Cogeco 2013 Annual Report Download - page 30

Management's discussion and analysis (“MD&A”) COGECO CABLE INC. 2013 29
CUSTOMER STATISTICS
Net additions (losses) % of penetration(1)
Consolidated UNITED STATES (2) CANADA Years ended August 31, August 31,
August 31, 2013 2013 2012 (4) 2013 2012 (4)
PSU 2,465,780 485,658 1,980,122 5,546 73,645 (3)
Television service customers 1,065,075 230,304 834,771 (35,353) (14,870) 48.6 52.4
HSI service customers 838,445 177,108 661,337 28,437 35,301 (3) 38.3 38.8 (3)
Telephony service customers 562,260 78,246 484,014 12,462 53,214 25.7 28.6
(1) As a percentage of homes passed.
(2) Includes 485,180 PSU (237,313 Television service, 169,553 HSI service and 78,314 Telephony service customers) from the acquisition of Atlantic Broadband.
(3) In the fourth quarter of fiscal 2013, HSI customers have been adjusted upwards retroactively to comply with the industry practices and consequently, PSU and
penetration rate have been also adjusted.
(4) Net additions (losses) and penetration rates for fiscal 2012 are only for the Canadian cable services segment.
Fiscal 2013 PSU net additions for the Canadian cable services segment were lower than in the comparable period of the prior year mainly as a
result of service category maturity, competitive offers and tightening of our customer credit controls and processes. PSU net additions for the
American cable services segment were also lower than the last quarter resulting from the end of the school year for college and university students
and also, in Miami region, from winter season residents returning home from late Spring through the Fall. For fiscal 2013 net customer losses
for Television service customers stood at 35,353 compared to 14,870 for fiscal 2012. Television service customer net losses are mainly due to
promotional offers of competitors for the video service combined with the tightening of our customer credit controls in Canada. Fiscal 2013 HSI
service customers grew by 28,437 compared to 35,301 for the prior year, and the number of net additions to the Telephony service stood at
12,462 customers compared to 53,214 customers for last year. For the year ended August 31, 2013, PSU net additions stemmed primarily from
additional HSI and Telephony services, offset by losses in Television services for both Canadian and American cable services segment. For further
details on the Corporation’s customer statistics, please refer to the “Segmented operating results" section.
CASH FLOW ANALYSIS
Years ended August 31, 2013 2012
(in thousands of dollars) $$
Operating activities
Cash flow from operations 558,037 441,686
Changes in non-cash operating activities (23,331) 3,493
Amortization of deferred transaction costs and discounts on long-term debt (11,233) (2,817)
Income taxes paid (100,110) (79,728)
Current income tax expense 84,676 85,216
Financial expense paid (91,343) (61,471)
Financial expense 128,314 64,007
545,010 450,386
Investing activities (2,409,788) (374,711)
Financing activities 1,685,864 34,672
Effect of exchange rate changes on cash and cash equivalents denominated in foreign currencies 3,098 —
Net change in cash and cash equivalents from continuing operations (175,816) 110,347
Net change in cash and cash equivalents from discontinued operations (1) —49,597
Cash and cash equivalents from continuing and discontinued operations, beginning of year 215,391 55,447
Cash and cash equivalents from continuing and discontinued operations, end of year 39,575 215,391
(1) For further details on the Corporation’s cash flows attributable to discontinued operations, please refer to the “Disposal of subsidiary and discontinued operations”
in note 21 of the consolidated financial statements.
OPERATING ACTIVITIES
For fiscal 2013, cash flow from operations reached $558.0 million compared to $441.7 million last year, an increase of $116.4 million, or 26.3%
primarily due to the improvement of operating income before depreciation and amortization, partly offset by increased financial expense and by
the recent acquisition costs. For fiscal 2013, changes in non-cash operating activities generated cash outflows of $23.3 million compared to cash
inflows of $3.5 million in fiscal 2012, mainly as a result of a decrease in trade and other payables compared to an increase in the prior year, partly
offset by an increase in deferred and prepaid revenue and other liabilities compared to a decrease in the prior year.