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42 ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CABLE ADDITIONS TO PP&E
The Cable Operations segment categorizes its PP&E expenditures
according to a standardized set of reporting categories that were
developed and agreed to by the U.S. cable television industry and
which facilitate comparisons of additions to PP&E between different
cable companies. Under these industry definitions, Cable Operations
additions to PP&E are classified into the following five categories:
• Customerpremiseequipment(“CPE”),whichincludestheequip-
ment for digital set-top terminals, Internet modems and the
associated installation costs;
• Scalableinfrastructure,whichincludesnon-CPEcoststomeet
business growth and to provide service enhancements, including
many of the costs to-date of the cable telephony initiative;
• Lineextensions,whichincludesnetworkcoststoenternewser-
vice areas;
• Upgrades and rebuild, which includes the costs to modify or
replace existing co-axial cable, fibre-optic equipment and net-
work electronics; and
• Support capital,whichincludes the costsassociatedwiththe
purchase, replacement or enhancement of non-network assets.
2007 CABLE ADDITIONS TO PP&E
(%)
Cable Operations 87%
Retail 3%
Business Solutions 10%
Summarized Cable PP&E Additions
Years ended December 31,
(In millions of dollars) 2007 2006 (1) % Chg
Additions to PP&E
Customer premise equipment $ 304 $ 307 (1)
Scalable infrastructure 167 184 (9)
Line extensions 57 64 (11)
Upgrades and rebuild 43 10 n/m
Support capital 139 120 16
Total Cable Operations (2) 710 685 4
Rogers Business Solutions (3) 83 98 (15)
Rogers Retail 21 11 91
$ 814 $ 794 3
(1) Certain prior year amounts have been reclassified to conform with the current year presentation.
(2) Included in Cable and Internet PP&E additions are costs related to the integration of Call-Net of $5 million and $28 million, for the years ended December 31, 2007, and December 31, 2006, respectively.
(3) Included in RBS PP&E additions are costs related to the integration of Call-Net of $6 million and $15 million, for the years ended December 31, 2007, and December 31, 2006, respectively.
The year-over-year increase in additions to PP&E is attributable to
an increase in spending at Cable Operations, and Rogers Retail,
offset by lower spending at RBS.
Cable Operations PP&E additions are primarily attributable to
higher spending on support capital relating to a larger subscriber
base. Spending on upgrades and rebuilds was driven by upgrades
and improvements to its cable systems in the Atlantic provinces and
rural areas in Ontario.
RBS PP&E additions decreased during 2007 compared to 2006 pri-
marily due to the purchase of Group Telecom/360Networks assets
from Bell Canada in 2006.
The increase in Rogers Retail PP&E additions is attributable to
improvements made to certain retail stores acquired from Wireless
in January 2007 and to improvements related to new retail stores.
MEDIA
MEDIA’S BUSINESS
Media operates our radio and television broadcasting operations,
our consumer and trade publishing operations, our televised home
shopping service and Rogers Sports Entertainment. In addition to
Media’s more traditional broadcast and print media platforms, it also
delivers content and conducts e-commerce over the Internet relating
to many of its individual broadcasting and publishing properties.
Media’s Broadcasting group (“Broadcasting”) comprises 52 radio
stations across Canada; multicultural OMNI television stations; the
five station Citytv television network; a specialty sports television
service that provides regional sports programming across Canada
(“Rogers Sportsnet”), and Canada’s only nationally televised shop-
ping service (“The Shopping Channel”). Media also holds 50%
ownership in Dome Productions, a mobile production and distribu-
tion joint venture that is a leader in HDTV production in Canada.
Broadcasting also owns The Biography Channel Canada and
G4TechTV Canada and holds interests in several Canadian specialty
television services, including Viewers Choice Canada.
Media’s Publishing group (“Publishing”) publishes 78 consumer
magazines and trade and professional publications and directories
in Canada.
In addition to its organic growth, Media expanded its business in
2007 through the following initiatives: the acquisition of five radio
stations located in Edmonton and Fort McMurray, Alberta, including
licences in several small Alberta markets; and the acquisition of