Rogers 2003 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2003 Rogers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

2003 Annual ReportRogers Communications Inc. 103
Notes to Consolidated Financial Statements
21. CONTINGENT LIABILITIES:
(a) There exist certain claims and potential claims against the Company, none of which is expected to have a material
adverse effect on the consolidated financial position of the Company.
(b) The Company requires access to support structures and municipal rights of way in order to deploy facilities. In a
2003 decision, the Supreme Court of Canada determined that the CRTC does not have the jurisdiction to establish the
terms and conditions of access to the poles of hydroelectric companies. As a result of this decision, the costs of obtaining
access to the poles of hydroelectric companies could be substantially increased on a prospective basis and, for certain
arrangements, on a retroactive basis. The Company, together with other Ontario cable companies, has applied to the
Ontario Energy Board to request that it assert jurisdiction over the fees paid by such companies to hydroelectric distribu-
tors. The amount of this contingency is presently not determinable.
22. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES:
The consolidated financial statements of the Company have been prepared in accordance with GAAP as applied in
Canada. In the following respects, GAAP as applied in the United States differs from that applied in Canada.
If United States GAAP were employed, the net income in each year would be adjusted as follows:
2003 2002
Net income for the year based on Canadian GAAP $ 129,193 $ 312,032
Gain on sale of cable systems (b) (4,028) (4,028)
Pre-operating costs (c) 11,150 12,580
Interest on equity instruments (d) (35,388) (92,372)
Capitalized interest (e) 5,405 7,837
Financial instruments (h) (217,514) 125,963
Stock-based compensation (i) (1,150) (1,892)
Other 516 9,872
Non-controlling interest 43,173 (42,508)
Income taxes (k) 11,493 22,394
Net income (loss) based on United States GAAP $ (57,150) $ 349,878
Basic earnings (loss) per share based on United States GAAP $ (0.25) $ 1.64
Diluted earnings (loss) per share based on United States GAAP (0.25) 1.23
The cumulative effect of these adjustments on the consolidated shareholders’ equity of the Company is as follows:
2003 2002
Shareholders’ equity based on Canadian GAAP $ 1,767,380 $ 1,404,035
Gain on sale and issuance of subsidiary shares to non-controlling interest (a) 46,245 46,245
Gain on sale of cable systems (b) 124,965 128,993
Pre-operating costs (c) (8,854) (20,004)
Equity instruments (d) (586,410) (584,022)
Capitalized interest (e) 37,986 32,581
Unrealized holding gain on investments (f) 78,596 17,611
Acquisition of Cable Atlantic (g) 34,673 34,673
Financial instruments (h) (59,593) 157,921
Stock-based compensation (i) 661 1,173
Minimum pension liability (j) (7,858) –
Other (17,701) (18,217)
Income taxes (k) (253,567) (253,567)
Non-controlling interest effect of adjustments (58,401) (101,574)
Shareholders’ equity based on United States GAAP $ 1,098,122 $ 845,848
The areas of material difference between Canadian and United States GAAP and their impact on the consolidated finan-
cial statements of the Company are described below:
(a) Gain on sale and issuance of subsidiary shares to non-controlling interest:
Under United States GAAP, the carrying value of the Company’s investment in Wireless would be lower than the carrying
value under Canadian GAAP as a result of certain differences between Canadian and United States GAAP, as described
herein. This results in an increase to the gain on sale and dilution under United States GAAP.