Rogers Communications Reports First Quarter 2017 Results

TORONTO, April 18, 2017

Consolidated Financial Highlights

	Three months ended March 31
(In millions of Canadian dollars, except per share amounts, unaudited)	2017	2016	% Chg ARIVA.DE Börsen-Geflüster Kurse Rogers Communications B 39,50 $ +1,49% ROGERS COMMUNICATIONS INC. CL A MV 40,5233 $ 0,00%
Total revenue	3,338	3,245	3
Adjusted operating profit 1	1,166	1,101	6
Net income	294	230	28
Adjusted net income 1	329	245	34
Basic earnings per share	$0.57	$0.45	27
Adjusted basic earnings per share 1	$0.64	$0.48	33
Cash provided by operating activities	596	598	—
Free cash flow 1	338	220	54

"We are pleased to report strong growth in revenue, adjusted operating profit, and free cash flow this quarter, underpinned by impressive subscriber metrics," said Alan Horn, Interim President and CEO. "We delivered on all Wireless fundamentals, including a substantial reduction in postpaid churn, as we pursue an ever-improving experience for our customers. We see strong uptake of our Ignite Internet offerings and continue to expect positive trends as we leverage our Cable competitive advantage. Our results are an excellent start to 2017. We are of course excited to welcome Joe Natale as President and CEO starting tomorrow and look forward to Joe's leadership in continuing to build on this momentum."

Key Financial Highlights

Higher revenue
Revenue increased 3% this quarter, largely driven by Wireless service revenue growth of 7%.

Wireless service revenue increased primarily as a result of a larger subscriber base and the continued adoption of higher-value Share Everything plans.

Cable revenue was stable this quarter, as declines in Television and Phone revenue were offset by strong Internet revenue growth of 8%. Excluding the impact of lower wholesale Internet revenue as a result of the CRTC decision that reduced access service rates, Cable and Internet revenue would have increased by 1% and 11%, respectively.

Media revenue increased 6% primarily due to higher sports-related revenue, including a distribution from Major League Baseball and higher Sportsnet subscription revenue.

Higher adjusted operating profit
Adjusted operating profit increased 6% this quarter primarily as a result of Wireless adjusted operating profit growth of 7% due to the strong flow through of revenue growth described above.

Cable adjusted operating profit was stable this quarter as a result of the revenue trends described above. Excluding the impact of lower wholesale Internet revenue as a result of the CRTC decision that reduced access service rates, Cable adjusted operating profit would have increased by 3%.

Media adjusted operating loss decreased 43% primarily due to revenue growth described above.

Higher net income and adjusted net income
Net income and adjusted net income increased 28% and 34%, respectively, this quarter primarily as a result of higher Wireless and Media adjusted operating profit as described above, along with lower depreciation and amortization.

Substantial free cash flow affords financial flexibility
This quarter, we continued to generate substantial cash flow from operating activities and free cash flow of $596 million and $338 million, respectively. Free cash flow growth was primarily driven by increased adjusted operating profit and lower additions to property, plant and equipment, partially offset by higher cash income taxes.

We ended the first quarter with an adjusted net debt / adjusted operating profit ratio of 3.0, which improved from a ratio of 3.2 as at the end of the same period last year. See "Managing our Liquidity and Financial Resources" in our First Quarter 2017 Management's Discussion and Analysis (MD&A) for more information.

Our solid financial results enabled us to continue to make investments in our network and still return substantial dividends to shareholders. We paid $247 million in dividends this quarter.

Strategic Update

Rogers' strategy is designed to re-accelerate revenue growth in a sustainable way and translate this revenue growth into strong margins, adjusted operating profit, free cash flow, an increasing return on assets, and returns to shareholders.

In 2017, we plan to further enhance our financial flexibility and execution, as well as capture cost and productivity improvements we see throughout our business. We believe this will position us well to translate our revenue growth into increased profitability and free cash flow.

Improving the Customer Experience
Our priority is to offer our customers the products and services they want and need to have the best experience possible. With that in mind, we continue to focus on becoming a leader in self-serve options. Our latest example of a self-serve option was the launch of Rogers EnRoute at the end of 2016, which was expanded to our entire Cable footprint in the first quarter of 2017. We are the first Canadian telecom company to launch this sort of time-saving tool, which allows customers to track on their phone when a technician will arrive for an installation or service call. The overwhelming majority of initial feedback from customers is very positive. Our approach is resonating with customers, as we saw approximately 35% more self-service transactions on the Rogers brand this quarter and customer contact volumes reduced 7% year on year.

We look forward to doing more for our customers throughout 2017, including offering more self-serve options and other new ways for them to interact with us digitally.

Maintaining Leadership and Momentum in Wireless
We accelerated momentum in Wireless this quarter. Wireless service revenue growth of 7% was the highest since 2010 and postpaid net additions of 60,000, up 46,000 year on year, were the highest of any first quarter since 2009, despite 42,000 net prepaid subscriber losses. We achieved this strong postpaid subscriber growth while still generating robust adjusted operating profit growth of 7% in the quarter.

Postpaid churn declined 7 basis points year on year to 1.10% in the first quarter and represented the lowest first quarter postpaid churn rate since 2010. We continue to target further reductions to churn going forward with our focus on enhancing the customer experience.

Improving Cable on the Strength of Internet and our Robust Product Roadmap
Subscriber trends have been improving in our Cable segment on the popularity of Ignite Internet, as Rogers offers the fastest widely available Internet speeds in our marketplace. For the third consecutive quarter, we reported positive Cable total service unit net additions of 8,000, driven by Internet net additions of 30,000, up 14,000 year on year.

We generated Internet revenue growth of 8% this quarter and, excluding the impact of lower wholesale revenue as a result of the Canadian Radio-television and Telecommunications Commission's (CRTC) decision to reduce access service rates, Internet revenue growth would have been 11% in the quarter. Similarly, Cable revenue and adjusted operating profit growth this quarter would have been 1% and 3%, respectively, excluding this same impact.

Approximately half of our residential Internet base is on plans of 100 megabits per second or higher. We now offer Ignite Gigabit Internet service to our entire Cable footprint of over four million homes. Our hybrid fibre-coaxial cable network allows us to make incremental success-based investments as the demand for greater speed and capacity grows. We believe this positions us well to earn attractive returns on our investments.

Late in 2016, we announced a long-term agreement with Comcast Corporation (Comcast) and expect to launch Comcast's X1 all-IP video platform in early 2018. Our customers will benefit from Comcast's substantial research and development investments and their continuing commitment to innovation. Comcast attributes the transformative X1 platform to improving Xfinity TV subscriber performance, reducing churn, and increasing engagement for customers.

Our adoption of the X1 platform not only includes access to one of the most advanced IPTV solutions, but also to Comcast's state-of-the-art customer premise equipment, including advanced DOCSIS 3.1 Wi-Fi gateways, Wi-Fi extenders, and wireless set-top boxes.

First on the innovation roadmap, we intend to adopt Comcast's new Digital Home solution. This whole-home networking solution will provide customers with a simple, fast, and intuitive way to control and manage their connected devices. The cloud-based platform will link to the new DOCSIS 3.1 Wi-Fi gateway devices to deliver fast, reliable connectivity in the home and will allow customers to easily add or pause devices, pair Wi-Fi extenders that boost signal strength, and use voice controls to see who is on the network, all in a safe and secure manner. This should help support the broader adoption of connected devices and the Internet of Things (IoT).

The all-IP combination of voice, data, video, smart home monitoring, and IoT, using a combination of the most extensive DOCSIS 3.1-based, gigabit-capable network in Canada, along with Rogers and Comcast technology, aims to provide our customers with a best-in-class, next generation suite of residential services in Canada.

Media Focused on Sports
Media remains focused on our strong portfolio of live sports entertainment, including our ownership of the Toronto Blue Jays, our exclusive National Hockey League (NHL) agreement, and our joint venture interest in Maple Leaf Sports & Entertainment Ltd. In the first quarter of 2017, positive trends in Media revenue and adjusted operating profit were largely a result of higher sports-related revenue, including a distribution from Major League Baseball to the Toronto Blue Jays and higher subscription revenue from Sportsnet.

Sportsnet plans to deliver more than 100 live sporting events in 4K in 2017. Consumer interest in 4K TV continues to grow as evidenced by leading manufacturer expectations for 4K TV sales to top 50% of all TV sales in 2017. To achieve the high quality 4K resolution, significantly higher bandwidths are required. With more 4K television sets and video streaming devices in the home, the high bit rate requirement further emphasizes the speed and capacity advantages of Rogers' hybrid fibre-coaxial cable network over the legacy networks of our telecommunication competitors.

In the fourth quarter of 2016, we shifted from print to digital media in order to keep pace with changing audience demands. Since then, we have realigned resources and developed a roadmap through which we will work to drive innovation and new content ideas while increasing digital audiences and revenue.

Corporate Update
On April 13, we announced Joseph Natale will join Rogers as President and Chief Executive Officer effective April 19, 2017.

About Rogers

Rogers is a leading diversified Canadian communications and media company that's working to deliver a great experience to our customers every day. We are Canada's largest provider of wireless communications services and one of Canada's leading providers of cable television, high-speed Internet, information technology, and telephony services to consumers and businesses. Through Rogers Media, we are engaged in radio and television broadcasting, sports, televised and online shopping, magazines, and digital media. Our shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).

Quarterly Investment Community Teleconference

Our first quarter 2017 results teleconference with the investment community will be held on:

• April 18, 2017
• 4:30 p.m. Eastern Time
• webcast available at rogers.com/webcast
• media are welcome to participate on a listen-only basis

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

For More Information

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

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

About this Earnings Release

This earnings release contains important information about our business and our performance for the three months ended March 31, 2017, as well as forward-looking information about future periods. This earnings release should be read in conjunction with our First Quarter 2017 MD&A; our First Quarter 2017 Interim Condensed Consolidated Financial Statements and notes thereto, which have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB); our 2016 Annual MD&A; our 2016 Audited Consolidated Financial Statements and notes thereto, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB; and our other recent filings with Canadian and US securities regulatory authorities, including our Annual Information Form, which are available on SEDAR at sedar.com or EDGAR at sec.gov, respectively. We draw attention to our 2016 Annual MD&A where we disclosed that certain comparative figures were retrospectively amended as a result of the IFRS Interpretations Committee's agenda decision relating to IAS 12, Income Taxes.

For more information about Rogers, including product and service offerings, competitive market and industry trends, our overarching strategy, key performance drivers, and objectives, see "Understanding Our Business", "Our Strategy, Key Performance Drivers, and Strategic Highlights", and "Capability to Deliver Results" in our 2016 Annual MD&A.

All dollar amounts are in Canadian dollars unless otherwise stated and are unaudited. All percentage changes are calculated using the rounded numbers as they appear in the tables. Information is current as at April 18, 2017 and was approved by the Audit and Risk Committee of our Board of Directors (Board) on that date. This earnings release includes forward-looking statements and assumptions. See "About Forward-Looking Information" for more information.

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

In this earnings release, this quarter or the first quarter refer to the three months ended March 31, 2017, unless the context indicates otherwise. All results commentary is compared to the equivalent periods in 2016 or as at December 31, 2016, as applicable, unless otherwise indicated.

Summary of Consolidated Financial Results

		Three months ended March 31
(In millions of dollars, except margins and per share amounts)		2017	2016	% Chg
Revenue
	Wireless	1,968	1,890	4
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