Gross capital expenditures for 2011 were $7.8 million  compared with $5.3 million in the previous year. The increase is attributable primarily to higher spending on  information technology projects, including the Product Life Cycle software.  We plan 1  to invest approximately $9 million to $13 million  in capital assets in 2012. Almost $3.8 million of our capital  expenditures in 2012 are expected 1  to be for strategic  initiatives or related to the achievement of synergies on  the Acquisition and a further $1.8 million for projects that  will reduce the cost of our operations. The remainder of the  capital budget is for projects that will ensure we continue to  be in compliance with regulatory and other requirements,  and for the replacement of aging equipment. Cash generated  from operations and short-term borrowings will fund capital  additions in 2012.  The table below reconciles our Standardized Free Cash Flow  and Adjusted Free Cash Flow with measures that are in  accordance with IFRS. We discuss liquidity risk in Section 8.9 below and Note 24 in  our financial statements. Contractual obligations relating to our long-term debt, finance lease obligations, operating leases, purchase obligations, and other  long-term obligations are disclosed in the table below.  Purchase obligations are for the purchase of seafood and other non-seafood inputs, including flour, paper products and frying  oils. See Sections 8.2 and 8.5 for more details. We utilize derivative financial instruments in accordance with a written policy to manage foreign currency, commodity and  interest rate exposures. The policy prohibits the use of derivative financial instruments for trading or speculative purposes. We formally document all relationships between hedging instruments and hedged items, as well as risk management objectives  and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and  liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also formally assess, both at  the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are effective in  offsetting changes in fair values or cash flows of hedged items. There were no highly probable transactions for which hedge  accounting has been claimed that have not occurred. Any portion of hedge ineffectiveness has been recognized in the income  statement as it has occurred. The following table identifies all of the financial instruments and the value recorded at the balance sheet date. The carrying  values of held-for-trading financial assets, loans and receivables, and other financial liabilities approximate fair value due to the  short term to maturity of these financial instruments. Financial liabilities carried at amortized cost are shown at their amortized  cost using the effective interest rate method. Items accounted as hedges represent fair value of the Company’s foreign exchange  contracts as well as the fair value of its interest rate swap on its long-term debt. CLASSIFICATIOn OF FInAnCIAL InSTRuMEnTS Financial Instruments Contractual Obligations * Per Cash Flow Statement (Amounts in $000s)  Payments Due by Period  Contractual Obligations  Total Less than 1 year  2 – 3 Years  4 – 5 Years  After 5 Years Long-term debt   254,250  2,543  11,441  15,256  225,010 Finance lease obligations   3,663  1,064   1,410 1,044  145 Operating leases  6,957  2,707  3,368 882  – Purchase obligations  225,676  219,894  5,782  –  –  Total contractual obligations  490,546  226,208  22,001  17,182 225,155 24 HIGH LINER FOODS INCORPORATED Capital Expenditures (In $000s) 2011 2010 Cash flow from  operating activities*  $  3,572 $ 50,356  Less: total capital expenditures,  net of investment tax credits*  (6,952) (4,339) Standardized Free Cash Flow $ (3,380) $ 46,017  Impact of one-time unwinding of foreign exchange  contract in fiscal 2008*  –  165  Adjusted Free Cash Flow $ (3,380) $ 46,182 