##### 



Exhibit 99.1 (ROGERS LOGO) Rogers Wireless Reports Strong Third Quarter 2004 ResultsQuarterly Network Revenue up 18%, Operating Profit Grows 22% and Net Income
Increases 154%, While PP&E Expenditures Decline 23% TORONTO (October 26, 2004)  Rogers Wireless Communications Inc. today announced its
consolidated financial and operating results for the third quarter and nine months ended September
30, 2004. Financial highlights (in thousands of dollars, except per share amounts) are as follows: Three Months Ended September 30,
    
    2004
    
    2003
    
    % ChangeOperating revenue (1)
    
    
    721,136
    
    
    
    588,615
    
    
    
    22.5Operating profit (2)
    
    
    266,646
    
    
    
    219,461
    
    
    
    21.5Net income
    
    
    108,384
    
    
    
    42,741
    
    
    
    153.6Earnings per share  basic
    
    
    0.76
    
    
    
    0.30
    
    
    
    153.3Additions to property, plant and equipment
    
    
    89,911
    
    
    
    116,379
    
    
    
    (22.7
    )
 Nine Months Ended September 30,
    
    2004
    
    2003
    
    % ChangeOperating revenue (1)
    
    
    1,969,897
    
    
    
    1,618,195
    
    
    
    21.7Operating profit (2)
    
    
    727,535
    
    
    
    552,149
    
    
    
    31.8Net income
    
    
    161,202
    
    
    
    136,490
    
    
    
    18.1Earnings per share  basic
    
    
    1.13
    
    
    
    0.96
    
    
    
    17.7Additions to property, plant and equipment
    
    
    305,790
    
    
    
    292,865
    
    
    
    4.4
  1.
    
    Effective January 1, 2004, we adopted new accounting standards
regarding the timing of revenue recognition and classification of
certain items as revenue or expense. See the New Accounting
Standards  Revenue Recognition section for further details with
respect to the impact of this reclassification. All periods
presented above are prepared on a consistent basis.2.
    
    Operating profit should not be considered as a substitute or
alternative for operating income or net income, in each case
determined in accordance with generally accepted accounting
principles (GAAP). See the Reconciliation to Net Income section
for a reconciliation of operating profit to operating income and
net income under GAAP and the Key Performance Indicators and
Non-GAAP Measures  Operating Profit section. Highlights of the third quarter of 2004 included the following:  
    
    Operating revenue increased 22.5% compared to the third
quarter of 2003, with the largest revenue component, network
revenue (which excludes equipment revenue) increasing 18.0%, and
operating profit increasing 21.5%. Operating profit margin as a
percentage of network revenue was 42.0%, compared to 40.7% in the
third quarter of 2003.
    
    Average monthly revenue per postpaid voice and data subscriber
(ARPU) was $62.18, an increase of 2.7% from the third quarter of
2003 ARPU of $60.56, reflecting the continued growth of wireless
data and roaming revenues and an increase in the penetration of
optional services. 1




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##### 




    
    Net additions of postpaid voice and data subscribers were
88,800 compared to the 97,100 net additions in the third quarter of
2003, reflecting stable churn rates impacting a larger cumulative
base of postpaid subscribers. Net additions of prepaid subscribers
were 8,700 compared to 18,100 in the third quarter of 2003,
reflecting the combination of our continued emphasis on the
higher-value postpaid segment of the market, selling prepaid
handsets at higher price points and more price-competitive prepaid
offerings in the market.
    
    Average monthly postpaid churn was unchanged at 1.85% compared
to the third quarter of 2003 and average monthly prepaid churn
increased to 2.96% from 2.48% over the same period mainly as a
result of our focus on postpaid and competitive offers in the
market.
    
    Revenues from wireless data services grew approximately 90.1%
year-over-year to $36.3 million from $19.1 million in the third
quarter of 2003, and represented approximately 5.7% of network
revenue compared to 3.5% in the third quarter of 2003.
    
    Net income was $108.4 million in the three-month period ended
September 30, 2004 compared to $42.8 million in the third quarter
of 2003. The $65.6 million year-over-year increase in net income
primarily reflects the increase in operating profit of $47.1
million combined with the decrease in depreciation and amortization
expense of $10.2 million and higher foreign exchange gains on the
unhedged portion of U.S. dollar denominated long-term debt of $8.8
million.
    
    To further increase its investment in the Canadian wireless
market, on September 13, 2004, our controlling shareholder Rogers
Communications Inc. (RCI) announced an agreement to acquire the
34% stake in our Company owned by AT&T Wireless Services, Inc.
(AWE) for a cash purchase price of C$36.37 per share. RCI closed
this transaction on October 13, 2004, thus increasing its ownership
interest in our company from 55.3% to 89.3%. The sale by AWE of its
stake in our company did not change the extensive North American
wireless voice and data roaming capabilities between the companies,
and our customers continue to enjoy the benefits of seamless
wireless roaming between Canada and the U.S. on North Americas
largest combined GSM/GPRS network.
    
    To further enhance our scale position in the Canadian wireless
market, on September 20, 2004 we announced an all cash bid of C$35
per share, totalling approximately C$1.4 billion, to acquire all of
the outstanding equity securities of Microcell Telecommunications
Inc. (Microcell), Canadas fourth largest wireless communications
provider. Microcells Board of Directors has recommended that its
shareholders tender to our offer and we mailed the offering
documents to Microcell security holders on September 30, 2004. The
initial offer period expires on November 5, 2004. The combination
of Rogers Wireless and Microcell would make us the largest wireless
communications operator in Canada, with over 5.1 million voice and
data customers across the country, operating Canadas only
nationwide GSM/GPRS/EDGE wireless network. The completion of this
transaction is subject to the receipt of certain regulatory
approvals and other conditions. 2




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##### 



These strong third quarter results reflect our continued disciplined operational and
strategic focus on driving superior and sustainable profitability at Rogers Wireless, said Nadir
Mohamed, President and CEO of Rogers Wireless Communications Inc. This focus is evident in our
continued strong postpaid subscriber growth, expanding ARPU and stable levels of churn and customer
acquisition cost. From a strategic perspective, our recent offer to acquire Microcell presents a
unique opportunity to benefit from an increased scale position while providing even more Canadians
with our leading array of innovative wireless services built upon the world-standard GSM/GPRS
wireless network platform. ROGERS WIRELESS COMMUNICATIONS INC. MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2004 In this Managements Discussion and Analysis (MD&A) of operating results and financial
position, the terms Rogers Wireless, we, us and our refer to Rogers Wireless Communications
Inc. and our wholly-owned subsidiaries Rogers Wireless Inc. (RWI) and Rogers Wireless Alberta
Inc. (RWAI). This discussion should be read in conjunction with our 2003 Annual MD&A and 2003 Annual
Audited Consolidated Financial Statements and Notes thereto. The financial information presented
herein has been prepared on the basis of Canadian generally accepted accounting principles (GAAP)
for interim financial statements. Please refer to Note 18 to our 2003 Annual Audited Consolidated
Financial Statements for a summary of the differences between Canadian GAAP and United States
(U.S.) GAAP. Throughout this MD&A, percentage changes are calculated using numbers rounded to the decimal
to which they appear. All dollar amounts are in Canadian dollars unless otherwise indicated. COMPANY OVERVIEW We are a leading Canadian wireless communications service provider, serving more than 4.2
million customers at September 30, 2004, including over 4.0 million wireless voice and data
subscribers and approximately 211,000 one-way messaging (paging) subscribers. We operate both a
Global System for Mobile Communications/General Packet Radio Service (GSM/GPRS) network, with
Enhanced Data for GSM Evolution (EDGE) technology, and a seamless integrated Time Division
Multiple Access (TDMA) and analog cellular network. The GSM/GPRS/EDGE network provides coverage to
approximately 93% of Canadas population. Our seamless TDMA and analog network provides coverage to
approximately 85% of the Canadian population in digital mode, and approximately 93% of the
population in analog mode. We estimate that our more than 4.0 million wireless voice and data
subscribers represent approximately 13% of the Canadian population residing in our coverage area
and approximately 28% of the wireless voice and data subscribers in Canada. Subscribers to our wireless services have access to these services in the U.S. through our
roaming agreements with various U.S. wireless operators. Our subscribers also have wireless access
internationally in over 140 countries, including throughout Europe, Asia and Latin America, through
roaming agreements with other wireless providers. 3




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##### 



COMPANY STRATEGY Our business strategy is to achieve profitable growth within the Canadian wireless
communications industry. The elements of this strategy are designed to maximize our cash flow and
return on investment. We remain committed to this strategy, and we believe that the financial and
operating results for the three months and nine months ended September 30, 2004 reflect continued
progress in line with our stated strategies. To further our investment and scale position in the Canadian wireless communications market,
we announced with RCI two significant structural and strategic developments during the third
quarter of 2004 that are further described below: an agreement for RCI to acquire from AWE its 34%
interest in our Company and a bid to acquire 100% ownership of Microcell. RCIS PURCHASE OF ROGERS WIRELESS SHARES FROM AT&T WIRELESS SERVICES, INC. To further its exposure to the Canadian wireless market, on September 13, 2004, our
controlling shareholder, RCI, announced an agreement with JVII General Partnership (JVII), a
partnership owned by AWE, whereby RCI agreed to purchase all of JVIIs 27,647,888 Class A Multiple
Voting shares (Class A shares) and 20,946,284 Class B Restricted Voting shares (Class B
shares) of our company for a cash purchase price of C$36.37 per share. RCI closed this
transaction on October 13, 2004. Immediately prior to closing, JVII converted its Class A shares
into Class B shares of Rogers Wireless. Upon closing, the shareholders agreement among RCI,
Rogers Wireless and JVII dated August 16, 1999, as amended, and the registration rights agreement
between Rogers Wireless and JVII, also dated August 16, 1999, were terminated, and JVIIs four
nominees to our Board of Directors resigned. The sale by AWE of its 34% interest in our company
does not impact the extensive North American wireless voice and data roaming capabilities between
ourselves and AWE, and customers of both companies continue to enjoy the benefits of seamless
wireless roaming between Canada and the U.S. on North Americas largest combined GSM/GPRS network.
Upon closing of this transaction, RCIs ownership interest in our company increased from
approximately 55.3% to approximately 89.3%. RCI financed this purchase with proceeds of a $1.75
billion bridge credit facility, with a term of up to two years. OFFER TO ACQUIRE MICROCELL TELECOMMUNICATIONS INC. To further enhance our scale position in the Canadian wireless market, on September 20, 2004,
we announced an agreement with Microcell to make an all cash bid of C$35.00 per share, totalling
approximately C$1.4 billion, to acquire all of the outstanding equity securities of Microcell,
Canadas fourth largest wireless communications provider. Microcells Board of Directors has
recommended that its shareholders tender to our offer, and we mailed the offering documents to
Microcell security holders on September 30, 2004. The initial offer period expires on November 5,
2004. The acquisition of Microcell would make us the largest wireless operator in Canada with over
5.1 million voice and data customers across the country, operating Canadas only nationwide
GSM/GPRS/EDGE wireless network. This combination, amongst other things, would lead to measurably
increased scale, providing opportunities for operating and capital spending efficiencies.
Completion of the transaction is subject to the receipt of certain regulatory approvals and other
conditions. We intend to finance the acquisition through cash on hand, 4




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##### 



drawdowns under our C$700.0 million bank credit facility and a bridge loan of up to C$900.0
million from RCI. It is RCIs intention that we refinance the bridge loan from RCI of up to $900.0 million, to the
extent that it is utilized in a successful acquisition of Microcell, as well as RCIs $1.75 billion
bridge credit facility. The intention is to refinance the bridge loan and RCIs bridge credit
facility with longer-term debt financing which we will most likely issue in the U.S. and/or
Canadian public debt markets. We are beginning a review of the various methods of transferring
funds to shareholders, including RCI, so that RCI will have adequate funds to repay its $1.75
billion bridge credit facility. No decision has been made on any of these matters, and each is
subject to board approval. SUMMARY CONSOLIDATED FINANCIAL RESULTS For the Third Quarter Ended September 30, 2004 For purposes of this discussion, our revenue has been classified according to the following
categories:  
    
    Postpaid voice and data revenues generated principally from:  
    
    Monthly fees;
    
    Airtime and long-distance charges;
    
    Optional service charges;
    
    System access fees; and
    
    Roaming charges.  
    
    Prepaid revenues generated principally from charges for airtime, long-distance and text
messaging;
    
    One-way messaging (paging) revenues generated from monthly fees and usage charges; and
    
    Equipment revenues generated from the sale of hardware and accessories to independent
dealers, agents and retailers, and directly to new and existing subscribers through direct
fulfillment by our customer service groups, our Rogers.com e-business Web site, and telesales.
Equipment revenue includes activation fees. Equipment subsidies and other incentives related to
the activation of new subscribers or the retention of existing subscribers are recorded as a
reduction to equipment revenue.  Operating expenses are segregated into four categories for assessing business performance:  
    
    Cost of equipment sales;
    
    Sales and marketing expenses, which represent costs to acquire new subscribers (other than
those related to equipment), such as advertising, commissions paid to third parties for new
activations, and remuneration and benefits to sales and marketing employees, as well as direct
overheads related to these activities;
    
    Operating, general and administrative expenses, which include all other expenses incurred to
operate the business on a day-to-day basis, including inter-carrier payments to roaming partners
and long-distance carriers, and the Canadian Radio-television and Telecommunications Commission
(CRTC) contribution levy. As well, it includes 5




---



##### 



costs to service existing subscriber
relationships, including retention costs (other than
those related to equipment);
    
    Management fees paid to RCI. Summarized Consolidated Financial Results Three Months Ended September 30,
    
    Nine Months Ended September 30,(In millions of dollars, except per share amounts)
    
    2004
    
    2003
    
    % Chg
    
    2004
    
    2003
    
    % ChgOperating revenue (1)Postpaid
(voice and data)
    
    $
    604.6
    
    
    $
    510.8
    
    
    
    18.4
    
    
    $
    1,678.5
    
    
    $
    1,408.3
    
    
    
    19.2Prepaid
    
    
    25.0
    
    
    
    21.2
    
    
    
    17.9
    
    
    
    75.2
    
    
    
    64.0
    
    
    
    17.5One-way
messaging
    
    
    6.0
    
    
    
    6.8
    
    
    
    (11.8
    )
    
    
    18.7
    
    
    
    21.1
    
    
    
    (11.4
    )Network revenue
    
    
    635.6
    
    
    
    538.8
    
    
    
    18.0
    
    
    
    1,772.4
    
    
    
    1,493.4
    
    
    
    18.7Equipment
revenue
    
    
    85.5
    
    
    
    49.8
    
    
    
    71.7
    
    
    
    197.5
    
    
    
    124.8
    
    
    
    58.3Total operating revenue
    
    
    721.1
    
    
    
    588.6
    
    
    
    22.5
    
    
    
    1,969.9
    
    
    
    1,618.2
    
    
    
    21.7Operating expenses (1)Cost of
equipment sales
    
    
    151.6
    
    
    
    94.6
    
    
    
    60.3
    
    
    
    357.5
    
    
    
    252.0
    
    
    
    41.9Sales and
marketing expenses
    
    
    89.6
    
    
    
    85.2
    
    
    
    5.2
    
    
    
    266.4
    
    
    
    250.1
    
    
    
    6.5Operating,
general and
administrative
expenses
    
    
    210.3
    
    
    
    186.5
    
    
    
    12.8
    
    
    
    609.7
    
    
    
    555.4
    
    
    
    9.8Management fees
    
    
    3.0
    
    
    
    2.8
    
    
    
    7.1
    
    
    
    8.8
    
    
    
    8.5
    
    
    
    3.5Total operating expenses
    
    
    454.5
    
    
    
    369.1
    
    
    
    23.1
    
    
    
    1,242.4
    
    
    
    1,066.0
    
    
    
    16.5Operating profit (2)
    
    
    266.6
    
    
    
    219.5
    
    
    
    21.5
    
    
    
    727.5
    
    
    
    552.2
    
    
    
    31.7Depreciation and amortization
    
    
    118.9
    
    
    
    129.1
    
    
    
    (7.9
    )
    
    
    357.3
    
    
    
    373.5
    
    
    
    (4.3
    )Operating income
    
    
    147.7
    
    
    
    90.4
    
    
    
    63.4
    
    
    
    370.2
    
    
    
    178.7
    
    
    
    107.2Interest expense on long-term
debt
    
    
    (47.7
    )
    
    
    (49.3
    )
    
    
    (3.2
    )
    
    
    (152.5
    )
    
    
    (146.9
    )
    
    
    3.8Foreign exchange gain (loss)
    
    
    10.8
    
    
    
    2.0
    
    
    
    
    
    
    
    (46.4
    )
    
    
    107.8
    
    
    
    Change in the fair value of
derivative instruments
    
    
    (5.2
    )
    
    
    
    
    
    
    
    
    
    
    (9.0
    )
    
    
    
    
    
    
    Loss on repayment of long-term
debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.3
    )
    
    
    
    
    
    
    Investment and other income
    
    
    4.0
    
    
    
    0.8
    
    
    
    
    
    
    
    5.1
    
    
    
    0.8
    
    
    
    Income tax expense  current
    
    
    (1.2
    )
    
    
    (1.1
    )
    
    
    9.1
    
    
    
    (3.9
    )
    
    
    (3.9
    )
    
    
    Net income
    
    $
    108.4
    
    
    $
    42.8
    
    
    
    153.3
    
    
    $
    161.2
    
    
    $
    136.5
    
    
    
    18.1Earnings per share -Basic
    
    $
    0.76
    
    
    $
    0.30
    
    
    
    153.3
    
    
    $
    1.13
    
    
    $
    0.96
    
    
    
    17.7Diluted
    
    
    0.75
    
    
    
    0.30
    
    
    
    150.0
    
    
    
    1.12
    
    
    
    0.96
    
    
    
    16.7Property, plant and equipment
(PP&E) expenditures
    
    $
    89.9
    
    
    $
    116.4
    
    
    
    (22.7
    )
    
    $
    305.8
    
    
    $
    292.9
    
    
    
    4.4Operating profit margin as %
of network revenue (3)
    
    
    42.0
    %
    
    
    40.7
    %
    
    
    
    
    
    
    41.0
    %
    
    
    37.0
    %
   (1)
    
    As reclassified  see the New Accounting Standards  Revenue Recognition section.(2)
    
    As defined  see the Key Performance Indicators and Non-GAAP Measures  Operating Profit section.(3)
    
    As defined  see the Key Performance Indicators and Non-GAAP Measures  Operating Profit
section. Calculated by dividing operating profit by network revenue as detailed below: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In millions of dollars)
    
    2004
    
    2003
    
    2004
    
    2003Operating profit
    
    $
    266.6
    
    
    $
    219.5
    
    
    $
    727.5
    
    
    $
    552.2Divided by network revenue
    
    $
    635.6
    
    
    $
    538.8
    
    
    $
    1,772.4
    
    
    $
    1,493.4Operating profit margin
as % of network revenue
    
    
    42.0
    %
    
    
    40.7
    %
    
    
    41.0
    %
    
    
    37.0
    %
 6




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##### 



Wireless Network Revenue and Subscribers Three Months Ended September 30, 2004
    
    Nine Months Ended September 30, 2004(Subscriber statistics in thousands, except ARPU, churn and usage)
    
    2004
    
    2003
    
    Chg
    
    % Chg
    
    2004
    
    2003
    
    Chg
    
    % ChgPostpaid (Voice and Data)Gross additions
    
    
    268.2
    
    
    
    252.3
    
    
    
    15.9
    
    
    
    6.3
    
    
    
    764.1
    
    
    
    683.1
    
    
    
    81.0
    
    
    
    11.9Net additions
    
    
    88.8
    
    
    
    97.1
    
    
    
    (8.3
    )
    
    
    (8.5
    )
    
    
    260.3
    
    
    
    234.0
    
    
    
    26.3
    
    
    
    11.2Total
subscribers
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,289.9
    
    
    
    2,863.4
    
    
    
    426.5
    
    
    
    14.9ARPU ($)
(1)
    
    
    62.18
    
    
    
    60.56
    
    
    
    1.62
    
    
    
    2.7
    
    
    
    59.10
    
    
    
    57.27
    
    
    
    1.83
    
    
    
    3.2Average
monthly usage
(minutes)
    
    
    397
    
    
    
    374
    
    
    
    23
    
    
    
    6.1
    
    
    
    388
    
    
    
    360
    
    
    
    28
    
    
    
    7.8Churn (%)
    
    
    1.85
    
    
    
    1.85
    
    
    
    
    
    
    
    
    
    
    
    1.78
    
    
    
    1.84
    
    
    
    (0.06
    )
    
    
    (3.3
    )PrepaidGross additions
    
    
    73.1
    
    
    
    73.4
    
    
    
    (0.3
    )
    
    
    (0.4
    )
    
    
    192.3
    
    
    
    190.0
    
    
    
    2.3
    
    
    
    1.2Net additions
(losses)
    
    
    8.7
    
    
    
    18.1
    
    
    
    (9.4
    )
    
    
    (51.9
    )
    
    
    (26.4
    )
    
    
    (4.4
    )
    
    
    (22.0
    )
    
    
    Adjustment to
subscriber base
(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20.9
    )
    
    
    20.9
    
    
    
    Total
subscribers
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    733.4
    
    
    
    753.4
    
    
    
    (20.0
    )
    
    
    (2.7
    )ARPU ($)
    
    
    11.45
    
    
    
    9.46
    
    
    
    1.99
    
    
    
    21.0
    
    
    
    11.37
    
    
    
    9.40
    
    
    
    1.97
    
    
    
    21.0Churn (%)
    
    
    2.96
    
    
    
    2.48
    
    
    
    0.48
    
    
    
    19.4
    
    
    
    3.31
    
    
    
    2.85
    
    
    
    0.46
    
    
    
    16.1Total  Postpaid and PrepaidGross additions
    
    
    341.3
    
    
    
    325.7
    
    
    
    15.6
    
    
    
    4.8
    
    
    
    956.4
    
    
    
    873.1
    
    
    
    83.3
    
    
    
    9.5Net additions
    
    
    97.5
    
    
    
    115.2
    
    
    
    (17.7
    )
    
    
    (15.4
    )
    
    
    233.9
    
    
    
    229.6
    
    
    
    4.3
    
    
    
    1.9Adjustment to
subscriber base
(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20.9
    )
    
    
    20.9
    
    
    
    Total
subscribers
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,023.3
    
    
    
    3,616.8
    
    
    
    406.5
    
    
    
    11.2ARPU (blended)
($) (1)
    
    
    52.88
    
    
    
    49.85
    
    
    
    3.03
    
    
    
    6.1
    
    
    
    50.09
    
    
    
    46.89
    
    
    
    3.20
    
    
    
    6.8One-Way MessagingGross additions
    
    
    7.6
    
    
    
    8.3
    
    
    
    (0.7
    )
    
    
    (8.4
    )
    
    
    23.4
    
    
    
    33.5
    
    
    
    (10.1
    )
    
    
    (30.1
    )Net losses
    
    
    (10.7
    )
    
    
    (14.8
    )
    
    
    4.1
    
    
    
    
    
    
    
    (30.7
    )
    
    
    (43.9
    )
    
    
    13.2
    
    
    
    Total
subscribers
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210.6
    
    
    
    258.4
    
    
    
    (47.8
    )
    
    
    (18.5
    )ARPU ($)
    
    
    9.19
    
    
    
    8.58
    
    
    
    0.61
    
    
    
    7.1
    
    
    
    9.15
    
    
    
    8.36
    
    
    
    0.79
    
    
    
    9.4Churn (%)
    
    
    2.77
    
    
    
    2.89
    
    
    
    (0.12
    )
    
    
    (4.2
    )
    
    
    2.63
    
    
    
    3.04
    
    
    
    (0.41
    )
    
    
    (13.5
    )
   (1)
    
    As reclassified  see the New Accounting Standards  Revenue Recognition section.(2)
    
    Our policy is to treat prepaid subscribers with no usage for a six month period as
a reduction of the prepaid subscriber base. In 2003, as part of a review of
prepaid subscriber usage, we determined that a number of subscribers who only had
non-revenue usage (e.g. calls to customer service) were being included in the
prepaid subscriber base. We determined that these subscribers should not have been
included in the prepaid subscriber base and, as such, made an adjustment to the
second quarter of 2003 opening prepaid subscriber base. Wireless Network Revenue Network revenue of $635.6 million accounted for 88.1% of our total revenues in the three
months ended September 30, 2004, and increased 18.0% from the corresponding period in 2003. This
growth reflects the 11.2% increase in the number of wireless voice and data subscribers from
September 30, 2003 combined with a 6.1% year-over-year increase in blended postpaid and prepaid
ARPU. Postpaid voice and data gross subscriber additions in the three months ended September 30,
2004 represented 78.6% of total gross activations and 91.1% of our total net additions. We have
continued our strategy of targeting higher-value postpaid subscribers and selling prepaid handsets
at higher price points, which has contributed to the significantly heavier mix of postpaid versus
prepaid subscribers. The 2.7% year-over-year increase in average monthly revenue per postpaid voice and data
subscriber in the quarter ended September 30, 2004 reflects the continued growth of wireless data
and roaming revenues and an increase in the penetration of optional services. With the continued
increase in the portion of our customer base using GSM handsets, we have experienced significant
increases in roaming revenues from our subscribers traveling outside of Canada, as well as strong
growth in roaming revenues from visitors to Canada utilizing our 7




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##### 



network. The 90.1% growth in data revenues, from $19.1 million for the three months ended
September 30, 2003 to $36.3 million for the three months ended September 30, 2004, represented
approximately 90.7% of the $1.62 increase in postpaid ARPU. Prepaid ARPU increased to $11.45 in the third quarter of 2004, compared to $9.46 in 2003, as a
result of changes to prices introduced in 2003 together with higher usage per subscriber. The
higher prepaid ARPU also reflects increased use of text messaging by prepaid subscribers. Our postpaid voice and data subscriber churn rate of 1.85% in the three months ended September
30, 2004 was unchanged from the third quarter of 2003 and reflects our continued utilization of
longer term customer contracts and focused subscriber retention efforts. During the third quarter,
we continued to experience increased levels of customers being deactivated for non-payment. As a
result, we have implemented more restrictive credit requirements early in the fourth quarter. The
increase in prepaid churn to 2.96% from 2.48% in the prior year period reflects the minimal sales
and marketing resources applied to our prepaid offerings given our postpaid focus, combined with
highly competitive prepaid offerings in the market. One-way messaging (paging) subscriber churn has declined year-over-year to 2.77%, while
one-way messaging ARPU has increased by 7.1%, reflecting pricing changes implemented in earlier
periods. With 210,600 paging subscribers, we continue to view paging as a profitable but mature
business segment, and recognize that churn will likely continue at relatively high rates as one-way
messaging subscribers increasingly migrate to two-way messaging and converged voice and data
services. Wireless Equipment Revenue In the three months ended September 30, 2004, revenue from wireless voice, data and messaging
equipment sales, including activation fees and net of equipment subsidies, was $85.5 million, up
$35.7 million, or 71.7%, from the corresponding period in 2003. This significant increase in
equipment revenue reflects the higher volume of handset upgrades associated with our retention
programs, combined with the generally higher price points of more sophisticated handsets and
devices and the higher volume of postpaid voice and data subscriber gross additions. Wireless Operating Expenses Three Months Ended September 30,
    
    Nine Months Ended September 30,(In millions of dollars, except per subscriber statistics)
    
    2004
    
    2003
    
    Chg
    
    % Chg
    
    2004
    
    2003
    
    Chg
    
    % ChgOperating expenses
(1)Cost of
equipment sales
    
    $
    151.6
    
    
    $
    94.6
    
    
    $
    57.0
    
    
    
    60.3
    
    
    $
    357.5
    
    
    $
    252.0
    
    
    $
    105.5
    
    
    
    41.9Sales and
marketing expenses
    
    
    89.6
    
    
    
    85.2
    
    
    
    4.4
    
    
    
    5.2
    
    
    
    266.4
    
    
    
    250.1
    
    
    
    16.3
    
    
    
    6.5Operating,
general and
administrative
expenses
    
    
    210.3
    
    
    
    186.5
    
    
    
    23.8
    
    
    
    12.8
    
    
    
    609.7
    
    
    
    555.4
    
    
    
    54.3
    
    
    
    9.8Management fees
    
    
    3.0
    
    
    
    2.8
    
    
    
    0.2
    
    
    
    7.1
    
    
    
    8.8
    
    
    
    8.5
    
    
    
    0.3
    
    
    
    3.5Total operating expenses
    
    $
    454.5
    
    
    $
    369.1
    
    
    $
    85.4
    
    
    
    23.1
    
    
    $
    1,242.4
    
    
    $
    1,066.0
    
    
    $
    176.4
    
    
    
    16.5Average monthly operating
expense per subscriber before sales
and marketing
expenses (1)
    
    $
    19.82
    
    
    $
    17.94
    
    
    $
    1.88
    
    
    
    10.5
    
    
    $
    18.71
    
    
    $
    17.93
    
    
    $
    0.78
    
    
    
    4.4Sales and marketing costs per
gross subscriber
addition (1)
    
    $
    344
    
    
    $
    340
    
    
    $
    4
    
    
    
    1.2
    
    
    $
    359
    
    
    $
    367
    
    
    $
    (8
    )
    
    
    (2.2
    )
   (1)
    
    As reclassified  see the New Accounting Standards  Revenue Recognition section. 8




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##### 



The $57.0 million increase in the cost of equipment sales reflects the significantly increased
handset upgrade activity associated with our retention programs and increased activations of new
subscribers. Both the new subscriber acquisition and subscriber retention programs were influenced
by the trend to higher-priced feature-rich colour phones and data devices. The 5.2% year-over-year increase in total sales and marketing expenses primarily reflects the
higher variable acquisition costs associated with the 6.3% year-over-year increase in the number of
postpaid voice and data gross additions in the three months ended September 30, 2004, as compared
to the corresponding period in 2003. Variable sales and marketing expenses increased in line with
our strategy of offering customers incentives to enter into multi-year service contracts. In the
third quarter of 2004, we introduced three year contracts for our postpaid customers and we were
able to drive 67.0% of our postpaid gross additions in the current quarter to this new contract
term. Fixed sales and marketing costs, such as advertising and overhead costs, increased modestly
in the three months ended September 30, 2004, as compared to the prior year quarter, largely due to
increased advertising costs. These factors resulted in the 1.2% increase in our sales and marketing
costs per gross addition to $344. The year-over-year increase in operating, general and administrative expenses of $23.8
million, or 12.8%, as compared to the corresponding period in 2003, is primarily attributable to
higher credit and collection costs, increases in retention spending and growth in network operating
expenses reflective of the growth in our customer base, offset by savings related to more
favourable roaming arrangements and operating efficiencies across various functions. Retention
spending includes the cost of our customer loyalty and renewal programs, as well as residual
payments to our agents and distributors for ongoing service for certain of our existing customers. The year-over-year increase in average monthly operating expense per subscriber, excluding
sales and marketing expenses, to $19.82 in the third quarter of 2004 reflects our increased
spending on handset upgrades associated with targeted retention programs and the impact of
increases in operating, general and administrative expenses. Total retention spending (including
subsidies on handset upgrades) increased to $58.9 million in the third quarter of 2004 as compared
to $36.7 million in the corresponding period in 2003. Retention spending, both on an absolute and
per subscriber basis, is expected to continue to grow as wireless market penetration in Canada
deepens. Wireless Operating Profit Operating profit grew by $47.1 million, or 21.5%, to $266.6 million in the three months ended
September 30, 2004 from $219.5 million in the third quarter of 2003. Quarterly operating profit as
a percentage of network revenue, or operating profit margin, increased to 42.0% from 40.7% in the
third quarter of 2003 due to the strength of network revenue growth. Reconciliation of Operating Profit to Net Income The items required to reconcile operating profit to operating income and net income as defined
under Canadian GAAP are as follows: 9




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##### 



Three Months Ended September 30,
    
    Nine Months Ended September 30,(In millions of dollars)
    
    2004
    
    2003
    
    Chg
    
    % Chg
    
    2004
    
    2003
    
    Chg
    
    % ChgOperating
profit
(1)
    
    $
    266.6
    
    
    $
    219.5
    
    
    $
    47.1
    
    
    
    21.5
    
    
    $
    727.5
    
    
    $
    552.2
    
    
    $
    175.3
    
    
    
    31.7Depreciation
and amortization
    
    
    (118.9
    )
    
    
    (129.1
    )
    
    
    10.2
    
    
    
    (7.9
    )
    
    
    (357.3
    )
    
    
    (373.5
    )
    
    
    16.2
    
    
    
    (4.3
    )Operating
income
    
    
    147.7
    
    
    
    90.4
    
    
    
    57.3
    
    
    
    63.4
    
    
    
    370.2
    
    
    
    178.7
    
    
    
    191.5
    
    
    
    107.2Interest
expense on
long-term debt
    
    
    (47.7
    )
    
    
    (49.3
    )
    
    
    1.6
    
    
    
    (3.2
    )
    
    
    (152.5
    )
    
    
    (146.9
    )
    
    
    (5.6
    )
    
    
    3.8Foreign
exchange gain
(loss)
    
    
    10.8
    
    
    
    2.0
    
    
    
    8.8
    
    
    
    
    
    
    
    (46.4
    )
    
    
    107.8
    
    
    
    (154.2
    )
    
    
    Change in the
fair value of
derivative
instruments
    
    
    (5.2
    )
    
    
    
    
    
    
    (5.2
    )
    
    
    
    
    
    
    (9.0
    )
    
    
    
    
    
    
    (9.0
    )
    
    
    Loss on
repayment of
long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.3
    )
    
    
    
    
    
    
    (2.3
    )
    
    
    Investment and
other income
    
    
    4.0
    
    
    
    0.8
    
    
    
    3.2
    
    
    
    
    
    
    
    5.1
    
    
    
    0.8
    
    
    
    4.3
    
    
    
    Income tax
expense
    
    
    (1.2
    )
    
    
    (1.1
    )
    
    
    (0.1
    )
    
    
    9.1
    
    
    
    (3.9
    )
    
    
    (3.9
    )
    
    
    
    
    
    
    Net income
    
    $
    108.4
    
    
    $
    42.8
    
    
    $
    65.6
    
    
    
    153.3
    
    
    $
    161.2
    
    
    $
    136.5
    
    
    $
    24.7
    
    
    
    18.1
   (1)
    
    As defined. See the Key Performance Indicators and non-GAAP Measures  Operating Profit section. Depreciation and Amortization Expense Depreciation and amortization expense was $10.2 million lower in the three months ended
September 30, 2004, as compared to the corresponding period in 2003, due primarily to lower PP&E
expenditure levels over the last several periods. Operating Income Operating income grew to $147.7 million for the three months ended September 30, 2004, an
increase of $57.3 million, or 63.4%, from the $90.4 million earned in the corresponding period of
2003, reflecting the combination of increased operating profit and reduced depreciation and
amortization expense. Interest on Long-Term Debt Interest expense in the three months ended September 30, 2004 decreased by $1.6 million, as
compared to the corresponding period in 2003, due to a higher percentage of fixed rate debt at
lower fixed rates in the current period compared to the prior period due to refinancings in 2004. Foreign Exchange Gain (Loss) The foreign exchange gain of $10.8 million in the third quarter of 2004 arose primarily from
the translation of the unhedged U.S. dollar-denominated debt and reflects a strengthening of the
Canadian dollar relative to that of the U.S. dollar from an exchange rate of 1.3338 as at June 30,
2004 to a rate of 1.2639 as at September 30, 2004. In the prior year comparative period, the
Canadian dollar also strengthened against the U.S. dollar, although to a lesser degree, resulting
in a more modest foreign exchange gain of $2.0 million. Refer also to Note 1(b) to the Unaudited
Interim Consolidated Financial Statements. Change in Fair Value of Derivative Instruments Effective January 1, 2004, in accordance with the Canadian Institute of Chartered Accountants
(CICA) Accounting Guideline 13 (AcG-13), we determined that we would not record our derivative
instruments, including cross-currency interest rate exchange agreements, as effective hedges for
accounting purposes and consequently began to account for such derivatives on a mark-to-market
basis with resulting gains or losses recorded in or charged against income. Accordingly, up to June
30, 2004, we recorded the change in the fair value of our derivative instruments as either income
or expense, depending on the change in the fair value of our cross-currency interest rate exchange
agreements. 10




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##### 



Effective July 1, 2004, we met the requirements of AcG-13 to treat certain of our
cross-currency interest rate exchange agreements as effective hedges for accounting purposes. Hedge
accounting was applied prospectively beginning July 1, 2004. The exchange agreements not accounted
for as hedges are mark-to-market with their change in fair value each period either recorded in or
charged against income, as appropriate. For the three months ended September 30, 2004, the change in the fair value of our
cross-currency interest rate exchange agreements not accounted for as hedges resulted in a loss of
$5.2 million. This change in accounting has been adopted on a prospective basis, as described in Note 1(b)
to the Unaudited Interim Consolidated Financial Statements. Income Tax Expense Income taxes for the three months ended September 30, 2004 and for the corresponding period in
2003 consisted primarily of current income tax expense related to the Canadian Federal Large
Corporations Tax. Net Income and Earnings per Share Reflecting the changes described above, we recorded net income of $108.4 million in the three
months ended September 30, 2004, or earnings of $0.76 per share, compared to $42.8 million or $0.30
per share in the corresponding period of 2003. PROPERTY, PLANT AND EQUIPMENT EXPENDITURES PP&E expenditures totalled $89.9 million for the three months ended September 30, 2004, a
decrease of $26.5 million, or 22.8%, from $116.4 million in the corresponding period in 2003.
Network-related PP&E expenditures were $70.0 million compared to $94.9 million in the prior year,
and included $27.5 million for capacity expansion of the GSM/GPRS network and transmission,
compared to $39.6 million in the third quarter of 2003. The remaining balance of $42.5 million in
network-related PP&E expenditures related primarily to technical upgrade projects, including new
cell sites, operational support systems and the addition of new services. Other PP&E expenditures
consisted of $16.0 million for information technology initiatives and $3.9 million for call centres
and other facilities and equipment. EMPLOYEES We had approximately 2,567 full-time-equivalent employees (FTE) at September 30, 2004, an
increase of 203 from 2,364 at December 31, 2003. The increase in the FTE levels was primarily in
the areas of credit and collections, network operations and information technology. We also rely on
employees of RCI in the area of, amongst other things, customer service call centres, for a
material amount of services. These employees are not included in FTE levels that we report. NINE MONTHS ENDED SEPTEMBER 30, 2004 The year-over-year revenue trends experienced in the first half of the year continued with
network revenue increasing by 18.7% to $1,772.4 million for the nine months ended September 30,
2004. The revenue growth was driven by the increase in the postpaid subscriber base and the
year-over-year increase in postpaid (voice and data) ARPU, which was up 3.2% to $59.10. 11




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##### 



Operating expenses for the nine months ended September 30, 2004 increased by 16.5% to $1,242.4
million as compared to $1,066.0 million in the corresponding period of 2003. Operating expenses
were modestly higher in the third quarter of 2004 as compared to the first and second quarters due
to higher costs of equipment sales attributable to volume increases in sales and retention,
increased sales and marketing costs as a result of increased levels of gross additions, and higher
operating, general and administrative expenses related to increased levels of retention and
collection costs. Net income for the nine months ended September 30, 2004 was $161.2 million, an increase from
$136.5 million in the corresponding period of 2003. This was due to increases in operating profit
of $175.3 million offset by the impact of foreign exchange, which was a loss of $46.4 million in
2004 compared to a gain of $107.8 million in the corresponding period of 2003. LIQUIDITY AND CAPITAL RESOURCES Operations Cash generated from operations before changes in non-cash working capital items, which is
calculated by adding all non-cash items to net income, increased to $220.3 million in the three
months ended September 30, 2004, from $169.5 million in the third quarter of 2003. The $50.8
million increase is primarily the result of the increase in operating profit of $47.1 million. Taking into account the changes in non-cash working capital items for the three months ended
September 30, 2004, cash generated from operations was $218.6 million, compared to $219.3 million
in the corresponding quarter of the previous year. Cash flow from operations of $218.6 million, together with $4.9 million received from the
issuance of Class B Restricted Voting shares under the exercise of employee stock options, and
proceeds on the sale of investments of $1.4 million, resulted in total net funds of approximately
$224.9 million raised in the three months ended September 30, 2004. Net funds used during the three months ended September 30, 2004 totalled approximately $108.6
million, the details of which include:  
    
    PP&E expenditures (net of change in non-cash working capital) of $58.1 million;
    
    net repayments under our bank credit facility of $48.5 million;
    
    other investment of $1.2 million; and
    
    net repayments of capital leases and mortgages of $0.8 million. Taking into account the cash deficiency of $5.0 million at the beginning of the period, the
cash on hand at the end of the period was $111.3 million. Financing Our long-term financial instruments are described in Note 8 to the 2003 Annual Consolidated
Financial Statements. During the nine-month period ended September 30, 2004, the following financings and
redemptions were completed: 12




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##### 



On February 20, 2004, we completed the private placement of US$750.0 million 6.375% Senior
Secured Notes due 2014, and on March 26, 2004 we entered into US$750.0 million aggregate notional
amount of new cross-currency interest rate exchange agreements. The impact of these cross-currency
interest exchange agreements is to economically hedge these amounts at an average exchange rate of
C$1.33490 to US$1.00. We used approximately US$734.7 million of the debt issuance proceeds to
redeem US$196.1 million 8.30% Senior Secured Notes due 2007, US$179.1 million 8.80% Senior
Subordinated Notes due 2007, and US$333.2 million 9 3/8% Senior Secured Debentures due 2008,
together with related redemption premiums. Also on February 20, 2004, we unwound an aggregate of
US$333.2 million notional amount of cross-currency interest rate exchange agreements for net cash
proceeds of $58.4 million. As a result of these transactions, we recorded a loss on repayment of
$2.3 million, including $34.7 million in redemption premiums, a $7.8 million write-off of deferred
financing costs, and a $40.2 million gain on the release of the deferred translation gain related
to the cross-currency interest rate exchange agreements that were unwound. On September 30, 2004, we mailed a cash offer to acquire all of the outstanding equity
interest of Microcell. The estimated cash cost is approximately $1.4 billion. We expect the
aggregate net cost to increase to approximately $1.6 billion, including the repayment of
Microcells bank debt net of Microcells cash on hand. The funding for this acquisition will
comprise utilization of our cash on hand, drawdowns under our committed $700.0 million bank credit
facility, and proceeds from a bridge loan from RCI of up to $900.0 million. The bridge loan will
have a term of up to two years from the date of drawdown and will be made on an unsecured
subordinated basis. The loan will bear interest at 6% per annum and will be prepayable in whole or
in part without penalty. RCI intends to fund the bridge loan of up to $900.0 million using cash on
hand, cash to be received from Rogers Cable Inc. (Rogers Cable) in the form of a return of
capital and cash to be received from Rogers Media Inc. (Rogers Media) in the form of partial
repayment of an intercompany advance made to Rogers Media by RCI. Each of Rogers Cable and Rogers
Media will make drawdowns under its committed bank credit facilities to fund the cash transfers to
RCI. On October 8, 2004 we entered into an amending agreement with our bank lenders on our $700.0
million bank credit facility that provided, among other things, for a two year extension of both
the maturity date and the reduction schedule such that the bank credit facility now reduces by
$140.0 million on each of April 30, 2008 and April 30, 2009, with the maturity date on April 30,
2010. The provision for early maturity in the event that our 101/2% Senior Secured Notes due 2006 are
not repaid (by refinancing or otherwise) on or prior to December 31, 2005 has been eliminated. In
addition, certain financial ratios to be maintained on a quarterly basis have been made less
restrictive; the restriction on the annual amount of PP&E expenditures has been eliminated; and the
restriction on the payment of dividends and other shareholder distributions has been eliminated,
other than in the case of a default or event of default under the terms of the bank credit
facility. We are currently in compliance with all of the covenants under our respective debt
instruments, and we expect to remain in compliance with all of these covenants. Based on our most
restrictive covenants at September 30, 2004, we could have borrowed approximately $3.0 billion of
additional long-term debt, of which $700.0 million could have been borrowed under our bank credit
facility. 13




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##### 



On October 13, 2004, RCI purchased 48,594,172 of our Class B Restricted Voting shares from
JVII, which is wholly-owned by AWE. The cash purchase price of C$36.37 per share totaled
approximately $1.767 billion. This acquisition was funded by RCI with a $1.75 billion secured
bridge credit facility with a term of up to two years to October 12, 2006. The facility was
provided by a group of Canadian financial institutions and is secured by a pledge of all of the
shares of Rogers Cable and Rogers Wireless that are owned by RCI or any of its subsidiaries. The
bridge credit facility contains mandatory repayments, subject to certain exceptions, from the
incurrence of debt and/or equity at RCI or by us. The bridge credit facility also requires the
maintenance of certain financial ratios on a quarterly basis. It is RCIs intention that we will refinance the bridge loan from RCI of up to $900.0 million,
to the extent that it is utilized in a successful acquisition of Microcell, as well as RCIs $1.75
billion bridge credit facility. The intention is to refinance the bridge loan and RCIs $1.75
billion bridge credit facility with longer term debt financing which will most likely be issued in
the U.S. and/or Canadian public debt markets. There can be no assurance that we will be successful
in raising the intended amount of longer term debt financing, on terms acceptable to us, or if
successful, how this will impact the future ability of us and/or RCI to issue additional debt. We
are beginning a review of the various methods of transferring funds to shareholders, including RCI,
so RCI will have adequate funds to repay its $1.75 billion bridge credit facility. No decision has
been made on any of these matters and each is subject to Board approval. On April 28, 2004, following AWEs decision to explore the sale of its 34% stake in Rogers
Wireless, Standard & Poors (S&P) placed the credit ratings on all of the Rogers companies on
Credit Watch with negative implications. S&P has historically rated Rogers Wireless on a
stand-alone basis, which would revert to a consolidated basis when AWE sold its 34% stake. On
September 14, 2004, following RCIs announcement that it had reached an agreement to purchase AWEs
34% stake in our company, S&P said it had consolidated and equalized the long term corporate credit
ratings for RCI and Rogers Wireless. The ratings remain on credit watch with negative
implications due to the uncertainty with regard to our bid for Microcell. The previous debt rating
for our senior secured debt was BB+ with a positive outlook. On September 13, 2004, the ratings of RCI, Rogers Wireless and Rogers Cable were put under
review for possible downgrade by Moodys following RCIs announcement of its agreement to purchase
AWEs 34% stake in Rogers Wireless and remain under review following our offer to acquire
Microcell. The previous Moodys rating for our senior secured debt was Ba3. On September 14, 2004, Fitch Ratings placed its BBB- rating for the Rogers Wireless senior
secured debt on rating watch negative following RCIs announcement of its agreement to purchase
AWEs 34% stake in our company. Fitch announced that it is maintaining the ratings watch negative
status following the announcement of our offer to acquire Microcell. We do not have any off-balance sheet arrangements other than the cross-currency interest rate
exchange agreements described below. 14




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##### 



Interest Rate and Foreign Exchange Management Economic Hedge Analysis As a result of the financing activity described above, our economic
hedged position at September 30, 2004 compared to December 31, 2003 was as
follows: ($ Millions) September 30,
    
    December 31,Foreign exchange
    
    2004
    
    2003U.S. dollar-denominated long-term debt
    
    US$
    1,394.9
    
    
    US$
    1,353.3Hedged with cross-currency interest rate exchange agreements
    
    US$
    1,301.8
    
    
    US$
    885.0Hedged Exchange Rate
    
    
    1.4198
    
    
    
    1.4466Spot (Unhedged) Exchange Rate
    
    
    1.2639
    
    
    
    1.2924Percent Hedged
    
    
    93.3
    %
    
    
    65.4
    %Interest ratesEffect of cross-currency interest rate exchange agreements:Converted US $ principal of
    
    US$
    1,250.0
    
    
    US$
    500.0at US $ fixed rate of
    
    
    7.68
    %
    
    
    9.63
    %to Cdn $ fixed rate of
    
    
    8.50
    %
    
    
    10.29
    %on Cdn $ principal of
    
    Cdn$1,780.9
    
    Cdn$779.7Converted US $ principal of
    
    US$
    51.8
    
    
    US$
    385.0at US $ fixed rate of
    
    
    9.38
    %
    
    
    9.38
    %to Cdn $ floating at bankers acceptance plus
    
    
    2.67
    %
    
    
    2.35
    %for all-in rate of
    
    
    4.98
    %
    
    
    5.11
    %on Cdn $ principal of
    
    Cdn$67.4
    
    Cdn$500.5Amount of long-term debt at fixed rates:Total long-term debt
    
    Cdn$2,150.1
    
    Cdn$2,209.6Total long-term debt at fixed rates
    
    Cdn$2,082.8
    
    Cdn$1,571.1Percent of long-term debt at fixed rates
    
    
    96.9
    %
    
    
    71.1
    %Weighted average interest rate on long-term debt
    
    
    8.61
    %
    
    
    8.32
    %
 As discussed in New Accounting Standards  Accounting for Derivative Instruments, effective July
1, 2004, we have accounted for US$1,240.0 million notional amount (or 95.3%) of our cross-currency
interest rate exchange agreements as hedges against designated U.S. dollar denominated debt. 15




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##### 



The long-term weighted average interest rate increased by 29 basis points from December 31,
2003, largely due to the fact that the percentage of long-term debt at fixed interest rates
increased during the nine-month period by approximately $512.0 million, from 71.1% to 96.9% of our
total outstanding long-term debt. As a result, even though a significant portion of long-term debt
was refinanced at lower fixed rates during the nine-month period ended September 30, 2004, since
there was less (lower interest rate) floating rate debt outstanding at September 30, 2004 compared
to (higher interest rate) fixed rate debt, the weighted average interest rate of consolidated
long-term debt increased by 29 basis points. INTERCOMPANY AND RELATED PARTY TRANSACTIONS Summary of Charges From (To) Related Parties The following table provides a summary of significant charges from (to) related parties, which
have been accounted for at exchange amounts: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003
    
    2004
    
    2003RCI:Management fees
    
    $
    2,919
    
    
    $
    2,834
    
    
    $
    8,757
    
    
    $
    8,502Wireless
services
    
    
    (277
    )
    
    
    63
    
    
    
    (886
    )
    
    
    (539
    )Rent income
    
    
    (1,872
    )
    
    
    (2,262
    )
    
    
    (5,529
    )
    
    
    (6,237
    )Cost of shared
operating expenses
    
    
    51,983
    
    
    
    46,523
    
    
    
    151,265
    
    
    
    139,349Additions to
PP&E (1)
    
    
    9,950
    
    
    
    8,354
    
    
    
    17,780
    
    
    
    14,48962,703
    
    
    
    55,512
    
    
    
    171,387
    
    
    
    155,564Rogers Cable:Wireless
equipment for
resale
    
    
    (5,168
    )
    
    
    (3,816
    )
    
    
    (12,182
    )
    
    
    (9,343
    )Subscriber
activation
commissions
    
    
    6,142
    
    
    
    2,584
    
    
    
    14,643
    
    
    
    6,941Rent income
    
    
    (1,010
    )
    
    
    (948
    )
    
    
    (3,034
    )
    
    
    (2,779
    )Wireless
services
    
    
    (756
    )
    
    
    (895
    )
    
    
    (2,398
    )
    
    
    (1,782
    )Transmission
facilities usage
    
    
    822
    
    
    
    110
    
    
    
    1,042
    
    
    
    330Consolidated
billing services
(2)
    
    
    (1,722
    )
    
    
    (381
    )
    
    
    (2,886
    )
    
    
    (1,015
    )Charges for
PP&E (1)
    
    
    (1,011
    )
    
    
    
    
    
    
    (1,011
    )
    
    
    (2,703
    )
    
    
    (3,346
    )
    
    
    (5,826
    )
    
    
    (7,648
    )Rogers Media:Advertising
    
    
    747
    
    
    
    1,177
    
    
    
    2,173
    
    
    
    2,749Rent income
    
    
    (2,678
    )
    
    
    (2,682
    )
    
    
    (8,425
    )
    
    
    (5,985
    )Wireless
services
    
    
    (213
    )
    
    
    (277
    )
    
    
    (555
    )
    
    
    (381
    )(2,144
    )
    
    
    (1,782
    )
    
    
    (6,807
    )
    
    
    (3,617
    )AWE:Roaming revenue
    
    
    (5,872
    )
    
    
    (4,409
    )
    
    
    (12,146
    )
    
    
    (10,098
    )Roaming expense
    
    
    2,547
    
    
    
    3,081
    
    
    
    8,977
    
    
    
    10,868Over-the-air
activation services
    
    
    
    
    
    
    61
    
    
    
    31
    
    
    
    234(3,325
    )
    
    
    (1,267
    )
    
    
    (3,138
    )
    
    
    1,004$
    54,531
    
    
    $
    49,117
    
    
    $
    155,616
    
    
    $
    145,303
   (1)
    
    Additions to (charges for) PP&E relate primarily to expenditures
on information technology infrastructure and call centre
technologies.(2)
    
    Included in our accounts receivable at September 30, 2004 is
approximately $14.7 million related to amounts outstanding for
Rogers Cable services included on consolidated bills to our
customers. We have entered into certain transactions with companies, the partners or senior officers of
which are directors of our company and/or RCI. During the three months and nine months ended
September 30, 2004 the total amounts paid by us to these related parties are as follows: 16




---



##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003
    
    2004
    
    2003Legal services and
commissions paid on
premiums for insurance
coverage
    
    $
    616
    
    
    $
    400
    
    
    $
    1,416
    
    
    $
    1,200Interest charges
and other financing fees
    
    
    1,166
    
    
    
    4,766
    
    
    
    5,643
    
    
    
    12,066$
    1,782
    
    
    $
    5,166
    
    
    $
    7,059
    
    
    $
    13,266
 OUTSTANDING SHARE DATA Set out below is the outstanding share data for our company as at September 30, 2004. For
additional detail, see Note 5 to the Unaudited Interim Consolidated Financial Statements attached
herein. Common Shares:Class A Multiple Voting
    
    
    90,468,259Class B Restricted Voting
    
    
    52,595,800Options to Purchase Class B Restricted Shares:Issued and Outstanding
    
    
    3,031,525Exercisable
    
    
    1,326,550
 COMMITMENTS AND CONTRACTUAL OBLIGATIONS Our material obligations under firm contractual arrangements, including commitments for future
payments under long-term debt arrangements, capital lease obligations and operating lease
arrangements, are summarized in our 2003 Annual MD&A, and are further discussed in the Notes to our
2003 Annual Consolidated Financial Statements. Refer to Liquidity and Capital Resources for
significant changes to our contractual obligations since December 31, 2003. GOVERNMENT REGULATION AND REGULATORY DEVELOPMENTS Spectrum Licence Issues On August 27, 2004, Industry Canada rescinded the cap on ownership of mobile spectrum. Up to
that time, Canadian carriers were limited to a maximum of 55 MegaHertz (MHz) of mobile spectrum
(PCS and cellular). After a public consultation earlier in 2004 as to whether the cap should be
maintained, removed or increased, Industry Canada advised that the cap would be removed, effective
immediately. Industry Canada concluded that the wireless industry will require access to more
spectrum through a future third generation (3G) wireless services auction and further stated that
it will continue to monitor the wireless industry for spectrum concentration, and manage the
licensing of spectrum resources through other mechanisms at its disposal. We expect that Industry
Canada will follow future spectrum allocation decisions that are made by the Federal Communications
Commission in the U.S. and will likely not proceed with a 3G spectrum auction before such decisions
are made, and likely not before the 2007 timeframe. 17




---



##### 



Fixed Wireless Spectrum Auction Industry Canada announced its intention to auction one block of 30 MHz of spectrum in the
2,300 MHz band, as well as three blocks of 50 MHz of spectrum and one block of 25 MHz of spectrum
in the 3,500 MHz band. The auction was completed on February 16, 2004. There were approximately 172
geographic licence areas in Canada for each available block. Successful bidders had flexibility in
determining the services to be offered and the technologies to be deployed in the spectrum.
Industry Canada expects that the spectrum will be used for point-to-point or point-to-multi-point
broadband services. We participated in this spectrum auction in 2003 and acquired 33 blocks of
spectrum in various areas for a total cost of $5.9 million. Industry Canada has initiated another auction process to make available the blocks of spectrum
that did not sell in the February 2004 process. In a multiphase process that has recently
commenced, parties were able to identify those blocks that they were interested in, and if there
were no other parties expressing interest in those blocks, then they were the successful party. In
this process, RWI obtained an additional nine licences for a cost of $0.1 million. The remaining
licenses are expected to be auctioned commencing January 10, 2005. UPDATE TO RISKS AND UNCERTAINTIES Wireless Local Number Portability Over the past several years, certain countries in Europe and Asia have mandated wireless local
number portability (WLNP). WLNP involves porting wireless phone numbers to other wireless
companies, but can also involve porting phone numbers between wireline and wireless companies. The
implementation of WLNP systems and capabilities represents significant costs for the carriers in a
country. In November 2003, as mandated by the Federal government, the U.S. wireless industry began
the implementation of WLNP. There has been no regulatory mandate for the implementation of WLNP in
Canada to date. The Canadian Radio-television and Telecommunications Commission (CRTC) recently
stated that it intends to review the matter in its 2005/2006 planning period. If WLNP were to be
mandated, this would require carriers, including ourselves, to incur implementation costs that
could be significant and could cause an increase in churn among Canadian wireless carriers. RCI Control and Potential Indebtedness Subsequent to the end of the quarter, on October 13, 2004, RCI completed the purchase of 48.6
million Rogers Wireless shares from JVII. Immediately prior to the closing, all of the Class A
Multiple Voting shares previously held by JVII were converted to Class B Restricted Voting shares,
the effect of which was to give RCI ownership of 100% of the Class A Multiple Voting shares of our
company. Also coincident with the closing, the shareholders agreement among RCI, Rogers Wireless
and JVII dated August 16, 1999, as amended, terminated, the registration rights agreements between
RWCI and JVII, also dated August 16, 1999 terminated and JVIIs four nominees to our board of
directors resigned. The shareholders agreement that terminated included, amongst other things,
certain veto rights in favour of JVII on certain actions of our company, including material
acquisitions or debt or equity financings. Accordingly, the ownership of our voting securities, the
composition of our board of directors, and general control of our company has become more
concentrated with RCI. 18




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##### 



In connection with longer term financing associated with RCIs purchase of JVIIs 34% interest
in our company, it is proposed that we incur significant incremental debt. RCI has stated its
intention to cause us to refinance its $1.75 billion bridge credit facility used for this purpose.
In addition, should the acquisition of Microcell be completed, we intend to finance that
acquisition through the issuance of additional debt. These occurrences, either individually or
combined, would have the effect of materially increasing our borrowings. Such increased debt could
increase our vulnerability to general adverse economic and industry conditions, limit our
flexibility in planning or reacting to changes in our business and industry and limit our ability
to obtain additional financing. Potential Claim Against Us On August 9, 2004, a proceeding under the Class Actions Act (Saskatchewan) was brought against
us and other providers of wireless communications services in Canada. The proceeding involves
allegations by wireless customers of breach of contract, misrepresentation and false advertising.
The plaintiffs seek unquantified damages from the defendant wireless communications service
providers. We believe we have good defences to the allegations. The proceeding has not been
certified as a class action and it is too early to determine whether it will qualify for
certification as a class action. GUIDANCE There are no changes to the previously issued financial and operating metric guidance ranges
for 2004. KEY PERFORMANCE INDICATORS AND NON-GAAP MEASURES We measure the success of our strategies using a number of key performance indicators that are
defined and described in our 2003 Annual MD&A. These key performance indicators are not
measurements in accordance with Canadian or U.S. GAAP, but we believe they allow us to
appropriately measure our performance against our operating strategy as well as against the results
of our peers and competitors. They include:  
    
    Network revenue and ARPU;
    
    Subscriber counts and subscriber churn;
    
    Operating expenses and average monthly operating expense per subscriber; and
    
    Sales and marketing costs per gross subscriber addition. We also refer to two other non-GAAP measures that are used in the various financial tables and
discussions throughout the MD&A. The related definitions and reconciliations to GAAP measures of
these items are as follows: Operating Profit Operating profit is defined as net income before depreciation and amortization, interest
expense, income taxes and non-operating items, which include foreign exchange gains (losses), loss
on repayment of long-term debt, the change in the fair value of derivative instruments and
investment and other income (expense). Operating profit is a standard measure used in the
communications industry to assist in understanding and comparing operating results, and is often
referred to within the industry either as earnings before interest, taxes, depreciation and 19




---



##### 



amortization (EBITDA) or as operating income before depreciation and amortization (OIBDA).
We believe this is an important measure as it allows us to assess our ongoing business without the
impact of depreciation or amortization expenses as well as other non-operating factors. Operating
profit is intended to indicate our ability to invest in PP&E and incur or service debt and make
capital distributions to shareholders, and allows us to compare ourselves to competitors and peers
that have different capital or organizational structures. This measure is not a defined term under
GAAP. Operating Profit Margin We calculate operating profit margin by dividing operating profit by network revenue. Network
revenue is used in the calculation instead of total revenue, because it better reflects our core
business activity of providing wireless services. This measure is not a defined term under GAAP. INTERCOMPANY AND RELATED PARTY ARRANGEMENTS From time to time, we enter into agreements with our parent company RCI and various of its
subsidiaries, as well as with other related parties, which we believe are mutually advantageous to
us and our affiliates. In addition, we have entered into a reciprocal roaming arrangement and other
agreements related to the marketing and delivery of wireless services with AWE, which was a 34%
shareholder at September 30, 2004. Our arrangements with RCI include a management services agreement under which we receive a
range of management services, including strategic planning, financial and information technology
services. We also maintain contractual relationships with RCI involving other cost-sharing and
services agreements. We are also a party to agreements with Rogers Cable and Rogers Media. With Rogers Cable, we
have agreed to provide sales and distribution services for certain of their products and services.
Rogers Cable also distributes our products and services through Rogers Video stores. With Rogers
Media, we purchase advertising on their radio and television stations and in their various
magazines and publications. We are presently discussing with RCI the terms upon which we and Rogers Cable may outsource
our information technology operations to RCI. We are also discussing with RCI and Rogers Cable the
terms upon which we may establish a business unit that would be responsible for marketing our
products and services, and those of Rogers Cable, to business customers. We monitor our intercompany and related-party agreements to ensure that these agreements
remain beneficial to us. We are continually evaluating the expansion of existing arrangements and
the entry into new agreements. In addition, see the Intercompany and Related-Party Transactions
section above for a summary of significant transactions for the three months and nine months ended
September 30, 2004. See the Intercompany and Related Party Transactions section in the Annual
2003 MD&A for further details with respect to these arrangements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES This MD&A is made with reference to our 2003 Annual Audited Consolidated Financial Statements
and Notes thereto, which have been prepared in accordance with Canadian GAAP. 20




---



##### 



The preparation of these financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of our financial statements, and the reported amount of revenues and
expenses during the period. These estimates are based on our historical experience and various
other assumptions that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the reported amounts of revenues, expenses, and carrying
value of assets and liabilities that are not readily apparent from other sources. Actual results
could differ from these estimates. We have identified the accounting policies and estimates outlined below as critical to our
understanding of business operations and of our results of operations. The impact and any
associated risks related to these policies on our business operations are discussed throughout this
MD&A, and a detailed discussion of these critical accounting policies can be found in our 2003
Annual MD&A. Our Audit Committee reviews our accounting policies and periodic financial filings, and
recommends adoption of our annual financial statements to our Board of Directors. For a detailed
discussion on the application of these and other accounting policies and estimates, see our 2003
Annual MD&A and Note 2 to our 2003 Annual Audited Consolidated Financial Statements. In addition, a
discussion of new accounting standards adopted by us in the nine months ended September 30, 2004
follows in the New Accounting Standards section below. Our critical accounting policies and estimates are as follows:  
    
    Revenue Recognition;
    
    Allowance for Doubtful Accounts;
    
    Subscriber Acquisition Costs;
    
    Costs of Subscriber Retention;
    
    Capitalization of Direct Labour and Overhead ;
    
    Depreciation and Amortization Policies and Useful Lives;
    
    Asset Impairment;
    
    Accounting for Derivative Instruments;
    
    Contingencies; and
    
    Related Party Transactions. Significant changes to accounting policies and estimates since December 31, 2003 are discussed
below. NEW ACCOUNTING STANDARDS In the nine months ended September 30, 2004, we have adopted the following new accounting
standards: GAAP Hierarchy In June 2003, the Canadian Institute of Chartered Accountants (CICA) released Handbook
Section 1100, Generally Accepted Accounting Principles. Previously there had been no clear
definition of the order of authority for sources of GAAP. This standard established standards for
financial reporting in accordance with Canadian GAAP and applies to our 2004 fiscal year. This
section also provides guidance on sources to consult when selecting 21




---



##### 



accounting policies and on appropriate disclosures when a matter is not dealt with explicitly
in the primary sources of GAAP. We have reviewed this new standard, and as a result have adopted a classified balance sheet
presentation since we believe that the historical industry practice of a declassified balance sheet
presentation is no longer appropriate. In addition, within the Consolidated Statements of Cash Flows, we have reclassified the change
in non-cash working capital items related to PP&E to investing activities. This change had the
impact of decreasing cash used in investing activities on the Statements of Cash Flows, compared to
our previous method, by $31.8 million and increasing cash used in investing activities by $5.2
million in the three months ended September 30, 2004 and September 30, 2003, respectively. For the
nine months ended September 30, 2004, cash used in investing activities decreased by $40.8 million
and for the nine months ended September 30, 2003 this change had the impact of increasing cash used
in investing activities by $83.0 million. In all periods, the corresponding change was to non-cash
working capital items within operating activities. With the adoption of these two changes, which are further described in the Notes to the
Consolidated Financial Statements, we believe that our accounting policies and financial statements
comply with this new standard. Accounting for Derivative Instruments Our cross-currency interest rate exchange agreements (swaps) are used to manage the cash
flow risks associated with the fluctuations in foreign exchange rates relating to our U.S.
dollar-denominated debt. We do not enter into such swaps for speculative purposes. Prior to January 1, 2004, we accounted for these swaps as hedges of the fluctuations in
foreign exchange rates relating to approximately 65.4 % of our U.S. dollar-denominated debt. Under
hedge accounting, the foreign exchange gains and losses arising on the translation of the U.S.
dollar-denominated debt at the end of each accounting period was hedged by the equal and offsetting
foreign exchange gains and losses relating to the swaps that were designated as hedges. In November 2001, the CICA issued Accounting Guideline 13, Hedging Relationships (AcG-13),
and in November 2002, it amended the effective date of the guideline. AcG-13 established new
criteria for hedge accounting with application to all hedging relationships in effect on or after
January 1, 2004. Effective January 1, 2004, we determined that we would not account for our swaps
as hedges for accounting purposes and consequently began to account for such swaps on a
mark-to-market basis, with resulting gains or losses recorded in or charged against income. We adjusted the carrying value of these swaps from $136.5 million at December 31, 2003 to the
fair value of $120.4 million on January 1, 2004. The corresponding transitional loss of $16.1
million was deferred and amortized to income over the remaining life of the underlying debt
instruments. Amortization for the six months ended June 30, 2004 totalled $0.4 million. This resulted in the recognition in the Consolidated Statement of Income of an unrealized loss
related to the change in fair value of the swaps of $3.8 million for the six months ended June 30,
2004. A loss of $32.4 million was also recognized for the six months ended June 30, 2004 related to
the unrealized foreign exchange on the debt previously hedged. 22




---



##### 



Effective July 1, 2004, we met the requirements for hedge accounting under AcG-13 for certain
of our swaps, and consequently, on a prospective basis, began to treat approximately US$1,240.0
million notional amount of these exchange agreements or 95.3% of our swaps as hedges against
foreign fluctuations on US$1,240.0 million of U.S. dollar-denominated debt. A new transitional adjustment arising on the change from mark-to-market accounting to hedge
accounting was therefore calculated as at July 1, 2004, resulting in a deferred transitional gain
of $53.9 million which will be amortized to income over the shorter of the remaining life of the
debt and the term of the swaps. Amortization of this transitional gain from July 1, 2004 to
September 30, 2004 totalled $1.6 million. Certain other swaps will continue not to be accounted for as hedges since they do not meet the
requirement for hedge accounting under AcG-13. Approximately US$61.8 million notional amount of
swaps will continue to be accounted for on a mark-to-market basis. The fair value of these swaps
was $1.0 million at September 30, 2004, a decrease of $5.2 million since June 30, 2004. Stock-Based Compensation Effective January 1, 2004, Canadian GAAP requires us to estimate the fair value of stock-based
compensation granted to employees and to expense the fair value over the vesting period of the
stock options. In accordance with the transition rules, we determined the fair value of options
granted to employees since January 1, 2002 using the Black-Scholes Option Pricing Model, and
recorded an adjustment to opening retained earnings in the amount of $2.3 million, representing the
expense for the 2002 and 2003 fiscal years. The offset to retained earnings is an increase in our
contributed surplus. For the three and nine months ended September 30, 2004, stock-based
compensation expense was $1.0 million and $3.1 million, respectively. Revenue Recognition Effective January 1, 2004, we adopted new Canadian accounting standards, including CICA
Emerging Issues Committee Abstract 142 issued in December 2003, regarding the timing of revenue
recognition and the classification of certain items as revenue or expense. As a result of the adoption of these new accounting standards, the following changes to the
recognition and classification of revenue and expenses have been made:  
    
    Activation fees are now classified as equipment revenue.
Previously, these amounts were classified as network revenue;
    
    Recoveries from new and existing subscribers from the sale of
equipment are now classified as equipment revenue. Previously,
these amounts were recorded as a reduction to sales expense in the
case of a new subscriber, and as a reduction to operating, general
and administrative expense in the case of an existing subscriber;
    
    Equipment subsidies provided to new and existing subscribers
are now classified as a reduction to equipment revenue. Previously,
these amounts were recorded as a sales expense in the case of a new
subscriber and as an operating, general and administrative expense
in the case of an existing subscriber. Costs for equipment provided
under retention programs to existing subscribers are now recorded
as a cost of equipment sales. Previously, these amounts were
recorded as an operating, general and administrative expense; and 23




---



##### 




    
    Certain other recoveries from subscribers related to
collections activities are now classified as network revenue.
Previously, these amounts were recorded as a recovery of operating,
general and administrative expenses. The effect of this adoption on our financial results and on our key performance indicators is
as follows: Three Months Ended September 30,
    
    Nine Months Ended September 30,(In millions of dollars, except per subscriber statistics)
    
    2004
    
    2003
    
    2004
    
    2003After
    
    Prior to
    
    After
    
    Prior to
    
    After
    
    Prior to
    
    After
    
    Prior toAdoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    AdoptionNetwork revenue
    
    $
    635.6
    
    
    $
    636.7
    
    
    $
    538.8
    
    
    $
    540.7
    
    
    $
    1,772.4
    
    
    $
    1,777.2
    
    
    $
    1,493.4
    
    
    $
    1,499.1Equipment sales
    
    
    85.5
    
    
    
    92.5
    
    
    
    49.8
    
    
    
    59.0
    
    
    
    197.5
    
    
    
    214.3
    
    
    
    124.8
    
    
    
    158.4$
    721.1
    
    
    $
    729.2
    
    
    $
    588.6
    
    
    $
    599.7
    
    
    $
    1,969.9
    
    
    $
    1,991.5
    
    
    $
    1,618.2
    
    
    $
    1,657.5Cost of
equipment sales
    
    $
    151.6
    
    
    $
    87.2
    
    
    $
    94.6
    
    
    $
    58.5
    
    
    $
    357.5
    
    
    $
    207.5
    
    
    $
    252.0
    
    
    $
    160.9Sales and
marketing expenses
    
    
    89.6
    
    
    
    132.2
    
    
    
    85.2
    
    
    
    120.8
    
    
    
    266.4
    
    
    
    378.8
    
    
    
    250.1
    
    
    
    349.6Operating,
general and
administrative
expenses
    
    
    210.3
    
    
    
    240.3
    
    
    
    186.5
    
    
    
    198.0
    
    
    
    609.7
    
    
    
    668.9
    
    
    
    555.4
    
    
    
    586.2Operating profit
    
    $
    266.6
    
    
    $
    266.6
    
    
    $
    219.5
    
    
    $
    219.5
    
    
    $
    727.5
    
    
    $
    727.5
    
    
    $
    552.2
    
    
    $
    552.2Postpaid ARPU
    
    $
    62.18
    
    
    $
    62.30
    
    
    $
    60.56
    
    
    $
    60.78
    
    
    $
    59.10
    
    
    $
    59.28
    
    
    $
    57.27
    
    
    $
    57.50Average monthly
operating expense
per subscriber
before sales and
marketing costs
    
    $
    19.82
    
    
    $
    19.37
    
    
    $
    17.94
    
    
    $
    17.51
    
    
    $
    18.71
    
    
    $
    18.29
    
    
    $
    17.93
    
    
    $
    17.53Sales and
marketing costs per
gross addition
    
    $
    344
    
    
    $
    378
    
    
    $
    340
    
    
    $
    361
    
    
    $
    359
    
    
    $
    385
    
    
    $
    367
    
    
    $
    389
 These changes in accounting classification had no effect on the amounts of reported operating
profit, net income or earnings per share. All prior period amounts, including key performance
indicators, have been conformed to reflect these changes in classification. CAUTION REGARDING FORWARD-LOOKING STATEMENTS This document includes forward-looking statements concerning the future performance of our
business, our operations and our financial performance and condition. These forward-looking
statements include, among others, 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. When used in this document, the words believe,
anticipate, intend, estimate, expect, project and similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements contain such
words. These forward-looking statements are based on current expectations. 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, and that actual future performance will be affected by a number of factors, including
economic conditions, technological change, regulatory change and competitive factors, many of which
are beyond our control. Therefore, future events and results may vary significantly from what we
currently foresee. We are under no obligation (and we expressly disclaim any such obligation) to
update or alter the forward-looking statements, whether as a result of new information, future
events or otherwise. For a more detailed discussion of factors that may affect actual results, see
the Risks and Uncertainties discussions in our 2003 Annual MD&A. ADDITIONAL INFORMATION Additional information in respect of the Company, including the Annual Information Form, is on
our website at www.rogers.com and on SEDAR at www.sedar.com. 24




---



##### 



Historical Quarterly 2004
    
    2003
    
    2002(In thousands of dollars)
    
    Q1
    
    Q2
    
    Q3
    
    Q1
    
    Q2
    
    Q3
    
    Q4
    
    Q1
    
    Q2
    
    Q3
    
    Q4Income StatementOperating revenue (1)Postpaid (voice
and data)
    
    $
    513,077
    
    
    $
    560,852
    
    
    $
    604,541
    
    
    $
    432,834
    
    
    $
    464,582
    
    
    $
    510,908
    
    
    $
    502,749
    
    
    $
    372,413
    
    
    $
    401,116
    
    
    $
    425,193
    
    
    $
    429,373Prepaid
    
    
    24,566
    
    
    
    25,632
    
    
    
    25,013
    
    
    
    21,121
    
    
    
    21,720
    
    
    
    21,172
    
    
    
    27,242
    
    
    
    20,625
    
    
    
    22,419
    
    
    
    26,869
    
    
    
    21,238One-way
messaging
    
    
    6,386
    
    
    
    6,293
    
    
    
    5,973
    
    
    
    7,432
    
    
    
    6,876
    
    
    
    6,815
    
    
    
    6,442
    
    
    
    9,067
    
    
    
    9,016
    
    
    
    8,851
    
    
    
    8,304Network revenue
    
    
    544,029
    
    
    
    592,777
    
    
    
    635,527
    
    
    
    461,387
    
    
    
    493,178
    
    
    
    538,895
    
    
    
    536,433
    
    
    
    402,105
    
    
    
    432,551
    
    
    
    460,913
    
    
    
    458,915Equipment sales
    
    
    48,812
    
    
    
    63,143
    
    
    
    85,609
    
    
    
    35,731
    
    
    
    39,284
    
    
    
    49,720
    
    
    
    53,166
    
    
    
    12,519
    
    
    
    28,467
    
    
    
    51,958
    
    
    
    44,086Total operating revenue
    
    
    592,841
    
    
    
    655,920
    
    
    
    721,136
    
    
    
    497,118
    
    
    
    532,462
    
    
    
    588,615
    
    
    
    589,599
    
    
    
    414,624
    
    
    
    461,018
    
    
    
    512,871
    
    
    
    503,001Operating expenses (1)
Cost of
equipment sales
    
    
    91,241
    
    
    
    114,611
    
    
    
    151,675
    
    
    
    73,638
    
    
    
    83,761
    
    
    
    94,610
    
    
    
    128,762
    
    
    
    50,397
    
    
    
    68,298
    
    
    
    82,266
    
    
    
    95,833Sales and
marketing expenses
    
    
    86,627
    
    
    
    90,215
    
    
    
    89,605
    
    
    
    82,846
    
    
    
    82,007
    
    
    
    85,233
    
    
    
    111,912
    
    
    
    66,824
    
    
    
    72,994
    
    
    
    85,712
    
    
    
    103,354Operating,
general and
administrative
expenses
    
    
    195,329
    
    
    
    204,011
    
    
    
    210,292
    
    
    
    184,824
    
    
    
    184,148
    
    
    
    186,477
    
    
    
    182,004
    
    
    
    186,552
    
    
    
    186,945
    
    
    
    183,987
    
    
    
    180,665Management fees
    
    
    2,919
    
    
    
    2,919
    
    
    
    2,918
    
    
    
    2,834
    
    
    
    2,834
    
    
    
    2,834
    
    
    
    2,834
    
    
    
    2,752
    
    
    
    2,751
    
    
    
    2,752
    
    
    
    2,751Total operating expenses
    
    
    376,116
    
    
    
    411,756
    
    
    
    454,490
    
    
    
    344,142
    
    
    
    352,750
    
    
    
    369,154
    
    
    
    425,512
    
    
    
    306,525
    
    
    
    330,988
    
    
    
    354,717
    
    
    
    382,603Operating profit (2)
    
    
    216,725
    
    
    
    244,164
    
    
    
    266,646
    
    
    
    152,976
    
    
    
    179,712
    
    
    
    219,461
    
    
    
    164,087
    
    
    
    108,099
    
    
    
    130,030
    
    
    
    158,154
    
    
    
    120,398Change in estimate of sales tax
and CRTC contribution liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,331
    )
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    116,498
    
    
    
    121,885
    
    
    
    118,944
    
    
    
    119,124
    
    
    
    125,232
    
    
    
    129,069
    
    
    
    145,174
    
    
    
    109,528
    
    
    
    110,802
    
    
    
    116,646
    
    
    
    120,157Operating income
    
    
    100,227
    
    
    
    122,279
    
    
    
    147,702
    
    
    
    33,852
    
    
    
    54,480
    
    
    
    90,392
    
    
    
    18,913
    
    
    
    10,902
    
    
    
    19,228
    
    
    
    41,508
    
    
    
    241Interest on long-term debt
    
    
    55,356
    
    
    
    49,436
    
    
    
    47,630
    
    
    
    48,008
    
    
    
    49,601
    
    
    
    49,339
    
    
    
    46,558
    
    
    
    47,390
    
    
    
    48,008
    
    
    
    50,105
    
    
    
    49,647Foreign exchange gain (loss)
    
    
    (24,376
    )
    
    
    (32,776
    )
    
    
    10,783
    
    
    
    52,289
    
    
    
    53,483
    
    
    
    2,008
    
    
    
    27,462
    
    
    
    (441
    )
    
    
    30,938
    
    
    
    (27,182
    )
    
    
    3,095Change in fair value of derivative
instruments
    
    
    (18,900
    )
    
    
    15,060
    
    
    
    (5,206
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain (loss) on repayment of debt
    
    
    (2,313
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,759
    
    
    
    8,238Other income (expense)
    
    
    1,037
    
    
    
    18
    
    
    
    4,036
    
    
    
    (124
    )
    
    
    134
    
    
    
    851
    
    
    
    
    
    
    
    77
    
    
    
    1
    
    
    
    4
    
    
    
    335Income tax expense
    
    
    (1,324
    )
    
    
    (1,322
    )
    
    
    (1,301
    )
    
    
    (1,378
    )
    
    
    (1,378
    )
    
    
    (1,171
    )
    
    
    1,534
    
    
    
    (1,576
    )
    
    
    (1,426
    )
    
    
    (1,127
    )
    
    
    (1,129
    )Net income (loss) for the period
    
    $
    (1,005
    )
    
    $
    53,823
    
    
    $
    108,384
    
    
    $
    36,631
    
    
    $
    57,118
    
    
    $
    42,741
    
    
    $
    1,351
    
    
    $
    (38,428
    )
    
    $
    733
    
    
    $
    (14,143
    )
    
    $
    (38,867
    )Net income (loss) per share -Basic
    
    $
    (0.01
    )
    
    $
    0.38
    
    
    $
    0.76
    
    
    $
    0.26
    
    
    $
    0.40
    
    
    $
    0.30
    
    
    $
    0.01
    
    
    $
    (0.27
    )
    
    $
    
    
    
    $
    (0.10
    )
    
    $
    (0.27
    )Diluted
    
    
    (0.01
    )
    
    
    0.37
    
    
    
    0.75
    
    
    
    0.26
    
    
    
    0.40
    
    
    
    0.30
    
    
    
    0.01
    
    
    
    (0.27
    )
    
    
    
    
    
    
    (0.10
    )
    
    
    (0.27
    )Operating profit margin as % of
network revenue
    
    
    39.8
    %
    
    
    41.2
    %
    
    
    42.0
    %
    
    
    33.2
    %
    
    
    36.4
    %
    
    
    40.7
    %
    
    
    30.6
    %
    
    
    26.9
    %
    
    
    30.1
    %
    
    
    34.3
    %
    
    
    26.2
    %PP&E expenditures
    
    
    130,887
    
    
    
    84,992
    
    
    
    89,911
    
    
    
    77,693
    
    
    
    98,793
    
    
    
    116,379
    
    
    
    119,068
    
    
    
    101,195
    
    
    
    149,036
    
    
    
    126,016
    
    
    
    188,305Property, plant and equipment
    
    
    2,314,820
    
    
    
    2,279,391
    
    
    
    2,249,063
    
    
    
    2,333,578
    
    
    
    2,311,014
    
    
    
    2,302,200
    
    
    
    2,299,919
    
    
    
    2,246,546
    
    
    
    2,287,385
    
    
    
    2,299,109
    
    
    
    2,371,133Total assets
    
    
    3,138,008
    
    
    
    3,144,075
    
    
    
    3,201,230
    
    
    
    3,117,942
    
    
    
    3,109,691
    
    
    
    3,140,001
    
    
    
    3,107,343
    
    
    
    3,053,932
    
    
    
    3,052,364
    
    
    
    3,059,756
    
    
    
    3,185,004Total long-term debt, including
current portion (3)
    
    
    2,279,822
    
    
    
    2,274,399
    
    
    
    2,145,533
    
    
    
    2,362,282
    
    
    
    2,309,708
    
    
    
    2,199,321
    
    
    
    2,209,603
    
    
    
    2,267,917
    
    
    
    2,358,443
    
    
    
    2,254,038
    
    
    
    2,360,075Shareholders equity
    
    
    455,587
    
    
    
    516,999
    
    
    
    631,359
    
    
    
    337,596
    
    
    
    395,421
    
    
    
    439,013
    
    
    
    443,080
    
    
    
    351,301
    
    
    
    352,385
    
    
    
    338,815
    
    
    
    300,456Wireless voice and data subscribers
    
    
    3,843,200
    
    
    
    3,925,800
    
    
    
    4,023,300
    
    
    
    3,458,300
    
    
    
    3,501,600
    
    
    
    3,616,800
    
    
    
    3,789,400
    
    
    
    3,097,100
    
    
    
    3,164,500
    
    
    
    3,256,900
    
    
    
    3,408,000One-way subscribers
    
    
    231,300
    
    
    
    221,300
    
    
    
    210,600
    
    
    
    289,100
    
    
    
    273,200
    
    
    
    258,400
    
    
    
    241,300
    
    
    
    348,800
    
    
    
    333,300
    
    
    
    316,600
    
    
    
    302,300
   (1)
    
    Effective January 1, 2004, we adopted new accounting standards
regarding the timing of revenue recognition and classification of
certain items as revenue or expense. See the New Accounting
Standards  Revenue Recognition section for further details with
respect to the impact of this reclassification. All prior periods
presented above are prepared on a consistent basis.(2)
    
    Operating profit should not be considered as a
substitute or
alternative for operating income or net income, in each case
determined in accordance with generally accepted accounting
principles (GAAP). See the Reconciliation to Net Income (Loss)
section for a reconciliation of operating profit to operating
income and net income (loss) under GAAP; and the Key Performance
Indicators and Non-GAAP Measures  Operating Profit section.(3)
    
    Total long-term debt, including current portion, has been
presented to include the effect of cross-currency interest rate
exchange agreements for all periods. 25




---



##### 



Rogers Wireless Communications Inc.Unaudited Consolidated Statements of Income Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars except per share amounts)
    
    2004
    
    2003
    
    2004
    
    2003Revenue (Note 1(d)):Postpaid (voice and data)
    
    $
    604,541
    
    
    $
    510,908
    
    
    $
    1,678,470
    
    
    $
    1,408,324Prepaid
    
    
    25,013
    
    
    
    21,172
    
    
    
    75,211
    
    
    
    64,013One-way messaging
    
    
    5,973
    
    
    
    6,815
    
    
    
    18,652
    
    
    
    21,123Network revenue
    
    
    635,527
    
    
    
    538,895
    
    
    
    1,772,333
    
    
    
    1,493,460Equipment sales
    
    
    85,609
    
    
    
    49,720
    
    
    
    197,564
    
    
    
    124,735Total operating revenue
    
    
    721,136
    
    
    
    588,615
    
    
    
    1,969,897
    
    
    
    1,618,195Operating expenses:Cost of equipment sales (Note 1(d))
    
    
    151,675
    
    
    
    94,610
    
    
    
    357,527
    
    
    
    252,009Sales and marketing expenses (Note
1(d))
    
    
    89,605
    
    
    
    85,233
    
    
    
    266,447
    
    
    
    250,086Operating, general and
administrative expenses (Note 1(d))
    
    
    210,292
    
    
    
    186,477
    
    
    
    609,632
    
    
    
    555,449Management fees
    
    
    2,918
    
    
    
    2,834
    
    
    
    8,756
    
    
    
    8,502Depreciation and amortization
    
    
    118,944
    
    
    
    129,069
    
    
    
    357,327
    
    
    
    373,425Operating income
    
    
    147,702
    
    
    
    90,392
    
    
    
    370,208
    
    
    
    178,724Interest expense on long-term debt
    
    
    47,630
    
    
    
    49,339
    
    
    
    152,422
    
    
    
    146,948100,072
    
    
    
    41,053
    
    
    
    217,786
    
    
    
    31,776Foreign exchange gain (loss)
    
    
    10,783
    
    
    
    2,008
    
    
    
    (46,369
    )
    
    
    107,780Change in the fair value of
derivative instruments
    
    
    (5,206
    )
    
    
    
    
    
    
    (9,046
    )
    
    
    Loss on repayment of long-term debt
    
    
    
    
    
    
    
    
    
    
    (2,313
    )
    
    
    Investment and other income
    
    
    4,036
    
    
    
    851
    
    
    
    5,091
    
    
    
    861Income before income taxes
    
    
    109,685
    
    
    
    43,912
    
    
    
    165,149
    
    
    
    140,417Income tax expense  current
    
    
    1,301
    
    
    
    1,171
    
    
    
    3,947
    
    
    
    3,927Net income for the period
    
    $
    108,384
    
    
    $
    42,741
    
    
    $
    161,202
    
    
    $
    136,490Earnings per share (Note 6)Basic
    
    $
    0.76
    
    
    $
    0.30
    
    
    $
    1.13
    
    
    $
    0.96Diluted
    
    
    0.75
    
    
    
    0.30
    
    
    
    1.12
    
    
    
    0.96
 See accompanying Notes to Unaudited Interim Consolidated Financial Statements. 26




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##### 



Rogers Wireless Communications Inc.Unaudited Consolidated Statements of Cash Flows Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003
    
    2004
    
    2003Cash provided by (used in):Operating activities:Net income for the period
    
    $
    108,384
    
    
    $
    42,741
    
    
    $
    161,202
    
    
    $
    136,490Adjustments to reconcile net
income to net cash flows from
operating activities:Depreciation
and amortization
    
    
    118,944
    
    
    
    129,069
    
    
    
    357,327
    
    
    
    373,425Unrealized
foreign exchange
loss (gain)
    
    
    (10,827
    )
    
    
    (2,294
    )
    
    
    44,773
    
    
    
    (107,324
    )Change in the
fair value of
derivative
instruments
    
    
    5,206
    
    
    
    
    
    
    
    9,046
    
    
    
    Loss on
repayment of
long-term debt
    
    
    
    
    
    
    
    
    
    
    2,313
    
    
    
    Gain on sale
of investments
    
    
    (1,445
    )
    
    
    
    
    
    
    (1,445
    )
    
    
    220,262
    
    
    
    169,516
    
    
    
    573,216
    
    
    
    402,591Change in non-cash working
capital items (Notes 1(a) and 9)
    
    
    (1,619
    )
    
    
    49,832
    
    
    
    (139,667
    )
    
    
    8,806218,643
    
    
    
    219,348
    
    
    
    433,549
    
    
    
    411,397Financing activities:Issuance of long-term debt
    
    
    28,000
    
    
    
    68,000
    
    
    
    1,400,500
    
    
    
    426,000Repayment of long-term debt
    
    
    (77,387
    )
    
    
    (176,093
    )
    
    
    (1,484,509
    )
    
    
    (479,430
    )Proceeds on termination of
cross-currency interest rate
exchange agreements
    
    
    
    
    
    
    
    
    
    
    58,416
    
    
    
    Premium on repayment of
long-term debt
    
    
    
    
    
    
    
    
    
    
    (34,713
    )
    
    
    Financing costs incurred
    
    
    
    
    
    
    
    
    
    
    (10,904
    )
    
    
    Issuance of capital stock
    
    
    4,917
    
    
    
    851
    
    
    
    23,899
    
    
    
    2,067(44,470
    )
    
    
    (107,242
    )
    
    
    (47,311
    )
    
    
    (51,363
    )Investing activities:Property, plant and equipment
(PP&E) expenditures
    
    
    (89,911
    )
    
    
    (116,379
    )
    
    
    (305,790
    )
    
    
    (292,865
    )Change in non-cash working
capital items related to PP&E
expenditures
(Note 1 (a))
    
    
    31,846
    
    
    
    (5,203
    )
    
    
    40,771
    
    
    
    (82,984
    )Acquisition of spectrum
licences
    
    
    
    
    
    
    
    
    
    
    (5,913
    )
    
    
    Proceeds on sale of investments
    
    
    1,445
    
    
    
    
    
    
    
    1,445
    
    
    
    Other
    
    
    (1,227
    )
    
    
    
    
    
    
    (1,227
    )
    
    
    (57,847
    )
    
    
    (121,582
    )
    
    
    (270,714
    )
    
    
    (375,849
    )Increase (decrease) in cash and cash
equivalents
    
    
    116,326
    
    
    
    (9,476
    )
    
    
    115,524
    
    
    
    (15,815
    )Cash and cash equivalents (deficiency),
beginning of period
    
    
    (5,035
    )
    
    
    3,729
    
    
    
    (4,233
    )
    
    
    10,068Cash and cash equivalents (deficiency), end
of period
    
    $
    111,291
    
    
    $
    (5,747
    )
    
    $
    111,291
    
    
    $
    (5,747
    )Supplemental cash flow information:Interest paid
    
    $
    39,427
    
    
    $
    3,246
    
    
    $
    129,930
    
    
    $
    103,113Income taxes paid
    
    
    1,679
    
    
    
    3,022
    
    
    
    4,972
    
    
    
    6,277
 Cash and cash equivalents are defined as cash and short-term deposits which have an original
maturity of less than 90 days, less bank advances. See accompanying Notes to Unaudited Interim Consolidated Financial Statements. 27




---



##### 



Rogers Wireless Communications Inc.Unaudited Consolidated Balance Sheets September 30,
    
    December 31,(In thousands of dollars)
    
    2004
    
    2003AssetsCurrent assetsCash and cash equivalents
    
    $
    111,291
    
    
    $
    Accounts receivable
    
    
    348,961
    
    
    
    325,210Other current assets
    
    
    51,128
    
    
    
    38,619Due from parent and affiliated companies (Note 10)
    
    
    1,767
    
    
    
    513,147
    
    
    
    363,829Property, plant and equipment
    
    
    2,249,063
    
    
    
    2,299,919Goodwill
    
    
    7,058
    
    
    
    7,058Spectrum licences
    
    
    402,880
    
    
    
    396,824Deferred charges
    
    
    27,904
    
    
    
    38,163Other long-term assets
    
    
    1,178
    
    
    
    1,550$
    3,201,230
    
    
    $
    3,107,343Liabilities and Shareholders EquityLiabilitiesCurrent liabilitiesBank advances, arising from outstanding cheques
    
    $
    
    
    
    $
    4,233Accounts payable and accrued liabilities
    
    
    328,485
    
    
    
    396,652Current portion of long-term debt
    
    
    918
    
    
    
    2,378Due to parent and affiliated companies (Note 10)
    
    
    
    
    
    
    47Unearned revenue
    
    
    37,362
    
    
    
    34,503366,765
    
    
    
    437,813Long-term debt (Note 2)
    
    
    1,946,308
    
    
    
    2,070,761Derivative instruments (Note 3)
    
    
    198,307
    
    
    
    136,464Deferred transitional gain (Note 4)
    
    
    57,474
    
    
    
    19,225Fair value of derivative instruments
    
    
    1,017
    
    
    
    2,569,871
    
    
    
    2,664,263Shareholders equity (Note 5)
    
    
    631,359
    
    
    
    443,080$
    3,201,230
    
    
    $
    3,107,343
 Canadian and United States accounting policy differences (Note 11).
Subsequent events (Note 12). Contingent liabilities (Note 13). See accompanying Notes to Unaudited Interim Consolidated Financial Statements. 28




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##### 



Rogers Wireless Communications Inc.Unaudited Consolidated Statements of Deficit Nine Months
    
    Nine MonthsEnded
    
    EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003Deficit, beginning of period
    
    $
    (1,444,889
    )
    
    $
    (1,582,730
    )Adjustment for stock-based compensation (Note 1(c))
    
    
    (2,251
    )
    
    
    As restated
    
    
    (1,447,140
    )
    
    
    (1,582,730
    )Net income for the period
    
    
    161,202
    
    
    
    136,490Deficit, end of period
    
    $
    (1,285,938
    )
    
    $
    (1,446,240
    )
 See accompanying Notes to Unaudited Interim Consolidated Financial Statements. 29




---



##### 



Rogers Wireless Communications Inc.
Notes to Unaudited Consolidated Financial Statements
Three and Nine Months Ended September 30, 2004 and 2003 These interim unaudited Consolidated Financial Statements do not include all of the
disclosures required by Canadian generally accepted accounting principles (GAAP). They should be
read in conjunction with the audited Annual Consolidated Financial Statements, including the Notes
thereto, for the year ended December 31, 2003. 1. Basis of Presentation and Accounting Policies: The interim Consolidated Financial Statements include the accounts of Rogers Wireless
Communications Inc. and its subsidiaries (collectively the Company). The Notes presented in these
interim Consolidated Financial Statements include only significant changes and transactions
occurring since the Companys last year end and are not fully inclusive of all matters normally
disclosed in the Companys annual audited Consolidated Financial Statements. These interim Consolidated Financial Statements follow the same accounting policies and
methods of application as the most recent annual financial statements except certain comparative
figures have been reclassified and the following policies have been adopted in the nine months
ended September 30, 2004:  a)
    
    GAAP HierarchyIn June 2003, the Canadian Institute of Chartered Accountants
(CICA) released Handbook Section 1100, Generally Accepted
Accounting Principles. Previously, there had been no clear
definition of the order of authority for sources of GAAP. This
standard established standards for financial reporting in
accordance with Canadian GAAP and applies to our 2004 fiscal year.
This section also provides guidance on sources to consult when
selecting accounting policies and appropriate disclosures when a
matter is not dealt with explicitly in the primary sources of
GAAP.The Company has reviewed this new standard, and as a result
has adopted a classified balance sheet presentation since it
believes the historical industry practice of a declassified
balance sheet presentation is no longer appropriate.In addition, within the Consolidated Statements of Cash
Flows, we have reclassified the change in non-cash working capital
items related to PP&E to investing activities. This change had the
impact of decreasing cash used in investing activities on the
Statements of Cash Flows, compared to our previous method, by
$31.8 million and increasing cash used in investing activities by
$5.2 million in the three months ended September 30, 2004 and
September 30, 2003, respectively. For the nine months ended
September 30, 2004, cash used in investing activities decreased by
$40.8 million and for the nine months ended September 30, 2003
this change had the impact of increasing cash used in investing
activities by $83.0 million. In all periods, the corresponding
change was to non-cash working capital items within operating
activities. 30




---



##### 



b)
    
    Hedging RelationshipsIn November 2001, the CICA issued Accounting Guideline 13,
Hedging Relationships (AcG-13), and in November 2002, the CICA
amended the effective date of the guideline. AcG-13 established
new criteria for hedge accounting and it will apply to all hedging
relationships in effect on or after January 1, 2004. Effective,
January 1, 2004, the Company determined that it would not account
for its cross-currency interest rate exchange agreements as hedges
for accounting purposes and consequently began to account for such
derivatives on a mark-to-market basis with resulting gains or
losses recorded in or charged against income.This resulted in the recognition in the Consolidated
Statement of Income of an unrealized loss related to the change in
fair value of the exchange agreements of $3.8 million for the six
months ended June 30, 2004. A loss of $32.4 million was also
recognized for the six months ended June 30, 2004 related to the
unrealized foreign exchange on the debt previously hedged.The Company also adjusted the carrying value of these
instruments from $136.5 million at December 31, 2003 to the fair
value of $120.4 million on January 1, 2004. The corresponding
transitional loss of $16.1 million was deferred and amortized to
income over the remaining life of the underlying debt instruments.
Amortization for the six months ended June 30, 2004 totalled $0.4
million.Effective July 1, 2004, the Company met the requirements for
hedge accounting under AcG-13 for certain of its instruments, and
consequently, on a prospective basis, began to treat approximately
US$1,240.0 million notional amount of these exchange agreements as
hedges against foreign exchange fluctuations on US$1,240.0 million
of US dollar-denominated debt.A new transition adjustment arising on the change from
mark-to-market accounting to hedge accounting was therefore
recalculated as at July 1, 2004, resulting in a deferred
transitional gain of $53.9 million, which will be amortized to
income over the shorter of the remaining life of the debt and the
term of the exchange agreements. Amortization of this transition
gain from July 1, 2004 to September 30, 2004 totalled $1.6
million.Certain other cross-currency interest rate exchange
agreements will continue not to be accounted for as hedges as they
do not meet the requirements for hedge accounting under AcG-13.
Approximately US$61.8 million notional amount of exchange
agreements will continue to be accounted for on a mark-to-market
basis. The fair value of these exchange agreements was $1.0
million at September 30, 2004.c)
    
    Stock-Based CompensationEffective January 1, 2004, Canadian GAAP requires the Company
to determine the fair value of stock-based compensation awarded to
employees and to expense the fair value over the vesting period of
the stock options. In accordance with the transition rules, the
Company determined the fair value of stock options granted to
employees since January 1, 2002, using the Black-Scholes Option
Pricing model and recorded an adjustment to opening retained
earnings in the amount of $2.3 million, representing the expense
for the 2002 and 2003 fiscal years. The offset to retained
earnings is an increase in contributed 31




---



##### 



surplus. Stock-based compensation expense for the three and
nine months ended September 30, 2004 was $1.0 million and $3.1
million, respectively.d)
    
    Revenue RecognitionEffective January 1, 2004, the Company adopted new Canadian
accounting standards, including the CICA Emerging Issues Committee
Abstract 142 issued in December 2003, regarding the timing of
revenue recognition and the classification of certain items as
revenue or expense.As a result of the adoption of these new accounting
standards, the following changes to the recognition and
classification of revenue and expenses have been made:  
    
    Activation fees are now classified as
equipment revenue. Previously, these amounts were
classified as network revenue.
    
    Recoveries from new and existing subscribers
from the sale of equipment are now classified as
equipment revenue. Previously, these amounts were
recorded as a reduction to sales expense in the
case of a new subscriber, or as a reduction to
operating, general and administrative expense in
the case of an existing subscriber.
    
    Equipment subsidies provided to new and
existing subscribers are now classified as a
reduction to equipment revenue. Previously, these
amounts were recorded as a sales expense in the
case of a new subscriber, or as an operating,
general and administrative expense in the case of
an existing subscriber. Costs for equipment
provided under retention programs to existing
subscribers are now recorded as equipment cost of
sales. Previously, these amounts were recorded as
operating, general and administrative expenses.
    
    Certain other recoveries from subscribers
related to collections activities are now recorded
as network revenue rather than as a recovery of
operating, general and administrative expenses. As a result of the adoption of these new accounting standards, the following changes to the
classification of revenue and expenses have been made: Three Months Ended September 30,
    
    Nine Months Ended September 30,(In millions of dollars)
    
    2004
    
    2003
    
    2004
    
    2003After
    
    Prior to
    
    After
    
    Prior to
    
    After
    
    Prior to
    
    After
    
    Prior ToAdoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    Adoption
    
    AdoptionNetwork revenue
    
    $
    635.6
    
    
    $
    636.7
    
    
    $
    538.8
    
    
    $
    540.7
    
    
    $
    1,772.4
    
    
    $
    1,777.2
    
    
    $
    1,493.4
    
    
    $
    1,499.1Equipment sales
    
    
    85.5
    
    
    
    92.5
    
    
    
    49.8
    
    
    
    59.0
    
    
    
    197.5
    
    
    
    214.3
    
    
    
    124.8
    
    
    
    158.4$
    721.1
    
    
    $
    729.2
    
    
    $
    588.6
    
    
    $
    599.7
    
    
    $
    1,969.9
    
    
    $
    1,991.5
    
    
    $
    1,618.2
    
    
    $
    1,657.5Cost of equipment sales
    
    $
    151.6
    
    
    $
    87.2
    
    
    $
    94.6
    
    
    $
    58.5
    
    
    $
    357.5
    
    
    $
    207.5
    
    
    $
    252.0
    
    
    $
    160.9Sales and marketing
expenses
    
    
    89.6
    
    
    
    132.2
    
    
    
    85.2
    
    
    
    120.8
    
    
    
    266.4
    
    
    
    378.8
    
    
    
    250.1
    
    
    
    349.6Operating, general and
administrative expenses
    
    
    210.3
    
    
    
    240.3
    
    
    
    186.5
    
    
    
    198.0
    
    
    
    609.7
    
    
    
    668.9
    
    
    
    555.4
    
    
    
    586.2
 This change in accounting classification had no effect on the amounts of reported operating
income, net income or earnings per share. All prior period amounts have been conformed to reflect
these changes in classification. 32




---



##### 



2. Long-term Debt: Interest
    
    September 30,
    
    December 31,(In thousands of dollars)
    
    Rate
    
    2004
    
    2003(i) Bank credit facility
    
    Floating
    
    $
    
    
    
    $
    138,000(ii) Senior Secured Notes, due 2006
    
    
    10-1/2
    %
    
    
    160,000
    
    
    
    160,000(iii) Senior Secured Notes, due 2007
    
    
    8.30
    %
    
    
    
    
    
    
    253,453(iv) Senior Secured Debentures, due 2008
    
    
    9-3/8
    %
    
    
    
    
    
    
    430,589(v) Senior Secured Notes, due 2014
    
    
    6-3/8
    %
    
    
    947,925
    
    
    
    (vi) Senior Secured Notes, due 2011
    
    
    9-5/8
    %
    
    
    619,311
    
    
    
    633,276(vii) Senior Secured Debentures, due 2016
    
    
    9-3/4
    %
    
    
    195,778
    
    
    
    200,193(viii) Senior Subordinated Notes, due 2007
    
    
    8.80
    %
    
    
    
    
    
    
    231,443(ix) Mortgage payable and capital leases
    
    Various
    
    
    24,212
    
    
    
    26,1851,947,226
    
    
    
    2,073,139Current portion of long-term debt
    
    
    
    
    
    
    (918
    )
    
    
    (2,378
    )$
    1,946,308
    
    
    $
    2,070,761
 On October 8, 2004, the terms of the bank credit facility were amended (note 11(b)). Issued: In February 2004, the Company issued US$750.0 million 6.375% Senior Secured Notes due 2014. On February 20, 2004, the Company entered into US$750.0 million notional amount of
cross-currency interest rate exchange agreements to reduce the Companys exposure to changes in the
exchange rate of the U.S. dollar as compared to the Canadian dollar. The impact of these
cross-currency interest exchange agreements is to economically hedge these amounts at an average
exchange rate of C$1.33490 to US$1.00. Redeemed: On February 20, 2004, the Company unwound US$333.2 million of cross-currency interest rate
exchange agreements for cash proceeds of $58.4 million. On March 26, 2004, the Company redeemed its US$196.1 million Senior Secured Notes, US$179.1
million Senior Subordinated Notes, and US$333.2 million Senior Secured Debentures for an aggregate
of US$734.7 million, including payment of redemption premiums. This resulted in a loss on the
repayment of long-term debt of $2.3 million, which included redemption premiums of $34.7 million,
the write-off of deferred financing costs of $7.8 million, and a $40.2 million gain on the release
of the deferred transition gain related to the cross-currency interest rate exchange agreements
that were unwound during the quarter which were previously treated as effective hedges prior to our
adoption of new rules with respect to Hedging Relationships as discussed in Note 1(b). As indicated in Note 1(b), the Company determined that it would not account for derivative
instruments, including cross-currency interest rate exchange agreements as effective hedges for
accounting purposes. Accordingly, effective January 1, 2004, the Company records the fair value of
these instruments as a separate component of the balance sheet. As a result, the effect of the
cross-currency interest rate exchange agreements is no longer recorded as a component of long-term
debt. At September 30, 2004, the fair value of derivative instruments is a liability of $1.0
million and is disclosed as a separate component on the consolidated balance sheet. 33




---



##### 



3. Derivative Instruments: The carrying value of derivative instruments represents the impact of the differences in
foreign exchange rates under the cross-currency interest rate exchange agreements used to hedge
long-term debt denominated in U.S. dollars and the spot foreign exchange rate at the balance sheet
date. In the prior year, this amount was recorded as a component of long-term debt on the
consolidated balance sheet. The comparative amount as at December 31, 2003 has been reclassified to
reflect the current years financial statement presentation. 4. Deferred Transitional Gain: The deferred transitional gain arose from changes between mark-to-market accounting and hedge
accounting related to cross-currency interest rate exchange agreements. The transitional gain is
being amortized to income over the shorter of the remaining life of the related debt and the term
of the exchange agreements. Amortization for the three months ended September 30, 2004 totalled
$2.4 million. 5. Shareholders Equity: September 30,
    
    December 31,(In thousands of dollars)
    
    2004
    
    2003Capital stock:Issued and outstanding-90,468,259 Class A Multiple Voting shares
    
    $
    962,661
    
    
    $
    962,66152,595,800 Class B Restricted Voting
shares (2003 - 51,430,178)
    
    
    949,207
    
    
    
    925,3081,911,868
    
    
    
    1,887,969Contributed surplus
    
    
    5,429
    
    
    
    1,917,297
    
    
    
    1,887,969Deficit
    
    
    (1,285,938
    )
    
    
    (1,444,889
    )$
    631,359
    
    
    $
    443,080
  i.
    
    During the nine months ended September 30, 2004, the Company issued 1,165,622 Class B
Restricted Voting shares to employees upon the exercise of employee stock options for cash
of $23.9 million.ii.
    
    Stock-based compensation:On January 1, 2004, the Company adopted CICA Handbook Section 3870 and recorded a
charge to opening retained earnings of $2.3 million for stock options granted to employees
after January 1, 2002 (Note 1(c)).During the three and nine months ended September 30, 2004, the Company recorded
compensation expense of $1.0 million and $3.1 million, respectively, related to stock
options granted to employees on or after January 1, 2002.As a result of the above transactions, $5.4 million was recorded in contributed surplus.Based on stock options issued subsequent to January 1, 2002, the stock-based
compensation expense for the three and nine months ended September 30, 2003 would have been
increased by $0.5 million and $1.2 million, respectively, and pro forma net 34




---



##### 



income for the three and nine months ended September 30, 2003
would have been $42.3 million and $135.3 million, respectively or
$0.29 per share (basic and diluted) and $0.95 per share (basic and
diluted), respectively.There were no options granted by the Company for the nine
months ended September 30, 2004. The weighted average estimated
fair value at the date of the grant for the options granted by the
Company in the nine months ended September 30, 2003 was $10.59 per
share. There were no options issued in the three month ended
September 30, 2003. The fair value of each option granted was
estimated on the date of the grant using the Black-Scholes Option
Pricing Model with the following assumptions: Nine Months EndedSeptember 30,2004
    
    2003Risk-free interest rate
    
    
    
    
    
    
    4.66
    %Dividend yield
    
    
    
    
    
    
    Volatility factor of the future
expected market price of the Companys Class
B Restricted Voting Shares
    
    
    
    
    
    
    56.14
    %Weighted average expected life of the options
    
    
    
    
    
    5 years
 6. Earnings Per Share: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands, except per share amounts)
    
    2004
    
    2003
    
    2004
    
    2003Numerator:Net income for the period  basic and diluted
    
    $
    108,384
    
    
    $
    42,741
    
    
    $
    161,202
    
    
    $
    136,490Denominator:Weighted average number of shares  basic
    
    
    142,959
    
    
    
    141,770
    
    
    
    142,631
    
    
    
    141,752Effect of dilutive securities:Employee stock
options
    
    
    1,137
    
    
    
    442
    
    
    
    1,041
    
    
    
    205Weighted average number of
shares  diluted
    
    
    144,096
    
    
    
    142,212
    
    
    
    143,672
    
    
    
    141,957Earnings per share for the period:Basic
    
    $
    0.76
    
    
    $
    0.30
    
    
    $
    1.13
    
    
    $
    0.96Diluted
    
    
    0.75
    
    
    
    0.30
    
    
    
    1.12
    
    
    
    0.96
 Stock options totaling approximately 0.6 million and 0.6 million for the three and nine months
ended September 30, 2004, respectively, and 0.6 million and 0.6 million for the three and nine
months ended September 30, 2003, respectively have been excluded from the calculation of diluted
earnings per share as their impact is antidilutive. 7. Pensions: For the three and nine months ended September 30, 2004, the Company has made required
contributions to its parent company Rogers Communications Inc. (RCI) pension plans in the amount
of $2.5 million and $5.5 million (2003  $1.5 million and $4.5 million), respectively, resulting in
pension expense of the same amount. In addition, the Company recorded expense of $0.1 million and
$0.8 million (2003  nil and nil) for the three and nine months ended September 30, 2004,
respectively, related to supplemental executive retirement plans that are unfunded. 8. Employee Share Accumulation Plan: Effective the first quarter of 2004, the Company launched an employee share accumulation
program that allows employees to voluntarily participate in a share purchase program. Under 35




---



##### 



the terms of the program, employees of the Company can contribute a specified percentage of
their regular earnings through regular payroll deductions. The administrator of the plan then
purchases Class B Restricted Voting shares of the Company on the open market on behalf of the
employee. At the end of each quarter, the Company makes a contribution of 25% of the employees
contribution in the quarter. The administrator then uses this amount to purchase additional shares
of the Company on behalf of the employee, as outlined above. The Company records its contribution as compensation expense, which amounted to $0.1 million
and $0.2 million for the three and nine months ended September 30, 2004, respectively. 9. Consolidated Statement of Cash Flows  Supplemental Information: The change in non-cash working capital items are as follows: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003
    
    2004
    
    2003Cash provided by (used in):Decrease (increase) in accounts receivable
    
    $
    (31,887
    )
    
    $
    (30,307
    )
    
    $
    (39,055
    )
    
    $
    (10,591
    )Decrease (increase) in other assets, deferred
charges and spectrum licences
    
    
    11,031
    
    
    
    9,177
    
    
    
    (12,280
    )
    
    
    (10,213
    )Increase (decrease) in accounts payable and
accrued liabilities
    
    
    15,407
    
    
    
    65,548
    
    
    
    (89,377
    )
    
    
    41,678Increase (decrease) in unearned revenue
    
    
    5,359
    
    
    
    5,859
    
    
    
    2,859
    
    
    
    (7,595
    )Increase (decrease) in amounts due to (from)
affiliated companies, net
    
    
    (1,529
    )
    
    
    (445
    )
    
    
    (1,814
    )
    
    
    (4,473
    )$
    (1,619
    )
    
    $
    49,832
    
    
    $
    (139,667
    )
    
    $
    8,806
 10. Related Party Transactions: The amounts due from (to) RCI and its subsidiaries and AWE comprise the following: September 30,
    
    December 31,(In thousands of dollars)
    
    2004
    
    2003RCI
    
    $
    (493
    )
    
    $
    (24
    )Rogers Cable Inc. (Rogers Cable)
    
    
    997
    
    
    
    (137
    )AWE
    
    
    1,263
    
    
    
    114$
    1,767
    
    
    $
    (47
    )
 The above amounts reflect intercompany charges for capital and operating expenditures and
management fees, and are short-term in nature. A summary of all significant charges from (to) related parties, which have been accounted for at
exchange amounts, is as follows: 36




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##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003
    
    2004
    
    2003RCI:Management fees
    
    $
    2,919
    
    
    $
    2,834
    
    
    $
    8,757
    
    
    $
    8,502Wireless
services
    
    
    (277
    )
    
    
    63
    
    
    
    (886
    )
    
    
    (539
    )Rent income
    
    
    (1,872
    )
    
    
    (2,262
    )
    
    
    (5,529
    )
    
    
    (6,237
    )Cost of shared
operating expenses
    
    
    51,983
    
    
    
    46,523
    
    
    
    151,265
    
    
    
    139,349Additions to
PP&E (1)
    
    
    9,950
    
    
    
    8,354
    
    
    
    17,780
    
    
    
    14,48962,703
    
    
    
    55,512
    
    
    
    171,387
    
    
    
    155,564Rogers Cable Inc. (Rogers
Cable):Wireless
equipment for
resale
    
    
    (5,168
    )
    
    
    (3,816
    )
    
    
    (12,182
    )
    
    
    (9,343
    )Subscriber
activation
commissions
    
    
    6,142
    
    
    
    2,584
    
    
    
    14,643
    
    
    
    6,941Rent income
    
    
    (1,010
    )
    
    
    (948
    )
    
    
    (3,034
    )
    
    
    (2,779
    )Wireless
services
    
    
    (756
    )
    
    
    (895
    )
    
    
    (2,398
    )
    
    
    (1,782
    )Transmission
facilities usage
    
    
    822
    
    
    
    110
    
    
    
    1,042
    
    
    
    330Consolidated
billing services
(2)
    
    
    (1,722
    )
    
    
    (381
    )
    
    
    (2,886
    )
    
    
    (1,015
    )Charges for
PP&E (1)
    
    
    (1,011
    )
    
    
    
    
    
    
    (1,011
    )
    
    
    (2,703
    )
    
    
    (3,346
    )
    
    
    (5,826
    )
    
    
    (7,648
    )Rogers Media Inc. (Rogers Media):Advertising
    
    
    747
    
    
    
    1,177
    
    
    
    2,173
    
    
    
    2,749Rent income
    
    
    (2,678
    )
    
    
    (2,682
    )
    
    
    (8,425
    )
    
    
    (5,985
    )Wireless
services
    
    
    (213
    )
    
    
    (277
    )
    
    
    (555
    )
    
    
    (381
    )(2,144
    )
    
    
    (1,782
    )
    
    
    (6,807
    )
    
    
    (3,617
    )AWE:Roaming revenue
    
    
    (5,872
    )
    
    
    (4,409
    )
    
    
    (12,146
    )
    
    
    (10,098
    )Roaming expense
    
    
    2,547
    
    
    
    3,081
    
    
    
    8,977
    
    
    
    10,868Over-the-air
activation services
    
    
    
    
    
    
    61
    
    
    
    31
    
    
    
    234(3,325
    )
    
    
    (1,267
    )
    
    
    (3,138
    )
    
    
    1,004$
    54,531
    
    
    $
    49,117
    
    
    $
    155,616
    
    
    $
    145,303
   (1)
    
    Additions to (charges for) PP&E relate primarily to expenditures
on information technology infrastructure and call centre
technologies.(2)
    
    Included in accounts receivable at September 30, 2004 is
approximately $14.7 million related to amounts outstanding for
Rogers Cable services included on consolidated bills to customers
of the Company. The Company has entered into certain transactions with companies, the partners or senior
officers of which are directors of the Company and RCI. During the three and nine months ended
September 30, 2004 the total amounts paid by the Company to these related parties are as follows: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In thousands of dollars)
    
    2004
    
    2003
    
    2004
    
    2003Legal services and
commissions paid on
premiums for insurance
coverage
    
    $
    616
    
    
    $
    400
    
    
    $
    1,416
    
    
    $
    1,200Interest charges
and other financing fees
    
    
    1,166
    
    
    
    4,766
    
    
    
    5,643
    
    
    
    12,066$
    1,782
    
    
    $
    5,166
    
    
    $
    7,059
    
    
    $
    13,266
 37




---



##### 



11. Canadian and United States Accounting Policy Differences: The consolidated interim financial statements of the Company have been prepared in
accordance with GAAP as applied in Canada. In the following respects, GAAP as applied in the
United States differs from that applied in Canada. If United States GAAP were employed, the net
income in each period would be adjusted as follows: Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2003(In thousands of dollars)Net income for
the period based on
Canadian GAAP
    
    $
    161,202
    
    
    $
    136,490Stock-based
compensation (a)
    
    
    3,178
    
    
    
    Loss on
repayment of
long-term debt (b)
    
    
    (28,759
    )
    
    
    Interest
capitalized (e)
    
    
    4,477
    
    
    
    4,343Amortization
of pre-operating
costs (f)
    
    
    
    
    
    
    2,232Depreciation
expense (h)
    
    
    (2,720
    )
    
    
    (2,226
    )Financial
instruments (i)
    
    
    5,379
    
    
    
    (79,026
    )Net income for
the period based on
United States GAAP
    
    $
    142,757
    
    
    $
    61,813Basic earnings
per share based on
United States GAAP
    
    $
    1.00
    
    
    $
    0.44Diluted
earnings per share
based on United
States GAAP
    
    $
    0.99
    
    
    $
    0.44
 The cumulative effect of these adjustments on the consolidated shareholders equity of the
Company is as follows: September 30,
    
    December 31,2004
    
    2003(In thousands of dollars)Shareholders equity based on Canadian GAAP
    
    $
    631,359
    
    
    $
    443,080Loss on repayment of long-term debt(b)
    
    
    (28,759
    )
    
    
    Pushed down goodwill(c)
    
    
    770,757
    
    
    
    770,757Amortization of goodwill(d)
    
    
    (248,890
    )
    
    
    (248,890
    )Interest capitalized(e)
    
    
    35,720
    
    
    
    31,243Conversion costs(g)
    
    
    (3,911
    )
    
    
    (3,911
    )Accumulated depreciation(h)
    
    
    (8,219
    )
    
    
    (5,499
    )Financial instruments(i)
    
    
    15,240
    
    
    
    9,861Shareholders equity based on United States GAAP
    
    $
    1,163,297
    
    
    $
    996,641
 38




---



##### 



(a) Stock-Based Compensation: Under Canadian GAAP, effective January 1, 2004, the Company adopted the fair value method
of recognizing stock-based compensation expense. For United States GAAP purposes, the intrinsic
value method is used to account for stock-based compensation. Compensation expense of $3.2 million
under Canadian GAAP for the nine months ended September 30, 2004 would not be recognized under
United States GAAP. The exercise price of stock options is equal to the market value of the
underlying shares at the date of grant, therefore there is no expense under the intrinsic value
method for United States GAAP purposes for the nine months ended September 30, 2004 and 2003. (b) Loss on Repayment of Long-Term Debt: On March 26, 2004, the Company repaid long-term debt resulting in a loss on early
repayment of long-term debt of $2.3 million. This loss included, among other items, a $40.2 million
gain on the realization of the deferred transitional gain related to cross-currency interest rate
exchange agreements which were unwound in connection with the repayment of long-term debt. Under
United States GAAP, the Company records cross-currency interest rate exchange agreements at fair
value. Therefore, under United States GAAP, the deferred transition gain realized under Canadian
GAAP would be reduced by $28.8 million, representing the $40.2 million gain net of the realization
of a gain of $11.4 million, related to the deferred transition adjustment that arose on the
adoption of Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS 133). (c) Push-down Accounting: Under United States GAAP, purchase transactions that result in an entity becoming a
wholly owned subsidiary establish a new basis of accounting for the entity purchased and its assets
and liabilities. As a result of RCIs acquisition of 100% of the Company in 1989 for United States
GAAP purposes, the Company must record as an asset in its consolidated financial statements the
amount of goodwill that was recorded on the consolidated financial statements of RCI. As this
acquisition was financed principally by the parent company with proceeds from other asset sales, the
corresponding adjustment for the assets recorded was an increase in shareholders equity. At the time of the acquisition by RCI, Canadian GAAP did not permit a subsidiary company
to alter the historical costs of its assets or liabilities upon it being acquired. (d) Amortization of Goodwill: As a result of the push-down accounting described in (c) above, the Company was
required until 2001 to amortize the amount recorded as goodwill under United States GAAP. The
Company had been amortizing this amount under United States GAAP over 40 years on a straight-line
basis. (e) Interest Capitalized: United States GAAP requires capitalization of interest costs as part of the historical
cost of acquiring certain qualifying assets which require a period of time to prepare for their
intended use. This is not required under Canadian GAAP. (f) Pre-operating Costs: Under Canadian GAAP, the Company defers the incremental costs relating to the development
and pre-operating phases of new business, and amortizes these costs on a straight-line basis over
two years. Under United States GAAP, these costs are expensed as incurred. 39




---



##### 



(g) Conversion Costs: Under Canadian GAAP, the Company capitalized certain costs incurred to convert data to
its new customer care and billing system. United States GAAP required these costs to be expensed as
incurred. (h) Accumulated Depreciation: As a result of the capitalization of interest to PP&E required under United States GAAP
described in (e) above, additional depreciation on the interest capitalized is recorded under
United States GAAP in subsequent periods. As a result of conversion costs being expensed under
United States GAAP as described in (g) above, depreciation expense is reduced under United States
GAAP in subsequent periods. (i) Financial Instruments: Under Canadian GAAP, the Company accounts for certain of its cross-currency interest rate
exchange agreements as hedges of specific debt instruments. Under United States GAAP, these
instruments are not accounted for as hedges as a result of adopting SFAS 133 effective January 1,
2001. Changes in the fair value of the derivative financial instruments reflecting primarily market
changes in foreign exchange rates, interest rates, as well as the level of short-term variable
versus long-term fixed interest rates, are recognized in income immediately. Under United States
GAAP, effective January 1, 2001, the Company recorded an increase of $29.2 million in the carrying
value of the derivative financial instruments, to a total of $139.9 million, and a corresponding
increase in the carrying value of long-term debt. This increase in long-term debt has been recorded
for United States GAAP purposes as a cumulative transition adjustment that is being amortized to
net income over the remaining life of the respective long-term debt. (j) Statement of Cash Flows: (i) Canadian GAAP permits the disclosure of a sub-total of the amount of cash
provided by operations before changes in non-cash working capital items while United States
GAAP does not. (ii) Canadian GAAP permits bank advances to be included in the determination of cash
and cash equivalents while United States GAAP requires that bank advances are included in
financing activities. Under United States GAAP, for the nine months ended September 30, 2004,
the increase in cash and cash equivalents of $115.5 million would decrease by $4.2 million and
the cash flows used for financing activities would increase by $4.2 million. The decrease in
cash and cash equivalents of $15.8 million for the nine months ended September 30, 2003 would
decrease by $5.7 million and cash flows used for financing activities would decrease by $5.7
million. (k) Statement of Comprehensive Income: The United States GAAP net income for the nine months ended September 30, 2004 and 2003
is the same as comprehensive income for United States GAAP purposes. 12. Subsequent Events:  (a)
    
    On September 30, 2004, the Company mailed an all cash
offer to acquire all of the outstanding equity
interests of Microcell Telecommunications Inc.
(Microcell), a Canadian wireless communications
company. The estimated cash cost of the acquisition
will be approximately $1.4 billion. Completion of the
transaction is subject to the receipt of certain
regulatory approvals and other conditions. The funding
for this acquisition, if it is completed, will be
comprised of the utilization of the Companys cash on
hand, drawdowns under the Companys committed $700.0
million bank credit facility and proceeds from a bridge
loan from RCI of up to $900.0 million. The bridge loan
will have a term of up to two years from the date of
drawdown and will be made on an unsecured subordinated
basis. The bridge loan will bear interest at 6% per
annum 40




---



##### 



and will be prepayable in whole or in part
without penalty. RCI intends to fund the bridge loan
of up to $900.0 million using cash on hand, cash
proposed to be received from Rogers Cable in the form
of a return of capital and cash proposed to be
received from Rogers Media in the form of a partial
repayment of an intercompany advance made to Rogers
Media by RCI. Each of Rogers Cable and Rogers Media
will make drawdowns under their committed bank credit
facilities to fund the cash transfers to RCI.(b)
    
    On October 8, 2004 the Company and its bank lenders
entered into an amending agreement to the Companys
$700.0 million bank credit facility that provided
among other things, for a two year extension to the
maturity date and the reduction schedule so that the
bank credit facility now reduces by $140 million on
each of April 30, 2008 and April 30, 2009 with the
maturity date on April 30, 2010. The provision for
early maturity in the event that the Companys 10 1/2%
senior secured notes due 2006 are not repaid (by
refinancing or otherwise) on or prior to December 31,
2005 has been eliminated. In addition, certain
financial ratios to be maintained on a quarterly
basis have been made less restrictive, the
restriction on the annual amount of PP&E expenditures
has been eliminated and the restriction on the
payment of dividends and other shareholder
distributions has been eliminated other than in the
case of a default or event of default under the terms
of the bank credit facility.(c)
    
    On October 13, 2004, RCI announced the completion of
its purchase of the 48,594,172 Class B Restricted
Voting shares of the Company owned by JVII General
Partnership (JVII), a partnership owned by AWE, for
a cash price of C$36.37 per share for a total of
approximately $1,767 million. The number of Class B
Restricted Voting shares purchased reflects the
conversion of the Class A Multiple Voting shares
owned by JVII to such Class B shares upon closing.With the completion of the purchase, RCI
beneficially owns 64,911,816 Class B Restricted
Voting shares, representing approximately 80.9% of
the issued and outstanding Class B Restricted Voting
 shares, and 62,820,371 Class A Multiple Voting
 shares, representing 100% of the issued and
outstanding Class A Multiple Voting shares, and which
combined represent a total ownership position of
approximately 89.3% of the total issued and
outstanding shares of both classes of such shares of
the Company.RCI funded the approximate C$1,767 million cash
purchase price of the 48.6 million shares of the
Company through a C$1,750 million secured bridge
financing facility of up to two years with a group of
Canadian financial institutions. The facility
stipulates mandatory repayments, subject to certain
exceptions, from the incurrence of debt or equity of
RCI or the Company. 13. Contingent Liabilities: On August 9, 2004, a proceeding under the Class Actions Act (Saskatchewan) was brought against
the Company and other providers of wireless communications services in Canada. The proceeding
involves allegations by wireless customers of breach of contract, misrepresentation and false
advertising. The plaintiffs seek unquantified damages from the defendant wireless 41




---



##### 



communications service providers. The Company believes it has good defences to the
allegations. The proceeding has not been certified as a class action and it is too early to
determine whether the proceeding will qualify for certification as a class action. About the Company: Rogers Wireless Communications Inc. (TSX: RCM.B; NYSE: RCN) operates Canadas largest
integrated wireless voice and data network, providing advanced voice and wireless data solutions to
customers from coast to coast on its GSM/GPRS network, the world standard for wireless
communications technology. The Company has over 4.2 million customers, and has offices in Canadian
cities across the country. Rogers Wireless Communications Inc. is approximately 89% owned by Rogers
Communications Inc. For Further Information (Investment Community): Bruce M. Mann, 416.935.3532, bruce.mann@rci.rogers.com
Eric A. Wright, 416.935.3550, eric.wright@rci.rogers.com For Further Information (Media): Heather Armstrong, 416.935.6379, heather.armstrong@rci.rogers.com Quarterly Investment Community Conference Call: As previously announced, a live Webcast of the quarterly results conference call with the
investment community will be broadcast via the Internet at www.rogers.com/webcast beginning at
10:00 a.m. ET on October 26, 2004. A re-broadcast of this call will be available on the Webcast
Archive page of the Investor Relations section of www.rogers.com for a period of at least two weeks
following the call. # # # 42