Rogers 2015 Annual Report Download - page 67

MANAGEMENT’S DISCUSSION AND ANALYSIS
COMMITMENTS AND OTHER CONTRACTUAL OBLIGATIONS
CONTRACTUAL OBLIGATIONS
The table below shows a summary of our obligations under firm contractual arrangements as at December 31, 2015. See notes 3, 22, and
29 to our 2015 audited consolidated financial statements for more information.
(In millions of dollars)
Less than
1 Year 1-3 Years 4-5 Years
After
5Years Total
Short-term borrowings 800 – – – 800
Long-term debt 11,000 3,188 1,800 10,993 16,981
Net interest payments 714 1,313 1,042 6,025 9,094
Debt derivative instruments 2– (503) – (1,332) (1,835)
Expenditure derivative instruments 2(138) (25) – – (163)
Bond forwards 2–91 ––91
Operating leases 153 229 114 64 560
Player contracts 3137 166 80 – 383
Purchase obligations 4457 286 136 94 973
Property, plant and equipment 85 110 51 36 282
Intangible assets 45 75 24 12 156
Program rights 5620 1,135 1,096 2,948 5,799
Other long-term liabilities – 19 5 4 28
Total 3,873 6,084 4,348 18,844 33,149
1Principal obligations of long-term debt (including current portion) due at maturity.
2Net (receipts) disbursements due at maturity. US dollar amounts have been translated into Canadian dollars at the Bank of Canada year-end rate.
3Player contracts are Toronto Blue Jays players’ salary contracts into which we have entered and are contractually obligated to pay.
4Purchase obligations are the contractual obligations under service, product, and handset contracts we have committed to for at least the next five years.
5Program rights are the agreements into which we have entered to acquire broadcasting rights for sports broadcasting programs and films for periods in excess of one year at
contract inception.
OFF-BALANCE SHEET ARRANGEMENTS
GUARANTEES
As a regular part of our business, we enter into agreements that
provide for indemnification and guarantees to counterparties in
transactions involving business sale and business combination
agreements, sales of services, and purchases and development of
assets. Due to the nature of these indemnifications, we are unable
to make a reasonable estimate of the maximum potential amount
we could be required to pay counterparties. Historically, we have
not made any significant payment under these indemnifications or
guarantees. See note 28 to our 2015 audited consolidated
financial statements.
OPERATING LEASES
We have entered into operating leases for the rental of premises,
distribution facilities, equipment and wireless towers, and other
contracts. Terminating any of these lease agreements would not
have a material adverse effect on us as a whole. See “Commitments
and Other Contractual Obligations” and note 29 to our 2015
audited consolidated financial statements for quantification.
Governance and Risk Management
GOVERNANCE AT ROGERS
Rogers is a family-founded, family-controlled company and we take
pride in our proactive and disciplined approach to ensuring that
our governance structure and practices instil the confidence of our
shareholders.
With the passing in December 2008 of our founder and previous
President and CEO, Ted Rogers, his voting control of Rogers
Communications passed to a trust, the beneficiaries of which are
members of the Rogers family. The trust holds voting control of
Rogers Communications for the benefit of successive generations
of the Rogers family via the trust’s ownership of 90.9% of the
outstanding Class A Voting shares of the Company. The Rogers
family are substantial stakeholders and owned approximately 28%
of our equity as of December 31, 2015 (2014 – 28%) through its
ownership of a combined total of 142 million Class A Voting and
Class B Non-Voting shares (2014 – 142 million).
Our Board is made up of four members of the Rogers family and
another 11 directors who bring a rich mix of experience as business
leaders in North America. All of our directors are firmly committed
to firm governance, strong oversight, and the ongoing creation of
shareholder value. The Board as a whole is committed to sound
corporate governance and continually reviews its governance
practices and benchmarks them against acknowledged leaders
and evolving legislation. The Board believes that Rogers’
governance system is effective and that there are appropriate
structures and procedures in place.
GOVERNANCE BEST PRACTICES
The majority of our directors are independent and we have
adopted many best practices for effective governance, including:
• separation of CEO and chairman roles;
• independent lead director;
• formal corporate governance policy and charters;
• code of business conduct and whistleblower hotline;
2015 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 65