Cogeco 2012 Annual Report Download - page 22

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Management’s Discussion and Analysis (MD&A) COGECO CABLE INC. 2012 21
PERFORMANCE HIGHLIGHTS
Original projections
October 25, 2011(1)
Fiscal 2012
Revised projections
July 11, 2012(1)
Fiscal 2012
Actual
Fiscal 2012
Achievement
of the revised
projections(2)
Fiscal 2012
(in millions of dollars, except percentages and PSU growth) $$$
Financial guidelines
Revenue 1,455 1,280 1,278 Achieved
Operating income before depreciation and amortization 600 585 589 Achieved
Operating margin 41.2% 45.7% 46.1% Achieved
Depreciation and amortization 235 270 275 Under-achieved
Financial expense 65 65 64 Surpassed
Current income taxes expense 75 90 85 Surpassed
Profit for the year 225 225 225 Achieved
A
cquisitions of property, plant and equipment, intangible and other assets 360 340 375 Under-achieved
Free cash flow 100 90 66 Under-achieved
Net customer additions guidelines
PSU growth 90,000(3) 72,000 71,664 Achieved
(1) The original projections included the Portuguese subsidiary, Cabovisão, which was sold on February 29, 2012. Revised projections were changed to exclude
Cabovisão and take into account Management’s view of the 2012 fiscal year.
(2) Achievement of the projections is defined as within 1% above or below the projected amount.
(3) The PSU net additions projections amounts in terms of RGU to 225,000 net additions as presented in the Fiscal 2012 financial guidelines of the 2011 Annual
Report.
For the 2012 fiscal year, Cogeco Cable achieved or surpassed most of its revised projections issued on July 11, 2012.
Revenue, operating income before depreciation and amortization and operating margin targets were achieved when compared to the revised
projections, mainly as a result of the achievement of the projected PSU growth. For further details on the Corporation’s operating results,
please refer to the “Operating and financial results” section.
Profit for the year amounting to $225 million met the revised projection issued on July 11, 2012, mainly due to the improvement of operating
income before depreciation and amortization, partly offset by the increase of depreciation and amortization expense. For further details on the
Corporation’s operating results, please refer to the “Profit (loss) for the year” section.
Cogeco Cable under-achieved its revised projection of free cash flow and depreciation and amortization as a result of higher capital
expenditures than expected. The increase in acquisitions of property, plant and equipment, intangible and other assets is mainly due to
customer premise equipment to support PSU growth, to facility expansions and improvements to the network infrastructure. For further details
please refer to the “Cash flow analysis” section.
OPERATING AND FINANCIAL RESULTS
OPERATING RESULTS
Years ended August 31, 2012 2011 Change
(in thousands of dollars, except percentages) $$%
Revenue 1,277,698 1,184,683 7.9
Operating expenses 679,161 630,150 7.8
Management fees – COGECO Inc. 9,485 9,172 3.4
Operating income before depreciation and amortization 589,052 545,361 8.0
Operating margin 46.1% 46.0%