Rogers Communications Inc. today announced its unaudited financial
and operating results for the first quarter ended March 31,
2021.
Consolidated Financial Highlights
|
Three months ended March 31 |
|
(In millions of Canadian dollars, except per share amounts,
unaudited) |
2021 |
|
2020 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
3,488 |
|
|
3,416 |
|
|
2 |
|
Total service revenue 1 |
|
3,021 |
|
|
3,049 |
|
|
(1 |
) |
Adjusted EBITDA 2 |
|
1,391 |
|
|
1,335 |
|
|
4 |
|
Net income |
|
361 |
|
|
352 |
|
|
3 |
|
Adjusted net income 2 |
|
394 |
|
|
367 |
|
|
7 |
|
|
|
|
|
Diluted earnings per share |
|
$0.70 |
|
|
$0.68 |
|
|
3 |
|
Adjusted diluted earnings per share 2 |
|
$0.77 |
|
|
$0.71 |
|
|
8 |
|
|
|
|
|
Cash provided by operating activities |
|
679 |
|
|
959 |
|
|
(29 |
) |
Free cash flow 2 |
|
394 |
|
|
462 |
|
|
(15 |
) |
1 As defined. See "Key Performance
Indicators".2 As defined. See "Non-GAAP Measures and Related
Performance 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 solid first quarter results reflect
disciplined execution in each of our business units, and our
continued ability to support the needs of our customers despite the
challenges of the pandemic," said Joe Natale, President and CEO.
"We saw total revenue growth led by improvements in our Cable and
Media businesses, and in our Wireless business, saw low churn and
strong postpaid subscriber growth. We are confident in our
long-term growth strategy and are well positioned as the economy
continues to recover. We remain focused on making generational
investments in our networks, our customers, and our country,
including expanding Canada's largest 5G network and connecting
even more rural, remote, and Indigenous communities."
Operating Environment and Strategic
Highlights
COVID-19 continues to significantly impact
Canadians and economies around the world as a third wave affects
Canada and other locations globally. In the first quarter of 2021,
as public health restrictions that were implemented in late 2020
were temporarily lifted to certain extents across the country, we
maintained our focus on keeping our employees safe and our
customers connected. While COVID-19 continues to have a significant
worldwide impact, we remain confident we have the right team, a
strong balance sheet, and the world-class networks that will allow
us to get through the pandemic having maintained our long-term
focus on growth and doing the right thing for our customers.
Our six company priorities guide our work and
decision-making as we further improve our operational execution and
make well-timed investments to grow our core businesses and deliver
increased shareholder value. Below are some highlights.
Create best-in-class customer experiences by
putting our customers first in everything we do
- Improved postpaid churn by 5 points
to 0.88%.
- Launched Advantage Mobility™ and
Advantage Security™, business-grade solutions offered by Rogers for
Business™ to support small- and medium-sized Canadian enterprises
with reliable connectivity and network security.
- Continued to accelerate our
digital-first plan to make it easier for customers, with virtual
assistant conversations up by 89% since last year.
Invest in our networks and technology to deliver
leading performance, reliability, and coverage
- Announced an agreement, the largest
of its kind in Canada, with Federal, Ontario, and local Eastern
Ontario governments to bring more choice and increase 5G wireless
coverage in Eastern Ontario, investing over $300 million to upgrade
or build more than 600 wireless towers by the end of 2025.
- Expanded Canada's largest and most
reliable 5G network to serve 10 more cities, now in 173 markets
across Canada, and announced a smart city initiative with
Communitech to develop 5G transportation solutions of the
future.
- Ranked Canada's most reliable 5G
network by umlaut, receiving top results for the strongest 5G
network and highest reliability on 5G-capable devices for the
fourth quarter of 2020.
- Announced we will bring 5G
connectivity, using an innovative solution, to 480 homes in Holland
Marsh, Ontario, in partnership with the Centre of Excellence in
Next Generation Networks (CENGN) and the Government of Ontario, to
support advances in agriculture technology.
- Announced the upcoming expansion of
our wireless network in British Columbia, including 5G, to provide
reliable connectivity along Highway 14 and Highway 16 (the Highway
of Tears). New wireless towers along Highway 16 will provide
reliable connectivity to those who live, work, and travel along
this critical route; our network will provide continuous coverage
along all 720 km of this northern highway.
- Ranked as Canada's most consistent
national wireless network and broadband provider for the third
consecutive quarter by Ookla, the global leader in fixed broadband
and mobile network testing applications. Our broadband network also
received a top speed score in Ontario and New Brunswick and we were
ranked first for achieving the highest time spent on 5G.
- Partnered with Métis Nation British
Columbia to provide wireless connectivity, services, and dedicated
support to over 340 Métis businesses and communities in British
Columbia.
Drive growth in each of our lines of
business
- Offering exclusive English Canada
access to more than 300 NHL® broadcasts in a condensed 17-week
schedule across Sportsnet's TV and streaming platforms this season,
with 140 all-Canadian matchups available across the Sportsnet Radio
Network™. At the midway point of the season, audiences for
Wednesday Night Hockey are up 56% year over year, while Saturday's
Hockey Night in Canada™ early game is up 6% and the late game is up
27%.
- Became the first to offer a
"Wireless Private Network" managed solution nationally in Canada,
through Rogers for Business, to enable large enterprises to deploy
their own wireless network to protect sensitive data, securely
connect devices, and prioritize network traffic.
- Expanded our Fido Payment Program
so mobile customers can get accessories for $0 down, 0% interest,
and no taxes upfront.
Drive best-in-class financial outcomes for our
shareholders
- Attracted 44,000 net Wireless
postpaid subscribers and 14,000 net Internet subscribers.
- Grew adjusted EBITDA by 4% and
expanded adjusted EBITDA margin by 80 basis points.
- Generated free cash flow of $394
million and cash flow from operating activities of $679
million.
- Paid $252 million in dividends to
our shareholders and declared a quarterly dividend of $0.50 per
share on April 20, 2021.
Develop our people, drive engagement, and build
a high-performing and inclusive culture
- Named one of Canada's Top Employers
for Young People for 2021, by Mediacorp Canada Inc., for the
eleventh year in a row for Rogers' long history of investing in the
next generation and commitment to building the leaders of
tomorrow.
- Selected as one of Canada's Best
Diversity Employers for 2021, by Mediacorp Canada Inc., for the
ninth year in a row based on the steps taken to build a more
inclusive culture for team members.
- Continued driving progress on our
Inclusion & Diversity strategy through open dialogue on racism
at two events hosted by our Black Leadership Council, Rogers
Mosaic, and Rogers Women of Colour, as well as celebrating Lunar
New Year, Black History Month, and International Women's Day with
events and content across our platforms.
Be a strong, socially and environmentally
responsible leader in our communities
- Helped bridge the digital divide by
expanding Connected for Success™, a low-cost and reliable
high-speed Internet program, to those receiving government income
support or disability benefits and to seniors receiving the
Guaranteed Income Supplement in service areas in Ontario, New
Brunswick, and Newfoundland.
- Provided 42 Ted Rogers Community
Grants to organizations across Canada that help youth achieve their
highest potential through programs in STEM, entrepreneurship,
innovation, mentorship, and community leadership.
- Announced the five organizations
(Big Brothers Big Sisters, Blacbiblio.com, Canadian Women &
Sport, Friends of Ruby, and Spirit North) that will receive free
advertising and creative services this year as part of Rogers
Sports & Media's All IN™ inclusion & diversity
program.
- Launched a $60,000 scholarship
program through OMNI Television™ for post-secondary students across
Canada pursuing careers in ethnic and third-language
journalism.
- Launched Off-Mute, offering virtual
performances and discussions with artists, using Fido™ platforms to
amplify the voices of Canadian musical talent representing the
BIPOC and LGBTQ2S+ communities.
- Deepening our commitment to global
environmental, social, and governance (ESG) reporting to support
our people, our communities, and the planet by expanding disclosure
beyond the Global Reporting Initiative (GRI) to include the
Sustainable Accounting Standards Board (SASB), Task Force on
Climate-Related Financial Disclosure (TCFD), and the United
National Sustainable Development Goals (UN SDGs), which will be
reflected in our 2020 ESG Report, to be published later this
year.
Quarterly Financial Highlights
Our solid financial position enables us to
prioritize the actions we need to take as a result of COVID-19,
continue to make high priority investments in our network, and
ensure customers stay connected during this critical time.
RevenueTotal revenue increased
by 2% this quarter, largely driven by a 5% increase in Cable
service revenue.
Wireless service revenue decreased by 6% this
quarter, mainly as a result of lower roaming revenue due to
continued global travel restrictions during COVID-19, and lower
overage revenue, primarily as a result of the continued adoption of
our Rogers Infinite™ unlimited data plans. Wireless equipment
revenue increased as a result of higher gross additions and higher
device upgrades by existing subscribers and the shift in product
mix towards higher-value devices.
Cable revenue increased by 5% this quarter as a result of
disciplined promotional activity, service pricing changes, and
increases in our Internet and Ignite TV subscriber bases.
Media revenue increased by 7% this quarter,
primarily as a result of higher sports and Today's Shopping Choice™
revenue, partially offset by softness in the radio advertising
market due to COVID-19.
Adjusted EBITDA and
marginsConsolidated adjusted EBITDA increased 4% this
quarter and our adjusted EBITDA margin increased by 80 basis
points.
Wireless adjusted EBITDA decreased by 1%,
primarily as a result of the flow-through impact of the
aforementioned decrease in service revenue, partially offset by the
shift to device financing, which has improved our Wireless
equipment margin, and various cost efficiencies. This gave rise to
an adjusted EBITDA service margin of 63.0%, an improvement of 310
basis points from last year.
Cable adjusted EBITDA increased by 8% this
quarter, primarily as a result of higher service revenue, as
discussed above. This gave rise to a margin of 47.7% this quarter,
up 110 basis points from last year.
Given the seasonal nature of our Media business,
Media adjusted EBITDA is negative, but improved by $26 million this
quarter, primarily due to higher revenue as discussed above.
Net income and adjusted net
incomeNet income and adjusted net income increased this
quarter by 3% and 7%, respectively, primarily as a result of higher
adjusted EBITDA, partially offset by higher income tax expense.
Cash flow and available
liquidityThis quarter, we generated cash flow from
operating activities of $679 million, down 29%, and free cash flow
of $394 million, down 15%, as a result of increases in cash income
taxes.
As at March 31, 2021, we had $4.0 billion
of available liquidity, including $0.8 billion in cash and cash
equivalents and a combined $3.2 billion available under our bank
credit facility and receivables securitization program, and
investment-grade credit ratings.
We also returned $252 million in dividends to shareholders this
quarter and we declared a $0.50 per share dividend on
April 20, 2021.
Shaw Transaction
On March 15, 2021, we announced an agreement
with Shaw Communications Inc. (Shaw) to acquire all of Shaw's
issued and outstanding Class A Participating Shares and Class B
Non-Voting Participating Shares for a price of $40.50 per share in
cash, with the exception of the shares held by the Shaw Family
Living Trust, the controlling shareholder of Shaw, and related
persons (Shaw Family Shareholders). The Shaw Family Shareholders
will receive 60% of the consideration for their shares in the form
of Rogers Class B Non-Voting Shares on the basis of the
volume-weighted average trading price for such shares for the ten
trading days ended March 12, 2021, and the balance in cash. The
acquisition (Transaction) is valued at approximately $26 billion,
including the assumption of approximately $6 billion of Shaw
debt.
The Transaction will be implemented through a
court-approved plan of arrangement under the Business Corporations
Act (Alberta). A special committee of independent directors of Shaw
has unanimously recommended the Transaction,
and Shaw's Board of Directors has unanimously (with
Bradley Shaw abstaining) approved the Transaction and unanimously
recommends that Shaw shareholders (other than the Shaw Family
Shareholders) vote to approve the Transaction. The Transaction
requires the approval of Shaw's shareholders at a special
shareholders meeting to be held on May 20, 2021 (Shaw Special
Meeting). The Transaction is also subject to certain closing
conditions, including court approval and the receipt of applicable
approvals and expiry of certain waiting periods under the
Broadcasting Act (Canada), the Competition Act (Canada), and the
Radiocommunication Act (Canada) (collectively, Key Regulatory
Approvals). Subject to receipt of all required approvals, the
Transaction is expected to close in the first half of 2022.
The combined entity will have the scale, assets,
and capabilities needed to deliver unprecedented wireline and
wireless broadband and network investments, innovation, and growth
in new telecommunications services, and greater choice for Canadian
consumers and businesses. As part of the Transaction, the combined
company will invest $2.5 billion to build 5G networks across
Western Canada over the next five years and Rogers will commit to
establishing a new $1 billion Rogers Rural and Indigenous
Connectivity Fund dedicated to connecting rural, remote, and
indigenous communities across Western Canada to high-speed Internet
and closing critical connectivity gaps faster for underserved
areas.
In connection with the Transaction, we have
entered into a binding commitment letter for a committed credit
facility with a syndicate of banks in an amount up to $19 billion.
See "Managing Our Liquidity and Financial Resources" for more
information on the committed facility.
The Transaction is subject to a number of
additional risks. For more information, see "Updates to Risks and
Uncertainties - Shaw Transaction" in our First Quarter 2021
Management's Discussion and Analysis.
About Rogers
Rogers is a proud Canadian company dedicated to
making more possible for Canadians each and every day. Our founder,
Ted Rogers, purchased his first radio station, CHFI™, in 1960. We
have grown to become a leading technology and media company that
strives to provide the very best in wireless, residential, sports,
and media to Canadians and Canadian businesses. 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).
Investment community contact |
Media contact |
|
|
Paul Carpino |
Andrew Garas |
647.435.6470 |
647.242.7924 |
paul.carpino@rci.rogers.com |
andrew.garas@rci.rogers.com |
Quarterly Investment Community
Teleconference
Our first quarter 2021 results teleconference
with the investment community will be held on:
- April 21, 2021
- 8:00 a.m. Eastern Time
- webcast available at
investors.rogers.com
- media are welcome to participate on
a listen-only basis
A rebroadcast will be available at
investors.rogers.com 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
investors.rogers.com.
For More Information
You can find more information relating to us on
our website (investors.rogers.com), 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 investors.rogers.com 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
months ended March 31, 2021, as well as forward-looking
information about future periods. This earnings release should be
read in conjunction with our First Quarter 2021 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 2020
Annual Management's Discussion and Analysis (MD&A); our
2020 Annual 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.
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 2020 Annual MD&A.
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.
All dollar amounts in this earnings release 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. This earnings release is current as at
April 20, 2021 and was approved by RCI's Board of Directors
(the Board) on that date. This earnings release includes
forward-looking statements and assumptions. See "About
Forward-Looking Information" for more information.
We are publicly traded on the Toronto Stock
Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange
(NYSE: RCI).
In this earnings release, this quarter, the
quarter, or first quarter refer to the three months ended
March 31, 2021, unless the context indicates otherwise. All
results commentary is compared to the equivalent period in 2020 or
as at December 31, 2020, as applicable, unless otherwise
indicated. References to COVID-19 are to the pandemic from the
outbreak of this virus and to its associated impacts in the
jurisdictions in which we operate and globally, as applicable.
™Rogers and related marks are trademarks of
Rogers Communications Inc. or an affiliate, used under licence. All
other brand names, logos, and marks are trademarks and/or copyright
of their respective owners. ©2021 Rogers Communications
Reportable segmentsWe report
our results of operations in three reportable segments. Each
segment and the nature of its business is as follows:
Segment |
Principal activities |
Wireless |
Wireless telecommunications operations for Canadian consumers and
businesses. |
Cable |
Cable telecommunications operations, including Internet,
television, telephony (phone), and smart home monitoring services
for Canadian consumers and businesses, and network connectivity
through our fibre network and data centre assets to support a range
of voice, data, networking, hosting, and cloud-based services for
the business, public sector, and carrier wholesale markets. |
Media |
A diversified portfolio of media properties, including sports media
and entertainment, television and radio broadcasting, specialty
channels, multi-platform shopping, and digital media. |
Wireless and Cable are operated by our wholly
owned subsidiary, Rogers Communications Canada Inc. (RCCI), and
certain of our other wholly owned subsidiaries. Media is operated
by our wholly owned subsidiary, Rogers Media Inc., and its
subsidiaries.
Summary of Consolidated Financial Results
|
Three months ended March 31 |
|
|
(In millions of dollars, except margins and per share amounts) |
|
2021 |
|
|
|
2020 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Wireless |
|
2,074 |
|
|
|
2,077 |
|
|
— |
|
|
Cable |
|
1,020 |
|
|
|
973 |
|
|
5 |
|
|
Media |
|
440 |
|
|
|
412 |
|
|
7 |
|
|
Corporate items and intercompany eliminations |
|
(46 |
) |
|
|
(46 |
) |
|
— |
|
|
Revenue |
|
3,488 |
|
|
|
3,416 |
|
|
2 |
|
|
Total service revenue 1 |
|
3,021 |
|
|
|
3,049 |
|
|
(1 |
) |
|
|
|
|
|
Adjusted EBITDA 2 |
|
|
|
Wireless |
|
1,013 |
|
|
|
1,026 |
|
|
(1 |
) |
|
Cable |
|
487 |
|
|
|
453 |
|
|
8 |
|
|
Media |
|
(59 |
) |
|
|
(85 |
) |
|
(31 |
) |
|
Corporate items and intercompany eliminations |
|
(50 |
) |
|
|
(59 |
) |
|
(15 |
) |
|
Adjusted EBITDA 2 |
|
1,391 |
|
|
|
1,335 |
|
|
4 |
|
|
Adjusted EBITDA margin 2 |
|
39.9 |
% |
|
|
39.1 |
% |
|
0.8 |
pts |
|
|
|
|
|
Net income |
|
361 |
|
|
|
352 |
|
|
3 |
|
|
Basic earnings per share |
|
$0.71 |
|
|
|
$0.70 |
|
|
1 |
|
|
Diluted earnings per share |
|
$0.70 |
|
|
|
$0.68 |
|
|
3 |
|
|
|
|
|
|
Adjusted net income 2 |
|
394 |
|
|
|
367 |
|
|
7 |
|
|
Adjusted basic earnings per share 2 |
|
$0.78 |
|
|
|
$0.73 |
|
|
7 |
|
|
Adjusted diluted earnings per share 2 |
|
$0.77 |
|
|
|
$0.71 |
|
|
8 |
|
|
|
|
|
|
Capital expenditures |
|
484 |
|
|
|
593 |
|
|
(18 |
) |
|
Cash provided by operating activities |
|
679 |
|
|
|
959 |
|
|
(29 |
) |
|
Free cash flow 2 |
|
394 |
|
|
|
462 |
|
|
(15 |
) |
|
1 As defined. See "Key Performance
Indicators".2 Adjusted EBITDA, adjusted net income, 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 and Related Performance Measures" for
information about these measures, including how we calculate them
and the ratios in which they are used.
Results of our Reportable Segments
WIRELESS
Wireless Financial Results
|
Three months ended March 31 |
|
|
(In millions of dollars, except margins) |
2021 |
|
|
2020 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Service revenue |
1,609 |
|
|
1,712 |
|
|
(6 |
) |
|
Equipment revenue |
465 |
|
|
365 |
|
|
27 |
|
|
Revenue |
2,074 |
|
|
2,077 |
|
|
— |
|
|
|
|
|
|
Operating expenses |
|
|
|
Cost of equipment |
466 |
|
|
374 |
|
|
25 |
|
|
Other operating expenses |
595 |
|
|
677 |
|
|
(12 |
) |
|
Operating expenses |
1,061 |
|
|
1,051 |
|
|
1 |
|
|
|
|
|
|
Adjusted EBITDA |
1,013 |
|
|
1,026 |
|
|
(1 |
) |
|
|
|
|
|
Adjusted EBITDA service margin 1 |
63.0 |
% |
|
59.9 |
% |
|
3.1 |
pts |
|
Adjusted EBITDA margin 2 |
48.8 |
% |
|
49.4 |
% |
|
(0.6 |
pts) |
|
Capital expenditures |
225 |
|
|
281 |
|
|
(20 |
) |
|
1 Calculated using service
revenue.2 Calculated using total revenue.
Wireless Subscriber Results 1
|
Three months ended March 31 |
|
|
(In thousands, except churn, blended ABPU, and blended ARPU) |
|
2021 |
|
|
|
2020 |
|
|
|
Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid |
|
|
|
|
|
|
|
|
|
|
|
|
Gross additions |
|
301 |
|
|
|
257 |
|
|
|
44 |
|
|
Net additions (losses) |
|
44 |
|
|
|
(6 |
) |
|
|
50 |
|
|
Total postpaid subscribers 2 |
|
9,727 |
|
|
|
9,432 |
|
|
|
295 |
|
|
Churn (monthly) |
|
0.88 |
% |
|
|
0.93 |
% |
|
|
(0.05 |
pts) |
|
Prepaid |
|
|
|
Gross additions |
|
106 |
|
|
|
141 |
|
|
|
(35 |
) |
|
Net losses |
|
(56 |
) |
|
|
(66 |
) |
|
|
10 |
|
|
Total prepaid subscribers 2 |
|
1,204 |
|
|
|
1,336 |
|
|
|
(132 |
) |
|
Churn (monthly) |
|
4.36 |
% |
|
|
4.98 |
% |
|
|
(0.62 |
pts) |
|
Blended ABPU (monthly) |
|
$62.13 |
|
|
|
$65.14 |
|
|
|
($3.01 |
) |
|
Blended ARPU (monthly) |
|
$49.09 |
|
|
|
$52.85 |
|
|
|
($3.76 |
) |
|
1 Subscriber counts, subscriber churn, blended
ABPU, and blended ARPU are key performance indicators. See "Key
Performance Indicators".2 As at end of period.
Service revenueThe 6% decrease
in service revenue and the 7% decrease in blended ARPU this quarter
were a result of:
- lower roaming revenue, due to
continued global travel restrictions during COVID-19; and
- a decrease in overage revenue as a
result of strong customer adoption of our Rogers Infinite unlimited
data plans and lower wireless data usage as customers spent more
time at home on WiFi during COVID-19.
The 5% decrease in blended ABPU this quarter was
primarily a result of the declines in roaming and overage revenue,
partially offset by an ongoing shift as subscribers finance new,
higher-value device purchases.
The increase in postpaid gross additions, the
higher postpaid net additions, and the improved postpaid churn this
quarter were all a result of strong execution and an increase in
market activity by Canadians.
Equipment revenueThe 27%
increase in equipment revenue this quarter was a result of:
- higher gross additions and device
upgrades by existing customers; and
- the shift in product mix towards
higher-value devices.
Operating expensesCost of
equipmentThe 25% increase in the cost of equipment this quarter was
a result of the same factors discussed in equipment revenue above.
The shift to customers financing their device purchases is
reflected in the improvements in our equipment margin.
Other operating expenses The 12% decrease in
other operating expenses this quarter was primarily a result
of:
- lower roaming costs due to COVID-19
travel restrictions; and
- various cost efficiencies and
productivity initiatives.
Adjusted EBITDAThe 1% decrease
in adjusted EBITDA this quarter was a result of the revenue and
expense changes discussed above.
CABLE
Cable Financial Results
|
Three months ended March 31 |
|
|
(In millions of dollars, except margins) |
2021 |
|
|
2020 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Service revenue |
1,018 |
|
|
971 |
|
|
5 |
|
|
Equipment revenue |
2 |
|
|
2 |
|
|
— |
|
|
Revenue |
1,020 |
|
|
973 |
|
|
5 |
|
|
|
|
|
|
Operating expenses |
533 |
|
|
520 |
|
|
3 |
|
|
|
|
|
|
Adjusted EBITDA |
487 |
|
|
453 |
|
|
8 |
|
|
|
|
|
|
Adjusted EBITDA margin |
47.7 |
% |
|
46.6 |
% |
|
1.1 |
pts |
|
Capital expenditures |
212 |
|
|
251 |
|
|
(16 |
) |
|
Cable Subscriber Results 1
|
Three months ended March 31 |
|
|
(In thousands, except ARPA and penetration) |
|
2021 |
|
|
|
2020 |
|
|
|
Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet |
|
|
|
|
|
|
|
|
|
|
|
|
Net additions |
|
14 |
|
|
|
17 |
|
|
|
(3 |
) |
|
Total Internet subscribers 2 |
|
2,612 |
|
|
|
2,551 |
|
|
|
61 |
|
|
Ignite TV |
|
|
|
Net additions |
|
58 |
|
|
|
91 |
|
|
|
(33 |
) |
|
Total Ignite TV subscribers 2 |
|
602 |
|
|
|
417 |
|
|
|
185 |
|
|
|
|
|
|
Homes passed 2 |
|
4,599 |
|
|
|
4,500 |
|
|
|
99 |
|
|
Customer relationships |
|
|
|
Net additions |
|
6 |
|
|
|
2 |
|
|
|
4 |
|
|
Total customer relationships 2 |
|
2,536 |
|
|
|
2,512 |
|
|
|
24 |
|
|
ARPA (monthly) |
|
$133.95 |
|
|
|
$128.91 |
|
|
|
$5.04 |
|
|
|
|
|
|
Penetration 2 |
|
55.1 |
% |
|
|
55.8 |
% |
|
|
(0.7 |
pts) |
|
1 Subscriber results are key performance indicators. See "Key
Performance Indicators".2 As at end of period.
Service revenueThe 5% increase
in service revenue this quarter was a result of:
- a 4% increase in ARPA as a result
of disciplined promotional activity and Internet and legacy
television service pricing changes in late 2020; and
- the increase in total customer
relationships over the past year, due to growth in our Internet and
Ignite TV™ subscriber bases; partially offset by
- declines in our legacy television
and home phone subscriber bases.
We remain focused on our Connected Home roadmap,
driven by our Ignite TV product. During the past year, we have
achieved significant growth in our Ignite TV subscriber base. The
next steps on our roadmap include adding more apps and content to
Ignite TV and launching more new products to help keep our
customers connected.
Operating expensesThe 2%
increase in operating expenses this quarter was a result of higher
costs related to the increased revenue, partially offset by various
cost efficiencies and productivity initiatives.
Adjusted EBITDAThe 8% increase
in adjusted EBITDA this quarter was a result of the service revenue
and expense changes discussed above.
MEDIA
Media Financial Results
|
Three months ended March 31 |
|
|
(In millions of dollars, except margins) |
2021 |
|
|
2020 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
440 |
|
|
412 |
|
|
7 |
|
|
Operating expenses |
499 |
|
|
497 |
|
|
— |
|
|
|
|
|
|
Adjusted EBITDA |
(59 |
) |
|
(85 |
) |
|
(31 |
) |
|
|
|
|
|
Adjusted EBITDA margin |
(13.4 |
)% |
|
(20.6 |
)% |
|
7.2 |
pts |
|
Capital expenditures |
18 |
|
|
12 |
|
|
50 |
|
|
RevenueThe 7% increase in
revenue this quarter was a result of:
- higher sports-related revenue;
and
- higher Today's Shopping Choice
revenue; partially offset by
- lower radio-related advertising
revenue as a result of softness in the market due to COVID-19.
Operating expensesThe stable
operating expenses this quarter were a result of:
- higher programming costs; and
- higher cost of sales at Today's
Shopping Choice in line with higher revenue as discussed above;
offset by
- lower production and other general
operating costs as a result of cost efficiencies.
Adjusted EBITDAThe increase in
adjusted EBITDA this quarter was a result of the revenue and
expense changes discussed above.
CAPITAL EXPENDITURES
|
Three months ended March 31 |
|
|
(In millions of dollars, except capital intensity) |
2021 |
|
|
2020 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless |
225 |
|
|
281 |
|
|
(20 |
) |
|
Cable |
212 |
|
|
251 |
|
|
(16 |
) |
|
Media |
18 |
|
|
12 |
|
|
50 |
|
|
Corporate |
29 |
|
|
49 |
|
|
(41 |
) |
|
|
|
|
|
Capital expenditures 1 |
484 |
|
|
593 |
|
|
(18 |
) |
|
|
|
|
|
Capital intensity 2 |
13.9 |
% |
|
17.4 |
% |
|
(3.5 |
pts) |
|
1 Includes additions to property, plant and
equipment net of proceeds on disposition, but does not include
expenditures for spectrum licences or additions to right-of-use
assets.2 As defined. See "Key Performance Indicators".
Consolidated capital expenditures have declined
by 18% this quarter. Most of this decline has been a result of
lower costs given the introduction of self-install in our Cable
business, the delay of certain projects as a result of COVID-19,
and overall cost efficiencies as evidenced by our improving capital
intensity ratios. Despite the overall decline, we continue to
prioritize capital spending to support our long-term strategy,
including expansion of our 5G network and our Connected Home
roadmap.
WirelessCapital expenditures in
Wireless this quarter, while lower than in 2020, reflect continued
investments in our networks. We continued to work on our 5G
deployments in the 600 MHz band and other bands as we have deployed
our 5G network in 173 cities and towns and we continued rolling out
our 5G standalone core network in Montreal, Ottawa, Toronto, and
Vancouver.
CableThe decrease in capital
expenditures in Cable this quarter was a result of the realization
of self-install and other capital efficiencies and improved capital
intensity as we prioritized network infrastructure projects,
including additional fibre deployments to increase our
fibre-to-the-home and fibre-to-the-curb distribution. These
upgrades will lower the number of homes passed per node and
incorporate the latest technologies to help deliver more bandwidth
and an even more reliable customer experience as we progress in our
Connected Home roadmap.
MediaThe increase in capital
expenditures in Media this quarter was primarily a result of higher
broadcast infrastructure expenditures and higher stadium and
facility investments at the Toronto Blue Jays™.
CorporateThe decrease in
corporate capital expenditures this quarter was a result of lower
investments in our real estate facilities.
Capital intensityCapital
intensity decreased this quarter as a result of lower capital
expenditures and higher revenue, as discussed above.
Regulatory Developments
See our 2020 Annual MD&A for a discussion of
the significant regulations that affected our operations as at
March 4, 2021. The following is the significant regulatory
development since that date.
CRTC review of mobile wireless
servicesOn April 15, 2021 the Canadian Radio-television
and Telecommunications Commission (CRTC) issued Telecom Regulatory
Policy 2021-130, Review of mobile wireless services. The CRTC
mandated wholesale mobile virtual network operator (MVNO) access,
seamless handoff for mandated wholesale roaming, and new mandatory
low-cost and occasional-use retail rate plans; however, mandated
MVNO access will only be provided if certain conditions are met as
described briefly below.
The CRTC decided that mandated wholesale MVNO
access must be offered by the national carriers, and SaskTel in
Saskatchewan, but only made available to eligible regional wireless
carriers that hold mobile spectrum licences, and only in the areas
that are covered by their licences. The terms and conditions
associated with mandated MVNO access must be approved by the CRTC,
while rates will be subject to commercial negotiation, backstopped
by final offer arbitration, with the CRTC acting as arbitrator.
Mandated MVNO access will be limited to a seven-year period
commencing on the date the CRTC finalizes the terms and conditions.
This time limit is intended to provide the regional carriers
sufficient time to expand their networks while maintaining
investment incentives.
The national wireless carriers must also provide
seamless handoff as part of the mandatory roaming they must offer
to the regional wireless carriers. Seamless handoff will ensure
that calls in progress are not dropped when customers travel
outside their home network coverage and into the coverage of their
roaming provider.
The CRTC also directed the national wireless
carriers to offer 5G roaming where the roaming network offers 5G
service on its own network and to file proposed revised terms and
conditions within 90 days for CRTC approval.
Finally, the CRTC mandated retail rate plans for
low-cost and occasional use. The national carriers and SaskTel will
be expected to offer and promote the new mandatory low-cost and
occasional-use plans on their premium brands. These plans are to be
offered by July 14, 2021.
Key Performance Indicators
We measure the success of our strategy using a
number of key performance indicators that are defined and discussed
in our 2020 Annual MD&A and this earnings release. We believe
these key performance indicators allow us to appropriately measure
our performance against our operating strategy and 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 alternatives to net income or any other measure
of performance under IFRS. They include:
- subscriber counts;
- Wireless;
- Cable; and
- homes passed (Cable);
- Wireless subscriber churn
(churn);
- Wireless blended average billings
per user(ABPU);
- Wireless blended average revenue
per user(ARPU);
- Cable average revenue per account
(ARPA);
- Cable customer relationships;
- Cable market penetration
(penetration);
- capital intensity; and
- total service revenue.
Non-GAAP Measures and Related Performance
Measures
We use the following non-GAAP measures and
related performance measures. These are reviewed regularly by
management and the 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 or related performance
measure |
Why we use it |
How we calculate it |
MostcomparableIFRS financialmeasure |
Adjusted EBITDAAdjusted EBITDA 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. |
Adjusted EBITDA:Net incomeadd (deduct)income tax expense
(recovery); finance costs; depreciation and amortization; other
expense (income); restructuring, acquisition and other; and loss
(gain) on disposition of property, plant and equipment.Adjusted
EBITDA margin:Adjusted EBITDAdivided byrevenue (or service revenue
for Wireless). |
Net income |
● |
|
We believe that certain investors and analysts use adjusted EBITDA
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 netincome Adjusted basicand dilutedearnings
pershare |
● |
|
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 incomeadd (deduct)restructuring,
acquisition and other; loss (recovery) on sale or wind down of
investments; loss (gain) on disposition of property, plant and
equipment; (gain) on acquisitions; loss on non-controlling interest
purchase obligations; loss on repayment of long-term debt; loss on
bond forward derivatives; 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 and adjusted net income including the dilutive effect of
stock-based compensationdivided bybasic and diluted weighted
average shares outstanding. |
Net income Basic anddilutedearnings pershare |
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. |
Adjusted
EBITDAdeductcapital expenditures; interest on borrowings net of
capitalized interest; and cash income taxes. |
Cash
providedby operatingactivities |
● |
|
We believe that some investors and analysts use free cash flow to
value a business and its underlying assets. |
Adjusted netdebt |
● |
|
To conduct valuation-related analysis and make decisions about
capital structure. |
Total long-term debtadd (deduct)current portion of long-term debt;
deferred transaction costs and discounts; net debt derivative
(assets) liabilities associated with issued debt; credit risk
adjustment related to net debt derivatives; current portion of
lease liabilities; lease liabilities; bank advances (cash and cash
equivalents); and short-term borrowings. |
Long-termdebt |
● |
|
We believe this helps investors and analysts analyze our enterprise
and equity value and assess our leverage. |
Debt leverage ratio |
● |
|
To conduct valuation-related analysis and make decisions about
capital structure. |
Adjusted net debt (defined above)divided by12-month trailing
adjusted EBITDA (defined above). |
Long-term debtdivided by netincome |
● |
|
We believe this helps investors and analysts analyze our enterprise
and equity value and assess our leverage. |
Reconciliation of adjusted EBITDA
|
Three months ended March 31 |
|
|
(In millions of dollars) |
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
Net income |
361 |
|
|
352 |
|
|
Add: |
|
|
Income tax expense |
128 |
|
|
117 |
|
|
Finance costs |
218 |
|
|
220 |
|
|
Depreciation and amortization |
638 |
|
|
639 |
|
|
EBITDA |
1,345 |
|
|
1,328 |
|
|
Add (deduct): |
|
|
Other expense (income) |
1 |
|
|
(14 |
) |
|
Restructuring, acquisition and other |
45 |
|
|
21 |
|
|
|
|
|
Adjusted EBITDA |
1,391 |
|
|
1,335 |
|
|
Reconciliation of adjusted EBITDA margin
|
Three months ended March 31 |
|
|
(In millions of dollars, except margins) |
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
1,391 |
|
|
1,335 |
|
|
Divided by: total revenue |
3,488 |
|
|
3,416 |
|
|
|
|
|
Adjusted EBITDA margin |
39.9 |
% |
|
39.1 |
% |
|
Reconciliation of adjusted net income
|
Three months ended March 31 |
|
|
(In millions of dollars) |
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
Net income |
361 |
|
|
352 |
|
|
Add (deduct): |
|
|
Restructuring, acquisition and other |
45 |
|
|
21 |
|
|
Income tax impact of above items |
(12 |
) |
|
(6 |
) |
|
|
|
|
Adjusted net income |
394 |
|
|
367 |
|
|
Reconciliation of adjusted earnings per
share
|
Three months ended March 31 |
|
|
(In millions of dollars, except per share amounts; number of shares
outstanding in millions) |
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic earnings per share: |
|
|
|
|
|
|
|
|
Adjusted net income |
|
394 |
|
|
|
367 |
|
|
Divided by: |
|
|
Weighted average number of shares outstanding |
|
505 |
|
|
|
505 |
|
|
|
|
|
Adjusted basic earnings per share |
|
$0.78 |
|
|
|
$0.73 |
|
|
|
|
|
Adjusted diluted earnings per share: |
|
|
Diluted adjusted net income |
|
389 |
|
|
|
357 |
|
|
Divided by: |
|
|
Diluted weighted average number of shares outstanding |
|
506 |
|
|
|
506 |
|
|
|
|
|
Adjusted diluted earnings per share |
|
$0.77 |
|
|
|
$0.71 |
|
|
Reconciliation of free cash flow
|
Three months ended March 31 |
|
|
(In millions of dollars) |
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
679 |
|
|
959 |
|
|
Add (deduct): |
|
|
Capital expenditures |
(484 |
) |
|
(593 |
) |
|
Interest on borrowings, net of capitalized interest |
(188 |
) |
|
(187 |
) |
|
Interest paid |
216 |
|
|
200 |
|
|
Restructuring, acquisition and other |
45 |
|
|
21 |
|
|
Program rights amortization |
(20 |
) |
|
(22 |
) |
|
Change in net operating assets and liabilities |
187 |
|
|
132 |
|
|
Other adjustments |
(41 |
) |
|
(48 |
) |
|
|
|
|
Free cash flow |
394 |
|
|
462 |
|
|
Reconciliation of adjusted net debt and debt leverage
ratio
|
As at |
|
|
As at |
|
|
|
March 31 |
|
|
December 31 |
|
|
(In millions of dollars) |
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
Current portion of long-term debt |
943 |
|
|
1,450 |
|
|
Long-term debt |
15,670 |
|
|
16,751 |
|
|
Deferred transaction costs and discounts |
168 |
|
|
172 |
|
|
|
16,781 |
|
|
18,373 |
|
|
Add (deduct): |
|
|
Net debt derivative assets |
(1,077 |
) |
|
(1,086 |
) |
|
Credit risk adjustment related to net debt derivative assets |
(16 |
) |
|
(15 |
) |
|
Short-term borrowings |
1,238 |
|
|
1,221 |
|
|
Current portion of lease liabilities |
293 |
|
|
278 |
|
|
Lease liabilities |
1,593 |
|
|
1,557 |
|
|
Cash and cash equivalents |
(801 |
) |
|
(2,484 |
) |
|
|
|
|
Adjusted net debt |
18,011 |
|
|
17,844 |
|
|
|
As at |
|
As at |
|
|
March 31 |
|
December 31 |
|
(In millions of dollars, except ratios) |
2021 |
|
2020 |
|
|
|
|
|
|
Adjusted net debt |
18,011 |
|
17,844 |
|
Divided by: trailing 12-month adjusted EBITDA |
5,913 |
|
5,857 |
|
|
|
|
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 March 31 |
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
Revenue |
|
3,488 |
|
3,416 |
|
|
|
|
Operating expenses: |
|
|
Operating costs |
|
2,097 |
|
2,081 |
|
Depreciation and amortization |
|
638 |
|
639 |
|
Restructuring, acquisition and other |
|
45 |
|
21 |
|
Finance costs |
|
218 |
|
220 |
|
Other expense (income) |
|
1 |
|
(14 |
) |
|
|
|
Income before income tax expense |
|
489 |
|
469 |
|
Income tax expense |
|
128 |
|
117 |
|
|
|
|
Net income for the period |
|
361 |
|
352 |
|
|
|
|
Earnings per share: |
|
|
Basic |
|
$0.71 |
|
$0.70 |
|
Diluted |
|
$0.70 |
|
$0.68 |
|
Rogers Communications Inc.Interim
Condensed Consolidated Statements of Financial Position(In
millions of Canadian dollars, unaudited)
|
As at |
|
As at |
|
|
March 31 |
|
December 31 |
|
|
2021 |
|
2020 |
|
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
801 |
|
2,484 |
|
Accounts receivable |
2,941 |
|
2,856 |
|
Inventories |
465 |
|
479 |
|
Current portion of contract assets |
363 |
|
533 |
|
Other current assets |
691 |
|
516 |
|
Current portion of derivative instruments |
108 |
|
61 |
|
Total current assets |
5,369 |
|
6,929 |
|
|
|
|
Property, plant and equipment |
13,978 |
|
14,018 |
|
Intangible assets |
8,931 |
|
8,926 |
|
Investments |
2,827 |
|
2,536 |
|
Derivative instruments |
1,315 |
|
1,378 |
|
Financing receivables |
744 |
|
748 |
|
Other long-term assets |
297 |
|
346 |
|
Goodwill |
3,991 |
|
3,973 |
|
|
|
|
Total assets |
37,452 |
|
38,854 |
|
|
|
|
Liabilities and shareholders' equity |
|
|
Current liabilities: |
|
|
Short-term borrowings |
1,238 |
|
1,221 |
|
Accounts payable and accrued liabilities |
2,461 |
|
2,714 |
|
Income tax payable |
281 |
|
344 |
|
Other current liabilities |
306 |
|
243 |
|
Contract liabilities |
354 |
|
336 |
|
Current portion of long-term debt |
943 |
|
1,450 |
|
Current portion of lease liabilities |
293 |
|
278 |
|
Total current liabilities |
5,876 |
|
6,586 |
|
|
|
|
Provisions |
43 |
|
42 |
|
Long-term debt |
15,670 |
|
16,751 |
|
Lease liabilities |
1,593 |
|
1,557 |
|
Other long-term liabilities |
1,078 |
|
1,149 |
|
Deferred tax liabilities |
3,121 |
|
3,196 |
|
Total liabilities |
27,381 |
|
29,281 |
|
|
|
|
Shareholders' equity |
10,071 |
|
9,573 |
|
|
|
|
Total liabilities and shareholders' equity |
37,452 |
|
38,854 |
|
Rogers Communications Inc.Interim
Condensed Consolidated Statements of Cash Flows(In
millions of Canadian dollars, unaudited)
|
Three months ended March 31 |
|
|
|
2021 |
|
|
2020 |
|
|
Operating activities: |
|
|
|
|
|
|
Net income for the period |
361 |
|
|
352 |
|
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
Depreciation and amortization |
638 |
|
|
639 |
|
|
Program rights amortization |
20 |
|
|
22 |
|
|
Finance costs |
218 |
|
|
220 |
|
|
Income tax expense |
128 |
|
|
117 |
|
|
Post-employment benefits contributions, net of expense |
16 |
|
|
12 |
|
|
Other |
26 |
|
|
22 |
|
|
Cash provided by operating activities before changes in net
operating assets and liabilities, income taxes paid, and interest
paid |
1,407 |
|
|
1,384 |
|
|
Change in net operating assets and liabilities |
(187 |
) |
|
(132 |
) |
|
Income taxes paid |
(325 |
) |
|
(93 |
) |
|
Interest paid |
(216 |
) |
|
(200 |
) |
|
|
|
|
Cash provided by operating activities |
679 |
|
|
959 |
|
|
|
|
|
Investing activities: |
|
|
Capital expenditures |
(484 |
) |
|
(593 |
) |
|
Additions to program rights |
(12 |
) |
|
(15 |
) |
|
Changes in non-cash working capital related to capital expenditures
and intangible assets |
(116 |
) |
|
(129 |
) |
|
Other |
(6 |
) |
|
(19 |
) |
|
|
|
|
Cash used in investing activities |
(618 |
) |
|
(756 |
) |
|
|
|
|
Financing activities: |
|
|
Net proceeds received from (repayments of) short-term
borrowings |
22 |
|
|
(1,417 |
) |
|
Net (repayment) issuance of long-term debt |
(1,450 |
) |
|
2,885 |
|
|
Net (payments) proceeds on settlement of debt derivatives and
forward contracts |
(2 |
) |
|
90 |
|
|
Transaction costs incurred |
— |
|
|
(16 |
) |
|
Principal payments of lease liabilities |
(62 |
) |
|
(50 |
) |
|
Dividends paid |
(252 |
) |
|
(253 |
) |
|
|
|
|
Cash (used in) provided by financing activities |
(1,744 |
) |
|
1,239 |
|
|
|
|
|
Change in cash and cash equivalents |
(1,683 |
) |
|
1,442 |
|
|
Cash and cash equivalents, beginning of period |
2,484 |
|
|
494 |
|
|
|
|
|
Cash and cash equivalents, end of period |
801 |
|
|
1,936 |
|
|
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;
- 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 and Related
Performance Measures"), among others:
- revenue;
- total service revenue;
- adjusted EBITDA;
- capital expenditures;
- 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;
- our debt leverage ratio;
- statements relating to plans we have implemented in response to
COVID-19 and its impact on us;
- the expected timing and completion of the Transaction is
subject to closing conditions, termination rights, and other risks
and uncertainties including, without limitation, court,
shareholder, and regulatory approvals;
- the benefits expected to result from the Transaction are
subject to the successful and timely integration and consolidation
of Shaw's operations, business and workforce; and
- all other statements that are not historical facts.
Our conclusions, forecasts, and projections are
based 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;
- industry structure and stability;
and
- the impact of COVID-19 on our
operations, liquidity, financial condition, or results.
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 uncertaintiesActual
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, geopolitical, and other conditions affecting
commercial activity;
- 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;
- external threats, such as epidemics, pandemics, and other
public health crises, natural disasters, or cyberattacks, among
others;
- risks related to the Transaction, including the timing,
receipt, and conditions of the Key Regulatory Approvals;
satisfaction of the various conditions to close the Transaction;
financing the Transaction; and the anticipated benefits and
successful integration of the businesses and operations of Rogers
and Shaw; and the other risks outlined in "Updates to Risks and
Uncertainties - Shaw Transaction" in our First Quarter 2021
Management's Discussion and Analysis; 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
decisionBefore making any investment decisions and for a
detailed discussion of the risks, uncertainties, and environment
associated with our business, its operations, and its financial
performance and condition, fully review the sections of this
earnings release entitled "Updates to Risks and Uncertainties" and
"Regulatory Developments" and fully review the sections in our 2020
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 sedar.com, sec.gov, our website, or any other website
referenced in this document is not part of or incorporated into
this earnings release.
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