MANAGEMENT’S DISCUSSION AND ANALYSIS
Normal Course Issuer Bid Share Purchases
In February 2013, we renewed our normal course issuer bid for our
Class B Non-Voting shares for another 12-month period. This allowed
us to purchase up to the lesser of 35.8 million Class B Non-Voting
shares and the number of Class B Non-Voting shares that can be
purchased by Rogers under the normal course issuer bid for a total
purchase price of $500 million during a twelve-month period
commencing February 25, 2013 and ending February 24, 2014.
During 2013 we purchased 546,674 Class B Non-Voting shares for
cancellation under the NCIB for a purchase price of $22 million, all of
which were made through the facilities of the TSX in June 2013.
During 2012 we purchased 9,637,230 Class B Non-Voting shares for
cancellation under the NCIB for a purchase price of $350 million.
In February 2014, we filed a notice with the TSX of our intention to
renew our normal course issuer bid for our Class B Non-Voting shares
for another year. Subject to acceptance by the TSX, this notice gives us
the right to buy up to an aggregate $500 million or 35,780,234 Class B
Non-Voting shares of RCI, whichever is less, on the TSX, the NYSE and/
or alternate trading systems any time between February 25, 2014 and
February 24, 2015. The number of Class B Non-Voting shares we
actually buy under the normal course issuer bid, if any, and when we
buy them, will depend upon our evaluation of market conditions, stock
prices, our cash position, alternative uses of cash and other factors.
Dividends
In 2013, we declared and paid dividends on each of our outstanding
Class A Voting and Class B Non-Voting shares. We paid $876 million in
cash dividends, an increase of $73 million from 2012. See “Dividend
and Share Information”.
Shelf Prospectuses
Our two shelf prospectuses expired in January 2014. One shelf
prospectus qualified the public offering of our debt securities in each of
the provinces of Canada (Canadian Shelf) and the other shelf
prospectus (together with a corresponding registration statement filed
with the US Securities and Exchange Commission) qualified the public
offering of our debt securities in the United States and Ontario (US
Shelf). We issued an aggregate of US$2.5 billion of debt securities
under the US Shelf during 2013 and, in 2012, we issued an aggregate
of $1.1 billion of debt securities under the Canadian Shelf. We intend
to replace these expired shelf prospectuses with a new Canadian Shelf,
qualifying up to $4 billion of debt securities, and a new US Shelf,
qualifying up to US$4 billion of debt securities. We have no immediate
intention to offer securities pursuant to either of these new shelf
prospectuses. The notice set forth in this paragraph does not constitute
an offer of any securities for sale or an offer to sell or the solicitation of
an offer to buy any securities.
Pre-tax and After-tax Free Cash Flow
Years ended December 31
(In millions of dollars) 2013 2012 % Chg
Adjusted operating profit1 $ 4,993 $ 4,834 3
Property, plant and equipment expenditures (2,240) (2,142) 5
Interest on long-term debt, net of capitalization (709) (663) 7
Pre-tax free cash flow1 2,044 2,029 1
Cash income taxes (496) (380) 31
After-tax free cash flow1 $ 1,548 $ 1,649 (6)
1 Pre-tax free cash flow, after-tax cash flow and adjusted operating profit are non-
GAAP measures and should not be considered as a substitute or alternative for GAAP
measures. They are not defined terms under IFRS, and do not have standard
meanings, so may not be a reliable way to compare us to other companies. See “Non-
GAAP Measures” for information about these measures, including how we calculate
them.
Pre-tax cash flow was up 1% this year compared to last year due to
higher adjusted operating profit, partially offset by higher additions to
property, plant and equipment and higher interest on our long-term
debt. After-tax free cash flow was 6 percent lower than last year
because of higher cash income taxes.