Rogers Communications Inc. today announced its unaudited financial
and operating results for the first quarter ended March 31,
2022.
Consolidated Financial Highlights
|
Three months ended March 31 |
|
(In millions of Canadian dollars, except per share amounts,
unaudited) |
|
2022 |
|
|
2021 |
|
% Chg |
|
|
|
|
|
|
Total revenue |
|
3,619 |
|
|
3,488 |
|
4 |
|
Total service revenue |
|
3,196 |
|
|
3,021 |
|
6 |
|
Adjusted EBITDA 1 |
|
1,539 |
|
|
1,391 |
|
11 |
|
Net income |
|
392 |
|
|
361 |
|
9 |
|
Adjusted net income 1 |
|
462 |
|
|
394 |
|
17 |
|
|
|
|
|
|
Diluted earnings per share |
|
$0.77 |
|
|
$0.70 |
|
10 |
|
Adjusted diluted earnings per share 1 |
|
$0.91 |
|
|
$0.77 |
|
18 |
|
|
|
|
|
|
Cash provided by operating activities |
|
813 |
|
|
679 |
|
20 |
|
Free cash flow 1 |
|
515 |
|
|
394 |
|
31 |
|
"Rogers delivered strong first quarter results
across all our businesses, driven by better execution and the
continued improvement in Canada's economy," said Tony Staffieri,
President and CEO. "We are very confident about the opportunities
ahead, driven by the exceptional quality of our assets and the
dedicated efforts of the Rogers team. As a result, we are
increasing Rogers' 2022 service revenue, adjusted EBITDA, and free
cash flow guidance to reflect our improved outlook, ahead of
further growth associated with the Shaw transaction."
"In March, the CRTC approved the transfer of the
broadcast distribution undertaking licences held by Shaw to Rogers.
This approval is an important milestone and brings us one step
closer to completing our transformational transaction, which we
expect to close in Q2. Teams from both Rogers and Shaw continue to
work constructively with the Competition Bureau and ISED Canada to
ensure they have the information they need to assess the
significant benefits the combined company will bring to Canadians
and the Canadian economy."
______________________________
1 Mobile phone ARPU is a supplementary financial
measure. Adjusted EBITDA is a total of segments measure. Free cash
flow is a capital management measure. Adjusted diluted earnings per
share is a non-GAAP ratio. Adjusted net income is a non-GAAP
financial measure and is a component of adjusted diluted earnings
per share. See "Non-GAAP and Other Financial Measures" in our Q1
2022 Management's Discussion and Analysis (MD&A), available at
www.sedar.com, and this earnings release for more information about
each of these measures. These are not standardized financial
measures under International Financial Reporting Standards (IFRS)
and might not be comparable to similar financial measures disclosed
by other companies.2 See "Financial Guidance".
Operating Environment and Strategic
Highlights
The Canadian economy is recovering and beginning
to grow as immigration levels increase and COVID-19 restrictions
have increasingly been relaxed or removed, including travel and
capacity restrictions, masking mandates, and vaccine mandates.
Travel volumes have increased in recent months, resulting in higher
roaming revenue, and sporting events can now be filled to venue
capacity, which will result in greater attendance and game day
revenue as we welcome fans back to Rogers Centre.
While the general recovery is encouraging,
COVID-19 remains a risk and we will continue to stay focused on
keeping our employees safe and our customers connected. 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 four focus areas 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 for the
quarter.
Successfully complete the Shaw acquisition and
integration
- Received approval from the Canadian
Radio-television and Telecommunications Commission (CRTC) for the
transfer of Shaw Communications Inc.'s (Shaw) broadcasting
services, achieving a significant regulatory milestone on the
journey to closing the transformational transaction with Shaw
(Transaction).
- Issued a combined $13.3 billion of
Cdn$-equivalent senior notes at a weighted average cost of
borrowing of 4.21% and a weighted average term to maturity of 13.9
years for net proceeds of $13.1 billion, successfully refinancing
the committed credit facility we arranged to support the
Transaction in March 2021.
- Issued US$750 million of
subordinated notes due 2082 with an initial coupon of 5.25% for the
first five years in February 2022.
Invest in our networks to deliver world-class
connectivity to Canadian consumers and businesses
- Awarded Best In Test in umlaut's
first Canadian fixed broadband report in January, winning fastest
upload and download speeds and scoring more than 60% higher than
our nearest competitor in average download speeds amongst national
Internet service providers.
- Recognized in January as Canada's
most consistent national wireless and broadband provider, with the
fastest Internet in Ontario, New Brunswick, and Newfoundland and
Labrador, by Ookla, the global leader in fixed broadband and mobile
network testing applications.
- Launched the first commercial 5G
standalone network in Canada, bringing network slicing capabilities
and lower latency, expanding Rogers 5G footprint, and supporting
future enterprise and consumer applications.
- Successfully completed 8 gigabits
per second symmetrical upload and download tests in both lab and
customer trials on our fibre-powered network, the fastest published
Internet speed in Canada among major Internet service
providers.
- Announced six new cellular towers,
and upgrades of two existing towers, bringing critical connectivity
along Highway 4 in British Columbia and helping to bridge the
digital divide.
- Announced we will invest almost
$200 million to upgrade our network in New Brunswick with 100% pure
fibre, delivering the latest Internet technology and an ultimate
entertainment experience.
- Expanded Canada's largest and most
reliable 5G network to 18 new communities as part of the
partnership with the Eastern Ontario Regional Network, alongside
the Government of Canada and the Province of Ontario.
- Announced Canada's first 5G
Wireless Private Network in a mining operation at Detour Lake
Mine.
Invest in our customer experience to deliver
timely, high-quality customer service consistently to our
customers
- Announced a five-year strategic
alliance with Microsoft that will leverage Azure's public cloud
capabilities to enhance customers' digital experiences, power
hybrid work, and drive 5G innovation across the country.
- Announced a suite of Smart Cities
and Smart Buildings Internet of Things solutions to deliver on the
growing needs of businesses and municipalities for sustainable,
secure, and operationally efficient infrastructure.
- Partnered with Corus Entertainment
to bring STACKTV to Ignite TV™ and Ignite™ SmartStream™ customers,
a first for a Canadian telecommunications provider.
- Expanded Rogers Pro On-the-Go™ to
Kelowna and Montreal. Pro On-the-Go is now available to Rogers
customers in communities in British Columbia, Alberta, Manitoba,
Ontario, Quebec, and Nova Scotia.
Improve execution and deliver strong financial
performance across all lines of business
- Generated total service revenue of
$3,196 million, up 6%, and adjusted EBITDA of $1,539 million, up
11%, and net income of $392 million, up 9%, reflecting improvements
across our business.
- Attracted 66,000 net postpaid
mobile phone subscribers, up from 22,000 last year, with churn of
0.71%.
- Generated free cash flow of $515
million, up 31%, and cash provided by operating activities of $813
million, up 20%.
Financial Guidance
We are adjusting our consolidated guidance
ranges for full-year 2022 total service revenue, adjusted EBITDA,
and free cash flow from the original ranges provided on January 27,
2022. The revised guidance ranges are presented below. The upward
adjustments primarily reflect improved execution and the continued
Canadian economic growth.
|
2021 |
|
2022 Original |
|
2022 Revised |
(In
millions of dollars, except percentages) |
Actual |
|
Guidance Ranges 1 |
|
Guidance Ranges 1 |
|
|
|
|
|
|
|
|
|
|
Total service revenue |
12,533 |
|
Increase of 4% |
to |
increase of 6% |
|
Increase of 6% |
to |
increase of 8% |
Adjusted EBITDA |
5,887 |
|
Increase of 6% |
to |
increase of 8% |
|
Increase of 8% |
to |
increase of 10% |
Capital expenditures 2 |
2,788 |
|
2,800 |
to |
3,000 |
|
2,800 |
to |
3,000 |
Free
cash flow |
1,671 |
|
1,800 |
to |
2,000 |
|
1,900 |
to |
2,100 |
1 Guidance ranges presented as percentages
reflect percentage increases over full-year 2021
results.2 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.
The above table outlines guidance ranges for
selected full-year 2022 consolidated financial metrics without
giving effect to the Transaction (see "Shaw Transaction"), the
associated financing, or any other associated transactions or
expenses. Guidance ranges will be reassessed once the Transaction
has closed. Our guidance, including the various assumptions
underlying it, is forward-looking and should be read in conjunction
with "About Forward-Looking Information" in this earnings release,
including the material assumptions underlying it, and in our 2021
Annual MD&A and the related disclosure and information about
various economic, competitive, legal, and regulatory assumptions,
factors, and risks that may cause our actual future financial and
operating results to differ from what we currently expect.
Quarterly Financial Highlights
RevenueTotal revenue and total
service revenue increased by 4% and 6%, respectively, this quarter,
driven by revenue growth in our Wireless and Media businesses.
Wireless service revenue increased by 7% this
quarter, mainly as a result of higher roaming revenue associated
with significantly increased travel as COVID-19-related global
travel restrictions were less strict than last year, and a larger
postpaid mobile phone subscriber base. Wireless equipment revenue
decreased by 10%, as a result of fewer device upgrades by existing
subscribers and fewer of our new subscribers purchasing
devices.
Cable service revenue increased by 1% this
quarter, primarily as a result of service pricing changes this
quarter and the increases in our Internet and Video subscriber
bases, partially offset by declines in our Home Phone and Smart
Home Monitoring subscriber bases.
Media revenue increased by 10% this quarter,
primarily as a result of higher sports-related revenue, partially
offset by lower Today's Shopping Choice™ revenue.
Adjusted EBITDA and
marginsConsolidated adjusted EBITDA increased 11% this
quarter and our adjusted EBITDA margin increased by 260 basis
points primarily due to increases in Wireless and Cable adjusted
EBITDA.
Wireless adjusted EBITDA increased by 7%,
primarily as a result of the flow-through of revenue growth. This
gave rise to an adjusted EBITDA service margin of 63.0%.
Cable adjusted EBITDA increased by 13%,
primarily as a result of cost efficiencies, including lower content
and people related costs. This gave rise to an adjusted EBITDA
margin of 53.2%.
Media adjusted EBITDA decreased by $7 million
this quarter, primarily due to higher programming, production, and
other operating costs as a result of increased activities as
COVID-19 restrictions eased, and the timing of player salaries
pertaining to Toronto Blue Jays™ player trades, partially offset by
higher revenue as discussed above.
Net income and adjusted net
incomeNet income and adjusted net income increased this
quarter by 9% and 17%, respectively, primarily as a result of
higher adjusted EBITDA.
Cash flow and available
liquidityThis quarter, we generated cash flow from
operating activities of $813 million, up 20%, as a result of higher
adjusted EBITDA with the impact of lower income taxes paid largely
offset by a higher investment in net operating assets. We also
generated free cash flow of $515 million, up 31%, primarily as a
result of higher adjusted EBITDA and lower cash income taxes.
This quarter, we issued $13.3 billion senior
notes (US$7.05 billion and $4.25 billion) with a weighted average
interest rate and term to maturity of 4.21% and 13.9 years,
respectively. We also issued US$750 million subordinated notes due
2082 with a coupon of 5.25% for the first five years. See "Managing
our Liquidity and Financial Resources" in our Q1 2022 MD&A for
more information. Our debt leverage ratio3 was 3.3 as at March 31,
2022, down from 3.4 as at December 31, 2021.
As at March 31, 2022, we had $3.9 billion
of available liquidity3 (December 31, 2021 - $4.2 billion),
including $0.8 billion in cash and cash equivalents and a combined
$3.1 billion available under our bank credit facilities. We also
held $13.1 billion in restricted cash and cash equivalents that
will be used to partially fund the cash consideration of the
Transaction (see "Managing our Liquidity and Financial Resources"
in our Q1 2022 MD&A).
We also returned $252 million in dividends to
shareholders this quarter and we declared a $0.50 per share
dividend on April 19, 2022.
______________________________
3 Debt leverage ratio and available liquidity
are capital management measures. See "Non-GAAP and Other Financial
Measures" and "Financial Condition" in our Q1 2022 MD&A for
more information about these measures, available at
www.sedar.com.
Shaw Transaction
On March 15, 2021, we announced an agreement
with 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 RCI Class B
Non-Voting common 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 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). The Transaction is subject to other customary
closing conditions, including receipt of applicable approvals and
expiry of certain waiting periods under the Competition Act
(Canada) and the Radiocommunication Act (Canada) (collectively, Key
Regulatory Approvals). Subject to receipt of all required approvals
and satisfaction of other conditions prior to closing, the
Transaction is expected to close in the second quarter of 2022.
Rogers has extended the outside date for closing the Transaction
from March 15, 2022 to June 13, 2022 in accordance with the terms
of the arrangement agreement.
In connection with the Transaction, we entered
into a binding commitment letter for a committed credit facility
with a syndicate of banks in an original amount up to $19 billion.
During the second quarter of 2021, we entered into a $6 billion
non-revolving credit facility (Shaw term loan facility), which
reduced the amount available under the committed credit facility to
$13 billion. This quarter, we issued US$7.05 billion and $4.25
billion senior notes, which reduced the amount available under the
committed credit facility to nil and the facility was terminated.
The arrangement agreement between Rogers and Shaw requires us to
maintain sufficient liquidity to ensure we are able to fund the
Transaction upon closing and, as a result of the termination of the
committed credit facility, we have restricted $13,131 million in
funds, which are recognized as "restricted cash and cash
equivalents" on our first quarter interim condensed consolidated
statement of financial position. These funds have been invested in
short-term, highly liquid investments such as bank term deposits
and Canadian federal and provincial government bonds and are
readily convertible to cash. These notes (except the $1.25 billion
senior notes due 2025) also contain a "special mandatory
redemption" clause, which requires them to be redeemed at 101% of
face value if the Transaction cannot be consummated by December 31,
2022. See "Managing our Liquidity and Financial Resources" in our
Q1 2022 MD&A for more information on the committed facility and
our restricted cash and cash equivalents balance.
We also expect that RCI will either assume
Shaw's senior notes or provide a guarantee of Shaw's payment
obligations under those senior notes upon closing the Transaction
and, in either case, Rogers Communications Canada Inc. (RCCI) will
guarantee Shaw's payment obligations under those senior notes.
On March 24, 2022, the CRTC approved our
acquisition of Shaw's broadcasting services, subject to a number of
conditions and modifications that are detailed in "Regulatory
Developments". The CRTC approval only relates to the broadcasting
elements of the Transaction. The Transaction continues to be
reviewed by the Competition Bureau and Innovation, Science and
Economic Development Canada (ISED Canada).
About Rogers
Rogers is a leading Canadian technology and
media company that provides world-class communications services and
entertainment to consumers and businesses on our award-winning
networks. Our founder, Ted Rogers, purchased his first radio
station, CHFI, in 1960. Today, we are dedicated to providing
industry-leading wireless, cable, sports, and media to millions of
customers across Canada. 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 |
Chloe Luciani-Girouard |
647.435.6470 |
647.241.3946 |
paul.carpino@rci.rogers.com |
chloe.luciani@rci.rogers.com |
Quarterly Investment Community
Teleconference
Our first quarter 2022 results teleconference
with the investment community will be held on:
- April 20, 2022
- 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, environmental, social,
and governance (ESG) 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, 2022, as well as forward-looking
information about future periods. This earnings release should be
read in conjunction with our First Quarter 2022 Interim Condensed
Consolidated Financial Statements (First Quarter 2022 Interim
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 2021 Annual MD&A; our 2021 Annual
Audited Consolidated Financial Statements and notes thereto, which
have been prepared in accordance with 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.
Effective January 1, 2022, we have changed the
way in which we report certain subscriber metrics in both our
Wireless and Cable segments. Commencing this quarter, we will begin
presenting postpaid mobile phone subscribers, prepaid mobile phone
subscribers, and mobile phone ARPU in our Wireless segment. We will
also no longer report blended average billings per unit (ABPU). In
Cable, we will begin presenting retail Internet, Video (formerly
Television), Smart Home Monitoring, and Home Phone subscribers.
These changes are a result of shifts in the ways in which we manage
our business, including the significant adoption of our wireless
device financing program, and to better align with industry
practices. See "Results of our Reportable Segments" and "Key
Performance Indicators" for more information. We have
retrospectively amended our 2021 comparative segment results to
account for this redefinition.
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 2021 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 19, 2022 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, 2022, unless the context indicates otherwise. All
results commentary is compared to the equivalent period in 2021 or
as at December 31, 2021, 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. ©2022 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
and other video (Video), telephony (Home 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, 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) |
|
2022 |
|
|
|
2021 |
|
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless |
|
2,140 |
|
|
|
2,074 |
|
|
|
3 |
|
|
Cable |
|
1,036 |
|
|
|
1,020 |
|
|
|
2 |
|
|
Media |
|
482 |
|
|
|
440 |
|
|
|
10 |
|
|
Corporate items and intercompany eliminations |
|
(39 |
) |
|
|
(46 |
) |
|
|
(15 |
) |
|
Revenue |
|
3,619 |
|
|
|
3,488 |
|
|
|
4 |
|
|
Total service revenue 1 |
|
3,196 |
|
|
|
3,021 |
|
|
|
6 |
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
Wireless |
|
1,085 |
|
|
|
1,013 |
|
|
|
7 |
|
|
Cable |
|
551 |
|
|
|
487 |
|
|
|
13 |
|
|
Media |
|
(66 |
) |
|
|
(59 |
) |
|
|
12 |
|
|
Corporate items and intercompany eliminations |
|
(31 |
) |
|
|
(50 |
) |
|
|
(38 |
) |
|
Adjusted EBITDA |
|
1,539 |
|
|
|
1,391 |
|
|
|
11 |
|
|
Adjusted EBITDA margin 2 |
|
42.5 |
|
% |
|
39.9 |
|
% |
|
2.6 |
|
pts |
|
|
|
|
Net income |
|
392 |
|
|
|
361 |
|
|
|
9 |
|
|
Basic earnings per share |
|
$0.78 |
|
|
|
$0.71 |
|
|
|
10 |
|
|
Diluted earnings per share |
|
$0.77 |
|
|
|
$0.70 |
|
|
|
10 |
|
|
|
|
|
|
Adjusted net income |
|
462 |
|
|
|
394 |
|
|
|
17 |
|
|
Adjusted basic earnings per share 2 |
|
$0.91 |
|
|
|
$0.78 |
|
|
|
17 |
|
|
Adjusted diluted earnings per share |
|
$0.91 |
|
|
|
$0.77 |
|
|
|
18 |
|
|
|
|
|
|
Capital expenditures |
|
649 |
|
|
|
484 |
|
|
|
34 |
|
|
Cash provided by operating activities |
|
813 |
|
|
|
679 |
|
|
|
20 |
|
|
Free cash flow |
|
515 |
|
|
|
394 |
|
|
|
31 |
|
|
1 As defined. See "Key Performance
Indicators". 2 Adjusted EBITDA margin is a supplementary
financial measure. Adjusted basic earnings per share is a non-GAAP
ratio. Adjusted net income is a non-GAAP financial measure and is a
component of adjusted basic earnings per share. These are not
standardized financial measures under IFRS and might not be
comparable to similar financial measures disclosed by other
companies. See "Non-GAAP and Other Financial Measures" in our Q1
2022 MD&A for more information about each of these measures,
available at www.sedar.com.
Results of our Reportable Segments
WIRELESS
Wireless Financial Results
|
Three months ended March 31 |
|
|
(In millions of dollars, except margins) |
2022 |
|
|
2021 |
|
|
% Chg |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
Service revenue |
1,723 |
|
|
1,609 |
|
|
7 |
|
|
Equipment revenue |
417 |
|
|
465 |
|
|
(10 |
) |
|
Revenue |
2,140 |
|
|
2,074 |
|
|
3 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
Cost of equipment |
426 |
|
|
466 |
|
|
(9 |
) |
|
Other operating expenses |
629 |
|
|
595 |
|
|
6 |
|
|
Operating expenses |
1,055 |
|
|
1,061 |
|
|
(1 |
) |
|
|
|
|
|
|
|
Adjusted EBITDA |
1,085 |
|
|
1,013 |
|
|
7 |
|
|
|
|
|
|
|
|
Adjusted EBITDA service margin 1 |
63.0 |
|
% |
63.0 |
|
% |
— |
|
pts |
Adjusted EBITDA margin 2 |
50.7 |
|
% |
48.8 |
|
% |
1.9 |
|
pts |
Capital expenditures |
337 |
|
|
225 |
|
|
50 |
|
|
1 Calculated using service
revenue.2 Calculated using total revenue.
Wireless Subscriber Results 1
|
Three months ended March 31 |
|
|
(In thousands, except churn and mobile phone ARPU) |
2022 |
|
|
2021 |
|
|
Chg |
|
|
|
|
|
|
|
|
Postpaid mobile phone |
|
|
|
|
|
Gross additions |
254 |
|
|
231 |
|
|
23 |
|
|
Net additions |
66 |
|
|
22 |
|
|
44 |
|
|
Total postpaid mobile phone subscribers 2 |
8,913 |
|
|
8,466 |
|
|
447 |
|
|
Churn (monthly) |
0.71 |
|
% |
0.83 |
|
% |
(0.12 |
|
pts) |
Prepaid mobile phone |
|
|
|
|
|
Gross additions |
151 |
|
|
106 |
|
|
45 |
|
|
Net losses |
(16 |
) |
|
(56 |
) |
|
40 |
|
|
Total prepaid mobile phone subscribers 2 |
1,150 |
|
|
1,204 |
|
|
(54 |
) |
|
Churn (monthly) |
4.82 |
|
% |
4.36 |
|
% |
0.46 |
|
pts |
Mobile phone ARPU (monthly) |
$57.25 |
|
|
$55.42 |
|
|
$1.83 |
|
|
1 Subscriber counts and subscriber churn
are key performance indicators. See "Key Performance
Indicators".2 As at end of period.
Service revenueThe 7% increase
in service revenue this quarter was primarily a result of:
- higher roaming revenue associated
with significantly increased travel as COVID-19-related global
travel restrictions were less strict than last year; and
- a larger postpaid mobile phone
subscriber base.
The 3% increase in mobile phone ARPU this
quarter was a result of the increased roaming revenue.
The increase in postpaid gross additions and the
higher postpaid net additions this quarter were a result of strong
execution and an increase in market activity by Canadians with the
continuing improvement of the economy.
Equipment revenueThe 10%
decrease in equipment revenue this quarter was a result of:
- fewer device upgrades by existing
customers; and
- fewer of our new subscribers
purchasing devices.
Operating expensesCost of
equipmentThe 9% decrease in the cost of equipment this quarter was
a result of the same factors discussed in equipment revenue
above.
Other operating expensesThe 6% increase in other
operating expenses this quarter was primarily a result of higher
costs associated with the increased roaming revenue.
Adjusted EBITDAThe 7% increase
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) |
2022 |
|
|
2021 |
|
|
% Chg |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
Service revenue |
1,030 |
|
|
1,018 |
|
|
1 |
|
|
Equipment revenue |
6 |
|
|
2 |
|
|
200 |
|
|
Revenue |
1,036 |
|
|
1,020 |
|
|
2 |
|
|
|
|
|
|
|
|
Operating expenses |
485 |
|
|
533 |
|
|
(9 |
) |
|
|
|
|
|
|
|
Adjusted EBITDA |
551 |
|
|
487 |
|
|
13 |
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
53.2 |
|
% |
47.7 |
|
% |
5.5 |
|
pts |
Capital expenditures |
256 |
|
|
212 |
|
|
21 |
|
|
Cable Subscriber Results 1
|
Three months ended March 31 |
|
|
(In thousands, except ARPA and penetration) |
2022 |
|
|
2021 |
|
|
Chg |
|
|
|
|
|
|
|
|
|
|
|
|
Homes passed 2 |
4,728 |
|
|
4,599 |
|
|
129 |
|
|
Customer relationships |
|
|
|
Net additions |
5 |
|
|
6 |
|
|
(1 |
) |
|
Total customer relationships 2,3 |
2,589 |
|
|
2,536 |
|
|
53 |
|
|
ARPA (monthly) 4 |
$132.87 |
|
|
$133.95 |
|
|
($1.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
Penetration 2 |
54.8 |
|
% |
55.1 |
|
% |
(0.3 |
|
pts) |
|
|
|
|
Retail Internet |
|
|
|
Net additions |
13 |
|
|
16 |
|
|
(3 |
) |
|
Total retail Internet subscribers 2,3 |
2,245 |
|
|
2,156 |
|
|
89 |
|
|
Video |
|
|
|
Net additions (losses) |
14 |
|
|
(12 |
) |
|
26 |
|
|
Total Video subscribers 2,3 |
1,507 |
|
|
1,481 |
|
|
26 |
|
|
Smart Home Monitoring |
|
|
|
Net losses |
(4 |
) |
|
(3 |
) |
|
(1 |
) |
|
Total Smart Home Monitoring subscribers 2 |
109 |
|
|
128 |
|
|
(19 |
) |
|
Home Phone |
|
|
|
Net losses |
(22 |
) |
|
(29 |
) |
|
7 |
|
|
Total Home Phone subscribers 2,3 |
890 |
|
|
967 |
|
|
(77 |
) |
|
1 Subscriber results are key performance
indicators. See "Key Performance Indicators".2 As at end of
period.3 On March 16, 2022, we acquired approximately 3,000
retail Internet subscribers, 2,000 Video subscribers, 1,000 Home
Phone subscribers, and 3,000 customer relationships as a result of
our acquisition of a small regional cable company in Nova Scotia,
which are not included in net additions, but do appear in the
ending total balance for March 31, 2022.4 ARPA is a
supplementary financial measure. See "Non-GAAP and Other Financial
Measures" in our Q1 2022 MD&A for an explanation as to the
composition of this measure, available at www.sedar.com.
Service revenueThe 1% increase
in service revenue was a result of:
- service pricing changes this
quarter; and
- the increase in total customer
relationships over the past year, due to growth in our Internet and
Video subscriber bases; partially offset by
- declines in our Home Phone and
Smart Home Monitoring subscriber bases.
The 1% decrease in ARPA was primarily a result
of an increase in our customer relationships on lower monthly price
plans.
Operating expensesThe 9%
decrease in operating expenses this quarter was primarily a result
of cost efficiencies, including lower content-related costs,
partially due to negotiation of certain content rates with
suppliers, and lower people-related costs.
Adjusted EBITDAThe 13% 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) |
2022 |
|
|
2021 |
|
|
% Chg |
|
|
|
|
|
|
|
|
Revenue |
482 |
|
|
440 |
|
|
10 |
|
|
Operating expenses |
548 |
|
|
499 |
|
|
10 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
(66 |
) |
|
(59 |
) |
|
12 |
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
(13.7 |
) |
% |
(13.4 |
) |
% |
(0.3 |
|
pts) |
Capital expenditures |
22 |
|
|
18 |
|
|
22 |
|
|
RevenueThe 10% increase in
revenue this quarter was a result of:
- higher sports-related revenues,
including negotiation of certain content rates; partially offset
by
- lower Today's Shopping Choice revenue.
Operating expensesThe 10%
increase in operating expenses this quarter was a result of:
- higher programming costs;
- higher production costs and other
general operating costs as a result of increased activities as
COVID-19 restrictions eased; and
- the timing of player salaries
pertaining to Toronto Blue Jays player trades.
Adjusted EBITDAThe decrease 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) |
2022 |
|
|
2021 |
|
|
% Chg |
|
|
|
|
|
|
|
|
Wireless |
337 |
|
|
225 |
|
|
50 |
|
|
Cable |
256 |
|
|
212 |
|
|
21 |
|
|
Media |
22 |
|
|
18 |
|
|
22 |
|
|
Corporate |
34 |
|
|
29 |
|
|
17 |
|
|
|
|
|
|
|
|
Capital expenditures 1 |
649 |
|
|
484 |
|
|
34 |
|
|
|
|
|
|
|
|
Capital intensity 2 |
17.9 |
|
% |
13.9 |
|
% |
4.0 |
|
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 Capital intensity is a supplementary financial
measure. See "Non-GAAP and Other Financial Measures" in our Q1 2022
MD&A for an explanation as to the composition of this measure,
available at www.sedar.com.
One of our focus areas for the year is to
deliver world-class connectivity to Canadian consumers and
businesses. To do this, we expect to spend more on our wireless and
wireline networks this year than we have in the past several years.
This year, we will continue to roll out our 5G network, the largest
and most reliable 5G network in Canada, across the country. We will
also continue to invest in fibre deployments, including
fibre-to-the-home (FTTH), in our cable network and we will expand
our network footprint to reach more homes and businesses.
These investments will help us bridge the
digital divide and expand our network to underserved areas through
participation in various programs and projects. To connect these
underserved areas, we are deploying unified access transport
technology, which allows wireline and wireless networks to converge
over a unified Internet protocol and optical transport network.
WirelessThe increase in capital
expenditures in Wireless this quarter was a result of investments
made to upgrade our wireless network to continue to deliver
reliable performance for our customers. We continued to emphasize
our 5G deployments in the 600 MHz band, and preparing our network
to deploy the newly acquired 3500 MHz spectrum licences later this
year, as we have deployed our 5G network in more than 1,500
communities and we launched the first commercial 5G standalone
network in Canada.
CableThe increase in capital
expenditures in Cable this quarter reflects continued investments
in our network infrastructure, including additional fibre
deployments to increase our FTTH 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, including service footprint expansion and upgrades to our
DOCSIS 3.1 platform to evolve to DOCSIS 4.0, to offer increased
download speeds over time.
Capital intensityCapital
intensity increased this quarter as a result of higher capital
expenditures, partially offset by higher revenue, as discussed
above.
Regulatory Developments
See our 2021 Annual MD&A for a discussion of
the significant regulations that affected our operations as at
March 3, 2022. The following are the significant regulatory
developments since that date.
CRTC review of the
TransactionOn March 24, 2022, the CRTC approved our
acquisition of Shaw's broadcasting services, subject to a number of
conditions and modifications, including:
- the contribution of $27.2 million
in benefits to the broadcasting system through various initiatives
and funds, including those that support the production of content
by Indigenous producers and members of equity-seeking groups;
- annual reporting on our commitments
to increase our support for local news, including by employing more
journalists at our Citytv™ stations across the country and by
producing an additional 48 news specials each year that reflect
local communities;
- the distribution of at least 45
independent English- and French-language services on each of our
cable and satellite services; and
- safeguards to ensure that cable
providers relying on signals delivered by us will continue to be
able to serve their communities, including those in rural and
remote areas.
The CRTC approval only relates to the
broadcasting elements of the Transaction. The Transaction continues
to be reviewed by the Competition Bureau and ISED Canada.
Key Performance Indicators
We measure the success of our strategy using a
number of key performance indicators that are defined and discussed
in our 2021 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, some of which are non-GAAP or other financial measures
(see "Non-GAAP and Other Financial Measures" in our Q1 2022
MD&A), are not measurements in accordance with IFRS. They
include:
• |
subscriber counts; |
|
• |
Cable average revenue per account (ARPA); |
|
• |
Wireless; |
|
• |
Cable customer relationships; |
|
• |
Cable; and |
|
• |
Cable market penetration (penetration); |
|
• |
homes passed (Cable); |
|
• |
capital intensity; and |
• |
Wireless subscriber churn (churn); |
|
• |
total service revenue. |
• |
Wireless mobile phone average revenue per user (ARPU); |
|
|
|
Commencing this quarter, we are disclosing
mobile phone subscribers in Wireless, which represent devices with
voice-only or voice-and-data plans. Our previous definition
included devices on data-only plans and customers who subscribe to
our wireless home phone service. As a result, our definition of
ARPU has also shifted to mobile phone ARPU. We also no longer
report blended ABPU given the significant adoption of our wireless
device financing program resulting in this metric being less
meaningful.
In Cable, we have adjusted our definition of an
Internet subscriber such that it only includes retail Internet
subscribers, representing customers who have Internet service
installed and operating, and are being billed directly by us. Our
previous definition included third-party Internet access
subscribers and Smart Home Monitoring subscribers. We will also
begin reporting Video (consisting of Ignite TV and legacy
Television subscribers), Smart Home Monitoring, and Home Phone
subscribers in separate categories. Our updated definitions are as
follows:
Subscriber countsSubscriber
count (Wireless)
- A wireless subscriber is
represented by each identifiable telephone number.
- We report wireless subscribers in
two categories: postpaid mobile phone and prepaid mobile phone.
Postpaid and prepaid include voice-only subscribers and subscribers
with service plans including both voice and data.
- Usage and overage charges for
postpaid subscribers are billed a month in arrears. Prepaid
subscribers cannot incur usage and/or overage charges in excess of
their plan limits or account balance.
- Wireless prepaid subscribers are
considered active for a period of 90 days from the date of their
last revenue-generating usage.
Subscriber count (Cable)
- Cable retail Internet, Video, and
Smart Home Monitoring subscribers are represented by a dwelling
unit; Cable Home Phone subscribers are represented by line
counts.
- When there is more than one unit in
a single dwelling, such as an apartment building, each tenant with
cable service is counted as an individual subscriber, whether the
service is invoiced separately or included in the tenant's rent.
Institutional units, such as hospitals or hotels, are each
considered one subscriber.
- Cable retail Internet, Video, Smart
Home Monitoring, and Home Phone subscribers include only those
subscribers who have service installed and operating, and who are
being billed accordingly.
- Subscriber counts exclude certain
business services delivered over our fibre network and data centre
infrastructure, and circuit-switched local and long distance voice
services and legacy data services where access is delivered using
leased third-party network elements and tariffed ILEC
services.
Mobile phone average revenue per user
(Wireless) Mobile phone ARPU helps us identify trends and
measure our success in attracting and retaining higher-value
subscribers. Mobile phone ARPU is a supplementary financial
measure. See "Non-GAAP and Other Financial Measures" in our Q1 2022
MD&A for an explanation as to the composition of this
measure.
Non-GAAP and Other Financial Measures
Reconciliation of adjusted EBITDA
|
Three months ended March 31 |
|
(In millions of dollars) |
2022 |
|
2021 |
|
|
|
|
|
Net income |
392 |
|
361 |
|
Add: |
|
|
|
Income tax expense |
153 |
|
128 |
|
Finance costs |
258 |
|
218 |
|
Depreciation and amortization |
646 |
|
638 |
|
EBITDA |
1,449 |
|
1,345 |
|
Add (deduct): |
|
|
|
Other (income) expense |
(6 |
) |
1 |
|
Restructuring, acquisition and other |
96 |
|
45 |
|
|
|
|
|
Adjusted EBITDA |
1,539 |
|
1,391 |
|
Reconciliation of adjusted net income
|
Three months ended March 31 |
|
(In millions of dollars) |
2022 |
|
2021 |
|
|
|
|
Net income |
392 |
|
361 |
|
Add (deduct): |
|
|
Restructuring, acquisition and other |
96 |
|
45 |
|
Income tax impact of above items |
(26 |
) |
(12 |
) |
|
|
|
Adjusted net income |
462 |
|
394 |
|
Rogers Communications Inc.Interim
Condensed Consolidated Statements of Income(In millions of
Canadian dollars, except per share amounts, unaudited)
|
Three months ended March 31 |
|
|
2022 |
|
2021 |
|
|
|
|
Revenue |
3,619 |
|
3,488 |
|
|
|
|
Operating expenses: |
|
|
Operating costs |
2,080 |
|
2,097 |
|
Depreciation and amortization |
646 |
|
638 |
|
Restructuring, acquisition and other |
96 |
|
45 |
|
Finance costs |
258 |
|
218 |
|
Other (income) expense |
(6 |
) |
1 |
|
|
|
|
Income before income tax expense |
545 |
|
489 |
|
Income tax expense |
153 |
|
128 |
|
|
|
|
Net income for the period |
392 |
|
361 |
|
|
|
|
Earnings per share: |
|
|
Basic |
$0.78 |
|
$0.71 |
|
Diluted |
$0.77 |
|
$0.70 |
|
Rogers Communications Inc.Interim
Condensed Consolidated Statements of Financial Position(In
millions of Canadian dollars, unaudited)
|
As atMarch 31 |
|
As atDecember 31 |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
809 |
|
715 |
|
Restricted cash and cash equivalents |
13,131 |
|
— |
|
Accounts receivable |
3,565 |
|
3,847 |
|
Inventories |
540 |
|
535 |
|
Current portion of contract assets |
112 |
|
115 |
|
Other current assets |
606 |
|
497 |
|
Current portion of derivative instruments |
222 |
|
120 |
|
Total current assets |
18,985 |
|
5,829 |
|
|
|
|
|
|
Property, plant and equipment |
14,790 |
|
14,666 |
|
Intangible assets |
12,275 |
|
12,281 |
|
Investments |
2,510 |
|
2,493 |
|
Derivative instruments |
1,293 |
|
1,431 |
|
Financing receivables |
771 |
|
854 |
|
Other long-term assets |
401 |
|
385 |
|
Goodwill |
4,025 |
|
4,024 |
|
|
|
|
|
|
Total assets |
55,050 |
|
41,963 |
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term borrowings |
2,695 |
|
2,200 |
|
Accounts payable and accrued liabilities |
2,782 |
|
3,416 |
|
Income tax payable |
186 |
|
115 |
|
Other current liabilities |
303 |
|
607 |
|
Contract liabilities |
406 |
|
394 |
|
Current portion of long-term debt |
1,225 |
|
1,551 |
|
Current portion of lease liabilities |
346 |
|
336 |
|
Total current liabilities |
7,943 |
|
8,619 |
|
|
|
|
|
|
Provisions |
51 |
|
50 |
|
Long-term debt |
30,195 |
|
17,137 |
|
Lease liabilities |
1,642 |
|
1,621 |
|
Other long-term liabilities |
676 |
|
565 |
|
Deferred tax liabilities |
3,430 |
|
3,439 |
|
Total liabilities |
43,937 |
|
31,431 |
|
|
|
|
|
|
Shareholders' equity |
11,113 |
|
10,532 |
|
|
|
|
|
|
Total liabilities and shareholders' equity |
55,050 |
|
41,963 |
|
Rogers Communications Inc.Interim
Condensed Consolidated Statements of Cash Flows(In
millions of Canadian dollars, unaudited)
|
Three months ended March 31 |
|
|
2022 |
|
2021 |
|
Operating activities: |
|
|
Net income for the period |
392 |
|
361 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
Depreciation and amortization |
646 |
|
638 |
|
Program rights amortization |
20 |
|
20 |
|
Finance costs |
258 |
|
218 |
|
Income tax expense |
153 |
|
128 |
|
Post-employment benefits contributions, net of expense |
6 |
|
16 |
|
Other |
13 |
|
26 |
|
Cash provided by operating activities before changes in net
operating assets and liabilities, income taxes paid, and interest
paid |
1,488 |
|
1,407 |
|
Change in net operating assets and liabilities |
(321 |
) |
(187 |
) |
Income taxes paid |
(140 |
) |
(325 |
) |
Interest paid |
(214 |
) |
(216 |
) |
|
|
|
Cash provided by operating activities |
813 |
|
679 |
|
|
|
|
Investing activities: |
|
|
Capital expenditures |
(649 |
) |
(484 |
) |
Additions to program rights |
(12 |
) |
(12 |
) |
Changes in non-cash working capital related to capital expenditures
and intangible assets |
(172 |
) |
(116 |
) |
Acquisitions and other strategic transactions, net of cash
acquired |
(9 |
) |
— |
|
Other |
12 |
|
(6 |
) |
|
|
|
Cash used in investing activities |
(830 |
) |
(618 |
) |
|
|
|
Financing activities: |
|
|
Net proceeds received from short-term borrowings |
503 |
|
22 |
|
Net issuance (repayment) of long-term debt |
13,311 |
|
(1,450 |
) |
Net payments on settlement of debt derivatives and forward
contracts |
(74 |
) |
(2 |
) |
Transaction costs incurred |
(169 |
) |
— |
|
Principal payments of lease liabilities |
(77 |
) |
(62 |
) |
Dividends paid |
(252 |
) |
(252 |
) |
|
|
|
Cash provided by (used in) financing activities |
13,242 |
|
(1,744 |
) |
|
|
|
Change in cash and cash equivalents and restricted cash and cash
equivalents |
13,225 |
|
(1,683 |
) |
Cash and cash equivalents and restricted cash and cash equivalents,
beginning of period |
715 |
|
2,484 |
|
|
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
end of period |
13,940 |
|
801 |
|
|
|
|
Cash and cash equivalents |
809 |
|
801 |
|
Restricted cash and cash equivalents |
13,131 |
|
— |
|
|
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
end of period |
13,940 |
|
801 |
|
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 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, 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;
- the benefits expected to result from the Transaction, including
corporate, operational, scale, and other synergies, and their
anticipated timing; and
- all other statements that are not historical facts.
|
Specific forward-looking information included or
incorporated in this document includes, but is not limited to, our
information and statements under "Financial Guidance" relating to
our 2022 consolidated guidance on total service revenue, adjusted
EBITDA, capital expenditures, and free cash flow, which were
originally provided on January 27, 2022.
Key underlying assumptionsOur 2022 guidance
ranges presented in "Financial Guidance" are based on many
assumptions including, but not limited to, the following material
assumptions for the full-year 2022:
- a steady improvement in the general
COVID-19 environment throughout 2022, including:
- the continued reopening of the
economy, including increasing immigration and the return of foreign
students;
- no further significant
restrictions, such as border closures, travel restrictions,
capacity restrictions, sports venue closures, or stay-at-home
orders; and
- no material negative impact
resulting from global supply chain interruptions;
- continued competitive intensity in
all segments in which we operate consistent with levels experienced
in 2021;
- no significant additional legal or
regulatory developments, other shifts in economic conditions, or
macro changes in the competitive environment affecting our business
activities;
- Wireless customers continue to
adopt, and upgrade to, higher-value smartphones at similar rates in
2022 compared to 2021;
- overall wireless market penetration
in Canada grows in 2022 at a similar rate as in 2021;
- continued subscriber growth in
Internet;
- declining Video subscribers,
including the impact of customers migrating to Ignite TV from our
legacy product, as subscription streaming services and other
over-the-top providers continue to grow in popularity;
- in Media, continued growth in
sports and relative stability in other traditional media
businesses;
- with respect to the increase in
capital expenditures:
- we continue to invest to ensure we
have competitive wireless and cable networks through (i) expanding
our 5G wireless network, including building on Canada's first
standalone 5G core network and using our 3500 MHz spectrum licences
to introduce new 5G innovation and services and (ii) upgrading our
hybrid fibre-coaxial network to lower the number of homes passed
per node, utilize the latest technologies, and deliver an even more
reliable customer experience; and
- we continue to make expenditures
related to our connected home roadmap in 2022 and we make progress
on our service footprint expansion projects;
- a substantial portion of our 2022
US dollar-denominated expenditures is hedged at an average exchange
rate of $1.29/US$;
- key interest rates remain
relatively stable throughout 2022; and
- we retain our investment-grade
credit ratings.
Our conclusions, forecasts, and projections are
based on a number of estimates, expectations, assumptions, and
other factors, including, 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 and network 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;
- sports-related work stoppages or cancellations and labour
disputes;
- 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, the effects of climate
change, 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 Q1 2022 MD&A; 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 section of this
earnings release entitled "Regulatory Developments" and fully
review the sections in our 2021 Annual MD&A entitled
"Regulation in our Industry" and "Environmental, Social, and
Governance (ESG)", 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.
Rogers Communications (NYSE:RCI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Rogers Communications (NYSE:RCI)
Historical Stock Chart
From Apr 2023 to Apr 2024