Cascades Releases Fourth Quarter and Full Year 2014 Results

KINGSEY FALLS, QC, March 13, 2015 /CNW Telbec/ - Cascades Inc. (TSX: CAS), a leader in the recovery and manufacturing of green packaging and tissue paper products, releases its unaudited financial results for the three-month period and the fiscal year ended December 31, 2014.

Mr. Mario Plourde, President and Chief Executive Officer, had the following comments on the fourth quarter results: "Even if it ended the year on a weaker note, as expected, 2014 was a year of strategic repositioning during which we completed several initiatives designed to move us towards our stated goals of rationalizing and modernizing our equipment deck. These decisions, while having a negative impact on our financial results for the year, are now behind us and we can now expect improved results going forward. I am particularly encouraged by the performance of our Containerboard Group that benefits from the important investments undertaken over the last few years and from improving market conditions. The Tissue Papers Group continued to be faced with challenging market conditions as well as one-time costs related to the start-up of the new paper machine on the West Coast and the new converting facility in North Carolina. On a sequential basis, the activities of our Specialty Products Group were impacted by lower demand and seasonal downtimes. In Europe, we expected a sequentially improved EBITDA but we were impacted by lower prices and the ramp-up of the new equipment installed at the Santa Giustina mill in Italy.

The Greenpac mill is running well and continued to increase the proportion of value-added products as market receptivity for lightweight grades is good. The mill's average production during the fourth quarter was 1,211 tons per day, a 13% increase compared to the previous quarter. Operating income before depreciation was positive for the quarter and Greenpac's earnings per share contribution, excluding specific items stood at $0.01 for Q4 2014."

Annual Highlights (adjusted for discontinued operations1)

  • Sales of $3,561 million (compared to $3,370 million in 2013 (+6%))
  • Excluding specific items
    • OIBD (or EBITDA) of $340 million (compared to $342 million in 2013 (-1%))
    • Net earnings per share of $0.21 (compared to $0.31 in 2013)
  • Including specific items
    • OIBD (or EBITDA) of $311 million (compared to $343 million in 2013 (-9%))
    • Net loss per share of $1.57 (compared to net earnings of $0.11 in 2013)
  • Completion of several strategic initiatives to rationalize and modernize asset portfolio

Q4 2014 Financial Highlights (adjusted for discontinued operations1)

  • Sales of $879 million
    (compared to $909 million in Q3 2014 (-3%) and $844 million in Q4 2013 (+4%))
  • Excluding specific items
    • OIDB (or EBITDA) of $82 million
      (compared to $93 million in Q3 2014 (-12%) and $99 million in Q4 2013 (-17%))
    • Net earnings per share of $0.08
      (compared to $0.04 in Q3 2014 and $0.19 in Q4 2013)
  • Including specific items
    • OIBD (or EBITDA) of $57 million
      (compared to $95 million in Q3 2014 (-40%) and $98 million in Q4 2013 (-42%))
    • Net loss per share of $0.51
      (compared to a net loss of $0.17 in Q3 2014 and net earnings of $0.05 in Q4 2013)
  • Net debt of $1,613 million as at December 31, 2014 (compared to $1,640 million as at September 30, 2014), including $92 million of non-recourse net debt

Q4 Strategic Highlights

  • Announcement of the sale of our North American boxboard activities; transaction closed in February 2015 for gross proceeds of $45 million
  • Start-up of the new tissue paper machine in Oregon
  •  Start-up of the first of six converting lines to be installed at the new tissue converting facility in North Carolina

 


1 The fine papers activities, the boxboard mill in Sweden, the kraft paper mill and the North American boxboard activities have been reclassified as discontinued operations.

 

Financial Summary







Segmented OIBD excluding specific items1, 2












(in millions of Canadian dollars) (unaudited)

2014

2013

Q4 2014

Q4 2013

Q3 2014







Packaging Products







Containerboard

173

149

47

47

49


Discontinued Operations - Containerboard

(9)

1

(3)

(1)

(3)


Boxboard Europe

70

51

14

21

14


Discontinued Operations - Boxboard Europe

2

6

2


Specialty Products

51

58

10

16

16


Discontinued Operations - Specialty Products

(11)

(17)

(7)

(4)



276

248

68

78

72

Tissue Papers

96

133

21

32

32

Corporate activities

(32)

(39)

(7)

(11)

(11)

OIBD excluding specific items

340

342

82

99

93

Note 1 - Our 2014 and 2013 have been adjusted to account for the reclassification of discontinued operations.
Note 2 - Refer to "Supplemental Information on Non-IFRS Measures" section.

 

Selected Consolidated Information1,2







(in millions of Canadian dollars, except amounts per share) (unaudited)

2014

2013

Q4 2014

Q4 2013

Q3 2014







Sales

3,561


3,370


879


844


909


Excluding specific items2






Operating income before depreciation and amortization (OIBD)

340


342


82


99


93


Operating income

166


175


38


54


49


Net earnings

20


29


8


18


4



per common share

$

0.21


$

0.31


$

0.08


$

0.19


$

0.04


Margin (OIBD)

9.5

%

10.1

%

9.3

%

11.7

%

10.2

%

As reported






Operating income before depreciation and amortization (OIBD)

311


343


57


98


95


Operating income

137


176


13


53


51


Net earnings (loss)

(147)


11


(47)


6


(16)



per common share

$

(1.57)


$

0.11


$

(0.51)


$

0.05


$

(0.17)


Note 1 - Our 2014 and 2013 results have been adjusted to account for the reclassification of discontinued operations.

Note 2 - Refer to "Supplemental Information on Non-IFRS measures" section.

 

Results Analysis for the Three-month Period Ended December 31, 2014 Compared to the Same Period Last Year

In comparison to the same period last year, sales increased by 4% to $879 million in the fourth quarter of 2014 compared to $844 million in the fourth quarter of 2013 due to favourable exchange rates and higher shipments that more than offset lower average selling prices in our Boxboard Europe and Tissue Papers Groups. 

Operating income, excluding specific items, decreased from $54 million in the fourth quarter of 2013 to $38 million for the same period in 2014.  In addition to the above-mentioned factors, lower energy credits in Europe ($4 million) and increased raw material costs contributed to lower operating income. The results of our Containerboard and Specialty Products Groups were fairly stable compared to the last quarter of the previous year. It is worth noting that in 2013, the fourth quarter results of our Containerboard Group were positively impacted by a $5 million post-retirement benefits adjustment. Our Tissue Papers Group's results were significantly impacted by lower selling prices and the start-up costs of our recent investments. Including specific items, operating income amounted to $13 million in comparison to $53 million for the same period of last year.

Net earnings excluding specific items amounted to $8 million ($0.08 per share) in the fourth quarter of 2014 compared to $18 million ($0.19 per share) for the same period in 2013. In the fourth quarter of 2014, the following specific items, before income taxes, impacted our operating income and/or net earnings:

  • a $13 million impairment charge on assets in our Boxboard Europe and Specialty Products Groups (operating income and net earnings);
  • a $5 million unrealized loss on derivative financial instruments (operating income and net earnings);
  • a $5 million provision following a class-action settlement in the containerboard segment (operating income and net earnings);
  • a $2 million charge related to restructuring measures (operating income and net earnings);
  • a $13 million foreign exchange loss on long-term debt and financial instruments (net earnings);
  • a $2 million loss related to the share of results of associates and joint ventures (net earnings);
  • a $5 million reversal of the above-mentioned items attributable to non-controlling interests (net earnings);
  • a $36 million loss from impairment charges and restructuring costs related to discontinued operations (net earnings).

Including specific items, the net loss amounted to $47 million ($0.51 per share) in the fourth quarter of 2014 compared to net earnings of $6 million ($0.05 per share) for the same quarter in 2013.

Results Analysis for the Three-month Period Ended December 31, 2014 Compared to the Previous Quarter

In comparison to the previous quarter, sales decreased by 3% to reach $879 million. The positive impact of favourable exchange rates was more than offset by lower average selling prices in our containerboard activities and a decrease in shipments, particularly in the tissue papers sector which continued to face intense competition in the retail market during the fourth quarter.

Operating income excluding specific items decreased by 22% to $38 million as higher seasonal energy costs and start-up costs also negatively impacted results. Net earnings excluding specific items for the fourth quarter of 2014 were $8 million ($0.08 per share) compared to net earnings of $4 million ($0.04 per share) during the previous quarter. Net earnings for the previous quarter were reduced by $14 million ($0.15 per share) due to a withholding tax charge following the optimization of our North American capital structure.

Improved free cash flows and working capital resulted in a decrease of $27 million in the net debt to $1,613 million as at December 31, 2014, despite the depreciation of the Canadian dollar compared to its U.S. counterpart which increased our net debt by $31 million. Our net debt position does not consider the gross proceeds from the sale of our North American boxboard assets in the amount of $45 million.

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: "With certain important restructuring initiatives of our action plan implemented during 2014, we will focus on getting the most out of our renewed operating platform during the next year. Demand for Packaging Products seems good as we start the year and most business drivers should provide tailwinds in 2015. We are still expecting challenging conditions in 2015 in the tissue sector and we took additional downtime during the first quarter of 2015 for equipment maintenance and upgrades. However, our new tissue sites in the U.S. will gradually add to our results in 2015 and we expect Greenpac to contribute positively to EPS. Hence, following all the difficult decisions taken in 2014, we are confident that our margins will be higher this year. Coupled with prudent management of our cash flows, including lower capital expenditures, our leverage ratios should also improve despite the impact of a weaker Canadian dollar on our financial situation."

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 31, 2015 to shareholders of record at the close of business on March 24, 2015. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada).

In the fourth quarter of 2014, Cascades purchased for cancellation 32,800 shares at an average price of $5.96.

Conference Call Information

Management will comment on the 2014 fourth quarter and annual financial results during a conference call to be held today at 10:00 a.m. EDT.

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 20, 2015 by dialing 1-888-843-7419 and using the access code 9501952#.

Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibre. The Corporation employs close to 11,000 employees, who work in more than 90 production 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 this 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, 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,
2014

DECEMBER 31,
2013

Assets



Current assets



Cash and cash equivalents

29

23

Accounts receivable

453

512

Current income tax assets

13

34

Inventories

462

543

Financial assets

1

2

Assets of disposal group classified as held for sale

72


1,030

1,114

Long-term assets



Investments in associates and joint ventures

259

261

Property, plant and equipment

1,573

1,684

Intangible assets with finite useful life

183

196

17

Financial assets

25

Other assets

83

108

118

Deferred income tax assets

185

Goodwill and other intangible assets with indefinite useful life

335

333


3,673

3,831

Liabilities and Equity



Current liabilities



Bank loans and advances

46

56

Trade and other payables

557

590

Current income tax liabilities

5

2

Current portion of long-term debt

40

39

Current portion of provisions for contingencies and charges

11

2

Current portion of financial liabilities and other liabilities

16

11

Liabilities of disposal group classified as held for sale

32


707

700

Long-term liabilities



Long-term debt

1,556

1,540

Provisions for contingencies and charges

33

37

Financial liabilities

45

39

Other liabilities

191

212

Deferred income tax liabilities

138

109


2,670

2,637

Equity attributable to Shareholders



Capital stock

483

482

Contributed surplus

18

17

Retained earnings

454

642

Accumulated other comprehensive loss

(62)

(60)


893

1,081

Non-controlling interest

110

113

Total equity

1,003

1,194


3,673

3,831

 

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)

2014


2013


2014


2013

Sales

879


844


3,561


3,370

Cost of sales and expenses





Cost of sales (including depreciation and amortization of $174 million ($44 million in the fourth quarter); 2013 — $167 million ($45 million in the fourth quarter))

758


702


3,063


2,863

Selling and administrative expenses

85


89


334


335

Loss on acquisitions, disposals and others

5




3

Impairment charges and restructuring costs

15


2


23


2

Foreign exchange gain

(1)


(2)


(2)


(4)

Loss (gain) on derivative financial instruments

4



6


(5)


866


791


3,424


3,194

Operating income

13


53


137


176

Financing expense

23


26


101


104

Interest expense on employee future benefits

1


2


6


8

Loss on refinancing of long-term debt



44


Foreign exchange loss (gain) on long-term debt and financial instruments

13


2


30


(2)

Share of results of associates and joint ventures

(1)


5



3

Profit (loss) before income taxes

(23)


18


(44)


63

Provision for income taxes

2


3


16


19

Net earnings (loss) from continuing operations including non-controlling interest for the period

(25)


15


(60)


44

Net loss from discontinued operations for the period

(26)


(8)


(83)


(30)

Net earnings (loss) including non-controlling interest for the period

(51)


7


(143)


14

Net earnings (loss) attributable to non-controlling interest

(4)


1


4


3

Net earnings (loss) attributable to Shareholders for the period

(47)


6


(147)


11

Net earnings (loss) from continuing operations per basic and diluted common share

$

(0.23)


$

0.15


$

(0.68)


$

0.44

Net earnings (loss) per basic and diluted common share

$

(0.51)


$

0.05


$

(1.57)


$

0.11

Weighted average basic number of common shares outstanding

94,079,596


93,887,849


94,025,600


93,885,402

Weighted average number of diluted common shares

95,288,258


95,057,505


95,355,998


94,694,761






Net earnings (loss) attributable to Shareholders:






Continuing operations

(21)


14


(64)


41


Discontinued operations

(26)


(8)


(83)


(30)

Net earnings (loss)

(47)


6


(147)


11

 

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)

2014


2013


2014


2013

Net earnings (loss) including non-controlling interest for the period

(51)


7


(143)


14

Other comprehensive income (loss)





Items that may be reclassified subsequently to earnings





Translation adjustments





Change in foreign currency translation of foreign subsidiaries

16


24


37


52

Change in foreign currency translation related to net investment hedging activities

(19)


(15)


(44)


(30)

Income taxes

3


2


6


4

Cash flow hedges





Change in fair value of foreign exchange forward contracts

1


(4)


3


(7)

Change in fair value of interest rate swaps

(3)


2


(13)


13

Change in fair value of commodity derivative financial instruments

(10)


4


(1)


9

Income taxes

4


(1)


5


(6)


(8)


12


(7)


35

Items that are reclassified to retained earnings





Actuarial gain (loss) on post-employment benefit obligations

(11)


23


(39)


97

Income taxes

3


(6)


11


(26)


(8)


17


(28)


71

Other comprehensive income (loss)

(16)


29


(35)


106

Comprehensive income (loss) including non-controlling interest for the period

(67)


36


(178)


120

Comprehensive income (loss) attributable to non-controlling interest for the period

(7)


6


(3)


12

Comprehensive income (loss) attributable to Shareholders for the period

(60)


30


(175)


108

Comprehensive income (loss) attributable to Shareholders:





Continuing operations

(33)


28


(84)


110

Discontinued operations

(27)


2


(91)


(2)

Comprehensive income (loss)

(60)


30


(175)


108

 

CONSOLIDATED STATEMENTS OF EQUITY




For the year ended December 31, 2014

(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


17


642


(60)


1,081


113


1,194

Comprehensive income (loss)









Net earnings (loss)



(147)



(147)


4


(143)


Other comprehensive loss



(26)


(2)


(28)


(7)


(35)




(173)


(2)


(175)


(3)


(178)

Dividends



(15)



(15)



(15)

Stock options


1




1



1

Issuance of common shares

1





1



1

Balance - End of year

483


18


454


(62)


893


110


1,003










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

 

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)

2014


2013


2014


2013

Operating activities from continuing operations





Net earnings (loss) attributable to Shareholders for the period

(47)


6


(147)


11

Net loss from discontinued operations for the period

26


8


83


30

Net earnings (loss) from continuing operations

(21)


14


(64)


41

Adjustments for:






Financing expense and interest expense on employee future benefits

24


28


107


112


Loss on refinancing of long-term debt



44



Depreciation and amortization

44


45


174


167


Loss on acquisitions, disposals and others

5




3


Impairment charges and restructuring costs

13



21



Unrealized loss (gain) on derivative financial instruments

5


(1)


6


(6)


Foreign exchange loss (gain) on long-term debt and financial instruments

13


2


30


(2)


Provision for income taxes

2


3


16


19


Share of results of associates and joint ventures

(1)


5



3


Net earnings attributable to non-controlling interest

(4)


1


4


3


Net financing expense paid

(4)


(35)


(73)


(100)


Premium paid on long-term debt refinancing



(31)



Income taxes received (paid)

(7)


2


14


5


Dividend received

6


5


15


12


Employee future benefits and others

(4)


(11)


(19)


(26)


71


58


244


231

Changes in non-cash working capital components

44


34


(13)


5


115


92


231


236

Investing activities from continuing operations





Investments in associates and joint ventures


(15)



(32)

Payments for property, plant and equipment

(55)


(43)


(178)


(138)

Proceeds on disposals of property, plant and equipment

1


3


7


12

Investments in intangible and other assets


7


(2)


(15)


(54)


(48)


(173)


(173)

Financing activities from continuing operations





Bank loans and advances

(7)


(19)


(3)


(31)

Change in revolving credit facilities

(42)


(2)


(154)


76

Issuance of senior notes, net of related expenses



833


Repayment of senior notes



(740)


(10)

Increase in other long-term debt

1


1


23


14

Payments of other long-term debt

(19)


(14)


(50)


(50)

Settlement of derivative financial instruments




(14)

Issuance of common shares



1


Acquisition of non-controlling interest




(19)

Dividends paid to the Corporation's Shareholders

(4)


(3)


(15)


(15)


(71)


(37)


(105)


(49)

Change in cash and cash equivalents during the period from continuing operations

(10)


7


(47)


14

Change in cash and cash equivalents during the period from discontinued operations

9


(9)


54


(12)

Net change in cash and cash equivalents during the period

(1)


(2)


7


2

Currency translation on cash and cash equivalents



(1)


1

Cash and cash equivalents - Beginning of the period

30


25


23


20

Cash and cash equivalents - End of the period

29


23


29


23

 

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 are 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, 2013.

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 segment 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)

2014


2013


2014


2013

Packaging Products






Containerboard

348


328


1,407


1,314


Boxboard Europe

196


216


873


837


Specialty Products

139


192


716


774


Discontinued operations of Containerboard

(53)


(47)


(226)


(219)


Discontinued operations of Boxboard Europe


(14)


(32)


(51)


Discontinued operations of Specialty Products

(2)


(57)


(148)


(226)


Intersegment sales

(13)


(13)


(49)


(50)


615


605


2,541


2,379

Tissue Papers

270


249


1,054


1,033

Intersegment sales and others

(6)


(10)


(34)


(42)

Total

879


844


3,561


3,370

 


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)

2014


2013


2014


2013

Packaging Products






Containerboard

10


45


108


156


Boxboard Europe

5



50


30


Specialty Products


10


(4)


32


Discontinued operations of Containerboard

28


(1)


56


1


Discontinued operations of Boxboard Europe

1


13


14


17


Discontinued operations of Specialty Products

4


(7)


30


3


48


60


254


239

Tissue Papers

20


49


95


150

Corporate

(11)


(11)


(38)


(46)

Operating income before depreciation and amortization

57


98


311


343

Depreciation and amortization

(44)


(45)


(174)


(167)

Financing expense and interest expense on employee future benefits

(24)


(28)


(107)


(112)

Loss on refinancing of long-term debt



(44)


Foreign exchange gain (loss) on long-term debt and financial instruments

(13)


(2)


(30)


2

Share of results of associates and joint ventures

1


(5)



(3)

Profit (loss) before income taxes

(23)


18


(44)


63

 


PAYMENTS FOR PROPERTY, PLANT AND EQUIPMENT


For the 3-month periods ended
December 31,


For the years ended
December 31,

(in millions of Canadian dollars) (unaudited)

2014


2013


2014


2013

Packaging Products






Containerboard

13


18


34


44


Boxboard Europe

4


10


33


29


Specialty Products

9


8


19


22


Discontinued operations of Containerboard

(1)


(2)


(2)


(4)


Discontinued operations of Specialty Products


(2)


(1)


(6)


25


32


83


85

Tissue Papers

31


22


88


47

Corporate

2


4


8


15

Total acquisitions

58


58


179


147

Proceeds on disposals of property, plant and equipment

(1)


(3)


(7)


(12)

Capital-lease acquisitions and acquisitions included in other debts

(2)


(1)


(14)


(4)


55


54


158


131

Acquisitions of property, plant and equipment included in ''Trade and other payables''






Beginning of period

19


19


33


28


End of period

(20)


(33)


(20)


(33)

Payments for property, plant and equipment net of proceeds on disposals

54


40


171


126

 

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, discontinued operations, 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 excluding specific items and net earnings  per share excluding specific items:





(in millions of Canadian dollars, except amounts per share) (unaudited)

Net earnings (loss)


Net earnings (loss) per share1


2014


2013


Q4 2014


Q4 2013


Q3 2014


2014


2013


Q4 2014


Q4 2013


Q3 2014












As per IFRS

(147)


11


(47)


6


(16)


$

(1.57)


$

0.11


$

(0.51)


$

0.05


$

(0.17)

Specific items:











Loss on acquisitions, disposals and others


3


5





$

0.03


$

0.04



Impairment charges (reversal)

21


(3)


13


(3)



$

0.13


$

(0.02)


$

0.07


$

(0.02)


Restructuring costs

2


5


2


5



$

0.02


$

0.03


$

0.02


$

0.03


Unrealized loss (gain) on financial instruments

6


(6)


5


(1)


(2)


$

0.05


$

(0.04)


$

0.04



$

(0.01)

Loss on refinancing of long-term debt

44






$

0.35





Unrealized gain on interest rates swaps


(1)






$

(0.01)




Foreign exchange loss (gain) on long-term debt and financial instruments

30


(2)


13


2


24


$

0.28


$

(0.02)


$

0.13


$

0.02


$

0.22

Share of results of associates and joint ventures

2


(4)


2


1


(2)


$

0.01


$

(0.03)


$

0.01


$

0.01


$

(0.02)

Included in discontinued operations, net of tax

87


24


25


9


1


$

0.94


$

0.26


$

0.28


$

0.10


$

0.02

Tax effect on specific items, other tax adjustments and attributable to non-controlling interest1

(25)


2


(10)


(1)


(1)







167


18


55


12


20


$

1.78


$

0.20


$

0.59


$

0.14


$

0.21

Excluding specific items

20


29


8


18


4


$

0.21


$

0.31


$

0.08


$

0.19


$

0.04

Note 1 - Specific amounts per share are calculated on an after-tax basis and net of the portion attributable to non-controlling interest.

 

Net earnings (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)

2014


2013


Q4 2014


Q4 2013


Q3 2014







Net earnings (loss) attributable to Shareholders for the year

(147)


11


(47)


6


(16)

Net earnings (loss) attributable to non-controlling interest

4


3


(4)


1


1

Net loss (earnings) from discontinued operations for the year

83


30


26


8


(3)

Provision for income taxes

16


19


2


3


21

Share of results of associates and joint ventures


3


(1)


5


(1)

Foreign exchange loss (gain) on long-term debt and financial instruments

30


(2)


13


2


24

Financing expense, interest expense on employee future benefits and loss on refinancing of long term debt

151


112


24


28


25

Operating income

137


176


13


53


51

Specific items:







Loss on acquisitions, disposals and others


3


5




Impairment charges (reversal)

21


(3)


13


(3)



Restructuring costs

2


5


2


5



Unrealized loss (gain) on financial instruments

6


(6)


5


(1)


(2)


29


(1)


25


1


(2)

Operating income - excluding specific items

166


175


38


54


49

Depreciation and amortization

174


167


44


45


44

Operating income before depreciation and amortization - excluding specific items

340


342


82


99


93

 

 

SOURCE Cascades Inc.

For further information: Media: Hugo D'Amours, Vice-President, Communications and Public Affairs, (819) 363-5184; Investors: Riko Gaudreault, Director, Investor Relations and Business Strategy, (514) 282-2697; Source: Allan Hogg, Vice-President and Chief Financial Officer; Also follow us on social media: Website: www.cascades.com, Twitter: twitter.com/@CascadesInvest, Facebook: facebook.com/Cascades, YouTube: youtube.com/Cascades

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