NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 27: COMMITMENTS AND CONTINGENT LIABILITIES Commitments The table below shows the future minimum payments under operating leases and other contractual arrangements at December 31, 2013: Operating leases are for office premises and retail outlets across the country. The majority of the lease terms range from five to ten years. Rent expense for 2013 was $198 million (2012 – $189 million). Player contracts are Blue Jays players’ salary contracts we have entered into and are contractually obligated to pay. Purchase obligations are the contractual obligations under service, product and handset contracts that we have committed to for at least the next five years. Program rights are the agreements we have entered into to acquire broadcasting rights for sports broadcasting programs and films for periods ranging from one to twelve years. We have the following contingent liabilities as at December 31, 2013: In 2004, a class action commenced against providers of wireless communications in Canada under the Class Actions Act (Saskatchewan). The class action related to the system access fee wireless carriers charged to some of their customers. The plaintiffs are seeking unspecified damages and punitive damages, which would effectively be a reimbursement of all system access fees collected. In 2007, the Saskatchewan Court granted the plaintiffs’ application to have the proceeding certified as a national, “opt-in” class action where affected customers outside Saskatchewan must take specific steps to participate in the proceeding. In 2008, our motion to stay the proceeding based on the arbitration clause in our wireless service agreements was granted. The Saskatchewan Court directed that its order, in respect of the certification of the action, would exclude customers who are bound by an arbitration clause from the class of plaintiffs. We appealed the 2007 certification decision, however, it was dismissed by the Saskatchewan Court of Appeal and leave to appeal to the Supreme Court of Canada was denied. In 2012, the plaintiffs applied for an order seeking to extend the time they can appeal the “opt-in” decision of the Saskatchewan Court. In March 2013, the Saskatchewan Court of Appeal denied the plaintiffs’ application. In August 2009, counsel for the plaintiffs began a second proceeding under the Class Actions Act (Saskatchewan) asserting the same claims as the original proceeding. If successful, this second class action would be an “opt-out’ class proceeding. This second proceeding was ordered conditionally stayed in 2009 on the basis that it was an abuse of process. We provide for income and indirect taxes based on all of the information that is currently available and believe that we have adequately provided these items. The calculation of applicable taxes in many cases, however, requires significant judgment in interpreting tax rules and regulations. Our tax filings are subject to audits, which could materially change the amount of current and deferred income tax assets and liabilities and provisions, and could, in certain circumstances, result in the assessment of interest and penalties. In July 2013, a class action was launched in British Columbia against providers of wireless communications in Canada and manufacturers of wireless devices. The class action relates to the alleged adverse health effects incurred by long-term users of cellular devices. The plaintiffs are seeking unspecified damages and punitive damages, effectively equal to the reimbursement of the portion of revenues the defendants have received that can reasonably be attributed to the sale of cellular phones in Canada. We have not recorded a liability for this contingency. In June 2008, a class action was launched in Saskatchewan against providers of wireless communications services in Canada. It involves allegations of breach of contract, misrepresentation and false advertising, among other things, in relation to the 911 fee that had been charged by us and the other wireless communication providers in Canada. The plaintiffs are seeking unspecified damages and restitution. The plaintiffs intend to seek an order certifying the proceeding as a national class action in Saskatchewan. We have not recorded a liability for this contingency. In December 2011, a class action was launched in British Columbia against providers of wireless communications in Canada about the system access fee wireless carriers charge to some of their customers. The class action relates to allegations of misrepresentations contrary to the Business Practices and Consumer Protection Act (British Columbia), among other things. The plaintiffs are seeking unspecified damages and restitution. A certification hearing is scheduled for April 2014. We have not recorded a liability for this contingency. In April 2013, the plaintiffs applied for an order to be allowed to proceed with the second system access fee class action. In August 2013, the court denied this application and the second action remains conditionally stayed. In December 2013 the plaintiff applied for an order permitting them to amend the Statement of Claim to reintroduce the claims they were not permitted to proceed with in the 2007 certification decision. We are awaiting the decision of the Saskatchewan Court. We have not recorded a liability for this contingency. (In millions of dollars) Less than 1 year 1-3 years 4-5 years After 5 years Total Operating leases $ 136 $ 194 $ 95 $ 95 $ 520 Player contracts 136 132 33 7 308 Purchase obligations 1,670 1,019 149 160 2,998 Program rights 699 1,018 974 3,471 6,162 $ 2,641 $ 2,363 $ 1,251 $ 3,733 $ 9,988 124 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Contingent Liabilities System Access Fee – Saskatchewan System Access Fee – British Columbia 911 Fee Income and Indirect Taxes Cellular Devices