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24 COGECO CABLE INC. 2015 MD&A
5. CASH FLOW ANALYSIS
Years ended August 31, 2015 2014
(in thousands of dollars) $$
Operating activities
Cash flow from operations 725,187 690,148
Changes in non-cash operating activities (58,484) 48,603
Amortization of deferred transaction costs and discounts on long-term debt (8,383)(7,568)
Income taxes paid (71,949) (63,168)
Current income taxes 91,230 82,752
Financial expense paid (130,739) (122,620)
Financial expense 142,062 130,221
Cash flow from operating activities 688,924 758,368
Investing activities (701,194) (413,714)
Financing activities 106,266 (321,900)
Effect of exchange rate changes on cash and cash equivalents denominated in foreign currencies 5,339 1,502
Net change in cash and cash equivalents 99,335 24,256
Cash and cash equivalents, beginning of year 63,831 39,575
Cash and cash equivalents, end of year 163,166 63,831
5.1 OPERATING ACTIVITIES
Fiscal 2015 cash flow from operating activities reached $688.9 million, representing a decrease of $69.4 million, or 9.2%, compared to fiscal 2014
mainly as a result of the following:
• the decrease of $107.1 million in changes in non-cash activities primarily due to changes in working capital;
• the increase of $8.8 million in income taxes paid;
• the increase of $8.1 million in financial expense paid; and
• the increase of $9.2 million in integration, restructuring and acquisition costs; partly offset by
• the improvement of $37.1 million in adjusted EBITDA; and
• the settlement of a claim with a supplier of $27.4 million.
Fiscal 2015 cash flow from operations reached $725.2 million, representing an increase of $35.0 million, or 5.1% compared to $690.1 million in
fiscal 2014 mainly as a result of the following:
• the improvement of $37.1 million in adjusted EBITDA; and
• the settlement of a claim with a supplier of $27.4 million; partly offset by
• the increase of $8.5 million in current income taxes;
• the increase of $11.8 million in financial expense; and
• the increase of $9.2 million in integration, restructuring and acquisition costs.
5.2 INVESTING ACTIVITIES
Fiscal 2015 investing activities reached $701.2 million, an increase of $287.5 million, or 69.5%, compared to $413.7 million in fiscal 2014 mainly
due to the acquisition of $263.2 million (US$201.3 million) of MetroCast Connecticut by the Corporation's wholly-owned subsidiary, Atlantic
Broadband, on August 20, 2015, combined with additional acquisitions of property, plant and equipment, intangible and other assets as explained
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 August 31, 2015. The
transaction, valued at US$200 million, subject to a post-closing net working capital adjustment, was financed through a combination of cash on
hand, a draw-down on the existing Revolving Facility of US$90 million and US$100 million of borrowings under a new Term Loan A-2 Facility
issued under the First Lien Credit Facilities. This acquisition enhances Cogeco Cable's footprint in the American cable market and provides for
further growth potential.