Rogers 2005 Annual Report Download - page 55

51 ROGERS 2005 ANNUAL REPORT . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
in the 2004 Annual MD&A. As at March 31, 2005, 91.8% of our U.S. dollar-denominated debt was hedged on an economic
basis and 80.1% was hedged on an accounting basis.
There was no change in our U.S. dollar-denominated debt nor in our cross-currency interest rate exchange
agreements during the three months ended June 30, 2005. As a result, as at June 30, 2005, 91.8% of our U.S. dollar-
denominated debt remained hedged on an economic basis and 80.1% remained hedged on an accounting basis.
During the three months ended September 30, 2005, as described above, RCI converted almost all of its
U.S. dollar-denominated unhedged 5.75% Convertible Debentures. In addition, as a result of the acquisition of Telecom
and taking into account the redemption of the majority of its 10.625% Senior Secured Notes due 2008, approximately
US$22.0 million of these unhedged Notes remained outstanding at the end of the period. As a result of these events, the
amount of our U.S. dollar-denominated debt hedged on an economic basis increased from 91.8% to 95.5% and on an
accounting basis increased from 80.1% to 83.3%.
During the three months ended December 31, 2005, as a result of the redemption of Cable’s US$113.7 million
11% Senior Subordinated Guaranteed Debentures, total U.S. dollar-denominated debt decreased to US$4,916.9 million;
consequently the amount of debt hedged with respect to foreign exchange via cross-currency interest rate exchange
agreements increased to 97.7% from 95.5% at September 30, 2005, on an economic basis and increased to 85.2% from
83.3% at September 30, 2005 on an accounting basis, since the aggregate notional principal amount of cross-currency
interest rate exchange agreements did not change.
As a result of the financing activity during the year, including changes in cross-currency interest rate exchange
agreements, RCI’s consolidated hedged position, on an economic basis, changed during the year as noted below.
(In millions of dollars, except percentages)
Years ended December 31, 2 0 0 5 2 0 0 4
U.S. dollar-denominated long-term debt US $ 4,916.9 US $ 5,517.6
Hedged with cross-currency interest
rate exchange agreements US $ 4,801.8 US $ 5,135.3
Hedged exchange rate 1.3148 1.3211
Percent hedged 97.7%(1) 93.1%
Effect of cross-currency interest rate exchange agreements:
Converted US $ principal of US $ 550.0 US $ 550.0
at US $ floating rate of LIBOR plus 3.13% 3.13%
for all-in rate of 7.62% 5.53%
to Cdn $ floating at bankers acceptance plus 3.42% 3.42%
for all-in rate of 6.90% 6.06%
on Cdn $ principal of Cdn $ 652.7 Cdn $ 652.7
Converted US $ principal of US $ 4,200.0 US $ 4,533.4
at US $ fixed rate of 7.34% 7.54%
to Cdn $ fixed rate of 8.07% 8.35%
on Cdn $ principal of Cdn $ 5,593.4 Cdn $ 6,064.2
Converted US $ principal of US $ 51.8 US $ 51.8
at US $ fixed rate of 9.38% 9.38%
to Cdn $ floating at bankers acceptance plus 2.67% 2.67%
for all-in rate of 6.07% 5.30%
on Cdn $ principal of Cdn $ 67.4 Cdn $ 67.4
Amount of long-term debt(2) at fixed rates:
Total long-term debt Cdn $ 8,409.6 Cdn $ 9,198.6
Total long-term debt at fixed rates Cdn $ 7,076.5 Cdn $ 8,478.5
Percent of long-term debt fixed 84.1% 92.2%
Weighted average interest rate on long-term debt 7.76% 7.93%
(1) Pursuant to the requirements for hedge accounting under AcG-13, on December 31, 2005, RCI accounted for 87.3% of its cross-currency
interest rate exchange agreements as hedges against designated U.S. dollar-denominated debt. As a result, 85.2% of consolidated
U.S. dollar-denominated debt is hedged for accounting purposes versus 97.7% on an economic basis.
(2) Long-term debt includes the effect of the cross-currency interest rate exchange agreements.