Rogers 2005 Annual Report Download - page 41

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37 ROGERS 2005 ANNUAL REPORT . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
SU M M AR I ZE D C A B LE FI N AN C I AL RE S UL T S
(In millions of dollars, except margin)
Years ended December 31, 2 0 0 5 2 0 0 4 % Chg
Operating revenue
Core cable(1) $ 1,303.9 $ 1,253.1 4.1
Internet 440.7 378.9 16.3
Total cable revenue(1) 1,744.6 1,632.0 6.9
Video stores 326.9 317.0 3.1
Intercompany eliminations (3.8) (3.3) 15.2
Total operating revenue(1) 2,067.7 1,945.7 6.3
Operating expenses(2)
Cost of Video stores sales 157.5 145.9 8.0
Sales and marketing expenses 262.8 248.7 5.7
Operating, general and administrative expenses 932.6 845.7 10.3
Intercompany eliminations (3.8) (3.3) 15.2
Total operating expenses 1,349.1 1,237.0 9.1
Operating profit(3)
Cable 700.6 680.5 3.0
Video stores 18.0 28.2 (36.2)
Total operating profit 718.6 708.7 1.4
Operating profit margin:(1)
Cable 40.2% 41.7%
Video stores 5.5% 8.9%
Additions to property, plant and equipment (“PP&E”)(3) $ 676.2 $ 587.9 15.0
(1) Included in core cable revenue, total cable revenue, and total operating revenue are incremental revenues related to Rogers Home Phone
(“RHP”) of $4.9 million for the year ended December 31, 2005.
(2) Included in total operating expenses for the year ended December 31, 2005 are incremental costs related to RHP of $19.2 million.
(3) As defined. See the “Key Performance Indicators and Non-GAAP Measures” section.
CA B L E O PE R AT I N G H IG H LI G H TS FO R T H E Y E AR END E D D EC E MBE R 3 1 , 2 005
• Cable increased its subscriber bases by the following: 208,500 Internet subscribers, 237,800 digital cable subscribers
(households), 9,200 basic cable subscribers, and 47,900 cable telephony subscribers. These net additions reflect the
effect of a change in Cable’s practice as to when a subscriber is deactivated, which became effective in August 2005.
• On July 1, 2005, Cable introduced its Rogers Home Phone voice-over-cable telephony service offering in the Greater
Toronto Area. Rogers Home Phone voice-over-cable service was made available to some of its cable areas in Southwest
Ontario and Ottawa in the fourth quarter of 2005.
• Cable added further to its “Rogers on Demand” offerings by signing agreements with Sony Entertainment in February
2005 and Warner Brothers in October 2005 for access to their extensive content libraries. With these agreements,
Cable now has studio agreements covering approximately 70% of current Hollywood film output and its customers
can now access over 2,400 titles of on-demand content.
• In April 2005, Cable celebrated the 10th anniversary of the launch of its high-speed Internet service and in the same
month exceeded the one million subscriber threshold.
• Cable further expanded its Internet offerings by including a comprehensive suite of security products.
• Cable added to its leadership position in digital multicultural services by adding a further 14 program services.