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Rogers Communications Reports Fourth Quarter and Full-Year 2022 Results; Announces 2023 Financial Guidance

  • Rogers' Q4 results reflect robust Wireless and Media performance; Company provides strong outlook for 2023
  • Healthy, competitive market embraces value of Rogers' wireless plans, with postpaid mobile phone net additions of 193,000, up 37%
    • Full-year postpaid mobile phone net adds of 545,000 lead Canadian industry, up 35% and strongest results since 2007
  • Total service revenue up 6% and adjusted EBITDA up 10%
    • Wireless service revenue up 7%, adjusted EBITDA up 8%
    • Cable service revenue consistent with 2021; adjusted EBITDA up 1%
    • Media delivers strong growth, with revenue up 17% and adjusted EBITDA up $83 million
  • Capital expenditures of $776 million
    • Record investments of $3.1 billion by Rogers in Canada during 2022, including a 39% increase over the last-five-year average in network infrastructure
  • Rogers, Shaw, and Quebecor remain committed to the pro-competitive transactions to support a strong fourth wireless carrier and more competition in wireline
  • Company delivers on 2022 guidance; announces robust growth for 2023 guidance
    • Total service revenue growth range of 4% to 7%
    • Adjusted EBITDA growth range of 5% to 8%
    • Capital expenditures excluding Shaw1 of $3.1 billion to $3.3 billion compared to $3,033 million in 2022
    • Free cash flow excluding Shaw1 of $2.0 billion to $2.2 billion compared to $2,027 million in 2022

TORONTO, Feb. 02, 2023 (GLOBE NEWSWIRE) -- Rogers Communications Inc. today announced its unaudited financial and operating results for the fourth quarter ended December 31, 2022.

Consolidated Financial Highlights

 Three months ended December 31 Twelve months ended December 31
(In millions of Canadian dollars, except per share amounts, unaudited)20222021% Chg 20222021% Chg
        
Total revenue4,1663,9196 15,39614,6555
Total service revenue3,4363,2326 13,30512,5336
Adjusted EBITDA 11,6791,52210 6,3935,8879
Net income50840525 1,6801,5588
Adjusted net income 155448614 1,9151,8036
        
Diluted earnings per share$1.00$0.8025 $3.32$3.078
Adjusted diluted earnings per share 1$1.09$0.9614 $3.78$3.566
        
Cash provided by operating activities1,1451,147 4,4934,1618
Free cash flow 163546836 1,7731,6716
Free cash flow excluding Shaw financing 164446838 1,9851,67119

"We delivered strong results in the fourth quarter and for the full year," said Tony Staffieri, President and CEO. "We executed with discipline and delivered impressive growth in Wireless and Media, while setting solid growth targets for 2023. We remain committed to the Shaw transaction and delivering more choice, more value, and more innovation to Canadians."

____________________________
1 Adjusted EBITDA is a total of segments measure. Free cash flow is a capital management measure. Adjusted diluted earnings per share is a non-GAAP ratio. Capital expenditures excluding Shaw, free cash flow excluding Shaw, free cash flow excluding Shaw financing, and adjusted net income are non-GAAP financial measures; adjusted net income is a component of adjusted diluted earnings per share. See "Non-GAAP and Other Financial Measures" for more information about each of these measures. These are not standardized financial measures under International Financial Reporting Standards (IFRS) and might not be comparable to similar financial measures disclosed by other companies.

Quarterly Financial Highlights

Revenue
Total revenue and total service revenue each increased by 6% this quarter, driven primarily by revenue growth in our Wireless and Media businesses.

Wireless service revenue increased by 7% this quarter, primarily as a result of higher roaming revenue associated with increased travel, as COVID-19-related global travel restrictions were removed, and a larger postpaid mobile phone subscriber base. Wireless equipment revenue increased by 6%, as a result of a continued shift in the product mix towards higher-value devices.

Cable service revenue was stable this quarter, primarily as a result of increased competitive promotional activity, offset by service pricing changes made in the first quarter and an increase in total customer relationships.

Media revenue increased by 17% this quarter primarily as a result of higher sports-related revenue, including higher Toronto Blue Jays revenue, and higher advertising revenue, partially offset by lower Today's Shopping Choice revenue.

Adjusted EBITDA and margins
Consolidated adjusted EBITDA increased 10% this quarter and our adjusted EBITDA margin increased by 150 basis points primarily due to increases in Wireless and Media adjusted EBITDA.

Wireless adjusted EBITDA increased by 8%, primarily due to the flow-through impact of higher revenue as discussed above. This gave rise to an adjusted EBITDA service margin of 63.2%.

Cable adjusted EBITDA increased by 1%, primarily as a result lower operating expenses due to recognized cost efficiencies. This gave rise to an adjusted EBITDA margin of 51.2%.

Media adjusted EBITDA increased by $83 million this quarter, primarily due to higher revenue as discussed above.

Net income and adjusted net income
Net income and adjusted net income increased by 25% and 14%, respectively, this quarter, primarily as a result of higher adjusted EBITDA, partially offset by higher income taxes and higher finance costs attributable to the Shaw acquisition-related senior note financing.

Cash flow and available liquidity
This quarter, we generated cash flow from operating activities of $1,145 million (2021 - $1,147 million), in line with last year, as a result of higher adjusted EBITDA, offset by a higher investment in net operating assets. We also generated free cash flow of $635 million (2021 - $468 million), up 36%, primarily as a result of higher adjusted EBITDA, partially offset by higher interest on borrowings, including borrowings associated with the Shaw Transaction (as defined below).

As at December 31, 2022, we had $4.9 billion of available liquidity2 (December 31, 2021 - $4.2 billion), including $0.5 billion in cash and cash equivalents and a combined $4.4 billion available under our bank credit facilities. We also held $12.8 billion in restricted cash and cash equivalents that will be used to partially fund the cash consideration of the Shaw Transaction (see "Managing our Liquidity and Financial Resources").

We also returned $253 million in dividends to shareholders this quarter and we declared a $0.50 per share dividend on February 1, 2023.

____________________________
2 Available liquidity is a capital management measure. See "Non-GAAP and Other Financial Measures" for more information about this measure. See "Financial Condition" for a reconciliation of available liquidity.

Operating Environment and Strategic Highlights

As immigration levels continue to increase and COVID-19 restrictions have largely been removed, including travel and capacity restrictions, masking mandates, testing requirements, and vaccine mandates, the Canadian economy has recovered modestly. Travel volumes have increased due to fewer international travel restrictions, resulting in higher roaming revenue. Sporting events have been permitted to fill to venue capacity, resulting in greater attendance and game day revenue as we welcomed fans back to Rogers Centre. Additionally, our employees returned to our offices in a hybrid model earlier this year.

As a result of increasing inflation and the Bank of Canada's strategy for addressing that increase, many economists are forecasting Canada, along with other global economies, will enter a moderate recession in the first half of 2023. We remain confident we have the right team, a strong balance sheet, and the world-class networks that will allow us to maintain our long-term focus on growth and doing the right thing for our customers.

Our four focus areas guide our work and decision-making as we further improve our operational execution and make well-timed investments to grow our core businesses and deliver increased shareholder value. Below are some highlights for 2022.

Successfully complete the Shaw acquisition

  • Received approval from the Canadian Radio-television and Telecommunications Commission (CRTC) for the transfer of Shaw Communications Inc.'s (Shaw) broadcasting services.
  • Entered into a definitive agreement with Shaw and Quebecor Inc. (Quebecor) for the sale of Freedom Mobile Inc. (Freedom) to Quebecor.
  • Successfully obtained financing of $13 billion to fund the Shaw Transaction, including the largest cross-border financing in Canadian history.
  • Successfully argued for the dismissal by the Competition Tribunal (Tribunal) of the Competition Bureau's (Bureau) application to block the Shaw Transaction, with the panel concluding unanimously that the transactions are pro-competitive; the decision of the Tribunal was upheld by the Federal Court of Appeal on January 24, 2023.

Invest in our networks to deliver world-class connectivity to Canadian consumers and businesses

  • Invested a record $3.1 billion in capital investments in Canada, the majority of which was invested in our networks.
  • Continued to expand Canada’s largest 5G network as at December 31, 2022, reaching over 1,900 communities across the country.
  • Became the first service provider in Canada to deploy 3500 MHz spectrum to increase 5G network capacity, boost speeds, and deliver ultra-low latency services, starting in Nanaimo, British Columbia and continuing its deployment across Canada, including in Calgary, Edmonton, Montreal, Ottawa, Toronto, Vancouver, and multiple rural areas.
  • Committed to investing $20 billion in network reliability over the next five years and announced plans to separate our wireless and wireline networks.
  • Signed a memorandum of understanding with Canada's other major telecommunications carriers regarding reciprocal support for emergency roaming, mutual assistance, and communications protocols in the event of a future major network outage.

Invest in our customer experience to deliver timely, high-quality customer service consistently to our customers

  • Introduced new fibre-powered Ignite Internet packages and bundles, with symmetrical download and upload speeds of up to 2.5 Gbps, with existing Ignite Internet Gigabit 1.5 customers upgraded at no extra cost.
  • First major provider in Canada to launch a new Wi-Fi modem with Wi-Fi 6E, currently the world's most powerful Wi-Fi technology, and introduced premium Ignite Internet with 8 Gbps symmetrical speeds in certain areas.
  • Continued to accelerate our digital-first plan to make it easier for customers, with digital adoption at 88% of eligible transactions; includes 24/7 virtual assistant support tools and the ability for Fido and Rogers customers to complete price plan changes, hardware upgrades, and other account updates online.
  • Donated $1 million to Jays Care Foundation in support of their ambitious goal to bring programming to 45,000 kids across Canada through Indigenous Rookie League, Challenger Baseball, and Girls at Bat.

Improve execution and deliver strong financial performance across all lines of business

  • Attracted 545,000 net postpaid mobile phone subscribers to lead the Canadian industry, up 35% and our strongest results since 2007.
  • Delivered on robust 2022 full-year guidance after increasing guidance ranges in April for total service revenue, adjusted EBITDA, and free cash flow excluding Shaw financing guidance.
  • Generated total service revenue of $13,305 million, up 6%; adjusted EBITDA of $6,393 million, up 9%; and net income of $1,680 million, up 8%.
  • Generated free cash flow excluding Shaw financing of $1,985 million, up 19%, and cash provided by operating activities of $4,493 million, up 8%.
  • Paid dividends of $1,010 million to our shareholders.

Achieved 2022 Guidance

The following table outlines guidance ranges that we had previously provided and our actual results and achievements for the selected full-year 2022 financial metrics.

 2021 2022 2022  
(In millions of dollars, except percentages)Actual Guidance Ranges Actual Achievement
Consolidated Guidance 1           
Total service revenue12,533 Increase of 6%toincrease of 8% 13,305 6.2% x
Adjusted EBITDA5,887 Increase of 8%toincrease of 10% 6,393 8.6% x
Capital expenditures 22,788 2,800to3,000 3,075 n/m x x
Free cash flow excluding Shaw financing1,671 1,900to2,100 1,985 n/m x


Achieved xExceeded x x

n/m - not meaningful
1 The table outlines guidance ranges for selected full-year 2022 consolidated financial metrics provided in our January 27, 2022 earnings release and subsequently updated on April 20, 2022. Guidance ranges presented as percentages reflect percentage increases over full-year 2021 results.
2 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences, additions to right-of-use assets, or assets acquired through business combinations.

We exceeded our guidance range for capital expenditures for the year due to greater investments in our networks. Despite these increased investments, we still achieved our guidance for total service revenue, adjusted EBITDA, and free cash flow excluding Shaw financing.

2023 Outlook

For the full-year 2023, we expect growth in total service revenue and adjusted EBITDA will drive higher free cash flow. In 2023, we expect to have the financial flexibility to maintain our network advantages and to continue to return cash to shareholders. To assess our results on an organic basis not including capital expenditures on integration-related activities in preparation for the Shaw Transaction (see "Shaw Transaction"), we are providing 2023 guidance ranges on "capital expenditures excluding Shaw" and "free cash flow excluding Shaw".

 2022 2023
(In millions of dollars, except percentages; unaudited)Actual Guidance Ranges 1
      
Consolidated Guidance     
Total service revenue13,305 Increase of 4%to7%
Adjusted EBITDA6,393 Increase of 5%to8%
Capital expenditures excluding Shaw 23,033 3,100to3,300
Free cash flow excluding Shaw 32,027 2,000to2,200

1 Guidance ranges presented as percentages reflect percentage increases over full-year 2022 results.
2 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences, additions to right-of-use assets, assets acquired through business combinations, or expenditures on integration-related activities in preparation for the Shaw Transaction.
3 Reflects free cash flow excluding the effect of Shaw senior note financing (as defined below) and capital expenditures on integration-related activities in preparation for the Shaw Transaction.

The above table outlines guidance ranges for selected full-year 2023 consolidated financial metrics without giving effect to the acquisition of Shaw (Shaw Transaction, see "Shaw Transaction"), the associated financing, or any other associated transactions or expenses. These ranges take into consideration our current outlook and our 2022 results. The purpose of the financial outlook is to assist investors, shareholders, and others in understanding certain financial metrics relating to expected 2023 financial results for evaluating the performance of our business. This information may not be appropriate for other purposes. Information about our guidance, including the various assumptions underlying it, is forward-looking and should be read in conjunction with "About Forward-Looking Information" (including the material assumptions listed under the heading "Key assumptions underlying our full-year 2023 guidance") and the related disclosure and information about various economic, competitive, and regulatory assumptions, factors, and risks that may cause our actual future financial and operating results to differ from what we currently expect.

We provide annual guidance ranges on a consolidated full-year basis that are consistent with annual full-year Board of Directors-approved plans. Any updates to our full-year financial guidance over the course of the year would only be made to the consolidated guidance ranges that appear above. Guidance ranges will be reassessed once the Shaw Transaction has closed.

Shaw Transaction

On March 15, 2021, we announced an agreement with Shaw to acquire all of Shaw's issued and outstanding Class A Participating Shares and Class B Non-Voting Participating Shares for a price of $40.50 per share in cash, with the exception of the shares held by the Shaw Family Living Trust, the controlling shareholder of Shaw, and related persons (Shaw Family Shareholders). The Shaw Family Shareholders will receive 60% of the consideration for their shares in the form of RCI Class B Non-Voting common shares on the basis of the volume-weighted average trading price for such shares for the ten trading days ended March 12, 2021, and the balance in cash. The Shaw Transaction is valued at approximately $26 billion, including the assumption of approximately $6 billion of Shaw debt.

The Shaw Transaction will be implemented through a court-approved plan of arrangement under the Business Corporations Act (Alberta). The Shaw Transaction is subject to other customary closing conditions, including compliance with, or receipt of, applicable approvals under the Competition Act (Canada) and the Radiocommunication Act (Canada) (collectively, Key Regulatory Approvals). Rogers, Shaw, and the Shaw Family Living Trust have agreed to extend the outside date for the Shaw Transaction to February 17, 2023. See "Regulatory Developments".

Financing
In connection with the Shaw Transaction, we entered into a binding commitment letter for a committed credit facility with a syndicate of banks in an original amount up to $19 billion. During the second quarter of 2021, we entered into a $6 billion non-revolving credit facility (term loan facility) related to the Shaw Transaction, which reduced the amount available under the committed credit facility to $13 billion. During the first quarter of 2022, we issued US$7.05 billion ($9.05 billion) and $4.25 billion of senior notes (Shaw senior note financing), which reduced the amount available under the committed credit facility to nil and the facility was terminated. The arrangement agreement between Rogers and Shaw requires us to maintain sufficient liquidity to ensure we are able to fund the Shaw Transaction upon closing and, as a result of the termination of the committed credit facility, we have restricted the use of approximately $12.8 billion in funds, which are recognized as "restricted cash and cash equivalents" on our fourth quarter interim condensed consolidated statement of financial position. The substantial majority of these funds were held as cash deposits with major financial institutions as at December 31, 2022. The remaining restricted cash equivalents have been invested in short-term, highly liquid investments and are readily convertible to cash with no associated penalties.

The senior notes (except the $1.25 billion senior notes due 2025) also contain a "special mandatory redemption" provision (SMR notes), which initially required them to be redeemed at 101% of principal amount (plus accrued interest) if the Shaw Transaction was not consummated prior to December 31, 2022 (SMR outside date). In August 2022, we received consent from the note holders of the SMR notes, and paid an initial consent fee of $557 million (including directly attributable transaction costs), to extend the SMR outside date to December 31, 2023, to ensure this financing remains in place should the Shaw Transaction close after December 31, 2022. As at December 31, 2022, because the Shaw Transaction had not yet been consummated and we had not become obligated to complete a special mandatory redemption, we were required to pay $262 million of additional consent fees to the holders of SMR notes in January 2023. Additionally, in September 2022, we extended the drawdown period on the $6 billion term loan facility from December 31, 2022 to December 31, 2023. See "Managing our Liquidity and Financial Resources" for more information on our financing for the Shaw Transaction.

We also expect that RCI will either assume Shaw's senior notes or provide a guarantee of Shaw's payment obligations under those senior notes upon closing the Shaw Transaction and, in either case, Rogers Communications Canada Inc. (RCCI) will guarantee Shaw's payment obligations under Shaw's senior notes.

Regulatory approval status
On March 24, 2022, the Canadian Radio-television and Telecommunications Commission (CRTC) approved our acquisition of Shaw's broadcasting services, subject to a number of conditions and modifications that are detailed in "Regulatory Developments". The CRTC approval only relates to the broadcasting elements of the Shaw Transaction.

On May 9, 2022, the Bureau announced it had filed applications to the Tribunal opposing the Shaw Transaction and requesting an injunction to prevent closing of the Shaw Transaction until the Bureau's application to challenge the Shaw Transaction could be decided.

On June 17, 2022, we announced a proposed divestiture agreement with Shaw and Quebecor for the sale of Freedom to Quebecor (Freedom Transaction). The agreement provides for the sale of all Freedom-branded wireless and Internet customers and all of Freedom's infrastructure, spectrum licences, and retail locations. The Freedom Transaction also includes long-term agreements to provide transport (including backhaul and backbone), roaming, and other services to Quebecor. Rogers and Quebecor will provide each other with customary transition services as necessary to operate Freedom's business for a reasonable period of time post-closing and to facilitate the separation of Freedom's business from the other businesses and operations of Shaw and its affiliates. The agreement does not contemplate the sale of Shaw Mobile-branded wireless subscribers. Under the terms of the agreement, Quebecor has agreed to pay Shaw $2.85 billion on a cash-free, debt-free basis.

The Freedom Transaction is conditional, among other things, on the completion of the Shaw Transaction, compliance with the Competition Act (Canada), and the approval of the Minister of Innovation, Science and Industry and would close substantially concurrently with closing of the Shaw Transaction. On August 12, 2022, we announced we had entered into definitive agreements with Quebecor.

On October 25, 2022, the Minister for Innovation, Science and Industry as an administrative matter denied our initial March 2021 request to transfer Freedom's spectrum licences to Rogers. In contemplation of the proposed Freedom Transaction, the Minister set out certain conditions (which Quebecor announced its intention to accept) before the Minister would consider approving a transfer of Freedom's spectrum licences to Videotron Inc. (Videotron). On December 31, 2022, the Minister indicated he would not render his decision on the transfer of Freedom’s spectrum licences to Videotron until there is clarity on the ongoing legal process arising from the Tribunal’s decision. The proposed Freedom Transaction continues to be reviewed by Innovation, Science and Economic Development Canada (ISED Canada).

The Tribunal proceedings commenced on November 7, 2022 and final oral arguments were completed on December 14, 2022. On December 29, 2022, the Tribunal released its summary decision, dismissing the Bureau's application to block the Shaw Transaction. Subsequently, on December 30, 2022, the Bureau announced it would appeal the Tribunal's decision to the Federal Court of Appeal. The Federal Court of Appeal held a hearing on January 24, 2023, during which it issued a ruling from the bench dismissing the Bureau's appeal and upholding the Tribunal's decision. On January 24, 2023, following the Federal Court of Appeal’s decision, the Bureau announced it would not be pursuing a further appeal in the case. On January 25, 2023, the House of Commons Standing Committee on Industry and Technology held a second public hearing regarding the Shaw Transaction, including the proposed Freedom Transaction, at which members of management for Rogers, Shaw, and Quebecor, among others, appeared.

Given the ongoing regulatory process and the parties’ continued commitment to the Shaw Transaction, Rogers, Shaw, and the Shaw Family Living Trust have agreed to extend the outside date for closing the Shaw Transaction to February 17, 2023 (with the consent of Quebecor). The outside date for the proposed Freedom Transaction coincides with the outside date of the Shaw Transaction. Nonetheless, the time required for ISED Canada to issue its approval is uncertain and could result in further delays in, or prevent the closing of, the Shaw Transaction and the Freedom Transaction.

See "Regulatory Developments" for more information on the regulatory approval status of the Shaw Transaction.

About Rogers

Rogers is a leading Canadian technology and media company that provides communications services and entertainment to consumers and businesses. Our shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).

Investment community contactMedia contact
  
Paul CarpinoSarah Schmidt
647.435.6470647.643.6397
paul.carpino@rci.rogers.comsarah.schmidt@rci.rogers.com


Quarterly Investment Community Teleconference

Our fourth quarter 2022 results teleconference with the investment community will be held on:

  • February 2, 2023
  • 8:00 a.m. Eastern Time
  • webcast available at investors.rogers.com
  • media are welcome to participate on a listen-only basis

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

For More Information

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

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

About this Earnings Release

This earnings release contains important information about our business and our performance for the three and twelve months ended December 31, 2022, as well as forward-looking information about future periods. This earnings release should be used as preparation for reading our forthcoming Management's Discussion and Analysis (MD&A) and Audited Consolidated Financial Statements for the year ended December 31, 2022, which we intend to file with securities regulators in Canada and the US in the coming weeks. These documents will be made available at investors.rogers.com, sedar.com, and sec.gov or mailed upon request.

The financial information contained in this earnings release is prepared using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This earnings release should be read in conjunction with our 2021 Annual MD&A, our 2021 Audited Consolidated Financial Statements, our 2022 First, Second, and Third Quarter MD&A and Interim Condensed Consolidated Financial Statements, and our other recent filings with Canadian and US securities regulatory authorities, which are available on SEDAR at sedar.com or EDGAR at sec.gov, respectively.

Effective January 1, 2022, we changed the way in which we report certain subscriber metrics in both our Wireless and Cable segments such that we began presenting postpaid mobile phone subscribers, prepaid mobile phone subscribers, and mobile phone ARPU in our Wireless segment. We also no longer report blended average billings per unit (ABPU). In Cable, we began presenting retail Internet, Video (formerly Television), Smart Home Monitoring, and Home Phone subscribers. These changes are a result of shifts in the ways in which we manage our business, including the significant adoption of our wireless device financing program, and to better align with industry practices. See "Results of our Reportable Segments" and "Key Performance Indicators" for more information. We have retrospectively amended our 2021 comparative segment results to account for this redefinition.

We, us, our, Rogers, Rogers Communications, and the Company refer to Rogers Communications Inc. and its subsidiaries. RCI refers to the legal entity Rogers Communications Inc., not including its subsidiaries. Rogers also holds interests in various investments and ventures.

All dollar amounts are in Canadian dollars unless otherwise stated and are unaudited. All percentage changes are calculated using the rounded numbers as they appear in the tables. Information is current as at February 1, 2023 and was approved by RCI's Board of Directors (the Board). This earnings release includes forward-looking statements and assumptions. See "About Forward-Looking Information" for more information.

We are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).

In this earnings release, this quarter, the quarter, or fourth quarter refer to the three months ended December 31, 2022, first quarter refers to the three months ended March 31, 2022, second quarter refers to the three months ended June 30, 2022, third quarter refers to the three months ended September 30, 2022 and year to date or full year refer to the twelve months ended December 31, 2022. All results commentary is compared to the equivalent period in 2021 or as at December 31, 2021, as applicable, unless otherwise indicated.

Trademarks in this earnings release are owned by Rogers Communications Inc. or an affiliate. This earnings release also includes trademarks of other parties. The trademarks referred to in this earnings release may be listed without the ™ symbols. ©2023 Rogers Communications

Reportable segments
We report our results of operations in three reportable segments. Each segment and the nature of its business is as follows:

SegmentPrincipal activities
WirelessWireless telecommunications operations for Canadian consumers and businesses.
CableCable telecommunications operations, including Internet, television and other video (Video), telephony (Home Phone), and smart home monitoring services for Canadian consumers and businesses, and network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for the business, public sector, and carrier wholesale markets.
MediaA diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, and digital media.

Wireless and Cable are operated by our wholly owned subsidiary, RCCI, and certain of our other wholly owned subsidiaries. Media is operated by our wholly owned subsidiary, Rogers Media Inc., and its subsidiaries.

Summary of Consolidated Financial Results

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars, except margins and per share amounts)2022 2021 % Chg  2022 2021 % Chg 
        
Revenue       
Wireless2,578 2,415 7  9,197 8,768 5 
Cable1,019 1,023   4,071 4,072  
Media606 516 17  2,277 1,975 15 
Corporate items and intercompany eliminations(37)(35)6  (149)(160)(7)
Revenue4,166 3,919 6  15,396 14,655 5 
Total service revenue 13,436 3,232 6  13,305 12,533 6 
        
Adjusted EBITDA       
Wireless1,173 1,086 8  4,469 4,214 6 
Cable522 518 1  2,058 2,013 2 
Media57 (26)n/m  69 (127)n/m 
Corporate items and intercompany eliminations(73)(56)30  (203)(213)(5)
Adjusted EBITDA1,679 1,522 10  6,393 5,887 9 
Adjusted EBITDA margin 240.3%38.8%1.5 pts  41.5%40.2%1.3 pts 
        
Net income508 405 25  1,680 1,558 8 
Basic earnings per share$1.01 $0.80 26  $3.33 $3.09 8 
Diluted earnings per share$1.00 $0.80 25  $3.32 $3.07 8 
        
Adjusted net income554 486 14  1,915 1,803 6 
Adjusted basic earnings per share 2$1.10 $0.96 15  $3.79 $3.57 6 
Adjusted diluted earnings per share$1.09 $0.96 14  $3.78 $3.56 6 
        
Capital expenditures776 846 (8) 3,075 2,788 10 
Cash provided by operating activities1,145 1,147   4,493 4,161 8 
Free cash flow635 468 36  1,773 1,671 6 
Free cash flow excluding Shaw financing644 468 38  1,985 1,671 19 

1 As defined. See "Key Performance Indicators".
2 Adjusted EBITDA margin is a supplementary financial measure. Adjusted basic earnings per share is a non-GAAP ratio. Adjusted net income is a component of adjusted basic earnings per share. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. See "Non-GAAP and Other Financial Measures" for more information about these measures.

Results of our Reportable Segments

WIRELESS

Wireless Financial Results

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars, except margins)2022 2021 % Chg  2022 2021 % Chg 
        
Revenue       
Service revenue1,856 1,735 7  7,131 6,666 7 
Equipment revenue722 680 6  2,066 2,102 (2)
Revenue2,578 2,415 7  9,197 8,768 5 
        
Operating expenses       
Cost of equipment734 713 3  2,115 2,142 (1)
Other operating expenses671 616 9  2,613 2,412 8 
Operating expenses1,405 1,329 6  4,728 4,554 4 
        
Adjusted EBITDA1,173 1,086 8  4,469 4,214 6 
        
Adjusted EBITDA service margin 163.2%62.6%0.6 pts  62.7%63.2%(0.5 pts)
Adjusted EBITDA margin 245.5%45.0%0.5 pts  48.6%48.1%0.5 pts 
Capital expenditures421 501 (16) 1,758 1,515 16 

1 Calculated using service revenue.
2 Calculated using total revenue.

Wireless Subscriber Results 1

 Three months ended December 31 Twelve months ended December 31
(In thousands, except churn and mobile phone ARPU)2022 2021 Chg 2022 2021 Chg
        
Postpaid mobile phone       
Gross additions537 420 117 1,523 1,304 219
Net additions193 141 52 545 403 142
Total postpaid mobile phone subscribers 29,392 8,847 545 9,392 8,847 545
Churn (monthly)1.24%1.06%0.18 pts 0.90%0.88%0.02 pts
Prepaid mobile phone       
Gross additions216 145 71 796 512 284
Net (losses) additions(7)(21)14 89 (94)183
Total prepaid mobile phone subscribers 21,255 1,166 89 1,255 1,166 89
Churn (monthly)5.90%4.66%1.24 pts 4.90%4.20%0.70 pts
Mobile phone ARPU (monthly) 3$58.69 $58.14 $0.55 $57.89 $56.83 $1.06

1 Subscriber counts and subscriber churn are key performance indicators. See "Key Performance Indicators".
2 As at end of period.
3 Mobile phone ARPU is a supplementary financial measure. See "Non-GAAP and Other Financial Measures" for an explanation as to the composition of this measure.

Service revenue
The 7% increase in service revenue this quarter was primarily a result of:

  • higher roaming revenue associated with increased travel as COVID-19-related global travel restrictions were removed; and
  • a larger mobile phone subscriber base.

The 1% increase in mobile phone ARPU this quarter was primarily a result of increased roaming revenue.

The increase in postpaid gross additions this quarter was a result of strong operating performance, an increase in market activity by Canadians, and increasing immigration levels with the continuing improvement of the economy as the COVID-19 environment improved.

Equipment revenue
The 6% increase in equipment revenue this quarter was a result of:

  • higher device upgrades by existing customers; and
  • a continued shift in the product mix towards higher-value devices; partially offset by
  • increased promotional activity.

Operating expenses
Cost of equipment
The 3% increase in the cost of equipment this quarter was primarily a result of:

  • higher device upgrades by existing customers; and
  • a continued shift in the product mix towards higher-value devices; partially offset by
  • increased promotional activity.

Other operating expenses
The 9% increase in other operating expenses this quarter was primarily a result of higher costs associated with the increased revenue, which included increased roaming, commissions, and advertising.

Adjusted EBITDA
The 8% increase in adjusted EBITDA this quarter was a result of the revenue and expense changes discussed above.

CABLE

Cable Financial Results

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars, except margins)2022 2021 % Chg  2022 2021 % Chg 
        
Revenue       
Service revenue1,011 1,016   4,046 4,052  
Equipment revenue8 7 14  25 20 25 
Revenue1,019 1,023   4,071 4,072  
        
Operating expenses497 505 (2) 2,013 2,059 (2)
        
Adjusted EBITDA522 518 1  2,058 2,013 2 
        
Adjusted EBITDA margin51.2%50.6%0.6 pts  50.6%49.4%1.2 pts 
Capital expenditures235 237 (1) 1,019 913 12 

Cable Subscriber Results 1

 Three months ended December 31  Twelve months ended December 31 
(In thousands, except ARPA and penetration)2022 2021 Chg  2022 2021 Chg 
        
Homes passed 24,804 4,700 104  4,804 4,700 104 
Customer relationships       
Net (losses) additions(6)10 (16) 6 31 (25)
Total customer relationships 2,32,590 2,581 9  2,590 2,581 9 
ARPA (monthly) 4$129.92 $131.63 ($1.71) $130.12 $132.58 ($2.46)
        
Penetration 253.9%54.9%(1.0 pts) 53.9%54.9%(1.0 pts)
        
Retail Internet       
Net additions7 21 (14) 52 71 (19)
Total retail Internet subscribers 2,32,284 2,229 55  2,284 2,229 55 
Video       
Net (losses) additions(10)5 (15) 32 (9)41 
Total Video subscribers 2,31,525 1,491 34  1,525 1,491 34 
Smart Home Monitoring       
Net losses(1)(4)3  (12)(18)6 
Total Smart Home Monitoring subscribers 2101 113 (12) 101 113 (12)
Home Phone       
Net losses(18)(19)1  (76)(90)14 
Total Home Phone subscribers 2,3836 911 (75) 836 911 (75)

1 Subscriber results are key performance indicators. See "Key Performance Indicators".
2 As at end of period.
3 On March 16, 2022, we acquired approximately 3,000 retail Internet subscribers, 2,000 Video subscribers, 1,000 Home Phone subscribers, and 3,000 customer relationships as a result of our acquisition of a small regional cable company in Nova Scotia, which are not included in net additions, but do appear in the ending total balances for December 31, 2022.
4 ARPA is a supplementary financial measure. See "Non-GAAP and Other Financial Measures" for an explanation as to the composition of this measure.

Service revenue
The stable service revenue this quarter was a result of:

  • increased competitive promotional activity; and
  • declines in our Home Phone and Smart Home Monitoring subscriber bases; offset by
  • service pricing changes made in the first quarter; and
  • the increase in total customer relationships over the past year, due to growth in our retail Internet and Video subscriber bases.

The customer relationship net losses and the lower ARPA this quarter were a result of increased competitive promotional activity.

Operating expenses
The 2% decrease in operating expenses this quarter was primarily as a result of cost efficiencies.

Adjusted EBITDA
The 1% increase in adjusted EBITDA this quarter was a result of the service revenue and expense changes discussed above.

MEDIA

Media Financial Results

 Three months ended December 31 Twelve months ended December 31
(In millions of dollars, except margins)2022 2021 % Chg 2022 2021 % Chg
        
Revenue606 516 17 2,277 1,975 15
Operating expenses549 542 1 2,208 2,102 5
        
Adjusted EBITDA57 (26)n/m 69 (127)n/m
        
Adjusted EBITDA margin9.4%(5.0)%14.4 pts 3.0%(6.4)%9.4 pts
Capital expenditures73 38 92 142 115 23

Revenue
The 17% increase in revenue this quarter was a result of:

  • higher sports-related revenue, including:
    • negotiation of certain content rates; and
    • higher Toronto Blue Jays revenue including a distribution from Major League Baseball; and
  • higher advertising revenue due to the continuing improvement of the economy as the COVID-19 environment improved; partially offset by
  • lower Today's Shopping Choice revenue.

Operating expenses
The 1% increase in operating expenses this quarter was a result of:

  • higher Toronto Blue Jays player payroll due to the timing of games played; and
  • higher programming costs; partially offset by
  • lower Today's Shopping Choice costs in line with the lower revenue.

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

CAPITAL EXPENDITURES

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars, except capital intensity)2022 2021 % Chg  2022 2021 % Chg 
        
Wireless421 501 (16) 1,758 1,515 16 
Cable235 237 (1) 1,019 913 12 
Media73 38 92  142 115 23 
Corporate47 70 (33) 156 245 (36)
        
Capital expenditures 1776 846 (8) 3,075 2,788 10 
        
Capital intensity 218.6%21.6%(3.0 pts) 20.0%19.0%1.0 pts 

1 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences, additions to right-of-use assets, or assets acquired through business combinations.
2 Capital intensity is a supplementary financial measure. See "Non-GAAP and Other Financial Measures" for an explanation as to the composition of this measure.

One of our focus areas is to deliver world-class connectivity to Canadian consumers and businesses. As we continually work towards this, we spent more on our wireless and wireline networks this year than we have in the past several years. This year, we continued to roll out our 5G network, the largest 5G network in Canada as at December 31, 2022, across the country. We also continued to invest in fibre deployments, including fibre-to-the-home (FTTH), in our cable network and we expanded our network footprint to reach more homes and businesses. We continued to direct capital expenditures to strengthen the resilience of our networks and made significant investments to strengthen our technology systems, increase network stability for our customers, and enhance our testing.

These investments will strengthen network resilience and stability and will help us bridge the digital divide by expanding our network further into rural and underserved areas through participation in various programs and projects.

Wireless
Capital expenditures in Wireless this quarter, while lower than 2021, reflect continued investments made to upgrade and expand our wireless network. We continue to work on our ongoing deployment of 3500 MHz spectrum, which substantially augments the capacity and resilience of our earlier 5G deployments in the 600 MHz spectrum band.

Cable
Capital expenditures in Cable this quarter were in line with 2021. We continue to work on upgrades that will lower the number of homes passed per node and incorporate the latest technologies to help deliver more bandwidth and an even more engaging customer experience as we progress in our connected home roadmap, including service footprint expansion and upgrades to our DOCSIS 3.1 platform to evolve to DOCSIS 4.0, which will offer increased network resilience and stability along with faster download speeds over time.

Media
The increase in capital expenditures in Media this quarter was primarily a result of ongoing renovations at Rogers Centre.

Corporate
The decrease in corporate capital expenditures this quarter was a result of lower investments in our real estate facilities and our corporate information technology infrastructure.

Capital intensity
Capital intensity decreased in the quarter as a result of lower capital expenditure investments, as noted above, partially offset by higher revenue.

Review of Consolidated Performance

This section discusses our consolidated net income and other income and expenses that do not form part of the segment discussions above.

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)2022 2021 % Chg  2022 2021% Chg 
        
Adjusted EBITDA1,679 1,522 10  6,393 5,8879 
Deduct (add):       
Depreciation and amortization648 658 (2) 2,576 2,585 
Restructuring, acquisition and other58 101 (43) 310 324(4)
Finance costs287 218 32  1,233 84945 
Other (income) expense(10)(12)(17) (15)2n/m 
Income tax expense188 152 24  609 5697 
        
Net income508 405 25  1,680 1,5588 

Depreciation and amortization

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)20222021% Chg  20222021% Chg 
        
Depreciation of property, plant and equipment572586(2) 2,2812,322(2)
Depreciation of right-of-use assets72669  27424611 
Amortization46(33) 211724 
        
Total depreciation and amortization648658(2) 2,5762,585 

Restructuring, acquisition and other
This quarter, we incurred $58 million (2021 - $101 million) in restructuring, acquisition and other expenses, which included $47 million (2021 - $62 million) of incremental costs supporting acquisition and integration activities related to the Shaw Transaction. The remaining costs in 2021 and 2022 were primarily severance costs associated with the targeted restructuring of our employee base.

Finance costs

 Three months ended December 31  Twelve months ended December 31
(In millions of dollars)2022 2021 % Chg  2022 2021 % Chg
        
Interest on borrowings242 188 29  907 745 22
Interest on Shaw senior note financing139    447  
        
Total interest on borrowings 1381 188 103  1,354 745 82
Interest earned on restricted cash and cash equivalents(130)   (235) 
        
Interest on borrowings, net251 188 34  1,119 745 50
Interest on lease liabilities22 20 10  80 74 8
Interest on post-employment benefits liability 3 (100) (1)14 n/m
(Gain) loss on foreign exchange(19)1 n/m  127 10 n/m
Change in fair value of derivative instruments16 3 n/m  (126)(6)n/m
Capitalized interest(8)(5)60  (29)(17)71
Deferred transaction costs and other25 8 n/m  63 29 117
        
Total finance costs287 218 32  1,233 849 45

1 Interest on borrowings includes interest on short-term borrowings and on long-term debt.

The 34% increase in net interest on borrowings this quarter was a result of new debt issued in the last year, primarily associated with the completion of our long-term financing for the Shaw Transaction, to support our acquisition of 3500 MHz spectrum licences in late 2021, and to fund certain debt maturities, including:

  • the issuance of $2 billion subordinated notes in December 2021;
  • the issuance of US$750 million subordinated notes in February 2022; and
  • the issuance of $4.25 billion and US$7.05 billion senior notes in March 2022.

Income tax expense

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars, except tax rates)2022 2021  2022 2021 
      
Statutory income tax rate26.5%26.5% 26.5%26.5%
Income before income tax expense696 557  2,289 2,127 
Computed income tax expense184 148  607 564 
Increase (decrease) in income tax expense resulting from:     
Non-deductible stock-based compensation9 1  10 1 
Non-deductible portion of equity losses1   9 12 
Non-taxable portion of capital gains(5)  (5) 
Non-taxable income from security investments(3)(3) (12)(11)
Other items2 6   3 
      
Total income tax expense188 152  609 569 
      
Effective income tax rate27.0%27.3% 26.6%26.8%
Cash income taxes paid25 25  455 700 

Net income

 Three months ended December 31 Twelve months ended December 31
(In millions of dollars, except per share amounts)20222021% Chg 20222021% Chg
        
Net income50840525 1,6801,5588
Basic earnings per share$1.01$0.8026 $3.33$3.098
Diluted earnings per share$1.00$0.8025 $3.32$3.078

Adjusted net income
We calculate adjusted net income from adjusted EBITDA as follows:

 Three months ended December 31  Twelve months ended December 31
(In millions of dollars, except per share amounts)2022 2021 % Chg  2022 2021% Chg
        
Adjusted EBITDA1,679 1,522 10  6,393 5,8879
Deduct:       
Depreciation and amortization648 658 (2) 2,576 2,585
Finance costs287 218 32  1,233 84945
Other (income) expense(10)(12)(17) (15)2n/m
Income tax expense 1200 172 16  684 6486
        
Adjusted net income554 486 14  1,915 1,8036
        
Adjusted basic earnings per share$1.10 $0.96 15  $3.79 $3.576
Adjusted diluted earnings per share$1.09 $0.96 14  $3.78 $3.566

1 Income tax expense excludes recoveries of $12 million and $75 million (2021 - recoveries of $20 million and $79 million) for the three and twelve months ended December 31, 2022 related to the income tax impact for adjusted items.

Managing our Liquidity and Financial Resources

Operating, investing, and financing activities

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)2022 2021  2022 2021 
Cash provided by operating activities before changes in net operating assets and liabilities, income taxes paid, and interest paid1,658 1,453  6,154 5,626 
Change in net operating assets and liabilities(201)(50) (152)37 
Income taxes paid(25)(25) (455)(700)
Interest paid, net(287)(231) (1,054)(802)
      
Cash provided by operating activities1,145 1,147  4,493 4,161 
      
Investing activities:     
Capital expenditures(776)(846) (3,075)(2,788)
Additions to program rights(8)(13) (47)(54)
Changes in non-cash working capital related to capital expenditures and intangible assets(222)12  (200)67 
Acquisitions and other strategic transactions, net of cash acquired (2,661) (9)(3,404)
Other(5)16  68 46 
      
Cash used in investing activities(1,011)(3,492) (3,263)(6,133)
      
Financing activities:     
Net (repayment of) proceeds received from short-term borrowings(38)(172) 707 971 
Net issuance of long-term debt 2,000  12,711 550 
Net proceeds (payments) on settlement of debt derivatives and forward contracts16 8  (11)(8)
Transaction costs incurred (20) (726)(31)
Principal payments of lease liabilities(83)(75) (316)(269)
Dividends paid(253)(253) (1,010)(1,010)
      
Cash (used in) provided by financing activities(358)1,488  11,355 203 
      
Change in cash and cash equivalents and restricted cash and cash equivalents(224)(857) 12,585 (1,769)
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period13,524 1,572  715 2,484 
      
Cash and cash equivalents and restricted cash and cash equivalents, end of period13,300 715  13,300 715 
      
Cash and cash equivalents463 715  463 715 
Restricted cash and cash equivalents12,837   12,837  
      
Cash and cash equivalents and restricted cash and cash equivalents, end of period13,300 715  13,300 715 

Operating activities
Cash provided by operating activities this quarter was stable, primarily as a result of higher adjusted EBITDA, offset by a higher investment in net operating assets, mainly higher accounts receivable associated with the increase in revenue.

Investing activities
Capital expenditures
During the quarter, we incurred $776 million on capital expenditures before changes in non-cash working capital items. See "Capital Expenditures" for more information.

Acquisitions and other strategic transactions
During the three months ended December 31, 2021, we made the final payment of $2.66 billion related to the acquisition of 3500 MHz spectrum licences.

Financing activities
During the quarter, we paid net amounts of $22 million (2021 - received $1,816 million) on our short-term borrowings, long-term debt, and related derivatives, net of transaction costs paid. See "Financial Risk Management" for more information on the cash flows relating to our derivative instruments.

Short-term borrowings
Our short-term borrowings consist of amounts outstanding under our receivables securitization program, our US dollar-denominated commercial paper (US CP) program, and our short-term non-revolving credit facilities. Below is a summary of our short-term borrowings as at December 31, 2022 and December 31, 2021.

 As at
December 31
As at
December 31
(In millions of dollars)20222021
   
Receivables securitization program2,400800
US commercial paper program (net of the discount on issuance)214893
Non-revolving credit facility borrowings (net of the discount on issuance)371507
   
Total short-term borrowings2,9852,200

The tables below summarize the activity relating to our short-term borrowings for the three and twelve months ended December 31, 2022 and 2021.

 Three months ended
December 31, 2022
  Twelve months ended
December 31, 2022
 
 Notional ExchangeNotional  Notional ExchangeNotional 
(In millions of dollars, except exchange rates)(US$) rate(Cdn$)  (US$) rate(Cdn$) 
        
Proceeds received from receivables securitization  400    1,600 
Net proceeds received from receivables securitization  400    1,600 
        
Proceeds received from US commercial paper1,450 1.3541,963  6,745 1.3028,781 
Repayment of US commercial paper(2,038)1.360(2,771) (7,303)1.306(9,537)
Net repayment of US commercial paper  (808)   (756)
        
Proceeds received from non-revolving credit facilities (Cdn$)  370    865 
Total proceeds received from non-revolving credit facilities  370    865 
        
Repayment of non-revolving credit facilities (Cdn$)      (495)
Repayment of non-revolving credit facilities (US$)   (400)1.268(507)
Total repayment of non-revolving credit facilities      (1,002)
        
Net proceeds received from (repayment of) non-revolving credit facilities  370    (137)
        
Net (repayment of) proceeds received from short-term borrowings  (38)   707 


 Three months ended
December 31, 2021
  Twelve months ended
December 31, 2021
 
 Notional ExchangeNotional  Notional ExchangeNotional 
(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 paper611 1.257768  2,568 1.2603,235 
Repayment of US commercial paper(744)1.261(938) (2,314)1.259(2,914)
Net (repayment of) proceeds received from US commercial paper  (170)   321 
        
Proceeds received from non-revolving credit facilities (US$)800 1.2511,001  1,200 1.2531,503 
Repayment of non-revolving credit facilities (US$)(800)1.254(1,003) (800)1.254(1,003)
        
Net (repayment of) proceeds received from non-revolving credit facilities  (2)   500 
        
Net (repayment of) proceeds received from short-term borrowings  (172)   971 

In March 2022, we amended the terms of our receivables securitization program and increased the maximum potential proceeds under the program from $1.2 billion to $1.8 billion. In May 2022, we further amended the terms of the program and increased the maximum potential proceeds to $2 billion. In October 2022, we further amended the terms of the program and increased the maximum potential proceeds to $2.4 billion. We will continue to service the receivables and they will continue to be recorded as accounts receivable or financing receivables, as applicable, on our interim condensed consolidated statement of financial position.

The terms of our receivables securitization program are committed until its expiry, which we extended this year to an expiration date of April 25, 2024. The buyer's interest in these receivables ranks ahead of our interest. The buyer of our receivables has no further claim on any of our other assets.

Concurrent with our US CP issuances, we entered into debt derivatives to hedge the foreign currency risk associated with the principal and interest components of the borrowings. See "Financial Risk Management" for more information.

In December 2022, we entered into non-revolving credit facilities with an aggregate limit of $1 billion, including $375 million maturing in December 2023, $375 million maturing in January 2024, and $250 million maturing one year from when it is drawn. Any borrowings under these facilities will be recorded as short-term borrowings as they will be due within 12 months. Borrowings under the facilities are unsecured, guaranteed by RCCI, and rank equally in right of payment with all of our senior notes and debentures. As at December 31, 2022, we had borrowed $375 million, and received $370 million net of the discount on issuance, under the facility maturing in December 2023. In January 2023, we borrowed $371 million under the facility maturing in January 2024.

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 three and twelve months ended December 31, 2022 and 2021.

 Three months ended
December 31, 2022
 Twelve months ended
December 31, 2022
 
(In millions of dollars, except exchange rates)
NotionalExchangeNotional Notional ExchangeNotional 
(US$)rate(Cdn$) (US$) rate(Cdn$) 
        
Senior note issuances (Cdn$)     4,250 
Senior note issuances (US$) 7,050 1.2849,054 
Total issuances of senior notes     13,304 
        
Senior note repayments (Cdn$)     (600)
Senior note repayments (US$) (750)1.259(944)
Total senior notes repayments     (1,544)
        
Net issuance of senior notes     11,760 
        
Subordinated note issuances (US$) 750 1.268951 
        
Net issuance of long-term debt     12,711 


 Three months ended
December 31, 2021
 Twelve months ended
December 31, 2021
 
(In millions of dollars, except exchange rates)
NotionalExchangeNotional NotionalExchangeNotional 
(US$)rate(Cdn$) (US$)rate(Cdn$) 
        
Senior note repayments (Cdn$)     (1,450)
Subordinated note issuances (Cdn$)  2,000   2,000 
        
Net issuance of long-term debt  2,000   550 


 Three months ended
December 31
  Twelve months ended
December 31
 
(In millions of dollars)2022 2021  2022 2021 
      
Long-term debt net of transaction costs, beginning of period32,235 16,761  18,688 18,201 
Net issuance of long-term debt 2,000  12,711 550 
(Gain) loss on foreign exchange(263)(58) 1,271 (50)
Deferred transaction costs incurred(262)(20) (988)(31)
Amortization of deferred transaction costs23 5  51 18 
      
Long-term debt net of transaction costs, end of period31,733 18,688  31,733 18,688 

In April 2021, we amended our revolving credit facility to, among other things, increase the total credit limit and extend the maturity dates. We increased the total credit limit from $3.2 billion to $4 billion by increasing the limits of the two tranches to $3 billion and $1 billion (from $2.5 billion and $700 million), respectively. We also extended the maturity date of the $3 billion tranche to April 2026 and the $1 billion tranche to April 2024, both from March 2022. In January 2023, we amended our revolving credit facility to further extend the maturity date of the $3 billion tranche to January 2028, from April 2026, and the $1 billion tranche to January 2026, from April 2024.

Issuance of senior and subordinated notes and related debt derivatives
Below is a summary of the senior and subordinated notes we issued this year.

(In millions of dollars, except interest rates and discounts) Discount/
premium at
issuance
 Total gross
proceeds 1
(Cdn$)
Transaction costs and
discounts 2 (Cdn$)
Date issued Principal
amount
Due
date
Interest
rate
 Upon
issuance
Upon
modification 3
         
2022 issuances        
February 11, 2022 (subordinated) 4US75020825.250%At par95113
March 11, 2022 (senior) 5US1,00020252.950%99.934%1,283950
March 11, 2022 (senior) 1,25020253.100%99.924%1,2507
March 11, 2022 (senior)US1,30020273.200%99.991%1,6741382
March 11, 2022 (senior) 1,00020293.750%99.891%1,000757
March 11, 2022 (senior)US2,00020323.800%99.777%2,56727165
March 11, 2022 (senior) 1,00020324.250%99.987%1,000658
March 11, 2022 (senior)US75020424.500%98.997%9662095
March 11, 2022 (senior)US2,00020524.550%98.917%2,56455250
March 11, 2022 (senior) 1,00020525.250%99.483%1,0001262
         
2021 issuances        
December 17, 2021 (subordinated) 4 2,00020815.000%At par2,00020

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 Accounted for as a modification of the respective financial liabilities. Reflects initial consent fee of $557 million incurred in September 2022 and additional consent fee of $262 million incurred in December 2022.
4 Deferred transaction costs and discounts (if any) in the carrying value of the subordinated notes are recognized in net income using the effective interest method over a five-year period. The subordinated notes due 2082 can be redeemed at par on March 15, 2027 or on any subsequent interest payment date.
5 The US$1 billion senior notes due 2025 can be redeemed at par on or after March 15, 2023.

In August 2022, we received consent from the holders of SMR notes to extend the SMR outside date to December 31, 2023, to ensure this financing remained in place should the Shaw Transaction not have closed by December 31, 2022. As a result, we paid an initial consent fee to the note holders, including other directly attributable transaction costs, in September 2022 of $557 million ($121 million and US$331 million). Since the Shaw Transaction did not close prior to December 31, 2022, we were required to pay to the holders of SMR notes an additional consent fee of $262 million ($55 million and US$152 million) on January 9, 2023. The liability associated with the additional consent fee has been recognized within "accounts payable and accrued liabilities" on our Consolidated Statement of Financial Position as at December 31, 2022.

Dividends
Below is a summary of the dividends declared and paid on RCI's outstanding Class A Voting common shares (Class A Shares) and Class B Non-Voting common shares (Class B Non-Voting Shares) in 2022 and 2021. On February 1, 2023, the Board declared a dividend of $0.50 per Class A Share and Class B Non-Voting Share to be paid on April 3, 2023 to shareholders of record on March 10, 2022.

Declaration dateRecord datePayment dateDividend per
share (dollars)
Dividends paid
(in millions of dollars)
     
January 26, 2022March 10, 2022April 1, 20220.50252
April 19, 2022June 10, 2022July 4, 20220.50253
July 26, 2022September 9, 2022October 3, 20220.50253
November 8, 2022December 9, 2022January 3, 20230.50252
     
January 27, 2021March 10, 2021April 1, 20210.50252
April 20, 2021June 10, 2021July 2, 20210.50253
July 20, 2021September 9, 2021October 1, 20210.50253
October 20, 2021December 10, 2021January 4, 20220.50252

Free cash flow

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)2022 2021% Chg  2022 2021% Chg 
        
Adjusted EBITDA1,679 1,52210  6,393 5,8879 
Deduct:       
Capital expenditures 1776 846(8) 3,075 2,78810 
Interest on borrowings, net and capitalized interest243 18333  1,090 72850 
Cash income taxes 225 25  455 700(35)
        
Free cash flow635 46836  1,773 1,6716 
Add (deduct):       
Interest on Shaw senior note financing139   447  
Interest earned on restricted cash and cash equivalents(130)  (235) 
        
Free cash flow excluding Shaw financing644 46838  1,985 1,67119 

1 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences, additions to right-of-use assets, or assets acquired through business combinations.
2 Cash income taxes are net of refunds received.

Free cash flow and free cash flow excluding Shaw financing increased this quarter, primarily as a result of higher adjusted EBITDA and lower capital expenditures. Free cash flow was also impacted by higher interest on borrowings associated with the Shaw Transaction.

Financial Condition

Available liquidity
Below is a summary of our available liquidity from our cash and cash equivalents, bank credit facilities, letter of credit facilities, and short-term borrowings as at December 31, 2022 and December 31, 2021.

As at December 31, 2022Total sources
Drawn
Letters of credit
US CP program 1
Net available
(In millions of dollars)
      
Cash and cash equivalents463463
Bank credit facilities 2:     
Revolving4,00082153,777
Non-revolving1,000375625
Outstanding letters of credit7575
Receivables securitization 22,4002,400
      
Total7,9382,775832154,865

1 The US CP program amounts are gross of the discount on issuance.
2 The total liquidity sources under our bank credit facilities and receivables securitization represents the total credit limits per the relevant agreements. The amount drawn and letters of credit are currently outstanding under those agreements. The US CP program amount represents our currently outstanding US CP borrowings that are backstopped by our revolving credit facility.

As at December 31, 2021Total sources
Drawn
Letters of credit
US CP program 1
Net available
(In millions of dollars)
      
Cash and cash equivalents715715
Bank credit facilities 2:     
Revolving4,00088943,098
Non-revolving507507
Outstanding letters of credit7272
Receivables securitization 21,200800400
      
Total6,4941,307808944,213

1 The US CP program amounts are gross of the discount on issuance.
2 The total liquidity sources under our bank credit facilities and receivables securitization represents the total credit limits per the relevant agreements. The amount drawn and letters of credit are currently outstanding under those agreements. The US CP program amount represents our currently outstanding US CP borrowings that are backstopped by our revolving credit facility.

In addition to the sources of available liquidity noted above, we held $1,200 million of securities in publicly traded companies as at December 31, 2022 (December 31, 2021 - $1,581 million).

Our restricted cash and cash equivalents are not included in available liquidity as the funds were raised solely to fund a portion of the cash consideration of the Shaw Transaction. Our $6 billion term loan facility related to the Shaw Transaction is also not included in available liquidity as we can only draw on that facility to partially fund the Shaw Transaction. Our Canada Infrastructure Bank credit agreement (see "Managing our Liquidity and Financial Resources") is not included in available liquidity as it can only be drawn upon for use in broadband projects under the Universal Broadband Fund, and therefore is not available for other general purposes.

Weighted average cost of borrowings
Our weighted average cost of all borrowings was 4.50% as at December 31, 2022 (December 31, 2021 - 3.95%) and our weighted average term to maturity was 11.8 years (December 31, 2021 - 11.6 years). These figures reflect the expected repayment of our subordinated notes on the five-year anniversary.

Adjusted net debt and debt leverage ratios
We use adjusted net debt and debt leverage ratio to conduct valuation-related analysis and make capital structure-related decisions. Adjusted net debt includes long-term debt, net debt derivative assets or liabilities, short-term borrowings, lease liabilities, and cash and cash equivalents or bank advances.

 As at
December 31
 As at
December 31
 
(In millions of dollars, except ratios)2022 2021 
   
Long-term debt 132,855 18,873 
Subordinated notes adjustment 2(1,508)(1,000)
Net debt derivative assets valued without any adjustment for credit risk 3(998)(1,278)
Short-term borrowings2,985 2,200 
Lease liabilities2,028 1,957 
Cash and cash equivalents(463)(715)
Restricted cash and cash equivalents 4(12,837) 
   
Adjusted net debt 2,522,062 20,037 
Divided by: trailing 12-month adjusted EBITDA6,393 5,887 
   
Debt leverage ratio 53.5 3.4 
   
Adjusted net debt22,062 20,037 
Add (deduct):  
Shaw senior note financing(13,799) 
Restricted cash and cash equivalents12,837  
Net debt derivative liabilities related to Shaw senior note financing(267) 
Transaction costs paid related to Shaw senior note financing(707) 
Interest income on restricted cash and cash equivalents235  
Interest paid on Shaw senior note financing(301) 
   
Adjusted net debt excluding Shaw financing 520,060 20,037 
Divided by: trailing 12-month adjusted EBITDA6,393 5,887 
   
Debt leverage ratio excluding Shaw financing 53.1 3.4 

1 Includes current and long-term portion of long-term debt before deferred transaction costs and discounts.
2 For the purposes of calculating adjusted net debt and debt leverage ratio, we believe adjusting 50% of the value of our subordinated notes is appropriate as this methodology factors in certain circumstances with respect to priority for payment and this approach is commonly used to evaluate debt leverage by rating agencies.
3 For purposes of calculating adjusted net debt and debt leverage ratio, we believe including debt derivatives valued without adjustment for credit risk is commonly used to evaluate debt leverage and for market valuation and transactional purposes.
4 For the purposes of calculating adjusted net debt, we have deducted our restricted cash and cash equivalents as these funds were raised solely to fund a portion of the cash consideration of the Shaw Transaction or, if unable to be consummated, be used to redeem the applicable senior notes excluding any premium. We therefore believe including only the underlying senior notes would not represent our view of adjusted net debt prior to the consummation of the Shaw Transaction or the redemption of the senior notes.
5 Adjusted net debt and debt leverage ratio are capital management measures. Debt leverage ratio excluding Shaw financing is a non-GAAP ratio. Adjusted net debt excluding Shaw financing is a non-GAAP financial measure and is a component of debt leverage ratio excluding Shaw financing. 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.

We use adjusted net debt excluding Shaw financing and debt leverage ratio excluding Shaw financing to analyze our debt and cash balances when excluding the effect of the Shaw senior note financing, as those senior notes were issued for the specific purpose of funding the Shaw Transaction, which has not yet closed. To calculate adjusted net debt excluding Shaw financing, we further adjust adjusted net debt to exclude the balances of the Shaw senior note financing, our restricted cash and cash equivalents balance, and the net debt derivative liabilities relating to the US dollar-denominated Shaw senior note financing, as well as the cumulative transaction costs we have paid to date on the Shaw senior note financing, the cumulative interest income we have earned on the restricted cash and cash equivalents balance, and the cumulative interest we have paid on the Shaw senior note financing.

Credit ratings
Below is a summary of the credit ratings on RCI's outstanding senior and subordinated notes and debentures (long-term) and US CP (short-term) as at December 31, 2022.

IssuanceS&P Global Ratings ServicesMoody'sFitchDBRS Morningstar
Corporate credit issuer default ratingBBB+ CreditWatch NegativeBaa1 under reviewBBB+ Rating Watch NegativeBBB (high), Under Review with Negative Implications
Senior unsecured debtBBB+ CreditWatch NegativeBaa1 under reviewBBB+ Rating Watch NegativeBBB (high), Under Review with Negative Implications
Subordinated debtBBB- CreditWatch NegativeBaa3 under reviewBBB- Rating Watch NegativeN/A 1
US commercial paperA-2 CreditWatch NegativeP-2 under reviewN/A 1N/A 1

1 We have not sought a rating from Fitch or DBRS Morningstar for our short-term obligations or from DBRS Morningstar for our subordinated debt.

As a result of our agreement to acquire Shaw and the related commitments in connection with the Shaw Transaction, each of these rating agencies has put our credit rating under review. We expect each of these rating agencies to complete their reviews upon closing of the Shaw Transaction. See "Shaw Transaction" for more information on our agreement with Shaw and the Shaw Transaction.

Outstanding common shares

 As at
December 31
As at
December 31
 20222021
   
Common shares outstanding 1  
Class A Voting Shares111,152,011111,153,411
Class B Non-Voting Shares393,773,306393,771,907
   
Total common shares504,925,317504,925,318
   
Options to purchase Class B Non-Voting Shares  
Outstanding options9,860,2086,494,001
Outstanding options exercisable3,440,8942,373,717

1 Holders of Class B Non-Voting Shares are entitled to receive notice of and to attend shareholder meetings; however, they are not entitled to vote at these meetings except as required by law or stipulated by stock exchanges. If an offer is made to purchase outstanding Class A Shares, there is no requirement under applicable law or our constating documents that an offer be made for the outstanding Class B Non-Voting Shares, and there is no other protection available to shareholders under our constating documents. If an offer is made to purchase both classes of shares, the offer for the Class A Shares may be made on different terms than the offer to the holders of Class B Non-Voting Shares.

Financial Risk Management

This section should be read in conjunction with "Financial Risk Management" in our 2021 Annual MD&A. We use derivative instruments to manage financial risks related to our business activities. We only use derivatives to manage risk and not for speculative purposes. We also manage our exposure to both fixed and fluctuating interest rates and had fixed the interest rate on 91.2% of our outstanding debt, including short-term borrowings, as at December 31, 2022 (December 31, 2021 - 89.3%).

Debt derivatives
We use cross-currency interest rate exchange agreements, forward cross-currency interest rate exchange 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, debentures, subordinated notes, lease liabilities, credit facility borrowings, and US CP borrowings. We typically designate the debt derivatives related to our senior notes, debentures, subordinated notes, and lease liabilities as hedges for accounting purposes against the foreign exchange risk or interest rate risk associated with specific issued and forecast debt instruments. Debt derivatives related to our US dollar-denominated notes due 2025 and our credit facility and US CP borrowings have not been designated as hedges for accounting purposes.

Credit facilities and US CP
Below is a summary of the debt derivatives we entered into and settled related to our credit facility borrowings and US CP program during the three and twelve months ended December 31, 2022 and 2021.

  Three months ended
December 31, 2022
  Twelve months ended
December 31, 2022
(In millions of dollars, except exchange rates)Notional
(US$)
Exchange
rate
Notional
(Cdn$)
 Notional
(US$)
Exchange
rate
Notional
(Cdn$)
        
Credit facilities       
Debt derivatives settled 4001.268507
Net cash received on settlement     9
        
US commercial paper program       
Debt derivatives entered1,4501.3541,963 6,7451.3028,781
Debt derivatives settled2,0331.3602,764 7,2921.3069,522
Net cash received on settlement  16   64


 Three months ended
December 31, 2021
  Twelve months ended
December 31, 2021
 
(In millions of dollars, except exchange rates)Notional
(US$)
Exchange
rate
Notional
(Cdn$)
  Notional
(US$)
Exchange
rate
Notional
(Cdn$)
 
        
Credit facilities       
Debt derivatives entered8001.2511,001  1,2001.2531,503 
Debt derivatives settled8001.2541,003  8001.2541,003 
Net cash paid on settlement  (2)   (2)
        
US commercial paper program       
Debt derivatives entered6121.255768  2,5681.2603,235 
Debt derivatives settled7441.259937  2,3121.2592,911 
Net cash received (paid) on settlement  1    (15)

As at December 31, 2022, we had nil and US$158 million notional amount of debt derivatives outstanding relating to our credit facility borrowings and US CP program (December 31, 2021 - US$400 million and US$704 million), respectively.

Senior and subordinated notes
Below is a summary of the debt derivatives we entered into related to senior and subordinated notes during the year ended December 31, 2022. We did not enter into or settle any debt derivatives related to senior and subordinated notes issued during the year ended December 31, 2021.

(In millions of dollars, except interest rates)   
  US$ Hedging effect
Effective datePrincipal/Notional
amount (US$)
Maturity
date
Coupon rate  Fixed hedged (Cdn$)
interest rate 1
 Equivalent (Cdn$)
       
2022 issuances      
February 11, 202275020825.250% 5.635%951
March 11, 2022 21,00020252.950% 2.991%1,283
March 11, 20221,30020273.200% 3.413%1,674
March 11, 20222,00020323.800% 4.232%2,567
March 11, 202275020424.500% 5.178%966
March 11, 20222,00020524.550% 5.305%2,564

Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.
The derivatives associated with our US$1 billion senior notes due 2025 have not been designated as hedges for accounting purposes.

As at December 31, 2022, we had US$16,100 million (December 31, 2021 - US$9,050 million) in US dollar-denominated senior notes, debentures, and subordinated notes, of which all of the associated foreign exchange risk had been hedged economically using debt derivatives.

Lease liabilities
Below is a summary of the debt derivatives we entered into and settled related to our outstanding lease liabilities for the three and twelve months ended December 31, 2022 and 2021.

 Three months ended December 31, 2022 Twelve months ended December 31, 2022
(In millions of dollars, except exchange rates)Notional
(US$)
Exchange
rate
Notional
(Cdn$)
 Notional
(US$)
Exchange
rate
Notional
(Cdn$)
        
Debt derivatives entered451.35661 1561.321206
Debt derivatives settled341.29444 1241.306162


 Three months ended December 31, 2021 Twelve months ended December 31, 2021
(In millions of dollars, except exchange rates)Notional
(US$)
Exchange
rate
Notional
(Cdn$)
 Notional
(US$)
Exchange
rate
Notional
(Cdn$)
        
Debt derivatives entered331.33344 1321.273168
Debt derivatives settled251.32033 811.333108

As at December 31, 2022, we had US$225 million notional amount of debt derivatives outstanding relating to our outstanding lease liabilities (December 31, 2021 - US$193 million) with terms to maturity ranging from January 2023 to December 2025 (December 31, 2021 - January 2022 to December 2024) at an average rate of $1.306/US$ (December 31, 2021 - $1.301/US$).

See "Mark-to-market value" for more information about our debt derivatives.

Expenditure derivatives
We use foreign currency forward contracts (expenditure derivatives) to manage the foreign exchange risk in our operations, designating them as hedges for accounting purposes for certain of our forecast operational and capital expenditures.

Below is a summary of the expenditure derivatives we entered into and settled during the three and twelve months ended December 31, 2022 and 2021.

 Three months ended December 31, 2022 Twelve months ended December 31, 2022
(In millions of dollars, except exchange rates)Notional
(US$)
Exchange
rate
Notional
(Cdn$)
 Notional
(US$)
Exchange
rate
Notional
(Cdn$)
        
Expenditure derivatives entered 8521.2511,066
Expenditure derivatives settled2251.298292 9601.2911,239


 Three months ended December 31, 2021 Twelve months ended December 31, 2021
(In millions of dollars, except exchange rates)Notional
(US$)
Exchange
rate
Notional
(Cdn$)
 Notional
(US$)
Exchange
rate
Notional
(Cdn$)
        
Expenditure derivatives entered1081.241134 4381.244545
Expenditure derivatives settled2251.360306 9601.3601,306

As at December 31, 2022, we had US$960 million notional amount of expenditure derivatives outstanding (December 31, 2021 - US$1,068 million) with terms to maturity ranging from January 2023 to December 2023 (December 31, 2021 - January 2022 to December 2023) at an average rate of $1.250/US$ (December 31, 2021 - $1.287/US$).

See "Mark-to-market value" for more information about our expenditure derivatives.

Equity derivatives
We use total return swaps (equity derivatives) to hedge the market price appreciation risk of the Class B Non-Voting Shares granted under our stock-based compensation programs. The equity derivatives have not been designated as hedges for accounting purposes.

This quarter, we entered into 0.5 million equity derivatives with a weighted average price of $59.18.

As at December 31, 2022, we had equity derivatives outstanding for 5.5 million (December 31, 2021 - 5.0 million) Class B Non-Voting Shares with a weighted average price of $53.65 (December 31, 2021 - $53.10).

During the year ended December 31, 2022, 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 2023 (from April 2022).

See "Mark-to-market value" for more information about our equity derivatives.

Cash settlements on debt derivatives and forward contracts
Below is a summary of the net proceeds (payments) on settlement of debt derivatives and forward contracts during the three and twelve months ended December 31, 2022 and 2021.

 Three months ended December 31, 2022 Twelve months ended December 31, 2022 
(In millions of dollars, except exchange rates)US$
settlements
Exchange
rate
Cdn$
settlements
 US$
settlements
 Exchange
rate
Cdn$
settlements
 
        
Credit facilities     9 
US commercial paper program  16   64 
Senior and subordinated notes     (75)
Forward starting cross-currency swaps     43 
Interest rate derivatives (Cdn$)     113 
Interest rate derivatives (US$) (129)1.279(165)
        
Net proceeds (payments) on settlement of debt derivatives and forward contracts  16   (11)


 Three months ended December 31, 2021  Twelve months ended December 31, 2021 
(In millions of dollars, except exchange rates)Cdn$ settlements  Cdn$ settlements 
    
Credit facilities(2) (2)
US commercial paper program1  (15)
Interest rate derivatives (Cdn$)9  9 
    
Net proceeds (payments) on settlement of debt derivatives and forward contracts8  (8)

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, 2022 
(In millions of dollars, except exchange rates)Notional
amount
(US$)
Exchange
rate
Notional
amount
(Cdn$)
Fair value 
(Cdn$)
 
Debt derivatives accounted for as cash flow hedges:    
As assets7,8341.17189,1801,330 
As liabilities7,4911.30009,738(414)
Debt derivatives not accounted for as hedges:    
As assets1,1731.29301,51772 
Net mark-to-market debt derivative asset   988 
Expenditure derivatives accounted for as cash flow hedges:    
As assets9601.25001,20094 
Net mark-to-market expenditure derivative asset   94 
Equity derivatives not accounted for as hedges:    
As assets29554 
Net mark-to-market equity derivative asset   54 
     
Net mark-to-market asset   1,136 


 As at December 31, 2021 
(In millions of dollars, except exchange rates)Notional
amount
(US$)
Exchange
rate
Notional
amount
(Cdn$)
Fair value 
(Cdn$)
 
Debt derivatives accounted for as cash flow hedges:    
As assets5,8591.13696,6611,453 
As liabilities5,3831.30257,011(343)
Short-term debt derivatives not accounted for as hedges:    
As assets1,1041.25781,38911 
Net mark-to-market debt derivative asset   1,121 
Interest rate derivatives accounted for as cash flow hedges:    
As assets (Cdn$)3,25040 
As liabilities (Cdn$)500(6)
As liabilities (US$)2,000(277)
Net mark-to-market interest rate derivative liability   (243)
Expenditure derivatives accounted for as cash flow hedges:    
As assets4381.245354511 
As liabilities6301.3151829(30)
Net mark-to-market expenditure derivative liability   (19)
Equity derivatives not accounted for as hedges:    
As assets26536 
     
Net mark-to-market asset   895 

Regulatory Developments

The following are the significant regulatory developments that occurred in the fourth quarter.

ISED Canada review of the Shaw Transaction
On October 25, 2022, the Minister for Innovation, Science and Industry as an administrative matter denied our initial March 2021 request to transfer Freedom's spectrum licences to Rogers. In contemplation of the proposed Freedom Transaction, the Minister set out certain conditions (which Quebecor announced its intention to accept) before the Minister would consider approving a transfer of Freedom's spectrum licences to Videotron.

On December 31, 2022, the Minister indicated he would not render his decision on the transfer of Freedom’s spectrum licences to Videotron until there is clarity on the ongoing legal process arising from the Tribunal’s decision (see "Competition Bureau review of the Shaw Transaction" below). On January 24, 2023, the Minister acknowledged the Federal Court of Appeal's decision and stated he would issue a decision in due course. The proposed Freedom Transaction continues to be reviewed by ISED Canada.

Competition Bureau review of the Shaw Transaction
The Tribunal proceedings in respect of the Shaw Transaction commenced on November 7, 2022 and final oral arguments were completed on December 14, 2022.

On December 31, 2022, the Tribunal issued an order dismissing the Bureau’s application, an initial summary of which was released on December 29, 2022. On December 30, 2022 (prior to the issuance of the reasons for the Tribunal’s decision), the Bureau advised Rogers, Shaw, and Quebecor of its intention to appeal the decision to the Federal Court of Appeal and to seek an injunction to prevent the Shaw Transaction from closing pending the disposition of that appeal. The Federal Court of Appeal scheduled a one-day hearing on January 24, 2023 and issued an order staying the Tribunal’s decision and the closing of the Shaw Transaction until a decision on the appeal could be rendered.

On January 24, 2023, the hearing was held, during which the Federal Court of Appeal issued a ruling from the bench dismissing the Bureau's appeal and upholding the Tribunal's decision. On January 24, 2023, following the Federal Court of Appeal's decision, the Bureau announced it would not be pursuing a further appeal in the case.

Key Performance Indicators

We measure the success of our strategy using a number of key performance indicators that are defined and discussed in our 2021 Annual MD&A and this earnings release. We believe these key performance indicators allow us to appropriately measure our performance against our operating strategy and against the results of our peers and competitors. The following key performance indicators, some of which are supplementary financial measures (see "Non-GAAP and Other Financial Measures"), are not measurements in accordance with IFRS. They include:

  • subscriber counts;
    • Wireless;
    • Cable; and
    • homes passed (Cable);
  • Wireless subscriber churn (churn);
  • Wireless mobile phone average revenue per user
    (ARPU);
  • Cable average revenue per account (ARPA);
  • Cable customer relationships;
  • Cable market penetration (penetration);
  • capital intensity; and
  • total service revenue.

Effective January 1, 2022, we are disclosing mobile phone subscribers in Wireless, which represent devices with voice-only or voice-and-data plans. Our previous definition included devices on data-only plans and customers who subscribe to our wireless home phone service. As a result, our definition of ARPU has also shifted to mobile phone ARPU. We also no longer report blended ABPU given the significant adoption of our wireless device financing program resulting in this metric being less meaningful.

In Cable, we have adjusted our definition of an Internet subscriber such that it only includes retail Internet subscribers, representing customers who have Internet service installed and operating, and are being billed directly by us. Our previous definition included third-party Internet access subscribers and Smart Home Monitoring subscribers. We also began reporting Video (consisting of Ignite TV and legacy Television subscribers), Smart Home Monitoring, and Home Phone subscribers in separate categories.

We have updated our 2021 comparative subscriber results for the impact of these changes. Our updated definitions are as follows:

Subscriber counts
Subscriber count (Wireless)

  • A wireless subscriber is represented by each identifiable telephone number.
  • We report wireless subscribers in two categories: postpaid mobile phone and prepaid mobile phone. Postpaid and prepaid include voice-only subscribers and subscribers with service plans including both voice and data.
  • Usage and overage charges for postpaid subscribers are billed a month in arrears. Prepaid subscribers cannot incur usage and/or overage charges in excess of their plan limits or account balance.
  • Wireless prepaid subscribers are considered active for a period of 90 days from the date of their last revenue-generating usage.

Subscriber count (Cable)

  • Cable retail Internet, Video, and Smart Home Monitoring subscribers are represented by a dwelling unit; Cable Home Phone subscribers are represented by line counts.
  • When there is more than one unit in a single dwelling, such as an apartment building, each tenant with cable service is counted as an individual subscriber, whether the service is invoiced separately or included in the tenant's rent. Institutional units, such as hospitals or hotels, are each considered one subscriber.
  • Cable retail Internet, Video, Smart Home Monitoring, and Home Phone subscribers include only those subscribers who have service installed and operating, and who are being billed accordingly.
  • Subscriber counts exclude certain business services delivered over our fibre network and data centre infrastructure, and circuit-switched local and long distance voice services and legacy data services where access is delivered using leased third-party network elements and tariffed ILEC services.

Mobile phone average revenue per user (Wireless)
Mobile phone ARPU helps us identify trends and measure our success in attracting and retaining higher-value subscribers. Mobile phone ARPU is a supplementary financial measure. See "Non-GAAP and Other Financial Measures" for an explanation as to the composition of this measure.

Non-GAAP and Other Financial Measures

We use the following "non-GAAP financial measures" and other "specified financial measures" (each within the meaning of applicable Canadian securities law). These are reviewed regularly by management and the Board in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. Some or all of these measures may also be used by investors, lending institutions, and credit rating agencies as indicators of our operating performance, of our ability to incur and service debt, and as measurements to value companies in the telecommunications sector. These are not standardized measures under IFRS, so may not be reliable ways to compare us to other companies.

Non-GAAP financial measures
Specified financial measureHow it is usefulHow we calculate itMost directly
comparable
IFRS financial
measure
Adjusted net
income
 To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.Net income
add (deduct)
restructuring, acquisition and other; loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; loss on bond forward derivatives; and income tax adjustments on these items, including adjustments as a result of legislative changes.
Net income
Free cash flow excluding Shaw financing To show how much cash we generate from our operations that is available to repay debt and reinvest in our company excluding the effect of the Shaw senior note financing, as it was issued for a specific purpose and does not contribute to our core business operations.Cash provided by operating activities
add (deduct)
(capital expenditures); (interest on borrowings, net and capitalized interest); interest paid; restructuring, acquisition, and other; (program rights amortization); change in net operating assets and liabilities; interest on Shaw senior note financing; and (interest earned on restricted cash and cash equivalents).
Cash provided
by operating
activities
Adjusted net debt excluding Shaw financing We believe this helps investors and analysts analyze the components of our debt and cash balances while taking into account the impact of debt derivatives on our US dollar-denominated debt, excluding the cumulative effect of the Shaw senior note financing as it was issued for the specific purpose of funding the Shaw Transaction, which has not yet closed.Total long-term debt
add (deduct)
current portion of long-term debt; deferred transaction costs and discounts; net debt derivative (assets) liabilities associated with issued debt; credit risk adjustment related to net debt derivatives; current portion of lease liabilities; lease liabilities; bank advances (cash and cash equivalents); short-term borrowings; and (restricted cash and cash equivalents);
add (deduct)
(Shaw senior note financing); restricted cash and cash equivalents; net debt derivative assets (liabilities) related to Shaw senior note financing; (deferred transaction costs paid related to Shaw senior note financing); interest income on restricted cash and cash equivalents; and (interest paid on Shaw senior note financing).
Long-term debt
Capital expenditures excluding Shaw To show how much capital investment we make to enhance our core business assets, excluding the effect of integration-related capital expenditures in preparation for the Shaw Transaction, as they are for a specific purpose and do not yet contribute to our core business operations.Capital expenditures
deduct
capital expenditures related to Shaw integration activities.
Capital expenditures
Free cash flow excluding Shaw To show how much cash we generate from our operations that is available to repay debt and reinvest in our company excluding the effect of the Shaw senior note financing and integration-related capital expenditures in preparation for the Shaw Transaction, as they are for a specific purpose and do not yet contribute to our core business operations.Cash provided by operating activities
add (deduct)
(capital expenditures); (interest on borrowings, net and capitalized interest); interest paid; restructuring, acquisition, and other; (program rights amortization); change in net operating assets and liabilities; interest on Shaw senior note financing; (interest earned on restricted cash and cash equivalents); and capital expenditures related to Shaw integration activities.
Cash provided
by operating
activities


Non-GAAP ratios
Specified financial measureHow it is usefulHow we calculate it
Adjusted basic
earnings per
share

Adjusted diluted
earnings per
share
 To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.Adjusted net income
divided by
basic weighted average shares outstanding.

Adjusted net income including the dilutive effect of stock-based compensation
divided by
diluted weighted average shares outstanding.
Debt leverage ratio excluding Shaw financing We believe this helps investors and analysts analyze our ability to service our debt obligations, excluding the effect of specific Shaw senior note financing as it was issued for a specific purpose and does not reflect our ability to service our core business debt obligations.Adjusted net debt excluding Shaw financing (defined above)
divided by
12-month trailing adjusted EBITDA.


Total of segments measures
Specified financial measureMost directly comparable IFRS financial measure
Adjusted EBITDANet income


Capital management measures
Specified financial measureHow 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.


Supplementary financial measures
Specified financial measureHow we calculate it
Adjusted EBITDA marginAdjusted EBITDA
divided by
revenue.
Wireless mobile phone average revenue per user (ARPU)Wireless service revenue
divided by
average total number of Wireless mobile phone subscribers for the relevant period.
Cable average revenue per account (ARPA)Cable service revenue
divided by
average total number of customer relationships for the relevant period.
Capital intensityCapital expenditures
divided by
revenue.

Reconciliation of capital expenditures excluding Shaw

 Three months ended December 31 Twelve months ended December 31
(In millions of dollars)2022 2021 2022 2021
      
Capital expenditures776 846 3,075 2,788
Deduct:     
Capital expenditures related to Shaw integration activities(11) (42)
      
Capital expenditures excluding Shaw765 846 3,033 2,788

Reconciliation of adjusted EBITDA

 Three months ended December 31  Twelve months ended December 31
(In millions of dollars)2022 2021  2022 2021
      
Net income508 405  1,680 1,558
Add:     
Income tax expense188 152  609 569
Finance costs287 218  1,233 849
Depreciation and amortization648 658  2,576 2,585
EBITDA1,631 1,433  6,098 5,561
Add (deduct):     
Other (income) expense(10)(12) (15)2
Restructuring, acquisition and other58 101  310 324
      
Adjusted EBITDA1,679 1,522  6,393 5,887

Reconciliation of adjusted net income

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)2022 2021  2022 2021 
      
Net income508 405  1,680 1,558 
Add (deduct):     
Restructuring, acquisition and other58 101  310 324 
Income tax impact of above items(12)(20) (75)(79)
      
Adjusted net income554 486  1,915 1,803 

Reconciliation of free cash flow, free cash flow excluding Shaw financing, and free cash flow excluding Shaw

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)2022 2021  2022 2021 
      
Cash provided by operating activities1,145 1,147  4,493 4,161 
Add (deduct):     
Capital expenditures(776)(846) (3,075)(2,788)
Interest on borrowings, net and capitalized interest(243)(183) (1,090)(728)
Interest paid, net287 231  1,054 802 
Restructuring, acquisition and other58 101  310 324 
Program rights amortization(12)(22) (61)(68)
Change in net operating assets and liabilities201 50  152 (37)
Other adjustments 1(25)(10) (10)5 
      
Free cash flow635 468  1,773 1,671 
Add (deduct):     
Interest on Shaw senior note financing139   447  
Interest earned on restricted cash and cash equivalents(130)  (235) 
      
Free cash flow excluding Shaw financing644 468  1,985 1,671 
Add:     
Capital expenditures related to Shaw integration activities11   42  
      
Free cash flow excluding Shaw655 468  2,027 1,671 

1 Other adjustments consists of post-employment benefit contributions, net of expense, cash flows relating to other operating activities, and other (income) expense from our financial statements.

Other Information

Consolidated financial results - quarterly summary
Below is a summary of our consolidated results for the past eight quarters.

 2022 2021
(In millions of dollars, except per share amounts)Q4
 Q3 Q2 Q1  Q4 Q3 Q2 Q1 
Revenue         
Wireless2,578 2,267 2,212 2,140  2,415 2,215 2,064 2,074 
Cable1,019 975 1,041 1,036  1,023 1,016 1,013 1,020 
Media606 530 659 482  516 473 546 440 
Corporate items and intercompany eliminations(37)(29)(44)(39) (35)(38)(41)(46)
Total revenue4,166 3,743 3,868 3,619  3,919 3,666 3,582 3,488 
Total service revenue 13,436 3,230 3,443 3,196  3,232 3,149 3,131 3,021 
          
Adjusted EBITDA         
Wireless1,173 1,093 1,118 1,085  1,086 1,107 1,008 1,013 
Cable522 465 520 551  518 516 492 487 
Media57 76 2 (66) (26)33 (75)(59)
Corporate items and intercompany eliminations(73)(51)(48)(31) (56)(56)(51)(50)
Adjusted EBITDA1,679 1,583 1,592 1,539  1,522 1,600 1,374 1,391 
Deduct (add):         
Depreciation and amortization648 644 638 646  658 642 647 638 
Restructuring, acquisition and other58 85 71 96  101 63 115 45 
Finance costs287 331 357 258  218 207 206 218 
Other (income) expense(10)19 (18)(6) (12)20 (7)1 
Net income before income tax expense696 504 544 545  557 668 413 489 
Income tax expense188 133 135 153  152 178 111 128 
Net income508 371 409 392  405 490 302 361 
          
Earnings per share:         
Basic$1.01 $0.73 $0.81 $0.78  $0.80 $0.97 $0.60 $0.71 
Diluted$1.00 $0.71 $0.76 $0.77  $0.80 $0.94 $0.60 $0.70 
          
Net income508 371 409 392  405 490 302 361 
Add (deduct):         
Restructuring, acquisition and other58 85 71 96  101 63 115 45 
Income tax impact of above items(12)(20)(17)(26) (20)(17)(30)(12)
Adjusted net income554 436 463 462  486 536 387 394 
          
Adjusted earnings per share:         
Basic$1.10 $0.86 $0.92 $0.91  $0.96 $1.06 $0.77 $0.78 
Diluted$1.09 $0.84 $0.86 $0.91  $0.96 $1.03 $0.76 $0.77 
          
Capital expenditures776 872 778 649  846 739 719 484 
Cash provided by operating activities1,145 1,216 1,319 813  1,147 1,319 1,016 679 
Free cash flow635 279 344 515  468 507 302 394 
Free cash flow excluding Shaw financing644 347 451 543  468 507 302 394 

1 As defined. See "Key Performance Indicators".

Supplementary Information

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

 Three months ended
December 31
  Twelve months ended
December 31
 2022 2021  2022 2021
      
Revenue4,166 3,919  15,396 14,655
      
Operating expenses:     
Operating costs2,487 2,397  9,003 8,768
Depreciation and amortization648 658  2,576 2,585
Restructuring, acquisition and other58 101  310 324
Finance costs287 218  1,233 849
Other (income) expense(10)(12) (15)2
      
Income before income tax expense696 557  2,289 2,127
Income tax expense188 152  609 569
      
Net income for the period508 405  1,680 1,558
      
Earnings per share:     
Basic$1.01 $0.80  $3.33 $3.09
Diluted$1.00 $0.80  $3.32 $3.07

Rogers Communications Inc.
Interim Condensed Consolidated Statements of Financial Position
(In millions of dollars, unaudited)

 As at
December 31
As at
December 31
 20222021
   
Assets  
Current assets:  
Cash and cash equivalents463715
Restricted cash and cash equivalents12,837
Accounts receivable4,1843,847
Inventories438535
Current portion of contract assets111115
Other current assets561497
Current portion of derivative instruments689120
Total current assets19,2835,829
   
Property, plant and equipment15,57414,666
Intangible assets12,25112,281
Investments2,0882,493
Derivative instruments8611,431
Financing receivables886854
Other long-term assets681385
Goodwill4,0314,024
   
Total assets55,65541,963
   
Liabilities and shareholders' equity  
Current liabilities:  
Short-term borrowings2,9852,200
Accounts payable and accrued liabilities3,7223,416
Income tax payable115
Other current liabilities252607
Contract liabilities400394
Current portion of long-term debt1,8281,551
Current portion of lease liabilities362336
Total current liabilities9,5498,619
   
Provisions5350
Long-term debt29,90517,137
Lease liabilities1,6661,621
Other long-term liabilities738565
Deferred tax liabilities3,6523,439
Total liabilities45,56331,431
   
Shareholders' equity10,09210,532
   
Total liabilities and shareholders' equity55,65541,963

Rogers Communications Inc.
Interim Condensed Consolidated Statements of Cash Flows
(In millions of dollars, unaudited)

 Three months ended December 31  Twelve months ended December 31 
 2022 2021  2022 2021 
Operating activities:     
Net income for the period508 405  1,680 1,558 
Adjustments to reconcile net income to cash provided by operating activities:     
Depreciation and amortization648 658  2,576 2,585 
Program rights amortization12 22  61 68 
Finance costs287 218  1,233 849 
Income tax expense188 152  609 569 
Post-employment benefits contributions, net of expense47 42  19 (5)
Other(32)(44) (24)2 
Cash provided by operating activities before changes in net operating assets and liabilities, income taxes paid, and interest paid1,658 1,453  6,154 5,626 
Change in net operating assets and liabilities(201)(50) (152)37 
Income taxes paid(25)(25) (455)(700)
Interest paid, net(287)(231) (1,054)(802)
      
Cash provided by operating activities1,145 1,147  4,493 4,161 
      
Investing activities:     
Capital expenditures(776)(846) (3,075)(2,788)
Additions to program rights(8)(13) (47)(54)
Changes in non-cash working capital related to capital expenditures and intangible assets(222)12  (200)67 
Acquisitions and other strategic transactions, net of cash acquired (2,661) (9)(3,404)
Other(5)16  68 46 
      
Cash used in investing activities(1,011)(3,492) (3,263)(6,133)
      
Financing activities:     
Net (repayment of) proceeds received from short-term borrowings(38)(172) 707 971 
Net issuance of long-term debt 2,000  12,711 550 
Net proceeds (payments) on settlement of debt derivatives and forward contracts16 8  (11)(8)
Transaction costs incurred (20) (726)(31)
Principal payments of lease liabilities(83)(75) (316)(269)
Dividends paid(253)(253) (1,010)(1,010)
      
Cash (used in) provided by financing activities(358)1,488  11,355 203 
      
Change in cash and cash equivalents and restricted cash and cash equivalents(224)(857) 12,585 (1,769)
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period13,524 1,572  715 2,484 
      
Cash and cash equivalents and restricted cash and cash equivalents, end of period13,300 715  13,300 715 
      
Cash and cash equivalents463 715  463 715 
Restricted cash and cash equivalents12,837   12,837  
      
Cash and cash equivalents and restricted cash and cash equivalents, end of period13,300 715  13,300 715 

Change in net operating assets and liabilities

 Three months ended December 31  Twelve months ended December 31 
(In millions of dollars)2022 2021  2022 2021 
      
Accounts receivable, excluding financing receivables(285)(125) (201)(78)
Financing receivables(315)(306) (162)(840)
Contract assets1 36  8 417 
Inventories(112)(139) 98 (56)
Other current assets26 21  25 13 
Accounts payable and accrued liabilities380 424  36 556 
Contract and other liabilities104 39  44 25 
      
Total change in net operating assets and liabilities(201)(50) (152)37 

Investments

 As at
December 31
As at
December 31
(In millions of dollars)20222021
   
Investments in:  
Publicly traded companies1,2001,581
Private companies5353
Investments, measured at fair value through other comprehensive income1,2531,634
Investments, associates and joint ventures835859
   
Total investments2,0882,493

Long-term debt

   Principal
amount
Interest
rate
As at
December 31
 As at
December 31
 
(In millions of dollars, except interest rates)Due date 2022 2021 
       
Senior notes2022US750Floating 951 
Senior notes2022 6004.000% 600 
Senior notes2023US5003.000%677 634 
Senior notes2023US8504.100%1,151 1,078 
Senior notes2024 6004.000%600 600 
Senior notes 12025US1,0002.950%1,354  
Senior notes 12025 1,2503.100%1,250  
Senior notes2025US7003.625%948 886 
Senior notes2026US5002.900%677 634 
Senior notes2027 1,5003.650%1,500 1,500 
Senior notes 12027US1,3003.200%1,761  
Senior notes 12029 1,0003.750%1,000  
Senior notes2029 1,0003.250%1,000 1,000 
Senior notes 12032US2,0003.800%2,709  
Senior notes 12032 1,0004.250%1,000  
Senior debentures 22032US2008.750%271 254 
Senior notes2038US3507.500%474 444 
Senior notes2039 5006.680%500 500 
Senior notes2040 8006.110%800 800 
Senior notes2041 4006.560%400 400 
Senior notes 12042US7504.500%1,016  
Senior notes2043US5004.500%677 634 
Senior notes2043US6505.450%880 823 
Senior notes2044US1,0505.000%1,422 1,331 
Senior notes2048US7504.300%1,016 951 
Senior notes2049US1,2504.350%1,693 1,585 
Senior notes2049US1,0003.700%1,354 1,268 
Senior notes 12052US2,0004.550%2,709  
Senior notes 12052 1,0005.250%1,000  
Subordinated notes 32081 2,0005.000%2,000 2,000 
Subordinated notes 32082US7505.250%1,016  
     32,855 18,873 
Deferred transaction costs and discounts    (1,122)(185)
Less current portion    (1,828)(1,551)
       
Total long-term debt    29,905 17,137 

1 Included in Shaw senior note financing.
2 Senior debentures originally issued by Rogers Cable Inc. which are unsecured obligations of RCI and for which RCCI was an unsecured guarantor as at December 31, 2022 and December 31, 2021.
3 The subordinated notes can be redeemed at par on the five-year anniversary from issuance dates of December 2021 and February 2022 or on any subsequent interest payment date.

About Forward-Looking Information

This earnings release includes "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws (collectively, "forward-looking information"), and assumptions about, among other things, our business, operations, and financial performance and condition approved by our management on the date of this earnings release. This forward-looking information and these assumptions include, but are not limited to, statements about our objectives and strategies to achieve those objectives, and about our beliefs, plans, expectations, anticipations, estimates, or intentions.

Forward-looking information:

  • typically includes words like could, expect, may, anticipate, assume, believe, intend, estimate, plan, project, guidance, outlook, target, and similar expressions;
  • includes conclusions, forecasts, and projections that are based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
  • was approved by our management on the date of this earnings release.

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

  • revenue;
  • total service revenue;
  • adjusted EBITDA;
  • capital expenditures;
  • cash income tax payments;
  • free cash flow;
  • dividend payments;
  • the growth of new products and services;
  • expected growth in subscribers and the services to which they subscribe;
  • the cost of acquiring and retaining subscribers and deployment of new services;
  • continued cost reductions and efficiency improvements;
  • our debt leverage ratio;
  • statements relating to plans we have implemented in response to COVID-19 and its impact on us;
  • the expected timing and completion of the Shaw Transaction and the Freedom Transaction, including the associated processes and timelines to obtain the Key Regulatory Approvals;
  • the benefits expected to result from the Shaw Transaction, including corporate, operational, scale, and other synergies, and their anticipated timing;
  • the terms and conditions of the Freedom Transaction; and
  • all other statements that are not historical facts.

Specific forward-looking information included in this document includes, but is not limited to, information and statements under "2023 Outlook" relating to our 2023 consolidated guidance on total service revenue, adjusted EBITDA, capital expenditures excluding Shaw, and free cash flow excluding Shaw. All other statements that are not historical facts are forward-looking statements.

Our conclusions, forecasts, and projections are based on a number of estimates, expectations, assumptions, and other factors, including, among others:

  • general economic and industry growth rates;
  • currency exchange rates and interest rates;
  • product pricing levels and competitive intensity;
  • subscriber growth;
  • pricing, usage, and churn rates;
  • changes in government regulation;
  • technology and network deployment;
  • availability of devices;
  • timing of new product launches;
  • content and equipment costs;
  • the integration of acquisitions;
  • industry structure and stability; and,
  • the impact of COVID-19 on our operations, liquidity, financial condition, or results.

Except as otherwise indicated, this earnings release and our forward-looking information do not reflect the potential impact of any non-recurring or other special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations, or other transactions that may be considered or announced or may occur after the date on which the statement containing the forward-looking information is made.

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

  • regulatory changes;
  • technological changes;
  • economic, geopolitical, and other conditions affecting commercial activity;
  • unanticipated changes in content or equipment costs;
  • changing conditions in the entertainment, information, and communications industries;
  • sports-related work stoppages or cancellations and labour disputes;
  • the integration of acquisitions;
  • litigation and tax matters;
  • the level of competitive intensity;
  • the emergence of new opportunities;
  • external threats, such as epidemics, pandemics, and other public health crises, natural disasters, the effects of climate change, or cyberattacks, among others;
  • risks related to the Shaw Transaction and the Freedom Transaction, including the timing, receipt, and conditions of the Key Regulatory Approvals; satisfaction of the various conditions to close the Shaw Transaction and the Freedom Transaction; financing the Shaw Transaction; the anticipated benefits of the Shaw Transaction and successful integration of the businesses and operations of Rogers and Shaw;
  • new interpretations and new accounting standards from accounting standards bodies; and
  • the other risks outlined in "Risks and Uncertainties Affecting our Business" in our 2021 Annual MD&A and "Updates to Risks and Uncertainties" in our third quarter MD&A.

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

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

Key assumptions underlying our full-year 2023 guidance
Our 2023 guidance ranges presented in "2023 Outlook" are based on many assumptions including, but not limited to, the following material assumptions for the full-year 2023:

  • continued competitive intensity in all segments in which we operate consistent with levels experienced in 2022;
  • no significant additional legal or regulatory developments, other shifts in economic conditions, or macro changes in the competitive environment affecting our business activities;
  • Wireless customers continue to adopt, and upgrade to, higher-value smartphones at similar rates in 2023 compared to 2022;
  • overall wireless market penetration in Canada grows in 2023 at a similar rate as in 2022;
  • continued subscriber growth in Internet;
  • declining Television subscribers, including the impact of customers migrating to Ignite TV from our legacy product, as subscription streaming services and other over-the-top providers continue to grow in popularity;
  • in Media, continued growth in sports and relative stability in other traditional media businesses;
  • no significant sports-related work stoppages or cancellations will occur;
  • with respect to capital expenditures:
    • we continue to invest to ensure we have competitive wireless and cable networks through (i) expanding our 5G wireless network and (ii) upgrading our hybrid fibre-coaxial network to lower the number of homes passed per node, utilize the latest technologies, and deliver an even more reliable customer experience; and
    • we continue to make expenditures related to our Home roadmap in 2023 and we make progress on our service footprint expansion projects;
  • a substantial portion of our 2023 US dollar-denominated expenditures is hedged at an average exchange rate of $1.25/US$;
  • key interest rates remain relatively stable throughout 2023; and
  • we retain our investment-grade credit ratings.

Before making an investment decision
Before making any investment decisions and for a detailed discussion of the risks, uncertainties, and environment associated with our business, its operations, and its financial performance and condition, fully review the "Updates to Regulatory Developments" section in this earnings release and fully review the sections in our 2021 Annual MD&A entitled "Regulation in Our Industry" and "Risk Management", as well as our various other filings with Canadian and US securities regulators, which can be found at sedar.com and sec.gov, respectively. Information on or connected to sedar.com, sec.gov, our website, or any other website referenced in this document is not part of or incorporated into this earnings release.


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