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30 COGECO CABLE INC. 2008 Management’s Discussion and Analysis
Cogeco Cable’s contractual obligations as at August 31, 2008 are shown in the table below:
YEARS ENDED AUGUST 31. 2009 2010 2011 2012 2013 THERE-
AFTER
TOTAL
(in thousands of dollars) $ $ $ $ $ $ $
LONG-TERM DEBT (1) 413,084 40,723 399,798 175,000 – 100,000 1,128,605
CAPITAL LEASE OBLIGATIONS (2) 3,871 2,871 1,686 951 – – 9,379
OPERATING LEASES AND OTHERS 23,767 17,694 14,222 12,726 12,318 23,861 104,588
OTHER LONG-TERM OBLIGATIONS(3) – – – – – – 268,233
TOTAL CONTRACTUAL OBLIGATIONS(4) 440,722 61,288 415,706 188,677 12,318 123,861 1,510,805
(1) INCLUDES PRINCIPAL REPAYMENTS AND THE IMPACT OF CROSS-CURRENCY SWAP AGREEMENTS, BUT EXCLUDES CAPITAL LEASES.
(2) INCLUDES PRINCIPAL REPAYMENTS AND FINANCIAL EXPENSE.
(3) OTHER LONG-TERM LIABILITIES REFLECTED ON COGECO CABLE’S BALANCE SHEET INCLUDE DEFERRED AND PREPAID INCOME AND OTHER LIABILITIES, PENSION PLAN
LIABILITIES AND ACCRUED EMPLOYEE BENEFITS AND FUTURE INCOME TAX LIABILITIES. THE NATURE OF THOSE OBLIGATIONS PREVENTS THE CORPORATION FROM
ESTIMATING AN ANNUAL BREAKDOWN.
(4) ANNUAL BREAKDOWN EXCLUDES OTHER LONG-TERM OBLIGATIONS.
CANADIAN OPERATIONS
CUSTOMER STATISTICS
NET ADDITIONS % OF PENETRATION(1)
2008 2007 AUGUST 31
AUGUST 31,
2008 ACTUAL
INITIAL
GUIDELINES(2) ACTUAL 2008 2007
RGU 1,991,908 203,400 190,000 232,572 NA NA
BASIC CABLE SERVICE CUSTOMERS 857,094 7,937 10,000 15,980 NA NA
HSI SERVICE CUSTOMERS(3) 473,467 57,631 55,000 72,756 57.7 52.2
DIGITAL TELEVISION SERVICE CUSTOMERS 441,746 61,867 45,000 52,515 52.4 45.8
TELEPHONY SERVICE CUSTOMERS(4) 219,601 75,965 80,000 91,321 30.5 21.7
(1) AS A PERCENTAGE OF BASIC CABLE SERVICE IN AREAS SERVED.
(2) ACCORDING TO THE FISCAL 2007 ANNUAL REPORT.
(3) CUSTOMERS SUBSCRIBING ONLY TO HSI SERVICE TOTALLED 75,433 AS AT AUGUST 31, 2008 COMPARED TO 70,402 AS AT AUGUST 31, 2007.
(4) CUSTOMERS SUBSCRIBING ONLY TO TELEPHONY SERVICE TOTALLED 1,311 AS AT AUGUST 31, 2008 COMPARED TO 782 AT AUGUST 31, 2007.
All services generated lower growth in fiscal 2008 compared to fiscal 2007, except for the Digital Television service. During
fiscal 2008, Telephony service customers grew by 75,965 to reach 219,601. This growth is mostly attributable to the launch of the
service in new markets and increased penetration in areas where the service is already offered. Coverage of homes passed has
now reached 84% compared to 78% last year. The net additions of Basic Cable service customers reached 7,937, compared to
15,980 in fiscal 2007. The number of customers adhering to the HSI service stood at 57,631 compared to 72,756 in fiscal 2007. The
decreased growth in these services reflects early signs of maturation of the market.
The net additions of Digital Television service customers stood at 61,867 compared to 52,515 in fiscal 2007. The increase in net
additions is due to targeted marketing initiatives in 2008 to improve the penetration rate. It also reflects the continuing strong interest
for HD technology.