Rogers 2007 Annual Report Download - page 117

Download and view the complete annual report

Please find page 117 of the 2007 Rogers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT 113
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Under Canadian GAAP, the Company was not required to present
comprehensive income for the year ended December 31, 2006.
The areas of material difference between Canadian and United
States GAAP and their impact on the consolidated financial
statements of the Company are described below:
(A) CUMULATIVE IMPACT OF DIFFERENCES IN BUSINESS
COMBINATIONS AND CONSOLIDATION ACCOUNTING:
Certain differences between United States and Canadian
GAAP arose on the dilution gain from sale of Wireless shares,
non-controlling interest accounting during the time period that
RCI held less than 100% of the investment in Wireless, the
acquisition of outstanding shares in Wireless and the acquisition of
Cable Atlantic.
(B) GAIN ON SALE OF CABLE SYSTEMS:
Under Canadian GAAP, the cash proceeds on the non-monetary
exchange of cable assets in prior years were recorded as a reduction
in the carrying value of PP&E. Under United States GAAP, a portion
of the cash proceeds received was recognized as a $40 million gain
in the consolidated statements of income on an after-tax basis. This
difference is being amortized over 10 years.
As a result of this transaction, the carrying amount of the above
assets is higher and additional depreciation expense is recorded
under United States GAAP.
The cumulative effect of these adjustments on the consolidated
shareholders’ equity of the Company is as follows:
Under United States GAAP, comprehensive income for the year
ended December 31, 2006, is as follows:
Under Canadian GAAP, the after-tax gain arising on the sale of
certain of the Company’s cable television systems in prior years was
recorded as a reduction of the carrying value of goodwill acquired
in a contemporaneous acquisition of certain cable television
systems. Under United States GAAP, the Company included the
$101 million gain on sale of the cable television systems in income,
net of related income taxes.
(C) PRE-OPERATING COSTS CAPITALIZED:
Under Canadian GAAP, the Company defers the incremental costs
relating to the development and pre-operating phases of new
businesses and amortizes these costs on a straight-line basis over
periods up to five years. Under United States GAAP, these costs are
expensed as incurred.
(D) CAPITALIZED INTEREST:
Under United States GAAP, interest costs are capitalized as
part of the historical cost of acquiring certain qualifying assets,
which require a period of time to prepare for their intended use.
Capitalization is not required under Canadian GAAP.
2006
Net income based on United States GAAP $ 780
Other comprehensive income, net of income taxes:
Unrealized holding gains on investments (e) 71
Minimum pension liability (h) (3)
Comprehensive income based on United States GAAP $ 848
2007 2006
Shareholders’ equity based on Canadian GAAP $ 4,624 $ 4,200
Cumulative impact of differences in business combinations and consolidation accounting (a) (8) (8)
Gain on sale of cable systems (b) 109 113
Pre-operating costs capitalized (c) (3) (7)
Capitalized interest (d) 68 58
Unrealized holding gains on investments (e) – 210
Financial instruments (f) 26 (519)
Stock-based compensation (g) 33 –
Pension liability (h) (123) (102)
Income taxes (i) (17) (97)
Installation revenues and costs, net (j) 2 6
Other (19) (17)
Shareholders’ equity based on United States GAAP $ 4,692 $ 3,837