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Fiscal 2013 revised financial guidelines are as follows:
-------------------------------------------------------------------------------------------------------------------------------------------------------- Revised Original projections projections January 14, 2013 November 1, 2012 Fiscal 2013 Fiscal 2013(in millions of dollars, except net customer additions and operating margin) $ $----------------------------------------------------------------------------Financial guidelines Revenue 1,590 1,350 Operating income before depreciation and amortization 735 614 Operating margin 46.2% 45.5% Depreciation and amortization 330 290 Financial expense 96 64 Current income tax expense 92 95 Profit for the year 225 190 Acquisitions of property, plant and equipment, intangible and other assets 370 350 Free cash flow(1) 170 105Net customer addition guidelines PSU growth 35,000 50,000--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Free cash flow is calculated as operating income before depreciation and amortization less integration, restructuring and acquisition costs, financial expense, current income tax expense and acquisitions of property, plant and equipment, intangible and other assets.
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", "operating income before depreciation and amortization" and "operating margin".
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 tax expense, 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 November 30, 2012 2011(in thousands of dollars) $ $----------------------------------------------------------------------------Cash flow from operating activities (280) 13,807Changes in non-cash operating activities 81,113 62,668Amortization of deferred transaction costs and discounts on long-term debt 740 675Income taxes paid 42,533 36,182Current income tax expense (25,091) (19,490)Financial expense paid 16,430 20,030Financial expense (15,600) (16,829)----------------------------------------------------------------------------Cash flow from operations 99,845 97,043--------------------------------------------------------------------------------------------------------------------------------------------------------Free cash flow is calculated as follows:-------------------------------------------------------------------------------------------------------------------------------------------------------- Quarters ended November 30, 2012 2011(in thousands of dollars) $ $----------------------------------------------------------------------------Cash flow from operations 99,845 97,043Acquisition of property, plant and equipment (78,192) (73,339)Acquisition of intangible and other assets (4,641) (3,944)----------------------------------------------------------------------------Free cash flow 17,012 19,760--------------------------------------------------------------------------------------------------------------------------------------------------------
