Rogers 2014 Annual Report Download - page 66

MANAGEMENT’S DISCUSSION AND ANALYSIS
MARK-TO-MARKET VALUE
We record our derivatives using an estimated credit-adjusted, mark-to-
market valuation, calculated in accordance with IFRS.
December 31, 2014
(In millions of dollars, except
exchange rates)
Notional
amount
(US$)
Exchange
rate
Notional
amount
(Cdn$)
Fair value
(Cdn$)
Debt derivatives accounted for as
cash flow hedges:
As assets 5,725 1.04 5,952 853
As liabilities 305 1.19 362 (7)
Netmark-to-marketassetdebt
derivatives 6,030 1.05 6,314 846
Bond forwards accounted for as
cash flow hedges:
As assets 250 1
As liabilities 1,650 (14)
Net mark-to-market liability bond
forwards 1,900 (13)
Equity derivative not accounted for
as hedges:
As liabilities (30)
Expenditure derivatives accounted
for as cash flow hedges:
As assets 960 1.09 1,050 70
Net mark-to-market asset 873
ADJUSTED NET DEBT AND ADJUSTED NET DEBT /
ADJUSTED OPERATING PROFIT
We use adjusted net debt and adjusted net debt / adjusted operating
profit to conduct valuation-related analysis and make capital structure-
related decisions. Adjusted net debt includes long-term debt, net debt
derivatives assets or liabilities, short-term borrowings and cash and
cash equivalents.
As at December 31
(In millions of dollars, except ratios) 2014 2013
Long-term debt 114,895 13,436
Net debt derivatives assets 2(846) (51)
Short-term borrowings 842 650
Cash and cash equivalents (176) (2,301)
Adjusted net debt 314,715 11,734
Adjusted net debt / adjusted operating profit 32.9 2.4
1Includes current and long-term debt portions plus deferred transaction costs and
discounts. See “Reconciliation of Adjusted Net Debt” in the section “Non-GAAP
Measures” for the calculation of this amount.
2Includes current and long-term debt derivative portions.
3Adjusted net debt and adjusted net debt / adjusted operating profit are non-GAAP
measures and should not be considered as a substitute or alternative for GAAP
measures. These are not defined terms under IFRS, and do not have standard
meanings, so may not be a reliable way to compare us to other companies. See
“Non-GAAP Measures” for information about these measures, including how we
calculate them.
In addition to the cash and cash equivalents as at December 31, 2014
noted above, we held approximately $1.1 billion of marketable equity
securities in publicly traded companies as at December 31, 2014.
Adjusted net debt increased by $3.0 billion this year and the adjusted
net debt / adjusted operating profit increased to 2.9. This was a
planned increase primarily as a result of the financings completed in
October 2013 and March 2014 to pay for our 700 MHz spectrum
investment made in April 2014. Our long-term target range of
adjusted net debt / adjusted operating profit is a ratio of 2.0 to 2.5.
DIVIDENDS AND SHARE INFORMATION
DIVIDENDS
In February 2014, the Board authorized an increase to the annualized dividend rate from $1.74 to $1.83 per Class A Voting and Class B Non-
Voting share. On January 28, 2015, the Board authorized a further increase in the annualized dividend rate to $1.92 per Class A Voting and
Class B Non-Voting share, with the dividend to be paid in quarterly amounts of $0.48 per share.
The table below shows when dividends have been declared and paid on both classes of our shares:
Declaration date Record date Payment date
Dividend
per share
(dollars)
Dividends paid
(in millions of
dollars)
February 14, 2013 March 15, 2013 April 2, 2013 0.435 224
April 23, 2013 June 14, 2013 July 3, 2013 0.435 224
August 15, 2013 September 13, 2013 October 2, 2013 0.435 224
October 23, 2013 December 13, 2013 January 2, 2014 0.435 224
February 12, 2014 March 14, 2014 April 4, 2014 0.4575 235
April 22, 2014 June 13, 2014 July 2, 2014 0.4575 235
August 14, 2014 September 12, 2014 October 1, 2014 0.4575 235
October 23, 2014 December 11, 2014 January 2, 2015 0.4575 235
62 ROGERS COMMUNICATIONS INC. 2014 ANNUAL REPORT