Cogeco 2014 Annual Report Download - page 29

28 COGECO CABLE INC. 2014 MD&A
The following table highlights in Canadian dollars, the impact of a 10% increase in the US dollar or British Pound against the Canadian dollar as
the case may be, of Cogeco Cable's operating results for the year ended August 31, 2014:
Canadian
cable services American cable services Enterprise data services
As
reported
Exchange
rate
impact As reported
Exchange
rate
impact As reported
Exchange
rate
impact
(in thousands of dollars) $ $ $ $ $ $
Revenue 1,255,154 — 391,670 39,156 303,075 14,966
Operating expenses 614,116 2,022 218,573 21,844 200,553 11,511
Adjusted EBITDA 641,038 (2,022) 173,097 17,312 102,522 3,455
Acquisitions of property, plant and equipment, intangible and other assets 223,857 6,018 73,530 7,318 118,085 3,811
COMMITMENTS AND GUARANTEES
Cogeco Cable's contractual obligations at August 31, 2014 are shown in the table below:
Years ended August 31, 2015 2016 2017 2018 2019 Thereafter Total
(in thousands of dollars) $$$$$$$
Long-term debt(1) 31,757 239,994 35,845 255,230 242,150 1,943,673 2,748,649
Derivatives financial instruments — (4,712) — — — — (4,712)
Finance leases(2) 566 — — — — — 566
Operating lease agreements(3) 33,244 30,578 27,695 26,347 23,837 72,417 214,118
Other long-term contracts(4) 16,183 4,706 3,839 3,577 750 — 29,055
Acquisition of property, plant and
equipment(5) 4,501 2,435 — 544 — 17,614 25,094
Pension plan liabilities and accrued
employees benefits (6) —————6,260 6,260
Total contractual obligations(7) 86,251 273,001 67,379 285,698 266,737 2,039,964 3,019,030
(1) Including principal and excludes finance leases.
(2) Including interest.
(3) Include significant operating lease agreements for rented premises and support structures.
(4) Include long-term commitments with suppliers to provide services including minimum spend commitments.
(5) Include minimum spend commitments under acquisitions of home terminal devices and software licenses.
(6) The nature of these obligations prevents the Corporation from estimating an annual breakdown.
(7) Annual breakdown excludes pension plan liabilities and accrued employees benefits.
In the normal course of business, the Corporation enters into agreements containing features that meet the criteria for a guarantee.
In connection with the acquisition or sale of businesses or assets, in addition to possible indemnification relating to failure to perform covenants
and breach of representations and warranties, the Corporation has agreed to indemnify the seller or the purchaser against claims related to
events that occurred prior to the date of acquisition or sale. The term and amount of such indemnification will in certain circumstances be limited
by the agreement. The nature of these indemnification agreements prevents the Corporation from estimating the maximum potential liability
required to be paid to guaranteed parties. In management's opinion, the likelihood that a significant liability will be incurred under these obligations
is low. The Corporation has purchased directors and officers' liability insurance with a deductible per loss. At August 31, 2014 and 2013, no liability
with respect to these indemnifications has been recorded, except for those disclosed in Note 15 of the consolidated financial statements.
Under the terms of the Senior Secured Notes and Senior Unsecured Notes, the Corporation has agreed to indemnify the other parties against
changes in regulation relative to withholding taxes and costs incurred by the lenders due to changes in laws. These indemnifications extend for
the term of the related financings and do not provide any limit on the maximum potential liability. The nature of the indemnification agreement
prevents the Corporation from estimating the maximum potential liability it could be required to pay. At August 31, 2014 and 2013, no liability has
been recorded with respect to these indemnifications.