Third quarter 2020 highlights
- Revenues:
$1.11 billion in the third quarter of 2020, up$38.3 million (3.6%) from the same period of 2019. - Adjusted EBITDA:1
$513.4 million , up$4.1 million (0.8%). - Net income attributable to shareholders:
$140.9 million ($0.56 per basic share) in the third quarter of 2020, compared with$178.5 million ($0.70 per basic share) in the same period of 2019, a decrease of$37.6 million ($0.14 per basic share). - Adjusted income from continuing operating activities:2
$173.1 million ($0.69 per basic share) in the third quarter of 2020, compared with$173.8 million ($0.68 per basic share) in the same period of 2019, a decrease of$0.7 million (increase of$0.01 per basic share). - Cash flows from operations:3
$346.1 million , up$13.7 million (4.1%). - The Telecommunications segment grew its revenues by
$61.2 million (7.0%) and its adjusted EBITDA by$15.9 million (3.4%) in the third quarter of 2020. Videotron Ltd. ("Videotron") significantly increased its revenues from customer equipment sales ($60.9 million or 87.5%), mobile telephony ($12.7 million or 8.2%) and Internet access ($6.2 million or 2.2%) in the third quarter of 2020.Videotron's total average billing per unit ("ABPU") was$49.96 in the third quarter of 2020, compared with$50.49 in the same period of 2019, a$0.53 (‑1.0%) decrease. Mobile ABPU was$50.98 in the third quarter of 2020, compared with$53.28 in the same period of 2019, a$2.30 (‑4.3%) decrease due in part to a decrease in overage and roaming revenues due to the COVID‑19 health crisis and the popularity of bring your own device ("BYOD") plans.- There was a net increase of 4,700 revenue‑generating units ("RGUs") (0.1%) in the third quarter of 2020, including 47,700 connections (3.4%) to the mobile telephony service and 20,500 subscriptions (1.2%) to the cable Internet access service.
"Although the health situation and economic environment created by the pandemic have been posing major challenges worldwide for months now and some of our business units continue to be affected,
"Connectivity and information needs have never been greater, and we have continued to play a leading role in this area by providing families and businesses across
"The robustness and reliability of
"
"As expected, the pandemic continued to impact TVA Group Inc.'s ("
"TVA Group grew its total market share by 3.2 points to 41.5% in the third quarter of 2020. The increase was driven by the specialty channels, which posted a 3.3‑point gain, led by the all‑news channel LCN, which continued its growth with a 2.0‑point gain to remain the most‑watched specialty channel in
"In our film production and audiovisual services business, with the gradual resumption of film shoots during the quarter we are now able to offer our clients our full complement of services again.
"The current situation is forcing us to stay agile and to adapt, while remaining focused on our priorities and the disciplined execution of our strategies. We have maintained our customer‑centric vision and we continue to offer best‑in‑class products and services, while supporting the employees who have made
1 See "Adjusted EBITDA" under "Definitions." | |||||||||||
2 See "Adjusted income from continuing operating activities" under "Definitions." | |||||||||||
3 See "Cash flows from operations" under "Definitions." | |||||||||||
4 See "consolidated net debt leverage ratio" under "Definitions" |
COVID‑19 health crisis
The COVID‑19 pandemic is having a significant impact on the economic environment in
Non IFRS financial measures
The Corporation reviewed the nature and definition of its non‑standardized financial measures in the first quarter of 2020. As a result, "cash flows from segment operations" has been abandoned and replaced by the new "cash flows from operations" metric. This metric will henceforth be used to measure the cash flows generated by the operations of all the business segments, on a consolidated basis, in addition to the cash flows from operations generated by each segment. In the third quarter of 2020, the Corporation added the "consolidated net debt leverage ratio" measure, which serves to evaluate the Corporation's financial leverage and is used by management and the Board of Directors in decisions on the Corporation's capital structure, including its financing strategy, and in managing debt maturity risks. The definitions of these new measures are provided under "Definitions" below.
Financial tables
Table 1 | ||||||||||
(in millions of Canadian dollars, except per share data) | ||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||
Revenues | $ 1,117.7 | $ 1,073.4 | $ 1,053.2 | $ 1,036.1 | $ 1,014.7 | |||||
Adjusted EBITDA | 513.4 | 509.3 | 474.0 | 440.1 | 424.4 | |||||
Income from continuing operating activities attributable to shareholders | 140.9 | 178.5 | 186.2 | 173.2 | 5.6 | |||||
Net income attributable to shareholders | 140.9 | 178.5 | 187.1 | 178.6 | 6.8 | |||||
Adjusted income from continuing operating activities | 173.1 | 173.8 | 141.5 | 103.3 | 97.1 | |||||
Per basic share: | ||||||||||
Income from continuing operating | 0.56 | 0.70 | 0.80 | 0.72 | 0.02 | |||||
Net income attributable to | 0.56 | 0.70 | 0.80 | 0.74 | 0.03 | |||||
Adjusted income from continuing | 0.69 | 0.68 | 0.61 | 0.43 | 0.40 |
Table 2 | ||||||||||||||||
Cash flows from operations for the past eight quarters | ||||||||||||||||
(in millions of Canadian dollars) | ||||||||||||||||
Q3‑2020 | Q2‑2020 | Q1‑2020 | Q4‑2019 | Q3‑2019 | Q2‑2019 | Q1‑2019 | Q4‑2018 | |||||||||
Telecommunications | $ | 325.9 | $ | 322.8 | $ | 302.5 | $ | 248.5 | $ | 306.5 | $ | 281.8 | $ | 288.5 | $ | 169.4 |
Media | 17.0 | − | (3.6) | 16.9 | 17.8 | (3.0) | (6.9) | 14.5 | ||||||||
6.7 | 2.1 | (4.7) | 1.8 | 6.0 | (3.1) | (2.3) | 1.7 | |||||||||
Head Office | (3.5) | 1.2 | 0.8 | (6.7) | 2.1 | (0.8) | (3.0) | (5.3) | ||||||||
Total | $ | 346.1 | $ | 326.1 | $ | 295.0 | $ | 260.5 | $ | 332.4 | $ | 274.9 | $ | 276.3 | $ | 180.3 |
2020/2019 third quarter comparison
Revenues:
- Revenues increased in Telecommunications (
$61.2 million or 7.0%). - Revenues decreased in Media (
$10.0 million or ‑6.0% of segment revenues) and inSports and Entertainment ($7.3 million or ‑13.1%).
Adjusted EBITDA:
- Adjusted EBITDA increased in Telecommunications (
$15.9 million or 3.4% of segment adjusted EBITDA) and inSports and Entertainment ($0.7 million or 10.1%). - Adjusted EBITDA decreased in Media (
$7.7 million or ‑23.6%), and there was an unfavourable variance at Head Office ($4.8 million ) due mainly to an increase in the stock‑based compensation charge. - The change in the fair value of
Quebecor Media stock options resulted in a$0 .2 million favourable variance in the stock‑based compensation charge in the third quarter of 2020 compared with the same period of 2019. The change in the fair value ofQuebecor stock options and in the value ofQuebecor stock‑price‑based share units resulted in a$4 .2 million unfavourable variance in the Corporation's stock‑based compensation charge in the third quarter of 2020.
Net income attributable to shareholders:
- The main unfavourable variances were:
$24 .6 million unfavourable variance in losses on valuation and translation of financial instruments, including$22 .0 million without any tax consequences;$17 .7 million unfavourable variance in the charge for restructuring of operations and other items;$8 .9 million increase in the depreciation and amortization charge.- The main favourable variances were:
$6 .8 million decrease in the income tax expense;$4 .1 million increase in adjusted EBITDA.
Adjusted income from continuing operating activities:
Cash flows from operations:
Cash flows from continuing operating activities:
2020/2019 year‑to‑date comparison
Revenues:
- Revenues increased in Telecommunications (
$109.9 million or 4.3%). - Revenues decreased in Media (
$65.3 million or ‑12.3% of segment revenues) and inSports and Entertainment ($28.3 million or ‑20.6%).
Adjusted EBITDA:
- Adjusted EBITDA increased in Telecommunications (
$42.0 million or 3.1% of segment adjusted EBITDA) and inSports and Entertainment ($1.9 million or 40.4%). - Adjusted EBITDA decreased in Media (
$2.9 million or ‑7.3%). - The change in the fair value of
Quebecor Media stock options resulted in a$0.4 million favourable variance in the stock‑based compensation charge in the first nine months of 2020 compared with the same period of 2019. The change in the fair value ofQuebecor stock options and the value ofQuebecor stock‑price‑based share units resulted in a$3.9 million favourable variance in the Corporation's stock‑based compensation charge in the first nine months of 2020.
Net income attributable to shareholders:
- The main unfavourable variances were:
$63 .7 million decrease in income from discontinued operations;$25 .6 million increase in the depreciation and amortization charge;$6 .1 million unfavourable variance in the charge for restructuring of operations and other items;$3 .0 million increase in financial expenses;$2 .3 million increase in the income tax expense.- The main favourable variances were:
$40 .8 million increase in adjusted EBITDA.
Adjusted income from continuing operating activities:
Cash flows from operations:
Cash flows from continuing operating activities:
Consolidated net debt leverage ratio
Consolidated net debt leverage ratio: 2.76x at
Normal course issuer bid
On
On
Under the plan, before entering a self‑imposed blackout period, the Corporation may, but is not required to, ask the designated broker to make purchases under the normal course issuer bid. Such purchases shall be made at the discretion of the designated broker, within parameters established by the Corporation prior to the blackout periods. Outside the blackout periods, purchases will be made at the discretion of the Corporation's management.
In the first nine months of 2020, the Corporation purchased and cancelled 4,695,800 Class B Shares for a total cash consideration of $143.4 million (2,672,056 Class B Shares for a total cash consideration of
During the first nine months of 2019, 180,000 Class B Shares were issued upon exercise of stock options for a cash consideration of $2.7 million. Following this transaction, the contributed surplus was increased by
Dividend
On
Convertible debentures
In accordance with the terms of the trust indenture governing the convertible debentures, the quarterly dividend declared on
Detailed financial information
For a detailed analysis of
Conference call for investors and webcast
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
The forward‑looking statements in this press release reflect
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DEFINITIONS
Adjusted EBITDA
In its analysis of operating results, the Corporation defines adjusted EBITDA, as reconciled to net income under International Financial Reporting Standards ("IFRS"), as net income before depreciation and amortization, financial expenses, (loss) gain on valuation and translation of financial instruments, restructuring of operations and other items, income taxes and income from discontinued operations. Adjusted EBITDA 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 IFRS financial 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 adjusted EBITDA in order to assess the performance of its investment in
Table 3 provides a reconciliation of adjusted EBITDA to net income as disclosed in
Table 3 | ||||||||
Reconciliation of the adjusted EBITDA measure used in this press release to the net income measure used in the condensed consolidated financial statements | ||||||||
(in millions of Canadian dollars) | ||||||||
Three months ended | Nine months ended | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Adjusted EBITDA (negative adjusted EBITDA): | ||||||||
Telecommunications | $ | 483.6 | $ | 467.7 | $ | 1,382.7 | $ | 1,340.7 |
Media | 24.9 | 32.6 | 36.6 | 39.5 | ||||
| 7.6 | 6.9 | 6.6 | 4.7 | ||||
Head Office | (2.7) | 2.1 | (0.1) | 0.1 | ||||
513.4 | 509.3 | 1,425.8 | 1,385.0 | |||||
Depreciation and amortization | (195.9) | (187.0) | (589.7) | (564.1) | ||||
Financial expenses | (80.1) | (81.2) | (249.1) | (246.1) | ||||
(Loss) gain on valuation and translation of financial instruments | (18.6) | 6.0 | 8.9 | 8.1 | ||||
Restructuring of operations and other items | (18.9) | (1.2) | (33.1) | (27.0) | ||||
Income taxes | (56.4) | (63.2) | (147.7) | (145.4) | ||||
Income from discontinued operations | − | − | 33.8 | 97.5 | ||||
Net income | $ | 143.5 | $ | 182.7 | $ | 448.9 | $ | 508.0 |
Adjusted income from continuing operating activities
The Corporation defines adjusted income from continuing operating activities, as reconciled to net income attributable to shareholders under IFRS, as net income attributable to shareholders before gain (loss) on valuation and translation of financial instruments, restructuring of operations and other items, net of income tax related to adjustments and net income attributable to non‑controlling interest related to adjustments, and before the income from discontinued operations attributable to shareholders. Adjusted income from continuing operating activities, 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 uses adjusted income from continuing operating activities to analyze trends in the performance of its businesses. The above‑listed items are excluded from the calculation of this measure because they impair the comparability of financial results. Adjusted income from continuing operating activities is more representative for forecasting income. The Corporation's definition of adjusted income from continuing operating activities may not be identical to similarly titled measures reported by other companies.
Table 4 provides a reconciliation of adjusted income from continuing operating activities to the net income attributable to shareholders' measure used in
Table 4 | ||||||||
Reconciliation of the adjusted income from continuing operating activities measure used in this press release to the net income attributable to shareholders' measure used in the condensed consolidated financial statements | ||||||||
(in millions of Canadian dollars) | ||||||||
Three months ended | Nine months ended | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Adjusted income from continuing operating activities | $ | 173.1 | $ | 173.8 | $ | 429.5 | $ | 421.4 |
(Loss) gain on valuation and translation of financial instruments | (18.6) | 6.0 | 8.9 | 8.1 | ||||
Restructuring of operations and other items | (18.9) | (1.2) | (33.1) | (27.0) | ||||
Income taxes related to adjustments1 | 4.5 | (0.1) | 7.0 | 6.6 | ||||
Net income attributable to non‑controlling interest related to adjustments | 0.8 | − | 1.3 | 1.1 | ||||
Discontinued operations | − | − | 33.8 | 97.5 | ||||
Net income attributable to shareholders | $ | 140.9 | $ | 178.5 | $ | 447.4 | $ | 507.7 |
1 Includes impact of fluctuations in income tax applicable to adjusted items, either for statutory reasons or in connection with tax transactions. |
Cash flows from operations and free cash flows from continuing operating activities
Cash flows from operations
Cash flows from operations represents adjusted EBITDA, less additions to property, plant and equipment and to intangible assets (excluding licence acquisitions and renewals). Cash flows from operations represents funds available for interest and income tax payments, expenditures related to restructuring programs, business acquisitions, licence acquisitions and renewals, payment of dividends, repayment of long‑term debt and share repurchases. Cash flows from operations is not a measure of liquidity that is consistent with IFRS. It is not intended to be regarded as an alternative to IFRS financial performance measures or to the statement of cash flows as a measure of liquidity. Cash flows from operations is used by the Corporation's management and Board of Directors to evaluate cash flows generated by the operations of all of its segments. The Corporation's definition of cash flows from operations may not be identical to similarly titled measures reported by other companies.
Free cash flows from continuing operating activities
Free cash flows from continuing operating activities represents cash flows provided by continuing operating activities calculated in accordance with IFRS, less cash flows used for additions to property, plant and equipment and to intangible assets (excluding expenditures related to licence acquisitions and renewals), plus proceeds from disposal of assets. Free cash flows from continuing operating activities is used by the Corporation's management and Board of Directors to evaluate cash flows generated by the Corporation's operations. Free cash flows from continuing operating activities represents available funds for business acquisitions, licence acquisitions and renewals, payment of dividends, repayment of long‑term debt and share repurchases. Free cash flows from continuing operating activities is not a measure of liquidity that is consistent with IFRS. It is not intended to be regarded as an alternative to IFRS financial performance measures or to the statement of cash flows as a measure of liquidity. The Corporation's definition of free cash flows from continuing operating activities may not be identical to similarly titled measures reported by other companies.
Tables 5 and 6 provide a reconciliation of cash flows from operations and free cash flows from continuing operating activities to cash flows provided by continuing operating activities reported in the condensed consolidated financial statements.
Table 5 | ||||||||
Cash flows from operations | ||||||||
(in millions of Canadian dollars) | ||||||||
Three months ended | Nine months ended | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Adjusted EBITDA (negative adjusted EBITDA) | ||||||||
Telecommunications | $ | 483.6 | $ | 467.7 | $ | 1,382.7 | $ | 1,340.7 |
Media | 24.9 | 32.6 | 36.6 | 39.5 | ||||
| 7.6 | 6.9 | 6.6 | 4.7 | ||||
Head Office | (2.7) | 2.1 | (0.1) | 0.1 | ||||
513.4 | 509.3 | 1,425.8 | 1,385.0 | |||||
Minus | ||||||||
Additions to property, plant and equipment:1 | ||||||||
Telecommunications | (115.7) | (114.8) | (298.2) | (332.0) | ||||
Media | (3.2) | (5.7) | (6.7) | (12.3) | ||||
| (0.1) | (0.1) | (0.2) | (1.1) | ||||
Head Office | (0.8) | (0.1) | (1.3) | (1.3) | ||||
(119.8) | (120.7) | (306.4) | (346.7) | |||||
Additions to intangible assets:2 | ||||||||
Telecommunications | (42.0) | (46.4) | (133.3) | (131.9) | ||||
Media | (4.7) | (9.1) | (16.5) | (19.3) | ||||
| (0.8) | (0.8) | (2.3) | (3.0) | ||||
Head Office | − | 0.1 | (0.1) | (0.5) | ||||
(47.5) | (56.2) | (152.2) | (154.7) | |||||
Cash flows from operations | ||||||||
Telecommunications | 325.9 | 306.5 | 951.2 | 876.8 | ||||
Media | 17.0 | 17.8 | 13.4 | 7.9 | ||||
| 6.7 | 6.0 | 4.1 | 0.6 | ||||
Head Office | (3.5) | 2.1 | (1.5) | (1.7) | ||||
$ | 346.1 | $ | 332.4 | $ | 967.2 | $ | 883.6 | |
1 Reconciliation to cash flows used for additions to property, plant | Three months ended | Nine months ended | ||||||
2020 | 2019 | 2020 | 2019 | |||||
Additions to property, plant and equipment | $ | (119.8) | $ | (120.7) | $ | (306.4) | $ | (346.7) |
Net decrease in current accounts payable related to additions to property, plant and equipment | (18.3) | (1.9) | (18.4) | (30.6) | ||||
Cash flows used for additions to property, plant and equipment | $ | (138.1) | $ | (122.6) | $ | (324.8) | $ | (377.3) |
2 Reconciliation to cash flows used for additions to intangible | Three months ended | Nine months ended | ||||||
2020 | 2019 | 2020 | 2019 | |||||
Additions to intangible assets | $ | (47.5) | $ | (56.2) | $ | (152.2) | $ | (154.7) |
Net increase (decrease) in current accounts payable related to additions to intangible assets | 13.2 | (10.2) | (32.9) | (14.0) | ||||
Disbursements for licence acquisitions | − | − | − | (255.8) | ||||
Cash flows used for additions to intangible assets | $ | (34.3) | $ | (66.4) | $ | (185.1) | $ | (424.5) |
Table 6 | ||||||||
Free cash flows from continuing operating activities and cash flows provided by continuing operating activities reported in the condensed consolidated financial statements | ||||||||
(in millions of Canadian dollars) | ||||||||
Three months ended | Nine months ended | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Cash flows from operations from Table 5 | $ | 346.1 | $ | 332.4 | $ | 967.2 | $ | 883.6 |
Plus (minus) | ||||||||
Cash portion of financial expenses | (78.1) | (79.1) | (243.0) | (240.0) | ||||
Cash portion related to restructuring of operations and | (11.6) | (1.2) | (25.8) | (8.2) | ||||
Current income taxes | (60.7) | (29.7) | (181.0) | (115.1) | ||||
Other | 1.1 | 0.7 | 3.5 | 1.3 | ||||
Net change in non‑cash balances related to operating | (23.3) | (20.5) | 78.6 | (171.1) | ||||
Net decrease in current accounts payable related to | (18.3) | (1.9) | (18.4) | (30.6) | ||||
Net increase (decrease) in current accounts payable | 13.2 | (10.2) | (32.9) | (14.0) | ||||
Free cash flows from continuing operating activities | 168.4 | 190.5 | 548.2 | 305.9 | ||||
Plus (minus) | ||||||||
Cash flows used for additions to property, plant and | 138.1 | 122.6 | 324.8 | 377.3 | ||||
Cash flows used for additions to intangible assets | 34.3 | 66.4 | 185.1 | 168.7 | ||||
Proceeds from disposal of assets | (1.4) | (0.5) | (3.6) | (3.2) | ||||
Cash flows provided by continuing operating activities | $ | 339.4 | $ | 379.0 | $ | 1,054.5 | $ | 848.7 |
Consolidated net debt leverage ratio
The consolidated net debt leverage ratio represents consolidated net debt excluding convertible debentures divided by the trailing 12‑month adjusted EBITDA. Consolidated net debt excluding convertible debentures represents total long‑term debt plus bank indebtedness, lease liabilities, the current portion of lease liabilities and liabilities related to derivative financial instruments, less assets related to derivative financial instruments and cash and cash equivalents. The consolidated net debt leverage ratio serves to evaluate the Corporation's financial leverage and is used by management and the Board of Directors in decisions on the Corporation's capital structure, including its financing strategy, and in managing debt maturity risks. The consolidated net debt leverage ratio excludes convertible debentures because, subject to certain conditions, those debentures can be repurchased at the Corporation's discretion by issuing Quebecor Class B Shares. Consolidated net debt leverage ratio is not a measure established in accordance with IFRS. It is not intended to be used as an alternative to IFRS measures or the balance sheet to evaluate financial position. The Corporation's definition of consolidated net debt leverage ratio may not be identical to similarly titled measures reported by other companies.
Table 7 provides the calculation of consolidated net debt leverage ratio and the reconciliation to balance sheet items reported in
Table 7 | ||||||||
Consolidated net debt leverage ratio | ||||||||
(in millions of Canadian dollars) | ||||||||
|
| |||||||
Total long‑term debt1 | $ | 5,952.1 | $ | 5,986.1 | ||||
Plus (minus) | ||||||||
Lease liabilities | 133.7 | 106.6 | ||||||
Current portion of lease liabilities | 34.3 | 31.3 | ||||||
Bank indebtedness | 15.2 | 29.4 | ||||||
Assets related to derivative financial instruments | (800.2) | (679.8) | ||||||
Liabilities related to derivative financial instruments | 1.6 | 2.1 | ||||||
Cash and cash equivalents | (40.7) | (14.0) | ||||||
Consolidated net debt excluding convertible debentures | 5,296.0 | 5,461.7 | ||||||
Divided by: | ||||||||
Trailing 12‑month adjusted EBITDA | $ | 1,920.3 | $ | 1,879.5 | ||||
Consolidated net debt leverage ratio | 2.76x | 2.91x |
1 Excludes changes in the fair value of long‑term debt related to hedged interest risk and financing fees. |
KEY PERFORMANCE INDICATORS
Revenue‑generating unit
The Corporation uses RGU, an industry metric, as a key performance indicator. An RGU represents, as the case may be, subscriptions to the cable Internet, television and Club illico over‑the‑top video ("Club illico") services, and subscriber connections to the mobile telephony and wireline telephony services. RGU is not a measurement that is consistent with IFRS and the Corporation's definition and calculation of RGU may not be the same as identically titled measurements reported by other companies or published by public authorities.
Average billing per unit
The Corporation uses ABPU, an industry metric, as a key performance indicator. This indicator is used to measure monthly average subscription billing per RGU. ABPU is not a measurement that is consistent with IFRS and the Corporation's definition and calculation of ABPU may not be the same as identically titled measurements reported by other companies.
Mobile ABPU is calculated by dividing the average subscription billing for mobile telephony services by the average number of mobile RGUs during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.
Total ABPU is calculated by dividing the combined average subscription billing for cable Internet, television, Club illico, mobile telephony and wireline telephony services by the total average number of RGUs from cable Internet, television, mobile telephony and wireline telephony services during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.
QUEBECOR INC. | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
(in millions of Canadian dollars, except for earnings per share data) | Three months ended | Nine months ended | ||||||||
(unaudited) | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||
Revenues | $ | 1,111.7 | $ | 1,073.4 | $ | 3,171.0 | $ | 3,157.6 | ||
Employee costs | 156.5 | 162.6 | 471.2 | 516.6 | ||||||
Purchase of goods and services | 441.8 | 401.5 | 1,274.0 | 1,256.0 | ||||||
Depreciation and amortization | 195.9 | 187.0 | 589.7 | 564.1 | ||||||
Financial expenses | 80.1 | 81.2 | 249.1 | 246.1 | ||||||
Loss (gain) on valuation and translation of financial instruments | 18.6 | (6.0) | (8.9) | (8.1) | ||||||
Restructuring of operations and other items | 18.9 | 1.2 | 33.1 | 27.0 | ||||||
Income before income taxes | 199.9 | 245.9 | 562.8 | 555.9 | ||||||
Income taxes (recovery): | ||||||||||
Current | 60.7 | 29.7 | 181.0 | 115.1 | ||||||
Deferred | (4.3) | 33.5 | (33.3) | 30.3 | ||||||
56.4 | 63.2 | 147.7 | 145.4 | |||||||
Income from continuing operations | 143.5 | 182.7 | 415.1 | 410.5 | ||||||
Income from discontinued operations | - | - | 33.8 | 97.5 | ||||||
Net income | $ | 143.5 | $ | 182.7 | $ | 448.9 | $ | 508.0 | ||
Income from continuing operations attributable to | ||||||||||
Shareholders | $ | 140.9 | $ | 178.5 | $ | 413.6 | $ | 410.2 | ||
Non-controlling interests | 2.6 | 4.2 | 1.5 | 0.3 | ||||||
Net income attributable to | ||||||||||
Shareholders | $ | 140.9 | $ | 178.5 | $ | 447.4 | $ | 507.7 | ||
Non-controlling interests | 2.6 | 4.2 | 1.5 | 0.3 | ||||||
Earnings per share attributable to shareholders | ||||||||||
Basic: | ||||||||||
From continuing operations | $ | 0.56 | $ | 0.70 | $ | 1.64 | $ | 1.60 | ||
From discontinued operations | - | - | 0.13 | 0.38 | ||||||
Net income | 0.56 | 0.70 | 1.77 | 1.98 | ||||||
Diluted: | ||||||||||
From continuing operations | 0.56 | 0.67 | 1.58 | 1.57 | ||||||
From discontinued operations | - | - | 0.13 | 0.37 | ||||||
Net income | 0.56 | 0.67 | 1.71 | 1.94 | ||||||
Weighted average number of shares outstanding (in millions) | 250.5 | 255.6 | 252.4 | 255.8 | ||||||
Weighted average number of diluted shares (in millions) | 250.7 | 261.7 | 258.2 | 261.9 |
QUEBECOR INC. | ||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||
(in millions of Canadian dollars) | Three months ended | Nine months ended | ||||||||
(unaudited) | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||
Income from continuing operations | $ | 143.5 | $ | 182.7 | $ | 415.1 | $ | 410.5 | ||
Other comprehensive (loss) income from continuing operations: | ||||||||||
Items that may be reclassified to income: | ||||||||||
Cash flow hedges: | ||||||||||
(Loss) gain on valuation of derivative financial instruments | (25.0) | 41.4 | 18.9 | 71.6 | ||||||
Deferred income taxes | 6.1 | (6.5) | (2.5) | (4.7) | ||||||
Items that will not be reclassified to income: | ||||||||||
Defined benefit plans: | ||||||||||
Re-measurement loss | (25.0) | - | (87.0) | - | ||||||
Deferred income taxes | 6.6 | - | 22.6 | - | ||||||
Reclassification to income: | ||||||||||
Gain related to cash flow hedges | - | (1.1) | - | (1.1) | ||||||
Deferred income taxes | - | 0.7 | - | 0.7 | ||||||
(37.3) | 34.5 | (48.0) | 66.5 | |||||||
Comprehensive income from continuing operations | 106.2 | 217.2 | 367.1 | 477.0 | ||||||
Income from discontinued operations | - | - | 33.8 | 97.5 | ||||||
Comprehensive income | $ | 106.2 | $ | 217.2 | $ | 400.9 | $ | 574.5 | ||
Comprehensive income (loss) from continuing operations attributable to | ||||||||||
Shareholders | $ | 104.8 | $ | 213.0 | $ | 370.3 | $ | 476.7 | ||
Non-controlling interests | 1.4 | 4.2 | (3.2) | 0.3 | ||||||
Comprehensive income (loss) attributable to | ||||||||||
Shareholders | $ | 104.8 | $ | 213.0 | $ | 404.1 | $ | 574.2 | ||
Non-controlling interests | 1.4 | 4.2 | (3.2) | 0.3 |
SEGMENTED INFORMATION | ||||||||||
(in millions of Canadian dollars) | ||||||||||
Three months ended | ||||||||||
Sports | Head | |||||||||
and | office | |||||||||
Telecommuni- | Enter- | and Inter- | ||||||||
cations | Media | tainment | segments | Total | ||||||
Revenues | $ | 937.9 | $ | 157.2 | $ | 48.5 | $ | (31.9) | $ | 1,111.7 |
Employee costs | 101.4 | 38.6 | 7.5 | 9.0 | 156.5 | |||||
Purchase of goods and services | 352.9 | 93.7 | 33.4 | (38.2) | 441.8 | |||||
Adjusted EBITDA1 | 483.6 | 24.9 | 7.6 | (2.7) | 513.4 | |||||
Depreciation and amortization | 195.9 | |||||||||
Financial expenses | 80.1 | |||||||||
Loss on valuation and translation of financial instruments | 18.6 | |||||||||
Restructuring of operations and other items | 18.9 | |||||||||
Income before income taxes | $ | 199.9 | ||||||||
Cash flows used for: | ||||||||||
Additions to property, plant and equipment | $ | 133.9 | $ | 3.4 | $ | 0.1 | $ | 0.7 | $ | 138.1 |
Additions to intangible assets | 29.6 | 3.9 | 0.8 | - | 34.3 | |||||
Three months ended | ||||||||||
Sports | Head | |||||||||
and | office | |||||||||
Telecommuni- | Enter- | and Inter- | ||||||||
cations | Media | tainment | segments | Total | ||||||
Revenues | $ | 876.7 | $ | 167.2 | $ | 55.8 | $ | (26.3) | $ | 1,073.4 |
Employee costs | 92.2 | 53.4 | 9.5 | 7.5 | 162.6 | |||||
Purchase of goods and services | 316.8 | 81.2 | 39.4 | (35.9) | 401.5 | |||||
Adjusted EBITDA1 | 467.7 | 32.6 | 6.9 | 2.1 | 509.3 | |||||
Depreciation and amortization | 187.0 | |||||||||
Financial expenses | 81.2 | |||||||||
Gain on valuation and translation of financial instruments | (6.0) | |||||||||
Restructuring of operations and other items | 1.2 | |||||||||
Income before income taxes | $ | 245.9 | ||||||||
Cash flows used for: | ||||||||||
Additions to property, plant and equipment | $ | 117.4 | $ | 5.0 | $ | 0.1 | $ | 0.1 | $ | 122.6 |
Additions to intangible assets | 57.2 | 8.5 | 0.8 | (0.1) | 66.4 | |||||
Nine months ended | ||||||||||
Sports | Head | |||||||||
and | office | |||||||||
Telecommuni- | Enter- | and Inter- | ||||||||
cations | Media | tainment | segments | Total | ||||||
Revenues | $ | 2,681.7 | $ | 464.7 | $ | 109.2 | $ | (84.6) | $ | 3,171.0 |
Employee costs | 305.0 | 124.5 | 21.6 | 20.1 | 471.2 | |||||
Purchase of goods and services | 994.0 | 303.6 | 81.0 | (104.6) | 1,274.0 | |||||
Adjusted EBITDA1 | 1,382.7 | 36.6 | 6.6 | (0.1) | 1,425.8 | |||||
Depreciation and amortization | 589.7 | |||||||||
Financial expenses | 249.1 | |||||||||
Gain on valuation and translation of financial instruments | (8.9) | |||||||||
Restructuring of operations and other items | 33.1 | |||||||||
Income before income taxes | $ | 562.8 | ||||||||
Cash flows used for: | ||||||||||
Additions to property, plant and equipment | $ | 312.3 | $ | 11.2 | $ | 0.2 | $ | 1.1 | $ | 324.8 |
Additions to intangible assets | 165.7 | 17.0 | 2.3 | 0.1 | 185.1 | |||||
Nine months ended | ||||||||||
Sports | Head | |||||||||
and | office | |||||||||
Telecommuni- | Enter- | and Inter- | ||||||||
cations | Media | tainment | segments | Total | ||||||
Revenues | $ | 2,571.8 | $ | 530.0 | $ | 137.5 | $ | (81.7) | $ | 3,157.6 |
Employee costs | 291.8 | 170.8 | 29.1 | 24.9 | 516.6 | |||||
Purchase of goods and services | 939.3 | 319.7 | 103.7 | (106.7) | 1,256.0 | |||||
Adjusted EBITDA1 | 1,340.7 | 39.5 | 4.7 | 0.1 | 1,385.0 | |||||
Depreciation and amortization | 564.1 | |||||||||
Financial expenses | 246.1 | |||||||||
Gain on valuation and translation of financial instruments | (8.1) | |||||||||
Restructuring of operations and other items | 27.0 | |||||||||
Income before income taxes | $ | 555.9 | ||||||||
Cash flows used for: | ||||||||||
Additions to property, plant and equipment | $ | 361.2 | $ | 13.7 | $ | 1.1 | $ | 1.3 | $ | 377.3 |
Additions to intangible assets | 402.3 | 19.1 | 2.9 | 0.2 | 424.5 | |||||
1 | The Chief Executive Officer uses adjusted EBITDA as the measure of profit to assess the performance of each segment. Adjusted EBITDA is referred as | |||||||||
a non-IFRS measure and is defined as net income before depreciation and amortization, financial expenses, loss (gain) on valuation and translation of financial | ||||||||||
instruments, restructuring of operations and other items, income taxes and income from discontinued operations. |
QUEBECOR INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF EQUITY | ||||||||||||
(in millions of Canadian dollars) | ||||||||||||
(unaudited) | ||||||||||||
Equity attributable to shareholders | Equity | |||||||||||
Accumulated | attributable | |||||||||||
Retained | other com- | to non- | ||||||||||
Capital | Contributed | earnings | prehensive | controlling | Total | |||||||
stock | surplus | (deficit) | loss | interests | equity | |||||||
Balance as of | $ | 1,065.9 | $ | 4.7 | $ | (507.9) | $ | (82.7) | $ | 88.5 | $ | 568.5 |
Net income | - | - | 507.7 | - | 0.3 | 508.0 | ||||||
Other comprehensive income | - | - | - | 66.5 | - | 66.5 | ||||||
Issuance of Class | 2.7 | 3.0 | - | - | - | 5.7 | ||||||
Dividends | - | - | (71.6) | - | - | (71.6) | ||||||
Repurchase of Class | (15.7) | - | (64.8) | - | - | (80.5) | ||||||
Balance as of | 1,052.9 | 7.7 | (136.6) | (16.2) | 88.8 | 996.6 | ||||||
Net income | - | - | 145.1 | - | 5.2 | 150.3 | ||||||
Other comprehensive (loss) income | - | - | - | (47.9) | 0.6 | (47.3) | ||||||
Dividends | - | - | (28.7) | - | - | (28.7) | ||||||
Issuance of Class | 5.6 | 9.7 | - | - | - | 15.3 | ||||||
Repurchase of Class | (2.6) | - | (11.5) | - | - | (14.1) | ||||||
Balance as of | 1,055.9 | 17.4 | (31.7) | (64.1) | 94.6 | 1,072.1 | ||||||
Net income | - | - | 447.4 | - | 1.5 | 448.9 | ||||||
Other comprehensive loss | - | - | - | (43.3) | (4.7) | (48.0) | ||||||
Dividends | - | - | (151.3) | - | (0.2) | (151.5) | ||||||
Repurchase of Class | (27.7) | - | (115.7) | - | - | (143.4) | ||||||
Balance as of | $ | 1,028.2 | $ | 17.4 | $ | 148.7 | $ | (107.4) | $ | 91.2 | $ | 1,178.1 |
QUEBECOR INC. | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(in millions of Canadian dollars) | Three months ended | Nine months ended | ||||||||
(unaudited) | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||
Cash flows related to operating activities | ||||||||||
Income from continuing operations | $ | 143.5 | $ | 182.7 | $ | 415.1 | $ | 410.5 | ||
Adjustments for: | ||||||||||
Depreciation of property, plant and equipment | 149.5 | 148.4 | 455.3 | 450.2 | ||||||
Amortization of intangible assets | 37.0 | 29.7 | 107.2 | 87.1 | ||||||
Amortization of right-of-use assets | 9.4 | 8.9 | 27.2 | 26.8 | ||||||
Loss (gain) on valuation and translation of financial instruments | 18.6 | (6.0) | (8.9) | (8.1) | ||||||
Impairment of assets | 7.3 | - | 7.3 | 18.8 | ||||||
Amortization of financing costs and long-term debt discount | 2.0 | 2.1 | 6.1 | 6.1 | ||||||
Deferred income taxes | (4.3) | 33.5 | (33.3) | 30.3 | ||||||
Other | (0.3) | 0.2 | (0.1) | (1.9) | ||||||
362.7 | 399.5 | 975.9 | 1,019.8 | |||||||
Net change in non-cash balances related to operating activities | (23.3) | (20.5) | 78.6 | (171.1) | ||||||
Cash flows provided by continuing operating activities | 339.4 | 379.0 | 1,054.5 | 848.7 | ||||||
Cash flows related to investing activities | ||||||||||
Business acquisitions | - | (1.0) | (10.8) | (35.6) | ||||||
Business disposals | - | - | - | 260.7 | ||||||
Additions to property, plant and equipment | (138.1) | (122.6) | (324.8) | (377.3) | ||||||
Additions to intangible assets | (34.3) | (66.4) | (185.1) | (424.5) | ||||||
Proceeds from disposals of assets | 1.4 | 0.5 | 3.6 | 3.2 | ||||||
Other | (48.5) | (17.8) | (51.4) | (25.0) | ||||||
Cash flows used in continuing investing activities | (219.5) | (207.3) | (568.5) | (598.5) | ||||||
Cash flows related to financing activities | ||||||||||
Net change in bank indebtedness | (5.4) | 6.9 | (14.2) | 4.0 | ||||||
Net change under revolving facilities | 10.3 | 251.3 | (124.9) | 281.3 | ||||||
Repayment of long-term debt | (0.4) | (435.4) | (1.0) | (443.4) | ||||||
Repayment of lease liabilities | (10.8) | (9.4) | (31.3) | (29.9) | ||||||
Settlement of hedging contracts | - | 91.6 | (0.8) | 90.8 | ||||||
Issuance of Class | - | - | - | 2.7 | ||||||
Repurchase of Class | (47.8) | (41.0) | (143.4) | (80.5) | ||||||
Dividends | (50.1) | (28.7) | (151.3) | (71.6) | ||||||
Dividends paid to non-controlling interests | - | - | (0.2) | - | ||||||
Cash flows used in continuing financing activities | (104.2) | (164.7) | (467.1) | (246.6) | ||||||
Cash flows provided by continuing operations | 15.7 | 7.0 | 18.9 | 3.6 | ||||||
Cash flows provided by (used in) discontinued operations | - | - | 7.8 | (0.7) | ||||||
Cash and cash equivalents at beginning of period | 25.0 | 17.2 | 14.0 | 21.3 | ||||||
Cash and cash equivalents at end of period | $ | 40.7 | $ | 24.2 | $ | 40.7 | $ | 24.2 | ||
Cash and cash equivalents consist of | ||||||||||
Cash | $ | 39.5 | $ | 15.7 | $ | 39.5 | $ | 15.7 | ||
Cash equivalents | 1.2 | 8.5 | 1.2 | 8.5 | ||||||
$ | 40.7 | $ | 24.2 | $ | 40.7 | $ | 24.2 | |||
Interest and taxes reflected as operating activities | ||||||||||
Cash interest payments | $ | 41.3 | $ | 45.5 | $ | 198.5 | $ | 203.3 | ||
Cash income tax payments (net of refunds) | 70.7 | 54.2 | 93.6 | 235.0 |
QUEBECOR INC. | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(in millions of Canadian dollars) | ||||||
(unaudited) | ||||||
2020 | 2019 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 40.7 | $ | 14.0 | ||
Accounts receivable | 596.1 | 548.0 | ||||
Contract assets | 164.9 | 160.3 | ||||
Income taxes | 5.6 | 19.1 | ||||
Inventories | 211.4 | 240.4 | ||||
Other current assets | 115.0 | 121.2 | ||||
1,133.7 | 1,103.0 | |||||
Non-current assets | ||||||
Property, plant and equipment | 3,281.4 | 3,415.9 | ||||
Intangible assets | 1,509.9 | 1,444.0 | ||||
Goodwill | 2,692.9 | 2,692.9 | ||||
Right-of-use assets | 137.2 | 110.4 | ||||
Derivative financial instruments | 800.2 | 679.8 | ||||
Deferred income taxes | 44.5 | 31.2 | ||||
Other assets | 289.0 | 248.7 | ||||
8,755.1 | 8,622.9 | |||||
Total assets | $ | 9,888.8 | $ | 9,725.9 | ||
Liabilities and equity | ||||||
Current liabilities | ||||||
Bank indebtedness | $ | 15.2 | $ | 29.4 | ||
Accounts payable, accrued charges and provisions | 784.2 | 809.6 | ||||
Deferred revenue | 326.2 | 332.7 | ||||
Income taxes | 78.1 | 4.2 | ||||
Current portion of long-term debt | 30.6 | 57.2 | ||||
Current portion of lease liabilities | 34.3 | 31.3 | ||||
1,268.6 | 1,264.4 | |||||
Non-current liabilities | ||||||
Long-term debt | 5,908.8 | 5,900.3 | ||||
Derivative financial instruments | 1.6 | 2.1 | ||||
Convertible debentures | 150.0 | 150.0 | ||||
Lease liabilities | 133.7 | 106.6 | ||||
Deferred income taxes | 824.1 | 859.2 | ||||
Other liabilities | 423.9 | 371.2 | ||||
7,442.1 | 7,389.4 | |||||
Equity | ||||||
Capital stock | 1,028.2 | 1,055.9 | ||||
Contributed surplus | 17.4 | 17.4 | ||||
Retained earnings (deficit) | 148.7 | (31.7) | ||||
Accumulated other comprehensive loss | (107.4) | (64.1) | ||||
Equity attributable to shareholders | 1,086.9 | 977.5 | ||||
Non-controlling interests | 91.2 | 94.6 | ||||
1,178.1 | 1,072.1 | |||||
Total liabilities and equity | $ | 9,888.8 | $ | 9,725.9 |
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