Cogeco 2012 Annual Report Download - page 38

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Management’s Discussion and Analysis (MD&A) COGECO CABLE INC. 2012 37
The fiscal 2013 financial guidelines are as follows:
Projections
Fiscal 2013
Actuals
Fiscal 2012
(in millions of dollars, except net customer additions and operating margin) $ $
Financial guidelines
Revenue 1,350 1,278
Operating income before depreciation and amortization 614 589
Operating margin 45.5% 46.1%
Depreciation and amortization 290 275
Financial expense 64 64
Current income taxes expense 95 85
Profit for the year from continuing operations 190 170
Profit for the year 190 225
Acquisitions of property, plant and equipment, intangible and other assets 350 375
Free cash flow(1) 105 66
Net customer addition guidelines
PSU growth 50,000 71,664
(1) Free cash flow is calculated as operating income before depreciation and amortization less financial expense, current income taxes expense and
acquisitions of property, plant and equipment, intangible and other assets.
NON-IFRS FINANCIAL MEASURES
This section describes non-IFRS financial measures used by Cogeco Cable throughout this MD&A. It also provides reconciliations between
these non-IFRS measures and the most comparable IFRS financial measures. These financial measures do not have standard definitions
prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies. These measures include “cash
flow from operations”, “free cash flow”, “operating income before depreciation and amortization” and “operating margin”.
CASH FLOW FROM OPERATIONS AND FREE CASH FLOW
Cash flow from operations is used by Cogeco Cable’s management and investors to evaluate cash flows generated by operating activities,
excluding the impact of changes in non-cash operating activities, amortization of deferred transaction costs and discounts on long-term debt,
income taxes paid or received, current income tax expense or recovery, financial expense paid and financial expense. This allows the
Corporation to isolate the cash flows from operating activities from the impact of cash management decisions. Cash flow from operations is
subsequently used in calculating the non-IFRS measure, “free cash flow”. Free cash flow is used, by Cogeco Cable’s management and
investors, to measure its ability to repay debt, distribute capital to its shareholders and finance its growth.
The most comparable IFRS measure is cash flow from operating activities. Cash flow from operations is calculated as follows:
Quarters ended August 31, Years ended August 31,
2012 2011 2012 2011
(in thousands of dollars) $ $ $ $
Cash flow from operating activities 203,343 211,847 450,386 492,085
Changes in non-cash operating activities (75,065) (70,760) (3,493) (10,409)
A
mortization of deferred transaction costs and discounts on long-term debt 747 659 2,817 2,913
Income taxes paid (received) 15,090 91 79,728 (3,067)
Current income tax recovery (expense) (15,476) 7,509 (85,216) (62,495)
Financial expense paid 14,324 9,836 61,471 69,502
Financial expense (16,017) (14,483) (64,007) (71,162)
Cash flow from operations 126,946 144,699 441,686 417,367