Q1-2009 Press release - Cogeco

- 13 -November 30, 2011, and its first annual consolidated financial statements presented in accordance with IFRS will be forthe year ending August 31, 2012.IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences in recognition,measurement and disclosure requirements. As a result, the Company is developing a plan to convert its consolidatedfinancial statements to IFRS. The plan highlights the need to identify key accounting policy changes as the first step in theconversion process. Once these changes have been identified, other elements of the plan will be addressed. TheCompany has selected an external advisor to assist with the project and is currently in the process of assessing thedifferences between IFRS and the Company’s current accounting policies.As implications of the conversion are identified, information technology and data system impacts as well as impacts onbusiness activities will be assessed. Changes in accounting policies are likely. These changes may materially impact theCompany’s consolidated financial statements. The conversion project is progressing according to the plan established bymanagement.NON-GAAP FINANCIAL MEASURESThis section describes non-GAAP financial measures used by COGECO throughout this MD&A. It also providesreconciliations between these non-GAAP measures and the most comparable GAAP financial measures. These financialmeasures do not have standard definitions prescribed by Canadian GAAP and may not be comparable with similarmeasures presented by other companies. These measures include “cash flow from operations from continuingoperations”, “free cash flow”, “operating income from continuing operations before amortization” and “operating margin”.Cash flow from operations from continuing operations and free cash flowCash flow from operations from continuing operations is used by COGECO’s management and investors to evaluate cashflows generated by operating activities excluding the impact of changes in non-cash operating items. This allows theCompany to isolate the cash flows from operating activities from the impact of cash management decisions. Cash flowfrom operations from continuing operations is subsequently used in calculating the non-GAAP measure “free cash flow”.Free cash flow is used by COGECO’s management and investors to measure COGECO’s ability to repay debt, distributecapital to its shareholders and finance its growth.The most comparable Canadian GAAP financial measure is cash flow from operating activities from continuingoperations. Cash flow from operations from continuing operations is calculated as follows:Quarters ended November 30,($000) 2008 2007 (1)$ $(unaudited) (unaudited)Cash flow from operating activities from continuing operations 30,470 46,604Changes in non-cash operating items 65,156 34,773Cash flow from operations from continuing operations 95,626 81,377(1)Certain comparative figures have been reclassified to conform to the current year’s presentation. Financial information for the previous year has been restated toreflect the termination of our investment in the TQS Group, which is no longer consolidated since December 18, 2007 (see note 14 to the consolidated financialstatement).