Rogers 2005 Annual Report Download - page 40

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36 ROGERS 2005 ANNUAL REPORT . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CA B L E O PE R AT I N G A ND FI N A NC I AL RE S U LT S
For purposes of this discussion, revenue has been classified according to the following categories:
• Core cable, which includes revenue derived from:
• Analog cable service, consisting of basic cable service fees plus extended basic (or tier) service fees, and access fees
for use of channel capacity by third and related parties; and
• Digital cable service revenue, consisting of digital channel service fees, including premium and specialty service sub-
scription fees, PPV service fees, VOD service fees, and revenue earned on the sale and rental of set-top terminals;
• Internet, which includes service revenues from residential and commercial Internet access service and modem sale and
rental fees;
• Voice-over-cable telephony, which includes service revenues, long distance and additional features revenues; and
• Video, which includes the sale and rental of DVDs, videocassettes and video games and the sale of confectionery, as
well as commissions Video earns while acting as an agent to sell other Rogers’ services, such as wireless, Internet, digital
cable and cable telephony services.
Operating expenses are segregated into three categories for assessing business performance:
• Cost of Video store sales, which is composed of Video store merchandise and depreciation related to the acquisition of
DVDs, videocassettes and game rental assets;
• Sales and marketing expenses, which include sales and retention-related advertising and customer communications as
well as other customer acquisition costs such as sales support and commissions as well as costs of operating, advertising
and promoting the Video store chain;
• Operating, general and administrative expenses, which include all other expenses incurred to operate the business on
a day-to-day basis and to service subscriber relationships, including:
• The monthly contracted payments for the acquisition of programming paid directly to the programming suppliers
as well as to copyright collectives and the Canadian Programming Production Funds;
• Internet interconnectivity and usage charges and the cost of operating Cable’s Internet service;
• Intercarrier payments for interconnect to the local access and long distance carriers related to Cable’s telephony
service;
• Technical service expenses, which includes the costs of operating and maintaining Cable’s networks as well as certain
customer service activities such as installations and repair;
• 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 Cable’s licenced systems;
• Other general and administrative expenses; and
• Expenses related to the corporate management of the Video stores.