Quebecor Inc.

Julie Tremblay - President & CEO, Media Group Pierre Karl Péladeau - President & CEO Manon Brouillette - President & CEO, Videotron Jean-Francois Pruneau - SVP & CFO Martin Tremblay - VP, Public Affairs

Maher Yaghi - Desjardins Securities Greg MacDonald - Macquarie Research Rob Goff - Echelon Wealth Partners Drew McReynolds - RBC Capital Markets Vince Valentini - TD Securities Jeff Fan - Scotiabank

Ladies and gentlemen, welcome to this Quebecor conference call. My name is Martin Tremblay, Vice President, Public Affairs and joining me to discuss our financial and operating results for the fourth quarter and for the full-year of 2016 are, Pierre Karl Péladeau, President and Chief Executive Officer; Jean-Francois Pruneau, Senior Vice President and Chief Financial Officer; Manon Brouilette, President and Chief Executive Officer of Videotron; and Julie Tremblay, President and Chief Executive Officer of our Media Group.

You will be able to listen to this conference call until June 15, 2017 by dialing 877-293-8133, conference number 1212694 and passcode 48006#. This information is also available on Quebecor's Web site, at www.quebecor.com.

I also want to inform you that certain statements made on the call today may be considered forward-looking and we’d refer you to the risk factors outlined in today's press release and reports filed by the corporation with regulatory authorities. Let's now move on with our first speaker, Pierre Karl Péladeau.

Thank you very much, Martin. Good morning, everyone.

As you can easily imagine, I’m very pleased to be back as President and CEO of our Company. While I was away our senior management under the leadership of Pierre Dion successfully pursued in the strategic pathway we’ve traced over the years.

I’m proud that we’ve been -- we put a very strong and stable management team in place and that our operation continue to perform solidly. Our telecom operation fueled by the growth of our wireless services continue to exhibit leading financial and operating performance.

Our speed and capacity competitive advantage across our cable network allows us to maintain our lead in broadband services to residential and business customers. Our Business Solutions segment is now firing on all cylinders with the addition of datacenter and fiber connectivity services to the suite of telecom services we offer to small, medium, and large enterprises.

Our media group has reduced its exposure to the advertising revenues with the addition of movie studio and equipment rental and postproduction services offered to the film and television industry. Our sports specialty channels, TVA Sports, continued to report good viewership ratings and advertising revenue growth.

With new distribution agreements currently being negotiated with the BDUs, we expect that this will translate into improving financial performance from our sports channel. Although our two flagship newspapers, the Journal de Montreal and the Journal de Quebec, continued to face a tough environment in the advertising.

The quality and uniqueness [ph] of our content remains a priority as shown by readership surveys that continued to favor our newspapers in all categories. Finally, our sport and entertainment division, focus on live entertainment, achieved a feat in opening the Videotron center in September 2015 and ranking fifth in Canada for the number of tickets sold for shows and concert in 2016, according to Pollstar.

Consumer interest for live content remains high and Gestev will continue to make its mark in this field, as our success will be further strengthened by our multiplatform media outlet. In a nutshell, I can only be optimistic about our future as we will maintain the strategic direction notably based on the convergence of value-added content and distribution platform that served us so well over the past 16 years.

I would also like to thank Pierre for his outstanding job as President and CEO and welcome his appointment as Chairman of Quebecor Media of Board of Directors. As for our financial performance in 2016, we completed the year with an excellent performance with all of our segments reporting EBITDA improvement in the fourth quarter.

Net income from continuing operation grew an impressive 46% in the quarter. Once again, our telecom segment led the way with industry-leading revenues and EBITDA growth of 3.6% and 4.5%, respectively.

Our wireless subscriber base now exceed 900,000 subscribers which bodes well for our performance this year. Manon will obviously provide more details in few minutes.

In an effort to align our cost structure with revenue trends, our Media Group proceeded in November with the restructuring of its workforce by reducing it by 220 jobs. We already perceived some positive impact for these measures as our Media Group EBITDA grew 11% year-over-year in the fourth quarter.

I will now let Jean-Francois review our consolidated financial results.

Thank you, Pierre Karl. Quebecor's revenues were up 3% in the quarter to $1.1 billion.

Revenues from our telecom segment grew 4% to $805 million. Quebecor's EBITDA was up 8% to $389 million with all segments exhibited -- exhibiting EBITDA improvement.

Our telecom segment recorded a 4.5% EBITDA growth to $365 million and our Media segment exhibited EBITDA growth of 11%. We reported net income attributable to shareholders of $123 million in the quarter or $1.01 per share compared to a net loss of $35 million or $0.28 per share reported in the same quarter last year.

Adjusted income from continuing operations excluding unusual items and gains or losses on valuation of financial instruments came in at $85 million or $0.69 per share compared to $58 million or $0.47 per share reported in the same quarter last year. Quebecor Media's consolidated free cash flow from continuing operating activities decreased from $238 million in the fourth quarter of last year to $123 million this quarter, explained primarily by an unfavorable change in non-cash balances related to operations resulting from the proceeds of the $140 million gain on our litigation with BC that we cashed in, in the fourth quarter of last year and unfavorable income tax variances.

For the full-year, consolidated revenues were up 3% to $4 billion and EBITDA was up 4% to $1.5 billion. Excluding an unfavorable variance of $14 million related to stock option expenses, EBITDA increased 5% year-over-year.

Adjusted income from continuing operations excluding unusual items and gains or losses on valuation of financial instrument came in at $306 million or $2.49 per share compared to $240 million or $1.95 per share recorded in 2015. As of the end of the quarter, our net debt to EBITDA ratio was 3.2x EBITDA, down from 3.4x reported as of the end of the fourth quarter last year.

Available liquidity of more than $1 billion, full access to capital markets financing and free cash flow generated by our operations are more than sufficient to cover our near-term debt maturities. In the quarter we purchased and canceled 376,000 class B shares since we initiated our nominal course issuer bid program in 2011 approximately 7.1 million class B shares have been purchased and canceled.

I'll now let Manon review our telecom segments operations.

Thank you, Jean, and good morning, everyone. In the quarter, we recorded a growth of 62,000 RGUs driven by the addition of 26,000 wireless line, 17,000 Internet subscribers, and 36,000 subscribers to our OTT service, Club illico.

For the full-year, we recorded a growth of 118,000 RGUs or 2% reaching the right balance between subscriber, EBITDA, and cash flow growth is always a challenging exercise and our results for the fourth quarter and for the full-year reveal that we’ve been successful in reaching that balance. Wireless services continued to fuel our growth.

As of December 31, we counted 894,000 activated lines for an increase of 125,000 lines or 16% over the last 12 months, resulting from our strongest annual growth and performance since 2011. During the year, we increased our market share by 2 points to reach 15%.

In the fourth quarter, we posted growth of 26,000 lines in line with last year's performance. Wireless ARPU grew 6% year-over-year from $49 recorded in the fourth quarter of last year to $52 in this quarter.

Multi-churn rate remained stable year-over-year and in line with the industry. In the fourth quarter, we posted growth of 17,000 subscribers to our broadband services close to twice as many as in the fourth quarter of last year.

For the full-year, we grew our subscriber base by 45,000 customers, representing our largest annual increase since 2013. We continue to enjoy a strong network performance as reflected by our ongoing success with our 120 megabit second service plan.

We launched our 1-gig service in the summer of 2016 and we continue to roll out the DOCSIS 3.1 technology. This new generation technology will eventually deliver broadband speeds of up to 10 gigabit per second.

On the cable TV front, despite a challenging market, we managed to record a decline of less than 5,000 customers in the fourth quarter close to 50% lower than last year. On November 28, 2016, we introduced five new custom theme television pick and choose plans tailored to make it easier to customize everyone's television experience.

Our over-the-top video service, Club illico, boasted almost 315,000 customers as of December 31, 2016, an increase of 36,000 customers in the quarter and 57,000 customers over the last 12 months. This outstanding performance results from the announcement of two new original teen drama series and the success of the second season of Club illico original series, Blue Moon.

This franchise compiled more than 4 million views. Moreover, the launch of our first 4K original series, Victor Lessard, which was released yesterday should continue to bolster our Club illico performance going forward.

We are clearly on the right path with our strategy of producing original content. In cable telephony, we recorded a loss of 12,000 lines in the quarter, 9% lower than last year and mainly due to cord cutting.

As of December 31, 56% of our residential customers were bundling three services or more and 16% were building four services further contributing to higher ARPU. We continue to focus on bundling services as this has proven to favor lower churn rates.

Total ARPU grew from $140.19 in the fourth quarter of 2015 to $148.56 in this quarter, representing a 6% increase driven by wireless ARPU growth and our continued bundling success. In our B2B segment, revenues grew 24% for the full-year fueled by the acquisition of Fibrenoire, the growth of our data center business and the bundling of our services.

Wireless lines growth of 24% over 2015 and our 7% wireless ARPU growth also contributed to the overall B2B segment revenue growth. Business customer satisfaction remains the best in the industry and we continue to solidify our market position.

On January 12, 2017, we announced a partnership between 4Degrees Colocation and Megaport Limited, a global leader in secure interconnectivity. 4Degrees customers may now benefit from faster, more secure and redundant access to business applications from three leading ICT providers.

On the customer experience front, we continue to receive many distinctions. During the last quarter, a Léger survey published by Les Affaires ranked Videotron as the best telecommunication service provider in Quebec for a fifth year.

On the innovation front, we announced last September a partnership with Ericsson, École de technologie supérieure and the Quartier de l’innovation to create Canada's first open-air smart living laboratory. This 5G lab platform will test the next generation of mobile network as well as IoT applications and services that can best improve and simplify customers' daily lives and businesses' operation.

On the financial front, we recorded revenue of $805 million in the fourth quarter compared to $777 million in the same quarter of 2015 for a 4% growth. For the full-year, we recorded revenue of $3.2 billion for a 5% growth.

This is primarily due to RGU and ARPU growth mainly in mobile, Internet, and B2B activities. We reported EBITDA of $365 million in the fourth quarter compared to $349 million last year for a 4.5% growth.

For the full-year, EBITDA grew 5% to $1.4 billion. Wireless EBITDA continues to grow and for the full-year 2016 is 1.5x higher than 2015.

In the quarter, cost of acquisition per new wireless subscriber was down 10% year-over-year from $450 in the fourth quarter of last year to $404 in this year. This improvement is mainly attributable to bring-your-own-device and lower marketing costs.

From a cash flow perspective, we generated $175 million in cash flow from segment operation in the fourth quarter, an increase of $4 million from the same quarter last year. For the full-year, we generated $660 million compared to $668 million last year.

Excluding our investment for completing the buildout of our LTE network, our wireless business generated positive cash flow for the quarter and for the full-year. Net capital expenditures including acquisition of intangible assets amounted in $190 million in the fourth quarter, an increase of $12 million over the fourth quarter of last year.

We spent $40 million in our mobile infrastructure in the quarter, including $21 million on our LTE network. For the full-year.

we invested a total of $789 million in CapEx, an increase in $70 million over 2015. Excluding our $102 million invested in our LTE network, total CapEx amounted to $687 million.

Our CapEx increase over 2015 is mainly related to the construction of our data center in Montreal, the expansion of our Quebec City data center and some strategic IT investment program. Overall, we have invested $138 million in our mobile infrastructure, including $102 million invested in our LTE network.

For 2017, we expect our CapEx to range between $650 million and $700 million for the maintenance of our fixed network including increasing its capacity and speed. For customer premise equipment and installs for various IT program and for the maintenance of our wireless network.

Our guidance, however, exclude investment required to the transition to a full IP network for which a decision regarding the preferred platform is still to come. I'll now let Julie review the Media Group.

Thank you, Manon. Consolidated revenues for the Media Group declined $4 million or 2% in the fourth quarter to $266 million.

MELS revenues increased 18% and broadcasting revenues increased 7%, however, offset by declines in magazine and newspaper publishing and in music distribution revenues. The growth in broadcasting revenues is primarily due to higher revenues from our specialty channel, mainly from TVA Sports and to higher advertising revenues from our conventional TV channel.

Advertising revenues from our broadcasting activities increased 9% in the quarter to reach $80 million and subscription revenues from our specialty channels increased 17% to reach $33 million. The growth in subscription revenues came mainly from TVA Sports with a 29% growth mostly attributable to higher retransmission fees charged to BDU.

The decline in magazine publishing revenues is mostly attributable to the closure of some titles during 2015/2016 combined with a 27% decrease in advertising revenues on the same-store basis. MELS revenues reached $15 million in the fourth quarter for a 18% growth mainly in visual effects activities.

Our newspaper publishing business reported revenues of $53 million in the fourth quarter of 2016 compared to $54 million reported last year for a 3% decrease advertising revenues declined 13%, while circulation revenues increased 6%. Media Group's EBITDA amounted to $25 million in the quarter for a growth of 11%.

Our newspaper publishing business recorded EBITDA of $3 million, fairly stable from last year. Our broadcasting business recorded EBITDA of $17 million, up $5 million over the last year.

This increase is mainly attributable to the revenue growth posted by TVA Sports and our conventional TV channel. Our magazine business recorded EBITDA of $2 million, down from the $3 million recorded last year, while MELS recorded EBITDA of $2 million, up $1 million versus last year.

For the full-year, Media Group's revenues amounted to $938 million, a decline of $38 million or 4%. Advertising revenues from our broadcasting activities remain stable at $255 million and subscription revenues from our specialty channels increased 8% to $120 million.

Our magazine business posted revenue decline of 1% for the full-year to $116 million and MELS recorded an 8% revenue decline to $59 million. Our newspaper publishing business reported revenues of $201 million for the full-year or a 13% decline, as advertising revenues declined 15% partly offset by a 3% circulation revenue growth.

Media Group's EBITDA amounted to $63 million in 2016, our newspaper publishing business recorded EBITDA of $11 million, while our broadcasting business recorded a $22 million EBITDA. Our magazines recorded EBITDA of $14 million, while MELS recorded EBITDA of $9 million.

Cash flow from segment operating defined as EBITDA less CapEx, was $13 million in the quarter and $15 million for the full-year. Let me now turn the floor back to Pierre Karl.

Thank you, Julie. Thank you, Manon.

Congratulations ladies. So in conclusion, we can affirm that our 2016 financial results were supported by a solid strategic direction involving all parts of our operations from TV to newspaper or magazine content from live to music or book content.

Every asset of our business mix plays a role in differentiating our distribution platform. The digitalization of the economy has favored the exportation of content over multiple platforms.

In our telecom service's success is therefore closely linked to the richness of the content we produce and broadcast. This was the main strategic premise supporting the acquisition of Videotron 16 years ago, and this will continue to be our main strategic alignment in the coming year.

In light of our ongoing success, I express a high-level of confidence towards our future. I thank you very much for your attention.

And our operator, you can open the lines for questions.

Yes, thank you for taking my question. Manon, I wanted to ask you about your future TV product development.

You are doing a lot of preparation for IP and increasing Internet speeds. Can you maybe talk about your decision metric regarding what you are looking for in terms of your future of TV product, and how important it is to be fully IP to your business model.

And in terms of wireless, can you talk a little bit about the margin level that is coming from the bring-your-own-device client? It seems like ARPU is a little bit -- it has a reducing impact on ARPU, but can you talk about the margin contribution from BYOD versus a typical customer with a subsidized handset?

Yes, yes. Sure.

I can start with the ARPU. Yes, when you look at the ARPU, first of all, you have to keep in mind that it's still growing, the ARPU is still growing, there is still room to grow as well.

But to bring-your-own-device brings an effect into the ARPU and you're right to point it out. If I give you some number in Q3 and Q4, respectively, we were about 33% and 30% of all gross add being bring-your-own-device.

Of course those subscriber go for a lower ARPU usually because they don't have to pick a higher package to get a good subsidy on the handset. But the thing is very important here is that this phenomenon is growing.

If you look in Europe, it's even much higher than 30%, its close to 70%, 80%. So we think that this phenomenon will increase in the future.

We believe that we have to be strong enough attracting those subscribers because we’re the challenger here with the alternative for those subscribers who are captive with the incumbent for many years. And finally, when I look at the bring-your-own-device subscribers we’ve deployed some tactics and we’re able within the first year maybe and we try to balance the appropriate timing because the bring-your-own-device customers bring such a great lifetime value, because we don’t have to subsidize them from sure.

But we need to work the churn rate on those segment, so what we do usually is after 10 months we try to upsell them with a subsidy and it seems to work. And just to give you some number of all the renewal of the last quarter, 15% were out of bring-your-own-device subscribers and renewed customers they bring a higher ARPU of $6 per month average.

So you have to look at that on the long run. We need those subscribers and we're able to upsell them along the way.

Does that respond to your question?

Yes, it does. But just when you look at the overall picture, if you include the churn, as you pointed out and the lower subsidy, do they compare in terms of marginal contribution on the EBITDA line, or you still prefer a subsidized customer over the long-term?

No, no. They’re much better, because ….

They’re better.

… they want a full margin. For a subsidized subscriber it takes about 11, 10.5 to 11 months.

So its way better for sure. But I think that we can also improve and just a few thing I forgot to tell you, because when you compare the Q3 and Q4 ARPU, it might brings you some questions, but what we’ve done in Q4, we’ve tried a new tactic, so we converted some subsidy budget into promotional discount budget, and this is fully reflected in the ARPU instead of the NDCOA.

So of course the cost of acquisition was 404 instead of 450, which is a great improvement. But a portion of that has been flipped into discount promotion which went directly into the ARPU.

So it's about an impact of $0.70 in the ARPU.

Okay. Okay.

Thank you.

So budget was momentarily.

Okay.

Okay. And for the IPTV, I mean, it's always the same response.

We are still doing our homework and why does it take so much time? I think that we had the luxury of taking good time to do our homework.

As you remember, we were the only cable operator to deploy an hybrid platform. So that’s why we’ve more time.

We are not in a rush of entering that program, so we want to make sure that we get to the right price point with the vendors, the good partner to go to that journey. But -- and the second portion of the question, do we need to go for IP, we have to, everybody has to go there.

We need to maximize our network capacity by removing the QAM video platform. It will enables us to allocate capacity, if needed more in Internet or in video depending of the trend in the future.

So we will announce something shortly.

Thank you.

Thanks. A quick follow-on for Manon, then I have a question for Pierre Karl.

Manon, I didn’t catch the full response on ARPU levels that the BYOD customers are coming in at. Did you say what ARPU level most of those customers are coming in at?

No, I haven't disclosed that. We are still doing our homework.

Usually I would assume that the ARPU and based on the question we ask our vendors, yes, usually they go for a lower ARPU. But what I mention is we have tactics further in the first year of acquiring those subscriber.

We try to deploy upsell tactics to make sure they improve, increase their ARPU.

Okay, all right. Thank you for that.

And Pierre Karl, welcome back. Wanted to ask you a question on strategy.

So investors are anxious to know whether your return will mean any shifts in strategy even slightly. Could you talk a little bit about your strategic focus, at least what it will be initially?

Well, I guess, Greg, I mention it during my presentation. For the last 16 years we’ve been following the same strategy.

I guess it was in the combination of content and distribution. I think that we’ve been able to enhance and position our distribution platform, our telecom distribution platform very well because of the great content that we were able to provide.

We will continue in this direction and it looks like that we're far from being the only ones right now to follow this route, because there is a lot of telecom communication that had been moving in this direction.

So as a quick follow-on to that, speaking to the success that you’ve had with illico and unique content that you’ve created, does that success suggest that there is a lot more that can be done through your own content origination?

Well, certainly. You know we've been seeing new platforms.

You mentioned Club illico, we were a few years ago [indiscernible] and I anticipating what will be the Netflix kind of things that will take place. We were anticipating also what took place in the music business with streaming.

And I guess that the wireless platform, Manon and I with the Videotron, with that team, we’re in Barcelona last week or 10 -- a little bit more 10 days ago and obviously we’ve been seeing the 5G, the cloud, all those things that we anticipated also previously. So then therefore we can forecast that there will be even larger amount of distribution platform that will take place.

And obviously with the investment and the strength in our network, we will be there to make sure that we will keep -- we will take a significant piece of this.

That all makes sense. And one final, the 36,000 net adds for the OTT product, the illico product, is -- do those reside in your basic cable customer account numbers, or are those separate?

No, they’re separate, but a lot of those are also customers of Videotron. They’re not only standalone product customer.

Yes, that’s what I was asking for that clarification there. In most cases, probably the same, right?

Yes, it's part of the bundling strategy. So we’re trying to do the same.

We try to upsell them other products. But if someone is only OTT, they can subscribe any problem.

Okay. Are you willing to talk about what that overlap is?

Is that a 50% overlap, higher than that?

It's very high actually. I can send you the number.

I think it's about 80% plus. But we can forward the information and send it later.

It would be helpful. Thanks very much, guys.

Question would be on the broadband side where your subscriber growth was tremendous.

Yes.

But the ARPU wasn’t quite where we -- where I might have thought it would be. Could you talk to that ARPU?

Was it to an extent hurt by 2 point averaging or where the traction might be there as well?

The broadband you’re talking Internet broadband?

Yes, yes.

Yes, it's still 4% growth over year. I mean, it's quite good.

It's quite impressive, but anyway basically what fuels that ARPU growth is consumption. I spoke about the 120 megabit last quarter and it seems to be very attractive.

I think that a combination of unlimited and fair good speed at a fair price point makes the job, but globally I think that there is outstanding performance in landline product, because TV as well was very satisfying, is I would assume that we called the novelty that came with five a few years ago, some of our subscribers they were curious to try the product. So they went to their competitor and today they’re coming back home to us.

Why? Because the product is superior, because our customer service is superior, and this is a trend that we see still are going on in the first quarter of 2017.

Okay. Thank you very much.

Yes, thanks very much. Just a couple that were just ticked off here.

Shifting to business solutions, maybe for you, Manon, can you just remind us, excluding the acquisition impact, just what kind of organic growth you recorded in Q4 and what kind of growth you'd expect going forward? And second question, I know not a big segment, but on the sports and entertainment side, we saw what the contribution was in 2016.

I think you’re kind of a full-year into that business. Just wondering, as we get into '17 and beyond, are there specific drivers that can improve the profitability of that segment?

Thank you.

Okay. I can start with the B2B.

basically its month after month you can split the growth in revenue and in EBITDA by 54%. So 12% coming from Fibrenoire and 4Degrees and another 12% coming from organic growth.

Okay.

Okay?

On the sports and entertainment front, Drew, that’s a business of volume. You need to put a lot of volume in the building in order to improve profitability.

Last year, very satisfying with ranking fifth in terms of number of tickets sold. About 50 events that we have aside from the junior hockey team that is playing in the building.

And we expect that this number of events will continue to grow in the future and that should improve the profitability of the segment.

Okay. And maybe just as a quick follow-up, just back to you, Manon.

I kind of missed your comment on Q1 in terms of wire line net add performance. I think you said that you’re seeing kind of continued favorable trends similar to what we saw in Q4.

Is that correct?

Yes, you could assume that.

Okay. Thanks very much.

Yes, thanks very much. One clarification on business, one question on Internet, and then a strategic for Pierre Karl, if I could.

Just on the business, Manon, to go back to that, can you give us any sense of the total addressable market for business telecom and what market share you think you are at? And I’m not just talking about business solutions line, because I think you include a lot of small to medium business revenues in your other categories as well.

So looking at the total business market, do think this is still a double from here in terms of the market share you can ultimately get to or can you give us some update of where you are?

Yes. Today if you look at, I mean, you have to split the market the way we look at it, it's not only a one large market.

We look at the small and very small enterprise and then the larger enterprise as two market separately. So when you look at the small, medium, we’re a very strong player.

We have about 62% market share. We think we can grow more.

Why? Because of 4Degrees and Fibrenoire, because what we see is that all the subscriber we have already, we upsell them to Colocation.

So the business, that segment can still grow even though we have 62% market share. For the larger enterprise, we’re dominant at all.

And this is a segment where we think we can achieve more now that we structured a theme accordingly, now that we’ve brought the Colocation and in the product portfolio we are well prepared to address that market. And today I could assume based on the number.

I don't know, I’m looking at Jean-Francois, if I can share that. But you can expect us to grow still strongly in the future, I may say.

Can I just clarify, where do you cut-off the difference between small, medium, and enterprise or how many employee size business?

It depends. Usually it's between 50 and 100, but depending of the type of industry, as an example a retailer who was very strong in retail.

Sometimes they have a lot of employees, but since its point-of-sale separate, it's easy for us to address that market space. So that’s it.

The second clarification -- not clarification, but maybe question; I don’t know if it's for Jean-Francois. Was there any negative impact in your revenue or EBITDA in the fourth quarter from the CRTC's reduction in wholesale Internet rates?

There was. There was, but not material.

Nothing you can call out for us?

No.

Okay. And last, Pierre Karl, if I come back to this strategy question a little bit differently from how Greg asked it.

In terms of balance sheet risk and some specific priorities that the Company has had in the past couple of years, can we just get your sort of clarification that you’re still on the same page? It seems like the Company has not wanted to exceed 4x debt to EBITDA in making these transactions with The Case since 2012.

Can you reiterate your support for keeping balance sheet leverage below 4x? And also still a commitment to buy back The Case if the opportunity is there?

And lastly, to monetize your spectrum outside of Quebec. Can you give us your comments on those things?

Well, I remember very well in 2002, when we were selling bonds in the U.S, we were more than 7x debt to EBITDA. That was certainly the environment that we were not really comfortable, but at the end of the day, I guess, that was the price to pay to get Videotron and to reposition Quebecor from the historical roots.

We always said during and we continued for the 10 years after that our balance sheet was certainly something very important and therefore we deliver the reduction of our leverage and we’ve been a little bit, I guess, one-time less than three -- I guess, that we can say that the range will be between three and four, which is something that because of our strong cash flow generation that we can expect taking place in the upcoming years will be reasonable. On the -- there was -- I’m sorry, Vince, I think that I miss a portion of your question.

Was it …

Just the two strategies of gradually buying out The Case's stake, when deals can be done, and monetizing spectrum outside of Quebec, your thoughts on that.

Okay. Well, the spectrum is certainly something of great interest.

As you can easily imagine this is something that we can consider as a very strong asset and therefore obviously we’re not going to negotiate publicly about this. But we certainly sit on a very interesting one, great value, and the proper time we will be able to deliver what we consider being the outcome of this.

So, I guess that we will continue to work and we see this as a great asset going -- moving forward.

And The Case, you would still want to get to 100% ownership I assume before the 2019 drop-dead date on that deal?

Obviously, we’ve been moving from 45% ownership from [indiscernible] to what roughly 19 right now. The Case is an investment fund and the mission is to realize their assets, that they’ve -- what they’ve been doing for the last few years.

And then I guess that this is what we will continue to move forward with.

Thank you.

Pleasure.

Thanks, good morning. A few clarifications, first.

On the wireless EBITDA number for this year for 2016, I think, Manon, you said it was 1.5x 2015. If my numbers are correct, it was about $50 million in 2015, which suggests $75 million for 2016.

Can you just double check that math is roughly in line?

Jeff, we were -- in 2016 we delivered or we generated higher than $90 million.

Higher than $90 million, okay.

Correct.

Great. And what was the wireless CapEx for the fourth quarter or for the full-year, whichever number you have in hand?

Yes, for the full-year wireless CapEx was $138 million, of which $102 million was for the LTE network.

And is that now pretty much complete and going to 2017, that wireless CapEx should come down by roughly the LTE spend?

Yes, it's mostly over, yes.

Okay. So when we look at the CapEx for 2017, 650 to 700, and we layer -- how do we think about the costs related to IP video?

Does that spend essentially replace the LTE spend? And how long roughly do you think that’s going to take?

Well, obviously because our decision is not completed or taken yet, Jeff, and the timing of when we got to be starting is not known yet. It's very hard for us to make a forecast for 2016 or for 2017.

It's going to be a multiyear investment and as I’ve said in the past you can expect that the order of magnitude will be mostly in line with the LTE spend.

Okay. And does in the quarter or in 2016, your intangible spend, intangible asset addition, went up from last year.

Can you -- so that your CapEx guidance of 650 to 700 includes intangibles, I just want to double check that. And then secondly, can you just help us understand what you are spending in the intangibles and whether some of that is related to the next-gen TV as well?

Yes, it does include the intangible. The guidance it does include the intangible investments.

And in terms of what's in there, you would see a few things in 2016 since we haven't purchased any spectrum licenses or wireless spectrum licenses. It's mostly IT investments and softwares.

Is that related to anything related to TV or I guess given one of your peers went through an exercise of writing down some of their investments, I just want to get some clarification.

No, no, it's related -- its mostly related to telecom.

Okay.

Its IT investment programs in telecom -- in the telecom business.

Okay. And one final question related to original content spend.

Can you just clarify for us where are you putting that cost? Is that in the telecom segment, or is that spend under TVA or Media?

Can you repeat that one, we missed it.

The original content spend that you currently embarking, it sounds like that’s going to become a bigger part of your spend going forward with Club illico. Is that spend included in Telecom or is that in the Media segment?

Usually if it’s a multi window content, the telecom takes it share and then the Group Media take its share when its aired on their channel, but for an example, for Blue Moon, even Victor Lessard, we’re the one who inject the most portion of the budget. But keep in mind that Club illico is a profitable product, we generate good margin, so we are able to finance that content along the revenue we generate.

Okay, great. And one last question on the spectrum.

Regarding specifically the AWS1 in Toronto, can you share with us or talk a little bit about what the plan is with that? You obviously have an arrangement with Rogers.

I'd think you want to exercise that, but maybe I’m wrong, but can you just talk a little bit about the AWS1, given that we do have, I guess, a consultation coming up for the renewal of that next year?

Unfortunate, Jeff, we cannot disclose that.

Okay, fair enough. Thanks.

Thank you.

This was the last question. Thank you, gentlemen.

This concludes today’s call.

I guess, Martin, I could add that after the four year sabbatical, I guess, that nothing really changed. All questions are directed to Jean and Manon.

And we can anticipate that the next question for the next quarter will be the same. So, for all of you thank you very much and have a nice day guys.

Thank you.

Thank you.