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Rogers Communications Announces Doubling of Dividend, Preliminary Fourth Quarter 2007 Subscriber Statistics and 2008 Guidance
Jan 7, 2008
Annual Dividend Doubled from $0.50 to $1.00 per Share and Share
Repurchase Authorized in Form of Normal Course Issuer Bid;
Continued Solid Subscriber Growth in Both Wireless and Cable Businesses
Reported for Fourth Quarter 2007;
Guidance Established for Continued Double-Digit Revenue and Operating
Profit Growth in 2008
TORONTO, Jan. 7 /CNW/ - Rogers Communications Inc. ("Rogers" or "RCI")
today announced a significant increase to its annual dividend, the
authorization for a share repurchase program, preliminary fourth quarter 2007
subscriber results and full year 2008 guidance ranges for selected financial
and operating statistics.
Commenting on today's announcements, Ted Rogers, President and CEO of
Rogers said, "The actions taken today by our Board of Directors recognize the
solid financial performance and strategic positioning of Rogers combined with
our trajectory for continued double-digit revenue and operating profit growth
in 2008."
"We ended 2007 with good subscriber results reflective of healthy demand
in the markets we serve and the quality of our service offerings, but we also
have much work to do in continuing to develop and reinforce our platforms to
secure continued growth into the future," said Ted Rogers. "Our plan for 2008
strikes a healthy balance between the continued delivery of profitable growth,
the return of increasing amounts of our growing free cash flow to
shareholders, and the investments that will help assure such growth continues
well into the future."
Dividend Increase and Share Repurchase
The RCI Board of Directors has approved an increase in the annual
dividend from $0.50 to $1.00 per Class A Voting ("Class A") and Class B
Non-Voting ("Class B") share effective immediately. The new annual dividend of
$1.00 per share will be paid in quarterly amounts of $0.25 per each
outstanding Class A and Class B share. Such quarterly dividends are only
payable as and when declared by Rogers' Board of Directors and there is no
entitlement to any dividend prior thereto.
At the same time, Rogers also announced that an application for a
repurchase of its Class B shares in the form of a Normal Course Issuer Bid
("NCIB") is being filed with the Toronto Stock Exchange. The Rogers Board of
Directors has authorized the maximum number of Class B shares which may be
purchased pursuant to the NCIB to be the lesser of 15 million Class B shares,
and that number of Class B shares that can be purchased under the NCIB for an
aggregate purchase price of $300 million.Selected Preliminary Fourth Quarter 2007 Subscriber Statistics
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Three Months Twelve Months
Ended December 31 Ended December 31
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(Subscriber
statistics
in thousands,
except churn) 2007 2006 Change 2007 2006 Change
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Wireless Postpaid
Retail Subscri-
bers 5,914.3 5,398.3 516.0
Gross additions 361.5 384.5 (23.0) 1,352.0 1,375.2 (23.2)
Net additions 158.3 189.3 (31.0) 580.9 580.1 0.8
Adjustment to
postpaid
subscriber
base(1) (64.9) - (64.9)
Churn % 1.17% 1.24% -0.07% 1.15% 1.32% -0.17%
Wireless Prepaid
Retail
Subscribers 1,424.2 1,380.0 44.2
Gross additions 156.3 181.1 (24.8) 635.0 615.4 19.6
Net additions 25.0 55.2 (30.2) 69.7 30.2 39.5
Adjustment to
prepaid
subscriber
base(1) (25.5) - (25.5)
Churn % 3.12% 3.14% -0.02% 3.42% 3.70% -0.28%
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Total Wireless
Retail
Subscribers 7,338.5 6,778.3 560.2
Gross additions 517.8 565.6 (47.8) 1,987.0 1,990.6 (3.6)
Net additions 183.3 244.5 (61.2) 650.6 610.3 40.3
Adjustment to
subscriber
base(1) (90.4) - (90.4)
Basic Cable
Subscribers 2,295.4 2,277.1 18.3
Net additions 20.0 10.7 9.3 18.3 13.3 5.0
Digital Cable
Households 1,352.5 1,134.0 218.5
Net additions 60.7 69.6 (8.9) 218.5 220.7 (2.2)
Residential
High-speed
Internet
Subscribers(2)(5) 1,465.4 1,296.6 168.8
Net additions 46.3 47.4 (1.1) 164.5 160.4 4.1
Residential Cable
Telephony
Subscribers 655.8 365.9 289.9
Net additions(3) 65.3 95.1 (29.8) 289.9 318.0 (28.1)
Residential
Circuit-Switched
Telephony
Subscribers(2)(3) 334.2 349.6 (15.4)
Net additions
(losses) (3.4) (8.4) 5.0 (36.6) (41.2) 4.6
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Revenue Generating
Units (RGU's)(4)(5) 6,103.3 5,423.2 680.1
Net additions 188.9 214.4 (25.5) 654.6 671.2 (16.6)
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1. During the second quarter of 2007, Wireless decommissioned its
Time Division Multiple Access ("TDMA") and analog network and
simultaneously revised certain aspects of its subscriber reporting for
data-only subscribers. The deactivation of the remaining TDMA
subscribers and the change in subscriber reporting resulted in the
removal of approximately 64,900 subscribers from Wireless' postpaid
subscriber base and the removal of approximately 25,500 subscribers
from Wireless' prepaid subscriber base. These adjustments are not
included in the determination of postpaid or prepaid monthly churn or
net additions.
2. Included in total subscribers are approximately 4,300 residential
high-speed Internet and 21,200 residential circuit-switched telephony
subscriber lines acquired from Futureway in June 2007.
3. Includes approximately 2,100 and 41,800 migrations from residential
circuit-switched telephony to residential cable telephony for the
three and twelve months ended December 31, 2007, respectively
(2006 - 13,100 and 36,700 respectively).
4. Residential cable revenue generating units (RGUs) are comprised of
basic cable subscribers, digital cable households, residential
high-speed Internet subscribers and residential cable and
circuit-switched telephony subscribers.
5. Prior year high-speed Internet subscribers and RGUs have been
reclassified to conform to the current year presentation.
Full Year 2008 Financial and Operating Guidance
The following table outlines guidance ranges and assumptions for selected
financial and operating statistics for 2008. This information is
forward-looking and should be read in conjunction with the section below
entitled 'Caution Regarding Forward-Looking Statements' and in related
disclosures, for the various economic, competitive, and regulatory assumptions
and factors that could cause actual future financial and operating results to
differ from those currently expected.
Full Year 2008 Guidance
-------------------
--------------------------------------------------- 2008
(Millions of dollars, except subscribers) Guidance Range
--------------------------------------------------- -------------------
Consolidated
Revenue(1) $11,200 to $11,500
Operating profit (as adjusted)(2) 4,000 to 4,200
Additions to property, plant and equipment
("PP&E") 1,900 to 2,100
Free cash flow(3) 1,400 to 1,600
Supplementary Detail:
Revenue
Wireless (network revenue) $ 5,800 to $ 5,900
Cable Operations(4) 2,900 to 2,950
Media 1,525 to 1,575
Operating profit (as adjusted)(2)
Wireless(5) $ 2,875 to $ 2,975
Cable Operations(4) 1,130 to 1,190
Media(6) 165 to 180
Additions to PP&E(7)
Wireless $ 850 to $ 925
Cable Operations(4) 750 to 830
Media 80 to 95
Net subscriber additions (000's)
Retail wireless postpaid and prepaid 550 to 625
Residential cable revenue generating units
(RGUs)(8) 550 to 625
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1. In addition to Wireless Network, Cable Operations and Media revenue,
includes revenue from Wireless equipment, Rogers Business Solutions,
Rogers Retail and Corporate items and eliminations.
2. Excludes stock-based compensation expense and integration and
restructuring related expenditures.
3. Free cash flow is defined as operating profit (as adjusted) less
PP&E expenditures and interest expense and is not a term defined under
Canadian GAAP.
4. Includes cable television, residential high-speed Internet and
residential telephony activities; excludes Rogers Business Solutions
and Rogers Retail.
5. Excludes operating losses related to the Inukshuk fixed wireless
initiative estimated at $25-$30 million in 2008.
6. Includes losses from Sports Entertainment estimated at $20-$25 million
in 2008.
7. Excludes PP&E expenditures related to integration activities and the
Inukshuk fixed wireless initiative.
8. Residential cable revenue generating units (RGUs) are comprised of
basic cable subscribers, digital cable households, residential
high-speed Internet subscribers and residential cable and
circuit-switched telephony subscribers.The 2008 additions to PP&E and free cash flow guidance does not include
the potential acquisition of wireless spectrum from the Canadian Government
during an auction scheduled to begin in May 2008 in which Rogers currently
intends to participate. The guidance for 2008 PP&E expenditures includes the
following incremental investment initiatives currently contemplated in
addition to the recurring investments required to grow and maintain the
current operations of Rogers' businesses.
During 2008 Wireless intends to expand its High-Speed Packet Access
("HSPA") 3.5G network coverage beyond the current 58% of the population in its
coverage area, to continue to increase data throughput speeds across the HSPA
network and to also make significant investments in the capacity of its
backhaul facilities. Wireless will also continue to invest to maintain its
network quality leadership position, as well as in initiatives to improve the
reliability, redundancy and survivability of the wireless network.
During 2008 Cable intends to invest in the deployment of switched digital
video technology which will enable it to significantly expand capacity for new
digital and high-definition services. In addition, Cable will invest to expand
Internet capacity to meet increasing usage demands, to accommodate continued
expansion of its digital cable and telephony customer bases, to upgrade many
of the remaining rural systems to 860MHz bandwidth to enable the provision of
new services in those markets, and to improve the reliability, redundancy and
survivability of the cable network.
During 2008 Media intends to build out a new state-of-the-art production
facility to house its Citytv and OMNI television operations in Toronto, as
well as to complete the new national high-definition studio facility of
Sportsnet and to build and launch two new OMNI television stations in Edmonton
and Calgary.
During 2008, at the corporate level Rogers intends to invest in a
business transformation initiative to begin designing and developing new and
enhanced customer billing and operating support systems and related
infrastructure for the Wireless and Cable businesses. In addition, RCI intends
to invest in improvements to certain of its corporate owned real estate
facilities across the country.
Fourth Quarter 2007 Financial Results
Rogers currently expects to release its fourth quarter 2007 financial and
operating results on February 22, 2008 in the morning prior to the opening of
North American financial markets.
About the Company
Rogers Communications is a diversified Canadian communications and media
company. We are engaged in wireless voice and data communications services
through Wireless, Canada's largest wireless provider and the operator of the
country's only Global System for Mobile Communications ("GSM") based network.
Through Cable and Telecom we are one of Canada's largest providers of cable
television, cable telephony and high-speed Internet access, and are also a
full-service, facilities-based telecommunications alternative to the
traditional telephone companies. Through Media, we are engaged in radio and
television broadcasting, televised shopping, magazines and trade publications,
and sports entertainment. We are publicly traded on the Toronto Stock Exchange
(TSX: RCI.A and RCI.B), and on the New York Stock Exchange (NYSE: RCI). For
further information about the Rogers group of companies, please visit
www.rogers.com.
Caution Regarding Forward-Looking Statements
This release includes forward-looking statements and assumptions
concerning the future performance of the Company's business, its operations
and its financial performance and condition approved by management on the date
of this press release and is provided for the purpose of providing to
shareholders management's current views as to guidance ranges for 2008
selected financial and operating ranges. Such views may not be appropriate
for other purposes and, in any event, is only current as of the date hereof.
These forward-looking statements include, but are not limited to, statements
with respect to our objectives and strategies to achieve those objectives, as
well as statements with respect to our beliefs, plans, expectations,
anticipations, estimates or intentions. These forward-looking statments
include, but are not limited to, guidance relating to revenue, operating
profit and PP&E expenditures and free cash flow, expected growth in
subscribers, the deployment of new services and all other statements that are
not historical facts. Such forward-looking statements are based on current
expectations and various factors and assumptions applied which we believe to
be reasonable at the time, including but not limited to general economic and
industry growth rates, currency exchange rates, product pricing levels and
competitive intensity, subscriber growth and usage rates, changes in
government regulation, technology deployment, content and equipment costs, the
integration of acquisitions, and industry structure and stability.
We caution that all forward-looking information is inherently uncertain
and that actual results may differ materially from the assumptions, estimates
or expectations reflected in the forward-looking information. A number of
factors could cause actual results to differ materially from those in the
forward-looking statements, including but not limited to economic conditions,
technological change, the integration of acquisitions, unanticipated changes
in content or equipment costs, changing conditions in the entertainment,
information and communications industries, regulatory changes, litigation and
tax matters, and the level of competitive intensity, many of which are beyond
our control. Therefore, should one or more of these risks materialize, or
should assumptions underlying the forward-looking statements prove incorrect,
actual results may vary significantly from what we currently foresee.
Accordingly, we warn investors to exercise caution when considering any such
forward-looking information herein and to not place undue reliance on such
statements and assumptions. We are under no obligation (and we expressly
disclaim any such obligation) to update or alter any forward-looking
statements or assumptions whether as a result of new information, future
events or otherwise, except as required by law.
Before making any investment decisions and for a more detailed discussion
of the risks, uncertainties, material factors and assumptions associated with
our business that were applied in drawing conclusions or making a forecast set
out in such forward-looking information, see the MD&A sections of our 2006
Annual Report entitled "Risks and Uncertainties" (found on pages 53 to 59), as
well as the "Updates to Risks and Uncertainties" and "Government Regulation
and Regulatory Developments" sections of our third quarter 2007 quarterly
MD&A. Our annual and quarterly reports can be found at www.rogers.com,
www.sedar.com, and www.sec.gov.
%SEDAR: 00003765E %CIK: 0000733099