- Total service revenue and adjusted operating profit
growth of 5%
- Continued strong financial and subscriber performance in
Wireless
-
- Service revenue and adjusted operating profit growth of
8% and 9%, respectively
- Wireless adjusted operating profit margin expansion of 70
basis points
- Postpaid net additions of 93,000, up 28,000
- Postpaid churn of 1.05%, down 9 basis points and the
lowest rate since 2009
- Cable adjusted operating profit growth of 3% on stable
revenue
-
- Cable adjusted operating profit margin expansion of 150
basis points
- Continued strong Internet revenue growth of
7%
- Internet net additions of 11,000, down
slightly
- Acquired Advanced Wireless Service (AWS-1) spectrum
licence in the Greater Toronto
Area for $184 million to
create even more capacity for our customers in a key
market
TORONTO, July 20, 2017 /PRNewswire/ - Rogers
Communications Inc. today announced its unaudited financial and
operating results for the second quarter ended June 30,
2017.
Consolidated Financial Highlights
|
|
|
|
|
(In millions of
Canadian dollars, except
per share amounts, unaudited)
|
|
Three months ended
June 30
|
|
Six months ended June
30
|
|
2017
|
2016
|
% Chg
|
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
3,592
|
3,455
|
4
|
|
6,930
|
6,700
|
3
|
Total service revenue
1
|
|
3,466
|
3,308
|
5
|
|
6,680
|
6,393
|
4
|
Adjusted operating
profit 2
|
|
1,410
|
1,347
|
5
|
|
2,576
|
2,448
|
5
|
Net income
|
|
531
|
394
|
35
|
|
825
|
624
|
32
|
Adjusted net income
2
|
|
514
|
427
|
20
|
|
843
|
672
|
25
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$1.03
|
$0.77
|
34
|
|
$1.60
|
$1.21
|
32
|
Adjusted basic
earnings per share 2
|
|
$1.00
|
$0.83
|
20
|
|
$1.64
|
$1.30
|
26
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
|
823
|
1,121
|
(27)
|
|
1,419
|
1,719
|
(17)
|
Free cash flow
2
|
|
626
|
495
|
26
|
|
964
|
715
|
35
|
1
|
As defined. See "Key
Performance Indicators".
|
2
|
As defined. See
"Non-GAAP Measures". These measures should not be considered
substitutes or alternatives 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.
|
"Our second quarter results reflect the strong efforts of our
highly engaged and committed team, underpinned by an incredibly
rich mix of business assets. We reported strong revenue and
adjusted operating profit growth from continued momentum and
operating leverage in our largest segment, Wireless," said
Joe Natale, President and CEO. "Our
team delivered excellent Wireless results across the board,
including substantially lower churn, and significantly grew
adjusted operating profit and expanded margins. In Cable, we also
grew adjusted operating profit and margins."
"I have been at Rogers for 13 weeks now and I am extremely
excited about the prospects we have ahead of us. We have simplified
our organizational structure for deeper end-to-end accountability
for the customer experience and to drive further improvements in
customer service and business performance. We are also intensifying
our company-wide focus on cost efficiency to help generate further
margin expansion. We will drive a deeper focus on delivering an
outstanding customer experience while growing revenue and
profitability to create more value for shareholders."
Key Financial Highlights
Higher revenue
Revenue increased 4% this quarter, largely driven by Wireless
service revenue growth of 8%. Wireless service revenue increased
primarily as a result of a larger subscriber base and the continued
adoption of higher-value Share Everything plans.
Cable revenue was stable this quarter, as continued strong
Internet revenue growth of 7% offset declines in Television and
Phone revenue. Excluding the impact of the CRTC decision that
reduced access service rates, Cable and Internet revenue would have
increased by 1% and 10%, respectively.
Media revenue increased 4% this quarter primarily as a result of
the continued growth of sports-related revenue, increased sales at
Today's Shopping Choice (TSC, previously branded as The Shopping
Channel), and higher conventional broadcast TV advertising revenue,
partially offset by lower publishing-related advertising and
circulation revenue due to the strategic shift to digital media
announced late last year.
Higher adjusted operating profit
Adjusted operating profit increased 5% this quarter primarily as a
result of Wireless adjusted operating profit growth of 9%, due to
the strong flow through of revenue growth described above.
Cable adjusted operating profit increased 3% this quarter as a
result of a decrease in operating expenses and the ongoing product
mix shift to higher-margin Internet. Excluding the impact of the
CRTC decision, adjusted operating profit would have increased by 6%
this quarter.
Media adjusted operating profit decreased 30% this quarter
primarily as a result of higher Toronto Blue Jays player payroll
(including the impact of foreign exchange) and the impact of the
strategic shift in publishing.
Higher net income and adjusted net income
Net income increased 35% and adjusted net income increased 20% this
quarter as a result of higher adjusted operating profit and lower
depreciation and amortization; net income also increased as a
result of a gain on disposition of certain real estate assets.
Substantial free cash flow affords financial
flexibility
This quarter, we continued to generate substantial cash flow from
operating activities and free cash flow of $823 million and $626
million, respectively. Free cash flow growth was primarily
driven by lower net additions to property, plant and equipment and
increased adjusted operating profit.
We ended the second quarter with a debt leverage ratio (adjusted
net debt / adjusted operating profit) of 3.0, which improved from a
ratio of 3.1 as at the end of the same period last year, despite
the $184 million spectrum licence
acquisition this quarter. See "Managing our Liquidity and Financial
Resources" in our Second Quarter 2017 Management's Discussion and
Analysis for more information.
Our solid financial results enabled us to continue to make
investments in our network and still return substantial dividends
to shareholders. We paid $247 million
in dividends this quarter.
Strategic Update
Our second quarter results reflect continued momentum. During
the quarter, we simplified our organizational structure for deeper
end-to-end accountability for the customer experience. We continue
to focus on the fundamentals we believe are the key drivers of
shareholder value: growth in revenue, margins, adjusted operating
profit, free cash flow, and return on investment. We have an
unmatched asset base with significant opportunities within that
base to drive sustainable growth.
Maintaining Leadership and Momentum in Wireless
We accelerated momentum in Wireless this quarter. Service revenue
growth of 8% was the highest growth rate since 2009. Postpaid net
additions were 93,000, up 28,000 on substantially lower churn of
1.05%. Postpaid churn declined 9 basis points and represented the
lowest churn since 2009. We achieved this strong postpaid
subscriber growth while still generating adjusted operating profit
growth of 9% and related margin expansion of 70 basis points on
strong flow through of revenue. Adjusted operating profit growth
was the highest growth rate since 2010.
Improving Cable on the Strength of Internet and our Robust
Product Roadmap
Second quarter Cable revenue was stable year on year. Cable
adjusted operating profit increased 3% and the related margin
expanded 150 basis points, primarily driven by cost efficiencies
and the ongoing product mix shift to higher-margin Internet
offerings. In a highly competitive environment, Cable total service
unit net losses increased by 6,000 and Internet net additions
decreased by 1,000.
We generated strong Internet revenue growth of 7% this quarter
on the popularity of our Ignite Internet offerings. We offer the
fastest widely available Internet speeds in our marketplace with
Ignite Gigabit Internet service available to our entire Cable
footprint of over four million homes.
Excluding the impact of lower wholesale revenue as a result of
the Canadian Radio-television and Telecommunications Commission's
(CRTC) decision to reduce access service rates, Internet revenue
growth would have been 10% in the quarter. Similarly, Cable revenue
and adjusted operating profit growth this quarter would have been
1% and 6%, respectively, excluding this same impact.
We expect to launch Comcast's X1 all-IP video platform in 2018.
Our customers will benefit from Comcast's commitment to innovation.
Our adoption of the X1 platform not only includes access to one of
the most advanced IPTV solutions, but also to Comcast's
state-of-the-art customer premise equipment. Comcast attributes the
transformative X1 platform to improving its Xfinity TV subscriber
performance, reducing churn, and increasing engagement for
customers.
Media Focused on Sports
Media remains focused on our strong portfolio of live sports
entertainment. Second quarter Media revenue growth of 4% was
largely driven by our sports assets, including the strength of
Sportsnet, which continued its reign as Canada's number-one sports media brand for the
second year in a row (2015 and 2016 calendar years). Adjusted
operating profit was impacted primarily due to higher Toronto Blue
Jays player payroll (including the impact of foreign exchange) and
the impact of our shift to digital media announced in the fourth
quarter of 2016.
About Rogers
Rogers is a leading diversified Canadian communications and
media company that's working to deliver a great experience to our
customers every day. We are Canada's largest provider of wireless
communications services and one of Canada's leading providers of cable
television, high-speed Internet, information technology, and
telephony services to consumers and businesses. Through Rogers
Media, we are engaged in radio and television broadcasting, sports,
televised and online shopping, magazines, and digital media. Our
shares are publicly traded on the Toronto Stock Exchange (TSX:
RCI.A and RCI.B) and on the New York Stock Exchange (NYSE:
RCI).
Quarterly Investment Community Teleconference
Our second quarter 2017 results teleconference with the
investment community will be held on:
- July 20, 2017
- 8:00 a.m. Eastern Time
- webcast available at rogers.com/webcast
- media are welcome to participate on a listen-only basis
A rebroadcast will be available at rogers.com/investors on the
Events and Presentations page for at least two weeks following the
teleconference. Additionally, investors should note that from time
to time, Rogers' management presents at brokerage-sponsored
investor conferences. Most often, but not always, these conferences
are webcast by the hosting brokerage firm, and when they are
webcast, links are made available on Rogers' website at
rogers.com/events.
For More Information
You can find more information relating to us on our website
(rogers.com/investors), on SEDAR (sedar.com), and on EDGAR
(sec.gov), or you can e-mail us at
investor.relations@rci.rogers.com. Information on or connected to
these and any other websites referenced in this earnings release is
not part of, or incorporated into, this earnings release.
You can also go to rogers.com/investors for information about
our governance practices, corporate social responsibility
reporting, a glossary of communications and media industry terms,
and additional information about our business.
About this Earnings Release
This earnings release contains important information about our
business and our performance for the three and six months ended
June 30, 2017, as well as forward-looking information about
future periods. This earnings release should be read in conjunction
with our Second Quarter 2017 MD&A; our Second Quarter 2017
Interim Condensed Consolidated Financial Statements and notes
thereto, which have been prepared in accordance with International
Accounting Standard 34, Interim Financial Reporting, as
issued by the International Accounting Standards Board (IASB); our
2016 Annual MD&A; our 2016 Audited Consolidated Financial
Statements and notes thereto, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as issued by the IASB; and our other recent filings with Canadian
and US securities regulatory authorities, including our Annual
Information Form, which are available on SEDAR at sedar.com or
EDGAR at sec.gov, respectively. We draw attention to our 2016
Annual MD&A where we disclosed that certain comparative figures
were retrospectively amended as a result of the IFRS
Interpretations Committee's agenda decision relating to IAS 12,
Income Taxes.
For more information about Rogers, including product and service
offerings, competitive market and industry trends, our overarching
strategy, key performance drivers, and objectives, see
"Understanding Our Business", "Our Strategy, Key Performance
Drivers, and Strategic Highlights", and "Capability to Deliver
Results" in our 2016 Annual MD&A.
All dollar amounts are in Canadian dollars unless otherwise
stated and are unaudited. All percentage changes are calculated
using the rounded numbers as they appear in the tables. Information
is current as at July 19, 2017 and was approved by the Audit
and Risk Committee of our Board of Directors (Board) on that date.
This earnings release includes forward-looking statements and
assumptions. See "About Forward-Looking Information" for more
information.
We, us, our, Rogers, Rogers Communications, and the
Company refer to Rogers Communications Inc. and its
subsidiaries. RCI refers to the legal entity Rogers
Communications Inc., not including its subsidiaries. Rogers also
holds interests in various investments and ventures.
In this earnings release, this quarter, the
quarter, or the second quarter refer to the three months
ended June 30, 2017, the first quarter refers to the
three months ended March 31, 2017,
and year to date refers to the six months ended
June 30, 2017 unless the context indicates otherwise. All
results commentary is compared to the equivalent periods in 2016 or
as at December 31, 2016, as applicable, unless otherwise
indicated.
Summary of Consolidated Financial Results
|
|
|
|
(In millions of
dollars, except margins and per
share amounts)
|
Three months ended
June 30
|
|
Six months ended June
30
|
2017
|
2016
|
% Chg
|
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Wireless
|
2,048
|
1,931
|
6
|
|
4,016
|
3,821
|
5
|
|
Cable
|
870
|
870
|
—
|
|
1,725
|
1,726
|
—
|
|
Business
Solutions
|
96
|
97
|
(1)
|
|
191
|
193
|
(1)
|
|
Media
|
637
|
615
|
4
|
|
1,111
|
1,063
|
5
|
|
Corporate items and
intercompany eliminations
|
(59)
|
(58)
|
2
|
|
(113)
|
(103)
|
10
|
Revenue
|
3,592
|
3,455
|
4
|
|
6,930
|
6,700
|
3
|
Total service revenue
1
|
3,466
|
3,308
|
5
|
|
6,680
|
6,393
|
4
|
|
|
|
|
|
|
|
|
Adjusted operating
profit (loss)
|
|
|
|
|
|
|
|
|
Wireless
|
924
|
846
|
9
|
|
1,737
|
1,609
|
8
|
|
Cable
|
428
|
415
|
3
|
|
820
|
808
|
1
|
|
Business
Solutions
|
32
|
31
|
3
|
|
63
|
62
|
2
|
|
Media
|
63
|
90
|
(30)
|
|
35
|
41
|
(15)
|
|
Corporate items and
intercompany eliminations
|
(37)
|
(35)
|
6
|
|
(79)
|
(72)
|
10
|
Adjusted operating
profit 2
|
1,410
|
1,347
|
5
|
|
2,576
|
2,448
|
5
|
|
|
|
|
|
|
|
|
Adjusted operating
profit margin 2
|
39.3%
|
39.0%
|
0.3pts
|
|
37.2%
|
36.5%
|
0.7pts
|
|
|
|
|
|
|
|
|
Net income
|
531
|
394
|
35
|
|
825
|
624
|
32
|
Basic earnings per
share
|
$1.03
|
$0.77
|
34
|
|
$1.60
|
$1.21
|
32
|
Diluted earnings per
share
|
$1.03
|
$0.76
|
36
|
|
$1.60
|
$1.21
|
32
|
|
|
|
|
|
|
|
|
Adjusted net income
2
|
514
|
427
|
20
|
|
843
|
672
|
25
|
Adjusted basic
earnings per share 2
|
$1.00
|
$0.83
|
20
|
|
$1.64
|
$1.30
|
26
|
Adjusted diluted
earnings per share 2
|
$1.00
|
$0.83
|
20
|
|
$1.63
|
$1.30
|
25
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment, net
|
451
|
647
|
(30)
|
|
937
|
1,199
|
(22)
|
Cash provided by
operating activities
|
823
|
1,121
|
(27)
|
|
1,419
|
1,719
|
(17)
|
Free cash flow
2
|
626
|
495
|
26
|
|
964
|
715
|
35
|
1
|
As defined. See "Key
Performance Indicators".
|
2
|
Adjusted operating
profit, adjusted operating profit margin, adjusted net income,
adjusted basic and diluted earnings per share, and free cash flow
are non-GAAP measures and should not be considered substitutes or
alternatives 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.
|
Results of our Reporting Segments
WIRELESS
Wireless Financial Results
|
|
|
|
|
Three months ended
June 30
|
|
Six months ended June
30
|
(In millions of
dollars, except margins)
|
2017
|
2016
|
% Chg
|
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Service
revenue
|
1,925
|
1,788
|
8
|
|
3,774
|
3,522
|
7
|
|
Equipment
revenue
|
123
|
143
|
(14)
|
|
242
|
299
|
(19)
|
Revenue
|
2,048
|
1,931
|
6
|
|
4,016
|
3,821
|
5
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of
equipment
|
446
|
434
|
3
|
|
902
|
894
|
1
|
|
Other operating
expenses
|
678
|
651
|
4
|
|
1,377
|
1,318
|
4
|
Operating
expenses
|
1,124
|
1,085
|
4
|
|
2,279
|
2,212
|
3
|
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
924
|
846
|
9
|
|
1,737
|
1,609
|
8
|
|
|
|
|
|
|
|
|
Adjusted operating
profit margin as a % of service revenue
|
48.0%
|
47.3%
|
0.7pts
|
|
46.0%
|
45.7%
|
0.3pts
|
Additions to
property, plant and equipment
|
158
|
207
|
(24)
|
|
318
|
388
|
(18)
|
Wireless Subscriber Results 1
|
|
|
|
|
(In thousands, except
churn, postpaid
ARPA, and blended ARPU)
|
|
Three months ended
June 30
|
|
Six months ended June
30
|
|
2017
|
2016
|
Chg
|
|
2017
|
2016
|
Chg
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
Gross
additions
|
|
366
|
349
|
17
|
|
709
|
653
|
56
|
|
Net
additions
|
|
93
|
65
|
28
|
|
153
|
79
|
74
|
|
Total postpaid
subscribers 2
|
|
8,710
|
8,350
|
360
|
|
8,710
|
8,350
|
360
|
|
Churn
(monthly)
|
|
1.05%
|
1.14%
|
(0.09pts)
|
|
1.08%
|
1.16%
|
(0.08pts)
|
|
ARPA
(monthly)
|
|
$124.31
|
$116.06
|
$8.25
|
|
$121.95
|
$114.13
|
$7.82
|
Prepaid
|
|
|
|
|
|
|
|
|
|
Gross
additions
|
|
213
|
194
|
19
|
|
363
|
351
|
12
|
|
Net additions
(losses)
|
|
14
|
25
|
(11)
|
|
(28)
|
6
|
(34)
|
|
Total prepaid
subscribers 2
|
|
1,689
|
1,612
|
77
|
|
1,689
|
1,612
|
77
|
|
Churn
(monthly)
|
|
3.96%
|
3.57%
|
0.39pts
|
|
3.85%
|
3.61%
|
0.24pts
|
Blended ARPU
(monthly)
|
|
$62.13
|
$60.18
|
$1.95
|
|
$61.04
|
$59.35
|
$1.69
|
1
|
Subscriber counts,
subscriber churn, postpaid ARPA, and blended ARPU are key
performance indicators. See "Key Performance
Indicators".
|
2
|
As at end of
period.
|
Service revenue
The 8% increase in service revenue this quarter and 7% increase
year to date were a result of:
- larger postpaid and prepaid subscriber bases; and
- higher blended ARPU as a result of the increased mix of
higher-rate plans from our various brands, which includes the
customer-friendly Rogers Share Everything plans, and increased data
usage. These plans generate higher postpaid ARPA, bundle in various
calling features and long distance, provide the ability to pool and
manage data usage across multiple devices, and grant access to our
other offerings, such as Roam Like Home, Rogers NHL GameCentre
LIVE, Spotify, and Texture by Next Issue.
The 7% increases in postpaid ARPA this quarter and year to date
were primarily a result of subscribers increasingly adding new
lines to existing accounts, including through the continued
adoption of Rogers Share Everything plans. Customers on Share
Everything plans have increasingly utilized the advantages of
premium offerings and access their shareable plans with multiple
devices on the same account.
The 3% increases in blended ARPU this quarter and year to date
were a result of:
- increased service revenue as discussed above; partially offset
by
- the general increase in our prepaid subscriber base over the
past year relative to the increased service revenue.
We believe the increases in gross and net additions to our
postpaid subscriber base and the lower postpaid churn this quarter
and year to date were results of our strategic focus on enhancing
the customer experience by providing higher-value offerings, such
as our Share Everything plans, improving our customer service, and
continually increasing the quality of our network.
Equipment revenue
The 14% decrease in equipment revenue this quarter and 19% decrease
year to date were a result of:
- larger average investments in customers who purchased devices
under term contracts; and
- an 11% decrease in device upgrades by existing subscribers this
quarter and 9% decrease year to date; partially offset by
- higher postpaid gross additions.
Operating expenses
Cost of equipment
The 3% increase in the cost of equipment this quarter and 1%
increase year to date were a result of:
- a shift in the product mix of device sales towards higher-cost
smartphones; and
- higher postpaid gross additions; partially offset by
- the decrease in device upgrades by existing subscribers as
discussed above.
Other operating expenses
The 4% increases in other operating expenses this quarter and year
to date were a result of higher costs of service.
Additionally, year to date other operating expenses were
affected by higher commissions, as a result of our higher postpaid
gross additions.
Adjusted operating profit
The 9% increase in adjusted operating profit this quarter and 8%
increase year to date were a result of the strong flow through of
service revenue growth discussed above.
Other Wireless developments
Spectrum licence acquisition
In June 2017, upon receipt of all
necessary regulatory approvals, we acquired an AWS-1 spectrum
licence from Quebecor Inc., pursuant to an existing agreement, by
paying $184 million. Upon
acquisition, we recognized the spectrum licence as an intangible
asset of $184 million, which included
directly attributable costs. The spectrum licence provides us with
more wireless capacity in the Greater
Toronto Area.
CABLE
Cable Financial Results
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars, except margins)
|
2017
|
2016
|
% Chg
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Internet
|
402
|
376
|
7
|
789
|
736
|
7
|
|
Television
|
377
|
394
|
(4)
|
752
|
789
|
(5)
|
|
Phone
|
90
|
99
|
(9)
|
181
|
198
|
(9)
|
|
Service
revenue
|
869
|
869
|
—
|
1,722
|
1,723
|
—
|
|
Equipment
revenue
|
1
|
1
|
—
|
3
|
3
|
—
|
Revenue
|
870
|
870
|
—
|
1,725
|
1,726
|
—
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of
equipment
|
—
|
1
|
(100)
|
1
|
2
|
(50)
|
|
Other operating
expenses
|
442
|
454
|
(3)
|
904
|
916
|
(1)
|
Operating
expenses
|
442
|
455
|
(3)
|
905
|
918
|
(1)
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
428
|
415
|
3
|
820
|
808
|
1
|
|
|
|
|
|
|
|
Adjusted operating
profit margin
|
49.2%
|
47.7%
|
1.5pts
|
47.5%
|
46.8%
|
0.7pts
|
Additions to
property, plant and equipment
|
249
|
300
|
(17)
|
477
|
546
|
(13)
|
Cable Subscriber Results 1
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In
thousands)
|
2017
|
2016
|
Chg
|
2017
|
2016
|
Chg
|
|
|
|
|
|
|
|
Internet
|
|
|
|
|
|
|
|
Net
additions
|
11
|
12
|
(1)
|
41
|
28
|
13
|
|
Total Internet
subscribers 2
|
2,186
|
2,076
|
110
|
2,186
|
2,076
|
110
|
Television
|
|
|
|
|
|
|
|
Net losses
|
(25)
|
(23)
|
(2)
|
(49)
|
(49)
|
—
|
|
Total Television
subscribers 2
|
1,771
|
1,847
|
(76)
|
1,771
|
1,847
|
(76)
|
Phone
|
|
|
|
|
|
|
|
Net additions
(losses)
|
2
|
5
|
(3)
|
4
|
(5)
|
9
|
|
Total Phone
subscribers 2
|
1,098
|
1,085
|
13
|
1,098
|
1,085
|
13
|
|
|
|
|
|
|
|
Cable homes passed
2
|
4,269
|
4,173
|
96
|
4,269
|
4,173
|
96
|
Total service units
3
|
|
|
|
|
|
|
|
Net losses
|
(12)
|
(6)
|
(6)
|
(4)
|
(26)
|
22
|
|
Total service units
2
|
5,055
|
5,008
|
47
|
5,055
|
5,008
|
47
|
1
|
Subscriber counts are
key performance indicators. See "Key Performance
Indicators".
|
2
|
As at end of
period.
|
3
|
Includes Internet,
Television, and Phone subscribers.
|
Revenue
The stable revenue this quarter and year to date were primarily a
result of:
- a higher subscriber base for our Internet products; and
- the impact of service pricing changes; offset by
- Television subscriber losses over the past year; and
- lower wholesale revenue as a result of a CRTC decision that
reduced access service rates.
Excluding the impact of the CRTC decision, Cable revenue would
have increased by 1% this quarter and year to date.
Internet revenue
The 7% increases in Internet revenue this quarter and year to date
were a result of:
- a larger Internet subscriber base;
- general movement of customers to higher speed and usage tiers
of our Ignite Internet offerings; and
- the impact of Internet service pricing changes; partially
offset by
- more promotional pricing provided to subscribers; and
- lower wholesale revenue as a result of a CRTC decision that
reduced access service rates. Excluding this impact, Internet
revenue would have increased by 10% this quarter and year to
date.
Television revenue
The 4% decrease in Television revenue this quarter and 5% decrease
year to date were a result of:
- the decline in Television subscribers over the past year;
and
- more promotional pricing provided to subscribers; partially
offset by
- the impact of Television service pricing changes.
Phone revenue
The 9% decreases in Phone revenue this quarter and year to date
were a result of the impact of pricing packages.
Operating expenses
The 3% decrease in operating expenses this quarter and 1% decrease
year to date were a result of:
- relative shifts in product mix to higher-margin Internet
offerings from conventional Television broadcasting; and
- various cost efficiencies and productivity initiatives.
Adjusted operating profit
The 3% increase in adjusted operating profit this quarter and the
1% increase year to date were a result of the revenue and expense
changes discussed above. Excluding the impact of the CRTC decision
that reduced access service rates, adjusted operating profit would
have increased by 6% this quarter and 4% year to date.
BUSINESS SOLUTIONS
Business Solutions Financial Results
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars, except margins)
|
2017
|
2016
|
% Chg
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Next
generation
|
79
|
78
|
1
|
157
|
153
|
3
|
|
Legacy
|
15
|
17
|
(12)
|
30
|
37
|
(19)
|
|
Service
revenue
|
94
|
95
|
(1)
|
187
|
190
|
(2)
|
|
Equipment
revenue
|
2
|
2
|
—
|
4
|
3
|
33
|
Revenue
|
96
|
97
|
(1)
|
191
|
193
|
(1)
|
|
|
|
|
|
|
|
Operating
expenses
|
64
|
66
|
(3)
|
128
|
131
|
(2)
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
32
|
31
|
3
|
63
|
62
|
2
|
|
|
|
|
|
|
|
Adjusted operating
profit margin
|
33.3%
|
32.0%
|
1.3pts
|
33.0%
|
32.1%
|
0.9pts
|
Additions to
property, plant and equipment
|
31
|
38
|
(18)
|
60
|
76
|
(21)
|
Revenue
The 1% decrease in service revenue this quarter and 2% decrease
year to date were a result of the continued decline in our legacy
and off-net voice business, partially offset by growth of
higher-margin, next generation on-net and near-net IP-based
services revenue. We expect legacy service revenue will continue to
decrease as we focus on migrating customers to more advanced,
cost-effective IP-based services and solutions.
Next generation services, which include our data centre
operations, represented 84% of service revenue in the quarter (2016
- 82%) and 84% year to date (2016 - 81%).
Operating expenses
The 3% decrease in operating expenses this quarter and 2% decrease
year to date were a result of:
- lower service costs related to the continued decline in our
legacy and off-net voice business; and
- cost efficiencies and productivity initiatives; partially
offset by
- higher service costs related to our next generation on-net and
near-net IP-based offerings.
Adjusted operating profit
The 3% increase in adjusted operating profit this quarter and 2%
increase year to date were a result of the revenue and expense
changes discussed above.
MEDIA
Media Financial Results
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars, except margins)
|
2017
|
2016
|
% Chg
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
Revenue
|
637
|
615
|
4
|
1,111
|
1,063
|
5
|
Operating
expenses
|
574
|
525
|
9
|
1,076
|
1,022
|
5
|
|
|
|
|
|
|
|
Adjusted operating
profit
|
63
|
90
|
(30)
|
35
|
41
|
(15)
|
|
|
|
|
|
|
|
Adjusted operating
profit margin
|
9.9%
|
14.6%
|
(4.7pts)
|
3.2%
|
3.9%
|
(0.7pts)
|
Additions to
property, plant and equipment
|
13
|
13
|
—
|
26
|
31
|
(16)
|
Revenue
The 4% increase in revenue this quarter and 5% increase year to
date were a result of:
- higher sports-related revenue;
- higher TSC merchandise sales; and
- higher conventional broadcast TV advertising revenue; partially
offset by
- lower publishing-related advertising and circulation revenue
due to the strategic shift to digital media announced last
year.
Year to date revenue in 2017 benefitted from a distribution in
the first quarter to the Toronto Blue Jays from Major League
Baseball.
Operating expenses
The 9% increase in operating expenses this quarter and 5% increase
year to date were a result of:
- higher Toronto Blue Jays player payroll (including the impact
of foreign exchange);
- higher sports-related programming and production costs;
and
- higher TSC merchandise costs; partially offset by
- lower publishing costs due to the strategic shift as discussed
above.
Adjusted operating profit
The 30% decrease in adjusted operating profit this quarter and 15%
decrease year to date were a result of the revenue and expense
changes discussed above.
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars, except capital intensity)
|
2017
|
2016
|
% Chg
|
2017
|
2016
|
% Chg
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
|
|
|
|
|
|
Wireless
|
158
|
207
|
(24)
|
318
|
388
|
(18)
|
|
Cable
|
249
|
300
|
(17)
|
477
|
546
|
(13)
|
|
Business
Solutions
|
31
|
38
|
(18)
|
60
|
76
|
(21)
|
|
Media
|
13
|
13
|
—
|
26
|
31
|
(16)
|
|
Corporate
|
74
|
89
|
(17)
|
130
|
158
|
(18)
|
|
|
|
|
|
|
|
Total additions to
property, plant and equipment 1
|
525
|
647
|
(19)
|
1,011
|
1,199
|
(16)
|
Proceeds from
disposition of property, plant and equipment
|
(74)
|
—
|
—
|
(74)
|
—
|
—
|
|
|
|
|
|
|
|
Total additions to
property, plant and equipment, net
|
451
|
647
|
(30)
|
937
|
1,199
|
(22)
|
|
|
|
|
|
|
|
Capital intensity
2
|
12.6%
|
18.7%
|
(6.1pts)
|
13.5%
|
17.9%
|
(4.4pts)
|
1
|
Additions to
property, plant and equipment do not include expenditures for
spectrum licences.
|
2
|
As defined. See "Key
Performance Indicators".
|
Wireless
The decreases in additions to property, plant and equipment in
Wireless this quarter and year to date were primarily a result of
higher LTE network investments in 2016 relative to 2017 to enhance
network coverage and the quality of our network. Deployment of our
700 MHz LTE network reached 92% of Canada's population as at June 30, 2017.
The 700 MHz LTE network offers improved signal quality in
basements, elevators, and buildings with thick concrete walls.
Deployment of our overall LTE network reached approximately 95% of
Canada's population as at
June 30, 2017.
Cable
The decreases in additions to property, plant and equipment in
Cable this quarter and year to date were a result of investments
associated with delivering Ignite Gigabit Internet across our Cable
footprint in 2016, as well as costs related to development of our
IPTV product in 2016. This was partially offset by costs incurred
this quarter and year to date related to our forthcoming X1
IP-based video platform and higher investments in customer premise
equipment in 2017.
Business Solutions
The decreases in additions to property, plant and equipment in
Business Solutions this quarter and year to date were a result of
higher investments in network infrastructure in 2016 relative to
2017, partially offset by higher information technology investments
in 2017.
Media
Additions to property, plant and equipment in Media were stable
this quarter. The decrease year to date reflects higher investments
in digital platforms and broadcasting facilities in 2016 relative
to 2017, partially offset by greater investments in the Rogers
Centre this year.
Corporate
The decreases in additions to property, plant and equipment in
Corporate this quarter and year to date were a result of higher
information technology investments and premise improvements at our
various offices in 2016 relative to 2017.
Proceeds from disposition of property, plant and
equipment
We sold certain real estate assets this quarter for total proceeds
of $74 million.
Capital intensity
Capital intensity decreased this quarter and year to date as a
result of lower net additions to property, plant and equipment as
discussed above, and higher total revenue.
Financial Guidance
There are no changes at this time to the consolidated guidance
ranges for revenue, adjusted operating profit, free cash flow, or
additions to property, plant and equipment, net, which were
provided on January 26, 2017. See "About Forward-Looking
Information" in this earnings release and in our 2016 Annual
MD&A. Adjusted operating profit and free cash flow are non-GAAP
measures and should not be considered substitutes or alternatives
for GAAP measures. They 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.
Key Performance Indicators
We measure the success of our strategy using a number of key
performance indicators that are defined and discussed in our 2016
Annual MD&A and this earnings release. We believe these key
performance indicators allow us to appropriately measure our
performance against our operating strategy as well as against the
results of our peers and competitors. The following key performance
indicators are not measurements in accordance with IFRS and should
not be considered an alternative to net income or any other measure
of performance under IFRS. They include:
- Subscriber counts;
- Subscriber churn (churn);
- Postpaid average revenue per account (ARPA);
- Blended average revenue per user (ARPU);
- Capital intensity; and
- Total service revenue.
Non-GAAP Measures
We use the following non-GAAP measures. These are reviewed
regularly by management and our Board in assessing our performance
and making decisions regarding the ongoing operations of our
business and its ability to generate cash flows. Some or all of
these measures may also be used by investors, lending institutions,
and credit rating agencies as indicators of our operating
performance, of our ability to incur and service debt, and as
measurements to value companies in the telecommunications sector.
These are not recognized measures under GAAP and do not have
standard meanings under IFRS, so may not be reliable ways to
compare us to other companies.
Non-GAAP
measure
|
Why we use
it
|
How we calculate
it
|
Most
comparable
IFRS financial
measure
|
Adjusted
operating profit
Adjusted
operating profit
margin
|
- To evaluate the performance
of our businesses, and when making decisions about the ongoing
operations of the business and our ability to generate cash
flows.
- We believe that certain
investors and analysts use adjusted operating profit to measure our
ability to service debt and to meet other payment
obligations.
- We also use it as one
component in determining short-term incentive compensation for all
management employees.
|
Adjusted operating
profit:
Net income
add (deduct)
income tax expense (recovery), other
expense (income), finance costs, restructuring, acquisition and
other, loss (gain) on disposition of property, plant and equipment,
depreciation and amortization, stock-based compensation, and
impairment of assets and related onerous contract
charges.
Adjusted operating profit
margin:
Adjusted operating profit
divided by
revenue (service revenue for
Wireless).
|
Net income
|
Adjusted
net
income
Adjusted basic
and diluted
earnings per
share
|
- To assess the performance of
our businesses before the effects of the noted items, because they
affect the comparability of our financial results and could
potentially distort the analysis of trends in business performance.
Excluding these items does not imply that they are
non-recurring.
|
Adjusted net
income:
Net income
add (deduct)
stock-based compensation, restructuring,
acquisition and other, impairment of assets and related onerous
contract charges, loss (gain) on sale or wind down of investments,
loss (gain) on disposal of property, plant and equipment, (gain) on
acquisitions, loss on non-controlling interest purchase
obligations, loss on repayment of long-term debt, and income tax
adjustments on these items, including adjustments as a result of
legislative changes.
Adjusted basic and diluted earnings per
share:
Adjusted net income
divided by
basic and diluted weighted average shares
outstanding.
|
Net income
Basic and
diluted
earnings per
share
|
Free cash
flow
|
- To show how much cash we have
available to repay debt and reinvest in our company, which is an
important indicator of our financial strength and
performance.
- We believe that some
investors and analysts use free cash flow to value a business and
its underlying assets.
|
Adjusted operating
profit
deduct
additions to property, plant and
equipment net of proceeds on disposition, interest on borrowings
net of capitalized interest, and cash income taxes.
|
Cash
provided
by operating
activities
|
Adjusted
net
debt
|
- To conduct valuation-related
analysis and make decisions about capital structure.
- We believe this helps
investors and analysts analyze our enterprise and equity value and
assess our leverage.
|
Total long-term
debt
add (deduct)
current portion of long-term debt,
deferred transaction costs and discounts, net debt derivative
(assets) liabilities, credit risk adjustment related to net debt
derivatives, bank advances (cash and cash equivalents), and
short-term borrowings.
|
Long-term debt
|
Adjusted
net
debt / adjusted
operating profit (debt leverage
ratio)
|
- To conduct valuation-related
analysis and make decisions about capital structure.
- We believe this helps
investors and analysts analyze our enterprise and equity value and
assess our leverage.
|
Adjusted net debt
(defined above)
divided by
12-month trailing adjusted operating
profit (defined above).
|
Long-term
debt
divided by net income
|
Reconciliation of adjusted operating profit
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Net income
|
531
|
394
|
825
|
624
|
Add
(deduct):
|
|
|
|
|
|
Income tax
expense
|
182
|
141
|
289
|
220
|
|
Other (income)
expense
|
(31)
|
9
|
(42)
|
(25)
|
|
Finance
costs
|
189
|
189
|
379
|
385
|
|
Restructuring,
acquisition and other
|
34
|
27
|
62
|
71
|
|
Gain on disposition
of property, plant and equipment
|
(49)
|
—
|
(49)
|
—
|
|
Depreciation and
amortization
|
535
|
572
|
1,080
|
1,146
|
|
Stock-based
compensation
|
19
|
15
|
32
|
27
|
|
|
|
|
|
Adjusted operating
profit
|
1,410
|
1,347
|
2,576
|
2,448
|
Reconciliation of adjusted operating profit margin
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars, except percentages)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Adjusted operating
profit margin:
|
|
|
|
|
|
Adjusted operating
profit
|
1,410
|
1,347
|
2,576
|
2,448
|
|
Divided by: total
revenue
|
3,592
|
3,455
|
6,930
|
6,700
|
|
|
|
|
|
Adjusted operating
profit margin
|
39.3%
|
39.0%
|
37.2%
|
36.5%
|
Reconciliation of adjusted net income
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Net income
|
531
|
394
|
825
|
624
|
Add
(deduct):
|
|
|
|
|
|
Stock-based
compensation
|
19
|
15
|
32
|
27
|
|
Restructuring,
acquisition and other
|
34
|
27
|
62
|
71
|
|
Gain on divestitures
pertaining to investments
|
—
|
—
|
—
|
(39)
|
|
Recovery on wind down
of shomi
|
(20)
|
—
|
(20)
|
—
|
|
Gain on disposition
of property, plant and equipment
|
(49)
|
—
|
(49)
|
—
|
|
Income tax impact of
above items
|
(1)
|
(9)
|
(7)
|
(14)
|
|
Income tax
adjustment, legislative tax change
|
—
|
—
|
—
|
3
|
|
|
|
|
|
Adjusted net
income
|
514
|
427
|
843
|
672
|
Reconciliation of adjusted earnings per share
|
|
|
(In millions of
dollars, except per share amounts; number of shares
outstanding in millions)
|
Three months ended
June 30
|
Six months ended June
30
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Adjusted basic
earnings per share:
|
|
|
|
|
|
Adjusted net
income
|
514
|
427
|
843
|
672
|
|
Divided
by:
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
515
|
515
|
515
|
515
|
|
|
|
|
|
Adjusted basic
earnings per share
|
$1.00
|
$0.83
|
$1.64
|
$1.30
|
|
|
|
|
|
Adjusted diluted
earnings per share:
|
|
|
|
|
|
Adjusted net
income
|
514
|
427
|
843
|
672
|
|
Divided
by:
|
|
|
|
|
|
|
Diluted weighted
average number of shares outstanding
|
516
|
517
|
517
|
517
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$1.00
|
$0.83
|
$1.63
|
$1.30
|
Reconciliation of free cash flow
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
(In millions of
dollars)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Cash provided by
operating activities
|
823
|
1,121
|
1,419
|
1,719
|
Add
(deduct):
|
|
|
|
|
|
Additions to
property, plant and equipment, net
|
(451)
|
(647)
|
(937)
|
(1,199)
|
|
Interest on
borrowings, net of capitalized interest
|
(181)
|
(187)
|
(363)
|
(379)
|
|
Restructuring,
acquisition and other
|
34
|
27
|
62
|
71
|
|
Interest
paid
|
133
|
154
|
371
|
392
|
|
Change in non-cash
operating working capital items
|
227
|
(35)
|
405
|
85
|
|
Other
adjustments
|
41
|
62
|
7
|
26
|
|
|
|
|
|
Free cash
flow
|
626
|
495
|
964
|
715
|
Reconciliation of adjusted net debt and debt leverage
ratio
|
|
|
|
As at
June 30
|
As at
December 31
|
(In millions of
dollars)
|
2017
|
2016
|
|
|
|
Current portion of
long-term debt
|
—
|
750
|
Long-term
debt
|
14,927
|
15,330
|
Deferred transaction
costs and discounts
|
114
|
117
|
|
15,041
|
16,197
|
Add
(deduct):
|
|
|
|
Net debt derivative
assets
|
(1,378)
|
(1,683)
|
|
Credit risk
adjustment related to net debt derivative assets
|
(31)
|
(57)
|
|
Short-term
borrowings
|
1,988
|
800
|
|
Bank
advances
|
74
|
71
|
|
|
|
Adjusted net
debt
|
15,694
|
15,328
|
|
|
|
|
As at
June 30
|
As at
December 31
|
(In millions of
dollars, except ratios)
|
2017
|
2016
|
|
|
|
Debt leverage
ratio
|
|
|
|
Adjusted net
debt
|
15,694
|
15,328
|
|
Divided by: trailing
12-month adjusted operating profit
|
5,220
|
5,092
|
|
|
|
Debt leverage
ratio
|
3.0
|
3.0
|
Rogers Communications Inc.
Interim Condensed Consolidated Statements of Income
(In millions of Canadian dollars, except per share amounts,
unaudited)
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Revenue
|
3,592
|
3,455
|
6,930
|
6,700
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Operating
costs
|
2,201
|
2,123
|
4,386
|
4,279
|
|
Depreciation and
amortization
|
535
|
572
|
1,080
|
1,146
|
|
Gain on disposition
of property, plant and equipment
|
(49)
|
—
|
(49)
|
—
|
|
Restructuring,
acquisition and other
|
34
|
27
|
62
|
71
|
Finance
costs
|
189
|
189
|
379
|
385
|
Other (income)
expense
|
(31)
|
9
|
(42)
|
(25)
|
|
|
|
|
|
Income before income
tax expense
|
713
|
535
|
1,114
|
844
|
Income tax
expense
|
182
|
141
|
289
|
220
|
|
|
|
|
|
Net income for the
period
|
531
|
394
|
825
|
624
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
Basic
|
$1.03
|
$0.77
|
$1.60
|
$1.21
|
|
Diluted
|
$1.03
|
$0.76
|
$1.60
|
$1.21
|
Rogers Communications Inc.
Interim Condensed Consolidated Statements of Financial
Position
(In millions of Canadian dollars, unaudited)
|
|
|
|
As at
June 30
|
As at
December 31
|
|
2017
|
2016
|
|
|
|
Assets
|
|
|
Current
assets:
|
|
|
|
Accounts
receivable
|
1,884
|
1,949
|
|
Inventories
|
290
|
315
|
|
Other current
assets
|
292
|
215
|
|
Current portion of
derivative instruments
|
101
|
91
|
Total current
assets
|
2,567
|
2,570
|
|
|
|
Property, plant and
equipment
|
10,678
|
10,749
|
Intangible
assets
|
7,290
|
7,130
|
Investments
|
2,385
|
2,174
|
Derivative
instruments
|
1,484
|
1,708
|
Other long-term
assets
|
92
|
98
|
Deferred tax
assets
|
7
|
8
|
Goodwill
|
3,905
|
3,905
|
|
|
|
Total
assets
|
28,408
|
28,342
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
Current
liabilities:
|
|
|
|
Bank
advances
|
74
|
71
|
|
Short-term
borrowings
|
1,988
|
800
|
|
Accounts payable and
accrued liabilities
|
2,364
|
2,783
|
|
Income tax
payable
|
105
|
186
|
|
Current portion of
provisions
|
60
|
134
|
|
Unearned
revenue
|
361
|
367
|
|
Current portion of
long-term debt
|
—
|
750
|
|
Current portion of
derivative instruments
|
107
|
22
|
Total current
liabilities
|
5,059
|
5,113
|
|
|
|
Provisions
|
33
|
33
|
Long-term
debt
|
14,927
|
15,330
|
Derivative
instruments
|
153
|
118
|
Other long-term
liabilities
|
490
|
562
|
Deferred tax
liabilities
|
1,976
|
1,917
|
Total
liabilities
|
22,638
|
23,073
|
|
|
|
Shareholders'
equity
|
5,770
|
5,269
|
|
|
|
Total liabilities and
shareholders' equity
|
28,408
|
28,342
|
Rogers Communications Inc.
Interim Condensed Consolidated Statements of Cash Flows
(In millions of Canadian dollars, unaudited)
|
|
|
|
Three months ended
June 30
|
Six months ended June
30
|
|
2017
|
2016
|
2017
|
2016
|
Operating
activities:
|
|
|
|
|
|
Net income for the
period
|
531
|
394
|
825
|
624
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
535
|
572
|
1,080
|
1,146
|
|
|
Program rights
amortization
|
16
|
18
|
36
|
39
|
|
|
Finance
costs
|
189
|
189
|
379
|
385
|
|
|
Income tax
expense
|
182
|
141
|
289
|
220
|
|
|
Stock-based
compensation
|
19
|
15
|
32
|
27
|
|
|
Post-employment
benefits contributions, net of expense
|
(65)
|
(71)
|
(59)
|
(61)
|
|
|
Gain on divestitures
pertaining to investments
|
—
|
—
|
—
|
(39)
|
|
|
Gain on disposition
of property, plant and equipment
|
(49)
|
—
|
(49)
|
—
|
|
|
Recovery on wind down
of shomi
|
(20)
|
—
|
(20)
|
—
|
|
|
Other
|
(3)
|
—
|
(6)
|
10
|
|
Cash provided by
operating activities before changes in non-cash working capital
items, income taxes paid, and interest paid
|
1,335
|
1,258
|
2,507
|
2,351
|
|
Change in non-cash
operating working capital items
|
(227)
|
35
|
(405)
|
(85)
|
|
Cash provided by
operating activities before income taxes paid and interest
paid
|
1,108
|
1,293
|
2,102
|
2,266
|
|
Income taxes
paid
|
(152)
|
(18)
|
(312)
|
(155)
|
|
Interest
paid
|
(133)
|
(154)
|
(371)
|
(392)
|
|
|
|
|
|
Cash provided by
operating activities
|
823
|
1,121
|
1,419
|
1,719
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Additions to
property, plant and equipment, net
|
(451)
|
(647)
|
(937)
|
(1,199)
|
|
Additions to program
rights
|
(19)
|
(14)
|
(33)
|
(24)
|
|
Changes in non-cash
working capital related to property, plant and equipment and
intangible assets
|
(7)
|
32
|
(88)
|
(105)
|
|
Acquisitions and
other strategic transactions, net of cash acquired
|
(184)
|
—
|
(184)
|
—
|
|
Other
|
(26)
|
47
|
(52)
|
7
|
|
|
|
|
|
Cash used in
investing activities
|
(687)
|
(582)
|
(1,294)
|
(1,321)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Net proceeds received
on short-term borrowings
|
889
|
45
|
1,225
|
250
|
|
Net repayment of
long-term debt
|
(795)
|
(385)
|
(848)
|
(266)
|
|
Net repayment on
settlement of debt derivatives and forward contracts
|
(8)
|
(23)
|
(11)
|
(42)
|
|
Dividends
paid
|
(247)
|
(247)
|
(494)
|
(494)
|
|
|
|
|
|
Cash used in
financing activities
|
(161)
|
(610)
|
(128)
|
(552)
|
|
|
|
|
|
Change in cash and
cash equivalents
|
(25)
|
(71)
|
(3)
|
(154)
|
(Bank advances) cash
and cash equivalents, beginning of period
|
(49)
|
(72)
|
(71)
|
11
|
|
|
|
|
Bank advances, end of
period
|
(74)
|
(143)
|
(74)
|
(143)
|
About Forward-Looking Information
This earnings release includes "forward-looking information" and
"forward-looking statements" within the meaning of applicable
securities laws (collectively, "forward-looking information"), and
assumptions about, among other things, our business, operations,
and financial performance and condition approved by our management
on the date of this earnings release. This forward-looking
information and these assumptions include, but are not limited to,
statements about our objectives and strategies to achieve those
objectives, and about our beliefs, plans, expectations,
anticipations, estimates, or intentions.
Forward-looking information
- typically includes words like could, expect,
may, anticipate, assume, believe,
intend, estimate, plan, project,
guidance, outlook, target, and similar expressions,
although not all forward-looking information includes them;
- includes conclusions, forecasts, and projections that are based
on our current objectives and strategies and on estimates,
expectations, assumptions, and other factors, most of which are
confidential and proprietary and that we believe to have been
reasonable at the time they were applied but may prove to be
incorrect; and
- was approved by our management on the date of this earnings
release.
Our forward-looking information includes forecasts and
projections related to the following items, some of which are
non-GAAP measures (see "Non-GAAP Measures"), among others:
- revenue;
- adjusted operating profit;
- additions to property, plant and equipment, net;
- cash income tax payments;
- free cash flow;
- dividend payments;
- the growth of new products and services;
- expected growth in subscribers and the services to which they
subscribe;
- the cost of acquiring and retaining subscribers and deployment
of new services;
- continued cost reductions and efficiency improvements; and
- all other statements that are not historical facts.
We base our conclusions, forecasts, and projections on the
following factors, among others:
- general economic and industry growth rates;
- currency exchange rates and interest rates;
- product pricing levels and competitive intensity;
- subscriber growth;
- pricing, usage, and churn rates;
- changes in government regulation;
- technology deployment;
- availability of devices;
- timing of new product launches;
- content and equipment costs;
- the integration of acquisitions; and
- industry structure and stability.
Except as otherwise indicated, this earnings release and our
forward-looking information do not reflect the potential impact of
any non-recurring or other special items or of any dispositions,
monetizations, mergers, acquisitions, other business combinations,
or other transactions that may be considered or announced or may
occur after the date on which the statement containing the
forward-looking information is made.
Risks and uncertainties
Actual events and results can be substantially different from what
is expressed or implied by forward-looking information as a result
of risks, uncertainties, and other factors, many of which are
beyond our control, including, but not limited to:
- regulatory changes;
- technological changes;
- economic conditions;
- unanticipated changes in content or equipment costs;
- changing conditions in the entertainment, information, and
communications industries;
- the integration of acquisitions;
- litigation and tax matters;
- the level of competitive intensity;
- the emergence of new opportunities; and
- new interpretations and new accounting standards from
accounting standards bodies.
These factors can also affect our objectives, strategies, and
intentions. Many of these factors are beyond our control or our
current expectations or knowledge. Should one or more of these
risks, uncertainties, or other factors materialize, our objectives,
strategies, or intentions change, or any other factors or
assumptions underlying the forward-looking information prove
incorrect, our actual results and our plans could vary
significantly from what we currently foresee.
Accordingly, we warn investors to exercise caution when
considering statements containing forward-looking information and
caution them that it would be unreasonable to rely on such
statements as creating legal rights regarding our future results or
plans. We are under no obligation (and we expressly disclaim any
such obligation) to update or alter any statements containing
forward-looking information or the factors or assumptions
underlying them, whether as a result of new information, future
events, or otherwise, except as required by law. All of the
forward-looking information in this earnings release is qualified
by the cautionary statements herein.
Before making an investment decision
Before making any investment decisions and for a detailed
discussion of the risks, uncertainties, and environment associated
with our business, fully review the sections of our Second Quarter
2017 MD&A entitled "Updates to Risks and Uncertainties" and
"Regulatory Developments" and fully review the sections in our 2016
Annual MD&A entitled "Regulation in Our Industry" and
"Governance and Risk Management", as well as our various other
filings with Canadian and US securities regulators, which can be
found at sedar.com and sec.gov, respectively. Information on or
connected to our website is not part of or incorporated into this
earnings release.
SOURCE Rogers Communications Canada Inc. - English