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72 COGECO CABLE INC. 2014 Consolidated financial statements
and services. IFRS 15 supersedes the following standards: IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty
Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and 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.
The amendments to IAS 19 apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments
is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee
contributions that are calculated according to a fixed percentage of salary.
IFRIC 21 sets out the accounting for an obligation to pay a levy that is not income taxes. The interpretation addresses what an obligating
event is that gives rise to pay a levy and when should a liability be recognized.
The Corporation is in the process of determining the extent of the impact of these changes on its consolidated financial statements.
5. OPERATING SEGMENTS
The Corporation’s segment profit (loss) for the year is reported in three operating segments: Canadian cable services, American cable
services and Enterprise data services.
The Canadian and American cable services segments provide a wide range of Television, HSI and Telephony services primarily to residential
customers in Canada and in the United States, respectively. The Canadian and American cable services segment also provides business
services, including Television, HSI and Telephony services to small and medium sized businesses across its 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 services segment provides, through its data centres, colocation, managed and dedicated hosting, managed IT and
cloud services to small, medium and large enterprises and public sector customers as well as connectivity services provisioned over its
optical networks. The activities of the Enterprise data services segment are carried out in Canada, in the United States and in Europe, mostly
in the United Kingdom.
The Corporation assesses the performance of each operating segment based on its profit or loss. Financial expense and income taxes are
managed on a consolidated basis and, accordingly, are not reflected in segmented results. The inter-segment eliminations and other eliminate
any intercompany transactions included in each segment operating results and include head office activities. Transactions between operating
segments are measured at the amounts agreed to between the parties.
Year ended August 31, 2014
Canadian cable
services American cable
services Enterprise data
services
Inter-segment
eliminations
and other Consolidated
(In thousands of Canadian dollars) $ $ $ $ $
Revenue 1,255,154 391,670 303,075 (2,308) 1,947,591
Operating expenses 614,116 218,573 200,553 11,318 1,044,560
Management fees – COGECO Inc. — — — 9,674 9,674
Integration, restructuring and acquisition costs(1) 1,663 767 2,306 — 4,736
Depreciation and amortization 237,988 94,837 127,137 320 460,282
Impairment of property, plant and equipment (Note 13) 32,197 — 3,296 — 35,493
Segment profit (loss) 369,190 77,493 (30,217) (23,620) 392,846
Financial expense 130,221
Income taxes 53,184
Profit for the year 209,441
Property, plant and equipment 1,106,443 318,022 405,097 1,409 1,830,971
Intangible assets 990,487 746,700 157,659 — 1,894,846
Goodwill 4,662 571,399 644,468 — 1,220,529
Acquisition of property, plant and equipment 214,370 71,669 114,807 — 400,846
Acquisition of intangible and other assets 9,487 1,861 3,278 — 14,626
(1) The integration, restructuring and acquisition costs were primarily related to severance costs associated to the restructuring of the employee base in the
Canadian cable services and Enterprise data services segments.