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32 COGECO CABLE INC. 2006 Management’s Discussion and Analysis
NON-GAAP FINANCIAL MEASURES
This section describes Non-GAAP fi nancial measures used by Cogeco Cable throughout this MD&A. It also provides
reconciliations between these Non-GAAP measures and the most comparable GAAP fi nancial measures. These fi nancial
measures do not have standard defi nitions prescribed by Canadian GAAP and may not be comparable with similar measures
presented by other companies. These measures include “cash fl ow from operations” and “free cash fl ow”.
CASH FLOW FROM OPERATIONS
Cash fl ow from operations is used by Cogeco Cable’s management and investors to evaluate cash fl ow generated by
operating activities excluding the impact of changes in non-cash operating items. This allows the Corporation to isolate
the cash fl ow from operating activities from the impact of cash management decisions. Cash fl ow from operations is
subsequently used in calculating the Non-GAAP measure, “free cash fl ow”. Cash fl ow from operations is calculated
as follows:
YEARS ENDED AUGUST 31, 2006 2005
(in thousands of dollars) $ $
CASH FLOW FROM OPERATING ACTIVITIES 195,790 194,595
CHANGES IN NON-CASH OPERATING ITEMS (1,051) (23,657)
CASH FLOW FROM OPERATIONS 194,739 170,938
FREE CASH FLOW
Free cash fl ow is used by Cogeco Cable’s management and investors to measure the Corporation’s ability to repay debt,
distribute capital to its shareholders and fi nance its growth. Free cash fl ow is calculated as follows:
YEARS ENDED AUGUST 31, 2006 2005
(in thousands of dollars) $ $
CASH FLOW FROM OPERATIONS 194,739 170,938
ACQUISITION OF FIXED ASSETS (140,941) (110,365)
INCREASE IN DEFERRED CHARGES (20,607) (13,382)
ASSETS ACQUIRED UNDER CAPITAL LEASES – AS PER NOTE 15 B) ON PAGE 59 (2,898) (1,924)
FREE CASH FLOW 30,293 45,267