Rogers 2021 Annual Report
Rogers 2021 Annual Report
2021
Annual
Report
Rogers Communications Inc.
Our Purpose
To connect
Canadians to what
matters most in
their lives.
03 04 06 08
About A Message A Message Executive
Rogers from from Leadership
Tony Edward Team
09 10 146
Directors 2021 Corporate and
Financial shareholder
Report information
We are a team of
proud Canadians
dedicated to delivering
world-class networks,
communications services,
and entertainment to
millions of customers
across Canada.
My fellow shareholders,
It is a privilege and an honour to serve you, our Board Network leadership
and Rogers in my new role with this company. This
year will be one of the most significant and exciting We are proud of our leading network position and
for our business since it was founded by Ted Rogers in 2022 we will increase investments in our award-
more than 60 years ago. winning networks that are critical to our long-term
growth and success.
As a company, we continue to have the best wireless,
cable and media assets in the industry. And this year, We were the first to bring 5G connectivity to
we will come together with Shaw to create a truly Canadians and today, our 5G network is the largest
national network operator that will offer Canadians and most reliable in the country. We will continue
more choice in more places, and allow us to compete to enhance and expand our 5G network, utilizing
more effectively in the Canadian marketplace. Our our spectrum licences to the fullest, including our
entrepreneurial roots have always encouraged us to recently acquired national 3500 MHz spectrum
make bold investments in our business and in this licences, critical to 5G advancements that will
country, and we are continuing that legacy. introduce a new generation of 5G innovation and
services.
Importantly, the country and our businesses are now
emerging from the significant impacts of the COVID- Our investments in our cable business will also
19 pandemic. These last two years have been difficult ramp up this year as we continue to collaborate
for many, but the start of the recovery is positive and with CableLabs to bring the 10G initiative to life,
encouraging for all Canadians. All around us we see with DOCSIS 4.0 technology coming to market
signs of economic growth that provide a meaningful soon. Combined with our Ignite customer interface
and encouraging backdrop for our own growth platform, we will continue to deliver industry-leading
aspirations. value propositions to Canadians across our entire
cable footprint.
Our priorities will be centred on creating meaningful
long-term growth in shareholder value. To achieve Furthermore, we appreciate the role we play in
this, our strategy will be focused on continuing expanding our network to all Canadians and
investments to ensure network leadership combined bridging the digital divide. Too many homes and
with leading customer service. We know we have work businesses today are without adequate Internet. Our
to do in these areas in the near term, and our priorities Shaw transaction will be an important enabler for
are clear. this agenda, allowing us to reach more Canadians
through our wireless and cable networks. But in
addition to this transaction, we are increasing our
investments in expanding fibre and fixed wireless
access to cover more homes across the nation, and in
particular those in rural and isolated communities.
Underpinning our success will be our 23,000 talented, As we come together with Shaw, renew our focus
entrepreneurial, and motivated employees across on execution, and build on the momentum across
Canada. Despite the ongoing challenges of the our businesses, I am confident that we will drive
pandemic, I have admired our team’s commitment to sustainable growth and increase value for our
our customers and our communities. As we move to shareholders.
capitalize on the opportunities ahead of us, I know we
are all excited about evolving our performance-based In closing, while we ended 2021 with improving
culture – taking the best of our talents and putting execution, increasing momentum, and solid
them together to create tangible and meaningful fundamentals, we know we need to perform better
outcomes for our customers. Importantly, I am proud for our customers and our shareholders. I am
of our strong new leadership team – collectively they confident that through our resetting of priorities
bring deep industry and company experience, and a for 2022, together with increased investments
proven ability to drive operational improvements and in our networks, enhancements to our customer
results. experience, improvements in our execution, and the
realization of meaningful cost efficiencies across our
Rogers and Shaw businesses, we will be well positioned to translate
our revenue growth into increased profitability and
The combination of Rogers and Shaw builds on more value for our shareholders. This is reflected in
the strong legacy of two family-founded Canadian our 2022 guidance for stronger growth across all our
companies. The combined company will have the businesses.
scale, assets, and capabilities needed to make
the levels of investment that Canada's digital I would like to thank our employees, customers, and
infrastructure needs, create jobs across Canada, offer you, our shareholders, for your continued support.
greater choice and competition, build on our shared You can count on all of us here at Rogers to make you
legacy of giving back to communities, and help proud of our next phase of evolution and growth.
Canada lead in the global digital economy.
Simply put, Rogers and Shaw can do more together Tony Staffieri
than each company can do on its own. This includes President and Chief Executive Officer
My fellow shareholders,
At Rogers we are proud to be continuing the Making progress, striving for better
legacy my father began more than 60 years ago.
Rogers is committed to ensuring the best for our As a board, our focus is on the long-term success of
customers, our employees, all Canadians, and all our our business, enabled by the right investments and
shareholders. decisions to drive both future growth, and strong
results over the short and medium term.
From the start, building this company has been about
making the long-term investments in the assets That is why we took important strategic steps in 2021
our business needs and bringing them to life for designed to capture the significant and exciting
Canadians. Throughout our history, from our very first opportunities ahead for Rogers. In addition to
radio station, to the first mobile phone call in 1985, announcing our agreement with Shaw, we made
to the latest in wireless 5G and cable DOCSIS 4.0 changes to our Board and management team to
technology, the importance of our role in connecting ensure we are well placed to improve the overall
Canadians together has never been clearer. performance of our business and deliver the full
benefits of the transaction.
The coming together of Rogers and Shaw this year
is another bold step that will give us the scale and I have full confidence in our Board of Directors,
capabilities to accelerate much-needed investment in our new CEO, our management team, our 23,000
our networks across Western Canada, increase choice talented employees and the durable foundation we
for consumers and businesses, and bridge the digital are building for the future together.
divide between rural and urban communities.
With our renewed focus on performance and
We believe passionately that Rogers and Shaw execution, our results are showing encouraging signs
together, two storied entrepreneurial Canadian of improvement and momentum continues to build
companies with the same vision, will contribute across our businesses.
to a stronger future for Canada. There is fulsome
stakeholder value associated with this transaction, As we look ahead, our prospects are strong, and our
and we have made extensive and meaningful future is bright. We are committed to completing
commitments to ensure this transaction benefits the transformational transaction with Shaw, driving
Canadians. growth across our lines of business, making the right
long-term investments in our networks and customer
experience, and generating strong returns for
shareholders.
• technology and network deployment; These risks, uncertainties, and other factors can also affect our
• availability of devices; objectives, strategies, and intentions. Many of these risks,
• timing of new product launches; uncertainties, and other factors are beyond our control or our
• content and equipment costs; current expectations or knowledge. Should one or more of these
• the integration of acquisitions; risks, uncertainties, or other factors materialize, our objectives,
• industry structure and stability; and strategies, or intentions change, or any other factors or
• the impact of COVID-19 on our operations, liquidity, financial assumptions underlying the forward-looking information prove
condition, or results. incorrect, our actual results and our plans could vary significantly
from what we currently foresee.
Except as otherwise indicated, this MD&A and our forward-looking
information do not reflect the potential impact of any non-recurring Accordingly, we warn investors to exercise caution when
or other special items or of any dispositions, monetization events, considering statements containing forward-looking information
mergers, acquisitions, other business combinations, or other and caution them that it would be unreasonable to rely on such
transactions that may be considered or announced or may occur statements as creating legal rights regarding our future results or
after the date on which the statement containing the forward- plans. We are under no obligation (and we expressly disclaim any
looking information is made. such obligation) to update or alter any statements containing
forward-looking information or the factors or assumptions
RISKS AND UNCERTAINTIES underlying them, whether as a result of new information, future
Actual events and results can be substantially different from what is events, or otherwise, except as required by law. All of the forward-
expressed or implied by forward-looking information as a result of looking information in this MD&A is qualified by the cautionary
risks, uncertainties, and other factors, many of which are beyond statements herein.
our control, including, but not limited to:
• regulatory changes; BEFORE MAKING AN INVESTMENT DECISION
• technological changes; Before making any investment decisions and for a detailed
• economic, geopolitical, and other conditions affecting discussion of the risks, uncertainties, and environment associated
commercial activity; with our business, its operations, and its financial performance and
• unanticipated changes in content or equipment costs; condition, fully review the sections in this MD&A entitled
• changing conditions in the entertainment, information, and/or “Regulation in our Industry” and “Environmental, Social, and
communications industries; Governance (ESG)”, as well as our various other filings with
• sports-related work stoppages or cancellations and labour Canadian and US securities regulators, which can be found at
disputes; sedar.com and sec.gov, respectively.
• the integration of acquisitions;
• litigation and tax matters; FOR MORE INFORMATION
• the level of competitive intensity; You can find more information about us, including our Annual
• the emergence of new opportunities; Information Form, on our website (investors.rogers.com), on
• external threats, such as epidemics, pandemics, and other public SEDAR (sedar.com), and on EDGAR (sec.gov), or you can e-mail us
health crises, natural disasters, the effects of climate change, or at [email protected]. Information on or connected
cyberattacks, among others; to these and any other websites referenced in this document does
• risks related to the Transaction, including the timing, receipt, and not constitute part of this MD&A.
conditions related to the applicable approvals and expiry of
certain waiting periods under the Broadcasting Act (Canada), the You can also find information about our governance practices,
Competition Act (Canada), and the Radiocommunication Act corporate social responsibility reporting, a glossary of
(Canada) (collectively, Key Regulatory Approvals); satisfaction of communications and media industry terms, and additional
the various conditions to close the Transaction; financing the information about our business at investors.rogers.com.
Transaction; and the anticipated benefits and successful
integration of the businesses and operations of Rogers and
Shaw; and the other risks outlined in “Risks and Uncertainties
Affecting our Business – Shaw Transaction” in this MD&A; and
• new interpretations and new accounting standards from
accounting standards bodies.
2021 HIGHLIGHTS
KEY FINANCIAL INFORMATION
Years ended December 31
(In millions of dollars, except margins and per share amounts) 2021 2020 % Chg
Consolidated
Total revenue 14,655 13,916 5
Total service revenue 1 12,533 11,955 5
Adjusted EBITDA 2 5,887 5,857 1
Adjusted EBITDA margin 2 40.2% 42.1% (1.9 pts)
Wireless
Service revenue 6,666 6,579 1
Revenue 8,768 8,530 3
Adjusted EBITDA 4,214 4,067 4
Adjusted EBITDA service margin 4 63.2% 61.8% 1.4 pts
Adjusted EBITDA margin 5 48.1% 47.7% 0.4 pts
Cable
Revenue 4,072 3,946 3
Adjusted EBITDA 2,013 1,935 4
Adjusted EBITDA margin 49.4% 49.0% 0.4 pts
Media
Revenue 1,975 1,606 23
Adjusted EBITDA (127) 51 n/m
Adjusted EBITDA margin (6.4)% 3.2% (9.6 pts)
n/m – not meaningful
1 As defined. See “Key Performance Indicators”.
2 Adjusted EBITDA is a total of segments measure. 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. Free cash flow is a capital management 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.
3 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
Ratios
Capital intensity 1,3 19.0% 16.6% 2.4 pts
Dividend payout ratio of net income 1,3 64.8% 63.4% 1.4 pts
Dividend payout ratio of free cash flow 1,3 60.4% 42.7% 17.7 pts
Return on assets 1,3 3.7% 4.1% (0.4 pts)
Debt leverage ratio 4 3.4 3.0 0.4
Employee-related information
Total active employees 23,000 24,000 (1,000)
1 As defined. See “Key Performance Indicators”.
2 On September 1, 2021, we acquired approximately 18,000 Internet subscribers and 20,000 customer relationships as a result of our acquisition of Seaside Communications,
which are not included in net additions, but do appear in the ending total balance for December 31, 2021.
3 Blended ARPU, ARPA, capital intensity, dividend payout ratio of net income, dividend payout ratio of free cash flow, and return on assets are supplementary financial measures.
See “Non-GAAP and Other Financial Measures” for an explanation as to the composition of these measures.
4 Debt leverage ratio is a capital management measure. As a result of our issuance of subordinated notes in December 2021 (see “Managing our Liquidity and Financial
Resources”), we have amended our definition of this measure. See “Non-GAAP and Other Financial Measures” and “Financial Condition” for more information about this
measure.
Shaw Transaction
On March 15, 2021, we announced an agreement with Shaw to Liquidity and Financial Resources” for more information on the
acquire all of Shaw’s issued and outstanding Class A Participating committed credit facility and the Shaw term loan facility. We also
Shares and Class B Non-Voting Participating Shares (collectively, expect that RCI will either assume Shaw’s senior notes or provide a
Shaw Shares) for a price of $40.50 per share. The Shaw Family guarantee of Shaw’s payment obligations under those senior notes
Living Trust, the controlling shareholder of Shaw, and certain upon closing the Transaction and, in either case, Rogers
members of the Shaw family and certain related persons (Shaw Communications Canada Inc. (RCCI) will guarantee Shaw’s
Family Shareholders) will receive (i) $16.20 in cash and payment obligations under those senior notes.
(ii) 0.417206775 Class B Non-Voting Shares of Rogers per Shaw
In connection with our application for Canadian Radio-Television
Share held by the Shaw Family Shareholders. The Transaction is
and Telecommunications Commission (CRTC) approval to acquire
valued at approximately $26 billion, including the assumption of
Shaw’s licensed broadcasting assets, the CRTC held an oral hearing
approximately $6 billion of Shaw debt.
from November 22 to 26, 2021, during which Rogers, Shaw, and
The Transaction will be implemented through a court-approved 31 intervenors (including Canada Public Affairs Channel Inc.
plan of arrangement under the Business Corporations Act (Alberta). (CPAC) as an interested party) had an opportunity to comment on
On May 20, 2021, Shaw shareholders voted to approve the and respond to questions from the CRTC regarding the
Transaction at a special shareholders meeting. The Court of application. Final written submissions from intervenors were
Queen’s Bench of Alberta issued a final order approving the accepted until December 13, 2021, and Rogers and CPAC
Transaction on May 25, 2021. The Transaction is subject to other submitted final replies on December 20, 2021.
customary closing conditions, including receipt of Key Regulatory
In accordance with the terms of the arrangement agreement,
Approvals. Subject to receipt of all required approvals and
Rogers and Shaw filed pre-merger notifications pursuant to Part IX
satisfaction of other conditions prior to closing, the Transaction is
of the Competition Act to trigger the Competition Bureau’s review
expected to close in the first half of 2022. Rogers has extended the
of the Transaction. Rogers and Shaw have worked cooperatively
outside date for closing the Transaction from March 15, 2022 to
and constructively to respond to further requests for information, as
June 13, 2022 in accordance with the terms of the arrangement
required under the arrangement agreement. On September 28,
agreement.
2021, the Competition Bureau issued a public request for
The combined entity will build on the strong legacy of two family- information to help further gather and assess facts about the
founded Canadian companies. It will have the scale, assets, and Transaction. The Competition Bureau invited interested parties to
capabilities needed to deliver unprecedented wireline and wireless share their information or experiences confidentially by
broadband and network investments, innovation, and growth in October 29, 2021. The Federal Court also issued orders requiring
new telecommunications services, and greater choice for Canadian Xplornet Communications Inc., BCE Inc., TELUS Corporation, and
consumers and businesses. Quebecor Inc. to produce records and written information related
to mobile wireless services that are relevant to the Competition
The combination will also accelerate the delivery of critical 5G
Bureau’s review of the Transaction, which is ongoing.
service across Western Canada, from rural areas to dense cities,
more quickly than either company could achieve on its own, by In accordance with the conditions of Shaw’s spectrum licences,
bringing together the expertise and assets of both companies. Rogers and Shaw filed joint applications with Innovation, Science
and Economic Development Canada (ISED Canada) for approval of
In connection with the Transaction, we entered into a binding
the indirect transfer of those spectrum licences by the Minister of
commitment letter for a committed credit facility with a syndicate of
Innovation, Science and Industry. ISED Canada’s review is ongoing.
banks in an original amount up to $19 billion. During the year, we
entered into a $6 billion non-revolving credit facility (Shaw term The Transaction is subject to a number of additional risks. For more
loan facility), which served to reduce the amount available under information, see “Risks and Uncertainties Affecting our Business –
the committed credit facility to $13 billion. See “Managing our Shaw Transaction”.
• personal video recorders (PVRs), including Whole Home PVR In Television, we operate several conventional and specialty
and 4K PVR capabilities; television networks, including:
• an Ignite TV app, giving customers the ability to experience • Sportsnet’s four regional stations along with Sportsnet ONE™,
Ignite TV (including setting recordings) on their smartphone, Sportsnet 360™, and Sportsnet World™;
tablet, laptop, or computer; • Citytv™ network, which, together with affiliated stations, has
• IgniteTM SmartStreamTM , an entertainment add-on for Ignite broadcast distribution to approximately 76% of Canadian
Internet customers, giving them access to their favourite individuals;
streaming services in one place; • OMNI™ multicultural broadcast television stations, including
• Download and Go, the ability to download recorded programs OMNI Regional, which provide multilingual newscasts nationally
onto your smartphone or tablet to watch at a later time using the to all digital basic television subscribers;
Ignite TV app; • specialty channels that include FX™ (Canada), FXX™ (Canada),
• linear and time-shifted programming; and OLN™ (formerly Outdoor Life Network); and
• digital specialty channels; and • Today’s Shopping Choice™, Canada’s only nationally televised
• 4K television programming, including regular season Toronto shopping channel, which generates a significant and growing
Blue Jays home games and select marquee National Hockey portion of its revenue from online sales.
League (NHL) and National Basketball Association (NBA) games.
In Radio, we operate 54 AM and FM radio stations in markets
Phone services include: across Canada, including popular radio brands such as 98.1
• residential and small business local telephony service; and CHFI™, 680 NEWS™, Sportsnet The FAN™, KiSS™, JACK FM™, and
• calling features such as voicemail, call waiting, and long distance. SONiC™.
Enterprise services include: We also offer a range of digital services and products, including:
• voice, data networking, IP, and Ethernet services over multi- • our digital sports-related assets, including NHL LIVE and SN
service customer access devices that allow customers to scale NOW™;
and add services, such as private networking, Internet, IP voice, • other digital assets, including Citytv NOW™; and
and cloud solutions, which blend seamlessly to grow with their • a range of other websites, apps, podcasts, and digital products
business requirements; associated with our various brands and businesses.
• optical wave, Internet, Ethernet, and multi-protocol label
switching services, providing scalable and secure metro and OTHER
wide area private networking that enables and interconnects We offer several credit cards, including the Rogers™ World Elite
critical business applications for businesses that have one or Mastercard, Rogers™ Platinum Mastercard, and the Fido™
many offices, data centres, or points of presence (as well as Mastercard, which allow customers to earn cashback rewards points
cloud applications) across Canada; on credit card spending.
• simplified information technology (IT) and network technology
offerings with security-embedded, cloud-based, professionally OTHER INVESTMENTS
managed solutions; We hold interests in a number of associates and joint
• extensive cable access network services for primary, bridging, arrangements, some of which include:
and back-up (including through our wireless network, if • our 37.5% ownership interest in Maple Leaf Sports &
applicable) connectivity; and Entertainment Ltd. (MLSE), which owns the Toronto Maple Leafs,
• specialized telecommunications technical consulting for Internet the Toronto Raptors, Toronto FC, the Toronto Argonauts, and
service providers (ISPs). the Toronto Marlies, as well as various associated real estate
holdings; and
MEDIA • our 50% ownership interest in Glentel Inc. (Glentel), a large
Our portfolio of Media assets, with a focus on sports and regional provider of multicarrier wireless and wireline products and
TV and radio programming, reaches Canadians from coast to services with several hundred Canadian retail distribution outlets.
coast.
We also hold a number of interests in marketable securities of
In Sports Media and Entertainment, we own the Toronto Blue Jays, publicly traded companies, including Cogeco Inc. and Cogeco
Canada’s only Major League Baseball (MLB) team, and the Rogers Communications Inc.
Centre™ event venue, which hosts the Toronto Blue Jays’ home
games, concerts, trade shows, and special events.
COMPETITION
Our agreement with the NHL (NHL Agreement), which runs
through the 2025-2026 NHL season, allows us to deliver more than The telecommunications industry is a highly competitive industry
1,300 regular season games during a typical season across served by many national, regional, and reseller players giving
television, smartphones, tablets, personal computers, and consumers a broad choice in service providers and plan offerings.
streaming devices, both through traditional streaming services as The industry is very capital intensive and requires meaningful,
well as through NHL LIVE™. It also grants Rogers national rights on continual investments to implement next-generation technology
those platforms to the Stanley Cup Playoffs and Stanley Cup Final, and to support existing infrastructure. Given the highly regulated
all NHL-related special events and non-game events (such as the nature of the industry, the already competitive dynamic could be
NHL All-Star Game and the NHL Draft), and rights to sublicense further influenced by regulatory change (see “Regulation in our
broadcasting rights. Industry” for more information).
Television and Radio, both of which are focused on local and Wireless providers continue to invest in the next generation of
regional content, compete for audiences and advertisers with: technologies, like 5G, to meet increasing data demands. New
• other Canadian television and radio stations, including those products and applications on the wireless network will continue to
owned and operated by the CBC, Bell Media, and Corus rely on ultra-reliable, low latency transport networks, capable of
Entertainment; supporting both wireless and wireline traffic.
• OTT video offerings through providers like Netflix, YouTube,
In January 2020, we were the first Canadian carrier to launch a 5G
Apple, Amazon Prime Video, Crave, Google, Disney+, and other
network and, in December 2020, the first Canadian carrier to begin
channels streaming their own content;
rolling out a 5G standalone core network. Our 5G network is the
• OTT radio offerings, such as iHeartRadio, Apple Music, Spotify,
largest 5G network in Canada, reaching more than 1,500
Pandora, and Radioplayer Canada;
communities and 70% of the Canadian population as at
• other media, including newspapers, magazines, and outdoor
December 31, 2021.
advertising; and
• other technologies available on the Internet or through the To help make the cost of new wireless devices more affordable for
cloud, such as social media platforms, online web information consumers, Rogers and other Canadian wireless carriers offer
services, digital assistants, music downloading, and portable wireless device financing programs, whereby consumers can
media players. finance up to the full cost of the device over a 24-month term at 0%
interest. We believe being able to finance devices over 24 months
Today’s Shopping Choice’s model of live, hosted-video sales
helps reduce subscriber churn.
content and its robust online shopping experience competes with:
• pure play e-commerce retailers servicing Canada; In addition to the wireless device financing plans now available,
• select branded retailers in Canada and their related e-commerce subscribers are increasingly bringing their own devices or keeping
websites; their existing devices longer and therefore may not enter into term
• other available television-shopping channels and infomercials contracts for wireless services. This may negatively impact
that sell products on television; and subscriber churn, but may also create gross addition subscriber
• direct-to-consumer livestream video shopping events, social opportunities as a result of increased churn from other carriers. This
commerce, and shoppable video technologies that are rapidly trend may also negatively impact the monthly service fees charged
emerging online. to subscribers as they shop for plans that best meet their needs.
Our digital media products compete for readership and advertisers Wireless market penetration in Canada is approximately 98% of the
with: population (compared to penetration of 129% in the US) and is
• online information and entertainment websites and apps, expected to continue growing, per the Bank of America Merrill
including digital news services, streaming services, and content Lynch October 2021 Global Wireless Matrix.
available via social networking services;
• magazines, both digital and printed; and CABLE TRENDS
• other traditional media, such as TV and radio. Technology advancement, non-traditional competitors, consumer
behaviours, and regulatory developments are key areas influencing
INDUSTRY TRENDS Cable. This market is very capital intensive, and a strong Internet
offering is the backbone to effectively serving this market.
The telecommunications industry in Canada is very capital intensive Applications on the Internet are increasingly being used as a
and highly regulated. Our reportable segments are affected by substitute for wireline telephone services, and televised content is
various overarching trends relating to changing technologies, increasingly available online. Downward television tier migration
consumer demands, economic conditions, and regulatory (cord shaving) and television cancellation with the intent of
developments, all of which could limit essential future investments substitution (cord cutting) have been growing with increased
in the Canadian marketplace. See “Risks and Uncertainties adoption of OTT services.
Affecting our Business” and “Regulation in our Industry” for more
information. Below is a summary of the industry trends affecting our Cable and wireline companies are expanding their service offerings
specific reportable segments. to include faster broadband Internet. Canadian companies,
including Rogers, are increasingly offering download speeds of 1
to 1.5 Gbps and Internet offerings with unlimited bandwidth.
WIRELESS TRENDS
Consumers are demanding faster-than-ever speeds for streaming
The ongoing extensive investment made by Canadian wireless
online media, uploading personal content, and playing online
providers has created far-reaching and sophisticated wireless
video games, and for their ever-growing number of connected
networks that have enabled consumers and businesses to utilize
devices. In order to help facilitate these speeds, cable and wireline
fast multimedia capabilities through wireless data services.
companies are shifting their networks towards higher speed and
Consumer demand for mobile devices, digital media, and
capacity Data Over Cable Service Interface Specifications (DOCSIS)
on-demand content is pushing providers to build networks that can
3.1 and fibre-to-the-home (FTTH) technologies and they are
support the expanded use of applications, mobile video,
starting to evolve their networks to be DOCSIS 4.0-capable. These
messaging, and other wireless data. Mobile commerce continues
technologies provide faster potential data communication speeds
to increase as more devices and platforms adopt secure
than earlier technologies, allowing both television and Internet
technology to facilitate wireless transactions.
2021 OBJECTIVES
Priority 2021 Objectives
Create best-in-class customer experiences by putting our Accelerate digital and self-serve adoption by building on
customers first in everything we do momentum generated during COVID-19; reinvent experiences
across all channels to optimize customer journeys; solve
customer problems the first time, or even before, they contact
us; and invest in tools, capabilities, and our team to create
frictionless digital and frontline experiences.
Invest in our networks and technology to deliver leading Invest in our cable and wireless networks to deliver industry-
performance, reliability, and coverage leading connectivity to our customers; grow our leadership in 5G
and reestablish leadership in IoT; expand our network footprint
and product reach to connect underserved communities; and
modernize our systems by leveraging cloud and data capabilities.
Drive market-leading growth in each of our lines of business Enhance our marketing and sales capabilities to propel
consistent and sustainable customer additions; grow our
business in key regional markets across Canada; create products,
services, and content that customers will love; and anchor our
Media strategy in sports and diversify into digital and sports-
related growth areas.
Drive best-in-class financial outcomes for our shareholders Improve financial performance and drive cost and productivity
improvements across Rogers.
Develop our people, drive engagement, and build a high- Ensure the safety and well-being of our employees and evolve
performing and inclusive culture our ways of working; build a culture of inclusion for our team
members, customers, and communities; and attract top and
diverse talent and develop our team as we build our future
workforce.
Be a strong, socially and environmentally responsible leader in our Partner with communities across Canada to deepen
communities engagement and increase impact; grow our presence in a
sustainable and environmentally responsible manner; and build
our culture and reputation as a great Canadian company.
We are continuously enhancing our IP service infrastructure for all Significant spectrum position
our wireless services. Advances in technology have transformed the Our wireless services are supported by our significant wireless
ways in which our customers interact and use the variety of tools spectrum licence holdings in low-band, mid-band, and high-band
available to them in their personal and professional lives. frequency ranges. As part of our network strategy, we expect to
Technology has also changed the way businesses operate. continue making significant capital investments in spectrum to:
• support the rapidly growing usage of broadband wireless data
In early 2020, we launched our 5G network commercially in
services;
downtown Vancouver, Toronto, Ottawa, and Montreal and reached
• support the expansion and maintenance of our 5G network; and
over 1,500 communities across Canada as at December 31, 2021.
• introduce new innovative network-enabled features and
We also became a founding member of the global 5G Future
functionality.
Forum, a first-of-its-kind 5G and mobile edge computing forum that
currently includes Verizon, Vodafone, Telstra, KT, and América Móvil.
Our spectrum holdings as at December 31, 2021 include:
We have been deploying 1 GHz fibre-to-the-curb (FTTC) in new • voice authentication technology across all of our contact centres
development areas and transitioning to FTTH since 2005. In 2018, that automatically identifies our registered customers by their
we began upgrading our HFC network to a mix of 1.2 GHz FTTC voice, increasing security and protecting customers from
and FTTH. FTTC provides the foundation for subsequent potential fraud;
generations of DOCSIS, including Remote PHY and DOCSIS 4.0, • self-serve options, including:
which will improve high-speed Internet accessibility, quality, and • the ability for Fido and Rogers customers to complete price
tier speed attainability, while increasing the capacity of our HFC plan changes and hardware upgrades online;
network. Rogers FTTH is based on ten gigabit symmetrical passive • a simplified login, allowing Fido customers to log in to their
optical network (XGS-PON) technology that can support accounts online or through the Fido MyAccount app using
symmetrical downstream/upstream speeds up to 10 Gbps per their Facebook login credentials, eliminating the need to
node in select neighbourhoods, with the ability to upgrade the remember multiple login credentials and making self-service
opto-electronics to support even higher speeds in the future as easier to access;
required to meet demand for additional bandwidth. • the ability for customers to install their Internet, TV, home
phone, smart home monitoring, and Ignite SmartStream
We continue to invest in and improve our cable network services;
products at their convenience, without the need for a
for example, with technology to support gigabit Internet speeds,
technician visiting their residence;
Ignite TV, Rogers 4K TV, our 4K PVR set-top box, and a significant
• Rogers EnRoute™, a tool that gives customers the ability to
commitment to live broadcasting in 4K, including regular season
track on their phone when a technician will arrive for an
Toronto Blue Jays home games for 2022 and numerous NHL and
installation or service call; and
NBA games.
• the ability for chatr customers to use SMS to easily review
Voice-over-cable telephony services are also served using the account information, balance details, and top up their account;
DOCSIS network. Our offerings ensure a high quality of service by • customer care available over Facebook Messenger, Twitter, and
including geographic redundancy and network backup powering. online chat through our websites;
Our phone service includes a rich set of features, such as TV Call • Rogers Infinite unlimited data plans with no overage charges;
Display (available on our NextBox™ set-top boxes), three-way • 24-month, $0 down, interest-free wireless device financing on
calling, and advanced voicemail features that allow customers to be Rogers Infinite plans and through our Fido Payment Program;
notified of, and listen to, their home voicemail on their wireless • Rogers Pro On-the-Go, a personalized retail service whereby
phone or over the Internet. within hours of ordering a new wireless device, a connected
solutions professional will meet a customer at their time and
We own and operate some of the most advanced networks and location of choice (within the service area) and set up their device
data centres in Canada. Our data centres provide guaranteed based on their preferences;
uptime and expertise in collocation, cloud, and managed services • Ignite WiFi Hub for all Ignite TV customers to give them ultimate
solutions. We own and operate nine state-of-the-art, highly reliable, control over their WiFi experience;
certified data centres across Canada, including: • Family Data Manager, a data manager tool, and Data Top Ups,
• Canada’s first Tier III Design and Construction certified multi- both of which allow Wireless customers to manage and
tenant facility in Toronto; customize their data usage in real-time through MyRogers;
• Alberta’s first Tier III certified data centre; and • Fido 5 Extra Hours, which grant Fido customers an additional five
• a third Tier III certified data centre in Ottawa. hours of data, per billing cycle, at no extra charge;
We leverage our national fibre, cable, and wireless networks and • Fido XTRA™, a program that gives Fido postpaid Wireless and
data centre infrastructure to enable businesses to deliver greater Internet customers free access to new perks every Thursday, such
value to their customers through proactive network monitoring and as deals and giveaways from leading brands on food, drinks,
problem resolution with enterprise-level reliability, security, and apparel, entertainment, and more;
performance. Our primary and secondary Network Operation • a simple online bill, making it easier for customers to read and
Centres proactively monitor Rogers’ networks to mitigate the risk of understand their monthly charges;
service interruptions and to allow for rapid responses to any • Roam Like Home and Fido Roam, worry-free wireless roaming
outages. allowing Canadians to use their wireless plan like they do at
home when traveling to included destinations;
• DAY PASS™, a flexible daily payment option for chatr customers;
CUSTOMER EXPERIENCE • Top Up as a Guest, which allows chatr customers to top up an
We are committed to providing our customers with the best account without signing in;
experience possible. To do this, we have invested in several areas to • Advantage Mobility™ and Advantage Security™, business-grade
make it easier and more convenient for customers to interact with solutions offered by Rogers for Business to support small- and
us, such as: medium-sized Canadian enterprises with reliable connectivity
• live customer support handled by customer solution specialists and network security;
located entirely within Canada; • a Premium Device Protection™ program, including AppleCare
• 24/7 customer support handled by virtual assistant tools that services for Rogers and Fido customers, offering customers more
provide customers the option for live chat or scheduled protection and choice;
callbacks; • Express Pickup, a free service that allows customers to purchase a
• an innovative Integrated Voice Response (IVR) system that can new device online or through a customer care agent and pick up
take calls in English, French, Mandarin, and Cantonese; it up the same day in-store;
program, and long-term debt. We also owned approximately restrictions on the flow of funds between RCI and its subsidiary
$1,581 million of marketable equity securities in publicly traded companies.
companies as at December 31, 2021.
We believe we can satisfy foreseeable additional funding
The following information is forward-looking and should be read in requirements through additional financing, which, depending on
conjunction with “About Forward-Looking Information”, “Financial market conditions, could include restructuring our existing bank
and Operating Guidance”, “Risks and Uncertainties Affecting our credit and letter of credit facilities, entering into new bank credit
Business”, and our other disclosures about various economic, facilities, issuing long-term or short-term debt, amending the terms
competitive, and regulatory assumptions, factors, and risks that of our receivables securitization or US CP programs, or issuing
could cause our actual future financial and operating results to equity. We may also opportunistically refinance a portion of
differ from those currently expected. existing debt depending on market conditions and other factors.
There is no assurance, however, that these financing initiatives will
The Transaction will have a significant impact on our capital
or can be done as they become necessary.
structure as we anticipate issuing significant debt in order to
consummate the Transaction; however, we expect we will have
sufficient capital resources to satisfy our anticipated cash funding WIDESPREAD SHAREHOLDER BASE AND
requirements in 2022, including the Transaction, funding of
DIVIDENDS
dividends on our common shares, repayment of maturing short-
term borrowings and long-term debt, and other financing and RCI’s Class B Non-Voting common shares (Class B Non-Voting
investing activities. This takes into account our opening cash Shares) are widely held and actively trade on the TSX and the NYSE
balance, cash provided by operating activities, and funds available with a combined average daily trading volume of approximately
to us under credit facilities, our receivables securitization program, 1.9 million shares in 2021. In addition, RCI’s Class A Voting
our US CP program, and other bank facilities or debt issued, common shares (Class A Shares) trade on the TSX. At the discretion
including, for the purposes of the Transaction as necessary, the of the Board, we pay an equal dividend on both classes of shares.
$13 billion committed credit facility and the $6 billion Shaw term In 2021, each share paid an annualized dividend of $2.00.
loan facility. As at December 31, 2021, there were no significant
(In millions of dollars, except margins and per share amounts) 2021 2020 % Chg
Revenue
Wireless 8,768 8,530 3
Cable 4,072 3,946 3
Media 1,975 1,606 23
Corporate items and intercompany eliminations (160) (166) (4)
Revenue 14,655 13,916 5
Total service revenue 12,533 11,955 5
Adjusted EBITDA
Wireless 4,214 4,067 4
Cable 2,013 1,935 4
Media (127) 51 n/m
Corporate items and intercompany eliminations (213) (196) 9
Adjusted EBITDA 5,887 5,857 1
Adjusted EBITDA margin 40.2% 42.1% (1.9 pts)
WIRELESS FINANCIAL RESULTS The 1% increase in service revenue this year was a result of:
• a larger postpaid subscriber base; and
Years ended December 31 • higher roaming revenue as COVID-19-related global travel
(In millions of dollars, except margins) 2021 2020 % Chg restrictions were generally less strict than last year; partially offset by
• a decrease in overage revenue as a result of strong customer
Revenue
Service revenue 6,666 6,579 1
adoption of our Rogers Infinite unlimited data plans.
Equipment revenue 2,102 1,951 8 The 1% decrease in blended ARPU was primarily a result of an
Revenue 8,768 8,530 3 increase in our subscribers on lower monthly price plans.
Operating expenses The stable blended ABPU was primarily a result of the increased
Cost of equipment 2,142 1,932 11 roaming revenue offset by the decline in overage revenue.
Other operating expenses 2,412 2,531 (5)
We believe the increases in gross and net additions to our postpaid
Operating expenses 4,554 4,463 2
subscriber base and the improved postpaid churn this year were a
Adjusted EBITDA 4,214 4,067 4 result of strong execution and an increase in market activity by
Adjusted EBITDA service margin 1 63.2% 61.8% 1.4 pts Canadians with the ongoing opening of the economy.
Adjusted EBITDA margin 2 48.1% 47.7% 0.4 pts
Capital expenditures 1,515 1,100 38 Equipment revenue
Equipment revenue includes revenue from sales of mobile devices
1 Calculated using service revenue.
2 Calculated using total revenue. to subscribers through fulfillment by Wireless’ customer service
groups, websites, telesales, corporate stores, and independent
dealers, agents, and retailers.
WIRELESS SUBSCRIBER RESULTS 1
Years ended December 31
The 8% increase in equipment revenue this year was a result of:
(In thousands, except churn, blended • higher device upgrades by existing customers; and
ABPU, and blended ARPU) 2021 2020 Chg • a shift in the product mix towards higher-value devices; partially
Postpaid offset by
Gross additions 1,565 1,381 184 • fewer of our new subscribers purchasing devices.
Net additions 448 245 203
Total postpaid subscribers 2 10,131 9,683 448
OPERATING EXPENSES
Churn (monthly) 0.95% 1.00% (0.05 pts)
We record operating expenses in two categories:
Prepaid
Gross additions 512 550 (38)
• the cost of wireless devices and equipment; and
Net losses (94) (142) 48 • all other expenses involved in day-to-day operations, to service
Total prepaid subscribers 2 1,166 1,260 (94) existing subscriber relationships, and to attract new subscribers.
Churn (monthly) 4.20% 4.38% (0.18 pts)
The 11% increase in the cost of equipment this year was a result of
Blended ARPU (monthly) $ 50.26 $ 50.75 ($ 0.49)
Blended ABPU (monthly) 3 $ 63.45 $ 63.24 $ 0.21
the same factors discussed in equipment revenue above.
1 Subscriber counts and subscriber churn are key performance indicators. See “Key Although a decrease from 2020, the ongoing long-term shift to
Performance Indicators”. customers financing their device purchases is reflected in the
2 As at end of period. general improvement in our equipment margin.
3 Blended ABPU is a non-GAAP ratio. Adjusted Wireless service revenue is a non-GAAP
financial measure and is a component of blended ABPU. This is not a standardized The 5% decrease in other operating expenses this year was a result of:
financial measure under IFRS and might not be comparable to similar financial • lower bad debt expense as we recorded a provision last year
measures disclosed by other companies. See “Non-GAAP and Other Financial
due to the economic uncertainty relating to COVID-19; and
Measures” for more information about this measure.
• various cost efficiencies and productivity initiatives; partially offset by
• higher advertising and channel costs.
REVENUE
Our revenue depends on the size of our subscriber base, the
ADJUSTED EBITDA
revenue per user, the revenue from the sale of wireless devices, and
The 4% increase in adjusted EBITDA this year was a result of the
other equipment revenue.
revenue and expense changes discussed above.
CABLE REVENUE
Service revenue
Service revenue includes revenue derived from:
ONE OF CANADA’S LEADING PROVIDERS OF HIGH- • monthly subscription and additional use service revenue from
SPEED INTERNET, CABLE TELEVISION, AND PHONE residential, small business, enterprise, public sector, and
SERVICES wholesale Internet access subscribers;
• monthly service revenue from our smart home monitoring
As at December 31, 2021, we had: products;
• approximately 2.7 million high-speed Internet subscribers; • modem, television set-top box, and other equipment rental fees;
• approximately 0.8 million Ignite TV subscribers; and • IPTV and digital cable services, such as:
• a network passing approximately 4.7 million homes in • basic service fees;
Ontario, New Brunswick, Nova Scotia, and on the island of • tier service fees;
Newfoundland. • access fees for use of channel capacity by third parties; and
• premium and specialty service subscription fees, including
CABLE FINANCIAL RESULTS pay-per-view service fees and video-on-demand service fees;
• monthly service fees;
Years ended December 31
• calling features, such as voicemail, call waiting, and caller ID; and
(In millions of dollars, except margins) 2021 2020 % Chg • long distance calling.
Revenue
The 3% increase in Cable service revenue this year was a result of:
Service revenue 4,052 3,936 3
• the movement of Internet customers to higher speed and usage
Equipment revenue 20 10 100
tiers in our Ignite Internet offerings and the increase in total
Revenue 4,072 3,946 3 customer relationships over the past year, due to growth in our
Operating expenses 2,059 2,011 2 Internet and Ignite TV subscriber bases; and
• a 1% increase in ARPA as a result of disciplined promotional
Adjusted EBITDA 2,013 1,935 4
activity and Internet service pricing changes in late 2020; partially
Adjusted EBITDA margin 49.4% 49.0% 0.4 pts offset by
Capital expenditures 913 940 (3) • declines in our legacy television and home phone subscriber
bases.
CABLE SUBSCRIBER RESULTS 1
Equipment revenue
Years ended December 31 Equipment revenue includes revenue generated from the sale of
(In thousands, except ARPA and
penetration) 2021 2020 Chg television set-top boxes, Internet modems and other equipment,
and smart home monitoring equipment. The increase in
Internet 2
equipment revenue this year was a result of higher Ignite
Net additions 49 57 (8)
Total Internet subscribers 3,4 2,665 2,598 67
equipment sales.
Ignite TV
Net additions 244 218 26 OPERATING EXPENSES
Total Ignite TV subscribers 3 788 544 244 We record Cable operating expenses in three categories:
Homes passed 3 4,700 4,578 122 • the cost of programming;
Customer relationships • the cost of equipment revenue (television set-top boxes, Internet
Net additions 31 12 19 modem and other equipment, and smart home monitoring
Total customer relationships 3,4 2,581 2,530 51 equipment); and
ARPA (monthly) $132.58 $130.70 $ 1.88 • all other expenses involved in day-to-day operations, to service
Penetration 3 54.9% 55.3% (0.4 pts) and retain existing subscriber relationships, and to attract new
1 Subscriber counts are key performance indicators. See “Key Performance Indicators”. subscribers.
2 Internet subscriber results include Smart Home Monitoring subscribers.
3 As at end of period.
The 2% increase in operating expenses this year was a result of:
4 On September 1, 2021, we acquired approximately 18,000 Internet subscribers and • higher customer care costs; partially offset by
20,000 customer relationships as a result of our acquisition of Seaside • various cost efficiencies and productivity initiatives.
Communications, which are not included in net additions, but do appear in the
ending total balance for December 31, 2021.
ADJUSTED EBITDA
The 4% increase in adjusted EBITDA this year was a result of the
revenue and expense changes described above.
REVENUE
Media revenue is earned from:
• advertising sales across its television, radio, and digital media
properties;
• subscriptions to televised and OTT products;
• ticket sales, fund redistribution and other distributions from MLB,
and concession sales; and
• retail product sales.
CAPITAL INTENSITY
Capital intensity increased this year as a result of higher capital
expenditures, partially offset by higher revenue, as discussed
above.
This section discusses our net income and other expenses that do Years ended December 31
not form part of the segment discussions above. (In millions of dollars) 2021 2020 % Chg
Years ended December 31 Interest on borrowings 1 745 780 (4)
Interest on lease liabilities 74 70 6
(In millions of dollars) 2021 2020 % Chg
Interest on post-employment
Adjusted EBITDA 5,887 5,857 1 benefits liability 14 13 8
Deduct (add): Loss on foreign exchange 10 107 (91)
Depreciation and amortization 2,585 2,618 (1) Change in fair value of derivative
Restructuring, acquisition and instruments (6) (97) (94)
other 324 185 75 Capitalized interest (17) (19) (11)
Finance costs 849 881 (4) Other 29 27 7
Other expense 2 1 100
Total finance costs 849 881 (4)
Income tax expense 569 580 (2)
1 Interest on borrowings includes interest on short-term borrowings and on long-term
Net income 1,558 1,592 (2) debt.
NET INCOME
Net income was 2% lower than last year. See “Key Changes in
Financial Results Year Over Year” for more information.
QUARTERLY RESULTS
Below is a summary of our quarterly consolidated financial results and key performance indicators for 2021 and 2020.
Revenue
Wireless 8,768 2,415 2,215 2,064 2,074 8,530 2,291 2,228 1,934 2,077
Cable 4,072 1,023 1,016 1,013 1,020 3,946 1,019 988 966 973
Media 1,975 516 473 546 440 1,606 409 489 296 412
Corporate items and intercompany eliminations (160) (35) (38) (41) (46) (166) (39) (40) (41) (46)
Total revenue 14,655 3,919 3,666 3,582 3,488 13,916 3,680 3,665 3,155 3,416
Total service revenue 12,533 3,232 3,149 3,131 3,021 11,955 3,023 3,086 2,797 3,049
Adjusted EBITDA
Wireless 4,214 1,086 1,107 1,008 1,013 4,067 1,034 1,089 918 1,026
Cable 2,013 518 516 492 487 1,935 520 508 454 453
Media (127) (26) 33 (75) (59) 51 82 89 (35) (85)
Corporate items and intercompany eliminations (213) (56) (56) (51) (50) (196) (46) (48) (43) (59)
Adjusted EBITDA 5,887 1,522 1,600 1,374 1,391 5,857 1,590 1,638 1,294 1,335
Deduct (add):
Depreciation and amortization 2,585 658 642 647 638 2,618 666 663 650 639
Restructuring, acquisition and other 324 101 63 115 45 185 73 49 42 21
Finance costs 849 218 207 206 218 881 228 219 214 220
Other expense (income) 2 (12) 20 (7) 1 1 2 6 7 (14)
Net income before income tax expense 2,127 557 668 413 489 2,172 621 701 381 469
Income tax expense 569 152 178 111 128 580 172 189 102 117
Net income 1,558 405 490 302 361 1,592 449 512 279 352
Net income 1,558 405 490 302 361 1,592 449 512 279 352
Add (deduct):
Restructuring, acquisition and other 324 101 63 115 45 185 73 49 42 21
Income tax impact of above items (79) (20) (17) (30) (12) (52) (22) (13) (11) (6)
Adjusted net income 1,803 486 536 387 394 1,725 500 548 310 367
Cable revenue was stable in the fourth quarter, primarily as a result Fluctuations in net income from quarter to quarter can also be
of the movement of Internet customers to higher speed and usage attributed to losses on the repayment of debt, foreign exchange
tiers in our Ignite Internet offerings and the increases in our Internet gains or losses, changes in the fair value of derivative instruments,
and Ignite TV subscriber bases, offset by declines in our legacy other income and expenses, restructuring, acquisition and other
television and home phone subscriber bases. costs, impairment of assets, and changes in income tax expense.
typically see lower subscriber additions in the first quarter of the Media
year. Trends affecting Media revenue and adjusted EBITDA are generally
the result of:
The launch of popular new wireless device models can also affect
• fluctuations in advertising and consumer market conditions;
the level of subscriber activity. Highly anticipated device launches
• subscriber rate increases;
typically occur in the spring and fall seasons of each year. Wireless
• higher sports and rights costs, including increases as we move
roaming revenue is dependent on customer travel volumes and
further along in our NHL Agreement;
timing, which is affected by the foreign exchange rate of the
• general cord shaving and cord cutting by television subscribers
Canadian dollar and general economic conditions.
regardless of service provider; and
• continual investment in primetime and specialty programming
Cable relating to both our broadcast networks (such as Citytv) and our
Trends affecting Cable service revenue primarily reflect: specialty channels (such as FX (Canada)).
• higher Internet subscription fees as customers increasingly
upgrade to higher-tier speed plans, including those with Seasonal fluctuations relate to:
unlimited usage; • periods of increased consumer activity and their impact on
• customers adopting Ignite TV; advertising and related retail cycles, which tend to be most active
• general service pricing increases; and in the fourth quarter due to holiday spending and slower in the
• the shift of business customers from lower-margin, off-net legacy first quarter;
long distance and data services to higher-margin, next- • the MLB season, where:
generation services and data centre businesses; partially offset • games played are concentrated in the spring, summer, and
by fall months (generally the second and third quarters of the
• competitive losses of legacy Television and Phone subscribers; year);
• Television subscribers downgrading their service plans; and • revenue related to game day ticket sales, merchandise sales,
• lower additional usage of our products and services as service and advertising are concentrated in the spring, summer, and
plans are increasingly bundling more features, such as unlimited fall months (generally the second and third quarters of the
usage or a greater number of TV channels. year), with postseason games commanding a premium in
advertising revenue and additional revenue from game day
Trends affecting Cable adjusted EBITDA primarily reflect: ticket sales and merchandise sales, if and when the Toronto
• higher Internet operating margins, as a result of the shift from Blue Jays play in the postseason (in the fourth quarter of the
conventional Television to Internet services; and year); and
• the shift to a self-install model for most of our Cable products; • programming and production costs and player payroll are
partially offset by expensed based on the number of games aired or played, as
• higher premium supplier fees in Television as a result of applicable; and
bundling more value-added offerings into our Cable products. • the NHL season, where:
Cable’s operating results are affected by modest seasonal • regular season games are concentrated in the fall and winter
fluctuations in subscriber additions and disconnections, typically months (generally the first and fourth quarters of the year) and
caused by: playoff games are concentrated in the spring months
• university and college students who live in residence moving out (generally the second quarter of the year). We expect a
early in the second quarter and cancelling their service as well as correlation between the quality of revenue and earnings and
students moving in late in the third quarter and signing up for the extent of Canadian teams’ presence during the playoffs;
cable service; • programming and production costs are expensed based on
• individuals temporarily suspending service for extended the timing of when the rights are aired or are expected to be
vacations or seasonal relocations; consumed; and
• the timing of service pricing changes; and • advertising revenue and programming expenses are
• the focused marketing we generally conduct in our fourth concentrated in the fall, winter, and spring months, with
quarter. playoff games commanding a premium in advertising
revenue.
Cable operating results are also influenced by trends in cord
shaving and cord cutting, which has resulted in fewer subscribers Other expenses
watching traditional cable television, as well as a lower number of Depreciation and amortization trails capital expenditures and, in
Television subscribers. In addition, trends in the use of wireless recent years, has been trending upward as a result of an increase in
products and Internet or social media as substitutes for traditional our general depreciable asset base, related significantly to the
home phone products have resulted in fewer Phone subscribers. ongoing expansions of our wireless and cable networks. The
Cable results from our business customers do not generally have increasing trend is a direct result of increasing capital expenditures
any unique seasonal aspects. in previous years as we worked to upgrade our wireless network for
the launch of 5G services and roll out Ignite TV, Ignite Gigabit
Internet, and 4K TV to our Cable footprint. We expect future
depreciation and amortization to align with ongoing capital
expenditures and additions to right-of-use assets.
As at December 31
(In millions of dollars) 2021 2020 $ Chg % Chg Explanation of significant changes
Assets
Current assets:
Cash and cash equivalents 715 2,484 (1,769) (71) See “Managing our Liquidity and Financial Resources”.
Accounts receivable 3,847 2,856 991 35 Primarily reflects the increase in financing receivables.
Inventories 535 479 56 12 Reflects an increase in Wireless devices to mitigate the risk of the COVID-19
impact on supply chains.
Current portion of contract assets 115 533 (418) (78) Reflects our transition of consumer offerings to device financing agreements.
Other current assets 497 516 (19) (4) n/m
Current portion of derivative instruments 120 61 59 97 Primarily reflects changes in the market value of certain interest rate derivatives as
a result of changes in the interest rate environment.
Total current assets 5,829 6,929 (1,100) (16)
Property, plant and equipment 14,666 14,018 648 5 Primarily reflects capital expenditures and additions to right-of-use assets
partially offset by depreciation expense.
Intangible assets 12,281 8,926 3,355 38 Primarily reflects the acquisition of 3500 MHz spectrum licences.
Investments 2,493 2,536 (43) (2) n/m
Derivative instruments 1,431 1,378 53 4 Primarily reflects changes in the market values of certain debt derivatives as a
result of changes in the interest rate environment.
Financing receivables 854 748 106 14 Reflects our continued transition of consumer offerings to device financing
agreements.
Other long-term assets 385 346 39 11 n/m
Goodwill 4,024 3,973 51 1 n/m
Cash provided by operating activities before changes in net operating assets and liabilities, income taxes paid,
and interest paid 5,626 5,880
Change in net operating assets and liabilities 37 (333)
Income taxes paid (700) (418)
Interest paid (802) (808)
Investing activities:
Capital expenditures (2,788) (2,312)
Additions to program rights (54) (57)
Changes in non-cash working capital related to capital expenditures and intangible assets 67 (37)
Acquisitions and other strategic transactions, net of cash acquired (3,404) (103)
Other 46 (49)
Financing activities:
Net proceeds received from (repayment of) short-term borrowings 971 (1,146)
Net issuance of long-term debt 550 2,540
Net (payments) proceeds on settlement of debt derivatives and forward contracts (8) 80
Transaction costs incurred (31) (23)
Principal payments of lease liabilities (269) (213)
Dividends paid (1,010) (1,011)
Cash provided by financing activities 203 227
Year ended December 31, 2021 Year ended December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
Proceeds received from receivables securitization 150 –
Net proceeds received from receivables securitization 150 –
Proceeds received from US commercial paper 2,568 1.260 3,235 3,316 1.329 4,406
Repayment of US commercial paper (2,314) 1.259 (2,914) (4,098) 1.355 (5,552)
Net proceeds received from (repayment of) US commercial paper 321 (1,146)
Proceeds received from non-revolving credit facilities (US$) 1,200 1.253 1,503 – – –
Repayment of non-revolving credit facilities (US$) (800) 1.254 (1,003) – – –
Net proceeds received from non-revolving credit facilities 500 –
Net proceeds received from (repayment of) short-term borrowings 971 (1,146)
We have a US CP program that allows us to issue up to a maximum December 2021, we terminated the undrawn non-revolving credit
aggregate principal amount of US$1.5 billion. Funds can be facilities with an aggregate limit of US$1.2 billion. In February 2022,
borrowed under this program with terms to maturity ranging from we repaid the outstanding US$400 million and terminated the
1 to 397 days, subject to ongoing market conditions. Any issuances facility.
made under the US CP program will be issued at a discount. The
In March 2021, in connection with the Transaction, we entered into
obligations of RCI under the US CP program are unsecured and
a binding commitment letter for a committed credit facility with a
guaranteed by RCCI, and rank equally in right of payment with all
syndicate of banks in an amount up to $19 billion. The
our senior notes and debentures. See “Financial Condition” for
commitment remains subject to the satisfaction of conditions to
more information.
effectiveness and drawing, including, without limitation, the
Concurrent with our US CP issuances and non-revolving credit completion of credit documentation in respect of such
facility borrowings, we entered into debt derivatives to hedge the commitment and the completion of the Transaction. The
foreign currency risk associated with the principal and interest committed facility cannot be drawn upon until the closing date of
components of the borrowings. See “Financial Risk Management” the Transaction. It is only available to be drawn to fund part of the
for more information. acquisition cost of the Transaction and to pay fees and expenses
In June 2021, we entered into non-revolving credit facilities with an related to the Transaction. If drawn, any drawings must be repaid
aggregate limit of US$1.6 billion that mature in June 2022. Any within 364 days. If undrawn, the facility terminates on the closing
borrowings under these facilities will be recorded as short-term date of the acquisition. As a result of entering into the Shaw term
borrowings as they will be due within 12 months. Borrowings under loan facility (see “Long-term debt” below), the maximum amount
the facilities are unsecured, guaranteed by RCCI, and rank equally we can draw on this committed facility decreased to $13 billion.
in right of payment with all of our senior notes and debentures. In
Long-term debt
Our long-term debt consists of amounts outstanding under our bank and letter of credit facilities and the senior notes, debentures, and
subordinated notes we have issued. The tables below summarize the activity relating to our long-term debt for the years ended
December 31, 2021 and 2020.
Year ended December 31, 2021 Year ended December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
Credit facility borrowings (US$) – – – 970 1.428 1,385
Credit facility repayments (US$) – – – (970) 1.406 (1,364)
Net borrowings under credit facilities – 21
Senior note issuances (Cdn$) – 1,500
Senior note issuances (US$) – – – 750 1.359 1,019
Total senior note issuances – 2,519
Senior note repayments (Cdn$) (1,450) –
Net (repayment) issuance of senior notes (1,450) 2,519
Subordinated note issuances (Cdn$) 2,000 –
Net issuance of long-term debt 550 2,540
The revolving credit facility is unsecured, guaranteed by RCCI, and over the bank prime rate or base rate, or 0.65% to 2.25% over the
ranks equally with all of our senior notes and debentures. bankers’ acceptance rate or London Inter-Bank Offered Rate.
In April 2021, we entered into a $6 billion Shaw term loan facility In April 2021, we amended our revolving credit facility to, among
consisting of three tranches of $2 billion each. The facility cannot be other things, increase the total credit limit and extend the maturity
drawn upon until the closing date of the Transaction. The first tranche dates. We increased the total credit limit from $3.2 billion to
matures three years after the Transaction closing date and $4 billion by increasing the limits of the two tranches to $3 billion
subsequent tranches mature in years four and five thereafter, and $1 billion (from $2.5 billion and $700 million), respectively. We
respectively. At tranche maturity, any outstanding borrowings under also extended the maturity date of the $3 billion tranche from
that tranche must be repaid. The interest rate charged on borrowings September 2023 to April 2026 and the $1 billion tranche from
from the Shaw term loan facility ranges from nil to 1.25% per annum September 2022 to April 2024.
2020 issuances
March 31, 2020 (senior) 1,500 2027 3.650% 99.511% 1,500 16
June 22, 2020 (senior) US 750 2022 USD LIBOR + 0.60% At par 1,019 5
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 income
using the effective interest method.
3 Deferred transaction costs and discounts in the carrying value of the subordinated notes are recognized in net income using the effective interest method over a five-year period.
The US dollar-denominated senior notes issued in 2020 were In February 2022, we issued US$750 million subordinated notes
issued pursuant to a public offering in the US. The Canadian dollar- due 2082 with an initial coupon of 5.25% for the first five years.
denominated senior notes issued in 2020 were issued pursuant to Concurrently, we terminated $950 million of interest rate derivatives
a public offering in Canada. entered into in 2021 to hedge the interest rate risk associated with
future debt issuances. We received net proceeds of US$740 million
Concurrent with the US dollar-denominated issuances, we entered
($938 million) from the issuance.
into debt derivatives to convert all interest and principal payment
obligations on the senior notes to Canadian dollars at a fixed Each of the subordinated notes can be redeemed at par on their
interest rate. See “Financial Risk Management” for more respective five-year anniversary or on any subsequent interest
information. payment date. The subordinated notes are unsecured and
subordinated obligations of RCI. Payment on these notes will,
The issued senior notes are unsecured and guaranteed by RCCI, under certain circumstances, be subordinated to the prior payment
ranking equally with all of our other unsecured senior notes and in full of all of our senior indebtedness, including our senior notes,
debentures, bank credit facilities, and letter of credit facilities. debentures, and bank credit facilities. In addition, upon the
In December 2021, we issued $2 billion subordinated notes due occurrence of certain events involving a bankruptcy or insolvency of
2081 with an initial coupon of 5% for the first five years. RCI, the outstanding principal and interest of such subordinated
Concurrently, we terminated the $750 million bond forwards notes would automatically convert into preferred shares. We
entered into in July 2021 to hedge the interest rate risk associated understand that S&P Global Ratings Services (S&P), Moody’s
with future debt issuances. We used the proceeds to partially fund Investors Service (Moody’s), and Fitch Ratings (Fitch) will only
the remaining payment required to obtain the 3500 MHz spectrum include 50% of the outstanding principal amount of these
licences. subordinated notes in their leverage ratio calculation for at least the
first five years after their issuance.
FINANCIAL CONDITION
AVAILABLE LIQUIDITY
Below is a summary of our total available liquidity from our cash and cash equivalents, bank credit facilities, letters of credit facilities, and
short-term borrowings.
Subsequent to the final payment for the 3500 MHz spectrum Ratings for long-term debt instruments across the universe of
licence acquisition in December 2021, we cancelled $360 million composite rates range from AAA (S&P and Fitch) or Aaa (Moody’s),
of letters of credit and US$1.2 billion of non-revolving credit representing the highest quality of securities rated, to D (S&P),
facilities, which reduced total liquidity sources to $6.5 billion as at Substantial Risk (Fitch), and C (Moody’s) for the lowest quality of
December 31, 2021. securities rated. Investment-grade credit ratings are generally
considered to range from BBB- (S&P and Fitch) or Baa3 (Moody’s)
In addition to the sources of available liquidity noted above, we
to AAA (S&P and Fitch) or Aaa (Moody’s).
held $1,581 million of marketable securities in publicly traded
companies as at December 31, 2021 (2020 – $1,535 million). Ratings for short-term debt instruments across the universe of
composite rates ranges from A-1+ (S&P), F1+ (Fitch), or P-1
Weighted average cost of borrowings (Moody’s), representing the highest quality of securities rated, to C
Our borrowings had a weighted average cost of 3.95% as at (S&P and Fitch), and not prime (Moody’s) for the lowest quality of
December 31, 2021 (2020 – 4.09%) and a weighted average term securities rated. Investment-grade credit ratings are generally
to maturity of 11.6 years (2020 – 12.8 years). These figures reflect considered to be ratings of at least A-3 (S&P), F3 (Fitch), or P-3
the repayment of our subordinated notes on the five-year (Moody’s) quality or higher.
anniversary.
Credit ratings are not recommendations to purchase, hold, or sell
COVENANTS securities, nor are they a comment on market price or investor
The provisions of our $4.0 billion revolving bank credit facility suitability. There is no assurance that a rating will remain in effect for
described in “Sources and Uses of Cash” impose certain a given period, or that a rating will not be revised or withdrawn
restrictions on our operations and activities, the most significant of entirely by a rating agency if it believes circumstances warrant it.
which are leverage-related maintenance tests. As at December 31, The ratings on our senior debt provided by S&P, Fitch, and
2021 and 2020, we were in compliance with all financial covenants, Moody’s are investment-grade ratings.
financial ratios, and all of the terms and conditions of our debt
agreements. Throughout 2021, these covenants did not impose ADJUSTED NET DEBT AND DEBT LEVERAGE RATIO
restrictions of any material consequence on our operations. We use adjusted net debt and debt leverage ratio to conduct
valuation-related analysis and make capital structure-related
CREDIT RATINGS decisions. Adjusted net debt includes long-term debt, net debt
Credit ratings provide an independent measure of credit quality of derivative assets or liabilities, short-term borrowings, lease liabilities,
an issue of securities and can affect our ability to obtain short-term and cash and cash equivalents.
and long-term financing and the terms of the financing. If rating
agencies lower the credit ratings on our debt, particularly a As at As at
downgrade below investment-grade, it could adversely affect our December 31 December 31
cost of financing and access to liquidity and capital. (In millions of dollars, except
ratios) 2021 2020
We have engaged each of S&P, Moody’s, and Fitch to rate certain
of our public debt issues. Below is a summary of the credit ratings Long-term debt 1 18,873 18,373
on RCI’s outstanding senior and subordinated notes and Subordinated notes adjustment 2 (1,000) –
debentures (long-term) and US CP (short-term) as at December 31, Net debt derivative assets valued
2021. without any adjustment for
credit risk 3 (1,278) (1,101)
Issuance S&P Moody’s Fitch Short-term borrowings 2,200 1,221
Lease liabilities 1,957 1,835
Corporate credit BBB+ Rating Baa1 under BBB+ Rating
issuer default Watch Negative review Watch Negative Cash and cash equivalents (715) (2,484)
rating Adjusted net debt 2,4 20,037 17,844
Senior unsecured BBB+ Rating Baa1 under BBB+ Rating Divided by: trailing 12-month
debt Watch Negative review Watch Negative adjusted EBITDA 5,887 5,857
Subordinated BBB- Credit Baa3 under BBB- Rating
debt Watch Negative review Watch Negative Debt leverage ratio 3.4 3.0
US commercial A-2 Rating P-2 under 1 Includes current and long-term portion of long-term debt before deferred
paper Watch Negative review N/A 1 transaction costs and discounts.
2 For the purposes of calculating adjusted net debt and debt leverage ratio, we believe
1 We have not sought a rating from Fitch for our short-term obligations.
adjusting 50% of the value of our subordinated notes is appropriate as this
As a result of our agreement to acquire Shaw and the related methodology factors in certain circumstances with respect to priority for payment and
this approach is commonly used to evaluate debt leverage by rating agencies.
commitments in connection with the Transaction, both S&P and 3 For purposes of calculating adjusted net debt and debt leverage ratio, we believe
Fitch have placed us on credit watch with negative implications. including debt derivatives valued without adjustment for credit risk is commonly used
Moody’s has placed our credit ratings on review for downgrade. to evaluate debt leverage and for market valuation and transactional purposes.
We expect S&P, Moody’s, and Fitch to complete their reviews upon 4 Adjusted net debt is a capital management measure. See “Non-GAAP and Other
closing of the Transaction. See “Shaw Transaction” and “Risks and Financial Measures” for more information about this measure.
Our adjusted net debt increased by $2,193 million from We made a total of $177 million (2020 – $150 million) of
December 31, 2020 as a result of: contributions to our funded defined benefit pension plans this
• an increase in short-term borrowings from our non-revolving year. We expect our total estimated funding requirements for our
credit facilities, US CP program, and receivables securitization funded defined benefit pension plans to be $134 million in 2022
program; and to be adjusted annually thereafter based on various market
• a decrease in our net cash position; and factors, such as interest rates, expected returns, and staffing
• an increase in long-term debt from subordinated note issuances. assumptions.
See “Overview of Financial Position” for more information. Changes in factors such as the discount rate, participation rates,
increases in compensation, and the expected return on plan assets
PENSION OBLIGATIONS can affect the accrued benefit obligation, pension expense, and
Our defined benefit pension plans were in a net asset position of the deficiency of plan assets over accrued obligations in the future.
approximately $18 million as at December 31, 2021 (2020 – net See “Accounting Policies” for more information.
liability position of $574 million). During 2021, our net deferred
We also manage our exposure to fluctuating interest rates and we have fixed the interest rate on 89.3% (2020 – 93.6%) of our debt,
including short-term borrowings, as at December 31, 2021.
DEBT DERIVATIVES
We use cross-currency interest rate agreements and forward foreign exchange agreements (collectively, debt derivatives) to manage risks
from fluctuations in foreign exchange rates and interest rates associated with our US dollar-denominated senior notes and debentures,
lease liabilities, credit facility borrowings, and US CP borrowings. We designate the debt derivatives related to our senior notes,
debentures, and lease liabilities as hedges for accounting purposes against the foreign exchange risk or interest rate risk associated with
specific issued and forecast debt instruments. Debt derivatives related to our credit facility and US CP borrowings have not been
designated as hedges for accounting purposes.
2020 issuances
June 22, 2020 750 2022 USD LIBOR + 0.60% 0.955% 1,019
1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.
As at December 31, 2021, we had US$9,050 million of US dollar-denominated senior notes and debentures, all of which were hedged
using debt derivatives.
As at December 31
(In millions of dollars, except exchange rates, percentages, and years) 2021 2020
Below is a summary of the debt derivatives we entered and settled related to our credit facility borrowings and US CP program during
2021 and 2020.
Year ended December 31, 2021 Year ended December 31, 2020
Credit facilities
Debt derivatives entered 1,200 1.253 1,503 970 1.428 1,385
Debt derivatives settled 800 1.254 1,003 970 1.406 1,364
Net cash paid on settlement (2) (21)
Lease liabilities
Below is a summary of the debt derivatives we entered and settled related to our outstanding lease liabilities during 2021 and 2020.
Year ended December 31, 2021 Year ended December 31, 2020
As at December 31, 2021, we had US$193 million notional amount of debt derivatives outstanding related to our outstanding lease
liabilities (2020 – US$142 million) with terms to maturity ranging from January 2022 to December 2024 (2020 – January 2021 to December
2023), at an average rate of $1.301/US$ (2020 – $1.352/US$).
See “Mark-to-market value” for more information about our debt derivatives.
EXPENDITURE DERIVATIVES
We use foreign currency derivative contracts (expenditure derivatives) to hedge the foreign exchange risk on the notional amount of
certain forecast US dollar-denominated expenditures. Below is a summary of the expenditure derivatives we entered and settled to
manage foreign exchange risk related to certain forecast expenditures.
Year ended December 31, 2021 Year ended December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
The expenditure derivatives noted above have been designated as hedges for accounting purposes.
As at December 31, 2021, we had US$1,068 million of expenditure derivatives outstanding (2020 – US$1,590 million), at an average rate
of $1.287/US$ (2020 – $1.342/US$), with terms to maturity ranging from January 2022 to December 2023 (2020 – January 2021 to
December 2022). As at December 31, 2021, our outstanding expenditure derivatives maturing in 2022 are hedged at an average
exchange rate of $1.292/US$.
EQUITY DERIVATIVES During the year ended December 31, 2021, we entered into
We use stock-based compensation derivatives (equity derivatives) 0.4 million equity derivatives (2020 – 0.3 million) with a weighted
to hedge the market price appreciation risk of the Class B average price of $60.98 (2020 – $56.08).
Non-Voting Shares granted under our stock-based compensation
During the year ended December 31, 2021, we reset the weighted
programs. As at December 31, 2021, we had equity derivatives for
average price to $59.64 (2020 – $54.16) on 0.5 million (2020 –
5.0 million (2020 – 4.6 million) Class B Non-Voting Shares with a
0.5 million) equity derivatives and received net proceeds of
weighted average price of $53.10 (2020 – $51.82). These
$3 million (2020 – made net payments of $1 million). At the same
derivatives have not been designated as hedges for accounting
time in 2021, we reset the expiry dates to April 2023 (from April
purposes. We record changes in their fair value as a stock-based
2021).
compensation expense, or offset thereto, which serves to offset a
substantial portion of the impact of changes in the market price of Additionally, we executed extension agreements for the remainder
Class B Non-Voting Shares on the accrued value of the stock-based of our equity derivative contracts under substantially the same
compensation liability for our stock-based compensation commitment terms and conditions with revised expiry dates to
programs. April 2022 (from April 2021).
MARK-TO-MARKET VALUE
We record our derivatives using an estimated credit-adjusted,
mark-to-market valuation, calculated in accordance with IFRS.
As at December 31, 2021 As at December 31, 2020
Notional Notional Fair Notional Notional Fair
(In millions of dollars, except amount Exchange amount value (In millions of dollars, except amount Exchange amount value
exchange rates) (US$) rate (Cdn$) (Cdn$) exchange rates) (US$) rate (Cdn$) (Cdn$)
Debt derivatives accounted for Debt derivatives accounted for
as cash flow hedges: as cash flow hedges:
As assets 5,859 1.1369 6,661 1,453 As assets 4,550 1.0795 4,912 1,405
As liabilities 5,383 1.3025 7,011 (343) As liabilities 4,642 1.3358 6,201 (307)
Short-term debt derivatives not Short-term debt derivatives not
accounted for as hedges: accounted for as hedges:
As assets 1,104 1.2578 1,389 11 As liabilities 449 1.2995 583 (12)
Net mark-to-market debt Net mark-to-market debt
derivative asset 1,121 derivative asset 1,086
Interest rate derivatives Expenditure derivatives
accounted for as cash flow accounted for as cash flow
hedges: hedges:
As assets (Cdn$) – – 3,250 40 As liabilities 1,590 1.3421 2,134 (109)
As liabilities (Cdn$) – – 500 (6) Equity derivatives not
As liabilities (US$) 2,000 – – (277) accounted for as hedges:
As assets — — 238 34
Net mark-to-market interest rate
derivative liability (243) Net mark-to-market asset 1,011
Expenditure derivatives
accounted for as cash flow
hedges:
As assets 438 1.2453 545 11
As liabilities 630 1.3151 829 (30)
Net mark-to-market
expenditure derivative liability (19)
Equity derivatives not accounted
for as hedges:
As assets – – 265 36
Net mark-to-market asset 895
On January 26, 2022, the Board declared a quarterly dividend of We currently expect that the remaining record and payment dates
$0.50 per Class A Voting Share and Class B Non-Voting Share, to for the 2022 declaration of dividends will be as follows, subject to
be paid on April 1, 2022, to shareholders of record on March 10, the declaration by the Board each quarter at its sole discretion:
2022.
Declaration date Record date Payment date
April 19, 2022 June 10, 2022 July 4, 2022
June 9, 2022 September 9, 2022 October 3, 2022
November 8, 2022 December 9, 2022 January 3, 2023
As at December 31
PREFERRED SHARES
2021 2020 In relation to our issuances of subordinated notes in December
Common shares outstanding 1 2021 and February 2022, the Board approved the creation of new
Class A Voting 111,153,411 111,154,811 Series I and Series II preferred shares, respectively. Series I has been
Class B Non-Voting 393,771,907 393,770,507 authorized for up to 3.3 million preferred shares and Series II has
been authorized for up to 1.4 million preferred shares. Both series
Total common shares 504,925,318 504,925,318
have no voting rights, par values of $1,000 per share, and will be
Options to purchase Class B issued automatically upon the occurrence of certain events
Non-Voting Shares involving a bankruptcy or insolvency of RCI to holders of the
Outstanding options 6,494,001 4,726,634 respective subordinated notes.
Outstanding options
exercisable 2,373,717 1,470,383
1 Holders of our 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.
• Customer Privacy and Information Security: We actively work to • Continued to bridge the digital divide by expanding Connected
improve transparency and we strive to be an industry leader in for Success eligibility so even more Canadians can connect to
the privacy space. Our Privacy Policy outlines our responsibilities social services, learning, employment, and loved ones. Now
and practices regarding the protection of the personal available to over 750,000 Canadian households, the expanded
information of our employees and customers. Our Chief Privacy low-cost high-speed Internet program is available across our
Officer oversees our compliance with this policy and all Internet footprint in Ontario, New Brunswick, and Newfoundland
applicable laws, and responds to requests from law enforcement to eligible customers receiving disability, seniors’ or income
for customer data. support, and through rent-geared-to-income community
housing partners.
COMMUNITY INVESTMENT • Extended our goodwill devices and plans donation program to
Giving back and supporting the communities where we live and provide thousands of phones and plans as digital lifelines to
work was especially important in 2021. In 2021, we provided more than 325 shelters and transition houses across Canada.
$70 million in cash and in-kind donations to support various These devices help women and their children safely escape
organizations and causes. violence and abuse, connect youth to mentors, and support
LGBTQ2S+ youth and allies.
Below are some of the impacts Rogers had on communities in • Committed to donating $1 million through a multi-year
2021 through Generation Possible and Team Possible. partnership with the B.C. Search and Rescue Association
(BCSARA) to support immediate disaster relief in the province
Generation Possible and provide long-term support to critical services following the
• Continued to invest in the next generation of leaders and devastating floods in British Columbia. It also supports the
change makers, awarding Ted Rogers Scholarships to more than organization’s legacy fund and new technology and specialized
375 young Canadians for their post-secondary studies. Nearly equipment for the 79 local teams and 3,000 professional
three quarters of all scholarships in the Class of 2021 were volunteers.
awarded to youth from equity-deserving communities (BIPOC, • Supported Indigenous communities across the country with our
LGBTQ2S+, and women). With the Class of 2021, almost 1,800 2021 Orange Shirt Day campaign. Since 2020, the Orange Shirt
students have received a Ted Rogers Scholarship since the Day campaign has raised $250,000 for the Orange Shirt Society
program launched in 2017. and the Indian Residential School Survivors Society (IRSSS). The
• Awarded 90 Ted Rogers Community Grants across Canada in new 2021 Orange Shirts were available on Today’s Shopping
2021, to support organizations that are making a meaningful Choice, with proceeds being divided between the Orange Shirt
difference in the lives of thousands of Canadian youth. With Society and the IRSSS.
more funding across more communities this year than ever
before, nearly 400 Ted Rogers Community Grants have been ENVIRONMENTAL RESPONSIBILITY
awarded since launching the program in 2017. • Environmental Policy: We maintain a formal Environmental Policy
that sets out how we conduct business in an environmentally
Team Possible responsible manner. Rogers also maintains an Environmental
• Rogers Group of Funds and Creative BC, with the support of the Management System, including 25 separate procedures to
Indigenous Screen Office, announced a new $1 million multi- support our Environmental Policy and manage environmental
year fund to support Indigenous storytellers in British Columbia. risks across our operations.
The fund will further enable Indigenous screen content with • Oversight: We have an Energy Executive Council and an
representation across all aspects of production and it will amplify Environmental Compliance Committee to manage and govern
Indigenous voices within Canada’s motion picture industry for a our energy utilization and environmental risks, respectively,
rapidly expanding audience at home and around the world. supporting decision-making to advance our strategies and
• Rogers Group of Funds, the Black Screen Office, and the program effectiveness in both areas. In addition, the ESG
Canadian Independent Screen Fund for BPOC Creators Committee assists the Board in fulfilling its oversight
launched a first-of-its-kind $750,000 script development fund for responsibilities of relevant environmental sustainability, social
Black and People of Colour creators across Canada. The fund responsibility, and governance policies, strategies, and programs
supports creators’ projects for networks, studios, cable, and and the actions we can take to be a responsible corporate
streaming platforms with the first 16 recipients announced in Fall citizen.
2021. • Energy Use and Climate Change: We recognize the implications
• Awarded $7.5 million in funding through Rogers Group of Funds of our energy use and the potential climate change impacts
to support Canadian storytellers and content creators through associated with increasing worldwide energy usage (such as
the Rogers Cable Network and Documentary Funds, with a focus droughts, water shortages and quality, extreme weather events,
on supporting projects from equity-deserving creators. flooding, wildfires, social inequities, etc.). We are committed to
• Rogers employees successfully completed the 60,000 Hours managing our operations in order to reduce our impact on the
Volunteer Challenge in July 2021, contributing almost 22,000 environment, strive to ensure stakeholder satisfaction, and
volunteer hours in 2021. Through our annual Give Together maintain investor confidence. Annually, we measure and disclose
Month, employees had the opportunity to donate to the charity details on our energy use and greenhouse gas (GHG) emissions
of their choice in November 2021, with Rogers matching up to across our buildings and retail stores, cell transmission sites,
$1,000 per employee. This helped our team contribute to over power supply stations, data centres, fleet, employee travel and
1,000 charities last year.
• Nominating Committee – identifies prospective candidates to as are specifically designated and authorized at a preceding
serve on the Board. Nominated directors can be elected by Board meeting to consider matters that may arise from time to
shareholders at a meeting, appointed by the Board, or time.
appointed by written consent resolution. The committee also • Finance Committee – reviews our investment strategies, general
recommends nominees for each Board committee, including debt, and equity structure and reports on them to the Board.
each committee chair. • Pension Committee – oversees the administration of our retiree
• Human Resources Committee – assists the Board in monitoring, pension plans and reviews the investment performance and
reviewing, and approving compensation and benefit policies provisions of the plans.
and practices. It is also responsible for recommending the
You can find more details about governance at Rogers on our
compensation of senior management and monitoring senior
Investor Relations website (investors.rogers.com), including:
executive succession planning.
• a complete statement of our corporate governance practices;
• ESG Committee – assists the Board in fulfilling its oversight
• our codes of conduct and ethics;
responsibilities of relevant environmental sustainability, social
• charters for each of the Board’s standing committees;
responsibility, and governance policies, strategies, and programs
• director biographies; and
and the actions we can take to be a responsible corporate
• a summary of the differences between the NYSE corporate
citizen.
governance rules that apply to US-based companies and our
• Executive Committee – assists the Board in discharging its
governance practices as a non-US-based issuer listed on the
responsibilities between meetings, including acting in such areas
NYSE.
As at March 3, 2022
Audit and Corporate Human
ESG Executive Finance Nominating Pension
Risk Governance Resources
Edward S. Rogers 1
Jack L. Cockwell, C.M.
Michael J. Cooper
Ivan Fecan
Robert J. Gemmell 2
Alan D. Horn, CPA, CA
Jan L. Innes
John (Jake) C. Kerr, C.M. O.B.C
Tony Staffieri
Risk Management
We strive to continually strengthen our risk management incident management and planning to maintain customer service,
capabilities to protect and enhance shareholder value. The operation of our network and businesses in the event of threats and
purpose of risk management is not to eliminate risk but to optimize natural disasters. Such threats include cyberattacks or equipment
trade-offs between risk and return to maximize value to the failures that could cause various degrees of network outages;
organization. As such, Rogers will knowingly take certain risks in supply chain disruptions; natural disaster threats; epidemics;
order to generate earnings and encourage innovation that advance pandemics; and political instability. Our ERM program also
us as a customer-centric market leader. To maintain our reputation includes insurance coverage allowing us to transfer certain
and trust, we will always work to ensure the impacts (financial, risks. Lastly, ERM works with Internal Audit to monitor the adequacy
operational, strategic, regulatory, privacy, and cybersecurity) of our and effectiveness of controls to reduce risks to an acceptable level.
risk-taking activities are understood and are in line with our strategic
Annually, ERM carries out a corporate risk assessment. The
objectives and company values.
assessment includes reviewing risk and audit reports and industry
benchmarks and, conducting an annual risk survey of all senior
RISK GOVERNANCE leaders. Based on the survey results, ERM, in consultation with
The Board has overall responsibility for risk governance and senior management, identifies the key risks to achieving our
oversees management in identifying the key risks we face in our corporate objectives. ERM reports the results of the annual
business and implementing appropriate risk assessment processes corporate risk assessment to the Executive Leadership Team, the
to manage these risks. It delegates certain risk oversight and Audit and Risk Committee, and the Board and provides quarterly
management duties to the Audit and Risk Committee. risk updates.
The Audit and Risk Committee discusses risk policies with ERM also facilitates management’s completion of the financial
management and the Board and assists the Board in overseeing statement fraud risk assessment which aims to ensure there is no
our compliance with legal and regulatory requirements. potential fraud or misstatement in our financial statements and
The Audit and Risk Committee also reviews: disclosures and to assess whether controls are adequately
• the adequacy of the internal controls that have been adopted to designed and operating effectively to mitigate financial statement
safeguard assets from loss and unauthorized use, to prevent, fraud risk.
deter, and detect fraud, and to ensure the accuracy of the Internal Audit is the third line of defence. Internal Audit is an
financial records; independent and objective assurance function that evaluates the
• the processes for identifying, assessing, and managing risks; design and operational effectiveness of internal controls and risk
• our exposure to major risks and trends and management’s management processes supporting the mitigation of risks that may
implementation of risk policies and actions to monitor and affect the achievement of our objectives.
control these exposures, including cybersecurity, privacy,
technology, and environmental; The Executive Leadership Team and the Audit and Risk Committee
• the implementation of new major systems and changes to are responsible for approving our enterprise risk policies. Our ERM
existing major systems; methodology and policies rely on the expertise of our
• our business continuity and disaster recovery plans; management and employees to identify risks and opportunities
• any special audit steps adopted due to material weaknesses or and implement risk mitigation strategies as required.
significant deficiencies that may be identified; and
• other risk management matters from time to time as determined
RISKS AND UNCERTAINTIES AFFECTING OUR
by the Audit and Risk Committee or directed by the Board.
BUSINESS
ENTERPRISE RISK MANAGEMENT This section describes the principal risks and uncertainties that
Our Enterprise Risk Management (ERM) program uses the “3 Lines could have a material adverse effect on our business and financial
of Defence” framework to identify, assess, manage, monitor, and results. Any discussion about risks should be read in conjunction
communicate risks. Our business units and departments, led by the with “About Forward-Looking Information”.
Executive Leadership Team, are the first line of defence and are
accountable for managing or accepting the risks. Together, they
SHAW TRANSACTION
identify and assess key risks, define controls and action plans to
The Transaction with Shaw is subject to a number of risks, many of
minimize these risks, and enhance our ability to meet our business
which are outside the control of Rogers and Shaw. These are
objectives.
described below.
ERM is the second line of defence. ERM helps management
identify the key and emerging risks in meeting our corporate and Key Regulatory Approvals and other conditions
business unit objectives in line with our risk appetite. At the To complete the Transaction, each of Rogers and Shaw must make
business unit and department level, ERM works with management certain filings with, and obtain certain consents and approvals from,
to provide governance and advice in managing the key risks and various governmental and regulatory authorities, including the
associated controls to mitigate these risks. Business Continuity is a Competition Bureau, ISED Canada, and the CRTC. Rogers and
function within ERM which also assists the business in mitigating Shaw have not yet obtained the Key Regulatory Approvals, all of
key risks. Specifically, the Business Continuity function oversees
In addition to the day-to-day operations of Rogers, management amongst others, including placing capacity limits on organized
will need to focus on the Transaction and all related activities, gatherings and retail stores.
including integration. If completion of the Transaction is delayed,
Additionally, COVID-19 has caused a global semiconductor chip
there could be adverse effects on our business, results of
shortage due to supply chain disruptions and an increase in demand
operations, or financial condition.
for electronics. Although we are taking proactive steps to minimize its
impacts, this has resulted, and could continue to result, in increased
Shaw actions prior to closing
lead times on our network equipment and wireless devices.
The arrangement agreement restricts Shaw from taking certain
actions outside of the ordinary course of business while the The full future extent and impact of COVID-19 is unknown.
Transaction is pending, including, among other things, certain Potential adverse impacts of the pandemic include, but are not
acquisitions or dispositions of businesses and assets, entering into limited to:
or amending certain contracts, repurchasing or issuing securities, • the risk of a material reduction in demand for our products and
making significant capital expenditures, and incurring services due to businesses closing or downsizing, job losses and
indebtedness, in each case subject to certain exceptions. As a associated financial hardship, or, more generally, a declining
result of these restrictions, Shaw may not have the flexibility to level of retail activity, which may lead to a decline in revenue as a
appropriately respond to certain events, which may result in us result of:
recognizing lower-than-expected synergies once the Transaction • lower Wireless subscriber activity, including lower equipment
closes. revenue;
• lower roaming and overage revenue as customers are unable
OUTBREAK OF COVID-19 AND RELATED PANDEMIC or unwilling to travel and continue to stay home;
As COVID-19 continues to significantly impact the well-being of • customers downgrading or cancelling their services;
individuals and the Canadian and global economies, we • the restriction of fan attendance at major sports league
maintained our programs to help employees manage through games, the potential suspension or shortening of future major
COVID-19 and provide support and services to our customers and sports league seasons, and the associated television
audiences. We are focused on operating and maintaining our programming; and/or
wireless and cable networks, our media operations, and the key • a decrease in population growth resulting from lower levels of
business operations required to ensure service continuity for immigration due to travel and border restrictions;
customers. We have continued work-from-home arrangements for • an increase in delinquent or unpaid bills, which could lead to
employees while we review and follow directions from the increased bad debt expense;
government to ensure the safety of our team and to provide us • issues delivering certain products and services, or maintaining or
time to implement necessary safeguards to accommodate a upgrading our networks, due to store closures and supply chain
gradual approach in reopening our sites to employees. disruptions; and
• additional capital expenditures to maintain or expand our
Public and private sector regulations, policies, and other measures networks in order to accommodate substantially increased
aimed at reducing the transmission of COVID-19 include the network usage.
imposition of business closures, travel restrictions, the promotion of
physical distancing, and the adoption of work-from-home and While we expect certain cost savings to offset some of the lower
online education by companies, schools, and institutions. These revenue, we also cannot predict the extent to which they would be
measures are impacting how customers use our networks, offset.
products, and services, the manner or extent to which we can offer Due to the uncertainty surrounding the duration and potential
certain products and services, and the ability of certain suppliers outcomes of COVID-19, including the results of measures taken to
and vendors to provide products and services to us. Notably, due slow the spread and the broader impact COVID-19 may have on
to travel restrictions and advisories, roaming revenue has decreased the Canadian and global economies or financial markets, it is
from pre-pandemic levels. Additionally, our cable network difficult to predict the overall impact on our operations, liquidity,
experienced a significant increase in data usage as employers financial condition, or results; however, COVID-19 has had, and
shifted to work-from-home models and as schools shifted to online may continue to have, a material, adverse impact on our results.
education. Any future epidemic, pandemic, or other public health crisis that
In early 2021, public health restrictions that were implemented in occurs in the future may pose similar risks to us.
late 2020 were lifted to certain extents across the country. In March
2021, several Canadian provinces declared a third wave of CYBERSECURITY
COVID-19 had commenced and provinces adjusted restrictions. In Our industry is vulnerable to cybersecurity risks that are growing in
the third quarter, provinces generally began relaxing certain public both frequency and complexity. Rogers, along with our suppliers,
health restrictions implemented in the first half of 2021 as vaccines employs systems and network infrastructure that are subject to
became more widely available in Canada and vaccination rates cyberattacks, which may include theft of assets, unauthorized
increased across the country. In August 2021, Canada entered a access to proprietary or sensitive information, destruction or
fourth wave of COVID-19 and several Canadian provinces corruption of data, ransomware attacks, or operational disruption.
introduced proof of vaccination requirements to access A significant cyberattack against our, or our suppliers’, critical
non-essential businesses and services. Late in the fourth quarter, network infrastructure and supporting information systems could
the Omicron variant re-accelerated the spread of COVID-19 and result in service disruptions, litigation, loss of customers, incurring
many Canadian provinces reintroduced various restrictions, significant costs, and/or reputational damage.
We work to protect our networks and our service from the impact Continued deployments of fibre networks by competitors may lead
of natural disasters and major weather events such as ice storms, to an increase in the reach, speed, and stability of their wireline-
wind storms, forest fires, flooding, earthquakes, or landslides where related services. This could result in an increase in churn pertaining
it is necessary and feasible to do so. There are no assurances that a to our wireline business segment services.
future event will not cause service outages and that such outages
Improvements in the quality of streaming video over the Internet,
would not affect our results. Service disruptions or outages could
coupled with increasing availability of television shows and movies
also affect our operations if not quickly resolved, potentially causing
online through OTT content providers, has resulted in competition
a risk of billing delays or errors. If we fail to have appropriate
for viewership and increased competition for Canadian cable
response strategies and protocols in place to handle service
television service providers. As a result, we have noticed an increase
outages in the face of these types of events, they could have an
in cord cutting and cord shaving as consumers continue to
impact on our revenue and our customer experience. Recovering
withdraw from traditional cable services. If advances in technology
from these disasters could require significant resources and
are made to any alternative Canadian multi-channel broadcasting
remediation costs, which are difficult to estimate.
distribution system, our cable services may face increased
competition. In addition, as the technology for wireless Internet
COMPETITIVE INTENSITY continues to develop, it is, in some instances, replacing traditional
Competitive behaviour and market dynamics are continuously wireline Internet.
changing in our fast-paced industry. There is no assurance that our
current or future competitors will not provide services that are
REGULATORY RISKS
superior to ours or at lower prices, adapt more quickly to evolving
Changes in government regulations
industry trends or changing market requirements, enter markets in
Substantially all of our business activities are regulated by ISED
which we operate, or introduce competing services. The federal
Canada and/or the CRTC. Any regulatory changes or decisions
government also continues to promote competition and
could adversely affect our consolidated results of operations. The
affordability, and is committed to universal high-speed Internet for
most significant outstanding regulatory proceedings to our
every Canadian by 2030. Any of these factors could increase churn
business are various appeals related to the wholesale Internet
or reduce our business market share or revenue.
costing and pricing regime (see “Regulation in our Industry” and
The strategic offering of unlimited wireless plans continues to offer “Litigation Risks”).
greater value to our customers and has helped us take a significant
Regulatory changes or decisions made by these regulators could
step towards simplifying our products and services. However,
adversely impact our results on a consolidated basis. This
depending on economic conditions and the response from our
regulation relates to, among other things, licensing and related
competitors and/or current and potential customers, we may need
fees, competition, the cable television programming services we
to extend lower wireless pricing offers to attract new customers and
must distribute, wireless and wireline interconnection agreements,
retain existing subscribers. As wireless penetration of the
the rates we may charge to provide access to our networks by third
population deepens, new wireless customers may generate lower
parties, the resale of our networks and roaming on our networks,
average monthly revenue, which could slow revenue growth.
our operation and ownership of communications systems, and our
Global technology giants continue to ramp up content spending ability to acquire an interest in other communications systems. In
into new markets such as sports media, resulting in increased addition, the costs of providing services may be increased from
competition for our Media and Cable segments. This may result in time to time as a result of compliance with industry or legislative
an increase in subscriber churn as customers now have additional initiatives to address consumer protection concerns or such
choices of supplementary sources of media content. Internet-related issues as copyright infringement, unsolicited
commercial e-mail, cybercrime, and lawful access.
Competition is increasing for content programming rights from
both traditional linear television broadcasters and online Generally, our licences are granted for a specified term and are
competitors. Online providers are moving towards self-made, self- subject to conditions on the maintenance of these licences. These
hosted exclusive content, and may compete for rights more licensing conditions and related fees may be modified at any time
aggressively than expected, such that traditional broadcasters may by the regulators. The regulators may decide not to renew a licence
not gain access to desirable programming. Overall increased when it expires, and any failure by us to comply with the conditions
competition for content will likely increase costs of programming on the maintenance of a licence could result in a revocation or
rights. As broadcasters and distributors sign longer-term forfeiture of any of our licences or the imposition of fines. Our
agreements to secure programming rights, this could affect the cable, wireless, and broadcasting licences generally may not be
availability of desirable programming rights and result in lower transferred without regulatory approval.
revenue due to a lack of access to these rights. Lower revenue in
The licences include conditions requiring us to comply with
turn could adversely affect the operating results of our business if
Canadian ownership restrictions of the applicable legislation. We
we are unable to recover programming investments through
are currently in compliance with all of these Canadian ownership
advertising revenue and subscription fee increases that reflect the
and control requirements. If these requirements were violated, we
market.
would be subject to various penalties, possibly including, in the
In addition, the CRTC Broadcasting Distribution Regulations do not extreme case, the loss of a licence.
allow cable operators to obtain exclusive contracts in buildings
where it is technically feasible to install two or more transmission
systems.
career and development opportunities, competitive compensation agencies lower the credit ratings on our debt, particularly a
and benefits, fostering an inclusive and diverse workplace, and a downgrade below investment-grade, it could adversely affect our
great employee experience. Failure to maintain and achieve this cost of financing and access to liquidity and capital.
focus, and changes to our workforce as a result of factors such as
turnover and restructuring, failing to develop internal succession, Capital markets
cost reduction initiatives, ongoing union negotiations, or other External capital market conditions could affect our ability to make
events, could have an adverse effect on the customer experience, strategic investments and meet ongoing capital funding
and as a result our revenue and profitability. requirements. Risk factors include a reduction in lending activity,
disruptions in capital markets, and regulatory requirements for an
RELIANCE ON SUPPLY CHAIN AND THIRD PARTIES increase in bank capitalization, which could either reduce the
We have outsourcing, managed service, and supplier availability, or increase the cost of capital.
arrangements with third parties to provide certain essential
components of our business operations to our employees and Income taxes and other taxes
customers. These include, but are not limited to, certain critical We collect, pay, and accrue significant amounts of income and
infrastructure components and devices; facilities or property other taxes, such as federal and provincial sales, employment, and
management functions; contact centre support; installation and property taxes.
service technicians; network and IT functions; and invoice printing.
We have recorded significant amounts of deferred and current
Some of these essential suppliers are relatively small in number and
income tax liabilities and expense, and calculated these amounts
we have limited operational or financial control over them. If
based on substantively enacted income tax rates in effect at the
interruptions in these services or at these suppliers occur, including
relevant time. A legislative change in these rates could have a
due to the ongoing global supply chain issues, it could adversely
material effect on the amounts recorded and payable in the future.
affect our ability to service our customers. Additionally, in the
course of fulfilling service arrangements, third-party service We provide for income and other taxes based on all currently
providers must ensure our information is appropriately protected available information and believe that we have adequately
and safeguarded. Failure to do so may affect Rogers through provided for these items. The calculation of applicable taxes in
increased regulatory risk, reputational damage, and damage to the many cases, however, requires significant judgment in interpreting
customer experience. tax rules and regulations. Our tax filings are subject to audits, which
could materially change the amount of current and deferred
FINANCIAL RISKS income tax assets, liabilities, and expense, and could, in certain
Capital commitments, liquidity, debt, and interest payments circumstances, result in the assessment of interest and penalties.
Our capital commitments and financing obligations could have
While we believe we have paid and provided for adequate
important consequences, including:
amounts of tax, our business is complex and significant judgment is
• requiring us to dedicate a substantial portion of cash provided
required in interpreting how tax legislation and regulations apply to
by operating activities to pay interest, principal amounts, and
us.
dividends, which reduces funds available for other business
purposes, including other financial operations;
• making us more vulnerable to adverse economic and industry OTHER RISKS
conditions; Economic conditions
• limiting our flexibility in planning for, and reacting to, changes in Our businesses are affected by general economic conditions and
our business and industry; consumer confidence and spending. Recessions, declines in
• putting us at a competitive disadvantage compared to economic activity, and economic uncertainty can erode consumer
competitors who may have more financial resources and/or less and business confidence and reduce discretionary spending. Any
financial leverage; or of these factors can negatively affect us through reduced
• restricting our ability to obtain additional financing to fund advertising, lower demand for our products and services,
working capital and capital expenditures and for other general decreased revenue and profitability, and higher churn and bad
corporate purposes. debt expense. A significant portion of our broadcasting and digital
revenue comes from the sale of advertising and is affected by the
Our ability to satisfy our financial obligations depends on our future strength of the economy.
operating performance and on economic, financial, competitive,
and other factors, many of which are beyond our control. Our Strategy and business plans
business may not generate sufficient cash flow in the future and Our strategy is vital to our long-term success. Changing strategic
financings may not be available to provide sufficient net proceeds priorities or adding new strategic priorities could compromise
to meet our obligations or to successfully execute our business existing initiatives and could have a material adverse effect on our
strategy. business, results of operations, and financial condition.
Credit ratings We develop business plans, execute projects, and launch new
Credit ratings provide an independent measure of credit quality of ventures to grow our business. If the expected benefits from these
a securities issuer and can affect our ability to obtain short- and do not materialize, this could have a material adverse effect on our
long-term financing and the terms of the financing. If rating business, results of operations, and financial condition.
are subject to evolving and increasingly stringent federal, provincial, was granted on September 15, 2021. We, along with several other
and local environmental, health, and safety laws and regulations. cable companies, have intervened in these matters.
Such laws and regulations impose requirements with respect to
matters such as the release of substances into the environment, System access fee – Saskatchewan
corrective and remedial action concerning such releases, and the In 2004, a class action was commenced against providers of
proper handling and management of substances. These evolving wireless communications in Canada under the Class Actions Act
considerations and more stringent laws and regulations could lead (Saskatchewan). The class action relates to the system access fee
to increased costs for compliance and rising costs of utilities. Failure wireless carriers charge to some of their customers. The plaintiffs
to recognize and adequately respond could result in fines, are seeking unspecified damages and punitive damages, which
regulatory scrutiny, or damage to our reputation or brand. would effectively be a reimbursement of all system access fees
collected.
Controlling shareholder ownership risk
In 2007, the Saskatchewan Court granted the plaintiffs’ application
Rogers is a family-founded, family-controlled company. Voting
to have the proceeding certified as a national, “opt-in” class action
control of Rogers Communications Inc. is held by the Trust for the
where affected customers outside Saskatchewan must take specific
benefit of successive generations of the Rogers family and, as a
steps to participate in the proceeding. In 2008, our motion to stay
result, the Trust is able to elect all members of the Board and to
the proceeding based on the arbitration clause in our wireless
control the vote on most matters submitted to shareholders,
service agreements was granted. The Saskatchewan Court directed
whether through a shareholder meeting or a written consent
that its order, in respect of the certification of the action, would
resolution. The beneficiaries of the Trust are a small group of
exclude customers who are bound by an arbitration clause from
individuals who are members of the Rogers family, several of whom
the class of plaintiffs.
are also directors of the Board. The trustee is the trust company
subsidiary of a Canadian chartered bank. In 2009, counsel for the plaintiffs began a second proceeding
under the Class Actions Act (Saskatchewan) asserting the same
As at December 31, 2021, private Rogers family holding
claims as the original proceeding. If successful, this second class
companies controlled by the Trust owned approximately 98% of
action would be an “opt-out” class proceeding. This second
our outstanding Class A Shares (2020 – 98%) and approximately
proceeding was ordered conditionally stayed on the basis that it
10% of our Class B Non-Voting Shares (2020 – 10%), or in total
was an abuse of process.
approximately 29% of the total shares outstanding (2020 – 29%).
Only Class A Shares carry the right to vote in most circumstances. At the time the Saskatchewan class action was commenced,
corresponding claims were filed in multiple jurisdictions across
LITIGATION RISKS Canada. The claims in all provinces other than Saskatchewan have
Wholesale Internet costing and pricing now been dismissed or discontinued. We have not recognized a
On August 15, 2019, in Telecom Order CRTC 2019-288, Follow-up liability for this contingency.
to Telecom Orders 2016-396 and 2016-448 – Final rates for
aggregated wholesale high-speed access services (Order), the 911 fee
CRTC set final rates for facilities-based carriers’ wholesale high- In June 2008, a class action was launched in Saskatchewan against
speed access services, including Rogers’ TPIA service. The Order providers of wireless communications services in Canada. It involves
set final rates for Rogers that are significantly lower than the interim allegations of breach of contract, misrepresentation, and false
rates that were previously billed and it further determined that advertising, among other things, in relation to the 911 fee that had
these final rates will apply retroactively to March 31, 2016. been charged by us and the other wireless telecommunication
providers in Canada. The plaintiffs are seeking unspecified damages
We did not believe the final rates set by the CRTC were just and
and restitution. The plaintiffs intend to seek an order certifying the
reasonable as required by the Telecommunications Act as we
proceeding as a national class action in Saskatchewan. We have not
believed they were below cost. On May 27, 2021, the CRTC
recognized a liability for this contingency.
released Telecom Decision CRTC 2021-181 Requests to review and
vary Telecom Order 2019-288 regarding final rates for aggregated
Videotron Ltd.
wholesale high-speed access services. The CRTC decided to adopt
On October 29, 2021, Videotron Ltd. launched a lawsuit against
the interim rates in effect prior to the Order as the final rates, with
Rogers in the Quebec Superior Court, in connection with the
certain modifications, including the removal of the supplementary
agreement entered into by the parties in 2013 for the development
markup of 10% for incumbent local exchange carriers.
and operation of a joint LTE network in the province of Quebec.
The final rates are lower than the rates we previously billed to the The lawsuit involves allegations by Videotron Ltd. that Rogers has
resellers for the period of March 31, 2016 to October 6, 2016. We breached its contractual obligations by developing its own network
have recognized a refund of amounts previously billed to the in the territory. Videotron is seeking compensatory damages in the
resellers of approximately $25 million, representing the impact on amount of $850 million. We intend to vigorously defend this
a retroactive basis for that period. lawsuit. We have not recognized a liability for this contingency.
DISCLOSURE CONTROLS AND PROCEDURES All internal control systems, however, no matter how well designed,
We conducted an evaluation of the effectiveness of the design and have inherent limitations, and even systems that have been
operation of our disclosure controls and procedures as at determined to be effective can only provide reasonable assurance
December 31, 2021, under the supervision and with the about the preparation and presentation of financial statements.
participation of our management, including the Chief Executive
Officer and Chief Financial Officer, pursuant to Rule 13a-15 CHANGES IN INTERNAL CONTROL OVER FINANCIAL
promulgated under the US Securities Exchange Act of 1934, as REPORTING AND DISCLOSURE CONTROLS AND
amended. Based on this evaluation, our Chief Executive Officer and PROCEDURES
Chief Financial Officer concluded that our disclosure controls and There have been no changes in 2021 that materially affected, or are
procedures were effective at that date. reasonably likely to materially affect, our internal controls over
financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
Management is responsible for establishing and maintaining
adequate internal controls over financial reporting.
The CRTC is also responsible under the Telecommunications Act The chief executive officer and 80% of the members of the board
for the regulation of telecommunications carriers, including: of directors of the operating licensee must be resident Canadians.
• Wireless’ mobile voice and data operations; and There are no restrictions on the number of non-voting shares that
• Cable’s Internet and telephone services. may be held by non-Canadians at either the holding company or
the licensee company level. Neither the Canadian carrier nor its
Our cable and telecommunications retail services are not currently parent may be otherwise controlled in fact by non-Canadians.
subject to price regulation, other than our affordable entry-level
GOVERNMENT OF CANADA REVIEW OF THE publicly released on July 29, 2021. Twenty-three companies
BROADCASTING ACT participated in the auction and 1,495 of 1,504 licences were
On February 2, 2022, the Federal Government introduced Bill C-11, awarded to fifteen of those participants, with a total value of
the Online Streaming Act. Bill C-11 will amend the Broadcasting $8.91 billion. We won 325 licences across the country at a cost of
Act and make related and consequential amendments to other $3.3 billion. We made our first deposit of $665 million on
acts. The goal of Bill C-11 is to support Canada’s cultural policy August 13, 2021 and had expected to make final payment and
objectives of producing Canadian stories in the midst of a receive the spectrum licences on October 4, 2021.
changing broadcasting landscape. The main amendments would On September 22, 2021, due to concerns of possible interference
subject online streaming services to CRTC regulation and require between the frequency bands used for 5G communications and
specific investment in Canadian cultural enterprises and include the bands used for certain aviation navigation tools, ISED Canada
diverse programming, including Indigenous content. The CRTC will published its Addendum to Consultation on Amendments to
decide how the new regulatory regime is to be implemented SRSP-520, Technical Requirements for Fixed and/or Mobile
subject to the guidance that would be provided by the Systems, Including Flexible Use Broadband Systems, in the Band
Government in a policy direction to be issued when (and if) the Bill 3450-3650 MHz, thereby delaying the issuance of, and final
is passed. payment for, the spectrum licences.
TOWER SHARING POLICY The CRTC decided that mandated wholesale MVNO access must
In March 2013, ISED Canada released Revised Frameworks for be offered by the national carriers, and SaskTel in Saskatchewan,
Mandatory Roaming and Antenna Tower and Site Sharing, but only made available to eligible regional wireless carriers that
concluding a consultation initiated in 2012. It sets out the current hold mobile spectrum licences, and only in the areas that are
rules for tower and site sharing, among other things. The key terms covered by their licences. The terms and conditions associated with
of the tower and site sharing rules are: mandated MVNO access must be approved by the CRTC, while
• all holders of spectrum licences, radio licences, and rates will be subject to commercial negotiation, backstopped by
broadcasting certificates must share towers and antenna sites, final offer arbitration, with the CRTC acting as arbitrator. Mandated
where technically feasible, at commercial rates; and MVNO access will be limited to a seven-year period commencing
• the timeframe for negotiating agreements is 60 days, after which on the date the CRTC finalizes the terms and conditions. This time
arbitration according to ISED Canada arbitration rules will begin. limit is intended to provide the regional carriers sufficient time to
expand their networks while maintaining investment incentives.
The national wireless carriers must also provide seamless handoff as Of these criteria, the degree to which data is treated agnostically
part of the mandatory roaming they must offer to the regional will generally carry the most weight. The overriding expectation is
wireless carriers. Seamless handoff will ensure that calls in progress that all content and applications will be treated in a neutral manner.
are not dropped when customers travel outside their home Zero-rating of account management functions (e.g., monitoring of
network coverage and into the coverage of their roaming provider. Internet data usage or the payment of bills online) will generally be
The CRTC also directed the national wireless carriers to offer 5G permitted.
roaming where the roaming network offers 5G service on its own
network and to file proposed revised terms and conditions within WHOLESALE INTERNET COSTING AND PRICING
90 days for CRTC approval. On August 15, 2019, in Telecom Order CRTC 2019-288, Follow-up
Finally, the CRTC mandated retail rate plans for low-cost and to Telecom Orders 2016-396 and 2016-448 – Final rates for
occasional use. These plans were implemented on July 14, 2021. aggregated wholesale high-speed access services (2019 Order),
the CRTC set final rates for facilities-based carriers’ wholesale HAS,
including Rogers’ TPIA service. The 2019 Order set final rates for
CABLE Rogers that are significantly lower than the interim rates that were
previously billed and it further determined that these final rates will
COPYRIGHT RETRANSMISSION OF DISTANT SIGNALS
apply retroactively to March 31, 2016. We do not believe the final
Pursuant to section 31(2) of the Copyright Act, television service
rates set by the CRTC are just and reasonable as required by the
providers are permitted to retransmit programming within distant
Telecommunications Act as we believe they are below cost.
over-the-air television signals as part of a compulsory licensing
regime. Rates for the distribution of the programming are On September 13, 2019, Rogers, in conjunction with the other
established through negotiation or set by the Copyright Board. large Canadian cable companies (Cable Carriers), filed a motion for
Distributors and content providers (the Collectives) were unable to Leave to Appeal pursuant to Section 64(1) of the
agree on a new rate for the distribution of distant signals after the Telecommunications Act with the Federal Court of Appeal (Court)
expiration of the then-current agreement in 2013. A proceeding and an associated motion for an interlocutory Stay of the 2019
was initiated by the Copyright Board in 2015 and a decision was Order. On November 22, 2019, the Court granted Leave to Appeal
rendered on December 18, 2018. The decision increased the rate and an interlocutory Stay of the 2019 Order. On September 10,
paid by broadcast distribution undertakings (BDUs) by 2020, the Court dismissed the Cable Carriers’ appeal and
approximately 8% for 2014, a further 7.5% for 2015, and a further simultaneously vacated the interlocutory Stay previously granted.
2.5% for 2016, with 2017 and 2018 held constant at the 2016 rate.
On November 13, 2019, Rogers, again in conjunction with the
For the period of 2019 to 2023, an interim rate was set at the 2016
other Cable Carriers, filed an appeal of the 2019 Order with the
rate of $1.17.
Federal Cabinet, pursuant to Section 12(1) of the
The Collectives appealed the Copyright Board’s decision on the Telecommunications Act, asking the Cabinet to order the CRTC to
2014 to 2018 rates, seeking to have the rates increased to an reconsider its August 15, 2019 decision in conjunction with the
average of approximately $2.20 for the five-year period. On July 22, CRTC’s previously announced review of the entire wholesale
2021, the Federal Court of Appeal (Court) released a decision in regulatory framework. On August 15, 2020, the Federal Cabinet
which it determined the 2014 and 2015 rates would be final but recognized that the final rates did not always appropriately balance
agreed with the Collectives that errors were made with respect to the policy objectives of the wholesale network and were concerned
the 2016 to 2018 rates. The Copyright Board could hold a new that they would undermine investment in high-quality networks.
proceeding as soon as early 2022 to determine the rates from They however decided not to refer the matter back to the CRTC,
2016 onwards. In the meantime, the BDUs, including Rogers, have given that the matter was already before them as a result of the
filed a motion for Leave to Appeal the Court’s decision with the review and vary application filed by Rogers and the other Cable
Supreme Court of Canada. Due to the significant uncertainty Carriers.
surrounding both the outcome and the amount, if any, we might
On December 13, 2019, Rogers, again in conjunction with the
have to pay, we have not recorded a liability for this contingency at
other Cable Carriers, filed an Application with the CRTC seeking
this time. The fees we currently pay the Collectives are not material.
review and variance and stay of the 2019 Order pursuant to
sections 27(1), 61(2), and 62 of the Telecommunications Act, Part 1
DIFFERENTIAL PRICING RELATED TO INTERNET DATA of the Canadian Radio-television and Telecommunications
PLANS Commission Rules of Practice and Procedure, and
On April 20, 2017, the CRTC released Telecom Regulatory Policy Telecommunications Information Bulletin CRTC 2011-214, Revised
CRTC 2017-104, Framework for assessing the differential pricing Guidelines for review and vary applications. Specifically, we seek:
practices of Internet service providers, setting out the evaluation a) review and variance of the methodology and the resulting
criteria it will apply to determine whether a specific differential rates approved for the Cable Carriers’ aggregated wholesale
pricing practice complies with subsection 27(2) of the HAS in the 2019 Order in conjunction with the CRTC’s
Telecommunications Act on a case-by-case basis, as follows: planned review of its approach to setting the rates for
• the degree to which the treatment of data is agnostic (i.e., data is wholesale telecommunications services generally;
treated equally regardless of its source or nature); b) review and variance of the determination in the 2019 Order
• whether the offering is exclusive to certain customers or certain regarding retroactivity such that any new wholesale rates for
content providers; Cable Carrier HAS services apply only on a prospective basis;
• the impact on Internet openness and innovation; and and
• whether there is financial compensation involved.
existing “preponderance” rule so that consumers will have to be distribution undertakings, the CRTC renewed Rogers’ Broadcasting
offered, but will not have to receive, a majority of Canadian services. Distribution Undertaking licences in Ontario and Atlantic Canada
for a full seven-year licence term with conditions substantially
A number of changes to the Wholesale Code (formerly the Vertical
consistent with Rogers’ application.
Integration (VI) Code) addressing, amongst other matters,
penetration-based rate cards and minimum guarantees were also
made. All licensed programmers and BDUs are to comply with the CRTC PROCEEDING ON FUTURE PROGRAMMING
Wholesale Code, which came into effect on January 22, 2016. DISTRIBUTION MODELS
On October 12, 2017, prompted by Order in Council P.C. 2017-
The decision also addressed rules for distribution of foreign 1195, the CRTC initiated a proceeding (Broadcasting Notice of
services authorized for distribution in Canada, including Consultation CRTC 2017-359, Call for comments on the Governor
requirements that foreign services make their channels available “à in Council’s request for a report on future programming distribution
la carte” and in “pick-packs” or in smaller pre-assembled packages models) to report on the distribution model or models of
and abide by the Wholesale Code. Access rules for VI-owned programming that are likely to exist in the future; how and through
services and independent services, channel packaging, and whom Canadians will access that programming; and the extent to
buy-through rules for multicultural services were also addressed. which these models will ensure a vibrant domestic market that is
On March 26, 2015, in the final decision related to Let’s Talk TV, the capable of supporting the continued creation, production, and
CRTC announced plans to establish a Television Service Provider distribution of Canadian programming, in both official languages,
(TVSP) Code of Conduct to govern certain aspects of the including original entertainment and information programming.
relationship between TVSPs and their customers as well as to allow On May 30, 2018, the CRTC issued its report on future
consumers to complain to the Commissioner for Complaints for programming distribution models requested by the government in
Telecommunications Services about their providers which came September 2017 through Order in Council P.C. 2017-1195. The
into effect on September 1, 2017. report proposes new tools and regulatory approaches to support
the production and promotion of audio and video content made
ROGERS CABLE TV LICENCE RENEWALS by and for Canadians. The report will inform the government’s
On August 2, 2018, in Broadcasting Decision CRTC 2018-265, review of the Broadcasting Act and Telecommunications Act.
Rogers – Licence renewal for various terrestrial broadcasting
adjusted value of derivatives requires assessment of the credit risk of Restricted share unit (RSU) and deferred share unit (DSU) plans
the parties to the instruments and the instruments’ discount rates. We recognize outstanding RSUs and DSUs as liabilities, measuring
the liabilities and compensation costs based on the awards’ fair
For all derivative instruments where hedge accounting is applied,
values, which are based on the market price of the Class B
we are required to ensure that the hedging relationships meet
Non-Voting Shares, and recognizing them as charges to operating
hedge effectiveness criteria. Hedge effectiveness testing requires
costs over the vesting period of the awards. If an award’s fair value
the use of both judgments and estimates.
changes after it has been granted and before the exercise date, we
recognize the resulting changes in the liability within operating
PENSION BENEFITS costs in the year the change occurs. For RSUs, the payment amount
When we account for defined benefit pension plans, assumptions is established as of the vesting date. For DSUs, the payment
are made in determining the valuation of benefit obligations. amount is established as of the exercise date.
Assumptions and estimates include the discount rate, the rate of
future compensation increase, and the mortality rate. Changes to
JUDGMENTS
these primary assumptions and estimates would affect the pension
expense, pension asset and liability, and other comprehensive REVENUE FROM CONTRACTS WITH CUSTOMERS
income. Changes in economic conditions, including financial Distinct goods and services
markets and interest rates, may also have an impact on our pension We make judgments in determining whether a promise to deliver
plans, as there is no assurance that the plans will be able to earn goods or services is considered distinct. We account for individual
the assumed rate of return. Market-driven changes may also result products and services separately if they are distinct (i.e. if a product
in changes in the discount rates and other variables that could or service is separately identifiable from other items in the bundled
require us to make contributions in the future that differ significantly package and if the customer can benefit from it). The consideration
from the current contributions and assumptions incorporated into is allocated between separate products and services in a bundle
the actuarial valuation process. based on their stand-alone selling prices. For items we do not sell
Below is a summary of the effect an increase or decrease in the separately, we estimate stand-alone selling prices using the
primary assumptions and estimates would have had on our adjusted market assessment approach.
accrued benefit obligation as at December 31, 2021.
Determining costs to obtain or fulfill a contract
Increase (decrease) Determining the costs we incur to obtain or fulfill a contract that
in accrued
(In millions of dollars)
meet the deferral criteria within IFRS 15 requires us to make
benefit obligation
significant judgments. We expect incremental commission fees
Discount rate paid to internal and external representatives as a result of obtaining
Impact of 0.5% increase (251)
contracts with customers to be recoverable.
Impact of 0.5% decrease 285
Rate of future compensation increase
Impact of 0.25% increase 17 Residual value arrangements
Impact of 0.25% decrease (17) Under certain customer offers, we allow customers to defer a
Mortality rate component of the device cost until contract termination. We use
Impact of 1 year increase 67 judgment in determining whether these arrangements constitute
Impact of 1 year decrease (72) revenue-generating arrangements or leases. In making this
determination, we use judgment to assess the extent of control
over the devices that passes to our customer, including whether the
STOCK-BASED COMPENSATION
customer has a significant economic incentive at contract inception
Stock option plans
to return the device at contract termination.
Our employee stock option plans attach cash-settled share
appreciation rights (SARs) to all new and previously granted
options. The SAR feature allows the option holder to elect to LEASES
receive a cash payment equal to the intrinsic value of the option, We make judgments in determining whether a contract contains
instead of exercising the option and acquiring Class B Non-Voting an identified asset. The identified asset should be physically distinct
Shares. We measure stock-based compensation to employees at or represent substantially all of the capacity of the asset, and should
fair value. We determine the fair value of options using our Class B provide us with the right to substantially all of the economic
Non-Voting Share price and option pricing models, and record all benefits from the use of the asset.
outstanding stock options as liabilities. The liability is marked to We also make judgments in determining whether or not we have
market each period and is amortized to expense using a graded the right to control the use of the identified asset. We have that
vesting approach over the period during which employee services right when we have the decision-making rights that are most
are rendered, or over the period to the date an employee is relevant to changing how and for what purpose the asset is used. In
eligible to retire, whichever is shorter. The expense in each period rare cases where the decisions about how and for what purpose
is affected by the change in the price of our Class B Non-Voting the asset is used are predetermined, we have the right to direct the
Shares during the period. use of the asset if we have the right to operate the asset or if we
designed the asset in a way that predetermines how and for what
purpose the asset will be used.
We amortize the cost of intangible assets with finite lives over their INCOME TAXES AND OTHER TAXES
estimated useful lives. We review their useful lives, residual values, We accrue income and other tax provisions based on information
and the amortization methods at least once a year. currently available in each of the jurisdictions in which we operate.
We do not amortize intangible assets with indefinite lives (spectrum While we believe we have paid and provided for adequate
licences, broadcast licences, and certain brand names) as there is amounts of tax, our business is complex and significant judgment is
no foreseeable limit to the period over which these assets are required in interpreting how tax legislation and regulations apply to
expected to generate net cash inflows for us. We make judgments us. Our tax filings are subject to audit by the relevant government
to determine that these assets have indefinite lives, analyzing all revenue authorities and the results of the government audit could
relevant factors, including the expected usage of the asset, the materially change the amount of our actual income tax expense,
typical life cycle of the asset, and anticipated changes in the market income tax payable or receivable, other taxes payable or
demand for the products and services the asset helps generate. receivable, and deferred income tax assets and liabilities and could,
After review of the competitive, legal, regulatory, and other factors, in certain circumstances, result in the assessment of interest and
it is our view that these factors do not limit the useful lives of our penalties.
spectrum licences, broadcast licences, and certain brand names.
CONTINGENCIES
Judgment is also applied in choosing methods for amortizing our Considerable judgment is involved in the determination of
intangible assets and program rights that we believe most contingent liabilities. Our judgment is based on information
accurately represent the consumption of those assets and are most currently known to us, and the probability of the ultimate resolution
representative of the economic substance of the intended use of of the contingencies. If it becomes probable that a contingent
the underlying assets. liability will result in an outflow of economic resources, we will
record a provision in the period the change in probability occurs.
IMPAIRMENT OF ASSETS The amount of the loss involves judgment based on information
We make judgments in determining CGUs and the allocation of available at that time. Any provision recognized for a contingent
goodwill to CGUs or groups of CGUs for the purpose of liability could be material to our consolidated financial position and
impairment testing. The allocation of goodwill involves results of operations.
considerable management judgment in determining the CGUs (or
groups of CGUs) that are expected to benefit from the synergies of ONEROUS CONTRACTS
a business combination. A CGU is the smallest identifiable group Significant judgment is required to determine when we are subject
of assets that generates cash inflows that are largely independent to unavoidable costs arising from onerous contracts. These
of the cash inflows from other assets or groups of assets. Goodwill judgments may include, for example, whether a certain promise is
and indefinite-life intangible assets are allocated to CGUs (or legally binding or whether we may be successful in negotiations
groups of CGUs) based on the level at which management with the counterparty.
monitors goodwill, which is not higher than an operating segment.
TRANSACTIONS WITH RELATED PARTIES financial reporting after the reform of an interest rate benchmark.
There is significant uncertainty over the timing of when the
We have entered into certain transactions in the normal course of replacements for IBORs will be effective and what those
business with related parties in which we have an equity interest, replacements will be. We will actively monitor the IBOR reform
being primarily MLSE (primarily broadcasting rights) and Glentel and consider circumstances as we renew or enter into new
(Wireless distribution support). The amounts received from or paid financial instruments.
to these parties were as follows: • Amendments to IFRS 16, Leases, allowing lessees to not assess
Years ended December 31 whether a COVID-19-related rent concession is a lease
modification.
(In millions of dollars) 2021 2020 % Chg
Revenue 31 26 19
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET
Purchases 180 121 49
ADOPTED
We have entered into business transactions with Transcontinental The IASB has issued the following new standard and amendments
Inc., a company that provides us with printing and prepress that will become effective in future years and could have an impact
services. Isabelle Marcoux, C.M., is chair of the board of on our consolidated financial statements in future periods:
Transcontinental Inc. and was a Director of RCI until June 2021. • IFRS 17, Insurance Contracts, a replacement of IFRS 4, Insurance
Years ended December 31 Contracts, that aims to provide consistency in the application of
accounting for insurance contracts (January 1, 2023).
(In millions of dollars) 2021 2020
• Amendments to IFRS 3, Business Combinations – Updating a
Printing and prepress services 3 4 Reference to the Conceptual Framework, updating a reference in
IFRS 3 to now refer to the Conceptual Framework (January 1,
We have also entered into business transactions with companies 2022).
controlled by our Directors Michael J. Cooper and John C. Kerr, • Amendments to IAS 16, Property, Plant and Equipment:
which, as a result of the Board reconstitution in October 2021, are Proceeds before intended use, prohibiting reducing the cost of
now related parties. These companies include Dream Unlimited property, plant and equipment by proceeds while bringing an
Corp. and Vancouver Professional Baseball LLP, respectively. asset to capable operations (January 1, 2022).
Dream Unlimited Corp. is a real estate company that rents spaces • Amendments to IAS 37, Provisions, Contingent Liabilities and
in office and residential buildings. Vancouver Professional Baseball Contingent Assets – Onerous Contracts, specifying costs an entity
LLP controls the Vancouver Canadians, the Toronto Blue Jays’ should include in determining the “cost of fulfilling” a potential
High-A affiliate minor league team. Total amounts paid to these onerous contract (January 1, 2022).
related parties during the period from October 2021 to December • Amendments to IAS 1, Presentation of Financial Statements –
2021 were nominal. Classification of Liabilities as Current or Non-current, clarifying the
classification requirements in the standard for liabilities as current
We have also entered into certain transactions with the Trust and
or non-current (January 1, 2023).
companies it controls. These transactions are subject to formal
• Amendments to IAS 1, Presentation of Financial Statements –
agreements approved by the Audit and Risk Committee. Total
Disclosure of Accounting Policies, requiring entities to disclose
amounts paid to these related parties generally reflect the charges
material, instead of significant, accounting policy information
to Rogers for occasional business use of aircraft, net of other
(January 1, 2023).
administrative services, and were less than $1 million for each of
• Amendments to IAS 8, Accounting Policies – Changes in
2021 and 2020.
Accounting Estimates and Errors, clarifying the definition of
These transactions are measured at the amount agreed to by the “accounting policies” and “accounting estimates” (January 1,
related parties, which are also reviewed by the Audit and Risk 2023).
Committee. The amounts owing are unsecured, interest-free, and • Amendments to IAS 12, Income Taxes – Deferred Tax related to
due for payment in cash within one month from the date of the Assets and Liabilities arising from a Single Transaction, narrowing
transaction. the scope for exemption when recognizing deferred taxes
(January 1, 2023).
NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN We do not expect IFRS 17, Insurance Contracts, or the
2021 amendments effective January 1, 2022, will have an effect on our
consolidated financial statements. We are assessing the impacts, if
We adopted the following IFRS amendments in 2021. They did not
any, the remaining amendments will have on our consolidated
have a material effect on our financial statements.
financial statements; however we currently do not expect any
• Interest Rate Benchmark Reform – Phase 2 (Amendments to
material impacts.
IFRS 9, IAS 39, and IFRS 7), addressing issues that might affect
CUSTOMER RELATIONSHIPS the Toronto Blue Jays, which are also core to our business. We
Customer relationships are represented by dwelling units where at calculate total service revenue by subtracting equipment revenue
least one of our Cable services (i.e. Internet, legacy television or from total revenue.
Ignite TV, and/or home phone) are installed and operating, and the
service or services are billed accordingly. When there is more than DIVIDEND PAYOUT RATIOS
one unit in one dwelling, such as an apartment building, each We calculate the dividend payout ratio by dividing dividends
tenant with at least one of our Cable services is counted as an declared for the year by net income or free cash flow for the year.
individual customer relationship, whether the service is invoiced We use dividends as a percentage of net income and free cash
separately or included in the tenant’s rent. Institutional units, like flow to conduct analysis and assist with determining the dividends
hospitals or hotels, are each considered one customer relationship. we should pay. Dividend payout ratio of net income and dividend
payout ratio of free cash flow are also supplementary financial
MARKET PENETRATION measures. See “Non-GAAP and Other Financial Measures” for an
Market penetration (penetration) measures our success at explanation as to the composition of these measures.
attracting new households to our brands and products within our
network footprint. Market penetration is calculated by dividing RETURN ON ASSETS
customer relationships by homes passed. An increasing market We use return on assets to measure our efficiency in using our
penetration rate reflects more new customer relationships than assets to generate net income. Return on assets is also a
new homes passed. supplementary financial measure. See “Non-GAAP and Other
Financial Measures” for an explanation as to the composition of this
CAPITAL INTENSITY measure.
Capital intensity allows us to compare the level of our capital
expenditures to that of other companies within the same industry. 2022 KEY PERFORMANCE INDICATOR CHANGES
Our capital expenditures do not include expenditures on spectrum Effective January 1, 2022, we will begin disclosing mobile phone
licences or additions to right-of-use assets. We use it to evaluate the subscribers in Wireless, which will represent devices with voice-only
performance of our assets and when making decisions about or voice-and-data plans. Our current definition includes devices on
capital expenditures. We believe that certain investors and analysts data-only plans and customers who subscribe to our wireless home
use capital intensity to measure the performance of asset phone service. As a result, our definition of ARPU will also shift to
purchases and construction in relation to revenue. Capital intensity mobile phone ARPU. We will also no longer report ABPU given the
is also a supplementary financial measure. See “Non-GAAP and significant adoption of our wireless device financing program
Other Financial Measures” for an explanation as to the composition resulting in this metric being less meaningful.
of this measure.
In Cable, we will adjust our definition of an Internet subscriber such
that it will only include retail Internet subscribers, which will
TOTAL SERVICE REVENUE
represent customers who have Internet service installed and
We use total service revenue to measure our core business
operating, and are being billed directly by us. Our current
performance from the provision of services to our customers
definition includes TPIA subscribers and Smart Home Monitoring
separate from revenue generated from the sale of equipment we
subscribers.
have acquired from device manufacturers and resold. Included in
this metric is our retail revenue from Today’s Shopping Choice and
Most directly
comparable
Specified financial IFRS financial
measure How it is useful How we calculate it measure
Adjusted net • To assess the performance of our businesses before the effects of the Net income Net income
income noted items, because they affect the comparability of our financial add (deduct)
results and could potentially distort the analysis of trends in business restructuring, acquisition and other;
performance. Excluding these items does not imply that they are loss (recovery) on sale or wind down
non-recurring. 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; and
income tax adjustments on these
items, including adjustments as a
result of legislative changes.
Taxes paid and other • To assess how much cash we pay in taxes and fees to federal, Income taxes paid Income taxes paid
government provincial, and municipal governments. add
payments unrecoverable sales taxes paid;
payroll taxes paid, regulatory and
spectrum fees paid; and property
and business taxes paid.
Adjusted Wireless • To facilitate the calculation of Wireless blended average billings per Wireless service revenue Wireless service
service revenue user (see Non-GAAP ratios). add (deduct) revenue
amortization of contract assets and
contract liabilities to accounts
receivable; and financing receivable
billings.
Non-GAAP ratios
Specified financial
measure How it is useful How we calculate it
Adjusted basic • To assess the performance of our businesses before the effects Adjusted net income
earnings per of the noted items, because they affect the comparability of our divided by
share financial results and could potentially distort the analysis of basic weighted average shares outstanding.
trends in business performance. Excluding these items does not
Adjusted diluted imply that they are non-recurring. Adjusted net income including the dilutive effect of stock-based
earnings per compensation
share divided by
diluted weighted average shares outstanding.
Wireless blended • To help us identify trends in our total monthly billings per Adjusted Wireless service revenue
average billings per subscriber and to measure our success in attracting and divided by
user (ABPU) retaining higher-value subscribers. average total number of Wireless subscribers for the relevant
period.
Specified financial
measure Most directly comparable IFRS financial measure
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 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.
Specified financial
measure How we calculate it
The selected unaudited consolidating summary financial information for RCI for the periods identified below, presented with a separate
column for: (i) RCI, (ii) RCCI, (iii) our non-guarantor subsidiaries on a combined basis, (iv) consolidating adjustments, and (v) the total
consolidated amounts, is set forth as follows:
(In millions of dollars) 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Selected Statements of Income data measure:
Revenue — — 12,769 12,400 2,073 1,703 (187) (187) 14,655 13,916
Net income (loss) 1,558 1,592 1,528 1,316 105 171 (1,633) (1,487) 1,558 1,592
(In millions of dollars) 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Selected Statements of Financial Position data measure:
Current assets 29,982 27,186 28,825 26,326 10,089 9,929 (63,067) (56,512) 5,829 6,929
Non-current assets 33,290 31,184 28,959 24,835 3,717 3,650 (29,832) (27,744) 36,134 31,925
Current liabilities 30,993 27,264 32,942 28,167 9,378 9,294 (64,694) (58,139) 8,619 6,586
Non-current liabilities 18,943 18,740 4,960 5,080 181 152 (1,272) (1,278) 22,812 22,694
1 For the purposes of this table, investments in subsidiary companies are accounted for by the equity method.
2 Amounts recorded in current liabilities and non-current liabilities for RCCI do not include any obligations arising as a result of being a guarantor or co-obligor, as the case may be,
under any of RCI’s long-term debt.
Management has developed and maintains a system of internal The consolidated financial statements have been audited by KPMG
controls that further enhances the integrity of the consolidated LLP, the external auditors, in accordance with the standards of the
financial statements. The system of internal controls is supported by Public Company Accounting Oversight Board (United States) on
the internal audit function and includes management behalf of the shareholders. Our internal control over financial
communication to employees about its policies on ethical business reporting as of December 31, 2021 has been audited by KPMG
conduct. LLP, in accordance with the standards of the Public Company
Accountability Oversight Board (United States). KPMG LLP has full
Management believes these internal controls provide reasonable
and free access to the Audit and Risk Committee.
assurance that:
• transactions are properly authorized and recorded;
March 3, 2022
• financial records are reliable and form a proper basis for the
preparation of consolidated financial statements; and
• the assets of Rogers Communications Inc. and its subsidiaries are
properly accounted for and safeguarded.
The accompanying notes are an integral part of the consolidated financial statements.
Equity investments measured at fair value through other comprehensive income (FVTOCI):
Increase (decrease) in fair value 18 10 (302)
Related income tax (expense) recovery (3) 40
Equity investments measured at FVTOCI 7 (262)
Items that will not be reclassified to net income 442 (351)
The accompanying notes are an integral part of the consolidated financial statements.
As at As at
December 31 December 31
Note 2021 2020
Assets
Current assets:
Cash and cash equivalents 715 2,484
Accounts receivable 15 3,847 2,856
Inventories 16 535 479
Current portion of contract assets 5 115 533
Other current assets 497 516
Current portion of derivative instruments 17 120 61
Total current assets 5,829 6,929
Property, plant and equipment 7, 8 14,666 14,018
Intangible assets 9 12,281 8,926
Investments 18 2,493 2,536
Derivative instruments 17 1,431 1,378
Financing receivables 15 854 748
Other long-term assets 5 385 346
Goodwill 9 4,024 3,973
Total assets 41,963 38,854
Guarantees 27
Commitments and contingent liabilities 28
Subsequent events 17, 21, 24, 30
The accompanying notes are an integral part of the consolidated financial statements.
Class A Class B
Voting Shares Non-Voting Shares
Number Number FVTOCI Equity Total
of shares of shares Retained investment Hedging investment shareholders’
Year ended December 31, 2021 Amount (000s) Amount (000s) earnings reserve reserve reserve equity
Balances, January 1, 2021 71 111,154 397 393,771 7,916 999 194 (4) 9,573
Net income for the year — — — — 1,558 — — — 1,558
Other comprehensive income (loss):
Defined benefit pension plans, net of tax — — — — 435 — — — 435
FVTOCI investments, net of tax — — — — — 7 — — 7
Derivative instruments accounted for as
hedges, net of tax — — — — — — (33) — (33)
Share of equity-accounted investments, net
of tax — — — — — — — 2 2
Total other comprehensive income (loss) — — — — 435 7 (33) 2 411
Comprehensive income (loss) for the year — — — — 1,993 7 (33) 2 1,969
Reclassification to retained earnings for
disposition of FVTOCI investments — — — — 13 (13) — — —
Transactions with shareholders recorded directly
in equity:
Dividends declared — — — — (1,010) — — — (1,010)
Share class exchange — (1) — 1 — — — — —
Total transactions with shareholders — (1) — 1 (1,010) — — — (1,010)
Balances, December 31, 2021 71 111,153 397 393,772 8,912 993 161 (2) 10,532
Class A Class B
Voting Shares Non-Voting Shares
Number Number FVTOCI Equity Total
of shares of shares Retained investment Hedging investment shareholders’
Year ended December 31, 2020 Amount (000s) Amount (000s) earnings reserve reserve reserve equity
Balances, January 1, 2020 71 111,154 397 393,771 7,419 1,265 263 1 9,416
Net income for the period — — — — 1,592 — — — 1,592
Other comprehensive (loss) income:
Defined benefit pension plans, net of tax — — — — (89) — — — (89)
FVTOCI investments, net of tax — — — — — (262) — — (262)
Derivative instruments accounted for as
hedges, net of tax — — — — — — (69) — (69)
Share of equity-accounted investments, net
of tax — — — — — — — (5) (5)
Total other comprehensive (loss) income — — — — (89) (262) (69) (5) (425)
Comprehensive income (loss) for the year — — — — 1,503 (262) (69) (5) 1,167
Reclassification to retained earnings for
disposition of FVTOCI investments — — — — 4 (4) — — —
Transactions with shareholders recorded directly
in equity:
Dividends declared — — — — (1,010) — — — (1,010)
Total transactions with shareholders — — — — (1,010) — — — (1,010)
Balances, December 31, 2020 71 111,154 397 393,771 7,916 999 194 (4) 9,573
The accompanying notes are an integral part of the consolidated financial statements.
Cash and cash equivalents are defined as cash and short-term deposits that have an original maturity of less than 90 days, less bank
advances.
The accompanying notes are an integral part of the consolidated financial statements.
• non-monetary assets and liabilities, and related depreciation and (g) RECENT ACCOUNTING PRONOUNCEMENTS NOT YET
amortization – at the historical exchange rates; and ADOPTED
• revenue and expenses other than depreciation and amortization The IASB has issued the following new standard and amendments
– at the average rate for the month in which the transaction was that will become effective in a future year and could have an impact
recognized.
on our consolidated financial statements in future periods:
• IFRS 17, Insurance Contracts, a replacement of IFRS 4, Insurance
(d) BUSINESS COMBINATIONS Contracts, that aims to provide consistency in the application of
We account for business combinations using the acquisition accounting for insurance contracts (January 1, 2023).
method of accounting. Only acquisitions that result in our gaining • Amendments to IFRS 3, Business Combinations – Updating a
control over the acquired businesses are accounted for as business
Reference to the Conceptual Framework, updating a reference in
combinations. We possess control over an entity when we
IFRS 3 to now refer to the Conceptual Framework (January 1,
conclude we are exposed to variable returns from our involvement
2022).
with the acquired entity and we have the ability to affect those
• Amendments to IAS 16, Property, Plant and Equipment:
returns through our power over the acquired entity.
Proceeds before intended use, prohibiting reducing the cost of
We calculate the fair value of the consideration paid as the sum of property, plant and equipment by proceeds while bringing an
the fair value at the date of acquisition of the assets we transferred, asset to capable operations (January 1, 2022).
the equity interests we issued, and the liabilities we incurred to • Amendments to IAS 37, Provisions, Contingent Liabilities and
former owners of the subsidiary. Contingent Assets – Onerous Contracts, specifying costs an entity
We measure goodwill as the fair value of the consideration should include in determining the “cost of fulfilling” a potential
transferred less the net recognized amount of the identifiable assets onerous contract (January 1, 2022).
acquired and liabilities assumed, which are generally measured at • Amendments to IAS 1, Presentation of Financial Statements –
fair value as of the acquisition date. When the excess is negative, a Classification of Liabilities as Current or Non-current, clarifying the
gain on acquisition is recognized immediately in net income. classification requirements in the standard for liabilities as current
or non-current (January 1, 2023).
We expense the transaction costs associated with acquisitions as
• Amendments to IAS 1, Presentation of Financial Statements –
we incur them.
Disclosure of Accounting Policies, requiring entities to disclose
During the year ended December 31, 2021, we made several individually material, instead of significant, accounting policy information
immaterial acquisitions and recognized $51 million of related goodwill, (January 1, 2023).
$37 million of which has been allocated to our Cable operating segment • Amendments to IAS 8, Accounting Policies – Changes in
and $14 million of which has been allocated to our Media operating Accounting Estimates and Errors, clarifying the definition of
segment. During the year ended December 31, 2020, we made several “accounting policies” and “accounting estimates” (January 1,
individually immaterial acquisitions and recognized $50 million in related 2023).
goodwill, all of which was allocated to our Cable operating segment.
• Amendments to IAS 12, Income Taxes – Deferred Tax related to
Assets and Liabilities arising from a Single Transaction, narrowing
(e) GOVERNMENT GRANTS the scope for exemption when recognizing deferred taxes
We recognize government financial assistance when there is (January 1, 2023).
reasonable assurance that we will comply with the conditions of the
assistance and the assistance will be received. Assistance related to We do not expect IFRS 17, Insurance Contracts, or the
expenses is recognized as a reduction of the related expense; amendments effective January 1, 2022, will have an effect on our
assistance related to assets is recognized as a reduction to the consolidated financial statements. We are assessing the impacts, if
carrying amount of the asset. During the year ended December 31, any, the remaining amendments will have on our consolidated
2020, we qualified for $91 million of funding associated with the financial statements; however we currently do not expect any
Canada Emergency Wage Subsidy (CEWS) program, a federal material impacts.
government initiative offered to eligible employers who kept
individuals employed during COVID-19.
(h) ADDITIONAL SIGNIFICANT ACCOUNTING POLICIES,
ESTIMATES, AND JUDGMENTS
(f) NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN
When preparing our consolidated financial statements,
2021
management makes judgments, estimates, and assumptions that
We adopted the following IFRS amendments in 2021. They did not
affect how accounting policies are applied and the amounts we
have a material effect on our consolidated financial statements.
report as assets, liabilities, revenue, and expenses. Our significant
• Interest Rate Benchmark Reform – Phase 2 (Amendments to
accounting policies, estimates, and judgments are identified in this
IFRS 9, IAS 39, and IFRS 7), addressing issues that might affect
financial reporting after the reform of an interest rate benchmark. note or disclosed throughout the notes as identified in the table
There is significant uncertainty over the timing of when the below, including:
replacements for IBORs will be effective and what those • information about assumptions and estimation uncertainties that
replacements will be. We will actively monitor the IBOR reform have a significant risk of resulting in a material adjustment to the
and consider circumstances as we renew or enter into new amounts recognized in the consolidated financial statements;
financial instruments. • information about judgments made in applying accounting
• Amendments to IFRS 16, Leases, allowing lessees to not assess policies that have the most significant effect on the amounts
whether a COVID-19-related rent concession is a lease recognized in the consolidated financial statements; and
modification. • information on our significant accounting policies.
We expect to raise up to $19 billion in new debt to finance the Free cash flow
Transaction. To address this risk and requirement, we entered into a We use free cash flow to understand how much cash we generate
binding commitment letter for a committed credit facility with a that is available to repay debt or reinvest in our business, which is
syndicate of banks in an amount up to $19 billion (see note 19) in an important indicator of our financial strength and performance.
March 2021 and a $6 billion term loan facility (Shaw term loan
facility, see note 21) in April 2021, as a result of which, the Years ended December 31
maximum amount we can draw on this committed credit facility
decreased to $13 billion. We anticipate adjusted net debt will (In millions of dollars) Note 2021 2020
increase correspondingly with any debt issued or drawn and our Adjusted EBITDA 4 5,887 5,857
debt leverage ratio will increase significantly in the short- to Deduct (add):
medium-term. Capital expenditures 1 7 2,788 2,312
Interest on borrowings, net of
As at As at capitalized interest 11 728 761
December 31 December 31 Cash income taxes 2 700 418
(In millions of dollars) Note 2021 2020 Free cash flow 1,671 2,366
Current portion of long-term debt 21 1,551 1,450 1 Includes additions to property, plant and equipment net of proceeds on disposition,
Long-term debt 21 17,137 16,751 but does not include expenditures for spectrum licences or additions to right-of-use
Deferred transaction costs and assets.
discounts 21 185 172
2 Cash income taxes are net of refunds received.
18,873 18,373
Years ended December 31
Add (deduct):
Subordinated notes adjustment 1 (1,000) – (In millions of dollars) Note 2021 2020
Net debt derivative assets 2 (1,260) (1,086)
Cash provided by operating activities 4,161 4,321
Credit risk adjustment related to
Add (deduct):
net debt derivative assets 3 (18) (15)
Capital expenditures 7 (2,788) (2,312)
Short-term borrowings 19 2,200 1,221
Interest on borrowings, net of
Current portion of lease liabilities 8 336 278
capitalized interest 11 (728) (761)
Lease liabilities 8 1,621 1,557
Interest paid 802 808
Cash and cash equivalents (715) (2,484)
Restructuring, acquisition and other 10 324 185
Adjusted net debt 20,037 17,844 Program rights amortization 9 (68) (77)
Change in net operating assets and
liabilities 29 (37) 333
As at As at
Other adjustments 1 12, 23 5 (131)
December 31 December 31
Free cash flow 1,671 2,366
(In millions of dollars, except ratios) Note 2021 2020
1 Other adjustments consists of post-employment benefit contributions, net of
Adjusted net debt 20,037 17,844
expense, cash flows relating to other operating activities, and other expense from our
Divided by: trailing 12-month financial statements.
adjusted EBITDA 4 5,887 5,857
Subsequent to the final payment for the 3500 MHz spectrum credit facilities, which reduced total liquidity sources to $6.5 billion
licence acquisition in December 2021 (see note 9), we cancelled as at December 31, 2021.
$360 million of letters of credit and US$1.2 billion of non-revolving
INFORMATION BY SEGMENT
Corporate
Year ended December 31, 2021 items and Consolidated
(In millions of dollars) Note Wireless Cable Media eliminations totals
Revenue 5 8,768 4,072 1,975 (160) 14,655
Operating costs 6 4,554 2,059 2,102 53 8,768
Adjusted EBITDA 4,214 2,013 (127) (213) 5,887
Corporate
Year ended December 31, 2020 items and Consolidated
(In millions of dollars) Note Wireless Cable Media eliminations totals
Revenue 5 8,530 3,946 1,606 (166) 13,916
Operating costs 6 4,463 2,011 1,555 30 8,059
Adjusted EBITDA 4,067 1,935 51 (196) 5,857
Depreciation and amortization 7, 8, 9 2,618
Restructuring, acquisition and other 10 185
Finance costs 11 881
Other expense 12 1
Income before income tax expense 2,172
NOTE 5: REVENUE
ACCOUNTING POLICY distinct good or service. We also determine whether a customer
Contracts with customers can modify their contract within predefined terms such that we are
We record revenue from contracts with customers in accordance not able to enforce the transaction price agreed to, but can only
with the five steps in IFRS 15, Revenue from contracts with contractually enforce a lower amount. In situations such as these,
customers as follows: we allocate revenue between performance obligations using the
1. identify the contract with a customer; minimum enforceable rights and obligations and any excess
2. identify the performance obligations in the contract; amount is recognized as revenue as it is earned.
3. determine the transaction price, which is the total Revenue for each performance obligation is recognized either over
consideration provided by the customer; time (e.g. services) or at a point in time (e.g. equipment). For
4. allocate the transaction price among the performance performance obligations satisfied over time, revenue is recognized
obligations in the contract based on their relative fair as the services are provided. These services are typically provided,
values; and and thus revenue is typically recognized, on a monthly basis.
5. recognize revenue when the relevant criteria are met for Revenue for performance obligations satisfied at a point in time is
each performance obligation. recognized when control of the item (or service) transfers to the
Many of our products and services are sold in bundled customer. Typically, this is when the customer activates the goods
arrangements (e.g. wireless devices and voice and data services). (e.g. in the case of a wireless device) or has physical possession of
Items in these arrangements are accounted for as separate the goods (e.g. other equipment).
performance obligations if the item meets the definition of a
Performance obligations from contracts with customers Timing of satisfaction of the performance obligation
Wireless airtime, data, and other services; television, telephony, As the service is provided (usually monthly)
Internet, and smart home monitoring services; network services;
media subscriptions; and rental of equipment
Roaming, long-distance, and other optional or non-subscription As the service is provided
services, and pay-per-use services
Wireless devices and related equipment Upon activation or purchase by the end customer
Installation services for Cable subscribers When the services are performed
Advertising When the advertising airs on our radio or television stations or is
displayed on our digital properties
Subscriptions by television stations for subscriptions from cable When the services are delivered to cable and satellite providers’
and satellite providers subscribers (usually monthly)
Toronto Blue Jays’ home game admission and concessions When the related games are played during the baseball season
and when goods are sold
Toronto Blue Jays revenue from the Major League Baseball In the applicable period, when the amount is determinable
Revenue Sharing Agreement, which redistributes funds between
member clubs based on each club’s relative revenue, and other
league revenue sharing
Today’s Shopping Choice and Toronto Blue Jays merchandise When the goods are sold to the end customer
Radio and television broadcast agreements When the related programs are aired
Sublicensing of program rights Over the course of the applicable licence period
We also recognize interest revenue on credit card receivables using obligations, the financing receivable we recognize is greater than
the effective interest method in accordance with IFRS 9, Financial the related equipment revenue. As a result, we recognize a
Instruments. contract liability simultaneously with the financing receivable and
equipment revenue and subsequently reduce the contract liability
Payment for Wireless and Cable monthly service fees is typically
on a monthly basis.
due 30 days after billing. Payment for Wireless and Cable
equipment is typically due either upon receipt of the equipment or We account for contract assets and liabilities on a
over the subsequent 24 months (when equipment is financed contract-by-contract basis, with each contract presented as either a
through our equipment financing plans). Payment terms for typical net contract asset or a net contract liability accordingly.
Media performance obligations range from immediate (e.g.
Toronto Blue Jays tickets) to 30 days (e.g. advertising contracts). Deferred commission cost assets
We defer, to the extent recoverable, the incremental costs we incur
Contract assets and liabilities to obtain or fulfill a contract with a customer and amortize them
We record a contract asset when we have provided goods and over their expected period of benefit. These costs include certain
services to our customer but our right to related consideration for commissions paid to internal and external representatives that we
the performance obligation is conditional on satisfying other believe to be recoverable through the revenue earned from the
performance obligations. Contract assets primarily relate to our related contracts. We therefore defer them as deferred commission
rights to consideration for the transfer of wireless devices. Our long- cost assets in other assets and amortize them to operating costs
term contract assets are grouped into “other long-term assets” on over the pattern of the transfer of goods and services to the
our Consolidated Statements of Financial Position. customer, which is typically evenly over 24 consecutive months.
Determining the transaction price the devices that passes to our customer, including whether the
The transaction price is the amount of consideration that is customer has a significant economic incentive at contract inception
enforceable and to which we expect to be entitled in exchange for to return the device at contract termination.
the goods and services we have promised to our customer. We
determine the transaction price by considering the terms of the CONTRACT ASSETS
contract and business practices that are customary within that Below is a summary of our contract assets from contracts with
particular line of business. Discounts, rebates, refunds, credits, price customers and the significant changes in those balances during the
concessions, incentives, penalties, and other similar items are years ended December 31, 2021 and 2020.
reflected in the transaction price at contract inception.
Years ended December 31
Determining the stand-alone selling price and the allocation of the
transaction price (In millions of dollars) 2021 2020
The transaction price is allocated to performance obligations based Balance, beginning of year 621 1,791
on the relative stand-alone selling prices of the distinct goods or Additions from new contracts with
services in the contract. The best evidence of a stand-alone selling customers, net of terminations and
price is the observable price of a good or service when the entity renewals 121 104
sells that good or service separately in similar circumstances and to Amortization of contract assets to
similar customers. If a stand-alone selling price is not directly accounts receivable (538) (1,274)
observable, we estimate the stand-alone selling price taking into
account reasonably available information relating to the market Balance, end of year 204 621
conditions, entity-specific factors, and the class of customer. Current 115 533
Long-term 89 88
In determining the stand-alone selling price, we allocate revenue
between performance obligations based on expected minimum Balance, end of year 204 621
enforceable amounts to which Rogers is entitled. Any amounts
above the minimum enforceable amounts are recognized as
revenue as they are earned. CONTRACT LIABILITIES
Below is a summary of our contract liabilities from contracts with
customers and the significant changes in those balances during the
JUDGMENTS
years ended December 31, 2021 and 2020.
We make significant judgments in determining whether a promise
to deliver goods or services is considered distinct, in determining
the costs that are incremental to obtaining or fulfilling a contract Years ended December 31
with a customer, and in determining whether our residual value (In millions of dollars) 2021 2020
arrangements constitute revenue-generating arrangements or
Balance, beginning of year 405 224
leases.
Revenue deferred in previous year
and recognized as revenue in
Distinct goods and services
current year (393) (184)
We make judgments in determining whether a promise to deliver
Net additions from contracts with
goods or services is considered distinct. We account for individual
customers 434 365
products and services separately if they are distinct (i.e. if a product
or service is separately identifiable from other items in the bundled Balance, end of year 446 405
package and if the customer can benefit from it). The consideration
Current 394 336
is allocated between separate products and services in a bundle
Long-term 52 69
based on their stand-alone selling prices. For items we do not sell
separately, we estimate stand-alone selling prices using the Balance, end of year 446 405
adjusted market assessment approach.
Balance, beginning of year 262 305 (In millions of dollars) 2021 2020
Additions to deferred commission Wireless
cost assets 315 248 Service revenue 6,666 6,579
Amortization recognized on Equipment revenue 2,102 1,951
deferred commission cost assets (265) (291)
Total Wireless 8,768 8,530
Balance, end of year 312 262
Cable
Current 219 194 Service revenue 4,052 3,936
Long-term 93 68 Equipment revenue 20 10
Balance, end of year 312 262 Total Cable 4,072 3,946
Total Media 1,975 1,606
UNSATISFIED PORTIONS OF PERFORMANCE OBLIGATIONS Corporate items and intercompany
The table below shows the revenue we expect to recognize in the eliminations (160) (166)
future related to unsatisfied or partially satisfied performance
obligations as at December 31, 2021. The unsatisfied portion of the Total revenue 14,655 13,916
transaction price of the performance obligations relates to monthly Total service revenue 12,533 11,955
services; we expect to recognize it over the next three to five years. Total equipment revenue 2,122 1,961
(In millions of dollars) 2022 2023 2024 Thereafter Total Total revenue 14,655 13,916
Telecommunications
service 2,045 795 218 181 3,239
JUDGMENTS
We calculate gains and losses on the disposal of property, plant
We make significant judgments in choosing methods for
and equipment by comparing the proceeds from the disposal with
depreciating our property, plant and equipment that we believe
the item’s carrying amount and recognize the gain or loss in net
most accurately represent the consumption of benefits derived
income.
from those assets and are most representative of the economic
substance of the intended use of the underlying assets.
Total
Cable and Computer Customer Total Right-of- property,
Land and wireless equipment premise Leasehold Equipment Construction owned use assets plant and
(In millions of dollars) buildings networks and software equipment improvements and vehicles in process assets (note 8) equipment
Cost
As at January 1, 2021 1,210 21,913 6,078 1,954 618 1,230 848 33,851 2,248 36,099
Additions and transfers 29 1,167 849 142 62 57 482 2,788 380 3,168
Acquisitions from business
combinations 2 29 1 6 – 3 – 41 – 41
Disposals and other – (802) (321) (147) – (37) – (1,307) (2) (1,309)
As at December 31, 2021 1,241 22,307 6,607 1,955 680 1,253 1,330 35,373 2,626 37,999
Accumulated depreciation
As at January 1, 2021 496 14,268 4,253 1,515 313 839 – 21,684 397 22,081
Depreciation 35 1,170 751 245 41 80 – 2,322 246 2,568
Disposals and other – (796) (322) (156) (1) (39) – (1,314) (2) (1,316)
As at December 31, 2021 531 14,642 4,682 1,604 353 880 – 22,692 641 23,333
Total
Cable and Computer Customer Total Right-of- property,
Land and wireless equipment premise Leasehold Equipment Construction owned use assets plant and
(In millions of dollars) buildings networks and software equipment improvements and vehicles in process assets (note 8) equipment
Cost
As at January 1, 2020 1,179 20,804 5,653 1,939 587 1,184 1,320 32,666 1,911 34,577
Additions and transfers 31 1,863 620 168 34 68 (472) 2,312 337 2,649
Acquisitions from business
combinations – 4 37 – 1 1 – 43 – 43
Disposals and other – (758) (232) (153) (4) (23) – (1,170) – (1,170)
As at December 31, 2020 1,210 21,913 6,078 1,954 618 1,230 848 33,851 2,248 36,099
Accumulated depreciation
As at January 1, 2020 461 13,814 3,749 1,387 281 776 – 20,468 175 20,643
Depreciation 37 1,196 747 288 36 86 – 2,390 217 2,607
Disposals and other (2) (742) (243) (160) (4) (23) – (1,174) 5 (1,169)
As at December 31, 2020 496 14,268 4,253 1,515 313 839 – 21,684 397 22,081
During 2021, we recognized capitalized interest on property, plant Annually, we perform an analysis to identify fully depreciated assets
and equipment at a weighted average rate of approximately 3.4% that have been disposed of. In 2021, this resulted in an adjustment
(2020 – 3.7%). to cost and accumulated depreciation of $1,157 million (2020 –
$978 million). The disposals had nil impact on the Consolidated
Statements of Income.
NOTE 8: LEASES
ACCOUNTING POLICY The lease liability is remeasured when there is a change in future
At inception of a contract, we assess whether that contract is, or lease payments arising from a change in an index or rate, if there is
contains, a lease. A contract is, or contains, a lease if the contract a change in our estimate of the amount expected to be payable
conveys the right to control the use of an identified asset for a under a residual value guarantee, or if we change our assessment
period of time in exchange for consideration. To assess whether a of whether or not we will exercise a purchase, extension, or
contract conveys the right to control the use of an identified asset, termination option. When the lease liability is remeasured in this
we assess whether: way, a corresponding adjustment is made to the carrying amount
• the contract involves the use of an identified asset; of the right-of-use asset. The lease liability is also remeasured when
• we have the right to obtain substantially all of the economic the underlying lease contract is amended.
benefits from use of the identified asset throughout the period We have elected not to separate fixed non-lease components and
of use; and account for the lease and any fixed non-lease components as a
• we have the right to direct the use of the asset. single lease component.
Lease payments included in the measurement of the lease liability We recognize lease payments received under operating leases into
include: income on a straight-line basis. All of the leases for which we act as
• fixed payments, including in-substance fixed payments; lessor are classified as operating leases.
• variable lease payments that depend on an index or rate;
• amounts expected to be payable under a residual value ESTIMATES
guarantee; and We estimate the lease term by considering the facts and
• the exercise price under a purchase option that we are circumstances that can create an economic incentive to exercise an
reasonably certain to exercise, lease payments in an optional extension option, or not exercise a termination option. We make
renewal period if we are reasonably certain to exercise an certain qualitative and quantitative assumptions when deriving the
extension option, and penalties for early termination of a lease value of the economic incentive.
unless we are reasonably certain not to terminate early.
Acquired program rights If our estimate of the asset’s or CGU’s recoverable amount is less
Program rights are contractual rights we acquire from third parties than its carrying amount, we reduce its carrying amount to the
to broadcast programs, including rights to broadcast live sporting recoverable amount and recognize the loss in net income
events. We recognize them at cost less accumulated amortization immediately.
and accumulated impairment losses. We capitalize program rights
We reverse a previously recognized impairment loss, except in
on the Consolidated Statements of Financial Position when the
respect of goodwill, if our estimate of the recoverable amount of a
licence period begins and the program is available for use and
previously impaired asset or CGU has increased such that the
amortize them to other external purchases in operating costs on
impairment recognized in a previous year has reversed. The
the Consolidated Statements of Income over the expected
reversal is recognized by increasing the asset’s or CGU’s carrying
exhibition period. If we have no intention to air programs, we
amount to our new estimate of its recoverable amount. The
consider the related program rights impaired and write them off.
carrying amount of the asset or CGU subsequent to the reversal
Otherwise, we test them for impairment as intangible assets with
cannot be greater than its carrying amount had we not recognized
finite useful lives.
an impairment loss in previous years.
The costs for multi-year sports and television broadcast rights
agreements are recognized in operating expenses during the ESTIMATES
applicable seasons based on the pattern in which the We use estimates in determining the recoverable amount of long-
programming is aired or rights are expected to be consumed. To lived assets. The determination of the recoverable amount for the
the extent that prepayments are made at the commencement of a purpose of impairment testing requires the use of significant
multi-year contract towards future years’ rights fees, these estimates, such as:
prepayments are recognized as intangible assets and amortized to • future cash flows;
operating expenses over the contract term. To the extent that • terminal growth rates; and
prepayments are made for annual contractual fees within a season, • discount rates.
they are included in other current assets on our Consolidated
Statements of Financial Position, as the rights will be consumed We estimate value in use for impairment tests by discounting
within the next twelve months. estimated future cash flows to their present value. We estimate the
discounted future cash flows for periods of up to five years,
Goodwill depending on the CGU, and a terminal value. The future cash flows
We recognize goodwill arising from business combinations when are based on our estimates and expected future operating results
the fair value of the separately identifiable assets we acquired and of the CGU after considering economic conditions and a general
liabilities we assumed is lower than the consideration we paid outlook for the CGU’s industry. Our discount rates consider market
(including the recognized amount of the non-controlling interest, if rates of return, debt to equity ratios, and certain risk premiums,
any). If the fair value of the consideration transferred is lower than among other things. The terminal value is the value attributed to
that of the separately identified assets and liabilities, we the CGU’s operations beyond the projected time period of the
immediately recognize the difference as a gain in net income. cash flows using a perpetuity rate based on expected economic
conditions and a general outlook for the industry.
IMPAIRMENT TESTING We determine fair value less costs to sell in one of the following two
We test intangible assets with finite useful lives for impairment ways:
whenever an event or change in circumstances indicates that their • analyzing discounted cash flows – we estimate the discounted
carrying amounts may not be recoverable. We test indefinite-life future cash flows for five-year periods and a terminal value,
intangible assets and goodwill for impairment annually as at similar to the value in use methodology described above, while
October 1, or more frequently if we identify indicators of applying assumptions consistent with those a market participant
impairment. would make. Future cash flows are based on our estimates of
expected future operating results of the CGU. Our estimates of
If we cannot estimate the recoverable amount of an individual future cash flows, terminal values, and discount rates consider
intangible asset because it does not generate independent cash similar factors to those described above for value in use
inflows, we test the entire cash-generating unit (CGU) to which it estimates; or
belongs for impairment.
• using a market approach – we estimate the recoverable amount
Goodwill is allocated to CGUs (or groups of CGUs) based on the of the CGU using multiples of operating performance of
level at which management monitors goodwill, which cannot be comparable entities and precedent transactions in that industry.
higher than an operating segment. The allocation of goodwill is
We make certain assumptions when deriving expected future cash
made to CGUs (or groups of CGUs) that are expected to benefit
flows, which may include assumptions pertaining to discount and
from the synergies and future growth of the business combination
terminal growth rates. These assumptions may differ or change
from which the goodwill arose.
quickly depending on economic conditions or other events. It is
therefore possible that future changes in assumptions may
Recognition and measurement of an impairment charge negatively affect future valuations of CGUs and goodwill, which
An intangible asset or goodwill is impaired if the recoverable could result in impairment losses.
amount is less than the carrying amount. The recoverable amount
of a CGU or asset is the higher of its:
• fair value less costs to sell; and
• value in use.
Judgment is applied when deciding to designate our spectrum Judgment is also applied in choosing methods of amortizing our
and broadcast licences as assets with indefinite useful lives since we intangible assets and program rights that we believe most
believe the licences are likely to be renewed for the foreseeable accurately represent the consumption of those assets and are most
future such that there is no limit to the period over which these representative of the economic substance of the intended use of
assets are expected to generate net cash inflows. We make the underlying assets.
judgments to determine that these assets have indefinite lives,
Finally, we make judgments in determining CGUs and the
analyzing all relevant factors, including the expected usage of the
allocation of goodwill to CGUs or groups of CGUs for the purpose
asset, the typical life cycle of the asset, and anticipated changes in
of impairment testing.
the market demand for the products and services the asset helps
In July 2021, Innovation, Science and Economic Development licences covering the vast majority of the Canadian population at a
Canada announced the results of the 3500 MHz spectrum licence total cost of $3.3 billion. In December 2021, we made the final
auction that began in June 2021. We were awarded 325 spectrum payment and obtained these licences.
Our fair value measurement for Media is classified as Level 3 in the We did not recognize an impairment charge related to our
fair value hierarchy. goodwill or intangible assets in 2021 or 2020 because the
recoverable amounts of the CGUs, or groups of CGUs, exceeded
their carrying values.
Deferred tax assets and liabilities are offset if there is a legally Years ended December 31
enforceable right to offset current tax assets and liabilities and they (In millions of dollars, except tax rates) 2021 2020
relate to income taxes levied by the same authority on:
• the same taxable entity; or Statutory income tax rate 26.5% 26.6%
• different taxable entities where these entities intend to settle Income before income tax expense 2,127 2,172
current tax assets and liabilities on a net basis or the tax assets Computed income tax expense 564 578
and liabilities will be realized and settled simultaneously. Increase (decrease) in income tax expense
resulting from:
We recognize a deferred tax asset for unused losses, tax credits, Non-deductible stock-based
and deductible temporary differences to the extent it is probable compensation 1 –
that future taxable income will be available to use the asset. Non-deductible portion of equity
losses 12 10
JUDGMENTS Income tax adjustment, legislative tax
We make significant judgments in interpreting tax rules and change – (3)
regulations when we calculate income tax expense. We make Non-taxable income from security
judgments to evaluate whether we can recover a deferred tax asset investments (11) (10)
based on our assessment of existing tax laws, estimates of future Other 3 5
profitability, and tax planning strategies. Total income tax expense 569 580
Effective income tax rate 26.8% 26.7%
We have not recognized deferred tax assets for the following items: There are taxable temporary differences associated with our
investments in Canadian domestic subsidiaries. We do not
As at December 31 recognize deferred tax liabilities for these temporary differences
(In millions of dollars) 2021 2020 because we are able to control the timing of the reversal and the
reversal is not probable in the foreseeable future. Reversing these
Realized and accrued capital losses in taxable temporary differences is not expected to result in any
Canada that can be applied against future significant tax implications.
capital gains 75 82
Tax losses in foreign jurisdictions that expire
between 2023 and 2040 68 67
Deductible temporary differences in foreign
jurisdictions 40 43
Total unrecognized temporary differences 183 192
We calculate diluted earnings per share by adjusting the net income Denominator – Number of shares (in
millions):
or loss attributable to Class A and Class B Non-Voting shareholders
Weighted average number of
and the weighted average number of Class A Shares and Class B shares outstanding – basic 505 505
Non-Voting Shares outstanding for the effect of all dilutive potential Effect of dilutive securities (in millions):
common shares. We use the treasury stock method for calculating Employee stock options and
diluted earnings per share, which considers the impact of employee restricted share units 1 1
stock options and other potentially dilutive instruments.
Weighted average number of shares
Options with tandem stock appreciation rights or cash payment outstanding – diluted 506 506
alternatives are accounted for as cash-settled awards. As these Earnings per share:
awards can be exchanged for common shares of RCI, they are Basic $ 3.09 $ 3.15
considered potentially dilutive and are included in the calculation Diluted $ 3.07 $ 3.13
of our diluted net earnings per share if they have a dilutive impact
in the period.
ACCOUNTING POLICY
Recognition
We initially recognize cash and cash equivalents, bank advances, accounts receivable, financing receivables, debt securities, and accounts
payable and accrued liabilities on the date they originate. All other financial assets and financial liabilities are initially recognized on the
trade date when we become a party to the contractual provisions of the instrument.
The classifications and methods of measurement subsequent to initial recognition of our financial assets and financial liabilities are as
follows:
Derivatives 2
Debt derivatives 3 FVTOCI and FVTPL
Interest rate derivatives FVTOCI
Expenditure derivatives FVTOCI
Equity derivatives FVTPL 4
1 Subsequently measured at fair value with changes recognized in the FVTOCI investment reserve.
2 Derivatives can be in an asset or liability position at a point in time historically or in the future.
3 Debt derivatives related to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes and are measured at FVTPL. Debt
derivatives related to our senior notes and debentures are designated as hedges for accounting purposes and are measured at FVTOCI.
4 Subsequent changes are offset against stock-based compensation expense or recovery in operating costs.
Derivative instruments
We use derivative instruments to manage risks related to certain activities in which we are involved. They include:
We use derivatives only to manage risk, and not for speculative instrument and hedged item, including the risk management
purposes. objectives and strategy and the methods we will use to assess the
ongoing effectiveness of the hedging relationship.
When we designate a derivative instrument as a hedging
instrument for accounting purposes, we first determine that the We assess, on a quarterly basis, whether each hedging instrument
hedging instrument will be highly effective in offsetting the continues to be highly effective in offsetting the changes in the fair
changes in fair value or cash flows of the item it is hedging. We value or cash flows of the item it is hedging.
then formally document the relationship between the hedging
Below is a summary of the undiscounted contractual maturities of our financial liabilities and the receivable components of our derivatives
as at December 31, 2021 and 2020.
Below is a summary of the net interest payments over the life of the hedges for accounting purposes. We use expenditure derivatives
long-term debt, including the impact of the associated debt to manage the foreign exchange risk in our operations,
derivatives, as at December 31, 2021 and 2020. designating them as hedges for certain of our forecast operational
and capital expenditures. As at December 31, 2021, all of our US
December 31, 2021 Less than 1 to 3 4 to 5 More than dollar-denominated long-term debt, short-term borrowings, and
(In millions of dollars) 1 year years years 5 years lease liabilities were hedged against fluctuations in foreign
Net interest payments 804 1,444 1,321 7,789 exchange rates using debt derivatives. With respect to our long-
term debt and US CP program, as a result of our debt derivatives, a
one-cent change in the Canadian dollar relative to the US dollar
December 31, 2020 Less than 1 to 3 4 to 5 More than would have no effect on net income.
(In millions of dollars) 1 year years years 5 years
A portion of our accounts receivable and accounts payable and
Net interest payments 747 1,322 1,167 8,331
accrued liabilities is denominated in US dollars. Due to the short-
term nature of these receivables and payables, they carry no
MARKET PRICE RISK significant risk from fluctuations in foreign exchange rates as at
Market price risk is the risk that changes in market prices, such as December 31, 2021.
fluctuations in the market prices of our investments measured at
FVTOCI or our share price will affect our income, cash flows, or the INTEREST RATE RISK
value of our financial instruments. The derivative instruments we use We are exposed to risk of changes in market interest rates due to
to manage this risk are described in this note. the impact this has on interest expense for our short-term
borrowings and bank credit facilities. As at December 31, 2021,
Market price risk – publicly traded investments 89.3% of our outstanding long-term debt and short-term
We manage risk related to fluctuations in the market prices of our borrowings was at fixed interest rates (2020 – 93.6%).
investments in publicly traded companies by regularly reviewing
publicly available information related to these investments to Sensitivity analysis
ensure that any risks are within our established levels of risk Below is a sensitivity analysis for significant exposures with respect
tolerance. We do not engage in risk management practices such as to our publicly traded investments, expenditure derivatives, debt
hedging, derivatives, or short selling with respect to our publicly derivatives, interest rate derivatives, short-term borrowings, senior
traded investments. notes, and bank credit facilities as at December 31, 2021 and 2020
with all other variables held constant. It shows how net income and
Market price risk – Class B Non-Voting Shares other comprehensive income would have been affected by
Our liability related to stock-based compensation is remeasured at changes in the relevant risk variables.
fair value each period. Stock-based compensation expense is
affected by changes in the price of our Class B Non-Voting Shares Other
during the life of an award, including stock options, restricted share comprehensive
units (RSUs), and deferred share units (DSUs). We use equity Net income income
derivatives from time to time to manage the exposure in our stock- (Change in millions of dollars) 2021 2020 2021 2020
based compensation liability. As a result of our equity derivatives, a Share price of publicly traded
one-dollar change in the price of a Class B Non-Voting Share investments
would not have a material effect on net income. $1 change – – 17 14
Debt derivatives
0.1% change in interest rates – – 46 –
FOREIGN EXCHANGE RISK Interest rate derivatives
We use debt derivatives to manage risks from fluctuations in 0.1% change in interest rates – – 76 –
foreign exchange rates associated with our US dollar-denominated Expenditure derivatives – change in
long-term debt, short-term borrowings, and lease liabilities. We foreign exchange rate
designate the debt derivatives related to our senior notes and $0.01 change in Cdn$ relative to US$ – – 8 12
debentures and lease liabilities as hedges for accounting purposes Floating interest rate senior notes
against the foreign exchange risk associated with specific debt 1% change in interest rates 7 7 – –
instruments and lease contracts, respectively. We have not Short-term borrowings
designated the debt derivatives related to our US CP program as 1% change in interest rates 16 9 – –
Below is a summary of the changes in fair value of our derivative instruments for 2021 and 2020.
Debt Debt
Year ended December 31, 2021 derivatives derivatives Interest rate Expenditure Equity Total
(In millions of dollars) (hedged) (unhedged) derivatives derivatives derivatives instruments
Derivative instruments, beginning of year 1,098 (12) – (109) 34 1,011
Proceeds received from settlement of derivatives – (3,914) (9) (1,201) (3) (5,127)
Payment on derivatives settled – 3,931 – 1,305 – 5,236
Increase (decrease) in fair value of derivatives 12 6 (234) (14) 5 (225)
Derivative instruments, end of year 1,110 11 (243) (19) 36 895
Debt Debt
Year ended December 31, 2020 derivatives derivatives Expenditure Equity Total
(In millions of dollars) (hedged) (unhedged) derivatives derivatives instruments
Derivative instruments, beginning of year 1,412 (29) 1 55 1,439
Proceeds received from settlement of derivatives – (6,906) (1,261) 1 (8,166)
Payment on derivatives settled – 6,826 1,221 – 8,047
(Decrease) increase in fair value of derivatives (314) 97 (70) (22) (309)
Derivative instruments, end of year 1,098 (12) (109) 34 1,011
Below is a summary of the derivative instruments assets and 2021, 100% of our outstanding expenditure derivatives and interest
derivative instruments liabilities reflected on our Consolidated rate derivatives have been designated as hedges for accounting
Statements of Financial Position. purposes (2020 – 100% of our outstanding expenditure
derivatives).
As at December 31
We did not enter into any debt derivatives in 2021 on issued senior notes. We entered into US$2 billion of forward starting cross-currency
swaps to hedge the foreign exchange and interest risk associated with debt instruments we expect to issue in the future related to the
Transaction.
In 2020, we entered into debt derivatives to hedge the foreign currency risk associated with the principal and interest components of the
US dollar-denominated senior notes issued (see note 21). Below is a summary of the debt derivatives we entered to hedge senior notes
issued during 2020.
During 2021 and 2020, we entered and settled debt derivatives related to our outstanding lease liabilities as follows:
As at December 31, 2021, we had US$193 million notional amount • interest rate swap derivatives to hedge the interest rate risk on an
of debt derivatives outstanding related to our outstanding lease additional $3.25 billion of debt instruments we expect to issue in
liabilities (2020 – US$142 million) with terms to maturity ranging the future; and
from January 2022 to December 2024 (2020 – January 2021 to • interest rate swap derivatives to hedge the interest rate risk on
December 2023), at an average rate of $1.301/US$ (2020 – US$2 billion of debt instruments we expect to issue in the future.
$1.352/US$).
Concurrent with our issuance of $2 billion subordinated notes in
December 2021 (see note 21), we terminated $750 million of
Interest rate derivatives
bond forwards and received $9 million upon settlement. As at
From time to time, we use bond forward derivatives or interest rate
December 31, 2021, we had $500 million of bond forwards
swap derivatives (collectively, interest rate derivatives) to hedge
outstanding.
interest rate risk on current and future debt instruments. Our
interest rate derivatives are designated as hedges for accounting Concurrent with our issuance of US$750 million subordinated
purposes. notes in February 2022 (see note 21), we terminated $950 million
of interest rate swap derivatives and received $33 million upon
We have entered into interest rate swap derivatives during the year
settlement.
ended December 31, 2021, including:
• $1,250 million bond forwards to hedge the underlying
Government of Canada (GoC) interest rate risk that will form a
portion of the interest rate risk associated with anticipated future
debt issuances;
Expenditure derivatives
Below is a summary of the expenditure derivatives we entered and settled during 2021 and 2020 to manage foreign exchange risk related
to certain forecast expenditures.
Year ended Year ended
December 31, 2021 December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
As at December 31, 2021, we had US$1,068 million of expenditure value of our private investments by using implied valuations from
derivatives outstanding (2020 – US$1,590 million), at an average follow-on financing rounds, third-party sale negotiations, or market-
rate of $1.287/US$ (2020 – $1.342/US$), with terms to maturity based approaches. These are applied appropriately to each
ranging from January 2022 to December 2023 (2020 – January investment depending on its future operating and profitability
2021 to December 2022). As at December 31, 2021, our prospects.
outstanding expenditure derivatives maturing in 2022 were
The fair values of each of our public debt instruments are based on
hedged at an average exchange rate of $1.292/US$.
the period-end estimated market yields, or period-end trading
values, where available. We determine the fair values of our debt
Equity derivatives
derivatives and expenditure derivatives using an estimated credit-
We have equity derivatives to hedge market price appreciation risk
adjusted mark-to-market valuation by discounting cash flows to the
associated with Class B Non-Voting Shares that have been granted
measurement date. In the case of debt derivatives and expenditure
under our stock-based compensation programs (see note 25). The
derivatives in an asset position, the credit spread for the financial
equity derivatives were originally entered into at a weighted
institution counterparty is added to the risk-free discount rate to
average price of $50.37 with terms to maturity of one year,
determine the estimated credit-adjusted value for each derivative.
extendible for further one-year periods with the consent of the
For these debt derivatives and expenditure derivatives in a liability
hedge counterparties. The equity derivatives have not been
position, our credit spread is added to the risk-free discount rate for
designated as hedges for accounting purposes.
each derivative.
As at December 31, 2021, we had equity derivatives outstanding
The fair values of our equity derivatives are based on the
for 5.0 million (2020 – 4.6 million) Class B Non-Voting Shares with a
period-end quoted market value of Class B Non-Voting Shares.
weighted average price of $53.10 (2020 – $51.82).
Our disclosure of the three-level fair value hierarchy reflects the
During the year ended December 31, 2021, we entered into
significance of the inputs used in measuring fair value:
0.4 million equity derivatives (2020 – 0.3 million) with a weighted
• financial assets and financial liabilities in Level 1 are valued by
average price of $60.98 (2020 – $56.08).
referring to quoted prices in active markets for identical assets
During the year ended December 31, 2021, we reset the weighted and liabilities;
average price to $59.64 and reset the expiry dates to April 2023 • financial assets and financial liabilities in Level 2 are valued using
(from April 2021) on 0.5 million equity derivatives and received net inputs based on observable market data, either directly or
proceeds of $3 million. indirectly, other than the quoted prices; and
• Level 3 valuations are based on inputs that are not based on
During the year ended December 31, 2020, we reset the weighted observable market data.
average price to $54.16 and reset the expiry dates to April 2021
(from April 2020) on 0.5 million equity derivatives and made net There were no material financial instruments categorized in Level 3
payments of $1 million. as at December 31, 2021 and 2020 and there were no transfers
between Level 1, Level 2, or Level 3 during the respective periods.
Additionally, 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 2022 (from April 2021).
As at December 31
Carrying value Fair value (Level 1) Fair value (Level 2)
(In millions of dollars) 2021 2020 2021 2020 2021 2020
Financial assets
Investments, measured at FVTOCI:
Investments in publicly traded companies 1,581 1,535 1,581 1,535 – –
Held-for-trading:
Debt derivatives accounted for as cash flow hedges 1,453 1,405 – – 1,453 1,405
Debt derivatives not accounted for as cash flow hedges 11 – – – 11 –
Interest rate derivatives accounted for as cash flow hedges 40 – – – 40 –
Expenditure derivatives accounted for as cash flow hedges 11 – – – 11 –
Equity derivatives not accounted for as cash flow hedges 36 34 – – 36 34
Total financial assets 3,132 2,974 1,581 1,535 1,551 1,439
Financial liabilities
Held-for-trading:
Debt derivatives accounted for as cash flow hedges 343 307 – – 343 307
Debt derivatives not accounted for as hedges – 12 – – – 12
Interest rate derivatives accounted for as cash flow hedges 283 – – – 283 –
Expenditure derivatives accounted for as cash flow hedges 30 109 – – 30 109
Total financial liabilities 656 428 – – 656 428
As at December 31
(In millions of dollars) 2021 2020
Carrying amount Fair value 1 Carrying amount Fair value 1
Long-term debt (including current portion) 18,688 20,790 18,201 22,006
1 Long-term debt (including current portion) is measured at Level 2 in the three-level fair value hierarchy, based on year-end trading values.
We did not have any non-derivative held-to-maturity financial assets during the years ended December 31, 2021 and 2020.
Impairment in associates and joint ventures Toronto Raptors, MLS’ Toronto FC, the CFL’s Toronto Argonauts,
At the end of each reporting period, we assess whether there is the AHL’s Toronto Marlies, and other assets. We, along with BCE
objective evidence that impairment exists in our investments in Inc. (BCE), jointly own an indirect net 75% equity interest in MLSE
associates and joint ventures. If objective evidence exists, we with our portion representing a 37.5% equity interest in MLSE. Our
compare the carrying amount of the investment to its recoverable investment in MLSE is accounted for as a joint venture using the
amount and recognize the excess over the recoverable amount, if equity method.
any, as a loss in net income.
Glentel
INVESTMENTS BY TYPE Glentel is a large, multicarrier mobile phone retailer with several
hundred Canadian wireless retail distribution outlets. We own a
As at December 31 50% equity interest in Glentel, with the remaining 50% interest
(In millions of dollars) 2021 2020 owned by BCE. Our investment in Glentel is accounted for as a joint
venture using the equity method.
Investments in:
Publicly traded companies 1,581 1,535 Below is a summary of financial information pertaining to our
Private companies 53 97 significant associates and joint ventures and our portions thereof.
Investments, measured at FVTOCI 1,634 1,632
Investments, associates and joint ventures 859 904 As at or years ended December 31
As at December 31
(In millions of dollars) 2021 2020
Receivables securitization program 800 650
US commercial paper program (net of the
discount on issuance) 893 571
Non-revolving credit facility borrowings 507 –
Total short-term borrowings 2,200 1,221
Year ended December 31, 2021 Year ended December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
Proceeds received from receivables securitization 150 –
Net proceeds received from receivables securitization 150 –
Proceeds received from US commercial paper 2,568 1.260 3,235 3,316 1.329 4,406
Repayment of US commercial paper (2,314) 1.259 (2,914) (4,098) 1.355 (5,552)
Net proceeds received from (repayment of) US commercial paper 321 (1,146)
Proceeds received from non-revolving credit facilities (US$) 1,200 1.253 1,503 – – –
Repayment of non-revolving credit facilities (US$) (800) 1.254 (1,003) – – –
Net proceeds received from non-revolving credit facilities 500 –
Net proceeds received from (repayment of) short-term borrowings 971 (1,146)
RECEIVABLES SECURITIZATION PROGRAM We continue to service and retain substantially all of the risks and
We participate in a receivables securitization program with a rewards relating to the receivables we sell, and therefore, the
Canadian financial institution that allows us to sell certain receivables remain recognized on our Consolidated Statements of
receivables into the program. Financial Position and the funding received is recognized as short-
term borrowings. The buyer’s interest in these trade receivables
As at December 31, 2021, the proceeds of the sales were ranks ahead of our interest. The program restricts us from using the
committed up to a maximum of $1,200 million (2020 – $1,200 receivables as collateral for any other purpose. The buyer of our
million) and the program has a term of three years, ending on trade receivables has no claim on any of our other assets.
December 22, 2023.
Below is a summary of the activity relating to our US CP program for the years ended December 31, 2021 and 2020.
Year ended December 31, 2021 Year ended December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
US commercial paper, beginning of year 449 1.272 571 1,223 1.298 1,588
Net proceeds received from (repayment of) US commercial
paper 254 1.264 321 (782) 1.465 (1,146)
Discounts on issuance 1 1 n/m 2 8 1.250 10
(Gain) loss on foreign exchange 1 (1) 119
US commercial paper, end of year 704 1.268 893 449 1.272 571
n/m – not meaningful
1 Included in finance costs.
Concurrent with the US CP borrowings, we entered into debt borrowings under these facilities will be recorded as short-term
derivatives to hedge the foreign currency risk associated with the borrowings as they will be due within 12 months. Borrowings under
principal and interest components of the borrowings under the US the facilities are unsecured, guaranteed by RCCI, and rank equally
CP program (see note 17). We have not designated these debt in right of payment with all of our senior notes and debentures. In
derivatives as hedges for accounting purposes. December 2021, we terminated the undrawn non-revolving credit
facilities with an aggregate limit of US$1.2 billion. In February 2022,
NON-REVOLVING CREDIT FACILITY we repaid the outstanding US$400 million and terminated the
In June 2021, we entered into non-revolving credit facilities with an facility.
aggregate limit of US$1.6 billion that mature in June 2022. Any
Below is a summary of the activity relating to our non-revolving credit facilities for the year ended December 31, 2021.
COMMITTED CREDIT FACILITY cannot be drawn upon until the closing date of the Transaction. It is
In March 2021, in connection with the Transaction (see note 30), we only available to be drawn to fund part of the acquisition cost of the
entered into a binding commitment letter for a committed credit Transaction and to pay fees and expenses related to the
facility with a syndicate of banks in an amount up to $19 billion. The Transaction. If drawn, any drawings must be repaid within 364 days.
commitment remains subject to the satisfaction of conditions to If undrawn, the facility terminates on the closing date of the
effectiveness and drawing, including, without limitation, the acquisition. As a result of entering into the Shaw term loan facility
completion of credit documentation in respect of such commitment (see note 21), the maximum amount we can draw on this
and the completion of the Transaction. The committed facility committed facility decreased to $13 billion.
PROVISIONS DETAILS
Decommissioning
(In millions of dollars) Liabilities Other Total
December 31, 2020 45 1 46
Additions 7 – 7
December 31, 2021 52 1 53
Current (recorded in “other
current liabilities”) 3 – 3
Long-term 49 1 50
As at December 31
Due Principal Interest
(In millions of dollars, except interest rates) date amount rate 2021 2020
Senior notes 2021 1,450 5.340% — 1,450
Senior notes 2022 600 4.000% 600 600
Senior notes 2022 US 750 Floating 951 955
Senior notes 2023 US 500 3.000% 634 637
Senior notes 2023 US 850 4.100% 1,078 1,082
Senior notes 2024 600 4.000% 600 600
Senior notes 2025 US 700 3.625% 886 890
Senior notes 2026 US 500 2.900% 634 637
Senior notes 2027 1,500 3.650% 1,500 1,500
Senior notes 2029 1,000 3.250% 1,000 1,000
Senior debentures 1 2032 US 200 8.750% 254 255
Senior notes 2038 US 350 7.500% 444 446
Senior notes 2039 500 6.680% 500 500
Senior notes 2040 800 6.110% 800 800
Senior notes 2041 400 6.560% 400 400
Senior notes 2043 US 500 4.500% 634 637
Senior notes 2043 US 650 5.450% 823 827
Senior notes 2044 US 1,050 5.000% 1,331 1,337
Senior notes 2048 US 750 4.300% 951 955
Senior notes 2049 US 1,250 4.350% 1,585 1,592
Senior notes 2049 US 1,000 3.700% 1,268 1,273
Subordinated notes 2 2081 2,000 5.000% 2,000 —
18,873 18,373
Deferred transaction costs and discounts (185) (172)
Less current portion (1,551) (1,450)
Each of the above senior notes and debentures are unsecured and, the foreign exchange risk associated with the principal and interest
as at December 31, 2021, were guaranteed by RCCI, ranking components of all of our US dollar-denominated senior notes and
equally with all of RCI’s other senior notes, debentures, bank credit debentures (see note 17).
facilities, and letter of credit facilities. We use derivatives to hedge
The tables below summarize the activity relating to our long-term debt for the years ended December 31, 2021 and 2020.
Year ended December 31, 2021 Year ended December 31, 2020
Notional Exchange Notional Notional Exchange Notional
(In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)
2021 issuance
December 17, 2021 (subordinated) 3 2,000 2081 5.000% At par 2,000 20
2020 issuances
March 31, 2020 (senior) 1,500 2027 3.650% 99.511% 1,500 16
June 22, 2020 (senior) US 750 2022 USD LIBOR + 0.60% At par 1,019 5
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 income
using the effective interest method.
3 Deferred transaction costs and discounts in the carrying value of the subordinated notes are recognized in net income using the effective interest method over a five-year period.
Concurrent with the 2020 US dollar-denominated issuances, we In connection with these issuances, the Board approved the creation
entered into debt derivatives to convert all interest and principal of new Series I and Series II preferred shares, respectively. Series I
payment obligations to Canadian dollars (see note 17). and Series II have been authorized for up to 3.3 million and
1.4 million preferred shares, respectively, have no voting rights, have
During the year ended December 31, 2021, we issued $2 billion
par values of $1,000 per share, and will be issued automatically upon
subordinated notes due 2081 with an initial coupon of 5% for the
the occurrence of certain events involving a bankruptcy or insolvency
first five years. Concurrently, we terminated the $750 million bond
of RCI to holders of the respective subordinated notes.
forwards entered into in July 2021 to hedge the interest rate risk
associated with future debt issuances. We used the proceeds to
Repayment of senior notes and related derivative settlements
partially fund the remaining payment required to obtain the 3500
During the year ended December 31, 2021, we repaid the entire
MHz spectrum licences.
outstanding principal amount of our $1.45 billion 5.34% senior
In February 2022, we issued US$750 million subordinated notes notes at maturity. There were no derivatives associated with these
due 2082 with an initial coupon of 5.25% for the first five years. senior notes. We did not repay any senior notes or settle any
Concurrently, we terminated $950 million of interest rate derivatives related debt derivatives during the year ended December 31,
entered into in 2021 to hedge the interest rate risk associated with 2020.
future debt issuances. We received net proceeds of US$740 million
($938 million) from the issuance. PRINCIPAL REPAYMENTS
Each of the subordinated notes can be redeemed at par on their Below is a summary of the principal repayments on our long-term
respective five-year anniversary or on any subsequent interest debt due in each of the next five years and thereafter as at
payment date. The subordinated notes are unsecured and December 31, 2021.
subordinated obligations of RCI. Payment on these notes will,
under certain circumstances, be subordinated to the prior payment (In millions of dollars)
in full of all of our senior indebtedness, including our senior notes, 2022 1,551
debentures, and bank credit facilities. In addition, upon the 2023 1,712
occurrence of certain events involving a bankruptcy or insolvency of 2024 600
RCI, the outstanding principal and interest of such subordinated 2025 886
notes would automatically convert into preferred shares. We 2026 1 2,634
understand that S&P Global Ratings Services (S&P), Moody’s Thereafter 11,490
Investors Service (Moody’s), and Fitch Ratings (Fitch) will only
include 50% of the outstanding principal amount of these Total long-term debt 18,873
subordinated notes in their leverage ratio calculation for at least the 1 Reflects repayment of the subordinated notes issued in December 2021 on the five-
first five years after their issuance. year anniversary.
TERMS AND CONDITIONS public debt securities are assigned investment-grade ratings by at
As at December 31, 2021 and 2020, we were in compliance with all least two of three specified credit rating agencies. As at
financial covenants, financial ratios, and all of the terms and December 31, 2021, these public debt securities were assigned an
conditions of our long-term debt agreements. There were no investment-grade rating by each of the three specified credit rating
financial leverage covenants in effect other than those under our agencies and, accordingly, these restrictions have been suspended
bank credit and letter of credit facilities. as long as the investment-grade ratings are maintained. Our other
senior notes do not have any of these restrictions, regardless of the
The 8.75% debentures due in 2032 contain debt incurrence tests related credit ratings. The repayment dates of certain debt
and restrictions on additional investments, sales of assets, and agreements can also be accelerated if there is a change in control
payment of dividends, all of which are suspended in the event the of RCI.
As at December 31
Sensitivity of key assumptions The Pension Committee of the Board oversees the administration
In the sensitivity analysis shown below, we determine the defined of our registered pension plans, which includes the following
benefit obligation for our funded plans using the same method principal areas:
used to calculate the defined benefit obligation we recognize on the • overseeing the funding, administration, communication, and
Consolidated Statements of Financial Position. We calculate investment management of the plans;
sensitivity by changing one assumption while holding the others • selecting and monitoring the performance of all third parties
constant. This leads to limitations in the analysis as the actual change performing duties in respect of the plans, including audit,
in defined benefit obligation will likely be different from that shown actuarial, and investment management services;
in the table, since it is likely that more than one assumption will • proposing, considering, and approving amendments to the
change at a time, and that some assumptions are correlated. plans;
• proposing, considering, and approving amendments to the
Increase (decrease) in Statement of Investment Policies and Procedures;
accrued benefit obligation • reviewing management and actuarial reports prepared in
respect of the administration of the pension plans; and
(In millions of dollars) 2021 2020
• reviewing and approving the audited financial statements of the
Discount rate pension plan funds.
Impact of 0.5% increase (251) (279)
Impact of 0.5% decrease 285 319 The assets of the defined benefit pension plans are held in
segregated accounts that are isolated from our assets. They are
Rate of future compensation increase
invested and managed following all applicable regulations and the
Impact of 0.25% increase 17 20
Statement of Investment Policies and Procedures with the objective
Impact of 0.25% decrease (17) (20)
of having adequate funds to pay the benefits promised by the
Mortality rate plans. Investment and market return risk is managed by:
Impact of 1 year increase 67 76 • contracting professional investment managers to execute the
Impact of 1 year decrease (72) (80)
investment strategy following the Statement of Investment
Policies and Procedures and regulatory requirements;
POST-EMPLOYMENT BENEFITS STRATEGY AND POLICY • specifying the kinds of investments that can be held in the plans
We sponsor a number of contributory and non-contributory and monitoring compliance;
pension arrangements for employees, including defined benefit • using asset allocation and diversification strategies; and
and defined contributions plans. We do not provide any • purchasing annuities from time to time.
non-pension post-retirement benefits. We also provide unfunded The defined benefit pension plans are registered with the Office of
supplemental pension benefits to certain executives. the Superintendent of Financial Institutions and are subject to the
The Rogers Defined Benefit Pension Plan provides a defined Federal Pension Benefits Standards Act. Two of the defined
pension based on years of service and earnings, with no increases contribution pension plans are registered with the Financial Services
in retirement for inflation. The plan was closed to new members in Regulatory Authority, subject to the Ontario Pension Benefits Act.
The plans are also registered with the Canada Revenue Agency and Below is a summary of the accrued benefit obligations arising from
are subject to the Income Tax Act (Canada). The benefits provided funded obligations.
under the plans and the contributions to the plans are funded and
administered in accordance with all applicable legislation and Years ended December 31
regulations.
(In millions of dollars) 2021 2020
The defined benefit pension plans are subject to certain risks
Accrued benefit obligations, beginning
related to contribution increases, inadequate plan surplus,
of year 3,365 2,900
unfunded obligations, and market rates of return, which we
Current service cost 156 146
mitigate through the governance described above. Any significant
Interest cost 89 91
changes to these items may affect our future cash flows.
Benefits paid (99) (82)
Contributions by employees 32 34
POST-EMPLOYMENT BENEFIT PLAN DETAILS Remeasurements, recognized in other
Below is a summary of the estimated present value of accrued plan comprehensive income and equity (372) 276
benefits and the estimated market value of the net assets available
Accrued benefit obligations, end of
to provide these benefits for our funded defined benefit pension
year 3,171 3,365
plans.
Plan assets comprise mainly pooled funds that invest in common
As at December 31
stocks and bonds that are traded in an active market. Below is a
(In millions of dollars) Note 2021 2020 summary of the fair value of the total pension plan assets by major
Plan assets, at fair value 3,198 2,791 category.
Accrued benefit obligations (3,171) (3,365)
As at December 31
Surplus (deficiency) of plan assets over
accrued benefit obligations 27 (574) (In millions of dollars) 2021 2020
Effect of asset ceiling limit (9) — Equity securities 1,879 1,689
Net deferred pension asset (liability) 18 (574) Debt securities 1,302 1,087
Other – cash 17 15
Consists of:
Deferred pension asset 21 16 Total fair value of plan assets 3,198 2,791
Deferred pension liability 22 (3) (590)
Below is a summary of our net pension expense. Net interest cost is
Net deferred pension asset (liability) 18 (574)
included in finance costs; other pension expenses are included in
salaries and benefits expense in operating costs on the
Below is a summary of our pension fund assets.
Consolidated Statements of Income.
We also provide supplemental unfunded defined benefit pensions Employer contribution 177 150
to certain executives. Below is a summary of our accrued benefit Employee contribution 32 34
obligations, pension expense included in employee salaries and Total contribution 209 184
benefits, net interest cost, remeasurements, and benefits paid.
We estimate our 2022 employer contributions to our funded plans
Years ended December 31 to be $134 million. The actual value will depend on the results of
the 2022 actuarial funding valuations. The average duration of the
(In millions of dollars) 2021 2020
defined benefit obligation as at December 31, 2021 is 17 years
Accrued benefit obligation, (2020 – 18 years).
beginning of year 92 73
Pension expense, recognized in Plan assets recognized an actual net gain of $297 million in 2021
employee salaries and benefits (2020 – $240 million net gain).
expense 12 13
We have recognized a cumulative loss in other comprehensive
Net interest cost, recognized in
income and retained earnings of $157 million as at December 31,
finance costs 3 3
2021 (2020 – $592 million) associated with post-retirement benefit
Remeasurements, recognized in
plans.
other comprehensive income (7) 8
Benefits paid (4) (5)
Accrued benefit obligation, end of
year 96 92
Target asset
Allocation of plan assets
allocation
2021 2020 percentage
Equity securities:
Domestic 11.8% 11.9% 8% to 18%
International 47.0% 48.6% 37% to 67%
Debt securities 40.7% 39.0% 25% to 45%
Other – cash 0.5% 0.5% 0% to 2%
Total 100.0% 100.0%
Number of shares
Share class authorized for issue Features Voting rights
Preferred shares 400,000,000 • Without par value • None
• Issuable in series, with rights
and terms of each series to
be fixed by the Board prior
to the issue of any series
RCI Class A Voting Shares 112,474,388 • Without par value • Each share entitled to 50
• Each share can be converted votes
into one Class B Non-Voting
share
RCI Class B Non-Voting Shares 1,400,000,000 • Without par value • None
RCI’s Articles of Continuance under the Business Corporations Act Class B Non-Voting Shares. Class A Shares and Class B Non-Voting
(British Columbia) impose restrictions on the transfer, voting, and Shares therefore participate equally in dividends above $0.05 per
issue of Class A Shares and Class B Non-Voting Shares to ensure share.
we remain qualified to hold or obtain licences required to carry on
On January 26, 2022, the Board declared a quarterly dividend of
certain of our business undertakings in Canada. We are authorized
$0.50 per Class A Voting Share and Class B Non-Voting Share, to
to refuse to register transfers of any of our shares to any person
be paid on April 1, 2022, to shareholders of record on March 10,
who is not a Canadian, as defined in RCI’s Articles of Continuance,
2022.
in order to ensure that Rogers remains qualified to hold the
licences referred to above.
NORMAL COURSE ISSUER BID
In relation to our issuances of subordinated notes in December In April 2020, the TSX accepted a notice of our intention to
2021 and February 2022 (see note 21), the Board approved the commence a normal course issuer bid (NCIB) program (2020
creation of new Series I and Series II preferred shares, respectively. NCIB) that allows us to purchase, between April 24, 2020 and
Series I has been authorized for up to 3.3 million preferred shares April 23, 2021, the lesser of 34.9 million Class B Non-Voting Shares
and Series II has been authorized for up to 1.4 million preferred and that number of Class B Non-Voting Shares that can be
shares. Both series have no voting rights, par values of $1,000 per purchased for an aggregate purchase price of $500 million. Rogers
share, and will be issued automatically upon the occurrence of security holders may obtain a copy of this notice, without charge,
certain events involving a bankruptcy or insolvency of RCI to holders by contacting us. We did not purchase any Class B Non-Voting
of the respective subordinated notes. Shares under the 2020 NCIB during the years ended
December 31, 2021 or 2020.
DIVIDENDS
We declared and paid the following dividends on our outstanding
Class A Shares and Class B Non-Voting Shares:
Year ended December 31, 2021 Year ended December 31, 2020
Weighted average Weighted average
(In number of units, except prices) Number of options exercise price Number of options exercise price
Outstanding, beginning of year 4,726,634 $62.10 3,154,795 $61.82
Granted 1,848,655 $60.61 1,598,590 $62.56
Exercised (10,988) $58.45 (17,230) $54.80
Forfeited (70,300) $67.58 (9,521) $58.45
Outstanding, end of year 6,494,001 $61.62 4,726,634 $62.10
Exercisable, end of year 2,373,717 $59.68 1,470,383 $56.75
Below is a summary of the range of exercise prices, the weighted average exercise price, and the weighted average remaining contractual
life as at December 31, 2021.
Options outstanding Options exercisable
Weighted average
Number remaining contractual Weighted average Number Weighted average
Range of exercise prices outstanding life (years) exercise price exercisable exercise price
$42.85 – $44.99 153,937 2.82 $44.24 153,937 $44.24
$45.00 – $49.99 499,844 2.00 $48.87 499,844 $48.87
$55.00 – $59.99 1,691,671 7.65 $58.35 597,601 $57.93
$60.00 – $64.99 3,014,614 7.98 $62.48 545,941 $62.66
$65.00 – $73.00 1,133,935 6.55 $72.22 576,394 $72.16
6,494,001 7.06 $61.62 2,373,717 $59.68
Performance DSUs
We granted 7,517 performance-based DSUs to certain key
executives in 2021 (2020 – 10,513). The number of units that vest
We recognize these transactions at the amount agreed to by the We have 100% ownership interest in these subsidiaries. They are
related parties, which are also reviewed by the Audit and Risk incorporated in Canada and have the same reporting period for
Committee. The amounts owing for these services were unsecured, annual financial statements reporting.
interest-free, and due for payment in cash within one month of the
When necessary, adjustments are made to conform the accounting
date of the transaction. Below is a summary of related party activity
policies of the subsidiaries to those of RCI. There are no significant
for the business transactions described above.
restrictions on the ability of subsidiaries, joint arrangements, and
associates to transfer funds to Rogers as cash dividends or to repay
Outstanding loans or advances, subject to the approval of other shareholders
Years ended balance as at where applicable.
(In millions of dollars) December 31 December 31
We carried out the following business transactions with our
2021 2020 2021 2020 associates and joint arrangements, being primarily MLSE
Printing and prepress services 3 4 n/a 1 (broadcasting rights) and Glentel (Wireless distribution support).
Transactions between us and our subsidiaries have been
eliminated on consolidation and are not disclosed in this note.
We have also entered into business transactions with companies
controlled by our Directors Michael J. Cooper and John C. Kerr,
Years ended December 31
which, as a result of the Board reconstitution in October 2021, are
now related parties. These companies include Dream Unlimited (In millions of dollars) 2021 2020
Corp. and Vancouver Professional Baseball LLP, respectively.
Revenue 31 26
Dream Unlimited Corp. is a real estate company that rents spaces
Purchases 180 121
in office and residential buildings. Vancouver Professional Baseball
LLP controls the Vancouver Canadians, the Toronto Blue Jays’ Outstanding balances at year-end are unsecured, interest-free, and
High-A affiliate minor league team. Total amounts paid to these settled in cash.
related parties during the period from October 2021 to December
2021 were nominal.
As at December 31
Less than
(In millions of dollars) 1 Year 1-3 Years 4-5 Years After 5 Years Total
Player contracts 1 129 204 222 – 555
Purchase obligations 2 327 192 85 19 623
Program rights 3 659 1,151 824 1 2,635
Total commitments 1,115 1,547 1,131 20 3,813
1 Toronto Blue Jays players’ salary contracts into which we have entered and are contractually obligated to pay.
2 Contractual obligations under service, product, and wireless device contracts to which we have committed.
3 Agreements into which we have entered to acquire broadcasting rights for sports broadcasting programs and films for periods in excess of one year at contract inception.
Below is a summary of our other contractual commitments that are the interim rates in effect prior to the Order as the final rates, with
not included in the table above. certain modifications, including the removal of the supplementary
markup of 10% for incumbent local exchange carriers.
As at December 31
The final rates are lower than the rates we previously billed to the
(In millions of dollars) 2021 resellers for the period of March 31, 2016 to October 6, 2016. We
have recognized a refund of amounts previously billed to the
Acquisition of property, plant and
resellers of approximately $25 million, representing the impact on
equipment 209
a retroactive basis for that period.
Acquisition of intangible assets 21
Our share of commitments related to On May 28, 2021 a wholesale Internet Service Provider (ISP)
associates and joint ventures 387 petitioned the Governor in Council to, among other things, restore
the 2019 Order and make the rates established in that order final. In
Total other commitments 617
addition, on June 28, 2021, the same wholesale ISP filed a motion
seeking leave to appeal the 2021 Decision to the Federal Court of
CONTINGENT LIABILITIES Appeal, which was granted on September 15, 2021. We, along with
We have the following contingent liabilities as at December 31, several other cable companies, have intervened in these matters.
2021:
Videotron Ltd.
Wholesale Internet costing and pricing On October 29, 2021, Videotron Ltd. launched a lawsuit against
On August 15, 2019, in Telecom Order CRTC 2019-288, Follow-up Rogers in the Quebec Superior Court, in connection with the
to Telecom Orders 2016-396 and 2016-448 – Final rates for agreement entered into by the parties in 2013 for the development
aggregated wholesale high-speed access services (Order), the and operation of a joint LTE network in the province of Quebec.
Canadian Radio-television and Telecommunications Commission The lawsuit involves allegations by Videotron Ltd. that Rogers has
(CRTC) set final rates for facilities-based carriers’ wholesale high- breached its contractual obligations by developing its own network
speed access services, including Rogers’ third-party Internet access in the territory. Videotron is seeking compensatory damages in the
service. The Order set final rates for Rogers that are significantly amount of $850 million. We intend to vigorously defend this
lower than the interim rates that were previously billed and it further lawsuit. We have not recognized a liability for this contingency.
determined that these final rates will apply retroactively to
March 31, 2016. System access fee – Saskatchewan
In 2004, a class action was commenced against providers of wireless
We did not believe the final rates set by the CRTC were just and communications in Canada under the Class Actions Act
reasonable as required by the Telecommunications Act as we (Saskatchewan). The class action relates to the system access fee
believed they were below cost. On May 27, 2021, the CRTC wireless carriers charge to some of their customers. The plaintiffs are
released Telecom Decision CRTC 2021-181 Requests to review and seeking unspecified damages and punitive damages, which would
vary Telecom Order 2019-288 regarding final rates for aggregated effectively be a reimbursement of all system access fees collected.
wholesale high-speed access services. The CRTC decided to adopt
In 2007, the Saskatchewan Court granted the plaintiffs’ application Income taxes
to have the proceeding certified as a national, “opt-in” class action We provide for income taxes based on all of the information that is
where affected customers outside Saskatchewan must take specific currently available and believe that we have adequately provided
steps to participate in the proceeding. In 2008, our motion to stay for these items. The calculation of applicable taxes in many cases,
the proceeding based on the arbitration clause in our wireless however, requires significant judgment (see note 13) in interpreting
service agreements was granted. The Saskatchewan Court directed tax rules and regulations. Our tax filings are subject to audits, which
that its order, in respect of the certification of the action, would could materially change the amount of current and deferred
exclude customers who are bound by an arbitration clause from income tax assets and liabilities and provisions, and could, in
the class of plaintiffs. certain circumstances, result in the assessment of interest and
penalties.
In 2009, counsel for the plaintiffs began a second proceeding
under the Class Actions Act (Saskatchewan) asserting the same
Other claims
claims as the original proceeding. If successful, this second class
There are certain other claims and potential claims against us. We
action would be an “opt-out” class proceeding. This second
do not expect any of these, individually or in the aggregate, to have
proceeding was ordered conditionally stayed on the basis that it
a material adverse effect on our financial results.
was an abuse of process.
At the time the Saskatchewan class action was commenced, Outcome of proceedings
corresponding claims were filed in multiple jurisdictions across The outcome of all the proceedings and claims against us,
Canada. The claims in all provinces other than Saskatchewan have including the matters described above, is subject to future
now been dismissed or discontinued. We have not recognized a resolution that includes the uncertainties of litigation. It is not
liability for this contingency. possible for us to predict the result or magnitude of the claims due
to the various factors and uncertainties involved in the legal
911 fee process. Based on information currently known to us, we believe it
In June 2008, a class action was launched in Saskatchewan against is not probable that the ultimate resolution of any of these
providers of wireless communications services in Canada. It involves proceedings and claims, individually or in total, will have a material
allegations of breach of contract, misrepresentation, and false adverse effect on our business, financial results, or financial
advertising, among other things, in relation to the 911 fee that had condition. If circumstances change and it becomes probable that
been charged by us and the other wireless telecommunication we will be held liable for claims against us and such claim is
providers in Canada. The plaintiffs are seeking unspecified estimable, we will recognize a provision during the period in which
damages and restitution. The plaintiffs intend to seek an order the change in probability occurs, which could be material to our
certifying the proceeding as a national class action in Consolidated Statements of Income or Consolidated Statements
Saskatchewan. We have not recognized a liability for this of Financial Position.
contingency.
The Transaction will be implemented through a court-approved Under certain circumstances, if the Key Regulatory Approvals are
plan of arrangement under the Business Corporations Act (Alberta). not obtained, or any law or order relating to the Key Regulatory
On May 20, 2021, Shaw shareholders voted to approve the Approvals or the Competition Act is in effect that would make the
Transaction at a special shareholders meeting. The Court of consummation of the Transaction illegal, and the failure to obtain
Queen’s Bench of Alberta issued a final order approving the the Key Regulatory Approvals is not caused by, and is not a result
Transaction on May 25, 2021. The Transaction is subject to other of, the failure by Shaw to perform in all material respects any of its
customary closing conditions, including receipt of applicable covenants or agreements under the arrangement agreement, we
approvals and expiry of certain waiting periods under the would be obligated to pay a $1.2 billion reverse termination fee to
Broadcasting Act (Canada), the Competition Act (Canada), and the Shaw. We would also be responsible to reimburse Shaw for certain
Radiocommunication Act (Canada) (collectively, Key Regulatory costs relating to the May 2021 exercise of our right to require Shaw
Approvals). Subject to receipt of all required approvals and to redeem its issued and outstanding preferred shares.
satisfaction of other conditions prior to closing, the Transaction is
expected to close in the first half of 2022. Rogers has extended the
outside date for closing the Transaction from March 15, 2022 to
June 13, 2022 in accordance with the terms of the arrangement
agreement.
Near-net: Customer location(s) adjacent to network Wi-Fi: The commercial name for a networking For a more comprehensive glossary
infrastructure allowing connectivity to the premises to technology standard for wireless LANs that essentially of industry and technology terms,
be extended with relative ease. provide the same connectivity as wired networks, but
go to rogers.com/glossary
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