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ROGERS COMMUNICATIONS INC.
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By:
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/s/ Anthony Staffieri
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Name: Anthony Staffieri
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Title: Chief Financial Officer
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Exhibit Number
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Description of Document
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99.1
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Management's Discussion and Analysis of Rogers Communications Inc. for the third quarter ended September 30, 2019
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99.2
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Interim Condensed Consolidated Financial Statements of Rogers Communications Inc. for the third quarter ended September 30, 2019
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99.3
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Earnings Release of Rogers Communications Inc. for the third quarter ended September 30, 2019
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Rogers Communications Inc.
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1
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Third Quarter 2019
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Segment
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Principal activities
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Wireless
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Wireless telecommunications operations for Canadian consumers and businesses.
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Cable
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Cable telecommunications operations, including Internet, television, 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 business, public sector, and carrier wholesale markets.
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Media
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A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, and digital media.
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Quarterly Financial Highlights
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Financial Risk Management
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Financial Guidance
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Commitments and Contractual Obligations
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Rogers Infinite™ Highlights
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Regulatory Developments
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Strategic Highlights
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Updates to Risks and Uncertainties
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Summary of Consolidated Financial Results
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Critical Accounting Policies and Estimates
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Results of our Reportable Segments
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Review of Consolidated Performance
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Managing our Liquidity and Financial Resources
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Overview of Financial Position
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Financial Condition
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Rogers Communications Inc.
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2
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Third Quarter 2019
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Rogers Communications Inc.
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3
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Third Quarter 2019
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2018
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2019 Original
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2019 Revised
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||||||||||
(In millions of dollars, except percentages)
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Actual
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Guidance Ranges 1
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Guidance Ranges 1,2,3
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||||||||||
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Consolidated Guidance
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|||||||||||
Revenue
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15,096
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Increase of 3%
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to
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5%
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Decrease of 1%
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to
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increase of 1%
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||||
Adjusted EBITDA 4
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5,983
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Increase of 7%
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to
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9%
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Increase of 3%
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to
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5%
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||||
Capital expenditures 5
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2,790
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2,850
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to
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3,050
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2,750
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to
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2,850
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||||
Free cash flow 4,6
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2,134
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Increase of 200
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to
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300
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Increase of 100
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to
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200
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1
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Guidance ranges presented as percentages reflect percentage increases over full-year 2018 results. 2019 amounts, most notably adjusted EBITDA and free cash flow, for purposes of assessing our performance against guidance have been calculated in accordance with accounting policies after adopting IFRS 16 on January 1, 2019. The ongoing impacts are addressed in our results prospectively from that date. Had we adopted IFRS 16 on a retrospective basis, 2018 adjusted EBITDA and free cash flow would each have been $174 million higher. See "Critical Accounting Policies and Estimates" for more information.
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2
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The revised guidance ranges above assume lower Wireless overage revenue as a result of the faster-than-expected adoption of our new Rogers Infinite™ unlimited data plans.
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3
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The revised guidance ranges above assume the proceedings related to the CRTC's order on the rates we can charge to resellers of high-speed Internet access services, including our third-party Internet access (TPIA) service, do not have an impact on our results this year. See "Regulatory Developments" and "Updates to Risks and Uncertainties" for more information.
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4
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Adjusted EBITDA and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
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5
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Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
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6
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Effective January 1, 2019, we have redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We have redefined free cash flow to simplify this measure and believe removing it will make us more comparable within our industry. Free cash flow presented above reflects this change.
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•
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Approximately 1 million subscribers, or triple the number we had expected at this time, are currently benefitting from our Rogers Infinite™ unlimited data plans.
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•
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Approximately 60% of our existing customers that have migrated to these plans have upgraded to higher price plans, whereas about 40% of our customers have downgraded.
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•
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These migrated customers are, on average, using over 50% more data than they had previously used.
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•
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Overall, data overage fees represented approximately 5% of Wireless service revenue annually.
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•
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Compared to the third quarter of 2018, our overage revenue decreased by approximately $50 million this quarter due to the strong adoption of our unlimited data plans.
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•
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By this time next year, we expect approximately 80% of our overage revenue will have been eliminated and it will then represent only 1% of our Wireless service revenue.
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•
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Wireless blended ARPU declined 2% this quarter, primarily as a result of the decrease in overage revenue.
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•
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Excluding the short-term impacts of this decline in overage revenue, blended ARPU this quarter would have been stable relative to 2018.
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•
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Excluding the decline in overage revenue, blended ARPU growth for our Rogers Infinite™ subscriber base would have been approximately 1% to 2%.
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•
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Overage revenue declines and related blended ARPU impacts are expected to occur over the next four to five quarters compared to an initial expectation of six to eight quarters.
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•
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By the second half of 2020, we anticipate a return to overall blended ARPU growth.
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Rogers Communications Inc.
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4
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Third Quarter 2019
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•
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Customers on Rogers Infinite™ plans have an almost 30% higher “likelihood to recommend” score compared to customers on our other plans.
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•
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Calls related to billing and overages, our top call drivers, are down 50% for Rogers Infinite™ customers.
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•
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Online hardware upgrades for customers migrating to Rogers Infinite™ plans has increased by 30% per month since launch.
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•
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Announced a new customer solutions centre in Kelowna, BC, adding 350 new customer solutions specialists to serve our customers.
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Announced Pro On-the-Go™, a new, personalized retail service that delivers and sets up new wireless devices to the customer's location of choice.
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•
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Launched Fido Data Overage Protection, which pauses data when a customer's limit is reached so they can enjoy their services worry-free.
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•
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Grew customer digital adoption and reduced call volume by over one million calls.
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Awarded "Best in Test" for overall wireless customer experience nationally by P3, the international leader in benchmarking mobile networks, based on measurement testing conducted between May 6 and July 15, 2019.
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•
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Launched the Ignite Wi-Fi Hub app and introduced Wall-to-Wall Wi-Fi pods to manage home Wi-Fi networks and enhance Wi-Fi connectivity in homes.
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•
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Announced a reciprocal roaming arrangement with AT&T to extend LTE-M coverage for IoT customers throughout Canada and the United States.
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•
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Launched Ignite TV in New Brunswick and grew our subscriber base across our Cable footprint by over 40% sequentially.
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Launched Sportsnet NOW on Ignite TV, with Amazon Prime launching by year-end.
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Broke records with the most-watched Rogers Cup in Sportsnet history, including the most-watched women's final, reaching 1.4 million Canadians on Sportsnet.
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Grew adjusted EBITDA by 6%.
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Attracted 103,000 net new wireless postpaid subscribers and 41,000 net new Internet subscribers.
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•
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Returned over $300 million to shareholders through dividend payments and share repurchases.
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Recognized, in July 2019, as one of the 50 Most Engaged Workplaces in North America by Achievers for our leadership and innovation in engaging our employees and workplaces.
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•
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Awarded the 2019 Brandon Hall Group Excellence in Learning Awards for Best Customer Training Program in August 2019.
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Supported Pride parades across Canada with 1,000 team members participating.
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Supported 1,000 Ted Rogers Scholarship Fund recipients, including those enrolled in post-secondary education institutions in the 2019-2020 academic year.
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•
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Increased download speeds for our Connected for Success and Connected Families participants to 25 Mbps.
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•
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Deployed a cooling optimization program across our network head-ends and data centres, which reduced annual electricity use by 2 gigawatt-hours.
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Rogers Communications Inc.
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5
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Third Quarter 2019
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Three months ended September 30
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Nine months ended September 30
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||||||||||||
(In millions of dollars, except margins and per share amounts)
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2019
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2018 1
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% Chg
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2019
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2018 1
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% Chg
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Revenue
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Wireless
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2,324
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2,331
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—
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6,757
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6,736
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—
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Cable
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994
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983
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1
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2,967
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2,943
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1
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||||
Media
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483
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488
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(1
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)
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1,542
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1,628
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(5
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)
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||||
Corporate items and intercompany eliminations
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(47
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)
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(33
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)
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42
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(145
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)
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(149
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)
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(3
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)
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||||
Revenue
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3,754
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3,769
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—
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|
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11,121
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11,158
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—
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||||
Total service revenue 2
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3,233
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3,271
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(1
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)
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9,721
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9,698
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—
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||||
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Adjusted EBITDA 3
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Wireless
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1,138
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1,099
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4
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3,281
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3,062
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7
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Cable
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499
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490
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2
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1,422
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1,385
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3
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Media
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130
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73
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78
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118
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156
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(24
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)
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Corporate items and intercompany eliminations
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(55
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)
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(42
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)
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31
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(139
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)
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(141
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)
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(1
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)
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||||
Adjusted EBITDA
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1,712
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|
1,620
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|
6
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4,682
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4,462
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5
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||||||||||
Adjusted EBITDA margin 3
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45.6
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%
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43.0
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%
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2.6
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pts
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42.1
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%
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40.0
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%
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2.1
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pts
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||||
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||||||||||
Net income
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593
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594
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—
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1,575
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1,557
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1
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||||
Basic earnings per share
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|
$1.16
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|
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$1.15
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1
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|
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$3.07
|
|
|
$3.02
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2
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|
Diluted earnings per share
|
|
$1.14
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$1.15
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(1
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)
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$3.05
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$3.01
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1
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|
|
|
|
|
|
|
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||||||||||
Adjusted net income 3
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622
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|
625
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|
—
|
|
|
1,624
|
|
1,656
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|
(2
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)
|
||||
Adjusted basic earnings per share 3
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|
$1.22
|
|
|
$1.21
|
|
1
|
|
|
|
$3.17
|
|
|
$3.22
|
|
(2
|
)
|
Adjusted diluted earnings per share 3
|
|
$1.19
|
|
|
$1.21
|
|
(2
|
)
|
|
|
$3.15
|
|
|
$3.21
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
657
|
|
700
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|
(6
|
)
|
|
2,016
|
|
1,962
|
|
3
|
|
||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
—
|
|
|
3,360
|
|
3,237
|
|
4
|
|
||||
Free cash flow 3,4
|
767
|
|
627
|
|
22
|
|
|
1,781
|
|
1,663
|
|
7
|
|
1
|
Effective January 1, 2019, we adopted IFRS 16, with the ongoing impacts of this standard included in our results prospectively from that date. Our 2018 results have not been restated for the effects of IFRS 16. See "Critical Accounting Policies and Estimates".
|
3
|
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
4
|
2018 free cash flow has been restated. See "Non-GAAP Measures" for more information.
|
Rogers Communications Inc.
|
6
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
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Nine months ended September 30
|
|
||||||||
(In millions of dollars, except margins)
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2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
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|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Service revenue
|
1,808
|
|
1,837
|
|
(2
|
)
|
|
5,368
|
|
5,285
|
|
2
|
|
Equipment revenue
|
516
|
|
494
|
|
4
|
|
|
1,389
|
|
1,451
|
|
(4
|
)
|
Revenue
|
2,324
|
|
2,331
|
|
—
|
|
|
6,757
|
|
6,736
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of equipment
|
530
|
|
520
|
|
2
|
|
|
1,498
|
|
1,569
|
|
(5
|
)
|
Other operating expenses
|
656
|
|
712
|
|
(8
|
)
|
|
1,978
|
|
2,105
|
|
(6
|
)
|
Operating expenses
|
1,186
|
|
1,232
|
|
(4
|
)
|
|
3,476
|
|
3,674
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
1,138
|
|
1,099
|
|
4
|
|
|
3,281
|
|
3,062
|
|
7
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
49.0
|
%
|
47.1
|
%
|
1.9
|
pts
|
|
48.6
|
%
|
45.5
|
%
|
3.1
|
pts
|
Capital expenditures
|
288
|
|
277
|
|
4
|
|
|
960
|
|
777
|
|
24
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||||
(In thousands, except churn, blended ABPU, and blended ARPU)
|
2019
|
|
2018
|
|
Chg
|
|
|
2019
|
|
2018
|
|
Chg
|
|
||
|
|
|
|
|
|
|
|
||||||||
Postpaid
|
|
|
|
|
|
|
|
||||||||
Gross additions
|
437
|
|
418
|
|
19
|
|
|
1,083
|
|
1,184
|
|
(101
|
)
|
||
Net additions
|
103
|
|
124
|
|
(21
|
)
|
|
203
|
|
341
|
|
(138
|
)
|
||
Total postpaid subscribers 2
|
9,360
|
|
9,045
|
|
315
|
|
|
9,360
|
|
9,045
|
|
315
|
|
||
Churn (monthly)
|
1.20
|
%
|
1.09
|
%
|
0.11
|
pts
|
|
1.06
|
%
|
1.06
|
%
|
—
|
|
||
Prepaid
|
|
|
|
|
|
|
|
||||||||
Gross additions
|
235
|
|
240
|
|
(5
|
)
|
|
605
|
|
594
|
|
11
|
|
||
Net additions (losses)
|
27
|
|
60
|
|
(33
|
)
|
|
(21
|
)
|
(13
|
)
|
(8
|
)
|
||
Total prepaid subscribers 2,3
|
1,478
|
|
1,765
|
|
(287
|
)
|
|
1,478
|
|
1,765
|
|
(287
|
)
|
||
Churn (monthly)
|
4.74
|
%
|
3.48
|
%
|
1.26
|
pts
|
|
4.62
|
%
|
3.90
|
%
|
0.72
|
pts
|
||
Blended ABPU (monthly)
|
|
$67.20
|
|
$66.20
|
|
$1.00
|
|
|
|
$66.25
|
|
$64.56
|
|
$1.69
|
|
Blended ARPU (monthly)
|
|
$56.01
|
|
$57.21
|
|
($1.20
|
)
|
|
|
$55.56
|
|
$55.50
|
|
$0.06
|
|
1
|
Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. See "Key Performance Indicators".
|
2
|
As at end of period.
|
3
|
Effective April 1, 2019, we adjusted our Wireless prepaid subscriber base to remove 127,000 subscribers as a result of a change to our deactivation policy from 180 days to 90 days to be more consistent within the industry.
|
•
|
a 2% decrease in blended ARPU this quarter, due to a decrease in overage revenue from the faster-than-expected adoption of our new Rogers Infinite™ unlimited data plans, and elevated competitive intensity in the marketplace; partially offset by
|
•
|
a larger postpaid subscriber base.
|
Rogers Communications Inc.
|
7
|
Third Quarter 2019
|
•
|
a shift in the product mix of device sales towards higher-value devices; and
|
•
|
higher postpaid gross additions; partially offset by
|
•
|
a decrease in device upgrades by existing subscribers.
|
•
|
the impact of the adoption of IFRS 16; and
|
•
|
various cost efficiencies.
|
Rogers Communications Inc.
|
8
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Internet
|
570
|
|
534
|
|
7
|
|
|
1,684
|
|
1,578
|
|
7
|
|
Television
|
363
|
|
357
|
|
2
|
|
|
1,075
|
|
1,079
|
|
—
|
|
Phone
|
56
|
|
88
|
|
(36
|
)
|
|
197
|
|
277
|
|
(29
|
)
|
Service revenue
|
989
|
|
979
|
|
1
|
|
|
2,956
|
|
2,934
|
|
1
|
|
Equipment revenue
|
5
|
|
4
|
|
25
|
|
|
11
|
|
9
|
|
22
|
|
Revenue
|
994
|
|
983
|
|
1
|
|
|
2,967
|
|
2,943
|
|
1
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of equipment
|
7
|
|
6
|
|
17
|
|
|
18
|
|
15
|
|
20
|
|
Other operating expenses
|
488
|
|
487
|
|
—
|
|
|
1,527
|
|
1,543
|
|
(1
|
)
|
Operating expenses
|
495
|
|
493
|
|
—
|
|
|
1,545
|
|
1,558
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
499
|
|
490
|
|
2
|
|
|
1,422
|
|
1,385
|
|
3
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
50.2
|
%
|
49.8
|
%
|
0.4
|
pts
|
|
47.9
|
%
|
47.1
|
%
|
0.8
|
pts
|
Capital expenditures
|
290
|
|
358
|
|
(19
|
)
|
|
864
|
|
1,007
|
|
(14
|
)
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In thousands)
|
2019
|
|
2018
|
|
Chg
|
|
|
2019
|
|
2018
|
|
Chg
|
|
|
|
|
|
|
|
|
|
||||||
Internet
|
|
|
|
|
|
|
|
||||||
Net additions
|
41
|
|
35
|
|
6
|
|
|
77
|
|
84
|
|
(7
|
)
|
Total Internet subscribers 2
|
2,507
|
|
2,405
|
|
102
|
|
|
2,507
|
|
2,405
|
|
102
|
|
Television
|
|
|
|
|
|
|
|
||||||
Net losses
|
(35
|
)
|
(18
|
)
|
(17
|
)
|
|
(89
|
)
|
(39
|
)
|
(50
|
)
|
Total Television subscribers 2
|
1,596
|
|
1,701
|
|
(105
|
)
|
|
1,596
|
|
1,701
|
|
(105
|
)
|
Phone
|
|
|
|
|
|
|
|
||||||
Net (losses) additions
|
(13
|
)
|
—
|
|
(13
|
)
|
|
(33
|
)
|
12
|
|
(45
|
)
|
Total Phone subscribers 2
|
1,083
|
|
1,120
|
|
(37
|
)
|
|
1,083
|
|
1,120
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
||||||
Homes passed 2
|
4,434
|
|
4,354
|
|
80
|
|
|
4,434
|
|
4,354
|
|
80
|
|
Total service units 3
|
|
|
|
|
|
|
|
||||||
Net (losses) additions
|
(7
|
)
|
17
|
|
(24
|
)
|
|
(45
|
)
|
57
|
|
(102
|
)
|
Total service units 2
|
5,186
|
|
5,226
|
|
(40
|
)
|
|
5,186
|
|
5,226
|
|
(40
|
)
|
1
|
Subscriber counts are key performance indicators. See "Key Performance Indicators".
|
2
|
As at end of period.
|
3
|
Includes Internet, Television, and Phone.
|
•
|
the impact of Internet and Television service pricing changes;
|
•
|
a larger Internet subscriber base; and
|
•
|
the movement of Television customers to higher content tiers; partially offset by
|
•
|
new bundled pricing constructs that provide a larger Phone discount; and
|
•
|
a lower subscriber base for our Television and Phone products.
|
Rogers Communications Inc.
|
9
|
Third Quarter 2019
|
•
|
the impact of Internet service pricing changes; and
|
•
|
a larger Internet subscriber base; partially offset by
|
•
|
promotional pricing provided to subscribers.
|
•
|
the impact of Television service pricing changes;
|
•
|
lower promotional pricing provided to subscribers;
|
•
|
the migration of subscribers from our legacy TV product to Ignite TV; and
|
•
|
the movement of customers to higher content tiers; partially offset by
|
•
|
the decline in Television subscribers.
|
•
|
new bundled pricing constructs that provide a larger Phone discount; and
|
•
|
the general decline in Phone subscribers over the past year.
|
Rogers Communications Inc.
|
10
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
483
|
|
488
|
|
(1
|
)
|
|
1,542
|
|
1,628
|
|
(5
|
)
|
Operating expenses
|
353
|
|
415
|
|
(15
|
)
|
|
1,424
|
|
1,472
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
130
|
|
73
|
|
78
|
|
|
118
|
|
156
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
26.9
|
%
|
15.0
|
%
|
11.9
|
pts
|
|
7.7
|
%
|
9.6
|
%
|
(1.9
|
pts)
|
Capital expenditures
|
17
|
|
18
|
|
(6
|
)
|
|
56
|
|
47
|
|
19
|
|
•
|
the sale of our publishing business in the second quarter; and
|
•
|
lower Toronto Blue Jays revenue; partially offset by
|
•
|
higher revenue generated by Today's Shopping Choice and Sportsnet.
|
•
|
lower Toronto Blue Jays player compensation, in part due to the salary timing impact of player trades in the first quarter of 2019; and
|
•
|
lower publishing-related costs due to the sale of the business; partially offset by
|
•
|
higher programming costs.
|
Rogers Communications Inc.
|
11
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except capital intensity)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures 1
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Wireless
|
288
|
|
277
|
|
4
|
|
|
960
|
|
777
|
|
24
|
|
Cable
|
290
|
|
358
|
|
(19
|
)
|
|
864
|
|
1,007
|
|
(14
|
)
|
Media
|
17
|
|
18
|
|
(6
|
)
|
|
56
|
|
47
|
|
19
|
|
Corporate
|
62
|
|
47
|
|
32
|
|
|
136
|
|
131
|
|
4
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures 1
|
657
|
|
700
|
|
(6
|
)
|
|
2,016
|
|
1,962
|
|
3
|
|
|
|
|
|
|
|
|
|
||||||
Capital intensity 2
|
17.5
|
%
|
18.6
|
%
|
(1.1
|
pts)
|
|
18.1
|
%
|
17.6
|
%
|
0.5
|
pts
|
1
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
|
2
|
As defined. See "Key Performance Indicators".
|
Rogers Communications Inc.
|
12
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA 1
|
1,712
|
|
1,620
|
|
6
|
|
|
4,682
|
|
4,462
|
|
5
|
|
Deduct (add):
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
627
|
|
558
|
|
12
|
|
|
1,850
|
|
1,647
|
|
12
|
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
(100
|
)
|
|
—
|
|
(16
|
)
|
(100
|
)
|
Restructuring, acquisition and other
|
42
|
|
47
|
|
(11
|
)
|
|
101
|
|
116
|
|
(13
|
)
|
Finance costs
|
215
|
|
176
|
|
22
|
|
|
610
|
|
588
|
|
4
|
|
Other expense (income)
|
16
|
|
15
|
|
7
|
|
|
2
|
|
(6
|
)
|
n/m
|
|
Income tax expense
|
219
|
|
235
|
|
(7
|
)
|
|
544
|
|
576
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
||||||
Net income
|
593
|
|
594
|
|
—
|
|
|
1,575
|
|
1,557
|
|
1
|
|
1
|
Adjusted EBITDA is a non-GAAP measure and should not be considered a substitute or alternative for GAAP measures. It is not a defined term under IFRS and does not have a standard meaning, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about this measure, including how we calculate it.
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation of property, plant and equipment
|
578
|
|
552
|
|
5
|
|
|
1,709
|
|
1,617
|
|
6
|
|
Amortization
|
4
|
|
6
|
|
(33
|
)
|
|
13
|
|
30
|
|
(57
|
)
|
Depreciation and amortization before depreciation of right-of-use assets
|
582
|
|
558
|
|
4
|
|
|
1,722
|
|
1,647
|
|
5
|
|
Depreciation of right-of-use assets 1
|
45
|
|
—
|
|
n/m
|
|
|
128
|
|
—
|
|
n/m
|
|
|
|
|
|
|
|
|
|
||||||
Total depreciation and amortization
|
627
|
|
558
|
|
12
|
|
|
1,850
|
|
1,647
|
|
12
|
|
1
|
See "Critical Accounting Policies and Estimates" for more information.
|
Rogers Communications Inc.
|
13
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Interest on borrowings 1
|
194
|
|
173
|
|
12
|
|
|
554
|
|
536
|
|
3
|
|
Interest on post-employment benefits liability
|
2
|
|
5
|
|
(60
|
)
|
|
8
|
|
10
|
|
(20
|
)
|
Loss on repayment of long-term debt
|
—
|
|
—
|
|
—
|
|
|
—
|
|
28
|
|
(100
|
)
|
Loss (gain) on foreign exchange
|
20
|
|
(27
|
)
|
n/m
|
|
|
(52
|
)
|
46
|
|
n/m
|
|
Change in fair value of derivative instruments
|
(19
|
)
|
27
|
|
n/m
|
|
|
54
|
|
(32
|
)
|
n/m
|
|
Capitalized interest
|
(5
|
)
|
(5
|
)
|
—
|
|
|
(14
|
)
|
(15
|
)
|
(7
|
)
|
Other
|
8
|
|
3
|
|
167
|
|
|
16
|
|
15
|
|
7
|
|
|
|
|
|
|
|
|
|
||||||
Finance costs before interest on lease liabilities
|
200
|
|
176
|
|
14
|
|
|
566
|
|
588
|
|
(4
|
)
|
Interest on lease liabilities 2
|
15
|
|
—
|
|
n/m
|
|
|
44
|
|
—
|
|
n/m
|
|
|
|
|
|
|
|
|
|
||||||
Total finance costs
|
215
|
|
176
|
|
22
|
|
|
610
|
|
588
|
|
4
|
|
1
|
Interest on borrowings includes interest on short-term borrowings and on long-term debt.
|
2
|
See "Critical Accounting Policies and Estimates" for more information.
|
•
|
interest on lease liabilities as a result of our adoption of IFRS 16; and
|
•
|
higher outstanding debt as a result of our debt issuances in April 2019, in large part to fund our acquisition of 600 MHz spectrum licences (see "Managing our Liquidity and Financial Resources").
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars, except tax rates)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Statutory income tax rate
|
26.7
|
%
|
26.7
|
%
|
|
26.7
|
%
|
26.7
|
%
|
Income before income tax expense
|
812
|
|
829
|
|
|
2,119
|
|
2,133
|
|
Computed income tax expense
|
217
|
|
221
|
|
|
566
|
|
570
|
|
Increase (decrease) in income tax expense resulting from:
|
|
|
|
|
|
||||
Non-(taxable) deductible stock-based compensation
|
(1
|
)
|
2
|
|
|
—
|
|
2
|
|
Non-deductible portion of equity losses
|
6
|
|
5
|
|
|
7
|
|
4
|
|
Income tax adjustment, legislative tax change
|
—
|
|
—
|
|
|
(23
|
)
|
—
|
|
Non-taxable portion of capital gains
|
(2
|
)
|
(1
|
)
|
|
(2
|
)
|
(9
|
)
|
Other items
|
(1
|
)
|
8
|
|
|
(4
|
)
|
9
|
|
|
|
|
|
|
|
||||
Total income tax expense
|
219
|
|
235
|
|
|
544
|
|
576
|
|
|
|
|
|
|
|
||||
Effective income tax rate
|
27.0
|
%
|
28.3
|
%
|
|
25.7
|
%
|
27.0
|
%
|
Cash income taxes paid
|
99
|
|
125
|
|
|
345
|
|
316
|
|
Rogers Communications Inc.
|
14
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
||||||||||||
(In millions of dollars, except per share amounts)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
||||
|
|
|
|
|
|
|
|
|||||||||
Net income
|
593
|
|
594
|
|
—
|
|
|
1,575
|
|
1,557
|
|
1
|
||||
Basic earnings per share
|
|
$1.16
|
|
|
$1.15
|
|
1
|
|
|
|
$3.07
|
|
|
$3.02
|
|
2
|
Diluted earnings per share
|
|
$1.14
|
|
|
$1.15
|
|
(1
|
)
|
|
|
$3.05
|
|
|
$3.01
|
|
1
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||||||
(In millions of dollars, except per share amounts)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA 1
|
1,712
|
|
1,620
|
|
6
|
|
|
4,682
|
|
4,462
|
|
5
|
|
||||
Deduct:
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
627
|
|
558
|
|
12
|
|
|
1,850
|
|
1,647
|
|
12
|
|
||||
Finance costs 2
|
215
|
|
176
|
|
22
|
|
|
610
|
|
560
|
|
9
|
|
||||
Other income
|
16
|
|
15
|
|
7
|
|
|
2
|
|
(6
|
)
|
n/m
|
|
||||
Income tax expense 3
|
232
|
|
246
|
|
(6
|
)
|
|
596
|
|
605
|
|
(1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income 1
|
622
|
|
625
|
|
—
|
|
|
1,624
|
|
1,656
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted basic earnings per share 1
|
|
$1.22
|
|
|
$1.21
|
|
1
|
|
|
|
$3.17
|
|
|
$3.22
|
|
(2
|
)
|
Adjusted diluted earnings per share 1
|
|
$1.19
|
|
|
$1.21
|
|
(2
|
)
|
|
|
$3.15
|
|
|
$3.21
|
|
(2
|
)
|
1
|
Adjusted EBITDA, adjusted net income, and adjusted basic and diluted earnings per share are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
2
|
Finance costs exclude a $28 million loss on repayment of long-term debt for the nine months ended September 30, 2018.
|
3
|
Income tax expense excludes recoveries of $13 million and $29 million (2018 - recoveries of $11 million and $29 million) for the three and nine months ended September 30, 2019, respectively, related to the income tax impact for adjusted items. Income tax expense also excludes a $23 million recovery (2018 - nil) as a result of legislative tax changes for the nine months ended September 30, 2019.
|
Rogers Communications Inc.
|
15
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
1,683
|
|
1,544
|
|
|
4,565
|
|
4,200
|
|
Change in non-cash operating working capital items
|
(57
|
)
|
77
|
|
|
(279
|
)
|
(72
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
1,626
|
|
1,621
|
|
|
4,286
|
|
4,128
|
|
Income taxes paid
|
(99
|
)
|
(125
|
)
|
|
(345
|
)
|
(316
|
)
|
Interest paid
|
(222
|
)
|
(192
|
)
|
|
(581
|
)
|
(575
|
)
|
|
|
|
|
|
|
||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
|
3,360
|
|
3,237
|
|
|
|
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|
||||
Capital expenditures
|
(657
|
)
|
(700
|
)
|
|
(2,016
|
)
|
(1,962
|
)
|
Additions to program rights
|
(15
|
)
|
(16
|
)
|
|
(29
|
)
|
(28
|
)
|
Changes in non-cash working capital related to property, plant and equipment and intangible assets
|
(63
|
)
|
(37
|
)
|
|
(144
|
)
|
(232
|
)
|
Acquisitions and other strategic transactions, net of cash acquired
|
—
|
|
—
|
|
|
(1,731
|
)
|
—
|
|
Other
|
11
|
|
5
|
|
|
1
|
|
16
|
|
|
|
|
|
|
|
||||
Cash used in investing activities
|
(724
|
)
|
(748
|
)
|
|
(3,919
|
)
|
(2,206
|
)
|
|
|
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|
||||
Net (repayment) proceeds received on short-term borrowings
|
(311
|
)
|
(255
|
)
|
|
(523
|
)
|
252
|
|
Net issuance (repayment) of long-term debt
|
—
|
|
—
|
|
|
2,276
|
|
(823
|
)
|
Net (payments) proceeds on settlement of debt derivatives and forward contracts
|
(22
|
)
|
16
|
|
|
(126
|
)
|
362
|
|
Principal payments of lease liabilities 1
|
(45
|
)
|
—
|
|
|
(124
|
)
|
—
|
|
Transaction costs incurred
|
—
|
|
(2
|
)
|
|
(33
|
)
|
(18
|
)
|
Repurchase of Class B Non-Voting Shares
|
(89
|
)
|
—
|
|
|
(294
|
)
|
—
|
|
Dividends paid
|
(256
|
)
|
(247
|
)
|
|
(760
|
)
|
(741
|
)
|
|
|
|
|
|
|
||||
Cash (used in) provided by financing activities
|
(723
|
)
|
(488
|
)
|
|
416
|
|
(968
|
)
|
|
|
|
|
|
|
||||
Change in cash and cash equivalents
|
(142
|
)
|
68
|
|
|
(143
|
)
|
63
|
|
Cash and cash equivalents (bank advances), beginning of period
|
404
|
|
(11
|
)
|
|
405
|
|
(6
|
)
|
|
|
|
|
|
|
||||
Cash and cash equivalents, end of period
|
262
|
|
57
|
|
|
262
|
|
57
|
|
1
|
Effective January 1, 2019, we adopted IFRS 16. We have not restated comparatives for 2018. See "Critical Accounting Policies and Estimates" for more information.
|
Rogers Communications Inc.
|
16
|
Third Quarter 2019
|
|
As at
September 30 |
|
As at
December 31 |
|
(In millions of dollars)
|
2019
|
|
2018
|
|
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
1,058
|
|
1,605
|
|
|
|
|
||
Total short-term borrowings
|
1,708
|
|
2,255
|
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from US commercial paper
|
3,228
|
|
1.32
|
|
4,257
|
|
|
10,046
|
|
1.33
|
|
13,361
|
|
Repayment of US commercial paper
|
(3,461
|
)
|
1.32
|
|
(4,568
|
)
|
|
(10,446
|
)
|
1.33
|
|
(13,881
|
)
|
Net repayment of US commercial paper
|
|
|
|
(311
|
)
|
|
|
|
(520
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
Proceeds received from credit facilities
|
—
|
|
—
|
|
—
|
|
|
420
|
|
1.34
|
|
561
|
|
Repayment of credit facilities
|
—
|
|
—
|
|
—
|
|
|
(420
|
)
|
1.34
|
|
(564
|
)
|
Net repayment of credit facilities
|
|
|
—
|
|
|
|
|
(3
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayment of short-term borrowings
|
|
|
(311
|
)
|
|
|
|
(523
|
)
|
Rogers Communications Inc.
|
17
|
Third Quarter 2019
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from US commercial paper
|
4,314
|
|
1.31
|
|
5,649
|
|
|
11,436
|
|
1.29
|
|
14,726
|
|
Repayment of US commercial paper
|
(4,512
|
)
|
1.31
|
|
(5,904
|
)
|
|
(11,232
|
)
|
1.29
|
|
(14,474
|
)
|
Net (repayment of) proceeds received from US commercial paper
|
|
|
(255
|
)
|
|
|
|
252
|
|
||||
|
|
|
|
|
|
|
|
||||||
Proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
225
|
|
||||
Repayment of accounts receivable securitization
|
|
|
—
|
|
|
|
|
(225
|
)
|
||||
Net proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Net (repayment of) proceeds received on short-term borrowings
|
|
|
(255
|
)
|
|
|
|
252
|
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Senior note issuances (Cdn$)
|
|
|
—
|
|
|
|
|
1,000
|
|
||||
Senior note issuances (US$)
|
—
|
|
—
|
|
—
|
|
|
1,250
|
|
1.34
|
|
1,676
|
|
Total senior note issuances
|
|
|
—
|
|
|
|
|
2,676
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(400
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance of senior notes
|
|
|
—
|
|
|
|
|
2,276
|
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance of long-term debt
|
|
|
—
|
|
|
|
|
2,276
|
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit facility borrowings (US$)
|
—
|
|
—
|
|
—
|
|
|
125
|
|
1.26
|
|
157
|
|
Credit facility repayments (US$)
|
—
|
|
—
|
|
—
|
|
|
(125
|
)
|
1.26
|
|
(157
|
)
|
Net borrowings under credit facilities
|
|
|
—
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note issuances (US$)
|
—
|
|
—
|
|
—
|
|
|
750
|
|
1.25
|
|
938
|
|
Senior notes repayments (US$)
|
—
|
|
—
|
|
—
|
|
|
(1,400
|
)
|
1.26
|
|
(1,761
|
)
|
Net repayment of senior notes
|
|
|
—
|
|
|
|
|
(823
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayment of long-term debt
|
|
|
—
|
|
|
|
|
(823
|
)
|
Rogers Communications Inc.
|
18
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Long-term debt net of transaction costs, beginning of period
|
16,163
|
|
14,000
|
|
|
14,290
|
|
14,448
|
|
Net issuance (repayment) of long-term debt
|
—
|
|
—
|
|
|
2,276
|
|
(823
|
)
|
Loss (gain) on foreign exchange
|
113
|
|
(135
|
)
|
|
(263
|
)
|
250
|
|
Deferred transaction costs incurred
|
—
|
|
(2
|
)
|
|
(33
|
)
|
(18
|
)
|
Amortization of deferred transaction costs
|
3
|
|
2
|
|
|
9
|
|
8
|
|
|
|
|
|
|
|
||||
Long-term debt net of transaction costs, end of period
|
16,279
|
|
13,865
|
|
|
16,279
|
|
13,865
|
|
Declaration date
|
Record date
|
Payment date
|
Dividend per
share (dollars)
|
|
Dividends paid
(in millions of dollars)
|
|
|
|
|
|
|
||
January 24, 2019
|
March 12, 2019
|
April 1, 2019
|
0.50
|
|
257
|
|
April 17, 2019
|
June 10, 2019
|
July 2, 2019
|
0.50
|
|
256
|
|
June 5, 2019
|
September 9, 2019
|
October 1, 2019
|
0.50
|
|
256
|
|
|
|
|
|
|
||
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
|
|
Rogers Communications Inc.
|
19
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
||||||||
(In millions of dollars)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
(restated) 1
|
|
|
|
|
(restated) 1
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA 2
|
1,712
|
|
1,620
|
|
6
|
|
|
4,682
|
|
4,462
|
|
5
|
Deduct:
|
|
|
|
|
|
|
|
|||||
Capital expenditures 3
|
657
|
|
700
|
|
(6
|
)
|
|
2,016
|
|
1,962
|
|
3
|
Interest on borrowings, net of capitalized interest
|
189
|
|
168
|
|
13
|
|
|
540
|
|
521
|
|
4
|
Cash income taxes 4
|
99
|
|
125
|
|
(21
|
)
|
|
345
|
|
316
|
|
9
|
|
|
|
|
|
|
|
|
|||||
Free cash flow 1, 2
|
767
|
|
627
|
|
22
|
|
|
1,781
|
|
1,663
|
|
7
|
1
|
Effective January 1, 2019, we have redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We have redefined free cash flow to simplify this measure and believe removing it will make us more comparable within our industry.
|
2
|
Adjusted EBITDA and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
3
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
|
4
|
Cash income taxes are net of refunds received.
|
Rogers Communications Inc.
|
20
|
Third Quarter 2019
|
|
As at
|
|
As at
|
|
|
|
|
||
|
September 30
|
|
January 1
|
|
|
|
|
||
(In millions of dollars)
|
2019
|
|
2019 1
|
|
$ Chg
|
|
% Chg
|
|
Explanation of significant changes
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||||
Cash and cash equivalents
|
262
|
|
405
|
|
(143
|
)
|
(35
|
)
|
See "Managing our Liquidity and Financial Resources".
|
Accounts receivable
|
2,097
|
|
2,259
|
|
(162
|
)
|
(7
|
)
|
Primarily a result of business seasonality.
|
Inventories
|
393
|
|
466
|
|
(73
|
)
|
(16
|
)
|
Reflects a decrease in Wireless handset inventories.
|
Current portion of contract assets
|
1,154
|
|
1,052
|
|
102
|
|
10
|
|
Reflects net increases in contracts with customers.
|
Other current assets
|
472
|
|
413
|
|
59
|
|
14
|
|
n/m
|
Current portion of derivative instruments
|
129
|
|
270
|
|
(141
|
)
|
(52
|
)
|
Primarily reflects changes in market values of our expenditure derivatives and debt derivatives as a result of the appreciation of the Cdn$ relative to the US$. See "Financial Risk Management".
|
Total current assets
|
4,507
|
|
4,865
|
|
(358
|
)
|
(7
|
)
|
|
|
|
|
|
|
|
||||
Property, plant and equipment
|
13,661
|
|
13,261
|
|
400
|
|
3
|
|
Primarily reflects capital expenditures and additions to right-of-use assets, partially offset by depreciation expense.
|
Intangible assets
|
8,893
|
|
7,205
|
|
1,688
|
|
23
|
|
Primarily reflects the acquisition of 600 MHz spectrum licences.
|
Investments
|
2,744
|
|
2,134
|
|
610
|
|
29
|
|
Primarily reflects fair value increases for certain publicly traded investments.
|
Derivative instruments
|
1,639
|
|
1,339
|
|
300
|
|
22
|
|
Primarily reflects changes in market values of certain debt derivatives as a result of a decrease in the US interest rate environment relative to the Canadian interest rate environment. See "Financial Risk Management".
|
Contract assets
|
488
|
|
535
|
|
(47
|
)
|
(9
|
)
|
n/m
|
Other long-term assets
|
207
|
|
132
|
|
75
|
|
57
|
|
n/m
|
Goodwill
|
3,923
|
|
3,905
|
|
18
|
|
—
|
|
n/m
|
|
|
|
|
|
|
||||
Total assets
|
36,062
|
|
33,376
|
|
2,686
|
|
8
|
|
|
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
||||
Short-term borrowings
|
1,708
|
|
2,255
|
|
(547
|
)
|
(24
|
)
|
Reflects a decrease in borrowings under our US CP program.
|
Accounts payable and accrued liabilities
|
2,572
|
|
2,997
|
|
(425
|
)
|
(14
|
)
|
Primarily a result of business seasonality.
|
Income tax payable
|
129
|
|
177
|
|
(48
|
)
|
(27
|
)
|
Reflects the excess of tax installments paid over current income tax expense.
|
Other current liabilities
|
114
|
|
132
|
|
(18
|
)
|
(14
|
)
|
n/m
|
Contract liabilities
|
166
|
|
233
|
|
(67
|
)
|
(29
|
)
|
Primarily reflects a decrease in customer deposits at the Toronto Blue Jays.
|
Current portion of long-term debt
|
1,400
|
|
900
|
|
500
|
|
56
|
|
Reflects the reclassification to current of our $900 million senior notes due September 2020, partially offset by the repayment of our $400 million senior notes in March 2019.
|
Current portion of lease liabilities
|
219
|
|
190
|
|
29
|
|
15
|
|
n/m
|
Current portion of derivative instruments
|
3
|
|
87
|
|
(84
|
)
|
(97
|
)
|
Primarily reflects the exercise of our bond forwards. See "Financial Risk Management".
|
Total current liabilities
|
6,311
|
|
6,971
|
|
(660
|
)
|
(9
|
)
|
|
|
|
|
|
|
|
|
|||
Provisions
|
37
|
|
35
|
|
2
|
|
6
|
|
n/m
|
Long-term debt
|
14,879
|
|
13,390
|
|
1,489
|
|
11
|
|
Primarily reflects the issuance of $1 billion and US$1.25 billion of senior notes in April 2019, partially offset by the reclassification to current of our $900 million senior notes due September 2020. See "Managing our Liquidity and Financial Resources".
|
Derivative instruments
|
11
|
|
22
|
|
(11
|
)
|
(50
|
)
|
n/m
|
Lease liabilities
|
1,435
|
|
1,355
|
|
80
|
|
6
|
|
Reflects liabilities related to new leases entered into during the year.
|
Other long-term liabilities
|
445
|
|
546
|
|
(101
|
)
|
(18
|
)
|
Primarily reflects a decrease in pension liability as a result of employer contributions.
|
Deferred tax liabilities
|
3,301
|
|
2,901
|
|
400
|
|
14
|
|
Primarily reflects an increase in taxable temporary differences between the accounting and tax bases for certain assets.
|
Total liabilities
|
26,419
|
|
25,220
|
|
1,199
|
|
5
|
|
|
|
|
|
|
|
|
||||
Shareholders' equity
|
9,643
|
|
8,156
|
|
1,487
|
|
18
|
|
Reflects changes in retained earnings and equity reserves.
|
|
|
|
|
|
|
||||
Total liabilities and shareholders' equity
|
36,062
|
|
33,376
|
|
2,686
|
|
8
|
|
|
1
|
Effective January 1, 2019, we adopted IFRS 16. We have not restated comparatives for 2018. We will therefore use January 1, 2019 figures for comparative purposes. See "Critical Accounting Policies and Estimates" for more information.
|
Rogers Communications Inc.
|
21
|
Third Quarter 2019
|
As at September 30, 2019
|
Total available
|
|
Drawn
|
|
Letters of credit
|
|
US CP program
|
|
Net available
|
|
(In millions of dollars)
|
||||||||||
|
|
|
|
|
|
|||||
Bank credit facilities:
|
|
|
|
|
|
|||||
Revolving
|
3,200
|
|
—
|
|
8
|
|
1,059
|
|
2,133
|
|
Outstanding letters of credit
|
101
|
|
—
|
|
101
|
|
—
|
|
—
|
|
Total bank credit facilities
|
3,301
|
|
—
|
|
109
|
|
1,059
|
|
2,133
|
|
Accounts receivable securitization
|
1,050
|
|
650
|
|
—
|
|
—
|
|
400
|
|
Cash and cash equivalents
|
262
|
|
—
|
|
—
|
|
—
|
|
262
|
|
|
|
|
|
|
|
|
||||
Total
|
4,613
|
|
650
|
|
109
|
|
1,059
|
|
2,795
|
|
As at December 31, 2018
|
Total available
|
|
Drawn
|
|
Letters of credit
|
|
US CP program
|
|
Net available
|
|
(In millions of dollars)
|
||||||||||
|
|
|
|
|
|
|||||
Bank credit facilities:
|
|
|
|
|
|
|||||
Revolving
|
3,200
|
|
—
|
|
9
|
|
1,605
|
|
1,586
|
|
Outstanding letters of credit
|
982
|
|
—
|
|
982
|
|
—
|
|
—
|
|
Total bank credit facilities
|
4,182
|
|
—
|
|
991
|
|
1,605
|
|
1,586
|
|
Accounts receivable securitization
|
1,050
|
|
650
|
|
—
|
|
—
|
|
400
|
|
Cash and cash equivalents
|
405
|
|
—
|
|
—
|
|
—
|
|
405
|
|
|
|
|
|
|
|
|||||
Total
|
5,637
|
|
650
|
|
991
|
|
1,605
|
|
2,391
|
|
Issuance
|
Standard & Poor's
|
Moody's
|
Fitch
|
Corporate credit issuer default rating 1
|
BBB+ with a stable outlook
|
Baa1 with a stable outlook
|
BBB+ with a stable outlook
|
Senior unsecured debt 1
|
BBB+ with a stable outlook
|
Baa1 with a stable outlook
|
BBB+ with a stable outlook
|
US commercial paper 1
|
A-2
|
P-2
|
N/A 2
|
1
|
Unchanged in the quarter.
|
2
|
We have not sought a rating from Fitch for our short-term obligations.
|
Rogers Communications Inc.
|
22
|
Third Quarter 2019
|
|
As at
September 30 |
|
As at
January 1
|
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|||
Long-term debt 1
|
16,417
|
|
14,404
|
|
14,404
|
|
Net debt derivative assets valued without any adjustment for credit risk 2
|
(1,739
|
)
|
(1,448
|
)
|
(1,448
|
)
|
Short-term borrowings
|
1,708
|
|
2,255
|
|
2,255
|
|
Lease liabilities 3
|
1,654
|
|
1,545
|
|
—
|
|
Cash and cash equivalents
|
(262
|
)
|
(405
|
)
|
(405
|
)
|
|
|
|
|
|||
Adjusted net debt 4
|
17,778
|
|
16,351
|
|
14,806
|
|
Divided by: trailing 12-month adjusted EBITDA 4
|
6,250
|
|
6,157
|
|
5,983
|
|
|
|
|
|
|||
Debt leverage ratio 4
|
2.8
|
|
2.7
|
|
2.5
|
|
1
|
Includes current and long-term portion of long-term debt before deferred transaction costs and discounts. See "Reconciliation of adjusted net debt and debt leverage ratio" in "Non-GAAP Measures" for the calculation of this amount.
|
2
|
For purposes of calculating adjusted net debt and debt leverage ratio, we believe including debt derivatives valued without adjustment for credit risk is commonly used to evaluate debt leverage and for market valuation and transactional purposes.
|
3
|
See "Critical Accounting Policies and Estimates" for more information.
|
4
|
Adjusted net debt, adjusted EBITDA, and debt leverage ratio are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
Rogers Communications Inc.
|
23
|
Third Quarter 2019
|
|
As at
September 30 |
|
As at
December 31
|
|
|
2019
|
|
2018
|
|
|
|
|
||
Common shares outstanding 1
|
|
|
||
Class A Voting Shares
|
111,154,811
|
|
111,155,637
|
|
Class B Non-Voting Shares 2
|
399,446,133
|
|
403,657,038
|
|
|
|
|
||
Total common shares
|
510,600,944
|
|
514,812,675
|
|
|
|
|
||
Options to purchase Class B Non-Voting Shares
|
|
|
||
Outstanding options
|
3,131,782
|
|
2,719,612
|
|
Outstanding options exercisable
|
1,018,312
|
|
1,059,590
|
|
1
|
Holders of our Class B Non-Voting Shares are entitled to receive notice of and to attend shareholder meetings; however, they are not entitled to vote at these meetings except as required by law or stipulated by stock exchanges. If an offer is made to purchase outstanding Class A Shares, there is no requirement under applicable law or our constating documents that an offer be made for the outstanding Class B Non-Voting Shares, and there is no other protection available to shareholders under our constating documents. If an offer is made to purchase both classes of shares, the offer for the Class A Shares may be made on different terms than the offer to the holders of Class B Non-Voting Shares.
|
2
|
Includes 61,487 Class B Non-Voting Shares repurchased this quarter under our NCIB program, the liability for which was settled in October and the shares cancelled.
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
—
|
|
—
|
|
—
|
|
|
420
|
|
1.34
|
|
561
|
|
Debt derivatives settled
|
—
|
|
—
|
|
—
|
|
|
420
|
|
1.34
|
|
564
|
|
Net cash received
|
|
|
—
|
|
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
3,228
|
|
1.32
|
|
4,257
|
|
|
10,046
|
|
1.33
|
|
13,361
|
|
Debt derivatives settled
|
3,452
|
|
1.33
|
|
4,578
|
|
|
10,421
|
|
1.33
|
|
13,865
|
|
Net cash paid
|
|
|
(22
|
)
|
|
|
|
(18
|
)
|
Rogers Communications Inc.
|
24
|
Third Quarter 2019
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
—
|
|
—
|
|
—
|
|
|
125
|
|
1.26
|
|
157
|
|
Debt derivatives settled
|
—
|
|
—
|
|
—
|
|
|
125
|
|
1.26
|
|
157
|
|
Net cash (paid) received
|
|
|
—
|
|
|
|
|
(1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
4,314
|
|
1.31
|
|
5,649
|
|
|
11,436
|
|
1.29
|
|
14,726
|
|
Debt derivatives settled
|
4,503
|
|
1.31
|
|
5,877
|
|
|
11,213
|
|
1.29
|
|
14,413
|
|
Net cash received
|
|
|
16
|
|
|
|
|
37
|
|
1
|
Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.
|
Rogers Communications Inc.
|
25
|
Third Quarter 2019
|
|
Three months ended September 30, 2019
|
|
|
Nine months ended September 30, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
—
|
|
—
|
|
—
|
|
|
780
|
|
1.32
|
|
1,031
|
|
Expenditure derivatives settled
|
240
|
|
1.25
|
|
301
|
|
|
690
|
|
1.25
|
|
863
|
|
|
Three months ended September 30, 2018
|
|
|
Nine months ended September 30, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
120
|
|
1.30
|
|
156
|
|
|
720
|
|
1.24
|
|
896
|
|
Expenditure derivatives settled
|
210
|
|
1.30
|
|
273
|
|
|
630
|
|
1.30
|
|
819
|
|
Rogers Communications Inc.
|
26
|
Third Quarter 2019
|
|
As at September 30, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
amount
(US$)
|
|
Exchange
rate
|
|
Notional
amount
(Cdn$)
|
|
Fair value
(Cdn$)
|
|
Debt derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
6,050
|
|
1.1442
|
|
6,922
|
|
1,670
|
|
As liabilities
|
1,250
|
|
1.3386
|
|
1,673
|
|
(10
|
)
|
Short-term debt derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
799
|
|
1.3222
|
|
1,056
|
|
1
|
|
Net mark-to-market debt derivative asset
|
|
|
|
1,661
|
|
|||
Expenditure derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
810
|
|
1.2712
|
|
1,030
|
|
42
|
|
As liabilities
|
360
|
|
1.3322
|
|
480
|
|
(4
|
)
|
Net mark-to-market expenditure derivative asset
|
|
|
|
38
|
|
|||
Equity derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
—
|
|
—
|
|
223
|
|
55
|
|
|
|
|
|
|
||||
Net mark-to-market asset
|
|
|
|
1,754
|
|
|
As at December 31, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
amount
(US$)
|
|
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
|
|
Rogers Communications Inc.
|
27
|
Third Quarter 2019
|
•
|
any licensee that holds 75 MHz of existing spectrum or more will be eligible to apply for 60 MHz;
|
•
|
any licensee that holds 50 MHz of existing spectrum will be eligible to apply for 50 MHz; and
|
•
|
all other licensees will be eligible to apply for 20 MHz.
|
Rogers Communications Inc.
|
28
|
Third Quarter 2019
|
Rogers Communications Inc.
|
29
|
Third Quarter 2019
|
Rogers Communications Inc.
|
30
|
Third Quarter 2019
|
•
|
applied a single discount rate to a portfolio of leases with similar characteristics;
|
•
|
excluded initial direct costs from measuring the right-of-use asset as at January 1, 2019;
|
•
|
used hindsight in determining the lease term where the contract contains purchase, extension, or termination options; and
|
•
|
relied upon our assessment of whether leases are onerous under the requirements of IAS 37, Provisions, contingent liabilities and contingent assets as at December 31, 2018 as an alternative to reviewing our right-of-use assets for impairment.
|
(in millions of dollars)
|
Reference
|
As reported as at
December 31, 2018
|
|
Effect of IFRS 16 transition
|
|
Subsequent to transition as at
January 1, 2019
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Other current assets
|
|
436
|
|
(23
|
)
|
413
|
|
Remainder of current assets
|
|
4,452
|
|
—
|
|
4,452
|
|
Total current assets
|
|
4,888
|
|
(23
|
)
|
4,865
|
|
|
|
|
|
|
|||
Property, plant and equipment
|
i
|
11,780
|
|
1,481
|
|
13,261
|
|
Remainder of long-term assets
|
|
15,250
|
|
—
|
|
15,250
|
|
|
|
|
|
|
|||
Total assets
|
|
31,918
|
|
1,458
|
|
33,376
|
|
|
|
|
|
|
|||
Liabilities and shareholders' equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable and accrued liabilities
|
|
3,052
|
|
(55
|
)
|
2,997
|
|
Current portion of lease liabilities
|
i
|
—
|
|
190
|
|
190
|
|
Remainder of current liabilities
|
|
3,784
|
|
—
|
|
3,784
|
|
Total current liabilities
|
|
6,836
|
|
135
|
|
6,971
|
|
|
|
|
|
|
|||
Lease liabilities
|
i
|
—
|
|
1,355
|
|
1,355
|
|
Deferred tax liabilities
|
|
2,910
|
|
(9
|
)
|
2,901
|
|
Remainder of long-term liabilities
|
|
13,993
|
|
—
|
|
13,993
|
|
Total liabilities
|
|
23,739
|
|
1,481
|
|
25,220
|
|
|
|
|
|
|
|||
Shareholders' equity
|
|
8,179
|
|
(23
|
)
|
8,156
|
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
|
31,918
|
|
1,458
|
|
33,376
|
|
Rogers Communications Inc.
|
31
|
Third Quarter 2019
|
•
|
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.
|
•
|
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.
|
•
|
the non-executive chairman emeritus of Cassels Brock and Blackwell LLP, a law firm that provides legal services to the Company; and
|
•
|
the chair of the board of Transcontinental Inc., a company that provides printing services to the Company.
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Printing and legal services 1
|
1
|
|
4
|
|
|
5
|
|
9
|
|
1
|
The amount paid for legal services is nominal.
|
Rogers Communications Inc.
|
32
|
Third Quarter 2019
|
•
|
subscriber counts;
|
•
|
Wireless;
|
•
|
Cable; and
|
•
|
homes passed (Cable);
|
•
|
subscriber churn (churn);
|
•
|
blended average billings per user (ABPU);
|
•
|
blended average revenue per user (ARPU);
|
•
|
capital intensity; and
|
•
|
total service revenue.
|
Rogers Communications Inc.
|
33
|
Third Quarter 2019
|
Non-GAAP measure |
Why we use it |
How we calculate it |
Most
comparable IFRS financial measure |
||
Adjusted EBITDA
Adjusted EBITDA margin
|
●
|
|
To evaluate the performance of our businesses, and when making decisions about the ongoing operations of the business and our ability to generate cash flows.
|
Adjusted EBITDA:
Net income
add (deduct)
income tax expense (recovery); finance costs; depreciation and amortization; other expense (income); restructuring, acquisition and other; and loss (gain) on disposition of property, plant and equipment.
Adjusted EBITDA margin:
Adjusted EBITDA
divided by
revenue.
|
Net income
|
●
|
|
We believe that certain investors and analysts use adjusted EBITDA to measure our ability to service debt and to meet other payment obligations.
|
|||
●
|
|
We also use it as one component in determining short-term incentive compensation for all management employees.
|
|||
Adjusted net
income
Adjusted basic
and diluted
earnings per
share
|
●
|
|
To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.
|
Adjusted net income:
Net income
add (deduct)
restructuring, acquisition and other; loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; loss on bond forward derivatives; and income tax adjustments on these items, including adjustments as a result of legislative changes.
Adjusted basic and diluted earnings per share:
Adjusted net income and adjusted net income including the dilutive effect of stock-based compensation
divided by
basic and diluted weighted average shares outstanding.
|
Net income
Basic and
diluted
earnings per
share
|
Free cash flow 1
|
●
|
|
To show how much cash we have available to repay debt and reinvest in our company, which is an important indicator of our financial strength and performance.
|
Adjusted EBITDA
deduct
capital expenditures; interest on borrowings net of capitalized interest; and cash income taxes.
|
Cash provided
by operating
activities
|
●
|
|
We believe that some investors and analysts use free cash flow to value a business and its underlying assets.
|
|||
Adjusted net
debt
|
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Total long-term debt
add (deduct)
current portion of long-term debt; deferred transaction costs and discounts; net debt derivative (assets) liabilities; credit risk adjustment related to net debt derivatives; current portion of lease liabilities; lease liabilities; bank advances (cash and cash equivalents); and short-term borrowings.
|
Long-term
debt
|
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
|||
Debt leverage ratio
|
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Adjusted net debt (defined above)
divided by
12-month trailing adjusted EBITDA (defined above).
|
Long-term debt
divided by net
income
|
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
1
|
Effective January 1, 2019, we redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We redefined free cash flow to simplify this measure and we believe removing it will make us more comparable within our industry.
|
Rogers Communications Inc.
|
34
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Net income
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
Add:
|
|
|
|
|
|
||||
Income tax expense
|
219
|
|
235
|
|
|
544
|
|
576
|
|
Finance costs
|
215
|
|
176
|
|
|
610
|
|
588
|
|
Depreciation and amortization
|
627
|
|
558
|
|
|
1,850
|
|
1,647
|
|
|
|
|
|
|
|
||||
EBITDA
|
1,654
|
|
1,563
|
|
|
4,579
|
|
4,368
|
|
Add (deduct):
|
|
|
|
|
|
||||
Other expense (income)
|
16
|
|
15
|
|
|
2
|
|
(6
|
)
|
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,712
|
|
1,620
|
|
|
4,682
|
|
4,462
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,712
|
|
1,620
|
|
|
4,682
|
|
4,462
|
|
Divided by: total revenue
|
3,754
|
|
3,769
|
|
|
11,121
|
|
11,158
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA margin
|
45.6
|
%
|
43.0
|
%
|
|
42.1
|
%
|
40.0
|
%
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Net income
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
Add (deduct):
|
|
|
|
|
|
||||
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
Loss on repayment of long-term debt
|
—
|
|
—
|
|
|
—
|
|
28
|
|
Income tax impact of above items
|
(13
|
)
|
(11
|
)
|
|
(29
|
)
|
(29
|
)
|
Income tax adjustment, legislative tax change
|
—
|
|
—
|
|
|
(23
|
)
|
—
|
|
|
|
|
|
|
|
||||
Adjusted net income
|
622
|
|
625
|
|
|
1,624
|
|
1,656
|
|
Rogers Communications Inc.
|
35
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share:
|
|
|
|
|
|
||||||||
Adjusted net income
|
622
|
|
625
|
|
|
1,624
|
|
1,656
|
|
||||
Divided by:
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
511
|
|
515
|
|
|
513
|
|
515
|
|
||||
|
|
|
|
|
|
|
|
||||||
Adjusted basic earnings per share
|
|
$1.22
|
|
|
$1.21
|
|
|
|
$3.17
|
|
|
$3.22
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share:
|
|
|
|
|
|
||||||||
Diluted adjusted net income
|
613
|
|
625
|
|
|
1,618
|
|
1,654
|
|
||||
Divided by:
|
|
|
|
|
|
||||||||
Diluted weighted average number of shares outstanding
|
513
|
|
516
|
|
|
514
|
|
516
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share
|
|
$1.19
|
|
|
$1.21
|
|
|
|
$3.15
|
|
|
$3.21
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
(In millions of dollars)
|
|
(restated) 1
|
|
|
|
|
(restated) 1
|
|
|
|
|
|
|
|
|
||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
|
3,360
|
|
3,237
|
|
Add (deduct):
|
|
|
|
|
|
||||
Capital expenditures
|
(657
|
)
|
(700
|
)
|
|
(2,016
|
)
|
(1,962
|
)
|
Interest on borrowings, net of capitalized interest
|
(189
|
)
|
(168
|
)
|
|
(540
|
)
|
(521
|
)
|
Interest paid
|
222
|
|
192
|
|
|
581
|
|
575
|
|
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Program rights amortization
|
(17
|
)
|
(9
|
)
|
|
(58
|
)
|
(39
|
)
|
Net change in contract asset balances
|
26
|
|
74
|
|
|
55
|
|
168
|
|
Change in non-cash operating working capital items
|
57
|
|
(77
|
)
|
|
279
|
|
72
|
|
Other adjustments
|
(22
|
)
|
(36
|
)
|
|
19
|
|
17
|
|
|
|
|
|
|
|
|
|||
Free cash flow
|
767
|
|
627
|
|
|
1,781
|
|
1,663
|
|
1
|
Effective January 1, 2019, we have redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We have redefined free cash flow to simplify this measure and believe removing it will make us more comparable within our industry.
|
Rogers Communications Inc.
|
36
|
Third Quarter 2019
|
|
As at
September 30 |
|
As at
January 1
|
|
As at
December 31
|
|
(In millions of dollars)
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|||
Current portion of long-term debt
|
1,400
|
|
900
|
|
900
|
|
Long-term debt
|
14,879
|
|
13,390
|
|
13,390
|
|
Deferred transaction costs and discounts
|
138
|
|
114
|
|
114
|
|
|
16,417
|
|
14,404
|
|
14,404
|
|
Add (deduct):
|
|
|
|
|||
Net debt derivative assets
|
(1,660
|
)
|
(1,373
|
)
|
(1,373
|
)
|
Credit risk adjustment related to net debt derivative assets
|
(79
|
)
|
(75
|
)
|
(75
|
)
|
Short-term borrowings
|
1,708
|
|
2,255
|
|
2,255
|
|
Current portion of lease liabilities
|
219
|
|
190
|
|
—
|
|
Lease liabilities
|
1,435
|
|
1,355
|
|
—
|
|
Cash and cash equivalents
|
(262
|
)
|
(405
|
)
|
(405
|
)
|
|
|
|
|
|||
Adjusted net debt
|
17,778
|
|
16,351
|
|
14,806
|
|
|
As at
September 30 |
|
As at
January 1 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|||
Adjusted net debt
|
17,778
|
|
16,351
|
|
14,806
|
|
Divided by: trailing 12-month adjusted EBITDA
|
6,250
|
|
6,157
|
|
5,983
|
|
|
|
|
|
|||
Debt leverage ratio
|
2.8
|
|
2.7
|
|
2.5
|
|
Rogers Communications Inc.
|
37
|
Third Quarter 2019
|
|
2019
|
|
2018 1
|
|
2017 1
|
|||||||||||||||||||||
(In millions of dollars, except per share amounts)
|
Q3
|
|
Q2
|
|
Q1
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
|
Q4
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless
|
2,324
|
|
2,244
|
|
2,189
|
|
|
2,464
|
|
2,331
|
|
2,214
|
|
2,191
|
|
|
2,288
|
|
||||||||
Cable
|
994
|
|
997
|
|
976
|
|
|
989
|
|
983
|
|
991
|
|
969
|
|
|
981
|
|
||||||||
Media
|
483
|
|
591
|
|
468
|
|
|
540
|
|
488
|
|
608
|
|
532
|
|
|
526
|
|
||||||||
Corporate items and intercompany eliminations
|
(47
|
)
|
(52
|
)
|
(46
|
)
|
|
(55
|
)
|
(33
|
)
|
(57
|
)
|
(59
|
)
|
|
(64
|
)
|
||||||||
Total revenue
|
3,754
|
|
3,780
|
|
3,587
|
|
|
3,938
|
|
3,769
|
|
3,756
|
|
3,633
|
|
|
3,731
|
|
||||||||
Total service revenue 2
|
3,233
|
|
3,345
|
|
3,143
|
|
|
3,276
|
|
3,271
|
|
3,300
|
|
3,127
|
|
|
3,164
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted EBITDA 3
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless
|
1,138
|
|
1,128
|
|
1,015
|
|
|
1,028
|
|
1,099
|
|
1,029
|
|
934
|
|
|
965
|
|
||||||||
Cable
|
499
|
|
478
|
|
445
|
|
|
489
|
|
490
|
|
462
|
|
433
|
|
|
477
|
|
||||||||
Media
|
130
|
|
72
|
|
(84
|
)
|
|
40
|
|
73
|
|
60
|
|
23
|
|
|
37
|
|
||||||||
Corporate items and intercompany eliminations
|
(55
|
)
|
(43
|
)
|
(41
|
)
|
|
(36
|
)
|
(42
|
)
|
(47
|
)
|
(52
|
)
|
|
(43
|
)
|
||||||||
Adjusted EBITDA
|
1,712
|
|
1,635
|
|
1,335
|
|
|
1,521
|
|
1,620
|
|
1,504
|
|
1,338
|
|
|
1,436
|
|
||||||||
Deduct (add):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Depreciation and amortization
|
627
|
|
614
|
|
609
|
|
|
564
|
|
558
|
|
545
|
|
544
|
|
|
531
|
|
||||||||
Gain on disposition of property, plant and equipment
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(5
|
)
|
—
|
|
(11
|
)
|
|
—
|
|
||||||||
Restructuring, acquisition and other
|
42
|
|
39
|
|
20
|
|
|
94
|
|
47
|
|
26
|
|
43
|
|
|
31
|
|
||||||||
Finance costs
|
215
|
|
206
|
|
189
|
|
|
205
|
|
176
|
|
193
|
|
219
|
|
|
184
|
|
||||||||
Other expense (income)
|
16
|
|
(1
|
)
|
(13
|
)
|
|
(26
|
)
|
15
|
|
2
|
|
(23
|
)
|
|
3
|
|
||||||||
Net income before income tax expense
|
812
|
|
777
|
|
530
|
|
|
684
|
|
829
|
|
738
|
|
566
|
|
|
687
|
|
||||||||
Income tax expense
|
219
|
|
186
|
|
139
|
|
|
182
|
|
235
|
|
200
|
|
141
|
|
|
188
|
|
||||||||
Net income
|
593
|
|
591
|
|
391
|
|
|
502
|
|
594
|
|
538
|
|
425
|
|
|
499
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$1.16
|
|
|
$1.15
|
|
|
$0.76
|
|
|
|
$0.97
|
|
|
$1.15
|
|
|
$1.04
|
|
|
$0.83
|
|
|
|
$0.97
|
|
Diluted
|
|
$1.14
|
|
|
$1.15
|
|
|
$0.76
|
|
|
|
$0.97
|
|
|
$1.15
|
|
|
$1.04
|
|
|
$0.80
|
|
|
|
$0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
593
|
|
591
|
|
391
|
|
|
502
|
|
594
|
|
538
|
|
425
|
|
|
499
|
|
||||||||
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring, acquisition and other
|
42
|
|
39
|
|
20
|
|
|
94
|
|
47
|
|
26
|
|
43
|
|
|
31
|
|
||||||||
Loss on bond forward derivatives
|
—
|
|
—
|
|
—
|
|
|
21
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Loss on repayment of long-term debt
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
28
|
|
|
—
|
|
||||||||
Gain on disposition of property, plant and equipment
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(5
|
)
|
—
|
|
(11
|
)
|
|
—
|
|
||||||||
Income tax impact of above items
|
(13
|
)
|
(10
|
)
|
(6
|
)
|
|
(32
|
)
|
(11
|
)
|
(10
|
)
|
(8
|
)
|
|
(7
|
)
|
||||||||
Income tax adjustment, legislative tax change
|
—
|
|
(23
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2
|
|
||||||||
Adjusted net income 3
|
622
|
|
597
|
|
405
|
|
|
585
|
|
625
|
|
554
|
|
477
|
|
|
525
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted earnings per share 3:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$1.22
|
|
|
$1.17
|
|
|
$0.79
|
|
|
|
$1.14
|
|
|
$1.21
|
|
|
$1.08
|
|
|
$0.93
|
|
|
|
$1.02
|
|
Diluted
|
|
$1.19
|
|
|
$1.16
|
|
|
$0.78
|
|
|
|
$1.13
|
|
|
$1.21
|
|
|
$1.07
|
|
|
$0.90
|
|
|
|
$1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Capital expenditures
|
657
|
|
742
|
|
617
|
|
|
828
|
|
700
|
|
657
|
|
605
|
|
|
841
|
|
||||||||
Cash provided by operating activities
|
1,305
|
|
1,057
|
|
998
|
|
|
1,051
|
|
1,304
|
|
1,048
|
|
885
|
|
|
1,142
|
|
||||||||
Free cash flow 3,4
|
767
|
|
609
|
|
405
|
|
|
471
|
|
627
|
|
595
|
|
441
|
|
|
340
|
|
1
|
Effective January 1, 2019, we adopted IFRS 16. We have not restated prior periods. See "Critical Accounting Policies and Estimates" for more information.
|
2
|
As defined. See "Key Performance Indicators".
|
3
|
Adjusted EBITDA, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
4
|
2017 and 2018 free cash flow have been restated. See "Managing our Liquidity and Financial Resources" for more information.
|
Rogers Communications Inc.
|
38
|
Third Quarter 2019
|
Three months ended September 30
|
RCI 1,2
|
RCCI 1,2
|
Non-guarantor
subsidiaries 1,2
|
Consolidating
adjustments 1,2
|
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Selected Statements of Income data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
—
|
|
10
|
|
3,299
|
|
3,302
|
|
505
|
|
496
|
|
(50
|
)
|
(39
|
)
|
3,754
|
|
3,769
|
|
Net income (loss)
|
593
|
|
594
|
|
461
|
|
491
|
|
140
|
|
(195
|
)
|
(601
|
)
|
(296
|
)
|
593
|
|
594
|
|
Nine months ended
September 30 |
RCI 1,2
|
RCCI 1,2
|
Non-guarantor
subsidiaries 1,2 |
Consolidating
adjustments 1,2 |
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Selected Statements of Income data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
—
|
|
11
|
|
9,671
|
|
9,636
|
|
1,603
|
|
1,667
|
|
(153
|
)
|
(156
|
)
|
11,121
|
|
11,158
|
|
Net income (loss)
|
1,575
|
|
1,557
|
|
1,322
|
|
1,379
|
|
159
|
|
143
|
|
(1,481
|
)
|
(1,522
|
)
|
1,575
|
|
1,557
|
|
As at period end
|
RCI 1,2
|
RCCI 1,2
|
Non-guarantor
subsidiaries 1,2 |
Consolidating
adjustments 1,2 |
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
Sep. 30
2019 |
|
Dec. 31 2018 3
|
|
Sep. 30
2019 |
|
Dec. 31 2018 3
|
|
Sep. 30
2019 |
|
Dec. 31 2018 3
|
|
Sep. 30
2019 |
|
Dec. 31 2018 3
|
|
Sep. 30
2019 |
|
Dec. 31 2018 3
|
|
Selected Statements of Financial Position data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
25,948
|
|
24,687
|
|
23,479
|
|
22,870
|
|
10,442
|
|
10,256
|
|
(55,362
|
)
|
(52,925
|
)
|
4,507
|
|
4,888
|
|
Non-current assets
|
29,807
|
|
27,485
|
|
25,972
|
|
22,396
|
|
3,692
|
|
3,700
|
|
(27,916
|
)
|
(26,551
|
)
|
31,555
|
|
27,030
|
|
Current liabilities
|
26,586
|
|
25,995
|
|
28,562
|
|
27,170
|
|
8,136
|
|
8,206
|
|
(56,973
|
)
|
(54,535
|
)
|
6,311
|
|
6,836
|
|
Non-current liabilities
|
16,749
|
|
15,149
|
|
4,528
|
|
3,025
|
|
165
|
|
110
|
|
(1,334
|
)
|
(1,381
|
)
|
20,108
|
|
16,903
|
|
1
|
For the purposes of this table, investments in subsidiary companies are accounted for by the equity method.
|
2
|
Amounts recorded in current liabilities and non-current liabilities for RCCI do not include any obligations arising as a result of being a guarantor or co-obligor, as the case may be, under any of RCI's long-term debt.
|
3
|
Effective January 1, 2019, we adopted IFRS 16. We have not restated comparatives for 2018. See "Critical Accounting Policies and Estimates" for more information.
|
Rogers Communications Inc.
|
39
|
Third Quarter 2019
|
•
|
typically includes words like could, expect, may, anticipate, assume, believe, intend, estimate, plan, project, guidance, outlook, target, and similar expressions, although not all forward-looking information includes them;
|
•
|
includes conclusions, forecasts, and projections that are based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors, most of which are confidential and proprietary and that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
|
•
|
was approved by our management on the date of this MD&A.
|
•
|
revenue;
|
•
|
total service revenue;
|
•
|
adjusted EBITDA;
|
•
|
capital expenditures;
|
•
|
cash income tax payments;
|
•
|
free cash flow;
|
•
|
dividend payments;
|
•
|
the growth of new products and services;
|
•
|
expected growth in subscribers and the services to which they subscribe;
|
•
|
the cost of acquiring and retaining subscribers and deployment of new services;
|
•
|
continued cost reductions and efficiency improvements;
|
•
|
traction against our debt leverage ratio; and
|
•
|
all other statements that are not historical facts.
|
•
|
a substantial portion of our 2019 US dollar-denominated expenditures is hedged at an average exchange rate of $1.25/US$;
|
•
|
key interest rates remain relatively stable throughout 2019;
|
•
|
no significant additional legal or regulatory developments (including resolution of the proceedings regarding the CRTC's decision on the rates we can charge to resellers of high-speed access services, including Rogers' TPIA service), shifts in economic conditions, or macro changes in the competitive environment affecting our business activities. We note that regulatory decisions issued during 2019 could materially alter underlying assumptions around our 2019 Wireless, Cable, and/or Media results in the current and future years, the impacts of which are currently unknown and not factored into our guidance;
|
•
|
overall wireless and cable market penetration in Canada grows in 2019 at a similar rate as in 2018, supported by healthy economic conditions and population growth;
|
•
|
continued subscriber growth in Wireless and Internet and a decline in Television and Phone subscribers; and
|
•
|
our market share of wireless and cable subscriber growth is maintained;
|
•
|
Wireless and Cable customers continue to upgrades their services to higher speed and consumption tiers;
|
•
|
lower Wireless overage revenue as a result of the faster-than-expected adoption of our new Rogers Infinite™ unlimited data plans;
|
•
|
capital expenditures continue to focus on our network and service investments:
|
•
|
we continue to invest appropriately to ensure we have competitive wireless and cable networks through (i) building a 4.5G to 5G wireless network and (ii) upgrading our hybrid fibre-coaxial network to lower the number of homes passed per node, utilize the latest technologies, and deliver an even more reliable customer experience; and
|
•
|
we continue to invest in service capabilities.
|
Rogers Communications Inc.
|
40
|
Third Quarter 2019
|
•
|
general economic and industry growth rates;
|
•
|
currency exchange rates and interest rates;
|
•
|
product pricing levels and competitive intensity;
|
•
|
subscriber growth;
|
•
|
pricing, usage, and churn rates;
|
•
|
changes in government regulation;
|
•
|
technology deployment;
|
•
|
availability of devices;
|
•
|
timing of new product launches;
|
•
|
content and equipment costs;
|
•
|
the integration of acquisitions; and
|
•
|
industry structure and stability.
|
•
|
regulatory changes;
|
•
|
technological changes;
|
•
|
economic conditions;
|
•
|
unanticipated changes in content or equipment costs;
|
•
|
changing conditions in the entertainment, information, and communications industries;
|
•
|
the integration of acquisitions;
|
•
|
litigation and tax matters;
|
•
|
the level of competitive intensity;
|
•
|
the emergence of new opportunities; and
|
•
|
new interpretations and new accounting standards from accounting standards bodies.
|
Rogers Communications Inc.
|
41
|
Third Quarter 2019
|
Rogers Communications Inc.
|
1
|
Third Quarter 2019
|
|
|
Three months ended September 30
|
|
|
Nine months ended
September 30 |
|
|||||
|
Note
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
4
|
|
3,754
|
|
3,769
|
|
|
11,121
|
|
11,158
|
|
|
|
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|||||
Operating costs
|
5
|
|
2,042
|
|
2,149
|
|
|
6,439
|
|
6,696
|
|
Depreciation and amortization
|
|
627
|
|
558
|
|
|
1,850
|
|
1,647
|
|
|
Gain on disposition of property, plant and equipment
|
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
|
Restructuring, acquisition and other
|
6
|
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Finance costs
|
7
|
|
215
|
|
176
|
|
|
610
|
|
588
|
|
Other expense (income)
|
8
|
|
16
|
|
15
|
|
|
2
|
|
(6
|
)
|
|
|
|
|
|
|
|
|||||
Income before income tax expense
|
|
812
|
|
829
|
|
|
2,119
|
|
2,133
|
|
|
Income tax expense
|
|
219
|
|
235
|
|
|
544
|
|
576
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income for the period
|
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|||||
Basic
|
9
|
|
$1.16
|
$1.15
|
|
$3.07
|
$3.02
|
||||
Diluted
|
9
|
|
$1.14
|
$1.15
|
|
$3.05
|
$3.01
|
Rogers Communications Inc.
|
2
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended
September 30 |
|
||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Net income for the period
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
Items that will not be reclassified to income
|
|
|
|
|
|
||||
Equity investments measured at fair value through other comprehensive income (FVTOCI):
|
|
|
|
|
|
||||
Increase (decrease) in fair value
|
202
|
|
(7
|
)
|
|
638
|
|
(428
|
)
|
Related income tax (expense) recovery
|
(27
|
)
|
2
|
|
|
(87
|
)
|
58
|
|
|
|
|
|
|
|
||||
Equity investments measured at FVTOCI
|
175
|
|
(5
|
)
|
|
551
|
|
(370
|
)
|
|
|
|
|
|
|
||||
Items that may subsequently be reclassified to income:
|
|
|
|
|
|
||||
Cash flow hedging derivative instruments:
|
|
|
|
|
|
||||
Unrealized gain (loss) in fair value of derivative instruments
|
653
|
|
(132
|
)
|
|
319
|
|
118
|
|
Reclassification to net income of (gain) loss on debt derivatives
|
(114
|
)
|
135
|
|
|
262
|
|
(249
|
)
|
Reclassification to net income or property, plant and equipment of (gain) loss on expenditure derivatives
|
(17
|
)
|
—
|
|
|
(51
|
)
|
5
|
|
Reclassification to net income for accrued interest
|
(11
|
)
|
(10
|
)
|
|
(35
|
)
|
(33
|
)
|
Related income tax (expense) recovery
|
(102
|
)
|
14
|
|
|
(62
|
)
|
5
|
|
|
|
|
|
|
|
||||
Cash flow hedging derivative instruments
|
409
|
|
7
|
|
|
433
|
|
(154
|
)
|
|
|
|
|
|
|
||||
Share of other comprehensive income (loss) of equity-accounted investments, net of tax
|
1
|
|
(5
|
)
|
|
(5
|
)
|
5
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss) for the period
|
585
|
|
(3
|
)
|
|
979
|
|
(519
|
)
|
|
|
|
|
|
|
||||
Comprehensive income for the period
|
1,178
|
|
591
|
|
|
2,554
|
|
1,038
|
|
Rogers Communications Inc.
|
3
|
Third Quarter 2019
|
|
|
As at
September 30 |
|
As at
January 1
|
|
As at
December 31 |
|
|
|
Note
|
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
(see note 2)
|
|
|
|||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
262
|
|
405
|
|
405
|
|
|
Accounts receivable
|
|
2,097
|
|
2,259
|
|
2,259
|
|
|
Inventories
|
|
393
|
|
466
|
|
466
|
|
|
Current portion of contract assets
|
|
1,154
|
|
1,052
|
|
1,052
|
|
|
Other current assets
|
|
472
|
|
413
|
|
436
|
|
|
Current portion of derivative instruments
|
10
|
|
129
|
|
270
|
|
270
|
|
Total current assets
|
|
4,507
|
|
4,865
|
|
4,888
|
|
|
|
|
|
|
|
||||
Property, plant and equipment
|
|
13,661
|
|
13,261
|
|
11,780
|
|
|
Intangible assets
|
11
|
|
8,893
|
|
7,205
|
|
7,205
|
|
Investments
|
12
|
|
2,744
|
|
2,134
|
|
2,134
|
|
Derivative instruments
|
10
|
|
1,639
|
|
1,339
|
|
1,339
|
|
Contract assets
|
|
488
|
|
535
|
|
535
|
|
|
Other long-term assets
|
|
207
|
|
132
|
|
132
|
|
|
Goodwill
|
|
3,923
|
|
3,905
|
|
3,905
|
|
|
|
|
|
|
|
||||
Total assets
|
|
36,062
|
|
33,376
|
|
31,918
|
|
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term borrowings
|
13
|
|
1,708
|
|
2,255
|
|
2,255
|
|
Accounts payable and accrued liabilities
|
|
2,572
|
|
2,997
|
|
3,052
|
|
|
Income tax payable
|
|
129
|
|
177
|
|
177
|
|
|
Other current liabilities
|
|
114
|
|
132
|
|
132
|
|
|
Contract liabilities
|
|
166
|
|
233
|
|
233
|
|
|
Current portion of long-term debt
|
14
|
|
1,400
|
|
900
|
|
900
|
|
Current portion of lease liabilities
|
15
|
|
219
|
|
190
|
|
—
|
|
Current portion of derivative instruments
|
10
|
|
3
|
|
87
|
|
87
|
|
Total current liabilities
|
|
6,311
|
|
6,971
|
|
6,836
|
|
|
|
|
|
|
|
|
|||
Provisions
|
|
37
|
|
35
|
|
35
|
|
|
Long-term debt
|
14
|
|
14,879
|
|
13,390
|
|
13,390
|
|
Derivative instruments
|
10
|
|
11
|
|
22
|
|
22
|
|
Lease liabilities
|
15
|
|
1,435
|
|
1,355
|
|
—
|
|
Other long-term liabilities
|
|
445
|
|
546
|
|
546
|
|
|
Deferred tax liabilities
|
|
3,301
|
|
2,901
|
|
2,910
|
|
|
Total liabilities
|
|
26,419
|
|
25,220
|
|
23,739
|
|
|
|
|
|
|
|
|
|||
Shareholders' equity
|
16
|
|
9,643
|
|
8,156
|
|
8,179
|
|
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
|
36,062
|
|
33,376
|
|
31,918
|
|
|
|
|
|
|
|
||||
Subsequent events
|
16
|
|
|
|
|
|||
Contingent liabilities
|
19
|
|
|
|
|
Rogers Communications Inc.
|
4
|
Third Quarter 2019
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Nine months ended September 30, 2019
|
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, 2018
|
71
|
|
111,155
|
|
406
|
|
403,657
|
|
7,182
|
|
636
|
|
(125
|
)
|
9
|
|
8,179
|
|
Adjustments pertaining to IFRS 16 adoption (see note 2)
|
—
|
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
Balances, January 1, 2019 (see note 2)
|
71
|
|
111,155
|
|
406
|
|
403,657
|
|
7,159
|
|
636
|
|
(125
|
)
|
9
|
|
8,156
|
|
Net income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
1,575
|
|
—
|
|
—
|
|
—
|
|
1,575
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
551
|
|
—
|
|
—
|
|
551
|
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
433
|
|
—
|
|
433
|
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
551
|
|
433
|
|
(5
|
)
|
979
|
|
Comprehensive income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
1,575
|
|
551
|
|
433
|
|
(5
|
)
|
2,554
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reclassification to retained earnings for disposition of FVTOCI investments
|
—
|
|
—
|
|
—
|
|
—
|
|
16
|
|
(16
|
)
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Repurchase of Class B Non-Voting Shares
|
—
|
|
—
|
|
(4
|
)
|
(4,273
|
)
|
(294
|
)
|
—
|
|
—
|
|
—
|
|
(298
|
)
|
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(769
|
)
|
—
|
|
—
|
|
—
|
|
(769
|
)
|
Share class exchange
|
—
|
|
(1
|
)
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total transactions with shareholders
|
—
|
|
(1
|
)
|
(4
|
)
|
(4,272
|
)
|
(1,063
|
)
|
—
|
|
—
|
|
—
|
|
(1,067
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, September 30, 2019
|
71
|
|
111,154
|
|
402
|
|
399,385
|
|
7,687
|
|
1,171
|
|
308
|
|
4
|
|
9,643
|
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Nine months ended September 30, 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, January 1, 2018
|
72
|
|
112,407
|
|
405
|
|
402,403
|
|
6,070
|
|
1,013
|
|
(63
|
)
|
(5
|
)
|
7,492
|
|
Net income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
1,557
|
|
—
|
|
—
|
|
—
|
|
1,557
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(370
|
)
|
—
|
|
—
|
|
(370
|
)
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(154
|
)
|
—
|
|
(154
|
)
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
5
|
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(370
|
)
|
(154
|
)
|
5
|
|
(519
|
)
|
Comprehensive income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
1,557
|
|
(370
|
)
|
(154
|
)
|
5
|
|
1,038
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(741
|
)
|
—
|
|
—
|
|
—
|
|
(741
|
)
|
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
|
|
(741
|
)
|
—
|
|
—
|
|
—
|
|
(741
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, September 30, 2018
|
71
|
|
111,155
|
|
406
|
|
403,657
|
|
6,886
|
|
643
|
|
(217
|
)
|
—
|
|
7,789
|
|
Rogers Communications Inc.
|
5
|
Third Quarter 2019
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
|||||
|
Note
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
Operating activities:
|
|
|
|
|
|
|
|||||
Net income for the period
|
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
627
|
|
558
|
|
|
1,850
|
|
1,647
|
|
|
Program rights amortization
|
|
17
|
|
9
|
|
|
58
|
|
39
|
|
|
Finance costs
|
7
|
|
215
|
|
176
|
|
|
610
|
|
588
|
|
Income tax expense
|
|
219
|
|
235
|
|
|
544
|
|
576
|
|
|
Post-employment benefits contributions, net of expense
|
|
33
|
|
31
|
|
|
(82
|
)
|
(38
|
)
|
|
Gain on disposition of property, plant and equipment
|
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
|
Net change in contract asset balances
|
|
(26
|
)
|
(74
|
)
|
|
(55
|
)
|
(168
|
)
|
|
Other
|
|
5
|
|
20
|
|
|
65
|
|
15
|
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
|
1,683
|
|
1,544
|
|
|
4,565
|
|
4,200
|
|
|
Change in non-cash operating working capital items
|
20
|
|
(57
|
)
|
77
|
|
|
(279
|
)
|
(72
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
|
1,626
|
|
1,621
|
|
|
4,286
|
|
4,128
|
|
|
Income taxes paid
|
|
(99
|
)
|
(125
|
)
|
|
(345
|
)
|
(316
|
)
|
|
Interest paid
|
|
(222
|
)
|
(192
|
)
|
|
(581
|
)
|
(575
|
)
|
|
|
|
|
|
|
|
|
|||||
Cash provided by operating activities
|
|
1,305
|
|
1,304
|
|
|
3,360
|
|
3,237
|
|
|
|
|
|
|
|
|
|
|||||
Investing activities:
|
|
|
|
|
|
|
|||||
Capital expenditures
|
20
|
|
(657
|
)
|
(700
|
)
|
|
(2,016
|
)
|
(1,962
|
)
|
Additions to program rights
|
|
(15
|
)
|
(16
|
)
|
|
(29
|
)
|
(28
|
)
|
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
|
(63
|
)
|
(37
|
)
|
|
(144
|
)
|
(232
|
)
|
|
Acquisitions and other strategic transactions, net of cash acquired
|
11
|
|
—
|
|
—
|
|
|
(1,731
|
)
|
—
|
|
Other
|
|
11
|
|
5
|
|
|
1
|
|
16
|
|
|
|
|
|
|
|
|
|
|||||
Cash used in investing activities
|
|
(724
|
)
|
(748
|
)
|
|
(3,919
|
)
|
(2,206
|
)
|
|
|
|
|
|
|
|
|
|||||
Financing activities:
|
|
|
|
|
|
|
|||||
Net (repayment) proceeds received on short-term borrowings
|
13
|
|
(311
|
)
|
(255
|
)
|
|
(523
|
)
|
252
|
|
Net issuance (repayment) of long-term debt
|
14
|
|
—
|
|
—
|
|
|
2,276
|
|
(823
|
)
|
Net (payments) proceeds on settlement of debt derivatives and forward contracts
|
10
|
|
(22
|
)
|
16
|
|
|
(126
|
)
|
362
|
|
Principal payments of lease liabilities
|
15
|
|
(45
|
)
|
—
|
|
|
(124
|
)
|
—
|
|
Transaction costs incurred
|
14
|
|
—
|
|
(2
|
)
|
|
(33
|
)
|
(18
|
)
|
Repurchase of Class B Non-Voting Shares
|
16
|
|
(89
|
)
|
—
|
|
|
(294
|
)
|
—
|
|
Dividends paid
|
|
(256
|
)
|
(247
|
)
|
|
(760
|
)
|
(741
|
)
|
|
|
|
|
|
|
|
|
|||||
Cash (used in) provided by financing activities
|
|
(723
|
)
|
(488
|
)
|
|
416
|
|
(968
|
)
|
|
|
|
|
|
|
|
|
|||||
Change in cash and cash equivalents
|
|
(142
|
)
|
68
|
|
|
(143
|
)
|
63
|
|
|
Cash and cash equivalents (bank advances), beginning of period
|
|
404
|
|
(11
|
)
|
|
405
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents, end of period
|
|
262
|
|
57
|
|
|
262
|
|
57
|
|
Rogers Communications Inc.
|
6
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Segment
|
Principal activities
|
Wireless
|
Wireless telecommunications operations for Canadian consumers and businesses.
|
Cable
|
Cable telecommunications operations, including Internet, television, 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 business, 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, and digital media.
|
Rogers Communications Inc.
|
7
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
applied a single discount rate to a portfolio of leases with similar characteristics;
|
•
|
excluded initial direct costs from measuring the right-of-use asset as at January 1, 2019;
|
•
|
used hindsight in determining the lease term where the contract contains purchase, extension, or termination options; and
|
•
|
relied upon our assessment of whether leases are onerous under the requirements of IAS 37, Provisions, contingent liabilities and contingent assets as at December 31, 2018 as an alternative to reviewing our right-of-use assets for impairment.
|
Rogers Communications Inc.
|
8
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
(In millions of dollars)
|
Reference
|
As reported as at
December 31, 2018 |
|
Effect of IFRS 16 transition
|
|
Subsequent to transition as at
January 1, 2019 |
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
|
405
|
|
—
|
|
405
|
|
Accounts receivable
|
|
2,259
|
|
—
|
|
2,259
|
|
Inventories
|
|
466
|
|
—
|
|
466
|
|
Current portion of contract assets
|
|
1,052
|
|
—
|
|
1,052
|
|
Other current assets
|
|
436
|
|
(23
|
)
|
413
|
|
Current portion of derivative instruments
|
|
270
|
|
—
|
|
270
|
|
Total current assets
|
|
4,888
|
|
(23
|
)
|
4,865
|
|
|
|
|
|
|
|||
Property, plant and equipment
|
i
|
11,780
|
|
1,481
|
|
13,261
|
|
Intangible assets
|
|
7,205
|
|
—
|
|
7,205
|
|
Investments
|
|
2,134
|
|
—
|
|
2,134
|
|
Derivative instruments
|
|
1,339
|
|
—
|
|
1,339
|
|
Contract assets
|
|
535
|
|
—
|
|
535
|
|
Other long-term assets
|
|
132
|
|
—
|
|
132
|
|
Goodwill
|
|
3,905
|
|
—
|
|
3,905
|
|
|
|
|
|
|
|||
Total assets
|
|
31,918
|
|
1,458
|
|
33,376
|
|
|
|
|
|
|
|||
Liabilities and shareholders' equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Short-term borrowings
|
|
2,255
|
|
—
|
|
2,255
|
|
Accounts payable and accrued liabilities
|
|
3,052
|
|
(55
|
)
|
2,997
|
|
Income tax payable
|
|
177
|
|
—
|
|
177
|
|
Other current liabilities
|
|
132
|
|
—
|
|
132
|
|
Contract liabilities
|
|
233
|
|
—
|
|
233
|
|
Current portion of long-term debt
|
|
900
|
|
—
|
|
900
|
|
Current portion of derivative instruments
|
|
87
|
|
—
|
|
87
|
|
Current portion of lease liabilities
|
i
|
—
|
|
190
|
|
190
|
|
Total current liabilities
|
|
6,836
|
|
135
|
|
6,971
|
|
|
|
|
|
|
|||
Provisions
|
|
35
|
|
—
|
|
35
|
|
Long-term debt
|
|
13,390
|
|
—
|
|
13,390
|
|
Derivative instruments
|
|
22
|
|
—
|
|
22
|
|
Lease liabilities
|
i
|
—
|
|
1,355
|
|
1,355
|
|
Other long-term liabilities
|
|
546
|
|
—
|
|
546
|
|
Deferred tax liabilities
|
|
2,910
|
|
(9
|
)
|
2,901
|
|
Total liabilities
|
|
23,739
|
|
1,481
|
|
25,220
|
|
|
|
|
|
|
|||
Shareholders' equity
|
|
8,179
|
|
(23
|
)
|
8,156
|
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
|
31,918
|
|
1,458
|
|
33,376
|
|
•
|
the inclusion of lease payments beyond minimum commitments relating to reasonably certain renewal periods or extension options that had not yet been exercised as at December 31, 2018; partially offset by
|
•
|
the effect of discounting on the minimum lease payments; and
|
Rogers Communications Inc.
|
9
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
certain costs to which we are contractually committed under lease contracts but which do not qualify to be accounted for as a lease liability, such as variable lease payments not tied to an index or rate.
|
•
|
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.
|
•
|
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.
|
10
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Three months ended September 30, 2019
|
Note
|
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate
items and eliminations |
|
Consolidated
totals |
|
(In millions of dollars)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Revenue
|
4
|
|
2,324
|
|
994
|
|
483
|
|
(47
|
)
|
3,754
|
|
|
|
|
|
|
|
|
||||||
Operating costs
|
5
|
|
1,186
|
|
495
|
|
353
|
|
8
|
|
2,042
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
|
1,138
|
|
499
|
|
130
|
|
(55
|
)
|
1,712
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
|
|
|
|
627
|
|
|||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
|
42
|
|
||||
Finance costs
|
7
|
|
|
|
|
|
215
|
|
||||
Other expense
|
8
|
|
|
|
|
|
16
|
|
||||
|
|
|
|
|
|
|
||||||
Income before income taxes
|
|
|
|
|
|
812
|
|
Three months ended September 30, 2018
|
Note
|
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate
items and
eliminations
|
|
Consolidated
totals
|
|
(In millions of dollars)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Revenue
|
4
|
|
2,331
|
|
983
|
|
488
|
|
(33
|
)
|
3,769
|
|
|
|
|
|
|
|
|
||||||
Operating costs
|
5
|
|
1,232
|
|
493
|
|
415
|
|
9
|
|
2,149
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
|
1,099
|
|
490
|
|
73
|
|
(42
|
)
|
1,620
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
|
|
|
|
558
|
|
|||||
Gain on disposition of property, plant and equipment
|
|
|
|
|
|
(5
|
)
|
|||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
|
47
|
|
||||
Finance costs
|
7
|
|
|
|
|
|
176
|
|
||||
Other expense
|
8
|
|
|
|
|
|
15
|
|
||||
|
|
|
|
|
|
|
||||||
Income before income taxes
|
|
|
|
|
|
829
|
|
Nine months ended September 30, 2019
|
Note
|
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate
items and eliminations |
|
Consolidated
totals |
|
(In millions of dollars)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Revenue
|
4
|
|
6,757
|
|
2,967
|
|
1,542
|
|
(145
|
)
|
11,121
|
|
|
|
|
|
|
|
|
||||||
Operating costs
|
5
|
|
3,476
|
|
1,545
|
|
1,424
|
|
(6
|
)
|
6,439
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
|
3,281
|
|
1,422
|
|
118
|
|
(139
|
)
|
4,682
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
|
|
|
|
1,850
|
|
|||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
|
101
|
|
||||
Finance costs
|
7
|
|
|
|
|
|
610
|
|
||||
Other expense
|
8
|
|
|
|
|
|
2
|
|
||||
|
|
|
|
|
|
|
||||||
Income before income taxes
|
|
|
|
|
|
2,119
|
|
Rogers Communications Inc.
|
11
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Nine months ended September 30, 2018
|
Note
|
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate
items and eliminations |
|
Consolidated
totals |
|
(In millions of dollars)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Revenue
|
4
|
|
6,736
|
|
2,943
|
|
1,628
|
|
(149
|
)
|
11,158
|
|
|
|
|
|
|
|
|
||||||
Operating costs
|
5
|
|
3,674
|
|
1,558
|
|
1,472
|
|
(8
|
)
|
6,696
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
|
3,062
|
|
1,385
|
|
156
|
|
(141
|
)
|
4,462
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
|
|
|
|
1,647
|
|
|||||
Gain on disposition of property, plant and equipment
|
|
|
|
|
|
(16
|
)
|
|||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
|
116
|
|
||||
Finance costs
|
7
|
|
|
|
|
|
588
|
|
||||
Other income
|
8
|
|
|
|
|
|
(6
|
)
|
||||
|
|
|
|
|
|
|
||||||
Income before income taxes
|
|
|
|
|
|
2,133
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Wireless
|
|
|
|
|
|
||||
Service revenue
|
1,808
|
|
1,837
|
|
|
5,368
|
|
5,285
|
|
Equipment revenue
|
516
|
|
494
|
|
|
1,389
|
|
1,451
|
|
|
|
|
|
|
|
||||
Total Wireless
|
2,324
|
|
2,331
|
|
|
6,757
|
|
6,736
|
|
|
|
|
|
|
|
||||
Cable
|
|
|
|
|
|
||||
Internet
|
570
|
|
534
|
|
|
1,684
|
|
1,578
|
|
Television
|
363
|
|
357
|
|
|
1,075
|
|
1,079
|
|
Phone
|
56
|
|
88
|
|
|
197
|
|
277
|
|
Service revenue
|
989
|
|
979
|
|
|
2,956
|
|
2,934
|
|
Equipment revenue
|
5
|
|
4
|
|
|
11
|
|
9
|
|
|
|
|
|
|
|
||||
Total Cable
|
994
|
|
983
|
|
|
2,967
|
|
2,943
|
|
|
|
|
|
|
|
||||
Total Media
|
483
|
|
488
|
|
|
1,542
|
|
1,628
|
|
|
|
|
|
|
|
||||
Corporate items and intercompany eliminations
|
(47
|
)
|
(33
|
)
|
|
(145
|
)
|
(149
|
)
|
|
|
|
|
|
|
||||
Total revenue
|
3,754
|
|
3,769
|
|
|
11,121
|
|
11,158
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Cost of equipment sales
|
537
|
|
526
|
|
|
1,516
|
|
1,584
|
|
Merchandise for resale
|
58
|
|
54
|
|
|
167
|
|
163
|
|
Other external purchases
|
949
|
|
1,001
|
|
|
3,192
|
|
3,312
|
|
Employee salaries, benefits, and stock-based compensation
|
498
|
|
568
|
|
|
1,564
|
|
1,637
|
|
|
|
|
|
|
|
||||
Total operating costs
|
2,042
|
|
2,149
|
|
|
6,439
|
|
6,696
|
|
Rogers Communications Inc.
|
12
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
Note
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
||||
Interest on borrowings 1
|
|
194
|
|
173
|
|
|
554
|
|
536
|
|
Interest on post-employment benefits liability
|
|
2
|
|
5
|
|
|
8
|
|
10
|
|
Loss on repayment of long-term debt
|
14
|
—
|
|
—
|
|
|
—
|
|
28
|
|
Loss (gain) on foreign exchange
|
|
20
|
|
(27
|
)
|
|
(52
|
)
|
46
|
|
Change in fair value of derivative instruments
|
|
(19
|
)
|
27
|
|
|
54
|
|
(32
|
)
|
Capitalized interest
|
|
(5
|
)
|
(5
|
)
|
|
(14
|
)
|
(15
|
)
|
Other
|
|
8
|
|
3
|
|
|
16
|
|
15
|
|
|
|
|
|
|
|
|
||||
Finance costs before interest on lease liabilities
|
|
200
|
|
176
|
|
|
566
|
|
588
|
|
Interest on lease liabilities
|
15
|
15
|
|
—
|
|
|
44
|
|
—
|
|
|
|
|
|
|
|
|
||||
Total finance costs
|
|
215
|
|
176
|
|
|
610
|
|
588
|
|
1
|
Interest on borrowings includes interest on short-term borrowings and on long-term debt.
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Losses from associates and joint ventures
|
25
|
|
20
|
|
|
28
|
|
17
|
|
Other investment income
|
(9
|
)
|
(5
|
)
|
|
(26
|
)
|
(23
|
)
|
|
|
|
|
|
|
||||
Total other expense (income)
|
16
|
|
15
|
|
|
2
|
|
(6
|
)
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
|||||
(In millions of dollars, except per share amounts)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|||||
Numerator (basic) - Net income for the period
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
|
|
|
|
|
|
|
|||||
Denominator - Number of shares (in millions):
|
|
|
|
|
|
|||||
Weighted average number of shares outstanding - basic
|
511
|
|
515
|
|
|
513
|
|
515
|
|
|
Effect of dilutive securities (in millions):
|
|
|
|
|
|
|||||
Employee stock options and restricted share units
|
2
|
|
1
|
|
|
1
|
|
1
|
|
|
|
|
|
|
|
|
|||||
Weighted average number of shares outstanding - diluted
|
513
|
|
516
|
|
|
514
|
|
516
|
|
|
|
|
|
|
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|||||
Basic
|
|
$1.16
|
|
$1.15
|
|
$3.07
|
$3.02
|
|||
Diluted
|
|
$1.14
|
|
$1.15
|
|
$3.05
|
$3.01
|
Rogers Communications Inc.
|
13
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
—
|
|
—
|
|
—
|
|
|
420
|
|
1.34
|
|
561
|
|
Debt derivatives settled
|
—
|
|
—
|
|
—
|
|
|
420
|
|
1.34
|
|
564
|
|
Net cash received
|
|
|
—
|
|
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
3,228
|
|
1.32
|
|
4,257
|
|
|
10,046
|
|
1.33
|
|
13,361
|
|
Debt derivatives settled
|
3,452
|
|
1.33
|
|
4,578
|
|
|
10,421
|
|
1.33
|
|
13,865
|
|
Net cash paid
|
|
|
(22
|
)
|
|
|
|
(18
|
)
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
—
|
|
—
|
|
—
|
|
|
125
|
|
1.26
|
|
157
|
|
Debt derivatives settled
|
—
|
|
—
|
|
—
|
|
|
125
|
|
1.26
|
|
157
|
|
Net cash (paid) received
|
|
|
—
|
|
|
|
|
(1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
4,314
|
|
1.31
|
|
5,649
|
|
|
11,436
|
|
1.29
|
|
14,726
|
|
Debt derivatives settled
|
4,503
|
|
1.31
|
|
5,877
|
|
|
11,213
|
|
1.29
|
|
14,413
|
|
Net cash received
|
|
|
16
|
|
|
|
|
37
|
|
Rogers Communications Inc.
|
14
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
(In millions of dollars, except interest rates)
|
|
|
|
|||||||
|
|
US$
|
|
Hedging effect
|
||||||
Effective date
|
Principal/Notional amount (US$)
|
|
Maturity date
|
Coupon rate
|
|
|
Fixed hedged (Cdn$) interest rate 1
|
|
Equivalent (Cdn$)
|
|
|
|
|
|
|
|
|
||||
2019 issuances
|
|
|
|
|
|
|
||||
April 30, 2019
|
1,250
|
|
2049
|
4.350
|
%
|
|
4.173
|
%
|
1,676
|
|
|
|
|
|
|
|
|
||||
2018 issuances
|
|
|
|
|
|
|
||||
February 8, 2018
|
750
|
|
2048
|
4.300
|
%
|
|
4.193
|
%
|
938
|
|
1
|
Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional (US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
—
|
|
—
|
|
—
|
|
|
780
|
|
1.32
|
|
1,031
|
|
Expenditure derivatives settled
|
240
|
|
1.25
|
|
301
|
|
|
690
|
|
1.25
|
|
863
|
|
Rogers Communications Inc.
|
15
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional (US$)
|
|
Exchange rate
|
|
Notional (Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
120
|
|
1.30
|
|
156
|
|
|
720
|
|
1.24
|
|
896
|
|
Expenditure derivatives settled
|
210
|
|
1.30
|
|
273
|
|
|
630
|
|
1.30
|
|
819
|
|
Rogers Communications Inc.
|
16
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
financial assets and financial liabilities in Level 1 are valued by referring to quoted prices in active markets for identical assets and liabilities;
|
•
|
financial assets and financial liabilities in Level 2 are valued using inputs based on observable market data, either directly or indirectly, other than the quoted prices; and
|
•
|
Level 3 valuations are based on inputs that are not based on observable market data.
|
|
Carrying value
|
|
Fair value (Level 1)
|
|
Fair value (Level 2)
|
|
||||||
|
As at
Sept. 30 |
|
As at
Dec. 31 |
|
As at
Sept. 30 |
|
As at
Dec. 31 |
|
As at
Sept. 30 |
|
As at
Dec. 31 |
|
(In millions of dollars)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
||||||
Financial assets
|
|
|
|
|
|
|
||||||
Investments, measured at fair value:
|
|
|
|
|
|
|
||||||
Investments in publicly traded companies
|
1,711
|
|
1,051
|
|
1,711
|
|
1,051
|
|
—
|
|
—
|
|
Derivatives:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
1,670
|
|
1,354
|
|
—
|
|
—
|
|
1,670
|
|
1,354
|
|
Debt derivatives not accounted for as hedges
|
1
|
|
41
|
|
—
|
|
—
|
|
1
|
|
41
|
|
Expenditure derivatives accounted for as cash flow hedges
|
42
|
|
122
|
|
—
|
|
—
|
|
42
|
|
122
|
|
Equity derivatives not accounted for as hedges
|
55
|
|
92
|
|
—
|
|
—
|
|
55
|
|
92
|
|
|
|
|
|
|
|
|
||||||
Total financial assets
|
3,479
|
|
2,660
|
|
1,711
|
|
1,051
|
|
1,768
|
|
1,609
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities
|
|
|
|
|
|
|
||||||
Derivatives:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
10
|
|
22
|
|
—
|
|
—
|
|
10
|
|
22
|
|
Bond forwards accounted for as cash flow hedges
|
—
|
|
87
|
|
—
|
|
—
|
|
—
|
|
87
|
|
Expenditure derivatives accounted for as cash flow hedges
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
|
|
|
|
|
|
|
|
||||||
Total financial liabilities
|
14
|
|
109
|
|
—
|
|
—
|
|
14
|
|
109
|
|
|
As at September 30, 2019
|
|
As at December 31, 2018
|
|
||||
(In millions of dollars)
|
Carrying amount
|
|
Fair value 1
|
|
Carrying amount
|
|
Fair value 1
|
|
|
|
|
|
|
||||
Long-term debt (including current portion)
|
16,279
|
|
18,843
|
|
14,290
|
|
15,110
|
|
1
|
Long-term debt (including current portion) is measured at Level 2 in the three-level fair value hierarchy.
|
Rogers Communications Inc.
|
17
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
As at
September 30 |
|
As at
December 31
|
|
(In millions of dollars)
|
2019
|
|
2018
|
|
|
|
|
||
Investments in:
|
|
|
||
Publicly traded companies
|
1,711
|
|
1,051
|
|
Private companies
|
128
|
|
145
|
|
Investments, measured at FVTOCI
|
1,839
|
|
1,196
|
|
Investments, associates and joint ventures
|
905
|
|
938
|
|
|
|
|
||
Total investments
|
2,744
|
|
2,134
|
|
|
As at
September 30 |
|
As at
December 31
|
|
(In millions of dollars)
|
2019
|
|
2018
|
|
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
1,058
|
|
1,605
|
|
|
|
|
||
Total short-term borrowings
|
1,708
|
|
2,255
|
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
|
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
|
3,228
|
|
1.32
|
|
4,257
|
|
|
10,046
|
|
1.33
|
|
13,361
|
|
Repayment of US commercial paper
|
(3,461
|
)
|
1.32
|
|
(4,568
|
)
|
|
(10,446
|
)
|
1.33
|
|
(13,881
|
)
|
Net repayment of US commercial paper
|
|
|
|
(311
|
)
|
|
|
|
|
(520
|
)
|
||
|
|
|
|
|
|
|
|
||||||
Proceeds received from credit facilities
|
—
|
|
—
|
|
—
|
|
|
420
|
|
1.34
|
|
561
|
|
Repayment of credit facilities
|
—
|
|
—
|
|
—
|
|
|
(420
|
)
|
1.34
|
|
(564
|
)
|
Net repayment of credit facilities
|
|
|
—
|
|
|
|
|
(3
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayment of short-term borrowings
|
|
|
(311
|
)
|
|
|
|
(523
|
)
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
|
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
|
4,314
|
|
1.31
|
|
5,649
|
|
|
11,436
|
|
1.29
|
|
14,726
|
|
Repayment of US commercial paper
|
(4,512
|
)
|
1.31
|
|
(5,904
|
)
|
|
(11,232
|
)
|
1.29
|
|
(14,474
|
)
|
Net (repayment of) proceeds received from US commercial paper
|
|
|
|
|
(255
|
)
|
|
|
|
|
|
252
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
225
|
|
||||
Repayment of accounts receivable securitization
|
|
|
—
|
|
|
|
|
(225
|
)
|
||||
Net proceeds received from accounts receivable securitization
|
|
|
—
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Net (repayment of) proceeds received on short-term borrowings
|
|
|
(255
|
)
|
|
|
|
252
|
|
Rogers Communications Inc.
|
18
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
As at
September 30 |
|
As at
December 31
|
|
(In millions of dollars)
|
2019
|
|
2018
|
|
|
|
|
||
Trade accounts receivable sold to buyer as security
|
1,263
|
|
1,391
|
|
Short-term borrowings from buyer
|
(650
|
)
|
(650
|
)
|
|
|
|
||
Overcollateralization
|
613
|
|
741
|
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
US commercial paper program, beginning of period
|
1,023
|
|
1.31
|
|
1,339
|
|
|
1,178
|
|
1.36
|
|
1,605
|
|
Net repayment of US commercial paper
|
(233
|
)
|
1.33
|
|
(311
|
)
|
|
(400
|
)
|
1.30
|
|
(520
|
)
|
Discounts on issuance 1
|
9
|
|
1.11
|
|
10
|
|
|
21
|
|
1.33
|
|
28
|
|
Loss (gain) on foreign exchange 1
|
|
|
20
|
|
|
|
|
(55
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program, end of period
|
799
|
|
1.32
|
|
1,058
|
|
|
799
|
|
1.32
|
|
1,058
|
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
US commercial paper program, beginning of period
|
1,159
|
|
1.32
|
|
1,526
|
|
|
746
|
|
1.25
|
|
935
|
|
Net (repayment of) proceeds received from US commercial paper
|
(198
|
)
|
1.29
|
|
(255
|
)
|
|
204
|
|
1.24
|
|
252
|
|
Discounts on issuance 1
|
7
|
|
1.29
|
|
9
|
|
|
18
|
|
1.33
|
|
24
|
|
(Gain) loss on foreign exchange 1
|
|
|
(27
|
)
|
|
|
|
42
|
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program, end of period
|
968
|
|
1.29
|
|
1,253
|
|
|
968
|
|
1.29
|
|
1,253
|
|
Rogers Communications Inc.
|
19
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
|
Principal
amount
|
|
Interest
rate
|
|
As at
September 30 |
|
As at
December 31
|
|
(In millions of dollars, except interest rates)
|
Due date
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
|
||||
Senior notes
|
2019
|
|
400
|
|
2.800
|
%
|
—
|
|
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
|
%
|
662
|
|
682
|
|
Senior notes
|
2023
|
US
|
850
|
|
4.100
|
%
|
1,126
|
|
1,160
|
|
Senior notes
|
2024
|
|
600
|
|
4.000
|
%
|
600
|
|
600
|
|
Senior notes
|
2025
|
US
|
700
|
|
3.625
|
%
|
927
|
|
955
|
|
Senior notes
|
2026
|
US
|
500
|
|
2.900
|
%
|
662
|
|
682
|
|
Senior notes
|
2029
|
|
1,000
|
|
3.250
|
%
|
1,000
|
|
—
|
|
Senior debentures 1
|
2032
|
US
|
200
|
|
8.750
|
%
|
265
|
|
273
|
|
Senior notes
|
2038
|
US
|
350
|
|
7.500
|
%
|
464
|
|
478
|
|
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
|
%
|
662
|
|
682
|
|
Senior notes
|
2043
|
US
|
650
|
|
5.450
|
%
|
861
|
|
887
|
|
Senior notes
|
2044
|
US
|
1,050
|
|
5.000
|
%
|
1,390
|
|
1,433
|
|
Senior notes
|
2048
|
US
|
750
|
|
4.300
|
%
|
993
|
|
1,022
|
|
Senior notes
|
2049
|
US
|
1,250
|
|
4.350
|
%
|
1,655
|
|
—
|
|
|
|
|
|
|
16,417
|
|
14,404
|
|
||
Deferred transaction costs and discounts
|
|
|
|
|
(138
|
)
|
(114
|
)
|
||
Less current portion
|
|
|
|
|
(1,400
|
)
|
(900
|
)
|
||
|
|
|
|
|
|
|
||||
Total long-term debt
|
|
|
|
|
14,879
|
|
13,390
|
|
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 September 30, 2019 and December 31, 2018.
|
Rogers Communications Inc.
|
20
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended September 30, 2019
|
|
|
|
Nine months ended September 30, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Senior note issuances (Cdn$)
|
|
|
—
|
|
|
|
|
1,000
|
|
||||
Senior note issuances (US$)
|
—
|
|
—
|
|
—
|
|
|
1,250
|
|
1.34
|
|
1,676
|
|
Total issuance of senior notes
|
|
|
—
|
|
|
|
|
2,676
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(400
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance of senior notes
|
|
|
—
|
|
|
|
|
2,276
|
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance of long-term debt
|
|
|
—
|
|
|
|
|
2,276
|
|
|
|
Three months ended September 30, 2018
|
|
|
|
Nine months ended September 30, 2018
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit facility borrowings (US$)
|
—
|
|
—
|
|
—
|
|
|
125
|
|
1.26
|
|
157
|
|
Credit facility repayments (US$)
|
—
|
|
—
|
|
—
|
|
|
(125
|
)
|
1.26
|
|
(157
|
)
|
Net borrowings under credit facilities
|
|
|
—
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note issuances (US$)
|
—
|
|
—
|
|
—
|
|
|
750
|
|
1.25
|
|
938
|
|
Senior note repayments (US$)
|
—
|
|
—
|
|
—
|
|
|
(1,400
|
)
|
1.26
|
|
(1,761
|
)
|
Net repayment of senior notes
|
|
|
—
|
|
|
|
|
(823
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net repayment of long-term debt
|
|
|
—
|
|
|
|
|
(823
|
)
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Long-term debt net of transaction costs, beginning of period
|
16,163
|
|
14,000
|
|
|
14,290
|
|
14,448
|
|
Net issuance (repayment) of long-term debt
|
—
|
|
—
|
|
|
2,276
|
|
(823
|
)
|
Loss (gain) on foreign exchange
|
113
|
|
(135
|
)
|
|
(263
|
)
|
250
|
|
Deferred transaction costs incurred
|
—
|
|
(2
|
)
|
|
(33
|
)
|
(18
|
)
|
Amortization of deferred transaction costs
|
3
|
|
2
|
|
|
9
|
|
8
|
|
|
|
|
|
|
|
||||
Long-term debt net of transaction costs, end of period
|
16,279
|
|
13,865
|
|
|
16,279
|
|
13,865
|
|
Rogers Communications Inc.
|
21
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended September 30, 2019
|
|
|
Nine months ended September 30, 2019
|
|
||||
(In millions of dollars)
Maturity date
|
Notional
amount (US$) |
|
Notional
amount (Cdn$) |
|
|
Notional
amount (US$) |
|
Notional
amount (Cdn$) |
|
|
|
|
|
|
|
||||
March 2019
|
—
|
|
—
|
|
|
—
|
|
400
|
|
|
Three months ended September 30, 2018
|
|
|
Nine months ended September 30, 2018
|
|
||||
(In millions of dollars)
Maturity date |
Notional
amount (US$) |
|
Notional
amount (Cdn$) |
|
|
Notional
amount (US$) |
|
Notional
amount (Cdn$) |
|
|
|
|
|
|
|
||||
August 2018, repaid April 2018
|
—
|
|
—
|
|
|
1,400
|
|
1,761
|
|
•
|
the contract involves the use of an identified asset;
|
•
|
we have the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use; and
|
•
|
we have the right to direct the use of the asset.
|
•
|
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.
|
•
|
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.
|
22
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
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.
|
Rogers Communications Inc.
|
23
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
(In millions of dollars)
|
2019
|
|
|
2019
|
|
|
|
|
|
||
Lease liabilities, beginning of period
|
1,608
|
|
|
1,545
|
|
Net additions
|
89
|
|
|
223
|
|
Interest on lease liabilities
|
15
|
|
|
44
|
|
Interest payments on lease liabilities
|
(13
|
)
|
|
(34
|
)
|
Principal payments of lease liabilities
|
(45
|
)
|
|
(124
|
)
|
|
|
|
|
||
Lease liabilities, end of period
|
1,654
|
|
|
1,654
|
|
Date declared
|
Date paid
|
Dividend per share (dollars)
|
|
|
|
|
|
January 24, 2019
|
April 1, 2019
|
0.50
|
|
April 17, 2019
|
July 2, 2019
|
0.50
|
|
June 5, 2019
|
October 1, 2019
|
0.50
|
|
|
|
|
|
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
|
|
Rogers Communications Inc.
|
24
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Stock options
|
(6
|
)
|
8
|
|
|
(1
|
)
|
9
|
|
Restricted share units
|
8
|
|
16
|
|
|
35
|
|
33
|
|
Deferred share units
|
(7
|
)
|
11
|
|
|
2
|
|
19
|
|
Equity derivative effect, net of interest receipt
|
23
|
|
(23
|
)
|
|
15
|
|
(13
|
)
|
|
|
|
|
|
|
||||
Total stock-based compensation expense
|
18
|
|
12
|
|
|
51
|
|
48
|
|
|
Three months ended September 30, 2019
|
|
Nine months ended September 30, 2019
|
||||
(In number of units, except prices)
|
Number of options
|
|
Weighted average
exercise price
|
|
Number of options
|
|
Weighted average
exercise price |
|
|
|
|
|
|
||
Outstanding, beginning of period
|
3,072,767
|
|
$61.43
|
|
2,719,612
|
|
$53.22
|
Granted
|
91,310
|
|
$65.43
|
|
1,131,480
|
|
$72.39
|
Exercised
|
(32,295
|
)
|
$45.63
|
|
(719,310
|
)
|
$46.37
|
|
|
|
|
|
|
||
Outstanding, end of period
|
3,131,782
|
|
$61.71
|
|
3,131,782
|
|
$61.71
|
|
|
|
|
|
|
||
Exercisable, end of period
|
1,018,312
|
|
$52.37
|
|
1,018,312
|
|
$52.37
|
Rogers Communications Inc.
|
25
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended September 30, 2018
|
|
Nine months ended September 30, 2018
|
||||
(In number of units, except prices)
|
Number of options
|
|
Weighted average
exercise price |
|
Number of options
|
|
Weighted average
exercise price |
|
|
|
|
|
|
||
Outstanding, beginning of period
|
2,915,904
|
|
$52.82
|
|
2,637,890
|
|
$49.42
|
Granted
|
37,715
|
|
$68.10
|
|
850,700
|
|
$58.88
|
Exercised
|
(29,125
|
)
|
$46.38
|
|
(564,096
|
)
|
$44.69
|
Forfeited
|
(73,080
|
)
|
$55.53
|
|
(73,080
|
)
|
$55.53
|
|
|
|
|
|
|
|
|
Outstanding, end of period
|
2,851,414
|
|
$53.02
|
|
2,851,414
|
|
$53.02
|
|
|
|
|
|
|
|
|
Exercisable, end of period
|
1,175,200
|
|
$46.40
|
|
1,175,200
|
|
$46.40
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In number of units)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Outstanding, beginning of period
|
2,400,049
|
|
2,242,858
|
|
|
2,218,925
|
|
1,811,845
|
|
Granted and reinvested dividends
|
163,850
|
|
207,482
|
|
|
942,049
|
|
1,186,553
|
|
Exercised
|
(21,069
|
)
|
(98,603
|
)
|
|
(541,551
|
)
|
(562,750
|
)
|
Forfeited
|
(44,481
|
)
|
(79,454
|
)
|
|
(121,074
|
)
|
(163,365
|
)
|
|
|
|
|
|
|
||||
Outstanding, end of period
|
2,498,349
|
|
2,272,283
|
|
|
2,498,349
|
|
2,272,283
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In number of units)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Outstanding, beginning of period
|
1,867,775
|
|
2,177,066
|
|
|
2,004,440
|
|
2,327,647
|
|
Granted and reinvested dividends
|
34,193
|
|
21,221
|
|
|
93,637
|
|
113,973
|
|
Exercised
|
(103,711
|
)
|
(85,661
|
)
|
|
(288,058
|
)
|
(287,751
|
)
|
Forfeited
|
(1,557
|
)
|
(61,527
|
)
|
|
(13,319
|
)
|
(102,770
|
)
|
|
|
|
|
|
|
||||
Outstanding, end of period
|
1,796,700
|
|
2,051,099
|
|
|
1,796,700
|
|
2,051,099
|
|
Rogers Communications Inc.
|
26
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
the non-executive chairman emeritus of Cassels Brock and Blackwell LLP, a law firm that provides legal services to the Company; and
|
•
|
the chair of the board of Transcontinental Inc., a company that provides printing services to the Company.
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Printing and legal services 1
|
1
|
|
4
|
|
|
5
|
|
9
|
|
1
|
The amount paid for legal services is nominal.
|
Rogers Communications Inc.
|
27
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended September 30
|
|
|
Nine months ended
September 30 |
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
71
|
|
(12
|
)
|
|
42
|
|
35
|
|
Inventories
|
66
|
|
7
|
|
|
73
|
|
52
|
|
Other current assets
|
(25
|
)
|
13
|
|
|
(68
|
)
|
(40
|
)
|
Accounts payable and accrued liabilities
|
(119
|
)
|
148
|
|
|
(252
|
)
|
(32
|
)
|
Contract and other liabilities
|
(50
|
)
|
(79
|
)
|
|
(74
|
)
|
(87
|
)
|
|
|
|
|
|
|
||||
Total change in non-cash operating working capital items
|
(57
|
)
|
77
|
|
|
(279
|
)
|
(72
|
)
|
Rogers Communications Inc.
|
28
|
Third Quarter 2019
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended September 30
|
|
|
Nine months ended
September 30 |
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Capital expenditures before proceeds on disposition
|
660
|
|
705
|
|
|
2,050
|
|
1,982
|
|
Proceeds on disposition
|
(3
|
)
|
(5
|
)
|
|
(34
|
)
|
(20
|
)
|
|
|
|
|
|
|
||||
Capital expenditures
|
657
|
|
700
|
|
|
2,016
|
|
1,962
|
|
Rogers Communications Inc.
|
29
|
Third Quarter 2019
|
|
Exhibit 99.3
|
•
|
Accelerated adoption of Rogers Infinite™ unlimited data plans
|
•
|
Attracted approximately 1 million wireless subscribers to Rogers Infinite™ unlimited data plans
|
•
|
Customers adopting these "no more overage" plans at three times the pace anticipated
|
•
|
Increased average data usage by over 50% for Rogers Infinite™ customers
|
•
|
Added 103,000 postpaid nets
|
•
|
Grew Wireless adjusted EBITDA by 4%, revenue in line with 2018
|
•
|
Delivered strong Cable results led by Internet growth and adoption of Ignite TV
|
•
|
Continued strong Internet revenue growth of 7%
|
•
|
Added 41,000 Internet nets, reflecting continued growth in Internet penetration
|
•
|
Increased Ignite TV subscriber base by over 40% sequentially
|
•
|
Grew adjusted EBITDA by 2%, revenue up 1%
|
•
|
Increased consolidated adjusted EBITDA by 6%, total revenue in line with 2018
|
•
|
Repurchased 4.3 million Class B Non-Voting shares for $298 million this year
|
•
|
Returned $1,058 million this year to shareholders through dividends and share repurchases, up $317 million or 43%
|
•
|
Updated 2019 financial outlook to reflect accelerated adoption of Rogers Infinite™ plans: total revenue decrease of 1% to increase of 1%, adjusted EBITDA growth of 3% to 5%, capital expenditures from $2,750 million to $2,850 million, and free cash flow increase of $100 million to $200 million
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||||||
(In millions of Canadian dollars, except per share amounts, unaudited)
|
2019
|
|
2018 1
|
|
% Chg
|
|
|
2019
|
|
2018 1
|
|
% Chg
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
3,754
|
|
3,769
|
|
—
|
|
|
11,121
|
|
11,158
|
|
—
|
|
||||
Total service revenue 2
|
3,233
|
|
3,271
|
|
(1
|
)
|
|
9,721
|
|
9,698
|
|
—
|
|
||||
Adjusted EBITDA 3
|
1,712
|
|
1,620
|
|
6
|
|
|
4,682
|
|
4,462
|
|
5
|
|
||||
Net income
|
593
|
|
594
|
|
—
|
|
|
1,575
|
|
1,557
|
|
1
|
|
||||
Adjusted net income 3
|
622
|
|
625
|
|
—
|
|
|
1,624
|
|
1,656
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
|
$1.14
|
|
|
$1.15
|
|
(1
|
)
|
|
|
$3.05
|
|
|
$3.01
|
|
1
|
|
Adjusted diluted earnings per share 3
|
|
$1.19
|
|
|
$1.21
|
|
(2
|
)
|
|
|
$3.15
|
|
|
$3.21
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
—
|
|
|
3,360
|
|
3,237
|
|
4
|
|
||||
Free cash flow 3,4
|
767
|
|
627
|
|
22
|
|
|
1,781
|
|
1,663
|
|
7
|
|
1
|
Effective January 1, 2019, we adopted IFRS 16, Leases (IFRS 16), with the ongoing impacts of this standard included in our results prospectively from that date. Our 2018 results have not been restated. See "Critical Accounting Policies and Estimates".
|
2
|
As defined. See "Key Performance Indicators".
|
3
|
As defined. See "Non-GAAP Measures". These measures should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies.
|
4
|
Effective January 1, 2019, we have redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We have redefined free cash flow to simplify this measure and believe removing it will make us more comparable within our industry.
|
Rogers Communications Inc.
|
1
|
Third Quarter 2019
|
Rogers Communications Inc.
|
2
|
Third Quarter 2019
|
|
2018
|
|
2019 Original
|
2019 Revised
|
||||||||||
(In millions of dollars, except percentages)
|
Actual
|
|
Guidance Ranges 1
|
Guidance Ranges 1,2,3
|
||||||||||
|
|
|
|
|||||||||||
Consolidated Guidance
|
|
|
|
|||||||||||
Revenue
|
15,096
|
|
Increase of 3%
|
|
to
|
5%
|
Decrease of 1%
|
|
to
|
increase of 1%
|
||||
Adjusted EBITDA 4
|
5,983
|
|
Increase of 7%
|
|
to
|
9%
|
Increase of 3%
|
|
to
|
5%
|
||||
Capital expenditures 5
|
2,790
|
|
2,850
|
|
to
|
3,050
|
2,750
|
|
to
|
2,850
|
||||
Free cash flow 4,6
|
2,134
|
|
Increase of 200
|
|
to
|
300
|
Increase of 100
|
|
to
|
200
|
1
|
Guidance ranges presented as percentages reflect percentage increases over full-year 2018 results. 2019 amounts, most notably adjusted EBITDA and free cash flow, for purposes of assessing our performance against guidance have been calculated in accordance with accounting policies after adopting IFRS 16 on January 1, 2019. The ongoing impacts are addressed in our results prospectively from that date. Had we adopted IFRS 16 on a retrospective basis, 2018 adjusted EBITDA and free cash flow would each have been $174 million higher. See "Critical Accounting Policies and Estimates" for more information.
|
2
|
The revised guidance ranges above assume lower Wireless overage revenue as a result of the faster-than-expected adoption of our new Rogers Infinite™ unlimited data plans.
|
3
|
The revised guidance ranges above assume the proceedings related to the CRTC's order on the rates we can charge to resellers of high-speed Internet access services, including our third-party Internet access (TPIA) service, do not have an impact on our results this year. See "Regulatory Developments" and "Updates to Risks and Uncertainties" for more information.
|
4
|
Adjusted EBITDA and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
5
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
|
6
|
Effective January 1, 2019, we have redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We have redefined free cash flow to simplify this measure and believe removing it will make us more comparable within our industry. Free cash flow presented above reflects this change.
|
•
|
Approximately 1 million subscribers, or triple the number we had expected at this time, are currently benefitting from our Rogers Infinite™ unlimited data plans.
|
•
|
Approximately 60% of our existing customers that have migrated to these plans have upgraded to higher price plans, whereas about 40% of our customers have downgraded.
|
•
|
These migrated customers are, on average, using over 50% more data than they had previously used.
|
•
|
Overall, data overage fees represented approximately 5% of Wireless service revenue annually.
|
•
|
Compared to the third quarter of 2018, our overage revenue decreased by approximately $50 million this quarter due to the strong adoption of our unlimited data plans.
|
•
|
By this time next year, we expect approximately 80% of our overage revenue will have been eliminated and it will then represent only 1% of our Wireless service revenue.
|
•
|
Wireless blended ARPU declined 2% this quarter, primarily as a result of the decrease in overage revenue.
|
•
|
Excluding the short-term impacts of this decline in overage revenue, blended ARPU this quarter would have been stable relative to 2018.
|
•
|
Excluding the decline in overage revenue, blended ARPU growth for our Rogers Infinite™ subscriber base would have been approximately 1% to 2%.
|
•
|
Overage revenue declines and related blended ARPU impacts are expected to occur over the next four to five quarters compared to an initial expectation of six to eight quarters.
|
•
|
By the second half of 2020, we anticipate a return to overall blended ARPU growth.
|
Rogers Communications Inc.
|
3
|
Third Quarter 2019
|
•
|
Customers on Rogers Infinite™ plans have an almost 30% higher “likelihood to recommend” score compared to customers on our other plans.
|
•
|
Calls related to billing and overages, our top call drivers, are down 50% for Rogers Infinite™ customers.
|
•
|
Online hardware upgrades for customers migrating to Rogers Infinite™ plans has increased by 30% per month since launch.
|
•
|
Announced a new customer solutions centre in Kelowna, BC, adding 350 new customer solutions specialists to serve our customers.
|
•
|
Announced Pro On-the-Go™, a new, personalized retail service that delivers and sets up new wireless devices to the customer's location of choice.
|
•
|
Launched Fido Data Overage Protection, which pauses data when a customer's limit is reached so they can enjoy their services worry-free.
|
•
|
Grew customer digital adoption and reduced call volume by over one million calls.
|
•
|
Awarded "Best in Test" for overall wireless customer experience nationally by P3, the international leader in benchmarking mobile networks, based on measurement testing conducted between May 6 and July 15, 2019.
|
•
|
Launched the Ignite Wi-Fi Hub app and introduced Wall-to-Wall Wi-Fi pods to manage home Wi-Fi networks and enhance Wi-Fi connectivity in homes.
|
•
|
Announced a reciprocal roaming arrangement with AT&T to extend LTE-M coverage for IoT customers throughout Canada and the United States.
|
•
|
Launched Ignite TV in New Brunswick and grew our subscriber base across our Cable footprint by over 40% sequentially.
|
•
|
Launched Sportsnet NOW on Ignite TV, with Amazon Prime launching by year-end.
|
•
|
Broke records with the most-watched Rogers Cup in Sportsnet history, including the most-watched women's final, reaching 1.4 million Canadians on Sportsnet.
|
•
|
Grew adjusted EBITDA by 6%.
|
•
|
Attracted 103,000 net new wireless postpaid subscribers and 41,000 net new Internet subscribers.
|
•
|
Returned over $300 million to shareholders through dividend payments and share repurchases.
|
•
|
Recognized, in July 2019, as one of the 50 Most Engaged Workplaces in North America by Achievers for our leadership and innovation in engaging our employees and workplaces.
|
•
|
Awarded the 2019 Brandon Hall Group Excellence in Learning Awards for Best Customer Training Program in August 2019.
|
•
|
Supported Pride parades across Canada with 1,000 team members participating.
|
•
|
Supported 1,000 Ted Rogers Scholarship Fund recipients, including those enrolled in post-secondary education institutions in the 2019-2020 academic year.
|
•
|
Increased download speeds for our Connected for Success and Connected Families participants to 25 Mbps.
|
•
|
Deployed a cooling optimization program across our network head-ends and data centres, which reduced annual electricity use by 2 gigawatt-hours.
|
Rogers Communications Inc.
|
4
|
Third Quarter 2019
|
•
|
October 23, 2019
|
•
|
8:00 a.m. Eastern Time
|
•
|
webcast available at investors.rogers.com
|
•
|
media are welcome to participate on a listen-only basis
|
Rogers Communications Inc.
|
5
|
Third Quarter 2019
|
Rogers Communications Inc.
|
6
|
Third Quarter 2019
|
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 business, 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, and digital media.
|
Rogers Communications Inc.
|
7
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||||||
(In millions of dollars, except margins and per share amounts)
|
2019
|
|
2018 1
|
|
% Chg
|
|
|
2019
|
|
2018 1
|
|
% Chg
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||||
Wireless
|
2,324
|
|
2,331
|
|
—
|
|
|
6,757
|
|
6,736
|
|
—
|
|
||||
Cable
|
994
|
|
983
|
|
1
|
|
|
2,967
|
|
2,943
|
|
1
|
|
||||
Media
|
483
|
|
488
|
|
(1
|
)
|
|
1,542
|
|
1,628
|
|
(5
|
)
|
||||
Corporate items and intercompany eliminations
|
(47
|
)
|
(33
|
)
|
42
|
|
|
(145
|
)
|
(149
|
)
|
(3
|
)
|
||||
Revenue
|
3,754
|
|
3,769
|
|
—
|
|
|
11,121
|
|
11,158
|
|
—
|
|
||||
Total service revenue 2
|
3,233
|
|
3,271
|
|
(1
|
)
|
|
9,721
|
|
9,698
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA 3
|
|
|
|
|
|
|
|
||||||||||
Wireless
|
1,138
|
|
1,099
|
|
4
|
|
|
3,281
|
|
3,062
|
|
7
|
|
||||
Cable
|
499
|
|
490
|
|
2
|
|
|
1,422
|
|
1,385
|
|
3
|
|
||||
Media
|
130
|
|
73
|
|
78
|
|
|
118
|
|
156
|
|
(24
|
)
|
||||
Corporate items and intercompany eliminations
|
(55
|
)
|
(42
|
)
|
31
|
|
|
(139
|
)
|
(141
|
)
|
(1
|
)
|
||||
Adjusted EBITDA
|
1,712
|
|
1,620
|
|
6
|
|
|
4,682
|
|
4,462
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA margin 3
|
45.6
|
%
|
43.0
|
%
|
2.6
|
pts
|
|
42.1
|
%
|
40.0
|
%
|
2.1
|
pts
|
||||
|
|
|
|
|
|
|
|
||||||||||
Net income
|
593
|
|
594
|
|
—
|
|
|
1,575
|
|
1,557
|
|
1
|
|
||||
Basic earnings per share
|
|
$1.16
|
|
|
$1.15
|
|
1
|
|
|
|
$3.07
|
|
|
$3.02
|
|
2
|
|
Diluted earnings per share
|
|
$1.14
|
|
|
$1.15
|
|
(1
|
)
|
|
|
$3.05
|
|
|
$3.01
|
|
1
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income 3
|
622
|
|
625
|
|
—
|
|
|
1,624
|
|
1,656
|
|
(2
|
)
|
||||
Adjusted basic earnings per share 3
|
|
$1.22
|
|
|
$1.21
|
|
1
|
|
|
|
$3.17
|
|
|
$3.22
|
|
(2
|
)
|
Adjusted diluted earnings per share 3
|
|
$1.19
|
|
|
$1.21
|
|
(2
|
)
|
|
|
$3.15
|
|
|
$3.21
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
657
|
|
700
|
|
(6
|
)
|
|
2,016
|
|
1,962
|
|
3
|
|
||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
—
|
|
|
3,360
|
|
3,237
|
|
4
|
|
||||
Free cash flow 3,4
|
767
|
|
627
|
|
22
|
|
|
1,781
|
|
1,663
|
|
7
|
|
1
|
Effective January 1, 2019, we adopted IFRS 16, with the ongoing impacts of this standard included in our results prospectively from that date. Our 2018 results have not been restated for the effects of IFRS 16. See "Critical Accounting Policies and Estimates".
|
3
|
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information about these measures, including how we calculate them.
|
4
|
2018 free cash flow has been restated. See "Non-GAAP Measures" for more information.
|
Rogers Communications Inc.
|
8
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Service revenue
|
1,808
|
|
1,837
|
|
(2
|
)
|
|
5,368
|
|
5,285
|
|
2
|
|
Equipment revenue
|
516
|
|
494
|
|
4
|
|
|
1,389
|
|
1,451
|
|
(4
|
)
|
Revenue
|
2,324
|
|
2,331
|
|
—
|
|
|
6,757
|
|
6,736
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of equipment
|
530
|
|
520
|
|
2
|
|
|
1,498
|
|
1,569
|
|
(5
|
)
|
Other operating expenses
|
656
|
|
712
|
|
(8
|
)
|
|
1,978
|
|
2,105
|
|
(6
|
)
|
Operating expenses
|
1,186
|
|
1,232
|
|
(4
|
)
|
|
3,476
|
|
3,674
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
1,138
|
|
1,099
|
|
4
|
|
|
3,281
|
|
3,062
|
|
7
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
49.0
|
%
|
47.1
|
%
|
1.9
|
pts
|
|
48.6
|
%
|
45.5
|
%
|
3.1
|
pts
|
Capital expenditures
|
288
|
|
277
|
|
4
|
|
|
960
|
|
777
|
|
24
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||||
(In thousands, except churn, blended ABPU, and blended ARPU)
|
2019
|
|
2018
|
|
Chg
|
|
|
2019
|
|
2018
|
|
Chg
|
|
||
|
|
|
|
|
|
|
|
||||||||
Postpaid
|
|
|
|
|
|
|
|
||||||||
Gross additions
|
437
|
|
418
|
|
19
|
|
|
1,083
|
|
1,184
|
|
(101
|
)
|
||
Net additions
|
103
|
|
124
|
|
(21
|
)
|
|
203
|
|
341
|
|
(138
|
)
|
||
Total postpaid subscribers 2
|
9,360
|
|
9,045
|
|
315
|
|
|
9,360
|
|
9,045
|
|
315
|
|
||
Churn (monthly)
|
1.20
|
%
|
1.09
|
%
|
0.11
|
pts
|
|
1.06
|
%
|
1.06
|
%
|
—
|
|
||
Prepaid
|
|
|
|
|
|
|
|
||||||||
Gross additions
|
235
|
|
240
|
|
(5
|
)
|
|
605
|
|
594
|
|
11
|
|
||
Net additions (losses)
|
27
|
|
60
|
|
(33
|
)
|
|
(21
|
)
|
(13
|
)
|
(8
|
)
|
||
Total prepaid subscribers 2,3
|
1,478
|
|
1,765
|
|
(287
|
)
|
|
1,478
|
|
1,765
|
|
(287
|
)
|
||
Churn (monthly)
|
4.74
|
%
|
3.48
|
%
|
1.26
|
pts
|
|
4.62
|
%
|
3.90
|
%
|
0.72
|
pts
|
||
Blended ABPU (monthly)
|
|
$67.20
|
|
$66.20
|
|
$1.00
|
|
|
|
$66.25
|
|
$64.56
|
|
$1.69
|
|
Blended ARPU (monthly)
|
|
$56.01
|
|
$57.21
|
|
($1.20
|
)
|
|
|
$55.56
|
|
$55.50
|
|
$0.06
|
|
1
|
Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. See "Key Performance Indicators".
|
2
|
As at end of period.
|
3
|
Effective April 1, 2019, we adjusted our Wireless prepaid subscriber base to remove 127,000 subscribers as a result of a change to our deactivation policy from 180 days to 90 days to be more consistent within the industry.
|
•
|
a 2% decrease in blended ARPU this quarter, due to a decrease in overage revenue from the faster-than-expected adoption of our new Rogers Infinite™ unlimited data plans, and elevated competitive intensity in the marketplace; partially offset by
|
•
|
a larger postpaid subscriber base.
|
Rogers Communications Inc.
|
9
|
Third Quarter 2019
|
•
|
a shift in the product mix of device sales towards higher-value devices; and
|
•
|
higher postpaid gross additions; partially offset by
|
•
|
a decrease in device upgrades by existing subscribers.
|
•
|
the impact of the adoption of IFRS 16; and
|
•
|
various cost efficiencies.
|
Rogers Communications Inc.
|
10
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
|
||||||
Internet
|
570
|
|
534
|
|
7
|
|
|
1,684
|
|
1,578
|
|
7
|
|
Television
|
363
|
|
357
|
|
2
|
|
|
1,075
|
|
1,079
|
|
—
|
|
Phone
|
56
|
|
88
|
|
(36
|
)
|
|
197
|
|
277
|
|
(29
|
)
|
Service revenue
|
989
|
|
979
|
|
1
|
|
|
2,956
|
|
2,934
|
|
1
|
|
Equipment revenue
|
5
|
|
4
|
|
25
|
|
|
11
|
|
9
|
|
22
|
|
Revenue
|
994
|
|
983
|
|
1
|
|
|
2,967
|
|
2,943
|
|
1
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of equipment
|
7
|
|
6
|
|
17
|
|
|
18
|
|
15
|
|
20
|
|
Other operating expenses
|
488
|
|
487
|
|
—
|
|
|
1,527
|
|
1,543
|
|
(1
|
)
|
Operating expenses
|
495
|
|
493
|
|
—
|
|
|
1,545
|
|
1,558
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
499
|
|
490
|
|
2
|
|
|
1,422
|
|
1,385
|
|
3
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
50.2
|
%
|
49.8
|
%
|
0.4
|
pts
|
|
47.9
|
%
|
47.1
|
%
|
0.8
|
pts
|
Capital expenditures
|
290
|
|
358
|
|
(19
|
)
|
|
864
|
|
1,007
|
|
(14
|
)
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In thousands)
|
2019
|
|
2018
|
|
Chg
|
|
|
2019
|
|
2018
|
|
Chg
|
|
|
|
|
|
|
|
|
|
||||||
Internet
|
|
|
|
|
|
|
|
||||||
Net additions
|
41
|
|
35
|
|
6
|
|
|
77
|
|
84
|
|
(7
|
)
|
Total Internet subscribers 2
|
2,507
|
|
2,405
|
|
102
|
|
|
2,507
|
|
2,405
|
|
102
|
|
Television
|
|
|
|
|
|
|
|
||||||
Net losses
|
(35
|
)
|
(18
|
)
|
(17
|
)
|
|
(89
|
)
|
(39
|
)
|
(50
|
)
|
Total Television subscribers 2
|
1,596
|
|
1,701
|
|
(105
|
)
|
|
1,596
|
|
1,701
|
|
(105
|
)
|
Phone
|
|
|
|
|
|
|
|
||||||
Net (losses) additions
|
(13
|
)
|
—
|
|
(13
|
)
|
|
(33
|
)
|
12
|
|
(45
|
)
|
Total Phone subscribers 2
|
1,083
|
|
1,120
|
|
(37
|
)
|
|
1,083
|
|
1,120
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
||||||
Homes passed 2
|
4,434
|
|
4,354
|
|
80
|
|
|
4,434
|
|
4,354
|
|
80
|
|
Total service units 3
|
|
|
|
|
|
|
|
||||||
Net (losses) additions
|
(7
|
)
|
17
|
|
(24
|
)
|
|
(45
|
)
|
57
|
|
(102
|
)
|
Total service units 2
|
5,186
|
|
5,226
|
|
(40
|
)
|
|
5,186
|
|
5,226
|
|
(40
|
)
|
1
|
Subscriber counts are key performance indicators. See "Key Performance Indicators".
|
•
|
the impact of Internet and Television service pricing changes;
|
•
|
a larger Internet subscriber base; and
|
•
|
the movement of Television customers to higher content tiers; partially offset by
|
•
|
new bundled pricing constructs that provide a larger Phone discount; and
|
•
|
a lower subscriber base for our Television and Phone products.
|
Rogers Communications Inc.
|
11
|
Third Quarter 2019
|
•
|
the impact of Internet service pricing changes; and
|
•
|
a larger Internet subscriber base; partially offset by
|
•
|
promotional pricing provided to subscribers.
|
•
|
the impact of Television service pricing changes;
|
•
|
lower promotional pricing provided to subscribers;
|
•
|
the migration of subscribers from our legacy TV product to Ignite TV; and
|
•
|
the movement of customers to higher content tiers; partially offset by
|
•
|
the decline in Television subscribers.
|
•
|
new bundled pricing constructs that provide a larger Phone discount; and
|
•
|
the general decline in Phone subscribers over the past year.
|
Rogers Communications Inc.
|
12
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
483
|
|
488
|
|
(1
|
)
|
|
1,542
|
|
1,628
|
|
(5
|
)
|
Operating expenses
|
353
|
|
415
|
|
(15
|
)
|
|
1,424
|
|
1,472
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
130
|
|
73
|
|
78
|
|
|
118
|
|
156
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
26.9
|
%
|
15.0
|
%
|
11.9
|
pts
|
|
7.7
|
%
|
9.6
|
%
|
(1.9
|
pts)
|
Capital expenditures
|
17
|
|
18
|
|
(6
|
)
|
|
56
|
|
47
|
|
19
|
|
•
|
the sale of our publishing business in the second quarter; and
|
•
|
lower Toronto Blue Jays revenue; partially offset by
|
•
|
higher revenue generated by Today's Shopping Choice and Sportsnet.
|
•
|
lower Toronto Blue Jays player compensation, in part due to the salary timing impact of player trades in the first quarter of 2019; and
|
•
|
lower publishing-related costs due to the sale of the business; partially offset by
|
•
|
higher programming costs.
|
Rogers Communications Inc.
|
13
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except capital intensity)
|
2019
|
|
2018
|
|
% Chg
|
|
|
2019
|
|
2018
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures 1
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Wireless
|
288
|
|
277
|
|
4
|
|
|
960
|
|
777
|
|
24
|
|
Cable
|
290
|
|
358
|
|
(19
|
)
|
|
864
|
|
1,007
|
|
(14
|
)
|
Media
|
17
|
|
18
|
|
(6
|
)
|
|
56
|
|
47
|
|
19
|
|
Corporate
|
62
|
|
47
|
|
32
|
|
|
136
|
|
131
|
|
4
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures 1
|
657
|
|
700
|
|
(6
|
)
|
|
2,016
|
|
1,962
|
|
3
|
|
|
|
|
|
|
|
|
|
||||||
Capital intensity 2
|
17.5
|
%
|
18.6
|
%
|
(1.1
|
pts)
|
|
18.1
|
%
|
17.6
|
%
|
0.5
|
pts
|
1
|
Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
|
2
|
As defined. See "Key Performance Indicators".
|
Rogers Communications Inc.
|
14
|
Third Quarter 2019
|
•
|
any licensee that holds 75 MHz of existing spectrum or more will be eligible to apply for 60 MHz;
|
•
|
any licensee that holds 50 MHz of existing spectrum will be eligible to apply for 50 MHz; and
|
•
|
all other licensees will be eligible to apply for 20 MHz.
|
Rogers Communications Inc.
|
15
|
Third Quarter 2019
|
Rogers Communications Inc.
|
16
|
Third Quarter 2019
|
Rogers Communications Inc.
|
17
|
Third Quarter 2019
|
•
|
applied a single discount rate to a portfolio of leases with similar characteristics;
|
•
|
excluded initial direct costs from measuring the right-of-use asset as at January 1, 2019;
|
•
|
used hindsight in determining the lease term where the contract contains purchase, extension, or termination options; and
|
•
|
relied upon our assessment of whether leases are onerous under the requirements of IAS 37, Provisions, contingent liabilities and contingent assets as at December 31, 2018 as an alternative to reviewing our right-of-use assets for impairment.
|
(in millions of dollars)
|
Reference
|
As reported as at
December 31, 2018
|
|
Effect of IFRS 16 transition
|
|
Subsequent to transition as at
January 1, 2019
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Other current assets
|
|
436
|
|
(23
|
)
|
413
|
|
Remainder of current assets
|
|
4,452
|
|
—
|
|
4,452
|
|
Total current assets
|
|
4,888
|
|
(23
|
)
|
4,865
|
|
|
|
|
|
|
|||
Property, plant and equipment
|
i
|
11,780
|
|
1,481
|
|
13,261
|
|
Remainder of long-term assets
|
|
15,250
|
|
—
|
|
15,250
|
|
|
|
|
|
|
|||
Total assets
|
|
31,918
|
|
1,458
|
|
33,376
|
|
|
|
|
|
|
|||
Liabilities and shareholders' equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable and accrued liabilities
|
|
3,052
|
|
(55
|
)
|
2,997
|
|
Current portion of lease liabilities
|
i
|
—
|
|
190
|
|
190
|
|
Remainder of current liabilities
|
|
3,784
|
|
—
|
|
3,784
|
|
Total current liabilities
|
|
6,836
|
|
135
|
|
6,971
|
|
|
|
|
|
|
|||
Lease liabilities
|
i
|
—
|
|
1,355
|
|
1,355
|
|
Deferred tax liabilities
|
|
2,910
|
|
(9
|
)
|
2,901
|
|
Remainder of long-term liabilities
|
|
13,993
|
|
—
|
|
13,993
|
|
Total liabilities
|
|
23,739
|
|
1,481
|
|
25,220
|
|
|
|
|
|
|
|||
Shareholders' equity
|
|
8,179
|
|
(23
|
)
|
8,156
|
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
|
31,918
|
|
1,458
|
|
33,376
|
|
Rogers Communications Inc.
|
18
|
Third Quarter 2019
|
•
|
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.
|
•
|
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.
|
•
|
subscriber counts;
|
•
|
Wireless;
|
•
|
Cable; and
|
•
|
homes passed (Cable);
|
•
|
subscriber churn (churn);
|
•
|
blended average billings per user (ABPU);
|
•
|
blended average revenue per user (ARPU);
|
•
|
capital intensity; and
|
•
|
total service revenue.
|
Rogers Communications Inc.
|
19
|
Third Quarter 2019
|
Non-GAAP measure |
Why we use it |
How we calculate it |
Most
comparable IFRS financial measure |
||
Adjusted EBITDA
Adjusted EBITDA margin |
●
|
|
To evaluate the performance of our businesses, and when making decisions about the ongoing operations of the business and our ability to generate cash flows.
|
Adjusted EBITDA:
Net income add (deduct) income tax expense (recovery); finance costs; depreciation and amortization; other expense (income); restructuring, acquisition and other; and loss (gain) on disposition of property, plant and equipment. Adjusted EBITDA margin: Adjusted EBITDA divided by revenue. |
Net income
|
●
|
|
We believe that certain investors and analysts use adjusted EBITDA to measure our ability to service debt and to meet other payment obligations.
|
|||
●
|
|
We also use it as one component in determining short-term incentive compensation for all management employees.
|
|||
Adjusted net
income Adjusted basic and diluted earnings per share |
●
|
|
To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.
|
Adjusted net income:
Net income add (deduct) restructuring, acquisition and other; loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; loss on bond forward derivatives; and income tax adjustments on these items, including adjustments as a result of legislative changes. Adjusted basic and diluted earnings per share: Adjusted net income and adjusted net income including the dilutive effect of stock-based compensation divided by basic and diluted weighted average shares outstanding. |
Net income
Basic and diluted earnings per share |
Free cash flow 1
|
●
|
|
To show how much cash we have available to repay debt and reinvest in our company, which is an important indicator of our financial strength and performance.
|
Adjusted EBITDA
deduct capital expenditures; interest on borrowings net of capitalized interest; and cash income taxes. |
Cash provided
by operating activities |
●
|
|
We believe that some investors and analysts use free cash flow to value a business and its underlying assets.
|
|||
Adjusted net
debt |
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Total long-term debt
add (deduct) current portion of long-term debt; deferred transaction costs and discounts; net debt derivative (assets) liabilities; credit risk adjustment related to net debt derivatives; current portion of lease liabilities; lease liabilities; bank advances (cash and cash equivalents); and short-term borrowings. |
Long-term
debt |
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
|||
Debt leverage ratio
|
●
|
|
To conduct valuation-related analysis and make decisions about capital structure.
|
Adjusted net debt (defined above)
divided by 12-month trailing adjusted EBITDA (defined above). |
Long-term debt
divided by net income |
●
|
|
We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
|
1
|
Effective January 1, 2019, we redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We redefined free cash flow to simplify this measure and we believe removing it will make us more comparable within our industry.
|
Rogers Communications Inc.
|
20
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Net income
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
Add:
|
|
|
|
|
|
||||
Income tax expense
|
219
|
|
235
|
|
|
544
|
|
576
|
|
Finance costs
|
215
|
|
176
|
|
|
610
|
|
588
|
|
Depreciation and amortization
|
627
|
|
558
|
|
|
1,850
|
|
1,647
|
|
|
|
|
|
|
|
||||
EBITDA
|
1,654
|
|
1,563
|
|
|
4,579
|
|
4,368
|
|
Add (deduct):
|
|
|
|
|
|
||||
Other expense (income)
|
16
|
|
15
|
|
|
2
|
|
(6
|
)
|
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,712
|
|
1,620
|
|
|
4,682
|
|
4,462
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars, except margins)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA
|
1,712
|
|
1,620
|
|
|
4,682
|
|
4,462
|
|
Divided by: total revenue
|
3,754
|
|
3,769
|
|
|
11,121
|
|
11,158
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA margin
|
45.6
|
%
|
43.0
|
%
|
|
42.1
|
%
|
40.0
|
%
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
(In millions of dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Net income
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
Add (deduct):
|
|
|
|
|
|
||||
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
Loss on repayment of long-term debt
|
—
|
|
—
|
|
|
—
|
|
28
|
|
Income tax impact of above items
|
(13
|
)
|
(11
|
)
|
|
(29
|
)
|
(29
|
)
|
Income tax adjustment, legislative tax change
|
—
|
|
—
|
|
|
(23
|
)
|
—
|
|
|
|
|
|
|
|
||||
Adjusted net income
|
622
|
|
625
|
|
|
1,624
|
|
1,656
|
|
Rogers Communications Inc.
|
21
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||||||
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share:
|
|
|
|
|
|
||||||||
Adjusted net income
|
622
|
|
625
|
|
|
1,624
|
|
1,656
|
|
||||
Divided by:
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding
|
511
|
|
515
|
|
|
513
|
|
515
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted basic earnings per share
|
|
$1.22
|
|
|
$1.21
|
|
|
|
$3.17
|
|
|
$3.22
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share:
|
|
|
|
|
|
||||||||
Diluted adjusted net income
|
613
|
|
625
|
|
|
1,618
|
|
1,654
|
|
||||
Divided by:
|
|
|
|
|
|
||||||||
Diluted weighted average number of shares outstanding
|
513
|
|
516
|
|
|
514
|
|
516
|
|
||||
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share
|
|
$1.19
|
|
|
$1.21
|
|
|
|
$3.15
|
|
|
$3.21
|
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
(In millions of dollars)
|
|
(restated) 1
|
|
|
|
(restated) 1
|
|
||
|
|
|
|
|
|
||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
|
3,360
|
|
3,237
|
|
Add (deduct):
|
|
|
|
|
|
||||
Capital expenditures
|
(657
|
)
|
(700
|
)
|
|
(2,016
|
)
|
(1,962
|
)
|
Interest on borrowings, net of capitalized interest
|
(189
|
)
|
(168
|
)
|
|
(540
|
)
|
(521
|
)
|
Interest paid
|
222
|
|
192
|
|
|
581
|
|
575
|
|
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Program rights amortization
|
(17
|
)
|
(9
|
)
|
|
(58
|
)
|
(39
|
)
|
Net change in contract asset balances
|
26
|
|
74
|
|
|
55
|
|
168
|
|
Change in non-cash operating working capital items
|
57
|
|
(77
|
)
|
|
279
|
|
72
|
|
Other adjustments
|
(22
|
)
|
(36
|
)
|
|
19
|
|
17
|
|
|
|
|
|
|
|
||||
Free cash flow
|
767
|
|
627
|
|
|
1,781
|
|
1,663
|
|
1
|
Effective January 1, 2019, we have redefined free cash flow such that we no longer adjust for the "net change in contract asset and deferred commission cost asset balances". We have redefined free cash flow to simplify this measure and believe removing it will make us more comparable within our industry.
|
Rogers Communications Inc.
|
22
|
Third Quarter 2019
|
|
As at
September 30 |
|
As at
January 1 |
|
As at
December 31
|
|
(In millions of dollars)
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|||
Current portion of long-term debt
|
1,400
|
|
900
|
|
900
|
|
Long-term debt
|
14,879
|
|
13,390
|
|
13,390
|
|
Deferred transaction costs and discounts
|
138
|
|
114
|
|
114
|
|
|
16,417
|
|
14,404
|
|
14,404
|
|
Add (deduct):
|
|
|
|
|||
Net debt derivative assets
|
(1,660
|
)
|
(1,373
|
)
|
(1,373
|
)
|
Credit risk adjustment related to net debt derivative assets
|
(79
|
)
|
(75
|
)
|
(75
|
)
|
Short-term borrowings
|
1,708
|
|
2,255
|
|
2,255
|
|
Current portion of lease liabilities
|
219
|
|
190
|
|
—
|
|
Lease liabilities
|
1,435
|
|
1,355
|
|
—
|
|
Cash and cash equivalents
|
(262
|
)
|
(405
|
)
|
(405
|
)
|
|
|
|
|
|||
Adjusted net debt
|
17,778
|
|
16,351
|
|
14,806
|
|
|
As at
September 30 |
|
As at
January 1 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|||
Adjusted net debt
|
17,778
|
|
16,351
|
|
14,806
|
|
Divided by: trailing 12-month adjusted EBITDA
|
6,250
|
|
6,157
|
|
5,983
|
|
|
|
|
|
|||
Debt leverage ratio
|
2.8
|
|
2.7
|
|
2.5
|
|
Rogers Communications Inc.
|
23
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
||||
Revenue
|
3,754
|
|
3,769
|
|
|
11,121
|
|
11,158
|
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
||||
Operating costs
|
2,042
|
|
2,149
|
|
|
6,439
|
|
6,696
|
|
Depreciation and amortization
|
627
|
|
558
|
|
|
1,850
|
|
1,647
|
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
Restructuring, acquisition and other
|
42
|
|
47
|
|
|
101
|
|
116
|
|
Finance costs
|
215
|
|
176
|
|
|
610
|
|
588
|
|
Other expense (income)
|
16
|
|
15
|
|
|
2
|
|
(6
|
)
|
|
|
|
|
|
|
||||
Income before income tax expense
|
812
|
|
829
|
|
|
2,119
|
|
2,133
|
|
Income tax expense
|
219
|
|
235
|
|
|
544
|
|
576
|
|
|
|
|
|
|
|
||||
Net income for the period
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
||||
Basic
|
$1.16
|
$1.15
|
|
$3.07
|
$3.02
|
||||
Diluted
|
$1.14
|
$1.15
|
|
$3.05
|
$3.01
|
Rogers Communications Inc.
|
24
|
Third Quarter 2019
|
|
As at
September 30 |
|
As at
January 1 |
|
As at
December 31 |
|
|
2019
|
|
2019
|
|
2018
|
|
|
|
|
|
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
262
|
|
405
|
|
405
|
|
Accounts receivable
|
2,097
|
|
2,259
|
|
2,259
|
|
Inventories
|
393
|
|
466
|
|
466
|
|
Current portion of contract assets
|
1,154
|
|
1,052
|
|
1,052
|
|
Other current assets
|
472
|
|
413
|
|
436
|
|
Current portion of derivative instruments
|
129
|
|
270
|
|
270
|
|
Total current assets
|
4,507
|
|
4,865
|
|
4,888
|
|
|
|
|
|
|||
Property, plant and equipment
|
13,661
|
|
13,261
|
|
11,780
|
|
Intangible assets
|
8,893
|
|
7,205
|
|
7,205
|
|
Investments
|
2,744
|
|
2,134
|
|
2,134
|
|
Derivative instruments
|
1,639
|
|
1,339
|
|
1,339
|
|
Contract assets
|
488
|
|
535
|
|
535
|
|
Other long-term assets
|
207
|
|
132
|
|
132
|
|
Goodwill
|
3,923
|
|
3,905
|
|
3,905
|
|
|
|
|
|
|||
Total assets
|
36,062
|
|
33,376
|
|
31,918
|
|
|
|
|
|
|||
Liabilities and shareholders' equity
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Short-term borrowings
|
1,708
|
|
2,255
|
|
2,255
|
|
Accounts payable and accrued liabilities
|
2,572
|
|
2,997
|
|
3,052
|
|
Income tax payable
|
129
|
|
177
|
|
177
|
|
Other current liabilities
|
114
|
|
132
|
|
132
|
|
Contract liabilities
|
166
|
|
233
|
|
233
|
|
Current portion of long-term debt
|
1,400
|
|
900
|
|
900
|
|
Current portion of lease liabilities
|
219
|
|
190
|
|
—
|
|
Current portion of derivative instruments
|
3
|
|
87
|
|
87
|
|
Total current liabilities
|
6,311
|
|
6,971
|
|
6,836
|
|
|
|
|
|
|||
Provisions
|
37
|
|
35
|
|
35
|
|
Long-term debt
|
14,879
|
|
13,390
|
|
13,390
|
|
Derivative instruments
|
11
|
|
22
|
|
22
|
|
Lease liabilities
|
1,435
|
|
1,355
|
|
—
|
|
Other long-term liabilities
|
445
|
|
546
|
|
546
|
|
Deferred tax liabilities
|
3,301
|
|
2,901
|
|
2,910
|
|
Total liabilities
|
26,419
|
|
25,220
|
|
23,739
|
|
|
|
|
|
|||
Shareholders' equity
|
9,643
|
|
8,156
|
|
8,179
|
|
|
|
|
|
|||
Total liabilities and shareholders' equity
|
36,062
|
|
33,376
|
|
31,918
|
|
Rogers Communications Inc.
|
25
|
Third Quarter 2019
|
|
Three months ended September 30
|
|
|
Nine months ended September 30
|
|
||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
Operating activities:
|
|
|
|
|
|
||||
Net income for the period
|
593
|
|
594
|
|
|
1,575
|
|
1,557
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||
Depreciation and amortization
|
627
|
|
558
|
|
|
1,850
|
|
1,647
|
|
Program rights amortization
|
17
|
|
9
|
|
|
58
|
|
39
|
|
Finance costs
|
215
|
|
176
|
|
|
610
|
|
588
|
|
Income tax expense
|
219
|
|
235
|
|
|
544
|
|
576
|
|
Post-employment benefits contributions, net of expense
|
33
|
|
31
|
|
|
(82
|
)
|
(38
|
)
|
Gain on disposition of property, plant and equipment
|
—
|
|
(5
|
)
|
|
—
|
|
(16
|
)
|
Net change in contract asset balances
|
(26
|
)
|
(74
|
)
|
|
(55
|
)
|
(168
|
)
|
Other
|
5
|
|
20
|
|
|
65
|
|
15
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
1,683
|
|
1,544
|
|
|
4,565
|
|
4,200
|
|
Change in non-cash operating working capital items
|
(57
|
)
|
77
|
|
|
(279
|
)
|
(72
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
1,626
|
|
1,621
|
|
|
4,286
|
|
4,128
|
|
Income taxes paid
|
(99
|
)
|
(125
|
)
|
|
(345
|
)
|
(316
|
)
|
Interest paid
|
(222
|
)
|
(192
|
)
|
|
(581
|
)
|
(575
|
)
|
|
|
|
|
|
|
||||
Cash provided by operating activities
|
1,305
|
|
1,304
|
|
|
3,360
|
|
3,237
|
|
|
|
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|
||||
Capital expenditures
|
(657
|
)
|
(700
|
)
|
|
(2,016
|
)
|
(1,962
|
)
|
Additions to program rights
|
(15
|
)
|
(16
|
)
|
|
(29
|
)
|
(28
|
)
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
(63
|
)
|
(37
|
)
|
|
(144
|
)
|
(232
|
)
|
Acquisitions and other strategic transactions, net of cash acquired
|
—
|
|
—
|
|
|
(1,731
|
)
|
—
|
|
Other
|
11
|
|
5
|
|
|
1
|
|
16
|
|
|
|
|
|
|
|
||||
Cash used in investing activities
|
(724
|
)
|
(748
|
)
|
|
(3,919
|
)
|
(2,206
|
)
|
|
|
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|
||||
Net (repayment) proceeds received on short-term borrowings
|
(311
|
)
|
(255
|
)
|
|
(523
|
)
|
252
|
|
Net issuance (repayment) of long-term debt
|
—
|
|
—
|
|
|
2,276
|
|
(823
|
)
|
Net (payments) proceeds on settlement of debt derivatives and forward contracts
|
(22
|
)
|
16
|
|
|
(126
|
)
|
362
|
|
Principal payments of lease liabilities
|
(45
|
)
|
—
|
|
|
(124
|
)
|
—
|
|
Transaction costs incurred
|
—
|
|
(2
|
)
|
|
(33
|
)
|
(18
|
)
|
Repurchase of Class B Non-Voting Shares
|
(89
|
)
|
—
|
|
|
(294
|
)
|
—
|
|
Dividends paid
|
(256
|
)
|
(247
|
)
|
|
(760
|
)
|
(741
|
)
|
|
|
|
|
|
|
||||
Cash (used in) provided by financing activities
|
(723
|
)
|
(488
|
)
|
|
416
|
|
(968
|
)
|
|
|
|
|
|
|
||||
Change in cash and cash equivalents
|
(142
|
)
|
68
|
|
|
(143
|
)
|
63
|
|
Cash and cash equivalents (bank advances), beginning of period
|
404
|
|
(11
|
)
|
|
405
|
|
(6
|
)
|
|
|
|
|
|
|
||||
Cash and cash equivalents, end of period
|
262
|
|
57
|
|
|
262
|
|
57
|
|
Rogers Communications Inc.
|
26
|
Third Quarter 2019
|
•
|
typically includes words like could, expect, may, anticipate, assume, believe, intend, estimate, plan, project, guidance, outlook, target, and similar expressions, although not all forward-looking information includes them;
|
•
|
includes conclusions, forecasts, and projections that are based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors, most of which are confidential and proprietary and that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
|
•
|
was approved by our management on the date of this earnings release.
|
•
|
revenue;
|
•
|
total service revenue;
|
•
|
adjusted EBITDA;
|
•
|
capital expenditures;
|
•
|
cash income tax payments;
|
•
|
free cash flow;
|
•
|
dividend payments;
|
•
|
the growth of new products and services;
|
•
|
expected growth in subscribers and the services to which they subscribe;
|
•
|
the cost of acquiring and retaining subscribers and deployment of new services;
|
•
|
continued cost reductions and efficiency improvements;
|
•
|
traction against our debt leverage ratio; and
|
•
|
all other statements that are not historical facts.
|
•
|
a substantial portion of our 2019 US dollar-denominated expenditures is hedged at an average exchange rate of $1.25/US$;
|
•
|
key interest rates remain relatively stable throughout 2019;
|
•
|
no significant additional legal or regulatory developments (including resolution of the proceedings regarding the CRTC's decision on the rates we can charge to resellers of high-speed access services, including Rogers' TPIA service), shifts in economic conditions, or macro changes in the competitive environment affecting our business activities. We note that regulatory decisions issued during 2019 could materially alter underlying assumptions around our 2019 Wireless, Cable, and/or Media results in the current and future years, the impacts of which are currently unknown and not factored into our guidance;
|
•
|
overall wireless and cable market penetration in Canada grows in 2019 at a similar rate as in 2018, supported by healthy economic conditions and population growth;
|
•
|
continued subscriber growth in Wireless and Internet and a decline in Television and Phone subscribers; and
|
•
|
our market share of wireless and cable subscriber growth is maintained;
|
•
|
Wireless and Cable customers continue to upgrades their services to higher speed and consumption tiers;
|
•
|
lower Wireless overage revenue as a result of the faster-than-expected adoption of our new Rogers Infinite™ unlimited data plans;
|
•
|
capital expenditures continue to focus on our network and service investments:
|
•
|
we continue to invest appropriately to ensure we have competitive wireless and cable networks through (i) building a 4.5G to 5G wireless network and (ii) upgrading our hybrid fibre-coaxial network to lower the number of homes passed per node, utilize the latest technologies, and deliver an even more reliable customer experience; and
|
•
|
we continue to invest in service capabilities.
|
Rogers Communications Inc.
|
27
|
Third Quarter 2019
|
•
|
general economic and industry growth rates;
|
•
|
currency exchange rates and interest rates;
|
•
|
product pricing levels and competitive intensity;
|
•
|
subscriber growth;
|
•
|
pricing, usage, and churn rates;
|
•
|
changes in government regulation;
|
•
|
technology deployment;
|
•
|
availability of devices;
|
•
|
timing of new product launches;
|
•
|
content and equipment costs;
|
•
|
the integration of acquisitions; and
|
•
|
industry structure and stability.
|
•
|
regulatory changes;
|
•
|
technological changes;
|
•
|
economic conditions;
|
•
|
unanticipated changes in content or equipment costs;
|
•
|
changing conditions in the entertainment, information, and communications industries;
|
•
|
the integration of acquisitions;
|
•
|
litigation and tax matters;
|
•
|
the level of competitive intensity;
|
•
|
the emergence of new opportunities; and
|
•
|
new interpretations and new accounting standards from accounting standards bodies.
|
Rogers Communications Inc.
|
28
|
Third Quarter 2019
|