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ROGERS COMMUNICATIONS INC.
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By:
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/s/ Anthony Staffieri
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Name: Anthony Staffieri
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Title: Chief Financial Officer
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Exhibit Number
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Description of Document
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99.1
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Management's Discussion and Analysis of Rogers Communications Inc. for the first quarter ended March 31, 2020
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99.2
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Interim Condensed Consolidated Financial Statements of Rogers Communications Inc. for the first quarter ended March 31, 2020
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99.3
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Earnings Release of Rogers Communications Inc. for the first quarter ended March 31, 2020
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Rogers Communications Inc.
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1
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First Quarter 2020
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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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Operating Environment and Strategic Highlights
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Commitments and Contractual Obligations
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Quarterly Financial Highlights
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Regulatory Developments
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Summary of Consolidated Financial Results
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Updates to Risks and Uncertainties
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Results of our Reportable Segments
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Critical Accounting Policies and Estimates
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Review of Consolidated Performance
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Managing our Liquidity and Financial Resources
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Non-GAAP Measures and Related Performance
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Overview of Financial Position
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Measures
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Financial Condition
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Financial Risk Management
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•
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Waived pay-per-use international roaming fees in all available destinations until April 30 to help our customers return home from abroad.
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•
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Waived long distance voice calling fees across Canada from mid-March until at least the end of June.
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•
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Implemented flexible payment options for customers facing financial uncertainty as a result of the COVID-19 pandemic, with no account suspensions or disconnections until at least the end of June.
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•
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Increased digital adoption by six points sequentially to 84%, with many self-serve options during the public health crisis.
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•
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Introduced an Ignite™ self-installation program as a safe, easy, no-contact way for our customers to install our Ignite Internet™ and Ignite TV services; 100% of our installations in April have been performed this way.
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Rogers Communications Inc.
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2
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First Quarter 2020
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•
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Turned on Canada’s first 5G network in downtown Vancouver, Toronto, Ottawa, and Montreal using 2.5 GHz spectrum and brought exclusive 5G service to Rogers Infinite™ customers on the new Samsung Galaxy S20 5G series.
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Became a founding member of the 5G Future Forum, focused on developing interoperable 5G standards across key geographic regions, including the Americas, Asia-Pacific, and Europe.
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Continued to add capacity and manage traffic where needed to ensure customers stay connected during the COVID-19 pandemic, with total traffic on our world-class networks up by over 50% as more people started working from home.
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Launched and added capacity for government 1-800 numbers to serve citizens during the public health crisis and enabled temporary COVID-19 health assessment centres.
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•
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Launched free access for Rogers TV customers to a rotating selection of channels from mid-March until at least the end of June.
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Temporarily removed data usage caps for customers on limited home Internet plans from mid-March until at least the end of June so they can stream, surf, and connect without worry.
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•
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Continued news reporting across our media assets with radio and television broadcasting as an essential service; created original content and programming for Sportsnet viewers given the suspension of live sports during the COVID-19 pandemic.
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•
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Expanded our consolidated adjusted EBITDA margin by 190 basis points, to 39.1%.
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•
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Grew free cash flow by 14%.
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•
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Ended the quarter with total available liquidity of $3.8 billion.
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•
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Accelerated progress during the COVID-19 pandemic on our strategic priority to offer increased flexibility to our employees through work-from-home programs across the company, including approximately 7,000 customer solution specialists.
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•
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Delivered enhanced programs and employee communications to ensure employees are supported and informed during the public health crisis.
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•
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Launched a national development planning campaign and an enhanced internal learning platform for all employees.
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•
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Launched an awareness campaign across our media and digital assets to raise money for Food Banks Canada to address acute food shortages during the COVID-19 pandemic; donated more than one million meals through a corporate donation and employee contributions.
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•
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Partnered with Big Brothers Big Sisters of Canada to donate smartphones in collaboration with Samsung and provide six months of free service to vulnerable youth to help them stay connected to mentors.
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•
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Partnered with Women’s Shelters of Canada to provide emergency devices and advertising space across our media and digital assets to promote Sheltersafe.ca for women at risk during the public health crisis.
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•
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Expanded Connected for Success, our low-cost Internet program, to reach over 250,000 households with 340 housing partners.
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Rogers Communications Inc.
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3
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First Quarter 2020
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Rogers Communications Inc.
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4
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First Quarter 2020
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Three months ended March 31
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(In millions of dollars, except margins and per share amounts)
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2020
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2019
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% Chg
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Revenue
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Wireless
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2,077
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2,189
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(5
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)
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Cable
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973
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976
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—
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Media
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412
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468
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(12
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)
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Corporate items and intercompany eliminations
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(46
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)
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(46
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)
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—
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Revenue
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3,416
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3,587
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(5
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)
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Total service revenue 1
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3,049
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3,143
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(3
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)
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Adjusted EBITDA 2
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Wireless
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1,026
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1,015
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1
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Cable
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453
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445
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2
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Media
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(85
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)
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(84
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)
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1
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Corporate items and intercompany eliminations
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(59
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)
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(41
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)
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44
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Adjusted EBITDA 2
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1,335
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1,335
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—
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Adjusted EBITDA margin 2
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39.1
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%
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37.2
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%
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1.9
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pts
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Net income
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352
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391
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(10
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)
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Basic earnings per share
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$0.70
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$0.76
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(8
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)
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Diluted earnings per share
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$0.68
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$0.76
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(11
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)
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Adjusted net income 2
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367
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405
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(9
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Adjusted basic earnings per share 2
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$0.73
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$0.79
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(8
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)
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Adjusted diluted earnings per share 2
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$0.71
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$0.78
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(9
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)
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Capital expenditures
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593
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617
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(4
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Cash provided by operating activities
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959
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998
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(4
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)
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Free cash flow 2
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462
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405
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14
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2
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Adjusted EBITDA, adjusted net income, 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 and Related Performance Measures" for information about these measures, including how we calculate them and the ratios in which they are used.
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Rogers Communications Inc.
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5
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First Quarter 2020
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Three months ended March 31
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(In millions of dollars, except margins)
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2020
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2019
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% Chg
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Revenue
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Service revenue
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1,712
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1,747
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(2
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Equipment revenue
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365
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442
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(17
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Revenue
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2,077
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2,189
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(5
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)
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Operating expenses
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Cost of equipment
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374
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501
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(25
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Other operating expenses
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677
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673
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1
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Operating expenses
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1,051
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1,174
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(10
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)
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Adjusted EBITDA
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1,026
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1,015
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1
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Adjusted EBITDA margin
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49.4
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%
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46.4
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%
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3.0
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pts
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Capital expenditures
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281
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282
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—
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Three months ended March 31
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(In thousands, except churn, blended ABPU, and blended ARPU)
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2020
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2019
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Chg
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Postpaid
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Gross additions
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257
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295
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(38
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)
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Net (losses) additions
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(6
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23
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(29
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)
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Total postpaid subscribers 2
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9,432
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9,180
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252
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Churn (monthly)
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0.93
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%
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0.99
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%
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(0.06
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pts)
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Prepaid
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Gross additions
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141
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171
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(30
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)
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Net losses
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(66
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)
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(56
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)
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(10
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)
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Total prepaid subscribers 2
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1,336
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1,570
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(234
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)
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Churn (monthly)
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4.98
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%
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4.69
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%
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0.29
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pts
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Blended ABPU (monthly)
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$65.14
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$64.62
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$0.52
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Blended ARPU (monthly)
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$52.85
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$54.13
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($1.28
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)
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1
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Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. See "Key Performance Indicators".
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2
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As at end of period.
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•
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a decrease in overage revenue as a result of strong customer adoption of our Rogers Infinite unlimited data plans; and
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•
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lower roaming revenue associated with lower overall roaming activity due to less travel and as we provided these services to our customers at no cost starting March 16; partially offset by
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•
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a larger postpaid subscriber base.
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Rogers Communications Inc.
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6
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First Quarter 2020
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•
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lower gross additions and device upgrades by existing customers, in part due to the COVID-19 pandemic; partially offset by
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•
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a shift in the product mix of device sales towards higher-value devices.
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Rogers Communications Inc.
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7
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First Quarter 2020
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Three months ended March 31
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||||
(In millions of dollars, except margins)
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2020
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2019
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% Chg
|
|
|
|
|
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Revenue
|
|
|
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Service revenue
|
971
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|
974
|
|
—
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Equipment revenue
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2
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|
2
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|
—
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|
Revenue
|
973
|
|
976
|
|
—
|
|
|
|
|
|
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Operating expenses
|
520
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|
531
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|
(2
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)
|
|
|
|
|
|||
Adjusted EBITDA
|
453
|
|
445
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|
2
|
|
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Adjusted EBITDA margin
|
46.6
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%
|
45.6
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%
|
1.0
|
pts
|
Capital expenditures
|
251
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|
289
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|
(13
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)
|
|
Three months ended March 31
|
|
||||
(In thousands, except ARPA and penetration)
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2020
|
|
2019
|
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Chg
|
|
|
|
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Internet
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|
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Net additions
|
17
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|
14
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|
3
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|
Total Internet subscribers 2
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2,551
|
|
2,444
|
|
107
|
|
Ignite TV
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|
|
|
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Net additions
|
91
|
|
47
|
|
44
|
|
Total Ignite TV subscribers 2
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417
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|
89
|
|
328
|
|
|
|
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|
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Homes passed 2
|
4,500
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|
4,381
|
|
119
|
|
Customer relationships
|
|
|
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Net additions (losses)
|
2
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|
(1
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)
|
3
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|
Total customer relationships 2
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2,512
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|
2,488
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|
24
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|
ARPA (monthly)
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$128.91
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|
$130.51
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($1.60
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)
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Penetration 2
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55.8
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%
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56.8
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%
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(1.0
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pts)
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1
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Subscriber results are key performance indicators. See "Key Performance Indicators".
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2
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As at end of period.
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•
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a 1% decrease in ARPA as a result of bundled pricing constructs that provide home phone for a lower incremental cost, partially offset by the impact of Internet and television service pricing changes in 2019; offset by
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•
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the increase in total customer relationships over the past year, due to growth in our Internet and Ignite TV subscriber bases, partially offset by declines in our legacy television and home phone subscriber bases; and
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•
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the movement of Internet customers to higher speed and usage tiers in our Ignite Internet offerings.
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Rogers Communications Inc.
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8
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First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
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2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
412
|
|
468
|
|
(12
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)
|
Operating expenses
|
497
|
|
552
|
|
(10
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)
|
|
|
|
|
|||
Adjusted EBITDA
|
(85
|
)
|
(84
|
)
|
1
|
|
|
|
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|
|||
Adjusted EBITDA margin
|
(20.6
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)%
|
(17.9
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)%
|
(2.7
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pts)
|
Capital expenditures
|
12
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|
22
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|
(45
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)
|
•
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lower sports revenue, including at the Toronto Blue Jays, primarily as a result of the suspension of major sports leagues due to COVID-19;
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•
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lower advertising revenue as a result of softness in the advertising market due to COVID-19; and
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•
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the sale of our publishing business in April 2019.
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•
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the impact of Toronto Blue Jays player trades in 2019;
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•
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lower sports-related costs, including lower programming costs and lower Toronto Blue Jays player salaries and game day costs, in line with the lower revenue discussed above; and
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•
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lower publishing-related costs due to the sale of the business.
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Rogers Communications Inc.
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9
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First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except capital intensity)
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2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Wireless
|
281
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|
282
|
|
—
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Cable
|
251
|
|
289
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|
(13
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)
|
Media
|
12
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|
22
|
|
(45
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)
|
Corporate
|
49
|
|
24
|
|
104
|
|
|
|
|
|
|||
Capital expenditures 1
|
593
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|
617
|
|
(4
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)
|
|
|
|
|
|||
Capital intensity 2
|
17.4
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%
|
17.2
|
%
|
0.2
|
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.
|
10
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Adjusted EBITDA 1
|
1,335
|
|
1,335
|
|
—
|
|
Deduct (add):
|
|
|
|
|||
Depreciation and amortization
|
639
|
|
609
|
|
5
|
|
Restructuring, acquisition and other
|
21
|
|
20
|
|
5
|
|
Finance costs
|
220
|
|
189
|
|
16
|
|
Other income
|
(14
|
)
|
(13
|
)
|
8
|
|
Income tax expense
|
117
|
|
139
|
|
(16
|
)
|
|
|
|
|
|||
Net income
|
352
|
|
391
|
|
(10
|
)
|
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 and Related Performance Measures" for information about this measure, including how we calculate it.
|
|
Three months ended March 31
|
|
||||
(In millions of dollars)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
588
|
|
564
|
|
4
|
|
Depreciation of right-of-use assets 1
|
48
|
|
41
|
|
17
|
|
Amortization
|
3
|
|
4
|
|
(25
|
)
|
|
|
|
|
|||
Total depreciation and amortization
|
639
|
|
609
|
|
5
|
|
1
|
See "Critical Accounting Policies and Estimates" for more information.
|
|
Three months ended March 31
|
||||
(In millions of dollars)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
||
Interest on borrowings 1
|
192
|
|
173
|
|
11
|
Interest on lease liabilities
|
17
|
|
14
|
|
21
|
Interest on post-employment benefits liability
|
3
|
|
3
|
|
—
|
Loss (gain) on foreign exchange
|
132
|
|
(45
|
)
|
n/m
|
Change in fair value of derivative instruments
|
(126
|
)
|
44
|
|
n/m
|
Capitalized interest
|
(5
|
)
|
(5
|
)
|
—
|
Other
|
7
|
|
5
|
|
40
|
|
|
|
|
||
Total finance costs
|
220
|
|
189
|
|
16
|
•
|
higher outstanding debt as a result of our debt issuances over the past year; partially offset by
|
•
|
a lower weighted average cost of borrowing on our outstanding debt.
|
Rogers Communications Inc.
|
11
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars, except tax rates)
|
2020
|
|
2019
|
|
|
|
|
||
Statutory income tax rate
|
26.6
|
%
|
26.7
|
%
|
Income before income tax expense
|
469
|
|
530
|
|
Computed income tax expense
|
125
|
|
142
|
|
(Decrease) increase in income tax expense resulting from:
|
|
|
||
Non-(taxable) deductible stock-based compensation
|
(2
|
)
|
1
|
|
Non-taxable portion of equity income
|
(1
|
)
|
(1
|
)
|
Other items
|
(5
|
)
|
(3
|
)
|
|
|
|
||
Total income tax expense
|
117
|
|
139
|
|
|
|
|
||
Effective income tax rate
|
24.9
|
%
|
26.2
|
%
|
Cash income taxes paid
|
93
|
|
145
|
|
|
Three months ended March 31
|
|
||||||
(In millions of dollars, except per share amounts)
|
2020
|
|
2019
|
|
% Chg
|
|
||
|
|
|
|
|||||
Net income
|
352
|
|
391
|
|
(10
|
)
|
||
Basic earnings per share
|
|
$0.70
|
|
|
$0.76
|
|
(8
|
)
|
Diluted earnings per share
|
|
$0.68
|
|
|
$0.76
|
|
(11
|
)
|
|
Three months ended March 31
|
|
||||||
(In millions of dollars, except per share amounts)
|
2020
|
|
2019
|
|
% Chg
|
|
||
|
|
|
|
|||||
Adjusted EBITDA 1
|
1,335
|
|
1,335
|
|
—
|
|
||
Deduct:
|
|
|
|
|||||
Depreciation and amortization
|
639
|
|
609
|
|
5
|
|
||
Finance costs
|
220
|
|
189
|
|
16
|
|
||
Other income
|
(14
|
)
|
(13
|
)
|
8
|
|
||
Income tax expense 2
|
123
|
|
145
|
|
(15
|
)
|
||
|
|
|
|
|||||
Adjusted net income 1
|
367
|
|
405
|
|
(9
|
)
|
||
|
|
|
|
|||||
Adjusted basic earnings per share 1
|
|
$0.73
|
|
|
$0.79
|
|
(8
|
)
|
Adjusted diluted earnings per share 1
|
|
$0.71
|
|
|
$0.78
|
|
(9
|
)
|
1
|
Adjusted EBITDA and adjusted net income are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures and Related Performance Measures" for information about these measures, including how we calculate them and the ratios in which they are used.
|
2
|
Income tax expense excludes recoveries of $6 million (2019 - recoveries of $6 million) for the three months ended March 31, 2020, related to the income tax impact for adjusted items.
|
Rogers Communications Inc.
|
12
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
1,438
|
|
1,376
|
|
Change in non-cash operating working capital items
|
(186
|
)
|
(13
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
1,252
|
|
1,363
|
|
Income taxes paid
|
(93
|
)
|
(145
|
)
|
Interest paid
|
(200
|
)
|
(220
|
)
|
|
|
|
||
Cash provided by operating activities
|
959
|
|
998
|
|
|
|
|
||
Investing activities:
|
|
|
||
Capital expenditures
|
(593
|
)
|
(617
|
)
|
Additions to program rights
|
(15
|
)
|
(7
|
)
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
(129
|
)
|
(107
|
)
|
Other
|
(19
|
)
|
(3
|
)
|
|
|
|
||
Cash used in investing activities
|
(756
|
)
|
(734
|
)
|
|
|
|
||
Financing activities:
|
|
|
||
Net (repayment of) proceeds received from short-term borrowings
|
(1,417
|
)
|
430
|
|
Net issuance (repayment) of long-term debt
|
2,885
|
|
(400
|
)
|
Net proceeds (payments) on settlement of debt derivatives and forward contracts
|
90
|
|
(11
|
)
|
Principal payments of lease liabilities
|
(50
|
)
|
(41
|
)
|
Transaction costs incurred
|
(16
|
)
|
—
|
|
Repurchase of Class B Non-Voting Shares
|
—
|
|
(136
|
)
|
Dividends paid
|
(253
|
)
|
(247
|
)
|
|
|
|
||
Cash provided by (used in) financing activities
|
1,239
|
|
(405
|
)
|
|
|
|
||
Change in cash and cash equivalents
|
1,442
|
|
(141
|
)
|
Cash and cash equivalents, beginning of period
|
494
|
|
405
|
|
|
|
|
||
Cash and cash equivalents, end of period
|
1,936
|
|
264
|
|
Rogers Communications Inc.
|
13
|
First Quarter 2020
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
316
|
|
1,588
|
|
|
|
|
||
Total short-term borrowings
|
966
|
|
2,238
|
|
|
|
Three months ended March 31, 2020
|
|
|
|
Three months ended March 31, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
Notional
(US$) |
|
Exchange
rate |
|
Notional
(Cdn$) |
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from US commercial paper
|
2,678
|
|
1.328
|
|
3,556
|
|
|
3,858
|
|
1.330
|
|
5,132
|
|
Repayment of US commercial paper
|
(3,685
|
)
|
1.350
|
|
(4,973
|
)
|
|
(3,545
|
)
|
1.326
|
|
(4,702
|
)
|
Net (repayment of) proceeds received from US commercial paper
|
|
|
|
(1,417
|
)
|
|
|
|
430
|
|
|||
|
|
|
|
|
|
|
|
||||||
Net (repayment of) proceeds received from short-term borrowings
|
|
|
(1,417
|
)
|
|
|
|
430
|
|
|
|
Three months ended March 31, 2020
|
|
|
|
Three months ended March 31, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$) |
|
Exchange
rate |
|
Notional
(Cdn$) |
|
|
Notional
(US$) |
|
Exchange
rate |
|
Notional
(Cdn$) |
|
|
|
|
|
|
|
|
|
||||||
Credit facility borrowings (US$)
|
970
|
|
1.428
|
|
1,385
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Net borrowings under credit facilities
|
|
|
1,385
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior note issuances (Cdn$)
|
|
|
1,500
|
|
|
|
|
—
|
|
||||
Senior note repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(400
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of senior notes
|
|
|
1,500
|
|
|
|
|
(400
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of long-term debt
|
|
|
2,885
|
|
|
|
|
(400
|
)
|
Rogers Communications Inc.
|
14
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Long-term debt net of transaction costs, beginning of period
|
15,967
|
|
14,290
|
|
Net issuance (repayment) of long-term debt
|
2,885
|
|
(400
|
)
|
Loss (gain) on foreign exchange
|
986
|
|
(169
|
)
|
Deferred transaction costs incurred
|
(16
|
)
|
—
|
|
Amortization of deferred transaction costs
|
3
|
|
3
|
|
|
|
|
||
Long-term debt net of transaction costs, end of period
|
19,825
|
|
13,724
|
|
Declaration date
|
Record date
|
Payment date
|
Dividend per
share (dollars)
|
|
Dividends paid
(in millions of dollars)
|
|
|
|
|
|
|
||
January 22, 2020
|
March 10, 2020
|
April 1, 2020
|
0.50
|
|
252
|
|
|
|
|
|
|
||
January 24, 2019
|
March 12, 2019
|
April 1, 2019
|
0.50
|
|
257
|
|
April 18, 2019
|
June 10, 2019
|
July 2, 2019
|
0.50
|
|
256
|
|
June 5, 2019
|
September 9, 2019
|
October 1, 2019
|
0.50
|
|
256
|
|
October 23, 2019
|
December 11, 2019
|
January 2, 2020
|
0.50
|
|
253
|
|
Rogers Communications Inc.
|
15
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Adjusted EBITDA 1
|
1,335
|
|
1,335
|
|
—
|
|
Deduct:
|
|
|
|
|||
Capital expenditures 2
|
593
|
|
617
|
|
(4
|
)
|
Interest on borrowings, net of capitalized interest
|
187
|
|
168
|
|
11
|
|
Cash income taxes 3
|
93
|
|
145
|
|
(36
|
)
|
|
|
|
|
|
||
Free cash flow 1
|
462
|
|
405
|
|
14
|
|
1
|
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 and Related Performance Measures" for information about these measures, including how we calculate them and the ratios in which they are used.
|
2
|
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.
|
3
|
Cash income taxes are net of refunds received.
|
Rogers Communications Inc.
|
16
|
First Quarter 2020
|
|
As at
|
|
As at
|
|
|
|
|
||
|
March 31
|
|
December 31
|
|
|
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
$ Chg
|
|
% Chg
|
|
Explanation of significant changes
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||||
Cash and cash equivalents
|
1,936
|
|
494
|
|
1,442
|
|
n/m
|
|
See "Managing our Liquidity and Financial Resources".
|
Accounts receivable
|
1,984
|
|
2,304
|
|
(320
|
)
|
(14
|
)
|
Primarily reflects business seasonality and the collection of accounts receivable following the peak holiday period in Q4.
|
Inventories
|
423
|
|
460
|
|
(37
|
)
|
(8
|
)
|
Reflects a decrease in Wireless handset inventories.
|
Current portion of contract assets
|
1,094
|
|
1,234
|
|
(140
|
)
|
(11
|
)
|
Reflects our transition of consumer offerings to device financing agreements.
|
Other current assets
|
714
|
|
524
|
|
190
|
|
36
|
|
Primarily reflects an increase in financing receivables.
|
Current portion of derivative instruments
|
192
|
|
101
|
|
91
|
|
90
|
|
Primarily reflects changes in market values of our expenditure derivatives as a result of the depreciation of the Cdn$ relative to the US$. See "Financial Risk Management".
|
Total current assets
|
6,343
|
|
5,117
|
|
1,226
|
|
24
|
|
|
|
|
|
|
|
|
||||
Property, plant and equipment
|
14,049
|
|
13,934
|
|
115
|
|
1
|
|
Primarily reflects capital expenditures and additions to right-of-use assets, partially offset by depreciation expense.
|
Intangible assets
|
8,896
|
|
8,905
|
|
(9
|
)
|
—
|
|
n/m
|
Investments
|
2,554
|
|
2,830
|
|
(276
|
)
|
(10
|
)
|
Primarily reflects fair value decreases for certain publicly traded investments.
|
Derivative instruments
|
3,490
|
|
1,478
|
|
2,012
|
|
136
|
|
Primarily reflects changes in market values of certain debt derivatives as a result of changes in the Canadian and US interest rate environments and the depreciation of the Cdn$ relative to the US$. See "Financial Risk Management".
|
Contract assets
|
418
|
|
557
|
|
(139
|
)
|
(25
|
)
|
Reflects our transition of consumer offerings to device financing agreements.
|
Other long-term assets
|
403
|
|
275
|
|
128
|
|
47
|
|
Reflects an increase in financing receivables.
|
Goodwill
|
3,923
|
|
3,923
|
|
—
|
|
—
|
|
n/m
|
|
|
|
|
|
|
||||
Total assets
|
40,076
|
|
37,019
|
|
3,057
|
|
8
|
|
|
|
|
|
|
|
|
||||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
||||
Short-term borrowings
|
966
|
|
2,238
|
|
(1,272
|
)
|
(57
|
)
|
Reflects a decrease in borrowings under our US CP program.
|
Accounts payable and accrued liabilities
|
2,433
|
|
3,033
|
|
(600
|
)
|
(20
|
)
|
Reflects business seasonality and reduced Wireless device activity.
|
Income tax payable
|
232
|
|
48
|
|
184
|
|
n/m
|
|
Reflects the excess of current income tax expense over tax installments paid.
|
Other current liabilities
|
126
|
|
141
|
|
(15
|
)
|
(11
|
)
|
n/m
|
Contract liabilities
|
279
|
|
224
|
|
55
|
|
25
|
|
Primarily reflects an increase in contract liabilities related to device financing contracts.
|
Current portion of long-term debt
|
1,450
|
|
—
|
|
1,450
|
|
—
|
|
Reflects the reclassification to current of our $1,450 million senior notes due March 2021.
|
Current portion of lease liabilities
|
253
|
|
230
|
|
23
|
|
10
|
|
n/m
|
Current portion of derivative instruments
|
9
|
|
50
|
|
(41
|
)
|
(82
|
)
|
Primarily reflects the settlement of certain debt derivatives related to our US CP borrowings. See "Financial Risk Management".
|
Total current liabilities
|
5,748
|
|
5,964
|
|
(216
|
)
|
(4
|
)
|
|
|
|
|
|
|
|
|
|||
Provisions
|
37
|
|
36
|
|
1
|
|
3
|
|
n/m
|
Long-term debt
|
18,375
|
|
15,967
|
|
2,408
|
|
15
|
|
Reflects the issuance of $1.5 billion of senior notes due March 2027 and the depreciation of the Cdn$ relative to the US$, partially offset by the reclassification to current of our $1,450 million senior notes due March 2021. See "Managing our Liquidity and Financial Resources".
|
Derivative instruments
|
1
|
|
90
|
|
(89
|
)
|
(99
|
)
|
Primarily reflects changes in market values of certain debt derivatives as a result of changes in the Canadian and US interest rate environments and the depreciation of the Cdn$ relative to the US$. See "Financial Risk Management".
|
Lease liabilities
|
1,557
|
|
1,495
|
|
62
|
|
4
|
|
Reflects liabilities related to new leases entered.
|
Other long-term liabilities
|
623
|
|
614
|
|
9
|
|
1
|
|
n/m
|
Deferred tax liabilities
|
3,536
|
|
3,437
|
|
99
|
|
3
|
|
Primarily reflects an increase in taxable temporary differences between the accounting and tax bases for certain assets.
|
Total liabilities
|
29,877
|
|
27,603
|
|
2,274
|
|
8
|
|
|
|
|
|
|
|
|
||||
Shareholders' equity
|
10,199
|
|
9,416
|
|
783
|
|
8
|
|
Reflects changes in retained earnings and equity reserves.
|
|
|
|
|
|
|
||||
Total liabilities and shareholders' equity
|
40,076
|
|
37,019
|
|
3,057
|
|
8
|
|
|
Rogers Communications Inc.
|
17
|
First Quarter 2020
|
As at March 31, 2020
|
Total available
|
|
Drawn
|
|
Letters of credit
|
|
US CP program 1
|
|
Net available
|
|
(In millions of dollars)
|
||||||||||
|
|
|
|
|
|
|||||
Bank credit facilities:
|
|
|
|
|
|
|||||
Revolving
|
3,200
|
|
1,376
|
|
8
|
|
317
|
|
1,499
|
|
Outstanding letters of credit
|
101
|
|
—
|
|
101
|
|
—
|
|
—
|
|
Total bank credit facilities
|
3,301
|
|
1,376
|
|
109
|
|
317
|
|
1,499
|
|
Accounts receivable securitization
|
1,050
|
|
650
|
|
—
|
|
—
|
|
400
|
|
Cash and cash equivalents
|
1,936
|
|
—
|
|
—
|
|
—
|
|
1,936
|
|
|
|
|
|
|
|
|
||||
Total
|
6,287
|
|
2,026
|
|
109
|
|
317
|
|
3,835
|
|
1
|
The US CP program amounts are gross of the discount on issuance.
|
As at December 31, 2019
|
Total available
|
|
Drawn
|
|
Letters of credit
|
|
US CP program 1
|
|
Net available
|
|
(In millions of dollars)
|
||||||||||
|
|
|
|
|
|
|||||
Bank credit facilities:
|
|
|
|
|
|
|||||
Revolving
|
3,200
|
|
—
|
|
8
|
|
1,593
|
|
1,599
|
|
Outstanding letters of credit
|
101
|
|
—
|
|
101
|
|
—
|
|
—
|
|
Total bank credit facilities
|
3,301
|
|
—
|
|
109
|
|
1,593
|
|
1,599
|
|
Accounts receivable securitization
|
1,050
|
|
650
|
|
—
|
|
—
|
|
400
|
|
Cash and cash equivalents
|
494
|
|
—
|
|
—
|
|
—
|
|
494
|
|
|
|
|
|
|
|
|||||
Total
|
4,845
|
|
650
|
|
109
|
|
1,593
|
|
2,493
|
|
1
|
The US CP program amounts are gross of the discount on issuance.
|
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.
|
18
|
First Quarter 2020
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2020
|
|
2019
|
|
|
|
|
||
Long-term debt 1
|
20,001
|
|
16,130
|
|
Net debt derivative assets valued without any adjustment for credit risk 2
|
(3,951
|
)
|
(1,414
|
)
|
Short-term borrowings
|
966
|
|
2,238
|
|
Lease liabilities
|
1,810
|
|
1,725
|
|
Cash and cash equivalents
|
(1,936
|
)
|
(494
|
)
|
|
|
|
||
Adjusted net debt 3
|
16,890
|
|
18,185
|
|
Divided by: trailing 12-month adjusted EBITDA 3
|
6,212
|
|
6,212
|
|
|
|
|
||
Debt leverage ratio 3
|
2.7
|
|
2.9
|
|
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 and Related Performance Measures" for the calculation of this amount.
|
2
|
For purposes of calculating adjusted net debt and debt leverage ratio, we believe including debt derivatives valued without adjustment for credit risk is commonly used to evaluate debt leverage and for market valuation and transactional purposes.
|
3
|
Adjusted net debt and adjusted EBITDA 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 and Related Performance Measures" for information about these measures, including how we calculate them and the ratios in which they are used.
|
Rogers Communications Inc.
|
19
|
First Quarter 2020
|
|
As at
March 31 |
|
As at
December 31
|
|
|
2020
|
|
2019
|
|
|
|
|
||
Common shares outstanding 1
|
|
|
||
Class A Voting Shares
|
111,154,811
|
|
111,154,811
|
|
Class B Non-Voting Shares
|
393,770,507
|
|
393,770,507
|
|
|
|
|
||
Total common shares
|
504,925,318
|
|
504,925,318
|
|
|
|
|
||
Options to purchase Class B Non-Voting Shares
|
|
|
||
Outstanding options
|
4,726,634
|
|
3,154,795
|
|
Outstanding options exercisable
|
1,426,207
|
|
993,645
|
|
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.
|
|
|
Three months ended March 31, 2020
|
|
|
|
Three months ended March 31, 2019
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
970
|
|
1.428
|
|
1,385
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
US commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
2,678
|
|
1.328
|
|
3,556
|
|
|
3,858
|
|
1.330
|
|
5,132
|
|
Debt derivatives settled
|
3,678
|
|
1.325
|
|
4,873
|
|
|
3,536
|
|
1.329
|
|
4,701
|
|
Net cash received (paid)
|
|
|
90
|
|
|
|
|
(11
|
)
|
Rogers Communications Inc.
|
20
|
First Quarter 2020
|
|
Three months ended March 31, 2020
|
|
|
Three months ended March 31, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
41
|
|
1.440
|
|
59
|
|
|
—
|
|
—
|
|
—
|
|
Debt derivatives settled
|
6
|
|
1.318
|
|
8
|
|
|
—
|
|
—
|
|
—
|
|
|
Three months ended March 31, 2020
|
|
|
Three months ended March 31, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
342
|
|
1.339
|
|
458
|
|
|
240
|
|
1.304
|
|
313
|
|
Expenditure derivatives settled
|
225
|
|
1.298
|
|
292
|
|
|
210
|
|
1.243
|
|
261
|
|
Rogers Communications Inc.
|
21
|
First Quarter 2020
|
|
As at March 31, 2020
|
|
||||||
(In millions of dollars, except exchange rates)
|
Notional
amount
(US$)
|
|
Exchange
rate
|
|
Notional
amount
(Cdn$)
|
|
Fair value
(Cdn$)
|
|
Debt derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
8,363
|
|
1.1941
|
|
9,986
|
|
3,532
|
|
As liabilities
|
41
|
|
1.4400
|
|
59
|
|
(1
|
)
|
Short-term debt derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
223
|
|
1.3505
|
|
301
|
|
15
|
|
As liabilities
|
970
|
|
1.4278
|
|
1,385
|
|
(9
|
)
|
Net mark-to-market debt derivative asset
|
|
|
|
3,537
|
|
|||
Expenditure derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
1,107
|
|
1.3120
|
|
1,452
|
|
103
|
|
Equity derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
—
|
|
—
|
|
238
|
|
32
|
|
|
|
|
|
|
||||
Net mark-to-market asset
|
|
|
|
3,672
|
|
|
As at December 31, 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
|
5,800
|
|
1.1357
|
|
6,587
|
|
1,508
|
|
As liabilities
|
2,570
|
|
1.3263
|
|
3,409
|
|
(96
|
)
|
Short-term debt derivatives not accounted for as hedges:
|
|
|
|
|
||||
As liabilities
|
1,223
|
|
1.3227
|
|
1,618
|
|
(29
|
)
|
Net mark-to-market debt derivative asset
|
|
|
|
1,383
|
|
|||
Expenditure derivatives accounted for as cash flow hedges:
|
|
|
|
|
||||
As assets
|
270
|
|
1.2391
|
|
335
|
|
16
|
|
As liabilities
|
720
|
|
1.3228
|
|
952
|
|
(15
|
)
|
Net mark-to-market expenditure derivative asset
|
|
|
|
1
|
|
|||
Equity derivatives not accounted for as hedges:
|
|
|
|
|
||||
As assets
|
—
|
|
—
|
|
223
|
|
55
|
|
|
|
|
|
|
||||
Net mark-to-market asset
|
|
|
|
1,439
|
|
Rogers Communications Inc.
|
22
|
First Quarter 2020
|
•
|
the risk of a material reduction in demand for our products and services due to job losses and associated financial hardship, which may lead to a decline in revenue as a result of:
|
•
|
lower Wireless subscriber activity, including lower equipment revenue;
|
•
|
the suspension of major sports leagues and associated programming;
|
•
|
services provided to our customers at no cost, such as long distance calling, roaming, and free television channels;
|
•
|
lower roaming and overage revenue as customers are unable to travel and increasingly stay home; and
|
•
|
customers downgrading or cancelling their services;
|
•
|
an increase in delinquent or unpaid bills, which may lead to increased bad debt expense;
|
•
|
issues delivering certain products and services, or maintaining or upgrading our networks, due to store closures and supply chain disruptions;
|
•
|
additional capital expenditures to maintain or expand our networks in order to accommodate substantially increased network usage; and
|
•
|
higher costs for new capital.
|
Rogers Communications Inc.
|
23
|
First Quarter 2020
|
Rogers Communications Inc.
|
24
|
First Quarter 2020
|
•
|
Changes to the Conceptual Framework, seeking to provide improvements to concepts surrounding various financial reporting considerations and existing IFRS standards.
|
•
|
Amendments to IAS 1, Presentation of Financial Statements and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, clarifying the definition of "material".
|
•
|
Amendments to IFRS 9, Financial Instruments (IFRS 9), IAS 39, Financial Instruments: Recognition and Measurement (IAS 39), and IFRS 7, Financial Instruments: Disclosures (IFRS 7), Interest Rate Benchmark Reform, detailing the fundamental reform of major interest rate benchmarks being undertaken globally to replace or redefine Inter-Bank Offered Rates (IBORs) with alternative nearly risk-free benchmark rates (referred to as "IBOR reform"). There is significant uncertainty over the timing of when the replacements for IBORs will be effective and what those replacements will be. We will actively monitor the IBOR reform and consider circumstances as we renew or enter into new financial instrument contracts.
|
•
|
IFRS 17, Insurance Contracts, a replacement of IFRS 4, Insurance Contracts, that aims to provide consistency in the application of accounting for insurance contracts.
|
•
|
The Hon. David R. Peterson, P.C., Q.C., the non-executive chairman emeritus of Cassels Brock and Blackwell LLP, a law firm that provides legal services to us; and
|
•
|
Isabelle Marcoux, C.M., the chair of the board of Transcontinental Inc., a company that provides printing services to us.
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Printing and legal services 1
|
1
|
|
1
|
|
1
|
The amount paid for legal services is nominal.
|
Rogers Communications Inc.
|
25
|
First Quarter 2020
|
•
|
subscriber counts;
|
•
|
Wireless;
|
•
|
Cable; and
|
•
|
homes passed (Cable);
|
•
|
Wireless subscriber churn (churn);
|
•
|
Wireless blended average billings per user (ABPU);
|
•
|
Wireless blended average revenue per user
|
•
|
Cable average revenue per account (ARPA);
|
•
|
Cable customer relationships;
|
•
|
Cable market penetration (penetration);
|
•
|
capital intensity; and
|
•
|
total service revenue.
|
•
|
Cable Ignite TV and Internet subscribers are represented by a dwelling unit.
|
•
|
When there is more than one unit in a single dwelling, such as an apartment building, each tenant with cable service is counted as an individual subscriber, whether the service is invoiced separately or included in the tenant's rent. Institutional units, such as hospitals or hotels, are each considered one subscriber.
|
•
|
Cable Ignite TV and Internet subscribers include only those subscribers who have service installed and operating, and who are being billed accordingly.
|
•
|
Subscriber counts exclude certain business services delivered over our fibre network and data centre infrastructure, and circuit-switched local and long distance voice services and legacy data services where access is delivered using leased third-party network elements and tariffed ILEC services.
|
Rogers Communications Inc.
|
26
|
First Quarter 2020
|
Non-GAAP measure or related performance 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
|
●
|
|
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.
|
Rogers Communications Inc.
|
27
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Net income
|
352
|
|
391
|
|
Add:
|
|
|
||
Income tax expense
|
117
|
|
139
|
|
Finance costs
|
220
|
|
189
|
|
Depreciation and amortization
|
639
|
|
609
|
|
|
|
|
||
EBITDA
|
1,328
|
|
1,328
|
|
Add (deduct):
|
|
|
||
Other income
|
(14
|
)
|
(13
|
)
|
Restructuring, acquisition and other
|
21
|
|
20
|
|
|
|
|
||
Adjusted EBITDA
|
1,335
|
|
1,335
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars, except margins)
|
2020
|
|
2019
|
|
|
|
|
||
Adjusted EBITDA
|
1,335
|
|
1,335
|
|
Divided by: total revenue
|
3,416
|
|
3,587
|
|
|
|
|
||
Adjusted EBITDA margin
|
39.1
|
%
|
37.2
|
%
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Net income
|
352
|
|
391
|
|
Add (deduct):
|
|
|
||
Restructuring, acquisition and other
|
21
|
|
20
|
|
Income tax impact of above items
|
(6
|
)
|
(6
|
)
|
|
|
|
||
Adjusted net income
|
367
|
|
405
|
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
2020
|
|
2019
|
|
||
|
|
|
||||
Adjusted basic earnings per share:
|
|
|
||||
Adjusted net income
|
367
|
|
405
|
|
||
Divided by:
|
|
|
||||
Weighted average number of shares outstanding
|
505
|
|
514
|
|
||
|
|
|
|
|
||
Adjusted basic earnings per share
|
|
$0.73
|
|
|
$0.79
|
|
|
|
|
||||
Adjusted diluted earnings per share:
|
|
|
||||
Diluted adjusted net income
|
357
|
|
405
|
|
||
Divided by:
|
|
|
||||
Diluted weighted average number of shares outstanding
|
506
|
|
516
|
|
||
|
|
|
||||
Adjusted diluted earnings per share
|
|
$0.71
|
|
|
$0.78
|
|
Rogers Communications Inc.
|
28
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Cash provided by operating activities
|
959
|
|
998
|
|
Add (deduct):
|
|
|
||
Capital expenditures
|
(593
|
)
|
(617
|
)
|
Interest on borrowings, net of capitalized interest
|
(187
|
)
|
(168
|
)
|
Interest paid
|
200
|
|
220
|
|
Restructuring, acquisition and other
|
21
|
|
20
|
|
Program rights amortization
|
(22
|
)
|
(19
|
)
|
Net change in contract asset balances
|
(326
|
)
|
9
|
|
Net change in financing receivable balances
|
259
|
|
—
|
|
Change in non-cash operating working capital items
|
186
|
|
13
|
|
Other adjustments
|
(35
|
)
|
(51
|
)
|
|
|
|
|
|
Free cash flow
|
462
|
|
405
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Current portion of long-term debt
|
1,450
|
|
—
|
|
Long-term debt
|
18,375
|
|
15,967
|
|
Deferred transaction costs and discounts
|
176
|
|
163
|
|
|
20,001
|
|
16,130
|
|
Add (deduct):
|
|
|
||
Net debt derivative assets
|
(3,537
|
)
|
(1,383
|
)
|
Credit risk adjustment related to net debt derivative assets
|
(414
|
)
|
(31
|
)
|
Short-term borrowings
|
966
|
|
2,238
|
|
Current portion of lease liabilities
|
253
|
|
230
|
|
Lease liabilities
|
1,557
|
|
1,495
|
|
Cash and cash equivalents
|
(1,936
|
)
|
(494
|
)
|
|
|
|
||
Adjusted net debt
|
16,890
|
|
18,185
|
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2020
|
|
2019
|
|
|
|
|
||
Adjusted net debt
|
16,890
|
|
18,185
|
|
Divided by: trailing 12-month adjusted EBITDA
|
6,212
|
|
6,212
|
|
|
|
|
||
Debt leverage ratio
|
2.7
|
|
2.9
|
|
Rogers Communications Inc.
|
29
|
First Quarter 2020
|
|
2020
|
|
2019
|
|
2018 1
|
|||||||||||||||||||||
(In millions of dollars, except per share amounts)
|
Q1
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless
|
2,077
|
|
|
2,493
|
|
2,324
|
|
2,244
|
|
2,189
|
|
|
2,464
|
|
2,331
|
|
2,214
|
|
||||||||
Cable
|
973
|
|
|
987
|
|
994
|
|
997
|
|
976
|
|
|
989
|
|
983
|
|
991
|
|
||||||||
Media
|
412
|
|
|
530
|
|
483
|
|
591
|
|
468
|
|
|
540
|
|
488
|
|
608
|
|
||||||||
Corporate items and intercompany eliminations
|
(46
|
)
|
|
(58
|
)
|
(47
|
)
|
(52
|
)
|
(46
|
)
|
|
(55
|
)
|
(33
|
)
|
(57
|
)
|
||||||||
Total revenue
|
3,416
|
|
|
3,952
|
|
3,754
|
|
3,780
|
|
3,587
|
|
|
3,938
|
|
3,769
|
|
3,756
|
|
||||||||
Total service revenue 2
|
3,049
|
|
|
3,244
|
|
3,233
|
|
3,345
|
|
3,143
|
|
|
3,276
|
|
3,271
|
|
3,300
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted EBITDA 3
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Wireless
|
1,026
|
|
|
1,064
|
|
1,138
|
|
1,128
|
|
1,015
|
|
|
1,028
|
|
1,099
|
|
1,029
|
|
||||||||
Cable
|
453
|
|
|
497
|
|
499
|
|
478
|
|
445
|
|
|
489
|
|
490
|
|
462
|
|
||||||||
Media
|
(85
|
)
|
|
22
|
|
130
|
|
72
|
|
(84
|
)
|
|
40
|
|
73
|
|
60
|
|
||||||||
Corporate items and intercompany eliminations
|
(59
|
)
|
|
(53
|
)
|
(55
|
)
|
(43
|
)
|
(41
|
)
|
|
(36
|
)
|
(42
|
)
|
(47
|
)
|
||||||||
Adjusted EBITDA
|
1,335
|
|
|
1,530
|
|
1,712
|
|
1,635
|
|
1,335
|
|
|
1,521
|
|
1,620
|
|
1,504
|
|
||||||||
Deduct (add):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Depreciation and amortization
|
639
|
|
|
638
|
|
627
|
|
614
|
|
609
|
|
|
564
|
|
558
|
|
545
|
|
||||||||
Gain on disposition of property, plant and equipment
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(5
|
)
|
—
|
|
||||||||
Restructuring, acquisition and other
|
21
|
|
|
38
|
|
42
|
|
39
|
|
20
|
|
|
94
|
|
47
|
|
26
|
|
||||||||
Finance costs
|
220
|
|
|
230
|
|
215
|
|
206
|
|
189
|
|
|
205
|
|
176
|
|
193
|
|
||||||||
Other (income) expense
|
(14
|
)
|
|
(12
|
)
|
16
|
|
(1
|
)
|
(13
|
)
|
|
(26
|
)
|
15
|
|
2
|
|
||||||||
Net income before income tax expense
|
469
|
|
|
636
|
|
812
|
|
777
|
|
530
|
|
|
684
|
|
829
|
|
738
|
|
||||||||
Income tax expense
|
117
|
|
|
168
|
|
219
|
|
186
|
|
139
|
|
|
182
|
|
235
|
|
200
|
|
||||||||
Net income
|
352
|
|
|
468
|
|
593
|
|
591
|
|
391
|
|
|
502
|
|
594
|
|
538
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$0.70
|
|
|
|
$0.92
|
|
|
$1.16
|
|
|
$1.15
|
|
|
$0.76
|
|
|
|
$0.97
|
|
|
$1.15
|
|
|
$1.04
|
|
Diluted
|
|
$0.68
|
|
|
|
$0.92
|
|
|
$1.14
|
|
|
$1.15
|
|
|
$0.76
|
|
|
|
$0.97
|
|
|
$1.15
|
|
|
$1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
352
|
|
|
468
|
|
593
|
|
591
|
|
391
|
|
|
502
|
|
594
|
|
538
|
|
||||||||
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring, acquisition and other
|
21
|
|
|
38
|
|
42
|
|
39
|
|
20
|
|
|
94
|
|
47
|
|
26
|
|
||||||||
Loss on bond forward derivatives
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
21
|
|
—
|
|
—
|
|
||||||||
Loss on repayment of long-term debt
|
—
|
|
|
19
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||
Gain on disposition of property, plant and equipment
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(5
|
)
|
—
|
|
||||||||
Income tax impact of above items
|
(6
|
)
|
|
(14
|
)
|
(13
|
)
|
(10
|
)
|
(6
|
)
|
|
(32
|
)
|
(11
|
)
|
(10
|
)
|
||||||||
Income tax adjustment, legislative tax change
|
—
|
|
|
—
|
|
—
|
|
(23
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||||
Adjusted net income 3
|
367
|
|
|
511
|
|
622
|
|
597
|
|
405
|
|
|
585
|
|
625
|
|
554
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted earnings per share 3:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
$0.73
|
|
|
|
$1.00
|
|
|
$1.22
|
|
|
$1.17
|
|
|
$0.79
|
|
|
|
$1.14
|
|
|
$1.21
|
|
|
$1.08
|
|
Diluted
|
|
$0.71
|
|
|
|
$1.00
|
|
|
$1.19
|
|
|
$1.16
|
|
|
$0.78
|
|
|
|
$1.13
|
|
|
$1.21
|
|
|
$1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Capital expenditures
|
593
|
|
|
791
|
|
657
|
|
742
|
|
617
|
|
|
828
|
|
700
|
|
657
|
|
||||||||
Cash provided by operating activities
|
959
|
|
|
1,166
|
|
1,305
|
|
1,057
|
|
998
|
|
|
1,051
|
|
1,304
|
|
1,048
|
|
||||||||
Free cash flow 3
|
462
|
|
|
497
|
|
767
|
|
609
|
|
405
|
|
|
471
|
|
627
|
|
595
|
|
1
|
2018 reported figures have not been restated applying IFRS 16. See our 2019 Annual MD&A for more information.
|
2
|
As defined. See "Key Performance Indicators".
|
3
|
Adjusted EBITDA, adjusted net income, 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 and Related Performance Measures" for information about these measures, including how we calculate them and the ratios in which they are used.
|
Rogers Communications Inc.
|
30
|
First Quarter 2020
|
Three months ended March 31
|
RCI 1,2
|
RCCI 1,2
|
Non-guarantor
subsidiaries 1,2
|
Consolidating
adjustments 1,2
|
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Selected Statements of Income data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
—
|
|
—
|
|
3,033
|
|
3,148
|
|
434
|
|
488
|
|
(51
|
)
|
(49
|
)
|
3,416
|
|
3,587
|
|
Net income (loss)
|
352
|
|
391
|
|
347
|
|
376
|
|
75
|
|
(46
|
)
|
(422
|
)
|
(330
|
)
|
352
|
|
391
|
|
As at period end
|
RCI 1,2
|
RCCI 1,2
|
Non-guarantor
subsidiaries 1,2 |
Consolidating
adjustments 1,2 |
Total
|
|||||||||||||||
(unaudited)
(In millions of dollars) |
Mar. 31
2020 |
|
Dec. 31 2019
|
|
Mar. 31
2020 |
|
Dec. 31 2019
|
|
Mar. 31
2020 |
|
Dec. 31 2019
|
|
Mar. 31
2020 |
|
Dec. 31 2019
|
|
Mar. 31
2020 |
|
Dec. 31 2019
|
|
Selected Statements of Financial Position data measure:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
28,017
|
|
26,571
|
|
24,134
|
|
24,447
|
|
10,488
|
|
10,552
|
|
(56,296
|
)
|
(56,453
|
)
|
6,343
|
|
5,117
|
|
Non-current assets
|
32,196
|
|
30,048
|
|
26,540
|
|
26,342
|
|
3,830
|
|
3,710
|
|
(28,833
|
)
|
(28,198
|
)
|
33,733
|
|
31,902
|
|
Current liabilities
|
26,674
|
|
26,550
|
|
28,739
|
|
29,201
|
|
8,242
|
|
8,278
|
|
(57,907
|
)
|
(58,065
|
)
|
5,748
|
|
5,964
|
|
Non-current liabilities
|
20,559
|
|
17,869
|
|
4,872
|
|
4,938
|
|
136
|
|
138
|
|
(1,438
|
)
|
(1,306
|
)
|
24,129
|
|
21,639
|
|
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.
|
Rogers Communications Inc.
|
31
|
First Quarter 2020
|
•
|
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;
|
•
|
statements relating to plans we have implemented in response to the COVID-19 pandemic and its impact on us; and
|
•
|
all other statements that are not historical facts.
|
•
|
general economic and industry growth rates;
|
•
|
currency exchange rates and interest rates;
|
•
|
product pricing levels and competitive intensity;
|
•
|
subscriber growth;
|
•
|
pricing, usage, and churn rates;
|
•
|
changes in government regulation;
|
•
|
technology deployment;
|
•
|
availability of devices;
|
•
|
timing of new product launches;
|
•
|
content and equipment costs;
|
•
|
the integration of acquisitions;
|
•
|
industry structure and stability; and
|
•
|
the impact of the COVID-19 pandemic on our operations, liquidity, financial condition, or results.
|
•
|
regulatory changes;
|
•
|
technological changes;
|
•
|
economic, geopolitical, and other conditions affecting commercial activity;
|
•
|
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;
|
•
|
external threats, such as epidemics, pandemics, and other public health crises, natural disasters, or cyberattacks, among others; and
|
•
|
new interpretations and new accounting standards from accounting standards bodies.
|
Rogers Communications Inc.
|
32
|
First Quarter 2020
|
Rogers Communications Inc.
|
33
|
First Quarter 2020
|
Rogers Communications Inc.
|
1
|
First Quarter 2020
|
|
|
Three months ended March 31
|
|
|||
|
Note
|
|
2020
|
|
2019
|
|
|
|
|
|
|||
Revenue
|
4
|
|
3,416
|
|
3,587
|
|
|
|
|
|
|||
Operating expenses:
|
|
|
|
|||
Operating costs
|
5
|
|
2,081
|
|
2,252
|
|
Depreciation and amortization
|
|
639
|
|
609
|
|
|
Restructuring, acquisition and other
|
6
|
|
21
|
|
20
|
|
Finance costs
|
7
|
|
220
|
|
189
|
|
Other income
|
8
|
|
(14
|
)
|
(13
|
)
|
|
|
|
|
|||
Income before income tax expense
|
|
469
|
|
530
|
|
|
Income tax expense
|
|
117
|
|
139
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
352
|
|
391
|
|
|
|
|
|
|
|||
Earnings per share:
|
|
|
|
|||
Basic
|
9
|
|
$0.70
|
$0.76
|
||
Diluted
|
9
|
|
$0.68
|
$0.76
|
Rogers Communications Inc.
|
2
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
|
2020
|
|
2019
|
|
|
|
|
||
Net income for the period
|
352
|
|
391
|
|
|
|
|
||
Other comprehensive income:
|
|
|
||
|
|
|
||
Items that will not be reclassified to income:
|
|
|
||
Equity investments measured at fair value through other comprehensive income (FVTOCI):
|
|
|
||
(Decrease) increase in fair value
|
(288
|
)
|
312
|
|
Related income tax recovery (expense)
|
38
|
|
(44
|
)
|
|
|
|
||
Equity investments measured at FVTOCI
|
(250
|
)
|
268
|
|
|
|
|
||
Items that may subsequently be reclassified to income:
|
|
|
||
Cash flow hedging derivative instruments:
|
|
|
||
Unrealized gain (loss) in fair value of derivative instruments
|
2,248
|
|
(338
|
)
|
Reclassification to net income of (gain) loss on debt derivatives
|
(1,000
|
)
|
169
|
|
Reclassification to net income or property, plant and equipment of gain on expenditure derivatives
|
(20
|
)
|
(16
|
)
|
Reclassification to net income for accrued interest
|
(13
|
)
|
(12
|
)
|
Related income tax (expense) recovery
|
(291
|
)
|
64
|
|
|
|
|
||
Cash flow hedging derivative instruments
|
924
|
|
(133
|
)
|
|
|
|
||
Share of other comprehensive income (loss) of equity-accounted investments, net of tax
|
9
|
|
(3
|
)
|
|
|
|
||
Other comprehensive income for the period
|
683
|
|
132
|
|
|
|
|
||
Comprehensive income for the period
|
1,035
|
|
523
|
|
Rogers Communications Inc.
|
3
|
First Quarter 2020
|
|
|
As at
March 31 |
|
As at
December 31 |
|
|
|
Note
|
|
2020
|
|
2019
|
|
|
|
|
|
|||
|
|
|
|
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
|
1,936
|
|
494
|
|
|
Accounts receivable
|
|
1,984
|
|
2,304
|
|
|
Inventories
|
|
423
|
|
460
|
|
|
Current portion of contract assets
|
|
1,094
|
|
1,234
|
|
|
Other current assets
|
|
714
|
|
524
|
|
|
Current portion of derivative instruments
|
10
|
|
192
|
|
101
|
|
Total current assets
|
|
6,343
|
|
5,117
|
|
|
|
|
|
|
|||
Property, plant and equipment
|
|
14,049
|
|
13,934
|
|
|
Intangible assets
|
|
8,896
|
|
8,905
|
|
|
Investments
|
11
|
|
2,554
|
|
2,830
|
|
Derivative instruments
|
10
|
|
3,490
|
|
1,478
|
|
Contract assets
|
|
418
|
|
557
|
|
|
Other long-term assets
|
|
403
|
|
275
|
|
|
Goodwill
|
|
3,923
|
|
3,923
|
|
|
|
|
|
|
|||
Total assets
|
|
40,076
|
|
37,019
|
|
|
|
|
|
|
|||
Liabilities and shareholders' equity
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Short-term borrowings
|
12
|
|
966
|
|
2,238
|
|
Accounts payable and accrued liabilities
|
|
2,433
|
|
3,033
|
|
|
Income tax payable
|
|
232
|
|
48
|
|
|
Other current liabilities
|
|
126
|
|
141
|
|
|
Contract liabilities
|
|
279
|
|
224
|
|
|
Current portion of long-term debt
|
13
|
|
1,450
|
|
—
|
|
Current portion of lease liabilities
|
14
|
|
253
|
|
230
|
|
Current portion of derivative instruments
|
10
|
|
9
|
|
50
|
|
Total current liabilities
|
|
5,748
|
|
5,964
|
|
|
|
|
|
|
|
||
Provisions
|
|
37
|
|
36
|
|
|
Long-term debt
|
13
|
|
18,375
|
|
15,967
|
|
Derivative instruments
|
10
|
|
1
|
|
90
|
|
Lease liabilities
|
14
|
|
1,557
|
|
1,495
|
|
Other long-term liabilities
|
|
623
|
|
614
|
|
|
Deferred tax liabilities
|
|
3,536
|
|
3,437
|
|
|
Total liabilities
|
|
29,877
|
|
27,603
|
|
|
|
|
|
|
|
||
Shareholders' equity
|
15
|
|
10,199
|
|
9,416
|
|
|
|
|
|
|
||
Total liabilities and shareholders' equity
|
|
40,076
|
|
37,019
|
|
|
|
|
|
|
|||
Subsequent events
|
15
|
|
|
|
||
Contingent liabilities
|
18
|
|
|
|
Rogers Communications Inc.
|
4
|
First Quarter 2020
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Three months ended March 31, 2020
|
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, 2020
|
71
|
|
111,154
|
|
397
|
|
393,771
|
|
7,419
|
|
1,265
|
|
263
|
|
1
|
|
9,416
|
|
Net income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
352
|
|
—
|
|
—
|
|
—
|
|
352
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(250
|
)
|
—
|
|
—
|
|
(250
|
)
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
924
|
|
—
|
|
924
|
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
9
|
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(250
|
)
|
924
|
|
9
|
|
683
|
|
Comprehensive income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
352
|
|
(250
|
)
|
924
|
|
9
|
|
1,035
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(252
|
)
|
—
|
|
—
|
|
—
|
|
(252
|
)
|
Total transactions with shareholders
|
—
|
|
—
|
|
—
|
|
—
|
|
(252
|
)
|
—
|
|
—
|
|
—
|
|
(252
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, March 31, 2020
|
71
|
|
111,154
|
|
397
|
|
393,771
|
|
7,519
|
|
1,015
|
|
1,187
|
|
10
|
|
10,199
|
|
|
Class A
Voting Shares
|
Class B
Non-Voting Shares
|
|
|
|
|
|
|||||||||||
Three months ended March 31, 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, January 1, 2019
|
71
|
|
111,155
|
|
406
|
|
403,657
|
|
7,159
|
|
636
|
|
(125
|
)
|
9
|
|
8,156
|
|
Net income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
391
|
|
—
|
|
—
|
|
—
|
|
391
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||
FVTOCI investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
268
|
|
—
|
|
—
|
|
268
|
|
Derivative instruments accounted for as hedges, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(133
|
)
|
—
|
|
(133
|
)
|
Share of equity-accounted investments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
(3
|
)
|
Total other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
268
|
|
(133
|
)
|
(3
|
)
|
132
|
|
Comprehensive income for the period
|
—
|
|
—
|
|
—
|
|
—
|
|
391
|
|
268
|
|
(133
|
)
|
(3
|
)
|
523
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reclassification to retained earnings for disposition of FVTOCI investments
|
—
|
|
—
|
|
—
|
|
—
|
|
14
|
|
(14
|
)
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transactions with shareholders recorded directly in equity:
|
|
|
|
|
|
|
|
|
|
|||||||||
Repurchase of Class B Non-Voting Shares
|
—
|
|
—
|
|
(2
|
)
|
(2,164
|
)
|
(153
|
)
|
—
|
|
—
|
|
—
|
|
(155
|
)
|
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
(257
|
)
|
—
|
|
—
|
|
—
|
|
(257
|
)
|
Share class exchange
|
—
|
|
(1
|
)
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total transactions with shareholders
|
—
|
|
(1
|
)
|
(2
|
)
|
(2,163
|
)
|
(410
|
)
|
—
|
|
—
|
|
—
|
|
(412
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, March 31, 2019
|
71
|
|
111,154
|
|
404
|
|
401,494
|
|
7,154
|
|
890
|
|
(258
|
)
|
6
|
|
8,267
|
|
Rogers Communications Inc.
|
5
|
First Quarter 2020
|
|
|
Three months ended March 31
|
|
|||
|
Note
|
|
2020
|
|
2019
|
|
Operating activities:
|
|
|
|
|||
Net income for the period
|
|
352
|
|
391
|
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
|
639
|
|
609
|
|
|
Program rights amortization
|
|
22
|
|
19
|
|
|
Finance costs
|
7
|
|
220
|
|
189
|
|
Income tax expense
|
|
117
|
|
139
|
|
|
Post-employment benefits contributions, net of expense
|
|
12
|
|
8
|
|
|
Net change in contract asset balances
|
|
326
|
|
(9
|
)
|
|
Net change in financing receivable balances
|
4
|
|
(259
|
)
|
—
|
|
Other
|
|
9
|
|
30
|
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
|
1,438
|
|
1,376
|
|
|
Change in non-cash operating working capital items
|
19
|
|
(186
|
)
|
(13
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
|
1,252
|
|
1,363
|
|
|
Income taxes paid
|
|
(93
|
)
|
(145
|
)
|
|
Interest paid
|
|
(200
|
)
|
(220
|
)
|
|
|
|
|
|
|||
Cash provided by operating activities
|
|
959
|
|
998
|
|
|
|
|
|
|
|||
Investing activities:
|
|
|
|
|||
Capital expenditures
|
|
(593
|
)
|
(617
|
)
|
|
Additions to program rights
|
|
(15
|
)
|
(7
|
)
|
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
|
(129
|
)
|
(107
|
)
|
|
Other
|
|
(19
|
)
|
(3
|
)
|
|
|
|
|
|
|||
Cash used in investing activities
|
|
(756
|
)
|
(734
|
)
|
|
|
|
|
|
|||
Financing activities:
|
|
|
|
|||
Net (repayment of) proceeds received from short-term borrowings
|
12
|
|
(1,417
|
)
|
430
|
|
Net issuance (repayment) of long-term debt
|
13
|
|
2,885
|
|
(400
|
)
|
Net proceeds (payments) on settlement of debt derivatives and forward contracts
|
10
|
|
90
|
|
(11
|
)
|
Principal payments of lease liabilities
|
14
|
|
(50
|
)
|
(41
|
)
|
Transaction costs incurred
|
13
|
|
(16
|
)
|
—
|
|
Repurchase of Class B Non-Voting Shares
|
15
|
|
—
|
|
(136
|
)
|
Dividends paid
|
|
(253
|
)
|
(247
|
)
|
|
|
|
|
|
|||
Cash provided by (used in) financing activities
|
|
1,239
|
|
(405
|
)
|
|
|
|
|
|
|||
Change in cash and cash equivalents
|
|
1,442
|
|
(141
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
494
|
|
405
|
|
|
|
|
|
|
|||
Cash and cash equivalents, end of period
|
|
1,936
|
|
264
|
|
Rogers Communications Inc.
|
6
|
First Quarter 2020
|
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.
|
•
|
Changes to the Conceptual Framework, seeking to provide improvements to concepts surrounding various financial reporting considerations and existing IFRS standards.
|
•
|
Amendments to IAS 1, Presentation of Financial Statements and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, clarifying the definition of "material".
|
•
|
Amendments to IFRS 9, Financial Instruments (IFRS 9), IAS 39, Financial Instruments: Recognition and Measurement (IAS 39), and IFRS 7, Financial Instruments: Disclosures (IFRS 7), Interest Rate Benchmark Reform, detailing the
|
Rogers Communications Inc.
|
7
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
IFRS 17, Insurance Contracts, a replacement of IFRS 4, Insurance Contracts, that aims to provide consistency in the application of accounting for insurance contracts.
|
Three months ended March 31, 2020
|
Note
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate items and eliminations
|
|
Consolidated
totals
|
|
(In millions of dollars)
|
|||||||||||
|
|
|
|
|
|
|
|||||
Revenue
|
|
2,077
|
|
973
|
|
412
|
|
(46
|
)
|
3,416
|
|
Operating costs
|
|
1,051
|
|
520
|
|
497
|
|
13
|
|
2,081
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
1,026
|
|
453
|
|
(85
|
)
|
(59
|
)
|
1,335
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
|
|
|
|
639
|
|
||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
21
|
|
||||
Finance costs
|
7
|
|
|
|
|
220
|
|
||||
Other income
|
8
|
|
|
|
|
(14
|
)
|
||||
|
|
|
|
|
|
|
|||||
Income before income taxes
|
|
|
|
|
|
469
|
|
Three months ended March 31, 2019
|
Note
|
Wireless
|
|
Cable
|
|
Media
|
|
Corporate items and eliminations
|
|
Consolidated
totals
|
|
(In millions of dollars)
|
|||||||||||
|
|
|
|
|
|
|
|||||
Revenue
|
|
2,189
|
|
976
|
|
468
|
|
(46
|
)
|
3,587
|
|
Operating costs
|
|
1,174
|
|
531
|
|
552
|
|
(5
|
)
|
2,252
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
1,015
|
|
445
|
|
(84
|
)
|
(41
|
)
|
1,335
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
|
|
|
|
609
|
|
||||
Restructuring, acquisition and other
|
6
|
|
|
|
|
20
|
|
||||
Finance costs
|
7
|
|
|
|
|
189
|
|
||||
Other income
|
8
|
|
|
|
|
(13
|
)
|
||||
|
|
|
|
|
|
|
|||||
Income before income taxes
|
|
|
|
|
|
530
|
|
Rogers Communications Inc.
|
8
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Wireless
|
|
|
||
Service revenue
|
1,712
|
|
1,747
|
|
Equipment revenue
|
365
|
|
442
|
|
|
|
|
||
Total Wireless
|
2,077
|
|
2,189
|
|
|
|
|
||
Cable
|
|
|
||
Service revenue
|
971
|
|
974
|
|
Equipment revenue
|
2
|
|
2
|
|
|
|
|
||
Total Cable
|
973
|
|
976
|
|
|
|
|
||
Total Media
|
412
|
|
468
|
|
|
|
|
||
Corporate items and intercompany eliminations
|
(46
|
)
|
(46
|
)
|
|
|
|
||
Total revenue
|
3,416
|
|
3,587
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Current financing receivables
|
214
|
|
72
|
|
Long-term financing receivables
|
157
|
|
40
|
|
|
|
|
||
Total financing receivables
|
371
|
|
112
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Cost of equipment sales
|
378
|
|
506
|
|
Merchandise for resale
|
54
|
|
56
|
|
Other external purchases
|
1,132
|
|
1,147
|
|
Employee salaries, benefits, and stock-based compensation
|
517
|
|
543
|
|
|
|
|
||
Total operating costs
|
2,081
|
|
2,252
|
|
Rogers Communications Inc.
|
9
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
Note
|
2020
|
|
2019
|
|
|
|
|
|
||
Interest on borrowings 1
|
|
192
|
|
173
|
|
Interest on lease liabilities
|
14
|
17
|
|
14
|
|
Interest on post-employment benefits liability
|
|
3
|
|
3
|
|
Loss (gain) on foreign exchange
|
|
132
|
|
(45
|
)
|
Change in fair value of derivative instruments
|
|
(126
|
)
|
44
|
|
Capitalized interest
|
|
(5
|
)
|
(5
|
)
|
Other
|
|
7
|
|
5
|
|
|
|
|
|
||
Total finance costs
|
|
220
|
|
189
|
|
1
|
Interest on borrowings includes interest on short-term borrowings and on long-term debt.
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Income from associates and joint ventures
|
(3
|
)
|
(6
|
)
|
Other investment income
|
(11
|
)
|
(7
|
)
|
|
|
|
||
Total other income
|
(14
|
)
|
(13
|
)
|
|
Three months ended March 31
|
|
||
(In millions of dollars, except per share amounts)
|
2020
|
|
2019
|
|
|
|
|
||
Numerator (basic) - Net income for the period
|
352
|
|
391
|
|
|
|
|
||
Denominator - Number of shares (in millions):
|
|
|
||
Weighted average number of shares outstanding - basic
|
505
|
|
514
|
|
Effect of dilutive securities (in millions):
|
|
|
||
Employee stock options and restricted share units
|
1
|
|
2
|
|
|
|
|
||
Weighted average number of shares outstanding - diluted
|
506
|
|
516
|
|
|
|
|
||
Earnings per share
|
|
|
||
Basic
|
$0.70
|
$0.76
|
||
Diluted
|
$0.68
|
$0.76
|
Rogers Communications Inc.
|
10
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2020
|
|
|
Three months ended March 31, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Credit facilities
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
970
|
|
1.428
|
|
1,385
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Commercial paper program
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
2,678
|
|
1.328
|
|
3,556
|
|
|
3,858
|
|
1.330
|
|
5,132
|
|
Debt derivatives settled
|
3,678
|
|
1.325
|
|
4,873
|
|
|
3,536
|
|
1.329
|
|
4,701
|
|
Net cash received (paid)
|
|
|
90
|
|
|
|
|
(11
|
)
|
|
Three months ended March 31, 2020
|
|
|
Three months ended March 31, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange rate
|
|
Notional
(Cdn$) |
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Debt derivatives entered
|
41
|
|
1.440
|
|
59
|
|
|
—
|
|
—
|
|
—
|
|
Debt derivatives settled
|
6
|
|
1.318
|
|
8
|
|
|
—
|
|
—
|
|
—
|
|
Rogers Communications Inc.
|
11
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2020
|
|
|
Three months ended March 31, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
Notional
(US$)
|
|
Exchange
rate
|
|
Notional
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Expenditure derivatives entered
|
342
|
|
1.339
|
|
458
|
|
|
240
|
|
1.304
|
|
313
|
|
Expenditure derivatives settled
|
225
|
|
1.298
|
|
292
|
|
|
210
|
|
1.243
|
|
261
|
|
Rogers Communications Inc.
|
12
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
•
|
financial assets and financial liabilities in Level 1 are valued by referring to quoted prices in active markets for identical assets and liabilities;
|
•
|
financial assets and financial liabilities in Level 2 are valued using inputs based on observable market data, either directly or indirectly, other than the quoted prices; and
|
•
|
Level 3 valuations are based on inputs that are not based on observable market data.
|
|
Carrying value
|
|
Fair value (Level 1)
|
|
Fair value (Level 2)
|
|
||||||
|
As at
Mar. 31 |
|
As at
Dec. 31 |
|
As at
Mar. 31 |
|
As at
Dec. 31 |
|
As at
Mar. 31 |
|
As at
Dec. 31 |
|
(In millions of dollars)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Financial assets
|
|
|
|
|
|
|
||||||
Investments, measured at FVTOCI:
|
|
|
|
|
|
|
||||||
Investments in publicly traded companies
|
1,539
|
|
1,831
|
|
1,539
|
|
1,831
|
|
—
|
|
—
|
|
Derivatives:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
3,532
|
|
1,508
|
|
—
|
|
—
|
|
3,532
|
|
1,508
|
|
Debt derivatives not accounted for as cash flow hedges
|
15
|
|
—
|
|
—
|
|
—
|
|
15
|
|
—
|
|
Expenditure derivatives accounted for as cash flow hedges
|
103
|
|
16
|
|
—
|
|
—
|
|
103
|
|
16
|
|
Equity derivatives not accounted for as cash flow hedges
|
32
|
|
55
|
|
—
|
|
—
|
|
32
|
|
55
|
|
|
|
|
|
|
|
|
||||||
Total financial assets
|
5,221
|
|
3,410
|
|
1,539
|
|
1,831
|
|
3,682
|
|
1,579
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities
|
|
|
|
|
|
|
||||||
Derivatives:
|
|
|
|
|
|
|
||||||
Debt derivatives accounted for as cash flow hedges
|
1
|
|
96
|
|
—
|
|
—
|
|
1
|
|
96
|
|
Debt derivatives not accounted for as cash flow hedges
|
9
|
|
29
|
|
—
|
|
—
|
|
9
|
|
29
|
|
Expenditure derivatives accounted for as cash flow hedges
|
—
|
|
15
|
|
—
|
|
—
|
|
—
|
|
15
|
|
|
|
|
|
|
|
|
||||||
Total financial liabilities
|
10
|
|
140
|
|
—
|
|
—
|
|
10
|
|
140
|
|
|
As at March 31, 2020
|
|
As at December 31, 2019
|
|
||||
(In millions of dollars)
|
Carrying amount
|
|
Fair value 1
|
|
Carrying amount
|
|
Fair value 1
|
|
|
|
|
|
|
||||
Long-term debt (including current portion)
|
19,825
|
|
21,745
|
|
15,967
|
|
18,354
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Investments in:
|
|
|
||
Publicly traded companies
|
1,539
|
|
1,831
|
|
Private companies
|
111
|
|
107
|
|
Investments, measured at FVTOCI
|
1,650
|
|
1,938
|
|
Investments, associates and joint ventures
|
904
|
|
892
|
|
|
|
|
||
Total investments
|
2,554
|
|
2,830
|
|
Rogers Communications Inc.
|
13
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Accounts receivable securitization program
|
650
|
|
650
|
|
US commercial paper program
|
316
|
|
1,588
|
|
|
|
|
||
Total short-term borrowings
|
966
|
|
2,238
|
|
|
|
Three months ended March 31, 2020
|
|
|
|
Three months ended March 31, 2019
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
Proceeds received from US commercial paper
|
2,678
|
|
1.328
|
|
3,556
|
|
|
3,858
|
|
1.330
|
|
5,132
|
|
Repayment of US commercial paper
|
(3,685
|
)
|
1.350
|
|
(4,973
|
)
|
|
(3,545
|
)
|
1.326
|
|
(4,702
|
)
|
Net (repayment of) proceeds received from US commercial paper
|
(1,007
|
)
|
1.407
|
|
(1,417
|
)
|
|
313
|
|
1.374
|
|
430
|
|
|
|
|
|
|
|
|
|
||||||
Net (repayment of) proceeds received from short-term borrowings
|
|
|
(1,417
|
)
|
|
|
|
430
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Trade accounts receivable sold to buyer as security
|
1,157
|
|
1,359
|
|
Short-term borrowings from buyer
|
(650
|
)
|
(650
|
)
|
|
|
|
||
Overcollateralization
|
507
|
|
709
|
|
|
|
Three months ended March 31, 2020
|
|
|
|
Three months ended March 31, 2019
|
|
||||||
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(In millions of dollars, except exchange rates)
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
||||||
US commercial paper program, beginning of period
|
1,223
|
|
1.298
|
|
1,588
|
|
|
1,178
|
|
1.362
|
|
1,605
|
|
Net (repayment of) proceeds received from US commercial paper
|
(1,007
|
)
|
1.407
|
|
(1,417
|
)
|
|
313
|
|
1.374
|
|
430
|
|
Discounts on issuance 1
|
7
|
|
1.429
|
|
10
|
|
|
4
|
|
1.500
|
|
6
|
|
Loss (gain) on foreign exchange 1
|
|
|
135
|
|
|
|
|
(43
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
US commercial paper program, end of period
|
223
|
|
1.417
|
|
316
|
|
|
1,495
|
|
1.336
|
|
1,998
|
|
Rogers Communications Inc.
|
14
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
|
|
Principal
amount
|
|
Interest
rate
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars, except interest rates)
|
Due date
|
|
2020
|
|
2019
|
|
||||
|
|
|
|
|
|
|
||||
Bank credit facilities (US$ portion)
|
2022
|
US
|
970
|
|
Floating
|
|
1,376
|
|
—
|
|
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
|
%
|
709
|
|
649
|
|
Senior notes
|
2023
|
US
|
850
|
|
4.100
|
%
|
1,206
|
|
1,104
|
|
Senior notes
|
2024
|
|
600
|
|
4.000
|
%
|
600
|
|
600
|
|
Senior notes
|
2025
|
US
|
700
|
|
3.625
|
%
|
993
|
|
909
|
|
Senior notes
|
2026
|
US
|
500
|
|
2.900
|
%
|
709
|
|
649
|
|
Senior notes
|
2027
|
|
1,500
|
|
3.650
|
%
|
1,500
|
|
—
|
|
Senior notes
|
2029
|
|
1,000
|
|
3.250
|
%
|
1,000
|
|
1,000
|
|
Senior debentures 1
|
2032
|
US
|
200
|
|
8.750
|
%
|
284
|
|
260
|
|
Senior notes
|
2038
|
US
|
350
|
|
7.500
|
%
|
497
|
|
455
|
|
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
|
%
|
709
|
|
649
|
|
Senior notes
|
2043
|
US
|
650
|
|
5.450
|
%
|
922
|
|
844
|
|
Senior notes
|
2044
|
US
|
1,050
|
|
5.000
|
%
|
1,490
|
|
1,365
|
|
Senior notes
|
2048
|
US
|
750
|
|
4.300
|
%
|
1,064
|
|
973
|
|
Senior notes
|
2049
|
US
|
1,250
|
|
4.350
|
%
|
1,773
|
|
1,624
|
|
Senior notes
|
2049
|
US
|
1,000
|
|
3.700
|
%
|
1,419
|
|
1,299
|
|
|
|
|
|
|
20,001
|
|
16,130
|
|
||
Deferred transaction costs and discounts
|
|
|
|
|
(176
|
)
|
(163
|
)
|
||
Less current portion
|
|
|
|
|
(1,450
|
)
|
—
|
|
||
|
|
|
|
|
|
|
||||
Total long-term debt
|
|
|
|
|
18,375
|
|
15,967
|
|
1
|
Senior debentures originally issued by Rogers Cable Inc. which are unsecured obligations of RCI and for which RCCI was an unsecured guarantor as at March 31, 2020 and December 31, 2019.
|
|
Three months ended March 31, 2020
|
|
|
Three months ended March 31, 2019
|
|
||||||||
(In millions of dollars, except exchange rates)
|
Notional
|
|
Exchange
|
|
Notional
|
|
|
Notional
|
|
Exchange
|
|
Notional
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
(US$)
|
|
rate
|
|
(Cdn$)
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit facility borrowings (US$)
|
970
|
|
1.428
|
|
1,385
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Net borrowings under credit facilities
|
|
|
1,385
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||
Senior notes issuances (Cdn$)
|
|
|
1,500
|
|
|
|
|
—
|
|
||||
Senior note repayments (Cdn$)
|
|
|
—
|
|
|
|
|
(400
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of senior notes
|
|
|
1,500
|
|
|
|
|
(400
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
Net issuance (repayment) of long-term debt
|
|
|
2,885
|
|
|
|
|
(400
|
)
|
Rogers Communications Inc.
|
15
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Long-term debt net of transaction costs, beginning of period
|
15,967
|
|
14,290
|
|
Net issuance (repayment) of long-term debt
|
2,885
|
|
(400
|
)
|
Loss (gain) on foreign exchange
|
986
|
|
(169
|
)
|
Deferred transaction costs incurred
|
(16
|
)
|
—
|
|
Amortization of deferred transaction costs
|
3
|
|
3
|
|
|
|
|
||
Long-term debt net of transaction costs, end of period
|
19,825
|
|
13,724
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Lease liabilities, beginning of period
|
1,725
|
|
1,545
|
|
Net additions
|
134
|
|
52
|
|
Interest on lease liabilities
|
17
|
|
14
|
|
Interest payments on lease liabilities
|
(17
|
)
|
(10
|
)
|
Principal payments of lease liabilities
|
(50
|
)
|
(41
|
)
|
Other
|
1
|
|
(2
|
)
|
|
|
|
||
Lease liabilities, end of period
|
1,810
|
|
1,558
|
|
Rogers Communications Inc.
|
16
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Date declared
|
Date paid
|
Dividend per share (dollars)
|
|
|
|
|
|
January 22, 2020
|
April 1, 2020
|
0.50
|
|
|
|
|
|
January 24, 2019
|
April 1, 2019
|
0.50
|
|
April 18, 2019
|
July 2, 2019
|
0.50
|
|
June 5, 2019
|
October 1, 2019
|
0.50
|
|
October 23, 2019
|
January 2, 2020
|
0.50
|
|
|
|
2.00
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Stock options
|
(7
|
)
|
5
|
|
Restricted share units
|
8
|
|
16
|
|
Deferred share units
|
(8
|
)
|
9
|
|
Equity derivative effect, net of interest receipt
|
25
|
|
(13
|
)
|
|
|
|
||
Total stock-based compensation expense
|
18
|
|
17
|
|
Rogers Communications Inc.
|
17
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31, 2020
|
|
Three months ended March 31, 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
|
3,154,795
|
|
$61.82
|
|
2,719,612
|
|
$53.22
|
|
Granted
|
1,598,590
|
|
$62.56
|
|
1,040,170
|
|
$73.00
|
|
Exercised
|
(17,230
|
)
|
$54.80
|
|
(672,350
|
)
|
$46.29
|
|
Forfeited
|
(9,521
|
)
|
$58.45
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|||
Outstanding, end of period
|
4,726,634
|
|
$62.10
|
|
3,087,432
|
|
$61.39
|
|
|
|
|
|
|
|
|||
Exercisable, end of period
|
1,426,207
|
|
$56.48
|
|
902,782
|
|
$50.63
|
|
Three months ended March 31
|
|
||
(in number of units)
|
2020
|
|
2019
|
|
|
|
|
||
Outstanding, beginning of period
|
2,472,774
|
|
2,218,925
|
|
Granted and reinvested dividends
|
869,790
|
|
728,978
|
|
Exercised
|
(420,217
|
)
|
(497,409
|
)
|
Forfeited
|
(39,364
|
)
|
(25,513
|
)
|
|
|
|
||
Outstanding, end of period
|
2,882,983
|
|
2,424,981
|
|
Rogers Communications Inc.
|
18
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(in number of units)
|
2020
|
|
2019
|
|
|
|
|
||
Outstanding, beginning of period
|
1,741,884
|
|
2,004,440
|
|
Granted and reinvested dividends
|
18,424
|
|
36,868
|
|
Exercised
|
(92,677
|
)
|
(142,629
|
)
|
Forfeited
|
(9,477
|
)
|
(8,294
|
)
|
|
|
|
||
Outstanding, end of period
|
1,658,154
|
|
1,890,385
|
|
•
|
The Hon. David R. Peterson, P.C., Q.C., the non-executive chairman emeritus of Cassels Brock and Blackwell LLP, a law firm that provides legal services to us; and
|
•
|
Isabelle Marcoux, C.M., the chair of the board of Transcontinental Inc., a company that provides printing services to us.
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Printing and legal services 1
|
1
|
|
1
|
|
1
|
The amount paid for legal services is nominal.
|
Rogers Communications Inc.
|
19
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
Rogers Communications Inc.
|
20
|
First Quarter 2020
|
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Accounts receivable
|
266
|
|
75
|
|
Inventories
|
36
|
|
5
|
|
Other current assets
|
(65
|
)
|
(45
|
)
|
Accounts payable and accrued liabilities
|
(439
|
)
|
(105
|
)
|
Contract and other liabilities
|
16
|
|
57
|
|
|
|
|
||
Total change in non-cash operating working capital items
|
(186
|
)
|
(13
|
)
|
Rogers Communications Inc.
|
21
|
First Quarter 2020
|
|
Exhibit 99.3
|
•
|
World-leading networks and a strong balance sheet position Rogers Communications well to help Canadians manage through COVID-19
|
•
|
Network traffic up over 50% as businesses and consumers shift to work, learn, and socialize from home
|
•
|
Free cash flow of $462 million, up 14%, with solid liquidity position of $3.8 billion
|
•
|
Grew Wireless adjusted EBITDA by 1% and margin by 300 basis points despite 2% service revenue decrease
|
•
|
Suspended roaming and long distance fees for consumers
|
•
|
Postpaid subscribers down as we closed retail locations and reduced promotional activity to protect employees and discourage customer trips to stores
|
•
|
Monthly postpaid churn of 0.93%
|
•
|
Media results reflect the suspension of all live professional sports broadcasting
|
•
|
Solid Cable results and strong network performance
|
•
|
Suspended all overage fees for home Internet customers
|
•
|
Added 17,000 Internet nets and 2,000 net new customer relationships
|
•
|
Grew adjusted EBITDA by 2%, revenue in line with 2019
|
•
|
Paid $253 million in dividends to shareholders and declared a quarterly dividend of $0.50 per share
|
•
|
Withdrawing 2020 financial guidance given uncertainty associated with the impacts of COVID-19; continued strong free cash flow remains a priority in 2020
|
|
Three months ended March 31
|
|
||||||
(In millions of Canadian dollars, except per share amounts, unaudited)
|
2020
|
|
2019
|
|
% Chg
|
|
||
|
|
|
|
|||||
Total revenue
|
3,416
|
|
3,587
|
|
(5
|
)
|
||
Total service revenue 1
|
3,049
|
|
3,143
|
|
(3
|
)
|
||
Adjusted EBITDA 2
|
1,335
|
|
1,335
|
|
—
|
|
||
Net income
|
352
|
|
391
|
|
(10
|
)
|
||
Adjusted net income 2
|
367
|
|
405
|
|
(9
|
)
|
||
|
|
|
|
|||||
Diluted earnings per share
|
|
$0.68
|
|
|
$0.76
|
|
(11
|
)
|
Adjusted diluted earnings per share 2
|
|
$0.71
|
|
|
$0.78
|
|
(9
|
)
|
|
|
|
|
|||||
Cash provided by operating activities
|
959
|
|
998
|
|
(4
|
)
|
||
Free cash flow 2
|
462
|
|
405
|
|
14
|
|
1
|
As defined. See "Key Performance Indicators".
|
2
|
As defined. See "Non-GAAP Measures and Related Performance Measures". These measures should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies.
|
Rogers Communications Inc.
|
1
|
First Quarter 2020
|
•
|
Waived pay-per-use international roaming fees in all available destinations until April 30 to help our customers return home from abroad.
|
•
|
Waived long distance voice calling fees across Canada from mid-March until at least the end of June.
|
•
|
Implemented flexible payment options for customers facing financial uncertainty as a result of the COVID-19 pandemic, with no account suspensions or disconnections until at least the end of June.
|
•
|
Increased digital adoption by six points sequentially to 84%, with many self-serve options during the public health crisis.
|
•
|
Introduced an Ignite™ self-installation program as a safe, easy, no-contact way for our customers to install our Ignite Internet™ and Ignite TV services; 100% of our installations in April have been performed this way.
|
•
|
Turned on Canada’s first 5G network in downtown Vancouver, Toronto, Ottawa, and Montreal using 2.5 GHz spectrum and brought exclusive 5G service to Rogers Infinite™ customers on the new Samsung Galaxy S20 5G series.
|
•
|
Became a founding member of the 5G Future Forum, focused on developing interoperable 5G standards across key geographic regions, including the Americas, Asia-Pacific, and Europe.
|
•
|
Continued to add capacity and manage traffic where needed to ensure customers stay connected during the COVID-19 pandemic, with total traffic on our world-class networks up by over 50% as more people started working from home.
|
•
|
Launched and added capacity for government 1-800 numbers to serve citizens during the public health crisis and enabled temporary COVID-19 health assessment centres.
|
•
|
Launched free access for Rogers TV customers to a rotating selection of channels from mid-March until at least the end of June.
|
•
|
Temporarily removed data usage caps for customers on limited home Internet plans from mid-March until at least the end of June so they can stream, surf, and connect without worry.
|
•
|
Continued news reporting across our media assets with radio and television broadcasting as an essential service; created original content and programming for Sportsnet viewers given the suspension of live sports during the COVID-19 pandemic.
|
•
|
Expanded our consolidated adjusted EBITDA margin by 190 basis points, to 39.1%.
|
•
|
Grew free cash flow by 14%.
|
•
|
Ended the quarter with total available liquidity of $3.8 billion.
|
•
|
Accelerated progress during the COVID-19 pandemic on our strategic priority to offer increased flexibility to our employees through work-from-home programs across the company, including approximately 7,000 customer solution specialists.
|
•
|
Delivered enhanced programs and employee communications to ensure employees are supported and informed during the public health crisis.
|
Rogers Communications Inc.
|
2
|
First Quarter 2020
|
•
|
Launched a national development planning campaign and an enhanced internal learning platform for all employees.
|
•
|
Launched an awareness campaign across our media and digital assets to raise money for Food Banks Canada to address acute food shortages during the COVID-19 pandemic; donated more than one million meals through a corporate donation and employee contributions.
|
•
|
Partnered with Big Brothers Big Sisters of Canada to donate smartphones in collaboration with Samsung and provide six months of free service to vulnerable youth to help them stay connected to mentors.
|
•
|
Partnered with Women’s Shelters of Canada to provide emergency devices and advertising space across our media and digital assets to promote Sheltersafe.ca for women at risk during the public health crisis.
|
•
|
Expanded Connected for Success, our low-cost Internet program, to reach over 250,000 households with 340 housing partners.
|
Rogers Communications Inc.
|
3
|
First Quarter 2020
|
Rogers Communications Inc.
|
4
|
First Quarter 2020
|
•
|
April 22, 2020
|
•
|
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
|
First Quarter 2020
|
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.
|
6
|
First Quarter 2020
|
Rogers Communications Inc.
|
7
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||||
(In millions of dollars, except margins and per share amounts)
|
2020
|
|
2019
|
|
% Chg
|
|
||
|
|
|
|
|||||
Revenue
|
|
|
|
|||||
Wireless
|
2,077
|
|
2,189
|
|
(5
|
)
|
||
Cable
|
973
|
|
976
|
|
—
|
|
||
Media
|
412
|
|
468
|
|
(12
|
)
|
||
Corporate items and intercompany eliminations
|
(46
|
)
|
(46
|
)
|
—
|
|
||
Revenue
|
3,416
|
|
3,587
|
|
(5
|
)
|
||
Total service revenue 1
|
3,049
|
|
3,143
|
|
(3
|
)
|
||
|
|
|
|
|||||
Adjusted EBITDA 2
|
|
|
|
|||||
Wireless
|
1,026
|
|
1,015
|
|
1
|
|
||
Cable
|
453
|
|
445
|
|
2
|
|
||
Media
|
(85
|
)
|
(84
|
)
|
1
|
|
||
Corporate items and intercompany eliminations
|
(59
|
)
|
(41
|
)
|
44
|
|
||
Adjusted EBITDA 2
|
1,335
|
|
1,335
|
|
—
|
|
||
Adjusted EBITDA margin 2
|
39.1
|
%
|
37.2
|
%
|
1.9
|
pts
|
||
|
|
|
|
|||||
Net income
|
352
|
|
391
|
|
(10
|
)
|
||
Basic earnings per share
|
|
$0.70
|
|
|
$0.76
|
|
(8
|
)
|
Diluted earnings per share
|
|
$0.68
|
|
|
$0.76
|
|
(11
|
)
|
|
|
|
|
|||||
Adjusted net income 2
|
367
|
|
405
|
|
(9
|
)
|
||
Adjusted basic earnings per share 2
|
|
$0.73
|
|
|
$0.79
|
|
(8
|
)
|
Adjusted diluted earnings per share 2
|
|
$0.71
|
|
|
$0.78
|
|
(9
|
)
|
|
|
|
|
|||||
Capital expenditures
|
593
|
|
617
|
|
(4
|
)
|
||
Cash provided by operating activities
|
959
|
|
998
|
|
(4
|
)
|
||
Free cash flow 2
|
462
|
|
405
|
|
14
|
|
2
|
Adjusted EBITDA, adjusted net income, 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 and Related Performance Measures" for information about these measures, including how we calculate them and the ratios in which they are used.
|
Rogers Communications Inc.
|
8
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
|
|
|
|||
Service revenue
|
1,712
|
|
1,747
|
|
(2
|
)
|
Equipment revenue
|
365
|
|
442
|
|
(17
|
)
|
Revenue
|
2,077
|
|
2,189
|
|
(5
|
)
|
|
|
|
|
|||
Operating expenses
|
|
|
|
|||
Cost of equipment
|
374
|
|
501
|
|
(25
|
)
|
Other operating expenses
|
677
|
|
673
|
|
1
|
|
Operating expenses
|
1,051
|
|
1,174
|
|
(10
|
)
|
|
|
|
|
|||
Adjusted EBITDA
|
1,026
|
|
1,015
|
|
1
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
49.4
|
%
|
46.4
|
%
|
3.0
|
pts
|
Capital expenditures
|
281
|
|
282
|
|
—
|
|
|
Three months ended March 31
|
|
|||||
(In thousands, except churn, blended ABPU, and blended ARPU)
|
2020
|
|
2019
|
|
Chg
|
|
|
|
|
|
|
||||
Postpaid
|
|
|
|
||||
Gross additions
|
257
|
|
295
|
|
(38
|
)
|
|
Net (losses) additions
|
(6
|
)
|
23
|
|
(29
|
)
|
|
Total postpaid subscribers 2
|
9,432
|
|
9,180
|
|
252
|
|
|
Churn (monthly)
|
0.93
|
%
|
0.99
|
%
|
(0.06
|
pts)
|
|
Prepaid
|
|
|
|
||||
Gross additions
|
141
|
|
171
|
|
(30
|
)
|
|
Net losses
|
(66
|
)
|
(56
|
)
|
(10
|
)
|
|
Total prepaid subscribers 2
|
1,336
|
|
1,570
|
|
(234
|
)
|
|
Churn (monthly)
|
4.98
|
%
|
4.69
|
%
|
0.29
|
pts
|
|
Blended ABPU (monthly)
|
|
$65.14
|
|
$64.62
|
|
$0.52
|
|
Blended ARPU (monthly)
|
|
$52.85
|
|
$54.13
|
|
($1.28
|
)
|
1
|
Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. See "Key Performance Indicators".
|
2
|
As at end of period.
|
•
|
a decrease in overage revenue as a result of strong customer adoption of our Rogers Infinite unlimited data plans; and
|
•
|
lower roaming revenue associated with lower overall roaming activity due to less travel and as we provided these services to our customers at no cost starting March 16; partially offset by
|
•
|
a larger postpaid subscriber base.
|
Rogers Communications Inc.
|
9
|
First Quarter 2020
|
•
|
lower gross additions and device upgrades by existing customers, in part due to the COVID-19 pandemic; partially offset by
|
•
|
a shift in the product mix of device sales towards higher-value devices.
|
Rogers Communications Inc.
|
10
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
|
|
|
|||
Service revenue
|
971
|
|
974
|
|
—
|
|
Equipment revenue
|
2
|
|
2
|
|
—
|
|
Revenue
|
973
|
|
976
|
|
—
|
|
|
|
|
|
|||
Operating expenses
|
520
|
|
531
|
|
(2
|
)
|
|
|
|
|
|||
Adjusted EBITDA
|
453
|
|
445
|
|
2
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
46.6
|
%
|
45.6
|
%
|
1.0
|
pts
|
Capital expenditures
|
251
|
|
289
|
|
(13
|
)
|
|
Three months ended March 31
|
|
||||
(In thousands, except ARPA and penetration)
|
2020
|
|
2019
|
|
Chg
|
|
|
|
|
|
|||
Internet
|
|
|
|
|||
Net additions
|
17
|
|
14
|
|
3
|
|
Total Internet subscribers 2
|
2,551
|
|
2,444
|
|
107
|
|
Ignite TV
|
|
|
|
|||
Net additions
|
91
|
|
47
|
|
44
|
|
Total Ignite TV subscribers 2
|
417
|
|
89
|
|
328
|
|
|
|
|
|
|||
Homes passed 2
|
4,500
|
|
4,381
|
|
119
|
|
Customer relationships
|
|
|
|
|||
Net additions (losses)
|
2
|
|
(1
|
)
|
3
|
|
Total customer relationships 2
|
2,512
|
|
2,488
|
|
24
|
|
ARPA (monthly)
|
$128.91
|
|
$130.51
|
|
($1.60
|
)
|
|
|
|
|
|||
Penetration 2
|
55.8
|
%
|
56.8
|
%
|
(1.0
|
pts)
|
1
|
Subscriber results are key performance indicators. See "Key Performance Indicators".
|
2
|
As at end of period.
|
•
|
a 1% decrease in ARPA as a result of bundled pricing constructs that provide home phone for a lower incremental cost, partially offset by the impact of Internet and television service pricing changes in 2019; offset by
|
•
|
the increase in total customer relationships over the past year, due to growth in our Internet and Ignite TV subscriber bases, partially offset by declines in our legacy television and home phone subscriber bases; and
|
•
|
the movement of Internet customers to higher speed and usage tiers in our Ignite Internet offerings.
|
Rogers Communications Inc.
|
11
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except margins)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Revenue
|
412
|
|
468
|
|
(12
|
)
|
Operating expenses
|
497
|
|
552
|
|
(10
|
)
|
|
|
|
|
|||
Adjusted EBITDA
|
(85
|
)
|
(84
|
)
|
1
|
|
|
|
|
|
|||
Adjusted EBITDA margin
|
(20.6
|
)%
|
(17.9
|
)%
|
(2.7
|
pts)
|
Capital expenditures
|
12
|
|
22
|
|
(45
|
)
|
•
|
lower sports revenue, including at the Toronto Blue Jays, primarily as a result of the suspension of major sports leagues due to COVID-19;
|
•
|
lower advertising revenue as a result of softness in the advertising market due to COVID-19; and
|
•
|
the sale of our publishing business in April 2019.
|
•
|
the impact of Toronto Blue Jays player trades in 2019;
|
•
|
lower sports-related costs, including lower programming costs and lower Toronto Blue Jays player salaries and game day costs, in line with the lower revenue discussed above; and
|
•
|
lower publishing-related costs due to the sale of the business.
|
Rogers Communications Inc.
|
12
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except capital intensity)
|
2020
|
|
2019
|
|
% Chg
|
|
|
|
|
|
|||
Wireless
|
281
|
|
282
|
|
—
|
|
Cable
|
251
|
|
289
|
|
(13
|
)
|
Media
|
12
|
|
22
|
|
(45
|
)
|
Corporate
|
49
|
|
24
|
|
104
|
|
|
|
|
|
|||
Capital expenditures 1
|
593
|
|
617
|
|
(4
|
)
|
|
|
|
|
|||
Capital intensity 2
|
17.4
|
%
|
17.2
|
%
|
0.2
|
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.
|
13
|
First Quarter 2020
|
•
|
the risk of a material reduction in demand for our products and services due to job losses and associated financial hardship, which may lead to a decline in revenue as a result of:
|
•
|
lower Wireless subscriber activity, including lower equipment revenue;
|
•
|
the suspension of major sports leagues and associated programming;
|
•
|
services provided to our customers at no cost, such as long distance calling, roaming, and free television channels;
|
•
|
lower roaming and overage revenue as customers are unable to travel and increasingly stay home; and
|
•
|
customers downgrading or cancelling their services;
|
•
|
an increase in delinquent or unpaid bills, which may lead to increased bad debt expense;
|
•
|
issues delivering certain products and services, or maintaining or upgrading our networks, due to store closures and supply chain disruptions;
|
•
|
additional capital expenditures to maintain or expand our networks in order to accommodate substantially increased network usage; and
|
•
|
higher costs for new capital.
|
Rogers Communications Inc.
|
14
|
First Quarter 2020
|
Rogers Communications Inc.
|
15
|
First Quarter 2020
|
•
|
subscriber counts;
|
•
|
Wireless;
|
•
|
Cable; and
|
•
|
homes passed (Cable);
|
•
|
Wireless subscriber churn (churn);
|
•
|
Wireless blended average billings per user (ABPU);
|
•
|
Wireless blended average revenue per user
|
•
|
Cable average revenue per account (ARPA);
|
•
|
Cable customer relationships;
|
•
|
Cable market penetration (penetration);
|
•
|
capital intensity; and
|
•
|
total service revenue.
|
•
|
Cable Ignite TV and Internet subscribers are represented by a dwelling unit.
|
•
|
When there is more than one unit in a single dwelling, such as an apartment building, each tenant with cable service is counted as an individual subscriber, whether the service is invoiced separately or included in the tenant's rent. Institutional units, such as hospitals or hotels, are each considered one subscriber.
|
•
|
Cable Ignite TV and Internet subscribers include only those subscribers who have service installed and operating, and who are being billed accordingly.
|
•
|
Subscriber counts exclude certain business services delivered over our fibre network and data centre infrastructure, and circuit-switched local and long distance voice services and legacy data services where access is delivered using leased third-party network elements and tariffed ILEC services.
|
Rogers Communications Inc.
|
16
|
First Quarter 2020
|
Rogers Communications Inc.
|
17
|
First Quarter 2020
|
Non-GAAP measure or related performance 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
|
●
|
|
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.
|
Rogers Communications Inc.
|
18
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Net income
|
352
|
|
391
|
|
Add:
|
|
|
||
Income tax expense
|
117
|
|
139
|
|
Finance costs
|
220
|
|
189
|
|
Depreciation and amortization
|
639
|
|
609
|
|
|
|
|
||
EBITDA
|
1,328
|
|
1,328
|
|
Add (deduct):
|
|
|
||
Other income
|
(14
|
)
|
(13
|
)
|
Restructuring, acquisition and other
|
21
|
|
20
|
|
|
|
|
||
Adjusted EBITDA
|
1,335
|
|
1,335
|
|
|
Three months ended March 31
|
|
||
(In millions of dollars, except margins)
|
2020
|
|
2019
|
|
|
|
|
||
Adjusted EBITDA
|
1,335
|
|
1,335
|
|
Divided by: total revenue
|
3,416
|
|
3,587
|
|
|
|
|
||
Adjusted EBITDA margin
|
39.1
|
%
|
37.2
|
%
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Net income
|
352
|
|
391
|
|
Add (deduct):
|
|
|
||
Restructuring, acquisition and other
|
21
|
|
20
|
|
Income tax impact of above items
|
(6
|
)
|
(6
|
)
|
|
|
|
||
Adjusted net income
|
367
|
|
405
|
|
|
Three months ended March 31
|
|
||||
(In millions of dollars, except per share amounts; number of shares outstanding in millions)
|
2020
|
|
2019
|
|
||
|
|
|
||||
Adjusted basic earnings per share:
|
|
|
||||
Adjusted net income
|
367
|
|
405
|
|
||
Divided by:
|
|
|
||||
Weighted average number of shares outstanding
|
505
|
|
514
|
|
||
|
|
|
||||
Adjusted basic earnings per share
|
|
$0.73
|
|
|
$0.79
|
|
|
|
|
||||
Adjusted diluted earnings per share:
|
|
|
||||
Diluted adjusted net income
|
357
|
|
405
|
|
||
Divided by:
|
|
|
||||
Diluted weighted average number of shares outstanding
|
506
|
|
516
|
|
||
|
|
|
||||
Adjusted diluted earnings per share
|
|
$0.71
|
|
|
$0.78
|
|
Rogers Communications Inc.
|
19
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Cash provided by operating activities
|
959
|
|
998
|
|
Add (deduct):
|
|
|
||
Capital expenditures
|
(593
|
)
|
(617
|
)
|
Interest on borrowings, net of capitalized interest
|
(187
|
)
|
(168
|
)
|
Interest paid
|
200
|
|
220
|
|
Restructuring, acquisition and other
|
21
|
|
20
|
|
Program rights amortization
|
(22
|
)
|
(19
|
)
|
Net change in contract asset balances
|
(326
|
)
|
9
|
|
Net change in financing receivable balances
|
259
|
|
—
|
|
Change in non-cash operating working capital items
|
186
|
|
13
|
|
Other adjustments
|
(35
|
)
|
(51
|
)
|
|
|
|
||
Free cash flow
|
462
|
|
405
|
|
|
As at
March 31 |
|
As at
December 31
|
|
(In millions of dollars)
|
2020
|
|
2019
|
|
|
|
|
||
Current portion of long-term debt
|
1,450
|
|
—
|
|
Long-term debt
|
18,375
|
|
15,967
|
|
Deferred transaction costs and discounts
|
176
|
|
163
|
|
|
20,001
|
|
16,130
|
|
Add (deduct):
|
|
|
||
Net debt derivative assets
|
(3,537
|
)
|
(1,383
|
)
|
Credit risk adjustment related to net debt derivative assets
|
(414
|
)
|
(31
|
)
|
Short-term borrowings
|
966
|
|
2,238
|
|
Current portion of lease liabilities
|
253
|
|
230
|
|
Lease liabilities
|
1,557
|
|
1,495
|
|
Cash and cash equivalents
|
(1,936
|
)
|
(494
|
)
|
|
|
|
||
Adjusted net debt
|
16,890
|
|
18,185
|
|
|
As at
March 31 |
|
As at
December 31 |
|
(In millions of dollars, except ratios)
|
2020
|
|
2019
|
|
|
|
|
||
Adjusted net debt
|
16,890
|
|
18,185
|
|
Divided by: trailing 12-month adjusted EBITDA
|
6,212
|
|
6,212
|
|
|
|
|
||
Debt leverage ratio
|
2.7
|
|
2.9
|
|
Rogers Communications Inc.
|
20
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
|
2020
|
|
2019
|
|
|
|
|
||
Revenue
|
3,416
|
|
3,587
|
|
|
|
|
||
Operating expenses:
|
|
|
||
Operating costs
|
2,081
|
|
2,252
|
|
Depreciation and amortization
|
639
|
|
609
|
|
Restructuring, acquisition and other
|
21
|
|
20
|
|
Finance costs
|
220
|
|
189
|
|
Other income
|
(14
|
)
|
(13
|
)
|
|
|
|
||
Income before income tax expense
|
469
|
|
530
|
|
Income tax expense
|
117
|
|
139
|
|
|
|
|
||
Net income for the period
|
352
|
|
391
|
|
|
|
|
||
Earnings per share:
|
|
|
||
Basic
|
$0.70
|
$0.76
|
||
Diluted
|
$0.68
|
$0.76
|
Rogers Communications Inc.
|
21
|
First Quarter 2020
|
|
As at
March 31 |
|
As at
December 31 |
|
|
2020
|
|
2019
|
|
|
|
|
||
Assets
|
|
|
||
Current assets:
|
|
|
||
Cash and cash equivalents
|
1,936
|
|
494
|
|
Accounts receivable
|
1,984
|
|
2,304
|
|
Inventories
|
423
|
|
460
|
|
Current portion of contract assets
|
1,094
|
|
1,234
|
|
Other current assets
|
714
|
|
524
|
|
Current portion of derivative instruments
|
192
|
|
101
|
|
Total current assets
|
6,343
|
|
5,117
|
|
|
|
|
||
Property, plant and equipment
|
14,049
|
|
13,934
|
|
Intangible assets
|
8,896
|
|
8,905
|
|
Investments
|
2,554
|
|
2,830
|
|
Derivative instruments
|
3,490
|
|
1,478
|
|
Contract assets
|
418
|
|
557
|
|
Other long-term assets
|
403
|
|
275
|
|
Goodwill
|
3,923
|
|
3,923
|
|
|
|
|
||
Total assets
|
40,076
|
|
37,019
|
|
|
|
|
||
Liabilities and shareholders' equity
|
|
|
||
Current liabilities:
|
|
|
||
Short-term borrowings
|
966
|
|
2,238
|
|
Accounts payable and accrued liabilities
|
2,433
|
|
3,033
|
|
Income tax payable
|
232
|
|
48
|
|
Other current liabilities
|
126
|
|
141
|
|
Contract liabilities
|
279
|
|
224
|
|
Current portion of long-term debt
|
1,450
|
|
—
|
|
Current portion of lease liabilities
|
253
|
|
230
|
|
Current portion of derivative instruments
|
9
|
|
50
|
|
Total current liabilities
|
5,748
|
|
5,964
|
|
|
|
|
||
Provisions
|
37
|
|
36
|
|
Long-term debt
|
18,375
|
|
15,967
|
|
Derivative instruments
|
1
|
|
90
|
|
Lease liabilities
|
1,557
|
|
1,495
|
|
Other long-term liabilities
|
623
|
|
614
|
|
Deferred tax liabilities
|
3,536
|
|
3,437
|
|
Total liabilities
|
29,877
|
|
27,603
|
|
|
|
|
||
Shareholders' equity
|
10,199
|
|
9,416
|
|
|
|
|
||
Total liabilities and shareholders' equity
|
40,076
|
|
37,019
|
|
Rogers Communications Inc.
|
22
|
First Quarter 2020
|
|
Three months ended March 31
|
|
||
|
2020
|
|
2019
|
|
Operating activities:
|
|
|
||
Net income for the period
|
352
|
|
391
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
||
Depreciation and amortization
|
639
|
|
609
|
|
Program rights amortization
|
22
|
|
19
|
|
Finance costs
|
220
|
|
189
|
|
Income tax expense
|
117
|
|
139
|
|
Post-employment benefits contributions, net of expense
|
12
|
|
8
|
|
Net change in contract asset balances
|
326
|
|
(9
|
)
|
Net change in financing receivable balances
|
(259
|
)
|
—
|
|
Other
|
9
|
|
30
|
|
Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid
|
1,438
|
|
1,376
|
|
Change in non-cash operating working capital items
|
(186
|
)
|
(13
|
)
|
Cash provided by operating activities before income taxes paid and interest paid
|
1,252
|
|
1,363
|
|
Income taxes paid
|
(93
|
)
|
(145
|
)
|
Interest paid
|
(200
|
)
|
(220
|
)
|
|
|
|
||
Cash provided by operating activities
|
959
|
|
998
|
|
|
|
|
||
Investing activities:
|
|
|
||
Capital expenditures
|
(593
|
)
|
(617
|
)
|
Additions to program rights
|
(15
|
)
|
(7
|
)
|
Changes in non-cash working capital related to capital expenditures and intangible assets
|
(129
|
)
|
(107
|
)
|
Other
|
(19
|
)
|
(3
|
)
|
|
|
|
||
Cash used in investing activities
|
(756
|
)
|
(734
|
)
|
|
|
|
||
Financing activities:
|
|
|
||
Net (repayment of) proceeds received from short-term borrowings
|
(1,417
|
)
|
430
|
|
Net issuance (repayment) of long-term debt
|
2,885
|
|
(400
|
)
|
Net proceeds (payments) on settlement of debt derivatives and forward contracts
|
90
|
|
(11
|
)
|
Principal payments of lease liabilities
|
(50
|
)
|
(41
|
)
|
Transaction costs incurred
|
(16
|
)
|
—
|
|
Repurchase of Class B Non-Voting Shares
|
—
|
|
(136
|
)
|
Dividends paid
|
(253
|
)
|
(247
|
)
|
|
|
|
||
Cash provided by (used in) financing activities
|
1,239
|
|
(405
|
)
|
|
|
|
||
Change in cash and cash equivalents
|
1,442
|
|
(141
|
)
|
Cash and cash equivalents, beginning of period
|
494
|
|
405
|
|
|
|
|
||
Cash and cash equivalents, end of period
|
1,936
|
|
264
|
|
Rogers Communications Inc.
|
23
|
First Quarter 2020
|
•
|
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;
|
•
|
statements relating to plans we have implemented in response to the COVID-19 pandemic and its impact on us; and
|
•
|
all other statements that are not historical facts.
|
•
|
general economic and industry growth rates;
|
•
|
currency exchange rates and interest rates;
|
•
|
product pricing levels and competitive intensity;
|
•
|
subscriber growth;
|
•
|
pricing, usage, and churn rates;
|
•
|
changes in government regulation;
|
•
|
technology deployment;
|
•
|
availability of devices;
|
•
|
timing of new product launches;
|
•
|
content and equipment costs;
|
•
|
the integration of acquisitions;
|
•
|
industry structure and stability; and
|
•
|
the impact of the COVID-19 pandemic on our operations, liquidity, financial condition, or results.
|
•
|
regulatory changes;
|
•
|
technological changes;
|
•
|
economic, geopolitical, and other conditions affecting commercial activity;
|
•
|
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;
|
•
|
external threats, such as epidemics, pandemics, and other public health crises, natural disasters, or cyberattacks, among others; and
|
•
|
new interpretations and new accounting standards from accounting standards bodies.
|
Rogers Communications Inc.
|
24
|
First Quarter 2020
|
Rogers Communications Inc.
|
25
|
First Quarter 2020
|