Cogeco 2015 Annual Report Download - page 27

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26 COGECO CABLE INC. 2015 MD&A
AMERICAN CABLE SERVICES SEGMENT
• Fiscal 2015 acquisitions of property, plant and equipment amounted to $76.0 million compared to $71.7 million for fiscal 2014. The
increase was mainly due to additional 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 to last year, partly offset by the timing of certain initiatives;
• Acquisitions of intangible and other assets amounted to $2.8 million compared to $1.9 million for fiscal 2014 as a result of higher
reconnect activities; and
• The capital intensity reached 16.7% in fiscal 2015 compared to 18.8% for the prior year as a result of revenue growth exceeding
acquisitions of property, plant and equipment, intangible and other assets growth.
ENTERPRISE DATA SERVICES SEGMENT
• Fiscal 2015 acquisition of property, plant and equipment in the Enterprise data services segment, amounted to $110.0 million compared
to $114.8 million in fiscal 2014. The decrease is mainly due to lower capital expenditures in fiscal 2015 compared to fiscal 2014 to build
out the remaining pods at the Barrie, Ontario data centre, partly offset by the construction of pod 1 at a new data centre in Montréal,
Québec;
• Acquisitions of intangible and other assets amounted to $2.5 million compared to $3.3 million for fiscal 2014 as a result of lower customer
acquisition costs; and
• Fiscal 2015 capital intensity reached 35.8% for fiscal 2015 compared to 39.0% for the prior year as a result of revenue growth exceeding
acquisitions of property, plant and equipment, intangible and other assets growth.
5.3 FREE CASH FLOW AND FINANCING ACTIVITIES
Fiscal 2015 free cash flow amounted to $286.0 million, an increase of $11.3 million, or 4.1%, compared to last year. Free cash flow increased
over the prior year mainly due to 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 $23.7 million in acquisitions of property, plant and equipment, intangible and other assets;
• the increase of $9.2 million in integration, restructuring and acquisition costs;
• the increase of $11.8 million in financial expense; and
• the increase of $8.5 million in current income taxes.
During fiscal 2015, higher Indebtedness level provided for a cash increase of $176.0 million, mainly due to the following:
• the issuance, on August 20, 2015, of an incremental Term Loan A-2 Facility of $130.8 million (US$100 million) in connection with the
acquisition of MetroCast Connecticut, for net proceeds of $128.6 million, net of transaction costs of $2.2 million (US$1.7 million); and
• the increase under the revolving facilities of $83.1 million mainly as a result of a draw-down of $117.7 million (US$90 million) to finance
a portion of the acquisition of MetroCast Connecticut, partly offset by repayments; partly offset by
• the repayment of $35.7 million of Term Loan A and B Facilities.
During fiscal 2014, lower Indebtedness provided for a cash decrease of $261.0 million mainly due to to the following:
• the decrease of $13.2 million in bank indebtedness; and
• the repayments of $368.5 million under the revolving facilities and of $68.9 million of Term Loan A and B Facilities; partly offset by
• the issuance, on August 27, 2014, of a private placement of $27.2 million (US$25 million) Senior Secured Notes Series A for net
proceeds of $27.1 million, net of transaction costs of $0.1 million and of $163.4 million (US$150 million) Senior Secured Notes Series
B for net proceeds of $162.5 million, net of transaction costs of $0.9 million.
In fiscal 2015, quarterly eligible dividends of $0.35 per share, totaling $1.40 per share were paid to the holders of subordinate and multiple voting
shares, for a total paid of $68.4 million. In fiscal 2014, quarterly eligible dividends of $0.30 per share, totaling $1.20 per share were paid to the
holders of subordinate and multiple voting shares, for a total paid of $58.5 million. Overall, during the last five years, total dividend per share
increased by 18.5% on a compounded annual basis.