Rogers 2008 Annual Report Download - page 101

ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT 97
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
The goodwill has been allocated to the Media reporting segment
and is not tax deductible.
(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
During 2008, the Company announced that it had reached
an agreement to increase its ownership of K-Rock 1057 Inc.
to 100%. This transaction is subject to CRTC approval and is
expected to close in 2009.
During 2008, the Company received CRTC approval of an
agreement with Newfoundland Capital Corporation (“NCC”)
to exchange its CIGM AM radio licence in Sudbury, Ontario for
NCC’s CFDS AM licence in Halifax, Nova Scotia and to convert
both of the AM licences to FM. In addition to the radio station
exchange, the Company will pay cash consideration of $5 million.
The transaction is expected to close in 2009.
(B) 2007 ACQUISITIONS:
(i) Futureway Communications Inc.:
On June 22, 2007, the Company acquired the remaining 80%
of the common shares that it did not already own and the
outstanding stock options of Futureway Communications
Inc. (“Futureway”) for cash consideration of $38 million. In
addition, the Company contributed $48 million to Futureway to
simultaneously repay obligations under capital leases, advances
from affiliated companies and to terminate a services agreement.
The total cash outlay for the acquisition was $86 million. At the
same time, Cable entered into a marketing agreement with the
former controlling shareholder of Futureway that entitles the
Company to preferred marketing arrangements in certain new
residential housing developments in the Greater Toronto Area.
The acquisition was accounted for using the purchase method
with the results of operations consolidated with those of the
Company effective June 22, 2007. The fair values of the assets
Current assets $ 4
PP&E 4
Marketing agreement 52
Other intangible assets 7
Future income tax assets 22
Current liabilities (3)
Other liabilities (48)
Fair value of net assets acquired $ 38
(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 acquisition was
accounted for using the purchase method, with the results of
operations consolidated with those of the Company effective
October 31, 2007.
During 2008, the Company finalized the purchase price
allocation of the Citytv acquisition and the Company paid
an additional $3 million as settlement for a working capital
adjustment which increased the purchase price paid to $408
million. In addition to the working capital adjustment,
valuations of certain tangible and intangible assets acquired
were completed. The adjustments had the following effects on
the purchase price allocation from that recorded and disclosed
in the 2007 consolidated financial statements:
Final
As at purchase
December 31, price
2007 Adjustments allocation
Purchase price $ 405 $ 3 $ 408
Current assets $ 33 $ (2) $ 31
Program inventory 25 (16) 9
PP&E 32 18 50
Brand name 26 – 26
Broadcast licence 86 – 86
Advertising bookings – 6 6
Future income tax liabilities (15) – (15)
Current liabilities (32) (16) (48)
Other liabilities (14) 6 (8)
Fair value of net assets acquired $ 141 $ (4) $ 137
Goodwill $ 264 $ 7 $ 271
acquired and liabilities assumed in the Futureway acquisition
are as follows: