Cogeco 2006 Annual Report Download - page 6

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MESSAGE TO SHAREHOLDERS
Dear Friends:
FISCAL YEAR 2006 WAS AN EXCEPTIONAL YEAR FOR COGECO CABLE.
OUR EFFORTS WERE REWARDED WITH SUCCESS AS CONFIRMED BY THE
GROWTH OF OUR REVENUE, OPERATING INCOME BEFORE AMORTIZATION
(EBITDA)1 AND RETURN ON SHAREHOLDERS’ EQUITY. THIS WAS POSSIBLE
DESPITE A DECLINE IN FREE CASH FLOW ATTRIBUTABLE TO THE INVESTMENTS
WE MADE TO ENHANCE OUR DIGITAL TELEVISION SERVICES AND DEPLOY
OUR DIGITAL TELEPHONY SERVICE IN CANADA. THE NUMBER OF
REVENUE-GENERATING UNITS ENJOYED A REMARKABLE INCREASE
OF 62% COMPARED TO 2005 THANKS TO SOLID DOMESTIC GROWTH AND
CONSIDERABLE EXTERNAL GROWTH.
1 EBITDA OR OPERATING INCOME BEFORE AMORTIZATION IS DEFINED AS NET INCOME BEFORE AMORTIZATION, FINANCIAL EXPENSE, INCOME TAXES AND
NON-OPERATING ITEMS SUCH AS RESTRUCTURING CHARGES. COGECO CABLE BELIEVES THIS IS AN IMPORTANT MEASURE AS IT ALLOWS THE CORPORATION
TO ASSESS ITS ONGOING BUSINESS WITHOUT THE IMPACT OF AMORTIZATION EXPENSE AS WELL AS NON-OPERATING FACTORS. IT IS INTENDED TO
INDICATE COGECO CABLE’S ABILITY TO INCUR OR SERVICE DEBT, INVEST IN CAPITAL EXPENDITURES OR DEFERRED CHARGES AND ALLOWS THE
CORPORATION TO COMPARE TO ITS PEERS WHO MAY HAVE DIFFERENT CAPITAL STRUCTURES. THIS MEASURE IS NOT A DEFINED TERM UNDER CANADIAN
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP).
4 COGECO CABLE INC. 2006 Message to Shareholders