o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Name of each exchange on which registered
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Class B Non-Voting
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New York Stock Exchange
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2
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Auditors’ Fees
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2018
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2017
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||||||
($)
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%
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($)
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%
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||||
Audit Fees
(1)
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6,324,754
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|
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87.9
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6,417,346
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|
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89.2
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Audit-Related Fees
(2)
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797,575
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|
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11.1
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687,875
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|
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9.6
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Tax Fees
(3)
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71,606
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|
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1.0
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78,352
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1.1
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All Other Fees
(4)
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—
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|
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—
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8,694
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|
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0.1
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Total
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7,193,935
|
|
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100.0
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7,192,267
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|
100.0
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(1)
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Consist of fees related to audits, prospectuses, registration statements and other filings with various regulatory authorities, quarterly reviews of interim financial statements, audit procedures on new accounting standards not yet effective, audits and reviews of subsidiaries for statutory or regulatory reporting, and consultations related to accounting matters impacting the consolidated financial statements.
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(2)
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Consist primarily of pension plan audits, French translation of certain filings with regulatory authorities, other assurance engagements, due diligence services in respect of potential acquisitions and divestitures, and consultations regarding accounting standards not yet effective.
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(3)
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Consist of fees for tax consultation and compliance services, including indirect taxes.
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(4)
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Consist mainly of fees for information technology and operational advisory services.
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3
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1.
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Annually, the Company will provide the Audit and Risk Committee with a list of the audit-related and non-audit services that may be provided by the auditor during the year to the Company. The Audit and Risk Committee will review the services with the auditor and management, considering whether the provision of the service is compatible with maintaining the auditor’s independence.
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2.
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Management may engage the auditor for specific engagements that are included in the list of pre-approved services referred to above if the estimated fees do not exceed $500,000 per engagement per quarter.
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3.
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The Audit and Risk Committee delegates authority to the Chairman of the Audit and Risk Committee to approve requests for services not included in the pre-approved list of services or for services not previously pre-approved by the Audit and Risk Committee. Any services approved by the Chairman will be reported to the full Audit and Risk Committee at the next meeting.
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4.
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A listing of all audit and non-audit services and fees rendered to the Company and its subsidiaries by KPMG LLP will be reviewed each quarter by the Audit and Risk Committee.
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4
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By:
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"Joe Natale"
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"Anthony Staffieri"
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Joe Natale
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Anthony Staffieri, FCPA, FCA
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President and Chief Executive Officer
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Chief Financial Officer
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By:
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"Joe Natale"
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"Anthony Staffieri"
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Joe Natale
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Anthony Staffieri, FCPA, FCA
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President and Chief Executive Officer
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Chief Financial Officer
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5
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Exhibit Number
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Description
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23.1
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Consent of Independent Registered Public Accounting Firm
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1
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Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
†
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99.1
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Annual Information Form for the fiscal year ended December 31, 2018
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99.2
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Management’s Discussion and Analysis for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) under cover of a Form 6-K dated March 6, 2019
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99.3
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Annual Audited Consolidated Financial Statements, together with the reports of independent registered public accounting firm, for the fiscal year ended December 31, 2018
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†
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This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference on any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
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6
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•
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our report dated
March 6, 2019
on the consolidated financial statements of Rogers Communications Inc. (the “Company”) which comprise the consolidated statements of financial position of the Company as at December 31,
2018
and December 31,
2017
, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the years in the two-year period ended December 31,
2018
, and the related notes; and
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•
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our report dated
March 6, 2019
on the effectiveness of the Company’s internal control over financial reporting as of December 31,
2018
,
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1.
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I have reviewed this annual report on Form 40-F of Rogers Communications Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
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4.
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The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
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5.
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The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit and risk committee of the issuer’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
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Date: March 6, 2019
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"Joe Natale"
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Joe Natale
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President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 40-F of Rogers Communications Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
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4.
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The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
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5.
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The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit and risk committee of the issuer’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
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Date: March 6, 2019
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"Joe Natale"
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Joe Natale
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President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 40-F of Rogers Communications Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
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4.
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The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
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5.
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The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit and risk committee of the issuer’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
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Date: March 6, 2019
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"Anthony Staffieri"
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Anthony Staffieri, FCPA, FCA
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Chief Financial Officer
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1.
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I have reviewed this annual report on Form 40-F of Rogers Communications Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
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4.
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The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
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5.
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The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit and risk committee of the issuer’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
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Date: March 6, 2019
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"Anthony Staffieri"
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Anthony Staffieri, FCPA, FCA
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Chief Financial Officer
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Date: March 6, 2019
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"Joe Natale"
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Joe Natale
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President and Chief Executive Officer
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Date: March 6, 2019
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"Anthony Staffieri"
|
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Anthony Staffieri, FCPA, FCA
|
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Chief Financial Officer
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Date: March 6, 2019
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"Joe Natale"
|
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Joe Natale
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President and Chief Executive Officer
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Date: March 6, 2019
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"Anthony Staffieri"
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Anthony Staffieri, FCPA, FCA
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Chief Financial Officer
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Page reference / incorporated by
reference from
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Annual
Information Form
(Page #)
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2018 MD&A
(Page #)
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Item 1
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Cover Page
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1
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Item 2
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Index
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2
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Item 3
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Corporate Structure
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3.1
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Name, Address and Incorporation
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3.2
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Intercorporate Relationships
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Item 4
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General Development of the Business
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4.1
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Three Year History
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4.2
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Significant Acquisitions
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Item 5
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Narrative Description of the Business
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5.1
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About Rogers
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15
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Understanding Our Business
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18
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Products and Services
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18
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Competition
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20
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Industry Trends
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21
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Our Strategy, Key Performance Drivers, and Strategic Highlights
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23
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Capability to Deliver Results
|
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28
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Employees
|
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40
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Commitments and Contractual Obligations
|
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55
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Properties, Trademarks, Environmental, and Other Matters
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||
5.2
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Risk Factors
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60
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Item 6
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Dividends
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6.1
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Dividends
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54
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Item 7
|
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Description of Capital Structure
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7.1
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General Description of Capital Structure
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7.2
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Constraints
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7.3
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Ratings
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Item 8
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Market for Securities
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8.1
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Trading Price and Volume
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8.2
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Prior Sales
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Item 9
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Escrowed Securities and Securities Subject to Contractual Restriction on Transfer
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Item 10
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Directors and Officers
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10.1
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Name, Occupation and Security Holding
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10.2
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Cease Trade Orders, Bankruptcies, Penalties, or Sanctions
|
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10.3
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Conflicts of Interest
|
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Item 11
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Promoters
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Item 12
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Legal Proceedings and Regulatory Actions
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12.1
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Legal Proceedings
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66
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12.2
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Regulatory Actions
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Item 13
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Interest of Management and Others in Material Transactions
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Item 14
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Transfer Agents and Registrars
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Rogers Communications Inc.
|
2
|
Fiscal 2018
|
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Page reference / incorporated by
reference from
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||
|
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Annual
Information Form
(Page #)
|
2018 MD&A
(Page #)
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Item 15
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Material Contracts
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Item 16
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Interests of Experts
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16.1
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Name of Experts
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16.2
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Interests of Experts
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Item 17
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Audit and Risk Committee
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17.1
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Audit and Risk Committee Mandate
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17.2
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Composition of the Audit and Risk Committee
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17.3
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Relevant Education and Experience
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17.4
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Reliance on Certain Exemptions
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17.5
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Reliance on the Exemption in Subsection 3.3(2) or Section 3.6
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17.6
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Reliance on Section 3.8
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17.7
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Audit and Risk Committee Oversight
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17.8
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Pre-Approval Policies and Procedures
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17.9
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External Auditors’ Fees and Services
|
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Item 18
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Additional Information
|
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18.1
|
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Additional Information
|
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Rogers Communications Inc.
|
3
|
Fiscal 2018
|
Segment
|
Principal activities
|
Wireless
|
Wireless telecommunications operations for Canadian consumers and businesses.
|
Cable
|
Cable telecommunications operations, including Internet, television, telephony (phone), and smart home monitoring 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
|
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
|
Fiscal 2018
|
(1)
|
Ownership percentages are 100%
|
(2)
|
Blue Jays Holdco Inc., together with its subsidiaries, holds a 100% interest in the Toronto Blue Jays Baseball Club (Toronto Blue Jays) and Rogers Centre.
|
•
|
approximately
10.8 million
subscribers; and
|
•
|
approximately 33% subscriber and revenue share of the Canadian wireless market.
|
•
|
approximately
2.4 million
high-speed Internet subscribers;
|
•
|
approximately
1.7 million
Television subscribers -
approximately 27% of Canadian cable television subscribers
;
|
•
|
approximately
1.1 million
Phone subscribers; and
|
•
|
a network passing approximately
4.4 million
homes in Ontario, New Brunswick, and on the island of Newfoundland.
|
•
|
sports media and entertainment, such as Sportsnet and the Toronto Blue Jays;
|
•
|
our exclusive national 12-year National Hockey League (NHL) Agreement;
|
•
|
category-leading television and radio broadcasting properties;
|
•
|
multi-platform televised and online shopping;
|
•
|
digital media; and
|
•
|
publishing.
|
•
|
mobile and fixed high-speed Internet access;
|
•
|
wireless voice and enhanced voice features;
|
•
|
wireless home phone;
|
•
|
device protection;
|
•
|
text messaging;
|
•
|
e-mail;
|
•
|
global voice and data roaming, including Roam Like Home and Fido Roam;
|
Rogers Communications Inc.
|
5
|
Fiscal 2018
|
•
|
bridging landline phones with wireless phones through products like Rogers Unison;
|
•
|
machine-to-machine solutions and Internet of Things (IoT) solutions; and
|
•
|
advanced wireless solutions for businesses.
|
•
|
Internet access (including basic and unlimited usage packages), security solutions, and e-mail;
|
•
|
access speeds of up to one gigabit per second (Gbps), covering our entire Cable footprint;
|
•
|
Rogers Ignite and Fido Internet unlimited packages, combining fast and reliable speeds with the freedom of unlimited usage and options for self-installation; and
|
•
|
Rogers Smart Home Monitoring, offering services such as monitoring, security, automation, energy efficiency, and smart control through a smartphone app.
|
•
|
local and network TV, made available through traditional digital or IP-based Ignite TV, including starter and premium channel packages along with à la carte channels;
|
•
|
on-demand television;
|
•
|
cloud-based digital video recorders (DVRs) available with Ignite TV services;
|
•
|
voice-activated remote controls, restart features, and integrated apps such as YouTube and Netflix on Ignite TV;
|
•
|
personal video recorders (PVRs), including Whole Home PVR and 4K PVR capabilities;
|
•
|
Download and Go, the ability to download recorded programs onto your smartphone or tablet to watch at a later time using the Ignite TV app;
|
•
|
linear and time-shifted programming;
|
•
|
digital specialty channels;
|
•
|
4K television programming, including regular season Toronto Blue Jays home games and select marquee National Hockey League (NHL) and National Basketball Association (NBA) games; and
|
•
|
televised content delivered on smartphones, tablets, and personal computers through the Ignite TV or Rogers Anyplace TV apps.
|
•
|
residential and small business local telephony service; and
|
•
|
calling features such as voicemail, call waiting, and long distance.
|
•
|
voice, data networking, Internet protocol (IP), and Ethernet services over multi-service customer access devices that allow customers to scale and add services, such as private networking, Internet, IP voice, and cloud solutions, which blend seamlessly to grow with their business requirements;
|
•
|
optical wave, Internet, Ethernet, and multi-protocol label switching services, providing scalable and secure metro and wide area private networking that enables and interconnects critical business applications for businesses that have one or many offices, data centres, or points of presence (as well as cloud applications) across Canada;
|
•
|
simplified information technology and network technologies with security-embedded, cloud-based, professionally-managed solutions; and
|
•
|
extensive wireless and cable access networks services for primary, bridging, and back-up connectivity.
|
Rogers Communications Inc.
|
6
|
Fiscal 2018
|
•
|
Sportsnet's four regional stations along with Sportsnet ONE, Sportsnet 360, and Sportsnet World;
|
•
|
City network, which, together with affiliated stations, has broadcast distribution to approximately 83% of Canadian individuals;
|
•
|
OMNI multicultural broadcast television stations, including OMNI Regional, which provide multilingual newscasts nationally to all digital basic television subscribers;
|
•
|
specialty channels that include FX (Canada), FXX (Canada), and Outdoor Life Network (OLN); and
|
•
|
TSC, Canada’s only nationally televised shopping channel, which generates a significant and growing portion of its revenue from online sales.
|
•
|
our digital sports-related assets, including Rogers NHL LIVE, Sportsnet NOW, and Sportsnet NOW+;
|
•
|
many well-known consumer brands, such as Maclean’s, Chatelaine, Today's Parent, and Hello! Canada; and
|
•
|
a range of other websites, apps, podcasts, and digital products associated with our various brands and businesses.
|
•
|
our 37.5% ownership interest in Maple Leaf Sports & Entertainment Ltd. (MLSE), which owns the Toronto Maple Leafs, the Toronto Raptors, Toronto FC, the Toronto Argonauts, and the Toronto Marlies, as well as various associated real estate holdings; and
|
•
|
our 50% ownership interest in Glentel Inc. (Glentel), a large provider of multicarrier wireless and wireline products and services with several hundred Canadian retail distribution outlets.
|
•
|
company-owned Rogers, Fido, and chatr retail stores;
|
•
|
customer self-serve using rogers.com, fido.ca, chatrwireless.com, and e-commerce sites;
|
•
|
an extensive independent dealer network;
|
•
|
major retail chains and convenience stores;
|
•
|
other distribution channels, such as WOW! mobile boutique, as well as Wireless Wave and TBooth Wireless through our ownership interest in Glentel;
|
•
|
our call centres; and
|
•
|
outbound telemarketing.
|
•
|
company-owned Rogers and Fido retail stores;
|
•
|
customer self-serve using rogers.com and fido.ca;
|
•
|
our call centres, outbound telemarketing, and door-to-door agents; and
|
•
|
major retail chains.
|
Rogers Communications Inc.
|
7
|
Fiscal 2018
|
•
|
Declared a quarterly dividend of $0.50 per each outstanding Class A Voting Share and Class B Non-Voting Share in January 2019.
|
•
|
Declared a quarterly dividend of $0.48 per each outstanding Class A Voting Share and Class B Non-Voting Share during 2018.
|
•
|
Issued US$750 million 30-year 4.3% senior notes and fully hedged the foreign exchange risk. We received net proceeds of $938 million from the issuance.
|
•
|
Ended the year with approximately
$2.4 billion
of available liquidity, including
$1.6 billion
available under our bank and letter of credit facilities,
$0.4 billion
available under our
$1.05 billion
accounts receivable securitization program, and
$0.4 billion
in cash and cash equivalents.
|
•
|
Attracted our highest number of Wireless postpaid net additions and realized our lowest annual Wireless postpaid churn rate since 2009.
|
•
|
Invested in the modernization of our Fido and Rogers retail stores.
|
•
|
Renewed our focus on digital self-serve, growing our customer digital adoption rate and allowing our customers to access their accounts and purchase new products with ease.
|
•
|
Increased customer experience metrics to account for 50% of our 2018 company-wide bonus plan.
|
•
|
Invested in LTE Advanced network technology for wireless network capacity and performance.
|
•
|
Worked with Ericsson, the North American 5G partner of choice, to densify our network with small and macro cell sites and upgrade our 4.5G network with the latest 5G-ready technology.
|
•
|
Launched a three-year partnership with the University of British Columbia (UBC) to create Canada's first real-world 5G hub on UBC's campus, facilitating research and developing 5G applications.
|
•
|
Received the 2018 Speedtest®
Award for Canada's Fastest Internet by Ookla®, a global leader in fixed broadband and mobile network testing, following ongoing investment in our network.
|
•
|
Launched Ignite TV to our Cable footprint in Ontario and launched employee trials in our Atlantic Canada Cable footprint.
|
•
|
Invested almost $700 million to produce and create Canadian entertainment, news, and sports programming during the 2018 broadcast year.
|
•
|
For the fourth consecutive year, Sportsnet was ranked Canada's number-one sports media brand.
|
•
|
Celebrated 50 years of local programming through Rogers TV.
|
•
|
Expanded our presence in local markets with the introduction of CityNews in Vancouver, Montreal, and Calgary, the acquisition of 102.1 CJCY in Medicine Hat, and the launch of hyper-local news sites in Ottawa and Kitchener in partnership with Village Media.
|
Rogers Communications Inc.
|
8
|
Fiscal 2018
|
•
|
Successfully completed the fourth year of our exclusive 12-year national NHL Agreement, reaching an audience of 24.6 million during the 2018 Stanley Cup Playoffs, including the most watched Stanley Cup Final since 2014.
|
•
|
Achieved our 2018 guidance targets after raising our adjusted EBITDA guidance in the third quarter. See "Financial and Operating Guidance" in our 2018 MD&A for more information.
|
•
|
Grew total revenue by 5% and adjusted EBITDA by 9%.
|
•
|
Delivered total shareholder return of 12.5% in 2018, 21 percentage points above the TSX Composite Index return.
|
•
|
Achieved a best-in-class employee engagement score.
|
•
|
Recognized as one of Canada's Top 100 Employers for 2018, for the 6th year in a row, including recognition as one of the Greater Toronto Area's Top Employers, a Top Employer for Young People, a Best Diversity Employer, and one of Canada's Greenest Employers, in reports released by Mediacorp Inc.
|
•
|
Recognized as one of Canada's 50 Most Engaged Workplaces for 2018 by Achievers.
|
•
|
Achieved female representation of 30% for executive positions of Vice President and above.
|
•
|
Named to the 2018 Bloomberg Gender-Equality Index (GEI) in January 2018, which shared data on over 100 companies who lead in gender equality around the world. The GEI looks at our internal statistics, policies, engagement, and other gender-conscious programs that reflect our commitment to advancing women in the workplace and marketplace.
|
•
|
Invested over $60 million in our communities through cash and in-kind donations to various charitable organizations and causes.
|
•
|
Awarded 313 scholarships through our community partners and to dependents of our hard-working employees. Additionally, this program provided 105 grants to community organizations across the country that provide innovative and educational programs for youth.
|
•
|
Volunteered over 20,000 hours to local charities across Canada, including through our first-ever Give Together Volunteer Days, where team members gave over 10,000 hours of support to over 50 charitable organizations.
|
•
|
Raised over $2.5 million from our second annual employee giving campaign, Give Together Month, where Rogers matched employee donations to the charity of their choice, up to $1,000 each.
|
•
|
Released Rogers’ 2018 Transparency Report, which outlines how we share customer information in response to requests from legal authorities as part of our obligation to contribute to public safety while protecting our customers' privacy.
|
•
|
Expanded access to Connected for Success, a program offering access to affordable, high-speed Internet to over 200,000 low-income Canadian households through 300 subsidized housing partners across our cable footprint.
|
•
|
Became a participating partner in Connecting Families, a low-cost Government of Canada Internet initiative.
|
•
|
Declared a quarterly dividend of $0.48 per each outstanding Class A Voting Share and Class B Non-Voting Share during 2017.
|
•
|
Ended the year with approximately $2.7 billion of available liquidity, including $2.3 billion available under our bank and letter of credit facilities and $0.4 billion available under our $1.05 billion accounts receivable securitization program.
|
•
|
Attracted our highest number of postpaid net additions and realized our lowest annual postpaid churn rate since 2010.
|
Rogers Communications Inc.
|
9
|
Fiscal 2018
|
•
|
Introduced Data Bytes for Fido mobile, giving new and existing Fido Pulse plan customers an additional hour of data, five times per billing cycle, at no extra charge. With this feature, customers can activate their data session and start streaming, searching, and sharing, worry-free.
|
•
|
Launched Stream Saver, part of our worry-free data management objective that allows users to get more out of their data plan by switching video streaming settings between high definition and standard definition.
|
•
|
Launched Social Media Security by Rogers, a cloud-based solution that allows Canadian businesses to better safeguard their social media accounts.
|
•
|
Augmented sections of our existing LTE network with 4.5G technology investments that are designed to migrate to a 5G environment.
|
•
|
Initiated a program to upgrade our hybrid fibre-coaxial infrastructure with additional fibre deployments and further DOCSIS technology enhancements. This program will lower the number of homes passed per node, will incorporate the latest technologies to help deliver more bandwidth and an even more reliable customer experience, and will lay the foundation to evolve to fibre-to-the-home.
|
•
|
Launched LTE-Advanced (LTE-A) service in many communities in Manitoba, including Winnipeg, Brandon, Portage La Prairie, Churchill, and more. We also expanded other cellular services in Manitoba.
|
•
|
Expanded LTE wireless service in Alberta; expanded LTE wireless service and implemented network improvements in several communities across British Columbia.
|
•
|
Extended our 700 MHz LTE network reach to 92% of Canada’s population and extended our overall LTE coverage to 96% of the population.
|
•
|
Recognized as the fastest ISP in both Ontario and Canada between July 2016 and May 2017, according to PCMag's Speed Index.
|
•
|
For the third consecutive year, Sportsnet was ranked Canada's number-one sports media brand and Canada’s number-one specialty network.
|
•
|
Successfully completed the third year of our exclusive 12-year national NHL Agreement while bringing the NHL to more Canadians than ever before with our 2016-2017 NHL season being our most successful NHL season to date.
|
•
|
Extended, for seven additional years, our sublicensing arrangement with CBC for English broadcasts of Hockey Night in Canada and the Stanley Cup playoffs, beginning with the 2019-2020 season. CBC will continue to broadcast nationally-televised regular season games on Saturday night, plus all four rounds of the Stanley Cup playoffs.
|
•
|
Achieved excellent radio ratings across Canada, including 98.1 CHFI and 680 NEWS in Toronto, where they were the city's number-one radio and news stations, respectively, for the key demographic between ages 25 and 54.
|
•
|
Added four new 4K services to our lineup, allowing our customers to watch some of the world’s biggest artists, concerts, movies, and events in 4K, in addition to more than 100 Toronto Blue Jays, NHL, and NBA games.
|
•
|
Launched OMNI Regional across the country, a new television service providing Canada’s diverse language communities with access to vital news and information programming.
|
•
|
Launched CityNews in Edmonton and Winnipeg, and announced upcoming CityNews launches in Vancouver, Calgary, and Montreal, offering a fresh approach to local news that provides viewer-based content with original stories that reflect these communities.
|
•
|
100% achievement of our 2017 guidance on selected full-year metrics.
|
•
|
Adjusted EBITDA margin expansion of 90 basis points. This increase was primarily driven by Wireless, with a 130 basis point expansion, and Cable, with a 90 basis point expansion.
|
•
|
Achieved our best annual Wireless service revenue growth and adjusted EBITDA growth since 2009.
|
•
|
Achieved an employee engagement score of 79%.
|
Rogers Communications Inc.
|
10
|
Fiscal 2018
|
•
|
Recognized in November 2017, for the fifth year in a row, as one of Canada's Top 100 Employers for 2018, and in January 2017, for the eighth year in a row, as a Top Employer for Young People, by the editors of Canada’s Top 100 Employers.
|
•
|
Selected as one of Canada's Best Diversity Employers for 2017, for the fifth year in a row, in a report released by Mediacorp Inc. in March 2017, in recognition of our efforts to promote diversity and inclusion in the workplace.
|
•
|
Named one of Canada’s Greenest Employers for 2017, for the fifth year in a row, by the editors of Canada’s Top 100 Employers in April 2017.
|
•
|
Named one of the 50 Best Corporate Citizens in Canada by Corporate Knights in June 2017, an award that recognizes employers that incorporate social, economic, and ecological benefits and costs in their normal course of business.
|
•
|
Invested $64 million in our communities through cash and in-kind donations to various charitable organizations and causes.
|
•
|
Launched the Ted Rogers Scholarship Fund and awarded 307 scholarships through our community partners and to dependents of our hard-working employees. This program also included 65 grants to community organizations across the country that provide innovative and educational programs for youth.
|
•
|
Released Rogers’ 2017 Transparency Report, which outlines how we share customer information in response to requests from legal authorities. We are committed to protecting our customers’ privacy and fulfilling our obligation as a good corporate citizen to follow the law and contribute to public safety.
|
•
|
Launched a new annual employee giving campaign, Give Together Month, where Rogers matched employee donations to the charity of their choice, up to $1,000 each. In total, $2.2 million was raised.
|
•
|
Expanded Connected for Success, a program offering access to affordable, high-speed Internet to 150,000 low-income Canadian households through 200 subsidized housing partners across our cable footprint.
|
•
|
Declared a quarterly dividend of $0.48 per each outstanding Class A Voting Share and Class B Non-Voting Share during 2016.
|
•
|
Issued and fully hedged the foreign exchange risk on US$500 million ($671 million) ten-year 2.9% senior notes.
|
•
|
Ended the year with approximately $2.7 billion of available liquidity, including $2.4 billion available under our bank credit facilities and $0.25 billion available under our $1.05 billion accounts receivable securitization program.
|
•
|
100% achievement of our 2016 guidance on selected full-year metrics and achieved our best subscriber metrics in recent years.
|
•
|
Launched a number of tools and offerings with a focus on becoming a leader in self-serve options. We saw a 56% increase in self-serve transactions on the Rogers brand and a 9% increase on the Fido brand this year.
|
•
|
Expanded Roam Like Home to over 100 destinations in Europe, Asia, Mexico, South America, and Latin America, further simplifying how Wireless consumers use the Internet, make calls, and send texts and e-mails. Customers have access to their Canadian plan features while traveling, all at a relatively low cost. Furthermore, we broadened the availability of Roam Like Home by making it available on most consumer Wireless plans.
|
•
|
Introduced Fido Roam, allowing customers to use existing data, talk, and text from their Fido Pulse plans while traveling, for a low daily price. Fido Roam covers all of the US along with destinations in Europe, the Caribbean, South and Central America, the Middle East, Oceania, South Africa, and Asia.
|
•
|
Launched Data Manager, a new tool that gives families the ability to manage their wireless data in real-time and provide worry-free control.
|
•
|
Launched Rogers EnRoute and Fido EnRoute, tools that save our customers time by giving them the ability to track, in real-time, when a technician will arrive for an installation or service call.
|
•
|
Launched DeviceAdvice and Message Me for our Fido customers. DeviceAdvice is a tool allowing customers to self-diagnose device issues and receive quick, personalized advice so they can maximize the performance of their device.
|
Rogers Communications Inc.
|
11
|
Fiscal 2018
|
•
|
Launched Rogers Assist, an app that allows all Rogers employees to submit an issue to customer care on behalf of their friends, family, and acquaintances.
|
•
|
Collaborated with a Canadian app creator that helps people with cognitive special needs, to create how-to videos for using a wireless device. Rogers.com now features five videos with easy-to-follow instructions and closed-captioning that explain how to perform key functions related to your Rogers wireless device like sending a text or picture, connecting to a Wi-Fi network, and making a phone call.
|
•
|
Expanded our Connected for Success program to more communities across Ontario, New Brunswick, and the island of Newfoundland. This program provides affordable Internet services to people that live in non-profit housing. This expansion more than doubled the number of eligible households across the country to up to 150,000.
|
•
|
Released Rogers’ 2016 Transparency Report, our annual report on how we share customer information in response to requests from legal authorities. We are committed to protecting our customers’ privacy and fulfilling our obligation as a good corporate citizen to follow the law and contribute to public safety.
|
•
|
Launched Rogers Unison, a new mobile solution that brings the features of a traditional landline office phone to one’s mobile phone. We were the first telecommunications provider in North America to launch such a solution. This solution allows our customers to stay connected across multiple devices regardless of their location, allowing them to better serve their customers.
|
•
|
Launched Rogers Public Cloud, a new data sovereign, cloud infrastructure as-a-service solution that lets businesses securely manage critical data, applications, servers, systems software, and network resources over the Internet.
|
•
|
Launched Rogers Ignite Gigabit Internet to small business customers in Ontario, enabling them to leverage blazing-fast Internet speeds and unlimited data usage to improve productivity with faster file transfers, real-time data backup for business continuity, and high-quality video conferencing. The increased bandwidth also means businesses can connect more users online simultaneously, without compromising Internet performance.
|
•
|
Announced certain Internet of Things (IoT) as-a-service offerings to simplify the process of managing complex IoT solutions. Two of the first solutions being offered as a service include Farm & Food Monitoring and Level Monitoring.
|
•
|
Launched Business App Market, a new platform for small businesses to manage multiple cloud-based applications.
|
•
|
Recognized again as a Top Employer for 2017 in November 2016 and as a Top Employer for Young People in January 2017 by the editors of Canada’s Top 100 Employers.
|
•
|
Selected as one of Canada's Best Diversity Employers for 2016 in a report released by Mediacorp Inc. in March 2016 for recognition of our efforts to promote diversity and inclusion in the workplace.
|
•
|
Named one of Canada’s Greenest Employers for 2016 by the editors of Canada’s Top 100 Employers in April 2016, an award that recognizes employers with innovative environmental programs and earth-friendly policies that actively involve their employees.
|
•
|
Named one of the 50 Best Corporate Citizens in Canada by Corporate Knights in June 2016, an award that recognizes employers that incorporate social, economic, and ecological benefits and costs in their normal course of business.
|
•
|
Launched an intensive leadership program for more than 160 executives.
|
•
|
Expanded our national onboarding program to include 1,400 call centre employees and launched a mobile onboarding solution for part-time employees.
|
•
|
Continued to modernize our workplace to help us be more productive to better serve our customers.
|
•
|
For the second consecutive year, Sportsnet solidified its position as the destination for Canadian sports fans by closing out 2016 as Canada’s number-one sports media brand. Sportsnet won eight months in 2016 and has widened the gap from its closest competitor with a 42% lead in average minute audience and a 39% lead in audience share. Sportsnet.ca reached an all-time high with 4.25 million unique visitors in October 2016, which beats our closest English-language competitor, and marks a 7% increase year on year. The 2016 Blue Jays regular season was the most-watched Blue Jays
|
Rogers Communications Inc.
|
12
|
Fiscal 2018
|
•
|
Launched Sportsnet NOW, one of the first mainstream sports TV channels in North America to be available direct to consumers, as well as Sportsnet 4K, which delivered all regular season Toronto Blue Jays home games in 4K.
|
•
|
Broadcast the first live NBA, NHL, and MLB games in 4K.
|
•
|
Introduced the new NextBox 4K PVR, giving customers the ability to record up to eight 4K programs at one time and store up to 90 hours of 4K entertainment.
|
•
|
Successfully completed the second year of our exclusive 12-year national NHL Agreement while bringing the NHL to more Canadians than ever before. Rogers Hometown Hockey returned for a third season during the 2016-2017 NHL season with hockey festivities and entertainment.
|
•
|
Continued our commitment to deliver world-class Canadian content by adding two new original scripted series to our City lineup, with the millennial-focused comedy
Second Jen
and drama
Bad Blood: The Vito Rizzuto Story
.
|
•
|
Extended our Ignite Gigabit Internet coverage to cover Rogers’ entire cable footprint, such that we offer the fastest widely available Internet speeds in our marketplace.
|
•
|
Announced the long-term strategic partnership with Comcast to bring our customers a world-class IPTV service with the most advanced features available in the market today by deploying Comcast's X1 IP-based video platform.
|
•
|
Extended our 700 MHz LTE network reach to 91% of Canada's population in 2016, compared to 78% in 2015. Extended our overall LTE network reach to 95% of Canada's population in 2016, compared to 93% in 2015.
|
•
|
Installed a new suite of technology and enterprise solutions to enable the most connected arena in Canada, the Rogers Place in Edmonton.
|
•
|
Successfully worked as one company, showing we can bring our entire team together to achieve our goals. We demonstrated this by bringing Rogers Hometown Hockey to 150,000 Canadians, introducing low-cost Internet for more community housing residents, and bringing viewers our strongest primetime lineup ever, while delivering a strong year of NHL and Sportsnet.
|
Rogers Communications Inc.
|
13
|
Fiscal 2018
|
About Rogers
|
15
|
|
Understanding Our Business
|
18
|
|
Wireless
|
18
|
|
Cable
|
18
|
|
Media
|
18
|
|
Products and Services
|
18
|
|
Wireless
|
18
|
|
Cable
|
18
|
|
Media
|
19
|
|
Other
|
19
|
|
Other Investments
|
19
|
|
Competition
|
20
|
|
Wireless
|
20
|
|
Cable
|
20
|
|
Media
|
21
|
|
Industry Trends
|
21
|
|
Our Strategy, Key Performance Drivers, and Strategic Highlights
|
23
|
|
Capability to Deliver Results
|
28
|
|
Employees
|
40
|
|
Commitments and Contractual Obligations
|
55
|
|
•
|
transmitters; microwave systems; antennae; buildings; electronic transmission, receiving, and processing accessories; and other wireless network equipment (including switches, radio channels, base station equipment, microwave facilities, and cell equipment);
|
•
|
coaxial and fibre optic cables; set-top terminals, cable modems, and home monitoring equipment; electronic transmission, receiving, processing, digitizing, and distributing equipment; IP routers; data storage servers and network management equipment; and microwave equipment and antennae; and
|
•
|
radio and television broadcasting equipment (including television cameras and television and radio production facilities and studios).
|
Rogers Communications Inc.
|
14
|
Fiscal 2018
|
Declaration date
|
Record date
|
Payment date
|
Dividend per share
(dollars)
|
|
Dividends paid
(in millions of dollars)
|
|
|
|
|
|
|
||
January 25, 2018
|
March 12, 2018
|
April 3, 2018
|
0.48
|
|
247
|
|
April 19, 2018
|
June 11, 2018
|
July 3, 2018
|
0.48
|
|
247
|
|
August 15, 2018
|
September 14, 2018
|
October 3, 2018
|
0.48
|
|
247
|
|
October 19, 2018
|
December 11, 2018
|
January 3, 2019
|
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
|
|
|
|
|
|
|
||
January 27, 2016
|
March 13, 2016
|
April 1, 2016
|
0.48
|
|
247
|
|
April 18, 2016
|
June 12, 2016
|
July 4, 2016
|
0.48
|
|
247
|
|
August 11, 2016
|
September 11, 2016
|
October 3, 2016
|
0.48
|
|
247
|
|
October 20, 2016
|
December 12, 2016
|
January 3, 2017
|
0.48
|
|
247
|
|
Rogers Communications Inc.
|
15
|
Fiscal 2018
|
•
|
Broadcasting Act (Canada);
|
•
|
Telecommunications Act (Canada); and
|
•
|
Radiocommunication Act (Canada).
|
•
|
qualified to hold or obtain any cable television, broadcasting, or telecommunications licence or authorized to operate a similar entity under the Laws; and
|
•
|
not in breach of the Laws or any licences issued to us or to any of our Canadian subsidiaries, associates, or affiliates under the Laws.
|
Issuance
|
S&P
|
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 for the year.
|
2
|
We have not sought a rating from Fitch for our short-term obligations
.
|
Rogers Communications Inc.
|
16
|
Fiscal 2018
|
RCI.B
|
|
|
|
|
||||
Month
|
High
($)
|
|
Low
($)
|
|
Close
($)
|
|
Volume
|
|
2018/01
|
64.00
|
|
59.05
|
|
60.03
|
|
21,037,655
|
|
2018/02
|
60.08
|
|
55.67
|
|
57.82
|
|
20,096,698
|
|
2018/03
|
59.31
|
|
55.63
|
|
57.54
|
|
19,828,820
|
|
2018/04
|
62.20
|
|
56.08
|
|
60.61
|
|
21,114,102
|
|
2018/05
|
63.00
|
|
59.77
|
|
60.85
|
|
19,737,368
|
|
2018/06
|
63.02
|
|
60.54
|
|
62.44
|
|
16,555,144
|
|
2018/07
|
68.00
|
|
61.86
|
|
66.32
|
|
16,366,237
|
|
2018/08
|
69.84
|
|
65.63
|
|
67.62
|
|
15,691,090
|
|
2018/09
|
68.68
|
|
65.89
|
|
66.43
|
|
15,401,343
|
|
2018/10
|
68.50
|
|
64.25
|
|
67.79
|
|
23,388,068
|
|
2018/11
|
71.30
|
|
66.13
|
|
70.87
|
|
20,575,033
|
|
2018/12
|
72.45
|
|
68.03
|
|
69.96
|
|
19,969,779
|
|
|
|
|
|
|
||||
RCI.A
|
|
|
|
|
||||
Month
|
High
($)
|
|
Low
($)
|
|
Close
($)
|
|
Volume
|
|
2018/01
|
64.20
|
|
59.35
|
|
60.10
|
|
45,065
|
|
2018/02
|
60.71
|
|
57.00
|
|
58.50
|
|
24,619
|
|
2018/03
|
60.50
|
|
56.00
|
|
56.90
|
|
8,928
|
|
2018/04
|
62.45
|
|
57.00
|
|
61.55
|
|
16,049
|
|
2018/05
|
63.55
|
|
60.40
|
|
61.10
|
|
13,062
|
|
2018/06
|
63.98
|
|
58.00
|
|
62.65
|
|
7,417
|
|
2018/07
|
68.34
|
|
62.40
|
|
65.20
|
|
16,432
|
|
2018/08
|
70.18
|
|
65.15
|
|
68.00
|
|
13,596
|
|
2018/09
|
69.50
|
|
66.39
|
|
66.67
|
|
7,276
|
|
2018/10
|
68.25
|
|
64.88
|
|
67.78
|
|
15,159
|
|
2018/11
|
71.18
|
|
66.44
|
|
71.09
|
|
16,249
|
|
2018/12
|
72.99
|
|
68.15
|
|
70.11
|
|
33,939
|
|
Rogers Communications Inc.
|
17
|
Fiscal 2018
|
(1)
|
Denotes member of Audit and Risk Committee
|
(2)
|
Denotes member of Executive Committee
|
(3)
|
Denotes member of Nominating Committee
|
(4)
|
Denotes member of Corporate Governance Committee
|
(5)
|
Denotes member of Human Resources Committee
|
(6)
|
Denotes member of Pension Committee
|
(7)
|
Denotes member of Finance Committee
|
(8)
|
Each of Edward S. Rogers, Loretta A. Rogers, Martha L. Rogers, and Melinda M. Rogers are immediate family members of each other and members of the family of the late Ted Rogers. For additional information, please see “Outstanding Shares and Main Shareholders” in RCI’s
2018
Information Circular available on SEDAR at sedar.com.
|
(9)
|
Voting control of RCI is held by the Rogers Control Trust. See “Outstanding Shares and Main Shareholders” in RCI’s
2018
Information Circular available on SEDAR at sedar.com. Each of the individuals that are noted above as holding positions with the Rogers Control Trust have held such positions since December 2008.
|
(10)
|
Mr. Burgess was a director of Syncapse Corp. ("Syncapse") prior to MNP Ltd. being appointed as a receiver of all the assets of Syncapse on July 23, 2013. A court approved sale was completed by the receiver on August 30, 2013.
|
(11)
|
Mr. MacDonald was a director of Magor Corporation (“Magor”) when it proactively filed a Notice of Intention to Make a Proposal pursuant to the provisions of the
Bankruptcy and Insolvency Act
on November 30, 2016. On July 11, 2017, Magor completed the sale of its wholly-owned subsidiary, Magor Communications Corp. (MCC), to N. Harris Computer Corporation. The transaction was approved by the Ontario Superior Court of Justice and Magor and MCC's creditors under the
Bankruptcy and Insolvency Act
. Magor ceased operations following the transaction.
|
Rogers Communications Inc.
|
18
|
Fiscal 2018
|
Rogers Communications Inc.
|
19
|
Fiscal 2018
|
Rogers Communications Inc.
|
20
|
Fiscal 2018
|
Rogers Communications Inc.
|
21
|
Fiscal 2018
|
Rogers Communications Inc.
|
22
|
Fiscal 2018
|
Rogers Communications Inc.
|
23
|
Fiscal 2018
|
1.
|
Mr. Burgess was a director of Syncapse Corp. (Syncapse) prior to MNP Ltd. being appointed as a receiver of all the assets of Syncapse on July 23, 2013. A court-approved sale was completed by the receiver on August 30, 2013.
|
2.
|
Mr. MacDonald was a director of Magor Corporation (Magor) when it proactively filed a Notice of Intention to Make a Proposal pursuant to the provisions of the
Bankruptcy and Insolvency Act
on November 30, 2016. On July 11, 2017, Magor completed the sale of its wholly-owned subsidiary, Magor Communications Corp. (MCC), to N. Harris Computer Corporation. The transaction was approved by the Ontario Superior Court of Justice and Magor and MCC's creditors under the
Bankruptcy and Insolvency Act.
Magor ceased operations following the transaction.
|
Rogers Communications Inc.
|
24
|
Fiscal 2018
|
Rogers Communications Inc.
|
25
|
Fiscal 2018
|
•
|
overseeing reliable, accurate and clear policies and practices for the preparation of financial reports to shareholders
|
•
|
overseeing the design, implementation and review of internal controls - the necessary checks and balances must be in place
|
•
|
recommending to the Board the appointment of the external auditor, based on an evaluation of the qualifications, independence and oversight of the auditors' work - the shareholders' auditors report directly to the Audit and Risk Committee (the “Committee”)
|
•
|
meeting with Rogers Communications Inc.’s (the “Company”) external and internal auditors and evaluating the effectiveness and independence of each
|
•
|
overseeing the establishment and maintenance of processes that ensure the Company is in compliance with both the laws and regulations that apply to it and its own policies
|
•
|
reviewing the annual strategic risk assessment, including management’s implementation of risk policies and actions to monitor and control major risk exposures
|
•
|
reviewing the Company’s business continuity and disaster recovery plans
|
•
|
receiving reports on, and approving, if appropriate, certain transactions with related parties
|
(i)
|
financial reporting processes and the integrity of financial statements provided by the Company to the public;
|
(ii)
|
recommending to the Board the appointment of the external auditor, based on an evaluation of the qualifications, independence and oversight of the auditor’s work;
|
(iii)
|
the qualifications and performance of internal auditors;
|
(iv)
|
the Company’s accounting systems, financial controls and disclosure controls;
|
(v)
|
compliance with applicable legal and regulatory requirements; and
|
(vi)
|
the implementation of appropriate risk assessment systems to identify and manage principal risks of the Company’s business.
|
(a)
|
Independence.
Each member shall be independent in accordance with applicable securities laws and based on the Company’s Director Material Relationship Standards and in such regard shall have no direct or indirect material relationship with the Company that, in the view of the Board, could reasonably interfere with the exercise of a member’s independent judgment.
|
(b)
|
Financially Literate.
Each member shall be financially literate or must become financially literate within a reasonable period of time after his or her appointment to the Committee. For these purposes, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. In addition, at least one member must be a financial expert as defined in accordance with applicable securities laws.
|
Rogers Communications Inc.
|
26
|
Fiscal 2018
|
(c)
|
Commitment.
In addition to being a member of the Committee and of any audit committee of any affiliate of the Company, if a member of the Committee is also on the audit committee of more than two additional public companies, the Board or the Nominating Committee shall determine that such simultaneous service does not impair the ability of such member to serve effectively on the Committee.
|
Rogers Communications Inc.
|
27
|
Fiscal 2018
|
1.
|
Financial Reporting Process and Financial Statements
|
(a)
|
in consultation with the external auditors and the internal auditors, review the integrity of the Company’s financial reporting process, both internal and external, and any material issues as to the adequacy of the internal controls and any special audit steps adopted in light of material control deficiencies identified to it by the external or internal auditors or of which the Committee otherwise becomes aware;
|
(b)
|
review all material transactions and material contracts entered into by the Company and its subsidiaries with any insider or related party of the Company, other than officer or employee compensation arrangements approved or recommended by the Human Resources Committee or director remuneration approved or recommended by the Corporate Governance Committee;
|
(c)
|
review and discuss with management and the external auditors the Company’s annual audited consolidated financial statements and its interim unaudited consolidated financial statements, and discuss with the external auditors the matters required to be discussed by generally accepted auditing standards in Canada and/or the United States, as applicable, as may be modified or supplemented, and for such purpose, receive and review the year-end report by the external auditors describing: (i) all critical accounting policies and practices used by the Company, (ii) all material alternative accounting treatments of financial information within generally accepted accounting principles that have been discussed with management, including the ramifications of the use of such alternative treatments and disclosures and the treatment preferred by the external auditors, and (iii) other material written communications between the external auditors and management, and discuss such annual report with the external auditors;
|
(d)
|
following completion of the annual audit, review with each of management, the external auditors and the internal auditors any significant issues, concerns or difficulties encountered during the course of the audit;
|
(e)
|
resolve disagreements between management and the external auditors regarding financial reporting;
|
(f)
|
review the interim quarterly and annual financial statements and press releases prior to the release of earnings information;
|
(g)
|
review emerging accounting issues and their potential impact on the Company’s financial reporting;
|
(h)
|
review and be satisfied that adequate procedures are in place for the review and timely disclosure of any public disclosure of financial information by the Company extracted or derived from the Company’s financial statements, other than the disclosure referred to in (f), and periodically assess the adequacy of those procedures;
|
(i)
|
meet separately, periodically, with management, with the internal auditors and with the external auditors; and
|
(j)
|
the interim consolidated financial statements, the Company’s disclosure under “Management's Discussion and Analysis” for interim periods and interim earnings press releases may be approved by the Committee on behalf of the Board, provided that such approval is subsequently reported to the Board at its next meeting.
|
2.
|
External Auditors
|
(a)
|
require the external auditors to report directly to the Committee;
|
(b)
|
be directly responsible for the selection, nomination, retention, termination and oversight of the work of the Company’s external auditors engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attestation services for the Company, and in such regard recommend to the Board the external auditors to be nominated for approval by the shareholders. A formal review of the qualifications, expertise, resources and the overall performance of the external auditors is conducted annually. A comprehensive review of the external auditors is conducted at least every five years and findings are presented to the Board;
|
(c)
|
recommend to the Board the compensation of the external auditors;
|
(d)
|
pre-approve all audit engagements and the provision by the external auditors of all non-audit services, including fees and terms for all audit engagements and non-audit engagements, and in such regard the Committee may establish the types of non-audit services the external auditors shall be prohibited from providing and shall establish the types of audit, audit-related and non-audit services for which the Committee will retain the external auditors. The Committee may delegate to one or more of its members the authority to pre-approve non-audit services, provided that any such delegated pre-approval shall be exercised in accordance with the types of particular non-audit services authorized by the Committee to be provided by the external auditor and the exercise of such delegated pre-approvals shall be presented to the full Committee at its next scheduled meeting following such pre-approval;
|
(e)
|
review and approve the Company’s policies for the hiring of partners and employees and former partners and employees of the external auditors;
|
(f)
|
review the annual audit plan with the external auditors;
|
(g)
|
consider, assess and report to the Board with regard to the independence and performance of the external auditors, including an evaluation of the lead partner and consideration of rotation of such lead partner and the audit firm itself; and
|
(h)
|
request and review a report by the external auditors, to be submitted at least annually, regarding the auditing firm’s relationships with the Company, internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the auditing firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the external auditors, and any steps taken to deal with any such issues.
|
Rogers Communications Inc.
|
28
|
Fiscal 2018
|
3.
|
Internal Auditors
|
(a)
|
review and approve the internal audit charter annually;
|
(b)
|
approve the annual internal audit plan and discuss internal audit’s mandate with the Chief Audit Executive, including the staffing, responsibilities and budgets;
|
(c)
|
obtain periodic reports from the Chief Audit Executive regarding internal audit findings and the Company’s progress in remedying any significant audit findings;
|
(d)
|
review the scope, responsibilities and effectiveness of the internal audit team, including its independence from management, credentials, resources and working relationship with the external auditors; and
|
(e)
|
review and recommend for approval the appointment and dismissal of the Chief Audit Executive.
|
4.
|
Accounting Systems, Internal Controls and Disclosure Controls
|
(a)
|
oversee management’s design and implementation of and reporting on internal controls; receive and review reports from management, the internal auditors and the external auditors with regard to the reliability and effective operation of the Company’s accounting system and internal controls;
|
(b)
|
review with senior management the controls and procedures adopted by the Company to confirm that material information about the Company and its subsidiaries that is required to be disclosed under applicable law or stock exchange rules is disclosed within the required time periods;
|
(c)
|
review and discuss with management, the external auditors and internal audit compliance with the Company’s Disclosure Policy by Directors, Officers and other management personnel;
|
(d)
|
review with senior management the adequacy of the internal controls adopted by the Company to safeguard assets from loss and unauthorized use, to prevent, deter and detect fraud, and to verify the accuracy of the financial records and review any special audit steps adopted in light of material weaknesses or significant deficiencies; and
|
(e)
|
review disclosures made to the Committee by the Chief Executive Officer and Chief Financial Officer during their certification process for applicable securities law filings about any significant deficiencies and material weaknesses in the design or operation of the Company’s internal control over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information required to be disclosed by the Company in the reports that it files or submits under U.S. federal securities law or applicable Canadian federal and provincial legislation and regulations within the required time periods, and any fraud, whether or not material, involving management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
5.
|
Legal and Regulatory Requirements
|
(a)
|
receive and review timely analysis by management of significant issues relating to public disclosure and reporting;
|
(b)
|
review, prior to finalization, periodic public disclosure documents containing financial information, including Management’s Discussion and Analysis and the Annual Information Form;
|
(c)
|
review disclosures related to the Committee required to be included in the Company’s continuous disclosure filings;
|
(d)
|
review with the Company’s Chief Legal and Regulatory Officer legal compliance matters, significant litigation and other legal matters that could have a significant impact on the Company’s financial statements; and
|
(e)
|
assist the Board in the oversight of compliance with legal and regulatory requirements.
|
6.
|
Risk Management
|
(a)
|
annual strategic risk assessment identifying principal risks and their potential impact on the Company’s ability to achieve its business objectives;
|
(b)
|
processes for identifying, assessing and managing risks;
|
(c)
|
major risk exposures and trends from all areas (e.g. information and cyber security, financial, physical security, new business initiatives) and management’s implementation of risk policies and procedures to monitor and control such exposures;
|
(d)
|
business continuity plans and disaster recovery plans;
|
(e)
|
insurance coverage maintained by the Company at least annually; and
|
(f)
|
other risk management matters from time to time as the Committee may consider appropriate or as the Board may specifically direct.
|
7.
|
Additional Responsibilities
|
(a)
|
establish procedures and policies for:
|
(i)
|
the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and
|
(ii)
|
the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters;
|
(b)
|
prepare and review with the Board an annual performance evaluation of the Committee;
|
(c)
|
review the adequacy of staffing of key financial functions and management’s plans for improvements;
|
(d)
|
review earnings guidance provided to stakeholders, including analysts and rating agencies;
|
(e)
|
periodically review with senior management the status of significant taxation matters;
|
Rogers Communications Inc.
|
29
|
Fiscal 2018
|
(f)
|
report regularly to the Board, including matters such as the quality or integrity of the Company’s financial statements, compliance with legal or regulatory requirements, the performance of the internal audit function, the performance of the risk management process and the performance and independence of the external auditors; and
|
(g)
|
review and reassess the adequacy of the Committee’s Mandate on an annual basis.
|
Mr. Clappison (Chair)
|
Chartered Professional Accountant, Chartered Accountant; former Greater Toronto Area Managing Partner of PricewaterhouseCoopers LLP.
|
Mr. Burgess
|
Former Chairman and Chief Executive Officer of Macromedia, Inc.; former Director and CEO of Alias Research, Inc. Mr. Burgess holds a B.Com. and an honorary Doctor of Laws from McMaster University.
|
Mr. Gemmell
|
Former President and Chief Executive Officer of Citigroup Global Markets Canada. 25 years as an investment banker in the United States and in Canada. Mr. Gemmell holds a B.A. from Cornell University, a LL.B from Osgoode Hall Law School, and a M.B.A. from the Schulich School of Business.
|
Mr. MacDonald
|
Former President of Enterprise Division of MTS Allstream; former President and COO of Bell Canada and former CEO of NBTel. Mr. MacDonald holds a B.Sc. in electrical engineering from Dalhousie University and a B.A. in Engineering from the Technical University of Nova Scotia.
|
(a)
|
Annually management provides the Audit and Risk Committee with a list of the audit-related and non-audit services that are anticipated to be provided during the year for pre-approval. The Audit and Risk Committee reviews the services with the auditor and management and considers whether the provision of the service is compatible with maintaining the auditor’s independence.
|
(b)
|
Management may engage the auditor for specific engagements that are included in the list of pre-approved services referred to above if the estimated fees do not exceed $500,000 per engagement per quarter.
|
(c)
|
The Audit and Risk Committee delegates authority to the Chair of the Audit and Risk Committee to approve requests for services not included in the pre-approved list of services or for services not previously pre-approved by the Audit and Risk Committee. Any services approved by the Chair will be reported to the full Audit and Risk Committee at the next meeting.
|
(d)
|
A review of all audit and non-audit services and fees rendered to the Company by KPMG LLP is reviewed each quarter by the Audit and Risk Committee.
|
Rogers Communications Inc.
|
30
|
Fiscal 2018
|
Auditors’ Fees
|
2018
|
2017
|
||||
$
|
%
|
$
|
%
|
|||
Audit Fees
(1)
|
6,324,754
|
|
87.9
|
6,417,346
|
|
89.2
|
Audit-Related Fees
(2)
|
797,575
|
|
11.1
|
687,875
|
|
9.6
|
Tax Fees
(3)
|
71,606
|
|
1.0
|
78,352
|
|
1.1
|
All Other Fees
(4)
|
—
|
|
—
|
8,694
|
|
0.1
|
Total
|
7,193,935
|
|
100.0
|
7,192,267
|
|
100.0
|
(1)
|
Consists of fees related to audits, prospectuses, registration statements and other filings with various regulatory authorities, quarterly reviews of interim financial statements, audit procedures on new accounting standards not yet effective, audits and reviews of subsidiaries for statutory or regulatory reporting, and consultations related to accounting matters impacting the consolidated financial statements.
|
(2)
|
Consists primarily of pension plan audits, French translation of certain filings with regulatory authorities, other assurance engagements, due diligence services in respect of potential acquisitions and divestitures, and consultations regarding accounting standards not yet effective.
|
(3)
|
Consists of fees for tax consultation and compliance services, including indirect taxes.
|
(4)
|
Consists mainly of fees for operational advisory and risk management services.
|
Rogers Communications Inc.
|
31
|
Fiscal 2018
|
•
|
transactions are properly authorized and recorded;
|
•
|
financial records are reliable and form a proper basis for the preparation of consolidated financial statements; and
|
•
|
the assets of Rogers Communications Inc. and its subsidiaries are properly accounted for and safeguarded.
|
"Joe Natale"
|
|
"Anthony Staffieri"
|
|
Joe Natale
|
|
Anthony Staffieri, FCPA, FCA
|
|
President and Chief Executive Officer
|
|
Chief Financial Officer
|
|
Rogers Communications Inc.
|
1
|
2018 Annual Financial Statements
|
Rogers Communications Inc.
|
2
|
2018 Annual Financial Statements
|
Rogers Communications Inc.
|
3
|
2018 Annual Financial Statements
|
Years ended December 31
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2)
|
|
||
|
|
|
|
|||
Revenue
|
5
|
|
15,096
|
|
14,369
|
|
|
|
|
|
|||
Operating expenses:
|
|
|
|
|||
Operating costs
|
6
|
|
9,113
|
|
8,867
|
|
Depreciation and amortization
|
7, 8
|
|
2,211
|
|
2,142
|
|
Gain on disposition of property, plant and equipment
|
7
|
|
(16
|
)
|
(49
|
)
|
Restructuring, acquisition and other
|
9
|
|
210
|
|
152
|
|
Finance costs
|
10
|
|
793
|
|
746
|
|
Other income
|
11
|
|
(32
|
)
|
(19
|
)
|
|
|
|
|
|
||
Income before income tax expense
|
|
2,817
|
|
2,530
|
|
|
Income tax expense
|
12
|
|
758
|
|
685
|
|
|
|
|
|
|
||
Net income for the year
|
|
2,059
|
|
1,845
|
|
|
|
|
|
|
|||
Earnings per share:
|
|
|
|
|||
Basic
|
13
|
|
$4.00
|
$3.58
|
||
Diluted
|
13
|
|
$3.99
|
$3.57
|
Rogers Communications Inc.
|
4
|
2018 Annual Financial Statements
|
Years ended December 31
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2) |
|
||
|
|
|
|
|||
Net income for the year
|
|
2,059
|
|
1,845
|
|
|
|
|
|
|
|||
Other comprehensive income (loss):
|
|
|
|
|||
|
|
|
|
|||
Items that will not be reclassified to net income:
|
|
|
|
|||
Defined benefit pension plans:
|
|
|
|
|||
Remeasurements
|
22
|
|
53
|
|
(62
|
)
|
Related income tax (expense) recovery
|
|
(12
|
)
|
17
|
|
|
|
|
|
|
|||
Defined benefit pension plans
|
|
41
|
|
(45
|
)
|
|
|
|
|
|
|||
Equity investments measured at fair value through other comprehensive income (FVTOCI):
|
|
|
|
|||
(Decrease) increase in fair value
|
|
(440
|
)
|
433
|
|
|
Related income tax recovery (expense)
|
|
63
|
|
(62
|
)
|
|
|
|
|
|
|||
Equity investments measured at FVTOCI
|
|
(377
|
)
|
371
|
|
|
|
|
|
|
|||
Items that will not be reclassified to net income
|
|
(336
|
)
|
326
|
|
|
|
|
|
|
|||
Items that may subsequently be reclassified to net income:
|
|
|
|
|||
Cash flow hedging derivative instruments:
|
|
|
|
|||
Unrealized gain (loss) in fair value of derivative instruments
|
|
725
|
|
(566
|
)
|
|
Reclassification to net income of (gain) loss on debt derivatives
|
|
(671
|
)
|
591
|
|
|
Reclassification to net income or property, plant and equipment of (gain) loss on expenditure derivatives
|
|
(8
|
)
|
39
|
|
|
Reclassification to net income for accrued interest
|
|
(43
|
)
|
(60
|
)
|
|
Related income tax (expense) recovery
|
|
(65
|
)
|
40
|
|
|
|
|
|
|
|||
Cash flow hedging derivative instruments
|
|
(62
|
)
|
44
|
|
|
|
|
|
|
|||
Equity-accounted investments:
|
|
|
|
|||
Share of other comprehensive income (loss) of equity-accounted investments, net of tax
|
|
14
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
Equity-accounted investments
|
|
14
|
|
(15
|
)
|
|
|
|
|
|
|||
Items that may subsequently be reclassified to net income
|
|
(48
|
)
|
29
|
|
|
|
|
|
|
|||
Other comprehensive (loss) income for the year
|
|
(384
|
)
|
355
|
|
|
|
|
|
|
|||
Comprehensive income for the year
|
|
1,675
|
|
2,200
|
|
Rogers Communications Inc.
|
5
|
2018 Annual Financial Statements
|
|
|
As at
December 31 |
|
As at
December 31 |
|
As at
January 1 |
|
|
|
Note
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
(restated, see note 2)
|
|
(restated, see note 2)
|
|
||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
405
|
|
—
|
|
—
|
|
|
Accounts receivable
|
14
|
|
2,259
|
|
2,035
|
|
1,944
|
|
Inventories
|
15
|
|
466
|
|
435
|
|
452
|
|
Current portion of contract assets
|
5
|
|
1,052
|
|
820
|
|
723
|
|
Other current assets
|
|
436
|
|
414
|
|
417
|
|
|
Current portion of derivative instruments
|
16
|
|
270
|
|
421
|
|
91
|
|
Total current assets
|
|
4,888
|
|
4,125
|
|
3,627
|
|
|
|
|
|
|
|
||||
Property, plant and equipment
|
7
|
|
11,780
|
|
11,143
|
|
10,749
|
|
Intangible assets
|
8
|
|
7,205
|
|
7,244
|
|
7,130
|
|
Investments
|
17
|
|
2,134
|
|
2,561
|
|
2,174
|
|
Derivative instruments
|
16
|
|
1,339
|
|
953
|
|
1,708
|
|
Contract assets
|
5
|
|
535
|
|
413
|
|
354
|
|
Other long-term assets
|
|
132
|
|
143
|
|
156
|
|
|
Deferred tax assets
|
12
|
|
—
|
|
3
|
|
8
|
|
Goodwill
|
8
|
|
3,905
|
|
3,905
|
|
3,905
|
|
|
|
|
|
|
||||
Total assets
|
|
31,918
|
|
30,490
|
|
29,811
|
|
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Bank advances
|
|
—
|
|
6
|
|
71
|
|
|
Short-term borrowings
|
18
|
|
2,255
|
|
1,585
|
|
800
|
|
Accounts payable and accrued liabilities
|
|
3,052
|
|
2,931
|
|
2,783
|
|
|
Income tax payable
|
|
177
|
|
62
|
|
186
|
|
|
Other current liabilities
|
19
|
|
132
|
|
132
|
|
285
|
|
Contract liabilities
|
5
|
|
233
|
|
278
|
|
302
|
|
Current portion of long-term debt
|
20
|
|
900
|
|
1,756
|
|
750
|
|
Current portion of derivative instruments
|
16
|
|
87
|
|
133
|
|
22
|
|
Total current liabilities
|
|
6,836
|
|
6,883
|
|
5,199
|
|
|
|
|
|
|
|
||||
Provisions
|
19
|
|
35
|
|
35
|
|
33
|
|
Long-term debt
|
20
|
|
13,390
|
|
12,692
|
|
15,330
|
|
Derivative instruments
|
16
|
|
22
|
|
147
|
|
118
|
|
Other long-term liabilities
|
21
|
|
546
|
|
613
|
|
562
|
|
Deferred tax liabilities
|
12
|
|
2,910
|
|
2,624
|
|
2,285
|
|
Total liabilities
|
|
23,739
|
|
22,994
|
|
23,527
|
|
|
|
|
|
|
|
||||
Shareholders' equity
|
23
|
|
8,179
|
|
7,496
|
|
6,284
|
|
|
|
|
|
|
||||
Total liabilities and shareholders' equity
|
|
31,918
|
|
30,490
|
|
29,811
|
|
|
|
|
|
|
|
||||
Guarantees
|
26
|
|
|
|
|
|||
Commitments and contingent liabilities
|
27
|
|
|
|
|
|||
Subsequent events
|
10, 16, 23
|
|
|
|
|
"Edward S. Rogers"
|
|
"John H. Clappison"
|
|
Edward S. Rogers
Director
|
|
John H. Clappison, FCPA, FCA
Director
|
|
Rogers Communications Inc.
|
6
|
2018 Annual Financial Statements
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Year ended December 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 (see note 2)
|
—
|
|
—
|
|
—
|
|
—
|
|
(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 year
|
—
|
|
—
|
|
—
|
|
—
|
|
2,059
|
|
—
|
|
—
|
|
—
|
|
2,059
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
Defined benefit pension plans, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
41
|
|
—
|
|
—
|
|
—
|
|
41
|
|
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(377
|
)
|
—
|
|
—
|
|
(377
|
)
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(62
|
)
|
—
|
|
(62
|
)
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14
|
|
14
|
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
41
|
|
(377
|
)
|
(62
|
)
|
14
|
|
(384
|
)
|
Comprehensive income (loss) for the year
|
—
|
|
—
|
|
—
|
|
—
|
|
2,100
|
|
(377
|
)
|
(62
|
)
|
14
|
|
1,675
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(988
|
)
|
—
|
|
—
|
|
—
|
|
(988
|
)
|
Shares issued on exercise of stock options
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Share class exchange
|
(1
|
)
|
(1,252
|
)
|
1
|
|
1,252
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total transactions with shareholders
|
(1
|
)
|
(1,252
|
)
|
1
|
|
1,254
|
|
(988
|
)
|
—
|
|
—
|
|
—
|
|
(988
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, December 31, 2018
|
71
|
|
111,155
|
|
406
|
|
403,657
|
|
7,182
|
|
636
|
|
(125
|
)
|
9
|
|
8,179
|
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Year ended December 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)
|
—
|
|
—
|
|
—
|
|
—
|
|
1,845
|
|
—
|
|
—
|
|
—
|
|
1,845
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
Defined benefit pension plans, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(45
|
)
|
—
|
|
—
|
|
—
|
|
(45
|
)
|
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
371
|
|
—
|
|
—
|
|
371
|
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
44
|
|
—
|
|
44
|
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(15
|
)
|
(15
|
)
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(45
|
)
|
371
|
|
44
|
|
(15
|
)
|
355
|
|
Comprehensive income (loss) for the year
|
—
|
|
—
|
|
—
|
|
—
|
|
1,800
|
|
371
|
|
44
|
|
(15
|
)
|
2,200
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(988
|
)
|
—
|
|
—
|
|
—
|
|
(988
|
)
|
Shares issued on exercise of stock options
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Share class exchange
|
—
|
|
(5
|
)
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total transactions with shareholders
|
—
|
|
(5
|
)
|
—
|
|
7
|
|
(988
|
)
|
—
|
|
—
|
|
—
|
|
(988
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, December 31, 2017
|
72
|
|
112,407
|
|
405
|
|
402,403
|
|
6,074
|
|
1,013
|
|
(63
|
)
|
(5
|
)
|
7,496
|
|
Rogers Communications Inc.
|
7
|
2018 Annual Financial Statements
|
Years ended December 31
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
(restated, see note 2)
|
|
||
Operating activities:
|
|
|
|
|||
Net income for the year
|
|
2,059
|
|
1,845
|
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
7, 8
|
|
2,211
|
|
2,142
|
|
Program rights amortization
|
8
|
|
58
|
|
64
|
|
Finance costs
|
10
|
|
793
|
|
746
|
|
Income tax expense
|
12
|
|
758
|
|
685
|
|
Post-employment benefits contributions, net of expense
|
22
|
|
(44
|
)
|
4
|
|
Gain on disposition of property, plant and equipment
|
7
|
|
(16
|
)
|
(49
|
)
|
Recovery on wind-down of shomi
|
11
|
|
—
|
|
(20
|
)
|
Net change in contract asset balances
|
5
|
|
(354
|
)
|
(156
|
)
|
Other
|
|
|
33
|
|
51
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
|
5,498
|
|
5,312
|
|
|
Change in non-cash operating working capital items
|
28
|
|
(114
|
)
|
(164
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
|
5,384
|
|
5,148
|
|
|
Income taxes paid
|
|
(370
|
)
|
(475
|
)
|
|
Interest paid
|
|
|
(726
|
)
|
(735
|
)
|
|
|
|
|
|||
Cash provided by operating activities
|
|
|
4,288
|
|
3,938
|
|
|
|
|
|
|||
Investing activities:
|
|
|
|
|||
Capital expenditures
|
7, 28
|
|
(2,790
|
)
|
(2,436
|
)
|
Additions to program rights
|
8
|
|
(54
|
)
|
(59
|
)
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
|
(125
|
)
|
109
|
|
|
Acquisitions and other strategic transactions, net of cash acquired
|
8
|
|
—
|
|
(184
|
)
|
Other
|
|
25
|
|
(60
|
)
|
|
|
|
|
|
|||
Cash used in investing activities
|
|
|
(2,944
|
)
|
(2,630
|
)
|
|
|
|
|
|||
Financing activities:
|
|
|
|
|||
Net proceeds received on short-term borrowings
|
18
|
|
508
|
|
858
|
|
Net repayment of long-term debt
|
20
|
|
(823
|
)
|
(1,034
|
)
|
Net proceeds (payments) on settlement of debt derivatives and forward contracts
|
16
|
|
388
|
|
(79
|
)
|
Transaction costs incurred
|
|
(18
|
)
|
—
|
|
|
Dividends paid
|
23
|
|
(988
|
)
|
(988
|
)
|
|
|
|
|
|||
Cash used in financing activities
|
|
|
(933
|
)
|
(1,243
|
)
|
|
|
|
|
|||
Change in cash and cash equivalents
|
|
411
|
|
65
|
|
|
Bank advances, beginning of year
|
|
|
(6
|
)
|
(71
|
)
|
|
|
|
|
|||
Cash and cash equivalents (bank advances), end of year
|
|
|
405
|
|
(6
|
)
|
Rogers Communications Inc.
|
8
|
2018 Annual Financial Statements
|
Page
|
|
Note
|
|
Page
|
|
Note
|
Note 1
|
Nature of the Business
|
|
Note 16
|
Financial Risk Management and Financial Instruments
|
||
Note 2
|
Significant Accounting Policies
|
|
|
|
||
Note 3
|
Capital Risk Management
|
|
Note 17
|
Investments
|
||
Note 4
|
Segmented Information
|
|
Note 18
|
Short-Term Borrowings
|
||
Note 5
|
Revenue
|
|
Note 19
|
Provisions
|
||
Note 6
|
Operating Costs
|
|
Note 20
|
Long-Term Debt
|
||
Note 7
|
Property, Plant and Equipment
|
|
Note 21
|
Other Long-Term Liabilities
|
||
Note 8
|
Intangible Assets and Goodwill
|
|
Note 22
|
Post-Employment Benefits
|
||
Note 9
|
Restructuring, Acquisition and Other
|
|
Note 23
|
Shareholders' Equity
|
||
Note 10
|
Finance Costs
|
|
Note 24
|
Stock-Based Compensation
|
||
Note 11
|
Other (Income) Expense
|
|
Note 25
|
Related Party Transactions
|
||
Note 12
|
Income Taxes
|
|
Note 26
|
Guarantees
|
||
Note 13
|
Earnings Per Share
|
|
Note 27
|
Commitments and Contingent Liabilities
|
||
Note 14
|
Accounts Receivable
|
|
Note 28
|
Supplemental Cash Flow Information
|
||
Note 15
|
Inventories
|
|
|
|
|
Rogers Communications Inc.
|
9
|
2018 Annual Financial Statements
|
Segment
|
Principal activities
|
Wireless
|
Wireless telecommunications operations for Canadian consumers and businesses.
|
Cable
|
Cable telecommunications operations, including Internet, television, telephony (phone), and smart home monitoring 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.
|
•
|
university and college students who live in residences moving out early in the second quarter and canceling their service as well as students moving in late in the third quarter and signing up for cable service;
|
•
|
individuals temporarily suspending service for extended vacations or seasonal relocations; and
|
•
|
the concentrated marketing we generally conduct in our fourth quarter.
|
•
|
periods of increased consumer activity and their impact on advertising and related retail cycles, which tend to be most active in the fourth quarter due to holiday spending and slower in the first quarter;
|
•
|
the Major League Baseball season, where:
|
•
|
games played are concentrated in the spring, summer, and fall months (generally the second and third quarters of the year);
|
•
|
revenue related to game day ticket sales, merchandise sales, and advertising are concentrated in the spring, summer, and fall months (generally the second and third quarters of the year), with postseason games commanding a premium in advertising revenue and additional revenue from game day ticket sales and merchandise sales, if and when the Toronto Blue Jays play in the postseason; and
|
Rogers Communications Inc.
|
10
|
2018 Annual Financial Statements
|
•
|
programming and production costs and player payroll are expensed based on the number of games aired or played, as applicable; and
|
•
|
the National Hockey League (NHL) season, where:
|
•
|
regular season games are concentrated in the fall and winter months (generally the first and fourth quarters of the year) and playoff games are concentrated in the spring months (generally the second quarter of the year). We expect a correlation between the quality of revenue and earnings and the extent of Canadian teams' presence during the playoffs;
|
•
|
programming and production costs are expensed based on the timing of when the rights are aired or are expected to be consumed; and
|
•
|
advertising revenue and programming expenses are concentrated in the fall, winter, and spring months, with playoff games commanding a premium in advertising revenue.
|
(a)
|
BASIS OF PRESENTATION
|
•
|
certain financial instruments as disclosed in
note 16
, which are measured at fair value;
|
•
|
the net deferred pension liability, which is measured as described in
note 22
; and
|
•
|
liabilities for stock-based compensation, which are measured at fair value as disclosed in
note 24
.
|
(b)
|
BASIS OF CONSOLIDATION
|
(c)
|
FOREIGN CURRENCY TRANSLATION
|
•
|
monetary assets and liabilities - at the exchange rate in effect as at the date of the Consolidated Statements of Financial Position;
|
•
|
non-monetary assets and liabilities, and related depreciation and amortization - at the historical exchange rates; and
|
•
|
revenue and expenses other than depreciation and amortization - at the average rate for the month in which the transaction was recognized.
|
(d)
|
BUSINESS COMBINATIONS
|
(e)
|
NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2018
|
•
|
Amendments to IFRS 2,
Share-based payment
, providing guidance on accounting for vesting and non-vesting conditions in regards to share-based compensation.
|
•
|
IFRIC 22,
Foreign
c
urrency transaction and advanced consideration,
clarifying the requirements in determining the date of transactions and which foreign exchange rate to use in when translating assets, expenses, or income on initial recognition
.
|
Rogers Communications Inc.
|
11
|
2018 Annual Financial Statements
|
•
|
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 corresponds with the amount invoiced to the customer;
|
•
|
not disclose the amount of the transaction price relating to unsatisfied or partially satisfied performance obligations for reporting periods before January 1, 2018 (the date of initial application) and when we expect to recognize that amount as revenue; 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.
|
12
|
2018 Annual Financial Statements
|
|
|
|
Year ended December 31, 2017
|
|
||||
(In millions of dollars, except per share amounts)
|
Reference
|
As previously reported
|
|
Adjustments
|
|
Restated
|
|
|
|
|
|
|
|
||||
Revenue
|
i, iii
|
14,143
|
|
226
|
|
14,369
|
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
||||
Operating costs
|
ii, iii
|
8,825
|
|
42
|
|
8,867
|
|
|
Depreciation and amortization
|
|
2,142
|
|
—
|
|
2,142
|
|
|
Gain on disposition of property, plant and equipment
|
|
(49
|
)
|
—
|
|
(49
|
)
|
|
Restructuring, acquisition and other
|
|
152
|
|
—
|
|
152
|
|
|
Finance costs
|
|
746
|
|
—
|
|
746
|
|
|
Other expense (income)
|
|
(19
|
)
|
—
|
|
(19
|
)
|
|
|
|
|
|
|
||||
Income before income tax expense
|
|
2,346
|
|
184
|
|
2,530
|
|
|
Income tax expense
|
|
635
|
|
50
|
|
685
|
|
|
|
|
|
|
|
|
|||
Net income for the period
|
|
1,711
|
|
134
|
|
1,845
|
|
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
||||
Basic
|
|
$3.32
|
|
$0.26
|
|
$3.58
|
||
Diluted
|
|
$3.31
|
$0.26
|
$3.57
|
Rogers Communications Inc.
|
13
|
2018 Annual Financial Statements
|
|
|
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
|
|
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.
|
14
|
2018 Annual Financial Statements
|
Rogers Communications Inc.
|
15
|
2018 Annual Financial Statements
|
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
2
|
Other financial liabilities (amortized cost)
|
Amortized cost
|
Accounts payable
|
Other financial liabilities (amortized cost)
|
Amortized cost
|
Accrued liabilities
|
Other financial liabilities (amortized cost)
|
Amortized cost
|
Long-term debt
2
|
Other financial liabilities (amortized cost)
|
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
5
|
Held-for-trading (FVTPL)
|
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
|
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.
|
(f)
|
ADDITIONAL SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS
|
•
|
information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the amounts recognized in the consolidated financial statements;
|
•
|
information about judgments made in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements; and
|
•
|
information on our significant accounting policies.
|
Note
|
Topic
|
Page
|
Accounting Policy
|
Use of Estimates
|
Use of Judgments
|
4
|
Reportable Segments
|
X
|
|
X
|
|
5
|
Revenue Recognition
|
X
|
X
|
X
|
|
7
|
Property, Plant and Equipment
|
X
|
X
|
X
|
|
8
|
Intangible Assets and Goodwill
|
X
|
X
|
X
|
|
12
|
Income Taxes
|
X
|
|
X
|
|
13
|
Earnings Per Share
|
X
|
|
|
|
14
|
Accounts Receivable
|
X
|
|
|
|
15
|
Inventories
|
X
|
|
|
|
16
|
Financial Instruments
|
X
|
X
|
X
|
|
17
|
Investments
|
X
|
|
|
|
19
|
Provisions
|
X
|
X
|
X
|
|
22
|
Post-Employment Benefits
|
X
|
X
|
|
|
24
|
Stock-Based Compensation
|
X
|
X
|
|
|
27
|
Commitments and Contingent Liabilities
|
X
|
|
X
|
Rogers Communications Inc.
|
16
|
2018 Annual Financial Statements
|
(g)
|
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
|
•
|
apply a single discount rate to a portfolio of leases with similar characteristics;
|
•
|
exclude initial direct costs from measuring the right-of-use asset as at January 1, 2019; and
|
•
|
use hindsight in determining the lease term where the contract contains purchase, extension, or termination options.
|
Rogers Communications Inc.
|
17
|
2018 Annual Financial Statements
|
(In billions of dollars)
|
Reference
|
As reported as at
December 31, 2018
|
|
Estimated effect of IFRS 16 transition
|
|
Subsequent to transition as at
January 1, 2019
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Other current assets
|
|
0.4
|
|
***
|
|
0.4
|
|
Remainder of current assets
|
|
4.5
|
|
—
|
|
4.5
|
|
Total current assets
|
|
4.9
|
|
***
|
|
4.9
|
|
|
|
|
|
|
|||
Property, plant and equipment
|
i
|
11.8
|
|
1.5
|
|
13.3
|
|
Remainder of long-term assets
|
|
15.2
|
|
—
|
|
15.2
|
|
|
|
|
|
|
|||
Total assets
|
|
31.9
|
|
1.5
|
|
33.4
|
|
|
|
|
|
|
|||
Liabilities and shareholders’ equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable and accrued liabilities
|
|
3.1
|
|
(0.1
|
)
|
3.0
|
|
Current portion of lease liabilities
|
i
|
—
|
|
0.2
|
|
0.2
|
|
Remainder of current liabilities
|
|
3.7
|
|
—
|
|
3.7
|
|
Total current liabilities
|
|
6.8
|
|
0.1
|
|
6.9
|
|
|
|
|
|
|
|||
Lease liabilities
|
i
|
—
|
|
1.4
|
|
1.4
|
|
Deferred tax liabilities
|
|
2.9
|
|
***
|
|
2.9
|
|
Remainder of long-term liabilities
|
|
14.0
|
|
—
|
|
14.0
|
|
Total liabilities
|
|
23.7
|
|
1.5
|
|
25.2
|
|
|
|
|
|
|
|||
Shareholders’ equity
|
|
8.2
|
|
***
|
|
8.2
|
|
|
|
|
|
|
|||
Total liabilities and shareholders’ equity
|
|
31.9
|
|
1.5
|
|
33.4
|
|
•
|
fixed payments, including in-substance fixed payments;
|
•
|
variable lease payments that depend on an index or rate;
|
•
|
amounts expected to be payable under a residual value guarantee; and
|
•
|
the exercise price under a purchase option that we are reasonably certain to exercise, lease payments in an optional renewal period if we are reasonably certain to exercise an extension option, and penalties for early termination of a lease unless we are reasonably certain not to terminate early.
|
•
|
the initial amount of the lease liability, adjusted for any lease payments made at or before the commencement date; plus
|
•
|
any initial direct costs incurred; and
|
•
|
an estimate of costs to dismantle and remove the underlying asset or restore the site on which it is located; less
|
•
|
any lease incentives received.
|
Rogers Communications Inc.
|
18
|
2018 Annual Financial Statements
|
•
|
the non-cancellable period of the lease;
|
•
|
periods covered by options to extend the lease, where we are reasonably certain to exercise the option; and
|
•
|
periods covered by options to terminate the lease, where we are reasonably certain not to exercise the option.
|
Rogers Communications Inc.
|
19
|
2018 Annual Financial Statements
|
Year ended December 31, 2018
|
Note
|
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate items and eliminations
|
|
Consolidated totals
|
|
|
(In millions of dollars)
|
|||||||||||||
|
|
|
|
|
|
|
|||||||
Revenue
|
5
|
|
9,200
|
|
3,932
|
|
2,168
|
|
(204
|
)
|
15,096
|
|
|
|
|
|
|
|
|
|
|||||||
Operating costs
|
6
|
|
5,110
|
|
2,058
|
|
1,972
|
|
(27
|
)
|
9,113
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA
|
|
4,090
|
|
1,874
|
|
196
|
|
(177
|
)
|
5,983
|
|
||
|
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
7, 8
|
|
|
|
|
|
2,211
|
|
|||||
Gain on disposition of property, plant and equipment
|
7
|
|
|
|
|
|
(16
|
)
|
|||||
Restructuring, acquisition and other
|
9
|
|
|
|
|
|
210
|
|
|||||
Finance costs
|
10
|
|
|
|
|
|
793
|
|
|||||
Other income
|
11
|
|
|
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
|
|
2,817
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures before proceeds on disposition
1
|
|
|
1,086
|
|
1,429
|
|
90
|
|
210
|
|
2,815
|
|
|
Goodwill
|
|
|
1,160
|
|
1,808
|
|
937
|
|
—
|
|
3,905
|
|
|
Total assets
|
|
|
16,572
|
|
7,666
|
|
2,438
|
|
5,242
|
|
31,918
|
|
1
|
Excludes proceeds on disposition of
$25 million
(see
note 28
).
|
Year ended December 31, 2017
|
Note
|
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate items and eliminations
|
|
Consolidated totals
|
|
|
(In millions of dollars)
|
|||||||||||||
(restated, see note 2)
|
|||||||||||||
|
|
|
|
|
|
|
|||||||
Revenue
|
5
|
|
8,569
|
|
3,894
|
|
2,153
|
|
(247
|
)
|
14,369
|
|
|
|
|
|
|
|
|
|
|||||||
Operating costs
|
6
|
|
4,843
|
|
2,075
|
|
2,026
|
|
(77
|
)
|
8,867
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA
|
|
3,726
|
|
1,819
|
|
127
|
|
(170
|
)
|
5,502
|
|
||
|
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
7, 8
|
|
|
|
|
|
2,142
|
|
|||||
Gain on disposition of property, plant and equipment
|
7
|
|
|
|
|
|
(49
|
)
|
|||||
Restructuring, acquisition and other
|
9
|
|
|
|
|
|
152
|
|
|||||
Finance costs
|
10
|
|
|
|
|
|
746
|
|
|||||
Other income
|
11
|
|
|
|
|
|
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
|
|
2,530
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures before proceeds on disposition
1
|
|
|
806
|
|
1,334
|
|
83
|
|
287
|
|
2,510
|
|
|
Goodwill
|
|
|
1,160
|
|
1,808
|
|
937
|
|
—
|
|
3,905
|
|
|
Total assets
|
|
|
15,860
|
|
7,315
|
|
2,405
|
|
4,910
|
|
30,490
|
|
1
|
Excludes proceeds on disposition of
$74 million
(see
note 28
).
|
Rogers Communications Inc.
|
20
|
2018 Annual Financial Statements
|
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 contract based on their relative fair values; and
|
5.
|
recognize revenue when the relevant criteria are met for each performance obligation.
|
Performance obligations from contracts with customers
|
Timing of satisfaction of the performance obligation
|
Wireless airtime and data services, cable, telephony, Internet, and smart home monitoring services, network services, media subscriptions, and rental of equipment
|
As the service is provided (usually monthly)
|
Roaming, long-distance, and other optional or non-subscription services, and pay-per-use services
|
As the service is provided
|
Wireless devices and related equipment
|
Upon activation or purchase by the end customer
|
Installation services for Cable subscribers
|
When the services are performed
|
Advertising
|
When the advertising airs on our radio or television stations, is featured in our publications, or displayed on our digital properties
|
Subscriptions by television stations for subscriptions from cable and satellite providers
|
When the services are delivered to cable and satellite providers' subscribers (usually monthly)
|
Toronto Blue Jays' home game admission and concessions
|
When the related games are played during the baseball season and when goods are sold
|
Toronto Blue Jays, radio, and television broadcast agreements
|
When the related games are aired
|
Sublicensing of program rights
|
Over the course of the applicable licence period
|
Rogers Communications Inc.
|
21
|
2018 Annual Financial Statements
|
•
|
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.
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Balance, beginning of year
|
1,233
|
|
1,077
|
|
Additions from new contracts with customers, net of terminations and renewals
|
1,572
|
|
1,196
|
|
Amortization of contract assets to accounts receivable
|
(1,218
|
)
|
(1,040
|
)
|
|
|
|
||
Balance, end of year
|
1,587
|
|
1,233
|
|
Rogers Communications Inc.
|
22
|
2018 Annual Financial Statements
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Balance, beginning of year
|
278
|
|
302
|
|
Revenue deferred in previous year and recognized as revenue in current year
|
(268
|
)
|
(284
|
)
|
Net additions from contracts with customers
|
223
|
|
260
|
|
|
|
|
||
Balance, end of year
|
233
|
|
278
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Balance, beginning of year
|
278
|
|
260
|
|
Additions to deferred commission cost assets
|
340
|
|
310
|
|
Amortization recognized on deferred commission cost assets
|
(322
|
)
|
(292
|
)
|
|
|
|
||
Balance, end of year
|
296
|
|
278
|
|
(In millions of dollars)
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
Telecommunications service
|
2,410
|
|
985
|
|
169
|
|
137
|
|
3,701
|
|
•
|
the unsatisfied portions of performance obligations related to contracts with a duration of one year or less; or
|
•
|
the unsatisfied portions of performance obligations where the revenue we recognize corresponds with the amount invoiced to the customer.
|
Rogers Communications Inc.
|
23
|
2018 Annual Financial Statements
|
|
Years ended December 31
|
|
||
|
2018
|
|
2017
|
|
(In millions of dollars)
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Wireless
|
|
|
||
Service revenue
|
7,091
|
|
6,765
|
|
Equipment revenue
|
2,109
|
|
1,804
|
|
|
|
|
||
Total Wireless
|
9,200
|
|
8,569
|
|
|
|
|
||
Cable
|
|
|
||
Internet
|
2,114
|
|
1,967
|
|
Television
|
1,442
|
|
1,501
|
|
Phone
|
363
|
|
411
|
|
Service revenue
|
3,919
|
|
3,879
|
|
Equipment revenue
|
13
|
|
15
|
|
|
|
|
||
Total Cable
|
3,932
|
|
3,894
|
|
|
|
|
||
Total Media
|
2,168
|
|
2,153
|
|
|
|
|
||
Corporate items and intercompany eliminations
|
(204
|
)
|
(247
|
)
|
|
|
|
||
Total revenue
|
15,096
|
|
14,369
|
|
|
Years ended December 31
|
|
||
|
2018
|
|
2017
|
|
(In millions of dollars)
|
|
(restated, see note 2)
|
|
|
|
|
|
||
Cost of equipment sales
|
2,284
|
|
2,022
|
|
Merchandise for resale
|
231
|
|
237
|
|
Other external purchases
|
4,509
|
|
4,497
|
|
Employee salaries, benefits, and stock-based compensation
|
2,089
|
|
2,111
|
|
|
|
|
||
Total operating costs
|
9,113
|
|
8,867
|
|
Rogers Communications Inc.
|
24
|
2018 Annual Financial Statements
|
•
|
the cost of materials and direct labour;
|
•
|
costs directly associated with bringing the assets to a working condition for their intended use;
|
•
|
expected costs of decommissioning the items and restoring the sites on which they are located (see
note 19
); and
|
•
|
borrowing costs on qualifying assets.
|
Asset
|
Basis
|
Estimated useful life
|
Buildings
|
Diminishing balance
|
5 to 40 years
|
Cable and wireless network
|
Straight-line
|
3 to 40 years
|
Computer equipment and software
|
Straight-line
|
4 to 10 years
|
Customer premise equipment
|
Straight-line
|
3 to 6 years
|
Leasehold improvements
|
Straight-line
|
Over shorter of estimated useful life or lease term
|
Equipment and vehicles
|
Diminishing balance
|
3 to 20 years
|
•
|
fair value less costs to sell; and
|
•
|
value in use.
|
Rogers Communications Inc.
|
25
|
2018 Annual Financial Statements
|
•
|
future cash flows;
|
•
|
terminal growth rates; and
|
•
|
discount rates.
|
•
|
Analyzing discounted cash flows - we estimate the discounted future cash flows for five-year periods and a terminal value, similar to the value in use methodology described above, while applying assumptions consistent with those a market participant would make. Future cash flows are based on our estimates of expected future operating results of the CGU. Our estimates of future cash flows, terminal values, and discount rates consider similar factors to those described above for value in use estimates; or
|
•
|
Using a market approach - we estimate the recoverable amount of the CGU using multiples of operating performance of comparable entities and precedent transactions in that industry.
|
(In millions of dollars)
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|
||||||||||||
|
Cost
|
|
Accumulated depreciation
|
|
Net carrying amount
|
|
Cost
|
|
Accumulated depreciation
|
|
Net carrying amount
|
|
Cost
|
|
Accumulated depreciation
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Land and buildings
|
1,125
|
|
(428
|
)
|
697
|
|
1,090
|
|
(397
|
)
|
693
|
|
1,062
|
|
(375
|
)
|
687
|
|
Cable and wireless networks
|
21,024
|
|
(13,550
|
)
|
7,474
|
|
20,252
|
|
(13,206
|
)
|
7,046
|
|
20,108
|
|
(13,035
|
)
|
7,073
|
|
Computer equipment and software
|
5,514
|
|
(3,305
|
)
|
2,209
|
|
4,996
|
|
(2,807
|
)
|
2,189
|
|
4,296
|
|
(2,424
|
)
|
1,872
|
|
Customer premise equipment
|
1,908
|
|
(1,279
|
)
|
629
|
|
1,565
|
|
(1,090
|
)
|
475
|
|
1,560
|
|
(1,156
|
)
|
404
|
|
Leasehold improvements
|
539
|
|
(250
|
)
|
289
|
|
496
|
|
(220
|
)
|
276
|
|
457
|
|
(193
|
)
|
264
|
|
Equipment and vehicles
|
1,292
|
|
(810
|
)
|
482
|
|
1,246
|
|
(782
|
)
|
464
|
|
1,169
|
|
(720
|
)
|
449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total property, plant and equipment
|
31,402
|
|
(19,622
|
)
|
11,780
|
|
29,645
|
|
(18,502
|
)
|
11,143
|
|
28,652
|
|
(17,903
|
)
|
10,749
|
|
Rogers Communications Inc.
|
26
|
2018 Annual Financial Statements
|
(In millions of dollars)
|
December 31, 2017
|
|
|
December 31, 2018
|
|
|||||
|
Net carrying
amount
|
|
Additions
1
|
|
Depreciation
|
|
Other
2
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
||||
Land and buildings
|
693
|
|
40
|
|
(32
|
)
|
(4
|
)
|
697
|
|
Cable and wireless networks
|
7,046
|
|
1,556
|
|
(1,128
|
)
|
—
|
|
7,474
|
|
Computer equipment and software
|
2,189
|
|
653
|
|
(633
|
)
|
—
|
|
2,209
|
|
Customer premise equipment
|
475
|
|
423
|
|
(269
|
)
|
—
|
|
629
|
|
Leasehold improvements
|
276
|
|
44
|
|
(31
|
)
|
—
|
|
289
|
|
Equipment and vehicles
|
464
|
|
99
|
|
(81
|
)
|
—
|
|
482
|
|
|
|
|
|
|
|
|||||
Total property, plant and equipment
|
11,143
|
|
2,815
|
|
(2,174
|
)
|
(4
|
)
|
11,780
|
|
1
|
Excludes proceeds on disposition of
$25 million
(see
note 28
).
|
2
|
Includes disposals, reclassifications, and other adjustments.
|
(In millions of dollars)
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|||||
|
Net carrying
amount
|
|
Additions
1
|
|
Depreciation
|
|
Other
2
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
||||
Land and buildings
|
687
|
|
61
|
|
(30
|
)
|
(25
|
)
|
693
|
|
Cable and wireless networks
|
7,073
|
|
1,125
|
|
(1,150
|
)
|
(2
|
)
|
7,046
|
|
Computer equipment and software
|
1,872
|
|
867
|
|
(549
|
)
|
(1
|
)
|
2,189
|
|
Customer premise equipment
|
404
|
|
315
|
|
(244
|
)
|
—
|
|
475
|
|
Leasehold improvements
|
264
|
|
40
|
|
(28
|
)
|
—
|
|
276
|
|
Equipment and vehicles
|
449
|
|
102
|
|
(86
|
)
|
(1
|
)
|
464
|
|
|
|
|
|
|
|
|||||
Total property, plant and equipment
|
10,749
|
|
2,510
|
|
(2,087
|
)
|
(29
|
)
|
11,143
|
|
1
|
Excludes proceeds on disposition of
$74 million
(see
note 28
).
|
2
|
Includes disposals, reclassifications, and other adjustments.
|
•
|
its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; and
|
•
|
any directly attributable cost of preparing the asset for its intended use.
|
Rogers Communications Inc.
|
27
|
2018 Annual Financial Statements
|
Intangible asset
|
Estimated useful life
|
Customer relationships
|
3 to 10 years
|
•
|
fair value less costs to sell; and
|
•
|
value in use.
|
•
|
future cash flows;
|
•
|
terminal growth rates; and
|
•
|
discount rates.
|
Rogers Communications Inc.
|
28
|
2018 Annual Financial Statements
|
•
|
Analyzing discounted cash flows - we estimate the discounted future cash flows for five-year periods and a terminal value, similar to the value in use methodology described above, while applying assumptions consistent with those a market participant would make. Future cash flows are based on our estimates of expected future operating results of the CGU. Our estimates of future cash flows, terminal values, and discount rates consider similar factors to those described above for value in use estimates; or
|
•
|
Using a market approach - we estimate the recoverable amount of the CGU using multiples of operating performance of comparable entities and precedent transactions in that industry.
|
(In millions of dollars)
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|
||||||||||||||||||
|
Cost prior to impairment losses
|
|
Accumulated amortization
|
|
Accumulated impairment losses
|
|
Net carrying amount
|
|
Cost prior to impairment losses
|
|
Accumulated amortization
|
|
Accumulated impairment losses
|
|
Net carrying amount
|
|
Cost prior to impairment losses
|
|
Accumulated amortization
|
|
Accumulated impairment losses
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Indefinite-life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Spectrum licences
|
6,600
|
|
—
|
|
—
|
|
6,600
|
|
6,600
|
|
—
|
|
—
|
|
6,600
|
|
6,416
|
|
—
|
|
—
|
|
6,416
|
|
Broadcast licences
|
333
|
|
—
|
|
(99
|
)
|
234
|
|
329
|
|
—
|
|
(99
|
)
|
230
|
|
329
|
|
—
|
|
(99
|
)
|
230
|
|
Brand names
|
420
|
|
(270
|
)
|
(14
|
)
|
136
|
|
420
|
|
(270
|
)
|
(14
|
)
|
136
|
|
420
|
|
(270
|
)
|
(14
|
)
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finite-life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Customer relationships
|
1,609
|
|
(1,562
|
)
|
—
|
|
47
|
|
1,609
|
|
(1,525
|
)
|
—
|
|
84
|
|
1,609
|
|
(1,470
|
)
|
—
|
|
139
|
|
Acquired program rights
|
251
|
|
(58
|
)
|
(5
|
)
|
188
|
|
263
|
|
(64
|
)
|
(5
|
)
|
194
|
|
289
|
|
(75
|
)
|
(5
|
)
|
209
|
|
Total intangible assets
|
9,213
|
|
(1,890
|
)
|
(118
|
)
|
7,205
|
|
9,221
|
|
(1,859
|
)
|
(118
|
)
|
7,244
|
|
9,063
|
|
(1,815
|
)
|
(118
|
)
|
7,130
|
|
Goodwill
|
4,126
|
|
—
|
|
(221
|
)
|
3,905
|
|
4,126
|
|
—
|
|
(221
|
)
|
3,905
|
|
4,126
|
|
—
|
|
(221
|
)
|
3,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total intangible assets and goodwill
|
13,339
|
|
(1,890
|
)
|
(339
|
)
|
11,110
|
|
13,347
|
|
(1,859
|
)
|
(339
|
)
|
11,149
|
|
13,189
|
|
(1,815
|
)
|
(339
|
)
|
11,035
|
|
Rogers Communications Inc.
|
29
|
2018 Annual Financial Statements
|
(In millions of dollars)
|
December 31, 2017
|
|
December 31, 2018
|
|
||||||
|
Net carrying amount
|
|
Net additions
|
|
Amortization
1
|
|
Other
2
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
||||
Spectrum licences
|
6,600
|
|
—
|
|
—
|
|
—
|
|
6,600
|
|
Broadcast licences
|
230
|
|
4
|
|
—
|
|
—
|
|
234
|
|
Brand names
|
136
|
|
—
|
|
—
|
|
—
|
|
136
|
|
Customer relationships
|
84
|
|
—
|
|
(37
|
)
|
—
|
|
47
|
|
|
7,050
|
|
4
|
|
(37
|
)
|
—
|
|
7,017
|
|
Acquired program rights
|
194
|
|
54
|
|
(58
|
)
|
(2
|
)
|
188
|
|
Total intangible assets
|
7,244
|
|
58
|
|
(95
|
)
|
(2
|
)
|
7,205
|
|
Goodwill
|
3,905
|
|
—
|
|
—
|
|
—
|
|
3,905
|
|
|
|
|
|
|
|
|||||
Total intangible assets and goodwill
|
11,149
|
|
58
|
|
(95
|
)
|
(2
|
)
|
11,110
|
|
1
|
Of the
$95 million
of total amortization,
$58 million
related to acquired program rights is included in other external purchases in operating costs (see
note 6
), and
$37 million
in depreciation and amortization on the Consolidated Statements of Income.
|
2
|
Includes disposals, writedowns, reclassifications, and other adjustments.
|
(In millions of dollars)
|
December 31, 2016
|
|
December 31, 2017
|
|
||||||
|
Net carrying amount
|
|
Net additions
|
|
Amortization
1
|
|
Other
2
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
||||
Spectrum licences
|
6,416
|
|
184
|
|
—
|
|
—
|
|
6,600
|
|
Broadcast licences
|
230
|
|
11
|
|
—
|
|
(11
|
)
|
230
|
|
Brand names
|
136
|
|
—
|
|
—
|
|
—
|
|
136
|
|
Customer relationships
|
139
|
|
—
|
|
(55
|
)
|
—
|
|
84
|
|
|
6,921
|
|
195
|
|
(55
|
)
|
(11
|
)
|
7,050
|
|
Acquired program rights
|
209
|
|
59
|
|
(64
|
)
|
(10
|
)
|
194
|
|
Total intangible assets
|
7,130
|
|
254
|
|
(119
|
)
|
(21
|
)
|
7,244
|
|
Goodwill
|
3,905
|
|
—
|
|
—
|
|
—
|
|
3,905
|
|
|
|
|
|
|
|
|||||
Total intangible assets and goodwill
|
11,035
|
|
254
|
|
(119
|
)
|
(21
|
)
|
11,149
|
|
1
|
Of the
$119 million
of total amortization,
$64 million
related to acquired program rights is included in other external purchases in operating costs (see
note 6
), and
$55 million
in depreciation and amortization on the Consolidated Statements of Income.
|
2
|
Includes disposals, writedowns, reclassifications, and other adjustments.
|
(In millions of dollars, except periods used and rates)
|
|
|
|
|
|||||
|
Carrying value of goodwill
|
|
Carrying value of indefinite-life intangible assets
|
|
Recoverable amount method
|
Period of projected cash flows (years)
|
|
Terminal growth rates (%)
|
Pre-tax discount rates (%)
|
|
|
|
|
|
|
|
|
||
Wireless
|
1,160
|
|
6,734
|
|
Value in use
|
5
|
|
0.5
|
8.4
|
Cable
|
1,808
|
|
—
|
|
Value in use
|
5
|
|
1.5
|
7.8
|
Media
|
937
|
|
236
|
|
Fair value less cost to sell
|
5
|
|
2.0
|
11.3
|
Rogers Communications Inc.
|
30
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
|||
(In millions of dollars)
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
|
|||
Interest on borrowings
1
|
|
709
|
|
740
|
|
|
Interest on post-employment benefits liability
|
22
|
|
14
|
|
12
|
|
Loss on repayment of long-term debt
|
20
|
|
28
|
|
—
|
|
Loss (gain) on foreign exchange
|
|
136
|
|
(107
|
)
|
|
Change in fair value of derivative instruments
|
|
(95
|
)
|
99
|
|
|
Capitalized interest
|
|
(20
|
)
|
(18
|
)
|
|
Other
|
|
21
|
|
20
|
|
|
|
|
|
|
|||
Total finance costs
|
|
793
|
|
746
|
|
|
|
Years ended December 31
|
|
|||
(In millions of dollars)
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
|
|||
Income from associates and joint ventures
|
17
|
|
—
|
|
(14
|
)
|
Other investment income
|
|
(32
|
)
|
(5
|
)
|
|
|
|
|
|
|||
Total other income
|
|
(32
|
)
|
(19
|
)
|
Rogers Communications Inc.
|
31
|
2018 Annual Financial Statements
|
•
|
the same taxable entity; or
|
•
|
different taxable entities where these entities intend to settle current tax assets and liabilities on a net basis or the tax assets and liabilities will be realized and settled simultaneously.
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2)
|
|
|
|
|
|
|
||
Current tax expense:
|
|
|
|
||
Total current tax expense
|
|
483
|
|
351
|
|
|
|
|
|
||
Deferred tax expense:
|
|
|
|
||
Origination of temporary differences
|
|
275
|
|
332
|
|
Revaluation of deferred tax balances due to legislative changes
|
|
—
|
|
2
|
|
|
|
|
|
||
Total deferred tax expense
|
|
275
|
|
334
|
|
|
|
|
|
||
Total income tax expense
|
|
758
|
|
685
|
|
|
|
Years ended December 31
|
|
||
(In millions of dollars, except rates)
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2)
|
|
|
|
|
|
|
||
Statutory income tax rate
|
|
26.7
|
%
|
26.7
|
%
|
Income before income tax expense
|
|
2,817
|
|
2,530
|
|
|
|
|
|
||
Computed income tax expense
|
|
752
|
|
676
|
|
Increase (decrease) in income tax expense resulting from:
|
|
|
|
||
Non-deductible stock-based compensation
|
|
5
|
|
9
|
|
Non-deductible portion of equity losses
|
|
1
|
|
—
|
|
Non-deductible loss on FVTOCI investments
|
|
—
|
|
7
|
|
Income tax adjustment, legislative tax change
|
|
—
|
|
2
|
|
Non-taxable portion of capital gains
|
|
(9
|
)
|
(10
|
)
|
Other
|
|
9
|
|
1
|
|
|
|
|
|
||
Total income tax expense
|
|
758
|
|
685
|
|
Effective income tax rate
|
|
26.9
|
%
|
27.1
|
%
|
Rogers Communications Inc.
|
32
|
2018 Annual Financial Statements
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
(restated, see note 2)
|
|
|
|
|
|
|
||
Deferred tax assets
|
|
—
|
|
3
|
|
Deferred tax liabilities
|
|
(2,910
|
)
|
(2,624
|
)
|
|
|
|
|
||
Net deferred tax liability
|
|
(2,910
|
)
|
(2,621
|
)
|
Deferred tax assets (liabilities)
(In millions of dollars) |
Property, plant and equipment and inventory
|
|
Goodwill and other intangibles
|
|
Investments
|
|
Non-capital loss carryforwards
|
|
Contract and deferred commission cost assets
|
|
Other
|
|
Total
|
|
|
|
|
|
|
|
|
|
|||||||
January 1, 2018
|
(1,060
|
)
|
(1,075
|
)
|
(126
|
)
|
18
|
|
(418
|
)
|
40
|
|
(2,621
|
)
|
(Expense) recovery in net income
|
(85
|
)
|
(117
|
)
|
(3
|
)
|
11
|
|
(97
|
)
|
16
|
|
(275
|
)
|
Recovery (expense) in other comprehensive income
|
—
|
|
—
|
|
63
|
|
—
|
|
—
|
|
(77
|
)
|
(14
|
)
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2018
|
(1,145
|
)
|
(1,192
|
)
|
(66
|
)
|
29
|
|
(515
|
)
|
(21
|
)
|
(2,910
|
)
|
Deferred tax assets (liabilities)
(In millions of dollars)
|
Property, plant and equipment and inventory
|
|
Goodwill and other intangibles
|
|
Investments
|
|
Non-capital loss carryforwards
|
|
Contract and deferred commission cost assets
|
|
Other
|
|
Total
|
|
(restated, see note 2)
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
January 1, 2017
|
(947
|
)
|
(953
|
)
|
(61
|
)
|
24
|
|
(368
|
)
|
28
|
|
(2,277
|
)
|
Expense in net income
|
(113
|
)
|
(117
|
)
|
(3
|
)
|
(6
|
)
|
(50
|
)
|
(45
|
)
|
(334
|
)
|
(Expense) recovery in other comprehensive income
|
—
|
|
—
|
|
(62
|
)
|
—
|
|
—
|
|
57
|
|
(5
|
)
|
Other
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2017
|
(1,060
|
)
|
(1,075
|
)
|
(126
|
)
|
18
|
|
(418
|
)
|
40
|
|
(2,621
|
)
|
|
As at December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Realized and accrued capital losses in Canada that can be applied against future capital gains
|
98
|
|
—
|
|
Tax losses in foreign jurisdictions that expire between 2023 and 2037
|
68
|
|
41
|
|
Deductible temporary differences in foreign jurisdictions
|
25
|
|
23
|
|
|
|
|
||
Total unrecognized temporary differences
|
191
|
|
64
|
|
Rogers Communications Inc.
|
33
|
2018 Annual Financial Statements
|
|
Years ended December 31
|
|
||||
(In millions of dollars, except per share amounts)
|
2018
|
|
2017
|
|
||
|
|
(restated,
see note 2)
|
|
|||
|
|
|
||||
Numerator (basic) - Net income for the year
|
2,059
|
|
1,845
|
|
||
|
|
|
||||
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
|
|
$4.00
|
|
|
$3.58
|
|
Diluted
|
|
$3.99
|
|
|
$3.57
|
|
|
|
As at December 31
|
|
|||
(In millions of dollars)
|
|
|
2018
|
|
2017
|
|
|
Note
|
|
|
(restated,
see note 2)
|
|
|
|
|
|
|
|||
Customer accounts receivable
|
|
1,529
|
|
1,443
|
|
|
Other accounts receivable
|
|
785
|
|
653
|
|
|
Allowance for doubtful accounts
|
16
|
|
(55
|
)
|
(61
|
)
|
|
|
|
|
|||
Total accounts receivable
|
|
|
2,259
|
|
2,035
|
|
Rogers Communications Inc.
|
34
|
2018 Annual Financial Statements
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2)
|
|
|
|
|
|
|
||
Wireless devices and accessories
|
|
399
|
|
373
|
|
Other finished goods and merchandise
|
|
67
|
|
62
|
|
|
|
|
|
||
Total inventories
|
|
466
|
|
435
|
|
Financial instrument
|
Classification and measurement method
|
|
|
Financial assets
|
|
Cash and cash equivalents
|
Amortized cost
|
Accounts receivable
|
Amortized cost
|
Investments, measured at FVTOCI
|
FVTOCI with no reclassification to net income
1
|
|
|
Financial liabilities
|
|
Bank advances
|
Amortized cost
|
Short-term borrowings
|
Amortized cost
|
Accounts payable
|
Amortized cost
|
Accrued liabilities
|
Amortized cost
|
Long-term debt
|
Amortized cost
|
|
|
Derivatives
2
|
|
Debt derivatives
3
|
FVTOCI and FVTPL
|
Bond forwards
|
FVTOCI
|
Expenditure derivatives
|
FVTOCI
|
Equity derivatives
|
FVTPL
4
|
1
|
Subsequently measured at fair value with changes recognized in the FVTOCI investment reserve.
|
2
|
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.
|
3
|
Debt derivatives related to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes and are measured at FVTPL. Debt derivatives related to our senior notes and debentures are designated as hedges for accounting purposes and are measured at FVTOCI.
|
4
|
Subsequent changes are offset against stock-based compensation expense or recovery in operating costs.
|
Rogers Communications Inc.
|
35
|
2018 Annual Financial Statements
|
Derivatives
|
The risk they manage
|
Types of derivative instruments
|
Debt derivatives
|
Impact of fluctuations in foreign exchange rates on principal and interest payments for US dollar-denominated senior notes and debentures, credit facility borrowings, and commercial paper borrowings
|
Cross-currency interest rate exchange agreements
Forward foreign exchange agreements (from time to time as necessary) |
Bond forwards
|
Impact of fluctuations in market interest rates on forecast interest payments for expected long-term debt
|
Forward interest rate agreements
|
Expenditure derivatives
|
Impact of fluctuations in foreign exchange rates on forecast US dollar-denominated expenditures
|
Forward foreign exchange agreements
|
Equity derivatives
|
Impact of fluctuations in share price on stock-based compensation expense
|
Total return swap agreements
|
Rogers Communications Inc.
|
36
|
2018 Annual Financial Statements
|
•
|
Contract assets
- we measure an impairment loss for contract assets based on the lifetime expected credit losses, which is allocated to an allowance for doubtful accounts and recognized as a loss in net income (see
note 5
).
|
•
|
Accounts receivable
- we measure an impairment loss for accounts receivable based on the lifetime expected credit losses, which is allocated to an allowance for doubtful accounts and recognized as a loss in net income (see
note 14
).
|
•
|
Investments measured at FVTOCI -
we measure an impairment loss for equity investments measured at FVTOCI as the excess of the cost to acquire the asset (less any impairment loss we have previously recognized) over its current fair value, if any. The difference is recognized in the FVTOCI investment reserve.
|
Financial instrument
|
Financial risks
|
|
|
Financial assets
|
|
Cash and cash equivalents
|
Credit and foreign exchange
|
Accounts receivable
|
Credit and foreign exchange
|
Investments, measured at FVTOCI
|
Liquidity, market price, and foreign exchange
|
|
|
Financial liabilities
|
|
Bank advances
|
Liquidity
|
Short-term borrowings
|
Liquidity, foreign exchange, and interest rate
|
Accounts payable
|
Liquidity
|
Accrued liabilities
|
Liquidity
|
Long-term debt
|
Liquidity, foreign exchange, and interest rate
|
|
|
Derivatives
1
|
|
Debt derivatives
|
Credit, liquidity, and foreign exchange
|
Bond forwards
|
Credit, liquidity, and interest rate
|
Expenditure derivatives
|
Credit, liquidity, and foreign exchange
|
Equity derivatives
|
Credit, liquidity, and market price
|
1
|
Derivatives can be in an asset or liability position at a point in time historically or in the future.
|
Rogers Communications Inc.
|
37
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2)
|
|
|
|
|
|
|
||
Balance, beginning of year
|
|
61
|
|
59
|
|
Allowance for doubtful accounts expense
|
|
201
|
|
179
|
|
Net use
1
|
|
(207
|
)
|
(177
|
)
|
|
|
|
|
||
Balance, end of year
|
|
55
|
|
61
|
|
1
|
Includes
$17 million
of recoveries arising from the sale of fully provided for accounts receivable for the year ended December 31, 2018 (2017 -
nil
).
|
Rogers Communications Inc.
|
38
|
2018 Annual Financial Statements
|
December 31, 2018
|
Carrying
|
|
|
Contractual
|
|
Less than
|
|
1 to 3
|
|
4 to 5
|
|
More than
|
|
(In millions of dollars)
|
amount
|
|
|
cash flows
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings
|
2,255
|
|
|
2,255
|
|
2,255
|
|
—
|
|
—
|
|
—
|
|
Accounts payable and accrued liabilities
|
3,052
|
|
|
3,052
|
|
3,052
|
|
—
|
|
—
|
|
—
|
|
Long-term debt
|
14,290
|
|
|
14,404
|
|
900
|
|
2,350
|
|
2,442
|
|
8,712
|
|
Other long-term financial liabilities
|
38
|
|
|
38
|
|
1
|
|
24
|
|
5
|
|
8
|
|
Expenditure derivative instruments:
|
|
|
|
|
|
|
|
||||||
Cash outflow (Canadian dollar)
|
—
|
|
|
1,341
|
|
1,045
|
|
296
|
|
—
|
|
—
|
|
Cash inflow (Canadian dollar equivalent of US dollar)
|
—
|
|
|
(1,473
|
)
|
(1,146
|
)
|
(327
|
)
|
—
|
|
—
|
|
Equity derivative instruments
|
—
|
|
|
(92
|
)
|
(92
|
)
|
—
|
|
—
|
|
—
|
|
Debt derivative instruments accounted for as hedges:
|
|
|
|
|
|
|
|
||||||
Cash outflow (Canadian dollar)
|
—
|
|
|
6,920
|
|
—
|
|
—
|
|
1,392
|
|
5,528
|
|
Cash inflow (Canadian dollar equivalent of US dollar)
1
|
—
|
|
|
(8,254
|
)
|
—
|
|
—
|
|
(1,842
|
)
|
(6,412
|
)
|
Debt derivative instruments not accounted for as hedges:
|
|
|
|
|
|
|
|
||||||
Cash outflow (Canadian dollar)
|
—
|
|
|
1,560
|
|
1,560
|
|
—
|
|
—
|
|
—
|
|
Cash inflow (Canadian dollar equivalent of US dollar)
1
|
—
|
|
|
(1,601
|
)
|
(1,601
|
)
|
—
|
|
—
|
|
—
|
|
Bond forwards
|
—
|
|
|
87
|
|
87
|
|
—
|
|
—
|
|
—
|
|
Net carrying amount of derivatives (asset)
|
(1,500
|
)
|
|
|
|
|
|
|
|||||
|
18,135
|
|
|
18,237
|
|
6,061
|
|
2,343
|
|
1,997
|
|
7,836
|
|
1
|
Represents Canadian dollar equivalent amount of US dollar inflows matched to an equal amount of US dollar maturities in long-term debt for debt derivatives.
|
December 31, 2017
|
Carrying
|
|
|
Contractual
|
|
Less than
|
|
1 to 3
|
|
4 to 5
|
|
More than
|
|
(In millions of dollars)
|
amount
|
|
|
cash flows
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
|
|
|
|
|
|
|
|
|
|
|||||
Bank advances
|
6
|
|
|
6
|
|
6
|
|
—
|
|
—
|
|
—
|
|
Short-term borrowings
|
1,585
|
|
|
1,585
|
|
1,585
|
|
—
|
|
—
|
|
—
|
|
Accounts payable and accrued liabilities
|
2,931
|
|
|
2,931
|
|
2,931
|
|
—
|
|
—
|
|
—
|
|
Long-term debt
|
14,448
|
|
|
14,555
|
|
1,756
|
|
1,800
|
|
2,050
|
|
8,949
|
|
Other long-term financial liabilities
|
9
|
|
|
9
|
|
2
|
|
3
|
|
2
|
|
2
|
|
Expenditure derivative instruments:
|
|
|
|
|
|
|
|
|
|||||
Cash outflow (Canadian dollar)
|
—
|
|
|
1,538
|
|
1,093
|
|
445
|
|
—
|
|
—
|
|
Cash inflow (Canadian dollar equivalent of US dollar)
|
—
|
|
|
(1,506
|
)
|
(1,054
|
)
|
(452
|
)
|
—
|
|
—
|
|
Equity derivative instruments
|
—
|
|
|
(68
|
)
|
(68
|
)
|
—
|
|
—
|
|
—
|
|
Debt derivative instruments accounted for as hedges:
|
|
|
|
|
|
|
|
|
|||||
Cash outflow (Canadian dollar)
|
—
|
|
|
7,417
|
|
1,435
|
|
—
|
|
—
|
|
5,982
|
|
Cash inflow (Canadian dollar equivalent of US dollar)
1
|
—
|
|
|
(8,405
|
)
|
(1,756
|
)
|
—
|
|
—
|
|
(6,649
|
)
|
Debt derivative instruments not accounted for as hedges:
|
|
|
|
|
|
|
|
||||||
Cash outflow (Canadian dollar)
|
—
|
|
|
956
|
|
956
|
|
—
|
|
—
|
|
—
|
|
Cash inflow (Canadian dollar equivalent of US dollar)
1
|
—
|
|
|
(934
|
)
|
(934
|
)
|
—
|
|
—
|
|
—
|
|
Bond forwards
|
—
|
|
|
64
|
|
64
|
|
—
|
|
—
|
|
—
|
|
Net carrying amount of derivatives (asset)
|
(1,094
|
)
|
|
|
|
|
|
|
|||||
|
17,885
|
|
|
18,148
|
|
6,016
|
|
1,796
|
|
2,052
|
|
8,284
|
|
1
|
Represents Canadian dollar equivalent amount of US dollar inflows matched to an equal amount of US dollar maturities in long-term debt for debt derivatives.
|
December 31, 2018
|
Less than 1 year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
More than 5 years
|
|
(In millions of dollars)
|
||||||||
Net interest payments
|
658
|
|
1,141
|
|
913
|
|
5,923
|
|
December 31, 2017
|
Less than 1 year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
More than 5 years
|
|
(In millions of dollars)
|
||||||||
Net interest payments
|
712
|
|
1,160
|
|
908
|
|
5,409
|
|
Rogers Communications Inc.
|
39
|
2018 Annual Financial Statements
|
Rogers Communications Inc.
|
40
|
2018 Annual Financial Statements
|
|
As at December 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
|
5,500
|
|
1.1243
|
|
6,184
|
|
1,354
|
|
As liabilities
|
550
|
|
1.3389
|
|
736
|
|
(22
|
)
|
Short-term debt derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
1,178
|
|
1.3276
|
|
1,564
|
|
41
|
|
Net mark-to-market debt derivative asset
|
|
|
|
1,373
|
|
|||
Bond forwards accounted for as cash flow hedges:
|
|
|
|
|
||||
As liabilities
|
|
|
900
|
|
(87
|
)
|
||
Expenditure derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
1,080
|
|
1.2413
|
|
1,341
|
|
122
|
|
Net mark-to-market expenditure derivative asset
|
|
|
|
122
|
|
|||
Equity derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
|
|
258
|
|
92
|
|
||
|
|
|
|
|
||||
Net mark-to-market asset
|
|
|
|
1,500
|
|
|
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.
|
41
|
2018 Annual Financial Statements
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Proceeds on debt derivatives related to US commercial paper
|
19,211
|
|
9,692
|
|
Proceeds on debt derivatives related to credit facility borrowings
|
157
|
|
2,310
|
|
Proceeds on debt derivatives related to senior notes
|
1,761
|
|
—
|
|
Total proceeds on debt derivatives
|
21,129
|
|
12,002
|
|
|
|
|
||
Payments on debt derivatives related to US commercial paper
|
(19,148
|
)
|
(9,754
|
)
|
Payments on debt derivatives related to credit facility borrowings
|
(157
|
)
|
(2,327
|
)
|
Payments on debt derivatives related to senior notes
|
(1,436
|
)
|
—
|
|
Total payments on debt derivatives
|
(20,741
|
)
|
(12,081
|
)
|
|
|
|
||
Net proceeds (payments) on settlement of debt derivatives
|
388
|
|
(79
|
)
|
Year ended December 31, 2018
|
Debt derivatives (hedged)
|
|
Debt derivatives (unhedged)
|
|
Bond forwards
|
|
Expenditure derivatives
|
|
Equity derivatives
|
|
Total instruments
|
|
(In millions of dollars)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Derivative instruments, beginning of year
|
1,152
|
|
(23
|
)
|
(64
|
)
|
(39
|
)
|
68
|
|
1,094
|
|
Proceeds received from settlement of derivatives
|
(1,761
|
)
|
(19,368
|
)
|
—
|
|
(1,089
|
)
|
(4
|
)
|
(22,222
|
)
|
Payment on derivatives settled
|
1,436
|
|
19,305
|
|
—
|
|
1,093
|
|
—
|
|
21,834
|
|
Increase (decrease) in fair value of derivatives
|
505
|
|
127
|
|
(23
|
)
|
157
|
|
28
|
|
794
|
|
|
|
|
|
|
|
|
|
|||||
Derivative instruments, end of year
|
1,332
|
|
41
|
|
(87
|
)
|
122
|
|
92
|
|
1,500
|
|
|
|
|
|
|
|
|
||||||
Mark-to-market asset
|
1,354
|
|
41
|
|
—
|
|
122
|
|
92
|
|
1,609
|
|
Mark-to-market liability
|
(22
|
)
|
—
|
|
(87
|
)
|
—
|
|
—
|
|
(109
|
)
|
|
|
|
|
|
|
|
||||||
Mark-to-market asset (liability)
|
1,332
|
|
41
|
|
(87
|
)
|
122
|
|
92
|
|
1,500
|
|
Year ended December 31, 2017
|
Debt derivatives (hedged)
|
|
Debt derivatives (unhedged)
|
|
Bond forwards
|
|
Expenditure derivatives
|
|
Equity derivatives
|
|
Total instruments
|
|
(In millions of dollars)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Derivative instruments, beginning of year
|
1,683
|
|
—
|
|
(51
|
)
|
19
|
|
8
|
|
1,659
|
|
Proceeds received from settlement of derivatives
|
—
|
|
(12,002
|
)
|
—
|
|
(1,207
|
)
|
(6
|
)
|
(13,215
|
)
|
Payment on derivatives settled
|
—
|
|
12,081
|
|
—
|
|
1,240
|
|
—
|
|
13,321
|
|
(Decrease) increase in fair value of derivatives
|
(531
|
)
|
(102
|
)
|
(13
|
)
|
(91
|
)
|
66
|
|
(671
|
)
|
|
|
|
|
|
|
|
|
|||||
Derivative instruments, end of year
|
1,152
|
|
(23
|
)
|
(64
|
)
|
(39
|
)
|
68
|
|
1,094
|
|
|
|
|
|
|
|
|
||||||
Mark-to-market asset
|
1,301
|
|
—
|
|
—
|
|
5
|
|
68
|
|
1,374
|
|
Mark-to-market liability
|
(149
|
)
|
(23
|
)
|
(64
|
)
|
(44
|
)
|
—
|
|
(280
|
)
|
|
|
|
|
|
|
|
||||||
Mark-to-market asset (liability)
|
1,152
|
|
(23
|
)
|
(64
|
)
|
(39
|
)
|
68
|
|
1,094
|
|
Rogers Communications Inc.
|
42
|
2018 Annual Financial Statements
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Current asset
|
|
270
|
|
421
|
|
Long-term asset
|
|
1,339
|
|
953
|
|
|
|
1,609
|
|
1,374
|
|
|
|
|
|
|
|
Current liability
|
|
(87
|
)
|
(133
|
)
|
Long-term liability
|
|
(22
|
)
|
(147
|
)
|
|
|
(109
|
)
|
(280
|
)
|
|
|
|
|
||
Net mark-to-market asset
|
|
1,500
|
|
1,094
|
|
|
Year ended December 31, 2018
|
|
|
Year ended December 31, 2017
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
125
|
|
1.26
|
|
157
|
|
|
1,610
|
|
1.32
|
|
2,126
|
|
Debt derivatives settled
|
125
|
|
1.26
|
|
157
|
|
|
1,760
|
|
1.32
|
|
2,327
|
|
Net cash paid
|
|
|
(1
|
)
|
|
|
|
(17
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
15,262
|
|
1.29
|
|
19,751
|
|
|
8,266
|
|
1.30
|
|
10,711
|
|
Debt derivatives settled
|
14,833
|
|
1.29
|
|
19,148
|
|
|
7,521
|
|
1.29
|
|
9,692
|
|
Net cash received (paid)
|
|
|
63
|
|
|
|
|
(62
|
)
|
1
|
Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.
|
Rogers Communications Inc.
|
43
|
2018 Annual Financial Statements
|
1
|
Bond forwards with maturity dates beyond December 31, 2018 are subject to GoC rate re-setting from time to time. Both the 10-year and 30-year bond forwards were extended in 2018 to their respective maturity dates.
|
|
Years ended December 31
|
|
||||||||||
|
2018
|
|
2017
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional (US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
Notional (US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
720
|
|
1.24
|
|
896
|
|
840
|
|
1.27
|
|
1,070
|
|
Expenditure derivatives settled
|
840
|
|
1.30
|
|
1,093
|
|
930
|
|
1.33
|
|
1,240
|
|
Rogers Communications Inc.
|
44
|
2018 Annual Financial Statements
|
•
|
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;
|
•
|
Level 3 valuations are based on inputs that are not based on observable market data.
|
|
|
|
As at December 31
|
|
||||||||
|
Carrying value
|
|
Fair value (Level 1)
|
|
Fair value (Level 2)
|
|
||||||
(In millions of dollars)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Financial assets
|
|
|
|
|
|
|
||||||
Investments, measured FVTOCI:
|
|
|
|
|
|
|
||||||
Investments in publicly traded companies
|
1,051
|
|
1,465
|
|
1,051
|
|
1,465
|
|
—
|
|
—
|
|
Held-for-trading:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
1,354
|
|
1,301
|
|
—
|
|
—
|
|
1,354
|
|
1,301
|
|
Debt derivatives not accounted for as cash flow hedges
|
41
|
|
—
|
|
—
|
|
—
|
|
41
|
|
—
|
|
Expenditure derivatives accounted for as cash flow hedges
|
122
|
|
5
|
|
—
|
|
—
|
|
122
|
|
5
|
|
Equity derivatives not accounted for as cash flow hedges
|
92
|
|
68
|
|
—
|
|
—
|
|
92
|
|
68
|
|
Total financial assets
|
2,660
|
|
2,839
|
|
1,051
|
|
1,465
|
|
1,609
|
|
1,374
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities
|
|
|
|
|
|
|
||||||
Held-for-trading:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
22
|
|
149
|
|
—
|
|
—
|
|
22
|
|
149
|
|
Debt derivatives not accounted for as hedges
|
—
|
|
23
|
|
—
|
|
—
|
|
—
|
|
23
|
|
Bond forwards accounted for as cash flow hedges
|
87
|
|
64
|
|
—
|
|
—
|
|
87
|
|
64
|
|
Expenditure derivatives accounted for as cash flow hedges
|
—
|
|
44
|
|
—
|
|
—
|
|
—
|
|
44
|
|
Total financial liabilities
|
109
|
|
280
|
|
—
|
|
—
|
|
109
|
|
280
|
|
|
|
As at December 31
|
|
|||||
(In millions of dollars)
|
|
2018
|
|
|
2017
|
|
||
|
Carrying amount
|
|
Fair value
1
|
|
Carrying amount
|
|
Fair value
1
|
|
Long-term debt (including current portion)
|
14,290
|
|
15,110
|
|
14,448
|
|
16,134
|
|
1
|
Long-term debt (including current portion) is measured at Level 2 in the three-level fair value hierarchy, based on year-end trading values.
|
Rogers Communications Inc.
|
45
|
2018 Annual Financial Statements
|
•
|
publicly traded companies - at fair value based on publicly quoted prices; and
|
•
|
private companies - at fair value using implied valuations from follow-on financing rounds, third-party sale negotiations, or market-based approaches.
|
•
|
joint ventures - when we have the rights to the net assets of the arrangement; and
|
•
|
joint operations - when we have the rights to the assets and obligations for the liabilities related to the arrangement.
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Investments in:
|
|
|
|
||
Publicly traded companies
|
|
1,051
|
|
1,465
|
|
Private companies
|
|
145
|
|
167
|
|
Investments, measured at FVTOCI
|
|
1,196
|
|
1,632
|
|
Investments, associates and joint ventures
|
|
938
|
|
929
|
|
|
|
|
|
||
Total investments
|
|
2,134
|
|
2,561
|
|
Rogers Communications Inc.
|
46
|
2018 Annual Financial Statements
|
|
|
As at or years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Current assets
|
|
489
|
|
515
|
|
Long-term assets
|
|
3,303
|
|
3,269
|
|
Current liabilities
|
|
(740
|
)
|
(1,184
|
)
|
Long-term liabilities
|
|
(1,258
|
)
|
(825
|
)
|
|
|
|
|
||
Total net assets
|
|
1,794
|
|
1,775
|
|
|
|
|
|
||
Our share of net assets
|
|
935
|
|
927
|
|
|
|
|
|
||
Revenue
|
|
1,903
|
|
1,706
|
|
Expenses
|
|
(1,902
|
)
|
(1,686
|
)
|
|
|
|
|
||
Net income
|
|
1
|
|
20
|
|
|
|
|
|
||
Our share of net income
|
|
—
|
|
14
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
2018
|
2017
|
||
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
1,605
|
|
935
|
|
|
|
|
||
Total short-term borrowings
|
2,255
|
|
1,585
|
|
Rogers Communications Inc.
|
47
|
2018 Annual Financial Statements
|
|
Year ended December 31, 2018
|
|
|
Year ended December 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
|
15,262
|
|
1.29
|
|
19,752
|
|
|
8,267
|
|
1.30
|
|
10,712
|
|
Repayment of US commercial paper
|
(14,858
|
)
|
1.30
|
|
(19,244
|
)
|
|
(7,530
|
)
|
1.29
|
|
(9,704
|
)
|
Net proceeds received from US commercial paper
|
|
|
|
|
508
|
|
|
|
|
|
|
1,008
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from accounts receivable securitization
|
|
|
225
|
|
|
|
|
530
|
|
||||
Repayment of accounts receivable securitization
|
|
|
(225
|
)
|
|
|
|
(680
|
)
|
||||
Net repayment of accounts receivable securitization
|
|
|
—
|
|
|
|
|
(150
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net proceeds received on short-term borrowings
|
|
|
508
|
|
|
|
|
858
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Trade accounts receivable sold to buyer as security
|
1,391
|
|
1,355
|
|
Short-term borrowings from buyer
|
(650
|
)
|
(650
|
)
|
|
|
|
||
Overcollateralization
|
741
|
|
705
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Accounts receivable securitization program, beginning of year
|
650
|
|
800
|
|
Net repayment of accounts receivable securitization
|
—
|
|
(150
|
)
|
|
|
|
||
Accounts receivable securitization program, end of year
|
650
|
|
650
|
|
Rogers Communications Inc.
|
48
|
2018 Annual Financial Statements
|
|
Year ended December 31, 2018
|
|
Year ended December 31, 2017
|
|
||||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
||||||
US commercial paper, beginning of year
|
746
|
|
1.25
|
|
935
|
|
—
|
|
—
|
|
—
|
|
Net proceeds received from US commercial paper
|
404
|
|
1.26
|
|
508
|
|
737
|
|
1.37
|
|
1,008
|
|
Discounts on issuance
1
|
27
|
|
1.33
|
|
36
|
|
9
|
|
1.33
|
|
12
|
|
Loss (gain) on foreign exchange
1
|
|
|
126
|
|
|
|
(85
|
)
|
||||
|
|
|
|
|
|
|
||||||
US commercial paper, end of year
|
1,178
|
|
1.36
|
|
1,605
|
|
746
|
|
1.25
|
|
935
|
|
Rogers Communications Inc.
|
49
|
2018 Annual Financial Statements
|
(In millions of dollars)
|
Decommissioning Liabilities
|
|
Other
|
|
Total
|
|
|
|
|
|
|||
December 31, 2017
|
35
|
|
4
|
|
39
|
|
Additions
|
—
|
|
—
|
|
—
|
|
Adjustments to existing provisions
|
2
|
|
—
|
|
2
|
|
Reversals
|
—
|
|
—
|
|
—
|
|
Amounts used
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
|
|
|
|
|||
December 31, 2018
|
36
|
|
3
|
|
39
|
|
|
|
|
|
|||
Current (recorded in "other current liabilities")
|
3
|
|
1
|
|
4
|
|
Long-term
|
33
|
|
2
|
|
35
|
|
|
|
|
|
|
As at December 31
|
|
||||
(In millions of dollars, except interest rates)
|
Due date
|
|
Principal amount
|
|
Interest rate
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
||||
Senior notes
|
2018
|
US
|
1,400
|
|
6.800
|
%
|
—
|
|
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
|
%
|
682
|
|
627
|
|
Senior notes
|
2023
|
US
|
850
|
|
4.100
|
%
|
1,160
|
|
1,066
|
|
Senior notes
|
2024
|
|
600
|
|
4.000
|
%
|
600
|
|
600
|
|
Senior notes
|
2025
|
US
|
700
|
|
3.625
|
%
|
955
|
|
878
|
|
Senior notes
|
2026
|
US
|
500
|
|
2.900
|
%
|
682
|
|
627
|
|
Senior debentures
1
|
2032
|
US
|
200
|
|
8.750
|
%
|
273
|
|
251
|
|
Senior notes
|
2038
|
US
|
350
|
|
7.500
|
%
|
478
|
|
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
|
%
|
682
|
|
627
|
|
Senior notes
|
2043
|
US
|
650
|
|
5.450
|
%
|
887
|
|
816
|
|
Senior notes
|
2044
|
US
|
1,050
|
|
5.000
|
%
|
1,433
|
|
1,318
|
|
Senior notes
|
2048
|
US
|
750
|
|
4.300
|
%
|
1,022
|
|
—
|
|
|
|
|
|
|
14,404
|
|
14,555
|
|
||
Deferred transaction costs and discounts
|
|
|
|
|
(114
|
)
|
(107
|
)
|
||
Less current portion
|
|
|
|
|
|
|
(900
|
)
|
(1,756
|
)
|
|
|
|
|
|
|
|
||||
Total long-term debt
|
|
|
|
|
|
|
13,390
|
|
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 December 31,
2018
and
2017
.
|
Rogers Communications Inc.
|
50
|
2018 Annual Financial Statements
|
|
Year ended December 31, 2018
|
|
|
Year ended December 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$)
|
|
|
|
—
|
|
|
|
|
1,730
|
|
|||
Credit facility borrowings (US$)
|
125
|
|
1.26
|
|
157
|
|
|
960
|
|
1.32
|
|
1,269
|
|
Total credit facility borrowings
|
|
|
157
|
|
|
|
|
2,999
|
|
||||
|
|
|
|
|
|
|
|
|
|||||
Credit facility repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(1,830
|
)
|
||||
Credit facility repayments (US$)
|
(125
|
)
|
1.26
|
|
(157
|
)
|
|
(1,110
|
)
|
1.31
|
|
(1,453
|
)
|
Total credit facility repayments
|
|
|
(157
|
)
|
|
|
|
(3,283
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayments under credit facilities
|
|
|
—
|
|
|
|
|
(284
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note issuances (US$)
|
750
|
|
1.25
|
|
938
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Senior note repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(750
|
)
|
||||
Senior notes repayments (US$)
|
(1,400
|
)
|
1.26
|
|
(1,761
|
)
|
|
—
|
|
—
|
|
—
|
|
Total senior notes repayments
|
|
|
(1,761
|
)
|
|
|
|
(750
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayment of senior notes
|
|
|
(823
|
)
|
|
|
|
(750
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayment of long-term debt
|
|
|
(823
|
)
|
|
|
|
(1,034
|
)
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Long-term debt net of transaction costs, beginning of year
|
|
14,448
|
|
16,080
|
|
Net repayment of long-term debt
|
|
(823
|
)
|
(1,034
|
)
|
Loss (gain) on foreign exchange
|
|
672
|
|
(608
|
)
|
Deferred transaction costs incurred
|
|
(18
|
)
|
(3
|
)
|
Amortization of deferred transaction costs
|
|
11
|
|
13
|
|
|
|
|
|
||
Long-term debt net of transaction costs, end of year
|
|
14,290
|
|
14,448
|
|
Rogers Communications Inc.
|
51
|
2018 Annual Financial Statements
|
1
|
Gross proceeds before transaction costs and discounts.
|
2
|
Transaction costs and discounts are included as deferred transaction costs and discounts in the carrying value of the long-term debt, and recognized in net income using the effective interest method.
|
Rogers Communications Inc.
|
52
|
2018 Annual Financial Statements
|
Rogers Communications Inc.
|
53
|
2018 Annual Financial Statements
|
(In millions of dollars)
|
|
|
2019
|
900
|
|
2020
|
900
|
|
2021
|
1,450
|
|
2022
|
600
|
|
2023
|
1,842
|
|
Thereafter
|
8,712
|
|
Total long-term debt
|
14,404
|
|
|
|
As at December 31
|
|
|||
(In millions of dollars)
|
Note
|
|
2018
|
|
2017
|
|
|
|
|
|
|||
Deferred pension liability
|
22
|
|
373
|
|
460
|
|
Supplemental executive retirement plan
|
22
|
|
67
|
|
66
|
|
Stock-based compensation
|
24
|
|
66
|
|
66
|
|
Other
|
|
|
40
|
|
21
|
|
|
|
|
|
|||
Total other long-term liabilities
|
|
|
546
|
|
613
|
|
•
|
expected rates of salary increases for calculating increases in future benefits;
|
•
|
mortality rates for calculating the life expectancy of plan members; and
|
•
|
past service costs from plan amendments are immediately expensed in net income.
|
Rogers Communications Inc.
|
54
|
2018 Annual Financial Statements
|
|
2018
|
|
2017
|
|
Weighted average of significant assumptions:
|
|
|
||
|
|
|
||
Defined benefit obligation
|
|
|
||
Discount rate
|
3.9
|
%
|
3.7
|
%
|
Rate of compensation increase
|
1.0% to 4.5%, based on employee age
|
|
3.0
|
%
|
Mortality rate
|
CIA Private with CPM B scale
|
|
CIA Private with CPM B Scale
|
|
Pension expense
|
|
|
||
Discount rate
|
3.7
|
%
|
4.1
|
%
|
Rate of compensation increase
|
3.0
|
%
|
3.0
|
%
|
Mortality rate
|
CIA Private with CPM B scale
|
|
CIA Private with CPM B Scale
|
|
|
Increase (decrease) in accrued benefit obligation
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Discount rate
|
|
|
||
Impact of 0.5% increase
|
(196
|
)
|
(207
|
)
|
Impact of 0.5% decrease
|
224
|
|
237
|
|
|
|
|
||
Rate of future compensation increase
|
|
|
||
Impact of 0.25% increase
|
16
|
|
21
|
|
Impact of 0.25% decrease
|
(16
|
)
|
(21
|
)
|
|
|
|
||
Mortality rate
|
|
|
||
Impact of 1 year increase
|
47
|
|
49
|
|
Impact of 1 year decrease
|
(50
|
)
|
(52
|
)
|
Rogers Communications Inc.
|
55
|
2018 Annual Financial Statements
|
•
|
overseeing the funding, administration, communication, and investment management of the plans;
|
•
|
selecting and monitoring the performance of all third parties performing duties in respect of the plans, including audit, actuarial, and investment management services;
|
•
|
proposing, considering, and approving amendments;
|
•
|
proposing, considering, and approving amendments to the Statement of Investment Policies and Procedures;
|
•
|
reviewing management and actuarial reports prepared in respect of the administration of the pension plans; and
|
•
|
reviewing and approving the audited financial statements of the pension plan funds.
|
•
|
contracting professional investment managers to execute the investment strategy following the Statement of Investment Policies and Procedures and regulatory requirements;
|
•
|
specifying the kinds of investments that can be held in the plans and monitoring compliance;
|
•
|
using asset allocation and diversification strategies; and
|
•
|
purchasing annuities from time to time.
|
Rogers Communications Inc.
|
56
|
2018 Annual Financial Statements
|
|
As at December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Plan assets, at fair value
|
1,965
|
|
1,890
|
|
Accrued benefit obligations
|
(2,330
|
)
|
(2,342
|
)
|
|
|
|
||
Net deferred pension liability
|
(365
|
)
|
(452
|
)
|
|
|
|
||
Consists of:
|
|
|
||
Deferred pension asset
|
8
|
|
8
|
|
Deferred pension liability
|
(373
|
)
|
(460
|
)
|
|
|
|
||
Net deferred pension liability
|
(365
|
)
|
(452
|
)
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Plan assets, beginning of year
|
1,890
|
|
1,619
|
|
Interest income
|
73
|
|
72
|
|
Remeasurements, recognized in other comprehensive income and equity
|
(114
|
)
|
92
|
|
Contributions by employees
|
39
|
|
42
|
|
Contributions by employer
|
148
|
|
145
|
|
Benefits paid
|
(68
|
)
|
(76
|
)
|
Administrative expenses paid from plan assets
|
(3
|
)
|
(4
|
)
|
|
|
|
||
Plan assets, end of year
|
1,965
|
|
1,890
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Accrued benefit obligations, beginning of year
|
2,342
|
|
2,006
|
|
Current service cost
|
143
|
|
137
|
|
Past service recovery
|
(43
|
)
|
—
|
|
Interest cost
|
85
|
|
81
|
|
Benefits paid
|
(68
|
)
|
(76
|
)
|
Contributions by employees
|
39
|
|
42
|
|
Remeasurements, recognized in other comprehensive income and equity
|
(168
|
)
|
152
|
|
|
|
|
||
Accrued benefit obligations, end of year
|
2,330
|
|
2,342
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Equity securities
|
1,149
|
|
1,134
|
|
Debt securities
|
810
|
|
742
|
|
Other - cash
|
6
|
|
14
|
|
|
|
|
||
Total fair value of plan assets
|
1,965
|
|
1,890
|
|
Rogers Communications Inc.
|
57
|
2018 Annual Financial Statements
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Plan cost:
|
|
|
||
Current service cost
|
143
|
|
137
|
|
Past service recovery
|
(43
|
)
|
—
|
|
Net interest cost
|
12
|
|
9
|
|
|
|
|
||
Net pension expense
|
112
|
|
146
|
|
Administrative expense
|
4
|
|
4
|
|
|
|
|
||
Total pension cost recognized in net income
|
116
|
|
150
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Interest income on plan assets
|
(73
|
)
|
(72
|
)
|
Interest cost on plan obligation
|
85
|
|
81
|
|
|
|
|
||
Net interest cost, recognized in finance costs
|
12
|
|
9
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
(Loss) return on plan assets (excluding interest income)
|
(114
|
)
|
92
|
|
Change in financial assumptions
|
158
|
|
(168
|
)
|
Change in demographic assumptions
|
(10
|
)
|
—
|
|
Effect of experience adjustments
|
20
|
|
16
|
|
|
|
|
||
Remeasurement gain (loss), recognized in other comprehensive income and equity
|
54
|
|
(60
|
)
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Accrued benefit obligation, beginning of year
|
66
|
|
62
|
|
Pension expense, recognized in employee salaries and benefits expense
|
2
|
|
2
|
|
Net interest cost, recognized in finance costs
|
2
|
|
3
|
|
Remeasurements, recognized in other comprehensive income
|
1
|
|
2
|
|
Benefits paid
|
(4
|
)
|
(3
|
)
|
|
|
|
||
Accrued benefit obligation, end of year
|
67
|
|
66
|
|
Rogers Communications Inc.
|
58
|
2018 Annual Financial Statements
|
|
Allocation of plan assets
|
Target asset allocation percentage
|
|||
|
2018
|
|
2017
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
||
Domestic
|
11.8
|
%
|
11.8
|
%
|
7% to 17%
|
International
|
46.7
|
%
|
48.1
|
%
|
33% to 63%
|
Debt securities
|
41.2
|
%
|
39.3
|
%
|
30% to 50%
|
Other - cash
|
0.3
|
%
|
0.8
|
%
|
0% to 2%
|
|
|
|
|
||
Total
|
100.0
|
%
|
100.0
|
%
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
2018
|
|
2017
|
|
|
|
|
||
Employer contribution
|
148
|
|
145
|
|
Employee contribution
|
39
|
|
42
|
|
|
|
|
||
Total contribution
|
187
|
|
187
|
|
Share class
|
Number of shares authorized for issue
|
|
Features
|
Voting rights
|
||
Preferred shares
|
400,000,000
|
|
●
|
Without par value
|
●
|
None
|
●
|
Issuable in series, with rights and terms of each series to be fixed by the Board prior to the issue of any series
|
|||||
RCI Class A Voting Shares
|
112,474,388
|
|
●
|
Without par value
|
●
|
Each share entitled to 50 votes
|
●
|
Each share can be converted into one Class B Non-Voting share
|
|||||
RCI Class B Non-Voting Shares
|
1,400,000,000
|
|
●
|
Without par value
|
●
|
None
|
|
|
Dividend per
|
|
Date declared
|
Date paid
|
share (dollars)
|
|
|
|
|
|
January 25, 2018
|
April 3, 2018
|
0.48
|
|
April 19, 2018
|
July 3, 2018
|
0.48
|
|
August 15, 2018
|
October 3, 2018
|
0.48
|
|
October 19, 2018
|
January 3, 2019
|
0.48
|
|
|
|
1.92
|
|
|
|
|
|
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
|
|
Rogers Communications Inc.
|
59
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
||||
|
|
2018
|
|
2017
|
|
||
|
|
|
|
||||
Weighted average fair value
|
|
|
$8.42
|
|
|
$8.52
|
|
|
|
|
|
||||
Risk-free interest rate
|
|
1.7
|
%
|
0.8
|
%
|
||
Dividend yield
|
|
3.3
|
%
|
3.2
|
%
|
||
Volatility of Class B Non-Voting Shares
|
|
20.1
|
%
|
21.2
|
%
|
||
Weighted average expected life
|
|
6.2 years
|
|
5.5 years
|
|
||
Weighted average time to vest
|
|
2.5 years
|
|
2.3 years
|
|
||
Weighted average time to expiry
|
|
10.0 years
|
|
9.9 years
|
|
||
Employee exit rate
|
|
4.9
|
%
|
3.9
|
%
|
||
Suboptimal exercise factor
|
|
1.4
|
|
1.4
|
|
||
Lattice steps
|
|
50
|
|
50
|
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Stock options
|
|
17
|
|
33
|
|
Restricted share units
|
|
51
|
|
51
|
|
Deferred share units
|
|
30
|
|
51
|
|
Equity derivative effect, net of interest receipt
|
|
(33
|
)
|
(74
|
)
|
|
|
|
|
||
Total stock-based compensation expense
|
|
65
|
|
61
|
|
Rogers Communications Inc.
|
60
|
2018 Annual Financial Statements
|
|
Year ended December 31, 2018
|
|
Year ended December 31, 2017
|
|
||||||
(In number of units, except prices)
|
Number of options
|
|
Weighted average exercise price
|
|
Number of options
|
|
Weighted average exercise price
|
|
||
|
|
|
|
|
||||||
Outstanding, beginning of year
|
2,637,890
|
|
|
$49.42
|
|
3,732,524
|
|
|
$43.70
|
|
Granted
|
850,700
|
|
|
$58.88
|
|
993,740
|
|
|
$59.71
|
|
Exercised
|
(679,706
|
)
|
|
$45.20
|
|
(1,603,557
|
)
|
|
$42.10
|
|
Forfeited
|
(89,272
|
)
|
|
$55.94
|
|
(484,817
|
)
|
|
$50.74
|
|
|
|
|
|
|
||||||
Outstanding, end of year
|
2,719,612
|
|
|
$53.22
|
|
2,637,890
|
|
|
$49.42
|
|
|
|
|
|
|
||||||
Exercisable, end of year
|
1,059,590
|
|
|
$46.26
|
|
924,562
|
|
|
$42.32
|
|
|
Options outstanding
|
Options exercisable
|
||||||||||
Range of exercise prices
|
Number outstanding
|
|
Weighted average remaining contractual life (years)
|
|
Weighted average exercise price
|
|
Number exercisable
|
|
Weighted average exercise price
|
|
||
|
|
|
|
|
|
|||||||
$37.96 - $39.99
|
360,248
|
|
0.16
|
|
|
$37.96
|
|
360,248
|
|
|
$37.96
|
|
$40.00 - $44.99
|
245,052
|
|
5.02
|
|
|
$44.31
|
|
152,901
|
|
|
$43.97
|
|
$45.00 - $49.99
|
575,064
|
|
5.36
|
|
|
$48.93
|
|
382,303
|
|
|
$48.56
|
|
$50.00 - $59.99
|
1,011,698
|
|
8.53
|
|
|
$58.04
|
|
41,680
|
|
|
$56.70
|
|
$60.00 - $64.99
|
489,835
|
|
8.44
|
|
|
$62.82
|
|
122,458
|
|
|
$62.82
|
|
$65.00 - $68.10
|
37,715
|
|
9.68
|
|
|
$68.10
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|||||||
|
2,719,612
|
|
6.43
|
|
|
$53.22
|
|
1,059,590
|
|
|
$46.26
|
|
Rogers Communications Inc.
|
61
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
||
(In number of units)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Outstanding, beginning of year
|
|
1,811,845
|
|
2,237,085
|
|
Granted and reinvested dividends
|
|
1,217,487
|
|
826,081
|
|
Exercised
|
|
(597,015
|
)
|
(984,342
|
)
|
Forfeited
|
|
(213,392
|
)
|
(266,979
|
)
|
|
|
|
|
||
Outstanding, end of year
|
|
2,218,925
|
|
1,811,845
|
|
|
|
Years ended December 31
|
|
||
(In number of units)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Outstanding, beginning of year
|
|
2,327,647
|
|
2,396,458
|
|
Granted and reinvested dividends
|
|
131,051
|
|
735,117
|
|
Exercised
|
|
(334,930
|
)
|
(333,111
|
)
|
Forfeited
|
|
(119,328
|
)
|
(470,817
|
)
|
|
|
|
|
||
Outstanding, end of year
|
|
2,004,440
|
|
2,327,647
|
|
Rogers Communications Inc.
|
62
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Salaries and other short-term employee benefits
|
|
13
|
|
10
|
|
Post-employment benefits
|
|
2
|
|
3
|
|
Stock-based compensation
1
|
|
18
|
|
19
|
|
|
|
|
|
||
Total compensation
|
|
33
|
|
32
|
|
1
|
Stock-based compensation does not include the effect of changes in fair value of
Class B Non-Voting Shares
or equity derivatives.
|
•
|
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.
|
(In millions of dollars)
|
Years ended December 31
|
|
Outstanding balance as at December 31
|
|
||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
||||
Printing and legal services
|
13
|
|
17
|
|
—
|
|
—
|
|
•
|
Rogers Communications Canada Inc.; and
|
•
|
Rogers Media Inc.
|
Rogers Communications Inc.
|
63
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Revenue
|
|
86
|
|
74
|
|
Purchases
|
|
197
|
|
198
|
|
|
|
As at December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Accounts receivable
|
|
99
|
|
80
|
|
Accounts payable and accrued liabilities
|
|
20
|
|
26
|
|
Rogers Communications Inc.
|
64
|
2018 Annual Financial Statements
|
|
Less than
|
|
|
|
After
|
|
|
|||
(In millions of dollars)
|
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
5 Years
|
|
Total
|
|
|
|
|
|
|
|
|||||
Operating leases
|
208
|
|
312
|
|
172
|
|
287
|
|
979
|
|
Player contracts
1
|
63
|
|
8
|
|
14
|
|
—
|
|
85
|
|
Purchase obligations
2
|
448
|
|
332
|
|
202
|
|
80
|
|
1,062
|
|
Program rights
3
|
667
|
|
1,048
|
|
1,079
|
|
1,346
|
|
4,140
|
|
|
|
|
|
|
|
|||||
Total commitments
|
1,386
|
|
1,700
|
|
1,467
|
|
1,713
|
|
6,266
|
|
1
|
Player contracts are Toronto Blue Jays players' salary contracts into which we have entered and are contractually obligated to pay.
|
2
|
Purchase obligations are the contractual obligations under service, product, and wireless device contracts to which we have committed.
|
3
|
Program rights are the agreements into which we have entered to acquire broadcasting rights for sports broadcasting programs and films for periods in excess of one year at contract inception.
|
|
|
As at December 31
|
|
(In millions of dollars)
|
|
2018
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
244
|
|
Acquisition of intangible assets
|
|
183
|
|
Commitments related to associates and joint ventures
|
|
383
|
|
|
|
|
|
Total other commitments
|
|
810
|
|
Rogers Communications Inc.
|
65
|
2018 Annual Financial Statements
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
(restated,
see note 2)
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(133
|
)
|
(160
|
)
|
Inventories
|
|
(31
|
)
|
17
|
|
Other current assets
|
|
(6
|
)
|
17
|
|
Accounts payable and accrued liabilities
|
|
103
|
|
9
|
|
Contract and other liabilities
|
|
(47
|
)
|
(47
|
)
|
|
|
|
|
||
Total change in non-cash operating working capital items
|
|
(114
|
)
|
(164
|
)
|
|
|
Years ended December 31
|
|
||
(In millions of dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
||
Capital expenditures before proceeds on disposition
|
|
2,815
|
|
2,510
|
|
Proceeds on disposition
|
|
(25
|
)
|
(74
|
)
|
|
|
|
|
||
Capital expenditures
|
|
2,790
|
|
2,436
|
|
Rogers Communications Inc.
|
66
|
2018 Annual Financial Statements
|