Rogers 2011 Annual Report Download - page 115

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
time, subject to a certain prepayment premium. The net proceeds
from the offering were approximately $895 million after deduction of
the original issue discount and debt issuance.
On August 25, 2010, the Company issued $800 million of 6.11% Senior
Notes which mature on August 25, 2040. The notes are redeemable,
in whole or in part, at the Company’s option, at any time, subject to a
certain prepayment premium. The net proceeds from the offering
were approximately $794 million after deduction of the original issue
discount and debt issuance costs.
Debt issuance costs of $10 million related to these debt issuances
were incurred and capitalized in the year ended December 31, 2010.
These have been deferred and are included as deferred transaction
costs in the carrying value of the long-term debt.
(d) Redemption of Senior Notes:
2011 Redemptions:
On March 21, 2011, the Company redeemed the entire outstanding
principal amount of its U.S. $350 million ($342 million) 7.875% Senior
Notes due 2012 at the prescribed redemption price of 107.882% of
the principal amount effective on that date. The Company incurred a
loss on the repayment of the Senior Notes aggregating $42 million,
including aggregate redemption premiums of $27 million, a net
loss on the termination of the associated Debt Derivatives of
$14 million due to amounts previously recognized in the hedging
reserve in equity and a write-off of deferred transaction costs of
$1 million. Concurrent with this redemption, on March 21, 2011, the
Company terminated the associated Debt Derivatives aggregating
U.S. $350 million notional principal amount. The Company made a
net payment of approximately $219 million to terminate these Debt
Derivatives.
On March 21, 2011, the Company redeemed the entire outstanding
principal amount of its U.S. $470 million ($460 million) 7.25% Senior
Notes due 2012 at the prescribed redemption price of 110.735% of
the principal amount effective on that date. The Company incurred a
loss on the repayment of the Senior Notes aggregating $57 million,
including aggregate redemption premiums of $49 million, a net loss
on the termination of the associated Debt Derivatives of $8 million
due to amounts previously recognized in the hedging reserve in
equity, and a write-off of deferred transaction costs of $1 million, and
offset by a write-down of a previously recorded fair value increment
of $1 million. Concurrent with this redemption, on March 21, 2011,
the Company terminated the associated Debt Derivatives aggregating
U.S. $470 million notional principal amount. The Company made a
net payment of approximately $111 million to terminate these Debt
Derivatives.
As a result of these redemptions, the Company paid an aggregate of
approximately $878 million, including approximately $802 million
aggregate principal amount and $76 million for the premiums
payable in connection with the redemptions. In addition, concurrent
with the redemptions, the Company terminated the associated Debt
Derivatives aggregating U.S. $820 million notional principal amount
and made an aggregate net payment of approximately $330 million
to terminate these Debt Derivatives.
The total loss on repayment of the Senior Notes was $99 million for
the year ended December 31, 2011.
2010 Redemptions:
On August 27, 2010, the Company redeemed the entire outstanding
principal amount of its U.S. $490 million ($516 million) 9.625% Senior
Notes due 2011 at the prescribed redemption price of 105.999% of
the principal amount effective on that date. The Company incurred a
net loss on the repayment of the Senior Notes aggregating
$39 million, including aggregate redemption premiums of
$31 million, a net loss on the termination of the associated Debt
Derivatives of $16 million, offset by a write-down of a previously
recorded fair value increment of $8 million. Concurrent with this
redemption, on August 27, 2010, the Company terminated the
associated Debt Derivatives aggregating U.S. $500 million notional
principal amount, including the U.S. $10 million notional principal
amount which were not accounted for as hedges. The Company made
a net payment of approximately $269 million to terminate these Debt
Derivatives.
On August 31, 2010, the Company redeemed the entire outstanding
principal amount of its $460 million 7.625% Senior Notes due 2011 at
the prescribed redemption price of 107.696% of the principal amount
effective on that date. The Company incurred a net loss on repayment
of the Senior Notes aggregating $35 million.
On August 31, 2010, the Company redeemed the entire outstanding
principal amount of its $175 million 7.25% Senior Notes due 2011 at
the prescribed redemption price of 107.219% of the principal amount
effective on that date. The Company incurred a net loss on repayment
of the Senior Notes aggregating $13 million.
As a result of these redemptions, the Company paid an aggregate of
approximately $1,230 million, including approximately $1,151 million
aggregate principal amount and $79 million for the premiums
payable in connection with the redemptions.
The total loss on repayment of the Senior Notes was $87 million for
the year ended December 31, 2010.
(e) Unsecured Obligations:
Prior to the Company’s reorganization completed on July 1, 2010,
RCI’s public debt originally issued by Rogers Cable Inc. had Rogers
Cable Communications Inc. (“RCCI”), a wholly-owned subsidiary, as a
co-obligor, and Rogers Wireless Partnership (“RWP”), a wholly-owned
subsidiary, as an unsecured guarantor, while RCI’s public debt
originally issued by Rogers Wireless Inc. had RWP as a co-obligor and
RCCI as an unsecured guarantor. Similarly, RCCI and RWP had
provided unsecured guarantees for the public debt issued directly by
RCI, the bank credit facility and the Derivatives. Accordingly, RCI’s
bank credit facility, senior public debt and Derivatives ranked pari
passu on an unsecured basis.
July 1, 2010 corporate reorganization:
On June 30, 2010, RWP changed its name to Rogers Communications
Partnership (“RCP”). On July 1, 2010, the Company completed a
reorganization which included the amalgamation of RCI and RCCI and
another of RCI’s wholly-owned subsidiaries forming one
amalgamated company under the name Rogers Communications Inc.
Following this amalgamation, certain of the operating assets and
operating liabilities of the amalgamated company together with all
of its employees were transferred to RCP, subject to certain
exceptions. The amalgamated company did not transfer its interests
or obligations in or under: equity interests in any subsidiaries; long-
term debt; derivative instruments; real estate assets; and
intercompany notes.
As a result of this reorganization, effective July 1, 2010, RCP holds
substantially all of the Company’s shared services and Cable and
Wireless operations. Reporting continues to reflect the Cable and
Wireless services as separate operating segments.
In addition, RCCI ceased to be a separate legal entity on July 1, 2010
as a result of the amalgamation and effective July 1, 2010 RCCI is no
longer a guarantor or obligor, as applicable, for the Company’s bank
credit facility, public debt and Derivatives. Following the
amalgamation, RCI continues to be the obligor in respect of each of
the Company’s bank credit facility, public debt and Derivatives, while
RCP remains either a co-obligor or guarantor, as applicable, for the
public debt and a guarantor for the bank credit facility and
2011 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 111