Rogers 2012 Annual Report Download - page 105

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2011, the Company did not
record an impairment charge as the recoverable amounts of the
CGUs exceeded their carrying value.
14. INVESTMENTS:
2012 2011
Carrying
value Carrying value
Publicly traded companies $ 624 $ 850
Private companies 231 36
Investments in joint ventures and associates 629 221
$ 1,484 $ 1,107
(a) Private companies:
In October 2012, Media completed the purchase of 100% of the
outstanding shares of Score Media Inc. for $167 million. The shares of
Score Media were transferred to an interim CRTC-approved trust
which is responsible for the independent management of the business
in the normal course of operations until CRTC final approval is
obtained, at which point control over theScore Media business will
transfer to Rogers. Score Media owns theScore Television Network, a
national specialty TV service providing sports news, information,
highlights and live event programming across Canada. Upon final
regulatory approval, which is anticipated in the first half of 2013,
Rogers will wholly own and control theScore Television Network and
its related television assets and expects to rebrand the service under
the Sportsnet brand.
(b) Investments in joint ventures and associates companies:
In August 2012, the Company, along with BCE Inc., closed the joint
acquisition of a net 75% equity interest in Maple Leaf Sports &
Entertainment Ltd. (“MLSE”) from the Ontario Teachers’ Pension Plan.
MLSE is one of Canada’s largest sports and entertainment companies
which owns and operates the Air Canada Centre, the NHL’s Toronto
Maple Leafs, the NBA’s Toronto Raptors, the MLS’ Toronto FC, the
AHL’s Toronto Marlies and other assets. The Company’s net cash
investment, following a leveraged recapitalization of MLSE, was $540
million, representing a 37.5% equity interest in MLSE. The investment
in MLSE is accounted for using the equity method.
In December 2012, Inukshuk, a joint venture owned 50% by Rogers,
sold certain spectrum licenses and network equipment to its owners
at fair market value. Rogers and the other non-related venturer each
purchased 50% of the assets having a fair market value of $1,181
million and a carrying value of $250 million. As a result, Rogers
recorded:
• A gain on investment of $233 million representing Rogers 50%
share of the Inukshuk gain relating to the assets sold to the other
non-related venturer;
• Spectrum licences of $360 million, which includes a $15 million fee
paid in 2011 to the other non-related venturer to acquire certain
blocks of spectrum, and network equipment of $13 million
representing the fair value of the assets purchased less Rogers
share of the Inukshuk gain; and
• A decrease of $125 million in its investment in Inukshuk
representing the carrying value of the assets sold.
The following presents the summarized financial information of the
Company’s portion of joint ventures that are recorded by the
Company as investments accounted for using the equity method:
2012 2011
Statements of financial position:
Assets $ 1,100 $ 231
Liabilities 616 59
Net assets 484 172
2012 2011
Statements of income:
Revenues $85 $68
Expenses 81 62
15. OTHER LONG-TERM ASSETS:
2012 2011
Indefeasible right of use agreements $24 $25
Long-term receivables 19 16
Cash surrender value of life insurance 16 15
Deferred installation costs 13 12
Deferred pension asset (note 21) 933
Deferred compensation 910
Other 823
$98 $ 134
16. PROVISIONS:
Details of provisions and classification between current and long-term
are as follows:
Asset
retirement
obligations Onerous contracts Other Total
December 31, 2011 $ 26 $ 24 $ 23 $ 73
Additions 1 5 3 9
Adjustment to existing
provisions 2 – (4) (2)
Amounts used (3) (28) (11) (42)
December 31, 2012 $ 26 $ 1 $ 11 $ 38
Current $ 7 $ – $ – $ 7
Long-term 19 1 11 31
In the course of the Company’s activities, asset retirement obligations
arise when a number of sites and other PP&E assets are used that are
expected to have costs associated with exiting and ceasing their use.
The extent of restoration work that will ultimately be required for
these sites is uncertain. The provisions for onerous contracts relate to
contracts that have costs to fulfill in excess of the economic benefits
to be obtained. These include non-cancellable contracts, which are
expected to be completed within two years. The other provisions
include product guarantee provisions and legal provisions.
2012 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 101