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96 ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at
December 31,
2008 Adjustments
Final
purchase
price
allocation
Purchase price $ 39 $ – $ 39
Current assets $ 11 $ – $ 11
Broadcast licence –15 15
Future income
tax liabilities –(3) (3)
Current liabilities (3) –(3)
Fair value of
net assets acquired $ 8 $ 12 $ 20
Goodwill $ 31 $ (12) $ 19
(A) 2009 ACQUISITIONS:
(i) K-Rock 1057 Inc.:
On May 31, 2009, the Company acquired the assets of K-Rock
1057 Inc. for cash consideration of $11 million. K-Rock 1057 Inc.
held the assets of radio stations K-Rock and Kix Country in
Kingston, Ontario. The acquisition was accounted for using the
purchase method with the results of operations consolidated
with those of the Company effective May 31, 2009. The fair
values of the assets acquired and liabilities assumed, which
were finalized during 2009, are as follows:
Purchase price $ 11
PP&E $ 1
Broadcast licence 4
Fair value of net assets acquired $ 5
Goodwill $ 6
The goodwill has been allocated to the Media reporting
segment and is tax deductible.
(B) 2008 ACQUISITIONS AND DIVESTITURES:
(i) Outdoor Life Network:
On July 31, 2008, the Company acquired the remaining two-
thirds of the shares of Outdoor Life Network that it did not
already own, for cash consideration of $39 million. The
acquisition was accounted for using the purchase method
with the results of operations consolidated with those of the
Company effective July 31, 2008.
During 2009, the Company finalized the purchase price
allocation for the Outdoor Life Network acquisition. This
resulted in an increase in broadcast licence of $15 million,
an increase in future income tax liabilities of $3 million, and
a corresponding decrease in goodwill of $12 million. The
adjustments had the following effects on the purchase price
allocation from the amounts recorded and disclosed in the
2008 consolidated financial statements:
The goodwill has been allocated to the Media reporting
segment and is not tax deductible.
(ii) Aurora Cable TV Limited:
On June 12, 2008, the Company acquired 100% of the
outstanding shares of Aurora Cable TV Limited (“Aurora Cable”)
for cash consideration of $80 million, including a $16 million
deposit paid during the first quarter of 2008. In addition, the
Company contributed $10 million to simultaneously pay down
certain credit facilities of Aurora Cable. Aurora Cable provides
cable television, Internet and telephony services in the Town
of Aurora and the community of Oak Ridges, in Richmond Hill,
Ontario. The acquisition was accounted for using the purchase
method with the results of operations consolidated with those
of the Company effective June 12, 2008. The fair values of the
assets acquired and liabilities assumed, which were finalized
during 2008 are as follows:
Purchase price $ 80
Current assets $ 1
Subscriber base 13
PP&E 31
Current liabilities (3)
Future income tax liabilities (8)
Credit facilities (10)
Fair value of net assets acquired $ 24
Goodwill $ 56
The goodwill has been allocated to the Cable reporting
segment and is not tax deductible.
(iii) channel m:
On April 30, 2008, the Company acquired the assets of
Vancouver multicultural television station channel m, from
Multivan Broadcast Corporation, for cash consideration of $61
million. The acquisition was accounted for using the purchase
method with the results of operations consolidated with those
of the Company effective April 30, 2008. The fair values of the
assets acquired and liabilities assumed, which were finalized
during 2008 are as follows:
Purchase price $ 61
Current assets $ 5
Broadcast licence 9
PP&E 6
Current liabilities (7)
Fair value of net assets acquired $ 13
Goodwill $ 48
The goodwill has been allocated to the Media reporting
segment and is tax deductible.
4. BUSINESS COMBINATIONS AND DIVESTITURES: