Cogeco 2012 Annual Report Download - page 24

Management’s Discussion and Analysis (MD&A) COGECO CABLE INC. 2012 23
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
Fiscal 2012 profit for the year from continuing operations amounted to $169.5 million, or $3.48 per share compared to $199.2 million, or $4.10
per share in fiscal 2011. This variance for the year is mostly attributable to the increase of depreciation and amortization expense due to the
reduction of depreciation period of certain property, plant and equipment and the increase in income taxes, partly offset by the increase in
operating income before depreciation and amortization and the decrease in financial expense.
PROFIT (LOSS) FOR THE YEAR
Fiscal 2012 profit for the year amounted to $225 million, or $4.62 per share compared to a loss of $45.6 million, or $0.94 per share in
fiscal 2011. Profit progression is mostly attributable to the write-off of the Corporation’s net investment in the Portuguese subsidiary recorded
through a non-cash impairment loss in the amount of $225.9 million during the third quarter of fiscal 2011, the improvement of operating
income before depreciation and amortization and the gain on sale of the Portuguese subsidiary in fiscal 2012, partly offset by the increase of
depreciation and amortization expense due to the reduction of the depreciation period of certain property, plant and equipment.
The Corporation obtained a return on equity(1) of 20.3% for the year ended August 31, 2012 compared to a negative return on equity of 4.3% in
the prior year as a result of the impairment loss recorded in fiscal 2011.
CASH FLOW ANALYSIS
Years ended August 31, 2012 2011
(in thousands of dollars) $$
Operating activities
Cash flow from operations 441,686 417,367
Changes in non-cash operating activities 3,493 10,409
A
mortization of deferred transaction costs and discounts on long-term debt (2,817) (2,913)
Income taxes received (paid) (79,728) 3,067
Current income tax expense 85,216 62,495
Financial expense paid (61,471) (69,502)
Financial expense 64,007 71,162
450,386 492,085
Investing activities (374,711) (433,357)
Financing activities 34,672 (27,786)
Net change in cash and cash equivalents from continuing operations 110,347 30,942
Net change in cash and cash equivalents from discontinued operations (1) 49,597 (11,337)
Cash and cash equivalents from continuing and discontinued operations, beginning of year 55,447 35,842
Cash and cash equivalents from continuing and discontinued operations, end of year 215,391 55,447
(1) For further details on the Corporation’s cash flows attributable to discontinued operations, please refer to the “Disposal of subsidiary and discontinued
operations” section on page 31.
OPERATING ACTIVITIES
Fiscal 2012 cash flow from operations reached $441.7 million compared to $417.4 million for prior year. This $24.3 million increase is primarily
due to improvement of the operating income before depreciation and amortization, partly offset by the increase in current income tax expense.
Changes in non-cash operating activities generated cash inflows of $3.5 million compared to $10.4 million for the same period in fiscal 2011,
mainly as a result of a decrease in provisions compared to an increase in prior year.
(1) Return on equity is defined as profit (loss) for the year divided by average shareholders’ equity (computed on the basis of the beginning and ending balance for
a given fiscal year).