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42 ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• Expandedtheavailabilityofourresidentialtelephonyserviceto
approximately 95% of homes passed by our cable networks.
• InvestedinSDVtechnologytoallowforexpansionofouravail-
able channel lineup and HDTV choices.
• Deployedanewon-demandinterfaceinOntariotothemajor-
ity of our customers, improving the overall customer experience.
In the Atlantic Region the digital cable interactive program
guide and on-demand user interface were replaced with a more
feature-enhanced user interface.
• IncreaseddownloadspeedsforInternetaccessservices,andalso
implemented monthly usage allowances and monitoring tools,
while usage-based billing on a per gigabyte basis for very heavy
usage customers was phased in.
• Introduced 11 additional HD channels during 2008, including
HBO Canada.
• Digital cable customers now have access to certain prime-
time content on-demand. Episodes of top primetime series are
available for viewing on-demand shortly after airing on major
networks.
Total operating revenue increased $251 million or 7%, from 2007,
and total adjusted operating profit increased to $1,233 million or by
$217 million, a 21% increase from 2007. See the following segment
discussions for a detailed discussion of operating results.
CABLE OPERATIONS
Summarized Financial Results
Years ended December 31,
(In millions of dollars, except margin) 2008 2007 % Chg
Operating revenue
Core Cable $ 1,669 $ 1,540 8
Internet 695 608 14
Rogers Home Phone 514 455 13
Total Cable Operations operating revenue 2,878 2,603 11
Operating expenses before the undernoted
Sales and marketing expenses 248 257 (4)
Operating, general and administrative expenses 1,459 1,338 9
1,707 1,595 7
Adjusted operating profit (1) 1,171 1,008 16
Stock option plan amendment (2) – (106) n/m
Stock-based compensation recovery (expense) (2) 30 (10) n/m
Integration and restructuring expenses (3) (9) (9) –
Contract renegotiation fee (4) – (52) n/m
Adjustment for CRTC Part II fees decision (5) (25) – n/m
Operating profit (1) $ 1,167 $ 831 40
Adjusted operating profit margin (1) 40.7% 38.7%
(1) As defined. See the sections entitled “Key Performance Indicators and Non-GAAP Measures” and “Supplementary Information: Non-GAAP Calculations”.
(2) See the section entitled “Stock-based Compensation”.
(3) Costs incurred relate to severances resulting from the restructuring of our employee base to improve our cost structure in light of the declining economic conditions and the integration of Call-Net,
Futureway and Aurora Cable.
(4) One-time charge resulting from the renegotiation of an Internet-related services agreement.
(5) Relates to an adjustment for CRTC Part II fees related to prior periods. See the section entitled “Government Regulation and Regulatory Developments”.