Rogers 2009 Annual Report Download - page 42

46 ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financing
Our long-term debt instruments are described in Note 14 and Note
15 to the 2009 Audited Consolidated Financial Statements. During
2009, the following financing activities took place.
On May 26, 2009, we issued $1.0 billion principal amount of public
debt securities, comprised of 5.80% Senior Notes due 2016 (the
“2016 Notes”). The 2016 Notes were issued at a discount of 99.767%
for an effective yield of 5.841% per year. RCI received aggregate
net proceeds of $993 million from the issuance of the 2016 Notes
after deducting the issue discount, underwriting commission and
other related expenses. The 2016 Notes are unsecured and are
guaranteed on an unsecured basis by each of Rogers Wireless
Partnership and Rogers Cable Communications Inc. and rank pari
passu with all of RCI’s other senior unsecured and unsubordinated
notes and debentures and bank credit facility.
On November 4, 2009, we issued $1.0 billion aggregate principal
amount of public debt securities, comprised of $500 million of
5.38% Senior Notes due 2019 (the “2019 Notes”) and $500 million
of 6.68% Senior Notes due 2039 (the “2039 Notes”). The 2019 Notes
were issued at a discount of 99.931% for an effective yield of 5.389%
per year and the 2039 Notes were issued at a discount of 99.897%
for an effective yield of 6.688% per year. RCI received aggregate
net proceeds of $993 million from the issuance of the 2019 Notes
and the 2039 Notes after deducting the respective issue discounts,
underwriting commissions and other related expenses. The 2019
Notes and the 2039 Notes are unsecured and are guaranteed on an
unsecured basis by each of Rogers Wireless Partnership and Rogers
Cable Communications Inc. and rank pari passu with all of RCI’s
other senior unsecured and unsubordinated notes and debentures
and bank credit facility.
On December 15, 2009, we redeemed the entire outstanding
principal amount of our US$400 million (Cdn$424 million) 8.00%
Senior Subordinated Notes due 2012 at the prescribed redemption
price of 102% of the principal amount, or US$408 million (Cdn$432
million). As a result, we incurred a net loss on repayment of long
term debt of $7 million, which is expensed in the consolidated
statement of income, comprised of the $8 million cash payment for
the 2% redemption premium, partially offset by a corresponding
$1 million non-cash write-down of the related fair value increment
arising from purchase accounting.
In addition, during 2009, an aggregate $585 million net repayment
was made under our bank credit facility. As of December 31,
2009, there were no advances outstanding under our $2.4 billion
bank credit facility that matures in July 2013 and the full amount
is available to be drawn, excluding letters of credit of $47 million.
This liquidity position is also enhanced by the fact that our earliest
scheduled debt maturity is in May 2011.
Shelf Prospectuses
In order to maintain financial flexibility, in November 2007, we
filed shelf prospectuses with securities regulators to qualify debt
securities of RCI for sale in Canada and/or in the U.S. These shelf
prospectuses were scheduled to expire in December 2009. To replace
these expiring shelf prospectuses, in November 2009, we filed two
new shelf prospectuses with securities regulators to qualify debt
securities of RCI, one for the sale of up to Cdn$4 billion of debt
securities in Canada and the other for the sale of up to US$4 billion
in the United States and Ontario. These new shelf prospectuses
expire in December 2011. The notice set forth in this paragraph
does not constitute an offer of any securities for sale.
Normal Course Issuer Bid
In February 2009, we filed a NCIB authorizing us to repurchase up
to the lesser of 15 million of RCI’s Class B Non-Voting shares and
that number of Class B Non-Voting shares that can be purchased
under the NCIB for an aggregate purchase price of $300 million.
This NCIB, which expires on February 19, 2010, replaced a previously
filed NCIB which expired in January 2009.
In May 2009, we amended the NCIB to provide that we may, during
the twelve-month period commencing February 20, 2009 and
ending February 19, 2010, purchase on the TSX up to the lesser of
48 million of RCI’s Class B Non-Voting shares and that number of
Class B Non-Voting shares that can be purchased under the NCIB
for an aggregate purchase price of $1.5 billion.
2009 USES OF CASH
(In millions of dollars)
2009
Acquisition of spectrum licenses: $40
Additions to program rights: $185
Acquisitions and other net investments: $198
Payments under bank credit facility: $585
Dividends: $704
Repurchase of shares: $1,347
$5,393
Additions to PP&E: $1,910
Redemption of subordinated note: $424
20092008
2007
2008
2007
2009
2.1x2.1x2.1x
RATIO OF DEBT TO
ADJUSTED OPERATING PROFIT
20092008
2007
200
8
2007
2009
$1,886$1,464$1,328
ADJUSTED OPERATING PROFIT
LESS CAPEX AND INTEREST (FCF)
(In millions of dollars)