Cogeco 2015 Annual Report Download - page 76

Consolidated financial statements COGECO CABLE INC. 2015 75
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 reporting structure reflects how the Corporation manages its business activities to make decisions
about resources to be allocated to the segments and to assess their performance.
The Canadian and American cable services segments provide a wide range 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 in the Provinces of Québec and
Ontario and the American cable services activities are carried out by Atlantic Broadband in western Pennsylvania, southern Florida, Maryland/
Delaware, South Carolina and eastern Connecticut.
The Enterprise data services segment provides colocation, network connectivity, managed hosting, cloud services and a rich portfolio of
managed IT services in Canada, the United States and Europe to small, medium and large enterprises around the globe. Cogeco Peer 1
provides these services in the following key vertical markets: online retail, financial services, technology, public sector, education, health
care, business services, manufacturing, media and online gaming. Cogeco Peer 1 provides its services through data centres and points-
of-presence in North America and Europe. The activities of the Enterprise data services segment are carried out across Canada (British
Columbia, Ontario, Québec), the United States (California, Texas, Virginia, Florida and Georgia) and Europe (London and Southampton,
United Kingdom ("UK")).
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, 2015 Canadian cable services American cable services Enterprise data services
Inter-segment
eliminations
and other Consolidated
(In thousands of Canadian dollars) $ $ $ $ $
Revenue 1,262,892 470,259 313,618 (3,453) 2,043,316
Operating expenses 616,339 268,385 204,169 14,067 1,102,960
Management fees – COGECO Inc. — — — 9,877 9,877
Integration, restructuring and acquisition costs(1) — 1,619 12,331 — 13,950
Settlement of a claim with a supplier(2) (27,431) — — — (27,431)
Depreciation and amortization 238,772 100,356 127,213 374 466,715
Segment profit (loss) 435,212 99,899 (30,095) (27,771) 477,245
Financial expense 142,062
Income taxes 77,433
Profit for the year 257,750
Property, plant and equipment 1,115,536 434,007 434,840 1,038 1,985,421
Intangible assets 989,428 991,068 144,408 — 2,124,904
Goodwill 4,662 793,712 706,005 — 1,504,379
Acquisition of property, plant and equipment 237,025 75,974 109,951 — 422,950
Acquisition of intangible and other assets 11,009 2,793 2,468 — 16,270
(1) The integration, restructuring and acquisition costs are comprised of acquisition costs with regards to a business combination in the American cable
services segment (see Note 6) and restructuring costs (severance costs and professional fees) associated to the combination of Cogeco Data Services
and Peer 1 Hosting into one business unit, Cogeco Peer 1, in the Enterprise data services segment.
(2) On August 20, 2015, the Corporation concluded an agreement with a supplier to settle a claim that was initiated in a previous year. The settlement
amounted to $27.4 million, which will be paid partly in cash and partly in the form of credit notes applicable on future purchases of property, plant and
equipment (see Notes 12 and 21 A)).