2006

2005

2004

Operating activities

Net income

$

643,114

$

585,816

$

454,942

Adjustments to reconcile net income to net cash flows from operating activities

Depreciation of capital assets

75,563

80,336

82,526

Amortization of intangible assets

5,173

—

—

Amortization of deferred charges

2,545

1,671

1,291

Stock based compensation

8,553

2,987

1,123

Deferred income taxes

(17,350

)

71,808

92,380

Gain on sale of assets held for sale

—

(1,863

)

(4,925

)

Unrealized foreign exchange gain

—

(18,863

)

—

Loss on early extinguishment of debt

—

16,423

—

Changes in operating assets and liabilities

Trade receivables

(20,030

)

(7,924

)

(146,191

)

Other receivables

29,933

(24,053

)

(5,017

)

Income taxes recoverable

—

—

36,753

Inventories

(161,946

)

(62,116

)

(137,446

)

Prepaid expenses

(6,732

)

(359

)

(5,114

)

Accounts payable and accrued charges

(38,859

)

32,890

21,255

Accrued payroll and related liabilities

(30,717

)

22,884

23,506

Change in pension liability

(2,037

)

(13,163

)

(11,574

)

Income and other taxes payable

(57,030

)

(42,000

)

91,126

Other current liabilities

3,980

(2,552

)

(5,791

)

Net cash provided by operating activities

434,160

641,922

488,844

Investing activities

Acquisition of business (Note 4)

(1,428,029

)

—

—

Expenditures for capital assets

(101,128

)

(66,801

)

(29,068

)

Proceeds from sale of assets held for sale (Note 9)

—

1,546

4,759

Proceeds from (issuance of) mortgages receivable, net

7,056

3,661

(2,983

)

Investment in other long-term assets

(784

)

—

(95

)

Net cash used for investing activities

(1,522,885

)

(61,594

)

(27,387

)

Financing activities

Proceeds from issuance of common shares pursuant to share option plan

5,361

21,104

30,364

Tax benefit share option plan

2,941

—

—

Common share dividends

(32,581

)

(22,781

)

(9,536

)

Common share repurchase

(85,500

)

(132,893

)

—

Advances of bank indebtedness

65,215

—

—

Repayments of bank indebtedness

(20,000

)

—

—

Net proceeds from issuance of long-term debt (Note 11)

593,763

—

—

Repayment of long-term debt (Note 11)

(4,114

)

(230,473

)

(38,107

)

Redemption of preferred shares

—

—

(108,996

)

Redemption of subordinated notes

—

—

(100,000

)

Net cash (used for) provided by financing activities

525,085

(365,043

)

(226,275

)

Effect of exchange rate changes on cash and cash equivalents

14,953

13,005

(11,767

)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(548,687

)

228,290

223,415

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

583,064

354,774

131,359

CASH AND CASH EQUIVALENTS AT END OF YEAR

$

34,377

$

583,064

$

354,774