Rogers 2006 Annual Report Download - page 6

BUILDING VALUE,
TODAY AND FOR TOMORROW
FELLOW SHAREHOLDERS AND PARTNERS,
During 2006, our consistent focus on innovation, integration and profitable
growth delivered industry-leading performance and strong financial results.
We continued to demonstrate how Rogers’ innovative array of wireless,
cable, high-speed Internet and telephony products can add great value to
our customers’ lives and generate solid returns for our shareholders.
2RO GER S CO MMU NIC AT ION S IN C . 20 0 6 ANN UA L RE POR T
With our impressive array of wireless voice and data products,
our popular Rogers Wireless and Fido brands, and our leading
spectrum position in North America, we’re well positioned to
continue our success in wireless. And there remains tremendous
opportunity ahead in Canada’s wireless market, where penetration
remains below that of many other countries where wireless was
introduced earlier.
Through our Inukshuk fixed wireless joint venture we have built
a national wireless broadband network based on technology
expected to evolve into an exciting new standard called WiMax.
By 2008, the Inukshuk network is expected to cover some 45 cities
and 100 unserved rural and remote communities across the
country. Thanks to our Inukshuk network, we introduced Portable
Internet from Rogers Yahoo!, a fixed wireless “plug and play”
innovation which expands the availability of high-speed Internet
across Canada.
DELIVERING BETTER TELEVISION, FASTER INTERNET
AND MORE CHOICE
As the first in Canada to roll out pioneering products such as
video on demand, high-definition, personal video recorders
and digital simulcasting, innovation has long defined the spirit
of our cable television business. Throughout 2006, we worked to
provide Rogers Cable subscribers with an unprecedented amount
of freedom, choice and control over their television viewing
experience. We continued to expand our line up of high-definition,
on-demand, multicultural, sports and U.S. programming during
2006 and in the process widened our lead over other cable providers.
Our focus on personalizing the television-viewing experience is
clearly resonating with customers. Since the introduction of digital
cable, we have attracted more than one million subscribers to this
service and boast the highest penetration rate in Canada.
During the year, we also raised the bar for high-speed Internet
services, boosting the speeds of our various Rogers Yahoo! Hi-
Speed Internet products and announcing Rogers Yahoo! Hi-Speed
Internet Extreme Plus. At speeds of up to 18 megabits per second,
Rogers Yahoo! Hi-Speed Internet Extreme Plus is the fastest
residential service available to customers in our cable territory.
Our 14% pro forma increase in revenues to $8.8 billion and 31%
pro forma increase in operating profit to $2.9 billion reflected
solid year-over-year growth in our wireless, cable and telecom,
and media businesses, and surpassed the financial targets we
established at the start of the year. Consistent with our commit-
ment to further strengthen our balance sheet, we reduced our
debt leverage from 3.9 times debt to operating profit including
derivatives to 2.7. From an operational perspective we continued
to scale subscriber levels at a steady pace and attracted new
customers to our services while reducing the rate of churn of
existing customers. In addition, we continued to integrate our
businesses, streamline processes and enhance customer service.
We capped the year by announcing a two-for-one split of our
shares and by raising the annual dividend pre-split from $0.15 to
$0.32 – a 113% increase. We also increased the frequency of our
dividend payments by changing the dividend distribution schedule
from a semi-annual to a quarterly basis. Not only is the dividend
increase evidence of our progress in growing the business and
delivering value to shareholders, it also reflects our belief in the
sustainability of the results and the continued confidence of our
Board of Directors in the strategies we are executing.
As with everything we do, our success in 2006 is the result of a
company-wide team effort. I want to express my gratitude to our
management team and our more than 22,500 employees across
the country for the substantial strides Rogers has made with their
support and engagement.
INNOVATING FOR GROWTH IN WIRELESS
The exceptional operating performance across our business
segments in 2006 is rooted in Rogers’ history of innovation.
Our passion for innovation remains as strong as ever.
We continued to secure Rogers’ place at the forefront of Canada’s
wireless industry with the initial launch of High-Speed Downlink
Packet Access (HSDPA) – our revolutionary next generation voice
and data network with the fastest wireless data speeds in Canada.
It also places Rogers among the first operators in the world to
deploy this latest evolution of GSM – the dominant global standard
for mobile wireless communications with over two billion users
worldwide. We’ll continue rolling out this new network technology
across many more Canadian markets in 2007 enabling exciting
new broadband services on wireless phones and devices.