## Revenues 

Administration fees were $55.2 million for the quarter ended December 31, 2012, an increase of 5% from $52.5 million for the same period last year and an increase of 5% from the prior quarter. Net of inter-segment amounts, administration fee revenue was $31.7 million for the quarter ended December 31, 2012, up from $30.6 million for the quarter ended December 31, 2011 and from $30.1 million in the previous quarter. The increase from the prior year was primarily attributable to an increase in assets under administration during the fourth quarter of 2012 leading to higher trailer commissions earned. 

As mentioned above, other revenues earned by the Asset Administration segment are mainly comprised of non-advisor related activities. For the quarter ended December 31, 2012, other revenues were $3.7 million, down from $3.8 million for the fourth quarter of 2011 and up from $3.6 million in the third quarter of 2012. 

## Expenses 

Investment dealer fees were $43.6 million for the quarter ended December 31, 2012, compared to $41.5 million for the fourth quarter of 2012 and $41.3 million for the quarter ended September 30, 2012. 

As detailed in Table 10, dealer gross margin was $11.6 million or 21.1% of administration fee revenue for the quarter ended December 31, 2012 compared to $11.0 million or 21.0% for the fourth quarter of 2011 and $11.3 million or 21.4% for the previous quarter. The changes in gross margin from the comparable quarters correspond to the level of payout to fi nancial advisors on their 12-month rolling administration fee revenues. 

SG&A expenses for the segment were $13.6 million for the quarter ended December 31, 2012 compared to $12.9 million in the fourth quarter of 2011 and $12.3 million in the third quarter of 2012, as the spending on marketing initiatives increased during the quarter. 

The Asset Administration segment had income before income taxes and non-segmented items of $0.5 million for the quarter ended December 31, 2012, down from $1.3 million for the fourth quarter of 2011 and from $1.4 million for the prior quarter. The decline in the fourth quarter of 2012 was due to the increase in SG&A expenses exceeding the increase in gross margin. 

## LIQUIDITY AND CAPITAL RESOURCES 

As detailed in Table 11, CI generated $548.1 million of operating cash flow in the year ended December 31, 2012 down $26.6 million from $574.7 million in 2011. CI measures its operating cash flow before the change in working capital and the actual cash amount paid for interest and income taxes, as these items often distort the cash flow generated during the period. Working capital is affected by seasonality, interest is primarily paid semi-annually, and tax instalments paid may differ materially from the cash tax accrual. CI’s main uses of capital are the financing of deferred sales commissions, the payment of dividends on its shares, the funding of capital expenditures and the repurchase of shares through its normal course issuer bid program. At current levels of cash flow and anticipated dividend payout rates, CI produces suffi cient cash to meet its obligations and pay down debt. 

