AKITA Drilling Ltd. Announces First Quarter Earnings and Cash Flow
Apr 30, 2015
CALGARY, April 30, 2015 /CNW/ - AKITA Drilling Ltd.'s net earnings for the three months ended March 31, 2015 were $4,218,000 ($0.24 per share basic; $0.23 per share diluted) on revenue of $46,715,000 compared to net earnings of $10,150,000 ($0.57 per share basic; $0.56 per share diluted) on revenue of $54,342,000 for the corresponding period in 2014. Funds flow from operations for the quarter ended March 31, 2015 was $14,059,000 compared to $17,665,000 in the corresponding quarter in 2014.
During the first quarter of 2015, commodity prices for crude oil and natural gas were reduced to approximately half of their values compared to the corresponding quarter of 2014. This dramatic reduction in commodity prices had a major negative effect on AKITA's activity levels and overall profitability during the first quarter of 2015. AKITA achieved 1,635 operating days in the first quarter of 2015 compared to 2,112 operating days in the first quarter of 2014. Conventional rig activity declined 60% from the first quarter of 2014 which was partially offset by a 9% increase in pad rig activity.
Overall, the 23% decline in operating days compared to the first quarter of 2014 had a significant impact on AKITA's financial performance in the first quarter of 2015. The lower activity level resulted in less revenue and ultimately lower net earnings and funds flow from operations. In addition to fewer operating days, the Company also experienced significant pressure on day rates throughout its operations when compared to the first quarter of 2014. However, the effect of downward day rate pressure was mitigated by the utilization of more pad rigs in the first quarter of 2015, which command higher day rates than the mix of rigs utilized in the first quarter of 2014.
Unlike 2014 when the Company undertook the largest capital program in its history, management's focus in 2015 has been directed to ensuring that AKITA maintains the quality of its balance sheet, which has historically been one of the strongest in the industry. As such, following the completion of construction of a pad triple rig in mid-2015, most of AKITA's capital expenditures are planned towards routine items for the balance of the year. At March 31, 2015, the Company had net working capital of $5,350,000 and had $80,000,000 of unused borrowing capacity.
Management anticipates that the current weak market will continue until significant and sustained improvements occur in prices for crude oil and natural gas. However, a number of key considerations exist that are expected to help ensure the Company is well positioned to succeed through this challenging environment: significant financial strength and flexibility, a high performance drilling fleet operated by skilled and experienced personnel that focus on providing a premium level of service, top tier customers that have the financial resources to operate throughout the business cycle and an overall strategy that is scalable to changes in business conditions.
Selected information from AKITA Drilling Ltd.'s Management's Discussion and Analysis from the Quarterly Report is as follows:
Basis of Analysis in this MD&A, Non-Standard and Additional GAAP Items
The Company reports its joint venture activities in the financial statements in accordance with International Financial Reporting Standards ("IFRS"), IFRS 11 "Joint Arrangements". In determining the classification of its joint arrangements, AKITA considers whether the joint arrangements are structured through separate vehicles, if the legal form of the separate vehicles confers upon the parties direct rights to assets and obligations for liabilities relating to the arrangements, whether the contractual terms between the parties confer upon them rights to assets and obligations for liabilities relating to the arrangements as well as if other facts and circumstances lead to rights for assets and obligations for liabilities being conferred upon the parties to the arrangement prior to concluding that AKITA's joint ventures are properly classified as joint ventures rather than joint operations. Under IFRS 11, AKITA is required to report its joint venture assets, liabilities and financial activities using the equity method of accounting. However, for purposes of analysis in this MD&A, the proportionate share of assets, liabilities and financial activities is included as non-standard information ("Adjusted") where appropriate. The Company provides the same drilling services and utilizes the same management, financial and reporting controls for its joint venture activities as are in place for its wholly owned operations. None of AKITA's joint ventures are individually material in size when considered in the context of AKITA's overall operations.
Operating margin, revenue per operating day, operating and maintenance expenses per operating day and operating margin per operating day are not recognized measures under IFRS. Management and certain investors may find operating margin data to be a useful measurement tool, however, as it provides an indication of the profitability of the business prior to the influence of depreciation, overhead expenses, financing costs and income taxes. Management and certain investors may find "per operating day" measures for revenue and operating margin indicate pricing strength while operating and maintenance expenses per operating day demonstrates the degree of cost control and provides a proxy for specific inflation rates incurred by the Company. Readers should be cautioned that in addition to the foregoing, other factors, including the mix of rigs between conventional and pad and singles, doubles and triples can also influence these results. Readers should also be aware that AKITA includes standby revenue in its determination of "per operating day" results.
Funds flow from operations is considered as an additional GAAP measure under IFRS. AKITA's method of determining funds flow from operations may differ from methods used by other companies and includes cash flow from operating activities before working capital changes as well as equity income from joint ventures adjusted for income tax amounts paid during the period. Management and certain investors may find funds flow from operations to be a useful measurement to evaluate the Company's operating results at year-end and within each year, since the seasonal nature of the business affects the comparability of non-cash working capital changes both between and within periods.
|
Revenue and Operating & Maintenance Expenses |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Revenue per Interim Financial Statements |
46.7 |
54.3 |
(7.6) |
(14%) |
|
Proportionate Share of Revenue from Joint Ventures(1) |
12.8 |
17.5 |
(4.7) |
(27%) |
|
Adjusted Revenue(1) |
59.5 |
71.8 |
(12.3) |
(17%) |
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Operating & Maintenance Expenses per Interim Financial Statements |
31.2 |
34.8 |
(3.6) |
(10%) |
|
Proportionate Share of Operating & Maintenance Expenses from Joint Ventures(1) |
8.3 |
10.9 |
(2.6) |
(24%) |
|
Adjusted Operating & Maintenance Expenses (1) |
39.5 |
45.7 |
(6.2) |
(14%) |
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Adjusted Revenue(1) |
59.5 |
71.8 |
(12.3) |
(17%) |
|
Adjusted Operating & Maintenance Expenses(1) |
39.5 |
45.7 |
(6.2) |
(14%) |
|
Adjusted Operating Margin(1)(2) |
20.0 |
26.1 |
(6.1) |
(23%) |
|
$Dollars |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Adjusted Revenue per Operating Day(1) |
36,393 |
34,028 |
2,365 |
7% |
|
Adjusted Operating & Maintenance Expenses per Operating Day(1) |
24,165 |
21,619 |
2,545 |
12% |
|
Adjusted Operating Margin per Operating Day(1)(2) |
12,228 |
12,409 |
(180) |
(1%) |
|
(1) |
Proportionate share of revenue from joint ventures, adjusted revenue, proportionate share of operating & maintenance expenses from joint ventures, adjusted operating & maintenance expenses, adjusted operating margin, adjusted revenue per operating day, adjusted operating & maintenance expenses per operating day and adjusted operating margin per operating day are non-standard accounting measures. See commentary in "Basis of Analysis in this MD&A, Non-Standard and Additional GAAP Items". |
|
(2) |
Adjusted operating margin is the difference between adjusted revenue and adjusted operating & maintenance expenses. |
During the first quarter of 2015, adjusted revenue decreased to $59,502,000 from $71,867,000 during the first quarter of 2014. This reduction in adjusted revenue was directly attributable to weaker market conditions that broadly influenced AKITA's financial results, but was most pronounced for conventional single and triple rigs. Weaker market conditions affected both the amount of work for each rig category as well as the rates that were achieved.
While overall adjusted revenue for the first quarter of 2015 declined by 17% compared to the corresponding quarter in 2014, adjusted revenue per day increased by 7%. Although financial results for each of AKITA's rig categories were negatively affected by lower day rates, the change in classes of rigs worked offset this effect. Most of AKITA's current year drilling activities were performed by the Company's highest performance pad rigs which are also the rigs that achieve the highest day rates.
Adjusted operating and maintenance costs are tied to revenue and amounted to $39,509,000 ($24,165 per operating day) during the first quarter of 2015 compared to $45,660,000 ($21,619 per operating day) in the same period of the prior year. In addition to being the highest revenue generating assets for the Company, AKITA's pad rigs also have the highest "per operating day" operating and maintenance costs associated with their operation.
The adjusted operating margin for the Company decreased to $19,993,000 in the first quarter of 2015 from $26,207,000 during the corresponding quarter of 2014. The reduction in adjusted operating margin directly resulted from weaker drilling activity during the quarter, particularly for conventional singles and triples. When considered on a "per operating day basis", the adjusted operating margin during the first quarter of 2015 was only 1% lower than during the corresponding first quarter of 2014 as AKITA's highest performance rigs provided most of the drilling activities.
From time to time, the Company requires customers to make pre-payments prior to the provision of drilling services. In addition, from time to time, the Company records cost recoveries related to capital enhancements for specific customer related projects. At March 31, 2015, deferred revenue related to these activities totalled $127,000 (March 31, 2014 - $169,000).
|
Depreciation and Amortization Expense |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Depreciation and Amortization Expense |
9.1 |
7.9 |
1.2 |
15% |
Depreciation and amortization expense increased to $9,068,000 during the first quarter of 2015 from $7,863,000 in the corresponding period in 2014. AKITA depreciates its rig fleet on a unit of production basis and while overall drilling days declined during the first quarter of 2015 compared to the corresponding quarter in 2014, the most active rigs in AKITA's fleet were also the rigs with the highest cost bases. In the first quarter of 2015, drilling rig depreciation accounted for 96% of total depreciation expense (Q1, 2014 - 96%).
While AKITA conducts many of its drilling operations via joint ventures, the drilling rigs used to conduct those activities are owned jointly by AKITA and its joint venture partners, and not the joint ventures themselves. Therefore, the joint ventures do not hold any property, plant, or equipment assets directly. Consequently, the depreciation balance reported above includes depreciation on assets involved in both wholly owned and joint ventured activities.
|
Selling and Administrative Expense |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Selling & Administrative Expense per Interim Financial Statements |
4.7 |
5.2 |
(0.5) |
(10%) |
|
Proportionate Share of Selling & Administrative Expense from Joint Ventures(1) |
0.1 |
0.2 |
(0.1) |
(50%) |
|
Adjusted Selling & Administrative Expense(1) |
4.8 |
5.4 |
(0.6) |
(11%) |
|
(1) |
Proportionate share of selling and administrative expense from joint ventures and adjusted selling and administrative expense are non-standard accounting measures. See commentary in "Basis of Analysis in this MD&A, Non-Standard and Additional GAAP Items". |
Adjusted selling and administrative expenses were 8.1% of adjusted revenue in the first quarter of 2015 compared to 7.5% of adjusted revenue in the first quarter of 2014, largely as a result of decreased adjusted revenue in 2015. Salaries and benefits accounted for 58% of these expenses (59% in Q1 2014).
|
Equity Income from Joint Ventures |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Proportionate Share of Revenue from Joint Ventures(1) |
12.8 |
17.5 |
(4.7) |
(27%) |
|
Proportionate Share of Operating & Maintenance Expenses from Joint Ventures(1) |
8.3 |
10.9 |
(2.6) |
(24%) |
|
Proportionate Share of Selling & Administrative Expense from Joint Ventures(1) |
0.1 |
0.2 |
(0.1) |
(50%) |
|
Equity Income from Joint Ventures |
4.4 |
6.4 |
(2.0) |
(31%) |
|
(1) |
Proportionate share of revenue from joint ventures, proportionate share of operating & maintenance expenses from joint ventures and proportionate share of selling & administrative expense from joint ventures are non-standard accounting measures. See commentary in "Basis of Analysis in this MD&A, Non-Standard and Additional GAAP Items". |
The Company provides the same drilling services and utilizes the same management, financial and reporting controls for its joint venture activities as are in place for its wholly owned operations. The analyses of these activities are incorporated throughout the relevant sections of this MD&A. Joint venture activities are often located in some of the most prospective regions in Canada. Two thirds of rigs utilized by AKITA's joint ventures are pad drilling rigs.
|
Other Income (Losses) |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Total Other Income (Losses) |
(0.1) |
0.5 |
(0.6) |
(120%) |
During the first quarter of 2015, the Company recorded interest expense of $206,000 as a result of the Company's indebtedness as well as to accrue the related future cost of the Company's unfunded defined benefit pension plan. During the corresponding quarter in 2014, AKITA recorded interest expense of $34,000 primarily to reflect the related future cost of the Company's unfunded defined benefit pension plan.
The Company invests any cash balances in excess of its ongoing operating requirements in bank guaranteed highly liquid investments. Interest income decreased to $31,000 in the first three months of 2015 from $64,000 in the corresponding period of 2014 as a result of reduced cash and elimination of term deposit balances. Since 2011, but especially in 2014, the Company has undertaken significant capital expenditures related to the construction of new rigs and the conversion of conventional rigs into pad rigs, thereby utilizing term deposits and reducing AKITA's cash balances over time.
During the first quarter of 2015, the Company sold some ancillary assets for $705,000 that resulted in a loss of $190,000 during the quarter. No similar transaction occurred during the first quarter of 2014.
Approximately 80% ($184,000) of amounts recorded as "Net Other Gains" during the first quarter of 2015 were related to foreign exchange, both realized and unrealized, that were associated with ongoing rig construction. In 2014, amounts reported as "Net Other Gains" of $449,000 included $298,000 with respect to unrealized gains related to forward exchange contracts purchased to provide a hedge for foreign rig equipment commitments for a rig under construction.
|
Income Tax Expense |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Current Tax Expense |
1.4 |
3.5 |
(2.1) |
(60%) |
|
Deferred Tax Expense |
0.3 |
(0.2) |
0.5 |
250% |
|
Income Tax Expense |
1.7 |
3.3 |
(1.6) |
(48%) |
Income tax expense decreased to $1,717,000 in the first quarter of 2015 from $3,276,000 in the corresponding period in 2014 due to lower pre-tax earnings. Recent capital expenditure programs, particularly during 2014, have resulted in a higher proportion of AKITA's income taxes being deferred into future years.
|
Net Income, Funds Flow and Net Cash From Operating Activities |
||||
|
$Million |
||||
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Net Income |
4.2 |
10.2 |
(6.0) |
(59%) |
|
Funds Flow From Operations(1) |
14.1 |
17.7 |
(3.6) |
(20%) |
|
(1) |
Funds flow from operations is an additional GAAP measure under IFRS. See commentary in "Basis of Analysis in this MD&A, Non-Standard and Additional GAAP Items". |
Net income attributable to shareholders decreased to $4,218,000 ($0.24 basic earnings per Class A Non-Voting and Class B Common Share / $0.23 diluted earnings per share) for the first quarter of 2015 from $10,150,000 ($0.57 basic earnings per share / $0.56 diluted earnings per share) in the first quarter of 2014. Funds flow from operations decreased to $14,059,000 in the first quarter of 2015 from $17,665,000 in the corresponding quarter in 2014. Lower net income in 2015 was directly attributable to reductions in drilling activity, reduced day rates, as well as increased depreciation expense. Funds flow from operations was negatively affected by weaker drilling activity in the first quarter of 2015 but is not affected by depreciation expense. As a consequence, while net income decreased 59% from the first quarter of 2014 to the first quarter of 2015, the decline in funds flow when comparing the same periods was only 20%.
Fleet and Rig Utilization
AKITA had 35 drilling rigs during the first quarter of 2015, including ten that operated under joint ventures, (31.725 net to AKITA) compared to 38 rigs (34.725 net) during the corresponding period of 2014. In addition, the Company had one pad rig under construction at March 31, 2015.
|
Three Months Ended March 31 |
2015 |
2014 |
Change |
% Change |
|
Operating Days |
1,635 |
2,112 |
(477) |
(23%) |
|
Utilization Rate |
51.9% |
61.8% |
(9.9) |
(16%) |
Liquidity and Capital Resources
Cash used for capital expenditures totalled $5,017,000 in the first quarter of 2015 (2014 - $18,064,000). Approximately 70% of current year capital expenditures relate to ongoing construction of a new pad rig which is anticipated to be completed in mid-2015. Other capital expenditures related to routine items.
At March 31, 2015, AKITA's Statement of Financial Position included working capital (current assets minus current liabilities) of $5,350,000 compared to working capital of $34,926,000 at March 31, 2014 and a working capital deficiency of $5,028,000 at December 31, 2014. The seasonal nature of AKITA's business typically results in higher non-cash working capital balances at the end of the first quarter than at year-end due to the high seasonal activity levels encountered in the first quarter. Non-cash working capital amounted to $3,996,000 at March 31, 2015 compared to a deficiency of $7,040,000 at December 31, 2014.
The Company did not have a normal course issuer bid in place during the first quarter of 2015. During the three month period ended March 31, 2014, the Company purchased 27,600 Class A Non-Voting Shares at an average purchase price of $15.49 pursuant to its normal course issuer bid.
As part of the loan facility agreement, the Company must adhere to the following financial covenants:
- Funded debt to EBITDA shall not be greater than 3.00 to 1. As at March 31, 2015 (the most recent measurement date), AKITA's actual rate was 0.38 to 1;
- EBITDA to interest expense shall not be less than 3.00 to 1. As at March 31, 2015, AKITA's actual rate was 120.90 to 1: and
- Tangible assets to funded debt shall not be less than 2.25 to 1. As at March 31, 2015, AKITA's actual rate was 15.85 to 1.
Readers should be aware that the terms "funded debt", "EBITDA", "interest expense" and "tangible assets" have been specifically defined in the loan facility agreement and are not necessarily defined by or consistent with either GAAP or determinations by other users for other purposes.
The Company had four rigs under multi-year contracts at March 31, 2015. Of these contracts, two are anticipated to expire in 2016, one in 2018 and one in 2019.
From time to time, the Company may provide guarantees for bank loans to joint venture partners in respect of sales of rig interests to joint venture partners. At March 31, 2015 (and at December 31, 2014), AKITA provided $9,381,000 in deposits with its bank for those purposes (March 31, 2014 - $5,950,000). AKITA's security from its partners for these guarantees includes interests in specific rig assets. The $9,381,000 in deposits has been classified as restricted cash on the Consolidated Statements of Financial Position.
Forward-Looking Statements|
From time to time AKITA makes forward-looking statements. These statements include but are not limited to comments with respect to AKITA's objectives and strategies, financial condition, results of operations, the outlook for the industry and risk management.
By their nature, these forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that the predictions and other forward-looking statements will not be realized. Readers of this News Release are cautioned not to place undue reliance on these statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, estimates and intentions expressed in such forward-looking statements.
Forward-looking statements may be influenced by factors such as the level of exploration and development activity carried on by AKITA's customers; world crude oil prices and North American natural gas prices; weather; access to capital markets and government policies. We caution that the foregoing list of factors is not exhaustive and that investors and others should carefully consider the foregoing factors as well as other uncertainties and events prior to making a decision to invest in AKITA. Except as required by law, the Company does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by it or on its behalf.
Selected financial information for the Company is as follows:
|
AKITA Drilling Ltd. |
||||||||
|
Interim Consolidated Statements of Financial Position | ||||||||
|
Unaudited |
March 31 |
March 31 |
December 31 | |||||
|
$ Thousands |
2015 |
2014 |
2014 | |||||
|
Assets |
||||||||
|
Current Assets |
||||||||
|
Cash and cash equivalents |
$ |
1,354 |
$ |
5,643 |
$ |
2,012 | ||
|
Accounts receivable |
38,604 |
49,000 |
39,981 | |||||
|
Income taxes recoverable |
1,800 |
- |
3,011 | |||||
|
Prepaid expenses and other |
983 |
1,539 |
257 | |||||
|
42,741 |
56,182 |
45,261 | ||||||
|
Non-current Assets |
||||||||
|
Restricted cash |
9,381 |
5,950 |
9,381 | |||||
|
Other long-term assets |
998 |
994 |
1,025 | |||||
|
Investment in joint ventures |
3,976 |
13,754 |
6,214 | |||||
|
Property, plant and equipment |
274,126 |
223,208 |
279,045 | |||||
|
Total Assets |
$ |
331,222 |
$ |
300,088 |
$ |
340,926 | ||
|
Liabilities |
||||||||
|
Current Liabilities |
||||||||
|
Operating loan facility |
$ |
19,814 |
$ |
- |
$ |
20,000 | ||
|
Accounts payable and accrued liabilities |
15,925 |
17,487 |
28,589 | |||||
|
Deferred revenue |
127 |
169 |
175 | |||||
|
Dividends payable |
1,525 |
1,526 |
1,525 | |||||
|
Income taxes payable |
- |
2,074 |
- | |||||
|
37,391 |
21,256 |
50,289 | ||||||
|
Non-current Liabilities |
||||||||
|
Financial instruments |
195 |
91 |
226 | |||||
|
Deferred income taxes |
27,409 |
22,538 |
27,053 | |||||
|
Deferred share units |
76 |
- |
91 | |||||
|
Pension liability |
3,534 |
2,650 |
3,426 | |||||
|
Total Liabilities |
68,605 |
46,535 |
81,085 | |||||
|
Shareholders' Equity |
||||||||
|
Class A and Class B shares |
23,871 |
23,871 |
23,871 | |||||
|
Contributed surplus |
3,640 |
3,253 |
3,557 | |||||
|
Accumulated other comprehensive income (loss) |
(280) |
88 |
(280) | |||||
|
Retained earnings |
235,386 |
226,341 |
232,693 | |||||
|
Total Equity |
262,617 |
253,553 |
259,841 | |||||
|
Total Liabilities and Equity |
$ |
331,222 |
$ |
300,088 |
$ |
340,926 | ||
|
AKITA Drilling Ltd. |
||||||
|
Interim Consolidated Statements of Net Income and Comprehensive Income | ||||||
|
Unaudited |
Three Months Ended March 31 | |||||
|
$ Thousands except per share amounts |
2015 |
2014 | ||||
|
Revenue |
$ |
46,715 |
$ |
54,342 | ||
|
Costs and expenses |
||||||
|
Operating and maintenance |
31,244 |
34,790 | ||||
|
Depreciation and amortization |
9,068 |
7,863 | ||||
|
Selling and administrative |
4,711 |
5,224 | ||||
|
Total costs and expenses |
45,023 |
47,877 | ||||
|
Revenue less costs and expenses |
1,692 |
6,465 | ||||
|
Equity income from joint ventures |
4,379 |
6,481 | ||||
|
Other income (losses) |
||||||
|
Interest income |
31 |
64 | ||||
|
Interest expense |
(206) |
(34) | ||||
|
Gain (loss) on sale of assets |
(190) |
1 | ||||
|
Net other gains |
229 |
449 | ||||
|
Total other income (loss) |
(136) |
480 | ||||
|
Income before income taxes |
5,935 |
13,426 | ||||
|
Income taxes |
1,717 |
3,276 | ||||
|
Net income for the period attributable to shareholders |
4,218 |
10,150 | ||||
|
Other comprehensive income |
- |
- | ||||
|
Comprehensive income for the period attributable to shareholders |
$ |
4,218 |
$ |
10,150 | ||
|
Earnings per Class A and Class B Share |
||||||
|
Basic |
$ |
0.24 |
$ |
0.57 | ||
|
Diluted |
$ |
0.23 |
$ |
0.56 | ||
|
AKITA Drilling Ltd. |
||||||
|
Interim Consolidated Statements of Cash Flows |
||||||
|
Unaudited |
Three Months Ended March 31 | |||||
|
$ Thousands |
2015 |
2014 | ||||
|
Operating Activities |
||||||
|
Net income and comprehensive income |
$ |
4,218 |
$ |
10,150 | ||
|
Non-cash items included in net income and comprehensive income: |
||||||
|
Depreciation and amortization |
9,068 |
7,863 | ||||
|
Deferred income taxes |
356 |
(200) | ||||
|
Expense for defined benefit pension plan |
116 |
98 | ||||
|
Expense for stock options and deferred share units |
69 |
68 | ||||
|
(Gain) loss on sale of assets |
190 |
(1) | ||||
|
Unrealized foreign currency (gain) loss |
73 |
(298) | ||||
|
Unrealized gain on financial guarantee contracts |
(31) |
(15) | ||||
|
Funds flow from operations |
14,059 |
17,665 | ||||
|
Change in non-cash working capital: |
||||||
|
Accounts receivable |
1,377 |
(6,658) | ||||
|
Prepaid expenses and other |
(799) |
(876) | ||||
|
Income taxes recoverable |
1,211 |
- | ||||
|
Accounts payable and accrued liabilities |
(5,228) |
(5) | ||||
|
Deferred revenue |
(48) |
(165) | ||||
|
10,572 |
9,961 | |||||
|
Equity income from joint ventures |
(4,379) |
(6,481) | ||||
|
Pension benefits paid |
(8) |
(4) | ||||
|
Interest paid |
(170) |
(1) | ||||
|
Income taxes expense - current |
1,361 |
3,476 | ||||
|
Income taxes paid |
(1,361) |
(1,824) | ||||
|
Net cash from operating activities |
6,015 |
5,127 | ||||
|
Investing Activities |
||||||
|
Capital expenditures |
(5,017) |
(18,064) | ||||
|
Change in non-cash working capital related to capital |
(7,267) |
(1,372) | ||||
|
Net distributions from investment in joint ventures |
6,617 |
2,819 | ||||
|
Change in term deposits |
- |
5,000 | ||||
|
Proceeds on sale of assets |
705 |
1 | ||||
|
Net cash used in investing activities |
(4,962) |
(11,616) | ||||
|
Financing Activities |
||||||
|
Change in operating loan facility |
(186) |
- | ||||
|
Dividends paid |
(1,525) |
(1,439) | ||||
|
Repurchase of share capital |
- |
(427) | ||||
|
Net cash used in financing activities |
(1,711) |
(1,866) | ||||
|
Decrease in cash |
(658) |
(8,355) | ||||
|
Cash, beginning of period |
2,012 |
13,998 | ||||
|
Cash, End of Period |
$ |
1,354 |
$ |
5,643 | ||
SOURCE AKITA Drilling Ltd.
