Rogers 2008 Annual Report Download - page 8

4 ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT
2008 was a year of unprecedented change
and many challenges for Rogers, yet
the company performed well financially,
delivering 12% revenue growth and
10% growth in both adjusted operating
profit and free cash flow, defined as adjusted
operating profit less capital expenditures
and interest expense. We were able to
deliver this respectable growth in the face
of progressively deteriorating economic
conditions and at the same time absorb
dilutive upfront investments to rapidly drive
wireless smartphone adoption.
Our subscriber growth continued at healthy
rates in 2008 reflecting the quality of our
service offerings and the increasing daily
relevance of our products to consumers and
businesses. Our wireless subscribers now
total nearly 8 million, while Internet, digital
TV and cable telephony subscriber levels
all increased.
We also continued to invest in our networks
and systems at a healthy rate. Partially as
a result, both our wireless and cable busi-
nesses are able to claim that their products
are the fastest and most reliable.
To fund the purchase of 20MHz of national
AWS spectrum that we acquired at auction
and to term out a portion of short-term
borrowing, we were successful during
August 2008 in issuing US$1.75 billion of
investment grade notes on very favour-
able terms despite extreme volatility in the
credit markets.
At the start of 2008, our Board approved
a doubling of the annual dividend to
$1.00 per share and also instituted the
company’s first ever share buyback
program, which combined to provide for
a balanced, tax efficient and shareholder
friendly allocation of a material portion of
the free cash flow the business generated.
In February 2009, we announced that
we would further increase the dividend to
$1.16 and that we were refreshing our share
buyback program for 2009.
While 2008 was obviously a very challeng-
ing period in the global equity markets,
the RCI.b shares, which declined 19% on
the TSX, actually outperformed the wire-
less and cable peer groups and the North
American broad market indexes, which all
declined by more significant amounts.
2009 will almost certainly bring many more
challenges to the economy, to our sector,
and to Rogers. As we go forward, our asset
mix and strategy are set, and our primary
focus is on execution. We have a tremendous
opportunity to continue enhancing our
customer service, sharpen our marketing
and customer relationship management
capabi lities, and become more efficient.
Our plan for 2009 strikes a healthy balance
between continued growth, the return
of increasing amounts of our growing free
cash flow to shareholders, and prudent
investments in our networks, systems and
service delivery platforms that will help assure
that such growth continues in the future.
If you live in Canada, please sample and
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entertain you, inform you and help keep
you in touch.
Thank you for your investment, confidence
and continued support.
Alan D. Horn
Chairman of the Board
Rogers Communications Inc.
In December 2008, we mourned the passing
of Ted Rogers, the company’s founder and
Chief Executive Officer. Ted was one of a
kind who built this company from one
FM radio station nearly 50 years ago into
what is today Canada’s largest wireless,
cable and media company. His absence
has been felt very much by his friends and
colleagues at Rogers during these past
few difficult months and he will be sadly
missed, but never forgotten.
Over the past several years, one of Ted’s
most urgent focuses had been to ensure
that Rogers Communications was what
he liked to call ‘industrial strength’. After
decades of rapid growth, he wanted to
make sure that the time was taken and the
investments were made to put in place the
infrastructure, management, processes and
financial strength to secure the company
both today and into the future.
Despite the challenging economic
environment and competitive landscape,
Rogers Communications is arguably in the
strongest position it has ever been –
financially, organizationally, structurally
and operationally. The company has excel-
lent positions in the fastest growing mar-
kets in the communications industry; has
powerful and well respected brands that
stand strongly for innovation, entrepre-
neurial spirit, choice and value; is a leading
provider of services that are increasingly
becoming necessities in today’s world; has
proven performance-oriented management
with solid industry expertise, technical
depth and company tenures; and is finan-
cially strong with an investment grade bal-
ance sheet, $1.8 billion of available liquidity
and no debt maturities until May 2011.
Fellow Shareholders
“While 2009 will almost certainly bring more challenges to the economy, to our sector, and
to Rogers, our plan strikes a healthy balance between continued growth, the return of
increasing amounts of our growing free cash flow to shareholders, and prudent investments
in our networks, systems and service delivery platforms that will help ensure that such
growth continues in the future.”
Alan D. Horn