Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B) today reported its financial results for
the third quarter of 2008. Quebecor consolidates the financial results of its
Quebecor Media Inc. subsidiary, in which it holds a 54.7% interest.
Highlights since end of second quarter 2008
- Quebecor's third quarter 2008 revenues amount to $908.1 million, up $73.5
million (8.8%) from third quarter 2007.
- Operating income(1): up $20.6 million (8.0%) to $277.5 million in the third
quarter of 2008.
- Net income: $45.6 million ($0.70 per basic share), compared with $35.2 million
net loss ($0.55 per basic share), an $80.8 million ($1.25 per basic share)
improvement.
- Adjusted income from continuing operations:(2) up $0.3 million to $42.4
million ($0.65 per basic share) in third quarter 2008.
- Cable segment: operating income(1) up $28.7 million (16.7%).
Quarter-over-quarter net customer growth: +55,000 for cable telephone service,
+42,500 for cable Internet access, +31,500 for all cable television services
combined (including 46,200 customer increase for illico Digital TV), +4,000
activated phones for wireless telephone service.
- Advanced Wireless Services ("AWS") network: Quebecor Media confirms plans to
invest between $800.0 million and $1.0 billion in new network over next four
years, including $554.6 million already disbursed for the purpose of acquiring
17 operating licences.
"In a challenging business environment, Quebecor posted strong third quarter
2008 results, driven by its Cable segment, which continued logging substantial
customer growth for all services," said Pierre Karl Peladeau, President and
Chief Executive Officer of Quebecor. "Our cable subsidiary is positioned to
further enhance the quality of its line of cable television and
telecommunications services. To this end, Quebecor Media will invest between
$800.0 million and $1.0 billion over four years to build its own AWS network,
including the amounts already disbursed. Videotron will be able to bring
consumers and small businesses in its service area a superior offering of
advanced wireless services, based on reliable, cutting-edge technology,
exclusive original content, and competitive, straightforward pricing.
"Quebecor Media has already arranged the funding needed to acquire the AWS
licences," Mr. Peladeau noted. "In these times of tight credit markets, it is
important to mention that future investment in this project does not rely on
access to capital markets; it will be funded through cash flow generation and
available credit facilities."
(1) See "Operating income" under "Definitions".
(2) See "Adjusted income from continuing operations" under "Definitions".
"While the results are still highly favourable, we must note the disappointing
results in publishing and at Sun Media," said Mr. Peladeau. "To maximize
opportunities for growth, to capture synergies and to facilitate the repurposing
of the information and content generated by our publications for multiple
platforms, we will place the operations of Sun Media and Canoe under the
responsibility of one manager."
Quebecor Inc.
Third quarter financial highlights - 2004 to 2008
(in millions of Canadian dollars, except per share data)
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2008 2007 2006 2005 2004
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Revenues $908.1 $834.6 $718.6 $649.1 $588.2
Operating income(a) 277.5 256.9 192.9 175.1 169.8
Net income (loss) 45.6 (35.2) 33.8 22.6 41.0
Adjusted income from
continuing operations
((b),(c)) 42.4 42.1 25.6 17.5 9.9
Per share data
Net income (loss) 0.70 (0.55) 0.53 0.35 0.63
Adjusted income from
continuing operations
((b),(c)) 0.65 0.65 0.40 0.27 0.15
(a) See "Operating income" under "Definitions".
(b) See "Quebecor Inc. - Discontinued operations".
(C) See "Adjusted income from continuing operations" under "Definitions".
Analysis of third quarter 2008 operating results
- Quebecor's consolidated revenues from continuing operations rose $73.5
million (8.8%) to $908.1 million in the third quarter of 2008. Revenues
increased mainly in the following segments:
- Cable (by $58.0 million or 14.7% of segment revenues) reflecting
continued customer growth for all services;
- Newspapers ($11.3 million or 4.4%) due primarily to the impact of the
acquisition of Osprey Media Income Fund (Osprey Media) in August 2007.
- Quebecor's operating income from continuing operations grew $20.6 million
(8.0%) to $277.5 million due mainly to an increase in the Cable segment
($28.7 million or 16.7% of segment operating income) resulting primarily
from customer growth.
- Quebecor's net income was $45.6 million ($0.70 per basic share) in the
third quarter of 2008, compared with a net loss of $35.2 million ($0.55
per basic share) in the same quarter of 2007. The increase of $80.8
million ($1.25 per basic share) was mainly due to:
- $115.5 million favourable variance related to operating results of
discontinued operations(3);
- $20.6 million increase in operating income.
Partially offset by:
- $43.5 million unfavourable variance in gains and losses on valuation
and translation of financial instruments;
- $7.6 million increase in financial expenses related primarily to
increased indebtedness;
- $4.5 million increase in amortization charges.
- Adjusted income from continuing operations totalled $42.4 million in
the third quarter of 2008 ($0.65 per basic share), compared with
$42.1 million ($0.65 per basic share) in the same period of 2007, a
$0.3 million increase.
(3) See "Quebecor Inc. - Discontinued operations".
Analysis of year-to-date operating results
- Quebecor's consolidated revenues from continuing operations increased
$326.5 million (13.6%) to $2.73 billion. Revenues increased mainly in
Cable (by $205.4 million or 18.3% of segment revenues) and Newspapers
($124.1 million or 17.2%) essentially due, in those two cases, to the
same factors as those noted above in the discussion of the third quarter
results, and in Broadcasting ($18.4 million or 6.3%).
- Quebecor generated operating income from continuing operations totalling
$810.9 million, an increase of $139.7 million (20.8%). Operating income
increased mainly in Cable (by $112.1 million or 24.0% of segment
operating income), Newspapers ($21.2 million or 14.2%) and Broadcasting
($7.3 million or 19.9%)
- Net income was $531.0 million ($8.25 per basic share) in the first nine
months of 2008, compared with a net loss of $6.6 million ($0.10 per basic
share) in the same period of 2007. The increase of $537.6 million ($8.35
per basic share) was mainly due to:
- $523.3 million favourable variance in operating results of discontinued
operations(4);
- $139.7 million increase in operating income;
- $10.4 million decrease in reserve for restructuring of operations and
other special charges.
Partially offset by:
- $47.5 million increase in financial expenses;
- $44.0 million increase in income tax expense;
- $26.5 million increase in non-controlling interest;
- $20.8 million increase in amortization charge.
- Adjusted income from continuing operations amounted to $118.1 million
($1.84 per basic share) in the first nine months of 2008, compared with
$96.2 million ($1.49 per basic share) in the same period of 2007, an
increase of $21.9 million ($0.35 per basic share) or 22.8%.
Dividend
On November 6, 2008, the Board of Directors of Quebecor Inc. declared a
quarterly dividend of $0.05 per share on Class A Multiple Voting Shares and
Class B Subordinate Voting Shares, payable on December 16, 2008 to shareholders
of record at the close of business on November 21, 2008.
(4) See "Quebecor Inc. - Discontinued operations".
Quebecor Inc. -- Discontinued operations
On January 21, 2008, Quebecor World Inc. and its U.S. subsidiaries were granted
creditor protection under the Companies' Creditors Arrangement Act in Canada. On
the same date, its U.S. subsidiaries also filed a petition under Chapter 11 of
the United States Bankruptcy Code. Since that date, in accordance with generally
accepted accounting principles, Quebecor's investment in Quebecor World has no
longer been consolidated, Quebecor's investment in Quebecor World has been
valued at zero, and Quebecor World's activities are considered discontinued
operations for the purposes of Quebecor's consolidated financial statements.
Quebecor World's operating results have been restated and are reported in the
financial statements under the item "Income (loss) from discontinued
operations," and the cash flows provided by these operations have been restated
and are reported in the financial statements under the item "Cash flows (used
in) provided by discontinued operations."
The results of discontinued operations include the $17.7 million net loss (net
of non-controlling interest) recognized by Quebecor World for the period of
January 1 to 21, 2008, compared with a net loss of $142.9 million (net of
non-controlling interest) reported in the first nine months of 2007.
At January 21, 2008, the Company's consolidated balance sheet included a net
asset deficiency of $761.3 million, representing the excess of the liabilities
and non-controlling interest related to Quebecor World over Quebecor World's
assets. At January 21, 2008, the Company also had net losses accumulated in
other comprehensive income in the amount of $326.5 million, net of income tax,
consisting primarily in accumulated currency translation losses in connection
with the net investment in Quebecor World. Therefore, the results of
discontinued operations for the first quarter of 2008 also include a net gain of
$399.7 million in respect of the difference between the reversal of the net
asset deficiency and the reclassification in the results of the net losses
accumulated in other comprehensive income as of the deconsolidation date,
January 21, 2008, net of the $35.1 million decrease in future income tax assets
related to the investment in Quebecor World.
These procedures will have no material impact on the operations of Quebecor Media.
Detailed financial information
For a detailed analysis of Quebecor Inc.'s results for the third quarter of
2008, please refer to the Management Discussion and Analysis and consolidated
financial statements of Quebecor Inc., available on the Company's website at
http://www.quebecor.com/InvestorCenter/QIQuarterlyReports.aspx or from the SEDAR
filing service at http://www.sedar.com.
Conference call for investors and webcast
Quebecor Inc. will hold a conference call to discuss the third quarter 2008
results of Quebecor and Quebecor Media on November 7, 2008, at 9:30 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 7746798#. A tape
recording of the call will be available from November 7 through December 7,
2008, by dialling 1 877 293-8133, access code 724757#. The conference call will
also be broadcast live on the Quebecor Inc. website at
www.quebecor.com/InvestorCenter/QIConferenceCall.aspx. 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.
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 which could cause Quebecor's actual results
for future periods to differ materially from those set forth in the
forward-looking statements. Forward-looking statements may be identified by the
use of the conditional or by forward-looking terminology such as the terms
"plans," "expects," "may," "anticipates," "intends," "estimates," "projects,"
"seeks," "believes" or similar terms, variations of such terms or the negative
of such terms. Certain factors that may cause actual results to differ from
current expectations include seasonality (including seasonal fluctuations in
customer orders), operating risk (including fluctuations in demand for
Quebecor's products and pricing actions by competitors), insurance risk, risks
associated with capital investment (including risks related to technological
development and equipment availability and breakdown), environmental risks,
risks associated with labour agreements, risks associated with commodities and
energy prices (including fluctuations in the cost and availability of raw
materials), credit risk, financial risks, debt risks, risks related to interest
rate fluctuations, foreign exchange risks, risks associated with government acts
and regulations, risks related to changes in tax legislation, and changes in the
general political and economic environment. Investors and others are cautioned
that the foregoing list of factors that may affect future results is not
exhaustive and that undue reliance should not be placed on any forward-looking
statements. For more information on the risks, uncertainties and assumptions
that could cause Quebecor's actual results to differ from current expectations,
please refer to Quebecor Inc.'s public filings available at www.sedar.com and
www.quebecor.com including, in particular, the "Risks and Uncertainties" section
in Quebecor Inc.'s Management Discussion and Analysis for the year ended
December 31, 2007.
The forward-looking statements in this press release reflect Quebecor's
forecasts as of August 5, 2008, and are subject to change after that date.
Quebecor expressly disclaims any obligation or intention to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable securities laws.
The Company
Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B) is a holding company with a 54.7% interest
in Quebecor Media Inc, one of Canada's largest media groups. Quebecor Media owns
operating companies in numerous media-related businesses: Videotron Ltd., the
largest cable operator in Quebec and a major Internet Service Provider and
provider of telephone and business telecommunications services; Sun Media
Corporation, the largest publisher of newspapers in Canada; TVA Group Inc.,
operator of the largest French-language over-the-air television network in
Quebec, a number of specialty channels, and the English-language over-the-air
station Sun TV; Canoe Inc., operator of a network of English- and
French-language Internet properties in Canada; Nurun Inc., a major interactive
technologies and communications agency with offices in Canada, the United
States, Europe and Asia; magazine publisher TVA Publishing Inc.; book publisher
and distributor Quebecor Media Book Group Inc.; Archambault Group Inc. and TVA
Films, companies engaged in the production, distribution and retailing of
cultural products; Le SuperClub Videotron ltee, a DVD and console game rental
and retail chain; and Quebecor MediaPages, publisher of print and online
directories.
SEGMENTED ANALYSIS
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Quebecor Media Inc.
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Summary of results
(in millions of Canadian dollars)
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Three months ended Nine months ended
September 30 September 30
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2008 2007 2008 2007
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Revenues $908.1 $834.6 $2,727.5 $2,401.0
Operating income 274.9 253.6 809.1 676.7
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Third quarter revenues and operating income - 2004 to 2008
(in millions of Canadian dollars)
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2008 2007 2006 2005 2004
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Revenues $908.1 $834.6 $718.6 $649.1 $588.2
Operating income 274.9 253.6 195.2 174.9 169.6
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Cable segment
Third quarter 2008
Revenues: $452.6 million, an increase of $58.0 million (14.7%).
- Combined revenues from all cable television services increased $17.8
million (9.6%) to $203.0 million due to the impact of customer base
growth, the favourable impact of the increase in the illico Digital TV
customer base on revenues from illico on Demand, pay TV, pay-per-view and
set-top boxes, and subscriber growth for the high definition ("HD")
package.
- Revenues from the illico Digital TV service, excluding related
services, increased $18.6 million (21.3%) to $106.1 million. The
performance of illico Digital TV was partially offset by decreased
revenues from analog cable television services.
- Revenues from Internet access services increased $17.0 million (16.0%) to
$123.3 million. The improvement was mainly due to customer growth, as
well as heavier consumption.
- Revenues from cable telephone service increased $20.7 million (39.8%) to
$72.7 million, primarily because of customer growth as well as higher
long-distance revenues.
- Revenues from wireless telephone service increased $2.9 million (54.7%)
to $8.2 million, mainly due to customer growth.
- Revenues of Le SuperClub Videotron ltee decreased $0.5 million (-3.5%) to
$13.6 million.
Monthly ARPU: $81.01, compared with $72.66 in the same quarter of 2007, an
increase of $8.35 (11.5%).
Customer statistics - Net customer growth in third quarter 2008:
- cable telephone service: +55,000 (+70,100 in 2007);
- cable Internet access: +42,500 (+45,000 in 2007);
- all cable television services combined (i.e., net increase for analog
service and illico Digital TV): +31,500 (+31,800 in 2007), including
46,200 more customers for illico Digital TV (+41,200 in 2007);
- wireless telephone service: +4,000 activated phones (+8,000 in 2007).
Cable segment end-of-quarter customer numbers since end of December 2006
(in thousands of customers)
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Sept. June Mar.
2008 2008 2008
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Cable television:
Analog 814.8 829.5 849.4
Digital 876.7 830.5 802.8
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Total cable television 1,691.5 1,660.0 1,652.2
Cable Internet 1,031.4 988.9 965.3
Cable telephone 797.9 742.9 691.6
Wireless telephone 58.6 54.6 49.9
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Dec. Sept. June Mar. Dec.
2007 2007 2007 2007 2006
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Cable television:
Analog 869.9 896.0 905.4 929.8 948.8
Digital 768.2 720.3 679.1 652.9 623.6
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Total cable television 1,638.1 1,616.3 1,584.5 1,582.7 1,572.4
Cable Internet 933.0 898.9 853.9 827.9 792.0
Cable telephone 636.4 573.8 503.7 448.7 397.8
Wireless telephone 45.1 38.7 30.7 20.3 11.8
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Operating income: $201.0 million in the third quarter of 2008, an increase
of $28.7 million (16.7%).
- The increase was due primarily to:
- customer growth for all services;
- increases in long-distance telephone volume and revenues;
- $7.0 million favourable variance in expenses related to Quebecor
Media's stock option plan, which are charged to its operating segments
as a direct charge, to reflect participation by segment managers in the
plan, and as management fees;
Partially offset by:
- unfavourable variance of $11.4 million related to reversal in the third
quarter of 2007 of current Canadian Radio-television and
Telecommunications Commission ("CRTC") Part II licence fee accruals
following the notice issued on October 1, 2007 confirming the CRTC's
intention not to collect the fees due on November 30, 2007, in view of
a Federal Court decision. However, the Federal Court of Appeal
overturned the Federal Court decision on April 29, 2008.
- Excluding the favourable variation in the stock option expense, and if
the figures for prior periods are restated to reflect the Part II licence
fee adjustment, the segment's operating income increased 19.4% in the
third quarter of 2008, compared with 25.1% in the same quarter of 2007.
Year-to-date
Revenues: $1.33 billion, an increase of $205.4 million (18.3%) essentially
due to the same factors as those noted above in the discussion of third
quarter results.
Customer statistics - Net customer growth in first nine months of 2008:
- cable telephone service: +161,500 (+176,000 in 2007);
- cable Internet access: +98,400 (+106,900 in 2007);
- all cable television services combined (i.e., net increase for analog
service and illico Digital TV): +53,400 (+43,900 in 2007), including
108,500 more customers for illico Digital TV (+96,700 in 2007);
- wireless telephone service: +13,500 activated phones (+26,900 in 2007).
Operating income: $579.1 million, an increase of $112.1 million (24.0%).
- The increase was due primarily to:
- customer growth for all services;
- increases in some rates, consumption and long-distance telephone calls;
- $26.0 million favourable variance in expenses related to Quebecor
Media's stock option plan.
Partially offset by:
- unfavourable variance of $25.9 million related to recognition in the
second quarter of 2008 of a retroactive charge for CRTC Part II licence
fees following the Federal Court of Appeal decision of April 29, 2008
overturning the Federal Court decision on these fees. The Federal Court
judgement had been favourable to Quebecor Media and had led to the
reversal, in the third quarter of 2007, of current Part II licence fee
accruals.
- Excluding the favourable variation in the stock option expense, and if
the figures for prior periods are restated to reflect the Part II licence
fee adjustment, the segment's operating income increased 23.1% in the
first nine months of 2008, compared with 27.3% in the same period of
2007.
Newspapers segment
Third quarter 2008
Revenues: $270.8 million, an increase of $11.3 million (4.4%).
- Osprey Media, the acquisition of which closed in August 2007, generated
revenues of $52.4 million from July through September 2008, compared with
$35.9 million in August and September 2007, for a third-quarter increase
of $16.5 million.
- Excluding the impact of that acquisition, the Newspapers segment's total
revenues decreased $5.2 million (-2.3%) in the third quarter of 2008:
advertising revenues decreased 3.2%, circulation revenues were flat, and
combined revenues from commercial printing and other sources increased
3.5%.
- The revenues of the urban dailies decreased 1.3% in the third quarter of
2008; excluding the acquisition of Osprey Media, the revenues of the
community newspapers increased 0.6%.
- In the urban dailies group, the revenues of the free dailies increased
12.1%.
Operating income: $52.1 million, a decrease of $8.0 million (-13.3%).
- Osprey Media generated operating income of $10.0 million from July
through September 2008, compared with $9.3 million in August and
September 2007, for a third-quarter increase of $0.7 million.
- Excluding the impact of Osprey Media, operating income decreased
$8.7 million (-17.1%) in the Newspapers segment
- The decrease was due primarily to:
- impact of the decrease in revenues, on a comparable basis;
- wage indexing and certain unusual payroll expenses, including charges
related to the transition plan for printing facilities in Ontario and
Quebec;
- expenditures related to the start-up of Quebecor MediaPages.
Partially offset by:
- $4.0 million favourable variance related to the stock option expense.
Year-to-date
Revenues: $845.7 million, an increase of $124.1 million (17.2%) due mainly
to the impact of the acquisition of Osprey Media ($123.6 million), which
closed in August 2007.
Operating income: $170.5 million, an increase of $21.2 million (14.2%).
- Osprey Media generated operating income of $34.8 million from January
through September 2008, compared with $9.3 million in August and
September 2007, for a year-to-date increase of $25.5 million.
- Excluding the impact of Osprey Media, operating income decreased
$4.3 million (-3.1%) in the Newspapers segment.
- The decrease was due primarily to:
- impact of the decrease in advertising revenues (-1.3%) and circulation
revenues (-5.3%), on a comparable basis;
- wage indexing and certain unusual payroll expenses, including charges
related to the transition plan for printing facilities in Ontario and
Quebec;
- expenditures related to the start-up of Quebecor MediaPages.
Partially offset by:
- $10.4 million favourable impact related to the Quebecor Media stock
option plan expense;
- $8.9 million decrease in newsprint costs.
- The combined operating losses of the free dailies decreased 16.5% in the
first nine months of 2008 compared with the same period of 2007.
Broadcasting segment
Third quarter 2008
Revenues: $92.3 million, an increase of $0.7 million (0.8%).
- Revenues from broadcasting operations increased $3.6 million, mainly
because of:
- higher revenues from video on demand and other revenues at the TVA
Network;
- higher subscription revenues and advertising revenues at the specialty
channels (Mystere, ARGENT, Prise 2, LCN, mentv, Mystery and Les idees
de ma maison).
- Distribution revenues decreased $1.2 million, mainly as a result of a
decrease in video revenues and sales of television products in comparison
with the same period of 2007.
- Publishing revenues decreased $2.1 million, essentially because of lower
advertising and newsstand revenues.
Operating income: $10.8 million, a decrease of $1.0 million (-8.5%);
excluding the unfavourable impact of the reversal in the third quarter of
2007 of current CRTC Part II licence fee accruals, operating income
increased $2.2 million.
- Operating income from broadcasting operations increased $1.2 million
because of favourable impacts from:
- increased revenues at the specialty channels;
- lower content costs at the TVA Network and Sun TV;
- decrease in selling and administrative expenses at the TVA Network.
Partially offset by:
- unfavourable variance of $3.2 million related to reversal in the third
quarter of 2007 of current CRTC Part II licence fee accruals following
the notice issued on October 1, 2007 confirming the CRTC's intention
not to collect the fees due on November 30, 2007, in view of a Federal
Court decision. However, the Federal Court of Appeal overturned the
Federal Court decision on April 29, 2008.
- Operating income from distribution operations decreased by $1.8 million,
mainly as a result of the decrease in revenues and promotional expenses
for theatrical releases scheduled for the fourth quarter of 2008.
- Operating income from publishing operations decreased $0.5 million,
mainly because of the decrease in revenues.
Year-to-date
Revenues: $309.8 million, an increase of $18.4 million (6.3%).
- Revenues from broadcasting operations increased $18.4 million, mainly
because of:
- higher advertising, video on demand and other revenues at the TVA
Network;
- higher advertising and subscription revenues at the specialty channels;
- higher revenues from the Internet, commercial production and Shopping
TVA.
- Distribution revenues decreased $0.8 million, primarily as a result of
lower theatrical and video revenues, partially offset by increased sales
of television products.
- Publishing revenues decreased $0.8 million, primarily as a result of
decreases in advertising and newsstand revenues, partially offset by an
increase in custom publishing operations.
Operating income: $43.9 million, an increase of $7.3 million (19.9%);
excluding the unfavourable impact of the reversal in the third quarter of
2007 of current CRTC Part II licence fee accruals following the favourable
Federal Court decision and the recognition in the second quarter of 2008 of
a retroactive charge for licence fees following the unfavourable decision
by the Federal Court of Appeal, operating income increased $14.7 million.
- Operating income from broadcasting operations increased $5.6 million,
mainly because of:
- impact of revenue growth at the TVA Network, the specialty channels and
Sun TV;
- decrease in selling and administrative expenses at the TVA Network.
Partially offset by:
- unfavourable variance of $7.4 million related to recognition in the
second quarter of 2008 of a retroactive charge for CRTC Part II licence
fees following the Federal Court of Appeal decision of April 29, 2008
overturning the Federal Court decision on these fees. The Federal Court
judgement had been favourable to Quebecor Media and had led to the
reversal, in the third quarter of 2007, of current Part II licence fee
accruals.
- Operating income from distribution operations showed a $0.3 million
improvement, mainly as a result of the impact of higher sales of
television products and costs related to a larger number of film releases
in the first nine months of 2007 than the same period of 2008, partially
offset by lower video revenues.
- Operating income from publishing operations increased by $1.2 million,
mainly as a result of the decrease in advertising, marketing and
distribution expenses, partially offset by the unfavourable impact of the
decrease in revenues.
Leisure and Entertainment segment
Third quarter 2008
Revenues: $75.2 million, a decrease of $4.4 million (- 5.5%).
- 7.3% decrease in revenues at Quebecor Media Book Group Inc., due
primarily to lower distribution volume in the third quarter of 2008 than
in the same quarter of 2007 and decreased sales in the academic segment.
- 3.1% decrease in revenues at Archambault Group Inc. The impact of higher
broadcast revenues due to the success of the Paul McCartney concert
during Quebec City's 400th anniversary celebration, and higher sales at
Archambault stores, essentially due to the opening of a store in Laval,
Quebec, was outweighed by a decrease in revenues due to the transfer of
video on demand operations to the Cable segment.
Operating income: $8.8 million, a decrease of $0.3 million (-3.3%) compared
with the third quarter of 2007 due primarily to a decrease in gross margin
on retail sales and higher operating expenses at Archambault Group,
combined with a decrease in sales at Quebecor Media Book Group.
Year-to-date
Revenues: $201.5 million, a decrease of $24.9 million (-11.0%).
Operating income: $9.4 million, a decrease of $7.3 million (-43.7%).
Interactive Technologies and Communications segment
Third quarter 2008
Revenues: $21.6 million, an increase of $2.6 million (13.7%).
- The increase was due mainly to:
- impact of increased volumes from customers in Europe, particularly
France and Italy, as well as in Asia and Canada, and from government
customers in Quebec, partially offset by a decrease in volume in the
United States.
Operating income: $1.0 million, a decrease of $0.4 million (-28.6%)
- The decrease was mainly due to:
- impact of the decrease in revenues in the United States., combined with
increases in some market development costs in that country;
- unfavourable variance due to the impact of changes to Nurun Inc.'s
stock option plan in the third quarter of 2007.
Partially offset by:
- impact of increased revenues in Canada, Europe and Asia, and from
government customers in Quebec.
Year-to-date
Revenues: $65.6 million, an increase of $3.7 million (6.0%).
Operating income: $2.1 million, a decrease of $0.7 million (-25.0%).
Internet/Portals segment
Third quarter 2008
Revenues: $13.1 million, an increase of $1.6 million (13.9%).
- 21.6% increase in revenues at the general-interest portals, due mainly to
website creation and maintenance, including the sites of affiliated
companies, and higher advertising revenues.
- 10.2% increase in revenues at special-interest portals, primarily
attributable to revenue growth at the autonet.ca site resulting mainly
from the acquisition of ASL Ltd.
Operating income: $0.5 million, a decrease of $0.5 million (-50.0%) due
mainly to the increase in operating expenses, including advertising
expenses and investment in new products.
Year-to-date
Revenues: $38.3 million, an increase of $3.7 million (10.7%).
Operating income: $1.8 million, a decrease of $2.3 million (-56.1%).
Advanced Wireless Services
On September 10, 2008, Quebecor Media confirmed its intention to invest between
$800.0 million and $1.0 billion in its Advanced Wireless Services network over
the next four years, including the cost of building out its network in Quebec,
projected operating losses in the first years of commercial operation, and
$554.6 million already disbursed for the purpose of acquiring 17 operating
licences. Quebecor Media plans to finance future disbursements from funds
generated by operations.
The money will be used to create a new High Speed Packet Access (HSPA) network,
which is expected to be operational in 12 to 18 months. Nokia Siemens Networks
has been selected to be Videotron's supplier for the next five years.
DEFINITIONS
Operating income
In its analysis of operating results, the Company defines operating income
(loss), as reconciled to net income (loss) under Canadian GAAP, as net income
(loss) before amortization, financial expenses, gain on valuation and
translation of financial instruments, reserve for restructuring of operations
and other special charges, income tax, non-controlling interest and the results
of discontinued operations. Operating income as defined above is not a measure
of results that is consistent with Canadian GAAP. 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 Canadian GAAP. Management believes that operating income is a
meaningful measure of performance. The Company uses operating income in order to
assess the performance of its investment in Quebecor Media. The Company's
management and Board of Directors use this measure in evaluating its
consolidated results as well as the results of the Company's operating segments.
This measure eliminates the significant level of non-cash depreciation of
tangible assets and amortization of certain intangible assets, and is unaffected
by the capital structure or investment activities of the Company and its
segments. Operating income is also relevant because it is a significant
component of the Company's annual incentive compensation programs. A limitation
of this measure, however, is that it does not reflect the periodic costs of
capitalized tangible and intangible assets used in generating revenues in the
Company's segments. The Company also uses other measures that do reflect such
costs, such as cash flows from segment operations and free cash flows from
operations. In addition, measures like operating income are commonly used by the
investment community to analyze and compare the performance of companies in the
industries in which the Company is engaged. The Company's definition of
operating income may not be the same as similarly titled measures reported by
other companies. The following table reconciles Quebecor's operating income with
the closest Canadian GAAP measure.
Reconciliation of the operating income measure used in this press release
to the net income (loss) measure used in the consolidated financial
statements
(in millions of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Operating income:
Cable $201.0 $172.3 $579.1 $467.0
Newspapers 52.1 60.1 170.5 149.3
Broadcasting 10.8 11.8 43.9 36.6
Leisure and
Entertainment 8.8 9.1 9.4 16.7
Interactive
Technologies and
Communications 1.0 1.4 2.1 2.8
Internet/Portals 0.5 1.0 1.8 4.1
Head office 3.3 1.2 4.1 (5.3)
-------------------------------------------------------------------------
277.5 256.9 810.9 671.2
Amortization (77.5) (73.0) (235.9) (215.1)
Financial expenses (74.0) (66.4) (227.0) (179.5)
Gain (loss) on
valuation and
translation of
financial instruments 4.4 47.9 43.6 40.6
Reserve for
restructuring of
operations
and other special
charges (2.0) (3.0) (4.3) (14.7)
Income tax (38.7) (42.9) (109.0) (65.0)
Non-controlling
interest (44.1) (39.2) (130.6) (104.1)
(Loss) income from
discontinued
operations - (115.5) 383.3 (140.0)
-------------------------------------------------------------------------
Net income (loss) $45.6 $(35.2) $531.0 $(6.6)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Adjusted Income from Continuing Operations
The Company defines adjusted income from continuing operations, as reconciled to
net income (loss) under Canadian GAAP, as net income (loss) before gain (loss)
on valuation and translation of financial instruments, reserve for restructuring
of operations and other special charges, and the results of discontinued
operations, net of income tax and non-controlling interest. Adjusted income from
continuing operations as defined above is not a measure of results that is
consistent with Canadian GAAP. It should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with Canadian
GAAP. Management believes that adjusted income from continuing operations is a
meaningful measure that provides an indication of the long-term profitability of
the Company's operating activities by eliminating the impact of unusual or
one-time items. The Company's definition of adjusted income from continuing
operations may not be identical to similarly titled measures reported by other
companies.
The following table provides a reconciliation of adjusted income from continuing
operations to net income (loss), as disclosed in Quebecor's consolidated
financial statements.
Reconciliation of the adjusted income from continuing operations measure
used in this press release to the net income (loss) measure used in the
consolidated financial statements
(in millions of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Adjusted income
from continuing
operations 42.4 42.1 118.1 96.2
Gain on valuation and
translation of
financial instruments 4.4 47.9 43.6 40.6
Reserve for
restructuring of
operations and
other special charges (2.0) (3.0) (4.3) (14.7)
Income tax related to
adjustments(1) 2.5 (4.4) (3.5) 8.8
Non-controlling
interest related to
adjustments (1.7) (2.3) (6.2) 2.5
Income (loss) from
discontinued
operations - (115.5) 383.3 (140.0)
-------------------------------------------------------------------------
Net income (loss) $45.6 $(35.2) $531.0 $(6.6)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Including the impact of tax rate increases, in connection with tax
planning, applicable to adjusted tax benefits.
Average Monthly Revenue per User
Average monthly revenue per user (ARPU) is an industry metric that the Company
uses to measure its average cable, Internet and telephony revenues per month per
basic cable customer. ARPU is not a measurement that is consistent with Canadian
GAAP, and the Company's definition and calculation of ARPU may not be the same
as identically titled measurements reported by other companies. The Company
calculates ARPU by dividing its combined cable television, Internet access and
telephony revenues by the average number of its basic cable customers during the
applicable period, and then dividing the resulting amount by the number of
months in the applicable period.
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars, except for earnings per share data)
Three months ended Nine months ended
(unaudited) September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Revenues
Cable $452.6 $394.6 $1,330.7 $1,125.3
Newspapers 270.8 259.5 845.7 721.6
Broadcasting 92.3 91.6 309.8 291.4
Leisure and
Entertainment 75.2 79.6 201.5 226.4
Interactive
Technologies and
Communications 21.6 19.0 65.6 61.9
Internet/Portals 13.1 11.5 38.3 34.6
Head office and
inter-segment (17.5) (21.2) (64.1) (60.2)
-------------------------------------------------------------------------
908.1 834.6 2,727.5 2,401.0
Cost of sales and
selling and
administrative
expenses 630.6 577.7 1,916.6 1,729.8
Amortization 77.5 73.0 235.9 215.1
Financial expenses 74.0 66.4 227.0 179.5
Gain on valuation and
translation of
financial instruments (4.4) (47.9) (43.6) (40.6)
Reserve for
restructuring of
operations and other
special charges 2.0 3.0 4.3 14.7
-------------------------------------------------------------------------
Income before income
taxes and
non-controlling
interest 128.4 162.4 387.3 302.5
Income taxes:
Current (1.1) 3.5 1.2 1.2
Future 39.8 39.4 107.8 63.8
-------------------------------------------------------------------------
38.7 42.9 109.0 65.0
-------------------------------------------------------------------------
89.7 119.5 278.3 237.5
Non-controlling
interest (44.1) (39.2) (130.6) (104.1)
-------------------------------------------------------------------------
Income from continuing
operations 45.6 80.3 147.7 133.4
Income (loss) from
discontinued
operations - (115.5) 383.3 (140.0)
-------------------------------------------------------------------------
Net income (loss) $45.6 $(35.2) $531.0 $(6.6)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share
Basic
From continuing
operations $0.70 $1.24 $2.29 $2.07
From discontinued
operations - (1.79) 5.96 (2.17)
Net income (loss) 0.70 (0.55) 8.25 (0.10)
Diluted
From continuing
operations 0.70 1.23 2.28 2.07
From discontinued
operations - (1.79) 5.96 (2.17)
Net income (loss) 0.70 (0.56) 8.24 (0.10)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average
number of shares
outstanding
(in millions) 64.3 64.3 64.3 64.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average
number of diluted
shares (in millions) 64.4 64.3 64.4 64.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian dollars)
Three months ended Nine months ended
(unaudited) September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Income from continuing
operations before
amortization, financial
expenses, gain on
valuation and
translation of
financial instruments,
reserve for
restructuring of
operations and other
special charges, income
taxes and
non-controlling
interest
Cable $201.0 $172.3 $579.1 $467.0
Newspapers 52.1 60.1 170.5 149.3
Broadcasting 10.8 11.8 43.9 36.6
Leisure and
Entertainment 8.8 9.1 9.4 16.7
Interactive
Technologies and
Communications 1.0 1.4 2.1 2.8
Internet/Portals 0.5 1.0 1.8 4.1
Head office 3.3 1.2 4.1 (5.3)
-------------------------------------------------------------------------
$277.5 $256.9 $810.9 $671.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Amortization
Cable $57.0 $54.9 $170.5 $163.8
Newspapers 12.3 11.5 42.7 31.1
Broadcasting 3.7 3.2 10.6 9.8
Leisure and
Entertainment 2.2 1.9 5.9 6.0
Interactive
Technologies and
Communications 1.0 0.7 2.9 2.2
Internet/Portals 1.0 0.4 2.5 1.1
Head Office 0.3 0.4 0.8 1.1
-------------------------------------------------------------------------
$77.5 $73.0 $235.9 $215.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Additions to property,
plant and equipment
Cable $92.0 $78.7 $294.1 $235.8
Newspapers 22.6 17.8 63.1 47.7
Broadcasting 8.0 3.4 15.4 9.7
Leisure and
Entertainment 2.0 1.0 5.7 1.4
Interactive
Technologies and
Communications 1.2 1.1 2.6 2.6
Internet/Portals 4.1 0.7 8.3 3.1
Head office 2.7 6.6 10.1 16.9
-------------------------------------------------------------------------
$132.6 $109.3 $399.3 $317.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
Three months ended Nine months ended
(unaudited) September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Net income $45.6 $(35.2) $531.0 $(6.6)
Other comprehensive
income (loss), net
of income taxes
and non-controlling
interest:
Unrealized
(loss) gain on
translation of net
investments in
foreign operations (0.5) (0.3) 0.7 (1.1)
Unrealized gain
(loss) on
derivative
financial
instruments 15.5 1.6 (6.6) 9.7
Other comprehensive
loss from
discontinued
operations - (52.7) - (128.2)
Reclassification to
income of other
comprehensive loss
related to
discontinued
operations - 0.3 326.5 1.5
-------------------------------------------------------------------------
15.0 (51.1) 320.6 (118.1)
-------------------------------------------------------------------------
Comprehensive
income (loss) $60.6 $(86.3) $851.6 $(124.7)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(in millions of Canadian dollars)
Three months ended Nine months ended
(unaudited) September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Balance at beginning
of period, as
previously reported $870.5 $1,416.4 $412.1 $1,385.9
Cumulative effect of
changes in an
accounting policy - - (20.6) -
-------------------------------------------------------------------------
Balance at beginning
of period, as
revised 870.5 1,416.4 391.5 1,385.9
Net income (loss) 45.6 (35.2) 531.0 (6.6)
-------------------------------------------------------------------------
916.1 1,381.2 922.5 1,379.3
Discontinued
operations -
Redemption of
convertible notes - - - 8.3
Dividends (3.2) (3.2) (9.6) (9.6)
-------------------------------------------------------------------------
Balance at end of
period $912.9 $1,378.0 $912.9 $1,378.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
Three months ended Nine months ended
(unaudited) September 30 September 30
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Cash flows related
to operations
Income from
continuing
operations $45.6 $80.3 $147.7 $133.4
Adjustments for:
Amortization of
property, plant
and equipment 71.5 69.0 218.3 206.4
Amortization of
deferred charges
and other assets 6.0 4.0 17.6 8.7
Gain on valuation
and translation
of financial
instruments (4.4) (47.9) (43.6) (40.6)
Amortization of
financing costs
and long-term
debt discount 2.4 1.0 6.7 3.0
Future income
taxes 39.8 39.4 107.8 63.8
Non-controlling
interest 44.1 39.2 130.6 104.1
Other (2.2) 6.0 (0.1) 3.1
-------------------------------------------------------------------------
202.8 191.0 585.0 481.9
Net change in
non-cash balances
related to
operations 38.5 4.0 (118.8) (35.8)
-------------------------------------------------------------------------
Cash flows provided
by continuing
operations 241.3 195.0 466.2 446.1
Cash flows (used in)
provided by
discontinued
operations - (52.0) 20.5 122.1
-------------------------------------------------------------------------
Cash flows provided
by operations 241.3 143.0 486.7 568.2
-------------------------------------------------------------------------
Cash flows related to
investing activities
Business acquisitions,
net of cash and
cash equivalents (8.2) (430.7) (146.7) (436.5)
Business disposals,
net of cash and
cash equivalents 0.4 7.7 1.6 7.7
Additions to
property,
plant and equipment (132.6) (109.3) (399.3) (317.2)
Additions to other
assets (559.9) (0.1) (566.4) (1.4)
Decrease in cash and
cash equivalents in
trust 218.0 1.6 - 4.0
Other 0.8 1.0 2.2 5.6
-------------------------------------------------------------------------
Cash flows used in
continuing
investing
activities (481.5) (529.8) (1,108.6) (737.8)
Cash flows used in
discontinued
investing activities
and cash and cash
equivalents of
Quebecor World Inc.
at the date of
deconsolidation - (32.8) (117.7) (146.4)
-------------------------------------------------------------------------
Cash flows used in
investing activities (481.5) (562.6) (1,226.3) (884.2)
-------------------------------------------------------------------------
Cash flows related
to financing activities
Net increase
(decrease) in bank
indebtedness 0.7 (5.4) 23.8 (15.2)
Issuance of long-term
debt, net of
financing fees 13.8 15.0 463.6 25.3
Net borrowings under
revolving bank
facilities 245.7 513.3 190.9 501.2
Repayments of
long-term debt (8.4) (9.2) (21.3) (19.9)
Repayments of the
Additional Amount
payable - (127.2) - (127.2)
Dividends (3.2) (3.2) (9.6) (9.6)
Dividends paid to
non-controlling
shareholders (12.2) (11.2) (13.7) (23.3)
Other 0.1 (3.9) 2.7 (3.1)
-------------------------------------------------------------------------
Cash flows provided
by continuing
financing
activities 236.5 368.2 636.4 328.2
Cash flows provided
by discontinued
financing activities - 111.3 37.3 104.1
-------------------------------------------------------------------------
Cash flows provided by
financing activities 236.5 479.5 673.7 432.3
-------------------------------------------------------------------------
Net (decrease)
increase in cash
and cash equivalents (3.7) 59.9 (65.9) 116.3
Effect of exchange
rate changes on cash
and cash equivalents
denominated in
foreign currencies 1.3 (28.2) 1.5 (65.3)
Cash and cash
equivalents at
beginning of period 4.5 54.0 66.5 34.7
-------------------------------------------------------------------------
Cash and cash
equivalents at end
of period $2.1 $85.7 $2.1 $85.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash
equivalents consist of
Cash $1.2 $45.4 $1.2 $45.4
Cash equivalents 0.9 40.3 0.9 40.3
-------------------------------------------------------------------------
$2.1 $85.7 $2.1 $85.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Continuing operations
Cash interest
payments $56.1 $56.8 $200.1 $169.1
Cash income tax
payments (net of
refunds) 3.7 (1.4) 19.9 (2.7)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited) September 30 December 31
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 2007
-------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $2.1 $66.5
Cash and cash equivalents in trust 5.5 5.4
Accounts receivable 455.2 1,513.4
Income taxes 9.9 25.9
Inventories and investments in
televisual products and movies 183.1 529.9
Prepaid expenses 39.6 51.1
Future income taxes 118.2 223.7
-------------------------------------------------------------------------
813.6 2,415.9
Property, plant and equipment 2,316.2 4,121.1
Future income taxes 36.9 65.1
Restricted cash - 53.8
Other assets 1,050.1 664.7
Goodwill 4,154.1 4,417.8
-------------------------------------------------------------------------
$8,370.9 $11,738.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness $40.8 $88.6
Accounts payable and accrued charges 645.6 1,715.1
Deferred revenue 219.7 222.7
Income taxes 3.1 58.0
Short-term secured financing - 453.5
Current portion of long-term debt 33.3 1,028.4
-------------------------------------------------------------------------
942.5 3,566.3
Long-term debt 3,921.3 4,393.8
Exchangeable debentures 15.8 79.4
Derivative financial instruments 371.8 599.8
Other liabilities 112.9 407.6
Future income taxes 441.2 515.9
Preferred shares of a subsidiary - 175.0
Non-controlling interest 1,307.1 1,563.7
Shareholders' equity
Capital stock 346.6 346.6
Retained earnings 912.9 412.1
Accumulated other comprehensive loss (1.2) (321.8)
-------------------------------------------------------------------------
1,258.3 436.9
-------------------------------------------------------------------------
$8,370.9 $11,738.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Quebecor (TSX:QBR.A)
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부터 6월(6) 2024 으로 7월(7) 2024
Quebecor (TSX:QBR.A)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024
