Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | QUEBECOR MEDIA INC |
Entity Central Index Key | 1,156,831 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | Yes |
Entity Current Reporting Status | No |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 95,441,277 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $ 4,122.4 | $ 4,016.6 | $ 3,890.8 |
Employee costs | 706.2 | 707.9 | 694.4 |
Purchase of goods and services | 1,820.8 | 1,810.9 | 1,755.6 |
Depreciation and amortization | 709.8 | 650.4 | 691 |
Financial expenses | 283.4 | 302.9 | 309.2 |
Loss on valuation and translation of financial instruments | 2.4 | 2.1 | 3.8 |
Restructuring of operations, litigation and other items | 17.2 | 28.5 | (117.2) |
Gain on sale of spectrum licences | (330.9) | ||
Impairment of goodwill and other assets | 43.8 | 40.9 | 230.7 |
Loss on debt refinancing | 15.6 | 7.3 | 12.1 |
Income before income taxes | 854.1 | 465.7 | 311.2 |
Income taxes (recovery): | |||
Current | 8.8 | 158 | 63.4 |
Deferred | 124.5 | (31.7) | 40.7 |
Income taxes | 133.3 | 126.3 | 104.1 |
Income from continuing operations | 720.8 | 339.4 | 207.1 |
Income (loss) from discontinued operations | 14.6 | (19.7) | |
Net income | 735.4 | 339.4 | 187.4 |
Income (loss) from continuing operations attributable to | |||
Shareholders | 725.6 | 352 | 225.7 |
Non-controlling interests | (4.8) | (12.6) | (18.6) |
Net income (loss) attributable to | |||
Shareholders | 740.2 | 352 | 207.6 |
Non-controlling interests | $ (4.8) | $ (12.6) | $ (20.2) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Income from continuing operations | $ 720.8 | $ 339.4 | $ 207.1 |
Cash flows hedges: | |||
Gain (loss) on valuation of derivative financial instruments | 43.7 | (30.9) | 14 |
Deferred income taxes | 28 | 15.9 | (41.6) |
Defined benefit plans: | |||
Re-measurement (loss) gain | (3.2) | 33.1 | (28.2) |
Deferred income taxes | 0.9 | (8.9) | 7.7 |
Reclassification to income: | |||
Gain related to cash flows hedges | (3.9) | ||
Deferred income taxes | (0.4) | ||
Other comprehensive income (loss) from continuing operations | 69.4 | 9.2 | (52.4) |
Comprehensive income from continuing operations | 790.2 | 348.6 | 154.7 |
Income (loss) from discontinued operations | 14.6 | (19.7) | |
Comprehensive income | 804.8 | 348.6 | 135 |
Comprehensive income (loss) from continuing operations attributable to | |||
Shareholders | 794.7 | 358.5 | 174.4 |
Non-controlling interests | (4.5) | (9.9) | (19.7) |
Comprehensive income (loss) attributable to | |||
Shareholders | 809.3 | 358.5 | 156.2 |
Non-controlling interests | $ (4.5) | $ (9.9) | $ (21.2) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - CAD ($) $ in Millions | Capital stock | Contributed surplus | Deficit | Accumulated other comprehensive loss | Equity attributable to non-controlling interests | Total |
Equity at beginning of period at Dec. 31, 2014 | $ 4,116.1 | $ 1.3 | $ (2,273.4) | $ (84.6) | $ 125.9 | $ 1,885.3 |
Net income (loss) | 207.6 | (20.2) | 187.4 | |||
Other comprehensive income (loss) | (51.4) | (1) | (52.4) | |||
Dividends | (75) | (0.2) | (75.2) | |||
Reduction of paid-up capital | (25) | (25) | ||||
Repurchase of shares | (289.7) | (210.5) | (500.2) | |||
Issuance of shares of a subsidiary to non-controlling interests (note 11) | 12.1 | 12.1 | ||||
Non-controlling interests and business acquisitions (note 11) | 16.5 | (15.7) | 0.8 | |||
Equity at end of period at Dec. 31, 2015 | 3,801.4 | 1.3 | (2,334.8) | (136) | 100.9 | 1,432.8 |
Net income (loss) | 352 | (12.6) | 339.4 | |||
Other comprehensive income (loss) | 6.5 | 2.7 | 9.2 | |||
Dividends | (0.2) | (0.2) | ||||
Reduction of paid-up capital | (100) | (100) | ||||
Equity at end of period at Dec. 31, 2016 | 3,701.4 | 1.3 | (1,982.8) | (129.5) | 90.8 | 1,681.2 |
Net income (loss) | 740.2 | (4.8) | 735.4 | |||
Other comprehensive income (loss) | 69.1 | 0.3 | 69.4 | |||
Dividends | (50) | (50) | ||||
Reduction of paid-up capital | (50) | (50) | ||||
Repurchase of shares | (20.6) | (23.3) | (43.9) | |||
Equity at end of period at Dec. 31, 2017 | $ 3,630.8 | $ 1.3 | $ (1,315.9) | $ (60.4) | $ 86.3 | $ 2,342.1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows related to operating activities | |||
Income from continuing operations | $ 720.8 | $ 339.4 | $ 207.1 |
Adjustments for: | |||
Depreciation of property, plant and equipment | 605 | 552.5 | 592.6 |
Amortization of intangible assets | 104.8 | 97.9 | 98.4 |
Loss on valuation and translation of financial instruments | 2.4 | 2.1 | 3.8 |
Gain on sale of spectrum licences | (330.9) | ||
Impairment of goodwill and other assets | 43.8 | 40.9 | 230.7 |
Loss on debt refinancing | 15.6 | 7.3 | 12.1 |
Amortization of financing costs and long-term debt discount | 6.9 | 7 | 7.1 |
Deferred income taxes | 124.5 | (31.7) | 40.7 |
Other | 4 | 3.7 | 5.9 |
Cash flows before non-cash balances | 1,296.9 | 1,019.1 | 1,198.4 |
Net change in non-cash balances related to operating activities | (95.3) | 118.7 | (98.7) |
Cash flows provided by continuing operating activities | 1,201.6 | 1,137.8 | 1,099.7 |
Cash flows related to investing activities | |||
Business acquisitions | (5.8) | (119.5) | (94.5) |
Business disposals | 3 | 316.3 | |
Additions to property, plant and equipment | (605.3) | (707.6) | (678.4) |
Additions to intangible assets | (141.9) | (139.8) | (360.6) |
Proceeds from disposals of assets | 620.7 | 3.5 | 4.6 |
Acquisition of tax deductions from the parent corporation | (14) | ||
Other | (10.6) | 12.7 | (12.7) |
Cash flows used in continuing investing activities | (142.9) | (961.7) | (825.3) |
Cash flows related to financing activities | |||
Net change in bank indebtedness | (18.9) | (14.9) | 29.3 |
Net change under revolving facilities | (209.3) | (40.3) | 246.9 |
Issuance of long-term debt, net of financing fees | 794.5 | 370.1 | |
Repayments of long-term debt | (664.5) | (19) | (652.3) |
Settlement of hedging contracts | 16.6 | 0.4 | (34.3) |
Repurchase of Common Shares | (43.9) | (500.2) | |
Issuance of shares of a subsidiary to non-controlling interests | 12.1 | ||
Reduction of paid-up capital | (50) | (100) | (25) |
Dividends | (50) | (75) | |
Dividends paid to non-controlling interests | (0.2) | (0.2) | |
Cash flows used in continuing financing activities | (225.5) | (174) | (628.6) |
Net change in cash and cash equivalents from continuing operations | 833.2 | 2.1 | (354.2) |
Cash flows provided by (used in) discontinued operations | 11 | (22.5) | |
Cash and cash equivalents at the beginning of the year | 20.7 | 18.6 | 395.3 |
Cash and cash equivalents at the end of the year | 864.9 | 20.7 | 18.6 |
Changes in non-cash balances related to operating activities (excluding the effect of business acquisitions and disposals) | |||
Accounts receivable | (17.8) | (34.5) | (16) |
Inventories | (3.2) | 24.7 | (44.5) |
Accounts payable, accrued charges and provisions | (26.8) | 40.1 | 30.1 |
Income taxes | (44.8) | 51.4 | (97.4) |
Deferred revenues | (1.7) | 14 | 21 |
Defined benefit plans | 7.2 | 10.4 | (3.6) |
Other | (8.2) | 12.6 | 11.7 |
Net change in non-cash balances related to operating activities | (95.3) | 118.7 | (98.7) |
Non-cash investing activities | |||
Net change in additions to property, plant and equipment and intangible assets financed with accounts payable | 21.8 | (6.2) | (12.7) |
Interest and taxes reflected as operating activities | |||
Cash interest payments | 269.1 | 286.1 | 282.4 |
Cash income tax payments (net of refunds) | $ 58.7 | $ 104.3 | $ 158 |
CONSOLIDATED STATEMENTS OF CAS6
CONSOLIDATED STATEMENTS OF CASH FLOW - Cash information - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents consist of | |||
Cash | $ 863.2 | $ 19.9 | $ 17 |
Cash equivalents | 1.7 | 0.8 | 1.6 |
Total cash and cash equivalents | $ 864.9 | $ 20.7 | $ 18.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 864.9 | $ 20.7 |
Accounts receivable | 542.9 | 525 |
Income taxes | 29.3 | 6.9 |
Amounts receivable from the parent corporation | 0.1 | |
Inventories | 188.1 | 183.3 |
Prepaid expenses | 63.8 | 52.9 |
Current assets | 1,689.1 | 788.8 |
Non-current assets | ||
Property, plant and equipment | 3,554.3 | 3,562.5 |
Intangible assets | 983.1 | 1,224 |
Goodwill | 2,695.8 | 2,725.4 |
Derivative financial instruments | 591.8 | 809 |
Deferred income taxes | 33.2 | 16 |
Other assets | 97.6 | 91.7 |
Non-current assets | 7,955.8 | 8,428.6 |
Total assets | 9,644.9 | 9,217.4 |
Current liabilities | ||
Bank indebtedness | 18.9 | |
Accounts payable and accrued charges | 725.6 | 690.9 |
Provisions | 25.4 | 69.3 |
Deferred revenue | 346.8 | 339.7 |
Income taxes | 13.3 | 35.2 |
Amounts payable to the parent corporation | 0.7 | |
Current portion of long-term debt | 19.1 | 20.9 |
Current liabilities | 1,130.2 | 1,175.6 |
Non-current liabilities | ||
Long-term debt | 5,292.6 | 5,617.2 |
Derivative financial instruments | 34.1 | 0.3 |
Other liabilities | 195 | 202.8 |
Deferred income taxes | 650.9 | 540.3 |
Non-current liabilities | 6,172.6 | 6,360.6 |
Equity | ||
Capital stock | 3,630.8 | 3,701.4 |
Contributed surplus | 1.3 | 1.3 |
Deficit | (1,315.9) | (1,982.8) |
Accumulated other comprehensive loss | (60.4) | (129.5) |
Equity attributable to shareholders | 2,255.8 | 1,590.4 |
Non-controlling interests | 86.3 | 90.8 |
Total equity | 2,342.1 | 1,681.2 |
Commitments and contingencies | ||
Guarantees | ||
Total liabilities and equity | $ 9,644.9 | $ 9,217.4 |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENTED INFORMATION | |
SEGMENTED INFORMATION | SEGMENTED INFORMATION Quebecor Media Inc. (“Quebecor Media” or the “Corporation”) is incorporated under the laws of Québec and is a subsidiary of Quebecor Inc. (“Quebecor” or the “parent corporation”). Unless the context otherwise requires, Quebecor Media or the Corporation refer to Quebecor Media Inc. and its subsidiaries. The Corporation’s head office and registered office is located at 612 rue Saint-Jacques, Montréal (Québec), Canada. The percentages of voting rights and equity in its major subsidiaries are as follows: % voting % equity Videotron Ltd. % % TVA Group Inc. % % MediaQMI Inc. % % QMI Spectacles Inc. % % The Corporation operates, through its subsidiaries, in the following industry segments: Telecommunications, Media, and Sports and Entertainment. The Telecommunications segment offers television distribution, Internet access, business solutions (including data centers), cable and mobile telephony and over-the-top video services in Canada and is engaged in the rental of movies, televisual products and video games through its video-on-demand service and video rental stores. The operations of the Media segment in Québec include the operation of an over-the-air television network and specialty television services, the operation of soundstage and equipment leasing and post-production services for the film and television industries, the printing, publishing and distribution of daily newspapers, the operation of Internet portals and specialized Web sites, the publishing and distribution of magazines, the distribution of movies, and the operation of an out-of-home advertising business. The activities of the Sports and Entertainment segment in Québec encompass the operation and management of the Videotron Centre in Québec City, show production, sporting and cultural events management, the publishing and distribution of books, the distribution and production of music, and the operation of two Quebec Major Junior Hockey League teams. In 2017, the Corporation changed its organisational structure and as a result, the book publishing and distribution activities, as well as the music production and distribution activities that were previously presented with the Media segment are now presented with the Sports and Entertainment segment. Prior period figures in the Corporation’s segmented information have been reclassified to reflect these changes. These segments are managed separately since they all require specific market strategies. The accounting policies of each segment are the same as the accounting policies used for the consolidated financial statements. Segment income includes income from sales to third parties and inter segment sales. Transactions between segments are measured at exchange amounts between the parties. Years ended December 31, 2017, 2016 and 2015 (in millions of Canadian dollars) Telecommunications Media Sports Head Office Total 2017 Revenues $ $ $ $ ) $ Employee costs Purchase of goods and services ) Adjusted operating income 1 ) Depreciation and amortization Financial expenses Loss on valuation and translation of financial instruments Restructuring of operations, litigation and other items Gain on sale of spectrum licences ) Impairment of goodwill and other assets Loss on debt refinancing Income before income taxes $ Additions to property, plant and equipment $ $ $ $ $ Additions to intangible assets Years ended December 31, 2017, 2016 and 2015 (in millions of Canadian dollars) Telecommunications Media Sports Head Office Total 2016 Revenues $ $ $ $ ) $ Employee costs Purchase of goods and services ) Adjusted operating income 1 ) Depreciation and amortization Financial expenses Loss on valuation and translation of financial instruments Restructuring of operations, litigation and other items Impairment of goodwill and other assets Loss on debt refinancing Income before income taxes $ Additions to property, plant and equipment $ $ $ $ $ Additions to intangible assets Years ended December 31, 2017, 2016 and 2015 (in millions of Canadian dollars) Telecommunications Media Sports Head Office Total 2015 Revenues $ $ $ $ ) $ Employee costs Purchase of goods and services ) Adjusted operating income 1 ) ) Depreciation and amortization Financial expenses Loss on valuation and translation of financial instruments Restructuring of operations, litigation and other items ) Impairment of goodwill and other assets Loss on debt refinancing Income before income taxes $ Additions to property, plant and equipment $ $ $ $ $ Additions to intangible assets 1 The Chief Executive Officer uses adjusted operating income as the measure of profit to assess the performance of each segment. Adjusted operating income is referred to as a non-International Financial Reporting Standards (“IFRS”) measure and is defined as net income before depreciation and amortization, financial expenses, loss on valuation and translation of financial instruments, restructuring of operations, litigation and other items, gain on sale of spectrum licences, impairment of goodwill and other assets, loss on debt refinancing, income taxes and income (loss) from discontinued operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a The consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments (note 1(j)), the liability related to stock-based compensation (note 1(t)) and the net defined benefit liability (note 1(u)), and they are presented in Canadian dollars (“CAN dollars”), which is the currency of the primary economic environment in which the Corporation operates (“functional currency”). Comparative figures for the years ended December 31, 2016 and 2015 have been restated to conform to the presentation adopted for the year ended December 31, 2017. (b) Consolidation The consolidated financial statements include the accounts of the Corporation and its subsidiaries. Intercompany transactions and balances are eliminated on consolidation. A subsidiary is an entity controlled by the Corporation. Control is achieved when the Corporation is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Non-controlling interests in the net assets and results of consolidated subsidiaries are identified separately from the corporation’s ownership interest in them. Non-controlling interests in the equity of a subsidiary consist of the amount of non-controlling interests calculated at the date of the original business combination and their share of changes in equity since that date. Changes in non-controlling interests in a subsidiary that do not result in a loss of control by the Corporation are accounted for as equity transactions. (c) Business combinations A business combination is accounted for by the acquisition method. The cost of an acquisition is measured at the fair value of the consideration given in exchange for control of the business acquired at the acquisition date. This consideration can be comprised of cash, assets transferred, financial instruments issued, or future contingent payments. The identifiable assets and liabilities of the business acquired are recognized at their fair value at the acquisition date. Results of operations of a business acquired are included in the Corporation’s consolidated financial statements from the date of the business acquisition. Business acquisition and integration costs are expensed as incurred and included as other items in the consolidated statements of income. Non-controlling interests in an entity acquired are presented in the consolidated balance sheets within equity, separately from the equity attributable to shareholders, and are initially measured at fair value. (d) Foreign currency translation Foreign currency transactions are translated to the functional currency by applying the exchange rate prevailing at the date of the transactions. Translation gains and losses on assets and liabilities denominated in a foreign currency are included in financial expenses, or in gain or loss on valuation and translation of financial instruments. (e) Revenue recognition The Corporation recognizes operating revenues when the following criteria are met: · the amount of revenue can be measured reliably; · the receipt of economic benefits associated with the transaction is probable; · the costs incurred or to be incurred in respect of the transaction can be measured reliably; · the stage of completion can be measured reliably where services have been rendered; and · significant risks and rewards of ownership, including effective control, have been transferred to the buyer where goods have been sold. The portion of revenue that is unearned is recorded under “Deferred revenue” when customers are invoiced. Telecommunications The Telecommunications segment provides services under arrangements with multiple deliverables, for which there are two separate accounting units: one for subscriber services (cable television, Internet access, cable or mobile telephony and over-the-top video service, including connection costs and rental of equipment); the other for equipment sales to subscribers. Components of multiple deliverable arrangements are separately accounted for, provided the delivered elements have stand-alone value to the customer and the fair value of any undelivered elements can be objectively and reliably determined. Arrangement consideration is allocated among the separate accounting units based on their relative fair values. The Telecommunications segment recognizes each of its main activities’ revenues as follows: · Operating revenues from subscriber services, such as cable television, Internet access, cable and mobile telephony, and over-the-top video service are recognized when services are provided. Promotional offers and rebates are accounted for as a reduction in the service revenue to which they relate; · Revenues from equipment sales to subscribers and their costs are recognized in income when the equipment is delivered. Promotional offers related to equipment, with the exclusion of mobile devices, are accounted for as a reduction in related equipment sales on delivery, while promotional offers related to the sale of mobile devices are accounted for as a reduction in related equipment sales on activation; · Operating revenues related to service contracts are recognized in income over the life of the specific contracts on a straight-line basis over the period in which the services are provided; · Cable connection revenues are deferred and recognized as revenues over the estimated average period that subscribers are expected to remain connected to the network. The incremental and direct costs related to cable connection costs, in an amount not exceeding the revenue, are deferred and recognized as an operating expense over the same period. The excess of those costs over the related revenues is recognized immediately in income. Media The Media segment recognizes each of its main activities’ revenues as follows: · Advertising revenues are recognized when the advertising is aired on television, is featured in newspapers or magazines or is displayed on the digital properties or on transit shelters; · Revenues from subscriptions to specialty television channels or to online publications are recognized on a monthly basis at the time service is provided or over the period of the subscription; · Revenues from the sale or distribution of newspapers and magazines are recognized upon delivery, net of provisions for estimated returns based on historical rate of returns; · Soundstage and equipment leasing revenues are recognized over the rental period; · Revenues derived from speciality film and television services are recognized when services are provided. Sports and Entertainment The Sports and Entertainment segment recognizes each of its main activities’ revenues as follows: · Revenues from the sale or distribution of books and entertainment products are recognized upon delivery, net of provisions for estimated returns based on historical rate of returns; · Revenues from leasing and from ticket (including season tickets), food and beverage sales are recognized when the events take place and/or goods are sold, as the case may be; · Revenues from the rental of suites are recognized ratably over the period of the agreement; · Revenues from the sale of advertising under the form of venue signage or sponsorships, are recognized ratably over the period of the agreement; · Revenues derived from sporting and cultural event management are recognized when services are provided. (f) Impairment of assets For the purposes of assessing impairment, assets are grouped in cash-generating units (“CGUs”), which represent the lowest levels for which there are separately identifiable cash inflows generated by those assets. The Corporation reviews, at each balance sheet date, whether events or circumstances have occurred to indicate that the carrying amounts of its long-lived assets with finite useful lives may be less than their recoverable amounts. Goodwill, intangible assets having an indefinite useful life, and intangible assets not yet available for use are tested for impairment each financial year, as well as whenever there is an indication that the carrying amount of the asset, or the CGU to which an asset has been allocated, exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal and the value in use of the asset or the CGU. Fair value less costs of disposal represents the amount an entity could obtain at the valuation date from the asset’s disposal in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The value in use represents the present value of the future cash flows expected to be derived from the asset or the CGU. An impairment loss is recognized in the amount by which the carrying amount of an asset or a CGU exceeds its recoverable amount. When the recoverable amount of a CGU to which goodwill has been allocated is lower than the CGU’s carrying amount, the related goodwill is first impaired. Any excess amount of impairment is recognized and attributed to assets in the CGU, prorated to the carrying amount of each asset in the CGU. An impairment loss recognized in prior periods for long-lived assets with finite useful lives and intangible assets having an indefinite useful life, other than goodwill, can be reversed through the consolidated statement of income to the extent that the resulting carrying value does not exceed the carrying value that would have been the result if no impairment loss had previously been recognized. (g) Barter transactions In the normal course of operations, the Corporation principally offers advertising in exchange for goods and services. Revenues thus earned and expenses incurred are accounted for on the basis of the fair value of goods and services provided. For the year ended December 31, 2017, the Corporation recorded $12.2 million of barter advertising revenues ($11.7 million in 2016 and $10.3 million in 2015). (h) Income taxes Current income taxes are recognized with respect to amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred income taxes are accounted for using the liability method. Under this method, deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in income in the period that includes the substantive enactment date. A deferred tax asset is recognized initially when it is probable that future taxable income will be sufficient to use the related tax benefits and may be subsequently reduced, if necessary, to an amount that is more likely than not to be realized. A deferred tax expense or benefit is recognized in other comprehensive income or otherwise directly in equity to the extent that it relates to items that are recognized in other comprehensive income or directly in equity in the same or a different period. In the course of the Corporation’s operations, there are a number of uncertain tax positions due to the complexity of certain transactions and due to the fact that related tax interpretations and legislation are continually changing. When a tax position is uncertain, the Corporation recognizes an income tax benefit or reduces an income tax liability only when it is probable that the tax benefit will be realized in the future or that the income tax liability is no longer probable. (i) Leases Assets under leasing agreements are classified at the inception of the lease as (i) finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee, or as (ii) operating leases for all other leases. Operating lease rentals are recognized in the consolidated statement of income on a straight-line basis over the period of the lease. Any lessee incentives are deferred and then recognized evenly over the lease term. (j) Financial instruments Classification, recognition and measurement Financial instruments are classified as held-for-trading, available-for-sale, loans and receivables, or as other financial liabilities, and measurement in subsequent periods depends on their classification. The Corporation has classified its financial instruments (except derivative financial instruments) as follows: Held-for-trading Loans and receivables Available-for-sale Other liabilities Cash and cash equivalents Bank indebtedness Accounts receivable Loans and other long-term receivables included in “Other Assets” Other portfolio investments included in “Other Assets” Accounts payable and accrued charges Amounts payable to the parent corporation Long-term debt Other long-term financial liabilities included in Financial instruments held-for-trading are measured at fair value with changes recognized in income as a gain or loss on valuation and translation of financial instruments. Available-for-sale portfolio investments are measured at fair value or at cost in the case of equity investments that do not have a quoted market price in an active market and where fair value is insufficiently reliable, and changes in fair value are recorded in other comprehensive income. Financial assets classified as loans and receivables and financial liabilities classified as “Other liabilities” are initially measured at fair value and subsequently measured at amortized cost, using the effective interest rate method of amortization. Liabilities recognized as a result of contingent consideration arising from a business acquisition and included in “Other liabilities”, are initially recorded at their acquisition-date fair value and re-measured at fair value in subsequent periods. These changes in fair value are recorded in the consolidated statements of income as other items. Derivative financial instruments and hedge accounting The Corporation uses various derivative financial instruments to manage its exposure to fluctuations in foreign currency exchange rates and interest rates. The Corporation does not hold or use any derivative financial instruments for speculative purposes. Under hedge accounting, the Corporation documents all hedging relationships between hedging items and hedged items, as well as its strategy for using hedges and its risk-management objective. It also designates its derivative financial instruments as either fair value hedges or cash flow hedges when they qualify for hedge accounting. The Corporation assesses the effectiveness of derivative financial instruments when the hedge is put in place and on an ongoing basis. The Corporation generally enters into the following types of derivative financial instruments: · The Corporation uses foreign exchange forward contracts to hedge foreign currency rate exposure on anticipated equipment or inventory purchases in a foreign currency. The Corporation also uses offsetting foreign exchange forward contracts in combination with cross-currency interest rate swaps to hedge foreign currency rate exposure on principal payments on foreign currency denominated debt. These foreign exchange forward contracts are designated as cash flow hedges. · The Corporation uses cross-currency interest rate swaps to hedge (i) foreign currency rate exposure on interest and principal payments on foreign currency denominated debt and/or (ii) fair value exposure on certain debt resulting from changes in interest rates. The cross-currency interest rate swaps that set all future interest and principal payments on U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting an interest rate from a floating rate to a floating rate or from a fixed rate to a fixed rate, are designated as cash flow hedges. The cross-currency interest rate swaps are designated as fair value hedges when they set all future interest and principal payments on U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting the interest rate from a fixed rate to a floating rate. · The Corporation uses interest rate swaps to manage fair value exposure on certain debts resulting from changes in interest rates. These swap agreements require a periodic exchange of payments without the exchange of the notional principal amount on which the payments are based. These interest rate swaps are designated as fair value hedges when they convert the interest rate from a fixed rate to a floating rate, or as cash flow hedges when they convert the interest rate from a floating rate to a fixed rate. Under hedge accounting, the Corporation applies the following accounting policies: · For derivative financial instruments designated as fair value hedges, changes in the fair value of the hedging derivative recorded in income are substantially offset by changes in the fair value of the hedged item to the extent that the hedging relationship is effective. When a fair value hedge is discontinued, the carrying value of the hedged item is no longer adjusted and the cumulative fair value adjustments to the carrying value of the hedged item are amortized to income over the remaining term of the original hedging relationship. · For derivative financial instruments designated as cash flow hedges, the effective portion of a hedge is reported in other comprehensive income until it is recognized in income during the same period in which the hedged item affects income, while the ineffective portion is immediately recognized in income. When a cash flow hedge is discontinued, the amounts previously recognized in accumulated other comprehensive income are reclassified to income when the variability in the cash flows of the hedged item affects income. Any change in the fair value of derivative financial instruments recorded in income is included in gain or loss on valuation and translation of financial instruments. Interest expense on hedged long-term debt is reported at the hedged interest and foreign currency rates. Derivative financial instruments that do not qualify for hedge accounting, including derivatives that are embedded in financial or non-financial contracts that are not closely related to the host contracts, such as early settlement options on long term-debt, are reported on a fair value basis in the consolidated balance sheets. Any change in the fair value of these derivative financial instruments is recorded in the consolidated statements of income as a gain or loss on valuation and translation of financial instruments. Early settlement options are accounted for separately from the debt when the corresponding option exercise price is not approximately equal to the amortized cost of the debt. (k) Financing fees Financing fees related to long-term debt are capitalized in reduction of long-term debt and amortized using the effective interest rate method. (l) Tax credits and government assistance The Corporation has access to several government programs designed to support production and distribution of televisual products and movies, as well as music products, magazine and book publishing in Canada. In addition, the Corporation receives tax credits mainly related to its research and development activities, publishing activities and digital activities. Government financial assistance is accounted for as revenue or as a reduction in related costs, whether capitalized and amortized or expensed, in the year the costs are incurred and when management has reasonable assurance that the conditions of the government programs are met. (m) Cash and cash equivalents Cash and cash equivalents include highly liquid investments purchased three months or less from maturity and are recorded at fair value. These highly liquid investments consisted mainly of Bankers’ acceptances and term deposits. (n) Trade receivables Trade receivables are stated at their nominal value, less an allowance for doubtful accounts and an allowance for sales returns. The Corporation establishes an allowance for doubtful accounts based on the specific credit risk of its customers and historical trends. Individual accounts receivables are written off when management deems them not collectible. (o) Inventories Inventories are valued at the lower of cost, determined by the first-in, first-out method or the weighted-average cost method, and net realizable value. Net realizable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. When the circumstances that previously caused inventories to be written down below cost no longer exist, the amount of the write-down is reversed. In particular, inventories related to broadcasting activities, which primarily comprise programs and broadcast and distribution rights, are accounted for as follows: (i) Programs produced and productions in progress Programs produced and productions in progress related to broadcasting activities are accounted for at the lesser of cost and net realizable value. Cost includes direct charges for goods and services and the share of labour and general expenses related to each production. The cost of each program is charged to operating expenses when the program is broadcast. (ii) Broadcast and distribution rights Broadcast rights are essentially contractual rights allowing the limited or unlimited broadcast of televisual products or movies. Distribution rights include costs to acquire distribution rights for televisual products and movies and other operating costs incurred that generate future economic benefits. The Corporation records the rights acquired as inventory and the obligations incurred under a licence agreement as a liability when the broadcast or distribution period begins and all of the following conditions have been met: (a) the cost of the licence for each program, movies, series or right to broadcast a live event is known or can be reasonably determined; (b) the programs, movies or series have been accepted or the live event is broadcast in accordance with the conditions of the licence agreement; (c) the programs, movies or series are available for distribution, first showing or telecast, or when the live event is broadcast. Amounts paid for broadcast and distribution rights before all of the above conditions are met are recorded as prepaid rights. Broadcast and distribution rights are classified as current or long-term assets, based on management’s estimate of the broadcast or distribution period. These rights are charged to operating expenses when televisual products and movies are broadcast over the contract period, using a method based on how future economic benefits from those rights will be generated. Broadcast and distribution rights payable are classified as current or long-term liabilities based on the payment terms included in the licence. Estimates of future revenues used to determine the net realizable values of inventories related to the broadcasting or distribution of television products and movies are examined periodically by management and revised as necessary. The carrying value of programs produced and productions in progress, broadcast rights and distribution rights is reduced to the net realizable value, as necessary, based on this assessment. (p) Long-term investments Investments in companies subject to significant influence are accounted for using the equity method. Under the equity method, the share of the results of operations of the associated corporation is recorded in the consolidated statement of income. Carrying values of investments are reduced to estimated fair values if there is objective evidence that the investment is impaired. (q) Property, plant and equipment Property, plant and equipment are recorded at cost. Cost represents the acquisition costs, net of government grants and investment tax credits, or construction costs, including preparation, installation and testing costs. In the case of projects to construct cable and mobile networks, the cost includes equipment, direct labour and related overhead costs. Projects under development may also be comprised of advance payments made to suppliers for equipment under construction. Borrowing costs are also included in the cost of property, plant and equipment during the development phase. Expenditures, such as maintenance and repairs, are expensed as incurred. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Assets Estimated useful life Buildings and leasehold improvements 10 to 40 years Machinery and equipment 3 to 20 years Telecommunication networks 3 to 20 years Depreciation methods, residual values, and the useful lives of significant property, plant and equipment are reviewed at least once a year. Any change is accounted for prospectively as a change in accounting estimate. Leasehold improvements are depreciated over the shorter of the term of the lease and their estimated useful life. The Corporation does not record any decommissioning obligations in connection with its cable distribution networks. The Corporation expects to renew all of its agreements with utility companies to access their support structures in the future, making the retirement date so far into the future that the present value of the restoration costs is insignificant for those assets. A decommissioning obligation is however recorded for the rental of sites related to the mobile network. Videotron Ltd. (“Videotron”) is engaged in an agreement to operate a shared LTE network in the Province of Québec and the Ottawa region. (r) Goodwill and intangible assets Goodwill Goodwill initially arising from a business acquisition is measured and recognized as the excess of the fair value of the consideration paid over the fair value of the recognized identifiable assets acquired and liabilities assumed. When the Corporation acquires less than 100% of the equity interests in the business acquired at the acquisition date, goodwill attributable to the non-controlling interests is also recognized at fair value. Goodwill is allocated as at the date of a business acquisition to a CGU for purposes of impairment testing (note 1(f)). The allocation is made to the CGU or group of CGUs expected to benefit from the synergies of the business acquisition. Intangible assets Spectrum licences are recorded at cost. Spectrum licences have an indefinite useful life and are not amortized based on the following facts: (i) the Corporation intends to renew the spectrum licences and believes that they are likely to be renewed by Innovation, Science and Economic Development Canada, (ii) the Corporation has the financial and operational ability to renew these spectrum licences, (iii) currently, the competitive, legal and regulatory landscape does not limit the useful lives of the spectrum licences, and (iv) the Corporation foresees no limit to the period during which these licences can be expected to generate cash flows in the future. Broadcasting licences, trademarks and sport franchises have also an indefinite useful life and are not amortized. These intangibles assets are recorded at cost or at fair value at the acquisition date if they are acquired through a business acquisition. Software is recorded at cost. In particular, internally generated intangible assets such as software and Web site development are mainly comprised of internal costs in connection with the development of those assets to be used internally or to provide services to customers. These costs are capitalized when the development stage of the software application begins and costs incurred prior to that stage are recognized as expenses. Naming rights for the Videotron Centre in Québec City are recognized at cost. Customer relationships acquired through a business acquisition are recorded at fair value at the date of acquisition. Borrowing costs directly attributable to the acquisition, development or production of an intangible asset are also included as part of the cost of that asset during the development phase. Intangible assets with finite useful lives are amortized over their useful lives using the straight-line method over the following periods: Assets Estimated useful life Software 3 to 7 years Naming rights 25 years Customer relationships and other 3 to 10 years Amortization methods, residual values, and the useful lives of significant intangible assets are reviewed at least once a year. Any change is accounted for prospectively as a change in accounting estimate. (s) Provisions Provisions are recognized when (i) the Corporation has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation, and when (ii) the amount of the obligation can be reliably estimated. Restructuring costs, comprised primarily of termination benefits, are recognized when a detailed plan for the restructuring exists and a valid expectation has been raised in those affected, that the plan will be carried out. Provisions are reviewed at each balance sheet date and changes in estimates are reflected in the consolidated statement of income in the reporting period in which changes occur. (t) Stock-based compensation Stock-based awards to employees that call for settlement in cash, as deferred share units (“DSUs”) and performance share units (“PSUs”), or that call for settlement in cash at the option of the employee, as stock options awards, are accounted for at fair value and classified as a liability. The compensation cost is recognized in expenses over the vesting period. Changes in the fair value of stock-based awards between the grant date and the measurement date result in a change in the liability and compensation cost. The fair value of DSUs and PSUs is based on the underlying share price at the date of valuation. The fair value of stock option awards is determined by applying an option pricing model, taking into account the terms and conditions of the grant. Key assumptions are described in note 23. (u) Pension plans and postretirement benefits The Corporation offers defined contribution pension plans and defined benefit pension plans to some of its employees. (i) Defined contribution pension plans Under its defined contribution pension plans, the Corporation pays fixed contributions to participating employees’ pension plans and has no legal or constructive obligation to pay any further amounts. Obligations for contributions to defined contribution pension plans are recognized as employee benefits in the consolidated statements of income when the contributions become due. (ii) Defined benefit pension plans and postretirement plans Defined benefit pension plan costs are determined using actuarial methods and are accounted for using the projected unit credit method, which incorporates management’s best estimates of future salary levels, other cost escalations, retirement ages of employees, and other actuarial factors. Defined benefit pension costs, recognized in the consolidated statements of income as employee costs, mainly include the following: · service costs provided in exchange for employee services rendered during the period; · prior service costs recognized at the earlier of (a) when the employee benefit plan is amended or (b) when restructuring costs are recognized; · curtailment or settlement gain or loss. Interest on net defined benefit liability or asset, recognized in the consolidated statements of income as financial expenses, is determined by multiplying the net defined benefit liability or asset by the discount rate used to determine the defined benefit obligation. Re-measurements of the net defined benefit liability or asset are recognized immediately in other comprehensive loss and in accumulated other comprehensive loss. Re-measurements are comprised of the following: · actuarial gains and losses arising from changes in financial and demographic actuarial assumptions used to determine the defined benefit obligation or from experience adjustments on liabilities; · the difference between actual re |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2017 | |
REVENUES | |
REVENUES | 2. REVENUES The breakdown of revenues between services rendered and product sales is as follows: 2017 2016 2015 Services rendered $ $ $ Product sales $ $ $ |
EMPLOYEE COSTS AND PURCHASE OF
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES | |
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES | 3. EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES The main components are as follows: 2017 2016 2015 Employee costs $ $ $ Less employee costs capitalized to property, plant and equipment and to intangible assets ) ) ) Purchase of goods and services: Royalties, rights and creation costs Cost of products sold Service contracts Marketing, circulation and distribution expenses Building expenses Other $ $ $ |
FINANCIAL EXPENSES
FINANCIAL EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
FINANCIAL EXPENSES | |
FINANCIAL EXPENSES | 4. FINANCIAL EXPENSES 2017 2016 2015 Interest on long-term debt $ $ $ Amortization of financing costs and long-term debt discount Interest on net defined benefit liability (Gain) loss on foreign currency translation on short-term monetary items ) Other ) $ $ $ |
LOSS ON VALUATION AND TRANSLATI
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | |
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | 5. LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS 2017 2016 2015 Loss (gain) on the ineffective portion of fair value hedges $ $ $ ) Loss on the ineffective portion of cash flow hedges — (Gain) loss on embedded derivatives related to long-term debt ) ) Loss (gain) on reversal of embedded derivatives on debt redemption — ) $ $ $ |
RESTRUCTURING OF OPERATIONS, LI
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS | 12 Months Ended |
Dec. 31, 2017 | |
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS | |
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS | 6. RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS In 2017, a net charge of $17.2 million was recorded relating to various cost reduction across the Corporation, the migration of subscribers from analog to digital services in the Telecommunications segment and developments in certain legal disputes (a net charge of $28.5 million in 2016 and a net gain of $117.2 million in 2015). In 2015, the net gain of $117.2 million included a gain of $139.1 million resulting from the Court of Appeal of Quebec ruling in favour of Videotron and TVA Group Inc. (“TVA Group”), which ordered Bell ExpressVu Limited Partnership (“Bell ExpressVu”), a subsidiary of Bell Canada, to pay Videotron $135.3 million and TVA Group $0.6 million, including interest, for negligence in failing to implement an appropriate security system to prevent piracy of the signals broadcast by its satellite television service between 1999 and 2005, thereby harming its competitors and broadcasters. |
GAIN ON SALE OF SPECTRUM LICENC
GAIN ON SALE OF SPECTRUM LICENCES | 12 Months Ended |
Dec. 31, 2017 | |
GAIN ON SALE OF SPECTRUM LICENCES | |
GAIN ON SALE OF SPECTRUM LICENCES | 7. GAIN ON SALE OF SPECTRUM LICENCES On June 20, 2017, Videotron sold its AWS spectrum licence in the greater Toronto region to Rogers Communications Canada Inc. for a cash consideration of $184.2 million, pursuant to the transfer option held by Videotron since 2013. The sale resulted in a gain on disposal of $87.8 million. On July 24, 2017, Videotron sold its seven 2500 MHz and 700 MHz wireless spectrum licences outside Québec to Shaw Communications Inc. for a cash consideration of $430.0 million. The sale resulted in a gain on disposal of $243.1 million. As a result of these transactions, tax benefits of $44.4 million, on previous years’ capital losses, were recognized in the consolidated statement of income in 2017. |
IMPAIRMENT OF GOODWILL AND OTHE
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | 8. IMPAIRMENT OF GOODWILL AND OTHER ASSETS 2017 2016 2015 Impairment of goodwill $ $ $ Impairment of property, plant and equipment — — Impairment of intangible assets $ $ $ 2017 During the third quarter of 2017, the Corporation performed an impairment test of its Magazines CGU in light of the continuous downtrend in revenues in this industry. The Corporation concluded that the recoverable amount was less than the carrying amount of the Magazines CGU and recorded a goodwill impairment charge of $30.0 million (including $1.5 million without any tax consequence) and an impairment charge of $12.4 million on intangible assets (including $3.1 million without any tax consequence). An impairment charge on intangible assets of $1.4 million was also recorded in 2017 in other segments. 2016 During the third quarter of 2016, the Corporation performed an impairment test of its Magazines CGU in light of the continuous downtrend in advertising revenues in this industry. The Corporation concluded that the recoverable amount was less than the carrying amount of the Magazines CGU and recorded a goodwill impairment charge of $40.1 million (without any tax consequence). An impairment charge on intangible assets of $0.8 million was also recorded in 2016 in other segments. 2015 In 2015, the Corporation performed impairment tests on its CGUs and concluded that the recoverable amounts of its Newspapers and Broadcasting CGUs were less than their carrying values. The recoverable amounts of these CGUs were negatively impacted by the decrease in newspaper and commercial printing volumes at the Mirabel printing plant, plus the continuing pressure on advertising revenues in the newspaper and television industries. Accordingly, a goodwill impairment charge of $85.0 million (without any tax consequence) and an impairment charge on other assets of $81.9 million, mainly related to Mirabel printing plant assets, were recorded for the Newspapers CGU. An impairment charge of $60.1 million on the TVA Network’s broadcasting licence (including $30.1 million without any tax consequence) was recorded for the Broadcasting CGU. An impairment charge on intangible assets of $3.7 million was also recorded in 2015 in other segments. |
LOSS ON DEBT REFINANCING
LOSS ON DEBT REFINANCING | 12 Months Ended |
Dec. 31, 2017 | |
LOSS ON DEBT REFINANCING | |
LOSS ON DEBT REFINANCING | 9. LOSS ON DEBT REFINANCING 2017 · On May 1, 2017, Videotron redeemed all of its issued and outstanding 6.875% Senior Notes due July 15, 2021, in aggregate principal amount of $125.0 million, for a cash consideration of $129.3 million. · On May 1, 2017, Quebecor Media redeemed all of its issued and outstanding 7.375% Senior Notes due January 15, 2021, in aggregate principal amount of $325.0 million, for a cash consideration of $333.0 million. These transactions resulted in a total loss of $15.6 million in 2017. 2016 · On December 2, 2016, Videotron issued a notice for the redemption of an aggregate principal amount of $175.0 million of its issued and outstanding 6.875% Senior Notes due July 15, 2021. On January 5, 2017, the Senior Notes were redeemed for a cash consideration of $181.0 million. This transaction resulted in a loss of $7.3 million in 2016. 2015 · On April 10, 2015, Videotron redeemed all of its issued and outstanding 6.375% Senior Notes due December 15, 2015, in aggregate principal amount of US$175.0 million, and the related hedging contracts were unwound for a total cash consideration of $204.5 million. · On July 16, 2015, Videotron redeemed all of its issued and outstanding 9.125% Senior Notes due April 15, 2018, in aggregate principal amount of US$75.0 million, and the related hedging contracts were unwound for a total cash consideration of $75.9 million. · On July 16, 2015, Videotron redeemed all of its issued and outstanding 7.125% Senior Notes due January 15, 2020, in aggregate principal amount of $300.0 million, for a total cash consideration of $310.7 million. These transactions resulted in a total loss of $12.1 million in 2015, net of a gain of $3.9 million previously reported in other comprehensive income. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES The following table reconciles income taxes at the Corporation’s domestic statutory tax rate of 26.8% in 2017 (26.9% in 2016 and 2015) and income taxes in the consolidated statements of income: 2017 2016 2015 Income taxes at domestic statutory tax rate $ $ $ (Reduction) increase resulting from: Effect of non-deductible charges, non-taxable income and differences between current and future tax rates ) Change in benefit arising from the recognition of current and prior year tax losses (note 7) ) ) Non-deductible impairment of goodwill Change in deferred tax balances due to a change in substantively enacted tax rates — ) — Effect of tax consolidation transactions with the parent corporation — ) ) Other 1 ) ) ) Income taxes $ $ $ 1 Includes in 2015 a decrease of $16.1 million in income tax liability resulting from developments in tax audit matters, jurisprudence and tax legislation. The significant items comprising the Corporation’s net deferred income tax liability and their impact on the deferred income tax expense are as follows: Consolidated Consolidated 2017 2016 2017 2016 2015 Loss carryforwards $ $ $ $ $ Accounts payable, accrued charges, provisions and deferred revenue ) ) Defined benefit plans ) ) Property, plant and equipment ) ) ) Goodwill, intangible assets and other assets ) ) Long-term debt and derivative financial instruments ) ) ) Benefits from a general partnership — ) ) ) Other $ ) $ ) $ $ ) $ Changes in the net deferred income tax liability are as follows: Note 2017 2016 Balance at beginning of year $ ) $ ) Recognized in income as continuing operations ) Recognized in income as discontinued operations — Recognized in other comprehensive income Business acquisitions and disposals 11, 30 — ) Acquisition of tax deductions — Other ) ) Balance at end of year $ ) $ ) Deferred income tax asset $ $ Deferred income tax liability ) ) $ ) $ ) As of December 31, 2017, the Corporation had loss carryforwards for income tax purposes of $6.4 million available to reduce future taxable income, that will expire between 2035 and 2037. These losses have been recognized. The Corporation also had capital losses of $579.9 million that can be carried forward indefinitely and applied only against future capital gains, none of which were recognized. There are no income tax consequences attached to the payment of dividends or distributions in 2017, 2016 or 2015 by the Corporation to its shareholders. |
NON-CONTROLLING INTERESTS AND B
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2017 | |
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS | |
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS | 11. NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS (a) Non-controlling interests acquisitions 2015 · On March 20, 2015, TVA Group completed a rights offering, whereby TVA Group received aggregate gross proceeds of $110.0 million from the issuance of 19,434,629 Class B Shares, non-voting, participating, without par value of TVA Group (“TVA Group Class B Shares”). Under the rights offering, Quebecor Media has subscribed to 17,300,259 TVA Group Class B Shares at a total cost of $97.9 million; accordingly, its aggregate equity interest in TVA Group increased from 51.5% to 68.4%. The increase of Quebecor Media’s interest in TVA Group was accounted for as an equity transaction and resulted in a decrease of deficit of $18.7 million and in an equivalent decrease of non-controlling interests. · Other non-controlling interests acquisitions were made in 2015, resulting in an increase of deficit of $2.2 million and in an equivalent increase of non-controlling interests. (b) Business acquisitions 2017 · In 2017, the Corporation acquired a business, included in the Sports and Entertainment segment, for a cash consideration of $0.2 million. 2016 · On January 7, 2016, Videotron acquired Fibrenoire inc., a company that provides businesses with fibre-optic connectivity services, for a purchase price of $125.0 million. At closing, Videotron paid an amount of $119.1 million, net of cash acquired of $1.8 million. A post-closing adjustment of $0.2 million was received in the second quarter of 2016. The purchase price balance was paid in February 2017 for an amount of $5.6 million plus interests of $0.3 million. · An amount of $0.6 million was also paid in 2016 relating to balances payable on prior business acquisitions. 2015 · On March 11, 2015, the Telecommunications segment acquired 4Degrees Colocation Inc. (“4Degrees Colocation”) and its data center, the largest in Québec City, for a purchase price of $35.5 million in cash. A post-closing adjustment of $0.2 million was received in the second quarter of 2015. The acquisition enables Videotron to meet its business customers’ growing technological and hosting needs. · On April 12, 2015, TVA Group acquired 14 magazines, including some magazines that are owned and operated in partnership, for a purchase price of $55.5 million in cash and a post-closing adjustment of $0.8 million, paid in the fourth quarter of 2015. The transaction is in line with the strategy of investing in the production and distribution of high-quality, rich, diverse entertainment and news media content. · In 2015, the Corporation also acquired other businesses, such as Marathon de Québec, included in the Sports and Entertainment segment. The purchase price allocation between the fair value of identifiable assets and liabilities related to business acquisitions in 2016 and 2015 is summarized as follows: 2016 2015 Assets acquired Non-cash current assets $ $ Property, plant and equipment Intangible assets Goodwill Other assets — Liabilities assumed Non-cash current liabilities ) ) Deferred income taxes ) ) Other long-term liabilities ) — ) ) Net assets acquired at fair value Non-controlling interests — ) $ $ Consideration Cash $ $ Balance payable $ $ No amount of goodwill is deductible for tax purposes in 2017 ($0.1 million in 2016 and $7.6 million in 2015). |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS RECEIVABLE | |
ACCOUNTS RECEIVABLE | 12. ACCOUNTS RECEIVABLE Note 2017 2016 Trade 27(c) $ $ Other $ $ |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2017 | |
INVENTORIES | |
INVENTORIES | 13. INVENTORIES 2017 2016 Raw materials and supplies $ $ Finished goods Programs, broadcast and distribution rights Work in progress $ $ Cost of inventories included in purchase of goods and services amounted to $718.8 million in 2017 ($737.7 million in 2016 and $681.2 million in 2015). Write-downs of inventories totalling $11.1 million were recognized in purchase of goods and services in 2017 ($6.8 million in 2016 and $5.8 million in 2015). |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 14. PROPERTY, PLANT AND EQUIPMENT For the years ended December 31, 2017 and 2016, changes in the net carrying amount of property, plant and equipment are as follows: Land, Machinery Telecommuncation Projects Total Cost Balance as of December 31, 2015 $ $ $ $ $ Additions Net change in additions financed with accounts payable — ) ) Business acquisitions (note 11) — Reclassification — ) — Retirement, disposals and other ) ) ) ) ) Balance as of December 31, 2016 Additions Net change in additions financed with accounts payable — ) ) ) Reclassification — ) — Retirement, disposals and other ) ) ) ) Balance as of December 31, 2017 $ $ $ $ $ Land, Machinery Telecommunication Projects Total Accumulated depreciation and impairment losses Balance as of December 31, 2015 $ $ $ $ — $ Depreciation — Retirement, disposals and other ) ) ) — ) Balance as of December 31, 2016 — Depreciation — Retirement, disposals and other ) ) ) — ) As of December 31, 2017 $ $ $ $ — $ Net carrying amount As of December 31, 2016 $ $ $ $ $ As of December 31, 2017 $ $ $ $ $ In 2017, the calculation of the depreciation of a component of the Corporation’s telecommunication networks was changed in order to depreciate it over its useful life of 5 years, compared with 15 years previously. As a result, depreciation was increased by $21.0 million in 2017. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 15. INTANGIBLE ASSETS For the years ended December 31, 2017 and 2016, changes in the net carrying amount of intangible assets are as follows: Spectrum Software Customer Broadcasting Projects Total Cost Balance as of December 31, 2015 $ $ $ $ $ $ Additions — — Net change in additions financed with accounts payable — ) — — ) ) Business acquisitions (note 11) — — Reclassification — — — ) — Retirement, disposals and other — ) ) — — ) Balance as of December 31, 2016 Additions — — Net change in additions financed with accounts payable — — — Reclassification — — — ) — Retirement, disposals and other (note 7) ) ) ) — ) ) Balance as of December 31, 2017 $ $ $ $ $ $ Spectrum Software Customer Broadcasting Projects Total Accumulated amortization and impairment losses Balance as of December 31, 2015 $ $ $ $ $ — $ Amortization — — — Impairment losses (note 8) — — — — Retirement, disposals and other — ) ) — — ) Balance as of December 31, 2016 — Amortization — — — Impairment losses (note 8) — — Retirement, disposals and other — ) ) — — ) Balance as of December 31, 2017 $ $ $ $ $ — $ Net carrying amount As of December 31, 2016 $ $ $ $ $ $ As of December 31, 2017 $ $ $ $ $ $ The cost of internally generated intangible assets, mainly composed of software, was $566.5 million as of December 31, 2017 ($504.7 million as of December 31, 2016). For the year ended December 31, 2017, the Corporation recorded additions of internally generated intangible assets of $70.5 million ($66.0 million in 2016 and $36.9 million in 2015). The accumulated amortization and impairment losses on internally generated intangible assets, mainly composed of software, was $323.3 million as of December 31, 2017 ($283.8 million as of December 31, 2016). For the year ended December 31, 2017, the Corporation recorded $44.9 million in amortization on its internally generated intangible assets ($43.8 million in 2016 and $39.2 million in 2015). The net carrying value of internally generated intangible assets was $243.2 million as of December 31, 2017 ($220.9 million as of December 31, 2016). Spectrum licences are allocated to the Telecommunications CGU, broadcasting licences are allocated to the Broadcasting CGU, trademarks are allocated to the Telecommunications and Magazines CGUs, while sport franchises are allocated to the Sports and Entertainment CGU. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL | |
GOODWILL | 16. GOODWILL For the years ended December 31, 2017 and 2016, changes in the net carrying amount of goodwill are as follows: 2017 2016 Cost Balance at beginning of year $ $ Business acquisitions (note 11) Balance at end of year Accumulated amortization and impairment losses Balance at beginning of year Impairment losses (note 8) Balance at end of year Net carrying amount $ $ The net carrying amount of goodwill as of December 31, 2017 and 2016 was allocated to the following significant CGU groups: 2017 2016 CGU groups Telecommunications $ $ Magazines — Other 1 Total $ $ 1 Includes the CGUs related to Speciality film and television services, Book publishing and distribution, and Sports and Entertainment. Recoverable amounts CGU recoverable amounts were determined based on the higher of a value in use or a fair value less costs of disposal with respect to the impairment tests performed. The Corporation uses the discounted cash flow method to estimate the recoverable amount, consisting of future cash flows derived primarily from the most recent budget and three-year strategic plan approved by the Corporation’s management and presented to the Board of Directors. These forecasts considered each CGU’s past operating performance and market share as well as economic trends, along with specific and market industry trends and corporate strategies. In particular, specific assumptions are used for each type of revenue generated by a CGU or for each nature of expenses, as well as for future capital expenditures. Such assumptions will consider, among many other factors, subscribers, readership and viewer statistics, advertising market trends, competitive landscape, evolution of products and services offerings, wireless penetration growth, proliferation of media platforms, technology evolution, broadcast programming strategy, bargaining agreements, Canadian GDP rates, and operating cost structures. A perpetual growth rate is used for cash flows beyond the three-year strategic plan period. The discount rate used by the Corporation is a pre-tax rate derived from the weighted average cost of capital pertaining to each CGU, which reflects the current market assessment of (i) the time value of money, and (ii) the risk specific to the assets for which the future cash flow estimates have not been risk-adjusted. The perpetual growth rate was determined with regard to the specific markets in which the CGUs participate. In certain circumstances, the Corporation can also estimate the fair value less cost of disposal with a market approach that consists of estimating the recoverable amount by using multiples of operating performance of comparable entities, transaction metrics and other financial information available, instead of primarily using the discounted cash flow method. The following key assumptions were used to determine recoverable amounts in the most recent impairment tests performed on the Corporation’s significant CGU groups: 2017 2016 CGU groups 1 Pre-tax Perpetual Pre-tax Perpetual Telecommunications % % % % Magazines ) ) Other 12.0 to 16.5 0.0 to 2.0 12.0 to 16.5 0.0 to 2.0 1 In 2017 and 2016, the recoverable amounts of all CGUs were based on value in use, using the discounted cash flow method. Sensitivity of recoverable amounts No reasonable changes in the discount rate or in the perpetual growth rate used in the most recent test performed would have caused the recoverable amount of the Telecommunication CGU to equal its carrying value. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ASSETS | |
OTHER ASSETS | 17. OTHER ASSETS 2017 2016 Programs, broadcast and distribution rights $ $ Deferred connection costs Other $ $ |
ACCOUNTS PAYABLE AND ACCRUED CH
ACCOUNTS PAYABLE AND ACCRUED CHARGES | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS PAYABLE AND ACCRUED CHARGES | |
ACCOUNTS PAYABLE AND ACCRUED CHARGES | 18. ACCOUNTS PAYABLE AND ACCRUED CHARGES 2017 2016 Trade and accruals $ $ Salaries and employee benefits Interest payable Stock-based compensation $ $ |
PROVISIONS AND CONTINGENCIES
PROVISIONS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
PROVISIONS AND CONTINGENCIES | |
PROVISIONS AND CONTINGENCIES | 19. PROVISIONS AND CONTINGENCIES Restructuring Contingencies, Total Balance as of December 31, 2016 $ $ $ Recognized in income ) Payments ) ) ) Other — Balance as of December 31, 2017 $ $ $ Current portion $ $ $ Non-current portion (included in “Other Liabilities”) The recognition of provisions, in terms of both timing and amounts, requires the exercise of judgment based on relevant circumstances and events that can be subject to change over time. Provisions are primarily comprised of the following: Restructuring of operations Provisions for restructuring activities primarily cover severance payments related to initiatives to eliminate positions. Contingencies and legal disputes There are a number of legal proceedings against the Corporation that are pending. In the opinion of the management of the Corporation, the outcome of those proceedings is not expected to have a material adverse effect on the Corporation’s results or on its financial position. Management of the Corporation, after taking legal advice, has established provisions for specific claims or actions considering the facts of each case. The Corporation cannot determine when and if any payment will be made related to those provisions. Other Other provisions are principally related to decommissioning obligations. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 20. LONG-TERM DEBT Effective interest rate as of December 31, 2017 2017 2016 Quebecor Media Bank credit facilities (i) % $ 420.4 $ 453.4 Senior Notes (ii) Videotron (iii) Bank credit facilities (iv) % Senior Notes (ii) TVA Group (iii) Bank credit facilities (v) % Other Total long-term debt Change in fair value related to hedged interest rate risk Adjustments related to embedded derivatives — Financing fees, net of amortization ) ) ) ) Less current portion ) ) $ 5,292.6 $ 5,617.2 (i) The bank credit facilities of Quebecor Media are comprised of a US$350.0 million secured term loan “B” facility that matures in August 2020 and is bearing interest at U.S. London Interbank Offered Rate (“LIBOR”) plus a premium of 2.25% and a $300.0 million secured revolving credit facility that matures in July 2020 and is bearing interest at Bankers’ acceptance rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a premium determined by a leverage ratio. The term loan “B” facility provides for quarterly amortization payments totaling 1.00% per annum of the original principal amount, with the balance payable on August 17, 2020. These credit facilities contain covenants such as maintaining certain financial ratios, limitations on the Corporation’s ability to incur additional indebtedness, pay dividends, and make other distributions. They are secured by liens on all of the movable property and assets of the Corporation (primarily shares of its subsidiaries), now owned or hereafter acquired. As of December 31, 2017, the credit facilities were secured by assets with a carrying value of $3,045.4 million ($3,123.2 million in 2016). As of December 31, 2017 and 2016, no amount had been drawn on the revolving credit facility, and as of December 31, 2017, $420.4 million was outstanding on the term loan “B” ($453.4 million in 2016). (ii) The Senior Notes are unsecured and contain certain restrictions on the respective issuers, including limitations on their ability to incur additional indebtedness, pay dividends, or make other distributions. Some Notes are redeemable at the option of the issuer, in whole or in part, at a price based on a make-whole formula during the first five years of the term of the Notes and at a decreasing premium thereafter, while the remaining Notes are redeemable at a price based on a make-whole formula at any time prior to maturity. The Notes issued by Videotron are guaranteed by specific subsidiaries of Videotron. The following table summarizes the terms of the outstanding Senior Notes as of December 31, 2017: Effective interest rate (after discount or Annual nominal premium at Interest payable Principal amount interest rate issuance) Maturity date every 6 months on Quebecor Media US$ % % January 15, 2023 June and December 15 $ % % January 15, 2023 June and December 15 Videotron US$ % % July 15, 2022 January and July 15 US$ % % June 15, 2024 June and December 15 $ % % June 15, 2025 April and October 15 $ 1 % % January 15, 2026 March and September 15 US$ 2 % % April 15, 2027 April and October 15 1 The Notes were issued in September 2015 for net proceeds of $370.1 million, net of financing fees of $4.9 million. 2 The Notes were issued in April 2017 for net proceeds of $794.5 million, net of financing fees of $9.9 million. (iii) The debts of these subsidiaries are non-recourse to Quebecor Media. (iv) The bank credit facilities provide for a $965.0 million secured revolving credit facility that matures in July 2021, and a $75.0 million secured export financing facility providing for a term loan that matures in June 2018. The revolving credit facility bears interest at Bankers’ acceptance rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a margin, depending on Videotron’s leverage ratio. Advances under the export financing facility bear interest at Bankers’ acceptance rate plus a margin. The bank credit facilities are secured by a first ranking hypothec on the universality of all tangible and intangible assets, current and future, of Videotron and most of its wholly owned subsidiaries. As of December 31, 2017, the bank credit facilities were secured by assets with a carrying value of $6,665.7 million ($5,804.3 million in 2016). The bank credit facilities contain covenants such as maintaining certain financial ratios, limitations on Videotron’s ability to incur additional indebtedness, pay dividends, or make other distributions. As of December 31, 2017, no amount had been drawn on the secured revolving credit facility ($209.4 million was drawn in 2016) and $5.4 million was outstanding on the export financing facility ($16.1 million in 2016). (v) The bank credit facilities of TVA Group comprise a secured revolving credit facility in the amount of $150.0 million, maturing in February 2019, and a secured term loan in the amount of $75.0 million, maturing in November 2019. TVA Group’s revolving credit facility bears interest at floating rates based on Bankers’ acceptance rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a premium determined by a leverage ratio. The term loan bears interest at floating rates based on Bankers’ acceptance rate or Canadian prime rate, plus a premium determined by a leverage ratio. The term loan provides for quarterly amortization payments commencing on December 20, 2015. The bank credit facilities contain covenants such as maintaining certain financial ratios, limitations on TVA Group’s ability to incur additional indebtedness, pay dividends, or make other distributions. They are secured by liens on all of its movable assets and an immovable hypothec on its Head Office building. As of December 31, 2017 and 2016, no amount had been drawn on the revolving credit facility, and as of December 31, 2017, $62.9 million was outstanding on the term loan ($69.6 million in 2016). On December 31, 2017, the Corporation was in compliance with all debt covenants. Principal repayments of long-term debt over the coming years are as follows: 2018 $ 2019 2020 2021 — 2022 2023 and thereafter |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | 21. OTHER LIABILITIES Note 2017 2016 Defined benefit plans $ $ Deferred revenue Stock-based compensation 1 Other $ $ 1 The current $19.8 million portion of stock-based compensation is included in accounts payable and accrued charges ($17.2 million in 2016) (note 18). |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2017 | |
CAPITAL STOCK | |
CAPITAL STOCK | 22. CAPITAL STOCK (a) Authorized capital stock An unlimited number of Common Shares, without par value; An unlimited number of non-voting Cumulative First Preferred Shares, without par value; the number of preferred shares in each series and the related characteristics, rights and privileges are determined by the Board of Directors prior to each issue: · An unlimited number of Cumulative First Preferred Shares, Series A (“Preferred A Shares”), carrying a 12.5% annual fixed cumulative preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation; · An unlimited number of Cumulative First Preferred Shares, Series B (“Preferred B Shares”), carrying a fixed cumulative preferential dividend generally equivalent to the Corporation’s credit facility interest rate, redeemable at the option of the holder and retractable at the option of the Corporation; · An unlimited number of Cumulative First Preferred Shares, Series C (“Preferred C Shares”), carrying an 11.25% annual fixed cumulative preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation; · An unlimited number of Cumulative First Preferred Shares, Series D (“Preferred D Shares”), carrying an 11.0% annual fixed cumulative preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation; · An unlimited number of Cumulative First Preferred Shares, Series F (“Preferred F Shares”), carrying a 10.85% annual fixed cumulative preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation; · An unlimited number of Cumulative First Preferred Shares, Series G (“Preferred G Shares”), carrying a 10.85% annual fixed cumulative preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation; An unlimited number of non-voting Preferred Shares, Series E (“Preferred E Shares”), carrying a non-cumulative dividend subsequent to the holders of Cumulative First Preferred Shares, redeemable at the option of the holder and retractable at the option of the Corporation. (b) Issued and outstanding capital stock Common Shares Number Amount Balance as of December 31, 2015 $ Reduction of paid-up capital — ) Balance as of December 31, 2016 $ Reduction of paid-up capital — ) Redemption ) ) Balance as of December 31, 2017 $ In 2017, the Corporation reduced its paid-up capital for a total cash consideration of $50.0 million ($100.0 million in 2016). In conjunction with the sale of its AWS spectrum licence on June 20, 2017 (note 7), and in accordance with the provisions of the share repurchase agreement dated September 2015 between Quebecor Media and CDP Capital d’Amérique Investissement inc. (“CDP Capital”), Quebecor Media repurchased and cancelled, on July 6, 2017, 541,899 of its Common Shares held by CDP Capital for an amount of $37.7 million. On the same day, Quebecor Media also paid off a security held by CDP Capital for an amount of $6.2 million. The $23.3 million excess of the shares repurchase value and the security payment over the carrying value of Common Shares repurchased was recorded as an increase of the deficit. On September 9, 2015, the Corporation repurchased 7,268,324 of its Common Shares held by CDP Capital for an aggregate purchase price of $500.0 million, paid in cash. All repurchased shares were cancelled. Transaction fees of $0.2 million, and the $210.3 million excess in the purchase price over the carrying value of the Common Shares repurchased, were recorded in increase to the deficit. (c) Cumulative First Preferred Shares As of December 31, 2015, 430,000 Preferred G Shares were issued and outstanding for an amount of $430.0 million. All Cumulative First Preferred Shares were owned by subsidiaries of the Corporation and were eliminated on consolidation. In 2016, all Preferred G Shares were repurchased. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2017 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | 23. STOCK-BASED COMPENSATION PLANS (a) Quebecor plans On November 8, 2017, a stock split on Quebecor’s outstanding Class A and Class B Shares was performed on a two-for-one basis. Accordingly, all references to Quebecor share-based compensation information in these condensed consolidated financial statements have been retrospectively restated to reflect the impact of the stock split. (i) Stock option plan Under a stock option plan established by the parent corporation, 26,000,000 Class B Shares of the parent corporation have been set aside for directors, officers, senior employees, and other key employees of Quebecor and the Corporation. The exercise price of each option is equal to the weighted average trading price of the parent corporation’s Class B Shares on the Toronto Stock Exchange over the last five trading days immediately preceding the granting of the option. Each option may be exercised during a period not exceeding 10 years from the date granted. Options usually vest as follows: 1/3 after one year, 2/3 after two years, and 100% three years after the original grant. Holders of options under the stock option plan have the choice, when they exercise their options, of acquiring the Class B Shares at the corresponding option exercise price, or receiving a cash payment equivalent to the difference between the market value of the underlying shares and the exercise price of the option. The Board of Directors of the parent corporation may, at its discretion, affix different vesting periods at the time of each grant. The following table gives details on changes to outstanding options for the years ended December 31, 2017 and 2016: 2017 2016 Options Weighted Options Weighted Balance at beginning of year $ $ Exercised ) — — Cancelled ) — — Balance at end of year Vested options at end of year $ $ During the year ended December 31, 2017, 630,000 stock options of Quebecor were exercised for a cash consideration of $4.7 million (none in 2016). As of December 31, 2017, exercise prices of all outstanding and vested options are from $11.11 to $15.12 and the number of years to maturity of all outstanding options is 5.88 years. (ii) Mid-term stock-based compensation plan Under a mid-term stock-based compensation plan, participants are entitled to receive a cash payment at the end of a three-year period based on the appreciation of the Quebecor Class B Share price, and subject to the achievement of certain non-market performance criteria. The following table provides details of changes to outstanding units in the mid-term stock-based compensation plan for the years ended December 31, 2017 and 2016: 2017 2016 Units Weighted Units Weighted Balance at beginning of year $ $ Exercised ) ) Cancelled ) — — Balance at end of year $ $ During the year ended December 31, 2017, a cash consideration of $4.9 million was paid upon the exercise of 1,140,941 units ($0.3 million upon the exercise of 48,722 units in 2016). (iii) Deferred share unit plan The Quebecor DSU plan is for the benefit of Quebecor and the Corporation’s directors. Under this plan, each director receives a portion of his/her compensation in the form of DSUs, such portion representing at least 50% of the annual retainer which could be less upon reaching the minimum shareholding threshold set out in the policy regarding the minimum shareholding by directors. Subject to certain conditions, each director may elect to receive up to 100% of the total fees payable for services as a director in the form of units. The value of a DSU is based on the weighted average trading price of the Corporation’s Class B Shares on the Toronto Stock Exchange over the last five trading days immediately preceding the relevant date. DSUs will entitle the holders thereof to dividends, which will be paid in the form of additional units at the same rate as that applicable to dividends paid from time to time on the Corporation’s Class B Shares. Subject to certain limitations, the DSUs will be redeemed by the Corporation when the director ceases to serve as a director of the Corporation. For the purpose of redeeming units, the value of a DSU shall correspond to the fair market value of the Corporation’s Class B Shares on the date of redemption. As of December 31, 2017 and 2016, the total number of DSUs outstanding under this plan was 89,397 and 90,036, respectively. (b) Quebecor Media stock option plan Under a stock option plan established by the Corporation, 6,180,140 Common Shares of the Corporation have been set aside for officers, senior employees, directors, and other key employees of the Corporation. Each option may be exercised within a maximum period of 10 years following the date of grant at an exercise price not lower than, as the case may be, the fair market value of the Common Shares of Quebecor Media at the date of grant, as determined by its Board of Directors (if the Common Shares of Quebecor Media are not listed on a stock exchange at the time of the grant), or the five-day weighted average market price ending on the day preceding the date of grant of the Common Shares of the Corporation on the stock exchange(s) where such shares are listed at the time of grant. As long as the Common Shares of Quebecor Media are not listed on a recognized stock exchange, optionees may exercise their vested options during one of the following periods: from March 1 to March 30, from June 1 to June 29, from September 1 to September 29, and from December 1 to December 30. Holders of options under the plan have the choice at the time of exercising their options of receiving an amount in cash (equal to the difference between either the five-day weighted average market price ending on the day preceding the date of exercise of the Common Shares of the Corporation on the stock exchange(s) where such shares are listed at the time of exercise, or the fair market value of the Common Shares, as determined by the Corporation’s Board of Directors, and the exercise price of their vested options) or, subject to certain stated conditions, exercise their options to purchase Common Shares of Quebecor Media at the exercise price. Except under specific circumstances, and unless the Human Resources and Corporate Governance Committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by the Human Resources and Corporate Governance Committee at the time of grant: (i) equally over five years with the first 20% vesting on the first anniversary of the date of the grant; (ii) equally over four years with the first 25% vesting on the second anniversary of the date of grant; and (iii) equally over three years with the first 33 1/3% vesting on the third anniversary of the date of grant. The following table gives details on changes to outstanding options granted as of December 31, 2017 and 2016: 2017 2016 Options Weighted Options Weighted Balance at beginning of year $ $ Exercised ) ) Cancelled ) ) Balance at end of year $ $ Vested options at end of year $ $ During the year ended December 31, 2017, 215,978 of the Corporation’s stock options were exercised for a cash consideration of $5.5 million (399,689 stock options for $6.5 million in 2016). The following table gives summary information on outstanding options as of December 31, 2017: Outstanding options Vested options Range of Number Weighted Weighted Number Weighted $37.91 to 53.40 $ $ $57.35 to 70.56 $37.91 to 70.56 $ $ (c) TVA Group stock option plan Under this stock option plan, 2,200,000 TVA Group Class B Shares have been set aside for senior executives and directors of TVA Group and its subsidiaries. The terms and conditions of options granted are determined by TVA Group’s Human Resources and Corporate Governance Committee. The subscription price of an option cannot be less than the closing price of Class B Shares on the Toronto Stock Exchange the day before the option is granted. Unless the Human Resources and Corporate Governance Committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by the Human Resources and Corporate Governance Committee at the time of grant: (i) equally over five years with the first 20% vesting on the first anniversary of the date of the grant; (ii) equally over four years with the first 25% vesting on the second anniversary of the date of grant; and (iii) equally over three years with the first 33 1/3% vesting on the third anniversary of the date of grant. The term of an option cannot exceed 10 years. Holders of options under the plan have the choice, at the time of exercising their options, of receiving a cash payment from TVA Group equal to the number of shares corresponding to the options exercised, multiplied by the difference between the market value of the TVA Group Class B Shares and the exercise price of the option or, subject to certain conditions, exercise their options to purchase TVA Group Class B Shares at the exercise price. The market value is defined as the average closing market price of the TVA Group Class B Shares for the last five trading days preceding the date on which the option was exercised. The following table gives details on changes to outstanding options for the years ended December 31, 2017 and 2016: 2017 2016 Options Weighted Options Weighted Balance at beginning of year $ $ Cancelled ) — — Expired ) ) Balance at end of year $ $ Vested options at end of year $ $ As of December 31, 2017, the exercise price of all outstanding and vested options is $6.85 and the number of years to maturity of all outstanding options is 7.09 years. (d) Deferred share unit and performance share unit plans On July 10, 2016, TVA Group established a DSU plan and a PSU plan for its employees based on TVA Group Class B Shares. The DSUs vest over six years and will be redeemed for cash only upon the participant’s retirement or termination of employment, as the case may be. The PSUs vest over three years and will be redeemed for cash at the end of this period subject to the achievement of financial targets. DSUs and PSUs entitle the holders to receive additional units when dividends are paid on TVA Group Class B Shares. No treasury shares will be issued for the purposes of these plans. On July 13, 2016, Quebecor also established a DSU plan and a PSU plan for its employees and those of its subsidiaries. Both plans are based on Quebecor Class B Subordinate Shares (“Quebecor Class B Shares”) and, in the case of the DSU plan, also on TVA Group Class B Shares. The DSUs vest over six years and will be redeemed for cash only upon the participant’s retirement or termination of employment, as the case may be. The PSUs vest over three years and will be redeemed for cash at the end of this period subject to the achievement of financial targets. DSUs and PSUs entitle the holders to receive additional units when dividends are paid on Quebecor Class B Shares or TVA Group Class B Shares. No treasury shares will be issued for the purposes of these plans. The following table provides details of changes to outstanding units in the DSU and PSU plans for the year ended December 31, 2017: Outstanding units DSU PSU Quebecor Balance at beginning of year Granted Exercised ) ) Cancelled ) ) Balance at end of year TVA Group Balance at beginning of year Granted Exercised ) — Cancelled ) ) Balance at end of year (e) Assumptions in estimating the fair value of stock-based awards The fair value of stock-based awards under the stock option plans of the parent corporation, Quebecor Media and TVA Group was estimated using the Black-Scholes option pricing model. The following weighted-average assumptions were used to estimate the fair value of all outstanding stock options under the stock option plans as of December 31, 2017 and 2016: December 31, 2017 Quebecor Quebecor Media TVA Group Risk-free interest rate % % % Distribution yield % % — % Expected volatility % % % Expected remaining life 2.4 years 2.3 years 3.6 years December 31, 2016 Quebecor Quebecor Media TVA Group Risk-free interest rate % % % Distribution yield % % — % Expected volatility % % % Expected remaining life 4.0 years 3.0 years 1.9 years Except for Quebecor Media, the expected volatility is based on the historical volatility of the underlying share price for a period equivalent to the expected remaining life of the options. Since the Common Shares of Quebecor Media are not publicly traded on a stock exchange, expected volatility is derived from the implied volatility of Quebecor’s stock. The expected remaining life of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate over the expected remaining life of the option is based on the Government of Canada yield curve in effect at the time of the valuation. Distribution yield is based on the current average yield. (f) Liability of vested options As of December 31, 2017, the liability for all vested options was $12.2 million as calculated using the intrinsic value ($5.7 million as of December 31, 2016). (g) Consolidated stock-based compensation charge For the year ended December 31, 2017, a consolidated charge related to all stock-based compensation plans was recorded in the amount of $15.4 million ($16.3 million in 2016 and $6.5 million in 2015). |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 24. ACCUMULATED OTHER COMPREHENSIVE LOSS Cash flow Defined Total Balance as of December 31, 2014 $ ) $ ) $ ) Other comprehensive loss ) ) ) Balance as of December 31, 2015 ) ) ) Other comprehensive (loss) income ) Balance as of December 31, 2016 ) ) ) Other comprehensive income (loss) ) Balance as of December 31, 2017 $ ) $ ) $ ) No significant amount is expected to be reclassified in income over the next 12 months in connection with derivative financial instruments designated as cash flow hedges. The balance is expected to reverse over a 9 1/4-year period. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS | |
COMMITMENTS | 25. COMMITMENTS The Corporation rents premises and equipment under operating leases and has entered into long-term commitments to purchase services, tangible and intangible assets, broadcasting rights, and to pay licences and royalties. Rent payments include an amount of $52.8 million for future payments to the parent corporation. The operating leases have various terms, escalation clauses, purchase options and renewal rights. The minimum payments for the coming years are as follows: Leases Other 2018 $ $ 2019 to 2022 2023 and thereafter The Corporation’s operating lease expenses amounted to $68.1 million in 2017 ($67.1 million in 2016 and $71.2 million in 2015, of which $6.0 million was presented as part of discontinued operations in 2015). |
GUARANTEES
GUARANTEES | 12 Months Ended |
Dec. 31, 2017 | |
GUARANTEES | |
GUARANTEES | 26. GUARANTEES In the normal course of business, the Corporation enters into numerous agreements containing guarantees, including the following: Operating leases The Corporation has guaranteed a portion of the residual value of certain assets under operating leases for the benefit of the lessor. Should the Corporation terminate these leases prior to term (or at the end of the lease terms), and should the fair value of the assets be less than the guaranteed residual value, then the Corporation must, under certain conditions, compensate the lessor for a portion of the shortfall. In addition, the Corporation has provided guarantees to the lessor of certain premises leases with expiry dates through 2020. Should the lessee default under the agreement, the Corporation must, under certain conditions, compensate the lessor. As of December 31, 2017, the maximum exposure with respect to these guarantees was $20.5 million and no liability has been recorded in the consolidated balance sheet. Business and asset disposals In the sale of all or part of a business or an asset, in addition to possible indemnification relating to failure to perform covenants and breach of representations or warranties, the Corporation may agree to indemnify against claims related to the past conduct of the business. Typically, the term and amount of such indemnification will be limited by the agreement. The nature of these indemnification agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay to guaranteed parties. The Corporation has not accrued any amount in respect of these items in the consolidated balance sheet. Outsourcing companies and suppliers In the normal course of its operations, the Corporation enters into contractual agreements with outsourcing companies and suppliers. In some cases, the Corporation agrees to provide indemnifications in the event of legal procedures initiated against them. In other cases, the Corporation provides indemnification to counterparties for damages resulting from the outsourcing companies and suppliers. The nature of the indemnification agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay. No amount has been accrued in the consolidated balance sheet with respect to these indemnifications. Other One of the Corporation’s subsidiaries, has, as a franchiser, provided guarantees should franchisees, in their retail activities, default certain purchase agreements. The nature of the indemnification agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay. No amount has been accrued in the consolidated balance sheet with respect to these guarantees. |
FINANCIAL INSTRUMENTS AND FINAN
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2017 | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 27. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT The Corporation’s financial risk-management policies have been established in order to identify and analyze the risks faced by the Corporation, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk-management policies are reviewed regularly to reflect changes in market conditions and in the Corporation’s activities. The Corporation uses a number of financial instruments, mainly cash and cash equivalents, accounts receivable, long-term investments, bank indebtedness, trade payables, accrued liabilities, long-term debt, and derivative financial instruments. As a result of its use of financial instruments, the Corporation is exposed to credit risk, liquidity risk and market risks relating to foreign exchange fluctuations and interest rate fluctuations. In order to manage its foreign exchange and interest rate risks, the Corporation uses derivative financial instruments (i) to set in CAN dollars future payments on debts denominated in U.S. dollars (interest and principal) and certain purchases of inventories and other capital expenditures denominated in a foreign currency, (ii) to achieve a targeted balance of fixed- and floating-rate debts, and (iii) to lock in the value of certain derivative financial instruments through offsetting transactions. The Corporation does not intend to settle its derivative financial instruments prior to their maturity as none of these instruments is held or issued for speculative purposes. (a) Description of derivative financial instruments (i) Foreign exchange forward contracts Maturity CAN dollar average Notional Notional Videotron Less than 1 year $ US$ (ii) Cross-currency interest rate swaps Hedged item Hedging instrument Period Notional Annual interest CAN dollar Quebecor Media 5.750% Senior Notes due 2023 2016 to 2023 US$ 5.750% Senior Notes due 2023 2012 to 2023 US$ Term loan “B” 2013 to 2020 US$ Bankers’ acceptance 3 months + 2.77% Videotron 5.000% Senior Notes due 2022 2014 to 2022 US$ 5.000% Senior Notes due 2022 2012 to 2022 US$ 5.375% Senior Notes due 2024 2014 to 2024 US$ Bankers’ acceptance 3 months + 2.67% 5.375% Senior Notes due 2024 2017 to 2024 US$ 5.125 % Senior Notes due 2027 2017 to 2027 US$ Certain cross-currency interest rate swaps entered into by the Corporation include an option that allows each party to unwind the transaction on a specific date at the then settlement amount. (b) Fair value of financial instruments In Fair value measurement , the Corporation considers the following fair value hierarchy which reflects the significance of the inputs used in measuring its financial instruments: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3: inputs that are not based on observable market data (unobservable inputs). The fair value of long-term debt is estimated based on quoted market prices when available or on valuation models using Level 1 and Level 2 inputs. When the Corporation uses valuation models, the fair value is estimated using discounted cash flows using year-end market yields or the market value of similar instruments with the same maturity. The fair value of cash equivalents and bank indebtedness, classified as held for trading and accounted for at their fair value in the consolidated balance sheets, is determined using Level 2 inputs. The fair value of derivative financial instruments recognized in the consolidated balance sheets is estimated as per the Corporation’s valuation models. These models project future cash flows and discount the future amounts to a present value using the contractual terms of the derivative financial instrument and factors observable in external market data, such as period-end swap rates and foreign exchange rates (Level 2 inputs). An adjustment is also included to reflect non-performance risk impacted by the financial and economic environment prevailing at the date of the valuation in the recognized measure of the fair value of the derivative financial instruments by applying a credit default premium, estimated using a combination of observable and unobservable inputs in the market (Level 3 inputs), to the net exposure of the counterparty or the Corporation. Derivative financial instruments are classified as Level 2. The fair value of early settlement options recognized as embedded derivatives is determined by option pricing models using Level 2 market inputs, including volatility, discount factors, and the underlying instrument’s adjusted implicit interest rate and credit premium. The carrying value and fair value of long-term debt and derivative financial instruments as of December 31, 2017 and 2016 are as follows: 2017 2016 Asset (liability) Carrying Fair Carrying Fair Long-term debt 1,2 $ ) $ ) $ ) $ ) Derivative financial instruments 3 Early settlement options — — Foreign exchange forward contracts 4 ) ) Interest rate swaps — — ) ) Cross-currency interest rate swaps 4 1 The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest risk, embedded derivatives and financing fees. 2 The fair value of the long-term debt does not include the fair value of early settlement options, which is presented separately in the table. 3 The fair value of derivative financial instruments designated as hedges is an asset position of $557.7 million as of December 31, 2017 ($808.7 million as of December 31, 2016). 4 The value of foreign exchange forward contracts entered into to lock in the value of existing hedging positions is netted from the value of the offset financial instruments. (c) Credit risk management Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial asset fails to meet its contractual obligations. In the normal course of business, the Corporation continuously monitors the financial condition of its customers and reviews the credit history of each new customer. As of December 31, 2017, no customer balance represented a significant portion of the Corporation’s consolidated trade receivables. The Corporation establishes an allowance for doubtful accounts based on the specific credit risk of its customers and historical trends. As of December 31, 2017, 11.3% of trade receivables were 90 days past their billing date (13.0% as of December 31, 2016) of which 31.1% had an allowance for doubtful accounts (32.5% as of December 31, 2016). The following table shows changes to the allowance for doubtful accounts for the years ended December 31, 2017 and 2016: 2017 2016 Balance at beginning of year $ $ Charged to income Utilization ) ) Balance at end of year $ $ The Corporation believes that its product lines and the diversity of its customer base are instrumental in reducing its credit risk, as well as the impact of fluctuations in product-line demand. The Corporation does not believe that it is exposed to an unusual level of customer credit risk. As a result of its use of derivative financial instruments, the Corporation is exposed to the risk of non-performance by a third party. When the Corporation enters into derivative contracts, the counterparties (either foreign or Canadian) must have credit ratings at least in accordance with the Corporation’s risk-management policy and are subject to concentration limits. These credit ratings and concentration limits are monitored on an ongoing basis, but at least quarterly. (d) Liquidity risk management Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they fall due or the risk that those financial obligations will have to be met at excessive cost. The Corporation manages this exposure through staggered debt maturities. The weighted average term of the Corporation’s consolidated debt was approximately 6.1 years as of December 31, 2017 and 2016. The Corporation’s management believes that cash flows and available sources of financing should be sufficient to cover committed cash requirements for capital investments, working capital, interest payments, income tax payments, debt repayments, pension plan contributions, share repurchases, dividends or distributions to shareholders. The Corporation has access to cash flows generated by its subsidiaries through dividends (or distributions) and cash advances paid by its wholly owned subsidiaries. As of December 31, 2017, material contractual obligations related to financial instruments included capital repayment and interest on long-term debt and obligations related to derivative financial instruments, less estimated future receipts on derivative financial instruments. These obligations and their maturities are as follows: Total Less than 1-3 years 3-5 years 5 years Accounts payable and accrued charges $ $ $ — $ — $ — Long-term debt 1 Interest payments 2 Derivative financial instruments 3 ) ) ) ) Total $ $ $ $ $ 1 The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest rate risk, embedded derivatives and financing fees. 2 Estimate of interest payable on long-term debt, based on interest rates, hedging of interest rates and hedging of foreign exchange rates as of December 31, 2017. 3 Estimated future receipts, net of future disbursements, on derivative financial instruments related to foreign exchange hedging. (e) Market risk Market risk is the risk that changes in market prices due to foreign exchange rates, interest rates and/or equity prices will affect the value of the Corporation’s financial instruments. The objective of market risk management is to mitigate and control exposures within acceptable parameters while optimizing the return on risk. Foreign currency risk Most of the Corporation’s consolidated revenues and expenses, other than interest expense on U.S.-dollar-denominated debt, purchases of set-top boxes, handsets and cable modems and certain capital expenditures, are received or denominated in CAN dollars. A significant portion of the interest, principal and premium, if any, payable on its debt is payable in U.S. dollars. The Corporation has entered into transactions to hedge the foreign currency risk exposure on its U.S.-dollar-denominated debt obligations outstanding as of December 31, 2017, and to hedge its exposure on certain purchases of set-top boxes, handsets, cable modems and capital expenditures. Accordingly, the Corporation’s sensitivity to variations in foreign exchange rates is economically limited. The estimated sensitivity on income and on other comprehensive income, before income tax, of a variance of $0.10 in the year-end exchange rate of a CAN dollar per one U.S. dollar used to calculate the fair value of financial instruments as of December 31, 2017 is as follows: Increase (decrease) Income Other Increase of $0.10 $ $ Decrease of $0.10 ) ) A variance of $0.10 in the 2017 average exchange rate of CAN dollar per one U.S. dollar would had resulted in a variance of $3.2 million on the value of unhedged purchase of goods and services in 2017 and $5.7 million on the value of unhedged acquisitions of tangible and intangible assets in 2017. Interest rate risk Some of the Corporation’s bank credit facilities bear interest at floating rates based on the following reference rates: (i) Bankers’ acceptance rate, (ii) LIBOR, (iii) Canadian prime rate, and (iv) U.S. prime rate. The Senior Notes issued by the Corporation bear interest at fixed rates. The Corporation has entered into cross-currency interest rate swap agreements in order to manage cash flow risk exposure. As of December 31, 2017, after taking into account the hedging instruments, long-term debt was comprised of 87.7% fixed-rate debt (83.7% in 2016) and 12.3% floating-rate debt (16.3% in 2016). The estimated sensitivity on interest payments, of a 100 basis-point variance in the year-end Canadian Bankers’ acceptance rate as of December 31, 2017 was $5.9 million. The estimated sensitivity on income and on other comprehensive income, before income tax, of a 100 basis-point variance in the discount rate used to calculate the fair value of financial instruments as of December 31, 2017, as per the Corporation’s valuation models, is as follows: Increase (decrease) Income Other Increase of 100 basis points $ ) $ ) Decrease of 100 basis points (f) Capital management The Corporation’s primary objective in managing capital is to maintain an optimal capital base in order to support the capital requirements of its various businesses, including growth opportunities. In managing its capital structure, the Corporation takes into account the asset characteristics of its subsidiaries and planned requirements for funds, leveraging their individual borrowing capacities in the most efficient manner to achieve the lowest cost of financing. Management of the capital structure involves the issuance and repayment of debt, the repurchase of shares, the use of cash flows generated by operations, and the level of distributions to shareholders. The Corporation has not significantly changed its strategy regarding the management of its capital structure since the last financial year. The Corporation’s capital structure is composed of equity, bank indebtedness, long-term debt, derivative financial instruments and cash and cash equivalents. The capital structure as of December 31, 2017 and 2016 is as follows: 2017 2016 Bank indebtedness $ — $ Long-term debt Derivative financial instruments ) ) Cash and cash equivalents ) ) Net liabilities Equity $ $ The Corporation is not subject to any externally imposed capital requirements other than certain restrictions under the terms of its borrowing agreements, which relate, among other things, to permitted investments, inter-corporation transactions, the declaration and payment of dividends or other distributions. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 28. RELATED PARTY TRANSACTIONS Compensation of key management personnel Key management personnel comprises members of the Board of Directors and key senior managers of the Corporation and its main subsidiaries. Their compensation is as follows: 2017 2016 2015 Salaries and short-term benefits $ $ $ Share-based compensation Other long-term benefits $ $ $ Operating transactions During the year ended December 31, 2017, the Corporation made purchases and incurred rent charges with the parent corporation and affiliated companies in the amount of $9.2 million ($9.0 million in 2016 and $12.3 million in 2015), which are included in purchase of goods and services. The Corporation made sales to an affiliated corporation in the amount of $2.8 million ($3.0 million in 2016 and $3.3 million in 2015). These transactions were accounted for at the consideration agreed between parties. Management arrangements The parent corporation has entered into management arrangements with the Corporation. Under these management arrangements, the parent corporation and the Corporation provide management services to each other on a cost-reimbursement basis. The expenses subject to reimbursement include the salaries of the Corporation’s executive officers, who also serve as executive officers of the parent corporation. In 2017, the Corporation received an amount of $2.2 million, which is included as a reduction in employee costs ($2.2 million in 2016 and $2.0 million in 2015), and incurred management fees of $2.7 million ($2.6 million in 2016 and $2.2 million in 2015) with shareholders. Tax transactions In 2016, the parent corporation transferred $22.1 million of non-capital losses ($33.4 million in 2015) to the Corporation in exchange for a cash consideration of $5.6 million ($8.4 million in 2015). No such transfer was done in 2017. These transactions were concluded on terms equivalent to those that prevail on an arm’s length basis and were accounted for at the consideration agreed between the parties. As a result, the Corporation recorded a reduction of $0.3 million in its income tax expense in 2016 ($0.6 million in 2015). |
PENSION PLANS AND POSTRETIREMEN
PENSION PLANS AND POSTRETIREMENT BENEFITS | 12 Months Ended |
Dec. 31, 2017 | |
PENSION PLANS AND POSTRETIREMENT BENEFITS | |
PENSION PLANS AND POSTRETIREMENT BENEFITS | 29. PENSION PLANS AND POSTRETIREMENT BENEFITS The Corporation maintains various flat-benefit plans, various final-pay plans with indexation features from zero to 2%, as well as defined contribution plans. The Corporation also provides postretirement benefits to eligible retired employees. The Corporation’s pension plans are registered with a provincial or federal regulatory authority. The Corporation’s funding policy for its funded pension plans is to maintain its contribution at a level sufficient to cover benefits and to meet requirements of the applicable regulations and plan provisions that govern the funding of the plans. These provisions establish, among others, the future amortization payments when the funding ratio of the pension plans is insufficient as defined by the relevant provincial and federal laws. Payments are determined by an actuarial report performed by an independent company at least every three years or annually, according to the applicable laws and in accordance with plan provisions. By their design, the defined benefit plans expose the Corporation to the typical risks faced by defined benefit plans, such as investment performance, changes to the discount rates used to value the obligation, longevity of plan participants, and future inflation. The administration of the plans is assured by pension committees composed of members of the plans, members of the Corporation’s management and independent members or by the Corporation, in accordance with the provisions of each plan. Under the Corporation’s rules of governance, the approval and oversight of the defined benefit plan policies are performed at different levels through the pension committees, the Corporation’s management, or the Audit Committee. The risk management of pension plans is also performed under the leadership of these committees at various levels. The custody of securities and management of security transactions are assigned to trustees within a mandate given by the pension committees or the Corporation, as the case may be. Policies include those on investment objectives, risk-mitigation strategies and the mandate to hire investment fund managers and monitor their work and performance. The defined benefit pension plans are monitored on an ongoing basis to assess the benefit, funding and investment policies, financial status, and the Corporation’s funding requirement. The following tables show a reconciliation of the changes in the plans’ benefit obligations and the fair value of plan assets for the years ended December 31, 2017 and 2016: Pension benefits Postretirement benefits 2017 2016 2017 2016 Change in benefit obligations Benefit obligations at the beginning of the year $ $ $ $ Service costs Interest costs Plan participants’ contributions — — Actuarial loss (gain) arising from: Financial assumptions Demographic assumptions ) — — — Participant experience ) ) — Benefits and settlements paid ) ) ) ) Plan transfer ) — — — Other — — Benefit obligations at the end of the year $ $ $ $ Change in plan assets Fair value of plan assets at the beginning of the year $ $ $ — $ — Actual return on plan assets — — Employer contributions Plan participants’ contributions — — Administrative fees ) ) — — Benefits and settlements paid ) ) ) ) Plan transfer ) — — — Fair value of plan assets at the end of the year $ $ $ — $ — As of December 31, 2017, the weighted average duration of defined benefit obligations was 16.5 years (16.2 years in 2016). The Corporation expects future benefit payments of $68.7 million in 2018. The investment strategy for plan assets takes into account a number of factors, including the time horizon of the pension plans’ obligations and the investment risk. For each of the plans, an allocation range by asset class is developed, whereby a mix of equities and fixed-income investments is used to optimize the risk-return profile of plan assets and to mitigate asset-liability mismatch. Plan assets are comprised of: 2017 2016 Equity securities: Canadian % % Foreign Debt securities Other % % The fair value of plan assets is principally based on quoted prices in an active market. Where funded plans have a net defined benefit asset, the Corporation determines if potential reductions in future contributions are permitted by applicable regulations and by collective bargaining agreements. When a defined benefit asset is created, it cannot exceed the future economic benefit that the Corporation can expect to obtain from the asset. The future economic benefit represents the value of reductions in future contributions and expenses payable to the pension fund. It does not reflect gains that could be generated in the future that would allow reductions in contributions by the Corporation. When there is a minimum funding requirement, this could also limit the amounts recognized in the balance sheet. A minimum funding requirement represents the present value of amortization payments based on the most recent actuarial financing reports filed. The reconciliation of funded status to the net amount recognized in the consolidated balance sheets is as follows: Pension benefits Postretirement benefits 2017 2016 2017 2016 Benefit obligations $ ) $ ) $ ) $ ) Fair value of plan assets — — Plan deficit ) ) ) ) Asset limit and minimum funding adjustment ) ) — — Net amount recognized 1 $ ) $ ) $ ) $ ) 1 The net amount recognized for 2017 consists of an asset of $2.9 million included in “Other Assets” (note 17) ($8.9 million in 2016) and a liability of $136.9 million included in “Other Liabilities” (note 21) ($132.6 million in 2016). Components of re-measurements are as follows: Pension benefits Postretirement benefits 2017 2016 2015 2017 2016 2015 Actuarial (loss) gain on benefit obligations $ ) $ ) $ ) $ $ ) $ ) Actual return on plan assets, less interest income anticipated in the interest on the net defined benefit liability calculation — — — Asset limit and minimum funding adjustment ) ) — — — Re-measurements (loss) gain recorded in other comprehensive income $ ) $ $ ) $ $ ) $ ) Components of the net benefit costs are as follows: Pension benefits Postretirement benefits 2017 2016 2015 2017 2016 2015 Employee costs: Service costs $ $ $ $ $ $ Administrative fees and other ) — — — Interest on net defined benefit liability Net benefit costs 1 $ $ $ $ $ $ 1 Net benefit gains of $6.0 million in 2015 were presented as part of discontinued operations. The expense related to defined contribution pension plans amounted to $16.8 million in 2017 ($16.8 million in 2016 and $16.0 million in 2015). The expected employer contributions to the Corporation’s defined benefit pension plans and post-retirement benefit plans will be $37.8 million in 2018, based on the most recent financial actuarial reports filed (contributions of $37.4 million were paid in 2017). Assumptions The Corporation determines its assumption for the discount rate to be used for purposes of computing annual service and interest costs based on an index of high-quality corporate bond-yield and matched-funding yield curve analysis as of the measurement date. The actuarial assumptions used in measuring the Corporation’s benefit obligations as of December 31, 2017, 2016 and 2015 and current periodic benefit costs are as follows: Pension benefits Postretirement benefits 2017 2016 2015 2017 2016 2015 Benefit obligations Rates as of year-end: Discount rate % % % % % % Rate of compensation increase Current periodic costs Rates as of preceding year-end: Discount rate % % % % % % Rate of compensation increase The assumed average retirement age of participants used was of 62 years in 2017, 2016 and 2015. The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligations was 6.50% at the end of 2017. These costs, as per the estimate, are expected to decrease gradually over the next 10 years to 4.5% and to remain at that level thereafter. Sensitivity analysis An increase of 10 basis points in the discount rate would have decreased the pension benefits obligation by $21.9 million and the postretirement benefits obligation by $1.2 million as of December 31, 2017. There are limitations to this sensitivity analysis since it only considers the impacts of an increase of 10 basis points in the discount rate assumption without changing any other assumptions. No sensitivity analysis was performed on other assumptions as a similar change to those assumptions would not have a significant impact on the consolidated financial statements. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | 30. DISCONTINUED OPERATIONS 2017 In 2017, a gain of $14.6 millions, net of income taxes, was accounted for in discontinued operations in the consolidated statement of income. The gain was mainly related to digital tax credits in connection with the English-language newspaper operations sold in 2015 2015 In February 2015, the Corporation closed its specialty channel, SUN News. On April 13, 2015, the Corporation completed the sale, initially announced on October 6, 2014, of all of its English-language newspaper operations in Canada, consisting of more than 170 newspapers and publications, the Canoe English-language portal and 8 printing plants, including the Islington, Ontario plant, for a cash consideration consisting of $305.5 million, less cash disposed of $1.9 million. An amount of $1.3 million was also paid as an adjustment related to working capital items. On September 27, 2015, the Corporation completed the sale of Archambault Group Inc.’s retail operations, consisting of the 14 Archambault stores, the archambault.ca website, and the English-language Paragraphe Bookstore, for a cash consideration consisting of $14.5 million, less cash disposed of $1.1 million, and a balance of $3.0 million received in 2016. For the year ended December 31, 2015, the results of operations and cash flows related to these businesses were reclassified as discontinued operations in the consolidated statements of income, comprehensive income and cash flows as follows: Consolidated statements of income and comprehensive income 2015 Revenues $ Expenses Loss before income taxes ) Income taxes ) Loss on disposal of businesses ) Loss and comprehensive loss from discontinued operations $ ) Consolidated statements of cash flows Cash flows related to operating activities $ ) Cash flows related to investing activities ) Cash flows used in discontinued operations $ ) |
NON-CONSOLIDATED FINANCIAL STAT
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION | 12 Months Ended |
Dec. 31, 2017 | |
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION | |
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION | 31. NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION The Corporation has access to the cash flows generated by its subsidiaries by way of distributions from its public subsidiaries and distributions and advances from its private subsidiaries. However, some of the Corporation’s subsidiaries have restrictions, based on contractual debt obligations and corporate solvency tests, regarding the amounts of distributions and advances that can be paid to the Corporation. The U.S Securities and Exchange Commission requires that the non-consolidated financial statements of the parent corporation be presented when its subsidiaries have restrictions that may limit the amount of cash that can be paid to the parent corporation. These non-consolidated and condensed financial statements, as prepared under IFRS, are shown below. Non-consolidated condensed statements of income and comprehensive income 2017 2016 2015 Revenues: Dividends $ $ $ Management fees Other General and administrative expenses Depreciation and amortization Financial expenses (Gain) loss on valuation and translation of financial instruments ) — Loss on debt refinancing — — Impairment and disposal of investments in subsidiaries — Loss on notes receivable from subsidiaries — — Other ) Income before income taxes Income taxes Net income Other comprehensive gain (loss) ) ) Comprehensive income $ $ $ Non-consolidated and condensed statements of cash flows 2017 2016 2015 Cash flows related to operations Net income $ $ $ Depreciation and amortization (Gain) loss on valuation and translation of financial instruments ) — Amortization of financing costs and long-term debt discount Loss on debt refinancing — — Impairment and disposal of investments in subsidiaries — Loss on notes receivable from subsidiaries — — Deferred income taxes Other ) Net change in non-cash balances related to operations ) Cash flows provided by operations Cash flows related to investing activities Net change in investments in subsidiaries ) ) ) Proceeds from disposal of subsidiaries — — Acquisition of tax deductions from the parent corporation — ) — Other ) ) Cash flows used in investing activities ) ) ) Cash flows related to financing activities Net change in bank indebtedness ) ) Net change under revolving facilities — ) Repayment of long-term debt ) ) ) Settlement of hedging contracts ) Repurchase of Common Shares ) — ) Repurchase of redeemable preferred shares issued to subsidiaries — ) — Dividends and reduction of paid-up capital ) ) ) Net change in subordinated loans from subsidiaries ) Net change in convertible obligations, subordinated loans and notes receivable — subsidiaries ) Net change in advances to or from subsidiaries ) Cash flows used in financing activities ) ) ) Net change in cash and cash equivalents — ) Cash and cash equivalents at the beginning of the year — — Cash and cash equivalents at the end of the year $ $ — $ — Non-consolidated and condensed balance sheets 2017 2016 Assets Current assets $ $ Investments in subsidiaries at cost Advances to subsidiaries Convertible obligations, subordinated loans and notes receivable — subsidiaries Other assets $ $ Liabilities and equity Current liabilities $ $ Long-term debt Advances from subsidiaries Other liabilities Subordinated loan from subsidiaries Equity attributable to shareholders $ $ |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a ) Basis of presentation The consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments (note 1(j)), the liability related to stock-based compensation (note 1(t)) and the net defined benefit liability (note 1(u)), and they are presented in Canadian dollars (“CAN dollars”), which is the currency of the primary economic environment in which the Corporation operates (“functional currency”). Comparative figures for the years ended December 31, 2016 and 2015 have been restated to conform to the presentation adopted for the year ended December 31, 2017. |
Consolidation | (b ) Consolidation The consolidated financial statements include the accounts of the Corporation and its subsidiaries. Intercompany transactions and balances are eliminated on consolidation. A subsidiary is an entity controlled by the Corporation. Control is achieved when the Corporation is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Non-controlling interests in the net assets and results of consolidated subsidiaries are identified separately from the corporation’s ownership interest in them. Non-controlling interests in the equity of a subsidiary consist of the amount of non-controlling interests calculated at the date of the original business combination and their share of changes in equity since that date. Changes in non-controlling interests in a subsidiary that do not result in a loss of control by the Corporation are accounted for as equity transactions. |
Business combinations | (c ) Business combinations A business combination is accounted for by the acquisition method. The cost of an acquisition is measured at the fair value of the consideration given in exchange for control of the business acquired at the acquisition date. This consideration can be comprised of cash, assets transferred, financial instruments issued, or future contingent payments. The identifiable assets and liabilities of the business acquired are recognized at their fair value at the acquisition date. Results of operations of a business acquired are included in the Corporation’s consolidated financial statements from the date of the business acquisition. Business acquisition and integration costs are expensed as incurred and included as other items in the consolidated statements of income. Non-controlling interests in an entity acquired are presented in the consolidated balance sheets within equity, separately from the equity attributable to shareholders, and are initially measured at fair value. |
Foreign currency translation | (d ) Foreign currency translation Foreign currency transactions are translated to the functional currency by applying the exchange rate prevailing at the date of the transactions. Translation gains and losses on assets and liabilities denominated in a foreign currency are included in financial expenses, or in gain or loss on valuation and translation of financial instruments. |
Revenue recognition | (e ) Revenue recognition The Corporation recognizes operating revenues when the following criteria are met: · the amount of revenue can be measured reliably; · the receipt of economic benefits associated with the transaction is probable; · the costs incurred or to be incurred in respect of the transaction can be measured reliably; · the stage of completion can be measured reliably where services have been rendered; and · significant risks and rewards of ownership, including effective control, have been transferred to the buyer where goods have been sold. The portion of revenue that is unearned is recorded under “Deferred revenue” when customers are invoiced. Telecommunications The Telecommunications segment provides services under arrangements with multiple deliverables, for which there are two separate accounting units: one for subscriber services (cable television, Internet access, cable or mobile telephony and over-the-top video service, including connection costs and rental of equipment); the other for equipment sales to subscribers. Components of multiple deliverable arrangements are separately accounted for, provided the delivered elements have stand-alone value to the customer and the fair value of any undelivered elements can be objectively and reliably determined. Arrangement consideration is allocated among the separate accounting units based on their relative fair values. The Telecommunications segment recognizes each of its main activities’ revenues as follows: · Operating revenues from subscriber services, such as cable television, Internet access, cable and mobile telephony, and over-the-top video service are recognized when services are provided. Promotional offers and rebates are accounted for as a reduction in the service revenue to which they relate; · Revenues from equipment sales to subscribers and their costs are recognized in income when the equipment is delivered. Promotional offers related to equipment, with the exclusion of mobile devices, are accounted for as a reduction in related equipment sales on delivery, while promotional offers related to the sale of mobile devices are accounted for as a reduction in related equipment sales on activation; · Operating revenues related to service contracts are recognized in income over the life of the specific contracts on a straight-line basis over the period in which the services are provided; · Cable connection revenues are deferred and recognized as revenues over the estimated average period that subscribers are expected to remain connected to the network. The incremental and direct costs related to cable connection costs, in an amount not exceeding the revenue, are deferred and recognized as an operating expense over the same period. The excess of those costs over the related revenues is recognized immediately in income. Media The Media segment recognizes each of its main activities’ revenues as follows: · Advertising revenues are recognized when the advertising is aired on television, is featured in newspapers or magazines or is displayed on the digital properties or on transit shelters; · Revenues from subscriptions to specialty television channels or to online publications are recognized on a monthly basis at the time service is provided or over the period of the subscription; · Revenues from the sale or distribution of newspapers and magazines are recognized upon delivery, net of provisions for estimated returns based on historical rate of returns; · Soundstage and equipment leasing revenues are recognized over the rental period; · Revenues derived from speciality film and television services are recognized when services are provided. Sports and Entertainment The Sports and Entertainment segment recognizes each of its main activities’ revenues as follows: · Revenues from the sale or distribution of books and entertainment products are recognized upon delivery, net of provisions for estimated returns based on historical rate of returns; · Revenues from leasing and from ticket (including season tickets), food and beverage sales are recognized when the events take place and/or goods are sold, as the case may be; · Revenues from the rental of suites are recognized ratably over the period of the agreement; · Revenues from the sale of advertising under the form of venue signage or sponsorships, are recognized ratably over the period of the agreement; · Revenues derived from sporting and cultural event management are recognized when services are provided. |
Impairment of assets | (f) Impairment of assets For the purposes of assessing impairment, assets are grouped in cash-generating units (“CGUs”), which represent the lowest levels for which there are separately identifiable cash inflows generated by those assets. The Corporation reviews, at each balance sheet date, whether events or circumstances have occurred to indicate that the carrying amounts of its long-lived assets with finite useful lives may be less than their recoverable amounts. Goodwill, intangible assets having an indefinite useful life, and intangible assets not yet available for use are tested for impairment each financial year, as well as whenever there is an indication that the carrying amount of the asset, or the CGU to which an asset has been allocated, exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal and the value in use of the asset or the CGU. Fair value less costs of disposal represents the amount an entity could obtain at the valuation date from the asset’s disposal in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The value in use represents the present value of the future cash flows expected to be derived from the asset or the CGU. An impairment loss is recognized in the amount by which the carrying amount of an asset or a CGU exceeds its recoverable amount. When the recoverable amount of a CGU to which goodwill has been allocated is lower than the CGU’s carrying amount, the related goodwill is first impaired. Any excess amount of impairment is recognized and attributed to assets in the CGU, prorated to the carrying amount of each asset in the CGU. An impairment loss recognized in prior periods for long-lived assets with finite useful lives and intangible assets having an indefinite useful life, other than goodwill, can be reversed through the consolidated statement of income to the extent that the resulting carrying value does not exceed the carrying value that would have been the result if no impairment loss had previously been recognized. |
Barter transactions | (g) Barter transactions In the normal course of operations, the Corporation principally offers advertising in exchange for goods and services. Revenues thus earned and expenses incurred are accounted for on the basis of the fair value of goods and services provided. For the year ended December 31, 2017, the Corporation recorded $12.2 million of barter advertising revenues ($11.7 million in 2016 and $10.3 million in 2015). |
Income taxes | (h) Income taxes Current income taxes are recognized with respect to amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred income taxes are accounted for using the liability method. Under this method, deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in income in the period that includes the substantive enactment date. A deferred tax asset is recognized initially when it is probable that future taxable income will be sufficient to use the related tax benefits and may be subsequently reduced, if necessary, to an amount that is more likely than not to be realized. A deferred tax expense or benefit is recognized in other comprehensive income or otherwise directly in equity to the extent that it relates to items that are recognized in other comprehensive income or directly in equity in the same or a different period. In the course of the Corporation’s operations, there are a number of uncertain tax positions due to the complexity of certain transactions and due to the fact that related tax interpretations and legislation are continually changing. When a tax position is uncertain, the Corporation recognizes an income tax benefit or reduces an income tax liability only when it is probable that the tax benefit will be realized in the future or that the income tax liability is no longer probable. |
Leases | (i) Leases Assets under leasing agreements are classified at the inception of the lease as (i) finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee, or as (ii) operating leases for all other leases. Operating lease rentals are recognized in the consolidated statement of income on a straight-line basis over the period of the lease. Any lessee incentives are deferred and then recognized evenly over the lease term. |
Financial instruments | (j) Financial instruments Classification, recognition and measurement Financial instruments are classified as held-for-trading, available-for-sale, loans and receivables, or as other financial liabilities, and measurement in subsequent periods depends on their classification. The Corporation has classified its financial instruments (except derivative financial instruments) as follows: Held-for-trading Loans and receivables Available-for-sale Other liabilities Cash and cash equivalents Bank indebtedness Accounts receivable Loans and other long-term receivables included in “Other Assets” Other portfolio investments included in “Other Assets” Accounts payable and accrued charges Amounts payable to the parent corporation Long-term debt Other long-term financial liabilities included in Financial instruments held-for-trading are measured at fair value with changes recognized in income as a gain or loss on valuation and translation of financial instruments. Available-for-sale portfolio investments are measured at fair value or at cost in the case of equity investments that do not have a quoted market price in an active market and where fair value is insufficiently reliable, and changes in fair value are recorded in other comprehensive income. Financial assets classified as loans and receivables and financial liabilities classified as “Other liabilities” are initially measured at fair value and subsequently measured at amortized cost, using the effective interest rate method of amortization. Liabilities recognized as a result of contingent consideration arising from a business acquisition and included in “Other liabilities”, are initially recorded at their acquisition-date fair value and re-measured at fair value in subsequent periods. These changes in fair value are recorded in the consolidated statements of income as other items. Derivative financial instruments and hedge accounting The Corporation uses various derivative financial instruments to manage its exposure to fluctuations in foreign currency exchange rates and interest rates. The Corporation does not hold or use any derivative financial instruments for speculative purposes. Under hedge accounting, the Corporation documents all hedging relationships between hedging items and hedged items, as well as its strategy for using hedges and its risk-management objective. It also designates its derivative financial instruments as either fair value hedges or cash flow hedges when they qualify for hedge accounting. The Corporation assesses the effectiveness of derivative financial instruments when the hedge is put in place and on an ongoing basis. The Corporation generally enters into the following types of derivative financial instruments: · The Corporation uses foreign exchange forward contracts to hedge foreign currency rate exposure on anticipated equipment or inventory purchases in a foreign currency. The Corporation also uses offsetting foreign exchange forward contracts in combination with cross-currency interest rate swaps to hedge foreign currency rate exposure on principal payments on foreign currency denominated debt. These foreign exchange forward contracts are designated as cash flow hedges. · The Corporation uses cross-currency interest rate swaps to hedge (i) foreign currency rate exposure on interest and principal payments on foreign currency denominated debt and/or (ii) fair value exposure on certain debt resulting from changes in interest rates. The cross-currency interest rate swaps that set all future interest and principal payments on U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting an interest rate from a floating rate to a floating rate or from a fixed rate to a fixed rate, are designated as cash flow hedges. The cross-currency interest rate swaps are designated as fair value hedges when they set all future interest and principal payments on U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting the interest rate from a fixed rate to a floating rate. · The Corporation uses interest rate swaps to manage fair value exposure on certain debts resulting from changes in interest rates. These swap agreements require a periodic exchange of payments without the exchange of the notional principal amount on which the payments are based. These interest rate swaps are designated as fair value hedges when they convert the interest rate from a fixed rate to a floating rate, or as cash flow hedges when they convert the interest rate from a floating rate to a fixed rate. Under hedge accounting, the Corporation applies the following accounting policies: · For derivative financial instruments designated as fair value hedges, changes in the fair value of the hedging derivative recorded in income are substantially offset by changes in the fair value of the hedged item to the extent that the hedging relationship is effective. When a fair value hedge is discontinued, the carrying value of the hedged item is no longer adjusted and the cumulative fair value adjustments to the carrying value of the hedged item are amortized to income over the remaining term of the original hedging relationship. · For derivative financial instruments designated as cash flow hedges, the effective portion of a hedge is reported in other comprehensive income until it is recognized in income during the same period in which the hedged item affects income, while the ineffective portion is immediately recognized in income. When a cash flow hedge is discontinued, the amounts previously recognized in accumulated other comprehensive income are reclassified to income when the variability in the cash flows of the hedged item affects income. Any change in the fair value of derivative financial instruments recorded in income is included in gain or loss on valuation and translation of financial instruments. Interest expense on hedged long-term debt is reported at the hedged interest and foreign currency rates. Derivative financial instruments that do not qualify for hedge accounting, including derivatives that are embedded in financial or non-financial contracts that are not closely related to the host contracts, such as early settlement options on long term-debt, are reported on a fair value basis in the consolidated balance sheets. Any change in the fair value of these derivative financial instruments is recorded in the consolidated statements of income as a gain or loss on valuation and translation of financial instruments. Early settlement options are accounted for separately from the debt when the corresponding option exercise price is not approximately equal to the amortized cost of the debt. |
Financing fees | (k) Financing fees Financing fees related to long-term debt are capitalized in reduction of long-term debt and amortized using the effective interest rate method. |
Tax credits and government assistance | (l) Tax credits and government assistance The Corporation has access to several government programs designed to support production and distribution of televisual products and movies, as well as music products, magazine and book publishing in Canada. In addition, the Corporation receives tax credits mainly related to its research and development activities, publishing activities and digital activities. Government financial assistance is accounted for as revenue or as a reduction in related costs, whether capitalized and amortized or expensed, in the year the costs are incurred and when management has reasonable assurance that the conditions of the government programs are met. |
Cash and cash equivalents | (m) Cash and cash equivalents Cash and cash equivalents include highly liquid investments purchased three months or less from maturity and are recorded at fair value. These highly liquid investments consisted mainly of Bankers’ acceptances and term deposits. |
Trade receivables | (n) Trade receivables Trade receivables are stated at their nominal value, less an allowance for doubtful accounts and an allowance for sales returns. The Corporation establishes an allowance for doubtful accounts based on the specific credit risk of its customers and historical trends. Individual accounts receivables are written off when management deems them not collectible. |
Inventories | (o) Inventories Inventories are valued at the lower of cost, determined by the first-in, first-out method or the weighted-average cost method, and net realizable value. Net realizable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. When the circumstances that previously caused inventories to be written down below cost no longer exist, the amount of the write-down is reversed. In particular, inventories related to broadcasting activities, which primarily comprise programs and broadcast and distribution rights, are accounted for as follows: (i) Programs produced and productions in progress Programs produced and productions in progress related to broadcasting activities are accounted for at the lesser of cost and net realizable value. Cost includes direct charges for goods and services and the share of labour and general expenses related to each production. The cost of each program is charged to operating expenses when the program is broadcast. (ii) Broadcast and distribution rights Broadcast rights are essentially contractual rights allowing the limited or unlimited broadcast of televisual products or movies. Distribution rights include costs to acquire distribution rights for televisual products and movies and other operating costs incurred that generate future economic benefits. The Corporation records the rights acquired as inventory and the obligations incurred under a licence agreement as a liability when the broadcast or distribution period begins and all of the following conditions have been met: (a) the cost of the licence for each program, movies, series or right to broadcast a live event is known or can be reasonably determined; (b) the programs, movies or series have been accepted or the live event is broadcast in accordance with the conditions of the licence agreement; (c) the programs, movies or series are available for distribution, first showing or telecast, or when the live event is broadcast. Amounts paid for broadcast and distribution rights before all of the above conditions are met are recorded as prepaid rights. Broadcast and distribution rights are classified as current or long-term assets, based on management’s estimate of the broadcast or distribution period. These rights are charged to operating expenses when televisual products and movies are broadcast over the contract period, using a method based on how future economic benefits from those rights will be generated. Broadcast and distribution rights payable are classified as current or long-term liabilities based on the payment terms included in the licence. Estimates of future revenues used to determine the net realizable values of inventories related to the broadcasting or distribution of television products and movies are examined periodically by management and revised as necessary. The carrying value of programs produced and productions in progress, broadcast rights and distribution rights is reduced to the net realizable value, as necessary, based on this assessment. |
Long-term investments | (p) Long-term investments Investments in companies subject to significant influence are accounted for using the equity method. Under the equity method, the share of the results of operations of the associated corporation is recorded in the consolidated statement of income. Carrying values of investments are reduced to estimated fair values if there is objective evidence that the investment is impaired. |
Property, plant and equipment | (q) Property, plant and equipment Property, plant and equipment are recorded at cost. Cost represents the acquisition costs, net of government grants and investment tax credits, or construction costs, including preparation, installation and testing costs. In the case of projects to construct cable and mobile networks, the cost includes equipment, direct labour and related overhead costs. Projects under development may also be comprised of advance payments made to suppliers for equipment under construction. Borrowing costs are also included in the cost of property, plant and equipment during the development phase. Expenditures, such as maintenance and repairs, are expensed as incurred. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Assets Estimated useful life Buildings and leasehold improvements 10 to 40 years Machinery and equipment 3 to 20 years Telecommunication networks 3 to 20 years Depreciation methods, residual values, and the useful lives of significant property, plant and equipment are reviewed at least once a year. Any change is accounted for prospectively as a change in accounting estimate. Leasehold improvements are depreciated over the shorter of the term of the lease and their estimated useful life. The Corporation does not record any decommissioning obligations in connection with its cable distribution networks. The Corporation expects to renew all of its agreements with utility companies to access their support structures in the future, making the retirement date so far into the future that the present value of the restoration costs is insignificant for those assets. A decommissioning obligation is however recorded for the rental of sites related to the mobile network. Videotron Ltd. (“Videotron”) is engaged in an agreement to operate a shared LTE network in the Province of Québec and the Ottawa region. |
Goodwill and intangible assets | (r) Goodwill and intangible assets Goodwill Goodwill initially arising from a business acquisition is measured and recognized as the excess of the fair value of the consideration paid over the fair value of the recognized identifiable assets acquired and liabilities assumed. When the Corporation acquires less than 100% of the equity interests in the business acquired at the acquisition date, goodwill attributable to the non-controlling interests is also recognized at fair value. Goodwill is allocated as at the date of a business acquisition to a CGU for purposes of impairment testing (note 1(f)). The allocation is made to the CGU or group of CGUs expected to benefit from the synergies of the business acquisition. Intangible assets Spectrum licences are recorded at cost. Spectrum licences have an indefinite useful life and are not amortized based on the following facts: (i) the Corporation intends to renew the spectrum licences and believes that they are likely to be renewed by Innovation, Science and Economic Development Canada, (ii) the Corporation has the financial and operational ability to renew these spectrum licences, (iii) currently, the competitive, legal and regulatory landscape does not limit the useful lives of the spectrum licences, and (iv) the Corporation foresees no limit to the period during which these licences can be expected to generate cash flows in the future. Broadcasting licences, trademarks and sport franchises have also an indefinite useful life and are not amortized. These intangibles assets are recorded at cost or at fair value at the acquisition date if they are acquired through a business acquisition. Software is recorded at cost. In particular, internally generated intangible assets such as software and Web site development are mainly comprised of internal costs in connection with the development of those assets to be used internally or to provide services to customers. These costs are capitalized when the development stage of the software application begins and costs incurred prior to that stage are recognized as expenses. Naming rights for the Videotron Centre in Québec City are recognized at cost. Customer relationships acquired through a business acquisition are recorded at fair value at the date of acquisition. Borrowing costs directly attributable to the acquisition, development or production of an intangible asset are also included as part of the cost of that asset during the development phase. Intangible assets with finite useful lives are amortized over their useful lives using the straight-line method over the following periods: Assets Estimated useful life Software 3 to 7 years Naming rights 25 years Customer relationships and other 3 to 10 years Amortization methods, residual values, and the useful lives of significant intangible assets are reviewed at least once a year. Any change is accounted for prospectively as a change in accounting estimate. |
Provisions | (s) Provisions Provisions are recognized when (i) the Corporation has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation, and when (ii) the amount of the obligation can be reliably estimated. Restructuring costs, comprised primarily of termination benefits, are recognized when a detailed plan for the restructuring exists and a valid expectation has been raised in those affected, that the plan will be carried out. Provisions are reviewed at each balance sheet date and changes in estimates are reflected in the consolidated statement of income in the reporting period in which changes occur. |
Stock-based compensation | (t) Stock-based compensation Stock-based awards to employees that call for settlement in cash, as deferred share units (“DSUs”) and performance share units (“PSUs”), or that call for settlement in cash at the option of the employee, as stock options awards, are accounted for at fair value and classified as a liability. The compensation cost is recognized in expenses over the vesting period. Changes in the fair value of stock-based awards between the grant date and the measurement date result in a change in the liability and compensation cost. The fair value of DSUs and PSUs is based on the underlying share price at the date of valuation. The fair value of stock option awards is determined by applying an option pricing model, taking into account the terms and conditions of the grant. Key assumptions are described in note 23. |
Pension plans and postretirement benefits | (u) Pension plans and postretirement benefits The Corporation offers defined contribution pension plans and defined benefit pension plans to some of its employees. (i) Defined contribution pension plans Under its defined contribution pension plans, the Corporation pays fixed contributions to participating employees’ pension plans and has no legal or constructive obligation to pay any further amounts. Obligations for contributions to defined contribution pension plans are recognized as employee benefits in the consolidated statements of income when the contributions become due. (ii) Defined benefit pension plans and postretirement plans Defined benefit pension plan costs are determined using actuarial methods and are accounted for using the projected unit credit method, which incorporates management’s best estimates of future salary levels, other cost escalations, retirement ages of employees, and other actuarial factors. Defined benefit pension costs, recognized in the consolidated statements of income as employee costs, mainly include the following: · service costs provided in exchange for employee services rendered during the period; · prior service costs recognized at the earlier of (a) when the employee benefit plan is amended or (b) when restructuring costs are recognized; · curtailment or settlement gain or loss. Interest on net defined benefit liability or asset, recognized in the consolidated statements of income as financial expenses, is determined by multiplying the net defined benefit liability or asset by the discount rate used to determine the defined benefit obligation. Re-measurements of the net defined benefit liability or asset are recognized immediately in other comprehensive loss and in accumulated other comprehensive loss. Re-measurements are comprised of the following: · actuarial gains and losses arising from changes in financial and demographic actuarial assumptions used to determine the defined benefit obligation or from experience adjustments on liabilities; · the difference between actual return on plan assets and interest income on plan assets anticipated as part of the interest on net defined benefit liability or asset calculation; · changes in the net benefit asset limit or in the minimum funding liability. Recognition of a net benefit asset is limited under certain circumstances to the amount recoverable, which is primarily based on the present value of future contributions to the plan, to the extent that the Corporation can unilaterally reduce those future contributions. In addition, an adjustment to the net benefit asset or the net benefit liability can be recorded to reflect a minimum funding liability in a certain number of the Corporation’s pension plans. The Corporation also offers discounts on telecommunication services, health, life and dental insurance plans to some of its retired employees. The cost of postretirement benefits is determined using an accounting methodology similar to that for defined benefit pension plans. The benefits related to these plans are funded by the Corporation as they become due. |
Use of estimates and judgments | (v) Use of estimates and judgments The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities, related amounts of revenues and expenses, and disclosure of contingent assets and liabilities. Although these estimates are based on management’s best judgment and information available at the time of the assessment date, actual results could differ from those estimates. The following significant areas represent management’s most difficult, subjective or complex estimates: (i) Recoverable amount of an asset or a CGU When an impairment test is performed on an asset or a CGU, management estimates the recoverable amount of the asset or CGU based on its fair value less costs of disposal or its value in use. These estimates are based on valuation models requiring the use of a number of assumptions such as forecasts of future cash flows, pre-tax discount rate (WACC) and perpetual growth rate. These assumptions have a significant impact on the results of impairment tests and on the impairment charge, as the case may be, recorded in the consolidated statements of income. A description of key assumptions used in the goodwill impairment tests and a sensitivity analysis of recoverable amounts are presented in note 16. (ii) Fair value of derivative financial instruments, including embedded derivatives Derivative financial instruments must be accounted for at their fair value, which is estimated using valuation models based on a number of assumptions such as future cash flows, period-end swap rates, foreign exchange rates, and credit default premium. Also, the fair value of embedded derivatives related to early settlement options on debt is determined with option pricing models using market inputs, including volatility, discount factors and the underlying instrument’s adjusted implicit interest rate and credit premium. The assumptions used in the valuation models have a significant impact on the gain or loss on valuation and translation of financial instruments recorded in the consolidated statements of income, the gain or loss on valuation of financial instruments recorded in the consolidated statements of comprehensive income, and the carrying value of derivative financial instruments in the consolidated balance sheets. A description of valuation models used and sensitivity analysis on key assumptions are presented in note 27. (iii) Costs and obligations related to pension and postretirement benefit plans Estimates of costs and obligations related to pension and postretirement benefit obligations are based on a number of assumptions, such as the discount rate, the rate of increase in compensation, the retirement age of employees, health care costs, and other actuarial factors. Certain of these assumptions may have a significant impact on employee costs and financial expenses recorded in the consolidated statements of income, the re-measurement gain or loss on defined benefit plans recorded in the consolidated statements of comprehensive income, and on the carrying value of other assets or other liabilities in the consolidated balance sheets. Key assumptions and a sensitivity analysis on the discount rate are presented in note 29. (iv) Provisions The recognition of provisions requires management to estimate expenditures required to settle a present obligation or to transfer it to a third party at the date of assessment. More specifically, an assessment of the probable outcomes of legal proceedings or other contingencies is also required. A description of the main provisions, including management expectations on the potential effect on the consolidated financial statements of the possible outcomes of legal disputes, is presented in note 19. The following areas represent management’s most significant judgments, apart from those involving estimates: (i) Useful life periods for the depreciation and amortization of assets with finite useful lives For each class of assets with finite useful lives, management has to determine over which period the Corporation will consume the assets’ future economic benefits. The determination of a useful life period involves judgment and has an impact on the depreciation and amortization charge recorded in the consolidated statements of income. (ii) Indefinite useful life of spectrum licences Management has concluded that spectrum licences have an indefinite useful life. This conclusion was based on an analysis of factors, such as the Corporation’s financial ability to renew the spectrum licences, the competitive, legal and regulatory landscape, and the future expectation regarding the use of the spectrum licences. Therefore, the determination that spectrum licences have an indefinite useful life involves judgment, which could have an impact on the amortization charge recorded in the consolidated statements of income if management changed its conclusion in the future. (iii) CGU’s determination for the purpose of impairment tests The determination of CGUs requires judgment when determining the lowest level for which there are separately identifiable cash inflows generated by the group of assets. In identifying assets to group in CGUs, the Corporation considers, among other factors, offering bundled services, sharing telecommunication or broadcasting network infrastructure, integration of media assets, geographical proximity, similarity on exposure to market risk, and materiality. The determination of CGUs could affect the results of impairment tests and, as the case may be, the impairment charge recorded in the consolidated statements of income. (iv) Determination if early settlement options are not closely related to their debt contract Early settlement options are not considered closely related to their debt contract when the corresponding option exercise price is not approximately equal to the amortized cost of the debt. Judgment is therefore required to determine if an option exercise price is not approximately equal to the amortized cost of the debt. This determination may have a significant impact on the amount of gains or losses on valuation and translation of financial instruments recorded in the consolidated statements of income. (v) Interpretation of laws and regulations Interpretation of laws and regulation, including tax regulations, requires judgment from management that could have an impact on the recognition of provisions for legal litigation and income taxes in the consolidated financial statements. |
Recent accounting pronouncements | (w) Recent accounting pronouncements (i) IFRS 9 — Financial Instruments is required to be applied retrospectively for annual periods beginning on or after January 1, 2018. On January 1, 2018, the Corporation will adopt the new rules under IFRS 9 which simplifies the measurement and classification of financial assets by reducing the number of measurement categories in IAS 39, Financial Instruments: Recognition and Measurement . The new standard also provides for a fair value option in the designation of a non-derivative financial liability and its related classification and measurement, as well as for a new hedge accounting model more closely aligned with risk-management activities undertaken by entities. The adoption of IFRS 9 will have no material impact on the consolidated financial statements. (ii) IFRS 15 — Revenue from Contracts with Customers is required to be applied retrospectively for annual periods beginning on or after January 1, 2018. On January 1, 2018, the Corporation will adopt on a fully retrospective basis the new rules under IFRS 15 which specify how and when an entity should recognize revenue as well as requiring such entities to provide users of financial statements with more informative disclosures. The standard provides a single, principles-based, five-step model to be applied to all contracts with customers. The adoption of IFRS 15 will have significant impacts on the consolidated financial statements, mainly in the Telecommunications segment, with regards to the timing of the recognition of its revenues, the classification of its revenues, as well as the capitalization of costs, such as costs to obtain a contract and connection costs. Under IFRS 15, the total consideration from a contract with multiple deliverables will be allocated to all performance obligations in the contract based on the stand-alone selling price of each obligation, without being limited to a non-contingent amount. The Telecommunications segment provides mobile devices and services under contracts with multiple deliverables and for a fixed period of time. Under IFRS 15, promotional offers related to the sale of mobile devices previously accounted for as a reduction in related equipment sales on activation, now need to be considered in the total consideration to be allocated to all performance obligations. Among other impacts, the adoption of IFRS 15 will result in an increase in the revenue from the device sale and in a decrease in the mobile service revenue recognized over the contract term. The timing of the recognition of these revenues will therefore change under IFRS 15. However, the total revenue recognized over a contract term relating to all performance obligations within the contract will remain the same as under the previous rules. The portion of revenues that is earned without having been invoiced will be presented as contract assets in the consolidated balance sheets. All other types of revenues have not been impacted by the adoption of IFRS 15. In addition, under IFRS 15, certain costs, mainly sales commissions, to obtain a contract will be capitalized and amortized as operating expenses over the contract term or over the period of time the customer is expected to remain a customer of the Corporation. Currently, such costs are expensed as incurred. Also, the capitalization of connection costs will no longer be limited to the related connection revenues as it is under the current rules. These capitalized costs will be included in “Other Assets” as contract costs in the consolidated balance sheet. The retroactive adoption of IFRS 15 will have the following impacts on the 2017 and 2016 consolidated financial figures: Consolidated statements of income and comprehensive income Increase (decrease) 2017 2016 Revenues $ $ Purchase of goods and services ) ) Deferred income tax expense Net income and comprehensive income attributable to shareholders $ $ Consolidated balance sheets Increase (decrease) December 31, December 31, Contract assets $ $ Other assets Deferred income tax liability Deficit ) ) (iii) IFRS 16 — Leases is required to be applied retrospectively for annual periods beginning on or after January 1, 2019, with early adoption permitted, provided that the IFRS 15 is applied at the same time as IFRS 16. IFRS 16 sets out new principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract. The standard provides lessees with a single accounting model for all leases, with certain exemptions. In particular, lessees will be required to report most leases on their balance sheets by recognizing right-of-use assets and related financial liabilities. Under IFRS 16, most lease charges will be expensed as an asset amortization charge, along with a financial charge on the asset related financial liabilities. Since operating lease charges are currently recognized as operating expenses as they are incurred, the adoption of IFRS 16 will change the timing of the recognition of these lease charges over the term of each lease. It will also affect the classification of expenses in the statement of income. The Corporation expects that the adoption of IFRS 16 will have significant impacts on its consolidated financial statements since all of the Corporation segments are engaged in various long-term leases relating to premises and equipment. However, the adoption impacts on the consolidated financial statements have not yet been measured. |
SEGMENTED INFORMATION (Tables)
SEGMENTED INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENTED INFORMATION | |
Schedule of major subsidiaries | % voting % equity Videotron Ltd. % % TVA Group Inc. % % MediaQMI Inc. % % QMI Spectacles Inc. % % |
Schedule of segmented information | Years ended December 31, 2017, 2016 and 2015 (in millions of Canadian dollars) Telecommunications Media Sports Head Office Total 2017 Revenues $ $ $ $ ) $ Employee costs Purchase of goods and services ) Adjusted operating income 1 ) Depreciation and amortization Financial expenses Loss on valuation and translation of financial instruments Restructuring of operations, litigation and other items Gain on sale of spectrum licences ) Impairment of goodwill and other assets Loss on debt refinancing Income before income taxes $ Additions to property, plant and equipment $ $ $ $ $ Additions to intangible assets Years ended December 31, 2017, 2016 and 2015 (in millions of Canadian dollars) Telecommunications Media Sports Head Office Total 2016 Revenues $ $ $ $ ) $ Employee costs Purchase of goods and services ) Adjusted operating income 1 ) Depreciation and amortization Financial expenses Loss on valuation and translation of financial instruments Restructuring of operations, litigation and other items Impairment of goodwill and other assets Loss on debt refinancing Income before income taxes $ Additions to property, plant and equipment $ $ $ $ $ Additions to intangible assets Years ended December 31, 2017, 2016 and 2015 (in millions of Canadian dollars) Telecommunications Media Sports Head Office Total 2015 Revenues $ $ $ $ ) $ Employee costs Purchase of goods and services ) Adjusted operating income 1 ) ) Depreciation and amortization Financial expenses Loss on valuation and translation of financial instruments Restructuring of operations, litigation and other items ) Impairment of goodwill and other assets Loss on debt refinancing Income before income taxes $ Additions to property, plant and equipment $ $ $ $ $ Additions to intangible assets 1 The Chief Executive Officer uses adjusted operating income as the measure of profit to assess the performance of each segment. Adjusted operating income is referred to as a non-International Financial Reporting Standards (“IFRS”) measure and is defined as net income before depreciation and amortization, financial expenses, loss on valuation and translation of financial instruments, restructuring of operations, litigation and other items, gain on sale of spectrum licences, impairment of goodwill and other assets, loss on debt refinancing, income taxes and income (loss) from discontinued operations. |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property, plant and equipment useful lives | Assets Estimated useful life Buildings and leasehold improvements 10 to 40 years Machinery and equipment 3 to 20 years Telecommunication networks 3 to 20 years |
Schedule of useful lives of intangible assets using the straight-line method | Assets Estimated useful life Software 3 to 7 years Naming rights 25 years Customer relationships and other 3 to 10 years |
Schedule of impacts on consolidated financial figures by retroactive adoption of IFRS 15 | Consolidated statements of income and comprehensive income Increase (decrease) 2017 2016 Revenues $ $ Purchase of goods and services ) ) Deferred income tax expense Net income and comprehensive income attributable to shareholders $ $ Consolidated balance sheets Increase (decrease) December 31, December 31, Contract assets $ $ Other assets Deferred income tax liability Deficit ) ) |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
REVENUES | |
Schedule of revenues between services rendered and product sales | 2017 2016 2015 Services rendered $ $ $ Product sales $ $ $ |
EMPLOYEE COSTS AND PURCHASE O44
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES | |
Schedule of employee costs and purchase of goods and services | 2017 2016 2015 Employee costs $ $ $ Less employee costs capitalized to property, plant and equipment and to intangible assets ) ) ) Purchase of goods and services: Royalties, rights and creation costs Cost of products sold Service contracts Marketing, circulation and distribution expenses Building expenses Other $ $ $ |
FINANCIAL EXPENSES (Tables)
FINANCIAL EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FINANCIAL EXPENSES | |
Schedule of financial expenses | 2017 2016 2015 Interest on long-term debt $ $ $ Amortization of financing costs and long-term debt discount Interest on net defined benefit liability (Gain) loss on foreign currency translation on short-term monetary items ) Other ) $ $ $ |
LOSS ON VALUATION AND TRANSLA46
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | |
Schedule of loss on valuation and translation of financial instruments | 2017 2016 2015 Loss (gain) on the ineffective portion of fair value hedges $ $ $ ) Loss on the ineffective portion of cash flow hedges — (Gain) loss on embedded derivatives related to long-term debt ) ) Loss (gain) on reversal of embedded derivatives on debt redemption — ) $ $ $ |
IMPAIRMENT OF GOODWILL AND OT47
IMPAIRMENT OF GOODWILL AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |
Schedule of impairment of goodwill and other assets | 2017 2016 2015 Impairment of goodwill $ $ $ Impairment of property, plant and equipment — — Impairment of intangible assets $ $ $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Summary of income tax reconciliation | 2017 2016 2015 Income taxes at domestic statutory tax rate $ $ $ (Reduction) increase resulting from: Effect of non-deductible charges, non-taxable income and differences between current and future tax rates ) Change in benefit arising from the recognition of current and prior year tax losses (note 7) ) ) Non-deductible impairment of goodwill Change in deferred tax balances due to a change in substantively enacted tax rates — ) — Effect of tax consolidation transactions with the parent corporation — ) ) Other 1 ) ) ) Income taxes $ $ $ 1 Includes in 2015 a decrease of $16.1 million in income tax liability resulting from developments in tax audit matters, jurisprudence and tax legislation. |
Summary of components of net deferred income tax liability and their impact on the deferred income tax expense | Consolidated Consolidated 2017 2016 2017 2016 2015 Loss carryforwards $ $ $ $ $ Accounts payable, accrued charges, provisions and deferred revenue ) ) Defined benefit plans ) ) Property, plant and equipment ) ) ) Goodwill, intangible assets and other assets ) ) Long-term debt and derivative financial instruments ) ) ) Benefits from a general partnership — ) ) ) Other $ ) $ ) $ $ ) $ |
Summary of changes in the net deferred income tax liability | Note 2017 2016 Balance at beginning of year $ ) $ ) Recognized in income as continuing operations ) Recognized in income as discontinued operations — Recognized in other comprehensive income Business acquisitions and disposals 11, 30 — ) Acquisition of tax deductions — Other ) ) Balance at end of year $ ) $ ) Deferred income tax asset $ $ Deferred income tax liability ) ) $ ) $ ) |
NON-CONTROLLING INTERESTS AND49
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS | |
Schedule of purchase price allocation between the fair value of identifiable assets and liabilities | 2016 2015 Assets acquired Non-cash current assets $ $ Property, plant and equipment Intangible assets Goodwill Other assets — Liabilities assumed Non-cash current liabilities ) ) Deferred income taxes ) ) Other long-term liabilities ) — ) ) Net assets acquired at fair value Non-controlling interests — ) $ $ Consideration Cash $ $ Balance payable $ $ |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS RECEIVABLE | |
Schedule of accounts receivable | Note 2017 2016 Trade 27(c) $ $ Other $ $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INVENTORIES | |
Schedule of inventories | 2017 2016 Raw materials and supplies $ $ Finished goods Programs, broadcast and distribution rights Work in progress $ $ |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of changes in the net carrying amount of property, plant and equipment | Land, Machinery Telecommuncation Projects Total Cost Balance as of December 31, 2015 $ $ $ $ $ Additions Net change in additions financed with accounts payable — ) ) Business acquisitions (note 11) — Reclassification — ) — Retirement, disposals and other ) ) ) ) ) Balance as of December 31, 2016 Additions Net change in additions financed with accounts payable — ) ) ) Reclassification — ) — Retirement, disposals and other ) ) ) ) Balance as of December 31, 2017 $ $ $ $ $ Land, Machinery Telecommunication Projects Total Accumulated depreciation and impairment losses Balance as of December 31, 2015 $ $ $ $ — $ Depreciation — Retirement, disposals and other ) ) ) — ) Balance as of December 31, 2016 — Depreciation — Retirement, disposals and other ) ) ) — ) As of December 31, 2017 $ $ $ $ — $ Net carrying amount As of December 31, 2016 $ $ $ $ $ As of December 31, 2017 $ $ $ $ $ |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INTANGIBLE ASSETS | |
Schedule of changes in the net carrying amount of intangible assets | Spectrum Software Customer Broadcasting Projects Total Cost Balance as of December 31, 2015 $ $ $ $ $ $ Additions — — Net change in additions financed with accounts payable — ) — — ) ) Business acquisitions (note 11) — — Reclassification — — — ) — Retirement, disposals and other — ) ) — — ) Balance as of December 31, 2016 Additions — — Net change in additions financed with accounts payable — — — Reclassification — — — ) — Retirement, disposals and other (note 7) ) ) ) — ) ) Balance as of December 31, 2017 $ $ $ $ $ $ Spectrum Software Customer Broadcasting Projects Total Accumulated amortization and impairment losses Balance as of December 31, 2015 $ $ $ $ $ — $ Amortization — — — Impairment losses (note 8) — — — — Retirement, disposals and other — ) ) — — ) Balance as of December 31, 2016 — Amortization — — — Impairment losses (note 8) — — Retirement, disposals and other — ) ) — — ) Balance as of December 31, 2017 $ $ $ $ $ — $ Net carrying amount As of December 31, 2016 $ $ $ $ $ $ As of December 31, 2017 $ $ $ $ $ $ |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL | |
Schedule of changes in the net carrying amount of goodwill | 2017 2016 Cost Balance at beginning of year $ $ Business acquisitions (note 11) Balance at end of year Accumulated amortization and impairment losses Balance at beginning of year Impairment losses (note 8) Balance at end of year Net carrying amount $ $ |
Schedule of allocation of net carrying amount of goodwill in significant CGU groups | 2017 2016 CGU groups Telecommunications $ $ Magazines — Other 1 Total $ $ 1 Includes the CGUs related to Speciality film and television services, Book publishing and distribution, and Sports and Entertainment. |
Schedule of determination of recoverable amounts in the impairment tests performed in significant CGU groups | 2017 2016 CGU groups 1 Pre-tax Perpetual Pre-tax Perpetual Telecommunications % % % % Magazines ) ) Other 12.0 to 16.5 0.0 to 2.0 12.0 to 16.5 0.0 to 2.0 1 In 2017 and 2016, the recoverable amounts of all CGUs were based on value in use, using the discounted cash flow method. |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ASSETS | |
Schedule of other assets | 2017 2016 Programs, broadcast and distribution rights $ $ Deferred connection costs Other $ $ |
ACCOUNTS PAYABLE AND ACCRUED 56
ACCOUNTS PAYABLE AND ACCRUED CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTS PAYABLE AND ACCRUED CHARGES | |
Schedule of accounts payable and accrued charges | 2017 2016 Trade and accruals $ $ Salaries and employee benefits Interest payable Stock-based compensation $ $ |
PROVISIONS AND CONTINGENCIES (T
PROVISIONS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROVISIONS AND CONTINGENCIES | |
Summary of provisions | Restructuring Contingencies, Total Balance as of December 31, 2016 $ $ $ Recognized in income ) Payments ) ) ) Other — Balance as of December 31, 2017 $ $ $ Current portion $ $ $ Non-current portion (included in “Other Liabilities”) |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM DEBT | |
Schedule of long-term debt | Effective interest rate as of December 31, 2017 2017 2016 Quebecor Media Bank credit facilities (i) % $ 420.4 $ 453.4 Senior Notes (ii) Videotron (iii) Bank credit facilities (iv) % Senior Notes (ii) TVA Group (iii) Bank credit facilities (v) % Other Total long-term debt Change in fair value related to hedged interest rate risk Adjustments related to embedded derivatives — Financing fees, net of amortization ) ) ) ) Less current portion ) ) $ 5,292.6 $ 5,617.2 (i) The bank credit facilities of Quebecor Media are comprised of a US$350.0 million secured term loan “B” facility that matures in August 2020 and is bearing interest at U.S. London Interbank Offered Rate (“LIBOR”) plus a premium of 2.25% and a $300.0 million secured revolving credit facility that matures in July 2020 and is bearing interest at Bankers’ acceptance rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a premium determined by a leverage ratio. The term loan “B” facility provides for quarterly amortization payments totaling 1.00% per annum of the original principal amount, with the balance payable on August 17, 2020. These credit facilities contain covenants such as maintaining certain financial ratios, limitations on the Corporation’s ability to incur additional indebtedness, pay dividends, and make other distributions. They are secured by liens on all of the movable property and assets of the Corporation (primarily shares of its subsidiaries), now owned or hereafter acquired. As of December 31, 2017, the credit facilities were secured by assets with a carrying value of $3,045.4 million ($3,123.2 million in 2016). As of December 31, 2017 and 2016, no amount had been drawn on the revolving credit facility, and as of December 31, 2017, $420.4 million was outstanding on the term loan “B” ($453.4 million in 2016). (ii) The Senior Notes are unsecured and contain certain restrictions on the respective issuers, including limitations on their ability to incur additional indebtedness, pay dividends, or make other distributions. Some Notes are redeemable at the option of the issuer, in whole or in part, at a price based on a make-whole formula during the first five years of the term of the Notes and at a decreasing premium thereafter, while the remaining Notes are redeemable at a price based on a make-whole formula at any time prior to maturity. The Notes issued by Videotron are guaranteed by specific subsidiaries of Videotron. The following table summarizes the terms of the outstanding Senior Notes as of December 31, 2017: Effective interest rate (after discount or Annual nominal premium at Interest payable Principal amount interest rate issuance) Maturity date every 6 months on Quebecor Media US$ % % January 15, 2023 June and December 15 $ % % January 15, 2023 June and December 15 Videotron US$ % % July 15, 2022 January and July 15 US$ % % June 15, 2024 June and December 15 $ % % June 15, 2025 April and October 15 $ 1 % % January 15, 2026 March and September 15 US$ 2 % % April 15, 2027 April and October 15 1 The Notes were issued in September 2015 for net proceeds of $370.1 million, net of financing fees of $4.9 million. 2 The Notes were issued in April 2017 for net proceeds of $794.5 million, net of financing fees of $9.9 million. (iii) The debts of these subsidiaries are non-recourse to Quebecor Media. (iv) The bank credit facilities provide for a $965.0 million secured revolving credit facility that matures in July 2021, and a $75.0 million secured export financing facility providing for a term loan that matures in June 2018. The revolving credit facility bears interest at Bankers’ acceptance rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a margin, depending on Videotron’s leverage ratio. Advances under the export financing facility bear interest at Bankers’ acceptance rate plus a margin. The bank credit facilities are secured by a first ranking hypothec on the universality of all tangible and intangible assets, current and future, of Videotron and most of its wholly owned subsidiaries. As of December 31, 2017, the bank credit facilities were secured by assets with a carrying value of $6,665.7 million ($5,804.3 million in 2016). The bank credit facilities contain covenants such as maintaining certain financial ratios, limitations on Videotron’s ability to incur additional indebtedness, pay dividends, or make other distributions. As of December 31, 2017, no amount had been drawn on the secured revolving credit facility ($209.4 million was drawn in 2016) and $5.4 million was outstanding on the export financing facility ($16.1 million in 2016). (v) The bank credit facilities of TVA Group comprise a secured revolving credit facility in the amount of $150.0 million, maturing in February 2019, and a secured term loan in the amount of $75.0 million, maturing in November 2019. TVA Group’s revolving credit facility bears interest at floating rates based on Bankers’ acceptance rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a premium determined by a leverage ratio. The term loan bears interest at floating rates based on Bankers’ acceptance rate or Canadian prime rate, plus a premium determined by a leverage ratio. The term loan provides for quarterly amortization payments commencing on December 20, 2015. The bank credit facilities contain covenants such as maintaining certain financial ratios, limitations on TVA Group’s ability to incur additional indebtedness, pay dividends, or make other distributions. They are secured by liens on all of its movable assets and an immovable hypothec on its Head Office building. As of December 31, 2017 and 2016, no amount had been drawn on the revolving credit facility, and as of December 31, 2017, $62.9 million was outstanding on the term loan ($69.6 million in 2016). |
Schedule of principal repayments of long-term debt | Principal repayments of long-term debt over the coming years are as follows: 2018 $ 2019 2020 2021 — 2022 2023 and thereafter |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER LIABILITIES | |
Schedule of other liabilities | Note 2017 2016 Defined benefit plans $ $ Deferred revenue Stock-based compensation 1 Other $ $ 1 The current $19.8 million portion of stock-based compensation is included in accounts payable and accrued charges ($17.2 million in 2016) (note 18). |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CAPITAL STOCK | |
Summary of issued and outstanding capital stock | Common Shares Number Amount Balance as of December 31, 2015 $ Reduction of paid-up capital — ) Balance as of December 31, 2016 $ Reduction of paid-up capital — ) Redemption ) ) Balance as of December 31, 2017 $ |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of weighted-average assumptions for estimate of fair value of outstanding stock options | December 31, 2017 Quebecor Quebecor Media TVA Group Risk-free interest rate % % % Distribution yield % % — % Expected volatility % % % Expected remaining life 2.4 years 2.3 years 3.6 years December 31, 2016 Quebecor Quebecor Media TVA Group Risk-free interest rate % % % Distribution yield % % — % Expected volatility % % % Expected remaining life 4.0 years 3.0 years 1.9 years |
Quebecor Stock option plan | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of changes to outstanding options | 2017 2016 Options Weighted Options Weighted Balance at beginning of year $ $ Exercised ) — — Cancelled ) — — Balance at end of year Vested options at end of year $ $ |
Quebecor Mid-term stock-based compensation plan | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of information on changes to outstanding units in stock-based compensation plan | 2017 2016 Units Weighted Units Weighted Balance at beginning of year $ $ Exercised ) ) Cancelled ) — — Balance at end of year $ $ |
Quebecor Media stock option plan | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of changes to outstanding options | 2017 2016 Options Weighted Options Weighted Balance at beginning of year $ $ Exercised ) ) Cancelled ) ) Balance at end of year $ $ Vested options at end of year $ $ |
Schedule of information on exercise price of outstanding options | Outstanding options Vested options Range of Number Weighted Weighted Number Weighted $37.91 to 53.40 $ $ $57.35 to 70.56 $37.91 to 70.56 $ $ |
TVA Group stock option plan | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of changes to outstanding options | 2017 2016 Options Weighted Options Weighted Balance at beginning of year $ $ Cancelled ) — — Expired ) ) Balance at end of year $ $ Vested options at end of year $ $ |
Deferred share unit and performance share unit plans | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of information on changes to outstanding units in stock-based compensation plan | Outstanding units DSU PSU Quebecor Balance at beginning of year Granted Exercised ) ) Cancelled ) ) Balance at end of year TVA Group Balance at beginning of year Granted Exercised ) — Cancelled ) ) Balance at end of year |
ACCUMULATED OTHER COMPREHENSI62
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Schedule of accumulated other comprehensive loss | Cash flow Defined Total Balance as of December 31, 2014 $ ) $ ) $ ) Other comprehensive loss ) ) ) Balance as of December 31, 2015 ) ) ) Other comprehensive (loss) income ) Balance as of December 31, 2016 ) ) ) Other comprehensive income (loss) ) Balance as of December 31, 2017 $ ) $ ) $ ) |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS | |
Schedule of minimum payments | Leases Other 2018 $ $ 2019 to 2022 2023 and thereafter |
FINANCIAL INSTRUMENTS AND FIN64
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | |
Schedule of derivative financial instruments | (i) Foreign exchange forward contracts Maturity CAN dollar average Notional Notional Videotron Less than 1 year $ US$ (ii) Cross-currency interest rate swaps Hedged item Hedging instrument Period Notional Annual interest CAN dollar Quebecor Media 5.750% Senior Notes due 2023 2016 to 2023 US$ 5.750% Senior Notes due 2023 2012 to 2023 US$ Term loan “B” 2013 to 2020 US$ Bankers’ acceptance 3 months + 2.77% Videotron 5.000% Senior Notes due 2022 2014 to 2022 US$ 5.000% Senior Notes due 2022 2012 to 2022 US$ 5.375% Senior Notes due 2024 2014 to 2024 US$ Bankers’ acceptance 3 months + 2.67% 5.375% Senior Notes due 2024 2017 to 2024 US$ 5.125 % Senior Notes due 2027 2017 to 2027 US$ |
Schedule of carrying value and fair value of long-term debt and derivative financial instruments | 2017 2016 Asset (liability) Carrying Fair Carrying Fair Long-term debt 1,2 $ ) $ ) $ ) $ ) Derivative financial instruments 3 Early settlement options — — Foreign exchange forward contracts 4 ) ) Interest rate swaps — — ) ) Cross-currency interest rate swaps 4 1 The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest risk, embedded derivatives and financing fees. 2 The fair value of the long-term debt does not include the fair value of early settlement options, which is presented separately in the table. 3 The fair value of derivative financial instruments designated as hedges is an asset position of $557.7 million as of December 31, 2017 ($808.7 million as of December 31, 2016). 4 The value of foreign exchange forward contracts entered into to lock in the value of existing hedging positions is netted from the value of the offset financial instruments. |
Schedule of allowance for doubtful accounts | 2017 2016 Balance at beginning of year $ $ Charged to income Utilization ) ) Balance at end of year $ $ |
Schedule of maturities of financial instruments | Total Less than 1-3 years 3-5 years 5 years Accounts payable and accrued charges $ $ $ — $ — $ — Long-term debt 1 Interest payments 2 Derivative financial instruments 3 ) ) ) ) Total $ $ $ $ $ 1 The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest rate risk, embedded derivatives and financing fees. 2 Estimate of interest payable on long-term debt, based on interest rates, hedging of interest rates and hedging of foreign exchange rates as of December 31, 2017. 3 Estimated future receipts, net of future disbursements, on derivative financial instruments related to foreign exchange hedging. |
Schedule of capital structure | 2017 2016 Bank indebtedness $ — $ Long-term debt Derivative financial instruments ) ) Cash and cash equivalents ) ) Net liabilities Equity $ $ |
Foreign currency risk | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | |
Schedule of estimated sensitivity on income and on other comprehensive income, before income tax | Increase (decrease) Income Other Increase of $0.10 $ $ Decrease of $0.10 ) ) |
Interest rate risk | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | |
Schedule of estimated sensitivity on income and on other comprehensive income, before income tax | Increase (decrease) Income Other Increase of 100 basis points $ ) $ ) Decrease of 100 basis points |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS | |
Schedule of key management personnel compensation | 2017 2016 2015 Salaries and short-term benefits $ $ $ Share-based compensation Other long-term benefits $ $ $ |
PENSION PLANS AND POSTRETIREM66
PENSION PLANS AND POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PENSION PLANS AND POSTRETIREMENT BENEFITS | |
Schedule of reconciliation of the changes in the plans' benefit obligations and the fair value of plan assets | Pension benefits Postretirement benefits 2017 2016 2017 2016 Change in benefit obligations Benefit obligations at the beginning of the year $ $ $ $ Service costs Interest costs Plan participants’ contributions — — Actuarial loss (gain) arising from: Financial assumptions Demographic assumptions ) — — — Participant experience ) ) — Benefits and settlements paid ) ) ) ) Plan transfer ) — — — Other — — Benefit obligations at the end of the year $ $ $ $ Change in plan assets Fair value of plan assets at the beginning of the year $ $ $ — $ — Actual return on plan assets — — Employer contributions Plan participants’ contributions — — Administrative fees ) ) — — Benefits and settlements paid ) ) ) ) Plan transfer ) — — — Fair value of plan assets at the end of the year $ $ $ — $ — |
Schedule of fair value of plan assets | 2017 2016 Equity securities: Canadian % % Foreign Debt securities Other % % |
Schedule of reconciliation of funded status to the net amount | Pension benefits Postretirement benefits 2017 2016 2017 2016 Benefit obligations $ ) $ ) $ ) $ ) Fair value of plan assets — — Plan deficit ) ) ) ) Asset limit and minimum funding adjustment ) ) — — Net amount recognized 1 $ ) $ ) $ ) $ ) 1 The net amount recognized for 2017 consists of an asset of $2.9 million included in “Other Assets” (note 17) ($8.9 million in 2016) and a liability of $136.9 million included in “Other Liabilities” (note 21) ($132.6 million in 2016). |
Schedule of components of re-measurements | Pension benefits Postretirement benefits 2017 2016 2015 2017 2016 2015 Actuarial (loss) gain on benefit obligations $ ) $ ) $ ) $ $ ) $ ) Actual return on plan assets, less interest income anticipated in the interest on the net defined benefit liability calculation — — — Asset limit and minimum funding adjustment ) ) — — — Re-measurements (loss) gain recorded in other comprehensive income $ ) $ $ ) $ $ ) $ ) |
Schedule of components of net benefit costs | Pension benefits Postretirement benefits 2017 2016 2015 2017 2016 2015 Employee costs: Service costs $ $ $ $ $ $ Administrative fees and other ) — — — Interest on net defined benefit liability Net benefit costs 1 $ $ $ $ $ $ 1 Net benefit gains of $6.0 million in 2015 were presented as part of discontinued operations. |
Schedule of actuarial assumptions used in measuring the Corporation's benefit obligations | Pension benefits Postretirement benefits 2017 2016 2015 2017 2016 2015 Benefit obligations Rates as of year-end: Discount rate % % % % % % Rate of compensation increase Current periodic costs Rates as of preceding year-end: Discount rate % % % % % % Rate of compensation increase |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DISCONTINUED OPERATIONS | |
Summary of consolidated statements of income and comprehensive income and cash flows | Consolidated statements of income and comprehensive income 2015 Revenues $ Expenses Loss before income taxes ) Income taxes ) Loss on disposal of businesses ) Loss and comprehensive loss from discontinued operations $ ) Consolidated statements of cash flows Cash flows related to operating activities $ ) Cash flows related to investing activities ) Cash flows used in discontinued operations $ ) |
NON-CONSOLIDATED FINANCIAL ST68
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION | |
Schedule of information related to non-consolidated condensed statements of income and comprehensive income | Non-consolidated condensed statements of income and comprehensive income 2017 2016 2015 Revenues: Dividends $ $ $ Management fees Other General and administrative expenses Depreciation and amortization Financial expenses (Gain) loss on valuation and translation of financial instruments ) — Loss on debt refinancing — — Impairment and disposal of investments in subsidiaries — Loss on notes receivable from subsidiaries — — Other ) Income before income taxes Income taxes Net income Other comprehensive gain (loss) ) ) Comprehensive income $ $ $ |
Schedule of information related to non-consolidated and condensed statements of cash flows | Non-consolidated and condensed statements of cash flows 2017 2016 2015 Cash flows related to operations Net income $ $ $ Depreciation and amortization (Gain) loss on valuation and translation of financial instruments ) — Amortization of financing costs and long-term debt discount Loss on debt refinancing — — Impairment and disposal of investments in subsidiaries — Loss on notes receivable from subsidiaries — — Deferred income taxes Other ) Net change in non-cash balances related to operations ) Cash flows provided by operations Cash flows related to investing activities Net change in investments in subsidiaries ) ) ) Proceeds from disposal of subsidiaries — — Acquisition of tax deductions from the parent corporation — ) — Other ) ) Cash flows used in investing activities ) ) ) Cash flows related to financing activities Net change in bank indebtedness ) ) Net change under revolving facilities — ) Repayment of long-term debt ) ) ) Settlement of hedging contracts ) Repurchase of Common Shares ) — ) Repurchase of redeemable preferred shares issued to subsidiaries — ) — Dividends and reduction of paid-up capital ) ) ) Net change in subordinated loans from subsidiaries ) Net change in convertible obligations, subordinated loans and notes receivable — subsidiaries ) Net change in advances to or from subsidiaries ) Cash flows used in financing activities ) ) ) Net change in cash and cash equivalents — ) Cash and cash equivalents at the beginning of the year — — Cash and cash equivalents at the end of the year $ $ — $ — |
Schedule of information related to non-consolidated and condensed balance sheets | Non-consolidated and condensed balance sheets 2017 2016 Assets Current assets $ $ Investments in subsidiaries at cost Advances to subsidiaries Convertible obligations, subordinated loans and notes receivable — subsidiaries Other assets $ $ Liabilities and equity Current liabilities $ $ Long-term debt Advances from subsidiaries Other liabilities Subordinated loan from subsidiaries Equity attributable to shareholders $ $ |
SEGMENTED INFORMATION - Subsidi
SEGMENTED INFORMATION - Subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Videotron | |
Percentages of voting rights and equity in its major subsidiaries | |
% voting | 100.00% |
% equity | 100.00% |
TVA Group | |
Percentages of voting rights and equity in its major subsidiaries | |
% voting | 99.90% |
% equity | 68.40% |
Media QMI Inc | |
Percentages of voting rights and equity in its major subsidiaries | |
% voting | 100.00% |
% equity | 100.00% |
QMI Spectacles Inc. | |
Percentages of voting rights and equity in its major subsidiaries | |
% voting | 100.00% |
% equity | 100.00% |
SEGMENTED INFORMATION - Additio
SEGMENTED INFORMATION - Additional information (Details) | 12 Months Ended |
Dec. 31, 2017item | |
Sports and Entertainment | |
Percentages of voting rights and equity in its major subsidiaries | |
Number of teams | 2 |
SEGMENTED INFORMATION - Segment
SEGMENTED INFORMATION - Segment information (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SEGMENTED INFORMATION | |||
Revenues | $ 4,122.4 | $ 4,016.6 | $ 3,890.8 |
Employee costs | 706.2 | 707.9 | 694.4 |
Purchase of goods and services | 1,820.8 | 1,810.9 | 1,755.6 |
Adjusted operating income | 1,595.4 | 1,497.8 | 1,440.8 |
Depreciation and amortization | 709.8 | 650.4 | 691 |
Financial expenses | 283.4 | 302.9 | 309.2 |
Loss on valuation and translation of financial instruments | 2.4 | 2.1 | 3.8 |
Restructuring of operations, litigation and other items | 17.2 | 28.5 | (117.2) |
Gain on sale of spectrum licences | (330.9) | ||
Impairment of goodwill and other assets | 43.8 | 40.9 | 230.7 |
Loss on debt refinancing | 15.6 | 7.3 | 12.1 |
Income before income taxes | 854.1 | 465.7 | 311.2 |
Purchase of property, plant and equipment, classified as investing activities | 605.3 | 707.6 | 678.4 |
Purchase of intangible assets, classified as investing activities | 141.9 | 139.8 | 360.6 |
Operating Segments | Telecommunications | |||
SEGMENTED INFORMATION | |||
Revenues | 3,285.1 | 3,151.8 | 3,007 |
Employee costs | 388.8 | 379.7 | 359.4 |
Purchase of goods and services | 1,362.3 | 1,322.7 | 1,261.8 |
Adjusted operating income | 1,534 | 1,449.4 | 1,385.8 |
Purchase of property, plant and equipment, classified as investing activities | 574.4 | 666.8 | 630.2 |
Purchase of intangible assets, classified as investing activities | 132.3 | 125.6 | 312.3 |
Operating Segments | Media | |||
SEGMENTED INFORMATION | |||
Revenues | 769.9 | 789.2 | 812.7 |
Employee costs | 232 | 242.4 | 257.6 |
Purchase of goods and services | 468.6 | 492.9 | 495 |
Adjusted operating income | 69.3 | 53.9 | 60.1 |
Purchase of property, plant and equipment, classified as investing activities | 29.4 | 37.2 | 35.2 |
Purchase of intangible assets, classified as investing activities | 3.3 | 7.5 | 6.8 |
Operating Segments | Sports and Entertainment | |||
SEGMENTED INFORMATION | |||
Revenues | 181.3 | 185 | 187.6 |
Employee costs | 37.6 | 38.3 | 38.7 |
Purchase of goods and services | 137.5 | 144.4 | 150.5 |
Adjusted operating income | 6.2 | 2.3 | (1.6) |
Purchase of property, plant and equipment, classified as investing activities | 1.3 | 3.5 | 12.8 |
Purchase of intangible assets, classified as investing activities | 4.3 | 3.5 | 37.1 |
Head Office and Intersegments | |||
SEGMENTED INFORMATION | |||
Revenues | (113.9) | (109.4) | (116.5) |
Employee costs | 47.8 | 47.5 | 38.7 |
Purchase of goods and services | (147.6) | (149.1) | (151.7) |
Adjusted operating income | (14.1) | (7.8) | (3.5) |
Purchase of property, plant and equipment, classified as investing activities | 0.2 | 0.1 | 0.2 |
Purchase of intangible assets, classified as investing activities | $ 2 | $ 3.2 | $ 4.4 |
SUMMARY OF SIGNIFICANT ACCOUN72
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Barter transactions (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Barter advertising revenue | $ 12.2 | $ 11.7 | $ 10.3 |
SUMMARY OF SIGNIFICANT ACCOUN73
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated useful life of property, plant and equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings and leasehold improvements | Minimum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful life of fixed assets | 10 years |
Buildings and leasehold improvements | Maximum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful life of fixed assets | 40 years |
Machinery and equipment | Minimum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful life of fixed assets | 3 years |
Machinery and equipment | Maximum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful life of fixed assets | 20 years |
Telecommunication networks | Minimum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful life of fixed assets | 3 years |
Telecommunication networks | Maximum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful life of fixed assets | 20 years |
SUMMARY OF SIGNIFICANT ACCOUN74
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated useful life of intangible assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Software | Minimum | |
INTANGIBLE ASSETS | |
Estimated useful life of intangible assets | 3 years |
Software | Maximum | |
INTANGIBLE ASSETS | |
Estimated useful life of intangible assets | 7 years |
Naming rights | |
INTANGIBLE ASSETS | |
Estimated useful life of intangible assets | 25 years |
Customer relationships and other | Minimum | |
INTANGIBLE ASSETS | |
Estimated useful life of intangible assets | 3 years |
Customer relationships and other | Maximum | |
INTANGIBLE ASSETS | |
Estimated useful life of intangible assets | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN75
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Retroactive adoption of IFRS 15 - Consolidated statements of income and comprehensive income (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | $ 4,122.4 | $ 4,016.6 | $ 3,890.8 |
Purchase of goods and services | 1,820.8 | 1,810.9 | 1,755.6 |
Deferred income tax expense | 124.5 | (31.7) | 40.7 |
Net income attributable to shareholders | 740.2 | 352 | 207.6 |
Comprehensive income attributable to shareholders | 809.3 | 358.5 | $ 156.2 |
Increase (decrease) due to application of IFRS 15 | |||
Revenues | 22.4 | 52.5 | |
Purchase of goods and services | (12.4) | (13.2) | |
Deferred income tax expense | 9.2 | 17.4 | |
Net income attributable to shareholders | 25.6 | 48.3 | |
Comprehensive income attributable to shareholders | $ 25.6 | $ 48.3 |
SUMMARY OF SIGNIFICANT ACCOUN76
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Retroactive adoption of IFRS 15 - Consolidated balance sheets (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other assets | $ 97.6 | $ 91.7 |
Deferred income tax liability | 650.9 | 540.3 |
Deficit | (1,315.9) | (1,982.8) |
Increase (decrease) due to application of IFRS 15 | ||
Contract assets | 183.6 | 155.8 |
Other assets | 92.5 | 85.4 |
Deferred income tax liability | 73.2 | 63.9 |
Deficit | $ (202.9) | $ (177.3) |
REVENUES (Details)
REVENUES (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
REVENUES | |||
Services rendered | $ 3,792.7 | $ 3,668.2 | $ 3,516.4 |
Product sales | 329.7 | 348.4 | 374.4 |
Revenues | $ 4,122.4 | $ 4,016.6 | $ 3,890.8 |
EMPLOYEE COSTS AND PURCHASE O78
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES | |||
Employee costs | $ 893.6 | $ 891.2 | $ 871 |
Less employee costs capitalized to property, plant and equipment and to intangible assets | (187.4) | (183.3) | (176.6) |
Net employee costs | 706.2 | 707.9 | 694.4 |
Purchase of goods and services: | |||
Royalties, rights and creation costs | 677.9 | 701.9 | 729.3 |
Cost of products sold | 373.7 | 352.4 | 318 |
Service contracts | 172.3 | 168.7 | 159.7 |
Marketing, circulation and distribution expenses | 108.9 | 113.8 | 112.3 |
Building expenses | 99.5 | 92.5 | 84.2 |
Other | 388.5 | 381.6 | 352.1 |
Total purchase of goods and services | 1,820.8 | 1,810.9 | 1,755.6 |
Total employee costs and purchase of goods and services | $ 2,527 | $ 2,518.8 | $ 2,450 |
FINANCIAL EXPENSES (Details)
FINANCIAL EXPENSES (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
FINANCIAL EXPENSES | |||
Interest on long-term debt | $ 274.7 | $ 288 | $ 287.3 |
Amortization of financing costs and long-term debt discount | 6.9 | 7 | 7.1 |
Interest on net defined benefit liability | 5.8 | 6.7 | 5.4 |
(Gain) loss on foreign currency translation on short-term monetary items | (2) | 0.5 | 6.4 |
Other | (2) | 0.7 | 3 |
Total financial expenses | $ 283.4 | $ 302.9 | $ 309.2 |
LOSS ON VALUATION AND TRANSLA80
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | |||
(Gain) loss on embedded derivatives related to long-term debt | $ (0.6) | $ (0.2) | $ 6.2 |
Loss (gain) on reversal of embedded derivatives on debt redemption | 0.2 | (0.4) | |
Loss on valuation and translation of financial instruments | 2.4 | 2.1 | 3.8 |
Fair value hedges | |||
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | |||
Loss (gain) on the ineffective portion of hedges | $ 3 | 2 | (3.6) |
Cash flow hedges | |||
LOSS ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS | |||
Loss (gain) on the ineffective portion of hedges | $ 0.1 | $ 1.6 |
RESTRUCTURING OF OPERATIONS, 81
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS | |||
Restructuring of operations, litigation and other items | $ (17.2) | $ (28.5) | $ 117.2 |
Videotron | |||
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS | |||
Settlement award | 135.3 | ||
TVA Group | |||
RESTRUCTURING OF OPERATIONS, LITIGATION AND OTHER ITEMS | |||
Gain on litigation | 139.1 | ||
Settlement award | $ 0.6 |
GAIN ON SALE OF SPECTRUM LICE82
GAIN ON SALE OF SPECTRUM LICENCES (Details) $ in Millions | Jul. 24, 2017CAD ($)item | Jun. 20, 2017CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2015CAD ($) |
GAIN ON SALE OF SPECTRUM LICENCES | |||||
Gain on sale of spectrum licences | $ 330.9 | ||||
Income taxes | 133.3 | $ 126.3 | $ 104.1 | ||
Spectrum licences | |||||
GAIN ON SALE OF SPECTRUM LICENCES | |||||
Income taxes | $ (44.4) | ||||
AWS spectrum licence | Videotron | |||||
GAIN ON SALE OF SPECTRUM LICENCES | |||||
Cash consideration | $ 184.2 | ||||
Gain on sale of spectrum licences | $ 87.8 | ||||
2500 MHz and 700 MHz wireless spectrum licences | Videotron | |||||
GAIN ON SALE OF SPECTRUM LICENCES | |||||
Cash consideration | $ 430 | ||||
Gain on sale of spectrum licences | $ 243.1 | ||||
Number of intangible assets sold | item | 7 |
IMPAIRMENT OF GOODWILL AND OT83
IMPAIRMENT OF GOODWILL AND OTHER ASSETS - Tabular disclosure (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||
Impairment of goodwill | $ 30 | $ 40.1 | $ 85 |
Impairment of property, plant and equipment | 76.5 | ||
Impairment of intangible assets | 13.8 | 0.8 | 69.2 |
Total impairment loss | $ 43.8 | $ 40.9 | $ 230.7 |
IMPAIRMENT OF GOODWILL AND OT84
IMPAIRMENT OF GOODWILL AND OTHER ASSETS - Additional information (Details) - CAD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||||
Impairment of goodwill | $ 30 | $ 40.1 | $ 85 | ||
Impairment of intangible assets | 13.8 | 0.8 | 69.2 | ||
Magazines CGU | |||||
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||||
Impairment of goodwill | $ 30 | $ 40.1 | |||
Impairment of goodwill without tax consequence | 1.5 | $ 40.1 | |||
Impairment of intangible assets | 12.4 | ||||
Impairment of intangible assets without tax consequence | $ 3.1 | ||||
Newspapers CGU | |||||
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||||
Impairment of goodwill | 85 | ||||
Impairment of goodwill without tax consequence | 85 | ||||
Impairment of other assets | 81.9 | ||||
Broadcasting CGU | |||||
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||||
Impairment of intangible assets | 60.1 | ||||
Impairment of intangible assets without tax consequence | 30.1 | ||||
Other segments excluding Magazines CGU | |||||
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||||
Impairment of intangible assets | $ 1.4 | $ 0.8 | |||
Other segments excluding Newspapers CGU and Broadcasting CGU | |||||
IMPAIRMENT OF GOODWILL AND OTHER ASSETS | |||||
Impairment of intangible assets | $ 3.7 |
LOSS ON DEBT REFINANCING (Detai
LOSS ON DEBT REFINANCING (Details) $ in Millions, $ in Millions | May 01, 2017CAD ($) | Jan. 05, 2017CAD ($) | Jul. 16, 2015CAD ($) | Apr. 10, 2015CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2015CAD ($) | Dec. 02, 2016CAD ($) | Jul. 16, 2015USD ($) | Jul. 16, 2015CAD ($) | Apr. 10, 2015USD ($) |
LOSS ON DEBT REFINANCING | |||||||||||
Redeemed for cash consideration | $ 664.5 | $ 19 | $ 652.3 | ||||||||
Hedging contracts unwound for a total cash consideration | (16.6) | (0.4) | 34.3 | ||||||||
Loss on debt refinancing | $ 15.6 | $ 7.3 | 12.1 | ||||||||
Gain from hedging contracts | $ 3.9 | ||||||||||
Videotron | 6.875% Senior Notes | |||||||||||
LOSS ON DEBT REFINANCING | |||||||||||
Principal amount | $ 125 | $ 175 | |||||||||
Interest rate (as a percent) | 6.875% | 6.875% | |||||||||
Redeemed for cash consideration | $ 129.3 | $ 181 | |||||||||
Videotron | 6.375% Senior Notes | |||||||||||
LOSS ON DEBT REFINANCING | |||||||||||
Principal amount | $ 175 | ||||||||||
Interest rate (as a percent) | 6.375% | ||||||||||
Hedging contracts unwound for a total cash consideration | $ 204.5 | ||||||||||
Videotron | 9.125% Senior Notes | |||||||||||
LOSS ON DEBT REFINANCING | |||||||||||
Principal amount | $ 75 | ||||||||||
Interest rate (as a percent) | 9.125% | 9.125% | |||||||||
Hedging contracts unwound for a total cash consideration | $ 75.9 | ||||||||||
Videotron | 7.125% Senior Notes | |||||||||||
LOSS ON DEBT REFINANCING | |||||||||||
Principal amount | $ 300 | ||||||||||
Interest rate (as a percent) | 7.125% | 7.125% | |||||||||
Redeemed for cash consideration | $ 310.7 | ||||||||||
Quebecor Media | 7.375% Senior Notes | |||||||||||
LOSS ON DEBT REFINANCING | |||||||||||
Principal amount | $ 325 | ||||||||||
Interest rate (as a percent) | 7.375% | ||||||||||
Redeemed for cash consideration | $ 333 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of income tax expense (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
INCOME TAXES | |||
Domestic statutory tax rate (in percent) | 26.80% | 26.90% | 26.90% |
Income taxes at domestic statutory tax rate | $ 228.9 | $ 125.3 | $ 83.7 |
(Reduction) increase resulting from: | |||
Effect of non-deductible charges, non-taxable income and differences between current and future tax rates | (48.5) | 1 | 12.9 |
Change in benefit arising from the recognition of current and prior year tax losses (note 7) | (47) | (0.5) | 2.8 |
Non-deductible impairment of goodwill | 0.4 | 10.8 | 22.9 |
Change in deferred tax balances due to a change in substantively enacted tax rates | (6.4) | ||
Effect of tax consolidation transactions with the parent corporation | (0.3) | (0.6) | |
Other | (0.5) | (3.6) | (17.6) |
Income taxes | $ 133.3 | $ 126.3 | 104.1 |
Decrease in income tax liability resulting from developments in tax audit matters | $ 16.1 |
INCOME TAXES - Components of de
INCOME TAXES - Components of deferred income tax (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred income taxes | |||
Deferred tax liability, net | $ (617.7) | $ (524.3) | $ (560.6) |
Deferred tax expense (income) | 124.5 | (31.7) | 38.4 |
Loss carryforwards | |||
Deferred income taxes | |||
Deferred tax liability, net | 0.4 | 4 | |
Deferred tax expense (income) | 3.6 | 2.9 | 11.4 |
Accounts payable, accrued charges, provisions and deferred revenue | |||
Deferred income taxes | |||
Deferred tax liability, net | 14.5 | 15.9 | |
Deferred tax expense (income) | 1.4 | (4) | (6.9) |
Defined benefit plans | |||
Deferred income taxes | |||
Deferred tax liability, net | 35.5 | 32.7 | |
Deferred tax expense (income) | (1.9) | (2.2) | 1.5 |
Property, plant and equipment | |||
Deferred income taxes | |||
Deferred tax liability, net | (488.1) | (402.3) | |
Deferred tax expense (income) | 85.8 | 12.7 | (26.4) |
Goodwill, intangible assets and other assets | |||
Deferred income taxes | |||
Deferred tax liability, net | (174.7) | (132.6) | |
Deferred tax expense (income) | 42.1 | 22.7 | 29.4 |
Long-term debt and derivative financial instruments | |||
Deferred income taxes | |||
Deferred tax liability, net | (14) | (49.4) | |
Deferred tax expense (income) | (7.4) | 0.3 | 14.3 |
Benefits from a general partnership | |||
Deferred income taxes | |||
Deferred tax liability, net | (0.6) | ||
Deferred tax expense (income) | (0.6) | (67) | 11.1 |
Other | |||
Deferred income taxes | |||
Deferred tax liability, net | 8.7 | 8 | |
Deferred tax expense (income) | $ 1.5 | $ 2.9 | $ 4 |
INCOME TAXES - Changes in defer
INCOME TAXES - Changes in deferred income tax liability (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the net deferred income tax liability | |||
Balance at beginning of year | $ (524.3) | $ (560.6) | |
Recognized in income as continuing operations | (124.5) | 31.7 | |
Recognized in income as discontinued operations | 2.9 | $ 3.4 | |
Recognized in other comprehensive income | 28.9 | 7 | |
Business acquisitions and disposals | (7.5) | ||
Acquisition of tax deductions | 5.6 | ||
Other | (0.7) | (0.5) | |
Balance at end of year | $ (617.7) | $ (524.3) | $ (560.6) |
INCOME TAXES - Net deferred inc
INCOME TAXES - Net deferred income tax liability (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
INCOME TAXES | |||
Deferred income tax asset | $ 33.2 | $ 16 | |
Deferred income tax liability | (650.9) | (540.3) | |
Net deferred income tax liability | $ (617.7) | $ (524.3) | $ (560.6) |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
INCOME TAXES | |||
Loss carryforwards for income tax purposes available to reduce future taxable income | $ 6.4 | ||
Capital losses that can be carried forward indefinitely and applied only against future capital gains | 579.9 | ||
Income tax consequences attached to the payment of dividends or distributions | $ 0 | $ 0 | $ 0 |
NON-CONTROLLING INTERESTS AND91
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS - Non-controlling interests acquisitions (Details) - CAD ($) $ in Millions | Mar. 20, 2015 | Mar. 19, 2015 | Dec. 31, 2015 |
Equity attributable to non-controlling interests | |||
Non-controlling interests acquisitions | |||
Increase of deficit and equivalent increase of non-controlling interests | $ 2.2 | ||
TVA Group | |||
Non-controlling interests acquisitions | |||
Aggregate equity interest | 68.40% | 51.50% | |
TVA Group | Equity attributable to non-controlling interests | |||
Non-controlling interests acquisitions | |||
Decrease of deficit and equivalent decrease of non-controlling interests | $ 18.7 | ||
Class B | Equity attributable to non-controlling interests | |||
Non-controlling interests acquisitions | |||
Number of shares subscribed | 17,300,259 | ||
Total cost | $ 97.9 | ||
Class B | TVA Group | Equity attributable to non-controlling interests | |||
Non-controlling interests acquisitions | |||
Aggregate gross proceeds | $ 110 | ||
Number of shares issued | 19,434,629 |
NON-CONTROLLING INTERESTS AND92
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS - Business acquisitions (Details) $ in Millions | Jan. 07, 2016CAD ($) | Apr. 12, 2015CAD ($)item | Feb. 28, 2017CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2015CAD ($) | Jun. 30, 2016CAD ($) | Jun. 30, 2015CAD ($) | Mar. 11, 2015CAD ($) |
Business acquisitions | |||||||||
Business acquisitions | $ 5.8 | $ 119.5 | $ 94.5 | ||||||
2017 Acquisition | Sports and Entertainment | |||||||||
Business acquisitions | |||||||||
Purchase price | $ 0.2 | ||||||||
2016 Acquisition | |||||||||
Business acquisitions | |||||||||
Balance consideration paid, prior acquisitions | $ 0.6 | ||||||||
March 2015 Acquisition | Telecommunications | |||||||||
Business acquisitions | |||||||||
Purchase price | $ 35.5 | ||||||||
Post-closing adjustment | $ (0.2) | ||||||||
April 2015 Acquisition | TVA Group | |||||||||
Business acquisitions | |||||||||
Number of magazines acquired | item | 14 | ||||||||
Purchase price | $ 55.5 | ||||||||
Post-closing adjustment | $ 0.8 | ||||||||
Videotron | 2016 Acquisition | |||||||||
Business acquisitions | |||||||||
Purchase price | $ 125 | ||||||||
Amount paid, net of cash acquired | 119.1 | ||||||||
Cash | $ 1.8 | ||||||||
Post-closing adjustment | $ (0.2) | ||||||||
Business acquisitions | $ 5.6 | ||||||||
Interest paid on balance payable | $ 0.3 |
NON-CONTROLLING INTERESTS AND93
NON-CONTROLLING INTERESTS AND BUSINESS ACQUISITIONS - Purchase price allocation (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets acquired | |||
Goodwill | $ 2,695.8 | $ 2,725.4 | |
Consideration | |||
Goodwill deductible for tax purposes | $ 0 | 0.1 | $ 7.6 |
Business acquisitions | |||
Assets acquired | |||
Non-cash current assets | 5.5 | 20.1 | |
Property, plant and equipment | 32.7 | 13.9 | |
Intangible assets | 15.6 | 32 | |
Goodwill | 87.1 | 48.8 | |
Other assets | 2.1 | ||
Total assets acquired | 140.9 | 116.9 | |
Liabilities assumed | |||
Non-cash current liabilities | (3.1) | (21.2) | |
Deferred income taxes | (7.5) | (0.2) | |
Other long-term liabilities | (5.7) | ||
Total liabilities assumed | (16.3) | (21.4) | |
Net assets acquired at fair value | 124.6 | 95.5 | |
Non-controlling interests | (0.8) | ||
Total assets acquired and liabilities assumed | 124.6 | 94.7 | |
Consideration | |||
Cash | 119 | 94.5 | |
Balance payable | 5.6 | 0.2 | |
Total consideration transferred, acquisition-date fair value | $ 124.6 | $ 94.7 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
ACCOUNTS RECEIVABLE | ||
Trade | $ 486.4 | $ 466.2 |
Other | 56.5 | 58.8 |
Total | $ 542.9 | $ 525 |
INVENTORIES (Details)
INVENTORIES (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
INVENTORIES | |||
Raw materials and supplies | $ 20.3 | $ 23.5 | |
Finished goods | 87.6 | 81.8 | |
Programs, broadcast and distribution rights | 78.2 | 76.2 | |
Work in progress | 2 | 1.8 | |
Total current inventories | 188.1 | 183.3 | |
Cost of inventories included in purchase of goods and services | 718.8 | 737.7 | $ 681.2 |
Write-downs of inventories | $ 11.1 | $ 6.8 | $ 5.8 |
PROPERTY, PLANT AND EQUIPMENT96
PROPERTY, PLANT AND EQUIPMENT (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | $ 3,562.5 | |
Balance at the end of the year | 3,554.3 | $ 3,562.5 |
Cost | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 7,878.8 | 7,289 |
Additions | 605.3 | 707.6 |
Net change in additions financed with accounts payable | (4.4) | 2.8 |
Business acquisitions | 32.7 | |
Retirement, disposals and other | (167.6) | (153.3) |
Balance at the end of the year | 8,312.1 | 7,878.8 |
Accumulated depreciation and impairment losses | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | (4,316.3) | (3,909.1) |
Depreciation | 605 | 552.5 |
Retirement, disposals and other | 163.5 | 145.3 |
Balance at the end of the year | (4,757.8) | (4,316.3) |
Land, buildings and leasehold improvements | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 373.6 | |
Balance at the end of the year | 391.2 | 373.6 |
Land, buildings and leasehold improvements | Cost | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 573.6 | 498.7 |
Additions | 39.4 | 79.2 |
Business acquisitions | 0.5 | |
Retirement, disposals and other | (0.1) | (4.8) |
Balance at the end of the year | 612.9 | 573.6 |
Land, buildings and leasehold improvements | Accumulated depreciation and impairment losses | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | (200) | (183.8) |
Depreciation | 21.9 | 18 |
Retirement, disposals and other | 0.2 | 1.8 |
Balance at the end of the year | (221.7) | (200) |
Machinery and equipment | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 575.3 | |
Balance at the end of the year | 529.5 | 575.3 |
Machinery and equipment | Cost | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 1,663.6 | 1,521.9 |
Additions | 145.5 | 188.1 |
Net change in additions financed with accounts payable | (2) | (3.3) |
Business acquisitions | 0.3 | |
Reclassification | 14.4 | 10.2 |
Retirement, disposals and other | (70.3) | (53.6) |
Balance at the end of the year | 1,751.2 | 1,663.6 |
Machinery and equipment | Accumulated depreciation and impairment losses | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | (1,088.3) | (930.5) |
Depreciation | 199.1 | 207.4 |
Retirement, disposals and other | 65.7 | 49.6 |
Balance at the end of the year | (1,221.7) | (1,088.3) |
Telecommunication networks | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 2,521.1 | |
Depreciation | 21 | |
Balance at the end of the year | $ 2,587.4 | $ 2,521.1 |
Estimated useful lives (in years) | P5Y | P15Y |
Telecommunication networks | Cost | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | $ 5,549.1 | $ 5,193.8 |
Additions | 364.4 | 341 |
Net change in additions financed with accounts payable | (3.4) | 10.5 |
Business acquisitions | 31.9 | |
Reclassification | 90.1 | 66.6 |
Retirement, disposals and other | (98.4) | (94.7) |
Balance at the end of the year | 5,901.8 | 5,549.1 |
Telecommunication networks | Accumulated depreciation and impairment losses | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | (3,028) | (2,794.8) |
Depreciation | 384 | 327.1 |
Retirement, disposals and other | 97.6 | 93.9 |
Balance at the end of the year | (3,314.4) | (3,028) |
Projects under development | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 92.5 | |
Balance at the end of the year | 46.2 | 92.5 |
Projects under development | Cost | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Balance at the beginning of the year | 92.5 | 74.6 |
Additions | 56 | 99.3 |
Net change in additions financed with accounts payable | 1 | (4.4) |
Reclassification | (104.5) | (76.8) |
Retirement, disposals and other | 1.2 | (0.2) |
Balance at the end of the year | $ 46.2 | $ 92.5 |
INTANGIBLE ASSETS - Changes in
INTANGIBLE ASSETS - Changes in the net carrying amount of intangible assets (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | $ 1,224 | ||
Impairment losses | 13.8 | $ 0.8 | $ 69.2 |
Balance at the end of the period | 983.1 | 1,224 | |
Spectrum licences | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 759.2 | ||
Balance at the end of the period | 475.8 | 759.2 | |
Software | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 349.2 | ||
Balance at the end of the period | 373.8 | 349.2 | |
Customer relationships, naming rights and other | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 68.2 | ||
Balance at the end of the period | 54.4 | 68.2 | |
Broadcasting licences, trademarks and sport franchises | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 22.3 | ||
Balance at the end of the period | 14.3 | 22.3 | |
Projects under development | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 25.1 | ||
Balance at the end of the period | 64.8 | 25.1 | |
Cost | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 2,084.2 | 1,982.6 | |
Additions | 141.9 | 139.8 | |
Net change in additions financed with accounts payable | 26.2 | (9) | |
Business acquisitions | 15.6 | ||
Retirement, disposals and other | (296.1) | (44.8) | |
Balance at the end of the period | 1,956.2 | 2,084.2 | 1,982.6 |
Cost | Spectrum licences | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 1,006.9 | 1,006.9 | |
Retirement, disposals and other | (283.4) | ||
Balance at the end of the period | 723.5 | 1,006.9 | 1,006.9 |
Cost | Software | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 811 | 708.1 | |
Additions | 77.7 | 108.8 | |
Net change in additions financed with accounts payable | 13.9 | (7) | |
Business acquisitions | 0.5 | ||
Reclassification | 32.1 | 30.4 | |
Retirement, disposals and other | (7.6) | (29.8) | |
Balance at the end of the period | 927.1 | 811 | 708.1 |
Cost | Customer relationships, naming rights and other | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 116.3 | 118.2 | |
Additions | 2.4 | 2.8 | |
Business acquisitions | 10.3 | ||
Retirement, disposals and other | (2.8) | (15) | |
Balance at the end of the period | 115.9 | 116.3 | 118.2 |
Cost | Broadcasting licences, trademarks and sport franchises | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 124.9 | 120.1 | |
Business acquisitions | 4.8 | ||
Balance at the end of the period | 124.9 | 124.9 | 120.1 |
Cost | Projects under development | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | 25.1 | 29.3 | |
Additions | 61.8 | 28.2 | |
Net change in additions financed with accounts payable | 12.3 | (2) | |
Reclassification | (32.1) | (30.4) | |
Retirement, disposals and other | (2.3) | ||
Balance at the end of the period | 64.8 | 25.1 | 29.3 |
Accumulated amortization and impairment losses | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | (860.2) | (804.6) | |
Amortization | 104.8 | 97.9 | |
Impairment losses | 13.8 | 0.8 | |
Retirement, disposals and other | (5.7) | (43.1) | |
Balance at the end of the period | (973.1) | (860.2) | (804.6) |
Accumulated amortization and impairment losses | Spectrum licences | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | (247.7) | (247.7) | |
Balance at the end of the period | (247.7) | (247.7) | (247.7) |
Accumulated amortization and impairment losses | Software | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | (461.8) | (405.2) | |
Amortization | 93 | 84.7 | |
Impairment losses | 1.4 | ||
Retirement, disposals and other | (2.9) | (28.1) | |
Balance at the end of the period | (553.3) | (461.8) | (405.2) |
Accumulated amortization and impairment losses | Customer relationships, naming rights and other | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | (48.1) | (49.1) | |
Amortization | 11.8 | 13.2 | |
Impairment losses | 4.4 | 0.8 | |
Retirement, disposals and other | (2.8) | (15) | |
Balance at the end of the period | (61.5) | (48.1) | (49.1) |
Accumulated amortization and impairment losses | Broadcasting licences, trademarks and sport franchises | |||
Changes in the net carrying amount of intangible assets | |||
Balance at the beginning of the period | (102.6) | (102.6) | |
Impairment losses | 8 | ||
Balance at the end of the period | $ (110.6) | $ (102.6) | $ (102.6) |
INTANGIBLE ASSETS - Other infor
INTANGIBLE ASSETS - Other information (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
INTANGIBLE ASSETS | |||
Cost of intangible assets | $ 983.1 | $ 1,224 | |
Internally Generated | |||
INTANGIBLE ASSETS | |||
Cost of intangible assets | 243.2 | 220.9 | |
Cost | |||
INTANGIBLE ASSETS | |||
Cost of intangible assets | 1,956.2 | 2,084.2 | $ 1,982.6 |
Additions | 141.9 | 139.8 | |
Cost | Internally Generated | |||
INTANGIBLE ASSETS | |||
Cost of intangible assets | 566.5 | 504.7 | |
Additions | 70.5 | 66 | 36.9 |
Accumulated amortization and impairment losses | |||
INTANGIBLE ASSETS | |||
Cost of intangible assets | (973.1) | (860.2) | (804.6) |
Amortization | 104.8 | 97.9 | |
Accumulated amortization and impairment losses | Internally Generated | |||
INTANGIBLE ASSETS | |||
Cost of intangible assets | 323.3 | 283.8 | |
Amortization | $ 44.9 | $ 43.8 | $ 39.2 |
GOODWILL - Changes in the net c
GOODWILL - Changes in the net carrying amount of goodwill (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
GOODWILL | |||
Goodwill at beginning of year | $ 2,725.4 | ||
Impairment losses | 30 | $ 40.1 | $ 85 |
Goodwill at end of year | 2,695.8 | 2,725.4 | |
Cost | |||
GOODWILL | |||
Goodwill at beginning of year | 5,688.2 | 5,601.1 | |
Business acquisitions | 0.4 | 87.1 | |
Goodwill at end of year | 5,688.6 | 5,688.2 | 5,601.1 |
Accumulated amortization and impairment losses | |||
GOODWILL | |||
Goodwill at beginning of year | (2,962.8) | (2,922.7) | |
Impairment losses | 30 | 40.1 | |
Goodwill at end of year | $ (2,992.8) | $ (2,962.8) | $ (2,922.7) |
GOODWILL - Allocation of net ca
GOODWILL - Allocation of net carrying amount of goodwill in significant CGU groups (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
GOODWILL | ||
Goodwill | $ 2,695.8 | $ 2,725.4 |
Telecommunications | ||
GOODWILL | ||
Goodwill | 2,677 | 2,677 |
Magazines | ||
GOODWILL | ||
Goodwill | 30 | |
Other | ||
GOODWILL | ||
Goodwill | $ 18.8 | $ 18.4 |
GOODWILL - Determination of rec
GOODWILL - Determination of recoverable amounts in the impairment tests performed in significant CGU groups (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Minimum | ||
GOODWILL | ||
Duration of perpetual growth rate used for cash flows in strategic plan | 3 years | |
Telecommunications | ||
GOODWILL | ||
Pre-tax discount rate (WACC) | 8.50% | 8.50% |
Perpetual growth rate | 2.50% | 2.50% |
Magazines | ||
GOODWILL | ||
Pre-tax discount rate (WACC) | 15.50% | 15.50% |
Perpetual growth rate | (2.00%) | (1.00%) |
Other | Minimum | ||
GOODWILL | ||
Pre-tax discount rate (WACC) | 12.00% | 12.00% |
Perpetual growth rate | 0.00% | 0.00% |
Other | Maximum | ||
GOODWILL | ||
Pre-tax discount rate (WACC) | 16.50% | 16.50% |
Perpetual growth rate | 2.00% | 2.00% |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
OTHER ASSETS | ||
Programs, broadcast and distribution rights | $ 43.1 | $ 44.7 |
Deferred connection costs | 10.4 | 13.5 |
Other | 44.1 | 33.5 |
Total other assets | $ 97.6 | $ 91.7 |
ACCOUNTS PAYABLE AND ACCRUED103
ACCOUNTS PAYABLE AND ACCRUED CHARGES (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
ACCOUNTS PAYABLE AND ACCRUED CHARGES | ||
Trade and accruals | $ 512.2 | $ 492.6 |
Salaries and employee benefits | 144 | 137.3 |
Interest payable | 49.6 | 43.8 |
Current portion of stock-based compensation | 19.8 | 17.2 |
Total accounts payable and accrued charges | $ 725.6 | $ 690.9 |
PROVISIONS AND CONTINGENCIES -
PROVISIONS AND CONTINGENCIES - Roll forward (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017CAD ($) | |
Reconciliation of changes in provisions | |
Balance at the beginning of the period | $ 85.5 |
Recognized in income | 1.4 |
Payments | (42.7) |
Other | 0.5 |
Balance at the end of the period | 44.7 |
Contingencies, legal disputes and other | |
Reconciliation of changes in provisions | |
Balance at the beginning of the period | 82 |
Recognized in income | (15.8) |
Payments | (27.9) |
Other | 0.5 |
Balance at the end of the period | 38.8 |
Restructuring of operations | |
Reconciliation of changes in provisions | |
Balance at the beginning of the period | 3.5 |
Recognized in income | 17.2 |
Payments | (14.8) |
Balance at the end of the period | $ 5.9 |
PROVISIONS AND CONTINGENCIES105
PROVISIONS AND CONTINGENCIES - Current and non-current (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Total provisions | ||
Total other provisions | $ 44.7 | $ 85.5 |
Current portion | 25.4 | 69.3 |
Non-current portion (included in "Other Liabilities") | 19.3 | |
Contingencies, legal disputes and other | ||
Total provisions | ||
Total other provisions | 38.8 | 82 |
Current portion | 21.4 | |
Non-current portion (included in "Other Liabilities") | 17.4 | |
Restructuring of operations | ||
Total provisions | ||
Total other provisions | 5.9 | $ 3.5 |
Current portion | 4 | |
Non-current portion (included in "Other Liabilities") | $ 1.9 |
LONG-TERM DEBT - Breakdown of l
LONG-TERM DEBT - Breakdown of long-term debt (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Total long-term debt | $ 5,346.7 | $ 5,669.9 |
Change in fair value related to hedged interest rate risk | 5.8 | 8.4 |
Adjustments related to embedded derivatives | 0.6 | |
Financing fees, net of amortization | (40.8) | (40.8) |
Total adjustments for long-term debt | (35) | (31.8) |
Total long-term debt, current and non current | 5,311.7 | 5,638.1 |
Less current portion | (19.1) | (20.9) |
Long-term debt | 5,292.6 | 5,617.2 |
Quebecor Media | ||
Long-term debt | ||
Total long-term debt | $ 1,988.9 | 2,419.7 |
Quebecor Media | Bank credit facilities | ||
Long-term debt | ||
Effective interest rate (as a percent) | 3.66% | |
Total long-term debt | $ 420.4 | 453.4 |
Quebecor Media | Senior Notes | ||
Long-term debt | ||
Total long-term debt | 1,568.5 | 1,966.3 |
Videotron | ||
Long-term debt | ||
Total long-term debt | $ 3,294.6 | 3,180.3 |
Videotron | Bank credit facilities | ||
Long-term debt | ||
Effective interest rate (as a percent) | 2.95% | |
Total long-term debt | $ 5.4 | 225.5 |
Videotron | Senior Notes | ||
Long-term debt | ||
Total long-term debt | $ 3,289.2 | 2,954.8 |
TVA Group | Bank credit facilities | ||
Long-term debt | ||
Effective interest rate (as a percent) | 3.00% | |
Total long-term debt | $ 62.9 | 69.6 |
Other | ||
Long-term debt | ||
Total long-term debt | $ 0.3 | $ 0.3 |
LONG-TERM DEBT - Bank credit fa
LONG-TERM DEBT - Bank credit facilities (Details) $ in Millions, $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) |
Long-term debt | |||
Long-term debt | $ 5,346.7 | $ 5,669.9 | |
Assets carrying value | 9,644.9 | 9,217.4 | |
Amount outstanding | 5,311.7 | 5,638.1 | |
Quebecor Media | |||
Long-term debt | |||
Long-term debt | $ 1,988.9 | 2,419.7 | |
Quebecor Media | Secured term loan "B" facility maturing in August 2020 | |||
Long-term debt | |||
Long-term debt | $ 350 | ||
Quarterly amortization payments (as a percent) | 1.00% | 1.00% | |
Quebecor Media | Secured term loan "B" facility maturing in August 2020 | LIBOR floor | |||
Long-term debt | |||
Interest rate premium (as a percent) | 2.25% | 2.25% | |
Quebecor Media | Secured revolving credit facility | |||
Long-term debt | |||
Amount outstanding | $ 0 | 0 | |
Quebecor Media | Secured revolving credit facility maturing in July 2020 | |||
Long-term debt | |||
Maximum borrowing capacity | 300 | ||
Quebecor Media | Secured term loan "B" maturing in August 2020 | |||
Long-term debt | |||
Amount outstanding | 420.4 | 453.4 | |
Quebecor Media | Bank credit facilities | |||
Long-term debt | |||
Long-term debt | 420.4 | 453.4 | |
Assets carrying value | 3,045.4 | 3,123.2 | |
Videotron | |||
Long-term debt | |||
Long-term debt | 3,294.6 | 3,180.3 | |
Videotron | Secured revolving credit facility | |||
Long-term debt | |||
Amount outstanding | 0 | 209.4 | |
Videotron | Secured revolving credit facility maturing in July 2021 | |||
Long-term debt | |||
Maximum borrowing capacity | 965 | ||
Videotron | Bank credit facilities | |||
Long-term debt | |||
Long-term debt | 5.4 | 225.5 | |
Assets carrying value | 6,665.7 | 5,804.3 | |
Videotron | Secured export financing facility maturing in June 2018 | |||
Long-term debt | |||
Maximum borrowing capacity | 75 | ||
Amount outstanding | 5.4 | 16.1 | |
TVA Group | Secured revolving credit facility | |||
Long-term debt | |||
Amount outstanding | 0 | 0 | |
TVA Group | Secured revolving credit facility maturing in February 2019 | |||
Long-term debt | |||
Maximum borrowing capacity | 150 | ||
TVA Group | Bank credit facilities | |||
Long-term debt | |||
Long-term debt | 62.9 | 69.6 | |
TVA Group | Secured term loan maturing in November 2019 | |||
Long-term debt | |||
Long-term debt | 75 | ||
Amount outstanding | $ 62.9 | $ 69.6 |
LONG-TERM DEBT - Senior Notes (
LONG-TERM DEBT - Senior Notes (Details) $ in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2015CAD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017CAD ($) | |
Long-term debt | |||||
Senior notes redeemable period by issuer | 5 years | ||||
Net proceeds from issuance of senior notes | $ 794.5 | $ 370.1 | |||
Financing fees | 283.4 | $ 302.9 | $ 309.2 | ||
Quebecor Media | Senior Notes 5.750% due January 2023 | |||||
Long-term debt | |||||
Principal amount | $ 850 | ||||
Interest rate (as a percent) | 5.75% | 5.75% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 5.75% | 5.75% | |||
Quebecor Media | Senior Notes 6.625% due January 2023 | |||||
Long-term debt | |||||
Principal amount | $ 500 | ||||
Interest rate (as a percent) | 6.625% | 6.625% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 6.625% | 6.625% | |||
Videotron | Senior Notes 5.000% due July 2022 | |||||
Long-term debt | |||||
Principal amount | $ 800 | ||||
Interest rate (as a percent) | 5.00% | 5.00% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 5.00% | 5.00% | |||
Videotron | Senior Notes 5.375% due June 2024 | |||||
Long-term debt | |||||
Principal amount | $ 600 | ||||
Interest rate (as a percent) | 5.375% | 5.375% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 5.375% | 5.375% | |||
Videotron | Senior Notes 5.625% due June 2025 | |||||
Long-term debt | |||||
Principal amount | $ 400 | ||||
Interest rate (as a percent) | 5.625% | 5.625% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 5.625% | 5.625% | |||
Videotron | Senior Notes 5.750% due January 2026 | |||||
Long-term debt | |||||
Principal amount | $ 375 | ||||
Interest rate (as a percent) | 5.75% | 5.75% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 5.75% | 5.75% | |||
Net proceeds from issuance of senior notes | 370.1 | ||||
Financing fees | 4.9 | ||||
Videotron | Senior Notes 5.125% due April 2027 | |||||
Long-term debt | |||||
Principal amount | $ 600 | ||||
Interest rate (as a percent) | 5.125% | 5.125% | |||
Effective interest rate (after discount or premium at issuance) (as a percent) | 5.125% | 5.125% | |||
Net proceeds from issuance of senior notes | 794.5 | ||||
Financing fees | $ 9.9 |
LONG-TERM DEBT - Principal repa
LONG-TERM DEBT - Principal repayments of long-term debt (Details) $ in Millions | Dec. 31, 2017CAD ($) |
2018 (less than one year) | |
Principal repayments of long-term debt | |
Principal repayments | $ 19.1 |
2,019 | |
Principal repayments of long-term debt | |
Principal repayments | 56.6 |
2,020 | |
Principal repayments of long-term debt | |
Principal repayments | 413.2 |
2,022 | |
Principal repayments of long-term debt | |
Principal repayments | 1,005.7 |
2023 and thereafter | |
Principal repayments of long-term debt | |
Principal repayments | $ 3,852.1 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
OTHER LIABILITIES | ||
Defined benefit plans | $ 136.9 | $ 132.6 |
Deferred revenue | 17.4 | 20.7 |
Stock-based compensation | 8.3 | 12.1 |
Other | 32.4 | 37.4 |
Total other liabilities | 195 | 202.8 |
Current portion of stock-based compensation | $ 19.8 | $ 17.2 |
CAPITAL STOCK - Authorized capi
CAPITAL STOCK - Authorized capital stock (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Preferred A Shares | |
CAPITAL STOCK | |
Annual fixed cumulative preferential dividend (as a percent) | 12.50% |
Preferred C Shares | |
CAPITAL STOCK | |
Annual fixed cumulative preferential dividend (as a percent) | 11.25% |
Preferred D Shares | |
CAPITAL STOCK | |
Annual fixed cumulative preferential dividend (as a percent) | 11.00% |
Preferred F Shares | |
CAPITAL STOCK | |
Annual fixed cumulative preferential dividend (as a percent) | 10.85% |
Preferred G Shares | |
CAPITAL STOCK | |
Annual fixed cumulative preferential dividend (as a percent) | 10.85% |
CAPITAL STOCK - Issued and outs
CAPITAL STOCK - Issued and outstanding capital stock (Details) - CAD ($) $ in Millions | Jul. 06, 2017 | Sep. 09, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Issued and outstanding capital stock | |||||
Balance at beginning of the year | $ 3,701.4 | ||||
Reduction of paid-up capital | (50) | $ (100) | $ (25) | ||
Redemption | (43.9) | (500.2) | |||
Balance at end of the year | 3,630.8 | 3,701.4 | |||
Aggregate purchase price of shares repurchased | 43.9 | 500.2 | |||
Capital stock | |||||
Issued and outstanding capital stock | |||||
Balance at beginning of the year | $ 3,701.4 | $ 3,801.4 | |||
Balance at beginning of the year (in shares) | 95,983,176 | 95,983,176 | |||
Reduction of paid-up capital | $ (50) | $ (100) | (25) | ||
Redemption | $ (20.6) | (289.7) | |||
Redemption (in shares) | (541,899) | ||||
Balance at end of the year | $ 3,630.8 | $ 3,701.4 | $ 3,801.4 | ||
Balance at end of the year (in shares) | 95,441,277 | 95,983,176 | 95,983,176 | ||
Capital stock | CDP Capital | |||||
Issued and outstanding capital stock | |||||
Redemption (in shares) | (541,899) | (7,268,324) | |||
Aggregate purchase price of shares repurchased | $ 37.7 | $ 500 | |||
Security paid | 6.2 | ||||
Transaction fees | 0.2 | ||||
Excess of purchase price over common shares repurchased | $ 23.3 | $ 210.3 |
CAPITAL STOCK - Cumulative firs
CAPITAL STOCK - Cumulative first preferred shares (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cumulative First Preferred Shares | |||
Outstanding amount | $ 3,630.8 | $ 3,701.4 | |
Preferred G Shares | |||
Cumulative First Preferred Shares | |||
Number of shares issued | 430,000 | ||
Number of shares outstanding | 430,000 | ||
Outstanding amount | $ 430 |
STOCK-BASED COMPENSATION PLA114
STOCK-BASED COMPENSATION PLANS - Quebecor stock option plan (Details) | 12 Months Ended | |
Dec. 31, 2017shares | Nov. 08, 2017 | |
STOCK-BASED COMPENSATION PLANS | ||
Stock split ratio | 2 | |
Quebecor Stock option plan | ||
STOCK-BASED COMPENSATION PLANS | ||
Exercisable period | 10 years | |
Quebecor Stock option plan | One year | ||
STOCK-BASED COMPENSATION PLANS | ||
Percentage of stock options vested | 33.33% | |
Vesting period of share based awards (in years) | 1 year | |
Quebecor Stock option plan | Two years | ||
STOCK-BASED COMPENSATION PLANS | ||
Percentage of stock options vested | 66.67% | |
Vesting period of share based awards (in years) | 2 years | |
Quebecor Stock option plan | Three years | ||
STOCK-BASED COMPENSATION PLANS | ||
Percentage of stock options vested | 100.00% | |
Vesting period of share based awards (in years) | 3 years | |
Class B | Quebecor Stock option plan | ||
STOCK-BASED COMPENSATION PLANS | ||
Number of shares authorized to issue under stock-based compensation plans | 26,000,000 |
STOCK-BASED COMPENSATION PLA115
STOCK-BASED COMPENSATION PLANS - Quebecor outstanding and exercise price range of options (Details) - Quebecor Stock option plan | 12 Months Ended | |
Dec. 31, 2017CAD ($)OptionY | Dec. 31, 2016CAD ($)Option | |
STOCK-BASED COMPENSATION PLANS | ||
Balance at beginning of year (in shares) | Option | 1,360,000 | 1,360,000 |
Exercised (in shares) | Option | (630,000) | |
Cancelled (in shares) | Option | (290,000) | |
Balance at end of year (in shares) | Option | 440,000 | 1,360,000 |
Balance at beginning of year (in dollars per share) | $ 12.69 | $ 12.69 |
Exercised (in dollars per share) | 12.82 | |
Cancelled (in dollars per share) | 12.97 | |
Balance at end of year (in dollars per share) | $ 12.31 | $ 12.69 |
Vested options at end of year (in shares) | Option | 376,666 | 263,332 |
Weighted average exercise price of vested options | $ 12.04 | $ 11.78 |
Cash consideration on stock options exercised | $ 4,700,000 | $ 0 |
Weighted average years to maturity | Y | 5.88 | |
Minimum | ||
STOCK-BASED COMPENSATION PLANS | ||
Balance at end of year (in dollars per share) | $ 11.11 | |
Weighted average exercise price of vested options | 11.11 | |
Maximum | ||
STOCK-BASED COMPENSATION PLANS | ||
Balance at end of year (in dollars per share) | 15.12 | |
Weighted average exercise price of vested options | $ 15.12 |
STOCK-BASED COMPENSATION PLA116
STOCK-BASED COMPENSATION PLANS - Quebecor mid-term stock-based plan (Details) - Quebecor Mid-term stock-based compensation plan | 12 Months Ended | |
Dec. 31, 2017CAD ($)EquityInstruments | Dec. 31, 2016CAD ($)EquityInstruments | |
STOCK-BASED COMPENSATION PLANS | ||
Beginning balance (in shares) | EquityInstruments | 1,427,624 | 1,476,346 |
Exercised (in shares) | EquityInstruments | (1,140,941) | (48,722) |
Cancelled (in shares) | EquityInstruments | (193,073) | |
Ending balance (in shares) | EquityInstruments | 93,610 | 1,427,624 |
Beginning balance (in dollars per share) | $ 14.46 | $ 14.34 |
Exercised (in dollars per share) | 14.12 | 10.89 |
Cancelled (in dollars per share) | 15.81 | |
Ending balance (in dollars per share) | 15.81 | 14.46 |
Cash consideration on stock options exercised | $ 4,900,000 | $ 300,000 |
STOCK-BASED COMPENSATION PLA117
STOCK-BASED COMPENSATION PLANS - Quebecor deferred share unit plan (Details) - Quebecor Deferred Share Unit Plan - EquityInstruments | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
STOCK-BASED COMPENSATION PLANS | ||
Number of units outstanding | 89,397 | 90,036 |
Minimum | ||
STOCK-BASED COMPENSATION PLANS | ||
Percent of total annual fee payable to director for receive of share based compensation | 50.00% | |
Maximum | ||
STOCK-BASED COMPENSATION PLANS | ||
Percent of total annual fee payable to director for receive of share based compensation | 100.00% |
STOCK-BASED COMPENSATION PLA118
STOCK-BASED COMPENSATION PLANS - Quebecor Media stock option plan (Details) - Quebecor Media stock option plan | 12 Months Ended |
Dec. 31, 2017shares | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares authorized to issue under stock-based compensation plans | 6,180,140 |
Vesting period of share based awards (in years) | 5 years |
Maximum | |
STOCK-BASED COMPENSATION PLANS | |
Term of an option | 10 years |
Stock option plan - first anniversary | |
STOCK-BASED COMPENSATION PLANS | |
Vesting period of share based awards (in years) | 5 years |
Annual vesting percent of share based awards | 20.00% |
Stock option plan - second anniversary | |
STOCK-BASED COMPENSATION PLANS | |
Vesting period of share based awards (in years) | 4 years |
Annual vesting percent of share based awards | 25.00% |
Stock option plan - third anniversary | |
STOCK-BASED COMPENSATION PLANS | |
Vesting period of share based awards (in years) | 3 years |
Annual vesting percent of share based awards | 33.33% |
STOCK-BASED COMPENSATION PLA119
STOCK-BASED COMPENSATION PLANS - Quebecor Media outstanding options (Details) - Quebecor Media stock option plan | 12 Months Ended | |
Dec. 31, 2017CAD ($)Option | Dec. 31, 2016CAD ($)Option | |
STOCK-BASED COMPENSATION PLANS | ||
Balance at beginning of year (in shares) | Option | 980,905 | 1,482,494 |
Exercised (in shares) | Option | (215,978) | (399,689) |
Cancelled (in shares) | Option | (169,100) | (101,900) |
Balance at end of year (in shares) | Option | 595,827 | 980,905 |
Vested options at end of year (in shares) | Option | 226,200 | 163,550 |
Balance at beginning of year (in dollars per share) | $ 61.71 | $ 60.44 |
Exercised (in dollars per share) | 59.40 | 56.48 |
Cancelled (in dollars per share) | 60.65 | 63.79 |
Balance at end of year (in dollars per share) | 62.84 | 61.71 |
Vested options at end of year (in dollars per share) | 58.78 | 54.90 |
Cash consideration on stock options exercised | $ 5,500,000 | $ 6,500,000 |
STOCK-BASED COMPENSATION PLA120
STOCK-BASED COMPENSATION PLANS - Quebecor Media exercise price range of options (Details) - Quebecor Media stock option plan | Dec. 31, 2017CAD ($)OptionY | Dec. 31, 2016CAD ($)Option | Dec. 31, 2015CAD ($)Option |
Range of exercise price | |||
Number of shares outstanding | Option | 595,827 | 980,905 | 1,482,494 |
Weighted average exercise price of outstanding options | $ 62.84 | $ 61.71 | $ 60.44 |
Number of vested options | Option | 226,200 | 163,550 | |
Weighted average exercise price of vested options | $ 58.78 | $ 54.90 | |
$37.91 to 53.40 | |||
Range of exercise price | |||
Number of shares outstanding | Option | 55,200 | ||
Weighted average years to maturity | Y | 2.85 | ||
Weighted average exercise price of outstanding options | $ 45.69 | ||
Number of vested options | Option | 55,200 | ||
Weighted average exercise price of vested options | $ 45.69 | ||
$37.91 to 53.40 | Minimum | |||
Range of exercise price | |||
Weighted average exercise price of outstanding options | 37.91 | ||
$37.91 to 53.40 | Maximum | |||
Range of exercise price | |||
Weighted average exercise price of outstanding options | $ 53.40 | ||
$57.35 to 70.56 | |||
Range of exercise price | |||
Number of shares outstanding | Option | 540,627 | ||
Weighted average years to maturity | Y | 6.46 | ||
Weighted average exercise price of outstanding options | $ 64.60 | ||
Number of vested options | Option | 171,000 | ||
Weighted average exercise price of vested options | $ 63.01 | ||
$57.35 to 70.56 | Minimum | |||
Range of exercise price | |||
Weighted average exercise price of outstanding options | 57.35 | ||
$57.35 to 70.56 | Maximum | |||
Range of exercise price | |||
Weighted average exercise price of outstanding options | $ 70.56 | ||
$37.91 to 70.56 | |||
Range of exercise price | |||
Number of shares outstanding | Option | 595,827 | ||
Weighted average years to maturity | Y | 6.13 | ||
Weighted average exercise price of outstanding options | $ 62.84 | ||
Number of vested options | Option | 226,200 | ||
Weighted average exercise price of vested options | $ 58.78 | ||
$37.91 to 70.56 | Minimum | |||
Range of exercise price | |||
Weighted average exercise price of outstanding options | 37.91 | ||
$37.91 to 70.56 | Maximum | |||
Range of exercise price | |||
Weighted average exercise price of outstanding options | $ 70.56 |
STOCK-BASED COMPENSATION PLA121
STOCK-BASED COMPENSATION PLANS - TVA Group stock option plan (Details) - TVA Group stock option plan | 12 Months Ended |
Dec. 31, 2017shares | |
Stock option plan - first anniversary | |
STOCK-BASED COMPENSATION PLANS | |
Vesting period of share based awards (in years) | 5 years |
Annual vesting percent of share based awards | 20.00% |
Stock option plan - second anniversary | |
STOCK-BASED COMPENSATION PLANS | |
Vesting period of share based awards (in years) | 4 years |
Annual vesting percent of share based awards | 25.00% |
Stock option plan - third anniversary | |
STOCK-BASED COMPENSATION PLANS | |
Vesting period of share based awards (in years) | 3 years |
Annual vesting percent of share based awards | 33.33% |
Maximum | |
STOCK-BASED COMPENSATION PLANS | |
Term of an option | 10 years |
Class B | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares authorized to issue under stock-based compensation plans | 2,200,000 |
STOCK-BASED COMPENSATION PLA122
STOCK-BASED COMPENSATION PLANS - TVA Group outstanding options (Details) - TVA Group stock option plan | 12 Months Ended | |
Dec. 31, 2017CAD ($)OptionY | Dec. 31, 2016CAD ($)Option | |
STOCK-BASED COMPENSATION PLANS | ||
Balance at beginning of year (in shares) | Option | 357,632 | 463,371 |
Cancelled (in shares) | Option | (134,915) | |
Expired (in shares) | Option | (162,717) | (105,739) |
Balance at end of year (in shares) | Option | 60,000 | 357,632 |
Vested options at end of year (in shares) | Option | 24,000 | 283,632 |
Balance at beginning of year (in dollars per share) | $ | $ 12.71 | $ 13.30 |
Cancelled (in dollars per share) | $ | 12.86 | |
Expired (in dollars per share) | $ | 14.75 | 15.29 |
Balance at end of year (in dollars per share) | $ | 6.85 | 12.71 |
Vested options at end of year (in dollars per share) | $ | $ 6.85 | $ 14.11 |
Weighted average years to maturity | Y | 7.09 |
STOCK-BASED COMPENSATION PLA123
STOCK-BASED COMPENSATION PLANS - Deferred share unit and performance share unit plans (Details) - Option | Jul. 13, 2016 | Jul. 10, 2016 | Dec. 31, 2017 |
Quebecor deferred share unit plan, employees | |||
STOCK-BASED COMPENSATION PLANS | |||
Vesting life of share based awards | 6 years | ||
Beginning balance (in shares) | 128,942 | ||
Granted (in shares) | 128,710 | ||
Exercised (in shares) | (6,546) | ||
Cancelled (in shares) | (29,564) | ||
Ending balance (in shares) | 221,542 | ||
Quebecor performance shares, employees | |||
STOCK-BASED COMPENSATION PLANS | |||
Vesting life of share based awards | 3 years | ||
Beginning balance (in shares) | 162,150 | ||
Granted (in shares) | 163,232 | ||
Exercised (in shares) | (7,890) | ||
Cancelled (in shares) | (37,268) | ||
Ending balance (in shares) | 280,224 | ||
TVA group deferred share unit plan, employees | |||
STOCK-BASED COMPENSATION PLANS | |||
Vesting life of share based awards | 6 years | ||
Beginning balance (in shares) | 191,322 | ||
Granted (in shares) | 134,484 | ||
Exercised (in shares) | (16,018) | ||
Cancelled (in shares) | (61,541) | ||
Ending balance (in shares) | 248,247 | ||
TVA group performance shares, employees | |||
STOCK-BASED COMPENSATION PLANS | |||
Vesting life of share based awards | 3 years | ||
Beginning balance (in shares) | 212,671 | ||
Granted (in shares) | 147,937 | ||
Cancelled (in shares) | (89,971) | ||
Ending balance (in shares) | 270,637 |
STOCK-BASED COMPENSATION PLA124
STOCK-BASED COMPENSATION PLANS - Assumptions in estimating the fair value of awards (Details) - Y | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Quebecor Stock option plan | ||
STOCK-BASED COMPENSATION PLANS | ||
Risk-free interest rate | 1.83% | 1.25% |
Distribution yield | 0.46% | 0.48% |
Expected volatility (as a percent) | 17.58% | 19.27% |
Expected remaining life | 2.4 | 4 |
Quebecor Media stock option plan | ||
STOCK-BASED COMPENSATION PLANS | ||
Risk-free interest rate | 1.80% | 1.10% |
Distribution yield | 1.12% | 1.33% |
Expected volatility (as a percent) | 16.70% | 18.93% |
Expected remaining life | 2.3 | 3 |
TVA Group stock option plan | ||
STOCK-BASED COMPENSATION PLANS | ||
Risk-free interest rate | 1.97% | 0.91% |
Expected volatility (as a percent) | 50.78% | 35.48% |
Expected remaining life | 3.6 | 1.9 |
STOCK-BASED COMPENSATION PLA125
STOCK-BASED COMPENSATION PLANS - Liability and expense (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
STOCK-BASED COMPENSATION PLANS | |||
Liability for all vested options under intrinsic value | $ 12.2 | $ 5.7 | |
Consolidated charge related to stock-based compensation | $ 15.4 | $ 16.3 | $ 6.5 |
ACCUMULATED OTHER COMPREHENS126
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |||
Equity at beginning of period | $ 1,681.2 | $ 1,432.8 | $ 1,885.3 |
Other comprehensive income (loss) | 69.4 | 9.2 | (52.4) |
Equity at end of period | 2,342.1 | 1,681.2 | 1,432.8 |
Accumulated other comprehensive loss | |||
ACCUMULATED OTHER COMPREHENSIVE LOSS | |||
Equity at beginning of period | (129.5) | (136) | (84.6) |
Other comprehensive income (loss) | 69.1 | 6.5 | (51.4) |
Equity at end of period | (60.4) | (129.5) | (136) |
Cash flow hedges | |||
ACCUMULATED OTHER COMPREHENSIVE LOSS | |||
Equity at beginning of period | (86.2) | (71.1) | (39.4) |
Other comprehensive income (loss) | 71.7 | (15.1) | (31.7) |
Equity at end of period | $ (14.5) | (86.2) | (71.1) |
Expected reversal period | 9 years 3 months | ||
Defined benefit plans | |||
ACCUMULATED OTHER COMPREHENSIVE LOSS | |||
Equity at beginning of period | $ (43.3) | (64.9) | (45.2) |
Other comprehensive income (loss) | (2.6) | 21.6 | (19.7) |
Equity at end of period | $ (45.9) | $ (43.3) | $ (64.9) |
COMMITMENTS (Details)
COMMITMENTS (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
COMMITMENTS | |||
Minimum future rent payments to the parent | $ 52.8 | ||
Operating lease expenses | 68.1 | $ 67.1 | $ 71.2 |
Discontinued operations | |||
COMMITMENTS | |||
Operating lease expenses | $ 6 | ||
Leases | 2018 (less than one year) | |||
COMMITMENTS | |||
Minimum payments | 51.9 | ||
Leases | 2019 to 2022 | |||
COMMITMENTS | |||
Minimum payments | 96.1 | ||
Leases | 2023 and thereafter | |||
COMMITMENTS | |||
Minimum payments | 103.3 | ||
Other commitments | 2018 (less than one year) | |||
COMMITMENTS | |||
Minimum payments | 228.2 | ||
Other commitments | 2019 to 2022 | |||
COMMITMENTS | |||
Minimum payments | 600 | ||
Other commitments | 2023 and thereafter | |||
COMMITMENTS | |||
Minimum payments | $ 543.1 |
GUARANTEES (Details)
GUARANTEES (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
GUARANTEES | ||
Maximum exposure with respect to operating lease guarantees | $ 20.5 | |
Guarantees |
FINANCIAL INSTRUMENTS AND FI129
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Description of derivative financial instruments (Details) - 12 months ended Dec. 31, 2017 $ in Millions, $ in Millions | CAD ($)$ / $ | USD ($) |
Videotron | Foreign exchange forward contracts | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 1.2936 | |
Notional amount sold | $ 151.4 | |
Notional amount | $ 117 | |
5.750% Senior Notes due 2023 | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 0.9792 | |
Notional amount | $ 431.3 | |
Effective interest rate (as a percent) | 5.75% | |
Annual interest rate on notional amount (as a percent) | 7.27% | |
5.750% Senior Notes due 2023 | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 0.9759 | |
Notional amount | $ 418.7 | |
Effective interest rate (as a percent) | 5.75% | |
Annual interest rate on notional amount (as a percent) | 6.85% | |
Term loan "B" | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 1.0346 | |
Notional amount | $ 335.1 | |
Annual interest rate on notional amount, interest rate basis | Bankers' acceptance 3 months | |
Annual interest rate on notional amount, adjustment to interest rate basis (as a percent) | 2.77% | |
5.000% Senior Notes due 2022 | Videotron | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 0.9983 | |
Notional amount | $ 543.1 | |
Effective interest rate (as a percent) | 5.00% | |
Annual interest rate on notional amount (as a percent) | 6.01% | |
5.000% Senior Notes due 2022 | Videotron | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 1.0016 | |
Notional amount | $ 256.9 | |
Effective interest rate (as a percent) | 5.00% | |
Annual interest rate on notional amount (as a percent) | 5.81% | |
5.375% Senior Notes due 2024 | Videotron | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 1.1034 | |
Notional amount | $ 158.6 | |
Effective interest rate (as a percent) | 5.375% | |
Annual interest rate on notional amount, interest rate basis | Bankers' acceptance 3 months | |
Annual interest rate on notional amount, adjustment to interest rate basis (as a percent) | 2.67% | |
5.375% Senior Notes due 2024 | Videotron | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 1.1039 | |
Notional amount | $ 441.4 | |
Effective interest rate (as a percent) | 5.375% | |
Annual interest rate on notional amount (as a percent) | 5.62% | |
5.125% Senior Notes due 2024 | Videotron | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Average exchange rate | $ / $ | 1.3407 | |
Notional amount | $ 600 | |
Effective interest rate (as a percent) | 5.125% | |
Annual interest rate on notional amount (as a percent) | 4.82% |
FINANCIAL INSTRUMENTS AND FI130
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Carrying value and fair value of financial assets (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying value | Early settlement options | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Asset | $ 0.4 | |
Carrying value | Foreign exchange forward contracts | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Asset | 2.5 | |
Carrying value | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Asset | $ 562.2 | 806.5 |
Fair value | Early settlement options | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Asset | 0.4 | |
Fair value | Foreign exchange forward contracts | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Asset | 2.5 | |
Fair value | Cross-currency interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Asset | $ 562.2 | $ 806.5 |
FINANCIAL INSTRUMENTS AND FI131
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Carrying value and fair value of financial liabilities (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying value | Long-term debt | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Liability | $ (5,346.7) | $ (5,669.9) |
Carrying value | Foreign exchange forward contracts | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Liability | (4.5) | |
Carrying value | Interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Liability | (0.3) | |
Fair value | Long-term debt | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Liability | (5,658) | (5,835.5) |
Fair value | Foreign exchange forward contracts | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Liability | $ (4.5) | |
Fair value | Interest rate swaps | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Liability | $ (0.3) |
FINANCIAL INSTRUMENTS AND FI132
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Fair value of derivative financial instruments designated as hedges (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Fair value of derivative financial instruments designated as hedges | $ 557.7 | $ 808.7 |
FINANCIAL INSTRUMENTS AND FI133
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Credit risk management (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes to the allowance for doubtful accounts | ||
Balance at beginning of year | $ 28.1 | $ 23 |
Charged to income | 21.6 | 36.1 |
Utilization | (28.6) | (31) |
Balance at end of year | $ 21.1 | $ 28.1 |
90 days past due | Credit risk management | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Trade receivables past due (as a percent) | 11.30% | 13.00% |
Trade receivables past due which had an established allowance for doubtful accounts (as a percent) | 31.10% | 32.50% |
FINANCIAL INSTRUMENTS AND FI134
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Liquidity risk management (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Accounts payable and accrued charges | $ 725.6 | |
Long-term debt | 5,346.7 | |
Interest payments | 1,647.4 | |
Derivative financial instruments | (552.7) | |
Total | $ 7,167 | |
Liquidity risk management | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Weighted average term of the Corporation's consolidated debt | 6 years 1 month 6 days | 6 years 1 month 6 days |
2018 (less than one year) | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Accounts payable and accrued charges | $ 725.6 | |
Long-term debt | 19.1 | |
Interest payments | 225.6 | |
Derivative financial instruments | 0.6 | |
Total | 970.9 | |
1-3 years | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Long-term debt | 469.8 | |
Interest payments | 543.3 | |
Derivative financial instruments | (71) | |
Total | 942.1 | |
3-5 years | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Long-term debt | 1,005.7 | |
Interest payments | 512.5 | |
Derivative financial instruments | (203) | |
Total | 1,315.2 | |
2023 and thereafter | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Long-term debt | 3,852.1 | |
Interest payments | 366 | |
Derivative financial instruments | (279.3) | |
Total | $ 3,938.8 |
FINANCIAL INSTRUMENTS AND FI135
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Market risk (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Increase of $0.10 | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Income | $ 1.6 | |
Other comprehensive income | 40.4 | |
Decrease of $0.10 | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Income | (1.6) | |
Other comprehensive income | (40.4) | |
Variance of $0.10 in the foreign currency exchange rate | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Unhedged purchase of goods and services | 3.2 | |
Unhedged acquisitions of tangible and intangible assets | $ 5.7 | |
Interest rate risk | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Long-term debt, fixed-rate debt (in percent) | 87.70% | 83.70% |
Long-term debt, floating-rate debt (in percent) | 12.30% | 16.30% |
Estimated sensitivity on interest payments | $ 5.9 | |
Increase of 100 basis points in discount rate | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Income | (1.4) | |
Other comprehensive income | (21.2) | |
Decrease of 100 basis points in discount rate | ||
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||
Income | 1.4 | |
Other comprehensive income | $ 21.2 |
FINANCIAL INSTRUMENTS AND FI136
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT - Capital management (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | ||||
Bank indebtedness | $ 18.9 | |||
Long-term debt | $ 5,311.7 | 5,638.1 | ||
Derivative financial instruments | (557.7) | (808.7) | ||
Cash and cash equivalents | (864.9) | (20.7) | $ (18.6) | $ (395.3) |
Net liabilities | 3,889.1 | 4,827.6 | ||
Equity | $ 2,342.1 | $ 1,681.2 | $ 1,432.8 | $ 1,885.3 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS | |||
Salaries and short-term benefits | $ 9.1 | $ 9.3 | $ 9.9 |
Share-based compensation | 5.9 | 9.3 | 4.1 |
Other long-term benefits | 8.5 | 1.3 | 1.4 |
Total compensation | 23.5 | 19.9 | 15.4 |
Purchases and rent charges included in purchase of goods and services | 9.2 | 9 | 12.3 |
Sales to an affiliated corporation | 2.8 | 3 | 3.3 |
Amount received included as reduction in employee costs | 2.2 | 2.2 | 2 |
Management fees | 2.7 | 2.6 | 2.2 |
Non-capital losses | $ 0 | 22.1 | 33.4 |
Cash consideration | 5.6 | 8.4 | |
Reduction in income tax expense | $ 0.3 | $ 0.6 |
PENSION PLANS AND POSTRETIRE138
PENSION PLANS AND POSTRETIREMENT BENEFITS - Indexation features (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | |
PENSION PLANS AND POSTRETIREMENT BENEFITS | |
Indexation features (as a percent) | 0.00% |
Maximum | |
PENSION PLANS AND POSTRETIREMENT BENEFITS | |
Indexation features (as a percent) | 2.00% |
PENSION PLANS AND POSTRETIRE139
PENSION PLANS AND POSTRETIREMENT BENEFITS - Changes in the plans benefit obligations (Details) - Present value of defined benefit - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension benefits | ||
Disclosure of net defined benefit liability (asset) | ||
Benefit obligations at the beginning of the year | $ 1,274.9 | $ 1,220.3 |
Service costs | 33.9 | 34.9 |
Interest costs | 49.8 | 49.3 |
Plan participants' contributions | 11.5 | 11.9 |
Actuarial loss (gain) arising from: | ||
Financial assumptions | 82.1 | 20.6 |
Demographic assumptions | (8.6) | |
Participant experience | 4.5 | (0.5) |
Benefits and settlements paid | (72.7) | (62.2) |
Plan transfer | (55.4) | |
Other | 0.4 | 0.6 |
Benefit obligations at the end of the year | 1,320.4 | 1,274.9 |
Postretirement benefits | ||
Disclosure of net defined benefit liability (asset) | ||
Benefit obligations at the beginning of the year | 73.4 | 69.2 |
Service costs | 1.9 | 1.8 |
Interest costs | 2.9 | 2.8 |
Actuarial loss (gain) arising from: | ||
Financial assumptions | 5.4 | 1.4 |
Participant experience | (21.2) | |
Benefits and settlements paid | (1.9) | (1.8) |
Benefit obligations at the end of the year | $ 60.5 | $ 73.4 |
PENSION PLANS AND POSTRETIRE140
PENSION PLANS AND POSTRETIREMENT BENEFITS - Changes in the fair value of plan assets (Details) - Plan assets - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of net defined benefit liability (asset) | ||
Employer contributions | $ 37.4 | |
Pension benefits | ||
Disclosure of net defined benefit liability (asset) | ||
Fair value of plan assets at the beginning of the year | 1,244.4 | $ 1,164.8 |
Actual return on plan assets | 106.5 | 98 |
Employer contributions | 35.5 | 34.2 |
Plan participants' contributions | 11.5 | 11.9 |
Administrative fees | (2.5) | (2.3) |
Benefits and settlements paid | (72.7) | (62.2) |
Plan transfer | (55.4) | |
Fair value of plan assets at the end of the year | 1,267.3 | 1,244.4 |
Postretirement benefits | ||
Disclosure of net defined benefit liability (asset) | ||
Employer contributions | 1.9 | 1.8 |
Benefits and settlements paid | $ (1.9) | $ (1.8) |
PENSION PLANS AND POSTRETIRE141
PENSION PLANS AND POSTRETIREMENT BENEFITS - Components of plan assets and reconciliation of funded status (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017CAD ($)Y | Dec. 31, 2016CAD ($)Y | |
Disclosure of net defined benefit liability (asset) | ||
Weighted average duration of defined benefit obligations | Y | 16.5 | 16.2 |
Expected future benefit payments in 2018 | $ 68.7 | |
Reconciliation of funded status to net amount recognized | ||
Recognized assets, defined benefit plan | 2.9 | $ 8.9 |
Recognized liabilities, defined benefit plans | 136.9 | 132.6 |
Pension benefits | ||
Reconciliation of funded status to net amount recognized | ||
Benefit obligations | (1,320.4) | (1,274.9) |
Fair value of plan assets | 1,267.3 | 1,244.4 |
Plan deficit | (53.1) | (30.5) |
Asset limit and minimum funding adjustment | (20.4) | (19.8) |
Net amount recognized | (73.5) | (50.3) |
Postretirement benefits | ||
Reconciliation of funded status to net amount recognized | ||
Benefit obligations | (60.5) | (73.4) |
Plan deficit | (60.5) | (73.4) |
Net amount recognized | $ (60.5) | $ (73.4) |
Plan assets | ||
Plan assets | ||
Debt securities (as a percent) | 40.80% | 41.20% |
Other (as a percent) | 3.30% | 3.30% |
Total plan assets (in percent) | 100.00% | 100.00% |
Plan assets | Canadian | ||
Plan assets | ||
Equity securities (as a percent) | 23.60% | 23.60% |
Plan assets | Foreign | ||
Plan assets | ||
Equity securities (as a percent) | 32.30% | 31.90% |
PENSION PLANS AND POSTRETIRE142
PENSION PLANS AND POSTRETIREMENT BENEFITS - Components of re-measurements (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension benefits | |||
Disclosure of net defined benefit liability (asset) | |||
Actuarial (loss) gain on benefit obligations | $ (78) | $ (20.1) | $ (25.8) |
Actual return on plan assets, less interest income anticipated in the interest on the net defined benefit liability calculation | 59.1 | 51.8 | 16.2 |
Asset limit and minimum funding adjustment | (0.1) | 2.8 | (17.3) |
Re-measurements (loss) gain recorded in other comprehensive income | (19) | 34.5 | (26.9) |
Postretirement benefits | |||
Disclosure of net defined benefit liability (asset) | |||
Actuarial (loss) gain on benefit obligations | 15.8 | (1.4) | (1.3) |
Re-measurements (loss) gain recorded in other comprehensive income | $ 15.8 | $ (1.4) | $ (1.3) |
PENSION PLANS AND POSTRETIRE143
PENSION PLANS AND POSTRETIREMENT BENEFITS - Components of the net benefit costs (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee costs: | |||
Net benefit gains, discontinued operations | $ 6 | ||
Pension benefits | |||
Employee costs: | |||
Service costs | $ 33.9 | $ 34.9 | 36.4 |
Administrative fees and other | 3 | 3 | (2.8) |
Interest on net defined benefit liability | 2.9 | 3.9 | 3 |
Net benefit costs | 39.8 | 41.8 | 36.6 |
Postretirement benefits | |||
Employee costs: | |||
Service costs | 1.9 | 1.8 | 1.7 |
Interest on net defined benefit liability | 2.9 | 2.8 | 2.4 |
Net benefit costs | $ 4.8 | $ 4.6 | $ 4.1 |
PENSION PLANS AND POSTRETIRE144
PENSION PLANS AND POSTRETIREMENT BENEFITS - Defined contribution plans (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
PENSION PLANS AND POSTRETIREMENT BENEFITS | |||
Defined contribution expense | $ 16.8 | $ 16.8 | $ 16 |
PENSION PLANS AND POSTRETIRE145
PENSION PLANS AND POSTRETIREMENT BENEFITS - Assumptions and sensitivity analysis (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017CAD ($)Y | Dec. 31, 2016CAD ($)Y | Dec. 31, 2015Y | |
Disclosure of net defined benefit liability (asset) | |||
Expected employer contributions in 2018 | $ 37.8 | ||
Benefit obligations | |||
Percentage increase of discount rate (as a percent) | 0.10% | ||
Actuarial assumption discount rate | |||
Current periodic costs | |||
Assumed average retirement age | Y | 62 | 62 | 62 |
Assumed health care cost trend rate (as a percent) | 6.50% | ||
Assumed health care cost trend rate after ten years (as a percent) | 4.50% | ||
Pension benefits | |||
Benefit obligations | |||
Decrease of retirement benefit obligation due to increase of actuarial assumption of 10 basis points in discount rate | $ 21.9 | ||
Pension benefits | Actuarial assumption discount rate | |||
Benefit obligations | |||
Discount rate, current year (as a percent) | 3.50% | 3.90% | 4.00% |
Rate of compensation increase, current year (as a percent) | 3.00% | 3.00% | 3.00% |
Current periodic costs | |||
Discount rate, preceding year (as a percent) | 3.90% | 4.00% | 4.10% |
Rate of compensation increase, preceding year (as a percent) | 3.00% | 3.00% | 3.00% |
Postretirement benefits | |||
Benefit obligations | |||
Decrease of retirement benefit obligation due to increase of actuarial assumption of 10 basis points in discount rate | $ 1.2 | ||
Postretirement benefits | Actuarial assumption discount rate | |||
Benefit obligations | |||
Discount rate, current year (as a percent) | 3.50% | 3.90% | 4.00% |
Rate of compensation increase, current year (as a percent) | 3.00% | 3.00% | 3.00% |
Current periodic costs | |||
Discount rate, preceding year (as a percent) | 3.90% | 4.00% | 4.10% |
Rate of compensation increase, preceding year (as a percent) | 3.00% | 3.00% | 3.00% |
Plan assets | |||
Disclosure of net defined benefit liability (asset) | |||
Employer contributions | $ 37.4 | ||
Plan assets | Pension benefits | |||
Disclosure of net defined benefit liability (asset) | |||
Employer contributions | 35.5 | $ 34.2 | |
Plan assets | Postretirement benefits | |||
Disclosure of net defined benefit liability (asset) | |||
Employer contributions | $ 1.9 | $ 1.8 |
DISCONTINUED OPERATIONS - Disco
DISCONTINUED OPERATIONS - Discontinued operations by year (Details) $ in Millions | Sep. 27, 2015CAD ($)store | Apr. 13, 2015CAD ($)item | Dec. 31, 2017CAD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2015CAD ($) |
DISCONTINUED OPERATIONS | |||||
Gain on discontinued operations, net of tax | $ 14.6 | $ (19.7) | |||
English-language newspaper operations | Discontinued operations | |||||
DISCONTINUED OPERATIONS | |||||
Number of printing plants sold | item | 8 | ||||
Cash consideration | $ 305.5 | ||||
Cash disposed | 1.9 | ||||
Amount related to adjustment | $ 1.3 | ||||
English-language newspaper operations | Minimum | Discontinued operations | |||||
DISCONTINUED OPERATIONS | |||||
Number of newspapers and publications sold | item | 170 | ||||
Archambault Group Inc. | Discontinued operations | |||||
DISCONTINUED OPERATIONS | |||||
Cash consideration | $ 14.5 | ||||
Cash disposed | $ 1.1 | ||||
Number of stores sold | store | 14 | ||||
Total amount received | $ 3 |
DISCONTINUED OPERATIONS - Di147
DISCONTINUED OPERATIONS - Discontinued operations statements of income and comprehensive income (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2015 | |
DISCONTINUED OPERATIONS | ||
Revenues | $ 194.1 | |
Expenses | 213.6 | |
Loss before income taxes | (19.5) | |
Income taxes | $ (2.9) | (3.4) |
Loss on disposal of businesses | (3.6) | |
Gain (loss) from discontinued operations | $ 14.6 | $ (19.7) |
DISCONTINUED OPERATIONS - Di148
DISCONTINUED OPERATIONS - Discontinued operations statements cash flows (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2015 | |
DISCONTINUED OPERATIONS | ||
Cash flows related to operating activities | $ (21.3) | |
Cash flows related to investing activities | (1.2) | |
Cash flows (used in) provided by discontinued operations | $ 11 | $ (22.5) |
NON-CONSOLIDATED FINANCIAL S149
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION - Non-consolidated condensed statements of income and comprehensive income (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Revenues | $ 4,122.4 | $ 4,016.6 | $ 3,890.8 |
Depreciation and amortization | 709.8 | 650.4 | 691 |
Financial expenses | 283.4 | 302.9 | 309.2 |
(Gain) loss on valuation and translation of financial instruments | 2.4 | 2.1 | 3.8 |
Loss on debt refinancing | 15.6 | 7.3 | 12.1 |
Income before income taxes | 854.1 | 465.7 | 311.2 |
Income taxes | 133.3 | 126.3 | 104.1 |
Net income | 735.4 | 339.4 | 187.4 |
Other comprehensive gain (loss) | 69.4 | 9.2 | (52.4) |
Comprehensive income | 804.8 | 348.6 | 135 |
Quebecor Media | |||
Revenues: | |||
Dividends | 295 | 282 | 744.1 |
Management fees | 58.8 | 59.9 | 55.9 |
Other | 49.5 | 52.4 | 52.6 |
Revenues | 403.3 | 394.3 | 852.6 |
General and administrative expenses | 123.6 | 121.7 | 111.4 |
Depreciation and amortization | 4.3 | 3.3 | 2.4 |
Financial expenses | 130.3 | 138.9 | 131.8 |
(Gain) loss on valuation and translation of financial instruments | (0.7) | 3.2 | |
Loss on debt refinancing | 10.4 | ||
Impairment and disposal of investments in subsidiaries | 73.3 | 102.8 | |
Loss on notes receivable from subsidiaries | 14.8 | ||
Other | (10.9) | 2 | 8.1 |
Income before income taxes | 146.3 | 40.3 | 492.9 |
Income taxes | 0.6 | 1.7 | 7.1 |
Net income | 145.7 | 38.6 | 485.8 |
Other comprehensive gain (loss) | 22.8 | (3.3) | (8.5) |
Comprehensive income | $ 168.5 | $ 35.3 | $ 477.3 |
NON-CONSOLIDATED FINANCIAL S150
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION - Non-consolidated and condensed statements of cash flows (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows related to operations | |||
Net income | $ 735.4 | $ 339.4 | $ 187.4 |
Depreciation and amortization | 709.8 | 650.4 | 691 |
(Gain) loss on valuation and translation of financial instruments | 2.4 | 2.1 | 3.8 |
Amortization of financing costs and long-term debt discount | 6.9 | 7 | 7.1 |
Loss on debt refinancing | 15.6 | 7.3 | 12.1 |
Deferred income taxes | 124.5 | (31.7) | 40.7 |
Other | 4 | 3.7 | 5.9 |
Net change in non-cash balances related to operations | (95.3) | 118.7 | (98.7) |
Cash flows related to investing activities | |||
Proceeds from disposal of subsidiaries | 3 | 316.3 | |
Acquisition of tax deductions from the parent corporation | (14) | ||
Other | (10.6) | 12.7 | (12.7) |
Cash flows related to financing activities | |||
Net change in bank indebtedness | (18.9) | (14.9) | 29.3 |
Net change under revolving facilities | (209.3) | (40.3) | 246.9 |
Repayments of long-term debt | (664.5) | (19) | (652.3) |
Settlement of hedging contracts | 16.6 | 0.4 | (34.3) |
Repurchase of Common Shares | (43.9) | (500.2) | |
Cash and cash equivalents at the beginning of the year | 20.7 | 18.6 | 395.3 |
Cash and cash equivalents at the end of the year | 864.9 | 20.7 | 18.6 |
Quebecor Media | |||
Cash flows related to operations | |||
Net income | 145.7 | 38.6 | 485.8 |
Depreciation and amortization | 4.3 | 3.3 | 2.4 |
(Gain) loss on valuation and translation of financial instruments | (0.7) | 3.2 | |
Amortization of financing costs and long-term debt discount | 2.4 | 2.8 | 2.7 |
Loss on debt refinancing | 10.4 | ||
Impairment and disposal of investments in subsidiaries | 73.3 | 102.8 | |
Loss on notes receivable from subsidiaries | 14.8 | ||
Deferred income taxes | 2.5 | 1.8 | 8 |
Other | 2.4 | (0.3) | 0.5 |
Net change in non-cash balances related to operations | 39.3 | 7.5 | (70.8) |
Cash flows provided by operations | 206.3 | 141.8 | 534.6 |
Cash flows related to investing activities | |||
Net change in investments in subsidiaries | (8.5) | (63.5) | (380.8) |
Proceeds from disposal of subsidiaries | 301.5 | ||
Acquisition of tax deductions from the parent corporation | (14) | ||
Other | (8.5) | 3.9 | (13.1) |
Cash flows used in continuing investing activities | (17) | (73.6) | (92.4) |
Cash flows related to financing activities | |||
Net change in bank indebtedness | (2.5) | (8.1) | 10.6 |
Net change under revolving facilities | (2.8) | 2 | |
Repayments of long-term debt | (336.7) | (3.6) | (14.3) |
Settlement of hedging contracts | (1.6) | 5.2 | 2.9 |
Repurchase of Common Shares | (43.9) | (500.2) | |
Repurchase of redeemable preferred shares issued to subsidiaries | (430) | ||
Dividends and reduction of paid-up capital | (100) | (100) | (100) |
Net change in subordinated loans from subsidiaries | 66 | (2,768) | 2,003 |
Net change in convertible obligations, subordinated loans and notes receivable - subsidiaries | 276 | 3,199 | (1,907.5) |
Net change in advances to or from subsidiaries | (15.4) | 40.1 | 0.2 |
Cash flows used in continuing financing activities | (158.1) | $ (68.2) | (503.3) |
Net change in cash and cash equivalents | 31.2 | (61.1) | |
Cash and cash equivalents at the beginning of the year | $ 61.1 | ||
Cash and cash equivalents at the end of the year | $ 31.2 |
NON-CONSOLIDATED FINANCIAL S151
NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION - Non-consolidated and condensed balance sheets (Details) - CAD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Current assets | $ 1,689.1 | $ 788.8 |
Other assets | 97.6 | 91.7 |
Total assets | 9,644.9 | 9,217.4 |
Liabilities and equity | ||
Current liabilities | 1,130.2 | 1,175.6 |
Long-term debt | 5,292.6 | 5,617.2 |
Other liabilities | 195 | 202.8 |
Equity attributable to shareholders | 2,255.8 | 1,590.4 |
Total liabilities and equity | 9,644.9 | 9,217.4 |
Quebecor Media | ||
Assets | ||
Current assets | 161.8 | 168 |
Investments in subsidiaries at cost | 2,536.4 | 2,527.9 |
Advances to subsidiaries | 35.7 | 21.5 |
Convertible obligations, subordinated loans and notes receivable - subsidiaries | 149 | 425 |
Other assets | 347.2 | 427.3 |
Total assets | 3,230.1 | 3,569.7 |
Liabilities and equity | ||
Current liabilities | 66.3 | 59.7 |
Long-term debt | 1,974.8 | 2,402 |
Advances from subsidiaries | 145.2 | 146.4 |
Other liabilities | 36.7 | 45.1 |
Subordinated loan from subsidiaries | 491 | 425 |
Equity attributable to shareholders | 516.1 | 491.5 |
Total liabilities and equity | $ 3,230.1 | $ 3,569.7 |