Rogers 2010 Annual Report Download - page 36

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
40 ROGERS COMMUNICATIONS INC. 2010 ANNUAL REPORT
Cable Additions to Property, Plant and Equipment
Cable additions to PP&E are classified into the following categories:
The Cable Operations segment categorizes its PP&E expenditures
according to a standardized set of reporting categories that were
developed and agreed to by the U.S. cable television industry and that
facilitate comparisons of additions to PP&E between different cable
companies. Under these industry definitions, Cable Operations
additions to PP&E are classified into the following five categories:
• Customerpremiseequipment(“CPE”),whichincludestheequipment
for digital set-top terminals, Internet modems and associated
installation costs;
• Scalable infrastructure, which includes non-CPE costs to meet
business growth and to provide service enhancements, including
many of the costs to date of the cable telephony initiative;
• Line extensions, which includes network costs to enter new
service areas;
• Upgrades and rebuild, which includes the costs to modify or
replace existing co-axial cable, fibre-optic equipment and network
electronics; and
• Support capital, which includes the costs associated with the
purchase, replacement or enhancement of non-network assets.
Additions to Cable PP&E include continued investments in the cable
network to continue to enhance the customer experience through
increased speed and performance of our Internet service and capacity
enhancements to our digital network to allow for incremental HD and
on-demand services to be added.
The decline in Cable Operations PP&E additions for 2010, compared to
2009, resulted primarily from lower spending on Scalable infrastructure
expenditures due to the completion of certain projects associated with
our Internet platform and infrastructure investments.
RBS PP&E additions for 2010 reflect the timing of expenditures on
customer networks and support capital, while Rogers Retail PP&E
additions are attributable to enhancements made to certain
retail locations.
MEDIA
MEDIA’S BUSINESS
Media operates our radio and television broadcasting and specialty
television businesses, our consumer and trade publishing operations,
our national televised home shopping service and Rogers Sports
Entertainment. In addition to Media’s more traditional broadcast and
print media platforms, it has also invested significantly in infrastructure,
people and processes to enhance capabilities in providing digital
content, selling advertising on behalf of other digital content providers
and conducting e-commerce over the Internet.
Media’s broadcasting group (“Broadcasting”) comprises 55 radio
stations across Canada; the multicultural OMNI broadcast television
stations; the five-station Citytv broadcast television network; specialty
sports television services including Rogers Sportsnet, Sportsnet ONE
and Setanta Sports Canada; other specialty services including Outdoor
Life Network, The Biography Channel (Canada) and G4 Canada; and
The Shopping Channel, Canada’s only nationally televised shopping
service. Mediaalsoholdsa50%ownershipinDomeProductions,a
mobile sports and events production and distribution joint venture that
is a leader in HDTV production in Canada.
Media’s publishing group (“Publishing”) publishes consumer magazines
and trade and professional publications and directories in Canada.
Media’s sports entertainment group (“Sports Entertainment”) owns
the Toronto Blue Jays, a Major League Baseball (“MLB”) club, and
Rogers Centre sports and entertainment venue.
Years ended December 31,
(In millions of dollars) 2010 2009 %Chg
Additions to PP&E
Customer premise equipment $ 234 $ 185 26
Scalable infrastructure 201 259 (22)
Line extensions 43 40 8
Upgrades and rebuild 20 20 –
Support capital 113 138 (18)
Total Cable Operations 611 642 (5)
RBS 38 37 3
Rogers Retail 13 14 (7)
$ 662 $ 693 (4)
Radio 15%
Television 37%
Sports Entertainment 12%
The Shopping
Channel 17%
Publishing 19%
MEDIA REVENUE MIX