Cash Flows from Operating Activities
Operating activities provided $37.4 million in 2012 compared to $96.8 million in 2011 on a continuing operations basis. Net earnings adjusted for items not requiring cash were 19% higher than last year on higher revenues and improved operating margins. Non-cash working capital and other used $124.5 million compared to $39.7 million in 2011. Discontinued operations provided $57.4 million in cash flow in 2011.
The components and changes in working capital are discussed in more detail in this MD&A under the heading "Consolidated Financial Condition."
Cash Flows from Investing Activities
Investing activities at continuing operations used $91 million in 2012 compared to $56 million in 2010.
Net rental fleet additions (purchases less proceeds of disposition) totalled $55 million in 2012 compared to $34.8 million in 2011. Additional investments in the rental fleet were made in the current year in light of stronger demand on improved market conditions, the existing fleet age profile and the expansion of our heavy rental operations.
Investments in property, plant and equipment in 2012 totalled $23.7 million compared to $25.0 million in 2011. Additions in 2012 were largely made within the Equipment Group. Capital additions included $4.1 million for land and buildings for new and expanded branches, $14.3 million for service vehicles, and $3.2 million for machinery and equipment. Additions in 2011 included $10.4 million for land and buildings acquired for new branch locations, $7.8 million for service vehicles and $2.8 million for information technology assets.
In 2012, Toromont acquired from Caterpillar the assets associated with the former coterminous Bucyrus distribution network for US $13.5 million ($13.7 million).
Investing activities at discontinued operations in 2011 included cash received from Enerflex Ltd. in repayment of intercompany debt of $173.3 million owing to the Company on spinoff.
Cash Flows from Financing Activities
Financing activities used $19.0 million in 2012 and $337.3 million in 2011.
Significant sources and uses of cash in 2012 included:
-- Drawings on the credit facility of $26.5 million-- Dividends paid to common shareholders of $36 million or $0.47 cents per share;-- Normal course purchase and cancellation of common shares of $14.1 million, 666,039 shares at an average cost of $21.23; and-- Cash received on exercise of share options of $6.2 million.
Significant sources and uses of cash in 2011 included:
-- Decrease in long-term debt of $286.9 million. The acquisition financing from the purchase of Enerflex Systems Income Fund ("ESIF") was fully repaid, in conjunction with the spinoff. Repayment was funded principally with amounts received by the Company from Enerflex in repayment of its intercompany debt;-- Dividends paid to common shareholders of $40.9 million or $0.53 cents per share;-- Normal course purchase and cancellation of common shares of $12.2 million, 720,004 shares at an average cost of $16.96; and-- Proceeds received on the exercise of stock options of $3.2 million.OUTLOOK
The substantial growth in product support, fueled by the increased installed base in the Equipment Group, bodes well for the Company's continued success.
Within the Equipment Group, although market conditions are increasingly competitive, we are cautiously optimistic that construction markets will be reasonably robust, driven by large construction projects. Future prospects are linked to general economic conditions and governmental investment levels. Management continues to track a number of large construction projects, which are expected to contribute to future results. Improved performance in the Power Systems Group is also expected to further contribute to 2013 results. In addition, we have invested in the rental business and believe that this will continue to contribute to growth.
