
|
(0.4 |
) |
|
(6.1 |
) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash
equivalents denominated in foreign currencies |
|
1.3 |
|
|
- |
|
Cash and cash equivalents at beginning of period |
|
476.6 |
|
|
228.7 |
|
Cash and cash equivalents at end of period |
$ |
405.5 |
|
$ |
134.8 |
|
|
|
|
|
|
|
|
Cash and cash equivalents consist of |
|
|
|
|
|
|
|
Cash |
$ |
139.9 |
|
$ |
11.5 |
|
|
Cash equivalents |
|
265.6 |
|
|
123.3 |
|
|
$ |
405.5 |
|
$ |
134.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes reflected as operating
activities |
|
|
|
|
|
|
|
Cash interest payments |
$ |
29.6 |
|
$ |
24.6 |
|
|
Cash income tax payments (net of refunds) |
|
67.5 |
|
|
36.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR INC. AND ITS SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
(in millions of Canadian dollars) |
|
|
|
|
|
|
(unaudited) |
|
March 31 |
|
|
December 31 |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
405.5 |
|
$ |
476.6 |
|
|
Accounts receivable |
|
506.5 |
|
|
566.3 |
|
|
Income taxes |
|
25.3 |
|
|
18.0 |
|
|
Inventories |
|
222.3 |
|
|
239.4 |
|
|
Prepaid expenses |
|
60.9 |
|
|
48.2 |
|
|
Assets held for sale |
|
75.8 |
|
|
76.9 |
|
|
|
1,296.3 |
|
|
1,425.4 |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Property, plant and equipment |
|
3,413.9 |
|
|
3,432.4 |
|
|
Intangible assets |
|
856.1 |
|
|
824.8 |
|
|
Goodwill |
|
3,062.2 |
|
|
3,061.5 |
|
|
Derivative financial instruments |
|
224.3 |
|
|
142.1 |
|
|
Deferred income taxes |
|
18.4 |
|
|
28.1 |
|
|
Other
assets |
|
114.1 |
|
|
102.1 |
|
|
|
7,689.0 |
|
|
7,591.0 |
|
Total assets |
$ |
8,985.3 |
|
$ |
9,016.4 |
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Bank
indebtedness |
$ |
37.2 |
|
$ |
0.5 |
|
|
Accounts payable and accrued charges |
|
638.3 |
|
|
717.7 |
|
|
Provisions |
|
25.4 |
|
|
39.4 |
|
|
Deferred revenue |
|
294.9 |
|
|
288.8 |
|
|
Income taxes |
|
33.5 |
|
|
89.2 |
|
|
Derivative financial instruments |
|
- |
|
|
116.2 |
|
|
Current portion of long-term debt |
|
101.3 |
|
|
101.2 |
|
|
Liabilities held for sale |
|
8.5 |
|
|
9.0 |
|
|
|
1,139.1 |
|
|
1,362.0 |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Long-term debt |
|
5,174.2 |
|
|
4,975.3 |
|
|
Derivative financial instruments |
|
65.8 |
|
|
77.3 |
|
|
Other
liabilities |
|
269.6 |
|
|
278.7 |
|
|
Deferred income taxes |
|
581.9 |
|
|
572.7 |
|
|
|
6,091.5 |
|
|
5,904.0 |
|
Equity |
|
|
|
|
|
|
|
Capital stock |
|
327.8 |
|
|
328.9 |
|
|
Contributed surplus |
|
2.3 |
|
|
2.3 |
|
|
Equity component of convertible debentures |
|
398.3 |
|
|
398.3 |
|
|
Retained earnings |
|
479.5 |
|
|
448.1 |
|
|
Accumulated other comprehensive loss |
|
(44.1 |
) |
|
(23.1 |
) |
|
Equity attributable to shareholders |
|
1,163.8 |
|
|
1,154.5 |
|
|
Non-controlling interests |
|
590.9 |
|
|
595.9 |
|
|
|
1,754.7 |
|
|
1,750.4 |
|
|
|
|
|
|
|
|
Total liabilities and equity |
$ |
8,985.3 |
|
$ |
9,016.4 |
|
Jean-Francois PruneauSenior Vice President and Chief Financial
OfficerQuebecor Inc. and Quebecor Media
Inc.jean-francois.pruneau@quebecor.com514 380-4144Martin
TremblayVice President, Public AffairsQuebecor Media
Inc.martin.tremblay@quebecor.com514 380-1985
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