Quebecor Inc. Reports Consolidated Results for Third Quarter

Quebecor Inc. Reports Consolidated Results for Third Quarter 2012 
MONTREAL, QUEBEC -- (Marketwire) -- 11/13/12 -- Quebecor Inc.
("Quebecor" or the "Corporation") (TSX:QBR.A)(TSX:QBR.B) today
reported its consolidated financial results for the third quarter of
2012. Quebecor consolidates the financial results of its Quebecor
Media Inc. ("Quebecor Media") subsidiary. The Corporation's interest
in Quebecor Media increased from 54.7% to 75.4% on October 11, 2012
as a result of the purchase of part of the interest held by CDP
Capital d'Amerique Investissement inc. ("CDP Capital"), a subsidiary
of the Caisse de depot et placement du Quebec.  
Third quarter 2012 highlights  


 
--  Revenues: $1.06 billion, up $44.3 million (4.4%) from the third quarter
    of 2011. 
    
--  Operating income(1) up $33.1 million (10.4%) to $352.8 million. 
    
--  Net income attributable to shareholders: $18.6 million ($0.30 per basic
    share), down $7.5 million ($0.11 per basic share) from $26.1 million
    ($0.41 per basic share) in the third quarter of 2011. 
    
--  Adjusted income from continuing operations(2) $52.1 million ($0.83 per
    basic share), up $12.1 million (30.2% or $0.20 per basic share) from
    $40.0 million ($0.63 per basic share) in the third quarter of 2011. 
    
--  Revenue increases in the third quarter of 2012 from all main services of
    Videotron Ltd. ("Videotron"): Internet access ($18.5 million or 10.5%),
    cable television ($16.3 million or 6.4%), mobile telephony service
    ($13.3 million or 41.8%) and cable telephony service ($4.1 million or
    3.7%). Operating income up $34.5 million (12.5%). 
    
--  Videotron's revenue generating units(3) up by 101,100 in the third
    quarter of 2012 and by 264,600 (5.8%) in the 12-month period ended
    September 30, 2012. Average monthly revenue per user(4) ("ARPU") up
    $7.99 (7.7%) to $112.32 in the third quarter of 2012. 
    
--  Purchase on October 11, 2012 of part of CDP Capital's interest in
    Quebecor Media for a consideration of $1.50 billion, increasing the
    Corporation's interest in Quebecor Media from 54.7% to 75.4%. 
    
--  Total non-cash charge of $187.0 million for impairment of goodwill and
    intangible assets, in accordance with International Financial Reporting
    Standards ("IFRS") accounting valuation principles, reflecting
    continuing weak market conditions in the newspaper and music industries.
    
--  New approach to management of newspaper publishing operations announced.
    Comprehensive optimization of Sun Media Corporation's operational and
    business processes will generate estimated annual savings of more than
    $45.0 million. 
    
 
(1)  See "Operating income" under "Definitions."                            
(2)  See "Adjusted income from continuing operations" under "Definitions."  
(3)  Revenue generating units are the sum of cable television, cable and    
     wireless Internet access and cable telephony service subscriptions,    
     plus subscriber connections to the mobile telephony service.           
(4)  See "Average monthly revenue per user" under "Definitions."            

 
"The Corporation continued its growth in the third quarter of 2012
despite a fiercely competitive business environment in most of its
lines of business," said Pierre Karl Peladeau, President and Chief
Executive Officer of Quebecor. "It increased its revenues by 4.4%,
its operating income by 10.4% and its adjusted income from continuing
operations by 30.2%, confirming the profitability of the major
investments made in recent years." 
"We are very satisfied with the growth recorded by Videotron in the
third quarter of 2012," said Robert Depatie, President and Chief
Executive Officer of Videotron. "Revenues from Videotron's main
services were all up substantially, enhancing the Telecommunications
segment's operating income by $34.5 million, a significant 12.5%
increase. Videotron recorded a net increase of 101,100 revenue
generating units and a 7.7% increase in average monthly revenue per
user compared with the same period of the previous year. It is
noteworthy that the cable television subscriber losses recorded in
the second quarter of 2012, during the moving season, were almost
entirely made up in the third quarter of 2012. In the 12-month period
ended September 30, 2012, the total number of revenue generating
units increased by 264,600 (5.8%). Subscriber additions to the mobile
network since its launch have contributed to customer growth and
increase in profitability. Videotron stands out among Canada's major
telecommunications carriers with the highest quarterly growth rate in
operating income."  
"A major event that has occurred since the end of the second quarter
of 2012 will mark Quebecor's history: the purchase of part of CDP
Capital's interest in Quebecor Media for $1.50 billion," said
Jean-Francois Pruneau, Chief Financial Officer of Quebecor. "This
transaction will enable the Corporation to benefit from the growth we
anticipate for this subsidiary in the coming years, while continuing
its partnership with CDP Capital. It was carried out in accordance to
the Corporation's fundamental financial objectives of maintaining a
sufficient level of operational and financial flexibility. This
transaction was a positive for both our financial partner, which has
supported us since the creation of Quebecor Media in 2000, and our
shareholders."  
To allow the News Media segment the decision-making and operational
flexibility it needs to respond effectively to the profound upheaval
in the media industry around the world, Sun Media Corporation
undertook a comprehensive review of its approach and business
processes. Its innovative plan will streamline decision-making and
operational structures in order to achieve greater efficiency in all
activities, from the editorial to the industrial operations. Sun
Media Corporation is also planning to redesign its sales activities
to strengthen its business strategy. At a time of negative growth in
the industry, maintaining reasonable cost-effectiveness is essential.
This objective will be achieved in the News Media segment through
improved execution and greater responsiveness to customer' needs and
to local and national business opportunities, combined with the
estimated annual savings of more than $45.0 million that will be
generated by the new program.  
In summary, the third quarter of 2012 was marked by excellent
financial results and by ongoing restructuring and adaptation efforts
by the Corporation's segments. In addition, immediately after the end
of the quarter, the Corporation concluded one of the largest
financial transactions in the history of Quebecor Media aimed at
continuing the achievement of its business development, profitability
and growth objectives.  


 
Table 1                                                                     
Quebecor third quarter financial highlights, 2008 to 2012                   
(in millions of Canadian dollars, except per share data)                    
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                             2012(1)   2011(1)   2010(1)   2009(2)   2008(2)
----------------------------------------------------------------------------
                                                                            
Revenues                   $ 1,059.1 $ 1,014.8   $ 969.9   $ 924.5   $ 915.0
Operating income               352.8     319.7     332.0     301.1     277.4
Net income from continuing                                                  
 operations attributable                                                    
 to shareholders                18.6      26.1      83.0      67.8      45.7
Net income attributable to                                                  
 shareholders                   18.6      26.1      83.0      69.4      45.7
Adjusted income from                                                        
 continuing operations          52.1      40.0      56.1      52.9      42.5
Per basic share:                                                            
  Net income from                                                           
   continuing operations                                                    
   attributable to                                                          
   shareholders                 0.30      0.41      1.29      1.06      0.71
  Net income attributable                                                   
   to shareholders              0.30      0.41      1.29      1.08      0.71
  Adjusted income from                                                      
   continuing operations        0.83      0.63      0.87      0.82      0.66
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(1)  Financial figures for the third quarters of years 2010 to 2012 are     
     presented in accordance with IFRS.                                     
(2)  Financial figures for the third quarters of years 2008 and 2009 are    
     presented in accordance with Canadian Generally Accepted Accounting    
     Principles.                                                            

 
2012/2011 third quarter comparison 
Revenues: $1.06 billion, an increase of $44.3 million (4.4%).  


 
--  Revenues increased in Telecommunications ($47.6 million or 7.8% of
    segment revenues), Broadcasting ($9.7 million or 10.9%) and Interactive
    Technologies and Communications ($3.8 million or 12.7%). 
    
--  Revenues decreased in News Media ($7.6 million or -3.2%) and Leisure and
    Entertainment ($0.8 million or -1.1%). 

 
Operating income: $352.8 million, an increase of $33.1 million
(10.4%). 


 
--  Operating income increased in Telecommunications ($34.5 million or 12.5%
    of segment operating income), Broadcasting ($4.0 million or 133.3%) and
    Head Office ($5.6 million). The increase at Head Office was caused
    mainly by the favourable variance in the fair value of stock options. 
    
--  Operating income decreased in News Media ($5.6 million or -19.2%),
    Interactive Technologies and Communications ($2.8 million or -87.5%) and
    Leisure and Entertainment ($2.6 million or -22.6%). 
    
--  The change in the fair value of Quebecor Media stock options resulted in
    a $2.4 million favourable variance in the stock-based compensation
    charge in the third quarter of 2012 compared with the same period of
    2011. The change in the fair value of Quebecor stock options resulted in
    a $6.7 million favourable variance in the Corporation's stock-based
    compensation charge in the third quarter of 2012. 

 
Net income attributable to shareholders: $18.6 million ($0.30 per
basic share) compared with $26.1 million ($0.41 per basic share) in
the third quarter of 2011, a decrease of $7.5 million ($0.11 per
basic share). 


 
--  The unfavourable variance was due primarily to: 
    
    --  recognition of a $187.0 million charge for impairment of goodwill
        and intangible assets in the third quarter of 2012; 
        
    --  $36.8 million increase in charge for restructuring of operations,
        impairment of assets and other special items; 
        
    --  $15.7 million increase in amortization charge. 

  
Partially offset by:  


 
    --  $152.1 million favourable variance in gain on valuation and
        translation of financial instruments; 
        
    --  $33.1 million increase in operating income; 
        
    --  recognition of a $34.8 million favourable adjustment to deferred
        income taxes; 
        
    --  $6.5 million decrease in financial expenses. 

 
Adjusted income from continuing operations: $52.1 million in the
third quarter of 2012 ($0.83 per basic share) compared with $40.0
million ($0.63 per basic share) in the same quarter of 2011, an
increase of $12.1 million ($0.20 per basic share). 
2012/2011 year-to-date comparison 
Revenues: $3.21 billion, an increase of $150.8 million (4.9%). 


 
--  Revenues increased in Telecommunications ($160.9 million or 9.0% of
    segment revenues), Interactive Technologies and Communications ($24.8
    million or 29.2%) and Broadcasting ($18.3 million or 5.8%). 
    
--  Revenues decreased in News Media ($27.3 million or -3.7%) and Leisure
    and Entertainment ($3.7 million or -1.8%). 

 
Operating income: $1.03 billion, an increase of $60.3 million (6.2%). 


 
--  Operating income increased in Telecommunications ($110.5 million or
    13.7% of segment operating income) and Interactive Technologies and
    Communications ($1.0 million or 18.5%). 
    
--  Operating income decreased in News Media ($26.6 million or -25.8%),
    Leisure and Entertainment ($10.9 million or -57.4%), Broadcasting ($9.0
    million or -30.1%), and Head Office ($4.7 million). The decrease at Head
    Office mainly reflects the unfavourable variance in the fair value of
    stock options. 
    
--  The change in the fair value of Quebecor Media stock options resulted in
    a $7.3 million unfavourable variance in the stock-based compensation
    charge in the first nine months of 2012 compared with the same period of
    2011. The change in the fair value of Quebecor stock options resulted in
    a $7.6 million unfavourable variance in the Corporation's stock-based
    compensation charge in the first nine months of 2012. 

 
Net income attributable to shareholders: $158.5 million ($2.50 per
basic share) compared with $115.6 million ($1.80 per basic share) in
the first nine months of 2011, an increase of $42.9 million ($0.70
per basic share).  


 
--  The increase was due mainly to: 
    
    --  $269.4 million favourable variance in gain on valuation and
        translation of financial instruments; 
        
    --  $60.3 million increase in operating income. 

  
Partially offset by:  


 
    --  $201.5 million charge for impairment of goodwill and intangible
        assets recorded in the first nine months of 2012; 
        
    --  $58.9 million increase in amortization charge; 
        
    --  $9.8 million increase in charge for restructuring of operations,
        impairment of assets and other special items. 

 
Adjusted income from continuing operations: $140.1 million in the
first nine months of 2012 ($2.22 per basic share) compared with
$135.9 million ($2.12 per basic share) in the same period of 2011, an
increase of $4.2 million ($0.10 per basic share). 
Financing activities 


 
--  The Corporation increased its interest in Quebecor Media further to the
    closing of the following transactions on October 11, 2012: 
    
    --  Quebecor Media repurchased 20,351,307 of its common shares held by
        CDP Capital for an aggregate purchase price of $1.0 billion paid in
        cash. All the repurchased shares were cancelled; 
        
    --  Quebecor purchased 10,175,653 common shares of Quebecor Media held
        by CDP Capital, in consideration of the issuance by Quebecor to CDP
        Capital of $500.0 million aggregate principal amount of subordinated
        debentures, bearing interest at 4 1/8% and maturing in 2018, which
        are convertible into Class B Subordinate Voting Shares of Quebecor
        ("Class B Shares").  

 
Following the completion of these transactions, Quebecor's interest
in Quebecor Media increased from 54.7% to 75.4% and CDP Capital's
interest decreased from 45.3% to 24.6%.  


 
--  To carry out the purchase of 20,351,307 of its common shares for an
    aggregate purchase price of $1.0 billion, Quebecor Media was able to
    take advantage of favourable conditions on the debt markets. The
    following financial operations were carried out by Quebecor Media as
    part of this major transaction: 
    
    --  Issuance, on October 11, 2012, of US$850.0 million aggregate
        principal amount of Senior Notes bearing interest at 5 3/4% and
        maturing in 2023, and $500.0 million aggregate principal amount of
        Senior Notes bearing interest at 6 5/8% and maturing in 2023, the
        latter being one of the largest single-tranche high-yield offerings
        ever completed in Canada; 
        
    --  Quebecor Media increased the size of the offering as a result of
        oversubscription and favourable financing terms, which provided an
        opportunity to extend the maturities of its credit instruments by
        redeeming US$320.0 million in aggregate principal amount of its 7
        3/4% Senior Notes issued in 2007 and maturing in 2016. This
        transaction generated a loss on debt refinancing of approximately
        $60.0 million (before income tax) to be recorded in the fourth
        quarter of 2012. 

 
Dividends 
On November 12, 2012, the Board of Directors of Quebecor declared a
quarterly dividend of $0.05 per share on Class A Multiple Voting
Shares ("Class A shares") and Class B shares payable on December 24,
2012 to shareholders of record at the close of business on November
29, 2012. This dividend is designated to be an eligible dividend, as
provided under subsection 89(14) of the Canadian Income Tax Act and
its provincial counterpart.  
Normal course issuer bid 
On August 9, 2012, the Corporation filed a normal course issuer bid
to purchase for cancellation a maximum of 980,357 Class A shares,
representing approximately 5% of the issued and outstanding Class A
shares, and a maximum of 4,351,276 Class B shares, representing
approximately 10% of the public float for Class B shares as of July
31, 2012. Purchases can be made from August 13, 2012 to August 12,
2013 at prevailing market prices, on the open market, through the
facilities of the Toronto Stock Exchange. All shares purchased under
the bid have been or will be cancelled.   
During the third quarter of 2012, the Corporation purchased and
cancelled 585,100 Class B shares for a total cash consideration of
$20.5 million. The excess of $16.1 million in the purchase price over
the carrying value of the repurchased Class B shares was recorded as
a reduction in retained earnings. 
During the first nine months of 2012, the Corporation purchased and
cancelled 728,500 Class B shares for a total cash consideration of
$25.8 million. The excess of $20.3 million in the purchase price over
the carrying value of the repurchased Class B shares was recorded as
a reduction in retained earnings.  
Detailed financial information  
For a detailed analysis of Quebecor's third quarter 2012 results,
please refer to the Management Discussion and Analysis and
consolidated financial statements of Quebecor, available on the
Corporation's website at:
http://www.quebecor.com/en/quarterly_doc_quebecor_inc or from the
SEDAR filing service at www.sedar.com. 
Conference call for investors and webcast  
Quebecor will hold a conference call to discuss its third quarter
2012 results on November 13, 2012, at 11 a.m. EST. There will be a
question period reserved for financial analysts. To access the
conference call, please dial 1 877 293-8052, access code for
participants 58308#. A tape recording of the call will be available
from November 13 to December 9, 2012 by dialling 1 877 293-8133,
conference number 860735#, access code for participants 58308#. The
conference call will also be broadcast live on Quebecor's website at
www.quebecor.com/en/content/conference-call. It is advisable to
ensure the appropriate software is installed before accessing the
call. Instructions and links to free player downloads are available
at the Internet address shown above.  
Cautionary statement regarding forward-looking statements  
The statements in this press release that are not historical facts
are forward-looking statements and are subject to significant known
and unknown risks, uncertainties and assumptions 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's public filings
available at less than www.sedar.comgreater than and www.quebecor.com
including, in particular, the "Risks and Uncertainties" section of
Quebecor's Management Discussion and Analysis for the year ended
December 31, 2011. 
The forward-looking statements in this press release reflect
Quebecor's expectations as of November 13, 2012, 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 Corporation  
Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B) is a holding company with a
75.4% interest in Quebecor Media Inc., one of Canada's largest media
groups, with more than 16,000 employees. Quebecor Media Inc., through
its subsidiary Videotron Ltd., is an integrated communications
company engaged in cable television, interactive multimedia
development, Internet access services, cable telephony and mobile
telephony. Through Sun Media Corporation, Quebecor Media Inc. is the
largest publisher of newspapers in Canada. It also operates Canoe.ca
and its network of English- and French-language Internet properties
in Canada. In the broadcasting sector, Quebecor Media Inc. operates,
through TVA Group Inc., the number one French-language conventional
television network in Quebec, a number of specialty channels, and,
through Sun Media Corporation, the English-language SUN News channel.
Another subsidiary of Quebecor Media Inc., Nurun Inc., is a major
interactive technologies and communications agency with offices in
Canada, the United States, Europe and Asia. Quebecor Media Inc. is
also active in magazine publishing (Publications TVA Inc.), book
publishing and distribution (Sogides Group Inc., CEC Publishing
Inc.), the production, distribution and retailing of cultural
products (Archambault Group Inc., TVA Films), video game development
(BlooBuzz Studios, L.P.), DVD, Blu-ray disc and videogame rental and
retailing (Le SuperClub Videotron ltee), the printing and
distribution of community newspapers and flyers (Quebecor Media
Printing Inc., Quebecor Media Network Inc.), news content production
and distribution (QMI Agency), multiplatform advertising solutions
(QMI Sales) and the publishing of printed and online directories,
through Quebecor MediaPages(TM) .  
DEFINITIONS  
Operating income  
In its analysis of operating results, the Corporation defines
operating income, as reconciled to net income under IFRS, as net
income before amortization, financial expenses, gain (loss) on
valuation and translation of financial instruments, charge for
restructuring of operations, impairment of assets and other special
items, impairment of goodwill and intangible assets, gain (loss) on
debt refinancing, and income taxes. Operating income as defined above
is not a measure of results that is consistent with IFRS. It is not
intended to be regarded as an alternative to other financial
operating performance measures or to the statement of cash flows as a
measure of liquidity. It should not be considered in isolation or as
a substitute for measures of performance prepared in accordance with
IFRS. The Corporation uses operating income in order to assess the
performance of its investment in Quebecor Media. The Corporation's
management and Board of Directors use this measure in evaluating its
consolidated results as well as the results of the Corporation's
operating segments. This measure eliminates the significant level of
depreciation and amortization of tangible and intangible assets and
is unaffected by the capital structure or investment activities of
the Corporation and its segments. Operating income is also relevant
because it is a significant component of the Corporation's annual
incentive compensation programs. A limitation of this measure,
however, is that it does not reflect the periodic costs of tangible
and intangible assets used in generating revenues in the
Corporation's segments. The Corporation also uses other measures that
do reflect such costs, such as cash flows from segment operations and
free cash flows from continuing operating activities. 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 Corporation is engaged. The Corporation's
definition of operating income may not be the same as similarly
titled measures reported by other companies. 
Table 2 below provides a reconciliation of operating income with net
income as disclosed in Quebecor's condensed consolidated financial
statements.  


 
Table 2                                                                     
Reconciliation of the operating income measure used in this press release to
the net income measure used in the condensed consolidated financial         
statements                                                                  
(in millions of Canadian dollars)                                           
                               Three months ended         Nine months ended 
                                     September 30              September 30 
----------------------------------------------------------------------------
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                                2012         2011         2012         2011 
----------------------------------------------------------------------------
                                                                            
Operating income (loss):                                                    
  Telecommunications       $   309.9    $   275.4    $   914.6    $   804.1 
  News Media                    23.5         29.1         76.5        103.1 
  Broadcasting                   7.0          3.0         20.9         29.9 
  Leisure and                                                               
   Entertainment                 8.9         11.5          8.1         19.0 
  Interactive                                                               
   Technologies and                                                         
   Communications                0.4          3.2          6.4          5.4 
  Head Office                    3.1         (2.5)         6.3         11.0 
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                               352.8        319.7      1,032.8        972.5 
Amortization                  (146.7)      (131.0)      (432.9)      (374.0)
Financial expenses             (76.9)       (83.4)      (239.2)      (245.2)
Gain (loss) on valuation                                                    
 and translation of                                                         
 financial instruments         117.7        (34.4)       241.5        (27.9)
Restructuring of                                                            
 operations, impairment                                                     
 of assets and other                                                        
 special items                 (39.7)        (2.9)       (28.8)       (19.0)
Impairment of goodwill                                                      
 and intangible assets        (187.0)           -       (201.5)           - 
Gain (loss) on debt                                                         
 refinancing                       -          2.7         (7.3)        (6.6)
Income taxes                   (14.6)       (21.4)      (106.4)       (81.2)
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Net income                 $     5.6    $    49.3    $   258.2    $   218.6 
----------------------------------------------------------------------------
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Adjusted income from continuing operations  
The Corporation defines adjusted income from continuing operations,
as reconciled to net income attributable to shareholders under IFRS,
as net income attributable to shareholders before gain (loss) on
valuation and translation of financial instruments, charge for
restructuring of operations, impairment of assets and other special
items, impairment of goodwill and intangible assets, and loss (gain)
on debt refinancing, net of income tax and net income (loss)
attributable to non-controlling interest. Adjusted income from
continuing operations, as defined above, is not a measure of results
that is consistent with IFRS. It should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with IFRS. The Corporation's definition of adjusted income
from continuing operating activities may not be identical to
similarly titled measures reported by other companies. 
Table 3 provides a reconciliation of adjusted income from continuing
operations to the net income attributable to shareholders measure
used in Quebecor's condensed consolidated financial statements.  


 
Table 3                                                                     
Reconciliation of the adjusted income from continuing operations measure    
used in this press release to the net income attributable to shareholders   
measure used in the condensed consolidated financial statements             
(in millions of Canadian dollars)                                           
                                 Three months ended       Nine months ended 
                                       September 30            September 30 
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                                   2012        2011        2012        2011 
----------------------------------------------------------------------------
                                                                            
Adjusted income from                                                        
 continuing operations         $   52.1    $   40.0    $  140.1    $  135.9 
Gain (loss) on valuation and                                                
 translation of financial                                                   
 instruments                      117.7       (34.4)      241.5       (27.9)
Restructuring of operations,                                                
 impairment of assets and                                                   
 other special items              (39.7)       (2.9)      (28.8)      (19.0)
Impairment of goodwill and                                                  
 intangible assets               (187.0)          -      (201.5)          - 
Gain (loss) on debt                                                         
 refinancing                          -         2.7        (7.3)       (6.6)
Income taxes related to                                                     
 adjustments(1)                    19.7         7.6        (6.8)       13.7 
Net income attributable to                                                  
 non-controlling interest                                                   
 related to adjustments            55.8        13.1        21.3        19.5 
----------------------------------------------------------------------------
Net income attributable to                                                  
 shareholders                  $   18.6    $   26.1    $  158.5    $  115.6 
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(1)  Includes impact of fluctuations in tax rates applicable to adjusted    
     items, either for statutory reasons or in connection with tax          
     transactions.                                                          

 
Average Monthly Revenue per User 
ARPU is an industry metric that the Corporation uses to measure its
monthly cable television, Internet access, cable and mobile telephony
revenues per average basic cable customer. ARPU is not a measurement
that is consistent with IFRS and the Corporation's definition and
calculation of ARPU may not be the same as identically titled
measurements reported by other companies. The Corporation calculates
ARPU by dividing its combined cable television, Internet access,
cable telephony and mobile telephony revenues by the average number
of basic customers during the applicable period, and then dividing
the resulting amount by the number of months in the applicable
period. 


 
                                                                            
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 
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                                2012         2011         2012         2011 
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Revenues                                                                    
  Telecommunications     $     659.2  $     611.6  $   1,956.8  $   1,795.9 
  News Media                   227.6        235.2        715.5        742.8 
  Broadcasting                  99.0         89.3        332.2        313.9 
  Leisure and                                                               
   Entertainment                73.0         73.8        203.0        206.7 
  Interactive                                                               
   Technologies and                                                         
   Communications               33.7         29.9        109.7         84.9 
  Inter-segment                (33.4)       (25.0)      (107.7)       (85.5)
                         ---------------------------------------------------
                             1,059.1      1,014.8      3,209.5      3,058.7 
Cost of sales, selling                                                      
 and administrative                                                         
 expenses                      706.3        695.1      2,176.7      2,086.2 
Amortization                   146.7        131.0        432.9        374.0 
Financial expenses              76.9         83.4        239.2        245.2 
(Gain) loss on valuation                                                    
 and translation of                                                         
 financial instruments        (117.7)        34.4       (241.5)        27.9 
Restructuring of                                                            
 operations, impairment                                                     
 of assets and other                                                        
 special items                  39.7          2.9         28.8         19.0 
Impairment of goodwill                                                      
 and intangible assets         187.0            -        201.5            - 
(Gain) loss on debt                                                         
 refinancing                       -         (2.7)         7.3          6.6 
                         ---------------------------------------------------
Income before income                                                        
 taxes                          20.2         70.7        364.6        299.8 
Income taxes:                                                               
  Current                       10.4          0.2         36.2         (4.9)
  Deferred                       4.2         21.2         70.2         86.1 
                         ---------------------------------------------------
                                14.6         21.4        106.4         81.2 
                         ---------------------------------------------------
Net income               $       5.6  $      49.3  $     258.2  $     218.6 
                         ---------------------------------------------------
                         ---------------------------------------------------
Attributable to:                                                            
  Shareholders           $      18.6  $      26.1  $     158.5  $     115.6 
  Non-controlling                                                           
   interests                   (13.0)        23.2         99.7        103.0 
                         ---------------------------------------------------
                         ---------------------------------------------------
Earnings per share                                                          
 attributable to                                                            
 shareholders                                                               
  Basic                  $      0.30  $      0.41  $      2.50  $      1.80 
  Diluted                       0.30         0.40         2.49         1.77 
                         ---------------------------------------------------
                         ---------------------------------------------------
Weighted average number                                                     
 of shares outstanding                                                      
 (in millions)                  63.1         63.9         63.4         64.2 
Weighted average number                                                     
 of diluted shares (in                                                      
 millions)                      63.2         64.5         63.5         64.8 
                         ---------------------------------------------------
                         ---------------------------------------------------
                                                                            
                                                                            
 

 
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 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   2012        2011        2012        2011 
----------------------------------------------------------------------------
                                                                            
                                                                            
Net income                   $      5.6  $     49.3  $    258.2  $    218.6 
Other comprehensive income:                                                 
  (Loss) gain on translation                                                
   of net investments in                                                    
   foreign operations              (2.9)        0.8        (3.7)        1.6 
  Cash flow hedges:                                                         
    Gain on valuation of                                                    
     derivative financial                                                   
     instruments                    5.8        19.4        31.2        13.4 
    Deferred income taxes           2.3       (10.0)        1.4        (7.1)
  Defined benefit plans:                                                    
    Net change in asset limit                                               
     or in minimum funding                                                  
     liability                        -        (0.1)          -        (0.3)
    Deferred income taxes             -           -           -         0.1 
  Reclassification to income:                                               
    Other comprehensive                                                     
     income related to cash                                                 
     flow hedges                      -         0.8        (3.3)        0.8 
    Deferred income taxes             -        (0.2)       (1.2)       (0.2)
                              ----------------------------------------------
                                    5.2        10.7        24.4         8.3 
                              ----------------------------------------------
Comprehensive income         $     10.8  $     60.0  $    282.6  $    226.9 
                             -----------------------------------------------
                             -----------------------------------------------
Attributable to:                                                            
  Shareholders               $     21.5  $     32.3  $    171.9  $    120.3 
  Non-controlling interests       (10.7)       27.7       110.7       106.6 
                             -----------------------------------------------
                             -----------------------------------------------
                                                                            
                                                                            
                                                                            
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
SEGMENTED INFORMATION                                                       
                                                                            
(in millions of Canadian                                                    
 dollars)                       Three months ended         Nine months ended
(unaudited)                           September 30              September 30
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 2012         2011         2012         2011
----------------------------------------------------------------------------
                                                                            
Net income before                                                           
 amortization, financial                                                    
 expenses,(gain) loss on                                                    
 valuation and translation                                                  
 of financial instruments,                                                  
 restructuring of                                                           
 operations, impairment of                                                  
 assets and other special                                                   
 items, impairment of                                                       
 goodwill and intangible                                                    
 assets, (gain) loss on                                                     
 debt refinancing and                                                       
 income taxes                                                               
  Telecommunications      $     309.9  $     275.4  $     914.6  $     804.1
  News Media                     23.5         29.1         76.5        103.1
  Broadcasting                    7.0          3.0         20.9         29.9
  Leisure and                                                               
   Entertainment                  8.9         11.5          8.1         19.0
  Interactive Technologies                                                  
   and Communications             0.4          3.2          6.4          5.4
  Head Office                     3.1         (2.5)         6.3         11.0
                          --------------------------------------------------
                          $     352.8  $     319.7  $   1,032.8  $     972.5
                          --------------------------------------------------
                          --------------------------------------------------
Amortization                                                                
  Telecommunications      $     123.2  $     108.0  $     359.9  $     307.9
  News Media                     13.8         14.3         43.0         41.1
  Broadcasting                    5.5          4.4         16.1         12.8
  Leisure and                                                               
   Entertainment                  2.4          2.4          7.5          6.8
  Int
eractive Technologies                                                  
   and Communications             1.0          0.9          3.8          2.5
  Head Office                     0.8          1.0          2.6          2.9
                          --------------------------------------------------
                          $     146.7  $     131.0  $     432.9  $     374.0
                          --------------------------------------------------
                          --------------------------------------------------
Additions to property,                                                      
 plant and equipment                                                        
  Telecommunications      $     174.5  $     194.2  $     519.5  $     531.8
  News Media                      2.0          2.9          5.5         11.3
  Broadcasting                    5.8          7.1         17.9         22.5
  Leisure and                                                               
   Entertainment                  1.8          2.4          3.6          4.0
  Interactive Technologies                                                  
   and Communications             0.8          0.5          3.0          3.7
  Head Office                     0.9          0.1          2.1          0.8
                          --------------------------------------------------
                          $     185.8  $     207.2  $     551.6  $     574.1
                          --------------------------------------------------
                          --------------------------------------------------
Additions to intangible                                                     
 assets                                                                     
  Telecommunications      $      11.9  $      17.7  $      45.6  $      49.4
  News Media                      3.1          2.7          9.2          8.1
  Broadcasting                    0.9          1.4          2.2          3.4
  Leisure and                                                               
   Entertainment                  0.5          1.2          3.3          3.8
  Inter-segment                  (0.4)           -         (1.4)           -
                          --------------------------------------------------
                          $      16.0  $      23.0  $      58.9  $      64.7
                          --------------------------------------------------
                          --------------------------------------------------
                                                                            
                                                                            
                                                                            
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
CONSOLIDATED STATEMENTS OF EQUITY                                           
                                                                            
(in millions of Canadian dollars)                                           
(unaudited)                                                                 
                              Equity attributable to shareholders           
                    --------------------------------------------------------
                                                                Accumulated 
                                                                 other com- 
                        Capital      Contributed     Retained    prehensive 
                          stock          surplus     earnings        income 
----------------------------------------------------------------------------
                                                                            
                                                                            
Balance as of                                                               
 December 31, 2010   $    346.6     $        0.9  $     943.6  $       13.7 
Net income                    -                -        115.6             - 
Other comprehensive                                                         
 income                       -                -          0.1           4.6 
Issuance of shares                                                          
 of a subsidiary              -                -            -             - 
Repurchase of Class                                                         
 B shares                  (5.6)               -        (18.4)            - 
Dividends                     -                -         (9.6)            - 
----------------------------------------------------------------------------
Balance as of                                                               
 September 30, 2011       341.0              0.9      1,031.3          18.3 
Net income                    -                -         85.4             - 
Other comprehensive                                                         
 loss                         -                -        (31.6)         (9.7)
Repurchase of Class                                                         
 B shares                  (1.5)               -         (4.7)            - 
Dividends                     -                -         (3.2)            - 
----------------------------------------------------------------------------
Balance as of                                                               
 December 31, 2011        339.5              0.9      1,077.2           8.6 
Net income                    -                -        158.5             - 
Other comprehensive                                                         
 income                       -                -            -          13.4 
Issuance of Class B                                                         
 shares                     3.6              1.5            -             - 
Repurchase of Class                                                         
 B shares                  (5.5)               -        (20.3)            - 
Acquisition of non-                                                         
 controlling                                                                
 interests                    -             (0.1)           -             - 
Dividends                     -                -         (9.5)            - 
----------------------------------------------------------------------------
Balance as of                                                               
 September 30, 2012  $    337.6     $        2.3  $   1,205.9  $       22.0 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
 
                                                 
                                                 
                              Equity             
                        attributable             
                             to non-             
                         controlling       Total 
                           interests      equity 
-------------------------------------------------
                                                 
                                                 
Balance as of                                    
 December 31, 2010   $       1,346.9  $  2,651.7 
Net income                     103.0       218.6 
Other comprehensive                              
 income                          3.6         8.3 
Issuance of shares                               
 of a subsidiary                 1.0         1.0 
Repurchase of Class                              
 B shares                          -       (24.0)
Dividends                      (35.2)      (44.8)
-------------------------------------------------
Balance as of             
                       
 September 30, 2011          1,419.3     2,810.8 
Net income                      79.0       164.4 
Other comprehensive                              
 loss                          (42.6)      (83.9)
Repurchase of Class                              
 B shares                          -        (6.2)
Dividends                      (11.3)      (14.5)
-------------------------------------------------
Balance as of                                    
 December 31, 2011           1,444.4     2,870.6 
Net income                      99.7       258.2 
Other comprehensive                              
 income                         11.0        24.4 
Issuance of Class B                              
 shares                            -         5.1 
Repurchase of Class                              
 B shares                          -       (25.8)
Acquisition of non-                              
 controlling                                     
 interests                       0.1           - 
Dividends                      (34.1)      (43.6)
-------------------------------------------------
Balance as of                                    
 September 30, 2012  $       1,521.1  $  3,088.9 
-------------------------------------------------
-------------------------------------------------
                                                 
                                                 
 

 
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 
----------------------------------------------------------------------------
                                2012         2011         2012         2011 
----------------------------------------------------------------------------
                                                                            
Cash flows related to                                                       
 operating activities                                                       
  Net income             $       5.6  $      49.3  $     258.2  $     218.6 
  Adjustments for:                                                          
    Amortization of                                                         
     property, plant and                                                    
     equipment                 112.6         99.5        331.2        285.4 
    Amortization of                                                         
     intangible assets          34.1         31.5        101.7         88.6 
    (Gain) loss on                                                          
     valuation and                                                          
     translation of                                                         
     financial                                                              
     instruments              (117.7)        34.4       (241.5)        27.9 
    Gain on business                                                        
     disposals                     -            -        (12.9)           - 
    Impairment of assets         7.5          0.3          7.5          1.5 
    Impairment of                                                           
     goodwill and                                                           
     intangible assets         187.0            -        201.5            - 
    (Gain) loss on debt                                                     
     refinancing                   -         (2.7)         7.3          6.6 
    Amortization of                                                         
     financing costs and                                                    
     long-term debt                                                         
     discount                    3.6          3.3         10.9          9.2 
    Deferred income                                                         
     taxes                       4.2         21.2         70.2         86.1 
    Other                       (0.6)         2.3          1.1          0.9 
                        ----------------------------------------------------
                               236.3        239.1        735.2        724.8 
  Net change in non-cash                                                    
   balances related to                                                      
   operating activities        142.3        141.1        108.8        (32.4)
                        ----------------------------------------------------
Cash flows provided by                                                      
 operating activities          378.6        380.2        844.0        692.4 
                        ----------------------------------------------------
Cash flows related to                                                       
 investing activities                                                       
  Business acquisitions,                                                    
   net of cash and cash                                                     
   equivalents                     -         (5.6)        (0.8)       (55.7)
  Business disposals,                                                       
   net of cash and cash                                                     
   equivalents                   0.8            -         18.7            - 
  Additions to property,                                                    
   plant and equipment        (185.8)      (207.2)      (551.6)      (574.1)
  Additions to                                                              
   intangible assets           (16.0)       (23.0)       (58.9)       (64.7)
  Proceeds from                                                             
   disposals of assets           3.7          2.5          6.1          7.5 
  Other                          0.4          0.4         (0.6)         3.2 
                        ----------------------------------------------------
Cash flows used in                                                          
 investing activities         (196.9)      (232.9)      (587.1)      (683.8)
                        ----------------------------------------------------
Cash flows related to                                                       
 financing activities                                                       
  Net change in bank                                                        
   indebtedness                 (4.8)         1.9         (2.7)        (1.0)
  Net change under                                                          
   revolving credit                                                         
   facilities                   10.5          6.9        (12.4)        (4.0)
  Issuance of long-term                                                     
   debt, net of                                                             
   financing fees               34.9        294.9        822.5        614.8 
  Repayment of long-term                                                    
   debt                        (40.3)      (254.9)      (749.3)      (481.1)
  Settlement of hedging                                                     
   contracts                     3.6        (54.8)       (40.5)      (160.2)
  Issuance of Class B                                                       
   shares                          -            -          3.6            - 
  Repurchase of Class B                                                     
   shares                      (20.5)       (24.0)       (25.8)       (24.0)
  Dividends                     (3.2)        (6.4)        (9.5)        (9.6)
  Dividends pai
d to non-                                                    
   controlling interests       (11.4)       (11.4)       (34.1)       (35.2)
  Other                            -          0.1            -          1.1 
                        ----------------------------------------------------
Cash flows used in                                                          
 financing activities          (31.2)       (47.7)       (48.2)       (99.2)
                        ----------------------------------------------------
Net change in cash and                                                      
 cash equivalents              150.5         99.6        208.7        (90.6)
Effect of exchange rate                                                     
 changes on cash and                                                        
 cash equivalents                                                           
 denominated in foreign                                                     
 currencies                     (0.3)           -         (0.5)         0.3 
Cash and cash                                                               
 equivalents at                                                             
 beginning of period           204.4         52.8        146.4        242.7 
                        ----------------------------------------------------
Cash and cash                                                               
 equivalents at end of                                                      
 period                  $     354.6  $     152.4  $     354.6  $     152.4 
                        ----------------------------------------------------
                        ----------------------------------------------------
                                                                            
Cash and cash                                                               
 equivalents consist of                                                     
  Cash                   $      29.7  $      40.4  $      29.7  $      40.4 
  Cash equivalents             324.9        112.0        324.9        112.0 
                        ----------------------------------------------------
                         $     354.6  $     152.4  $     354.6  $     152.4 
                        ----------------------------------------------------
                        ----------------------------------------------------
                                                                            
Interest and taxes                                                          
 reflected as operating                                                     
 activities                                                                 
  Cash interest payments $      17.2  $      22.9  $     168.3  $     186.1 
  Cash income tax                                                           
   payments (net of                                                         
   refunds)                     (1.5)        (3.7)         6.0         30.3 
                        ----------------------------------------------------
                                                                            
                                                                            
 

 
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
CONSOLIDATED BALANCE SHEETS                                                 
                                                                            
(in millions of Canadian dollars)                                           
(unaudited)                                     September 30     December 31
----------------------------------------------------------------------------
                                                        2012            2011
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
                                                                            
Current assets                                                              
  Cash and cash equivalents                    $       354.6   $       146.4
  Accounts receivable                                  547.9           603.7
  Income taxes                                          12.5            29.0
  Inventories                                          260.3           283.6
  Prepaid expenses                                      41.4            31.3
                                              ------------------------------
                                                     1,216.7         1,094.0
                                                                            
Non-current assets                                                          
  Property, plant and equipment                      3,352.8         3,211.1
  Intangible assets                                    953.9         1,041.0
  Goodwill                                           3,370.0         3,543.8
  Derivative financial instruments                      21.1            34.9
  Deferred income taxes                                 27.7            20.6
  Other assets                                          90.1            93.4
                                              ------------------------------
                                                     7,815.6         7,944.8
                                              ------------------------------
Total assets                                   $     9,032.3   $     9,038.8
                                              ------------------------------
                                              ------------------------------
Liabilities and equity                                                      
                                                                            
Current liabilities                                                         
  Bank indebtedness                            $         1.5   $         4.2
  Accounts payable and accrued charges                 710.5           776.5
  Provisions                                            51.4            33.7
  Deferred revenue                                     297.3           295.7
  Income taxes                                          15.4             2.7
  Derivative financial instruments                      29.0               -
  Current portion of long-term debt                    176.2           114.5
                                              ------------------------------
                                                     1,281.3         1,227.3
Non-current liabilities                                                     
  Long-term debt                                     3,369.4         3,688.3
  Derivative financial instruments                     302.0           315.4
  Other liabilities                                    321.0           344.7
  Deferred income taxes                                669.7           592.5
                                              ------------------------------
                                                     4,662.1         4,940.9
Equity                                                                      
  Capital stock                                        337.6           339.5
  Contributed surplus                                    2.3             0.9
  Retained earnings                                  1,205.9         1,077.2
  Accumulated other comprehensive income                22.0             8.6
                                              ------------------------------
  Equity attributable to shareholders                1,567.8         1,426.2
  Non-controlling interests                          1,521.1         1,444.4
                                              ------------------------------
                                                     3,088.9         2,870.6
 
                                             ------------------------------
                                                                            
                                                                            
Total liabilities and equity                   $     9,032.3   $     9,038.8
                                              ------------------------------
                                              ------------------------------

Contacts:
Jean-Francois Pruneau
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
jean-francois.pruneau@quebecor.com
514 380-4144 
Martin Tremblay
Vice President, Public Affairs
Quebecor Media Inc.
martin.tremblay@quebecor.com
514 380-1985
 
 
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