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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
94 ROGERS COMMUNICATIONS INC. 2010 ANNUAL REPORT
The Company has contributed certain assets to joint ventures involved
in the provision of wireless broadband Internet service and in certain
mobile commerce initiatives. As at December 31, 2010 and 2009 and for
the years then ended, proportionately consolidating these joint
ventures resulted in the following increases (decreases) in the accounts
of the Company:
2010 2009
Long-term assets $ 143 $ 103
Current liabilities 50 16
Revenue 1–
Expenses 31 32
Net loss for the year (30) (32)
In 2010, the Company completed the purchase of spectrum and
broadcast licences from Craig Wireless (“Craig”) and YourLink Inc.
(“YourLink”) (through Inukshuk Wireless Partnership (“Inukshuk”), the
Company’s 50% owned joint venture with Bell Canada). Under the
agreement, Inukshuk paid $80 million for Craig’s 61 MHz of BRS
spectrum licences in the provinces of British Columbia and Manitoba
and paid $14 million for YourLink’s 61 MHz spectrum in the province of
Saskatchewan. The Company recorded an increase in spectrum licences
of $47 million related to its proportionate share of the purchases.
In 2009, Inukshuk completed the purchase of spectrum and broadcast
licences from Look Communications Inc. (“Look”). Under the agreement,
Inukshuk paid $80 million for Look’s 92 MHz of spectrum in the
provinces of Ontario and Quebec. The Company recorded an increase in
spectrum licences of $40 million related to its proportionate share of
the purchase.
In 2007, the Company contributed its 2.3 GHz and 3.5 GHz spectrum
licences with a carrying value of $11 million to Inukshuk for non-cash
consideration of $58 million. A deferred gain of $24 million, being the
portion of the excess of fair value over carrying value related to the
other non-related venturer’s interest in the spectrum licences
contributed by the Company, was recorded on contribution of these
spectrum licences. This deferred gain is recorded in other long-term
liabilities and is being amortized to income on a straight-line basis over
seven years, of which $4 million was recognized in 2010 (2009 –
$4million). In addition to a cash contribution of $8 million, the other
venturer also contributed its 2.3 GHz and 3.5 GHz spectrum licences
valued at $50 million to the joint venture. The Company recorded an
increase in spectrum licences and cash of $25 million and $4million,
respectively, related to its proportionate share of the contribution by
the other venturer.
During 2010, the Company incurred $21 million (2009 – $88 million) of
restructuring expenses related to severances resulting from the
targeted restructuring of its employee base and to improve the
Company’s cost structure.
During 2010, the Company incurred $9 million (2009 – $23 million) of
restructuring expenses resulting from the outsourcing of certain
information technology functions.
During 2010, the Company incurred $5 million (2009 – $4 million) related
to the closure of 50 (2009 – 20) underperforming retail store locations,
primarily located in the province of Ontario.
During 2010, the Company incurred $5 million (2009 – $2 million) of
acquisition transaction costs for business combinations and integration
expenses related to previously acquired businesses and related
restructuring.
The additions to the liabilities related to the integration and
restructuring activities and payments made against such liabilities
during 2010 are as follows:
5. INVESTMENT IN JOINT VENTURES:
6. INTEGRATION AND RESTRUCTURING EXPENSES:
As at
December 31,
2009 Additions Payments
As at
December 31,
2010
Severances resulting from the targeted restructuring of the Company’s employee base $ 83 $ 21 $ (57) $ 47
Outsourcing of certain information technology functions 9 9 (18) –
Retail store closures 2 5 (3) 4
Acquisition costs and integration of previously acquired businesses 2 5 (4) 3
$ 96 $ 40 $ (82) $ 54
The remaining liability, which is included in accounts payable and accrued liabilities as at December 31, 2010, will be paid over the course of 2011
and 2012.