Rogers 2006 Annual Report Download - page 115

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111
RO GER S CO MMU NIC AT ION S IN C . 20 0 6 ANN UA L RE POR T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(M) ACQUISITION OF WIRELESS:
At December 31, 2004, the Company acquired the outstanding shares
of Wireless not owned by the Company and exchanged the out-
standing stock options of Wireless for stock options in the Company.
United States GAAP requires that the intrinsic value of the unvested
options issued be determined as of the consummation date of the
transaction and be recorded as deferred compensation. Canadian
GAAP requires that the fair value of unvested options be recorded as
deferred compensation. Under United States GAAP, this results in an
increase in goodwill in the consolidated accounts of the Company of
$6 million, with a corresponding adjustment to contributed surplus.
Under Canadian GAAP, as part of the purchase price equation, the
derivative instruments of Wireless were recorded at their fair value
at the date of acquisition. The fair value increment is amortized to
interest expense over the remaining terms of the derivative instru-
ments. Under United States GAAP, the derivative instruments are
recorded at fair value. Therefore, under United States GAAP, the
fair value increment related to derivative instruments is reduced by
$20 million with an offsetting decrease to goodwill. As a conse-
quence, the amortization of the fair value increment is not required
under United States GAAP.
(N) CONSOLIDATED STATEMENTS OF C ASH FLOWS:
(i) Canadian GAAP permits the disclosure of a subtotal of the
amount of funds provided by operations before change in non-
cash operating items in the consolidated statements of cash
flows. United States GAAP does not permit this subtotal to
be included.
(ii) Canadian GAAP permits bank advances to be included in the
determination of cash and cash equivalents in the consolidated
statements of cash flows. United States GAAP requires that bank
advances be reported as financing cash flows. As a result, under
United States GAAP, the total increase in cash and cash equivalents
in 2006 in the amount of $85 million reflected in the consolidated
statements of cash flows would be decreased by $85 million and
financing activities cash flows would decrease by $85 million.
The total decrease in cash and cash equivalents in 2005 in the
amount of $348 million reflected in the consolidated statements
of cash flows would be decreased by $104 million and financing
activities cash flows would be increased by $104 million.
(O) CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS):
United States GAAP requires the disclosure of a statement of com-
prehensive income (loss). Comprehensive income (loss) generally
encompasses all changes in shareholders’ equity, except those arising
from transactions with shareholders.
2006 2005
Net income (loss) based on United States GAAP $ 780 $ (313)
Other comprehensive income, net of income taxes:
Unrealized holding gains (losses) arising during the year 71 (1)
Realized gains included in income, net of income taxes – (10)
Minimum pension liability, net of income taxes (3) –
Comprehensive income (loss) based on United States GAAP $ 848 $ (324)
(P) OTHER DISCLOSURES:
United States GAAP requires the Company to disclose accrued liabili-
ties, which is not required under Canadian GAAP. Accrued liabilities
included in accounts payable and accrued liabilities as at December 31,
2006 were $1,287 million (2005 – $1,069 million). At December 31,
2006, accrued liabilities in respect of PP&E totalled $153 million
(2005 – $104 million), accrued interest payable totalled $109 million
(2005 – $113 million), accrued liabilities related to payroll totalled
$234 million (2005 – $177 million), and CRTC commitments totalled
$9 million (2005 – $40 million).
(Q) PENSIONS:
The Company implemented SFAS No. 132, Employers Disclosures
about Pensions and Other Post-retirement Benefits – an amend-
ment of FASB Statements No. 87, 88 and 106, in 2004. The following
summarizes the additional disclosures required and different pension-
related amounts recognized or disclosed in the Company’s accounts
under United States GAAP: