Quebecor Inc. Reports Consolidated Results for Second Quarter 2013

Quebecor Inc. Reports Consolidated Results for Second Quarter 2013 
MONTREAL, QUEBEC -- (Marketwired) -- 08/08/13 -- Quebecor Inc.
("Quebecor" or the "Corporation") (TSX:QBR.A)(TSX:QBR.B) today
reported its consolidated financial results for the second quarter of
2013. Quebecor consolidates the financial results of its Quebecor
Media Inc. ("Quebecor Media") subsidiary, in which it holds a 75.4%
interest.   
Second quarter 2013 highlights  


 
--  Revenues up $8.6 million (0.8%) from the second quarter of 2012 to $1.09
    billion. 
    
--  Operating income(1) up $14.2 million (4.0%) to $367.8 million. 
    
--  Net loss attributable to shareholders: $45.1 million ($0.73 per basic
    share) in the second quarter of 2013, compared with net income
    attributable to shareholders of $65.5 million ($1.02 per basic share) in
    the same period of 2012, an unfavourable variance of $110.6 million
    ($1.75 per basic share) including the $130.0 million unfavourable non-
    cash impact of valuation of financial instruments (net of income tax and
    non-controlling interest). 
    
--  Adjusted income from continuing operations(2): $52.9 million in the
    second quarter of 2013 ($0.85 per basic share) compared with $46.1
    million ($0.72 per basic share) in the second quarter of 2012, an
    increase of $6.8 million ($0.13 per basic share). 
    
--  Telecommunications segment's revenues up $30.8 million (4.8%) and
    operating income up $23.0 million (7.7%) in the second quarter of 2013. 
    
--  Videotron Ltd. ("Videotron") records second quarter 2013 revenue
    increases at all of its major services: Internet access ($12.5 million
    or 6.5%), mobile telephony ($12.2 million or 29.8%), cable telephony
    ($6.4 million or 5.7%) and cable television ($3.5 million or 1.3%). 
    
--  Videotron revenue-generating units(3) up 13,000 in the second quarter of
    2013 (compared with an increase of 31,100 in the same quarter of 2012)
    and up 204,600 (4.3%) in the 12-month period ended June 30, 2013. 
    
--  Subscriber connections to the mobile telephony service up 30,200 in the
    second quarter of 2013 and 103,500 in the 12-month period ended June 30,
    2013. 
    
--  On May 29, 2013, Videotron and Rogers Communications Partnership
    ("Rogers") reached a 20-year agreement to build out and operate a shared
    LTE (Long Term Evolution) mobile network in Quebec and the Ottawa areas.
    
 
                                                                            
1.   See "Operating income" under "Definitions."                            
                                                                            
2.   See "Adjusted income from continuing operations" under "Definitions."  
                                                                            
3.   The sum of cable television, cable and mobile Internet access, and     
     cable telephony service subscriptions and subscriber connections to the
     mobile telephony service.                                              

 
"Quebecor continued its growth in the second quarter of 2013 with a
4.0% increase in operating income and a 14.8% increase in adjusted
income from continuing operations," said Robert Depatie, President
and Chief Executive Officer of Quebecor. "Despite the highly
competitive business environment, Quebecor reported improved results,
spearheaded by the Telecommunications segment's excellent numbers.
Since the beginning of 2012, financial transactions that create value
for shareholders have also contributed to the increase in adjusted
income from continuing operations."  
"Videotron posted strong results again in the second quarter of 2013,
growing its revenues by 4.8% and its operating income by 7.7%," said
Manon Brouillette, President and Chief Operating Officer of
Videotron. "Once again, all of Videotron's core services generated
revenue increases, particularly Internet access and mobile telephony.
Average monthly revenue per user ("ARPU") continued to grow, climbing
$6.49 (5.9%) to $117.24. During the second quarter of 2013, Videotron
introduced the multiroom PVR, a new functionality that lets
subscribers to illico TV new generation play back their favourite
shows on any television set in the home. The second quarter results
clearly demonstrate Videotron's ability to adapt to the competitive
environment in which it operates. Videotron's success is rooted in
its creativity in the marketing of new products, development of
complementary revenue streams, ongoing alignment of its cost
structure, and superior customer experience.   
"When it comes to business expansion, we are very pleased with the
20-year agreement Videotron has reached with mobile carrier Rogers to
build out and operate a shared LTE mobile network in Quebec and the
Ottawa area. This unique agreement will benefit both companies as
well as their customers."  
"In the media sphere, Quebecor continued refocusing its operations by
working to leverage its core business across all available platforms,
including digital, and to develop new content that can be brought to
all platforms," said Robert Depatie. "A new business unit, QMI
Digital, has been created: it will be a centre of expertise in
digital technology with a strong emphasis on research and
development. Caroline Roy will become Vice President, Development and
Strategy, of QMI Digital on August 26,2013. At the same time, Aldo
Giampaolo, a top-level manager with extensive experience in the
management of large-scale events and of major venues for sporting and
cultural events, has been appointed President and Chief Executive
Officer of Quebecor Media Entertainment & Sports Group. His expertise
will be particularly useful for the development and management of the
Quebec City Amphitheatre, now under construction.  
"In connection with the refocusing of its operations, Quebecor also
completed several strategic business acquisitions and disposals.
Quebecor Media acquired Event Management Gestev Inc. ("Gestev"), a
Quebec City sporting and cultural event manager, in the second
quarter of 2013, while TVA Group Inc. ("TVA Group") announced the
acquisition of Les Publications Charron & Cie inc., publisher of La
Semaine magazine, and of Charron Editeur inc. in July 2013. Quebecor
Media also sold its specialized Web sites Jobboom and Reseau Contact
for a cash consideration of $65.0 million, subject to technology
transfer conditions.  
"Meanwhile, Quebecor had to introduce new rationalization and
cost-containment initiatives in its traditional media business. In
July 2013, Sun Media Corporation announced new restructuring measures
that will entail the elimination of 360 positions, the closing of 8
publications and 3 free urban newspapers, and efforts to enhance
operational efficiencies. The measures are expected to yield total
annual savings of approximately $55.0 million. Sun Media Corporation
intends to use the savings to support continued investment in and
expansion of its newspapers and publications, particularly on digital
platforms. TVA Group also announced a restructuring plan designed to
maintain its leadership position in Quebec and safeguard the quality
of its content. The plan includes the elimination of approximately 90
positions, or 4.5% of TVA Group's total workforce."  
"On the financial front, Videotron and Quebecor Media closed new
financing arrangements on June 17 and August 1, 2013: respectively an
issuance of 5.625% Senior Notes with a 12-year term and a 7-year
institutional loan at the U.S. London Interbank Offered Rate
("LIBOR") plus 2.5% (subject to a LIBOR floor)," said Jean-Francois
Pruneau, Senior Vice President and Chief Financial Officer of
Quebecor. "The opportunistic financing transactions carried out by
Quebecor Media and Videotron in 2012 and since the beginning of 2013
are expected to yield annual debt interest savings in excess of $50.0
million."  
In short, since the end of the first quarter of 2013, Quebecor has
continued implementing its strategy with high-potential initiatives
related to organizational restructuring, strategic investment,
transformation of traditional media outlets and reduced financing
costs. All these initiatives are consistent with the Corporation's
long-term growth, business development and profitability objectives.  


 
Table 1                                                                     
Quebecor second quarter financial highlights, 2009 to 2013                  
(in millions of Canadian dollars, except per share data)                    
----------------------------------------------------------------------------
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                            2013(1)    2012(1)   2011(1)   2010(1)   2009(2)
----------------------------------------------------------------------------
                                                                            
Revenues                   $1,088.4  $ 1,079.8 $ 1,046.4 $   987.3 $   941.6
Operating income              367.8      353.6     354.5     349.6     313.7
(Loss) income from                                                          
 continuing operations                                                      
 attributable to                                                            
 shareholders                 (73.8)      64.4      52.5      59.5      75.9
Net (loss) income                                                           
 attributable to                                                            
 shareholders                 (45.1)      65.5      54.0      60.4      76.8
Adjusted income from                                                        
 continuing operations         52.9       46.1      57.3      61.6      55.4
Per basic share:                                                            
  (Loss) income from                                                        
   continuing operations                                                    
   attributable to                                                          
   shareholders               (1.19)      1.00      0.82      0.93      1.18
  Net (loss) income                                                         
   attributable to                                                          
   shareholders               (0.73)      1.02      0.84      0.94      1.19
  Adjusted income from                                                      
   continuing operations       0.85       0.72      0.89      0.96      0.86
----------------------------------------------------------------------------
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1. Financial figures for 2010 to 2013 are presented in accordance with      
   International Financial Reporting Standards ("IFRS").                    
2. Financial figures for 2009 are presented in accordance with Canadian     
   Generally Accepted Accounting Principles.                                

 
2013/2012 second quarter comparison  
Revenues: $1.09 billion, an increase of $8.6 million (0.8%).  


 
--  Revenues increased in the Telecommunications segment ($30.8 million or
    4.8% of segment revenues).  
    
--  Revenues were unchanged in the Broadcasting and Leisure and
    Entertainment segments. 
    
--  Revenues decreased in News Media ($25.6 million or -10.0%) and
    Interactive Technologies and Communications ($3.6 million or -9.1%). 

 
Operating income: $367.8 million, an increase of $14.2 million
(4.0%). 


 
--  Operating income increased in Telecommunications ($23.0 million or 7.7%
    of segment operating income) and Interactive Technologies and
    Communications ($1.4 million or 46.7%). There were favourable variances
    in Leisure and Entertainment ($0.5 million) and at Head Office ($1.4
    million).  
    
--  Operating income decreased in News Media ($11.7 million or -32.9%) and
    Broadcasting ($0.4 million or -2.2%).  
    
--  The change in the fair value of Quebecor Media stock options resulted in
    a $0.6 million unfavourable variance in the consolidated stock-based
    compensation charge in the second quarter of 2013 compared with the same
    period of 2012. The change in the fair value of Quebecor stock options
    resulted in a $4.8 million unfavourable variance in the Corporation's
    consolidated stock-based compensation charge in the second quarter of
    2013. 

 
Net loss attributable to shareholders: $45.1 million ($0.73 per basic
share) in the second quarter of 2013, compared with net income
attributable to shareholders in the amount of $65.5 million ($1.02
per basic share) in the same period of 2012, an unfavourable variance
of $110.6 million ($1.75 per basic share).  


 
--  The unfavourable variance was mainly due to: 
    
    --  $244.6 million unfavourable variance in losses and gains on
        valuation and translation of financial instruments; 
        
    --  $20.7 million increase in amortization charge; 
        
    --  $19.6 million unfavourable variance in the charge for restructuring
        of operations, impairment of assets and other special items;  
        
    --  $18.9 million loss on debt refinancing recorded in the second
        quarter of 2013; 
        
    --  $16.6 million increase in financial expenses.
        
        Partially offset by: 
        
        
    --  $27.6 million favourable variance in income from discontinued
        operations attributable to shareholders, resulting mainly from the
        gain on disposal of Jobboom; 
        
    --  $14.2 million increase in operating income.

 
Adjusted income from continuing operations: $52.9 million in the
second quarter of 2013 ($0.85 per basic share) compared with $46.1
million ($0.73 per basic share) in the second quarter of 2012, an
increase of $6.8 million ($0.12 per basic share). 
2013/2012 year-to-date comparison  
Revenues: Stable at $2.14 billion.  


 
--  Revenues increased in Telecommunications ($53.9 million or 4.2% of
    segment revenues). 
    
--  Revenues decreased in News Media ($51.1 million or -10.5%), Leisure and
    Entertainment ($6.6 million or -5.1%), Interactive Technologies and
    Communications ($5.0 million or -6.6%) and Broadcasting ($2.4 million or
    -1.0%). 

 
Operating income: $685.3 million, an increase of $13.5 million
(2.0%). 


 
--  Operating income increased in Telecommunications ($36.6 million or 6.1%
    of segment operating income) and Broadcasting ($4.7 million or 40.9%). 
    
--  Operating income decreased in News Media ($21.7 million or -42.3%),
    Leisure and Entertainment ($1.5 million), Interactive Technologies and
    Communications ($0.3 million or -5.0%) and at Head Office ($4.3
    million). The decrease at Head Office was due primarily to the
    unfavourable variance in the fair value of stock options. 
    
--  The change in the fair value of Quebecor Media stock options resulted in
    a $3.8 million favourable variance in the consolidated stock-based
    compensation charge in the first half of 2013 compared with the same
    period of 2012. The change in the fair value of Quebecor stock options
    resulted in a $4.8 million unfavourable variance in the Corporation's
    consolidated stock-based compensation charge in the first half of 2013. 

 
Net loss attributable to shareholders: $9.5 million ($0.15 per basic
share) in the first half of 2013, compared with net income
attributable to shareholders of $136.9 million ($2.15 per basic
share) in the same period of 2012, an unfavourable variance of $146.4
million ($2.30 per basic share).  


 
--  The unfavourable variance was mainly due to: 
    
    --  $309.1 million unfavourable variance in losses and gains on
        valuation and translation of financial instruments; 
        
    --  $41.4 million increase in amortization charge; 
        
    --  $28.2 million increase in financial expenses; 
        
    --  $21.3 million unfavourable variance in losses and gains on debt
        refinancing; 
        
    --  $20.1 million unfavourable variance in the charge for restructuring
        of operations, impairment of assets and other special items. 
        
        Partially offset by: 
        
        
    --  $27.5 million favourable variance in income from discontinued
        operations attributable to shareholders, resulting mainly from the
        gain on disposal of Jobboom; 
        
    --  $14.5 million favourable variance in the goodwill impairment charge,
        without any tax consequences; 
        
    --  $13.5 million increase in operating income.  

 
Adjusted income from continuing operations: $84.5 million in the
first half of 2013 ($1.36 per basic share) compared with $82.3
million ($1.30 per basic share) in the same period of 2012, an
increase of $2.2 million ($0.06 per basic share).  
Financing activities  
The following financial transactions have been concluded since the
end of the first quarter of 2013: 


 
--  On June 17, 2013, Videotron announced the closing of the offering and
    sale of 5.625% Senior Notes maturing on June 15, 2025, in the aggregate
    principal amount of $400.0 million. It was the first issue of high-yield
    12-year Notes on the Canadian market. Strong demand enabled Videotron to
    increase the size of the placement on favourable terms. 
    
--  On July 2, 2013, Videotron used the proceeds from its placement of
    5.625% Senior Notes to finance the early repayment and withdrawal of
    US$380.0 million aggregate principal amount of its issued and
    outstanding 9.125% Senior Notes maturing in April 2018. 
    
--  On July 31, 2013, Quebecor Media issued a notice for the redemption on
    August 30, 2013 of US$265 million in aggregate principal amount of its
    outstanding 7.75% Senior Notes issued on January 17, 2006 and due in
    March 2016, at a redemption price of 101.292% of their principal amount.
    
--  On August 1, 2013, Quebecor Media entered into a US$350 million senior
    secured term loan credit facility that will be issued at a discount
    price of 99.50% on August 29, 2013. The term loan will bear interest at
    LIBOR rate, subject to a LIBOR floor of 0.75%, plus a premium of 2.50%.
    This credit facility calls for quarterly amortization payments totalling
    1.00% per annum of the original principal amount, with the balance
    payable on August 17, 2020. 
    
--  On August 7, 2013, the Board of Directors of the Corporation approved a
    two-for-one stock split of the Corporation's outstanding Class A
    Multiple Voting Shares ("Class A Shares") and Class B Subordinate Voting
    Shares ("Class B Shares"). Accordingly, shareholders will receive one
    additional share for each share owned on the record date of August 14,
    2013, subject to approval of regulatory filings with the Toronto Stock
    Exchange ("TSX"). Trading on the shares on a split basis will commence
    at the opening of business on August 16, 2013. 

 
Dividends  
On August 7, 2013, the Board of Directors of Quebecor declared a
quarterly dividend of $0.05 per share on Class A Shares and Class B
Shares (or $0.025 per share after the two-for-one stock split of
Class A and Class B shares, effective August 14, 2013), payable on
September 17, 2013 to shareholders of record at the close of business
on August 23, 2013. 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 7, 2013, the Board of Directors of Quebecor authorized the
renewal of its normal course issuer bid for a maximum of 978,034
Class A shares, representing approximately 5% of issued and
outstanding Class A shares, and for a maximum of 4,214,624 Class B
shares, representing approximately 10% of the public float of Class B
shares as of July 31, 2013.  
The purchases will be made from August 13, 2013 to August 12, 2014 at
prevailing market prices on the open market through the facilities of
the TSX and will be made in accordance with the requirements of said
Exchange. All shares purchased under the bid will be cancelled. As of
July 31, 2013, 19,560,686 Class A shares and 42,360,696 Class B
shares were issued and outstanding.  
The average daily trading volume of the Class A and Class B shares of
the Corporation from February 1, 2013 to July 31, 2013 was 512 Class
A shares and 132,045 Class B shares. Consequently, the Corporation
will be authorized to purchase a maximum of 1,000 Class A shares and
33,011 Class B shares during the same trading day pursuant to its
normal course issuer bid.  
The Corporation believes that the repurchase of these shares under
this normal course issuer bid is in the best interest of the
Corporation and its shareholders.  
Under the normal course issuer bid that began on August 13, 2012, the
Corporation did not purchase any Class A Shares and purchased
1,392,200 Class B Shares at a weighted average price of $39.1625 per
share.  
Shareholders may obtain a copy of the Notice filed with the TSX,
without charge, by contacting the Office of the Secretary of the
Corporation at 514 380-1994. 
Detailed financial information  
For a detailed analysis of Quebecor's second quarter 2013 results,
please refer to the Management Discussion and Analysis and
consolidated financial statements of Quebecor, available on the
Corporation's website at
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 second quarter
2013 results on August 8, 2013, at 11:00 a.m. EDT. 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 81457#. A tape recording of the call will be available
from August 8 to September 14, 2013 by dialling 1 877 293-8133,
conference number 1049253#, access code for participants 81457#. 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 that could cause the
Corporation's actual results for future periods to differ materially
from those set forth in the forward-looking statements.
Forward-looking statements may be identified by the use of the
conditional or by forward-looking terminology such as the terms
"plans," "expects," "may," "anticipates," "intends," "estimates,"
"projects," "seeks," "believes," or similar terms, variations of such
terms or the negative of such terms. Certain factors that may cause
actual results to differ from current expectations include
seasonality (including seasonal fluctuations in customer orders),
operating risk (including fluctuations in demand for Quebecor's
products and pricing actions by competitors), 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 www.sedar.com and www.quebecor.com including, in
particular, the "Risks and Uncertainties" section of Quebecor's
Management Discussion and Analysis for the year ended December 31,
2012.  
The forward-looking statements in this press release reflect
Quebecor's expectations as of August 8, 2013 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 segment, 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 (TVA Publications 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 Inc.), DVD, Blu-ray disc and video game rental and
retailing (Le SuperClub Videotron ltee), the printing and
distribution of community newspapers and flyers (Quebecor Media
Printing Inc., Quebecor Media Network Inc.), outdoor advertising
(Quebecor Media Out of Home), news content production and
distribution (QMI Agency), and multiplatform advertising solutions
(QMI Sales).  
DEFINITIONS  
Operating income  
In its analysis of operating results, the Corporation defines
operating income, as reconciled to net (loss) income under IFRS, as
net (loss) income before amortization, financial expenses, (loss)
gain on valuation and translation of financial instruments, charge
for restructuring of operations, impairment of assets and other
special items, charge for impairment of goodwill, (loss) gain on debt
refinancing, income tax, and income from discontinued operations.
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 impairment 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 of the Quebecor Media subsidiary. 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
(loss) 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 (loss) income measure used in the condensed consolidated financial 
 statements                                                                 
(in millions of Canadian dollars)                                           
                                 Three months ended        Six months ended 
                                            June 30                 June 30 
----------------------------------------------------------------------------
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                                   2013        2012        2013        2012 
----------------------------------------------------------------------------
                                                                            
Operating (loss) income:                                                    
  Telecommunications          $   322.1   $   299.1   $   636.6   $   600.0 
  News Media                       23.9        35.6        29.6        51.3 
  Broadcasting                     18.1        18.5        16.2        11.5 
  Leisure and Entertainment        (0.6)       (1.1)       (2.3)       (0.8)
  Interactive Technologies                                                  
   and Communications               4.4         3.0         5.7         6.0 
  Head Office                      (0.1)       (1.5)       (0.5)        3.8 
----------------------------------------------------------------------------
                                  367.8       353.6       685.3       671.8 
Amortization                     (164.8)     (144.1)     (327.4)     (286.0)
Financial expenses                (98.4)      (81.8)     (195.6)     (167.4)
(Loss) gain on valuation and                                                
 translation of financial                                                   
 instruments                     (202.7)       41.9      (195.0)      114.1 
Restructuring of operations,                                                
 impairment of assets and                                                   
 other special items               (7.6)       12.0        (9.2)       10.9 
Impairment of goodwill                -           -           -       (14.5)
(Loss) gain on debt                                                         
 refinancing                      (18.9)          -       (18.9)        2.4 
Income tax recovery                                                         
 (expense)                         30.6       (50.3)       10.5       (89.7)
Income from discontinued                                                    
 operations                        38.1         2.0        40.1         4.9 
----------------------------------------------------------------------------
Net (loss) income             $   (55.9)  $   133.3   $   (10.2)  $   246.5 
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Adjusted income from continuing operations  
The Corporation defines adjusted income from continuing operations,
as reconciled to net (loss) income attributable to shareholders under
IFRS, as net (loss) income attributable to shareholders before (loss)
gain on valuation and translation of financial instruments, charge
for restructuring of operations, impairment of assets and other
special items, charge for impairment of goodwill and (loss) gain on
debt refinancing, net of income tax related to adjustments, net
(loss) income attributable to non-controlling interests related to
adjustments, and income from discontinued operations attributable to
shareholders. 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 operations 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 (loss) 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 (loss) income attributable to        
 shareholders measure used in the condensed consolidated financial          
 statements                                                                 
(in millions of Canadian dollars)                                           
                                 Three months ended        Six months ended 
                                            June 30                 June 30 
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                                   2013        2012        2013        2012 
----------------------------------------------------------------------------
                                                                            
Adjusted income from                                                        
 continuing operations        $    52.9   $    46.1   $    84.5   $    82.3 
(Loss) gain on valuation and                                                
 translation of financial                                                   
 instruments                     (202.7)       41.9      (195.0)      114.1 
Restructuring of operations,                                                
 impairment of assets and                                                   
 other special items               (7.6)       12.0        (9.2)       10.9 
Impairment of goodwill                -           -           -       (14.5)
(Loss) gain on debt                                                         
 refinancing                      (18.9)          -       (18.9)        2.4 
Income taxes related to                                                     
 adjustments(1)                    59.9       (13.2)       56.6       (26.5)
Discontinued operations            38.1         2.0        40.1         4.9 
Net income (loss)                                                           
 attributable to non-                                                       
 controlling interest                                                       
 related to adjustments            33.2       (23.3)       32.4       (36.7)
----------------------------------------------------------------------------
Net (loss) income                                                           
 attributable to                                                            
 shareholders                 $   (45.1)  $    65.5   $    (9.5)  $   136.9 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Includes impact of fluctuations in income tax 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, and
cable 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)       
                                                                            
(unaudited)           Three months ended June 30   Six months ended June 30 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                           2013             2012      2013             2012 
----------------------------------------------------------------------------
                                      (restated)                 (restated) 
                                                                            
Revenues            $   1,088.4    $     1,079.8 $ 2,136.2    $     2,137.1 
                                                                            
Employee costs            268.1            266.5     539.4            543.1 
Purchase of goods                                                           
 and services             452.5            459.7     911.5            922.2 
Amortization              164.8            144.1     327.4            286.0 
Financial expenses         98.4             81.8     195.6            167.4 
Loss (gain) on                                                              
 valuation and                                                              
 translation of                                                             
 financial                                                                  
 instruments              202.7            (41.9)    195.0           (114.1)
Restructuring of                                                            
 operations,                                                                
 impairment of                                                              
 assets and other                                                           
 special items              7.6            (12.0)      9.2            (10.9)
Impairment of                                                               
 goodwill                     -                -         -             14.5 
Loss (gain) on debt                                                         
 refinancing               18.9                -      18.9             (2.4)
                    --------------------------------------------------------
(Loss) income before                                                        
 income taxes            (124.6)           181.6     (60.8)           331.3 
Income taxes                                                                
 (recovery):                                                                
  Current                  30.4             20.3      54.6             25.8 
  Deferred                (61.0)            30.0     (65.1)            63.9 
                    --------------------------------------------------------
                          (30.6)            50.3     (10.5)            89.7 
                    --------------------------------------------------------
                                                                            
(Loss) income from                                                          
 continuing                                                                 
 operations               (94.0)           131.3     (50.3)           241.6 
Income from                                                                 
 discontinued                                                               
 operations                38.1              2.0      40.1              4.9 
                    --------------------------------------------------------
Net (loss) income   $     (55.9)   $       133.3 $   (10.2)   $       246.5 
                    --------------------------------------------------------
(Loss) income from                                                          
 continuing                                                                 
 operations                                                                 
 attributable to                                                            
  Shareholders      $     (73.8)   $        64.4 $   (39.7)   $       134.2 
  Non-controlling                                                           
   interests              (20.2)            66.9     (10.6)           107.4 
                    --------------------------------------------------------
                    --------------------------------------------------------
Net (loss) income                                                           
 attributable to                                                            
  Shareholders      $     (45.1)   $        65.5 $    (9.5)   $       136.9 
  Non-controlling                                                           
   interests              (10.8)            67.8      (0.7)           109.6 
                    --------------------------------------------------------
                    --------------------------------------------------------
Earnings per share                                                          
 attributable to                                                            
 shareholders                                                               
Basic                                                                       
  From continuing                                                           
   operations       $     (1.19)   $        1.00 $   (0.64)   $        2.11 
  From discontinued                                                         
   operations              0.46             0.02      0.49             0.04 
  Net (loss) income       (0.73)            1.02     (0.15)            2.15 
Diluted                                                                     
  From continuing                                                           
   operations             (1.19)            1.00     (0.64)            2.10 
  From discontinued                                                         
   operations              0.46             0.02      0.49             0.04 
  Net (loss) income       (0.73)            1.02     (0.15)            2.14 
                    --------------------------------------------------------
                    --------------------------------------------------------
Weighted average                                                            
 number of shares                                                           
 outstanding (in                                                            
 millions)                 62.1             63.5      62.2             63.5 
Weighted average                                                            
 number of diluted                                                          
 shares (in                                                                 
 millions)                 62.1             63.6      62.2             63.6 
                    --------------------------------------------------------
                    --------------------------------------------------------
                                                                            
                                                                            
 

 
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                             
                                                                            
(in millions of Canadian dollars)                                           
                                                                            
(unaudited)          Three months ended June 30    Six months ended June 30 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                           2013            2012        2013            2012 
----------------------------------------------------------------------------
                                     (restated)                  (restated) 
                                                                            
Net (loss) income    $    (55.9)  $       133.3   $   (10.2)  $       246.5 
Other comprehensive                                                         
 (loss) income:                                                             
  Items that may be                                                         
   reclassified to                                                          
   income:                                                                  
    Gain (loss) on                                                          
     translation of                                                         
     net investments                                                        
     in foreign                                                             
     operations             4.1            (0.4)        5.2            (0.8)
    Cash flow hedges:                                                       
      (Loss) gain on                                                        
       valuation of                                                         
       derivative                                                           
       financial                                                            
       instruments         (2.6)            6.5       (28.5)           25.4 
      Deferred income                                                       
       taxes               (4.2)           (3.2)       (3.4)           (0.9)
  Reclassification to                                                       
   income:                                                                  
  Gain related to                                                           
   cash flow hedges        (6.5)              -        (6.5)           (3.3)
  Deferred income                                                           
   taxes                    0.2               -         0.2            (1.2)
                     -------------------------------------------------------
                           (9.0)            2.9       (33.0)           19.2 
                     -------------------------------------------------------
Comprehensive (loss)                                                        
 income              $    (64.9)  $       136.2   $   (43.2)  $       265.7 
                     -------------------------------------------------------
                     -------------------------------------------------------
Comprehensive (loss)                                                        
 income attributable                                                        
 to                                                                         
  Shareholders       $    (51.9)  $        67.1   $   (34.4)  $       147.4 
  Non-controlling                                                           
   interests              (13.0)           69.1        (8.8)          118.3 
                     -------------------------------------------------------
                     -------------------------------------------------------
                                                                            
                                                                            
                                                                            
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
SEGMENTED INFORMATION                                                       
                                                                            
(in millions of Canadian dollars)                                           
(unaudited)                                                                 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                             Three months ended June 30,2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                    Leisure 
                                                                        and 
                          Telecommu-         News       Broad-       Enter- 
                           nications        Media      casting     tainment 
----------------------------------------------------------------------------
                                                                            
Revenues                 $     678.0  $     229.2  $     113.6  $      62.6 
Employee costs                  95.0         81.8         36.4         13.9 
Purchase of goods and                                                       
 services                      260.9        123.5         59.1         49.3 
----------------------------------------------------------------------------
Operating income(1)            322.1         23.9         18.1         (0.6)
Amortization                                                                
Financial expenses                                                          
Loss on valuation and                                                       
 translation of                                                             
 financial instruments                                                      
Restructuring of                                                            
 operations, impairment                                                     
 of assets and other                                                        
 special items                                                              
Loss on debt refinancing                                                    
----------------------------------------------------------------------------
Loss before income taxes                                                    
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Additions to property,                                                      
 plant and equipment     $     126.8  $       2.3  $       4.3  $       0.5 
Additions to intangible                                                     
 assets                         10.8          2.9          0.3          2.0 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
 
                                                                          
                                          Three months ended June 30,2013 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                             Interactive                                  
                                 Techno-            Head                  
                              logies and          office                  
                                Communi-      and Inter-                  
                                 cations        segments            Total 
--------------------------------------------------------------------------
                                                                          
Revenues                   $        35.8   $       (30.8)   $     1,088.4 
Employee costs                      23.4            17.6            268.1 
Purchase of goods and                                                     
 services                            8.0           (48.3)           452.5 
--------------------------------------------------------------------------
Operating income(1)                  4.4            (0.1)           367.8 
Amortization                                                        164.8 
Financial expenses                                                   98.4 
Loss on valuation and                                                     
 translation of                                                           
 financial instruments                                              202.7 
Restructuring of                                                          
 operations, impairment                                                   
 of assets and other                                                      
 special items                                                        7.6 
Loss on debt refinancing                                             18.9 
--------------------------------------------------------------------------
Loss before income taxes                                    $      (124.6)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
Additions to property,                                                    
 plant and equipment       $         0.4   $         0.8    $       135.1 
Additions to intangible                                                   
 assets                                -            (0.2)            15.8 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
                                                                          
                                                                          
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                            Three months ended June 30, 2012
                                                                  (restated)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                    Leisure 
                                                                        and 
                          Telecommu-         News       Broad-       Enter- 
                           nications        Media      casting     tainment 
----------------------------------------------------------------------------
                                                                            
Revenues                 $     647.2  $     254.8  $     113.6  $      62.9 
Employee costs                  89.0         91.6         37.5         13.6 
Purchase of goods and                                                       
 services                      259.1        127.6         57.6         50.4 
----------------------------------------------------------------------------
Operating income(1)            299.1         35.6         18.5         (1.1)
Amortization                                                                
Financial expenses                                                          
Gain on valuation and                                                       
 translation of                                                             
 financial instruments                                                      
Restructuring of                                                            
 operations, impairment                                                     
 of assets and other                                                        
 special items                                                              
----------------------------------------------------------------------------
Income before income                                                        
 taxes                                                                      
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Additions to property,                                                      
 plant and equipment     $     161.5  $       1.6  $       6.8  $       0.9 
Additions to intangible                                                     
 assets                         14.6          3.3          0.7          2.1 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
                                         Three months ended June 30, 2012 
                                                               (restated) 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                             Interactive                                  
                                 Techno-            Head                  
                              logies and          office                  
                                Communi-      and Inter-                  
                                 cations        segments            Total 
--------------------------------------------------------------------------
                                                                          
Revenues                   $        39.4   $       (38.1)   $     1,079.8 
Employee costs                      24.2            10.6            266.5 
Purchase of goods and                                                     
 services                           12.2           (47.2)           459.7 
--------------------------------------------------------------------------
Operating income(1)                  3.0            (1.5)           353.6 
Amortization                                                        144.1 
Financial expenses                                                   81.8 
Gain on valuation and                                                     
 translation of                                                           
 financial instruments                                              (41.9)
Restructuring of                                                          
 operations, impairment                                                   
 of assets and other                                                      
 special items                                                      (12.0)
--------------------------------------------------------------------------
Income before income                                                      
 taxes                                                      $       181.6 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
Additions to property,                                                    
 plant and equipment       $         1.1   $         0.7    $       172.6 
Additions to intangible                                                   
 assets                                -            (0.5)            20.2 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                            
(1)  The Chief Executive Officer uses operating income as the measure of    
     profit to assess the performance of each segment. Operating income is  
     referred as a non-IFRS measure and is defined as net (loss) income     
     before amortization, financial expenses, loss (gain) on valuation and  
     translation of financial instruments, restructuring of operations,     
     impairment of assets and other special items, impairment of goodwill,  
     loss (gain) on debt refinancing, income taxes and income from          
     discontinued operations.                                               
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                               Six months ended June 30,2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                    Leisure 
                                                                        and 
                          Telecommu-         News       Broad-       Enter- 
                           nications        Media      casting     tainment 
----------------------------------------------------------------------------
                                                                            
Revenues                 $   1,342.4  $     436.8  $     226.6  $     123.4 
Employee costs                 189.9        163.4         74.0         28.1 
Purchase of goods and                                                       
 services                      515.9        243.8        136.4         97.6 
----------------------------------------------------------------------------
Operating income(1)            636.6         29.6         16.2         (2.3)
Amortization                                                                
Financial expenses                                                          
Loss on valuation and                                                       
 translation of                                                             
 financial instruments                                                      
Restructuring of                                                            
 operations, impairment                                                     
 of assets and other                                                        
 special items                                                              
Loss on debt refinancing                                                    
----------------------------------------------------------------------------
Loss before income taxes                                                    
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Additions to property,                                                      
 plant and equipment     $     272.4  $       4.7  $       9.6  $       1.0 
Additions to intangible                                                     
 assets                         23.8          3.9          0.9          2.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
                                            Six months ended June 30,2013 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                             Interactive                                  
                                 Techno-            Head                  
                              logies and          office                  
                                Communi-      and Inter-                  
                                 cations        segments            Total 
--------------------------------------------------------------------------
                                                                          
Revenues                   $        71.0   $       (64.0)   $     2,136.2 
Employee costs                      48.4            35.6            539.4 
Purchase of goods and                                                     
 services                           16.9           (99.1)           911.5 
--------------------------------------------------------------------------
Operating income(1)                  5.7            (0.5)           685.3 
Amortization                                                        327.4 
Financial expenses                                                  195.6 
Loss on valuation and                                                     
 translation of                                                           
 financial instruments                                              195.0 
Restructuring of                                                          
 operations, impairment                                                   
 of assets and other                                                      
 special items                                                        9.2 
Loss on debt refinancing                                             18.9 
--------------------------------------------------------------------------
Loss before income taxes                                    $       (60.8)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
Additions to property,                                                    
 plant and equipment       $         1.2   $         1.0    $       289.9 
Additions to intangible                                                   
 assets                                -            (0.1)            31.2 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
                                                                          
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                              Six months ended June 30, 2012
                                                                  (restated)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                    Leisure 
                                                                        and 
                          Telecommu-         News       Broad-       Enter- 
                           nications        Media      casting     tainment 
----------------------------------------------------------------------------
                                                                            
Revenues                 $   1,288.5  $     487.9  $     229.0  $     130.0 
Employee costs                 180.0        182.8         78.2         27.4 
Purchase of goods and                                                       
 services                      508.5        253.8        139.3        103.4 
----------------------------------------------------------------------------
Operating income(1)            600.0         51.3         11.5         (0.8)
Amortization                                                                
Financial expenses                                                          
Gain on valuation and                                                       
 translation of                                                             
 financial instruments                                                      
Restructuring of                                                            
 operations, impairment                                                     
 of assets and other                                                        
 special items                                                              
Impairment of goodwill                                                      
Gain on debt refinancing                                                    
----------------------------------------------------------------------------
Income before income                                                        
 taxes                                                                      
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Additions to property,                                                      
 plant and equipment     $     345.0  $       3.5  $      12.1  $       1.8 
Additions to intangible                                                     
 assets                         33.1          6.1          1.3          2.8 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
------------------------------------------------------------------------- 
------------------------------------------------------------------------- 
                                                                          
                                           Six months ended June 30, 2012 
                                                               (restated) 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                             Interactive                                  
                                 Techno-            Head                  
                              logies and          office                  
                                Communi-      and Inter-                  
                                 cations        segments            Total 
--------------------------------------------------------------------------
                                                                          
Revenues                   $        76.0   $       (74.3)   $     2,137.1 
Employee costs                      48.0            26.7            543.1 
Purchase of goods and                                                     
 services                           22.0          (104.8)           922.2 
--------------------------------------------------------------------------
Operating income(1)                  6.0             3.8            671.8 
Amortization                                                        286.0 
Financial expenses                                                  167.4 
Gain on valuation and                                                     
 translation of                                                           
 financial instruments                                             (114.1)
Restructuring of                                                          
 operations, impairment                                                   
 of assets and other                                                      
 special items                                                      (10.9)
Impairment of goodwill                                               14.5 
Gain on debt refinancing                                             (2.4)
--------------------------------------------------------------------------
Income before income                                                      
 taxes                                                      $       331.3 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                          
Additions to property,                                                    
 plant and equipment       $         2.2   $         1.2    $       365.8 
Additions to intangible                                                   
 assets                                -            (1.0)            42.3 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                                                            
(1)  The Chief Executive Officer uses operating income as the measure of    
     profit to assess the performance of each segment. Operating income is  
     referred as a non-IFRS measure and is defined as net (loss) income     
     before amortization, financial expenses, loss (gain) on valuation and  
     translation of financial instruments, restructuring of operations,     
     impairment of assets and other special items, impairment of goodwill,  
     loss (gain) on debt refinancing, income taxes and income from          
     discontinued operations.                                               
                                                                            
                                                                            
                                                                            
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
CONSOLIDATED STATEMENTS OF EQUITY                                           
                                                                            
(in millions of Canadian dollars)                                           
(unaudited)                                                                 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
                                        Equity attributable to shareholders 
                ------------------------------------------------------------
                                                                            
                                                                Accumulated 
                                              Equity                 other  
                                           component                   com- 
                                                  of             prehensive 
                 Capital   Contributed   convertible  Retained       income 
                   stock       surplus    debentures  earnings       (loss) 
----------------------------------------------------------------------------
                                                                            
                                                                            
Balance as of                                                               
 December 31,                                                               
 2011,                                                                      
  as previously                                                             
   reported      $ 339.5  $        0.9  $          - $ 1,077.2 $        8.6 
Changes in                                                                  
 accounting                                                                 
 policies              -             -             -      48.4        (49.6)
----------------------------------------------------------------------------
Balance as of                                                               
 December 31,                                                               
 2011, as                                                                   
 restated          339.5           0.9             -   1,125.6        (41.0)
Net income             -             -             -     136.9            - 
Other                                                                       
 comprehensive                                                              
 income                -             -             -         -         10.5 
Issuance of                                                                 
 shares of a                                                                
 subsidiary          3.6           1.5             -         -            - 
Repurchase of                                                               
 Class B shares     (1.1)            -             -      (4.2)           - 
Acquisition of                                                              
 non-controlling                                                            
 interests             -          (0.1)            -         -            - 
Dividends              -             -             -      (6.3)           - 
----------------------------------------------------------------------------
Balance as of                                                               
 June 30, 2012     342.0           2.3             -   1,252.0        (30.5)
Net income                                                                  
 (loss)                -             -             -      24.2            - 
Other                                                                       
 comprehensive                                                              
 loss                  -             -             -         -         (9.4)
Repurchase of                                                               
 Class B shares     (6.9)            -             -     (26.1)           - 
Acquisition of                                                              
 non-controlling                                                            
 interests             -             -             -    (619.2)       (10.4)
Issuance of                                                                 
 convertible                                                                
 debentures            -             -         398.3         -            - 
Dividends              -             -             -      (6.3)           - 
----------------------------------------------------------------------------
Balance as of                                                               
 December 31,                                                               
 2012              335.1           2.3         398.3     624.6        (50.3)
Net loss               -             -             -      (9.5)           - 
Other                                                                       
 comprehensive                                                              
 loss                  -             -             -         -        (24.9)
Repurchase of                                                               
 Class B shares     (3.8)            -             -     (17.8)           - 
Dividends              -             -             -      (6.2)           - 
Business                                                                    
 acquisition           -             -             -         -            - 
----------------------------------------------------------------------------
Balance as of                                                               
 June 30, 2013   $ 331.3  $        2.3  $      398.3 $   591.1 $      (75.2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
 
                                                  
--------------------------------------------------
                          Equity                  
                    attributable                  
                         to non-                  
                     controlling            Total 
                       interests           equity 
                                                  
                                                  
--------------------------------------------------
                                                  
                                                  
Balance as of                                     
 December 31,                                     
 2011,                                            
  as previously                                   
   reported        $     1,444.4    $     2,870.6 
Changes in                                        
 accounting                                       
 policies                   (1.5)            (2.7)
--------------------------------------------------
Balance as of                                     
 December 31,                                     
 2011, as                                         
 restated                1,442.9          2,867.9 
Net income                 109.6            246.5 
Other                                             
 comprehensive                                    
 income                      8.7             19.2 
Issuance of                                       
 shares of a                                      
 subsidiary                    -              5.1 
Repurchase of                                     
 Class B shares                -             (5.3)
Acquisition of                                    
 non-controlling                                  
 interests                   0.1                - 
Dividends                  (22.7)           (29.0)
--------------------------------------------------
Balance as of                                     
 June 30, 2012           1,538.6          3,104.4 
Net income                                        
 (loss)                    (15.4)             8.8 
Other                                             
 comprehensive                                    
 loss                       (3.6)           (13.0)
Repurchase of                                     
 Class B shares                -            (33.0)
Acquisition of                                    
 non-controlling                                  
 interests                (870.4)        (1,500.0)
Issuance of                                       
 convertible                                      
 debentures                    -            398.3 
Dividends                  (17.9)           (24.2)
--------------------------------------------------
Balance as of                                     
 December 31,                                     
 2012                      631.3          1,941.3 
Net loss                    (0.7)           (10.2)
Other                                             
 comprehensive                                    
 loss                       (8.1)           (33.0)
Repurchase of                                     
 Class B shares                -            (21.6)
Dividends                  (12.5)           (18.7)
Business                                          
 acquisition                 0.3              0.3 
--------------------------------------------------
Balance as of                                     
 June 30, 2013     $       610.3    $     1,858.1 
--------------------------------------------------
--------------------------------------------------
                                                  
                                                  
                                                  
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
CONSOLIDATED STATEMENTS OF CASH FLOWS                                       
                                                                            
(in millions of Canadian dollars)                                           
(unaudited)                  Three months ended            Six months ended 
                                        June 30                     June 30 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                             2013          2012          2013          2012 
----------------------------------------------------------------------------
                                     (restated)                  (restated) 
Cash flows related                                                          
 to operating                                                               
 activities                                                                 
  (Loss) income from                                                        
   continuing                                                               
   operations         $     (94.0)  $     131.3   $     (50.3)  $     241.6 
  Adjustments for:                                                          
    Amortization of                                                         
     property, plant                                                        
     and equipment          128.6         109.7         255.0         218.6 
    Amortization of                                                         
     intangible                                                             
     assets                  36.2          34.4          72.4          67.4 
    Loss (gain) on                                                          
     valuation and                                                          
     translation of                                                         
     financial                                                              
     instruments            202.7         (41.9)        195.0        (114.1)
    Gain on disposal                                                        
     of assets                  -         (12.9)            -         (12.9)
    Impairment of                                                           
     assets                   1.3             -           1.7             - 
    Impairment of                                                           
     goodwill                   -             -             -          14.5 
    Loss (gain) on                                                          
     debt                                                                   
     refinancing             18.9             -          18.9          (2.4)
    Amortization of                                                         
     financing costs                                                        
     and long-term                                                          
     debt discount            3.2           3.6           6.3           7.3 
    Deferred income                                                         
     taxes                  (61.0)         30.0         (65.1)         63.9 
    Other                    (2.0)         (1.9)         (0.2)            - 
                    --------------------------------------------------------
                            233.9         252.3         433.7         483.9 
  Net change in non-                                                        
   cash balances                                                            
   related to                                                               
   operating                                                                
   activities               (89.7)        (28.4)       (167.6)        (26.5)
                    --------------------------------------------------------
Cash flows provided                                                         
 by continuing                                                              
 operating                                                                  
 activities                 144.2         223.9         266.1         457.4 
                    --------------------------------------------------------
Cash flows related                                                          
 to investing                                                               
 activities                                                                 
  Business                                                                  
   acquisitions              (1.6)         (0.8)         (1.6)         (0.8)
  Business disposals         52.8             -          52.8             - 
  Additions to                                                              
   property, plant                                                          
   and equipment           (135.1)       (172.6)       (289.9)       (365.8)
  Additions to                                                              
   intangible assets        (15.8)        (20.2)        (31.2)        (42.3)
  Proceeds from                                                             
   disposals of                                                             
   assets                     9.7          22.2          10.9          23.4 
  Net change in cash                                                        
   held in trust             (5.8)            -          (5.8)            - 
  Other                      (0.4)         (1.0)            -          (1.0)
                    --------------------------------------------------------
Cash flows used in                                                          
 continuing                                                                 
 investing                                                                  
 activities                 (96.2)       (172.4)       (264.8)       (386.5)
                    --------------------------------------------------------
Cash flows related                                                          
 to financing                                                               
 activities                                                                 
  Net change in bank                                                        
   indebtedness               0.7           4.7           0.4           2.1 
  Net change under                                                          
   revolving                                                                
   facilities                15.7         (24.2)         10.0         (22.9)
  Issuance of long-                                                         
   term debt, net of                                                        
   financing fees           394.8             -         394.8         787.6 
  Repayments of                                                             
   long-term debt            (5.6)       (190.9)        (11.1)       (709.0)
  Repayment of                                                              
   liability                                                                
   component of                                                             
   convertible                                                              
   debentures                (6.7)            -          (6.7)            - 
  Settlement of                                                             
   hedging contracts         16.3          (3.6)         (8.5)        (44.1)
  Issuance of Class                                                         
   B shares                     -             -             -           3.6 
  Repurchase of                                                             
   Class B shares           (15.4)         (4.9)        (21.6)         (5.3)
  Dividends                  (6.2)         (6.3)         (6.2)         (6.3)
  Dividends paid to                                                         
   non-controlling                                                          
   shareholders              (6.3)        (11.4)        (12.5)        (22.7)
                    --------------------------------------------------------
Cash flows provided                                                         
 by (used in)                                                               
 continuing                                                                 
 financing                                                                  
 activities                 387.3        (236.6)        338.6         (17.0)
                    --------------------------------------------------------
Net change in cash                                                          
 and cash                                                                   
 equivalents from                                                           
 continuing                                                                 
 operations                 435.3        (185.1)        339.9          53.9 
Cash flows provided                                                         
 by discontinued                                                            
 operations                   2.5           4.6           4.0           7.2 
Effect of exchange                                                          
 rate changes on                                                            
 cash and cash                                                              
 equivalentsdenomina                                                        
 ted in foreign                                                             
 currencies                   0.4          (0.2)          0.4          (0.2)
Cash and cash                                                               
 equivalents at                                                             
 beginning of period        134.8         385.1         228.7         143.5 
                    --------------------------------------------------------
Cash and cash                                                               
 equivalents at end                                                         
 of period            $     573.0   $     204.4   $     573.0   $     204.4 
                    --------------------------------------------------------
                    --------------------------------------------------------
                                                                            
Cash and cash                                                               
 equivalents consist                                                        
 of                                                                         
  Cash                $      70.7   $      18.4   $      70.7   $      18.4 
  Cash equivalents          502.3         186.0         502.3         186.0 
                    --------------------------------------------------------
                      $     573.0   $     204.4   $     573.0   $     204.4 
                    --------------------------------------------------------
                    --------------------------------------------------------
                                                                            
Interest and taxes                                                          
 reflected as                                                               
 operating                                                                  
 activities                                                                 
  Cash interest                                                             
   payments           $     154.3   $     129.7   $     178.9   $     151.1 
  Cash income tax                                                           
   payments (net of                                                         
   refunds)                   9.0           2.4          45.3           7.5 
                    --------------------------------------------------------
                    --------------------------------------------------------
                                                                            
                                                                            
                                                                            
QUEBECOR INC. AND ITS SUBSIDIARIES                                          
CONSOLIDATED BALANCE SHEETS                                                 
                                                                            
(in millions of Canadian dollars)                                           
(unaudited)                                     June 30         December 31 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Note                                               2013                2012 
----------------------------------------------------------------------------
                                                                 (restated) 
                                                                            
Assets                                                                      
                                                                            
Current assets                                                              
  Cash and cash equivalents            $          573.0    $          228.7 
  Cash held in trust                                5.8                   - 
  Accounts receivable                             545.6               578.7 
  Income taxes                                     28.7                10.6 
  Inventories                                     270.5               255.5 
  Prepaid expenses                                 58.5                38.0 
                                    ----------------------------------------
                                                1,482.1             1,111.5 
Non-current assets                                                          
  Property, plant and equipment                 3,401.3             3,405.8 
  Intangible assets                               907.2               956.7 
  Goodwill                                      3,357.7             3,371.6 
  Derivative financial instruments                106.6                35.7 
  Deferred income taxes                            35.3                23.9 
  Other assets                                    103.9               102.6 
                                    ----------------------------------------
                                                7,912.0             7,896.3 
                                    ----------------------------------------
Total assets                           $        9,394.1    $        9,007.8 
                                    ----------------------------------------
                                    ----------------------------------------
                                                                            
Liabilities and equity                                                      
                                                                            
Current liabilities                                                         
  Bank indebtedness                    $            1.7    $            1.3 
  Accounts payable and accrued                                              
   charges                                        625.1               804.5 
  Provisions                                       34.2                45.9 
  Deferred revenue                                290.6               289.0 
  Income taxes                                     61.2                33.9 
  Derivative financial instruments                114.9                28.5 
  Current portion of long-term debt               422.1                22.2 
                                    ----------------------------------------
                                                1,549.8             1,225.3 
Non-current liabilities                                                     
  Long-term debt                                4,892.9             4,507.8 
  Derivative financial instruments                 95.1               270.1 
  Other liabilities                               450.7               469.2 
  Deferred income taxes                           547.5               594.1 
                                    ----------------------------------------
                                                5,986.2             5,841.2 
Equity                                                                      
  Capital stock                                   331.3               335.1 
  Contributed surplus                               2.3                 2.3 
  Equity component of convertible                                           
   debentures                                     398.3               398.3 
  Retained earnings                               591.1               624.6 
  Accumulated other comprehensive                                           
   loss                                           (75.2)              (50.3)
                                    ----------------------------------------
  Equity attributable to                                                    
   shareholders                                 1,247.8             1,310.0 
  Non-controlling interests                       610.3               631.3 
                                    ----------------------------------------
                                                1,858.1             1,941.3 
                                    ----------------------------------------
                                                                            
Total liabilities and equity           $        9,394.1    $        9,007.8 
                                    ----------------------------------------
                                    ----------------------------------------

Contacts:
Jean-Francois Pruneau
Senior Vice President and 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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