Cogeco 2013 Annual Report Download - page 42

Management's discussion and analysis (“MD&A”) COGECO CABLE INC. 2013 41
QUARTERLY FINANCIAL HIGHLIGHTS
Fiscal 2013 Fiscal 2012
Quarters ended(1) Nov. 30 Feb. 28(3) May. 31(3) Aug. 31 Nov. 30 Feb. 29 May. 31 Aug. 31
(in thousands of dollars, except percentages and
per share data) $ $ $ $ $ $ $ $
Revenue 327,911 429,672 464,497 470,386 315,424 317,735 319,771 324,768
Operating income before depreciation and
amortization 147,126 195,776 215,132 222,489 131,823 143,743 152,661 160,825
Operating margin 44.9% 45.6% 46.3% 47.3% 41.8% 45.2% 47.7% 49.5%
Operating income 75,160 95,812 101,586 103,681 66,999 59,491 90,981 94,709
Income taxes 17,400 15,838 18,428 11,176 10,603 13,617 21,449 32,987
Profit for the period from continuing operations 42,160 50,880 48,126 43,917 39,567 31,086 53,159 45,705
Profit for the period from discontinued operations — — — — 3,399 52,047 — —
Profit for the period 42,160 50,880 48,126 43,917 42,966 83,133 53,159 45,705
Profit for the period attributable to owners of the
Corporation 42,160 51,082 47,924 43,917 42,966 83,133 53,159 45,705
Cash flow from operating activities (280) 150,084 166,976 228,230 13,807 120,961 112,275 203,343
Cash flow from operations 99,845 140,515 155,982 161,695 97,043 104,622 113,075 126,946
Acquisitions of property, plant and equipment,
intangible and other assets 82,833 104,433 112,841 108,095 77,283 86,234 87,459 124,392
Free cash flow 17,012 36,082 43,141 53,600 19,760 18,388 25,616 2,554
Capital intensity 25.3% 24.3% 24.3% 23.0% 24.5% 27.1% 27.4% 38.3%
Earnings per share(2)
From continuing and discontinued operations
Basic 0.87 1.05 0.99 0.90 0.88 1.71 1.09 0.94
Diluted 0.86 1.04 0.98 0.90 0.88 1.70 1.09 0.93
From continuing operations
Basic 0.87 1.05 0.99 0.90 0.81 0.64 1.09 0.94
Diluted 0.86 1.04 0.98 0.90 0.81 0.63 1.09 0.93
From discontinued operations
Basic — — — — 0.07 1.07 — —
Diluted — — — — 0.07 1.06 — —
(1) The addition of quarterly information may not correspond to the annual total due to rounding.
(2) Per multiple and subordinate voting share.
(3) During the fourth quarter of fiscal 2013, Cogeco Cable adjusted the preliminary allocation of the purchase price of Atlantic Broadband and retroactively adjusted
the second and third quarters of fiscal 2013 to reflect new information obtained about facts and circumstances that existed as at the acquisition date and, if they
had been known, would have impacted the amounts recognized at that date. The impact on the previous quarters are as follows:
Quarters ended
February 28, 2013 May 31, 2013
Three months Three months
(In thousands of Canadian dollars) $ $
Increase in depreciation of property, plant and equipment 5,059 5,126
Increase in amortization of intangible assets 2,850 2,936
Decrease in deferred income taxes (331)(2,930)
Net decrease on profit for the period 7,578 5,132
SEASONAL VARIATIONS
Cogeco Cable’s operating results are not generally subject to material seasonal fluctuations except as follows. In the Canadian and American
cable services segment customer growth in the Television service and HSI service are generally lower in the second half of the fiscal year as a
result of a decrease in economic activity due to the beginning of the vacation period, the end of the television season, and students leaving their
campuses at the end of the school year. Cogeco Cable offers its services in several university and college towns such as Kingston, Windsor,
St.Catharines, Hamilton, Peterborough, Trois-Rivières and Rimouski in Canada and in the Pennsylvania region, and to a lesser extent in South
Carolina, Maryland and Delaware in United States. In the American cable services segment, Miami region is also subject to seasonal fluctuations
due to the winter season residents returning home from late Spring through the Fall. Furthermore, the third and fourth quarter’s operating margin
is usually higher as no management fees are paid to COGECO Inc. Under the Management Agreement, Cogeco Cable pays a fee equal to 2%
of its total revenue subject to a maximum amount. As the maximum amount has been reached in the second quarters of fiscal 2013 and 2012,
Cogeco Cable did not pay management fees in the second halves of either year.