Rogers Communications Reports Fourth Quarter 2023 Results; Announces 2024 Financial Guidance
*Rogers reports record 2023 results driven by strong execution on Shaw acquisition combined with industry-leading performance as more Canadians are choosing Rogers than any other carrier for second straight year**Rogers delivers industry-leading 2023 financial results led by strong execution by entire team*
· Service revenue of $16.8 billion, up 27%
· Adjusted EBITDA^1 of $8.6 billion, up 34%
· Free cash flow^1 of $2.4 billion, up 36%
· 2023 postpaid mobile phone nets adds of 674,000, up 24%
· Ended year with 11.6 million wireless customers and 4.2 million retail Internet customers from coast to coast*Q4 results reflect industry-leading growth in Wireless and Cable operations*
· Total service revenue up 30%; adjusted EBITDA up 39%
· Wireless service revenue up 9%; adjusted EBITDA up 10%
· Q4 postpaid mobile phone net adds of 184,000; growth in pro forma Wireless blended ARPU of 1% (for Shaw Mobile); down 1% as reported
· Cable service revenue up 94%; adjusted EBITDA up 113%
· Q4 retail Internet net additions of 20,000, more than double last year*Shaw integration and synergy targets continue ahead of plan*
· Industry-leading Cable margins of 56%, up from 51% last year
· Synergies realized since closing now at $375 million; exited Q4 at $750 million run rate - six months ahead of plan
· Wireless and wireline market share gains accelerating in the West supported by largest and best 5G network and only coast-to-coast Internet network*Launched transformative firsts in technology for Canadians *
· Agreements for satellite-to-mobile coverage with SpaceX and Lynk Global; made Canada's first test call
· Satellite-connected wildfire sensors and AI cameras connected to Rogers' 5G network for early wildfire detection
· Essential 5G cellular connectivity on Highway 16 in B.C. providing key lifeline and improved public safety
· First carrier to activate 5G services for all riders at all TTC subway stations and busiest tunnels
*Substantially reduced debt leverage ratio to 4.7 times at year-end, down over half a turn on synergy cost reductions, earnings growth, proceeds from asset sales, and commencing the payback of acquisition-related debt*
*Delivered on 2023 financial guidance; 2024 guidance targets robust growth*
· Total service revenue growth range of 8% to 10%
· Adjusted EBITDA growth range of 12% to 15%
· Capital expenditures of $3.8 billion to $4.0 billion
· Free cash flow of $2.9 billion to $3.1 billion, compared to $2.4 billion in 2023
TORONTO, Feb. 01, 2024 (GLOBE NEWSWIRE) -- Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RCI) today announced its unaudited financial and operating results for the fourth quarter ended December 31, 2023.
"We delivered industry-leading results in the fourth quarter and for the full year," said Tony Staffieri, President and CEO. "We led the industry in growth, exceeded our Shaw targets, and delivered a number of innovative firsts to Canadians. We've delivered eight straight quarters of growth and I remain very confident in our future. Our industry-leading growth targets for 2024 reflect continued momentum and disciplined execution."
*Consolidated Financial Highlights*
(In millions of Canadian dollars, except per share amounts, unaudited)
Three months ended December 31 Twelve months ended December 31
*2023* 2022 % Chg *2023* 2022 % Chg
Total revenue *5,335* 4,166 28 *19,308* 15,396 25
Total service revenue *4,470* 3,436 30 *16,845* 13,305 27
Adjusted EBITDA *2,329* 1,679 39 *8,581* 6,393 34
Net income *328* 508 (35 ) *849* 1,680 (49 )
Adjusted net income ^1 *630* 554 14 *2,406* 1,915 26
Diluted earnings per share *$**0.62* $1.00 (38 ) *$**1.62* $3.32 (51 )
Adjusted diluted earnings per share^ 1 *$**1.19* $1.09 9 *$**4.59* $3.78 21
Cash provided by operating activities *1,379* 1,145 20 *5,221* 4,493 16
Free cash flow *823* 635 30 *2,414* 1,773 36
^________________________
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. Adjusted net income is a non-GAAP financial measure and 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 increased by 28% and 30%, respectively, this quarter, driven substantially by revenue growth in our Cable and Wireless businesses.
Wireless service revenue increased by 9% this quarter, primarily as a result of the cumulative impact of growth in our mobile phone subscriber base and revenue from Shaw Mobile subscribers acquired through the acquisition of Shaw Communications Inc. (Shaw, and the Shaw Transaction). Wireless equipment revenue increased by 17%, primarily as a result of an increase in new subscribers purchasing devices and a continued shift in the product mix towards higher-value devices.
Cable service revenue increased by 94% this quarter primarily as a result of the Shaw Transaction.
Media revenue decreased by 8% this quarter primarily as a result of lower sports-related revenue associated with a distribution from Major League Baseball in 2022.
*Adjusted EBITDA and margins*
Consolidated adjusted EBITDA increased 39% this quarter and our adjusted EBITDA margin increased by 340 basis points, as a result of improving synergies and efficiencies.
Wireless adjusted EBITDA increased by 10%, primarily due to the flow-through impact of higher revenue as discussed above. This gave rise to an adjusted EBITDA margin of 63.9%.
Cable adjusted EBITDA increased by 113% due to the flow-through impact of higher revenue as discussed above and the achievement of cost synergies associated with integration activities. This gave rise to an adjusted EBITDA margin of 56.1%.
Media adjusted EBITDA decreased by $53 million, or 93%, primarily due to lower sports-related revenue as discussed above.
*Net income and adjusted net income*
Net income decreased by 35% this quarter, primarily as a result of higher depreciation and amortization associated with assets acquired through the Shaw Transaction; higher restructuring, acquisition and other costs, primarily associated with Shaw acquisition- and integration-related activities; and higher finance costs, partially offset by higher adjusted EBITDA. Adjusted net income^2 increased by 14% this quarter, primarily as a result of higher adjusted EBITDA.
*Cash flow and available liquidity*
This quarter, we generated cash provided by operating activities of $1,379 million (2022 - $1,145 million); the increase is primarily a result of higher adjusted EBITDA, partially offset by higher interest paid. We also generated free cash flow of $823 million (2022 - $635 million), up 30% as a result of higher adjusted EBITDA, partially offset by higher interest on long-term debt and higher capital expenditures.
As at December 31, 2023, we had $5.9 billion of available liquidity^3 (December 31, 2022 - $4.9 billion), consisting of $0.8 billion in cash and cash equivalents and $5.1 billion available under our bank credit and other facilities.
As a result of the Shaw Transaction, our debt leverage ratio was 4.7^2 as at December 31, 2023. This has been calculated on an adjusted basis to include trailing 12-month adjusted EBITDA of a combined Rogers and Shaw as if the Shaw Transaction had closed at the beginning of the trailing 12-month period. If calculated on an as reported basis without the foregoing adjustment, our debt leverage ratio^3 as at December 31, 2023 was 5.0 (December 31, 2022 - 3.3). See "Financial Condition" for more information.
We also returned $265 million in dividends to shareholders this quarter and we declared a $0.50 per share dividend on January 31, 2024.
________________________^2 Effective the second quarter of 2023, we retrospectively amended our definitions of (i) adjusted net income (see "Review of Consolidated Performance") and (ii) adjusted net debt, a component of debt leverage ratio and pro forma debt leverage ratio (see "Financial Condition").
^3 Available liquidity and debt leverage ratio are capital management measures. Pro forma debt leverage ratio is a non-GAAP ratio. Pro forma trailing 12-month adjusted EBITDA is a non-GAAP financial measure and is a component of pro forma debt leverage ratio. See "Non-GAAP and Other Financial Measures" for more information about these measures. These are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other companies. See "Financial Condition" for a reconciliation of available liquidity.
*Strategic Highlights*
The five objectives set out below 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 the year.
Build the biggest and best networks in the country
· Invested a record $3.9 billion in capital expenditures, primarily in our wireless and wireline network infrastructure.
· Recognized as the best and most reliable wireless network in Canada for the fifth straight year by umlaut in July 2023.
· Expanded Canada's largest and most reliable 5G network to 267 new communities.
· Launched 5G service for all transit riders in the busiest sections of the Toronto Transit Commission (TTC) subway system.
· Signed agreements with SpaceX and Lynk Global to bring satellite-to-mobile phone coverage and completed Canada's first test call.
· Secured 3800 MHz spectrum licences, making Rogers the largest 5G spectrum investor.
· Invested in wildfire detection and prevention technology to help combat climate change events.
· Delivered an additional 50 kilometres of 5G cellular connectivity on Highway 16 in British Columbia to improve public safety.
Deliver easy to use, reliable products and services
· Introduced Rogers Internet and TV services to customers in Western Canada.
· Upgraded all migrated legacy Shaw Mobile customers to Rogers 5G service.
· Introduced the red Rogers Mastercard with 48-month device equal payment plan with 0% interest and up to 3% cashback value for customers.
· Introduced Ignite Self Protect for customers to self-monitor their homes with connected devices.
Be the first choice for Canadians
· Led the industry in wireless subscriber additions with 674,000 postpaid mobile phone net additions.
· Launched our "We Speak Your Language" program across all retail stores, with the goal of serving customers in their preferred language.
· Secured number-one spots for flagship radio brands 98.1 CHFI, CityNews 680, and KiSS 92.5 for the Summer 2023 ratings period.
· Helped bring Taylor Swift to Canada in 2024 for six shows in Toronto and three in Vancouver.
· Signed a long-term broadcast agreement with UFC that will bring live UFC events to Sportsnet.Be a strong national company investing in Canada
· Successfully completed the historic Shaw Transaction in April 2023.
· Repatriated the Shaw customer service teams as part of our commitment to 100% Canada-based teams.
· Expanded Connected for Success, our high-speed, low-cost Internet program to Western Canada.
· Announced a new five-year deal as title sponsor of the Shaw Charity Classic.
· Drove benefits to community organizations across Canada of over $100 million.Be the growth leader in our industry
· Total service revenue up 27%; adjusted EBITDA up 34%.
· Generated free cash flow of $2,414 million and cash provided by operating activities of $5,221 million.
· Achieved strong Cable adjusted EBITDA margin expansion of 330 basis points; Shaw integration tracking ahead of plan.
· Delivered on industry-leading 2023 financial guidance.
*Achieved 2023 Guidance*
The following table outlines guidance ranges that we had previously provided and our actual results and achievements for the selected full-year 2023 financial metrics.
*2022* *2023* *2023*
(In millions of dollars, except percentages) *Actual* *Guidance Ranges* *Actual* *Achievement*
*Consolidated Guidance *^*1*
Total service revenue 13,305 Increase of 26% to increase of 30% 16,845 27 % x
Adjusted EBITDA 6,393 Increase of 33% to increase of 36% 8,581 34 % x
Capital expenditures ^2 3,075 3,700 to 3,900 3,934 n/m xx
Free cash flow 1,773 2,200 to 2,500 2,414 n/m x
*Achieved x* *Exceeded xx*
n/m - not meaningful
^1 The table outlines guidance ranges for selected full-year 2023 consolidated financial metrics provided in our February 2, 2023 earnings release and subsequently updated on July 26, 2023. 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, or assets acquired through business combinations.
*2024** Outlook*
For the full-year 2024, we expect growth in total service revenue and adjusted EBITDA will drive higher free cash flow. In 2024, we expect to have the financial flexibility to maintain our network advantages and to continue to return cash to shareholders.
*2023* *2024*
(In millions of dollars, except percentages; unaudited) *Actual* *Guidance Ranges *^*1*
*Consolidated Guidance*
Total service revenue 16,845 Increase of 8% to increase of 10%
Adjusted EBITDA 8,581 Increase of 12% to increase of 15%
Capital expenditures ^2 3,934 3,800 to 4,000
Free cash flow 2,414 2,900 to 3,100
^1 Guidance ranges presented as percentages reflect percentage increases over full-year 2023 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.
The above table outlines guidance ranges for selected full-year 2024 consolidated financial metrics. These ranges take into consideration our current outlook and our 2023 results. The purpose of the financial outlook is to assist investors, shareholders, and others in understanding certain financial metrics relating to expected 2024 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 2024 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.
*About Rogers*
Rogers is Canada's leading wireless, cable and media company that provides connectivity and entertainment to Canadian consumers and businesses across the country. 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 contact* *Media contact*
Paul Carpino Sarah Schmidt
647.435.6470 647.643.6397
paul.carpino@rci.rogers.com sarah.schmidt@rci.rogers.com
*Quarterly Investment Community Teleconference*
Our fourth quarter 2023 results teleconference with the investment community will be held on:
· February 1, 2024
· 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+ (sedarplus.ca), 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, 2023, as well as forward-looking information (see "About 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, 2023, 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, sedarplus.ca, 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 2022 Annual MD&A, our 2022 Audited Consolidated Financial Statements, our 2023 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 sedarplus.ca or EDGAR at sec.gov, respectively.
Effective the second quarter of 2023, we retrospectively amended our definitions of (i) adjusted net income and (ii) adjusted net debt. See "Non-GAAP and Other Financial Measures" in this earnings release.
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 January 31, 2024 and was approved by RCI's Board of Directors (the Board).
We are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).
The results from the acquired Shaw operations are included in our segment and consolidated results from the date of acquisition, consistent with our reportable segment definitions.
In this earnings release, this quarter, the quarter, or fourth quarter refer to the three months ended December 31, 2023, first quarter refers to the three months ended March 31, 2023, second quarter refers to the three months ended June 30, 2023, third quarter refers to the three months ended September 30, 2023 and year to date or full year refer to the twelve months ended December 31, 2023. All results commentary is compared to the equivalent period in 2022 or as at December 31, 2022, 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. ©2024 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:
*Segment* *Principal activities*
Wireless Wireless telecommunications operations for Canadian consumers and businesses.
Cable Cable telecommunications operations, including Internet, television and other video (Video), Satellite, 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.
Media A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, and digital media.During the quarter, Wireless and Cable were operated by our wholly owned subsidiary, Rogers Communications Canada Inc. (RCCI), and certain of our other wholly owned subsidiaries. Following the Shaw Transaction, aspects of Cable were also operated by Shaw Cablesystems G.P., Shaw Telecom G.P., and Shaw Satellite G.P. Media was 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) *2023* 2022 % Chg *2023* 2022 % Chg
Revenue
Wireless *2,868* 2,578 11 *10,222* 9,197 11
Cable *1,982* 1,019 95 *7,005* 4,071 72
Media *558* 606 (8 ) *2,335* 2,277 3
Corporate items and intercompany eliminations *(73* *)* (37 ) 97 *(254* *)* (149 ) 70
Revenue *5,335* 4,166 28 *19,308* 15,396 25
Total service revenue ^1 *4,470* 3,436 30 *16,845* 13,305 27
Adjusted EBITDA
Wireless *1,291* 1,173 10 *4,986* 4,469 12
Cable *1,111* 522 113 *3,774* 2,058 83
Media *4* 57 (93 ) *77* 69 12
Corporate items and intercompany eliminations *(77* *)* (73 ) 5 *(256* *)* (203 ) 26
Adjusted EBITDA ^2 *2,329* 1,679 39 *8,581* 6,393 34
Adjusted EBITDA margin ^2 *43.7* *%* 40.3 % 3.4 pts *44.4* *%* 41.5 % 2.9 pts
Net income *328* 508 (35 ) *849* 1,680 (49 )
Basic earnings per share *$**0.62* $1.01 (39 ) *$**1.62* $3.33 (51 )
Diluted earnings per share *$**0.62* $1.00 (38 ) *$**1.62* $3.32 (51 )
Adjusted net income ^2 *630* 554 14 *2,406* 1,915 26
Adjusted basic earnings per share^ 2 *$**1.19* $1.10 8 *$**4.60* $3.79 21
Adjusted diluted earnings per share ^2 *$**1.19* $1.09 9 *$**4.59* $3.78 21
Capital expenditures *946* 776 22 *3,934* 3,075 28
Cash provided by operating activities *1,379* 1,145 20 *5,221* 4,493 16
Free cash flow *823* 635 30 *2,414* 1,773 36
^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 non-GAAP financial measure and 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) *2023* 2022 % Chg *2023* 2022 % Chg
Revenue
Service revenue *2,020* 1,856 9 *7,802* 7,131 9
Equipment revenue *848* 722 17 *2,420* 2,066 17
Revenue *2,868* 2,578 11 *10,222* 9,197 11
Operating expenses
Cost of equipment *846* 734 15 *2,396* 2,115 13
Other operating expenses *731* 671 9 *2,840* 2,613 9
Operating expenses *1,577* 1,405 12 *5,236* 4,728 11
Adjusted EBITDA *1,291* 1,173 10 *4,986* 4,469 12
Adjusted EBITDA margin^ 1 *63.9* *%* 63.2 % 0.7 pts *63.9* *%* 62.7 % 1.2 pts
Capital expenditures *334* 421 (21 ) *1,625* 1,758 (8 )
^1 Calculated using service revenue.
*Wireless Subscriber Results* ^1
Three months ended December 31 Twelve months ended December 31
(In thousands, except churn and mobile phone ARPU) *2023* 2022 Chg *2023* 2022 Chg
Postpaid mobile phone ^2, 3
Gross additions *703* 537 166 *2,007* 1,523 484
Net additions *184* 193 (9 ) *674* 545 129
Total postpaid mobile phone subscribers^ 4 *10,498* 9,392 1,106 *10,498* 9,392 1,106
Churn (monthly) *1.67* *%* 1.24 % 0.43 pts *1.11* *%* 0.90 % 0.21 pts
Prepaid mobile phone
Gross additions *156* 216 (60 ) *867* 796 71
Net (losses) additions *(73* *)* (7 ) (66 ) *(50* *)* 89 (139 )
Total prepaid mobile phone subscribers^ 4,5 *1,111* 1,255 (144 ) *1,111* 1,255 (144 )
Churn (monthly) *6.20* *%* 5.90 % 0.30 pts *6.12* *%* 4.90 % 1.22 pts
Mobile phone ARPU (monthly)^ 6 *$**57.96* $58.69 ($0.73 ) *$**57.86* $57.89 ($0.03 )
^1 Subscriber counts and subscriber churn are key performance indicators. See "Key Performance Indicators".
^2 On April 3, 2023, we acquired approximately 501,000 Shaw Mobile postpaid mobile phone subscribers as a result of our acquisition of Shaw, which are not included in net additions. As at December 31, 2023, we had completed migrating these subscribers to the Rogers network; there were 18,000 deactivated subscribers that could not be migrated and were therefore removed from our postpaid mobile phone subscriber base effective December 31, 2023.
^3 Effective April 1, 2023, we adjusted our postpaid mobile phone subscriber base to remove 51,000 subscribers relating to a wholesale account.
^4 As at end of period.
^5 Effective December 1, 2023, we adjusted our Wireless prepaid subscriber base to remove 94,000 subscribers as a result of a change to our deactivation policy from 90 days to 30 days.
^6 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 9% increase in service revenue this quarter was primarily a result of:
· the cumulative impact of growth in our mobile phone subscriber base over the past year; and
· the impact of the Shaw Mobile subscribers acquired through the Shaw Transaction in April 2023.
The decrease in mobile phone ARPU this quarter was primarily a result of the impact of the Shaw Mobile subscribers acquired through the Shaw Transaction in April 2023.
The continued significant postpaid gross and net additions this quarter were a result of sales execution in a growing Canadian market.
*Equipment revenue*
The 17% increase in equipment revenue this quarter was primarily as a result of:
· an increase in new subscribers purchasing devices; and
· a continued shift in the product mix towards higher-value devices; partially offset by
· lower device upgrades by existing customers.*Operating expenses*
Cost of equipment
The 15% increase in the cost of equipment this quarter was a result of the equipment revenue changes discussed above.
Other operating expenses
The 9% increase in other operating expenses this quarter was primarily a result of:
· higher costs associated with the increased revenue and subscriber additions including commissions and costs associated with our expanded network; and
· investments made in customer service.
*Adjusted EBITDA *
The 10% 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) *2023* 2022 % Chg *2023* 2022 % Chg
Revenue
Service revenue *1,965* 1,011 94 *6,962* 4,046 72
Equipment revenue *17* 8 113 *43* 25 72
Revenue *1,982* 1,019 95 *7,005* 4,071 72
Operating expenses *871* 497 75 *3,231* 2,013 61
Adjusted EBITDA *1,111* 522 113 *3,774* 2,058 83
Adjusted EBITDA margin *56.1* *%* 51.2 % 4.9 pts *53.9* *%* 50.6 % 3.3 pts
Capital expenditures *448* 235 91 *1,865* 1,019 83
*
Cable Subscriber Results *^1
Three months ended December 31 Twelve months ended December 31
(In thousands, except ARPA and penetration) *2023* 2022 Chg *2023* 2022 Chg
Homes passed ^2,3,4,5 *9,943* 4,804 5,139 *9,943* 4,804 5,139
Customer relationships
Net (losses) additions *(1* *)* (6 ) 5 *(2* *)* 6 (8 )
Total customer relationships ^2,3,4.5 *4,636* 2,590 2,046 *4,636* 2,590 2,046
ARPA (monthly) ^6 *$**141.96* $129.92 $12.04 *$**142.58* $130.12 $12.46
Penetration ^2 *46.6* *%* 53.9 % (7.3 pts ) *46.6* *%* 53.9 % (7.3 pts )
Retail Internet
Net additions *20* 7 13 *77* 52 25
Total retail Internet subscribers ^2,3,4,5 *4,162* 2,284 1,878 *4,162* 2,284 1,878
Video
Net (losses) additions *(12* *)* (10 ) (2 ) *15* 32 (17 )
Total Video subscribers ^2,3,4 *2,751* 1,525 1,226 *2,751* 1,525 1,226
Smart Home Monitoring
Net losses *(1* *)* (1 ) — *(12* *)* (12 ) —
Total Smart Home Monitoring subscribers ^2 *89* 101 (12 ) *89* 101 (12 )
Home Phone
Net losses *(38* *)* (18 ) (20 ) *(116* *)* (76 ) (40 )
Total Home Phone subscribers^ 2,3,4 *1,629* 836 793 *1,629* 836 793
^1 Subscriber results are key performance indicators. See "Key Performance Indicators".
^2 As at end of period.
^3 On April 3, 2023, we acquired approximately 1,961,000 retail Internet subscribers, 1,203,000 Video subscribers, 890,000 Home Phone subscribers, 4,935,000 homes passed, and 2,191,000 customer relationships as a result of the Shaw Transaction, which are not included in net additions, but do appear in the ending total balances for December 31, 2023. The acquired Satellite subscribers are not included in our reported subscriber, homes passed, or customer relationship metrics.
^4 On November 1, 2023, we acquired approximately 22,000 retail Internet subscribers, 8,000 Video subscribers, 19,000 Home Phone subscribers, 8,000 homes passed, and 30,000 customer relationships as a result of our acquisition of a Cable services reseller. None of these subscribers are included in net additions.
^5 Effective October 1, 2023, and on a prospective basis, we reduced our retail Internet subscriber base by 182,000 and our customer relationships by 173,000 to remove Fido Internet subscribers as we stopped selling new plans for this service as of that date. Given this, we believe this adjustment more meaningfully reflects the underlying organic subscriber performance of our retail Internet business.
^6 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 94% increase in service revenue this quarter was a result of:
· revenue related to our acquisition of Shaw, which contributed approximately $1 billion for the quarter; and
· an increase in our retail Internet subscriber base and the movement of retail Internet customers to higher speed tiers in our Ignite Internet offerings; partially offset by:
· continued increased competitive promotional activity; and
· declines in our Home Phone, Smart Home Monitoring, and Satellite subscriber bases.
The higher ARPA this quarter was primarily a result of the acquisition of Shaw.
*Operating expenses *
The 75% increase in operating expenses this quarter was primarily a result of:
· our acquisition of Shaw, partially offset by the realization of cost synergies associated with integration activities; and
· investments in customer service.
*Adjusted EBITDA *
The 113% 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) *2023* 2022 % Chg *2023* 2022 % Chg
Revenue *558* 606 (8 ) *2,335* 2,277 3
Operating expenses *554* 549 1 *2,258* 2,208 2
Adjusted EBITDA *4* 57 (93 ) *77* 69 12
Adjusted EBITDA margin *0.7* *%* 9.4 % (8.7 pts ) *3.3* *%* 3.0 % 0.3 pts
Capital expenditures *113* 73 55 *250* 142 76
*
Revenue*
The 8% decrease in revenue this quarter was a result of:
· lower sports-related revenue associated with the impact of a distribution from Major League Baseball in 2022; partially offset by
· higher advertising and subscriber revenue.
*Operating expenses*
The 1% increase in operating expenses this quarter was a result of higher programming costs.
*Adjusted EBITDA*
The decrease 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) *2023* 2022 % Chg *2023* 2022 % Chg
Wireless *334* 421 (21 ) *1,625* 1,758 (8 )
Cable *448* 235 91 *1,865* 1,019 83
Media *113* 73 55 *250* 142 76
Corporate *51* 47 9 *194* 156 24
Capital expenditures ^1 *946* 776 22 *3,934* 3,075 28
Capital intensity^ 2 *17.7* *%* 18.6 % (0.9 pts ) *20.4* *%* 20.0 % 0.4 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 objectives is to build the biggest and best networks in the country. 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, 2023) across the country, and continued with our commitment to expand coverage across Western Canada and in the TTC subway system. 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, including in rural, remote, and Indigenous communities. We continued strengthening 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*
The decrease in capital expenditures in Wireless this quarter was due to the timing of investments. We continue to make investments in our network development and 5G deployment to expand our wireless network. The ongoing deployment of 3500 MHz spectrum continues to augment the capacity and resilience of our earlier 5G deployments in the 600 MHz spectrum band.
*Cable*
The increase in capital expenditures in Cable this quarter reflects our acquisition of Shaw and continued investments in our infrastructure, including additional fibre deployments to increase our FTTH distribution. These investments incorporate the latest technologies to help deliver more bandwidth and an enhanced 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, offering increased network resilience, stability, and faster download speeds over time.
*Media*
The increase in capital expenditures in Media this quarter was primarily a result of higher Toronto Blue Jays stadium infrastructure-related expenditures associated with the second phase of the Rogers Centre modernization project.
*Capital intensity*
Capital intensity decreased in the quarter as the increase in capital expenditure investments, as noted above, was 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) *2023* 2022 % Chg *2023* 2022 % Chg
Adjusted EBITDA *2,329* 1,679 39 *8,581* 6,393 34
Deduct (add):
Depreciation and amortization *1,172* 648 81 *4,121* 2,576 60
Restructuring, acquisition and other *86* 58 48 *685* 310 121
Finance costs *568* 287 98 *2,047* 1,233 66
Other (income) expense *(19* *)* (10 ) 90 *362* (15 ) n/m
Income tax expense *194* 188 3 *517* 609 (15 )
Net income *328* 508 (35 ) *849* 1,680 (49 )
n/m - not meaningful
*Depreciation and amortization*
Three months ended December 31 Twelve months ended December 31
(In millions of dollars) *2023* 2022 % Chg *2023* 2022 % Chg
Depreciation of property, plant and equipment *938* 572 64 *3,331* 2,281 46
Depreciation of right-of-use assets *107* 72 49 *371* 274 35
Amortization *127* 4 n/m *419* 21 n/m
Total depreciation and amortization *1,172* 648 81 *4,121* 2,576 60Total depreciation and amortization increased this quarter, primarily as a result of the property, plant and equipment, right-of-use assets, and customer relationship intangible assets acquired through the Shaw Transaction.
*Restructuring, acquisition and other*
Three months ended December 31 Twelve months ended December 31
(In millions of dollars) *2023* 2022 *2023* 2022
Restructuring and other *25* 11 *365* 118
Shaw Transaction-related costs *61* 47 *320* 192
Total restructuring, acquisition and other *86* 58 *685* 310The Shaw Transaction-related costs in 2022 and 2023 consisted of incremental costs supporting acquisition and integration activities related to the Shaw Transaction.
The restructuring and other costs in the fourth quarters of 2022 and 2023 included severance-related costs associated with the targeted restructuring of our employee base. In 2023, we also incurred costs related to real estate rationalization programs.
*Finance costs*
Three months ended December 31 Twelve months ended December 31
(In millions of dollars) *2023* 2022 % Chg *2023* 2022 % Chg
Total interest on borrowings ^1 *531* 381 39 *1,981* 1,354 46
Interest earned on restricted cash and cash equivalents *—* (130 ) (100 ) *(149* *)* (235 ) (37 )
Interest on borrowings, net *531* 251 112 *1,832* 1,119 64
Interest on lease liabilities *31* 22 41 *111* 80 39
Interest on post-employment benefits *(3* *)* — — *(13* *)* (1 ) n/m
(Gain) loss on foreign exchange *(127* *)* (19 ) n/m *(111* *)* 127 n/m
Change in fair value of derivative instruments *111* 16 n/m *108* (126 ) n/m
Capitalized interest *(10* *)* (8 ) 25 *(38* *)* (29 ) 31
Deferred transaction costs and other *35* 25 40 *158* 63 151
Total finance costs *568* 287 98 *2,047* 1,233 66
^1 Interest on borrowings includes interest on short-term borrowings and on long-term debt.
Interest on borrowings, net
The 112% increase in net interest on borrowings this quarter was primarily a result of:
· a reduction in interest earned on restricted cash and cash equivalents, as we used these funds to partially fund the Shaw Transaction;
· interest expense associated with the borrowings under the term loan facility used to partially fund the Shaw Transaction;
· interest expense associated with the long-term debt assumed through the Shaw Transaction; and
· interest expense associated with the $3 billion senior note issuance in September 2023; partially offset by
· the repayment at maturity of our US$850 million senior notes in November 2023 and US$500 million senior notes in March 2023.Deferred transaction costs and other
The increase in "deferred transaction costs and other" this quarter is primarily a result of the amortization of the $262 million of consent fees paid in January 2023 to extend the special mandatory redemption outside date for the SMR notes issued in March 2022.
*Income tax expense*
Three months ended December 31 Twelve months ended December 31
(In millions of dollars, except tax rates) *2023* 2022 *2023* 2022
Statutory income tax rate *26.2* *%* 26.5 % *26.2* *%* 26.5 %
Income before income tax expense *522* 696 *1,366* 2,289
Computed income tax expense *137* 184 *358* 607
Increase (decrease) in income tax expense resulting from:
Non-deductible stock-based compensation *11* 9 *9* 10
Non-deductible (taxable) portion of equity losses (income) *1* 1 *(1* *)* 9
Revaluation of deferred tax balances due to corporate reorganization-driven change in income tax rate *52* — *52* —
Non-taxable portion of capital gains *(1* *)* (5 ) *(1* *)* (5 )
Non-taxable income from security investments *(6* *)* (3 ) *(16* *)* (12 )
Non-deductible loss on joint venture's non-controlling interest purchase obligation *—* — *111* —
Other items *—* 2 *5* —
Total income tax expense *194* 188 *517* 609
Effective income tax rate *37.2* *%* 27.0 % *37.8* *%* 26.6 %
Cash income taxes paid *39* 25 *439* 455 Cash income taxes paid increased this quarter due to the timing of installment payments. The decrease in our statutory income tax rate this quarter was a result of a greater portion of our income being earned in provinces with lower income tax rates.
*Net income*
Three months ended December 31 Twelve months ended December 31
(In millions of dollars, except per share amounts) *2023* 2022 % Chg *2023* 2022 % Chg
Net income *328* 508 (35 ) *849* 1,680 (49 )
Basic earnings per share *$**0.62* $1.01 (39 ) *$**1.62* $3.33 (51 )
Diluted earnings per share *$**0.62* $1.00 (38 ) *$**1.62* $3.32 (51 )
*
Adjusted net income*
We calculate adjusted net income from adjusted EBITDA as follows:
Three months ended December 31 Twelve months ended December 31
(In millions of dollars, except per share amounts) *2023* 2022 % Chg *2023* 2022 % Chg
Adjusted EBITDA *2,329* 1,679 39 *8,581* 6,393 34
Deduct:
Depreciation and amortization ^1 *923* 648 42 *3,357* 2,576 30
Finance costs *568* 287 98 *2,047* 1,233 66
Other income ^2 *(19* *)* (10 ) 90 *(60* *)* (15 ) n/m
Income tax expense^ 3 *227* 200 14 *831* 684 21
Adjusted net income ^1 *630* 554 14 *2,406* 1,915 26
Adjusted basic earnings per share *$**1.19* $1.10 8 *$**4.60* $3.79 21
Adjusted diluted earnings per share *$**1.19* $1.09 9 *$**4.59* $3.78 21
^1 Effective the second quarter, we retrospectively amended our calculation of adjusted net income to exclude depreciation and amortization on the fair value increment recognized on acquisition of Shaw Transaction-related property, plant and equipment and intangible assets. For purposes of calculating adjusted net income, we believe the magnitude of this depreciation and amortization, which is significantly affected by the size of the Shaw Transaction, affects comparability between periods and the additional expense recognized may have no correlation to our current and ongoing operating results. Depreciation and amortization excludes depreciation and amortization on Shaw Transaction-related property, plant and equipment and intangible assets for the three and twelve months ended December 31, 2023 of $249 million and $764 million (2022 - nil), respectively. Adjusted net income includes depreciation and amortization on the acquired Shaw property, plant and equipment and intangible assets based on Shaw's historical cost and depreciation policies.
^2 Other income for the twelve months ended December 31, 2023 excludes a $422 million loss related to one of our joint venture's obligations to purchase at fair value the non-controlling interest in one of its investments.
^3 Income tax expense excludes recoveries of $85 million and $366 million (2022 - recoveries of $12 million and $75 million) for the three and twelve months ended December 31, 2023, respectively, related to the income tax impact for adjusted items and it also excludes a $52 million expense (2022 - nil) for the three and twelve months ended December 31, 2023 due to a revaluation of deferred tax balances resulting from a change in our income tax rate.
*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) *2023* 2022 *2023* 2022
Cash provided by operating activities before changes in net operating assets and liabilities, income taxes paid, and interest paid *2,243* 1,658 *8,067* 6,154
Change in net operating assets and liabilities *(369* *)* (201 ) *(627* *)* (152 )
Income taxes paid *(39* *)* (25 ) *(439* *)* (455 )
Interest paid, net *(456* *)* (287 ) *(1,780* *)* (1,054 )
Cash provided by operating activities *1,379* 1,145 *5,221* 4,493
Investing activities:
Capital expenditures *(946* *)* (776 ) *(3,934* *)* (3,075 )
Additions to program rights *(17* *)* (8 ) *(74* *)* (47 )
Changes in non-cash working capital related to capital expenditures and intangible assets *(68* *)* (222 ) *(2* *)* (200 )
Acquisitions and other strategic transactions, net of cash acquired *786* — *(16,215* *)* (9 )
Other *21* (5 ) *25* 68
Cash used in investing activities *(224* *)* (1,011 ) *(20,200* *)* (3,263 )
Financing activities:
Net (repayment of) proceeds received from short-term borrowings *(96* *)* (38 ) *(1,439* *)* 707
Net (repayment) issuance of long-term debt *(2,749* *)* — *5,040* 12,711
Net proceeds (payments) on settlement of debt derivatives and forward contracts *260* 16 *492* (11 )
Transaction costs incurred *—* — *(284* *)* (726 )
Principal payments of lease liabilities *(106* *)* (83 ) *(370* *)* (316 )
Dividends paid *(191* *)* (253 ) *(960* *)* (1,010 )
Cash (used in) provided by financing activities *(2,882* *)* (358 ) *2,479* 11,355
Change in cash and cash equivalents and restricted cash and cash equivalents *(1,727* *)* (224 ) *(12,500* *)* 12,585
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period *2,527* 13,524 *13,300* 715
Cash and cash equivalents and restricted cash and cash equivalents, end of period *800* 13,300 *800* 13,300
Cash and cash equivalents *800* 463 *800* 463
Restricted cash and cash equivalents *—* 12,837 *—* 12,837
Cash and cash equivalents and restricted cash and cash equivalents, end of period *800* 13,300 *800* 13,300
*
Operating activities*
This quarter, cash from operating activities increased primarily as a result of higher adjusted EBITDA, partially offset by higher interest paid.
*Investing activities*
Capital expenditures
During the quarter we incurred $946 million on capital expenditures before changes in non-cash working capital items. See "Capital Expenditures" for more information.
Acquisitions and other strategic transactions
In December 2023, we sold our investment interests in Cogeco Inc. and Cogeco Communications Inc. for $829 million to Caisse de dépôt et placement du Québec in a private transaction. We subsequently used the cash received to repay a portion of our outstanding term loan facility (see "Long-term debt" below).
We also acquired a small Cable services reseller this quarter.
*Financing activities*
During the quarter we paid net amounts of $2,585 million (2022 - paid $22 million) on our short-term borrowings, long-term debt, and related derivatives. See "Financial Risk Management" for more information on the cash flows relating to our derivative instruments.
Short-term borrowings
Our short-term borrowings consist of amounts outstanding under our receivables securitization program, our US CP program, and our short-term non-revolving credit facilities. Below is a summary of our short-term borrowings as at December 31, 2023 and December 31, 2022.
As at
December 31 As at
December 31
(In millions of dollars) *2023* 2022
Receivables securitization program *1,600* 2,400
US commercial paper program (net of the discount on issuance) *150* 214
Non-revolving credit facility borrowings (net of the discount on issuance) *—* 371
Total short-term borrowings *1,750* 2,985The tables below summarize the activity relating to our short-term borrowings for the three and twelve months ended December 31, 2023 and 2022.
Three months ended
December 31, 2023 Twelve months ended
December 31, 2023
(In millions of dollars, except exchange rates) Notional
(US$) Exchange
rate Notional
(Cdn$) Notional
(US$) Exchange
rate Notional
(Cdn$)
Repayment of receivables securitization *—* *(1,000* *)*
Net repayment of receivables securitization *—* *(1,000* *)*
Proceeds received from US commercial paper *306* *1.373* *420* *1,803* *1.357* *2,447*
Repayment of US commercial paper *(194* *)* *1.361* *(264* *)* *(1,858* *)* *1.345* *(2,499* *)*
Net proceeds received from (repayment of) US commercial paper *156* *(52* *)*
Proceeds received from non-revolving credit facilities (Cdn$) ^1 *—* *375*
Proceeds received from non-revolving credit facilities (US$) ^1 *—* *—* *—* *2,125* *1.349* *2,866*
Total proceeds received from non-revolving credit facilities *—* *3,241*
Repayment of non-revolving credit facilities (Cdn$) ^1 *—* *(758* *)*
Repayment of non-revolving credit facilities (US$) ^1 *(183* *)* *1.377* *(252* *)* *(2,125* *)* *1.351* *(2,870* *)*
Total repayment of non-revolving credit facilities *(252* *)* *(3,628* *)*
Net repayment of non-revolving credit facilities *(252* *)* *(387* *)*
Net repayment of short-term borrowings *(96* *)* *(1,439* *)*
^1 Borrowings under our non-revolving facility mature and are reissued regularly, such that until repaid, we maintain net outstanding borrowings equivalent to the then-current credit limit on the reissue dates. Three months ended
December 31, 2022 Twelve months ended
December 31, 2022
(In millions of dollars, except exchange rates) Notional
(US$) Exchange
rate Notional
(Cdn$) Notional
(US$) Exchange
rate Notional
(Cdn$)
Proceeds received from receivables securitization 400 1,600
Net proceeds received from receivables securitization 400 1,600
Proceeds received from US commercial paper 1,450 1.354 1,963 6,745 1.302 8,781
Repayment of US commercial paper (2,038 ) 1.360 (2,771 ) (7,303 ) 1.306 (9,537 )
Net repayment of US commercial paper (808 ) (756 )
Proceeds received from non-revolving credit facilities (Cdn$) 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
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 April 2023, we repaid the outstanding $200 million of borrowings under Shaw's legacy accounts receivable securitization program, subsequent to which the program was terminated. This repayment is included in "repayment of receivables securitization" above.
In November 2023, we entered into three non-revolving credit facilities with an aggregate limit of $2 billion. In December 2023, we terminated two of these credit facilities and reduced the amount available from $2 billion to $500 million. The remaining facility can be drawn until June 2024 and will mature one year after we draw. Any drawings on this facility will be recognized as short-term borrowings on our consolidated statement of financial position. Borrowings under this facility will be unsecured, guaranteed by RCCI, and will rank equally in right of payment with all of our other credit facilities and senior notes and debentures. We have not yet drawn on this facility.
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 $250 million maturing one year from when it was drawn. Any borrowings under these facilities were recorded as "short-term borrowings" as they were due within 12 months. Borrowings under the facilities were unsecured, guaranteed by RCCI, and ranked equally in right of payment with all of our other credit facilities and senior notes and debentures. These facilities were repaid and terminated throughout 2023.
Long-term debt
Our long-term debt consists of amounts outstanding under our bank and letter of credit facilities and the senior notes, debentures, and subordinated notes we have issued. The tables below summarize the activity relating to our long-term debt for the three and twelve months ended December 31, 2023 and 2022.
Three months ended
December 31, 2023 Twelve months ended
December 31, 2023
(In millions of dollars, except exchange rates) Notional
(US$) Exchange
rate Notional
(Cdn$) Notional
(US$) Exchange
rate Notional
(Cdn$)
Credit facility borrowings (US$) *—* *—* *—* *220* *1.368* *301*
Credit facility repayments (US$) *—* *—* *—* *(220* *)* *1.336* *(294* *)*
Net borrowings under credit facilities *—* *7*
Term loan facility net borrowings (US$) ^1 *—* *—* *—* *4,506* *1.350* *6,082*
Term loan facility net repayments (US$) *(811* *)* *1.337* *(1,084* *)* *(1,265* *)* *1.340* *(1,695* *)*
Net (repayments) borrowings under term loan facility *(1,084* *)* *4,387*
Senior note issuances (Cdn$) *—* *3,000*
Senior note repayments (Cdn$) *(500* *)* *(500* *)*
Senior note repayments (US$) *(850* *)* *1.371* *(1,165* *)* *(1,350* *)* *1.373* *(1,854* *)*
Total senior notes repayments *(1,665* *)* *(2,354* *)*
Net (repayment) issuance of senior notes *(1,665* *)* *646*
Net (repayment) issuance of long-term debt *(2,749* *)* *5,040*
^1 Borrowings under our term loan facility mature and are reissued regularly, such that until repaid, we maintain net outstanding borrowings equivalent to the then-current credit limit on the reissue dates. 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$) Exchange
rate Notional
(Cdn$)
Senior note issuances (Cdn$) — 4,250
Senior note issuances (US$) — — — 7,050 1.284 9,054
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 1.268 951
Net issuance of long-term debt — 12,711
Three months ended
December 31 Twelve months ended
December 31
(In millions of dollars) *2023* 2022 *2023* 2022
Long-term debt net of transaction costs, beginning of period *44,094* 32,235 *31,733* 18,688
Net (repayment) issuance of long-term debt *(2,749* *)* — *5,040* 12,711
Long-term debt assumed through the Shaw Transaction *—* — *4,526* —
(Gain) loss on foreign exchange *(526* *)* (263 ) *(549* *)* 1,271
Deferred transaction costs incurred *—* (262 ) *(31* *)* (988 )
Amortization of deferred transaction costs *36* 23 *136* 51
Long-term debt net of transaction costs, end of period *40,855* 31,733 *40,855* 31,733 In April 2023, we drew the maximum $6 billion on the term loan facility upon closing the Shaw Transaction, consisting of $2 billion from each of the three tranches. The three tranches mature on April 3, 2026, 2027, and 2028, respectively. In September 2023, we repaid $500 million of the tranche maturing on April 3, 2027. This quarter, we repaid an additional $1.1 billion of the same tranche such that the term loan facility has been reduced to $4.4 billion, of which $400 million remains outstanding under the April 3, 2027 tranche.
Issuance of senior and subordinated notes and related debt derivatives
Below is a summary of the senior and subordinated notes we issued during the three and twelve months ended December 31, 2023 and 2022.
(In millions of dollars, except interest rates and discounts) Discount/
premium at
issuance
Total gross
proceeds^ 1
(Cdn$)
Transaction costs and
discounts^ 2 (Cdn$)
Date issued Principal
amount Due
date Interest
rate Upon
issuance Upon
modification^3
2023 issuances
September 21, 2023 (senior) 500 2026 5.650 % 99.853 % 500 3 n/a
September 21, 2023 (senior) 1,000 2028 5.700 % 99.871 % 1,000 8 n/a
September 21, 2023 (senior) 500 2030 5.800 % 99.932 % 500 4 n/a
September 21, 2023 (senior) 1,000 2033 5.900 % 99.441 % 1,000 12 n/a
2022 issuances
February 11, 2022 (subordinated) ^4 US 750 2082 5.250 % At par 951 13 n/a
March 11, 2022 (senior) ^5 US 1,000 2025 2.950 % 99.934 % 1,283 9 50
March 11, 2022 (senior) 1,250 2025 3.100 % 99.924 % 1,250 7 n/a
March 11, 2022 (senior) US 1,300 2027 3.200 % 99.991 % 1,674 13 82
March 11, 2022 (senior) 1,000 2029 3.750 % 99.891 % 1,000 7 57
March 11, 2022 (senior) US 2,000 2032 3.800 % 99.777 % 2,567 27 165
March 11, 2022 (senior) 1,000 2032 4.250 % 99.987 % 1,000 6 58
March 11, 2022 (senior) US 750 2042 4.500 % 98.997 % 966 20 95
March 11, 2022 (senior) US 2,000 2052 4.550 % 98.917 % 2,564 55 250