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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 first quarter of 2013, the Company recorded a net gain of $0.7 million related to its derivative financial instruments, principally reflecting unrealized gains on US dollar collar contracts which will be settled in the second quarter of 2013.
The following table summarizes the gains (losses) on derivative financial instruments for the comparable periods:
Q1 Q4 Q1(millions of Canadian dollars) 2013 2012 2012---------------------------------------------------------------------------Foreign exchange collars and forward contracts $ 0.7 $ (0.2) $ 1.2Crude oil collars $ 0.1 $ 0.1 $ 0.1Interest rate swaps $ (0.1) $ - $ ---------------------------------------------------------------------------- $ 0.7 $ (0.1) $ 1.3---------------------------------------------------------------------------
Other Comprehensive Income (Loss)
In the first quarter of 2013, the Company recorded an after-tax credit to the statements of other comprehensive income (loss) of $0.2 million in relation to changes in the valuation of its defined benefit post-employment compensation plans. The gain reflects the return on plan assets offset by a slightly lower discount rate used to value the net defined benefit obligation. Defined benefit actuarial losses, net of taxes, were recorded in both the comparable periods, with an after-tax charge of $1.5 million in the fourth quarter of 2012 and an after-tax loss of $2.1 million in the first quarter of 2012.
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:
Q1 Q4 Q1(millions of Canadian dollars, except forratios) 2013 2012 2012---------------------------------------------------------------------------Increase (decrease) in cash and cash equivalents $ 17.7 $ 3.2 $ 21.8 Operating activities $ 28.3 $ 25.8 $ 41.5 Financing activities $ (3.8) $ (11.1) $ (8.0) Investing activities $ (6.8) $ (11.5) $ (11.7)Ratio of current assets to current liabilities 1.2 : 1 1.1 : 1 2.5 : 1Net debt to capitalization 19.5% 22.2% 18.2%ROIC - Consolidated(10) 3.0% 1.8% 1.9%------------------------------------------------------------------------------------------------------------------------------------------------------(10) Consolidated Return on Invested Capital ("ROIC") is equal to operatingincome/loss, plus realized gains/losses on derivatives and otherincome/expense, divided by the average invested capital during the year.Invested capital is equal to capital assets, plus long-term investments andnet non-cash working capital.Changes in Financial Position
Cash generated from operating activities was $28.3 million in the first quarter of 2013, up $2.5 million from $25.8 million generated in the previous quarter. The increase resulted from higher operating earnings mostly offset by an increase in working capital balances. The decrease in cash generated from working capital movements principally related to higher accounts receivable balances reflecting the improved pricing and increased shipments in the current quarter partly offset by an increase in accounts payable largely reflecting the timing of payments, in particular property taxes. Compared to the first quarter of 2012, cash generated from operating activities was down by $13.2 million, principally reflecting higher accounts receivable balances, partly offset by higher cash earnings in the current quarter.
