Cogeco 2013 Annual Report Download - page 48

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Management's discussion and analysis (“MD&A”) COGECO CABLE INC. 2013 47
The most comparable IFRS measure is cash flow from operating activities. Cash flow from operations is calculated as follows:
Quarters ended Years ended
August 31,
2013 August 31,
2012 August 31,
2013 August 31,
2012
(in thousands of dollars) $$$$
Cash flow from operating activities 228,230 203,343 545,010 450,386
Changes in non-cash operating activities (55,377) (75,065) 23,331 (3,493)
Amortization of deferred transaction costs and discounts on long-term debt 4,190 747 11,233 2,817
Income taxes paid 23,208 15,090 100,110 79,728
Current income tax expense (10,769) (15,476) (84,676) (85,216)
Financial expense paid 20,801 14,324 91,343 61,471
Financial expense (48,588) (16,017) (128,314) (64,007)
Cash flow from operations 161,695 126,946 558,037 441,686
Free cash flow is calculated as follows:
Quarters ended Years ended
August 31,
2013 August 31,
2012 August 31,
2013 August 31,
2012
(in thousands of dollars) $$$$
Cash flow from operations 161,695 126,946 558,037 441,686
Acquisition of property, plant and equipment (102,241) (119,175) (388,698) (359,581)
Acquisition of intangible and other assets (4,917) (5,217) (18,567) (15,787)
Assets acquired under finance leases (937) — (937) —
Free cash flow 53,600 2,554 149,835 66,318
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND
OPERATING MARGIN
Operating income before depreciation and amortization is used by Cogeco Cable’s management and investors to assess the Corporation’s ability
to seize growth opportunities in a cost effective manner, to finance its ongoing operations and to service its debt. Operating income before
depreciation and amortization is a proxy for cash flows from operations excluding the impact of the capital structure chosen, and is one of the
key metrics used by the financial community to value the business and its financial strength. Operating margin is a measure of the proportion of
the Corporation's revenue which is available, before income taxes, to pay for its fixed costs, such as interest on Indebtedness. Operating margin
is calculated by dividing operating income before depreciation and amortization by revenue.
The most comparable IFRS financial measure is operating income. Operating income before depreciation and amortization and operating margin
are calculated as follows:
Quarters ended Years ended
August 31,
2013 August 31,
2012 August 31,
2013 August 31,
2012
(in thousands of dollars, except percentages) $$$$
Operating income 103,681 94,709 376,239 312,180
Depreciation and amortization 114,103 64,247 382,714 275,003
Integration, restructuring and acquisitions costs 4,705 1,869 21,570 1,869
Operating income before depreciation and amortization 222,489 160,825 780,523 589,052
Revenue 470,386 324,768 1,692,466 1,277,698
Operating margin 47.3% 49.5% 46.1% 46.1%