DAILY NEWS Feb 15, 2013 9:26 AM - 0 comments

Rogers Reports Q4 Financial Results

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2013-02-15

Rogers Communications Inc., announced its unaudited consolidated financial and operating results for the three months ended December 31, 2012, in accordance with International Financial Reporting Standards.

Financial highlights from continuing operations are as follows(1):

Three months ended December 31,

(In millions of dollars, except per share amounts) 2012 2011 % Chg

Operating revenue $ 3,261 $ 3,155 3

As adjusted:

Operating profit 1,176 1,101 7

Net income 455 350 30

Earnings per share 0.88 0.66 33

Diluted earnings per share 0.88 0.66 33

Pre-tax free cash flow 296 289 2

(1) This summary of our fourth quarter 2012 results should be read in conjunction with our fourth quarter 2012 earnings release, our 2011 Annual MD&A, our 2011 Annual Audited Consolidated Financial Statements and Notes thereto, and our 2012 quarterly interim financial statements, all of which are incorporated by reference in this news release. The financial information presented herein has been prepared on the basis of International Financial Reporting Standards ("IFRS") for interim financial statements and is expressed in Canadian dollars.

"We exited 2012 with accelerating growth across our asset mix and with continued improvements in the strength of our key metrics," said Nadir Mohamed, President and Chief Executive Officer of Rogers Communications Inc. "It was a record quarter for smartphone sales in our Wireless business where data revenue growth continues to accelerate. Our Cable division executed well with strong Internet growth and industry-leading margins, and our Media business continued to improve and grow. Importantly, we achieved or exceeded all of our full year financial guidance metrics and are well positioned for 2013."

Highlights of the fourth quarter of 2012 include the following:

Top Line Growth Accelerated

•Consolidated revenue growth of 3% was driven by Wireless network revenue growth of 4%, Wireless equipment revenue growth of 13%, Cable revenue growth of 2%, and Media revenue growth of 1%, partially offset by declines at Rogers Business Solutions compared to the same quarter last year.

•Wireless data revenue grew by 21% which, combined with a continued slowing in the rate of decline of voice ARPU, helped drive a 2.8% increase in blended ARPU. Wireless data revenue now comprises 42% of Wireless network revenue. Wireless activated and upgraded 940,000 smartphones, of which approximately 29% were for subscribers new to Wireless. This is the highest number of smartphone activations and upgrades in Rogers' history and resulted in subscribers with smartphones now representing 69% of the overall postpaid subscribers. Wireless also recorded a continued reduction in postpaid churn on a year-over-year basis.

Continued Cost Efficiency Gains Drive Profit Growth and Margin Expansion

•Consolidated adjusted operating profit increased by 7% with a 3% increase at Wireless, a 4% increase at Cable, a 35% increase at RBS, and a 70% increase at Media compared to the same quarter last year. The increase in Media adjusted operating profit was largely driven by lower programming costs associated with the recently concluded NHL player lockout in addition to cost efficiencies.

•Consolidated margins of 36.1% were up 117 basis points, driven by strong adjusted operating profit margins of 40.2% and 49.4% at Wireless and Cable, respectively, reflecting revenue growth combined with solid execution against cost reduction and simplification efforts. Adjusted net income improved 30% from the same quarter last year and adjusted diluted earnings per share of $0.88 was up 22 cents or 33% year-over-year.

Continued to Enhance our Leading Networks to Monetize Rapid Data Growth

•Expanded Canada's first wireless Long-Term Evolution ("LTE") 4G broadband network to now cover approximately 60% of the Canadian population, and Rogers currently offers the largest selection of LTE devices of any carrier in Canada. LTE is a next generation wireless technology that enables unparalleled connectivity, capable of speeds that are about four times faster than HSPA+ with peak potential download rates of up to 150 Megabits per second ("Mbps").

•Cable continued to increase the Internet speeds available to its customers, boosting the "Ultimate tier" download speed from 75 Mbps to 150 Mbps across approximately 90% of its footprint. Cable continues to make significant network investments to deliver the fastest Internet speeds available to the most homes.

•Subsequent to the end of the fourth quarter of 2012, on January 14, 2013, we announced a multipart strategic transaction with Shaw Communications ("Shaw") to acquire Shaw's cable system in Hamilton, Ontario and secure an option to purchase Shaw's Advanced Wireless Services ("AWS") spectrum holdings in 2014. We will also sell to Shaw our one-third interest in specialty channel TVtropolis and enter into negotiations with Shaw for the provision of certain services in Western Canada. Rogers' net cash investment is expected to total approximately $700 million if all aspects of the transaction are approved.

Customer Experience Further Enriched

•Wireless and Canadian Imperial Bank of Commerce announced the completion of the first point-of-sale mobile credit card transaction in Canada using the secure SIM card inside an NFC-enabled smartphone. This historic first mobile transaction - enabled by Rogers' innovative network platform -- has put Canada on the world stage as a global leader in mobile commerce. Rogers is the Canadian leader in driving the capabilities and adoption of mobile commerce.

•Cable further enhanced its NextBox 2.0 platform with the new Rogers Anyplace TV Home Edition application for tablets and smartphones. The new application makes it possible to use advanced search, a virtual remote control, live stream news, sports and entertainment, and remotely manage and set PVR content, all on a tablet from a single app. Rogers is the first Canadian telecommunications company to offer an integrated remote personal video recorder ("PVR") management and live TV streaming experience on tablets.

Media Boosts Growth Consistent with Sports and Local Content Focus

•Media closed the acquisition of theScore Television Network and related television assets into a trust pending final approval from the Canadian Radio-television Telecommunications Commission. theScore is a national specialty TV service providing sports news, information, highlights and live event programming, and is Canada's third largest specialty TV sports channel with 6.6 million subscribers. The acquisition builds on Rogers' rich history in sports broadcasting and reinforces its commitment to delivering premium sports content to its audiences on their platform of choice. Subject to final regulatory approval, anticipated in the first half of fiscal 2013, the network will be rebranded under the Sportsnet umbrella.

•In December 2012, Media received approval from the CRTC to acquire CJNT-TV Montreal ("Metro14 Montreal"). The transaction closed in early February 2013 and the station was re-launched as City Montreal in this key Quebec market. With the acquisitions and agreements put in place during 2012, City's reach has increased by more than 20% to over 80% of Canadian households.

•The Toronto Blue Jays made several off-season all-star calibre player acquisitions and a series of other moves which provide the team with significantly enhanced depth. The 2012 season demonstrated a renewed appetite for baseball in the City of Toronto, which was apparent in the growth of ticket and merchandise sales, as well as audience viewing. The growing revenue enabled these additional investments which are consistent with Rogers Media's sports-focused strategy to significantly improve game attendance, merchandising and Sportsnet ratings.

Balance Sheet Strength Further Reinforced with Continued Healthy Cash Flow Generation, Increased Liquidity and Lower Cost of Borrowing

•Generated $296 million of consolidated pre-tax free cash flow in the quarter, an increase of 2% compared to the fourth quarter of 2011, reflecting increased adjusted operating profit, which was partially offset by an increased level of PP&E expenditures. Pre-tax free cash flow per share increased by 6% over the same period last year.

•Entered into an accounts receivable securitization program, further supplementing our liquidity and sources of funding by up to $900 million. The program was established in December 2012 and the initial funding was received on January 14, 2013.

•The overall cost of debt has declined to 6.06% from 6.22% at December 31, 2011, and is expected to further decrease in 2013.

Cash Returned to Shareholders Set to Grow with Announcement of Further Dividend Increase

•In February 2013, the Board of Directors (the "Board") approved an increase of 10% in the annualized dividend rate from $1.58 to $1.74 per Class A Voting and Class B Non-Voting share, effective immediately, to be paid in quarterly amounts of $0.435. In addition, it has approved a renewed share buyback program for the repurchase of up to $500 million of RCI shares on the open market during the next twelve months.

This summary of our fourth quarter 2012 earnings release should be read in conjunction with our fourth quarter 2012 earnings release, our 2011 Annual MD&A and our 2011 Audited Annual Consolidated Financial Statements and Notes thereto, as well as our 2012 quarterly interim financial statements and our other recent filings with securities regulatory authorities which are available on SEDAR at sedar.com or EDGAR at sec.gov.

The financial information presented herein has been prepared on the basis of IFRS for interim financial statements and is expressed in Canadian dollars unless otherwise stated.

As this summary of our earnings release includes forward-looking statements and assumptions, readers should carefully review the section of this release entitled "Caution Regarding Forward-Looking Statements, Risks and Assumptions".

In this summary of our earnings release, the terms "we", "us", "our", "Rogers", "Rogers Communications" and "the Company" refer to Rogers Communications Inc. and our subsidiaries: Wireless, Cable, Business Solutions ("RBS") and Media.

SUMMARIZED CONSOLIDATED FINANCIAL RESULTS (Unaudited)

Three months ended December 31, Twelve months ended December 31,

(In millions of dollars, except per share amounts) 2012 2011 % Chg 2012 2011 % Chg

Operating revenue

Wireless $ 1,920 $ 1,826 5 $ 7,280 $ 7,138 2

Cable 852 838 2 3,358 3,309 1

RBS 88 93 (5) 351 405 (13)

Media 434 428 1 1,620 1,611 1

Corporate items and intercompany eliminations (33) (30) 10 (123) (117) 5

Total operating revenue 3,261 3,155 3 12,486 12,346 1

Adjusted operating profit

Wireless 687 670 3 3,063 3,036 1

Cable 421 403 4 1,605 1,549 4

RBS 27 20 35 89 86 3

Media 75 44 70 190 180 6

Corporate items and intercompany eliminations (34) (36) (6) (113) (112) 1

Adjusted operating profit 1,176 1,101 7 4,834 4,739 2

Depreciation and amortization (453) (454) - (1,819) (1,743) 4

Finance costs excluding loss on repayment of long-term debt (176) (158) 11 (664) (639) 4

Other income (expense), net 4 (6) n/m 15 1 n/m

Share of the income of associates and joint ventures

excluding gain on spectrum distribution 4 3 33 2 7 (71)

Adjusted net income before income taxes 555 486 14 2,368 2,365 -

Adjusted income tax expense (100) (136) (26) (580) (629) (8)

Adjusted net income $ 455 $ 350 30 $ 1,788 $ 1,736 3

Adjusted basic earnings per share $ 0.88 $ 0.66 33 $ 3.45 $ 3.20 8

Adjusted diluted earnings per share 0.88 0.66 33 3.43 3.17 8

Adjusted operating profit $ 1,176 $ 1,101 7 $ 4,834 $ 4,739 2

Stock-based compensation expense (57) (34) 68 (77) (64) 20

Integration, restructuring and acquisition expenses (10) (20) (50) (92) (56) 64

Operating profit 1,109 1,047 6 4,665 4,608 1

Depreciation and amortization (453) (454) - (1,819) (1,743) 4

Impairment of assets (80) - n/m (80) - n/m

Operating income 576 593 (3) 2,766 2,865 (3)

Finance costs (176) (158) 11 (664) (738) (10)

Share of the income of associates and joint ventures 237 3 n/m 235 7 n/m

Income before income taxes 641 432 48 2,352 2,135 10

Income tax expense (112) (97) 15 (620) (545) 14

Net income from continuing operations 529 335 58 1,732 1,590 9

Loss from discontinued operations - (8) n/m (32) (27) 19

Net income $ 529 $ 327 62 $ 1,700 $ 1,563 9

Basic earnings per share - continuing operations $ 1.03 $ 0.63 63 $ 3.34 $ 2.93 14

Diluted earnings per share - continuing operations 1.02 0.63 62 3.32 2.91 14

Basic earnings per share 1.03 0.61 69 3.28 2.88 14

Diluted earnings per share 1.02 0.61 67 3.26 2.86 14

Total additions to PP&E $ 707 $ 653 8 $ 2,142 $ 2,127 1

Pre-tax free cash flow 296 289 2 2,029 1,973 3

After-tax free cash flow 39 207 (81) 1,649 1,874 (12)

SEGMENT REVIEW

WIRELESS

Summarized Wireless Financial Results

Three months ended December 31, Twelve months ended December 31,

(In millions of dollars, except margin) 2012 2011 % Chg 2012 2011 % Chg

Operating revenue

Network revenue $ 1,711 $ 1,641 4 $ 6,719 $ 6,601 2

Equipment sales 209 185 13 561 537 4

Total operating revenue 1,920 1,826 5 7,280 7,138 2

Operating expenses

Cost of equipment (558) (465) 20 (1,585) (1,425) 11

Other operating expenses (675) (691) (2) (2,632) (2,677) (2)

(1,233) (1,156) 7 (4,217) (4,102) 3

Adjusted operating profit $ 687 $ 670 3 $ 3,063 $ 3,036 1

Adjusted operating profit margin as

% of network revenue 40.2% 40.8% 45.6% 46.0%

Additions to PP&E $ 386 $ 347 11 $ 1,123 $ 1,192 (6)

Data revenue included in network revenue $ 727 $ 600 21 $ 2,722 $ 2,325 17

Data revenue as a % of network revenue 42% 37% 41% 35%

Summarized Wireless Subscriber Results

(Subscriber statistics in thousands, Three months ended December 31, Twelve months ended December 31,

except ARPU and churn) 2012 2011 Chg 2012 2011 Chg

Postpaid

Gross additions 387 377 10 1,457 1,449 8

Net additions 58 42 16 268 269 (1)

Total postpaid subscribers 7,846 7,574 272 7,846 7,574 272

Monthly churn 1.40% 1.49% (0.09) pts 1.29% 1.32% (0.03) pts

Monthly average revenue per user ("ARPU") $ 69.75 $ 68.63 $ 1.12 $ 69.30 $ 70.26 $ (0.96)

Prepaid

Gross additions 131 191 (60) 627 845 (218)

Net additions (losses) (53) 5 (58) (170) 109 (279)

Total prepaid subscribers 1,591 1,761 (170) 1,591 1,761 (170)

Monthly churn 3.77% 3.51% 0.26 pts 3.98% 3.64% 0.34 pts

ARPU $ 15.83 $ 16.85 $ (1.02) $ 15.84 $ 16.02 $ (0.18)

Blended ARPU $ 60.48 $ 58.82 $ 1.66 $ 59.79 $ 60.20 $ (0.41)

Data ARPU 25.72 21.51 4.21 24.22 21.21 3.01

Voice ARPU 34.76 37.31 (2.55) 35.57 38.99 (3.42)

Wireless Subscribers and Network Revenue

For the three months ended December 31, 2012, Wireless activated and upgraded approximately 940,000 smartphones, compared to approximately 791,000 in the fourth quarter of 2011. This is the highest number of smartphone activations and upgrades in any quarter in Rogers' history. The smartphones activated and upgraded during the quarter were predominantly iPhone, Android, Windows Mobile and BlackBerry devices, of which approximately 29% were for subscribers new to Wireless. The overall addition of smartphones increased the percentage of subscribers with smartphones to 69% of Wireless' total postpaid subscriber base at December 31, 2012, compared to 56% as at December 31, 2011. These subscribers generally commit to multi-year term contracts and typically generate significantly higher ARPU.

The increase in wireless network revenue for the three months ended December 31, 2012, compared to the corresponding period of 2011, reflects the continued growth of Wireless' postpaid subscriber base and the increased adoption and usage of wireless data services. In keeping with our strategy, Wireless launched new simplified data-centric price plans this quarter, which will improve the customer experience and the efficiency of our sales and service functions. Wireless has driven year-over-year reductions in postpaid churn in each of the last three consecutive quarters through our continued focus on customer retention and our strategies to strengthen customer experience.

For the three months ended December 31, 2012, wireless data revenue increased to $727 million, a 21% increase from the corresponding period of 2011. This growth in wireless data revenue reflects the continued penetration and growing usage of smartphones, tablet devices and wireless laptops, which drive increased usage of e-mail, wireless Internet access, text messaging, data roaming, and other wireless data services. For the three months ended December 31, 2012, wireless data revenue represented approximately 42% of total network revenue, compared to approximately 37% in the corresponding period of 2011.

The 2.8% year-over-year increase in blended ARPU for the quarter ended December 31, 2012, compared to the corresponding period of 2011, primarily reflects the growth in wireless data revenue, partially offset by another quarter of sequentially moderating declines in wireless voice revenues. The wireless data component of blended ARPU increased by 19.6%, partially offset by a 6.8% decline in the wireless voice component as a result of the heightened level of competitive intensity in the wireless voice service market.

Wireless Equipment Sales

The increase in revenue from equipment sales for the three months ended December 31, 2012, compared to the corresponding period of 2011, primarily reflects the increase in hardware upgrades by existing subscribers, combined with an increase in the mix of smartphones activated towards higher value devices versus the prior year.

Wireless Operating Expenses

The increase in cost of equipment for the three months ended December 31, 2012, compared to the corresponding period of 2011, was primarily the result of the increased number of smartphone sales to new customers and upgrades for existing customers. During the three months ended December 31, 2012, we activated and upgraded 33% more iPhones and 19% more smartphones overall than in the same period last year.

Total retention spending, including subsidies on handset upgrades, was $320 million in the three months ended December 31, 2012, compared to $251 million in the corresponding period of 2011. The increase primarily reflects a higher number of hardware upgrades by existing subscribers than during the same period last year combined with a shift in the mix of smartphones activated towards higher value devices.

The year-over-year decrease in other operating expenses for the three months ended December 31, 2012, excluding retention spending discussed above, was driven by efficiency gains resulting from cost management and productivity initiatives across various functions. Rogers continues to focus on implementing a program of cost reduction and efficiency improvement initiatives to manage the overall level of operating expenses.

Wireless Adjusted Operating Profit

The 3% year-over-year increase in adjusted operating profit and the 40.2% adjusted operating profit margin on network revenue (which excludes equipment sales revenue) for the three months ended December 31, 2012 primarily reflects the growth of network revenue in the period, coupled with cost management and efficiency improvements as discussed above.

CABLE

Summarized Financial Results

Three months ended December 31, Twelve months ended December 31,

(In millions of dollars, except margin) 2012 2011 % Chg 2012 2011 % Chg

Operating revenue

Cable Television $ 462 $ 473 (2) $ 1,868 $ 1,878 (1)

Internet 263 238 11 998 926 8

Home Phone 122 118 3 477 478 -

Service revenue 847 829 2 3,343 3,282 2

Equipment sales 5 9 (44) 15 27 (44)

Total Cable operating revenue 852 838 2 3,358 3,309 1

Operating expenses

Cost of equipment (6) (10) (40) (20) (29) (31)

Other operating expenses (425) (425) - (1,733) (1,731) -

(431) (435) (1) (1,753) (1,760) -

Adjusted operating profit $ 421 $ 403 4 $ 1,605 $ 1,549 4

Adjusted operating profit margin 49.4% 48.1% 47.8% 46.8%

Additions to PP&E $ 259 $ 231 12 $ 832 $ 748 11

Summarized Subscriber Results

Three months ended December 31, Twelve months ended December 31,

(Subscriber statistics in thousands) 2012 2011 Chg 2012 2011 Chg

Cable homes passed 3,810 3,754 56 3,810 3,754 56

Television

Net losses (25) (6) (19) (83) (14) (69)

Total television subscribers 2,214 2,297 (83) 2,214 2,297 (83)

Digital cable

Households, net additions (losses) (6) 10 (16) (7) 39 (46)

Total digital cable households 1,768 1,777 (9) 1,768 1,777 (9)

Cable high-speed Internet

Net additions 22 25 (3) 73 83 (10)

Total cable high-speed Internet subscribers 1,864 1,793 71 1,864 1,793 71

Cable telephony lines

Net additions and migrations 10 8 2 23 45 (22)

Total cable telephony lines 1,074 1,052 22 1,074 1,052 22

Total cable service units

Net additions 7 27 (20) 13 114 (101)

Total cable service units 5,152 5,142 10 5,152 5,142 10

Cable Television Revenue

Cable Television revenue decreased for the three months ended December 31, 2012, compared to the corresponding period of 2011, mainly from the 4% year-over-year decline in basic television customers combined with the impact of promotional and retention pricing activity associated with heightened IPTV competitive activity, partially offset by pricing changes made in March 2012.

Our digital cable subscriber base represents 80% of our total television subscriber base as at December 31, 2012, compared to 77% as at December 31, 2011. A larger selection of digital content, video on-demand, HDTV and PVR equipment continues to contribute to the increasing penetration of the digital subscriber base as a percentage of our total television subscriber base.

In the first quarter of 2012, Cable began an initiative to convert many of the remaining analog cable customer outlets onto its digital cable platform. This migration, which will continue during 2013, will enable the reclamation of significant amounts of network capacity and reduce network operating and maintenance costs going forward. The migration entails incremental PP&E and operating costs as each of the remaining analog homes are fitted with digital converters and various analog filtering equipment is removed.

Internet Revenue

The year-over-year increase in Internet revenue for the three months ended December 31, 2012 reflects the increase in our Internet subscriber base, combined with a general movement to higher end speed and usage tiers combined with Internet service pricing changes made during the previous twelve months.

With our high-speed Internet customer base at 1.9 million subscribers, Internet penetration is approximately 49% of the homes passed by our cable network and 84% of our television subscriber base as at December 31, 2012, compared to Internet penetration of approximately 48% of the homes passed by our cable network and 78% of our television subscriber base as at December 31, 2011.

Cable Internet and Home Phone subscribers and revenue include an increasing number of small business customers, which generally have fewer than 24 phone lines, that Cable has attached to its network in addition to the residences traditionally passed by Cable's network.

Home Phone Revenue

The increase in Home Phone revenues for the three months ended December 31, 2012, compared to the corresponding period of 2011, reflects the increase in the customer base.

Home Phone lines in service grew 2% from December 31, 2011 to December 31, 2012 and now represent 28% of the homes passed by our cable network and 49% of television subscribers, compared to 28% of the homes passed by our cable network and 46% of television subscribers at December 31, 2011.

Cable Operating Expenses

Cable's operating expenses remained flat for the three months ended December 31, 2012, compared to the corresponding period of 2011, due to cost reductions and efficiency initiatives across various functions and lower new subscriber additions, partially offset by incremental retention costs and costs associated with the analog to digital conversion discussed above. Cable continues to focus on implementing a program of cost reduction and efficiency improvement initiatives to manage the overall level of operating expenses.

Cable Adjusted Operating Profit

The year-over-year increase in adjusted operating profit for the three months ended December 31, 2012, compared to the corresponding period of 2011, was driven by the revenue increases resulting in expanded adjusted operating profit margin of 49.4% for the three months ended December 31, 2012, compared to 48.1% in the corresponding period of 2011.

ROGERS BUSINESS SOLUTIONS

Summarized Financial Results

Three months ended December 31, Twelve months ended December 31,

(In millions of dollars, except margin) 2012 2011 % Chg 2012 2011 % Chg

Operating revenue

Next generation $ 43 $ 34 26 $ 162 $ 128 27

Legacy 43 57 (25) 183 271 (32)

Service revenue 86 91 (5) 345 399 (14)

Equipment sales 2 2 - 6 6 -

Total RBS operating revenue 88 93 (5) 351 405 (13)

Operating expenses (61) (73) (16) (262) (319) (18)

Adjusted operating profit $ 27 $ 20 35 $ 89 $ 86 3

Adjusted operating profit margin 30.7% 21.5% 25.4% 21.2%

Additions to PP&E $ 16 $ 13 23 $ 61 $ 55 11

RBS Revenue

The decrease in RBS revenue for the three months ended December 31, 2012, compared to the corresponding period of 2011, primarily reflects the planned decline in certain categories of our lower margin and primarily off-net legacy business, offset by the growth in our next generation IP and other on-net services business. RBS' focus is primarily on IP-based services and increasingly on leveraging higher margin on-net and near-net revenue opportunities, utilizing existing network facilities to expand offerings to the medium-sized enterprise, public sector and carrier markets. Revenue from the declining lower margin off-net legacy business generally includes long-distance, local and certain legacy data services. In contrast, revenue from the higher margin next generation business continues to grow, due to growth in customers and additional services sold to existing customers, and now represents 50% of total RBS service revenue.

RBS Operating Expenses

Operating expenses decreased for the three months ended December 31, 2012, compared to the corresponding period in 2011. This reflects a planned decrease in the legacy service-related costs due to lower volumes and customer levels, as well as ongoing initiatives to improve costs and productivity. RBS has continued to focus on implementing a program of permanent cost reduction and efficiency improvement initiatives to control the overall growth in operating expenses.

RBS Adjusted Operating Profit

The year-over-year increase in adjusted operating profit for the three months ended December 31, 2012, compared to the corresponding period in 2011, reflects cost efficiencies which more than offset the declines in revenue, and resulted in the increase of RBS' adjusted operating profit margin to 30.7% from 21.5%. Margin increases also reflect the increasing share of the RBS business derived from higher margin next generation services, which is consistent with RBS' strategy.

MEDIA

Summarized Media Financial Results

Three months ended December 31, Twelve months ended December 31,

(In millions of dollars, except margin) 2012 2011 % Chg 2012 2011 % Chg

Operating revenue $ 434 $ 428 1 $ 1,620 $ 1,611 1

Operating expenses (359) (384) (7) (1,430) (1,431) -

Adjusted operating profit $ 75 $ 44 70 $ 190 $ 180 6

Adjusted operating profit margin 17.3% 10.3% 11.7% 11.2%

Additions to PP&E $ 23 $ 31 (26) $ 55 $ 61 (10)

Media Revenue

Media revenue has increased 1% for the three months ended December 31, 2012 from the corresponding period of 2011, primarily driven by revenue growth on our Sports properties. Subscription revenue increased by 17%, due to the strength of the Sportsnet franchise and overall distribution growth on our other specialty channels. In addition, revenue in Sports Entertainment grew 44% as a result of increased revenue related to the baseball franchise and successful events at the Rogers Centre. These increases were partially offset by a continued soft advertising market across most industry sectors in the face of economic softness that created ongoing volatility in advertising revenue. The softness in the advertising market was intensified in this quarter by the advertising declines associated with the recently concluded NHL player lockout. Excluding the impact of the NHL player lockout, total Media revenues would have grown at a faster rate than 1% as reported.

Media Operating Expenses

The decrease in Media's operating expenses for the three months ended December 31, 2012, compared to the corresponding period of 2011, is primarily due to cost containment efforts and lower sports programming costs associated with the NHL player lockout as no NHL games were produced or aired in 2012 relating to the 2012-2013 season.

Media Adjusted Operating Profit

The increase in Media's adjusted operating profit for the three months ended December 31, 2012, compared to the corresponding period of 2011, primarily reflects the revenue and expense changes discussed above, including an estimated $30 million net positive impact from the NHL player lockout.

Other Media Developments

In October 2012, Media completed the purchase of 100% of the outstanding shares of Score Media Inc. for $167 million. The shares of Score Media were transferred to an interim CRTC-approved trust which is responsible for the independent management of the business in the normal course of operations until CRTC final approval is obtained, at which point control over the Score Media business will transfer to Rogers. Score Media owns theScore Television Network, a national specialty TV service providing sports news, information, highlights and live event programming across Canada. Upon final regulatory approval, which is anticipated in the first half of 2013, Rogers will wholly own and control theScore Television Network and its related television assets and expects to rebrand the service under the Sportsnet brand.

In December 2012, Media received approval from the CRTC to acquire Metro14 Montreal. The transaction closed in early February 2013 and the station was re-launched as City Montreal in this key Quebec market. With the acquisitions and agreements put in place during 2012, City's reach has increased by more than 20% to over 80% of Canadian households.

The Toronto Blue Jays made several off-season all-star calibre player acquisitions and a series of other moves which provide the team with significantly enhanced depth. The 2012 season demonstrated a renewed appetite for baseball in the City of Toronto, which was apparent in the growth of ticket and merchandise sales, as well as audience viewing. The growing revenue enables these additional investments which are consistent with Rogers Media's sports-focused strategy to significantly improve game attendance, merchandising and Sportsnet ratings.

ADDITIONS TO PP&E

The additions to PP&E for the three and twelve months ended December 31, 2012 are described below:

Three months ended December 31, Twelve months ended December 31,

(In millions of dollars) 2012 2011 % Chg 2012 2011 % Chg

Additions to PP&E

Wireless $ 386 $ 347 11 $ 1,123 $ 1,192 (6)

Cable 259 231 12 832 748 11

RBS 16 13 23 61 55 11

Media 23 31 (26) 55 61 (10)

Corporate 23 31 (26) 71 71 -

Total additions to PP&E $ 707 $ 653 8 $ 2,142 $ 2,127 1

Wireless Additions to PP&E

Wireless additions to PP&E increased by $39 million for the three months ended Decmeber 31, 2012 compared to the corresponding period in 2011. This was attributable to the continued deployment of our LTE network, upgrades to the network to improve the LTE and HSPA+ user experience and initiatives to improve network reliability and service platforms.

Cable Additions to PP&E

Cable additions to PP&E increased by $28 million for the three months ended December 31, 2012 compared to the corresponding period in 2011. This was driven by continued investments in the cable network to enhance the customer experience through increased speed and performance of our Internet service and capacity enhancements to our digital network to allow for incremental HD and on-demand services to be added. Higher analog to digital subscriber migration activity and investments in customer premise equipment due to the continued roll out of Next Box 2.0 set-top boxes also contributed to the increase in additions to PP&E.

RBS Additions to PP&E

The increase in RBS PP&E additions for the three months ended December 31, 2012, compared to the corresponding period of 2011, resulted from the timing of expenditures on customer specific network expansions and support capital.

Media Additions to PP&E

Media's PP&E additions during the three months ended December 31, 2012 reflect expenditures on digital and broadcast systems, as well as planned upgrades for Sports Entertainment facilities.

2013 FINANCIAL TARGETS

The following table outlines guidance ranges and assumptions for selected full year 2013 financial metrics. This information is forward-looking and should be read in conjunction with the section "Caution Regarding Forward-Looking Statements, Risks and Assumptions" and the 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 2013 Guidance 2012 2013

(In millions of dollars) Actual Guidance

Consolidated Guidance

Adjusted operating profit(1)(6) $ 4,834 $4,865 to $5,050

Additions to PP&E(2) 2,142 2,150 to 2,250

Pre-tax free cash flow(3)(6) 2,029 2,030 to 2,090

Cash income taxes 380 650 to 700

Supplemental Details(4) 2012 2013

(In millions of dollars) Actual Range

Wireless

Network revenue $ 6,719 $6,790 to $6,960

Adjusted operating profit(1) 3,063 3,095 to 3,245

Cable

Revenue(5)(6) $ 3,358 $3,390 to $3,470

Adjusted operating profit(1)(6) 1,605 1,625 to 1,675

Media

Revenue(6) $ 1,620 $1,690 to $1,750

Adjusted operating profit(1)(6) 190 170 to 195

(1) Excludes (i) stock-based compensation expense; and (ii) integration, restructuring and acquisition expenses.

(2) Includes additions to Wireless, Cable, Media, RBS and Corporate PP&E expenditures.

(3) Pre-tax free cash flow is defined as adjusted operating profit less PP&E expenditures and interest

on long-term debt (net of capitalization), and is not a defined term under IFRS.

(4) This supplemental detail does not represent part of our formal 2013 guidance and is provided for

informative purposes only. Any update over the course of 2013 would only be made to the consolidated

level guidance ranges provided above.

(5) Includes Cable Television, high-speed Internet and telephony services.

(6) Assumes Mountain Cable and theScore close mid-year 2013.

Rogers Communications Inc.

Unaudited Consolidated Statements of Income

(In millions of Canadian dollars, except per share amounts)

Three months ended Twelve months ended

December 31, December 31,

2012 2011 2012 2011

Operating revenue $ 3,261 $ 3,155 $ 12,486 $ 12,346

Operating expenses:

Operating costs 2,142 2,088 7,729 7,682

Integration, restructuring and acquisition costs 10 20 92 56

Depreciation and amortization 453 454 1,819 1,743

Impairment of assets 80 - 80 -

Operating income 576 593 2,766 2,865

Finance costs (176) (158) (664) (738)

Other income (expense), net 4 (6) 15 1

Share of the income of associates and joint ventures 237 3 235 7

Income before income taxes 641 432 2,352 2,135

Income tax expense 112 97 620 545

Net for the period from continuing operations $ 529 $ 335 $ 1,732 $ 1,590

Loss from discontinued operations, net of tax - (8) (32) (27)

Net income $ 529 $ 327 $ 1,700 $ 1,563

Earnings per share - basic:

Earnings per share from continuing operations $ 1.03 $ 0.63 $ 3.34 $ 2.93

Loss per share from discontinued operations - (0.02) (0.06) (0.05)

Earnings per share $ 1.03 0.61 $ 3.28 $ 2.88

Earnings per share - diluted:

Earnings per share from continuing operations $ 1.02 $ 0.63 $ 3.32 $ 2.91

Loss per share from discontinued operations - (0.02) (0.06) (0.05)

Earnings per share $ 1.02 $ 0.61 $ $ 3.26 $ 2.86

Rogers Communications Inc.

Unaudited Consolidated Statements of Financial Position

(In millions of Canadian dollars)

December 31, December 31,

2012 2011

Assets

Current assets:

Cash and cash equivalents $ 213 $ -

Accounts receivable 1,536 1,574

Other current assets 464 322

Current portion of derivative instruments 8 16

2,221 1,912

Property, plant and equipment 9,576 9,114

Goodwill 3,215 3,280

Intangible assets 2,951 2,721

Investments 1,484 1,107

Derivative instruments 42 64

Other long-term assets 98 134

Deferred tax assets 31 30

$ 19,618 $ 18,362

Liabilities and Shareholders' Equity

Current liabilities:

Bank advances $ - $ 57

Accounts payable and accrued liabilities 2,135 2,085

Income tax payable 24 -

Current portion of provisions 7 35

Current portion of long-term debt 348 -

Current portion of derivative instruments 144 37

Unearned revenue 344 335

3,002 2,549

Provisions 31 38

Long-term debt 10,441 10,034

Derivative instruments 417 503

Other long-term liabilities 458 276

Deferred tax liabilities 1,501 1,390

15,850 14,790

Shareholders' equity 3,768 3,572

$ 19,618 $ 18,362

Rogers Communications Inc.

Unaudited Consolidated Statements of Cash Flows

(In millions of Canadian dollars)

Three months ended Twelve months ended

December 31, December 31,

2012 2011 2012 2011

Cash provided by (used in):

Operating activities:

Net income for the period $ 529 $ 327 $ 1,700 $ 1,563

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization 453 454 1,819 1,743

Impairment of assets 80 - 80 -

Program rights amortization 13 23 73 83

Finance costs 176 158 664 738

Income tax expense 112 95 610 535

Pension contributions, net of expense (7) (3) (36) (41)

Settlement of pension obligations - - - 11

Stock-based compensation expense 57 34 77 64

Share of the income of associates and joint ventures (237) (3) (235) (7)

Other (18) 9 (23) 9

1,158 1,094 4,729 4,698

Change in non-cash operating working capital items (108) 99 (248) (169)

1,050 1,193 4,481 4,529

Income taxes paid (257) (82) (380) (99)

Interest paid (125) (86) (680) (639)

668 1,025 3,421 3,791

Investing activities:

Additions to property, plant and equipment ("PP&E") (707) (653) (2,142) (2,127)

Change in non-cash working capital items related to PP&E 185 32 136 (89)

Acquisitions, net of cash and cash equivalents acquired - - - (532)

Investments (167) - (707) -

Additions to program rights (23) (6) (90) (56)

Other 2 1 (31) (27)

(710) (626) (2,834) (2,831)

Financing activities:

Issuance of long-term debt - 450 2,090 4,100

Repayment of long-term debt - (320) (1,240) (2,802)

Premium on repayment of long-term debt - - - (76)

Payment on settlement of cross-currency interest rate

exchange agreements and forward contracts - - - (1,208)

Proceeds on settlement of cross-currency interest rate

exchange agreements and forward contracts - - - 878

Transaction costs incurred related to long-term debt - - (14) (10)

Repurchase of Class B Non-Voting shares - (374) (350) (1,099)

Proceeds received on exercise of stock options - 2 - 3

Dividends paid (204) (190) (803) (758)

(204) (432) (317) (972)

Change in cash and cash equivalents (246) (33) 270 (12)

Cash and cash equivalents, beginning of period 459 (24) (57) (45)

Cash and cash equivalents, end of period $ 213 $ (57) $ 213 $ (57)

The change in non-cash operating working capital items is as follows:

Accounts receivable $ (101) $ (117) $ 15 $ (86)

Other current assets (51) 57 (131) (33)

Accounts payable and accrued liabilities 10 153 (140) (46)

Unearned revenue 34 6 8 (4)

$ (108) $ 99 $ (248) (169)

Audited Full Year 2012 Financial Statements

In the next few weeks, we intend to file with securities regulators in Canada and the U.S. our Audited Annual Consolidated Financial Statements and Notes thereto for the year ended December 31, 2012 and MD&A in respect of such annual financial statements. Notification of such filings will be made by a press release and such statements will be made available on the rogers.com/investors, sedar.com and sec.gov websites or upon request.


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