Rogers 2009 Annual Report Download - page 18

22 ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(1) As defined. See the sections entitled “Supplementary Information: Non-GAAP Calculations” and “Key Performance Indicators and Non-GAAP Measures”. Operating profit should not be considered as a substitute or alternative for oper-
ating income or net income, in each case determined in accordance with Canadian generally accepted accounting principles (“GAAP”). See the section entitled “Reconciliation of Net Income to Operating Profit and Adjusted Operating
Profit for the Period” for a reconciliation of operating profit and adjusted operating profit to operating income and net income under Canadian GAAP and the section entitled “Key Performance Indicators and Non-GAAP Measures”.
(2) For details on the determination of the ‘as adjusted’ amounts, which are non-GAAP measures, see the sections entitled “Supplementary Information: Non-GAAP Calculations” and “Key Performance Indicators and Non-GAAP
Measures”. The ‘as adjusted’ amounts presented above are reviewed regularly by management and our Board of Directors in assessing our performance and in making decisions regarding the ongoing operations of the business and
the ability to generate cash flows. The ‘as adjusted’ amounts exclude (i) stock-based compensation (recovery) expense; (ii) integration and restructuring expenses; (iii) contract termination fees; (iv) an adjustment for Canadian Radio-
television and Telecommunications Commission (“CRTC”) Part II fees related to prior periods; (v) pension settlement; and (vi) in respect of net income and net income per share, debt issuance costs, loss on repayment of long-term debt,
impairment losses on goodwill, intangible assets and other long-term assets; and the related income tax impact of the above amounts.
(3) See the section entitled “Stock-based Compensation”.
(4) Relates to the settlement of pension obligations for all employees in the pension plans who had retired as of January 1, 2009 as a result of annuity purchases by the Company’s pension plans.
(5) For the year ended December 31, 2009, costs incurred relate to i) severances resulting from the targeted restructuring of our employee base to combine the Cable and Wireless businesses into a communications organization and to
improve our cost structure in light of the current economic and competitive conditions; ii) severances and restructuring expenses related to the outsourcing of certain information technology functions; iii) the integration of Futureway
Communications Inc. (“Futureway”) and Aurora Cable TV Limited (“Aurora Cable”); and iv) the closure of certain Rogers Retail stores. For the year ended December 31, 2008, costs incurred relate to i) severances resulting from the
restructuring of our employee base to improve our cost structure in light of the current economic conditions; ii) the integration of Futureway and Call-Net Enterprises Inc. (“Call-Net”); iii) the restructuring of Rogers Business Solutions
(“RBS”); and iv) the closure of certain Rogers Retail stores.
(6) Relates to the termination and release of certain Blue Jays players from the remaining term of their contracts.
(7) Relates to an adjustment for CRTC Part II fees related to prior periods. See the section entitled “Government Regulation and Regulatory Developments”.
(8) See the section entitled “Reconciliation of Net Income to Operating Profit and Adjusted Operating Profit for the Period”.
(9) The corporate additions to PP&E included $151 million for the year ended December 31, 2009 and $38 million for the year ended December 31, 2008, both of which related to spending on an enterprise-wide billing and business support
system initiative.
n/m: not meaningful.
Years ended December 31,
(In millions of dollars, except per share amounts) 2009 2008 %Chg
Operating revenue
Wireless $ 6,654 $ 6,335 5
Cable
Cable Operations 3,074 2,878 7
RBS 503 526 (4)
Rogers Retail 399 417 (4)
Corporate items and eliminations (28) (12) 133
3,948 3,809 4
Media 1,407 1,496 (6)
Corporate items and eliminations (278) (305) (9)
Total 11,731 11,335 3
Adjusted operating profit(1)
Wireless 3,042 2,806 8
Cable
Cable Operations 1,298 1,171 11
RBS 35 59 (41)
Rogers Retail (9) 3 n/m
1,324 1,233 7
Media 119 142 (16)
Corporate items and eliminations (97) (121) (20)
Adjusted operating profit(1) 4,388 4,060 8
Stock-based compensation recovery(3) 33 100 (67)
Settlement of pension obligations(4) (30) - n/m
Integration and restructuring expenses(5) (117) (51) 129
Contract termination fees(6) (19) - n/m
Adjustment for CRTC Part II fees decision(7) 61 (31) n/m
Operating profit(1) 4,316 4,078 6
Other income and expense, net(8) 2,838 3,076 (8)
Net income $ 1,478 $ 1,002 48
Basic and diluted net income per share $ 2.38 $ 1.57 52
As adjusted:(2)
Net income $ 1,556 $ 1,260 23
Basic and diluted net income per share $ 2.51 $ 1.98 27
Additions to property, plant and equipment ("PP&E")(1)
Wireless $ 865 $ 929 (7)
Cable
Cable Operations 642 829 (23)
RBS 37 36 3
Rogers Retail 14 21 (33)
693 886 (22)
Media 62 81 (23)
Corporate(9) 235 125 88
Total $ 1,855 $ 2,021 (8)
Summarized Consolidated Financial Results