TRANSCONTINENTAL'S THIRD QUARTER: ALL FINANCIAL INDICATORS UP, COUPLED WITH
ORGANIC GROWTH IN REVENUES AND PROFITS
- For second consecutive quarter, positive organic growth in revenues, up
3.2% over 2009. Slight 0.8% decrease in consolidated revenues, mainly
due to asset disposals.
- Increase of 9.2% in adjusted operating income before amortization.
- Significant increase in adjusted operating income margin before
amortization, from 16.4% in 2009 to 18.0% in 2010.
- Increase of 10.3% in adjusted net income applicable to participating
shares; on a per-participating share basis, it rose from $0.39 to
$0.43.
- Increase of 14.2% in net income applicable to participating shares; on
a per-participating share basis, it rose from $0.31 to $0.35.
- In integrated offering of local solutions for communities in Canada,
launch of three weekly papers in Quebec, redesign of Publisac.ca
shopping portal and creation of Dealstreet.ca.
- In the development and marketing of mobile solutions, agreements signed
with the Toronto Transit Commission and the Société de transport de
Laval to provide a text messaging service for riders.
- Following upon the July 2009 start-up of the Fremont plant that prints
the San Francisco Chronicle, implementation of a Canada-wide hybrid
platform to print newspapers and retail flyers starting no later than
early fiscal 2011.
- For the seventh year, Corporate Knights ranks Transcontinental as one
of Canada's Best 50 Corporate Citizens for social and environmental
responsibility.
- Continued improvement in the Corporation's financial position, with a
ratio of net indebtedness (including the securitization program) to
adjusted operating income before amortization of 1.85 as at July 31,
2010, compared to 2.08 as at April 30, 2010 and 2.59 as at October 31,
2009.
</pre>
<p/>
<p><span class="xn-location">MONTREAL</span>, <span class="xn-chron">Sept. 8</span> /CNW Telbec/ - For the fifth quarter in a row, Transcontinental improved its operating income, excluding unusual items, over the previous fiscal year. All financial indicators were up, with positive growth in revenues and profits. These excellent results stem primarily from the Corporation's diversified customer base of retailers, advertisers and publishers; its leading position in each of its niches; the success of its unique service offering which combines new digital and print platforms; the rationalization measures implemented in 2009; and the important contributions from print contracts signed in recent years.</p>
<p>"I am very satisfied with the return to organic revenue growth for our second quarter in a row and the fact that all financial indicators were up in the third quarter of 2010 over the third quarter of 2009, which was, itself, higher than that of 2008," said François Olivier, President and Chief Executive Officer of Transcontinental. "It is encouraging to see that all three sectors contributed to the organic growth in revenues, even as we continued to develop our offering to accompany our customers in their new marketing needs. I'd like to thank our employees for their commitment to always serving our customers better and for their daily efforts to improve efficiency.</p>
<p>"I am optimistic about the coming quarters, even though the economic context is still unstable," said <span class="xn-person">Mr. Olivier</span>. "Our already enviable financial position should continue to improve given the dual impact of our higher operating income and, with the end of the major investments in print infrastructures, the decrease in our capital expenditures. We will thus be in an excellent position to make targeted strategic acquisitions in new media and digital technology. We will also continue to develop our offering to meet the growing demand from our customers for custom marketing programs tied in with one-to-one advertising and mobile technology. We will also continue to identify possibilities for synergies across the Corporation, notably by integrating our service offering and getting the most out of our top-performing equipment."</p>
<p>The Corporation continued to improve its financial position, with a ratio of net indebtedness (including the securitization program) to adjusted operating income before amortization of 1.85 as at <span class="xn-chron">July 31, 2010</span>, compared to 2.08 as at <span class="xn-chron">April 30, 2010</span> and 2.59 as at <span class="xn-chron">October 31, 2009</span>.</p>
<p/>
<p>Financial Highlights</p>
<p/>
<p>In the third quarter ended <span class="xn-chron">July 31, 2010</span>, Transcontinental recorded consolidated revenues of <span class="xn-money">$500.3 million</span> compared to <span class="xn-money">$504.4 million</span> in the same quarter of 2009, down 0.8%. Excluding acquisitions, divestitures or closures of plants and publications, the paper effect and the exchange rate effect, revenues grew 3.2%. This is the second quarter in a row in which Transcontinental has generated positive organic growth in revenues.</p>
<p>Adjusted operating income before amortization grew 9.2%, from <span class="xn-money">$82.6 million</span> in 2009 to <span class="xn-money">$90.2 million</span> in 2010, and operating income margin rose from 16.4% to 18.0%. This dual increase is mainly due to the impact of the rationalization measures in 2009, to the contribution from new printing contracts, and to the higher advertising spending by major retailers. During the quarter Transcontinental also recorded positive growth in adjusted operating income, which amounted to <span class="xn-money">$3.2 million</span>, up 6.0%, mainly due to the rationalization measures in 2009 and enhanced operational efficiency across the organization.</p>
<p>Net income applicable to participating shares rose 14.2%, from <span class="xn-money">$25.3 million</span> in 2009 to <span class="xn-money">$28.9 million</span> in 2010. The increase stems mainly from the higher operating income, partially offset by increased income taxes, a higher net loss related to discontinued operations, and by dividends on Preferred Shares. On a per-share basis, net income applicable to participating shares rose from <span class="xn-money">$0.31 to $0.35</span>.</p>
<p>Adjusted net income applicable to participating shares was up 8.2%, from <span class="xn-money">$31.8 million</span> in 2009 to <span class="xn-money">$34.4 million</span>. On a per-share basis it rose from <span class="xn-money">$0.39 to $0.43</span>.</p>
<p>In the first nine months of fiscal 2010, consolidated revenues amounted to <span class="xn-money">$1.522 billion</span> versus <span class="xn-money">$1.600 billion</span> in 2009, down 4.9%. Excluding acquisitions, divestitures and closures, the paper effect and exchange rates, organic growth in revenues was 1.1%. Adjusted operating income before amortization rose from <span class="xn-money">$218.8 million</span> in 2009 to <span class="xn-money">$262.3 million</span> in 2010, up an appreciable 19.9%.</p>
<p>Net income applicable to participating shares went from a net loss of <span class="xn-money">$125.4 million</span> in 2009 to a gain of <span class="xn-money">$122.1 million</span> in 2010; on a per-share basis, it went from a net loss of <span class="xn-money">$1.55</span> to a gain of <span class="xn-money">$1.51</span>. Lastly, adjusted net income applicable to participating shares rose 17.9%, from <span class="xn-money">$81.1 million to $95.6 million</span>; on a per-share basis it rose from <span class="xn-money">$1.00 to $1.18</span>.</p>
<p>For the second year in a row, adjusted net income applicable to participating shares grew steadily quarter over quarter in fiscal 2010, increasing from <span class="xn-money">$0.34</span> in the first quarter to <span class="xn-money">$0.42</span> in the second and <span class="xn-money">$0.43</span> in the third.</p>
<p>For more detailed financial information, please see Management's Discussion and Analysis for the Third Quarter ended <span class="xn-chron">July 31, 2010</span> at <a href="http://www.transcontinental.com">www.transcontinental.com</a>, under "Investors."</p>
<p/>
<p>Operating Highlights</p>
<p/>
<p>The operating highlights for the third quarter 2010 reflect the key directions identified by the Corporation in its strategic plan, and its core competencies.</p>
<p/>
<pre>
- Offering integrated solutions to local communities in Canada is one of
these key directions, and it involves a broad range of print and
digital channels: some 170 newspapers and their websites, the door-to-
door distribution and portal Publisac.ca/Dealstreet.ca, the Canada-wide
local search site weblocal.ca, and a series of websites such as
merkado.ca. Achievements in the third quarter include the launch of
three weekly papers in Quebec: Point de vue Sainte-Agathe and Point de
vue Mont-Tremblant in the Laurentians, and Abitibi Express for the
towns of Val-d'Or and d'Amos. On the digital front, we redesigned the
shopping site Publisac.ca and introduced Dealstreet.ca, its English-
language counterpart. Furthermore, the introduction of mobile
applications for Canadian Living, Coup de Pouce, Les Affaires, Finance
et Investissement, Investment Executive, Metro and The Hockey News has
been highly successful. The thn.mobi version for The Hockey News
recently topped one million users, putting it among the top performers
in downloaded mobile applications. This is how Transcontinental is
meeting the new needs of Canadian consumers, who are increasingly
turning to the Web or new communication platforms for their
information.
- Another strategic direction: development and marketing of mobile
solutions. With its Mobile Solutions Division created after the
acquisition of LIPSO, Transcontinental is Canada's leading company in
this forward-looking segment, which seeks to facilitate communications
and transactions between organizations and mobile users. Highlights of
the third quarter include two agreements to provide custom text
messaging services: one with the Toronto Transit Commission, the third
largest public transit system in North America, and the other with the
Société de transport de Laval in Quebec. Transit riders on the Toronto
transit system can now find the arrival times of upcoming streetcars,
in real time, anywhere along their routes. Riders on the Laval transit
system can do the same for buses. LIPSO already provides the same
service to Translink, Metro Vancouver's regional transportation
authority, and a number of other commercial applications to large
transportation organizations in North America and Europe.
- Printing is one of the Corporation's core competencies and
Transcontinental has always stood out for its culture of technological
innovation and efficiency. Since 2007, the Corporation has invested
some $700 million in capital expenditures that have included three
major projects. First there was the building of the Fremont plant,
which has been printing the San Francisco Chronicle since July 2009;
this was followed by the modernization of the Transcontinental Transmag
newspaper printing plant in Montreal, which was completed in 2009; the
focus has now turned to the Canada-wide hybrid platform to print
newspapers and retail flyers, which will be fully operational by no
later than early fiscal 2011. Using state-of-the-art technology, this
unique platform will generate new revenues as well as significant gains
in synergies and efficiency. For their part, The Globe and Mail and
Transcontinental's retail customers will enjoy print quality, format
options and colour options that have no equivalent in Canada. The
Corporation will reap the full benefit of these investments in the
years ahead.
</pre>
<p/>
<p>Reconciliation of Non-GAAP Financial Measures</p>
<p/>
<p>Financial data have been prepared in conformity with Canadian Generally Accepted Accounting Principles (GAAP). However, certain measures used in this press release do not have any standardized meaning under GAAP and could be calculated differently by other companies. The Corporation believes that certain non-GAAP financial measures, when presented in conjunction with comparable GAAP financial measures, are useful to investors and other readers because that information is an appropriate measure for evaluating the Corporation's operating performance. Internally, the Corporation uses this non-GAAP financial information as an indicator of business performance, and evaluates management's effectiveness with specific reference to these indicators. These measures should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP.</p>
<p>The following table reconciles GAAP financial measures to non-GAAP financial measures.</p>
<p/>
<p/>
<pre>
Reconciliation of non-GAAP financial measures
(unaudited)
-------------------------------------------------------------------------
Three months Nine months
ended July 31 ended July 31
(in millions of dollars, except
per share amounts) 2010 2009 2010 2009
-------------------------------------------------------------------------
Net income (loss) applicable to
participating shares $ 28,9 $ 25,3 $ 122,1 $ (125,4)
Dividends on preferred shares 1,7 - 5,1 -
Net loss (income) related to
discontinued operations (after
tax) 4,6 1,2 (28,3) 17,4
Non-controlling interest - 0,1 0,3 0,3
Income taxes 12,0 9,2 27,5 (6,9)
Discount on sale of accounts
receivable - 0,8 0,9 3,9
Financial expenses 10,3 10,6 30,8 26,7
Impairment of goodwill and
intangible assets - - - 169,3
Impairment of assets and
restructuring costs 1,2 6,4 5,9 46,8
-------------------------------------------------------------------------
Adjusted operating income 58,7 53,6 164,3 132,1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Amortization 31,5 29,0 98,0 86,7
-------------------------------------------------------------------------
Adjusted operating income
before amortization $ 90,2 $ 82,6 $ 262,3 $ 218,8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net income (loss) applicable
to participating shares $ 28,9 $ 25,3 $ 122,1 $ (125,4)
Net loss (income) related to
discontinued operations (after
tax) 4,6 1,2 (28,3) 17,4
Impairment of assets and
restructuring costs (after
tax) 0,9 5,3 4,2 34,4
Impairment of goodwill and
intangible assets (after tax) - - - 154,7
Unusual adjustments to income
taxes - - (2,4) -
-------------------------------------------------------------------------
Adjusted net income applicable
to participating shares 34,4 31,8 95,6 81,1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Average number of participating
shares outstanding 80,8 80,8 80,8 80,8
-------------------------------------------------------------------------
Adjusted net income applicable
to participating shares per
share $ 0,43 $ 0,39 $ 1,18 $ 1,00
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash flow related to continuing
operations $ 113,2 $ 0,4 $ 112,4 $ 9,6
Changes in non-cash operating
items 37,1 (50,8) (96,9) (141,8)
-------------------------------------------------------------------------
Cash flow from continuing
operations before changes in
non-cash operating items $ 76,1 $ 51,2 $ 209,3 $ 151,4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Long-term debt $ 724,4 $ 768,3
Current portion of long-term
debt 4,8 156,6
Cash and cash equivalents (20,8) 3,1
-------------------------------------------------------------------------
Net indebtedness $ 708,4 $ 928,0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</pre>
<p/>
<p/>
<p>Sustainable Development</p>
<p/>
<p>The Corporation's commitment to social responsibility and sustainable development was again recognized in the third quarter. For the seventh year, Corporate Knights ranked Transcontinental among the Best 50 Corporate Citizens in <span class="xn-location">Canada</span>. In addition to environmental practices, this ranking takes into account labour relations, community involvement, occupational health and safety, and the quality of corporate governance. Corporate Knights Inc. is an independent Canadian company that publishes the magazine of the same name dedicated to corporate social responsibility. This magazine is the most widely read magazine in the world in its category.</p>
<p>Note that in the second quarter, Transcontinental published its first complete Sustainability Report and received the "Best of Show" award from the magazine PrintAction for "most environmentally responsible corporation" in <span class="xn-location">Canada</span> overall, in 2009. It goes without saying that the Corporation's paper purchasing policy played a key role in these awards.</p>
<p>Lastly, Transcontinental's 2009 annual report, Working Together, Listening to Consumers, received a Gold Award for "Most Engaging annual report worldwide" as well as two Platinum Awards from the 2009 Vision Awards Annual Report Competition from the League of American Communications Professionals (LACP). Selected from among more than 4,000 entries representing 25 countries worldwide, Transcontinental also won a Platinum Award for Most Engaging annual report in the Americas Region, and a Platinum Award for excellence within its industry on the development of the annual report. Transcontinental is the only Canadian company to rank in the top ten of the Top 100 Annual Reports.</p>
<p/>
<p>Dividend</p>
<p/>
<p>At its <span class="xn-chron">September 8, 2010</span> meeting, the Corporation's Board of Directors declared a quarterly dividend of <span class="xn-money">$0.09</span> per participating share on Class A Subordinate Voting Shares and Class B Shares. These dividends are payable on <span class="xn-chron">October 21, 2010</span> to participating shareholders of record at the close of business on <span class="xn-chron">October 1, 2010</span>. On an annual basis, this represents a dividend of <span class="xn-money">$0.36</span> per participating share.</p>
<p>Furthermore, at the same meeting, the Board also declared a quarterly dividend of $0.4253 per share on cumulative 5-year rate reset first Preferred Shares, series D. These dividends are payable on <span class="xn-chron">October 15, 2010</span>. On an annual basis, this represents a dividend of $1.6875 per Preferred Share.</p>
<p/>
<p>Additional Information</p>
<p/>
<p>Upon releasing its quarterly results, Transcontinental will hold a conference call for the financial community today at <span class="xn-chron">4:15 p.m.</span> (DST). Media may hear the call in listen-only mode or tune in to the simultaneous audio broadcast on the Corporation's Web site, which will then be archived for 30 days. For media requests for information or interviews, please contact Nessa Prendergast, Director, Media Relations, at 514-954-2809.</p>
<p/>
<p>Profile</p>
<p/>
<p>Transcontinental creates marketing products and services that allow businesses to attract, reach and keep their target customers. The Corporation is the largest printer in <span class="xn-location">Canada</span> and <span class="xn-location">Mexico</span>, and fourth-largest in <span class="xn-location">North America</span>. As the leading publisher of consumer magazines and French-language educational resources, the largest community newspaper publisher in <span class="xn-location">Quebec</span> and the Atlantic provinces, and with its digital platforms that deliver unique content through more than 120 websites, it is also one of Canada's leading media groups. In addition, Transcontinental offers marketing products and services that use new communications platforms supported by database analytics, premedia, e-flyers, email marketing, custom communications and mobile solutions.</p>
<p>Transcontinental (TSX: TCL.A, TCL.B, TCL.PR.D) has about 11,000 employees in <span class="xn-location">Canada</span>, the <span class="xn-location">United States</span> and <span class="xn-location">Mexico</span>, and reported revenues of C$2.4 billion in 2009. For more information about the Corporation, please visit <a href="http://www.transcontinental.com">www.transcontinental.com</a>.</p>
<p/>
<p>Note: This press release contains certain forward-looking statements concerning the future performance of the Corporation. Such statements, based on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. We caution that all forward-looking information is inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or contained in the forward-looking information, and that actual future performance will be affected by a number of factors, many of which are beyond the Corporation's control, including, but not limited to, the economic situation, structural changes in its industries, exchange rate, availability of capital, energy costs, increased competition, as well as the Corporation's capacity to implement its strategic plan and rationalization plan, engage in strategic transactions and integrate acquisitions into its activities. The risks, uncertainties and other factors that could influence actual results are described in the Management's Discussion and Analysis and Annual Information Form.</p>
<p>The forward-looking information in this release is based on current expectations and information available as of <span class="xn-chron">September 8, 2010</span>. The Corporation's management disclaims any intention or obligation to update or revise any forward-looking statements unless otherwise required by the Securities Authorities.</p>
<p/>
<p/>
<pre>
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
unaudited
(in millions of dollars, Three months ended Nine months ended
except per share data) July 31 July 31
-------------------------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------------------------
Revenues $ 500,3 $ 504,4 $1 521,9 $1 600,3
Operating costs 348,9 366,4 1 077,3 1 194,2
Selling, general and
administrative expenses 61,2 55,4 182,3 187,3
-------------------------------------------------------------------------
Operating income before
amortization, impairment of
assets, restructuring costs and
impairment of goodwill and
intangible assets 90,2 82,6 262,3 218,8
Amortization 31,5 29,0 98,0 86,7
Impairment of assets and
restructuring costs 1,2 6,4 5,9 46,8
Impairment of goodwill and
intangible assets - - - 169,3
-------------------------------------------------------------------------
Operating income (loss) 57,5 47,2 158,4 (84,0)
Financial expenses 10,3 10,6 30,8 26,7
Discount on sale of accounts
receivable - 0,8 0,9 3,9
-------------------------------------------------------------------------
Income (loss) before income
taxes and non-controlling
interest 47,2 35,8 126,7 (114,6)
Income taxes (recovered) 12,0 9,2 27,5 (6,9)
Non-controlling interest - 0,1 0,3 0,3
-------------------------------------------------------------------------
Net income (loss) from
continuing operations 35,2 26,5 98,9 (108,0)
Net income (loss) from
discontinued operations (4,6) (1,2) 28,3 (17,4)
-------------------------------------------------------------------------
Net income (loss) 30,6 25,3 127,2 (125,4)
Dividends on preferred shares,
net of related income taxes 1,7 - 5,1 -
-------------------------------------------------------------------------
Net income (loss) applicable
to participating shares $ 28,9 $ 25,3 $ 122,1 $ (125,4)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net income (loss) per
participating share - basic
and diluted
Continuing operations $ 0,41 $ 0,32 $ 1,16 $ (1,34)
Discontinued operations (0,06) (0,01) 0,35 (0,21)
-------------------------------------------------------------------------
$ 0,35 $ 0,31 $ 1,51 $ (1,55)
-------------------------------------------------------------------------
Weighted average number of
participating shares outstanding
(in millions) 80,8 80,8 80,8 80,8
-------------------------------------------------------------------------
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
unaudited
Three months ended Nine months ended
(in millions of dollars) July 31 July 31
-------------------------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------------------------
Net income (loss) $ 30,6 $ 25,3 $ 127,2 $ (125,4)
Other comprehensive income (loss):
Unrealized net change in fair
value of derivatives designated
as cash flow hedges, net of
income taxes of ($2.6) million
and ($3.4) million for the
three-month and nine-month
periods ended July 31, 2010
($5.9 million and $5.6 million
for the same periods in 2009) (8,0) 15,3 (13,4) 13,0
Reclassification adjustments for
net change in fair value of
derivatives designated as cash
flow hedges in prior periods,
transferred to net income in the
current period, net of income
taxes of $0.7 million and $1.3
million for the three-month and
nine-month periods ended July 31,
2010 (a negligible amount and $2.1
million for the same periods in
2009) 2,0 (0,1) 9,2 5,1
-------------------------------------------------------------------------
Net change in fair value of
derivatives designated as cash
flow hedges (6,0) 15,2 (4,2) 18,1
Unrealized net gains (losses) on
translation of financial
statements of self-sustaining
foreign operations (0,6) 6,5 (3,5) 4,7
-------------------------------------------------------------------------
Other comprehensive income (loss) (6,6) 21,7 (7,7) 22,8
-------------------------------------------------------------------------
Comprehensive income (loss) $ 24,0 $ 47,0 $ 119,5 $ (102,6)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
unaudited
Nine months ended
(in millions of dollars) July 31
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
Balance, beginning of period $ 645,9 $ 753,5
Net income (loss) 127,2 (125,4)
-------------------------------------------------------------------------
773,1 628,1
Dividends on participating shares (21,1) (19,3)
Dividends on preferred shares (5,3) -
-------------------------------------------------------------------------
Balance, end of period $ 746,7 $ 608,8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
unaudited
-------------------------------------------------------------------------
As at As at
July 31, October 31,
(in millions of dollars) 2010 2009
-------------------------------------------------------------------------
Current assets
Cash and cash equivalents $ 20,8 $ 34,7
Accounts receivable 334,8 306,0
Income taxes receivable 22,0 4,1
Inventories 75,3 74,3
Prepaid expenses and other current assets 24,9 20,1
Future income taxes 13,1 11,0
-------------------------------------------------------------------------
490,9 450,2
Property, plant and equipment 925,3 938,8
Goodwill 675,9 673,4
Intangible assets 185,5 184,3
Future income taxes 148,2 141,5
Other assets 50,8 68,3
Assets from discontinued operations - 93,2
-------------------------------------------------------------------------
$ 2 476,6 $ 2 549,7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Current liabilities
Accounts payable and accrued liabilities $ 273,0 $ 360,0
Income taxes payable 40,7 27,0
Deferred subscription revenues and deposits 46,7 37,2
Future income taxes 2,5 0,5
Current portion of long-term debt 4,8 7,0
-------------------------------------------------------------------------
367,7 431,7
Long-term debt 724,4 818,8
Future income taxes 115,1 109,0
Other liabilities 60,1 43,8
Liabilities from discontinued operations - 31,1
-------------------------------------------------------------------------
1 267,3 1 434,4
-------------------------------------------------------------------------
Non-controlling interest 0,3 0,1
-------------------------------------------------------------------------
Commitments
Shareholders' equity
Share capital 476,6 476,5
Contributed surplus 13,5 12,9
Retained earnings 746,7 645,9
Accumulated other comprehensive loss (27,8) (20,1)
-------------------------------------------------------------------------
718,9 625,8
-------------------------------------------------------------------------
1 209,0 1 115,2
-------------------------------------------------------------------------
$ 2 476,6 $ 2 549,7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited
Three months ended Nine months ended
(in millions of dollars) July 31 July 31
-------------------------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------------------------
Operating activities
Net income (loss) $ 30,6 $ 25,3 $ 127,2 $ (125,4)
Less : Net income (loss) from
discontinued operations (4,6) (1,2) 28,3 (17,4)
-------------------------------------------------------------------------
Net income (loss) from
continuing operations 35,2 26,5 98,9 (108,0)
Items not affecting cash and
cash equivalents
Amortization 37,1 33,4 115,9 101,8
Impairment of assets - (0,8) 0,3 24,1
Impairment of goodwill and
intangible assets - - - 169,3
Gain on disposal of assets (0,7) - (1,3) (1,3)
Future income taxes 4,4 (2,2) (4,7) (31,3)
Net change in accrued
pension benefit asset and
liability (3,0) (1,8) (3,7) (5,9)
Stock-based compensation 1,9 0,8 3,5 1,6
Other 1,2 (4,7) 0,4 1,1
-------------------------------------------------------------------------
Cash flow from operating
activities before changes
in non-cash operating items 76,1 51,2 209,3 151,4
Changes in non-cash
operating items 37,1 (50,8) (96,9) (141,8)
-------------------------------------------------------------------------
Cash flow related to
operating activities of
continuing operations 113,2 0,4 112,4 9,6
-------------------------------------------------------------------------
Cash flow related to
operating activities of
discontinued operations (3,1) 8,0 2,7 (13,6)
-------------------------------------------------------------------------
110,1 8,4 115,1 (4,0)
-------------------------------------------------------------------------
Investing activities
Business acquisitions (4,1) (0,7) (6,9) (13,7)
Acquisitions of property,
plant and equipment (21,6) (61,2) (110,6) (221,0)
Disposals of property,
plant and equipment 2,3 1,2 3,9 4,3
Increase in intangible
assets and other assets (3,2) (8,7) (13,8) (20,2)
-------------------------------------------------------------------------
Cash flow related to investing
activities of continuing
operations (26,6) (69,4) (127,4) (250,6)
-------------------------------------------------------------------------
Cash flow related to investing
activities of discontinued
operations - (0,2) 92,2 (0,4)
-------------------------------------------------------------------------
(26,6) (69,6) (35,2) (251,0)
-------------------------------------------------------------------------
Financing activities
Increase in long-term debt 2,7 50,2 40,4 150,4
Reimbursement of long-term debt (0,7) (102,4) (8,5) (105,6)
Increase (decrease) in revolving
term credit facility (68,7) 112,5 (98,3) 140,6
Dividends on participating
shares (7,3) (6,4) (21,1) (19,3)
Dividends on preferred shares (1,7) - (5,3) -
Other (1,2) - 0,2 (1,3)
-------------------------------------------------------------------------
Cash flow related to financing
activities of continuing
operations (76,9) 53,9 (92,6) 164,8
-------------------------------------------------------------------------
Cash flow related to financing
activities of discontinued
operations (0,4) 0,1 (1,3) (0,2)
-------------------------------------------------------------------------
(77,3) 54,0 (93,9) 164,6
-------------------------------------------------------------------------
Effect of exchange rate changes
on cash and cash equivalents
denominated in foreign currencies - (2,7) 0,1 (3,4)
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Increase (decrease) in cash and
cash equivalents 6,2 (9,9) (13,9) (93,8)
Cash and cash equivalents at
beginning of period 14,6 6,8 34,7 90,7
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Cash and cash equivalents (bank
overdraft) at end of period $ 20,8 $ (3,1) $ 20,8 $ (3,1)
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Additional information
Interest paid $ 7,3 $ 9,8 $ 27,7 $ 24,4
Income taxes paid (recovered) $ 0,3 $ (1,0) $ 34,4 $ 17,7
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The notes are an integral part of the consolidated financial statements.
For further information: Media: Nessa Prendergast, Director, Media Relations, Transcontinental Inc., Telephone: 514 954-2809, [email protected], www.transcontinental.com; Financial Community: Jennifer F. McCaughey, Director, Investor Relations, Transcontinental Inc., Telephone: 514 954-2821, [email protected]
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