Cogeco 2013 Annual Report Download - page 44

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Management's discussion and analysis (“MD&A”) COGECO CABLE INC. 2013 43
Operating income before depreciation and amortization and operating margin
As a result of revenue growth exceeding operating expenses, fiscal 2013 fourth-quarter operating income before depreciation and amortization
amounted to $159.1 million, or 3.8% higher than in the same period of the prior year. Operating margin increased to 51.5% from 50.8% when
compared to fiscal 2012 fourth-quarter.
AMERICAN CABLE SERVICES
Customer statistics
Quarters ended August 31,
Net additions (losses)
August 31,
2013 2013 2012
PSU 485,658 (3,216)—
Television service customers 230,304 (3,637)—
HSI service customers 177,108 938 —
Telephony service customers 78,246 (517)—
Fiscal 2013 fourth-quarter, PSU net losses stood at 3,216. The decrease in PSU for the quarter is mainly attributable to seasonal variations resulting
from the end of the school year for college and university students and residents returning home from the Miami region for the summer, partly
offset by the increases in residential HSI customers through additional marketing focus on bundle package offerings and increased overall demand
given the higher speed offerings with the rollout of DOCSIS 3.0 capabilities in 2012 to a majority of Atlantic Broadband's markets, as well as
increased commercial HSI.
Operating results
Quarters ended
August 31,
2013 August 31,
2012 Change
(in thousands of dollars, except percentages) $$ %
Revenue 91,411 — —
Operating expenses 51,629 — —
Operating income before depreciation and amortization 39,782 — —
Operating margin 43.5% —
Fiscal 2013 fourth-quarter revenue reached $91.4 million mainly as a result of (i) an increase in HSI revenue from continued marketing focus
driving HSI subscriber growth; (ii) an increase in Telephony revenue and an increase in commercial revenue as Atlantic Broadband continues to
expand its non-residential customer base through targeted marketing efforts. Fiscal 2013 fourth-quarter operating expenses amounted to $51.6
million and operating income before depreciation and amortization reached $39.8 million, and consequently, operating margin stood at 43.5%.
Atlantic Broadband's operating results are in line with management's expectations.
ENTERPRISE SERVICES
Operating results
Quarters ended
August 31,
2013 August 31,
2012 Change
(in thousands of dollars, except percentages) $$ %
Revenue 70,548 23,133 —
Operating expenses 43,649 11,876 —
Operating income before depreciation and amortization 26,899 11,257 —
Operating margin 38.1% 48.7%
Revenue
Fiscal 2013 fourth-quarter revenue reached $70.5 million compared to $23.1 million for the same period last year. Revenue increased for the
period primarily due to the three month results of PEER 1 recently acquired as well as CDS's organic growth.