HispanicBusiness

Circulation revenues for the year ended December 31, 2012, excluding the Derksen business for the first quarter of 2012 and 2011, decreased by $0.4 million or 1.5%, with lower unit sales offsetting increased revenue from higher subscription rates. Commercial printing revenues for 2012, excluding the Derksen business for the first quarter of 2012 and 2011, increased by $0.8 million, which is primarily attributable to increased printing volumes at Derksen Printers. Digital revenues for 2012 increased by $0.3 million or 12.3%, primarily due to the increase in online and mobile product revenues and website design services. Other revenue increased by $0.3 million primarily due to sales of the Winnipeg Jets officially licensed medallion collection in the first quarter of 2012.

Operating expenses for the year ended December 31, 2012 were $94.8 million, a $2.2 million or 2.4% increase from last year. Operating expenses for 2012, excluding the Derksen business for the first quarter, were $93.6 million, a $1.4 million or 1.5% increase from last year. Employee compensation costs for the year, excluding the Derksen business for the first quarter of 2012 and 2011, increased by $0.5 million or 1.1%, primarily due to the 2% wage increase included in the collective agreements effective October 1, 2011 and higher defined benefit pension expense, partially offset by employee reductions in the second, third and fourth quarters of 2012, which resulted in thirty positions being eliminated through a combination of retirements, voluntary resignations and layoffs. During 2012 a restructuring charge of $0.6 million was incurred relating to termination payments for positions eliminated during the year, compared to a charge of $0.3 million in the prior year, which also related to employee termination payments. Newsprint expense for FPLP's own publications for the year, excluding the Derksen business for the first quarter of 2012 and 2011, decreased by $0.7 million or 7.8%, primarily due to lower printing volumes mainly from fewer circulation copies. Newsprint expense for commercial printing for the year, excluding the Derksen business for the first quarter of 2012 and 2011, increased by $0.4 million compared to the prior year, primarily due to an increase in commercial printing at Derksen Printers compared to 2011. Delivery costs, excluding the Derksen business for the first quarter of 2012 and 2011, remained unchanged compared to the prior year. Other expenses for the year, excluding the Derksen business for the first quarter of 2012 and 2011, increased by $1.0 million or 5.6% compared to the prior year, primarily due to increases during the first quarter, which included new outside print costs for two third-party magazines, costs for the Winnipeg Jets medallion circulation promotion project, a non-recurring reduction in an accrual relating to a labour matter during the first quarter in the prior year and increased costs on our long-term sponsorship agreement with the Winnipeg Jets.

EBITDA(1) for the year ended December 31, 2012 was $21.0 million compared to $23.1 million in 2011, a decrease of 9.1%. Excluding the Derksen business for the first quarter and the full year restructuring charges, EBITDA(1) for the twelve months ended December 31, 2012 was $21.4 million compared to $23.3 million in 2011, a decrease of 8.2%.

For the year ended December 31, 2012 finance costs decreased as a result of lower interest on the term loan resulting from lower principal balances together with a reduction in interest rates from a long-term loan renewal agreement, which was completed effective at the beginning of June 2012. In addition, during the first quarter, FPLP negotiated the release of the guarantee requirement which eliminated the need for the collateral provided by FP Funding Corporation ("FundingCo") and FPLP's guarantee payments to FundingCo, which were approximately $0.1 million per quarter. These decreases were partially offset by increased interest on the new finance leases and the mortgage loan entered into in 2011 and the first quarter of 2012.