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First let me begin with our fiscal 2010 results. I would just like to remind you that the results that will be discussed no longer include our U.S. direct mail operations as they are now presented in discontinued operations. Overall, our results for the year reflect the culmination of our rationalization plan put in place in 2009 as well as the return on recent investments, market share gains and a somewhat improved economic environment. 

Our consolidated revenues decreased 4% to $2.1 billion, principally as a result of divestitures and closures, the exchange rate effect and the paper effect. When you take out all the noise, organic revenue growth amounted to $26 million, or 1%, mainly due to the contribution of new printing contracts coupled with the recovery in advertising spending, by national and local advertisers, which benefited our Media sector. Considering that we are in an industry in transformation, and recently out of a recession, we are quite proud that we were able to generate this level of new business.

In terms of profitability, our operating income before amortization reached $382 million, which represents an absolute record in our history. In fact, our EBITDA margin increased from 15.6% to 18.3%. These results were possible because of our continuous efficiency improvement initiatives, including about $30 million from the rationalization plan put in place in 2009, and the contribution from new contracts such as the San Francisco Chronicle for the full year. These were partially offset by increased strategic investments, which are expensed for accounting purposes, in both the Media and Interactive sectors.

It is important to highlight that our adjusted operating income improved consistently quarter after quarter. The fourth quarter of 2010 represented the sixth consecutive quarter of year-over-year adjusted EBIT improvement. The most significant contribution was reflected in the first half of the year as we benefited from the tail end impact of the rationalization measures. The improvement in the back half of the year is a testament to our continuous improvement culture combined with the impact from new contracts.

An amount of $16 million, before tax, was charged to income as impairment of assets and restructuring costs mostly related to workforce reduction while an amount of $13 million, before tax, was charged to income as impairment of intangible assets primarily related to trade names in the Media sector.

Since these unusual charges were much lower than last year, net income obviously increased significantly in fiscal 2010. However, even when we exclude these unusual items, adjusted net income increased a solid 19%. This is a more appropriate measure of our operational performance for the year and is a tribute to the dedication and contribution of all our employees.

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Now let’s take a closer look at our financial condition in fiscal 2010. I am happy to report that Transcontinental continues to generate strong cash flow. In 2010 we generated $316 million of cash flow from operations, the highest in Transcontinental’s history. Let me highlight the major uses of this cash.

We disbursed $127 million in capital expenditures of which about $100 million was related to our new newspaper and retail printing platform.  As you can observe, capital expenditures outside the major projects were well contained. In fact, with the completion of this most recent project, we expect capital expenditures over the next few years to be around $75 million per year at the most, of which half would be spent in the Media and Interactive sectors.

We paid $28 million in dividends to holders of participating shares, or 35 cents per share. In fact, we increased our dividends twice in the last twelve months. Once in the second quarter of 2010, representing an increase of 13%, and again in the first quarter of 2011, representing an additional increase of 22%. In the past ten years we increased our dividends every year, except in 2009, given the prevailing market conditions at that time. We also paid $7 million in dividends to holders of preferred shares.

The balance of the cash flow from operations was primarily used to pay down debt. In fact, in terms of financing activities this year, I must say it was significantly less busy than last year! Instead of putting financings in place we paid down some debt. We repaid and cancelled our $150 million Tranche B line of credit and used the proceeds of $105 million, from the sale of our U.S. direct mail operations, to reduce our revolving credit facility. The term revolving credit facility of the Corporation now consists solely of Tranche A, an amount of $400 million, which matures in September 2012. And, we currently use only less than half this amount. Yesterday, we announced that we will leverage this flexibility by pre-emptively repaying our $100 million credit facility with Caisse de depot et placement du Québec.

In order to gain additional flexibility, we also announced yesterday that we renewed our securitization program, which had come due last August. It now consists of a $200 million program with a maturity of two years. And, we do not anticipate having to use this program in the short term.

As a result, we are in a sound financial position. Our net debt decreased from $791 million at the end of 2009 to $694 million at the end of 2010. Therefore, our net debt to EBITDA ratio now stands at 1.8x, as compared to 2.6x for the same period last year, well below the 2.0x to 2.5x target range set by management. In fact, last December, Standard & Poor’s upgraded us to triple B flat from triple B minus, returning us to the rating we had prior to the financial crisis. This upgrade signals that the market recognizes our strong financial position, our disciplined approach to financial management as well as our strong cash flow generating ability.

Having said this, we recently adjusted our net debt to EBITDA target since we de-leveraged the Corporation much faster than anticipated through the issuance of preferred shares, debt repayment with the proceeds from the divestiture of our U.S. direct mail operations, a higher EBITDA and lower capital expenditures. When we take into account the rapid transformation of the industries in which we operate, our desire to have increased financial flexibility as well as new minimum standards for investment grade status established by credit rating agencies, we decided to set our target net debt to EBITDA ratio at around 1.5x. We are confident that we will reach this new target fairly quickly as our capital expenditures will be reduced significantly in the coming years and we will benefit fully from our recent investments.

On that note, I would like to reiterate that the free cash flow profile of the Company will improve significantly over the next few years and our first priority for cash utilization will be to repay debt, continue to increase dividends and prudently pursue our strategic transformation.

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To conclude, Transcontinental performed very well in fiscal 2010. We continued to execute on the action plan we put in place in 2009, and built on it further, which ultimately led to the generation of record returns in terms of operating income before amortization and cash flow from operations.

Fiscal 2011 will remain full of challenges and opportunities. We will benefit from the full year impact from the Globe and Mail project as well as the generation of synergies from the use of our most productive assets. We will also accelerate our strategic investments in our new and innovative digital media and interactive marketing services to propel our growth to a new level.