Rogers 2011 Annual Report Download - page 106

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ii) BOUNCE FM:
On January 31, 2011, the Company closed an agreement to
acquire all of the assets of Edmonton, Alberta radio station
BOUNCE (CHBN-FM) for cash consideration of $22 million. The
acquisition of this radio station was made to increase the
Company’s presence in the Edmonton market. 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 31, 2011 and has
contributed incremental revenue of $3 million and an operating
loss of $1 million for the year ended December 31, 2011. The
acquisition transaction costs were approximately $1 million and
have been charged to integration, restructuring and acquisition
costs in the current year.
The final fair values of the assets acquired and liabilities assumed
in the acquisition are as follows:
Fair value of consideration transferred $ 22
Current assets $ 1
Broadcast licence 11
Brand name 1
Fair value of net identifiable assets acquired and
liabilities assumed 13
Goodwill $ 9
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 Media reporting
segment and is tax deductible.
(iii) BOB-FM:
On January 31, 2011, the Company closed an agreement to
acquire all of the assets of London, Ontario radio station,
BOB-FM (CHST-FM), for cash consideration of $16 million. The
acquisition of this radio station was made to enter into the
London, Ontario market. 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 31, 2011 and has contributed incremental
revenue of $5 million and an operating income of $1 million for
the year ended December 31, 2011. The acquisition transaction
costs were approximately $1 million and have been charged to
integration, restructuring and acquisition costs in the current
year.
The final fair values of the assets acquired and liabilities assumed
in the acquisition are as follows:
Fair value of consideration transferred $ 16
Current assets $ 1
Broadcast licence 6
Brand name 1
Fair value of net identifiable assets acquired and
liabilities assumed 8
Goodwill $ 8
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 Media reporting
segment and is tax deductible.
(iv) Compton Cable T.V. Ltd.:
On February 28, 2011, the Company closed an agreement to
acquire all of the assets of Compton Cable T.V. Ltd. (“Compton”)
for cash consideration of $40 million. Compton provides cable
television, Internet and telephony services in Port Perry, Ontario
and the surrounding area. The acquisition was made to enter
into the Port Perry, Ontario market and is adjacent to the
existing Cable 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 February 28, 2011 and has contributed incremental
revenue of $7 million and operating income of $3 million
(excluding depreciation and amortization of $6 million) for 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 $ 40
Current assets $ 1
PP&E 10
Customer relationships 23
Current liabilities (1)
Fair value of net identifiable assets acquired and
liabilities assumed 33
Goodwill $ 7
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 Cable Operations
reporting segment and is tax deductible.
The customer relationships are being amortized over a period of
3 years.
(v) Other:
During the year ended December 31, 2011, the Company
increased its ownership interest in a subsidiary from 53% to
100% for cash consideration of $11 million. The Company
recognized this increase in the ownership interest of a previously
controlled entity as a decrease in retained earnings of
$11 million as the carrying amount of non-controlling interest
was insignificant.
During the year ended December 31, 2011, the Company made
another acquisition for cash consideration of approximately
$16 million, which has been recorded as customer relationships.
The customer relationships are being amortized over a period of
5 years.
(vi) Pro forma disclosures:
Since the acquisition dates, the Company has recorded revenue
relating to these above acquisitions of $96 million, and
operating income relating to these acquisitions of $47 million
(excluding depreciation and amortization of $66 million). If the
acquisitions had occurred on January 1, 2011, the Company’s
revenue would have been $12,437 million, and operating
income would have been $2,830 million for the year ended
December 31, 2011.
(b) 2010 Acquisitions:
(i) Blink Communications Inc.:
On January 29, 2010, the Company closed an agreement to
purchase 100% of the outstanding common shares of Blink
Communications Inc. (“Blink”), a wholly-owned subsidiary of
Oakville Hydro Corporation, for cash consideration of
$131 million. Blink is a facilities-based, data network service
102 ROGERS COMMUNICATIONS INC. 2011 ANNUAL REPORT