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ROGERS COMMUNICATIONS INC. 2010 ANNUAL REPORT 21
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating Highlights and Significant Developments in 2010
• Generatedrevenuegrowthof5%atWirelessnetwork,4%atCable
Operations and 7% at Media, with consolidated annual revenue
growthof4%.Adjustedoperatingprotgrew6%to$4,653million
and adjusted operating profit margins expanded by 80 basis points
to38.2%.
• InFebruary2010,werenewedournormalcourseissuerbid(“NCIB”)
to repurchase up to the lesser of $1.5 billion or 43.6 million Class B
Non-Voting shares during the twelve-month period ending February
21, 2011, under which we purchased for cancellation 37.1 million
ClassB Non-Voting shares during 2010 for $1.3 billion.
• InFebruary2010,weincreasedtheannualizeddividendfrom$1.16
to $1.28 per Class A Voting and Class B Non-Voting share, paying out
$734 million in dividends to shareholders during the year.
• Weclosed$1.7billionaggregateprincipalamountofinvestment
grade debt offerings during the year, consisting of $800 million of
6.11%SeniorNotesdue2040and$900millionof4.70%SeniorNotes
due 2020. Among other things, proceeds of the offerings were used
to repay bank debt and redeem our public debt issues maturing in
2011. We redeemed all three of our public debt issues maturing in
2011,includingUS$490millionof9.625%SeniorNotes,$460million
of7.625%SeniorNotesand$175millionof7.25%SeniorNotes.In
total,wereducedourweightedaveragecostofborrowingto6.68%
atDecember31,2010from7.27%atDecember31,2009.
• We increased our ownership position in Cogeco Cable Inc. and
Cogeco Inc. for investment purposes, with the acquisition of
892,250 subordinate voting shares of Cogeco Cable Inc. and 946,090
subordinate voting shares of Cogeco Inc.
• Weincreasedfreecashow,denedasadjustedoperatingprot
less PP&E expenditures and interest on long-term debt, by 14%
from 2009 levels to $2.1 billion. Free cash flow per share increased
by23%reectingthegrowthinunderlyingfreecashowandthe
accretion from our share buybacks, which have decreased the base of
outstanding shares.
• AtDecember31,2010,therewerenoadvancesoutstandingunder
our $2.4 billion committed bank credit facility that matures in July
2013. This strong liquidity position is further enhanced by the fact
that our earliest scheduled debt maturity is in May 2012, together
providing us with substantial liquidity and flexibility.
• Subsequenttotheendof2010,onFebruary15,2011,weannounced
thatourBoardofDirectorshadapproved a11%increase inthe
annualized dividend to $1.42 per share effective immediately, and
that it has approved the renewal of our NCIB share buyback program
authorizing the repurchase of up to $1.5 billion of Rogers shares on
the open market during the next twelve months.
• Alsosubsequenttotheendoftheyear,onFebruary18,2011,we
announced that we have issued notices to redeem on March 21,2011
allofourUS$350millionprincipalamountof7.875%SeniorNotes
due2012andallofourUS$470millionprincipalamountof7.25%
Senior Notes due 2012, in each case at the applicable redemption
price plus accrued interest to the date of redemption, as prescribed
in the applicable indenture.
Year Ended December 31, 2010 Compared to Year Ended
December31,2009
For the year ended December 31, 2010, Wireless, Cable and Media
represented 57%, 34% and 12% of our consolidated revenue,
respectively(2009–57%,34%and12%),offsetbycorporateitemsand
eliminationsof3%.Onthebasisofconsolidatedadjustedoperating
prot,Wireless,CableandMediaalsorepresented68%,31%and3%,
respectively(2009–69%,30%and3%),offsetbycorporateitemsand
eliminationsof2%(2009–2%).
For detailed discussions of Wireless, Cable and Media, refer to the
respective segment discussions below.
CONSOLIDATED ADJUSTED OPERATING PROFIT BY SEGMENT
(%)
Cable 30% Wireless 67%
Media 3%
CONSOLIDATED REVENUE BY SEGMENT
(%)
Media 12%
Wireless 56%
Cable 32%