For the three-month period ended December 31, 2012, reportable segment profit before tax was $1.5 million, an increase of 59 percent compared to the $0.9 million in the corresponding 2011-period. Reportable segment profit before tax for the year ended December 31, 2012 was $8.8 million as compared to $3.7 million in 2011; a 139 percent increase. Strong activity levels in Albania and Russia were the main factors in the international segment's improved profitability.
Investing Activities
Net cash used in investing activities for the year ended December 31, 2012 was $64.7 million as compared to $35.4 million in 2011. The Corporation made a $3.5 million investment in the joint venture company RMII, a $2.6 million investment in shares of its joint venture partner RMS, and added a record $51.5 million in capital equipment in 2012 (2011 - $49.3 million). The 2012 capital expenditures included:
-- $29.8 million in down hole performance drilling motors;-- $13.0 million in MWD systems and spare components;-- $5.1 million in non-magnetic drill collars and jars;-- $1.0 million in machinery and equipment for global service centres; and-- $2.6 million in other assets, including vehicles of $0.9 million and software of $0.8 million.
The capital expenditure program undertaken in the year was financed from a combination of cash flow from operations, long-term debt and working capital.
The Corporation realized proceeds from the involuntary disposal of drilling equipment in well bores of $9.0 million in 2012, as compared to $9.4 million in 2011. The change in non-cash working capital balances of $16.2 million (use of cash) for the year ended December 31, 2012 relates to $6.8 million of net change in the Corporation's trade payables that are associated with the acquisition of capital assets and $9.4 million of land and progress billings associated with an operations center under construction that is currently being held for sale. This compares to $4.4 million (source of cash) for the year ended December 31, 2011.
Financing Activities
The Corporation reported cash flows from financing activities of $27.6 million in 2012 as compared to $11.9 million in 2011. In the 2012-year:
-- the Corporation paid dividends of $18.6 million to shareholders, or $0.66 per share;-- through its option and DRIP programs the Corporation received cash proceeds of $1.3 million to acquire 150,309 common shares of the Corporation; and-- the Corporation received net proceeds from its operating facility and syndicated facility of an aggregate of $44.9 million to finance its capital expenditures program and the construction of the new operations center.
Capital Resources
On September 6, 2012, the Corporation entered into a new syndicated loan agreement with its bank. Under the new agreement, the Corporation has access to a $10 million operating facility. The facility bears interest based primarily on the Corporation's senior debt to EBITDA ratio, as defined in the agreement. At the Corporation's option, interest is at the bank's prime rate plus a margin that ranges from a minimum of 0.75 percent to a maximum of 2 percent, or the bank's bankers' acceptance rate plus a margin that ranges from a minimum of 1.75 percent to a maximum of 3 percent. As of December 31, 2012, the Corporation had $5.9 million drawn on this facility.
Under the new syndicated loan agreement, the Corporation also has access to a $95 million syndicated facility and a US$25 million operating facility in the US. The facilities bear interest at the same rates disclosed above. The syndicated facility will permanently reduce to $80 million on September 30, 2013, which coincides with the expected sale and leaseback of the new operations center. The remaining $80 million syndicated facility and the US operating facility mature on September 6, 2015. The maturity date can be extended for another year at the option of the lender. As at December 31, 2012, $95 million was drawn on the syndicated facility, of which $15 million was classified as current, and nil was drawn on the US operating facility.
