2014

Cascades releases 2013 fourth quarter results and ends the year on a strong note

KINGSEY FALLS, QC, March 13, 2014 /PRNewswire/ - Cascades Inc. (TSX: CAS), a leader in the recovery and manufacturing of green packaging and tissue paper products, announces its unaudited financial results for the three-month period and the fiscal year ended December 31, 2013.

Annual Highlights

  • Sales of $3,849 million (compared to $3,645 million in 2012 (+6%))
  • Excluding specific items
    • EBITDA of $352 million (compared to $304 million in 2012 (+16%))
    • Net earnings per share of $0.31 (compared to $0.05 in 2012)
  • Including specific items
    • EBITDA of $322 million (compared to $274 million in 2012 (+18%))
    • Net earnings per share of $0.11 (compared to a net loss of $0.23 in 2012)
  • Appointment of Mario Plourde as President and Chief Executive Officer
  • Increased ownership in Reno de Medici from 48.5% to 57.6%
  • Successful start-up of the Greenpac containerboard mill and ramp-up according to plan
  • Acquisition and conversion of a paper machine at our Oregon Tissue mill with a start-up planned for the end of 2014
  • Creation of a new joint venture in the Atlantic Provinces for the Containerboard Group

Q4 2013 Highlights

  • Sales of $958 million
    (compared to $995 million in Q3 2013 (-4%) and $904 million in Q4 2012 (+6%))
  • Excluding specific items
    • EBITDA of $105 million
      (compared to $96 million in Q3 2013 (+9%) and $70 million in Q4 2012 (+50%))
    • Net earnings per share of $0.19
      (compared to net earnings of $0.07 in Q3 2013 and a net loss of $0.06 in Q4 2012)
  • Including specific items
    • EBITDA of $93 million
      (compared to $83 million in Q3 2013 (+12%) and $39 million in Q4 2012 (+138%))
    • Net earnings per share of $0.05
      (compared to net earnings of $0.12 in Q3 2013 and a net loss of $0.33 in Q4 2012)
  • Net debt of $1,612 million (compared to $1,601 million as at September 30, 2013), including $113 million of non-recourse net debt


Mr. Mario Plourde, President and Chief Executive Officer, had the following comments on the fourth quarter results: "We are pleased with the 16% improvement of our EBITDA excluding specific items in 2013 which demonstrates that the efforts being pursued under our action plan continue to bear fruit. The results of the last quarter of the year have been solid as a result of improved productivity and more favourable external factors such as a weaker Canadian dollar.

Having significantly increased its EBITDA contribution during the fourth quarter, our Containerboard Group continued to show progress due to an improvement in manufacturing efficiencies. Results were also impacted by a favourable adjustment to its pension liabilities. Our Boxboard Europe Group achieved the greatest EBITDA growth during the fourth quarter. It continues to do well in a difficult environment and has benefited from credits linked to energy savings projects undertaken at two of its mills. Impacted by favourable exchange rates, the Specialty Products Group's results were stable compared to the previous quarter, even though the fourth quarter is usually a slower quarter. Finally, our Tissue Papers Group recorded a seasonal EBITDA decrease as it did last year and it continues to face a very competitive environment while new capacity is being absorbed by the market.

While facing normal logistical challenges associated with start-ups, the Greenpac mill is continuing to ramp-up as planned. Average daily production during the fourth quarter was 747 tons per day, without adjusting for downtime, and operating income before depreciation was positive for the quarter."

Financial Summary

Segmented OIBD excluding specific items 1

                   
(in millions of Canadian dollars) (unaudited) 2013   2012   Q4 2013   Q4 2012   Q3 2013
                   
Packaging Products                  
  Containerboard 146   95   46   25   42
  Boxboard Europe 51   42   21   11   9
  Specialty Products 58   49   16   8   15
                   
Tissue Papers 133   138   32   31   39
                   
Corporate Activities (36)   (20)   (10)   (5)   (9)
OIBD excluding specific items 352   304   105   70   96
Note 1 - Refer to section "Supplemental information on non-IFRS measures".


Selected consolidated information

           
(in millions of Canadian dollars, except amounts per share) (unaudited) 2013 2012 Q4 2013 Q4 2012 Q3 2013
           
Sales 3,849   3,645   958   904   995  
Excluding specific items 1          
Operating income before depreciation and amortization (OIBD or EBITDA) 352   304   105   70   96  
Operating income 170   118   57   22   50  
Net earnings (loss) 2 29   5   18   (5)   7  
  per common share 2 $ 0.31   $ 0.05   $ 0.19   $ (0.06)   $ 0.07  
Margin (OIBD or EBITDA) 9.1 % 8.3 % 11.0 % 7.7 % 9.6 %
As reported          
Operating income before depreciation and amortization (OIBD or EBITDA) 322   274   93   39   83  
Operating income (loss) 140   75   45   (19)   37  
Net earnings (loss) 2 11   (22)   6   (32)   11  
  per common share 2 $ 0.11   $ (0.23)   $ 0.05   $ (0.33)   $ 0.12  
Note 1 - Refer to section "Supplemental information on non-IFRS measures".
Note 2 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits


Results analysis for the three-month period ended December 31, 2013 (compared to the same period last year)

In comparison with the same period last year, sales increased by 6% to $958 million in the fourth quarter of 2013 due to favourable exchange rates, an increase in shipments and higher average selling prices.

Operating income, excluding specific items, increased significantly from $22 million in Q4 2012 to $57 million for the fourth quarter of 2013.  In addition to the above-mentioned factors, lower energy costs and the contribution from businesses acquired and restructuring actions positively contributed to results and offset the negative impacts of higher raw materials costs, essentially linked to external purchases of paper. Compared to the last quarter of the previous year, our three groups active in the Packaging Products sector registered significant improvement in operating income. Higher shipments, lower production costs and lower depreciation expense  contributed to improve our Containerboard Group's operating income. Also, the Group benefited from a decrease in post-employment benefits obligations. Energy credits strongly contributed to the increase of the operating income of our Boxboard Europe Group while our Specialty Products Group benefited from lower production costs. As for our Tissue Papers Group, it recorded slightly higher operating income as a result of the weakness of the Canadian dollar. Finally, the costs related to corporate activities increased due to the continuation of the implementation of our new ERP system.

When including specific items, operating income amounted to $45 million in comparison to an operating loss of $19 million for the same period of last year. In the fourth quarter of 2013, the following specific items, before income taxes, impacted our operating income and/or net earnings:

  • a $7 million net impairment charge on assets of our Boxboard Europe and Specialty Products Groups for $24 million and a reversal of impairment of $17 million in our Tissue Papers segment (operating income and net earnings);
  • a $6 million charge related to restructuring measures (operating income and net earnings);
  • a $1 million unrealized gain on derivative financial instruments (operating income and net earnings).

Net earnings excluding specific items amounted to $18 million ($0.19 per share) in the fourth quarter of 2013 compared to a net loss of $5 million ($0.06 per share) for the same period in 2012. Including specific items, net earnings amounted to $6 million ($0.05 per share) compared to a net loss of $32 million ($0.33 per share) for the same quarter in 2012.

Results analysis for the three-month period ended December 31, 2013 (compared to the previous quarter)

In comparison to the previous quarter, sales decreased by 4% to reach $958 million. A decrease in shipments and lower average selling price more than offset favourable exchange rates. However, lower operating costs, energy credits and a decrease in maintenance and subcontracting costs contributed to increase operating income excluding specific items by 14% to $57 million.

Net earnings excluding specific items for the fourth quarter of 2013 were $18 million ($0.19 per share) compared to net earnings of $7 million ($0.07 per share) during the previous quarter. Net earnings for the quarter were affected by a higher income tax rate and our share of the results of our investments which now include the contribution of the Greenpac mill.

Net debt increased by $11 million to $1,612 million due to the depreciation of the Canadian dollar compared to its US counterpart.

For further details, see the tables on IFRS and non-IFRS measures reconciliation, included herewith.

Near-term outlook

In commenting on the outlook, Mr. Plourde added: "The usual year-end seasonality seems to have been delayed until January of this year and this has allowed us to finish the year on a good note due to a stronger than anticipated month of December . We are beginning 2014 with a certain seasonal slowdown and a shutdown of 14 days at our Trenton containerboard mill due to an equipment failure. Despite this, we are confident that we will increase our EBITDA and margins for a third consecutive year in 2014.

While the outlook is encouraging for most of our sectors, the tissue industry currently faces the short-term challenge of additional capacity. We do not foresee important changes in the cost of recycled fibres and we should feel the impact of the depreciation of the Canadian dollar more fully starting next quarter.

Dividend on common shares and normal course issuer bid

The Board of Directors of Cascades declared a quarterly dividend of $0.04 per share to be paid March 28, 2014 to shareholders of record at the close of business on March 24, 2014. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada).

In the fourth quarter of 2013, Cascades did not purchase shares.

Conference call information

Management will comment on the 2013 fourth quarter financial results during a conference call to be held today at 10:00 a.m.

Financial analysts, investors, media and other interested individuals are invited to listen to the conference call by dialing 1-866-229-4144 and by using the access code 9501952#. The conference call, including the investor presentation, will also be broadcast live on the Cascades corporate website (www.cascades.com, Investors tab on the Home page). The broadcast replay will be available on the Cascades corporate website and by phone until March 21, 2014 by dialing 1-888-843-7419 and by using the access code 9501952#.

Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Corporation employs more than 12,000 employees, who work in more than 100 units located in North America and Europe. With its management philosophy, half a century of experience in recycling, and continuous efforts in research and development as driving forces, Cascades continues to serve its clients with innovative products. Cascades' shares trade on the Toronto Stock Exchange, under the ticker symbol CAS.

Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Corporation's products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in Corporation's Securities and Exchange Commission filings.

CONSOLIDATED BALANCE SHEETS

(in millions of Canadian dollars) (unaudited) DECEMBER 31,
2013
  DECEMBER 31,
2012
Assets      
Current assets      
Cash and cash equivalents 23   20
Accounts receivable 512   513
Current income tax assets 34   22
Inventories 543   497
Financial assets 2   15
  1,114   1,067
Long-term assets      
Investments in associates and joint ventures 261   222
Property, plant and equipment 1,684   1,659
Intangible assets with finite useful life 196   200
Financial assets 17   13
Other assets 108   70
Deferred income tax assets 118   128
Goodwill and other intangible assets with indefinite useful life 333   335
  3,831   3,694
Liabilities and Equity      
Current liabilities      
Bank loans and advances 56   80
Trade and other payables 590   551
Current income tax liabilities 2   1
Current portion of provisions for contingencies and charges 2   6
Current portion of financial liabilities and other liabilities 11   74
Current portion of long-term debt 39   60
  700   772
Long-term liabilities      
Long-term debt 1,540   1,415
Provisions for contingencies and charges 37   33
Financial liabilities 39   36
Other liabilities 212   264
Deferred income tax liabilities 109   80
  2,637   2,600
Equity attributable to Shareholders      
Capital stock 482   482
Contributed surplus 17   16
Retained earnings 642   567
Accumulated other comprehensive loss (60)   (87)
  1,081   978
Non-controlling interest 113   116
Total equity 1,194   1,094
  3,831   3,694


CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

  For the 3-month periods ended
December 31,
  For the years ended
December 31,
(in millions of Canadian dollars, except per share amounts and number of shares) (unaudited) 2013   2012   2013   2012
Sales 958   904   3,849   3,645
Cost of sales and expenses        
Cost of sales (including depreciation and amortization of $182 million ($48 million in the fourth quarter); 2012— $199 million ($58 million in the fourth quarter)) 800   796   3,277   3,157
Selling and administrative expense 102   96   406   382
Loss (gain) on acquisitions, disposals and others     3   (1)
Impairment charges and restructuring costs 13   30   33   36
Foreign exchange loss (gain) (2)     (5)   2
Loss (gain) on derivative financial instruments   1   (5)   (6)
  913   923   3,709   3,570
Operating income (loss) 45   (19)   140   75
Financing expense 26   25   103   102
Interest expense on employee future benefits 3   4   12   13
Foreign exchange loss (gain) on long-term debt and financial instruments 2   (6)   (2)   (8)
Share of results of associates and joint ventures 5   1   3   (2)
Profit (loss) before income taxes 9   (43)   24   (30)
Provision for (recovery of) income taxes 4   (10)   12   (6)
Net earnings (loss) from continuing operations including non-controlling interest for the period 5   (33)   12   (24)
Net earnings (loss) from discontinued operations for the period 2   (3)   2   (5)
Net earnings (loss) including non-controlling interest for the period 7   (36)   14   (29)
Net earnings (loss) attributable to non-controlling interest 1   (4)   3   (7)
Net earnings (loss) attributable to Shareholders for the period 6   (32)   11   (22)
Net earnings (loss) from continuing operations per common share        
  Basic $ 0.03   $ (0.30)   $ 0.09   $ (0.18)
  Diluted $ 0.03   $ (0.30)   $ 0.09   $ (0.18)
Net earnings (loss) per common share        
  Basic $ 0.05   $ (0.33)   $ 0.11   $ (0.23)
  Diluted $ 0.05   $ (0.33)   $ 0.11   $ (0.23)
Weighted average basic number of common shares outstanding 93,887,849   93,960,372   93,885,402   94,157,726
Weighted average number of diluted common shares 95,057,505   94,372,543   94,694,761   94,595,401
         
Net earnings (loss) attributable to Shareholders:        
  Continuing operations 4   (29)   9   (17)
  Discontinued operations 2   (3)   2   (5)
Net earnings (loss) 6   (32)   11   (22)


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

  For the 3-month periods ended
December 31,
  For the years ended
December 31,
(in millions of Canadian dollars) (unaudited) 2013   2012   2013   2012
Net earnings (loss) including non-controlling interest for the period 7   (36)   14   (29)
Other comprehensive income (loss)        
  Items that may be reclassified subsequently to earnings        
    Translation adjustments        
      Change in foreign currency translation of foreign subsidiaries 24   13   52   (13)
      Change in foreign currency translation related to net investment hedging activities (15)   (5)   (30)   9
      Income taxes 2   1   4   (1)
    Cash flow hedges        
      Change in fair value of foreign exchange forward contracts (4)   (1)   (7)   6
      Change in fair value of interest rate swaps 2   (1)   13   (7)
      Change in fair value of commodity derivative financial instruments 4   1   9   4
      Income taxes (1)     (6)  
  12   8   35   (2)
  Items that are reclassified to retained earnings        
    Actuarial gain (loss) on post-employment benefit obligations 23   23   97   (27)
    Income taxes (6)   (7)   (26)   7
  17   16   71   (20)
Other comprehensive income (loss) 29   24   106   (22)
Comprehensive income (loss) including non-controlling interest for the period 36   (12)   120   (51)
Comprehensive income (loss) attributable to non-controlling interest for the period 6   (4)   12   (12)
Comprehensive income (loss) attributable to Shareholders for the period 30   (8)   108   (39)
Comprehensive income (loss) attributable to Shareholders:        
    Continuing operations 28   (5)   106   (34)
    Discontinued operations 2   (3)   2   (5)
Comprehensive income (loss) 30   (8)   108   (39)


CONSOLIDATED STATEMENTS OF EQUITY

  For the year ended December 31, 2013
(in millions of Canadian dollars) (unaudited)    CAPITAL
STOCK
  CONTRIBUTED
SURPLUS
  RETAINED
EARNINGS
  ACCUMULATED
OTHER
COMPREHENSIVE
LOSS
  TOTAL EQUITY
ATTRIBUTABLE TO
SHAREHOLDERS
  NON-CONTROLLING
INTEREST
    TOTAL
EQUITY
Balance - Beginning of year 482   16   567   (87)   978   116   1,094
Comprehensive income              
  Net earnings     11     11   3   14
  Other comprehensive income     70   27   97   9   106
      81   27   108   12   120
Dividends     (15)     (15)     (15)
Stock options   1       1     1
Acquisition of non-controlling interest     9     9   (15)   (6)
Balance - End of year 482   17   642   (60)   1,081   113   1,194
               
  For the year ended December 31, 2012
(in millions of Canadian dollars) (unaudited)    CAPITAL
STOCK
  CONTRIBUTED
SURPLUS
  RETAINED
EARNINGS
  ACCUMULATED
OTHER
COMPREHENSIVE
LOSS
  TOTAL EQUITY
ATTRIBUTABLE TO
SHAREHOLDERS
  NON-CONTROLLING
INTEREST
    TOTAL
EQUITY
Balance - Beginning of year 486   14   615   (86)   1,029   136   1,165
Comprehensive loss              
  Net loss     (22)     (22)   (7)   (29)
  Other comprehensive loss     (16)   (1)   (17)   (5)   (22)
      (38)   (1)   (39)   (12)   (51)
Dividends     (15)     (15)     (15)
Stock options   1       1     1
Redemption of common shares (4 ) 1       (3)     (3)
Acquisition of non-controlling interest     5     5   (8)   (3)
Balance - End of year 482   16   567   (87)   978   116   1,094


CONSOLIDATED STATEMENTS OF CASH FLOWS

  For the 3-month periods ended
December 31,
   For the years ended
December 31,
(in millions of Canadian dollars) (unaudited) 2013   2012   2013   2012
Operating activities from continuing operations        
Net earnings (loss) attributable to Shareholders for the period 6   (32)   11   (22)
Net loss (earnings) from discontinued operations for the period (2)   3   (2)   5
Net earnings (loss) from continuing operations 4   (29)   9   (17)
Adjustments for:        
  Financing expense and interest expense on employee future benefits 29   29   115   115
  Depreciation and amortization 48   58   182   199
  Loss (gain) on acquisitions, disposals and others     3   (1)
  Impairment charges and restructuring costs 10   29   30   30
  Unrealized loss (gain) on derivative financial instruments (1)   1   (6)   (5)
  Foreign exchange loss (gain) on long-term debt and financial instruments 2   (6)   (2)   (8)
  Provision for (recovery of) income taxes 4   (10)   12   (6)
  Share of results of associates and joint ventures 5   1   3   (2)
  Net earnings (loss) attributable to non-controlling interest 1   (4)   3   (7)
  Net financing expense paid (35)   (34)   (100)   (99)
  Income taxes received (paid) 2   3   5   (17
  Dividend received 5   5   12   10
  Employee future benefits and others (13)   (9)   (40)   (31)
  61   34   226   161
Changes in non-cash working capital components 25   58   6   42
  86   92   232   203
Investing activities from continuing operations        
Investments in associates and joint ventures (15)     (32)   (19)
Purchases of property, plant and equipment (47)   (47)   (148)   (161)
Proceeds on disposals of property, plant and equipment 3     12   20
Increase (decrease) in intangible and other assets 8   (10)   (13)   (39)
Business acquisition, net of cash acquired       (14)
  (51)   (57)   (181)   (213)
Financing activities from continuing operations        
Bank loans and advances (19)   (18)   (31)   (11)
Change in revolving credit facilities (2)   13   76   117
Purchase of senior notes   (5)   (10)   (8)
Increase in other long-term debt 1   6   14   8
Payments of other long-term debt (14)   (20)   (50)   (63)
Settlement of derivative financial instruments     (14)  
Redemption of common shares       (3)
Partial disposal of a subsidiary to non-controlling interest   (3)    
Acquisition of non-controlling interest including dividend paid   (1)   (19)   (3)
Dividends paid to the Corporation's Shareholders (3)   (4)   (15)   (15)
  (37)   (32   (49)   22
Change in cash and cash equivalents during the period from continuing operations (2)   3   2   12
Change in cash and cash equivalents from discontinued operations   1     (4)
Net change in cash and cash equivalents during the period (2)   4   2   8
Currency translation on cash and cash equivalents     1  
Cash and cash equivalents - Beginning of the period 25   16   20   12
Cash and cash equivalents - End of the period 23   20   23   20

SEGMENTED INFORMATION

The Corporation analyzes the performance of its operating segments based on their operating income before depreciation and amortization, which is not a measure of performance under International Financial Reporting Standards ("IFRS"); however, the chief operating decision-maker ("CODM") uses this performance measure to assess the operating performance of each reportable segment. Earnings for each segment are prepared on the same basis as those of the Corporation. Intersegment operations are recorded on the same basis as sales to third parties, which are at fair market value. The accounting policies of the reportable segments are the same as the Corporation's accounting policies described in its most recent audited consolidated financial statements for the year ended December 31, 2012.

The Corporation's operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The Chief Executive Officer has authority for resource allocation and assessment of the Corporation's performance, and is therefore the CODM.

The Corporation's operations are managed in four segments: Containerboard, Boxboard Europe, Specialty Products (which constitutes the Packaging Products of the Corporation) and Tissue Papers.

  SALES
  For the 3-month periods ended
December 31,
For the years ended
December 31,
(in millions of Canadian dollars) (unaudited) 2013 2012 2013 2012
Packaging Products        
  Containerboard 328 306 1,314 1,189
  Boxboard Europe 216 198 837 791
  Specialty Products 192 183 774 791
  Intersegment sales (15) (14) (61) (68)
  721 673 2,864 2,703
Tissue Papers 249 242 1,033 979
Intersegment sales and others (12) (11) (48) (37)
Total 958 904 3,849 3,645
         
  OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
  For the 3-month periods ended
December 31,
For the years ended
December 31,
(in millions of Canadian dollars) (unaudited) 2013 2012 2013 2012
Packaging Products        
  Containerboard 44 (1) 153 64
  Boxboard Europe 8 30 38
  Specialty Products 10 8 32 49
  54 15 215 151
Tissue Papers 49 32 150 138
Corporate (10) (8) (43) (15)
Operating income before depreciation and amortization 93 39 322 274
Depreciation and amortization (48) (58) (182) (199)
Financing expense and interest expense on employee future benefits (29) (29) (115) (115)
Foreign exchange loss (gain) on long-term debt and financial instruments (2) 6 2 8
Share of results of associates and joint ventures (5) (1) (3) 2
Profit (loss) before income taxes 9 (43) 24 (30)
         
  PURCHASES OF PROPERTY, PLANT AND EQUIPMENT
  For the 3-month periods ended
December 31,
For the years ended
December 31,
(in millions of Canadian dollars) (unaudited) 2013 2012 2013 2012
Packaging Products        
  Containerboard 18 25 44 72
  Boxboard Europe 10 10 29 29
  Specialty Products 8 5 22 15
  36 40 95 116
Tissue Papers 22 21 47 34
Corporate 4 5 15 19
Total purchases 62 66 157 169
Proceeds on disposal of property, plant and equipment (3) (12) (20)
Capital-lease acquisitions (1) (1) (4) (5)
  58 65 141 144
Purchases of property, plant and equipment included in ''Trade and other payables''        
  Beginning of period 19 10 28 25
  End of period (33) (28) (33) (28)
Purchases of property, plant and equipment net of proceeds on disposals 44 47 136 141

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES

Operating income before depreciation and amortization, earnings before interest, income taxes, depreciation and amortization, operating income and cash flow from operations are not measures of performance under IFRS. The Corporation includes operating income before depreciation and amortization, earnings before interest, taxes, depreciation and amortization, operating income and cash flow from operations because they are measures used by management to assess the operating and financial performance of the Corporation's operating segments. Additionally, the Corporation believes that these items provide additional measures often used by investors to assess a company's operating performance and its ability to meet debt service requirements. However, operating income before depreciation and amortization, earnings before interest, taxes, depreciation and amortization, operating income and cash flow from operations do not represent, and should not be used as a substitute for, net earnings or cash flows from operating activities as determined in accordance with IFRS, and they are not necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. In addition, our definition of operating income before depreciation and amortization, earnings before interest, taxes, depreciation and amortization, operating income and cash flow from operations may differ from those of other companies. Cash flow from operations is defined as cash flow from operating activities as determined in accordance with IFRS excluding the change in working capital components.

Operating income before depreciation and amortization excluding specific items, earnings before interest, income taxes, depreciation and amortization excluding specific items, operating income excluding specific items, net earnings excluding specific items, net earnings per common share excluding specific items and cash flow from operations excluding specific items are non-IFRS measures. The Corporation believes that it is useful for investors to be aware of specific items that have adversely or positively affected its IFRS measures, and that the above mentioned non-IFRS measures provide investors with a measure of performance with which to compare its results between periods without regard to these specific items. The Corporation's measures excluding specific items have no standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation.

The specific items excluded from OIBD, operating income, financing expense, net earnings and cash flow from operations mainly include charges for (reversals of) impairment of assets, charges for facility or machine closures, accelerated depreciation of assets due to restructuring measures, debt restructuring charges, gains or losses on the acquisition or sale of a business unit, gains or losses on the share of results of associates and joint ventures, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate swaps, foreign exchange gains or losses on long-term debt and other significant items of an unusual or non-recurring nature. Although we consider these items to be non-recurring and less relevant to evaluating our performance, some of them will continue to take place and will reduce the cash available to us.

The following table reconciles net earnings (loss) and net earnings (loss) per share with net earnings (loss) excluding specific items and net earnings (loss) per share excluding specific items:

       
(in millions of Canadian dollars, except amounts per share) (unaudited) Net earnings (loss)   Net earnings (loss) per share 1
  2013   2012   Q4 2013   Q4 2012   Q3 2013     2013   2012   Q4 2013   Q4 2012   Q3 2013  
                       
As per IFRS 2 11   (22)   6   (32)   11     $ 0.11   $ (0.23)   $ 0.05   $ (0.33)   $ 0.12  
Specific items:                      
Loss (gain) on acquisitions, disposals and others 3   (1)           $ 0.03   $ (0.01)        
Impairment charges 27   29   7   27   20     $ 0.25   $ 0.22   $ 0.09   $ 0.21   $ 0.16  
Restructuring costs 6   7   6   3       $ 0.04   $ 0.05   $ 0.04   $ 0.02    
Unrealized loss (gain) on financial instruments (6)   (5)   (1)   1   (7)     $ (0.04)   $ (0.04)       $ (0.06)  
Accelerated depreciation due to restructuring measures   13     10         $ 0.10     $ 0.07    
Unrealized gain on interest rate swaps (1)         (1)     $ (0.01)         $ (0.01)  
Foreign exchange loss (gain) on long-term debt and financial instruments (2)   (8)   2   (6)   (11)     $ (0.02)   $ (0.07)   $ 0.02   $ (0.05)   $ (0.10)  
Share of results of associates and joint ventures (4)   (2)   1   (1)   (5)     $ (0.03)   $ (0.02)   $ 0.01   $ (0.01)   $ (0.04)  
Included in discontinued operations, net of tax (2)   5   (2)   3       $ (0.02)   $ 0.05   $ (0.02)   $ 0.03    
Tax effect on specific items, other tax adjustments and attributable to non-controlling interest 1 (3)   (11)   (1)   (10)                
  18   27   12   27   (4)     $ 0.20   $ 0.28   $ 0.14   $ 0.27   $ (0.05)  
Excluding specific items 2 29   5   18   (5)   7     $ 0.31   $ 0.05   $ 0.19   $ (0.06)   $ 0.07  
Note 1 - Specific amounts per share are calculated on an after-tax basis and net of the portion attributable to non-controlling interest.
Note 2 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits 

Net earnings (net loss), which is a performance measure defined by IFRS, is reconciled below with operating income, operating income excluding specific items and operating income before depreciation excluding specific items or earnings before interest, income taxes, depreciation and amortization excluding specific items:

           
(in millions of Canadian dollars) (unaudited) 2013 2012 Q4 2013 Q4 2012 Q3 2013
           
Net earnings (loss) attributable to Shareholders for the period 1 11 (22) 6 (32) 11
Net earnings (loss) attributable to non-controlling interest 3 (7) 1 (4) 1
Net loss (gain) from discontinued operations for the period (2) 5 (2) 3
Provision for (recovery of) income taxes 1 12 (6) 4 (10) 7
Share of results of associates and joint ventures 3 (2) 5 1
Foreign exchange loss (gain) on long-term debt and financial instruments (2) (8) 2 (6) (11)
Financing expense and interest on employee future benefits 1 115 115 29 29 29
           
Operating income (loss) 140 75 45 (19) 37
Specific items :          
  Loss (gain) on acquisitions, disposals and others 3 (1)
  Impairment charges 27 29 7 27 20
  Restructuring costs 6 7 6 3
  Unrealized loss (gain) on financial instruments (6) (5) (1) 1 (7)
Accelerated depreciation and amortization due to restructuring measures 13 10
  30 43 12 41 13
Operating income - excluding specific items 170 118 57 22 50
Depreciation and amortization, excluding specific items 182 186 48 48 46
Operating income before depreciation and amortization (OIBD or EBITDA) - excluding specific items 352 304 105 70 96
Note 1 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits    

 

 

SOURCE Cascades Inc.



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