Rogers Communications Inc. 2005 Annual Report Annual 2005 Inc
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Rogers Communications Inc. 2005 Annual Report www.rogers.com you... TSX : RCI NYSE : Rogers Communications Inc. RG 2005 Annual Report Rogers Communications Inc. Corporate Information Corporate Office Share Information Rogers Communications Inc. Listed in Canada on the Toronto Stock Exchange (TSX) 333 Bloor Street East, 10th Floor under RCI: Toronto, ON M4W 1G9 Class A Voting shares (CUSIP # 775109101) (416) 935-7777 Class B Non-Voting shares (CUSIP # 775109200) Contact Information Listed in the U.S. on the New York Stock Exchange (NYSE) under RG: Transfer Agent and Registrar: Class B Non-Voting shares (CUSIP # 775109200) Computershare Trust Company of Canada 1-800-564-6253 Dividends* [email protected] $0.075 per share semi-annually Institutional investors, security analysts and others requiring Expected Record Date: Expected Payment Date: additional financial information can visit the Investor Relations section of the rogers.com website or contact: June 4, 2006 July 4, 2006 December 13, 2006 January 2, 2007 Bruce M. Mann, CPA *Subject to Board approval Vice President, Investor Relations (416) 935-3532 Bond Information [email protected] For information on the various outstanding debt issuances of the Rogers companies, please visit the Investor Relations Eric A. Wright, CMA section of the rogers.com website. Director, Investor Relations (416) 935-3550 Annual Information Form (AIF) [email protected] A copy of the Rogers Communications Inc. AIF is available on For media inquiries, please contact: sedar.com, the Investor Relations section of the rogers.com website or on request by writing to the Corporate Office. Jan L. Innes Vice President, Communications Forward-Looking Information Corporate and Rogers Media This annual report contains forward-looking statements within the meaning of (416) 935-3525 the Private Securities Litigation and Reform Act of 1995 regarding the future [email protected] performance of the Company that involve risks and uncertainties. All forward- looking information is inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or Taanta Gupta contained in the forward-looking information. For a discussion of factors that Vice President, Communications may-affect actual results, see the “Risks and Uncertainties” and “Cautionary Rogers Cable, Wireless, Telecom Statement Regarding Forward-Looking Information” sections of the 2005 Management’s Discussion and Analysis. (416) 935-4727 [email protected] ™ Rogers, Your World Right Now, The Best is Yet to Come, Rogers Cable, Rogers Cable Design, Rogers Mobius Design, Rogers Video, Rogers Centre, Rogers Centre & Design, Auditors Rogers Digital Phone, Pumpkin Patrol, and Better Choice Bundles are trademarks of Rogers Communications Inc. KPMG LLP Sportsnet is a trademark of Rogers Sportsnet Inc. Toronto, Ontario All magazine names are trademarks of Rogers Publishing Limited The Shopping Channel, OMNI.1 and OMNI.2, plus all Radio names are trademarks of Rogers Broadcasting Limited Toronto Blue Jays Baseball Club, Jays Care Foundation and Blue Jays are trademarks of Rogers Blue Jays Baseball Partnership. ® Yahoo!, Yahoo! logos and other Yahoo! product and service names are trademarks and/or registered trademarks of Yahoo! Inc., used under licence. BlackBerry and RIM’s family of related marks and designs are the Intellectual properties of Research In Motion Limited, used with permission. © 2006 Rogers Communications Inc. Other registered trademarks that appear are the property of the respective owners. Design: Interbrand, Toronto Printed in Canada ROGERS COMMUNICATIONS INC. AT A GLANCE 3 ROGERS 2005 ANNUAL REPORT ...keep us innovating. Rogers Communications Inc. at December 31, 2005 TSX: RCI NYSE: RG Rogers Communications Inc. is a diversified Canadian provider of communications, entertainment and information services. See the 2005 Management’s Discussion and Analysis in this document for a discussion and understanding of the various one-time items, pro forma adjustments, reclassifications and non-GAAP measures associated with the 2004 and 2005 financial and operating results presented on these two overview pages. Rogers Wireless Rogers Wireless is the largest Canadian wireless communications service provider, serving almost 6.2 million wireless voice and data subscribers at 3 2 FY2005 Network Revenue: $3,63M December 31, 2005. Rogers Wireless operates Canada’s only GSM/GPRS/EDGE . Postpaid voice 86% network, the global standard in wireless technology, covering 93% of the 2. Prepaid voice 6% Canadian population. Rogers Wireless is Canada’s leader in innovative wireless 3. Wireless data 8% voice and data services, and provides customers with the best and latest wire- 1 less devices and applications. Subscribers to our wireless services have access to these services across the U.S. and internationally in over 175 countries through our roaming agreements with other wireless operators. Rogers sells and mar- kets its wireless products separately under both the Rogers Wireless and the Fido brands. Rogers Cable Rogers Cable is Canada’s largest cable television company, serving approxi- mately 2.26 million basic subscribers at December 31, 2005, representing an 3 FY2005 Revenue: $2,068M estimated 29% of basic cable subscribers in Canada. At December 31, 2005, . Core cable 63% Cable provided digital cable services to approximately 913,200 households, 2 2. High-speed Internet 2% Internet service to approximately 1,145,100 subscribers, and voice-over-cable 3. Video stores 6% 1 telephony services to approximately 47,900 subscribers. Cable’s voice-over- cable telephony services became commercially available on July 1, 2005 in the Toronto market and Cable is currently in the process of expanding the availability of this product to more of its markets. Rogers Telecom On July 1, 2005, we acquired Call-Net Enterprises and subsequent to the acquisition, we changed the name to Rogers Telecom. Telecom is FY2005 Pro Forma Revenue: $857M an integrated telecommunications solutions provider of facilities-based 2 . Business services 64% local, long distance and data services to more than 600,000 households 2. Consumer services 36% and businesses across Canada, primarily targeting metropolitan areas. 1 On January 9, 2006, management of Telecom was transferred to Cable. This will result in changes to our segment reporting in 2006. Rogers Media Rogers Media operates a portfolio of broadcasting operations, publishing operations and sports entertainment assets. Media’s Broadcasting group 2 FY2005 Revenue: $,097M comprises 46 radio stations across Canada; two multicultural television stations . Core Media 85% in Ontario (OMNI.1 and OMNI.2) and a television station in Vancouver 2. Sports Entertainment 5% (OMNI.10) that is repeated in Victoria; Rogers Sportsnet, a specialty sports television service licenced to provide regional sports programming across 1 Canada; and The Shopping Channel, Canada’s only nationally televised shop- ping service. Through Sportsnet, Media also holds 50% ownership in Dome Productions, a mobile production and distribution joint venture that is a leader in high-definition television (“HDTV”) broadcasting in Canada. Media’s Sports Entertainment assets include the Toronto Blue Jays baseball team and Rogers Centre, Canada’s largest sports and entertainment facility. FY2005 Pro Forma FY2005 Pro Forma Operating Profit 4 4 Revenue – $7,90M 3 (before integration expenses) – $2,262M 3 . Wireless 50% . Wireless 59% 1 2. Cable 26% 2 2. Cable 3% 1 2 3. Telecom 0% 3. Telecom 5% 4. Media 4% 4. Media 5% 2005 2004 change (in millions of dollars, subscribers in thousands) (Pro Forma) Network revenue $ 3,612.7 $ 3,010.7 20% Operating profit(excluding integration expenses) 1,390.7 1,015.7 37% PP&E expenditures 492.4 674.1 (27)% Wireless voice and data subscribers: - Postpaid 4,818.2 4,184.1 15% - Prepaid 1,349.8 1,334.1 1% - Total 6,168.0 5,158.2 12% Average monthly revenue per user ($): - Postpaid 63.56 59.74 6% - Prepaid 13.20 13.67 (3)% - Total 51.99 48.01 8% Data revenue as % of network revenue 8.2% 5.1% 61% Churn (%): - Postpaid 1.61 1.93 (17)% - Prepaid 3.54 3.17 12% - Total 2.05 2.25 (9)% (in millions of dollars, subscribers in thousands) 2005 2004 change Revenue $ 2,067.7 $ 1,945.7 6% Operating profit 718.6 708.7 1% PP&E expenditures 676 588 15% Homes passed 3,387.5 3,291.1 3% Customer relationships 2,413.0 2,355.9 2% Basic cable subscribers 2,263.8 2,254.6 – High-speed Internet subscribers 1,145.1 936.6 22% Digital households / subscribers 913.2 675.4 35% Digital terminals in service 1,139.7 795.7 43% Voice-over-cable telephony subscribers 47.9 – – 2005 2004 change (in millions of dollars) (Pro Forma) (Pro Forma) Revenue $ 857.1 $ 818.6 4.7% Operating profit(excluding integration expenses) 115.7 98.9 17% PP&E expenditures 65.8 56.6 16.3% 4 Rogers Telecom FY2005 3 revenue breakdown . Long Distance 43% 1 2. Local 29% 3. Data 26% 4. Other 2% 2 2005 2004 change (in millions of dollars) (restated) Revenue $ 1,097.2 $ 956.9 15% Operating profit 127.8 115.4 11% PP&E expenditures 39.6 20.3 95% Core Media (excluding Sports Entertainment) 5 1 FY2005 revenue breakdown . Publishing 29% 2. Radio 22% 3. OMNI 8% 4 2 4. Sportsnet 5% 3 5. The Shopping Channel 26% 2 ROGERS 2005 ANNUAL REPORT YOU ROCK to your favourite iTunes on the Motorola ROKR wireless MP3 phone, only from1 Rogers. YOU REST EASY knowing you’re protected on-line with the all-in-one security suite included with Rogers Yahoo! Hi-Speed Internet. 3 YOU KEEP your kids in touch and safe with Firefly, the mobile phone that provides peace of 2 mind for parents. 3 ROGERS 2005 ANNUAL REPORT YOU MAKE THE CALL with Rogers Home Phone. Finally, a reliable and affordable primary line home telephone alternative with great service and all the features you rely on, and more.