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ROGERS COMMUNICATIONS INC.
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By:
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/s/ Anthony Staffieri
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Name: Anthony Staffieri
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Title: Chief Financial Officer
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Exhibit Number
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Description of Document
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99.1
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Management's Discussion and Analysis of Rogers Communications Inc. for the first quarter ended March 31, 2018
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99.2
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Interim Condensed Consolidated Financial Statements of Rogers Communications Inc. for the first quarter ended March 31, 2018
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99.3
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Earnings Release of Rogers Communications Inc. for the first quarter ended March 31, 2018
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Segment
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Principal activities
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Wireless
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Wireless telecommunications operations for Canadian consumers and businesses.
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Cable
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Cable telecommunications operations, including Internet, television, and telephony (phone) services for Canadian consumers and businesses, and network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector, and carrier wholesale markets.
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Media
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A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, digital media, and publishing.
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Rogers Communications Inc.
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1
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First Quarter 2018
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Operational Highlights
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Regulatory Developments
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Summary of Consolidated Financial Results
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Updates to Risks and Uncertainties
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Results of our Reportable Segments
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Critical Accounting Policies and Estimates
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Review of Consolidated Performance
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Financial Guidance
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Managing our Liquidity and Financial Resources
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Overview of Financial Position
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Financial Condition
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Financial Risk Management
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Commitments and Contractual Obligations
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Rogers Communications Inc.
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2
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First Quarter 2018
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Rogers Communications Inc.
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3
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First Quarter 2018
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Rogers Communications Inc.
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4
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First Quarter 2018
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Three months ended March 31
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Three months ended March 31
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||||||||||||
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With adoption of IFRS 15
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Prior Accounting Basis
2
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||||||||||||||
(In millions of dollars, except margins and per share amounts)
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2018
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2017 (restated)
1
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% Chg
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2018
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2017
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% Chg
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||||||||||
Revenue
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||||||||||
Wireless
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2,191
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2,002
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9
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2,098
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1,968
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7
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||||
Cable
3
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969
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960
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1
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969
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960
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1
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||||
Media
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532
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474
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12
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532
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474
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12
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Corporate items and intercompany eliminations
3
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(59
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)
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(64
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)
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(8
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)
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(59
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)
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(64
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)
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(8
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)
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Revenue
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3,633
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3,372
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8
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3,540
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3,338
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6
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Total service revenue
4
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3,127
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2,969
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5
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3,410
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3,214
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6
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Adjusted EBITDA
5
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Wireless
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934
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829
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13
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877
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808
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9
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Cable
3
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433
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416
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4
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433
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416
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4
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Media
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23
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(30
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)
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177
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23
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(30
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)
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177
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Corporate items and intercompany eliminations
3
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(52
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)
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(41
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)
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27
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(52
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)
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(41
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)
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27
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Adjusted EBITDA
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1,338
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1,174
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14
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1,281
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1,153
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11
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Adjusted EBITDA margin
5
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36.8
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%
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34.8
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%
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2.0
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pts
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36.2
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%
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34.5
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%
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1.7
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pts
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Net income
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425
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|
310
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37
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383
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294
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30
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Basic earnings per share
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$0.83
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$0.60
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38
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$0.74
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$0.57
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30
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Diluted earnings per share
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$0.80
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$0.60
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33
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$0.72
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$0.57
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26
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Adjusted net income
5
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477
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330
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45
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435
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314
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39
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Adjusted basic earnings per share
5
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$0.93
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$0.64
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45
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$0.84
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$0.61
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38
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Adjusted diluted earnings per share
5
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$0.90
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$0.64
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41
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$0.82
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$0.61
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34
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Capital expenditures
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605
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486
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24
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605
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486
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24
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Cash provided by operating activities
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885
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596
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48
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885
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596
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48
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Free cash flow
5
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384
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325
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18
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384
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325
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18
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1
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2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
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2
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Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
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3
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These figures have been retrospectively amended as a result of our reportable segment realignment. See "Reportable Segments".
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4
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As defined. See "Key Performance Indicators".
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5
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Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See
"Non-GAAP Measures" for information about these measures, including how we calculate them.
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Rogers Communications Inc.
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5
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First Quarter 2018
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Three months ended March 31
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Three months ended March 31
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||||||||
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With adoption of IFRS 15
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Prior Accounting Basis
2
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||||||||||
(In millions of dollars, except margins)
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2018
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2017 (restated)
1
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% Chg
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2018
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2017
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% Chg
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Revenue
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Service revenue
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1,687
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1,604
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5
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1,970
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1,849
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7
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Equipment revenue
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504
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|
398
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27
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128
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|
119
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8
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Revenue
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2,191
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|
2,002
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|
9
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2,098
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1,968
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7
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Operating expenses
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|
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Cost of equipment
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561
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447
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26
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550
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|
456
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21
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Other operating expenses
3
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696
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726
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(4
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)
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|
671
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|
704
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(5
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)
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Operating expenses
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1,257
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|
1,173
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7
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1,221
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1,160
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5
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Adjusted EBITDA
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934
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|
829
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13
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877
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|
808
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9
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|
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Adjusted EBITDA margin
4
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42.6
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%
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41.4
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%
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1.2
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pts
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44.5
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%
|
43.7
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%
|
0.8
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pts
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Capital expenditures
|
260
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|
160
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|
63
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|
|
260
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|
160
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|
63
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|
1
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2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
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Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
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3
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Other operating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
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4
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Adjusted EBITDA margin under IFRS 15 is calculated using total Wireless revenue. Under the prior accounting basis, adjusted EBITDA margin is calculated using Wireless service revenue.
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Three months ended March 31
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|
|
Three months ended March 31
|
|
|||||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
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|||||||||||||
(In thousands, except churn, blended ABPU, and blended ARPU)
|
2018
|
|
2017
|
|
Chg
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2018
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|
2017
|
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Chg
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|||
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|||||||||
Postpaid
|
|
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Gross additions
|
377
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|
343
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|
34
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|
377
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|
343
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|
34
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Net additions
|
95
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|
60
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|
35
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|
95
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|
60
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|
35
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Total postpaid subscribers
3
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8,799
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|
8,617
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|
182
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8,799
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|
8,617
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|
182
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|
|||
Churn (monthly)
|
1.08
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%
|
1.10
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%
|
(0.02
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pts)
|
|
1.08
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%
|
1.10
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%
|
(0.02
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pts)
|
|||
Prepaid
|
|
|
|
|
|
|
|
|
||||||||
Gross additions
|
163
|
|
150
|
|
13
|
|
|
163
|
|
150
|
|
13
|
|
|||
Net losses
|
(60
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)
|
(42
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)
|
(18
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)
|
|
(60
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)
|
(42
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)
|
(18
|
)
|
|||
Total prepaid subscribers
3
|
1,718
|
|
1,675
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|
43
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|
|
1,718
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|
1,675
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|
43
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|
|||
Churn (monthly)
|
4.24
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%
|
3.74
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%
|
0.50
|
pts
|
|
4.24
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%
|
3.74
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%
|
0.50
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pts
|
|||
Blended ABPU (monthly)
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$62.67
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$59.96
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$2.71
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n/a
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n/a
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|
n/a
|
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Blended ARPU (monthly)
4
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|
$53.68
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|
$52.03
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|
$1.65
|
|
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|
$62.67
|
|
|
$59.96
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|
$2.71
|
|
1
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Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. Effective January 1, 2018, in conjunction with our transition to IFRS 15, we commenced reporting blended ABPU as a new key performance indicator. See "Key Performance Indicators".
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2
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Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
As at the end of period.
|
4
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Blended ARPU calculated under "With adoption of IFRS 15" has been restated for 2017 using revenue recognition policies in accordance with IFRS 15.
|
Rogers Communications Inc.
|
6
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First Quarter 2018
|
•
|
higher blended ARPU, primarily as a result of the increased mix of subscribers on higher-rate plans from our various brands
; and
|
•
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larger postpaid and prepaid subscriber bases.
|
•
|
higher postpaid gross additions; and
|
•
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an increase in device upgrades by existing subscribers.
|
•
|
a continued shift in the product mix of device sales towards higher-cost smartphones;
|
•
|
the increase in device upgrades by existing subscribers as discussed above; and
|
•
|
higher postpaid gross additions.
|
Rogers Communications Inc.
|
7
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2018
|
|
2017
(restated)
1
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
|
|
|
|||
Internet
|
506
|
|
474
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|
7
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|
Television
|
365
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|
375
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|
(3
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)
|
Phone
|
96
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|
106
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|
(9
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)
|
Service revenue
|
967
|
|
955
|
|
1
|
|
Equipment revenue
|
2
|
|
5
|
|
(60
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)
|
Revenue
|
969
|
|
960
|
|
1
|
|
|
|
|
|
|||
Operating expenses
|
|
|
|
|||
Cost of equipment
|
5
|
|
4
|
|
25
|
|
Other operating expenses
2
|
531
|
|
540
|
|
(2
|
)
|
Operating expenses
|
536
|
|
544
|
|
(1
|
)
|
|
|
|
|
|||
Adjusted EBITDA
|
433
|
|
416
|
|
4
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
44.7
|
%
|
43.3
|
%
|
1.4
|
pts
|
Capital expenditures
|
297
|
|
266
|
|
12
|
|
1
|
Effective January 1, 2018 and on a retrospective basis, we realigned our reportable segments and related financial results. See "Reportable Segments".
|
2
|
Other operating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
|
Three months ended March 31
|
|
||||
(In thousands)
|
2018
|
|
2017
(restated)
|
|
Chg
|
|
|
|
|
|
|||
Internet
2
|
|
|
|
|||
Net additions
|
26
|
|
33
|
|
(7
|
)
|
Total Internet subscribers
3
|
2,347
|
|
2,259
|
|
88
|
|
Television
|
|
|
|
|||
Net losses
|
(12
|
)
|
(24
|
)
|
12
|
|
Total Television subscribers
3
|
1,728
|
|
1,796
|
|
(68
|
)
|
Phone
|
|
|
|
|||
Net additions
|
9
|
|
2
|
|
7
|
|
Total Phone subscribers
3
|
1,117
|
|
1,096
|
|
21
|
|
|
|
|
|
|||
Homes passed
3
|
4,327
|
|
4,255
|
|
72
|
|
Total service units
4
|
|
|
|
|||
Net additions
|
23
|
|
11
|
|
12
|
|
Total service units
3
|
5,192
|
|
5,151
|
|
41
|
|
1
|
Subscriber counts are key performance indicators. See "Key Performance Indicators".
|
2
|
Effective January 1, 2018, and on a retrospective basis, our Internet subscriber results include Smart Home Monitoring subscribers.
|
3
|
As at end of period.
|
4
|
Includes Internet, Television, and Phone.
|
•
|
the movement of Internet customers to higher speed and usage tiers;
|
•
|
the impact of service pricing changes; and
|
•
|
a larger Internet subscriber base; partially offset by
|
•
|
a lower subscriber base for our Television products.
|
Rogers Communications Inc.
|
8
|
First Quarter 2018
|
•
|
general movement of customers to higher speed and usage tiers of our Internet offerings, with
56%
of our residential Internet base on plans of 100 megabits per second or higher (
2017
-
48%
);
|
•
|
a larger Internet subscriber base; and
|
•
|
the impact of Internet service pricing changes; partially offset by
|
•
|
promotional pricing provided to subscribers.
|
•
|
the decline in Television subscribers over the past year; partially offset by
|
•
|
the impact of Television service pricing changes, net of promotional pricing provided to subscribers.
|
•
|
relative shifts in product mix to higher-margin Internet offerings from conventional Television broadcasting; and
|
•
|
various cost efficiencies and productivity initiatives.
|
Rogers Communications Inc.
|
9
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
532
|
|
474
|
|
12
|
|
Operating expenses
1
|
509
|
|
504
|
|
1
|
|
|
|
|
|
|
||
Adjusted EBITDA
|
23
|
|
(30
|
)
|
177
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
4.3
|
%
|
(6.3
|
)%
|
10.6
|
pts
|
Capital expenditures
|
15
|
|
13
|
|
15
|
|
1
|
O
perating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
•
|
a higher distribution to the Toronto Blue Jays from Major League Baseball and the earlier start to the regular season this year; and
|
•
|
higher Sportsnet subscription revenue.
|
•
|
higher Toronto Blue Jays costs, driven by the earlier start to the regular season this year; and
|
•
|
higher programming costs
.
|
Rogers Communications Inc.
|
10
|
First Quarter 2018
|
|
Three months ended March 31
|
||||
(In millions of dollars, except capital intensity)
|
2018
|
|
2017
(restated)
1
|
|
% Chg
|
|
|
|
|
||
Capital expenditures
2
|
|
|
|
||
Wireless
|
260
|
|
160
|
|
63
|
Cable
|
297
|
|
266
|
|
12
|
Media
|
15
|
|
13
|
|
15
|
Corporate
|
48
|
|
47
|
|
2
|
|
|
|
|
||
Capital expenditures before proceeds on disposition
|
620
|
|
486
|
|
28
|
Proceeds on disposition
|
(15
|
)
|
—
|
|
n/m
|
|
|
|
|
|
|
Capital expenditures
2
|
605
|
|
486
|
|
24
|
|
|
|
|
|
|
Capital intensity
3
|
16.7
|
%
|
14.4
|
%
|
2.3
|
1
|
Effective January 1, 2018 and on a retrospective basis, we realigned our reportable segments and related financial results. As a result, certain figures have been amended for comparative purposes. See "Reportable Segments".
|
2
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences.
|
3
|
As defined. See "Key Performance Indicators".
|
Rogers Communications Inc.
|
11
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||
(In millions of dollars)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
3
|
1,338
|
|
1,174
|
|
14
|
|
|
1,281
|
|
1,153
|
|
11
|
|
Deduct (add):
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
544
|
|
545
|
|
—
|
|
|
544
|
|
545
|
|
—
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
n/m
|
|
|
(11
|
)
|
—
|
|
n/m
|
|
Restructuring, acquisition and other
|
43
|
|
28
|
|
54
|
|
|
43
|
|
28
|
|
54
|
|
Finance costs
|
219
|
|
190
|
|
15
|
|
|
219
|
|
190
|
|
15
|
|
Other income
|
(23
|
)
|
(11
|
)
|
109
|
|
|
(23
|
)
|
(11
|
)
|
109
|
|
Income tax expense
|
141
|
|
112
|
|
26
|
|
|
126
|
|
107
|
|
18
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
425
|
|
310
|
|
37
|
|
|
383
|
|
294
|
|
30
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
Adjusted EBITDA is a non-GAAP measure and should not be considered a substitute or alternative for GAAP measures. It is not a defined term under IFRS and does not have a standard meaning, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures"
for information about this measure, including how we calculate it.
|
|
Three months ended March 31
|
|
||||
(In millions of dollars)
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|||
Depreciation
|
530
|
|
532
|
|
—
|
|
Amortization
|
14
|
|
13
|
|
8
|
|
|
|
|
|
|||
Total depreciation and amortization
|
544
|
|
545
|
|
—
|
|
|
Three months ended March 31
|
|
||||
(In millions of dollars)
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|||
Interest on borrowings
1
|
187
|
|
186
|
|
1
|
|
Interest on post-employment benefits liability
|
2
|
|
3
|
|
(33
|
)
|
Loss on repayment of long-term debt
|
28
|
|
—
|
|
n/m
|
|
Loss (gain) on foreign exchange
|
8
|
|
(8
|
)
|
(200
|
)
|
Change in fair value of derivative instruments
|
(5
|
)
|
8
|
|
(163
|
)
|
Capitalized interest
|
(5
|
)
|
(4
|
)
|
25
|
|
Other
|
4
|
|
5
|
|
(20
|
)
|
|
|
|
|
|||
Total finance costs
|
219
|
|
190
|
|
15
|
|
1
|
Interest on borrowings includes interest on short-term borrowings and on long-term debt.
|
Rogers Communications Inc.
|
12
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars, except tax rates)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Statutory income tax rate
|
26.7
|
%
|
26.7
|
%
|
|
26.7
|
%
|
26.7
|
%
|
Income before income tax expense
|
566
|
|
422
|
|
|
509
|
|
401
|
|
Computed income tax expense
|
151
|
|
112
|
|
|
136
|
|
107
|
|
Increase (decrease) in income tax expense resulting from:
|
|
|
|
|
|
||||
Non-(taxable) deductible stock-based compensation
|
(2
|
)
|
5
|
|
|
(2
|
)
|
5
|
|
Non-taxable portion of capital gains
|
(6
|
)
|
(3
|
)
|
|
(6
|
)
|
(3
|
)
|
Other items
|
(2
|
)
|
(2
|
)
|
|
(2
|
)
|
(2
|
)
|
|
|
|
|
|
|
||||
Total income tax expense
|
141
|
|
112
|
|
|
126
|
|
107
|
|
|
|
|
|
|
|
||||
Effective income tax rate
|
24.9
|
%
|
26.7
|
%
|
|
24.8
|
%
|
26.7
|
%
|
Cash income taxes paid
|
110
|
|
160
|
|
|
110
|
|
160
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
|
Three months ended March 31
|
|
Three months ended March 31
|
||||||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||||
(In millions of dollars, except per share amounts)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
2018
|
|
2017
|
|
% Chg
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
425
|
|
310
|
|
37
|
|
383
|
|
294
|
|
30
|
||||
Basic earnings per share
|
|
$0.83
|
|
|
$0.60
|
|
38
|
|
|
$0.74
|
|
|
$0.57
|
|
30
|
Diluted earnings per share
|
|
$0.80
|
|
|
$0.60
|
|
33
|
|
|
$0.72
|
|
|
$0.57
|
|
26
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
Rogers Communications Inc.
|
13
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||||||
(In millions of dollars, except per share amounts)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
|
2018
|
|
2017
|
|
% Chg
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
3
|
1,338
|
|
1,174
|
|
14
|
|
|
1,281
|
|
1,153
|
|
11
|
|
||||
Deduct:
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization
|
544
|
|
545
|
|
—
|
|
|
544
|
|
545
|
|
—
|
|
||||
Finance costs
4
|
191
|
|
190
|
|
1
|
|
|
191
|
|
190
|
|
1
|
|
||||
Other income
|
(23
|
)
|
(11
|
)
|
109
|
|
|
(23
|
)
|
(11
|
)
|
109
|
|
||||
Income tax expense
5
|
149
|
|
120
|
|
24
|
|
|
134
|
|
115
|
|
17
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted net income
3
|
477
|
|
330
|
|
45
|
|
|
435
|
|
314
|
|
39
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted basic earnings per share
3
|
|
$0.93
|
|
|
$0.64
|
|
45
|
|
|
|
$0.84
|
|
|
$0.61
|
|
38
|
|
Adjusted diluted earnings per share
3
|
|
$0.90
|
|
|
$0.64
|
|
41
|
|
|
|
$0.82
|
|
|
$0.61
|
|
34
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
Adjusted EBITDA, adjusted net income, and adjusted basic and diluted earnings per share are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures"
for information about these measures, including how we calculate them.
|
4
|
Finance costs exclude a
$28 million
loss on repayment of long-term debt for the
three months ended
March 31, 2018
(
2017
-
nil
).
|
5
|
Income tax expense excludes an
$8 million
recovery (
2017
-
$8 million
recovery) related to the income tax impact for adjusted items for the
three months ended
March 31, 2018
.
|
Rogers Communications Inc.
|
14
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
1,254
|
|
1,169
|
|
|
1,264
|
|
1,172
|
|
Change in non-cash operating working capital items
|
(21
|
)
|
(175
|
)
|
|
(31
|
)
|
(178
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
1,233
|
|
994
|
|
|
1,233
|
|
994
|
|
Income taxes paid
|
(110
|
)
|
(160
|
)
|
|
(110
|
)
|
(160
|
)
|
Interest paid
|
(238
|
)
|
(238
|
)
|
|
(238
|
)
|
(238
|
)
|
|
|
|
|
|
|
||||
Cash provided by operating activities
|
885
|
|
596
|
|
|
885
|
|
596
|
|
|
|
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|
||||
Capital expenditures
|
(605
|
)
|
(486
|
)
|
|
(605
|
)
|
(486
|
)
|
Additions to program rights
|
(6
|
)
|
(14
|
)
|
|
(6
|
)
|
(14
|
)
|
Changes in non-cash working capital related to property, plant and equipment and intangible assets
|
(138
|
)
|
(81
|
)
|
|
(138
|
)
|
(81
|
)
|
Other
|
10
|
|
(26
|
)
|
|
10
|
|
(26
|
)
|
|
|
|
|
|
|
||||
Cash used in investing activities
|
(739
|
)
|
(607
|
)
|
|
(739
|
)
|
(607
|
)
|
|
|
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|
||||
Net (repayment of) proceeds received on short-term borrowings
|
(848
|
)
|
336
|
|
|
(848
|
)
|
336
|
|
Net issuance (repayment) of long-term debt
|
938
|
|
(53
|
)
|
|
938
|
|
(53
|
)
|
Net payments on settlement of debt derivatives and forward contracts
|
(16
|
)
|
(3
|
)
|
|
(16
|
)
|
(3
|
)
|
Transaction costs incurred
|
(16
|
)
|
—
|
|
|
(16
|
)
|
—
|
|
Dividends paid
|
(247
|
)
|
(247
|
)
|
|
(247
|
)
|
(247
|
)
|
|
|
|
|
|
|
||||
Cash (used in) provided by financing activities
|
(189
|
)
|
33
|
|
|
(189
|
)
|
33
|
|
|
|
|
|
|
|
||||
Change in cash and cash equivalents
|
(43
|
)
|
22
|
|
|
(43
|
)
|
22
|
|
Bank advances, beginning of period
|
(6
|
)
|
(71
|
)
|
|
(6
|
)
|
(71
|
)
|
|
|
|
|
|
|
||||
Bank advances, end of period
|
(49
|
)
|
(49
|
)
|
|
(49
|
)
|
(49
|
)
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
Rogers Communications Inc.
|
15
|
First Quarter 2018
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
97
|
|
935
|
|
|
|
|
||
Total short-term borrowings
|
747
|
|
1,585
|
|
|
|
Three months ended March 31, 2018
|
|
|
|
Three months ended March 31, 2017
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from US commercial paper
|
2,220
|
|
1.26
|
|
2,794
|
|
|
200
|
|
1.33
|
|
266
|
|
Repayment of US commercial paper
|
(2,894
|
)
|
1.26
|
|
(3,642
|
)
|
|
—
|
|
—
|
|
—
|
|
Net (repayment of) proceeds received from US commercial paper
|
(674
|
)
|
1.26
|
|
(848
|
)
|
|
200
|
|
1.33
|
|
266
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
250
|
|
||||
Repayment of accounts receivable securitization
|
|
|
—
|
|
|
|
|
(180
|
)
|
||||
Net proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
70
|
|
||||
|
|
|
|
|
|
|
|
||||||
Net (repayment of) proceeds received on short-term borrowings
|
|
|
(848
|
)
|
|
|
|
336
|
|
Rogers Communications Inc.
|
16
|
First Quarter 2018
|
|
Three months ended March 31, 2018
|
|
|
Three months ended March 31, 2017
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit facility borrowings (Cdn$)
|
|
|
—
|
|
|
|
|
700
|
|
||||
Credit facility borrowings (US$)
|
—
|
|
—
|
|
—
|
|
|
425
|
|
1.34
|
|
571
|
|
Total credit facility borrowings
|
|
|
—
|
|
|
|
|
1,271
|
|
||||
|
|
|
|
|
|
|
|
||||||
Credit facility repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(575
|
)
|
||||
Credit facility repayments (US$)
|
—
|
|
—
|
|
—
|
|
|
(375
|
)
|
1.33
|
|
(499
|
)
|
Total credit facility repayments
|
|
|
—
|
|
|
|
|
(1,074
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net borrowings under credit facilities
|
|
|
—
|
|
|
|
|
197
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note issuances (US$)
|
750
|
|
1.25
|
|
938
|
|
|
—
|
|
—
|
|
—
|
|
Total senior note issuances
|
|
|
938
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Total senior note repayments
|
|
|
—
|
|
|
|
|
(250
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of senior notes
|
|
|
938
|
|
|
|
|
(250
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of long-term debt
|
|
|
938
|
|
|
|
|
(53
|
)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Long-term debt net of transaction costs, beginning of period
|
14,448
|
|
16,080
|
|
Net issuance (repayment) of long-term debt
|
938
|
|
(53
|
)
|
Loss (gain) on foreign exchange
|
263
|
|
(93
|
)
|
Deferred transaction costs incurred
|
(16
|
)
|
(3
|
)
|
Amortization of deferred transaction costs
|
4
|
|
3
|
|
|
|
|
||
Long-term debt net of transaction costs, end of period
|
15,637
|
|
15,934
|
|
Rogers Communications Inc.
|
17
|
First Quarter 2018
|
Declaration date
|
Record date
|
Payment date
|
Dividend per
share (dollars)
|
|
Dividends paid
(in millions of dollars)
|
|
|
|
|
|
|
||
January 24, 2018
|
March 12, 2018
|
April 3, 2018
|
0.48
|
|
247
|
|
|
|
|
|
|
||
January 26, 2017
|
March 13, 2017
|
April 3, 2017
|
0.48
|
|
247
|
|
April 18, 2017
|
June 12, 2017
|
July 4, 2017
|
0.48
|
|
247
|
|
August 17, 2017
|
September 15, 2017
|
October 3, 2017
|
0.48
|
|
247
|
|
October 19, 2017
|
December 11, 2017
|
January 2, 2018
|
0.48
|
|
247
|
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||
(In millions of dollars)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
3
|
1,338
|
|
1,174
|
|
14
|
|
|
1,281
|
|
1,153
|
|
11
|
|
Deduct:
|
|
|
|
|
|
|
|
||||||
Capital expenditures
4
|
605
|
|
486
|
|
24
|
|
|
605
|
|
486
|
|
24
|
|
Interest on borrowings, net of capitalized interest
|
182
|
|
182
|
|
—
|
|
|
182
|
|
182
|
|
—
|
|
Net change in contract asset and deferred commission cost asset balances
|
57
|
|
21
|
|
171
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
Cash income taxes
5
|
110
|
|
160
|
|
(31
|
)
|
|
110
|
|
160
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Free cash flow
3
|
384
|
|
325
|
|
18
|
|
|
384
|
|
325
|
|
18
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
Adjusted EBITDA and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See
"Non-GAAP Measures" for information about these measures, including how we calculate them.
|
4
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences.
|
5
|
Cash income taxes are net of refunds received.
|
Rogers Communications Inc.
|
18
|
First Quarter 2018
|
|
As at
|
As at
|
|
|
|
||||
|
March 31
|
December 31
|
|
|
|
||||
(In millions of dollars)
|
2018
|
2017 (restated)
1
|
$ Chg
|
|
% Chg
|
|
Explanation of significant changes
|
||
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||||
Accounts receivable
|
1,900
|
|
2,035
|
|
(135
|
)
|
(7
|
)
|
Primarily reflects a decrease in trade receivables due to seasonality.
|
Inventories
|
356
|
|
435
|
|
(79
|
)
|
(18
|
)
|
Reflects a decrease in Wireless handset inventory.
|
Current portion of contract assets
|
861
|
|
820
|
|
41
|
|
5
|
|
Primarily reflects net increase in contracts with customers, partially offset by amortization to accounts receivable.
|
Other current assets
|
435
|
|
414
|
|
21
|
|
5
|
|
n/m
|
Current portion of derivative instruments
|
442
|
|
421
|
|
21
|
|
5
|
|
n/m
|
Total current assets
|
3,994
|
|
4,125
|
|
(131
|
)
|
(3
|
)
|
|
|
|
|
|
|
|
||||
Property, plant and equipment
|
11,227
|
|
11,143
|
|
84
|
|
1
|
|
Primarily reflects capital expenditures, partially offset by depreciation expense. See "Capital Expenditures".
|
Intangible assets
|
7,222
|
|
7,244
|
|
(22
|
)
|
—
|
|
Reflects amortization of intangible assets.
|
Investments
|
2,277
|
|
2,561
|
|
(284
|
)
|
(11
|
)
|
Primarily reflects fair value decreases for certain publicly traded investments.
|
Derivative instruments
|
972
|
|
953
|
|
19
|
|
2
|
|
n/m
|
Contract assets
|
441
|
|
413
|
|
28
|
|
7
|
|
Reflects net increases in contracts with customers.
|
Other long-term assets
|
135
|
|
143
|
|
(8
|
)
|
(6
|
)
|
n/m
|
Deferred tax assets
|
3
|
|
3
|
|
—
|
|
—
|
|
n/m
|
Goodwill
|
3,905
|
|
3,905
|
|
—
|
|
—
|
|
n/m
|
|
|
|
|
|
|
||||
Total assets
|
30,176
|
|
30,490
|
|
(314
|
)
|
(1
|
)
|
|
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
||||
Bank advances
|
49
|
|
6
|
|
43
|
|
n/m
|
|
See "Managing our Liquidity and Financial Resources".
|
Short-term borrowings
|
747
|
|
1,585
|
|
(838
|
)
|
(53
|
)
|
Reflects a decrease in borrowings under our US CP program.
|
Accounts payable and accrued liabilities
|
2,516
|
|
2,931
|
|
(415
|
)
|
(14
|
)
|
Primarily reflects a decrease in trade payables as a result of business seasonality.
|
Income tax payable
|
147
|
|
62
|
|
85
|
|
137
|
|
Reflects the excess of income tax payable recorded in 2018 over tax installments paid.
|
Other current liabilities
|
110
|
|
132
|
|
(22
|
)
|
(17
|
)
|
n/m
|
Current portion of contract liabilities
|
329
|
|
278
|
|
51
|
|
18
|
|
Primarily reflects higher customer deposits at the Toronto Blue Jays.
|
Current portion of long-term debt
|
2,205
|
|
1,756
|
|
449
|
|
26
|
|
Reflects the reclassification to current of our $400 million senior notes due March 2019.
|
Current portion of derivative instruments
|
85
|
|
133
|
|
(48
|
)
|
(36
|
)
|
Primarily reflects changes in market values of our expenditure derivatives as a result of the appreciation of the Cdn$ relative to the US$. See "Financial Risk Management".
|
Total current liabilities
|
6,188
|
|
6,883
|
|
(695
|
)
|
(10
|
)
|
|
|
|
|
|
|
|
||||
Provisions
|
36
|
|
35
|
|
1
|
|
3
|
|
n/m
|
Long-term debt
|
13,432
|
|
12,692
|
|
740
|
|
6
|
|
Primarily reflects the issuance of US$750 million of senior notes in February 2018, partially offset by the reclassification to current of our $400 million senior notes due March 2019. See "Financial Risk Management".
|
Derivative instruments
|
136
|
|
147
|
|
(11
|
)
|
(7
|
)
|
n/m
|
Other long-term liabilities
|
599
|
|
613
|
|
(14
|
)
|
(2
|
)
|
n/m
|
Deferred tax liabilities
|
2,517
|
|
2,624
|
|
(107
|
)
|
(4
|
)
|
Primarily reflects a decrease in temporary differences between the accounting and tax bases for certain assets and liabilities.
|
Total liabilities
|
22,908
|
|
22,994
|
|
(86
|
)
|
—
|
|
|
|
|
|
|
|
|
||||
Shareholders' equity
|
7,268
|
|
7,496
|
|
(228
|
)
|
(3
|
)
|
Reflects changes in retained earnings and equity reserves.
|
|
|
|
|
|
|
||||
Total liabilities and shareholders' equity
|
30,176
|
|
30,490
|
|
(314
|
)
|
(1
|
)
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
Rogers Communications Inc.
|
19
|
First Quarter 2018
|
As at March 31, 2018
|
Total available
|
|
Drawn
|
|
Letters of credit
|
|
US CP program
|
|
Net available
|
|
(In millions of dollars)
|
||||||||||
|
|
|
|
|
|
|||||
Bank credit facilities:
|
|
|
|
|
|
|||||
Revolving
|
3,200
|
|
—
|
|
10
|
|
97
|
|
3,093
|
|
Outstanding letters of credit
|
104
|
|
—
|
|
104
|
|
—
|
|
—
|
|
Bank advances
|
—
|
|
49
|
|
—
|
|
—
|
|
(49
|
)
|
Total bank credit facilities
|
3,304
|
|
49
|
|
114
|
|
97
|
|
3,044
|
|
Accounts receivable securitization
|
1,050
|
|
650
|
|
—
|
|
—
|
|
400
|
|
|
|
|
|
|
|
|
||||
Total
|
4,354
|
|
699
|
|
114
|
|
97
|
|
3,444
|
|
As at December 31, 2017
|
Total available
|
|
Drawn
|
|
Letters of credit
|
|
US CP Program
|
|
Net available
|
|
(In millions of dollars)
|
||||||||||
|
|
|
|
|
|
|||||
Bank credit facilities:
|
|
|
|
|
|
|||||
Revolving
|
3,200
|
|
—
|
|
9
|
|
935
|
|
2,256
|
|
Outstanding letters of credit
|
87
|
|
—
|
|
87
|
|
—
|
|
—
|
|
Bank advances
|
—
|
|
6
|
|
—
|
|
—
|
|
(6
|
)
|
Total bank credit facilities
|
3,287
|
|
6
|
|
96
|
|
935
|
|
2,250
|
|
Accounts receivable securitization
|
1,050
|
|
650
|
|
—
|
|
—
|
|
400
|
|
|
|
|
|
|
|
|||||
Total
|
4,337
|
|
656
|
|
96
|
|
935
|
|
2,650
|
|
Issuance
|
Standard & Poor’s
|
Moody’s
|
Fitch
|
Corporate credit issuer default rating
1
|
BBB+ with a stable outlook
|
Baa1 with a stable outlook
|
BBB+ with a stable outlook
|
Senior unsecured debt
1
|
BBB+ with a stable outlook
|
Baa1 with a stable outlook
|
BBB+ with a stable outlook
|
US commercial paper
1
|
A-2
|
P-2
|
N/A
2
|
1
|
Unchanged in the quarter.
|
2
|
We did not seek a rating from Fitch for our short-term obligations in 2018.
|
Rogers Communications Inc.
|
20
|
First Quarter 2018
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2018
|
|
2017
(restated)
|
|
|
|
|
||
Long-term debt
1
|
15,757
|
|
14,555
|
|
Net debt derivative assets valued without any adjustment for credit risk
2
|
(1,219
|
)
|
(1,146
|
)
|
Short-term borrowings
|
747
|
|
1,585
|
|
Bank advances
|
49
|
|
6
|
|
|
|
|
||
Adjusted net debt
3
|
15,334
|
|
15,000
|
|
Divided by: trailing 12-month adjusted EBITDA
3
|
5,666
|
|
5,502
|
|
|
|
|
||
Debt leverage ratio
3
|
2.7
|
|
2.7
|
|
1
|
Includes current and long-term portion of long-term debt before deferred transaction costs and discounts. See "Reconciliation of adjusted net debt" in "Non-GAAP Measures" for the calculation of this amount.
|
2
|
For purposes of calculating adjusted net debt and debt leverage ratio, we believe including debt derivatives valued without adjustment for credit risk is commonly used to evaluate debt leverage and for market valuation and transactional purposes.
|
3
|
Adjusted net debt, adjusted EBITDA, and debt leverage ratio are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
|
As at
March 31 |
|
As at
December 31
|
|
|
2018
|
|
2017
|
|
|
|
|
||
Common shares outstanding
1
|
|
|
||
Class A Voting
|
112,407,192
|
|
112,407,192
|
|
Class B Non-Voting
|
402,405,483
|
|
402,403,433
|
|
|
|
|
||
Total common shares
|
514,812,675
|
|
514,810,625
|
|
|
|
|
||
Options to purchase Class B Non-Voting Shares
|
|
|
||
Outstanding options
|
3,372,135
|
|
2,637,890
|
|
Outstanding options exercisable
|
1,514,210
|
|
924,562
|
|
1
|
Holders
of our Class B Non-Voting Shares are entitled to receive notice of and to attend shareholder meetings; however, they are not entitled to vote at these meetings except as required by law or stipulated by stock exchanges. If an offer is made to purchase outstanding Class A Shares, there is no requirement under applicable law or our constating documents that an offer be made for the outstanding Class B Non-Voting Shares, and there is no other protection available to shareholders under our constating documents. If an offer is made to purchase both classes of shares, the offer for the Class A Shares may be made on different terms than the offer to the holders of Class B Non-Voting Shares.
|
Rogers Communications Inc.
|
21
|
First Quarter 2018
|
|
|
Three months ended March 31, 2018
|
|
|||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Commercial paper program
|
|
|
|
|||
Debt derivatives entered
|
2,220
|
|
1.26
|
|
2,794
|
|
Debt derivatives settled
|
2,890
|
|
1.26
|
|
3,653
|
|
Net cash paid
|
|
|
(16
|
)
|
|
|
Three months ended March 31, 2017
|
|
|||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Credit facilities
|
|
|
|
|||
Debt derivatives entered
|
875
|
|
1.33
|
|
1,165
|
|
Debt derivatives settled
|
825
|
|
1.32
|
|
1,092
|
|
Net cash paid
|
|
|
(3
|
)
|
||
|
|
|
|
|||
Commercial paper program
|
|
|
|
|||
Debt derivatives entered
|
200
|
|
1.33
|
|
266
|
|
Rogers Communications Inc.
|
22
|
First Quarter 2018
|
|
Three months ended March 31, 2018
|
|
||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Expenditure derivatives entered
|
600
|
|
1.23
|
|
740
|
|
Expenditure derivatives settled
|
210
|
|
1.30
|
|
273
|
|
|
Three months ended March 31, 2017
|
|
||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Expenditure derivatives entered
|
120
|
|
1.29
|
|
155
|
|
Expenditure derivatives settled
|
225
|
|
1.33
|
|
300
|
|
|
As at March 31, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
amount
(US$)
|
|
Exchange
rate
|
|
Notional
amount
(Cdn$)
|
|
Fair value
(Cdn$)
|
|
Debt derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
5,950
|
|
1.0667
|
|
6,347
|
|
1,339
|
|
As liabilities
|
1,500
|
|
1.3388
|
|
2,008
|
|
(138
|
)
|
Short-term debt derivatives not accounted for as hedges:
|
|
|
|
|
||||
As liabilities
|
75
|
|
1.3039
|
|
98
|
|
(1
|
)
|
Net mark-to-market debt derivative asset
|
|
|
|
1,200
|
|
|||
Bond forwards accounted for as cash flow hedges:
|
|
|
|
|
||||
As liabilities
|
—
|
|
—
|
|
900
|
|
(70
|
)
|
Expenditure derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
1,050
|
|
1.2361
|
|
1,298
|
|
42
|
|
As liabilities
|
540
|
|
1.3070
|
|
706
|
|
(12
|
)
|
Net mark-to-market expenditure derivative asset
|
|
|
|
30
|
|
|||
Equity derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
—
|
|
—
|
|
276
|
|
33
|
|
|
|
|
|
|
||||
Net mark-to-market asset
|
|
|
|
1,193
|
|
Rogers Communications Inc.
|
23
|
First Quarter 2018
|
|
As at December 31, 2017
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
amount
(US$)
|
|
Exchange
rate
|
|
Notional
amount
(Cdn$)
|
|
Fair value
(Cdn$)
|
|
Debt derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
5,200
|
|
1.0401
|
|
5,409
|
|
1,301
|
|
As liabilities
|
1,500
|
|
1.3388
|
|
2,008
|
|
(149
|
)
|
Short-term debt derivatives not accounted for as hedges:
|
|
|
|
|
||||
As liabilities
|
746
|
|
1.2869
|
|
960
|
|
(23
|
)
|
Net mark-to-market debt derivative asset
|
|
|
|
1,129
|
|
|||
Bond forwards accounted for as cash flow hedges:
|
|
|
|
|
||||
As liabilities
|
—
|
|
—
|
|
900
|
|
(64
|
)
|
Expenditure derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
240
|
|
1.2239
|
|
294
|
|
5
|
|
As liabilities
|
960
|
|
1.2953
|
|
1,243
|
|
(44
|
)
|
Net mark-to-market expenditure derivative liability
|
|
|
|
(39
|
)
|
|||
Equity derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
—
|
|
—
|
|
276
|
|
68
|
|
|
|
|
|
|
||||
Net mark-to-market asset
|
|
|
|
1,094
|
|
Rogers Communications Inc.
|
24
|
First Quarter 2018
|
Rogers Communications Inc.
|
25
|
First Quarter 2018
|
•
|
IFRS 2,
Share-based payment
|
•
|
IFRIC 22,
Foreign currency transactions and advance consideration
|
Rogers Communications Inc.
|
26
|
First Quarter 2018
|
|
|
Three months ended March 31, 2017
|
|
||||
(In millions of dollars)
|
Reference
|
Prior Accounting Basis
1
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|||
Consolidated
|
|
|
|
|
|||
Total revenue
|
i, iii
|
3,338
|
|
34
|
|
3,372
|
|
Total service revenue
2
|
i
|
3,214
|
|
(245
|
)
|
2,969
|
|
Adjusted EBITDA
3
|
|
1,153
|
|
21
|
|
1,174
|
|
|
|
|
|
|
|||
Net income
|
|
294
|
|
16
|
|
310
|
|
Adjusted net income
3
|
|
314
|
|
16
|
|
330
|
|
|
|
|
|
|
|||
Wireless
|
|
|
|
|
|||
Service revenue
|
i
|
1,849
|
|
(245
|
)
|
1,604
|
|
Equipment revenue
|
i, iii
|
119
|
|
279
|
|
398
|
|
|
|
|
|
|
|||
Operating expenses
4
|
ii, iii
|
1,160
|
|
13
|
|
1,173
|
|
|
|
|
|
|
|||
Adjusted EBITDA
|
|
808
|
|
21
|
|
829
|
|
1
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Non-GAAP Measures".
|
3
|
Adjusted EBITDA and adjusted net income are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See
"Non-GAAP Measures" for information about these measures, including how we calculate them.
|
4
|
O
perating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
|
|
As at January 1, 2017
|
|
|
As at December 31, 2017
|
|
||||||||
(in millions of dollars)
|
Reference
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
i, ii, iii
|
28,342
|
|
1,469
|
|
29,811
|
|
|
28,863
|
|
1,627
|
|
30,490
|
|
Total liabilities
|
i, iii
|
23,073
|
|
454
|
|
23,527
|
|
|
22,516
|
|
478
|
|
22,994
|
|
Shareholders' equity
|
|
5,269
|
|
1,015
|
|
6,284
|
|
|
6,347
|
|
1,149
|
|
7,496
|
|
Rogers Communications Inc.
|
27
|
First Quarter 2018
|
•
|
IFRS 16,
Leases
|
Rogers Communications Inc.
|
28
|
First Quarter 2018
|
•
|
the non-executive chairman of a law firm that provides a portion of our legal services; and
|
•
|
the chair of the board of a company that provides printing services to the Company.
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Printing and legal services
|
4
|
|
7
|
|
•
|
updated our policies and procedures related to how we recognize revenue;
|
•
|
augmented our risk assessment process to take into account the risks related to recognizing revenue under IFRS 15;
|
•
|
implemented controls surrounding our new revenue recognition system to ensure the inputs, processes, and outputs are accurate; and
|
•
|
implemented controls designed to address risks associated with the five-step revenue recognition model.
|
Rogers Communications Inc.
|
29
|
First Quarter 2018
|
|
2017
|
|
2017
|
2018
|
||||||
(In millions of dollars, except percentages)
|
Prior Accounting Basis
|
Adjustments
|
|
With adoption of IFRS 15 (restated)
|
Guidance Ranges
1
|
|||||
|
|
|
|
|
|
|
||||
Consolidated Guidance
|
|
|
|
|
|
|
||||
Revenue
|
14,143
|
|
226
|
|
14,369
|
|
Increase of 3%
|
|
to
|
5%
|
Adjusted EBITDA
|
5,318
|
|
184
|
|
5,502
|
|
Increase of 5%
|
|
to
|
7%
|
Capital expenditures
2
|
2,436
|
|
—
|
|
2,436
|
|
2,650
|
|
to
|
2,850
|
Free cash flow
|
1,685
|
|
—
|
|
1,685
|
|
Increase of 3%
|
|
to
|
5%
|
1
|
Guidance ranges presented as percentages reflect increases over full-year restated 2017 actual results.
|
2
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences.
|
•
|
continued intense competition in all segments in which we operate, consistent with our experience during the full-year 2017;
|
•
|
a substantial portion of our US dollar-denominated expenditures for 2018 is hedged at an average exchange rate of $1.30/US$;
|
•
|
key interest rates remain relatively stable throughout 2018;
|
•
|
no significant additional legal or regulatory developments, shifts in economic conditions, or macro changes in the competitive environment affecting our business activities. We note that regulatory decisions expected during 2018 could materially alter underlying assumptions around our 2018 Wireless, Cable, and/or Media results in the current and future years, the impacts of which are currently unknown and not factored into our guidance;
|
•
|
Wireless customers continue to adopt, and upgrade to, higher-value smartphones at similar rates in 2018 compared to 2017 and a similar proportion of customers remain on term contracts;
|
•
|
overall wireless market penetration in Canada grows in 2018 at a similar rate as in 2017;
|
•
|
our relative market share in Wireless and Cable is not negatively impacted by changing competitive dynamics;
|
•
|
continued subscriber growth in Wireless and Cable Internet; a decline in Cable Television subscribers; and a relatively stable Phone subscriber base;
|
•
|
Ignite TV launches in 2018;
|
•
|
in Media, continued growth in sports and declines in certain traditional media businesses; and
|
•
|
with respect to the increase in capital expenditures:
|
•
|
we continue to invest appropriately to ensure we have competitive wireless and cable networks through (i) building a 4.5G to 5G wireless network and (ii) upgrading our hybrid fibre-coaxial network to lower the number of homes passed per node, utilize the latest technologies, and deliver an even more reliable customer experience; and
|
•
|
we continue to make expenditures related to the launch of Ignite TV in 2018.
|
Rogers Communications Inc.
|
30
|
First Quarter 2018
|
•
|
subscriber counts;
|
•
|
Wireless;
|
•
|
Cable; and
|
•
|
homes passed (Cable);
|
•
|
subscriber churn (churn);
|
•
|
blended average billings per user (ABPU);
|
•
|
blended average revenue per user (ARPU);
|
•
|
capital intensity; and
|
•
|
total service revenue.
|
•
|
A wireless subscriber is represented by each identifiable telephone number.
|
•
|
We report wireless subscribers in two categories: postpaid and prepaid. Postpaid and prepaid include voice-only subscribers, data-only subscribers, and subscribers with service plans integrating both voice and data.
|
•
|
Usage and overage charges for postpaid subscribers are billed a month in arrears. Prepaid subscribers cannot incur usage and/or overage charges in excess of their plan limits or account balance.
|
•
|
Wireless prepaid subscribers are considered active for a period of 180 days from the date of their last revenue-generating usage.
|
•
|
Cable Television and Internet subscribers are represented by a dwelling unit; Cable Phone subscribers are represented by line counts.
|
•
|
When there is more than one unit in a single dwelling, such as an apartment building, each tenant with cable service is counted as an individual subscriber, whether the service is invoiced separately or included in the tenant's rent. Institutional units, such as hospitals or hotels, are each considered one subscriber.
|
•
|
Cable Television, Internet, and Phone subscribers include only those subscribers who have service installed and operating, and who are being billed accordingly.
|
•
|
Subscriber counts exclude certain enterprise services delivered over our fibre network and data centre infrastructure, and circuit-switched local and long distance voice services and legacy data services where access is delivered using leased third-party network elements and tariffed ILEC services.
|
Rogers Communications Inc.
|
31
|
First Quarter 2018
|
Rogers Communications Inc.
|
32
|
First Quarter 2018
|
Non-GAAP measure |
Why we use it |
How we calculate it |
Most
comparable IFRS financial measure |
||
Adjusted EBITDA
Adjusted EBITDA margin
|
●
|
|
To evaluate the performance of our businesses, and when making decisions about the ongoing operations of the business and our ability to generate cash flows.
|
Adjusted EBITDA:
Net income
add (deduct)
income tax expense (recovery); finance costs; depreciation and amortization; other expense (income); restructuring, acquisition and other; and loss (gain) on disposition of property, plant and equipment.
Adjusted EBITDA margin:
Adjusted EBITDA
divided by
revenue.
|
Net income
|
●
|
|
We believe that certain investors and analysts use adjusted EBITDA to measure our ability to service debt and to meet other payment obligations.
|
|||
●
|
|
We also use it as one component in determining short-term incentive compensation for all management employees.
|
|||
Adjusted net
income
Adjusted basic
and diluted
earnings per
share
|
●
|
|
To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.
|
Adjusted net income:
Net income
add (deduct)
restructuring, acquisition and other; loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; and income tax adjustments on these items, including adjustments as a result of legislative changes.
Adjusted basic and diluted earnings per share:
Adjusted net income
divided by
basic and diluted weighted average shares outstanding.
|
Net income
Basic and
diluted
earnings per
share
|
Free cash flow
|
●
|
|
To show how much cash we have available to repay debt and reinvest in our company, which is an important indicator of our financial strength and performance.
|
Adjusted EBITDA
deduct
capital expenditures; interest on borrowings net of capitalized interest; net change in contract asset and deferred commission cost asset balances; and cash income taxes.
|
Cash provided
by operating
activities
|
●
|
|
We believe that some investors and analysts use free cash flow to value a business and its underlying assets.
|
|||
Adjusted net
debt
|
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Total long-term debt
add (deduct)
current portion of long-term debt; deferred transaction costs and discounts; net debt derivative (assets) liabilities; credit risk adjustment related to net debt derivatives; bank advances (cash and cash equivalents); and short-term borrowings.
|
Long-term
debt
|
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
Rogers Communications Inc.
|
33
|
First Quarter 2018
|
Non-GAAP measure |
Why we use it |
How we calculate it |
Most
comparable IFRS financial measure |
||
Debt leverage ratio
|
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Adjusted net debt (defined above)
divided by
12-month trailing adjusted EBITDA (defined above).
|
Long-term debt
divided by net
income
|
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Net income
|
425
|
|
310
|
|
|
383
|
|
294
|
|
Add:
|
|
|
|
|
|
||||
Income tax expense
|
141
|
|
112
|
|
|
126
|
|
107
|
|
Finance costs
|
219
|
|
190
|
|
|
219
|
|
190
|
|
Depreciation and amortization
|
544
|
|
545
|
|
|
544
|
|
545
|
|
|
|
|
|
|
|
||||
EBITDA
|
1,329
|
|
1,157
|
|
|
1,272
|
|
1,136
|
|
Add (deduct):
|
|
|
|
|
|
||||
Other income
|
(23
|
)
|
(11
|
)
|
|
(23
|
)
|
(11
|
)
|
Restructuring, acquisition and other
|
43
|
|
28
|
|
|
43
|
|
28
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
|
(11
|
)
|
—
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
|
1,281
|
|
1,153
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars, except margins)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
|
1,281
|
|
1,153
|
|
Divided by: total revenue
|
3,633
|
|
3,372
|
|
|
3,540
|
|
3,338
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA margin
|
36.8
|
%
|
34.8
|
%
|
|
36.2
|
%
|
34.5
|
%
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
Rogers Communications Inc.
|
34
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Net income
|
425
|
|
310
|
|
|
383
|
|
294
|
|
Add (deduct):
|
|
|
|
|
|
||||
Restructuring, acquisition and other
|
43
|
|
28
|
|
|
43
|
|
28
|
|
Loss on repayment of long-term debt
|
28
|
|
—
|
|
|
28
|
|
—
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
|
(11
|
)
|
—
|
|
Income tax impact of above items
|
(8
|
)
|
(8
|
)
|
|
(8
|
)
|
(8
|
)
|
|
|
|
|
|
|
|
|
||
Adjusted net income
|
477
|
|
330
|
|
|
435
|
|
314
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
|||||||||||
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share:
|
|
|
|
|
|
||||||||
Adjusted net income
|
477
|
|
330
|
|
|
435
|
|
314
|
|
||||
Divided by:
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding
|
515
|
|
515
|
|
|
515
|
|
515
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share
|
|
$0.93
|
|
|
$0.64
|
|
|
|
$0.84
|
|
|
$0.61
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share:
|
|
|
|
|
|
||||||||
Diluted adjusted net income
|
464
|
|
330
|
|
|
422
|
|
314
|
|
||||
Divided by:
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average number of shares outstanding
|
516
|
|
517
|
|
|
516
|
|
517
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share
|
|
$0.90
|
|
|
$0.64
|
|
|
|
$0.82
|
|
|
$0.61
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Cash provided by operating activities
|
885
|
|
596
|
|
Add (deduct):
|
|
|
||
Capital expenditures
|
(605
|
)
|
(486
|
)
|
Interest on borrowings, net of capitalized interest
|
(182
|
)
|
(182
|
)
|
Restructuring, acquisition and other
|
43
|
|
28
|
|
Interest paid
|
238
|
|
238
|
|
Change in non-cash operating working capital items
|
21
|
|
175
|
|
Other adjustments
|
(16
|
)
|
(44
|
)
|
|
|
|
||
Free cash flow
|
384
|
|
325
|
|
Rogers Communications Inc.
|
35
|
First Quarter 2018
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Current portion of long-term debt
|
2,205
|
|
1,756
|
|
Long-term debt
|
13,432
|
|
12,692
|
|
Deferred transaction costs and discounts
|
120
|
|
107
|
|
|
15,757
|
|
14,555
|
|
Add (deduct):
|
|
|
||
Net debt derivative assets
|
(1,200
|
)
|
(1,129
|
)
|
Credit risk adjustment related to net debt derivative assets
|
(19
|
)
|
(17
|
)
|
Short-term borrowings
|
747
|
|
1,585
|
|
Bank advances
|
49
|
|
6
|
|
|
|
|
||
Adjusted net debt
|
15,334
|
|
15,000
|
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2018
|
|
2017
(restated)
1
|
|
|
|
|
||
Adjusted net debt
|
15,334
|
|
15,000
|
|
Divided by: trailing 12-month adjusted EBITDA
|
5,666
|
|
5,502
|
|
|
|
|
||
Debt leverage ratio
|
2.7
|
|
2.7
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
Rogers Communications Inc.
|
36
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
2018
|
|
2017
|
|
|
|
|
||
Revenue
|
3,633
|
|
3,372
|
|
Service revenue and equipment revenue adjustments arising from timing of revenue recognition and transfer of control
|
(93
|
)
|
(34
|
)
|
|
|
|
||
Prior basis revenue
|
3,540
|
|
3,338
|
|
|
|
|
||
|
|
|
||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
Revenue changes as described above
|
(93
|
)
|
(34
|
)
|
Net change in deferred commission cost assets and other
|
36
|
|
13
|
|
|
|
|
||
Prior basis adjusted EBITDA
|
1,281
|
|
1,153
|
|
|
|
|
||
|
|
|
||
Income tax expense
|
141
|
|
112
|
|
Tax effect related to adjustments required under IFRS 15
|
(15
|
)
|
(5
|
)
|
|
|
|
||
Prior basis income tax expense
|
126
|
|
107
|
|
|
|
|
||
|
|
|
||
Net income
|
425
|
|
310
|
|
Adjustments required under IFRS 15
|
(42
|
)
|
(16
|
)
|
|
|
|
||
Prior basis net income
|
383
|
|
294
|
|
|
|
|
||
|
|
|
||
Prior basis basic earnings per share:
|
|
|
||
Prior basis net income
|
383
|
|
294
|
|
Divided by:
|
|
|
||
Weighted average number of shares outstanding
|
515
|
|
515
|
|
|
|
|
||
Prior basis basic earnings per share
|
$0.74
|
$0.57
|
||
|
|
|
||
Prior basis diluted earnings per share:
|
|
|
||
Prior basis net income
|
383
|
|
294
|
|
Divided by:
|
|
|
||
Diluted weighted average number of shares outstanding
|
516
|
|
517
|
|
|
|
|
||
Prior basis diluted earnings per share
|
$0.72
|
$0.57
|
Rogers Communications Inc.
|
37
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Wireless service revenue
|
1,687
|
|
1,604
|
|
Adjustments arising from timing of revenue recognition and classification required under IFRS 15
|
283
|
|
245
|
|
|
|
|
||
Prior basis Wireless service revenue
|
1,970
|
|
1,849
|
|
|
|
|
||
|
|
|
||
Wireless equipment revenue
|
504
|
|
398
|
|
Adjustments arising from timing of revenue recognition and classification required under IFRS 15
|
(376
|
)
|
(279
|
)
|
|
|
|
||
Prior basis Wireless equipment revenue
|
128
|
|
119
|
|
|
|
|
||
|
|
|
||
Wireless operating expenses
|
1,257
|
|
1,173
|
|
Net change in deferred commission cost assets and other
|
(36
|
)
|
(13
|
)
|
|
|
|
||
Prior basis Wireless operating expenses
|
1,221
|
|
1,160
|
|
|
|
|
||
Prior basis wireless adjusted EBITDA
|
877
|
|
808
|
|
Rogers Communications Inc.
|
38
|
First Quarter 2018
|
|
IFRS 15
|
|
Prior Accounting Basis
|
|||||||||||||||||||||||
|
2018
|
|
2017
1
|
|
2016
2
|
|||||||||||||||||||||
(In millions of dollars, except per share amounts)
|
Q1
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless
|
2,191
|
|
|
2,288
|
|
2,203
|
|
2,076
|
|
2,002
|
|
|
2,058
|
|
2,037
|
|
1,931
|
|
||||||||
Cable
3
|
969
|
|
|
981
|
|
977
|
|
976
|
|
960
|
|
|
964
|
|
970
|
|
976
|
|
||||||||
Media
|
532
|
|
|
526
|
|
516
|
|
637
|
|
474
|
|
|
550
|
|
533
|
|
615
|
|
||||||||
Corporate items and intercompany eliminations
3
|
(59
|
)
|
|
(64
|
)
|
(50
|
)
|
(69
|
)
|
(64
|
)
|
|
(62
|
)
|
(48
|
)
|
(67
|
)
|
||||||||
Total revenue
|
3,633
|
|
|
3,731
|
|
3,646
|
|
3,620
|
|
3,372
|
|
|
3,510
|
|
3,492
|
|
3,455
|
|
||||||||
Total service revenue
4
|
3,127
|
|
|
3,164
|
|
3,196
|
|
3,221
|
|
2,969
|
|
|
3,306
|
|
3,328
|
|
3,308
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted EBITDA
5
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless
|
934
|
|
|
965
|
|
1,017
|
|
915
|
|
829
|
|
|
787
|
|
878
|
|
840
|
|
||||||||
Cable
3
|
433
|
|
|
477
|
|
471
|
|
455
|
|
416
|
|
|
459
|
|
457
|
|
439
|
|
||||||||
Media
|
23
|
|
|
37
|
|
61
|
|
59
|
|
(30
|
)
|
|
45
|
|
76
|
|
89
|
|
||||||||
Corporate items and intercompany eliminations
3
|
(52
|
)
|
|
(43
|
)
|
(46
|
)
|
(40
|
)
|
(41
|
)
|
|
(48
|
)
|
(44
|
)
|
(36
|
)
|
||||||||
Adjusted EBITDA
|
1,338
|
|
|
1,436
|
|
1,503
|
|
1,389
|
|
1,174
|
|
|
1,243
|
|
1,367
|
|
1,332
|
|
||||||||
Deduct (add):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Depreciation and amortization
|
544
|
|
|
531
|
|
531
|
|
535
|
|
545
|
|
|
555
|
|
575
|
|
572
|
|
||||||||
Gain on disposition of property, plant and equipment
|
(11
|
)
|
|
—
|
|
—
|
|
(49
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||
Restructuring, acquisition and other
|
43
|
|
|
31
|
|
59
|
|
34
|
|
28
|
|
|
518
|
|
55
|
|
27
|
|
||||||||
Finance costs
|
219
|
|
|
184
|
|
183
|
|
189
|
|
190
|
|
|
188
|
|
188
|
|
189
|
|
||||||||
Other (income) expense
|
(23
|
)
|
|
3
|
|
20
|
|
(31
|
)
|
(11
|
)
|
|
(4
|
)
|
220
|
|
9
|
|
||||||||
Net income (loss) before income tax expense (recovery)
|
566
|
|
|
687
|
|
710
|
|
711
|
|
422
|
|
|
(14
|
)
|
329
|
|
535
|
|
||||||||
Income tax expense (recovery)
|
141
|
|
|
188
|
|
202
|
|
183
|
|
112
|
|
|
(5
|
)
|
109
|
|
141
|
|
||||||||
Net income (loss)
|
425
|
|
|
499
|
|
508
|
|
528
|
|
310
|
|
|
(9
|
)
|
220
|
|
394
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$0.83
|
|
|
|
$0.97
|
|
|
$0.99
|
|
|
$1.03
|
|
|
$0.60
|
|
|
|
($0.02
|
)
|
|
$0.43
|
|
|
$0.77
|
|
Diluted
|
|
$0.80
|
|
|
|
$0.97
|
|
|
$0.98
|
|
|
$1.02
|
|
|
$0.60
|
|
|
|
($0.04
|
)
|
|
$0.43
|
|
|
$0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss)
|
425
|
|
|
499
|
|
508
|
|
528
|
|
310
|
|
|
(9
|
)
|
220
|
|
394
|
|
||||||||
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring, acquisition and other
|
43
|
|
|
31
|
|
59
|
|
34
|
|
28
|
|
|
518
|
|
55
|
|
27
|
|
||||||||
Loss on repayment of long-term debt
|
28
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||
(Recovery) loss on wind down of shomi
|
—
|
|
|
—
|
|
—
|
|
(20
|
)
|
—
|
|
|
—
|
|
140
|
|
—
|
|
||||||||
Net loss on divestitures pertaining to investments
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
50
|
|
—
|
|
||||||||
Gain on disposition of property, plant and equipment
|
(11
|
)
|
|
—
|
|
—
|
|
(49
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||
Income tax impact of above items
|
(8
|
)
|
|
(7
|
)
|
(16
|
)
|
3
|
|
(8
|
)
|
|
(138
|
)
|
(52
|
)
|
(7
|
)
|
||||||||
Income tax adjustment, legislative tax change
|
—
|
|
|
2
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||
Adjusted net income
5
|
477
|
|
|
525
|
|
551
|
|
496
|
|
330
|
|
|
371
|
|
413
|
|
414
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted earnings per share
5
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$0.93
|
|
|
|
$1.02
|
|
|
$1.07
|
|
|
$0.96
|
|
|
$0.64
|
|
|
|
$0.72
|
|
|
$0.80
|
|
|
$0.80
|
|
Diluted
|
|
$0.90
|
|
|
|
$1.02
|
|
|
$1.07
|
|
|
$0.96
|
|
|
$0.64
|
|
|
|
$0.72
|
|
|
$0.80
|
|
|
$0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Capital expenditures
|
605
|
|
|
841
|
|
658
|
|
451
|
|
486
|
|
|
604
|
|
549
|
|
647
|
|
||||||||
Cash provided by operating activities
|
885
|
|
|
1,142
|
|
1,377
|
|
823
|
|
596
|
|
|
1,053
|
|
1,185
|
|
1,121
|
|
||||||||
Free cash flow
5
|
384
|
|
|
230
|
|
523
|
|
607
|
|
325
|
|
|
376
|
|
580
|
|
480
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15.
|
3
|
These figures have been retrospectively amended as a result of our reportable segment realignment. See "Reportable Segments".
|
4
|
As defined. See "Key Performance Indicators".
|
5
|
Adjusted EBITDA, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
Rogers Communications Inc.
|
39
|
First Quarter 2018
|
Three months ended March 31
|
RCI
1,2
|
RCCI
1,2
|
Non-guarantor
subsidiaries
1,2
|
Consolidating
adjustments
1,2
|
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
||||||
Selected Statements of Income data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
1
|
|
1
|
|
3,145
|
|
2,946
|
|
547
|
|
488
|
|
(60
|
)
|
(63
|
)
|
3,633
|
|
3,372
|
|
Net Income (loss)
|
425
|
|
310
|
|
428
|
|
329
|
|
305
|
|
182
|
|
(733
|
)
|
(511
|
)
|
425
|
|
310
|
|
As at period end
|
RCI
1,2
|
RCCI
1,2
|
Non-guarantor
subsidiaries 1,2 |
Consolidating
adjustments 1,2 |
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
Mar. 31
2018 |
|
Dec. 31 2017
|
|
Mar. 31
2018 |
|
Dec. 31 2017
|
|
Mar. 31
2018 |
|
Dec. 31 2017
|
|
Mar. 31
2018 |
|
Dec. 31 2017
|
|
Mar. 31
2018 |
|
Dec. 31 2017
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
|
(restated)
3
|
|
||||||
Selected Statements of Financial Position data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
24,567
|
|
24,501
|
|
21,492
|
|
21,419
|
|
9,183
|
|
9,016
|
|
(51,248
|
)
|
(50,811
|
)
|
3,994
|
|
4,125
|
|
Non-current assets
|
32,060
|
|
31,683
|
|
42,754
|
|
42,466
|
|
3,533
|
|
3,521
|
|
(52,165
|
)
|
(51,305
|
)
|
26,182
|
|
26,365
|
|
Current liabilities
|
30,745
|
|
30,723
|
|
26,848
|
|
27,074
|
|
1,457
|
|
1,513
|
|
(52,862
|
)
|
(52,427
|
)
|
6,188
|
|
6,883
|
|
Non-current liabilities
|
15,159
|
|
14,468
|
|
2,791
|
|
2,807
|
|
559
|
|
572
|
|
(1,789
|
)
|
(1,736
|
)
|
16,720
|
|
16,111
|
|
1
|
For the purposes of this table, investments in subsidiary companies are accounted for by the equity method.
|
2
|
Amounts recorded in current liabilities and non-current liabilities for RCCI do not include any obligations arising as a result of being a guarantor or co-obligor, as the case may be, under any of RCI’s long-term debt.
|
3
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
Rogers Communications Inc.
|
40
|
First Quarter 2018
|
•
|
typically includes words like
could
,
expect
,
may
,
anticipate
,
assume
,
believe
,
intend
,
estimate
,
plan
,
project
,
guidance
,
outlook, target
, and similar expressions, although not all forward-looking information includes them;
|
•
|
includes conclusions, forecasts, and projections that are based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors, most of which are confidential and proprietary and that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
|
•
|
was approved by our management on the date of this MD&A.
|
•
|
revenue;
|
•
|
total service revenue;
|
•
|
adjusted EBITDA;
|
•
|
capital expenditures;
|
•
|
cash income tax payments;
|
•
|
free cash flow;
|
•
|
dividend payments;
|
•
|
the growth of new products and services;
|
•
|
expected
growth in subscribers and the services to which they subscribe;
|
•
|
the cost of acquiring and retaining subscribers and deployment of new services;
|
•
|
continued cost reductions and efficiency improvements;
|
•
|
traction against our debt leverage ratio; and
|
•
|
all other statements that are not historical facts.
|
•
|
general economic and industry growth rates;
|
•
|
currency exchange rates and interest rates;
|
•
|
product pricing levels and competitive intensity;
|
•
|
subscriber growth;
|
•
|
pricing, usage, and churn rates;
|
•
|
changes in government regulation;
|
•
|
technology deployment;
|
•
|
availability of devices;
|
•
|
timing of new product launches;
|
•
|
content and equipment costs;
|
•
|
the integration of acquisitions; and
|
•
|
industry structure and stability.
|
•
|
regulatory changes;
|
•
|
technological changes;
|
•
|
economic conditions;
|
•
|
unanticipated changes in content or equipment costs;
|
•
|
changing conditions in the entertainment, information, and communications industries;
|
•
|
the integration of acquisitions;
|
•
|
litigation and tax matters;
|
•
|
the level of competitive intensity;
|
•
|
the emergence of new opportunities; and
|
•
|
new interpretations and new accounting standards from accounting standards bodies.
|
Rogers Communications Inc.
|
41
|
First Quarter 2018
|
Rogers Communications Inc.
|
42
|
First Quarter 2018
|
Rogers Communications Inc.
|
1
|
First Quarter 2018
|
|
|
Three months ended March 31
|
|
|||
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
(restated, see note 2)
|
|
||
|
|
|
|
|||
Revenue
|
4
|
|
3,633
|
|
3,372
|
|
|
|
|
|
|||
Operating expenses:
|
|
|
|
|||
Operating costs
|
5
|
|
2,295
|
|
2,198
|
|
Depreciation and amortization
|
|
544
|
|
545
|
|
|
Gain on disposition of property, plant and equipment
|
|
(11
|
)
|
—
|
|
|
Restructuring, acquisition and other
|
6
|
|
43
|
|
28
|
|
Finance costs
|
7
|
|
219
|
|
190
|
|
Other income
|
8
|
|
(23
|
)
|
(11
|
)
|
|
|
|
|
|||
Income before income tax expense
|
|
566
|
|
422
|
|
|
Income tax expense
|
|
141
|
|
112
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
425
|
|
310
|
|
|
|
|
|
|
|||
Earnings per share:
|
|
|
|
|||
Basic
|
9
|
|
$0.83
|
$0.60
|
||
Diluted
|
9
|
|
$0.80
|
$0.60
|
Rogers Communications Inc.
|
2
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
|
2018
|
|
2017
|
|
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Net income for the period
|
425
|
|
310
|
|
|
|
|
||
Other comprehensive (loss) income:
|
|
|
||
|
|
|
||
Items that will not be reclassified to income
|
|
|
||
Equity investments measured at fair value through other comprehensive income (FVTOCI):
|
|
|
||
(Decrease) increase in fair value
|
(301
|
)
|
78
|
|
Related income tax recovery (expense)
|
40
|
|
(9
|
)
|
|
|
|
||
Equity investments measured at FVTOCI
|
(261
|
)
|
69
|
|
|
|
|
||
Items that may subsequently be reclassified to income:
|
|
|
||
Cash flow hedging derivative instruments:
|
|
|
||
Unrealized gain (loss) in fair value of derivative instruments
|
121
|
|
(128
|
)
|
Reclassification to net income of (gain) loss on debt derivatives
|
(263
|
)
|
86
|
|
Reclassification to net income or property, plant and equipment of loss on expenditure derivatives
|
4
|
|
7
|
|
Reclassification to net income for accrued interest
|
(13
|
)
|
(18
|
)
|
Related income tax recovery
|
9
|
|
18
|
|
|
|
|
||
Cash flow hedging derivative instruments
|
(142
|
)
|
(35
|
)
|
|
|
|
||
Share of other comprehensive income (loss) of equity-accounted investments, net of tax
|
1
|
|
(8
|
)
|
|
|
|
||
Other comprehensive (loss) income for the period
|
(402
|
)
|
26
|
|
|
|
|
||
Comprehensive income for the period
|
23
|
|
336
|
|
Rogers Communications Inc.
|
3
|
First Quarter 2018
|
|
|
As at
March 31 |
|
As at
December 31 |
|
As at
January 1 |
|
|
|
Note
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
(restated, see note 2)
|
|
(restated, see note 2)
|
|
||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Accounts receivable
|
|
1,900
|
|
2,035
|
|
1,944
|
|
|
Inventories
|
|
356
|
|
435
|
|
452
|
|
|
Current portion of contract assets
|
4
|
|
861
|
|
820
|
|
723
|
|
Other current assets
|
|
435
|
|
414
|
|
417
|
|
|
Current portion of derivative instruments
|
10
|
|
442
|
|
421
|
|
91
|
|
Total current assets
|
|
3,994
|
|
4,125
|
|
3,627
|
|
|
|
|
|
|
|
||||
Property, plant and equipment
|
|
11,227
|
|
11,143
|
|
10,749
|
|
|
Intangible assets
|
|
|
7,222
|
|
7,244
|
|
7,130
|
|
Investments
|
11
|
|
2,277
|
|
2,561
|
|
2,174
|
|
Derivative instruments
|
10
|
|
972
|
|
953
|
|
1,708
|
|
Contract assets
|
4
|
|
441
|
|
413
|
|
354
|
|
Other long-term assets
|
|
135
|
|
143
|
|
156
|
|
|
Deferred tax assets
|
|
3
|
|
3
|
|
8
|
|
|
Goodwill
|
|
3,905
|
|
3,905
|
|
3,905
|
|
|
|
|
|
|
|
||||
Total assets
|
|
30,176
|
|
30,490
|
|
29,811
|
|
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Bank advances
|
|
49
|
|
6
|
|
71
|
|
|
Short-term borrowings
|
12
|
|
747
|
|
1,585
|
|
800
|
|
Accounts payable and accrued liabilities
|
|
2,516
|
|
2,931
|
|
2,783
|
|
|
Income tax payable
|
|
147
|
|
62
|
|
186
|
|
|
Other current liabilities
|
|
110
|
|
132
|
|
285
|
|
|
Current portion of contract liabilities
|
|
329
|
|
278
|
|
302
|
|
|
Current portion of long-term debt
|
13
|
|
2,205
|
|
1,756
|
|
750
|
|
Current portion of derivative instruments
|
10
|
|
85
|
|
133
|
|
22
|
|
Total current liabilities
|
|
6,188
|
|
6,883
|
|
5,199
|
|
|
|
|
|
|
|
|
|||
Provisions
|
|
36
|
|
35
|
|
33
|
|
|
Long-term debt
|
13
|
|
13,432
|
|
12,692
|
|
15,330
|
|
Derivative instruments
|
10
|
|
136
|
|
147
|
|
118
|
|
Other long-term liabilities
|
|
599
|
|
613
|
|
562
|
|
|
Deferred tax liabilities
|
|
2,517
|
|
2,624
|
|
2,285
|
|
|
Total liabilities
|
|
22,908
|
|
22,994
|
|
23,527
|
|
|
|
|
|
|
|
|
|||
Shareholders' equity
|
14
|
|
7,268
|
|
7,496
|
|
6,284
|
|
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
|
30,176
|
|
30,490
|
|
29,811
|
|
|
|
|
|
|
|
||||
Subsequent events
|
13, 14
|
|
|
|
|
|||
Contingent liabilities
|
17
|
|
|
|
|
Rogers Communications Inc.
|
4
|
First Quarter 2018
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Three months ended March 31, 2018
|
Amount
|
|
Number
of shares
(000s)
|
|
Amount
|
|
Number
of shares
(000s)
|
|
Retained
earnings
|
|
FVTOCI investment reserve
|
|
Hedging
reserve
|
|
Equity
investment reserve
|
|
Total
shareholders'
equity
|
|
Balances, December 31, 2017 (restated, see note 2)
|
72
|
|
112,407
|
|
405
|
|
402,403
|
|
6,074
|
|
1,013
|
|
(63
|
)
|
(5
|
)
|
7,496
|
|
Adjustments pertaining to IFRS 9 adoption
|
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
|||||||
Balances, January 1, 2018 (restated, see note 2)
|
72
|
|
112,407
|
|
405
|
|
402,403
|
|
6,070
|
|
1,013
|
|
(63
|
)
|
(5
|
)
|
7,492
|
|
Net income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
425
|
|
—
|
|
—
|
|
—
|
|
425
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(261
|
)
|
—
|
|
—
|
|
(261
|
)
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(142
|
)
|
—
|
|
(142
|
)
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(261
|
)
|
(142
|
)
|
1
|
|
(402
|
)
|
Comprehensive income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
425
|
|
(261
|
)
|
(142
|
)
|
1
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(247
|
)
|
—
|
|
—
|
|
—
|
|
(247
|
)
|
Shares issued on exercise of stock options
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total transactions with shareholders
|
—
|
|
—
|
|
—
|
|
2
|
|
(247
|
)
|
—
|
|
—
|
|
—
|
|
(247
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, March 31, 2018
|
72
|
|
112,407
|
|
405
|
|
402,405
|
|
6,248
|
|
752
|
|
(205
|
)
|
(4
|
)
|
7,268
|
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Three months ended March 31, 2017
|
Amount
|
|
Number
of shares
(000s)
|
|
Amount
|
|
Number
of shares
(000s)
|
|
Retained
earnings
|
|
FVTOCI investment reserve
|
|
Hedging
reserve
|
|
Equity
investment
reserve
|
|
Total
shareholders'
equity
|
|
Balances, January 1, 2017 (restated, see note 2)
|
72
|
|
112,412
|
|
405
|
|
402,396
|
|
5,262
|
|
642
|
|
(107
|
)
|
10
|
|
6,284
|
|
Net income for the period (restated, see note 2)
|
—
|
|
—
|
|
—
|
|
—
|
|
310
|
|
—
|
|
—
|
|
—
|
|
310
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69
|
|
—
|
|
—
|
|
69
|
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(35
|
)
|
—
|
|
(35
|
)
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
(8
|
)
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69
|
|
(35
|
)
|
(8
|
)
|
26
|
|
Comprehensive income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
310
|
|
69
|
|
(35
|
)
|
(8
|
)
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(247
|
)
|
—
|
|
—
|
|
—
|
|
(247
|
)
|
Shares issued on exercise of stock options
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total transactions with shareholders
|
—
|
|
—
|
|
—
|
|
2
|
|
(247
|
)
|
—
|
|
—
|
|
—
|
|
(247
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, March 31, 2017 (restated, see note 2)
|
72
|
|
112,412
|
|
405
|
|
402,398
|
|
5,325
|
|
711
|
|
(142
|
)
|
2
|
|
6,373
|
|
Rogers Communications Inc.
|
5
|
First Quarter 2018
|
|
|
Three months ended March 31
|
|
|||
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
(restated, see note 2)
|
|
||
Operating activities:
|
|
|
|
|||
Net income for the period
|
|
425
|
|
310
|
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
|
544
|
|
545
|
|
|
Program rights amortization
|
|
14
|
|
20
|
|
|
Finance costs
|
7
|
|
219
|
|
190
|
|
Income tax expense
|
|
141
|
|
112
|
|
|
Post-employment benefits contributions, net of expense
|
|
17
|
|
6
|
|
|
Gain on disposition of property, plant and equipment
|
|
(11
|
)
|
—
|
|
|
Net change in contract asset balances
|
4
|
|
(69
|
)
|
(24
|
)
|
Other
|
|
(26
|
)
|
10
|
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
|
1,254
|
|
1,169
|
|
|
Change in non-cash operating working capital items
|
18
|
|
(21
|
)
|
(175
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
|
1,233
|
|
994
|
|
|
Income taxes paid
|
|
(110
|
)
|
(160
|
)
|
|
Interest paid
|
|
(238
|
)
|
(238
|
)
|
|
|
|
|
|
|||
Cash provided by operating activities
|
|
885
|
|
596
|
|
|
|
|
|
|
|||
Investing activities:
|
|
|
|
|||
Capital expenditures
|
18
|
|
(605
|
)
|
(486
|
)
|
Additions to program rights
|
|
(6
|
)
|
(14
|
)
|
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
|
(138
|
)
|
(81
|
)
|
|
Other
|
|
10
|
|
(26
|
)
|
|
|
|
|
|
|||
Cash used in investing activities
|
|
(739
|
)
|
(607
|
)
|
|
|
|
|
|
|||
Financing activities:
|
|
|
|
|||
Net (repayment) proceeds received on short-term borrowings
|
12
|
|
(848
|
)
|
336
|
|
Net issuance (repayment) of long-term debt
|
13
|
|
938
|
|
(53
|
)
|
Net payments on settlement of debt derivatives and forward contracts
|
10
|
|
(16
|
)
|
(3
|
)
|
Transaction costs incurred
|
|
(16
|
)
|
—
|
|
|
Dividends paid
|
|
(247
|
)
|
(247
|
)
|
|
|
|
|
|
|||
Cash (used in) provided by financing activities
|
|
(189
|
)
|
33
|
|
|
|
|
|
|
|||
Change in cash and cash equivalents
|
|
(43
|
)
|
22
|
|
|
Bank advances, beginning of period
|
|
(6
|
)
|
(71
|
)
|
|
|
|
|
|
|||
Bank advances, end of period
|
|
(49
|
)
|
(49
|
)
|
Rogers Communications Inc.
|
6
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Segment
|
Principal activities
|
Wireless
|
Wireless telecommunications operations for Canadian consumers and businesses.
|
Cable
|
Cable telecommunications operations, including Internet, television, and telephony (phone) services for Canadian consumers and businesses, and network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector, and carrier wholesale markets.
|
Media
|
A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, digital media, and publishing.
|
•
|
IFRS 2,
Share-based payment
|
•
|
IFRIC 22,
Foreign
c
urrency transactions and advance consideration
|
Rogers Communications Inc.
|
7
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we would have otherwise recognized would have been one year or less;
|
•
|
not disclose, on an annual basis, the unsatisfied portions of performance obligations related to contracts with a duration of one year or less or where the revenue we recognize is equal to the amount invoiced to the customer; and
|
•
|
not adjust the total consideration over the contract term for effects of a significant financing component, if we expect that the period between when we would transfer our good or service to the customer and when the customer would pay for the good or service would be one year or less.
|
Rogers Communications Inc.
|
8
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended March 31, 2017
|
|
||||
(In millions of dollars, except per share amounts)
|
Reference
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|||
Revenue
|
i, iii
|
3,338
|
|
34
|
|
3,372
|
|
|
|
|
|
|
|||
Operating expenses:
|
|
|
|
|
|||
Operating costs
|
ii, iii
|
2,185
|
|
13
|
|
2,198
|
|
Depreciation and amortization
|
|
545
|
|
—
|
|
545
|
|
Restructuring, acquisition and other
|
|
28
|
|
—
|
|
28
|
|
Finance costs
|
|
190
|
|
—
|
|
190
|
|
Other income
|
|
(11
|
)
|
—
|
|
(11
|
)
|
|
|
|
|
|
|||
Income before income tax expense
|
|
401
|
|
21
|
|
422
|
|
Income tax expense
|
|
107
|
|
5
|
|
112
|
|
|
|
|
|
|
|
||
Net income for the period
|
|
294
|
|
16
|
|
310
|
|
|
|
|
|
|
|||
Earnings per share:
|
|
|
|
|
|||
Basic
|
|
$0.57
|
$0.03
|
$0.60
|
|||
Diluted
|
|
$0.57
|
$0.03
|
$0.60
|
Rogers Communications Inc.
|
9
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
As at January 1, 2017
|
|
|
As at December 31, 2017
|
|
||||||||
(in millions of dollars)
|
Reference
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
1,949
|
|
(5
|
)
|
1,944
|
|
|
2,041
|
|
(6
|
)
|
2,035
|
|
Inventories
|
iii
|
315
|
|
137
|
|
452
|
|
|
313
|
|
122
|
|
435
|
|
Current portion of contract assets
|
i
|
—
|
|
723
|
|
723
|
|
|
—
|
|
820
|
|
820
|
|
Other current assets
|
ii
|
215
|
|
202
|
|
417
|
|
|
197
|
|
217
|
|
414
|
|
Current portion of derivative instruments
|
|
91
|
|
—
|
|
91
|
|
|
421
|
|
—
|
|
421
|
|
Total current assets
|
|
2,570
|
|
1,057
|
|
3,627
|
|
|
2,972
|
|
1,153
|
|
4,125
|
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment
|
|
10,749
|
|
—
|
|
10,749
|
|
|
11,143
|
|
—
|
|
11,143
|
|
Intangible assets
|
|
7,130
|
|
—
|
|
7,130
|
|
|
7,244
|
|
—
|
|
7,244
|
|
Investments
|
|
2,174
|
|
—
|
|
2,174
|
|
|
2,561
|
|
—
|
|
2,561
|
|
Derivative instruments
|
|
1,708
|
|
—
|
|
1,708
|
|
|
953
|
|
—
|
|
953
|
|
Contract assets
|
i
|
—
|
|
354
|
|
354
|
|
|
—
|
|
413
|
|
413
|
|
Other long-term assets
|
ii
|
98
|
|
58
|
|
156
|
|
|
82
|
|
61
|
|
143
|
|
Deferred tax assets
|
|
8
|
|
—
|
|
8
|
|
|
3
|
|
—
|
|
3
|
|
Goodwill
|
|
3,905
|
|
—
|
|
3,905
|
|
|
3,905
|
|
—
|
|
3,905
|
|
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
|
28,342
|
|
1,469
|
|
29,811
|
|
|
28,863
|
|
1,627
|
|
30,490
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
||||||
Bank advances
|
|
71
|
|
—
|
|
71
|
|
|
6
|
|
—
|
|
6
|
|
Short-term borrowings
|
|
800
|
|
—
|
|
800
|
|
|
1,585
|
|
—
|
|
1,585
|
|
Accounts payable and accrued liabilities
|
|
2,783
|
|
—
|
|
2,783
|
|
|
2,931
|
|
—
|
|
2,931
|
|
Income tax payable
|
|
186
|
|
—
|
|
186
|
|
|
62
|
|
—
|
|
62
|
|
Other current liabilities
1
|
iii
|
134
|
|
151
|
|
285
|
|
|
4
|
|
128
|
|
132
|
|
Current portion of contract liabilities
2
|
i
|
367
|
|
(65
|
)
|
302
|
|
|
346
|
|
(68
|
)
|
278
|
|
Current portion of long-term debt
|
|
750
|
|
—
|
|
750
|
|
|
1,756
|
|
—
|
|
1,756
|
|
Current portion of derivative instruments
|
|
22
|
|
—
|
|
22
|
|
|
133
|
|
—
|
|
133
|
|
Total current liabilities
|
|
5,113
|
|
86
|
|
5,199
|
|
|
6,823
|
|
60
|
|
6,883
|
|
|
|
|
|
|
|
|
|
|
||||||
Provisions
|
|
33
|
|
—
|
|
33
|
|
|
35
|
|
—
|
|
35
|
|
Long-term debt
|
|
15,330
|
|
—
|
|
15,330
|
|
|
12,692
|
|
—
|
|
12,692
|
|
Derivative instruments
|
|
118
|
|
—
|
|
118
|
|
|
147
|
|
—
|
|
147
|
|
Other long-term liabilities
|
|
562
|
|
—
|
|
562
|
|
|
613
|
|
—
|
|
613
|
|
Deferred tax liabilities
|
|
1,917
|
|
368
|
|
2,285
|
|
|
2,206
|
|
418
|
|
2,624
|
|
Total liabilities
|
|
23,073
|
|
454
|
|
23,527
|
|
|
22,516
|
|
478
|
|
22,994
|
|
|
|
|
|
|
|
|
|
|
||||||
Shareholders' equity
|
|
5,269
|
|
1,015
|
|
6,284
|
|
|
6,347
|
|
1,149
|
|
7,496
|
|
|
|
|
|
|
|
|
|
|
||||||
Total liabilities and shareholders' equity
|
|
28,342
|
|
1,469
|
|
29,811
|
|
|
28,863
|
|
1,627
|
|
30,490
|
|
1
|
Previously reported as "current portion of provisions".
|
2
|
Previously reported as "unearned revenue".
|
Rogers Communications Inc.
|
10
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Rogers Communications Inc.
|
11
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Financial instrument
|
IAS 39
|
IFRS 9
|
|
|
|
Financial assets
|
|
|
Cash and cash equivalents
|
Loans and receivables (amortized cost)
|
Amortized cost
|
Accounts receivable
|
Loans and receivables (amortized cost)
|
Amortized cost
|
Investments
|
Available-for-sale (FVTOCI)
1
|
FVTOCI with no reclassification to net income
|
|
|
|
Financial liabilities
|
|
|
Bank advances
|
Other financial liabilities (amortized cost)
|
Amortized cost
|
Short-term borrowings
|
Other financial liabilities (amortized cost)
2
|
Amortized cost
|
Accounts payable
|
Other financial liabilities (amortized cost)
|
Amortized cost
|
Accrued liabilities
|
Other financial liabilities (amortized cost)
|
Amortized cost
|
Long-term debt
|
Other financial liabilities (amortized cost)
2
|
Amortized cost
|
|
|
|
Derivatives
3
|
|
|
Debt derivatives
4
|
Held-for-trading (FVTOCI where subject to hedge accounting and FVTPL)
|
FVTOCI and FVTPL
|
Bond forwards
|
Held-for-trading (FVTOCI under hedge accounting)
|
FVTOCI
|
Expenditure derivatives
|
Held-for-trading (FVTOCI under hedge accounting)
|
FVTOCI
|
Equity derivatives
|
Held-for-trading (FVTPL)
5
|
FVTPL
|
1
|
Subsequently measured at fair value with changes recognized in other comprehensive income. The net change subsequent to initial recognition, in the case of investments, is reclassified into net income upon disposal of the investment or when the investment becomes impaired.
|
2
|
Subsequently measured at amortized cost using the effective interest method.
|
3
|
The derivatives can be in an asset or liability position at a point in time historically or in the future. For derivatives designated as cash flow hedges for accounting purposes, the effective portion of the hedge is recognized in accumulated other comprehensive income and the ineffective portion of the hedge is recognized immediately into net income.
|
4
|
Debt derivatives related to our senior notes and debentures have been designated as hedges for accounting purposes and will be classified as FVTOCI.
Debt derivatives related to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes and will be classified as FVTPL.
|
5
|
Subsequent changes are offset against stock-based compensation expense or recovery in operating costs.
|
•
|
IFRS 16,
Leases
(effective January 1, 2019)
|
Rogers Communications Inc.
|
12
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Three months ended March 31, 2018
|
Note
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate items and eliminations
|
|
Consolidated
totals
|
|
(In millions of dollars)
|
|||||||||||
|
|
|
|
|
|
|
|||||
Revenue
|
|
2,191
|
|
969
|
|
532
|
|
(59
|
)
|
3,633
|
|
|
|
|
|
|
|
|
|||||
Operating costs
|
|
1,257
|
|
536
|
|
509
|
|
(7
|
)
|
2,295
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
934
|
|
433
|
|
23
|
|
(52
|
)
|
1,338
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
|
|
|
|
544
|
|
||||
Gain on disposition of property, plant and equipment
|
|
|
|
|
|
(11
|
)
|
||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
43
|
|
||||
Finance costs
|
7
|
|
|
|
|
219
|
|
||||
Other income
|
8
|
|
|
|
|
(23
|
)
|
||||
|
|
|
|
|
|
|
|||||
Income before income taxes
|
|
|
|
|
|
566
|
|
Three months ended March 31, 2017
|
Note
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate items and eliminations
|
|
Consolidated
totals
|
|
(In millions of dollars, restated, see note 2)
|
|||||||||||
|
|
|
|
|
|
|
|||||
Revenue
|
|
2,002
|
|
960
|
|
474
|
|
(64
|
)
|
3,372
|
|
|
|
|
|
|
|
|
|||||
Operating costs
|
|
1,173
|
|
544
|
|
504
|
|
(23
|
)
|
2,198
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
829
|
|
416
|
|
(30
|
)
|
(41
|
)
|
1,174
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
|
|
|
|
545
|
|
||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
28
|
|
||||
Finance costs
|
7
|
|
|
|
|
190
|
|
||||
Other income
|
8
|
|
|
|
|
(11
|
)
|
||||
|
|
|
|
|
|
|
|||||
Income before income taxes
|
|
|
|
|
|
422
|
|
1.
|
identify the contract with a customer;
|
2.
|
identify the performance obligations in the contract;
|
3.
|
determine the transaction price, which is the total consideration provided by the customer;
|
4.
|
allocate the transaction price among the performance obligations in the contact based on their relative fair values; and
|
5.
|
recognize revenue when the relevant criteria are met for each unit.
|
Rogers Communications Inc.
|
13
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
determining the transaction price of our contracts requires estimating the amount of revenue we expect to be entitled to for delivering the performance obligations within a contract; and
|
•
|
determining the stand-alone selling price of performance obligations and the allocation of the transaction price between performance obligations.
|
Rogers Communications Inc.
|
14
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(in millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Balance, beginning of period
|
1,233
|
|
1,077
|
|
Additions from new contracts with customers, net of terminations and renewals
|
353
|
|
272
|
|
Amortization of contract assets to accounts receivable
|
(284
|
)
|
(248
|
)
|
|
|
|
||
Balance, end of period
|
1,302
|
|
1,101
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Additions to deferred commission cost assets
|
74
|
|
72
|
|
Amortization recognized on deferred commission cost assets
|
(77
|
)
|
(72
|
)
|
Rogers Communications Inc.
|
15
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
|
2018
|
|
2017
|
|
(In millions of dollars)
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Wireless:
|
|
|
||
Service revenue
|
1,687
|
|
1,604
|
|
Equipment revenue
|
504
|
|
398
|
|
|
|
|
||
Total Wireless
|
2,191
|
|
2,002
|
|
|
|
|
||
Cable:
|
|
|
||
Internet
|
506
|
|
474
|
|
Television
|
365
|
|
375
|
|
Phone
|
96
|
|
106
|
|
Service revenue
|
967
|
|
955
|
|
Equipment revenue
|
2
|
|
5
|
|
|
|
|
||
Total Cable
|
969
|
|
960
|
|
|
|
|
||
Total Media
|
532
|
|
474
|
|
|
|
|
||
Corporate items and intercompany eliminations
|
(59
|
)
|
(64
|
)
|
|
|
|
||
Total revenue
|
3,633
|
|
3,372
|
|
|
Three months ended March 31
|
|
||
|
2018
|
|
2017
|
|
(In millions of dollars)
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Cost of equipment sales
|
566
|
|
451
|
|
Merchandise for resale
|
57
|
|
59
|
|
Other external purchases
|
1,179
|
|
1,203
|
|
Employee salaries, benefits, and stock-based compensation
|
493
|
|
485
|
|
|
|
|
||
Total operating costs
|
2,295
|
|
2,198
|
|
Rogers Communications Inc.
|
16
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
Note
|
2018
|
|
2017
|
|
|
|
|
|
||
Interest on borrowings
1
|
|
187
|
|
186
|
|
Interest on post-employment benefits liability
|
|
2
|
|
3
|
|
Loss on repayment of long-term debt
|
13
|
28
|
|
—
|
|
Loss (gain) on foreign exchange
|
|
8
|
|
(8
|
)
|
Change in fair value of derivative instruments
|
|
(5
|
)
|
8
|
|
Capitalized interest
|
|
(5
|
)
|
(4
|
)
|
Other
|
|
4
|
|
5
|
|
|
|
|
|
||
Total finance costs
|
|
219
|
|
190
|
|
1
|
Interest on borrowings includes interest on short-term borrowings and on long-term debt.
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Income from associates and joint ventures
|
(14
|
)
|
(18
|
)
|
Other investment (income) losses
|
(9
|
)
|
7
|
|
|
|
|
||
Total other income
|
(23
|
)
|
(11
|
)
|
|
Three months ended March 31
|
|
||
|
2018
|
|
2017
|
|
(In millions of dollars, except per share amounts)
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Numerator (basic) - Net income for the period
|
425
|
|
310
|
|
|
|
|
||
Denominator - Number of shares (in millions):
|
|
|
||
Weighted average number of shares outstanding - basic
|
515
|
|
515
|
|
Effect of dilutive securities (in millions):
|
|
|
||
Employee stock options and restricted share units
|
1
|
|
2
|
|
|
|
|
||
Weighted average number of shares outstanding - diluted
|
516
|
|
517
|
|
|
|
|
||
Earnings per share
|
|
|
||
Basic
|
$0.83
|
$0.60
|
||
Diluted
|
$0.80
|
$0.60
|
Rogers Communications Inc.
|
17
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2018
|
|
||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Commercial paper program
|
|
|
|
|||
Debt derivatives entered
|
2,220
|
|
1.26
|
|
2,794
|
|
Debt derivatives settled
|
2,890
|
|
1.26
|
|
3,653
|
|
Net cash paid
|
|
|
(16
|
)
|
|
Three months ended March 31, 2017
|
|
||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Credit facilities
|
|
|
|
|||
Debt derivatives entered
|
875
|
|
1.33
|
|
1,165
|
|
Debt derivatives settled
|
825
|
|
1.32
|
|
1,092
|
|
Net cash paid
|
|
|
(3
|
)
|
||
|
|
|
|
|||
Commercial paper program
|
|
|
|
|||
Debt derivatives entered
|
200
|
|
1.33
|
|
266
|
|
Rogers Communications Inc.
|
18
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2018
|
|
||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Expenditure derivatives entered
|
600
|
|
1.23
|
|
740
|
|
Expenditure derivatives settled
|
210
|
|
1.30
|
|
273
|
|
|
Three months ended March 31, 2017
|
|
||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|||
Expenditure derivatives entered
|
120
|
|
1.29
|
|
155
|
|
Expenditure derivatives settled
|
225
|
|
1.33
|
|
300
|
|
Rogers Communications Inc.
|
19
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
financial assets and financial liabilities in Level 1 are valued by referring to quoted prices in active markets for identical assets and liabilities;
|
•
|
financial assets and financial liabilities in Level 2 are valued using inputs based on observable market data, either directly or indirectly, other than the quoted prices; and
|
•
|
Level 3 valuations are based on inputs that are not based on observable market data.
|
|
Carrying value
|
|
Fair value (Level 1)
|
|
Fair value (Level 2)
|
|
||||||
|
As at
Mar. 31 |
|
As at
Dec. 31 |
|
As at
Mar. 31 |
|
As at
Dec. 31 |
|
As at
Mar. 31 |
|
As at
Dec. 31 |
|
(In millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Financial assets
|
|
|
|
|
|
|
||||||
Investments, measured at fair value:
|
|
|
|
|
|
|
||||||
Investments in publicly traded companies
|
1,163
|
|
1,465
|
|
1,163
|
|
1,465
|
|
—
|
|
—
|
|
Derivatives:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
1,339
|
|
1,301
|
|
—
|
|
—
|
|
1,339
|
|
1,301
|
|
Expenditure derivatives accounted for as cash flow hedges
|
42
|
|
5
|
|
—
|
|
—
|
|
42
|
|
5
|
|
Equity derivatives not accounted for as cash flow hedges
|
33
|
|
68
|
|
—
|
|
—
|
|
33
|
|
68
|
|
|
|
|
|
|
|
|
||||||
Total financial assets
|
2,577
|
|
2,839
|
|
1,163
|
|
1,465
|
|
1,414
|
|
1,374
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities
|
|
|
|
|
|
|
||||||
Derivatives:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
138
|
|
149
|
|
—
|
|
—
|
|
138
|
|
149
|
|
Debt derivatives not accounted for as hedges
|
1
|
|
23
|
|
—
|
|
—
|
|
1
|
|
23
|
|
Bond forwards accounted for as cash flow hedges
|
70
|
|
64
|
|
—
|
|
—
|
|
70
|
|
64
|
|
Expenditure derivatives accounted for as cash flow hedges
|
12
|
|
44
|
|
—
|
|
—
|
|
12
|
|
44
|
|
|
|
|
|
|
|
|
||||||
Total financial liabilities
|
221
|
|
280
|
|
—
|
|
—
|
|
221
|
|
280
|
|
|
As at March 31, 2018
|
|
As at December 31, 2017
|
|
||||
(In millions of dollars)
|
Carrying amount
|
|
Fair value
1
|
|
Carrying amount
|
|
Fair value
1
|
|
|
|
|
|
|
||||
Long-term debt (including current portion)
|
15,637
|
|
17,031
|
|
14,448
|
|
16,134
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Investments in:
|
|
|
||
Publicly traded companies
|
1,163
|
|
1,465
|
|
Private companies
|
168
|
|
167
|
|
Investments, measured at FVTOCI
|
1,331
|
|
1,632
|
|
Investments, associates and joint ventures
|
946
|
|
929
|
|
|
|
|
||
Total investments
|
2,277
|
|
2,561
|
|
Rogers Communications Inc.
|
20
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
97
|
|
935
|
|
|
|
|
||
Total short-term borrowings
|
747
|
|
1,585
|
|
|
|
Three months ended March 31, 2018
|
|
|
|
Three months ended March 31, 2017
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from US commercial paper
|
2,220
|
|
1.26
|
|
2,794
|
|
|
200
|
|
1.33
|
|
266
|
|
Repayment of US commercial paper
|
(2,894
|
)
|
1.26
|
|
(3,642
|
)
|
|
—
|
|
—
|
|
—
|
|
Net (repayment of) proceeds received from US commercial paper
|
(674
|
)
|
1.26
|
|
(848
|
)
|
|
200
|
|
1.33
|
|
266
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
250
|
|
||||
Repayment of accounts receivable securitization
|
|
|
—
|
|
|
|
|
(180
|
)
|
||||
Net proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
70
|
|
||||
|
|
|
|
|
|
|
|
||||||
Net (repayment of) proceeds received on short-term borrowings
|
|
|
(848
|
)
|
|
|
|
336
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Trade accounts receivable sold to buyer as security
|
1,294
|
|
1,355
|
|
Short-term borrowings from buyer
|
(650
|
)
|
(650
|
)
|
|
|
|
||
Overcollateralization
|
644
|
|
705
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Accounts receivable securitization program, beginning of period
|
650
|
|
800
|
|
Net proceeds received from accounts receivable securitization
|
—
|
|
70
|
|
|
|
|
||
Accounts receivable securitization program, end of period
|
650
|
|
870
|
|
Rogers Communications Inc.
|
21
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended March 31, 2018
|
|
|
|
Three months ended March 31, 2017
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
US commercial paper program, beginning of period
|
746
|
|
1.25
|
|
935
|
|
|
—
|
|
—
|
|
—
|
|
Net (repayment of) proceeds received from US commercial paper
|
(674
|
)
|
1.26
|
|
(848
|
)
|
|
200
|
|
1.33
|
|
266
|
|
Discounts on issuance
1
|
3
|
|
1.33
|
|
4
|
|
|
—
|
|
—
|
|
—
|
|
Loss on foreign exchange
1
|
|
|
6
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program, end of period
|
75
|
|
1.29
|
|
97
|
|
|
200
|
|
1.33
|
|
266
|
|
|
|
|
Principal
amount
|
|
Interest
rate
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars, except interest rates)
|
Due date
|
|
2018
|
|
2017
|
|
||||
|
|
|
|
|
|
|
||||
Senior notes
|
2018
|
US
|
1,400
|
|
6.800
|
%
|
1,805
|
|
1,756
|
|
Senior notes
|
2019
|
|
400
|
|
2.800
|
%
|
400
|
|
400
|
|
Senior notes
|
2019
|
|
500
|
|
5.380
|
%
|
500
|
|
500
|
|
Senior notes
|
2020
|
|
900
|
|
4.700
|
%
|
900
|
|
900
|
|
Senior notes
|
2021
|
|
1,450
|
|
5.340
|
%
|
1,450
|
|
1,450
|
|
Senior notes
|
2022
|
|
600
|
|
4.000
|
%
|
600
|
|
600
|
|
Senior notes
|
2023
|
US
|
500
|
|
3.000
|
%
|
645
|
|
627
|
|
Senior notes
|
2023
|
US
|
850
|
|
4.100
|
%
|
1,096
|
|
1,066
|
|
Senior notes
|
2024
|
|
600
|
|
4.000
|
%
|
600
|
|
600
|
|
Senior notes
|
2025
|
US
|
700
|
|
3.625
|
%
|
903
|
|
878
|
|
Senior notes
|
2026
|
US
|
500
|
|
2.900
|
%
|
645
|
|
627
|
|
Senior debentures
1
|
2032
|
US
|
200
|
|
8.750
|
%
|
258
|
|
251
|
|
Senior notes
|
2038
|
US
|
350
|
|
7.500
|
%
|
451
|
|
439
|
|
Senior notes
|
2039
|
|
500
|
|
6.680
|
%
|
500
|
|
500
|
|
Senior notes
|
2040
|
|
800
|
|
6.110
|
%
|
800
|
|
800
|
|
Senior notes
|
2041
|
|
400
|
|
6.560
|
%
|
400
|
|
400
|
|
Senior notes
|
2043
|
US
|
500
|
|
4.500
|
%
|
645
|
|
627
|
|
Senior notes
|
2043
|
US
|
650
|
|
5.450
|
%
|
838
|
|
816
|
|
Senior notes
|
2044
|
US
|
1,050
|
|
5.000
|
%
|
1,354
|
|
1,318
|
|
Senior notes
|
2048
|
US
|
750
|
|
4.300
|
%
|
967
|
|
—
|
|
|
|
|
|
|
15,757
|
|
14,555
|
|
||
Deferred transaction costs and discounts
|
|
|
|
|
(120
|
)
|
(107
|
)
|
||
Less current portion
|
|
|
|
|
(2,205
|
)
|
(1,756
|
)
|
||
|
|
|
|
|
|
|
||||
Total long-term debt
|
|
|
|
|
13,432
|
|
12,692
|
|
1
|
Senior debentures originally issued by Rogers Cable Inc. which are unsecured obligations of RCI and for which RCCI was an unsecured guarantor as at
March 31, 2018
and
December 31, 2017
.
|
Rogers Communications Inc.
|
22
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2018
|
|
|
Three months ended March 31, 2017
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit facility borrowings (Cdn$)
|
|
|
—
|
|
|
|
|
700
|
|
||||
Credit facility borrowings (US$)
|
—
|
|
—
|
|
—
|
|
|
425
|
|
1.34
|
|
571
|
|
Total credit facility borrowings
|
|
|
—
|
|
|
|
|
1,271
|
|
||||
|
|
|
|
|
|
|
|
||||||
Credit facility repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(575
|
)
|
||||
Credit facility repayments (US$)
|
—
|
|
—
|
|
—
|
|
|
(375
|
)
|
1.33
|
|
(499
|
)
|
Total credit facility repayments
|
|
|
—
|
|
|
|
|
(1,074
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net borrowings under credit facilities
|
|
|
—
|
|
|
|
|
197
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note issuances (US$)
|
750
|
|
1.25
|
|
938
|
|
|
—
|
|
—
|
|
—
|
|
Total issuances of senior notes
|
|
|
938
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Total senior notes repayments
|
|
|
—
|
|
|
|
|
(250
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of senior notes
|
|
|
938
|
|
|
|
|
(250
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of long-term debt
|
|
|
938
|
|
|
|
|
(53
|
)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Long-term debt net of transaction costs, beginning of period
|
14,448
|
|
16,080
|
|
Net issuance (repayment) of long-term debt
|
938
|
|
(53
|
)
|
Loss (gain) on foreign exchange
|
263
|
|
(93
|
)
|
Deferred transaction costs incurred
|
(16
|
)
|
(3
|
)
|
Amortization of deferred transaction costs
|
4
|
|
3
|
|
|
|
|
||
Long-term debt net of transaction costs, end of period
|
15,637
|
|
15,934
|
|
|
Three months ended March 31, 2017
|
|
||
(In millions of dollars)
Maturity date
|
Notional
amount (US$) |
|
Notional
amount (Cdn$) |
|
|
|
|
||
March 2017
|
—
|
|
250
|
|
Rogers Communications Inc.
|
23
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Date declared
|
Date paid
|
Dividend per share (dollars)
|
|
|
|
|
|
January 24, 2018
|
April 3, 2018
|
0.48
|
|
|
|
0.48
|
|
|
|
|
|
January 26, 2017
|
April 3, 2017
|
0.48
|
|
April 18, 2017
|
July 4, 2017
|
0.48
|
|
August 17, 2017
|
October 3, 2017
|
0.48
|
|
October 19, 2017
|
January 2, 2018
|
0.48
|
|
|
|
1.92
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Stock options
|
(8
|
)
|
17
|
|
Restricted share units
|
2
|
|
16
|
|
Deferred share units
|
(6
|
)
|
20
|
|
Equity derivative effect, net of interest receipt
|
33
|
|
(40
|
)
|
|
|
|
||
Total stock-based compensation expense
|
21
|
|
13
|
|
Rogers Communications Inc.
|
24
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2018
|
||
(in number of units, except prices)
|
Number of options
|
|
Weighted average
exercise price |
|
|
|
|
Outstanding, beginning of period
|
2,637,890
|
|
$49.42
|
Granted
|
812,985
|
|
$58.45
|
Exercised
|
(78,740
|
)
|
$34.65
|
Forfeited
|
—
|
|
$0.00
|
|
|
|
|
Outstanding, end of period
|
3,372,135
|
|
$51.94
|
|
|
|
|
Exercisable, end of period
|
1,514,210
|
|
$45.11
|
|
Three months ended March 31, 2017
|
||
(in number of units, except prices)
|
Number of options
|
|
Weighted average
exercise price |
|
|
|
|
Outstanding, beginning of period
|
3,732,524
|
|
$43.70
|
Granted
|
503,905
|
|
$56.70
|
Exercised
|
(660,148
|
)
|
$42.48
|
Forfeited
|
(97,642
|
)
|
$49.95
|
|
|
|
|
Outstanding, end of period
|
3,478,639
|
|
$45.75
|
|
|
|
|
Exercisable, end of period
|
1,771,215
|
|
$41.87
|
|
Three months ended March 31
|
|
||
(in number of units)
|
2018
|
|
2017
|
|
|
|
|
||
Outstanding, beginning of period
|
1,811,845
|
|
2,237,085
|
|
Granted and reinvested dividends
|
947,084
|
|
547,562
|
|
Exercised
|
(438,401
|
)
|
(870,532
|
)
|
Forfeited
|
(38,713
|
)
|
(99,580
|
)
|
|
|
|
||
Outstanding, end of period
|
2,281,815
|
|
1,814,535
|
|
Rogers Communications Inc.
|
25
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(in number of units)
|
2018
|
|
2017
|
|
|
|
|
||
Outstanding, beginning of period
|
2,327,647
|
|
2,396,458
|
|
Granted and reinvested dividends
|
65,429
|
|
647,257
|
|
Exercised
|
(192,464
|
)
|
(87,505
|
)
|
Forfeited
|
(28,821
|
)
|
(94,337
|
)
|
|
|
|
||
Outstanding, end of period
|
2,171,791
|
|
2,861,873
|
|
•
|
the non-executive chairman of a law firm that provides a portion of our legal services; and
|
•
|
the chair of the board of a company that provides printing services to the Company.
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Printing and legal services
|
4
|
|
7
|
|
Rogers Communications Inc.
|
26
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Accounts receivable
|
155
|
|
202
|
|
Inventories
|
79
|
|
19
|
|
Other current assets
|
(22
|
)
|
(110
|
)
|
Accounts payable and accrued liabilities
|
(261
|
)
|
(365
|
)
|
Contract and other liabilities
|
28
|
|
79
|
|
|
|
|
||
Total change in non-cash operating working capital items
|
(21
|
)
|
(175
|
)
|
Rogers Communications Inc.
|
27
|
First Quarter 2018
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Capital expenditures before proceeds on disposition
|
620
|
|
486
|
|
Proceeds on disposition
|
(15
|
)
|
—
|
|
|
|
|
||
Capital expenditures
|
605
|
|
486
|
|
Rogers Communications Inc.
|
28
|
First Quarter 2018
|
|
Exhibit 99.3
|
•
|
Total service revenue and adjusted EBITDA growth of
5%
and
14%
, respectively, under new IFRS accounting rules (or
6%
and
11%
, respectively, under prior accounting basis)
|
•
|
Strong financial and subscriber performance in Wireless
|
•
|
Service revenue and adjusted EBITDA growth of
5%
and
13%
, respectively, and adjusted EBITDA margin expansion of
120
basis points under new IFRS accounting rules (or
7%
and
9%
, respectively, and 80 basis points under prior accounting basis)
|
•
|
Postpaid net additions of
95,000
, up
35,000
and the highest Q1 postpaid net additions in nine years
|
•
|
Postpaid churn of
1.08%
, improved 2 basis points and the best Q1 postpaid churn rate in fifteen years
|
•
|
Cable revenue and adjusted EBITDA growth of
1%
and
4%
, respectively
|
•
|
Cable adjusted EBITDA margin expansion of
140
basis points
|
•
|
Continued strong Internet revenue growth of
7%
|
•
|
Ignite TV offered to our full employee base of 15,000 in our Cable footprint in Ontario as we prepare for a commercial launch later this year
|
|
Three months ended March 31
|
|
Three months ended March 31
|
||||||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||||
(In millions of Canadian dollars, except per share amounts, unaudited)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
2018
|
|
2017
|
|
% Chg
|
||||
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
3,633
|
|
3,372
|
|
8
|
|
3,540
|
|
3,338
|
|
6
|
||||
Total service revenue
3
|
3,127
|
|
2,969
|
|
5
|
|
3,410
|
|
3,214
|
|
6
|
||||
Adjusted EBITDA
4
|
1,338
|
|
1,174
|
|
14
|
|
1,281
|
|
1,153
|
|
11
|
||||
Net income
|
425
|
|
310
|
|
37
|
|
383
|
|
294
|
|
30
|
||||
Adjusted net income
4
|
477
|
|
330
|
|
45
|
|
435
|
|
314
|
|
39
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$0.83
|
|
|
$0.60
|
|
38
|
|
|
$0.74
|
|
|
$0.57
|
|
30
|
Adjusted basic earnings per share
4
|
|
$0.93
|
|
|
$0.64
|
|
45
|
|
|
$0.84
|
|
|
$0.61
|
|
38
|
|
|
|
|
|
|
|
|
||||||||
Cash provided by operating activities
|
885
|
|
596
|
|
48
|
|
885
|
|
596
|
|
48
|
||||
Free cash flow
4
|
384
|
|
325
|
|
18
|
|
384
|
|
325
|
|
18
|
1
|
2017 reported figures have been restated applying the new revenue recognition standard, IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Calculated consistently with our previous revenue recognition accounting policies. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
As defined. See "Key Performance Indicators".
|
4
|
As defined. See "Non-GAAP Measures". These measures should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies.
|
Rogers Communications Inc.
|
1
|
First Quarter 2018
|
Rogers Communications Inc.
|
2
|
First Quarter 2018
|
•
|
April 19, 2018
|
•
|
4:30 p.m. Eastern Time
|
•
|
webcast available at investors.rogers.com
|
•
|
media are welcome to participate on a listen-only basis
|
Rogers Communications Inc.
|
3
|
First Quarter 2018
|
Segment
|
Principal activities
|
Wireless
|
Wireless telecommunications operations for Canadian consumers and businesses.
|
Cable
|
Cable telecommunications operations, including Internet, television, and telephony (phone) services for Canadian consumers and businesses, and network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector, and carrier wholesale markets.
|
Media
|
A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, digital media, and publishing.
|
Rogers Communications Inc.
|
4
|
First Quarter 2018
|
Rogers Communications Inc.
|
5
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||||||
(In millions of dollars, except margins and per share amounts)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
|
2018
|
|
2017
|
|
% Chg
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||||
Wireless
|
2,191
|
|
2,002
|
|
9
|
|
|
2,098
|
|
1,968
|
|
7
|
|
||||
Cable
3
|
969
|
|
960
|
|
1
|
|
|
969
|
|
960
|
|
1
|
|
||||
Media
|
532
|
|
474
|
|
12
|
|
|
532
|
|
474
|
|
12
|
|
||||
Corporate items and intercompany eliminations
3
|
(59
|
)
|
(64
|
)
|
(8
|
)
|
|
(59
|
)
|
(64
|
)
|
(8
|
)
|
||||
Revenue
|
3,633
|
|
3,372
|
|
8
|
|
|
3,540
|
|
3,338
|
|
6
|
|
||||
Total service revenue
4
|
3,127
|
|
2,969
|
|
5
|
|
|
3,410
|
|
3,214
|
|
6
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
5
|
|
|
|
|
|
|
|
||||||||||
Wireless
|
934
|
|
829
|
|
13
|
|
|
877
|
|
808
|
|
9
|
|
||||
Cable
3
|
433
|
|
416
|
|
4
|
|
|
433
|
|
416
|
|
4
|
|
||||
Media
|
23
|
|
(30
|
)
|
177
|
|
|
23
|
|
(30
|
)
|
177
|
|
||||
Corporate items and intercompany eliminations
3
|
(52
|
)
|
(41
|
)
|
27
|
|
|
(52
|
)
|
(41
|
)
|
27
|
|
||||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
14
|
|
|
1,281
|
|
1,153
|
|
11
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA margin
5
|
36.8
|
%
|
34.8
|
%
|
2.0
|
pts
|
|
36.2
|
%
|
34.5
|
%
|
1.7
|
pts
|
||||
|
|
|
|
|
|
|
|
||||||||||
Net income
|
425
|
|
310
|
|
37
|
|
|
383
|
|
294
|
|
30
|
|
||||
Basic earnings per share
|
|
$0.83
|
|
|
$0.60
|
|
38
|
|
|
|
$0.74
|
|
|
$0.57
|
|
30
|
|
Diluted earnings per share
|
|
$0.80
|
|
|
$0.60
|
|
33
|
|
|
|
$0.72
|
|
|
$0.57
|
|
26
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income
5
|
477
|
|
330
|
|
45
|
|
|
435
|
|
314
|
|
39
|
|
||||
Adjusted basic earnings per share
5
|
|
$0.93
|
|
|
$0.64
|
|
45
|
|
|
|
$0.84
|
|
|
$0.61
|
|
38
|
|
Adjusted diluted earnings per share
5
|
|
$0.90
|
|
|
$0.64
|
|
41
|
|
|
|
$0.82
|
|
|
$0.61
|
|
34
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
605
|
|
486
|
|
24
|
|
|
605
|
|
486
|
|
24
|
|
||||
Cash provided by operating activities
|
885
|
|
596
|
|
48
|
|
|
885
|
|
596
|
|
48
|
|
||||
Free cash flow
5
|
384
|
|
325
|
|
18
|
|
|
384
|
|
325
|
|
18
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
These figures have been retrospectively amended as a result of our reportable segment realignment. See "Reportable Segments".
|
4
|
As defined. See "Key Performance Indicators".
|
5
|
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
Rogers Communications Inc.
|
6
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||||||
(In millions of dollars, except margins)
|
2018
|
|
2017 (restated)
1
|
|
% Chg
|
|
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Service revenue
|
1,687
|
|
1,604
|
|
5
|
|
|
1,970
|
|
1,849
|
|
7
|
|
Equipment revenue
|
504
|
|
398
|
|
27
|
|
|
128
|
|
119
|
|
8
|
|
Revenue
|
2,191
|
|
2,002
|
|
9
|
|
|
2,098
|
|
1,968
|
|
7
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of equipment
|
561
|
|
447
|
|
26
|
|
|
550
|
|
456
|
|
21
|
|
Other operating expenses
3
|
696
|
|
726
|
|
(4
|
)
|
|
671
|
|
704
|
|
(5
|
)
|
Operating expenses
|
1,257
|
|
1,173
|
|
7
|
|
|
1,221
|
|
1,160
|
|
5
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
934
|
|
829
|
|
13
|
|
|
877
|
|
808
|
|
9
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
4
|
42.6
|
%
|
41.4
|
%
|
1.2
|
pts
|
|
44.5
|
%
|
43.7
|
%
|
0.8
|
pts
|
Capital expenditures
|
260
|
|
160
|
|
63
|
|
|
260
|
|
160
|
|
63
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
Other operating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
4
|
Adjusted EBITDA margin under IFRS 15 is calculated using total Wireless revenue. Under the prior accounting basis, adjusted EBITDA margin is calculated using Wireless service revenue.
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
|||||||||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
|||||||||||||
(In thousands, except churn, blended ABPU, and blended ARPU)
|
2018
|
|
2017
|
|
Chg
|
|
|
2018
|
|
2017
|
|
Chg
|
|
|||
|
|
|
|
|
|
|
|
|||||||||
Postpaid
|
|
|
|
|
|
|
|
|||||||||
Gross additions
|
377
|
|
343
|
|
34
|
|
|
377
|
|
343
|
|
34
|
|
|||
Net additions
|
95
|
|
60
|
|
35
|
|
|
95
|
|
60
|
|
35
|
|
|||
Total postpaid subscribers
3
|
8,799
|
|
8,617
|
|
182
|
|
|
8,799
|
|
8,617
|
|
182
|
|
|||
Churn (monthly)
|
1.08
|
%
|
1.10
|
%
|
(0.02
|
pts)
|
|
1.08
|
%
|
1.10
|
%
|
(0.02
|
pts)
|
|||
Prepaid
|
|
|
|
|
|
|
|
|||||||||
Gross additions
|
163
|
|
150
|
|
13
|
|
|
163
|
|
150
|
|
13
|
|
|||
Net losses
|
(60
|
)
|
(42
|
)
|
(18
|
)
|
|
(60
|
)
|
(42
|
)
|
(18
|
)
|
|||
Total prepaid subscribers
3
|
1,718
|
|
1,675
|
|
43
|
|
|
1,718
|
|
1,675
|
|
43
|
|
|||
Churn (monthly)
|
4.24
|
%
|
3.74
|
%
|
0.50
|
pts
|
|
4.24
|
%
|
3.74
|
%
|
0.50
|
pts
|
|||
Blended ABPU (monthly)
|
|
$62.67
|
|
$59.96
|
|
$2.71
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
||
Blended ARPU (monthly)
4
|
|
$53.68
|
|
$52.03
|
|
$1.65
|
|
|
|
$62.67
|
|
|
$59.96
|
|
$2.71
|
|
1
|
Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. Effective January 1, 2018, in conjunction with our transition to IFRS 15, we commenced reporting blended ABPU as a new key performance indicator. See "Key Performance Indicators".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates" and "Non-GAAP Measures".
|
3
|
As at the end of period.
|
4
|
Blended ARPU calculated under "With adoption of IFRS 15" has been restated for 2017 using revenue recognition policies in accordance with IFRS 15.
|
Rogers Communications Inc.
|
7
|
First Quarter 2018
|
•
|
higher blended ARPU, primarily as a result of the increased mix of subscribers on higher-rate plans from our various brands
; and
|
•
|
larger postpaid and prepaid subscriber bases.
|
•
|
higher postpaid gross additions; and
|
•
|
an increase in device upgrades by existing subscribers.
|
•
|
a continued shift in the product mix of device sales towards higher-cost smartphones;
|
•
|
the increase in device upgrades by existing subscribers as discussed above; and
|
•
|
higher postpaid gross additions.
|
Rogers Communications Inc.
|
8
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2018
|
|
2017
(restated)
1
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
|
|
|
|||
Internet
|
506
|
|
474
|
|
7
|
|
Television
|
365
|
|
375
|
|
(3
|
)
|
Phone
|
96
|
|
106
|
|
(9
|
)
|
Service revenue
|
967
|
|
955
|
|
1
|
|
Equipment revenue
|
2
|
|
5
|
|
(60
|
)
|
Revenue
|
969
|
|
960
|
|
1
|
|
|
|
|
|
|||
Operating expenses
|
|
|
|
|||
Cost of equipment
|
5
|
|
4
|
|
25
|
|
Other operating expenses
2
|
531
|
|
540
|
|
(2
|
)
|
Operating expenses
|
536
|
|
544
|
|
(1
|
)
|
|
|
|
|
|||
Adjusted EBITDA
|
433
|
|
416
|
|
4
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
44.7
|
%
|
43.3
|
%
|
1.4
|
pts
|
Capital expenditures
|
297
|
|
266
|
|
12
|
|
1
|
Effective January 1, 2018 and on a retrospective basis, we realigned our reportable segments and related financial results. See "Reportable Segments".
|
2
|
Other operating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
|
Three months ended March 31
|
|
||||
(In thousands)
|
2018
|
|
2017
(restated)
|
|
Chg
|
|
|
|
|
|
|||
Internet
2
|
|
|
|
|||
Net additions
|
26
|
|
33
|
|
(7
|
)
|
Total Internet subscribers
3
|
2,347
|
|
2,259
|
|
88
|
|
Television
|
|
|
|
|||
Net losses
|
(12
|
)
|
(24
|
)
|
12
|
|
Total Television subscribers
3
|
1,728
|
|
1,796
|
|
(68
|
)
|
Phone
|
|
|
|
|||
Net additions
|
9
|
|
2
|
|
7
|
|
Total Phone subscribers
3
|
1,117
|
|
1,096
|
|
21
|
|
|
|
|
|
|||
Homes passed
3
|
4,327
|
|
4,255
|
|
72
|
|
Total service units
4
|
|
|
|
|||
Net additions
|
23
|
|
11
|
|
12
|
|
Total service units
3
|
5,192
|
|
5,151
|
|
41
|
|
1
|
Subscriber counts are key performance indicators. See "Key Performance Indicators".
|
2
|
Effective January 1, 2018, and on a retrospective basis, our Internet subscriber results include Smart Home Monitoring subscribers.
|
3
|
As at end of period.
|
4
|
Includes Internet, Television, and Phone.
|
•
|
the movement of Internet customers to higher speed and usage tiers;
|
•
|
the impact of service pricing changes; and
|
•
|
a larger Internet subscriber base; partially offset by
|
•
|
a lower subscriber base for our Television products.
|
Rogers Communications Inc.
|
9
|
First Quarter 2018
|
•
|
general movement of customers to higher speed and usage tiers of our Internet offerings, with
56%
of our residential Internet base on plans of 100 megabits per second or higher (
2017
-
48%
);
|
•
|
a larger Internet subscriber base; and
|
•
|
the impact of Internet service pricing changes; partially offset by
|
•
|
promotional pricing provided to subscribers.
|
•
|
the decline in Television subscribers over the past year; partially offset by
|
•
|
the impact of Television service pricing changes, net of promotional pricing provided to subscribers.
|
•
|
relative shifts in product mix to higher-margin Internet offerings from conventional Television broadcasting; and
|
•
|
various cost efficiencies and productivity initiatives.
|
Rogers Communications Inc.
|
10
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2018
|
|
2017
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
532
|
|
474
|
|
12
|
|
Operating expenses
1
|
509
|
|
504
|
|
1
|
|
|
|
|
|
|||
Adjusted EBITDA
|
23
|
|
(30
|
)
|
177
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
4.3
|
%
|
(6.3
|
)%
|
10.6
|
pts
|
Capital expenditures
|
15
|
|
13
|
|
15
|
|
1
|
Operating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
•
|
a higher distribution to the Toronto Blue Jays from Major League Baseball and the earlier start to the regular season this year; and
|
•
|
higher Sportsnet subscription revenue.
|
•
|
higher Toronto Blue Jays costs, driven by the earlier start to the regular season this year; and
|
•
|
higher programming costs.
|
Rogers Communications Inc.
|
11
|
First Quarter 2018
|
|
Three months ended March 31
|
||||
(In millions of dollars, except capital intensity)
|
2018
|
|
2017
(restated)
1
|
|
% Chg
|
|
|
|
|
||
Capital expenditures
2
|
|
|
|
||
Wireless
|
260
|
|
160
|
|
63
|
Cable
|
297
|
|
266
|
|
12
|
Media
|
15
|
|
13
|
|
15
|
Corporate
|
48
|
|
47
|
|
2
|
|
|
|
|
||
Capital expenditures before proceeds on disposition
|
620
|
|
486
|
|
28
|
Proceeds on disposition
|
(15
|
)
|
—
|
|
n/m
|
|
|
|
|
||
Capital expenditures
2
|
605
|
|
486
|
|
24
|
|
|
|
|
||
Capital intensity
3
|
16.7
|
%
|
14.4
|
%
|
2.3
|
1
|
Effective January 1, 2018 and on a retrospective basis, we realigned our reportable segments and related financial results. As a result, certain figures have been amended for comparative purposes. See "Reportable Segments".
|
2
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences.
|
3
|
As defined. See "Key Performance Indicators".
|
Rogers Communications Inc.
|
12
|
First Quarter 2018
|
•
|
IFRS 2,
Share-based payment
|
•
|
IFRIC 22,
Foreign currency transactions and advance consideration
|
Rogers Communications Inc.
|
13
|
First Quarter 2018
|
|
|
Three months ended March 31, 2017
|
|
||||
(In millions of dollars)
|
Reference
|
Prior Accounting Basis
1
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|||
Consolidated
|
|
|
|
|
|||
Total revenue
|
i, iii
|
3,338
|
|
34
|
|
3,372
|
|
Total service revenue
2
|
i
|
3,214
|
|
(245
|
)
|
2,969
|
|
Adjusted EBITDA
3
|
|
1,153
|
|
21
|
|
1,174
|
|
|
|
|
|
|
|||
Net income
|
|
294
|
|
16
|
|
310
|
|
Adjusted net income
3
|
|
314
|
|
16
|
|
330
|
|
|
|
|
|
|
|||
Wireless
|
|
|
|
|
|||
Service revenue
|
i
|
1,849
|
|
(245
|
)
|
1,604
|
|
Equipment revenue
|
i, iii
|
119
|
|
279
|
|
398
|
|
|
|
|
|
|
|||
Operating expenses
4
|
ii, iii
|
1,160
|
|
13
|
|
1,173
|
|
|
|
|
|
|
|||
Adjusted EBITDA
|
|
808
|
|
21
|
|
829
|
|
1
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Non-GAAP Measures".
|
3
|
Adjusted EBITDA and adjusted net income are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
4
|
Operating expenses have been retrospectively amended to include stock-based compensation. See "Reportable Segments" and "Non-GAAP Measures".
|
|
|
As at January 1, 2017
|
|
|
As at December 31, 2017
|
|
||||||||
(in millions of dollars)
|
Reference
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
i, ii, iii
|
28,342
|
|
1,469
|
|
29,811
|
|
|
28,863
|
|
1,627
|
|
30,490
|
|
Total liabilities
|
i, iii
|
23,073
|
|
454
|
|
23,527
|
|
|
22,516
|
|
478
|
|
22,994
|
|
Shareholders' equity
|
|
5,269
|
|
1,015
|
|
6,284
|
|
|
6,347
|
|
1,149
|
|
7,496
|
|
Rogers Communications Inc.
|
14
|
First Quarter 2018
|
Rogers Communications Inc.
|
15
|
First Quarter 2018
|
|
2017
|
|
2017
|
2018
|
||||||
(In millions of dollars, except percentages)
|
Prior Accounting Basis
|
Adjustments
|
|
With adoption of IFRS 15 (restated)
|
Guidance Ranges
1
|
|||||
|
|
|
|
|
|
|
||||
Consolidated Guidance
|
|
|
|
|
|
|
||||
Revenue
|
14,143
|
|
226
|
|
14,369
|
|
Increase of 3%
|
|
to
|
5%
|
Adjusted EBITDA
|
5,318
|
|
184
|
|
5,502
|
|
Increase of 5%
|
|
to
|
7%
|
Capital expenditures
2
|
2,436
|
|
—
|
|
2,436
|
|
2,650
|
|
to
|
2,850
|
Free cash flow
|
1,685
|
|
—
|
|
1,685
|
|
Increase of 3%
|
|
to
|
5%
|
1
|
Guidance ranges presented as percentages reflect increases over full-year restated 2017 actual results.
|
2
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences.
|
•
|
continued intense competition in all segments in which we operate, consistent with our experience during the full-year 2017;
|
•
|
a substantial portion of our US dollar-denominated expenditures for 2018 is hedged at an average exchange rate of $1.30/US$;
|
•
|
key interest rates remain relatively stable throughout 2018;
|
•
|
no significant additional legal or regulatory developments, shifts in economic conditions, or macro changes in the competitive environment affecting our business activities. We note that regulatory decisions expected during 2018 could materially alter underlying assumptions around our 2018 Wireless, Cable, and/or Media results in the current and future years, the impacts of which are currently unknown and not factored into our guidance;
|
•
|
Wireless customers continue to adopt, and upgrade to, higher-value smartphones at similar rates in 2018 compared to 2017 and a similar proportion of customers remain on term contracts;
|
•
|
overall wireless market penetration in Canada grows in 2018 at a similar rate as in 2017;
|
•
|
our relative market share in Wireless and Cable is not negatively impacted by changing competitive dynamics;
|
•
|
continued subscriber growth in Wireless and Cable Internet; a decline in Cable Television subscribers; and a relatively stable Phone subscriber base;
|
•
|
Ignite TV launches in 2018;
|
•
|
in Media, continued growth in sports and declines in certain traditional media businesses; and
|
•
|
with respect to the increase in capital expenditures:
|
•
|
we continue to invest appropriately to ensure we have competitive wireless and cable networks through (i) building a 4.5G to 5G wireless network and (ii) upgrading our hybrid fibre-coaxial network to lower the number of homes passed per node, utilize the latest technologies, and deliver an even more reliable customer experience; and
|
•
|
we continue to make expenditures related to the launch of Ignite TV in 2018.
|
Rogers Communications Inc.
|
16
|
First Quarter 2018
|
•
|
subscriber counts;
|
•
|
Wireless;
|
•
|
Cable; and
|
•
|
homes passed (Cable);
|
•
|
subscriber churn (churn);
|
•
|
blended average billings per user (ABPU);
|
•
|
blended average revenue per user (ARPU);
|
•
|
capital intensity; and
|
•
|
total service revenue.
|
•
|
A wireless subscriber is represented by each identifiable telephone number.
|
•
|
We report wireless subscribers in two categories: postpaid and prepaid. Postpaid and prepaid include voice-only subscribers, data-only subscribers, and subscribers with service plans integrating both voice and data.
|
•
|
Usage and overage charges for postpaid subscribers are billed a month in arrears. Prepaid subscribers cannot incur usage and/or overage charges in excess of their plan limits or account balance.
|
•
|
Wireless prepaid subscribers are considered active for a period of 180 days from the date of their last revenue-generating usage.
|
•
|
Cable Television and Internet subscribers are represented by a dwelling unit; Cable Phone subscribers are represented by line counts.
|
•
|
When there is more than one unit in a single dwelling, such as an apartment building, each tenant with cable service is counted as an individual subscriber, whether the service is invoiced separately or included in the tenant's rent. Institutional units, such as hospitals or hotels, are each considered one subscriber.
|
•
|
Cable Television, Internet, and Phone subscribers include only those subscribers who have service installed and operating, and who are being billed accordingly.
|
•
|
Subscriber counts exclude certain enterprise services delivered over our fibre network and data centre infrastructure, and circuit-switched local and long distance voice services and legacy data services where access is delivered using leased third-party network elements and tariffed ILEC services.
|
Rogers Communications Inc.
|
17
|
First Quarter 2018
|
Rogers Communications Inc.
|
18
|
First Quarter 2018
|
Non-GAAP measure |
Why we use it |
How we calculate it |
Most
comparable IFRS financial measure |
||
Adjusted EBITDA
Adjusted EBITDA margin |
●
|
|
To evaluate the performance of our businesses, and when making decisions about the ongoing operations of the business and our ability to generate cash flows.
|
Adjusted EBITDA:
Net income add (deduct) income tax expense (recovery); finance costs; depreciation and amortization; other expense (income); restructuring, acquisition and other; and loss (gain) on disposition of property, plant and equipment. Adjusted EBITDA margin: Adjusted EBITDA divided by revenue. |
Net income
|
●
|
|
We believe that certain investors and analysts use adjusted EBITDA to measure our ability to service debt and to meet other payment obligations.
|
|||
●
|
|
We also use it as one component in determining short-term incentive compensation for all management employees.
|
|||
Adjusted net
income Adjusted basic and diluted earnings per share |
●
|
|
To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.
|
Adjusted net income:
Net income add (deduct) restructuring, acquisition and other; loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; and income tax adjustments on these items, including adjustments as a result of legislative changes. Adjusted basic and diluted earnings per share: Adjusted net income divided by basic and diluted weighted average shares outstanding. |
Net income
Basic and diluted earnings per share |
Free cash flow
|
●
|
|
To show how much cash we have available to repay debt and reinvest in our company, which is an important indicator of our financial strength and performance.
|
Adjusted EBITDA
deduct capital expenditures; interest on borrowings net of capitalized interest; net change in contract asset and deferred commission cost asset balances; and cash income taxes. |
Cash provided
by operating activities |
●
|
|
We believe that some investors and analysts use free cash flow to value a business and its underlying assets.
|
|||
Adjusted net
debt |
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Total long-term debt
add (deduct) current portion of long-term debt; deferred transaction costs and discounts; net debt derivative (assets) liabilities; credit risk adjustment related to net debt derivatives; bank advances (cash and cash equivalents); and short-term borrowings. |
Long-term
debt |
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
Rogers Communications Inc.
|
19
|
First Quarter 2018
|
Non-GAAP measure |
Why we use it |
How we calculate it |
Most
comparable IFRS financial measure |
||
Debt leverage ratio
|
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Adjusted net debt (defined above)
divided by 12-month trailing adjusted EBITDA (defined above). |
Long-term debt
divided by net income |
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Net income
|
425
|
|
310
|
|
|
383
|
|
294
|
|
Add:
|
|
|
|
|
|
||||
Income tax expense
|
141
|
|
112
|
|
|
126
|
|
107
|
|
Finance costs
|
219
|
|
190
|
|
|
219
|
|
190
|
|
Depreciation and amortization
|
544
|
|
545
|
|
|
544
|
|
545
|
|
|
|
|
|
|
|
||||
EBITDA
|
1,329
|
|
1,157
|
|
|
1,272
|
|
1,136
|
|
Add (deduct):
|
|
|
|
|
|
||||
Other income
|
(23
|
)
|
(11
|
)
|
|
(23
|
)
|
(11
|
)
|
Restructuring, acquisition and other
|
43
|
|
28
|
|
|
43
|
|
28
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
|
(11
|
)
|
—
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
|
1,281
|
|
1,153
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars, except margins)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
|
1,281
|
|
1,153
|
|
Divided by: total revenue
|
3,633
|
|
3,372
|
|
|
3,540
|
|
3,338
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA margin
|
36.8
|
%
|
34.8
|
%
|
|
36.2
|
%
|
34.5
|
%
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
Rogers Communications Inc.
|
20
|
First Quarter 2018
|
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||
|
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
||||||
(In millions of dollars)
|
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Net income
|
425
|
|
310
|
|
|
383
|
|
294
|
|
Add (deduct):
|
|
|
|
|
|
||||
Restructuring, acquisition and other
|
43
|
|
28
|
|
|
43
|
|
28
|
|
Loss on repayment of long-term debt
|
28
|
|
—
|
|
|
28
|
|
—
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
|
(11
|
)
|
—
|
|
Income tax impact of above items
|
(8
|
)
|
(8
|
)
|
|
(8
|
)
|
(8
|
)
|
|
|
|
|
|
|
||||
Adjusted net income
|
477
|
|
330
|
|
|
435
|
|
314
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
Three months ended March 31
|
|
|
Three months ended March 31
|
|
||||||||
With adoption of IFRS 15
|
|
Prior Accounting Basis
2
|
|||||||||||
2018
|
|
2017
(restated)
1
|
|
|
2018
|
|
2017
|
|
|||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share:
|
|
|
|
|
|
||||||||
Adjusted net income
|
477
|
|
330
|
|
|
435
|
|
314
|
|
||||
Divided by:
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
515
|
|
515
|
|
|
515
|
|
515
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share
|
|
$0.93
|
|
|
$0.64
|
|
|
|
$0.84
|
|
|
$0.61
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share:
|
|
|
|
|
|
||||||||
Diluted adjusted net income
|
464
|
|
330
|
|
|
422
|
|
314
|
|
||||
Divided by:
|
|
|
|
|
|
||||||||
Diluted weighted average number of shares outstanding
|
516
|
|
517
|
|
|
516
|
|
517
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share
|
|
$0.90
|
|
|
$0.64
|
|
|
|
$0.82
|
|
|
$0.61
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
2
|
Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. See "Critical Accounting Policies and Estimates".
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Cash provided by operating activities
|
885
|
|
596
|
|
Add (deduct):
|
|
|
||
Capital expenditures
|
(605
|
)
|
(486
|
)
|
Interest on borrowings, net of capitalized interest
|
(182
|
)
|
(182
|
)
|
Restructuring, acquisition and other
|
43
|
|
28
|
|
Interest paid
|
238
|
|
238
|
|
Change in non-cash operating working capital items
|
21
|
|
175
|
|
Other adjustments
|
(16
|
)
|
(44
|
)
|
|
|
|
||
Free cash flow
|
384
|
|
325
|
|
Rogers Communications Inc.
|
21
|
First Quarter 2018
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Current portion of long-term debt
|
2,205
|
|
1,756
|
|
Long-term debt
|
13,432
|
|
12,692
|
|
Deferred transaction costs and discounts
|
120
|
|
107
|
|
|
15,757
|
|
14,555
|
|
Add (deduct):
|
|
|
||
Net debt derivative assets
|
(1,200
|
)
|
(1,129
|
)
|
Credit risk adjustment related to net debt derivative assets
|
(19
|
)
|
(17
|
)
|
Short-term borrowings
|
747
|
|
1,585
|
|
Bank advances
|
49
|
|
6
|
|
|
|
|
||
Adjusted net debt
|
15,334
|
|
15,000
|
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2018
|
|
2017
(restated)
1
|
|
|
|
|
||
Adjusted net debt
|
15,334
|
|
15,000
|
|
Divided by: trailing 12-month adjusted EBITDA
|
5,666
|
|
5,502
|
|
|
|
|
||
Debt leverage ratio
|
2.7
|
|
2.7
|
|
1
|
2017 reported figures have been restated applying IFRS 15. See "Critical Accounting Policies and Estimates".
|
Rogers Communications Inc.
|
22
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
2018
|
|
2017
|
|
|
|
|
||
Revenue
|
3,633
|
|
3,372
|
|
Service revenue and equipment revenue adjustments arising from timing of revenue recognition and transfer of control
|
(93
|
)
|
(34
|
)
|
|
|
|
||
Prior basis revenue
|
3,540
|
|
3,338
|
|
|
|
|
||
|
|
|
||
Adjusted EBITDA
|
1,338
|
|
1,174
|
|
Revenue changes as described above
|
(93
|
)
|
(34
|
)
|
Net change in deferred commission cost assets and other
|
36
|
|
13
|
|
|
|
|
||
Prior basis adjusted EBITDA
|
1,281
|
|
1,153
|
|
|
|
|
||
|
|
|
||
Income tax expense
|
141
|
|
112
|
|
Tax effect related to adjustments required under IFRS 15
|
(15
|
)
|
(5
|
)
|
|
|
|
||
Prior basis income tax expense
|
126
|
|
107
|
|
|
|
|
||
|
|
|
||
Net income
|
425
|
|
310
|
|
Adjustments required under IFRS 15
|
(42
|
)
|
(16
|
)
|
|
|
|
||
Prior basis net income
|
383
|
|
294
|
|
|
|
|
||
|
|
|
||
Prior basis basic earnings per share:
|
|
|
||
Prior basis net income
|
383
|
|
294
|
|
Divided by:
|
|
|
||
Weighted average number of shares outstanding
|
515
|
|
515
|
|
|
|
|
||
Prior basis basic earnings per share
|
$0.74
|
$0.57
|
||
|
|
|
||
Prior basis diluted earnings per share:
|
|
|
||
Prior basis net income
|
383
|
|
294
|
|
Divided by:
|
|
|
||
Diluted weighted average number of shares outstanding
|
516
|
|
517
|
|
|
|
|
||
Prior basis diluted earnings per share
|
$0.72
|
$0.57
|
Rogers Communications Inc.
|
23
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Wireless service revenue
|
1,687
|
|
1,604
|
|
Adjustments arising from timing of revenue recognition and classification required under IFRS 15
|
283
|
|
245
|
|
|
|
|
||
Prior basis Wireless service revenue
|
1,970
|
|
1,849
|
|
|
|
|
||
|
|
|
||
Wireless equipment revenue
|
504
|
|
398
|
|
Adjustments arising from timing of revenue recognition and classification required under IFRS 15
|
(376
|
)
|
(279
|
)
|
|
|
|
||
Prior basis Wireless equipment revenue
|
128
|
|
119
|
|
|
|
|
||
|
|
|
||
Wireless operating expenses
|
1,257
|
|
1,173
|
|
Net change in deferred commission cost assets and other
|
(36
|
)
|
(13
|
)
|
|
|
|
||
Prior basis Wireless operating expenses
|
1,221
|
|
1,160
|
|
|
|
|
||
Prior basis wireless adjusted EBITDA
|
877
|
|
808
|
|
Rogers Communications Inc.
|
24
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
|
2018
|
|
2017
|
|
|
|
(restated)
|
|
|
|
|
|
||
Revenue
|
3,633
|
|
3,372
|
|
|
|
|
||
Operating expenses:
|
|
|
||
Operating costs
|
2,295
|
|
2,198
|
|
Depreciation and amortization
|
544
|
|
545
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
Restructuring, acquisition and other
|
43
|
|
28
|
|
Finance costs
|
219
|
|
190
|
|
Other income
|
(23
|
)
|
(11
|
)
|
|
|
|
||
Income before income tax expense
|
566
|
|
422
|
|
Income tax expense
|
141
|
|
112
|
|
|
|
|
||
Net income for the period
|
425
|
|
310
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
$0.83
|
$0.60
|
||
Diluted
|
$0.80
|
$0.60
|
Rogers Communications Inc.
|
25
|
First Quarter 2018
|
|
As at
March 31 |
|
As at
December 31 |
|
As at
January 1 |
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
(restated)
|
|
(restated)
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Accounts receivable
|
1,900
|
|
2,035
|
|
1,944
|
|
Inventories
|
356
|
|
435
|
|
452
|
|
Current portion of contract assets
|
861
|
|
820
|
|
723
|
|
Other current assets
|
435
|
|
414
|
|
417
|
|
Current portion of derivative instruments
|
442
|
|
421
|
|
91
|
|
Total current assets
|
3,994
|
|
4,125
|
|
3,627
|
|
|
|
|
|
|||
Property, plant and equipment
|
11,227
|
|
11,143
|
|
10,749
|
|
Intangible assets
|
7,222
|
|
7,244
|
|
7,130
|
|
Investments
|
2,277
|
|
2,561
|
|
2,174
|
|
Derivative instruments
|
972
|
|
953
|
|
1,708
|
|
Contract assets
|
441
|
|
413
|
|
354
|
|
Other long-term assets
|
135
|
|
143
|
|
156
|
|
Deferred tax assets
|
3
|
|
3
|
|
8
|
|
Goodwill
|
3,905
|
|
3,905
|
|
3,905
|
|
|
|
|
|
|||
Total assets
|
30,176
|
|
30,490
|
|
29,811
|
|
|
|
|
|
|||
Liabilities and shareholders' equity
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Bank advances
|
49
|
|
6
|
|
71
|
|
Short-term borrowings
|
747
|
|
1,585
|
|
800
|
|
Accounts payable and accrued liabilities
|
2,516
|
|
2,931
|
|
2,783
|
|
Income tax payable
|
147
|
|
62
|
|
186
|
|
Other current liabilities
|
110
|
|
132
|
|
285
|
|
Current portion of contract liabilities
|
329
|
|
278
|
|
302
|
|
Current portion of long-term debt
|
2,205
|
|
1,756
|
|
750
|
|
Current portion of derivative instruments
|
85
|
|
133
|
|
22
|
|
Total current liabilities
|
6,188
|
|
6,883
|
|
5,199
|
|
|
|
|
|
|||
Provisions
|
36
|
|
35
|
|
33
|
|
Long-term debt
|
13,432
|
|
12,692
|
|
15,330
|
|
Derivative instruments
|
136
|
|
147
|
|
118
|
|
Other long-term liabilities
|
599
|
|
613
|
|
562
|
|
Deferred tax liabilities
|
2,517
|
|
2,624
|
|
2,285
|
|
Total liabilities
|
22,908
|
|
22,994
|
|
23,527
|
|
|
|
|
|
|||
Shareholders' equity
|
7,268
|
|
7,496
|
|
6,284
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
30,176
|
|
30,490
|
|
29,811
|
|
Rogers Communications Inc.
|
26
|
First Quarter 2018
|
|
Three months ended March 31
|
|
||
|
2018
|
|
2017
|
|
|
|
(restated)
|
|
|
Operating activities:
|
|
|
||
Net income for the period
|
425
|
|
310
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
||
Depreciation and amortization
|
544
|
|
545
|
|
Program rights amortization
|
14
|
|
20
|
|
Finance costs
|
219
|
|
190
|
|
Income tax expense
|
141
|
|
112
|
|
Post-employment benefits contributions, net of expense
|
17
|
|
6
|
|
Gain on disposition of property, plant and equipment
|
(11
|
)
|
—
|
|
Net change in contract asset balances
|
(69
|
)
|
(24
|
)
|
Other
|
(26
|
)
|
10
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
1,254
|
|
1,169
|
|
Change in non-cash operating working capital items
|
(21
|
)
|
(175
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
1,233
|
|
994
|
|
Income taxes paid
|
(110
|
)
|
(160
|
)
|
Interest paid
|
(238
|
)
|
(238
|
)
|
|
|
|
||
Cash provided by operating activities
|
885
|
|
596
|
|
|
|
|
||
Investing activities:
|
|
|
||
Capital expenditures
|
(605
|
)
|
(486
|
)
|
Additions to program rights
|
(6
|
)
|
(14
|
)
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
(138
|
)
|
(81
|
)
|
Other
|
10
|
|
(26
|
)
|
|
|
|
||
Cash used in investing activities
|
(739
|
)
|
(607
|
)
|
|
|
|
||
Financing activities:
|
|
|
||
Net (repayment) proceeds received on short-term borrowings
|
(848
|
)
|
336
|
|
Net issuance (repayment) of long-term debt
|
938
|
|
(53
|
)
|
Net payments on settlement of debt derivatives and forward contracts
|
(16
|
)
|
(3
|
)
|
Transaction costs incurred
|
(16
|
)
|
—
|
|
Dividends paid
|
(247
|
)
|
(247
|
)
|
|
|
|
||
Cash (used in) provided by financing activities
|
(189
|
)
|
33
|
|
|
|
|
||
Change in cash and cash equivalents
|
(43
|
)
|
22
|
|
Bank advances, beginning of period
|
(6
|
)
|
(71
|
)
|
|
|
|
||
Bank advances, end of period
|
(49
|
)
|
(49
|
)
|
Rogers Communications Inc.
|
27
|
First Quarter 2018
|
•
|
typically includes words like
could
,
expect
,
may
,
anticipate
,
assume
,
believe
,
intend
,
estimate
,
plan
,
project
,
guidance
,
outlook, target
, and similar expressions, although not all forward-looking information includes them;
|
•
|
includes conclusions, forecasts, and projections that are based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors, most of which are confidential and proprietary and that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
|
•
|
was approved by our management on the date of this earnings release.
|
•
|
revenue;
|
•
|
total service revenue;
|
•
|
adjusted EBITDA;
|
•
|
capital expenditures;
|
•
|
cash income tax payments;
|
•
|
free cash flow;
|
•
|
dividend payments;
|
•
|
the growth of new products and services;
|
•
|
expected growth in subscribers and the services to which they subscribe;
|
•
|
the cost of acquiring and retaining subscribers and deployment of new services;
|
•
|
continued cost reductions and efficiency improvements;
|
•
|
traction against our debt leverage ratio; and
|
•
|
all other statements that are not historical facts.
|
•
|
general economic and industry growth rates;
|
•
|
currency exchange rates and interest rates;
|
•
|
product pricing levels and competitive intensity;
|
•
|
subscriber growth;
|
•
|
pricing, usage, and churn rates;
|
•
|
changes in government regulation;
|
•
|
technology deployment;
|
•
|
availability of devices;
|
•
|
timing of new product launches;
|
•
|
content and equipment costs;
|
•
|
the integration of acquisitions; and
|
•
|
industry structure and stability.
|
•
|
regulatory changes;
|
•
|
technological changes;
|
•
|
economic conditions;
|
•
|
unanticipated changes in content or equipment costs;
|
•
|
changing conditions in the entertainment, information, and communications industries;
|
•
|
the integration of acquisitions;
|
•
|
litigation and tax matters;
|
•
|
the level of competitive intensity;
|
•
|
the emergence of new opportunities; and
|
•
|
new interpretations and new accounting standards from accounting standards bodies.
|
Rogers Communications Inc.
|
28
|
First Quarter 2018
|
Rogers Communications Inc.
|
29
|
First Quarter 2018
|