Current Quarter versus Q4 2011
Corporate expenses increased $3.7 million from the same quarter last year due primarily to transaction costs associated with the acquisition of i-TEC, a large charitable donation and increased salaries and benefits expenses. These increases were partially offset by lower employee profit sharing costs.
Current Quarter versus Q3 2012
Corporate expenses increased $4.8 million compared to the third quarter of 2012 due largely to transaction costs associated with the acquisition of i-TEC, a large charitable donation and higher training and travel costs for corporate employees.
OTHER EXPENSES AND INCOME
Finance costs in the fourth quarter of 2012 increased by $1.8 million on a year-over-year basis due to increased debt balances. Depreciation and amortization increased by $5.1 million compared to the same period last year, largely due to capital additions relating to our capital expansion program in North America.
The foreign exchange gain of $3.5 million in the quarter versus a gain of $4.0 million in the same quarter last year was due to the net impact of fluctuations in the U.S. dollar and Russian ruble relative to the Canadian dollar. Other income was $0.6 million in the quarter versus $1.4 million for the same period in the prior year. Other income is largely comprised of interest income on a loan to an unrelated third party and interest income earned on cash balances.
INCOME TAXES
Trican recorded an income tax recovery of $3.0 million in the quarter compared to an income tax expense of $44.8 million for the fourth quarter of 2011. The change was largely due to a decrease in income before tax. The effective tax rate was 27.4% in the fourth quarter of 2012, which was comparable to an effective tax rate of 28.0% recognized in the fourth quarter of 2011.
COMPARATIVE ANNUAL INCOME STATEMENTS----------------------------------------------------------------------------($ thousands; unaudited) Year- Over-Year ended December % of % of Year % 31, 2012 Revenue 2011 Revenue Change Change----------------------------------------------------------------------------Revenue 2,213,400 100% 2,309,647 100.0% (96,247) (4.2%)Expenses Materials and operating 1,870,889 84.5% 1,598,470 69.2% 272,419 17.0% General and administrative 102,443 4.6% 96,653 4.2% 5,790 6.0%----------------------------------------------------------------------------Operating income(i) 240,068 10.8% 614,524 26.6% (374,456) (60.9%) Finance costs 30,497 1.4% 20,041 0.9% 10,456 52.2% Depreciation and amortization 152,837 6.9% 126,576 5.5% 26,261 20.7% Foreign exchange (gain)/loss 408 0.0% (4,275) (0.2%) 4,683 (109.5%) Other income (1,837) (0.1%) (5,985) (0.3%) 4,148 (69.3%)----------------------------------------------------------------------------Income before income taxes 58,163 2.6% 478,167 20.7% (420,004) (87.8%)Income tax expense 4,824 0.2% 139,531 6.0% (134,707) (96.5%)----------------------------------------------------------------------------Net income 53,339 2.4% 338,636 14.7% (285,297) (84.2%)--------------------------------------------------------------------------------------------------------------------------------------------------------(i) See first page of this reportCANADIAN OPERATIONS---------------------------------------------------------------------------- Year-Year ended December 31, Over-($ thousands, except revenue % of % of Year per job, unaudited) 2012 Revenue 2011 Revenue Change----------------------------------------------------------------------------Revenue 1,139,474 1,282,684 (11%)Expenses Materials and operating 804,429 70.6% 790,508 61.6% 2% General and administrative 26,352 2.3% 27,486 2.1% (4%) --------- --------- Total expenses 830,781 72.9% 817,994 63.8% 2%Operating income(i) 308,693 27.1% 464,690 36.2% (34%)Number of jobs 22,427 25,393 (12%)Revenue per job 50,486 49,964 1%--------------------------------------------------------------------------------------------------------------------------------------------------------(i) See first page of this report
