Cogeco 2014 Annual Report Download - page 35

34 COGECO CABLE INC. 2014 MD&A
QUARTERLY FINANCIAL HIGHLIGHTS
Fiscal 2014 Fiscal 2013 (3)
Quarters ended(1) Nov. 30 Feb. 28 May. 31 Aug. 31 Nov. 30 Feb. 28 May. 31 Aug. 31
(in thousands of dollars, except percentages and
per share data) $ $ $ $ $ $ $ $
Revenue 474,980 486,008 496,448 490,155 327,911 429,672 464,497 470,386
Adjusted EBITDA 211,522 221,616 229,389 230,830 147,176 195,826 215,182 222,539
Operating margin 44.5% 45.6% 46.2% 47.1% 44.9% 45.6% 46.3% 47.3%
Impairment of property, plant and equipment — — 32,197 3,296 — — — —
Income taxes 13,273 14,838 8,801 16,272 17,383 15,821 18,411 11,159
Profit for the period 49,698 60,381 35,514 63,848 42,113 50,833 48,079 43,870
Profit for the period attributable to owners of the
Corporation 49,698 60,381 35,514 63,848 42,113 51,035 47,877 43,870
Cash flow from operating activities 63,110 181,628 184,435 329,195 (280) 150,084 166,976 228,230
Cash flow from operations 153,264 174,013 175,595 187,276 99,731 140,401 155,868 161,581
Acquisitions of property, plant and equipment,
intangible and other assets 85,089 80,806 84,452 165,125 82,833 104,433 112,841 108,095
Free cash flow 68,175 93,207 91,143 22,151 16,898 35,968 43,027 53,486
Capital intensity 17.9% 16.6% 17.0% 33.7% 25.3% 24.3% 24.3% 23.0%
Earnings per share(2)
Basic 1.02 1.24 0.73 1.31 0.87 1.05 0.98 0.90
Diluted 1.01 1.23 0.72 1.30 0.86 1.04 0.98 0.89
(1) The addition of quarterly information may not correspond to the annual total due to rounding.
(2) Per multiple and subordinate voting share.
(3) Comparative figures have been adjusted to comply with the adoption of IAS 19 Employee Benefits. For further details, please refer to Note 3 of the consolidated
financial statements.
SEASONAL VARIATIONS
Cogeco Cable’s operating results are not generally subject to material seasonal fluctuations except as follows. In the Canadian and American
cable services segments, the number of customers in the Television services and HSI services are generally lower in the second half of the fiscal
year as a result of a decrease in economic 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, Trois-Rivières and Rimouski in Canada and in the Pennsylvania region, and to a lesser extent
in South Carolina, Maryland and Delaware in United States. In the American cable services segment, Miami region is also subject to seasonal
fluctuations due to the winter season residents returning home from late Spring through the Fall. Furthermore, the second, third and fourth quarter’s
operating margin is usually higher as very low or no management fees are paid to COGECO Inc. Under the Management Agreement, Cogeco
Cable pays a fee equal to 2% of its total revenue subject to a maximum amount. As the maximum amount has been reached in the second
quarters of fiscal 2014 and 2013, Cogeco Cable did not pay management fees in the second halves of either year.
FOURTH-QUARTER OPERATING RESULTS
OPERATING RESULTS
CONSOLIDATED
Quarters ended August 31, 2014 2013 (1) Change
(in thousands of dollars, except percentages) $$ %
Revenue 490,155 470,386 4.2
Operating expenses 259,325 247,847 4.6
Adjusted EBITDA 230,830 222,539 3.7
Operating margin 47.1% 47.3%
(1) Comparative figures have been adjusted to comply with the adoption of IAS 19 Employee Benefits. For further details, please refer to Note 3 of the consolidated
financial statements.
Fiscal 2014 fourth-quarter consolidated revenue improved by $19.8 million, or 4.2%, to reach $490.2 million compared to the prior year. For the
fourth quarter ended August 31, 2014, consolidated operating expenses increased by $11.5 million, or 4.6%, at $259.3 million. As a result,
consolidated adjusted EBITDA increased by $8.3 million, or 3.7%, to reach $230.8 million and consolidated operating margin slightly decreased
to 47.1% compared to 47.3% in the fourth quarter of fiscal 2013.