MONTREAL, Nov. 5, 2020 /PRNewswire/ - Quebecor Inc.
("Quebecor" or the "Corporation") today reported its consolidated
financial results for the third quarter of 2020. Quebecor
consolidates the financial results of its wholly owned Quebecor
Media Inc. ("Quebecor Media") subsidiary.
Third quarter 2020 highlights
- Revenues: $1.11 billion in the
third quarter of 2020, up $38.3
million (3.6%) from the same period of 2019.
- Adjusted EBITDA:1 $513.4
million, up $4.1 million
(0.8%).
- Net income attributable to shareholders: $140.9 million ($0.56 per basic share) in the third quarter of
2020, compared with $178.5 million
($0.70 per basic share) in the same
period of 2019, a decrease of $37.6
million ($0.14 per basic
share).
- Adjusted income from continuing operating
activities:2 $173.1
million ($0.69 per basic
share) in the third quarter of 2020, compared with $173.8 million ($0.68 per basic share) in the same period of
2019, a decrease of $0.7 million
(increase of $0.01 per basic
share).
- Cash flows from operations:3 $346.1 million, up $13.7
million (4.1%).
- The Telecommunications segment grew its revenues by
$61.2 million (7.0%) and its adjusted
EBITDA by $15.9 million (3.4%) in the
third quarter of 2020.
- Videotron Ltd. ("Videotron") significantly increased its
revenues from customer equipment sales ($60.9 million or 87.5%), mobile telephony
($12.7 million or 8.2%) and Internet
access ($6.2 million or 2.2%) in the
third quarter of 2020.
- Videotron's total average billing per unit ("ABPU") was
$49.96 in the third quarter of 2020,
compared with $50.49 in the same
period of 2019, a $0.53 (‑1.0%)
decrease. Mobile ABPU was $50.98 in
the third quarter of 2020, compared with $53.28 in the same period of 2019, a $2.30 (‑4.3%) decrease due in part to a decrease
in overage and roaming revenues due to the COVID‑19 health crisis
and the popularity of bring your own device ("BYOD") plans.
- There was a net increase of 4,700 revenue‑generating units
("RGUs") (0.1%) in the third quarter of 2020, including 47,700
connections (3.4%) to the mobile telephony service and 20,500
subscriptions (1.2%) to the cable Internet access service.
"Although the health situation and economic environment created
by the pandemic have been posing major challenges worldwide for
months now and some of our business units continue to be affected,
Quebecor grew its revenues and adjusted EBITDA in the third quarter
of 2020," commented Pierre Karl Péladeau, President and Chief
Executive Officer of Quebecor. "The quality of our mobile phone
service and the technological upgrading of our wireline service
offer contributed to customer growth. In addition, we maintained a
very prudent management of costs and capital investments,
generating a 4.1% increase in our cash flows from operations.
Quebecor enjoys optimal financial flexibility with more than
$1.8 billion in available
liquidity and a consolidated net debt leverage ratio4
of 2.76x.
"Connectivity and information needs have never been greater, and
we have continued to play a leading role in this area by providing
families and businesses across Québec with world‑class essential
services. Having completed a series of major infrastructure
investments, we were able to connect more than 30,000 new homes to
high‑speed Internet in several regions of Québec and our services
have also been deployed in Abitibi-Temiscamingue. Our wireline
services now reach more than 90% of Québec's population. To
accelerate Internet deployment and upgrades in all regions of
Québec, we must all redouble our efforts and Bell Canada must end its unfair practices.
Bell Canada must act now by putting in place concrete,
effective measures to allow timely access to its support
structures," said Pierre Karl Péladeau.
"The robustness and reliability of Videotron's network have been
clearly demonstrated in the past few months," said Jean‑François
Pruneau, President and Chief Executive Officer of Videotron. "The
network has successfully handled historic highs in traffic. Its
excellent performance was recognized by a study released by the
Canadian Radio‑television and Telecommunications Commission during
the third quarter of 2020, which showed, among other things,
that Videotron Internet service customers enjoy faster connections
than their plan's advertised speeds.
"September 9, 2020 was the 10th
anniversary of Videotron's entry into the mobile telephony market.
Over the past decade, Videotron's progress has been impressive with
now more than 1,452,600 subscriber connections as of
September 30, 2020, a net increase of 163,900 in the past
12 months. I am extremely proud of the distance we have travelled
and our unbroken record of success. Our entry into mobile telephony
has brought Quebecers more choice while creating jobs throughout
Québec. And our progress has not ended there. We have continued and
will continue to innovate, as evidenced by our Helix home
entertainment and connected lifestyle platform, which is already a
resounding success with more than 508,000 RGUs since its
launch in August 2019," concluded Jean François Pruneau.
"As expected, the pandemic continued to impact TVA Group Inc.'s
("TVA Group") business and hence its third quarter 2020
financial results," noted France Lauzière, President and Chief
Executive Officer of TVA Group. "The health crisis caused a
significant decline in our advertising revenues and a large
reduction in the number of sporting events broadcast by the
TVA Sports specialty channel, despite the broadcast of the
National Hockey League ("NHL") playoffs in the third quarter
of 2020.
"TVA Group grew its total market share by 3.2 points to 41.5% in
the third quarter of 2020. The increase was driven by the specialty
channels, which posted a 3.3‑point gain, led by the all‑news
channel LCN, which continued its growth with a 2.0‑point gain to
remain the most‑watched specialty channel in Québec with 7.1%. The
TVA Sports specialty channel was also up 1.9 point because of
the NHL playoffs.
"In our film production and audiovisual services business, with
the gradual resumption of film shoots during the quarter we are now
able to offer our clients our full complement of services again.
MELS Studios and Postproduction has also launched a new virtual
production stage, which offers an innovative alternative to
conventional shoots and facilitates compliance with physical
distancing rules," Ms. Lauzière said.
"The current situation is forcing us to stay agile and to adapt,
while remaining focused on our priorities and the disciplined
execution of our strategies. We have maintained our
customer‑centric vision and we continue to offer best‑in‑class
products and services, while supporting the employees who have made
Quebecor number one in customer experience. Lastly, our solid
financial position enables us to manage our business prudently,
keeping our sights on the long term, and to continue to invest to
create shareholder value," concluded Pierre Karl Péladeau.
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1 See "Adjusted EBITDA"
under "Definitions."
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2
See "Adjusted income from continuing operating activities" under
"Definitions."
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3 See "Cash flows from
operations" under "Definitions."
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4 See "consolidated net debt
leverage ratio" under "Definitions"
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COVID‑19 health crisis
The COVID‑19 pandemic is having a significant impact on the
economic environment in Canada and
around the world. On March 13, 2020, in order to
limit the spread of the virus, the Québec government imposed a
number of restrictions and special preventive measures, including
the suspension of business activities deemed non‑essential across
Québec. Since then, the Québec government has gradually implemented
a reopening plan, which was followed at the end of September by a
second set of restrictions due to the second wave of the pandemic.
This new plan includes regional restrictions according to the alert
level of each region and remains subject to change as the pandemic
evolves. This health crisis curtailed the operations of many of
Quebecor's business partners and led to a significant slowdown in
some of Quebecor's segments in the first nine months of 2020.
Among other impacts, the first wave of measures to prevent the
spread of the COVID‑19 virus has led to a significant reduction in
volume at Videotron retail outlets and delays in client migration
to its new Helix entertainment and home management platform; lower
advertising revenues, a significant decrease in sports events
broadcast by the TVA Sports channel, and reduced film and
audiovisual content activity in the Media segment; and
cancellations of shows and events, and interruption of music and
book distribution activities in the Sports and Entertainment
segment. Activity has since partly resumed at some of Quebecor's
affected business units by the health crisis, particularly those
involved in retail sales and distribution, sports broadcasting and
film and audio‑visual content production. However, the business
slowdown continues and the recovery remains very fragile,
particularly with the pandemic entering its second wave. Quebecor
has continued and will continue to provide essential
telecommunications and news services during this health crisis,
while safeguarding the health and safety of the public and its
employees. Videotron and TVA Group also took a number of important
initiatives to make life easier for their customers, such as
temporarily suspending certain fees. Furthermore, Videotron's
network has been able to handle the increase in traffic since the
beginning of the health crisis, including the impact on network
usage from the significant growth in teleworking, which
demonstrates the soundness of its strategy of continuously adding
capacity ahead of the curve. Because of the slowdown in the
economy, approximately 10% of Quebecor's workforce has received
benefits under the Corporation's assistance program while on
stand‑by. During the health crisis, this program provides financial
assistance in addition to the Canada Emergency Wage Subsidy or
Canada Emergency Response Benefit programs.
Non IFRS financial measures
The Corporation reviewed the nature and definition of its
non‑standardized financial measures in the first quarter
of 2020. As a result, "cash flows from segment operations" has
been abandoned and replaced by the new "cash flows from operations"
metric. This metric will henceforth be used to measure the cash
flows generated by the operations of all the business segments, on
a consolidated basis, in addition to the cash flows from operations
generated by each segment. In the third quarter of 2020, the
Corporation added the "consolidated net debt leverage ratio"
measure, which serves to evaluate the Corporation's financial
leverage and is used by management and the Board of Directors in
decisions on the Corporation's capital structure, including its
financing strategy, and in managing debt maturity risks. The
definitions of these new measures are provided under "Definitions"
below.
Financial tables
Table
1
|
Quebecor third
quarter financial highlights, 2016 to 2020
|
(in millions of
Canadian dollars, except per share data)
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
1,117.7
|
|
$
1,073.4
|
|
$
1,053.2
|
|
$
1,036.1
|
|
$
1,014.7
|
|
Adjusted
EBITDA
|
513.4
|
|
509.3
|
|
474.0
|
|
440.1
|
|
424.4
|
|
Income from
continuing operating
activities
attributable to shareholders
|
140.9
|
|
178.5
|
|
186.2
|
|
173.2
|
|
5.6
|
|
Net income
attributable to shareholders
|
140.9
|
|
178.5
|
|
187.1
|
|
178.6
|
|
6.8
|
|
Adjusted income from
continuing
operating
activities
|
173.1
|
|
173.8
|
|
141.5
|
|
103.3
|
|
97.1
|
|
Per basic
share:
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operating activities attributable to
shareholders
|
0.56
|
|
0.70
|
|
0.80
|
|
0.72
|
|
0.02
|
|
Net income
attributable to shareholders
|
0.56
|
|
0.70
|
|
0.80
|
|
0.74
|
|
0.03
|
|
Adjusted income from
continuing
operating activities
|
0.69
|
|
0.68
|
|
0.61
|
|
0.43
|
|
0.40
|
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Table
2
|
Cash flows from
operations for the past eight quarters
|
(in millions of
Canadian dollars)
|
|
|
Q3‑2020
|
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Q2‑2020
|
|
Q1‑2020
|
|
Q4‑2019
|
|
Q3‑2019
|
|
Q2‑2019
|
|
Q1‑2019
|
|
Q4‑2018
|
|
|
|
|
|
|
|
|
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|
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|
Telecommunications
|
$
|
325.9
|
$
|
322.8
|
$
|
302.5
|
$
|
248.5
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$
|
306.5
|
$
|
281.8
|
$
|
288.5
|
$
|
169.4
|
Media
|
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17.0
|
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−
|
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(3.6)
|
|
16.9
|
|
17.8
|
|
(3.0)
|
|
(6.9)
|
|
14.5
|
Sports and
Entertainment
|
|
6.7
|
|
2.1
|
|
(4.7)
|
|
1.8
|
|
6.0
|
|
(3.1)
|
|
(2.3)
|
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1.7
|
Head
Office
|
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(3.5)
|
|
1.2
|
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0.8
|
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(6.7)
|
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2.1
|
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(0.8)
|
|
(3.0)
|
|
(5.3)
|
Total
|
$
|
346.1
|
$
|
326.1
|
$
|
295.0
|
$
|
260.5
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$
|
332.4
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$
|
274.9
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$
|
276.3
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$
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180.3
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2020/2019 third quarter comparison
Revenues: $1.11 billion, a $38.3 million (3.6%) increase.
- Revenues increased in Telecommunications ($61.2 million or 7.0%).
- Revenues decreased in Media ($10.0
million or ‑6.0% of segment revenues) and in Sports and
Entertainment ($7.3 million or
‑13.1%).
Adjusted EBITDA: $513.4 million, a $4.1 million (0.8%) increase.
- Adjusted EBITDA increased in Telecommunications ($15.9 million or 3.4% of segment adjusted EBITDA)
and in Sports and Entertainment ($0.7
million or 10.1%).
- Adjusted EBITDA decreased in Media ($7.7
million or ‑23.6%), and there was an unfavourable variance
at Head Office ($4.8 million) due
mainly to an increase in the stock‑based compensation charge.
- The change in the fair value of Quebecor Media stock options
resulted in a $0.2 million
favourable variance in the stock‑based compensation charge in the
third quarter of 2020 compared with the same period of 2019. The
change in the fair value of Quebecor stock options and in the value
of Quebecor stock‑price‑based share units resulted in a
$4.2 million unfavourable
variance in the Corporation's stock‑based compensation charge in
the third quarter of 2020.
Net income attributable to shareholders: $140.9 million ($0.56 per basic share) in the third quarter
of 2020, compared with $178.5 million ($0.70 per basic share) in the same period of
2019, a decrease of $37.6 million ($0.14 per basic share).
- The main unfavourable variances were:
-
- $24.6 million unfavourable
variance in losses on valuation and translation of financial
instruments, including $22.0 million without any tax
consequences;
- $17.7 million unfavourable
variance in the charge for restructuring of operations and other
items;
- $8.9 million increase in the
depreciation and amortization charge.
- The main favourable variances were:
-
- $6.8 million decrease in the
income tax expense;
- $4.1 million increase in
adjusted EBITDA.
Adjusted income from continuing operating activities:
$173.1 million ($0.69 per basic share) in the third quarter
of 2020, compared with $173.8 million ($0.68 per basic share) in the same period of
2019, a decrease of $0.7 million
(increase of $0.01 per basic
share).
Cash flows from operations: $346.1 million, a $13.7 million (4.1%) increase caused mainly
by an $8.7 million decrease in
additions to intangible assets and a $4.1 million increase in adjusted
EBITDA.
Cash flows from continuing operating activities:
$339.4 million, a $39.6 million decrease due primarily to an
increase in current income taxes and an increase in the cash
portion of the charge for restructuring of operations and other
items.
2020/2019 year‑to‑date comparison
Revenues: $3.17 billion, a $13.4 million (0.4%) increase.
- Revenues increased in Telecommunications ($109.9 million or 4.3%).
- Revenues decreased in Media ($65.3
million or ‑12.3% of segment revenues) and in Sports and
Entertainment ($28.3 million or
‑20.6%).
Adjusted EBITDA: $1.43 billion, a $40.8 million (2.9%) increase.
- Adjusted EBITDA increased in Telecommunications ($42.0 million or 3.1% of segment adjusted EBITDA)
and in Sports and Entertainment ($1.9
million or 40.4%).
- Adjusted EBITDA decreased in Media ($2.9
million or ‑7.3%).
- The change in the fair value of Quebecor Media stock options
resulted in a $0.4 million favourable
variance in the stock‑based compensation charge in the first nine
months of 2020 compared with the same period of 2019. The change in
the fair value of Quebecor stock options and the value of Quebecor
stock‑price‑based share units resulted in a $3.9 million favourable variance in the
Corporation's stock‑based compensation charge in the first nine
months of 2020.
Net income attributable to shareholders: $447.4 million ($1.77 per basic share) in the first nine months
of 2020, compared with $507.7 million ($1.98 per basic share) in the same period of
2019, a decrease of $60.3 million ($0.21 per basic share).
- The main unfavourable variances were:
-
- $63.7 million decrease in
income from discontinued operations;
- $25.6 million increase in
the depreciation and amortization charge;
- $6.1 million unfavourable
variance in the charge for restructuring of operations and other
items;
- $3.0 million increase in
financial expenses;
- $2.3 million increase in the
income tax expense.
- The main favourable variances were:
-
- $40.8 million increase in
adjusted EBITDA.
Adjusted income from continuing operating activities:
$429.5 million ($1.70 per basic share) in the first nine months
of 2020, compared with $421.4 million ($1.65 per basic share) in the same period of
2019, an increase of $8.1 million ($0.05 per basic share).
Cash flows from operations: $967.2 million, an $83.6 million (9.5%) increase caused by a
$40.8 million increase in
adjusted EBITDA and by a $40.3 million decrease in additions to
property, plant and equipment.
Cash flows from continuing operating activities:
$1.05 billion, a $205.8 million increase due primarily to the
favourable net change in non‑cash balances related to operating
activities and the increase in adjusted EBITDA, partially offset by
the increase in current income taxes and the increase in the cash
portion related to restructuring of operations and other items.
Consolidated net debt leverage ratio
Consolidated net debt leverage ratio: 2.76x at September 30, 2020 compared with 2.91x at
December 31, 2019. The decrease was due primarily to net
reductions in drawings by Videotron, TVA Group, Quebecor Media and
Quebecor on their revolving credit facilities, using free cash
flows from continuing operating activities, and the increase in the
trailing 12‑month adjusted EBITDA.
Normal course issuer bid
On August 5, 2020, the Corporation
authorized a normal course issuer bid for a maximum of
1,000,000 Class A Multiple Voting Shares ("Class A
Shares"), representing approximately 1.3% of issued and outstanding
Class A Shares, and for a maximum of
6,000,000 Class B Subordinate Voting Shares
("Class B Shares"), representing approximately 3.5% of issued
and outstanding Class B Shares as of July 31, 2020.
The purchases can be made from August 15,
2020 to August 14, 2021, at prevailing market
prices on the open market through the facilities of the Toronto
Stock Exchange or other alternative trading systems. All shares
purchased under the bid will be cancelled.
On August 7, 2020, the Corporation
announced that it had entered into an automatic securities purchase
plan ("the plan") with a designated broker 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. The plan received prior approval
from the Toronto Stock Exchange. It came into effect on
August 15, 2020 and terminates on the same date as the
normal course issuer bid.
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.
In the first nine months of 2020, the Corporation purchased and
cancelled 4,695,800 Class B Shares for a total cash
consideration of $143.4 million
(2,672,056 Class B Shares for a total cash consideration
of $80.5 million in the same
period of 2019). The $115.7 million excess of the purchase price
over the carrying value of the repurchased Class B Shares was
recorded as a reduction in retained earnings ($64.8 million increase in the deficit in the
same period of 2019).
During the first nine months of 2019, 180,000 Class B
Shares were issued upon exercise of stock options for a cash
consideration of $2.7 million. Following this
transaction, the contributed surplus was increased by $3.0 million and the stock option plan
liability was reduced by the same amount.
Dividend
On November 4, 2020, the Board of
Directors of Quebecor declared a quarterly dividend of $0.20 per share on Class A Shares and
Class B Shares payable on December 15, 2020 to
shareholders of record as of the record date of
November 20, 2020. This dividend is designated an
eligible dividend, as provided under subsection 89(14) of the
Canadian Income Tax Act and its provincial counterpart.
Convertible debentures
In accordance with the terms of the trust indenture governing
the convertible debentures, the quarterly dividend declared on
March 11, 2020 on Quebecor Class B Shares triggered
an adjustment to the floor price and ceiling price then in effect.
Accordingly, effective March 26, 2020, the conversion
features of the convertible debentures are subject to an adjusted
floor price of approximately $26.57 per share (that is, a maximum number
of approximately 5,644,430 Class B Shares corresponding to a
ratio of $150.0 million to the
adjusted floor price) and an adjusted ceiling price of
approximately $33.22 per share (that
is, a minimum number of approximately 4,515,544 Class B
Shares corresponding to a ratio of $150.0 million to the adjusted ceiling
price).
Detailed financial information
For a detailed analysis of Quebecor's third quarter 2020
results, please refer to the Management Discussion and Analysis and
condensed consolidated financial statements of Quebecor, available
on the Corporation's website at
<www.quebecor.com/en/investors/financial documentation> 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 2020 results on November 5, 2020, 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 5, 2020 to February 6, 2021 by
dialling 1 877 293‑8133, conference number and access
code for participants 48006#. The conference call will also be
broadcast live on Quebecor's website at
<www.quebecor.com/en/investors/conferences-and-annual-meeting>.
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 service interruptions resulting from
equipment breakdown, network failure, the threat of natural
disasters, epidemics, pandemics or other health crises, including
the COVID‑19 pandemic, political instability is some countries,
risks associated with emergency measures implemented by various
governments, 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, 2019, and the
"Risks and Uncertainties Update" section of Quebecor's Management
Discussion and Analysis for the period ended
September 30, 2020.
The forward‑looking statements in this press release reflect
Quebecor's expectations as of November 5, 2020 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
Adjusted EBITDA
In its analysis of operating results, the Corporation defines
adjusted EBITDA, 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 and other items, income taxes 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 IFRS financial 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 operations and free cash flows
from continuing operating activities. The Corporation's definition
of adjusted EBITDA may not be the same as similarly titled measures
reported by other companies.
Table 3 provides a reconciliation of adjusted EBITDA to net
income as disclosed in Quebecor's condensed consolidated financial
statements.
|
|
|
Table
3
|
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)
|
|
Three months
ended
September 30
|
Nine months ended
September 30
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
483.6
|
$
|
467.7
|
$
|
1,382.7
|
$
|
1,340.7
|
Media
|
|
24.9
|
|
32.6
|
|
36.6
|
|
39.5
|
Sports and
Entertainment
|
|
7.6
|
|
6.9
|
|
6.6
|
|
4.7
|
Head
Office
|
|
(2.7)
|
|
2.1
|
|
(0.1)
|
|
0.1
|
|
|
513.4
|
|
509.3
|
|
1,425.8
|
|
1,385.0
|
Depreciation and
amortization
|
|
(195.9)
|
|
(187.0)
|
|
(589.7)
|
|
(564.1)
|
Financial
expenses
|
|
(80.1)
|
|
(81.2)
|
|
(249.1)
|
|
(246.1)
|
(Loss) gain on
valuation and translation of financial
instruments
|
|
(18.6)
|
|
6.0
|
|
8.9
|
|
8.1
|
Restructuring of
operations and other items
|
|
(18.9)
|
|
(1.2)
|
|
(33.1)
|
|
(27.0)
|
Income
taxes
|
|
(56.4)
|
|
(63.2)
|
|
(147.7)
|
|
(145.4)
|
Income from
discontinued operations
|
|
−
|
|
−
|
|
33.8
|
|
97.5
|
Net
income
|
$
|
143.5
|
$
|
182.7
|
$
|
448.9
|
$
|
508.0
|
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 gain (loss) on valuation and translation of
financial instruments, restructuring of operations and other items,
net of income tax related to adjustments and net income
attributable to non‑controlling interest related to adjustments,
and before the 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 4 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
4
|
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)
|
|
Three months
ended
September 30
|
Nine months ended
September 30
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted income from
continuing operating activities
|
$
|
173.1
|
$
|
173.8
|
$
|
429.5
|
$
|
421.4
|
(Loss) gain on
valuation and translation of financial instruments
|
|
(18.6)
|
|
6.0
|
|
8.9
|
|
8.1
|
Restructuring of
operations and other items
|
|
(18.9)
|
|
(1.2)
|
|
(33.1)
|
|
(27.0)
|
Income taxes related
to adjustments1
|
|
4.5
|
|
(0.1)
|
|
7.0
|
|
6.6
|
Net income
attributable to non‑controlling interest related to
adjustments
|
|
0.8
|
|
−
|
|
1.3
|
|
1.1
|
Discontinued
operations
|
|
−
|
|
−
|
|
33.8
|
|
97.5
|
Net
income attributable to
shareholders
|
$
|
140.9
|
$
|
178.5
|
$
|
447.4
|
$
|
507.7
|
1
Includes impact of fluctuations in income tax applicable to
adjusted items, either for statutory reasons or in connection with
tax transactions.
|
Cash flows from operations and free cash flows from
continuing operating activities
Cash flows from operations
Cash flows from operations represents adjusted EBITDA, less
additions to property, plant and equipment and to intangible assets
(excluding licence acquisitions and renewals). Cash flows from
operations represents funds available for interest and income tax
payments, expenditures related to restructuring programs, business
acquisitions, licence acquisitions and renewals, payment of
dividends, repayment of long‑term debt and share repurchases. Cash
flows from operations is not a measure of liquidity that is
consistent with IFRS. It is not intended to be regarded as an
alternative to IFRS financial performance measures or to the
statement of cash flows as a measure of liquidity. Cash flows from
operations is used by the Corporation's management and Board of
Directors to evaluate cash flows generated by the operations of all
of its segments. The Corporation's definition of cash flows from
operations may not be identical to similarly titled measures
reported by other companies.
Free cash flows from continuing operating activities
Free cash flows from continuing operating activities represents
cash flows provided by continuing operating activities calculated
in accordance with IFRS, less cash flows used for additions to
property, plant and equipment and to intangible assets (excluding
expenditures related to licence acquisitions and renewals), plus
proceeds from disposal of assets. Free cash flows from continuing
operating activities is used by the Corporation's management and
Board of Directors to evaluate cash flows generated by the
Corporation's operations. Free cash flows from continuing operating
activities represents available funds for business acquisitions,
licence acquisitions and renewals, payment of dividends, repayment
of long‑term debt and share repurchases. Free cash flows from
continuing operating activities is not a measure of liquidity that
is consistent with IFRS. It is not intended to be regarded as an
alternative to IFRS financial performance measures or to the
statement of cash flows as a measure of liquidity. The
Corporation's definition of free cash flows from continuing
operating activities may not be identical to similarly titled
measures reported by other companies.
Tables 5 and 6 provide a reconciliation of cash flows from
operations and free cash flows from continuing operating activities
to cash flows provided by continuing operating activities reported
in the condensed consolidated financial statements.
Table
5
|
Cash flows from
operations
|
(in millions of
Canadian dollars)
|
|
Three months
ended
September 30
|
Nine months ended
September 30
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA)
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
483.6
|
$
|
467.7
|
$
|
1,382.7
|
$
|
1,340.7
|
Media
|
|
24.9
|
|
32.6
|
|
36.6
|
|
39.5
|
Sports and
Entertainment
|
|
7.6
|
|
6.9
|
|
6.6
|
|
4.7
|
Head
Office
|
|
(2.7)
|
|
2.1
|
|
(0.1)
|
|
0.1
|
|
|
513.4
|
|
509.3
|
|
1,425.8
|
|
1,385.0
|
Minus
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment:1
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
(115.7)
|
|
(114.8)
|
|
(298.2)
|
|
(332.0)
|
Media
|
|
(3.2)
|
|
(5.7)
|
|
(6.7)
|
|
(12.3)
|
Sports and
Entertainment
|
|
(0.1)
|
|
(0.1)
|
|
(0.2)
|
|
(1.1)
|
Head
Office
|
|
(0.8)
|
|
(0.1)
|
|
(1.3)
|
|
(1.3)
|
|
|
(119.8)
|
|
(120.7)
|
|
(306.4)
|
|
(346.7)
|
Additions to
intangible assets:2
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
(42.0)
|
|
(46.4)
|
|
(133.3)
|
|
(131.9)
|
Media
|
|
(4.7)
|
|
(9.1)
|
|
(16.5)
|
|
(19.3)
|
Sports and
Entertainment
|
|
(0.8)
|
|
(0.8)
|
|
(2.3)
|
|
(3.0)
|
Head
Office
|
|
−
|
|
0.1
|
|
(0.1)
|
|
(0.5)
|
|
|
(47.5)
|
|
(56.2)
|
|
(152.2)
|
|
(154.7)
|
Cash flows from
operations
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
325.9
|
|
306.5
|
|
951.2
|
|
876.8
|
Media
|
|
17.0
|
|
17.8
|
|
13.4
|
|
7.9
|
Sports and
Entertainment
|
|
6.7
|
|
6.0
|
|
4.1
|
|
0.6
|
Head
Office
|
|
(3.5)
|
|
2.1
|
|
(1.5)
|
|
(1.7)
|
|
$
|
346.1
|
$
|
332.4
|
$
|
967.2
|
$
|
883.6
|
|
|
|
|
|
|
1
Reconciliation to cash flows used for additions to property,
plant
and equipment as per condensed consolidated financial
statements:
|
Three months ended
Sept. 30
|
Nine months ended
Sept. 30
|
2020
|
2019
|
2020
|
2019
|
Additions to
property, plant and equipment
|
$
|
(119.8)
|
$
|
(120.7)
|
$
|
(306.4)
|
$
|
(346.7)
|
Net decrease in
current accounts payable related to additions to property, plant
and equipment
|
|
(18.3)
|
|
(1.9)
|
|
(18.4)
|
|
(30.6)
|
Cash flows used for
additions to property, plant and equipment
|
$
|
(138.1)
|
$
|
(122.6)
|
$
|
(324.8)
|
$
|
(377.3)
|
|
|
|
|
|
|
2
Reconciliation to cash flows used for additions to
intangible
assets as per condensed consolidated financial
statements
|
Three months ended
Sept. 30
|
Nine months ended
Sept. 30
|
2020
|
2019
|
2020
|
2019
|
Additions to
intangible assets
|
$
|
(47.5)
|
$
|
(56.2)
|
$
|
(152.2)
|
$
|
(154.7)
|
Net increase
(decrease) in current accounts payable related to additions to
intangible assets
|
|
13.2
|
|
(10.2)
|
|
(32.9)
|
|
(14.0)
|
Disbursements for
licence acquisitions
|
|
−
|
|
−
|
|
−
|
|
(255.8)
|
Cash flows used for
additions to intangible assets
|
$
|
(34.3)
|
$
|
(66.4)
|
$
|
(185.1)
|
$
|
(424.5)
|
Table
6
|
Free cash flows
from continuing operating activities and cash flows provided by
continuing operating activities reported in the condensed
consolidated financial statements
|
(in millions of
Canadian dollars)
|
|
Three months
ended
September 30
|
Nine months ended
September 30
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Cash flows from
operations from Table 5
|
$
|
346.1
|
$
|
332.4
|
$
|
967.2
|
$
|
883.6
|
Plus
(minus)
|
|
|
|
|
|
|
|
|
Cash portion of
financial expenses
|
|
(78.1)
|
|
(79.1)
|
|
(243.0)
|
|
(240.0)
|
Cash portion
related to restructuring of operations and other items
|
|
(11.6)
|
|
(1.2)
|
|
(25.8)
|
|
(8.2)
|
Current income
taxes
|
|
(60.7)
|
|
(29.7)
|
|
(181.0)
|
|
(115.1)
|
Other
|
|
1.1
|
|
0.7
|
|
3.5
|
|
1.3
|
Net change in non‑cash
balances related to operating activities
|
|
(23.3)
|
|
(20.5)
|
|
78.6
|
|
(171.1)
|
Net decrease in
current accounts payable related to additions to property, plant and
equipment
|
|
(18.3)
|
|
(1.9)
|
|
(18.4)
|
|
(30.6)
|
Net increase
(decrease) in current accounts payable related to additions to intangible
assets
|
|
13.2
|
|
(10.2)
|
|
(32.9)
|
|
(14.0)
|
Free cash flows
from continuing operating activities
|
|
168.4
|
|
190.5
|
|
548.2
|
|
305.9
|
Plus
(minus)
|
|
|
|
|
|
|
|
|
Cash flows used
for additions to property, plant and equipment
|
|
138.1
|
|
122.6
|
|
324.8
|
|
377.3
|
Cash flows used
for additions to intangible assets (excluding licence
acquisitions and renewals)
|
|
34.3
|
|
66.4
|
|
185.1
|
|
168.7
|
Proceeds from
disposal of assets
|
|
(1.4)
|
|
(0.5)
|
|
(3.6)
|
|
(3.2)
|
Cash flows
provided by continuing operating activities
|
$
|
339.4
|
$
|
379.0
|
$
|
1,054.5
|
$
|
848.7
|
Consolidated net debt leverage ratio
The consolidated net debt leverage ratio represents consolidated
net debt excluding convertible debentures divided by the trailing
12‑month adjusted EBITDA. Consolidated net debt excluding
convertible debentures represents total long‑term debt plus bank
indebtedness, lease liabilities, the current portion of lease
liabilities and liabilities related to derivative financial
instruments, less assets related to derivative financial
instruments and cash and cash equivalents. The consolidated net
debt leverage ratio serves to evaluate the Corporation's financial
leverage and is used by management and the Board of Directors in
decisions on the Corporation's capital structure, including its
financing strategy, and in managing debt maturity risks. The
consolidated net debt leverage ratio excludes convertible
debentures because, subject to certain conditions, those debentures
can be repurchased at the Corporation's discretion by issuing
Quebecor Class B Shares. Consolidated net debt leverage ratio
is not a measure established in accordance with IFRS. It is
not intended to be used as an alternative to IFRS measures or the
balance sheet to evaluate financial position. The Corporation's
definition of consolidated net debt leverage ratio may not be
identical to similarly titled measures reported by other
companies.
Table 7 provides the calculation of consolidated net debt
leverage ratio and the reconciliation to balance sheet items
reported in Quebecor's condensed consolidated financial
statements.
Table
7
|
Consolidated net
debt leverage ratio
|
(in millions of
Canadian dollars)
|
|
Sept. 30,
2020
|
Dec. 31,
2019
|
|
|
|
|
|
Total long‑term
debt1
|
$
|
5,952.1
|
$
|
5,986.1
|
Plus
(minus)
|
|
|
|
|
Lease
liabilities
|
|
133.7
|
|
106.6
|
Current portion
of lease liabilities
|
|
34.3
|
|
31.3
|
Bank
indebtedness
|
|
15.2
|
|
29.4
|
Assets related
to derivative financial instruments
|
|
(800.2)
|
|
(679.8)
|
Liabilities
related to derivative financial instruments
|
|
1.6
|
|
2.1
|
Cash and cash
equivalents
|
|
(40.7)
|
|
(14.0)
|
Consolidated net debt
excluding convertible debentures
|
|
5,296.0
|
|
5,461.7
|
Divided
by:
|
|
|
|
|
Trailing
12‑month adjusted EBITDA
|
$
|
1,920.3
|
$
|
1,879.5
|
Consolidated net
debt leverage ratio
|
|
2.76x
|
|
2.91x
|
1 Excludes
changes in the fair value of long‑term debt related to hedged
interest risk and financing fees.
|
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, television and Club illico
over‑the‑top video ("Club illico") services, and subscriber
connections to the mobile telephony and wireline 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 or published by public authorities.
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, television,
Club illico, mobile telephony and wireline telephony services
by the total average number of RGUs from cable Internet,
television, mobile telephony and wireline 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
|
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,111.7
|
$
|
1,073.4
|
|
$
|
3,171.0
|
$
|
3,157.6
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
|
156.5
|
|
162.6
|
|
|
471.2
|
|
516.6
|
Purchase of goods and
services
|
|
|
441.8
|
|
401.5
|
|
|
1,274.0
|
|
1,256.0
|
Depreciation and
amortization
|
|
|
195.9
|
|
187.0
|
|
|
589.7
|
|
564.1
|
Financial
expenses
|
|
|
80.1
|
|
81.2
|
|
|
249.1
|
|
246.1
|
Loss (gain) on
valuation and translation of financial instruments
|
|
|
18.6
|
|
(6.0)
|
|
|
(8.9)
|
|
(8.1)
|
Restructuring of
operations and other items
|
|
|
18.9
|
|
1.2
|
|
|
33.1
|
|
27.0
|
Income before
income taxes
|
|
|
199.9
|
|
245.9
|
|
|
562.8
|
|
555.9
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
60.7
|
|
29.7
|
|
|
181.0
|
|
115.1
|
Deferred
|
|
|
(4.3)
|
|
33.5
|
|
|
(33.3)
|
|
30.3
|
|
|
|
56.4
|
|
63.2
|
|
|
147.7
|
|
145.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
|
143.5
|
|
182.7
|
|
|
415.1
|
|
410.5
|
Income from
discontinued operations
|
|
|
-
|
|
-
|
|
|
33.8
|
|
97.5
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
143.5
|
$
|
182.7
|
|
$
|
448.9
|
$
|
508.0
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
$
|
140.9
|
$
|
178.5
|
|
$
|
413.6
|
$
|
410.2
|
Non-controlling
interests
|
|
|
2.6
|
|
4.2
|
|
|
1.5
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
$
|
140.9
|
$
|
178.5
|
|
$
|
447.4
|
$
|
507.7
|
Non-controlling
interests
|
|
|
2.6
|
|
4.2
|
|
|
1.5
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
From
continuing operations
|
|
$
|
0.56
|
$
|
0.70
|
|
$
|
1.64
|
$
|
1.60
|
From
discontinued operations
|
|
|
-
|
|
-
|
|
|
0.13
|
|
0.38
|
Net
income
|
|
|
0.56
|
|
0.70
|
|
|
1.77
|
|
1.98
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
From
continuing operations
|
|
|
0.56
|
|
0.67
|
|
|
1.58
|
|
1.57
|
From
discontinued operations
|
|
|
-
|
|
-
|
|
|
0.13
|
|
0.37
|
Net
income
|
|
|
0.56
|
|
0.67
|
|
|
1.71
|
|
1.94
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
|
250.5
|
|
255.6
|
|
|
252.4
|
|
255.8
|
Weighted average
number of diluted shares (in millions)
|
|
|
250.7
|
|
261.7
|
|
|
258.2
|
|
261.9
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
(in millions of
Canadian dollars)
|
|
Three months
ended
|
|
Nine months
ended
|
(unaudited)
|
|
September
30
|
|
September
30
|
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
143.5
|
$
|
182.7
|
|
$
|
415.1
|
$
|
410.5
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
(25.0)
|
|
41.4
|
|
|
18.9
|
|
71.6
|
Deferred income
taxes
|
|
|
6.1
|
|
(6.5)
|
|
|
(2.5)
|
|
(4.7)
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not
be reclassified to income:
|
|
|
|
|
|
|
|
|
|
|
Defined benefit
plans:
|
|
|
|
|
|
|
|
|
|
|
Re-measurement
loss
|
|
|
(25.0)
|
|
-
|
|
|
(87.0)
|
|
-
|
Deferred income
taxes
|
|
|
6.6
|
|
-
|
|
|
22.6
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification to
income:
|
|
|
|
|
|
|
|
|
|
|
Gain related to cash
flow hedges
|
|
|
-
|
|
(1.1)
|
|
|
-
|
|
(1.1)
|
Deferred income
taxes
|
|
|
-
|
|
0.7
|
|
|
-
|
|
0.7
|
|
|
|
(37.3)
|
|
34.5
|
|
|
(48.0)
|
|
66.5
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
|
106.2
|
|
217.2
|
|
|
367.1
|
|
477.0
|
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
|
-
|
|
-
|
|
|
33.8
|
|
97.5
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
106.2
|
$
|
217.2
|
|
$
|
400.9
|
$
|
574.5
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) from continuing operations attributable
to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
$
|
104.8
|
$
|
213.0
|
|
$
|
370.3
|
$
|
476.7
|
Non-controlling
interests
|
|
|
1.4
|
|
4.2
|
|
|
(3.2)
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
$
|
104.8
|
$
|
213.0
|
|
$
|
404.1
|
$
|
574.2
|
Non-controlling
interests
|
|
|
1.4
|
|
4.2
|
|
|
(3.2)
|
|
0.3
|
QUEBECOR
INC.
|
SEGMENTED
INFORMATION
|
|
(in millions of
Canadian dollars)
(unaudited)
|
|
Three months ended
September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and
Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
937.9
|
$
|
157.2
|
$
|
48.5
|
$
|
(31.9)
|
$
|
1,111.7
|
Employee
costs
|
|
101.4
|
|
38.6
|
|
7.5
|
|
9.0
|
|
156.5
|
Purchase of goods and
services
|
|
352.9
|
|
93.7
|
|
33.4
|
|
(38.2)
|
|
441.8
|
Adjusted
EBITDA1
|
|
483.6
|
|
24.9
|
|
7.6
|
|
(2.7)
|
|
513.4
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
195.9
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
80.1
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
18.6
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
18.9
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
199.9
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
$
|
133.9
|
$
|
3.4
|
$
|
0.1
|
$
|
0.7
|
$
|
138.1
|
Additions to
intangible assets
|
|
29.6
|
|
3.9
|
|
0.8
|
|
-
|
|
34.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
876.7
|
$
|
167.2
|
$
|
55.8
|
$
|
(26.3)
|
$
|
1,073.4
|
Employee
costs
|
|
92.2
|
|
53.4
|
|
9.5
|
|
7.5
|
|
162.6
|
Purchase of goods and
services
|
|
316.8
|
|
81.2
|
|
39.4
|
|
(35.9)
|
|
401.5
|
Adjusted
EBITDA1
|
|
467.7
|
|
32.6
|
|
6.9
|
|
2.1
|
|
509.3
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
187.0
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
81.2
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(6.0)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
1.2
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
245.9
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
$
|
117.4
|
$
|
5.0
|
$
|
0.1
|
$
|
0.1
|
$
|
122.6
|
Additions to
intangible assets
|
|
57.2
|
|
8.5
|
|
0.8
|
|
(0.1)
|
|
66.4
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and
Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,681.7
|
$
|
464.7
|
$
|
109.2
|
$
|
(84.6)
|
$
|
3,171.0
|
Employee
costs
|
|
305.0
|
|
124.5
|
|
21.6
|
|
20.1
|
|
471.2
|
Purchase of goods and
services
|
|
994.0
|
|
303.6
|
|
81.0
|
|
(104.6)
|
|
1,274.0
|
Adjusted
EBITDA1
|
|
1,382.7
|
|
36.6
|
|
6.6
|
|
(0.1)
|
|
1,425.8
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
589.7
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
249.1
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(8.9)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
33.1
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
562.8
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
312.3
|
$
|
11.2
|
$
|
0.2
|
$
|
1.1
|
$
|
324.8
|
Additions to
intangible assets
|
|
165.7
|
|
17.0
|
|
2.3
|
|
0.1
|
|
185.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,571.8
|
$
|
530.0
|
$
|
137.5
|
$
|
(81.7)
|
$
|
3,157.6
|
Employee
costs
|
|
291.8
|
|
170.8
|
|
29.1
|
|
24.9
|
|
516.6
|
Purchase of goods and
services
|
|
939.3
|
|
319.7
|
|
103.7
|
|
(106.7)
|
|
1,256.0
|
Adjusted
EBITDA1
|
|
1,340.7
|
|
39.5
|
|
4.7
|
|
0.1
|
|
1,385.0
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
564.1
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
246.1
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(8.1)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
27.0
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
555.9
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
361.2
|
$
|
13.7
|
$
|
1.1
|
$
|
1.3
|
$
|
377.3
|
Additions to
intangible assets
|
|
402.3
|
|
19.1
|
|
2.9
|
|
0.2
|
|
424.5
|
|
|
|
|
|
|
|
|
|
|
|
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, loss (gain) on valuation and translation of
financial
|
|
instruments,
restructuring of operations and other items, 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, 2018
|
$
|
1,065.9
|
$
|
4.7
|
$
|
(507.9)
|
$
|
(82.7)
|
$
|
88.5
|
$
|
568.5
|
Net income
|
|
-
|
|
-
|
|
507.7
|
|
-
|
|
0.3
|
|
508.0
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
66.5
|
|
-
|
|
66.5
|
Issuance of Class B
Shares
|
|
2.7
|
|
3.0
|
|
-
|
|
-
|
|
-
|
|
5.7
|
Dividends
|
|
-
|
|
-
|
|
(71.6)
|
|
-
|
|
-
|
|
(71.6)
|
Repurchase of Class B
Shares
|
|
(15.7)
|
|
-
|
|
(64.8)
|
|
-
|
|
-
|
|
(80.5)
|
Balance as of
September 30, 2019
|
|
1,052.9
|
|
7.7
|
|
(136.6)
|
|
(16.2)
|
|
88.8
|
|
996.6
|
Net income
|
|
-
|
|
-
|
|
145.1
|
|
-
|
|
5.2
|
|
150.3
|
Other comprehensive
(loss) income
|
|
-
|
|
-
|
|
-
|
|
(47.9)
|
|
0.6
|
|
(47.3)
|
Dividends
|
|
-
|
|
-
|
|
(28.7)
|
|
-
|
|
-
|
|
(28.7)
|
Issuance of Class B
Shares
|
|
5.6
|
|
9.7
|
|
-
|
|
-
|
|
-
|
|
15.3
|
Repurchase of Class B
Shares
|
|
(2.6)
|
|
-
|
|
(11.5)
|
|
-
|
|
-
|
|
(14.1)
|
Balance as of
December 31, 2019
|
|
1,055.9
|
|
17.4
|
|
(31.7)
|
|
(64.1)
|
|
94.6
|
|
1,072.1
|
Net income
|
|
-
|
|
-
|
|
447.4
|
|
-
|
|
1.5
|
|
448.9
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
(43.3)
|
|
(4.7)
|
|
(48.0)
|
Dividends
|
|
-
|
|
-
|
|
(151.3)
|
|
-
|
|
(0.2)
|
|
(151.5)
|
Repurchase of Class B
Shares
|
|
(27.7)
|
|
-
|
|
(115.7)
|
|
-
|
|
-
|
|
(143.4)
|
Balance as of
September 30, 2020
|
$
|
1,028.2
|
$
|
17.4
|
$
|
148.7
|
$
|
(107.4)
|
$
|
91.2
|
$
|
1,178.1
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
Three months
ended
|
|
Nine months
ended
|
(unaudited)
|
|
September
30
|
|
September
30
|
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
143.5
|
$
|
182.7
|
|
$
|
415.1
|
$
|
410.5
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
|
149.5
|
|
148.4
|
|
|
455.3
|
|
450.2
|
Amortization of
intangible assets
|
|
|
37.0
|
|
29.7
|
|
|
107.2
|
|
87.1
|
Amortization of
right-of-use assets
|
|
|
9.4
|
|
8.9
|
|
|
27.2
|
|
26.8
|
Loss (gain) on
valuation and translation of financial instruments
|
|
|
18.6
|
|
(6.0)
|
|
|
(8.9)
|
|
(8.1)
|
Impairment of
assets
|
|
|
7.3
|
|
-
|
|
|
7.3
|
|
18.8
|
Amortization of
financing costs and long-term debt discount
|
|
|
2.0
|
|
2.1
|
|
|
6.1
|
|
6.1
|
Deferred income
taxes
|
|
|
(4.3)
|
|
33.5
|
|
|
(33.3)
|
|
30.3
|
Other
|
|
|
(0.3)
|
|
0.2
|
|
|
(0.1)
|
|
(1.9)
|
|
|
|
362.7
|
|
399.5
|
|
|
975.9
|
|
1,019.8
|
Net change in
non-cash balances related to operating activities
|
|
|
(23.3)
|
|
(20.5)
|
|
|
78.6
|
|
(171.1)
|
Cash flows provided
by continuing operating activities
|
|
|
339.4
|
|
379.0
|
|
|
1,054.5
|
|
848.7
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
|
Business
acquisitions
|
|
|
-
|
|
(1.0)
|
|
|
(10.8)
|
|
(35.6)
|
Business
disposals
|
|
|
-
|
|
-
|
|
|
-
|
|
260.7
|
Additions to
property, plant and equipment
|
|
|
(138.1)
|
|
(122.6)
|
|
|
(324.8)
|
|
(377.3)
|
Additions to
intangible assets
|
|
|
(34.3)
|
|
(66.4)
|
|
|
(185.1)
|
|
(424.5)
|
Proceeds from
disposals of assets
|
|
|
1.4
|
|
0.5
|
|
|
3.6
|
|
3.2
|
Other
|
|
|
(48.5)
|
|
(17.8)
|
|
|
(51.4)
|
|
(25.0)
|
Cash flows used in
continuing investing activities
|
|
|
(219.5)
|
|
(207.3)
|
|
|
(568.5)
|
|
(598.5)
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
|
(5.4)
|
|
6.9
|
|
|
(14.2)
|
|
4.0
|
Net change under
revolving facilities
|
|
|
10.3
|
|
251.3
|
|
|
(124.9)
|
|
281.3
|
Repayment of
long-term debt
|
|
|
(0.4)
|
|
(435.4)
|
|
|
(1.0)
|
|
(443.4)
|
Repayment of lease
liabilities
|
|
|
(10.8)
|
|
(9.4)
|
|
|
(31.3)
|
|
(29.9)
|
Settlement of hedging
contracts
|
|
|
-
|
|
91.6
|
|
|
(0.8)
|
|
90.8
|
Issuance of Class B
Shares
|
|
|
-
|
|
-
|
|
|
-
|
|
2.7
|
Repurchase of Class B
Shares
|
|
|
(47.8)
|
|
(41.0)
|
|
|
(143.4)
|
|
(80.5)
|
Dividends
|
|
|
(50.1)
|
|
(28.7)
|
|
|
(151.3)
|
|
(71.6)
|
Dividends paid to
non-controlling interests
|
|
|
-
|
|
-
|
|
|
(0.2)
|
|
-
|
Cash flows used in
continuing financing activities
|
|
|
(104.2)
|
|
(164.7)
|
|
|
(467.1)
|
|
(246.6)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided
by continuing operations
|
|
|
15.7
|
|
7.0
|
|
|
18.9
|
|
3.6
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided
by (used in) discontinued operations
|
|
|
-
|
|
-
|
|
|
7.8
|
|
(0.7)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
|
25.0
|
|
17.2
|
|
|
14.0
|
|
21.3
|
Cash and cash
equivalents at end of period
|
|
$
|
40.7
|
$
|
24.2
|
|
$
|
40.7
|
$
|
24.2
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
39.5
|
$
|
15.7
|
|
$
|
39.5
|
$
|
15.7
|
Cash
equivalents
|
|
|
1.2
|
|
8.5
|
|
|
1.2
|
|
8.5
|
|
|
$
|
40.7
|
$
|
24.2
|
|
$
|
40.7
|
$
|
24.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
|
$
|
41.3
|
$
|
45.5
|
|
$
|
198.5
|
$
|
203.3
|
Cash income tax
payments (net of refunds)
|
|
|
70.7
|
|
54.2
|
|
|
93.6
|
|
235.0
|
QUEBECOR
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
(unaudited)
|
|
|
September
30
|
|
|
December
31
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
40.7
|
|
$
|
14.0
|
Accounts
receivable
|
|
|
596.1
|
|
|
548.0
|
Contract
assets
|
|
|
164.9
|
|
|
160.3
|
Income
taxes
|
|
|
5.6
|
|
|
19.1
|
Inventories
|
|
|
211.4
|
|
|
240.4
|
Other current
assets
|
|
|
115.0
|
|
|
121.2
|
|
|
|
1,133.7
|
|
|
1,103.0
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
3,281.4
|
|
|
3,415.9
|
Intangible
assets
|
|
|
1,509.9
|
|
|
1,444.0
|
Goodwill
|
|
|
2,692.9
|
|
|
2,692.9
|
Right-of-use
assets
|
|
|
137.2
|
|
|
110.4
|
Derivative financial
instruments
|
|
|
800.2
|
|
|
679.8
|
Deferred income
taxes
|
|
|
44.5
|
|
|
31.2
|
Other
assets
|
|
|
289.0
|
|
|
248.7
|
|
|
|
8,755.1
|
|
|
8,622.9
|
Total
assets
|
|
$
|
9,888.8
|
|
$
|
9,725.9
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
indebtedness
|
|
$
|
15.2
|
|
$
|
29.4
|
Accounts payable,
accrued charges and provisions
|
|
|
784.2
|
|
|
809.6
|
Deferred
revenue
|
|
|
326.2
|
|
|
332.7
|
Income
taxes
|
|
|
78.1
|
|
|
4.2
|
Current portion of
long-term debt
|
|
|
30.6
|
|
|
57.2
|
Current portion of
lease liabilities
|
|
|
34.3
|
|
|
31.3
|
|
|
|
1,268.6
|
|
|
1,264.4
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
|
5,908.8
|
|
|
5,900.3
|
Derivative financial
instruments
|
|
|
1.6
|
|
|
2.1
|
Convertible
debentures
|
|
|
150.0
|
|
|
150.0
|
Lease
liabilities
|
|
|
133.7
|
|
|
106.6
|
Deferred income
taxes
|
|
|
824.1
|
|
|
859.2
|
Other
liabilities
|
|
|
423.9
|
|
|
371.2
|
|
|
|
7,442.1
|
|
|
7,389.4
|
Equity
|
|
|
|
|
|
|
Capital
stock
|
|
|
1,028.2
|
|
|
1,055.9
|
Contributed
surplus
|
|
|
17.4
|
|
|
17.4
|
Retained earnings
(deficit)
|
|
|
148.7
|
|
|
(31.7)
|
Accumulated other
comprehensive loss
|
|
|
(107.4)
|
|
|
(64.1)
|
Equity
attributable to shareholders
|
|
|
1,086.9
|
|
|
977.5
|
Non-controlling
interests
|
|
|
91.2
|
|
|
94.6
|
|
|
|
1,178.1
|
|
|
1,072.1
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
|
9,888.8
|
|
$
|
9,725.9
|
View original
content:http://www.prnewswire.com/news-releases/quebecor-inc-reports-consolidated-results-for-third-quarter-2020-301166734.html
SOURCE Quebecor