TVA Group Reports $5.9 Million Net Loss Attributable to Shareholders in First Quarter Ended March 31, 2013

TVA Group Reports $5.9 Million Net Loss Attributable to Shareholders in First 
Quarter Ended March 31, 2013 
MONTREAL, CANADA -- (Marketwired) -- 05/07/13 -- TVA Group Inc. (the
"Corporation")(TSX:TVA.B) announces that it recorded a net loss
attributable to shareholders in the amount of $5.9 million, or $0.25
per share, in the first quarter of 2013, compared with a net loss of
$39.9 million, or $1.68 per share, in the same quarter of 2012.  
First quarter operating highlights: 


 
--  Television segment generates operating income(1) in the amount of
    $663,000. The $5,622,000 improvement is mainly due to: 
    
    --  positive impact on operating income of the deconsolidation of the
        results of SUN News since July 1, 2012; 
        
    --  $1,741,000 increase in operating income at TVA Network, despite a
        7.6% decline in advertising revenues. 
        
--  Publishing segment generates operating income in the amount of $232,000.
    The $2,279,000 improvement is mainly due to the impact of recognition in
    the first quarter of 2012 of a charge related to the adoption of new
    2010, 2011 and 2012 rates for business contributions to the cost of
    waste recovery and recycling services provided by Quebec municipalities,
    partially offset by a 5.9% decrease in the segment's operating revenues.
    
--  In the first quarter of 2012, a $32.2 million goodwill impairment charge
    was recognized in the Publishing segment. 

 
"The Television segment's first quarter 2013 financial results showed
improvement from the first quarter of 2012, despite a decrease in TVA
Network's advertising revenues," said Pierre Dion, President and CEO
of the Corporation. "Our French-language specialty services
registered a 23.4% increase in subscription revenues, confirming the
growing popularity of our specialty services and their content. We
are also very pleased by the audience response to 'La Voix,' which
drew an average of more than 2.6 million viewers on Sunday evenings
and generated considerable buzz on Quebec social networks. 
"Our magazines' quarterly newsstand revenues continued to decline
year-over-year while advertising revenues were relatively stable. A
number of cost-containment initiatives aimed at maintaining the
Publishing segment's operating margins were undertaken during the
quarter and will continue through the rest of the year, and
strategies to stimulate newsstand sales will be implemented in the
coming quarters."  
Cash flows used in operating activities totalled $2.5 million in the
first quarter of 2013 while cash flows provided by operating
activities in the amount of $2.3 million were recorded in the same
quarter of 2012. The $4.8 million decrease was essentially due to the
unfavourable net change in non-cash items, resulting in part from a
negative variance in accounts payable and accrued liabilities, which
was partially offset by the favourable variance in operating income. 
(  1 ) See definition of operating income (loss) below. 
Definition  
Operating income (loss)  
In its analysis of operating results, the Corporation defines
operating income (loss) as net income (loss) before amortization of
property, plant and equipment and intangible assets, financial
expenses, operational restructuring costs, impairment of assets and
other costs, impairment of goodwill, tax expense, share of loss
(income) of associated corporations and joint ventures and net loss
attributable to non-controlling interest. Operating income (loss) as
defined above is not a measure of results that is consistent with
International Financial Reporting Standards ("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 Corporation's consolidated results 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 cost risks, credit
risk, government regulation risks, government assistance risks,
changes in economic conditions, fragmentation of the media landscape,
and labour relation 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, 2012. 
The forward-looking statements in this news release reflect the
Corporation's expectations as of May 7, 2013, 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. 


 
TVA GROUP INC.                                                              
Consolidated Statements of Loss and Comprehensive Loss                      
                                                                            
(una
udited)                                                                 
(in thousands of dollars, except per share amounts)                         
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                       Three-month periods  
                                                             ended March 31 
----------------------------------------------------------------------------
                                                                       2012 
                                                                 (restated, 
                                             Note         2013      note 2) 
----------------------------------------------------------------------------
                                                                            
                                                                            
Revenues                                        3  $   111,070  $   115,463 
                                                                            
Purchases of goods and services                 4       75,093       81,747 
Employee costs                                          35,082       40,722 
Amortization of property, plant and                                         
 equipment and intangible assets                         5,088        5,217 
Financial expenses                              5        1,604        1,986 
Operational restructuring costs,                                            
 impairment of assets and other costs           6          952          117 
Impairment of goodwill                          7            -       32,200 
----------------------------------------------------------------------------
Loss before tax expense and share of                                        
 income of associated corporations and                                      
 joint ventures                                         (6,749)     (46,526)
----------------------------------------------------------------------------
                                                                            
Tax expense                                             (2,424)      (3,320)
                                                                            
Share of loss (income) of associated                                        
 corporations and joint ventures                         1,563       (1,100)
----------------------------------------------------------------------------
Net loss and comprehensive loss                    $    (5,888) $   (42,106)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net loss and comprehensive loss                                             
 attributable to:                                                           
  Shareholders                                     $    (5,888) $   (39,929)
  Non-controlling interest                                   -       (2,177)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Basic and diluted loss per share                                            
 attributable to shareholders                8 (c) $     (0.25) $     (1.68)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Consolidated Statements of Equity                                           
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Equity attributable to shareholders 
                    --------------------------------------------------------
                                                                Accumulated 
                                                                      other 
                                                              comprehensive 
                                                                     loss - 
                    Capital stock   Contributed      Retained       Defined 
                         (note 8)       surplus      earnings benefit plans 
----------------------------------------------------------------------------
                                                                            
Balance as at                                                               
 December 31,                                                               
 2011,as previously                                                         
 reported           $      98,647 $           - $     176,993 $           - 
Changes in                                                                  
 accounting                                                                 
 policies(note 2)               -             -        17,408       (18,323)
----------------------------------------------------------------------------
Balance as at                                                               
 December 31,                                                               
 2011,as restated          98,647             -       194,401       (18,323)
Net loss                        -             -       (39,929)            - 
Contributions                                                               
 related to non-                                                            
 controlling                                                                
 interest (note 10)             -             -             -             - 
----------------------------------------------------------------------------
Balance as at March                                                         
 31, 2012                  98,647             -       154,472       (18,323)
Net income (loss)               -             -        33,465               
Other comprehensive                                                         
 loss                           -             -             -        (2,297)
Contributions                                                               
 related to non-                                                            
 controlling                                                                
 interest                       -   
          -             -             - 
Disposal of interest                                                        
 in SUN News                    -           581             -             - 
----------------------------------------------------------------------------
Balance as at                                                               
 December 31, 2012         98,647           581       187,937       (20,620)
Net loss                        -             -        (5,888)            - 
----------------------------------------------------------------------------
Balance as at March                                                         
 31, 2013           $      98,647 $         581 $     182,049 $     (20,620)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
------------------------------------------------
------------------------------------------------
                                                
                                                
                           Equity               
                     attributable               
                          to non-               
                      controlling               
                        interest   Total equity 
------------------------------------------------
                                                
Balance as at                                   
 December 31,                                   
 2011,as previously                             
 reported           $       5,389 $     281,029 
Changes in                                      
 accounting                                     
 policies(note 2)               -          (915)
------------------------------------------------
Balance as at                                   
 December 31,                                   
 2011,as restated           5,389       280,114 
Net loss                   (2,177)      (42,106)
Contributions                                   
 related to non-                                
 controlling                                    
 interest (note 10)         1,764         1,764 
------------------------------------------------
Balance as at March                             
 31, 2012                   4,976       239,772 
Net income (loss)          (2,237)       31,228 
Other comprehensive                             
 loss                           -        (2,297)
Contributions                                   
 related to non-                                
 controlling                                    
 interest                   1,764         1,764 
Disposal of interest                            
 in SUN News               (4,503)       (3,922)
------------------------------------------------
Balance as at                                   
 December 31, 2012              -       266,545 
Net loss                        -        (5,888)
------------------------------------------------
Balance as at March                             
 31, 2013           $           - $     260,657 
------------------------------------------------
------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Consolidated Balance Sheets                                                 
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                    March 31,  December 31, 
                                                         2013          2012 
                                                                 (restated, 
                                            Note                    note 2) 
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
                                                                            
Current assets                                                              
  Cash                                           $      3,233  $     10,619 
  Accounts receivable                                 114,805       115,925 
  Income taxes                                          7,899         3,152 
  Programs, broadcast and distribution                                      
   rights and inventories                              58,365        67,579 
  Prepaid expenses                                      3,220         2,426 
----------------------------------------------------------------------------
                                                      187,522       199,701 
Non-current assets                                                          
  Broadcast and distribution rights            6       39,480        33,563 
  Investments                                          15,289        17,651 
  Property, plant and equipment                        99,223        98,494 
  Licences and other intangible assets                111,642       112,056 
  Goodwill                                     7       39,781        39,781 
  Deferred income taxes                                   881           725 
----------------------------------------------------------------------------
                                                      306,296       302,270 
----------------------------------------------------------------------------
Total assets                                     $    493,818  $    501,971 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities and equity                                                      
                                                                            
Current liabilities                                                         
  Accounts payable and accrued                                              
   liabilities                                   $     83,307  $     89,092 
  Income taxes                                            147           816 
  Broadcast and distribution rights         
                                
   payable                                             21,321        16,966 
  Provisions                                              750           862 
  Deferred revenues                                     4,325         6,136 
----------------------------------------------------------------------------
                                                      109,850       113,872 
Non-current liabilities                                                     
  Long-term debt                                       74,743        74,438 
  Other liabilities                                    38,771        38,499 
  Deferred income taxes                                 9,797         8,617 
----------------------------------------------------------------------------
                                                      123,311       121,554 
Equity                                                                      
  Capital stock                                8       98,647        98,647 
  Contributed surplus                                     581           581 
  Retained earnings                                   182,049       187,937 
  Accumulated other comprehensive loss                (20,620)      (20,620)
----------------------------------------------------------------------------
  Equity attributable to shareholders                 260,657       266,545 
                                                                            
----------------------------------------------------------------------------
Total liabilities and equity                     $    493,818  $    501,971 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated financial statements.      
                                                                            
On May 7, 2013, the Board of Directors approved the condensed consolidated  
financial statements for the three-month periods ended March 31, 2013 and   
2012.                                                                       
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Consolidated Statements of Cash Flows                                       
                                                                            
(unaudited)                                                                 
(in thousands of dollars)                                                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                         Three-month periods ended March 31 
----------------------------------------------------------------------------
                                                                       2012 
                                                                 (restated, 
                                              Note        2013      note 2) 
----------------------------------------------------------------------------
                                                                            
Cash flows related to operating                                             
 activities                                                                 
  Net loss                                         $    (5,888) $   (42,106)
  Non-cash items:                                                           
    Amortization                                         5,139        5,318 
    Operational restructuring costs,                                        
     impairment of assets and other                                         
     costs                                       6         387            - 
    Impairment of goodwill                       7           -       32,200 
    Share of loss (income) of associated                                    
     corporations and joint ventures                     1,563       (1,100)
    Deferred income taxes                                1,024           18 
----------------------------------------------------------------------------
                                                         2,225       (5,670)
  Net change in non-cash items                          (4,768)       7,965 
----------------------------------------------------------------------------
Cash flows (used in) provided by                                            
 operating activities                                   (2,543)       2,295 
----------------------------------------------------------------------------
                                                                            
Cash flows related to investing                                             
 activities                                                                 
  Additions to property, plant and                                          
   equipment                                            (5,312)      (5,274)
  Additions to intangible assets                          (584)        (566)
  Net change in investments                                799            - 
----------------------------------------------------------------------------
Cash flows used in investing activities                 (5,097)      (5,840)
----------------------------------------------------------------------------
                                                                            
Cash flows related to financing                                             
 activities                                                                 
  Net change in bank overdraft                               -       (3,698)
  Net change in revolving credit                                            
   facility                                                254        5,003 
  Financing costs                                            -         (344)
  Non-controlling interest                      10           -        1,764 
----------------------------------------------------------------------------
Cash flows provided by financing                                            
 activities                                                254        2,725 
----------------------------------------------------------------------------
                                                                            
Net change in cash                                      (7,386)        (820)
Cash at beginning of period                             10,619        1,756 
----------------------------------------------------------------------------
Cash at end of period                              $     3,233  $       936 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Interest and taxes reflected as                                             
 operating activities                                                       
  Interest paid                                    $        81  $       386 
  Income taxes paid                                      1,968        2,287 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
See accompanying notes to condensed consolidated financial statements.      
                                                                            
                                                                            
                                                                            
TVA GROUP INC.                                                              
Notes to Condensed Consolidated Financial Statements                        
                                                                            
Three-month periods ended March 31, 2013 and 2012 (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 11). The Corporation is a subsidiary of Quebecor
Media Inc. ("Qu
ebecor 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 Boulevard
East, Montreal, Quebec, Canada. 
The Corporation's businesses experience significant seasonality due,
among other factors, to seasonal 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 ("IASB"),
except that they do not include all disclosures required under IFRS
for annual consolidated financial statements. In particular, these
consolidated financial statements were prepared in accordance with
IAS 34, Interim Financial Reporting, and accordingly, they are
condensed consolidated financial statements. They are presented in
Canadian dollars, which is the currency of the primary economic
environment in which the Corporation and its subsidiaries operate
("functional currency"). These condensed consolidated financial
statements should be read in conjunction with the Corporation's 2012
annual consolidated financial statements, which describe the
accounting policies used to prepare these financial statements.  
Comparative figures for the three-month period ended March 31, 2012,
have been restated to conform to the presentation adopted for the
three-month period ended March 31, 2013.  
2. Changes in accounting policies  
On January 1, 2013, the Corporation adopted retrospectively the
following standards. Unless otherwise indicated, the adoption of
these new standards did not have a material impact on prior period
comparative figures. 
(i) IFRS 10 Consolidated Financial Statements replaces SIC 12
Consolidation - Special Purpose Entities and parts of IAS 27
Consolidated and Separate Financial Statements and provides
additional guidance regarding the concept of control as the
determining factor in whether an entity should be included in the
consolidated financial statements of the parent corporation.  
(ii) IFRS 11 Joint Arrangements replaces IAS 31 Interests in Joint
Ventures with guidance that focuses on the rights and obligations of
the arrangement, rather than its legal form. It also withdraws the
option to proportionately consolidate an entity's interest in joint
ventures. The new standard requires that such interests be recognized
using the equity method.  
The adoption of the standard had the following impacts on prior
period comparative figures: 
Consolidated statements of income and comprehensive income 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                         Three-month period 
Increase (decrease)                                    ended March 31, 2012 
----------------------------------------------------------------------------
                                                                            
Revenues                                              $              (2,349)
Purchases of goods and services                                      (1,439)
Financial expenses                                                        4 
----------------------------------------------------------------------------
Loss before tax expense and share of income of                              
 associated corporations and joint ventures                             914 
Share of loss (income) of associated corporations and                       
 joint ventures                                                        (914)
----------------------------------------------------------------------------
Net income and comprehensive income                   $                   - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(iii) IFRS 12 Disclosure of Interests in Other Entities is a new and
comprehensive standard on disclosure requirements for all forms of
interests in other entities, including joint arrangements,
associates, special purpose entities and other off-balance sheet
vehicles.  
(iv) IFRS 13 Fair Value Measurement is a new and comprehensive
standard that sets out a framework for measuring at fair value and
that provides guidance on required disclosures about fair value
measurements.  
(v) IAS 1 Presentation of Financial Statements was amended and the
principal change resulting from amendments to this standard is the
requirement to present separately other comprehensive items that may
be reclassified to income and other comprehensive items that will not
be reclassified to income.  
(vi) IAS 19 Employee Benefits (Amended) involves, among other
changes, the immediate recognition of the re-measurement component in
other comprehensive income, thereby removing the accounting option
previously available in IAS 19 to recognize or to defer recognition
of changes in defined benefit obligations and in the fair value of
plan assets directly in the consolidated statement of income. IAS 19
also introduces a net interest approach that replaces the expected
return on assets and interest costs on the defined benefit obligation
with a single net interest component determined by multiplying the
net defined benefit liability or asset by the discount rate used to
determine the defined benefit obligation. In addition, all past
service costs are required to be recognized in profit or loss when
the employee benefit plan is amended and no longer spread over any
future service period. IAS 19 also allows amounts recorded in other
comprehensive income to be recognized either immediately in retained
earnings or as a separate category within equity. The Corporation has
elected to immediately recognize in accumulated other comprehensive
income the amounts recorded in other comprehensive income.  
The adoption of the amended standard had the following impacts on
comparative figures for prior period: 
Consolidated statements of income and comprehensive income 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                         Three-month period 
Increase (decrease)                                    ended March 31, 2012 
----------------------------------------------------------------------------
                                                                            
Employee costs                                        $                 342 
Financial expenses                                                      463 
Deferred income tax expense                                            (217)
----------------------------------------------------------------------------
Net income and comprehensive income                   $                (588)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Consolidated balance sheets 


 
------------------------------
----------------------------------------------
----------------------------------------------------------------------------
                                                 December 31,  December 31, 
Increase (decrease)                                      2012          2011 
----------------------------------------------------------------------------
                                                                            
Other liabilities                                $          -  $      1,251 
Deferred income taxes liability                             -          (336)
Retained earnings                                      20,620        17,408 
Accumulated other comprehensive income                (20,620)      (18,323)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
3. Revenues  
The breakdown of revenues between services rendered and product sales
is as follows: 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                          Three-month periods ended March 31
----------------------------------------------------------------------------
                                                                        2012
                                                                  (restated,
                                                            2013     note 2)
----------------------------------------------------------------------------
                                                                            
Services rendered                                    $    85,977 $    89,222
Product sales                                             25,093      26,241
----------------------------------------------------------------------------
                                                     $   111,070 $   115,463
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
4. Purchases of goods and services  
The main components of purchases of goods and services are as
follows:  


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                          Three-month periods ended March 31
----------------------------------------------------------------------------
                                                                        2012
                                                                  (restated,
                                                            2013     note 2)
----------------------------------------------------------------------------
                                                                            
Royalties, rights and production costs               $    48,988 $    50,161
Printing and distribution                                  4,598       7,919
Marketing, advertising and promotion                       5,067       5,313
Services rendered by parent corporation                    5,935       4,264
Other                                                     10,505      14,090
----------------------------------------------------------------------------
                                                     $    75,093 $    81,747
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
5. Financial expenses 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                          Three-month periods ended March 31
----------------------------------------------------------------------------
                                                                        2012
                                                                  (restated,
                                                            2013     note 2)
----------------------------------------------------------------------------
                                                                            
Interest on long-term debt                           $     1,122 $     1,416
Amortization of financing costs                               51         101
Interest on net defined benefit liability                    420         463
Other                                                         11           6
----------------------------------------------------------------------------
                                                     $     1,604 $     1,986
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
6. Operational restructuring costs, impairment of assets and other
costs  
In the three-month period ended March 31, 2013, the Corporation
recorded operational restructuring costs in the amount of $565,000
for legal expenses in connection with a trial related to a legal
dispute involving a former subsidiary. The Corporation also recorded
a $387,000 impairment charge related to its non-current distribution
rights inventory following its decision to discontinue theatrical
distribution of new Quebec films.  
In the three-month period ended March 31, 2012, the Corporation
recorded $117,000 in operational restructuring costs following the
elimination of positions in the Publishing segment.  
7. Impairment of goodwill  
During the three-month period ended March 31, 2012, following the
adoption of new rates for business contributions toward the costs of
waste recovery services provided by Quebec municipalities, the
Corporation had to review its business plan for the related
activities and perform an impairment test on the Publishing
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. 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. 
8. 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 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                December 31,
                                                March 31, 2013          2012
----------------------------------------------------------------------------
                                                                            
4,320,000 Class A Common Shares                  $          72 $          72
19,450,906 Class B shares                               98,575        98,575
----------------------------------------------------------------------------
                                                 $      98,647 $      98,647
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
(c) Loss per share attributable to shareholders  
The following table sets fo
rth the computation of basic and diluted
loss per share attributable to shareholders: 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                         Three-month periods ended March 31 
----------------------------------------------------------------------------
                                                                       2012 
                                                                 (restated, 
                                                          2013      note 2) 
----------------------------------------------------------------------------
                                                                            
Net loss attributable to shareholders              $    (5,888) $   (39,929)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Weighted average number of basic and diluted                                
 shares outstanding                                 23,770,906   23,770,906 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Basic and diluted loss per share attributable to                            
 shareholders (in dollars)                         $     (0.25) $     (1.68)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
The diluted loss per share calculation does not take into
consideration the potential dilutive effect of stock options of the
Corporation since their impact is anti-dilutive.  
9. Stock-based compensation and other stock-based payments 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                     Three-month period ended March 31, 2013
----------------------------------------------------------------------------
                           Corporation's Class B              Quebecor Media
                                   stock options               stock options
----------------------------------------------------------------------------
                                        Weighted                    Weighted
                                         average                     average
                          Number  exercise price      Number  exercise price
----------------------------------------------------------------------------
                                                                            
Balance as at                                                               
 December 31, 2012       819,421   $       16.34     213,416   $       46.55
Exercised                      -               -     (19,957)          46.67
Cancelled               (128,345)          15.29     (32,500)          47.68
Options related to                                                          
 executives                                                                 
 transferred to                                                             
 Quebecor Media                -               -     (14,625)          46.48
----------------------------------------------------------------------------
Balance as at March                                                         
 31, 2013                691,076   $       16.54     146,334   $       46.29
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Of the number of options outstanding as at March 31, 2013, 691,076
Corporation's Class B stock options at an average exercise price of
$16.54 and 68,334 Quebecor Media stock options at an average price of
$46.07 could be exercised. 
During the three-month period ended March 31, 2013, 19,957 Quebecor
Media stock options were exercised for a cash consideration of
$228,000 (no stock options were exercised in 2012).  
During the three-month period ended March 31, 2013, the Corporation
recorded a compensation expense of $52,000 ($5,000 in 2012) in
relation to the Corporation's Class B stock options and a
compensation expense reversal of $29,000 (compensation expense of
$596,000 in 2012) in relation to Quebecor Media stock options.  
10. Related party transactions  
During the three-month period ended March 31, 2013, no capital
contribution was made by the partners in SUN News, compared with a
capital contribution of $3,600,000 in the three-month period ended
March 31, 2012, including $1,836,000 from the Corporation and
$1,764,000 from Sun Media Corporation. 
11. Segmented information  
The Corporation's operations consist of the following segments: 


 
--  The Television segment includes the operations of TVA Network,
    (including the subsidiaries and divisions TVA Productions Inc., TVA
    Sales and Marketing Inc., TVA Acces, TVA Nouvelles and TVA Interactif),
    the specialty services, the marketing of digital products associated
    with the different televisual brands, the home and online shopping
    services of the TVA Boutiques division, and the distribution of
    audiovisual products by the TVA Films division.
    
    
--  The Publishing segment includes the operations of TVA Publications Inc.,
    a producer of content specializing in the publication of French-language
    magazines in various fields such as the arts, entertainment, television,
    fashion, and decoration; the marketing of digital products associated
    with the different brands related to the magazines; and the operations
    of the TVA Studio division, specializing in customized publishing,
    commercial print production and premedia services. 
 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                         Three-month periods ended March 31 
----------------------------------------------------------------------------
                                                                       2012 
                                                                 (restated, 
                                                          2013      note 2) 
----------------------------------------------------------------------------
                                                                            
Revenues                                                                    
  Television                                       $    97,064  $   100,471 
  Publishing                                            14,969       15,906 
  Intersegment items                                      (963)        (914)
----------------------------------------------------------------------------
                                                   $   111,070      115,463 
Operating income (loss)(1)                                                  
  Television                                               663       (4,959)
  Publishing                                               232       (2,047)
----------------------------------------------------------------------------
                                                           895       (7,006)
Amortization of property, plant and equipment and                           
 intangible assets                                       5,088        5,217 
Financial expenses                                       1,604        1,986 
Operational restructuring costs, impairment of                              
 assets and other costs                                    952          117 
Impairment of goodwill                                       -       32,200 
----------------------------------------------------------------------------
Loss before tax expense and share of income of                              
 associated corporations and joint ventures        $    (6,749) $   (46,526)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
The above-noted intersegment items represent the elimination of
normal course business transactions between the Corporation's
business segments regarding revenues.  
(1) The Chief Executive Officer uses operating income (loss) as a
measure of financial performance for assessing the performance of
each of the Corporation's segments. Operating income (loss) is
defined as net loss before amortization of property, plant and
equipment and intangible assets, financial expenses, operational
restructuring costs, impairment of assets and other costs, impairment
of goodwill, tax expense, share of loss (income) of associated
corporations and joint ventures, 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.
Contacts:
Denis Rozon, CPA, CA
Vice-President and Chief Financial Officer
(514) 598-2808
 
 
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