Rogers 2011 Annual Report Download - page 105

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(c) Product revenue:
Revenue is comprised of the following:
December 31,
2011 December 31,
2010
Wireless:
Postpaid $ 6,275 $ 6,229
Prepaid 326 297
Network revenue 6,601 6,526
Equipment sales 537 447
7,1386,973
Cable:
Cable Operations:
Television 1,904 1,835
Internet 927 848
Telephony 478507
3,309 3,190
RBS 405 452
Video 82143
3,796 3,785
Media:
Advertising 838763
Circulation and subscription 303 234
Retail 263 265
Blue Jays 164 156
Other 43 43
1,611 1,461
Corporate items and intercompany
eliminations (117) (77)
$ 12,428$ 12,142
5. OPERATING COSTS:
December 31,
2011 December 31,
2010
Cost of equipment sales $ 1,454 $ 1,266
Merchandise for resale 209 260
Other external purchases 4,335 4,316
Employee salaries and benefits 1,7781,729
Settlement of pension obligations
(note 20) 11 –
$ 7,787$ 7,571
6. FINANCE COSTS:
December 31,
2011 December 31,
2010
Interest on long-term debt $668$ 669
Loss on repayment of long-term debt
(note 17) 99 87
Foreign exchange loss (gain) 6(20)
Change in fair value of derivative
instruments (14) 22
Capitalized interest (29) (3)
Amortization of deferred transaction costs 813
$738$ 768
7. BUSINESS COMBINATIONS AND
DIVESTITURES:
(a) 2011 Acquisitions:
(i) Atria Networks LP:
On January 4, 2011, the Company closed an agreement to
purchase a 100% interest in Atria Networks LP (“Atria”) for cash
consideration of $426 million. Atria, based in Kitchener, Ontario,
owns and operates one of the largest fibre-optic networks in
Ontario, delivering premier business Internet and data services.
The acquisition will augment RBS’s small business and medium-
sized business offerings by enhancing its ability to deliver on-net
data centric services within and adjacent to Cable’s footprint.
The acquisition was accounted for using the acquisition method
in accordance with IFRS 3 with the results of operations
consolidated with those of the Company effective January 4,
2011 and has contributed incremental revenue of $72 million
and an operating income of $42 million (excluding depreciation
and amortization of $60 million) for the year ended
December 31, 2011. The acquisition transaction costs were
approximately $3 million and have been charged to integration,
restructuring and acquisition costs. Of these costs, $2 million was
recognized in fiscal 2010 and $1 million was recognized in the
year ended December 31, 2011.
The final fair values of the assets acquired and liabilities assumed
in the acquisition are as follows:
Fair value of consideration transferred $ 426
Current assets $ 10
PP&E 132
Customer relationships 200
Spectrum licence 4
Current liabilities (17)
Deferred tax liabilities (52)
Fair value of net identifiable assets acquired and
liabilities assumed 277
Goodwill $ 149
Goodwill represents the expected operational synergies with the
acquiree and/or intangible assets that do not qualify for separate
recognition. The goodwill was allocated to the RBS reporting
segment and is not tax deductible.
The customer relationships are being amortized over a period of
5 years.
2011 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 101