Make more possible

Rogers Communications Inc. | 2018 Annual Report Our Purpose

To connect Canadians to a world of possibilities and the memorable moments that matter most in their lives

2 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT About Rogers

We are a team of proud Canadians dedicated to making more possible for our customers each and every day.

Our founder, Ted Rogers, believed in the power of communication to enrich, entertain and embolden Canadians. He followed in his father’s footsteps, and at the age of 27, purchased his first radio station, CHFI.

From these modest beginnings, we have grown to become a formidable technology company. A company devoted to delivering the very best in wireless, residential and media to Canadians and Canadian businesses.

Table of Contents

PAGE 3 PAGE 4 PAGE 6 PAGE 8 About A Message A Message A Year Rogers from Edward from Joe in Review

PAGE 10 PAGE 11 PAGE 12 PAGE 146 Senior Executive Directors 2018 Corporate and Officers Financial Report Shareholder Information

2018 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 3 A MESSAGE FROM EDWARD

Edward Rogers Chair, Board of Directors Rogers Communications Inc.

My Fellow Shareholders,

Rogers was founded almost 60 years ago through has delivered strong and consistent long-term results the purchase of a single radio station. Even during for all shareholders. Over the past 10 years, Rogers has those early entrepreneurial days, Ted Rogers’ goal was generated total shareholder returns of 178%, and the to not only build a successful business for the long-term, company’s market value has doubled over the last 9 years. but to also build a great Canadian company; one that served the needs of its local communities while also While these strong results demonstrate the value of our contributing to the leadership and development of strategy, we understand there is always more work to be a young and growing nation. He understood that done. We have grown to become one of Canada’s most long-term focus, discipline and ongoing investment trusted brands as we now reach 98% of all Canadians would be required to achieve this goal and he incor- through our wireless, cable, business services, media and porated this thinking into the birth and growth sports operations. This is a significant responsibility that of Rogers Communications. Canadians entrust us to manage thoughtfully and is a relationship we will continue to invest in and respect. Building off these founding principles, Rogers delivered strong operational and financial results in 2018, as In 2018, our markets remained highly competitive across we led our industry in many financial and operational all of our businesses. While many of our businesses metrics. Under the leadership of our CEO, Joe Natale, continue to undergo change, we are well positioned to our management team and all 26,000 of our employees, embrace those changes and deliver leading next gener- Rogers made impressive progress on its strategic plan ation content, networks and products to our customers. and priorities, successfully balancing both short-term performance with long-term investments. In Wireless, we remained Canada’s largest provider with more than 10.7 million subscribers. In 2018 we delivered Our results in 2018 build on our multi-decade com- industry leading revenue and profitability growth, mitment to invest for the long-term, and this approach improved customer loyalty, and continued to make the

4 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT “I have full confidence in our management team to continue to make the Rogers organization better every day.” key investments required to build one of the fastest and Rogers is strong and well positioned for the future. I have most secure 5G networks in the world. Going forward, full confidence in our management team to continue to we are committed to making significant investments in make the Rogers organization better every day. We will this business to improve customer service and ensure work hard to earn our position as leaders in our industry, Canadians have access to the most powerful, secure in our country and in our communities as we make the and reliable networks. ongoing investments to enrich the lives of Canadians.

In our Cable business we have made investments to I want to thank the Rogers board of directors for their bring our customers the most innovative and forward- contributions and confidence. With their leadership we looking television experience available anywhere with have strengthened our Board governance and practices. the launch last year of Ignite TV. Today, we provide the They bring a tremendous amount of experience and fastest and most reliable Internet speeds across our ability to our Board and its subcommittees and their entire cable footprint, which has been achieved by the counsel has been invaluable. multi-decade investments we have committed. Finally, I also want to thank our shareholders for your Rogers has also established a terrific mix of assets in support of Rogers. We are an energized and enthusiastic sports and media. Today we are the national leader in organization looking forward to continuing to invest, sports, local radio, publishing, home shopping and TV compete and serve our customers in this growing, programming. This mix positions us well for the future, changing and exciting media and communications as these industries continue to adapt to the changing industry in the coming years. viewing and listening preferences of Canadians.

Like the coast-to-coast fans that proudly cheer on our Edward S. Rogers teams in person or through our broadcasts, we are Chair of the Board very proud of Rogers’ national sports presence and the Rogers Communications Inc. contribution it makes to Canada’s cultural fabric. We have the country’s only national baseball team in the Toronto Blue Jays. We have co-ownership in the country’s only national basketball team in the Raptors, and we exclu- sively manage the NHL national broadcast rights to Canada’s national pastime. We are thrilled to offer these cherished assets to Canadians and will continue to invest in these entities for the enjoyment of future generations.

2018 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 5 A MESSAGE FROM JOE

Joe Natale President and CEO Rogers Communications Inc.

Dear Shareholders,

I believe we play a meaningful role in the lives of investing to be at the centre of this opportunity. We are Canadians each and every day. At the heart of it, making the right investments to bring this world to we connect people, businesses and communities Canadians. I am incredibly proud of our team and their to each other, and to the world around them. efforts to make this possible for our customers.

Consumers and businesses rely on our technology 2018 accomplishments services now, more than ever. To us, it is more than The right team and culture is the critical foundation watching a movie, exploring the web or messaging to building a high-performing company. From my each other. We want the promise of technology to perspective, we have one of the best teams in our deliver a world of possibilities – stronger human industry globally. In 2018, we achieved global best- connections, healthier lives, growth and prosperity, in-class employee engagement and we were named memorable experiences – to unleash all it has to offer one of Canada’s Top 100 Employers. society. This is a significant responsibility and it is one we deliver with tremendous pride and passion. Our team’s #1 priority is putting our customers first in everything we do. Our customer-first mindset is perme- We are in the very early stages of the modern digital ating the hearts and minds of our team and it is starting age. As a country, we are on the cusp of the next major to show up in our performance. Last year, we delivered phase of innovation and investment. Soon, 5G will usher our best Wireless customer loyalty in 10 years. We saw in solutions and capabilities that are as typical as the substantial improvements in customer adoption of our 4G services we enjoy today – services that arrived with web and mobile apps. Most importantly, we listened great promise only a few short years ago, and now play carefully to our customers’ feedback and introduced a central role in our everyday life. At Rogers, we are hundreds of service improvements.

6 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT We began our journey to bring Canadians the Con- of Canadians. We are extremely proud of our volunteer- nected Home of the future with the launch of Ignite TV. ing, community grants and Ted Rogers Scholarship Fund. Our world-class Internet platform and our Connected Overall, we contributed over $60 million to 1,900 chari- Home roadmap will continue to be sources of compe- ties across Canada, awarded 313 scholarships, and titive advantage as we enable Canadians with this volunteered 20,000 hours. powerful set of solutions.

We made strategic investments in our networks and “Our team’s #1 priority technology, the lifeblood of our business. We upgraded is putting our customers our 4G network to make it 5G-ready, announcing a key strategic partnership with Ericsson, the 5G first in everything we do.” partner of choice. Our investments allow us to deliver the right customer experiences today, and the right Looking ahead capabilities tomorrow. As I look to the future, we remain committed to becoming a world-class technology company. A company relent- We delivered on our financial guidance, generating lessly focused on growing our core business, investing in the best financial and subscriber performance in almost our future and delivering a strong return to shareholders. a decade. We grew total revenue by 5% and adjusted We are on a journey to becoming one of the best brands EBITDA by 9%. We grew after-tax free cash flow by 5% in Canada; to becoming one of the best places to work; while investing $2.8 billion in capital and returning $988 and to becoming a company Canadians choose first. million to shareholders. These results were reflected in our total shareholder return of 12.5%. We are incredibly It is an incredibly exciting time for our industry and proud of these results and their ability to fuel future our company. Working together, we will build on Ted’s investment and growth. legacy and write the next chapter in Rogers history.

As a proud Canadian company, we made substantive I am immensely proud of our team and I am excited contributions to our country – investing $2.8 billion in about our future and how we will make more possible infrastructure, paying $1.1 billion in taxes and fees, and for Canadians. devoting $679 million to produce Canadian content. My very best, We made meaningful contributions to communities Joe across the country, improving and enriching the lives

2018 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 7 A Year in Review

Deliver innovative solutions and compelling content that our customers will love.

·· Introduced Ignite TV across our Ontario cable footprint ·· Invested $679 million to produce meaningful Canadian content ·· Celebrated 50 years of local programming through Rogers TV

Create best-in-class customer experiences by putting our customers first in everything we do.

·· Delivered the best Wireless customer loyalty result in ten years ·· Improved customer self-serve and grew customer digital adoption ·· Hired an additional 1,000 team members to support our customers

Invest in our networks and technology to deliver leading performance and reliability.

·· Invested to deliver advanced LTE capabilities to Canadians ·· Signed a strategic partnership with Ericsson, the 5G partner of choice ·· Received the 2018 Speedtest® Award for Canada’s Fastest Internet from Ookla®

8 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Drive profitable growth in all the markets we serve.

·· Achieved 2018 guidance targets, and raised adjusted EBITDA guidance in the third quarter ·· Grew total revenue by 5% and adjusted EBITDA by 9% ·· Delivered total shareholder return of 12.5%, 21 points above the TSX Composite Index

Be a strong, socially responsible leader in our communities across Canada.

·· Contributed over $60 million through cash and in-kind investments to help our communities thrive ·· Expanded our Connected for Success affordable Internet program to 300 non-profit housing providers ·· Volunteered over 20,000 hours to local charities across the country

Develop our people and a high performance culture.

·· Achieved best-in-class employee engagement score ·· Recognized as one of Canada’s Top 100 Employers and a Top Employer for Young People ·· Invested $43 million in developing our employees

2018 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 9 Senior Executive Officers

1 2 3 4 5

6 7 8 9 10

1. Joe Natale 6. Brent Johnston President and President, Wireless Chief Executive Officer 7. Graeme McPhail 2. Rick Brace Chief Legal and Regulatory Officer President, Media and Secretary

3. Lisa Durocher 8. Dean Prevost Chief Digital Officer President, Rogers for Business

4. Jorge Fernandes 9. Jim Reid Chief Technology and Chief Human Resources Officer Information Officer 10. Tony Staffieri,FCPA , FCA 5. Phil Hartling Chief Financial Officer President, Residential

10 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Directors

1 2 3 4 5

6 7 8 9 10

11 12 13 14 15

1. Edward S. Rogers 7. Alan D. Horn, CPA, CA 12. The Hon. David R. Peterson, PC, QC Chair President and Chief Chairman Emeritus Executive Officer, Rogers Cassels Brock & Blackwell LLP 2. John H. Clappison, FCPA, FCA Telecommunications Limited Lead Director 13. Loretta A. Rogers 8. Philip B. Lind, CM Company Director 3. Bonnie R. Brooks, CM Vice Chair Company Director 14. Martha L. Rogers 9. John A. MacDonald Company Director 4. Robert K. Burgess Company Director Company Director 15. Melinda M. Rogers 10. Isabelle Marcoux Deputy Chair 5. Robert Dépatie Chair, Transcontinental Inc. Company Director 11. Joe Natale 6. Robert J. Gemmell President and Company Director Chief Executive Officer

2018 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 11 MANAGEMENT’S DISCUSSION AND ANALYSIS

2018 Financial Report

13 MANAGEMENT’S DISCUSSION AND ANALYSIS 46 Managing Our Liquidity and Financial Resources 46 Sources and Uses of Cash 15 Executive Summary 49 Financial Condition 15 About Rogers 50 Financial Risk Management 15 2018 Highlights 54 Dividends and Share Information 17 Financial Highlights 55 Commitments and Contractual Obligations 55 Off-Balance Sheet Arrangements 18 Understanding Our Business 18 Products and Services 56 Governance and Risk Management 20 Competition 56 Governance at Rogers 21 Industry Trends 57 Social Responsibility 58 Income Tax and Other Government Payments 23 Our Strategy, Key Performance Drivers, and Strategic 59 Risk Management Highlights 60 Risks and Uncertainties Affecting Our Business 23 Our Strategic Priorities 67 Controls and Procedures 24 2018 Objectives 24 Key Performance Drivers and 2018 Strategic Highlights 68 Regulation In Our Industry 26 2019 Objectives 70 Wireless 27 Financial and Operating Guidance 72 Cable 74 Media 28 Capability to Deliver Results 28 Leading Networks 75 Other Information 30 Powerful Brands 75 Accounting Policies 30 Widespread Product Distribution 82 Key Performance Indicators 30 First-Class Media Content 84 Non-GAAP Measures 30 Customer Experience 86 Summary of Financial Results of Long-Term Debt 31 Engaged People Guarantor 31 Financial Strength and Flexibility 87 Five-Year Summary of Consolidated Financial Results 31 Healthy Trading Volumes and Dividends

32 2018 Financial Results 32 Summary of Consolidated Results 33 KeyChangesinFinancialResultsThisYearComparedto 2017 34 Wireless 35 Cable 37 Media 38 Capital Expenditures 39 Review of Consolidated Performance 42 Quarterly Results 45 Overview of Financial Position

12 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 13 | , , guidance anticipate , , may , project , expect ROGERS COMMUNICATIONS INC. plan , , could estimate , 2018 ANNUAL REPORT intend , , and similar expressions, although not all forward- believe , assume outlook, target looking information includes them; on our currentexpectations, assumptions, objectives and other and factors,confidential most and strategies of proprietary which and and are reasonable that at on we the time estimates, believeincorrect; they to and were have applied been but may prove to be subscribe; of new services; Forward-looking information: • typically includes words like • includes conclusions, forecasts, and projections that are based • was approved by our management on theOur date forward-looking of information this includes MD&A. forecasts andrelated projections to themeasures (see “Non-GAAP following Measures”), among items, others: • some revenue; of• which total service are revenue; •adjustedEBITDA; non-GAAP • capital expenditures; • cash income tax payments; •freecashflow; •dividendpayments; • the growth of new• products and expected services; growth in subscribers and the• services the to cost which of they acquiring and retaining subscribers• and deployment continued cost reductions and• efficiency improvements; traction against our debt• leverage ratio; all and other statements that are not historicalSpecific facts. forward-looking informationthis included document or includes, incorporated butstatements is in under not “Financial limited to, andour our Operating information 2019 Guidance” and relating consolidated to capital guidance expenditures, and on free revenue,are cash not adjusted flow. historical facts All are EBITDA, other forward-looking statements. statements that We base our conclusions, forecasts,aforementioned and guidance) on projections the (including following the factors,• among others: general economic and industry• growth rates; currency exchange rates and• interest rates; product pricing levels and• competitive intensity; subscriber growth; • pricing, usage, and churn• rates; changes in government regulation; • technology deployment; • availability of devices; • timing of new product• launches; content and equipment costs; • the integration of acquisitions;• and industry structure and stability. Except as otherwise indicated, thisinformation MD&A do and not our reflect the forward-looking potentialor impact of any other non-recurring mergers, special acquisitions, items or other of business any combinations, dispositions, or monetizations, other refers RCI refers to the the Company refers to the three and refers to the twelve last year refers to the three months refers to the three months ,thisyear refers to the three months ended the fourth quarter Revenue from contracts with customers the third quarter the second quarter the first quarter twelve months ended December 31,is 2017. All results compared commentary December 31, to 2017, as applicable, the unless otherwise indicated. equivalentEffective January 1, periods 2018,that we in are adopted new discussed 2017adoption accounting in standards of or “Accounting(IFRS IFRS Policies” as 15) in 15, had at thisWireless a segment. MD&A. Affected significant 2017 amounts The effect presentedhave in on been this restated MD&A our in accordance reported with IFRS results 15. Effective in January our 1, 2018,and we commenced redefined using ourprofit. adjusted reportable Affected EBITDA 2017 segments amounts as presentedrestated. our See in “Understanding key this Our MD&A Business” measure for have more of been information. ABOUT FORWARD-LOOKING INFORMATION This MD&A includes “forward-lookinglooking information” statements” and within “forward- laws the (collectively, meaning “forward-looking information”), ofabout, and among applicable assumptions other securities things, ourperformance business, and operations, condition and approved financial bydate our of management on this the assumptions MD&A. include, but This are forward-lookingobjectives not information limited and to, and strategies statementsour to these about our achieve beliefs, thoseintentions. objectives, plans, and about expectations, anticipations, estimates, or ended September 30, 2018, months ended December 31,months 2018 ended December 31, 2018, and refer to Rogers Communications Inc.to and its the subsidiaries. legal entitysubsidiaries. Rogers Rogers also Communications holds Inc., interestsventures. in not various including investments its and We are publicly traded onand the RCI.B) Toronto and Stock on Exchange the (TSX: New York RCI.A Stock ExchangeIn (NYSE: RCI). this MD&A, ended June 30, 2018, March 31, 2018, Management’s Discussion and Analysis This Management’simportant Discussion information about and our businessthe and Analysis year our performance ended (MD&A) for December 31,conjunction 2018. contains This MD&A should with beStatements, read in our whichInternational 2018 have Financial Reporting Audited Standards beenInternational (IFRS) Accounting as Standards prepared Consolidated issued Board (IASB). by in the Financial All accordance dollar amounts with are inAll Canadian percentage changes dollars are unless calculated otherwise usingas stated. the they rounded appear numbers in2019 the and tables. was This MD&A approvedThis is MD&A by current includes RCI’s forward-looking as Board statements atSee of and “About March Forward-Looking assumptions. Directors 6, Information” for (the more Board). information. We, us, our, Rogers, Rogers Communications, MANAGEMENT’S DISCUSSION AND ANALYSIS

transactions that may be considered or announced or may occur and caution them that it would be unreasonable to rely on such after the date on which the statement containing the forward- statements as creating legal rights regarding our future results or looking information is made. plans. We are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing RISKS AND UNCERTAINTIES forward-looking information or the factors or assumptions Actual events and results can be substantially different from what is underlying them, whether as a result of new information, future expressed or implied by forward-looking information as a result of events, or otherwise, except as required by law. All of the forward- risks, uncertainties, and other factors, many of which are beyond looking information in this MD&A is qualified by the cautionary our control, including but not limited to: statements herein. • regulatory changes; • technological changes; BEFORE MAKING AN INVESTMENT DECISION • economic conditions; Before making any investment decisions and for a detailed • unanticipated changes in content or equipment costs; discussion of the risks, uncertainties, and environment associated • changing conditions in the entertainment, information, and/or with our business, fully review the sections in this MD&A entitled communications industries; “Regulation In Our Industry” and “Governance and Risk • the integration of acquisitions; Management”, as well as our various other filings with Canadian • litigation and tax matters; and US securities regulators, which can be found at sedar.com and • the level of competitive intensity; sec.gov, respectively. • the emergence of new opportunities; and • new interpretations and new accounting standards from FOR MORE INFORMATION accounting standards bodies. You can find more information about us, including our Annual These factors can also affect our objectives, strategies, and Information Form, on our website (investors.rogers.com), on intentions. Many of these factors are beyond our control or our SEDAR (sedar.com), and on EDGAR (sec.gov), or you can e-mail us current expectations or knowledge. Should one or more of these at [email protected]. Information on or connected risks, uncertainties, or other factors materialize, our objectives, to these and any other websites referenced in this document does strategies, or intentions change, or any other factors or not constitute part of this MD&A. assumptions underlying the forward-looking information prove You can also find information about our governance practices, incorrect, our actual results and our plans could vary significantly corporate social responsibility reporting, a glossary of from what we currently foresee. communications and media industry terms, and additional Accordingly, we warn investors to exercise caution when information about our business at investors.rogers.com. considering statements containing forward-looking information

14 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 15 | %Chg not be considered 1 ompare us to other 127 54 5.9% 3.1 pts 2017 3,726 10 2,153 1 8,569 7 1,819 3 3,9386,765 9 5 3,894 1 5,5021,902 9 18 2,4361,685 15 5 1,845 12 43.5% 1.0 pts 46.7% 1.0 pts 38.3% 1.3 pts 12,550 3 14,369 5 $3.58 12 $3.69 18 (restated) ROGERS COMMUNICATIONS INC. Years ended December 31 196 9.0% 2018 4,090 2,168 9,200 1,874 4,288 7,091 3,932 5,983 2,241 2,790 1,771 2,059 44.5% 47.7% 39.6% 12,974 15,096 $4.00 $4.35 2018 ANNUAL REPORT standard meanings, so may not be a reliable way to c Almost all of ourhighly operations skilled and and salesemployees. are diversified in Our workforce Canada. head of Wenumerous office have approximately is a offices 26,100 inoperations Toronto, across in Ontario three reportable and Canada. segments.Business” we See for “Understanding have more We information. Our report our results of uding how we calculate them. are not defined terms under IFRS and do not have information about these measures, incl 3 3 4 3 2 3 3 5 These figures have been retrospectively amended as a result of our reportable segment realignment. See “Understanding Our Business”. As defined. See “Key Performance Indicators”. Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic earnings per share, and freeIncludes cash additions to flow property, are plant non-GAAP and measures equipment net and of should proceeds on disposition, but does not include expenditures for spectrum licences. 2017 reported figures have been restated applying IFRS 15. See “Accounting Policies”. companies. See “Non-GAAP Measures” for substitutes or alternatives for GAAP measures. These Adjusted EBITDA margin Cable Adjusted EBITDA Adjusted EBITDA margin Adjusted EBITDA Adjusted EBITDA margin Media Revenue Free cash flow Revenue Adjusted EBITDA Adjusted EBITDA margin Basic earnings per share Adjusted basic earnings per share Cash provided by operating activities Wireless Service revenue Adjusted EBITDA Consolidated Total revenue (In millions of dollars, except margins and per share amounts) 5 3 4 1 2 Revenue 2018 HIGHLIGHTS KEY FINANCIAL INFORMATION Rogers is amedia company. We leading are Canada’s diversified largestand provider of Canadian data wireless voice communications communications servicesproviders and and of one cable ofservices television, to Canada’s high-speed consumers leading Internet andare businesses. and engaged Through telephony in Rogers radio Media andand we television online broadcasting, shopping, sports, magazines televised andpublicly digital media. traded Our shares on are RCI.B) the and Toronto on the Stock New York Exchange Stock Exchange (TSX: (NYSE: RCI). RCI.A and Executive Summary ABOUT ROGERS Capital expenditures Adjusted net income Total service revenue Net income MANAGEMENT’S DISCUSSION AND ANALYSIS

KEY PERFORMANCE INDICATORS As at or years ended December 31 2017 2018 (restated) 1 Chg Subscriber results (in thousands) 2 Wireless postpaid net additions 453 354 99 Wireless prepaid net (losses) additions (152) 61 (213) Wireless subscribers 10,783 10,482 301

Internet net additions 3 109 95 14 Internet subscribers 3 2,430 2,321 109

Television net losses (55) (80) 25 Television subscribers 1,685 1,740 (55)

Phone net additions 8 14 (6) Phone subscribers 1,116 1,108 8

Total service unit net additions 3,4 62 29 33 Total service units 3,4 5,231 5,169 62 Additional Wireless metrics 2 Postpaid churn (monthly) 1.10% 1.20% (0.10 pts) Blended ABPU (monthly) $ 64.74 $ 62.31 $ 2.43 Blended ARPU (monthly) 5 $ 55.64 $ 54.23 $ 1.41 Ratios Capital intensity 2 18.5% 17.0% 1.5 pts Dividend payout ratio of net income 2 48.0% 53.6% (5.6 pts) Dividend payout ratio of free cash flow 2,6 55.8% 58.6% (2.8 pts) Return on assets 2 6.5% 6.1% 0.4 pts Debt leverage ratio 6 2.5 2.7 (0.2) Employee-related information Total active employees (approximate) 26,100 24,500 1,600

1 Certain 2017 reported figures have been restated applying IFRS 15. See “Accounting Policies”. 2 As defined. See “Key Performance Indicators”. 3 These figures have been retrospectively amended as a result of our reportable segment realignment. See “Understanding Our Business”. 4 Includes Internet, Television, and Phone subscribers. 5 Blended ARPU has been restated for 2017 using revenue recognition policies in accordance with IFRS 15. 6 Dividend payout ratio of free cash flow and debt leverage ratio are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information about these measures, including how we calculate them.

16 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 17 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT adjusted EBITDA, partially offset byexpense, higher associated income higher tax restructuring, depreciation and acquisitionConsolidated amortization, and Performance” for and more information. other higher costs. Seehigher adjusted “Review EBITDA, partiallyand of amortization. offset by higher depreciation outstanding net debt,network, and continue return to substantialpaid make $988 dividends million to investments in shareholders.increase in dividends in We our in our annualized 2018 dividend rate and in announced January 2019. a 4.2% year, primarily as a result oftaxes higher paid, net income partially and lowerbalances. offset income Free by cash flow the increasedas net 5% this a change year result to in $1,771 ofcapital contract million higher expenditures. asset adjusted EBITDA, partially offset by higher 2018 from 2.7adjusted net debt as and higher at adjusted EBITDA. December 31,at December 2017, 31, 2018 driven (2017average – by 4.70%) term and lower to ourDecember overall 31, maturity weighted 2018 (2017 on – 9.9 years). our debt wasliquidity 10.7 (2017 years –under as our $2.7 bank at and billion) letter of including credit facilities $1.6 (2017accounts – billion $2.3 receivable billion), available securitization(2017 - nil) program, in cash and and cash equivalents. $0.4 billion $0.4 billion (2017 – $0.4 billion) available under our $1.05 billion HIGHER NET INCOME AND ADJUSTED NET• INCOME Net income increased 12% primarily as a result of higher • Adjusted net income increased 18% this year as a resultSUBSTANTIAL FREE CASH of FLOW SUPPORTS FINANCIAL FLEXIBILITY • Our substantial cash flow generation enabled us to reduce • Our cash provided by operating activities increased by 9% this • Our debt leverage ratio improved to 2.5 as• at Our December overall 31, weighted average cost of borrowings was 4.45% as • We ended the year with approximately $2.4 billion of available strong flow-through ofabove, the partially service offset revenueincreased by subscriber growth volumes and higher costs described of expenditures devices. associated with strong Internet revenue growth, the ongoinghigher-margin product Internet mix services, and shift various to cost efficiencies. result ofoperating increased revenue expensesstructure as from across the discussed improvements divisions, which310basispointsfromlastyear. above made led to and to a margin lower our of 9.0%, cost up adjusted EBITDA marginpoints. of 39.6%, This an increase100 expansion was basis of point primarily expansion 130 to drivenpoint basis 44.5%, expansion and to by Cable, 47.7%. with Wireless, a 100 with basis a service revenue growth of 5%. balanced approachdemand to for continue datasubscriber base monetizing along management. with the a increasing disciplined approachincrease in around Internet revenue,customers due to to the higherInternet general service speed movement pricing of and changes,The increase and usage was a tiers, partially largerrevenue, offset subscriber the primarily by base. due lower impact topast Television of and Television year Phone subscriber and lossessubscribers. the We over continue impact the to of seeto an promotional ongoing higher-margin shift pricing Internet in provided productInternet services, mix base to with at the 60% end ofof100megabitspersecondorhighercomparedto54%atthe of 2018 on our plans residential with downloadend speeds of last year. at the TorontoMajorLeagueBaseball,andhighernetworksubscription Blue Jays, primarilyrevenue, partially due offset by to lower overall a advertising revenue. distribution from • Wireless adjusted EBITDA increased 10% this year as a result of • Cable adjusted EBITDA increased 3% this year• as Media a adjusted result EBITDA of increased 54% this year primarily as a HIGHER ADJUSTED EBITDA • Adjusted EBITDA increased 9% this year, with a consolidated FINANCIAL HIGHLIGHTS HIGHER REVENUE • Revenue increased by 5% this year,• primarily driven Wireless by Wireless service revenue increased largely as a result of• our Cable revenue increased marginally as a result of the 7% • Media revenue increased marginally as a result of higher revenue MANAGEMENT’S DISCUSSION AND ANALYSIS

Understanding Our Business Rogers is a leading diversified Canadian communications and non-GAAP measures and should not be considered substitutes or media company. alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable THREE REPORTABLE SEGMENTS way to compare us to other companies. See “Non-GAAP We report our results of operations in three reportable segments. Measures” for information about these measures, including how Each segment and the nature of its business are as follows: we calculate them.

Segment Principal activities PRODUCTS AND SERVICES Wireless Wireless telecommunications operations for Canadian consumers and businesses. WIRELESS Rogers is a Canadian leader in delivering a range of innovative Cable Cable telecommunications operations, including Internet, television, telephony wireless network technologies and services. Our postpaid and (phone), and smart home monitoring prepaid wireless services are offered under the Rogers, Fido, and services for Canadian consumers and chatr brands, and provide consumers and businesses with the latest businesses, and network connectivity wireless devices, services, and applications including: through our fibre network and data centre • mobile and fixed high-speed Internet access; assets to support a range of voice, data, • wireless voice and enhanced voice features; networking, hosting, and cloud-based • wireless home phone; services for the enterprise, public sector, • device protection; and carrier wholesale markets. • text messaging; •e-mail; Media A diversified portfolio of media • global voice and data roaming, including Roam Like Home and properties, including sports media and Fido Roam; entertainment, television and radio • bridging landline phones with wireless phones through products broadcasting, specialty channels, multi- like Rogers Unison; platform shopping, digital media, and • machine-to-machine solutions and Internet of Things (IoT) publishing. solutions; and • advanced wireless solutions for businesses. See “Capability to Deliver Results” for more information about our extensive wireless and cable networks and significant wireless spectrum position. CABLE Our cable network provides an innovative and leading selection of Wireless and Cable are operated by our wholly-owned subsidiary, high-speed broadband Internet access, digital television and online Rogers Communications Canada Inc. (RCCI), and certain of our viewing, phone, and advanced home Wi-Fi services to consumers other wholly-owned subsidiaries. Media is operated by our wholly- in Ontario, New Brunswick, and on the island of Newfoundland. We owned subsidiary, Rogers Media Inc., and its subsidiaries. also provide services to businesses and enterprises across Canada that aim to meet the increasing needs of today’s critical business Effective January 1, 2018, we redefined our reportable segments as applications. In 2018, we launched our new all-IP television a result of technological evolution and the increased overlap product, Ignite TV, to our entire Ontario Cable footprint. Ignite TV, between the various product offerings within our legacy Cable and which is licensed from Comcast Corporation (Comcast), delivers a legacy Business Solutions reportable segments, as well as how we high-value, premium service with advanced features and video allocate resources amongst, and the general management of, our experiences and is the foundation to a robust product roadmap of reportable segments. The results of our legacy Cable segment, innovation leading to a truly connected home service. legacy Business Solutions segment, and our Smart Home Monitoring products are presented within a redefined Cable We intend to adopt Comcast’s new Digital Home solution as a first segment. Financial results related to our Smart Home Monitoring step on our innovation roadmap. This whole-home networking products were previously reported within Corporate items and solution will provide customers with a simple, fast, and intuitive way intercompany eliminations. We have retrospectively amended our to control and manage their connected devices. The cloud-based 2017 comparative segment results to account for this redefinition. platform will link to the new Data Over Cable Service Interface Specifications (DOCSIS) 3.1 Wi-Fi gateway devices to deliver fast, Additionally, effective January 1, 2018, we commenced using reliable connectivity in the home and will allow customers to easily adjusted EBITDA as the key measure of profit for the purpose of add and control devices, pair Wi-Fi extenders that boost signal assessing performance for each segment and to make decisions strength, and use voice controls to see who is on the network, all in about the allocation of resources. This measure replaced our a safe and secure manner. previous adjusted operating profit non-GAAP measure. We believe adjusted EBITDA more fully reflects segment and consolidated Internet services include: profitability. The difference between adjusted operating profit and • Internet access (including basic and unlimited usage packages), adjusted EBITDA is that adjusted EBITDA includes stock-based security solutions, and e-mail; compensation expense. Use of this measure changed our • access speeds of up to one gigabit per second (Gbps), covering definition of free cash flow. Adjusted EBITDA and free cash flow are our entire Cable footprint;

18 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 19 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Entertainment Ltd. (MLSE), which ownsthe the Toronto Toronto Maple Leafs, Raptors,the Toronto FC, Toronto the Marlies,holdings; Toronto as and Argonauts, well and as various associatedprovider real estate ofservices multicarrier with several hundred wireless Canadian retail and distribution outlets. wireline products and Sportsnet 360, and Sportsnet World; broadcast distributionindividuals; to approximately 83%OMNI of Regional, which Canadian provide multilingualto all newscasts digital nationally basic television subscribers; Outdoor Life Network (OLN); and generates a significant andonline growing sales. portion of its revenue from Sportsnet NOW, and Sportsnet NOW+; Chatelaine, Today’s Parent, and Hello! Canada; and associated with our various brands and businesses. OTHER We offer theMastercard, Rogers and Worldcustomers the Elite Fido to Mastercard,spending. Mastercard, Rogers earn credit Platinum cashback cards rewards that points allow OTHER INVESTMENTS on creditWe card holdarrangements, some of interests which include: • in our a 37.5% number ownership of interest associates in and Maple joint Leaf• Sports our 50% & ownership interest in Glentel Inc. (Glentel),We a also large holdpublicly a traded number companies, ofCommunications including Inc. interests Cogeco in Inc. marketable and securities Cogeco of Our NHL Agreement,season, allows which us to runs deliverhockey, unprecedented through coverage with of professional the morestreamed than 2025-2026 across 1,200 NHL television, regular smartphones,both season through tablets, games traditional and streaming per theLIVE services (formerly Internet, season Rogers as NHL wellnational GameCentre as LIVE). rights Rogers It on NHL also thoseStanley grants platforms Rogers Cup to Final, theevents Stanley all (such Cup as NHL-related the Playoffs NHLsublicense and special All-Star broadcasting Game events and rights the andBroadcasting to NHL Corporation non-game Draft), Groupe (CBC), rights and to TVA rightsIn to and Canada use brand the the through Hockey a Canadian Night sublicense agreement. In Television,television we networks: operate• several Sportsnet’s four conventional regional and stations• specialty along City with Sportsnet network, ONE, which, together with• OMNI affiliated multicultural stations, broadcast has television stations,• specialty including channels that include FX (Canada),• FXX (Canada), TSC, and Canada’s only nationally televised shopping channel, which In Radio, weacross operate Canada, including 55 popular AM radio680 NEWS, brands and Sportsnet such The FM as FAN, KiSS, 98.1 radio JACK CHFI, FM, stations andWe SONiC. also in offer a markets range of• digital services our and products, including: digital sports-related assets,• including many Rogers NHL well-known LIVE, consumer• a brands, range of other such websites, apps, podcasts, as and digital products Maclean’s, bridging, and back-up connectivity. switching services, providingwide scalable area and privatecritical secure networking business metro that applicationsmany and enables for offices, and businesses data interconnects cloud that centres, applications) across have Canada; or one points or of presencewith (as security-embedded, well cloud-based, as solutions; professionally-managed and services over multi-servicecustomers customer to scale access and add devicesInternet, services, IP that such voice, as and allow private cloudgrow networking, solutions, with which their blend business seamlessly requirements; to TV services; apps such as YouTube and Netflix on Ignite TV; and 4K PVR capabilities; onto your smartphone or tablet toIgnite TV watch app; at a later time using the Blue Jays homeLeague games (NHL) and and National Basketball selectand Association (NBA) marquee games; National Hockey personal computers through theTV apps. Ignite TV or Rogers Anyplace or IP-based Ignitepackages TV, along with including à la starter carte channels; and premium channel fast and reliableand speeds options with for self-installation; the and freedom of unlimitedmonitoring, usage security, automation,control energy through a efficiency, smartphone app. and smart Our portfolio ofcoast. Media assets reaches CanadiansIn from Sports coast Media and to Entertainment,Canada’s we only own Major the League Toronto BaseballCentre Blue (MLB) Jays, event team, and venue, thegames, Rogers concerts, which trade shows, hosts and special the events. Toronto Blue Jays’ home MEDIA • optical wave, Internet, Ethernet, and multi-protocol label • simplified information technology (IT) and network technologies • extensive wireless and cable access networks services for primary, Phone services include: • residential and small business• local telephony calling service; features and such as voicemail, call waiting,Enterprise and services long include: distance. • voice, data networking, Internet protocol (IP), and Ethernet • on-demand television; • cloud-based digital video recorders (DVRs) available• with Ignite voice-activated remote controls, restart features, and• integrated personal video recorders (PVRs), including• Whole Download Home and Go, PVR the ability to download recorded programs • linear and time-shifted programming; • digital specialty channels; • 4K television programming, including regular season Toronto • televised content delivered on smartphones, tablets, and Television services include: • local and network TV, made available through traditional digital • Rogers Ignite and Fido Internet unlimited packages, combining • Rogers Smart Home Monitoring, offering services such as MANAGEMENT’S DISCUSSION AND ANALYSIS

COMPETITION years. The outcome of these auctions may increase competition. See “Regulation In Our Industry” for more information. Competition in the telecommunications industry continues to intensify, with national, regional, and reseller players giving CABLE consumers a broader choice in service providers and plan offerings. Internet This puts downward pressure on pricing, potentially reducing profit We compete with other Internet service providers (ISPs) that offer margins, and could also affect our subscriber churn. residential high-speed Internet access services. Rogers and Fido Traditional wireline telephony and television services are now high-speed Internet services compete directly with, among others: offered over the Internet. This has allowed more non-traditional • Bell and Bell Aliant’s Internet services in Ontario, New Brunswick, providers to enter the market and has changed how traditional and on the island of Newfoundland; and providerscompete.Thisischangingthemixofpackagesand • various resellers using wholesale telecommunication company pricing that service providers offer and could affect churn levels. digital subscriber line (DSL) and cable Third-Party Internet Access (TPIA) services in local markets. In the media industry, there continues to be a shift towards digital and online media consumption; advertisers are directing more A number of different players in the Canadian market also advertising dollars to those media channels. In addition, we now compete for enterprise network and communications services. compete with a range of digital and online media companies, There are relatively few national providers, but each market has including large global companies. its own competitors that usually focus on the geographic areas where they have the most extensive networks. In the enterprise market, we compete with facilities- and non-facilities-based WIRELESS telecommunications service providers. In markets where we own We compete on customer experience, price, quality of service, network infrastructure, we compete with incumbent fibre-based scope of services, network coverage, sophistication of wireless providers. Our main competitors are as follows: technology, breadth of distribution, selection of devices, and • Ontario – Bell, Cogeco Data Services, and Zayo; branding and positioning. • Quebec – Bell, Telus, and Videotron; • Wireless technology – our extensive long-term evolution (LTE) • Atlantic Canada – Bell Aliant and Eastlink; and network caters to customers seeking the increased capacity and • Western Canada – Shaw and Telus. speed it provides. We compete with BCE Inc. (Bell), TELUS Corporation (Telus), Shaw Communications Inc. (Shaw), Television Videotron, SaskTel, and Eastlink Inc. (Eastlink), all of whom We compete with: operate LTE networks. We also compete with these providers on • other Canadian multi-channel broadcast distribution high-speed packet access (HSPA) and global system for mobile undertakings (BDUs), including Bell, Shaw, and other satellite communications (GSM) networks and with providers that use and IPTV providers; alternative wireless technologies, such as Wi-Fi “hotspots” and • over-the-top (OTT) video offerings through providers like Netflix, mobile virtual network operators (MVNO), such as Primus. YouTube, Hulu, Apple, Amazon Prime Video, Crave, Google, • Product, branding, and pricing – we compete nationally with Bell, and other channels streaming their own content; and Telus, and Shaw, including their flanker brands Virgin Mobile • over-the-air local and regional broadcast television signals (Bell), Lucky Mobile (Bell), Koodo (Telus), Public Mobile (Telus), received directly through antennas, the illegal distribution of and Freedom Mobile (Shaw). We also compete with various Canadian and international channels via video streaming boxes, regional players and resellers. and the illegal reception of US direct broadcast satellite services. • Distribution of services and devices – we compete with other service providers for dealers, prime locations for our own stores, and third-party retail distribution shelf space. Phone • Wireless networks – consolidation amongst regional players, or We compete with: with incumbent carriers, could alter the regional or national • Bell and Bell Aliant’s wireline phone service in Ontario, New competitive landscapes for Wireless. Brunswick, and on the island of Newfoundland; • Inbound roaming – we compete with other major national • incumbent local exchange carrier (ILEC) local loop resellers and carriers to provide service to international operators who have voice over IP (VoIP) service providers (such as Primus and customers who roam while in Canada. Comwave), other VoIP-only service providers (such as Vonage • Spectrum – Innovation, Science and Economic Development and Skype), and other voice applications riding over the Internet Canada (ISED Canada) has announced a 600 MHz spectrum access services of ISPs; and licence auction, to take place in March 2019, and future high- • substitution of wireline for wireless products, including mobile frequency spectrum licence auctions in the next one to two phones and wireless home phone products.

20 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 21 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT CABLE TRENDS Technology advancement, non-traditionalbehaviours, competitors, and consumer regulatory advancementCable. are The key Internet areas and social influencing mediaa are substitute increasingly for being wireline used telephone as increasingly services, and available televised content online. is (cord Downward Television shaving) tiersubstitution and migration (cord cutting) Television appearadoption to cancellation of be OTT on with services, thebased such rise TV as with the boxes. increased Apple The TV, intentaccess CRTC’s Netflix, rates decision and of to Android- may lowerInternet also services. wholesale adversely Internet affect companies thatBroadcast wholesale television technology continuesbroadcasts, to and improve high with dynamicand improved 4K range video image TV (HDR) colour and for saturation. higher resolution INDUSTRY TRENDS The telecommunications industrysegments in are Canada affectedchanging by and technologies, consumer various our demands, economic overarchingand conditions, reporting trends regulatory relatingAffecting to Our developments. Business” and “Regulationinformation. See Below In is Our a “Risks Industry” summary for ofspecific the reportable more and segments. industry trends affecting our Uncertainties WIRELESS TRENDS More sophisticated wireless networksmultimedia and and devices Internet-based andand the applications faster rise are to of receive makingConsumer data, it driving growth easier demand inon-demand wireless content for data is pushing services. providers mobile tosupport build networks that devices, the can messaging, digital and expanded other wireless media,to use data. Mobile and increase commerce oftechnology continues to as facilitate wireless applications, transactions. more mobileWireless devices video, providers andbroadband are wireless platforms investingAccess, data adopt 4.5G, and networks, in future secure 5G suchdata demand technologies, the and to as new support products next and the Licensed applications. growing Assisted Wireless generation market penetration in of Canada ispopulation approximately and 87% is of expected the toData Corporation’s continue August growing, 2018 per Market Forecast International Report. TheCommission Canadian (CRTC) Wireless Codeterm has contracts Radio-television limited to consumer two years wireless fromgreater three number years, and which of has customers resultedat in completing any a and given Telecommunications renewing time. Shorter-term contracts to contracts recover allow subsidies. less time for carriers Subscribers are increasingly bringing theirtheir own existing devices devices or longer and keeping contracts therefore may for not enter wirelesssubscriber into term services. churn, Thisopportunities as but may a result of negatively mayalso increased churn impact may from create other negatively our carriers.subscribers. This impact gross the addition monthly service subscriber feesWireless providers charged are to collaborating withcustomers OTT unique, services value-added benefits to and offer service their options. digital and printed; including digital news services,available streaming via social services, networking and services; and content attention, and loyalty. which combineavailability of free, live radio broadcasts on-demand and podcasts; musicapps, services which allow free with or paidfrom music users’ the and smartphones; radio streaming directly outdoor advertising; and digital assistants,players. music downloading, and portable media Media, CorusSiriusXM; Entertainment, and satellite radio operator games; markets, including those ownedMedia, and and operated Corus by Entertainment; the CBC, Bell shifting capability available to subscribers; outdoor advertising; and services. Our digital media and publishing productsand compete advertisers for with: readership • other Canadian magazines, both• digital and foreign, printed; mostly US, titles• that online sell directly information into and Canada, both entertainment websites• other and traditional media, such apps, as TV and radio. TSC competes with: •retailstores; • Internet, catalogue, and direct• mail retailers; infomercials that sell products• on television; other and television channels, for channel placement, viewer • broadcast and Internet radio platforms, such as• iHeartRadio, iTunes Music, Spotify, Radioplayer Canada, and• comparable other media, including newspapers, magazines, television,• and new technologies, such as online web information services, Our radio stations competemarkets, mainly but with they also individual compete stations with: • in local other large, national radio operators, including the CBC, Bell MEDIA Competition in Sports Media and Entertainment• includes other: televised and online sports• broadcasters; Toronto professional teams, for attendance at Toronto• Blue Jays MLB teams, for Toronto• Blue Jays local players sporting and and fans; special• event venues; professional sports teams, for• merchandise sales new revenue; digital and sports media companies. Television andadvertisers with: specialty• services other compete Canadian television for stations that viewers broadcast in and their• local other specialty channels; • distant Canadian signals and US border stations, given• the time- other media, including• newspapers, content magazines, available on radio, the Internet, and such as web-based streaming MANAGEMENT’S DISCUSSION AND ANALYSIS

The CRTC Basic Telecommunications Services decision established Our enterprise customers are using third parties to increase security several criteria to improve Internet access for Canadian residents for their data and information to address cyber threats and other and businesses. As a result, the CRTC believes fixed broadband information security risks. subscribers should have access to speeds of at least 50 Mbps Devices and machines are becoming more interconnected and download and 10 Mbps upload, and access to a service with an there is more reliance on the Internet and other networks to unlimited data allowance. facilitate updates and track usage. The CRTC is considering creating a new code of conduct for Internet services in order to establish guidelines for consumer MEDIA TRENDS interactions with their ISPs. Access to live sports and other premium content has become even Our digital cable and VoIP telephony services compete with more important for acquiring and retaining audiences that in turn competitor IPTV deployments and non-facilities-based service attract advertisers and subscribers. Therefore, ownership of content providers, respectively, which continue to increase competitive and/or long-term agreements with content owners has also intensity that have and may continue to negatively impact the become increasingly important to media companies. Leagues, industry. teams, networks, and new digital entrants are also experimenting with the delivery of live sports content through online, social, and Cable and wireline companies are expanding their service offerings virtual platforms, while non-traditional sports are also growing in to include faster broadband Internet. Canadian companies, mindshare. including Rogers, are increasingly offering download speeds of 1 Gbps and Internet offerings with unlimited bandwidth. Consumer demand for digital media, mobile devices, and Consumers are demanding ever-faster speeds for streaming online on-demand content is increasing and media products, such as media, playing online video games, and for their ever-growing magazines, have experienced significant digital uptake, requiring number of connected devices. In order to help facilitate these industry players to increase their efforts in digital content and speeds, cable and wireline companies are shifting their networks capabilities in order to compete. This trend is also causing towards higher speed and capacity DOCSIS 3.1 and advertisers to shift their spending from conventional TV and print fibre-to-the-home (FTTH) technologies. These technologies provide publishing to digital platforms. faster potential data communication speeds than earlier Competition has changed and traditional media assets in Canada technologies, allowing both television and Internet signals to reach are increasingly being controlled by a small number of competitors consumers more quickly in order to sustain reliable speeds to with significant scale and financial resources in order to compete address the increasing number of Internet-capable devices. with digital competitive factors. Technology has allowed new Our enterprise customers use fibre-based access and cloud entrants and even individuals to become media players in their own computing to capture and share information in more secure and right. accessible environments. This, combined with the rise of Some players have become more vertically integrated across both multimedia and Internet-based business applications, is driving traditional and emerging platforms. Relationships between exponential growth in data demand. providers and purchasers of content have become more complex. Enterprises and all levels of government are transforming data Global aggregators have also emerged and are competing for centre infrastructure by moving toward virtual data storage and both content and viewers. hosting. This is driving demand for more advanced network functionality, robust, scalable services, and supportive dynamic network infrastructure. Canadian wireline companies are dismantling legacy networks and investing in next generation platforms and data centres that combine voice, data, and video solutions onto a single distribution and access platform. As next generation platforms become more popular, our competition will begin to include systems integrators and manufacturers.

22 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 23 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT DEVELOP OUR PEOPLE AND A HIGHCULTURE PERFORMANCE Our people and our cultureand are their the heart passion andincredible. soul for Our of strategy our our success, istraining customers to and invest and our moreaccountabilities development in company for our all is programs people employees.our truly employment through We brand and and are to working makefor to Rogers to attracting a and top strengthen employer retaining establish known theopen, best trusting, clear talent. This and means diverseand fostering performance. workplace an grounded in accountability BE A STRONG, SOCIALLY RESPONSIBLE LEADERCOMMUNITIES IN ACROSS OUR CANADA Givingbackwhereweliveandworkisanimportantpartofwhowe are. Our goal is toin be each a region relevant of andlocal respected our community country. teams leader Thiscommunities means to and leveraging our beprogram. to strong active deliver a and strong, engaged regionally volunteers empowered in our DRIVE PROFITABLE GROWTH IN ALL THESERVE MARKETS WE The overarching goalgrowth in of a our sustainableprofit, free strategy way cash and flow, is an translateshareholders. to increasing it return Our accelerate into on assets, strongdeveloping focus revenue and margins, returns a is to stronginvestments on capability to fuel our our in future. cost core management growth to drivers support while Rogers has some of theincluding most a sought-after deep media assets roster in ofand Canada, leading award-winning sports assets, television top programming.be radio Canadians stations, able expect to to consumewant. the content We they want, willaudiences when continue and value where to they andchoice. invest want in most, delivering delivered the on content their our screens of customers first in everything we do; performance and reliability; customers will love; across Canada. Innovation has always been acompelling part products and of innovative our solutions DNA. tomake We our customers strive their that to deliver livestechnologies and easier. remarkable We innovationsmaking them from will more cost-effective across for do us. the this globe, by leveraging proven DELIVER INNOVATIVE SOLUTIONS AND COMPELLING CONTENTTHATOURCUSTOMERSWILLLOVE We believe thatworld-class networks performance are the isdeliver lifeblood critical high-performing of to our network ourperformance business and services future. and reliability. Our with Ourwill investments plan a allow in is our focus us cable to toand on network reliability. continue Accelerated core to investments improve inensure our Cable we wireless Internet keep network performance will while up setting with the stage our for a customers’ smooth evolution growing to 5G. data demands INVEST IN OUR NETWORKS AND TECHNOLOGYDELIVER TO LEADING PERFORMANCE AND RELIABILITY Everything starts and endsexperience is with core our to customer, ourend-to-end so service strategy. experiences We improving by obsess their listening overour carefully our to customers the customers’ and voice the of focus voice on of our making front-line. thingswhile We we clear, continue will building simple, continue our to and digitalhave capabilities reliable fair so and our consistent for customers experiences across our our customers channels. CREATE BEST-IN-CLASS CUSTOMER EXPERIENCES BY PUTTING OUR CUSTOMERS FIRST IN EVERYTHING WE DO Our strategy builds onmix our of many network strengths,best-in-class including and our customer media unique experience, assets.deliver grow industry-leading Our shareholder value. the focus core is business, clear:To and achieve deliver these goals, our a strategic• priorities are Create as follows: best-in-class customer• experiences Invest by in putting our• networks our Deliver and innovative technology solutions and to• compelling deliver Drive content profitable growth leading that in• all our the Develop markets our we people serve; and• a high Be performance culture; a and strong, socially responsible leader in our communities OUR STRATEGIC PRIORITIES Our Strategy, Key Performance Drivers,As and part Strategic of our Highlights overallpriorities strategy and and address related short-term priorities, opportunities we and set risks. corporate objectives each year to measure progress on our long-term strategic MANAGEMENT’S DISCUSSION AND ANALYSIS

2018 OBJECTIVES For 2018, we set forth the following objectives related to our strategic priorities.

Strategic Priority 2018 Objectives Create best-in-class customer experiences by putting our Improve our end-to-end customer experience by improving customers first in everything we do critical end-to-end processes; investing in multi-channel capabilities; simplifying frontline tools; and delivering online tools and apps to improve our customers’ experiences Invest in our networks and technology to deliver leading Deliver improved network performance and system stability by performance and reliability improving the performance and reliability of both our wireless and cable networks Deliver innovative solutions and compelling content that our Deliver solutions that will grow our core business through a customers will love smooth launch of Ignite TV and the delivery of other innovative content solutions and compelling content Drive profitable growth in all the markets we serve Achieve our 2018 financial targets while at the same time investing to support future growth and driving a focus on cost management and margin improvement Develop our people and a high performance culture Make Rogers one of the best places to work in Canada by strengthening our employment brand; supporting the personal and career development of our leaders and teams; improving the employee experience, especially for our frontline team; and evolving our incentive plans to drive a “customer first” culture Be a strong, socially responsible leader in our communities Develop a better local presence in our key regional markets across Canada through the launch of our Give Together Community Investment program; the delivery of a strong, regionally empowered program and plan; and the expansion of Internet service for all Canadians

KEY PERFORMANCE DRIVERS AND 2018 STRATEGIC HIGHLIGHTS The following achievements display the progress we made towards meeting our refocused strategic priorities and the objectives we set along with them, as discussed above.

CREATE BEST-IN-CLASS CUSTOMER EXPERIENCES BY INVEST IN OUR NETWORKS AND TECHNOLOGY TO PUTTING OUR CUSTOMERS FIRST IN EVERYTHING WE DO DELIVER LEADING PERFORMANCE AND RELIABILITY • Attracted our highest number of Wireless postpaid net additions • Invested in LTE Advanced network technology for wireless and realized our lowest annual Wireless postpaid churn rate network capacity and performance. since 2009. • Worked with Ericsson, the North American 5G partner of choice, • Invested in the modernization of our Fido and Rogers retail to densify our network with small and macro cell sites and stores. upgrade our 4.5G network with the latest 5G-ready technology. • Renewed our focus on digital self-serve, growing our customer • Launched a three-year partnership with the University of British digital adoption rate and allowing our customers to access their Columbia (UBC) to create Canada’s first real-world 5G hub on accounts and purchase new products with ease. UBC’s campus, facilitating research and developing 5G • Increased customer experience metrics to account for 50% of applications. our 2018 company-wide bonus plan. • Received the 2018 Speedtest® Award for Canada’s Fastest Internet by Ookla®, a global leader in fixed broadband and mobile network testing, following ongoing investment in our network.

24 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 25 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT in-kind donations to various charitable organizations and causes. to dependents of our hard-workingprogram employees. Additionally, this providedacross 105 the grantsprograms country for to youth. that community provide organizations innovativeincluding and through educational our first-everwhere team Give members gave Together over Volunteer 10,00050 hours charitable Days, organizations. of support to over giving campaign, Give Together Month,employee where donations Rogers to matched the charityeach. of their choice, up to $1,000 we share customerlegal information authorities as in part response ofsafety our while to protecting obligation our to requests customers’ contribute privacy. from to public access tolow-income affordable, Canadian high-speedhousing partners Internet households across our cable to through footprint. over 300 200,000 subsidized low-cost Government of Canada Internet initiative. for 2018 by Achievers. Vice President and above. January 2018, which sharedlead data in on gender equality overinternal around 100 the companies statistics, world. who Theconscious policies, GEI programs looks engagement, that at reflect our womenintheworkplaceandmarketplace. and our commitment other to advancing gender- BE A STRONG, SOCIALLY RESPONSIBLE LEADERCOMMUNITIES IN ACROSS OUR CANADA • Invested over $60 million in our communities• through Awarded cash 313 and scholarships through our community partners and • Volunteered over 20,000 hours to local charities across Canada, • Raised over $2.5 million from our second annual employee • Released Rogers’ 2018 Transparency Report, which outlines how • Expanded access to Connected for Success, a program offering • Became a participating partner in Connecting Families, a • Recognized as one of Canada’s 50• Most Engaged Achieved female Workplaces representation of 30% for executive positions of • Named to the 2018 Bloomberg Gender-Equality Index (GEI) in the 6th year in a row,Toronto including recognition Area’s as one of TopPeople, the a Greater Best Employers, Diversity Employer, and aEmployers, one in of reports Top Canada’s released Greenest by Mediacorp Employer Inc. for Young EBITDA guidanceOperating in Guidance” for more the information. third quarter. See “Financial21 percentage and points above the TSX Composite Index return. launched employee trials in our Atlantic Canada Cable footprint. entertainment, news, and sports programmingbroadcast year. during the 2018 number-one sports media brand. CityNews in Vancouver, Montreal, and Calgary,102.1 the CJCY acquisition in of Medicine Hat,sites and in the Ottawa launch and of Kitchener in hyper-local partnership news with Village Media. national NHL Agreement, reachingduring an audience the of 24.6watched 2018 million Stanley Cup Final Stanley since 2014. Cup Playoffs, including the most DEVELOP OUR PEOPLE AND A HIGHCULTURE PERFORMANCE • Achieved a best-in-class employee• engagement score. Recognized as one of Canada’s Top 100 Employers for 2018, for • Achieved our 2018 guidance targets after raising our adjusted • Grew total revenue by• 5% and Delivered adjusted EBITDA by 9%. total shareholder return of 12.5% in 2018, DRIVE PROFITABLE GROWTH IN ALL THESERVE MARKETS WE DELIVER INNOVATIVE SOLUTIONS AND COMPELLING CONTENTTHATOURCUSTOMERSWILLLOVE • Launched Ignite TV to• our Invested almost Cable $700 footprint million to in produce Ontario and create and Canadian • For the fourth consecutive year, Sportsnet was• ranked Celebrated Canada’s 50 years of• local programming Expanded through our Rogers presence TV. in local markets with the introduction of • Successfully completed the fourth year of our exclusive 12-year MANAGEMENT’S DISCUSSION AND ANALYSIS

2019 OBJECTIVES

Strategic Priority 2019 Objectives Create best-in-class customer experiences by putting our Improve our end-to-end customer experience by creating customers first in everything we do frictionless multi-channel capabilities; invest in distribution improvements; simplify frontline tools; and deliver personalized online tools and apps to improve our customers’ experiences Invest in our networks and technology to deliver leading Deliver network performance and a system stability plan that performance and reliability supports our 5G and Connected Home roadmaps by increasing our fibre deployments, densifying our network, and modernizing our IT systems Deliver innovative solutions and compelling content that our Deliver solutions that will grow our core businesses by customers will love expanding our 5G network capabilities, extending our Ignite Connected Home products, and growing our compelling content and data-driven advertising solutions Drive profitable growth in all the markets we serve Drive company-wide financial results by achieving our financial goals and 2019 guidance while investing to support future growth and driving a focus on cost management and margin improvement Develop our people and a high performance culture Build our culture and our reputation by cultivating strong, accountable leaders in a high-performing culture, sustaining and growing best-in-class engagement, and becoming a destination for talent Be a strong, socially responsible leader in our communities Become a strong home team in each region by growing our across Canada community investment and giving program, building on our regional focus, and supporting our rural and affordable access agenda

26 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 27 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT competitive wireless and cable networks4.5G through (i) to building 5G a fibre-coaxial wireless network network to andper lower node, the (ii) utilize number upgrading themore of our reliable latest homes customer technologies, hybrid experience; passed and and deliver an even Home roadmap in 2019. which we operate; expenditures is$1.25/US$; hedged at an average exchangein economic rate conditions,environment or of macro affecting changesregulatory our in decisions the business issued competitive underlying during activities. assumptions 2019 around We our couldor 2019 Media note materially Wireless, results Cable, alter that in and/ which are the currently current unknown and and not future factored into years, our the guidance; value impacts of smartphones andsimilar select rates in higher 2019 data comparedof customers to usage remain 2018 on packages and term a contracts; at similar proportion similar rate as in 2018; impacted by changing competitive dynamics; Television subscribers; andbase; a decline in our Phonetraditional subscriber media businesses; and • we continue to invest appropriately to ensure we have • we continue to make expenditures related to our Connected The above table2019 outlines consolidated guidanceconsideration ranges financial for our metrics. selectedestimated current effect full-year of These our outlook, adoptioncumulative of ranges IFRS our catch-up 16 basis on 2018 January take andthe 1, not 2019 financial results, on retrospectively. into outlook a The is andin purpose to of assist understanding the investors, shareholders, certain2019 and others financial financial metricsbusiness. results relating This for topurposes. information Information evaluating expected may about theassumptions our underlying not it, guidance, performance is including forward-looking beconjunction and the of should with appropriate be various “About read our Forward-Looking in forUncertainties Information”, Affecting “Risks other and Ourand Business”, and information theregulatory related assumptions, factors, about disclosure and risksfuture that various may financial cause our economic,currently actual and expect. operating competitive, results and Any to updates to differ ourthe full-year from year would financial only what guidance bethat over made appear we the to above. the course consolidated of guidance ranges Key underlying assumptions Our 2019 guidance ranges aboveincluding, are but based not on limited many to,the assumptions the full-year following 2019: material assumptions for • continued increase in competitive• intensity a in all substantial segments in portion of• our key 2019 interest rates• remain US relatively no stable throughout significant 2019; dollar-denominated additional legal or regulatory developments, shifts • Wireless customers continue to adopt, and upgrade to, higher- • overall wireless market penetration in Canada grows• in 2019 our at relative a market share in Wireless• and Cable continued is not subscriber negatively growth in Wireless and• Internet; in stable Media, continued growth• in with sports respect to and the increase declines in capital in expenditures: certain 1 ✓ ✓ ✓ ✓ 2019 Guidance Ranges 2018 Actual Achievement 5,983 8.7% 2,790 n/m 1,771 5.1% 15,096 5.1% 5,9832,790 Increase2,134 of 7% to 9% Increase of 200 to 300 2,850 to 3,050 2018 Actual e “Managing our Liquidity and Financial 2018 2,850 Ranges 3% to 5% 7% to 9% 5% to 7% Guidance 1 2017 1,685 Increase of 5,502 Increase of 2,436 2,650 to (restated) 2 4 4 (IFRS 16) on January 1, 2019. See “Accounting Policies” for more 2,3 3 2,3,5 3 Leases Resources” for morechange on information, full-year 2018 including free cash a flow. reconciliation of the impact of this Includes additions to property, plantbut and does not equipment include net expenditures of forEffective proceeds spectrum January on licences. disposition, 1, 2019,flow presented we above will reflects amend this change. our Se definition of free cash flow. Free cash information. We will record theeffective initial impacts January of 1, adoptingprospectively IFRS 2019. from 16 that The in date. Our ourguidance ongoing 2018 opening results ranges balance impacts will for sheet not will be adjustedadoption restated be EBITDA such of that and addressed IFRS our freeadjusted 2019 in EBITDA 16. cash and our free Were flow cash results include flow we would the each to have effect been adopt of $174 million IFRS our higher. 16 on a retrospective basis, 2018 Adjusted EBITDA andconsidered free substitutes cash flow orterms are alternatives under non-GAAP IFRS for and measures GAAP doto and compare not measures. us have should to These standard other not meanings, companies.these are be so See measures, “Non-GAAP including not may Measures” how not we for defined be calculate information them. a about reliable way Guidance ranges presentedyear as 2018 percentages results. reflect 2019guidance amounts percentage for will increases purposes be over ofIFRS calculated assessing full- our 16, in performance accordance against with accounting policies after adopting Includes additions to property, plantbut and does equipment not net include expenditures of for proceeds spectrum on licences. disposition, The table outlines guidance rangesmetrics provided for in selected our full-year January 2018on 25, 2018 consolidated October earnings 19, financial release 2018. and Guidance subsequentlyincreases ranges over updated presented 2017 as actual percentages results. reflectAdjusted percentage EBITDA andconsidered free substitutes cash flow orterms are alternatives under non-GAAP IFRS for and measures GAAP doto and compare not measures. us have should to These standard other not meanings, companies.these are be so See measures, “Non-GAAP including not may Measures” how not we for defined be calculate information them. a about reliable way 2017 reported figuresPolicies”. have been restated applying IFRS 15. See “Accounting Capital expenditures Free cash flow 4 5 3 2 1 Consolidated Guidance RevenueAdjusted EBITDA 15,096 Increase of 3% to 5% (In millions of dollars, except percentages) For the full-yearadjusted 2019, EBITDA we to expectcapital steady drive expenditures. growth higher Inflexibility in free revenue to 2019, cash and maintain wedebt, flow, and our expect to despite continue network to to higher return advantages, cash have to to shareholders. the further reduce financial 2019 FULL-YEAR CONSOLIDATED GUIDANCE 4 Adjusted EBITDA 2 3 n/m — not meaningful 1 Revenue 14,369 Increase of (In millions of dollars, except percentages) 2018 ACHIEVEMENTS AGAINST GUIDANCE The followingpreviously provided table and our actual outlinesselected results full-year and 2018 achievements financial for guidance metrics. the ranges that we had FINANCIAL AND OPERATING GUIDANCE We provide consolidated annual guidancethe Board. ranges for selected financial metrics on a basis consistent with the annual plans approved by Capital expenditures Free cash flow Consolidated Guidance MANAGEMENT’S DISCUSSION AND ANALYSIS

Capability to Deliver Results LEADING NETWORKS WIRELESS will increase our 5G-related trials across key applications and Rogers has one of the most extensive and advanced wireless multiple frequencies in 2019. A number of investments will be networks in Canada, which: required to successfully launch a 5G network, including: • was the first LTE high-speed network in Canada; • refarming spectrum currently used for 2G and 3G to LTE; • reached 96% of the Canadian population as at December 31, • densifying our wireless network with macro and small cells in key 2018 on our LTE network alone; markets; and • is supported by voice and data roaming agreements with • purchasing 5G-ready radio network equipment with lower unit international carriers in more than 200 destinations, including a and operational costs, the ability to aggregate more radio growing number of LTE roaming operators; and carriers, and greater spectral efficiency. • includes network sharing arrangements with three regional wireless operators that operate in urban and rural parts of Significant spectrum position Canada. Our wireless services are supported by our significant wireless spectrum holdings in both high-band and low-band frequency We are continuously enhancing our IP service infrastructure for all ranges. As part of our network strategy, we expect to continue our wireless services. Advances in technology have transformed the making significant capital investments in spectrum to: ways in which our customers interact and use the variety of tools • support the rapidly growing usage of wireless data services; available to them in their personal and professional lives. • support the launch of a 5G-capable network; and Technology has also changed the way businesses operate. • introduce new innovative network-enabled features and We are augmenting our existing LTE network with 4.5G technology functionality. investments that are designed to migrate to a 5G environment. We

Our spectrum holdings as at December 31, 2018 include: Type of spectrum Rogers licence Who it supports 700 MHz 24 MHz in Canada’s major geographic markets, covering 92% of 4G / 4.5G LTE subscribers. the Canadian population. 850 MHz 25 MHz across Canada. 2G GSM, 3.5G HSPA+, and 4G / 4.5G LTE subscribers. 1900 MHz 60 MHz in all areas of Canada except 40 MHz in northern 2G GSM, 3.5G HSPA+, and 4G / 4.5G Quebec, 50 MHz in southern Ontario, and 40 MHz in the Yukon, LTE subscribers. Northwest Territories, and Nunavut. AWS 1700/2100 MHz 40 MHz in British Columbia and Alberta, 30 MHz in southern 4G / 4.5G LTE subscribers. Ontario, an additional 10 MHz in the Greater Toronto Area, and 20 MHz in the rest of Canada. 2500 MHz 40 MHz FDD across Canada except 20 MHz in parts of Quebec 4G / 4.5G LTE subscribers. and an additional 25 MHz TDD in key population areas in Quebec, Ontario, and British Columbia.

We also have access to additional spectrum through the following network sharing agreements:

Type of spectrum Kind of venture Who it supports 2.3 GHz/3.5 GHz range Inukshuk Wireless Partnership is a joint operation with BCE Inc. in Fixed wireless subscribers. which Rogers holds a 50% interest. Inukshuk holds 30 MHz (of which 20 MHz is usable) of FDD 2.3 GHz spectrum primarily in eastern Canada, including certain population centres in southern and eastern Ontario, southern Quebec, and smaller holdings in New Brunswick, Manitoba, Alberta, and British Columbia. Inukshuk also holds 3.5 GHz TDD licences (between 50-175 MHz) in most of the major population centres across Canada. The current fixed wireless LTE national network utilizes the jointly held 2.3 GHz and 3.5 GHz spectrum bands. 850 MHz, 1900 MHz Three network-sharing arrangements to enhance coverage and AWS spectrum, network capabilities: 700 MHz • with Bell MTS, which covers 98% of the population across 3.5G / 4G HSPA+, 4G LTE Manitoba; subscribers. • with TBayTel, that covers the combined base of customers in 3.5G / 4G HSPA+, 4G LTE northwestern Ontario; and subscribers. • with Quebecor (Videotron) to provide LTE services across the 3.5G / 4G LTE subscribers. province of Quebec and Ottawa.

28 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 29 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT tenant facility in Toronto; node segmentation, alongevolution with DTV from spectrumdownstream repurposing DOCSIS and and upstream 1.0 capacity200 by to times, approximately 1,000networks DOCSIS respectively. and This and 3.1,deploy track demonstrating best-in-class has service record is the increased onethat of of our capability we key stay investing strategies to for competitiveInternet ensuring in service with into cost-effectively other homes our and service businessesthe providers over end copper that facilities. of By provide 2016,to 100% of DOCSIS our CCAP cable technologyGigabit network Internet. supporting had DOCSIS been 3.1 upgraded and Ignite We have beendevelopment deploying areas 1 and GHz transitioning towe fibre-to-the-curb FTTH began (FTTC) since upgrading in 2005. our Inand new HFC 2018, network to FTTH. agenerations mix of FTTC of DOCSIS, 1.2 GHzDOCSIS, including provides FTTC Remote which PHY thequality, and will and Full tier improve foundation speed Duplex attainability,our while high-speed for increasing HFC the Internet capacity network.network of subsequent accessibility, FTTH technology willdownstream/upstream that be speeds based up is to onneighbourhoods. expected 10 XGS Gbps to per passive node optical support inWe select symmetrical continue to investfor in example, and with improve our technologyIgnite cable to TV, network support Rogers services; 4K gigabitcommitment TV, Internet to our live speeds, 4K broadcasting in PVR 4K,Toronto set-top including Blue box, all Jays regular and season home aNBA games significant games. for 2019 and numerous NHLVoice-over-cable and telephony services arededicated currently DOCSIS network. provided Our over offeringsservice ensure a a by high including qualitybackup of geographic powering. Our redundancy phone service as includessuch a well as rich set as TV of features, Call network three-way Display (available calling, oncustomers and our to NextBox be advanced set-top notified boxes), of,their voicemail and wireless phone listen features or to, over their the that Internet. home voicemail allow We on own and operatedata centres some in of Canada. the Wewireless most leverage our advanced national networks networks fibre,businesses and cable, and and to deliver dataproactive greater centre network valueenterprise-level to infrastructure reliability, monitoring their security, to and customersand and performance. through secondary Our enable problem primary NetworkRogers’ Operation networks resolution to Centres mitigateallow with proactively for the rapid responses monitor risk to of any outages. service interruptionsOur and data centrescollocation, provide cloud, and guaranteed managedoperate uptime services 16 solutions. and state-of-the-art, We expertiseacross own highly Canada, and including: in reliable, certified• data Canada’s centres first Tier III Design• and Alberta’s first Construction Tier III• certified certified data multi- a centre; third and Tier III certified data centre in Ottawa. improving networkdeploying performance, digital quality,amplifiers, and fibre and reducing homes passed reliabilityof optics, per 60; node by to removing an average radiospectrum frequency withupstream channels additional and fullexpected duplex DOCSIS to DOCSIS support that, downstream over 3.1 speedssecond time, (Gbps); up are to downstream 10 gigabits per and advanced video protocols; digital video; and multiple dwelling unit buildings directly to fibre. Broadband Internet service3.0/3.1 is provided platform,channels using which a onto DOCSIS combinesdelivering one CCAP exceptional multiple performance. access Over radio the point last frequency 20 at years, the HFC customer premise, CABLE Our expansive fibre andservices hybrid to fibre-coaxial consumers infrastructure and delivers and businesses in on Ontario, Newtranscontinental, Brunswick, the facilities-based fibre-optic islandkilometres network of of fibre withcustomers, optic 72,000 Newfoundland. including cable government that Weservice and is other providers. used also telecommunications to Webackhaul operate for service also wireless enterprise cell site use a traffic.coast-to-coast In our Canada, and the extensive includes network extends localelectronics fibre and and network systems, regional hubs, for fibre,and points transmission switching of infrastructure. presence, The andfrom network IP Vancouver routing also south extendsborder to to Seattle; the through US fromToronto Minneapolis, the through Manitoba-Minnesota Milwaukee, Buffalo;New and and York from City Montreal Chicago;largest through and from markets, Albany Ashburn, to exchange while allowing of data us and also voice traffic. to reaching connect keyThe Canada’s network US is structured marketsand to to for optimize allow performance the Internet for and over reliability the a single simultaneousthat platform. interconnect delivery It with of is distributionminimize generally video, hubs, constructed disruptions voice, providing in redundancy and rings thatevents. to can result from fibreHomes and cuts commercial and buildingsthrough other hybrid are fibre-coaxial connected (HFC) to nodesHFCnodetothenetworkusingfibreopticcableandthehometo or our FTTH. network We connectthe the node using coaxial cable orof fibre. cable Using spectrum 860 in MHz Ontario anddeliver 750 and MHz Atlantic video, Canada, respectively, voice, we Hybrid and fibre-coaxial broadband node serviceshomes segmentation passed to reduces per our the HFCand customers. capacity number node, per thereby subscriber. of increasing the bandwidth We continually upgrade the networkperformance to and improve reliability, capacity, reduce enhance operatingnew features costs, and and functionality. introduce Our investments• are focused uplifting on: our HFC network to 1.2 GHz while at the same time • increasing capacity per subscriber by enabling the 1.2 GHz of • improving video signal• compression improving channel by and on-demand moving capacity• through to switched increasing more the FTTH footprint by connecting more homes and MANAGEMENT’S DISCUSSION AND ANALYSIS

POWERFUL BRANDS FIRST-CLASS MEDIA CONTENT The Rogers brand has strong national recognition through our: We deliver highly sought-after sports content enhanced by the • established networks; following initiatives: • extensive distribution; • an exclusive 12-year agreement with the NHL, which runs • recognizable media content and programming; through the 2025-2026 season, that allows us to deliver • advertising; unprecedented coverage of professional hockey in Canada • event sponsorships, including the Rogers Cup; across television, smartphones, tablets, and the Internet; • community investment, including the Ted Rogers Scholarship • Rogers NHL LIVE, an online OTT destination for enhancing NHL Fund; and action on any screen; • naming rights to some of Canada’s landmark buildings. • Sportsnet NOW, Canada’s first OTT sports service, offering 24/7 access to Sportsnet’s TV content; We also own or utilize some of Canada’s most recognized brands, • Sportsnet NOW+, which offers access to additional content, including: such as additional NHL games, the Bundesliga, Premiership • the wireless brands of Rogers, Fido, and chatr; Rugby, and the Scottish Premiership; • 24 TV stations and specialty channels, including Sportsnet, FX • GamePlus, an innovative and interactive experience within (Canada) and FXX (Canada), OMNI, and City; Rogers NHL LIVE that includes enhanced camera angles, • publications, including Maclean’s, Chatelaine, Today’s Parent, exclusive interviews and analysis, and original video-on-demand Flare, and Hello! Canada; content; • 55 radio stations, including 98.1 CHFI, 680 NEWS, Sportsnet The • Rogers Hometown Hockey Tour, which brings hockey-themed FAN, KiSS, JACK FM, and SONiC; festivities and outdoor viewing parties to 25 communities across • major league sports teams, including the Toronto Blue Jays, and Canada over the 2018-2019 NHL season; teams owned by MLSE, such as the Toronto Maple Leafs, the • the MLB Network, a 24-hour network dedicated to baseball, Toronto Raptors, Toronto FC, and the Toronto Argonauts; brought to Canada on Rogers television services; • an exclusive 12-year agreement with the NHL, which runs • an 8-year, multi-platform broadcast rights agreement with MLB through the 2025-2026 season, that allows us to deliver Properties and MLB Advanced Media to show live and unprecedented coverage of professional hockey in Canada; and in-progress games and highlights within Canada through 2021; • TSC, a premium online and TV shopping retailer. • a 10-year, multi-platform agreement that runs through to August 2024, which makes Rogers the exclusive wholesaler and a WIDESPREAD PRODUCT DISTRIBUTION distributor of World Wrestling Entertainment’s (WWE) flagship programming in Canada; and WIRELESS • exclusive broadcasting and distribution rights of the Toronto We distribute our wireless products nationally using various Blue Jays through our ownership of the team. channels, including: • company-owned Rogers, Fido, and chatr retail stores; • customer self-serve using rogers.com, fido.ca, chatrwireless.com, CUSTOMER EXPERIENCE and e-commerce sites; We are committed to providing our customers with the best • an extensive independent dealer network; experience possible. To do this, we have invested in several areas to • major retail chains and convenience stores; make it easier and more convenient for customers to interact with • other distribution channels, such as WOW! mobile boutique, as us, such as: well as Wireless Wave and TBooth Wireless through our • contact centres located throughout Canada; ownership interest in Glentel; • an innovative Integrated Voice Response (IVR) system that can • our call centres; and take calls in four languages, including English, French, Mandarin, • outbound telemarketing. and Cantonese; • voice authentication technology across all of our call centres that CABLE automatically identifies our customers by their voice, increasing We distribute our residential cable products using various channels, security and protecting customers from potential fraud; including: • self-serve options, including: • company-owned Rogers and Fido retail stores; • the ability for Fido and Rogers customers to complete price • customer self-serve using rogers.com and fido.ca; plan changes and hardware upgrades online; • our call centres, outbound telemarketing, and door-to-door • simplified login, allowing Fido customers to log in to their agents; and accounts online or through the Fido MyAccount app using • major retail chains. their Facebook login credentials, eliminating the need to Our sales team and third-party retailers sell services to the remember multiple login credentials and making self-service enterprise, public sector, and carrier wholesale markets. An easier to access; extensive network of third-party channel distributors deals with IT integrators, consultants, local service providers, and other indirect sales relationships. This diverse approach gives greater breadth of coverage and allows for strong sales growth for next generation services.

30 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 31 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT HEALTHY TRADING VOLUMES AND DIVIDENDS Our RCI Class BShares) Non-Voting common actively shares (Class tradeaverage B daily on Non-Voting trading volume the of2018. approximately TSX In 1.3 addition, million and our shares RCI in NYSEShares) Class trade with A on Voting the a common TSX.equal At shares combined dividend the (Class on discretion A both of classes thean of Board, annualized shares. we dividend In pay of 2018, an $1.92.4.2% each In share January paid 2019, increase we announcedannualized to a dividend to $2.00 our per share. annualized dividend rate, bringing our $1,051 million ofcompanies marketable as at equity December 31, securities 2018. in publiclyThe following traded information is forward-lookingconjunction and should with be “About read in Forward-Lookingand Information”, Operating “Financial Guidance”, “RisksBusiness”, and Uncertainties and Affecting Our ourcompetitive, and other regulatory disclosurescould assumptions, cause about factors, our variousdiffer and actual from those economic, risks future currently expected. financial that andSimilar operating to 2018, results we to anticipate2019. generating We positive expect free cash thatsatisfy flow we in our will havefunding cash sufficient funding of capital resourcesmaturing requirements dividends to long-term in on debt, andactivities, 2019, our other and including financing common activities, otheropening the shares, investing cash requirements. balance, repayment This cashamount of takes provided available by into under operatingaccounts our account activities, receivable $3.2 the our securitization billionand program, funds bank our available credit US to usissued, CP facility, from program, our the or issuance ofDecember private other 31, bank, placement publicly 2018, thereflow debt of were funds no between from RCI significant and time its restrictions subsidiary on companies. We to the time. believerequirements As we at bydepending can on issuing market satisfy conditions,existing could bank additional foreseeable include credit and restructuring letter debtbank our additional of credit credit facilities, facilities, financing, funding entering issuingterm into public new which, debt, or privatesecuritization amending long-term or or US the short- CPopportunistically programs, refinance terms a or portion issuing of of existing equity.market debt We depending our on conditions may also accountshowever, and that receivable these other financing initiativesbecome will necessary. factors. or can There be done as is they no assurance, on their phone when aor service technician call; will arrive for an installation products attechnician their visiting their residence; and convenience, without the need for a both ofcustomize which their data usage in allow real-time through MyRogers; Wireless customershour of data, to five times per manage billing cycle, at no and extra charge; Internet customers free access to newas perks every deals Thursday, and such apparel, giveaways entertainment, and from more; leading brands on food,understand their drinks, monthly charges; and allowing Canadians tohome use when traveling their to included wireless destinations. plan like they do at online chat through our websites; • Rogers EnRoute, a tool that gives customers the ability to track • the ability for customers to install their Internet and TV and development, performance-drivenprograms, employee and recognition employees; career progression programs for front-line employees the tools and training to be successful. through initiatives including engagement surveysdevelopment and programs; leadership • Family Data Manager, a data manager tool, and Data Top• Ups, Fido Data Bytes, which grant Fido Pulse• customers an Fido additional XTRA, a program that gives Fido postpaid Wireless and • a simple online bill, making it• easier for Roam customers Like to Home read and and Fido Roam, worry-free wireless roaming • customer care available over Facebook Messenger, Twitter, and FINANCIAL STRENGTH AND FLEXIBILITY We have anleverage, investment-grade and balance substantial available sheet,December liquidity 31, conservative of 2018. Our $2,391 debt capital millionprovided resources consist as by primarily at of operating cash available activities, under available ourdollar-denominated lines commercial accounts of paper credit, receivableissuances (US funds securitization of CP) and programs, long-term US and debt. We also own approximately • aiming to attract and retain top talent through effective training • maintaining our commitment to• diversity and providing inclusion; a and safe, collaborative, and agile workplace that provides For our teamcreate of a great approximately workplace, 26,100experience, focusing which on employees, include: all we aspects of• strive the engaging employee to employees and building high-performing teams ENGAGED PEOPLE MANAGEMENT’S DISCUSSION AND ANALYSIS

2018 Financial Results See “Accounting Policies” in this MD&A and the notes to our 2018 competitors. Many of these are not defined terms under IFRS and Audited Consolidated Financial Statements for important should not be considered alternative measures to net income or accounting policies and estimates as they relate to the following any other financial measure of performance under IFRS. See “Key discussion. Performance Indicators” and “Non-GAAP Measures” for more information. We use several key performance indicators to measure our performance against our strategy and the results of our peers and

SUMMARY OF CONSOLIDATED RESULTS Years ended December 31 2017 (In millions of dollars, except margins and per share amounts) 2018 (restated) 1 %Chg Revenue Wireless 9,200 8,569 7 Cable 2 3,932 3,894 1 Media 2,168 2,153 1 Corporate items and intercompany eliminations 2 (204) (247) (17) Revenue 15,096 14,369 5 Total service revenue 3 12,974 12,550 3 Adjusted EBITDA 4 Wireless 4,090 3,726 10 Cable 2 1,874 1,819 3 Media 196 127 54 Corporate items and intercompany eliminations 2 (177) (170) 4 Adjusted EBITDA 4 5,983 5,502 9 Adjusted EBITDA margin 4 39.6% 38.3% 1.3 pts

Net income 2,059 1,845 12 Basic earnings per share $4.00 $3.58 12 Diluted earnings per share $3.99 $3.57 12

Adjusted net income 4 2,241 1,902 18 Adjusted basic earnings per share 4 $4.35 $3.69 18 Adjusted diluted earnings per share 4 $4.34 $3.68 18

Capital expenditures 2,790 2,436 15 Cash provided by operating activities 4,288 3,938 9 Free cash flow 4 1,771 1,685 5

1 2017 reported figures have been restated applying IFRS 15. See “Accounting Policies”. 2 These figures have been retrospectively amended as a result of our reportable segment realignment. See “Understanding Our Business”. 3 As defined. See “Key Performance Indicators”. 4 Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information about these measures, including how we calculate them.

32 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 33 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT ADJUSTED EBITDA Wireless adjusted EBITDA increased thisthe year primarily strong as a flow-through resultabove, of of service partially revenueincreased offset growth subscriber as by volumes and described margin higher costs of of 44.5%, expenditures devices, up 100 which basis associated led points from to last with Cable a year. adjusted EBITDAInternet increased revenue this growth, year themargin ongoing as Internet product a services, mix and shift result variousa to margin of cost higher- of efficiencies, strong 47.7%, which up 100 led basis to points fromMedia last adjusted year. EBITDA increasedincreased this year revenue primarily asexpenses a as from improvements result made of to discussed ourdivisions, cost which structure above across led the to and alast year. margin lower of 9.0%, up operating 310 basis points from NET INCOME AND ADJUSTED NET INCOME Net income andprimarily adjusted as net a result incomehigher depreciation of both and higher amortization. increased adjusted this EBITDA, partially year offset by REVENUE Wireless service revenuebalanced approach increased to continue this monetizing thefor year increasing data demand along as with a amanagement. disciplined approach result Wireless around of subscriber equipmentdriven base revenue by our an grew increase in 17%hardware sales upgrades. of this higher value year devices and increased Cable revenue increasedInternet this revenue, year due as tohigher a speed the and result general usage tiers, of movementchanges, the the impact of and of customers increase Internet a service to in largerpartially pricing offset subscriber by base promotional for pricingTelevision subscriber provided our losses to over Internet subscribers the past products, and year. Media revenue increased marginally as athe result of Toronto higher Blue revenue at Jays,League Baseball, primarily and higher due network to subscriptionoffset revenue, by a partially lower distribution overall advertising from revenue. Major KEY CHANGES IN FINANCIAL RESULTS THIS YEAR COMPARED TO 2017 MANAGEMENT’S DISCUSSION AND ANALYSIS

WIRELESS Service revenue Service revenue includes revenue derived from voice and data services from: ROGERS IS CANADA’S LARGEST PROVIDER OF • postpaid and prepaid monthly fees; WIRELESS COMMUNICATIONS SERVICES •datausage; •airtime; As at December 31, 2018, we had: •longdistancecharges; • approximately 10.8 million subscribers; and • essential services charges; • approximately 33% subscriber and revenue share of the • inbound and outbound roaming charges; and Canadian wireless market. • certain fees.

WIRELESS FINANCIAL RESULTS The 5% increase in service revenue this year was a result of: • a 3% increase in blended ARPU, primarily due to the increased Years ended December 31 mix of subscribers on higher-rate plans from our various brands; 2017 and (In millions of dollars, except margins) 2018 (restated)1 %Chg • a larger postpaid subscriber base. Revenue The 4% increase in blended ABPU was a result of the increased Service revenue 7,091 6,765 5 service revenue as described above. Equipment revenue 2,109 1,804 17 We believe the increases in gross and net additions to our postpaid Revenue 9,200 8,569 7 subscriber base and the lower postpaid churn this year were a Operating expenses result of our strategic focus on enhancing the customer experience Cost of equipment 2,264 2,002 13 by improving our customer service and continually increasing the 2 Other operating expenses 2,846 2,841 — quality of our network. Operating expenses 5,110 4,843 6

Adjusted EBITDA 4,090 3,726 10 Equipment revenue Equipment revenue includes revenue from sales to subscribers Adjusted EBITDA margin 44.5% 43.5% 1.0 pts through fulfillment by Wireless’ customer service groups, websites, Capital expenditures 1,086 806 35 telesales, corporate stores, and independent dealers, agents, and 1 2017 reported figures have been restated applying IFRS 15. See “Accounting retailers. Policies”. 2 Other operating expenses for 2017 have been retrospectively amended to include The 17% increase in equipment revenue this year was a result of: stock-based compensation. See “Understanding Our Business”. • an increase in sales of higher-value devices; and • an increase in device upgrades by existing subscribers. WIRELESS SUBSCRIBER RESULTS 1 OPERATING EXPENSES Years ended December 31 (In thousands, except churn, blended ABPU, We assess operating expenses in two categories: and blended ARPU) 2018 2017 Chg • the cost of wireless devices and equipment; and Postpaid • all other expenses involved in day-to-day operations, to service Gross additions 1,632 1,599 33 existing subscriber relationships, and to attract new subscribers. Net additions 453 354 99 Total postpaid subscribers 2 9,157 8,704 453 The 13% increase in the cost of equipment this year was a result of: Churn (monthly) 1.10% 1.20% (0.10 pts) • a continued shift in the product mix of device sales towards Prepaid higher-cost smartphones; and Gross additions 751 782 (31) • the increase in device upgrades by existing subscribers. Net (losses) additions (152) 61 (213) Total prepaid subscribers 2 1,626 1,778 (152) The marginal increase in other operating expenses this year was Churn (monthly) 4.38% 3.48% 0.90 pts due to higher expenditures associated with increased subscriber Blended ABPU (monthly) $ 64.74 $ 62.31 $ 2.43 volumesandcostsofdevices. Blended ARPU (monthly) 3 $ 55.64 $ 54.23 $ 1.41

1 Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key ADJUSTED EBITDA performance indicators. Effective January 1, 2018, in conjunction with our transition to The 10% increase in adjusted EBITDA this year was a result of the IFRS 15, we commenced reporting blended ABPU as a new key performance strong flow-through of service revenue growth, partially offset by indicator. See “Key Performance Indicators”. higher operating expenses, as discussed above. 2 As at end of period. 3 Blended ARPU has been restated for 2017 using revenue recognition policies in accordance with IFRS 15.

REVENUE Our revenue depends on the size of our subscriber base, the revenue per user, the revenue from the sale of wireless devices, and other equipment revenue.

34 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 35 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT pay-per-view service fees andand video-on-demand service fees; residential, smallwholesale Internet business, access subscribers; enterprise, publicproducts; and sector, and • basic service fees; • tier service fees; • access fees for use• of channel premium capacity by and third parties; and specialty service subscription fees, including tiers; tiers of our Internet offerings,base with 60% on of our plans residential54%); of Internet 100 megabits per second or higher (2017— partially offset by product; and promotional pricing provided to subscribers. REVENUE Internet revenue includes: • monthly subscription and additional use service revenue from • monthly service revenue• from modem our rental fees. smartTelevision home revenue includes: monitoring • IPTV and digital cable services, such as: • rentals of television set-top boxes. Phone revenuebusiness includes local telephony service from: revenue• from monthly service fees; residential• calling and features, such as• small voicemail, call long waiting, distance and calling. caller ID; and The 1% increase in revenue this• year was the a result movement of: of Internet customers to higher speed• and usage the impact of service• pricing changes; a and larger Internet subscriber• base; partially promotional offset pricing by provided to• subscribers; alowersubscriberbaseforourTelevisionproducts. and Internet revenue The 7% increase in Internet revenue• this year general was a result movement of: of customers to higher speed and usage • the impact of Internet• service pricing a changes; larger and Internet subscriber• base; partially promotional offset pricing by provided to subscribers. Television revenue The 4% decrease in Television revenue• this year the was a decline result of: in legacy Television subscribers• over new the past Ignite year; TV subscribers• this the year impact with of the launch Television of servicePhone this revenue pricingThe changes, 12% net decreasepromotional pricing in of provided to Phone subscribers. revenue this yearEquipment revenue was aEquipment result revenue of includes revenuecable generated from set-top themonitoring sale equipment. of boxes, Equipmentwith revenue 2017. Internet this year modems, was in and line smart home %Chg 1 29 33 95 14 14 (6) (80) 25 15 (13) 20 5 411 (12) 2017 Chg 2,321 109 1,740 (55) 1,1084,307 8 54 5,169 62 2017 2,055 (1) 1,967 7 2,075 (1) 1,819 3 1,501 (4) 1,334 7 3,879 1 3,894 1 46.7% 1.0 pts 8 (restated) 62 (55) 109 2018 2,430 1,685 1,116 4,361 5,231 13 21 Years ended December 31 Years ended December 31 363 2018 2,037 2,114 2,058 1,874 1,442 1,429 3,919 3,932 47.7% 1 3 2 3 3 3 4 3 2 Total service units Net additions Net additions Total Internet subscribers Internet Net losses Net additions Total Phone subscribers Total Television subscribers Television Phone Service revenue Equipment revenue Cost of equipment Other operating expenses approximately 27% of Canadian cable television subscribers; Ontario, New Brunswick, and on the island of Newfoundland. Subscriber counts are key performance indicators.Effective See “Key January Performance 1, Indicators”. 2018, andinclude on Smart a Home retrospective Monitoring subscribers. basis, ourAs Internet at subscriber end of results period. Includes Internet, Television, and Phone. Effective January 1, 2018,segments and and on related a financial results. retrospective See basis,Other “Understanding Our we operating Business”. realigned expenses our for reportable stock-based 2017 compensation. have See “Understanding been Our Business”. retrospectively amended to include (In thousands) (In millions of dollars, except margins) Internet 1 2 3 4 CABLE SUBSCRIBER RESULTS 1 2 CABLE FINANCIAL RESULTS As at December 31, 2018, we• had: approximately 2.4 million high-speed• Internet subscribers; approximately 1.7 million Television subscribers – • approximately 1.1 million Phone• subscribers; and a network passing approximately 4.4 million homes in CABLE ONE OF CANADA’S LEADING PROVIDERS OFSPEED HIGH- INTERNET, CABLE TELEVISION, AND PHONE SERVICES Revenue Television Phone Homes passed Total service units Operating expenses Adjusted EBITDA Adjusted EBITDA margin Capital expenditures Revenue Operating expenses MANAGEMENT’S DISCUSSION AND ANALYSIS

OPERATING EXPENSES The 1% decrease in operating expenses this year was a result of We assess Cable operating expenses in three categories: various cost efficiency and productivity initiatives. • the cost of programming; • the cost of equipment revenue (cable set-top boxes, Internet ADJUSTED EBITDA modem equipment, and smart home monitoring equipment); The 3% increase in adjusted EBITDA this year was a result of the and revenue and expense changes described above. • all other expenses involved in day-to-day operations, to service and retain existing subscriber relationships, and to attract new subscribers.

36 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 37 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT properties, and publishing; and concession sales; distribution from Major League Baseball; and partially offset by and production; ADJUSTED EBITDA The 54% increase inrevenue adjusted and EBITDA expense changes this described year above. was a result of the REVENUE Media revenue is earned from: • advertising sales across• its subscriptions to televised television, and• OTT products; radio, ticket sales, fund digital redistribution and other media distributions from• MLB, retail product sales; and • circulation of published products. The marginal increase in revenue this• year was higher a result revenue of: at the Toronto Blue Jays, primarily• as a higher result of Sportsnet a and• other lower advertising network revenue. subscription revenue; OPERATING EXPENSES We assess Media operating expenses by: • the cost of broadcast content,• including Toronto Blue sports Jays player• programming payroll; the cost of retail• products sold; all and other expenses involved in day-to-day operations. The 3% decrease invarious operating expenses cost thisdivisions. year efficiencies was and a result productivity of initiatives across all 83 8 127 54 5.9% 3.1 pts 2017 % Chg 2,026 (3) 2,153 1 90 196 9.0% 2018 1,972 2,168 Years ended December 31 1 Toronto Blue Jays; properties; Operating expenses for 2017based have compensation. been See “Understanding retrospectively Our amended Business”. to include stock- (In millions of dollars, except margins) Revenue 1 MEDIA FINANCIAL RESULTS We have a broad portfolio ofsignificantly media includes: properties, which most • sports media and entertainment, such as Sportsnet and the • our exclusive national 12-year• NHL Agreement; category-leading television and radio broadcasting • multi-platform televised and online• shopping; digital media; and •publishing. MEDIA DIVERSIFIED CANADIAN MEDIA COMPANY Adjusted EBITDA Adjusted EBITDA margin Capital expenditures Operating expenses MANAGEMENT’S DISCUSSION AND ANALYSIS

CAPITAL EXPENDITURES WIRELESS The increase in capital expenditures in Wireless this year was a result of investments made to upgrade our wireless network to Capital expenditures include costs associated with acquiring continue delivering reliable performance for our customers. We property, plant and equipment and placing it into service. The have continued augmenting our existing LTE network with 4.5G telecommunications business requires extensive and continual technology investments that are also 5G-ready. investments, including investment in new technologies and the expansion of capacity and geographical reach. The expenditures In 2017, we acquired a spectrum licence for $184 million, which is related to the acquisition of spectrum licences are not included in not included in the table above. See “Managing Our Liquidity and capital expenditures and do not factor into the calculation of free Financial Resources”. cash flow or capital intensity. See “Managing Our Liquidity and Financial Resources”, “Key Performance Indicators”, and CABLE “Non-GAAP Measures” for more information. The increase in capital expenditures in Cable this year was a result Capital expenditures are significant and have a material impact on of higher investments in network infrastructure, partially related to our cash flows; therefore, our management teams focus on the launch of our Ignite TV service, which uses Comcast’s X1 planning, funding, and managing them. IP-based video platform, and higher customer premise equipment additions in 2018. We continued upgrading our hybrid fibre- Capital expenditures before related changes to non-cash working coaxial infrastructure with additional fibre deployments and further capital represent capital assets to which we took title. We believe DOCSIS technology enhancements. These deployments and this measure best reflects our cost of property, plant and enhancements will lower the number of homes passed per node equipment in a given period and is a simpler measure for and incorporate the latest technologies to help deliver more comparing between periods. bandwidth and an even more reliable customer experience. Years ended December 31 MEDIA 2017 The increase in capital expenditures this year was a result of higher (In millions of dollars, except capital intensity) 2018 (restated) 1 %Chg investments in the Rogers Centre, partially offset by lower Capital expenditures 2 investments in our broadcast infrastructure. Wireless 1,086 806 35 Cable 1,429 1,334 7 CORPORATE Media 90 83 8 The decrease in Corporate capital expenditures this year was a Corporate 210 287 (27) result of higher investments in information technology in 2017. Capital expenditures before proceeds on disposition 2,815 2,510 12 PROCEEDS ON DISPOSITION Proceeds on disposition (25) (74) (66) We sold certain assets for total proceeds of $25 million in 2018 Capital expenditures 2 2,790 2,436 15 (2017 — $74 million).

Capital intensity 3 18.5% 17.0% 1.5 pts CAPITAL INTENSITY 1 Effective January 1, 2018, and on a retrospective basis, we realigned our reportable Capital intensity increased this year as a result of the higher capital segments and related financial results. As a result, certain figures have been expenditures as discussed above, offset by the increase in revenue. amended for comparative purposes. See “Understanding Our Business”. 2 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences. 3 As defined. See “Key Performance Indicators”.

38 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 39 | –n/m 12 17 20 5 99 n/m (18) 11 740 (4) 746 6 (107) n/m 2017 % Chg 28 14 21 (95) (20) 709 793 136 ROGERS COMMUNICATIONS INC. 2018 Years ended December 31 1 2018 ANNUAL REPORT debt benefits liability instruments Interest on borrowings includes interestdebt. on short-term borrowings and on long-term Loss on repayment of long-term Interest on post-employment OTHER INCOME In 2017, we recognizedpertaining to a shomi of recovery $20 on million. the reversal of a provision FINANCE COSTS 1 Interest on borrowings Interest on borrowings decreasedproportion this of year borrowings under as our acompared lower result to interest 2017 of US and CP a the program senior higher early redemption notes of our inFinancial US$1.4 billion April Resources” 2018. forrelated finance See more costs. information “Managing about Our our Liquidity debt and Loss and on repayment of long-term debt We recognized a $28 millionthis loss on repayment year of long-termassociated debt with reflecting our redemption of theApril US$1.4 2018 billion that of were payment senior otherwise notes due in in August of 2018. redemptionForeign exchange and premiums change in fairDuring value of 2018, derivative all instruments ofdebentures our US were dollar-denominatedexchange senior hedged losses recognized notes in and forUS 2018 were accounting CP primarily relatedderivatives purposes. program to our were borrowings, Foreign purposes due for not to the which designatedexchange short-term gains nature recognized the of in as the 2017program associated were borrowings. also hedges Foreign related borrowings debt to our and forborrowings. US CP US Foreign accounting dollar-denominated exchangesubstantially offset credit gains by facility a andvalue of corresponding derivative losses instruments”. amount in are “change generally inDuring fair the year, weto determined that exercise we would certainoriginally no ten-year longer designated be bond time able frame. forwardhedge Consequently, derivatives we accounting within discontinued reclassified the on a $21 thoseshareholders’ million equity bond to loss financevalue from costs forward of the (recorded derivative in hedging derivativesbond instruments”). “change reserve forwards We in and to within subsequently fair Mayfurther, extended and 31, redesignated the them 2019, as effective with hedges. theSee ability “Managing to extend Our them Liquidityinformation about and our debt Financial and related Resources” finance costs. for more (In millions of dollars) Interest on borrowings Total finance costs Loss (gain) on foreign exchange Change in fair value of derivative Capitalized interest Other %Chg 1 (19) 68 (49) (67) 55 (33) 685 11 746 6 152 38 2017 1,845 12 5,502 9 2,142 3 2017 % Chg 2,142 3 2,087 4 (restated) 37 2018 2,211 2,174 (32) (16) Years ended December 31 Years ended December 31 758 793 210 2018 r information about this measure, 2,059 5,983 2,211 2 property, plant and equipment other Other income Income tax expense Finance costs Depreciation and amortization Gain on disposition of Restructuring, acquisition and 2017 reported figuresPolicies”. have beenAdjusted restated EBITDA is a applying non-GAAPor measure IFRS and alternative should 15. for not GAAP be See measures. consideredhave a It a “Accounting substitute is standard not a meaning,companies. defined so term See may under IFRS notincluding “Non-GAAP and how be we does calculate a not Measures” it. reliable way fo to compare us to other Net income Total depreciation and amortization Total depreciation and amortization increaseda this result year of primarily as higherfor capital more expenditures. information. See “Capital Expenditures” Depreciation Amortization RESTRUCTURING, ACQUISITION AND OTHER This year, werestructuring, acquisition incurred and $210 other2018 expenses. primarily million These consisted (2017 expensestargeted of in restructuring – severance of $152 costsrelated our associated million) employee contract with base in primarily the and termination consisted certain of severance sports- costs. costsrestructuring associated of with These our the targeted employeeaction expenses lawsuits. base and in costs pertaining 2017 to class DEPRECIATION AND AMORTIZATION ADJUSTED EBITDA See “Key Changes2017” for in a discussion Financial of the Results increase in This adjusted EBITDA this Year year. Compared to 1 2 REVIEW OF CONSOLIDATED PERFORMANCE This section discusses our netnotformpartofthesegmentdiscussionsabove. income and other expenses that do Deduct (add): Adjusted EBITDA (In millions of dollars) (In millions of dollars) MANAGEMENT’S DISCUSSION AND ANALYSIS

INCOME TAX EXPENSE ADJUSTED NET INCOME Below is a summary of the difference between income tax expense Adjusted net income was 18% higher compared to 2017, primarily computed by applying the statutory income tax rate to income as a result of higher adjusted EBITDA and higher other income, before income tax expense and the actual income tax expense for partially offset by higher depreciation and amortization and higher the year. income tax expense.

Years ended December 31 Years ended December 31 2017 (In millions of dollars, except per 2017 (In millions of dollars, except tax rates) 2018 (restated) 1 share amounts) 2018 (restated) 1 %Chg Statutory income tax rate 26.7% 26.7% Adjusted EBITDA 2 5,983 5,502 9 Income before income tax expense 2,817 2,530 Deduct (add): Depreciation and amortization 2,211 2,142 3 Computed income tax expense 752 676 Finance costs 3 744 746 – Increase (decrease) in income tax Other (income) expense 4 (32) 1n/m expense resulting from: Income tax expense 5 819 711 15 Non-deductible stock-based compensation 5 9 Adjusted net income 2 2,241 1,902 18 Non-deductible portion of equity Adjusted basic earnings per share 2 $4.35 $3.69 18 losses 1 – Adjusted diluted earnings per Non-deductible loss on FVTOCI share 2 $4.34 $3.68 18 investments – 7 Income tax adjustment, legislative 1 2017 reported figures have been restated applying IFRS 15. See “Accounting tax change – 2 Policies”. 2 Adjusted EBITDA, adjusted net income, and adjusted basic and diluted earnings per Non-taxable portion of capital share are non-GAAP measures and should not be considered as substitutes or gains (9) (10) alternatives for GAAP measures. These are not defined terms under IFRS, and do not Other items 9 1 have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information about these measures, Total income tax expense 758 685 including how we calculate them. 3 Finance costs excludes a $21 million loss on discontinuation of hedge accounting on Effectiveincometaxrate 26.9% 27.1% certain bond forwards for the year ended December 31, 2018 (2017 – nil) and a Cash income taxes paid 370 475 $28 million loss on repayment of long-term debt for the year ended December 31, 2018 (2017 – nil). 1 2017 reported figures have been restated applying IFRS 15. See “Accounting 4 Other expense for 2017 excludes a $20 million recovery on the reversal of a provision Policies”. pertaining to the wind-down of shomi. 5 Our effective income tax rate this year was 26.9% compared to Income tax expense excludes a $61 million recovery (2017 – $28 million recovery) for the year ended December 31, 2018 related to the income tax impact for adjusted 27.1% for 2017. The effective income tax rate for 2018 was higher items. Income tax expense for 2017 also excludes a $2 million expense for the than the statutory tax rate primarily as a result of non-deductible revaluation of deferred tax balances as a result of legislative income tax rate changes. stock-based compensation. Cash income taxes paid decreased this year primarily as a result of EMPLOYEES the timing of installment payments. Employee salaries and benefits represent a material portion of our expenses. As at December 31, 2018, we had approximately 26,100 employees (2017 – 24,500) across all of our operating groups, NET INCOME including shared services and the corporate office. Total salaries Net income was 12% higher than last year. See “Key Changes in and benefits for full-time and part-time employees in 2018 were Financial Results This Year Compared to 2017” for more $2,089 million (2017 – $2,111 million). information.

Years ended December 31 (In millions of dollars, except per 2017 share amounts) 2018 (restated) 1 %Chg Net income 2,059 1,845 12 Basic earnings per share $4.00 $3.58 12 Diluted earnings per share $3.99 $3.57 12

1 2017 reported figures have been restated applying IFRS 15. See “Accounting Policies”.

40 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 41 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Revenue Consolidated revenue increased by 3%growth in 2017, of reflecting 5% revenue Media. in Wireless Wireless, revenue andadoption increased marginal as increases of in aincreased Cable result Rogers by and 1% of as Share thesubscriber the continued base increase Everything in and Internetand subscriber plans. revenue usage movement from tiers Cable a to was larger subscribers higher-end revenue partially and speed offset the byrevenue impact the increased decrease of marginally inrevenue as Phone driven Television a by pricing the result strength packages. ofand of Sportsnet, higher Media increased higher conventional sales broadcast sports-related at TV TSC, offset advertising by revenue, lower partially publishing-related revenueto due digital to media the announced strategic in shift 2016. Adjusted EBITDA Consolidated adjusted EBITDA increased in 2017reflecting to $5,318 increases million, indecrease Wireless in Media. and Wirelessresult Cable, adjusted of partially EBITDA offset increased thepartially 9% by offset continued as a by a adoptionvolumes higher and of costs service of devices. higher-rate costs3% Cable associated adjusted service in EBITDA with increased 2017 plans, by increased various as cost a efficiency and resultEBITDA productivity decreased of initiatives. primarily strong Media asJays Internet adjusted payroll a (including revenue result the impact growth ofTSC of merchandise a and foreign costs partially exchange) higher offset and Torontodescribed by higher above. the Blue increase in revenue as Net income and adjusted net income Net income increased to $1,711in million 2016 in primarily 2017 as from awe $835 result recognized million of the in impairment 2016 anddeveloping as related charges our a result legacyrelationship of IPTV our with decision product Comcast toplatform and discontinue and as develop deploy Ignitecosts, a their TV, and prior long-term lower year X1 equity restructuring, losses IP-basedshomi. associated acquisition with video the and wind-down of other Adjusted net income$1,432 increased million in to 2016 $1,768 aslower a million result depreciation of in a andincome 2017 higher tax adjusted expense. from amortization, EBITDA and partially offset by higher %Chg 1 159 (20) 835 105 (163) 4 (231) 7 3,2621,773 9 3 5,031 6 1,432 23 7,9163,8712,146 5 1 – 36.7% 0.9 pts 2016 13,702 3 13,027 4 1 127 (170) (247) 3,542 1,819 5,318 1,768 8,343 3,894 2,153 1,711 37.6% 2017 14,143 13,560 Years ended December 31 bout these measures, including how we s under IFRS and do not have standard 3 3 2 3 3 intercompany eliminations intercompany eliminations Corporate items and Wireless Cable Media Wireless Cable Media Corporate items and Amounts calculated onaccounting a policies prior basis to adopting consistent IFRSAs 15. with defined. See See “Accounting “Key our Policies”. Performance Indicators”. previousAdjusted EBITDA, revenue adjusted recognition EBITDA margin,measures and adjusted and net income should aremeasures. non-GAAP not These are bemeanings, not considered so defined may substitutes not term “Non-GAAP be or Measures” a alternatives for reliablecalculate information way for them. a to GAAP compare us to other companies. See Adjusted EBITDA Revenue Total service revenue 1 2 3 2017 FULL-YEAR RESULTS COMPARED TO 2016 Effective January 1, 2018,decision upon to adoption restate of 2017new IFRS reported accounting 15, figures standard. we inrestated. made Periods accordance a prior with As the to apurposes, 2017 the consequence have 2017 not ofresults full-year been presented this below results represent compared decision, figureswith prepared accounting to in for standards accordance 2016 prior comparative results to full-year have the been adoption summarized in of the IFRS table 15. below. These Additionally, effectiveEBITDA January as our 1, key profitoperating 2018, measure, replacing profit we our previousreportable non-GAAP adjusted adopted segments measure. adjusted suchsegment, We legacy that Business Solutions the also segment, andMonitoring results our redefined Smart of products Home our oursegment. are legacy All presented affected Cable resultsretrospectively within amended presented to in a incorporate this thisand profit redefined MD&A reportable measure segment change have Cable redefinition. been Adjusted EBITDA margin Revenue (In millions of dollars, except margins) Net income Adjusted net income Adjusted EBITDA MANAGEMENT’S DISCUSSION AND ANALYSIS

QUARTERLY RESULTS Below is a summary of our quarterly consolidated financial results and key performance indicators for 2018 and 2017.

QUARTERLY CONSOLIDATED FINANCIAL SUMMARY

2018 2017 1 (In millions of dollars, except per share amounts) Full Year Q4 Q3 Q2 Q1 Full Year Q4 Q3 Q2 Q1 Revenue Wireless 9,200 2,464 2,331 2,214 2,191 8,569 2,288 2,203 2,076 2,002 Cable 3,932 989 983 991 969 3,894 981 977 976 960 Media 2,168 540 488 608 532 2,153 526 516 637 474 Corporate items and intercompany eliminations (204) (55) (33) (57) (59) (247) (64) (50) (69) (64) Total revenue 15,096 3,938 3,769 3,756 3,633 14,369 3,731 3,646 3,620 3,372 Total service revenue 2 12,974 3,276 3,271 3,300 3,127 12,550 3,164 3,196 3,221 2,969 Adjusted EBITDA Wireless 4,090 1,028 1,099 1,029 934 3,726 965 1,017 915 829 Cable 1,874 489 490 462 433 1,819 477 471 455 416 Media 196 40 73 60 23 127 37 61 59 (30) Corporate items and intercompany eliminations (177) (36) (42) (47) (52) (170) (43) (46) (40) (41) Adjusted EBITDA 3 5,983 1,521 1,620 1,504 1,338 5,502 1,436 1,503 1,389 1,174 Deduct (add): Depreciation and amortization 2,211 564 558 545 544 2,142 531 531 535 545 Gain on disposition of property, plant and equipment (16) – (5) – (11) (49) – – (49) – Restructuring, acquisition and other 210 94 47 26 43 152 31 59 34 28 Finance costs 793 205 176 193 219 746 184 183 189 190 Other (income) expense (32) (26) 15 2 (23) (19) 3 20 (31) (11) Net income before income tax expense 2,817 684 829 738 566 2,530 687 710 711 422 Income tax expense 758 182 235 200 141 685 188 202 183 112 Net income 2,059 502 594 538 425 1,845 499 508 528 310 Earnings per share: Basic $4.00$ 0.97 $ 1.15 $ 1.04 $ 0.83 $ 3.58 $ 0.97 $ 0.99 $ 1.03 $ 0.60 Diluted $3.99$ 0.97 $ 1.15 $ 1.04 $ 0.80 $ 3.57 $ 0.97 $ 0.98 $ 1.02 $ 0.60 Net income 2,059 502 594 538 425 1,845 499 508 528 310 Add (deduct): Restructuring, acquisition and other 210 94 47 26 43 152 31 59 34 28 Loss on bond forward derivatives 21 21––– ––––– Loss on repayment of long-term debt 28 –––28––––– (Recovery) loss on wind-down of shomi – – – – – (20) – – (20) – Gain on disposition of property, plant and equipment (16) – (5) – (11) (49) – – (49) – Income tax impact of above items (61) (32) (11) (10) (8) (28) (7) (16) 3 (8) Income tax adjustment, legislative tax change – –––– 22––– Adjusted net income 3 2,241 585 625 554 477 1,902 525 551 496 330 Adjusted earnings per share 3: Basic $4.35$ 1.14 $ 1.21 $ 1.08 $ 0.93 $ 3.69 $ 1.02 $ 1.07 $ 0.96 $ 0.64 Diluted $4.34$ 1.13 $ 1.21 $ 1.07 $ 0.90 $ 3.68 $ 1.02 $ 1.07 $ 0.96 $ 0.64 Capital expenditures 2,790 828 700 657 605 2,436 841 658 451 486 Cash provided by operating activities 4,288 1,051 1,304 1,048 885 3,938 1,142 1,377 823 596 Free cash flow 3 1,771 275 550 562 384 1,685 230 523 607 325

1 2017 reported figures have been restated applying IFRS 15. See “Critical Accounting Policies and Estimates”. 2 As defined. See “Key Performance Indicators”. 3 Adjusted EBITDA, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP measures and should not be considered as substitutes or alternatives for GAAP measures. These are not defined terms under IFRS, and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information about these measures, including how we calculate them.

42 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 43 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT reflect the realization ofand our enhanced customer service efforts; utilizing our Roam Likeoffset Home by and Fido Roam services; partially more monthlydistance. minutes and calling features, such as long device salessmartphones; and as moresubscribers. consumers shift to higher-cost upgrade tounlimited usage; higher-tier speed plans, including those with • decreasing postpaid churn, which we believe is beginning• to higher roaming revenue as a result of• customers increasingly decreasing voice revenue as rate plans increasingly incorporate The trends in Wireless adjusted EBITDA• reflect: higher wireless device subsidies that offset the higher• wireless higher voice and data costs related to the increasingWe number of continue tosubscribers. target We have organic maintained a growthand relatively stable in mix prepaid higher-value of postpaid properties subscribers. postpaid similar to Prepaid those ofthis traditional plans postpaid plans. are We evolution believe subscribing evolving to provides to a postpaidcustomer have consumers or base over prepaid time service with hasservice, plan. resulted retention, Growth in credit, greater higher and in costs collection;increases our for have however, choice been customer most offset of by gains the of in cost operating efficiencies. Wireless operating resultsmarketing are and influenced promotionalsubscriber by expenditures additions the and and timingsubscriber acquisition- higher of related and our levels activation-related subsidies,the expenses, of typically resulting third in in andactivity may higher fourth adversely impact quarters. subscriberheightened churn metrics Conversely, as competitive a periods result activity.typically of with experience higher The volumes higher of third activityschool” as a and result of fourth and “backAggressive to promotional quarters offers holidayperiods are and often also contribute season-related advertised tocontrast, the during impact we these on consumer subscriber typically metrics.quarter In of see the behaviour. year. lower subscriber additionsThe in launch of the popularthe first new level wireless device of models subscribertypically can activity. occur also Highly-anticipated affect in devicerevenue the launches fall is season dependentwhich of on is each impacted customer year. bydollar travel Wireless and the general volumes foreign roaming economic conditions. exchange and rate timing, ofOur the adoption Canadian of IFRSrecognition 15 has and a classification significantaffect of impact our on our cash the Wireless timing flowseconomics results. of from It through operations or does which methods“Accounting not Policies” we and for underlying more transact information. with our customers.Cable See The trends in Cable service revenue• primarily reflect: higher Internet subscription fees as• customers general pricing increasingly increases; and smartphones; Wireless The trends in Wireless revenue and• adjusted EBITDA the reflect: growing number of• wireless voice higher and usage data of subscribers; wireless• data; higher wireless device sales as more consumers shift to Our operating results generallyresult vary of from changes quarterfluctuations, in to general quarter among as economicsegments. other a conditions This means and our things, results seasonal indicative in in one of quarter are each how notCable, necessarily we of and will Media our performcertain other each in historical reportable trends have in, a their unique businesses. future seasonal quarter.Fluctuations aspects in Wireless, net to,attributed income and to from losses quarter ongains the to or repayment losses, quarter changes of canother in debt, income also the foreign and fair be expenses, exchange value impairmentincome of of tax expense. assets, derivative and instruments, changes in QUARTERLY TRENDS AND SEASONALITY Net income and higher adjusted netNet income income andquarter by adjusted 1% and net 11%,EBITDA, respectively, partially income as offset by a increased higher result depreciation of in and higher amortization. adjusted the fourth Higher adjusted EBITDA In the fourthWireless quarter, adjusted adjusted EBITDA EBITDAgrowth increased growth in 6%, Wireless of revenue,frontline driven 7%, employees. partially by as offset by a investments resultCable in adjusted of our EBITDA increased strong 3% infrom the fourth the quarter primarily ongoingservices and product various cost efficiencies mix achieved. shiftMedia to adjusted higher-marginprimarily Internet EBITDA as a result increased of increased revenue. 8% in the fourth quarter Higher revenue Consolidated revenue increased 6%driven by in Wireless the service revenue fourth growth of quarter, 5%. largely Growth in Wirelesscontinue monetizing was the a increasingdisciplined demand result for data of approach along ourWireless with equipment a around balanced revenue grew approach 17%by subscriber in the to an fourth quarter base increase driven hardware upgrades. in management. sales of higherCable value revenue devices increasedrevenue growth and 1% of increased 6% in continuedquarter, we to the had drive net the fourth additions Cable of 25,000 quarter segment. for This Internet. Media as revenue Internet increased 3%result of in higher advertising the and sports-related fourth revenue. quarter primarily as a FOURTH QUARTER 2018 RESULTS Results commentary inthe “Fourth fourth quarter Quarter of 2018 2018 with the Results” fourth quarter compares of 2017. MANAGEMENT’S DISCUSSION AND ANALYSIS

• shift of enterprise customers from lower-margin, off-net legacy Seasonal fluctuations relate to: long distance and data services to higher-margin, next • periods of increased consumer activity and their impact on generation services and data centre businesses; partially offset advertising and related retail cycles, which tend to be most active by in the fourth quarter due to holiday spending and slower in the • competitive losses of Television subscribers; first quarter; • Television subscribers downgrading their service plans; and • the MLB season, where: • lower additional usage of Internet, Television, and Phone • games played are concentrated in the spring, summer, and products and services as service plans are increasingly bundling fall months (generally the second and third quarters of the more features, such as unlimited usage or a greater number of year); TV channels. • revenue related to game day ticket sales, merchandise sales, and advertising are concentrated in the spring, summer, and The trends in Cable adjusted EBITDA primarily reflect: fall months (generally the second and third quarters of the • higher Internet operating margins, as a result of the shift from year), with postseason games commanding a premium in conventional Television to Internet services; partially offset by advertising revenue and additional revenue from game day • higher premium supplier fees in Television as a result of ticket sales and merchandise sales, if and when the Toronto bundling more value-added offerings into our Cable products. Blue Jays play in the postseason; and Cable’s operating results are affected by modest seasonal • programming and production costs and player payroll are fluctuations in subscriber additions and disconnections, typically expensed based on the number of games aired or played, as caused by: applicable; and • university and college students who live in residences moving • the NHL season, where: out early in the second quarter and canceling their service as well • regular season games are concentrated in the fall and winter as students moving in late in the third quarter and signing up for months (generally the first and fourth quarters of the year) and cable service; playoff games are concentrated in the spring months • individuals temporarily suspending service for extended (generally the second quarter of the year). We expect a vacations or seasonal relocations; and correlation between the quality of revenue and earnings and • the concentrated marketing we generally conduct in our fourth the extent of Canadian teams’ presence during the playoffs; quarter. • programming and production costs are expensed based on the timing of when the rights are aired or are expected to be Cable operating results are also influenced by trends in cord consumed; and shaving and cord cutting, which has resulted in fewer subscribers • advertising revenue and programming expenses are watching traditional cable television, as well as a lower number of concentrated in the fall, winter, and spring months, with Television subscribers. In addition, trends in the use of wireless playoff games commanding a premium in advertising products and Internet or social media as substitutes for traditional revenue. home phone products have resulted in fewer Phone subscribers. Cable results from our enterprise customers do not generally have Other expenses any unique seasonal aspects. Depreciation and amortization has been trending upward over the past several years as a result of an increase in our general Media depreciable asset base, related significantly to our recent rollout The trends in Media’s results are generally the result of: and expansion of our wireless network. This is a direct result of • fluctuations in advertising and consumer market conditions; increasing capital expenditures in previous and current years as we • subscriber rate increases; worked to upgrade our wireless network, purchase customer • higher sports and rights costs, including increases as we move premise equipment, and roll out Ignite TV, Ignite Gigabit Internet, further along in our NHL Agreement; and and 4K TV to our Cable footprint. We expect future depreciation • continual investment in primetime and specialty programming and amortization to align with ongoing capital expenditures. relating to both our broadcast networks (such as City) and our specialty channels (such as FX (Canada)).

44 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 45 | ROGERS COMMUNICATIONS INC. publicly traded investments. r debt derivatives, primarily as a result elative to the US$. See “Financial Risk lative to the US$. See “Financial Risk of the debt derivatives pertaining to the in temporary differences between the our US$1.4 billion senior notes in April 2018, 2018 ANNUAL REPORT in market values of our debt and expenditure trade receivables driven by increased revenue and in contracts with customers. in contracts with customers. tization of intangible assets. air value decreases for certain customer deposits at the Toronto Blue Jays. ming of tax installments. lects a decrease in our net pension liability as a result of an partially offset by the reclassification fromin long-term senior of notes a due total in of 2019. $900 million result of the depreciation of theManagement”. Cdn$ r of payments made. repayment of our US$1.4 billion seniorManagement”. notes. See “Financial Risk expense. See “Capital Expenditures”. exchange revaluation, partially offset by thetotal reclassification of to $900 current million of in a senior notes. derivatives as a result of the“Financial depreciation Risk of Management”. the Cdn$ relative to the US$. See certain other accruals. of the depreciation of the Cdn$Management”. re increase in the fair value of the plan assets. accounting and tax bases for certain assets. $ Chg % Chg Explanation of significant changes 1 – 405 – See “Sources and Uses of Cash”. 6 (6) n/m See “Sources and Uses of Cash”. 3 (3) (100) n/m 35 – – n/m 62 115 185 Reflects the ti 133 (46) (35) Primarily reflects changes in market values of our expenditure derivatives, as a 278 (45) (16) Reflects lower 132 – – n/m 421 (151) (36) Primarily reflects the settlement 953 386 41 Primarily reflects changes 414 22 5 n/m 143 (11) (8) n/m 413 122 30 Reflects net increases 820 232 28 Reflects net increases 435 31 7 n/m 147 (125) (85) Reflects changes in market values of ou 613 (67) (11) Primarily ref 2017 1,756 (856) (49) Reflects the repayment of 6,883 (47) (1) 2,931 121 4 Primarily reflects an overall increase in trade payables as a result of the timing 1,585 670 42 Reflects additional borrowings under our US CP program. 4,125 763 18 3,905 – – n/m 7,244 (39) (1) Reflects the amor 2,561 (427) (17) Primarily reflects f 2,035 224 11 Reflects an increase in 2,624 286 11 Primarily reflects an increase 7,496 683 9 Reflects changes in retained earnings and equity reserves. 11,143 637 6 Primarily reflects capital expenditures, partially offset by depreciation 12,692 698 5 Primarily reflects the issuance of US$750 million of senior notes and foreign 30,490 1,428 5 30,490 1,428 5 22,994 745 3 (restated) – – 87 35 22 900 177 233 132 270 132 436 535 466 405 546 2018 6,836 3,052 2,255 4,888 3,905 1,339 7,205 1,052 2,134 2,259 2,910 8,179 31,918 11,780 13,390 31,918 23,739 Current portion of derivative instruments Current portion of long-term debt Contract liabilities Bank advances Accounts payable and accrued liabilities Short-term borrowings Income tax payable Other current liabilities Current portion of derivative instruments Other current assets Current portion of contract assets Inventories Cash and cash equivalents Accounts receivable Current liabilities: Current assets: 2017 reported figures have been restated applying IFRS 15. See “Accounting Policies”. Total current liabilities Provisions Long-term debt Liabilities and shareholders’ equity Property, plant and equipment Total current assets Total assets Deferred tax assets Goodwill Derivative instruments Intangible assets Other long-term assets Contract assets Investments Derivative instruments 1 As at December 31 (In millions of dollars) OVERVIEW OF FINANCIAL POSITION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Assets Other long-term liabilities Deferred tax liabilities Total liabilities and shareholders’ equity Total liabilities Shareholders’ equity MANAGEMENT’S DISCUSSION AND ANALYSIS

Managing Our Liquidity and Financial Resources SOURCES AND USES OF CASH OPERATING, INVESTING, AND FINANCING ACTIVITIES

Years ended December 31 2017 (In millions of dollars) 2018 (restated) 1 Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid 5,498 5,312 Change in non-cash operating working capital items (114) (164) Cash provided by operating activities before income taxes paid and interest paid 5,384 5,148 Income taxes paid (370) (475) Interest paid (726) (735) Cash provided by operating activities 4,288 3,938 Investing activities: Capital expenditures (2,790) (2,436) Additions to program rights (54) (59) Changes in non-cash working capital related to capital expenditures and intangible assets (125) 109 Acquisitions and other strategic transactions, net of cash acquired – (184) Other 25 (60) Cash used in investing activities (2,944) (2,630) Financing activities: Net proceeds received on short-term borrowings 508 858 Net repayment of long-term debt (823) (1,034) Net proceeds (payments) on settlement of debt derivatives and forward contracts 388 (79) Transaction costs incurred (18) – Dividends paid (988) (988) Cash used in financing activities (933) (1,243) Change in cash and cash equivalents 411 65 Bank advances, beginning of year (6) (71) Cash and cash equivalents (bank advances), end of year 405 (6)

1 2017 reported figures have been restated applying IFRS 15. See “Accounting Policies”.

OPERATING ACTIVITIES FINANCING ACTIVITIES The increase in cash provided by operating activities this year was a We received net amounts of $55 million for the year ended result of higher net income, lower income taxes paid, and lower net December 31, 2018 (2017 – repaid net amounts of $255 million) investment in non-cash working capital. on our short-term borrowings, long-term debt, and related derivatives. See “Financial Risk Management” for more information INVESTING ACTIVITIES on the cash flows relating to our derivative instruments. Capital expenditures We spent a net amount of $2,790 million this year on property, Short-term borrowings plant and equipment before related changes in non-cash working Our short-term borrowings consist of amounts outstanding under capital items, which was 15% higher than 2017. See “Capital our accounts receivable securitization program and under our US Expenditures” for more information. CP program. Below is a summary of our short-term borrowings as at December 31, 2018 and 2017. Acquisitions and other strategic transactions We did not make any material acquisitions or other strategic Years ended December 31 transactions in 2018. In June 2017, upon receipt of all necessary (In millions of dollars) 2018 2017 regulatory approvals, we acquired an AWS-1 spectrum licence from Quebecor Inc., pursuant to an existing agreement, by paying Accounts receivable securitization $184 million. Upon acquisition, we recognized the spectrum program 650 650 licence as an intangible asset of $184 million, which included US commercial paper program 1,605 935 directly attributable costs. The spectrum licence provides us with Total short-term borrowings 2,255 1,585 more wireless capacity in the Greater Toronto Area.

46 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 47 | 530 858 (750) (750) (750) (680) (150) (284) 2,999 1,008 1,730 (1,830) (3,283) (1,034) (9,704) (Cdn$) (Cdn$) Notional Notional rate rate Exchange Exchange ––– ––– ROGERS COMMUNICATIONS INC. 960 1.32 1,269 8,267 1.30 10,712 (US$) (US$) (1,110) 1.31 (1,453) (7,530) 1.29 Notional Notional – – – – – 225 508 508 (225) 157 (157) (823) (823) (Cdn$) (1,761) (Cdn$) Notional 2018 ANNUAL REPORT Notional rate rate Exchange Exchange 750 1.25 938 125 1.26 157 (US$) (125) 1.26 (157) (US$) 15,262 1.29 19,752 (14,858) 1.30 (19,244) (1,400) 1.26 (1,761) The revolving credit facility isranks equally unsecured, with guaranteed all by of RCCI, our senior and notes andOn debentures. April 13,amount 2018, of our we US$1.4were repaid billion ($1.8 the originally billion) entire 6.8%associated due senior debt outstanding notes derivatives in were that principal settledof August for $0.3 net billion. 2018. proceeds As received including a At settlement result, of we the the repaidseparately a associated same funded net debt through amount derivatives, our time, US of which CPfacility. $1.5 was program the See billion, and “Financial our Condition” bank for credit more information. program are unsecured and guaranteedin by RCCI, right and of rank payment equally “Financial with Condition” all for more our information. senior notes andConcurrent debentures. See with ourderivatives to US hedge the CPprincipal foreign and issuances, interest currency components risk of weCP the associated borrowings entered with under our the program. into US information. debt See “Financial Risk Management” for more Year ended December 31, 2018 Year ended December 31, 2017 Notional Year ended December 31, 2018 Year ended December 31, 2017 Notional (3) 13 (608) 2017 (1,034) 16,080 14,448 11 (18) 672 (823) 2018 14,448 14,290 Years ended December 31 costs beginning of year end of year Total credit facility repayments Credit facility repayments (Cdn$) Credit facility repayments (US$) Senior notes repayments (Cdn$) Senior notes repayments (US$) Net repayment of senior notes Net repayment of long-term debt Total senior notes repayments Proceeds received from accounts receivableRepayment securitization of accounts receivable securitization Net repayment of accounts receivable securitization Net proceeds received on short-term borrowings (In millions of dollars, except exchange rates) Net repayments under credit facilities Senior notes issuances (US$) Amortization of deferred transaction Loss (gain) on foreign exchange Deferred transaction costs incurred Credit facility borrowings (US$) Total credit facility borrowings Net repayment of long-term debt Long-term debt net of transaction costs, Credit facility borrowings (Cdn$) In March 2017, we enteredto into a issue US CPUS$1 up program billion. that to allowed In us aggregate principal a December amount allowed 2017, maximum underUS$1.5 our we billion. aggregate US CP Funds increased program principal canterms to the to be amount maturity borrowed maximum ranging undermarket of from conditions. this 1 Any program to issuances 397 with madewill days, under be subject the issued at US to a CP ongoing discount. program The obligations of RCI under the US CP Long-term debt Our long-term debt consists of amountshave outstanding issued. The under tables our below bank summarize and the letter activity of relating credit to facilities our and long-term the debt senior for notes the and years debentures ended we December 31, 2018 and 2017. Proceeds received from US commercial paper The table below summarizes the activity relating to our short-term borrowings for the years ended December 31, 2018 and 2017. Repayment of US commercial paper Net proceeds received from US commercial paper (In millions of dollars, except exchange rates) (In millions of dollars) Long-term debt net of transaction costs, MANAGEMENT’S DISCUSSION AND ANALYSIS

Issuance of senior notes and related debt derivatives Below is a summary of the senior notes that we issued in 2018, with the proceeds used to repay long-term debt maturing in 2018 and for general corporate purposes. We did not issue any senior notes in 2017. (In millions of dollars, except interest rates and discounts) Total gross Transaction costs Principal Due Interest Discount/premium proceeds 1 and discounts 2 Date issued amount date rate at issuance (Cdn$) (Cdn$) 2018 issuances February 8, 2018 US 750 2048 4.300% 99.398% 938 16

1 Gross proceeds before transaction costs, discounts, and premiums. 2 Transaction costs, discounts, and premiums are included as deferred transaction costs and discounts in the carrying value of the long-term debt, and recognized in net income using the effective interest method.

The senior notes issued in 2018 were issued pursuant to a public FREE CASH FLOW offering in the US. Years ended December 31 Concurrent with the 2018 issuance, we entered into debt 2017 derivatives to convert all interest and principal payment obligations (In millions of dollars) 2018 (restated) 1 %Chg on the senior notes to Canadian dollars. See “Financial Risk Adjusted EBITDA 2 5,983 5,502 9 Management” for more information. Deduct (add): Capital expenditures 3 2,790 2,436 15 The notes issued in 2018 are unsecured and guaranteed by RCCI, Interest on borrowings, net of capitalized interest 689 722 (5) ranking equally with all of our other unsecured senior notes and Netchangeincontractassetand debentures, bank credit facilities, and letter of credit facilities. deferred commission cost asset balances 363 184 97 Repayment of senior notes and related derivative settlements Cash income taxes 4 370 475 (22) Below is a summary of the repayment of our senior notes during Free cash flow 2 1,771 1,685 5 2018 and 2017. 1 2017 reported figures have been restated applying IFRS 15. See “Accounting (In millions of dollars) Policies”. 2 Adjusted EBITDA and free cash flow are non-GAAP measures and should not be Notional Notional considered as substitutes or alternatives for GAAP measures. These are not defined amount amount terms under IFRS, and do not have standard meanings, so may not be a reliable way Maturity date (US$) (Cdn$) to compare us to other companies. See “Non-GAAP Measures” for information about these measures, including how we calculate them. 2018 repayments 3 Includes additions to property, plant and equipment net of proceeds on disposition, April 2018 1,400 1,761 but does not include expenditures for spectrum licences. 4 Cash income taxes are net of refunds received. 2017 repayments March 2017 – 250 The 5% increase in free cash flow this year was primarily a result of: June 2017 – 500 • higher adjusted EBITDA; partially offset by Total for 2017 – 750 • higher capital expenditures. Effective January 1, 2019, we will redefine free cash flow such that There were no debt derivatives associated with the 2017 we will no longer adjust for the “net change in contract asset and repayments. deferred commission cost asset balances” as outlined in the table below. We will redefine free cash flow to simplify this measure and Dividends we believe removing it will make us more comparable within our In 2018, we declared and paid dividends on each of our industry. This item was added on a transitional basis following our outstanding Class A Shares and Class B Non-Voting Shares. We adoption of IFRS 15 to help stakeholders understand the impact paid $988 million in cash dividends. See “Dividends and Share this standard had on our results. The below table shows the effect Information” for more information. this change will have on our free cash flow for the years ended December 31, 2018 and 2017. Shelf prospectuses Years ended December 31 We have two shelf prospectuses that qualify the offering of debt securities from time to time. One shelf prospectus qualifies the (In millions of dollars) 2018 2017 % Chg public offering of up to $4 billion of our debt securities in each of Free cash flow as reported 1 1,771 1,685 5 Add: the provinces of Canada (Canadian Shelf) and the other shelf Netchangeincontractassetand prospectus (together with a corresponding registration statement deferred commission cost asset filed with the US Securities and Exchange Commission) qualifies balances 363 184 97 the public offering of up to US$4 billion of our debt securities in Free cash flow (redefined) 1 2,134 1,869 14

the United States and Ontario (US Shelf). Both the Canadian Shelf 1 Free cash flow is a non-GAAP measure and should not be considered a substitute or and the US Shelf will expire in May 2020. alternative for GAAP measures. This is not a defined term under IFRS and does not have a standard meaning, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information about this measure, including how we calculate it.

48 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 49 | – – 400 405 1,586 1,586 2,391 2 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT CREDIT RATINGS Credit ratings provide an independentan measure issue of of credit securities quality and of and can long-term affect our financing ability andagencies to the obtain lower short-term terms ofdowngrade the the below financing. credit investment-grade, If itcost ratings rating of could financing adversely on and access affect to our our liquidity and capital. We debt, have particularly engagedMoody’s a each Investors of Service S&Prate (Moody’s), certain and Global of Fitch Ratings ourcredit Ratings Services public ratings (Fitch) debt (S&P), on to issues. RCI’s(long-term) Below and outstanding US is CP senior a (short-term) as summary notes at of December and 31, the debentures 2018. agreements. Throughout 2018,restrictions these of any covenants material consequence did on not our operations. impose BBB+ with a stable outlookBBB+ with a stable outlookA-2 Baa1 with a stable outlook Baa1 with a stable outlook BBB+ with a stable outlook BBB+ with a stable outlook P-2 N/A 1 1 1 RevolvingOutstanding letters of credit 982 3,200 – – 982 9 – 1,605 Bank advances – – – – RevolvingOutstanding letters of creditBank advances 87 3,200 – – – 87 6 9 – – 935 – – 2,256 (6) Unchanged for the year. We have not sought a rating from Fitch for our short-term obligations. IssuanceCorporate credit issuer default rating S&P Moody’s Fitch Senior unsecured debt US commercial paper 1 2 The provisions ofdescribed our in $3.2restrictions billion on “Sources our revolving operations and andwhich bank activities, are the leverage-related credit Uses maintenance most tests. significant facility 2018 As and of of at 2017, we December were 31, Cash”financial in compliance ratios, with impose all and financial covenants, all certain of the terms and conditions of our debt COVENANTS As at December 31, 2018 (In millions of dollars)Bank credit facilities: Total available Drawn Letters of credit US CP program Net available FINANCIAL CONDITION LIQUIDITY Below is a summary of our total available liquidity under our bank credit facilities, letters of credit facilities, and short-term borrowings. Total bank credit facilitiesCash and cash equivalentsTotal 4,182 405 – – 5,637 991 – 650 1,605 991 1,605 Weighted average cost of borrowings Our borrowings hadDecember 31, a 2018 (2017 weighted –to average maturity 4.70%) of and 10.7 cost a years (2017 weighted of – average 9.9 term years). 4.45% as at In addition to$1,051 the noted million sourcescompanies as of at of December available 31, 2018 (2017 liquidity, marketable – $1,465 we million). securities held in publicly traded Accounts receivable securitizationAs at December 31, 2017 (In millions of dollars)Bank credit facilities: 1,050Total bank credit facilitiesAccounts receivable securitizationTotal 650 Total available – Drawn Letters of credit 1,050 US CP Program Net available 3,287 – 650 6 – 4,337 96 656 – 935 400 96 2,250 935 2,650 MANAGEMENT’S DISCUSSION AND ANALYSIS

Ratings for long-term debt instruments across the universe of We made a total of $148 million (2017 – $145 million) of composite rates range from AAA (S&P and Fitch) or Aaa (Moody’s), contributions to our pension plans this year. We expect our total representing the highest quality of securities rated, to D (S&P), estimated funding requirements for our funded defined benefit Substantial Risk (Fitch), and C (Moody’s) for the lowest quality of pension plans to be $177 million in 2019 and to be adjusted securities rated. Investment-grade credit ratings are generally annually thereafter based on various market factors, such as interest considered to range from BBB- (S&P and Fitch) or Baa3 (Moody’s) rates, expected returns, and staffing assumptions. to AAA (S&P and Fitch) or Aaa (Moody’s). Changes in factors such as the discount rate, participation rates, Ratings for short-term debt instruments across the universe of increases in compensation, and the expected return on plan assets composite rates ranges from A-1+ (S&P), F1+ (Fitch), or P-1 can affect the accrued benefit obligation, pension expense, and (Moody’s), representing the highest quality of securities rated, to C the deficiency of plan assets over accrued obligations in the future. (S&P and Fitch), and not prime (Moody’s) for the lowest quality of See “Accounting Policies” for more information. securities rated. Investment-grade credit ratings are generally considered to be ratings of at least A-3 (S&P), F3 (Fitch), or P-3 Purchase of annuities (Moody’s) quality or higher. From time to time, we have made additional lump-sum contributions to our pension plans, and the pension plans have Credit ratings are not recommendations to purchase, hold, or sell purchased annuities from insurance companies to fund the securities, nor are they a comment on market price or investor pension benefit obligations for certain groups of retired employees suitability. There is no assurance that a rating will remain in effect for in the plans. Purchasing the annuities relieves us of our primary a given period, or that a rating will not be revised or withdrawn responsibility for that portion of the accrued benefit obligations for entirely by a rating agency if it believes circumstances warrant it. the retired employees and eliminates the significant risk associated The ratings on our senior debt provided by S&P, Fitch, and with the obligations. Moody’s are investment-grade ratings. We did not make any additional lump-sum contributions to our PENSION OBLIGATIONS pension plans in 2018 or 2017, and the pension plans did not Our defined benefit pension plans had a net funding deficit of purchase additional annuities. approximately $365 million as at December 31, 2018 (2017 – $452 million). During 2018, our net funding deficit decreased by $87 million primarily as a result of a net increase in the plan assets.

FINANCIAL RISK MANAGEMENT We use derivative instruments from time to time to manage risks related to our business activities, summarized as follows: Derivative The risk they manage Types of derivative instruments Debt derivatives Impact of fluctuations in foreign exchange rates on Cross-currency interest rate exchange agreements principal and interest payments for US dollar- Forward foreign exchange agreements (from denominated senior notes and debentures, credit time to time as necessary) facility borrowings, and commercial paper borrowings Bond forwards Impact of fluctuations in market interest rates on Forward interest rate agreements forecast interest payments for expected long-term debt Expenditure derivatives Impact of fluctuations in foreign exchange rates on Forward foreign exchange agreements forecast US dollar-denominated expenditures Equity derivatives Impact of fluctuations in share price on stock-based Total return swap agreements compensation expense

We also manage our exposure to fluctuating interest rates and we forwards and expenditure derivatives are also designated as have fixed the interest rate on 85.3% (2017 – 89.5%) of our debt, hedges for accounting purposes. including short-term borrowings, as at December 31, 2018. We designate the debt derivatives related to our senior notes and DEBT DERIVATIVES debentures as hedges for accounting purposes against the foreign We use cross-currency interest rate exchange agreements (debt exchange risk associated with specific debt instruments. We do not derivatives) to hedge the foreign exchange risk on all of the interest designate the debt derivatives related to our credit facility and US and principal payment obligations of our US dollar-denominated CP borrowings as hedges for accounting purposes. Our bond senior notes and debentures.

50 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 51 | (17) (62) (Cdn$) Notional rate Exchange ROGERS COMMUNICATIONS INC. (US$) 1,6101,760 1.32 1.328,266 2,126 2,327 1.30 10,711 7,521 1.29 9,692 Notional (1) 63 (Cdn$) 2018 ANNUAL REPORT Notional rate Exchange 125125 1.26 1.26 157 157 (US$) BOND FORWARDS From time to(bond time, forwards) to we hedge use interestwe rate extendible risk on expect bond the debt forward toapproximately instruments $5.7 derivatives issue billion of in ourover outstanding the the public next debt five future. matures yearswe (2017 As will issue – public at $5.6 debt billion)those over December and that maturities we time 31, anticipate to together that fundrequirements. 2018, at with least a other We portion general of purposes use corporate only. funding bonddesignated The as hedges forwards for bond accounting purposes. for forwardsDuring risk noted 2014, management belowunderlying we Government have of entered Canada been (GoC)comprise into interest a rate bond risk portion thatanticipated forwards will of future the to interest debtforwards, hedge rate issuances. the we risk As$1.5 associated hedged billion a with notional the amount our resultfrom for anticipated underlying of 2015 future to debt these GoC$0.4 issuances billion 2018 bond 10-year notional andforwards amount rate are the effective for from December underlying December on 2014. 31, GoC 2018. 30-year The bond rate on During 2017, we did notto enter senior or notes. settle any debt derivatives related During the year, wecredit entered facility into and debtinterest US rate derivatives CP spread related obtained borrowings toWe from as our borrowing used a funds these in resultinterest US derivatives of rate dollars. risk a to on favourable commercial offset our paper borrowings. the US As dollar-denominated foreign aof credit result these exchange facility of debt the and derivatives, and short-term wefor nature have accounting not purposes. designated them as hedges 15,262 1.29 19,751 14,833 1.29 19,148 Year ended December 31, 2018 Year ended December 31, 2017 Notional 2017 4.70% 89.5% (Cdn$) 1.1070 100.0% Financial 9.9 years Equivalent US$ 6,700 US$ 6,700 $$ 15,152 13,567 1 rate Fixed (Cdn$) interest As at December 31 hedged 2018 4.45% 85.3% 1.1438 100.0% 10.7 years rate US$ 6,050 $ 13,070 US$ 6,050 $ 15,320 Coupon US$ Hedging effect date Maturity 1 3 (US$) amount Notional Principal/ 2 , as at December 31, 2018, and December 31, 2017, RCI accounted for borrowings Debt derivatives entered Debt derivatives entered Debt derivatives settled Net cash paid Debt derivatives settled Net cash received (paid) Weighted average term to maturity Percent hedged Weighted average interest rate on Hedged with debt derivatives Hedged exchange rate Total borrowings at fixed rates Percent of borrowings at fixed rates Total borrowings 100% of its debt derivatives relateddollar-denominated to debt. senior As notes a as result, hedgesour against as US designated dollar-denominated at US senior December notes 31,and and 2018 economic debentures purposes. and are hedged 2017, for 100% accounting of instruments Borrowings include long-term debt,short-term including borrowings the impactsecuritization associated programs. of debt with derivatives, and our US CP and accounts receivable Pursuant to the requirements for hedge accounting under IFRS 9, US dollar-denominated long-term debthedged reflects interest the rate. hedged exchange rate and the Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate. Commercial paper program Credit facilities (In millions of dollars, except exchange rates) Below is a summary of theduring debt 2018 derivatives and we 2017. entered and settled related to our credit facility borrowings and commercial paper program (In millions of dollars, except exchange rates, percentages, and years) US dollar-denominated long-term debt (In millions of dollars, except interest rates) Effective date February 8, 2018 750 2048 4.300% 4.193% 938 Amount of borrowings at fixed rates 3 2 1 1 New debt derivatives to hedge new senior notes issued As at Decemberdenominated 31, 2018, senior we noteshedged had using and debt US$6.1 derivatives. debentures, billion of all US of dollar- which were MANAGEMENT’S DISCUSSION AND ANALYSIS

As at December 31, 2018 we had $900 million notional amount of bond forwards outstanding (2017 – $900 million), all of which were designated as hedges for accounting purposes.

(In millions of dollars, except interest rates)

Hedged GoC Hedged GoC Notional interest rate as at interest rate as at GoC term (years) Effective date Maturity date 1 amount December 31, 2018 December 31, 2017 1 2018 2017 10 December 2014 January 31, 2019 500 3.01% 2.85% 500 500 30 December 2014 February 28, 2019 400 2.70% 2.65% 400 400 Total 900 900 900

1 Bond forwards with maturity dates beyond December 31, 2018 are subject to GoC rate re-setting from time to time. Both the 10-year and 30-year bond forwards were extended in 2018 to their respective maturity dates.

During the year, we determined that we would no longer be able to exercise certain ten-year bond forward derivatives within the originally designated time frame. Consequently, we discontinued hedge accounting on those bond forward derivatives and reclassified a $21 million loss from the hedging reserve within shareholders’ equity to finance costs. We subsequently extended the bond forwards to May 31, 2019, with the ability to extend them further, and redesignated them as effective hedges.

EXPENDITURE DERIVATIVES We use foreign currency forward contracts (expenditure derivatives) to hedge the foreign exchange risk on the notional amount of certain forecast US dollar-denominated expenditures. Below is a summary of the expenditure derivatives we entered and settled to manage foreign exchange risk related to certain forecast expenditures. Year ended December 31, 2018 Year ended December 31, 2017 Notional Exchange Notional Notional Exchange Notional (In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$) Expenditure derivatives entered 720 1.24 896 840 1.27 1,070 Expenditure derivatives settled 840 1.30 1,093 930 1.33 1,240

The expenditure derivatives noted above have been designated as weighted average price of $51.54 (2017 – $51.44). These hedges for accounting purposes. derivatives have not been designated as hedges for accounting purposes. We record changes in their fair value as a stock-based As at December 31, 2018, we had US$1,080 million of expenditure compensation expense, or offset thereto, which serves to offset a derivatives outstanding (2017 – US$1,200 million), at an average substantial portion of the impact of changes in the market price of rate of $1.24/US$ (2017 – $1.28/US$), with terms to maturity Class B Non-Voting Shares on the accrued value of the stock-based ranging from January 2019 to December 2020 (2017 – January compensation liability for our stock-based compensation 2018 to December 2019). As at December 31, 2018, our programs. outstanding expenditure derivatives maturing in 2019 are hedged at an average exchange rate of $1.24/US$. In 2018, we settled 0.4 million equity derivatives at a weighted average price of $61.15 for net proceeds of $4 million. In 2017, we EQUITY DERIVATIVES settled existing equity derivatives for net proceeds of $6 million and We use stock-based compensation derivatives (equity derivatives) entered into new derivatives on 1.0 million Class B Non-Voting to hedge the market price appreciation risk of the Class B Shares with an expiry date of March 2018. Non-Voting Shares granted under our stock-based compensation We have executed extension agreements for our equity derivative programs. As at December 31, 2018, we had equity derivatives for contracts under substantially the same terms and conditions with 5.0 million (2017 – 5.4 million) Class B Non-Voting Shares with a revised expiry dates to April 2019 (from April 2018).

52 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 53 | 1 6 2.7 2017 1,585 5,502 (1,146) 14,555 15,000 (restated) 2.5 (405) 2018 2,255 5,983 As at December 31 (1,448) 14,404 14,806 ROGERS COMMUNICATIONS INC. iation of adjusted net debt” in bout these measures, including how we s under IFRS and do not have standard 3 out adjustment for credit risk is commonly used 2018 ANNUAL REPORT 4 4 2 4 to the various repayments this year; partially offset by any adjustment for credit risk EBITDA For purposes of calculatingincluding adjusted debt derivatives net valued debt with andto evaluate debt debt leverage leverage and ratio, forAdjusted market we valuation and believe net transactional purposes. debt,measures adjusted and EBITDA, shouldmeasures. not and These are be debtmeanings, not considered so leverage defined may substitutes ratio not term “Non-GAAP be or are Measures” a alternatives for non-GAAP reliablecalculate information way for them. a to GAAP compare us to other companies. See 2017 reported figuresPolicies”. have beenIncludes restated current applyingtransaction IFRS and costs 15. long-term See and“Non-GAAP Measures” portion for “Accounting discounts. the calculation of of See this amount. “Reconcil long-term debt before deferred Short-term borrowings (Cash and cash equivalents) bank advances Debt leverage ratio Adjusted net debt Net debt derivative assets valued without Divided by: trailing 12-month adjusted 3 4 In addition, as atmarketable December securities in 31, publicly 2018, tradedmillion). we companies held (2017 – $1,051 $1,465 million of Our adjustedDecember 31, 2017 net as a result• of: debt an increase decreased in our• net cash a by position; decrease and in the net $194 hedged amount of million our• long-term debt an due from increase in our outstanding short-term borrowings. See “Overview of Financial Position” for more information. ADJUSTED NET DEBT AND DEBT LEVERAGEWe RATIO use adjustedvaluation-related net debt analysis anddecisions. debt Adjusted and leverage netderivative ratio debt make assets includes to or liabilities, long-term conduct capitalcash short-term debt, equivalents. borrowings, net and structure-related cash debt and (In millions of dollars, except ratios) Long-term debt 1 2 41 92 (22) (87) Fair 122 122 value 1,094 1,354 1,373 1,500 (Cdn$) (Cdn$) Fair value (Cdn$) amount (Cdn$) Notional amount Notional rate rate As at December 31, 2017 As at December 31, 2018 Exchange Exchange – – 258 (US$) (US$) amount Notional amount Notional As assets 5,500 1.1243 6,184 As assetsAs liabilitiesAs liabilities 1,500 5,200 1.3388 1.0401As liabilities 2,008 5,409 746 1,301 (149) 1.2869As assetsAs liabilities 960 (23) –As assets 960 240 – 1.2953 1.2239 900 1,243 294 (64) (44) 5 – – 276 68 As liabilities 550 1.3389 736 As assets As assets 1,178As assets 1.3276 1,564 1,080 1.2413 1,341 As liabilities – – 900 as cash flow hedges: for as cash flow hedges: not accounted for as hedges: derivative assetas cash flow hedges: accounted for as cash flow hedges: expenditure derivative liabilityaccounted for as hedges: 1,129 (39) expenditure derivative asset accounted for as hedges: accounted for as hedges: accounted for as cash flow hedges: derivative asset cash flow hedges: Debt derivatives accounted for Debt derivatives accounted Short-term debt derivatives Net mark-to-market debt Bond forwards accounted for Expenditure derivatives Net mark-to-market Equity derivatives not Net mark-to-market asset Net mark-to-market Equity derivatives not Short-term debt derivatives not Expenditure derivatives Net mark-to-market debt Bond forwards accounted for as Net mark-to-market asset (In millions of dollars, except exchange rates) (In millions of dollars, except exchange rates) MARK-TO-MARKET VALUE We record ourmark-to-market valuation, calculated derivatives in accordance using with IFRS. an estimated credit-adjusted, MANAGEMENT’S DISCUSSION AND ANALYSIS

DIVIDENDS AND SHARE INFORMATION DIVIDENDS Below is a summary of the dividends that have been declared and paid on our outstanding Class A Shares and Class B Non-Voting Shares. Dividend per Dividends paid Declaration date Record date Payment date share (dollars) (in millions of dollars) January 25, 2018 March 12, 2018 April 3, 2018 0.48 247 April 19, 2018 June 11, 2018 July 3, 2018 0.48 247 August 15, 2018 September 14, 2018 October 3, 2018 0.48 247 October 19, 2018 December 11, 2018 January 3, 2019 0.48 247 January 26, 2017 March 13, 2017 April 3, 2017 0.48 247 April 18, 2017 June 12, 2017 July 4, 2017 0.48 247 August 17, 2017 September 15, 2017 October 3, 2017 0.48 247 October 19, 2017 December 11, 2017 January 2, 2018 0.48 247

In January 2019, the Board declared a quarterly dividend of $0.50 As at February 28, 2019, 111,155,021 Class A Shares, 403,657,654 perClassAShareandClassBNon-VotingShare,tobepaidon Class B Non-Voting Shares, and 2,356,547 options to purchase April 1, 2019, to shareholders of record on March 12, 2019. Class B Non-Voting Shares were outstanding. We currently expect that the remaining record and payment dates We use the weighted average number of shares outstanding to for the 2019 declaration of dividends will be as follows, subject to calculate earnings per share and adjusted earnings per share. the declaration by the Board each quarter at its sole discretion: Years ended December 31 Declaration date Record date Payment date (Number of shares in millions) 2018 2017 April 18, 2019 June 10, 2019 July 2, 2019 Basic weighted average number of June 5, 2019 September 9, 2019 October 1, 2019 shares outstanding 515 515 October 22, 2019 December 11, 2019 January 2, 2020 Diluted weighted average number of shares outstanding 516 517 NORMAL COURSE ISSUER BID In April 2018, the TSX accepted a notice of our intention to commence a normal course issuer bid (NCIB) that allows us to purchase, during the twelve-month period ending April 23, 2019, the lesser of 35.8 million Class B Non-Voting Shares and that number of Class B Non-Voting Shares that can be purchased under the NCIB for an aggregate purchase price of $500 million. We did not repurchase any shares under the NCIB in 2018.

OUTSTANDING COMMON SHARES As at December 31 2018 2017 Common shares outstanding 1 Class A Voting 111,155,637 112,407,192 Class B Non-Voting 403,657,038 402,403,433 Total common shares 514,812,675 514,810,625 Options to purchase Class B Non-Voting Shares Outstanding options 2,719,612 2,637,890 Outstanding options exercisable 1,059,590 924,562

1 Holders of our Class B Non-Voting Shares are entitled to receive notice of and to attend shareholder meetings; however, they are not entitled to vote at these meetings except as required by law or stipulated by stock exchanges. If an offer is made to purchase outstanding Class A Shares, there is no requirement under applicable law or our constating documents that an offer be made for the outstanding Class B Non-Voting Shares, and there is no other protection available to shareholders under our constating documents. If an offer is made to purchase both classes of shares, the offer for the Class A Shares may be made on different terms than the offer to the holders of Class B Non-Voting Shares.

54 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 55 | excess of one year at After 5Years Total ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT ting programs and films for periods in 8763 – 8 – 14 – – 87 85 (41) – (450) (884) (1,375) 900 2,350448 2,442667 8,712 332 14,404 1,048 202 1,079 80 1,346 1,062 4,140 OPERATING LEASES We have entered intodistribution operating leases facilities, for equipment thecontracts. rental and Terminating of wireless any premises, single towers,would one not and of have other these a“Commitments lease and material agreements Contractual adverse Obligations” effect2018 Audited and on Consolidated note Financial us Statements 27 for as quantification. to a our whole. See (101) (31) – – (132) 1 Year 1-3 Years 4-5 Years asting rights for sports broadcas Less than product, and wireless device contracts to which we have committed. . US dollar amounts have been translated into Canadian dollars at the Bank of Canada year-end rate. 2 (including current portion) due at maturity. 2 4 1 3 5 2 contract inception. Player contracts are Toronto Blue JaysPurchase players’ obligations salary are contracts the into contractual which obligations weProgram under have service, rights entered and are are the contractually agreements obligated to into pay. which we have entered to acquire broadc Principal obligations of long-term debt Net (receipts) disbursements due at maturity Net interest paymentsDebt derivative instruments Property, plant and equipmentIntangible assetsProgram rights Other long-term liabilitiesTotal 658 1,141 75 913 86 1 35 5,923 8,635 47 148 24 5,255 36 5 – 5,418 244 4,424 8 – 15,508 183 38 30,605 As a regular partprovide of for our indemnification business,transactions and we enter involving guarantees into to businessagreements, agreements counterparties sales that sale of in services, andassets. and Due purchases business to and the development combination natureto of of make these a indemnifications, reasonable we estimatewe are of could unable the be maximum requirednot potential to made amount pay any significant counterparties. paymentguarantees. Historically, under we these See indemnifications have or Financial note Statements. 26 to our 2018 Audited Consolidated OFF-BALANCE SHEET ARRANGEMENTS GUARANTEES 3 4 5 1 2 Expenditure derivative instruments (In millions of dollars) COMMITMENTS AND CONTRACTUAL OBLIGATIONS CONTRACTUAL OBLIGATIONS Below is a summary of ourAudited obligations Consolidated under Financial firm Statements contractual for arrangements more as information. at December 31, 2018. See notes 3, 21, and 27 to our 2018 Bond forwards Operating leasesPlayer contracts Purchase obligations 208 312 172 287 979 Short-term borrowingsLong-term debt 2,255 – – – 2,255 MANAGEMENT’S DISCUSSION AND ANALYSIS

Governance and Risk Management GOVERNANCE AT ROGERS BOARD OVERSIGHT The Board delegates certain responsibilities to its seven standing Rogers is a family-founded, family-controlled company and we take committees to ensure proper oversight and accountability: pride in our proactive and disciplined approach to ensuring that • Audit and Risk Committee – reviews our accounting policies and our governance structure and practices instill the confidence of our practices, the integrity of our financial reporting processes and shareholders. procedures, and the financial statements and other relevant disclosure for release to shareholders and the public. It assists Voting control of Rogers Communications Inc. is held by a trust, the the Board in its oversight of our compliance with legal and beneficiaries of which are members of the Rogers family. The trust regulatory requirements for financial reporting, assesses our holds voting control of RCI for the benefit of successive generations accounting and financial control systems, and evaluates the of the Rogers family via the trust’s ownership of 92% of the qualifications, independence, and work of our internal and outstanding Class A Shares of RCI (2017 – 91%). The Rogers family external auditors. It also reviews risk management policies and are substantial stakeholders and owned approximately 27% of our associated processes used to manage major risk exposures. equity as at December 31, 2018 (2017 – 27%) through its • Corporate Governance Committee – assists the Board to ensure ownershipofacombinedtotalof141millionClassASharesand it has appropriate systems and procedures for carrying out its Class B Non-Voting Shares (2017 – 141 million). responsibilities. This committee develops governance policies The Board is made up of four members of the Rogers family and and practices, recommends them to the Board for approval, and another eleven directors who bring a rich mix of experience as leads the Board in its periodic review of Board and committee business leaders in North America. All of our directors are firmly performance. committed to firm governance, strong oversight, and the ongoing • Nominating Committee – identifies prospective candidates to creation of shareholder value. The Board as a whole is committed serve on the Board. Nominated directors are either elected by to sound corporate governance and continually reviews its shareholders at a meeting or appointed by the Board. The governance practices and benchmarks them against committee also recommends nominees for each Board acknowledged leaders and evolving legislation. The Board believes committee, including each committee chair. that Rogers’ governance system is effective and that there are • Human Resources Committee – assists the Board in monitoring, appropriate structures and procedures in place. reviewing, and approving compensation and benefit policies and practices. It is also responsible for recommending the GOVERNANCE BEST PRACTICES compensation of senior management and monitoring senior The majority of our directors are independent and we have executive succession planning. adopted many best practices for effective governance, including: • Executive Committee – assists the Board in discharging its • separation of the CEO and Chair roles; responsibilities between meetings, including acting in such areas • an independent lead director; as are specifically designated and authorized at a preceding • formal corporate governance policies and charters; Board meeting to consider matters that may arise from time to • a code of business conduct and whistleblower hotline; time. • director share ownership guidelines; • Finance Committee – reviews our investment strategies, general • Board and committee in camera discussions; debt, and equity structure and reports on them to the Board. • annual reviews of Board and Committee performance; • Pension Committee – oversees the administration of our retiree • Audit and Risk Committee meetings with internal and external pension plans and reviews the investment performance and auditors; provisions of the plans. • an orientation program for new directors; You can find more details about governance at Rogers on our • regular Board education sessions; Investor Relations website (investors.rogers.com), including: • committee authority to retain independent advisors; and • a complete statement of our corporate governance practices; • director material relationship standards. • our codes of conduct and ethics; We comply with all relevant corporate governance guidelines and • full Board committee charters; standards as a Canadian public company listed on the TSX and as a • director biographies; and foreign private issuer listed on the NYSE in the US. • a summary of the differences between the NYSE corporate governance rules that apply to US-based companies and our governance practices as a non-US-based issuer listed on the NYSE.

56 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 57 | Pension Chair Member ROGERS COMMUNICATIONS INC. Executive Finance 2018 ANNUAL REPORT Human Resources network totechnology. prepare for theto manage next a range of generationwe product responsibility have issues. of For policies instance, regulations wireless in and codes, placeand have to programs comply and advisestewardship with teams to all programs on manage relevant torecycling of our safety manage our used theFidoTrade. accessibility products, including proper Rogers offerings, Trade-Up disposal and and andimprove operate transparency and striveprivacy to space. be Our Privacy an Policy industrypractices outlines regarding leader our the responsibilities in protection and the of theour personal information of employeesoversees and our compliance with customers. thisand policy responds and Our all to applicable requests Chiefdata. laws, from Privacy law enforcement Officer for customer capabilities, and careers ofand our people to to make supportachieve their Rogers this, success it the isteams, best important and that place continue we to to livejourneys. support our work our values, employees in develop In onengagement our Canada. scores their and career To 2018, continued to investand in training we our programs, development our developmentour achieved planning onboarding process, programs. and Our best-in-class Chiefoversees Human Resources talent Officer employee Committee management, assists while theapproving compensation the and Board benefit policies Human and in practices. Resources monitoring, reviewing, and • Product Responsibility: We have programs and policies in place • Customer Privacy and Information Security: We actively work to Employee experience • Talent Management: It is our goal to invest in building the skills, Nominating Corporate Governance Risk Audit and Board of Directors and its Committees Directors and Board of PC, QC FCPA, FCA CM CPA, CA CM customers first in everythingstrategic priorities. we We continue do; to this focusour on is self-serve customers options a for core andcustomer pillar service we representatives. of In our investour 2018, we in progress began measuring training inRecommend (LTR), and customer as opposed tools experience tohow Net customers through for feel Promoter about Score, us Likelihood our to and our learn to brands. a part of our identity,latest whether it network is bringing technologies$2.8 new billion to products in or capital market. the expenditures,going with In to much our of 2018, that wireless investment and weon cable core networks. invested We performance continue and to focus reliability and invest in our wireless standards of integrity,citizenship, ethical underpinned by behaviour, guidelines and andthe policies good that actions corporate govern responsible of conduct. our directors and employees and promote Loretta A. Rogers Martha L. Rogers Melinda M. Rogers Joe Natale Alan D. Horn, Philip B. Lind, Bonnie R. Brooks, Robert K. Burgess Robert Dépatie Robert J. Gemmell Edward S. Rogers John H. Clappison, The Hon. David R. Peterson, John A. MacDonald Isabelle Marcoux As at March 6, 2019 As at March 6, Customer experience • Customer Service and Transparency: We believe in putting • Network Leadership and Innovation: Innovation has always been Good governance • Governance and Ethics: We strive to uphold the highest At Rogers, being a good corporatebusiness. citizen is Corporate at the Social veryfounder, heart Ted Responsibility of Rogers, our was andat continues important Rogers to today. be to a our core value embraced The materialplatform aspects are grouped ofalong into with our our six approaches in focus addressing Corporate them: areas that Social are Responsibility listed below, SOCIAL RESPONSIBILITY CORPORATE SOCIAL RESPONSIBILITY MANAGEMENT’S DISCUSSION AND ANALYSIS

• Inclusion and Diversity: We aim to create an open, trusting, and Economy and society inclusive workplace where we embrace diversity of thought and • Economic Performance: We strive to offer innovative solutions for straight talk. We believe that reflecting the diversity of our customers, create diverse and well-paying jobs, support small customers and communities allows us to serve them better. Our businesses, pay our fair share of taxes, and deliver dividends to Inclusion & Diversity Council is composed of leaders who shareholders. Beyond these direct economic impacts, our oversee the development and implementation of our Inclusion & performance produces indirect economic benefits, including Diversity strategy. We aim to increase representation at the significant charitable donations and locally procured goods and executive level for women and visible minorities, and increase services. representation overall for persons with disabilities, indigenous • Supply Chain Management: Suppliers play a huge role in our peoples, and LGBTQ+. success, which is why we ensure that we have strong supplier • Safety and Wellbeing: We support our employees’ safety and selection processes and management, and that we conduct wellbeing holistically, focusing on the whole employee, business with socially and environmentally responsible including their physical and mental health at work and in their companies who share our values. We have strong, sound lives. In 2018, we launched Thrive, a new comprehensive procurement processes and demand that our suppliers adhere wellbeing program. We are also committed to providing and to our Supplier Code of Conduct. The Code sets our maintaining a safe and healthy working environment for expectations of our suppliers in terms of ethical, social, labour, employees, volunteers, contractors, visitors, and members of the health and safety, and environmental behaviours. Through our general public who may be affected by our activity. Across our membership in the Joint Audit Cooperation (JAC), we share safety initiatives, our goal is always to protect people by audit findings with a group of twelve other global telecom preventing injuries and we invest millions of dollars as well as companies, allowing us to manage sustainability among our thousands of hours in safety training every year. suppliers. See our annual Corporate Social Responsibility report on our Environmental responsibility website (about.rogers.com/responsibility) for more information • Energy Use and Climate Change: We operate thousands of about our social and environmental performance. facilities, which include owned and leased buildings, cell transmission sites, power supply stations, and retail stores, as well as an extensive vehicle fleet. We continue to invest in programs INCOME TAX AND OTHER GOVERNMENT that reduce greenhouse gas (GHG) emissions, particularly as PAYMENTS they relate to energy use. We have targets to reduce our GHG emissions by 25% and energy use by 10% by 2025 based on We proactively manage our tax affairs to enhance our business 2011 levels. decisions and optimize after-tax free cash flow available for • Waste Reduction: Reducing the amount of waste we produce is investment in our business and shareholder returns. We have another important way in which we manage our environmental comprehensive policies and procedures to ensure we are footprint. To reduce and responsibly manage the waste we compliant with all tax laws and reporting requirements, including produce, we look for opportunities to avoid waste generation, filing and making all income and sales tax returns and payments on run programs to recycle and reuse materials, and work to a timely basis. As a part of this process, we pursue open and increase employees’ recycling behaviours through our award- cooperative relationships with revenue authorities to minimize audit winning “Get Up and Get Green” program. effort and reduce tax uncertainty. We also engage with government policy makers on taxation matters that affect Rogers Community investment anditsshareholders,employees,customers,andother • Community Giving: In 2018, we provided over $60 million in stakeholders. cash and in-kind community investments to support various organizations and causes. We awarded 313 Ted Rogers INCOME TAX PAYMENTS Scholarships and 105 Ted Rogers Community Grants to help Our total income tax expense of $758 million in 2018 is close to the some of the brightest young leaders across the country succeed expense computed on our accounting income at the statutory rate in their educational aspirations. We also launched our first Give of 26.7%. Cash income tax payments totaled $370 million in 2018. Together Volunteer Days in June, with 2,500 team members Cash income tax payments differ from the income tax expense participating coast-to-coast, and raised $2.5 million through our shown on the financial statements for various reasons, including the annual Give Together giving campaign. required timing of payments. The primary reason our cash income • Digital Inclusion: Digital inclusion is a priority for us and one of tax is lower than our income tax expense is a result of the significant the best ways we can contribute to society. Our Connected for capital investment we continue to make in our wireless and Success program provides low-cost broadband Internet to rent- broadband telecommunications networks throughout Canada. subsidized tenants within partnered non-profit organizations and Similar to tax systems throughout the world, Canadian tax laws housing providers. Approximately 200,000 Canadian permit investments in such productivity-enhancing assets to be households are eligible for Internet access through the deducted for tax purposes more quickly than they are depreciated Connected for Success program, giving them the tools and for financial statement purposes. resources needed to experience the benefits of connectivity.

58 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 59 | Total taxes and other payments 008, 2014, and 2015, ROGERS COMMUNICATIONS INC. Property and business taxes 1 2018 ANNUAL REPORT Regulatory and spectrum fees taxes Payroll accountable for managing oridentify accepting and the assess risks.minimize key these Together, risks, risks, they define and enhanceobjectives. controls our and ability to action meet plans our business to ERM is theidentify the second key line risksappetite, and in of emerging meeting risks. defence. At ourlevel, the ERM business business ERM unit objectives, helps works and ouradvice department with management risk management in tomitigate managing provide these the governance risks. ERM and adequacy key works with and risks Internal Audit effectivenessacceptable and to level. monitor of associated the controls controls to to ERM carries reduce out an riskskey annual strategic to risks risk an assessmentcorporate, in to identify achieving our businessbusiness our unit, unit and corporate department and objectives toUsing objectives the an department business aggregate objectives. by approach, risks ERMpotential identifying identifies impact the and on key risks our aligning This and ability the assessment to includes achieve reviewing ourindustry risk business reports, benchmarks objectives. audit and reports,business and interviewing unit senior andresults management department of with the accountability.Leadership Team, annual ERM the Audit strategic and reports Risk risk Committee, the and the assessmentInternal Board. Audit to is the thethe third Executive line design of defence.program, and Internal internal Audit controls, operational evaluates andand effectiveness risk management. mitigation of Risks,incorporated into controls, the the plans annual governance InternalAudit Audit identified also plan. facilitates Annually, Internal the through and financial monitors statement management’s fraud thispotential risk completion assessment fraud of process to or ensuredisclosures there misstatement are is no in and ourdesigned and to financial operating effectively. statements assess and The whether Executive Leadership Team controls andare the responsible Audit are for and approving Risk our Committee adequately methodology enterprise risk policies. and Our ERM management and policies employeesand to implement rely risk identify mitigation strategies risks as on required. and opportunities the expertise of our • property and business taxes; • unrecoverable sales taxes and• custom duties; broadcast, and spectrum, and other regulatory fees. sales taxes Unrecoverable taxes Income safeguard assets fromdeter, loss and and unauthorized detectfinancial records; use, fraud, to and prevent, to ensure the accuracy ofimplementation the of riskcontrol these exposures, policies including cybersecurity; and actions toexisting major monitor systems; and significant deficiencies that may be identified; and by the Audit and Risk Committee or directed by the Board. approximately 26,100 employees; Includes an allocation of $266 million relating to the $1.0 billion, $3.3 billion, and $24 million we paid for the acquisition of spectrum licences in 2 respectively. Our Enterprise Risk Management (ERM)of program Defence” uses the framework “3 to Lines communicate risks. identify, Our assess, business units manage, andExecutive monitor, departments, Leadership led and by Team, the are the first line of defence and are ENTERPRISE RISK MANAGEMENT RISK GOVERNANCE The Boardoversees has management overall in identifyingbusiness responsibility and the implementing key appropriate for risk risksto assessment risk we processes manage face governance in thesemanagement our duties and to risks. the Audit It and Risk Committee. delegatesThe certain Audit riskmanagement oversight and and and the Risk Boardour compliance and with Committee legal assists and the regulatory discusses requirements. Board inThe risk Audit overseeing and Risk policies Committee also• reviews: with the adequacy of the internal controls that have been adopted to • the processes for identifying,• assessing, and our managing risks; exposure to major risks and• trends the and implementation management’s of new• major our business systems continuity and• disaster and recovery any plans; special changes audit to steps adopted due• to material other weaknesses risk management or matters from time to time as determined We strivecapabilities to topurpose continually of protect risk management is strengthen and nottrade-offs to eliminate enhance between our risk but toorganization. risk shareholder optimize risk and value. management return The to maximize value to the RISK MANAGEMENT 1 We also collected on behalfpayroll of taxes. the government $1,919 million in sales taxes on our products and services and $658 million in employee (In millions of dollars) OTHER GOVERNMENT PAYMENTS In addition tocontribute significantly paying to income Canadiansfederal, provincial, by tax and paying municipal on governments, taxes including: • the and fees various profits taxes to on we the salaries earn, and wages we we pay (payroll taxes) to As outlined in the table below, the total cost to Rogers of these payments in 2018 was $1,070 million. Total payments 370 9 130 513 48 1,070 MANAGEMENT’S DISCUSSION AND ANALYSIS

RISKS AND UNCERTAINTIES AFFECTING OUR must distribute, wireless and wireline interconnection agreements, the rates we may charge to provide access to our network by third BUSINESS parties, the resale of our networks and roaming on our networks, This section describes the principal risks and uncertainties that our operation and ownership of communications systems, and our could have a material adverse effect on our business and financial ability to acquire an interest in other communications systems. In results. Any discussion about risks should be read in conjunction addition, the costs of providing services may be increased from with “About Forward-Looking Information”. time to time as a result of compliance with industry or legislative initiatives to address consumer protection concerns or such COMPETITIVE INTENSITY Internet-related issues as copyright infringement, unsolicited commercial e-mail, cybercrime, and lawful access. There is no assurance that our current or future competitors will not provide services that are superior to ours or at lower prices, adapt Generally, our licences are granted for a specified term and are more quickly to evolving industry trends or changing market subject to conditions on the maintenance of these licences. These requirements, enter markets in which we operate, or introduce licensing conditions and related fees may be modified at any time competing services. Any of these factors could increase churn or by the regulators. The regulators may decide not to renew a licence reduce our business market share or revenue. when it expires, and any failure by us to comply with the conditions on the maintenance of a licence could result in a revocation or We may have some ongoing re-pricing of products and services, as forfeiture of any of our licences or the imposition of fines. Our we may need to extend lower wireless pricing offers to attract new cable, wireless, and broadcasting licences generally may not be customers and retain existing subscribers. As wireless penetration transferred without regulatory approval. of the population deepens, new wireless customers may generate lower average monthly revenue, which could slow revenue growth. The licences include conditions requiring us to comply with Canadian ownership restrictions of the applicable legislation. We Global technology giants continue to ramp up content spending are currently in compliance with all of these Canadian ownership into new markets such as sports media, resulting in increased and control requirements. If these requirements were violated, we competition for our Media and Cable business segments. This may would be subject to various penalties, possibly including, in the result in an increase in subscriber churn as customers now have extreme case, the loss of a licence. additional choices of supplementary sources of media content. Wireless could face increased competition with changes to foreign PROPOSED DIRECTION TO THE CRTC ON ownership rules and control of wireless licences: TELECOMMUNICATIONS AND CRTC REVIEW OF MOBILE • foreign telecommunication companies could enter the WIRELESS SERVICES Canadian market by acquiring wireless licences or a holder of On February 26, 2019, the Minister of Innovation, Science and wireless licences. If companies with significantly greater capital Economic Development tabled a Proposed Order Issuing a resources enter the Canadian market, it could reduce our Direction to the CRTC on Implementing the Canadian wireless market share. See “Foreign Ownership and Control” for Telecommunications Policy Objectives to Promote Competition, more information. Affordability, Consumer Interests and Innovation. The Direction • ISED Canada’s policy regarding the transfer of spectrum signals the government’s intention to require the CRTC to consider licences, combined with 2012 legislation that allows foreign competition, affordability, consumer interests, and innovation in its ownership of wireless providers with less than 10% market share, telecommunications decisions and to demonstrate to Canadians in could make it harder for incumbent wireless carriers to acquire those decisions that it has done so. The final Order, when in effect, additional spectrum. The legislation regarding foreign will apply to the five-year review to examine the state of the mobile ownership of wireless providers could make it less expensive for wireless market initiated by the CRTC on February 28, 2019 foreign wireless carriers to enter the Canadian wireless market. through Telecom Notice of Consultation CRTC 2019-57, Review of This could increase the intensity of competition in the Canadian mobile wireless services. Changes arising from the review may wireless sector. adversely affect Rogers. See “Regulation In Our Industry” for more information. In addition, the CRTC Broadcasting Distribution Regulations do not allow cable operators to obtain exclusive contracts in buildings SPECTRUM where it is technically feasible to install two or more transmission Radio spectrum is one of the fundamental assets required to carry systems. on our Wireless business. Our ability to continue to offer and improve current services and to offer new services depends on, REGULATORY RISKS among other factors, continued access to, and deployment of, CHANGES IN GOVERNMENT REGULATIONS adequate spectrum, including the ability to both renew current Substantially all of our business activities are regulated by ISED spectrum licences and acquire new spectrum licences. Canada and/or the CRTC. Any regulatory changes or decisions If we cannot acquire and retain needed spectrum, we may not be could adversely affect our consolidated results of operations. See able to continue to offer and improve our current services and “Regulation In Our Industry” for more information. deploy new services on a timely basis, including providing Regulatory changes or decisions made by these regulators could competitive data speeds our customers want. As a result, our ability adversely impact our results on a consolidated basis. This to attract and retain customers could be adversely affected. In regulation relates to, among other things, licensing and related addition, an inability to acquire and retain needed spectrum could fees, competition, the cable television programming services we affect network quality and result in higher capital expenditures.

60 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 61 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT customers; match what they were offered; promotions match the customer’s needs and means; and of misleading or aggressiveplanned CCTS retail review sales proceeding in practices 2022. as part of the TALENT ACQUISITION AND RETENTION A significant transformationcompetition is for underway talent increases, inon our our our ability success industry, to is attractworkforce, and highly and including retain dependent as a in high-performing keyrelated and engaged growth fields. areas, suchdevelopment Our as digital- focus opportunities, andbenefits, IT- must and competitive be aworkforce as on compensation great a result providing employeefailing of and factors to career experience. such as develop and Changesongoing turnover union internal and negotiations, to or restructuring, succession, other our eventseffect cost could on have the reduction an customer adverse experience, initiatives, profitability. and as a result our revenue and CUSTOMER EXPERIENCE Creating best-in-class customerstrategic priorities. experiences This is iskey because a to one great our customer oflikelihood experience long-term to our is success. recommend six Rogersability Our to are customers’ provide both a loyalty dependentexpectations. service and upon experience We that our their meets handleranging or from exceeds many potential their customer newto customers existing interactions customers making calling for in-store annually, technicalbetween. purchases support and everything Additionally, in products, every such as time makingthe a someone Internet call or on uses watching their their wireless one favourite device, show browsing using of their Internet our or SALES PRACTICES In 2018, a media reporttelecommunication was published company based on employeespressured information who from into giving stated misleadingattempt they to information get were them to to customersneed sign up in for or an services they want.echoed did by not Reports necessarily hundreds of ofand customers overly who to complained aggressive the toServices (CCTS). the sales Commission In CRTC October tactics for 2018,as were the Complaints CRTC part held for a oftelecommunication public Telecom-television hearing a companies proceeding deniedsystemic that studying and any thisperformed representative problems an issue. internal of were investigation All and determinedsmall the of that only percentage a industry. the of very ourper major Concurrently, year tens result of we in millions complaintspractices. due of to customer aggressive interactions or misleading sales The CRTC released its report torecommending further ISED consideration Canada of: on February 20,• 2019 mandatory provision of• pre-sales trial periods quotes to allow to customers to better• cancel a creating inform service that a did services not suitability• standard expanding the to CCTS’ ensure mandate to offers include handling and complaints ISED Canada will now considerproceedings the report. could The result proposed in follow-up our new services. mandates regarding how we sell Any increase in copyright tariffresults. fees negatively affects our operating COPYRIGHT TARIFFS DEPENDENCE ON FACILITIES AND SERVICES OFCertain ILECS business telephony operations outside ofdepend our cable significantly territory onacquired from the incumbent telecommunication availability operators, according to of CRTC rules. facilities Changes to andcost these of rules operating services these could businesses. significantly affect the We must have access toway support for structures our and cable municipalright rights facilities. of We of can apply(Telecommunications access to Act) the in CRTC under areas to whereto obtain we the municipal cannot a rights secure Telecommunications of access Cable way. costs Act Failure and adversely to affect (Canada) obtain our business. access couldThe increase Supreme Court ofCRTC Canada does ruled not inconditions have of 2003, the accessing however, the jurisdiction poles thatresult, of to the we hydroelectric establish companies. normally As the obtain a provincial utility access terms boards. under and terms established by the OBTAINING ACCESS TO SUPPORT STRUCTURES AND MUNICIPAL RIGHTS OF WAY From time toalleged time, links media betweendevices and radio other and frequency reportsinterference emissions various with have from various highlighted health wireless and medical pacemakers. devices, concerns, This including mayor including hearing discourage aids the expose cancer, use us ofdefinitive wireless and to reports devices potential ordirectly litigation studies attributable to even stating radio frequency that thoughactions emissions. Future may these there regulatory result in health are moreemissions issues restrictive no standards from are on low-powered radiocannot frequency predict devices the nature or like extent of wireless any restrictions. devices. We RADIO FREQUENCY EMISSIONS The CRTC’s decision to implementthings, its Wireless effectively Code, required among Canadian other wirelessfrom carriers offering to three-year move service away contracts andcontracts. instead This offer affects two-year our customerand acquisition and subscriber retention costs churn.(excluding The enterprise codeDecember 2, plans) was 2013 and entered appliedplans) applied to as to contracts into of (excluding allentered. enterprise June or See “Regulation contracts 3, In Our renewed 2015, Industry” for no more after information. Our matter when Wireless theyregulation, were business or originally customer could behaviourterm make it be commitments difficult or forreceive adversely us early to affected the apply cancellationcommitments. if fees service to laws, revenue customers or we anticipate from the term Changes to government spectrum feesour could payments significantly and therefore increase materially reduce our net income. THE WIRELESS CODE MANAGEMENT’S DISCUSSION AND ANALYSIS

television services, or listening to one of our radio stations, their could reroute the traffic to another carrier. This could have an experience affects all future interactions with the Rogers brand. If adverse effect on our ability to service existing customers and our products do not deliver the usage experience our customers acquire new subscribers. expect from us, and if we do not have clear, simple, and fair interactions with our customers, it could cause confusion and We work to protect our networks and our service from the impact frustrate our customers, with the potential for lost sales of natural disasters and major weather events such as ice storms, opportunities and increased churn, both of which could have wind storms, forest fires, flooding, earthquakes, or landslides where negative effects on our reputation, results of operations, and it is necessary and feasible to do so. There are no assurances that a financial condition. future event will not cause service outages and that such outages would not affect our results. Service disruptions or outages could also affect our operations if not quickly resolved, potentially causing INFORMATION SECURITY RISK a risk of billing delays or errors. If we fail to have appropriate Our industry is vulnerable to cyber risks that are growing in both response strategies and protocols in place to handle service frequency and complexity. Rogers, along with our suppliers, outages in the face of these types of events, they could have an employs systems and network infrastructure that are subject to impact on our revenue and our customer experience. Recovering cyberattacks, which may include theft of assets, unauthorized from these disasters could require significant resources and access to proprietary or sensitive information, destruction or remediation costs, which are difficult to estimate. corruption of data, or operational disruption. A significant cyberattack against our, or our suppliers’, critical network DEPENDENCE ON INFORMATION TECHNOLOGY infrastructure and supporting information systems could result in SYSTEMS service disruptions, litigation, loss of customers, significant remediation costs, and reputational damage. Our businesses depend on IT systems for day-to-day operations. If we are unable to operate our systems, make enhancements to Management has committed to an information and cybersecurity accommodate customer growth and new products and services, or program designed to reinforce the importance of remaining a if our systems experience disruptions or failures, it could have an secure, vigilant, and resilient organization. Our ongoing success adverse effect on our ability to acquire new subscribers, service depends on protecting our sensitive data, including personal customers, manage subscriber churn, produce accurate and timely information about our customers and employees. We rely on subscriber invoices, generate revenue growth, and manage security awareness training, policies, procedures, and information operating expenses. This could have an adverse impact on our technology systems to protect this information. Success also results and financial position. depends on Rogers continuing to monitor these risks, leveraging external threat intelligence, internal monitoring, reviewing best Most of our employees and critical elements of our network practices, and implementing controls as required to mitigate them. infrastructure and IT systems are concentrated in various physical We have insurance coverage against certain damages related to facilities. If we cannot access one or more of these facilities as a cybersecurity breaches, intrusions, and attacks, amongst other result of a natural or human-made disaster or otherwise, our things. The Audit and Risk Committee is responsible for overseeing operations may be significantly affected to the extent that it may be management’s policies and associated procedures related to difficult for us to recover without a significant interruption in service cybersecurity risks. or negative impact to our revenue or customer base.

External threats to the network and our business generally are DISRUPTIVE TECHNOLOGIES constantly changing and there is no assurance we will be able to protect the network from all future threats. The impact of such Our network plans assume the availability of new technology for attacks may affect our revenue. both wireless and wireline networks. While we work with industry standards bodies and our vendors to ensure timely delivery of new IMPACT OF NETWORK FAILURES ON REVENUE AND technology, there are no assurances these technologies will be available as and when required. CUSTOMER SERVICE Several technologies have affected the way our services are Customers have high expectations of reliable and consistent delivered, including: performance of our networks. Failure to maintain high service levels • broadband; and managing network traffic could have an impact on the • IP-based voice, data, and video delivery services; customer experience, potentially resulting in an increase in • increased use of optical fibre technologies to businesses and customer churn. Due to the increased demand and traffic on our residences; Internet and wireless networks, there could be capacity and • broadband wireless access and wireless services using a radio congestion pressures. Such pressures may cause issues with our frequency spectrum to which we may have limited or no access; networks in terms of speed and connectivity. If our networks or key and network components fail, it could, in some circumstances, result in • applications and services using cloud-based technology, a loss of service for our customers for certain periods and have an independent of carrier or physical connectivity. adverse effect on our results and our financial position. We also rely on business partners to carry some traffic for certain customers. If These technologies may also lead to significantly different cost one of these carriers has a service failure, it might also cause a structures for users and therefore affect the long-term viability of service interruption for certain customers that would last until we some of our current technologies. Some of these technologies

62 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 63 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT We use encryption technologyvendors developed to protect and our supported cableto by signals from our unauthorized control access and packages. access We alsoprevent to use unauthorized access encryption to our programming and Internet service. security basedThereisnoassurancethatwewillbeabletoeffectivelyprevent technologies to onunauthorized subscription decoding of television signals or Internet access in MONITORING AND CONTROLLING FRAUDULENT ACTIVITIES As a large companyrange with of tens of desirableprevention thousands requires and of a employees valuableexposure disciplined and program a products identification covering andand and governance, services, assessment, reporting. fraud misappropriation prevention, detection, of Thisfinancial assets, statements by program and employeesevents and/or can must intentional external parties. resultaddition Fraud manipulation consider to in unauthorized of financialmodems (as corruption, access loss discussed above), to andfraud a relevant digital sample to brand of us boxes include potential degradation.operations (i) examples and network using of usage In fraud, Internet our suchfraud as cable call/sell on or accounts wireless establishedstolen networks, with (ii) credit a subscription false card,unauthorized identity and use or paid (iii) that withofferings. copyright undermine a the theft exclusivity and of other our forms content UNAUTHORIZED of ACCESS TO DIGITAL BOXES ORMODEMS INTERNET OTHER BUSINESS RISKS ECONOMIC CONDITIONS Our businesses are affectedconsumer by general confidence economic conditionseconomic and and activity, and spending. economicand uncertainty business Recessions, can confidence erode and consumer declinesof reduce discretionary in these spending. Any advertising, factors lower candecreased revenue demand negatively anddebt for profitability, affect and expense. our us higherpublishing, and churn through products A digital and revenue comes bad and reduced and is significant from affected the by sale the services, strength portion of of advertising the economy. ofSTRATEGY our AND BUSINESS PLANS broadcasting, Our strategy is vitalpriorities to or our long-term addingexisting success. initiatives new Changing and strategic could strategicbusiness, have results priorities a of operations, material could and adverse financial effect condition. compromise onWe our develop businessventures to plans, grow execute our business.do projects, If not the materialize, and expected this benefits launch couldbusiness, from have results new these a of operations, material and adverse financial effect condition. on our The developmentproducts and rely, deployment in part,not of on certain proceed our vendors. as Shouldintended, planned, Connected the our deployment or Home business shouldaffected. the and This may product financial result not in resultsand subscriber unfavourable operate could customer losses, satisfaction. as lower be Cable revenue, adversely RELIANCE ON THIRD-PARTY SERVICE PROVIDERS We have outsourcingthird and parties managedbusiness service to operations arrangements provide to with certain our certain employees facilities essential and orsupport, customers, components certain property including installation and of management serviceand technicians, functions, IT our certain functions, network and call invoice printing.could centre Interruptions in adversely these affect services ourcourse ability to of serviceproviders our must fulfilling customers. ensure In ourand service the information safeguarded. is arrangements, appropriately Failureincreased protected regulatory to risk, third-party reputational do damage,customer and so service experience. damage to may the affect Rogers through have allowedproducts competitors or services at to lowerlarger, costs. enter have These competitors greater may our accessregulatory also to restrictions be than markets financial Rogers. resources, with and have similar Apple fewer has introduced embedded Subscriber Identification(e-SIM) Module technology to its latestwhen iPhones and widely iPads. This adopted, technology, carriers will without the allowcontinues use customers to of to introduce, a ore-SIM switch carrier-provided other to between SIM major device their card.adverse vendors If effect mobile introduce, on Apple products our business,many in churn, and Canada, results customers of thiscontractual operations, obligation as could without to remain have with Rogers. subsidized an Accelerated devices deployments of arelead fibre to an under networks increase in by theservices. no reach competitors This and could stability may of result their inwireline wireline-related an increase business in churnIndicators” for pertaining more segment to information. our services.Improvements See in the quality “Keycoupled of with streaming increasing Performance video availabilityonline over of through television the OTT shows Internet, content and providers,for movies has resulted viewership in competition andtelevision service providers. increased As a competition result,in we have for cord noticed an increase Canadianwithdraw cutting from cable traditional and cableare services. cord made If advances shaving to in anydistribution technology as alternative Canadian consumers system, multi-channel broadcasting competition. continue our In to addition, cablecontinues as to the develop, services it technologywireline is, Internet. for in may some wireless instances, Internet face replacing traditional The increased use ofadvertising PVRs revenue has affectedtelevision as our networks. viewers ability Thesubscriber-based can to satellite continued generate skip and emergence television AM digital advertising and and radio FM products aired growth radioeffect could audience on of on affect listening the habits resultsalso and of migrating have our away a radioInternet negative from stations. as traditional Certain more broadcast audiencesavailable. video platforms are and to the audio content streaming becomes MANAGEMENT’S DISCUSSION AND ANALYSIS

the future. If we are unable to control cable access with our Additionally, we have a large number of interconnected encryption technology, and subscriptions to digital programming, operational and business support systems, with continually including premium video-on-demand and subscription video-on- increasing complexity. Development and launch of new services demand, this could result in a decline in our Cable revenue. may require significant system development and integration efforts. There are no assurances that any proposed IT system or process LEGALANDETHICALCOMPLIANCE change initiatives will be implemented successfully or within We rely on our employees, officers, Board, suppliers, and other required timelines, failure of which could have an adverse effect on business partners to behave consistently with applicable legal and our results and financial position. ethical standards in all jurisdictions in which we operate, including, but not limited to, anti-bribery laws and regulations. Situations ACQUISITIONS, DIVESTITURES, OR INVESTMENTS where individuals or others, whether inadvertently or intentionally, Acquiring complementary businesses and technologies, do not adhere to our policies, applicable laws and regulations, or developing strategic alliances, and divesting portions of our contractual obligations may expose us to litigation and the business are often required to optimally execute our business possibility of damages, sanctions, and fines, or of being disqualified strategy. Some areas of our operations (and adjacent businesses) from bidding on contracts. This may have an adverse effect on our are subject to rapidly evolving technologies and consumer usage results, financial position, reputation, and brand. and demand trends. It is possible that we may not effectively forecast the value of consumer demand or risk of competing DEPENDENCE ON CERTAIN KEY INFRASTRUCTURE AND technologies resulting in higher valuations for acquisitions or WIRELESS DEVICE VENDORS missed opportunities. Our wireless business has relationships with a relatively small Services, technologies, key personnel, or businesses of companies number of essential network infrastructure and device vendors. We we acquire may not be effectively integrated into our business or do not have operational or financial control over them and only service offerings, or our alliances may not be successful. We also have limited influence on how they conduct their business with us. may not be able to successfully complete certain divestitures on Wireless device vendor market share has recently shifted towards satisfactory terms, if at all. fewer top suppliers, which will augment this dependency. If one of our network infrastructure suppliers fails, it could delay INCREASE IN BRING YOUR OWN DEVICE (BYOD) adding network capacity or new capabilities and services. Device CUSTOMERS and network infrastructure suppliers can extend delivery times, raise With the CRTC’s Wireless Code limiting wireless term contracts to prices, and limit supply due to their own shortages and business two years from three years, the number of BYOD customers with requirements, among other things. If these suppliers do not no-term contracts has increased. These customers are under no develop devices that satisfy customer demands, nor deliver contractual obligation to remain with Rogers, which could have a products and services on a timely basis, it could have a material material adverse effect on our churn and our Wireless revenue. adverse effect on our business, financial condition, and results of operations. Any interruption in the supply of equipment for our ACCESS TO PROGRAMMING RIGHTS networks could also affect the quality of our service or impede Competition is increasing for content programming rights from network development and expansion. both traditional linear television broadcasters and online competitors. Online providers are moving towards self-made, self- REVENUE EXPECTATIONS FROM NEW AND hosted exclusive content, such that traditional broadcasters may ADVANCED SERVICES not gain access to desirable programming. Additionally, if We expect that a substantial portion of our future revenue growth broadcasters and distributors sign longer-term agreements to may come from new and advanced services, and we continue to secure programming rights, this could affect the availability of invest significant capital resources to develop our networks so we desirable programming rights and result in lower revenue due to a can offer these services. It is possible, however, that there may not lack of access to these rights. be sufficient consumer demand, or that we may not anticipate or satisfy demand for certain products and services or be able to offer INCREASING PROGRAMMING COSTS or market these new products and services successfully to Acquiring programming is the single most significant purchasing subscribers. If we do not attract subscribers to new products and commitment in our Cable television business and is a material cost services profitably or keep pace with changing consumer for Media television properties. Increased competition for preferences, we could experience slower revenue growth and programming rights to content and popular properties from both increased churn. This could have a material adverse effect on our traditional linear television broadcasters and online competitors business, results of operations, and financial condition. continue to increase the cost of programming rights. Higher programming costs could adversely affect the operating results of COMPLEXITY OF OUR BUSINESS our business if we are unable to recover programming investments Our businesses, technologies, processes, and systems are through advertising revenue and subscription fee increases that operationally complex and increasingly interconnected. If we do reflect the market. not execute properly, or if errors or disasters affect them, customers may have a negative experience, resulting in increased churn and DECLINE OF PAY TELEVISION SUBSCRIBERS IN CANADA lower revenue. The number of pay television households in Canada has declined. Other video offerings available to consumers (for example,

64 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 65 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT dividends, which reducespurposes, including other funds financial operations; available for otherconditions; business our business and industry; competitors who may have morefinancial leverage; financial or resources and/or less working capital and capitalcorporate expenditures purposes. and for other general CAPITAL MARKETS External capital market conditionsstrategic could affect our investments abilityrequirements. to Risk make and factors includedisruptions in a meet capital reduction markets, inincrease and ongoing lending regulatory in activity, requirements bank foravailability, capital or an increase capitalization, the cost, which funding of capital. could eitherINCOME reduce TAXES AND the OTHER TAXES We collect, pay,other and taxes, accrue such as significant federalproperty amounts taxes. and provincial of sales, income employment, and and We have recordedincome significant tax amounts liabilities and ofbased expense, deferred on and substantively and calculated enactedrelevant these current income amounts time. tax A ratesmaterial effect legislative in on the effect change amounts recorded at in and the payable these inWe the rates future. provide could foravailable have income a and information otherprovided and taxes for based these believemany items. on cases, however, The all that requires calculation currently significanttax we judgment rules of and in regulations. applicable interpreting Our have taxcould taxes filings are in adequately materially subject to audits, changeincome which tax the assets, amountcircumstances, liabilities, result in of and the assessment expense, current of interest and and and penalties. could,While we in deferred believe we certain haveof paid tax, and our provided business for is adequatein interpreting amounts complex how and tax significant legislation and judgment regulations is apply to required us. CREDIT RATINGS Credit ratings provide an independenta measure securities of credit issuer quality and of long-term can financing affect our andagencies ability the lower to terms obtaindowngrade the below short- of credit investment-grade, and it thecost ratings of could financing financing. adversely on and access affect to If our our liquidity and rating capital. debt, particularly a • making us more vulnerable to• adverse economic limiting our and flexibility industry in planning for, and reacting• to, changes putting in us at a• competitive restricting disadvantage our ability compared to to obtain additional financingOur to ability to satisfy fund our financialoperating obligations performance depends on and our economic, future other financial, factors, competitive, many and of whichmay are not beyond generate our sufficient control.may Our cash business not flow in be the availablethese future obligations to or and to provide financings successfully execute sufficient our business net strategy. proceeds to meet by operating activities to pay interest, principal amounts, and Our capital commitmentsimportant and consequences including: financing obligations• could requiring have us to dedicate a substantial portion of cash provided FINANCIAL RISKS CAPITAL COMMITMENTS, LIQUIDITY, DEBT, AND INTEREST PAYMENTS CLIMATE CHANGE Climate change isbusinesses, an including increasingly the important telecommunicationsclimate business. consideration change Failure in mitigation of and all business adaptation through efforts potential could disruption affectto our of our infrastructure, our and the operations, effects on damage the communitiesClimate we change serve. and thethrough environment evolving are drawing public more interest.are attention subject Many to evolving aspects and of increasinglyand stringent our local federal, provincial, operations environmental, health,Such and laws safety and lawsmatters regulations and such impose regulations. as requirementscorrective the with and release respect remedial of to actionproper substances concerning handling into such and releases, the managementconsiderations and environment, of and the more substances. stringent These lawsto evolving and increased regulations costs could for lead compliance andto rising costs of recognize utilities. Failure regulatory and scrutiny, or damage adequately to our reputation respond or brand. could result in fines, Advertising dollars typically migrateleaders in to their respective media markets and propertiesadvertising categories, budgets that particularly when are are tight.properties Our radio, may television, andperform. magazine not Advertisers continue basedecisions a performing on substantial ratings how partassociations and of and they readership their agencies. data currently magazine purchasing If generated readership by our levels industry decrease radiosales substantially, and volumes our television and advertising the ratingsadversely affected. rates or that we charge advertisers could be OUR MARKET POSITION IN RADIO, TELEVISION,MAGAZINE OR READERSHIP MIGRATING FROM CONVENTIONAL TO DIGITAL MEDIA Our Media businessaffected operates by inmedia, customers which many is migrating driving industries shiftsand from in that the mobile conventional quality can alternatives andshifting to accessibility be to of data digital conventional ourcompetition media. for advertising We focus revenue have fromsearch digital towards been engines, platforms, such social as has the networks, resulted and digital digital intelevision content advertising broadcasters alternatives, market. to dollars digitalon migrating platforms. conventional Increasing The over-the-air from broadcast impactOMNI, conventional networks, is such greater which as Citysubscription do and revenue. notaffected Our if have we Media are aconventional unsuccessful to results digital second in platforms. shifting could revenue advertising dollars be stream from adversely from direct-to-consumer subscription and free services), ashave well contributed as piracy, tohave this a trend. material adverse If effect on this our results decline of operations. continues, it could MANAGEMENT’S DISCUSSION AND ANALYSIS

INVENTORY OBSOLESCENCE certifying the proceeding as a national class action in Our inventories balance mainly consists of wireless devices and Saskatchewan. We have not recognized a liability for this mobile data devices, which generally have relatively short product contingency. lifecycles due to frequent new device introductions. If we cannot effectively manage inventory levels based on product demand, this CELLULAR DEVICES may increase the risk of inventory obsolescence. In July 2013, a class action was launched in British Columbia against providers of wireless communications in Canada and HIGHER DEVICE SUBSIDIES manufacturers of wireless devices. The class action relates to the Our wireless business model is based substantially on subsidizing alleged adverse health effects incurred by long-term users of the cost of subscriber devices, similar to other Canadian wireless cellular devices. The plaintiffs are seeking unspecified damages carriers. This model attracts customers and in exchange, they and punitive damages, effectively equal to the reimbursement of commit to a term contract with us. We also commit to a minimum the portion of revenue the defendants have received that can subsidy per unit with the supplier of certain smartphone devices. If reasonably be attributed to the sale of cellular phones in Canada. we are unable to recover the costs of the subsidies over the term of We have not recognized a liability for this contingency. the customer contract, this could have an adverse effect on our business, results of operations, and financial condition. OTHER CLAIMS There are certain other claims and potential claims against us. We LITIGATION RISKS do not expect any of these, individually or in the aggregate, to have a material adverse effect on our financial results. SYSTEM ACCESS FEE – SASKATCHEWAN In 2004, a class action was commenced against providers of wireless OUTCOME OF PROCEEDINGS communications in Canada under the Class Actions Act The outcome of all the proceedings and claims against us, (Saskatchewan). The class action relates to the system access fee including the matters described above, is subject to future wireless carriers charge to some of their customers. The plaintiffs are resolution that includes the uncertainties of litigation. It is not seeking unspecified damages and punitive damages, which would possible for us to predict the result or magnitude of the claims due effectively be a reimbursement of all system access fees collected. to the various factors and uncertainties involved in the legal In 2007, the Saskatchewan Court granted the plaintiffs’ application process. Based on information currently known to us, we believe it to have the proceeding certified as a national, “opt-in” class action is not probable that the ultimate resolution of any of these where affected customers outside Saskatchewan must take specific proceedings and claims, individually or in total, will have a material steps to participate in the proceeding. In 2008, our motion to stay adverse effect on our business, financial results, or financial the proceeding based on the arbitration clause in our wireless condition. If it becomes probable that we will be held liable for service agreements was granted. The Saskatchewan Court directed claims against us, we will recognize a provision during the period in that its order, in respect of the certification of the action, would which the change in probability occurs, which could be material to exclude customers who are bound by an arbitration clause from our Consolidated Statements of Income or Consolidated the class of plaintiffs. Statements of Financial Position. In 2009, counsel for the plaintiffs began a second proceeding OWNERSHIP RISK under the Class Actions Act (Saskatchewan) asserting the same claims as the original proceeding. If successful, this second class CONTROLLING SHAREHOLDER action would be an “opt-out” class proceeding. This second Rogers is a family-founded, family-controlled company. Voting proceeding was ordered conditionally stayed in 2009 on the basis control of Rogers Communications Inc. is held by the Rogers that it was an abuse of process. Control Trust (the Trust) for the benefit of successive generations of At the time the Saskatchewan class action was commenced in the Rogers family. The beneficiaries of the Trust are a small group 2004, corresponding claims were filed in multiple jurisdictions of individuals who are members of the Rogers family, several of across Canada, although the plaintiffs took no active steps. The whom are also directors of the Board. The trustee is the trust appeal courts in several provinces dismissed the corresponding company subsidiary of a Canadian chartered bank. claims as an abuse of process. The claims in all provinces other than As at December 31, 2018, private, Rogers family holding Saskatchewan have now been dismissed or discontinued. We have companies controlled by the Trust owned approximately 92% of not recognized a liability for this contingency. our outstanding Class A Shares (2017 – 91%) and approximately 10% of our Class B Non-Voting Shares (2017 – 10%), or in total 911 FEE approximately 27% of the total shares outstanding (2017 – 27%). In June 2008, a class action was launched in Saskatchewan against Only Class A Shares carry the right to vote in most circumstances. providers of wireless communications services in Canada. It involves As a result, the Trust is able to elect all members of the Board and allegations of breach of contract, misrepresentation, and false to control the vote on most matters submitted to a shareholder advertising, among other things, in relation to the 911 fee that had vote. been charged by us and the other wireless telecommunication providers in Canada. The plaintiffs are seeking unspecified damages and restitution. The plaintiffs intend to seek an order

66 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 67 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT recognize revenue; risks related to recognizing revenue under IFRS 15; system toaccurate; ensure and the inputs, processes,the five-step revenue and recognition model. outputs are CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES On January 1, 2018, werevenue adopted recognition IFRS accounting 15 system enabling andIFRS us implemented to a comply 15 new with requirements.additions and As modifications to areporting. Notably, our we result, internal have: controls we• over financial updated have made our significant policies• and augmented our procedures risk assessment related process to take to into• account how the implemented controls surrounding we our new revenue recognition • implemented controls designed to address risks associated with In Julymanagement and 2018, payroll system.system The we implementation has of the implementedcontrols resulted new and in a proceduresbenefits. enhancements new pertaining and to human other employee changesOther resources salaries to than and changes the in 2018 items that materiallymaterially described affected, affect, or our above, internal are controls reasonably over there likely financial to reporting. have been no report is includedStatements filed in on SEDAR our (sedar.com). 2018 AuditedAll internal Consolidated control systems, Financial however, nohave matter how inherent well designed, determined limitations, to be and effective canabout the even only preparation provide and reasonable presentation systems of assurance financial statements. that have been Management isadequate responsible internal controls over for financial reporting. establishingOur and internal control maintaining systemthe is Board designed to reasonable give assuranceprepared management and that and fairly our presented in financialthe accordance statements IASB. with IFRS are The as system issuedthat is by intended transactions to providefinancial are reasonable assurance records authorized, areassure assets the reliable. flow are of Management informationmonitors safeguarded, and also performance and communication our takes is and internal effective, control steps and procedures. to Management assessed the effectiveness of ourfinancial internal reporting control as over at Decemberset 31, out in 2018, the based Internal onby Control—Integrated the Framework the criteria (2013) Committee issued ofCommission Sponsoring (COSO), Organizations and of concludeddate. the that Our Treadway it wasunqualified independent effective opinion on at auditors, the that effectivenesscontrol KPMG of the over LLP, Company’s internal financial have reporting issued as of an December 31, 2018. This MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING CONTROLS AND PROCEDURES DISCLOSURE CONTROLS AND PROCEDURES We conducted an evaluation ofoperation the effectiveness of of the designDecember and our 31, disclosureparticipation 2018, of controls our underOfficer and management, including and the procedures thepromulgated Chief Chief as supervision under Financial Executive the at andamended. US Officer, Based Securities on this with pursuant Exchange evaluation, ourChief Act Chief to Financial the Executive of Officer Officer and 1934, Rule concludedprocedures that as were 13a-15 our effective at disclosure that controls date. and MANAGEMENT’S DISCUSSION AND ANALYSIS

Regulation In Our Industry Our business, except for the non-broadcasting operations of television service ordered by the CRTC and introduced in 2016, as Media, is regulated by two groups: the CRTC believes there is enough competition for these services • ISED Canada on behalf of the Minister of Innovation, Science provided by other carriers to protect the interests of users and has and Economic Development; and forborne from regulating them. Regulations can and do, however, • the CRTC, under the Telecommunications Act and the affect the terms and conditions under which we offer these Broadcasting Act (Canada) (Broadcasting Act). services.

Regulation relates to the following, among other things: SPECTRUM LICENCES • wireless spectrum and broadcasting licensing; ISED Canada sets technical standards for telecommunications • competition; under the Radiocommunication Act (Canada) • the cable television programming services we must, and can, (Radiocommunication Act) and the Telecommunications Act. It distribute; licences and oversees: • wireless and wireline interconnection agreements; • the technical aspects of the operation of radio and television • rates we can charge third parties for access to our network; stations; • the resale of services on our networks; • the frequency-related operations of cable television networks; • roaming on our networks and the networks of others; and • ownership and operation of our communications systems; and • spectrum for wireless communications systems in Canada. • our ability to acquire an interest in other communications systems. ROYALTIES The Copyright Board of Canada (Copyright Board) oversees the Regulatory changes or decisions can adversely affect our administration of copyright royalties in Canada and establishes the consolidated results of operations. royalties to be paid for the use of certain copyrighted works. It sets Our costs of providing services may increase from time to time as the copyright tariff royalties that Canadian broadcasting we comply with industry or legislative initiatives to address undertakings, including cable, radio, television, and specialty consumer protection concerns or Internet-related issues like services, pay to copyright collectives. copyright infringement, unsolicited commercial e-mail, cybercrime, and lawful access. BILLING AND CONTRACTS Manitoba, Newfoundland and Labrador, Ontario, and Quebec Generally, our spectrum and broadcast licences are granted for a have enacted consumer protection legislation for wireless, wireline, specified term and are subject to conditions for maintaining these and Internet service contracts. This legislation addresses the licences. Regulators can modify these licensing conditions at any content of such contracts, the determination of the early time, and they can decide not to renew a licence when it expires. If cancellation fees that can be charged to customers, the use of we do not comply with the conditions, a licence may be forfeited or security deposits, the cancellation and renewal rights of customers, revoked, or we may be fined. the sale of prepaid cards, and the disclosure of related costs. Rogers is also currently subject to the CRTC Wireless Code and the The licences have conditions that require us, amongst other things, CRTC Television Service Provider Code of Conduct that became to comply with Canadian ownership restrictions of the applicable effective on September 1, 2017. See “CRTC Wireless Code” for legislation. We are currently in compliance with these conditions. If more information. we violate the requirements, we would be subject to various penalties, including the loss of a licence in extreme cases. FOREIGN OWNERSHIP AND CONTROL Cable, wireless, and broadcasting licences generally cannot be Non-Canadians can own and control, directly or indirectly: transferred without regulatory approval. • up to 33.3% of the voting shares and the related votes of a holding company that has a subsidiary operating company licenced under the Broadcasting Act, and CANADIAN BROADCASTING AND • up to 20% of the voting shares and the related votes of the TELECOMMUNICATIONS OPERATIONS operating licensee company may be owned and controlled The CRTC is responsible for regulating and supervising all aspects directly or indirectly by non-Canadians. of the Canadian broadcasting and telecommunications system. Our Canadian broadcasting operations – including our cable Combined, these limits can enable effective foreign control of up television systems, radio and television stations, and specialty to 46.7%. services—are licensed (or operated under an exemption order) and The chief executive officer and 80% of the members of the Board of regulated by the CRTC under the Broadcasting Act. Directors of the operating licensee must be resident Canadians. The CRTC is also responsible under the Telecommunications Act There are no restrictions on the number of non-voting shares that for the regulation of telecommunications carriers, including: may be held by non-Canadians at either the holding company or • Wireless’ mobile voice and data operations; and the licensee company level. Neither the Canadian carrier nor its • Cable’s Internet and telephone services. parent may be otherwise controlled in fact by non-Canadians. Subject to appeal to the federal Cabinet, the CRTC has the Our cable and telecommunications retail services are not subject to jurisdiction to determine as a question of fact whether a given price regulation, other than our affordable entry-level basic cable licensee is controlled by non-Canadians.

68 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 69 | . ROGERS COMMUNICATIONS INC. Broadcasting Act (Canada) Phase-out of the local voice and the CRTC determined that the current 2018 ANNUAL REPORT GOVERNMENT OF CANADA LAUNCHES REVIEW OF TELECOMMUNICATIONS AND BROADCASTING ACTS On June 5,Heritage 2018, Minister ISEDTelecommunications Act Canada (Canada) Joly MinisterA seven-person Bains announced expert panel and will conductattempt a the Canadian review. The to review joint will instruction modernize that review the the exercise legislative of be framework guided the by with the specific principles of net CANADA’S ANTI-SPAM LEGISLATION Canada’s anti-spamDecember 15, 2010 legislation and cameof into force was on such Julycomputer 1, legislation passed 2014. programs Sections or related2015. software into A came to private into right lawthe the force of legislation action on effective unsolicited that on January July wasare 15, 1, in to installation compliance 2017 come with was this into of legislation. deferred. place We under believe we MANDATORY NOTIFICATION OF PRIVACY BREACHES On June 18, 2015, Billlaw, S-4 – and the DigitalInformation Privacy made Act was a Protection passed into amendment number that and introduced ofcame mandatory Electronic into amendments breach force on notification Documents November toimpacted rules 1, 2018. individuals Act. the Businesses must and nowprivacy Personal the notify The breach federal where it Privacy isa Commissioner reasonable real to risk of believe of the a significantcompleted breach harm creates to as the individual. soonoccurred. Notification as must Businesses be feasible mustprovide after these also it records keep to isThe the records Privacy determined Privacy Commissioner may Commissioner of a also upon launchbased breach breaches request. an on investigation the and or information audit containedprovide in the notification breach or report. maintain Failure$100,000 to records per could violation. result in fines up to $115 million local servicecompany high-cost subsidy serving for areas would incumbentincrements be between local phased 2019 out and telephone in 2021 such sixbe that equal eliminated the by voice the subsidy end will of 2021. $200 million, with thecontingent incremental on increases a in review yearsbeing of four the managed and fund efficiently five in andFunds the is will third achieving year be its to generatedcurrently intended ensure applied by purpose. it on extending wireline is and a wirelessInternet voice percent and revenues of to texting include revenuepercent revenue. levy charge at The the CRTC $200 millionapproximately noted annual the cap same that in as year the the current five revenue would revenue percent be charge. Designated high-costapproximately $115 local million0.60% in levy subsidies voice on in wirelineoriginal 2016 2017 and decision, serving wireless the collected CRTC voicevoice by determined subsidy services that areas a will the revenue. be current phased In local Internet out, received except its access where service reliable broadband iswould unavailable, occur and in a 2017 follow-upthe to subsidy. proceeding establish the specifics of the phase-outAfter the of 2017 follow-up proceeding, onRegulatory June 26, Policy 2018, in CRTC Telecom service 2018-213, subsidy regime, . , on December 21, 2016 Modern telecommunications services – The Development of the Commission’s Broadband , on September 27, 2018. A call for applications will occur in and Internet access servicespeeds of subscribers at least should 50to Mbps be download and able subscribe 10 Mbps toallowance upload, to and by access 2021, a withreceiving service such the service by remaining offering 2031; 10% and of with the population anbe available unlimited not only in data as Canadian many homes major and transportation businesses, roads but as on possible in Canada. path forward for Canada’s digital economy CRTC REVIEW OF BASIC TELECOMMUNICATIONS SERVICES Aftertelecommunications an servicesmeaningfully Canadians in require extensiveensuring the to the digital availability participate services economy of to proceeding and all affordable Canadians,Policy the basic the CRTC telecommunications CRTC 2016-496, CRTC’s released examining role Telecom Regulatory in which • fixed and mobile wireless voice services. To assist inremote locations, extending the broadband CRTCbroadband into stated funding that under-served itincluding rural guiding mechanism. would principles, and establish fund The a design,were and new assessment addressed specifics criteria, inDecision of on these a items the was follow-upCRTC released in 2018-377, proceeding fund, Telecom Regulatory Policy duringFund 2017. The 2019 with a maximum fundingof level implementation. of $100 This million level inover will the first increase year the by $25 following million annually four years to reach an annual cap of To help attain the universal serviceshift objective, the the CRTC will focus beginservices to of to itsfollowing broadband regulatory services which frameworks Internet form from partare access of hereby wireline the basic universal services. voice service telecommunicationsof objective services As subsection within 46.5(1) of the such, the meaning Telecommunications• Act: the fixed and mobile wireless broadband Internet access services; The CRTC set asurban its areas universal as service wellvoice objective as services that in and Canadians, ruralfixed in broadband and and Internet remote mobile areas, accessachievement have wireless services, of access networks. on this to Tocriteria, both objective, including: measure the the CRTC• has successful 90% established several of Canadian residential and business fixed broadband • the latest generally deployed mobile wireless technology should Pursuant toregulations, the thetelecommunications carriers Telecommunications such as sameno Wireless, Act except requirement that that there rulesCanadian. and is We the believe associated chief alsoforeign we ownership executive and are control requirements. in officer apply compliance be withOn a June the 29, to 2012, foregoing resident Bill C-38passed amending the Canadian into Telecommunications Act law.companies The amendments exempttelecommunications with telecommunications market measuredinvestment by less restrictions. Companies revenue thattheir from are than foreign successful market intelecommunications growing market shares 10% revenue otheror than in acquisitions by will continue of way to excess of be exempt merger from of the restrictions. total 10% Canadian of total Canadian MANAGEMENT’S DISCUSSION AND ANALYSIS

neutrality. It will examine support mechanisms for creation, 2019. In its Spectrum Outlook 2018 to 2022, also released on production, and distribution of Canadian content, with an June 6, 2018, ISED Canada anticipates that 3500 MHz spectrum emphasis on exploring how all players (including over-the-top will be released for flexible use in late 2020 following an auction in services) can contribute. The review will also seek to address how to 2020. best promote competition and affordability for Internet and mobile wireless services. Rogers and others filed their written submissions WHOLESALE DOMESTIC WIRELESS ROAMING RATES with the panel on January 11, 2019. An interim report is anticipated TERMS & CONDITIONS AND RATES in June 2019 with final recommendations due by January 31, 2020. On May 5, 2015, the CRTC released Telecom Regulatory Policy 2015-177, Regulatory framework for wholesale mobile wireless WIRELESS services. The CRTC determined it is necessary to regulate the rates that Rogers and two of its competitors (Bell and Telus) charge other 600 MHZ SPECTRUM LICENCE BAND Canadian wireless carriers for domestic GSM-based wholesale On August 14, 2015, ISED Canada released a decision regarding roaming. The CRTC directed Rogers, Bell, and Telus to each file the reallocation of spectrum licences in the 600 MHz band for proposed cost-based tariffs for wholesale roaming on November 4, mobile services. Canada will reallocate the same amount of 2015. Pending its final determination on the proposed tariffs, the spectrum licences as the US, following the US 600 MHz incentive CRTC approved, on an interim basis, a maximum rate for each of auction that concluded in 2017. TV channels currently using the GSM-based voice, text, and data wholesale roaming provided by 600 MHz band spectrum that will be auctioned for mobile services Bell, Rogers, and Telus across their respective networks to other will be given a new channel in the new allotment plan and will be Canadian wireless carriers. These rates were replaced when the provided with a minimum of 18 months to complete the transition. CRTC gave interim approval to the proposed cost-based tariffs filed Certain Rogers over-the-air TV channels will need to be by the carriers on December 3, 2015 and made these interim rates transitioned. effective November 23, 2015. The CRTC process to establish final rates extended into 2018. On March 28, 2018, ISED Canada released its Technical, Policy and Licensing Framework for Spectrum in the 600 MHz Band, The CRTC further determined that it is not appropriate to mandate establishing the rules and timelines for the 600 MHz spectrum wholesale MVNO access. licence auction. The framework set aside 30 MHz (of the available Finally, the CRTC determined that the regulatory measures 70 MHz) for carriers other than the three national carriers, Rogers, establishedinthedecisionwouldremaininplaceforaminimumof Bell, and Telus. The auction will commence on March 12, 2019. five years, during which time the CRTC will monitor competitive conditions in the mobile wireless market. 3500 MHZ SPECTRUM LICENCE BAND On March 22, 2018, the CRTC released Telecom Order 2018-99, In December 2014, ISED Canada released its policy changes to the Wholesale mobile wireless roaming service tariffs—Final rates, 3500 MHz spectrum band. Rogers has a 50% interest in the establishing the final wholesale tariffs that Rogers, Bell, and Telus Inukshuk Wireless Partnership which holds between 100-175 MHz may charge any of the non-national carriers for roaming. The final of 3500 MHz spectrum in most major urban markets in Canada. rates were made retroactive to May 5, 2015. This decision does not The 3500 MHz band will be reallocated for mobile services (it is have a material impact on our financial results. currently only licensed for fixed wireless access in Canada). The band will eventually be relicensed on a flexible-use basis whereby On July 20, 2017, prompted by Order in Council P.C. 2017-0557, licensees will be permitted to determine the extent to which they the CRTC initiated a proceeding (Telecom Notice of Consultation will implement fixed and/or mobile services in the band in a given CRTC 2017-259, Reconsideration of Telecom Decision 2017-56 geographic area. regarding final terms and conditions for wholesale mobile wireless roaming service) to reconsider its earlier decision maintaining the On June 6, 2018, ISED Canada released its Consultation on integrity of domestic roaming agreements and instead consider Revisions to the 3500 MHz Band to Accommodate Flexible Use expanding the scope of the wholesale roaming regime to explore and Preliminary Consultation on Changes to the 3800 MHz Band. innovative business models and technological solutions that could The 3500 MHz band is viewed as key spectrum to support 5G result in more meaningful choices for Canadian consumers, technologies. In its consultation documents, ISED Canada especially those with low incomes. The specific issue was to proposed two options for claw back of existing spectrum licences: reconsider the exclusion of public Wi-Fi networks from the Option 1 – For each licence area, existing licensees would be definition of ‘home network’ that disqualifies such networks from issued flexible-use licences for one-third of their current spectrum roaming rights. The proceeding was to consider whether the holdings rounded to the nearest 10 MHz, with a minimum of 20 impact on investment could be mitigated by imposing conditions, MHz. such as ensuring that roaming by customers of providers who offer service primarily over Wi-Fi would be incidental rather than Option 2 – For each licence area, existing licensees would be permanent by, for example, limiting roaming in amount, subjecting issued flexible-use licences for a fixed amount of spectrum. Any roaming services to a different tariffed wholesale rate, or both. licensee that holds 50 MHz of spectrum or more would be licensed On March 22, 2018, the CRTC released Telecom Decision 2018-97, for 50 MHz; all other licensees would be licensed for 20 MHz. Reconsideration of Telecom Decision 2017-56 regarding final terms Rogers and others filed their comments on the consultation and conditions for wholesale mobile wireless roaming service.The document on July 12, 2018. Reply comments were filed on CRTC maintained its policy of facilities-based competition, while August 10, 2018. A decision is anticipated in the first quarter of confirming its original decision in Telecom Decision 2017-56,

70 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 71 | ,theCRTC ROGERS COMMUNICATIONS INC. Regulatory framework for , released in May 2015, the CRTC 2018 ANNUAL REPORT Review of mobile wireless services broadcasting certificates mustwhere share technically towers feasible, at and commercial rates; antenna and sites, arbitration according to ISED Canada arbitration rules will begin. initiated its five-yearwireless review market and to to determine examine whetherto further improve the action choice is and required state affordability forseeking of Canadians. The the comments CRTC is mobile also onnetwork operators its should have preliminaryof mandated the access national view wireless to providers that theare (Rogers, able Bell, networks to mobile and establish Telus) themselves until virtual inbelookingaheadtothefutureofmobilewirelessservicesin they the market. Finally, the CRTCCanada, will and, inneeded particular, to facilitate at thesuch whether deployment as small-cell of regulatory sites. 5G measures network infrastructure, are PROPOSED POLICY DIRECTION TO THE CRTCTELECOMMUNICATIONS ON On February 26,Economic 2019, Development Canada the tabled Minister aa Proposed of Order Direction Issuing Innovation,Telecommunications Science to Policy and Objectives theAffordability, to Consumer Promote CRTC Interests Competition, signals the on and government’s intention Innovation. to Implementingcompetition, require The the affordability, CRTC consumer Direction to the interests, consider andtelecommunications decisions innovation Canadian and in to its demonstratethose to decisions Canadians that in it has done so. CRTC REVIEW OF MOBILE WIRELESS SERVICES On February 28,CRTC 2019, through 2019-57, Telecom Notice of Consultation TOWER SHARING POLICY In March 2013,Mandatory ISED Roaming Canadaconcluding released and a Revised consultation Antenna initiated Frameworksrules in for for 2012. tower Tower and It site setsof and sharing, the out among tower other the and Site things. site current The sharing• key rules Sharing, are: terms all holders of spectrum• the timeframe licences, for negotiating agreements is radio 60 days, after which licences,In Telecom Regulatory and Policywholesale 2015-177, mobile wireless services determined thatwholesale it tariffs for woulddetermined tower that and not its existing site powersaddress sharing. mandate and tower and At processes site are or the sharing sufficientconditions. disputes same to related require As to time, rates, it a terms, general established and result, by carriers ISED mayintervene Canada, in use the or event the that they tower and arbitration may site sharing process request negotiations fail. the CRTC to all newly purchased devices mustday be forward. provided The unlocked CRTC fromplans also (multi-line that plans), determined the that accountone for holder must, family who by or default, consents be shared beyond the to data the overagerespectively). established and Wireless data capsaccount roaming holders service to charges authorize ($50 other providersto users consent on and to may, a additional family charges. or $100all The however, shared CRTC instances, plan also the per allow made caps clearthe apply that number in month, on of a devices, perthe for account account. multi-line basis, plans regardless and of individual lines on ), the CRTC ). The CRTC determined that as of Regulatory framework for wholesale mobile , would start by March 2019. The CRTC further , to exclude public Wi-Fi networks from the definition of Lower-cost data-only plans for mobile wireless services any agreement that couldCanada will lead review to the agreement athat as could prospective though arise the from transfer. it licence ISED has transfer been made. not allow any that resultreduced in competition. “undue Decisions spectrum will concentration” bebasis and made and will on be a issued case-by-case publicly to increase transparency; and December 1, 2017, all individual andcustomers small will business have wireless the service right tomobile have devices their unlocked, cellular free phones of and charge, other upon request. In addition, In June 2013,Code the imposes CRTC several issuedmaximum obligations its contract term on Wireless length, roaming wireless Code. billrequirements, caps, carriers, The and device unlocking contract including Wireless summaries. Itdevice also subsidies lays and out the earlycustomer rules cancellation for cancels fees. Under aoutstanding the contract code, balance early, if of a decreases carriers the by can device an only subsidy24 equal charge they amount months. received, the every This which two month effectively years. over makes no the more maximum than contractOn June length 15, 2017, the CRTCreview released of its the decision CRTC on Wireless the Codein three-year of Conduct December that came 2013 intoReview effect (Telecom of Regulatory the Policy Wireless CRTC Code 2017-200, CRTC WIRELESS CODE • licensees must ask for a review within 15 days of entering into In JuneTransfers, 2013, ISED DivisionsLicences Canada and for released Commercial Subordinateout Mobile Framework the Spectrum. criteria Licensing Relating ISED The Canadause to of Framework will consider lays and when Spectrum theprospective processes transfers that it it could will ariseand from reviews other purchase agreements. or Key sale items spectrum options to• note are ISED that: licence Canada will review transfers, all spectrum including transfer requests, and will TRANSFERS, DIVISIONS, AND SUBORDINATE LICENSING OF SPECTRUM LICENCES initiated a new public proceeding2018-98, (Telecom Notice of Consultation Wholesale mobile wireless roamingconditions service tariffs – Final terms and networks. The CRTC also announced thatwireless the five-year wholesale review of the Policy regime 2015-177, establishedwireless in services Telecom Regulatory approved the plans proposedthat the by introduction Rogers, of Bell,in these and addressing lower-cost a Telus, data-only previously stating plans identifieda gap will variety in assist the of market new bypreviously plans bringing available, to with the market aboth within a mix 90 prepaid of days and pricesnetworks. that postpaid and were basis, not data and on capacities, both on the 3G and LTE requiring Rogers, Bell, andonly Telus plans to by file April proposedfiled 23, lower-cost amended 2018. data- proposals Rogers, on September Bell, 10, and 2018. TelusOn subsequently December 17,Lower-cost 2018, data-only in plans Telecom for mobile Decision wireless CRTC services, 2018-475, ‘home network’ and not mandate wholesale access to wireless MANAGEMENT’S DISCUSSION AND ANALYSIS

CABLE providers, such as resellers. The CRTC determined that wholesale high-speed access services, which are used to support retail DIFFERENTIAL PRICING RELATED TO INTERNET DATA competition for services, such as local phone, television, and PLANS Internet access, would continue to be mandated. The provision of On April 20, 2017, the CRTC released Telecom Regulatory Policy provincially aggregated services, however, would no longer be CRTC 2017-104, Framework for assessing the differential pricing mandated and would be phased out in conjunction with the practices of Internet service providers, setting out the evaluation implementation of a disaggregated service with connections at criteria it will apply to determine whether a specific differential telephone company central offices and cable company head-ends. pricing practice complies with subsection 27(2) of the The requirement to implement disaggregated wholesale high- Telecommunications Act on a case-by-case basis, as follows: speed access services will include making them available over • the degree to which the treatment of data is agnostic (i.e., data is fibre-to-the-premises (FTTP) access facilities. Regulated rates will treated equally regardless of its source or nature); continue to be based on long-run increment cost studies. • whether the offering is exclusive to certain customers or certain On September 20, 2016, the CRTC released Telecom Decision content providers; CRTC 2016-379, Follow-up to Telecom Regulatory Policy 2015-326 • the impact on Internet openness and innovation; and – Implementation of a disaggregated wholesale high-speed access • whether there is financial compensation involved. service, including over fibre-to-the premises access facilities, Of these criteria, the degree to which data is treated agnostically will addressing the technical implementation of new, disaggregated, generally carry the most weight. The overriding expectation is that all high-speed access TPIA, a service that will provide access to FTTP content and applications will be treated in a neutral manner. Zero- facilities as ordered in the CRTC’s July 22, 2015 ruling. The decision rating of account management functions (e.g., monitoring of Internet is consistent with the positions submitted by Rogers in our filings. data usage or the payment of bills online) will generally be permitted. Proposed tariffs and supporting cost studies for the new service were filed on January 9, 2017, with further information filed later in WHOLESALE INTERNET COSTING AND PRICING 2017 and 2018. A decision on final rates is anticipated in early On March 31, 2016, the CRTC released its decision on the review 2019. of costing inputs and the application process for existing wholesale high-speed access services that provide for a single provincial point CRTC REVIEW OF LOCAL AND COMMUNITY of interconnection, but which are not available over FTTH access PROGRAMMING facilities (Telecom Decision CRTC 2016-117, Review of costing On June 15, 2016, the CRTC released Broadcasting Regulatory inputs and the application process for wholesale high-speed Policy CRTC 2016-224, Policy framework for local and community access). The CRTC determined that wholesale telecom rates paid television. The CRTC created a new model for BDU contributions to by competitive telecom providers were no longer appropriate, and Canadian programming that took effect on September 1, 2017. required all wholesale high-speed access service providers to file Annual contributions will remain at 5% of annual gross new cost studies with proposed rates for final approval. The CRTC broadcasting revenues; however, of that amount, in all licensed further determined that all wholesale Internet rates that were cable systems, up to 1.5% (rather than the previous 2%) can be currently approved were to be made interim as of the date of the used to fund community channel programming. Of this revenue, decision. The CRTC will assess the extent to which, if at all, 0.3% must now go to a newly-created Independent Local News retroactivity will apply when new cost studies are submitted in Fund for independently-owned local TV stations, and the remaining support of revised wholesale high-speed access service rates. On funding will continue to go to the Canada Media Fund and June 30, 2016, we filed our new cost studies with the CRTC, which independent production funds. This decision provides the flexibility detailed our proposed rates. for BDUs that operate community channels in large markets (Montreal, Toronto, Edmonton, Calgary, and Vancouver) to now On October 6, 2016, the CRTC issued Telecom Order 2016-396, direct their community channel revenues from those markets to Tariff notice applications concerning aggregated wholesale high- fund either community channel programming in smaller markets, speed access services – Revised interim rates, significantly reducing or to fund local news on TV stations (such as CityTV, in the case of existing interim rates for the capacity charge tariff component of Rogers). Rogers has closed its Toronto community channels and wholesale high-speed access service pending approval of final redirected these revenues. rates. The interim rate reductions took effect immediately. The CRTC will assess the extent to which, if at all, retroactivity will apply when wholesale high-speed access service rates are set on a final TELEVISION SERVICES DISTRIBUTION basis. The process to set final rates has concluded and a decision is In November 2014, the CRTC released its first decision arising from anticipated in early 2019. the Let’s Talk TV hearing ordering the elimination of the 30-day cancellation provision for cable, Internet, and phone services, effective January 23, 2015. CRTC REVIEW OF WHOLESALE WIRELINE TELECOMMUNICATIONS SERVICES On January 29, 2015, the CRTC released decisions requiring local On July 22, 2015, the CRTC released its decision on the regulatory stations to continue over-the-air transmission under the same framework for wholesale wireline services (Telecom Regulatory regulatory regime currently in place and maintaining simultaneous Policy 2015-326, Review of wholesale wireline services and substitution requirements, except for the NFL Super Bowl, associated policies), determining which wireline services, and under beginning in 2017. In a related decision released the same day, the what terms and conditions, facilities-based telecommunications CRTC found that it would be an undue preference under the carriers must make available to other telecommunications service Telecommunications Act for a vertically integrated company that

72 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 73 | , stating that a hearing ROGERS COMMUNICATIONS INC. Broadcasting licence renewals of Call for comments on the Governor , the CRTC renewed Rogers’ Broadcasting 2018 ANNUAL REPORT Licence renewal of broadcasting distribution , renewing Rogers’ BDU licences from December 1, ) to report on the distribution model or models of CRTC PROCEEDING ON FUTURE PROGRAMMING DISTRIBUTION MODELS On October 12, 2017,1195, prompted the by Order CRTC inConsultation initiated Council CRTC 2017-359, P.C. a 2017- proceedingin Council’s (Broadcasting request for Notice a reportmodels of on future programming distribution programming that are likely towhom exist Canadians in the will future; access how thatwhich and programming; these through and models the will extentcapable ensure to of a supporting vibrantdistribution domestic the of market Canadian continued that programming, creation,including is in both production, original official and entertainment languages, The and report information wasPhase due programming. no I later andFebruary than 13, Phase 2018, June respectively. 1, II 2018. submissions RogersOn on filed December its May 1,programming distribution 30, models 2017 requested by 2018, and theSeptember government 2017 in the through Orderreport CRTC proposes in new Council issued tools P.C.the and 2017-1195. production its regulatory and The approaches promotion to reportby of support audio and on and for video Canadians. future content made The report will inform the government’s ROGERS CABLE TV LICENCE RENEWALS On May 24,Consultation 2016, CRTC the 2016-197, terrestrial CRTC broadcasting released distributionexpire Broadcasting undertakings in Notice 2016; (BDUs) implementation of of thatreview certain of conditions will practices of licence inpackaging and regard requirements to for all the BDU small licensees will basic be service held and in flexible considerationBDUs, of the including licence renewalSeptember Rogers. applications 7, of 2016, The reviewed theregard hearing, practices of which to all BDUrequirements commenced licensees described the in above on that2016. small came into basic effect on March serviceOn 1, November 21, and 2016, theCRTC CRTC released flexible Broadcasting 2016-458, Decision packaging undertakings – Review of practicesand relating to the small flexible basicrequirements service packaging2016 options to November 30, 2017. and Inwhat the it decision, called imposition the a CRTC set established choice of best for of practices Canadians for and BDUs thatpractices, stated various serve that including to it how promote would BDUsservice monitor promote and all and pick-and-pay of offer and these theany small necessary package small remedial options, basic action and whenlicences will it for take examines BDUs the again renewal in of2017 2017 the for licence a renewal full renewalcable hearing term. licence that received Prior an to occurred administrative the extension in to May October, 31,On 2018. Rogers’ August 2,Rogers 2018, – indistribution Broadcasting Licence undertakings Decision renewal CRTCDistribution 2018-265, Undertaking for licences in variousfor Ontario a terrestrial and Atlantic fullconsistent broadcasting Canada with Rogers’ seven-year application. licence term with conditions substantially offers a Mobilemonthly TV wireless data service caps to and usageto exempt charges its generally wireless this service. applicable service from standard On March 19, 2015,related the CRTC to releaseddistributors the its to third offer Let’s of customers itsconsisting an Talk only decisions of option Canadian TV for localnational a channels mandatory proceeding. small (local services, radio basic community The is service channels, optional), and CRTC provincial and, legislature should ordered March 1, they 2016. wish,capped The US at retail 4+1 rate $25adopted networks for phased-in per requirements this beginning for selling month entry-level“à channels la service to (excluding carte” customers and will as equipment). parttier be of must The “pick-packs”. be All offered CRTC channels on abovepriced an the basic packages à la by cartemust March basis or be 1, in offered 2016. smaller, in reasonably continue By both forms. December to As 1, a offerpackages. BDU, 2016, we The our they will CRTC be existing willrule permitted so basic also to that revise service consumers its willreceive, and a existing have majority to “preponderance” of programming be Canadian services. offered, but willThe not CRTC have also to proposed(formerly several changes the to Vertical the Integrationother Wholesale (VI) Code Code) matters, addressing,guarantees. amongst All penetration-based licensed programmersto rate and comply BDUs with will cards beJanuary the 22, required Wholesale 2016. and Code, which minimum cameThe into March effect 19 on foreign decision services also authorizedrequirements addressed for that rules foreign distribution services for in makela their distribution carte” Canada, channels and of available including in “à “pick-packs”and or in abide smaller by pre-assembledservices packages the and Wholesalebuy-through Code. rules independent for Access multicultural services services, were rules also addressed. for channelOn VI-owned March 26, 2015, packaging, in theCRTC final and announced decision related plans to Let’s to(TVSP) Talk establish TV, the a Code Televisionrelationship of Service between TVSPs Provider and Conduct theirconsumers customers as to to well complain as govern to toTelecommunications allow Services the certain about Commissioner their for2016, providers. aspects the Complaints On CRTC January for of 8, issuedcame the the into final effect version on September ofCode, 1, the the 2017. TVSP Commissioner Upon Code, for launchServices which of Complaints the changed for TVSP Telecommunications itsTelecom-television Services name (CCTS). to Thisnew Commission decision requirements also for related introduced with to Complaints disabilities for the for both BDUs provision and broadcasters. of serviceOn March to 1, 2016, persons the firstmonth phase of (excluding the CRTC’s equipment) smallinto basic $25 television effect. per Effective service Marchconsisting mandate 1, of Canadian 2016, came local we channels,community offer national mandatory a and services, small provincial basicnetworks. legislature service We channels, also andspecialty offer the and premium smaller, US channels. On 4+1 reasonably Decemberoffering 1, all priced 2016, specialty we and packages began premiumas of channels well. on an “à la carte” basis MANAGEMENT’S DISCUSSION AND ANALYSIS

review of the Broadcasting Act (Canada) and Telecommunications over-the-air ethnic OMNI television licences were renewed for a Act (Canada). three-year period in this Broadcasting Decision.

In Broadcasting Decision CRTC 2017-152, OMNI Regional – MEDIA National, multilingual multi-ethnic discretionary service, released the same day, the CRTC also approved our application seeking a new COPYRIGHT RETRANSMISSION OF DISTANT SIGNALS licence to operate a discretionary service called OMNI Regional, Pursuant to section 31(2) of the Copyright Act, television service which would operate pursuant to a section 9(1)(h) order, granting it providers are permitted to retransmit programming within distant mandatory carriage on the basic service with a regulated affiliation over-the-air television signals as part of a compulsory licensing fee of $0.12/subscriber/month for a three-year term. The CRTC regime. Rates for the distribution of the programming are further issued a call (Broadcasting Notice of Consultation 2017-154, established through negotiation or set by the Copyright Board. Call for applications for a national, multilingual multi-ethnic Distributors and content providers were unable to agree on a new television service offering news and information programming)for rate for the distribution of distant signals after the expiration of the competing applications to determine whether OMNI should retain current agreement in 2013. A proceeding was initiated by the its 9(1)(h) designation after three years or whether the designation Copyright Board, which began on November 23, 2015. The should be granted to another applicant. proceeding continued into 2016 and 2017; a decision was rendered on December 18, 2018. On August 14, 2017, the Governor in Council, on the advice of the Minister of Canadian Heritage through Order in Council P.C. 2017- The decision increased the rate paid by BDUs by approximately 8% 1060, directed the CRTC to reconsider its group licence renewal for 2014, a further 7.5% for 2015, and a further 2.5% for 2016, with decisions issued May 15, 2017 for large television broadcasters 2017 and 2018 held constant at the 2016 rate. The impact of these that, among other changes, lowered the amount that some major additional costs is not material. broadcasters must spend on Programs of National Interest. The CRTC is to “consider how it can be ensured that significant LICENCE RENEWALS contributions are made to the creation and presentation of In a proceeding initiated by Broadcasting Notice of Consultation programs of national interest, music programming, short films, and CRTC 2016-225, Renewal of television licences held by large English- short-form documentaries.” and French-language ownership groups, released June 15, 2016, Rogers sought renewal of our group-based licences (six City On August 30, 2018, in Broadcasting Decision CRTC 2018-335, over-the-air English stations, Sportsnet 360, VICELAND, G4Tech, Reconsideration of licence renewal decisions for the television Outdoor Life, FX, and FXX), our five over-the-air ethnic OMNI services of large English-language private ownership groups,the television licences, and our mainstream sports licences (Sportsnet CRTC determined that Rogers’ PNI expenditure requirements will and Sportsnet One). We also sought approval of an application be maintained at 5% of the previous broadcast year’s gross seeking a new licence to operate a discretionary service called OMNI revenues as determined in the original decision. Rogers and other Regional, which would operate pursuant to a section 9(1)(h) order groups will be required to direct 0.17% of previous broadcast year’s granting it mandatory carriage on the basic service with a regulated gross revenues to support music programming. This amount may affiliation fee. be counted towards meeting the Canadian programming expenditure requirement. No additional expenditures were On May 18, 2017, the CRTC released Broadcasting Decision CRTC ordered for short-form content. The conditions of licence will apply 2017-151, Rogers Media Inc. – Licence renewals for English- until August 31, 2022, the end of the five-year licence term. language television stations, services and network, approving five- year renewals of our group-based licences. Five-year licence With regard to Broadcasting Notice of Consultation 2017-154 renewals were also approved for our mainstream sports services referenced above calling for competing applications to determine licences (Sportsnet and Sportsnet One) and our on-demand whether OMNI should retain its 9(1)(h) designation after three years service (Rogers on Demand). To coincide with the expiry date of or whether the designation should be granted to another the broadcasting licence for our new discretionary service, OMNI applicant, the CRTC oral hearing on the matter occurred in Regional, discussed below, the broadcasting licences for our five November 2018. A decision will be rendered in 2019.

74 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 75 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT FINANCIAL INSTRUMENTS The fair values ofcredit-adjusted our mark-to-market derivatives valuation. If are the recordedasset derivatives position using are (i.e. an in the an estimated counterparty owesfor Rogers), the the bank credit counterparty spread isdetermine added the estimated to credit-adjusted the value. risk-freein If discount the a rate derivatives liability to are position (i.e. Rogers owes the counterparty), our credit IMPAIRMENT OF ASSETS Indefinite-life intangible assetsand/or (including goodwill broadcast and licences)annual spectrum basis, are or more assessed oftenfinite-life if for events assets or impairment circumstances (including onother warrant, and intangible property, an assets) plantcircumstances are and assessed warrant. for equipmentgenerating impairment and unit The if (CGU) events involvescash significant recoverable or estimates such flows, amount asestimates future terminal differ of growth unfavourablyimpairment a in rates, charges that the could and decrease cash future, net income. we discount could rates. experience SEGMENTS If key We make significantsegments. These are judgments components that in engagefrom in which business determining activities they our mayoperating earn operating revenue results and are incurdecision makers regularly expenses, to for make reviewed which decisions aboutand by resources to to our be allocated assess chieffinancial component information operating is available. performance, and for which discrete USEFUL LIVES We depreciate the cost of property,estimated plant useful and lives equipment by over considering their industryspecific trends factors, and including company- changing technologiesfor and the expectations in-service periodour of certain estimates assets at ofchange, the to ensure time. useful they We match reassess lives thefrom anticipated life a annually, of the revenue-producing or technology happens perspective. more when quickly, If or circumstances might technological in have a change different toequipment, way, reduce which than could the anticipated, result estimated we infuture a life periods higher depreciation or of expense an in We property, monitor impairment plant and charge review and our to depreciationat write rates least and down once asset a useful the lives year value. previous and change them estimates. if theyestimates We in are net different income from prospectively. recognize our the effectCAPITALIZING DIRECT of LABOUR, OVERHEAD, AND changesINTEREST in Certain direct labour, overhead,the and acquisition, interest construction, costs development, associated ornetworks with improvement of are our capitalizedcapitalized to amounts property, are plantprojects calculated and that based equipment. are on The capitalper-hour estimated in rate. costs nature, of In anddevelopment are addition, and generally interest basedequipment. construction costs Capitalized on amounts of a are increase theresult capitalized certain cost in of a during the property, higher asset depreciation and expense plant in future periods. and FAIR VALUE We use estimates to determine theliabilities fair value of assumed assets acquiredinformation, and in including an informationestimates acquisition, from include key financial using assumptions markets.rates, such the as These and discount best terminal rates,flow growth attrition available analyses. rates for performing discounted cash REVENUE FROM CONTRACTS WITH CUSTOMERS Determining the transaction price The transactionenforceable price and to is which wethe expect the to goods be amount and entitled in servicesdetermine exchange of we for the have consideration transaction promisedcontract price that to by and our considering is business customer.particular the line We practices terms of business. of Discounts, that rebates,concessions, the refunds, are credits, price incentives, customary penalties,reflected within in the and transaction that price at other contract inception. similarDetermining the stand-alone items selling price and are transaction the price allocation of the The transaction price is allocated toon performance the obligations based relative stand-aloneservices selling in the prices contract. of Theprice the best is distinct evidence the goods of observable asells or price stand-alone that of good selling a or service goodsimilar separately or in service customers. similar when circumstances If and theobservable, to entity we a estimate stand-alone theaccount selling stand-alone reasonably selling price available priceconditions, entity-specific information is taking factors, and into relating not the class to of directly customer. theIn market determining the stand-alonebetween selling performance price, obligations weenforceable based allocate on amounts revenue expected toabove minimum which the Rogers isrevenue minimum as entitled. they enforceable are Any earned. amounts amounts are recognized as ESTIMATES CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS Management makes judgments, estimates,affect and how accounting assumptions policies that arein applied, the assets, amounts wedisclosure report liabilities, about revenue,changes and contingent in our expenses, assumptions, assetsbusiness including and those and plans related our toamounts liabilities. and our we related future record. cash Significant Actualestimates. flows, results could could be different materiallyThese from change these estimates the understanding are our critical resultsadditional of judgment to because operations. of our theassumptions We sensitivity used of business may in the methods need determining operationsexpense and the amounts. to asset, and use liability, revenue, and Other Information ACCOUNTING POLICIES MANAGEMENT’S DISCUSSION AND ANALYSIS

spread is added to the risk-free discount rate. The estimated credit- Restricted share unit (RSU) and deferred share unit (DSU) plans adjusted value of derivatives requires assessment of the credit risk We recognize outstanding RSUs and DSUs as liabilities, measuring of the parties to the instruments and the instruments’ discount the liabilities and compensation costs based on the awards’ fair rates. values, which are based on the market price of the Class B Non-Voting Shares, and recognizing them as charges to operating For all derivative instruments where hedge accounting is applied, costs over the vesting period of the awards. If an award’s fair value we are required to ensure that the hedging relationships meet changes after it has been granted and before the exercise date, we hedge effectiveness criteria. Hedge effectiveness testing requires recognize the resulting changes in the liability within operating the use of both judgments and estimates. costs in the year the change occurs. For RSUs, the payment amount is established as of the vesting date. For DSUs, the payment PENSION BENEFITS amount is established as of the exercise date. When we account for defined benefit pension plans, assumptions are made in determining the valuation of benefit obligations. JUDGMENTS Assumptions and estimates include the discount rate, the rate of future compensation increase, and the mortality rate. Changes to REVENUE FROM CONTRACTS WITH CUSTOMERS these primary assumptions and estimates would affect the pension Distinct goods and services expense, pension asset and liability, and other comprehensive We make judgments in determining whether a promise to deliver income. Changes in economic conditions, including financial goods or services is considered distinct. We account for individual markets and interest rates, may also have an impact on our pension products and services separately if they are distinct (i.e. if a product plan, as there is no assurance that the plan will be able to earn the or service is separately identifiable from other items in the bundled assumed rate of return. Market-driven changes may also result in package and if the customer can benefit from it). The consideration changes in the discount rates and other variables that could require is allocated between separate products and services in a bundle us to make contributions in the future that differ significantly from based on their stand-alone selling prices. For items we do not sell the current contributions and assumptions incorporated into the separately (e.g. third-party gift cards), we estimate stand-alone actuarial valuation process. selling prices using the adjusted market assessment approach. Below is a summary of the effect an increase or decrease in the primary assumptions and estimates would have had on our Determining costs to obtain or fulfill a contract accrued benefit obligation and pension expense for 2018. Determining the costs we incur to obtain or fulfill a contract that meet the deferral criteria within IFRS 15 requires us to make Increase (decrease) significant judgments. We expect incremental commission fees in accrued paid to internal and external representatives as a result of obtaining (In millions of dollars) benefit obligation contracts with customers to be recoverable. Discount rate Impact of 0.5% increase (196) USEFUL LIVES AND DEPRECIATION AND AMORTIZATION Impact of 0.5% decrease 224 METHODS Rate of future compensation increase Impact of 0.25% increase 16 We make significant judgments in choosing methods for Impact of 0.25% decrease (16) depreciating our property, plant and equipment that we believe Mortality rate most accurately represent the consumption of benefits derived Impact of 1 year increase 47 from those assets and are most representative of the economic Impact of 1 year decrease (50) substance of the intended use of the underlying assets. We amortize the cost of intangible assets with finite lives over their STOCK-BASED COMPENSATION estimated useful lives. We review their useful lives, residual values, Stock option plans and the amortization methods at least once a year. Our employee stock option plans attach cash-settled share appreciation rights (SARs) to all new and previously granted We do not amortize intangible assets with indefinite lives options. The SAR feature allows the option holder to elect to (spectrum, broadcast licences, and certain brand names) as there is receive a cash payment equal to the intrinsic value of the option, no foreseeable limit to the period over which these assets are instead of exercising the option and acquiring Class B Non-Voting expected to generate net cash inflows for us. We make judgments Shares. to determine that these assets have indefinite lives, analyzing all relevant factors, including the expected usage of the asset, the We measure stock-based compensation to employees at fair value. typical life cycle of the asset, and anticipated changes in the market We determine the fair value of options using our Class B demand for the products and services the asset helps generate. Non-Voting Share price and option pricing models, and record all After review of the competitive, legal, regulatory, and other factors, outstanding stock options as liabilities. The liability is marked to it is our view that these factors do not limit the useful lives of our market each period and is amortized to expense using a graded spectrum and broadcast licences. vesting approach over the period during which employee services are rendered, or over the period to the date an employee is eligible to retire, whichever is shorter. The expense in each period is affected by the change in the price of our Class B Non-Voting Shares during the period.

76 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 77 | 17 2017 74 16 ,providing 198 (1) 2017 % Chg 13 Customer loyalty 2018 86 197 Financial instruments 2018 Years ended December 31 Years ended December 31 ROGERS COMMUNICATIONS INC. Share-based payment (IAS 18) and IFRIC 13, 2018 ANNUAL REPORT Revenue Foreign currency transaction and advanced , clarifying the requirements in determining the (IFRIC 13). REVENUE FROM CONTRACTS WITH CUSTOMERS guidance on accounting forin vesting regards and to share-based non-vesting compensation. conditions consideration date of transactions andwhen which foreign exchange translating raterecognition. to assets, use in expenses, or income on initial of the Company’s legal services; and Company. (IFRS 9) effectivepronouncements have January on our 1, resultsbelow. and operations 2018. are described The effects these two new • IFRIC 22, Additionally, we adopted IFRS 15 and IFRS 9, Purchases (In millions of dollars) Revenue (In millions of dollars) Printing and legal services IFRS 15, (IFRS 15) IFRS 15 supersedesincluding previous IAS 18, accounting standardsprogrammes for revenue, NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2018 We adopted the following IFRS amendmentshave a in material 2018. effect They on did our not financial statements. • Amendments to IFRS 2, TRANSACTIONS WITH RELATED PARTIES We have entered intobusiness certain with transactions in related the partiesThe normal amounts in course received which from of or we paid to have these an parties were equity as interest. follows: We have entered into businesspartners transactions or with senior companies officers whose are Directors• of RCI. the These Directors non-executive are: chairman of a law firm• that provides the a chairman portion of a company that provides printing services to the We have also entered intoshareholder certain transactions and with our companiessubject controlling it to formal controls.Committee. agreements Total These amounts approved transactions paidreflect by to are the these the charges to related Audit Rogers partiesnet for generally and occasional of business other Risk use of administrativefor aircraft, services, each of and 2018 were and 2017. less than $1These million transactions are measuredrelated at the parties, amount which agreedCommittee. to are The by amounts also the owingdue reviewed are for unsecured, by payment interest-free, the in and transaction. Audit cash within and one Risk month from the date of the x assets and liabilities and could, nflows that are largely independent ONEROUS CONTRACTS Significant judgment is required toto determine when we unavoidable are subject judgments costs may include, for arising example,legally whether binding from a or certain promise whetherwith onerous is the we counterparty. may contracts. be These successful in negotiations CONTINGENCIES Considerable judgmentcontingent is liabilities. involvedcurrently Our known to in us, judgment and theof the is probability of the the determination based contingencies. ultimate resolution liability If on of will it result information becomesrecord in a probable provision an that in outflowThe a the amount period of contingent of the economic change theavailable resources, in loss at probability we involves that occurs. judgment will time.liability could based Any be on material provision to information recognizedresults our of consolidated for operations. financial position a and contingent INCOME TAXES AND OTHER TAXES We accrue income andcurrently other available tax in provisions each based ofWhile on the information jurisdictions we in whichamounts believe of we tax, operate. we our business isrequired have complex in and interpreting significant how paid judgment tax is legislationus. and and Our regulations apply tax provided to filingsrevenue are for authorities subject and to adequate the auditmaterially results by of the change the relevant the government government amountincome audit of could our tax actualreceivable, income and payable deferred tax income ta expense, or receivable, other taxes payable or in certain circumstances, resultpenalties. in the assessment of interest and HEDGE ACCOUNTING We makefinancial significant instruments judgments qualify fordetermination of in hedge hedge effectiveness. accounting, determining including whether our our We make judgments ingoodwill determining CGUs to andimpairment CGUs the allocation or of testing.considerable management groups judgment in of The determininggroups the of CGUs CGUs CGUs) (or that allocation are for expecteda to business benefit the combination. from of the A synergiesof purpose CGU of assets is that goodwill of the generates smallestof cash identifiable the i group involves cash inflows fromand other assets indefinite-life or groups intangiblegroups of assets. assets of Goodwill are CGUs)monitors goodwill, allocated which based is not to higher on than CGUs an operating the segment. (or level at which management IMPAIRMENT OF ASSETS Judgment is also appliedintangible in choosing methods assets foraccurately amortizing and represent our the consumption program ofrepresentative those assets of rights and the are most economic thatthe substance underlying assets. of we the intended believe use of most MANAGEMENT’S DISCUSSION AND ANALYSIS

IFRS 15 introduced a single model for recognizing revenue from monthly service fees, which results in an increase to equipment contracts with customers. This standard applies to all contracts with revenue recognized at contract inception and a decrease to service customers, with only some exceptions, including certain contracts revenue recognized over the course of the contracts. The accounted for under other IFRSs. The standard requires revenue to application of IFRS 15 does not affect our cash flows from be recognized in a manner that depicts the transfer of promised operations or the methods and underlying economics through goods or services to a customer and at an amount that reflects the which we transact with our customers. consideration expected to be received in exchange for transferring The treatment of costs incurred in acquiring customer contracts is those goods or services. This is achieved by applying the following affected as IFRS 15 requires certain contract acquisition costs (such five steps: as sales commissions) to be recognized as an asset and amortized 1. identify the contract with a customer; into operating expenses over time. Previously, such costs were 2. identify the performance obligations in the contract; expensed as incurred. 3. determine the transaction price; In addition, new assets and liabilities have been recognized on our 4. allocate the transaction price to the performance obligations Consolidated Statements of Financial Position. Specifically, a in the contract; and contract asset and contract liability is recognized to account for any 5. recognize revenue when (or as) the entity satisfies a timing differences between the revenue recognized and the performance obligation. amounts billed to the customer. IFRS 15 also provides guidance relating to the treatment of contract Significant judgment is needed to determine whether a promise to acquisition and contract fulfillment costs. delivergoodsorservicesisconsidereddistinctandindetermining The application of this new standard has significant impacts on our the costs that are incremental to obtaining a contract with a reported Wireless results, specifically with regards to the timing of customer. recognition and classification of revenue, and the treatment of We have retrospectively applied IFRS 15 to all contracts that were costs incurred in acquiring customer contracts. The timing of not complete on the date of initial application. We have made a recognition and classification of revenue is affected because, at policy choice to restate each prior period presented and have contract inception, IFRS 15 requires the estimation of total recognized the cumulative effect of initially applying IFRS 15 as an consideration over the contract term and the allocation of that adjustment to the opening balance of equity as at January 1, 2017, consideration to all performance obligations in the contract based subject to certain practical expedients we adopted that are on their relative stand-alone selling prices. This affects our Wireless described in note 5 to our 2018 Audited Consolidated Financial arrangements that bundle equipment and service together into Statements.

EFFECT OF IFRS 15 TRANSITION Below is a summary of the IFRS 15 adjustments on our key financial information for the twelve months ended December 31, 2017, all of which pertain to our Wireless segment. Year ended December 31, 2017 As previously (In millions of dollars) Reference reported 1 Adjustments Restated

Consolidated Total revenue i, iii 14,143 226 14,369 Total service revenue 2 i 13,560 (1,010) 12,550 Adjusted EBITDA 3 5,318 184 5,502 Net income 1,711 134 1,845 Adjusted net income 3 1,768 134 1,902

Wireless Service revenue i 7,775 (1,010) 6,765 Equipment revenue i, iii 568 1,236 1,804

Operating expenses 4 ii, iii 4,801 42 4,843 Adjusted EBITDA 3,542 184 3,726

1 Amounts calculated on a basis consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. Certain amounts presented under prior accounting basis have been retrospectively amended as a result of our use of adjusted EBITDA in 2018. 2 As defined. See “Key Performance Indicators”. 3 Adjusted EBITDA and adjusted net income are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information aboutthese measures, including how we calculate them. 4 Operating expenses have been retrospectively amended to include stock-based compensation. See “Reportable Segments” and “Non-GAAP Measures”.

78 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 79 | Financial Instruments: ROGERS COMMUNICATIONS INC. (IFRS 9) lassified and measured based on (IAS 39). IFRS 9 includes revised reported Adjustments Restated As previously 2018 ANNUAL REPORT FINANCIAL INSTRUMENTS As at January 1, 2017 As at December 31, 2017 IFRS 9, In July 2014,standard, the IASB issued whichrecognition the and final supersedes publication measurement guidance of IAS the on IFRS 39, instruments, the 9 new guidance classification forassets, measuring and impairment and on new measurement financial hedgeIFRS of accounting 9 on guidance. financial a Wewere not retrospective have restated basis; adopted because it however,use was of our not hindsight. 2017 possible to comparatives do so withoutUnder the IFRS 9, financial assets arethe c business model in which theytheir are held and contractual the characteristicsmeasurement of cash categories flows.amortized cost, IFRS for fair(FVTOCI), 9 value and financial fair through value contains through other assets: profit9, and comprehensive we three loss (FVTPL). have income measured Under irrevocably primary IFRS the elected at to fair presentheld-for-trading subsequent changes value in norbusiness of contingent combination our consideration inreclassification other of equity arising net comprehensiveequity gains from investments income and investments, with a losses that any no recorded to in impairment net are other comprehensive income. on income,losses and For neither in cumulative the these gains other or instrument comprehensivenet income income, will will including upon not be disposal. be reclassified into Under IFRS 9,calculated the using loss the expected allowancethe lifetime for credit time loss trade of and receivables initialrequired recorded an recognition. at must incremental A loss be allowance portionrequirements in of order of to our comply IFRS trade withdecrease 9; the receivables to as accounts receivable a andretained result, a earnings corresponding we within decrease recognized to 2018. shareholders’ a In equity $4 addition, effective million thecredit January expected loss 1, loss approach allowance isThere using applied is the to no lifetime contractfinancial significant instruments assets under effect under IFRS 9 on IFRS related to 15. the this newThe carrying requirement. new hedge value accounting guidance of alignsclosely hedge our accounting with more other an entity’sIFRS risk 9 management objectivesrelationships does and not strategies. orineffectiveness; fundamentally however, the change it allows requirementrisk more the hedging management strategies types to to usedmore for of qualify judgment measure for to hedging assess hedge the and effectivenessprimarily accounting of from a and recognize a hedging introduces relationship, qualitativean standpoint. effect This on is our noteffectiveness reported expected tests results going to forward. and have will simplify our application of 28,34223,073 1,469 454 29,811 23,527 28,863 22,516 1,627 30,490 478 22,994 reported Adjustments Restated As previously i, iii i, ii, iii Reference Consolidated Total assets iii) Inventories and other current liabilities Under IFRS 15, we determine whenthe the customer distinct obtains control good of defined or our customer service. as Forthey the affected end obtain subscriber transactions, control anddevice, we determined when that have they which receivetransactions possession typically through of third-partytiming occurs a dealers of wireless when and upon thewill other customer be obtains activation. retailers, control deferred the revenue of For a was in wireless recognized comparison certain device whenand accepted to the by wireless our the deviceinventory independent previous dealer. was balance This delivered and policy, results aliabilities. in where a corresponding greater increase in other current ii) Deferred commission cost assets Under IFRS 15,internal we defer and incrementalcontracts external commission with costs representatives customers as paidamortize as deferred to commission them a cost totransfer assets result and of operating goods of expenses andevenly obtaining over over services either to 12 the or the 24 pattern consecutive customer, months. which of is the typically i) Contract assets and liabilities Contract assets arise primarily asrevenue a recognized result on of the the sale differencea of between term a contract wireless and device the cash atrecognized collected the at onset the at of point ofconsideration point sale. Revenue over of theconsideration sale contract to all term requires performance obligations andon in the the the their contract allocation estimation based relativecontracts, of revenue of stand-alone that is total recognizedwith selling a earlier larger prices. allocation than to equipment previouslyof For revenue. IFRS reported, Prior 15, to Wireless the the amount adoption allocated term to to the equipment revenue non-contingent was limited considerationwhen received recovery at of the thecontingent point remaining upon of the consideration delivery in sale of the future services. contract was We record acustomer contract in advance liability of when providingfor goods we and contract receive services. assets We payment account with and each from contract liabilities being a presented on asnet a a contract single liability net contract-by-contract accordingly. contract basis, asset or All contract assets arecredit recorded losses, measured net in of accordance with an IFRS allowance 9. for expected Total liabilities Shareholders’ equityThe application of IFRS 15 did not affect our cash flow totals from operating, investing, or financing activities. 5,269 1,015 6,284 6,347 1,149 7,496 Below is a summary ofat the January IFRS 1, 15 2017 and adjustments December on 31, certain 2017. key financial metrics from our Consolidated Statements of Financial Position as (in millions of dollars) MANAGEMENT’S DISCUSSION AND ANALYSIS

RECENT ACCOUNTING PRONOUNCEMENTS NOT YET borrowing rate as at January 1, 2019. Generally, right-of-use assets ADOPTED at transition will be measured at an amount equal to the corresponding lease liabilities, adjusted for any prepaid or accrued The IASB has issued the following new standard that will become rent outstanding. For certain leases where we have readily available effective in a future year and will have an impact on our information, we will elect to measure the right-of-use assets at their consolidated financial statements in future periods. carrying amounts as if IFRS 16 had been applied since the lease commencement date using the related incremental borrowing rate IFRS 16, LEASES (IFRS 16) for the remaining lease period as at January 1, 2019. Effective January 1, 2019, we will adopt IFRS 16. Our first quarter When applying IFRS 16 to leases previously classified as operating 2019 interim financial statements will be our first financial leases, the following practical expedients are available to us. We statements issued in accordance with IFRS 16. IFRS 16 supersedes will: the current accounting standards for leases, including IAS 17, • apply a single discount rate to a portfolio of leases with similar Leases (IAS 17) and IFRIC 4, Determining whether an arrangement characteristics; contains a lease (IFRIC 4). • exclude initial direct costs from measuring the right-of-use asset IFRS 16 introduces a single accounting model for lessees unless as at January 1, 2019; and the underlying asset is of low value. A lessee will be required to • use hindsight in determining the lease term where the contract recognize, on its statement of financial position, a right-of-use asset, contains purchase, extension, or termination options. representing its right to use the underlying leased asset, and a We have elected to not separate fixed non-lease components from lease liability, representing its obligation to make lease payments. lease components and instead account for each lease component As a result of adopting IFRS 16, we will recognize a significant and associated fixed non-lease components as a single lease increase to both assets and liabilities on our Consolidated component. We do not intend to elect the recognition exemptions Statements of Financial Position, as well as a decrease to operating on short-term leases or low-value leases; however, we may choose costs (for the removal of rent expense for leases), an increase to to elect the recognition exemptions on a class-by-class basis for depreciation and amortization (due to depreciation of the right-of- new classes, and lease-by-lease basis, respectively, in the future. use asset), and an increase to finance costs (due to accretion of the lease liability). The accounting treatment for lessors will remain We do not expect significant impacts for contracts in which we are largely the same as under IAS 17. the lessor. We will adopt IFRS 16 with the cumulative effect of initial We have a team engaged to ensuring our compliance with IFRS 16, application recognized as an adjustment to retained earnings including overseeing the implementation of a new lease system within shareholders’ equity on January 1, 2019. We will not restate that enables us to comply with the requirements of the standard on comparatives for 2018. At transition, we will apply the practical a contract-by-contract basis. This team has been responsible for expedient available to us as lessee that allows us to apply this determining and implementing additional process requirements, standard to contracts that were previously identified as leases ensuring our data collection is appropriate, system testing, under IAS 17 and IFRIC 4. Conversely, we will not apply this developing related internal controls, and communicating the standard to contracts that were previously not identified as leases upcoming changes with various stakeholders. We had detailed under IAS 17 and IFRIC 4. data validation processes that operated throughout the course of 2018. For leases that were classified as operating leases under IAS 17, lease liabilities at transition will be measured at the present value of remaining lease payments, discounted at the related incremental

80 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 81 | transition as at Subsequent to January 1, 2019 ROGERS COMMUNICATIONS INC. IFRS 16 transition Estimated effect of –1.41.4 –0.20.2 4.9 *** 4.9 8.2 *** 8.2 23.7 1.5 25.2 11.831.9 1.5 1.5 13.3 33.4 2018 ANNUAL REPORT As reported as at December 31, 2018 i i i payments made at or before the commencement date; plus asset or restore the site on which it is located; less reasonably certain to exercise the option; and reasonably certain not to exercise the option. prepaid orrecognized accrued in the leaseimmediately Consolidated before the Statements date payments of of initial Financial application. relating Position After transition, to the right-of-use asset thatlease will initially be commencement recorded lease atconsisting the of: date and• will the initial be amount of measured the• at lease any liability, initial direct cost, adjusted costs• incurred; for and an any estimate lease of costs to• dismantle any and lease incentives remove received. theThe underlying right-of-use asset willbasis typically over be the depreciated lease onthe term, a leased asset unless straight-line at we the end expect• of to the lease. obtain the The non-cancellable ownership lease period term of of• will the consist lease; of: periods covered by options to extend• the periods lease, covered where by options we to are terminate the lease, where we are Reference Accounts payable and accrued liabilitiesCurrent portion of lease liabilities Remainder of current liabilities 3.1 3.7 (0.1) 3.0 – 3.7 Other current assetsRemainder of current assets 4.5 0.4 – *** 4.5 0.4 reasonably certain torenewal exercise, period lease payments ifextension in option, we and an penalties are optional unless for we are reasonably early reasonably termination certain certain not of to terminate a to early. lease exercise an guarantee; and Assets Current assets: Total current assets Property, plant and equipment Deferred tax liabilitiesRemainder of long-term liabilitiesTotal liabilities Shareholders’ equity Total liabilities and shareholders’ equity 14.0 31.9 2.9 – 1.5 *** 14.0 33.4 2.9 Total current liabilitiesLease liabilities 6.8 0.1 6.9 Remainder of long-term assetsTotal assets Liabilities and shareholders’ equity Current liabilities: 15.2 – 15.2 Upon transition,information except to for measureamounts those the leases as right-of-usecommencement where assets if date, at we the IFRS their right-of-usethe have carrying asset amount 16 the will of be the had lease measured been liability, at adjusted applied by the since amount of the any lease • the exercise price under a purchase option that we are i) Right-of-use assets and lease liabilities We will record a right-of-usetransition. asset and The a lease lease liability liability will atvalue initially the be of date measured of at lease thetransition. payments present Lease that payments remainlease included liability to will in include: be the paid• measurement at fixed of payments, the including the in-substance• date fixed payments; variable of lease payments that• depend on amounts an index or expected rate; to be payable under a residual value *** Amounts less than $0.1 billion; these amounts have been excluded from subtotals. (in billions of dollars) EFFECT OF TRANSITION TO IFRS 16 Below is the estimated effect of transition to IFRS 16 on our Consolidated Statements of Financial Position as at January 1, 2019. MANAGEMENT’S DISCUSSION AND ANALYSIS

KEY PERFORMANCE INDICATORS • Cable Television, Internet, and Phone subscribers include only those subscribers who have service installed and operating, and We measure the success of our strategy using a number of key who are being billed accordingly. performance indicators, which are outlined below. We believe • Subscriber counts exclude certain enterprise services delivered these key performance indicators allow us to appropriately over our fibre network and data centre infrastructure, and circuit- measure our performance against our operating strategy and switched local and long distance voice services and legacy data against the results of our peers and competitors. The following key services where access is delivered using leased third-party performance indicators are not measurements in accordance with network elements and tariffed ILEC services. IFRS and should not be considered alternatives to net income or any other measure of performance under IFRS. They include: Homes passed (Cable) • subscriber counts; Homes passed are represented by the total number of addresses • Wireless; that either are Cable subscribers or are non-subscribers, but have •Cable;and the ability to access our cable services, within a defined • homes passed (Cable); geographical area. When there is more than one unit in a single • subscriber churn (churn); dwelling, such as an apartment building, each unit that is a Cable • blended average billings per user (ABPU); subscriber, or has the ability to access our cable services, is counted • blended average revenue per user (ARPU); as an individual home passed. Institutional or commercial units, • capital intensity; such as hospitals or hotels, are each considered one home passed. • total service revenue; • dividend payout ratios; and SUBSCRIBER CHURN • returnonassets. Subscriber churn (churn) is a measure of the number of subscribers Commencing this year, we are disclosing blended ABPU (Wireless) that deactivated during a period as a percentage of the total as a key performance indicator. Additionally, as a result of our subscriber base, usually calculated on a monthly basis. Subscriber redefined Cable segment, we have amended the definition of our churn measures our success in retaining our subscribers. We subscriber count key performance indicator to include Smart calculate it by dividing the number of Wireless subscribers that Home Monitoring subscribers as part of Internet. deactivated (usually in a month) by the aggregate numbers of subscribers at the beginning of the period. When used or reported for a period greater than one month, subscriber churn represents SUBSCRIBER COUNTS the sum of the number of subscribers deactivating for each period We determine the number of subscribers to our services based on divided by the sum of the aggregate number of subscribers at the active subscribers. When subscribers are deactivated, either beginning of each period. voluntarily or involuntarily for non-payment, they are considered deactivations in the period the services are discontinued. We use subscriber counts to measure our core business performance and BLENDED AVERAGE BILLINGS PER USER (WIRELESS) ability to benefit from recurring revenue streams. We use homes To assist in understanding the underlying economics of our passed (Cable) as a measure for our potential market penetration Wireless business, we commenced disclosing blended ABPU this within a defined geographical area. year. We use blended ABPU as a measure that approximates the average amount we invoice an individual subscriber on a monthly Subscriber count (Wireless) basis. This measure is similar to blended ARPU under previously • A wireless subscriber is represented by each identifiable issued results prior to the adoption of IFRS 15 (see “Accounting telephone number. Policies”); however, as a result of the reduction in service revenue • We report wireless subscribers in two categories: postpaid and under IFRS 15, blended ARPU is lower than previously reported prepaid. Postpaid and prepaid include voice-only subscribers, and does not fully reflect the average amount to be paid by a data-only subscribers, and subscribers with service plans customer each month. Blended ABPU helps us identify trends and integrating both voice and data. measure our success in attracting and retaining higher-value • Usage and overage charges for postpaid subscribers are billed a subscribers. We calculate blended ABPU by dividing the sum of month in arrears. Prepaid subscribers cannot incur usage and/or service revenue and the amortization of contract assets to accounts overage charges in excess of their plan limits or account balance. receivable by the average total number of Wireless subscribers for • Wireless prepaid subscribers are considered active for a period thesameperiod. of 180 days from the date of their last revenue-generating usage. BLENDED AVERAGE REVENUE PER USER (WIRELESS) Subscriber count (Cable) Blended ARPU helps us identify trends and measure our success in • Cable Television and Internet subscribers are represented by a attracting and retaining higher-value subscribers. We calculate dwelling unit; Cable Phone subscribers are represented by line blended ARPU by dividing service revenue by the average total counts. number of Wireless subscribers for the same period. • When there is more than one unit in a single dwelling, such as an apartment building, each tenant with cable service is counted as CAPITAL INTENSITY an individual subscriber, whether the service is invoiced Capital intensity allows us to compare the level of our capital separately or included in the tenant’s rent. Institutional units, expenditures to that of other companies within the same industry. such as hospitals or hotels, are each considered one subscriber. Our capital expenditures do not include expenditures on spectrum

82 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 83 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT DIVIDEND PAYOUT RATIOS We calculate thedeclared for dividend the year payoutWe by net use ratio income dividends or by as freeflow cash to a dividing flow conduct percentage for analysis dividends of the andwe should year. net assist pay. with income determining and the free dividends cash RETURN ON ASSETS We use returnassets on to assets generate to netdividing measure net income. income our for We the efficiency calculate year by in return total assets using on as at our assets year-end. by TOTAL SERVICE REVENUE We useperformance total from service theseparate revenue from provision revenue to generated ofhave measure from acquired the services from our sale device of tothis core manufacturers equipment metric is our and we our business resold. retail customers revenue Includedwhich from in TSC are and the also Torontorevenue Blue by core Jays, subtracting equipment to revenue from our total revenue. business. We calculate total service licences. Weexpenditures by calculate revenue. We useour it capital assets to and evaluate the when intensity performance makingWe of decisions believe about by that capital certain expenditures. to investors measure dividing the and performance analysts of capital asset userelation purchases to capital and revenue. intensity construction in MANAGEMENT’S DISCUSSION AND ANALYSIS

NON-GAAP MEASURES We use the following non-GAAP measures. These are reviewed regularly by management and the Board in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. Some or all of these measures may also be used by investors, lending institutions, and credit rating agencies as indicators of our operating performance, of our ability to incur and service debt, and as measurements to value companies in the telecommunications sector. These are not recognized measures under GAAP and do not have standard meanings under IFRS, so may not be reliable ways to compare us to other companies. Most comparable IFRS financial Non-GAAP measure Why we use it How we calculate it measure Adjusted EBITDA • To evaluate the performance of our businesses, and when making Adjusted EBITDA: Net income decisions about the ongoing operations of the business and our Net income Adjusted EBITDA ability to generate cash flows. add (deduct) margin • We believe that certain investors and analysts use adjusted EBITDA to income tax expense (recovery); measure our ability to service debt and to meet other payment finance costs; depreciation and obligations. amortization; other expense • We also use it as one component in determining short-term incentive (income); restructuring, acquisition compensation for all management employees. and other; and loss (gain) on disposition of property, plant and equipment. Adjusted EBITDA margin: Adjusted EBITDA divided by revenue. Adjusted net income • To assess the performance of our businesses before the effects of the Adjusted net income: Net income noted items, because they affect the comparability of our financial Net income Adjusted basic and results and could potentially distort the analysis of trends in business add (deduct) Basic and diluted diluted earnings per performance. Excluding these items does not imply that they are restructuring, acquisition and other; earnings per share share non-recurring. loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; loss on bond forward derivatives; and income tax adjustments on these items, including adjustments as a result of legislative changes. Adjusted basic and diluted earnings per share: Adjusted net income and adjusted net income including the dilutive effect of stock-based compensation divided by basic and diluted weighted average shares outstanding. Free cash flow 1 • To show how much cash we have available to repay debt and reinvest Adjusted EBITDA Cash provided by in our company, which is an important indicator of our financial deduct operating activities strength and performance. capital expenditures; interest on • We believe that some investors and analysts use free cash flow to borrowings net of capitalized value a business and its underlying assets. interest; net change in contract asset and deferred commission cost asset balances; and cash income taxes. Adjusted net debt • To conduct valuation-related analysis and make decisions about Total long-term debt Long-term debt capital structure. add (deduct) • We believe this helps investors and analysts analyze our enterprise current portion of long-term debt; and equity value and assess our leverage. deferred transaction costs and discounts; net debt derivative (assets) liabilities; credit risk adjustment related to net debt derivatives; bank advances (cash and cash equivalents); and short- term borrowings. Debt leverage ratio • To conduct valuation-related analysis and make decisions about Adjusted net debt (defined above) Long-term debt capital structure. divided by divided by net income • We believe this helps investors and analysts analyze our enterprise 12-month trailing adjusted EBITDA and equity value and assess our leverage. (defined above).

1 Effective January 1, 2019, we will redefine free cash flow such that we will no longer adjust for the “net change in contract asset and deferred commission cost asset balances”. We will redefine free cash flow to simplify this measure and we believe removing it will make us more comparable within our industry.

84 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 85 | 1 – (64) (82) 152 735 164 988 184 517 515 59% (722) 2017 2017 2017 3,938 1,685 1,869 1,902 1,902 1,902 1,685 (2,436) $3.68 $3.69 (restated) (2) (58) (30) 516 515 210 726 114 988 363 56% (689) 2018 2018 2018 2,239 2,241 2,241 4,288 1,771 2,134 1,771 (2,790) $4.34 $4.35 Years ended December 31 Years ended December 31 Years ended December 31 ROGERS COMMUNICATIONS INC. n operating activities on the Consolidated 1 2018 ANNUAL REPORT interest capital items of shares outstanding shares outstanding commission cost asset balances Restructuring, acquisition and other Interest paid Program rights amortization Capital expenditures Interest on borrowings, net of capitalized Change in non-cash operating working Other adjustments Dividedby:dilutedweightedaveragenumber Diluted adjusted net income Effect on net income of dilutive securities Adjusted net income Divided by: weighted average number of Adjusted net income Netchangeincontractassetanddeferred Includes “net change incommission cost contract asset asset balances in balances” “other”Statements of i and Cash Flows. the net change in deferred 2017 reported figuresPolicies”. have been restated applying IFRS 15. See “Accounting Add (deduct): Dividend payout ratio of free cash flow Cash provided by operating activities Dividends declared during the year Divided by: free cash flow (In millions of dollars) (In millions of dollars, except percentages) Free cash flow (with respect to “2019 Outlook”) Adjusted diluted earnings per share Adjusted basic earnings per share Adjusted diluted earnings per share: 1 RECONCILIATION OF DIVIDEND PAYOUT RATIO OFCASH FREE FLOW RECONCILIATION OF ADJUSTED EARNINGS PER SHARE (In millions of dollars, except per sharenumber amounts; of shares outstanding in millions) Adjusted basic earnings per share: 1 RECONCILIATION OF FREE CASH FLOW Free cash flow 1 1 1 – – 2 (19) (20) (49) (28) (49) 152 685 746 152 2017 2017 2017 1,845 1,845 5,502 5,502 1,902 2,142 38.3% 14,369 (restated) (restated) (restated) – – 21 28 2018 (16) (61) 5,983 210 (32) (16) 39.6% 758 793 210 15,096 2018 2,059 2,241 2018 2,059 5,983 2,211 Years ended December 31 Years ended December 31 Years ended December 31 egislative tax change equipment equipment Loss on bond forward derivatives Loss on repayment of long-term debt Restructuring, acquisition and other Income tax expense Adjusted EBITDA Other income Divided by: total revenue Recovery on wind-down of shomi Gain on disposition of property, plant and Income tax impact of above items Income tax adjustment, l Finance costs Restructuring, acquisition and other Gain on disposition of property, plant and Depreciation and amortization 2017 reported figuresPolicies”. have been restated applying IFRS 15. See “Accounting 2017 reported figuresPolicies”. have been restated applying IFRS 15. See “Accounting 2017 reported figuresPolicies”. have been restated applying IFRS 15. See “Accounting Adjusted EBITDA margin (In millions of dollars) (In millions of dollars, except percentages) (In millions of dollars) Add (deduct): 1 Net income RECONCILIATION OF ADJUSTED NET INCOME 1 Add (deduct): Adjusted EBITDA margin: 1 Net income RECONCILIATION OF ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN Adjusted net income Adjusted EBITDA MANAGEMENT’S DISCUSSION AND ANALYSIS

RECONCILIATION OF ADJUSTED NET DEBT AND DEBT As at December 31 LEVERAGE RATIO 2017 (In millions of dollars, except ratios) 2018 (restated) 1 As at December 31 Debt leverage ratio (In millions of dollars) 2018 2017 Adjusted net debt 14,806 15,000 Current portion of long-term debt 900 1,756 Divided by: trailing 12-month adjusted Long-term debt 13,390 12,692 EBITDA 5,983 5,502 Deferred transaction costs and discounts 114 107 Debt leverage ratio 2.5 2.7 14,404 14,555 1 2017 reported figures have been restated applying IFRS 15. See “Accounting Add (deduct): Policies”. Netdebtderivativeassets (1,373) (1,129) Credit risk adjustment related to net debt derivative assets (75) (17) Short-term borrowings 2,255 1,585 (Cash and cash equivalents) bank advances (405) 6

Adjusted net debt 14,806 15,000

SUMMARY OF FINANCIAL RESULTS OF LONG-TERM DEBT GUARANTOR Our outstanding public debt, amounts drawn on our $4.2 billion bank credit and letter of credit facilities, and derivatives are unsecured obligations of RCI, as obligor, and RCCI, as either co-obligor or guarantor, as applicable. The selected unaudited consolidating summary financial information for RCI for the periods identified below, presented with a separate column for: (i) RCI, (ii) RCCI, (iii) our non-guarantor subsidiaries on a combined basis, (iv) consolidating adjustments, and (v) the total consolidated amounts, is set forth as follows:

Non-guarantor Consolidating RCI 1 RCCI 1 subsidiaries 1 adjustments 1 Total Years ended December 31 (unaudited) 2017 2017 2017 2017 2017 (In millions of dollars) 2018 (restated) 3 2018 (restated) 3 2018 (restated) 3 2018 (restated) 3 2018 (restated) 3

Selected Statements of Income data measure: Revenue 11 46 13,073 12,401 2,225 2,167 (213) (245) 15,096 14,369 Net income (loss) 2,059 1,845 1,818 1,698 348 98 (2,166) (1,796) 2,059 1,845

Non-guarantor Consolidating RCI 1 RCCI 1,2 subsidiaries 1 adjustments 1 Total As at December 31 (unaudited) 2017 2017 2017 2017 2017 (In millions of dollars) 2018 (restated) 3 2018 (restated) 3 2018 (restated) 3 2018 (restated) 3 2018 (restated) 3

Selected Statements of Financial Position data measure: Current assets 24,687 24,501 22,870 21,419 10,256 9,016 (52,925) (50,811) 4,888 4,125 Non-current assets 27,485 31,683 22,396 21,691 3,700 3,521 (26,551) (30,530) 27,030 26,365 Current liabilities 25,995 30,723 27,170 27,074 8,206 1,513 (54,535) (52,427) 6,836 6,883 Non-current liabilities 15,149 14,468 3,025 2,807 110 572 (1,381) (1,736) 16,903 16,111

1 For the purposes of this table, investments in subsidiary companies are accounted for by the equity method. 2 Amounts recorded in current liabilities and non-current liabilities for RCCI do not include any obligations arising as a result of being a guarantor or co-obligor, as the case may be, under any of RCI’s long-term debt. 3 2017 reported figures have been restated applying IFRS 15 and fully reflect the dissolution of Rogers Communications Partnership. See “Accounting Policies”.

86 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 87 | 2 2014 2 8. See “Key Performance 2015 so may not be a reliable way to ROGERS COMMUNICATIONS INC. the fourth quarter of 2016. See “Key f free cash flow are non-GAAP measures As at or years ended December 31 2 2016 2018 ANNUAL REPORT and dividend payout ratio o 1 2.7 3.0 3.1 2.9 5%9% 2% 1% 4% 0% 1% 2% 127 159 167 125 (247) (231)(170) (186) (163) (148) (159) (135) 6.1% 2.9% 4.6% 5.1% 3,8942,153 3,871 2,1461,819 3,870 2,079 1,7731,902 3,867 3,938 1,826 1,6852,436 1,751 1,432 3,957 1,705 2,352 1,760 1,433 3,747 1,676 2,440 1,508 3,698 1,437 2,366 2,3211,7401,108 2,145 1,820 1,094 2,048 1,896 1,090 2,011 2,024 1,150 8,569 7,9163,726 7,651 3,262 7,305 3,217 3,232 5,502 5,031 4,976 4,982 1,845 835 1,342 1,341 3,905 3,905 3,905 3,897 7,244 7,130 7,243 6,588 2,561 2,174 2,271 1,898 5,637 4,384 4,773 3,498 6,883 5,113 5,017 4,920 7,496 5,269 5,636 5,411 1.20% 1.23% 1.27% 1.27% 53.6%58.6% 118.3% 57.9% 73.6% 58.9% 70.2% 65.6% 2017 10,482 10,274 9,877 9,450 14,369 13,702 13,414 12,850 12,550 13,027 12,649 11,143 10,749 10,997 10,655 30,490 28,342 29,189 26,536 16,111 17,960 18,536 16,205 22,994 23,073 23,553 21,125 30,490 28,342 29,189 26,536 $ 62.31 $ 3.58 $ 1.62 $ 2.61 $ 2.60 $ 54.23 $ 60.42 $ 59.71 $ 59.41 $ 3.57 $ 1.62 $ 2.60 $ 2.56 $ 3.69$ 3.68 $ $ 2.78 2.77 $ 2.78 $ 2.77 $ 2.93 $ 2.92 $ 1.92 $ 1.92 $ 1.92 $ 1.83 h flow, debt leverage ratio, 2.5 5% 9% 196 (204) (177) 6.5% 2018 3,932 2,168 1,874 2,241 4,288 1,771 2,790 2,430 1,685 1,116 9,200 4,090 5,983 2,059 3,905 7,205 2,134 6,894 6,836 8,179 1.10% 48.0% 55.8% 10,783 15,096 12,974 11,780 31,918 16,903 23,739 31,918 $ 64.74 $4.00 $4.35 $ 55.64 $3.99 $1.92 $4.34 using blended ABPU as a key performance indicator in the first quarter of 201 ortable segment realignment. See “Understanding Our Business”. ormation about these measures, including how we calculate them. 3 3 4,6 4 4 e, adjusted basic and diluted earnings per share, free cas centages, and ratios) 7 6 4 6 4 6 4,5 6 6 3 3 Property, plant and equipment Goodwill Intangible assets Investments Other assets Long-term liabilities Current liabilities Total liabilities Shareholders’ equity Debt leverage ratio Media Corporate items and intercompany eliminations Media Corporate items and intercompany eliminations Basic Internet subscribers Television subscribers Phone subscribers Blended ABPU (monthly) Postpaid churn (monthly) Wireless subscribers Basic Wireless Cable Wireless Cable Dividend payout ratio of freeReturn cash on flow assets Blended ARPU (monthly) Diluted Diluted Revenue growth Adjusted EBITDA growth Dividends declared per share Assets Dividend payout ratio of net income Total assets Liabilities and Shareholders’ Equity Total liabilities and shareholders’ equity compare us to other companies. See “Non-GAAP Measures” for inf and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS, and do not have standard meanings, Performance Indicators”. Blended ABPU has not been presented for periods prior to 2017. We commenced These figures have been retrospectively amended asAs a defined. result See of “Key our Performance rep Indicators”. Total service revenue has not been presented for periods prior toAdjusted 2015. EBITDA, We adjusted commenced net reporting incom total service revenue as a key performance indicator in 2017 reported figures have been restated applyingAmounts IFRS calculated 15. on See a “Accounting basis Policies”. consistent with our previous revenue recognition accounting policies prior to adopting IFRS 15. Indicators”. Cash provided by operating activities Free cash flow Capital expenditures Earnings per share Additional Wireless metrics Revenue FIVE-YEAR SUMMARY OF CONSOLIDATED FINANCIAL RESULTS (In millions of dollars, except per shareresults, amounts, churn, subscriber ABPU, count ARPU, per Total service revenue Total revenue Total adjusted EBITDA Adjusted EBITDA Net income Additional consolidated metrics Adjusted earnings per share Statements of Financial Position: Adjusted net income Subscriber count results (in thousands) 7 4 5 6 1 2 3 CONSOLIDATED FINANCIAL STATEMENTS

Management’s Responsibility for Financial Reporting December 31, 2018

The accompanying consolidated financial statements of Rogers Board of Directors carries out this responsibility through its Audit Communications Inc. and its subsidiaries and all the information in and Risk Committee. Management’s Discussion and Analysis (MD&A) are the The Audit and Risk Committee meets regularly with management, responsibility of management and have been approved by the as well as the internal and external auditors, to discuss internal Board of Directors. controls over the financial reporting process, auditing matters, and Management has prepared the consolidated financial statements financial reporting issues; to satisfy itself that each party is properly in accordance with International Financial Reporting Standards as discharging its responsibilities; and to review MD&A, the issued by the International Accounting Standards Board. The consolidated financial statements, and the external auditors’ report. consolidated financial statements include certain amounts that are The Audit and Risk Committee reports its findings to the Board of based on management’s best estimates and judgments and, in Directors for its consideration when approving the consolidated their opinion, present fairly, in all material respects, Rogers financial statements for issuance to the shareholders. The Audit and Communications Inc.’s financial position, results of operations, and Risk Committee also considers the engagement or re-appointment cash flows. Management has prepared the financial information of the external auditors before submitting its recommendation to presented elsewhere in MD&A and has ensured that it is consistent the Board of Directors for review and for shareholder approval. with the consolidated financial statements. The consolidated financial statements have been audited by KPMG Management has developed and maintains a system of internal LLP, the external auditors, in accordance with the standards of the controls that further enhances the integrity of the consolidated Public Company Accounting Oversight Board (United States) on financial statements. The system of internal controls is supported by behalf of the shareholders. Our internal control over financial the internal audit function and includes management reporting as of December 31, 2018 has been audited by KPMG communication to employees about its policies on ethical business LLP, in accordance with the standards of the Public Company conduct. Accountability Oversight Board (United States). KPMG LLP has full and free access to the Audit and Risk Committee. Management believes these internal controls provide reasonable assurance that: March 6, 2019 • transactions are properly authorized and recorded; • financial records are reliable and form a proper basis for the preparation of consolidated financial statements; and • the assets of Rogers Communications Inc. and its subsidiaries are properly accounted for and safeguarded. Joe Natale Anthony Staffieri, FCPA, FCA The Board of Directors is responsible for overseeing management’s President and Chief Executive Officer Chief Financial Officer responsibility for financial reporting and is ultimately responsible for reviewing and approving the consolidated financial statements. The

88 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 89 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Chartered Professional Accountants, Licensed Public Accountants We have served as Rogers CommunicationsToronto, Inc.’s Canada auditor since 1969. March 6, 2019 Basis for Opinion These consolidated financialRogers statements Communications are Inc.’s the management.to responsibility Our express responsibility of an is opinionbased on on these our consolidated audits.with financial We the statements PCAOB are and a areto public required Rogers accounting to Communications Inc. be firm in independent registered securities accordance with with respect laws the U.S. and federal Securities and the Exchange Commission applicable and the rules PCAOB. andWe conducted regulations our of audits inPCAOB. the accordance Those with standards theaudit standards require of that the to weconsolidated plan financial statements obtain and are free perform ofwhether material the reasonable misstatement, due to assuranceprocedures error to or about assess fraud.consolidated Our the financial whether audits statements, risks whether includedand of the due performing performing material to misstatement procedures errorprocedures or of that fraud, included the respondregarding to examining, the those onfinancial risks. amounts statements. Such a andaccounting Our test disclosures principles audits in used basis,management, also as and the well evidence included as significantconsolidated evaluating consolidated evaluating estimates the financial overall the made presentationprovide statements. of a by the reasonable We basis for our believe opinion. that our audits Revenue issued by the Financial Instruments, and IFRS 9, Internal Control – Integrated Framework (2013) respectively, and includedfinancial the position as presentation at January 1, of 2017. the statement of Change in Accounting Principle As discussed in NoteRogers 2 to Communications theaccounting for consolidated revenue Inc. financial from contracts statements, instruments with has customers during and 2018 financial due changed to the adoption its of IFRS 15, method of Opinion on the Consolidated Financial Statements We have auditedfinancial the accompanying consolidated positionDecember statements of of 31,statements 2018 Rogers ofshareholders’ and Communications equity, income, and 2017, cashtwo-year comprehensive Inc. period flows ended for the December income, 31, as each(collectively, 2018, of and related changes the the the at related years notes opinion, consolidated in in the “consolidated the consolidated financial financialmaterial statements respects, present the statements”). financial fairly, position inInc. of In all Rogers as Communications at our operations December and 31, its cash 2018period flows ended and for December each 31, 2017, of 2018,Financial and in the conformity years the with Reporting in International results theAccounting Standards two-year of Standards Board. its as issuedWe also by have audited, in the accordanceCompany with the International Accounting standards of Oversight theRogers Public Board Communications (Unitedreporting States) as of Inc.’s December (PCAOB), 31, 2018,in internal based on the criteria control established Committee over ofCommission, financial and Sponsoring ourunqualified report opinion Organizations on dated the March effectivenessInc.’s of internal 6, of control Rogers over 2019 Communications financial reporting. expressed the an Treadway from Contracts with Customers Report of Independent Registered Public Accounting Firm To theCommunications Inc. Shareholders and Board of Directors of Rogers CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Rogers Communications Inc.

Opinion on Internal Control Over Financial Reporting reporting included obtaining an understanding of internal control We have audited Rogers Communications Inc.’s internal control over financial reporting, assessing the risk that a material weakness over financial reporting as of December 31, 2018, based on criteria exists, and testing and evaluating the design and operating established in Internal Control—Integrated Framework (2013) issued effectiveness of internal control based on the assessed risk. Our by the Committee of Sponsoring Organizations of the Treadway audit also included performing such other procedures as we Commission. In our opinion, Rogers Communications Inc. considered necessary in the circumstances. We believe that our maintained, in all material respects, effective internal control over audit provides a reasonable basis for our opinion. financial reporting as of December 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued Definition and Limitations of Internal Control over Financial by the Committee of Sponsoring Organizations of the Treadway Reporting Commission. We also have audited, in accordance with the A company’s internal control over financial reporting is a process standards of the Public Company Accounting Oversight Board designed to provide reasonable assurance regarding the reliability (United States) (PCAOB), the consolidated statements of financial of financial reporting and the preparation of financial statements for position of Rogers Communications Inc. as at December 31, 2018 external purposes in accordance with generally accepted and 2017, the related consolidated statements of income, accounting principles. A company’s internal control over financial comprehensive income, changes in shareholders’ equity, and cash reporting includes those policies and procedures that (1) pertain to flows for each of the years in the two-year period ended the maintenance of records that, in reasonable detail, accurately December 31, 2018, and the related notes (collectively, the and fairly reflect the transactions and dispositions of the assets of “consolidated financial statements”), and our report dated March 6, the company; (2) provide reasonable assurance that transactions 2019, expressed an unqualified opinion on those consolidated are recorded as necessary to permit preparation of financial financial statements. statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are Basis for Opinion being made only in accordance with authorizations of Rogers Communications Inc.’s management is responsible for management and directors of the company; and (3) provide maintaining effective internal control over financial reporting and reasonable assurance regarding prevention or timely detection of for its assessment of the effectiveness of internal control over unauthorized acquisition, use, or disposition of the company’s financial reporting, included under the heading Management’s assets that could have a material effect on the financial statements. Report on Internal Control over Financial Reporting contained Because of its inherent limitations, internal control over financial within Management’s Discussion and Analysis for the year ended reporting may not prevent or detect misstatements. Also, December 31, 2018. Our responsibility is to express an opinion on projections of any evaluation of effectiveness to future periods are Rogers Communications Inc.’s internal control over financial subject to the risk that controls may become inadequate because reporting based on our audit. We are a public accounting firm of changes in conditions, or that the degree of compliance with the registered with the PCAOB and are required to be independent policies or procedures may deteriorate. with respect to Rogers Communications Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the Chartered Professional Accountants, Licensed Public Accountants audit to obtain reasonable assurance about whether effective Toronto, Canada internal control over financial reporting was maintained in all March 6, 2019 material respects. Our audit of internal control over financial

90 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 91 | (49) (19) 152 746 685 2017 2,530 8,867 2,142 1,845 14,369 $3.58 $3.57 (restated, seenote2) (16) (32) 210 793 758 2018 2,817 2,059 9,113 2,211 15,096 $4.00 $3.99 ROGERS COMMUNICATIONS INC. 5 6 7 9 13 13 10 11 12 7, 8 Note 2018 ANNUAL REPORT of the consolidated financial statements. Restructuring, acquisition and other Basic Depreciation and amortization Gain on disposition of property, plant and equipment Diluted Operating costs Income tax expense Income before income tax expense Earnings per share: Finance costs Other income Net income for the year The accompanying notes are an integral part Years ended December 31 Consolidated Statements of Income (In millions of Canadian dollars, except per share amounts) Revenue Operating expenses: CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Comprehensive Income (In millions of Canadian dollars)

Years ended December 31 Note 2018 2017 (restated, seenote2) Net income for the year 2,059 1,845 Other comprehensive income (loss): Items that will not be reclassified to net income: Defined benefit pension plans: Remeasurements 22 53 (62) Related income tax (expense) recovery (12) 17 Defined benefit pension plans 41 (45) Equity investments measured at fair value through other comprehensive income (FVTOCI): (Decrease) increase in fair value (440) 433 Related income tax recovery (expense) 63 (62) Equity investments measured at FVTOCI (377) 371 Items that will not be reclassified to net income (336) 326 Items that may subsequently be reclassified to net income: Cash flow hedging derivative instruments: Unrealized gain (loss) in fair value of derivative instruments 725 (566) Reclassification to net income of (gain) loss on debt derivatives (671) 591 Reclassification to net income or property, plant and equipment of (gain) loss on expenditure derivatives (8) 39 Reclassification to net income for accrued interest (43) (60) Related income tax (expense) recovery (65) 40 Cash flow hedging derivative instruments (62) 44 Equity-accounted investments: Share of other comprehensive income (loss) of equity-accounted investments, net of tax 14 (15) Equity-accounted investments 14 (15) Items that may subsequently be reclassified to net income (48) 29 Other comprehensive (loss) income for the year (384) 355 Comprehensiveincomefortheyear 1,675 2,200

The accompanying notes are an integral part of the consolidated financial statements.

92 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 93 | As at January 1 –– 671 38 ROGERS COMMUNICATIONS INC. 62 186 35 33 953413 1,708 354 143 156 133147 22 118 132278 285 302 613 562 820 723 435 452 414 417 421 91 As at 2017 2017 3,905 3,905 2,561 2,174 2,931 2,783 6,883 5,199 1,585 800 2,6247,496 2,285 6,284 1,756 750 2,035 1,944 7,244 7,130 4,125 3,627 30,490 29,811 22,99430,490 23,527 29,811 12,692 15,330 11,143 10,749 December 31 (restated, see note 2) (restated, see note 2) 2018 ANNUAL REPORT – – 87 35 22 535 132 177 132 233 900 546 405 466 436 270 As at 2018 1,339 3,905 3,052 2,134 6,836 2,255 2,910 8,179 2,259 1,052 7,205 4,888 31,918 23,739 31,918 13,390 11,780 December 31 5 5 8 5 8 7 18 19 20 16 19 20 16 21 12 23 26 27 16 15 17 12 14 16 Note John H. Clappison, FCPA, FCA Director 10, 16, 23 of the consolidated financial statements. Bank advances Short-term borrowings Other current liabilities Income tax payable Accounts payable and accrued liabilities Current portion of derivative instruments Cash and cash equivalents Inventories Accounts receivable Contract liabilities Current portion of long-term debt Other current assets Current portion of contract assets Current portion of derivative instruments Total assets Liabilities and shareholders’ equity Current liabilities: Derivative instruments Contract assets Other long-term assets Shareholders’ equity Guarantees Goodwill Provisions Total liabilities Total liabilities and shareholders’ equity Assets Current assets: Investments Deferred tax assets Derivative instruments Edward S. Rogers Director On behalf of the Board of Directors: Commitments and contingent liabilities Subsequent events The accompanying notes are an integral part Consolidated Statements of Financial(In Position millions of Canadian dollars) Total current liabilities Long-term debt Other long-term liabilities Deferred tax liabilities Intangible assets Property, plant and equipment Total current assets CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Shareholders’ Equity (In millions of Canadian dollars, except number of shares)

Class A Class B Voting Shares Non-Voting Shares Number Number FVTOCI Equity Total of shares of shares Retained investment Hedging investment shareholders’ Year ended December 31, 2018 Amount (000s) Amount (000s) earnings reserve reserve reserve equity Balances, December 31, 2017 (restated, see note 2) 72 112,407 405 402,403 6,074 1,013 (63) (5) 7,496 Adjustments pertaining to IFRS 9 adoption (see note 2) – – – – (4) – – – (4) Balances, January 1, 2018 (restated, see note 2) 72 112,407 405 402,403 6,070 1,013 (63) (5) 7,492 Net income for the year – – – – 2,059 – – – 2,059 Other comprehensive income (loss): Defined benefit pension plans, net of tax – – – – 41 – – – 41 FVTOCI investments, net of tax – – – – – (377) – – (377) Derivative instruments accounted for as hedges, net of tax – – – – – – (62) – (62) Share of equity-accounted investments, net of tax – – – – – – – 14 14 Total other comprehensive income (loss) – – – – 41 (377) (62) 14 (384) Comprehensive income (loss) for the year – – – – 2,100 (377) (62) 14 1,675 Transactions with shareholders recorded directly in equity: Dividends declared – – – – (988) – – – (988) Shares issued on exercise of stock options – – – 2 – – – – – Share class exchange (1) (1,252) 1 1,252 – – – – – Total transactions with shareholders (1) (1,252) 1 1,254 (988) – – – (988) Balances, December 31, 2018 71 111,155 406 403,657 7,182 636 (125) 9 8,179

Class A Class B Voting Shares Non-Voting Shares Number Number FVTOCI Equity Total of shares of shares Retained investment Hedging investment shareholders’ Year ended December 31, 2017 Amount (000s) Amount (000s) earnings reserve reserve reserve equity Balances, January 1, 2017 (restated, see note 2) 72 112,412 405 402,396 5,262 642 (107) 10 6,284 Net income for the period (restated, see note 2) – – – – 1,845 – – – 1,845 Other comprehensive income (loss): Defined benefit pension plans, net of tax – – – – (45) – – – (45) FVTOCI investments, net of tax – – – – – 371 – – 371 Derivative instruments accounted for as hedges, net of tax – – – – – – 44 – 44 Share of equity-accounted investments, net of tax – – – – – – – (15) (15) Total other comprehensive income (loss) – – – – (45) 371 44 (15) 355 Comprehensive income (loss) for the year – – – – 1,800 371 44 (15) 2,200 Transactions with shareholders recorded directly in equity: Dividends declared – – – – (988) – – – (988) Shares issued on exercise of stock options – – – 2 – – – – – Share class exchange – (5) – 5 – – – – – Total transactions with shareholders – (5) – 7 (988) – – – (988) Balances, December 31, 2017 72 112,407 405 402,403 6,074 1,013 (63) (5) 7,496

The accompanying notes are an integral part of the consolidated financial statements.

94 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 95 | – 4 (6) 51 65 64 (60) (59) (79) (49) (71) (20) 858 109 746 685 (184) (735) (475) (988) (164) (156) 2017 3,938 5,148 5,312 2,142 1,845 (2,630) (2,436) (1,034) (1,243) note 2) (restated, see – – (6) 25 33 58 (54) (18) (44) (16) 508 388 411 405 793 758 (823) (125) (726) (370) (933) (988) (114) (354) 2018 4,288 5,384 5,498 2,211 2,059 (2,944) (2,790) ROGERS COMMUNICATIONS INC. 8 8 7 5 8 20 18 16 23 28 11 22 12 10 7, 8 7, 28 Note 2018 ANNUAL REPORT cash and short-term deposits that have an original maturity of less than 90 days, less bank of the consolidated financial statements. Other Recovery on wind-down of shomi Gain on disposition of property, plant and equipment Net change in contract asset balances Post-employment benefits contributions, net of expense Income tax expense Program rights amortization Depreciation and amortization Finance costs assets items, income taxes paid, and interest paid Net repayment of long-term debt Net proceeds received on short-term borrowings Changes in non-cash working capital related to capital expenditures and intangible Acquisitions and other strategic transactions, net of cash acquired Additions to program rights Other Net proceeds (payments) on settlement of debt derivatives and forward contracts Capital expenditures Interest paid Cash provided by operating activities beforeIncome income taxes taxes paid paid and interest paid Transaction costs incurred Change in non-cash operating working capital items Cash provided by operating activities before changes in non-cash working capital Dividends paid Adjustments to reconcile net income to cash provided by operating activities: Net income for the year Financing activities: Cash used in investing activities Cash provided by operating activities Investing activities: Change in cash and cash equivalents Cash used in financing activities Cash and cash equivalents (bank advances), end of year Bank advances, beginning of year The accompanying notes are an integral part Years ended December 31 Consolidated Statements of Cash(In Flows millions of Canadian dollars) Cash and cash equivalentsadvances. are defined as Operating activities: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Notes to Consolidated Financial Statements

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

Page Note Page Note 96 Note 1 Nature of the Business 117 Note 16 Financial Risk Management and Financial 97 Note 2 Significant Accounting Policies Instruments 104 Note 3 Capital Risk Management 127 Note 17 Investments 104 Note 4 Segmented Information 128 Note 18 Short-Term Borrowings 105 Note 5 Revenue 129 Note 19 Provisions 108 Note 6 Operating Costs 130 Note 20 Long-Term Debt 108 Note 7 Property, Plant and Equipment 132 Note 21 Other Long-Term Liabilities 111 Note 8 Intangible Assets and Goodwill 133 Note 22 Post-Employment Benefits 113 Note 9 Restructuring, Acquisition and Other 136 Note 23 Shareholders’ Equity 114 Note 10 Finance Costs 137 Note 24 Stock-Based Compensation 114 Note 11 Other (Income) Expense 139 Note 25 Related Party Transactions 114 Note 12 Income Taxes 140 Note 26 Guarantees 116 Note 13 Earnings Per Share 141 Note 27 Commitments and Contingent Liabilities 117 Note 14 Accounts Receivable 142 Note 28 Supplemental Cash Flow Information 117 Note 15 Inventories

NOTE 1: NATURE OF THE BUSINESS

Rogers Communications Inc. is a diversified Canadian See note 4 for more information about our reportable operating communications and media company. Substantially all of our segments. operations and sales are in Canada. RCI is incorporated in Canada and its registered office is located at 333 Bloor Street East, Toronto, BUSINESS SEASONALITY Ontario, M4W 1G9. RCI’s shares are publicly traded on the Toronto Our operating results generally vary from quarter to quarter as a Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock result of changes in general economic conditions and seasonal Exchange (NYSE: RCI). fluctuations, among other things, in each of our reportable segments. This means our results in one quarter are not necessarily We report our results of operations in three reportable segments. indicative of how we will perform in a future quarter. Wireless, Each segment and the nature of its business is as follows: Cable, and Media each have unique seasonal aspects to, and Segment Principal activities certain other historical trends in, their businesses. Fluctuations in net income from quarter to quarter can also be attributed to losses Wireless Wireless telecommunications operations on the repayment of debt, foreign exchange gains or losses, for Canadian consumers and businesses. changes in the fair value of derivative instruments, other income and expenses, impairment of assets, and changes in income tax Cable Cable telecommunications operations, including Internet, television, telephony expense. (phone), and smart home monitoring services for Canadian consumers and Wireless businesses, and network connectivity Wireless operating results are influenced by the timing of our through our fibre network and data centre marketing and promotional expenditures and higher levels of assets to support a range of voice, data, subscriber additions and related subsidies, resulting in higher networking, hosting, and cloud-based subscriber acquisition- and activation-related expenses, typically in services for the enterprise, public sector, the third and fourth quarters. The third and fourth quarters typically and carrier wholesale markets. experience higher volumes of activity as a result of “back to school” and holiday season-related consumer behaviour. Aggressive Media A diversified portfolio of media properties, promotional offers are often advertised during these periods. In including sports media and entertainment, contrast, we typically see lower subscriber-related activity in the first television and radio broadcasting, quarter of the year. specialty channels, multi-platform shopping, digital media, and publishing. The launch of popular new wireless device models can also affect the level of subscriber activity. Highly-anticipated device launches During the year ended December 31, 2018, Wireless and Cable typically occur in the fall season of each year. Wireless roaming were operated by our wholly-owned subsidiary, Rogers revenue is dependent on customer travel volumes and timing, and Communications Canada Inc. (RCCI), and certain other wholly- is also impacted by the foreign exchange rates and general owned subsidiaries. Media was operated by our wholly-owned economic conditions. subsidiary, Rogers Media Inc., and its subsidiaries.

96 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 97 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT advertising revenue andticket additional sales revenue and from merchandiseBlue game Jays sales, play day if in the and postseason; and when the Toronto expensed based on the numberapplicable; of and games aired or played, as months (generally the first andplayoff fourth quarters of the games year)(generally and are the concentrated secondcorrelation between quarter in the quality ofthe of the extent the revenue of Canadian and teams’ spring year). earnings presence during and We the months playoffs; expectthe a timing of when theconsumed; and rights are aired or are expected to be concentrated in theplayoff fall, games winter,revenue. commanding and spring a months, premium with in advertising • programming and production costs and player payroll are • regular season games are concentrated in the fall and winter • programming and production costs are expensed based on • advertising revenue and programming expenses are – at the average raterecognized. for the month in which the transaction was • the National Hockey League (NHL) season, where: (d) BUSINESS COMBINATIONS We accountmethod for of accounting. business Onlycontrol acquisitions combinations over that the result acquired using in businessescombinations. our are the accounted gaining for We as acquisition business conclude possess we are exposed control towith variable over the returns from acquired our anreturns involvement entity through our and entity power over we the acquired when have entity. theWe we ability calculate the to fair affect valuethe of fair those the value consideration at paid theand as date the the equity of interests sum acquisition we of of issued,acquire the less the the assets subsidiary. liabilities we we transferred assumed to We measuretransferred goodwill less as theassets the net fair acquired recognizedmeasured value and amount at fair of of value liabilities asis the the of negative, assumed, the a identifiable consideration acquisition gain which date. onincome. When acquisition the are is excess recognized immediately generally in net We expense the transactionwe incur costs them. associated with acquisitions as STATEMENT OF COMPLIANCE We prepared our consolidatedwith financial International statements Financial in Reporting accordance Standardsthe (IFRS) International as Accounting issued Standards by BoardDirectors (IASB). The (the Board of statements Board) for issue on authorized March 6, 2019. these consolidated financial • revenue and expenses other than depreciation and amortization and advertising are concentratedfall in the months spring, (generally summer,year), the and second with and postseason third games quarters commanding of a the premium in fall months (generallyyear); the second and third quarters of the at the date of the Consolidated Statements of Financial Position; amortization – at the historical exchange rates; and described in note 22; and fair value as disclosed in note 24. measured at fair value; • revenue related to game day ticket sales, merchandise sales, advertising and related retail cycles, whichin tend the to fourth be most quarter active duefirst quarter; to holiday spending and slower in the • games played are concentrated in the spring, summer, and out early in the second quarteras and students canceling moving their in service late ascable in well service; the third quarter and signing up for vacations or seasonal relocations; and quarter. (c) FOREIGN CURRENCY TRANSLATION We translate amountsCanadian dollars as denominated follows: in• foreign monetary assets currencies and liabilities into - at the• exchange rate non-monetary in assets effect and liabilities, as and related depreciation and (b) BASIS OF CONSOLIDATION Subsidiaries arestatements entities we ofstatements control. our from the We date subsidiaries weceases. include gain We control in the of eliminate them allbetween until our financial our our intercompany subsidiaries control on transactions consolidated consolidation. and balances financial • the net deferred• pension liabilities for liability, stock-based compensation, which which are measured is at measured as (a) BASIS OF PRESENTATION All amounts are infunctional Canadian dollars currency unlessconsolidated otherwise is financial noted. statements the Our onfor: a Canadian historical cost basis, dollar.• except We certain financial prepare instruments as the disclosed in note 16, which are NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Media Seasonal fluctuations relate to: • periods of increased consumer activity and their impact• on the Major League Baseball season, where: Cable results from our enterpriseany customers unique seasonal do aspects. not generally have Cable Cable’s operatingfluctuations, typically results caused by: are• university affected and college by students who modest live seasonal in residences moving • individuals temporarily• suspending the concentrated service marketing we generally for conduct in our extended fourth NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(e) NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN revenue recognized over the course of the contracts. The 2018 application of IFRS 15 does not affect our cash flows from We adopted new amendments to the following accounting operations or the methods and underlying economics through standards effective for our interim and annual consolidated which we transact with our customers. financial statements commencing January 1, 2018. These changes The treatment of costs incurred in acquiring customer contracts is did not have a material impact on our financial results. affected as IFRS 15 requires certain contract acquisition costs (such • Amendments to IFRS 2, Share-based payment,providing as sales commissions) to be recognized as an asset and amortized guidance on accounting for vesting and non-vesting conditions into operating expenses over time. Previously, such costs were in regards to share-based compensation. expensed as incurred. • IFRIC 22, Foreign currency transaction and advanced consideration, clarifying the requirements in determining the In addition, new assets and liabilities have been recognized on our date of transactions and which foreign exchange rate to use in Consolidated Statements of Financial Position. Specifically, a when translating assets, expenses, or income on initial contract asset and contract liability is recognized to account for any recognition. timing differences between the revenue recognized and the Additionally, we adopted IFRS 15, Revenue from contracts with amounts billed to the customer. customers (IFRS 15) and IFRS 9, Financial instruments (IFRS 9) Significant judgment is needed to determine whether a promise to effective January 1, 2018. The effects these two new delivergoodsorservicesisconsidereddistinctandindetermining pronouncements have on our results and operations are described the costs that are incremental to obtaining a contract with a below. customer.

IFRS 15, REVENUE FROM CONTRACTS WITH CUSTOMERS We have made a policy choice to adopt IFRS 15 with full IFRS 15 supersedes previous accounting standards for revenue, retrospective application, subject to certain practical expedients. As including IAS 18, Revenue (IAS 18) and IFRIC 13, Customer loyalty a result, all comparative information in these financial statements programmes (IFRIC 13). has been prepared as if IFRS 15 had been in effect since January 1, 2017. The accounting policies set out in note 5 have been applied IFRS 15 introduced a single model for recognizing revenue from in preparing the consolidated financial statements for the year contracts with customers. This standard applies to all contracts with ended December 31, 2018, the comparative information customers, with only some exceptions, including certain contracts presented in these consolidated financial statements for the year accounted for under other IFRSs. The standard requires revenue to ended December 31, 2017, and for the opening Consolidated be recognized in a manner that depicts the transfer of promised Statement of Financial Position as at January 1, 2017. In preparing goods or services to a customer and at an amount that reflects the our Consolidated Statements of Financial Position as at January 1, consideration expected to be received in exchange for transferring 2017 and December 31, 2017, we have adjusted amounts those goods or services. This is achieved by applying the following previously reported in financial statements prepared in accordance five steps: with previous IFRS on revenue recognition, including IAS 18 and 1. identify the contract with a customer; IFRIC 13. 2. identify the performance obligations in the contract; 3. determine the transaction price; Upon adoption of, and transition to, IFRS 15, we elected to utilize 4. allocate the transaction price to the performance the following practical expedients, allowing us to: obligations in the contract; and • recognize the incremental costs of obtaining contracts as an 5. recognize revenue when (or as) the entity satisfies a expense when incurred if the amortization period of the assets performance obligation. that we would have otherwise recognized would have been one year or less; IFRS 15 also provides guidance relating to the treatment of contract • not disclose, on an annual basis, the unsatisfied portions of acquisition and contract fulfillment costs. performance obligations related to contracts with a duration of The application of this new standard has significant impacts on our one year or less or where the revenue we recognize corresponds reported Wireless results, specifically with regards to the timing of with the amount invoiced to the customer; recognition and classification of revenue, and the treatment of • not disclose the amount of the transaction price relating to costs incurred in acquiring customer contracts. The timing of unsatisfied or partially satisfied performance obligations for recognition and classification of revenue is affected because, at reporting periods before January 1, 2018 (the date of initial contract inception, IFRS 15 requires the estimation of total application) and when we expect to recognize that amount as consideration over the contract term and the allocation of that revenue; and consideration to all performance obligations in the contract based • not adjust the total consideration over the contract term for on their relative stand-alone selling prices. This affects our Wireless effects of a significant financing component, if we expect that the arrangements that bundle equipment and service together into period between when we would transfer our good or service to monthly service fees, which results in an increase to equipment the customer and when the customer would pay for the good or revenue recognized at contract inception and a decrease to service service would be one year or less.

98 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 99 | As at December 31, 2017 ROGERS COMMUNICATIONS INC. (19) – (19) 746635 – 746 50 685 Year ended December 31, 2017 reported Adjustments Restated 8,825 42 8,867 1,711 134 1,845 14,143 226 14,369 $ 3.32$ 3.31 $ 0.26 $ 0.26 $ 3.58 $ 3.57 reported Adjustments Restated As previously As previously i, iii ii, iii 2018 ANNUAL REPORT Reference As at January 1, 2017 – 723 723 – 820 820 – 354 354 – 413 413 33 – 33 35 – 35 98 58 156 82 61 143 315 137 452 313 122 435 134 151 285 4 128 132 215 202 417 197 217 414 367 (65) 302 346 (68) 278 2,174 – 2,174 2,561 – 2,561 3,905 – 3,905 3,905 – 3,905 28,342 1,469 29,811 28,863 1,627 30,490 reported Adjustments Restated As previously i i i ii ii iii iii Reference 1 2 Depreciation and amortizationGain on disposition of property,Restructuring, plant acquisition and and equipment otherBasic Diluted (49) – 2,142 152 (49) – – 2,142 152 Operating costs Current portion of contract assets Other current assets Accounts receivableInventories 1,949 (5) 1,944 2,041 (6) 2,035 Contract liabilities Current portion of derivative instruments 91 – 91 421 – 421 Bank advancesShort-term borrowingsAccounts payable and accrued liabilitiesIncome tax payableOther current liabilities 2,783 – 800 2,783 71 186 – 2,931 – 800 – 71 186 – 1,585 2,931 62 6 – 1,585 – – 62 6 Current portion of long-term debtCurrent portion of derivative instruments 22 750 – – 22 750 1,756 133 – – 1,756 133 Previously reported as “current portion ofPreviously provisions”. reported as “unearned revenue”. Assets Current assets: Total current assetsProperty, plant and equipmentIntangible assetsInvestments Derivative instrumentsContract assets 10,749 2,570 – 1,708 7,130 1,057 10,749 3,627 11,143 – – 2,972 1,708 7,130 – 1,153 7,244 11,143 953 4,125 – – 7,244 953 Finance costs Other expense (income) Income before income tax expenseIncome tax expense Net income for the period Earnings per share: Reconciliation of Consolidated Statements of FinancialBelow Position is as at the January effect 1, of 20172017. transition and December to 31, IFRS 2017 15 on our Consolidated Statements of Financial Position as at January 1, 2017 and December 31, Other long-term assets Deferred tax 2,346 assetsGoodwill Total assets Liabilities and shareholders’ equity 184Current liabilities: 2,530 8 – 8 3 – 3 1 2 (In millions of dollars) (In millions of dollars, except per share amounts) Revenue Operating expenses: Reconciliation of Consolidated Statements of IncomeBelow for is the the year effect ended of Decemberpertain transition 31, to 2017 to our IFRS Wireless 15 segment. on our Consolidated Statements of Income for the year ended December 31, 2017, all of which Total current liabilitiesProvisions Long-term debtDerivative instrumentsOther long-term liabilitiesDeferred tax liabilitiesTotal liabilitiesShareholders’ equityTotal liabilities and shareholders’ equity 5,113 28,342 562 118 15,330 1,917 86 1,469 5,199 5,269 23,073 29,811 – – – 368 15,330 6,823 2,285 562 1,015 28,863 118 454 6,284 12,692 23,527 2,206 1,627 60 613 147 30,490 6,347 22,516 6,883 418 – 1,149 – 12,692 – 2,624 478 7,496 22,994 613 147 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The application of IFRS 15 did not affect our cash flow totals from instruments, new guidance for measuring impairment on financial operating, investing, or financing activities. assets, and new hedge accounting guidance. We have adopted IFRS 9 on a retrospective basis; however, our 2017 comparatives i) Contract assets and liabilities were not restated because it was not possible to do so without the Contract assets arise primarily as a result of the difference between use of hindsight. revenue recognized on the sale of a wireless device at the onset of a term contract and the cash collected at the point of sale. Revenue Under IFRS 9, financial assets are classified and measured based on recognized at point of sale requires the estimation of total the business model in which they are held and the characteristics of consideration over the contract term and the allocation of that their contractual cash flows. IFRS 9 contains three primary consideration to all performance obligations in the contract based measurement categories for financial assets: measured at on their relative stand-alone selling prices. For Wireless term amortized cost, fair value through other comprehensive income contracts, revenue is recognized earlier than previously reported, (FVTOCI), and fair value through profit and loss (FVTPL). Under IFRS with a larger allocation to equipment revenue. Prior to the adoption 9, we have irrevocably elected to present subsequent changes in of IFRS 15, the amount allocated to equipment revenue was limited the fair value of our equity investments that are neither held-for- to the non-contingent consideration received at the point of sale trading nor contingent consideration arising from a business when recovery of the remaining consideration in the contract was combination in other comprehensive income with no contingent upon the delivery of future services. reclassification of net gains and losses to net income. For these We record a contract liability when we receive payment from a equity investments, any impairment on the instrument will be customer in advance of providing goods and services. We account recorded in other comprehensive income, and cumulative gains or for contract assets and liabilities on a contract-by-contract basis, losses in other comprehensive income will not be reclassified into with each contract being presented as a single net contract asset or net income, including upon disposal. net contract liability accordingly. As a result, our previous “available-for-sale financial asset reserve” All contract assets are recorded net of an allowance for expected will now be referred to as the “FVTOCI investment reserve”. This credit losses, measured in accordance with IFRS 9. reserve represents the accumulated change in fair value of our equity investments that are measured at FVTOCI less accumulated ii) Deferred commission cost assets impairment losses related to the investments and accumulated Under IFRS 15, we defer incremental commission costs paid to amounts reclassified into retained earnings when gains and losses internal and external representatives as a result of obtaining are realized upon derecognition of the related investments. contracts with customers as deferred commission cost assets and amortize them to operating expenses over the pattern of the Under IFRS 9, the loss allowance for trade receivables must be transfer of goods and services to the customer, which is typically calculated using the expected lifetime credit loss and recorded at evenly over either 12 or 24 consecutive months. the time of initial recognition. A portion of our trade receivables required an incremental loss allowance in order to comply with the iii) Inventories and other current liabilities requirements of IFRS 9; as a result, we recognized a $4 million Under IFRS 15, we determine when the customer obtains control of decrease to accounts receivable and a corresponding decrease to the distinct good or service. For affected transactions, we have retained earnings within shareholders’ equity effective January 1, defined our customer as the end subscriber and determined that 2018. In addition, the expected loss allowance using the lifetime they obtain control when they receive possession of a wireless credit loss approach is applied to contract assets under IFRS 15. device, which typically occurs upon activation. For certain There is no significant effect on the carrying value of our other transactions through third-party dealers and other retailers, the financial instruments under IFRS 9 related to this new requirement. timing of when the customer obtains control of a wireless device will be deferred in comparison to our previous policy, where The new hedge accounting guidance aligns hedge accounting revenue was recognized when the wireless device was delivered more closely with an entity’s risk management objectives and and accepted by the independent dealer. This results in a greater strategies. IFRS 9 does not fundamentally change the types of inventory balance and a corresponding increase in other current hedging relationships or the requirement to measure and liabilities. recognize ineffectiveness; however, it allows more hedging strategies used for risk management to qualify for hedge IFRS 9, FINANCIAL INSTRUMENTS accounting and introduces more judgment to assess the In July 2014, the IASB issued the final publication of the IFRS 9 effectiveness of a hedging relationship, primarily from a qualitative standard, which supersedes IAS 39, Financial Instruments: standpoint. This is not expected to have an effect on our reported recognition and measurement (IAS 39). IFRS 9 includes revised results and will simplify our application of effectiveness tests going guidance on the classification and measurement of financial forward.

100 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 101 | ebt derivatives related case of investments, is net income. accounting purposes, the effective ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT FVTOCI with no reclassification to net income policies that haverecognized the in the most consolidated financial significant statements; and effect on the amounts ed cost)ed cost) Amortized cost Amortized cost • information about judgments made in applying• accounting information on our significant accounting policies. 1 amortized cost) Amortized cost s (amortized cost) Amortized cost lly or in the future. For derivatives designated as cash flow hedges for Held-for-trading (FVTPL) FVTPL Other financial liabilities (amortiz Other financial liabilities (amortiz Held-for-trading (FVTOCI where subject to hedge accounting and FVTPL)accounting)accounting) FVTOCI and FVTPL FVTOCI FVTOCI 2 5 4 2 3 Long-term debt Accrued liabilities Other financial liabilities ( Debt derivatives Bank advancesShort-term borrowings Accounts payableBond forwards Other financial liabilities (amortized Other cost) financial liabilitie Expenditure derivativesEquity derivatives Amortized cost Held-for-trading (FVTOCI under hedge Held-for-trading (FVTOCI under hedge Cash and cash equivalentsAccounts receivableInvestments Loans and receivables (amortized cost) Loans and receivables (amortized cost) Amortized cost Available-for-sale (FVTOCI) Amortized cost Financial liabilities Derivatives Financial instrumentFinancial assets IAS 39 IFRS 9 have a significant risk ofamounts resulting recognized in in the a consolidated material financial adjustment statements; to the Note Topic457 Reportable Segments8 Revenue Recognition12 Property, Plant and Equipment13 Intangible Assets and Income Goodwill Taxes14 Earnings Per15 Share Accounts Receivable16 Inventories17 Financial Instruments19 Investments22 Provisions24 Post-Employment Benefits27 108 Stock-Based 104 Compensation 111 Commitments and 105 Contingent Liabilities Page Accounting Policy X X Use X of Estimates X Use of 116 Judgments 117 114 141 117 133 137 X 117 X X X X X 127 X X X 129 X X X X X X X X X X X X X X X X Subsequent changes are offset against stock-based compensation expense or recovery in operating costs. Subsequently measured at amortized cost usingDerivatives the can effective be interest in method. an asset or liability position at a pointDebt in derivatives time related historica to our senior notes and debentures have been designated as hedges for accounting purposes and will be classified as FVTOCI. D Subsequently measured at fair value with changes recognized in other comprehensive income. The net change subsequent to initial recognition, in the to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes and will be classified as FVTPL. portionofthehedgeisrecognizedinaccumulatedothercomprehensiveincomeandtheineffectiveportionofthehedgeisrecognizedimmediatelyinto reclassified into net income upon disposal of the investment or when the investment becomes impaired. Whenmanagement preparing makes judgments, estimates,affect our and how assumptions accounting that policiesreport consolidated as are assets, applied liabilities, andaccounting financial revenue, policies, the and estimates, amounts and expenses. judgments we note Our statements, are significant identified or in disclosed this throughoutbelow: the notes as• identified in information about the assumptions table and estimation uncertainties that 5 (f) ADDITIONAL SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS 2 3 4 1 Below is a summaryadopting showing IFRS the 9 (along classification with and a comparison measurement to IAS bases 39). of our financial instruments as at January 1, 2018 as a result of NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(g) RECENT ACCOUNTING PRONOUNCEMENTS NOT YET We have elected to not separate fixed non-lease components from ADOPTED lease components and instead account for each lease component and associated fixed non-lease components as a single lease IFRS 16, LEASES (IFRS 16) component. We do not intend to elect the recognition exemptions Effective January 1, 2019, we will adopt IFRS 16. Our first quarter on short-term leases or low-value leases; however, we may choose 2019 interim financial statements will be our first financial to elect the recognition exemptions on a class-by-class basis for statements issued in accordance with IFRS 16. IFRS 16 supersedes new classes, and lease-by-lease basis, respectively, in the future. the current accounting standards for leases, including IAS 17, Leases (IAS 17) and IFRIC 4, Determining whether an arrangement We do not expect significant impacts for contracts in which we are contains a lease (IFRIC 4). the lessor. IFRS 16 introduces a single accounting model for lessees unless We have a team engaged to ensuring our compliance with IFRS 16, the underlying asset is of low value. A lessee will be required to including overseeing the implementation of a new lease system recognize, on its statement of financial position, a right-of-use asset, that enables us to comply with the requirements of the standard on representing its right to use the underlying leased asset, and a a contract-by-contract basis. This team has been responsible for lease liability, representing its obligation to make lease payments. determining and implementing additional process requirements, As a result of adopting IFRS 16, we will recognize a significant ensuring our data collection is appropriate, system testing, increase to both assets and liabilities on our Consolidated developing related internal controls, and communicating the Statements of Financial Position, as well as a decrease to operating upcoming changes with various stakeholders. We had detailed costs (for the removal of rent expense for leases), an increase to data validation processes that operated throughout the course of depreciation and amortization (due to depreciation of the right-of- 2018. use asset), and an increase to finance costs (due to accretion of the lease liability). The accounting treatment for lessors will remain USE OF ESTIMATES AND JUDGMENTS TO BE APPLIED largely the same as under IAS 17. ON ADOPTION OF IFRS 16 We will adopt IFRS 16 with the cumulative effect of initial ESTIMATES application recognized as an adjustment to retained earnings We will need to estimate the lease term by considering the facts within shareholders’ equity on January 1, 2019. We will not restate and circumstances that can create an economic incentive to comparatives for 2018. At transition, we will apply the practical exercise an extension option, or not exercise a termination option. expedient available to us as lessee that allows us to apply this We will make certain qualitative and quantitative assumptions when standard to contracts that were previously identified as leases deriving the value of the economic incentive. under IAS 17 and IFRIC 4. Conversely, we will not apply this standard to contracts that were previously not identified as leases under IAS 17 and IFRIC 4. JUDGMENTS We will make judgments in determining whether a contract For leases that were classified as operating leases under IAS 17, contains an identified asset. The identified asset should be lease liabilities at transition will be measured at the present value of physically distinct or represent substantially all of the capacity of the remaining lease payments, discounted at the related incremental asset, and should provide us with the right to substantially all of the borrowing rate as at January 1, 2019. Generally, right-of-use assets economic benefits from the use of the asset. at transition will be measured at an amount equal to the corresponding lease liabilities, adjusted for any prepaid or accrued We will also make judgments in determining whether we have the rent outstanding. For certain leases where we have readily available right to control the use of the identified asset. We have that right information, we will elect to measure the right-of-use assets at their when we have the decision-making rights that are most relevant to carrying amounts as if IFRS 16 had been applied since the lease changing how and for what purpose the asset is used. In rare cases commencement date using the related incremental borrowing rate where the decisions about how and for what purpose the asset is for the remaining lease period as at January 1, 2019. used are predetermined, we have the right to direct the use of the When applying IFRS 16 to leases previously classified as operating asset if we either have the right to operate the asset or the asset has leases, the following practical expedients are available to us. We been designed in a way that predetermines how and for what will: purpose the asset will be used. • apply a single discount rate to a portfolio of leases with similar We will make judgments in determining the discount rate used to characteristics; measure each of our lease liabilities. The discount rate applied • exclude initial direct costs from measuring the right-of-use asset should reflect the interest that we would have to pay to borrow a as at January 1, 2019; and similar amount at a similar term and with a similar security. • use hindsight in determining the lease term where the contract contains purchase, extension, or termination options.

102 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 103 | transition as at Subsequent to January 1, 2019 ROGERS COMMUNICATIONS INC. IFRS 16 transition Estimated effect of –0.20.2 –1.41.4 11.831.9 1.5 1.5 13.3 33.4 23.7 1.5 25.2 2018 ANNUAL REPORT As reported as at December 31, 2018 i i i payments made at or before the commencement date; plus asset or restore the site on which it is located; less reasonably certain to exercise the option; and reasonably certain not to exercise the option. that lease recognized inPosition the immediately Consolidated before the Statements date of of Financial initial application. After transition, the right-of-usecost, consisting asset of: will initially• be the measured initial at amount of the• lease any liability, initial direct adjusted costs• incurred; for and an any estimate lease of costs to• dismantle any and lease incentives remove received. theThe underlying right-of-use asset will typicallybasis be over depreciated on the a lease straight-line term,the unless leased we asset expect at to theof: obtain end ownership of of the lease.• The lease the term non-cancellable will period consist of• the lease; periods covered by options to extend• the periods lease, covered where by options we to are terminate the lease, where we are Reference Other current assetsRemainder of current assets 4.5 0.4 — *** 4.5 0.4 Accounts payable and accrued liabilitiesCurrent portion of lease liabilities Remainder of current liabilities 3.1 3.7 (0.1) 3.0 – 3.7 Current assets: Total current assetsProperty, plant and equipment 4.9 *** 4.9 Remainder of long-term assetsCurrent liabilities: Total current liabilitiesLease liabilities Deferred tax liabilitiesRemainder of long-term liabilitiesTotal liabilities Shareholders’ equity 15.2 – 15.2 14.0 6.8 2.9 0.1 – 8.2 *** 14.0 6.9 *** 2.9 8.2 reasonably certain torenewal exercise, period lease payments ifextension in option, we and an penalties are optional unless for we are reasonably early reasonably termination certain certain not of to terminate a to early. lease exercise an guarantee; and Assets Total assets Liabilities and shareholders’ equity Total liabilities and shareholders’ equity 31.9 1.5 33.4 Upon transition,information except to for measureamounts those the leases as right-of-usecommencement where assets if date, at we as IFRS theirwill discussed have be carrying above, 16 the measured the at hadthe right-of-use the amount asset amount of been of any the prepaid applied lease or liability, accrued since lease adjusted payments by the relating to lease • the exercise price under a purchase option that we are *** Amounts less than $0.1 billion; these amounts have been excluded from subtotals. i) Right-of-use assets and lease liabilities We will record acommencement right-of-use date. asset The and lease a liability willthe lease initially present liability be value at measured at of thecommencement lease lease payments that remain date.measurement to of be the paid lease liability at Lease will• the include: fixed payments, payments including in-substance• fixed payments; variable included lease payments that• depend on in amounts an index or expected rate; the to be payable under a residual value (In billions of dollars) EFFECT OF TRANSITION TO IFRS 16 Below is the estimated effect of transition to IFRS 16 on our Consolidated Statements of Financial Position as at January 1, 2019. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3: CAPITAL RISK MANAGEMENT

Our objectives in managing capital are to ensure we have sufficient the business, conduct valuation-related analyses, and make liquidity to meet all of our commitments and to execute our decisions about capital. business plan. We define capital that we manage as shareholders’ The wholly-owned subsidiary through which our Rogers World Elite equity and indebtedness (including current portion of our long- Mastercard, Rogers Platinum Mastercard, and Fido Mastercard term debt, long-term debt, and short-term borrowings). programs are operated is regulated by the Office of the We manage our capital structure, commitments, and maturities Superintendent of Financial Institutions, which requires that a and make adjustments based on general economic conditions, minimum level of regulatory capital be maintained. Rogers’ financial markets, operating risks, our investment priorities, and subsidiary was in compliance with that requirement as at working capital requirements. To maintain or adjust our capital December 31, 2018 and 2017. The capital requirements are not structure, we may, with approval from the Board, issue or repay material to the Company as at December 31, 2018 or debt and/or short-term borrowings, issue or repurchase shares, pay December 31, 2017. dividends, or undertake other activities as deemed appropriate With the exception of the Rogers World Elite Mastercard, Rogers under the circumstances. The Board reviews and approves the Platinum Mastercard, and Fido Mastercard programs and the annual capital and operating budgets, as well as any material subsidiary through which they are operated, we are not subject to transactions that are not part of the ordinary course of business, externally-imposed capital requirements. Our overall strategy for including proposals for acquisitions or other major financing capital risk management has not changed since December 31, transactions, investments, or divestitures. 2017. We monitor debt leverage ratios as part of the management of liquidity and shareholders’ return to sustain future development of

NOTE 4: SEGMENTED INFORMATION

ACCOUNTING POLICY products were previously reported within Corporate items and Reportable segments intercompany eliminations. We have retrospectively amended our We determine our reportable segments based on, among other 2017 comparative segment results to account for this redefinition. things, how our chief operating decision maker, the Chief Executive We follow the same accounting policies for our segments as those Officer and Chief Financial Officer of RCI, regularly review our described in the notes to our consolidated financial statements. operations and performance. Effective January 1, 2018, they review We account for transactions between reportable segments in the adjusted EBITDA as the key measure of profit for the purpose of same way we account for transactions with external parties, but assessing performance of each segment and to make decisions eliminate them on consolidation. about the allocation of resources, as they believe adjusted EBITDA more fully reflects segment and consolidated profitability. Adjusted EBITDA is defined as income before depreciation and amortization; USE OF ESTIMATES AND JUDGMENTS (gain) loss on disposition of property, plant and equipment; JUDGMENTS restructuring, acquisition and other; finance costs; other expense We make significant judgments in determining our operating (income); and income tax expense. Previously, our chief operating segments. These are components that engage in business activities decision maker reviewed adjusted operating profit as the key from which they may earn revenue and incur expenses, for which measure of profit. The difference between adjusted operating operating results are regularly reviewed by our chief operating profit and adjusted EBITDA is that adjusted EBITDA includes stock- decision makers to make decisions about resources to be allocated based compensation expense, which has been allocated to each of and assess component performance, and for which discrete our reportable segments. financial information is available.

Effective January 1, 2018, we redefined our reportable segments as EXPLANATORY INFORMATION a result of technological evolution and the increased overlap Our reportable segments are Wireless, Cable, and Media (see between the various product offerings within our legacy Cable and note 1). All three segments operate substantially in Canada. legacy Business Solutions reportable segments, as well as how we Corporate items and eliminations include our interests in allocate resources amongst, and the general management of, our businesses that are not reportable operating segments, corporate reportable segments. The results of our legacy Cable segment, administrative functions, and eliminations of inter-segment revenue legacy Business Solutions segment, and our Smart Home and costs. Segment results include items directly attributable to a Monitoring products are presented within a redefined Cable segment as well as those that can be allocated on a reasonable segment. Financial results related to our Smart Home Monitoring basis.

104 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 105 | (49) (16) (32) (19) 152 210 793 746 totals totals 2,817 2,530 2,142 2,211 Consolidated Consolidated items and items and ROGERS COMMUNICATIONS INC. Corporate Corporate eliminations eliminations 2018 ANNUAL REPORT 806 1,334 83 287 2,510 8,569 3,894 2,153 (247) 14,369 4,843 2,075 2,026 (77) 8,867 9,200 3,932 2,168 (204) 15,096 5,110 2,058 1,972 (27) 9,113 1,086 1,429 90 210 2,815 Wireless Cable Media Wireless Cable Media 5 6 7 9 5 6 7 9 10 10 11 11 7, 8 7, 8 Note Note Many ofarrangements (e.g. our wireless handsets, and productsItems voice and data in and services). performance these services obligations arrangements if aredistinct are good the or sold accounted item service.can modify meets We for in their also contract the as determine within bundled not definition predefined whether able terms separate a of to such customer that enforcecontractually a we the are enforce transaction a price lowerwe agreed amount. allocate to, In but revenue situations can betweenminimum such only performance as enforceable obligations these, usingamount rights is the recognized as and revenue as it obligations is earned. and any excess 1 1 consideration provided by the customer; obligations in thevalues; and contract based on their relativeeach performance obligation. fair 1. identify2. the contract with a customer; identify3. the performance obligations in the determine contract; the4. transaction price, allocate the which transaction is price the among5. the total performance recognize revenue when the relevant criteria are met for Excludes proceeds on disposition of $74 million (see note 28). Excludes proceeds on disposition of $25 million (see note 28). Income before income tax expense Income before income tax expense Capital expenditures before proceeds on disposition Capital expenditures before proceeds on disposition Revenue Operating costs Gain on disposition of property, plantRestructuring, and acquisition equipment and other Revenue Adjusted EBITDADepreciation and amortization 3,726 1,819 127 (170) 5,502 Operating costs Gain on disposition of property, plantRestructuring, and acquisition equipment and other Finance costs Adjusted EBITDADepreciation and amortization 4,090 1,874 196 (177) 5,983 Finance costs Other income Other income GoodwillTotal assets 16,572 1,160 7,666 1,808 2,438 937 5,242 – 31,918 3,905 ACCOUNTING POLICY Contracts with customers We record revenue fromwith the contracts five with steps in customers IFRS 15 in as accordance follows: NOTE 5: REVENUE 1 Year ended December 31, 2017 (In millions of dollars) (restated, see note 2) 1 INFORMATION BY SEGMENT Year ended December 31, 2018 (In millions of dollars) GoodwillTotal assets 15,860 1,160 7,315 1,808 2,405 937 4,910 – 30,490 3,905 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue for each performance obligation is recognized either over time (e.g. services) or at a point in time (e.g. equipment). For performance obligations satisfied over time, revenue is recognized as the services are provided. These services are typically provided, and thus recognized, on a monthly basis. Revenue for performance obligations satisfied at a point in time is recognized when control of the item (or service) transfers to the customer. Typically, this is when the customer activates the goods (e.g. in the case of a wireless handset) or has physical possession of the goods (e.g. other equipment). Below, we have outlined the nature of the various performance obligations in our contracts with customers and when we recognize performance on those obligations.

Performance obligations from contracts with customers Timing of satisfaction of the performance obligation Wireless airtime and data services, cable, telephony, Internet, and As the service is provided (usually monthly) smart home monitoring services, network services, media subscriptions, and rental of equipment Roaming, long-distance, and other optional or non-subscription As the service is provided services, and pay-per-use services Wireless devices and related equipment Upon activation or purchase by the end customer Installation services for Cable subscribers When the services are performed Advertising When the advertising airs on our radio or television stations, is featured in our publications, or displayed on our digital properties Subscriptions by television stations for subscriptions from cable When the services are delivered to cable and satellite providers’ and satellite providers subscribers (usually monthly) Toronto Blue Jays’ home game admission and concessions When the related games are played during the baseball season and when goods are sold Toronto Blue Jays, radio, and television broadcast agreements When the related games are aired Sublicensing of program rights Over the course of the applicable licence period

We also recognize interest revenue on credit card receivables using related contracts. We therefore defer them as deferred commission the effective interest method in accordance with IFRS 9. cost assets in other assets and amortize them to operating costs over the pattern of the transfer of goods and services to the Payment terms for typical Wireless and Cable contracts range from customer, which is typically evenly over either 12 or 24 consecutive 0 to 30 days, with payment for equipment due upon receipt of the months. equipment and monthly service fees due 30 days after billing. Payment terms for typical Media performance obligations range from immediate (for example, Toronto Blue Jays tickets) to 30 days USE OF ESTIMATES AND JUDGMENTS (for example, advertising contracts). ESTIMATES We use estimates in the following key areas: Contract assets and liabilities • determining the transaction price of our contracts requires We record a contract asset when we have provided goods and estimating the amount of revenue we expect to be entitled to for services to our customer but our right to related consideration for delivering the performance obligations within a contract; and the performance obligation is conditional on satisfying other • determining the stand-alone selling price of performance performance obligations. Contract assets primarily relate to our obligations and the allocation of the transaction price between rights to consideration for the transfer of wireless handsets. performance obligations. We record a contract liability when we receive payment from a Determining the transaction price customer in advance of providing goods and services. This includes The transaction price is the amount of consideration that is subscriber deposits, deposits related to Toronto Blue Jays ticket enforceable and to which we expect to be entitled in exchange for sales, and amounts subscribers pay for services and subscriptions the goods and services we have promised to our customer. We that will be provided in future periods. determine the transaction price by considering the terms of the We account for contract assets and liabilities on a contract and business practices that are customary within that contract-by-contract basis, with each contract presented as either a particular line of business. Discounts, rebates, refunds, credits, price netcontractassetoranetcontractliabilityaccordingly. concessions, incentives, penalties, and other similar items are reflected in the transaction price at contract inception. Deferred commission cost assets We defer, to the extent recoverable, the incremental costs we incur Determining the stand-alone selling price and the allocation of the to obtain or fulfill a contract with a customer and amortize them transaction price over their expected period of benefit. These costs include certain The transaction price is allocated to performance obligations based commissions paid to internal and external representatives that we on the relative stand-alone selling prices of the distinct goods or believe to be recoverable through the revenue earned from the services in the contract. The best evidence of a stand-alone selling

106 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 107 | 260 278 278 302 260 310 (284) (292) 2017 2017 223 233 296 278 278 340 (268) (322) 2018 2018 ROGERS COMMUNICATIONS INC. Years ended December 31 Years ended December 31 2019 2020 2021 Thereafter Total 2018 ANNUAL REPORT contracts with a duration of one year or less; or revenue we recognize corresponds withthe the customer. amount invoiced to service 2,410 985 169 137 3,701 customers recognized as revenue in current year assets commission cost assets Telecommunications Upon adoption of, andutilize transition the following to, practical expedients IFRS and• 15, not disclose: we the have unsatisfied elected portions to of performance• obligations the related unsatisfied to portions of performance obligations where the UNSATISFIED PORTIONS OF PERFORMANCE OBLIGATIONS The table below shows thefuture revenue we related expect toobligations to as recognize at in unsatisfied December the 31, 2018.transaction or The price unsatisfied of portion partially the of the performanceservices; satisfied obligations we relates expect to to performance monthly recognize it over the next three to five(In years. millions of dollars) CONTRACT LIABILITIES Below is a summary of thecontracts current portion with of contract customers liabilitiesbalances from during and the years ended the December 31, significant 2018 and 2017. changes in those DEFERRED COMMISSION COST ASSETS Below is a summarycost of assets the recognized changesobtain in from the contracts the deferredDecember incremental commission 31, with costs 2018assets incurred customers are and presented to 2017. within during otheramortized The current into assets net deferred (when income the commission within theyfinancial twelve will statements) cost or months be years other of long-term the assets. date ended of the (In millions of dollars) Net additions from contracts with Balance, end of year (In millions of dollars) Balance, end of year Balance, beginning of year Revenue deferred in previous year and Balance, beginning of year Additions to deferred commission cost Amortization recognized on deferred 2017 1,233 1,077 1,196 (1,040) 2018 1,587 1,233 1,572 (1,218) Years ended December 31 customers, net of terminations and renewals accounts receivable Below is acontract summary assets from of contractschanges the in with those current customers balances and2018 and during and the the 2017. long-term years significant ended portions December 31, of EXPLANATORY INFORMATION CONTRACT ASSETS Determining costs to obtain or fulfillDetermining a contract the costs wemeet incur the to obtain deferralsignificant or criteria judgments. fulfill a within Wepaid contract to expect IFRS that internal and incremental 15 external representativescontracts commission requires as with customers a fees to result us be of recoverable. obtaining to make Distinct goods and services We make judgments ingoods determining or whether services a is promise consideredproducts to and distinct. deliver services We separately account if foror they service individual are is distinct separately (i.e. identifiable ifpackage from a and other product if items the in customer the canis bundled benefit allocated from it). between The separate consideration based products on their and stand-alone servicesseparately selling in prices. (e.g. a For items bundle third-party weselling prices do gift using not the adjusted sell cards), market assessment we approach. estimate stand-alone JUDGMENTS We make significant judgments into determining whether a deliver promise determining the goods costs that or area incremental contract with to services a obtaining customer. of fulfilling is considered distinct and in price is the observablesells price that of good a or service goodsimilar separately or in service customers. similar when circumstances If and theobservable, to entity we a estimate stand-alone theaccount selling stand-alone reasonably selling price available priceconditions, entity-specific information is taking factors, and into relating not the class to of directly customer. theIn market determining the stand-alonebetween selling performance price, obligations weenforceable based allocate on amounts revenue expected toabove minimum which the Rogers isrevenue minimum as entitled. they enforceable are Any earned. amounts amounts are recognized as (In millions of dollars) Balance, end of year Balance, beginning of year Additions from new contracts with Amortization of contract assets to NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have also elected to use the practical expedient allowing us to DISAGGREGATION OF REVENUE not disclose the amount of the transaction price relating to unsatisfied or partially satisfied performance obligations for Years ended December 31 reporting periods before January 1, 2018 (the date of initial 2018 2017 application) and when we expect to recognize that amount as (In millions of dollars) (restated, see note 2) revenue. Wireless Service revenue 7,091 6,765 Equipment revenue 2,109 1,804 Total Wireless 9,200 8,569 Cable Internet 2,114 1,967 Television 1,442 1,501 Phone 363 411 Service revenue 3,919 3,879 Equipment revenue 13 15 Total Cable 3,932 3,894 Total Media 2,168 2,153 Corporate items and intercompany eliminations (204) (247) Total revenue 15,096 14,369

NOTE 6: OPERATING COSTS

Years ended December 31 2018 2017 (In millions of dollars) (restated, see note 2) Cost of equipment sales 2,284 2,022 Merchandise for resale 231 237 Other external purchases 4,509 4,497 Employee salaries, benefits, and stock-based compensation 2,089 2,111 Total operating costs 9,113 8,867

NOTE 7: PROPERTY, PLANT AND EQUIPMENT

ACCOUNTING POLICY We depreciate property, plant and equipment over its estimated Recognition and measurement, including depreciation useful life by charging depreciation expense to net income as We measure property, plant and equipment upon initial follows: recognition at cost and begin recognizing depreciation when the Estimated asset is ready for its intended use. Subsequently, property, plant Asset Basis useful life and equipment is carried at cost less accumulated depreciation and accumulated impairment losses. Buildings Diminishing balance 5 to 40 years Cable and wireless network Straight-line 3 to 40 years Cost includes expenditures (capital expenditures) that are directly Computer equipment and Straight-line 4 to 10 years attributable to the acquisition of the asset. The cost of self- software constructed assets includes: Customer premise equipment Straight-line 3 to 6 years • the cost of materials and direct labour; Leasehold improvements Straight-line Over shorter of • costs directly associated with bringing the assets to a working estimated useful condition for their intended use; life or lease term • expected costs of decommissioning the items and restoring the Equipment and vehicles Diminishing balance 3 to 20 years sites on which they are located (see note 19); and • borrowing costs on qualifying assets.

108 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 109 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT future cash flowssimilar to for the five-year valueapplying in periods assumptions use consistent methodology and with described thosewould above, a a while make. market terminal participant Future value, cashexpected future flows operating are results basedfuture of on the cash CGU. our flows, Our estimatessimilar terminal estimates of of values, factors andestimates; discount to or rates those consider described aboveof for the valuecomparable CGU entities in and precedent using transactions use in that multiples industry. of operating performance of JUDGMENTS We makedepreciating our significant property, plantmost judgments and accurately equipment in represent thatfrom the we those choosing believe consumption assetssubstance of and methods of the are benefits intended use most derived for of the representative underlying of assets. the economic estimated usefulequipment lives of assets.prospectively. They did certain not Thesestatements have of in a material 2018 our changes effectdepreciation and in on future customer they our periods. financial have will premise notWe have been use a material estimatesattributable effect applied to to on self-constructed determineinclude assets. certain certain internal These costs andinterest estimates that external primarily direct are costs labour,development, directly overhead, or betterment and associated of our networks. withFurthermore, the we use acquisition,amount estimates of property, construction, in plantthe determining and recoverable the equipment. amount Therequires recoverable the for determination use of of the significant estimates, purpose• such as: of future cash impairment flows; • testing terminal growth rates; and • discount rates. We estimate valueestimated future in cash flows use todiscounted their for present future value. impairment We cash estimatedepending tests on the the by flows CGU, and discounting for aare terminal based value. periods on The future our of cashof estimates flows and the up expected CGU future to afteroutlook operating considering for results five economic the conditions CGU’s years, industry. andrates Our a discount of general rates consider return, market among debt other to things. equity Thethe ratios, terminal CGU’s and value operations certain iscash beyond risk the flows the value premiums, using attributed projected aconditions to time and perpetuity a period general rate outlook of based for the the on industry. expectedWe determine economic fair value less costsways: to sell in one of• the following two Analyzing discounted cash flows – we estimate the discounted • Usingamarketapproach–weestimatetherecoverableamount Wemakecertainassumptionswhenderivingexpectedfuturecash flows, which may includeterminal assumptions growth pertaining to rates. discountquickly These and depending assumptions on may economictherefore differ conditions possible or or othernegatively change that events. affect It future future is could valuations result in changes of impairment losses. CGUs in and goodwill, assumptions which may ful lives at least once a year and change them if theyWe are recognize different from the ourprospectively. effect previous estimates. of changes in estimatesIn 2018, in we net reviewed the income plant depreciation and rates for equipment. all of The our review property, resulted in an increase in the USE OF ESTIMATES AND JUDGMENTS ESTIMATES Components of anhave item different of property, usefuldetermining plant lives. depreciation rates and We and asset equipment make usefultaking may lives, which significant into require estimates accountexperience when company-specific and factors,technological expected such advancements. as use, ourvalues, We depreciation and past rates, monitor and industry asset and use trends, review such residual as Recognition and measurement of an impairmentAn charge item of property,goodwill plant and is equipment, impaired ancarrying intangible if amount. asset, The the or recoverable recoverable amounthigher of of amount its: a CGU is or less• asset is than fair the value the less costs• to sell; value and in use. If our estimate ofthan the its asset’s or carrying CGU’srecoverable amount, recoverable amount we amount is reduceimmediately. less and its carrying recognize amount to theWe the reverse loss a previously recognizedof in impairment loss the if recoverable net our amount estimate has of income increased a such previously that impairedyear asset the has or impairment CGU recognized reversed.asset’s in The a or reversal previous CGU’s isrecoverable recognized amount. carrying by The amountsubsequent increasing carrying to to the amount our the ofamount reversal new the if we asset cannot estimate hadyears. or be not of CGU recognized greater its an than impairment its loss in carrying previous Impairment testing We test non-financial assetswhenever with an finite event or usefulcarrying change lives amounts in for may circumstances impairment not indicatesthe that be their recoverable. recoverable The amount assetcannot is is impaired estimate less if the thanbecause the recoverable it carrying does amount not amount.the of entire generate If cash an generating independent unit we individual cash (CGU) for inflows, impairment. asset weA CGU test is thecash smallest inflows identifiable largely groupassets of independent or assets groups of of that assets. the generates cash inflows from other We calculate gains andand equipment losses by on comparing the thethe proceeds disposal from item’s the of carrying disposal property, with amountincome. plant and recognize the gain orWe loss capitalize in development net expendituresfor if recognition as they an meet assetuseful the lives and once criteria amortize the them assets to overWe which their they expected relate expense are availabletraining for research costs use. as incurred. expenditures, maintenance costs, and NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EXPLANATORY INFORMATION

(In millions of dollars) December 31, 2018 December 31, 2017 December 31, 2016 Net Net Net Accumulated carrying Accumulated carrying Accumulated carrying Cost depreciation amount Cost depreciation amount Cost depreciation amount Land and buildings 1,125 (428) 697 1,090 (397) 693 1,062 (375) 687 Cable and wireless networks 21,024 (13,550) 7,474 20,252 (13,206) 7,046 20,108 (13,035) 7,073 Computer equipment and software 5,514 (3,305) 2,209 4,996 (2,807) 2,189 4,296 (2,424) 1,872 Customer premise equipment 1,908 (1,279) 629 1,565 (1,090) 475 1,560 (1,156) 404 Leasehold improvements 539 (250) 289 496 (220) 276 457 (193) 264 Equipment and vehicles 1,292 (810) 482 1,246 (782) 464 1,169 (720) 449 Total property, plant and equipment 31,402 (19,622) 11,780 29,645 (18,502) 11,143 28,652 (17,903) 10,749

The tables below summarize the changes in the net carrying amounts of property, plant and equipment during 2018 and 2017.

(In millions of dollars) December 31, 2017 December 31, 2018 Net carrying Net carrying amount Additions 1 Depreciation Other 2 amount Land and buildings 693 40 (32) (4) 697 Cable and wireless networks 7,046 1,556 (1,128) – 7,474 Computer equipment and software 2,189 653 (633) – 2,209 Customer premise equipment 475 423 (269) – 629 Leasehold improvements 276 44 (31) – 289 Equipment and vehicles 464 99 (81) – 482 Total property, plant and equipment 11,143 2,815 (2,174) (4) 11,780

1 Excludes proceeds on disposition of $25 million (see note 28). 2 Includes disposals, reclassifications, and other adjustments.

(In millions of dollars) December 31, 2016 December 31, 2017 Net carrying Net carrying amount Additions 1 Depreciation Other 2 amount Land and buildings 687 61 (30) (25) 693 Cable and wireless networks 7,073 1,125 (1,150) (2) 7,046 Computer equipment and software 1,872 867 (549) (1) 2,189 Customer premise equipment 404 315 (244) – 475 Leasehold improvements 264 40 (28) – 276 Equipment and vehicles 449 102 (86) (1) 464

Total property, plant and equipment 10,749 2,510 (2,087) (29) 11,143

1 Excludes proceeds on disposition of $74 million (see note 28). 2 Includes disposals, reclassifications, and other adjustments.

Property, plant and equipment not yet in service and therefore not $25 million (2017 – $74 million) for these assets, thereby subject to depreciation as at December 31, 2018 was recognizing a $16 million (2017 – $49 million) gain on disposition. $1,339 million (2017 – $1,076 million). During 2018, capitalized Annually, we perform an analysis to identify fully depreciated assets interest pertaining to property, plant and equipment was that have been disposed of. In 2018, this resulted in an adjustment recognized at a weighted average rate of approximately 3.9% to cost and accumulated depreciation of $943 million (2017 – (2017 – 4.0%). $1,136 million). The disposals had nil impact on the Consolidated In 2018, we disposed of certain assets with a net carrying amount Statements of Income. of $9 million (2017 – $25 million). We received total proceeds of

110 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 111 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT IMPAIRMENT TESTING We test intangiblewhenever assets an event with or finitecarrying change in amounts useful circumstances may indicates lives notintangible that for assets their be and impairment recoverable. goodwill WeOctober for impairment test once 1, indefinite-life perimpairment. year or as at more frequentlyIf we if cannotintangible we estimate asset because the identify itinflows, recoverable we does indicators test amount not the entire of generate of CGU to independent an which it cash Goodwill individual belongs is for impairment. allocated tolevel CGUs (or at groups which of managementhigher CGUs) monitors than based on goodwill, an the which operatingmade to cannot segment. CGUs be The (or allocationfrom groups of the of goodwill CGUs) synergies that is goodwill of arose. are the expected business to benefit combination from whichRecognition the and measurement of an impairmentAn charge intangible assetamount is or less goodwill thanof the a is carrying CGU or amount. impaired asset The is• recoverable if the higher amount fair of the value its: less recoverable costs• to sell; value and in use. We reverse arespect previously of goodwill, recognized if ourpreviously impairment estimate of loss, impaired the except recoverable assetimpairment amount in or of a recognized CGUreversal in has is increased a recognized by suchamount previous increasing that the to year the asset’s ourcarrying or has amount CGU’s new reversed. carrying of the estimatecannot The be asset greater of or than CGU its itsan carrying subsequent impairment amount loss recoverable to had in previous we the years. amount. not reversal recognized The contract towards future years’recognized rights as fees, theseexpenses intangible prepayments over are the assets contractare term. and made To the for amortizedincluded extent annual in that to other contractual current prepayments assets operating fees onFinancial our Position, within Consolidated Statements as a of thetwelve season, months. rights they will be are consumed within the next Goodwill We recognize goodwill arisingthe from fair business value combinations of when liabilities the separately we identifiable assets assumed(including we the is acquired recognized and lower amount ofany). than the If non-controlling the interest, the if fair considerationthat value we of the paid of considerationimmediately transferred recognize the the is difference lower as a than separately gain in net income. identified assets and liabilities, we intended use. purchase taxes, afterand deducting trade discounts and rebates; Intangible asset Estimated useful life Customer relationships 3 to 10 years Finite useful lives We amortize intangibleacquired assets program rights, with into depreciation finite andConsolidated amortization useful on Statements lives, the of other Incometheir than estimated on useful lives a as noted straight-lineand in basis the table review over below. Wemethods the monitor at useful leastdifferent lives, from once our residual per previouschanges estimates. values, year in We estimates and in recognize and net the income change effects amortization prospectively. of them if they are Indefinite useful lives We do not amortize intangible assetsspectrum licences, with broadcast indefinite licences, lives, and including certain brand names. • any directly attributable cost of preparing the asset for its RECOGNITION AND MEASUREMENT, INCLUDING AMORTIZATION Upon initial recognition,unless they we are acquired measure throughcase a intangible business they combination, assets in which areamortization at on measured cost intangible assets atasset is with ready fair finite for its useful intended value.at lives use. Subsequently, when We the asset the cost is beginimpairment carried losses. recognizing less accumulatedCost includes expenditures amortizationacquisition that of are andintangible directly asset the comprises: attributable accumulated asset. to• the its The purchase price, cost including import of duties and a non-refundable separately-acquired NOTE 8: INTANGIBLE ASSETS AND GOODWILL ACCOUNTING POLICY Acquired program rights Program rights are contractual rightsto we broadcast acquire programs, from including thirdevents. rights parties We to recognize broadcast them liveand at sporting accumulated cost impairment less losses. accumulated Weon amortization capitalize the program rights Consolidatedlicence Statements period of begins Financialamortize and Position them the to when program otherthe the is external available purchases Consolidated for inexhibition use operating Statements period. costs and on of Ifconsider we the Income related have program overOtherwise, no rights we impaired intention the test and to them writefinite expected useful for air them lives. impairment off. programs, as we intangible assetsThe with costs foragreements multi-year are sports recognizedapplicable and seasons in based television operating onaired broadcast expenses the or pattern rights during inprepayments are the which are expected the made rights to are at be the consumed. commencement of To a the multi-year extent that NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

USE OF ESTIMATES AND JUDGMENTS Wemakecertainassumptionswhenderivingexpectedfuturecash ESTIMATES flows, which may include assumptions pertaining to discount and We use estimates in determining the recoverable amount of terminal growth rates. These assumptions may differ or change intangible assets and goodwill. The determination of the quickly depending on economic conditions or other events. It is recoverable amount for the purpose of impairment testing requires therefore possible that future changes in assumptions may the use of significant estimates, such as: negatively affect future valuations of CGUs and goodwill, which • future cash flows; could result in impairment losses. • terminal growth rates; and If our estimate of the asset’s or CGU’s recoverable amount is less • discount rates. than its carrying amount, we reduce its carrying amount to the We estimate value in use for impairment tests by discounting recoverable amount and recognize the loss in net income estimated future cash flows to their present value. We estimate the immediately. discounted future cash flows for periods of up to five years, depending on the CGU, and a terminal value. The future cash flows JUDGMENTS are based on our estimates and expected future operating results We make significant judgments that affect the measurement of our of the CGU after considering economic conditions and a general intangible assets and goodwill. outlook for the CGU’s industry. Our discount rates consider market Judgment is applied when deciding to designate our spectrum rates of return, debt to equity ratios, and certain risk premiums, and broadcast licences as assets with indefinite useful lives since we among other things. The terminal value is the value attributed to believe the licences are likely to be renewed for the foreseeable the CGU’s operations beyond the projected time period of the future such that there is no limit to the period over which these cash flows using a perpetuity rate based on expected economic assets are expected to generate net cash inflows. We make conditions and a general outlook for the industry. judgments to determine that these assets have indefinite lives, We determine fair value less costs to sell in one of the following two analyzing all relevant factors, including the expected usage of the ways: asset, the typical life cycle of the asset, and anticipated changes in • Analyzing discounted cash flows – we estimate the discounted the market demand for the products and services the asset helps future cash flows for five-year periods and a terminal value, generate. After review of the competitive, legal, regulatory, and similar to the value in use methodology described above, while other factors, it is our view that these factors do not limit the useful applying assumptions consistent with those a market participant lives of our spectrum and broadcast licences. would make. Future cash flows are based on our estimates of Judgment is also applied in choosing methods of amortizing our expected future operating results of the CGU. Our estimates of intangible assets and program rights that we believe most future cash flows, terminal values, and discount rates consider accurately represent the consumption of those assets and are most similar factors to those described above for value in use representative of the economic substance of the intended use of estimates; or the underlying assets. • Usingamarketapproach–weestimatetherecoverableamount of the CGU using multiples of operating performance of Finally, we make judgments in determining CGUs and the comparable entities and precedent transactions in that industry. allocation of goodwill to CGUs or groups of CGUs for the purpose of impairment testing.

EXPLANATORY INFORMATION

(In millions of dollars) December 31, 2018 December 31, 2017 December 31, 2016

Cost prior to Accumulated Net Cost prior to Accumulated Net Cost prior to Accumulated Net impairment Accumulated impairment carrying impairment Accumulated impairment carrying impairment Accumulated impairment carrying losses amortization losses amount losses amortization losses amount losses amortization losses amount

Indefinite-life intangible assets: Spectrum licences 6,600 – – 6,600 6,600 – – 6,600 6,416 – – 6,416 Broadcast licences 333 – (99) 234 329 – (99) 230 329 – (99) 230 Brand names 420 (270) (14) 136 420 (270) (14) 136 420 (270) (14) 136 Finite-life intangible assets: Customer relationships 1,609 (1,562) – 47 1,609 (1,525) – 84 1,609 (1,470) – 139 Acquired program rights 251 (58) (5) 188 263 (64) (5) 194 289 (75) (5) 209

Total intangible assets 9,213 (1,890) (118) 7,205 9,221 (1,859) (118) 7,244 9,063 (1,815) (118) 7,130 Goodwill 4,126 – (221) 3,905 4,126 – (221) 3,905 4,126 – (221) 3,905

Total intangible assets and goodwill 13,339 (1,890) (339) 11,110 13,347 (1,859) (339) 11,149 13,189 (1,815) (339) 11,035

112 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 113 | 47 234 136 188 6,600 7,017 7,205 3,905 11,110 amount amount rates (%) Net carrying Net carrying Pre-tax discount 2 2 Other ee note 6), and $37 million in Other seenote6),and$55millionin ROGERS COMMUNICATIONS INC. rates (%) 1 1 Terminal growth 2018 ANNUAL REPORT Period of Net Net flows (years) projected cash additions Amortization additions Amortization 6,921 195 (55) (11) 7,050 7,050 4 (37) – amount amount consisted ofrestructuring of severance our employee baseother costs contract and termination certain costs. associated sports-related and with the targeted We didgoodwill not recognize orrecoverable an intangible amounts of impairment the assets CGUs exceeded charge their in carrying values. related 2018 to or our 2017 because the Net carrying Net carrying ts is included in other external purchases in operating costs (s Recoverable amount method Carrying value of indefinite-life on related to acquired program righ intangible assets Consolidated Statements of Income. Consolidated Statements of Income. of goodwill Carrying value depreciation and amortization on the depreciation and amortization on the Includes disposals, writedowns, reclassifications, and other adjustments. Of the $119 million of total amortization, $64 million related to acquired program rights is included in other external purchases in operating costs ( Includes disposals, writedowns, reclassifications, and other adjustments. Of the $95 million of total amortization, $58 milli Spectrum licencesBroadcast licencesBrand namesCustomer relationshipsAcquired program rightsTotal intangible assetsGoodwillTotal intangible assets and goodwill 6,600 230 84 11,149 – 194 136 4 7,244 – 58 54 – 58 – 3,905 – (37) (95) (58) – – (95) – – – (2) (2) (2) – – – During the$210 million year (2017 – ended $152other million) in expenses. December restructuring, acquisition These and 31, expenses 2018, in we 2018 and incurred 2017 primarily NOTE 9: RESTRUCTURING, ACQUISITION AND OTHER (In millions of dollars, except periods used and rates) Spectrum licencesBroadcast licencesBrand namesCustomer relationshipsAcquired program rightsTotal intangible assetsGoodwillTotal intangible assets and goodwillANNUAL IMPAIRMENT TESTING For purposes of testing goodwillnote 4. for impairment, our CGUs, orBelow groups is of an CGUs, overview correspondCGUs, of to with the our indefinite-life methods intangible operating assets and segments or key as goodwill 6,416 that assumptions disclosed we we in consider used significant. in 2018 to 230 determine recoverable 139 amounts for CGUs, or 184 groups of 11,035 209 136 11 7,130 – 254 59 – – 254 3,905 – (55) (119) – (64) (11) (119) – (21) – – (10) 6,600 (21) 11,149 230 – 84 194 7,244 – 136 – 3,905 1 2 2 (In millions of dollars) December 31, 2016 December 31, 2017 1 The tables below summarize the changes in the net carrying(In amounts millions of of dollars) intangible assets and goodwill in 2018 and 2017. December 31, 2017 December 31, 2018 WirelessCableMediaOur fair value measurement forfair Media value is hierarchy. classified as Level 3 in the 1,160 1,808 937 6,734 Value in use – 236 Value in use Fair value less cost to sell 5 5 5 0.5 2.0 1.5 11.3 8.4 7.8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10: FINANCE COSTS Years ended December 31 These foreign exchange losses were partially offset by the $95 million gain related to the change in fair value of derivatives (In millions of dollars) Note 2018 2017 (2017 – $99 million loss), which was primarily attributed to the debt Interest on borrowings 1 709 740 derivatives, which were not designated as hedges for accounting Interest on post-employment benefits purposes, we used to partially offset the foreign exchange risk liability 22 14 12 related to these US dollar-denominated borrowings. In 2017, these Loss on repayment of long-term debt 20 28 – foreign exchange gains were primarily attributed to our US dollar- Loss (gain) on foreign exchange 136 (107) denominated commercial paper (US CP) program borrowings and Change in fair value of derivative the US dollar-denominated borrowings under our bank credit instruments (95) 99 facilities that were not hedged for accounting purposes. Capitalized interest (20) (18) Other 21 20 During the year ended December 31, 2018, we determined that we would no longer be able to exercise certain ten-year bond Total finance costs 793 746 forward derivatives within the originally designated time frame. 1 Interest on borrowings includes interest on short-term borrowings and on long-term Consequently, we discontinued hedge accounting on those bond debt. forward derivatives and reclassified a $21 million loss from the hedging reserve within shareholders’ equity to finance costs LOSS ON REPAYMENT OF LONG-TERM DEBT (recorded in “change in fair value of derivative instruments”). We We recognized a $28 million loss on repayment of long-term debt subsequently extended the bond forwards to May 31, 2019, with this year reflecting the payment of redemption premiums the ability to extend them further, and redesignated them as associated with our redemption of US$1.4 billion of senior notes in effective hedges. See note 16 for more information on our bond April 2018 that were otherwise due in August 2018. See note 20 for forward derivatives. more information.

FOREIGN EXCHANGE AND CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS We recognized $136 million in net foreign exchange losses in 2018 (2017 – $107 million in net gains). These losses in 2018 were primarily attributed to our US dollar-denominated commercial paper (US CP) program borrowings (see note 16). NOTE 11: OTHER (INCOME) EXPENSE Years ended December 31 In 2017, we recognized a $20 million provision reversal related to the wind-down of shomi, which accompanied the windup of the (In millions of dollars) Note 2018 2017 partnership (see note 17). This reversal was recorded in income Income from associates and joint from associates and joint ventures. ventures 17 – (14) Other investment income (32) (5) Total other income (32) (19)

NOTE 12: INCOME TAXES ACCOUNTING POLICY Income tax expense includes both current and deferred taxes. We liabilities using enacted or substantively enacted tax rates that will recognize income tax expense in net income unless it relates to an apply in the years in which the temporary differences are expected item recognized directly in equity or other comprehensive income. to reverse. We provide for income taxes based on all of the information that is Deferred tax assets and liabilities are offset if there is a legally currently available. enforceable right to offset current tax assets and liabilities and they Current tax expense is tax we expect to pay or receive based on relate to income taxes levied by the same authority on: our taxable income or loss during the year. We calculate the •thesametaxableentity;or current tax expense using tax rates enacted or substantively • different taxable entities where these entities intend to settle enacted as at the reporting date, including any adjustment to taxes current tax assets and liabilities on a net basis or the tax assets payable or receivable related to previous years. and liabilities will be realized and settled simultaneously. Deferred tax assets and liabilities arise from temporary differences We recognize a deferred tax asset for unused losses, tax credits, between the carrying amounts of the assets and liabilities we and deductible temporary differences to the extent it is probable recognize on our Consolidated Statements of Financial Position that future taxable income will be available to use the asset. and their respective tax bases. We calculate deferred tax assets and

114 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 115 | – 9 2 1 7 3 (10) 676 685 2017 2017 2,530 27.1% 26.7% (2,624) (2,621) (restated, (restated, seenote2) seenote2) – – 5 1 9 – (9) As at December 31 752 758 2018 2,817 2018 26.9% 26.7% (2,910) (2,910) Years ended December 31 ROGERS COMMUNICATIONS INC. deferred deferred cost assets Other Total cost assets Other Total commission commission Contract and Contract and loss loss 2018 ANNUAL REPORT Non-capital Non-capital carryforwards carryforwards compensation losses investments change Non-deductible stock-based Non-deductible portion of equity Non-deductible loss on FVTOCI Income tax adjustment, legislative tax Non-taxable portion of capital gains Other resulting from: DEFERRED TAX ASSETS AND LIABILITIES (In millions of dollars) Deferred tax assets Below is a summary ofcomputed the difference by between income applying taxbefore expense the income statutory tax income expenseyear. tax and rate the to income tax income expense for the Income before income tax expense Computed income tax expense Increase (decrease) in income tax expense Statutory income tax rate (In millions of dollars, except rates) Deferred tax liabilities Net deferred tax liability Total income tax expense Effectiveincometaxrate Goodwill 2 and other Goodwill intangibles Investments and other 334 685 332 351 intangibles Investments 2017 (restated, seenote2) Property, plant and Property, equipment plant and – equipment and inventory 275 758 275 483 and inventory 2018 Years ended December 31 due to legislative changes Revaluation of deferred tax balances Origination of temporary differences income – – 63 – – (77) (14) Total income tax expense Total deferred tax expense (In millions of dollars) January 1, 2017Expense in net income(Expense) recovery in other comprehensive incomeOtherDecember 31, 2017 – – (113) (62) (947) (117) (1,060) (953) – (1,075) (3) (61) – (126) – (6) 24 (5) 18 57 (50) (368) (418) – (5) (45) 28 40 (334) (2,277) (2,621) – – – (5) January 1, 2018(Expense) recovery in net incomeRecovery(expense)inothercomprehensive December 31, 2018 (85) (117) (1,060) (1,145) (1,075) (3) (1,192) (126) 11 (66) 18 (97) 29 (418) 16 (515) 40 (275) (2,621) (21) (2,910) Deferred tax assets (liabilities) (In millions of dollars) (restated, see note 2) Deferred tax assets (liabilities) (In millions of dollars) EXPLANATORY INFORMATION USE OF ESTIMATES AND JUDGMENTS JUDGMENTS We makeregulations significant when judgments wejudgments in to calculate evaluate interpreting whether income webased can tax tax recover on a rules our expense. deferred tax assessmentprofitability, We asset and of and tax existing make planning strategies. tax laws, estimates of future Deferred tax expense: Current tax expense: Total current tax expense Below is a summary of the movement of net deferred tax assets and liabilities during 2018 and 2017. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have not recognized deferred tax assets for the following items: There are taxable temporary differences associated with our investments in Canadian domestic subsidiaries. We do not As at December 31 recognize deferred tax liabilities for these temporary differences because we are able to control the timing of the reversal and the (In millions of dollars) 2018 2017 reversal is not probable in the foreseeable future. Reversing these Realized and accrued capital losses in taxable temporary differences is not expected to result in any Canada that can be applied against future significant tax implications. capital gains 98 – Tax losses in foreign jurisdictions that expire between 2023 and 2037 68 41 Deductible temporary differences in foreign jurisdictions 25 23 Total unrecognized temporary differences 191 64

NOTE 13: EARNINGS PER SHARE

ACCOUNTING POLICY EXPLANATORY INFORMATION We calculate basic earnings per share by dividing the net income or loss attributable to our RCI Class A Voting and RCI Class B Years ended December 31 Non-Voting shareholders by the weighted average number of RCI 2018 2017 Class A Voting and RCI Class B Non-Voting shares (Class A Shares (restated, and Class B Non-Voting Shares, respectively) outstanding during (In millions of dollars, seenote2) the year. except per share amounts) Numerator (basic) – Net income for We calculate diluted earnings per share by adjusting the net the year 2,059 1,845 income or loss attributable to Class A and Class B Non-Voting shareholders and the weighted average number of Class A Shares Denominator – Number of shares (in and Class B Non-Voting Shares outstanding for the effect of all millions): dilutive potential common shares. We use the treasury stock Weighted average number of method for calculating diluted earnings per share, which considers shares outstanding – basic 515 515 the impact of employee stock options and other potentially dilutive Effect of dilutive securities (in millions): instruments. Employee stock options and restricted share units 1 2 Options with tandem stock appreciation rights or cash payment alternatives are accounted for as cash-settled awards. As these Weighted average number of shares awards can be exchanged for common shares of the Company, outstanding – diluted 516 517 they are considered potentially dilutive and are included in the calculation of the Company’s diluted net earnings per share if they Earnings per share: have a dilutive impact in the period. Basic $4.00 $3.58 Diluted $3.99 $3.57

For the year ended December 31, 2018, accounting for outstanding share-based payments using the equity-settled method for stock-based compensation was determined to be more dilutive than using the cash-settled method. As a result, net income for the year ended December 31, 2018 was reduced by $2 million in the diluted earnings per share calculation. There was no effect for the year ended December 31, 2017. For the year ended December 31, 2018, there were 37,715 options out of the money (2017 – 489,835) for purposes of the calculation of earnings per share. These options were excluded from the calculation of the effect of dilutive securities because they were anti-dilutive.

116 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 117 | 62 (61) 435 373 653 2017 2017 2,035 1,443 (restated, (restated, seenote2) seenote2) 67 (55) 785 466 399 2018 As at December 31 As at December 31 2018 2,259 1,529 16 Note ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Total inventories Cost of equipment$2,515 million sales (2017 – $2,259 and million) of merchandise inventory costs for for 2018. resale includes Total accounts receivable EXPLANATORY INFORMATION (In millions of dollars) EXPLANATORY INFORMATION (In millions of dollars) Wireless devices and accessories Other finished goods and merchandise Customer accounts receivable Allowance for doubtful accounts Other accounts receivable ble initially at fair value, and ACCOUNTING POLICY Recognition We initially recognize cash andliabilities cash on equivalents, the bank advances, datebecome accounts they a receivable, party originate. debt to All securities, the and contractual other provisions accounts financial of payable the assets and instrument. and accrued financial liabilities are initially recognized on the trade date when we NOTE 16: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS ACCOUNTING POLICY We measuremerchandise for inventories, resale,weighted at average including cost the basisand lower for wireless of Wireless a devices costmerchandise) and (determined devices first-in, accessories and on first-out net a writedown and realizable to basis value. netrecognized for cost, We if realizable the inventories other reverse value, later increase a in not finished value. previous to goods exceed and the original NOTE 15: INVENTORIES subsequently at amortizedincome. cost, We with measure an changes impairment lossthe recognized for excess accounts in of receivable as net the carryingcashflowsweexpecttoderivefromit,ifany.Theexcessisallocated amount over the presentto value an of allowance future fornet doubtful income. accounts and recognized as a loss in We initiallyoriginate. recognize We measure accounts accounts receiva receivable on the date they NOTE 14: ACCOUNTS RECEIVABLE ACCOUNTING POLICY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Classification and measurement We measure financial instruments by grouping them into classes upon initial recognition, based on the purpose of the individual instruments. We initially measure all financial instruments at fair value plus, in the case of our financial instruments not classified as FVTPL or FVTOCI, transaction costs that are directly attributable to the acquisition or issuance of the financial instruments. The classifications and methods of measurement subsequent to initial recognition of our financial assets and financial liabilities are as follows:

Financial instrument Classification and measurement method Financial assets Cash and cash equivalents Amortized cost Accounts receivable Amortized cost Investments, measured at FVTOCI FVTOCI with no reclassification to net income 1 Financial liabilities Bank advances Amortized cost Short-term borrowings Amortized cost Accounts payable Amortized cost Accrued liabilities Amortized cost Long-term debt Amortized cost Derivatives 2 Debt derivatives 3 FVTOCI and FVTPL Bond forwards FVTOCI Expenditure derivatives FVTOCI Equity derivatives FVTPL 4

1 Subsequently measured at fair value with changes recognized in the FVTOCI investment reserve. 2 Derivatives can be in an asset or liability position at a point in time historically or in the future. For derivatives designated as cash flow hedges for accounting purposes, the effective portionofthehedgeisrecognizedinaccumulatedothercomprehensiveincomeandtheineffectiveportionofthehedgeisrecognizedimmediatelyintonet income. 3 Debt derivatives related to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes and are measured at FVTPL. Debt derivatives related to our senior notes and debentures are designated as hedges for accounting purposes and are measured at FVTOCI. 4 Subsequent changes are offset against stock-based compensation expense or recovery in operating costs.

Offsetting financial assets and financial liabilities We offset financial assets and financial liabilities and present the net amount on the Consolidated Statements of Financial Position when we have a legal right to offset them and intend to settle on a net basis or realize the asset and liability simultaneously.

Derivative instruments We use derivative instruments to manage risks related to certain activities in which we are involved. They include:

Derivatives The risk they manage Types of derivative instruments Debt derivatives Impact of fluctuations in foreign exchange rates on Cross-currency interest rate exchange agreements principal and interest payments for US dollar- Forward foreign exchange agreements (from time to denominated senior notes and debentures, credit time as necessary) facility borrowings, and commercial paper borrowings Bond forwards Impact of fluctuations in market interest rates on Forward interest rate agreements forecast interest payments for expected long-term debt Expenditure derivatives Impact of fluctuations in foreign exchange rates on Forward foreign exchange agreements forecast US dollar-denominated expenditures Equity derivatives Impact of fluctuations in share price on stock-based Total return swap agreements compensation expense

We use derivatives only to manage risk, and not for speculative We assess, on a quarterly basis, whether each hedging instrument purposes. continues to be highly effective in offsetting the changes in the fair value or cash flows of the item it is hedging. When we designate a derivative instrument as a hedging instrument for accounting purposes, we first determine that the We assess host contracts in order to identify embedded derivatives. hedging instrument will be highly effective in offsetting the Embedded derivatives are separated from the host contract and changes in fair value or cash flows of the item it is hedging. We accounted for as separate derivatives if the host contract is not a then formally document the relationship between the hedging financial asset and certain criteria are met. instrument and hedged item, including the risk management objectives and strategy and the methods we will use to assess the ongoing effectiveness of the hedging relationship.

118 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 119 | ROGERS COMMUNICATIONS INC. we measure an impairment – we measure an impairment loss for 2018 ANNUAL REPORT – we measure an impairment loss for contract Contract assets assets based onallocated the to an lifetime allowance expected foras doubtful a credit loss accounts in and losses, net recognized incomeAccounts which (see note is 5). receivable accounts receivable based on the lifetimewhich expected credit is losses, allocatedrecognized to as a an loss in allowance netInvestments income for (see measured note doubtful at 14). accounts FVTOCIloss – and for equity investments measuredthe at cost FVTOCI as to the acquire excesspreviously the of asset recognized) (less over anydifference impairment is its recognized loss in we current the FVTOCI have investment fair reserve. value, if any. The USE OF ESTIMATES AND JUDGMENTS ESTIMATES Fair value estimates related topoint our in derivatives time are based made on at relevantabout a market the specific information underlying and financial information instruments.assessment These estimates of require the creditthe risk of instruments’ the discount partiesestimates rates. to are These the also instruments used fair in and relationships. values the tests and of underlying effectiveness of our hedging JUDGMENTS We makefinancial significant judgments instrumentsjudgments in include qualify determining assessingdesignated whether for whether as our thematerialize hedge forecast hedged as transactions accounting. itemsdesignated as forecast, effective These in hedgesto for whether qualitatively hedging accounting be purposes effective, continue the relationshipsdetermine and determining the will hedging the methodology fairhedging relationships. to relationships values used in testing the effectiveness of We measure impairment for financial assets• as follows: • • We consider financial assetscontract to assets be and accounts in receivable, default theto counterparty when, satisfy is in its unlikely the obligationsFVTOCI case to cannot us of in default. full. Todefault, Our determine investments we if measured our consider at financialoutstanding, the assets the amount are reason in ofexample, for time if the the for customer amount which hasdeactivated, ongoing whether it being voluntarily service or or has outstanding involuntarily), ifof and been (for they the have risk the been profile receivable underlying when customers. theyperiod of We time. have typically been outstanding write-off for accounts a significant Impairment (expected credit losses) We consider the credit riskand at of each a reporting financial period asseta thereafter at until financial it initial is asset recognition derecognized. thatreporting For date is and determined that torisk has since have not initial low recognition, had we credit significant measureon any increases risk the impairment in loss at credit based credit the lossesmonths. we For expect other financial toloss assets, recognize we based over will on the measure the nextsuch an lifetime twelve impairment as expected trade creditfinancing receivables losses. and Certain components, contract assets, expected must assets credit losses. without always significant beLifetime expected recorded credit losses are atevents estimates of over lifetime all possible the default month expected expected credit life lossesevents of are estimates within a of twelve financial allexpected possible life instrument. months of default a Twelve- of financial instrument, the whichever is reporting shorter. Financial assets date that are or significant inAll over value are other assessed the individually. financialnature assets of each are asset. assessed collectively based on the FVTOCI investment reserve The FVTOCIchange investment in fair value reserve ofFVTOCI our equity represents investments less that areinvestments the and measured accumulated accumulated at amounts accumulated reclassified impairment into equity. losses related to the Deferred transaction costs and discounts We defer transaction costslong-term and debt discounts associated andrevolving with direct credit issuing costs facilitiesinterest method we and over the amortize pay life of them the to related instrument. using lenders the to effective obtain Hedging reserve The hedging reservevalue represents of the the derivative accumulated instrumentshedges to change the in extent for they fair reclassified were accounting into effective net income. purposes, less accumulated amounts Hedge ratio Our policy is tofrom hedge principal 100% and ofdenominated senior the interest notes foreign and payment debentures. currencyto We obligations risk typically 100% hedge arising of on up forecastcurrency US foreign cash dollar- currency inflows. expenditures Weinterest net rate have risk of on also foreign forecast future hedged senior note up issuances. to 100% of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EXPLANATORY INFORMATION Below is summary of the aging of our customer accounts We are exposed to credit, liquidity, market price, foreign exchange, receivable. and interest rate risks. Our primary risk management objective is to As at December 31 protect our income, cash flows, and, ultimately, shareholder value. We design and implement the risk management strategies 2018 2017 discussed below to ensure our risks and the related exposures are (restated, consistent with our business objectives and risk tolerance. Below is (In millions of dollars) seenote2) a summary of our potential risk exposures by financial instrument. Customer accounts receivable (net of allowance for doubtful accounts) Less than 30 days past billing date 970 894 Financial instrument Financial risks 30-60 days past billing date 300 303 Financial assets 61-90 days past billing date 100 113 Cash and cash equivalents Credit and foreign exchange Greater than 90 days past billing date 104 72 Accounts receivable Credit and foreign exchange Total 1,474 1,382 Investments, measured Liquidity, market price, and at FVTOCI foreign exchange Below is a summary of the activity related to our allowance for Financial liabilities doubtful accounts. Bank advances Liquidity Years ended December 31 Short-term borrowings Liquidity, foreign exchange, and interest rate 2018 2017 Accounts payable Liquidity (restated, Accrued liabilities Liquidity (In millions of dollars) seenote2) Long-term debt Liquidity, foreign exchange, Balance, beginning of year 61 59 and interest rate Allowance for doubtful accounts expense 201 179 Derivatives 1 Net use 1 (207) (177) Debt derivatives Credit, liquidity, and foreign exchange Balance, end of year 55 61

Bond forwards Credit, liquidity, and interest 1 Includes $17 million of recoveries arising from the sale of fully provided for accounts rate receivable for the year ended December 31, 2018 (2017 – nil). Expenditure derivatives Credit, liquidity, and foreign We use various controls and processes, such as credit checks, exchange deposits on account, and billing in advance, to mitigate credit risk. Equity derivatives Credit, liquidity, and market We monitor and take appropriate action to suspend services when price customers have fully used their approved credit limits or violated 1 Derivatives can be in an asset or liability position at a point in time historically or in the established payment terms. While our credit controls and future. processes have been effective in managing credit risk, they cannot eliminate credit risk and there can be no assurance that these CREDIT RISK controls will continue to be effective or that our current credit loss Credit risk represents the financial loss we could experience if a experience will continue. counterparty to a financial instrument, from whom we have an Credit risk related to our debt derivatives, bond forwards, amount owing, failed to meet its obligations under the terms and expenditure derivatives, and equity derivatives arises from the conditions of its contracts with us. possibility that the counterparties to the agreements may default Our credit risk exposure is primarily attributable to our accounts on their obligations. We assess the creditworthiness of the receivable and to our debt, expenditure, and equity derivatives. counterparties to minimize the risk of counterparty default and do Our broad customer base limits the concentration of this risk. Our not require collateral or other security to support the credit risk accounts receivable on the Consolidated Statements of Financial associated with these derivatives. Counterparties to the entire Position are net of allowances for doubtful accounts, which portfolio of our derivatives are financial institutions with a S&P management estimates based on lifetime expected credit losses. Global Ratings (or the equivalent) ranging from A+ to AA-.

Our accounts receivable do not contain significant financing LIQUIDITY RISK components and therefore we measure our allowance for doubtful Liquidity risk is the risk that we will not be able to meet our financial accounts using lifetime expected credit losses related to our obligations as they fall due. We manage liquidity risk by managing accounts receivable. We believe the allowance for doubtful our commitments and maturities, capital structure, and financial accounts sufficiently reflects the credit risk associated with our leverage (see note 3). We also manage liquidity risk by continually accounts receivable. As at December 31, 2018, $477 million monitoring actual and projected cash flows to ensure we will have (2017 – $489 million) of gross accounts receivable are considered sufficient liquidity to meet our liabilities when due, under both past due, which is defined as amounts outstanding beyond normal normal and stressed conditions, without incurring unacceptable credit terms and conditions for the respective customers. losses or risking damage to our reputation.

120 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 121 | 5years 5years More than More than years years 4to5 4to5 tives. tives. ROGERS COMMUNICATIONS INC. years years 1to3 1to3 1year 1year 2018 ANNUAL REPORT Less than Less than cash flows cash flows Contractual Contractual – (8,405)– (1,756) (934) – (934) – – (6,649) – – – (8,254)– (1,601) – (1,601) – – (1,842) (6,412) – – 17,885 18,148 6,016 1,796 2,052 8,284 18,135 18,237 6,061 2,343 1,997 7,836 amount amount Carrying Carrying 5years 5years More than More than 1 1 1 1 years years 4to5 4to5 years years 1to3 1to3 1year 1year Less than Less than Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar)Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar) – (1,506) (1,054) – (452) 1,538 – 1,093 – 7,417 445 – 1,435 – – – – 5,982 Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar)Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar) – (1,473) (1,146) – (327) 1,341 – 1,045 – 6,920 296 – – – – – 1,392 5,528 Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar) – 956 956 – – – Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar) – 1,560 1,560 – – – Represents Canadian dollar equivalent amount of US dollar inflows matched to an equal amount of US dollar maturities in long-term debt for debt deriva Represents Canadian dollar equivalent amount of US dollar inflows matched to an equal amount of US dollar maturities in long-term debt for debt deriva teln-emiacalaiiis9 92322 Bank advancesShort-term borrowingsAccounts payable and accrued liabilitiesLong-term debtOtherlong-termfinancialliabilities Expenditure derivative instruments: Equity derivative instrumentsDebt derivative instruments accounted for as hedges: 2,931 2,931 1,585 2,931 1,585 6 14,448 – 1,585 14,555 – 6 1,756 – – (68) 1,800 6 – – 2,050 (68) – 8,949 – – – – – – Short-term borrowingsAccounts payable and accrued liabilitiesLong-term debtOther long-term financial liabilitiesExpenditure derivative instruments: Equity derivative instrumentsDebt derivative instruments accounted for as hedges: 3,052 3,052 2,255 38 3,052 2,255 14,290 38 – 2,255 14,404 – 1 – – 900 (92) 2,350 24 – – (92) 2,442 5 8,712 – – 8 – – Net interest paymentsNet interest payments 658 1,141 913 5,923 712 1,160 908 5,409 December 31, 2017 (In millions of dollars) December 31, 2018 (In millions of dollars) 1 Below is a summary oflong-term the net interest debt, payments over includingderivatives, the as life at of the December the 31, 2018 impact and 2017. of the associated debt December 31, 2017 (In millions of dollars) 1 Below is a summary ofas the at undiscounted December contractual 31, maturities 2018 of and 2017. our financial liabilities and the receivableDecember 31, components 2018 of our derivatives (In millions of dollars) odowrs–6464––– Debt derivative instruments not accounted for as hedges: Bondforwards Net carrying amount of derivatives (asset) (1,094) odowrs–8787––– Debt derivative instruments not accounted for as hedges: Bondforwards Net carrying amount of derivatives (asset) (1,500) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARKET PRICE RISK Below is a sensitivity analysis for significant exposures with respect Market price risk is the risk that changes in market prices, such as to our publicly traded investments, expenditure derivatives, short- fluctuations in the market prices of our investments measured at term borrowings, senior notes, and bank credit facilities as at FVTOCI or our share price will affect our income, cash flows, or the December 31, 2018 and 2017 with all other variables held value of our financial instruments. The derivative instruments we use constant. It shows how net income and other comprehensive to manage this risk are described in this note. income would have been affected by changes in the relevant risk variables. Market price risk – publicly traded investments We manage risk related to fluctuations in the market prices of our Other investments in publicly traded companies by regularly reviewing comprehensive publicly available information related to these investments to Net income income ensure that any risks are within our established levels of risk (Change in millions of dollars) 2018 2017 2018 2017 tolerance. We do not engage in risk management practices such as Share price of publicly traded hedging, derivatives, or short selling with respect to our publicly investments $1 change – – 14 14 traded investments. Expenditure derivatives – change in foreign exchange rate $0.01 Market price risk – Class B Non-Voting Shares change in Cdn$ relative to US$ – – 8 9 Short-term borrowings Our liability related to stock-based compensation is remeasured at 1% change in interest rates 17 12 – – fair value each period. Stock-based compensation expense is affected by the change in the price of our Class B Non-Voting Shares during the life of an award, including stock options, DERIVATIVE INSTRUMENTS restricted share units (RSUs), and deferred share units (DSUs). We As at December 31, 2018 and 2017, all of our US dollar- use equity derivatives from time to time to manage the exposure in denominated long-term debt instruments were hedged against our stock-based compensation liability. As a result of our equity fluctuations in foreign exchange rates for accounting purposes. derivatives, a one-dollar change in the price of a Class B Non-Voting Share would not have a material effect on net income. Below is a summary of our net asset (liability) position for our various derivatives. FOREIGN EXCHANGE RISK As at December 31, 2018 We use debt derivatives to manage risks from fluctuations in foreign exchange rates associated with our US dollar-denominated long- Notional Notional Fair term debt and short-term borrowings. We designate the debt (In millions of dollars, except amount Exchange amount value derivatives related to our senior notes and senior debentures as exchange rates) (US$) rate (Cdn$) (Cdn$) hedges for accounting purposes against the foreign exchange risk Debt derivatives accounted for associated with specific debt instruments. We have not designated as cash flow hedges: the debt derivatives related to our US CP program as hedges for As assets 5,500 1.1243 6,184 1,354 accounting purposes. We use expenditure derivatives to manage the As liabilities 550 1.3389 736 (22) foreign exchange risk in our operations, designating them as hedges Short-term debt derivatives not accounted for as hedges: for certain of our forecast operational and capital expenditures. As at As assets 1,178 1.3276 1,564 41 December 31, 2018, all of our US dollar-denominated long-term debt and short-term borrowings were hedged against fluctuations in Net mark-to-market debt foreign exchange rates using debt derivatives. With respect to our derivative asset 1,373 long-term debt and US CP program, as a result of our debt Bond forwards accounted for as derivatives, a one-cent change in the Canadian dollar relative to the cash flow hedges: US dollar would have no effect on net income. As liabilities 900 (87) Expenditure derivatives A portion of our accounts receivable and accounts payable and accounted for as cash flow accrued liabilities is denominated in US dollars. Due to the short- hedges: term nature of these receivables and payables, they carry no As assets 1,080 1.2413 1,341 122 significant risk from fluctuations in foreign exchange rates as at Net mark-to-market expenditure December 31, 2018. derivative asset 122 Equity derivatives not accounted INTEREST RATE RISK for as hedges: We are exposed to risk of changes in market interest rates due to As assets 258 92 the impact this has on interest expense for our short-term borrowings and bank credit facilities. We were previously exposed Net mark-to-market asset 1,500 to risk of changes in market interest rates due to our $250 million floating rate senior unsecured notes that were repaid in 2017. As at December 31, 2018, 85.3% of our outstanding long-term debt and short-term borrowings was at fixed interest rates (2017 – 89.5%).

122 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 123 | – – (79) 794 (109) 2017 Total Total 9,692 2,310 1,094 1,500 1,609 1,500 (2,327) (9,754) 12,002 21,834 (12,081) (22,222) instruments instruments 157 388 (157) 2018 1,761 (1,436) Equity Equity 19,211 21,129 (20,741) (19,148) derivatives derivatives Years ended December 31 ROGERS COMMUNICATIONS INC. derivatives derivatives Expenditure Expenditure 2018 ANNUAL REPORT Bond Bond forwards forwards Debt Debt derivatives derivatives senior notes credit facility borrowings US commercial paper credit facility borrowings senior notes US commercial paper of debt derivatives (unhedged) (unhedged) Payments on debt derivatives related to Total payments on debt derivatives Payments on debt derivatives related to Below is a summary ofderivatives. the net cash proceeds (payments) on debt Proceeds on debt derivatives related to Proceeds on debt derivatives related to Proceeds on debt derivatives related to Total proceeds on debt derivatives Payments on debt derivatives related to Net proceeds (payments) on settlement (In millions of dollars) Debt Debt Fair value (Cdn$) (hedged) (hedged) derivatives derivatives (Cdn$) amount Notional rate As at December 31, 2017 Exchange (US$) amount Notional As assetsAs liabilitiesAs liabilities 5,200 1,500 1.0401 1.3388As liabilities 5,409 2,008 746 1,301 (149) 1.2869As assets 960As liabilities (23) –As assets – 240 960 1.2239 900 1.2953 1,243 294 (64) (44) 5 – – 276 68 accounted for as hedges: derivative assetcash flow hedges: accounted for as cash flow hedges: derivative liabilityfor as hedges: 1,129 (39) as cash flow hedges: Mark-to-market assetMark-to-market liabilityMark-to-market asset (liability) 1,152 1,301 (149) (23) (23) – (64) (64) – (39) (44) 5 68 – 1,094 68 (280) 1,374 Derivative instruments, beginning of yearProceeds received from settlement of derivatives (1,761) 1,152 (19,368) – (23) (64) (1,089)Derivative instruments, beginning of yearProceeds received from settlement of derivativesPayment on derivatives settled(Decrease) increase (39) in (4) fair value of derivativesDerivative instruments, end of year 68 1,683 – (531) (12,002) – (102) – 1,152 – (51) (13) (1,207) 12,081 (23) 19 (91) (6) (64) – (13,215) 66 8 1,240 (39) 1,659 (671) 68 – 13,321 1,094 Payment on derivatives settledIncrease (decrease) in fair value of derivativesDerivative instruments, end of year 505 1,436 127 1,332 19,305 (23) 41 – 157 (87) 1,093 28 122 – 92 Mark-to-market assetMark-to-market liabilityMark-to-market asset (liability) 1,332 1,354 (22) 41 41 – (87) – (87) 122 122 – 92 92 – Year ended December 31, 2017 (In millions of dollars) Year ended December 31, 2018 (In millions of dollars) Short-term debt derivatives not Net mark-to-market debt Bond forwards accounted for as Expenditure derivatives Net mark-to-market expenditure Equity derivatives not accounted Net mark-to-market asset 1,094 Debt derivatives accounted for (In millions of dollars, except exchange rates) Below is a summary of the changes in fair value of our derivative instruments for 2018 and 2017. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Below is a summary of the derivative instruments assets and accounting purposes (2017 – US$6.7 billion). As at December 31, derivative instruments liabilities reflected on our Consolidated 2018, 100% of our currently outstanding bond forwards and Statements of Financial Position. expenditure derivatives have been designated as hedges for accounting purposes (2017 – 100%). In 2018, we recognized a As at December 31 $10 million decrease to net income related to hedge ineffectiveness (2017 – $3 million increase). (In millions of dollars) 2018 2017

Current asset 270 421 Debt derivatives Long-term asset 1,339 953 We use cross-currency interest exchange agreements to manage 1,609 1,374 risks from fluctuations in foreign exchange rates associated with our Current liability (87) (133) US dollar-denominated debt instruments, credit facility borrowings, Long-term liability (22) (147) and commercial paper borrowings (see note 18). We designate the debt derivatives related to our senior notes and debentures as (109) (280) hedges for accounting purposes against the foreign exchange risk Net mark-to-market asset 1,500 1,094 associated with specific debt instruments. We do not designate the debt derivatives related to our credit facility borrowings or As at December 31, 2018, US$6.1 billion notional amount of our commercial paper borrowings as hedges for accounting purposes. outstanding debt derivatives have been designated as hedges for During 2018 and 2017, we entered and settled debt derivatives related to our credit facility borrowings and US CP program as follows:

Year ended Year ended December 31, 2018 December 31, 2017 Notional Exchange Notional Notional Exchange Notional (In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$) Credit facilities Debt derivatives entered 125 1.26 157 1,610 1.32 2,126 Debt derivatives settled 125 1.26 157 1,760 1.32 2,327 Net cash paid (1) (17) Commercial paper program Debt derivatives entered 15,262 1.29 19,751 8,266 1.30 10,711 Debt derivatives settled 14,833 1.29 19,148 7,521 1.29 9,692 Net cash received (paid) 63 (62)

In 2018, we entered into debt derivatives to hedge the foreign During the year, concurrent with the issuance of our currency risk associated with the principal and interest components US$750 million senior notes, we entered into debt derivatives to of the US dollar-denominated senior notes issued on February 8, convert all interest and principal payment obligations to Canadian 2018 (see note 20). Below is a summary of the debt derivatives we dollars. As a result, we received net proceeds of $938 million from entered to hedge senior notes issued during 2018. the issuance. We did not enter or settle any debt derivatives related to senior US$ Hedging effect (In millions of notes during 2017. dollars, except for Fixed coupon and Principal/ hedged interest rates) Notional (Cdn$) amount Maturity Coupon interest Equivalent Effective date (US$) date rate rate 1 (Cdn$)

February 8, 2018 750 2048 4.300% 4.193% 938

1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.

124 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 125 | 500 400 900 2017 2017 (Cdn$) Notional 500 400 900 2018 rds were extended rate Exchange ROGERS COMMUNICATIONS INC. Years ended December 31 Hedged GoC 930 1.33 1,240 840 1.27 1,070 (US$) interest rate as at Notional December 31, 2017 2018 ANNUAL REPORT 2018 (Cdn$) time. Both the 10-year and 30-year bond forwa Notional Hedged GoC interest rate as at rate December 31, 2018 Exchange e underlying Government of Canada (GoC) 10-year and 30-year $6 million and enteredNon-Voting into Shares new with an derivatives expiry on date of 1.0 March million 2018. During Class 2018, B we recognized a$33 recovery, net of million interestcompensation receipts, expense (2017 of related to –equity the change derivative $74 inDecember fair contracts 31, million value 2018, of the net recovery), our fairasset of value of $92 of in million the (2017 received equitycurrent – portion derivatives stock-based of $68 was payments. derivative million an instruments. asset), which As is includedAs at in at December 31,for 2018, 5.0 million we (2017 had –weighted 5.4 equity average million) derivatives price Class of outstanding B $51.54 Non-Voting (2017 Shares – with $51.44). a FAIR VALUES OF FINANCIAL INSTRUMENTS The carryingreceivable, values bank of advances,payable short-term cash borrowings, and and andbecause accrued of accounts the cash short-term nature liabilities of equivalents, these financial approximate instruments. We accounts their determine fairinvestments the using fair values quotedvalue value market of values. of our We privatefollow-on each determine investments financing rounds, by the of third-party using sale fair based negotiations, our implied or valuations market- publicly approaches. from traded These are applied appropriately to each amount Notional 840 1.30 1,093 720 1.24 896 (US$) Notional 1 2018 are subject to GoC rate re-setting from time to in 2018 to their respective maturity dates. Bond forwards with maturity dates beyond December 31, Equity derivatives We have equity derivatives toassociated hedge with market Class price B appreciation Non-Votingunder risk Shares our that have stock-based been compensation granted RSUs, programs for and stock options, originally DSUs entered into (see atterms a note weighted to average 24). price maturityperiods of The with of $50.37 the with consent equity one ofexecuted the year, derivatives extension hedge counterparties. agreements extendible were In forcontracts 2018, for each we under further of our one-year conditions substantially with equity revised derivative the expiry dates ofThe same April equity 2019 (from committed derivatives April 2018). accounting terms have purposes. not and been designatedDuring as 2018, hedges we settled for 0.4average million equity price derivatives at of a weighted 2017, $61.15 we for settled net existing proceeds equity of derivatives $4 for million. net During proceeds of As at December 31, 2018, wederivatives had outstanding US$1,080 million (2017 of expenditure —rate US$1,200 of million), $1.24/US$ atranging an (2017 from average January —2018 2019 $1.28/US$), to to with Decemberoutstanding terms December 2020 to (2017 expenditure 2019). maturity –hedged at January derivatives As an average exchange at rate maturing of $1.24/US$. December in 31, 2019 2018, were our Expenditure derivatives settled Expenditure derivatives entered rate for anticipated future debt that were outstanding as at December 31, 2018 and 2017. fair value of derivativefurther and instruments”). redesignated We them as subsequently effective hedges. extended theBelow bond is forwards a summary to of May the 31, bond 2019, forwards we with have the entered ability to hedge to th extend them (In millions of dollars, except exchange rates) Expenditure derivatives Below is a summary of theto expenditure certain derivatives forecast we expenditures. entered and settled during 2018 and 2017 to manage foreign exchange risk related 1 GoC term (years) Effective date Maturity date (In millions of dollars, except interest rates) Bond forwards During 2018 or 2017, we did not enter orDuring settle the any bond year forwards. ended Decemberderivatives 31, within 2018, we the determinedderivatives that originally and we reclassified designated a would $21 no time million longer loss frame. be from the able Consequently, hedging to reserve exercise we within certain shareholders’ discontinued ten-year equity to bond hedge finance forward costs accounting (recorded in on “change in those bond forward 1030Total December 2014 December 2014 January 31, 2019 February 28, 2019 500 400 3.01% 2.70% 2.85% 2.65% 900 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

investment depending on its future operating and profitability Our disclosure of the three-level fair value hierarchy reflects the prospects. significance of the inputs used in measuring fair value: • financial assets and financial liabilities in Level 1 are valued by The fair values of each of our public debt instruments are based on referring to quoted prices in active markets for identical assets the period-end estimated market yields, or period-end trading and liabilities; values, where available. We determine the fair values of our debt • financial assets and financial liabilities in Level 2 are valued using derivatives and expenditure derivatives using an estimated credit- inputs based on observable market data, either directly or adjusted mark-to-market valuation by discounting cash flows to the indirectly, other than the quoted prices; measurement date. In the case of debt derivatives and expenditure • Level 3 valuations are based on inputs that are not based on derivatives in an asset position, the credit spread for the financial observable market data. institution counterparty is added to the risk-free discount rate to determine the estimated credit-adjusted value for each derivative. There were no material financial instruments categorized in Level 3 For these debt derivatives and expenditure derivatives in a liability as at December 31, 2018 and 2017 and there were no transfers position, our credit spread is added to the risk-free discount rate for between Level 1, Level 2, or Level 3 during the respective periods. each derivative. The fair values of our equity derivatives are based on the period-end quoted market value of Class B Non-Voting Shares. Below is a summary of the financial instruments carried at fair value.

As at December 31 Carrying value Fair value (Level 1) Fair value (Level 2) (In millions of dollars) 2018 2017 2018 2017 2018 2017 Financial assets Investments, measured FVTOCI: Investments in publicly traded companies 1,051 1,465 1,051 1,465 – – Held-for-trading: Debt derivatives accounted for as cash flow hedges 1,354 1,301 – – 1,354 1,301 Debt derivatives not accounted for as cash flow hedges 41 – – – 41 – Expenditure derivatives accounted for as cash flow hedges 122 5 – – 122 5 Equity derivatives not accounted for as cash flow hedges 92 68 – – 92 68 Total financial assets 2,660 2,839 1,051 1,465 1,609 1,374 Financial liabilities Held-for-trading: Debt derivatives accounted for as cash flow hedges 22 149 – – 22 149 Debt derivatives not accounted for as hedges – 23 – – – 23 Bond forwards accounted for as cash flow hedges 87 64 – – 87 64 Expenditure derivatives accounted for as cash flow hedges – 44 – – – 44 Total financial liabilities 109 280 – – 109 280

Below is a summary of the fair value of our long-term debt.

As at December 31 (In millions of dollars) 2018 2017 Carrying amount Fair value 1 Carrying amount Fair value 1 Long-term debt (including current portion) 14,290 15,110 14,448 16,134

1 Long-term debt (including current portion) is measured at Level 2 in the three-level fair value hierarchy, based on year-end trading values.

We did not have any non-derivative held-to-maturity financial assets during the years ended December 31, 2018 and 2017.

126 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 127 | 14 20 927 515 (825) 2017 1,775 1,706 3,269 (1,686) (1,184) – 1 935 489 (740) 2018 1,903 1,794 3,303 (1,902) (1,258) ROGERS COMMUNICATIONS INC. As at or years ended December 31 2018 ANNUAL REPORT One of our jointright ventures to has require a ourinterest non-controlling at joint a interest future venture that date to at has fair purchase a value. that non-controlling Our share of net income Net income Expenses Our share of net assets Revenue Total net assets Current liabilities Long-term liabilities Current assets Long-term assets (In millions of dollars) INVESTMENTS, MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME Publicly traded companies We holdincluding a Cogeco Inc. number and Cogecowerecognizedrealizedlossesofnilandunrealizedlossesof of Communications Inc. interests This year, $414 in million publicly (2017unrealized traded – companies, nilcomprehensive gains) of realized incomecomprehensive with losses income, respectively). and (2017 $418 corresponding million – of amountsINVESTMENTS, ASSOCIATES net AND in JOINT VENTURES We income have other (orventures, some and had) of which interests include: in other a numberMaple of Leaf Sports associates and Entertainment andMLSE, Limited a (MLSE) joint sports andScotiabank entertainment company, owns Arena, andToronto operates the Raptors, the MLS’ Toronto NHL’s FC,AHL’s the Toronto Toronto CFL’s Toronto Marlies, Argonauts, Maple(BCE), the and jointly own other Leafs, an indirect assets.portion net the representing 75% We, a equity 37.5% interest along NBA’s equity in interestin MLSE with in MLSE with MLSE. is BCE our Our accounted investment for Inc. as a joint venture using the equityGlentel method. Glentel is ahundred large, Canadian multicarrier wireless mobile50% retail phone equity distribution retailer interestowned with outlets. by in several BCE. We Our Glentel, investment ownventure in with using Glentel a the is the equity accounted method. for remaining as a 50% joint interest shomi shomi was aCommunications joint (Shaw) venturesubscription video-on-demand and equally service offering owned moviesseries previously and by television for operated Rogers viewinginvestment in and online a shomi Shaw was andequity premium accounted method. through for In as 2016, cableour a we shomi set-top announced joint joint the venture venture boxes.associated decision using (see with to Our note the wind 11). shomi down Inand were the 2017, partnership transferred the was to remaining officially wound assets their up. respectiveBelow partners issignificant a associates and summary joint ventures of and our portions financial thereof. information pertaining to our 167 929 2017 1,465 1,632 2,561 145 938 2018 1,051 1,196 2,134 As at December 31 Publicly traded companies Private companies obligations for the liabilities related to the arrangement. arrangement; and quoted prices; and follow-on financingmarket-based rounds, approaches. third-party sale negotiations, or EXPLANATORY INFORMATION (In millions of dollars) Impairment in associates and jointAt ventures the endobjective of each evidence reporting thatassociates period, impairment we and exists assesscompare joint whether in the there carrying ventures. our amount is amount investments of If and the recognize in investment objective theany, to excess as its a evidence over loss recoverable the in exists, net recoverable income. amount, we if We useassociates the equity andinterest method joint in to the ventures; assets, accountoperations. we liabilities, revenue, for recognize and our expenses our of investments ourWe proportionate joint in initiallyventures recognize at ourcarrying cost investments amounts based in andloss. on associates our subsequently Distributions share andcarrying increase of amounts we of joint each our or receive investments. entity’s income decrease from or We eliminate the these unrealized gainsassociates entities and or losses reduce from jointamount our of the our investments ventures interest in in against the entities. our investments, up to the • joint operations – when we have the rights to the assets and Investments in associates and jointAn arrangements entity is an associateentity’s when we financial have significant influence andentity. over the operating We policies areover an generally but entity when presumed do we hold to more not thanA have 20% control of joint significant the the arrangement voting influence power. existsthat establishes when joint there control isconsent over a activities for contractual and strategic requires agreement financialour unanimous and interests in operating joint decisions. arrangements• We into one classify of joint two ventures categories: – when we have the rights to the net assets of the NOTE 17: INVESTMENTS ACCOUNTING POLICY Investments in publicly traded andWe private companies havecompanies elected overinfluence which to as we irrevocably FVTOCIincome do because with we classify not do noof not short-term our subsequent have hold trading. We these reclassification account investments control• investments for with them to the as or publicly follows: intent in net significant traded companies –• at private fair companies – value at fair based value on using implied publicly valuations from Investments in: Investments, measured at FVTOCI Investments, associates and joint ventures Total investments NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18: SHORT-TERM BORROWINGS

Below is a summary of our short-term borrowings as at December 31, 2018 and 2017.

As at December 31 (In millions of dollars) 2018 2017 Accounts receivable securitization program 650 650 US commercial paper program 1,605 935 Total short-term borrowings 2,255 1,585

Below is a summary of the activity relating to our short-term borrowings for the years ended December 31, 2018 and 2017.

Year ended December 31, 2018 Year ended December 31, 2017 Notional Exchange Notional Notional Exchange Notional (In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$) Proceeds received from US commercial paper 15,262 1.29 19,752 8,267 1.30 10,712 Repayment of US commercial paper (14,858) 1.30 (19,244) (7,530) 1.29 (9,704) Net proceeds received from US commercial paper 508 1,008 Proceeds received from accounts receivable securitization 225 530 Repayment of accounts receivable securitization (225) (680) Net repayment of accounts receivable securitization – (150) Net proceeds received on short-term borrowings 508 858

ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM recognized as short-term borrowings. The buyer’s interest in these We participate in an accounts receivable securitization program trade receivables ranks ahead of our interest. The program restricts with a Canadian financial institution that allows us to sell certain us from using the receivables as collateral for any other purpose. trade receivables into the program. As at December 31, 2018, the The buyer of our trade receivables has no claim on any of our other proceeds of the sales were committed up to a maximum of assets. $1,050 million (2017 – $1,050 million). Effective October 27, 2017, we extended the term of the program to November 1, 2020. US COMMERCIAL PAPER PROGRAM In 2017, we entered into a US CP program that allowed us to issue As at December 31 up to a maximum aggregate principal amount of US$1 billion. In December 2017, we increased the maximum aggregate principal (In millions of dollars) 2018 2017 amount allowed under our US CP program to US$1.5 billion. Trade accounts receivable sold to Funds can be borrowed under this program with terms to maturity buyer as security 1,391 1,355 ranging from 1 to 397 days, subject to ongoing market conditions. Short-term borrowings from buyer (650) (650) Any issuances made under the US CP program will be issued at a Overcollateralization 741 705 discount. Borrowings under our US CP program are classified as short-term borrowings on our Consolidated Statements of Financial Position when they are due within one year from the date of the Years ended December 31 financial statements. (In millions of dollars) 2018 2017 Accounts receivable securitization program, beginning of year 650 800 Net repayment of accounts receivable securitization – (150) Accounts receivable securitization program, end of year 650 650

We continue to service and retain substantially all of the risks and rewards relating to the accounts receivable we sell, and therefore, the receivables remain recognized on our Consolidated Statements of Financial Position and the funding received is

128 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 129 | (85) (Cdn$) Notional rate Exchange Liabilities Other Total ––– 91.3312 ROGERS COMMUNICATIONS INC. 746 1.25 935 737 1.37 1,008 (US$) Decommissioning Notional 126 (Cdn$) Notional 2018 ANNUAL REPORT rate Exchange 27 1.33 36 404 1.26 508 746 1.25 935 (US$) current liabilities”) 3 1 4 1,178 1.36 1,605 Year ended December 31, 2018 Year ended December 31, 2017 December 31, 2017AdditionsAdjustments to existing provisionsReversalsAmounts usedDecember 31, 2018Current (recorded in “other 2Long-term 35 –Decommissioning and restoration costs 2 Cash 4 outflows associated withgenerally our expected 39 decommissioning to liabilities occurassets are at the to decommissioning which dates –timing of they the and relate, 36 whichrequired extent (1) for are these of sites long-term is uncertain. – – restoration in nature. work (1) 3 The thatOther will – (2) 39 Other ultimately – provisions be include variousto legal be settled claims, within which five – years. are expected 33 2 35 JUDGMENTS Significant judgment is required toto determine when we unavoidable are subject judgments costs may include, for arising example,legally whether binding from a or certain promise whetherwith onerous is the we counterparty. may contracts. be These successful in negotiations EXPLANATORY INFORMATION (In millions of dollars) USE OF ESTIMATES AND JUDGMENTS ESTIMATES We recognize aconstructive provision obligation when that alikely can past to result be event in an reasonably creates outflowprovision of estimated a even economic resources. when and legal We the recognize is or be a timing uncertain, which or can amount require us of to use the significant obligation estimates. may US CP program (see notederivatives 16). as We hedges have for not accounting designated purposes. these debt Notional 1 1 Included in finance costs. Discounts on issuance Net proceeds received from US commercial paper US commercial paper, beginning of year US commercial paper, end of year (In millions of dollars, except exchange rates) Onerous contracts We make provisions forcosts onerous of contracts when meetingbenefits the we our unavoidable expect to obligation realizeat from under it. the We a measureterminating these present contract provisions the exceed value contract orthe the of the contract. expected the We costassociatedwiththecontractbeforewemaketheprovision. of lower recognize continuing any of with impairment the loss expected on the cost assets of Restructuring We make provisions fordetailed and restructuring formal when restructuring wehas plan and have started either approved the a features restructuring or to the management employeesthat affected has by it. announced have Restructuringprovisions; obligations the otherwise uncertain they plan’s are timingcharges main recognized are as or accrued recognized liabilities. inthe All restructuring, Consolidated amounts Statements acquisition of Income and are (see other note 9). on recognized as ACCOUNTING POLICY Decommissioning and restoration costs We use network andour other business assets on activities. leasedfuture We premises and expect in we some to thereforewith of exit make decommissioning provisions these the for premisestheir assets the in original costs and the associated restoring conditionsobligation the to when do locations we so. to estimate We have of calculate the a these coststhe costs legal that future will based based or be on on incurred, a constructive management’sin project best current those prices, estimates costs of inflation, into future andpresent trends value. other We factors, revise our andtechnological forecasts requirements discount when change. business them conditions to or their When we recognize acorresponding decommissioning asset liability, wedepreciate in the recognize asset a based property, onfollowing the corresponding plant asset’s our useful life andequipment. We depreciation recognize equipment the policies accretionto and finance of costs the on for liability the Consolidated as Statements property, a of charge Income. plant and NOTE 19: PROVISIONS 1 Concurrent with the commercialdebt paper derivatives issuances, to we hedge entered the into the foreign principal and currency interest risk components associated of with the borrowings under the Below is a summary of the activity relating to our long-term debt for the years ended December 31, 2018 and 2017. Loss (gain) on foreign exchange NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20: LONG-TERM DEBT

As at December 31 Due Principal Interest (In millions of dollars, except interest rates) date amount rate 2018 2017 Senior notes 2018 US 1,400 6.800% – 1,756 Senior notes 2019 400 2.800% 400 400 Senior notes 2019 500 5.380% 500 500 Senior notes 2020 900 4.700% 900 900 Senior notes 2021 1,450 5.340% 1,450 1,450 Senior notes 2022 600 4.000% 600 600 Senior notes 2023 US 500 3.000% 682 627 Senior notes 2023 US 850 4.100% 1,160 1,066 Senior notes 2024 600 4.000% 600 600 Senior notes 2025 US 700 3.625% 955 878 Senior notes 2026 US 500 2.900% 682 627 Senior debentures 1 2032 US 200 8.750% 273 251 Senior notes 2038 US 350 7.500% 478 439 Senior notes 2039 500 6.680% 500 500 Senior notes 2040 800 6.110% 800 800 Senior notes 2041 400 6.560% 400 400 Senior notes 2043 US 500 4.500% 682 627 Senior notes 2043 US 650 5.450% 887 816 Senior notes 2044 US 1,050 5.000% 1,433 1,318 Senior notes 2048 US 750 4.300% 1,022 – 14,404 14,555 Deferred transaction costs and discounts (114) (107) Less current portion (900) (1,756)

Total long-term debt 13,390 12,692

1 Senior debentures originally issued by Rogers Cable Inc. which are unsecured obligations of RCI and for which RCCI was an unsecured guarantor as at December 31, 2018 and 2017.

Each of the above senior notes and debentures are unsecured and, the foreign exchange risk associated with the principal and interest as at December 31, 2018, were guaranteed by RCCI, ranking components of all of our US dollar-denominated senior notes and equally with all of RCI’s other senior notes, debentures, bank credit debentures (see note 16). facilities, and letter of credit facilities. We use derivatives to hedge

130 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 131 | (284) (750) (750) (750) 1,730 2,999 (1,830) (3,283) (1,034) (Cdn$) Notional rate Exchange ––– ––– ROGERS COMMUNICATIONS INC. 960 1.32 1,269 (US$) (1,110) 1.31 (1,453) Notional – – – – 157 (157) (823) (823) (Cdn$) (1,761) Notional 2018 ANNUAL REPORT rate Exchange 125 1.26 157 750 1.25 938 (125) 1.26 (157) (US$) (1,400) 1.26 (1,761) Year ended December 31, 2018 Year ended December 31, 2017 Notional SENIOR NOTES AND DEBENTURES We paydebentures interest on on afloating rate all senior semi-annual notes on basis. a of quarterly basis. We ourWe have paid the fixed-rate option interest toand senior redeem on debentures, each our of in notes ourpremiums whole fixed-rate specified and in senior or the notes corresponding in agreements. part, at any time, if we pay the In 2017, we amendedthings, our revolving extend credit the facility maturityfrom to, date among September of other the 2020 original$700 to million $2.5 tranche March billion to 2022. facility the facilityresult, In that the total matures addition, credit in limit March we for 2020. the added As facility a is a In now 2018, $3.2 billion. we amendedthings, our revolving extend credit the facility maturityMarch to, 2022 among date other to of September theon 2023 the $2.5 $700 and million billion to tranche tranche from extend March from the 2020 to maturityIn September date 2017, 2021. we repaidour the non-revolving entire bank balance credit that facility.this was facility As outstanding was a terminated. under result of this repayment, As at December 31, 2018,(2017 we – had $2.3 available billion) liquidity underfacilities of our (2017 $1.6 $4.2 billion billion – bank $3.3 and(2017 billion), letter – of of $0.1 which credit billion) we forbackstop letters had of utilized credit amounts $1.0 and billion reservedborrowings (2017 $1.6 outstanding – billion $0.9 to billion). under our US CP program (3) 13 (608) 2017 (1,034) 16,080 14,448 11 (18) 672 (823) 2018 14,448 14,290 Years ended December 31 costs costs, end of year costs, beginning of year Our $3.2 billionrevolving revolving basis creditreductions until facility prior is maturityborrowings to available from and on the maturity.1.25% there a per revolving annum The credit fully over are theto facility interest bank 2.25% prime ranges no over rate rate the from orOffered bankers’ scheduled base Rate. nil rate, acceptance charged or rate to 0.85% or on London Inter-Bank BANK CREDIT AND LETTER OF CREDIT FACILITIES WEIGHTED AVERAGE INTEREST RATE As at December 31,rate 2018, on our all effective debt weighted andall average of short-term interest the borrowings, associated including debt derivatives the(2017 and – effect bond 4.70%). of forwards, was 4.45% Net repayment of long-term debt Loss (gain) on foreign exchange Deferred transaction costs incurred Amortization of deferred transaction Long-term debt net of transaction (In millions of dollars) Long-term debt net of transaction Credit facility borrowings (Cdn$) The tables below summarize the activity relating to our long-term debt for the years ended December 31, 2018 and 2017. (In millions of dollars, except exchange rates) Credit facility borrowings (US$) Total credit facility borrowings Credit facility repayments (Cdn$) Credit facility repayments (US$) Total credit facility repayments Net repayments under credit facilities Net repayment of long-term debt Net repayment of senior notes Senior note issuances (US$) Senior note repayments (Cdn$) Total senior notes repayments Senior notes repayments (US$) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Issuance of senior notes Below is a summary of the senior notes that we issued in 2018. We did not issue any senior notes in 2017. (In millions of dollars, except interest rates and discounts) Transaction Discount/ Total gross costs and Principal premium at proceeds 1 discounts 2 Date issued amount Due date Interest rate issuance (Cdn$) (Cdn$) 2018 issuances February 8, 2018 US 750 2048 4.300% 99.398% 938 16

1 Gross proceeds before transaction costs and discounts. 2 Transaction costs and discounts are included as deferred transaction costs and discounts in the carrying value of the long-term debt, and recognized in net income using the effective interest method. Concurrent with the 2018 issuance, we entered into debt PRINCIPAL REPAYMENTS derivatives to convert all interest and principal payment obligations Below is a summary of the principal repayments on our long-term to Canadian dollars (see note 16). debt due in each of the next five years and thereafter as at December 31, 2018. Repayment of senior notes and related derivative settlements Below is a summary of the repayment of our senior notes during (In millions of dollars) 2018 and 2017. The associated debt derivatives for the 2018 2019 900 repayment were settled at maturity. There were no debt derivatives 2020 900 associated with the 2017 repayments. 2021 1,450 2022 600 (In millions of dollars) 2023 1,842 Notional amount Notional amount Thereafter 8,712 Maturity date (US$) (Cdn$) Total long-term debt 14,404 2018 repayments April 2018 1,400 1,761 TERMS AND CONDITIONS 2017 repayments As at December 31, 2018 and 2017, we were in compliance with all March 2017 – 250 financial covenants, financial ratios, and all of the terms and June 2017 – 500 conditions of our long-term debt agreements. There were no Total for 2017 – 750 financial leverage covenants in effect other than those under our bank credit and letter of credit facilities. In April 2018, we repaid the entire outstanding principal amount of our US$1.4 billion ($1.8 billion) 6.8% senior notes otherwise due in The 8.75% debentures due in 2032 contain debt incurrence tests August 2018. At the same time, the associated debt derivatives and restrictions on additional investments, sales of assets, and were settled for net proceeds received of $326 million. As a result, payment of dividends, all of which are suspended in the event the we repaid a net amount of $1.5 billion including settlement of the public debt securities are assigned investment-grade ratings by at associated debt derivatives, which was separately funded through least two of three specified credit rating agencies. As at our US CP program and our bank credit facility. For the year ended December 31, 2018, these public debt securities were assigned an December 31, 2018, we recognized a $28 million loss on investment-grade rating by each of the three specified credit rating repayment of long-term debt reflecting our obligation to pay agencies and, accordingly, these restrictions have been suspended redemption premiums upon repayment (see note 10). as long as the investment-grade ratings are maintained. Our other senior notes do not have any of these restrictions, regardless of the related credit ratings. The repayment dates of certain debt agreements can also be accelerated if there is a change in control of RCI.

NOTE 21: OTHER LONG-TERM LIABILITIES

As at December 31

(In millions of dollars) Note 2018 2017

Deferred pension liability 22 373 460 Supplemental executive retirement plan 22 67 66 Stock-based compensation 24 66 66 Other 40 21 Total other long-term liabilities 546 613

132 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 133 | 21 49 (21) (52) 237 (207) 2017 4.1% 3.0% 3.7% 3.0% 2017 CPM B Scale CPM B Scale 16 47 CIA Private with CIA Private with (16) (50) 224 (196) 2018 Increase (decrease) in 3.0% 3.7% 3.9% 2018 accrued benefit obligation ROGERS COMMUNICATIONS INC. based on CPM B scale CPM B scale 1.0% to 4.5%, employee age CIA Private with CIA Private with 2018 ANNUAL REPORT increase increase Rate of compensation Mortality rate Discount rate Discount rate Rate of compensation Mortality rate Impact of 0.5% increase Impact of 0.5% decrease Impact of 0.25% increase Impact of 1 year increase Impact of 0.25% decrease Impact of 1 year decrease assumptions: (In millions of dollars) Sensitivity of key assumptions In the sensitivity analysisbenefit shown obligation below, for we determine ourused the to funded defined calculate plans the usingthe defined the Consolidated benefit same obligation Statements we method sensitivity of recognize by Financial on changing Position. oneconstant. We assumption This calculate while leads holdingchange to the in others defined limitations benefitthat in obligation shown the will in likely analysisassumption will be the as change different at table, the from correlated. a since actual time, and it that some is assumptions likely are that more than one Pension expense Weighted average of significant Defined benefit obligation Significant estimates are involvedbalances. in determining Actuarial pension-related employees’ estimates compensationRetirement are levels benefits based atearnings, subject are on to the certain primarily adjustments.valuations projections time were The completed most based as recent at of of January actuarial 1, on 2018. retirement. careerPrincipal actuarial average assumptions Discount rate Rate of future compensation increase Mortality rate members; and expensed in net income. future benefits; ESTIMATES Detailed below are the significant assumptionscalculations used used in to the actuarial determinepension the obligation amount and of related expense. the defined benefit USE OF ESTIMATES AND JUDGMENTS Termination benefits We recognize terminationcommitted benefits to as a anbefore expense formal the normal when detailed retirement we date planwithdraw and it. are to it is terminate not realistic employment that we will Post-employment benefits – Defined Contribution PensionIn Plan 2016, wemembers closed and the introducedThis defined a change Defined benefit did Contribution pension notthe Pension impact plans time; Plan. current to any definedpension new employee plans benefit at enrolled members that at in datecredited service continues any in to their of earn respective plan. pension the benefitsWe and defined recognize a benefit pension expensethe in relation to Defined our contributions to provides Contribution service to the Pension Company. Plan when the employee • mortality rates for• calculating past the service life costs expectancy fromWe plan of recognize amendments plan ourpension net are plans pension and immediately expense contributionsan for to our defined employee contribution definedConsolidated plans benefit Statements benefit as of Income inprovide expense the the related periods services. the in employees operating costs on the Post-employment benefits – defined benefit pensionWe plans offerpension contributory plans that andpension on provide retirement. non-contributory employees defined withWe a separately benefit calculate our lifetime netpension obligation monthly for each plan defined benefit employees have by earned in return estimating forprior their service years the in the and currentpresent amount and value. discounting of those benefits futureWe accrue to our benefits pension determine planservices obligations their as necessary employees to provide the based earn on the market pension.measurement yields We on use date high-quality aobligation. to corporate discount Remeasurements bonds rate calculate atobligation of the the are accrued the determinedactuarial gains at pension accrued and losses, the returns benefit pension ontheeffectoftheassetceiling.Thesearerecognizedinother end plan assets, of and benefit any change thecomprehensive in income year and retained and earnings. include The cost ofaccount pensions the is followingaccounting related actuarially to assumptions our defined determined benefit and• pension and plans: expected methods takes rates for into of pension salary increases for calculating increases in NOTE 22: POST-EMPLOYMENT BENEFITS ACCOUNTING POLICY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EXPLANATORY INFORMATION invested and managed following all applicable regulations and the We sponsor a number of contributory and non-contributory Statement of Investment Policies and Procedures with the objective pension arrangements for employees, including defined benefit of having adequate funds to pay the benefits promised by the plan. and defined contributions plans. We do not provide any Investment and market return risk is managed by: non-pension post-retirement benefits. We also provide unfunded • contracting professional investment managers to execute the supplemental pension benefits to certain executives. investment strategy following the Statement of Investment Policies and Procedures and regulatory requirements; The Rogers Defined Benefit Pension Plan provides a defined • specifying the kinds of investments that can be held in the plans pension based on years of service and earnings, with no increases and monitoring compliance; in retirement for inflation. The plan was closed to new members in • using asset allocation and diversification strategies; and 2016. Participation in the plan was voluntary and enrolled • purchasing annuities from time to time. employees are required to make regular contributions into the plan. In 2009 and 2011, we purchased group annuities for our The funded pension plans are registered with the Office of the then-retirees. Accordingly, the current plan members are primarily Superintendent of Financial Institutions and are subject to the active Rogers employees as opposed to retirees. An unfunded Federal Pension Benefits Standards Act. Two of the defined supplemental pension plan is provided to certain senior executives contribution plans are registered with the Financial Services to provide benefits in excess of amounts that can be provided from Commission of Ontario, subject to the Ontario Pension Benefits the defined benefit pension plan under the Income Tax Act Act. The plans are also registered with the Canada Revenue (Canada)’s maximum pension limits. Agency and are subject to the Income Tax Act (Canada). The benefits provided under the plans and the contributions to the We also sponsor smaller defined benefit pension plans in addition plans are funded and administered in accordance with all to the Rogers Defined Benefit Pension Plan. The Pension Plan for applicable legislation and regulations. Employees of Rogers Communications Inc. and the Rogers Pension Plan for Selkirk Employees are closed legacy defined The defined benefit pension plans are subject to certain risks benefit pension plans. The Pension Plan for Certain Federally related to contribution increases, inadequate plan surplus, Regulated Employees of Rogers Cable Communications Inc. is unfunded obligations, and market rates of return, which we similar to the main pension plan but only federally regulated mitigate through the governance described above. Any significant employees from the Cable business were eligible to participate; changes to these items may affect our future cash flows. this plan was closed to new members in 2016. Below is a summary of the estimated present value of accrued plan In addition to the defined benefit pension plans, we also provide benefits and the estimated market value of the net assets available various defined contribution plans to certain groups of employees to provide these benefits for our funded plans. of the Company and to employees hired after March 31, 2016 who choose to join. Additionally, we provide other tax-deferred savings As at December 31 arrangements, including a Group RRSP and a Group TFSA (In millions of dollars) 2018 2017 program, which are accounted for as deferred contribution arrangements. Plan assets, at fair value 1,965 1,890 Accrued benefit obligations (2,330) (2,342) During the year, we amended certain of our defined benefit pension plans and recognized a $43 million reduction in past Net deferred pension liability (365) (452) service cost this year, which was recorded as a reduction of pension Consists of: expense, included in “operating costs” in the Consolidated Deferred pension asset 8 8 Statements of Income. Deferred pension liability (373) (460) The Pension Committee of the Board oversees the administration Net deferred pension liability (365) (452) of our registered pension plans, which includes the following principal areas: Below is a summary of our pension fund assets. • overseeing the funding, administration, communication, and investment management of the plans; Years ended December 31 • selecting and monitoring the performance of all third parties (In millions of dollars) 2018 2017 performing duties in respect of the plans, including audit, actuarial, and investment management services; Plan assets, beginning of year 1,890 1,619 • proposing, considering, and approving amendments; Interest income 73 72 • proposing, considering, and approving amendments to the Remeasurements, recognized in other Statement of Investment Policies and Procedures; comprehensive income and equity (114) 92 • reviewing management and actuarial reports prepared in Contributions by employees 39 42 respect of the administration of the pension plans; and Contributions by employer 148 145 • reviewing and approving the audited financial statements of the Benefits paid (68) (76) pension plan funds. Administrative expenses paid from plan assets (3) (4) The assets of the defined benefit pension plans are held in segregated accounts that are isolated from our assets. They are Plan assets, end of year 1,965 1,890

134 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 135 | – 2 3 2 (3) 16 92 62 66 (60) (168) 2017 2017 allocation percentage Target asset 2 2 1 (4) 20 54 66 67 (10) 158 (114) 0.8% 0% to 2% 2017 2018 2018 11.8%48.1% 7% to 17% 39.3% 33% to 63% 30% to 50% 100.0% ROGERS COMMUNICATIONS INC. Years ended December 31 Years ended December 31 0.3% 2018 11.8% 46.7% 41.2% 100.0% Allocation of plan assets 2018 ANNUAL REPORT Domestic International Total in other comprehensive income and equity interest income) of year employee salaries and benefits expense costs comprehensive income Change in demographic assumptions Effect of experience adjustments Remeasurement gain (loss), recognized We also provide supplemental unfundedto defined benefit certain pensions executives. Belowobligations, is pension a expense summarybenefits, included of net in interest our cost, employee remeasurements, accrued and salaries benefit benefits paid. and ALLOCATION OF PLAN ASSETS Plan assets consist primarily ofstocks pooled and funds bonds. that The invest pooled in fundssecurities. common have As investments a in our result, equity of approximately plan $5 assets million are indirectly (2017 investeddefined – in benefit $7 our plans. own million) securities under our We make contributions to themembers plans and to secure invest theranges benefits in of established permitted plan byactuarial investments assumptions on using our an annual the basis. Pension target Committee, which reviews Equity securities: Debt securities Other – cash (In millions of dollars) Change in financial assumptions (In millions of dollars) The remeasurement recognized in theComprehensive Consolidated Income Statements is of determined as follows: (Loss) return on plan assets (excluding Accrued benefit obligation, beginning Pension expense, recognized in Net interest cost, recognized in finance Remeasurements, recognized in other Benefits paid Accrued benefit obligation, end of year We alsoexpense have of $8 million defined inin 2018 employee contribution (2017 salaries – and $6 benefits plans million), expense. which is with included total pension – – 9 4 9 14 81 42 81 (76) (72) 137 152 742 137 146 150 2017 2017 2017 2017 1,134 1,890 2,006 2,342 6 4 39 85 (43) (68) 85 12 12 143 (73) (43) (168) 810 143 112 116 2018 As at December 31 2,342 2,330 2018 2018 2018 1,149 1,965 Years ended December 31 Years ended December 31 Years ended December 31 Net interest cost Current service cost Past service recovery Net pension expense Administrative expense of year comprehensive income and equity year finance costs income (In millions of dollars) Below is a summary offunded the obligations. accrued benefit obligations arising from (In millions of dollars) (In millions of dollars) (In millions of dollars) Accrued benefit obligations, beginning Current service cost Past service recovery Contributions by employees Plan assets arecommon comprised stocks mainly and ofBelow bonds pooled is a that funds summary that are ofby the invest traded major fair category. value in in of the an total active pension plan market. assets Interest cost Benefits paid Remeasurements, recognized in other Accrued benefit obligations, end of Equity securities Debt securities Other – cash Total fair value of plan assets Below is a summary of ourincluded net in pension finance expense. Net costs; interestsalaries other cost pension is expenses and areConsolidated included Statements in of benefits Income. expense in operating costs on the Interest income on plan assets Interest cost on plan obligation Net interest cost, recognized in Plan cost: Total pension cost recognized in net Net interest cost, a componentin finance of costs the and plan is cost outlined as above, follows: is included NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Below is a summary of the actual contributions to the plans. the 2019 actuarial funding valuations. The average duration of the defined benefit obligation as at December 31, 2018 is 18 years Years ended December 31 (2017 – 19 years). (In millions of dollars) 2018 2017 Plan assets recognized an actual net loss of $44 million in 2018 (2017 – $160 million net return). Employer contribution 148 145 Employee contribution 39 42 We have recognized a cumulative loss in other comprehensive Total contribution 187 187 income and retained earnings of $384 million as at December 31, 2018 (2017 – $425 million) associated with post-retirement benefit We estimate our 2019 employer contributions to our funded plans plans. to be $177 million. The actual value will depend on the results of

NOTE 23: SHAREHOLDERS’ EQUITY

CAPITAL STOCK

Number of shares Share class authorized for issue Features Voting rights Preferred shares 400,000,000 • Without par value •None • Issuable in series, with rights and terms of each series to be fixed by the Board prior to the issue of any series RCI Class A Voting Shares 112,474,388 • Without par value • Each share entitled to •Eachsharecanbe 50 votes converted into one Class B Non-Voting share RCI Class B Non-Voting Shares 1,400,000,000 • Without par value • None

RCI’s Articles of Continuance under the Business Corporations Act The holders of Class A Shares are entitled to receive dividends at (British Columbia) impose restrictions on the transfer, voting, and the rate of up to five cents per share but only after dividends at the issue of Class A Shares and Class B Non-Voting Shares to ensure rate of five cents per share have been paid or set aside on the we remain qualified to hold or obtain licences required to carry on Class B Non-Voting Shares. Class A Shares and Class B Non-Voting certain of our business undertakings in Canada. We are authorized Shares therefore participate equally in dividends above $0.05 per to refuse to register transfers of any of our shares to any person share. who is not a Canadian, as defined in RCI’s Articles of Continuance, On January 24, 2019, the Board declared a quarterly dividend of in order to ensure that Rogers remains qualified to hold the $0.50 per Class A Voting Share and Class B Non-Voting Share, to licences referred to above. be paid on April 1, 2019, to shareholders of record on March 12, 2019. DIVIDENDS We declared and paid the following dividends on our outstanding NORMAL COURSE ISSUER BID Class A Shares and Class B Non-Voting Shares: In April 2018, the TSX accepted a notice of our intention to Dividend per share commence a normal course issuer bid (NCIB) that allows us to Date declared Date paid (dollars) purchase, during the twelve-month period ending April 23, 2019, the lesser of 35.8 million Class B Non-Voting Shares and that January 25, 2018 April 3, 2018 0.48 number of Class B Non-Voting Shares that can be purchased under April 19, 2018 July 3, 2018 0.48 the NCIB for an aggregate purchase price of $500 million. We did August 15, 2018 October 3, 2018 0.48 not repurchase any shares under the NCIB in 2018. October 19, 2018 January 3, 2019 0.48 1.92

January 26, 2017 April 3, 2017 0.48 April 18, 2017 July 4, 2017 0.48 August 17, 2017 October 3, 2017 0.48 October 19, 2017 January 2, 2018 0.48 1.92

136 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 137 | 61 51 51 50 33 1.4 (74) 0.8% 3.2% 3.9% 2017 2017 21.2% 5.5 years 2.3 years 9.9 years $8.52 50 1.4 65 30 51 17 (33) 1.7% 3.3% 4.9% 2018 20.1% 2018 6.2 years 2.5 years 10.0 years $8.42 ROGERS COMMUNICATIONS INC. Years ended December 31 Years ended December 31 2018 ANNUAL REPORT receipt expense As at December 31,fair 2018, we value had of abased total $252 liability compensation, million recognized including (2017 atThe its – stock current portion $223 options, of million) this RSUs,is is related $186 and included million to in DSUs. (2017 stock- – accountsterm $157 payable million) portion and and of accruedincluded in liabilities. this other The long-term is liabilities long- (see $66 note 21). The million total (2017 intrinsic value –between of $66 the vested liabilities, million) exercisetrading which price and price is of the of is the difference Classbased the B awards, share-based Non-Voting as Shares at awards for$69 December all and million). 31, vested 2018 share- the was $112 millionWe (2017 paid – $69 millionstock in options, 2018 (2017 RSUs,settlement feature, – representing and $107 a weighted DSUs million) averagethe share to date upon price of holders on exercise of exercise of $61.84 (2017 using – $59.68). the cash Equity derivative effect, net of interest Total stock-based compensation Deferred share units Volatility has been estimatedof based our on Class the B Non-Voting actual Shares. trading statistics Restricted share units EXPLANATORY INFORMATION Below is awhich summary is included of in employee our salaries and stock-based benefits expense. compensation expense, USE OF ESTIMATES AND JUDGMENTS ESTIMATES Significant management estimates arevalue used of stock to options, determine RSUs, theweighted and DSUs. average fair The fair table value belowand shows of the stock 2017 options and grantedBlack-Scholes during the 2018 model principaltrinomial assumptions for option used pricing non-performance-based models in fordetermine their performance-based options applying fair options value to the at and the grant date. Dividend yield Volatility of Class B Non-Voting Shares Weighted average expected life Weighted average time to vest Weighted average time to expiry Risk-free interest rate Lattice steps Weighted average fair value Employee exit rate Suboptimal exercise factor (In millions of dollars) Stock options Employee share accumulation plan Employees voluntarily participate in thecontributing share accumulation a plan specified by percentagematch of their employee regular earnings.recognize contributions our We contributions as up a compensationwe expense to in the make year aaccumulation plan them. certain are included in amount Expenses operating costs. and relating to the employee share Restricted share unit (RSU) and deferredWe share recognize unit outstanding (DSU) plans RSUs andthe DSUs as liabilities liabilities, and measuring values, compensation costs which based areNon-Voting on Shares, the based and recognizing awards’ them oncosts as fair over charges the the to vesting operating market periodchanges after of price it the has awards. been of If grantedrecognize an and the before the award’s the fair exercise resulting Class value date,costs we changes in B the in year the the changeis occurs. For liability established RSUs, the within payment asamount amount operating is of established as of the the exercise vesting date. date. For DSUs, the payment Stock option plans Cash-settled share appreciationstock rights options (SARs) granted under are ourfeature attached employee stock allows to option all plan. thepayment This equal option to the holderwhich intrinsic to the value of market choose the pricethe option to of exercise (the the receive amount price Class by ofexercising a B the Non-Voting the cash option Share option exceeds on toclassify the all acquire outstanding exercise Class stock date) Bas options instead liabilities Non-Voting with and of cash Shares. carry settlement them We Black-Scholes at features their option fair pricing value, determined modelmodel, using or depending the a on trinomial theremeasure the option nature fair pricing of value of theto the share-based operating liability award. each costs period We periodortothedateanemployeeiseligibletoretire(whicheveris using and amortize graded it vesting,shorter). either over the vesting NOTE 24: STOCK-BASED COMPENSATION ACCOUNTING POLICY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK OPTIONS market value of the Class B Non-Voting Shares, determined as the Options to purchase our Class B Non-Voting Shares on a five-day average before the grant date as quoted on the TSX. one-for-one basis may be granted to our employees, directors, and officers by the Board or our Management Compensation Performance options Committee. There are 65 million options authorized under various We granted 439,435 performance-based options to certain key plans; each option has a term of seven to ten years. The vesting executives in 2018 (2017 – 489,835). These options vest on a period is generally graded vesting over four years; however, the graded basis over four years provided that certain targeted stock Management Compensation Committee may adjust the vesting prices are met on or after each anniversary date. As at terms on the grant date. The exercise price is equal to the fair December 31, 2018, we had 1,575,605 performance options (2017 – 1,540,158) outstanding.

Summary of stock options Below is a summary of the stock option plans, including performance options. Year ended December 31, 2018 Year ended December 31, 2017 Weighted average Weighted average (In number of units, except prices) Number of options exercise price Number of options exercise price Outstanding, beginning of year 2,637,890 $49.42 3,732,524 $43.70 Granted 850,700 $58.88 993,740 $59.71 Exercised (679,706) $45.20 (1,603,557) $42.10 Forfeited (89,272) $55.94 (484,817) $50.74 Outstanding, end of year 2,719,612 $53.22 2,637,890 $49.42 Exercisable, end of year 1,059,590 $46.26 924,562 $42.32

Below is a summary of the range of exercise prices, the weighted average exercise price and the weighted average remaining contractual life as at December 31, 2018. Options outstanding Options exercisable Weighted average Number remaining contractual Weighted average Number Weighted average Range of exercise prices outstanding life (years) exercise price exercisable exercise price $37.96 – $39.99 360,248 0.16 $37.96 360,248 $37.96 $40.00 – $44.99 245,052 5.02 $44.31 152,901 $43.97 $45.00 – $49.99 575,064 5.36 $48.93 382,303 $48.56 $50.00 – $59.99 1,011,698 8.53 $58.04 41,680 $56.70 $60.00 – $64.99 489,835 8.44 $62.82 122,458 $62.82 $65.00 – $68.10 37,715 9.68 $68.10 – – 2,719,612 6.43 $53.22 1,059,590 $46.26

Unrecognized stock-based compensation expense as at to 150% of the initial number granted based upon the December 31, 2018 related to stock-option plans was $8 million achievement of certain annual and cumulative three-year (2017 – $6 million) and will be recognized in net income over the non-market targets. nextfouryearsastheoptionsvest. Summary of RSUs RESTRICTED SHARE UNITS Below is a summary of the RSUs outstanding, including The RSU plan allows employees, directors, and officers to performance RSUs. participate in the growth and development of Rogers. Under the terms of the plan, RSUs are issued to the participant and the units Years ended December 31 issued vest over a period of up to three years from the grant date. (In number of units) 2018 2017 On the vesting date, we will redeem all of the participants’ RSUs in Outstanding, beginning of year 1,811,845 2,237,085 cash or by issuing one Class B Non-Voting Share for each RSU. We Granted and reinvested dividends 1,217,487 826,081 have reserved 4,000,000 Class B Non-Voting Shares for issue under Exercised (597,015) (984,342) this plan. Forfeited (213,392) (266,979)

Performance RSUs Outstanding, end of year 2,218,925 1,811,845 We granted 263,239 performance-based RSUs to certain key executives in 2018 (2017 – 133,559). The number of units that vest Unrecognized stock-based compensation expense as at and will be paid three years from the grant date will be within 50% December 31, 2018 related to these RSUs was $59 million (2017 –

138 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 139 | 3 19 32 10 2017 2 33 18 13 2018 ROGERS COMMUNICATIONS INC. Years ended December 31 1 2018 ANNUAL REPORT of our legal services; and services to the Company. benefits Stock-based compensation does notClass B include Non-Voting the Shares or effect equity derivatives. of changes in fair value of Total compensation Transactions We have entered into businesspartners transactions or with senior companies officers whose are Directors• of RCI. the These directors non-executive are: chairman of a law firm• that provides the a portion chair of the board of a company that provides printing 1 EMPLOYEE SHARE ACCUMULATION PLAN Participation in the planto is 10% voluntary. of Employees their can regular contributean earnings up through payroll annual deductionsadministrator (up purchases to maximum Class Bbasis Non-Voting on contribution the Shares open on marketeach on a of behalf monthly of month, the employee. $25,000). we Atemployee’s the end make contribution of The that auses month contribution this plan and amount of the toemployee. 25% purchase plan additional to administrator We sharescompensation 50% expense. on behalf of recognize of the the ourCompensation contributions expenseaccumulation plan was $46 made million related in 2018 (2017 as – to $43 million). EQUITY a DERIVATIVES theWe employee have entered into equitystock-based share derivatives compensation to expense hedge (see note aa 16) portion $33 and of million recognized our recovery (2017compensation – expense for $74 these million derivatives. recovery) in stock-based (In millions of dollars) Compensation Compensation expense for keyin management “employee personnel included salaries,wasasfollows: benefits, and stock-based compensation” Salaries and other short-term employee Post-employment benefits Unrecognized stock-basedDecember 31, 2018 related compensation$22 to these million) DSUs and was expense willthree $7 million be years (2017 recognized as as – invested. the net executive income at DSUs over vest. the All next other DSUs are fully Stock-based compensation 2017 735,117 (333,111) (470,817) 2,396,458 2,327,647 2018 131,051 (334,930) (119,328) 2,327,647 2,004,440 Years ended December 31 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL Key management personnelsenior include the corporate directorsplanning, and directing, officers, and our controlling our most who business activities. are primarily responsible for Our ultimate controlling(the shareholder Trust), is which the holdsthe Rogers voting Trust are Control control members of Trust of the RCI.represent Rogers the The family. Rogers Certain beneficiaries family. directors of of RCI We entered intoholding certain companies transactions controlled withwere recognized by private at the Rogers theand family Trust. amount are subject agreed These to to theapproved transactions by terms by and the the conditions Audit related of andpaid parties formal Risk were less agreements Committee. than The $1 totals million for received each or of 2018 and 2017. NOTE 25: RELATED PARTY TRANSACTIONS CONTROLLING SHAREHOLDER Summary of DSUs Below isperformance DSUs. a summary of the DSUs outstanding, including Performance DSUs We grantedexecutives 40,269 in 2018 performance-based (2017 —and 191,875). DSUs may The number be to of redeemed unitsdate that certain by will vest the key be holderbased three within years upon 50% from the to thethree-year non-market achievement 150% grant targets. of of certain the initial annual number and granted cumulative The DSU plan allowssenior directors, certain management keycompensation executives, in to and DSUs. other issued Under elect to the the participant terms and toof the of up units to issued the three cliff receive years vest plan, from over the DSUs a grant certain period date. are types of $41 million) and willthree years be as the recognized RSUs in vest. net income over theDEFERRED SHARE next UNITS Outstanding, beginning of year (In number of units) Granted and reinvested dividends Exercised Forfeited Outstanding, end of year NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We recognize these transactions at the amount agreed to by the associates to transfer funds to Rogers as cash dividends or to repay related parties, which are also reviewed by the Audit and Risk loans or advances, subject to the approval of other shareholders Committee. The amounts owing are unsecured, interest-free, and where applicable. due for payment in cash within one month of the date of the We carried out the following business transactions with our transaction. Below is a summary of related party activity for the associates and joint arrangements. Transactions between us and business transactions described above. our subsidiaries have been eliminated on consolidation and are not Outstanding disclosed in this note. Years ended balance as at (In millions of dollars) December 31 December 31 Years ended December 31 2018 2017 2018 2017 (In millions of dollars) 2018 2017 Printing and legal services 13 17 – – Revenue 86 74 Purchases 197 198 SUBSIDIARIES, ASSOCIATES, AND JOINT ARRANGEMENTS Outstanding balances at year-end are unsecured, interest-free, and We have the following material operating subsidiaries as at settled in cash. December 31, 2018 and 2017: • Rogers Communications Canada Inc.; and As at December 31 • Rogers Media Inc. (In millions of dollars) 2018 2017 We have 100% ownership interest in these subsidiaries. Our subsidiaries are incorporated in Canada and have the same Accounts receivable 99 80 reporting period for annual financial statements reporting. Accounts payable and accrued liabilities 20 26 When necessary, adjustments are made to conform the accounting policies of the subsidiaries to those of RCI. There are no significant restrictions on the ability of subsidiaries, joint arrangements, and

NOTE 26: GUARANTEES

We had the following guarantees as at December 31, 2018 and PURCHASES AND DEVELOPMENT OF ASSETS 2017 as part of our normal course of business: As part of transactions involving purchases and development of assets, we may be required to pay counterparties for costs and BUSINESS SALE AND BUSINESS COMBINATION losses incurred as a result of breaches of representations and AGREEMENTS warranties, loss or damages to property, changes in laws and As part of transactions involving business dispositions, sales of regulations (including tax legislation), or litigation against the assets, or other business combinations, we may be required to pay counterparties. counterparties for costs and losses incurred as a result of breaches of representations and warranties, intellectual property right INDEMNIFICATIONS infringement, loss or damages to property, environmental liabilities, We indemnify our directors, officers, and employees against claims changes in laws and regulations (including tax legislation), litigation reasonably incurred and resulting from the performance of their against the counterparties, contingent liabilities of a disposed services to Rogers. We have liability insurance for our directors and business, or reassessments of previous tax filings of the corporation officers and those of our subsidiaries. that carries on the business. No amount has been accrued in the Consolidated Statements of Financial Position relating to these types of indemnifications or SALES OF SERVICES guarantees as at December 31, 2018 or 2017. Historically, we have As part of transactions involving sales of services, we may be not made any significant payments under these indemnifications or required to make payments to counterparties as a result of guarantees. breaches of representations and warranties, changes in laws and regulations (including tax legislation), or litigation against the counterparties.

140 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 141 | excess of one year at After 5Years Total ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT ting programs and films for periods in USE OF ESTIMATES AND JUDGMENTS JUDGMENTS We are exposed tolawsuits possible against losses us related fortherefore to which various the make claims outcomeprobability and of is loss when significant not we assess yet contingent liabilities. known. judgments We in determining the would effectively becollected. a reimbursement of allIn system 2007, the access Saskatchewan fees Courtto granted have the the plaintiffs’ proceeding application certifiedwhere as affected a customers outside national, Saskatchewan “opt-in”steps must class to take action specific participate in thethe proceeding. proceeding In 2008, based ourservice motion on agreements to was the granted. stay The arbitrationthat Saskatchewan Court its clause directed order, inexclude in our customers respect wireless who of arethe the class bound certification of plaintiffs. by of an the arbitration action, clauseIn would from 2009, counselunder for the the Class plaintiffsclaims Actions as began Act the a (Saskatchewan) originalaction second asserting proceeding. would proceeding If the successful,proceeding same be this was ordered an second conditionally class stayedthat “opt-out” it in was 2009 class an on abuse the of proceeding. process. basis At This the second time2004, the corresponding Saskatchewan claimsacross class were Canada, action although filed wasappeal the commenced in courts plaintiffs in multiple in tookclaims jurisdictions several no as an provinces active abuse of dismissed steps. process.Saskatchewan The have The the claims now in corresponding been all dismissed provincesnot other or recognized than discontinued. a We liability have for this contingency. 911 fee In June 2008, a classproviders action of wireless was communications launched services in in Saskatchewan Canada. against It involves 63 8 14 – 85 448667 332 1,048 1,079 202 1,346 80 4,140 1,062 asting rights for sports broadcas 1 Year 1-3 Years 4-5 Years 244 183 383 810 Less than 2018 product, and wireless device contracts to which we have committed. As at December 31 2 1 3 equipment ventures contract inception. Program rights are the agreements into which we have entered to acquire broadc Player contracts are Toronto Blue JaysPurchase players’ obligations salary are contracts the into contractual which obligations we under have service, entered and are contractually obligated to pay. Operating leasesPlayer contracts 208 312 172 287 979 System access fee – Saskatchewan In 2004, awireless communications class in action Canada(Saskatchewan). The under was class the commenced action Classwireless relates against Actions carriers to charge Act providers the toare system some of seeking access of unspecified fee their damages customers. The and plaintiffs punitive damages, which CONTINGENT LIABILITIES We have the2018: following contingent liabilities as at December 31, 3 Operating leases and otheroffice rental premises, contracts and are retailof for outlets the network across the sites, lease country.optional terms The renewals. range Rent majority expense from for$228 five 2018 million). was to $228 fifteen million (2017 years – andBelow excludes is a summary ofnot our included other in the contractual table commitments above. that are 1 2 (In millions of dollars) (In millions of dollars) COMMITMENTS Below is aDecember summary 31, 2018. of the future minimum payments for our contractual commitments that are not recognized as liabilities as at EXPLANATORY INFORMATION Acquisition of property, plant and Contingent liabilities are liabilitiesand of are uncertain not timingresultofapastevent,itisprobablethatwewillexperiencean recognized or until amount weoutflow have of a resources present embodyingobligation, obligation and economic as a benefits reliable a tothe estimate obligation. settle can be the made of the amountWe of disclose ouroutflow contingent of liabilities resources in unless settlement is the remote. possibility of an NOTE 27: COMMITMENTS AND CONTINGENT LIABILITIES ACCOUNTING POLICY Acquisition of intangible assets Commitments related to associates and joint Total other commitments Purchase obligations Program rights Total commitments 1,386 1,700 1,467 1,713 6,266 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

allegations of breach of contract, misrepresentation, and false could materially change the amount of current and deferred advertising, among other things, in relation to the 911 fee that had income tax assets and liabilities and provisions, and could, in been charged by us and the other wireless telecommunication certain circumstances, result in the assessment of interest and providers in Canada. The plaintiffs are seeking unspecified penalties. damages and restitution. The plaintiffs intend to seek an order certifying the proceeding as a national class action in Other claims Saskatchewan. We have not recognized a liability for this There are certain other claims and potential claims against us. We contingency. do not expect any of these, individually or in the aggregate, to have a material adverse effect on our financial results. Cellular devices In July 2013, a class action was launched in British Columbia against Outcome of proceedings providers of wireless communications in Canada and The outcome of all the proceedings and claims against us, manufacturers of wireless devices. The class action relates to the including the matters described above, is subject to future alleged adverse health effects incurred by long-term users of resolution that includes the uncertainties of litigation. It is not cellular devices. The plaintiffs are seeking unspecified damages possible for us to predict the result or magnitude of the claims due and punitive damages, effectively equal to the reimbursement of to the various factors and uncertainties involved in the legal the portion of revenue the defendants have received that can process. Based on information currently known to us, we believe it reasonably be attributed to the sale of cellular phones in Canada. is not probable that the ultimate resolution of any of these We have not recognized a liability for this contingency. proceedings and claims, individually or in total, will have a material adverse effect on our business, financial results, or financial Income taxes condition. If it becomes probable that we will be held liable for We provide for income taxes based on all of the information that is claims against us, we will recognize a provision during the period in currently available and believe that we have adequately provided which the change in probability occurs, which could be material to for these items. The calculation of applicable taxes in many cases, our Consolidated Statements of Income or Consolidated however, requires significant judgment (see note 12) in interpreting Statements of Financial Position. tax rules and regulations. Our tax filings are subject to audits, which

NOTE 28: SUPPLEMENTAL CASH FLOW INFORMATION

CHANGE IN NON-CASH OPERATING WORKING CAPITAL CAPITAL EXPENDITURES ITEMS Years ended December 31 Years ended December 31 (In millions of dollars) 2018 2017 2018 2017 Capital expenditures before proceeds on (restated, (In millions of dollars) seenote2) disposition 2,815 2,510 Proceeds on disposition (25) (74) Accounts receivable (133) (160) Inventories (31) 17 Capital expenditures 2,790 2,436 Other current assets (6) 17 Accounts payable and accrued liabilities 103 9 Contract and other liabilities (47) (47) Total change in non-cash operating working capital items (114) (164)

142 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT NOTES 143 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Notes Glossary of selected industry terms and helpful links

3G (Third Generation Wireless): The third bps (Bits per Second): Ameasurementofdata Fibre Optics: A method for the transmission of generation of mobile phone standards and transmission speed used for measuring the amount information (voice, video, or data) in which light is technology. A key goal of 3G standards was to of data that is transferred in a second between two modulated and transmitted over hair-thin filaments of enable mobile broadband data speeds above 384 telecommunications points or within network devices. glass called fibre optic cables. The bandwidth Kbps. 3G networks enable network operators to offer Kbps (kilobits per second) is thousands of bps; Mbps capacity of fibre optic cable is much greater than that users a wider range of more advanced services while (megabitspersecond)ismillionsofbps;Gbps of copper wire and light can travel relatively long achieving greater network capacity through improved (gigabitspersecond)isbillionsofbps;andTbps distances through glass without the need for spectral efficiency. Advanced services include video (terabitspersecond)istrillionsofbps. amplification. and multimedia messaging and broadband wireless data, all in a mobile environment. Broadband: Communications service that allows for FTTH (Fibre-to-the-Home)/FTTP (Fibre-to-the- the high-speed transmission of voice, data, and video Premise): Represents fibre optic cable that reaches 3.5G (Enhanced Third Generation Wireless): simultaneously at rates of 1.544 Mbps and above. the boundary of the home or premise, such as a box Evolutionary upgrades to 3G services that provide on the outside wall of a home or business. significantly enhanced broadband wireless data Bundling: Refers to the coupling of independent performance to enable multi-megabit data speeds. products or services offered into one retail package. GSM (Global System for Mobile Communications): The key 3.5G technologies in North America are A TDMA-based technology and a member of the HSPA and CDMA EV-DO. BYOD (Bring Your Own Device): Refers to the action “second generation” (2G) family of mobile protocols that customers are able to sign up for wireless that is deployed widely around the world, especially 4G (Fourth Generation Wireless): A technology that services on a personally purchased device, as at the 850, 900, 1800, and 1900 MHz frequency offers increased voice, video, and multimedia opposed to the traditional means of acquiring one bands. capabilities, a higher network capacity, improved through a term contract. spectral efficiency, and high-speed data rates over HDR (High Dynamic Range): An imaging technique current 3G benchmarks. Also referred to as LTE. Cable Telephony (Phone): The transmission of real- used to reproduce a greater dynamic range of time voice communications over a cable network. luminosity than is possible with standard digital 4.5G (Enhanced Fourth Generation Wireless): imaging or photographic techniques. Evolutionary upgrades to 4G services that enables Churn: This business performance measure is used two to three times the download speeds of 4G to describe the disconnect rate of customers to a Hertz: A unit of frequency defined as one cycle per technology. 4.5G technology has been designed to telecommunications service. It is a measure of second. It is commonly used to describe the speeds support virtual and augmented reality, 4K streaming, customer turnover and is often at least partially at which electronics are driven in the radio industry. and other emerging services. reflective of service quality and competitive intensity. It MHz (megahertz) is millions of hertz; GHz (gigahertz) is usually expressed as a percentage and calculated is billions of hertz; and THz is trillions of hertz. 5G (Fifth Generation Wireless): The proposed next as the number of subscriber units disconnecting in a generation of wireless telecommunications period divided by the average number of units on the Homes Passed: Total number of homes that have the standards. We expect 5G technology to result in network in the same period. potential for being connected to a cable system in a significantly reduced latency compared to LTE, defined geographic area. improvements in signalling efficiency and coverage, CLEC (Competitive Local Exchange Carrier): A and the ability to connect to more devices at once telecommunications provider company that Hosting (Web Hosting): The business of housing, than ever before. competes with other, already established carriers, serving, and maintaining files for one or more generally the ILEC. websites or e-mail accounts. Using a hosting service 4K - Ultra-High Definition Video: Denotes a specific allows many companies to share the cost of a high- television display resolution of 4096x2160 pixels. Cloud Computing: The ability to run a program or speed Internet connection for serving files, as well as 1920x1080 resolution full-HD televisions present an application on many connected computers other Internet infrastructure and management costs. image of around 2 megapixels, while the 4K simultaneously as the software, data, and services generation of screens displays an 8 megapixel reside in data centres. Hotspot: A Wi-Fi access point in a public place, such image. as a café, train station, airport, commercial office CPE (Customer Premise Equipment): property, or conference centre. ABPU (Average Billings per User): This business Telecommunications hardware, such as a modem or performance measure, expressed as a dollar rate per set-top box, that is located at the home or business of HSPA (High-Speed Packet Access): HSPA is an month, is predominantly used in the wireless industry acustomer. IP-based packet-data enhancement technology that to describe the average amount billed to customers provides high-speed broadband packet data services per month. ABPU is an indicator of a business’ CRTC (Canadian Radio-television and over 3G networks. HSPA+ provides high-speed operating performance. Telecommunications Commission): The federal broadband packet data services at even faster speeds regulator for radio and television broadcasters and than HSPA over 4G networks. ARPU (Average Revenue per User): This business cable TV and telecommunications companies in performance measure, expressed as a dollar rate per Canada. HUP (Hardware Upgrade): The act of an existing month, is predominantly used in the wireless and wireless customer upgrading to a new wireless cable industries to describe the revenue generated Data Centre: A facility used to house computer device. percustomerpermonth.ARPUisanindicatorofa systems and associated components, such as wireless or cable business’ operating performance. telecommunications and storage systems. It generally Hybrid Fibre-Coaxial Network Architecture (HFC): A includes redundant or backup power supplies, technology in which fibre optic cable and coaxial AWS (Advanced Wireless Services): The wireless redundant data communications connections, cable are used in different portions of a network to telecommunications spectrum band that is used for environmental controls (e.g., air conditioning, fire carry broadband content (such as video, voice, and wireless voice, data, messaging services, and suppression), and security controls. data) from a distribution facility to a subscriber multimedia. premise. DOCSIS (Data Over Cable Service Interface Bandwidth: Bandwidth can have two different Specification): A non-proprietary industry standard ILEC (Incumbent Local Exchange Carrier): The meanings: (1) a band or block of radio frequencies developed by CableLabs that allows for equipment dominant telecommunications company providing measured in cycles per second, or Hertz; or (2) an interoperability from the headend to the CPE. The local telephone service in a given geographic area amount or unit of capacity in a telecommunications latest version (DOCSIS 3.1) enables bonding of when competition began. Typically, an ILEC is the transmission network. In general, bandwidth is the multiple channels to allow for download speeds up traditional phone company and the original local available space to carry a signal. The greater the to 10 Gbps and upload speeds up to 2 Gbps, exchange carrier in a given market. bandwidth, the greater the information-carrying depending upon how many channels are bonded capacity. together. IoT (Internet of Things): The concept of connecting everyday objects and devices (e.g., appliances and BDU (Broadcast Distribution Undertaking): An DSL (Digital Subscriber Line): A family of broadband cellular phones) to the Internet and each other. This undertaking for the reception of broadcasting and technologies that offers always-on, high-bandwidth allows them to sense their environment and the retransmission thereof by radio waves or other (usually asymmetrical) transmission over an existing communicate between themselves, allowing for the means of telecommunication to more than one twisted-pair copper telephone line. DSL shares the seamless flow of data. permanent or temporary residence or dwelling unit samephonelineasthetelephoneservicebutusesa or to another such undertaking. different part of the phone line’s bandwidth.

144 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT Helpful links

IP (Internet Protocol): The packet-based computer POPs (Persons of Population): A wireless industry Canadian Radio-Television and Telecommunications network protocol that all machines on the Internet term for population or number of potential Commission (CRTC) must know so they can communicate with one subscribers in a market, a measure of the market size. The CRTC is an independent public organization that another. IP is a set of data switching and routing rules A POP refers to one person living in a population regulates and supervises the Canadian broadcasting that specify how information is cut up into packets area, which, in whole or in substantial part, is included and telecommunications systems. It reports to and how they are addressed for delivery between inthecoverageareas. Parliament through the Minister of Canadian computers. Heritage. www.crtc.gc.ca Postpaid: A conventional method of payment for IPTV (Internet Protocol Television): Asystemwhere wireless service where a subscriber pays a fixed Innovation, Science and Economic Development a digital television signal is delivered using IP. Unlike monthly fee for a significant portion of services. Canada (ISED Canada) broadcasting, viewers receive only the stream of Usage (e.g. long distance) and overages are billed in ISED Canada is a ministry of the federal government content they have requested (by surfing channels or arrears, subsequent to consuming the services. The whose mission is to foster a growing, competitive, ordering video on demand). fees are often arranged on a term contract basis. knowledge-based Canadian economy. It also works with Canadians throughout the economy and in all ISED Canada (Innovation, Science and Economic Prepaid: A method of payment for wireless service parts of the country to improve conditions for Development Canada): The Canadian federal that requires a subscriber to prepay for a set amount investment, improve Canada’s innovation government department responsible for, amongst of airtime or data usage in advance of actual usage. performance, increase Canada’s share of global other things, the regulation, management, and Generally, a subscriber’s prepaid account is debited trade, and build an efficient and competitive allocation of radio spectrum and establishing at the time of usage so that actual usage cannot marketplace. www.ic.gc.ca technical requirements for various wireless systems. exceed the prepaid amount until an additional prepayment is made. Federal Communications Commission (FCC) ISP (Internet Service Provider): A provider of Internet The FCC is an independent United States access service to consumers and/or businesses. PVR (Personal Video Recorder): Aconsumer government agency. The FCC was established by the electronics device or application software that records Communications Act of 1934 and is charged with LAN (Local Area Network): A network created via video in a digital format. The term includes set-top regulating interstate and international linked computers within a small area, such as a single boxes with direct-to-disk recording capabilities, which communications by radio, television, wire, satellite, site or building. enables video capture and playback to and from a and cable. The FCC’s jurisdiction covers the 50 states, hard disk. the District of Columbia, and U.S. territories. LTE (Long-Term Evolution): A fourth generation www.fcc.gov Set-Top Box: A standalone device that receives and cellular wireless technology (also known as 4G) that has decodes programming so that it may be displayed Canadian Wireless Telecommunications evolved and enhanced the UMTS/HSPA+ mobile on a television. Set-top boxes may be used to receive Association (CWTA) phone standards. LTE improves spectral efficiency, broadcast, cable, and satellite programming. The CWTA is the industry trade organization and lowers costs, improves services, and, most importantly, authority on wireless issues, developments, and allows for higher data rates. LTE technology is designed Spectrum: A term generally applied to trends in Canada. It represents wireless service to deliver speeds up to 300 Mbps. electromagnetic radio frequencies used in the providersaswellascompaniesthatdevelopand transmission of sound, data, and video. Various produce products and services for the industry, LTE Advanced: A mobile communication standard portions of spectrum are designated for use in including handset and equipment manufacturers, that represents a major enhancement of the LTE cellular service, television, FM radio, and satellite content and application creators, and standard. With a peak data rate of 1 Gbps, LTE transmissions. business-to-business service providers. www.cwta.ca Advanced also offers faster switching between power SVOD (Subscription Video-on-Demand): Refers to a states and improved performance at the cell edge. The Wireless Association (CTIA) service that offers, for a monthly charge, access to The CTIA is an international non-profit membership specific programming with unlimited viewing on an M2M (Machine-to-Machine): The wireless inter- organization, founded in 1984, representing wireless on-demand basis. connection of physical devices or objects that are carriers and their suppliers, as well as providers and seamlessly integrated into an information network to TPIA (Third-Party Internet Access): Wholesale high- manufacturers of wireless data services and products. become active participants in business processes. speed access services of large cable carriers that The CTIA advocates on their behalf before all levels of Services are available to interact with these ‘smart enable independent service providers to offer retail government. www.ctia.org objects’ over the Internet, query, change their state, Internet services to their own end-users. and capture any information associated with them. GSM Association (GSMA) TSU (Total Service Unit): In the cable TV industry, this The GSMA is a global trade association representing MVNO (Mobile Virtual Network Operator): A typically refers to television, Internet, and cable nearly 800 operators with more than 300 companies wireless communications service provider that does telephony subscribers. A subscriber that has in the broader mobile ecosystem, including handset not own the wireless network infrastructure through purchased television and Internet services is counted and device makers, software companies, equipment which it provides services to its customers. as two TSUs. A subscriber that has purchased providers, and Internet companies, as well as television, Internet, and cable telephony services is organizations in adjacent industry sectors. In addition, Near-net: Customer location(s) adjacent to network counted as three TSUs, etc. more than 180 manufacturers and suppliers support infrastructure allowing connectivity to the premises to the Association’s initiatives as associate members. be extended with relative ease. VOD (Video-on-Demand): A cable service that allows The GSMA works on projects and initiatives that a customer to select and view movies and shows at address the collective interests of the mobile industry, Off-net: Customer location(s) where network any time from a library of thousands of titles. and of mobile operators in particular. infrastructure is not readily available, necessitating the www.gsma.com use of a third-party leased access for connectivity to VoIP (Voice over IP): The technology used to the premises. transmit real-time voice conversations in data packets Commission for Complaints for Telecom-television overadatanetworkusingIP.Suchdatanetworks Services (CCTS) On-net: Customer location(s) where network include telephone company networks, cable TV An independent organization dedicated to working infrastructure is in place to provide connectivity to the networks, wireless networks, corporate intranets, and with consumers and service providers to resolve premises without further builds or third-party leases. the Internet. complaints about telephone, television, and Internet An on-net customer can be readily provisioned. services. Its structure and mandate were approved by VoLTE (Voice over LTE): A platform to provide voice the CRTC. www.ccts-cprst.ca OTT (Over-the-Top): Audio, visual, or alternative services to wireless customers over LTE wireless media distributed via the Internet or other networks. The LTE standard only supports packet non-traditional media. switching, as it is all IP-based technology. Voice calls in GSM are circuit switched, so with the adoption of Penetration: Thedegreetowhichaproductor LTE, carriers are required to re-engineer their voice service has been sold into, or adopted by, the base of call network, while providing continuity for traditional potential customers or subscribers in a given circuit-switched networks on 2G and 3G networks. geographic area. This value is typically expressed as a percentage. Wi-Fi: Thecommercialnameforanetworking technology standard for wireless LANs that essentially provide the same connectivity as wired networks, but at lower speeds. Wi-Fi allows any user with a Wi-Fi-enabled device to connect to a wireless access For a more comprehensive glossary point. of industry and technology terms, go to rogers.com/glossary

2018 ANNUAL REPORT ROGERS COMMUNICATIONS INC. | 145 Corporate and shareholder information

CORPORATE OFFICES STOCK EXCHANGE LISTINGS COMMON STOCK TRADING AND Rogers Communications Inc. Toronto Stock Exchange (TSX): DIVIDEND INFORMATION 333 Bloor Street East, RCI.A – Class A Voting shares Toronto, ON M4W 1G9 Price RCI.B on TSX Dividends (CUSIP # 775109101) Declared 416.935.7777 RCI.B – Class B Non-Voting shares 2018 High Low Close per Share (CUSIP # 775109200) CUSTOMER SERVICE AND First Quarter $59.31 $55.63 $57.54 $0.48 PRODUCT INFORMATION New York Stock Exchange (NYSE): Second Quarter $63.02 $60.54 $62.44 $0.48 888.764.3771 or rogers.com RCI – Class B Non-Voting shares Third Quarter $68.68 $65.89 $66.43 $0.48 (CUSIP # 775109200) Fourth Quarter $72.45 $68.03 $69.96 $0.48 SHAREHOLDER SERVICES If you are a registered shareholder and have inquiries regarding your account, wish to change your name or Shares Outstanding at December 31, address, or have questions about lost stock 2018 certificates, share transfers, estate settlements or Class A Voting 111,155,637 dividends, please contact our transfer agent and registrar: Class B Non-Voting 403,657,038 DEBT SECURITIES AST Trust Company (Canada) For details of the public debt securities of the Rogers 2019 Expected Dividend Dates P.O. Box 700, Postal Station B companies, please refer to the “Debt Securities” Record Date*: Payment Date*: Montreal, QC H3B 3K3, Canada section under investors.rogers.com 416.682.3860 or 800.387.0825 March 12, 2019 April 1, 2019 [email protected] INDEPENDENT AUDITORS June 10, 2019 July 2, 2019 KPMG LLP Duplicate Mailings September 9, 2019 October 1, 2019 If you receive duplicate shareholder mailings from ON-LINE INFORMATION December 11, 2019 January 2, 2020 Rogers Communications, please contact AST Trust Rogers is committed to open and full financial Company (Canada) as detailed above to consolidate disclosure and best practices in corporate * Subject to Board approval your accounts. governance.Weinviteyoutovisit investors.rogers.com where you will find additional Unless indicated otherwise, all dividends paid by INVESTOR RELATIONS information about our business, including events and Rogers Communications are designated as “eligible” Institutional investors, securities analysts and others presentations, news releases, regulatory filings, dividends for the purposes of the Income Tax Act requiring additional financial information can visit governance practices, corporate social responsibility (Canada) and any similar provincial legislation. investors.rogers.com or contact us at: and our continuous disclosure materials, including quarterly financial releases, annual information forms, DIVIDEND REINVESTMENT PLAN (DRIP) 647.435.6470 or and management information circulars. You may also Rogers offers a convenient dividend reinvestment 416.935.7777 (outside North America) subscribe to our news by email or RSS feeds to program for eligible shareholders to purchase or [email protected] automatically receive Rogers news releases additional Rogers Communications shares by electronically. reinvesting their cash dividends without incurring CORPORATE PHILANTHROPY brokerage fees or administration fees. For plan For information relating to Rogers’ various DIRECT DEPOSIT SERVICE information and enrolment materials or to learn more philanthropic endeavours, refer to the “About Shareholders may have dividends deposited directly about Rogers’ DRIP, please visit https://ca.astfinancial. Rogers” section of rogers.com into accounts held at financial institutions. To arrange com/InvestorServices/Search-DRIP or contact AST direct deposit service, please contact AST Trust Trust Company (Canada) as detailed earlier on this SUSTAINABILITY Company (Canada) as detailed earlier on this page. page. Rogers is committed to continuing to grow responsibly and we focus our social and ELECTRONIC DELIVERY OF environmental sustainability efforts where we can SHAREHOLDER MATERIALS make the most meaningful impacts on both. To learn Registered shareholders can receive electronic notice more, please visit rogers.com/csr of financial reports and proxy materials by registering at https://ca.astfinancial.com/edelivery.This approach gets information to shareholders faster than conventional mail and helps Rogers protect the environment and reduce printing and postage costs.

Facebook CAUTION REGARDING FORWARD-LOOKING INFORMATION AND OTHER RISKS facebook.com/rogers This annual report includes forward-looking statements about the financial condition and Twitter prospects of Rogers Communications that involve significant risks and uncertainties that are @rogers detailed in the “Risks and Uncertainties Affecting our Business” and “About Forward-Looking LinkedIn Information” sections of the MD&A contained herein, which should be read in conjunction with linkedin.com/company/ all sections of this annual report. rogers-communications

The fibre used in the manufacture of the stock comes from well-managed forests, controlled sources, and recycled wood or fibre.

This annual report 2,373 litres 19 kg 52 kg CO2 of 1,000,000 BTUs is recyclable of water saved solid waste net greenhouse energy not not created gases prevented consumed

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146 | ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT The best is yet to come.

12 ROGERS COMMUNICATIONS INC. 2018 ANNUAL REPORT