Rogers 2012 Annual Report Download - page 99

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(b) Revenue by product is as follows:
2012 2011
Wireless:
Postpaid $ 6,402 $ 6,275
Prepaid 317 326
Network revenue 6,719 6,601
Equipment sales 561 537
Total Wireless 7,280 7,138
Cable:
Cable television 1,868 1,878
Internet 998 926
Home phone 477 478
Service revenue 3,343 3,282
Equipment sales 15 27
Total Cable 3,358 3,309
RBS:
Next generation 162 128
Legacy 183 271
Service revenue 345 399
Equipment sales 66
Total RBS 351 405
Media:
Advertising 784 816
Subscription 264 241
Retail 276 272
Other 296 282
Total Media 1,620 1,611
Corporate items and intercompany
eliminations (123) (117)
$ 12,486 $ 12,346
4. OPERATING COSTS:
2012 2011
Cost of equipment sales and direct channel
subsidies $ 1,605 $ 1,454
Merchandise for resale 173 171
Other external purchases 4,138 4,304
Employee salaries and benefits 1,813 1,742
Settlement of pension obligations (note 21) –11
$ 7,729 $ 7,682
5. FINANCE COSTS:
2012 2011
Interest on long-term debt $ 691 $ 668
Loss on repayment of long-term debt
(note 17) –99
Foreign exchange loss (gain) (9) 6
Change in fair value of derivative
instruments 1(14)
Capitalized interest (28) (29)
Other 98
$ 664 $ 738
6. DISCONTINUED OPERATIONS:
During the second quarter of 2012, the Company discontinued its
Video segment. Accordingly, the Video segment results of operations
have been reported as discontinued operations. As of June 2012,
Rogers’ stores no longer offered video and game rentals or sales at
any of its retail locations. Certain of these stores continue to serve
customers’ wireless and cable needs. The results of the discontinued
operations are as follows:
2012 2011
Operating revenue $18$82
Operating costs (30) (105)
(12) (23)
Integration, restructuring and acquisition costs (30) (14)
Loss before income taxes (42) (37)
Income tax recovery 10 10
Loss from discontinued operations for the year $ (32) $ (27)
The Video segment did not have any significant assets or liabilities as
at December 31, 2012. Cash flows from operating activities for the
discontinued Video segment for the year ended December 31, 2012
were $2 million (2011 – $1 million). The Video segment did not have
any cash flows from investing or financing activities for the years
ended December 31, 2012 and 2011.
7. BUSINESS COMBINATIONS AND
DIVESTITURES:
There were no individually material business combinations or
divestitures during 2012.
During 2011, the Company made the following acquisitions:
• On January 4, 2011, the Company closed an agreement to purchase
a 100% interest in Atria Networks LP (“Atria”) for cash
consideration of $426 million. Atria, based in Kitchener, Ontario,
owns and operates one of the largest fibre-optic networks in
Ontario, delivering premier business Internet and data services. The
acquisition will augment RBS’s small business and medium-sized
business offerings by enhancing its ability to deliver on-net data
centric services within and adjacent to Cable’s footprint.
• On January 31, 2011, the Company closed an agreement to acquire
all of the assets of Edmonton, Alberta radio station BOUNCE
(CHBN-FM) for cash consideration of $22 million. The acquisition of
this radio station was made to increase the Company’s presence in
the Edmonton market.
• On January 31, 2011, the Company closed an agreement to acquire
all of the assets of London, Ontario radio station, BOB-FM (CHST-
FM), for cash consideration of $16 million. The acquisition of this
radio station was made to enter into the London, Ontario market.
• On February 28, 2011, the Company closed an agreement to
acquire all of the assets of Compton Cable T.V. Ltd. (“Compton”)
for cash consideration of $40 million. Compton provides cable
television, Internet and telephony services in Port Perry, Ontario
and the surrounding area. The acquisition was made to enter into
the Port Perry, Ontario market and is adjacent to the existing Cable
footprint.
2012 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 95