Accelerated Revenue Growth to 5% with Increases in
Wireless, Cable, and Media
Executed Planned Investments to Retain Wireless Customers
Before the Final Expiry of Three-Year Contracts This Summer,
Accelerating Migration to Rogers Share Everything Plans
Delivered Key Customer Programs: Introduced Rogers IGNITE,
Expanded Roam Like Home to Over 35 Countries, Extended Network
Coverage to Rural Areas, and Launched New Fido Plans with Spotify
and VICE
TORONTO,
April 20, 2015 /CNW/ - Rogers
Communications Inc., a leading diversified Canadian communications
and media company, today announced its unaudited consolidated
financial and operating results for the first quarter ended
March 31, 2015.
Financial Highlights |
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Three months ended March
31 |
(In millions of
Canadian dollars, except per share amounts, unaudited) |
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2015 |
2014 |
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Operating revenue |
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3,175 |
3,020 |
As adjusted 1: |
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Operating profit |
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1,124 |
1,161 |
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Net income |
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275 |
340 |
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Basic and diluted earnings per share |
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$ 0.53 |
$ 0.66 |
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Net income |
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255 |
307 |
Basic earnings per share |
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$ 0.50 |
$ 0.60 |
Diluted earnings per share |
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$ 0.48 |
$ 0.57 |
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Free cash flow 1 |
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266 |
356 |
Cash provided by operating
activities |
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227 |
408 |
1 |
|
Adjusted amounts and free cash flow are non-GAAP measures and
should not be considered as a
substitute or alternative for GAAP measures. They are not defined
terms under IFRS and do not have
standard meanings, so may not be a reliable way to compare us to
other companies. See "Non-GAAP
Measures" for information about these measures, including how we
calculate them. |
"We continued to see steady revenue growth this
quarter along with strong growth in Wireless ARPA," said
Guy Laurence, President and Chief
Executive Officer of Rogers. "We made planned strategic investments
to retain high-value customers ahead of the conclusion of the
industry-wide shift to two-year contracts this summer - our
underlying adjusted operating profit growth was otherwise solid. At
the same time, we moved full steam ahead with our Rogers 3.0
program by delivering a number of initiatives that are popular with
our customers. Our plan is gaining traction and we expect continued
improvements in our key financial and operating results as the year
progresses."
Key Financial Highlights
Higher operating revenue
- Consolidated revenue increased 5% this quarter, reflecting
revenue growth of 4% in Wireless, 1% in Cable, and 26% in Media,
with stable revenue in Business Solutions. Wireless revenue
increased as a result of both higher network revenue from the
continued movement of our base to LTE, the adoption of higher ARPU
and ARPA-generating Share Everything plans, as well as greater
smartphone sales. Cable revenue was relatively stable as continued
Internet revenue growth was offset by decreased revenue in
Television and Phone. Media revenue increased as a result of the
NHL licensing agreement and growth at Sportsnet, Radio, and Next
Issue Canada partially offset by continued softness in conventional
broadcast TV and print advertising.
- The implementation of a CRTC decision mandating that
telecommunications providers could no longer require customers to
provide a minimum of 30 days' notice to cancel services resulted in
a decrease of $3 million in Cable
revenue this quarter and an increase in Cable total service unit
losses of approximately 40,000 (which includes combined Internet,
Television, and Phone subscribers).
- Activated 700,000 wireless smartphones this quarter, of which
32% were new subscribers, with higher-value smartphone customers
representing 83% of Wireless postpaid subscribers as at
March 31, 2015.
Lower adjusted operating profit impacted by planned customer
investments
- The 3% decrease in consolidated adjusted operating profit this
quarter reflects decreases in Wireless of 3%, in Cable of 2%, and
in Media of 33% ($8 million), while
adjusted operating profit in Business Solutions was stable.
Wireless experienced higher costs associated with the increased
volume of subsidized smartphones sold primarily as a result of
proactively early-upgrading targeted subscribers in advance of the
conclusion of the industry-wide shift to two-year contracts this
summer, partially offset by higher network revenues. Cable results
were impacted by investments in programming, customer value
enhancements, and the CRTC cancellation notification policy change.
Media's results, during what is traditionally its softest quarter,
were impacted by the timing of programming and productions costs, a
large portion of which were seasonal in nature and related to
hockey.
- Consolidated adjusted operating profit margin decreased by 300
basis points to 35.4% this quarter with margins of 45.8% in
Wireless and 46.2% in Cable.
- The reductions of 19% in adjusted net income and 17% in net
income were mainly as a result of an 8% increase in depreciation
and amortization in addition to the 3% decrease in consolidated
adjusted operating profit.
Cash flow and available liquidity
- Generated $266 million of
consolidated free cash flow this quarter, representing a decrease
of 25%, primarily as a result of a timing-related increase in cash
income taxes paid and the lower adjusted operating profit. Cash
provided by operating activities was $227
million this quarter.
- Maintained approximately $2.4
billion of liquidity available under our bank credit
facilities as at March 31, 2015.
- Returned $235 million of cash to
shareholders through the payment of our quarterly cash dividend
which the Rogers Board of Directors increased by 5% to 48 cents per share earlier this quarter.
Strategic Highlights
Overhaul the customer experience
- Reduced the number of customer complaints by more than 20% over
the six months ended January 31, 2015
based on data collected for the Commissioner for Complaints for
Telecommunications Services' (CCTS) mid-year report released in
April 2015. This reduction is on top
of the more than 30% reduction over the preceding 12-month period
ended July 31, 2014 published in
CCTS's November 2014 annual report.
As part of our Rogers 3.0 plan, we are committed to putting our
customers first, and while our work is far from over, this report
shows our focus on customers is paying off and we're heading in the
right direction.
- Expanded Roam Like Home to over 35 European countries, further
simplifying how Wireless consumers use the Internet, make calls,
and send texts and emails with their Rogers Share Everything plan.
Customers access their identical Canadian plan features while in
Europe, all at a relatively low
cost.
- Introduced a new Wireless Hardware Upgrade Program where
customers now have the option to upgrade their wireless device
online.
- Released Rogers' 2014 Transparency Report, our second annual
report on how we share customer information in response to requests
from legal authorities.
- Unveiled a new look and feel, improved search and navigation
capabilities, and accelerated response times for our online
Community Forums. More customers want self-serve and our Community
Forums are one of many ways our customers will be able to get the
information they need quickly and easily.
- Put customers first in an agreement with the Competition Bureau
to issue credits or refunds to customers who were charged for
unwanted third-party premium text messaging services.
Deliver compelling content everywhere
- Introduced 'Fido Pulse' Wireless plans delivering more value
with a 24-month subscription to Spotify Premium, one of the world's
most innovative music streaming services, and original exclusive
DAILY VICE, an edgy, ground-breaking news app.
- Acquired exclusive Canadian English-language multimedia rights
for Sportsnet to the 2016 World Cup of Hockey including television,
online, and mobile rights for every game of the highly-anticipated
tournament.
- Reached an average audience of 2.64 million viewers for City's
televised presentation of the 57th Annual GRAMMY Awards, setting a
record as the most-watched program in the network's history.
- Added more titles and exclusive content to shomi including
agreements with DHX Media and Corus Entertainment. shomi added
popular kids' shows such as iCarly, Yo Gabba Gabba, and SpongeBob
SquarePants, as well as exclusive content through a deal with
Sony Pictures Television for the Golden Globe-winning show
Transparent and acclaimed series Outlander.
Focus on innovation and network
leadership
- Launched new Rogers IGNITE broadband Internet-based bundled
offerings with new usage options and value-added content, including
Rogers NHL GameCentre LIVE and shomi.
- Released independent testing research from SamKnows dated
February 2015 confirming that Rogers'
broadband Internet customers continue to enjoy fast and reliable
upload and download service, delivered at 100 percent or more on
average of advertised speeds, even during peak network hours.
- Rogers was the first in Canada
to launch Voice over LTE (VoLTE) technology giving customers across
the country access to higher-quality HD voice and video calls and
faster call setup and connection times and the ability to
simultaneously place calls, browse the web or stream video at
considerably greater LTE speeds.
- Extended wireless network coverage in even more rural markets
across Canada allowing customers
to stay connected in additional places, at no extra charge and with
no sign-up or opt-in requirements.
- Rogers' wireless network was the first in Canada to be Category 6 enabled, allowing
customers in select communities across Ontario and British
Columbia to enjoy faster download speeds and a higher
quality video experience on Category 6-enabled smartphones and
tablets.
- Extended Rogers Smart Home Monitoring services to residents in
Vancouver and the Lower Mainland,
British Columbia allowing them to
connect, protect, and manage what's happening at home using their
mobile devices or computers.
Drive growth in the business market
- Deployed the GSMA Embedded SIM Specification of the M2M World
Alliance, a global partnership of telecommunications providers.
This standard allows for remote wireless provisioning of
machine-to-machine (M2M) devices, significantly reducing the cost
and time for enabling globally connected devices.
Invest in and develop our people
- Selected as one of Canada's
Best Diversity Employers for 2015 in a report released by Mediacorp
Inc. in March 2015 for recognition of
our efforts to promote diversity and inclusion in the
workplace.
Be a strong Canadian growth company
- Appointed Dirk Woessner as
President, Consumer Business Unit effective April 6, 2015. Mr. Woessner was previously at
Deutsche Telekom where he held a number of senior leadership
positions in both wireless and broadband within the United Kingdom and Germany.
- Announced the internal appointment of Jamie Williams as our Chief Information Officer
effective May 4, 2015. Mr. Williams
brings a 20-year track record of transforming IT systems in complex
and challenging North American telecommunications
environments.
About non-GAAP measures
This earnings release contains non-GAAP measures such as adjusted
operating profit, adjusted operating profit margin, adjusted net
income, free cash flow, adjusted net debt, adjusted net debt to
adjusted operating profit, and adjusted basic and diluted earnings
per share. These are non-GAAP measures and should not be considered
as a substitute or alternative for GAAP measures. They are not
defined terms under International Financial Reporting Standards
(IFRS), and do not have standard meanings, so may not be a reliable
way to compare us to other companies. See "Non-GAAP Measures" for
information about these measures, including how we calculate
them.
This earnings release contains important
information about our business and our performance in the first
quarter of 2015 as well as forward-looking information about future
periods.
This earnings release should be read in
conjunction with our First Quarter 2015 MD&A, our First Quarter
2015 Interim Condensed Consolidated Financial Statements and Notes,
which have been prepared in accordance with International
Accounting Standard 34, Interim Financial Reporting, as issued by
the International Accounting Standards Board (IASB), our 2014
Annual MD&A, our 2014 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, 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, and our overarching strategy, see "Understanding Our
Business", "Our Strategy", and "Capability to Deliver Results" in
our 2014 Annual MD&A. For our key performance drivers and
objectives, see "Key Performance Drivers and Highlights" in our
2014 Annual MD&A and the section "Key Highlights" in this
earnings release for our first quarter 2015 key achievements.
All dollar amounts are in Canadian dollars
unless otherwise stated. All percentage changes are calculated
using the rounded numbers as they appear in the tables. This
earnings release is current as at April 20,
2015 and was approved by the Audit Committee of our Board of
Directors on that date. This earnings release includes
forward-looking statements and assumptions. See "About
Forward-Looking Information" for more information.
We, us, our, Rogers, Rogers
Communications, and the Company refer to Rogers
Communications Inc. and its subsidiaries. RCI refers to the
legal entity Rogers Communications Inc., not including its
subsidiaries. RCI also holds interests in various investments and
ventures.
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
refers to the three months ended March 31,
2015. All results commentary is compared to the equivalent
periods in 2014 or as at December 31,
2014, as applicable, unless otherwise indicated.
Summary of Consolidated Financial
Results |
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Three months ended March 31 |
(In millions of
dollars, except margins and per share amounts) |
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2015 |
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2014 |
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% Chg |
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Operating revenue |
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Wireless |
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1,794 |
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1,727 |
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4 |
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Cable |
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870 |
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860 |
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1 |
|
Business Solutions |
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94 |
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|
94 |
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- |
|
Media |
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|
464 |
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367 |
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|
26 |
|
Corporate items and intercompany eliminations |
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(47) |
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(28) |
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68 |
Operating revenue |
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3,175 |
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3,020 |
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5 |
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Adjusted operating profit (loss) |
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Wireless |
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765 |
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790 |
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(3) |
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Cable |
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402 |
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409 |
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(2) |
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Business Solutions |
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28 |
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28 |
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- |
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Media |
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(32) |
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(24) |
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(33) |
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Corporate items and intercompany eliminations |
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(39) |
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(42) |
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(7) |
Adjusted operating profit
1 |
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1,124 |
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1,161 |
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(3) |
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Adjusted operating profit margin
1 |
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35.4% |
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38.4% |
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(3.0 pts) |
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Net income |
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255 |
|
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307 |
|
|
(17) |
Diluted earnings per share |
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$ 0.48 |
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$ 0.57 |
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(16) |
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Adjusted net income 1 |
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|
275 |
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|
340 |
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(19) |
Adjusted diluted earnings per share
1 |
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$ 0.53 |
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$ 0.66 |
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(20) |
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Additions to property, plant and
equipment |
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475 |
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488 |
|
|
(3) |
Free cash flow 1 |
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|
|
|
|
266 |
|
|
|
356 |
|
|
(25) |
Cash provided by operating
activities |
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|
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|
227 |
|
|
|
408 |
|
|
(44) |
1 |
|
Adjusted operating profit, adjusted operating profit margin,
adjusted net income, adjusted diluted
earnings per share, and free cash flow are non-GAAP measures and
should not be considered as
a substitute or alternative for GAAP measures. These are not
defined terms under IFRS and do
not have standard meanings, so may not be a reliable way to compare
us to other companies. See
"Non-GAAP Measures" for information about these measures, including
how we calculate them. |
KEY CHANGES IN FINANCIAL RESULTS THIS QUARTER
COMPARED TO 2014
Operating revenue
Wireless network revenue increased this quarter compared to the
same period last year primarily as a result of the continued
adoption of higher ARPU-generating simplified pricing plans, the
continued growth in usage of wireless data, and the ongoing
transition from three-year to two-year contracts, partially offset
by the continued decline in roaming revenue as a result of
lower-priced roaming plans.
Cable operating revenue increased this quarter
compared to the same period last year as a result of Internet
revenue growth and the impact and timing of pricing changes across
all product types, partially offset by TV subscriber losses over
the past year. The implementation of a CRTC decision mandating that
telecommunications providers could no longer require customers to
provide a minimum of 30 days' notice to cancel services resulted in
a decrease of $3 million in Cable
revenue this quarter and an increase in Cable total service unit
losses of approximately 40,000.
Business Solutions operating revenue was stable
this quarter compared to the same period last year as the continued
growth in on-net and next generation services, including our data
centre businesses, was offset by the continued planned reduction in
lower-margin, off-net legacy revenue.
Media operating revenue increased this quarter
compared to the same period last year as a result of revenue
generated by our National Hockey League (NHL) licensing agreement
and growth at Sportsnet, Radio, and Next Issue Canada, partially
offset by continued softness in conventional broadcast TV and print
advertising.
Adjusted operating profit
Wireless adjusted operating profit decreased this quarter compared
to the same period last year as a result of the higher volumes of
subsidized smartphones sold as a result of our initiative to
proactively early upgrade existing customers in the first half of
2015, prior to the final expiration of three-year contracts,
partially offset by the network revenue growth described above and
cost reductions.
Cable adjusted operating profit decreased this
quarter compared to the same period last year as a result of
investments in programming and customer value enhancements,
partially offset by the revenue changes discussed above.
Business Solutions adjusted operating profit was
stable this quarter as a result of the continued growth in on-net
and near-net next generation businesses and productivity
improvements, offset by the continued decline in the off-net legacy
business.
Media adjusted operating loss increased this
quarter compared to the same period last year as a result of higher
programming and production costs, a large portion of which were
seasonal in nature and related to hockey. See "Media Financial
Results" for more information on seasonality and the impact of
programming and production costs.
Results of our Business Segments |
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WIRELESS |
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Wireless Financial Results |
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Three months ended March 31 |
(In millions of dollars, except
margins) |
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2015 |
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|
2014 |
|
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% Chg |
|
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|
|
Operating revenue |
|
|
|
|
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Network revenue |
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|
1,672 |
|
|
|
1,636 |
|
|
2 |
|
Equipment sales |
|
|
|
|
|
122 |
|
|
|
91 |
|
|
34 |
Operating revenue |
|
|
|
|
|
1,794 |
|
|
|
1,727 |
|
|
4 |
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Operating expenses |
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Cost of equipment 1 |
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(393) |
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(297) |
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|
32 |
|
Other operating expenses |
|
|
|
|
|
(636) |
|
|
|
(640) |
|
|
(1) |
|
|
|
|
|
|
(1,029) |
|
|
|
(937) |
|
|
10 |
Adjusted operating profit |
|
|
|
|
|
765 |
|
|
|
790 |
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit margin as a % of network revenue |
|
|
|
|
|
45.8% |
|
|
|
48.3% |
|
|
(2.5 pts) |
Additions to property, plant and
equipment |
|
|
|
|
|
180 |
|
|
|
181 |
|
|
(1) |
1 Includes the cost of equipment sales and direct
channel subsidies. |
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|
Wireless Subscriber
Results 1 |
|
|
|
|
|
Three months ended March 31 |
(In
thousands, except churn, ARPA, and ARPU) |
2015 |
2014 |
Chg |
|
|
|
|
Postpaid 2 |
|
|
|
|
Gross additions |
277 |
293 |
(16) |
|
Net (losses) additions |
(26) |
2 |
(28) |
|
Total postpaid subscribers 3 |
8,139 |
8,076 |
63 |
|
Churn (monthly) |
1.24% |
1.20% |
0.04 pts |
|
ARPU (monthly) |
$66.21 |
$65.20 |
$1.01 |
|
ARPA (monthly) |
$107.47 |
$103.10 |
$4.37 |
Prepaid |
|
|
|
|
Gross additions |
126 |
76 |
50 |
|
Net (losses) |
(37) |
(73) |
36 |
|
Total prepaid subscribers 3 |
1,340 |
1,356 |
(16) |
|
Churn (monthly) |
3.99% |
3.55% |
0.44 pts |
Blended ARPU 2 |
$58.75 |
$57.63 |
$1.12 |
|
|
|
|
1
Subscriber counts, subscriber churn, ARPA, and ARPU are key
performance indicators. See "Key
Performance Indicators". |
2 Effective
January 1, 2015 and on a prospective basis, our Wireless postpaid
subscriber results
included Wireless Home Phone subscribers resulting in a base
adjustment of approximately 92,000
cumulative subscribers. Excluding the impact of the Wireless Home
Phone subscriber base
adjustment, postpaid ARPU would have increased by 2% or $1.61 and
blended ARPU would have
would have increased by 3% or $1.58 compared to the same period in
the prior year. |
3 As at end
of period. |
|
Network revenue
The 2% increase in network revenue this quarter was a result
of:
- continued adoption of the customer-friendly Rogers Share
Everything plans, which generate higher ARPU and ARPA and bundle in
certain calling features and long distance, grant the ability to
pool data usage with other devices on the same account, and entice
customers with access to our other products, such as Roam Like Home
and Rogers NHL GameCentre LIVE; partially offset by
- approximately 18% lower roaming revenue as a result of
lower-priced US and international roaming plans introduced for
customers in 2014, which simplify the customer experience and
should increase roaming usage.
A 4% increase in network revenue and postpaid
ARPU and a 6% increase in ARPA would have been realized this
quarter if roaming revenue was excluded from our calculation.
The 2% increase in postpaid ARPU was a result of
increased network revenue and wireless data usage. Commencing in
2015, we are disclosing ARPA as one of our key performance
indicators. See "Key Performance Indicators" for more information.
The 4% increase in postpaid ARPA was a result of the continued
adoption of Share Everything plans relative to the number of
subscriber accounts as customers are increasingly utilizing the
advantages of accessing their shareable plans with multiple devices
on the same account.
The increases in postpaid subscriber churn and
net losses and lower gross additions to our postpaid subscriber
base compared to the prior year were expected in the short-term as
a result of:
- our strategic focus on optimizing subscriber value;
- a focus on migrating existing customers to current pricing
plans; and
- adjustments to the required rate plans for subsidized premium
device eligibility.
We had fewer net subscriber losses this quarter
compared to the fourth quarter of 2014. The 4 basis point increase
in postpaid subscriber churn compared to the first quarter last
year improved from the 12 basis point increase in the fourth
quarter of 2014 compared to the fourth quarter of 2013.
We activated and upgraded approximately 700,000
smartphones for new and existing subscribers this quarter, a 21%
increase compared to approximately 579,000 in the same period last
year. This increase in smartphone activations was a result of:
- a greater number of hardware upgrades by existing subscribers;
partially offset by
- the reduction in postpaid gross additions.
The percentage of subscribers with smartphones
was 83% of our total postpaid subscriber base as at March 31, 2015. In our experience, smartphone
subscribers typically:
- generate significantly higher ARPU; and
- are less likely to churn than customers on less advanced
devices.
Equipment sales
The 34% increase in revenue from equipment sales this quarter
primarily reflects:
- the impact of more device upgrades by existing
subscribers;
- a shift in the sales mix to smartphones which included a higher
proportion of iPhone devices; and
- increased equipment sales prices; partially offset by
- fewer gross activations.
Operating expenses
The 32% increase in the cost of equipment sales this quarter was
primarily as a result of:
- a shift in the product mix towards higher-cost smartphones;
and
- increased equipment sales volumes as we proactively early
upgraded targeted subscribers in advance of the industry's "double
cohort" resulting in an increase of 18% more upgrades this quarter,
the majority of which were higher-cost smartphones including 44%
more iPhones.
The "double cohort" refers to the greater than
usual number of subscriber contracts coming to an end as both
three-year and two-year contracts expire near the same time. The
final expiration of remaining three-year contracts for consumers
will occur this summer.
Total customer retention spending (primarily
consisting of subsidies on handset upgrades) was 32% higher this
quarter with 18% more existing subscribers upgrading their hardware
combined with the shift in product mix described above.
Other operating expenses (excluding retention
spending) decreased this quarter as a result of improvements in
cost management and efficiency gains.
Adjusted operating profit
The 3% decrease in adjusted operating profit 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) |
|
|
|
|
|
2015 1 |
|
|
|
2014 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet |
|
|
|
|
|
324 |
|
|
|
305 |
|
|
6 |
Television |
|
|
|
|
|
426 |
|
|
|
431 |
|
|
(1) |
Phone |
|
|
|
|
|
118 |
|
|
|
121 |
|
|
(2) |
Service revenue |
|
|
|
|
|
868 |
|
|
|
857 |
|
|
1 |
Equipment sales |
|
|
|
|
|
2 |
|
|
|
3 |
|
|
(33) |
Operating revenue |
|
|
|
|
|
870 |
|
|
|
860 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of equipment |
|
|
|
|
|
(1) |
|
|
|
(2) |
|
|
(50) |
Other operating
expenses |
|
|
|
|
|
(467) |
|
|
|
(449) |
|
|
4 |
|
|
|
|
|
|
(468) |
|
|
|
(451) |
|
|
4 |
Adjusted operating profit |
|
|
|
|
|
402 |
|
|
|
409 |
|
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit margin |
|
|
|
|
|
46.2% |
|
|
|
47.6% |
|
|
(1.4 pts) |
Additions to property, plant and equipment |
|
|
|
|
|
224 |
|
|
|
251 |
|
|
(11) |
1
The operating results of Source Cable Ltd.
(Source Cable) are included in the
Cable results of operations from the date
of acquisition on November 4, 2014. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Subscriber Results 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31 |
(In thousands) |
|
|
|
|
|
2015 2 |
|
|
|
2014 |
|
|
Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (losses)
additions |
|
|
|
|
|
(7) |
|
|
|
20 |
|
|
(27) |
Total Internet subscribers
2,3 |
|
|
|
|
|
2,004 |
|
|
|
1,981 |
|
|
23 |
Television |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses |
|
|
|
|
|
(41) |
|
|
|
(20) |
|
|
(21) |
Total television
subscribers 2,3 |
|
|
|
|
|
1,983 |
|
|
|
2,107 |
|
|
(124) |
Phone |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (losses)
additions |
|
|
|
|
|
(20) |
|
|
|
10 |
|
|
(30) |
Total phone subscribers
2,3 |
|
|
|
|
|
1,130 |
|
|
|
1,163 |
|
|
(33) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable homes passed 2,3 |
|
|
|
|
|
4,085 |
|
|
|
3,990 |
|
|
95 |
Total service units 2,3,4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (losses)
additions |
|
|
|
|
|
(68) |
|
|
|
10 |
|
|
(78) |
Total service units
2,3 |
|
|
|
|
|
5,117 |
|
|
|
5,251 |
|
|
(134) |
1 |
|
Subscriber counts are key performance indicators. See "Key
Performance
Indicators". |
2 |
|
On November 4, 2014, we acquired approximately 16,000
high-speed Internet
subscribers, 16,000 Television subscribers and 11,000 Phone
subscribers
from our acquisition of Source Cable. The acquisition also
increased homes
passed by 26,000. |
3 |
|
As at end of period. |
4 |
|
Includes Internet, Television, and Phone subscribers. |
Operating revenue
The 1% increase in overall Cable revenue this quarter was primarily
a result of:
- a higher subscriber base for our Internet products combined
with the movement of customers to higher speed and usage
tiers;
- the impact and timing of pricing changes implemented over the
past year; partially offset by
- Television and Phone subscriber losses over the past year;
and
- Phone promotional discounting.
The implementation of a CRTC decision mandating
that, effective January 23, 2015,
telecommunications providers could no longer require customers to
provide a minimum of 30 days' notice to cancel services had the
effect of increasing the amount of Cable product subscriber
deactivations reported this quarter. The policy change effectively
resulted in an extra month of customer deactivations being counted
this quarter and a corresponding increase in the number of
subscriber losses of approximately 17,000 Television subscribers,
15,000 high-speed Internet subscribers, and 8,000 Phone
subscribers. This decreased Cable revenue by $3 million for the quarter.
Internet revenue
The 6% increase in Internet revenue this quarter was a result
of:
- general movement by customers to higher speed and usage
tiers;
- the impact and timing of changes in Internet service
pricing;
- a larger Internet subscriber base; partially offset by
- the effect of the CRTC cancellation notification policy
change.
The realization of Internet net losses in the
short-term was a result of our strategic focus towards optimizing
subscriber value versus subscriber volume as we migrate existing
customers to current price plans. There was also heightened
competition where cross-bundling of various wireline products
impacted our Internet subscribers. We believe that our new IGNITE
broadband Internet-based bundled offerings we introduced late in
the quarter will help our revenue metrics as these offerings give
the consumer better choice on usage and incorporate value-added
content.
Television revenue
The slight decrease in Television revenue this quarter was a result
of:
- the decline in Television subscribers over the past year mainly
associated with heightened pay TV competition;
- the effect of the CRTC cancellation notification policy change;
partially offset by
- the impact and timing of pricing changes implemented over the
past year.
The digital cable subscriber base represented
89% of our total Television subscriber base as at the end of the
quarter, compared to 85% in the same period last year. We expect to
complete our ongoing analog-to-digital network transition to
digital by the end of 2015.
Phone revenue
The 2% decrease in Phone revenue this quarter was a result of:
- decreased subscriber volume; and
- increased promotional discounting activity;
- the effect the CRTC cancellation notification policy change;
partially offset by
- the impact and timing of pricing changes implemented over the
past year.
Operating expenses
The 4% increase in operating expenses this quarter was a result
of:
- higher investments in programming and customer value
enhancements; partially offset by
- various cost efficiency and productivity initiatives.
Adjusted operating profit
The 2% decrease in adjusted operating profit this quarter was a
result of the revenue and expense changes discussed above.
BUSINESS SOLUTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Solutions Financial Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended March 31 |
(In millions of dollars, except
margins) |
|
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Next generation |
|
|
|
|
|
70 |
|
|
|
64 |
|
|
|
9 |
|
Legacy |
|
|
|
|
|
23 |
|
|
|
29 |
|
|
|
(21) |
|
Service revenue |
|
|
|
|
|
93 |
|
|
|
93 |
|
|
|
- |
|
Equipment sales |
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
- |
Operating revenue |
|
|
|
|
|
94 |
|
|
|
94 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
(66) |
|
|
|
(66) |
|
|
|
- |
Adjusted operating profit |
|
|
|
|
|
28 |
|
|
|
28 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit margin |
|
|
|
|
|
29.8% |
|
|
|
29.8% |
|
|
|
- |
Additions to property,
plant and equipment |
|
|
|
|
|
33 |
|
|
|
26 |
|
|
|
27 |
Business Solutions continues to focus primarily
on next generation IP-based services, leveraging higher-margin
on-net and near-net service revenue opportunities, and using
existing network facilities to expand offerings to the small,
medium, and large-sized enterprise, public sector, and carrier
wholesale markets. Business Solutions is also focused on data
centre colocation, hosting, cloud, and disaster recovery
services.
Next generation services, which include our data
centre operations, represented 75% (2014 - 69%) of total service
revenue in the quarter. Revenue from the lower-margin off-net
legacy business, which continues to decline as planned, generally
includes circuit-switched local and long-distance voice services
and legacy data services, which often use facilities that are
leased from other carriers rather than owned.
Operating revenue
Service revenue was stable this quarter as a result of:
- continuing execution of our plan to grow higher-margin on-net
and near-net next generation IP-based services revenue; and
- higher revenue from data centre operations; offset by
- the continuing planned decline in the legacy off-net voice and
data business, a trend we expect to continue as we focus the
business on on-net and near-net opportunities and customers move to
more advanced and cost-effective IP-based services and
solutions.
Operating expenses
Operating expenses were stable this quarter as a result of:
- lower legacy service costs related to planned lower volumes and
customer levels; and
- ongoing initiatives to reduce costs and increase productivity;
offset by
- higher on-net and next generation service costs associated with
higher volumes.
Adjusted operating profit
Adjusted operating profit was stable this quarter as a result of
the continued growth in on-net and near-net next generation
business and productivity improvements offset by the continued
decline in off-net legacy business.
MEDIA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Financial Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31 |
(In millions of dollars, except margins) |
|
|
|
|
|
2015 |
|
|
|
2014 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
|
|
|
|
464 |
|
|
|
367 |
|
|
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
(496) |
|
|
|
(391) |
|
|
27 |
Adjusted operating loss |
|
|
|
|
|
(32) |
|
|
|
(24) |
|
|
(33) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating loss margin |
|
|
|
|
|
(6.9%) |
|
|
|
(6.5%) |
|
|
(0.4 pts) |
Additions to property, plant and
equipment |
|
|
|
|
|
9 |
|
|
|
14 |
|
|
(36) |
National NHL licensing agreement
The national NHL licensing agreement commenced in the fourth
quarter of 2014. The first quarter of the calendar year is when the
greatest volume of regular season games are played, followed by the
second quarter which includes fewer games but includes the league
playoffs. Playoff games are expected to command a premium in
advertising revenues. NHL-related programming and production costs
are expensed based on the proportion of games played without
differentiation between regular season and playoff games.
Operating revenue
The 26% increase in operating revenue this quarter was a result
of:
- approximately $106 million of
revenue generated by the national NHL licensing agreement;
- higher subscription revenue generated by our Sportsnet
properties; and
- higher Radio and Next Issue Canada revenue; partially offset
by
- continued softness in conventional broadcast TV and print
advertising.
Operating expenses
The 27% increase in operating expenses this quarter was a result
of:
- higher programming and production costs of approximately
$120 million as a result of the
increase in the number of NHL hockey games associated with the
national and regional NHL licensing agreements. There were more
regional NHL games relative to last year partially as a result of
schedule changes due to the 2014 Winter Olympic Games in the prior
year; partially offset by
- lower conventional broadcast TV programming costs;
- lower publishing costs related to lower printing, postage,
shipping, and circulation costs; and
- decreased operating costs in Radio.
Adjusted operating loss
The $8 million increase in adjusted
operating loss this quarter reflects the revenue and expense
changes described above. The NHL games contributed an expected
adjusted operating loss of approximately $14
million this quarter as a result of the seasonal peak period
of games, as discussed above. We anticipate this seasonal loss will
be offset in the second quarter of 2015 with the higher-value
playoff season expected to generate greater advertising revenue,
while at the same time there are fewer games produced and over
which rights are amortized.
Compared to the fourth quarter of 2014, the
lower revenue and adjusted operating profit trends primarily
reflect the seasonality of Media's business. In addition to the NHL
impacts described above, this is a result of higher conventional
advertising revenue occurring in the fourth quarter of 2014 due to
fall season premieres in broadcasting and higher retail sales at
The Shopping Channel due to holiday shopping.
Additions to Property, Plant and
Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31 |
(In millions of dollars, except
capital intensity) |
|
|
|
|
|
2015 |
|
|
|
2014 |
|
|
% Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless |
|
|
|
|
|
180 |
|
|
|
181 |
|
|
(1) |
|
Cable |
|
|
|
|
|
224 |
|
|
|
251 |
|
|
(11) |
|
Business Solutions |
|
|
|
|
|
33 |
|
|
|
26 |
|
|
27 |
|
Media |
|
|
|
|
|
9 |
|
|
|
14 |
|
|
(36) |
|
Corporate |
|
|
|
|
|
29 |
|
|
|
16 |
|
|
81 |
Total additions to
property, plant and equipment |
|
|
|
|
|
475 |
|
|
|
488 |
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital intensity 1 |
|
|
|
|
|
15.0% |
|
|
|
16.2% |
|
|
(1.2 pts) |
1 |
Capital intensity is a key performance indicator. See "Key
Performance Indicators". |
Wireless
The relatively stable additions to property, plant and equipment at
Wireless this quarter are primarily related to LTE capacity
investments and site build activity to further enhance network
coverage and quality and the continued deployment of our 700 MHz
spectrum. Deployment of the LTE network has reached approximately
87% of Canada's population as at
March 31, 2015.
Cable
The decrease in additions to property, plant and equipment at Cable
this quarter was a result of lower customer equipment investment in
our next generation NextBox digital set-top boxes compared to the
same quarter last year. We also made investments this quarter to
improve the capacity of our Internet platform, further improve the
reliability and quality of the network, and continue the
development of our next generation IP-based video service.
Business Solutions
The increase in Business Solutions property, plant and equipment
additions this quarter was a result of data centre investments and
network expansion to reach additional customers and sites.
Media
The decrease in Media property, plant and equipment additions this
quarter was a result of greater prior year investments made to our
digital, IT infrastructure, and broadcast facilities.
Corporate
The increase in Corporate property, plant and equipment additions
this quarter was a result of higher spending on premise
improvements at our various offices.
Capital Intensity
Capital intensity decreased this quarter as a result of a decline
in additions to property, plant and equipment combined with the
increase in operating revenue.
Financial Guidance
We have no changes to the 2015 annual consolidated guidance ranges
for adjusted operating profit, additions to property, plant and
equipment, or free cash flow that we provided on January 29, 2015. See "About Forward-Looking
Information" in this earnings release and in our 2014 Annual
MD&A.
Key Performance Indicators
We measure the success of our strategy using a
number of key performance indicators that are defined and discussed
in our 2014 Annual MD&A and this earnings release. We believe
these key performance indicators allow us to appropriately measure
our performance against our operating strategy as well as against
the results of our peers and competitors. The following key
performance indicators are not measurements in accordance with IFRS
and should not be considered as an alternative to net income or any
other measure of performance under IFRS. They include:
- Subscriber counts;
- Subscriber churn;
- Average revenue per user (ARPU);
- Average revenue per account (ARPA); and
- Capital intensity.
Commencing this quarter, we are disclosing ARPA
as one of our key performance indicators, which is described
below:
Average revenue per account - Wireless
Average revenue per account (ARPA) helps us identify trends and
measure our success in attracting and retaining multiple-device
accounts. A single Wireless postpaid account typically provides
subscribers with the advantage of allowing for the pooling of plan
attributes across multiple devices and on a single bill. Each
Wireless postpaid account is represented by an identifiable billing
account number. A single Wireless postpaid account may include more
than one identifiable telephone number and receive monthly Wireless
services for a variety of connected devices including smartphones,
basic phones, tablets, and other devices. Wireless postpaid
accounts under our various brand names are considered separate
accounts. We calculate Wireless ARPA by dividing total Wireless
postpaid network revenue (monthly) by the average number of
Wireless postpaid accounts for the same time period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31 |
(In millions of dollars, except ARPA
and months; subscribers in thousands) |
|
|
|
|
|
2015 |
2014 |
|
|
|
|
|
|
|
|
Postpaid ARPA (monthly) |
|
|
|
|
|
|
|
|
Total network revenue |
|
|
|
|
|
1,672 |
1,636 |
|
Less: prepaid revenue |
|
|
|
|
|
58 |
58 |
|
Postpaid (voice and data) revenue |
|
|
|
|
|
1,614 |
1,578 |
|
|
|
|
|
|
|
|
|
Divided by: average Wireless postpaid
accounts |
|
|
|
|
|
5,006 |
5,102 |
|
Divided by: three months for the quarter |
|
|
|
|
|
3 |
3 |
Postpaid ARPA (monthly) |
|
|
|
|
|
$ 107.47 |
$ 103.10 |
Non-GAAP Measures
We use the following non-GAAP measures. These
are reviewed regularly by management and our Board of Directors 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 an indicator of
our operating performance, our ability to incur and service debt,
and as a measurement to value companies in the telecommunications
sector. These are not recognized measures under GAAP and do not
have standard meanings under IFRS, so they may not be a reliable
way to compare us to other companies.
Non-GAAP
measure |
Why we use it |
How we calculate
it |
Most
comparable
IFRS financial
measure |
Adjusted
operating profit
and related
margin |
- To evaluate the performance of our
businesses and when making
decisions about the ongoing
operations of the business and our
ability to generate cash flows.
- We believe that certain investors and
analysts use adjusted operating profit
to measure our ability to service debt
and to meet other payment obligations.
- We also use it as one component in
determining short-term incentive
compensation for all management
employees.
|
Adjusted operating
profit:
Net income
add back
income taxes, other (income) expense, finance
costs, depreciation and amortization,
impairment of assets, stock-based
compensation, and restructuring, acquisition
and other expenses.
Adjusted operating profit margin:
Adjusted operating profit
divided by
Operating revenue (network revenue for
Wireless). |
Net income |
Adjusted net
income
Adjusted basic
and diluted
earnings per
share |
- To assess the performance of our
businesses before the effects of these
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 they are non-recurring.
|
Net income
add back
stock-based compensation, restructuring,
acquisition and other expenses, impairment of
assets, gains on sale of investments, losses on
repayment of long-term debt, and income tax
adjustments on these items, including
adjustments as a result of legislative changes. |
Net income
Basic and diluted
earnings per share |
Free cash flow |
- To show how much cash we have
available to repay debt and reinvest in
our company, which is an important
indicator of our financial strength and
performance.
- We believe that some investors and
analysts use free cash flow to value a
business and its underlying assets.
|
Adjusted operating
profit
minus
additions to property, plant and equipment,
interest on borrowings net of interest
capitalized, and cash income taxes. |
Cash provided by
operating activities |
Adjusted net
debt |
- To conduct valuation-related analysis
and make decisions about capital
structure.
- We believe this helps investors and
analysts analyze our enterprise and
equity value and assess our leverage.
|
Total long-term
debt
plus
current portion of long-term debt, deferred
transaction costs and discounts, net debt
derivative assets or liabilities, bank advances,
and short-term borrowings
minus
cash and cash equivalents. |
Long-term debt |
Adjusted net
debt to adjusted
operating profit |
- To conduct valuation-related analysis
and make decisions about capital
structure.
- We believe this helps investors and
analysts analyze our enterprise and
equity value and assess our leverage.
|
Adjusted net debt
(defined above)
divided by
12 months trailing adjusted operating profit
(defined above). |
Long-term debt
divided by net
income |
Reconciliation of adjusted
operating profit |
|
|
|
|
|
|
|
|
|
Three
months ended March 31 |
(In millions of dollars) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Net income |
|
|
|
255 |
307 |
Add (deduct): |
|
|
|
|
|
|
Income taxes |
|
|
|
82 |
106 |
|
Other (income) |
|
|
|
(3) |
(10) |
|
Finance costs |
|
|
|
210 |
225 |
|
Depreciation and amortization |
|
|
|
559 |
519 |
|
Stock-based compensation |
|
|
|
12 |
5 |
|
Restructuring, acquisition and other |
|
|
|
9 |
9 |
|
|
|
|
|
|
Adjusted operating profit |
|
|
|
1,124 |
1,161 |
|
|
|
|
|
|
Reconciliation of adjusted net
income |
|
|
|
|
|
|
|
|
|
Three months ended March 31 |
(In millions of dollars) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Net income |
|
|
|
255 |
307 |
Add (deduct): |
|
|
|
|
|
|
Stock-based compensation |
|
|
|
12 |
5 |
|
Restructuring, acquisition and other |
|
|
|
9 |
9 |
|
Loss on repayment of long-term
debt |
|
|
|
7 |
29 |
Income tax impact of above items |
|
|
|
(8) |
(10) |
|
|
|
|
|
|
Adjusted net income |
|
|
|
275 |
340 |
|
|
|
|
|
|
Reconciliation of free cash flow |
|
|
|
|
|
|
|
|
|
Three months ended March 31 |
(In millions of dollars) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Cash provided by operating
activities |
|
|
|
227 |
408 |
Add (deduct): |
|
|
|
|
|
|
Property, plant and equipment
expenditures |
|
|
|
(475) |
(488) |
|
Interest on borrowings, net of capitalization |
|
|
|
(188) |
(183) |
|
Restructuring, acquisition and other |
|
|
|
9 |
9 |
|
Interest paid |
|
|
|
263 |
236 |
|
Change in non-cash working capital |
|
|
|
350 |
309 |
|
Other adjustments |
|
|
|
80 |
65 |
|
|
|
|
|
|
Free cash flow |
|
|
|
266 |
356 |
|
|
|
|
|
|
Reconciliation of adjusted net debt and adjusted
net debt / adjusted operating profit |
|
|
|
|
As at
March 31 |
As at
December 31 |
(In millions of dollars) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Current portion of long-term debt |
|
|
|
- |
963 |
Long-term debt |
|
|
|
15,490 |
13,824 |
Deferred transaction costs and
discounts |
|
|
|
106 |
108 |
|
|
|
|
15,596 |
14,895 |
Add (deduct): |
|
|
|
|
|
|
Net debt derivatives assets |
|
|
|
(1,441) |
(846) |
|
Short-term borrowings |
|
|
|
1,035 |
842 |
|
Bank advances (cash and cash equivalents) |
|
|
|
27 |
(176) |
|
|
|
|
|
|
Adjusted net debt |
|
|
|
15,217 |
14,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
at
March 31 |
As
at
December 31 |
(In millions of dollars, except
ratios) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Adjusted net debt / adjusted operating
profit |
|
|
|
|
|
|
Adjusted net debt |
|
|
|
15,217 |
14,715 |
|
Divided by: trailing 12 months
adjusted operating profit |
|
|
|
4,982 |
5,019 |
Adjusted net debt / adjusted operating
profit |
|
|
|
3.1 |
2.9 |
|
|
|
|
|
|
Reconciliation of adjusted earnings per
share |
|
|
|
|
|
(In millions of dollars, except per
share amounts; |
|
|
|
Three months ended March 31 |
number of shares outstanding in
millions) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Adjusted basic earnings per
share: |
|
|
|
|
|
|
Adjusted net income |
|
|
|
275 |
340 |
|
Divided by: weighted average number of shares
outstanding |
|
|
|
515 |
515 |
Adjusted basic earnings per share |
|
|
|
0.53 |
0.66 |
|
|
|
|
|
|
Adjusted diluted earnings per
share: |
|
|
|
|
|
|
Adjusted net income |
|
|
|
275 |
340 |
|
Divided by: diluted weighted
average number of shares outstanding |
|
|
|
517 |
517 |
Adjusted diluted earnings per
share |
|
|
|
0.53 |
0.66 |
|
|
|
|
|
|
Rogers Communications Inc. |
|
|
|
|
|
Interim Condensed Consolidated Statements of
Income |
|
|
|
|
|
(In millions of Canadian dollars, except per share
amounts, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended March 31 |
(In millions of Canadian dollars,
except per share amounts) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Operating revenue |
|
|
|
3,175 |
3,020 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Operating costs |
|
|
|
2,063 |
1,864 |
|
Depreciation and amortization |
|
|
|
559 |
519 |
|
Restructuring, acquisition and other |
|
|
|
9 |
9 |
Finance costs |
|
|
|
210 |
225 |
Other income |
|
|
|
(3) |
(10) |
|
|
|
|
|
|
Income before income taxes |
|
|
|
337 |
413 |
Income taxes |
|
|
|
82 |
106 |
|
|
|
|
|
|
Net income for the period |
|
|
|
255 |
307 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
Basic |
|
|
|
$ 0.50 |
$ 0.60 |
|
Diluted |
|
|
|
$ 0.48 |
$ 0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
Rogers Communications Inc. |
|
|
|
|
|
Interim Condensed Consolidated Statements of
Financial Position |
|
|
|
|
|
(In millions of Canadian dollars, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
March 31 |
As
at
December 31 |
(In millions of Canadian dollars) |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
- |
176 |
|
Accounts receivable |
|
|
|
1,440 |
1,591 |
|
Inventories |
|
|
|
380 |
251 |
|
Other current assets |
|
|
|
328 |
191 |
|
Current portion of derivative instruments |
|
|
|
149 |
136 |
Total current assets |
|
|
|
2,297 |
2,345 |
|
|
|
|
|
|
Property, plant and equipment |
|
|
|
10,610 |
10,655 |
Intangible assets |
|
|
|
6,537 |
6,588 |
Investments |
|
|
|
1,866 |
1,898 |
Derivative instruments |
|
|
|
1,430 |
788 |
Other long-term assets |
|
|
|
357 |
356 |
Deferred tax assets |
|
|
|
9 |
9 |
Goodwill |
|
|
|
3,883 |
3,883 |
|
|
|
|
|
|
Total assets |
|
|
|
26,989 |
26,522 |
|
|
|
|
|
|
Liabilities and shareholders'
equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Bank advances |
|
|
|
27 |
- |
|
Short-term borrowings |
|
|
|
1,035 |
842 |
|
Accounts payable and accrued liabilities |
|
|
|
2,141 |
2,578 |
|
Income tax payable |
|
|
|
- |
47 |
|
Current portion of provisions |
|
|
|
7 |
7 |
|
Unearned revenue |
|
|
|
495 |
443 |
|
Current portion of long-term debt |
|
|
|
- |
963 |
|
Current portion of derivative instruments |
|
|
|
75 |
40 |
Total current liabilities |
|
|
|
3,780 |
4,920 |
|
|
|
|
|
|
Provisions |
|
|
|
52 |
55 |
Long-term debt |
|
|
|
15,490 |
13,824 |
Derivative instruments |
|
|
|
100 |
11 |
Other long-term liabilities |
|
|
|
360 |
462 |
Deferred tax liabilities |
|
|
|
1,766 |
1,769 |
Total liabilities |
|
|
|
21,548 |
21,041 |
|
|
|
|
|
|
Shareholders' equity |
|
|
|
5,441 |
5,481 |
|
|
|
|
|
|
Total liabilities and shareholders'
equity |
|
|
|
26,989 |
26,522 |
|
|
|
|
|
|
Rogers Communications Inc. |
|
|
|
|
|
Interim Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
|
(In millions of Canadian dollars, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March
31 |
(In millions of Canadian dollars) |
|
|
|
2015 |
2014 |
Operating activities: |
|
|
|
|
|
|
Net income for the period |
|
|
|
255 |
307 |
|
Adjustments to
reconcile net income to cash provided by operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
559 |
519 |
|
|
Program rights amortization |
|
|
|
22 |
16 |
|
|
Finance costs |
|
|
|
210 |
225 |
|
|
Income taxes |
|
|
|
82 |
106 |
|
|
Stock-based compensation |
|
|
|
12 |
5 |
|
|
Post-employment benefits contributions, net of
expense |
|
|
|
(95) |
(85) |
|
|
Other |
|
|
|
(10) |
(6) |
|
|
|
|
1,035 |
1,087 |
|
Change in non-cash operating working
capital items |
|
|
|
(350) |
(309) |
|
|
|
|
685 |
778 |
|
Income taxes paid |
|
|
|
(195) |
(134) |
|
Interest paid |
|
|
|
(263) |
(236) |
|
|
|
|
|
|
Cash provided by operating
activities |
|
|
|
227 |
408 |
Investing activities: |
|
|
|
|
|
|
Additions to property, plant and
equipment |
|
|
|
(475) |
(488) |
|
Changes in non-cash working capital
related to property, plant and
equipment |
|
|
|
(92) |
(17) |
|
Additions to program rights |
|
|
|
(12) |
(7) |
|
Acquisitions and other strategic
transactions, net of cash acquired |
|
|
|
- |
(658) |
|
Other |
|
|
|
(12) |
(3) |
|
|
|
|
|
|
Cash used in investing activities |
|
|
|
(591) |
(1,173) |
Financing activities: |
|
|
|
|
|
|
Proceeds received on short-term
borrowings |
|
|
|
208 |
- |
|
Repayment of short-term
borrowings |
|
|
|
(15) |
- |
|
Issuance of long-term debt |
|
|
|
1,658 |
2,082 |
|
Repayment of long-term debt |
|
|
|
(1,609) |
(1,221) |
|
Proceeds on settlement of
cross-currency interest rate exchange
agreements and forward contracts |
|
|
|
1,059 |
2,150 |
|
Payments on settlement of
cross-currency interest rate exchange
agreements and forward contracts |
|
|
|
(905) |
(2,115) |
|
Transaction costs incurred |
|
|
|
- |
(27) |
|
Dividends paid |
|
|
|
(235) |
(224) |
|
|
|
|
|
|
Cash provided by financing
activities |
|
|
|
161 |
645 |
|
|
|
|
|
|
Change in cash and cash
equivalents |
|
|
|
(203) |
(120) |
Cash and cash equivalents, beginning
of period |
|
|
|
176 |
2,301 |
|
|
|
|
|
|
(Bank advances) cash and cash
equivalents, end of period |
|
|
|
(27) |
2,181 |
About Forward-Looking Information
This earnings release includes "forward-looking
information" within the meaning of applicable securities laws, 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 and statements
- typically include words like could, expect, may, anticipate,
assume, believe, intend, estimate, plan, project, guidance,
outlook, and similar expressions, although not all forward-looking
information and statements include them;
- include 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 be reasonable
at the time they were applied but may prove to be incorrect;
and
- were approved by our management on the date of this earnings
release.
Our forward-looking information and statements
include forecasts and projections related to the following items,
among others:
- revenue
- adjusted operating profit
- property, plant and equipment expenditures
- cash income tax payments
- free cash flow
- dividend payments
- expected growth in subscribers and the services to which they
subscribe
- the cost of acquiring subscribers and deployment of new
services
- continued cost reductions and efficiency improvements
- the growth of new products and services
- all other statements that are not historical facts.
We base our conclusions, forecasts, and
projections on the following factors, among others:
- general economic and industry growth rates
- currency exchange rates and interest rates
- product pricing levels and competitive intensity
- subscriber growth
- pricing, usage and churn rates
- changes in government regulation
- technology deployment
- availability of devices
- timing of new product launches
- content and equipment costs
- the integration of acquisitions
- industry structure and stability.
Except as otherwise indicated, this earnings
release and our forward-looking statements 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, announced or may occur after the date the statement
containing the forward-looking information is made.
Risks and uncertainties
Actual events and results can be substantially different from what
is expressed or implied by forward-looking information as a result
of risks, uncertainties, and other factors, many of which are
beyond our control, including but not limited to:
- new interpretations and new accounting standards from
accounting standards bodies
- regulatory changes
- technological change
- economic conditions
- unanticipated changes in content or equipment costs
- changing conditions in the entertainment, information, and
communications industries
- the integration of acquisitions
- litigation and tax matters
- the level of competitive intensity
- the emergence of new opportunities.
These factors can also affect our objectives,
strategies, and intentions. Many of these factors are beyond our
control or our current expectations or knowledge. Should one or
more of these risks, uncertainties, or other factors materialize,
our objectives, strategies, or intentions change, or any other
factors or assumptions underlying the forward-looking information
prove incorrect, our actual results and our plans could vary
significantly from what we currently foresee.
Accordingly, we warn investors to exercise
caution when considering statements containing forward-looking
information and caution them that it would be unreasonable to rely
on such statements as creating legal rights regarding our future
results or plans. We are under no obligation (and we expressly
disclaim any such obligation) to update or alter any statements
containing forward-looking information or the factors or
assumptions underlying them, whether as a result of new
information, future events, or otherwise, except as required by
law. All of the forward-looking information in this earnings
release is qualified by the cautionary statements herein.
Before making an investment decision
Before making any investment decisions and for a detailed
discussion of the risks, uncertainties, and environment associated
with our business, fully review the sections of our First Quarter
2015 MD&A entitled "Updates to Risks and Uncertainties" and
"Regulatory Developments" and fully review the sections in our 2014
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.
About Rogers
Rogers Communications is a leading diversified
public Canadian communications and media company. We are
Canada's largest provider of
wireless communications services and one of Canada's leading providers of cable
television, high-speed Internet and telephony services to consumers
and businesses. Through Rogers Media, we are engaged in radio and
television broadcasting, televised shopping, magazines and trade
publications, sports entertainment, and digital media. Our stock is
publicly traded on the Toronto Stock Exchange (TSX: RCI.A and
RCI.B) and on the New York Stock Exchange (NYSE: RCI). For further
information about the Rogers group of companies, please visit
rogers.com.
Information on or connected to our website is
not part of or incorporated into this earnings release.
Quarterly Investment Community
Teleconference
The first quarter 2015 results teleconference
with the investment community will be held on:
- April 20, 2015
- 4:30 p.m. Eastern Time
- webcast available at rogers.com/webcast
A rebroadcast will be available at
rogers.com/investors on the Events and Presentations page for at
least two weeks following the teleconference. Additionally,
investors should note that from time to time, Rogers management
presents at brokerage-sponsored investor conferences. Most often,
but not always, these conferences are webcast by the hosting
brokerage firm, and when they are webcast, links are made available
on Rogers' website at rogers.com/events and are placed there
generally at least two days before the conference.
For More Information
You can find additional information relating to us
on our website (rogers.com/investors), on SEDAR (sedar.com), on
EDGAR (sec.gov), or by e-mailing your request to
investor.relations@rci.rogers.com. Information on or connected to
these and other websites referenced in this earnings release is not
part of, or incorporated into, this earnings release.
You can also go to rogers.com/investors for
information about our governance practices, corporate social
responsibility reporting, a glossary of communications and media
industry terms, and additional information about our business.
SOURCE Rogers Communications Inc.