ManageMent’s Discussion anD analysis Total revenues declined in fiscal 2013 as a result of the decrease in world raw sugar prices which fluctuated between U.S. 15.93 and 21.77 cents per pound compared to U.S. 18.81 and 28.35 cents per pound and U.S. 20.40 and 36.08 cents  per pound in fiscal 2012 and 2011, respectively. The increase in gross margin and results from operating activities is due to the adjustment recorded to reflect the mark-to- market gains and losses for all derivative financial instruments, partially offset by an unfavourable sales mix with higher lower  margin liquid and industrial volume and no special export quota to the U.S. The net earnings are also higher due to the same  mark-to-market adjustment and same unfavourable sales mix, net of income taxes.  Cash flow from operations was lower by $10.1 million in fiscal 2013 due to a decrease in year-over-year variation in trade  and other receivables and inventories of $12.7 million, an increase in trade and other payables variation of $3.6 million  and higher pension plan contribution of $1.0 million in fiscal 2013, partly offset by higher earnings before income taxes of  $9.5 million in fiscal 2013. The increase in cash flow from operations for fiscal 2012, when compared to fiscal 2011 was  due mainly to the lower level of inventories at year end 2012. The decrease of approximately $12.7 million in inventories  was due to the timing of the receipt of raw sugar vessels in Montreal, to the lower values of raw sugar at year-end 2012  and to the later start of the Taber beet crop harvest in September 2012. For fiscal 2011, inventories had a negative impact  of approximately $39.7 million on cash flow, resulting in a positive variance of $52.4 million for fiscal 2012 compared to 2011. This positive variance in cash flow was reduced by the payment of approximately $15.3 million in income taxes and  to lower net earnings of approximately $11.6 million. The decrease in total assets in the current fiscal year is explained by the reduction in cash balances, lower inventory levels  and lower deferred tax assets. In February 2013, the Company declared and paid an additional dividend of $33.9 million,  which reduced cash on hand. The decrease in total assets between fiscal 2012 and 2011 is due mainly to the lower level of  inventories and trade receivables at the end of the year. Non-current liabilities increased in fiscal 2013 as an amount of $50.0 million drawn under the revolving credit facility was  recorded as non-current following the negotiation of a new five-year credit agreement in June 2013. This was partially  offset by a decrease in the employee benefits obligation of $13.5 million due mostly to an actuarial gain of $10.7 million.  The decrease in non-current liabilities in fiscal 2012 is due mainly to borrowings under the revolving credit facility shown  as current as the line of credit came due in June 2013. Also, the total amount of outstanding convertible debentures  was reduced by approximately $20.0 million following the redemption of the third series convertible debentures and the  issuance of the fifth series convertible debentures in fiscal 2012. On an annual basis, a goodwill impairment calculation is performed with the aim of ensuring that the fair value of the  Company is more than its respective carrying value. There was no impairment in the fiscal 2013 analysis. In the normal course of business, the Company uses derivative financial instruments consisting of sugar futures, foreign  exchange forward contracts, natural gas futures and interest rate swaps. Lantic sells refined sugar to some clients in U.S.  dollars. These sales contracts are viewed as having an embedded derivative if the functional currency of the customer is  not U.S. dollars, the embedded derivative being the source currency of the transaction, U.S. dollars. Derivative financial  instruments and embedded derivatives are marked-to-market at each reporting date, with the unrealized gains/losses  charged to the consolidated statement of operations with a corresponding offsetting amount charged to the statement of  financial position. Rogers Sugar Inc. 14