MONTRÉAL, March 14, 2018 /CNW
Telbec/ - Quebecor Inc. ("Quebecor" or the "Corporation") today
reported its fourth quarter and full-year 2017 consolidated
financial results. Quebecor consolidates the financial results of
its Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it
holds an 81.53% interest.
All comparative data have been restated to reflect the segment
reorganization carried out in the fourth quarter of 2017, as
described under "New segment structure" below. All references to
numbers of shares and per-share amounts have been restated to
reflect the 2-for-1 split of the Corporation's shares described
under "Financial transactions" below.
Highlights
2017 financial year and recent developments
- Revenues: $4.12 billion, up
$105.8 million (2.6%) from 2016.
- Adjusted operating income:1 $1.59 billion, up $99.3
million (6.6%), the largest annual increase since 2009.
- Net income attributable to shareholders: $369.7 million ($1.53 per basic share) in 2017, compared with
$194.7 million ($0.80 per basic share) in 2016, an increase of
$175.0 million ($0.73 per basic share) or 90.0%, partly
reflecting the favourable impact of the increase in adjusted
operating income and a $330.9 million
gain on the sale of spectrum licences, partially offset by a
$129.2 million unfavourable variance
related to the fair value of convertible debentures.
- Adjusted income from continuing operating
activities:2 $330.0
million ($1.37 per basic
share) in 2017, compared with $305.5
million ($1.25 per basic
share) in 2016, an increase of $24.5
million ($0.12 per basic
share) or 8.0%.
- The Telecommunications segment grew its revenues by
$133.3 million (4.2%) and its
adjusted operating income by $84.6
million (5.8%) in 2017.
- Videotron Ltd. ("Videotron") significantly increased its annual
revenues from mobile telephony ($99.4
million or 19.5%), Internet access ($52.2 million or 5.3%), business solutions
($13.4 million or 12.1%) and the Club
illico over-the-top video service ("Club illico") ($8.3 million or 26.4%).
- Videotron's average monthly revenue per user3
("ARPU") up $9.73 (6.7%) from
$144.86 in 2016 to $154.59 in 2017.
- Revenue-generating units:4 Net increase of 115,700
(2.0%) in 2017, including 130,100 connections to the mobile
telephony service (14.6%) and 46,900 memberships in Club illico
(14.9%). Net increase of 53,700 subscribers to cable Internet
access, the largest annual increase since 2013.
- On July 24, 2017, Videotron
realized a $243.1 million gain on the
sale of its seven 2500 MHz and 700 MHZ wireless spectrum licences
outside Québec to Shaw Communications Inc. for a $430.0 million cash consideration. On
June 20, 2017, Videotron realized an
$87.8 million gain on the sale of its
Advanced Wireless Services spectrum licence in the Metropolitan
Toronto area to Rogers Communications Canada Inc. for a cash
consideration of $184.2 million.
- Adjusted operating income up $15.4
million (28.6%) in the Media segment and $3.9 million (169.6%) in the Sports and
Entertainment segment.
- In the first quarter of 2017, the Corporation increased its
quarterly dividend on Class A Multiple Voting Shares ("Class A
Shares") and Class B Subordinate Voting Shares ("Class B Shares")
by 22.2%, from $0.0225 to
$0.0275 per share.
- Changes to the Corporation's senior management in 2017:
-
- On February 16, 2017, Pierre Karl
Péladeau returned to the position of President and Chief Executive
Officer of Quebecor and Quebecor Media;
- On October 13, 2017, France
Lauzière was named President and CEO of TVA Group Inc. ("TVA
Group") following the retirement of Julie
Tremblay;
- On August 11, 2017, Martin Tremblay was named Chief Operating
Officer of Sports and Entertainment Group.
Fourth quarter 2017
- Revenues: $1.06 billion, up
$8.8 million (0.8%).
- Adjusted operating income: $411.9
million, up $22.6 million
(5.8%).
- Net income attributable to shareholders: $65.6 million ($0.27 per basic share) in the fourth quarter of
2017, compared with $123.3 million
($0.50 per basic share) in the same
period of 2016, a decrease of $57.7
million ($0.23 per basic
share), including the $56.8 million
unfavourable impact of fluctuations in the fair value of
convertible debentures.
- Adjusted income from continuing operating activities:
$78.7 million ($0.33 per basic share) in the fourth quarter of
2017, compared with $84.7 million
($0.35 per basic share) in the same
period of 2016, a decrease of $6.0
million ($0.02 per basic
share) due in part to the impact of revising the depreciation
period for some telecommunications network components.
- Net increase of 34,900 revenue-generating units (0.6%) in the
fourth quarter of 2017, including 33,700 connections to the mobile
telephony service, 12,400 subscriptions to the cable Internet
access service and 14,200 memberships in Club illico.
"I was very proud to return to the helm of Quebecor in 2017,"
said Pierre Karl Péladeau, President and Chief Executive Officer of
Quebecor. "Over time, this Corporation has built a very solid
financial position and it has been growing its profitability for
several years. Improving on this already positive record, our
efforts yielded a $99.3 million
(6.6%) year-over-year increase in profitability in 2017, as
measured by adjusted operating income, the largest increase in the
past eight years. All of our segments contributed to this
exceptional result. In addition, Quebecor carried out a number of
successful financial transactions in 2017, including the sale of
spectrum licences outside Québec, which generated total inflows of
$614.2 million and total gains
on disposal of $330.9 million.
The Corporation now has more than $2.0 billion in available liquidity, placing
it in a powerful position in a highly competitive environment. Our
excellent financial position will enable us to continue investing
in Videotron's wired and wireless networks, in Comcast
Corporation's XFINITY X1 platform, and in the process of
repurchasing the Quebecor Media Common Shares held by
CDP Capital d'Amérique Investissement inc.
("CDP Capital").
"Once again, our strategy of investing in Videotron's flagship
products, including mobile telephony, Internet access, business
solutions and Club illico, contributed to the increase in the
Telecommunications segment's profitability. Similarly, the
significant improvement in adjusted operating income in the Media
and Sports and Entertainment segments resulted from the
diversification of our activities produced by our investing
strategies, including our spending on the TVA Sports specialty
channel and on film production & audiovisual services. The
improvement was also driven by our unparalleled selection of
content, which strengthened our advertising offerings to our
advertisers and thereby helped grow our revenues in the Media
segment, combined with stringent cost control and cost-reduction
initiatives in those two segments," Pierre Karl Péladeau
added.
"In the space of a few years, TVA Sports has attracted nearly
1.9 million subscribers and its market share is already
nearing that of its rival, which has been in existence for decades
and, prior to the arrival of TVA Sports, had enjoyed a 20-year
monopoly over French-language television sports in Québec. In the
spring of 2017, TVA Sports posted the best Québec ratings since
2008 for the Stanley Cup finals, which were carried on the rival
network from 2008 to 2014. Québec television audiences have
benefited from the fact that TVA Sports has opened up the market to
healthy competition and expanded the availability of sports
programming. We therefore believe the Canadian Radio-television and
Telecommunications Commission ("CRTC") decision on the fee payable
by Bell TV for distribution of the TVA Sports specialty service,
issued on January 17, 2018, to be
inequitable. Accordingly, on February 16,
2018, Quebecor filed an application in the Federal Court of
Appeal for leave to appeal the CRTC decision," Pierre Karl Péladeau
said.
"Subscriber connections to the mobile telephony service
increased by 14.6% in 2017," noted Manon
Brouillette, President and Chief Executive Officer of
Videotron. "In November 2017,
Videotron passed an historic milestone when it added
the millionth subscriber connection to its mobile telephony
service, a mark of the enviable stature it has achieved in
Quebec's mobile market.
Videotron's mobile telephony service owes its resounding success to
the steady addition of new enhancements, which are constantly
improving customer experience. For example, since November 2017, Videotron has been including
mobile access to Club illico with all new subscriptions to some
mobile plans. This move meets growing demand from consumers, who
increasingly are turning to their mobile phones to access their
favourite content.
"Our cable Internet access service registered its largest annual
subscriber increase since 2013. One of the factors in the growth
was the successful marketing strategy. Revenues from our business
services were also up significantly. This performance stems from
our investments of recent years in 4Degrees Colocation Inc.
("4Degrees Colocation") and Fibrenoire Inc., which enable us to
offer our business customers in Québec a full line of products and
services," Manon Brouillette
said.
Videotron also reached an agreement with Comcast Corporation in
2017 to develop an innovative IPTV solution based on Comcast's
XFINITY X1 platform. Videotron customers will enjoy a
state-of-the-art television experience and more user-friendly
navigation across a diverse selection of content, including
on-demand television shows, movies and concerts, as well as Web
videos and apps. This offering will also allow Quebecor Media to
showcase its own content.
"The numerous awards and distinctions Videotron earned in 2017
testify to the commitment of all our employees to delivering a
high-quality customer experience. Videotron has been rated Québec's
most respected telecommunications company for 12 consecutive
years. In 2017, it also ranked as the most forward-thinking and
most engaging Québec brand on the Ipsos-Infopresse index. As well,
Videotron led the list of the best telecommunications retailers in
Québec for the sixth time, according to a Léger survey,"
Manon Brouillette concluded.
"In the Media segment, the specialty channels, including TVA
Sports, and film production & audiovisual services were
responsible for a significant 46.2% increase in TVA Group's
adjusted operating income in 2017," said France Lauzière, President
and Chief Executive Officer of TVA Group. "Our broadcasting
business posted very strong results, mainly because of the impact
of the increase in advertising revenues at the specialty channels
and TVA Network, higher subscription revenues at TVA Sports,
and cost reductions generated by the various restructuring
initiatives implemented in recent years. The total market share of
TVA Group and its specialty channels was 37.2% in 2017, compared
with 35.5% in 2016, a 1.7-point increase (Numeris – French Quebec,
January 1 to December 31, 2017,
Mon-Sun, 2:00 – 2:00, t2+). In 2017, Mels Studios and
Postproduction G.P. ("MELS") posted an impressive increase in
volume on the strength of its soundstage and equipment rental
services, which were used by a host of productions including the
latest instalment of the American X-Men action film
franchise. Our MELS teams picked up numerous industry awards for
sound editing and visual effects for various productions, including
an Iris award in the Best Sound category in June 2017 for the film Two Lovers and a
Bear and three Canadian Screen Awards for Achievement in Visual
Effects, Achievement in Sound Editing and Achievement in Overall
Sound in March 2017 for the film
Race."
In the Sports and Entertainment segment, the Videotron Centre
completed its second year of operation in September 2017. During that period, the Videotron
Centre hosted 82 sporting events and concerts, as well as 17
corporate events. In all, nearly 845,000 people passed through the
turnstiles. In April 2017,
Billboard magazine ranked the Videotron Centre number 4 on
its list of Top Canadian Venues, based on concert receipts.
"Quebecor was very active on the financial front in 2017," said
Jean-François Pruneau, Senior Vice President and Chief Financial
Officer of Quebecor. "The redemption of Senior Notes and issuance
of Notes at more advantageous interest rates at the beginning of
the year will generate approximately $15.0 million in annual savings in interest
on the debt. Quebecor also increased its quarterly dividend by
22.2% for a cumulative increase of 120.0% over the past three
years, reflecting the strength of its balance sheet, and carried
out a 2-for-1 stock split.
"Also in 2017, Quebecor redeemed convertible debentures in the
principal amount of $50.0 million for a $95.2 million consideration and Quebecor
Media repurchased for cancellation a portion of the equity interest
held by CDP Capital, buying 541,899 of its Common Shares for an
aggregate consideration of $43.9 million, including $6.2 million in debt securities. It remains
our goal to make Quebecor the sole shareholder of Quebecor Media
upon completion of the share repurchase process begun in 2012.
Lastly, the Corporation purchased and cancelled a total of
5,590,700 Class B Shares in 2017 for a total cash consideration of
$127.5 million. Repurchases of
equity interest in shares and debentures convertible into shares
made in 2017 totalled over $260
million at fair value, without compromising the
Corporation's excellent financial flexibility," Jean‑François
Pruneau reported.
"In 2017, Quebecor posted solid financial results reflecting the
implementation of its business plan, focused on investment in lines
of business with high growth and profitability potential, combined
with efforts to further diversify its activities, improve
operational efficiency and increase its financial flexibility. The
Corporation remains well positioned to create shareholder value,"
Pierre Karl Péladeau concluded.
Table
1
|
Quebecor financial
highlights, 2013 to 2017
|
(in millions of
Canadian dollars, except per-share data)
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Revenues
|
$
|
4,122.4
|
|
$
|
4,016.6
|
|
$
|
3,890.8
|
|
$
|
3,619.8
|
|
$
|
3,549.8
|
Adjusted operating
income
|
|
1,593.4
|
|
|
1,494.1
|
|
|
1,440.7
|
|
|
1,409.8
|
|
|
1,380.4
|
Income (loss) from
continuing operating activities
attributable to shareholders
|
|
357.8
|
|
|
194.7
|
|
|
165.6
|
|
|
29.0
|
|
|
(127.2)
|
Net income (loss)
attributable to shareholders
|
|
369.7
|
|
|
194.7
|
|
|
151.8
|
|
|
(30.1)
|
|
|
(288.6)
|
Adjusted income from
continuing operating
activities
|
|
330.0
|
|
|
305.5
|
|
|
239.9
|
|
|
209.7
|
|
|
185.3
|
Per basic
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operating activities
attributable to shareholders
|
|
1.48
|
|
|
0.80
|
|
|
0.68
|
|
|
0.12
|
|
|
(0.52)
|
|
Net income (loss)
attributable to shareholders
|
|
1.53
|
|
|
0.80
|
|
|
0.62
|
|
|
(0.12)
|
|
|
(1.17)
|
|
Adjusted income from
continuing operating
activities
|
|
1.37
|
|
|
1.25
|
|
|
0.98
|
|
|
0.85
|
|
|
0.75
|
New segment structure
During the fourth quarter of 2017, the Corporation changed its
organizational structure and transferred its book publishing and
distribution operations and music distribution and production
operations from the Media segment to the Sports and Entertainment
segment. Accordingly, prior-period figures in the Corporation's
segmented reporting have been reclassified to reflect these
changes.
Table
2
|
Quebecor's
segmented revenues for the past eight quarters
|
(in millions of
Canadian dollars)
|
|
|
Q4-2017
|
|
Q3-2017
|
|
Q2-2017
|
|
Q1-2017
|
|
Q4-2016
|
|
Q3-2016
|
|
Q2-2016
|
|
Q1-2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
841.4
|
$
|
823.7
|
$
|
820.1
|
$
|
799.9
|
$
|
805.2
|
$
|
793.7
|
$
|
780.4
|
$
|
772.5
|
Media
|
|
199.5
|
|
186.8
|
|
199.5
|
|
184.1
|
|
222.2
|
|
178.9
|
|
196.2
|
|
191.9
|
Sports and
Entertainment
|
|
50.3
|
|
56.6
|
|
36.0
|
|
38.4
|
|
54.1
|
|
51.0
|
|
40.1
|
|
39.8
|
Head Office and
intersegment
|
|
(32.0)
|
|
(32.4)
|
|
(23.5)
|
|
(26.0)
|
|
(31.1)
|
|
(25.3)
|
|
(24.2)
|
|
(28.8)
|
Total
|
$
|
1,059.2
|
$
|
1,034.7
|
$
|
1,032.1
|
$
|
996.4
|
$
|
1,050.4
|
$
|
998.3
|
$
|
992.5
|
$
|
975.4
|
|
|
|
Table
3
|
Quebecor's
segmented adjusted operating income for the past eight
quarters
|
(in millions of
Canadian dollars)
|
|
|
Q4-2017
|
|
Q3-2017
|
|
Q2-2017
|
|
Q1-2017
|
|
Q4-2016
|
|
Q3-2016
|
|
Q2-2016
|
|
Q1-2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
388.8
|
$
|
379.3
|
$
|
388.8
|
$
|
377.1
|
$
|
364.6
|
$
|
363.6
|
$
|
362.5
|
$
|
358.7
|
Media
|
|
22.4
|
|
35.7
|
|
13.4
|
|
(2.2)
|
|
25.0
|
|
24.4
|
|
6.3
|
|
(1.8)
|
Sports and
Entertainment
|
|
2.3
|
|
8.3
|
|
(3.6)
|
|
(0.8)
|
|
(1.3)
|
|
8.8
|
|
(3.5)
|
|
(1.7)
|
Head
Office
|
|
(1.6)
|
|
(2.2)
|
|
(3.3)
|
|
(9.0)
|
|
1.0
|
|
(7.0)
|
|
(5.0)
|
|
(0.5)
|
Total
|
$
|
411.9
|
$
|
421.1
|
$
|
395.3
|
$
|
365.1
|
$
|
389.3
|
$
|
389.8
|
$
|
360.3
|
$
|
354.7
|
2017/2016 FINANCIAL YEAR COMPARISON
Revenues: $4.12 billion, a $105.8 million (2.6%) increase.
- Revenues increased in Telecommunications ($133.3 million or 4.2% of segment revenues).
- Revenues decreased in Media ($19.3
million or -2.4%) and in Sports and Entertainment
($3.7 million or -2.0%).
Adjusted operating income: $1.59
billion, a $99.3 million
(6.6%) increase.
- Adjusted operating income increased in Telecommunications
($84.6 million or 5.8% of segment
adjusted operating income), Media ($15.4
million or 28.6%) and Sports and Entertainment ($3.9 million).
- There was an unfavourable variance at Head Office ($4.6 million), mainly because of higher
philanthropic and IT costs.
- The change in the fair value of Quebecor Media stock options
resulted in a $0.9 million favourable
variance in the stock-based compensation charge in 2017 compared
with 2016. The change in the fair value of Quebecor stock options
and in the value of Quebecor stock-price-based share units resulted
in a $1.2 million favourable variance
in the Corporation's stock-based compensation charge in 2017.
Net income attributable to shareholders: $369.7 million ($1.53 per basic share) in 2017, compared with
$194.7 million ($0.80 per basic share) in 2016, an increase of
$175.0 million ($0.73 per basic share).
- The favourable variance was due primarily to:
-
- $330.9 million gain on the
sale of spectrum licences recognized in 2017, including
$165.5 million without any tax
consequences;
- $99.3 million increase in
adjusted operating income;
- $19.0 million decrease in
financial expenses;
- $14.6 million favourable
variance in income from discontinued operations;
- $10.8 million favourable
variance in the charge for restructuring of operations, litigation
and other items.
- Partially offset by:
-
- $129.5 million unfavourable
variance in the loss on valuation and translation of financial
instruments, including $129.2 million
without any tax consequences;
- $79.3 million unfavourable
variance in non-controlling interest;
- $59.4 million increase in the
depreciation and amortization charge;
- $20.2 million increase in the
income tax expense;
- $8.3 million unfavourable
variance in the loss on debt refinancing.
In 2017 and 2016, Quebecor Media performed impairment tests on
its Magazines cash-generating unit ("CGU") in view of the downtrend
in the industry's revenues. Quebecor Media concluded that the
recoverable amount of its Magazines CGU was less than its carrying
amount. Accordingly, a $30.0 million non-cash goodwill impairment
charge, including $1.5 million
without any tax consequences, was recorded in 2017 ($40.1 million without any tax consequences
in 2016). As well, a charge for impairment of intangible assets
totalling $12.4 million,
including $3.1 million without
any tax consequences, was recognized in 2017 (nil in 2016).
Adjusted income from continuing operating activities:
$330.0 million ($1.37 per basic share) in 2017, compared with
$305.5 million ($1.25 per basic share) in 2016, an increase of
$24.5 million ($0.12 per basic share).
2017/2016 FOURTH QUARTER COMPARISON
Revenues: $1.06 billion, an $8.8 million (0.8%) increase.
- Revenues increased in Telecommunications ($36.2 million or 4.5% of segment
revenues).
- Revenues decreased in Media ($22.7 million or -10.2%) and in Sports and
Entertainment ($3.8 million or
-7.0%).
Adjusted operating income: $411.9 million, a $22.6 million (5.8%) increase.
- Adjusted operating income increased in Telecommunications
($24.2 million or 6.6% of
segment adjusted operating income). There was a favourable variance
in Sports and Entertainment ($3.6 million).
- Adjusted operating income decreased in Media ($2.6 million or -10.4%). There was an
unfavourable variance at Head Office ($2.6 million).
- The change in the fair value of Quebecor Media stock options
resulted in a $2.3 million
favourable variance in the stock-based compensation charge in the
fourth quarter of 2017 compared with the same period of 2016. The
change in the fair value of Quebecor stock options and in the value
of Quebecor stock-price-based share units resulted in a
$2.7 million unfavourable
variance in the Corporation's stock-based compensation charge in
the fourth quarter of 2017.
Net income attributable to shareholders: $65.6 million ($0.27 per basic share) in the fourth quarter of
2017, compared with $123.3 million ($0.50 per basic share) in the same period of
2016, a decrease of $57.7 million ($0.23 per basic share).
- The decrease was mainly due to:
-
- $55.9 million unfavourable
variance in the loss on valuation and translation of financial
instruments, including $56.8 million
without any tax consequences;
- $26.8 million increase in the
depreciation and amortization charge;
- $14.8 million increase in the
income tax expense.
- Partially offset by:
-
- $22.6 million increase in
adjusted operating income;
- $7.3 million favourable variance
in the loss on debt refinancing;
- $6.9 million decrease in
financial expenses;
- $3.4 million favourable variance
in the charge for restructuring of operations, litigation and other
items.
Adjusted income from continuing operating activities:
$78.7 million ($0.33 per basic share) in the fourth quarter of
2017, compared with $84.7 million ($0.35 per basic share) in the same period of
2016, a decrease of $6.0 million
($0.02 per basic share) due in part
to the impact of revising the depreciation period for some
telecommunications network components.
Financial transactions
On November 15, 2017, the
Corporation carried out a two-for-one split of its outstanding
Class A Shares and Class B Shares. Accordingly, holders of the
Corporation's shares received an additional share for each share
owned on the record date of November 15, 2017.
On October 12, 2017, the
Corporation increased its secured revolving credit facility from
$150.0 million to $300.0 million.
On September 29, 2017, the
Corporation paid down its existing $30.1 million mortgage loan. On the same
day, the Corporation contracted a new $50.0 million mortgage loan at a fixed
interest rate of 3.757%, maturing in October
2022.
On July 14, 2017, Quebecor
received a notice regarding the conversion of convertible
debentures in the principal amount of $50.0 million for 4,155,844 Class B Shares
of Quebecor. The Corporation exercised its cash payment option and
paid $95.2 million on
September 6, 2017.
On July 6, 2017, Quebecor Media
repurchased for cancellation 541,899 of its Common Shares held by
CDP Capital for an aggregate purchase price of $37.7 million, payable in cash. On the same
date, Quebecor Media paid off a security held by CDP Capital for
$6.2 million. Upon completion of
these transactions, the Corporation's interest in Quebecor Media
increased from 81.07% to 81.53%, while CDP Capital's interest
decreased from 18.93% to 18.47%.
On May 4, 2017, Videotron
transferred all then-existing commitments under its unsecured
revolving credit facility to its secured revolving credit facility,
increasing its secured facility from $630.0 million to $965.0 million and terminating its unsecured
facility.
On May 1, 2017, Quebecor Media
fully redeemed its outstanding 7.375% Senior Notes issued on
January 5, 2011 and maturing on
January 15, 2021, in the aggregate
principal amount of $325.0 million, at a redemption price of
102.458% of their principal amount.
On May 1, 2017, Videotron redeemed
$125.0 million aggregate
principal amount of its outstanding 6.875% Senior Notes issued on
July 5, 2011 and maturing on
July 15, 2021 at a redemption price
of 103.438% of their principal amount, in accordance with a notice
issued on March 31, 2017. The
repurchase followed the redemption on January 5, 2017 of an initial $175.0 million tranche of the Notes.
On April 13, 2017, Videotron
issued US$600.0 million
aggregate principal amount of 5.125% Senior Notes maturing on
April 15, 2027, for net proceeds of
$794.5 million, net of financing
fees of $9.9 million.
Dividend
On March 13, 2018, the Board of
Directors of Quebecor declared a quarterly dividend of $0.0275 per share on its Class A Shares and Class
B Shares, payable on April 24, 2018
to shareholders of record as of the record date of March 30, 2018. This dividend is designated an
eligible dividend, as provided under subsection 89(14) of the
Canadian Income Tax Act and its provincial counterpart.
Normal course issuer bid
On August 9, 2017, the Board of
Directors of Quebecor authorized the renewal of its normal course
issuer bid for a maximum of 1,000,000 Class A Shares, representing
approximately 1.3% of issued and outstanding Class A Shares, and
for a maximum of 4,000,000 Class B Shares, representing
approximately 2.4% of issued and outstanding Class B Shares as of
August 1, 2017. The purchases can be
made from August 15, 2017 to
August 14, 2018 at prevailing market
prices on the open market through the facilities of the TSX or
other alternative trading systems. All shares purchased under the
bid will be cancelled.
On December 15, 2017, the maximum
number of Class B Shares that may be repurchased under the
Corporation's normal course issuer bid program was increased to
8,400,000, or approximately 9.9% of the public float as at
August 1, 2017.
In 2017, the Corporation purchased and cancelled 5,590,700 Class
B Shares for a total cash consideration of $127.5 million (1,218,600 Class B
Shares for a total cash consideration of $22.7 million in 2016). The $117.0 million excess of the purchase price
over the carrying value of the repurchased Class B Shares was
recorded in reduction of retained earnings ($20.4 million in 2016).
On November 9, 2017, the
Corporation announced that it had entered into an automatic
securities purchase plan ("the plan"), as of November 10, 2017, with a designated broker under
its normal course issuer bid, whereby shares may be repurchased
under the plan at times when such purchases would otherwise be
prohibited pursuant to regulatory restrictions or self-imposed
blackout periods.
Under the plan, before entering a self-imposed blackout period,
the Corporation may, but is not required to, ask the designated
broker to make purchases under the normal course issuer bid. Such
purchases shall be made at the discretion of the designated broker,
within parameters established by the Corporation prior to the
blackout periods. Outside the blackout periods, purchases will be
made at the discretion of the Corporation's management.
The plan received prior approval from the TSX. It came into
effect on November 13, 2017 and
terminates on the same date as the normal course issuer bid.
Detailed financial information
For a detailed analysis of Quebecor's fourth quarter and full
year 2017 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 fourth
quarter and full year 2017 results on March
14, 2018, at 11:00 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 48006#. A tape recording of the call will be
available from March 14 to June 14,
2018 by dialling 1 877 293-8133, conference number 1229124,
access code for participants 48006#. 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), new competition and
Quebecor's ability to retain its current customers and attract new
ones, risks related to fragmentation of the advertising market,
insurance risk, risks associated with capital investments
(including risks related to technological development and equipment
availability and breakdown), environmental risks, risks associated
with cybersecurity and the protection of personal information,
risks associated with labour agreements, 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, 2017.
The forward-looking statements in this press release reflect
Quebecor's expectations as of March 14,
2018 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.
About Quebecor
Quebecor, a Canadian leader in telecommunications,
entertainment, news media and culture, 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, QBR.B) is headquartered in Québec. It
holds an 81.53% interest in Quebecor Media, which employs more than
10,000 people in Canada.
A family business founded in 1950, Quebecor is strongly
committed to the community. Every year, it actively supports more
than 400 organizations in the vital fields of culture, health,
education, the environment, and entrepreneurship.
Visit our website: www.quebecor.com
Follow us on Twitter: www.twitter.com/Quebecor
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 depreciation and amortization, financial expenses, (loss)
gain on valuation and translation of financial instruments,
restructuring of operations, litigation and other items, gain on
sale of spectrum licences, impairment of goodwill and other assets,
loss on debt refinancing, income taxes, and income from
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 depreciation/amortization of
tangible and intangible assets and is unaffected by the capital
structure or investment activities of the Corporation and its
business 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. The Corporation's definition of adjusted
operating income may not be the same as similarly titled measures
reported by other companies.
Table 4 below provides a reconciliation of adjusted operating
income to net income as disclosed in Quebecor's consolidated
financial statements. The consolidated financial information for
the three-month periods ended December 31,
2017 and 2016 presented in Table 4 below is drawn from the
unaudited consolidated statements of income.
Table
4
|
Reconciliation of
the adjusted operating income measure used in this press release to
the net income measure used in the consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
Year ended
December 31
|
Three months
ended
December 31
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
1,534.0
|
$
|
1,449.4
|
$
|
388.8
|
$
|
364.6
|
|
Media
|
|
69.3
|
|
53.9
|
|
22.4
|
|
25.0
|
|
Sports and
Entertainment
|
|
6.2
|
|
2.3
|
|
2.3
|
|
(1.3)
|
|
Head
Office
|
|
(16.1)
|
|
(11.5)
|
|
(1.6)
|
|
1.0
|
|
|
1,593.4
|
|
1,494.1
|
|
411.9
|
|
389.3
|
Depreciation and
amortization
|
|
(712.4)
|
|
(653.0)
|
|
(194.1)
|
|
(167.3)
|
Financial
expenses
|
|
(309.0)
|
|
(328.0)
|
|
(77.5)
|
|
(84.4)
|
(Loss) gain on
valuation and translation of financial instruments
|
|
(199.8)
|
|
(70.3)
|
|
(8.1)
|
|
47.8
|
Restructuring of
operations, litigation and other items
|
|
(17.2)
|
|
(28.0)
|
|
(9.9)
|
|
(13.3)
|
Gain on sale of
spectrum licences
|
|
330.9
|
|
–
|
|
–
|
|
–
|
Impairment of
goodwill and other assets
|
|
(43.8)
|
|
(40.9)
|
|
–
|
|
–
|
Loss on debt
refinancing
|
|
(15.6)
|
|
(7.3)
|
|
–
|
|
(7.3)
|
Income
taxes
|
|
(138.0)
|
|
(117.8)
|
|
(36.2)
|
|
(21.4)
|
Income from
discontinued operations
|
|
14.6
|
|
–
|
|
0.3
|
|
–
|
Net
income
|
$
|
503.1
|
$
|
248.8
|
$
|
86.4
|
$
|
143.4
|
Adjusted income from continuing operating activities
The Corporation defines adjusted income from continuing
operating activities, as reconciled to net income attributable to
shareholders under IFRS, as net income attributable to shareholders
before (loss) gain on valuation and translation of financial
instruments, restructuring of operations, litigation and other
items, gain on sale of spectrum licences, impairment of goodwill
and other assets, loss on debt refinancing, net of income tax
related to adjustments and of net income attributable to
non-controlling interest related to adjustments, and before income
from discontinued operations attributable to shareholders. Adjusted
income from continuing operating activities, 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 operating activities 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 operating activities is more representative for
forecasting income. The Corporation's definition of adjusted income
from continuing operating activities may not be identical to
similarly titled measures reported by other companies.
Table 5 provides a reconciliation of adjusted income from
continuing operating activities to the net income attributable to
shareholders' measure used in Quebecor's consolidated financial
statements. The consolidated financial information for the
three-month periods ended December 31,
2017 and 2016 presented in Table 5 below is drawn from the
unaudited consolidated statements of income.
Table
5
|
Reconciliation of
the adjusted income from continuing operating activities measure
used in this press release to the net income attributable to
shareholders' measure used in the consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
Year ended
December 31
|
Three months
ended
December 31
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Adjusted income from
continuing operating activities
|
$
|
330.0
|
$
|
305.5
|
$
|
78.7
|
$
|
84.7
|
(Loss) gain on
valuation and translation of financial instruments
|
|
(199.8)
|
|
(70.3)
|
|
(8.1)
|
|
47.8
|
Restructuring of
operations, litigation and other items
|
|
(17.2)
|
|
(28.0)
|
|
(9.9)
|
|
(13.3)
|
Gain on sale of
spectrum licences
|
|
330.9
|
|
–
|
|
–
|
|
–
|
Impairment of
goodwill and other items
|
|
(43.8)
|
|
(40.9)
|
|
–
|
|
–
|
Loss on debt
refinancing
|
|
(15.6)
|
|
(7.3)
|
|
–
|
|
(7.3)
|
Income taxes related
to adjustments1
|
|
16.0
|
|
11.5
|
|
2.9
|
|
7.8
|
Net income
attributable to non‑controlling interest related to
adjustments
|
|
(42.7)
|
|
24.2
|
|
1.7
|
|
3.6
|
Discontinued
operations
|
|
11.9
|
|
–
|
|
0.3
|
|
–
|
Net income
attributable to shareholders
|
$
|
369.7
|
$
|
194.7
|
$
|
65.6
|
$
|
123.3
|
1 Includes
impact of fluctuations in income tax applicable to adjusted items,
either for statutory reasons or in connection with tax
transactions.
|
KEY PERFORMANCE INDICATOR
The Corporation uses ARPU, an industry metric, as a key
performance indicator. This indicator is used to measure monthly
revenues per average basic customer from its cable television,
Internet access, cable and mobile telephony services and Club
illico. 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 the combined
revenues from its cable television, Internet access, cable and
mobile telephony services and Club illico 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.
|
|
1
|
See "Adjusted
operating income" under "Definitions."
|
2
|
See "Adjusted income
from continuing operating activities" under
"Definitions."
|
3
|
See "Key performance
indicator."
|
4
|
The sum of
subscriptions to the cable Internet access, cable television and
Club illico services, plus subscriber connections to the mobile and
cable telephony services.
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars, except for earnings per share
data)
|
Three months
ended
|
|
Twelve months
ended
|
(unaudited)
|
December
31
|
|
December
31
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Revenues
|
$
|
1,059.2
|
$
|
1,050.4
|
|
$
|
4,122.4
|
$
|
4,016.6
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
172.3
|
|
178.6
|
|
|
712.1
|
|
714.8
|
Purchase of goods and
services
|
|
475.0
|
|
482.5
|
|
|
1,816.9
|
|
1,807.7
|
Depreciation and
amortization
|
|
194.1
|
|
167.3
|
|
|
712.4
|
|
653.0
|
Financial
expenses
|
|
77.5
|
|
84.4
|
|
|
309.0
|
|
328.0
|
Loss (gain) on
valuation and translation of financial instruments
|
|
8.1
|
|
(47.8)
|
|
|
199.8
|
|
70.3
|
Restructuring of
operations, litigation and other items
|
|
9.9
|
|
13.3
|
|
|
17.2
|
|
28.0
|
Gain on sale of
spectrum licences
|
|
-
|
|
-
|
|
|
(330.9)
|
|
-
|
Impairment of
goodwill and other assets
|
|
-
|
|
-
|
|
|
43.8
|
|
40.9
|
Loss on debt
refinancing
|
|
-
|
|
7.3
|
|
|
15.6
|
|
7.3
|
Income before
income taxes
|
|
122.3
|
|
164.8
|
|
|
626.5
|
|
366.6
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
(5.7)
|
|
27.7
|
|
|
8.8
|
|
158.2
|
|
Deferred
|
|
41.9
|
|
(6.3)
|
|
|
129.2
|
|
(40.4)
|
|
|
36.2
|
|
21.4
|
|
|
138.0
|
|
117.8
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
86.1
|
|
143.4
|
|
|
488.5
|
|
248.8
|
Income from
discontinued operations
|
|
0.3
|
|
-
|
|
|
14.6
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
86.4
|
$
|
143.4
|
|
$
|
503.1
|
$
|
248.8
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
65.3
|
$
|
123.3
|
|
$
|
357.8
|
$
|
194.7
|
|
Non-controlling
interests
|
|
20.8
|
|
20.1
|
|
|
130.7
|
|
54.1
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
65.6
|
$
|
123.3
|
|
$
|
369.7
|
$
|
194.7
|
|
Non-controlling
interests
|
|
20.8
|
|
20.1
|
|
|
133.4
|
|
54.1
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.27
|
$
|
0.50
|
|
$
|
1.48
|
$
|
0.80
|
|
|
From discontinued
operations
|
|
-
|
|
-
|
|
|
0.05
|
|
-
|
|
|
Net income
|
|
0.27
|
|
0.50
|
|
|
1.53
|
|
0.80
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.27
|
$
|
0.27
|
|
$
|
1.47
|
$
|
0.79
|
|
|
From discontinued
operations
|
|
-
|
|
-
|
|
|
0.05
|
|
-
|
|
|
Net income
|
|
0.27
|
|
0.27
|
|
|
1.52
|
|
0.79
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
239.7
|
|
244.2
|
|
|
241.8
|
|
244.6
|
Weighted average
number of diluted shares (in millions)
|
|
240.0
|
|
286.6
|
|
|
242.1
|
|
245.4
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Twelve months
ended
|
(unaudited)
|
December
31
|
|
December
31
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
86.1
|
$
|
143.4
|
|
$
|
488.5
|
$
|
248.8
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to income:
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on
valuation of derivative financial instruments
|
|
(20.1)
|
|
(56.4)
|
|
|
43.7
|
|
(30.9)
|
|
|
|
Deferred income
taxes
|
|
2.5
|
|
(1.7)
|
|
|
28.0
|
|
15.9
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not
be reclassified to income:
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit
plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Re-measurement (loss)
gain
|
|
(3.8)
|
|
153.8
|
|
|
(3.8)
|
|
32.8
|
|
|
|
Deferred income
taxes
|
|
1.0
|
|
(41.1)
|
|
|
1.0
|
|
(8.8)
|
|
|
(20.4)
|
|
54.6
|
|
|
68.9
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
65.7
|
|
198.0
|
|
|
557.4
|
|
257.8
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
0.3
|
|
-
|
|
|
14.6
|
|
-
|
Comprehensive
income
|
$
|
66.0
|
$
|
198.0
|
|
$
|
572.0
|
$
|
257.8
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
48.5
|
$
|
161.7
|
|
$
|
413.6
|
$
|
199.8
|
|
Non-controlling
interests
|
|
17.2
|
|
36.3
|
|
|
143.8
|
|
58.0
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
48.8
|
$
|
161.7
|
|
$
|
425.5
|
$
|
199.8
|
|
Non-controlling
interests
|
|
17.2
|
|
36.3
|
|
|
146.5
|
|
58.0
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
|
SEGMENTED
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Head
|
|
|
|
|
|
|
|
|
Sports
|
|
office
|
|
|
|
|
|
|
|
|
and
|
|
and
Inter-
|
|
|
|
|
Telecommunications
|
|
Media
|
|
Entertainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
841.4
|
$
|
199.5
|
$
|
50.3
|
$
|
(32.0)
|
$
|
1,059.2
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
97.2
|
|
55.2
|
|
9.2
|
|
10.7
|
|
172.3
|
Purchase of goods and
services
|
|
355.4
|
|
121.9
|
|
38.8
|
|
(41.1)
|
|
475.0
|
Adjusted operating
income1
|
|
388.8
|
|
22.4
|
|
2.3
|
|
(1.6)
|
|
411.9
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
194.1
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
77.5
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
8.1
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
9.9
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
122.3
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
132.5
|
$
|
7.5
|
$
|
0.3
|
$
|
0.1
|
$
|
140.4
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
45.3
|
|
0.7
|
|
1.8
|
|
0.5
|
|
48.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Head
|
|
|
|
|
|
|
|
|
Sports
|
|
office
|
|
|
|
|
|
|
|
|
and
|
|
and Inter-
|
|
|
|
|
Telecommunications
|
|
Media
|
|
Entertainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
805.2
|
$
|
222.2
|
$
|
54.1
|
$
|
(31.1)
|
$
|
1,050.4
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
96.0
|
|
63.4
|
|
10.6
|
|
8.6
|
|
178.6
|
Purchase of goods and
services
|
|
344.6
|
|
133.8
|
|
44.8
|
|
(40.7)
|
|
482.5
|
Adjusted operating
income1
|
|
364.6
|
|
25.0
|
|
(1.3)
|
|
1.0
|
|
389.3
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
167.3
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
84.4
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(47.8)
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
13.3
|
Loss on debt
refinancing
|
|
|
|
|
|
|
|
|
|
7.3
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
164.8
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
158.9
|
$
|
9.2
|
$
|
0.7
|
$
|
(2.3)
|
$
|
166.5
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
32.3
|
|
2.4
|
|
0.4
|
|
1.0
|
|
36.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Head
|
|
|
|
|
|
|
|
|
Sports
|
|
office
|
|
|
|
|
|
|
|
|
and
|
|
and
Inter-
|
|
|
|
|
Telecommunications
|
|
Media
|
|
Entertainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,285.1
|
$
|
769.9
|
$
|
181.3
|
$
|
(113.9)
|
$
|
4,122.4
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
388.8
|
|
232.0
|
|
37.6
|
|
53.7
|
|
712.1
|
Purchase of goods and
services
|
|
1,362.3
|
|
468.6
|
|
137.5
|
|
(151.5)
|
|
1,816.9
|
Adjusted operating
income1
|
|
1,534.0
|
|
69.3
|
|
6.2
|
|
(16.1)
|
|
1,593.4
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
712.4
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
309.0
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
199.8
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
17.2
|
Gain on sale of
spectrum licences
|
|
|
|
|
|
|
|
|
|
(330.9)
|
Impairment of
goodwill and other assets
|
|
|
|
|
|
|
|
|
|
43.8
|
Loss on debt
refinancing
|
|
|
|
|
|
|
|
|
|
15.6
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
626.5
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
574.4
|
$
|
29.4
|
$
|
1.3
|
$
|
0.5
|
$
|
605.6
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
132.3
|
|
3.3
|
|
4.3
|
|
2.0
|
|
141.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Head
|
|
|
|
|
|
|
|
|
Sports
|
|
office
|
|
|
|
|
|
|
|
|
and
|
|
and Inter-
|
|
|
|
|
Telecommunications
|
|
Media
|
|
Entertainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,151.8
|
$
|
789.2
|
$
|
185.0
|
$
|
(109.4)
|
$
|
4,016.6
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
379.7
|
|
242.4
|
|
38.3
|
|
54.4
|
|
714.8
|
Purchase of goods and
services
|
|
1,322.7
|
|
492.9
|
|
144.4
|
|
(152.3)
|
|
1,807.7
|
Adjusted operating
income1
|
|
1,449.4
|
|
53.9
|
|
2.3
|
|
(11.5)
|
|
1,494.1
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
653.0
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
328.0
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
70.3
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
28.0
|
Impairment of
goodwill and other assets
|
|
|
|
|
|
|
|
|
|
40.9
|
Loss on debt
refinancing
|
|
|
|
|
|
|
|
|
|
7.3
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
366.6
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
666.8
|
$
|
37.2
|
$
|
3.5
|
$
|
0.3
|
$
|
707.8
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
125.6
|
|
7.5
|
|
3.5
|
|
3.2
|
|
139.8
|
|
|
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
depreciation and amortization, financial expenses, loss (gain) on
valuation and translation of
financial instruments, restructuring of operations, litigation and
other items, gain on sale of spectrum licences, impairment of
goodwill and other assets,
loss on debt refinancing, income taxes and income from discontinued
operations.
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
attributable to shareholders
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
attributable
|
|
|
|
|
|
|
|
|
|
|
other
com-
|
|
to
non-
|
|
|
|
|
Capital
|
|
Contributed
|
|
Retained
|
|
prehensive
|
|
controlling
|
|
Total
|
|
|
stock
|
|
surplus
|
|
earnings
|
|
loss
|
|
interests
|
|
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2015
|
$
|
325.6
|
$
|
2.3
|
$
|
82.2
|
$
|
(111.2)
|
$
|
353.1
|
$
|
652.0
|
Net income
|
|
-
|
|
-
|
|
194.7
|
|
-
|
|
54.1
|
|
248.8
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
5.1
|
|
3.9
|
|
9.0
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(20.8)
|
|
-
|
|
(19.1)
|
|
(39.9)
|
Repurchase of Class B
Shares
|
|
(2.3)
|
|
-
|
|
(20.4)
|
|
-
|
|
-
|
|
(22.7)
|
Balance as of
December 31, 2016
|
|
323.3
|
|
2.3
|
|
235.7
|
|
(106.1)
|
|
392.0
|
|
847.2
|
Net income
|
|
-
|
|
-
|
|
369.7
|
|
-
|
|
133.4
|
|
503.1
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
55.8
|
|
13.1
|
|
68.9
|
Issuance of Class B
shares
|
|
1.1
|
|
1.2
|
|
-
|
|
-
|
|
-
|
|
2.3
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(25.3)
|
|
-
|
|
(18.7)
|
|
(44.0)
|
Repurchase of Class B
Shares
|
|
(10.5)
|
|
-
|
|
(117.0)
|
|
-
|
|
-
|
|
(127.5)
|
Non-controlling
interests acquisition
|
|
-
|
|
-
|
|
(26.6)
|
|
(0.4)
|
|
(16.9)
|
|
(43.9)
|
Balance as of
December 31, 2017
|
$
|
313.9
|
$
|
3.5
|
$
|
436.5
|
$
|
(50.7)
|
$
|
502.9
|
$
|
1,206.1
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Twelve months
ended
|
(unaudited)
|
December
31
|
|
December
31
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
86.1
|
$
|
143.4
|
|
$
|
488.5
|
$
|
248.8
|
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
167.1
|
|
141.5
|
|
|
607.6
|
|
555.1
|
|
|
Amortization of
intangible assets
|
|
27.0
|
|
25.8
|
|
|
104.8
|
|
97.9
|
|
|
Loss (gain) on
valuation and translation of financial instruments
|
|
8.1
|
|
(47.8)
|
|
|
199.8
|
|
70.3
|
|
|
Gain on sale of
spectrum licences
|
|
-
|
|
-
|
|
|
(330.9)
|
|
-
|
|
|
Impairment of
goodwill and other assets
|
|
-
|
|
-
|
|
|
43.8
|
|
40.9
|
|
|
Loss on debt
refinancing
|
|
-
|
|
7.3
|
|
|
15.6
|
|
7.3
|
|
|
Amortization of
financing costs and long-term debt discount
|
|
1.8
|
|
1.9
|
|
|
7.1
|
|
7.1
|
|
|
Deferred income
taxes
|
|
41.9
|
|
(6.3)
|
|
|
129.2
|
|
(40.4)
|
|
|
Other
|
|
1.6
|
|
1.3
|
|
|
4.1
|
|
3.2
|
|
|
333.6
|
|
267.1
|
|
|
1,269.6
|
|
990.2
|
|
Net change in
non-cash balances related to operating activities
|
|
(25.2)
|
|
43.7
|
|
|
(98.5)
|
|
122.8
|
Cash flows provided
by continuing operating activities
|
|
308.4
|
|
310.8
|
|
|
1,171.1
|
|
1,113.0
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests acquisition
|
|
-
|
|
-
|
|
|
(43.9)
|
|
-
|
|
Business
acquisitions
|
|
-
|
|
(0.4)
|
|
|
(5.8)
|
|
(119.5)
|
|
Business
disposals
|
|
-
|
|
-
|
|
|
-
|
|
3.0
|
|
Additions to
property, plant and equipment
|
|
(140.4)
|
|
(166.5)
|
|
|
(605.6)
|
|
(707.8)
|
|
Additions to
intangible assets
|
|
(48.3)
|
|
(36.1)
|
|
|
(141.9)
|
|
(139.8)
|
|
Proceeds from
disposals of assets
|
|
2.7
|
|
1.2
|
|
|
620.7
|
|
4.3
|
|
Other
|
|
(5.9)
|
|
(0.2)
|
|
|
(10.6)
|
|
12.6
|
Cash flows used in
continuing investing activities
|
|
(191.9)
|
|
(202.0)
|
|
|
(187.1)
|
|
(947.2)
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
0.8
|
|
(13.8)
|
|
|
(18.1)
|
|
(15.4)
|
|
Net change under
revolving facilities
|
|
56.9
|
|
(70.1)
|
|
|
(33.7)
|
|
(64.5)
|
|
Issuance of long-term
debt, net of financing fees
|
|
(0.3)
|
|
-
|
|
|
844.0
|
|
-
|
|
Repayment of
long-term debt
|
|
(9.1)
|
|
(7.8)
|
|
|
(695.6)
|
|
(20.0)
|
|
Repayment of
convertible debentures
|
|
-
|
|
-
|
|
|
(95.2)
|
|
-
|
|
Settlement of hedging
contracts
|
|
19.8
|
|
(3.2)
|
|
|
16.6
|
|
0.4
|
|
Issuance of Class B
Shares
|
|
-
|
|
-
|
|
|
1.1
|
|
-
|
|
Repurchase of Class B
Shares
|
|
(60.6)
|
|
(14.1)
|
|
|
(127.5)
|
|
(22.7)
|
|
Dividends
|
|
(6.5)
|
|
(5.5)
|
|
|
(25.3)
|
|
(20.8)
|
|
Dividends or
distributions paid to non-controlling interests
|
|
(4.6)
|
|
(4.8)
|
|
|
(18.7)
|
|
(19.1)
|
Cash flows used in
continuing financing activities
|
|
(3.6)
|
|
(119.3)
|
|
|
(152.4)
|
|
(162.1)
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents from continuing operations
|
|
112.9
|
|
(10.5)
|
|
|
831.6
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided
by discontinued operations
|
|
11.6
|
|
-
|
|
|
11.0
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
740.4
|
|
32.8
|
|
|
22.3
|
|
18.6
|
Cash and cash
equivalents at end of period
|
$
|
864.9
|
$
|
22.3
|
|
$
|
864.9
|
$
|
22.3
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
863.2
|
$
|
21.5
|
|
$
|
863.2
|
$
|
21.5
|
|
Cash
equivalents
|
|
1.7
|
|
0.8
|
|
|
1.7
|
|
0.8
|
|
$
|
864.9
|
$
|
22.3
|
|
$
|
864.9
|
$
|
22.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
$
|
108.9
|
$
|
111.6
|
|
$
|
292.9
|
$
|
308.6
|
|
Cash income tax
payments (net of refunds)
|
|
1.2
|
|
26.4
|
|
|
58.7
|
|
104.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR
INC.
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
(unaudited)
|
|
December
31
|
|
|
December
31
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
864.9
|
|
$
|
22.3
|
|
Accounts
receivable
|
|
543.4
|
|
|
525.4
|
|
Income
taxes
|
|
29.3
|
|
|
6.9
|
|
Inventories
|
|
188.1
|
|
|
183.3
|
|
Prepaid
expenses
|
|
63.9
|
|
|
53.0
|
|
|
1,689.6
|
|
|
790.9
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
3,594.6
|
|
|
3,605.1
|
|
Intangible
assets
|
|
983.1
|
|
|
1,224.0
|
|
Goodwill
|
|
2,695.8
|
|
|
2,725.4
|
|
Derivative financial
instruments
|
|
591.8
|
|
|
809.0
|
|
Deferred income
taxes
|
|
33.2
|
|
|
16.0
|
|
Other
assets
|
|
97.7
|
|
|
91.9
|
|
|
7,996.2
|
|
|
8,471.4
|
Total
assets
|
$
|
9,685.8
|
|
$
|
9,262.3
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
indebtedness
|
$
|
0.8
|
|
$
|
18.9
|
|
Accounts payable and
accrued charges
|
|
738.7
|
|
|
705.9
|
|
Provisions
|
|
25.4
|
|
|
69.3
|
|
Deferred
revenue
|
|
346.8
|
|
|
339.7
|
|
Income
taxes
|
|
13.3
|
|
|
35.2
|
|
Convertible
debentures
|
|
450.0
|
|
|
-
|
|
Embedded derivatives
related to convertible debentures
|
|
442.2
|
|
|
-
|
|
Current portion of
long-term debt
|
|
20.4
|
|
|
51.8
|
|
|
2,037.6
|
|
|
1,220.8
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
5,516.2
|
|
|
5,616.9
|
|
Derivative financial
instruments
|
|
34.1
|
|
|
0.3
|
|
Convertible
debentures
|
|
-
|
|
|
500.0
|
|
Other
liabilities
|
|
215.8
|
|
|
516.2
|
|
Deferred income
taxes
|
|
676.0
|
|
|
560.9
|
|
|
6,442.1
|
|
|
7,194.3
|
Equity
|
|
|
|
|
|
|
Capital
stock
|
|
313.9
|
|
|
323.3
|
|
Contributed
surplus
|
|
3.5
|
|
|
2.3
|
|
Retained
earnings
|
|
436.5
|
|
|
235.7
|
|
Accumulated other
comprehensive loss
|
|
(50.7)
|
|
|
(106.1)
|
|
Equity
attributable to shareholders
|
|
703.2
|
|
|
455.2
|
|
Non-controlling
interests
|
|
502.9
|
|
|
392.0
|
|
|
1,206.1
|
|
|
847.2
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
9,685.8
|
|
$
|
9,262.3
|
SOURCE Quebecor