NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Private Companies NOTE 15: OTHER LONG-TERM ASSETS NOTE 16: ACCOUNTS RECEIVABLE SECURITIZATION MLSE Investments in Joint Arrangements and Associates Inukshuk NOTE 17: PROVISIONS In October 2012, Media completed the purchase of 100% of the outstanding shares of theScore for $167 million. The shares were transferred to an interim CRTC-approved trust which was responsible for the independent management of the business in the normal course of operations until final approval by the CRTC was obtained. The shares were accounted for as an investment in a private company as at December 31, 2012. In 2013, we received final regulatory approval to transfer the Score Media Inc. business under the control of Rogers and we accounted for the acquisition of control under IFRS 3 (note 7). Certain of our joint ventures have non-controlling shareholders that have a right to require our joint venture to purchase the non-controlling interest at a future date. We entered into an accounts receivable securitization program with a Canadian financial institution effective December 31, 2012, which allows us to sell certain trade receivables into the program. The proceeds of the sales are committed up to a maximum of $900 million. We received funding of $650 million under the program in 2013. We continue to service and retain substantially all of the risks and rewards relating to the accounts receivables we sold, and therefore, the receivables remain recognized on our consolidated statements of financial position and the funding received is recorded as short-term borrowings. The buyer’s interest in these trade receivables ranks ahead of our interest. The program restricts us from using the receivables as collateral for any other purpose. The buyer of our trade receivables has no claim on any of our other assets. The terms of our accounts receivable securitization program are committed until it expires on December 31, 2015. As at December 31, 2013, $1,091 million of trade accounts receivables were sold to the buyer as security for sale proceeds of $650 million, resulting in an overcollateralization of $441 million. We incurred interest costs of $7 million in 2013 (2012 – nil) which we recorded in finance costs. We have interests in a number of associates and joint arrangements. Certain transactions that occurred in 2012 are described below. MLSE, a sports and entertainment company, owns and operates the Air Canada Centre, the NHL’s Toronto Maple Leafs, the NBA’s Toronto Raptors, the MLS’ Toronto FC, the AHL’s Toronto Marlies and other assets. In August 2012, we, along with BCE Inc., closed the joint acquisition of a net 75% equity interest in MLSE. Following a leveraged recapitalization of MLSE, our net cash investment was $540 million, representing a 37.5% equity interest in MLSE. Our investment in MLSE is a joint venture and is accounted for using the equity method. Inukshuk is a joint operation owned 50% by Rogers that was created to operate a national fixed wireless telecommunications network to be used by the partners and their subsidiaries. In December 2012, Inukshuk sold certain spectrum licences and network equipment to its owners at fair market value. We and the other non-related venturer each purchased 50% of the assets at a fair market value of $1,181 million and a carrying value of $250 million. As a result, we recorded: The following tables provide summary financial information for the joint ventures and associates and our portion. We record our investments in joint ventures and associates using the equity method. The table below shows our provisions and their classification between current and long-term as at December 31, 2012 and 2013. GLYPH<129> a gain on investment of $233 million in other income in the consolidated statement of income, representing our 50% share of the Inukshuk gain relating to the assets sold to the other venturer, GLYPH<129> spectrum licences of $360 million, which includes a $15 million fee paid in 2011 to the other venturer to acquire certain blocks of spectrum, and network equipment of $13 million representing the fair value of the assets purchased less our share of the Inukshuk gain, and GLYPH<129> a decrease of $125 million in our investment in Inukshuk, representing the carrying value of the assets sold. 2013 2012 Current assets $ 153 $ 307 Long-term assets 2,434 2,509 Current liabilities 334 1,033 Long-term liabilities 1,146 557 Total net assets $ 1,108 $ 1,226 Our share of net assets $ 554 $ 613 Revenues 648 193 Expenses (income) 644 (710) Total net income $ 4 $ 903 Our share of net income $ 2 $ 219 Decommissioning liabilities Other Total December 31, 2012 $ 26 $ 12 $ 38 Additions 1 5 6 Adjustment to existing provisions 5 – 5 Amounts used (1) (1) (2) December 31, 2013 $ 31 $ 16 $ 47 Current $ 6 $ 1 $ 7 Long-term 25 15 40 Other provisions include product guarantee provisions, onerous contracts and legal provisions. 110 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Note 2013 2012 Spectrum licence deposits 7 $ 250 $ – Other deposits 7 45 – Long-term receivables 29 19 Deferred installation costs 23 13 Cash surrender value of life insurance 17 16 Deferred pension asset 22 8 9 Deferred compensation 8 9 Other 17 32 $ 397 $9 8