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ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT 31
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
2008 2009
(Millions of dollars, except subscribers) Actual Guidance Range
Consolidated
Revenue (1) $ 11,335 Up 5% to 9%
Adjusted operating profit (2) 4,060 Up 3% to 8%
Additions to PP&E (3) 2,021 (10%) to 0%
Free cash flow (4) 1,464 Up 9% to 23%
Annualized dividend $ 1.00 $1.16
Supplementary Detail:
Revenue
Wireless (network revenue) $ 5,843 Up 6% to 10%
Cable Operations (5) 2,878 Up 6% to 8%
Media 1,496 (6%) to 4%
Adjusted operating profit (2)
Wireless $ 2,806 Up 5% to 9%
Cable Operations (5) 1,171 Up 6% to 10%
Media
(6) 142 (19%) to 2%
Additions to PP&E
Wireless $ 929 (10%) to (2%)
Cable Operations 829 (16%) to (7%)
(1) Consolidated revenue, includes revenue from Wireless equipment, RBS, Rogers Retail and Corporate items and eliminations in addition to Wireless Network, Cable Operations and Media revenue.
(2) Excludes stock-based compensation expense and integration and restructuring related expenditures.
(3) Consolidated additions to PP&E includes expenditures related to billing system development, Rogers Media and corporately owned real estate in addition to Wireless and Cable Operations PP&E expenditures.
(4) Free cash flow is defined as adjusted operating profit less PP&E expenditures and interest expense and is not a term defined under Canadian GAAP.
(5) Includes cable television, residential high-speed Internet and residential telephony services; excludes Rogers Business Solutions and Rogers Retail.
(6) Includes losses from Sports Entertainment estimated at $20 million in 2009.
20 09 FINANCIAL AND OPER ATING GUIDANCE
The following table outlines our financial and operational guid-
ance for the full year 2009, which was publicly issued on February
18, 2009. Certain of the measures included below are not defined
under Canadian GAAP. See the sections entitled “Supplementary
2008 WIRELESS NETWORK REVENUE MIX
(%)
Postpaid 95%
Prepaid 5%
Information: Non-GAAP Calculations” and “Key Performance
Indicators and Non-GAAP Measures” for further details. This infor-
mation is forward-looking and should be read in conjunction with
the section above entitled “Caution Regarding Forward-Looking
Statements, Risks and Assumptions”.
2. SEGMENT REVIEW
WIRELESS
WIRELESS BUSINESS
Wireless is the largest Canadian wireless communications service
provider, serving approximately 8.0 million retail voice and data
subscribers at December 31, 2008, representing approximately 37%
of Canadian wireless subscribers. Wireless operates a GSM/General
Packet Radio Service (“GSM/GPRS”) network, with Enhanced
Data for GSM Evolution (“EDGE”) technology and the next gen-
eration High Speed Packet Access (“HSPA”) network. Wireless is
Canada’s only national carrier operating on the world standard
GSM technology platform. The GSM network provides coverage
to approximately 94.8% of Canada’s population. Wireless has also
deployed a next generation wireless data technology called UMTS/
HSPA (“Universal Mobile Telephone System/High-Speed Packet
Access”) across the major markets in Canada representing 75.6%
of the population and has UMTS/HSPA roaming in 70 interna-
tional destinations as well as access to these services across the U.S.
through roaming agreements with various wireless operators. Its
subscribers also have access to wireless voice service internationally
in 211 international destinations and wireless data service inter-
nationally in 162 international destinations, including throughout
Europe, Asia, Latin America and Africa, through roaming agree-
ments with other GSM wireless providers.
Wireless Products and Services
Wireless offers wireless voice, data and messaging services across
Canada. Wireless voice services are available in either postpaid or
prepaid payment options. In addition, the network provides cus-
tomers with advanced high-speed wireless data services, including
mobile access to the Internet, wireless e-mail, digital picture and
video transmission, mobile video, music downloading, video calling
and two-way short messaging service (“SMS”).
Wireless Distribution
Wireless markets its products and services under both the Rogers
Wireless and Fido brands through an extensive nationwide distribu-
tion network of over 3,500 dealer and retail locations across Canada
(excluding Rogers Retail locations, which is a segment of Cable), sell-
ing subscriptions to service plans, handsets and prepaid cards and