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MANAGEMENT’S DISCUSSION AND ANALYSIS
Calculations of Adjusted Operating Profit, Net Income, Earnings Per Share and Free Cash Flow
Years ended December 31,
(In millions of dollars, except per share amounts; number of shares outstanding in millions) 2011 2010
Operating profit $ 4,571 $ 4,531
Add (deduct):
Stock-based compensation expense 64 50
Settlement of pension obligations 11 –
Integration, restructuring and acquisition expenses 70 40
Other items, net –14
Adjusted operating profit $ 4,716 $ 4,635
Net income $ 1,563 $ 1,502
Add (deduct):
Stock-based compensation expense 64 50
Settlement of pension obligations 11 –
Integration, restructuring and acquisition expenses 70 40
Other items, net –14
Loss on repayment of long-term debt 99 87
Impairment of assets –11
Income tax impact of above items (60) (66)
Income tax charge, cash-settled stock options due to legislative change –40
Adjusted net income $ 1,747 $ 1,678
Adjusted basic earnings per share:
Adjusted net income $ 1,747 $ 1,678
Divided by: weighted average number of shares outstanding 543 576
Adjusted basic earnings per share $ 3.22 $ 2.91
Adjusted diluted earnings per share:
Adjusted net income $ 1,747 $ 1,678
Divided by: diluted weighted average number of shares outstanding 547 580
Adjusted diluted earnings per share $ 3.19 $ 2.89
Basic earnings per share:
Net income $ 1,563 $ 1,502
Divided by: weighted average number of shares outstanding 543 576
Basic earnings per share $2.88 $ 2.61
Diluted earnings per share:
Net income $ 1,563 $ 1,502
Divided by: diluted weighted average number of shares outstanding 547 580
Diluted earnings per share $2.86$ 2.59
Calculation of Free Cash Flow
Adjusted operating profit $ 4,716 $ 4,635
Add (deduct):
PP&E expenditures (2,127) (1,834)
Interest on long-term debt, net of capitalization (639) (666)
Cash income taxes (99) (152)
Free cash flow $1,851 $ 1,983
76 ROGERS COMMUNICATIONS INC. 2011 ANNUAL REPORT