Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RCI) today
announced its unaudited financial and operating results for the
fourth quarter ended December 31, 2023.
"We delivered industry-leading results in the
fourth quarter and for the full year," said Tony Staffieri,
President and CEO. "We led the industry in growth, exceeded our
Shaw targets, and delivered a number of innovative firsts to
Canadians. We've delivered eight straight quarters of growth and I
remain very confident in our future. Our industry-leading growth
targets for 2024 reflect continued momentum and disciplined
execution."
Consolidated Financial Highlights
|
(In millions of Canadian dollars, except per share amounts,
unaudited) |
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
2023 |
2022 |
% Chg |
|
|
|
2023 |
2022 |
% Chg |
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
5,335 |
4,166 |
28 |
|
|
|
19,308 |
15,396 |
25 |
|
| Total service revenue |
4,470 |
3,436 |
30 |
|
|
|
16,845 |
13,305 |
27 |
|
| Adjusted EBITDA |
2,329 |
1,679 |
39 |
|
|
|
8,581 |
6,393 |
34 |
|
| Net income |
328 |
508 |
(35 |
) |
|
|
849 |
1,680 |
(49 |
) |
| Adjusted net income 1 |
630 |
554 |
14 |
|
|
|
2,406 |
1,915 |
26 |
|
| |
|
|
|
|
|
|
|
| Diluted earnings per share |
$0.62 |
$1.00 |
(38 |
) |
|
$1.62 |
$3.32 |
(51 |
) |
| Adjusted diluted earnings per
share 1 |
$1.19 |
$1.09 |
9 |
|
|
$4.59 |
$3.78 |
21 |
|
| |
|
|
|
|
|
|
|
| Cash provided by operating
activities |
1,379 |
1,145 |
20 |
|
|
|
5,221 |
4,493 |
16 |
|
|
Free cash flow |
823 |
635 |
30 |
|
|
|
2,414 |
1,773 |
36 |
|
________________________1 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" 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.
Quarterly Financial Highlights
Revenue Total revenue and total
service revenue increased by 28% and 30%, respectively, this
quarter, driven substantially by revenue growth in our Cable and
Wireless businesses.
Wireless service revenue increased by 9% this
quarter, primarily as a result of the cumulative impact of growth
in our mobile phone subscriber base and revenue from Shaw Mobile
subscribers acquired through the acquisition of Shaw Communications
Inc. (Shaw, and the Shaw Transaction). Wireless equipment revenue
increased by 17%, primarily as a result of an increase in new
subscribers purchasing devices and a continued shift in the product
mix towards higher-value devices.
Cable service revenue increased by 94% this
quarter primarily as a result of the Shaw Transaction.
Media revenue decreased by 8% this quarter
primarily as a result of lower sports-related revenue associated
with a distribution from Major League Baseball in 2022.
Adjusted EBITDA and
marginsConsolidated adjusted EBITDA increased 39% this
quarter and our adjusted EBITDA margin increased by 340 basis
points, as a result of improving synergies and efficiencies.
Wireless adjusted EBITDA increased by 10%,
primarily due to the flow-through impact of higher revenue as
discussed above. This gave rise to an adjusted EBITDA margin of
63.9%.
Cable adjusted EBITDA increased by 113% due to
the flow-through impact of higher revenue as discussed above and
the achievement of cost synergies associated with integration
activities. This gave rise to an adjusted EBITDA margin of
56.1%.
Media adjusted EBITDA decreased by $53 million,
or 93%, primarily due to lower sports-related revenue as discussed
above.
Net income and adjusted net
incomeNet income decreased by 35% this quarter, primarily
as a result of higher depreciation and amortization associated with
assets acquired through the Shaw Transaction; higher restructuring,
acquisition and other costs, primarily associated with Shaw
acquisition- and integration-related activities; and higher finance
costs, partially offset by higher adjusted EBITDA. Adjusted net
income2 increased by 14% this quarter, primarily as a result of
higher adjusted EBITDA.
Cash flow and available
liquidityThis quarter, we generated cash provided by
operating activities of $1,379 million (2022 - $1,145 million); the
increase is primarily a result of higher adjusted EBITDA, partially
offset by higher interest paid. We also generated free cash flow of
$823 million (2022 - $635 million), up 30% as a result of higher
adjusted EBITDA, partially offset by higher interest on long-term
debt and higher capital expenditures.
As at December 31, 2023, we had $5.9
billion of available liquidity3 (December 31, 2022 - $4.9
billion), consisting of $0.8 billion in cash and cash equivalents
and $5.1 billion available under our bank credit and other
facilities.
As a result of the Shaw Transaction, our debt
leverage ratio was 4.72 as at December 31, 2023. This has been
calculated on an adjusted basis to include trailing 12-month
adjusted EBITDA of a combined Rogers and Shaw as if the Shaw
Transaction had closed at the beginning of the trailing 12-month
period. If calculated on an as reported basis without the foregoing
adjustment, our debt leverage ratio3 as at December 31, 2023
was 5.0 (December 31, 2022 - 3.3). See "Financial Condition"
for more information.
We also returned $265 million in dividends to
shareholders this quarter and we declared a $0.50 per share
dividend on January 31, 2024.
________________________
2 Effective the second quarter of 2023, we
retrospectively amended our definitions of (i) adjusted net income
(see "Review of Consolidated Performance") and (ii) adjusted net
debt, a component of debt leverage ratio and pro forma debt
leverage ratio (see "Financial Condition").
3 Available liquidity and debt leverage
ratio are capital management measures. Pro forma debt leverage
ratio is a non-GAAP ratio. Pro forma trailing 12-month adjusted
EBITDA is a non-GAAP financial measure and is a component of pro
forma debt leverage ratio. See "Non-GAAP and Other Financial
Measures" for more information about these measures. These are not
standardized financial measures under IFRS and might not be
comparable to similar financial measures disclosed by other
companies. See "Financial Condition" for a reconciliation of
available liquidity.
Strategic Highlights
The five objectives set out below 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 year.
Build the biggest and best networks in the
country
- Invested a record $3.9 billion in
capital expenditures, primarily in our wireless and wireline
network infrastructure.
- Recognized as the best and most
reliable wireless network in Canada for the fifth straight year by
umlaut in July 2023.
- Expanded Canada's largest and most
reliable 5G network to 267 new communities.
- Launched 5G service for all transit
riders in the busiest sections of the Toronto Transit Commission
(TTC) subway system.
- Signed agreements with SpaceX and
Lynk Global to bring satellite-to-mobile phone coverage and
completed Canada's first test call.
- Secured 3800 MHz spectrum licences,
making Rogers the largest 5G spectrum investor.
- Invested in wildfire detection and
prevention technology to help combat climate change events.
- Delivered an additional 50
kilometres of 5G cellular connectivity on Highway 16 in British
Columbia to improve public safety.
Deliver easy to use, reliable products and
services
- Introduced Rogers Internet and TV
services to customers in Western Canada.
- Upgraded all migrated legacy Shaw
Mobile customers to Rogers 5G service.
- Introduced the red Rogers
Mastercard with 48-month device equal payment plan with 0% interest
and up to 3% cashback value for customers.
- Introduced Ignite Self Protect for
customers to self-monitor their homes with connected devices.
Be the first choice for Canadians
- Led the industry in wireless
subscriber additions with 674,000 postpaid mobile phone net
additions.
- Launched our "We Speak Your
Language" program across all retail stores, with the goal of
serving customers in their preferred language.
- Secured number-one spots for
flagship radio brands 98.1 CHFI, CityNews 680, and KiSS 92.5 for
the Summer 2023 ratings period.
- Helped bring Taylor Swift to Canada
in 2024 for six shows in Toronto and three in Vancouver.
- Signed a long-term broadcast
agreement with UFC that will bring live UFC events to
Sportsnet.
Be a strong national company investing in
Canada
- Successfully completed the historic
Shaw Transaction in April 2023.
- Repatriated the Shaw customer
service teams as part of our commitment to 100% Canada-based
teams.
- Expanded Connected for Success, our
high-speed, low-cost Internet program to Western Canada.
- Announced a new five-year deal as
title sponsor of the Shaw Charity Classic.
- Drove benefits to community
organizations across Canada of over $100 million.
Be the growth leader in our industry
- Total service revenue up 27%;
adjusted EBITDA up 34%.
- Generated free cash flow of $2,414
million and cash provided by operating activities of $5,221
million.
- Achieved strong Cable adjusted
EBITDA margin expansion of 330 basis points; Shaw integration
tracking ahead of plan.
- Delivered on industry-leading 2023
financial guidance.
Achieved 2023 Guidance
The following table outlines guidance ranges
that we had previously provided and our actual results and
achievements for the selected full-year 2023 financial metrics.
|
|
2022 |
|
2023 |
|
2023 |
|
|
| (In
millions of dollars, except percentages) |
Actual |
|
Guidance Ranges |
|
Actual |
|
Achievement |
|
Consolidated Guidance 1 |
|
|
|
|
|
|
|
|
|
|
|
Total service revenue |
13,305 |
|
Increase of 26% |
to |
increase of 30% |
|
16,845 |
27 |
% |
|
x |
|
Adjusted EBITDA |
6,393 |
|
Increase of 33% |
to |
increase of 36% |
|
8,581 |
34 |
% |
|
x |
|
Capital expenditures 2 |
3,075 |
|
3,700 |
to |
3,900 |
|
3,934 |
n/m |
|
|
xx |
|
Free cash flow |
1,773 |
|
2,200 |
to |
2,500 |
|
2,414 |
n/m |
|
|
x |
n/m - not meaningful1 The table outlines
guidance ranges for selected full-year 2023 consolidated financial
metrics provided in our February 2, 2023 earnings release and
subsequently updated on July 26, 2023. Guidance ranges presented as
percentages reflect percentage increases over full-year 2022
results.2 Includes additions to property, plant and equipment
net of proceeds on disposition, but does not include expenditures
for spectrum licences, additions to right-of-use assets, or assets
acquired through business combinations.
2024 Outlook
For the full-year 2024, we expect growth in
total service revenue and adjusted EBITDA will drive higher free
cash flow. In 2024, we expect to have the financial flexibility to
maintain our network advantages and to continue to return cash to
shareholders.
|
|
2023 |
|
2024 |
| (In
millions of dollars, except percentages; unaudited) |
Actual |
|
Guidance Ranges 1 |
|
|
|
|
|
|
|
| Consolidated
Guidance |
|
|
|
|
|
|
Total service revenue |
16,845 |
|
Increase of 8% |
to |
increase of 10% |
|
Adjusted EBITDA |
8,581 |
|
Increase of 12% |
to |
increase of 15% |
|
Capital expenditures 2 |
3,934 |
|
3,800 |
to |
4,000 |
|
Free cash flow |
2,414 |
|
2,900 |
to |
3,100 |
1 Guidance ranges presented as percentages
reflect percentage increases over full-year 2023
results.2 Includes additions to property, plant and equipment
net of proceeds on disposition, but does not include expenditures
for spectrum licences, additions to right-of-use assets, or assets
acquired through business combinations.
The above table outlines guidance ranges for
selected full-year 2024 consolidated financial metrics. These
ranges take into consideration our current outlook and our 2023
results. The purpose of the financial outlook is to assist
investors, shareholders, and others in understanding certain
financial metrics relating to expected 2024 financial results for
evaluating the performance of our business. This information may
not be appropriate for other purposes. Information about our
guidance, including the various assumptions underlying it, is
forward-looking and should be read in conjunction with "About
Forward-Looking Information" (including the material assumptions
listed under the heading "Key assumptions underlying our full-year
2024 guidance") and the related disclosure and information about
various economic, competitive, and regulatory assumptions, factors,
and risks that may cause our actual future financial and operating
results to differ from what we currently expect.
We provide annual guidance ranges on a
consolidated full-year basis that are consistent with annual
full-year Board of Directors-approved plans. Any updates to our
full-year financial guidance over the course of the year would only
be made to the consolidated guidance ranges that appear above.
About Rogers
Rogers is Canada's leading wireless, cable and
media company that provides connectivity and entertainment to
Canadian consumers and businesses across the country. 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 |
Sarah Schmidt |
| 647.435.6470 |
647.643.6397 |
| paul.carpino@rci.rogers.com |
sarah.schmidt@rci.rogers.com |
| |
|
Quarterly Investment Community
Teleconference
Our fourth quarter 2023 results teleconference
with the investment community will be held on:
- February 1, 2024
- 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+ (sedarplus.ca), 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
and twelve months ended December 31, 2023, as well as
forward-looking information (see "About Forward-Looking
Information") about future periods. This earnings release should be
used as preparation for reading our forthcoming Management's
Discussion and Analysis (MD&A) and Audited Consolidated
Financial Statements for the year ended December 31, 2023,
which we intend to file with securities regulators in Canada and
the US in the coming weeks. These documents will be made available
at investors.rogers.com, sedarplus.ca, and sec.gov or mailed upon
request.
The financial information contained in this
earnings release is prepared using International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board. This earnings release should be read in
conjunction with our 2022 Annual MD&A, our 2022 Audited
Consolidated Financial Statements, our 2023 First, Second, and
Third Quarter MD&A and Interim Condensed Consolidated Financial
Statements, and our other recent filings with Canadian and US
securities regulatory authorities, which are available on SEDAR+ at
sedarplus.ca or EDGAR at sec.gov, respectively.
Effective the second quarter of 2023, we
retrospectively amended our definitions of (i) adjusted net income
and (ii) adjusted net debt. See "Non-GAAP and Other Financial
Measures" in this earnings release.
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 are in Canadian dollars
unless otherwise stated and are unaudited. All percentage changes
are calculated using the rounded numbers as they appear in the
tables. Information is current as at January 31, 2024 and was
approved by RCI's Board of Directors (the Board).
We are publicly traded on the Toronto Stock
Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange
(NYSE: RCI).
The results from the acquired Shaw operations
are included in our segment and consolidated results from the date
of acquisition, consistent with our reportable segment
definitions.
In this earnings release, this quarter, the
quarter, or fourth quarter refer to the three months ended
December 31, 2023, first quarter refers to the three months
ended March 31, 2023, second quarter refers to the three months
ended June 30, 2023, third quarter refers to the three months ended
September 30, 2023 and year to date or full year refer to the
twelve months ended December 31, 2023. All results commentary
is compared to the equivalent period in 2022 or as at
December 31, 2022, as applicable, unless otherwise
indicated.
Trademarks in this earnings release are owned by
Rogers Communications Inc. or an affiliate. This earnings release
also includes trademarks of other parties. The trademarks referred
to in this earnings release may be listed without the ™ symbols.
©2024 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), Satellite, 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. |
During the quarter, Wireless and Cable were
operated by our wholly owned subsidiary, Rogers Communications
Canada Inc. (RCCI), and certain of our other wholly owned
subsidiaries. Following the Shaw Transaction, aspects of Cable were
also operated by Shaw Cablesystems G.P., Shaw Telecom G.P., and
Shaw Satellite G.P. Media was operated by our wholly owned
subsidiary, Rogers Media Inc., and its subsidiaries.
Summary of Consolidated Financial Results
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars, except margins and per share amounts) |
2023 |
|
2022 |
|
% Chg |
|
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
|
|
|
|
|
|
|
Wireless |
2,868 |
|
2,578 |
|
11 |
|
|
10,222 |
|
9,197 |
|
11 |
|
|
Cable |
1,982 |
|
1,019 |
|
95 |
|
|
7,005 |
|
4,071 |
|
72 |
|
|
Media |
558 |
|
606 |
|
(8 |
) |
|
2,335 |
|
2,277 |
|
3 |
|
|
Corporate items and intercompany eliminations |
(73 |
) |
(37 |
) |
97 |
|
|
(254 |
) |
(149 |
) |
70 |
|
|
Revenue |
5,335 |
|
4,166 |
|
28 |
|
|
19,308 |
|
15,396 |
|
25 |
|
|
Total service revenue 1 |
4,470 |
|
3,436 |
|
30 |
|
|
16,845 |
|
13,305 |
|
27 |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
|
|
|
|
|
|
|
Wireless |
1,291 |
|
1,173 |
|
10 |
|
|
4,986 |
|
4,469 |
|
12 |
|
|
Cable |
1,111 |
|
522 |
|
113 |
|
|
3,774 |
|
2,058 |
|
83 |
|
|
Media |
4 |
|
57 |
|
(93 |
) |
|
77 |
|
69 |
|
12 |
|
|
Corporate items and intercompany eliminations |
(77 |
) |
(73 |
) |
5 |
|
|
(256 |
) |
(203 |
) |
26 |
|
|
Adjusted EBITDA 2 |
2,329 |
|
1,679 |
|
39 |
|
|
8,581 |
|
6,393 |
|
34 |
|
| Adjusted EBITDA margin 2 |
43.7 |
% |
40.3 |
% |
3.4 pts |
|
|
44.4 |
% |
41.5 |
% |
2.9 pts |
|
|
|
|
|
|
|
|
|
|
| Net income |
328 |
|
508 |
|
(35 |
) |
|
849 |
|
1,680 |
|
(49 |
) |
| Basic earnings per share |
$0.62 |
|
$1.01 |
|
(39 |
) |
|
$1.62 |
|
$3.33 |
|
(51 |
) |
| Diluted earnings per share |
$0.62 |
|
$1.00 |
|
(38 |
) |
|
$1.62 |
|
$3.32 |
|
(51 |
) |
| |
|
|
|
|
|
|
|
| Adjusted net income 2 |
630 |
|
554 |
|
14 |
|
|
2,406 |
|
1,915 |
|
26 |
|
| Adjusted basic earnings per share
2 |
$1.19 |
|
$1.10 |
|
8 |
|
|
$4.60 |
|
$3.79 |
|
21 |
|
|
Adjusted diluted earnings per share 2 |
$1.19 |
|
$1.09 |
|
9 |
|
|
$4.59 |
|
$3.78 |
|
21 |
|
|
|
|
|
|
|
|
|
|
| Capital expenditures |
946 |
|
776 |
|
22 |
|
|
3,934 |
|
3,075 |
|
28 |
|
| Cash provided by operating
activities |
1,379 |
|
1,145 |
|
20 |
|
|
5,221 |
|
4,493 |
|
16 |
|
|
Free cash flow |
823 |
|
635 |
|
30 |
|
|
2,414 |
|
1,773 |
|
36 |
|
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" for more
information about these measures.
Results of our Reportable Segments
WIRELESS
Wireless Financial Results
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars, except margins) |
2023 |
|
2022 |
|
% Chg |
|
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
|
|
|
|
|
|
|
Service revenue |
2,020 |
|
1,856 |
|
9 |
|
|
7,802 |
|
7,131 |
|
9 |
|
|
Equipment revenue |
848 |
|
722 |
|
17 |
|
|
2,420 |
|
2,066 |
|
17 |
|
|
Revenue |
2,868 |
|
2,578 |
|
11 |
|
|
10,222 |
|
9,197 |
|
11 |
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
|
Cost of equipment |
846 |
|
734 |
|
15 |
|
|
2,396 |
|
2,115 |
|
13 |
|
|
Other operating expenses |
731 |
|
671 |
|
9 |
|
|
2,840 |
|
2,613 |
|
9 |
|
|
Operating expenses |
1,577 |
|
1,405 |
|
12 |
|
|
5,236 |
|
4,728 |
|
11 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
1,291 |
|
1,173 |
|
10 |
|
|
4,986 |
|
4,469 |
|
12 |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA margin 1 |
63.9 |
% |
63.2 |
% |
0.7 pts |
|
|
63.9 |
% |
62.7 |
% |
1.2 pts |
|
|
Capital expenditures |
334 |
|
421 |
|
(21 |
) |
|
1,625 |
|
1,758 |
|
(8 |
) |
1 Calculated using service revenue.
Wireless Subscriber Results
1
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In thousands, except churn and mobile phone ARPU) |
2023 |
|
2022 |
|
Chg |
|
|
2023 |
|
2022 |
|
Chg |
|
|
|
|
|
|
|
|
|
|
| Postpaid mobile phone 2, 3 |
|
|
|
|
|
|
|
|
Gross additions |
703 |
|
537 |
|
166 |
|
|
2,007 |
|
1,523 |
|
484 |
|
|
Net additions |
184 |
|
193 |
|
(9 |
) |
|
674 |
|
545 |
|
129 |
|
|
Total postpaid mobile phone subscribers 4 |
10,498 |
|
9,392 |
|
1,106 |
|
|
10,498 |
|
9,392 |
|
1,106 |
|
|
Churn (monthly) |
1.67 |
% |
1.24 |
% |
0.43 pts |
|
|
1.11 |
% |
0.90 |
% |
0.21 pts |
|
| Prepaid mobile phone |
|
|
|
|
|
|
|
|
Gross additions |
156 |
|
216 |
|
(60 |
) |
|
867 |
|
796 |
|
71 |
|
|
Net (losses) additions |
(73 |
) |
(7 |
) |
(66 |
) |
|
(50 |
) |
89 |
|
(139 |
) |
|
Total prepaid mobile phone subscribers 4,5 |
1,111 |
|
1,255 |
|
(144 |
) |
|
1,111 |
|
1,255 |
|
(144 |
) |
|
Churn (monthly) |
6.20 |
% |
5.90 |
% |
0.30 pts |
|
|
6.12 |
% |
4.90 |
% |
1.22 pts |
|
|
Mobile phone ARPU (monthly) 6 |
$57.96 |
|
$58.69 |
|
($0.73 |
) |
|
$57.86 |
|
$57.89 |
|
($0.03 |
) |
1 Subscriber counts and subscriber churn
are key performance indicators. See "Key Performance
Indicators".2 On April 3, 2023, we acquired approximately
501,000 Shaw Mobile postpaid mobile phone subscribers as a result
of our acquisition of Shaw, which are not included in net
additions. As at December 31, 2023, we had completed migrating
these subscribers to the Rogers network; there were 18,000
deactivated subscribers that could not be migrated and were
therefore removed from our postpaid mobile phone subscriber base
effective December 31, 2023.3 Effective April 1, 2023, we
adjusted our postpaid mobile phone subscriber base to remove 51,000
subscribers relating to a wholesale account.4 As at end of
period.5 Effective December 1, 2023, we adjusted our Wireless
prepaid subscriber base to remove 94,000 subscribers as a result of
a change to our deactivation policy from 90 days to 30
days.6 Mobile phone ARPU is a supplementary financial measure.
See "Non-GAAP and Other Financial Measures" for an explanation as
to the composition of this measure.
Service revenueThe 9% increase
in service revenue this quarter was primarily a result of:
- the cumulative impact of growth in
our mobile phone subscriber base over the past year; and
- the impact of the Shaw Mobile
subscribers acquired through the Shaw Transaction in April
2023.
The decrease in mobile phone ARPU this quarter
was primarily a result of the impact of the Shaw Mobile subscribers
acquired through the Shaw Transaction in April 2023.
The continued significant postpaid gross and net
additions this quarter were a result of sales execution in a
growing Canadian market.
Equipment revenueThe 17%
increase in equipment revenue this quarter was primarily as a
result of:
- an increase in new subscribers
purchasing devices; and
- a continued shift in the product
mix towards higher-value devices; partially offset by
- lower device upgrades by existing
customers.
Operating expensesCost of
equipmentThe 15% increase in the cost of equipment this quarter was
a result of the equipment revenue changes discussed above.
Other operating expensesThe 9% increase in other operating
expenses this quarter was primarily a result of:
- higher costs associated with the
increased revenue and subscriber additions including commissions
and costs associated with our expanded network; and
- investments made in customer
service.
Adjusted EBITDA The 10%
increase in adjusted EBITDA this quarter was a result of the
revenue and expense changes discussed above.
CABLE
Cable Financial Results
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
(In millions of dollars, except margins) |
2023 |
|
2022 |
|
% Chg |
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
| Revenue |
|
|
|
|
|
|
|
|
Service revenue |
1,965 |
|
1,011 |
|
94 |
|
6,962 |
|
4,046 |
|
72 |
|
Equipment revenue |
17 |
|
8 |
|
113 |
|
43 |
|
25 |
|
72 |
|
Revenue |
1,982 |
|
1,019 |
|
95 |
|
7,005 |
|
4,071 |
|
72 |
| |
|
|
|
|
|
|
|
|
Operating expenses |
871 |
|
497 |
|
75 |
|
3,231 |
|
2,013 |
|
61 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
1,111 |
|
522 |
|
113 |
|
3,774 |
|
2,058 |
|
83 |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA margin |
56.1 |
% |
51.2 |
% |
4.9 pts |
|
53.9 |
% |
50.6 |
% |
3.3 pts |
|
Capital expenditures |
448 |
|
235 |
|
91 |
|
1,865 |
|
1,019 |
|
83 |
Cable Subscriber Results 1
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In thousands, except ARPA and penetration) |
2023 |
|
2022 |
|
Chg |
|
|
2023 |
|
2022 |
|
Chg |
|
|
|
|
|
|
|
|
|
|
| Homes passed 2,3,4,5 |
9,943 |
|
4,804 |
|
5,139 |
|
|
9,943 |
|
4,804 |
|
5,139 |
|
| Customer relationships |
|
|
|
|
|
|
|
|
Net (losses) additions |
(1 |
) |
(6 |
) |
5 |
|
|
(2 |
) |
6 |
|
(8 |
) |
|
Total customer relationships 2,3,4.5 |
4,636 |
|
2,590 |
|
2,046 |
|
|
4,636 |
|
2,590 |
|
2,046 |
|
| ARPA (monthly) 6 |
$141.96 |
|
$129.92 |
|
$12.04 |
|
|
$142.58 |
|
$130.12 |
|
$12.46 |
|
| |
|
|
|
|
|
|
|
|
Penetration 2 |
46.6 |
% |
53.9 |
% |
(7.3 pts |
) |
|
46.6 |
% |
53.9 |
% |
(7.3 pts |
) |
|
|
|
|
|
|
|
|
|
| Retail Internet |
|
|
|
|
|
|
|
|
Net additions |
20 |
|
7 |
|
13 |
|
|
77 |
|
52 |
|
25 |
|
|
Total retail Internet subscribers 2,3,4,5 |
4,162 |
|
2,284 |
|
1,878 |
|
|
4,162 |
|
2,284 |
|
1,878 |
|
| Video |
|
|
|
|
|
|
|
|
Net (losses) additions |
(12 |
) |
(10 |
) |
(2 |
) |
|
15 |
|
32 |
|
(17 |
) |
|
Total Video subscribers 2,3,4 |
2,751 |
|
1,525 |
|
1,226 |
|
|
2,751 |
|
1,525 |
|
1,226 |
|
| Smart Home Monitoring |
|
|
|
|
|
|
|
|
Net losses |
(1 |
) |
(1 |
) |
— |
|
|
(12 |
) |
(12 |
) |
— |
|
|
Total Smart Home Monitoring subscribers 2 |
89 |
|
101 |
|
(12 |
) |
|
89 |
|
101 |
|
(12 |
) |
| Home Phone |
|
|
|
|
|
|
|
|
Net losses |
(38 |
) |
(18 |
) |
(20 |
) |
|
(116 |
) |
(76 |
) |
(40 |
) |
|
Total Home Phone subscribers 2,3,4 |
1,629 |
|
836 |
|
793 |
|
|
1,629 |
|
836 |
|
793 |
|
1 Subscriber results are key performance
indicators. See "Key Performance Indicators".2 As at end of
period.3 On April 3, 2023, we acquired approximately 1,961,000
retail Internet subscribers, 1,203,000 Video subscribers, 890,000
Home Phone subscribers, 4,935,000 homes passed, and 2,191,000
customer relationships as a result of the Shaw Transaction, which
are not included in net additions, but do appear in the ending
total balances for December 31, 2023. The acquired Satellite
subscribers are not included in our reported subscriber, homes
passed, or customer relationship metrics. 4 On November 1, 2023, we
acquired approximately 22,000 retail Internet subscribers, 8,000
Video subscribers, 19,000 Home Phone subscribers, 8,000 homes
passed, and 30,000 customer relationships as a result of our
acquisition of a Cable services reseller. None of these subscribers
are included in net additions.5 Effective October 1, 2023, and
on a prospective basis, we reduced our retail Internet subscriber
base by 182,000 and our customer relationships by 173,000 to remove
Fido Internet subscribers as we stopped selling new plans for this
service as of that date. Given this, we believe this adjustment
more meaningfully reflects the underlying organic subscriber
performance of our retail Internet business.6 ARPA is a
supplementary financial measure. See "Non-GAAP and Other Financial
Measures" for an explanation as to the composition of this
measure.
Service revenue The 94%
increase in service revenue this quarter was a result of:
- revenue related to our acquisition
of Shaw, which contributed approximately $1 billion for the
quarter; and
- an increase in our retail Internet
subscriber base and the movement of retail Internet customers to
higher speed tiers in our Ignite Internet offerings; partially
offset by:
- continued increased competitive
promotional activity; and
- declines in our Home Phone, Smart
Home Monitoring, and Satellite subscriber bases.
The higher ARPA this quarter was primarily a
result of the acquisition of Shaw.
Operating expenses The 75%
increase in operating expenses this quarter was primarily a result
of:
- our acquisition of Shaw, partially
offset by the realization of cost synergies associated with
integration activities; and
- investments in customer
service.
Adjusted EBITDA The 113%
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 December 31 |
|
|
Twelve months ended December 31 |
|
(In millions of dollars, except margins) |
2023 |
|
2022 |
|
% Chg |
|
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
| Revenue |
558 |
|
606 |
|
(8 |
) |
|
2,335 |
|
2,277 |
|
3 |
|
Operating expenses |
554 |
|
549 |
|
1 |
|
|
2,258 |
|
2,208 |
|
2 |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
4 |
|
57 |
|
(93 |
) |
|
77 |
|
69 |
|
12 |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA margin |
0.7 |
% |
9.4 |
% |
(8.7 pts |
) |
|
3.3 |
% |
3.0 |
% |
0.3 pts |
|
Capital expenditures |
113 |
|
73 |
|
55 |
|
|
250 |
|
142 |
|
76 |
RevenueThe 8% decrease in
revenue this quarter was a result of:
- lower sports-related revenue
associated with the impact of a distribution from Major League
Baseball in 2022; partially offset by
- higher advertising and subscriber
revenue.
Operating expensesThe 1%
increase in operating expenses this quarter was a result of higher
programming costs.
Adjusted EBITDAThe decrease in
adjusted EBITDA this quarter was a result of the revenue and
expense changes discussed above.
CAPITAL EXPENDITURES
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars, except capital intensity) |
2023 |
|
2022 |
|
% Chg |
|
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
| Wireless |
334 |
|
421 |
|
(21 |
) |
|
1,625 |
|
1,758 |
|
(8 |
) |
| Cable |
448 |
|
235 |
|
91 |
|
|
1,865 |
|
1,019 |
|
83 |
|
| Media |
113 |
|
73 |
|
55 |
|
|
250 |
|
142 |
|
76 |
|
|
Corporate |
51 |
|
47 |
|
9 |
|
|
194 |
|
156 |
|
24 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures 1 |
946 |
|
776 |
|
22 |
|
|
3,934 |
|
3,075 |
|
28 |
|
|
|
|
|
|
|
|
|
|
|
Capital intensity 2 |
17.7 |
% |
18.6 |
% |
(0.9 pts |
) |
|
20.4 |
% |
20.0 |
% |
0.4 pts |
|
1 Includes additions to property, plant and
equipment net of proceeds on disposition, but does not include
expenditures for spectrum licences, additions to right-of-use
assets, or assets acquired through business
combinations.2 Capital intensity is a supplementary financial
measure. See "Non-GAAP and Other Financial Measures" for an
explanation as to the composition of this measure.
One of our objectives is to build the biggest
and best networks in the country. As we continually work towards
this, we spent more on our wireless and wireline networks this year
than we have in the past several years. This year, we continued to
roll out our 5G network (the largest 5G network in Canada as at
December 31, 2023) across the country, and continued with our
commitment to expand coverage across Western Canada and in the TTC
subway system. We also continued to invest in fibre deployments,
including fibre-to-the-home (FTTH), in our cable network and we
expanded our network footprint to reach more homes and businesses,
including in rural, remote, and Indigenous communities. We
continued strengthening the resilience of our networks and made
significant investments to strengthen our technology systems,
increase network stability for our customers, and enhance our
testing.
These investments will strengthen network
resilience and stability and will help us bridge the digital divide
by expanding our network further into rural and underserved areas
through participation in various programs and projects.
WirelessThe decrease in capital
expenditures in Wireless this quarter was due to the timing of
investments. We continue to make investments in our network
development and 5G deployment to expand our wireless network. The
ongoing deployment of 3500 MHz spectrum continues to augment the
capacity and resilience of our earlier 5G deployments in the 600
MHz spectrum band.
CableThe increase in capital
expenditures in Cable this quarter reflects our acquisition of Shaw
and continued investments in our infrastructure, including
additional fibre deployments to increase our FTTH distribution.
These investments incorporate the latest technologies to help
deliver more bandwidth and an enhanced 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, offering increased network resilience, stability, and
faster download speeds over time.
MediaThe increase in capital
expenditures in Media this quarter was primarily a result of higher
Toronto Blue Jays stadium infrastructure-related expenditures
associated with the second phase of the Rogers Centre modernization
project.
Capital intensityCapital
intensity decreased in the quarter as the increase in capital
expenditure investments, as noted above, was offset by higher
revenue.
Review of Consolidated Performance
This section discusses our consolidated net
income and other income and expenses that do not form part of the
segment discussions above.
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
% Chg |
|
|
2023 |
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
2,329 |
|
1,679 |
|
39 |
|
|
8,581 |
6,393 |
|
34 |
|
| Deduct (add): |
|
|
|
|
|
|
|
|
Depreciation and amortization |
1,172 |
|
648 |
|
81 |
|
|
4,121 |
2,576 |
|
60 |
|
|
Restructuring, acquisition and other |
86 |
|
58 |
|
48 |
|
|
685 |
310 |
|
121 |
|
|
Finance costs |
568 |
|
287 |
|
98 |
|
|
2,047 |
1,233 |
|
66 |
|
|
Other (income) expense |
(19 |
) |
(10 |
) |
90 |
|
|
362 |
(15 |
) |
n/m |
|
|
Income tax expense |
194 |
|
188 |
|
3 |
|
|
517 |
609 |
|
(15 |
) |
|
|
|
|
|
|
|
|
|
|
Net income |
328 |
|
508 |
|
(35 |
) |
|
849 |
1,680 |
|
(49 |
) |
n/m - not meaningful
Depreciation and
amortization
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
(In millions of dollars) |
2023 |
2022 |
% Chg |
|
2023 |
2022 |
% Chg |
|
|
|
|
|
|
|
|
|
| Depreciation of property, plant
and equipment |
938 |
572 |
64 |
|
3,331 |
2,281 |
46 |
| Depreciation of right-of-use
assets |
107 |
72 |
49 |
|
371 |
274 |
35 |
|
Amortization |
127 |
4 |
n/m |
|
419 |
21 |
n/m |
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization |
1,172 |
648 |
81 |
|
4,121 |
2,576 |
60 |
Total depreciation and amortization increased
this quarter, primarily as a result of the property, plant and
equipment, right-of-use assets, and customer relationship
intangible assets acquired through the Shaw Transaction.
Restructuring, acquisition and
other
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
(In millions of dollars) |
2023 |
2022 |
|
2023 |
2022 |
|
|
|
|
|
|
|
| Restructuring and other |
25 |
11 |
|
365 |
118 |
|
Shaw Transaction-related costs |
61 |
47 |
|
320 |
192 |
|
|
|
|
|
|
|
|
Total restructuring, acquisition and other |
86 |
58 |
|
685 |
310 |
The Shaw Transaction-related costs in 2022 and
2023 consisted of incremental costs supporting acquisition and
integration activities related to the Shaw Transaction.
The restructuring and other costs in the fourth
quarters of 2022 and 2023 included severance-related costs
associated with the targeted restructuring of our employee base. In
2023, we also incurred costs related to real estate rationalization
programs.
Finance costs
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
% Chg |
|
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
| Total interest on borrowings
1 |
531 |
|
381 |
|
39 |
|
|
1,981 |
|
1,354 |
|
46 |
|
|
Interest earned on restricted cash and cash equivalents |
— |
|
(130 |
) |
(100 |
) |
|
(149 |
) |
(235 |
) |
(37 |
) |
|
|
|
|
|
|
|
|
|
| Interest on borrowings, net |
531 |
|
251 |
|
112 |
|
|
1,832 |
|
1,119 |
|
64 |
|
| Interest on lease
liabilities |
31 |
|
22 |
|
41 |
|
|
111 |
|
80 |
|
39 |
|
| Interest on post-employment
benefits |
(3 |
) |
— |
|
— |
|
|
(13 |
) |
(1 |
) |
n/m |
|
| (Gain) loss on foreign
exchange |
(127 |
) |
(19 |
) |
n/m |
|
|
(111 |
) |
127 |
|
n/m |
|
| Change in fair value of
derivative instruments |
111 |
|
16 |
|
n/m |
|
|
108 |
|
(126 |
) |
n/m |
|
| Capitalized interest |
(10 |
) |
(8 |
) |
25 |
|
|
(38 |
) |
(29 |
) |
31 |
|
|
Deferred transaction costs and other |
35 |
|
25 |
|
40 |
|
|
158 |
|
63 |
|
151 |
|
|
|
|
|
|
|
|
|
|
|
Total finance costs |
568 |
|
287 |
|
98 |
|
|
2,047 |
|
1,233 |
|
66 |
|
1 Interest on borrowings includes interest
on short-term borrowings and on long-term debt.
Interest on borrowings, netThe 112% increase in net interest on
borrowings this quarter was primarily a result of:
- a reduction in interest earned on
restricted cash and cash equivalents, as we used these funds to
partially fund the Shaw Transaction;
- interest expense associated with
the borrowings under the term loan facility used to partially fund
the Shaw Transaction;
- interest expense associated with
the long-term debt assumed through the Shaw Transaction; and
- interest expense associated with
the $3 billion senior note issuance in September 2023; partially
offset by
- the repayment at maturity of our
US$850 million senior notes in November 2023 and US$500 million
senior notes in March 2023.
Deferred transaction costs and otherThe increase
in "deferred transaction costs and other" this quarter is primarily
a result of the amortization of the $262 million of consent fees
paid in January 2023 to extend the special mandatory redemption
outside date for the SMR notes issued in March 2022.
Income tax expense
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars, except tax rates) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
| Statutory income tax rate |
26.2 |
% |
26.5 |
% |
|
26.2 |
% |
26.5 |
% |
|
Income before income tax expense |
522 |
|
696 |
|
|
1,366 |
|
2,289 |
|
|
Computed income tax expense |
137 |
|
184 |
|
|
358 |
|
607 |
|
| Increase (decrease) in income tax
expense resulting from: |
|
|
|
|
|
|
Non-deductible stock-based compensation |
11 |
|
9 |
|
|
9 |
|
10 |
|
|
Non-deductible (taxable) portion of equity losses (income) |
1 |
|
1 |
|
|
(1 |
) |
9 |
|
|
Revaluation of deferred tax balances due to corporate
reorganization-driven change in income tax rate |
52 |
|
— |
|
|
52 |
|
— |
|
|
Non-taxable portion of capital gains |
(1 |
) |
(5 |
) |
|
(1 |
) |
(5 |
) |
|
Non-taxable income from security investments |
(6 |
) |
(3 |
) |
|
(16 |
) |
(12 |
) |
|
Non-deductible loss on joint venture's non-controlling interest
purchase obligation |
— |
|
— |
|
|
111 |
|
— |
|
|
Other items |
— |
|
2 |
|
|
5 |
|
— |
|
|
|
|
|
|
|
|
|
Total income tax expense |
194 |
|
188 |
|
|
517 |
|
609 |
|
|
|
|
|
|
|
|
| Effective income tax rate |
37.2 |
% |
27.0 |
% |
|
37.8 |
% |
26.6 |
% |
|
Cash income taxes paid |
39 |
|
25 |
|
|
439 |
|
455 |
|
Cash income taxes paid increased this quarter
due to the timing of installment payments. The decrease in our
statutory income tax rate this quarter was a result of a greater
portion of our income being earned in provinces with lower income
tax rates.
Net income
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars, except per share amounts) |
2023 |
2022 |
% Chg |
|
|
2023 |
2022 |
% Chg |
|
|
|
|
|
|
|
|
|
|
| Net income |
328 |
508 |
(35 |
) |
|
849 |
1,680 |
(49 |
) |
| Basic earnings per share |
$0.62 |
$1.01 |
(39 |
) |
|
$1.62 |
$3.33 |
(51 |
) |
|
Diluted earnings per share |
$0.62 |
$1.00 |
(38 |
) |
|
$1.62 |
$3.32 |
(51 |
) |
Adjusted net incomeWe calculate
adjusted net income from adjusted EBITDA as follows:
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
(In millions of dollars, except per share amounts) |
2023 |
|
2022 |
|
% Chg |
|
2023 |
|
2022 |
|
% Chg |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
2,329 |
|
1,679 |
|
39 |
|
8,581 |
|
6,393 |
|
34 |
| Deduct: |
|
|
|
|
|
|
|
|
Depreciation and amortization 1 |
923 |
|
648 |
|
42 |
|
3,357 |
|
2,576 |
|
30 |
|
Finance costs |
568 |
|
287 |
|
98 |
|
2,047 |
|
1,233 |
|
66 |
|
Other income 2 |
(19 |
) |
(10 |
) |
90 |
|
(60 |
) |
(15 |
) |
n/m |
|
Income tax expense 3 |
227 |
|
200 |
|
14 |
|
831 |
|
684 |
|
21 |
|
|
|
|
|
|
|
|
|
|
Adjusted net income 1 |
630 |
|
554 |
|
14 |
|
2,406 |
|
1,915 |
|
26 |
|
|
|
|
|
|
|
|
|
| Adjusted basic earnings per
share |
$1.19 |
|
$1.10 |
|
8 |
|
$4.60 |
|
$3.79 |
|
21 |
|
Adjusted diluted earnings per share |
$1.19 |
|
$1.09 |
|
9 |
|
$4.59 |
|
$3.78 |
|
21 |
1 Effective the second quarter, we
retrospectively amended our calculation of adjusted net income to
exclude depreciation and amortization on the fair value increment
recognized on acquisition of Shaw Transaction-related property,
plant and equipment and intangible assets. For purposes of
calculating adjusted net income, we believe the magnitude of this
depreciation and amortization, which is significantly affected by
the size of the Shaw Transaction, affects comparability between
periods and the additional expense recognized may have no
correlation to our current and ongoing operating results.
Depreciation and amortization excludes depreciation and
amortization on Shaw Transaction-related property, plant and
equipment and intangible assets for the three and twelve months
ended December 31, 2023 of $249 million and $764 million (2022
- nil), respectively. Adjusted net income includes depreciation and
amortization on the acquired Shaw property, plant and equipment and
intangible assets based on Shaw's historical cost and depreciation
policies.2 Other income for the twelve months ended December 31,
2023 excludes a $422 million loss related to one of our joint
venture's obligations to purchase at fair value the non-controlling
interest in one of its investments. 3 Income tax expense excludes
recoveries of $85 million and $366 million (2022 - recoveries of
$12 million and $75 million) for the three and twelve months ended
December 31, 2023, respectively, related to the income tax
impact for adjusted items and it also excludes a $52 million
expense (2022 - nil) for the three and twelve months ended December
31, 2023 due to a revaluation of deferred tax balances resulting
from a change in our income tax rate.
Managing our Liquidity and Financial
Resources
Operating, investing, and financing
activities
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
Cash provided by operating activities before changes in net
operating assets and liabilities, income taxes paid, and interest
paid |
2,243 |
|
1,658 |
|
|
8,067 |
|
6,154 |
|
|
Change in net operating assets and liabilities |
(369 |
) |
(201 |
) |
|
(627 |
) |
(152 |
) |
|
Income taxes paid |
(39 |
) |
(25 |
) |
|
(439 |
) |
(455 |
) |
|
Interest paid, net |
(456 |
) |
(287 |
) |
|
(1,780 |
) |
(1,054 |
) |
|
|
|
|
|
|
|
| Cash provided by operating
activities |
1,379 |
|
1,145 |
|
|
5,221 |
|
4,493 |
|
|
|
|
|
|
|
|
| Investing activities: |
|
|
|
|
|
|
Capital expenditures |
(946 |
) |
(776 |
) |
|
(3,934 |
) |
(3,075 |
) |
|
Additions to program rights |
(17 |
) |
(8 |
) |
|
(74 |
) |
(47 |
) |
|
Changes in non-cash working capital related to capital expenditures
and intangible assets |
(68 |
) |
(222 |
) |
|
(2 |
) |
(200 |
) |
|
Acquisitions and other strategic transactions, net of cash
acquired |
786 |
|
— |
|
|
(16,215 |
) |
(9 |
) |
|
Other |
21 |
|
(5 |
) |
|
25 |
|
68 |
|
|
|
|
|
|
|
|
|
Cash used in investing activities |
(224 |
) |
(1,011 |
) |
|
(20,200 |
) |
(3,263 |
) |
|
|
|
|
|
|
|
| Financing activities: |
|
|
|
|
|
|
Net (repayment of) proceeds received from short-term
borrowings |
(96 |
) |
(38 |
) |
|
(1,439 |
) |
707 |
|
|
Net (repayment) issuance of long-term debt |
(2,749 |
) |
— |
|
|
5,040 |
|
12,711 |
|
|
Net proceeds (payments) on settlement of debt derivatives and
forward contracts |
260 |
|
16 |
|
|
492 |
|
(11 |
) |
|
Transaction costs incurred |
— |
|
— |
|
|
(284 |
) |
(726 |
) |
|
Principal payments of lease liabilities |
(106 |
) |
(83 |
) |
|
(370 |
) |
(316 |
) |
|
Dividends paid |
(191 |
) |
(253 |
) |
|
(960 |
) |
(1,010 |
) |
|
|
|
|
|
|
|
|
Cash (used in) provided by financing activities |
(2,882 |
) |
(358 |
) |
|
2,479 |
|
11,355 |
|
|
|
|
|
|
|
|
| Change in cash and cash
equivalents and restricted cash and cash equivalents |
(1,727 |
) |
(224 |
) |
|
(12,500 |
) |
12,585 |
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
beginning of period |
2,527 |
|
13,524 |
|
|
13,300 |
|
715 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
end of period |
800 |
|
13,300 |
|
|
800 |
|
13,300 |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
800 |
|
463 |
|
|
800 |
|
463 |
|
|
Restricted cash and cash equivalents |
— |
|
12,837 |
|
|
— |
|
12,837 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
end of period |
800 |
|
13,300 |
|
|
800 |
|
13,300 |
|
Operating activitiesThis
quarter, cash from operating activities increased primarily as a
result of higher adjusted EBITDA, partially offset by higher
interest paid.
Investing activitiesCapital
expendituresDuring the quarter we incurred $946 million on capital
expenditures before changes in non-cash working capital items. See
"Capital Expenditures" for more information.
Acquisitions and other strategic transactionsIn
December 2023, we sold our investment interests in Cogeco Inc. and
Cogeco Communications Inc. for $829 million to Caisse de dépôt et
placement du Québec in a private transaction. We subsequently used
the cash received to repay a portion of our outstanding term loan
facility (see "Long-term debt" below).
We also acquired a small Cable services reseller
this quarter.
Financing activitiesDuring the
quarter we paid net amounts of $2,585 million (2022 - paid $22
million) on our short-term borrowings, long-term debt, and related
derivatives. See "Financial Risk Management" for more information
on the cash flows relating to our derivative instruments.
Short-term borrowingsOur short-term borrowings
consist of amounts outstanding under our receivables securitization
program, our US CP program, and our short-term non-revolving credit
facilities. Below is a summary of our short-term borrowings as at
December 31, 2023 and December 31, 2022.
|
|
As atDecember 31 |
As atDecember 31 |
| (In
millions of dollars) |
2023 |
2022 |
|
|
|
|
| Receivables securitization
program |
1,600 |
2,400 |
| US commercial paper program
(net of the discount on issuance) |
150 |
214 |
|
Non-revolving credit facility borrowings (net of the discount on
issuance) |
— |
371 |
|
|
|
|
|
Total short-term borrowings |
1,750 |
2,985 |
The tables below summarize the activity relating
to our short-term borrowings for the three and twelve months ended
December 31, 2023 and 2022.
|
|
Three months endedDecember 31, 2023 |
|
|
Twelve months endedDecember 31, 2023 |
|
| (In
millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
|
|
Repayment of receivables securitization |
|
|
— |
|
|
|
|
(1,000 |
) |
|
Net repayment of receivables securitization |
|
|
— |
|
|
|
|
(1,000 |
) |
|
|
|
|
|
|
|
|
|
|
Proceeds received from US commercial paper |
306 |
|
1.373 |
420 |
|
|
1,803 |
|
1.357 |
2,447 |
|
|
Repayment of US commercial paper |
(194 |
) |
1.361 |
(264 |
) |
|
(1,858 |
) |
1.345 |
(2,499 |
) |
|
Net proceeds received from (repayment of) US commercial paper |
|
|
156 |
|
|
|
|
(52 |
) |
|
|
|
|
|
|
|
|
|
| Proceeds received from
non-revolving credit facilities (Cdn$) 1 |
|
|
— |
|
|
|
|
375 |
|
|
Proceeds received from non-revolving credit facilities (US$) 1 |
— |
|
— |
— |
|
|
2,125 |
|
1.349 |
2,866 |
|
|
Total proceeds received from non-revolving credit facilities |
|
|
— |
|
|
|
|
3,241 |
|
|
|
|
|
|
|
|
|
|
| Repayment of non-revolving
credit facilities (Cdn$) 1 |
|
|
— |
|
|
|
|
(758 |
) |
|
Repayment of non-revolving credit facilities (US$) 1 |
(183 |
) |
1.377 |
(252 |
) |
|
(2,125 |
) |
1.351 |
(2,870 |
) |
|
Total repayment of non-revolving credit facilities |
|
|
(252 |
) |
|
|
|
(3,628 |
) |
|
|
|
|
|
|
|
|
|
|
Net repayment of non-revolving credit facilities |
|
|
(252 |
) |
|
|
|
(387 |
) |
|
|
|
|
|
|
|
|
|
|
Net repayment of short-term borrowings |
|
|
(96 |
) |
|
|
|
(1,439 |
) |
1 Borrowings under our non-revolving facility
mature and are reissued regularly, such that until repaid, we
maintain net outstanding borrowings equivalent to the then-current
credit limit on the reissue dates.
|
|
Three months endedDecember 31, 2022 |
|
|
Twelve months endedDecember 31, 2022 |
|
| (In
millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
|
| Proceeds received from
receivables securitization |
|
|
400 |
|
|
|
|
1,600 |
|
|
Net proceeds received from receivables securitization |
|
|
400 |
|
|
|
|
1,600 |
|
|
|
|
|
|
|
|
|
|
|
Proceeds received from US commercial paper |
1,450 |
|
1.354 |
1,963 |
|
|
6,745 |
|
1.302 |
8,781 |
|
|
Repayment of US commercial paper |
(2,038 |
) |
1.360 |
(2,771 |
) |
|
(7,303 |
) |
1.306 |
(9,537 |
) |
|
Net repayment of US commercial paper |
|
|
(808 |
) |
|
|
|
(756 |
) |
|
|
|
|
|
|
|
|
|
| Proceeds received from
non-revolving credit facilities (Cdn$) |
|
|
370 |
|
|
|
|
865 |
|
|
Total proceeds received from non-revolving credit facilities |
|
|
370 |
|
|
|
|
865 |
|
|
|
|
|
|
|
|
|
|
| Repayment of non-revolving
credit facilities (Cdn$) |
|
|
— |
|
|
|
|
(495 |
) |
|
Repayment of non-revolving credit facilities (US$) |
— |
|
— |
— |
|
|
(400 |
) |
1.268 |
(507 |
) |
|
Total repayment of non-revolving credit facilities |
|
|
— |
|
|
|
|
(1,002 |
) |
|
|
|
|
|
|
|
|
|
|
Net proceeds received from (repayment of) non-revolving credit
facilities |
|
|
370 |
|
|
|
|
(137 |
) |
|
|
|
|
|
|
|
|
|
|
Net (repayment of) proceeds received from short-term
borrowings |
|
|
(38 |
) |
|
|
|
707 |
|
Concurrent with our US CP issuances, we entered
into debt derivatives to hedge the foreign currency risk associated
with the principal and interest components of the borrowings. See
"Financial Risk Management" for more information.
In April 2023, we repaid the outstanding $200
million of borrowings under Shaw's legacy accounts receivable
securitization program, subsequent to which the program was
terminated. This repayment is included in "repayment of receivables
securitization" above.
In November 2023, we entered into three
non-revolving credit facilities with an aggregate limit of $2
billion. In December 2023, we terminated two of these credit
facilities and reduced the amount available from $2 billion to $500
million. The remaining facility can be drawn until June 2024 and
will mature one year after we draw. Any drawings on this facility
will be recognized as short-term borrowings on our consolidated
statement of financial position. Borrowings under this facility
will be unsecured, guaranteed by RCCI, and will rank equally in
right of payment with all of our other credit facilities and senior
notes and debentures. We have not yet drawn on this facility.
In December 2022, we entered into non-revolving
credit facilities with an aggregate limit of $1 billion,
including $375 million maturing in December 2023,
$375 million maturing in January 2024, and $250 million
maturing one year from when it was drawn. Any borrowings under
these facilities were recorded as "short-term borrowings" as they
were due within 12 months. Borrowings under the facilities were
unsecured, guaranteed by RCCI, and ranked equally in right of
payment with all of our other credit facilities and senior notes
and debentures. These facilities were repaid and terminated
throughout 2023.
Long-term debtOur long-term debt consists of
amounts outstanding under our bank and letter of credit facilities
and the senior notes, debentures, and subordinated notes we have
issued. The tables below summarize the activity relating to our
long-term debt for the three and twelve months ended
December 31, 2023 and 2022.
|
|
Three months endedDecember 31, 2023 |
|
|
Twelve months endedDecember 31, 2023 |
|
| (In
millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
|
|
Credit facility borrowings (US$) |
— |
|
— |
— |
|
|
220 |
|
1.368 |
301 |
|
| Credit facility repayments
(US$) |
— |
|
— |
— |
|
|
(220 |
) |
1.336 |
(294 |
) |
|
Net borrowings under credit facilities |
|
|
— |
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
| Term loan facility net
borrowings (US$) 1 |
— |
|
— |
— |
|
|
4,506 |
|
1.350 |
6,082 |
|
| Term
loan facility net repayments (US$) |
(811 |
) |
1.337 |
(1,084 |
) |
|
(1,265 |
) |
1.340 |
(1,695 |
) |
|
Net (repayments) borrowings under term loan facility |
|
|
(1,084 |
) |
|
|
|
4,387 |
|
|
|
|
|
|
|
|
|
|
| Senior note issuances
(Cdn$) |
|
|
— |
|
|
|
|
3,000 |
|
| |
|
|
|
|
|
|
|
| Senior note repayments
(Cdn$) |
|
|
(500 |
) |
|
|
|
(500 |
) |
| Senior
note repayments (US$) |
(850 |
) |
1.371 |
(1,165 |
) |
|
(1,350 |
) |
1.373 |
(1,854 |
) |
|
Total senior notes repayments |
|
|
(1,665 |
) |
|
|
|
(2,354 |
) |
|
|
|
|
|
|
|
|
|
| Net (repayment) issuance of
senior notes |
|
|
(1,665 |
) |
|
|
|
646 |
|
|
|
|
|
|
|
|
|
|
| Net
(repayment) issuance of long-term debt |
|
|
(2,749 |
) |
|
|
|
5,040 |
|
1 Borrowings under our term loan facility
mature and are reissued regularly, such that until repaid, we
maintain net outstanding borrowings equivalent to the then-current
credit limit on the reissue dates.
|
|
Three months endedDecember 31, 2022 |
|
Twelve months endedDecember 31, 2022 |
|
| (In
millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
|
| Senior note issuances
(Cdn$) |
|
|
— |
|
|
|
4,250 |
|
|
Senior note issuances (US$) |
— |
— |
— |
|
7,050 |
|
1.284 |
9,054 |
|
|
Total issuances of senior notes |
|
|
— |
|
|
|
13,304 |
|
|
|
|
|
|
|
|
|
|
| Senior note repayments
(Cdn$) |
|
|
— |
|
|
|
(600 |
) |
| Senior
note repayments (US$) |
— |
— |
— |
|
(750 |
) |
1.259 |
(944 |
) |
|
Total senior notes repayments |
|
|
— |
|
|
|
(1,544 |
) |
|
|
|
|
|
|
|
|
|
| Net
issuance of senior notes |
|
|
— |
|
|
|
11,760 |
|
|
|
|
|
|
|
|
|
|
| Subordinated note issuances
(US$) |
— |
— |
— |
|
750 |
|
1.268 |
951 |
|
|
|
|
|
|
|
|
|
|
| Net
issuance of long-term debt |
|
|
— |
|
|
|
12,711 |
|
|
|
Three months ended December 31 |
|
|
Twelve months endedDecember 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
| Long-term debt net of
transaction costs, beginning of period |
44,094 |
|
32,235 |
|
|
31,733 |
|
18,688 |
|
| Net (repayment) issuance of
long-term debt |
(2,749 |
) |
— |
|
|
5,040 |
|
12,711 |
|
| Long-term debt assumed through
the Shaw Transaction |
— |
|
— |
|
|
4,526 |
|
— |
|
| (Gain) loss on foreign
exchange |
(526 |
) |
(263 |
) |
|
(549 |
) |
1,271 |
|
| Deferred transaction costs
incurred |
— |
|
(262 |
) |
|
(31 |
) |
(988 |
) |
|
Amortization of deferred transaction costs |
36 |
|
23 |
|
|
136 |
|
51 |
|
|
|
|
|
|
|
|
|
Long-term debt net of transaction costs, end of period |
40,855 |
|
31,733 |
|
|
40,855 |
|
31,733 |
|
In April 2023, we drew the maximum $6 billion on
the term loan facility upon closing the Shaw Transaction,
consisting of $2 billion from each of the three tranches. The three
tranches mature on April 3, 2026, 2027, and 2028, respectively. In
September 2023, we repaid $500 million of the tranche maturing on
April 3, 2027. This quarter, we repaid an additional $1.1 billion
of the same tranche such that the term loan facility has been
reduced to $4.4 billion, of which $400 million remains outstanding
under the April 3, 2027 tranche.
Issuance of senior and subordinated notes and
related debt derivatives Below is a summary of the senior and
subordinated notes we issued during the three and twelve months
ended December 31, 2023 and 2022.
| (In millions
of dollars, except interest rates and discounts) |
|
Discount/premium atissuance |
|
Total grossproceeds 1(Cdn$) |
Transaction costs and discounts 2 (Cdn$) |
| Date
issued |
|
Principalamount |
Duedate |
Interestrate |
|
Uponissuance |
Uponmodification3 |
|
|
|
|
|
|
|
|
|
|
| 2023 issuances |
|
|
|
|
|
|
|
|
|
September 21, 2023 (senior) |
|
500 |
2026 |
5.650 |
% |
99.853 |
% |
500 |
3 |
n/a |
|
September 21, 2023 (senior) |
|
1,000 |
2028 |
5.700 |
% |
99.871 |
% |
1,000 |
8 |
n/a |
|
September 21, 2023 (senior) |
|
500 |
2030 |
5.800 |
% |
99.932 |
% |
500 |
4 |
n/a |
|
September 21, 2023 (senior) |
|
1,000 |
2033 |
5.900 |
% |
99.441 |
% |
1,000 |
12 |
n/a |
| |
|
|
|
|
|
|
|
|
| 2022 issuances |
|
|
|
|
|
|
|
|
|
February 11, 2022 (subordinated) 4 |
US |
750 |
2082 |
5.250 |
% |
At par |
|
951 |
13 |
n/a |
|
March 11, 2022 (senior) 5 |
US |
1,000 |
2025 |
2.950 |
% |
99.934 |
% |
1,283 |
9 |
50 |
|
March 11, 2022 (senior) |
|
1,250 |
2025 |
3.100 |
% |
99.924 |
% |
1,250 |
7 |
n/a |
|
March 11, 2022 (senior) |
US |
1,300 |
2027 |
3.200 |
% |
99.991 |
% |
1,674 |
13 |
82 |
|
March 11, 2022 (senior) |
|
1,000 |
2029 |
3.750 |
% |
99.891 |
% |
1,000 |
7 |
57 |
|
March 11, 2022 (senior) |
US |
2,000 |
2032 |
3.800 |
% |
99.777 |
% |
2,567 |
27 |
165 |
|
March 11, 2022 (senior) |
|
1,000 |
2032 |
4.250 |
% |
99.987 |
% |
1,000 |
6 |
58 |
|
March 11, 2022 (senior) |
US |
750 |
2042 |
4.500 |
% |
98.997 |
% |
966 |
20 |
95 |
|
March 11, 2022 (senior) |
US |
2,000 |
2052 |
4.550 |
% |
98.917 |
% |
2,564 |
55 |
250 |
|
March 11, 2022 (senior) |
|
1,000 |
2052 |
5.250 |
% |
99.483 |
% |
1,000 |
12 |
62 |
1 Gross proceeds before transaction costs,
discounts, and premiums.2 Transaction costs, discounts, and
premiums are included as deferred transaction costs and discounts
in the carrying value of the long-term debt, and recognized in net
(loss) income using the effective interest method.3 Accounted
for as a modification of the respective financial liabilities.
Reflects initial consent fee of $557 million incurred in September
2022 and additional consent fee of $262 million incurred in
December 2022.4 Deferred transaction costs and discounts (if
any) in the carrying value of the subordinated notes are recognized
in net income using the effective interest method over a five-year
period. The subordinated notes due 2082 can be redeemed at par on
March 15, 2027 or on any subsequent interest payment
date.5 The US$1 billion senior notes due 2025 can be redeemed
at par at any time.
Repayment of senior notes and related derivative
settlementsIn October 2023, we repaid the entire outstanding
principal of our US$850 million 4.10% senior notes and the
associated debt derivatives at maturity.
In November 2023, we repaid the entire
outstanding principal of our $500 million 3.80% senior notes at
maturity. There were no derivatives associated with these senior
notes.
In January 2024, we repaid the entire
outstanding principal of our $500 million 4.35% senior notes at
maturity. There were no derivatives associated with these senior
notes.
DividendsBelow is a summary of the dividends
declared and paid on RCI's outstanding Class A Voting common shares
(Class A Shares) and Class B Non-Voting common shares (Class B
Non-Voting Shares) in 2023 and 2022. On January 31, 2024, the Board
declared a quarterly dividend of $0.50 per Class A Voting Share and
Class B Non-Voting Share, to be paid on April 3, 2024, to
shareholders of record on March 11, 2024.
|
|
|
|
|
Dividends paid (in millions of dollars) |
|
Declaration date |
Record date |
Payment date |
Dividend
pershare (dollars) |
In cash |
In Class
BNon-VotingShares |
Total |
|
|
|
|
|
|
|
|
| February 1, 2023 |
March 10, 2023 |
April 3, 2023 |
0.50 |
252 |
— |
252 |
| April 25, 2023 |
June 9, 2023 |
July 5, 2023 |
0.50 |
264 |
— |
264 |
| July 25, 2023 |
September 8, 2023 |
October 3, 2023 |
0.50 |
191 |
74 |
265 |
| November 8, 2023 |
December 8, 2023 |
January 2, 2024 |
0.50 |
190 |
75 |
265 |
| |
|
|
|
|
|
— |
| January 26, 2022 |
March 10, 2022 |
April 1, 2022 |
0.50 |
252 |
— |
252 |
| April 19, 2022 |
June 10, 2022 |
July 4, 2022 |
0.50 |
253 |
— |
253 |
| July 26, 2022 |
September 9, 2022 |
October 3, 2022 |
0.50 |
253 |
— |
253 |
|
November 8, 2022 |
December 9, 2022 |
January
3, 2023 |
0.50 |
253 |
— |
253 |
In August 2023, we amended our dividend
reinvestment plan (DRIP) to (i) provide for a small discount on the
dividend reinvestment share price and (ii) allow for the issuance
of treasury shares for the settlement of the DRIP dividends.
Free cash flow
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
2022 |
% Chg |
|
2023 |
2022 |
% Chg |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
2,329 |
1,679 |
39 |
|
8,581 |
6,393 |
34 |
|
| Deduct: |
|
|
|
|
|
|
|
|
Capital expenditures 1 |
946 |
776 |
22 |
|
3,934 |
3,075 |
28 |
|
|
Interest on borrowings, net and capitalized interest |
521 |
243 |
114 |
|
1,794 |
1,090 |
65 |
|
|
Cash income taxes 2 |
39 |
25 |
56 |
|
439 |
455 |
(4 |
) |
|
|
|
|
|
|
|
|
|
| Free
cash flow |
823 |
635 |
30 |
|
2,414 |
1,773 |
36 |
|
1 Includes additions to property, plant and
equipment net of proceeds on disposition, but does not include
expenditures for spectrum licences, additions to right-of-use
assets, or assets acquired through business
combinations.2 Cash income taxes are net of refunds
received.
The increase in free cash flow this quarter was
primarily a result of higher adjusted EBITDA, partially offset by
higher interest on borrowings and higher capital expenditures.
Financial Condition
Available liquidityBelow is a
summary of our available liquidity from our cash and cash
equivalents, bank credit facilities, letter of credit facilities,
and short-term borrowings as at December 31, 2023 and December
31, 2022.
|
As at December 31, 2023 |
Total sources |
Drawn |
Letters of credit |
US CP program 1 |
Net available |
| (In
millions of dollars) |
|
|
|
|
|
|
|
| Cash and cash equivalents |
800 |
— |
— |
— |
800 |
| Bank credit facilities 2: |
|
|
|
|
|
|
Revolving |
4,000 |
— |
10 |
151 |
3,839 |
|
Non-revolving |
500 |
— |
— |
— |
500 |
|
Outstanding letters of credit |
243 |
— |
243 |
— |
— |
| Receivables securitization 2 |
2,400 |
1,600 |
— |
— |
800 |
|
|
|
|
|
|
|
|
Total |
7,943 |
1,600 |
253 |
151 |
5,939 |
1 The US CP program amounts are gross of the
discount on issuance.2 The total liquidity sources under our
bank credit facilities and receivables securitization represents
the total credit limits per the relevant agreements. The amount
drawn and letters of credit are currently outstanding under those
agreements.
|
As at December 31, 2022 |
Total sources |
Drawn |
Letters of credit |
US CP program 1 |
Net available |
| (In
millions of dollars) |
|
|
|
|
|
|
|
| Cash and cash equivalents |
463 |
— |
— |
— |
463 |
| Bank credit facilities 2: |
|
|
|
|
|
|
Revolving |
4,000 |
— |
8 |
215 |
3,777 |
|
Non-revolving |
1,000 |
375 |
— |
— |
625 |
|
Outstanding letters of credit |
75 |
— |
75 |
— |
— |
|
Receivables securitization 2 |
2,400 |
2,400 |
— |
— |
— |
|
|
|
|
|
|
|
|
Total 3 |
7,938 |
2,775 |
83 |
215 |
4,865 |
1 The US CP program amounts are gross of
the discount on issuance.2 The total liquidity sources under
our bank credit facilities and receivables securitization
represents the total credit limits per the relevant agreements. The
amount drawn and letters of credit are currently outstanding under
those agreements. The US CP program amount represents our currently
outstanding US CP borrowings that are backstopped by our revolving
credit facility.3 Our restricted cash and cash equivalents as
at December 31, 2022 are not included in available liquidity as the
funds were raised solely to fund a portion of the cash
consideration of the Shaw Transaction.
Our term loan facility that had an initial
credit limit of $6 billion related to the Shaw Transaction is not
included in available liquidity as we could only draw on that
facility to partially fund the Shaw Transaction and the facility is
now fully drawn. Our Canada Infrastructure Bank credit agreement is
not included in available liquidity as it can only be drawn upon
for use in broadband projects under the Universal Broadband Fund,
and therefore is not available for other general purposes.
Weighted average cost of borrowingsOur weighted
average cost of all borrowings was 4.85% as at December 31,
2023 (December 31, 2022 - 4.50%) and our weighted average term
to maturity was 10.4 years (December 31, 2022 - 11.8 years).
These figures reflect the expected repayment of our subordinated
notes on the five-year anniversary.
Adjusted net debt and debt leverage
ratioWe use adjusted net debt and debt leverage ratio to
conduct valuation-related analysis and to make capital
structure-related decisions.
|
|
As atDecember 31 |
|
As atDecember 31 |
|
| (In
millions of dollars, except ratios) |
2023 |
|
2022 |
|
|
|
|
|
| Current portion of long-term
debt |
1,100 |
|
1,828 |
|
| Long-term debt |
39,755 |
|
29,905 |
|
|
Deferred transaction costs and discounts |
1,040 |
|
1,122 |
|
|
|
41,895 |
|
32,855 |
|
| Add (deduct): |
|
|
|
Adjustment of US dollar-denominated debt to hedged rate 1 |
(808 |
) |
(1,876 |
) |
|
Subordinated notes adjustment 2 |
(1,496 |
) |
(1,508 |
) |
|
Short-term borrowings |
1,750 |
|
2,985 |
|
|
Current portion of lease liabilities |
504 |
|
362 |
|
|
Lease liabilities |
2,089 |
|
1,666 |
|
|
Cash and cash equivalents |
(800 |
) |
(463 |
) |
|
Restricted cash and cash equivalents 3 |
— |
|
(12,837 |
) |
|
|
|
|
| Adjusted net debt 1,4 |
43,134 |
|
21,184 |
|
| Divided
by: trailing 12-month adjusted EBITDA |
8,581 |
|
6,393 |
|
|
|
|
|
| Debt
leverage ratio |
5.0 |
|
3.3 |
|
|
|
|
|
|
Divided by: pro forma trailing 12-month adjusted EBITDA 4 |
9,095 |
|
|
|
|
|
|
|
Pro forma debt leverage ratio |
4.7 |
|
|
1 Effective the second quarter of 2023, we
amended our calculation of adjusted net debt to include our US
dollar-denominated debt at the hedged foreign exchange rate. Our US
dollar-denominated debt is 100% hedged and we believe this
presentation is better representative of the economic obligations
on this debt. Previously, our calculation of adjusted net debt had
included a current fair market value of the net debt derivative
assets.2 For the purposes of calculating adjusted net debt and
debt leverage ratio, we believe adjusting 50% of the value of our
subordinated notes is appropriate as this methodology factors in
certain circumstances with respect to priority for payment and this
approach is commonly used to evaluate debt leverage by rating
agencies.3 For the purposes of calculating adjusted net debt
prior to closing the Shaw Transaction, we deducted our restricted
cash and cash equivalents as these funds were raised solely to fund
a portion of the cash consideration of the Shaw Transaction or, if
the Shaw Transaction was not consummated, were to have been used to
redeem the applicable senior notes excluding any premium. We
therefore believe including only the underlying senior notes would
not represent our view of adjusted net debt prior to the
consummation of the Shaw Transaction or the redemption of the
senior notes.4 Adjusted net debt is a capital management
measure. Pro forma trailing 12-month adjusted EBITDA is a non-GAAP
financial measure. 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" for more information about these measures.
Trailing 12-month adjusted EBITDA reflects the
combined results of Rogers including Shaw for the period since the
Shaw Transaction closed in April 2023 to December 2023 and
standalone Rogers results prior to April 2023. To illustrate the
results of a combined Rogers and Shaw as if the Shaw Transaction
had closed at the beginning of the trailing 12-month period, we
have also disclosed a pro forma trailing 12-month adjusted EBITDA
and pro forma debt leverage ratio. Pro forma adjusted EBITDA
incorporates an amount representing the results of Shaw's adjusted
EBITDA, adjusted to conform to Rogers' accounting policies, for the
three months beginning January 1, 2023.
These pro forma metrics are presented for
illustrative purposes only and do not purport to reflect what the
combined company's actual operating results or financial condition
would have been had the Shaw Transaction occurred on the date
indicated, nor do they purport to project our future financial
position or operating results and should not be taken as
representative of our future financial position or consolidated
operating results.
As a result of the significant debt we issued to
finance the Shaw Transaction, and as planned when the Shaw
Transaction was first announced, our debt leverage ratio has
increased. As at December 31, 2023 our debt leverage ratio was 5.0
(December 31, 2022 - 3.3) and our pro forma debt leverage
ratio was 4.7. In order to meet our stated objective of returning
our debt leverage ratio to approximately 3.5 within 36 months of
closing the Shaw Transaction, we intend to manage our debt leverage
ratio through combined operational synergies, organic growth in
adjusted EBITDA, and debt repayment, as applicable.
Credit ratingsBelow is a
summary of the credit ratings on RCI's outstanding senior and
subordinated notes and debentures (long-term) and US CP
(short-term) as at December 31, 2023.
|
Issuance |
S&P Global Ratings Services |
Moody's |
Fitch |
DBRS Morningstar |
|
Corporate credit issuer default rating |
BBB- (outlook negative) |
Baa3 (stable) |
BBB- (stable) |
BBB
(low) (stable) |
| Senior unsecured debt |
BBB- (outlook negative) |
Baa3 (stable) |
BBB- (stable) |
BBB (low) (stable) |
| Subordinated debt |
BB (outlook negative) |
Ba2 (stable) |
BB (stable) |
N/A 1 |
|
US commercial paper |
A-3 |
P-3 |
N/A 1 |
N/A 1 |
1 We have not sought a rating from Fitch or
DBRS Morningstar for our short-term obligations or from DBRS
Morningstar for our subordinated debt.
Outstanding common shares
|
|
As atDecember 31 |
As at December 31 |
|
|
2023 |
2022 |
|
|
|
|
| Common shares outstanding 1 |
|
|
|
Class A Voting Shares |
111,152,011 |
111,152,011 |
|
Class B Non-Voting Shares |
418,868,891 |
393,773,306 |
|
|
|
|
|
Total common shares |
530,020,902 |
504,925,317 |
|
|
|
|
| Options to purchase Class B
Non-Voting Shares |
|
|
|
Outstanding options |
10,593,645 |
9,860,208 |
|
Outstanding options exercisable |
4,749,678 |
3,440,894 |
1 Holders of Class B Non-Voting Shares are
entitled to receive notice of and to attend shareholder meetings;
however, they are not entitled to vote at these meetings except as
required by law or stipulated by stock exchanges. If an offer is
made to purchase outstanding Class A Shares, there is no
requirement under applicable law or our constating documents that
an offer be made for the outstanding Class B Non-Voting Shares, and
there is no other protection available to shareholders under our
constating documents. If an offer is made to purchase both classes
of shares, the offer for the Class A Shares may be made on
different terms than the offer to the holders of Class B Non-Voting
Shares.
On April 3, 2023, we issued 23.6 million Class B
Non-Voting Shares as partial consideration for the Shaw
Transaction.On October 3, 2023 and January 2, 2024, we issued 1.5
million and 1.2 million Class B Non-Voting Shares, respectively, as
partial settlement of the dividend payable on those dates under the
terms of our DRIP.
Financial Risk Management
This section should be read in conjunction with
"Financial Risk Management" in our 2022 Annual MD&A. We use
derivative instruments to manage financial risks related to our
business activities. We only use derivatives to manage risk and not
for speculative purposes. We also manage our exposure to both fixed
and fluctuating interest rates and had fixed the interest rate on
85.6% of our outstanding debt, including short-term borrowings, as
at December 31, 2023 (December 31, 2022 - 91.2%).
Debt derivativesWe use
cross-currency interest rate exchange agreements, forward
cross-currency interest rate exchange agreements, and foreign
currency forward contracts (collectively, debt derivatives) to
manage risks from fluctuations in foreign exchange rates and
interest rates associated with our US dollar-denominated senior
notes, debentures, subordinated notes, lease liabilities, credit
facility borrowings, and US CP borrowings. We typically designate
the debt derivatives related to our senior notes, debentures,
subordinated notes, and lease liabilities as hedges for accounting
purposes against the foreign exchange risk or interest rate risk
associated with specific issued and forecast debt instruments. Debt
derivatives related to our credit facility and US CP borrowings
have not been designated as hedges for accounting purposes.
Credit facilities and US CP
Below is a summary of the debt derivatives we
entered into and settled related to our credit facility borrowings
and US CP program during the three and twelve months ended
December 31, 2023 and 2022.
|
|
Three months endedDecember 31, 2023 |
|
|
Twelve months ended December 31, 2023 |
|
|
(In millions of dollars, except exchange rates) |
Notional (US$) |
Exchangerate |
Notional(Cdn$) |
|
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
|
| Credit facilities |
|
|
|
|
|
|
|
|
Debt derivatives entered |
10,177 |
1.365 |
13,891 |
|
|
38,205 |
1.348 |
51,517 |
|
|
Debt derivatives settled |
11,171 |
1.363 |
15,226 |
|
|
34,964 |
1.348 |
47,126 |
|
|
Net cash paid on settlement |
|
|
(27 |
) |
|
|
|
(10 |
) |
| |
|
|
|
|
|
|
|
| US commercial paper
program |
|
|
|
|
|
|
|
|
Debt derivatives entered |
307 |
1.365 |
419 |
|
|
1,803 |
1.357 |
2,447 |
|
|
Debt derivatives settled |
194 |
1.361 |
264 |
|
|
1,848 |
1.345 |
2,486 |
|
|
Net cash paid on settlement |
|
|
(1 |
) |
|
|
|
(20 |
) |
|
|
Three months endedDecember 31, 2022 |
|
Twelve months endedDecember 31, 2022 |
|
(In millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
| Credit facilities |
|
|
|
|
|
|
|
|
Debt derivatives settled |
— |
— |
— |
|
400 |
1.268 |
507 |
|
Net cash received on settlement |
|
|
— |
|
|
|
9 |
| |
|
|
|
|
|
|
|
| US commercial paper
program |
|
|
|
|
|
|
|
|
Debt derivatives entered |
1,450 |
1.354 |
1,963 |
|
6,745 |
1.302 |
8,781 |
|
Debt derivatives settled |
2,033 |
1.360 |
2,764 |
|
7,292 |
1.306 |
9,522 |
|
Net cash received on settlement |
|
|
16 |
|
|
|
64 |
As at December 31, 2023, we had US$3,241
million and US$113 million notional amount of debt derivatives
outstanding relating to our credit facility borrowings and US CP
program (December 31, 2022 - nil and US$158 million), at an
average rate of $1.352/US$ (December 31, 2022 - nil) and
$1.369/US$ (December 31, 2022 - $1.352/US$), respectively.
Senior and subordinated notesWe did not enter
into any debt derivatives related to senior notes issued during the
three and twelve months ended December 31, 2023. In the twelve
months ended December 31, 2023, we settled the derivatives
associated with our US$1 billion senior notes due 2025, which were
not designated as hedges for accounting purposes. We subsequently
entered into new derivatives associated with our US$1 billion
senior notes due 2025; these derivatives are designated as hedges
for accounting purposes. Below is a summary of the debt derivatives
we entered into related to senior and subordinated notes during the
three and twelve months ended December 31, 2022.
|
(In millions of dollars, except interest rates) |
|
|
|
| |
|
US$ |
|
Hedging effect |
|
Effective date |
Principal/Notional amount(US$) |
Maturity date |
Coupon rate |
|
|
Fixed hedged (Cdn$)interest rate 1 |
|
Equivalent (Cdn$) |
|
|
|
|
|
|
|
|
|
2022 issuances |
|
|
|
|
|
|
|
February 11, 2022 |
750 |
2082 |
5.250 |
% |
|
5.635 |
% |
951 |
|
March 11, 2022 |
1,000 |
2025 |
2.950 |
% |
|
2.451 |
% |
1,334 |
|
March 11, 2022 |
1,300 |
2027 |
3.200 |
% |
|
3.413 |
% |
1,674 |
|
March 11, 2022 |
2,000 |
2032 |
3.800 |
% |
|
4.232 |
% |
2,567 |
|
March 11, 2022 |
750 |
2042 |
4.500 |
% |
|
5.178 |
% |
966 |
|
March 11, 2022 |
2,000 |
2052 |
4.550 |
% |
|
5.305 |
% |
2,564 |
1 Converting from a fixed US$ coupon rate
to a weighted average Cdn$ fixed rate.
In October 2023, we repaid the entire
outstanding principal amount of our US$850 million 4.10% senior
notes and the associated debt derivatives at maturity, resulting in
a repayment of $877 million, net of $288 million received on
settlement of the associated debt derivatives.
As at December 31, 2023, we had US$14,750
million (December 31, 2022 - US$16,100 million) in US
dollar-denominated senior notes, debentures, and subordinated
notes, of which all of the associated foreign exchange risk had
been hedged using debt derivatives, at an average rate of
$1.259/US$ (December 31, 2022 - $1.233/US$).
During the twelve months ended December 31,
2022, we terminated US$2 billion notional amount of forward
starting cross-currency swaps and received $43 million upon
settlement.
Lease liabilitiesBelow is a summary of the debt
derivatives we entered into and settled related to our outstanding
lease liabilities for the three and twelve months ended
December 31, 2023 and 2022.
|
|
Three months ended December 31, 2023 |
|
Twelve months ended December 31, 2023 |
|
(In millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
| Debt derivatives entered |
93 |
1.312 |
122 |
|
274 |
1.336 |
366 |
| Debt
derivatives settled |
42 |
1.310 |
55 |
|
142 |
1.310 |
186 |
|
|
Three months ended December 31, 2022 |
|
Twelve months ended December 31, 2022 |
|
(In millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
| Debt derivatives entered |
45 |
1.356 |
61 |
|
156 |
1.321 |
206 |
| Debt
derivatives settled |
34 |
1.294 |
44 |
|
124 |
1.306 |
162 |
As at December 31, 2023, we had US$357
million notional amount of debt derivatives outstanding relating to
our outstanding lease liabilities (December 31, 2022 - US$225
million) with terms to maturity ranging from January 2024 to
December 2026 (December 31, 2022 - January 2023 to December
2025) at an average rate of $1.329/US$ (December 31, 2022 -
$1.306/US$).
See "Mark-to-market value" for more information
about our debt derivatives.
Expenditure derivativesWe use
foreign currency forward contracts (expenditure derivatives) to
manage the foreign exchange risk in our operations, designating
them as hedges for accounting purposes for certain of our forecast
operational and capital expenditures.
Below is a summary of the expenditure
derivatives we entered into and settled during the three and twelve
months ended December 31, 2023 and 2022.
|
|
Three months ended December 31, 2023 |
|
Twelve months ended December 31, 2023 |
|
(In millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
| Expenditure derivatives
entered |
420 |
1.326 |
557 |
|
1,650 |
1.325 |
2,187 |
| Expenditure derivatives
acquired |
— |
— |
— |
|
212 |
1.330 |
282 |
|
Expenditure derivatives settled |
273 |
1.267 |
346 |
|
1,172 |
1.262 |
1,479 |
|
|
Three months ended December 31, 2022 |
|
Twelve months ended December 31, 2022 |
|
(In millions of dollars, except exchange rates) |
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
Notional(US$) |
Exchangerate |
Notional(Cdn$) |
|
|
|
|
|
|
|
|
|
| Expenditure derivatives
entered |
— |
— |
— |
|
852 |
1.251 |
1,066 |
|
Expenditure derivatives settled |
225 |
1.298 |
292 |
|
960 |
1.291 |
1,239 |
As at December 31, 2023, we had US$1,650
million notional amount of expenditure derivatives outstanding
(December 31, 2022 - US$960 million) with terms to maturity
ranging from January 2024 to December 2025 (December 31, 2022
- January 2023 to December 2023) at an average rate of $1.325/US$
(December 31, 2022 - $1.250/US$).
See "Mark-to-market value" for more information
about our expenditure derivatives.
Equity derivativesWe use total
return swaps (equity derivatives) to hedge the market price change
risk of the Class B Non-Voting Shares granted under our stock-based
compensation programs. The equity derivatives have not been
designated as hedges for accounting purposes.
During the twelve months ended December 31,
2023, we entered into 0.5 million equity derivatives with a
weighted average price of $58.14 as a result of the issuance of
additional performance restricted share units this year.
During the twelve months ended December 31,
2023, we executed extension agreements for the remainder of our
equity derivative contracts under substantially the same commitment
terms and conditions with revised expiry dates to April 2024 (from
April 2023).
As at December 31, 2023, we had equity
derivatives outstanding for 6.0 million (December 31, 2022 -
5.5 million) Class B Non-Voting Shares with a weighted average
price of $54.02 (December 31, 2022 - $53.65).
See "Mark-to-market value" for more information
about our equity derivatives.
Cash settlements on debt derivatives and forward
contracts
Below is a summary of the net proceeds
(payments) on settlement of debt derivatives and forward contracts
during the three and twelve months ended December 31, 2023 and
2022.
|
|
Three months ended December 31, 2023 |
|
|
Twelve months ended December 31, 2023 |
|
|
(In millions of dollars, except exchange rates) |
US$settlements |
Exchangerate |
Cdn$settlements |
|
|
US$settlements |
Exchangerate |
Cdn$settlements |
|
|
|
|
|
|
|
|
|
|
| Credit facilities |
|
|
(27 |
) |
|
|
|
(10 |
) |
| US commercial paper
program |
|
|
(1 |
) |
|
|
|
(20 |
) |
| Senior and subordinated
notes |
|
|
288 |
|
|
|
|
522 |
|
|
|
|
|
|
|
|
|
|
| Net
proceeds on settlement of debt derivatives and forward
contracts |
|
|
260 |
|
|
|
|
492 |
|
|
|
Three months ended December 31, 2022 |
|
Twelve months ended December 31, 2022 |
|
| (In
millions of dollars, except exchange rates) |
US$settlements |
Exchangerate |
Cdn$settlements |
|
US$settlements |
Exchangerate |
Cdn$settlements |
|
|
|
|
|
|
|
|
|
|
| Credit facilities |
|
|
— |
|
|
|
9 |
|
| US commercial paper
program |
|
|
16 |
|
|
|
64 |
|
| Senior and subordinated
notes |
|
|
— |
|
|
|
(75 |
) |
| Forward starting
cross-currency swaps |
|
|
— |
|
|
|
43 |
|
| Interest rate derivatives
(Cdn$) |
|
|
— |
|
|
|
113 |
|
|
Interest rate derivatives (US$) |
— |
— |
— |
|
(129 |
) |
1.279 |
(165 |
) |
|
|
|
|
|
|
|
|
|
| Net
proceeds (payments) on settlement of debt derivatives and forward
contracts |
|
|
16 |
|
|
|
(11 |
) |
Mark-to-market valueWe record
our derivatives using an estimated credit-adjusted, mark-to-market
valuation, calculated in accordance with IFRS.
|
|
As at December 31, 2023 |
|
|
(In millions of dollars, except exchange rates) |
Notionalamount(US$) |
Exchangerate |
Notionalamount(Cdn$) |
Fair value (Cdn$) |
|
|
Debt derivatives accounted for as cash flow hedges: |
|
|
|
|
|
As assets |
4,557 |
1.1583 |
5,278 |
599 |
|
|
As liabilities |
10,550 |
1.3055 |
13,773 |
(1,069 |
) |
| Debt derivatives not accounted
for as hedges: |
|
|
|
|
|
As liabilities |
3,354 |
1.3526 |
4,537 |
(101 |
) |
| Net
mark-to-market debt derivative liability |
|
|
|
(571 |
) |
|
Expenditure derivatives accounted for as cash flow hedges: |
|
|
|
|
|
As assets |
600 |
1.3147 |
789 |
4 |
|
|
As liabilities |
1,050 |
1.3315 |
1,398 |
(19 |
) |
|
Net mark-to-market expenditure derivative liability |
|
|
|
(15 |
) |
|
Equity derivatives not accounted for as hedges: |
|
|
|
|
|
As assets |
— |
— |
324 |
48 |
|
|
Net mark-to-market equity derivative asset |
|
|
|
48 |
|
|
|
|
|
|
|
|
Net mark-to-market liability |
|
|
|
(538 |
) |
|
|
As at December 31, 2022 |
|
|
(In millions of dollars, except exchange rates) |
Notionalamount(US$) |
Exchangerate |
Notionalamount(Cdn$) |
Fair value (Cdn$) |
|
|
Debt derivatives accounted for as cash flow hedges: |
|
|
|
|
|
As assets |
7,834 |
1.1718 |
9,180 |
1,330 |
|
|
As liabilities |
7,491 |
1.3000 |
9,738 |
(414 |
) |
| Short-term debt derivatives not
accounted for as hedges: |
|
|
|
|
|
As assets |
1,173 |
1.2930 |
1,517 |
72 |
|
| Net
mark-to-market debt derivative asset |
|
|
|
988 |
|
|
Expenditure derivatives accounted for as cash flow hedges: |
|
|
|
|
|
As assets |
960 |
1.2500 |
1,200 |
94 |
|
|
Net mark-to-market expenditure derivative asset |
|
|
|
94 |
|
|
Equity derivatives not accounted for as hedges: |
|
|
|
|
|
As assets |
— |
— |
295 |
54 |
|
|
Net mark-to-market expenditure derivative asset |
|
|
|
54 |
|
|
|
|
|
|
|
|
Net mark-to-market asset |
|
|
|
1,136 |
|
Key Performance Indicators
We measure the success of our strategy using a
number of key performance indicators that are defined and discussed
in our 2022 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 supplementary financial measures (see
"Non-GAAP and Other Financial Measures"), are not measurements in
accordance with IFRS. They include:
- subscriber counts;
- Wireless;
- Cable; and
- homes passed (Cable);
- Wireless subscriber churn
(churn);
- Wireless mobile phone average
revenue per user(ARPU);
|
- Cable average revenue per account (ARPA);
- Cable customer relationships;
- Cable market penetration (penetration);
- capital intensity; and
- total service revenue.
|
Non-GAAP and Other Financial Measures
We use the following "non-GAAP financial
measures" and other "specified financial measures" (each within the
meaning of applicable Canadian securities law). These are reviewed
regularly by management and the Board in assessing our performance
and making decisions regarding the ongoing operations of our
business and its ability to generate cash flows. Some or all of
these measures may also be used by investors, lending institutions,
and credit rating agencies as indicators of our operating
performance, of our ability to incur and service debt, and as
measurements to value companies in the telecommunications sector.
These are not standardized measures under IFRS, so may not be
reliable ways to compare us to other companies.
|
Non-GAAP financial measures |
|
Specified financial measure |
How it is useful |
How we calculate it |
Most directlycomparableIFRS financialmeasure |
|
Adjusted netincome |
● |
|
To assess the performance of our businesses before the effects of
the noted items, because they affect the comparability of our
financial results and could potentially distort the analysis of
trends in business performance. Excluding these items does not
imply that they are non-recurring. |
Net (loss) income add (deduct) restructuring, acquisition and
other; loss (recovery) on sale or wind down of investments; loss
(gain) on disposition of property, plant and equipment; (gain) on
acquisitions; loss on non-controlling interest purchase
obligations; loss on repayment of long-term debt; loss on bond
forward derivatives; depreciation and amortization on fair value
increment of Shaw Transaction-related assets; and income tax
adjustments on these items, including adjustments as a result of
legislative or other tax rate changes. |
Net (loss) income |
|
Pro forma trailing 12-month adjusted EBITDA |
● |
|
To illustrate the results of a combined Rogers and Shaw as if the
Shaw Transaction had closed at the beginning of the trailing
12-month period. |
Trailing 12-month adjusted EBITDAaddAcquired Shaw business adjusted
EBITDA - January 2023 to March 2023 |
Trailing 12-month adjusted EBITDA |
|
Non-GAAP ratios |
|
Specified financial measure |
How it
is useful |
How we calculate it |
|
Adjusted basicearnings pershareAdjusted dilutedearnings
pershare |
● |
|
To assess the performance of our businesses before the effects of
the noted items, because they affect the comparability of our
financial results and could potentially distort the analysis of
trends in business performance. Excluding these items does not
imply that they are non-recurring. |
Adjusted net incomedivided bybasic weighted average shares
outstanding.Adjusted net income including the dilutive effect of
stock-based compensationdivided by diluted weighted average shares
outstanding. |
|
Pro forma debt leverage ratio |
● |
|
We believe this helps investors and analysts analyze our ability to
service our debt obligations, with the results of a combined Rogers
and Shaw as if the Shaw Transaction had closed at the beginning of
the trailing 12-month period. |
Adjusted net debtdivided by pro forma trailing 12-month adjusted
EBITDA |
|
Total of segments measures |
|
Specified financial measure |
Most directly comparable IFRS financial measure |
|
Adjusted EBITDA |
Net (loss) income |
|
Capital management measures |
|
Specified financial measure |
How it is useful |
|
Free cash flow |
● |
|
To show how much cash we generate that is 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 net debt |
● |
|
We believe this helps investors and analysts analyze our debt and
cash balances while taking into account the economic impact of debt
derivatives on our US dollar-denominated debt. |
|
Debt leverage ratio |
● |
|
We believe this helps investors and analysts analyze our ability to
service our debt obligations. |
|
Available liquidity |
● |
|
To help determine if we are able to meet all of our commitments, to
execute our business plan, and to mitigate the risk of economic
downturns. |
|
Supplementary financial measures |
|
Specified financial measure |
How we calculate it |
|
Adjusted EBITDA margin |
Adjusted EBITDAdivided byrevenue. |
|
Wireless mobile phone average revenue per user (ARPU) |
Wireless service revenue divided by average total number of
Wireless mobile phone subscribers for the relevant period. |
|
Cable average revenue per account (ARPA) |
Cable service revenue divided by average total number of customer
relationships for the relevant period. |
|
Capital intensity |
Capital expenditures divided by revenue. |
Reconciliation of adjusted
EBITDA
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
|
2023 |
2022 |
|
|
|
|
|
|
|
|
| Net income |
328 |
|
508 |
|
|
849 |
1,680 |
|
| Add: |
|
|
|
|
|
|
Income tax expense |
194 |
|
188 |
|
|
517 |
609 |
|
|
Finance costs |
568 |
|
287 |
|
|
2,047 |
1,233 |
|
|
Depreciation and amortization |
1,172 |
|
648 |
|
|
4,121 |
2,576 |
|
|
EBITDA |
2,262 |
|
1,631 |
|
|
7,534 |
6,098 |
|
| Add (deduct): |
|
|
|
|
|
|
Other (income) expense |
(19 |
) |
(10 |
) |
|
362 |
(15 |
) |
|
Restructuring, acquisition and other |
86 |
|
58 |
|
|
685 |
310 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
2,329 |
|
1,679 |
|
|
8,581 |
6,393 |
|
Reconciliation of adjusted net income
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
| Net income |
328 |
|
508 |
|
|
849 |
|
1,680 |
|
| Add (deduct): |
|
|
|
|
|
|
Restructuring, acquisition and other |
86 |
|
58 |
|
|
685 |
|
310 |
|
|
Depreciation and amortization on fair value increment of Shaw
Transaction-related assets |
249 |
|
— |
|
|
764 |
|
— |
|
|
Loss on non-controlling interest purchase obligation 1 |
— |
|
— |
|
|
422 |
|
— |
|
|
Income tax impact of above items |
(85 |
) |
(12 |
) |
|
(366 |
) |
(75 |
) |
|
Income tax adjustment, tax rate change |
52 |
|
— |
|
|
52 |
|
— |
|
|
|
|
|
|
|
|
|
Adjusted net income |
630 |
|
554 |
|
|
2,406 |
|
1,915 |
|
1 Reflects a loss related to the change in
the value of one of our joint venture's obligations to purchase at
fair value the non-controlling interest in one of its
investments.
Reconciliation of pro forma trailing
12-month adjusted EBITDA
|
|
As at December 31 |
| (In
millions of dollars) |
2023 |
|
|
|
| Trailing 12-month adjusted
EBITDA |
8,581 |
| Add (deduct): |
|
|
Acquired Shaw business adjusted EBITDA - January 2023 to March
2023 |
514 |
|
|
|
|
Pro forma trailing 12-month adjusted EBITDA |
9,095 |
Reconciliation of free cash
flow
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
| Cash provided by operating
activities |
1,379 |
|
1,145 |
|
|
5,221 |
|
4,493 |
|
| Add (deduct): |
|
|
|
|
|
|
Capital expenditures |
(946 |
) |
(776 |
) |
|
(3,934 |
) |
(3,075 |
) |
|
Interest on borrowings, net and capitalized interest |
(521 |
) |
(243 |
) |
|
(1,794 |
) |
(1,090 |
) |
|
Interest paid, net |
456 |
|
287 |
|
|
1,780 |
|
1,054 |
|
|
Restructuring, acquisition and other |
86 |
|
58 |
|
|
685 |
|
310 |
|
|
Program rights amortization |
(12 |
) |
(12 |
) |
|
(70 |
) |
(61 |
) |
|
Change in net operating assets and liabilities |
369 |
|
201 |
|
|
627 |
|
152 |
|
|
Other adjustments 1 |
12 |
|
(25 |
) |
|
(101 |
) |
(10 |
) |
|
|
|
|
|
|
|
| Free
cash flow |
823 |
|
635 |
|
|
2,414 |
|
1,773 |
|
1 Consists of post-employment benefit
contributions, net of expense, cash flows relating to other
operating activities, and other investment income from our
financial statements.
Other Information
Consolidated financial results -
quarterly summaryBelow is a summary of our consolidated
results for the past eight quarters.
|
|
2023 |
|
|
|
2022 |
|
|
(In millions of dollars, except per share amounts) |
Q4 |
|
|
Q3 |
|
|
Q2 |
|
|
Q1 |
|
|
|
Q4 |
|
|
Q3 |
|
|
Q2 |
|
|
Q1 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
Wireless |
2,868 |
|
|
2,584 |
|
|
2,424 |
|
|
2,346 |
|
|
|
2,578 |
|
|
2,267 |
|
|
2,212 |
|
|
2,140 |
|
|
Cable |
1,982 |
|
|
1,993 |
|
|
2,013 |
|
|
1,017 |
|
|
|
1,019 |
|
|
975 |
|
|
1,041 |
|
|
1,036 |
|
|
Media |
558 |
|
|
586 |
|
|
686 |
|
|
505 |
|
|
|
606 |
|
|
530 |
|
|
659 |
|
|
482 |
|
|
Corporate items and intercompany eliminations |
(73 |
) |
|
(71 |
) |
|
(77 |
) |
|
(33 |
) |
|
|
(37 |
) |
|
(29 |
) |
|
(44 |
) |
|
(39 |
) |
|
Total revenue |
5,335 |
|
|
5,092 |
|
|
5,046 |
|
|
3,835 |
|
|
|
4,166 |
|
|
3,743 |
|
|
3,868 |
|
|
3,619 |
|
| Total
service revenue 1 |
4,470 |
|
|
4,527 |
|
|
4,534 |
|
|
3,314 |
|
|
|
3,436 |
|
|
3,230 |
|
|
3,443 |
|
|
3,196 |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
Wireless |
1,291 |
|
|
1,294 |
|
|
1,222 |
|
|
1,179 |
|
|
|
1,173 |
|
|
1,093 |
|
|
1,118 |
|
|
1,085 |
|
|
Cable |
1,111 |
|
|
1,080 |
|
|
1,026 |
|
|
557 |
|
|
|
522 |
|
|
465 |
|
|
520 |
|
|
551 |
|
|
Media |
4 |
|
|
107 |
|
|
4 |
|
|
(38 |
) |
|
|
57 |
|
|
76 |
|
|
2 |
|
|
(66 |
) |
|
Corporate items and intercompany eliminations |
(77 |
) |
|
(70 |
) |
|
(62 |
) |
|
(47 |
) |
|
|
(73 |
) |
|
(51 |
) |
|
(48 |
) |
|
(31 |
) |
|
Adjusted EBITDA |
2,329 |
|
|
2,411 |
|
|
2,190 |
|
|
1,651 |
|
|
|
1,679 |
|
|
1,583 |
|
|
1,592 |
|
|
1,539 |
|
|
Deduct (add): |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
1,172 |
|
|
1,160 |
|
|
1,158 |
|
|
631 |
|
|
|
648 |
|
|
644 |
|
|
638 |
|
|
646 |
|
|
Restructuring, acquisition and other |
86 |
|
|
213 |
|
|
331 |
|
|
55 |
|
|
|
58 |
|
|
85 |
|
|
71 |
|
|
96 |
|
|
Finance costs |
568 |
|
|
600 |
|
|
583 |
|
|
296 |
|
|
|
287 |
|
|
331 |
|
|
357 |
|
|
258 |
|
|
Other (income) expense |
(19 |
) |
|
426 |
|
|
(18 |
) |
|
(27 |
) |
|
|
(10 |
) |
|
19 |
|
|
(18 |
) |
|
(6 |
) |
|
Net income before income tax expense |
522 |
|
|
12 |
|
|
136 |
|
|
696 |
|
|
|
696 |
|
|
504 |
|
|
544 |
|
|
545 |
|
|
Income tax expense |
194 |
|
|
111 |
|
|
27 |
|
|
185 |
|
|
|
188 |
|
|
133 |
|
|
135 |
|
|
153 |
|
|
Net income (loss) |
328 |
|
|
(99 |
) |
|
109 |
|
|
511 |
|
|
|
508 |
|
|
371 |
|
|
409 |
|
|
392 |
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$0.62 |
|
($0.19 |
) |
$0.21 |
|
$1.01 |
|
|
$1.01 |
|
$0.73 |
|
$0.81 |
|
$0.78 |
|
|
Diluted |
$0.62 |
|
($0.20 |
) |
$0.20 |
|
$1.00 |
|
|
$1.00 |
|
$0.71 |
|
$0.76 |
|
$0.77 |
|
| |
|
|
|
|
|
|
|
|
|
| Net income (loss) |
328 |
|
|
(99 |
) |
|
109 |
|
|
511 |
|
|
|
508 |
|
|
371 |
|
|
409 |
|
|
392 |
|
| Add (deduct): |
|
|
|
|
|
|
|
|
|
|
Restructuring, acquisition and other |
86 |
|
|
213 |
|
|
331 |
|
|
55 |
|
|
|
58 |
|
|
85 |
|
|
71 |
|
|
96 |
|
|
Depreciation and amortization on fair value increment of Shaw
Transaction-related assets |
249 |
|
|
263 |
|
|
252 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Loss on non-controlling interest purchase obligation |
— |
|
|
422 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Income tax impact of above items |
(85 |
) |
|
(120 |
) |
|
(148 |
) |
|
(13 |
) |
|
|
(12 |
) |
|
(20 |
) |
|
(17 |
) |
|
(26 |
) |
|
Income tax adjustment, tax rate change |
52 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Adjusted net income |
630 |
|
|
679 |
|
|
544 |
|
|
553 |
|
|
|
554 |
|
|
436 |
|
|
463 |
|
|
462 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted earnings per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$1.19 |
|
$1.28 |
|
$1.03 |
|
$1.10 |
|
|
$1.10 |
|
$0.86 |
|
$0.92 |
|
$0.91 |
|
|
Diluted |
$1.19 |
|
$1.27 |
|
$1.02 |
|
$1.09 |
|
|
$1.09 |
|
$0.84 |
|
$0.86 |
|
$0.91 |
|
| |
|
|
|
|
|
|
|
|
|
| Capital expenditures |
946 |
|
|
1,017 |
|
|
1,079 |
|
|
892 |
|
|
|
776 |
|
|
872 |
|
|
778 |
|
|
649 |
|
| Cash provided by operating
activities |
1,379 |
|
|
1,754 |
|
|
1,635 |
|
|
453 |
|
|
|
1,145 |
|
|
1,216 |
|
|
1,319 |
|
|
813 |
|
| Free
cash flow |
823 |
|
|
745 |
|
|
476 |
|
|
370 |
|
|
|
635 |
|
|
279 |
|
|
344 |
|
|
515 |
|
1 As defined. See "Key Performance Indicators".
Supplementary Information
Rogers Communications
Inc.Interim Condensed Consolidated Statements of
Income(In millions of dollars, except for per share
amounts, unaudited)
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
|
2023 |
|
2022 |
|
|
|
2023 |
2022 |
|
|
|
|
|
|
|
|
| Revenue |
5,335 |
|
4,166 |
|
|
|
19,308 |
15,396 |
|
| |
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
Operating costs |
3,006 |
|
2,487 |
|
|
|
10,727 |
9,003 |
|
|
Depreciation and amortization |
1,172 |
|
648 |
|
|
|
4,121 |
2,576 |
|
|
Restructuring, acquisition and other |
86 |
|
58 |
|
|
|
685 |
310 |
|
| Finance costs |
568 |
|
287 |
|
|
|
2,047 |
1,233 |
|
|
Other (income) expense |
(19 |
) |
(10 |
) |
|
|
362 |
(15 |
) |
|
|
|
|
|
|
|
| Income before income tax
expense |
522 |
|
696 |
|
|
|
1,366 |
2,289 |
|
|
Income tax expense |
194 |
|
188 |
|
|
|
517 |
609 |
|
|
|
|
|
|
|
|
|
Net income for the period |
328 |
|
508 |
|
|
|
849 |
1,680 |
|
|
|
|
|
|
|
|
| Earnings per share: |
|
|
|
|
|
|
Basic |
$0.62 |
|
$1.01 |
|
|
$1.62 |
$3.33 |
|
|
Diluted |
$0.62 |
|
$1.00 |
|
|
$1.62 |
$3.32 |
|
Rogers Communications
Inc.Condensed Consolidated Statements of Financial
Position(In millions of dollars, unaudited)
|
|
As atDecember 31 |
As atDecember 31 |
|
|
2023 |
2022 |
|
|
|
|
| Assets |
|
|
| Current assets: |
|
|
|
Cash and cash equivalents |
800 |
463 |
|
Restricted cash and cash equivalents |
— |
12,837 |
|
Accounts receivable |
4,996 |
4,184 |
|
Inventories |
456 |
438 |
|
Current portion of contract assets |
163 |
111 |
|
Other current assets |
1,202 |
561 |
|
Current portion of derivative instruments |
80 |
689 |
|
Assets held for sale1 |
137 |
— |
|
Total current assets |
7,834 |
19,283 |
| |
|
|
| Investments |
598 |
2,088 |
| Derivative instruments |
571 |
861 |
| Financing receivables |
1,101 |
886 |
| Other long-term assets |
670 |
681 |
| Property, plant and equipment,
intangible assets, and goodwill 2 |
58,508 |
31,856 |
|
|
|
|
|
Total assets |
69,282 |
55,655 |
|
|
|
|
| Liabilities and shareholders'
equity |
|
|
| Current liabilities: |
|
|
|
Short-term borrowings |
1,750 |
2,985 |
|
Accounts payable and accrued liabilities |
4,221 |
3,722 |
|
Other current liabilities |
434 |
252 |
|
Contract liabilities |
773 |
400 |
|
Current portion of long-term debt |
1,100 |
1,828 |
|
Current portion of lease liabilities |
504 |
362 |
|
Total current liabilities |
8,782 |
9,549 |
| |
|
|
| Provisions |
54 |
53 |
| Long-term debt |
39,755 |
29,905 |
| Lease liabilities |
2,089 |
1,666 |
| Other long-term liabilities |
1,783 |
738 |
|
Deferred tax liabilities |
6,379 |
3,652 |
|
Total liabilities |
58,842 |
45,563 |
| |
|
|
|
Shareholders' equity |
10,440 |
10,092 |
|
|
|
|
|
Total liabilities and shareholders' equity |
69,282 |
55,655 |
1 As at December 31, 2023, certain real estate
assets with a net book value totaling $137 million have been
classified as held for sale.2 The preliminary Shaw Transaction
purchase price allocation is subject to change as we continue to
finalize the values of the acquired intangible and related assets
and corresponding tax impacts.
Rogers Communications
Inc.Interim Condensed Consolidated Statements of
Cash Flows(In millions of dollars, unaudited)
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
Operating activities: |
|
|
|
|
|
|
Net income for the period |
328 |
|
508 |
|
|
849 |
|
1,680 |
|
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
1,172 |
|
648 |
|
|
4,121 |
|
2,576 |
|
|
Program rights amortization |
12 |
|
12 |
|
|
70 |
|
61 |
|
|
Finance costs |
568 |
|
287 |
|
|
2,047 |
|
1,233 |
|
|
Income tax expense |
194 |
|
188 |
|
|
517 |
|
609 |
|
|
Post-employment benefits contributions, net of expense |
21 |
|
47 |
|
|
46 |
|
19 |
|
|
Losses from associates and joint ventures |
— |
|
2 |
|
|
412 |
|
31 |
|
|
Other |
(52 |
) |
(34 |
) |
|
5 |
|
(55 |
) |
|
Cash provided by operating activities before changes in net
operating assets and liabilities, income taxes paid, and interest
paid |
2,243 |
|
1,658 |
|
|
8,067 |
|
6,154 |
|
|
Change in net operating assets and liabilities |
(369 |
) |
(201 |
) |
|
(627 |
) |
(152 |
) |
|
Income taxes paid |
(39 |
) |
(25 |
) |
|
(439 |
) |
(455 |
) |
|
Interest paid, net |
(456 |
) |
(287 |
) |
|
(1,780 |
) |
(1,054 |
) |
|
|
|
|
|
|
|
|
Cash provided by operating activities |
1,379 |
|
1,145 |
|
|
5,221 |
|
4,493 |
|
|
|
|
|
|
|
|
| Investing activities: |
|
|
|
|
|
|
Capital expenditures |
(946 |
) |
(776 |
) |
|
(3,934 |
) |
(3,075 |
) |
|
Additions to program rights |
(17 |
) |
(8 |
) |
|
(74 |
) |
(47 |
) |
|
Changes in non-cash working capital related to capital expenditures
and intangible assets |
(68 |
) |
(222 |
) |
|
(2 |
) |
(200 |
) |
|
Acquisitions and other strategic transactions, net of cash
acquired |
786 |
|
— |
|
|
(16,215 |
) |
(9 |
) |
|
Other |
21 |
|
(5 |
) |
|
25 |
|
68 |
|
|
|
|
|
|
|
|
|
Cash used in investing activities |
(224 |
) |
(1,011 |
) |
|
(20,200 |
) |
(3,263 |
) |
|
|
|
|
|
|
|
| Financing activities: |
|
|
|
|
|
|
Net (repayment of) proceeds received from short-term
borrowings |
(96 |
) |
(38 |
) |
|
(1,439 |
) |
707 |
|
|
Net (repayment) issuance of long-term debt |
(2,749 |
) |
— |
|
|
5,040 |
|
12,711 |
|
|
Net proceeds (payments) on settlement of debt derivatives and
forward contracts |
260 |
|
16 |
|
|
492 |
|
(11 |
) |
|
Transaction costs incurred |
— |
|
— |
|
|
(284 |
) |
(726 |
) |
|
Principal payments of lease liabilities |
(106 |
) |
(83 |
) |
|
(370 |
) |
(316 |
) |
|
Dividends paid |
(191 |
) |
(253 |
) |
|
(960 |
) |
(1,010 |
) |
|
|
|
|
|
|
|
|
Cash (used in) provided by financing activities |
(2,882 |
) |
(358 |
) |
|
2,479 |
|
11,355 |
|
|
|
|
|
|
|
|
| Change in cash and cash
equivalents and restricted cash and cash equivalents |
(1,727 |
) |
(224 |
) |
|
(12,500 |
) |
12,585 |
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
beginning of period |
2,527 |
|
13,524 |
|
|
13,300 |
|
715 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
end of period |
800 |
|
13,300 |
|
|
800 |
|
13,300 |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
800 |
|
463 |
|
|
800 |
|
463 |
|
|
Restricted cash and cash equivalents |
— |
|
12,837 |
|
|
— |
|
12,837 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash and cash equivalents,
end of period |
800 |
|
13,300 |
|
|
800 |
|
13,300 |
|
Change in net operating assets and
liabilities
|
|
Three months ended December 31 |
|
|
Twelve months ended December 31 |
|
|
(In millions of dollars) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
| Accounts receivable, excluding
financing receivables |
(182 |
) |
(285 |
) |
|
(362 |
) |
(201 |
) |
| Financing receivables |
(433 |
) |
(315 |
) |
|
(367 |
) |
(162 |
) |
| Contract assets |
(19 |
) |
1 |
|
|
(44 |
) |
8 |
|
| Inventories |
6 |
|
(112 |
) |
|
(4 |
) |
98 |
|
| Other current assets |
35 |
|
26 |
|
|
1 |
|
25 |
|
| Accounts payable and accrued
liabilities |
77 |
|
380 |
|
|
11 |
|
36 |
|
|
Contract and other liabilities |
147 |
|
104 |
|
|
138 |
|
44 |
|
|
|
|
|
|
|
|
|
Total change in net operating assets and liabilities |
(369 |
) |
(201 |
) |
|
(627 |
) |
(152 |
) |
Long-term debt
|
|
|
|
Principalamount |
Interestrate |
|
As atDecember 31 |
|
As at December 31 |
|
| (In
millions of dollars, except interest rates) |
Due date |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
| Term loan facility |
|
|
4,400 |
Floating |
|
4,286 |
|
— |
|
| Senior notes |
2023 |
US |
500 |
3.000 |
% |
— |
|
677 |
|
| Senior notes |
2023 |
US |
850 |
4.100 |
% |
— |
|
1,151 |
|
| Senior notes |
2024 |
|
600 |
4.000 |
% |
600 |
|
600 |
|
| Senior notes 1 |
2024 |
|
500 |
4.350 |
% |
500 |
|
— |
|
| Senior notes |
2025 |
US |
1,000 |
2.950 |
% |
1,323 |
|
1,354 |
|
| Senior notes |
2025 |
|
1,250 |
3.100 |
% |
1,250 |
|
1,250 |
|
| Senior notes |
2025 |
US |
700 |
3.625 |
% |
926 |
|
948 |
|
| Senior notes |
2026 |
|
500 |
5.650 |
% |
500 |
|
— |
|
| Senior notes |
2026 |
US |
500 |
2.900 |
% |
661 |
|
677 |
|
| Senior notes |
2027 |
|
1,500 |
3.650 |
% |
1,500 |
|
1,500 |
|
| Senior notes 1 |
2027 |
|
300 |
3.800 |
% |
300 |
|
— |
|
| Senior notes |
2027 |
US |
1,300 |
3.200 |
% |
1,719 |
|
1,761 |
|
| Senior notes |
2028 |
|
1,000 |
5.700 |
% |
1,000 |
|
— |
|
| Senior notes 1 |
2028 |
|
500 |
4.400 |
% |
500 |
|
— |
|
| Senior notes 1 |
2029 |
|
500 |
3.300 |
% |
500 |
|
— |
|
| Senior notes |
2029 |
|
1,000 |
3.750 |
% |
1,000 |
|
1,000 |
|
| Senior notes |
2029 |
|
1,000 |
3.250 |
% |
1,000 |
|
1,000 |
|
| Senior notes |
2030 |
|
500 |
5.800 |
% |
500 |
|
— |
|
| Senior notes 1 |
2030 |
|
500 |
2.900 |
% |
500 |
|
— |
|
| Senior notes |
2032 |
US |
2,000 |
3.800 |
% |
2,645 |
|
2,709 |
|
| Senior notes |
2032 |
|
1,000 |
4.250 |
% |
1,000 |
|
1,000 |
|
| Senior debentures 2 |
2032 |
US |
200 |
8.750 |
% |
265 |
|
271 |
|
| Senior notes |
2033 |
|
1,000 |
5.900 |
% |
1,000 |
|
— |
|
| Senior notes |
2038 |
US |
350 |
7.500 |
% |
463 |
|
474 |
|
| Senior notes |
2039 |
|
500 |
6.680 |
% |
500 |
|
500 |
|
| Senior notes 1 |
2039 |
|
1,450 |
6.750 |
% |
1,450 |
|
— |
|
| Senior notes |
2040 |
|
800 |
6.110 |
% |
800 |
|
800 |
|
| Senior notes |
2041 |
|
400 |
6.560 |
% |
400 |
|
400 |
|
| Senior notes |
2042 |
US |
750 |
4.500 |
% |
992 |
|
1,016 |
|
| Senior notes |
2043 |
US |
500 |
4.500 |
% |
661 |
|
677 |
|
| Senior notes |
2043 |
US |
650 |
5.450 |
% |
860 |
|
880 |
|
| Senior notes |
2044 |
US |
1,050 |
5.000 |
% |
1,389 |
|
1,422 |
|
| Senior notes |
2048 |
US |
750 |
4.300 |
% |
992 |
|
1,016 |
|
| Senior notes 1 |
2049 |
|
300 |
4.250 |
% |
300 |
|
— |
|
| Senior notes |
2049 |
US |
1,250 |
4.350 |
% |
1,653 |
|
1,693 |
|
| Senior notes |
2049 |
US |
1,000 |
3.700 |
% |
1,323 |
|
1,354 |
|
| Senior notes |
2052 |
US |
2,000 |
4.550 |
% |
2,645 |
|
2,709 |
|
| Senior notes |
2052 |
|
1,000 |
5.250 |
% |
1,000 |
|
1,000 |
|
| Subordinated notes 3 |
2081 |
|
2,000 |
5.000 |
% |
2,000 |
|
2,000 |
|
|
Subordinated notes 3 |
2082 |
US |
750 |
5.250 |
% |
992 |
|
1,016 |
|
|
|
|
|
|
|
41,895 |
|
32,855 |
|
| Deferred transaction costs and
discounts |
|
|
|
|
(1,040 |
) |
(1,122 |
) |
|
Less current portion |
|
|
|
|
(1,100 |
) |
(1,828 |
) |
|
|
|
|
|
|
|
|
|
Total long-term debt |
|
|
|
|
39,755 |
|
29,905 |
|
1 Senior notes originally issued by Shaw
Communications Inc. which are unsecured obligations of RCI and for
which RCCI was an unsecured guarantor as at December 31,
2023.2 Senior debentures originally issued by Rogers Cable
Inc. which are unsecured obligations of RCI and for which RCCI was
an unsecured guarantor as at December 31, 2023 and 2022.3 The
subordinated notes can be redeemed at par on the five-year
anniversary from issuance dates of December 2021 and February 2022
or on any subsequent interest payment date.
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 and the targets we set for it;
- the benefits expected to result from the Shaw 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 in
this document includes, but is not limited to, information and
statements under "2024 Outlook" relating to our 2024 consolidated
guidance on total service revenue, adjusted EBITDA, capital
expenditures, and free cash flow. All other statements that are not
historical facts are forward-looking statements.
Our conclusions, forecasts, and projections are
based on a number of estimates, expectations, assumptions, and
other factors, including, among others:
- general economic and industry conditions, including the effects
of inflation;
- 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; and
- industry structure and stability.
|
Except as otherwise indicated, this earnings
release and our forward-looking information do not reflect the
potential impact of any non-recurring or other special items or of
any dispositions, monetizations, mergers, acquisitions, other
business combinations, or other transactions that may be considered
or announced or may occur after the date on which the statement
containing the forward-looking information is made.
Risks and 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;
- in the event we place certain assets for sale, we may not be
able to achieve the anticipated proceeds in relation to the sale of
those assets and sales of assets may not be achieved within the
expected timeframes or at all;
|
- risks related to the Shaw Transaction, including the
possibility:
- we may not be able to achieve the anticipated cost synergies,
operating efficiencies, and other benefits of the Shaw Transaction
within the expected timeframes or at all;
- the integration of the businesses and operations of Rogers and
Shaw may be more difficult, time-consuming, or costly than
expected; and
- that operating costs, customer loss, and business disruption
(including, without limitation, difficulties in maintaining
relationships with employees, customers, or suppliers) may be
greater than expected;
- new interpretations and new accounting standards from
accounting standards bodies; and
- the other risks outlined in "Risks and Uncertainties Affecting
our Business" in our 2022 Annual MD&A and "Updates to Risks and
Uncertainties" in our Third Quarter 2023 MD&A.
|
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.
Key assumptions underlying our
full-year 2024
guidanceOur 2024 guidance ranges presented in
"2024 Outlook" are based on many assumptions including, but not
limited to, the following material assumptions for the full-year
2024:
- continued competitive intensity in
all segments in which we operate consistent with levels experienced
in 2023;
- 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
2024 compared to 2023;
- overall wireless market penetration
in Canada grows in 2024 at a similar rate as in 2023;
- continued subscriber growth in
retail Internet;
- declining Television and Satellite
subscribers, including the impact of customers migrating to Ignite
TV from our legacy Television 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;
- no significant sports-related work
stoppages or cancellations will occur;
- with respect to capital
expenditures:
- we continue to invest to ensure we
have competitive wireless and cable networks through (i) expanding
our 5G wireless network 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 Home roadmap in 2024 and we make progress on our
service footprint expansion projects;
- a substantial portion of our 2024
US dollar-denominated expenditures is hedged at an average exchange
rate of $1.33/US$;
- key interest rates remain
relatively stable throughout 2024; and
- we retain our investment-grade
credit ratings.
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 "Regulatory
Developments" and "Updates to Risks and Uncertainties" sections in
our Third Quarter 2023 MD&A and fully review the sections in
our 2022 Annual MD&A entitled "Regulation in Our Industry" and
"Risk Management", as well as our various other filings with
Canadian and US securities regulators, which can be found at
sedarplus.ca and sec.gov, respectively. Information on or connected
to sedarplus.ca, sec.gov, our website, or any other website
referenced in this document is not part of or incorporated into
this earnings release.
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