Cogeco 2015 Annual Report Download

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Table of contents

  • Page 1
    P ow e r f u l co n n e c t i o n s f o r o u r c u s to m e r s G e n u i n e co n n e c t i o n s w i t h o u r c u s to m e r s 2015 annual rePort

  • Page 2
    ... video, internet and telephony services through its two-way broadband fibre networks. Through its subsidiary Cogeco peer 1, Cogeco Cable inc. provides its business customers with a suite of information technology services (colocation, network connectivity, managed hosting, cloud services and managed...

  • Page 3
    ...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. 2 ǀ THrEE-YEAr fiNANCiAl pErforMANCE coGeco cable inc. 2015

  • Page 4
    ... of dollars, except percentages and per share data) 2015 $ 2014 $ CHANGE % oPeraTionS revenue adjusted eBiTda operating margin integration, restructuring and acquisition costs Settlement of a claim with a supplier Impairment of property, plant and equipment Profit for the year CASH flow Cash...

  • Page 5
    ...Peeters Chairman of the Board data services segment, we have combined our business units and product offerings, positioning ourselves to increase operational efficiencies and leverage the global footprint. In all our operating segments, our solid management teams strive to further...

  • Page 6
    ... growth through the MetroCast Connecticut acquisition, Atlantic Broadband increased its customer growth in fiscal 2015, by 3.5%, among the fastest growth rates in the United States cable industry. Enterprise data services segment In May 2015, Cogeco Cable Inc. built on its...

  • Page 7
    ...CSR program in our business units, as well as equipment energy consumption (such as set-top boxes) and conflict minerals, two areas of environmental concern that are currently receiving significant attention in the communications industry. 2016 outlooK in the canadian and american cable services...

  • Page 8
    ... guidelines...42 20 11. Uncertainties and main risk factors...43 23 12. Corporate social responsibility program...50 24 13. Controls and procedures...51 27 14. Accounting policies...51 28 15. Non-IFRS financial measures...54 32 16. Additional Information...56 MD&A COGECO CABLE INC. 2015 7

  • Page 9
    ... differ materially from what Cogeco Cable currently expects. These factors include risks such as technological changes, changes in markets and competition, increased cord-shaving or cord-cutting of our services, increased programming costs or support structure costs, the successful implementation of...

  • Page 10
    ...and programming offerings of mainly full digital video services. Our customers have access to a basic service, pay and discretionary services, On-demand services, high definition television ("HDTV") and advanced video services such as TiVo. Internet services: In most of our territories (where DOCSIS...

  • Page 11
    ... systems to video content providers, other 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 of typically 367 homes passed and 355 homes...

  • Page 12
    ...1 GHz markets, Atlantic Broadband is using the available spectrum to add bonded DOCSIS channels to increase speeds and to provide additional HD channels. Cogeco Cable Canada and Atlantic Broadband use DOCSIS technology to deliver Internet and business services over HFC networks. DOCSIS has numerous...

  • Page 13
    ... provides clients with access to a fully managed hosted services including servers, storage, software, load-balancers, networking, security, in addition to support experts, to help manage e-commerce online applications. The solution may also provide certain customers with access to PCI-DSS compliant...

  • Page 14
    ... as iPhone Operating System ("iOS") and Android mobile applications. The TiVo platform will further allow us to expand advanced video capabilities and features in the future. We expanded our HD TV programming line-up offering over 180 HD channels in the majority of our Ontario markets. In addition...

  • Page 15
    ... customers with access to the best digital quality sound and picture, 35 new HD channels were added in the Aiken, South Carolina region. Atlantic Broadband business customers and prospects benefited from a number of initiatives in 2015 including enhancements to its Metro Ethernet service offering...

  • Page 16
    ...increase in multi-product business customers. During fiscal 2015, Cogeco Cable Canada continued the deployment of FTTH systems using the RFoG technology in all new residential developments which meet specific criteria of size, proximity to the existing plant and service penetration rate. RFoG offers...

  • Page 17
    ...teams with an emphasis on the development of residential sales and marketing teams and technical teams in support of overall growth. Specifically, we will continue efforts to expand online services as well as our support and communication channels, we will remain focused on 16 COGECO CABLE INC. 2015...

  • Page 18
    ... Peer 1, the sales organization was restructured to align with the company's product focus and key vertical markets. In addition, the realignment of the sales structure promotes the care and growth of existing customers and the expansion of new customer opportunities. MD&A COGECO CABLE INC. 2015...

  • Page 19
    ... On Demand Cloud services and a Virtual Data Centre product to market. Furthermore, we introduced customer support features to better support our client base. New customer support practices implemented in fiscal 2015 included a vertically aligned specialist support team, phone system improvements...

  • Page 20
    ... the Enterprise data services segment. For fiscal 2015, Cogeco Cable achieved or surpassed virtually all of its key performance indicators compared to its original projections issued on October 31, 2014. For further details on the Corporation's operating results, please refer to the "Operating and...

  • Page 21
    ...Canadian cable services segment combined with the favorable foreign exchange rates for our foreign operations compared to fiscal 2014. For further details on the Corporation's revenue, please refer to the "Segmented operating results" sections. OPERATING EXPENSES AND MANAGEMENT FEES For fiscal 2015...

  • Page 22
    ... and equipment related to an Internet Protocol Television ("IPTV") project which had to be abandoned as a result of unexpected performance issues encountered with the platform. In addition, during the fourth quarter of fiscal 2014, the Corporation recognized in its Enterprise data services segment...

  • Page 23
    ... of MetroCast Connecticut, partly offset by net losses in the Canadian cable services segment as a result of 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...

  • Page 24
    ... acquisitions including Atlantic Broadband, Cogeco Data Services and Peer 1 Hosting. Consequently, the services, time and efforts of COGECO's management being supplied to the Corporation have also increased significantly. The Audit Committee ultimately determined that the management fees were no...

  • Page 25
    ... below. BUSINESS COMBINATION IN FISCAL 2015 On August 20, 2015, Atlantic Broadband, a wholly-owned subsidiary of Cogeco Cable Inc., completed the acquisition of substantially all of the net assets of MetroCast Connecticut, which served 27,256 video, 22,673 Internet and 7,817 telephony customers at...

  • Page 26
    ..., plant and equipment was mainly due to additional customer premise equipment for the launch of TiVo digital advanced video services on November 3, 2014 in Ontario and on March 30, 2015 in Québec, the increase in line extensions to extend and improve network capacity in the areas served as well...

  • Page 27
    ... customer premise equipment resulting from the launch in fiscal 2014 of TiVo digital advanced video services, the PSU growth, the increase in scalable infrastructure and line extensions to extend and improve network capacity in the areas served as well as higher foreign exchange rates compared...

  • Page 28
    ... CAPITAL As part of the usual conduct of its business, Cogeco Cable maintains a working capital deficiency due to a low level of trade and other receivables since a large proportion of the Corporation's customers pay before their services are rendered, unlike trade and other payables, which are...

  • Page 29
    ... LIQUIDITY 7.1 CAPITAL STRUCTURE The table below summarizes debt-related financial ratios over the last two fiscal years and the fiscal 2016 guidelines: Years ended August 31, Average cost of indebtedness(2) Fixed rate indebtedness(3) Average term: long-term debt (in years) Net secured indebtedness...

  • Page 30
    ... Outstanding options Exercisable options Number of shares/options 15,691,100 33,537,209 700,053 243,275 Amount $ 98,346 918,270 7.3 FINANCING In connection with the acquisition of MetroCast Connecticut by Cogeco Cable's subsidiary, Atlantic Broadband, on August 20, 2015, the First Lien Credit...

  • Page 31
    ... the major part of the purchase prices for Atlantic Broadband and Peer 1 Hosting were borrowed directly in US dollars and British Pounds. The following table shows the investments in foreign operations outstanding at August 31, 2015: Type of hedge Net investment Net investment Notional amount of...

  • Page 32
    ... $ 46,986 26,795 20,191 7,927 Enterprise data services As reported $ 313,618 204,169 109,449 112,419 Exchange rate impact $ 18,516 12,338 6,178 3,751 7.6 COMMITMENTS AND GUARANTEES Cogeco Cable's contractual obligations at August 31, 2015 are shown in the table below: Years ended August 31, (in...

  • Page 33
    ...a result of the impact of bundle offers, partly offset by 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. 32 COGECO CABLE INC. 2015 MD&A

  • Page 34
    ... of higher programming and content costs and additional marketing initiatives related to the launch of TiVo digital advanced video services on November 3, 2014 in Ontario and on March 30, 2015 in Québec, mostly offset by cost reduction initiatives. In addition, operating expenses were negatively...

  • Page 35
    ... as increased commercial Internet customers. TELEPHONY Fiscal 2015 telephony service customers net additions stood at 11,578, of which 7,817 net additions came from the acquisition of MetroCast Connecticut. The net variance results mainly from the impact of bundle offers. 34 COGECO CABLE INC. 2015...

  • Page 36
    ...The increase is mainly due to the appreciation of the US dollar over the Canadian dollar, higher programming and content costs, costs to serve additional PSU, marketing initiatives to improve PSU growth as well as the deployment of TiVo digital advanced video services. Fiscal 2015 operating expenses...

  • Page 37
    ... opportunity for Cogeco Cable by bringing the teams and capabilities together and therefore, positioning it to increase operational efficiencies, streamline the product offerings and leverage the global footprint. For the year ended August 31, 2015, the Corporation recognized restructuring costs of...

  • Page 38
    ...fiscal 2014. Internet net additions continue to stem from the enhancement of the product offering, the impact of the bundled offer of video, Internet and telephony services, the launch of TiVo's services, promotional activities and the growth in the business sector. MD&A COGECO CABLE INC. 2015 37

  • Page 39
    ... of MetroCast Connecticut. The net variance is due to the launch of TiVo's services, additional marketing initiatives which focused on bundle package offerings, thus increasing overall demand for the Internet residential services and commercial Internet customers. 38 COGECO CABLE INC. 2015 MD...

  • Page 40
    ... over the Canadian dollar, higher programming and content costs, costs to serve additional PSU, marketing initiatives to improve PSU growth, the deployment of TiVo digital advanced video services and year end adjustments. Fiscal 2015 fourth-quarter operating expenses in local currency amounted to...

  • Page 41
    ... costs. BUSINESS COMBINATION IN FISCAL 2015 On August 20, 2015, Atlantic Broadband, a wholly-owned subsidiary of Cogeco Cable Inc., completed the acquisition of substantially all of the net assets of MetroCast Connecticut, which served 27,256 video, 22,673 Internet and 7,817 telephony customers...

  • Page 42
    ... assets 2015 $ 43,572 21,633 21,648 4,583 10,476 101,912 23,237 (2) 125,147 3,645 1,154 4,799 129,946 (1) (2) Includes mainly home terminal devices as well as new and replacement drops. Includes mainly head-end equipment, digital video and telephony transport as well as Internet equipment. 2014 $ 42...

  • Page 43
    ... services due to the increasing market demand, the completion of the remaining pods of the Barrie, Ontario data centre facility as well as the construction of the first pod in fiscal 2015 of a new data centre facility in Montréal, Québec as well as network expansions and new customer installations...

  • Page 44
    ... Direct, the direct-to-home satellite service of Shaw Communications Inc. ("Shaw") which competes for video customers throughout our footprint; Rogers Wireless Communications Inc. ("Rogers"), an operator of a mobile telecommunications network and the owner of a broadband wireless network with Bell...

  • Page 45
    ... in substantial portions of their service areas. The fibre optic technologies they are using are capable of carrying two-way video, Internet with substantial bandwidth and telephony services, each of which is comparable to the services Cogeco Cable Canada and Atlantic Broadband offer. The ILECs also...

  • Page 46
    ...' 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 47
    ... customers, as well as to consider additional funding contributions from TSPs to support the offering of this expanded basic telecommunications service at affordable rates throughout Canada. This proceeding is still pending and its outcome cannot be assessed at this time. Our American cable business...

  • Page 48
    ... franchise agreements, pay franchise fees, provide public, educational and governmental access channel capacity and support payments or provide other free services to franchising authorities. These varying regulatory requirements will benefit our competitors. Atlantic Broadband could be materially...

  • Page 49
    ...boxes, cable and telephony modems, servers and routers, fibre optic cable and photoelectronic devices, telephony switches, inter-city links, support structures, software, the "backbone" telecommunications network for our Internet access and telephony services, and construction services for expansion...

  • Page 50
    ... of service, excessive call volume to call centres and damage to our customers' equipment and data or ours. Further, as IP based traffic continues to grow very rapidly over our networks and new technology, systems, software and equipment are deployed more quickly in order to manage this increased...

  • Page 51
    ... are tracked and reported on a biannual basis to the Corporate Governance Committee. 12.2 FISCAL 2015 ACTIVITIES AND ACHIEVEMENTS During fiscal 2015, the key initiatives of the CSR Program were rolled-out to our business units, namely Atlantic Broadband, Cogeco Cable Canada and Cogeco Peer 1. Some...

  • Page 52
    ... for video, Internet 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 colocation, network connectivity, managed hosting, cloud...

  • Page 53
    .... Direct and incremental costs associated with the acquisition of Enterprise data service customers are capitalized. DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT AND AMORTIZATION OF INTANGIBLE ASSETS Measurement of property, plant and equipment and intangible assets with finite useful lives...

  • Page 54
    ...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 Levies which sets out...

  • Page 55
    ...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 debt, income taxes paid, current income...

  • Page 56
    ... Capital intensity is used by Cogeco Cable's management and investors to assess the Corporation's investment in capital expenditures in order to support a certain level of revenue. Capital intensity ratio is defined as amount spent for acquisitions of property, plant and equipment, intangible and...

  • Page 57
    16. ADDITIONAL INFORMATION This MD&A was prepared on October 28, 2015. 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 corpo.cogeco.com. 56 COGECO CABLE INC. 2015 MD&A

  • Page 58
    CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements Management's responsibility...Independent auditor's report...Consolidated statements of profit or loss...... Notes to the consolidated financial statements...65 Consolidated financial statements COGECO CABLE INC. 2015 57

  • Page 59
    ... been approved by the Board of Directors. Operating and 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...

  • Page 60
    ... its cash flows for the years ended August 31, 2015 and August 31, 2014 in accordance with International Financial Reporting Standards. October 28, 2015 Montréal, Québec _____ 1 CPA auditor, CA, public accountancy permit No. A109522 Consolidated financial statements COGECO CABLE INC. 2015 59

  • Page 61
    ... data) Revenue Operating expenses Management fees - COGECO Inc. Integration, restructuring and acquisition costs Settlement of a claim with a supplier Depreciation and amortization Impairment of property, plant and equipment Financial expense Income taxes Profit for the year Earnings per share Basic...

  • Page 62
    ... Remeasurement of net defined benefit liability Related income taxes Other comprehensive income for the year Comprehensive income for the year 20 181 (49) 132 55,627 313,377 306 (83) 223 9,446 218,887 24,803 (14,268) 10,535 9,223 Consolidated financial statements COGECO CABLE INC. 2015 61

  • Page 63
    ... August 31, 2015 and 2014 (In thousands of Canadian dollars) Balance at September 1, 2013 Profit for the year Other comprehensive income for the year Comprehensive income for the year Issuance of subordinate voting shares under the Stock Option Plan Share-based payment Share-based payment previously...

  • Page 64
    ... Current 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 2,982,395 29,609 3,943 514,194 4,255,066 Shareholders' equity Share capital Share-based payment...

  • Page 65
    ... Impairment of property, plant and equipment Financial expense Income taxes Share-based payment Loss on disposals and write-offs of property, plant and equipment Defined benefit plans contributions, net of expense Changes in non-cash operating activities Financial expense paid Income taxes...

  • Page 66
    ... residential and business customers with video, Internet and telephony services. Through its subsidiary Cogeco Peer 1 Inc. ("Cogeco Peer 1"), the Corporation provides its business customers with a suite of information technology services (colocation, network connectivity, managed hosting, cloud...

  • Page 67
    ... for video, Internet 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 colocation, network connectivity, managed hosting, cloud...

  • Page 68
    ... include cable towers, headends, transmitters, fibre and coaxial networks, customer drops and network equipment. Data centre equipment includes general infrastructure, mechanical and electrical equipment, security and access control. Servers that are included as part of the hosting product line are...

  • Page 69
    ... term of the relevant lease. Lessor The Corporation leases certain equipment, primarily home terminal devices, to its customers. These leases are classified as operating leases and rental revenue is recognized on a straight-line basis over the term of the relevant lease. 68 COGECO CABLE INC. 2015...

  • Page 70
    ... plan liabilities and accrued employee benefits as of the date units are issued to the members of the Board of Directors. The accrued liability is remeasured at the end of each reporting period, until settlement, using the average closing price of Consolidated financial statements COGECO CABLE...

  • Page 71
    ..., 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 assumptions on the discount rate, the expected rate of...

  • Page 72
    ...interest rate swaps as derivative financial instruments to manage interest rate risk related to its floating rate long-term debt. The Corporation does not hold or use any derivative financial instruments for speculative trading purposes. Consolidated financial statements COGECO CABLE INC. 2015 71

  • Page 73
    ... the weighted average number of multiple and subordinate voting shares outstanding for the effects of all dilutive potential subordinate voting shares, which comprise stock options, ISUs and PSUs granted to executive officers and designated employees. 72 COGECO CABLE INC. 2015 Consolidated financial...

  • Page 74
    ... the Corporation's customers by examining such factors 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...

  • Page 75
    ...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 Levies which sets out...

  • Page 76
    ...of video, Internet and telephony services primarily to residential customers. The Canadian and American cable services segments also provide business services to small and medium sized businesses across its coverage areas. The Canadian cable services activities are carried out by Cogeco Cable Canada...

  • Page 77
    ...2015, Atlantic Broadband, a wholly-owned subsidiary of Cogeco Cable, completed the acquisition of substantially all of the net assets of MetroCast Communications of Connecticut, LLC ("MetroCast Connecticut"), which served 27,256 video, 22,673 Internet and 7,817 telephony customers at August 31, 2015...

  • Page 78
    ... purchases(3) 2015 $ 343,850 591,336 62,304 105,470 1,102,960 2014 $ 324,272 558,378 67,054 94,856 1,044,560 (1) Include cost of equipment sold, content and programming costs, payments to other carriers, data centre expenses, franchise fees and network costs. (2) Include advertising and marketing...

  • Page 79
    ...Interest on long-term debt Net foreign exchange losses (gains) Amortization of deferred transaction costs Capitalized borrowing costs (1) Other 2015 $ 131,740 893 2,282 (468) 7,615 142,062 (1) For the years ended August 31, 2015 and 2014, the weighted average interest rate used in the capitalization...

  • Page 80
    ... subsidiaries had also accumulated capital losses amounting to $653.4 million, the benefits of which have not been recognized in these consolidated financial statements. These losses can be carried forward indefinitely against capital gain. Consolidated financial statements COGECO CABLE INC. 2015 79

  • Page 81
    ... costs Amounts receivable related to a claim with a supplier(1) Prepayment to a supplier Other 2015 $ 7,151 9,000 4,049 3,005 23,205 (1) In the form of credit notes applicable to future purchases of property, plant and equipment. 2014 $ 8,265 - - 2,938 11,203 80 COGECO CABLE INC. 2015 Consolidated...

  • Page 82
    ... include 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 as part of the hosting product line...

  • Page 83
    ...-term contractual agreements with customers. (2) Include reconnect and additional service activation costs in the Cable services segments, direct and incremental costs associated with the acquisition of Enterprise data service customers and favorable leases. B) GOODWILL During fiscal 2015 and 2014...

  • Page 84
    ... used to determine the recoverable amounts in the most recent impairment tests performed for each of the Corporation operating segment: At August 31, Pre-tax discount rate Operating segment Canadian cable services American cable services Enterprise data services % 10.5 to 10.9 12.3 to 13.0 11.4 2015...

  • Page 85
    ... growth rate used for the tests performed that would have been required in order for the recoverable amount to equal the carrying value of the CGU at August 31, 2015: Increase in pre-tax discount rate Operating segment Canadian cable services American cable services Enterprise data services % 4.1 to...

  • Page 86
    ... at 4.29% per annum payable semi-annually and mature on September 1, 2026. The Senior Secured Notes Series A and B are redeemable at any time at Cogeco Cable's option, in whole or in part, at 100% of the principal amount plus a make-whole Consolidated financial statements COGECO CABLE INC. 2015 85

  • Page 87
    ..., the Corporation completed, pursuant to a private placement, the issuance of US$215 million Senior Secured Notes. The Senior Secured Notes bear interest at 4.30% payable semi-annually and mature on June 16, 2025. The Senior Secured Notes are redeemable at the Corporation's option at any time, in...

  • Page 88
    ..., interest rates and maturity remained the same. In connection with the amendment, transaction costs of US$0.4 million were incurred. In connection with the acquisition of MetroCast Connecticut by Cogeco Cable's subsidiary, Atlantic Broadband, on August 20, 2015, the First Lien Credit Facilities...

  • Page 89
    ..., the Board of Directors of Cogeco Cable declared a quarterly eligible dividend of $0.39 per share for multiple voting and subordinate voting shares, payable on November 25, 2015 to shareholders of record on November 11, 2015. D) SHARE-BASED PAYMENT PLANS The Corporation offers, for the benefit of...

  • Page 90
    ...2014) was recorded for the year ended August 31, 2015 related to this plan. ISU plan The Corporation also offers to its executive officers and designated employees an ISU Plan. According to this plan, executive officers and designated employees periodically receive a given number of Incentive Share...

  • Page 91
    ...The Corporation also offers a DSU Plan for members of the Board to assist in the attraction and retention of qualified individuals 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...

  • Page 92
    ... 163,166 2014 $ 63,831 - 63,831 (1) At August 31, 2015, Banker's acceptances for a total of $67.4 million, bearing interest within a range of 0.53 % to 0.60 % and with maturity dates ranging from September 1, 2015 to September 8, 2015. Consolidated financial statements COGECO CABLE INC. 2015 91

  • Page 93
    ... 308 (900) 30,540 2,206 555 1,495 351 (1,488) 2015 $ 2014 $ The net defined benefit liability is included in the Corporation's consolidated statement of financial position under "pension plan liabilities and accrued employee benefits". 92 COGECO CABLE INC. 2015 Consolidated financial statements

  • Page 94
    ...) Recognized in operating expenses (salaries, employee benefits and outsourced services) Current service cost Past service cost Administrative expense Recognized in financial expense (other) Net interest 161 2,378 284 3,191 2,048 - 169 2,206 555 146 2015 $ 2014 $ Defined benefit costs recognized in...

  • Page 95
    ... interest rate on investment-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. Salary risk...

  • Page 96
    ... on future purchases of property, plant and equipment. 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 and pay before the services are rendered...

  • Page 97
    ... principal payments on its Senior Secured Notes Series A. The following table shows the cross-currency swaps outstanding at August 31, 2015: Type of hedge Cash flow Notional amount US$190 million Receive interest rate 7.00% USD Pay interest rate 7.24% CAD Maturity October 1, 2015 Exchange rate...

  • Page 98
    ... the major part of the purchase prices for Atlantic Broadband and Peer 1 Hosting were borrowed directly in US dollars and British Pounds. The following table shows the investments in foreign operations outstanding at August 31, 2015: Type of hedge Net investment Net investment Notional amount of...

  • Page 99
    ... capital requirements. The following table summarizes certain of the key ratios used to monitor and manage the Corporation's capital structure: Years ended August 31, Net senior indebtedness (1)(2) 2015 / adjusted EBITDA (3) 2014 2.1 2.9 6.8 2.1 3.0 6.3 Net indebtedness(2)(4) / adjusted EBITDA...

  • Page 100
    ... 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 2015 $ 3,950 612 2,473 7,035 2014 $ 3,718 980 2,042 6,740 Consolidated financial statements COGECO CABLE...

  • Page 101
    ...At August 31, 2015, the Corporation and its subsidiaries are committed under operating lease agreements and other long-term contracts to make annual payments as follows: 2016 (In thousands of Canadian dollars) Operating lease agreements(1) Acquisition of property, plant and equipment and intangible...

  • Page 102
    ...5,020,880 2014 $ 2,744,746 1,508,256 4,253,002 2013 $ 2,944,182 1,342,940 4,287,122 CREDIT RATINGS The table below shows Cogeco Cable's and Atlantic Broadband's credit ratings: At August 31, 2015 Cogeco Cable Senior Secured Notes and Debentures Senior Unsecured Notes Atlantic Broadband First Liens...

  • Page 103
    ...Trust Company of Canada 100 University Avenue, 9th Floor Toronto, ON M5J 2Y1 Tel.: 514-982-7555 Tel.: 1-800-564-6253 Fax: 416-263-9394 DIVIDENDS DIVIDEND DECLARATION At its October 28, 2015 meeting, the Board of Directors of Cogeco Cable declared a quarterly eligible dividend of $0.39 per share for...

  • Page 104
    ...31, 2015 CONSOLIDATED Primary service units Video service customers Internet service customers Telephony service customers CANADA Primary service units Video service customers Penetration as a percentage of homes passed Internet service customers Penetration as a percentage of homes passed Telephony...

  • Page 105
    ...Officer and Board Chair Olameter Inc. (Telemetry company) 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. LIB GIBSON, M.Sc., B.Sc., ICD.D Toronto (Ontario...

  • Page 106
    ... and Chief Executive Officer ELIZABETH ALVES Vice President, Internal Audit and Risk Management NICOLA ANGELINI Vice President, Strategic Planning NATHALIE DORVAL Vice President, Regulatory Affairs and Copyright RENÉ GUIMOND Vice President, Public Affairs and Communications PHILIPPE JETTÉ Senior...

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    ....ca AMERICAN CABLE SERVICES ATLANTIC BROADBAND RICHARD SHEA President and Chief Executive Officer 2 Batterymarch Park Suite 205 Quincy, MA 02169 www.atlanticbb.com ENTERPRISE DATA SERVICES COGECO PEER 1 ANTONIO CICIRETTO President and Chief Executive Officer 413 Horner Avenue Toronto (Ontario) M8W...

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    ... of publications such as Quarterly Reports and the Annual Report. Every effort is made to avoid such duplication. Shareholders who receive duplicate mailings should advise Computershare Trust Company of Canada. ETHICS LINE The Corporation's parent company, COGECO Inc., makes available an anonymous...

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