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35
Rogers Communications Inc. 2004 Annual Report
• Customer care expenses, which include the costs associated with customer order-taking and billing inquiries;
• Community television expenses, which consist of the costs to operate a series of local community-based television stations in the
communities served by its cable services;
• Other general and administrative expenses; and
• Expenses related to the national management of the Rogers Video stores.
Summarized Cable Financial Results
Year Ended December 31,
(In millions of dollars, except margin) 2004 2003 %Chg
Operating revenue1
Core cable revenue $ 1,253.1 $ 1,186.4 5.6
Internet revenue 378.9 322.3 17.6
Total cable revenue 1,632.0 1,508.7 8.2
Video stores revenue 317.0 282.6 12.2
Intercompany eliminations (3.3) (3.2) 3.1
Total operating revenue 1,945.7 1,788.1 8.8
Operating expenses1
Cost of Video store sales 145.9 129.9 12.3
Sales and marketing expenses 248.7 205.1 21.3
Operating, general and administrative expenses 845.7 792.8 6.7
Intercompany eliminations (3.3) (3.2) 3.1
Total operating expense 1,237.0 1,124.6 10.0
Operating profit2
Cable 680.5 639.8 6.4
Video stores 28.2 23.7 19.0
Total operating profit 708.7 663.5 6.8
Operating profit margin:2
Cable 41.7% 42.4%
Video stores 8.9% 8.4%
Total 36.4% 37.1%
Additions to PP&E3$ 587.9 $ 509.6 15.4
1 Effective January 1, 2004, Cable adopted new Canadian accounting standards regarding the timing of revenue recognition and the classification of certain
items as revenue or expense. As a result of the adoption of these new accounting standards, certain changes to the recognition and classification have been
made for all periods presented. See the “New Accounting Standards – Revenue Recognition” section.
2 As defined. See the “Key Performance Indicators and Non-GAAP Measures – Operating Profit and Operating Profit Margin” section and “Supplementary
Information – Cable Calculations” section. Operating profit margin is calculated by dividing operating profit by revenue.
3 As defined. See the “Key Performance Indicators and Non-GAAP Measures – Additions to PP&E” section.
Cable Operating Highlights For the Year Ended December 31, 2004
• Cable had growth in revenue generating units (“RGUs”), as defined (see the “Key Performance Indicators and Non-GAAP Measures –
Revenue Generating Units” section), of 284,200 during 2004, driven by 158,800 net new Internet subscribers and 140,200 net new
digital cable households, offset modestly by a net loss of 14,800 basic cable subscribers.
• In February 2004, Cable, together with RCI, announced a plan for the deployment of an advanced broadband IP multimedia network
to support voice-over-cable telephony and other new voice and data services across the Rogers Cable service areas, with initial service
availability now expected no earlier than mid-2005.
• Cable launched Rogers Yahoo! Hi-Speed Internet services and completed the transition of its entire residential Internet customer
base to the new platform. These broadband services include some or all of the following features: safety and security features with
parental controls; an e-mail system with e-mail anti-virus; SpamGuard Plus; over 2 gigabytes of mail storage; Rogers Yahoo! Photos
with unlimited storage; Rogers Yahoo! Messenger; Internet music and radio; and Rogers Yahoo! Games.
• Cable launched “Rogers Yahoo! Hi-Speed Internet Extreme” service with a 5 Megabits per second (“Mbps”) modem setting, and it
further expanded its suite of Internet access products with the launch of Rogers Yahoo! Hi-Speed Internet Ultra-Lite service.
• Cable added to its rich “Rogers on Demand” suite of products with the addition of additional High Definition channels, the introduc-
tion of “The Movie Network OnDemand”, an SVOD service, and also launched a High Definition version of its successful PVR product.
• Cable began offering customers in Ontario an all-digital channel lineup with all analog channels now fully digitized to offer picture
and sound in digital format to customers who have a Rogers Digital Cable terminal or PVR. With the all digital lineup, these customers
are able to experience Cable’s extensive programming offering in 100% digital format, while at the same time retaining the ability to
watch the analog channels on any cable outlet in the house without the need for extra digital boxes.