Rogers 2010 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2010 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 120

  • 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

ROGERS COMMUNICATIONS INC. 2010 ANNUAL REPORT 39
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ROGERS RETAIL
Summarized Financial Results
Years ended December 31,
(In millions of dollars, except margin) 2010 2009 %Chg
Operating revenue
Wireless and Cable sales $ 212 $ 192 10
Video rental and sales 143 207 (31)
Total Rogers Retail operating revenue 355 399 (11)
Operating expenses before the undernoted 382 408 (6)
Adjusted operating loss(1) (27) (9) 200
Stock-based compensation recovery(2) – 1 n/m
Settlement of pension obligations(3) –(1) n/m
Integration and restructuring expenses(4) (7) (12) (42)
Other items, net(5) 2–n/m
Operating loss(1) $ (32) $ (21) 52
Adjusted operating loss margin(1) (7.6%) (2.3%)
(1) As defined. See the sections entitled “Key Performance Indicators and Non-GAAP Measures” and “Supplementary Information: Non-GAAP Calculations”.
(2) See the section entitled “Stock-based Compensation”.
(3) 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.
(4) For the year ended December 31, 2010, costs incurred relate to i) severances resulting from the targeted restructuring of our employee base; and ii) the closure of certain Rogers Retail stores. 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
ii) the closure of certain Rogers Retail stores.
(5) Relates to the resolution of accruals relating to prior periods.
Acquisition of Atria Networks LP
Subsequent to the year-end 2010, on January 4, 2011, Cable acquired
Atria Networks LP (“Atria”) for cash consideration of $425 million.
Atria, based in Kitchener, Ontario, owns and operates one of the largest
fibre-optic networks in Ontario, delivering on-net data networking
services to business customers in approximately 3,700 buildings in and
adjacent to Cable’s service area.
Cable Additions to PP&E
Rogers Retail Revenue
The decrease in Rogers Retail revenue for 2010, compared to 2009, was
the result of a continued decline in video rental and sales activity. This
was partially offset by the continued growth in sales and services
associated with Wireless and Cable customers.
Early in 2010, Rogers began an initiative to more deeply integrate its
wireless, cable and video rental distribution channels to better respond
to changing customer needs and preferences. As a result of this
integration, certain facilities and stores associated principally with the
video rental portion of Rogers Retail have been and will continue to
be closed.
Rogers Retail Adjusted Operating Loss
The adjusted operating loss at Rogers Retail increased for 2010,
compared to 2009, reflecting the changes and trends noted above.
CABLE ACQUISITIONS
Acquisition of Blink Communications Inc.
OnJanuary29,2010,Cableacquired100%oftheoutstandingcommon
shares of Blink, a wholly-owned subsidiary of Oakville Hydro
Corporation, for cash consideration of $131 million. Blink is a facilities-
based, data network service provider that delivers next generation and
leading-edge services, to small and medium-sized businesses, including
municipalities, universities, schools and hospitals, in the Oakville,
Milton, and Mississauga, Ontario areas. The acquisition was accounted
for using the acquisition method with the results of operations
consolidated with those of ours effective January 29, 2010.
Acquisition of Kincardine Cable T.V. Ltd.
On July 30, 2010, Cable acquired the assets of Kincardine for cash
consideration of $20 million. Kincardine provides cable television and
Internet services in Kincardine, Ontario and the surrounding area. The
acquisition was accounted for using the acquisition method with the
results of operations consolidated with those of ours effective
July30,2010.
Business Solutions 6% Retail 2%
Cable Operations 92%
CABLE ADDITIONS TO PP&E