Rogers 2014 Annual Report Download - page 111

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We have made certain assumptions for the discount and terminal
growth rates to reflect variations in expected future cash flows. These
assumptions may differ or change quickly depending on economic
conditions or other events. It is therefore possible that future changes
in assumptions may negatively affect future valuations of cash
generating units and goodwill, which could result in impairment losses.
For purposes of impairment testing of goodwill, our cash generating
units or groups of cash generating units correspond to our reporting
segments as disclosed in note 4.
The table below is an overview of the methods and assumptions we used to determine recoverable amounts for cash generating units or groups
of cash generating units with indefinite life intangible assets or goodwill that we consider significant.
(In millions of dollars, except years and percentages)
Carrying value
of goodwill
Carrying value
of indefinite-life
intangible assets
Recoverable
amount method
Periods used
(years)
Terminal growth
rates %
Pre-tax discount
rates %
Wireless 1,155 5,576 Value in use 5 0.5 8.1
Cable 1,379 – Value in use 5 2.0 8.5
Media 923 225 Fair value less cost to sell 5 2.5 10.3
Our fair value measurement for Media is classified as level 3 in the fair
value hierarchy (see note 16).
Impairment losses
We did not record an impairment charge in 2014 or 2013 since the
recoverable amounts of the cash generating units exceeded their
carrying values.
NOTE 9: RESTRUCTURING, ACQUISITION AND OTHER
We incurred $173 million (2013 – $85 million) in restructuring,
acquisition and other expenses, comprised of:
• $131 million (2013 – $53 million) of restructuring expenses mainly
for costs relating to the reorganization associated with the
implementation of the Rogers 3.0 plan to structure teams around
our customers and remove management layers to ensure senior
leadership is closer to frontline employees and customers; and
• $42 million (2013 – $32 million) of acquisition-related transaction
costs, legal claims and other costs.
The corresponding liability was recorded in accounts payable and
accrued liabilities, other long-term liabilities and provisions.
NOTE 10: FINANCE COSTS
(In millions of dollars) Note 2014 2013
Interest on borrowings 782 734
Interest on post-employment benefits liability 23 714
Loss on repayment of long-term debt 16 29 –
Loss on foreign exchange 21 11 23
Change in fair value of derivative instruments 2(16)
Capitalized interest (26) (25)
Other 12 12
Total finance costs 817 742
NOTE 11: OTHER EXPENSE (INCOME)
(In millions of dollars) 2014 2013
Losses (income) from associates and joint ventures 23 (7)
Gain on sale of TVtropolis –(47)
Other investment income (22) (27)
Total other expense (income) 1(81)
In 2013, we sold our one-third interest in TVtropolis after obtaining
regulatory approval from the CRTC. We received proceeds of
$59 million and recorded a gain of $47 million in other income.
2014 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 107