content_image/289225.jpg
Excluding strategic initiatives that may arise and the $8.6 million for Peabody, management expects that capital expenditures in 2014 will be between $15 million and $20 million, higher than 2013. Cash generated from operations and short-term borrowings funded capital spending in 2013 and will fund capital additions in 2014. 

## Capital Structure 

Detailed information regarding the designation and number of each class of shares outstanding and of each class of security is disclosed in note 16  to the Consolidated Financial Statements. 

## Equity 

The book value of our equity at the end of 2013 was $12.08 per share compared with $10.14 at the end of 2012. The increase in equity was substantially a result of operating profits. 

We filed a NCIB in January 2012 to purchase up to 100,000 common shares, and up to 100,000 non-voting equity shares. When the bid expired on January 30, 2013, we had repurchased 29,100 non- voting equity shares for aggregate consideration of CAD$509,250 or CAD$17.50 per share and the shares were canceled. 

We filed an NCIB in January 2013 (“2013 NCIB”) to purchase up to 250,000 common shares. In connection with this bid, the Company established an automatic securities purchase plan (“the 2013 Plan”) for the common shares of the Company. The 2013 Plan was established to provide standard instructions regarding how High Liner Foods common shares were to be repurchased under the 2013 NCIB, and provided that High Liner Foods could repurchase its securities under the 2013 Plan on any trading day during the term of the 2013 NCIB, including during self-imposed trading blackout periods. The 2013 Plan was an annual plan and like the 2013 NCIB, also terminated on January 30, 2014. Under the 2013 Plan, the Company was also able to vary, suspend or terminate the 2013 Plan if it did not have material non-public information and the decision to vary, suspend or terminate the 2013 Plan was not taken during a self-imposed trading blackout period. The 2013 Plan constituted an “automatic plan” for purposes of applicable Canadian securities legislation and had been reviewed by the Toronto Stock Exchange (“TSX”). When the 2013 NCIB expired in January 2014, we had not purchased any shares under the bid. 

In January 2014, we filed a new NCIB (“2014 NCIB”) to purchase up to 250,000 common shares. This bid terminates on January 30, 2015. In connection with this new bid, the Company again established an automatic securities purchase plan (“2014 Plan”) for the common shares of the Company that is identical to the 2013 Plan, except that this plan will terminate on January 30, 2015, when the 2014 NCIB will also terminate. Like the 2013 Plan, the 2014 Plan constitutes an “automatic plan” for purposes of applicable Canadian Securities legislation and has been reviewed by the TSX. 

In December 2012, we redeemed all of our issued and outstanding non-voting equity shares (the “Non-Voting Shares”) in accordance with their terms. At that time, 1,758,962 Non-Voting Shares were issued and outstanding and traded on the TSX under the symbol “HLF.A”. The redemption price for each Non-Voting Share was the issuance of one common share of the Company, which trade on the TSX under the symbol “HLF”. The Non-Voting Shares were required to accommodate certain completed transactions and had no further applicability in the circumstances. This redemption simplified our capital structure as well as improved liquidity for all shareholders of the Company. 

## Dividends 

The quarterly dividend on the Company’s common and non-voting equity shares has been increased four times during the 2012 and 2013 fiscal periods, as shown in the following table. 

<img src='content_image/289225.jpg'>

The increases in the quarterly dividend per common share reflects our confidence in our growth strategy, together with significant improvements on our balance sheet and cash flow. Dividends are subject to restrictions in our credit agreements. The “Adjusted Aggregate Availability”, as defined in the credit agreement, needs to be $22.5 million or higher under the working capital facilities (actual availability on December 28, 2013 was $84.5 million). Under the Term Loan facility, after recent amendments, capital distributions, including both NCIBs and dividends, cannot exceed the greater of $15.5 million per year or the defined available amount based on excess cash flow not used for long-term debt repayments accumulated over the term of the loan. 

On February 19, 2014, the Directors approved a quarterly dividend of CAD$0.19 per share on the Company’s common shares payable on March 17, 2014 to holders of record on March 3, 2014. 

These dividends are “eligible dividends” for Canadian tax purposes. 

Our capital management practices are described at length in note 24  to our Consolidated Financial Statements. 

