Rogers Communications Reports Fourth Quarter 2015 Results

  • Rogers 3.0 plan delivers solid financial and operating metrics for the fourth quarter
    • Continued revenue growth of 3% driven by growth of 4% in Wireless, our largest segment representing approximately 60% of total revenue and adjusted operating profit
    • Wireless adjusted operating profit growth of 4%; Wireless postpaid net additions of 31,000, an improvement of 89,000 year on year, on an 11 basis point improvement in churn
    • Postpaid ARPA up 4% with strong growth in Share Everything customers, up 63%
    • Internet net additions of 16,000, an improvement of 20,000 year on year; Internet revenue up 10%
    • Strong operating fundamentals delivered operating cash flow and free cash flow of $950 million and $274 million, respectively
  • Customer complaints as reported by the Commissioner for Complaints for Telecommunications Services (CCTS) declined faster than key competitors', down 26% in 2015 and down 50% over the past two years
  • Met 2015 guidance and announced our 2016 outlook, with continued growth in operating revenue and adjusted operating profit as well as a declining capital expenditure profile expected to drive higher free cash flow

TORONTO, Jan. 27, 2016 /CNW/ - Rogers Communications Inc., a leading diversified Canadian communications and media company, today announced its unaudited financial and operating results for the fourth quarter ended December 31, 2015.

Consolidated Financial Highlights

     
  Three months ended December 31
(In millions of Canadian dollars, except per share amounts, unaudited) 2015 2014
         
Operating revenue 3,452 3,366
As adjusted 1:        
  Operating profit 1,226 1,233
  Net income 331 355
  Basic earnings per share $ 0.64 $ 0.69
         
Net income 299 297
Basic earnings per share $ 0.58 $ 0.58
         
Free cash flow 1 274 275
Cash provided by operating activities 950 1,031

1  Adjusted amounts and free cash flow are non-GAAP measures and should not be considered as a substitute
or alternative for GAAP measures. These are not defined terms under IFRS and do not have standard meanings,
so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" for information
about these measures, including how we calculate them.

"Overall, we delivered steady results in a fiercely competitive quarter, including strong results in Wireless and Internet, where we maintained momentum in subscriber and financial metrics. We continued to make strong progress on postpaid churn thanks to the success of our customer propositions and customer experience improvements. Whilst we are making good progress, we aren't resting on our laurels, and we recognize there is more work to do," said Guy Laurence, President and Chief Executive Officer, Rogers Communications. "We delivered on our full-year guidance and our strategy continues to gain traction in the market. We enter 2016 with an outlook of continued growth and remain focused on delivering year two of Rogers 3.0."

Key Quarterly Financial Highlights

Higher operating revenue
Consolidated revenue increased 3% this quarter, reflecting revenue growth of 4% in Wireless and 3% in Media and decreases of 2% in each of Cable and Business Solutions. Wireless revenue increased as a result of higher network revenue from the continued adoption of higher-postpaid-ARPA-generating Rogers Share Everything plans and increased device revenue. Cable revenue decreased due to the continued decline in Television and Phone revenue, partially offset by continued Internet revenue growth. Media revenue increased primarily as a result of growth at Sportsnet and the Toronto Blue Jays.

Lower adjusted operating profit
The 1% decline in consolidated adjusted operating profit this quarter largely reflects the flow-through of the revenue changes discussed above as well as a decline in Media adjusted operating profit as our traditional media businesses are facing pressures with the changing advertising landscape. We recently announced some job cuts affecting conventional TV, radio, publishing, and some back-office positions in order to address these pressures.

Higher net income and lower adjusted net income
Net income increased this quarter primarily as a result of lower restructuring, acquisition and other costs, lower finance costs, and lower income taxes, partially offset by higher depreciation and amortization, while adjusted net income decreased this quarter as this measure excludes restructuring, acquisition and other costs.

Substantial free cash flow affords financial flexibility
In the fourth quarter, we continued to generate substantial cash flow from operating activities and free cash flow of $950 million and $274 million, respectively. Our solid financial results enabled us to continue to make investments in our network and still return substantial capital to shareholders. We paid $247 million in dividends this quarter, which represents a 5% increase from the same quarter last year.

Met 2015 Guidance

The following table outlines guidance ranges that we had previously provided and our actual results and achievements for the selected full year 2015 financial metrics:

                                         
                2015       2015        
(In millions of dollars)               Guidance       Actual       Achievement
                                         
Consolidated Guidance 1                                        
  Adjusted operating profit 2               5,020   to   5,175       5,032      
  Additions to property, plant and equipment 3               2,350   to   2,450       2,440      
  Free cash flow 2               1,525   to   1,675       1,676      
     
  Achieved Exceeded
     
The preceding table outlines guidance ranges for selected full-year 2015 consolidated financial metrics
provided in our January 29, 2015 earnings release and subsequently updated on July 23, 2015 to increase our
free cash flow guidance by $175 million, which reflected the value of tax loss carry forwards acquired as part of
the Mobilicity transaction that closed on July 2, 2015.
Adjusted operating profit and free cash flow are non-GAAP measures and should not be considered as a
substitute or alternative for GAAP measures. These are not defined terms under IFRS and do not have
standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP
Measures" for information about these measures, including how we calculate them.
3 Includes additions to property, plant and equipment for the Wireless, Cable, Business Solutions, Media,
and Corporate segments and does not include expenditures on spectrum licences.
     

2016 Outlook

We expect steady growth in operating revenue and adjusted operating profit and lower additions to property, plant and equipment to drive higher free cash flow. We expect to have the financial flexibility to maintain our network advantages, to begin reducing debt, and to continue to return cash to shareholders.

                                           
                      2015       2016 Guidance
(In millions of dollars, except percentages)                     Actual         Ranges 1
                                           
Consolidated Guidance                                          
  Operating revenue                     13,414       Increase of 1%     to     3%
  Adjusted operating profit 2                     5,032       Increase of 1%     to     3%
  Additions to property, plant and equipment 3                     2,440       2,300     to     2,400
  Free cash flow 2                     1,676       Increase of 1%     to     3%

Guidance ranges presented as percentages reflect percentage increases over 2015 actual results.
Adjusted operating profit and free cash flow are non-GAAP measures and should not be considered
as a substitute or alternative for GAAP measures. These are not defined terms under IFRS and do
not have standard meanings, so may not be a reliable way to compare us to other companies. See
"Non-GAAP Measures" for information about these measures, including how we calculate them.
3  Includes additions to property, plant and equipment for the Wireless, Cable, Business Solutions,
Media, and Corporate segments but does not include expenditures for spectrum licences.

The above table outlines guidance ranges for selected full year 2016 consolidated financial metrics. These ranges take into consideration our current outlook and our actual results for 2015. The purpose of the financial outlook is to assist investors, shareholders, and others in understanding certain financial metrics relating to expected 2016 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" 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, which are consistent with annual full-year Board-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.

Rogers 3.0

Our Rogers 3.0 plan is a multi-year plan intended to:

  • re-accelerate revenue growth in a sustainable way; and
  • continue the company's track record of translating revenue into strong margins, robust free cash flow, and a solid return on assets, ultimately increasing returns to shareholders.

There are a number of opportunities we expect will help drive improved performance going forward, including:

  • further improving the customer experience;
  • maintaining leadership and momentum in Wireless;
  • strengthening our Cable proposition; and
  • driving growth in the business market.

Improving the Customer Experience
In 2015, we made key strides in our continuous pursuit to improve the customer experience. Rogers showed the biggest improvement amongst our primary competitors in reducing customer complaints, which were down 26% for the period August 1, 2014 to July 31, 2015 and down 50% over the past two years. We believe our improvements to the customer experience were key drivers in lowering Wireless postpaid churn this quarter, despite the heightened competitive activity and the impact of the "double cohort". We also reduced the number of times our customers contacted us by 12.7% in 2015. We are committed to enhancing our self-serve options, which we expect will further decrease the need for customers to reach out and drive cost savings. During the quarter, we were also the first communications provider in the world to introduce customer care on Facebook Messenger.

Additionally in 2015, Ookla, a global leader in broadband speed testing, named Rogers as both Canada's Fastest ISP and Canada's Fastest Mobile Network. We believe this confirms how our network investments are also driving high quality customer experiences.

Maintaining Leadership and Momentum in Wireless
As part of Rogers 3.0, we first focused on our largest business, Wireless. Our compelling value propositions, leading content, and best-in-class network have attracted and helped us retain higher-value customers. We achieved 106,000 Wireless net postpaid additions in 2015, up from marginal net losses in the prior year.

We expect lower overall additions to property, plant and equipment in 2016 following our acquisitions and deployment of premium spectrum in 2015 and improved capital efficiency, including leveraging better pricing, in part due to our unique strategic partnership with Vodafone in Canada.

Strengthening Our Cable Proposition
We enter 2016 with an improved outlook for Cable with:

  • the strong popularity of IGNITE Internet and the planned offering of IGNITE Gigabit to our entire footprint by the end of 2016, ahead of our competitors; and
  • enhanced video offerings including an improved legacy user interface, 4K TV, and the launch of Internet Protocol Television (IPTV).

IGNITE Internet
We announced plans to deliver gigabit Internet speeds to our entire cable footprint of over four million homes by the end of 2016 at an incremental in-year capital cost of less than $50 per home. We will increase capacity as the demand for speed grows with further annual success-based capital investments, positioning us well to earn attractive returns on investment for our shareholders.

Launch of 4K TV
In 2015, we made the largest commitment to live sports broadcasting in 4K in North America, rolling out our new NextBox 4K set-top box and announcing more than 100 live sporting events to be televised in 4K. This month, we delivered the world's first NBA and NHL games in 4K.

Driving Growth in the Business Market
We believe Rogers is currently under-indexed in this growing market. In 2015, we established a solid foundation for a plan to capture market share through next-generation technology offerings. We also introduced the first in a series of leapfrog technologies with the launch of a managed Wi-Fi service, as well as a set of new, cloud-managed cybersecurity services so businesses of all sizes can run their networks in a safe and secure environment. It will take time to educate and penetrate the market on these new offerings, but we look forward to the contribution from this longer-term growth opportunity.

About non-GAAP measures
This earnings release contains non-GAAP measures such as adjusted operating profit, adjusted operating profit margin, adjusted net income, free cash flow, adjusted net debt, adjusted net debt / adjusted operating profit, and adjusted basic and diluted earnings per share. These are non-GAAP measures and should not be considered as a substitute or alternative for GAAP measures. These are not defined terms under International Financial Reporting Standards (IFRS), and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP Measures" in this earnings release for information about these measures, including how we calculate them.

About Rogers
Rogers Communications is a leading diversified public Canadian communications and media company. We are Canada's largest provider of wireless communications services and one of Canada's leading providers of cable television, high-speed Internet and telephony services to consumers and businesses. Through Rogers Media, we are engaged in radio and television broadcasting, televised shopping, magazines and trade publications, sports entertainment, and digital media. Our stock is publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). For further information about the Rogers group of companies, please visit rogers.com.

Information on or connected to our website is not part of or incorporated into this earnings release.

Quarterly Investment Community Teleconference

The fourth quarter 2015 results teleconference with the investment community will be held on:

  • January 27, 2016
  • 8:00 a.m. Eastern Time
  • webcast available at rogers.com/webcast
  • media are welcome to participate on a listen-only basis

A rebroadcast will be available at rogers.com/investors on the Events and Presentations page for at least two weeks following the teleconference. Additionally, investors should note that from time to time, Rogers' management presents at brokerage-sponsored investor conferences. Most often, but not always, these conferences are webcast by the hosting brokerage firm, and when they are webcast, links are made available on Rogers' website at rogers.com/events and are placed there generally at least two days before the conference.

For More Information

You can find additional information relating to us on our website (rogers.com/investors) and on SEDAR (sedar.com), on EDGAR (sec.gov), or by e-mailing your request to investor.relations@rci.rogers.com. Information on or connected to these and other websites referenced in this earnings release is not part of, or incorporated into, this earnings release.

You can also go to rogers.com/investors for information about our governance practices, corporate social responsibility reporting, a glossary of communications and media industry terms, and additional information about our business.

About this Earnings Release

This earnings release contains important information about our business and our performance for the three months ended December 31, 2015, as well as forward-looking information about future periods. This earnings release should be used as preparation for reading our forthcoming MD&A and Audited Consolidated Financial Statements for the year ended December 31, 2015 in respect of such annual financial statements, which we intend to file with securities regulators in Canada and the US in the next few weeks. These statements will be made available on the rogers.com/investors, sedar.com, and sec.gov websites 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 2014 Annual Management's Discussion and Analysis (MD&A) and our 2014 Audited Consolidated Financial Statements, our 2015 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 sedar.com or EDGAR at sec.gov, respectively.

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 of January 26, 2016 and was approved by the Audit and Risk Committee of the Rogers Communications Inc. Board of Directors (the Board) on that date. This earnings release includes forward-looking statements and assumptions. See "About Forward-Looking Information" for more information.

We, us, our, Rogers, Rogers Communications, and the Company refer to Rogers Communications Inc. and our subsidiaries. RCI refers to the legal entity Rogers Communications Inc., not including our subsidiaries.

In this earnings release, this quarter refers to the three months ended December 31, 2015, and year to date refers to the twelve months ended December 31, 2015. All results commentary is compared to the equivalent periods in 2014 or as at December 31, 2014, unless otherwise indicated.

Four Business Segments
We report our results of operations in four segments. Each segment and the nature of its business are as follows:

         
Segment       Principal activities
Wireless       Wireless telecommunications operations for Canadian consumers and businesses.
Cable       Cable telecommunications operations, including Internet, television, and telephony (phone) services for Canadian consumers and businesses.
Business
Solutions
      Network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for small, medium, and large Canadian businesses, governments, and on a wholesale basis to other telecommunications providers.
Media       A diversified portfolio of media properties, including television and radio broadcasting, specialty channels, multi-platform shopping, publishing, sports media and entertainment, and digital media.

During the year, Wireless, Cable, and Business Solutions were operated by our wholly-owned subsidiary, Rogers Communications Partnership (RCP), and certain of our other wholly-owned subsidiaries. Media is operated by our wholly-owned subsidiary, Rogers Media Inc., and its subsidiaries.

On January 1, 2016, Fido Solutions Inc., a subsidiary of RCI, transferred its partnership interest in RCP to Rogers Cable and Data Centres Inc. (RCDCI), a subsidiary of RCI, leaving RCDCI as the sole partner of RCP, thereby causing RCP to cease to exist. RCDCI became the owner of all the assets and assumed all the liabilities previously held by RCP. Subsequent to the reorganization, RCDCI changed its name to Rogers Communications Canada Inc. (RCCI).

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) 2015 2014 % Chg   2015 2014 % Chg
               
Operating revenue              
  Wireless 1,981 1,898 4   7,651 7,305 5
  Cable 855 871 (2)   3,465 3,467 -
  Business Solutions 95 97 (2)   377 382 (1)
  Media 560 544 3   2,079 1,826 14
  Corporate items and intercompany eliminations (39) (44) (11)   (158) (130) 22
Operating revenue 3,452 3,366 3   13,414 12,850 4
               
Adjusted operating profit              
  Wireless 754 725 4   3,239 3,246 -
  Cable 426 424 -   1,658 1,665 -
  Business Solutions 30 34 (12)   116 122 (5)
  Media 56 78 (28)   172 131 31
  Corporate items and intercompany eliminations (40) (28) 43   (153) (145) 6
Adjusted operating profit 1 1,226 1,233 (1)   5,032 5,019 -
               
Adjusted operating profit margin 1 35.5% 36.6% (1.1 pts)   37.5% 39.1% (1.6 pts)
               
Net income 299 297 1   1,381 1,341 3
Basic earnings per share $ 0.58 $ 0.58 -   $ 2.68 $ 2.60 3
               
Adjusted net income 1 331 355 (7)   1,490 1,532 (3)
Adjusted basic earnings per share 1 $ 0.64 $ 0.69 (7)   $ 2.89 $ 2.97 (3)
               
Additions to property, plant and equipment 773 664 16   2,440 2,366 3
Free cash flow 1 274 275 -   1,676 1,437 17
Cash provided by operating activities 950 1,031 (8)   3,747 3,698 1

1 Adjusted operating profit, adjusted operating profit margin, adjusted net income, adjusted basic earnings per share, and free cash flow
are non-GAAP measures and should not be considered as a substitute or alternative for GAAP measures. These are not defined terms
under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See "Non-GAAP
Measures" for information about these measures, including how we calculate them.

Results of our Business Segments

WIRELESS

Wireless Financial Results

               
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars, except margins) 2015 1 2014 % Chg   2015 1 2014 % Chg
               
Operating revenue              
  Network revenue 1,747 1,701 3   6,902 6,743 2
  Equipment sales 234 197 19   749 562 33
Operating revenue 1,981 1,898 4   7,651 7,305 5
               
Operating expenses              
  Cost of equipment 2 569 497 14   1,845 1,488 24
  Other operating expenses 658 676 (3)   2,567 2,571 -
Operating expenses 1,227 1,173 5   4,412 4,059 9
               
Adjusted operating profit 754 725 4   3,239 3,246 -
               
Adjusted operating profit margin as a % of network revenue 43.2% 42.6% 0.6 pts   46.9% 48.1% (1.2 pts)
Additions to property, plant and equipment 235 258 (9)   866 978 (11)

1  The operating results of Mobilicity are included in the Wireless results of operations from the date of acquisition on July 2, 2015.
Includes the cost of equipment sales and direct channel subsidies.

Wireless Subscriber Results 1

               
  Three months ended December 31   Twelve months ended December 31
(In thousands, except churn, ARPA, and ARPU) 2015 2014 Chg   2015 2014 Chg
               
Postpaid              
  Gross additions 365 297 68   1,354 1,238 116
  Net additions (losses) 31 (58) 89   106 (1) 107
  Total postpaid subscribers 2,3 8,271 8,073 198   8,271 8,073 198
  Churn (monthly) 1.35% 1.46% (0.11 pts)   1.27% 1.27% -
  ARPA (monthly) $ 112.07 $ 107.95 $ 4.12   $ 110.74 $ 106.41 $ 4.33
Prepaid              
  Gross additions 179 138 41   677 507 170
  Net additions (losses) 27 11 16   75 (52) 127
  Total prepaid subscribers 3,4 1,606 1,377 229   1,606 1,377 229
  Churn (monthly) 3.17% 3.09% 0.08 pts   3.45% 3.42% 0.03 pts
Blended ARPU (monthly) $ 59.16 $ 59.86 ($ 0.70)   $ 59.71 $ 59.41 $ 0.30

1 Subscriber counts, subscriber churn, postpaid ARPA, and blended ARPU are key performance indicators. See "Key
Performance Indicators".
2  Effective January 1, 2015 and on a prospective basis, our Wireless postpaid subscriber results included Wireless
Home Phone subscribers resulting in a base adjustment of approximately 92,000 cumulative subscribers, which are
not included in net additions, but do appear in the ending total balance for December 31, 2015.
3  As at end of period.
4  On July 2, 2015, we acquired approximately 154,000 Wireless prepaid subscribers as a result of our acquisition of
Mobilicity, which are not included in net additions, but do appear in the ending total balance for December 31, 2015.

Network revenue
The 3% increase in network revenue this quarter was a result of:

  • the continued adoption of customer-friendly Rogers Share Everything plans, which generate higher postpaid ARPA, bundle in various calling features and long distance, provide the ability to pool data usage across multiple devices, and grant access to our other offerings, such as Roam Like Home, Rogers NHL GameCentre LIVE, Spotify, shomi, and Texture by Next Issue;
  • an adjustment pertaining to the anticipated usage of our loyalty programs; and
  • our acquisition of Mobilicity; partially offset by
  • a 9% decrease in roaming revenue this quarter as a result of changes to roaming plans, including the introduction of Roam Like Home in the US, Caribbean, Mexico, Latin America, and Europe, which simplify the customer experience and provide greater value to the customer. We believe roaming revenue was also impacted by lower outbound customer travel volumes, which we believe to be connected to the depreciation of the Canadian dollar.

The 4% increase in postpaid ARPA this quarter was a result of the continued adoption of Rogers Share Everything plans relative to the number of subscriber accounts as customers increasingly utilize the advantages of premium offerings and access their shareable plans with multiple devices on the same account.

The 1% decrease in blended ARPU this quarter was a result of:

  • the inclusion of lower-blended-ARPU-generating Wireless Home Phone subscribers in our postpaid base; and
  • the impact of expanding our lower-blended-ARPU-generating prepaid subscriber base relative to our total subscriber base as a result of our acquisition of Mobilicity and the general increase in prepaid net additions; partially offset by
  • increased network revenue as discussed above.

Excluding the impact of roaming revenue and the addition of Mobilicity and Wireless Home Phone subscribers, blended ARPU would have increased by 2% this quarter.

We believe the increases in gross and net additions to our postpaid subscriber base and lower postpaid churn this quarter were results of our strategic focus on enhancing the customer experience by providing higher-value offerings, such as our new Share Everything plans, and improving our customer service. Significantly, this was achieved during the industry's "double cohort" period and with heightened competitive activity.

The "double cohort" refers to the greater-than-usual number of subscriber contracts that ended as both three-year and two-year contracts expired near the same time. This industry-wide impact commenced late in the second quarter of 2015 and will generally result in subscribers being on shorter-term contracts than in the past.

Equipment sales
The 19% increase in revenue from equipment sales this quarter was a result of:

  • a greater number of gross additions with device activations by new subscribers;
  • a 1% increase in device upgrades by existing subscribers; and
  • increases in equipment sales prices.

Operating expenses
The 14% increase in the cost of equipment sales this quarter was a result of:

  • a shift in the product mix of device sales and upgrades towards higher-cost smartphones; and
  • increased equipment sales volumes from our higher gross additions and higher upgrades this quarter.

Total customer retention spending (primarily consisting of subsidies on handset upgrades) was 3% lower this quarter as a result of:

  • improvements in our sales channels resulting in lower commissions; partially offset by
  • increased device upgrades by existing subscribers as discussed above; and
  • increased subsidy rates provided on higher-cost smartphones.

Other operating expenses (excluding retention spending) increased this quarter as a result of higher service costs and incremental expenses resulting from our acquisition of Mobilicity, partially offset by efficiency gains and improvements in cost management.

Adjusted operating profit
The 4% increase in adjusted operating profit this quarter was a result of network revenue growth, partially offset by the increased net subsidies associated with higher gross additions and higher-cost smartphones.

CABLE

Cable Financial Results

               
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars, except margins) 2015 1 2014 % Chg   2015 1 2014 % Chg
               
Operating revenue              
  Internet 348 317 10   1,343 1,245 8
  Television 403 433 (7)   1,669 1,734 (4)
  Phone 102 118 (14)   445 478 (7)
  Service revenue 853 868 (2)   3,457 3,457 -
  Equipment sales 2 3 (33)   8 10 (20)
Operating revenue 855 871 (2)   3,465 3,467 -
               
Operating expenses              
  Cost of equipment 2 2 -   4 6 (33)
  Other operating expenses 427 445 (4)   1,803 1,796 -
Operating expenses 429 447 (4)   1,807 1,802 -
               
Adjusted operating profit 426 424 -   1,658 1,665 -
               
Adjusted operating profit margin 49.8% 48.7% 1.1 pts   47.8% 48.0% (0.2 pts)
Additions to property, plant and equipment 308 291 6   1,030 1,055 (2)

1  The operating results of Source Cable Ltd. (Source Cable) are included in the Cable results of operations from the
date of acquisition on November 4, 2014.

Cable Subscriber Results 1

               
  Three months ended December 31   Twelve months ended December 31
(In thousands) 2015 2014 Chg   2015 2014 Chg
               
Internet              
  Net additions (losses) 16 (4) 20   37 34 3
  Total Internet subscribers 2,3 2,048 2,011 37   2,048 2,011 37
Television              
  Net losses (24) (36) 12   (128) (119) (9)
  Total television subscribers 2,3 1,896 2,024 (128)   1,896 2,024 (128)
Phone              
  Net losses (15) (18) 3   (60) (14) (46)
  Total phone subscribers 2,3 1,090 1,150 (60)   1,090 1,150 (60)
                 
Cable homes passed 2,3 4,153 4,068 85   4,153 4,068 85
Total service units 4              
  Net losses (23) (58) 35   (151) (99) (52)
  Total service units 2,3 5,034 5,185 (151)   5,034 5,185 (151)

1  Subscriber counts are key performance indicators. See "Key Performance Indicators".
2  On November 4, 2014, we acquired approximately 16,000 Internet subscribers, 16,000 Television subscribers
and 11,000 Phone subscribers from our acquisition of Source Cable, which are not included in net additions,
but do appear in the ending total balance for December 31, 2014. The acquisition also increased homes
passed by 26,000.
3  As at end of period.
4  Includes Internet, Television, and Phone subscribers.

Operating revenue
The 2% decrease in operating revenue this quarter was primarily a result of:

  • Television and Phone subscriber losses over the past year; and
  • more promotional pricing provided to subscribers; partially offset by
  • the movement of Internet customers to higher speed and usage tiers, combined with a higher subscriber base for our Internet products; and
  • the impact of pricing changes implemented over the past year.

Internet revenue
The 10% increase in Internet revenue this quarter was a result of:

  • general movement of customers to higher speed and usage tiers of our IGNITE broadband Internet offerings that provide subscribers with broader choices of speed and data usage and incorporate bundled, value-added content;
  • a larger Internet subscriber base; and
  • the impact of changes in Internet service pricing; partially offset by
  • a decline in additional usage-based revenue as portions of the subscriber base move to the higher-value, unlimited usage plans.

Television revenue
The 7% decrease in Television revenue this quarter was a result of:

  • the decline in Television subscribers over the past year primarily associated with the changing television consumption environment; and
  • more promotional pricing provided to subscribers; partially offset by
  • the impact of pricing changes implemented over the past year.

Phone revenue
The 14% decrease in Phone revenue this quarter was a result of:

  • a smaller subscriber base; and
  • more promotional pricing provided to subscribers, mainly related to IGNITE multi-product bundles.

Operating expenses
The 4% decrease in operating expenses this quarter was a result of:

  • relative shifts in product mix to higher-margin Internet from conventional Television broadcasting; and
  • various cost efficiency and productivity initiatives.

Adjusted operating profit
The marginal increase in adjusted operating profit this quarter was a result of the revenue and expense changes discussed above.

BUSINESS SOLUTIONS

Business Solutions Financial Results

               
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars, except margins) 2015 1 2014 % Chg   2015 1 2014 % Chg
               
Operating revenue              
  Next generation 74 71 4   288 271 6
  Legacy 20 24 (17)   85 106 (20)
  Service revenue 94 95 (1)   373 377 (1)
  Equipment sales 1 2 (50)   4 5 (20)
Operating revenue 95 97 (2)   377 382 (1)
               
Operating expenses 65 63 3   261 260 -
               
Adjusted operating profit 30 34 (12)   116 122 (5)
               
Adjusted operating profit margin 31.6% 35.1% (3.5 pts)   30.8% 31.9% (1.1 pts)
Additions to property, plant and equipment 65 53 23   187 146 28

1 The operating results of Internetworking Atlantic Inc. are included in the Business Solutions results of operations from
the date of acquisition on November 30, 2015.

Operating revenue
The 1% decrease in service revenue this quarter was a result of:

  • the continued decline in our legacy and off-net voice business, a trend we expect to continue as we focus the business on next generation on-net and near-net opportunities and customers move to more advanced and cost-effective IP-based services and solutions; partially offset by
  • the continued execution of our plan to grow higher-margin, next generation on-net and near-net IP-based services revenue.

Next generation services, which include our data centre operations, represented 79% (2014 - 75%) of total service revenue in the quarter.

Operating expenses
The 3% increase in operating expenses this quarter was a result of higher service costs.

Adjusted operating profit
The 12% decrease in adjusted operating profit this quarter was a result of the revenue and expense changes discussed above.

Other Business Solutions developments
On November 30, 2015, we acquired 100% of the common shares of Internetworking Atlantic Inc. (IAI) for $6 million. IAI provides enhanced technology solutions and services for business and public sector clients in Atlantic Canada. The acquisition of IAI will enable us to offer greater local expertise in the areas of cloud computing, data centre services, fibre networking, and professional services.

MEDIA

Media Financial Results

               
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars, except margins) 2015 2014 % Chg   2015 2014 % Chg
               
Operating revenue 560 544 3   2,079 1,826 14
Operating expenses 504 466 8   1,907 1,695 13
               
Adjusted operating profit 56 78 (28)   172 131 31
               
Adjusted operating profit margin 10.0% 14.3% (4.3 pts)   8.3% 7.2% 1.1 pts
Additions to property, plant and equipment 28 28 -   60 94 (36)

Operating revenue
The 3% increase in operating revenue this quarter was a result of:

  • higher subscription and advertising revenue generated by our Sportsnet properties; and
  • higher Toronto Blue Jays game day and merchandise revenue as a result of the postseason; partially offset by
  • continued softness in conventional broadcast TV and print advertising; and
  • lower merchandise sales at The Shopping Channel (TSC).

Operating expenses
The 8% increase in operating expenses this quarter was a result of:

  • higher sports-related programming and production costs;
  • higher costs related to the Toronto Blue Jays as a result of the postseason; partially offset by
  • lower conventional broadcast TV programming costs;
  • lower publishing costs; and
  • operating efficiencies realized across various Media divisions.

Adjusted operating profit
The 28% decrease in adjusted operating profit this quarter was a result of the revenue and expense changes described above, mainly from conventional areas of TV and publishing.

ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT

               
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars, except capital intensity) 2015 2014 % Chg   2015 2014 % Chg
               
Additions to property, plant and equipment              
  Wireless 235 258 (9)   866 978 (11)
  Cable 308 291 6   1,030 1,055 (2)
  Business Solutions 65 53 23   187 146 28
  Media 28 28 -   60 94 (36)
  Corporate 137 34 n/m   297 93 n/m
                
Total additions to property, plant and equipment 1 773 664 16   2,440 2,366 3
               
Capital intensity 2 22.4% 19.7% 2.7 pts   18.2% 18.4% (0.2 pts)

1  Additions to property, plant and equipment do not include expenditures on spectrum licences.
2  Capital intensity is a key performance indicator. See "Key Performance Indicators".
n/m - not meaningful

Wireless
The decrease in additions to property, plant and equipment in Wireless this quarter was a result of lower expenditures on our wireless network, partially offset by higher software and information technology costs required to activate the spectrum we acquired in previous quarters. Deployment of our LTE network has reached approximately 93% of Canada's population as at December 31, 2015 (December 31, 2014 - 84%).

Cable
The increase in additions to property, plant and equipment in Cable this quarter was a result of greater investment in information technology infrastructure to further improve the reliability and quality of the network and to improve the capacity of our Internet platform to deliver gigabit Internet speeds as well as higher purchases of our next generation NextBox digital set-top boxes. We also continued to expand our bandwidth towards the development of our next-generation IP-based video service and digital television guides.

Business Solutions
The increase in additions to property, plant and equipment in Business Solutions this quarter was a result of data centre investments and network expansion to reach additional customers and sites.

Media
The additions to property, plant and equipment in Media were stable this quarter and reflect investments in conventional television, radio, digital assets, and at TSC. In the fourth quarter last year, investments were made to our broadcast facilities, IT infrastructure, and digital assets.

Corporate
The increase in additions to property, plant and equipment in Corporate this quarter was a result of higher spending on premise improvements at our various offices as well as higher information technology costs.

Capital Intensity
Capital intensity increased this quarter as a result of higher additions to property, plant and equipment as described above relative to the increase in revenue described previously in this earnings release.

Key Performance Indicators

We measure the success of our strategy using a number of key performance indicators that are defined and discussed in our 2014 Annual MD&A and this earnings release. We believe these key performance indicators allow us to appropriately measure our performance against our operating strategy as well as against the results of our peers and competitors. The following key performance indicators are not measurements in accordance with IFRS and should not be considered as an alternative to net income or any other measure of performance under IFRS. They include:

  • Subscriber counts;
  • Subscriber churn;
  • Postpaid average revenue per account (ARPA)
  • Average revenue per user (ARPU); and
  • Capital intensity.

Commencing in the first quarter of 2015, we began disclosing postpaid ARPA as one of our key performance indicators.

Postpaid average revenue per account - Wireless
Postpaid ARPA helps us identify trends and measure our success in attracting and retaining multiple-device accounts. A single Wireless postpaid account typically provides subscribers with the advantage of allowing for the pooling of plan attributes across multiple devices and on a single bill. Each Wireless postpaid account is represented by an identifiable billing account number. A single Wireless postpaid account may include more than one identifiable telephone number and receive monthly Wireless services for a variety of connected devices including smartphones, basic phones, tablets, and other devices. Wireless postpaid accounts under our various brand names are considered separate accounts. We calculate Wireless postpaid ARPA by dividing total Wireless postpaid network revenue (monthly) by the average number of Wireless postpaid accounts for the same time period.

Non-GAAP Measures

We use the following non-GAAP measures. These are reviewed regularly by management and our Board of Directors in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. Some or all of these measures may also be used by investors, lending institutions, and credit rating agencies as indicators of our operating performance, of our ability to incur and service debt, and as measurements to value companies in the telecommunications sector. These are not recognized measures under GAAP and do not have standard meanings under IFRS, so may not be a reliable way to compare us to other companies.

Non-GAAP
measure
Why we use it How we calculate it Most comparable
IFRS financial
measure

Adjusted
operating profit
and related margin
  • To evaluate the performance of our
    businesses and when making decisions
    about the ongoing operations of the
    business and our ability to generate
    cash flows.
  • We believe that certain investors and
    analysts use adjusted operating profit
    to measure our ability to service debt
    and to meet other payment obligations.
  • We also use it as one component in
    determining short-term incentive
    compensation for all management
    employees.

Adjusted operating profit:
Net income
add (deduct)
income taxes, other expense (income),
finance costs, restructuring, acquisition and
other, depreciation and amortization, stock-
based compensation, and impairment of
assets.

Adjusted operating profit margin:
Adjusted operating profit
divided by
Operating revenue (network revenue for
Wireless).

Net income

Adjusted net
income

Adjusted basic and 
diluted earnings
per share
  • To assess the performance of our
    businesses before the effects of 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
    they are non-recurring.

Adjusted net income:
Net income
add (deduct)
stock-based compensation, restructuring,
acquisition and other, impairment of assets,
(gain) on sale of investments, (gain) on
acquisitions, loss on non-controlling
interest purchase obligations, loss on
repayment of long-term debt, and income
tax adjustments on these items, including
adjustments as a result of legislative changes.

Adjusted basic and diluted earnings per share: 
Adjusted net income
divided by
basic and diluted weighted average shares
outstanding.

Net income

Basic and diluted
earnings per share 

Free cash flow
  • To show how much cash we have
    available to repay debt and reinvest in
    our company, which is an important
    indicator of our financial strength and
    performance.
  • We believe that some investors and
    analysts use free cash flow to value a
    business and its underlying assets.

Adjusted operating profit
deduct
additions to property, plant and equipment,
interest on borrowings net of capitalized
interest, and cash income taxes.

Cash provided by
operating activities

Adjusted net debt
  • To conduct valuation-related analysis
    and make decisions about capital
    structure.
  • We believe this helps investors and
    analysts analyze our enterprise and
    equity value and assess our leverage.

Total long-term debt
add (deduct)
current portion of long-term debt, deferred
transaction costs and discounts, net debt
derivative (assets) liabilities, credit risk
adjustment related to net debt derivatives,
bank advances (cash and cash equivalents),
and short-term borrowings.

Long-term debt

Adjusted net debt /
adjusted operating
profit
  • To conduct valuation-related analysis
    and make decisions about capital
    structure.
  • We believe this helps investors and
    analysts analyze our enterprise and
    equity value and assess our leverage.

Adjusted net debt (defined above)
divided by
12 months trailing adjusted operating profit
(defined above).

Long-term debt
divided by net
income

           
Reconciliation of adjusted operating profit          
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars) 2015 2014   2015 2014
           
Net income 299 297   1,381 1,341
Add (deduct):          
  Income taxes 112 129   466 506
  Other expense (income) 4 (10)   (32) 1
  Finance costs 192 202   774 817
  Restructuring, acquisition and other 23 43   111 173
  Depreciation and amortization 580 560   2,277 2,144
  Stock-based compensation 16 12   55 37
            
Adjusted operating profit 1,226 1,233   5,032 5,019
           
           
Reconciliation of adjusted net income          
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars) 2015 2014   2015 2014
           
Net income 299 297   1,381 1,341
Add (deduct):          
  Stock-based compensation 16 12   55 37
  Restructuring, acquisition and other 23 43   111 173
  Gain on acquisition of Mobilicity - -   (102) -
  Loss on non-controlling interest purchase obligation - -   72 -
  Loss on repayment of long-term debt - -   7 29
  Income tax impact of above items (7) (11)   (40) (62)
  Income tax adjustment, legislative tax change - 14   6 14
            
Adjusted net income 331 355   1,490 1,532
           
           
Reconciliation of adjusted earnings per share          
(In millions of dollars, except per share amounts; Three months ended December 31   Twelve months ended December 31
number of shares outstanding in millions) 2015 2014   2015 2014
           
Adjusted basic earnings per share:          
  Adjusted net income 331 355   1,490 1,532
  Divided by: weighted average number of shares outstanding 515 515   515 515
            
Adjusted basic earnings per share $ 0.64 $ 0.69   $ 2.89 $ 2.97
           
Adjusted diluted earnings per share:          
  Adjusted net income 331 355   1,490 1,532
  Divided by: diluted weighted average number of shares outstanding 517 517   517 517
            
Adjusted diluted earnings per share $ 0.64 $ 0.69   $ 2.88 $ 2.96
           
           
Reconciliation of free cash flow          
  Three months ended December 31   Twelve months ended December 31
(In millions of dollars) 2015 2014   2015 2014
           
Cash provided by operating activities 950 1,031   3,747 3,698
Add (deduct):          
  Additions to property, plant and equipment (773) (664)   (2,440) (2,366)
  Interest on borrowings, net of capitalized interest (185) (192)   (732) (756)
  Restructuring, acquisition and other 23 43   111 173
  Interest paid 133 130   771 778
  Change in non-cash working capital 187 (4)   302 (11)
  Other adjustments (61) (69)   (83) (79)
            
Free cash flow 274 275   1,676 1,437
           
           
Reconciliation of adjusted net debt and adjusted net debt / adjusted operating profit 1
    As at
December 31
    As at
December 31
(In millions of dollars)   2015     2014
           
Current portion of long-term debt   1,000     963
Long-term debt   15,870     13,824
Deferred transaction costs and discounts   111     108
    16,981     14,895
Add (deduct):          
  Net debt derivative assets   (2,028)     (846)
  Credit risk adjustment related to net debt derivatives   (152)     (39)
  Short-term borrowings   800     842
  Cash and cash equivalents   (11)     (176)
            
Adjusted net debt   15,590     14,676
           
    As at
December 31
    As at
December 31
(In millions of dollars, except ratios)   2015     2014
           
Adjusted net debt / adjusted operating profit          
Adjusted net debt   15,590     14,676
Divided by: trailing 12 month adjusted operating profit   5,032     5,019
             
Adjusted net debt / adjusted operating profit   3.1     2.9

1  Effective September 30, 2015, we have retrospectively amended our calculation of adjusted net debt to value the net debt derivatives without
adjustment for credit risk. For accounting purposes in accordance with IFRS, we recognize the fair values of our debt derivatives using an
estimated credit-adjusted mark-to-market valuation by discounting cash flows to the measurement date. For purposes of calculating adjusted
net debt and adjusted net debt / adjusted operating profit, we believe including debt derivatives valued without adjustment for credit risk is
commonly used to evaluate debt leverage and for market valuation and transactional purposes.

Supplementary Information

Rogers Communications Inc.
Condensed Consolidated Statements of Income
(In millions of dollars, except per share amounts, unaudited)

             
    Three months ended December 31   Twelve months ended December 31
    2015 2014   2015 2014
             
Operating revenue   3,452 3,366   13,414 12,850
             
Operating expenses:            
  Operating costs   2,242 2,145   8,437 7,868
  Depreciation and amortization   580 560   2,277 2,144
  Restructuring, acquisition and other   23 43   111 173
Finance costs   192 202   774 817
Other expense (income)   4 (10)   (32) 1
             
Income before income taxes   411 426   1,847 1,847
Income taxes   112 129   466 506
             
Net income   299 297   1,381 1,341
             
Earnings per share:            
  Basic   $ 0.58 $ 0.58   $ 2.68 $ 2.60
  Diluted   $ 0.58 $ 0.57   $ 2.67 $ 2.56

Rogers Communications Inc.
Condensed Consolidated Statements of Financial Position
(In millions of dollars, except per share amounts, unaudited)

                     
            As at
December 31
      As at
December 31
            2015       2014
                     
Assets                    
Current assets:                    
  Cash and cash equivalents           11       176
  Accounts receivable           1,792       1,591
  Inventories           318       251
  Other current assets           303       191
  Current portion of derivative instruments           198       136
Total current assets           2,622       2,345
                     
Property, plant and equipment           10,997       10,655
Intangible assets           7,243       6,588
Investments           2,271       1,898
Derivative instruments           1,992       788
Other long-term assets           150       356
Deferred tax assets           9       9
Goodwill           3,891       3,883
                     
Total assets           29,175       26,522
                     
Liabilities and shareholders' equity                    
                     
Current liabilities:                    
  Short-term borrowings           800       842
  Accounts payable and accrued liabilities           2,708       2,578
  Income tax payable           96       47
  Current portion of provisions           10       7
  Unearned revenue           388       443
  Current portion of long-term debt           1,000       963
  Current portion of derivative instruments           15       40
Total current liabilities           5,017       4,920
                     
Provisions           50       55
Long-term debt           15,870       13,824
Derivative instruments           95       11
Other long-term liabilities           455       462
Deferred tax liabilities           1,943       1,769
Total liabilities           23,430       21,041
                     
Shareholders' equity           5,745       5,481
                     
Total liabilities and shareholders' equity           29,175       26,522

Rogers Communications Inc.
Condensed Consolidated Statements of Cash Flows
(In millions of dollars, except per share amounts, unaudited)

           
  Three months ended December 31   Twelve months ended December 31
  2015 2014   2015 2014
           
Operating activities:          
  Net income for the period 299 297   1,381 1,341
  Adjustments to reconcile net income to cash provided by          
    operating activities:          
    Depreciation and amortization 580 560   2,277 2,144
    Program rights amortization 21 19   87 66
    Finance costs 192 202   774 817
    Income taxes 112 129   466 506
    Stock-based compensation 16 12   55 37
    Post-employment benefits contributions, net of expense 31 15   (16) (34)
    Gain on acquisition of Mobilicity - -   (102) -
    Other 13 25   82 48
  Cash provided by operating activities before changes in          
    non-cash working capital, income taxes paid, and interest paid 1,264 1,259   5,004 4,925
  Change in non-cash operating working capital items (187) 4   (302) 11
  Cash provided by operating activities before income taxes          
    received (paid) and interest paid 1,077 1,263   4,702 4,936
  Income taxes received (paid) 6 (102)   (184) (460)
  Interest paid (133) (130)   (771) (778)
           
Cash provided by operating activities 950 1,031   3,747 3,698
           
Investing activities:          
  Additions to property, plant and equipment (773) (664)   (2,440) (2,366)
  Additions to program rights (27) (96)   (64) (231)
  Changes in non-cash working capital related to property,          
    plant and equipment and intangible assets 167 204   (116) 153
  Acquisitions and other strategic transactions, net of cash          
    acquired (5) (155)   (1,077) (3,456)
  Other (32) (67)   (70) (51)
           
Cash used in investing activities (670) (778)   (3,767) (5,951)
           
Financing activities:          
  Proceeds received on short-term borrowings 22 55   294 276
  Repayment of short-term borrowings (81) -   (336) (84)
  Issuance of long-term debt 2,522 530   7,338 3,412
  Repayment of long-term debt (2,440) (530)   (6,584) (2,551)
  Proceeds on settlement of debt derivatives and forward          
    contracts - -   1,059 2,150
  Payments on settlement of debt derivatives, forward          
    contracts, and bond forwards (25) -   (930) (2,115)
  Transaction costs incurred (9) -   (9) (30)
  Dividends paid (247) (236)   (977) (930)
           
Cash (used in) provided by financing activities (258) (181)   (145) 128
           
Change in cash and cash equivalents 22 72   (165) (2,125)
(Bank advances) cash and cash equivalents, beginning          
  of period (11) 104   176 2,301
           
Cash and cash equivalents, end of period 11 176   11 176

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, and similar expressions, although not all forward-looking information includes them;
  • includes conclusions, forecasts, and projections based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors, most of which are confidential and proprietary and that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
  • was approved by our management on the date of this earnings release.

Our forward-looking information includes forecasts and projections related to the following items, among others:

  • revenue;
  • adjusted operating profit;
  • additions to property, plant and equipment;
  • 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 subscribers and deployment of new services;
  • continued cost reductions and efficiency improvements; and
  • all other statements that are not historical facts.

Specific forward-looking information included or incorporated in this document include, but is not limited to, our information and statements under "2016 Outlook" relating to our 2016 consolidated guidance on operating revenue, adjusted operating profit, additions to property, plant and equipment, and free cash flow. All other statements that are not historical facts are forward-looking statements.

We base our conclusions, forecasts, and projections on the following factors, among others:

  • general economic and industry growth rates;
  • currency exchange rates and interest rates;
  • product pricing levels and competitive intensity;
  • subscriber growth;
  • pricing, usage and churn rates;
  • changes in government regulation;
  • technology deployment;
  • availability of devices;
  • timing of new product launches;
  • content and equipment costs;
  • the integration of acquisitions; 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, announced or may occur after the date the statement containing the forward-looking information is made.

Risks and uncertainties
Actual events and results can be substantially different from what is expressed or implied by forward-looking information as a result of risks, uncertainties, and other factors, many of which are beyond our control, including but not limited to:

  • regulatory changes;
  • technological change;
  • economic conditions;
  • unanticipated changes in content or equipment costs;
  • changing conditions in the communications, entertainment, and information industries;
  • the integration of acquisitions;
  • litigation and tax matters;
  • the level of competitive intensity;
  • the emergence of new opportunities; and
  • new interpretations and new accounting standards from accounting standards bodies.

These factors can also affect our objectives, strategies, and intentions. Many of these factors are beyond our control or our current expectations or knowledge. Should one or more of these risks, uncertainties, or other factors materialize, our objectives, strategies, or intentions change, or any other factors or assumptions underlying the forward-looking information prove incorrect, our actual results and our plans could vary significantly from what we currently foresee.

Accordingly, we warn investors to exercise caution when considering statements containing forward-looking information and caution them that it would be unreasonable to rely on such statements as creating legal rights regarding our future results or plans. We are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing forward-looking information or the factors or assumptions underlying them, whether as a result of new information, future events, or otherwise, except as required by law. All of the forward-looking information in this earnings release is qualified by the cautionary statements herein.

Key assumptions underlying our 2016 guidance
Our 2016 guidance ranges under "2016 Outlook" are based on many assumptions including, but not limited to, the following material assumptions:

  • Continued intense competition in all segments in which we operate.
  • A substantial portion of our US dollar-denominated expenditures has been hedged at an average exchange rate of $1.22/US$.
  • Key interest rates will remain relatively stable throughout 2016.
  • No significant additional regulatory developments, shifts in economic conditions, or macro changes in the competitive environment affecting our business activities will occur. We note that regulatory decisions expected during 2016 could materially alter underlying assumptions around our Wireless, Cable, Business Solutions, and/or Media results in the current and future years, the impacts of which are currently unknown and not factored into our guidance.
  • The CRTC decision to require distributors to offer a basic entry-level television package capped at $25 per month, as well as channels above the basic tier on an "à la carte" basis or in smaller, reasonably priced packages by March 1, 2016, and both "à la carte" and in smaller, reasonably priced packages by December 1, 2016, is not expected to materially impact our Cable operating revenue.
  • Wireless customers will continue to adopt, and upgrade to, higher-value smartphones and a similar proportion of customers will remain on term contracts.
  • Overall wireless market penetration in Canada is expected to grow in 2016 at a similar rate as in 2015.
  • Continued subscriber growth in Wireless and Cable Internet; moderating net losses in Cable Television and Home Phone subscribers.
  • In Business Solutions, continued declines in our legacy and off-net business, and the continued execution of our plan to grow higher margin-next generation IP- and cloud-based services.
  • In Media, continued growth in Sportsnet and declines in our traditional media businesses.
  • With respect to additions to property, plant and equipment:
    • We expect to complete our analog-to-digital conversion during the first quarter of 2016.
    • We can offer IGNITE Gigabit Internet services in 2016 using available spectrum capacity on our fibre-coaxial network at an incremental capital cost of less than $50 per home. We will increase capacity as the demand for speed grows with further annual success-based capital investments.
    • We have rolled out LTE across the majority of our coverage area as well as deployed newly-acquired 700 MHz and AWS-1 spectrum.
    • We made significant investments in our IPTV technology and legacy set-top boxes to bridge the customer experience pre-IPTV, thus gaining measurable unit cost efficiencies.

Before making an investment decision
Before making any investment decisions and for a detailed discussion of the risks, uncertainties and environment associated with our business, fully review the sections "Regulation in Our Industry" and "Governance and Risk Management" in our 2014 Annual MD&A, as well as our various other filings with Canadian and US securities regulators, which can be found at sedar.com and sec.gov, respectively.

 

 

 

SOURCE Rogers Communications Canada Inc. - English

For further information:


Investment community contact 

Amy Schwalm
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