The Company recorded a foreign exchange translation loss on its US dollar denominated debt of $1.3 million for the fourth quarter of 2012, as a result of the weakening of the Canadian dollar against the US dollar, which fell by just over 1% between the respective quarter ends. In the comparative periods, a strengthening of the Canadian dollar resulted in translation gains of $3.9 million and $2.4 million, respectively.
The Company uses a variety of derivative financial instruments as partial economic hedges against unfavourable changes in foreign exchange rates, energy costs and interest rates. For the fourth quarter of 2012, the Company recorded a net loss of $0.1 million related to its derivative financial instruments, reflecting losses on US dollar forward contracts related to the weakening of the Canadian dollar offset in part by gains on crude oil collars.
The following table summarizes the gains (losses) on derivative financial instruments for the comparable periods:
Q4 Q3 YTD Q4 YTD(millions of dollars) 2012 2012 2012 2011 2011----------------------------------------------------------------------------Foreign exchange collars and forward contracts $ (0.2) $ 1.8 $ 1.7 $ 1.4 $ (1.6)Crude oil collars $ 0.1 $ 0.1 $ - $ 0.1 $ 0.1Natural gas swaps $ - $ - $ - $ - $ (0.1)---------------------------------------------------------------------------- $ (0.1) $ 1.9 $ 1.7 $ 1.5 $ (1.6)----------------------------------------------------------------------------
Other Comprehensive Income (Loss)
In the fourth quarter of 2012, the Company recorded an after-tax charge to the statements of other comprehensive income (loss) of $1.7 million in relation to changes in the valuation of its defined benefit post-employment compensation plans. The charge reflects a reduction in the discount rate used to value the plans offset in part by a slightly higher than expected rate of return on plan assets for the period. In the previous quarter a charge of $4.7 million was recorded, reflecting a reduction in discount rates offset slightly by a higher than expected rate of return on plan assets for the period. An after-tax loss of $5.0 million was recorded in the fourth quarter of 2011.
SUMMARY OF FINANCIAL POSITION
The following table summarizes CPPI's cash flow and selected ratios for and as at the end of the following periods:
Q4 Q3 YTD Q4 YTD(millions of dollars, except for ratios) 2012 2012 2012 2011 2011----------------------------------------------------------------------------Increase (decrease) in cash and cash equivalents $ 3.2 $ (15.3) $ 0.8 $ (34.0) $ (66.2) Operating activities $ 25.8 $ 1.4 $ 87.9 $ 34.1 $ 199.0 Financing activities $ (11.1) $ 3.2 $ (27.3) $ (26.6) $ (188.8) Investing activities $ (11.5) $ (19.9) $ (59.8) $ (41.5) $ (76.4)Ratio of current assets to current liabilities 1.1: 1 2.0 : 1Net debt to capitalization 22.3% 20.9%--------------------------------------------------------------------------------------------------------------------------------------------------------
