Rogers 2011 Annual Report Download - page 43

MANAGEMENT’S DISCUSSION AND ANALYSIS
Excluding the impact of the declining circuit-switched telephony
business that Cable has divested this year, the year-over-year revenue
growth for Home Phone and Cable Operations for 2011 would have
been 4% and 5%, respectively.
(In thousands)
CABLE TELEPHONY SUBSCRIBERS
AND PENETRATION
OF HOMES PASSED
937 1,003 1,052
2009 20102011
26%27% 28%
Cable Operations Operating Expenses
Cable Operations’ operating expenses for 2011 were flat compared to
2010, due to cost reductions and efficiency initiatives across various
functions. Cable Operations continues to focus on implementing a
program of permanent cost reduction and efficiency improvement
initiatives to control the overall growth in operating expenses.
Cable Operations Adjusted Operating Profit
The year-over-year growth in adjusted operating profit was primarily
the result of the revenue growth and cost changes described above.
As a result, Cable Operations’ adjusted operating profit margins
increased to 46.8% for 2011, compared to 44.5% for 2010.
ROGERS BUSINESS SOLUTIONS
Summarized Financial Results
Years ended December 31,
(In millions of dollars, except margin) 2011(1) 2010(1) % Chg
Operating revenue $ 405 $ 452 (10)
Operating expenses before the undernoted 319 412 (23)
Adjusted operating profit(2) 8640 115
Settlement of pension obligations(3) (1) – n/m
Integration, restructuring and acquisition expenses(4) (17) (13) 31
Operating profit(2) $68$ 27 152
Adjusted operating profit margin(2) 21.2%8.8%
(1) The operating results of Blink and Atria are included in the RBS results of operations from the dates of acquisition on January 29, 2010 and January 4, 2011, respectively.
(2) As defined. See the sections entitled “Key Performance Indicators and Non-GAAP Measures” and “Supplementary Information: Non-GAAP Calculations”.
(3) Relates to the settlement of pension obligations for employees in the pension plans who had retired between January 1, 2009 and January 1, 2011, as a result of annuity
purchases by the Company’s pension plans.
(4) Costs relate to (i) severance costs resulting from the targeted restructuring of our employee base and outsourcing of certain functions; (ii) acquisition transaction costs
incurred and the integration of acquired businesses; and (iii) lease exit costs.
Summarized Subscriber Results
Years ended December 31,
(Subscriber statistics in thousands) 2011 2010 Chg
Local line equivalents(1)
Total local line equivalents 109 146 (37)
Broadband data circuits(2)(3)
Total broadband data circuits 32 42 (10)
(1) Local line equivalents include individual voice lines plus Primary Rate Interfaces (“PRIs”) at a factor of 23 voice lines each. The amount includes approximately 3,000 circuit-
switched lines which were migrated from Cable Operations to RBS during 2011.
(2) Broadband data circuits are those customer locations accessed by data networking technologies including DOCSIS, DSL, E10/100/1000, OC 3/12 and DS 1/3. Effective April 1,
2011, approximately 20,000 circuits which were previously included in RBS are now included in Cable. These subscribers were removed from the ending balance for 2011.
(3) On January 4, 2011, RBS acquired approximately 4,000 broadband data circuits from its acquisition of Atria, and these are reflected in the total amounts shown.
2011 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 39