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In order to provide additional information, the Company believes it is appropriate to measure free cash flow that is generated by the operations of the Company. Free cash flow is defined as cash flow from operations excluding changes in non-cash working capital, mark-to-market and derivative timing adjustments, financial instruments’ non-cash amount, funds received or paid from the issue or purchase of shares and investment capital expenditures. Free cash flow is a non-GAAP measure. 

Free cash flow is as follows: 

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Free cash flow was $15.1 million lower than the previous year. The decrease is due mainly to lower adjusted results from operating activities of $18.1 million. This was partially offset with an increase in free cash flow of $2.1 million as deferred financing charges of $0.6 million were paid in fiscal 2013 for the renewal of the revolving credit facility compared to $2.7 million in fiscal 2012 for the issuance of the fifth series convertible debentures. In addition, $0.7 million of additional investment capital expenditures were made this year versus last. 

Changes in non-cash operating working capital, income taxes payable and interest payable represent year-over-year movement in current assets, such as accounts receivable and inventories, and current liabilities, such as accounts payable. Movements in these accounts are due mainly to timing in the collection of receivables, receipts of raw sugar and payment of liabilities. Increases or decreases in such accounts are due to timing issues and therefore do not constitute free cash flow. Such increases or decreases are financed from available cash or from the Company’s available credit facility of $150.0 million. Increases or decreases in bank indebtedness are also due to timing issues from the above, and therefore do not constitute available free cash flow. 

The combined impact of the mark-to-market and financial instruments non-cash amount of $2.0 million does not represent cash items as these contracts will be settled when the physical transactions occur, which is the reason for the adjustment to free cash flow. 

Capital expenditures, net of investment capital, were lower by approximately $0.8 million in fiscal 2013 due to timing. Every year, the Company targets to invest approximately $7.0 million in maintenance capital expenditures. 

