ANALYSIS OF QUARTERLY RESULTS
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RESULTS (UNAUDITED)
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(IN THOUSANDS OF DOLLARS)
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Three-month periods ended |
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2004 |
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2003 |
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Q4 |
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Q3 |
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Q2 |
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Q1 |
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Q4 |
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Q3 |
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Q2 |
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Q1 |
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Revenues
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$170,197 |
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$166,967 |
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$165,888 |
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$164,323 |
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$162,056 |
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$154,546 |
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$149,661 |
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$146,295 |
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Elimination of purchase accounting impact
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— |
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— |
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— |
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— |
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1,201 |
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6,430 |
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9,120 |
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10,907 |
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Adjusted Revenues
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$170,197 |
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$166,967 |
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$165,888 |
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$164,323 |
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$163,257 |
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$160,976 |
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$158,781 |
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$157,202 |
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Income (loss) from operations
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$89,841 |
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$92,393 |
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$89,845 |
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$86,427 |
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$69,795 |
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$(88,503) |
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$3,109 |
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$(15,469) |
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Adjustments to income (loss) from operations:
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Depreciation and amortization
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3,984 |
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5,094 |
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7,078 |
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11,589 |
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21,675 |
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52,222 |
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95,353 |
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118,519 |
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Restructuring and special charges
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—
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— |
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— |
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— |
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7,979 |
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136,136 |
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— |
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— |
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EBITDA
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93,825 |
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97,487 |
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96,923 |
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98,016 |
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99,449 |
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99,855 |
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98,462 |
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103,050 |
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Elimination of purchase accounting impact
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(90) |
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(553) |
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(1,488) |
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(2,973) |
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(4,946) |
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(6,274) |
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(10,056) |
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(13,353) |
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Transition expenses/Other
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4,973 |
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$1,240 |
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834 |
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563 |
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1,678 |
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623 |
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2,283 |
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1,576 |
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Adjusted EBITDA
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$98,708 |
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$98,174 |
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$96,269 |
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$95,606 |
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$96,181 |
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94,204 |
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90,689 |
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$91,273 |
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Adjusted EBITDA margins
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58.0
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% |
58.8
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% |
58.0
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% |
58.2
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% |
58.9
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% |
58.5
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% |
57.1
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% |
58.1
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% |
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Income (loss) before taxes and non-controlling interest
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78,262 |
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83,837 |
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70,425 |
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76,383 |
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56,591 |
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(114,645) |
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(47,723) |
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(45,883) |
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Net earnings (loss)
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$60,892 |
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$76,968 |
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$70,037 |
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$68,650 |
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54,116 |
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$(70,615) |
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$(22,141) |
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$(18,296) |
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Total assets
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3,157,288 |
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3,052,763 |
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3,021,533 |
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2,989,487 |
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2,990,821 |
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3,034,418 |
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3,042,817 |
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3,167,164 |
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Long-term debt and other liabilities
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1,190,058 |
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1,081,399 |
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1,081,724 |
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1,053,885 |
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1,053,992 |
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1,200,000 |
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1,965,372 |
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2,064,001 |
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Adjusted Revenues have increased progressively quarter over quarter. These revenues are recognized over the life of the directories and, as such, sequential quarterly growth has been relatively stable.
Within each financial year, Adjusted EBITDA increased steadily and is in line with growth in Adjusted Revenues, with the exception of the three-month period ended June 30, 2003, during which we recorded higher pension-related expense.
We incurred restructuring and special charges in the third and fourth quarters of 2003 which negatively impacted the net earnings (loss) of those quarters. An increase in financial charges in the second quarter of 2004 is mainly due to a write-off of certain deferred financial charges following the refinancing of our credit facilities, which negatively impacted our net earnings, particularly in comparison with the previous quarter, while lower interest expense had a positive impact over the last five quarters. The two year transition from Bell to a stand-alone organization ended in the last quarter of 2004 and as such our net earnings were negatively impacted by expenses relating to data conversion and final settlements of liabilities related to the Acquisition. Excluding the elements mentioned above, the diminishing impact of amortization of customer contracts and relationships and purchase accounting over the last eight quarters, have resulted in an improvement in net earnings quarter over quarter.
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