MONTRÉAL, Nov. 8, 2018
/PRNewswire/ - Quebecor Inc. ("Quebecor" or the "Corporation")
today reported its consolidated financial results for the
third quarter of 2018. Quebecor consolidates the
financial results of Quebecor Media Inc. ("Quebecor Media"), a
wholly owned subsidiary since June 22, 2018.
Third quarter 2018 highlights
- Revenues: $1.06 billion, up
$17.6 million (1.7%) from the third
quarter of 2017.
- Adjusted EBITDA:1 $465.4 million, up $33.4
million (7.7%).
- Net income attributable to shareholders: $186.7 million ($0.80 per basic share) in the third quarter of
2018, compared with $178.4 million
($0.74 per basic share) in the same
period of 2017, a favourable variance of $8.3 million ($0.06
per basic share).
- Adjusted income from continuing operating
activities:2 $142.0
million ($0.61 per basic
share) in the third quarter of 2018, compared with $103.7 million ($0.43 per basic share) in the same period of
2017, an increase of $38.3 million
($0.18 per basic share) or
36.9%.
- The Telecommunications segment grew its revenues by
$30.2 million (3.6%) and its adjusted
EBITDA by $35.6 million (9.1%) in the
third quarter of 2018.
- Videotron Ltd. ("Videotron") significantly increased its
revenues from mobile telephony ($18.8
million or 15.7%), Internet access ($11.3 million or 4.3%) and the Club illico
over‑the‑top video service ("Club illico") ($1.8 million or 17.8%) in the third quarter of
2018.
- Videotron's total average billing per unit3 ("ABPU")
was $49.70 in the third quarter of
2018, compared with $48.50 in the
same period of 2017, a $1.20 (2.5%)
increase. Mobile ABPU was $54.28 in
the third quarter of 2018, compared with $53.34 in the same period of 2017, a $0.94 (1.8%) increase.
- There was a net increase of 56,500 revenue generating
units3 ("RGU") (0.9%) in the third quarter of 2018,
including 41,500 connections to the mobile telephony service
(3.8%), 23,400 subscriptions to the cable Internet access service
(1.4%) and 11,000 memberships in Club illico (2.8%).
- On August 21, 2018, the
Corporation issued a notice of redemption on October 12, 2018, of all its remaining
outstanding 4.125% convertible debentures due October 15, 2018, for a total aggregate principal
amount of $362.5 million. Pursuant to
the terms of the convertible debentures, the Corporation elected to
exercise its share redemption payment right with respect to the
entire outstanding debentures. Consequently, Quebecor issued and
delivered 30,129,869 Class B Shares to the holders on October 12, 2018.
- On October 16, 2018, Quebecor
announced that Manon Brouillette
will step down as President and Chief Executive Officer of
Videotron on December 31, 2018 for
personal reasons. Ms. Brouillette's name will be submitted to the
Corporation's Human Resources Committee and Corporate Governance
Committee in 2019 for appointment to Quebecor's Board of
Directors.
__________________________________
|
1
|
See "Adjusted EBITDA"
under "Definitions."
|
2
|
See "Adjusted income
from continuing operating activities" under
"Definitions."
|
3
|
See "Key performance
indicators" under "Definitions."
|
"Quebecor posted solid financial results again in the third
quarter of 2018, still driven by Videotron's excellent
performance," commented Pierre Karl Péladeau, President and
Chief Executive Officer of Quebecor. "Adjusted income from
continuing operating activities was up $38.3 million
or 36.9%, reflecting the increase in our interest in the
income of Quebecor Media, which became a wholly owned
subsidiary on June 22, 2018, combined with the increase
in Videotron's profitability. We are constantly striving to stay at
the forefront of trends and technological innovations in order to
position ourselves for the future. For example, we recently
launched QUB radio, our first digital radio station. It marks
the beginning of a new era in Québec radio and confirms our status
as a Canadian digital media leader. QUB radio is already a
resounding success, with more than 100,000 downloads in less than
two weeks since it launched. Quebecor also acquired
LC Media Inc, owner of the authoritative car guide, Le
Guide de l'auto, which has made a successful shift to digital
and is drawing 1.5 million unique visitors monthly to its
websites guideautoweb.com and carguideweb.com. The
addition of these two powerhouses to our digital space will support
our convergence strategy."
"Subscriber connections to our mobile telephony and Internet
access services increased by 130,400, or 13.2%,
and 43,400, or 2.6%, respectively, during the 12‑month
period ended September 30, 2018,"
said Manon Brouillette, President
and Chief Executive Officer of Videotron. "These strong results
highlight our ability to stand out in a competitive marketplace,
and to offer products and services tailored to fast‑changing
consumer habits. For example, in the third quarter of 2018 we
launched Fizz, a new mobile carrier and Internet service
provider that delivers a fully digital experience, promotes
simplicity and user autonomy, and offers its members advantageous
plans. This innovative offering aims to increase our market
penetration among digital natives and new mobile users. It is also
noteworthy that our mobile telephony service will pass our cable
telephony service in total number of subscriber connections in the
fourth quarter of 2018, demonstrating the success of our
strategy and our ability to reinvent ourselves. We are also
continuing to invest in the roll‑out of our Helix platform, based
on our partner Comcast Corporation's XFINITY X1 platform.
Helix will offer innovative, integrated technology that is in sync
with consumers and their connected lives. It will feature voice
control and will support, among other things, smarter Wi‑Fi,
an advanced IP‑based television experience, and an entirely new
line of home automation products and services.
"Videotron's success and market stature are holding strong.
Among other things, since 2016 we have been a partner in the
Open‑Air Laboratory for Smart Living in the heart of Montréal's
Quartier de l'innovation, which is home to a series of innovative
projects and has now been recognized by the Québec government as a
Centre of Excellence for Next‑Generation Evolved Network and
Internet of Things. In a sign that our efforts to address the needs
of younger customers are paying off, Videotron was ranked the
coolest telecom by Quebecers aged 13 to 34 in the
first Léger youth poll.
"Club illico, a Québec leader in subscription video on demand,
recently celebrated its fifth birthday and used the occasion to
announce the arrival of 9 original series and some
20 exclusive acquisitions in the coming months.
Club illico has been a resounding success, with more than
350 million views since launch. Its revenues were
up 17.8% in the third quarter of 2018," Ms. Brouillette
noted.
"TVA Group Inc.'s ("TVA Group") adjusted EBITDA decreased in the
third quarter of 2018, mainly because of lower advertising revenues
and soundstage and equipment rental revenues," said France
Lauzière, President and Chief Executive Officer of TVA Group.
"Our moves to cut operating costs in recent quarters did not
entirely make up for the decline in revenues. At the same time,
TVA Group's market share increased by 1.0 point compared
with the same period of 2017, largely because of the strong
performance of the specialty channels, particularly LCN, which
gained a significant 0.7 points. Our Québec election night coverage
on TVA and LCN was watched by up to
2.1 million people, an all‑time record."
"The customer remains the cornerstone of all our business
strategies and initiatives. We make every effort to deliver the
best products and services in order to exceed customer
expectations, position ourselves for sustainable growth and
generate returns for our shareholders," Pierre Karl Péladeau
added.
"Last but not least, I thank Manon
Brouillette for her major role in Videotron's success over
the past 14 years and her contribution to Quebecor's business
plan. Manon is a builder with a keen strategic vision and she has
also assembled an exceptional team. I'm very pleased by the
prospect that Quebecor will continue to have the benefit of her
vast expertise as a director of the Corporation," Pierre Karl
Péladeau concluded.
Table
1
|
Quebecor third
quarter financial highlights, 2014 to 2018
|
(in millions of
Canadian dollars, except per share data)
|
|
2018
|
2017
|
2016
|
2015
|
2014
|
|
|
|
|
|
|
Revenues
|
$
1,058.2
|
$
1,040.6
|
$
1,017.7
|
$
981.1
|
$
897.9
|
Adjusted
EBITDA
|
465.4
|
432.0
|
415.1
|
404.4
|
373.9
|
Income from
continuing operating activities
attributable to shareholders
|
186.7
|
173.6
|
6.8
|
94.3
|
16.4
|
Net income
attributable to Shareholders
|
186.7
|
178.4
|
6.8
|
92.4
|
51.7
|
Adjusted income from
continuing operating
activities
|
142.0
|
103.7
|
98.3
|
81.3
|
64.7
|
Per basic
share:
|
|
|
|
|
|
Income from continuing
operating activities attributable
to shareholders
|
0.80
|
0.72
|
0.03
|
0.38
|
0.07
|
Net income
attributable to Shareholders
|
0.80
|
0.74
|
0.03
|
0.38
|
0.21
|
Adjusted income from
continuingoperating
activities
|
0.61
|
0.43
|
0.40
|
0.33
|
0.26
|
Changes in Accounting Policies
On January 1, 2018, the
Corporation adopted on a fully retroactive basis the new rules
under IFRS 15, Revenue from Contracts with Customers,
which specify how and when an entity should recognize revenue. The
adoption of IFRS 15 had significant impacts on the
consolidated financial statements, mainly in the Telecommunications
segment, with regard to the timing of the recognition of its
revenues, the classification of its revenues, as well as the
capitalization of costs. Among other impacts, the adoption of
IFRS 15 resulted in an increase in the revenue from the device
sale and in a decrease in the mobile service revenue recognized
over the contract term. As well, costs to obtain a contract and
connection costs are now fully amortized as operating expenses over
the contract term or over the period of time the customer is
expected to maintain its service. A description of the new rules
and details of the retroactive adjustments to comparative data are
provided in note 2 to Quebecor's condensed consolidated financial
statements for the third quarter of 2018 and under "Changes in
Accounting Policies" in Quebecor's Management Discussion and
Analysis for the same period. As well, to clarify the impact of
IFRS 15 on non‑IFRS measures, columns presenting the non-IFRS
measures without application of IFRS 15 have been added to the
tables showing the calculation and reconciliation of non‑IFRS
measures, as presented under "Definitions" below.
Tables 2 and 3 below present segmented revenues and adjusted
EBITDA for the last eight quarters, restated to reflect the
retroactive application of IFRS 15.
Table
2
|
Quebecor's
segmented revenues for the past eight quarters
|
(in millions of
Canadian dollars)
|
|
Q3‑2018
|
Q2‑2018
|
Q1‑2018
|
Q4‑2017
|
Q3‑2017
|
Q2‑2017
|
Q1‑2017
|
Q4‑2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
859.8
|
$
|
847.2
|
$
|
823.4
|
$
|
846.3
|
$
|
829.6
|
$
|
826.6
|
$
|
805.0
|
$
|
822.4
|
Media
|
|
170.9
|
|
186.5
|
|
173.2
|
|
199.5
|
|
186.8
|
|
199.5
|
|
184.1
|
|
222.2
|
Sports and
Entertainment
|
|
54.5
|
|
36.9
|
|
37.2
|
|
50.3
|
|
56.7
|
|
36.0
|
|
38.3
|
|
54.1
|
Head Office
and Intersegment
|
|
(27.0)
|
|
(27.1)
|
|
(27.1)
|
|
(32.0)
|
|
(32.5)
|
|
(23.5)
|
|
(25.9)
|
|
(31.1)
|
Total
|
$
|
1,058.2
|
$
|
1,043.5
|
$
|
1,006.7
|
$
|
1,064.1
|
$
|
1,040.6
|
$
|
1,038.6
|
$
|
1,001.5
|
$
|
1,067.6
|
Table
3
|
Quebecor's
segmented adjusted EBITDA (negative adjusted EBITDA) for the past
eight quarters
|
(in millions of
Canadian dollars)
|
|
Q3‑2018
|
Q2‑2018
|
Q1‑2018
|
Q4‑2017
|
Q3‑2017
|
Q2‑2017
|
Q1‑2017
|
Q4‑2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
425.8
|
$
|
422.6
|
$
|
410.5
|
$
|
396.9
|
$
|
390.2
|
$
|
397.8
|
$
|
383.9
|
$
|
385.9
|
Media
|
|
29.6
|
|
(0.7)
|
|
(1.1)
|
|
22.4
|
|
35.7
|
|
13.4
|
|
(2.2)
|
|
25.0
|
Sports and
Entertainment
|
|
7.2
|
|
(2.0)
|
|
(2.1)
|
|
2.3
|
|
8.3
|
|
(3.6)
|
|
(0.8)
|
|
(1.3)
|
Head
Office
|
|
2.8
|
|
(2.8)
|
|
0.1
|
|
(1.6)
|
|
(2.2)
|
|
(3.3)
|
|
(9.0)
|
|
1.0
|
Total
|
$
|
465.4
|
$
|
417.1
|
$
|
407.4
|
$
|
420.0
|
$
|
432.0
|
$
|
404.3
|
$
|
371.9
|
$
|
410.6
|
Changes to key performance indicators
Following adoption of IFRS 15, and to reflect changes in
its activities and services, including the growth of its mobile
telephony business, the Corporation reviewed the nature and
definition of its key performance indicators. Accordingly, average
monthly revenue per user ("ARPU") has been abandoned and replaced
by the new ABPU metric. ABPU will be used henceforth to measure the
performance of mobile activities and the performance of all
activities combined. The definition of the new ABPU metric is
provided under "Key Performance Indicators" below. The
definition of an RGU has also been added in the same section; the
nature and calculation of the metric are unchanged.
Table 4 presents the new ABPU metric for mobile activities and
all activities combined for the last eight quarters.
Table
4
|
Videotron's ABPU
for the past eight quarters
|
(in Canadian
dollars)
|
|
Q3‑2018
|
Q2‑2018
|
Q1‑2018
|
Q4‑2017
|
Q3‑2017
|
Q2‑2017
|
Q1‑2017
|
Q4‑2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile
ABPU
|
$
|
54.28
|
$
|
53.70
|
$
|
53.25
|
$
|
53.56
|
$
|
53.34
|
$
|
53.32
|
$
|
52.64
|
$
|
51.96
|
Total ABPU
|
$
|
49.70
|
$
|
49.68
|
$
|
48.82
|
$
|
48.90
|
$
|
48.50
|
$
|
48.12
|
$
|
47.41
|
$
|
47.49
|
2018/2017 third quarter comparison
Revenues: $1.06 billion, an $17.6 million (1.7%) increase.
- Revenues increased in Telecommunications ($30.2 million or 3.6% of segment revenues).
- Revenues decreased in Media ($15.9
million or ‑8.5%) and in Sports and Entertainment
($2.2 million or ‑3.9%).
Adjusted EBITDA: $465.4 million, a $33.4 million (7.7%) increase.
- Adjusted EBITDA increased in Telecommunications ($35.6 million or 9.1% of segment adjusted EBITDA)
and there was a favourable variance at Head Office ($5.0 million) due to lower compensation costs,
including the stock‑based compensation charge.
- There was an unfavourable variance in Media ($6.1 million or ‑17.1%) and in Sports and
Entertainment ($1.1 million or
-13.3%).
- The change in the fair value of Quebecor Media stock options
resulted in a $1.0 million favourable
variance in the stock‑based compensation charge in the third
quarter of 2018 compared with the same period of 2017. The change
in the fair value of Quebecor stock options and in the value of
Quebecor stock‑price‑based share units resulted in a $3.0 million favourable variance in the
Corporation's stock‑based compensation charge in the third quarter
of 2018.
Net income attributable to shareholders: $186.7 million ($0.80 per basic share) in the third quarter
of 2018, compared with $178.4 million ($0.74 per basic share) in the same period of
2017, a favourable variance of $8.3 million ($0.06 per basic share).
- The main favourable variances were:
-
- $134.7 million favourable
variance in gains and losses on valuation and translation of
financial instruments, including $134.5
million without any tax consequences;
- $50.6 million favourable variance
in non‑controlling interest;
- $43.5 million favourable variance
related to impairment of goodwill and other assets;
- $33.4 million increase in
adjusted EBITDA;
- $17.8 million decrease in the
income tax expense.
- The main unfavourable variances were:
-
- $243.1 million gain on the sale
of a spectrum licence recognized in the third quarter of 2017,
including $121.6 million without any
tax consequences;
- $9.2 million increase in
financial expenses;
- $6.9 million unfavourable
variance in the charge for restructuring of operations, litigation
and other items;
- $6.6 million increase in the
depreciation and amortization charge;
- $5.9 million unfavourable
variance in income from discontinued operations.
Adjusted income from continuing operating activities:
$142.0 million ($0.61 per basic share) in the third quarter
of 2018, compared with $103.7 million ($0.43 per basic share) in the same period of
2017, an increase of $38.3 million ($0.18 per basic share) or 36.9%.
2018/2017 year‑to‑date comparison
Revenues: $3.11 billion, a $27.7 million (0.9%) increase.
- Revenues increased in Telecommunications ($69.2 million or 2.8% of segment revenues).
- Revenues decreased in Media ($39.8
million or ‑7.0%) and in Sports and Entertainment
($2.4 million or ‑1.8%).
Adjusted EBITDA: $1.29 billion, an $81.7 million (6.8%) increase.
- Adjusted EBITDA increased in Telecommunications ($87.0 million or 7.4% of segment adjusted
EBITDA). There was a favourable variance at Head Office
($14.6 million), mainly due to lower
compensation costs.
- There was an unfavourable variance in Media ($19.1 million or ‑40.7%) and in Sports and
Entertainment ($0.8 million or
‑20.5%).
- The change in the fair value of Quebecor Media stock options
resulted in a $2.0 million favourable
variance in the stock‑based compensation charge in the first nine
months of 2018 compared with the same period of 2017. The change in
the fair value of Quebecor stock options and the value of Quebecor
stock‑price‑based share units resulted in a $4.1 million favourable variance in the
Corporation's stock‑based compensation charge in the first nine
months of 2018.
Net income attributable to shareholders: $284.7 million ($1.22 per basic share) in the first nine months
of 2018, compared with $320.1 million ($1.32 per basic share) in the same period of
2017, a decrease of $35.4 million ($0.10 per basic share).
- The main unfavourable variances were:
-
- $330.9 million gain on the sale
of spectrum licences recognized in the first nine months of 2017,
including $165.5 million without any
tax consequences;
- $23.6 million increase in the
depreciation and amortization charge;
- $14.8 million unfavourable
variance in the charge for restructuring of operations, litigation
and other items;
- $14.3 million unfavourable
variance in income from discontinued operations;
- $7.9 million increase in
financial expenses;
- $7.5 million increase in the
income tax expense.
- The main favourable variances were:
-
- $141.0 million favourable
variance in gains on valuation and translation of financial
instruments, including $140.6 million
without any tax consequences;
- $81.7 million increase in
adjusted EBITDA;
- $81.5 million favourable variance
in non‑controlling interest;
- $43.8 million favourable variance
in impairment of goodwill and other assets;
- $15.6 million favourable variance
in the loss on debt refinancing.
Adjusted income from continuing operating activities:
$337.8 million ($1.44 per basic share) in the first nine months
of 2018, compared with $267.2 million ($1.10 per basic share) in the same period of
2017, an increase of $70.6 million ($0.34 per basic share) or 26.4%.
Financial transactions
- On August 21, 2018, the
Corporation issued a notice of redemption on October 12, 2018, of all its remaining
outstanding 4.125% convertible debentures due October 15, 2018, for a total aggregate principal
amount of $362.5 million. Pursuant to
the terms of the convertible debentures, the Corporation elected to
exercise its share redemption payment right with respect to the
entire outstanding debentures. Consequently, Quebecor issued and
delivered 30,129,869 Class B Shares to the holders on October 12, 2018.
Normal course issuer bid
On November 15, 2017, the
Corporation carried out a two‑for‑one split of its outstanding
Class A Multiple Voting Shares ("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 August 8, 2018, 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
7,800,000 Class B Shares, representing approximately 5.0%
of issued and outstanding Class B Shares as of
August 1, 2018. The purchases can be made from
August 15, 2018 to August 14,
2019 at prevailing market prices on the open market through
the facilities of the Toronto Stock Exchange ("TSX") or other
alternative trading systems. All the repurchased shares will be
cancelled.
On August 9, 2018, the Corporation
announced that it had entered into an automatic securities purchase
plan ("the plan"), as of August 10, 2018, 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 are
made at the discretion of the designated broker, within parameters
established by the Corporation prior to the blackout periods.
Outside the blackout periods, purchases are made at the discretion
of the Corporation's management. The plan received prior approval
from the TSX. It came into effect on August 15, 2018 and
terminates on the same date as the normal course issuer bid.
In the first nine months of 2018, the Corporation purchased and
cancelled 7,535,300 Class B Shares for a total cash
consideration of $186.3 million
(3,083,000 Class B Shares for a total cash consideration
of $66.9 million in the first
nine months of 2017). The $171.9 million excess of
the purchase price over the carrying value of the repurchased
Class B Shares was recorded as a reduction in retained
earnings ($61.1 million in the
first nine months of 2017).
During the first nine months of 2018, 100,000 Class B
Shares were issued upon exercise of stock options for a cash
consideration of $1.3 million. Following this
transaction, the contributed surplus was increased by $1.2 million and the stock option plan
liability was reduced by the same amount.
Dividend
On November 7, 2018, the Board of
Directors of Quebecor declared a quarterly dividend of $0.055 per share on Class A Shares and
Class B Shares payable on December 18, 2018 to
shareholders of record as of the record date of
November 23, 2018. This dividend is designated 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 third quarter 2018
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 third
quarter 2018 results on November 8,
2018, at 11:00 a.m. EST. 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 November 8, 2018 to
February 9, 2019 by dialling 1 877 293‑8133,
conference number 1238573, 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 November 8, 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 and
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
On a transitional basis and to clarify the impact of the
retroactive adoption of IFRS 15, as described under "Changes
in Accounting Policies," columns have been added to the calculation
and reconciliation tables for financial measures not defined in
accordance with International Financial Reporting Standards
("IFRS"). Accordingly, those tables also show the calculation and
reconciliation of non‑IFRS measures in 2018 and 2017
based on the former accounting policies with respect to revenue
recognition, i.e. without the adjustments required by adoption
of IFRS 15.
Adjusted EBITDA (formerly "Adjusted operating
income")
In its analysis of operating results, the Corporation defines
adjusted EBITDA, as reconciled to net income under IFRS, as
net income before depreciation and amortization, financial
expenses, gains and losses 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 tax,
and income from discontinued operations. Adjusted EBITDA 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 EBITDA 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 EBITDA 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 EBITDA
may not be the same as similarly titled measures reported by other
companies.
Table 5 below provides a reconciliation of adjusted EBITDA to
net income as disclosed in Quebecor's condensed consolidated
financial statements.
Table
5
|
Reconciliation of
the adjusted EBITDA measure used in this press release to the net
income measure used in the condensed consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
With adoption of
IFRS 151
|
Without
IFRS 152
|
|
Three months
ended September 30
|
Nine months ended
September 30
|
Three months
ended September 30
|
Nine months ended
September 30
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Adjusted EBITDA
(negative adjusted
EBITDA):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
425.8
|
$
|
390.2
|
$
|
1,258.9
|
$
|
1,171.9
|
$
|
415.1
|
$
|
379.3
|
$
|
1,252.8
|
$
|
1,145.2
|
|
Media
|
|
29.6
|
|
35.7
|
|
27.8
|
|
46.9
|
|
29.6
|
|
35.7
|
|
27.8
|
|
46.9
|
|
Sports and
Entertainment
|
|
7.2
|
|
8.3
|
|
3.1
|
|
3.9
|
|
7.2
|
|
8.3
|
|
3.1
|
|
3.9
|
|
Head
Office
|
|
2.8
|
|
(2.2)
|
|
0.1
|
|
(14.5)
|
|
2.8
|
|
(2.2)
|
|
0.1
|
|
(14.5)
|
|
|
465.4
|
|
432.0
|
|
1,289.9
|
|
1,208.2
|
|
454.7
|
|
421.1
|
|
1,283.8
|
|
1,181.5
|
Depreciation and
amortization
|
|
(181.8)
|
|
(175.2)
|
|
(541.9)
|
|
(518.3)
|
|
(181.8)
|
|
(175.2)
|
|
(541.9)
|
|
(518.3)
|
Financial
expenses
|
|
(84.7)
|
|
(75.5)
|
|
(239.4)
|
|
(231.5)
|
|
(84.7)
|
|
(75.5)
|
|
(239.4)
|
|
(231.5)
|
Gain (loss) on
valuation and translation of
financial instruments
|
|
54.5
|
|
(80.2)
|
|
(50.7)
|
|
(191.7)
|
|
54.5
|
|
(80.2)
|
|
(50.7)
|
|
(191.7)
|
Restructuring of
operations, litigation and
other items
|
|
(13.6)
|
|
(6.7)
|
|
(22.1)
|
|
(7.3)
|
|
(13.6)
|
|
(6.7)
|
|
(22.1)
|
|
(7.3)
|
Gain on sale of
spectrum licences
|
|
̶
|
|
243.1
|
|
̶
|
|
330.9
|
|
̶
|
|
243.1
|
|
̶
|
|
330.9
|
Impairment of
goodwill and other
assets
|
|
̶
|
|
(43.5)
|
|
̶
|
|
(43.8)
|
|
̶
|
|
(43.5)
|
|
̶
|
|
(43.8)
|
Loss on debt
refinancing
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
Income
taxes
|
|
(48.8)
|
|
(66.6)
|
|
(116.4)
|
|
(108.9)
|
|
(48.8)
|
|
(66.6)
|
|
(116.4)
|
|
(108.9)
|
Income from
discontinued operations
|
|
̶
|
|
5.9
|
|
̶
|
|
14.3
|
|
̶
|
|
5.9
|
|
̶
|
|
14.3
|
Impact of
IFRS 15
|
|
̶
|
|
̶
|
|
̶
|
|
̶
|
|
10.7
|
|
10.9
|
|
6.1
|
|
26.7
|
Net
income
|
$
|
191.0
|
$
|
233.3
|
$
|
319.4
|
$
|
436.3
|
$
|
191.0
|
$
|
233.3
|
$
|
319.4
|
$
|
436.3
|
1
|
Non‑IFRS measures
presented in these columns are calculated based on the new
IFRS 15 rules adopted by the Corporation on a retroactive
basis and described under "Changes in Accounting
Policies."
|
2
|
Non‑IFRS measures
presented in these columns are calculated based on the
Corporation's former accounting policies with respect to revenue
recognition, i.e. without the impact of IFRS 15
adoption.
|
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 gains and losses 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 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 6 provides a reconciliation of adjusted income from
continuing operating activities to the net income attributable to
shareholders' measure used in Quebecor's condensed consolidated
financial statements.
Table
6
|
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 condensed consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
With adoption of
IFRS 151
|
Without
IFRS 152
|
|
Three months
ended
September 30
|
Nine months ended
September 30
|
Three months
ended September 30
|
Nine months ended
September 30
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income from
continuing operating
activities
|
$
|
142.0
|
$
|
103.7
|
$
|
337.8
|
$
|
267.2
|
$
|
134.2
|
$
|
97.2
|
$
|
332.5
|
$
|
251.2
|
Gain (loss) on
valuation and translation of
financial instruments
|
|
54.5
|
|
(80.2)
|
|
(50.7)
|
|
(191.7)
|
|
54.5
|
|
(80.2)
|
|
(50.7)
|
|
(191.7)
|
Restructuring of
operations, litigation and other
items
|
|
(13.6)
|
|
(6.7)
|
|
(22.1)
|
|
(7.3)
|
|
(13.6)
|
|
(6.7)
|
|
(22.1)
|
|
(7.3)
|
Gain on sale of
spectrum licences
|
|
̶
|
|
243.1
|
|
̶
|
|
330.9
|
|
̶
|
|
243.1
|
|
̶
|
|
330.9
|
Impairment of
goodwill and other
assets
|
|
̶
|
|
(43.5)
|
|
̶
|
|
(43.8)
|
|
̶
|
|
(43.5)
|
|
̶
|
|
(43.8)
|
Loss on debt
refinancing
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
Income taxes related
to adjustments3
|
|
3.4
|
|
(19.3)
|
|
17.9
|
|
13.1
|
|
3.4
|
|
(19.3)
|
|
17.9
|
|
13.1
|
Net income
attributable to non‑controlling
interest related to adjustments
|
|
0.4
|
|
(23.5)
|
|
1.8
|
|
(44.3)
|
|
0.4
|
|
(23.5)
|
|
1.8
|
|
(44.3)
|
Discontinued
operations
|
|
̶
|
|
4.8
|
|
̶
|
|
11.6
|
|
̶
|
|
4.8
|
|
̶
|
|
11.6
|
Impact of
IFRS 15
|
|
̶
|
|
̶
|
|
̶
|
|
̶
|
|
7.8
|
|
6.5
|
|
5.3
|
|
16.0
|
Net income
attributable to shareholders
|
$
|
186.7
|
$
|
178.4
|
$
|
284.7
|
$
|
320.1
|
$
|
186.7
|
$
|
178.4
|
$
|
284.7
|
$
|
320.1
|
1
|
Non‑IFRS measures
presented in these columns are calculated based on the new
IFRS 15 rules adopted by the Corporation on a retroactive
basis and described under "Changes in Accounting
Policies."
|
2
|
Non‑IFRS measures
presented in these columns are calculated based on the
Corporation's former accounting policies with respect to revenue
recognition, i.e. without the impact of IFRS 15
adoption.
|
3
|
Includes impact of
fluctuations in income tax applicable to adjusted items, either for
statutory reasons or in connection with tax
transactions.
|
KEY PERFORMANCE INDICATORS
Revenue‑generating unit
The Corporation uses RGU, an industry metric, as a key
performance indicator. An RGU represents, as the case may be,
subscriptions to the cable Internet, cable television and Club
illico services, and subscriber connections to the mobile telephony
and cable telephony services. RGU is not a measurement that is
consistent with IFRS and the Corporation's definition and
calculation of RGU may not be the same as identically titled
measurements reported by other companies.
Average billing per unit
The Corporation uses ABPU, an industry metric, as a key
performance indicator. This indicator is used to measure monthly
average subscription billing per RGU. ABPU is not a measurement
that is consistent with IFRS and the Corporation's definition and
calculation of ABPU may not be the same as identically titled
measurements reported by other companies.
Mobile ABPU is calculated by dividing the average subscription
billing for mobile telephony services by the average number of
mobile RGUs during the applicable period, and then dividing the
resulting amount by the number of months in the applicable
period.
Total ABPU is calculated by dividing the combined average
subscription billing for cable Internet, cable television,
Club illico, mobile telephony and cable telephony services by
the total average number of RGUs from cable Internet, cable
television, mobile telephony and cable telephony services during
the applicable period, and then dividing the resulting amount by
the number of months in the applicable period.
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in millions of
Canadian dollars, except for earnings per share
data)
|
Three months
ended
|
|
Nine months
ended
|
(unaudited)
|
September
30
|
|
September
30
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,058.2
|
$
|
1,040.6
|
|
$
|
3,108.4
|
$
|
3,080.7
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
163.7
|
|
170.7
|
|
|
526.1
|
|
539.8
|
Purchase of goods and
services
|
|
429.1
|
|
437.9
|
|
|
1,292.4
|
|
1,332.7
|
Depreciation and
amortization
|
|
181.8
|
|
175.2
|
|
|
541.9
|
|
518.3
|
Financial
expenses
|
|
84.7
|
|
75.5
|
|
|
239.4
|
|
231.5
|
(Gain) loss on
valuation and translation of financial instruments
|
|
(54.5)
|
|
80.2
|
|
|
50.7
|
|
191.7
|
Restructuring of
operations, litigation and other items
|
|
13.6
|
|
6.7
|
|
|
22.1
|
|
7.3
|
Gain on sale of
spectrum licences
|
|
-
|
|
(243.1)
|
|
|
-
|
|
(330.9)
|
Impairment of
goodwill and other assets
|
|
-
|
|
43.5
|
|
|
-
|
|
43.8
|
Loss on debt
refinancing
|
|
-
|
|
-
|
|
|
-
|
|
15.6
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
239.8
|
|
294.0
|
|
|
435.8
|
|
530.9
|
|
|
|
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
Current
|
|
50.5
|
|
2.4
|
|
|
153.2
|
|
14.5
|
Deferred
|
|
(1.7)
|
|
64.2
|
|
|
(36.8)
|
|
94.4
|
|
|
48.8
|
|
66.6
|
|
|
116.4
|
|
108.9
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
191.0
|
|
227.4
|
|
|
319.4
|
|
422.0
|
Income from
discontinued operations
|
|
-
|
|
5.9
|
|
|
-
|
|
14.3
|
Net
income
|
$
|
191.0
|
$
|
233.3
|
|
$
|
319.4
|
$
|
436.3
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
186.7
|
$
|
173.6
|
|
$
|
284.7
|
$
|
308.5
|
Non-controlling
interests
|
|
4.3
|
|
53.8
|
|
|
34.7
|
|
113.5
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
186.7
|
$
|
178.4
|
|
$
|
284.7
|
$
|
320.1
|
Non-controlling
interests
|
|
4.3
|
|
54.9
|
|
|
34.7
|
|
116.2
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
From
continuing operations
|
$
|
0.80
|
$
|
0.72
|
|
$
|
1.22
|
$
|
1.27
|
From
discontinued operations
|
|
-
|
|
0.02
|
|
|
-
|
|
0.05
|
Net
income
|
|
0.80
|
|
0.74
|
|
|
1.22
|
|
1.32
|
Diluted:
|
|
|
|
|
|
|
|
|
|
From
continuing operations
|
$
|
0.50
|
$
|
0.72
|
|
$
|
1.18
|
$
|
1.27
|
From
discontinued operations
|
|
-
|
|
0.02
|
|
|
-
|
|
0.05
|
Net
income
|
|
0.50
|
|
0.74
|
|
|
1.18
|
|
1.32
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
232.8
|
|
241.4
|
|
|
234.1
|
|
242.5
|
Weighted average
number of diluted shares (in millions)
|
|
268.8
|
|
241.8
|
|
|
240.0
|
|
242.8
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Nine months
ended
|
(unaudited)
|
September
30
|
|
September
30
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
191.0
|
$
|
227.4
|
|
$
|
319.4
|
$
|
422.0
|
|
|
|
|
|
|
|
|
|
|
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
|
|
(0.4)
|
|
35.8
|
|
|
(44.8)
|
|
63.8
|
Deferred income
taxes
|
|
3.0
|
|
0.5
|
|
|
5.1
|
|
25.5
|
|
|
2.6
|
|
36.3
|
|
|
(39.7)
|
|
89.3
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
193.6
|
|
263.7
|
|
|
279.7
|
|
511.3
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
-
|
|
5.9
|
|
|
-
|
|
14.3
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
193.6
|
$
|
269.6
|
|
$
|
279.7
|
$
|
525.6
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
189.3
|
$
|
203.1
|
|
$
|
252.6
|
$
|
381.1
|
Non-controlling
interests
|
|
4.3
|
|
60.6
|
|
|
27.1
|
|
130.2
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
189.3
|
$
|
207.9
|
|
$
|
252.6
|
$
|
392.7
|
Non-controlling
interests
|
|
4.3
|
|
61.7
|
|
|
27.1
|
|
132.9
|
QUEBECOR
INC.
|
SEGMENTED
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
and
|
office
|
|
|
Telecommuni-
|
|
Enter-
|
and
Inter-
|
|
|
cations
|
Media
|
tainment
|
segments
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
859.8
|
$
|
170.9
|
$
|
54.5
|
$
|
(27.0)
|
$
|
1,058.2
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
91.9
|
|
54.7
|
|
10.1
|
|
7.0
|
|
163.7
|
Purchase of goods and
services
|
|
342.1
|
|
86.6
|
|
37.2
|
|
(36.8)
|
|
429.1
|
Adjusted
EBITDA1
|
|
425.8
|
|
29.6
|
|
7.2
|
|
2.8
|
|
465.4
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
181.8
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
84.7
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(54.5)
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
13.6
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
239.8
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
129.8
|
$
|
8.2
|
$
|
0.2
|
$
|
0.7
|
$
|
138.9
|
Additions to
intangible assets
|
|
29.1
|
|
1.1
|
|
0.9
|
|
0.7
|
|
31.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2017
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
and
|
office
|
|
|
Telecommuni-
|
|
Enter-
|
and Inter-
|
|
|
cations
|
Media
|
tainment
|
segments
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
829.6
|
$
|
186.8
|
$
|
56.7
|
$
|
(32.5)
|
$
|
1,040.6
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
92.7
|
|
56.0
|
|
9.7
|
|
12.3
|
|
170.7
|
Purchase of goods and
services
|
|
346.7
|
|
95.1
|
|
38.7
|
|
(42.6)
|
|
437.9
|
Adjusted
EBITDA1
|
|
390.2
|
|
35.7
|
|
8.3
|
|
(2.2)
|
|
432.0
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
175.2
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
75.5
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
80.2
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
6.7
|
Gain on sale of
spectrum licences
|
|
|
|
|
|
|
|
|
|
(243.1)
|
Impairment of
goodwill and other assets
|
|
|
|
|
|
|
|
|
|
43.5
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
294.0
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
132.9
|
$
|
9.3
|
$
|
0.3
|
$
|
-
|
$
|
142.5
|
Additions to
intangible assets
|
|
28.6
|
|
0.5
|
|
0.9
|
|
0.5
|
|
30.5
|
|
|
|
|
|
Nine months ended
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
|
and
|
office
|
|
|
Telecommuni-
|
|
Enter-
|
and
Inter-
|
|
|
cations
|
Media
|
tainment
|
segments
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,530.4
|
$
|
530.6
|
$
|
128.6
|
$
|
(81.2)
|
$
|
3,108.4
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
291.7
|
|
176.9
|
|
29.5
|
|
28.0
|
|
526.1
|
Purchase of goods and
services
|
|
979.8
|
|
325.9
|
|
96.0
|
|
(109.3)
|
|
1,292.4
|
Adjusted
EBITDA1
|
|
1,258.9
|
|
27.8
|
|
3.1
|
|
0.1
|
|
1,289.9
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
541.9
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
239.4
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
50.7
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
22.1
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
435.8
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
392.3
|
$
|
18.8
|
$
|
0.7
|
$
|
6.1
|
$
|
417.9
|
Additions to
intangible assets
|
|
120.7
|
|
3.6
|
|
2.7
|
|
0.3
|
|
127.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2017
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
and
|
office
|
|
|
Telecommuni-
|
|
Enter-
|
and Inter-
|
|
|
|
cations
|
Media
|
tainment
|
segments
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,461.2
|
$
|
570.4
|
$
|
131.0
|
$
|
(81.9)
|
$
|
3,080.7
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
291.6
|
|
176.8
|
|
28.4
|
|
43.0
|
|
539.8
|
Purchase of goods and
services
|
|
997.7
|
|
346.7
|
|
98.7
|
|
(110.4)
|
|
1,332.7
|
Adjusted
EBITDA1
|
|
1,171.9
|
|
46.9
|
|
3.9
|
|
(14.5)
|
|
1,208.2
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
518.3
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
231.5
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
191.7
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
7.3
|
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
|
|
|
|
|
|
|
|
|
$
|
530.9
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
441.9
|
$
|
22.0
|
$
|
0.9
|
$
|
0.4
|
$
|
465.2
|
Additions to
intangible assets
|
|
87.0
|
|
2.6
|
|
2.5
|
|
1.5
|
|
93.6
|
1
|
The Chief Executive
Officer uses adjusted EBITDA as the measure of profit to assess the
performance of each segment. Adjusted EBITDA is referred as
a non-IFRS measure and is defined
as net income before depreciation and amortization, financial
expenses, (gain) loss 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
|
|
|
|
|
|
|
|
|
Retained
|
|
other
com-
|
|
to
non-
|
|
|
|
|
Capital
|
|
Contributed
|
|
earnings
|
|
prehensive
|
|
controlling
|
|
Total
|
|
|
stock
|
|
surplus
|
|
(deficit)
|
|
loss
|
|
interests
|
|
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2016,
|
|
|
|
|
|
|
|
|
|
|
|
|
as previously
reported
|
$
|
323.3
|
$
|
2.3
|
$
|
235.7
|
$
|
(106.1)
|
$
|
392.0
|
$
|
847.2
|
Changes in accounting
policies
|
|
-
|
|
-
|
|
143.7
|
|
-
|
|
33.6
|
|
177.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2016, as restated
|
|
323.3
|
|
2.3
|
|
379.4
|
|
(106.1)
|
|
425.6
|
|
1,024.5
|
Net income
|
|
-
|
|
-
|
|
320.1
|
|
-
|
|
116.2
|
|
436.3
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
72.6
|
|
16.7
|
|
89.3
|
Issuance of Class B
Shares
|
|
1.1
|
|
1.2
|
|
-
|
|
-
|
|
-
|
|
2.3
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(18.8)
|
|
-
|
|
(14.1)
|
|
(32.9)
|
Repurchase of Class B
Shares
|
|
(5.8)
|
|
-
|
|
(61.1)
|
|
-
|
|
-
|
|
(66.9)
|
Non-controlling
interests acquisition
|
-
|
|
-
|
|
(25.7)
|
|
(0.4)
|
|
(17.8)
|
|
(43.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
September 30, 2017
|
|
318.6
|
|
3.5
|
|
593.9
|
|
(33.9)
|
|
526.6
|
|
1,408.7
|
Net income
|
|
-
|
|
-
|
|
70.4
|
|
-
|
|
22.0
|
|
92.4
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
(16.8)
|
|
(3.6)
|
|
(20.4)
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(6.5)
|
|
-
|
|
(4.6)
|
|
(11.1)
|
Repurchase of Class B
Shares
|
|
(4.7)
|
|
-
|
|
(55.9)
|
|
-
|
|
-
|
|
(60.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2017
|
|
313.9
|
|
3.5
|
|
601.9
|
|
(50.7)
|
|
540.4
|
|
1,409.0
|
Net income
|
|
-
|
|
-
|
|
284.7
|
|
-
|
|
34.7
|
|
319.4
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
(32.1)
|
|
(7.6)
|
|
(39.7)
|
Issuance of Class B
Shares
|
|
1.3
|
|
1.2
|
|
-
|
|
-
|
|
-
|
|
2.5
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(32.1)
|
|
-
|
|
(9.4)
|
|
(41.5)
|
Repurchase of Class B
Shares
|
|
(14.4)
|
|
-
|
|
(171.9)
|
|
-
|
|
-
|
|
(186.3)
|
Non-controlling
interests acquisition
|
-
|
|
-
|
|
(1,198.2)
|
|
(19.2)
|
|
(472.6)
|
|
(1,690.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
September 30, 2018
|
$
|
300.8
|
$
|
4.7
|
$
|
(515.6)
|
$
|
(102.0)
|
$
|
85.5
|
$
|
(226.6)
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Nine months
ended
|
(unaudited)
|
September
30
|
|
September
30
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
191.0
|
$
|
227.4
|
|
$
|
319.4
|
$
|
422.0
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
155.3
|
|
148.5
|
|
|
463.5
|
|
440.5
|
Amortization of
intangible assets
|
|
26.5
|
|
26.7
|
|
|
78.4
|
|
77.8
|
(Gain) loss on
valuation and translation of financial instruments
|
|
(54.5)
|
|
80.2
|
|
|
50.7
|
|
191.7
|
Gain on sale of
spectrum licences
|
|
-
|
|
(243.1)
|
|
|
-
|
|
(330.9)
|
Restructuring of
operations and impairment of goodwill
|
|
|
|
|
|
|
|
|
|
and other
assets
|
|
14.9
|
|
43.5
|
|
|
14.9
|
|
43.8
|
Loss on debt
refinancing
|
|
-
|
|
-
|
|
|
-
|
|
15.6
|
Amortization of
financing costs and long-term debt discount
|
|
1.8
|
|
1.8
|
|
|
5.3
|
|
5.3
|
Deferred income
taxes
|
|
(1.7)
|
|
64.2
|
|
|
(36.8)
|
|
94.4
|
Other
|
|
(2.6)
|
|
(0.4)
|
|
|
(4.2)
|
|
2.5
|
|
|
330.7
|
|
348.8
|
|
|
891.2
|
|
962.7
|
Net change in
non-cash balances related to operating activities
|
|
127.0
|
|
33.7
|
|
|
188.9
|
|
(100.0)
|
Cash flows provided
by continuing operating activities
|
|
457.7
|
|
382.5
|
|
|
1,080.1
|
|
862.7
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests acquisition
|
|
-
|
|
(43.9)
|
|
|
(1,540.0)
|
|
(43.9)
|
Business
acquisitions
|
|
(5.8)
|
|
-
|
|
|
(7.2)
|
|
(5.8)
|
Additions to
property, plant and equipment
|
|
(138.9)
|
|
(142.5)
|
|
|
(417.9)
|
|
(465.2)
|
Additions to
intangible assets
|
|
(31.8)
|
|
(30.5)
|
|
|
(127.3)
|
|
(93.6)
|
Proceeds from
disposals of assets
|
|
4.7
|
|
432.7
|
|
|
6.4
|
|
618.0
|
Other
|
|
(0.2)
|
|
(4.5)
|
|
|
(1.2)
|
|
(4.7)
|
Cash flows (used in)
provided by continuing investing activities
|
|
(172.0)
|
|
211.3
|
|
|
(2,087.2)
|
|
4.8
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
(5.6)
|
|
(7.5)
|
|
|
20.9
|
|
(18.9)
|
Net change under
revolving facilities
|
|
(94.2)
|
|
92.9
|
|
|
546.3
|
|
(90.6)
|
Issuance of long-term
debt, net of financing fees
|
|
-
|
|
49.8
|
|
|
-
|
|
844.3
|
Repayment of
long-term debt
|
|
(3.6)
|
|
(32.7)
|
|
|
(16.4)
|
|
(686.5)
|
Repayment of
convertible debentures
|
|
(86.5)
|
|
(95.2)
|
|
|
(158.4)
|
|
(95.2)
|
Settlement of hedging
contracts
|
|
-
|
|
-
|
|
|
(0.8)
|
|
(3.2)
|
Issuance of Class B
Shares
|
|
-
|
|
1.1
|
|
|
1.3
|
|
1.1
|
Repurchase of Class B
Shares
|
|
(68.3)
|
|
(37.6)
|
|
|
(186.3)
|
|
(66.9)
|
Dividends
|
|
(12.8)
|
|
(6.7)
|
|
|
(32.1)
|
|
(18.8)
|
Dividends or
distributions paid to non-controlling interests
|
|
-
|
|
(4.6)
|
|
|
(9.4)
|
|
(14.1)
|
Cash flows (used in)
provided by continuing financing activities
|
|
(271.0)
|
|
(40.5)
|
|
|
165.1
|
|
(148.8)
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents from continuing operations
|
|
14.7
|
|
553.3
|
|
|
(842.0)
|
|
718.7
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in
discontinued operations
|
|
-
|
|
(0.3)
|
|
|
-
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
8.2
|
|
187.4
|
|
|
864.9
|
|
22.3
|
Cash and cash
equivalents at end of period
|
$
|
22.9
|
$
|
740.4
|
|
$
|
22.9
|
$
|
740.4
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
22.0
|
$
|
738.7
|
|
$
|
22.0
|
$
|
738.7
|
Cash
equivalents
|
|
0.9
|
|
1.7
|
|
|
0.9
|
|
1.7
|
|
$
|
22.9
|
$
|
740.4
|
|
$
|
22.9
|
$
|
740.4
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
$
|
47.1
|
$
|
40.8
|
|
$
|
199.6
|
$
|
184.0
|
Cash income tax
payments (net of refunds)
|
|
(4.6)
|
|
1.1
|
|
|
12.4
|
|
57.5
|
QUEBECOR
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
|
(unaudited)
|
September
30
|
|
December
31
|
December
31
|
|
2018
|
|
2017
|
2016
|
|
|
|
(restated)
|
(restated)
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
22.9
|
|
$
|
864.9
|
$
|
22.3
|
Accounts
receivable
|
|
530.3
|
|
|
543.4
|
|
525.4
|
Contract
assets
|
|
136.3
|
|
|
132.8
|
|
106.6
|
Income
taxes
|
|
7.4
|
|
|
29.3
|
|
6.9
|
Inventories
|
|
157.6
|
|
|
188.1
|
|
183.3
|
Other current
assets
|
|
132.9
|
|
|
119.8
|
|
102.4
|
|
|
987.4
|
|
|
1,878.3
|
|
946.9
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
3,514.1
|
|
|
3,594.6
|
|
3,605.1
|
Intangible
assets
|
|
1,046.5
|
|
|
983.1
|
|
1,224.0
|
Goodwill
|
|
2,697.9
|
|
|
2,695.8
|
|
2,725.4
|
Derivative financial
instruments
|
|
634.5
|
|
|
591.8
|
|
809.0
|
Deferred income
taxes
|
|
39.7
|
|
|
33.2
|
|
16.0
|
Other
assets
|
|
181.6
|
|
|
185.1
|
|
177.1
|
|
|
8,114.3
|
|
|
8,083.6
|
|
8,556.6
|
Total
assets
|
$
|
9,101.7
|
|
$
|
9,961.9
|
$
|
9,503.5
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Bank
indebtedness
|
$
|
21.7
|
|
$
|
0.8
|
$
|
18.9
|
Accounts payable and
accrued charges
|
|
734.3
|
|
|
738.7
|
|
705.9
|
Provisions
|
|
33.8
|
|
|
25.4
|
|
69.3
|
Deferred
revenue
|
|
356.5
|
|
|
346.8
|
|
339.7
|
Income
taxes
|
|
125.9
|
|
|
13.3
|
|
35.2
|
Convertible
debentures
|
|
362.5
|
|
|
450.0
|
|
-
|
Embedded derivatives
related to convertible debentures
|
|
417.9
|
|
|
442.2
|
|
-
|
Current portion of
long-term debt
|
|
16.1
|
|
|
20.4
|
|
51.8
|
|
|
2,068.7
|
|
|
2,037.6
|
|
1,220.8
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Long-term
debt
|
|
6,152.5
|
|
|
5,516.2
|
|
5,616.9
|
Derivative financial
instruments
|
|
26.0
|
|
|
34.1
|
|
0.3
|
Convertible
debentures
|
|
150.0
|
|
|
-
|
|
500.0
|
Other
liabilities
|
|
216.8
|
|
|
215.8
|
|
516.2
|
Deferred income
taxes
|
|
714.3
|
|
|
749.2
|
|
624.8
|
|
|
7,259.6
|
|
|
6,515.3
|
|
7,258.2
|
Equity
|
|
|
|
|
|
|
|
Capital
stock
|
|
300.8
|
|
|
313.9
|
|
323.3
|
Contributed
surplus
|
|
4.7
|
|
|
3.5
|
|
2.3
|
(Deficit) retained
earnings
|
|
(515.6)
|
|
|
601.9
|
|
379.4
|
Accumulated other
comprehensive loss
|
|
(102.0)
|
|
|
(50.7)
|
|
(106.1)
|
Equity
attributable to shareholders
|
|
(312.1)
|
|
|
868.6
|
|
598.9
|
Non-controlling
interests
|
|
85.5
|
|
|
540.4
|
|
425.6
|
|
|
(226.6)
|
|
|
1,409.0
|
|
1,024.5
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
9,101.7
|
|
$
|
9,961.9
|
$
|
9,503.5
|
View original
content:http://www.prnewswire.com/news-releases/quebecor-inc-reports-consolidated-results-for-third-quarter-2018-300746129.html
SOURCE Quebecor