TVA Group Reports $2.1 Million Net Income Attributable to

TVA Group Reports $2.1 Million Net Income Attributable to
Shareholders in Quarter Ended September 30, 2012 
MONTREAL, CANADA -- (Marketwire) -- 11/05/12 -- TVA Group Inc.
(TSX:TVA.B) ("the Corporation") announces that it recorded net income
attributable to shareholders in the amount of $2.1 million, or $0.09
per share, for the third quarter of 2012, compared with net income
attributable to shareholders of $0.00 per share in the same quarter
of 2011.  
Third quarter operating highlights: 


 
--  Operating income(1) in the Television segment up $8,685,000 to
    $8,374,000, mainly because of: 
    
    --  $5,320,000 increase in operating income at TVA Network due to an
        8.6% increase in advertising revenues; 
        
    --  positive impact on operating income of the deconsolidation of the
        results of SUN News since July 1, 2012. 

 
Partially offset by: 


 
    --  operating loss of the "TVA Sports" service, in operation since
        September 2011; 
        
        
    --  loss of the contribution to operating income provided by our
        interest in "Mystery TV" and "The Cave," which was sold on May 31,
        2012. 
 
--  Operating income in the Publishing segment down $944,000 to $2,310,000,
    mainly because of a decrease in operating revenues caused largely by
    lower newsstand sales and advertising revenues. 

 
"We are satisfied with the third quarter 2012 financial results,
particularly the performance of TVA Network and LCN during the Quebec
election campaign," said Pierre Dion, President and CEO of the
Corporation. "Our French-language specialty services are also
continuing to register steady growth in both subscription revenues
and advertising revenues. Finally, in an increasingly competitive
marketplace, we continued investing in content for all of TVA Group's
vehicles. 
"In the Publishing segment, operating revenues declined 4.4% compared
with the same quarter of the previous year, which largely accounts
for the decrease in the segment's operating income. Several brand
projects and strategies designed to generate new revenue streams and
make up for the decline in 'traditional' revenues are currently under
way in the segment."  
Cash flows provided by operating activities amounted to $18.3 million
for the 
quarter, compared with $11.8 million in the same quarter of
2011. The $6.5 million increase was essentially due to the improved
operating results.  
The unaudited consolidated financial statements for the three-month
and nine-month periods ending September 30, 2012, with notes and the
interim Management's Discussion and Analysis, can be consulted on the
Corporation's website at http://groupetva.ca. 
Definition 
Operating income (loss) 
In its analysis of operating results, the Corporation defines
operating income (loss) as net income (net loss) before amortization
of property, plant and equipment and intangible assets, financial
expenses, impairment of goodwill, gain on disposal of businesses,
restructuring costs of operations, impairment of assets and other
costs, income taxes (recovery), share of loss (income) of associated
corporations and net loss attributable to non-controlling interest.
Operating income (loss) as defined above is not a measure of results
that is consistent with IFRS. Neither is it intended to be regarded
as an alternative to other financial performance measures or to the
statement of cash flows as a measure of liquidity. This measure is
not intended to represent funds available for debt service, dividend
payment, reinvestment or other discretionary uses, and should not be
considered in isolation or as a substitute for other performance
measures prepared in accordance with IFRS. Operating income (loss) is
used by the Corporation because management believes it is a
meaningful measure of performance.  
This measure is used by management and the Board of Directors to
evaluate the consolidated results of the Corporation and the results
of its segments. Measurements such as operating income (loss) are
also commonly used by the investment community to analyze and compare
the performance of companies in the industries in which the
Corporation is active. The Corporation's definition of operating
income (loss) may not be identical to similarly titled measures
reported by other companies. 
Forward-looking Information Disclaimer 
The statements in this news release that are not historical facts may
be forward-looking statements and are subject to important known and
unknown risks, uncertainties and assumptions which 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 generally can be identified by the use of
the conditional, the use of forward-looking terminology such as
"propose," "will," "expect," "may," "anticipate," "intend,"
"estimate," "plan," "foresee," "believe" or the negative of these
terms or variations of them or similar terminology. Certain factors
that may cause actual results to differ from current expectations
include seasonality, operational risks (including pricing actions by
competitors), programming content and production costs risks, credit
risk, government regulation risks, governmental assistance risks,
changes in economic conditions, fragmentation of the media landscape
and labour relations risks. 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 the Corporation's
actual results to differ from current expectations please refer to
the Corporation's public filings available at www.sedar.com and
http://groupetva.ca including, in particular, the "Risks and
Uncertainties" section of the Corporation's annual Management's
Discussion and Analysis for the year ended December 31, 2011. 
The forward-looking statements in this news release reflect the
Corporation's expectations as of November 5, 2012, and are subject to
change after this date. The Corporation 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, unless required by the applicable securities laws.  
TVA Group 
TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated
communications company involved in the creation, production,
broadcast and distribution of audiovisual products, and in magazine
publishing. TVA Group Inc. is the largest broadcaster of
French-language entertainment, information and public affairs
programming and publisher of French-language magazines in North
America, and one of the largest private-sector producers of
French-language content in North America. The Corporation's Class B
shares are listed on the Toronto Stock Exchange under the ticker
symbol TVA.B.  
(1) Refer to definition of operating income (loss) below. 


 
TVA GROUP INC.                                                              
Consolidated Statements of Income (Loss)                                    
                                                                            
(unaudited)                                                                 
(in thousand of dollars, except per share amounts)                          
----------------------------------------------------------------------------
----------------------------
------------------------------------------------
                                Three-month periods      Nine-month periods 
                                 ended September 30      ended September 30 
----------------------------------------------------------------------------
                       Note      2012          2011        2012        2011 
----------------------------------------------------------------------------
                                                                            
Revenues                  2 $  97,171   $    89,214 $   330,362 $   313,859 
                                                                            
Operating, selling and                                                      
 administrative                                                             
 expenses                 3    86,487        86,271     305,771     283,992 
Amortization of                                                             
 property, plant and                                                        
 equipment and                                                              
 intangible assets              4,913         4,280      15,372      12,528 
Financial expenses        4     1,211         1,469       4,161       4,377 
Impairment of goodwill    5         -             -      32,200           - 
Gain on disposal of                                                         
 businesses              13         -             -     (12,881)          - 
Restructuring costs of                                                      
 operations,                                                                
 impairmentof assets                                                        
 and other costs          6         -           312         117         633 
----------------------------------------------------------------------------
Income (loss) before                                                        
 income taxes and                                                           
 share of income of                                                         
 associated                                                                 
 corporations                   4,560        (3,118)    (14,378)     12,329 
                                                                            
Income taxes          7 and                                                 
 (recovery)              13       573          (448)      2,042       5,349 
After-tax share of                                                          
 loss (income) of                                                           
 associated                                                                 
 corporations                   1,860           186       1,532        (285)
----------------------------------------------------------------------------
Net income (loss)           $   2,127   $    (2,856)$   (17,952)$     7,265 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income (loss)                                                           
 attributable to:                                                           
  Shareholders              $   2,127   $         8 $   (13,538)$    14,135 
  Non-controlling                                                           
   interest              11         -        (2,864)     (4,414)     (6,870)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Basic and diluted                                                           
 earnings per share                                                         
 attributable to                                                            
 shareholders          9 c) $    0.09   $         - $     (0.57)$      0.59 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 

 
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Consolidated Statements of Comprehensive Income (Loss)                      
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                              Three-month periods        Nine-month periods 
                               ended September 30        ended September 30 
----------------------------------------------------------------------------
                      Note        2012       2011         2012         2011 
----------------------------------------------------------------------------
                                                                            
Net income (loss)            $   2,127$    (2,856)   $ (17,952)   $   7,265 
                                                                            
Other comprehensive                                                         
 loss:                                                                      
Defined benefit                                                             
 plans:                                                                     
Net change in asset                                                         
 limit or in minimum                                                        
 funding liability                   -       (141)           -         (423)
Deferred income taxes                -         38            -          114 
----------------------------------------------------------------------------
                                     -       (103)           -         (309)
                                                                            
----------------------------------------------------------------------------
Comprehensive income                                                        
 (loss)                      $   2,127$    (2,959)   $ (17,952)   $   6,956 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Comprehensive income                                                        
 (loss) attributable                                                        
 to:                                                                        
Shareholders                 $   2,127$       (95)   $ (13,538)   $  13,826 
Non-controlling                               
                              
 interest               11           -     (2,864)      (4,414)      (6,870)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Consolidated Statements of Equity                                           
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                         Equity attributable to                             
                              shareholders                                  
                    --------------------------------                        
                                                          Equity            
                                                    attributable            
                      Capital                            to non-            
                        stock Contributed Retained   controlling      Total 
                     (note 9)     surplus  earnings     interest     equity 
----------------------------------------------------------------------------
                                                                            
Balance as of                                                               
 December 31, 2010   $ 98,647         $ - $ 170,784      $ 4,511  $ 273,942 
Net income (loss)           -           -    14,135       (6,870)     7,265 
Other comprehensive                                                         
 loss                       -           -      (309)           -       (309)
Dividends                   -           -    (2,377)           -     (2,377)
Contributions                                                               
 related to non-                                                            
 controlling                                                                
 interest (note 11)         -           -         -        7,840      7,840 
----------------------------------------------------------------------------
Balance as of                                                               
 September 30, 2011    98,647           -   182,233        5,481    286,361 
Net income (net                                                             
 loss)                      -           -    11,468       (2,297)     9,171 
Other comprehensive                                                         
 loss                       -           -   (16,708)           -    (16,708)
Contributions                                                               
 related to non-                                                            
 controlling                                                                
 interest (note 11)         -           -         -        2,205      2,205 
----------------------------------------------------------------------------
Balance as of                                                               
 December 31, 2011     98,647           -   176,993        5,389    281,029 
Net loss                    -           -   (13,538)      (4,414)   (17,952)
Contributions                                                               
 related to non-                                                            
 controlling                                                                
 interest (note 11)         -           -         -        3,528      3,528 
Disposal of interest                                                        
 in SUN News (note                                                          
 11)                        -         581         -       (4,503)    (3,922)
----------------------------------------------------------------------------
Balance as of                                                               
 September 30, 2012  $ 98,647       $ 581 $ 163,455          $ -  $ 262,683 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Consolidated Balance Sheets                                                 
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                            September 30,       December 31,
                                  Note               2012               2011
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
                                                                            
Current assets                                                              
  Cash                                   $          5,729   $          1,756
  Accounts receivable                             114,714            117,644
  Current income tax assets                         4,694              4,014
  Programs, broadcast and                                                   
   distribution rights and                                                  
   inventories                                     73,572             61,954
  Prepaid expenses                                  3,238              2,690
  Assets held for sale              13                  -              8,370
----------------------------------------------------------------------------
                                                  201,947            196,428
Non-current assets                                                          
  Broadcast and distribution                                                
   rights                                          33,390             35,488
  Investments                       11             17,329             12,865
  Property, plant and equipment                    96,923            102,007
  Licences and other intangible                                             
   assets                                         112,181            114,539
  Goodwill                           5             39,781             71,981
  Deferred income taxes                               783                545
----------------------------------------------------------------------------
                                                  300,387            337,425
----------------------------------------------------------------------------
Total assets                             $        502,334   $        533,853
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                
                            
Liabilities and equity                                                      
                                                                            
Current liabilities                                                         
  Bank overdraft                         $              -   $          3,980
  Accounts payable and accrued                                              
   liabilities                                     91,862             82,086
  Current income tax liabilities                      204                503
  Broadcast and distribution                                                
   rights payable                                  18,580             15,778
  Provisions                                          948              1,533
  Deferred revenues                                 8,667              6,535
  Current portion of long-term                                              
   debt                              8                  -             17,756
  Liabilities held for sale         13                  -              1,538
----------------------------------------------------------------------------
                                                  120,261            129,709
Non-current liabilities                                                     
  Long-term debt                     8             74,626             74,635
  Other liabilities                                34,696             39,696
  Deferred income taxes              7             10,068              8,784
----------------------------------------------------------------------------
                                                  119,390            123,115
Equity                                                                      
  Capital stock                      9             98,647             98,647
  Contributed surplus               11                581                  -
  Retained earnings                               163,455            176,993
----------------------------------------------------------------------------
  Equity attributable to                                                    
   shareholders                                   262,683            275,640
  Non-controlling interest          11                  -              5,389
----------------------------------------------------------------------------
                                                  262,683            281,029
----------------------------------------------------------------------------
Total liabilities and equity             $        502,334   $        533,853
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 

 
See accompanying notes to condensed consolidated financial statements.      

 
On November 5, 2012, the Board of Directors approved the condensed
consolidated financial statements for the three-month and nine-month
periods ended September 30, 2012 and 2011. 


 
TVA GROUP INC.                                                              
Consolidated Statements of Cash Flows                                       
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                            Three-month periods          Nine-month periods 
                             ended September 30          ended September 30 
----------------------------------------------------------------------------
                      Note       2012      2011           2012         2011 
----------------------------------------------------------------------------
                                                                            
Cash flows related to                                                       
 operating activities                                                       
  Net income (loss)       $     2,127 $  (2,856)   $   (17,952)   $   7,265 
  Non-cash items:                                                           
    Amortization                5,020     4,370         15,687       12,797 
    Impairment of                                                           
     goodwill            5          -         -         32,200            - 
    Gain on disposals                                                       
     of businesses      13          -         -        (12,881)           - 
    Restructuring                                                           
     costs of                                                               
     operations,                                                            
     impairment of                                                          
     assets and other                                                       
     costs               6          -       253              -          583 
    After-tax share of                                                      
     loss (income) of                                                       
     associated                                                             
     corporations               1,860       186          1,532         (285)
    Deferred income                                                         
     taxes               7        224       846          1,030        2,651 
----------------------------------------------------------------------------
  Cash flows provided                                                       
   by current                                                               
   operations                   9,231     2,799         19,616       23,011 
  Net change in non-                                                        
   cash items                   9,081     9,017          3,130         (917)
----------------------------------------------------------------------------
Cash flows provided by                                                      
 operating activities          18,312    11,816         22,746       22,094 
----------------------------------------------------------------------------
                                                                            
Cash flows related to                                                       
 investing activities                                                       
  Additions to                                                              
   property, plant and                                                      
   equipment                   (5,566)   (7,034)       (17,668)     (22,024)
  Additions to                                                              
   intangible assets             (892)   (1,490)        (2,195)      (3,438)
  Disposal of           11                                                  
   businesses, net of  and                                                  
   cash                 13        765         -         18,663            - 
  Cash of SUN News at                                                       
   the date of                                                              
   deconsolidation      11          -         -           (430)           - 
  Net change in                                                             
   investments          11     (1,493)      226         (1,493)         236 
----------------------------------------------------------------------------
 Cash flows used in                                                         
 investing activities          (7,186)   (8,298)        (3,123)     (25,226)
----------------------------------------------------------------------------
                                                                        
    
Cash flows related to                                                       
 financing activities                                                       
  Net change in bank                                                        
   overdraft                   (4,943)    2,178         (3,980)         (22)
  Net change in                                                             
   revolving term loan           (454)   (7,394)       (17,736)      (3,300)
  Financing costs        8          -         -           (344)           - 
  Non-controlling                                                           
   interest             11          -     4,900          3,528        7,840 
  Dividends paid                    -         -              -       (2,377)
----------------------------------------------------------------------------
Cash flows (used in)                                                        
 provided by financing                                                      
 activities                    (5,397)     (316)       (18,532)       2,141 
----------------------------------------------------------------------------
                                                                            
Net change in cash              5,729     3,202          1,091         (991)
Cash at beginning of                                                        
 period                             -     1,412          4,638        5,605 
----------------------------------------------------------------------------
Cash at end of period     $     5,729 $   4,614    $     5,729    $   4,614 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Interest and income                                                         
 taxes reflected as                                                         
 operating activities                                                       
  Interest paid           $        48 $     312    $     2,788    $   2,982 
  Net income taxes                                                          
   (received) paid             (1,501)       17          1,971          656 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Notes to Condensed Consolidated Financial Statements                        
                                                                            
Three-month and nine-month periods ended September 30, 2012 and 2011        
(unaudited)                                                                 
(Tabular amounts are expressed in thousands of dollars, except per share and
per option amounts)                                                         

 
TVA Group Inc. ("TVA Group" or the "Corporation") is governed by the
Quebec Business Corporations Act. TVA Group is an integrated
communications company with two operating segments: Television and
Publishing (note 12). The Corporation is a subsidiary of Quebecor
Media Inc. ("Quebecor Media" or the "parent corporation") and the
ultimate parent corporation is Quebecor Inc. ("Quebecor"). The
Corporation's head office is located at 1600 De Maisonneuve Blvd.
East, Montreal, Quebec, Canada.  
The Corporation's businesses experience significant seasonality due,
among other factors, to cyclical advertising patterns and influences
on people's viewing, reading and listening habits. Because the
Corporation depends on the sale of advertising for a significant
portion of its revenues, operating results are also sensitive to
prevailing economic conditions, including changes in local, regional
and national economic conditions, particularly as they may affect
advertising expenditures. Furthermore, the Corporation is investing
in the launch of new specialty services in the Television segment.
During the period immediately following the launch of a new specialty
service, subscription revenues are always relatively modest, while
initial operating expenses may prove more substantial. Accordingly,
the results of operations for interim periods should not necessarily
be considered indicative of full-year results. 
1. Basis of presentation 
These consolidated financial statements were prepared in accordance
with the International Financial Reporting Standards ("IFRS") as
issued by the International Accounting Standards Board. In
particular, these consolidated financial statements were prepared in
accordance with IAS 34, Interim Financial Reporting, and accordingly,
they are condensed consolidated financial statements because they do
not include all disclosures required under IFRS for annual
consolidated financial statements. These condensed consolidated
financial statements should be read in conjunction with the
Corporation's 2011 annual consolidated financial statements and the
notes thereto. The same accounting policies described in the annual
consolidated financial statements have been used herein. 
Comparative figures for the three-month and nine-month periods ended
September 30, 2011, have been reclassified to conform to the
presentation adopted for the nine-month period ended September 30,
2012. 
2. Revenues 
The breakdown of revenues between services rendered and product sales
is as follows: 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                               Three-month periods        Nine-month periods
                                ended September 30        ended September 30
----------------------------------------------------------------------------
                                 2012         2011         2012         2011
----------------------------------------------------------------------------
                                                                            
Services rendered         $    72,458   $   64,331   $  253,564   $  237,548
Product sales                  24,713       24,883       76,798       76,311
----------------------------------------------------------------------------
                          $    97,171   $   89,214   $  330,362   $  313,859
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
3. Operating, selling and administrative expenses 
The main components are as follows:  


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                             Three-month periods          Nine-month periods
                              ended September 30          ended September 30
----------------------------------------------------------------------------
                              2012          2011          2012          2011
----------------------------------------------------------------------------
                                                                            
Employee and sales                                                          
 commission costs      $    36,617   $    36,511   $   120,500   $   110,155
Royalties, rights                                                           
 and production                                                             
 costs                      30,563        27,017       115,445       103,472
Printing and                       
                                         
 distribution                4,856         4,718        17,298        15,360
Marketing,                                                                  
 advertising and                                                            
 promotion                   2,098         2,617        11,474        10,640
Transmission and                                                            
 microwave expenses          1,206         1,759         4,771         4,330
Other                       11,147        13,649        36,283        40,035
----------------------------------------------------------------------------
                       $    86,487   $    86,271   $   305,771   $   283,992
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
4. Financial expenses 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                             Three-month periods          Nine-month periods
                              ended September 30          ended September 30
----------------------------------------------------------------------------
                             2012           2011          2012          2011
----------------------------------------------------------------------------
                                                                            
Interest on long-                                                           
 term debt             $    1,148    $     1,356   $     3,846   $     4,072
Amortization of                                                             
 financing costs              107             90           315           269
Other                         (44)            23             -            36
----------------------------------------------------------------------------
                       $    1,211    $     1,469   $     4,161   $     4,377
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
5. Impairment of goodwill 
As a result of new fees adopted in 2012 for 2010, 2011 and 2012 with
respect to business contributions for costs related to waste recovery
services provided by Quebec municipalities, the operating costs of
the Corporation's Publishing segment are adversely affected.
Accordingly, the Corporation reviewed its business plan for these
activities and performed an impairment test on the Publishing
segment's cash-generating unit ("CGU"). The Corporation concluded
that the recoverable amount based on value in use was less than the
carrying amount of the Publishing CGU and a goodwill impairment
charge of $32,200,000 was recorded during the first quarter of 2012.
The Corporation used a pre-tax discount rate of 16.26% (15.89% as of
April 1, 2011) and a perpetual growth rate of 1.00% (1.00% as of
April 1, 2011) to calculate the recoverable amount. 
6. Restructuring costs of operations, impairment of assets and other
costs 
In the nine-month period ended September 30, 2012, the Corporation
recorded $117,000 in restructuring costs of operations following the
elimination of a number of positions in the Publishing segment.  
During the three-month period ended September 30, 2011, the
Corporation had recorded an impairment expense on its broadcast
rights inventories in the amount of $253,000 ($583,000 for the
nine-month period ended September 30, 2011) and a $59,000 ($50,000
for the nine-month period ended September 30, 2011) provision for
restructuring costs following the discontinuation of the operations
of the over-the-air station "SUN TV". 
7. Income taxes 
In light of the evolution of the tax auditing, jurisprudence and tax
legislation, the Corporation reduced its deferred tax liabilities by
$195,000 in the third quarter of 2012 ($372,000 in the third quarter
of 2011). 
8. Long-term debt 
On February 24, 2012, the Corporation completed the renewal of its
revolving term loan of $100,000,000 for a five-year term with similar
conditions, except for the borrowing cost, which is more favourable
for the Corporation. The loan matures on February 23, 2017 and is
repayable in full on that date. Given the maturity of the revolving
term loan as of December 31, 2011, the Corporation had presented the
loan as a current liability. 
The costs associated with the renewal of the revolving term loan in
the first quarter of 2012 totalled $344,000 and were recorded as
financing costs in reduction of long-term debt. 
9. Capital stock 
(a) Authorized capital stock  


 
An unlimited number of Class A common shares, participating, voting, without
par value.                                                                  
An unlimited number of Class B shares, participating, non-voting, without   
par value.                                                                  
An unlimited number of preferred shares, non-participating, non-voting, with
a par value of $10 each, issuable in series.                                

 
(b) Issued and outstanding capital stock 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                               September 30,    December 31,
                                                        2012            2011
----------------------------------------------------------------------------
                                                                            
4,320,000 class A common shares                $          72   $          72
19,450,906 class B shares                             98,575          98,575
----------------------------------------------------------------------------
                                               $      98,647   $      98,647
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(c) Earnings per share attributable to shareholders 
The following table sets forth the computation of basic and diluted
earnings per share attributable to shareholders: 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                            Three-month periods           Nine-month periods
                             ended September 30           ended September 30
----------------------------------------------------------------------------
                                2012       2011          2012           2011
----------------------------------------------------------------------------
                                                                            
Net income (loss)                                                           
 attributable to                                                            
 shareholders            $     2,127$         8   $   (13,538)   $    14,135
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Weighted average                                                            
 number of basic and                                                        
 diluted shares                                                             
 outstanding              23,770,906 23,770,906    23,770,906     23,770,906
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                              
              
Basic and diluted                                                           
 earnings per share                                                         
 attributable to                                                            
 shareholders (in                                                           
 dollars)                $      0.09$         -   $     (0.57)   $      0.59
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
The diluted earnings per share calculation does not take into
consideration the potential dilutive effect of stock options of the
Corporation since their impact is anti-dilutive. During the
three-month and nine-month periods ended September 30, 2012, 819,421
stock options of the Corporation's plan (833,610 in 2011) were
excluded from the diluted earnings per share calculation. 
10. Stock-based compensation and other stock-based payments 


 
                                      Nine-month period ended September 30, 
                                      2012                                  
----------------------------------------------------------------------------
                                                                    Quebecor
                                           Class B                     Media
                                             stock                     stock
                                           options                   options
----------------------------------------------------------------------------
                                                                    Weighted
                                  Weighted average                   average
                                          exercise                  exercise
                               Number        price       Number        price
----------------------------------------------------------------------------
                                                                            
Balance as of December                                                      
 31, 2011                     833,610      $ 16.35      393,252      $ 46.66
Exercised                           -            -     (113,728)       46.27
Cancelled                     (14,189)       16.84            -            -
Options related to SUN                                                      
 News' corporate                                                            
 executive (note 11)                -            -      (11,000)       50.10
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Balance as of September                                                     
 30, 2012                     819,421      $ 16.34      268,524      $ 46.68
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Of the number of options outstanding as at September 30, 2012,
712,079 Class B stock options at an average exercise price of $16.58
and 62,459 Quebecor Media stock options at an average price of $46.16
could be exercised. 
During the three-month and nine-month periods ended September 30,
2012, 113,728 Quebecor Media stock options were exercised for a cash
consideration of $629,000 (during the three-month period ended
September 30, 2011, no stock options were exercised; during the
nine-month period ended September 30, 2011, 15,230 stock options were
exercised for $108,000).  
During the three-month and nine-month periods ended September 30,
2012, the Corporation recorded compensation expense reversals of
$19,000 and $264,000 respectively (compared with reversals of
$573,000 and $1,314,000 respectively in the same periods of 2011) in
relation to the Corporation's Class B stock options as well as a
compensation expense reversal of $64,000 and a compensation charge of
$482,000 respectively (compared with compensation charges of $500,000
and $239,000 respectively for the same periods of 2011) in relation
to Quebecor Media stock options.  
11. Related party transactions  
Capital contributions to SUN News  
During the three-month period ended September 30, 2012, the partners
in SUN News made a capital contribution of $3,600,000 ($10,000,000 in
2011), including $1,764,000 ($5,100,000 in 2011) from the Corporation
and $1,836,000 ($4,900,000 in 2011) from Sun Media Corporation, a
company under common control.  
During the nine-month period ended September 30, 2012, the partners
in SUN News made a capital contribution of $10,800,000 ($16,000,000
in 2011), including $5,436,000 ($8,160,000 in 2011) from the
Corporation and $5,364,000 ($7,840,000 in 2011) from Sun Media
Corporation. 
Disposal of interest in SUN News  
On June 30, 2012, the Corporation sold a 2% interest in SUN News to
Sun Media Corporation for a $765,000 consideration. The Corporation
now holds a 49% interest in SUN News and Sun Media Corporation owns
51%. The difference between the amount paid and the book value of the
interest yielded a $581,000 gain, which was accounted for in
contributed surplus. Following the loss of control, SUN News' results
are no longer consolidated as of July 1, 2012 and the investment in
SUN News is now accounted for using the equity method. 
The following table shows details of the net assets of SUN News,
which were reclassified as an investment using the equity method at
the date of deconsolidation: 


 
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Current assets                                                              
  Cash                                                         $         430
  Accounts receivable and other current assets                         2,792
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                                                                       3,222
Non-current assets                                                          
  Property, plant and equipment                                        8,873
  Intangible assets                                                      650
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                                                                      12,745
Current liabilities                                                         
  Accounts payable and accrued liabilities                             3,555
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Net assets                                                             9,190
                                                                            
  Corporation Sun Media interest                                     (4,687)
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Investment using equity method                                 $       4,503
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12. Segmented information 
The Corporation's operations consist of the following segments:  


 
--  The Television segment includes the activities of TVA Network (including
    the subsidiaries and divisions TVA Productions Inc., TVA Ventes et
    Marketing Inc., TVA Acces, TVA Creation, TVA Nouvelles, TVA Interactif),
    specialty services, the marketing of the digital products of the
    different televisual brands, the TVA Boutiques division's home and
    online shopping services and the TVA Films division's audiovisual
    products distribution operations.
    
--  The Publishing segment includes the operations of TVA Publications Inc.,
    a content producer specializing in the publication of French-language
    magazines in various fields, including arts, entertainment, television,
    fashion and decoration; marketing of the digital products of the
    different brands related to the magazines and the operations of the TVA
    Studio division, which specializes in customized publishing, commercial
    print productions and premedia services.

 
The intersegment items represent the elimination of normal course
business transactions between the Corporation's business segments
regarding revenues and expenses.  


 
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                                Three-month periods      Nine-month periods 
                                 ended September 30      ended September 30 
----------------------------------------------------------------------------
                                   2012        2011        2012        2011 
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Revenues                                                                    
  Television                $    81,646 $    72,400 $   283,598 $   264,407 
  Publishing                     16,854      17,638      49,973      52,336 
  Intersegment items             (1,329)       (824)     (3,209)     (2,884)
----------------------------------------------------------------------------
                                 97,171      89,214     330,362     313,859 
Operating, selling and                                                      
 administrative expenses                                                    
  Television                     73,272      72,711     261,911     242,560 
  Publishing                     14,544      14,384      47,069      44,316 
  Intersegment items             (1,329)       (824)     (3,209)     (2,884)
----------------------------------------------------------------------------
                                 86,487      86,271     305,771     283,992 
Income before amortization,                                                 
 financial expenses,                                                        
 impairment of goodwill,                                                    
 gain on disposal of                                                        
 businesses, restructuring                                                  
 costs of operations,                                                       
 impairment of assets and                                                   
 other costs, income taxes                                                  
 (recovery), and share of                                                   
 loss (income) of                                                           
 associated corporations                                                    
  Television                      8,374        (311)     21,687      21,847 
  Publishing                      2,310       3,254       2,904       8,020 
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                            $    10,684 $     2,943 $    24,591 $    29,867 
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                                                September 30,   December 31,
                                                         2012           2011
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Total assets                                                                
Television                                   $        446,482      $ 449,943
Publishing                                             55,852         83,910
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                                             $        502,334      $ 533,853
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Goodwill                                                                    
Television                                   $          2,539      $   2,539
Publishing                                             37,242         69,442
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                                             $         39,781       $ 71,981
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13. Disposal of businesses 
In May 31, 2012, following the Canadian Radio-television and
Telecommunications Commission ("CRTC") approval, the Corporation sold
its 51% interest in "The Cave" and its 50% interest in "Mystery TV"
to its partner in the joint ventures, Shaw Media Global Inc., and a
gain on disposal of businesses in the amount of $12,881,000 before
taxes was recorded. The transaction did not give rise to any income
tax charge because the Corporation used unrecorded capital losses to
eliminate the capital gains tax on disposal of businesses. The sale
generated net cash flows in the amount of $17,898,000; proceeds from
disposal of $20,963,000 less $3,065,000 in cash at the time of the
sale.
Contacts:
Denis Rozon, CPA, CA
Vice-President and Chief Financial Officer
(514) 598-2808