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87
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
4 BUS INESS COMBI NATI ONS
(A) 20 06 ACQUISITIONS:
During 2006, the Company made various acquisitions, accounted
for by the purchase method, for cash consideration totalling
$6 million.
(B) 2005 ACQUISITIONS:
The Company completed the following acquisitions during 2005
which were accounted for by the purchase method:
(i) Call-Net Enterprises Inc.:
On July 1, 2005, the Company acquired 100% of Call-Net Enterprises
Inc. (“Call-Net”) in a share for share transaction (the “Call-Net
Acquisition”) for total consideration of approximately $328 million.
Call-Net, primarily through its wholly owned subsidiary, Sprint Canada
Inc., was a Canadian integrated communications solutions provider
of home phone, wireless, long distance and Internet access services to
households, and local, long distance, toll free, enhanced voice, data
and Internet access services to businesses across Canada. The opera-
tions of Call-Net were consolidated with those of the Company as of
July 1, 2005.
Holders of common shares and Class B Non Voting shares of Call-
Net received a fixed exchange ratio of two Class B Non-Voting
shares of the Company for each 4.25 common shares and/or
Class B Non-Voting shares of Call-Net held by them. In addition, each
holder of outstanding Call-Net options received fully-vested options
of the Company using the same 4.25 exchange ratio.
During 2006, the Company finalized the purchase price allocation
upon receipt of the final valuations of certain tangible and intan-
gible assets acquired. These adjustments included an increase in the
fair value assigned to PP&E of $22 million from that recorded and
disclosed in the 2005 consolidated financial statements. Additionally,
the fair value of the subscriber bases acquired increased by
$24 million from that recorded and disclosed in the 2005 consolidated
financial statements. Accompanied with a $1 million adjustment to
accrued transaction costs, these adjustments resulted in a decrease
in goodwill acquired of $47 million.
Goodwill related to the Call-Net Acquisition has been assigned
to the Rogers Home Phone and Rogers Business Solutions
business units.
(B) PRODUCT REVENUE:
Revenue from external customers is comprised of the following:
2006 2005
(Restated –
note 2(b))
Wireless:
Post paid (voice and data) $ 4,084 $ 3,384
Prepaid 214 210
One-way messaging 15 20
Network revenue 4,313 3,614
Equipment sales 267 246
4,580 3,860
Cable and Telecom:
Cable and Internet 1,944 1,735
Rogers Home Phone 355 150
Rogers Business Solutions 596 284
Rogers Retail 310 327
Intercompany eliminations (4) (4)
3,201 2,492
Media:
Advertising 555 503
Circulation and subscription 149 137
Retail 279 252
Blue Jays 163 149
Other 64 56
1,210 1,097
Corporate items and intercompany eliminations (153) (115)
$ 8,838 $ 7,334