On November 30, 2012, the Corporation completed the acquisition of ABB, an independent cable system operator formed in 2003, serving about 495,000 PSU's and providing Analogue and Digital Television, as well as HSI and Telephony services. The acquisition is an attractive entry point into the US market, providing a significant increase in PSU base with further growth potential, a high quality network infrastructure and the ability for the Corporation's management to leverage its core knowledge and operational experience. The transaction, valued at US$1.36 billion, was financed through a combination of cash on hand, a draw-down on the existing Term Revolving Facility of approximately US$588 million and US$660 million of borrowings under a new committed non-recourse debt financing at ABB. Ranked the 12th-largest cable television system operator in the United States ("USA"), ABB operates cable systems in Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina.
(1) The indicated terms do not have standardized definitions prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-IFRS financial measures" section.(2) Represents the sum of Television, High Speed Internet ("HSI") and Telephony service customers.OPERATING AND FINANCIAL RESULTS
OPERATING RESULTS
--------------------------------------------------------------------------------------------------------------------------------------------------------Quarters ended November 30, 2012 2011 Change(in thousands of dollars, except percentages) $ $ %----------------------------------------------------------------------------Revenue 327,911 315,424 4.0Operating expenses 174,204 176,459 (1.3)Management fees - COGECO Inc. 6,581 7,142 (7.9)----------------------------------------------------------------Operating income before depreciation and amortization 147,126 131,823 11.6----------------------------------------------------------------Operating margin 44.9% 41.8%--------------------------------------------------------------------------------------------------------------------------------------------------------
REVENUE
Fiscal 2013 first-quarter revenue increased by $12.5 million, or 4%, to reach $327.9 million, when compared to the same period last year, primarily by rate increases implemented in June and July 2012 and PSU growth. For further details on the Corporation's revenue, please refer to the "Cable services" and "Enterprise services" sections.
OPERATING EXPENSES AND MANAGEMENT FEES
For the first quarter of fiscal 2013, operating expenses decreased by $2.3 million, to reach $174.2 million, a decrease of 1.3% compared to the prior year. The decrease in operating expenses is mainly attributable to deployment and support costs incurred in fiscal 2012 related to the migration of Television service customers from analogue to digital, partly offset by PSU growth. For further details on the Corporation's operating expenses, please refer to the "Cable services" and "Enterprise services" sections.
Management fees paid to COGECO Inc. amounted to $6.6 million, 7.9% lower when compared to $7.1 million in fiscal 2012. Management fees have decreased due to the sale of the Portuguese subsidiary, Cabovisao - Televisao por Cabo, S.A. ("Cabovisao"), on February 29, 2012. For further details on the Corporation's management fees, please refer to the "Related party transactions" section.
