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ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT 91
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(iii) Other:
On January 1, 2007, the Company acquired five Alberta
radio stations for cash consideration of $43 million including
acquisition costs. The acquisition was accounted for using the
purchase method with $13 million allocated to net tangible
assets acquired, $29 million allocated to broadcast licences
acquired and $1 million allocated to goodwill, which is tax
deductible, within the Media reporting segment.
During 2007, the Company made various other acquisitions for
cash consideration of approximately $3 million.
On July 6, 20 07, the Company announced an agreement to acquire
Vancouver multicultural television station Channel M from
Multivan Broadcast Corporation. This transaction is subject to
Canadian Radio-television and Telecommunications Commission
(“CRTC”) approval and is expected to close in early 2008.
During 2007, the Company announced that it had reached an
agreement to acquire the remaining two-thirds ownership in
Outdoor Life Network to bring its ownership to 100%. This
transaction has not yet closed, pending CRTC approval, which
is expected in 2008.
(B) 2006 ACQUISITIONS:
During 2006, the Company made various acquisitions, accounted for
by the purchase method, for cash consideration totalling $6 million.
During 2006, the Company finalized the purchase price allocation
of certain 2005 acquisitions upon receipt of the final valuations of
certain tangible and intangible 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.
(ii) Citytv:
On October 31, 2007, the Company acquired certain real
properties and 100% of the shares of the legal entities holding
the operations of the Citytv network of five television stations
in Canada, from CTVglobemedia Inc. for cash consideration of
$405 million, including acquisition costs. The purchase price is
subject to working capital adjustments. The acquisition was
accounted for using the purchase method, with the results of
operations consolidated with those of the Company effective
October 31, 2007. The purchase price allocation is preliminary
pending finalization of valuations of the net identifiable
assets acquired. The preliminary estimated fair values of the
assets acquired and liabilities assumed in the Citytv acquisition
are as follows:
Purchase price $ 405
Current assets $ 33
Program inventory 25
PP&E 32
Brand name 26
Broadcast licences 86
Future income tax liabilities (15)
Current liabilities (32)
Other liabilities (14)
Preliminary fair value of net assets acquired $ 141
Goodwill $ 264
The goodwill has been allocated to the Media reporting
segment and is not tax deductible.
The Company has developed a plan to restructure and integrate
the operations of Citytv and has accrued $6 million as a liability
assumed on acquisition in the allocation of the purchase price
at December 31, 2007, which is included in current liabilities.
The Company has contributed certain assets to joint ventures
involved in the provision of wireless broadband Internet service
and in certain mobile commerce initiatives (note 11(b)). As at
December 31, 2007 and 2006 and for the years then ended,
proportionately consolidating these joint ventures resulted in the
following increases (decreases) in the accounts of the Company:
5. INVESTMENT IN JOINT VENTURES:
2007 2006
Current assets $ 7 $ 11
Long-term assets 73 42
Current liabilities 6 3
Expenses 25 20
Net income for the year (25) (20)