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2003 Annual Report Rogers Communications Inc.
102
Notes to Consolidated Financial Statements
Fair value estimates are made at a specific point in time, based on relevant market information and information about
the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judge-
ment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
(b) Other disclosures:
(i) The credit risk of the interest exchange agreements and cross-currency interest rate exchange agreements arises
from the possibility that the counterparties to the agreements may default on their obligations under the agreements in
instances where these agreements have positive fair value to the Company. The Company assesses the creditworthiness
of the counterparties in order to minimize the risk of counterparty default under the agreements. All of the portfolio is
held by financial institutions with a Standard & Poor’s rating (or the equivalent) ranging from A+ to AA.
(ii) The Company does not require collateral or other security to support the credit risk associated with the interest
exchange agreements and cross-currency interest rate exchange agreements due to the Company’s assessment of the
creditworthiness of the counterparties.
(iii) The Company does not have any significant concentrations of credit risk related to any financial asset.
19. COMMITMENTS:
(a) In the ordinary course of business and in addition to the amounts recorded on the consolidated balance sheets and
disclosed elsewhere in the notes, the Company has entered into agreements to acquire broadcasting rights to programs
and films over the next two years at a total cost of approximately $75.3 million.
(b) The Company has a 33.33% interest in each of Tech TV Canada, Biography Channel Canada and MSNBC Canada, all
of which are equity-accounted investments. The Company has committed to fund its share of the losses and PP&E expen-
ditures, in these new channels, to a maximum of $8.8 million, through equity financing and shareholder loans. As at
December 31, 2003, the Company has funded a total of $5.6 million.
(c) Pursuant to CRTC regulation, the Company is required to make contributions to the Canadian Television Fund (“CTF”),
which is a cable industry fund designed to foster the production of Canadian television programming. Contributions to the
CTF are based on a formula, including gross broadcast revenues and the number of subscribers. The Company may elect to
spend a portion of the above amount for local television programming and may also elect to contribute a portion to
another CRTC-approved independent production fund. The Company estimates that its total contribution for 2004 will
amount to approximately $30.0 million.
(d) The future minimum lease payments under operating leases for the rental of premises, distribution facilities,
equipment and microwave towers and commitments for other contracts at December 31, 2003 are as follows:
Year ending December 31:
2004 $ 114,824
2005 102,984
2006 88,890
2007 70,972
2008 56,527
2009 and thereafter 85,633
$ 519,830
Rent expense for 2003 amounted to $113.7 million (2002 – $118.0 million).
20. GUARANTEES:
The Company has made certain warranties and indemnities to the purchasers with respect to the sale of shares of Bowdens
Media Monitoring Limited and Rogers American Cablesystems Inc. These warranties and indemnifications expire in 2005 and
are limited in both cases to the total purchase price paid being $40.3 million and $29.4 million, respectively. To date, there
have been no claims under the warranties and indemnities and the Company does not anticipate that any will occur.