SUPPL
Filed pursuant to
General Instruction II.K of Form F-9
File No. 333-147078
PROSPECTUS SUPPLEMENT
(to a Short Form Base Shelf Prospectus dated
November 8, 2007)
US$1,750,000,000
ROGERS COMMUNICATIONS
INC.
US$1,400,000,000 6.80% Senior
Notes Due 2018
US$350,000,000 7.50% Senior
Notes Due 2038
The US$1,400,000,000 6.80% senior notes due 2018 (the
2018 notes) will bear interest at the rate of 6.80%
per year from August 6, 2008 and the
US$350,000,000 7.50% senior notes due 2038 (the
2038 notes) will bear interest at the rate of 7.50%
per year from August 6, 2008 (collectively, the
notes). We will pay interest on the 2018 notes on
February 15 and August 15 of each year, beginning on
February 15, 2009. The effective yield on the 2018 notes
if held to maturity will be 6.820% per year. Unless we
redeem the 2018 notes earlier, the 2018 notes will mature on
August 15, 2018. We will pay interest on the 2038 notes on
February 15 and August 15 of each year, beginning on
February 15, 2009. The effective yield on the 2038 notes
if held to maturity will be 7.529% per year. Unless we
redeem the 2038 notes earlier, the 2038 notes will mature on
August 15, 2038. We may redeem some or all of the notes at
any time and from time to time at 100% of their principal amount
plus a make-whole premium described in this prospectus
supplement. We may also redeem all of the notes at any time in
the event that certain changes involving Canadian withholding
taxes occur. If we experience a change in control and there is a
specified decline in the credit rating of any series of the
notes, we will be required to make an offer to purchase all of
the notes of such series at a price equal to 101% of their
principal amount plus accrued interest to the date of purchase
in order to avoid an event of default under the notes of such
series.
The notes will be unsecured, unsubordinated obligations of
Rogers Communications Inc. and will rank equally with its
unsecured, unsubordinated obligations. Subject to the release
provisions described herein, payment of principal, premium, if
any, and interest on the notes will be fully and unconditionally
guaranteed, jointly and severally, on an unsecured,
unsubordinated basis by two of our wholly-owned subsidiaries.
Investing in the notes involves risks. See the Risk
Factors section beginning on page 18 of the
accompanying prospectus, as well as Risks Related to the
Notes beginning on
page S-7
of this prospectus supplement.
The notes have not been approved or disapproved by the
Securities and Exchange Commission or any state securities
regulator, nor has the Securities and Exchange Commission or any
state securities regulator passed upon the accuracy or adequacy
of this prospectus supplement or the prospectus to which it
relates. Any representation to the contrary is a criminal
offense.
We are permitted to prepare this prospectus supplement and
the accompanying prospectus in accordance with Canadian
disclosure requirements, which are different from those of the
United States. We prepare our financial statements in accordance
with Canadian generally accepted accounting principles, and are
subject to Canadian and U.S. auditing and auditor
independence standards. They may not be comparable to financial
statements of U.S. companies.
Owning the notes may subject you to tax consequences both in
the United States and Canada. You should read the tax discussion
contained in this prospectus supplement. This prospectus
supplement and the accompanying prospectus may not describe
these tax consequences fully.
Your ability to enforce civil liabilities under the
U.S. federal securities laws may be affected adversely
because we are organized under the laws of British Columbia,
Canada, most of our directors, substantially all of our officers
and the experts named in this prospectus supplement are Canadian
residents, and substantially all of our assets are located
outside the United States.
The debt securities offered hereby have not been qualified
for sale under the securities laws of any province or territory
of Canada (other than the Province of Ontario) and are not being
offered in Canada or to any resident of Canada. See
Underwriting.
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Price to
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Underwriters
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Public(1)
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Commission
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Net proceeds to RCI(2)
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Per 2018 note
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99.854%
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0.650%
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99.204%
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Total
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US$
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1,397,956,000
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US$
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9,100,000
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US$
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1,388,856,000
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Per 2038 note
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99.653%
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0.875%
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98.778%
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Total
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US$
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348,785,500
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US$
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3,062,500
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US$
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345,723,000
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(1)
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Interest on the notes will accrue
from August 6, 2008 to the date of delivery. The price to
the public set forth above does not include accrued interest, if
any.
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(2)
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Before deducting expenses of the
offering estimated to be approximately US$3 million, which,
together with the underwriters commissions, will be paid
by us.
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The underwriters, as principals, conditionally offer the notes,
subject to prior sale, if, as and when issued by us, and
accepted by the underwriters in accordance with the conditions
contained in the underwriting agreement referred to under
Underwriting in this prospectus supplement. The
underwriters may sell notes for less than the initial offering
price in circumstances discussed under Underwriting.
In addition, the underwriters may over-allot or effect
transactions which stabilize or maintain the market price of the
notes at levels other than those that might otherwise prevail on
the open market. Such transactions, if commenced, may be
discontinued at any time. See Underwriting. Each
of the underwriters is an affiliate of a bank or a financial
institution that is currently, or may become concurrently with
this offering, a lender to us under our bank credit facility
and/or a
counter-party to cross-currency interest rate exchange
agreements with us. Accordingly, we may be considered to be a
connected issuer of each such underwriter for purposes of
applicable securities legislation in each of the provinces of
Canada. See Underwriting.
There is no market through which the notes may be sold and
purchasers may not be able to resell the notes purchased under
this prospectus supplement. This may affect the pricing of the
notes in the secondary market, the transparency and availability
of trading prices, the liquidity of the notes, and the extent of
issuer regulation. See Risks Related to the
Notes.
The underwriters expect to deliver the notes to purchasers on or
about August 6, 2008, but in any event not later than
September 10, 2008, through the book entry facilities of
the Depository Trust Company and its direct and indirect
participants, including Euroclear and Clearstream, Luxembourg.
Joint
Book-Running Managers
Lead
Manager
Scotia Capital
Co-Managers
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Merrill
Lynch & Co. |
RBC
Capital Markets |
TD
Securities |
July 30, 2008
IMPORTANT
NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of the notes that
we are offering and also adds to and updates certain information
contained in the accompanying prospectus and the documents
incorporated by reference therein and herein. The second part is
the accompanying short form base shelf prospectus dated
November 8, 2007, which gives more general information,
some of which may not apply to the notes we are offering
pursuant to this prospectus supplement. The accompanying short
form base shelf prospectus is referred to as the
prospectus in this prospectus supplement.
If the description of the notes varies between this
prospectus supplement and the prospectus, you should rely on the
information in this prospectus supplement.
You should rely only on the information contained in or
incorporated by reference into this prospectus supplement and
the accompanying prospectus and on other information included in
the registration statement of which this prospectus supplement
and the accompanying prospectus forms a part. We have not, and
the underwriters have not, authorized any other person to
provide you with information that is different. If anyone
provides you with different or inconsistent information, you
should not rely on it. We are not, and the underwriters are not,
making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. The information in
this prospectus supplement and the prospectus, including the
information in any document incorporated by reference herein and
therein, is accurate only as of the date of this prospectus
supplement.
Except as set forth under Summary of the Offering,
The Guarantors and Description of the
Notes or unless the context otherwise requires, in this
prospectus supplement (excluding the documents incorporated by
reference herein) the terms RCI,
Company, we, us and
our refer to Rogers Communications Inc. and its
subsidiaries, references to Canadian dollars, Cdn$
and $ are to the currency of Canada and references
to U.S. dollars or US$ are to the currency of
the United States.
Our consolidated financial statements have been prepared in
accordance with the accounting principles generally accepted in
Canada (Canadian GAAP) and are stated in Canadian
dollars.
KEY
PERFORMANCE INDICATORS AND NON-GAAP MEASURES
We measure the success of our strategies using a number of key
performance indicators, some of which we present in the table
contained in this prospectus supplement under the heading
Selected Consolidated Financial and Operating Data.
Important details in respect of these measures, including how
they are defined and calculated, are included in our
managements discussion and analysis incorporated by
reference into this prospectus supplement. Particular reference
should be made to the section of our managements
discussion and analysis in respect of our annual audited
consolidated financial statements entitled Key Performance
Indicators and Non-GAAP Measures. For the measures in
the table referenced above that are presented under the heading
Selected Subscriber Data, see also the subsections
of the Segment Review in our managements
discussion and analysis (for the corresponding period) entitled
Wireless Summarized Wireless Subscriber
Results and Cable Cable
Operations Summarized Subscriber Results, as
applicable.
These key performance indicators are not measurements in
accordance with Canadian GAAP. The non-GAAP measures presented
in Selected Consolidated Financial and Operating
Data in this prospectus supplement include adjusted
operating profit and operating profit. None of these measures
should be considered as an alternative to net income or any
other measure of performance calculated in accordance with
Canadian GAAP. In general, we present these additional measures
as we believe they allow us to more effectively measure our
performance against our operating strategy as well as against
the results of our peers and competitors. Similarly titled
measures presented by other companies may have a different
meaning and may not be comparable. For a further discussion of
why and how we present these measures, see the section entitled
Key Performance Indicators and
Non-GAAP Measures in our managements discussion
and analysis in respect of our annual audited consolidated
financial statements incorporated by reference into this
prospectus supplement. For a calculation of any of these
non-GAAP measures expressed for the years ended
December 31, 2007 and 2006, see the sections of our
associated managements
i
discussion and analysis incorporated by reference into this
prospectus supplement entitled Supplementary Information:
Non-GAAP Calculations and Consolidated
Financial and Operating Results Reconciliation of
Net Income to Operating Profit and Adjusted Operating Profit for
the Period. For a calculation of any of these non-GAAP
measures expressed for the six months ended June 30, 2008
and 2007, see the sections of our associated managements
discussion and analysis entitled Supplementary
Information and Summarized Consolidated Financial
Results Reconciliation of Net Income to Operating
Profit and Adjusted Operating Profit for the Period.
ii
TABLE OF
CONTENTS
Prospectus Supplement
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Page
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S-1
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S-2
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S-2
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S-3
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S-4
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S-7
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S-9
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S-10
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S-11
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S-14
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S-14
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S-15
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S-16
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S-29
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S-31
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S-33
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S-34
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S-37
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S-37
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S-38
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Prospectus
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iii
DOCUMENTS
INCORPORATED BY REFERENCE
This prospectus supplement is deemed to be incorporated by
reference in the prospectus solely for the purpose of the
offering of the notes hereunder. Other documents are also
incorporated, or are deemed to be incorporated, by reference
into the prospectus and reference should be made to the
prospectus for full particulars thereof.
The following documents filed by us with the Ontario Securities
Commission (the OSC) under the Securities Act
(Ontario) and filed with or furnished to the
U.S. Securities and Exchange Commission (the
SEC) under the United States Securities Exchange Act
of 1934, as amended (the Exchange Act), are
specifically incorporated by reference into, and form an
integral part of, this prospectus supplement and the prospectus:
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our annual information form for the year ended December 31,
2007, dated March 4, 2008;
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our audited consolidated financial statements as at and for the
years ended December 31, 2007 and 2006, together with the
report of the auditors thereon, and our managements
discussion and analysis in respect of those statements;
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our management information circular dated March 20, 2008,
as amended on April 3, 2008, in connection with our annual
meeting of shareholders held on April 29, 2008;
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our unaudited interim consolidated financial statements as at
June 30, 2008 and for the three and six months ended
June 30, 2008 and 2007 and our managements discussion
and analysis in respect of those statements; and
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our material change report filed January 16, 2008 relating
to our application to the Toronto Stock Exchange (the
TSX) to make a Normal Course Issuer Bid for
purchases of our Class B Non-Voting Shares through the
facilities of the TSX.
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Any documents of the types referred to above and any material
change reports (excluding confidential material change reports),
business acquisition reports and updated earnings coverage ratio
information filed by us with the OSC after the date of this
prospectus supplement and prior to the termination of this
offering will be deemed to be incorporated by reference into
this prospectus supplement and the prospectus. In addition, any
such documents which are filed with or furnished to the SEC by
us in our periodic reports on
Form 6-K
or annual report on
Form 40-F
after the date of this prospectus supplement and prior to the
termination of this offering shall be deemed to be incorporated
by reference into this prospectus supplement, the prospectus and
the registration statement of which the prospectus forms a part
if and to the extent expressly provided in such report.
Any statement contained in this prospectus supplement, the
prospectus or in a document incorporated or deemed to be
incorporated by reference into this prospectus supplement or the
prospectus shall be deemed to be modified or superseded for the
purposes of this prospectus supplement and the prospectus to the
extent that a statement contained in this prospectus supplement,
or in any subsequently filed document which also is or is deemed
to be incorporated by reference into this prospectus supplement
or the prospectus, modifies or supersedes that statement. The
modifying or superseding statement need not state that it has
modified or superseded a prior statement or include any other
information set forth in the document that it modifies or
supersedes. The making of a modifying or superseding statement
shall not be deemed an admission for any purposes that the
modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an
omission to state a material fact that is required to be stated
or that is necessary to make a statement not misleading in light
of the circumstances in which it was made. Any statement so
modified or superseded shall not constitute a part of this
prospectus supplement or the prospectus except as so modified or
superseded.
S-1
WHERE YOU
CAN FIND MORE INFORMATION
Information has been incorporated by reference in this
prospectus supplement and the prospectus from documents filed
with the SEC and the OSC. Copies of the documents
incorporated by reference into this prospectus supplement and
the accompanying prospectus may be obtained on request without
charge from the Corporate Secretary, Rogers Communications Inc.,
333 Bloor Street East, 10th Floor, Toronto, Ontario, M4W
1G9, Tel:
416-935-7777.
Copies of documents that we have filed with the OSC may be
obtained over the Internet at the Canadian Securities
Administrators website at www.sedar.com.
In addition to our continuous disclosure obligations under the
securities laws of the provinces of Canada, we are subject to
the informational requirements of the Exchange Act and, in
accordance therewith, file or furnish reports and other
information with or to the SEC. Our recent SEC filings may be
obtained over the Internet at the SECs website at
www.sec.gov. You may also read and copy any document we file or
furnish with or to the SEC at the public reference facilities
maintained by the SEC at 100 F Street N.E.,
Washington, D.C. 20549. Please call
1-800-SEC-0330
for further information on the operations of the public
reference facilities and copying charges. Copies of reports and
other information concerning us may be inspected at the offices
of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
EXCHANGE
RATES
The following table sets forth for each period indicated, the
high and low exchange rates and the average of such exchange
rates on the last business day of each month during such period,
based on the noon buying rate in The City of New York for cable
transfers in Canadian dollars as certified for customs purposes
by the Federal Reserve Bank of New York (the noon buying
rate). These rates are set forth as United States dollars
per $1.00. On July 30, 2008, the inverse of the noon buying
rate was US$0.9804 per $1.00.
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Year Ended
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Average(1)
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High
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Low
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Period End
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December 31, 2007
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.9376
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1.0908
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.8437
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1.0120
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December 31, 2006
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.8844
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.9100
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.8528
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.8582
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December 31, 2005
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.8276
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.8690
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.7872
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.8579
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Six Months Ended
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Average(1)
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Low
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Period End
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June 30, 2008
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.9950
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1.0291
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.9714
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.9818
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June 30, 2007
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.8899
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.9453
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.8437
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.9404
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June 30, 2006
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.8841
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.9100
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.8531
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.8969
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(1) |
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The average of the exchange rates on the last business day of
each month during the applicable period. |
S-2
FORWARD-LOOKING
STATEMENTS
This prospectus supplement and the accompanying prospectus
(including the documents incorporated by reference herein and
therein) includes forward-looking information,
within the meaning of applicable Canadian securities laws and
forward-looking statements, within the meaning of
the United States Private Securities Litigation Reform Act of
1995 (collectively referred to herein as forward-looking
information or forward-looking statements),
concerning, among other things, the future performance of our
business, operations and financial performance and condition.
This forward-looking information includes, but is not limited
to, statements with respect to our objectives and strategies to
achieve those objectives, as well as statements with respect to
our beliefs, plans, expectations, anticipations, estimates or
intentions. This forward-looking information also includes, but
is not limited to, guidance relating to revenue, operating
profit, property, plant and equipment expenditures, free cash
flow, expected growth in subscribers, the deployment of new
services, integration costs, and all other statements that are
not historical facts. The words could,
expect, may, anticipate,
assume, believe, intend,
estimate, plan, project,
guidance and similar expressions are intended to
identify statements containing forward-looking information,
although not all forward-looking statements include such words.
Forward-looking information is based on current expectations and
various factors and assumptions applied which we believe to be
reasonable at the time applied, including but not limited to
general economic and industry growth rates, currency exchange
rates, product and service pricing levels and competitive
intensity, subscriber growth and usage rates, changes in
government regulation, technology deployment, device
availability, the timing of new product launches, content and
equipment costs, the integration of acquisitions, and industry
structure and stability.
We caution that all forward-looking information is inherently
uncertain and actual results may differ materially from the
assumptions, estimates or expectations reflected or contained in
the forward-looking information. A number of risk factors could
cause our future, actual results and performance to differ
materially from those in the forward-looking information,
including, but not limited to:
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economic conditions,
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technological change,
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the integration of acquisitions,
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the failure to achieve anticipated results from synergy
initiatives,
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unanticipated changes in content or equipment costs,
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changing conditions in the entertainment, information and
communications industries,
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regulatory changes,
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changes in law, litigation, tax matters, employee relations and
pension issues,
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the level of competitive intensity, and
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the emergence of new opportunities.
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Many of these risks are beyond our control and current
expectation and knowledge. Therefore, should one or more of
these risks materialize, or should assumptions underlying the
forward-looking information prove incorrect, our actual results
and performance may vary significantly from what we currently
foresee. Accordingly, we warn investors to exercise caution when
considering any statements herein containing forward-looking
information and to not place undue reliance on such statements
and underlying assumptions. We are under no obligation (and
expressly disclaim any such obligation) to update or alter
statements containing forward-looking information whether as a
result of new information, future events or otherwise, except as
required by law. Before making any investment decision in
respect of the notes, see the risk factors incorporated by
reference into and included in this prospectus supplement and
the accompanying prospectus, including those referenced in the
Risk Factors section of the accompanying prospectus
and those described under Risks Related to the Notes
in this prospectus supplement, for a more detailed discussion of
factors that may affect our actual results and performance.
S-3
SUMMARY
OF THE OFFERING
The following summary of the terms of the offering of the
notes is subject to, and should be read in conjunction with, the
more detailed information appearing elsewhere in, and
incorporated by reference into, this prospectus supplement and
the accompanying prospectus. For purposes of this Summary
of the Offering, the words we, us, our and RCI refer to
Rogers Communications Inc. (or its successors, if any, under the
indenture governing the notes) and not any of its
subsidiaries.
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Issuer: |
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Rogers Communications Inc. |
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Guarantors: |
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Rogers Cable Communications Inc. (RCCI) and Rogers
Wireless Partnership (RWP) |
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Guarantees: |
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The payment of principal, premium, if any, and interest on the
notes will be fully and unconditionally guaranteed, jointly and
severally, by two of our wholly-owned subsidiaries, RCCI and
RWP. These guarantees may be released in certain circumstances.
See Description of the Notes Guarantees and
Ranking. |
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Debt Securities Offered: |
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US$1,400 million aggregate principal amount of
6.80% Senior Notes Due August 15, 2018. |
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US$350 million aggregate principal amount of
7.50% Senior Notes Due August 15, 2038 |
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Interest Rate and Interest Payment Dates: |
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We will pay interest on the 2018 notes at the rate of 6.80% per
year on February 15 and August 15 of each year,
beginning on February 15, 2009. |
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We will pay interest on the 2038 notes at the rate of 7.50% per
year on February 15 and August 15 of each year,
beginning on February 15, 2009. |
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Issue Date: |
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August 6, 2008. |
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Maturity Date: |
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The 2018 notes will mature on August 15, 2018. |
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The 2038 notes will mature on August 15, 2038. |
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Ranking: |
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The notes and the guarantees will be unsecured, unsubordinated
obligations of RCI and the guarantors, respectively, and will
rank pari passu with our and the guarantors
existing and future unsecured, unsubordinated debt. The notes
will be effectively subordinated to (1) any of our and the
guarantors existing and future secured debt to the extent
of the assets securing such debt and (2) all existing and
future debt and other liabilities of our subsidiaries (other
than the guarantors, for so long as their guarantee remains in
effect). |
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Use of Proceeds: |
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We estimate that our net proceeds from the sale of the notes,
after deducting the underwriting commissions and the estimated
expenses of this offering payable by us, will be approximately
US$1,732 million. We intend to use the net proceeds for
general corporate purposes, including the uses more specifically
described in the section entitled Use of Proceeds. |
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Optional Redemption: |
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The notes of each series are redeemable, in whole or in part, at
our option at any time, at 100% of their principal amount plus a
make-whole premium described in this prospectus supplement. See
Description of the Notes Optional
Redemption. |
S-4
|
|
|
Tax Redemption: |
|
The notes of each series also will be subject to redemption in
the event we become or would become obligated to pay Additional
Amounts with respect to such notes as a result of certain
changes involving Canadian taxation laws or treaties. See
Description of Debt Securities
Redemption Upon Changes in Withholding Taxes in the
accompanying prospectus. |
|
Additional Amounts: |
|
Any payments made by us or a guarantor, as the case may be, with
respect to either series of the notes, or the guarantees
thereon, will be made without withholding or deduction for
Canadian taxes unless required by law. Subject to certain
exclusions, if we or a guarantor, as the case may be, are
required by law to withhold or deduct for Canadian taxes with
respect to a payment to the holders of the notes, we or a
guarantor, as applicable, will pay the additional amount
necessary so that the net amount received by the holders of the
notes after the withholding or deduction is not less than the
amount that they could have received in the absence of the
withholding or deduction. See the section entitled
Description of Debt Securities Additional
Amounts in the accompanying prospectus. |
|
Change in Control: |
|
If we experience a change in control and there is a specified
decline in the credit rating of a series of the notes, we will
be required to make an offer to purchase all of the notes of
such series at a price equal to 101% of their principal amount
plus accrued interest to the date of purchase in order to avoid
an event of default under the notes of such series. See
Description of the Notes Events of
Default Change in Control Triggering Event. |
|
Certain Covenants: |
|
The indenture governing the notes contains covenants that, among
other things, limit the ability of: |
|
|
|
RCI to incur
additional secured debt and enter into sale and leaseback
transactions; and
|
|
|
|
RCIs
Restricted Subsidiaries to incur additional debt and
enter into sale and leaseback transactions.
|
|
|
|
The covenants are subject to important exceptions, limitations
and qualifications which are summarized under Description
of the Notes in this prospectus supplement and
Description of Debt Securities in the accompanying
prospectus. On the initial issue date of the notes, all of
RCIs subsidiaries will be Restricted
Subsidiaries. |
|
Form and Denomination: |
|
The notes of each series will be issued in the form of one or
more global securities that will be deposited with, or on behalf
of the depositary, The Depository Trust Company. Interests
in the global securities will be issued only in denominations of
US$2,000 or integral multiples of US$1,000 in excess thereof.
Except as described under Description of the
Notes Book-Entry System, notes of any series
in definitive form will not be issued. |
|
|
|
|
|
Credit Ratings:
|
|
Moodys Investors Service Inc.:
|
|
Baa3 (Positive outlook)
|
|
|
Standard & Poors Ratings Services:
|
|
BBB− (Positive outlook)
|
|
|
Fitch Ratings Ltd.:
|
|
BBB (Stable outlook)
|
S-5
|
|
|
|
|
A securities rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any
time. For further information, see Credit Ratings. |
|
Risk Factors: |
|
Investment in the notes involves certain risks. Before deciding
to invest in the notes, you should consider carefully the risk
factors referenced in the Risk Factors section of
the accompanying prospectus and those described in the
Risks Related to the Notes section of this
prospectus supplement, as well as the other information in the
documents incorporated by reference herein. |
|
Governing Law: |
|
New York. |
|
Potential Canadian Debt Offering: |
|
In the near future, we may offer debt securities denominated in
Canadian dollars in Canada, depending on, among other things,
market conditions. |
S-6
RISKS
RELATED TO THE NOTES
An investment in the notes involves risk. In addition to
the risks set forth below and the other information contained in
this prospectus supplement and the accompanying prospectus, you
should consider carefully the risks and uncertainties described
in the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus.
Discussions of certain risks and uncertainties affecting our
business are provided in our annual information form, our
managements discussion and analysis for the year ended
December 31, 2007 and our managements discussion and
analysis for the three and six months ended June 30, 2008,
each of which are incorporated by reference into this prospectus
supplement. Any of these risks could materially adversely affect
our business, financial condition or results of operations.
Additional risks not currently known to us or that we currently
deem to be immaterial may also materially and adversely affect
our business, financial condition or results of operations.
The notes
and guarantees will be effectively subordinated to the debt and
other liabilities of our non-guarantor subsidiaries and to any
of our and the guarantors secured debt.
Subject to the release provisions described herein, the notes
will be unconditionally guaranteed on a senior, unsecured basis
by two of our wholly-owned subsidiaries, RCCI and RWP. Our other
subsidiaries will not guarantee or otherwise be responsible for
the payment of principal or interest or other payments required
to be made by us on the notes. Accordingly, the notes will
effectively be subordinated to all existing and future
liabilities (including trade payables and debt) of such
subsidiaries and, upon any release of their respective
guarantees, RCCI and RWP. We conduct a substantial portion of
our operations through, and hold a substantial portion of our
assets in, our non-guarantor subsidiaries. As a result, our
ability to meet our financial obligations, including servicing
our debt under the notes, depends significantly upon our receipt
of funds from these non-guarantor subsidiaries. These
subsidiaries are distinct legal entities and have no obligation
to make funds available to us to pay our obligations under the
notes. In the event of an insolvency, bankruptcy, liquidation,
reorganization or similar proceeding in respect of any of our
subsidiaries that are not, at the time, guaranteeing the notes,
holders of the notes will have no right to proceed against the
assets of such non-guarantor subsidiaries. Creditors of such
non-guarantor subsidiaries would generally be entitled to
payment in full from such assets before any assets are made
available for distribution to Rogers Communications Inc., RCCI
or RWP to pay their respective debts and other obligations. As
of June 30, 2008, our subsidiaries (excluding the
guarantors) had in the aggregate approximately $9 million
of debt and other liabilities (excluding intercompany
liabilities and current liabilities). Pursuant to the terms of
our existing debt obligations, including those of the notes, our
subsidiaries are permitted to incur additional debt subject to
certain limitations.
The notes and subsidiary guarantees will also be effectively
subordinated in right of payment to all existing and any future
secured debt of Rogers Communications Inc. and the guarantors,
respectively, to the extent of the value of the assets securing
such debt. In the event of an insolvency, bankruptcy,
liquidation, reorganization or similar proceeding, the assets of
Rogers Communications Inc. or of a guarantor, as applicable,
that serve as collateral under any such secured debt would be
made available to satisfy the obligations under the secured debt
before any payments are made on the notes or the applicable
subsidiary guarantee. As of June 30, 2008, Rogers
Communications Inc. and the guarantors had in the aggregate
approximately $1.4 million of secured debt. Pursuant to the
terms of our existing debt obligations, including those of the
notes, we may incur additional secured debt subject to certain
limitations.
There can
be no assurance that a trading market for the notes will develop
or as to the liquidity of any trading market that might develop
for the notes.
There is no established trading market for the notes and we do
not intend to have the notes listed on any securities exchange.
We have been informed by the underwriters that they presently
intend to make a market in the notes after this offering is
completed, as permitted by applicable laws and regulations. The
underwriters are not obligated, however, to make a market in the
notes and any market making may be discontinued at any time at
the sole discretion of the underwriters. In addition, the
liquidity of the trading market in the notes and the market
price quoted for the notes may be adversely affected by, among
other things, changes in the overall market for debt securities
and by changes in our financial performance or prospects or in
the prospects for companies in our industry
S-7
generally. As a result, you cannot be sure that an active
trading market will develop for the notes or as to the liquidity
of any trading market that may develop.
Credit
ratings may change adversely affecting the market value of the
notes and our cost of capital. Adverse changes to the credit
ratings assigned to some of our outstanding public debt may also
subject us to certain restrictive covenants.
There is no assurance that the credit ratings assigned to a
particular series of notes will remain in effect for any given
period of time or that any such rating will not be lowered or
withdrawn entirely by the relevant rating agency. Real or
anticipated changes in credit ratings assigned to a particular
series of notes will generally affect the market price of such
notes. In addition, real or anticipated changes in our credit
ratings may also affect the cost at which we can access the
capital markets.
Some of our outstanding public debt indentures contain
restrictive covenants to which we are not subject for so long as
more than one rating agency assigns the debt issued under the
indenture an investment grade rating and we are not in default
of our obligations under the indenture. If we fail to meet these
conditions, we will again be subject to these restrictive
covenants which will limit our operating flexibility and may
limit our ability to execute our business strategy.
We may be
unable to purchase the notes upon a change in control triggering
event.
If we experience a change in control and a particular series of
the notes experiences a specified credit rating decline, we will
be required to offer to purchase the notes of such series for
cash at a price equal to 101% of the principal amount of such
notes plus accrued interest to the date of purchase in order to
avoid an event of default under such notes. See
Description of the Notes Events of
Default Change in Control Triggering Event. A
change in control and a specified credit rating decline under
the terms of any series of notes is likely to correspond with a
change in control and a specified credit rating decline under
the terms of our other public debt, which would require us to
make a similar offer to purchase with respect to that debt in
order to avoid an event of default thereunder. In addition, a
change in control and a specified credit rating decline in
respect of our senior public debt will constitute an event of
default under our bank credit facility. In the event of a change
in control and a specified credit rating decline relating to our
debt, we may not have sufficient funds to purchase all of the
affected notes, in addition to all of our existing public debt,
and to repay the amounts outstanding under our bank credit
facility.
S-8
ROGERS
COMMUNICATIONS INC.
We are a diversified public Canadian communications and media
company. We are engaged in wireless voice and data
communications services through Rogers Wireless, Canadas
largest wireless provider and the operator of the countrys
only national GSM/HSPA based network. Rogers Cable is one of
Canadas largest providers of cable television services as
well as high-speed Internet access and telephony services.
Rogers Media Inc. (Rogers Media) is engaged in radio
and television broadcasting, televised shopping, magazines and
trade publications, and sports entertainment.
Rogers
Wireless
We are Canadas largest provider of wireless communications
service, serving approximately 7.5 million retail voice and
data customers as at June 30, 2008. We are a
facilities-based carrier operating our wireless networks over a
broad, national coverage area, much of which is interconnected
by our own fibre-optic and microwave transmission
infrastructure. We are Canadas only national carrier
operating on the global standard GSM and advanced 3G HSPA
technology platforms. Subscribers to our wireless services have
access to these services across the U.S. through roaming
agreements with various wireless operators. Our subscribers also
have access to wireless voice and data service internationally
through roaming agreements with other GSM wireless providers.
Rogers
Cable
We are one of Canadas largest providers of cable
television services as well as high-speed Internet access and
telephony services. We provide this diverse range of services
through our highly-clustered and technologically advanced
broadband networks in Ontario, New Brunswick and Newfoundland
and Labrador. Our Cable business is comprised of three segments.
Through our Cable Operations segment we provide basic and
digital cable services as well as high-speed Internet service to
residential subscribers. We also offer local telephone and long
distance services to residential customers with both
voice-over-cable and circuit-switched technologies. Through our
Rogers Business Solutions segment, we offer local and long
distance telephone, enhanced voice and data services, and IP
access to Canadian businesses and governments, as well as making
most of these offerings available on a wholesale basis to other
telecommunications providers. Our Rogers Retail segment operates
a retail distribution chain that offers Rogers branded home
entertainment and wireless products and services. In our Rogers
Retail segment, we also offer digital video disc and video game
sales and rentals through Canadas second largest chain of
video rental stores.
Rogers
Media
Rogers Media operates our radio and television broadcasting
operations, our consumer and trade publishing operations, our
televised home shopping service and the Toronto Blue Jays and
Rogers Centre. The Broadcasting group at Rogers Media is
comprised of 52 radio stations across Canada, a number of
Canadian conventional and specialty television services and a
nationally televised shopping service. This Broadcasting group
also holds a 50% interest in a mobile production and
distribution joint venture and minority interests in several
Canadian specialty television services. Rogers Medias
Publishing group publishes approximately 70 consumer
magazines and trade and professional publications and
directories in Canada.
S-9
THE
GUARANTORS
RCCI is an Ontario corporation and a wholly-owned subsidiary of
RCI through which we principally own and operate our Rogers
Cable business.
RWP is an Ontario partnership and a subsidiary of RCI that,
along with Fido Solutions Inc., a wholly-owned subsidiary of
RCI, principally owns and operates the Rogers Wireless business.
RCI holds the majority of the partnership units of RWP, while
the remaining partnership units of RWP are held by Fido
Solutions Inc. and RCCI.
The following table sets forth the selected unaudited
consolidating summary financial information for RCI for the
periods identified below, presented with a separate column for:
(i) RCI; (ii) RCCI and RWP (the
Guarantors), on a combined basis; (iii) our
non-guarantor subsidiaries (the Other Subsidiaries)
on a combined basis; (iv) consolidating adjustments; and
(v) the total consolidated amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended June 30 and Years Ended December 31
(unaudited)
|
|
|
|
RCI (1)(2)(3)(4)
|
|
|
Guarantors (1)(2)(3)(4)(5)
|
|
|
Other Subsidiaries (2)(3)(4)
|
|
|
Consolidating Adjustments (2)(3)(4)
|
|
|
Total Consolidated Amounts
|
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
June 30
|
|
|
Dec. 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
|
(In millions of dollars)
|
|
|
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
42
|
|
|
$
|
75
|
|
|
$
|
37
|
|
|
$
|
6
|
|
|
$
|
4,020
|
|
|
$
|
7,461
|
|
|
$
|
3,549
|
|
|
$
|
6,810
|
|
|
$
|
1,517
|
|
|
$
|
2,934
|
|
|
$
|
1,407
|
|
|
$
|
2,370
|
|
|
$
|
(167
|
)
|
|
$
|
(347
|
)
|
|
$
|
(168
|
)
|
|
$
|
(348
|
)
|
|
$
|
5,412
|
|
|
$
|
10,123
|
|
|
$
|
4,825
|
|
|
$
|
8,838
|
|
Operating Income (loss)
|
|
|
(59
|
)
|
|
|
(352
|
)
|
|
|
(281
|
)
|
|
|
(48
|
)
|
|
|
1,148
|
|
|
|
1,612
|
|
|
|
686
|
|
|
|
1,334
|
|
|
|
288
|
|
|
|
456
|
|
|
|
159
|
|
|
|
231
|
|
|
|
(146
|
)
|
|
|
(220
|
)
|
|
|
(133
|
)
|
|
|
(226
|
)
|
|
|
1,231
|
|
|
|
1,496
|
|
|
|
431
|
|
|
|
1,291
|
|
Net Income (loss)
|
|
|
645
|
|
|
|
637
|
|
|
|
114
|
|
|
|
622
|
|
|
|
1,035
|
|
|
|
1,479
|
|
|
|
638
|
|
|
|
1,127
|
|
|
|
1,241
|
|
|
|
16
|
|
|
|
(13
|
)
|
|
|
119
|
|
|
|
(2,276
|
)
|
|
|
(1,495
|
)
|
|
|
(625
|
)
|
|
|
(1,246
|
)
|
|
|
645
|
|
|
|
637
|
|
|
|
114
|
|
|
|
622
|
|
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
2,837
|
|
|
$
|
3,622
|
|
|
$
|
3,780
|
|
|
$
|
3,558
|
|
|
$
|
2,284
|
|
|
$
|
3,669
|
|
|
$
|
2,537
|
|
|
$
|
1,531
|
|
|
$
|
3,827
|
|
|
$
|
2,351
|
|
|
$
|
1,754
|
|
|
$
|
2,051
|
|
|
$
|
(6,922
|
)
|
|
$
|
(7,499
|
)
|
|
$
|
(5,977
|
)
|
|
$
|
(5,406
|
)
|
|
$
|
2,026
|
|
|
$
|
2,143
|
|
|
$
|
2,094
|
|
|
$
|
1,734
|
|
Non-current assets
|
|
|
14,712
|
|
|
|
14,337
|
|
|
|
14,286
|
|
|
|
13,495
|
|
|
|
6,769
|
|
|
|
6,830
|
|
|
|
6,742
|
|
|
|
6,433
|
|
|
|
5,192
|
|
|
|
5,175
|
|
|
|
1,176
|
|
|
|
567
|
|
|
|
(13,456
|
)
|
|
|
(13,160
|
)
|
|
|
(9,492
|
)
|
|
|
(8,124
|
)
|
|
|
13,217
|
|
|
|
13,182
|
|
|
|
12,712
|
|
|
|
12,371
|
|
Current liabilities
|
|
|
2,865
|
|
|
|
3,321
|
|
|
|
2,390
|
|
|
|
2,237
|
|
|
|
5,934
|
|
|
|
5,885
|
|
|
|
5,352
|
|
|
|
5,169
|
|
|
|
591
|
|
|
|
1,047
|
|
|
|
512
|
|
|
|
527
|
|
|
|
(6,925
|
)
|
|
|
(7,511
|
)
|
|
|
(6,035
|
)
|
|
|
(5,463
|
)
|
|
|
2,465
|
|
|
|
2,742
|
|
|
|
2,219
|
|
|
|
2,470
|
|
Non-current liabilities
|
|
|
7,545
|
|
|
|
7,651
|
|
|
|
8,249
|
|
|
|
7,111
|
|
|
|
164
|
|
|
|
170
|
|
|
|
167
|
|
|
|
109
|
|
|
|
9
|
|
|
|
17
|
|
|
|
4
|
|
|
|
196
|
|
|
|
285
|
|
|
|
121
|
|
|
|
(12
|
)
|
|
|
19
|
|
|
|
8,003
|
|
|
|
7,959
|
|
|
|
8,408
|
|
|
|
7,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended June 30 (unaudited)
|
|
|
|
RCI (1)(2)(3)(4)
|
|
|
Guarantors (1)(2)(3)(4)
|
|
|
Other Subsidiaries (2)(3)(4)
|
|
|
Consolidating Adjustments (2)(3)(4)
|
|
|
Total Consolidated Amounts
|
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
|
(In millions of dollars)
|
|
|
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
21
|
|
|
$
|
19
|
|
|
$
|
2,055
|
|
|
$
|
1,863
|
|
|
$
|
817
|
|
|
$
|
735
|
|
|
$
|
(90
|
)
|
|
$
|
(90
|
)
|
|
$
|
2,803
|
|
|
$
|
2,527
|
|
Operating Income (loss)
|
|
|
(77
|
)
|
|
|
(254
|
)
|
|
|
557
|
|
|
|
289
|
|
|
|
165
|
|
|
|
59
|
|
|
|
(69
|
)
|
|
|
(61
|
)
|
|
|
576
|
|
|
|
33
|
|
Net income (loss)
|
|
|
301
|
|
|
|
(56
|
)
|
|
|
512
|
|
|
|
291
|
|
|
|
430
|
|
|
|
(17
|
)
|
|
|
(942
|
)
|
|
|
(274
|
)
|
|
|
301
|
|
|
|
(56
|
)
|
Notes:
|
|
|
(1)
|
|
See Recent Developments
in the accompanying prospectus. All information contained in the
foregoing table is presented as if the intracompany amalgamation
that occurred on July 1, 2007, as well as the provision of
the RCCI and RWP guarantees in respect of our bank debt, our
public debt and our cross-currency interest rate exchange
agreements, had occurred at the start of the earliest period
presented (i.e. January 1, 2006). The unsecured guarantors
are Rogers Wireless Partnership and Rogers Cable Communications
Inc.
|
|
(2)
|
|
Effective December 31, 2006 we
terminated the management fee arrangements which had previously
been in place between RCI and each of Rogers Wireless Inc.,
Rogers Cable Inc. and Rogers Media Inc. and, as a result,
commencing January 1, 2007 the management fees are no
longer paid to RCI by these segments. Such fees paid to RCI
totaled approximately $93 million for the year ended
December 31, 2006.
|
|
(3)
|
|
In December 2006 and January 2007,
certain real estate assets having an aggregate net book value of
$137.2 million and $81.9 million, respectively,
together with the related premises leases were transferred to
RCI by certain of its subsidiaries.
|
|
(4)
|
|
For the purposes of this table,
investments in subsidiary companies are accounted for by the
equity method.
|
|
(5)
|
|
Amounts recorded in current
liabilities and non-current liabilities for the guarantors do
not include any obligations arising as a result of being a
guarantor or co-obligor, as the case may be, under any of
RCIs long-term debt.
|
S-10
SELECTED
CONSOLIDATED FINANCIAL AND OPERATING DATA
The selected financial data presented below for and as of the
end of each of the two years ended December 31, 2007 are
derived from our audited consolidated financial statements as at
and for the years ended December 31, 2007 and 2006, which
have been audited by KPMG LLP, as indicated in their report
incorporated by reference in this prospectus supplement and
accompanying prospectus. The selected financial data presented
below as at June 30, 2008 and 2007 and for the six months
ended June 30, 2008 and 2007 are derived from our unaudited
interim consolidated financial statements as at June 30,
2008 and 2007 and for the six months ended June 30, 2008
and 2007, which, in the opinion of management, include all
adjustments (consisting solely of normal recurring adjustments)
necessary to present fairly the financial results for such
periods. Interim results are not necessarily indicative of the
results that may be expected for any other interim period or for
a full year.
The following data should be read in conjunction with our
audited consolidated financial statements for the years ended
December 31, 2007 and 2006 and our unaudited interim
consolidated financial statements as at June 30, 2008 and
2007 and for the six months ended June 30, 2008 and 2007,
the notes related to those consolidated financial statements and
our managements discussion and analysis in respect of
those statements. Each of our audited consolidated financial
statements and the related notes thereto for the years ended
December 31, 2007 and 2006 and our unaudited interim
consolidated financial statements and the related notes thereto
as at June 30, 2008 and for the six months ended
June 30, 2008 and 2007 and our managements discussion
and analysis in respect of those statements are incorporated by
reference into this prospectus supplement.
SELECTED
FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
|
|
|
Years Ended
|
|
|
|
June 30
|
|
|
December 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
|
In millions of dollars
|
|
|
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
$
|
2,953
|
|
|
$
|
2,595
|
|
|
$
|
5,503
|
|
|
$
|
4,580
|
|
Cable
|
|
|
1,863
|
|
|
|
1,736
|
|
|
|
3,558
|
|
|
|
3,201
|
|
Media
|
|
|
716
|
|
|
|
614
|
|
|
|
1,317
|
|
|
|
1,210
|
|
Corporate and eliminations
|
|
|
(120
|
)
|
|
|
(120
|
)
|
|
|
(255
|
)
|
|
|
(153
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
5,412
|
|
|
$
|
4,825
|
|
|
$
|
10,123
|
|
|
$
|
8,838
|
|
Adjusted operating profit(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
1,474
|
|
|
|
1,245
|
|
|
|
2,589
|
|
|
|
1,987
|
|
Cable
|
|
|
602
|
|
|
|
471
|
|
|
|
1,016
|
|
|
|
916
|
|
Media
|
|
|
53
|
|
|
|
64
|
|
|
|
176
|
|
|
|
156
|
|
Corporate and eliminations
|
|
|
(62
|
)
|
|
|
(36
|
)
|
|
|
(78
|
)
|
|
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,067
|
|
|
$
|
1,744
|
|
|
$
|
3,703
|
|
|
$
|
2,942
|
|
Other operating (income) and expense, net(2)
|
|
|
(24
|
)
|
|
|
515
|
|
|
|
604
|
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit(1)
|
|
$
|
2,091
|
|
|
$
|
1,229
|
|
|
$
|
3,099
|
|
|
$
|
2,875
|
|
Depreciation & Amortization
|
|
|
860
|
|
|
|
798
|
|
|
|
1,603
|
|
|
|
1,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
1,231
|
|
|
$
|
431
|
|
|
$
|
1,496
|
|
|
$
|
1,291
|
|
Interest on long-term debt
|
|
|
271
|
|
|
|
301
|
|
|
|
579
|
|
|
|
620
|
|
Other (income) and expense, net
|
|
|
(8
|
)
|
|
|
17
|
|
|
|
31
|
|
|
|
(7
|
)
|
Income tax expense (recovery)
|
|
|
323
|
|
|
|
(1
|
)
|
|
|
249
|
|
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
645
|
|
|
$
|
114
|
|
|
$
|
637
|
|
|
$
|
622
|
|
S-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
|
|
|
Years Ended
|
|
|
|
June 30
|
|
|
December 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operations, before change in non-cash operating
working capital items
|
|
$
|
1,821
|
|
|
$
|
1,469
|
|
|
$
|
3,135
|
|
|
$
|
2,386
|
|
Change in non-cash operating working capital items
|
|
|
(244
|
)
|
|
|
(465
|
)
|
|
|
(310
|
)
|
|
|
63
|
|
Cash used in investing activities
|
|
|
(1,083
|
)
|
|
|
(1,046
|
)
|
|
|
(2,438
|
)
|
|
|
(1,633
|
)
|
Additions to property, plant and equipment including related
working capital changes (included in cash from investing
activities above)
|
|
|
(856
|
)
|
|
|
(889
|
)
|
|
|
(1,816
|
)
|
|
|
(1,578
|
)
|
Cash provided by (used in) financing activities
|
|
|
(478
|
)
|
|
|
30
|
|
|
|
(429
|
)
|
|
|
(731
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
|
|
|
Years Ended
|
|
|
|
June 30
|
|
|
December 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
2,026
|
|
|
$
|
2,094
|
|
|
$
|
2,143
|
|
|
$
|
1,734
|
|
Property, plant and equipment
|
|
|
7,423
|
|
|
|
6,888
|
|
|
|
7,289
|
|
|
|
6,732
|
|
Goodwill
|
|
|
3,139
|
|
|
|
2,797
|
|
|
|
3,027
|
|
|
|
2,779
|
|
Intangible assets
|
|
|
1,981
|
|
|
|
2,083
|
|
|
|
2,086
|
|
|
|
2,152
|
|
Total Assets
|
|
|
15,243
|
|
|
|
14,806
|
|
|
|
15,325
|
|
|
|
14,105
|
|
Current liabilities(3)(4)
|
|
|
2,465
|
|
|
|
2,219
|
|
|
|
2,742
|
|
|
|
2,470
|
|
Senior debt(3)(5)
|
|
|
5,552
|
|
|
|
6,227
|
|
|
|
5,638
|
|
|
|
6,522
|
|
Total debt(3)
|
|
|
5,959
|
|
|
|
6,652
|
|
|
|
6,033
|
|
|
|
6,988
|
|
Derivative instruments(4)
|
|
|
1,743
|
|
|
|
1,593
|
|
|
|
1,804
|
|
|
|
776
|
|
Total Liabilities
|
|
|
10,468
|
|
|
|
10,627
|
|
|
|
10,701
|
|
|
|
9,905
|
|
Shareholders equity
|
|
|
4,775
|
|
|
|
4,179
|
|
|
|
4,624
|
|
|
|
4,200
|
|
SELECTED
SUBSCRIBER DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
|
|
|
Years Ended
|
|
|
|
June 30
|
|
|
December 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
|
In thousands, except ARPU
|
|
|
|
and monthly churn
|
|
|
Wireless subscriber statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net additions (post-paid)
|
|
|
188
|
|
|
|
228
|
|
|
|
581
|
|
|
|
580
|
|
ARPU (post-paid)(6)
|
|
$
|
73.95
|
|
|
$
|
70.18
|
|
|
$
|
72.21
|
|
|
$
|
67.27
|
|
Monthly churn (post-paid)
|
|
|
1.08
|
%
|
|
|
1.16
|
%
|
|
|
1.15
|
%
|
|
|
1.32
|
%
|
Total subscribers (post-paid and pre-paid, excluding one-way)
|
|
|
7,505
|
|
|
|
6,912
|
|
|
|
7,338
|
|
|
|
6,778
|
|
S-12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
|
|
|
Years Ended
|
|
|
|
June 30
|
|
|
December 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
Cable subscriber statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Cable subscribers
|
|
|
2,298
|
|
|
|
2,266
|
|
|
|
2,295
|
|
|
|
2,277
|
|
High-speed Internet subscribers (residential)
|
|
|
1,534
|
|
|
|
1,364
|
|
|
|
1,465
|
|
|
|
1,297
|
|
Digital Cable households
|
|
|
1,431
|
|
|
|
1,237
|
|
|
|
1,353
|
|
|
|
1,134
|
|
Rogers Home Phone subscriber lines(7)
|
|
|
1,043
|
|
|
|
853
|
|
|
|
990
|
|
|
|
716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue generating units(8)
|
|
|
6,306
|
|
|
|
5,720
|
|
|
|
6,103
|
|
|
|
5,424
|
|
|
|
|
(1) |
|
Adjusted operating profit and operating profit are non-GAAP
measures. See the section entitled Key Performance
Indicators and Non-GAAP Measures in this prospectus
supplement for further information. |
|
(2) |
|
Other operating (income) and expenses, net, includes the
following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
|
|
|
Years Ended
|
|
|
|
June 30
|
|
|
December 31
|
|
|
|
2008
|
|
|
2007
|
|
|
2007
|
|
|
2006
|
|
|
Stock-based compensation expense (recovery)
|
|
$
|
(63
|
)
|
|
$
|
47
|
|
|
$
|
62
|
|
|
$
|
49
|
|
Amendment to stock option plans
|
|
|
|
|
|
|
452
|
|
|
|
452
|
|
|
|
|
|
Integration & restructuring expense
|
|
|
8
|
|
|
|
16
|
|
|
|
38
|
|
|
|
18
|
|
Contract renegotiation fee
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
|
|
|
Adjustment for CRTC Part II fees decision
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(24
|
)
|
|
$
|
515
|
|
|
$
|
604
|
|
|
$
|
67
|
|
|
|
|
(3) |
|
Current liabilities, senior debt and total debt include the
current portion of long-term debt. |
|
(4) |
|
Current liabilities and derivative instruments include the
current portion of derivative instruments. |
|
(5) |
|
Senior debt is total debt less the subordinated long-term debt
outstanding under our 8.00% Senior Subordinated Notes due
2012. |
|
(6) |
|
ARPU means average monthly revenue per user. See the
section entitled Key Performance Indicators and
Non-GAAP Measures in this prospectus supplement for
further information. |
|
(7) |
|
Rogers Home Phone subscriber lines refers to both residential
cable and circuit-switched telephony subscribers. |
|
(8) |
|
Revenue generating units are comprised of basic cable
subscribers, digital cable households, residential high-speed
Internet subscribers and Rogers Home Phone subscriber lines. |
S-13
USE OF
PROCEEDS
Our estimated net proceeds from the sale of the notes, after
deducting the underwriting commissions and the estimated
expenses of this offering payable by us, will be approximately
US$1,732 million. We intend to use the net proceeds for
general corporate purposes, including the repayment of a portion
of our outstanding debt. Pending any such use, we may invest the
net proceeds in bank deposits and short-term marketable
securities.
CONSOLIDATED
CAPITALIZATION
The following table summarizes our consolidated cash and cash
equivalents and our consolidated capitalization as at
June 30, 2008, on an actual basis and as adjusted to give
effect to the issuance of the notes offered hereby and assuming
our application of a portion of the estimated net proceeds
therefrom to repay outstanding advances under our bank credit
facility. This table should be read together with our audited
consolidated financial statements and the related notes thereto
for the years ended December 31, 2007 and 2006 and our
unaudited interim consolidated financial statements and the
related notes thereto as at June 30, 2008 and for the three
and six months ended June 30, 2008 and 2007, each of which
are incorporated by reference into this prospectus supplement.
For the purposes of this table, all U.S. dollar amounts
have been translated into Canadian dollars based on the noon
rate of exchange as reported by the Bank of Canada on
June 30, 2008 of US$1.00 = $1.0186.
|
|
|
|
|
|
|
|
|
|
|
June 30, 2008,
|
|
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
(In millions of Canadian dollars)
|
|
|
Cash and cash equivalents (bank advances arising from
outstanding cheques)(1)
|
|
$
|
(45
|
)
|
|
$
|
679
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (including current portion):
|
|
|
|
|
|
|
|
|
Bank credit facility(1)(2)(3)
|
|
$
|
1,040
|
|
|
$
|
|
|
Outstanding Senior Public Debt:(4)(5)
|
|
|
|
|
|
|
|
|
9.625% Senior Notes Due 2011
|
|
|
499
|
|
|
|
499
|
|
7.625% Senior Notes Due 2011
|
|
|
460
|
|
|
|
460
|
|
7.25% Senior Notes Due 2011
|
|
|
175
|
|
|
|
175
|
|
7.25% Senior Notes Due 2012
|
|
|
479
|
|
|
|
479
|
|
7.875% Senior Notes Due 2012
|
|
|
357
|
|
|
|
357
|
|
6.25% Senior Notes Due 2013
|
|
|
357
|
|
|
|
357
|
|
6.375% Senior Notes Due 2014
|
|
|
764
|
|
|
|
764
|
|
5.50% Senior Notes Due 2014
|
|
|
357
|
|
|
|
357
|
|
7.50% Senior Notes Due 2015
|
|
|
560
|
|
|
|
560
|
|
6.75% Senior Notes Due 2015
|
|
|
285
|
|
|
|
285
|
|
8.75% Senior Debentures Due 2032
|
|
|
204
|
|
|
|
204
|
|
Capital leases and other
|
|
|
15
|
|
|
|
15
|
|
8.00% Senior Subordinated Notes Due 2012(4)(6)
|
|
|
407
|
|
|
|
407
|
|
2018 notes offered hereby
|
|
|
|
|
|
|
1,426
|
|
2038 notes offered hereby
|
|
|
|
|
|
|
356
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt (including current portion)
|
|
$
|
5,959
|
|
|
|
6,701
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity
|
|
$
|
4,775
|
|
|
|
4,775
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
10,734
|
|
|
$
|
11,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
We expect to use available cash together with advances under our
bank credit facility to pay for the new wireless spectrum
licenses to be acquired by us as part of the Canadian
governments auction of wireless spectrum licenses. |
|
(2) |
|
RCI has an unsecured revolving bank credit facility that
provides for total commitments of up to $2.4 billion,
subject to compliance with, among other things, certain
financial covenants. RCIs obligations under this bank |
S-14
|
|
|
|
|
credit facility are guaranteed by RCCI and RWP. For further
details in respect of this credit facility, see Note 15 to
our audited consolidated financial statements as at and for the
years ended December 31, 2007 and 2006 and Note 5 to
our unaudited interim consolidated financial statements as at
June 30, 2008 and for the three and six months ended
June 30, 2008 and 2007. The amount presented under
Bank credit facility does not include bank advances
arising from outstanding cheques. |
|
(3) |
|
In July, 2008, RCI entered into an additional credit agreement
with certain Canadian financial institutions for an unsecured
revolving credit facility of up to $500 million available
until maturity 364 days following the closing date of this
credit facility. RCIs obligations under this credit
facility are guaranteed by RCCI and RWP. As at the date of this
prospectus supplement, we had not drawn any funds under this
credit facility. We intend to terminate this credit facility
shortly after the closing of this offering. |
|
(4) |
|
On July 1, 2007, RCI amalgamated with, among other
subsidiaries, its then wholly-owned subsidiaries, Rogers Cable
Inc. (Cable) and Rogers Wireless Inc.
(Wireless), and assumed all of these
subsidiaries rights and obligations under their
outstanding public debt indentures. As part of the amalgamation
process, on June 29, 2007, Cable and Wireless released all
security provided by bonds issued under the Cable deed of trust
and the Wireless deed of trust for all of the then outstanding
Cable and Wireless senior public debt. As a result, none of our
senior public debt outstanding on that date remains secured by
such bonds effective as of June 29, 2007. For further
details in respect of this senior public debt, see Note 15
to our audited consolidated financial statements as at and for
the years ended December 31, 2007 and 2006 and Note 5
to our unaudited consolidated financial statements as at
June 30, 2008 and for the three and six months ended
June 30, 2008 and 2007. See Recent Developments
in the accompanying prospectus. |
|
(5) |
|
RCIs obligations under this senior public debt are
guaranteed by (or are the co-obligations of, as applicable) RCCI
and RWP. |
|
(6) |
|
RCIs obligations under these subordinated notes are the
co-obligations of RWP and are guaranteed by RCCI. |
EARNINGS
COVERAGE
The following pro forma earnings coverage ratios and associated
financial information have been calculated on a consolidated
basis for the
12-month
periods ended December 31, 2007 and June 30, 2008
based on our financial statements for the respective periods and
have been prepared in accordance with Canadian GAAP. The pro
forma information gives effect to the offering of the notes
under this prospectus supplement and the assumed application of
a portion of the net proceeds to repay outstanding advances
under our bank credit facility as if the offering and such
repayment had occurred on January 1, 2007 and July 1,
2007 in respect of the
12-months
ended December 31, 2007 and June 30, 2008,
respectively. The pro forma information does not give effect to
adjustments for normal course advances and repayments of
long-term debt under our bank credit facility subsequent to
June 30, 2008 as these would not materially affect the
ratios.
|
|
|
|
|
|
|
|
|
|
|
12 Months Ended
|
|
|
12 Months Ended
|
|
|
|
December 31, 2007
|
|
|
June 30, 2008
|
|
|
Earnings before interest expense and income taxes
|
|
$
|
1,465 million
|
|
|
$
|
2,290 million
|
|
Pro forma interest requirements(1)
|
|
$
|
682 million
|
|
|
$
|
652 million
|
|
Pro forma earnings coverage ratio(2)
|
|
|
2.15x
|
|
|
|
3.51x
|
|
|
|
|
(1) |
|
Pro forma interest requirements refers to our aggregate interest
expense in respect of our long-term debt obligations for the
applicable period as adjusted to reflect the items noted above
the table. |
|
(2) |
|
Pro forma earnings coverage ratio refers to the ratio of
(i) our earnings before interest expense and income taxes
for the applicable period and (ii) our pro forma interest
requirements for the applicable period. |
S-15
DESCRIPTION
OF THE NOTES
Each of the 6.80% senior notes due 2018 (the 2018
notes) and the 7.50% senior notes due 2038 (the
2038 notes) constitutes a series of senior
debt securities as described in the accompanying
prospectus. Each of these series of notes will be issued under
its own supplemental indenture (each, a Supplemental
Indenture) which, for purposes of that series, will
supplement the terms and conditions applicable to senior
debt securities in the indenture to be dated as of the
original issue date of the notes between RCI and The Bank of New
York Mellon, as trustee (as supplemented by supplemental
indentures from time to time, excluding supplemental indentures
establishing the terms of a series of debt securities, the
Base Indenture). References in this prospectus
supplement to the Indenture are to the Base
Indenture as supplemented by the Supplemental Indenture
applicable to the series of notes.
This description of the particular terms of these notes
supplements and, to the extent inconsistent therewith, replaces
the description of the general terms and provisions of the debt
securities found in the accompanying prospectus with respect to
the notes being offered by this prospectus supplement. This
description is qualified in its entirety by reference to all of
the provisions of the applicable notes and the applicable
Indenture.
Capitalized terms used and not otherwise defined below or
elsewhere in this prospectus supplement have the meanings given
to them in the accompanying prospectus. For purposes of this
Description of the Notes, the words we, us, our and
RCI refer to Rogers Communications Inc. (or its successors, if
any, under the Indenture) and not any of its subsidiaries. Any
reference to the notes contained in this prospectus
supplement refers to both the 2018 notes and the 2038 notes
unless the context indicates otherwise.
General
The 2018 notes will be issued in an initial aggregate principal
amount of US$1,400,000,000 and will mature on August 15,
2018. The 2018 notes will bear interest at a rate of 6.80% per
year from and including August 6, 2008 or from the most
recent interest payment date to which interest has been paid.
The 2038 notes will be issued in an initial aggregate principal
amount of US$350,000,000 and will mature on August 15,
2038. The 2038 notes will bear interest at a rate of 7.50% per
year from and including August 6, 2008 or from the most
recent interest payment date to which interest has been paid.
Interest on each of the 2018 notes is payable semi-annually in
arrears on February 15 and August 15 of each year,
beginning on February 15, 2009, to the person in whose name
such note is registered at the close of business on the
February 1 or August 1 next preceding such interest
payment date. Interest on each of the 2038 notes is payable
semi-annually in arrears on February 15 and August 15
of each year, beginning on February 15, 2009, to the person
in whose name such note is registered at the close of business
on the February 1 or August 1 next preceding such
interest payment date. To the extent lawful, interest will
accrue on any overdue interest at the same rate. Interest will
be computed on the basis of a
360-day year
comprised of twelve
30-day
months.
We may from time to time without notice to, or the consent of,
the holders of a particular series of the notes, create and
issue additional notes of the same series equal in rank to the
notes of that series described herein in all respects (or in all
respects except for the payment of interest accruing prior to
the issue date of the additional notes or except for the first
payment of interest following the issue date of the additional
notes) so that the additional notes may be consolidated and form
a single series with the other notes of that series described
herein and have the same terms as to status, redemption or
otherwise as such other notes described herein, as applicable.
Principal of, premium, if any, and interest on the notes
including, if applicable, the Change in Control Purchase Price
in relation to the notes will be paid in United States dollars.
Principal of, premium, if any, and interest on the notes will be
payable, and the notes will be exchangeable and transferable, at
the corporate trust office of the trustee, The Bank of New York
Mellon, in The City of New York (currently located at 101
Barclay Street, Floor 4-East, New York, New York, 10286), or at
such other office or agency, in The City of New York or
elsewhere, as may be designated and maintained by RCI for such
purpose; provided, however, that payment of interest on
the notes may be made at the option of RCI by check mailed to
the person entitled thereto as shown on the applicable
securities register. Notwithstanding the foregoing, the final
payment of principal shall be payable only upon surrender of the
note to the paying agent.
S-16
The notes will be issued only in fully registered form without
coupons, in denominations of US$2,000 or any integral multiple
of US$1,000 in excess thereof. Subject to the terms of the
Indenture, no service charge will be made for any registration
of transfer or exchange or redemption of notes, except for
certain taxes or other governmental charges that may be imposed
in connection with any registration of transfer or exchange.
The notes will not be entitled to the benefit of any sinking
fund.
Guarantees
and Ranking
The payment of principal, premium, if any, and interest on the
notes of each series will be fully and unconditionally
guaranteed (the guarantees), jointly and severally,
by two of RCIs wholly-owned subsidiaries, RCCI and RWP
(collectively, the guarantors). The guarantees will
be fully and unconditionally guaranteed by RCI on an unsecured,
unsubordinated basis. Any payments made by a guarantor with
respect to a note or guarantee will be made without withholding
or deduction for or on account of Taxes unless required by law
or by interpretation or administration thereof. If a guarantor
is so required to withhold or deduct any amount for or on
account of Taxes, such guarantor will pay Additional Amounts on
the same terms, and subject to the same conditions and
limitations, as would apply to RCI if it were required to pay
Additional Amounts. See the section entitled Description
of Debt Securities Additional Amounts in the
accompanying prospectus.
The Indenture and the guarantees will provide that each
guarantor will be released and relieved of its obligations under
its guarantee in respect of a series of notes, and that
guarantee will be terminated, upon the request of RCI (without
the consent of the trustee) if, immediately after giving effect
to such release (and any other concurrent release, termination,
repayment or discharge of any other guarantee or other debt of
such guarantor), RCI would be in compliance with the
Limitation on Restricted Subsidiary Debt covenant
described below under Additional
Covenants. Notwithstanding the above, the guarantee of a
guarantor may not be released pursuant to the above provisions
if, immediately after the release, that guarantor remains a
co-obligor or guarantor in respect of any of RCIs existing
public debt securities outstanding on the date hereof. Among
other things, the above release provisions will permit the
release and termination of a guarantee in the event of a sale or
other disposition as a result of which the applicable guarantor
would cease to be a Subsidiary of RCI provided that RCI is in
compliance with the aforementioned covenant after giving pro
forma effect for such disposition (including the application of
any proceeds therefrom). Other than in accordance with these
release provisions, or the other release provisions provided for
in the Indenture, no guarantor will be released from its payment
obligations under its guarantee and no amendment or waiver of
these release provisions will be permitted except, in each case,
with the consent of the holder of each outstanding note of the
affected series. RCI may also, at its option, and at any time,
elect to have its obligations and the obligations of the
guarantors discharged with respect to the notes upon fulfillment
of the conditions described in the accompanying prospectus under
Description of Debt Securities Defeasance and
Covenant Defeasance of Indenture.
The Indenture and the guarantees will provide that, unless a
guarantor has already been released, or in connection with the
applicable transaction will be released, from its obligations
under its guarantee in accordance with the above release
provisions or any other release provision set forth in the
Indenture, that guarantor will not amalgamate or consolidate
with or merge with or into any other Person or convey, transfer,
lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person by liquidation,
winding-up
or otherwise (in one transaction or a series of related
transactions) unless (a) immediately after giving effect to
such transaction (and treating any Debt which becomes an
obligation of the guarantor or a subsidiary of the guarantor in
connection with or as a result of such transaction as having
been incurred at the time of such transaction), no Default or
Event of Default shall have occurred and be continuing and
(b) either (1) the guarantor will be the continuing
Person or (2) the Person (if other than the guarantor)
formed by such consolidation or amalgamation or into which the
guarantor is merged or the Person that acquires by conveyance,
transfer, lease or other disposition the properties and assets
of the guarantor substantially as an entirety shall, unless that
Person is RCI, (i) be a corporation, company, partnership
or trust organized and validly existing under (A) the
federal laws of Canada or the laws of any Province thereof or
(B) the laws of the United States or any State thereof or
the District of Columbia and (ii) assume by operation of
law or expressly assume, by a supplemental indenture, all of the
obligations of the applicable guarantor under its guarantee. In
the event of any transaction described in and complying with the
conditions listed in this paragraph in which the guarantor is
not the continuing corporation, the successor or continuing
Person formed or
S-17
remaining will succeed to, and be substituted for, and may
exercise every right and power of, such guarantor under the
Indenture and thereafter, except in the case of a lease, such
guarantor will be released and relieved from all of its
obligations under its guarantee.
The notes and the guarantees will be unsecured, unsubordinated
obligations of RCI and the guarantors, respectively, and will
rank pari passu with our and the guarantors
existing and future unsecured, unsubordinated debt. The notes
will be effectively subordinated to (1) all of our and the
guarantors existing and future secured debt to the extent
of the assets securing such debt and (2) all existing and
future debt and other liabilities of our subsidiaries (other
than the guarantors, for so long as their guarantee remains in
effect). As of June 30, 2008, our subsidiaries (excluding
the guarantors) had in the aggregate approximately
$9 million of debt and other liabilities (excluding
intercompany liabilities and current liabilities) and RCI and
the guarantors had in the aggregate approximately
$1.4 million of secured debt.
Optional
Redemption
The notes of each series will be redeemable, in whole or in
part, at the option of RCI at any time at a redemption price
equal to the greater of:
(1) 100% of the principal amount of the notes of the series
to be redeemed, and
(2) as determined by the Quotation Agent, the sum of the
present values of the remaining scheduled payments of principal
and interest on the notes of the series to be redeemed (not
including any portion of the payments of interest accrued as of
the date of redemption) discounted to the redemption date on a
semi-annual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the Adjusted Treasury Rate plus 40 basis points,
in the case of the 2018 notes, or 45 basis points, in the
case of the 2038 notes,
plus, in each case, accrued interest thereon to the date of
redemption.
Adjusted Treasury Rate means, with
respect to any redemption date, the rate per year equal to the
semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for the redemption date.
Comparable Treasury Issue means the
United States Treasury security selected by the Quotation Agent
as having a maturity comparable to the remaining term of the
notes of the series to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt of comparable
maturity to the remaining term of the notes of the series to be
redeemed.
Comparable Treasury Price means, with
respect to any redemption date, the average of the Reference
Treasury Dealer Quotations for the redemption date.
Quotation Agent means the Reference
Treasury Dealer appointed by RCI.
Reference Treasury Dealer means
(i) either of Citigroup Global Markets Inc. or
J.P. Morgan Securities Inc. or any successor of either
entity; provided, however, that if either shall
cease to be a primary U.S. Government securities dealer in
New York City (a Primary Treasury Dealer), RCI shall
substitute for such dealer another Primary Treasury Dealer; and
(ii) any other Primary Treasury Dealer(s) selected by RCI.
Reference Treasury Dealer Quotations
means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the
Reference Treasury Dealer, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted by the Reference
Treasury Dealer at 5:00 p.m. on the third business day
preceding the redemption date.
The notes of each series also will be subject to redemption in
connection with certain changes in applicable withholding taxes.
See Description of Debt Securities
Redemption Upon Changes in Withholding Taxes in the
accompanying prospectus.
RCI will not be obligated, pursuant to mandatory sinking fund
payments or otherwise, to redeem the notes and will not be
obligated, at the option of the holder, to purchase or repay the
notes.
S-18
Certain
Definitions
Attributable Debt means, as of the
date of its determination, the present value (discounted
semi-annually at the interest rate implicit in the terms of the
lease) of the obligation of a lessee for rental payments
pursuant to any Sale and Leaseback Transaction (reduced by the
amount of the rental obligations of any sublessee of all or part
of the same property) during the remaining term of such Sale and
Leaseback Transaction (including any period for which the lease
relating thereto has been extended), such rental payments not to
include amounts payable by the lessee for maintenance and
repairs, insurance, taxes, assessments and similar charges and
for contingent rates (such as those based on sales);
provided, however, that in the case of any Sale and
Leaseback Transaction in which the lease is terminable by the
lessee upon the payment of a penalty, Attributable Debt shall
mean the lesser of the present value of (i) the rental
payments to be paid under such Sale and Leaseback Transaction
until the first date (after the date of such determination) upon
which it may be so terminated plus the then applicable penalty
upon such termination and (ii) the rental payments required
to be paid during the remaining term of such Sale and Leaseback
Transaction (assuming such termination provision is not
exercised).
Consolidated Net Tangible Assets means
the Consolidated Tangible Assets of any Person, less such
Persons current liabilities.
Consolidated Tangible Assets means the
Tangible Assets of any Person after eliminating inter-company
items, determined on a Consolidated basis in accordance with
GAAP including appropriate deductions for any minority interest
in Tangible Assets of such Persons Restricted Subsidiaries.
Consolidation means the consolidation
of the accounts of the Restricted Subsidiaries with those of
RCI, if and to the extent the accounts of each such Restricted
Subsidiary would normally be consolidated with those of RCI, all
in accordance with GAAP; provided, however, that
Consolidation will not include consolidation of the
accounts of any Unrestricted Subsidiary. For purposes of
clarification, it is understood that the accounts of RCI or any
Restricted Subsidiary include the accounts of any partnership,
the beneficial interests in which are controlled (in accordance
with GAAP) by RCI or any such Restricted Subsidiary. The term
Consolidated has a correlative meaning.
Disqualified Stock means any Capital
Stock of RCI or any Restricted Subsidiary which, by its terms
(or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder) or
upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the maturity date of the applicable
series of debt securities for cash or securities constituting
Debt; provided that shares of preferred stock of RCI or
any Restricted Subsidiary that are issued with the benefit of
provisions requiring a change in control offer to be made for
such shares in the event of a change in control of RCI or such
Restricted Subsidiary, which provisions have substantially the
same effect as the provisions described in Events of
Default Change in Control Triggering Event,
shall not be deemed to be Disqualified Stock solely
by virtue of such provisions. For purposes of this definition,
the term Debt includes Inter-Company Subordinated
Debt.
Excluded Assets means (i) all
assets of any Person other than RCI or a Restricted Subsidiary;
(ii) Investments in the Capital Stock of an Unrestricted
Subsidiary held by RCI or a Restricted Subsidiary;
(iii) any Investment by RCI or a Restricted Subsidiary to
the extent paid for with cash or other property that constitutes
Excluded Assets or Excluded Securities, so long as at the time
of acquisition thereof and after giving effect thereto there
exists no Default or Event of Default; and (iv) proceeds of
the sale of any Excluded Assets or Excluded Securities received
by RCI or any Restricted Subsidiary from a Person other than RCI
or a Restricted Subsidiary.
Excluded Securities means any Debt,
preferred stock or common stock issued by RCI, or any Debt or
preferred stock issued by any Restricted Subsidiary, in either
case to an Affiliate thereof other than RCI or a Restricted
Subsidiary, provided that, at all times, such Excluded
Securities shall:
(i) in the case of Debt not owed to RCI or a Restricted
Subsidiary, constitute Inter-Company Subordinated Debt;
(ii) in the case of Debt, not be guaranteed by RCI or any
Restricted Subsidiary unless such guarantee shall constitute
Inter-Company Subordinated Debt;
S-19
(iii) in the case of Debt, not be secured by any assets or
property of RCI or any Restricted Subsidiary;
(iv) in the case of Debt or preferred stock, provide by its
terms that interest or dividends thereon shall be payable only
to the extent that, after giving effect to any such payment, no
Default or Event of Default shall have occurred and be
continuing; and
(v) in the case of Debt or preferred stock, provide by its
terms that no payment (other than payments in the form of
Excluded Securities) on account of principal (at maturity, by
operation of sinking fund or mandatory redemption or otherwise)
or other payment on account of redemption, repurchase,
retirement or acquisition of such Excluded Security shall be
permitted until the earlier of (x) the final maturity of
the notes or (y) the date on which all principal of,
premium, if any, and interest on notes shall have been duly paid
or provided for in full.
Investment means (i) directly or
indirectly, any advance, loan or capital contribution to, the
purchase of any stock, bonds, notes, debentures or other
securities of, the acquisition, by purchase or otherwise, of all
or substantially all of the business or assets or stock or other
evidence of beneficial ownership of, any Person or making of any
investment in any Person, (ii) the designation of any
Restricted Subsidiary as an Unrestricted Subsidiary and
(iii) the transfer of any assets or properties from RCI or
a Restricted Subsidiary to any Unrestricted Subsidiary, other
than the transfer of assets or properties made in the ordinary
course of business. Investments shall exclude extensions of
trade credit on commercially reasonable terms in accordance with
normal trade practices.
Lien means any mortgage, charge,
pledge, lien, privilege, security interest, hypothecation and
transfer, lease of real property or other encumbrance upon or
with respect to any property of any kind, real or personal,
moveable or immoveable, now owned or hereafter acquired.
Net Tangible Assets means the Tangible
Assets of any Person, less such Persons current
liabilities.
Permitted Liens means any of the
following Liens:
(i) Liens for taxes, rates and assessments not yet due or,
if due, the validity of which is being contested diligently and
in good faith by appropriate proceedings by RCI or any of the
Restricted Subsidiaries (as applicable); and Liens for the
excess of the amount of any past due taxes for which a final
assessment has not been received over the amount of such taxes
as estimated and paid;
(ii) the Lien of any judgment rendered which is being
contested diligently and in good faith by appropriate
proceedings by RCI, or any of the Restricted Subsidiaries, as
the case may be, and which does not have a material adverse
effect on the ability of RCI and the Restricted Subsidiaries to
operate the business or operations of RCI;
(iii) Liens on Excluded Assets;
(iv) pledges or deposits under workers compensation
laws, unemployment insurance laws or similar legislation or good
faith deposits in connection with bids, tenders, contracts
(other than for the payment of Debt) or leases or deposits of
cash or bonds or other direct obligations of the United States,
Canada or any Canadian province to secure surety or appeal bonds
or deposits as security for contested taxes or import duties or
for the payment of rents;
(v) Liens imposed by law, such as carriers,
warehousemens and mechanics liens, or other liens
arising out of judgments or awards with respect to which an
appeal or other proceeding for review is being prosecuted (and
as to which any foreclosure or other enforcement proceeding
shall have been effectively stayed);
(vi) Liens for property taxes not yet subject to penalties
for non-payment or which are being contested in good faith and
by appropriate proceedings (and as to which foreclosure or other
enforcement proceedings shall have been effectively stayed);
(vii) Liens in favor of issuers of surety bonds issued in
the ordinary course of business;
(viii) minor survey exceptions, minor encumbrances,
easements or reservations of or rights of others for rights of
way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to
the use of real properties or Liens incidental to the conduct of
the business of the Person
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incurring them or the ownership of its properties which were not
incurred in connection with Debt or other extensions of credit
and which do not in the aggregate materially detract from the
value of such properties or materially impair their use in the
operation of the business of such Person;
(ix) Liens in favor of Bell Canada under any partial system
agreement or related agreement providing for the construction
and installation by Bell Canada of cables, attachments,
connectors, support structures, closures and other equipment in
accordance with the plans and specifications of RCI or any
Restricted Subsidiary and the lease by Bell Canada of such
equipment to RCI or any Restricted Subsidiary in accordance with
tariffs published by Bell Canada from time to time as approved
by regulatory authorities, the absence of which would materially
and adversely affect RCI and its Restricted Subsidiaries
considered as a whole; and
(x) any other Lien existing on the initial issue date of
the notes.
Principal Property means, as of any
date of determination, any land, land improvements or building
(and associated factory, laboratory, office and switching
equipment (excluding all products marketed by RCI or any of its
Subsidiaries)) constituting a manufacturing, development,
warehouse, service, office or operating facility owned by or
leased to RCI or a Restricted Subsidiary, located within Canada
and having an acquisition cost plus capitalized improvements in
excess of 0.25% of Consolidated Net Tangible Assets of RCI as of
such date of determination, other than any such property
(i) which our Board of Directors determines is not of
material importance to RCI and its Restricted Subsidiaries taken
as a whole, (ii) which is not used in the ordinary course
of business or (iii) in which the interest of RCI and all
its Subsidiaries does not exceed 50%.
Sale and Leaseback Transaction means
any arrangement with any Person providing for the leasing by RCI
or any Restricted Subsidiary of any Principal Property (whether
such Principal Property is now owned or hereafter acquired) that
has been or is to be sold or transferred by RCI or such
Restricted Subsidiary to such Person, other than
(i) temporary leases for a term, including renewals at the
option of the lessee, of not more than three years,
(ii) leases between RCI and a Restricted Subsidiary or
between Restricted Subsidiaries and (iii) leases of
Principal Property executed by the time of, or within
180 days after the latest of, the acquisition, the
completion of construction or improvement (including any
improvements on property which will result in such property
becoming Principal Property), or the commencement of commercial
operation of such Principal Property.
Secured Debt means:
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Debt of RCI or any Restricted Subsidiary secured by any Lien
upon any Principal Property or the stock or Debt of a Restricted
Subsidiary (other than a Restricted Subsidiary that guarantees
the payment obligations of RCI under the applicable series of
notes); or
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any conditional sale or other title retention agreement covering
any Principal Property or Restricted Subsidiary;
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but does not include any Debt secured by any Lien or any
conditional sale or other title retention agreement:
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incurred or entered into on or after the initial issue date of
the notes to finance the acquisition, improvement or
construction of such property and either secured by Purchase
Money Obligations or Liens placed on such property within
180 days of acquisition, improvement or construction and
securing Debt not to exceed 2.5% of RCIs Consolidated Net
Tangible Assets at any time outstanding;
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on Principal Property or the stock or Debt of Restricted
Subsidiaries and existing at the time of acquisition of the
property, stock or Debt;
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owing to RCI or any other Restricted Subsidiary; or
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existing at the time a corporation or other Person becomes a
Restricted Subsidiary;
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each of the foregoing being referred to as Exempted
Secured Debt.
Tangible Assets means, at any date,
the gross book value as shown by the accounting books and
records of any Person of all its property both real and
personal, less (i) the net book value of all its licenses,
patents, patent applications, copyrights, trademarks, trade
names, goodwill, non-compete agreements or organizational
expenses and other like intangibles, (ii) unamortized Debt
discount and expenses, (iii) all reserves for depreciation,
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obsolescence, depletion and amortization of its properties and
(iv) all other proper reserves which in accordance with
GAAP should be provided in connection with the business
conducted by such Person.
Events of
Default
Change
in Control Triggering Event
A Change in Control means (i) any transaction
(including an amalgamation, merger or consolidation or the sale
of Capital Stock of RCI) the result of which is that any Person
or group of Persons (as the term group is used in
Rule 13d-5
under the Exchange Act), other than Members of the Rogers Family
or a Person or group of Persons consisting of or controlled,
directly or indirectly, by one or more of the Members of the
Rogers Family, acquires, directly or indirectly, more than 50%
of the total voting power of all classes of Voting Shares of RCI
or (ii) any transaction (including an amalgamation, merger
or consolidation or the sale of Capital Stock of RCI) the result
of which is that any Person or group of Persons, other than
(A) Members of the Rogers Family or a Person or group of
Persons consisting of or controlled, directly or indirectly, by
one or more of the Members of the Rogers Family or (B) for
so long as the only primary beneficiaries of a Qualifying Trust
established under the last will and testament of Edward S.
Rogers are one or more Individuals or Additional Spouses (as
such terms are defined in the definition of Member of the
Rogers Family), any Person designated by the trustees of
such Qualifying Trust (as such term is defined in the definition
of Member of the Rogers Family) to exercise voting
rights attaching to any shares held by such trustees, has
elected to the Board of Directors of RCI such number of its or
their nominees so that such nominees so elected shall constitute
a majority of the number of the directors comprising the Board
of Directors of RCI, provided that to the extent that one
or more regulatory approvals are required for any of the
transactions or circumstances described in clauses (i) or
(ii) above to become effective under applicable law, such
transactions or circumstances shall be deemed to have occurred
at the time such approvals have been obtained and become
effective under applicable law.
Fitch means Fitch Ratings Ltd. or any
successor to the rating agency business thereof.
Investment Grade Rating means a rating
equal to or higher than BBB− (or the equivalent) by
S&P, Baa3 (or the equivalent) by Moodys or BBB−
(or the equivalent) by Fitch.
Member of the Rogers Family means
Edward S. Rogers who was born on May 27, 1933, such
individual being referred to as Edward S. Rogers,
his Spouse, his issue (including adoptees of any of the
foregoing adopted prior to their age of majority and their
issue), Ann Taylor Graham Calderisi, the half-sister of Edward
S. Rogers, the issue of Ann Taylor Graham Calderisi and the
trustees of any trust in which any one or more of the foregoing
individuals (Individuals) or the Spouse of the issue
(including adoptees of such persons adopted prior to their age
of majority and their issue) of Edward S. Rogers or Ann Taylor
Graham Calderisi (Additional Spouses) have a
beneficial interest (a Qualifying Trust) but, in the
case of a Qualifying Trust, only to the extent of the aggregate
percentage of the voting securities of RCI held or controlled by
the Qualifying Trust that it is reasonable to regard as being
held, directly or indirectly, for the benefit of Individuals and
Additional Spouses.
Moodys means Moodys
Investors Service, Inc. or any successor to the rating agency
business thereof.
Rating Agencies means S&P,
Moodys and Fitch, and each of such Rating Agencies is
referred to individually as a Rating Agency.
Rating Date means the date which is
90 days prior to the earlier of (i) a Change in
Control and (ii) public notice of the occurrence of a
Change in Control or of the intention of RCI to effect a Change
in Control.
Rating Decline means, in respect of a
particular series, the occurrence of the following on, or within
90 days after, the date of public notice of the occurrence
of a Change in Control or of the intention by RCI to effect a
Change in Control (which period shall be extended so long as the
rating of such notes is under publicly announced consideration
for possible downgrade by any of the Rating Agencies):
(i) in the event the notes of such particular series are
assigned an Investment Grade Rating by at least two of the three
Rating Agencies on the Rating Date, the rating of the notes of
such series by at least two of the three Rating Agencies shall
be below an Investment Grade Rating; or (ii) in the event
the notes of such series are rated below an Investment Grade
Rating by at least two of the three Rating Agencies on the
Rating Date, the rating of the notes of such series by at least
two of the three Rating
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Agencies shall be decreased by one or more gradations (including
gradations within rating categories as well as between rating
categories).
S&P means Standard &
Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor to the rating agency business
thereof.
Spouse means, in relation to any
person, a person who is legally married to that person and
includes a widow or widower of that person, notwithstanding
remarriage.
In addition to the Events of Default specified in the
accompanying prospectus under Description of Debt
Securities Events of Default, the occurrence
of any Change in Control Triggering Event with respect to a
series of notes will also constitute an Event of Default for
that series of notes; provided, however, that holders of
the notes of such particular series may not declare the
principal of the notes of such series due and payable following
an Event of Default arising from a Change in Control Triggering
Event, and such Event of Default will be cured, if,
(i) within 20 business days after the occurrence of the
Change in Control Triggering Event, RCI notifies the trustee in
writing of such event and makes an offer to all holders of the
notes of the affected series to purchase all outstanding notes
of such series properly tendered (a Change in Control
Offer) at a purchase price (the Change in Control
Purchase Price) equal to 101% of the principal amount
thereof plus any accrued and unpaid interest to the Change in
Control Purchase Date (as defined below) and (ii) on the
date that is 40 business days after the occurrence of the Change
in Control Triggering Event (the Change in Control
Purchase Date) all notes of the affected series properly
tendered into the Change in Control Offer are purchased. A
Change in Control Triggering Event will be deemed to
occur with respect to a series of notes only upon the occurrence
of both a Change in Control and a Rating Decline with respect to
such series.
In order to effect a Change in Control Offer, RCI shall, within
20 business days after the occurrence of the Change in Control
Triggering Event, notify the trustee, who shall mail to each
holder of notes of the affected series a copy of the Change in
Control Offer, which shall state, among other things, the
procedures that holders must follow to accept the Change in
Control Offer. In the event of a Change in Control Offer, RCI
shall comply with all applicable tender offer rules including
Rule 14e-1
under the Exchange Act, to the extent applicable.
The Event of Default arising upon a Change in Control Triggering
Event also will be cured if a third party makes the Change in
Control Offer in the manner and at the times and otherwise in
compliance with the requirements applicable to a Change in
Control Offer to be made by RCI, including the obligations of
RCI described in the accompanying prospectus under
Description of Debt Securities Additional
Amounts, and purchases all outstanding notes of the
affected series properly tendered under such Change in Control
Offer.
An Event of Default arising from a Change in Control Triggering
Event may only be waived with the consent of the holders of all
outstanding notes of the applicable series.
Our bank credit facility and the indentures governing our
outstanding public debt contain similar provisions regarding
changes in control and specified credit rating declines. In the
event of a change in control and a specified credit rating
decline relating to such debt, such debt, together with the
notes to be issued hereunder, could become due and payable.
Acceleration
and Rescission
If an Event of Default (other than an Event of Default specified
in clause (f) of the section of the accompanying prospectus
entitled Description of Debt Securities Events
of Default) shall occur and be continuing in respect of a
series of debt securities, the trustee or the holders of not
less than 25% in aggregate principal amount of the outstanding
debt securities of the affected series may declare the principal
of all outstanding debt securities of such series due and
payable; provided, however, that holders of either series
of the notes may not declare the principal of the notes of such
series due and payable upon an Event of Default arising upon a
Change in Control Triggering Event unless and until RCI (or a
third party, as applicable) fails in any material respect to
comply with the provisions of the applicable Supplemental
Indenture that establish the requirements for the associated
Change of Control Offer. If an Event of Default specified in
clause (f) of the section of the accompanying prospectus
entitled Description of Debt Securities Events
of Default occurs and is continuing in respect of a series
of debt securities, then the
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principal of all outstanding debt securities of such series
shall become due and payable without any declaration or other
act on the part of the trustee or any holder of such series.
At any time after a declaration of acceleration with respect to
one or more series of debt securities has been made, but before
a judgment or decree for payment of the money due has been
obtained by the trustee, the holders of a majority in aggregate
principal amount of the outstanding debt securities of any such
affected series acting in writing may, on behalf of the holders
of all the debt securities of such individual series, rescind
and annul such declaration of acceleration and its consequences
if (a) RCI has paid or deposited, or caused to be paid or
deposited, with the trustee a sum sufficient to pay (i) all
sums paid or advanced by the trustee with respect to such series
of debt securities and the reasonable compensation, expenses,
disbursements and advances of the trustee, its agents and
counsel, (ii) the principal of, and interest, premium or
other amounts, if any, on, any debt securities of such series
that have become due and payable otherwise than by such
declaration of acceleration, and (iii) for purposes of each
series of the notes, interest upon overdue interest at the
interest rate provided for in the notes of such series to the
extent that payment of such interest is lawful; and (b) all
Events of Default in respect of such series, other than the
nonpayment of principal of, or interest, premium or other
amounts, if any, on, the debt securities of such series which
have become due solely by such declaration of acceleration, have
been cured or waived.
The Base Indenture contains a provision entitling the trustee to
be funded and indemnified by the holders of debt securities of
the applicable series before proceeding to exercise any right or
power under the Base Indenture or the supplemental indenture
establishing such series at the request or direction of such
holders. Subject to such provisions for funding and
indemnification of the trustee and certain other limitations and
conditions contained in the Base Indenture, the Base Indenture
provides that the holders of a majority in aggregate principal
amount of outstanding debt securities of the applicable series
may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising
any trust or power conferred upon the trustee under the Base
Indenture (as supplemented for purposes of such debt
securities). The Base Indenture provides that no holder of debt
securities of any series may pursue a remedy with respect to the
Base Indenture (as supplemented for purposes of such debt
securities) except under certain circumstances where the trustee
has failed to act.
Additional
Covenants
The notes of each series will be subject to the covenants
described in the accompanying prospectus. In addition, the notes
of each series will be subject to the additional covenants
described below.
Restricted
Subsidiaries
The Board of Directors of RCI may designate any Restricted
Subsidiary or any Person that is to become a Subsidiary as an
Unrestricted Subsidiary, or RCI or any Restricted Subsidiary may
transfer any assets or properties to an Unrestricted Subsidiary,
if (i) prior to and immediately after such designation, no
Default or Event of Default shall have occurred and be
continuing and (ii) such Subsidiary or Person, together
with all other Unrestricted Subsidiaries, shall not in the
aggregate have Net Tangible Assets greater than 15% of
RCIs Consolidated Net Tangible Assets; provided,
however, that for the purposes of this Restricted
Subsidiaries covenant, (1) RCIs Consolidated
Net Tangible Assets shall also include the aggregate Net
Tangible Assets of such Subsidiary or Person and all other
Unrestricted Subsidiaries and (2) Excluded Assets shall be
excluded from the calculation of Net Tangible Assets and
Consolidated Net Tangible Assets. On the initial issue date of
the notes, none of RCIs Subsidiaries will be designated as
an Unrestricted Subsidiary.
The Board of Directors of RCI may not designate any Unrestricted
Subsidiary as a Restricted Subsidiary unless immediately before
and after giving effect to such designation, no Default or Event
of Default shall have occurred and be continuing.
Nothing in this Restricted Subsidiaries covenant
shall restrict or limit RCI or any Restricted Subsidiary from
transferring any asset that is an Excluded Asset to any
Unrestricted Subsidiary or any Person that is to become an
Unrestricted Subsidiary.
S-24
Limitation
on Secured Debt
RCI will not, and RCI will not permit any of its Restricted
Subsidiaries to, create, assume, incur or guarantee any Secured
Debt unless and for so long as RCI secures, or causes such
Restricted Subsidiary to secure, the notes of the applicable
series equally and ratably with (or prior to) such Secured Debt.
However, any of RCI or its Restricted Subsidiaries may incur
Secured Debt without securing such notes if, immediately after
incurring the Secured Debt, the aggregate principal amount of
all Secured Debt then outstanding plus the aggregate amount of
the Attributable Debt then outstanding pursuant to Sale and
Leaseback Transactions would not exceed 15% of RCIs
Consolidated Net Tangible Assets. The aggregate amount of all
Secured Debt in the preceding sentence excludes Secured Debt
which is secured equally and ratably with the notes of the
applicable series and Secured Debt that is being repaid
concurrently. Any Lien which is granted to secure notes of a
series under this covenant shall be discharged at the same time
as the discharge of the Lien securing the Secured Debt that gave
rise to the obligation to secure such notes under this covenant.
If, upon any consolidation, amalgamation or merger of RCI or a
guarantor, as applicable, with or into any other Person, or upon
any conveyance, transfer, lease or disposition of the properties
of RCI or a guarantor, as applicable, substantially as an
entirety to any Person, in each case as described in the
accompanying prospectus in the section entitled
Description of Debt Securities Mergers,
Amalgamations and Sales of Assets by RCI, in the case of
RCI, and as described in the section of this prospectus
supplement entitled Description of the Notes
Guarantors and Ranking, in the case of a guarantor, any
property or asset of RCI or any Subsidiary of RCI would become
subject to a Lien, then, unless such Lien could be created
pursuant to the covenant described in the paragraph above
without equally and ratably securing the notes of the applicable
series, RCI or the guarantor, as applicable, simultaneously with
or prior to such transaction, will, as to such property or
asset, secure such notes (or cause such notes to be secured)
equally and ratably with (or prior to) the Debt that upon such
transaction is to become secured as to such property or asset by
such Lien.
Limitation
on Sale and Leaseback Transactions
RCI will not, and will not permit any Restricted Subsidiary to,
enter into any Sale and Leaseback Transaction, unless either
(a) immediately thereafter, the sum of (1) the
Attributable Debt to be outstanding pursuant to such Sale and
Leaseback Transaction and all other Sale and Leaseback
Transactions entered into by RCI or a Restricted Subsidiary on
or after the initial issue date of the notes (or, in the case of
a Restricted Subsidiary, the date on which it became a
Restricted Subsidiary, if on or after the initial issue date of
the notes) and (2) the aggregate amount of all Secured
Debt, excluding Secured Debt which is secured equally and
ratably with the notes of the applicable series, would not
exceed 15% of RCIs Consolidated Net Tangible Assets or
(b) an amount, equal to the greater of the net proceeds to
RCI or a Restricted Subsidiary from such sale and the
Attributable Debt to be outstanding pursuant to such Sale and
Leaseback Transaction, is used within 180 days to retire
Debt of RCI or a Restricted Subsidiary. However, Debt which is
subordinate to the notes or which is owed to RCI or a Restricted
Subsidiary may not be retired in satisfaction of clause (b)
above.
Limitation
on Restricted Subsidiary Debt
RCI will not permit any Restricted Subsidiary to, directly or
indirectly, create, incur, assume or suffer to exist any Debt
(other than Debt to the extent that the notes of the applicable
series are secured equally and ratably with (or prior to) such
Debt), unless (1) the obligations of RCI under the notes of
such series are guaranteed (which guarantee may be on an
unsecured basis) by such Restricted Subsidiary such that the
claim of the holders of the notes of such series under such
guarantee ranks prior to or pari passu with such Debt or
(2) after giving effect to the incurrence of such Debt and
the application of the proceeds therefrom, the sum of (without
duplication) (x) the then outstanding aggregate principal
amount of Debt (other than Exempted Secured Debt) of all
Restricted Subsidiaries, (y) the then outstanding aggregate
principal amount of Secured Debt of RCI (not on a Consolidated
basis) and (z) Attributable Debt relating to then
outstanding Sale and Leaseback Transactions, would not exceed
15% of Consolidated Net Tangible Assets; provided,
however, that this restriction will not apply to, and there
will be excluded from any calculation hereunder, (A) Debt
owing by a Restricted Subsidiary to RCI or to another Restricted
Subsidiary and (B) Debt secured by Permitted Liens;
provided, further, that this restriction will not
prohibit the incurrence of Debt in connection with any
extension, renewal or replacement (including successive
extensions, renewals or
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replacements), in whole or in part, of any Debt of the
Restricted Subsidiaries (provided that the principal
amount of such Debt immediately prior to such extension, renewal
or replacement is not increased).
Modification
and Waiver
The Indenture provides that modifications and amendments to the
Base Indenture and the particular terms and conditions of any
series of debt securities issued under the Base Indenture may be
made by RCI (and any applicable guarantors) and the trustee, and
will be made by the trustee upon the request of RCI, with the
consent of the holders of not less than a majority in aggregate
principal amount of the outstanding debt securities of each such
series to which such modification or amendment will apply;
provided, however, that no such modification or amendment
may, without the consent of the holder of each outstanding debt
security of such series affected thereby: (i) change the
Stated Maturity of the principal of, or any installment of
interest on, any such debt security, or reduce the principal
amount thereof or the rate of interest thereon, or reduce the
redemption price thereof, or change the coin or currency in
which any such debt security or any premium or the interest
thereon is payable, or impair the right to institute suit for
the enforcement of any such payment after the Stated Maturity
thereof (or, in the case of redemption, on or after the
applicable redemption date); (ii) reduce the percentage in
principal amount of outstanding debt securities of such series,
the consent of whose holders is necessary to amend or waive
compliance with certain provisions of the Base Indenture or the
supplemental indenture applicable to such series or to waive
certain defaults; or (iii) modify any of the provisions
relating to the modification or amendment of the Base Indenture
or the supplemental indenture applicable to such series which
provisions require the consent of holders of outstanding debt
securities of such series or relating to the waiver of past
defaults or certain covenants, except to increase the percentage
of outstanding debt securities of such series the consent of
whose holders is required for such actions or to provide that
certain other provisions of the Base Indenture or the
supplemental indenture applicable to such series cannot be
modified or waived without the consent of the holder of each
debt security of such series affected thereby. In addition,
modifications and amendments to the Base Indenture and the
particular terms and conditions of any series of debt securities
may be made by RCI (and any applicable guarantors) and the
trustee without the consent of any holders of debt securities in
order to, among other things, (i) provide certain
additional rights or benefits to the holders of any series of
debt securities, (ii) cure any ambiguity or correct or
supplement any defective or inconsistent provision or make any
other change to the Base Indenture or a series of debt
securities, provided, in each case, that such modification or
amendment does not adversely affect the interests of the holders
of debt securities of any such series in any material respect,
and (iii) give effect to any direction or other act of the
holders of a series of debt securities permitted to be given,
made or taken under the Base Indenture (as supplemented for
purposes of such debt securities). Any modification or amendment
to the Base Indenture or the particular terms and conditions of
a series of debt securities that is permitted or authorized for
a particular series will be binding on all holders of debt
securities of that series notwithstanding whether a particular
holder has approved it and, except as otherwise provided in any
required approval for such modification or amendment, regardless
of whether the holders of any other affected series of debt
securities has approved it.
The holders of a majority in aggregate principal amount of the
outstanding debt securities of any affected series may, on
behalf of all holders of the debt securities of such series,
waive RCIs compliance with certain covenants and other
provisions of the Base Indenture that apply to such series of
debt securities and the supplemental indenture applicable to
such series, including any existing default or Event of Default
and its consequences under the Base Indenture and such
supplemental indenture other than a default or Event of Default
(i) in the payment of interest (or premium, if any) on, or
the principal of, the debt securities of that series,
(ii) arising from a Change of Control Triggering Event or
(iii) in respect of a covenant or other provision that
cannot be modified or amended without the consent of the holders
of each outstanding debt security of that series. In addition to
certain covenants and other provisions identified in the Base
Indenture, the Indenture provides that holders of a majority in
aggregate principal amount of the outstanding notes of each
series affected may waive compliance with the additional
covenants set forth above under Additional
Covenants.
Global
Securities
The notes of each series will be issued in the form of one or
more global securities that will be deposited with, or on behalf
of, the depositary, The Depository Trust Company. Interests
in the global securities will be issued only
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in denominations of US$2,000 or integral multiples of US$1,000
in excess thereof. Unless and until it is exchanged in whole or
in part for notes of the particular series in definitive form, a
global security may not be transferred except as a whole to a
nominee of the depositary for the global security, or by a
nominee of the depositary to the depositary or another nominee
of the depositary, or by the depositary or any nominee to a
successor depositary or a nominee of the successor depositary.
Book-Entry
System
Initially, each series of notes will be registered in the name
of Cede & Co., the nominee of the depositary.
Accordingly, beneficial interests in the notes will be shown on,
and transfers thereof will be effected only through, records
maintained by the depositary and its participants.
The depositary has advised us and the underwriters as follows:
the depositary, or DTC, is a limited-purpose trust company
organized under the New York Banking Law, a banking
organization within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a
clearing corporation within the meaning of the New
York Uniform Commercial Code and a clearing agency
registered pursuant to the provisions of Section 17A of the
Exchange Act. The depositary holds securities that its
participants (Direct Participants) deposit with the
depositary. The depositary also eliminates the need for physical
movement of securities certificates by facilitating the
settlement among Direct Participants of securities transactions,
such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in the Direct
Participants accounts. Direct Participants include
securities brokers and dealers, including the underwriters,
banks, trust companies, clearing corporations, and certain other
organizations. The depositary is a wholly-owned subsidiary of
The Depository Trust & Clearing Corporation, or DTCC.
DTCC is owned by a number of Direct Participants of the
depositary and members of the national Securities Clearing
Corporation, Government Securities Clearing Corporation, MBS
Clearing Corporation and Emerging Markets Clearing Corporation,
as well as by the New York Stock Exchange, Inc., the American
Stock Exchange LLC and the National Association of Securities
Dealers, Inc. Access to the depositary system is also available
to others such as both U.S. and
non-U.S. securities
brokers and dealers, banks, trust companies and clearing
corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly (Indirect Participants). The rules
applicable to the depositary and its Direct Participants and
Indirect Participants are on file with the Commission. All
interests in the global securities including those held through
the Euroclear System (Euroclear) or Clearstream
Banking S.A. (Clearstream, Luxembourg) may be
subject to procedures and requirements of DTC. Those interests
held through Euroclear or Clearstream, Luxembourg may also be
subject to the procedures and requirements of such systems.
The depositary advises that its established procedures provide
that:
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upon our issuance of the notes, the depositary will credit the
accounts of Direct Participants and Indirect Participants
designated by the underwriters with the principal amounts of the
notes purchased by the underwriters, and
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ownership of interest in the global securities will be shown on,
and the transfer of the ownership will be effected only through,
records maintained by the depositary, the Direct Participants
and the Indirect Participants.
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The laws of some states require that certain persons take
physical delivery in definitive form of securities which they
own. Consequently, the ability to transfer beneficial interest
in the global securities is limited to such extent.
So long as a nominee of the depositary is the registered owner
of the global securities, the nominee for all purposes, except
as required by law, will be considered the sole owner or holder
of the global securities under the Indenture.
Except as provided below, owners of beneficial interests in the
global securities will not be entitled to have notes registered
in their names, will not receive or be entitled to receive
physical delivery of notes in definitive form and will not be
considered the owners or holders thereof under the Indenture.
S-27
None of RCI, the guarantors, any underwriters, the trustee or
any paying agent will have any responsibility or liability for
any aspect of the records relating to or payments made on
account of beneficial ownership interests in the global
securities, or for maintaining, supervising or reviewing any
records relating to those beneficial ownership interests.
Principal and interest payments on the notes registered in the
name of the depositarys nominee will be made in
immediately available funds to the depositarys nominee as
the registered owner of the global securities. Under the terms
of the notes, we and the trustee will treat the persons in whose
names the notes are registered as the owners of those notes for
the purpose of receiving payment of principal and interest on
those notes and for all other purposes whatsoever. Therefore,
neither we, the trustee nor any paying agent has any direct
responsibility or liability for the payment of principal or
interest on the notes to owners of beneficial interests in the
global securities. The depositary has advised us and the trustee
that its current practice is upon receipt of any payment of
principal or interest, to credit Direct Participants
accounts on the payment date in accordance with their respective
holdings of beneficial interests in the global securities as
shown on the depositarys records, unless the depositary
has reason to believe that it will not receive payment on the
payment date. Payments by Direct Participants and Indirect
Participants to owners of beneficial interests in the global
securities will be governed by standing instructions and
customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in
street name, and will be the responsibility of the
Direct Participants and Indirect Participants and not of the
depositary, the trustee, the underwriters or us, subject to any
statutory requirements that may be in effect from time to time.
Payment of principal and interest to the depositary is our
responsibility or the responsibility of the trustee, but
disbursement of those payments to the owners of beneficial
interests in the global securities shall be the responsibility
of the depositary and Direct Participants and Indirect
Participants.
Each series of notes represented by a global security will be
exchangeable for notes of such series in definitive form of like
tenor as the global security in denominations of US$2,000 and
integral multiples of US$1,000 in excess thereof if (i) the
depositary notifies us that it is unwilling or unable to
continue as depositary for the global security or at any time
the depositary ceases to be a clearing agency registered under
applicable law and, in either case, a successor depositary is
not appointed by us within 90 days, (ii) we in our
discretion at any time determine not to require all of such
notes to be represented by a global security and notify the
trustee thereof or (iii) an Event of Default in respect of
notes shall have occurred and be continuing (and, in the case of
an Event of Default arising upon a Change in Control Triggering
Event, such Event of Default shall not have been cured by a
Change in Control Offer in the prescribed time). Any notes of a
series that are exchangeable pursuant to the preceding sentence
are exchangeable for notes of such series issuable in authorized
denominations and registered in such names as the depositary
shall direct. Subject to the foregoing, a global security is not
exchangeable, except for a global security or global securities
of the same aggregate denominations to be registered in the name
of the depositary or its nominee.
The information in this section concerning DTC and DTCs
book-entry system has been obtained from sources that we believe
to be reliable, but neither we nor the underwriters take
responsibility for the accuracy thereof.
Global
Clearance and Settlement Procedures
Initial settlement for the notes will be made in immediately
available funds. Secondary market trading between DTC
participants (DTC Participants) will occur in the
ordinary way in accordance with DTC rules and will be settled in
immediately available funds using DTCs
Same-Day
Funds Settlement System. Secondary market trading between
Clearstream participants (Clearstream Participants)
and/or
Euroclear participants (Euroclear Participants) will
occur in the ordinary way in accordance with the applicable
rules and operating procedures of Clearstream, Luxembourg and
Euroclear, as applicable.
Cross-market transfers between persons holding directly or
indirectly through DTC on the one hand, and directly or
indirectly through Clearstream Participants or Euroclear
Participants, on the other, will be effected through DTC in
accordance with DTC rules on behalf of the relevant European
international clearing system by its U.S. depositary;
however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines
(European time). The relevant European international clearing
system will, if the transaction meets its settlement
requirements, deliver instructions to its U.S. depositary
to take
S-28
action to effect final settlement on its behalf by delivering or
receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for
same-day
funds settlement applicable to DTC. Clearstream Participants and
Euroclear Participants may not deliver instructions directly to
their respective U.S. depositaries.
Because of time-zone differences, credits of notes received in
Clearstream, Luxembourg or Euroclear as a result of a
transaction with a DTC Participant will be made during
subsequent securities settlement processing and dated the
business day following the DTC settlement date. The credits or
any transactions in the notes settled during the processing will
be reported to the relevant Euroclear Participant or Clearstream
Participant on that business day. Cash received in Clearstream,
Luxembourg or Euroclear as a result of sales of the notes by or
through a Clearstream Participant or a Euroclear Participant to
a DTC Participant will be received with value on the DTC
settlement date but will be available in the relevant
Clearstream, Luxembourg or Euroclear cash account only as of the
business day following settlement in DTC.
Although DTC, Clearstream, Luxembourg and Euroclear have agreed
to the foregoing procedures in order to facilitate transfers of
notes among participants of DTC, Clearstream, Luxembourg and
Euroclear, they are under no obligation to perform or continue
to perform such procedures and such procedures may be
discontinued or changed at any time.
Same-Day
Settlement and Payment
Settlement for the notes will be made by the underwriters in
immediately available funds. So long as the depositary continues
to make same day settlement available to us, all payments of
principal and interest on the notes will be made by us in
immediately available funds.
Secondary trading in long-term notes and debentures of corporate
issues is generally settled in clearing-house or
next-day
funds. In contrast, the depositary will facilitate same day
settlement for trading in the notes until maturity, and
secondary market trading activity in the notes will therefore be
required by the depositary to settle in immediately available
funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in
the notes.
Governing
Law
The Indenture and the notes will be governed by and construed in
accordance with the laws of the State of New York. The Indenture
is subject to the provisions of the Trust Indenture Act.
CREDIT
RATINGS
The following table discloses the credit ratings and credit
ratings outlooks accorded to each series of notes by the rating
agencies indicated:
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Rating Agency
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Rating
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Outlook
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Moodys Investors Service, Inc. (Moodys)
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Baa3
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Positive
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Standard & Poors Ratings Services
(S&P)
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BBB−
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Positive
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Fitch Ratings Ltd. (Fitch)
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BBB
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Stable
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Moodys credit ratings are on a long-term debt rating scale
that ranges from Aaa to C, which represents the range from
highest to lowest quality of such securities rated. A rating of
Baa is the fourth highest of nine major categories used by
Moodys. According to the Moodys rating system, debt
securities rated Baa are subject to moderate credit risk. They
are considered medium grade obligations and as such may possess
certain speculative characteristics. Moodys applies
numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa in its corporate bond rating
system. The modifier 1 indicates that the issue ranks in
the higher end of its generic rating category, the
modifier 2 indicates a mid-range ranking and the
modifier 3 indicates that the issue ranks in the lower end
of its generic rating category.
S&Ps credit ratings are on a long-term debt rating
scale that ranges from AAA to D, which represents the range from
highest to lowest quality of such securities rated. A rating of
BBB is the fourth highest of ten major categories used by
S&P. According to the S&P rating system, debt
securities rated BBB exhibit adequate protection
S-29
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of
the obligor to meet its financial commitments on the securities.
The ratings from AA to CCC may be modified by the addition of a
plus (+) or minus (−) sign to show relative standing
within the major rating categories.
Fitchs credit ratings are on a long-term debt rating scale
that ranges from AAA to D, which represents the range from
highest to lowest quality of such securities rated. The BBB
rating category is the fourth highest of the 11 major
ratings categories used by Fitch. Fitch describes debt
instruments rated BBB as having good credit quality. According
to Fitch, BBB ratings indicate that there are currently
expectations of low credit risk and that the capacity for
payment of financial commitments is considered adequate but
adverse changes in circumstances and economic conditions are
more likely to impair this capacity. The modifiers +
or − may be appended to a rating to denote
relative status within major rating categories.
The credit ratings accorded to the notes of each series by these
rating agencies are not recommendations to buy, hold or sell the
notes of such series since such ratings do not comment as to
market price or suitability for a particular investor. There is
no assurance that any rating will remain in effect for any given
period of time or that any rating will not be revised or
withdrawn entirely by a rating agency in the future if, in its
judgment, circumstances so warrant and, if any such rating is so
revised or withdrawn, we are under no obligation to update this
prospectus supplement. See Risks Related to the
Notes Credit ratings may change adversely affecting
the market value of the notes and our cost of capital. Adverse
changes to the credit ratings assigned to some of our
outstanding public debt may also subject us to certain
restrictive covenants.
S-30
CERTAIN
U.S. FEDERAL INCOME TAX CONSIDERATIONS
General
This section summarizes the material U.S. federal income
tax consequences to holders of the notes. However, the
discussion is limited in the following ways:
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The discussion is based upon the U.S. Internal Revenue Code
of 1986, as amended, (the Code), U.S. Treasury
Regulations issued thereunder, U.S. Internal Revenue
Service (the IRS) rulings and pronouncements and
judicial decisions now in effect, all of which are subject to
change at any time.
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The discussion only covers you if you buy your notes in the
initial offering at their initial issue price.
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The discussion only covers you if you hold your notes as a
capital asset (that is, for investment purposes), and if you do
not have a special tax status.
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The discussion does not cover tax consequences that depend upon
your particular tax situation in addition to your ownership of
notes, such as if you are a tax-exempt entity, bank, insurance
company or financial institution, you hold the notes as a hedge
against, or the notes are hedged against, currency risk or as
part of a straddle or conversion transaction, you are a
regulated investment company, subject to the alternative minimum
tax, a dealer in securities or foreign currencies, a
U.S. expatriate or your functional currency is not the
U.S. dollar. We suggest that you consult your tax advisor
about the consequences of holding notes in your particular
situation.
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The discussion is based on current law. Changes in the law may
change the tax treatment of the notes, possibly with retroactive
effect.
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The discussion does not cover state, local or foreign law.
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We have not requested a ruling from the IRS on the tax
consequences of owning the notes. As a result, the IRS could
disagree with portions of this discussion.
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If a partnership or other entity treated as a partnership for
U.S. federal income tax purposes holds notes, the tax
treatment of a partner will generally depend upon the status of
the partner and upon the activities of the partnership. If you
are a partner of a partnership holding notes, we suggest that
you consult your tax advisor.
If you are considering buying notes, we suggest that you consult
your tax advisor about the tax consequences of holding the notes
in your particular situation.
Tax
Consequences to U.S. Holders
This section applies to you if you are a
U.S. Holder. A U.S. Holder is:
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an individual U.S. citizen or resident alien;
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a corporation or entity taxable as a corporation for
U.S. federal income tax purposes that was created under
U.S. law (federal, state or District of Columbia);
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an estate whose worldwide income is subject to U.S. federal
income tax; or
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a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all
substantial decisions of the trust.
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Interest
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If you are a cash method taxpayer (including most individual
holders), you must report interest on the notes in your income
as ordinary interest income when you receive it.
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If you are an accrual method taxpayer, you must report interest
on the notes in your income as ordinary interest income as it
accrues.
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S-31
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Such interest will constitute foreign source income for
U.S. foreign tax credit limitation purposes, but with
certain exceptions, will be treated separately, together with
other items of passive category income or, in the
case of certain holders, general category income for
purposes of computing the foreign tax credit allowable under
U.S. federal income tax laws. The rules governing the
foreign tax credit are complex. You are urged to consult your
tax advisors regarding the availability of the foreign tax
credit under your particular circumstances.
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Sale,
Exchange, Redemption or Retirement of Notes
On your sale, exchange, redemption or retirement of a note:
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You will have taxable gain or loss equal to the difference
between the amount received by you and your tax basis in the
note. Your tax basis in the note is your cost, subject to
certain adjustments.
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Your gain or loss will generally be capital gain or loss, and
will be long term capital gain or loss if you held the note for
more than one year. For noncorporate taxpayers, including
individuals, the maximum tax rate on long term capital gains is
15% for taxable years beginning before January 1, 2011 and
20% thereafter. Deductibility of capital losses is subject to
limitations.
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If you sell the note between interest payment dates, a portion
of the amount you receive reflects interest that has accrued on
the note but has not yet been paid by the sale date. That amount
is treated as ordinary interest income and not as sale proceeds.
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Your gain or loss generally will be treated as U.S. source
income for U.S. foreign tax credit limitation purposes.
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Information
Reporting and Backup Withholding
Under the tax rules concerning information reporting to the IRS:
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Assuming you hold your notes through a broker or other
securities intermediary, the intermediary must provide
information to the IRS and to you on IRS Form 1099
concerning interest and retirement proceeds on your notes,
unless an exemption applies.
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Similarly, unless an exemption applies, you must provide the
intermediary with your Taxpayer Identification Number on a
certified IRS
Form W-9
for its use in reporting information to the IRS. If you are an
individual, this is your Social Security number. You are also
required to comply with other IRS requirements concerning
information reporting.
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If you are subject to these requirements but do not comply, the
intermediary must withhold 28% of all amounts payable to you on
the notes (including principal payments) or the proceeds from
the sale or other disposition of the notes. This is called
backup withholding. If the intermediary withholds
payments, you may use the withheld amount as a credit against
your U.S. federal income tax liability, provided you
furnish the required information to the IRS in a timely manner.
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All individual U.S. Holders are subject to these
requirements. Some holders, including all corporations,
tax-exempt organizations and individual retirement accounts, are
exempt from these requirements.
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S-32
CERTAIN
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal Canadian federal
income tax considerations generally applicable to a holder of
notes who acquires such notes, as a beneficial owner, pursuant
to this prospectus supplement and who, at all relevant times,
for purposes of the Income Tax Act (Canada) (the
Canadian Tax Act) (i) is not, and is not deemed
to be, a resident of Canada (and has never been, or been deemed
to be, a resident of Canada), (ii) deals at arms
length with RCI and with any transferee resident in Canada to
whom the holder disposes of notes, and (iii) does not use
or hold, and is not deemed to use or hold, the notes in a
business carried on in Canada. Special rules, which are not
discussed in this summary, may apply to a holder of notes that
is an insurer that carries on an insurance business in Canada
and elsewhere. Such holders should consult their own tax
advisors.
This summary is based upon the provisions of the Canadian Tax
Act in force on the date hereof and the regulations thereunder
(the Regulations), all specific proposals to amend
the Canadian Tax Act and the Regulations publicly announced
prior to the date hereof by or on behalf of the Minister of
Finance (Canada) (the Proposed Amendments) and
counsels understanding of the current administrative
practices of the Canada Revenue Agency published in writing
prior to the date of this prospectus supplement. This summary
does not otherwise take into account or anticipate any other
changes in law or administrative or assessing practice, whether
by legislative, regulatory, governmental or judicial decision or
action, nor does it take into account provincial, territorial or
foreign income tax considerations which may differ from the
Canadian federal income tax considerations described herein. No
assurance can be given that the Proposed Amendments will be
enacted as proposed or at all.
This summary is not exhaustive of all Canadian federal income
tax considerations that may be relevant to a particular holder
of the notes. This summary is of a general nature only and is
not, and should not be construed to be, legal or tax advice to a
particular holder of notes, and no representation with respect
to the income tax consequences to any particular holder is made.
Accordingly, prospective purchasers of notes should consult with
their own tax advisors for advice regarding the income tax
considerations applicable to their particular circumstances.
No withholding tax will apply under the Canadian Tax Act to
interest, principal or premium, if any, paid or credited to a
holder on a note or to proceeds received by a holder on the
disposition of a note, including on a redemption, payment on
maturity, repurchase or purchase for cancellation.
No other tax on income (including taxable capital gains) will be
payable under the Canadian Tax Act by a holder of a note on
interest, principal or premium, if any, or on proceeds received
by a holder on the disposition of a note, including on a
redemption, payment on maturity, repurchase or purchase for
cancellation.
S-33
UNDERWRITING
Citigroup Global Markets Inc. and J.P. Morgan Securities
Inc. are acting as joint book-running managers and
representatives of the underwriters named below.
Subject to the terms and conditions stated in the underwriting
agreement dated the date of this prospectus supplement, each
underwriter named below has agreed to purchase, and we have
agreed to sell to that underwriter, the principal amount of
notes set forth opposite the underwriters name.
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Principal Amount of
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Principal Amount of
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Underwriters
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2018 Notes
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2038 Notes
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Citigroup Global Markets Inc.
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US$
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455,000,000
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US$
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113,750,000
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J.P. Morgan Securities Inc.
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455,000,000
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113,750,000
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Scotia Capital (USA) Inc.
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175,000,000
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43,750,000
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Merrill Lynch, Pierce, Fenner & Smith
Incorporated
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105,000,000
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26,250,000
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RBC Capital Markets Corporation
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105,000,000
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26,250,000
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TD Securities (USA) LLC
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105,000,000
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26,250,000
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Total
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US$
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1,400,000,000
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US$
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350,000,000
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The underwriting agreement provides that the obligations of the
underwriters to purchase the notes included in this offering may
be terminated at the discretion of the representatives of the
underwriters if there is a material adverse change in the
financial markets which makes it impracticable to proceed with
the offering and are also subject to approval of legal matters
by counsel and to other conditions. The underwriters are,
however, obligated to purchase all of the notes if they purchase
any of the notes under the underwriting agreement. The
underwriters propose to offer some of the 2018 notes directly to
the public at the public offering price set forth on the cover
page of this prospectus supplement and some of the 2018 notes to
dealers at the public offering price less a concession not to
exceed 0.400%. The underwriters may allow, and dealers may
reallow a concession not to exceed 0.250% on sales to other
dealers with respect to the 2018 notes. The underwriters propose
to offer some of the 2038 notes directly to the public at the
public offering price set forth on the cover page of this
prospectus supplement and some of the 2038 notes to dealers at
the public offering price less a concession not to exceed
0.500%. The underwriters may allow, and dealers may reallow a
concession not to exceed 0.250% on sales to other dealers with
respect to the 2038 notes. The offering price and the other
terms of the notes have been determined by negotiation between
us and the underwriters.
The following table shows the underwriting commission that we
are to pay to the underwriters in connection with this offering
(expressed as a percentage of the principal amount of the notes).
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Paid by RCI
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Per 2018 note
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0.650
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%
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Per 2038 note
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0.875
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%
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After the underwriters have made a reasonable effort to sell all
of the notes at the initial offering price, the concessions
allowed and the offering price of the notes may be changed (but
not in excess of the initial offering price) and the
compensation realized by the underwriters will change
accordingly.
In connection with this offering, Citigroup Global Markets Inc.
and J.P. Morgan Securities Inc., on behalf of the
underwriters, may purchase and sell notes in the open market.
These transactions may include over-allotment, syndicate
covering transactions and stabilizing transactions.
Over-allotment involves syndicate sales of the notes in excess
of the principal amount of the notes to be purchased by the
underwriters in this offering, which creates a syndicate short
position. Syndicate covering transactions involve purchases of
the notes in the open market after the distribution has been
completed in order to cover syndicate short positions.
Stabilizing transactions consist of certain bids or purchases of
the notes made for the purpose of preventing or retarding a
decline in the market price of the notes while the offering is
in progress.
S-34
The underwriters also may impose a penalty bid. Penalty bids
permit the underwriters to reclaim a selling concession from a
syndicate member when Citigroup Global Markets Inc. and
J.P. Morgan Securities Inc., in covering syndicate short
positions or making stabilizing purchases, repurchase notes
originally sold by that syndicate member.
Any of these activities may have the effect of preventing or
retarding a decline in the market price of the notes. They may
also cause the price of the notes to be higher than the price
that otherwise would exist in the open market in the absence of
these transactions. The underwriters may conduct these
transactions in the over-the-counter market or otherwise. If the
underwriters commence any of these transactions, they may
discontinue them at any time.
We estimate that our total expenses for this offering will be
approximately US$3 million (not including the underwriting
commission).
We expect that delivery of the notes will be made against
payment therefor on or about August 6, 2008, which will be
the fifth business day following the date of this prospectus
supplement (such settlement cycle being herein referred to as
T+5). Under
Rule 15c6-1
under the Exchange Act, trades in the secondary market
generally are required to settle in three business days, unless
the parties to any such trade expressly agree otherwise.
Accordingly, purchasers who wish to trade notes on the date of
this prospectus supplement or the next succeeding business day
will be required, by virtue of the fact that the notes initially
will settle T+5, to specify an alternate settlement cycle at the
time of any such trade to prevent a failed settlement.
Purchasers of notes who wish to trade notes on the date hereof
or the next succeeding business day should consult their own
advisor.
The underwriters have performed and may in the future perform
investment and commercial banking and advisory services for us
from time to time for which they have received or may in the
future receive customary fees and expenses.
The underwriters may, from time to time, engage in transactions
with and perform services for us in the ordinary course of their
business. Each of the underwriters (other than
Merrill Lynch, Pierce, Fenner & Smith
Incorporated) is an affiliate of a bank or a financial
institution that is currently a lender to us under our bank
credit facility (such affiliates, the Lenders) and
each of the underwriters (other than J.P. Morgan Securities
Inc.) is an affiliate of a bank or a financial institution that
is currently, or may become concurrently with this offering, a
counter-party to cross-currency interest rate exchange
agreements with us (such affiliates, the
Counter-Parties) and, accordingly, we may be
considered to be a connected issuer of each such underwriter for
purposes of applicable securities legislation in each of the
provinces of Canada. Concurrently with this offering we will
refinance certain of our
cross-currency
interest rate exchange agreements with an affiliate of
Scotia Capital (USA) Inc. We were indebted to the Lenders
for approximately $628 million as of June 30, 2008
under our bank credit facility, representing approximately 10.5%
of our total debt as of that date. At the date hereof our
obligations under our bank credit facility and cross-currency
interest rate exchange agreements are unsecured. We are in
compliance with the terms of, and the Lenders and the
Counter-Parties have not waived any material breach of, the
agreement governing our bank credit facility and our
cross-currency interest rate exchange agreements since their
respective dates of execution. All or a portion of the proceeds
of this offering may be used to repay debt, including advances
under our bank credit facility. None of the Lenders or
Counter-Parties were involved in the decision to offer the notes
or in the determination of the terms of the distribution of the
notes. None of the underwriters will receive any direct benefit
from this offering other than as disclosed above and other than
its respective share of the underwriters commission.
As a consequence of the sale of the notes, each of the
underwriters will receive a commission on the principal amount
of notes sold by it and it is currently anticipated that the
banks affiliated with certain of the underwriters may receive
more than 10% of the net proceeds from the sale of the notes as
repayment of advances under our bank credit facility. Because
more than 10% of the proceeds of this offering, not including
underwriting compensation, may be received by entities who are
affiliated with Financial Industry Regulatory Authority members
who are participating in this offering, this offering is being
conducted in compliance with the NASD Conduct Rule 2710(h).
Pursuant to that rule, the appointment of a qualified
independent underwriter is not necessary in connection with this
offering, as the offering is of a class of securities rated Baa
or better by Moodys or BBB or better by S&P. See
Use of Proceeds and Credit Ratings in
this prospectus supplement.
S-35
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933, or to contribute to payments the underwriters may be
required to make because of any of those liabilities.
This prospectus supplement does not constitute an offer of the
notes, directly or indirectly, in Canada or to residents of
Canada. Each underwriter has agreed that it will not, directly
or indirectly, offer, sell or deliver any notes purchased by it
in Canada or to residents of Canada and that any selling
agreement or similar agreement with respect to the notes will
require each dealer or other party thereto to make an agreement
to the same effect. The notes offered under this prospectus
supplement to purchasers outside of Canada are being qualified
under the securities laws of the Province of Ontario. The notes
will not be qualified for sale under the securities laws of any
province or territory of Canada (other than the Province of
Ontario).
Notice to
Prospective Investors in the European Economic Area
In relation to each member state of the European Economic Area
that has implemented the Prospectus Directive (each, a relevant
member state), with effect from and including the date on which
the Prospectus Directive is implemented in that relevant member
state (the relevant implementation date), an offer of notes
described in this prospectus supplement may not be made to the
public in that relevant member state prior to the publication of
a prospectus in relation to the notes that has been approved by
the competent authority in that relevant member state or, where
appropriate, approved in another relevant member state and
notified to the competent authority in that relevant member
state, all in accordance with the Prospectus Directive, except
that, with effect from and including the relevant implementation
date, an offer of securities may be offered to the public in
that relevant member state at any time:
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to any legal entity that is authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
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to any legal entity that has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
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to fewer than 100 natural or legal persons (other than qualified
investors as defined below) subject to obtaining the prior
consent of the representatives for any such offer; or
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in any other circumstances that do not require the publication
of a prospectus pursuant to Article 3 of the Prospectus
Directive.
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Each purchaser of notes described in this prospectus supplement
located within a relevant member state will be deemed to have
represented, acknowledged and agreed that it is a
qualified investor within the meaning of
Article 2(1)(e) of the Prospectus Directive.
For purposes of this provision, the expression an offer to
the public in any relevant member state means the
communication in any form and by any means of sufficient
information on the terms of the offer and the securities to be
offered so as to enable an investor to decide to purchase or
subscribe the securities, as the expression may be varied in
that member state by any measure implementing the Prospectus
Directive in that member state, and the expression
Prospectus Directive means
Directive 2003/71/EC
and includes any relevant implementing measure in each relevant
member state.
The sellers of the notes have not authorized and do not
authorize the making of any offer of notes through any financial
intermediary on their behalf, other than offers made by the
underwriters with a view to the final placement of the notes as
contemplated in this prospectus supplement. Accordingly, no
purchaser of the notes, other than the underwriters, is
authorized to make any further offer of the notes on behalf of
the sellers or the underwriters.
Notice to
Prospective Investors in the United Kingdom
This prospectus supplement is only being distributed to, and is
only directed at, persons in the United Kingdom that are
qualified investors within the meaning of Article 2(1)(e)
of the Prospectus Directive that are also (i) investment
professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial
S-36
Promotion) Order 2005 (the Order) or (ii) high
net worth entities, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to
(d) of the Order (each such person being referred to as a
relevant person). This prospectus supplement and its
contents are confidential and should not be distributed,
published or reproduced (in whole or in part) or disclosed by
recipients to any other persons in the United Kingdom. Any
person in the United Kingdom that is not a relevant person
should not act or rely on this document or any of its contents.
LEGAL
MATTERS
Certain legal matters in connection with the offering of the
notes will be passed upon on our behalf by Davies Ward
Phillips & Vineberg LLP, our Canadian counsel, and
Cravath, Swaine & Moore LLP, our U.S. counsel.
Certain legal matters will be passed upon for the underwriters
by Osler, Hoskin & Harcourt LLP, the
underwriters Canadian counsel, and Shearman &
Sterling LLP, the underwriters U.S. counsel. As of
the date of this prospectus supplement, the partners and
associates of each of Davies Ward Phillips & Vineberg
LLP and Osler, Hoskin & Harcourt LLP beneficially
owned, directly or indirectly, less than 1% of our outstanding
securities of any class and less than 1% of the outstanding
securities of any class of our associates or affiliates.
EXPERTS
Our consolidated financial statements as at and for the years
ended December 31, 2007 and 2006 incorporated by reference
into this prospectus supplement and the accompanying prospectus
have been audited by KPMG LLP, as indicated in their report
incorporated by reference in this prospectus supplement and
accompanying prospectus, and are incorporated herein and therein
in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
S-37
AUDITORS
CONSENT
To the Board of Directors of Rogers Communications Inc.:
We have read the prospectus supplement of Rogers Communications
Inc. (the Company) dated July 30, 2008 to a
short form base shelf prospectus dated November 8, 2007
(collectively, the Prospectus) relating to the issue
and sale of US$1,400,000,000 aggregate principal amount of
6.80% Senior Notes Due 2018 of the Company and
US$350,000,000 aggregate principal amount of 7.50% Senior
Notes Due 2038 of the Company. We have complied with Canadian
generally accepted standards for an auditors involvement
with offering documents.
We consent to the incorporation by reference in the
above-mentioned Prospectus of our report to the shareholders of
the Company dated February 20, 2008 on the consolidated
balance sheets of the Company as at December 31, 2007 and
2006 and the consolidated statements of income,
shareholders equity and cash flows for each of the years
in the two-year period ended December 31, 2007 and the
consolidated statement of comprehensive income for the year
ended December 31, 2007.
Chartered Accountants, Licensed Public Accountants
Toronto, Canada
July 30, 2008
S-38
US$1,750,000,000
Rogers Communications
Inc.
US$1,400,000,000 6.80% Senior
Notes Due 2018
US$350,000,000 7.50% Senior
Notes Due 2038
PROSPECTUS SUPPLEMENT
July 30, 2008
JPMorgan
Scotia Capital
Merrill
Lynch & Co.
RBC Capital Markets
TD Securities