Rogers 2011 Annual Report Download - page 127

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
including proposals on acquisitions or other major investments or
divestitures, as well as annual capital and operating budgets.
In February 2011, the TSX accepted a notice filed by the Company of
its intention to renew its prior NCIB for a further one-year period. The
TSX notice provides that the Company may, during the twelve-month
period commencing February 22, 2011 and ending February 21, 2012,
purchase on the TSX up to the lesser of 39.8 million Class B
Non-Voting shares, representing approximately 9% of the then issued
and outstanding Class B Non-Voting shares, and that number of Class
B Non-Voting shares that can be purchased under the NCIB for an
aggregate purchase price of $1.5 billion, with the actual number of
Class B Non-Voting shares purchased, if any, and the timing of such
purchases to be determined by the Company considering market
conditions, share prices, its cash position, and other factors.
During 2011, the Company purchased for cancellation an aggregate
30,942,824 Class B Non-Voting shares for an aggregate purchase price
of $1,099 million, resulting in a reduction to stated capital, share
premium and retained earnings of $30 million, $870 million and
$199 million, respectively. An aggregate 21,942,824 of these shares
were purchased for cancellation directly under the NCIB for an
aggregate purchase price of $814 million. The remaining 9,000,000
shares were purchased for cancellation pursuant to private
agreements between the Company and arm’s-length third-party
sellers for an aggregate purchase price of $285 million. These
purchases were made under issuer bid exemption orders issued by the
Ontario Securities Commission and were included in calculating the
number of Class B Non-Voting shares that the Company purchased
pursuant to the NCIB. The NCIB expired on February 21, 2012.
During 2011, the Company issued $1,450 million of 5.34% Senior
Notes due 2021 and $400 million of 6.56% Senior Notes due 2041
(note 17(c)).
During 2011, the Company redeemed the entire outstanding principal
amount of its U.S. $350 million ($342 million) 7.875% Senior Notes
due 2012 and U.S. $470 million ($460 million) 7.25% Senior Notes due
2012 (note 17(d)).
During 2011, the Company terminated the associated Debt
Derivatives hedging the U.S. $350 million 7.875% Senior Subordinated
Notes and the U.S. $470 million 7.25% Senior Subordinated Notes.
The settlement of these Debt Derivatives resulted in a net payment by
the Company of $219 million and $111 million, respectively
(note 17(d)).
The Company monitors debt leverage ratios as part of the
management of liquidity and shareholders’ return and to sustain
future development of the business.
The Company is not subject to externally imposed capital
requirements and its overall strategy with respect to capital risk
management remains unchanged from the year ended December 31,
2010.
24. RELATED PARTY TRANSACTIONS:
(a) Controlling shareholder:
The ultimate controlling shareholder of the Company is the Rogers
Control Trust which holds voting control of the Company. The
beneficiaries of the Trust are members of the Rogers family. The
Rogers family is represented as Directors, Senior Executive and
Corporate Officers of the Company.
The Company entered into certain transactions with the ultimate
controlling shareholder of the Company and private Rogers’ family
holding companies controlled by the controlling shareholder of the
Company. These transactions, as summarized below, were recorded at
the amount agreed to by the related parties and are subject to the
terms and conditions of formal agreements approved by the Audit
Committee.
The Company sold an aircraft to a private Rogers’ family holding
company for cash proceeds of $19 million in 2010. There were no
other significant transactions during 2011 or 2010.
(b) Transactions with key management personnel:
Key management personnel include the Directors and the most Senior
Corporate Officers of the Company that are primarily responsible for
planning, directing and controlling the Company’s business activities.
(i) Compensation:
The compensation expense associated with key management for
employee services was included in employee salaries and
benefits as follows:
December 31,
2011 December 31, 2010
Salaries, pension and other short-
term employee benefits $11 $10
Stock-based compensation
expense 27 19
$38$29
(ii) Transactions:
The Company has entered into business transactions with
companies, the partners or senior officers of which are Directors
of the Company, as summarized below:
Transaction value Balance outstanding, December 31,
2011 2010 2011 2010
Printing, legal services
and commission paid
on premiums for
insurance coverage $41 $39 $3 $8
A Director of the Company is Chairman and Chief Executive
Officer of a firm which is paid commissions for insurance
coverage. A Director of the Company is Senior Partner and
Chairman of a law firm which provides legal services. A Director
of the Company is Vice Chair and Vice President of a company
which provides printing services.
These transactions are recorded at the amount agreed to by the
related parties and are reviewed by the Audit Committee. The
outstanding balances owed to these related parties are
unsecured, interest free and due for payment in cash within
1 month from the date of the transaction. There are no
outstanding balances with these related parties relating to
similar transactions that occurred before January 1, 2010.
2011 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 123