Rogers 2009 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2009 Rogers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT 101
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Depreciation expense for 2009 amounted to $1,543 million
(2008 – $1,456 million).
PP&E not yet in service and, therefore, not depreciated at December
31, 2009 amounted to $1,013 million (2008 – $853 million).
(A) IMPAIRMENT:
(i) Goodwill:
The Company tested goodwill for impairment during 2009 and
no impairment of goodwill was recorded.
In the fourth quarter of 2008, the Company determined that the
fair value of its conventional television reporting unit was lower
than its carrying value. This primarily resulted from weakening
of industry expectations in the conventional television business
and declines in advertising revenues. As a result, the Company
recorded a goodwill impairment charge of $154 million related
to its conventional television reporting unit, which is included
in the Company’s Media operating segment.
In assessing whether or not there is an impairment, the
Company uses a combination of approaches to determine the
fair value of a reporting unit, including both the discounted
cash flows and market approaches. If there is an indication of
impairment, the Company uses a discounted cash flow model
in estimating the amount of impairment. Under the discounted
cash flows approach, the Company estimates the discounted
future cash flows for three to seven years, depending on the
reporting unit, and a terminal value. The future cash flows are
based on the Company’s estimates and include consideration
for expected future operating results, economic conditions and
a general outlook for the industry in which the reporting unit
operates. The discount rates used by the Company consider
debt to equity ratios and certain risk premiums. The terminal
value is the value attributed to the reporting unit’s operations
beyond the projected time period of three to six years using a
perpetuity rate based on expected economic conditions and a
general outlook for the industry. Under the market approach,
the Company estimates the fair value of the reporting unit by
multiplying normalized earnings before interest, income taxes
and depreciation and amortization by multiples based on
market inputs.
The Company has made certain assumptions for the discount and
terminal growth rates to reflect variations in expected future
cash flows. These assumptions may differ or change quickly
depending on economic conditions or other events. Therefore,
it is possible that future changes in assumptions may negatively
impact future valuations of reporting units and goodwill which
would result in further goodwill impairment losses.
(ii) Intangible assets:
In the fourth quarter of 2009, the Company recorded an
impairment charge of $4 million relating to the CIKZ Kitchener
broadcast license. Using the Greenfield income approach (in
which the value is determined based on the present value of
required resources and eventual returns of the broadcast
licences), the Company determined the fair value of the CIKZ
Kitchener broadcast license to be lower than its carrying value.
In addition, the Company recorded an impairment charge of
$1 million related to the channel m (now part of OMNI) broadcast
license using the Greenfield income approach and replacement
cost. The Company determined the fair value of the channel m
broadcast license to be lower than its carrying value.
In the fourth quarter of 2008, the Company recorded an
impairment charge of $75 million relating to the Citytv
broadcast licences. Using the Greenfield income approach and
replacement cost, the Company determined the fair value of the
Citytv broadcast licences to be lower than their carrying value.
In addition, the Company recorded an impairment charge
of $14 million related to the Citytv brand name as the Citytv
10. PROPERTY, PLANT AND EQUIPMENT:
11. GOODWILL AND INTANGIBLE ASSETS:
Details of PP&E are as follows:
2009 2008
Cost
Accumulated
depreciation
Net book
value Cost
Accumulated
depreciation
Net book
value
Land and buildings $ 828 $ 181 $ 647 $ 762 $ 156 $ 606
Towers, head-ends and transmitters 1,361 833 528 1,179 705 474
Distribution cable and subscriber drops 5,058 3,055 2,003 4,874 2,802 2,072
Network equipment 5,530 2,847 2,683 5,320 2,805 2,515
Wireless network radio base station equipment 1,219 654 565 1,459 876 583
Computer equipment and software 2,853 1,974 879 2,424 1,730 694
Customer equipment 1,358 949 409 1,260 787 473
Leasehold improvements 369 212 157 349 193 156
Equipment and vehicles 891 565 326 825 500 325
$ 19,467 $ 11,270 $ 8,197 $ 18,452 $ 10,554 $ 7,898