Cogeco 2014 Annual Report Download

Download and view the complete annual report

Please find the complete 2014 Cogeco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 105

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

2014
ANNUAL REPORT

Table of contents

  • Page 1
    ANNUAL REPORT 2014

  • Page 2
    ... residential and business customers analogue and digital television, high speed Internet and telephony services. Through its subsidiaries Cogeco Data Services and Peer 1 Hosting(1), Cogeco Cable Inc. provides to its commercial customers a suite of information technology services (colocation, managed...

  • Page 3
    ......Message to shareholders...Management's Discussion and Analysis ("MD&A")...Consolidated financial statements...3 Investor information...98 4 Customer statistics...100 5 Board of Directors and corporate management...101 7 Operations information...103 54 Corporate information...104 2 COGECO CABLE...

  • Page 4
    ... ("IFRS") and, therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-IFRS financial measures" section of the MD&A. CAGR is defined as the Compound Annual Growth Rate Three-year financial performance COGECO CABLE INC. 2014 3

  • Page 5
    ...operating activities Cash flow from operations(1) Acquisitions of property, plant and equipment, intangible and other assets(3) Free cash flow Financial Condition Property, plant and equipment Total assets Indebtedness(4) Shareholders' equity Capital intensity(1) Per Share Data(5) Earnings per share...

  • Page 6
    ... customers to easily find and watch the best shows and movies from Netflix through the same set-top box they use to watch Live TV. Atlantic Broadband increased residential and business Internet speeds, including the launch of our first Gigabit Internet services in the greater Miami area, leading...

  • Page 7
    ... the new ways through which Canadian consumers receive and use video programming content. Our Canadian cable operating entity, Cogeco Cable Canada, took an active part in the proceeding to share its position on the future of Canada's media broadcasting system and regulatory environment. Cogeco Cable...

  • Page 8
    ... financial 33 highlights... 9 Fiscal 2015 financial guidelines...39 19 Uncertainties and main risk factors...40 21 Environmental policy...47 21 Controls and procedures...48 24 Accounting policies...49 25 Non-IFRS financial measures...52 29 Additional Information...53 MD&A COGECO CABLE INC. 2014 7

  • Page 9
    ... Management's Discussion and Analysis ("MD&A") may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco Cable Inc.'s ("Cogeco Cable" or the "Corporation") future outlook and anticipated events, business, operations, financial...

  • Page 10
    ... packages. All residential Telephony service customers have access to direct international calling and can subscribe to various international long distance plans, the voicemail and other popular custom calling features. Business services: We provide Television, Internet and Telephony services...

  • Page 11
    .... In addition, multiple deployment (dedicated, shared and hybrid) options of storage and back-up services are available to meet customer requirements. Managed IT: We offer full service support capabilities across critical areas, such as server, operating system ("OS"), network, application...

  • Page 12
    ...by DOCSIS 3.0 technology. Business Select and Business Premium Internet services combine competitive speeds with unlimited data transfer, easy access to static email addresses as well as Cogeco Cable's renowned security services. Focus in fiscal 2015 We intend to grow our residential cable services...

  • Page 13
    ...partner and with visitors to the downtown area. Business customers and prospects benefited from a number of enhancements in 2014. We increased our Internet speed profiles and enhanced our bundled HSI, Telephony and Television service offerings. We now offer download speeds that range from 15 Mbps to...

  • Page 14
    ... our ring architecture in central Pennsylvania, and through newly negotiated fibre Indefeasible Rights to Use ("IRU") to establish peering points in several key markets including Ashburn, Virginia; Pittsburgh and Philadelphia, Pennsylvania; Buffalo, New York and Miami, MD&A COGECO CABLE INC. 2014 13

  • Page 15
    ... Miami system. By bonding up to 16 channels together, we aim to offer top speeds up to 200 Mbps over DOCSIS 3.0 in 2015 with plans to increase that further over time. This platform will allow us to stay far ahead of our competitors, support the evolution of Television services over IP and enable new...

  • Page 16
    In addition, to meet the growing demand for sales, service and technical support from our Ontario customers including on social media channels, support hours were extended to 9 am to 9 pm seven days a week. Through the focus and dedication of our field services team, installation lead times were ...

  • Page 17
    ..., at very high speed, its many local distribution systems to video content providers, public telephony networks, software application providers and to the world-wide Internet. For residential services, Cogeco Cable Canada and Atlantic Broadband are deploying optical fibres to nodes serving clusters...

  • Page 18
    ... MHz and 1 GHz markets, we are using the available spectrum to add bonded DOCSIS channels to increase speeds and to provide additional HD channels. (b) (c) Cogeco Cable Canada and Atlantic Broadband use DOCSIS systems to deliver HSI and Business IP services over HFC networks. DOCSIS has numerous...

  • Page 19
    ... the key metrics used by the financial community to value the business and its financial strength. Operating margin is calculated by dividing adjusted EBITDA by revenue. In the 2013 annual report, the Corporation projected adjusted EBITDA of $885 million for fiscal 2014, which was then increased to...

  • Page 20
    ... of 51.4% in the Enterprise data services segment. Revenue increased mainly attributable to the full year impact of the recent acquisitions which both occurred during fiscal 2013 combined with the organic growth from all of our operating segments and favorable foreign exchange rates in our foreign...

  • Page 21
    ... regard to data centre operating activities. During the third quarter of fiscal 2014, the Corporation's subsidiary, Cogeco Cable Canada, recognized an impairment of $32.2 million of property, plant and equipment, capitalized wages and borrowing costs related to an Internet Protocol Television ("IPTV...

  • Page 22
    ... only nine months of net additions since Atlantic Broadband acquisition occurred at the end of the first quarter of fiscal 2013. For further details on the Corporation's customer statistics, please refer to the "Segmented operating results" section. RELATED PARTY TRANSACTIONS Cogeco Cable Inc. is...

  • Page 23
    ... company specializing in managed IT, managed and dedicated hosting, colocation and cloud services. On November 30, 2012, the Corporation completed the acquisition of all the outstanding shares of Atlantic Broadband, an independent cable system operator formed in 2003, providing Analogue and Digital...

  • Page 24
    ... of operations since Atlantic Broadband was acquired at the end of the first quarter of fiscal 2013. The increase in the cable services segment are mainly attributable to the following factors: • An increase in customer premise equipment mainly due to the launch in fiscal 2014 of TiVo's digital...

  • Page 25
    ...loan in connection with the financing of the acquisition of Peer 1 Hosting and a portion of the Term Revolving Facility used to finance Atlantic Broadband acquisition in the amount of $367.3 million. • • • • In fiscal 2014, quarterly eligible dividends of $0.30 per share, totaling $1.20...

  • Page 26
    ... and a security interest on substantially all present and future real and personal property and undertaking of every nature and kind of the Corporation and certain of its subsidiaries. On June 30, 2014, Cogeco Cable's subsidiary, Atlantic Broadband, amended its First Lien Credit Facilities. Pursuant...

  • Page 27
    ... time; however, business or financial alternatives may be available to allow financial commitments to be met. Atlantic Broadband On August 14, 2014, Moody's Investors Service ("Moody's") maintained their ratings on Atlantic Broadband's credit facilities at "Ba3", one notch above the "B1" corporate...

  • Page 28
    ...British Pound currency, exchange rate fluctuations can increase or decrease the Corporation's operating results. For the year ended August 31, 2014, the average rates prevailing used to convert the operating results of the American cable services and a portion of the Enterprise data services were as...

  • Page 29
    ...318 Enterprise data services As reported $ 303,075 200,553 102,522 118,085 Exchange rate impact $ 14,966 11,511 3,455 3,811 COMMITMENTS AND GUARANTEES Cogeco Cable's contractual obligations at August 31, 2014 are shown in the table below: Years ended August 31, (in thousands of dollars) Long-term...

  • Page 30
    ...to net additions of 12,530 for the prior year mainly attributable to the increasing mobile penetration rate in North America and various unlimited offers launched by mobile operators causing customers to cancel their landline Telephony services for mobile telephony services only. MD&A COGECO CABLE...

  • Page 31
    ... of the prior year. The increase in adjusted EBITDA is manly attributable to revenue growth exceeding operating expenses. Consequently, operating margin increased from 49.9% to 51.1% for fiscal 2014 compared to prior year. AMERICAN CABLE SERVICES CUSTOMER STATISTICS 30 COGECO CABLE INC. 2014 MD&A

  • Page 32
    ...555 mainly due to the launch of TiVo's services, additional marketing initiatives which focused on bundle package offerings, thus increasing overall demand for the HSI residential services as well as increased commercial HSI customers. Fiscal 2014 net customer additions for Telephony services stood...

  • Page 33
    ...last year. The increase is mainly due to the full year impact of Atlantic Broadband acquisition. In addition, the increase is also due to additional PSU and programming costs, the deployment of TiVo's digital advanced television services in fiscal 2014 as well as marketing initiatives to improve PSU...

  • Page 34
    ...year Cash flow from operating activities Cash flow from operations Acquisitions of property, plant and equipment, intangible and other assets Free cash flow Capital intensity Total assets Indebtedness Per Share Data(2) Earnings per share From continuing and discontinued operations Basic Diluted From...

  • Page 35
    ... activity due to the beginning of the vacation period, the end of the television season, and students leaving their campuses at the end of the school year. Cogeco Cable offers its services in several university and college towns such as Kingston, Windsor, St.Catharines, Hamilton, Peterborough...

  • Page 36
    ..., the impact of the bundled offer of Television, HSI and Telephony services and promotional activities. Telephony service customers net losses stood at 2,538 customers compared to 1,607 customers for the same period of the prior year. OPERATING RESULTS Quarters ended August 31, (in thousands...

  • Page 37
    ...additional marketing initiatives which focused on bundle package offerings, thus increasing overall demand for the HSI residential services and commercial HSI customers. The net customer additions for Telephony services stood at 645 compared to net losses of 517 in 2013. OPERATING RESULTS Quarters...

  • Page 38
    ... August 31, 2014, operating expenses increased by $4.5 million, or 8.8%, to $56.2 million. Operating expenses increased during the fourth quarter as a result of additional programming costs, the deployment of TiVo's digital advanced television services as well as marketing initiatives to improve...

  • Page 39
    ... as well as new and replacement drops. Includes mainly head-end equipment, digital video and telephony transport as well as HSI equipment. Fiscal 2013 includes assets acquired under finance lease of $0.9 million that are excluded from the statement of cash flows. 38 COGECO CABLE INC. 2014 MD&A

  • Page 40
    ...• An increase in customer premise equipment mainly due to the acquisition of additional customer premise equipment occurred in the fourth quarter of fiscal 2014 in the Canadian cable services segment in view of the launch of TiVo digital advanced television services planned for November 3, 2014 in...

  • Page 41
    ... a result of network expansions and new customer installations. Fiscal 2015 operating expenses are expected to expand by approximately $50 million, or 4.7%, compared to fiscal 2014 mainly due to additional expenditures to support the Enterprise data services segment growth, salary increases as well...

  • Page 42
    ... service of Shaw Communications Inc. ("Shaw") which competes for television customers throughout Cogeco Cable's footprint; Rogers Wireless Communications Inc. ("Rogers"), an operator of a mobile telecommunications network in Ontario and Québec and the owner of a broadband wireless network with Bell...

  • Page 43
    ...' less popular services, further increasing our costs. As we upgrade the channel capacity of our systems and add programming to our basic, expanded basic and digital service offerings, we may face additional market constraints on our ability to pass on programming costs to our customers which could...

  • Page 44
    ... the content of programming offered to customers; The manner in which program packages are marketed to customers; The use of cable system facilities by local franchising authorities, the public and unrelated entities; Cable system ownership limitations and program access requirements; Payment of...

  • Page 45
    ... of operations due to that migration. We could be adversely impacted by our customers' switch from cable television services to programming content available over the Internet through fixed and mobile broadband connections. The growing trend towards the use of programming content available over...

  • Page 46
    ... services include set-top boxes; cable and telephony modems; servers and routers; cable; telephony switches; inter-city links; support structures; software; the "backbone" telecommunications network for our Internet access and telephony services; and construction services for expansion and upgrades...

  • Page 47
    ...access and to control programming access based on subscription packages, we may not be able to protect our cable, Internet and telephony services from piracy. If we are unable to prevent unauthorized access to our analogue and digital television programming and Internet access services, our customer...

  • Page 48
    ... Internal Audit and Risk Management. One of the main responsibilities of the Corporate CSR team is to roll-out the CSR program and related initiatives to all business units. Cogeco Cable Canada and Cogeco Data Services were already part of our extra financial reporting. Other business units will be...

  • Page 49
    ... energy efficiency, Cogeco Cable has developed key performance indicators, for social, economic and environment objectives which are tracked and reported on a monthly or quarterly basis, as appropriate. The indicators are communicated to the Management level employees. The Corporation continues to...

  • Page 50
    ... Cable Television, HSI and Telephony services and rental of equipment are recognized as the services are provided; Revenue from data services, long-distance and other pay-per-use services are recognized as the services are provided; Revenue from managed services, colocation services, cloud services...

  • Page 51
    ... instruments to manage foreign exchange risk related to its foreign denominated Senior Secured Notes Series A. In addition, the Corporation uses interest rate swaps as derivative financial instruments to manage interest rate risk related to its floating rate long-term debt. The Corporation does not...

  • Page 52
    ... SIC-31 Revenue-Barter Transactions Involving Advertising Services. Application of the standard is mandatory for all IFRS reporters and it applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. MD&A COGECO CABLE INC. 2014 51

  • Page 53
    ...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...

  • Page 54
    ... 24.1% ADDITIONAL INFORMATION This MD&A was prepared on October 31, 2014. Additional information relating to the Corporation, including its Annual Information Form, is available on the SEDAR website at www.sedar.com or on the Corporation's website at www.cogeco.ca. MD&A COGECO CABLE INC. 2014 53

  • Page 55
    CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements Management's responsibility...Independent auditor's report...Consolidated statements of profit or loss.........61 58 Notes to the consolidated financial statements...62 54 COGECO CABLE INC. 2014 Consolidated financial statements

  • Page 56
    ... financial information used elsewhere in the annual report is consistent with that of the consolidated financial statements. In fulfilling its responsibilities, management of Cogeco Cable Inc. and its subsidiaries has developed, and continues to improve administrative and accounting systems in order...

  • Page 57
    ... its cash flows for the years ended August 31, 2014 and August 31, 2013 in accordance with International Financial Reporting Standards. October 31, 2014 Montreal, Québec _____ 1 CPA auditor, CA, public accountancy permit No. A109522 56 COGECO CABLE INC. 2014 Consolidated financial statements

  • Page 58
    ...per share data) Revenue Operating expenses Management fees - COGECO Inc. Integration, restructuring and acquisition costs Depreciation and amortization Impairment of property, plant and equipment Financial expense Income taxes Profit for the year Earnings per share Basic Diluted Notes 2014 $ 1,947...

  • Page 59
    ... benefit plans actuarial adjustments Remeasurement of net defined benefit liability Related income taxes Other comprehensive income for the year Comprehensive income for the year 20 306 (83) 223 9,446 218,887 3,499 (940) 2,559 18,556 203,451 41,194 (24,700) 16,494 15,997 58 COGECO CABLE INC. 2014...

  • Page 60
    ...,256 Equity attributable to non-controlling interest $ Years ended August 31, 2014 and 2013 (In thousands of Canadian dollars) Share capital $ (Note 17) Share-based payment reserve $ Retained earnings $ Total shareholders' equity $ Consolidated financial statements COGECO CABLE INC. 2014 59

  • Page 61
    ... portion of long-term debt Non-current Long-term debt Deferred and prepaid revenue and other liabilities Pension plan liabilities and accrued employee benefits Deferred tax liabilities 20 10 16 2,686,191 23,710 6,260 484,595 3,665,485 Shareholders' equity Share capital Share-based payment reserve...

  • Page 62
    ... activities Increase (decrease) in bank indebtedness Net increases (repayments) under the revolving facilities Issuance of long-term debt, net of discounts and transaction costs Repayments of long-term debt Increase in deferred transaction costs Repayment of balance due on a business combination...

  • Page 63
    ...the Toronto Stock Exchange ("TSX") under the trading symbol CCA. The Corporation's core business through its subsidiaries is providing Cable Television, High Speed Internet ("HSI"), Telephony, information technology and other telecommunications services to its residential and commercial customers in...

  • Page 64
    ... Cable Television, HSI and Telephony services and rental of equipment are recognized as the services are provided; Revenue from data services, long-distance and other pay-per-use services are recognized as the services are provided; Revenue from managed services, colocation services, cloud services...

  • Page 65
    ... of broadcast authorities licenses and exemptions from licensing that allow access to homes and customers in a specific area. The Corporation has concluded that the Cable Distribution Licenses have indefinite useful lives since there are no legal, regulatory, 64 COGECO CABLE INC. 2014 Consolidated...

  • Page 66
    ... to maintain market leadership and profitable operations over long periods of time and the Corporation's commitment to develop and enhance its value. The Corporation reviews at the end of each reporting period whether events and circumstances continue to support indefinite useful life assessment...

  • Page 67
    ... will be received and the amount of the receivable can be measured reliably. J) SHARE-BASED PAYMENT Equity-settled awards The Corporation measures stock options granted to employees that vest rateably over the service period based on the fair value of each tranche on grant date by using the Black...

  • Page 68
    ... plan. The present values of the defined benefit obligation, the current service cost and, if applicable, the past service cost are actuarially determined using the projected unit credit method (sometimes known as the accrued benefit method pro-rated on service) based on management's best-estimate...

  • Page 69
    ... instruments to manage foreign exchange risk related to its foreign denominated Senior Secured Notes Series A. In addition, the Corporation uses interest rate swaps as derivative financial instruments to manage interest rate risk related to its floating rate long-term debt. The Corporation does not...

  • Page 70
    ... effects of all dilutive potential subordinate voting shares, which comprise stock options and ISUs granted to senior executives and designated employees. P) SEGMENT REPORTING An operating segment is a component of the Corporation that engages in business activities from which it may earn revenue...

  • Page 71
    ...as the number of overdue days of the customer's balance outstanding as well as the customer's collection history. As a result, conditions causing fluctuations in the aging of customer accounts will directly impact the reported amount of bad debt expenses (see Note 21 A)); Business combinations Fair...

  • Page 72
    ...a single model for an entity to recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods Consolidated financial statements COGECO CABLE INC. 2014 71

  • Page 73
    ... coverage areas. A wide range of broadband Internet packages, telephony and other advanced telecommunications services, such as Session Initiation Protocol ("SIP") and Primary Rate Interface ("PRI") trunk solutions are available to our business customers, depending on the area. The Enterprise data...

  • Page 74
    ... employee base in the Canadian cable services segment. (3) Acquisition for the Enterprise data services segment includes $937,000 of property, plant and equipment acquired through finance leases. The following tables set out certain geographic market information: Year ended August 31, 2014 Canada...

  • Page 75
    ... art data centre platforms. Peer 1 Hosting's primary network centre and head office are located in Vancouver, Canada. During the first quarter of fiscal 2014, the Corporation finalized the purchase price allocation of Atlantic Broadband which remained unchanged from that presented in the 2013 Annual...

  • Page 76
    ...,174 Includes cost of equipment sold, content and programming costs, payments to other carriers, data centre expenses, franchise fees and network costs. Includes advertising and marketing expenses, selling costs, billing expenses, bad debts and collection expenses. Includes office building expenses...

  • Page 77
    ... from non-deductible expenses Tax impacts related to investments in foreign operations Changes in unrecognized benefits related to tax losses Other Income taxes at effective income tax rate 2014 $ 262,625 26.65% 69,990 531 1,345 (17,929) - (753) 53,184 2013 $ (restated, Note 3) 247,669 26.96...

  • Page 78
    ... during fiscal 2014 and 2013 were as follows: Year ended August 31, 2014 Balance beginning of the year (In thousands of Canadian dollars) Property, plant and equipment Intangible assets Deferred and prepaid revenue Partnerships income Non-capital losses and other tax credits carryforwards, net of...

  • Page 79
    ...price of the options was greater than the average share price of the subordinate voting shares. 12. OTHER ASSETS At August 31, (In thousands of Canadian dollars) Transaction costs Other 2014 $ 8,265 2,938 11,203 2013 $ 6,925 3,547 10,472 78 COGECO CABLE INC. 2014 Consolidated financial statements

  • Page 80
    ...,155 1,830,971 (1) Network systems includes cable towers, headends, transmitters, fibre and coaxial networks, customer drops, and network equipment. (2) Data centre equipment includes general infrastructure, mechanical and electrical equipment, security and access control. Servers that are included...

  • Page 81
    ...,315 (1) Customer relationships include long-term contractual agreements with customers. (2) Includes reconnect and additional service activation costs, direct and incremental costs associated with the acquisition of Enterprise data service customers and favorable leases. 80 COGECO CABLE INC. 2014...

  • Page 82
    ...205,780 425,416 1,189,231 25,934 25,934 Enterprise data services Total Cogeco Data Services Peer 1 Hosting At August 31, 2014 and 2013, the Corporation tested the carrying value of goodwill and intangible assets with indefinite useful lives for impairment. The recoverable amount of each CGU is...

  • Page 83
    ... programming costs include provisions for rate increases as well as additional royalties or content costs as a result of periodical audits from service providers. The other provisions include provisions for contractual obligations and other legal obligations. 82 COGECO CABLE INC. 2014 Consolidated...

  • Page 84
    ... and can be further extended annually. The amendments also reduced the margin for the calculation of the interest rate and reduced restrictions on certain covenants. The amended and restated Term Revolving Facility also replaced Cogeco Cable's Secured Credit Facilities maturing on January 27, 2017...

  • Page 85
    ...'s option at any time, in whole or in part, prior to maturity, at 100% of the principal amount plus a make-whole premium. d) On June 27, 2013, the Corporation completed, pursuant to a private placement, the issuance of US$215 million ($225.3 million) Senior Secured Notes net of transaction costs of...

  • Page 86
    ...not changed. All other terms and conditions related to covenants, interest rates and maturity remained the same. In connection with the amendment, transaction costs of US$0.4 million were incurred. 17. SHARE CAPITAL A) AUTHORIZED Unlimited number of: Class A Preference shares, without voting rights...

  • Page 87
    ... Plan, which is accessible to all employees up to a maximum of 7% of their base annual salary and the Corporation contributes 25% of the employee contributions. The subscriptions are made monthly and employee subordinate voting shares are purchased on the stock market. Stock option plan A total...

  • Page 88
    ... to serve on the Board of the Corporation. Each existing or new member of the Board may elect to be paid a percentage of the annual retainer in the form of deferred share units ("DSUs") with the balance, if any, being paid in cash. The number of DSUs that a member is entitled to receive is based on...

  • Page 89
    ... for employee future benefits for all plans, consisting of cash contributed by the Corporation to its funded pension plans, cash payments directly to beneficiaries for its unfunded other benefit plans, and cash contributed to its defined contribution plans. 88 COGECO CABLE INC. 2014 Consolidated...

  • Page 90
    The total expense related to these plans is as follows: Years ended August 31, (in thousands of Canadian dollars) Recognized in: Operating expenses Salaries, employee benefits and outsourced services Current service cost Past service cost Financial expense Other 2014 $ 2013 $ (restated, Note 3) ...

  • Page 91
    ...-grade fixed-rate Corporate bonds, which would reduce the discount rate used, will increase the present value of the defined benefit obligation. However, this increase would be partly offset by an increase in the value of plan investments in debt securities. 90 COGECO CABLE INC. 2014 Consolidated...

  • Page 92
    ... to cover the related credit risk. The Corporation has credit policies in place and has established various credit controls, including credit checks, deposits on accounts and advance billing, and has also established procedures to suspend the availability of services when customers have fully...

  • Page 93
    ... receivable 2014 $ 89,522 (5,593) 83,929 11,585 95,514 2013 $ 82,292 (3,322) 78,970 8,015 86,985 Trade accounts receivable past due is defined as amount outstanding beyond normal credit terms and conditions for the respective customers. A large portion of the Corporation's customers are billed...

  • Page 94
    ... Pounds. At August 31, 2014, the investments for Atlantic Broadband and for Peer 1 Hosting in aggregate amounted to US$1.1 billion and £62.6 million while long-term debt hedging these net investments were US$860.5 million and £55.6 million, respectively. The exchange rate used to convert the US...

  • Page 95
    ... terms of the derivative financial instruments and observable market data, such as interest and currency exchange rate curves. C) CAPITAL MANAGEMENT The Corporation's objectives in managing capital are to ensure sufficient liquidity to support the capital requirements of its various businesses...

  • Page 96
    ...of the Corporation's voting shares. On September 1, 1992, Cogeco Cable Inc. executed a Management Agreement with COGECO Inc. under which the parent company agreed to provide certain executive, administrative, legal, regulatory, strategic and financial planning services and additional services to the...

  • Page 97
    ... Corporation. The compensation paid or payable to key management personnel for employee services is as follows: Years ended August 31, (In thousands of Canadian dollars) Salaries and other short-term employee benefits Post-employment benefits Share-based payments 2014 $ 3,718 980 2,042 6,740 2013...

  • Page 98
    24. GOVERNMENT ASSISTANCE In 2013, the Corporation recorded tax credits related to scientific research and experimental development in the amount of $690,000. These credits were accounted as a reduction of operating expenses. Consolidated financial statements COGECO CABLE INC. 2014 97

  • Page 99
    ... time; however, business or financial alternatives may be available to allow financial commitments to be met. Atlantic Broadband On August 14, 2014, Moody's Investors Service ("Moody's") maintained their ratings on Atlantic Broadband's credit facilities at "Ba3", one notch above the "B1" corporate...

  • Page 100
    ... Cogeco Cable's and Atlantic Broadband's credit ratings: At August 31, 2014 Cogeco Cable Senior Secured Notes and Debentures Senior Unsecured Notes Atlantic Broadband First Liens Credit Facilities Moody's NR NR Ba3 DBRS BBB (low) BB NR Fitch BBBBB+ NR S&P BBB BBBB NR : Not rated A security...

  • Page 101
    ..., 2014 PSU CANADA UNITED STATES Television service customers CANADA Penetration as a percentage of homes passed UNITED STATES Penetration as a percentage of homes passed HSI CANADA Penetration as a percentage of homes passed UNITED STATES Penetration as a percentage of homes passed Telephony service...

  • Page 102
    ...éal (Québec) President and Chief Executive Officer Olameter Inc. (Telemetry company) Board Chair CLAUDE A. GARCIA, B.A., B. COM. Montréal (Québec) Corporate Director LOUIS AUDET, Eng., MBA, C.M. Westmount (Québec) President and Chief Executive Officer Cogeco Cable Inc. and COGECO Inc. HARRY...

  • Page 103
    CORPORATE HEAD OFFICE 5 Place Ville Marie Suite 1700 Montréal (Québec) H3B 0B3 www.cogeco.ca CORPORATE MANAGEMENT LOUIS AUDET President and Chief Executive Officer ELIZABETH ALVES Vice President, Internal Audit and Risk Management NATHALIE DORVAL Vice President, Regulatory Affairs and Copyright ...

  • Page 104
    ... 5 Place Ville Marie Suite 1700 Montréal (Québec) H3B 0B3 COGECO DATA SERVICES 413 Horner Avenue Toronto (Ontario) M8W 4W3 www.cogecodata.com PEER 1 HOSTING 1000 - 555 West Hastings Street Vancouver (British Columbia) V6B 4N5 www.peer1.com Operations and corporate information COGECO CABLE INC...

  • Page 105
    ... AND SENIOR SECURED NOTES Computershare Trust Company of Canada QUARTER ENDS November, February, May YEAR END August 31 INQUIRIES The Annual Report, Annual Information Form and Quarterly Reports are available in the Investor Relations section of the Corporation's website (www.cogeco.ca) or upon...