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ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT 71
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ADJUSTED QUARTERLY CONSOLIDATED FINANCIAL SUMMARY (1)
(In millions of dollars, 2007 2006
except per share amounts) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Income Statement
Operating revenue
Wireless $ 1,231 $ 1,364 $ 1,442 $ 1,466 $ 1,005 $ 1,094 $ 1,224 $ 1,257
Cable and Telecom 855 881 899 923 772 787 800 842
Media 266 348 339 364 240 334 319 317
Corporate and eliminations (54) (66) (69) (66) (33) (36) (38) (46)
2,298 2,527 2,611 2,687 1,984 2,179 2,305 2,370
Adjusted operating profit (2)
Wireless 581 664 686 658 412 490 564 521
Cable and Telecom 228 243 265 265 222 237 219 238
Media 19 45 46 63 14 53 41 48
Corporate and eliminations (14) (22) (13) (29) (30) (24) (24) (39)
814 930 984 957 618 756 800 768
Depreciation and amortization 400 398 397 408 386 395 408 395
Adjusted operating income 414 532 587 549 232 361 392 373
Interest on long-term debt (149) (152) (140) (138) (161) (155) (153) (151)
Other income (expense) 7 23 (14) – 1 17 6 (16)
Income tax reduction (expense) (86) (104) (165) (109) (39) 67 (76) (14)
Adjusted net income (loss) for the period $ 186 $ 299 $ 268 $ 302 $ 33 $ 290 $ 169 $ 192
Adjusted net income per share: (3)
Basic $ 0.29 $ 0.47 $ 0.42 $ 0.47 $ 0.05 $ 0.46 $ 0.27 $ 0.30
Diluted $ 0.29 $ 0.47 $ 0.41 $ 0.47 $ 0.05 $ 0.45 $ 0.27 $ 0.30
Additions to property, plant
and equipment (2) $ 394 $ 381 $ 397 $ 624 $ 340 $ 403 $ 415 $ 554
(1) This quarterly summary has been adjusted to exclude the impact of the adoption of a cash settlement feature for employee stock options, stock-based compensation expense, integration and restructur-
ing costs, an adjustment to CRTC Part II fees related to prior periods, a one-time charge related to the renegotiation of an Internet-related services agreement, losses on repayment of long-term debt
and the income tax impact related to the above items. Certain prior year numbers have been reclassified to conform to the current year presentation. See the “Key Performance Indicators and Non-GAAP
Measures” section. The adjustment related to Part II CRTC fees is applicable to the third quarter of 2007 and does not impact the full year 2007.
(2) As defined. See the “Key Performance Indicators and Non-GAAP Measures” section.
(3) Prior period per share amounts have been retroactively adjusted to reflect a two-for-one split of the Company’s Class A Voting and Class B Non-Voting shares on December 29, 2006.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report (the “Evaluation
Date”), we conducted an evaluation (under the supervision and with
the participation of our management, including the Chief Executive
Officer and Chief Financial Officer), pursuant to Rule 13a-15 promul-
gated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of the effectiveness of the design and operation
of our disclosure controls and procedures. Based on this evaluation,
our Chief Executive Officer and Chief Financial Officer concluded
that as of the Evaluation Date such disclosure controls and proce-
dures were effective.
Management’s Report on Internal Control Over
Financial Reporting
The management of our company is responsible for establishing
and maintaining adequate internal control over financial reporting.
Our internal control system was designed to provide reasonable
assurance to our management and Board of Directors regarding
the preparation and fair presentation of published financial state-
ments in accordance with generally accepted accounting principles.
All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to
be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.
Management maintains a comprehensive system of controls
intended to ensure that transactions are executed in accordance
with management’s authorization, assets are safeguarded, and
financial records are reliable. Management also takes steps to see
that information and communication flows are effective and to
monitor performance, including performance of internal control
procedures.
Management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2007, based on the criteria
set forth in the Internal Control – Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”). Based on this assessment, management has
concluded that, as of December 31, 2007, our internal control over
financial reporting is effective. Our independent auditor, KPMG LLP,
has issued an audit report that the Company maintained, in all
material respects, effective internal control over financial report-
ing as of December 31, 2007, based on the criteria established in
Internal Control – Integrated Framework issued by the COSO.