Rogers 2005 Annual Report Download - page 119

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115 ROGERS 2005 ANNUAL REPORT . NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(a ) B LU E JA Y S:
On January 5, 2004, the Company paid the remaining amount related to the purchase of the 20% minority interest in
the Blue Jays of approximately $39.1 million. This payment had no impact on the carrying value or the control of the
investment since this liability was recorded at the original date of acquisition.
Effective April 1, 2001, Rogers Telecommunications Ltd. (“RTL”), a company controlled by the controlling share-
holder of the Company, acquired the Class A Preferred shares of a subsidiary of RCI that owns the Blue Jays (“Blue Jays
Holdco Inc.”) for $30.0 million. On July 31, 2004, Blue Jays Holdco Inc. redeemed and cancelled the 30,000 Class A Preferred
shares for $30.0 million, resulting in the control of Blue Jays Holdco Inc. being transferred to the Company. Accordingly,
commencing July 31, 2004, the Company began to consolidate its investment in Blue Jays Holdco Inc. This had no impact
on net income since the Company had previously equity accounted for 100% of the losses of Blue Jays Holdco Inc.
While they were outstanding, the Class A Preferred shares of Blue Jays Holdco Inc. had a cumulative divi-
dend rate of 9.167% per annum. These dividends were satisfied in kind by transferring income tax losses to RTL. During
2004, Blue Jays Holdco Inc. transferred income tax losses to RTL in the amount of $27.4 million with an agreed value of
$2.7 million.
From January 1, 2004 to July 30, 2004, cash contributions of $30.1 million were made to Blue Jays Holdco Inc.
(b ) CO G EC O IN C . A ND C OG E CO CAB L E I NC . (C O LL E CT I VEL Y “ C OG E C O” ) :
In November 2004, the Company entered into an agreement with a group unaffiliated with Cogeco, to exchange 658,125
Subordinated Voting shares of Cogeco Cable Inc. (“CCI”) for 675,000 Subordinated Voting shares of Cogeco Inc. (“CI”). This
transaction was based on the December 13, 2004 closing price and resulted in an increase in the Company’s investment
in CI of $15.8 million, a decrease in the Company’s investment in CCI of $6.9 million and a gain on the exchange of $8.9 million.
The Company’s total investment in CI represents an approximate 21% equity ownership, representing a 7% voting interest,
and in CCI an approximate 16.5% equity ownership, representing a 4% voting interest. Therefore, the Company does not
exercise significant influence over either CI or CCI.
Note 8. Deferred charges:
2005 2004
Financing costs $ 66,858 $ 81,229
Pre-operating costs 12,126 3,506
CRTC commitments 34,403 44,746
Other 15,732 4,985
$ 129,119 $ 134,466
Amortization of deferred charges for 2005 amounted to $34.8 million (2004 – $35.3 million). Accumulated amortization
as at December 31, 2005 amounted to $116.0 million (2004 – $123.9 million).
Financing costs of $4.9 million were deferred in connection with the amendments to certain credit facilities in
2005. Financing costs of $66.1 million were deferred in connection with the issuance of long-term debt in 2004.
In connection with the repayment of certain long-term debt during 2005 and amendments made to certain
credit facilities, the Company wrote off deferred financing costs of $3.0 million (2004 – $19.2 million) (note 11(f)).
The Company has committed to the Canadian Radio-television and Telecommunications Commission (“CRTC”)
to spend an aggregate of $77.4 million in operating funds to provide certain benefits to the Canadian broadcasting
system. In prior years, the Company agreed to pay $50.0 million in public benefits over seven years relating to the CRTC
grant of a new television licence in Toronto, $6.0 million relating to the purchase of 13 radio stations and the remain-
der relating to a CRTC decision permitting the purchase of Sportsnet, Rogers (Toronto) Ltd. and Rogers (Alberta) Ltd.
The amount of these liabilities, included in accounts payable and accrued liabilities and other long-term liabilities, is
$68.6 million at December 31, 2005 (2004 – $48.3 million). Commitments are being amortized over periods ranging from
six to seven years.