Cogeco 2015 Annual Report Download - page 55

Download and view the complete annual report

Please find page 55 of the 2015 Cogeco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 109

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109

54 COGECO CABLE INC. 2015 MD&A
14.3 FUTURE ACCOUNTING DEVELOPMENTS IN CANADA
A number of new standards, interpretations and amendments to existing standards were issued by the IASB that are mandatory but not yet
effective for the period ended August 31, 2015, and have not been applied in preparing these consolidated financial statements. The following
standards may have a material impact on future consolidated financial statements of the Corporation:
Effective for annual periods
starting on or after
IFRS 9 Financial Instruments January 1, 2018 Early adoption permitted
IFRS 15 Revenue from Contracts with Customers January 1, 2018 (1) Early adoption permitted
(1) The effective date of IFRS 15 has been modified from January 1, 2017 to January 1, 2018 at the September 2015 IASB meeting.
IFRS 9 replaces the guidance in IAS 39 Financial Instruments: Recognition and Measurement. The Standard includes requirements for recognition
and measurement, impairment, derecognition and general hedge accounting. The IASB completed its project to replace IAS 39 in phases, adding
to the standard as it completed each phase. IFRS 9 does not replace the requirement for portfolio fair value hedge accounting for interest risk
since this phase of the project was separated from IFRS 9 project due to the longer term nature of the macro hedging project which is currently
at the discussion paper phase of the due process. Consequently, the exception in IAS 39 for a fair value hedge of an interest rate exposure of a
portfolio of financial assets or financial liabilities continues to apply.
IFRS 15 establishes principles for reporting the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts
with customers. It provides a single model for an entity to recognize revenue in order to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods 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 Corporation is in the process of determining the extent of the impact of these changes on its consolidated financial statements.
15. NON-IFRS FINANCIAL MEASURES
This section describes non-IFRS financial measures used by Cogeco Cable throughout this MD&A. It also provides reconciliations between these
non-IFRS measures and the most comparable IFRS financial measures. These financial measures do not have standard definitions prescribed
by IFRS and, therefore, may not be comparable to similar measures presented by other companies. These measures include “cash flow from
operations”, “free cash flow”, “adjusted EBITDA”, “operating margin” and "capital intensity".
15.1 CASH FLOW FROM OPERATIONS AND FREE CASH FLOW
Cash flow 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 taxes, financial expense paid and financial expense. This allows the Corporation to isolate the cash flows from
operating activities from the impact of cash management decisions. Cash flow from operations is subsequently used in calculating the non-IFRS
measure, “free cash flow”. Free cash flow is used, by Cogeco Cable’s management and investors, to measure its ability to repay debt, distribute
capital to its shareholders and finance its growth.
The most comparable IFRS measure is cash flow from operating activities. Cash flow from operations is calculated as follows:
Quarters ended Years ended
August 31,
2015 August 31,
2014 August 31,
2015 August 31,
2014
(in thousands of dollars) $$$$
Cash flow from operating activities 271,328 329,195 688,924 758,368
Changes in non-cash operating activities (46,789) (125,991) 58,484 (48,603)
Amortization of deferred transaction costs and discounts on long-term debt 2,157 1,940 8,383 7,568
Income taxes paid 19,325 9,630 71,949 63,168
Current income taxes (28,433) (13,820) (91,230) (82,752)
Financial expense paid 19,472 19,038 130,739 122,620
Financial expense (35,067) (32,716) (142,062) (130,221)
Cash flow from operations 201,993 187,276 725,187 690,148