2014

Cascades releases fourth quarter and full year 2012 results

KINGSEY FALLS, QC, Feb. 21, 2013 /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, 2012.

Annual Highlights

  • Sales of $3,645 million (compared to $3,625 million in 2011 (+1%))
  • Excluding specific items
    • EBITDA of $304 million (compared to $229 million in 2011 (+33%))
    • Net earnings per share of $0.17 (compared to a net loss of $0.14 in 2011)
  • Including specific items
    • EBITDA of $274 million (compared to $188 million in 2011 (+46%))
    • Net loss per share of $0.11 (compared to net earnings of $1.03 in 2011)
  • Consolidation of our corrugated products sector in Ontario with the acquisition of Bird Packaging Limited and concurrent investments totaling $30 million
  • Consolidation of our folding carton and microlithography operations with investments totaling $20 million
  • Equipment upgrades at Cascades' mill in La Rochette and Reno de Medici's mill in Villa Santa Lucia in Europe
  • Construction of the Greenpac project mill with start-up still expected in July 2013
  • Price increase announcement during the fourth quarter in our containerboard sector

Q4-2012 Highlights

  • Sales of $904 million
    (compared to $906 million in Q3-2012 (-%) and $913 million in Q4-2011 (-1%))
  • Excluding specific items
    • EBITDA of $70 million
      (compared to $78 million in Q3-2012 (-10%) and $51 million in Q4-2011 (+37%))
    • Net loss per share of $0.02
      (compared to net earnings of $0.07 in Q3-2012 and a net loss of $0.04 in Q4-2011)
  • Including specific items
    • EBITDA of $39 million
      (compared to $83 million in Q3-2012 (-53%) and $37 million in Q4-2011 (+5%))
    • Net loss per share of $0.30
      (compared to net earnings of $0.05 in Q3-2012 and net earnings of $0.05 in Q4-2011)
  • Net debt of $1,535 million (compared to $1,542 million as at September 30, 2012), including $133 million of non-recourse debt


Mr. Alain Lemaire, President and Chief Executive Officer, had the following comments on the fourth quarter results:

"We ended 2012 on a better note than last year. Despite a sequential performance which reflects inherent seasonality associated with the fourth quarter in North America, the results released today are encouraging in a number of ways. Our Tissue Papers Group continues to perform well. The sequential decline in recycled paper costs and the gradual implementation of price hikes contributed positively to the results of our Containerboard Group manufacturing activities. The maintenance downtime period did not allow this segment to achieve the desired utilization rate but the performance of our flagship operations is gradually improving. The implementation of price increases in the corrugated products sector is in line with our expectations but the product mix negatively impacted the performance of our converting operations during the fourth quarter. In our Specialty Products Group, shipments of specialty papers and converted products were lower than expected, which had a negative impact on financial results. In Europe, we have been able to capitalize on capacity closures to make the best of a difficult market environment."

Financial Summary

Selected consolidated information          
(in millions of Canadian dollars, except amounts per share) (unaudited) 2012 2011 Q4/2012 Q4/2011 Q3/2012
           
Sales 3,645 3,625 904 913 906
Excluding specific items 1          
  Operating income before depreciation and amortization (OIBD or EBITDA) 304 229 70 51 78
  Operating income 118 49 22 - 33
  Net earnings (loss) 16 (14) (2) (4) 7
    per common share $0.17 $(0.14) $(0.02) $(0.04) $0.07
  Cash flow from continuing operations (adjusted) 167 133 35 40 44
  Margin (OIBD or EBITDA) 8.3% 6.3% 7.7% 5.6% 8.6%
As reported          
  Operating income before depreciation and amortization (OIBD or EBITDA) 274 188 39 37 83
  Operating income (loss) 75 8 (19) (14) 36
  Net earnings (net loss) (11) 99 (29) 5 5
    per common share $(0.11) $1.03 $(0.30) $0.05 $0.05
  Cash flow from continuing operations (adjusted) 161 126 34 35 42
Note 1 - see the supplemental information on non-IFRS measures.
           
Segmented OIBD excluding specific items          
(in millions of Canadian dollars) (unaudited) 2012 2011 Q4/2012 Q4/2011 Q3/2012
           
Packaging Products          
  Containerboard 95 85 25 19 26
  Boxboard Europe 42 42 11 10 7
  Specialty Products 49 34 8 2 15
           
Tissue Papers 138 72 31 28 35
           
Corporate Activities (20) (4) (5) (8) (5)
           
OIBD excluding specific items 304 229 70 51 78

 

Results analysis for the three-month period ended December 31, 2012 (compared to the same period last year)

In comparison with the same period last year, sales decreased by 1% to $904 million as of result of lower average selling prices and an unfavorable CAD/Euro exchange rate which more than offset the net impact of business acquisitions over divestitures and closures as well as lower shipments.

Despite the above-mentioned factors, operating income, excluding specific items, increased from nil during Q4-2011 to $22 million for the last quarter of 2012 mainly as a result of lower raw material and production costs as well as higher volumes. These factors were offset by lower average selling prices in all our sectors, including the impact of unfavorable product mixes. On a segmented basis, our four sectors surpassed their 2011 fourth quarter's results. When including specific items, the operating loss amounted to $19 million in comparison to $14 million for the same period of last year. In the fourth quarter of 2012, the following specific items impacted our operating income and/or net earnings (before tax):

  • a $27 million loss resulting from impairment charges on assets (impact on operating income and net earnings);
  • a $10 million expense related to accelerated depreciation of assets due to restructuring measures (operating income and net earnings);
  • $3 million of closure and restructuring costs (operating income and net earnings);
  • a $1 million unrealized loss on financial instruments (operating income and net earnings);
  • a $6 million foreign exchange gain on long-term debt and financial instruments (net earnings).

The net loss excluding specific items amounted to $2 million ($0.02 per share) in the fourth quarter of 2012 compared to a net loss of $4 million ($0.04 per share) for the same period in 2011. Including specific items, the net loss amounted to $29 million ($0.30 per share) compared to net earnings of $5 million ($0.05 per share) for the same quarter in 2011.

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

Results analysis for the three-month period ended December 31, 2012 (compared to the previous quarter)

In comparison to the previous quarter, sales remained stable. A favorable foreign exchange rate and higher external shipments partially counterbalanced the lower average selling prices. Excluding specific items, operating income decreased by $11 million to reach $22 million primarily due to an increased depreciation expense and lower selling prices that more than offset a decrease in raw material costs. Net earnings for the quarter decreased by $9 million resulting in a net loss of $2 million.

Net debt decreased by $7 million to $1,535 million due to free cash flows generated, primarily in the management of our working capital.

Results analysis for the fiscal year ended December 31, 2012

In comparison to last year, sales increased by 1% to $3.6 billion reflecting the net contribution of business acquisitions over divestitures and the full consolidation of the results of Reno de Medici since Q2 2011. These factors were offset by the negative impact of a stronger Canadian dollar as well as lower shipments and average selling prices.

In addition to the above-mentioned factors, the lower cost for raw materials contributed to increase the operating income excluding specific items to $118 million compared to $49 million last year. Operating income including specific items increased by $67 million to reach $75 million.

In 2012, net earnings excluding specific items amounted to $16 million ($0.17 per share) compared to a net loss of $14 million ($0.14 per share) last year. Including specific items, the net loss reached $11 million ($0.11 per share) compared to net earnings of $99 million ($1.03 per share) in 2011. Impairment charges and restructuring measures impacted net earnings during the last two years. In 2011, specific items included the gain from the sale of Dopaco.

Near-term outlook

In commenting on the near term outlook, Mr. Lemaire added: "2013 will be an important year for Cascades. In addition to the start-up of Cascades' largest project to date, Greenpac, we will benefit from other strategic initiatives we undertook over the last two years. In North America, industry fundamentals remain positive for our two core sectors. Demand in the tissue papers sector continues to be robust despite ongoing capacity additions. In the containerboard sector, the corrugated box price increase is gradually being implemented and is expected to be fully effective during the second quarter. In North America, we do not expect a significant move in the price of recovered papers in the beginning of the year. The situation is different in Europe and presents significant uncertainty in relation to costs and market conditions."

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 14, 2013 to shareholders of record at the close of business on March 4, 2013. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada).

In the fourth quarter of 2012, Cascades purchased for cancellation 123,786 shares at an average price of $4.40 representing an aggregate amount of approximately $0.5 million.

Conference call information

Management will comment the 2012 fourth quarter and annual financial results during a conference call to be held today at 10:00am.

Financial analysts, investors, media and other interested individuals are invited to listen to the conference call by dialing 1-888-231-8191. The conference call, including the investor presentation, will also be broadcast live on the Cascades corporate website (www.cascades.com, tab Investors of the Home page). The broadcast replay will be available on the Cascades corporate website and by phone until March 1, 2013 by dialing 1-855-859-2056 and by using access code 868625993#.

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 the Corporation's Securities and Exchange Commission filings.

CONSOLIDATED BALANCE SHEETS

(in millions of Canadian dollars) (unaudited) December 31,
2012
December 31,
2011
Assets    
Current assets    
Cash and cash equivalents 20 12
Accounts receivable 513 535
Current income tax assets 22 24
Inventories 497 516
Financial assets 15 6
Assets held for sale - 12
  1,067 1,105
Long-term assets    
Investments in associates and joint ventures 222 219
Property, plant and equipment 1,659 1,703
Intangible assets 200 185
Financial assets 13 25
Other assets 70 44
Deferred income tax assets 128 119
Goodwill and others 335 328
  3,694 3,728
Liabilities and Equity    
Current liabilities    
Bank loans and advances 80 90
Trade and other payables 551 539
Current income tax liabilities 1 2
Current portion of provisions for contingencies and charges 6 5
Current portion of financial liabilities and other liabilities 74 20
Current portion of long-term debt 60 49
  772 705
Long-term liabilities    
Long-term debt 1,415 1,358
Provisions for contingencies and charges 33 33
Financial liabilities 36 111
Other liabilities 264 249
Deferred income tax liabilities 80 107
  2,600 2,563
Equity attributable to Shareholders    
Capital stock 482 486
Contributed surplus 16 14
Retained earnings 567 615
Accumulated other comprehensive loss (87) (86)
  978 1,029
Non-controlling interest 116 136
Total equity 1,094 1,165
  3,694 3,728



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) 2012 2011 2012 2011
Sales 904 913 3,645 3,625
Cost of sales and expenses        
Cost of sales (including depreciation and amortization of $58 million for the 3-month period (2011-$51 million) and $199 million for the year (2011-$180 million)) 796 819 3,157 3,247
Selling and administrative expenses 96 96 382 362
Gain on disposals and others - (38) (1) (48)
Impairment charges and restructuring costs 30 47 36 67
Foreign exchange loss (gain) - 2 2 (19)
Loss (gain) on derivative financial instruments 1 1 (6) 8
  923 927 3,570 3,617
Operating income (loss) (19) (14) 75 8
Financing expense 25 25 100 100
Foreign exchange gain on long-term debt and financial instruments (6) (9) (8) (4)
Share of loss (earnings) of associates and joint ventures 1 (3) (2) (14)
Loss before income taxes (39) (27) (15) (74)
Recovery of income taxes (9) (31) (2) (56)
Net earnings (loss) from continuing operations including non-controlling interest for the period (30) 4 (13) (18)
Net earnings (loss) from discontinued operations for the period (3) 1 (5) 114
Net earnings (loss) including non-controlling interest for the period (33) 5 (18) 96
Net loss attributable to non-controlling interest (4) - (7) (3)
Net earnings (loss) attributable to Shareholders for the period (29) 5 (11) 99
Net earnings (loss) from continuing operations per common share        
  Basic $(0.27) $0.04 $(0.06) $(0.16)
  Diluted $(0.27) $0.04 $(0.06) $(0.16)
Net earnings (loss) per common share        
  Basic $(0.30) $0.05 $(0.11) $1.03
  Diluted $(0.30) $0.05 $(0.11) $1.02
Weighted average basic number of common shares outstanding 93,960,372 95,108,891 94,157,726 96,013,220
         
Net earnings (loss) attributable to Shareholders:        
  Continuing operations  (26) 4 (6) (15)
  Discontinued operations (3) 1 (5) 114
Net earnings (loss) (29) 5 (11) 99



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) 2012 2011 2012 2011
Net earnings (loss) including non-controlling interest for the period (33) 5 (18) 96
Other comprehensive income (loss)        
  Translation adjustments        
    Change in foreign currency translation of self-sustaining foreign subsidiaries 13 (25) (13) (18)
    Change in foreign currency translation related to net investment hedging activities (5) 8 9 (6)
    Income taxes 1 (1) (1) 1
  Cash flow hedges        
    Change in fair value of foreign exchange forward contracts (1) (6) 6 (11)
    Change in fair value of interest rate swaps (1) (15) (7) (23)
    Change in fair value of commodity derivative financial instruments 1 (10) 4 (11)
    Income taxes - 12 - 14
  Actuarial loss on post-employment benefit obligations 19 (13) (42) (66)
    Income taxes (6) 3 11 17
Other comprehensive income (loss) 21 (47) (33) (103)
Comprehensive loss including non-controlling interest for the period (12) (42) (51) (7)
Comprehensive income (loss) attributable to non-controlling interest for the period (4) (6) (12) (8)
Comprehensive income (loss) attributable to Shareholders for the period (8) (36) (39) 1
         
Comprehensive income (loss) attributable to Shareholders:        
    Continuing operations (5) (37) (34) (113)
    Discontinued operations (3) 1 (5) 114
Comprehensive income (loss) (8) (36) (39) 1



CONSOLIDATED STATEMENTS OF EQUITY

  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 period 486 14 615 (86) 1,029 136 1,165
  Comprehensive loss              
    Net loss - - (11) - (11) (7) (18)
    Other comprehensive loss - - (27) (1) (28) (5) (33)
  - - (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 period 482 16 567 (87) 978 116 1,094
 
  For the year ended December 31, 2011
(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 period 496 14 576 (37) 1,049 23 1,072
  Comprehensive income (loss)              
    Net earnings (loss) - - 99 - 99 (3) 96
    Other comprehensive income (loss) - - (49) (49) (98) (5) (103)
  - - 50 (49) 1 (8) (7)
  Dividends - - (15) - (15) - (15)
  Stock options 1 - - - 1 - 1
  Redemption of common shares (11) - - - (11) - (11)
  Business acquisitions - - - - - 129 129
  Acquisition of non-controlling interest - - 4 - 4 (7) (3)
  Dividend paid to non-controlling interest - - - - - (1) (1)
Balance—End of period 486 14 615 (86) 1,029 136 1,165



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) 2012 2011 2012 2011
Operating activities from continuing operations        
Net earnings (loss) attributable to Shareholders for the period (29) 5 (11) 99
Net loss (earnings) from discontinued operations for the period 3 (1) 5 (114)
Net earnings (loss) from continuing operations (26) 4 (6) (15)
Adjustments for        
  Financing expense 25 25 100 100
  Depreciation and amortization 58 51 199 180
  Gain on disposals and others - (38) (1) (48)
  Impairment charges and restructuring costs 29 42 30 60
  Loss (gain) on derivative financial instruments 1 1 (5) 12
  Foreign exchange gain on long-term debt and financial instruments (6) (9) (8) (4)
  Recovery of income taxes (9) (31) (2) (56)
  Share of loss (earnings) of associates and joint ventures 1 (3) (2) (14)
  Net loss attributable to non-controlling interest (4) - (7) (3)
  Net financing expense paid (34) (32) (99) (97)
  Income taxes received (paid) 3 11 (17) (2)
  Dividend received 5 16 10 16
  Employee future benefits and others (9) (2) (31) (3)
  34 35 161 126
Changes in non-cash working capital components 58 67 42 (22)
  92 102 203 104
Investing activities from continuing operations        
Investments in associates and joint ventures - (18) (19) (65)
Purchase of property, plant and equipment (47) (51) (161) (141)
Proceeds on disposal of property, plant and equipment - 22 20 32
Change in other assets (10) (8) (39) 1
Business acquisitions, net of cash acquired - (56) (14) (60)
Proceeds on disposals of business, net of cash disposed - (2) - 4
  (57) (113) (213) (229)
Financing activities from continuing operations        
Bank loans and advances (18) (25) (11) 4
Change in revolving credit facilities 13 146 117 (120)
Purchase of senior notes (5) - (8) -
Payments of other long-term debt (20) (13) (63) (26)
Increase in other long-term debt 3 2 8 3
Redemption of common shares - (3) (3) (11)
Acquisition of non-controlling interest including dividend paid (1) (2) (3) (4)
Dividends paid to the Corporation's Shareholders (4) (3) (15) (15)
  (32) 102 22 (169)
Change in cash and cash equivalents during the period from continuing operations 3 91 12 (294)
         
Change in cash and cash equivalents from discontinued operations, including proceeds on disposal during the period 1 (92) (4) 298
         
Net change in cash and cash equivalents during the period 4 (1) 8 4
         
Currency translation on cash and cash equivalent - 2 - 2
         
Cash and cash equivalents—Beginning of period 16 11 12 6
         
Cash and cash equivalents—End of period 20 12 20 12



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 for assessing 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, 2011.

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.

In 2012, the Corporation changed the structure of its internal organization in a manner that caused the composition of its reportable segment to change. As a result, starting January 1, 2012, the Corporation modified its segmented information disclosure and restated prior periods. Containerboard and Boxboard North American manufacturing and converting activities are now presented within one segment. Boxboard European activities are reported as a separate segment.

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) 2012 2011 2012 2011
Packaging Products        
  Containerboard 306 299 1,189 1,293
  Boxboard Europe 198 206 791 745
  Specialty Products 183 206 791 851
  Intersegment sales (14) (22) (68) (104)
  673 689 2,703 2,785
Tissue Papers 242 233 979 871
Intersegment sales and others (11) (9) (37) (31)
Total 904 913 3,645 3,625
 
  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) 2012 2011 2012 2011
Packaging Products        
  Containerboard (1) (7) 64 45
  Boxboard Europe 8 7 38 42
  Specialty Products 8 (10) 49 16
  15 (10) 151 103
Tissue Papers 32 50 138 93
Corporate (8) (3) (15) (8)
Operating income before depreciation and amortization 39 37 274 188
Depreciation and amortization (58) (51) (199) (180)
Financing expense (25) (25) (100) (100)
Foreign exchange gain on long-term debt and financial instruments 6 9 8 4
Share of earnings (loss) of associates and joint ventures (1) 3 2 14
Loss before income taxes (39) (27) (15) (74)
 
  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) 2012 2011 2012 2011
Packaging Products        
  Containerboard 25 24 72 54
  Boxboard Europe 10 8 29 30
  Specialty Products 5 11 15 26
  40 43 116 110
Tissue Papers 21 14 34 31
Corporate 5 6 19 14
Total purchases 66 63 169 155
Proceeds on disposal of property, plant and equipment - (22) (20) (32)
Capital-lease acquisition (1) (3) (5) (7)
  65 38 144 116
Purchases of property, plant and equipment included in trade and other payables        
  Beginning of period 10 16 25 18
  End of period (28) (25) (28) (25)
Purchases of property, plant and equipment net of proceeds on disposal 47 29 141 109



SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES

Operating income before depreciation and amortization, earnings before interests, 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 interests, 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 interests, 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 interests, 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 interests, 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.

Specific items are defined to include charges for impairment of assets, charges for facility or machine closures, accelerated depreciation of assets due to restructuring measures, debt restructuring charges, gains or losses on sale of business unit, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, foreign exchange gains or losses on long-term debt and other significant items of an unusual or non-recurring nature.

The following table reconciles net earnings (loss) and net earnings (loss) per share to 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
    2012   2011   Q4/2012   Q4/2011   Q3/2012   2012   2011   Q4/2012   Q4/2011   Q3/2012
                                         
As per IFRS   (11)   99   (29)   5   5   $(0.11)   $1.03   $(0.30)   $0.05   $0.05
Specific items :                                        
Inventory adjustment resulting from business acquisition   -   10   -   4   -   $ -   $0.08   $ -   $0.04   $ -
Gain on disposals and others   (1)   (48)   -   (38)   -   $(0.01)   $(0.55)   $ -   $(0.40)   $ -
Impairment charges   29   59   27   44   1   $0.23   $0.45   $0.22   $0.34   $ -
Restructuring costs   7   8   3   3   -   $0.05   $0.06   $0.02   $0.02   $ -
Unrealized loss (gain) on financial instruments   (5)   12   1   1   (6)   $(0.04)   $0.11   $ -   $0.01   $(0.04)
Accelerated depreciation and amortization due to restructuring measures   13   -   10   -   2   $0.10   $ -   $0.08   $ -   $0.01
Foreign exchange loss (gain) on long-term debt and financial instruments   (8)   (4)   (6)   (9)   5   $(0.07)   $(0.04)   $(0.05)   $(0.08)   $0.05
Share of earnings of associates, joint ventures and non-controlling interest   (3)   (3)   (1)   (2)   -   $(0.03)   $(0.03)   $(0.02)   $(0.02)   $ -
Included in discontinued operations, net of tax   5   (108)   3   (1)   -   $0.05   $(1.13)   $0.03   $ -   $ -
Tax effect on specific items and other tax adjustments   (10)   (39)   (10)   (11)   -   $ -   $(0.12)   $ -   $ -   $ -
    27   (113)   27   (9)   2   $0.28   $(1.17)   $0.28   $(0.09)   $0.02
Excluding specific items   16   (14)   (2)   (4)   7   $0.17   $(0.14)   $(0.02)   $(0.04)   $0.07
Note 1 - Specific amounts per share are calculated on an after-tax basis 
Per share amounts of line item "Tax effect on specific items and other tax adjustments" only include the effect of tax adjustments.

 

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

           
(in millions of Canadian dollars) (unaudited) 2012 2011 Q4/2012 Q4/2011 Q3/2012
           
Net earnings (loss) attributable to Shareholders for the period (11) 99 (29) 5 5
Net loss (earnings) from discontinued operations for the period 5 (114) 3 (1) -
Net loss attributable to non-controlling interest (7) (3) (4) - (1)
Share of loss (earnings) of associates and joint ventures (2) (14) 1 (3) 1
Provision (recovery) of income taxes (2) (56) (9) (31) 1
Foreign exchange loss (gain) on long-term debt and financial instruments (8) (4) (6) (9) 5
Financing expense 100 100 25 25 25
           
Operating income (loss) 75 8 (19) (14) 36
Specific items :          
Gain on disposals and others (1) (48) - (38) -
Inventory adjustment resulting from business acquisition - 10 - 4 -
Impairment charges 29 59 27 44 1
Restructuring costs 7 8 3 3 -
Unrealized loss (gain) on financial instruments (5) 12 1 1 (6)
Accelerated depreciation and amortization due to restructuring measures 13 - 10 - 2
  43 41 41 14 (3)
           
Operating income - excluding specific items 118 49 22 - 33
Depreciation and amortization, excluding specific items 186 180 48 51 45
Operating income before depreciation and amortization (OIBD or EBITDA) - excluding specific items 304 229 70 51 78



The following table reconciles cash flow provided by (used from) operating activities to cash flow (adjusted) from operations excluding specific items:

           
  Cash flow from operations   
(in millions of Canadian dollars) (unaudited) 2012 2011 Q4/2012 Q4/2011 Q3/2012
           
Cash flow provided by (used from) operating activities 203 104 92 102 54
Changes in non-cash working capital components (42) 22 (58) (67) (12)
Cash flow (adjusted) from operations 161 126 34 35 42
Specific items, net of current income tax          
Restructuring costs 6 7 1 5 2
Excluding specific items 167 133 35 40 44

 

 

 

 

SOURCE CASCADES INC.



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