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Rogers Communications Inc . 2017 Annual Report WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 For over 20 years, Rosemary has relied on to keep her growing family connected across the country. WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 About Rogers

Rogers is a proud Canadian company dedicated to making more possible for our customers each and every day. Our aim is simple: to inspire meaningful connections and spark the memorable moments that define our lives.

We do this by providing high-quality, worry- services – wireless, cable, Internet, information technology, and telephony – from coast to coast to coast.

Through Rogers Media, we bring Canadians incredible experiences across an enviable mix of assets in radio and television broadcasting, sports, magazines, and digital media.

It is all about connecting consumers and businesses to what matters most.

Page 2 Page 4 Page 6 Page 7 2017 financial and Segment Delivering on our A message operating results overview strategic priorities from our CEO

Page 15 Page 16 Page 18 Page 19 The year Corporate Senior executive Directors ahead governance officers

Page 21 Page 22 Page 152 Corporate social 2017 financial Corporate and responsibility report shareholder information

2017 ANNUAL REPORT INC. 1 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 2017 financial and operating results

Total service revenue +4% Adjusted operating profit +6% (in billions of dollars) (in billions of dollars)

2017 13.56 2017 5.38

2016 13.03 2016 5.09

Adjusted operating profit margin +80bps Free cash flow +2% (%) (in billions of dollars)

2017 38.0 2017 1.75

2016 37.2 2016 1.71

Total revenue Adjusted operating profit $14.1 $5.4 billion billion

l Wireless 58% l Wireless 64% l Cable 24% l Cable 31% l Media 15% l Media 3% l Business Solutions 3% l Business Solutions 2%

Wireless subscribers +208 Internet subscribers +85 (000s) (000s)

2017 10,482 2017 2,230

2016 10,274 2016 2,145

2 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Key Financial Information Years ended, or as at December 31 (in millions of dollars, except margins and per-share amounts, unaudited) 2017 2016 % Change

Total revenue 14,143 13,702 3 Total service revenue 1 13,560 13,027 4 Adjusted operating profit 2 5,379 5,092 6 Adjusted operating profit margin 2 38.0% 37.2% 0.8 pts

Net income 1,711 835 105 Adjusted income 2 1,821 1,481 23

Basic earnings per share $3.32 $1.62 105 Adjusted basic earnings per share 2 $3.54 $2.88 23

Capital expenditures 2,436 2,352 4 Cash provided by operating activities 3,938 3,957 – Free cash flow 2 1,746 1,705 2 Annualized dividend per share at year-end $1.92 $1.92 –

Key Performance Indicators Years ended, or as at December 31

2017 2016 Change

Subscriber count results (000s) 1 Wireless postpaid net additions 354 286 68 Wireless prepaid net additions 61 111 (50) Internet net additions 85 97 (12) Television net losses (80) (76) (4) Phone net additions 14 4 10

Additional Wireless metrics 1 Postpaid churn (monthly) 1.20% 1.23% (0.03 pts) Postpaid ARPA (monthly) $124.75 $117.37 $7.38 Blended ARPU (monthly) $62.31 $60.42 $1.89

Ratios Capital intensity 1 17.2% 17.2% – pts Dividend payout ratio of free cash flow 2 56.6% 57.9% (1.3 pts) Return on assets 1 5.9% 2.9% 3.0 pts Debt leverage ratio 2 2.8 3.0 (0.2)

1 As defined. See “Key Performance Indicators” in Management Discussion and Analysis. 2 Adjusted operating profit, adjusted operating profit margin, adjusted net income, adjusted basic earnings per share, free cash flow, 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. They 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.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 3 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Segment overview

Wireless

Postpaid and prepaid wireless services, including the latest devices and applications, to consumers and businesses under the Rogers, Fido, and brands. We reached 96% of the Canadian population on our LTE network at the end of 2017. We are augmenting our existing LTE network with the latest generation of 4.5G technology designed for a migration to a 5G environment.

Cable & Business Solutions

High- Internet access, television, phone, and advanced Wi-Fi services. In 2018, we plan to launch an all-IPTV platform, Ignite TV. We also provide network connectivity through our fibre network and data centres to support voice, data, networking, hosting, and cloud-based services for enterprises. Over time, we are migrating to the next generation of DOCSIS, which will enable upload and download speeds of up to 10 gigabits per second. This will provide a great Ignite TV experience and lay a critical foundation as we continue to build our roadmap to the connected home of the future, integrating key services like Smart Home Monitoring and more.

Media

A portfolio of media properties, including sports entertainment, television, publishing, and radio broadcasting. We are investing in and owning the content our audiences want most, and bringing it to them on their screen of choice. Our core focus is on local content and sports. We own the City, , and TV stations and a network of 55 radio stations across the country. We also own the Blue Jays, ’s only Major League Baseball team, and we have an exclusive national 12-year licensing agreement with the NHL. We have a 37.5% ownership interest in Maple Leaf Sports & Entertainment Ltd., which owns the Toronto Maple Leafs, the Toronto Raptors, Toronto FC, the Toronto Argonauts, and the Toronto Marlies.

4 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Total revenue Canada’s largest $8.3 wireless service provider billion

l Service 93% l Equipment 7%

Total revenue Canada’s largest $3.9 cable TV provider billion 4.3 million homes passed, representing the largest Cable footprint across ON, NB, NL 1 l Internet 42% 1 , , and the island of Newfoundland l Television 39% l Phone 9% Ignite Gigabit l Business Solutions 10% Internet service offered to our entire footprint

Total revenue

$2.2 #1 sports media brand billion for the third year in a row l Sports 57% Owner of the l Broadcasting 23% l TSC 15% Baseball Club l Digital and Publishing Content 5%

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 5 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Delivering on our strategic priorities

“We have set a clear, focused path for our future, with six strategic priorities to guide our decision-making and bring our purpose to life. I am pleased to share our priorities and our progress to date.”

Create best-in-class customer Invest in our networks and experiences by putting our customers technology to deliver leading first in everything we do performance and reliability

Deliver innovative solutions Drive profitable growth in and compelling content that all the markets we serve our customers will love

Develop our people and a Be a strong, socially responsible high-performance culture leader in our communities across Canada

6 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 A message from our CEO

Joe Natale President and Chief Executive Officer Rogers Communications Inc.

Dear Shareholders, It is an exciting time for Rogers – I am inspired by the incredible energy of our team, our enviable mix of business assets and the meaningful growth opportunities ahead of us. It is truly an honour to build on Ted’s legacy and to work with our 25,000 team members to write the next chapter in our history.

In 2017, our team delivered the best financial and subscriber results in many years. We grew total service revenue by 4%, adjusted operating profit by 6% and margins by 80 basis points. We grew after-tax free cash flow to $1.75 billion. We delivered on our full-year financial guidance and returned $988 million to shareholders through dividends. This momentum was reflected in our total shareholder return of 28% this year.

2017 Achievements Against Guidance 1 (in millions of dollars, except percentages) 2016 Actual 2017 Guidance ranges 2017 Actual Achievement

Consolidated Guidance Revenue 13,702 Increase of 3% to 5% 14,143 3.2% Adjusted operating profit 5,092 Increase of 5% to 6% 5,379 5.6% Capital expenditures 2,352 2,350 to 2,450 2,436 n/m Free cash flow 1,705 Increase of 2% to 4% 1,746 2.4%

1 Please see 2017 Financial Report.

Each and every day, our team members wake up with one purpose in mind: to connect our customers with the people and the memorable moments that matter most to them. At the heart of it, we bring people together – we connect people, businesses and communities to each other and to a world of possibilities around them. We leverage technology and media to help make truly special, human moments possible – this is hugely powerful! It is a responsibility that we take very seriously and that we deliver with tremendous pride and passion to our customers every day.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 7 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Create best-in-class customer experiences by putting our customers first in everything we do

Everything starts and ends with our customers, Invest in our networks and so improving their experience is core to our strategic technology to deliver leading plan. This means putting our customers first in performance and reliability everything we do and obsessing over their end-to- end experience. Our customers want reliable, worry-free networks It is about offering innovative products and services and their data use is doubling every 18 to 24 months that our customers find inspiring and make a across our networks. We will meet this demand with difference in their lives. It is about making every a disciplined capital investment plan focused on customer interaction clear, simple and fair. It is also generating an attractive return on investment. about building digital capabilities to give our In Wireless, we added new cell sites, expanded customers a reliable, consistent experience every our LTE coverage to reach 96% of Canadians and time they contact us. deployed more 700 MHz spectrum. We also In 2017, we delivered the best Wireless postpaid accelerated our move to 4.5G, setting the stage churn and the best postpaid net additions since 2010. for a smooth evolution to 5G. I am encouraged by this progress, but I know we can We have always invested to be at the forefront of do even better. This means investing substantially in commercially ready technology – we led with 1G, our frontline team so they have the tools and support then 2G, and then and 4G. Today, we are at the needed to best serve our customers. advent of 5G. In 2018, we will ramp up our efforts in I truly believe what gets measured gets done. conducting 5G trials to support our development. So we are directly tying our customer experience Over the next few years, we will deliver a broad range improvements to our incentive plan. In 2018, 50% of 5G services across mobility, broadband and the of our annual bonus plan will be based on the Internet of Things. achievement of key customer metrics. In Cable, we leveraged our Gigabit and DOCSIS 3.1 advantage to give our customers the fastest widely available speeds in our market. We expanded our fibre infrastructure and reduced the number of homes passed per node to deliver greater speeds and more reliable service.

We continue to be impressed with DOCSIS and we are getting ready for the next generation, which will “It is about offering support upload and download speeds of up to innovative products and 10 Gbps. We are focusing on neighbourhoods with the greatest data demands and opportunities for services that our customers cost efficiencies. find inspiring and make a difference in their lives.”

8 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Over the past five years, Rogers has delivered more opportunities for Bernard to learn and laugh with his grandkids, as they connect through Canada’s largest wireless network.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 9 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Sheldon and Chris can catch the final period and cheer on their team from anywhere.

10 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 “Our strong portfolio of assets, our strategic priorities and our great team are a strong foundation to achieve the growth that lies ahead.” Deliver innovative solutions and compelling content that our customers will love

Innovation is in our DNA. Our investments are focused Drive profitable growth on bringing the best products and services by in all the markets we serve leveraging proven technologies from across the globe. One example is Ignite TV, where we have licensed the Growth is the engine that fuels our future. Our focus capability from for the X1 IPTV platform. remains on driving renewed and renewable growth in With Ignite TV, we are reinventing the home our core businesses – Wireless, Cable, Enterprise and entertainment experience for our customers. It is a Media. At the same time, I fundamentally believe that brand new platform for the digital home, for video customer service improvement and margin expansion entertainment, for the connected home of the future. go hand in hand. In 2017, we undertook extensive efforts to test, install In 2017, we grew total revenue by 3%, adjusted and integrate X1. In 2018, we will bring this world-class operating profit by 6% and free cash flow by 2%. IPTV service to market with the most advanced We grew Wireless margins by 50 basis points and features and a robust product roadmap. We believe it Cable margins by 80 basis points. will be a game changer for our customers and the long-term success of our cable business. We see Our growth was largely driven by Wireless with service strong growth potential in Cable with our superior revenue growth of 7% and adjusted operating profit broadband product and the capabilities that will come growth of 8%. These are the best Wireless financial with IPTV and smart home offerings. results we have seen since 2009. We also gained 354,000 postpaid net additions and delivered a In Enterprise, we refocused our product portfolio on postpaid churn rate of 1.2%. These are the best a few critical innovations with a key focus on small subscriber metrics we have seen in seven years. and medium enterprises. The Canadian enterprise market is worth an estimated $22 billion and we In Cable, we grew adjusted operating profit by 2%. see meaningful opportunity to grow our share of Our financials were largely driven by the strength of the market. Overall, we are focused on delivering our Internet business. We grew Cable households for sustained, profitable growth in wireless, wireline, the second straight year in a row, representing an data centres and the Internet of Things. important, continuing inflection point given four prior years of decline. In Media, our success was driven by sports and local content. Sportsnet continued its reign, for the third In Media, overall revenue was flat but we saw revenue straight year, as Canada’s #1 specialty network and growth in our sports, television, radio and digital #1 sports media brand in the country. Locally, we businesses. In 2018, we expect growth in Media expanded CityNews to and . margins driven by higher revenue and an improved We expanded our radio footprint and now have cost structure. 55 local stations across the country. We also secured Consumer and business demand for data continues approval of the OMNI 9(1)(h) licence, and launched to grow significantly and wireless penetration rates OMNI Regional, providing Canada’s diverse continue to rise. This is bolstered by forecasted growth communities with vital programming. in GDP, record low unemployment and generally healthy macroeconomic conditions. Our strong portfolio of assets, our strategic priorities and our great team are a strong foundation to achieve the growth that lies ahead.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 11 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Develop our people and a high-performance culture

Culture is at the heart of our success and our Be a strong, socially responsible people are our most valuable asset. I truly believe leader in our communities that building the right culture drives an unassailable across Canada focus on the customer, and that, in turn, will deliver sustained growth and value creation. A critical Giving back to the communities where we live and foundation is creating an open, trusting and diverse work is an important part of who we are. Rogers workplace that is grounded in accountability and has a wonderful history of giving that started with performance. Ted and we will build on his legacy. In 2017, we streamlined our management team Last year, we invested $64 million through cash and organizational structure to drive end-to-end and in-kind donations to various charitable accountability and a relentless customer focus. organizations across Canada. We launched We continued to invest in our employees, including the Ted Rogers Scholarship Fund, awarding more tools and training along with a stronger focus 307 scholarships to youth entering their first year on inclusion and diversity. Our employee of post-secondary education. We also delivered engagement score rose to 79%. 65 grants to community organizations that Our efforts were also recognized externally. In 2017, provide innovative educational programs for youth. we were highlighted as one of Canada’s Top 100 Additionally, we launched a terrific new giving Employers for the fifth straight year, one of Canada’s campaign, Give Together Month, where Rogers Best Diversity Employers, a Top Employer for Young matched employee donations to the charity of their People and one of Canada’s Greenest Employers. choice, generating $2.2 million for our communities. In 2018, we will continue to improve the employee We expanded Connected for Success, our affordable experience with a focus on our frontline team. broadband service, to 200 community housing We will develop our people with great pride and partners making it available to 150,000 low-income passion and help them grow their careers. Canadians. Fundamentally, I want to make Rogers the In 2018, we will formally launch our Give Together best place to work in Canada. community investment program that will include company-wide volunteering for employees and their families. I fundamentally believe that when you do well in business, you have a responsibility to give back. Our community efforts are an integral part of the memorable moments we help deliver and they will grow to become a hallmark of our organization.

“Giving back to the communities where we live and work is an important part of who we are.”

12 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Our community efforts are an integral part of the memorable moments we help deliver and they will grow to become a hallmark of our organization.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 13 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 For Peggy and Tej, Saturday nights are for connecting with the kids for a special family movie.

14 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 “We remain relentlessly focused on driving the fundamentals that deliver shareholder value – growth in revenue, profit, margins and free cash flow.”

The year ahead

We enter 2018 with strong momentum and a clear plan for sustained financial growth along with strategic capital investments in our core business. Our 2018 guidance reflects continued growth in revenue and accelerated growth in both profit and free cash flow.

Full-Year 2018 Guidance 1 (in millions of dollars, except percentages) 2018 Guidance

Consolidated Guidance Revenue Increase of 3% to 5% Adjusted EBITDA Increase of 5% to 7% Capital expenditures 2,650 to 2,850 Free cash flow Increase of 3% to 5%

1 Please see 2017 Financial Report.

We remain relentlessly focused on driving the fundamentals that deliver shareholder value – growth in revenue, profit, margins and free cash flow. Ultimately, it is about delivering a strong return on investment. Operational excellence and well-timed network investments will be key to our success.

As a company, our purpose is clear: to connect our customers with the people and the memorable moments that matter most to them. With the right team, a clear purpose and vision and a strategic plan to win, we are well-positioned to capitalize on the growth opportunities ahead.

I am immensely proud of our team and what we accomplished in 2017. I would like to share a heartfelt thank you to all 25,000 team members for their incredible commitment and dedication. I would like to thank the Board for their support. And I would like to thank you, our shareholders, for your ongoing investment and confidence in Rogers.

All the best,

Joe Natale President and Chief Executive Officer Rogers Communications Inc.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 15 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Corporate governance

“Our Board is strongly committed to sound corporate governance practices. The Board’s structure, with diverse and independent directors, ensures that the interests of all shareholders are considered – an approach that has helped ensure the continuance of strong, family-founded Canadian companies. The Board composition and its governance policies also reinforce our commitment that the appropriate balance is struck between risk and reward.”

Charles Sirois Lead Director, Rogers Communications Inc.

Rogers Communications Inc.’s Board of Directors (the Board) statement of corporate governance practices, our codes is strongly committed to sound corporate governance and of conduct and ethics, full committee charters and Board continually reviews its governance practices and benchmarks member biographies – in the Corporate Governance section them against acknowledged leaders and best practices. at investors.rogers.com. At this link, you will find a summary We are a family-founded and controlled company and take of the differences between the NYSE corporate governance pride in our proactive and disciplined approach towards rules applicable to U.S.-based companies and our governance ensuring that Rogers’ governance structures and practices are practices as a non-U.S.-based issuer that is listed on the NYSE. deserving of the confidence of the public capital markets. The Audit and Risk Committee reviews the Company’s Voting control of Rogers Communications Inc. is held by a accounting policies and practices, the integrity of the trust, of which members of the Rogers family are beneficiaries. Company’s financial reporting processes and procedures This trust holds voting control of Rogers Communications Inc. and the financial statements and other relevant disclosures for the benefit of successive generations of the Rogers family. for release to shareholders and the public. The Committee also assists the Board in its oversight of the Company’s As substantial stakeholders, the Rogers family is compliance with legal and regulatory requirements relating represented on our Board and brings a long-term to financial reporting and assesses the accounting systems, commitment to oversight and value creation. At the same financial control systems and evaluates the qualifications, time, we benefit from having outside directors who are independence and work of both external and internal experienced North American business leaders. auditors. It also reviews risk management policies and The Board believes that the Company’s governance and risk associated processes to identify major risk exposures. management systems are effective and that the appropriate The Corporate Governance Committee assists and makes structures and procedures are in place. recommendations regarding corporate governance The composition of our Board and structure of its various practices and principles, the Board’s approach to director committees are outlined in the table on the following page. independence and director compensation. The Committee As well, we make available detailed information on our also leads the Board in its periodic review of the performance governance structures and practices – including our complete of the Board and its committees.

16 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Board of Directors and its Committees Chair Member

Audit Corporate Human and Risk Governance Nominating Resources Executive Finance Pension

Edward S. Rogers

Charles Sirois, cm

Bonnie R. Brooks, cm Robert K. Burgess

John H. Clappison, fcpa, fca Robert Dépatie Robert J. Gemmell

Alan D. Horn, cpa, ca

Philip B. Lind, cm John A. MacDonald Isabelle Marcoux Joe Natale

The Hon. David R. Peterson, pc, qc Loretta A. Rogers Martha L. Rogers Melinda M. Rogers

The Nominating Committee identifies prospective Rogers’ Good Governance Practices Director nominees for election by the shareholders and for appointment by the Board and assesses incumbent directors. Code of Business Formal Corporate The Committee also recommends nominees for each Independent Conduct and Governance Lead Director Whistleblower committee of the Board, including each committee’s Chair. Policy and Charters Hotline The Human Resources Committee assists the Board in monitoring, reviewing and approving compensation and Board and Annual Reviews Director Share benefit policies and practices. The Committee is responsible Committee of Board and Ownership In Camera Committee for recommending senior management compensation and Guidelines Discussions Performance for monitoring succession planning with respect to senior executives. Audit and The Executive Committee assists the Board in discharging Risk Committee Orientation Board Meetings with Program for Education its responsibilities in the intervals between meetings of the Internal and External New Directors Sessions Board, including to act in such areas as specifically designated Auditors and authorized at a preceding meeting of the Board and to consider matters concerning the Company that may arise Committee Director Material Separation Authority to from time to time. Relationship of CEO and Retain Independent Standards Chair Roles Advisors The Finance Committee reviews and reports to the Board on matters relating to the Company’s financings and general debt and equity structure. The Committee also reviews commitments and arrangements above specified thresholds.

The Pension Committee supervises the administration of For a complete description of Rogers’ corporate governance structure and practices and copies the Company’s pension plans and reviews the provisions and of our annual information circular and proxy, investment performance of the Company’s pension plans. go to investors.rogers.com

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 17 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 For detailed biographical information of the Rogers’ Senior executive officers Executive Officers, go to investors.rogers.com

1 2 3 4 5

6 7 8 9 10

1 Joe Natale 6 John Hill President and Chief Information Officer Chief Executive Officer 7 David Miller 2 Rick Brace Chief Legal & Corporate Affairs President, Media Officer and Secretary

3 Lisa Durocher 8 Dean Prevost Chief Digital Officer President, Enterprise

4 Jorge Fernandes 9 Jim Reid Chief Technology Officer Chief Human Resources Officer

5 Phil Hartling 10 Anthony Staffieri, fcpa, fca Interim President, Consumer Chief Financial Officer

18 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 For detailed biographical information of the Rogers’ Directors Directors, go to investors.rogers.com

1 2 3 4 5

6 7 8 9 10

11 12 13 14 15

1 Edward S. Rogers 6 Robert Dépatie 11 Isabelle Marcoux Chair Company Director Chair Transcontinental Inc. 2 Charles Sirois, cm 7 Robert J. Gemmell Lead Director Company Director * Joe Natale Rogers Communications Inc. President and Chief Executive Officer * Pictured on previous page Chairman 8 Alan D. Horn, cpa, ca Telesystem Ltd. President and Chief Executive Officer Rogers Telecommunications Limited 12 The Hon. David R. Peterson, pc, qc 3 Bonnie R. Brooks, cm Chairman Emeritus Cassels Brock & Blackwell LLP Company Director 9 Philip B. Lind, cm Vice Chair 13 Loretta A. Rogers 4 Robert K. Burgess Company Director Company Director 10 John A. MacDonald Company Director 14 Martha L. Rogers 5 John H. Clappison, fcpa, fca Company Director Company Director

15 Melinda M. Rogers Deputy Chair

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 19 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Priyakshi Mahanta Ted Rogers Scholarship Fund Class of 2017

20 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 We’re always striving to do what’s right for our customers, employees, and communities across Canada, whether it is through helping students reach their education goals, providing low-cost Internet to Canadians living in subsidized housing, or instilling environmental stewardship across our organization.

In 2017, we continued to make strides to ensure that our Corporate social suppliers are adhering to ethical and sustainable practices. As part of our membership in the Joint Audit Cooperation (JAC) – a group of global telecom companies that share responsibility common suppliers, we share audit results among our peers to ensure that our suppliers adhere to internationally recognized supply chain and sustainability standards along the ICT supply chain, upholding human rights and social, Over the last year, we have donated $64 million through labour and environmental standards. cash and in-kind donations to various charitable organizations and causes. Included in this is our newly Rogers offers a variety of inclusive and accessible products launched Ted Rogers Scholarship Fund, named for our and continues to focus on upholding sustainability founder, Ted Rogers, who believed that education could principles in the development and delivery of services to “remake a city, a province or country”. Through the Fund, our customers. Customer Service continues to provide a we work with nine community partners to identify scholarship specialized support centre for information related to our recipients. In 2017, we awarded 307 scholarships through accessibility offerings and we have made improvements our community partners and to the dependents of our to the quality of our website to ensure screen-reader hard-working employees. compatibility on various browser options. Additionally, we have invested in our digital customer experience to Understanding that some of the most important learning ensure that all future self-serve offerings are conceptualized happens outside of the classroom, we also awarded and constructed for inclusivity of all consumers. We also 65 grants to community organizations across the country continue to provide a flexible data-only wireless plan option that provide innovative and educational programs for youth. for people who have speech or hearing impairments.

Our employees are passionate about giving back to their We are progressing towards our environmental targets communities. In addition to offering employees one paid to reduce our greenhouse gas emissions and energy day off per year to volunteer at the charity of their choice, consumption by 25% and 10%, respectively, by 2025, we recently launched a new annual employee giving based on 2011 levels. We were once again named as one campaign, Give Together Month, where Rogers matched of Canada’s Greenest Employers by for the all employee donations to the charity of their choice, up 5th year in a row. In 2017, we continued to invest in lighting to $1,000 per employee. In 2017, we raised $2.2 million upgrades at nine of our offices in order to reduce energy for our communities through our annual giving campaign, consumption. Our Get Up & Get Green internal waste and had 1,800 employees take part in a volunteer program has allowed us to centralize waste bins and allow experience at their chosen charity. for better sorting measures, with the goal of reaching a 70% waste reduction rate. Our Connected for Success program offers access to affordable broadband Internet to 150,000 low-income Within our business, we have also invested in the employee Canadians living in community housing. Originally launched experience by delivering more training and development in 2013 in partnership with Toronto Community Housing, programs and an increased focus on inclusion and diversity. we now have 200 housing partners and 16,000 Canadian In 2017, our employee engagement score rose to 79%. households that have registered in the program. We were We were also recognized once again this year as one of the first telecom company to launch an affordable Internet Canada’s Top 100 Employers, one of Canada’s Best Diversity program in Canada. Employers, one of Canada’s Top Employers for Young People and one of Greater Toronto’s Top Employers.

For more information on Corporate Social Responsibility at Rogers, please see our website rogers.com/csr and look out for our 2017 CSR Report, which will be released in spring 2018.

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 21 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS

2017 Financial Report

23 MANAGEMENT’S DISCUSSION AND ANALYSIS 59 Managing Our Liquidity and Financial Resources 59 Sources and Uses of Cash 25 Executive Summary 62 Financial Condition 25 About Rogers 64 Financial Risk Management 25 2017 Highlights 67 Dividends and Share Information 27 Financial Highlights 68 Commitments and Contractual Obligations 68 Off-Balance Sheet Arrangements 29 Understanding Our Business 29 Products and Services 69 Governance and Risk Management 31 Competition 69 Governance at Rogers 33 Industry Trends 70 Social Responsibility 71 Income Tax and Other Government Payments 34 Our Strategy, Key Performance Drivers, and Strategic 72 Risk Management Highlights 72 Risks and Uncertainties Affecting Our Business 34 Our Strategic Priorities 78 Controls and Procedures 35 2017 Objectives 35 Key Performance Drivers and 2017 Strategic Highlights 80 Regulation In Our Industry 37 2018 Objectives 81 Wireless 37 Financial and Operating Guidance 83 Cable 85 Media 39 Capability to Deliver Results 39 Leading Networks 86 Other Information 40 Powerful Brands 86 Accounting Policies 41 Widespread Product Distribution 91 Key Performance Indicators 41 First-Class Media Content 93 Non-GAAP Measures 41 Customer Experience 95 Summary of Financial Results of Long-Term Debt 42 Engaged People Guarantor 42 Financial Strength and Flexibility 96 Five-Year Summary of Consolidated Financial Results 42 Healthy Trading Volumes and Dividends

43 2017 Financial Results 43 Summary of Consolidated Results 44 KeyChangesinFinancialResultsThisYearComparedto 2016 45 Wireless 47 Cable 49 Business Solutions 50 Media 51 Capital Expenditures 52 Review of Consolidated Performance 55 Quarterly Results 58 Overview of Financial Position

22 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 23 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT confidential and proprietary andreasonable that at we the time believeincorrect; they to and were have applied been but may prove to be subscribe; of new services; • 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 2018 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 Our conclusions,aforementioned guidance) forecasts, areamong others: and based on projections• the general following economic (including and industry• factors, growth rates; the 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, itemstransactions or other that may of business beafter considered any combinations, the or dispositions, announced date orlooking or information on monetizations, may is other made. occur which the statement containing the forward- , , refers RCI guidance anticipate , , refers to the the Company may refers to the three , and project refers to the twelve , last year expect plan refers to the three months , refers to the three months , ,thisyear could refers to the three months ended estimate the fourth quarter , the third quarter intend , the second quarter , and similar expressions, although not all forward- the first quarter believe , outlook, target looking information includes them; on our currentexpectations, assumptions, objectives and other and factors, most strategies of which and are on estimates, assume twelve months ended December 31,is 2016. All results compared commentary December 31, to 2016, as applicable, the unless otherwise indicated. equivalent periods in 2016 or as at • includes conclusions, forecasts, and projections that are based ended September 30, 2017, months ended December 31,months 2017 ended December 31, 2017, and 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,Forward-looking information: anticipations,• estimates, typically or includes words like 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 StockIn Exchange (NYSE: this RCI). MD&A, ended June 30, 2017, March 31, 2017, 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 2017. contains This MD&A should with beStatements, read in our whichInternational 2017 have Financial Reporting Audited Standards beenInternational (IFRS) Accounting as Standards prepared Consolidated issued Board (IASB). by in the Financial All dollar accordance amounts are with inAll Canadian percentage changes dollars are unless calculated otherwise usingas stated. the rounded they numbers appearincluded in for the reference; tables.MD&A. however, Charts, This they graphs, MD&A do andapproved diagrams not by is are form RCI’s currentincludes part forward-looking Board as statements of of and at assumptions. this Forward-Looking Directors See Information” March “About for (the more information. 8, Board). 2018 ThisWe, us, and MD&A our, was Rogers, Rogers Communications, MANAGEMENT’S DISCUSSION AND ANALYSIS

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

24 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 25 liable way to 169 (18) 384123 1 4 835 105 7.9% (1.4 pts) 2016 % Chg 2,146 – 1,674 2 3,449 – 3,285 8 7,916 5 3,9577,258 – 7 5,0921,481 6 23 2,3521,705 4 2 48.5% 0.8 pts 32.0% 1.1 pts 45.3% 0.5 pts 37.2% 0.8 pts 13,027 4 13,702 3 P measures and should not $ 1.62 105 $2.88 23 Years ended December 31 139 387 128 ROGERS COMMUNICATIONS INC. 6.5% 2017 2,153 1,709 3,561 3,466 8,343 3,938 7,775 5,379 1,821 2,436 1,746 1,711 49.3% 33.1% 45.8% 38.0% 13,560 14,143 $3.32 $3.54 2017 ANNUAL REPORT uding how we calculate them. Almost all of ourhighly operations skilled and and salesemployees. are diversified in Our workforce Canada. head of Wenumerous office have approximately is a offices 24,500 inoperations Toronto, across in Ontario four and Canada.Business”. reporting we segments. have We See “Understanding report Our our results of ed basic earnings per share, and free cash flow are non-GAA erms under IFRS and do not have standard meanings, so may not be a re rmation about these measures, incl margin, adjusted net income, adjust 2 2 2 3 2 1 2 compare us to other companies. See “Non-GAAP Measures” for info be considered substitutes or alternatives for GAAP measures. These are not defined t Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences. As defined. See “Key Performance Indicators”. Adjusted operating profit, adjusted operating profit Adjusted operating profit Adjusted operating profit margin Adjusted operating profit margin Business Solutions Revenue Adjusted operating profit Adjusted operating profit margin Media Revenue Adjusted operating profit Adjusted operating profit margin as a % of service revenue Cable Revenue Adjusted operating profit Free cash flow Revenue Adjusted operating profit margin Basic earnings per share Adjusted basic earnings per share Cash provided by operating activities Wireless Service revenue Adjusted operating profit (In millions of dollars, except margins and per share amounts) 3 1 2 2017 HIGHLIGHTS KEY FINANCIAL INFORMATION Rogers is amedia company leading that’s working diversified tocustomers deliver every a Canadian great day. experience communications We tocommunications are our and services Canada’s and largest one provider of ofcable Canada’s leading wireless television, providers high-speed of Internet,telephony information services technology, to and consumersMedia, and businesses. we Through Rogers aresports, engaged televised in andmedia. radio online and shopping, television magazines, broadcasting, and digital Executive Summary ABOUT ROGERS Capital expenditures Consolidated Total revenue Total service revenue Net income Adjusted net income MANAGEMENT’S DISCUSSION AND ANALYSIS

KEY PERFORMANCE INDICATORS As at or years ended December 31 2017 2016 Chg Subscriber results (000s) 1 Wireless postpaid net additions 2 354 286 68 Wireless prepaid net additions 61 111 (50) Wireless subscribers 2 10,482 10,274 208

Internet net additions 85 97 (12) Internet subscribers 2,230 2,145 85

Television net losses (80) (76) (4) Television subscribers 1,740 1,820 (80)

Phone net additions 14 410 Phone subscribers 1,108 1,094 14

Total service unit net additions 3 19 25 (6) Total service units 3 5,078 5,059 19 Additional Wireless metrics 1 Postpaid churn (monthly) 2 1.20% 1.23% (0.03 pts) Postpaid ARPA (monthly) $ 124.75 $ 117.37 $ 7.38 Blended ARPU (monthly) 2 $ 62.31 $ 60.42 $ 1.89 Ratios Capital intensity 1 17.2% 17.2% – pts Dividend payout ratio of net income 1 57.7% 118.3% (60.6 pts) Dividend payout ratio of free cash flow 1,4 56.6% 57.9% (1.3 pts) Return on assets 1 5.9% 2.9% 3.0 pts Debt leverage ratio 4 2.8 3.0 (0.2) Employee-related information Total active employees (approximate) 24,500 25,200 (700)

1 As defined. See “Key Performance Indicators”. 2 Effective October 1, 2017, and on a prospective basis, we reduced our Wireless postpaid subscriber base by 207,000 subscribers to remove a low-ARPU public services customer that is in the process of migrating to another service provider. We believe adjusting our base for a customer of this size that migrates off our network provides a more meaningful reflection of the underlying organic performance of our Wireless business. 3 Includes Internet, Television, and Phone subscribers. 4 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.

26 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 27 3.32 1.62 2.61 3.54 2.88 2.87 139 169 172 128 123 116 1,709 1,674 1,658 3,561 3,285 3,239 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT Wireless Cable Solutions Business Media BASIC EARNINGS PER SHARE ($) 2017 2016 2015 ($) ADJUSTED OPERATING PROFIT BY SEGMENT ADJUSTED OPERATING PROFIT (IN MILLIONS OF DOLLARS) 2017 2016 2015 ADJUSTED BASIC EARNINGS PER SHARE 2017 2016 2015 impairment and relatedresult charges we of recognized ourInternet last decision year Protocol as tomoving television a discontinue forward with (IPTV) developing the(Comcast) deployment our product of X1 legacy Comcast IP-based (instead, Corporation’s videoprior platform we year as equity losses are Ignite associatedand TV), with higher along the adjusted wind-down operating with of profit and , amortization lower this depreciation year. and The increaseincome was partially tax offset by“Review higher expense of Consolidated Performance” for consistent more information. with higherhigher adjusted earnings. operatingamortization, See partially profit offset by and higher income lower tax expense. depreciation and of strong Internet revenue growth, theto ongoing higher-margin product mix Internet shift services,Excluding and various the cost efficiencies. wholesale impact Internet access of service rates,would adjusted the have operating increased profit by CRTC 4% this year. decision thatas a reduced result of higherimpact Toronto Blue of Jays foreign player exchange) payrollpartially (including and the offset higher by TSC lower merchandiseand publishing costs, the costs increase in due revenue to as described the above. strategic shift • Net income increased 105% primarily as a result of the • Adjusted net income increased 23% this year as a result of HIGHER NET INCOME AND ADJUSTED NET INCOME • Cable adjusted operating profit increased 2% this year as a result • Media adjusted operating profit decreased 18% this year primarily 2,153 2,146 2,079 387 384 377 3,466 3,449 3,465 8,343 7,916 7,651 Wireless Cable Solutions Business Media REVENUE BY SEGMENT (IN MILLIONS OF DOLLARS) 2017 2016 2015 consolidated adjusted operatingexpansion of profit 80 margin basisby points. of This Wireless, increase 38.0%, with wasCable, an with primarily a an driven 80 50 basis point basis expansion to 49.3%. point expansionresult to of 45.8%, strongdescribed and flow-through above, ofassociated the partially with servicedevices. increased offset revenue subscriber growth by volumes higher and costs expenditures of service revenue growth of 7%. subscriber growth andhigher-rate a plans greater fromShare number Everything our plans. of various Overall,financial results subscribers we brands, this achieved year on including since our 2009. best increase in Internet revenue,customers due to to higher-end thesubscriber speed general base, and movement partially usage of offsetrevenue, tiers by primarily and lower due a Television topast and larger Television year Phone subscriber losses andcontinue over to the the see impactmargin an Internet of ongoing services, Phonebase shift with now pricing on in 54% plans product packages. withsecond of download mix or our We speeds of to higher residential 100Excluding compared higher- Internet megabits per the to 46% impactTelecommunications at Commission’s of the (CRTC) theOctober end decision 2016) Canadian of that (effective last Radio-televisionrates, reduced year. Cable wholesale and revenue Internet wouldInternet have access revenue increased would service have by increased 1% by this 9% this year year. and related revenue driven bysales the at strength ofconventional TSC, broadcast Sportsnet, TV increased Today’s advertising revenue,lower partially Shopping offset publishing-related by Choice revenuedigital (TSC), due media announced to last and year. the higher strategic shift to HIGHER ADJUSTED OPERATING PROFIT • Adjusted operating profit increased 6% this year, with• a Wireless adjusted operating profit increased 8% this year as a FINANCIAL HIGHLIGHTS HIGHER REVENUE • Revenue increased by 3% this year,• primarily driven Wireless by Wireless service revenue increased largely as a result• of Cable revenue increased marginally as a result of the 7% • Media revenue increased marginally as a result of higher sports- MANAGEMENT’S DISCUSSION AND ANALYSIS

SUBSTANTIAL FREE CASH FLOW SUPPORTS FINANCIAL • Our debt leverage ratio improved to 2.8 as at December 31, FLEXIBILITY 2017 from 3.0 as at December 31, 2016, driven by lower • Our substantial cash flow generation enabled us to reduce adjusted net debt and higher adjusted operating profit. outstanding debt, continue to make investments in our network, • Our overall weighted average cost of borrowings was 4.70% as and return substantial dividends to shareholders. We paid at December 31, 2017 (2016 – 4.72%) and our overall weighted $988 million in dividends in 2017. average term to maturity on our debt was 9.9 years as at • Our cash provided by operating activities was stable this year as December 31, 2017 (2016 – 10.6 years). the increase in net income was offset by an increase in income • We ended the year with approximately $2.7 billion of available taxes paid and an increased investment in non-cash working liquidity (2016 – $2.7 billion) including $2.3 billion available capital items. Free cash flow increased 2% this year to under our bank and letter of credit facilities (2016 – $2.4 billion), $1,746 million as a result of higher adjusted operating profit, and $0.4 billion (2016 – $0.25 billion) available under our partially offset by higher cash income taxes and higher capital $1.05 billion accounts receivable securitization program. expenditures.

28 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 29 2% 64% 3% 31% Wireless Wireless Cable Media Solutions Business ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT BILLION $5.4 2017 ADJUSTED OPERATING PROFIT BY SEGMENT OPERATING PROFIT BY 2017 ADJUSTED (%) Fido Roam; like Rogers Unison; PRODUCTS AND SERVICES WIRELESS Rogers is awireless Canadian services. leader Our in postpaidoffered delivering and under a prepaid the range wirelessconsumers Rogers, and of services businesses Fido, are innovative with the andand latest applications wireless chatr including: devices, services, brands,• and provide mobile and fixed high-speed• Internet access; wireless voice and enhanced• voice features; wireless home phone; • device protection; • text messaging; •e-mail; • global voice and data roaming, including Roam• Like Home bridging and landline phones with wireless phones through products • machine-to-machine solutions; and • advanced wireless solutions for businesses. CABLE Our cable network provides anhigh-speed innovative broadband Internet and access, leading digital selection televisionviewing, and of phone, online and advancedin home Ontario, New Wi-Fi Brunswick, services and on toalso the consumers provide island of services Newfoundland. to We businessesthat and aim enterprises to across meet Canada applications. the increasing needs of today’sWith critical the business forthcoming launch ofproduct, Ignite TV, we our new plan CableIgnite to Television TV reinvent will how deliverfeatures our a high-value, customers and premium experience service videoroadmap TV. with of advanced experiences, innovation leading along toFirst a on truly with connected the home a innovation service. roadmap, robust we product intend to adopt Comcast’s See “Capability to Deliver Results”extensive for more wireless information about andspectrum position. our cable networks andDuring significant the wireless year,reporting our segments Wireless,subsidiary, Cable, were Rogers andcertain Communications operated Business other Canada Solutions segment wholly-owned by Inc. was subsidiaries. operated (RCCI), ourMedia Our by Inc., and and our Media its wholly-owned subsidiaries. wholly-owned reporting subsidiary, Rogers 3% 58% 15% 24% Wireless Wireless Cable Media Solutions Business for Canadian consumers and businesses. including Internet, television, and telephony (phone) services for Canadian consumers and businesses. network and data centre assets toa support range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector, and carrier wholesale markets. including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, digital media, and publishing. BILLION $14.1 SegmentWireless PrincipalCable activities Wireless telecommunications operations Business Solutions Cable telecommunications operations, Network connectivity through our fibre Media A diversified portfolio of media properties, 2017 REVENUE BY SEGMENT (%) FOUR REPORTING SEGMENTS We report ourEach results segment and of the nature operations of in its business four are as reporting follows: segments. Understanding Our Business Rogers is amedia company. leading diversified Canadian communications and We intend to redefine our2018 reporting as segments effective a Januaryoverlap 1, result between the ofand various technological Business product evolution Solutions offeringsallocate and reporting within resources the amongst, our segments, and Cable increased asreporting the general well segments. management Effective as of,existing our January how 1, Cable we 2018, segment,Smart the Business results Home of Solutions Monitoringredefined our segment, Cable products segment. and willHome Financial our be results Monitoring related presentedCorporate to within our products items Smart a retrospectively are amend and our2018 2017 currently to account intercompany comparative for this segment redefinition. reported results eliminations. in within We will MANAGEMENT’S DISCUSSION AND ANALYSIS

new Digital Home solution. This whole-home networking solution In Sports Media and Entertainment, we own the Toronto Blue Jays, will provide customers with a simple, fast, and intuitive way to Canada’s only Major League Baseball (MLB) team, and the Rogers control and manage their connected devices. The cloud-based Centre event venue, which hosts the Toronto Blue Jays’ home platform will link to the new DOCSIS 3.1 Wi-Fi gateway devices to games, concerts, trade shows, and special events. deliver fast, reliable connectivity in the home and will allow Our NHL Agreement, which runs through the 2025-2026 NHL customers to easily add or pause devices, pair Wi-Fi extenders that season, allows us to deliver unprecedented coverage of boost signal strength, and use voice controls to see who is on the professional hockey, with more than 1,200 regular season games network, all in a safe and secure manner. per season streamed across television, , tablets, and the Internet, both through traditional streaming services as well as Internet services include: Rogers NHL LIVE. Our NHL Agreement also grants Rogers national • Internet access (including basic and unlimited usage packages), rights on those platforms to the NHL playoffs and Stanley Cup security solutions, and e-mail; Final, all NHL-related special events and non-game events (such as • access speeds of up to one gigabit per second (Gbps), covering the NHL All-Star Game and the NHL Draft), and rights to sublicense our entire Cable footprint; broadcasting rights to Groupe TVA and the Canadian Broadcasting • Rogers Ignite and Fido Internet unlimited packages, combining Corporation (CBC) and to use the brand fast and reliable speeds with the freedom of unlimited usage through a sublicense agreement. and options for self-installation; and • Rogers Smart Home Monitoring, offering services such as In Television, we operate several conventional and specialty monitoring, security, automation, energy efficiency, and smart television networks: control through a app. • Sportsnet’s four regional stations, , , and ; Television services include: • City network, which, together with affiliated stations, has • local and network TV, including starter and premium channel broadcast distribution to approximately 85% of Canadian packages along with à la carte channels; individuals; • on-demand television; • OMNI multicultural broadcast television stations, including • personal video recorders (PVRs), including Whole Home PVRs OMNI Regional broadcast television stations, which provide and a 4K PVR; multilingual newscasts nationally to all digital basic television • linear and time-shifted programming; subscribers; • digital specialty channels; • specialty channels that include FX (Canada), FXX (Canada), and • 4K television programming, including all 2017 and 2018 regular Outdoor Life Network; and season Toronto Blue Jays home games and select marquee • TSC, Canada’s only nationally televised shopping channel, which National Hockey League (NHL) and National Basketball generates a significant and growing portion of its revenue from Association (NBA) games; and online sales. • Rogers Anyplace TV, televised content delivered on In Radio, we operate 55 AM and FM radio stations in markets smartphones, tablets, and personal computers. across Canada, including popular radio brands such as 98.1 CHFI, Phone services include: 680 NEWS, Sportsnet The FAN, KiSS, JACK FM, and SONiC. • residential and small business local telephony service; and As part of our strategic change to focus on digital media, our • calling features such as voicemail, call waiting, and long distance. services and products include: • our digital sports-related assets, including Rogers NHL LIVE Enterprise services include: (formerly Rogers NHL GameCentre LIVE) and Sportsnet NOW; • voice, data networking, Internet protocol (IP), and Ethernet • many well-known consumer brands, such as Maclean’s, services over multi-service customer access devices that allow Chatelaine, Today’s Parent, and Hello! Canada; and customers to scale and add services, such as private networking, • a broad digital presence that continues the extension of content Internet, IP voice, and cloud solutions, which blend seamlessly to across new and existing platforms. grow with their business requirements; • optical wave, Internet, Ethernet, and multi-protocol label OTHER switching services, providing scalable and secure metro and We offer the Rogers Platinum MasterCard and the Fido wide area private networking that enables and interconnects MasterCard, credit cards that allow customers to earn cashback critical business applications for businesses that have one or rewards points on credit card spending. many offices, data centres, or points of presence (as well as OTHER INVESTMENTS cloud applications) across Canada; We hold interests in a number of associates and joint • simplified information technology (IT) and network technologies arrangements, some of which include: with security-embedded, cloud-based, professionally-managed • our 37.5% ownership interest in Maple Leaf Sports & solutions; and Entertainment Ltd. (MLSE), which owns the Toronto Maple Leafs, • extensive wireless and cable access networks services for primary, the Toronto Raptors, Toronto FC, the Toronto Argonauts, and bridging, and back-up connectivity. the Toronto Marlies, as well as various associated real estate holdings; and MEDIA • our 50% ownership interest in Glentel Inc. (Glentel), a large Our portfolio of Media assets reaches Canadians from coast to provider of multicarrier wireless and wireline products and coast. services with several hundred Canadian retail distribution outlets.

30 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 31 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT voice overComwave), IP other (VoIP) VoIP-onlyand service service Skype), providers and providers other (such voice (suchaccess applications as services riding of Vonage as ISPs; over and the Primus Internet and phones and wireless home phone products. and on the island of Newfoundland; and digital subscriber line (DSL) and cable(TPIA) Third-Party services Internet in Access local markets. undertakings (BDUs),satellite including TV services, and Bell, IPTV; Shaw, otherYouTube, alternative Hulu, Apple, Amazon Primechannels Video, streaming Google, their and own other content; and received directly through antennas,US and direct broadcast the satellite illegal services. reception of Brunswick, and on the island of Newfoundland; years. The outcomeSee of “Regulation In this Our auction Industry” for may more information. increase competition. • substitution of wireline for wireless products, including mobile CABLE Internet We compete with otherresidential Internet high-speed Service Providers Internet (ISPs)high-speed access that Internet services services. offer compete directly Rogers with: • and Bell Fido and ’s Internet services in• Ontario, New various Brunswick, resellers using wholesale telecommunication company A numbercompete of for different enterpriseThere players are network relatively in few andown national competitors the providers, communications that but usually Canadian each services. focusthey market on market the has geographic its have areas also where market, the wetelecommunications most compete service providers. extensive withnetwork In networks. markets infrastructure, facilities- where weproviders. In we Our compete and main own competitors with the are as non-facilities-based incumbent• follows: enterprise fibre-based Ontario – Bell, • Data Services, and – Zayo; Bell, ,• and Videotron; – Bell• Aliant and Western ; Canada and – Shaw and Telus. Television We compete with: • other Canadian multi-channel• over-the-top (OTT) video offerings broadcast through providers like Netflix, distribution • over-the-air local and regional broadcast television signals Phone We compete with: • Bell and Bell Aliant’s• wireline phone incumbent local service exchange carrier in (ILEC) Ontario, local loop New resellers and Telus, and Shaw,(Bell), including Lucky their Mobile flanker (Bell),and Koodo brands Freedom (Telus), Virgin Mobile regional Mobile players (Shaw). and (Telus), resellers. We also compete withservice various providers for dealers, primeand third-party locations retail for distribution our shelf own space. stores, with incumbent carriers,competitive landscapes could for Wireless. alter the regionalcarriers or to national providecustomers service who to roam while international in Canada. operators who have Canada (ISEDspectrum Canada) auction, expected has to take announced place in the a next one future to two 600 MHz network caters to customers seekingspeed it the provides. increased We capacity compete and withSaskTel, Bell, and Telus, Eastlink, Shaw, all Videotron, ofcompete whom operate with LTE networks. We these(HSPA) also providers and global onnetworks system high-speed for and packet mobiletechnologies, with (GSM) such providersnetwork as operators that (MVNO), Wi-Fi suchand use as Primus. “hotspots” President’s Choice alternative and Mobile wireless mobile virtual • Product, branding, and pricing – we compete nationally with Bell, • Distribution of services and devices – we compete• with Wireless other networks – consolidation amongst regional players, or • Inbound roaming – we compete with• other Spectrum major – national Innovation, Science and Economic Development WIRELESS We compete on customerservices, experience, quality network of coverage, service, sophisticationbreadth scope of of wireless of technology, positioning, and distribution, price. selection• Wireless of technology devices, – our branding extensive long-term and evolution (LTE) COMPETITION Competition inintensify, the telecommunications withconsumers industry a national, broader choice continues in regional, serviceThis to providers puts and downward plan and pressure offerings. on pricing,margins, reseller and potentially could reducing also profit players affect our subscriber churn. giving Traditional wirelineoffered telephony over and theproviders television Internet. to This services enter hasproviderscompete.Thisischangingthemixofpackagesand are the allowed market now more and non-traditional pricing that has service providers changed offer and how could affect traditional In churn levels. the media industry, thereand online continues media to consumption be by aadvertisers consumers, shift to which towards direct in digital turn moreversus drives advertising traditional dollars media. to digitalhas In and addition, increased online theincluding number as large of global more companies, competitors enter the digital market. and online media companies, MANAGEMENT’S DISCUSSION AND ANALYSIS

MEDIA TSC competes with: Television and specialty services compete for viewers and •retailstores; advertisers with: • catalogue, Internet, and direct mail retailers; • other Canadian television stations that broadcast in their local • infomercials that sell products on television; and markets, including those owned and operated by the CBC, Bell • other television channels, for channel placement, viewer Media, and ; attention, and loyalty. • other specialty channels; Our digital media and publishing products compete for readership • distant Canadian signals and US border stations, given the time- and advertisers with: shifting capability available to subscribers; • other Canadian magazines, both digital and printed; • other media, including newspapers, magazines, radio, and • foreign, mostly US, titles that sell directly into Canada, both outdoor advertising; and digital and printed; • content available on the Internet, such as web-based streaming • online information and entertainment websites, such as news services. services and streaming services; and Our radio stations compete mainly with individual stations in local • other traditional media, such as TV and radio. markets, but they also compete with: Competition in Sports Media and Entertainment includes other: • other large, national radio operators, including the CBC, Bell • televised and online sports programming; Media, Corus Entertainment, and satellite radio operator • Toronto professional teams, for attendance at Toronto Blue Jays SiriusXM; games; • broadcast and Internet radio platforms, such as iHeartRadio, • MLB teams, for Toronto Blue Jays players and fans; which combine free, on-demand music services with the • local sporting and special event venues; and availability of live radio broadcasts and podcasts; • professional sports teams, for merchandise sales revenue. • iTunes Music, Spotify, Radioplayer Canada, and comparable apps, which allow free or paid music and radio streaming directly from users’ smartphones; • other media, including newspapers, magazines, television, and outdoor advertising; and • new technologies, such as online web information services, music downloading, and portable media players.

32 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 33 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT MEDIA TRENDS Consumer demand for digitalcontent media, mobile is devices, increasing andexperienced on-demand and significant media digital products,increase such uptake, their as efforts requiringcompete. magazines, This in industry have trend digital players isfrom conventional content also to TV and causing and print advertisers publishing capabilities to to digital shift platforms. inCompetition their has order spending changed to andincreasingly traditional being media controlled assetssignificant by in scale Canada a and are small financialentrants number resources. and of Technology even competitors hasright. individuals with allowed to new become media playersSome in players their own havetraditional and become emerging moreand platforms. vertically Relationships purchasers integrated betweenaggregators of across providers have also both content emergedand viewers. and have are become competing for more bothAccess content complex. to live Global more sports important and other forattract premium acquiring advertisers content and andand/or has retaining long-term subscribers. become agreements audiences Therefore, even increasingly with ownership that content important of in ownersnetworks to has content turn are also also media experimenting become withthrough companies. online, the social, delivery and Leagues, of virtual liveare platforms, also sports teams, while growing content non-traditional in and mindshare. sports Cable and wireline companiesinclude are expanding faster their serviceRogers, broadband offerings are to Internet. increasinglyInternet Canadian offering companies, download offeringsdemanding including speeds ever-faster of with speedsonline 1 video for Gbps games, unlimited streaming and and devices. for online In their bandwidth. ever-growing media, ordercompanies number to playing of are help Consumers connected capacity facilitate shifting Data these Over are their Cable speeds, Serviceand networks fibre-to-the-home Interface cable (FTTH) Specifications technologies. and towards (DOCSIS) These 3.1 faster technologies wireline provide higher potential data speedand communication Internet and signals speeds, to allowing reachreliable consumers both more speeds quickly television in to order addressdevices. to sustain the increasing number of Internet-capable Our enterprise customers use fibre-basedto access and capture cloud computing environments. and This, combined share with thebased information rise business of in multimedia applications, anddemand. more Internet- is secure driving and exponentialEnterprises accessible growth and all in levelsinfrastructure data by of moving government toward virtual aredriving data transforming storage demand data and hosting. centre scalable This for services, is and supportive more dynamic network infrastructure. advancedCanadian network wireline functionality, companiesinvesting robust, in are next dismantling generationvoice, platforms legacy data, and and networks dataplatform. video centres and solutions As that onto combine next acompetition single generation distribution platforms will andmanufacturers. become access more begin popular, our Our to enterprise customers are usingtheir include third parties data to increaseinformation systems security security and risks. for information integrators toDevices and and address machines are becomingmore cyber more reliance interconnected and on threats there theand is Internet track and usage. and other other networks to facilitate updates and televised content is he intent of substitution (cord CABLE TRENDS Technology advancement,behaviours, and non-traditionalCable. regulatory competitors, The advancement Internet and aresubstitute consumer social media key for are areasincreasingly wireline increasingly available being influencing telephone online. used Downward asshaving) services, Television a and tier Television cancellation migration withcutting) (cord t appear toservices, such be as on AppleCRTC’s the TV, decision Netflix, rise and toadversely with Android-based affect lower companies TV increased that wholesale wholesale boxes. adoption Internet The services. Internet ofBroadcast access OTT television ratesbroadcasts, may technology and also continues high dynamicimproved to video range image colour (HDR) improve and for saturation. with higherThe resolution 4K and CRTC TV several Basic criteria Telecommunications to improvebusinesses. Services As Internet a decision access result, the forshould established CRTC Canadian believes have residents fixed access broadband and 10 subscribers to Mbps speeds upload,allowance. of and at access least to 50Our digital a Mbps cable and service download VoIPIPTV telephony and with services compete with an competitor respectively, deployments unlimited which continue data toand and increase may continue competitive to intensity negatively that impact non-facilities-based the have industry. service providers, WIRELESS TRENDS More sophisticatedmultimedia wireless and networks Internet-basedfaster and applications to receive are devices data, drivingdemand making growth and for in it wireless mobile the data easier devices,pushing services. rise and providers Consumer digital to media, build of and networksof that applications, on-demand mobile can content video, support messaging, the is and expanded other use wireless data. Wireless providers are investingwireless in data the networks, nextand such future generation 5G as technologies, of to LTE, broadband support the Licensed growing data AssistedWireless demand. Access, market 4.5G, penetrationpopulation in and is Canada expected to isthe grow next approximately at four an years, 87% per estimated International 0.8% of Data annually Corporation. over the The CRTC Wireless Code hasto two limited years consumer from wireless three termcustomers years, contracts which has completing resulted inShorter-term and a contracts greater allow number renewing less of time for contracts carriers to recoverSubscribers at subsidies. are increasingly any bringing theirexisting given own devices devices longer or time. and keeping therefore their for may wireless not enter services. into Thisbut term may contracts may negatively create impactincreased gross our churn addition from subscriber other subscriber churn, carriers.monthly opportunities This service also fees as may charged a to negatively subscribers. impact result the of Wireless providers arecustomers unique, collaborating value-added benefits with and service OTT options. servicesMobile commerce to continues to offer increaseadopt as their secure more technology devices to and facilitate platforms wireless transactions. INDUSTRY TRENDS The telecommunications industry in Canadaare and our reporting affected segments technologies, consumer by demands, economicdevelopments. conditions, various See and “Risks regulatory and overarching“Regulation Uncertainties In Affecting Our Our trends Industry” Business” forthe and more industry relating information. trends Below affecting our is to specific a reporting summary segments. of changing MANAGEMENT’S DISCUSSION AND ANALYSIS

Our Strategy, Key Performance Drivers, and Strategic Highlights As part of our overall strategy and related priorities, we set corporate objectives each year to measure progress on our long-term strategic priorities and address short-term opportunities and risks.

OUR STRATEGIC PRIORITIES Our refocused strategy builds on our many strengths, including our DELIVER INNOVATIVE SOLUTIONS AND COMPELLING unique mix of network and media assets. Our focus is clear: deliver CONTENTTHATOURCUSTOMERSWILLLOVE a best-in-class customer experience, grow the core business, and Innovation has always been a part of our DNA. We strive to deliver deliver industry-leading shareholder value. compelling products and innovative solutions to our customers that To achieve these goals, our strategic priorities are as follows: make their lives easier. We will do this by leveraging proven • Create best-in-class customer experiences by putting our technologies and remarkable innovations from across the globe, customers first in everything we do; making them more cost-effective for us. • Invest in our networks and technology to deliver leading Rogers has some of the most sought-after media assets in Canada, performance and reliability; with a deep roster of leading sports assets, top radio stations, iconic • Deliver innovative solutions and compelling content that our magazines, and award-winning television programming. Canadians customers will love; expect to be able to consume the content they want, when and • Drive profitable growth in all the markets we serve; where they want. We will continue to invest in delivering the • Develop our people and a high performance culture; and content our audiences value and want most, delivered on their • Be a strong, socially responsible leader in our communities screens of choice. across Canada. DRIVE PROFITABLE GROWTH IN ALL THE MARKETS WE CREATE BEST-IN-CLASS CUSTOMER EXPERIENCES BY SERVE PUTTING OUR CUSTOMERS FIRST IN EVERYTHING WE DO The overarching goal of our strategy is to accelerate revenue Everything starts and ends with our customer, so improving their growth in a sustainable way and translate it into strong margins, experience is core to our strategy. We obsess over our customers’ profit, free cash flow, an increasing return on assets, and returns to end-to-end service experiences by listening carefully to the voice of shareholders. Therefore, we will focus on our core growth drivers our customers and the voice of our front-line. We will continue to while developing a strong capability in cost management to focus on making things clear, simple, and fair for our customers support investments that will fuel our future. while we continue building our digital capabilities so our customers have reliable and consistent experiences across our channels. DEVELOP OUR PEOPLE AND A HIGH PERFORMANCE CULTURE INVEST IN OUR NETWORKS AND TECHNOLOGY TO Our people and our culture are the heart and soul of our success, DELIVER LEADING PERFORMANCE AND RELIABILITY and their passion for our customers and our company is truly We believe that networks are the lifeblood of our business and incredible. Our strategy is to invest more in our people through world-class performance is critical to our future. Our plan is to training and development programs and to establish clear deliver high-performing, worry-free network services with a focus on accountabilities for all employees. We are working to strengthen core performance and reliability. Our investments in our cable our employment brand and to make Rogers a top employer known network will allow us to continue to improve Cable Internet for attracting and retaining the best talent. This means fostering an performance and reliability. Accelerated investments in our wireless open, trusting, and diverse workplace grounded in accountability network will ensure we keep up with our customers’ growing data and performance. demands while accelerating our move to 4.5G and setting the stage for a smooth evolution to 5G. BE A STRONG, SOCIALLY RESPONSIBLE LEADER IN OUR COMMUNITIES ACROSS CANADA Givingbackwhereweliveandworkisanimportantpartofwhowe are. Our goal is to be a relevant and respected community leader in each region of our country. This means leveraging our strong local teams to become active and engaged volunteers in our communities and to deliver a strong, regionally empowered program.

34 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 35 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT technology investments that areenvironment. designed to migrate to a 5G infrastructure withDOCSIS additional technology enhancements. fibre This programnumber deployments will of lower and homes the passedtechnologies further per to help node, deliver will morereliable bandwidth incorporate and the customer an latest even experience, more evolve to and FTTH. will lay the foundationManitoba, to including Winnipeg,Churchill, and more. Brandon, We also PortageManitoba. expanded other La cellular services Prairie, in service andcommunities implemented across . network improvements inpopulation several and extended our overall LTEpopulation. coverage to 96% of the between July 2016 and MayIndex. 2017, according to PCMag’s Speed Foster good relationships and obtaincustomers positive feedback through from our continualservice with improvements a focus to on self-serve ourContinue customer to grow ourset forth leadership developments in to reclaim Wireless a and sound position Internet, inMaintain video and our status asCanada and the leverage that number-one status across sports our media different platforms brand in investing to support future growth Utilize ourproducts to enterprise-grade gain market share in networks the business market and introduceproud to work new for us, and to enhance employee engagement INVEST IN OUR NETWORKS AND TECHNOLOGYDELIVER TO LEADING PERFORMANCE AND RELIABILITY • Augmented sections of our existing LTE• network Initiated with 4.5G a program to upgrade our hybrid fibre-coaxial • Launched LTE-Advanced (LTE-A) service in many communities in • Expanded LTE wireless service in ; expanded LTE wireless • Extended our 700 MHz LTE network reach to 92% of• Canada’s Recognized as the fastest ISP in both Ontario and Canada Strategic PriorityCreate best-in-class customer experiences by puttingcustomers our first in everything we do 2017 Objectives Invest in our networks and technologyperformance to and deliver reliability leading Deliver innovative solutions and compelling contentcustomers that will our love Drive profitable growth in all the markets we serveDevelop our people and a high performance culture Achieve our 2017 financial targets while at Invest the in same our time employees’ futures, in part so they say they are realized our lowest annual postpaid churn rate since 2010. Fido Pulse plan customers anper billing additional cycle, hour at of no data,can extra five charge. activate times With their thisand feature, data sharing, customers worry-free. session and start streaming, searching, management objective that allows usersdata to get plan more by out of switchingdefinition their and video standard definition. streaming settings between high solution that allowstheir Canadian social media accounts. businesses to better safeguard plan to the achievement of certain customer metrics. • Attracted our highest number of• postpaid Introduced Data net Bytes additions for Fido and mobile, giving new and existing • Launched Stream Saver, part of• Launched our Social Media worry-free Security data by• Rogers, Announced a we are cloud-based tying 50% of our 2018 company-wide bonus CREATE BEST-IN-CLASS CUSTOMER EXPERIENCES BY PUTTING OUR CUSTOMERS FIRST IN EVERYTHING WE DO KEY PERFORMANCE DRIVERS AND 2017 STRATEGIC HIGHLIGHTS The following achievements displayalong the with progress them, we as discussed made above. towards meeting our refocused strategic priorities and the objectives we set 2017 OBJECTIVES For 2017, we set forth the following objectives related to our refocused strategic priorities. MANAGEMENT’S DISCUSSION AND ANALYSIS

DELIVER INNOVATIVE SOLUTIONS AND COMPELLING DEVELOP OUR PEOPLE AND A HIGH PERFORMANCE CONTENTTHATOURCUSTOMERSWILLLOVE CULTURE • For the third consecutive year, Sportsnet was ranked Canada’s • Achieved an employee engagement score of 79%. number-one sports media brand and Canada’s number-one • Recognized in November 2017, for the fifth year in a row, as one specialty network. of Canada’s Top 100 Employers for 2018, and in January 2017, • Successfully completed the third year of our exclusive 12-year for the eighth year in a row, as a Top Employer for Young People, national NHL Agreement while bringing the NHL to more by the editors of Canada’s Top 100 Employers. Canadians than ever before, with our 2016-2017 NHL season • Selected as one of Canada’s Best Diversity Employers for 2017, being our most successful NHL season to date. for the fifth year in a row, in a report released by Mediacorp Inc. • Extended, for seven additional years, our sublicensing in March 2017, in recognition of our efforts to promote diversity arrangement with CBC for English broadcasts of Hockey Night in and inclusion in the workplace. Canada and the Stanley Cup playoffs, beginning with the 2019- • Named one of Canada’s Greenest Employers for 2017, for the 2020 season. CBC will continue to broadcast nationally-televised fifth year in a row, by the editors of Canada’s Top 100 Employers regular season games on Saturday night, plus all four rounds of in April 2017. the Stanley Cup playoffs. • Named one of the 50 Best Corporate Citizens in Canada by • Achieved excellent radio ratings across Canada, including 98.1 Corporate Knights in June 2017, an award that recognizes CHFI and 680 NEWS in Toronto, where they were the city’s employers that incorporate social, economic, and ecological number-one radio and news stations, respectively, for the key benefits and costs in their normal course of business. demographic between ages 25 and 54. • Added four new 4K services to our existing lineup, allowing our BE A STRONG, SOCIALLY RESPONSIBLE LEADER IN OUR customers to watch some of the world’s biggest artists, concerts, COMMUNITIES ACROSS CANADA movies, and events in 4K, in addition to more than 100 Toronto • Invested $64 million in our communities through cash and BlueJays,NHL,andNBAgames. in-kind donations to various charitable organizations and causes. • Launched OMNI Regional across the country, a new television • Launched the Ted Rogers Scholarship Fund and awarded service providing Canada’s diverse language communities with 307 scholarships through our community partners and to access to vital news and information programming. dependents of our hard-working employees. This program also • Launched CityNews in Edmonton and Winnipeg, and included 65 grants to community organizations across the announced upcoming CityNews launches in , , country that provide innovative and educational programs for and , offering a fresh approach to local news that youth. provides viewer-based content with original stories that reflect • Released Rogers’ 2017 Transparency Report, which outlines how these communities. we share customer information in response to requests from legal authorities. We are committed to protecting our customers’ DRIVE PROFITABLE GROWTH IN ALL THE MARKETS WE privacy and fulfilling our obligation as a good corporate citizen to SERVE follow the law and contribute to public safety. • 100% achievement of our 2017 guidance on selected full-year • Launched a new annual employee giving campaign, Give metrics. See “Financial and Operating Guidance” for more Together Month, where Rogers matched employee donations to information. the charity of their choice, up to $1,000 each. In total, • Adjusted operating profit margin expansion of 80 basis points. $2.2 million was raised. This increase was primarily driven by Wireless, with a 50 basis • Expanded Connected for Success, a program offering access to point expansion, and Cable, with an 80 basis point expansion. affordable, high-speed Internet to 150,000 low-income • Achieved our best annual Wireless service revenue growth and Canadian households through 200 subsidized housing partners adjusted operating profit growth since 2009. across our cable footprint.

36 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 37 of our leaders and teams; ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT Improve our end-to-endcritical customer end-to-end experiencecapabilities; by simplifying processes; improving frontlinetools and apps tools; investing to improve and our customers’ in experiences deliveringDeliver improved online multi-channel network performanceimproving and the system performance stability andand by cable reliability networks of both ourDeliver wireless solutions thatsmooth will launch of grow Ignitecontent our TV solutions and and core compelling the content business delivery of through other a innovative investing to support futuremanagement and growth margin and improvement driving a focus on cost strengthening ourpersonal employment and brand; career development getting behind the improving the employee experience,team; especially and for evolving our our frontline incentiveculture plans to drive a “customer first” Develop a betterthrough local the launch presence of our inprogram; Give Together our Community the Investment keyprogram regional delivery and markets plan; of andCanadians the a expansion of strong, Internet service regionally for all empowered 2018 FULL-YEAR CONSOLIDATED GUIDANCE For the full-yearadjusted 2018, we EBITDA expect tocapital steady drive growth expenditures. higher in In freeflexibility revenue 2018, cash to and we flow, maintaindebt, our despite expect and to network higher continue to to advantages, return have cash to to shareholders. theEffective further financial reduce January 1,adjusted 2018, the earningsamortization (adjusted Company EBITDA) before as will thepurpose key commence of measure interest, assessing of using performance profit for fordecisions the each tax, about segment the and to allocationintroduce depreciation, make of adjusted resources. EBITDA and Asfinancial as such, reports a we commencing new plan Januaryreplace non-GAAP our to 1, measure existing 2018. adjusted in operating ThisWe our profit measure non-GAAP will measure. believeconsolidated adjusted profitability.operating EBITDA profit The and better adjustedinclude EBITDA difference stock-based is reflects compensation that expense. adjusted betweenour We segment EBITDA also decision-making will believe adjusted processes and that through will the not use bemeasure will of significantly change affected adjusted ourdetailed reconciliations, EBITDA. current please see definition “Non-GAAP Additionally, Measures”. of use free cash of flow. this For ✓ ✓ ✓ ✓ 2017 Actual Achievement 5,379 5.6% 2,436 n/m 1,746 2.4% 14,143 3.2% are non-GAAP measures and should not 2017 2,450 Ranges 5% to 6% 2% to 4% 3% to 5% Guidance 2016 5,092 Increase of 2,352 2,350 to 1,705 Increase of Actual 2 1 3 2 Strategic PriorityCreate best-in-class customer experiences by puttingcustomers our first in everything we do 2018 Objectives Invest in our networks and technologyperformance to and deliver reliability leading Deliver innovative solutions and compelling contentcustomers that will our love Drive profitable growth in all the markets we serveDevelop our people and a high performance culture Achieve our 2018 financial targets Make while Rogers at one the of same the best time places to work in Canada by Be a strong, socially responsible leaderCanada in our communities across Includes additions to property, plantbut and does equipment not net include of expenditures proceeds for spectrum on licences. disposition, Adjusted operating profit and free cash flow The table outlines guidance rangesmetrics for provided selected in full-year our January 2017 26, consolidatedon 2017 financial October earnings 19, release 2017. and Guidance subsequently ranges updated increases presented over as 2016 percentages actual reflect results. percentage be considered substitutes or alternativesterms for under GAAP IFRS measures. and These doto are not compare have not us standard defined to other meanings, companies. sothese See may measures, “Non-GAAP including not Measures” how for be we information a calculate about reliable them. way Capital expenditures Free cash flow 3 2 Adjusted operating profit n/m – not meaningful 1 Revenue 13,702 Increase of (In millions of dollars, except percentages) The followingpreviously provided table and our actual outlines resultsselected and full-year achievements 2017 guidance for financial the metrics. ranges that we had Consolidated Guidance We provide consolidated annual guidanceapproved by ranges the for Board. selected financial metrics on2017 ACHIEVEMENTS a AGAINST consolidated GUIDANCE basis consistent with the annual plans FINANCIAL AND OPERATING GUIDANCE 2018 OBJECTIVES MANAGEMENT’S DISCUSSION AND ANALYSIS

2018 Guidance Ranges course of the year would only be made to the consolidated based on a comparable basis guidance ranges that appear above. (In millions of dollars, except 2017 prior to the adoption of percentages) Actual IFRS 15 1 Key underlying assumptions Consolidated Guidance Our 2018 guidance ranges above are based on many assumptions Revenue 14,143 Increase of 3% to 5% including, but not limited to, the following material assumptions for Adjusted EBITDA 2 5,318 Increase of 5% to 7% the full-year 2018: Capital expenditures 3 2,436 2,650 to 2,850 • continued intense competition in all segments in which we Free cash flow 2 1,685 Increase of 3% to 5% operate, consistent with our experience during the full-year 2017; 1 Guidance ranges presented as percentages reflect percentage increases over full- year 2017 results. 2018 amounts for purposes of assessing our performance against • a substantial portion of our US dollar-denominated expenditures guidance will be calculated consistently with revenue recognition accounting policies for 2018 is hedged at an average exchange rate of $1.30/US$; prior to adopting IFRS 15, Revenue from contracts with customers. See “Accounting • key interest rates remain relatively stable throughout 2018; Policies” for more information. • no significant additional legal or regulatory developments, shifts 2 Effective January 1, 2018, free cash flow will be calculated using adjusted EBITDA as a result of our adoption of this profit measure instead of adjusted operating profit. Free in economic conditions, or macro changes in the competitive cash flow presented above reflects this change. The difference between adjusted environment affecting our business activities. We note that EBITDA and adjusted operating profit is that adjusted EBITDA will include stock- regulatory decisions expected during 2018 could materially alter based compensation expense. Adjusted EBITDA and free cash flow are non-GAAP underlying assumptions around our 2018 Wireless, Cable, and/ measures and should not be considered substitutes or alternatives for GAAP or Media results in the current and future years, the impacts of 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 which are currently unknown and not factored into our guidance; “Non-GAAP Measures” for information about these measures, including how we • Wireless customers continue to adopt, and upgrade to, higher- calculate them. value smartphones at similar rates in 2018 compared to 2017 3 Includes additions to property, plant and equipment net of proceeds on disposition, and a similar proportion of customers remain on term contracts; but does not include expenditures for spectrum licences. • overall wireless market penetration in Canada grows in 2018 at a The above table outlines guidance ranges for selected full-year similar rate as in 2017; 2018 consolidated financial metrics. These ranges take into • our relative market share in Wireless and Cable is not negatively consideration our current outlook and our 2017 results and are not impacted by changing competitive dynamics; expected to be impacted by the adoption of IFRS 15 on January 1, • continued subscriber growth in Wireless and Cable Internet; a 2018. The purpose of the financial outlook is to assist investors, decline in subscribers; and a relatively stable shareholders, and others in understanding certain financial metrics Phone subscriber base; relating to expected 2018 financial results for evaluating the • Ignite TV launches in 2018; performance of our business. This information may not be • in Media, continued growth in sports and declines in certain appropriate for other purposes. Information about our guidance, traditional media businesses; and including the various assumptions underlying it, is forward-looking • with respect to the increase in capital expenditures: and should be read in conjunction with “About Forward-Looking • we continue to invest appropriately to ensure we have Information”, “Risks and Uncertainties Affecting Our Business”, and competitive wireless and cable networks through (i) building a the related disclosure and information about various economic, 4.5G to 5G wireless network and (ii) upgrading our hybrid competitive, and regulatory assumptions, factors, and risks that may fibre-coaxial network to lower the number of homes passed cause our actual future financial and operating results to differ from per node, utilize the latest technologies, and deliver an even what we currently expect. more reliable customer experience; and • we continue to make expenditures related to the launch of We provide annual guidance ranges on a consolidated full-year Ignite TV in 2018. basis that are consistent with annual full-year Board-approved plans. Any updates to our full-year financial guidance over the

38 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 39 ROGERS COMMUNICATIONS INC. 4G / 4.5G LTE subscribers. LTE subscribers. 2G GSM, 3.5G HSPA+, and 4GLTE / subscribers. 4.5G 4G / 4.5G LTE subscribers. 4G / 4.5G LTE subscribers. Mobile and fixed wireless subscribers. 3.5G / 4G HSPA+, 4G LTE subscribers. 3.5G / 4G HSPA+, 4G LTE subscribers. 3.5G / 4G LTE subscribers. 2017 ANNUAL REPORT markets; and and operational costs,carriers, and greater the spectral efficiency. ability to aggregate more radio functionality. will increase ourmultiple frequencies 5G-related in trialsrequired 2018. to successfully across launch A a key 5G number• network, including: of applications refarming spectrum investments currently and used• will for 2G densifying be and our 3G wireless to network LTE; with macro and small• cells in purchasing key 5G-ready radio network equipment with lower unit Significant spectrum position Our wireless servicesspectrum are holdings supported inranges. by both As our high-band partmaking significant and of significant capital low-band wireless our investments in frequency network spectrum• to: strategy, support we the rapidly expect growing• usage to of support wireless the continue data launch services; of• a 5G-capable introduce network; and new innovative network-enabled features and with Bell MTS,; which covers 98% of the population across with , that coversnorthwestern Ontario; the and combined basewith of Quebecor customers (Videotron) in toprovince provide of Quebec LTE and services . across the Quebec, 50 MHz in southernNorthwest Ontario, Territories, and and Nunavut. 40 MHz in the , Ontario, an additional 1020 MHz MHz in in the the rest Greater of Toronto Canada. Area, and key population areas in Quebec, Ontario, and British Columbia. which Rogers holds awhich 50% 20 MHz interest. is Inukshukeastern Canada, usable) holds including of 30 certain FDD population MHzand centres 2.3 (of eastern in GHz Ontario, southern spectrum southernNew primarily Quebec, in and Brunswick, smallerInukshuk holdings in Manitoba, also holdsMHz) Alberta, in 3.5 most GHz andThe of current TDD the fixed British licences wireless majorheld LTE population 2.3 (between national Columbia. GHz centres network and 50-175 3.5 utilizes across GHz the spectrum Canada. jointly bands. Three network-sharing arrangementsnetwork to capabilities: enhance coverage and • the Canadian population. • • 700 MHz Type of spectrum2.3 GHz/3.5 GHz range Inukshuk Kind Wireless of Partnership venture is a joint operation with BCE Inc. in Who it supports 850 MHz1900 MHzAWS 1700/2100 MHz 25 MHz across Canada. 40 MHz 60 in MHz British2500 MHz in Columbia all and Alberta, areas 30 of MHz Canada in except southern 40 MHz in northern 40 MHz FDD across Canada and an additional 20 MHz TDD in 2G GSM, 3.5G HSPA+, and 4G / 4.5G 850 MHz, 1900 MHz AWS spectrum, Type of spectrum700 MHz Rogers licence 24 MHz in Canada’s major geographic markets, covering 92% of Who it supports international carriers in moregrowing than number of 200 LTE destinations, roaming including operators; and a wireless operators that operate in urban and rural parts of Canada. 2017 on our LTE network alone; We are continuously enhancingour our wireless IP services. Advances service in infrastructureways technology for have in transformed all which the ouravailable customers interact to andTechnology use has them also the changed variety the way in of businesses operate. tools We their are augmenting our personal existing LTEinvestments network that and with are 4.5G designed technology to professional migrate to a 5G lives. environment. We • is supported by voice and data• includes roaming agreements network with sharing arrangements with three regional WIRELESS Rogers has onenetworks in of Canada, which: the• most was the extensive first LTE• and high-speed network reached advanced in Canada; 96% wireless of the Canadian population as at December 31, Capability to Deliver Results LEADING NETWORKS We also have access to additional spectrum through the following network sharing agreements: Our spectrum holdings as at December 31, 2017 include: MANAGEMENT’S DISCUSSION AND ANALYSIS

CABLE This track record of investing in our networks and demonstrating Our expansive fibre and hybrid fibre-coaxial infrastructure delivers the capability to deploy best-in-class service is one of our key services to consumers and businesses in Ontario, New Brunswick, strategies for ensuring that we stay competitive with other service and on the island of Newfoundland. We also operate a providers that provide Internet service into homes and businesses transcontinental, facilities-based fibre-optic network that extends over copper facilities. By the end of 2016, 100% of our cable over 48,000 route kilometres and is used to service enterprise network had been upgraded to DOCSIS CCAP technology customers, including government and other telecommunications supporting DOCSIS 3.1 and Ignite Gigabit Internet. service providers. We also use our extensive fibre network for In 2018, we will begin evolving our cable network to a passive HFC backhaul for wireless cell site traffic. In Canada, the network extends architecture with nodes serving small groups of customers. This coast-to-coast and includes local and regional fibre, transmission architecture will provide the foundation for subsequent electronics and systems, hubs, points of presence, and IP routing generations of DOCSIS, including Remote PHY and Full Duplex and switching infrastructure. The network also extends to the US DOCSIS, both of which will continue to expand the capabilities and from Vancouver south to Seattle; from the Manitoba-Minnesota capacity of our cable HFC network. Over time, this next generation border through Minneapolis, Milwaukee, and Chicago; from architecture is expected to support synchronous upload and Toronto through Buffalo; and from Montreal through Albany to download speeds of up to 10 gigabits per second. New York City and Ashburn, allowing us to connect Canada’s largest markets, while also reaching key US markets for the We continue to invest in and improve our cable network; for exchange of data and voice traffic. example, with technology to support gigabit Internet speeds, Ignite TV, Rogers 4K TV, our 4K PVR set-top box, and a significant The network is structured to optimize performance and reliability commitment to live broadcasting in 4K, including all regular season and to allow for the simultaneous delivery of video, voice, and Toronto Blue Jays home games for 2018 and numerous NHL and Internet over a single platform. It is generally constructed in rings NBA games. that interconnect with distribution hubs, providing redundancy to minimize disruptions that can result from fibre cuts and other Voice-over-cable telephony services are currently provided over a events. dedicated DOCSIS network. Our offerings ensure a high quality of service by including geographic redundancy as well as network and Homes and commercial buildings are connected to our network customer premise backup powering. Our phone service includes a through hybrid fibre-coaxial (HFC) nodes or FTTH. We connect the rich set of features, such as TV Call Display, three-way calling, and HFCnodetothenetworkusingfibreopticcableandthehometo advanced voicemail features that allow customers to be notified of, the node using coaxial cable or fibre. Using 860 MHz and 750 MHz and listen to, their home voicemail on their wireless phone or over of shared cable spectrum in Ontario and Atlantic Canada, the Internet. respectively, we deliver video, voice, and broadband services to our customers. Hybrid fibre-coaxial node segmentation increases We own and operate some of the most advanced networks and bandwidth per home passed by reducing the number of data centres in Canada. We leverage our national fibre, cable, and customers that share the cable spectrum. wireless networks and data centre infrastructure to enable businesses to deliver greater value to their customers through We continually upgrade the network to improve capacity, enhance proactive network monitoring and problem resolution with performance and reliability, reduce operating costs, and introduce enterprise-level reliability, security, and performance. Our primary new features and functionality. Our investments are focused on: and secondary Network Operation Centres proactively monitor • further segmenting our network nodes to reduce the number of Rogers’ networks to mitigate the risk of service interruptions and homes sharing spectrum in each node; allow for rapid responses to any outages. • improving video signal compression by moving to more advanced video protocols; Our data centres provide guaranteed uptime and expertise in • improving channel and on-demand capacity through switched collocation, cloud, and managed services solutions. We own and digital video; and operate 16 state-of-the-art, highly reliable, certified data centres • increasing the FTTH footprint by connecting more homes across Canada, including: directly to fibre. • Canada’s first Tier III Design and Construction certified multi- tenant facility, opened in 2012 in Toronto; In early 2016, we completed the transition of customers receiving • Alberta’s first Tier III certified data centre, opened in 2014; and television signals over our analog broadcast channels to all-digital • a third Tier III certified data centre in Ottawa, opened in 2015. services, freeing up significant cable network capacity for additional features and services. This migration strengthened the customer POWERFUL BRANDS experience and, in addition to allowing us to reclaim significant amounts of network capacity, enabled us to reduce future network The Rogers brand has strong national recognition through our: operating and maintenance costs. • established networks; • extensive distribution; Broadband Internet service is provided using a DOCSIS CCAP • recognizable media content and programming; 3.0/3.1 platform, which combines multiple radio frequency • advertising; channels onto one access point at the customer premise, • event sponsorships, including the Rogers Cup; delivering exceptional performance. The bandwidth of our Internet • community investment, including the Ted Rogers Scholarship service offerings has increased 55-fold in the last 10 years as we Fund; and bring new technologies to market when they become available. • naming rights to some of Canada’s landmark buildings.

40 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 41 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT complete price plan changes and hardware upgrades online; accounts online ortheir through the Fido loginremember MyAccount multiple credentials, app login using credentials eliminatingeasier to and access; the making self-service need to products attechnician visiting their their residence; and convenience, withouton the their phone need whenor a service for technician call; will arrive a for an installation take calls in four languages,and including Cantonese; English, French, Mandarin, automatically identifies our customerssecurity by and protecting their customers from voice, potential increasing fraud; • the ability for• Fido simplified and login, Rogers allowing Fido consumer customers customers to log to in to their • the ability for customers to• install Rogers EnRoute, their a tool Internet that gives customers and the ability TV to track online chat through our websites; both ofcustomize their which data usage in allow real-time through MyRogers; Wireless customershour of data, to five times per billing manage cycle, at no and extra charge; understand their monthly charges; and allowing Canadians tohome use when traveling their to included wireless destinations. plan like they do at 2014, which makesdistributor of Rogers World theprogramming Wrestling in Canada; Entertainment’s exclusive and (WWE) wholesaler flagship and a Blue Jays through our ownership of the team. Rogers NHLexclusive LIVE interviews and that analysis,content; and includes original video-on-demand enhanced camera angles, festivities and outdoor viewing partiesCanada to over the 24 2017-2018 communities NHL across season; brought to Canada for the first time on Rogers digital cable; Properties andin-progress games MLB and highlights within Canada Advanced through 2021; Media to show live and • exclusive broadcasting and distribution rights of the Toronto CUSTOMER EXPERIENCE We are committedexperience possible. To to do this, providing wemake have it invested our in easier several customers and areasus, to more such with convenient as: for the customers• to best interact contact with centres located• throughout Canada; an innovative Integrated Voice Response (IVR) system that• can voice authentication technology across all of our call centres that • self-serve options, including: • customer care available over Facebook Messenger,• Twitter, and Family Data Manager, a data manager tool, and Data Top• Ups, Fido Data Bytes, which grant Fido Pulse• customers an a additional simple mobile bill, making it easier• for Roam customers to Like read Home and and Fido Roam, worry-free wireless roaming • GamePlus, an innovative and interactive experience within • Rogers Hometown Hockey Tour, which brings hockey-themed • the MLB Network, a• 24-hour an network 8-year, dedicated multi-platform to broadcast rights baseball, agreement with MLB • a 10-year, multi-platform agreement that commenced in August through theunprecedented 2025-2026 coverage season, ofacross television, that smartphones, professional tablets, and the allows hockey Internet; in us Canada action to on any screen; deliver agents; and and e-commerce sites; well asownership Wireless interest in Glentel; Wave and TBooth Wireless through our (Canada) and FXX (Canada), OMNI, and City; Flare, and Hello! Canada; FAN, KiSS, JACK FM, and SONiC; teams owned by MLSE,Toronto Raptors, such Toronto FC as and the the Toronto Argonauts; Toronto Maple Leafs,through the theunprecedented 2025-2026 coverage of professional hockey season, in Canada; and that allows us to deliver FIRST-CLASS MEDIA CONTENT We deliver highlyfollowing sought-after initiatives: sports content• enhanced an by exclusive the 12-year agreement with the NHL,• which Rogers runs NHL LIVE, an online OTT destination for enhancing NHL • major retail chains. Our salesenterprise, team public andextensive sector, third-party network of and retailers third-partyintegrators, channel consultants, sell carrier distributors local deals service services wholesalesales with providers, relationships. to and IT This markets. other diversecoverage the indirect approach An gives and greater allows breadth forservices. of strong sales growth for next generation CABLE We distribute our residential cable productsincluding: using various channels, • company-owned Rogers and Fido• retail stores; customer self-serve using rogers.com• and fido.ca; our call centres, outbound telemarketing, and door-to-door • customer self-serve using rogers.com, fido.ca, chatrwireless.com, • our call centres; and • outbound telemarketing. WIDESPREAD PRODUCT DISTRIBUTION WIRELESS We distributechannels, our including: wireless• products an extensive independent nationally dealer• network; company-owned using Rogers, Fido, and• various chatr retail major stores; retail chains and• convenience stores; other distribution channels, such as WOW! mobile boutique, as We also own or utilizeincluding: some of Canada’s most• recognized brands, the wireless brands of• Rogers, Fido, 25 and chatr; TV stations and specialty• channels, publications, including Sportsnet, including FX Maclean’s, Chatelaine,• Today’s 55 Parent, radio stations, including 98.1 CHFI, 680 NEWS,• Sportsnet The major league sports teams, including the Toronto Blue Jays, and • an exclusive 12-year agreement with• the TSC, NHL, a premium online which and TV shopping runs retailer. MANAGEMENT’S DISCUSSION AND ANALYSIS

ENGAGED PEOPLE Similar to 2017, we anticipate generating positive free cash flow in 2018. We expect that we will have sufficient capital resources to For our team of approximately 24,500 employees, we strive to satisfy our cash funding requirements in 2018, including the create a great workplace, focusing on all aspects of the employee funding of dividends on our common shares, repayment of experience, which include: maturing long-term debt, and other financing activities, investing • engaging employees and building high-performing teams activities, and other requirements. This takes into account our through initiatives including engagement surveys and leadership opening bank advance balance, cash provided by operating development programs; activities, the amount available under our $3.2 billion bank credit • aiming to attract and retain top talent through effective training facility, our accounts receivable securitization program, our US CP and development, performance-driven employee recognition program, and funds available to us from the issuance of other bank, programs, and career progression programs for front-line publicly issued, or private placement debt from time to time. As at employees; December 31, 2017, there were no significant restrictions on the • maintaining our commitment to diversity and inclusion; and flow of funds between RCI and its subsidiary companies. • providing a safe, collaborative, and agile workplace that provides We believe we can satisfy foreseeable additional funding employees the tools and training to be successful. requirements by issuing additional debt financing, which, depending on market conditions, could include restructuring our FINANCIAL STRENGTH AND FLEXIBILITY existing bank credit and letter of credit facilities, entering into new bank credit facilities, issuing public or private long-term or short- We have an investment-grade balance sheet, conservative debt term debt, amending the terms of our accounts receivable leverage, and substantial available liquidity of $2,650 million as at securitization or US CP programs, or issuing equity. We may also December 31, 2017. Our capital resources consist primarily of cash opportunistically refinance a portion of existing debt depending on provided by operating activities, available lines of credit, funds market conditions and other factors. There is no assurance, available under our accounts receivable securitization and US however, that these financing initiatives will or can be done as they dollar-denominated commercial paper (US CP) programs, and become necessary. issuances of long-term debt. We also own approximately $1,465 million of marketable equity securities in publicly-traded companies as at December 31, 2017. HEALTHY TRADING VOLUMES AND The following information is forward-looking and should be read in DIVIDENDS conjunction with “About Forward-Looking Information”, “Financial Our RCI Class B Non-Voting common shares (Class B Non-Voting and Operating Guidance”, “Risks and Uncertainties Affecting Our Shares) actively trade on the TSX and NYSE with a combined Business”, and our other disclosures about various economic, average daily trading volume of approximately 1.2 million shares in competitive, and regulatory assumptions, factors, and risks that 2017. In addition, our RCI Class A Voting common shares (Class A could cause our actual future financial and operating results to Shares) trade on the TSX. Dividends are the same, at the discretion differ from those currently expected. of the Board, on both classes of shares. In 2017, each share paid an annualized dividend of $1.92.

42 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 43 384 1 123169 4 (18) 835 105 y not be a reliable (193) 7 (159) (1) 2016 % Chg 7,916 5 3,449 – 2,146 – 5,092 6 1,481 23 1,705 2 3,285 8 1,674 2 2,352 4 3,957 – 37.2% 0.8 pts 13,702 3 13,027 4 28 23 23 $2.88 $2.86 $ 1.62$ 1.62 105 104 are non-GAAP measures and 387 128 139 (206) (158) 2017 8,343 3,466 2,153 5,379 1,821 1,746 3,561 1,709 2,436 3,938 1,711 Years ended December 31 38.0% 14,143 13,560 $3.54 $3.52 $3.32 $3.31 ROGERS COMMUNICATIONS INC. w we calculate them. per share, and free cash flow 2017 ANNUAL REPORT under IFRS and do not have standard meanings, so ma competitors. Many of theseshould are not not defined be terms considered underany alternative IFRS other and measures financial measure toPerformance of net performance income Indicators” under or IFRS.information. and See “Key “Non-GAAP Measures” for more ed basic and diluted earnings about these measures, including ho for GAAP measures. These are not defined terms margin, adjusted net income, adjust 2 2 2 2 2 2 1 2 Wireless Cable Business Solutions Media Corporate items and intercompany eliminations Wireless Cable Business Solutions Media Corporate items and intercompany eliminations way to compare us to other companies. See “Non-GAAP Measures” for information should not be considered substitutes or alternatives As defined. See “Key Performance Indicators”. Adjusted operating profit, adjusted operating profit Revenue Total service revenue Adjusted operating profit Revenue (In millions of dollars, except margins and per share amounts) 1 2 SUMMARY OF CONSOLIDATED RESULTS Adjusted operating profit margin Adjusted basic earnings per share 2017 Financial Results See “Accounting Policies” in thisAudited MD&A and the notes Consolidated toaccounting our policies 2017 and Financial estimatesdiscussion. as they Statements relate to for theWe following use important performance several against our key strategy and performance the results of indicators our peers to and measure our Adjusted diluted earnings per share Capital expenditures Cash provided by operating activities Free cash flow Net income Basic earnings per share Diluted earnings per share Adjusted net income Adjusted operating profit MANAGEMENT’S DISCUSSION AND ANALYSIS

KEY CHANGES IN FINANCIAL RESULTS THIS Cable adjusted operating profit increased this year as a result of higher revenue as described above and lower operating expenses. YEAR COMPARED TO 2016 Business Solutions adjusted operating profit increased this year as a REVENUE result of revenue growth as described above and lower operating Wireless service revenue increased this year primarily as a result of a expenses. larger subscriber base and a greater number of subscribers on Media adjusted operating profit decreased this year primarily as a higher-rate plans from our various brands, which includes the result of higher Toronto Blue Jays player payroll (including the continued adoption of higher-blended-ARPU-generating Rogers impact of foreign exchange) and higher TSC merchandise costs, Share Everything plans. partially offset by lower publishing costs due to the strategic shift Cable revenue increased marginally this year as the increase in and the increase in revenue as described above. Internet revenue, due to the general movement of our Internet customers to higher-end speed and usage tiers and a larger NET INCOME AND ADJUSTED NET INCOME subscriber base for our Internet products was partially offset by Net income increased this year primarily as a result of losses Television subscriber losses over the past year. incurred last year related to the discontinuation of the development Business Solutions revenue increased this year primarily as a result of our legacy IPTV product and the wind-down of shomi, higher of the growth in on-net next generation services, including our data adjusted operating profit, and lower depreciation and amortization centre businesses, which more than offset the continued reduction expense, partially offset by higher income tax expense. in lower margin, off-net legacy revenue. Adjusted net income increased this year as a result of higher Media revenue increased marginally as a result of higher sports- adjusted operating profit and lower depreciation and amortization related revenue driven by the strength of Sportsnet, increased sales expense, partially offset by higher income tax expense. at TSC, and higher conventional broadcast TV advertising revenue, partially offset by lower publishing-related revenue due to the strategic shift to digital media announced last year.

ADJUSTED OPERATING PROFIT Wireless adjusted operating profit increased this year primarily as a result of the strong flow-through of service revenue growth as described above, partially offset by higher costs associated with increased subscriber volumes and costs of devices.

44 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 45 1.20 1.23 1.27 286 68 761 21 111 (50) 2016 Chg 1,521 78 8,557 147 1,717 61 1.23% (0.03 pts) 3.32% 0.16 pts $ 60.42 $ 1.89 $117.37 $ 7.38 Years ended December 31 61 354 782 2017 1,599 8,704 1,778 1.20% 3.48% $ 62.31 $124.75 ting to another service provider. We 1 ROGERS COMMUNICATIONS INC. 2, 3 3 2 2017 ANNUAL REPORT 2 Gross additions Net additions Total postpaid subscribers Churn (monthly) Churn (monthly) ARPA (monthly) Gross additions Net additions Total prepaid subscribers WIRELESS POSTPAID CHURN (MONTHLY) (%) 2017 2016 2015 of subscribers onwhich higher-rate includes plans theplans, from customer-friendly and our Rogers increased data Share various usage.generate Everything Our brands, higher higher-rate ARPU, plans typically their may data allow usage users acrosssome multiple to devices, of pool and our and provideRoam,RogersNHLLIVE,FidoDataBytes,andSpotify. manage other access to offerings, such as Roam Like Home, Fido Subscriber counts, subscriberperformance churn, indicators. See postpaid “Key ARPA, Performance Indicators”. Effective and October blended ARPU 1,postpaid are 2017, key and subscriber on baseservices a by customer prospective that 207,000 is basis, in subscribersbelieve we the adjusting to process reduced our of remove our base migra provides a for Wireless a a low-ARPU more customer meaningful public of reflectionWireless of this business. the size underlying that organic migrates performanceAs of off at our end our of network period. REVENUE Our revenue dependsrevenue per on user, the the revenue fromother size the equipment sale revenue. of of wireless our devices, and subscriber base, the Service revenue Service revenue includesservices from: revenue derived• from postpaid voice and prepaid and monthly•datausage; fees; data •airtime; •longdistancecharges; • essential services charges; • inbound and outbound roaming• charges; and certain fees. The 7% increase in service revenue• this year larger was postpaid a and result prepaid of: • subscriber bases; higher and blended ARPU, primarily as a result of the increased mix WIRELESS SUBSCRIBER RESULTS (In thousands, except churn, postpaid ARPA, and blended ARPU) Postpaid 1 2 3 Prepaid Blended ARPU (monthly) 354 286 106 1,606 1,778 1,717 7,775 7,258 6,902 702 15 658 (14) 2016 % Chg 1,947 4 2,684 2 4,631 3 3,285 8 7,258 7 7,916 5 45.3% 0.5 pts 8,704 8,557 8,271 806 568 2017 2,033 2,749 4,782 3,561 7,775 8,343 45.8% Years ended December 31 1 Postpaid Prepaid Other operating expenses Service revenue Equipment revenue Cost of equipment (IN THOUSANDS) 2017 2016 2015 WIRELESS SUBSCRIBER BREAKDOWN 2017 2016 2015 WIRELESS POSTPAID SUBSCRIBER NET ADDITIONS (IN THOUSANDS) (IN MILLIONS OF DOLLARS) 2017 2016 2015 WIRELESS SERVICE REVENUE Canadian wireless market. revenue Includes the cost of equipment revenue and direct channel subsidies. Capital expenditures (In millions of dollars, except margins) 1 WIRELESS FINANCIAL RESULTS As at December 31, 2017, we• had: approximately 10.5 million subscribers;• and approximately 33% subscriber and revenue share of the WIRELESS ROGERS IS CANADA’S LARGEST PROVIDER OF WIRELESS COMMUNICATIONS SERVICES Operating expenses Adjusted operating profit Adjusted operating profit margin as a % of service Revenue Revenue Operating expenses MANAGEMENT’S DISCUSSION AND ANALYSIS

The 6% increase in postpaid ARPA was primarily a result of the The 14% decrease in revenue from equipment revenue this year continued adoption of Rogers Share Everything plans and the was a result of: increasing number of lines per customer account. Customers on • larger average investments in higher-blended-ARPU-generating Share Everything plans have increasingly utilized the advantages of customers who purchased devices under term contracts; and premium offerings and access their shareable plans with multiple • a 3% decrease in device upgrades by existing subscribers; devices on the same account. partially offset by • higher gross additions.

WIRELESS BLENDED ARPU (MONTHLY) ($) OPERATING EXPENSES We assess operating expenses in two categories: 2017 62.31 • the cost of wireless devices and equipment; and

2016 60.42 • all other expenses involved in day-to-day operations, to service existing subscriber relationships, and to attract new subscribers. 2015 59.71 The 4% increase in the cost of equipment this year was a result of: • a continued shift in the product mix of device sales towards higher-cost smartphones as we continue to invest in higher- SHARE EVERYTHING SUBSCRIBERS AS A PERCENTAGE OF blended-ARPU-generating customers; and OUR ROGERS-BRANDED POSTPAID SUBSCRIBER BASE (%) • higher gross additions; partially offset by • the decrease in device upgrades by existing subscribers, as 2017 63 discussed above. 2016 58 The 2% increase in other operating expenses this year was a result

2015 51 of: • higher service costs, as a result of our growing subscriber bases; and The 3% increase in blended ARPU this year was primarily a result of • higher commissions, as a result of our higher postpaid gross increased service revenue as discussed above. additions; partially offset by We believe the increases in gross and net additions to our postpaid • various cost efficiencies and productivity initiatives. subscriber base and the lower postpaid churn this year were results of our strategic focus on enhancing the customer experience by ADJUSTED OPERATING PROFIT providing higher-value offerings, such as our Share Everything The 8% increase in adjusted operating profit this year was a result plans, improving our customer service, and continually increasing of the strong flow-through of service revenue growth, partially offset the quality of our network. by higher operating expenses, as discussed above.

ROAM LIKE HOME AND FIDO ROAM SUBSCRIBERS WIRELESS ADJUSTED OPERATING PROFIT (IN THOUSANDS) (IN MILLIONS OF DOLLARS)

2017 5,854 2017 3,561

2016 5,459 2016 3,285

2015 2,252 2015 3,239

Equipment revenue Equipment revenue (net of subsidies) includes revenue from sales LTE COVERAGE AS A PERCENTAGE OF THE CANADIAN POPULATION to: (%)

• independent dealers, agents, and retailers; and 2017 96 • subscribers through fulfillment by Wireless’ customer service groups, websites, telesales, and corporate stores. 2016 95

2015 93

46 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 47 1,090 1,108 1,094 410 97 (12) 25 (6) (76) (4) 2016 Chg 2,145 85 1,820 (80) 1,0944,241 14 66 5,059 19 1,896 1,740 1,820 43% 47% 85 19 14 (80) 10% 2017 2,048 2,230 2,145 1,108 4,307 5,078 2,230 1,740 Years ended December 31 Internet Internet Television Phone ROGERS COMMUNICATIONS INC. 1 2 2 Phone 2 2 2 3 2017 ANNUAL REPORT Television BILLION $3.5 pay-per-view service fees andand video-on-demand service fees; Internet Total Internet subscribers Net additions Net additions Total service units Net losses Net additions Total Television subscribers Total Phone subscribers CABLE SUBSCRIBER BREAKDOWN (IN THOUSANDS) 2017 2016 2015 2017 CABLE SERVICE REVENUE MIX 2017 CABLE (%) residential, smallsubscribers; and business, and wholesale Internet access • basic cable service fees; • tier service fees; • access fees for use• of channel premium capacity by and third parties; and specialty service subscription fees, including Subscriber count is a key performanceAs indicator. at See end “Key of Performance period. Indicators”. Includes Internet, Television, and Phone subscribers. (In thousands) Internet 1 2 3 REVENUE Internet revenue includes: • monthly subscription and additional use service revenue from • modem rental fees. Television revenue includes: • digital and analog cable services – comprised of: • rentals of digital cable set-top boxes. CABLE SUBSCRIBER RESULTS Television Phone Cable homes passed Total service units 445 353 386 3,466 3,449 3,465 6– 3 (33) 386 (9) 1,669 1,501 1,562 2016 % Chg 1,495 7 1,562 (4) 3,443 – 3,449 – 1,772 (1) 1,775 (1) 1,674 2 1,085 8 48.5% 0.8 pts 6 2 1,343 1,606 1,495 353 2017 1,606 1,501 3,460 3,466 1,755 1,757 1,709 1,172 49.3% Years ended December 31 Phone Television Internet Internet Television Phone Service revenue Equipment revenue Cost of equipment Other operating expenses CABLE SERVICE REVENUE BREAKDOWN (IN MILLIONS OF DOLLARS) 2017 2016 2015 2017 2016 2015 CABLE REVENUE (IN MILLIONS OF DOLLARS) approximately 30% of Canadian cable television subscribers; Ontario, New Brunswick, and on the island of Newfoundland. (In millions of dollars, except margins) CABLE FINANCIAL RESULTS As at December 31, 2017, we• had: approximately 2.2 million high-speed• Internet subscribers; approximately 1.7 million Television subscribers – • approximately 1.1 million Phone• subscribers; and a network passing approximately 4.3 million homes in CABLE ONE OF CANADA’S LEADING PROVIDERS OFSPEED HIGH- INTERNET, CABLE TELEVISION, AND PHONE SERVICES Revenue Revenue Operating expenses Operating expenses Adjusted operating profit Adjusted operating profit margin Capital expenditures MANAGEMENT’S DISCUSSION AND ANALYSIS

Phone revenue includes revenue from residential and small Television revenue business local telephony service from: The 4% decrease in Television revenue this year was a result of: • monthly service fees; • the decline in Television subscribers over the past year; partially • calling features, such as voicemail, call waiting, and caller ID; and offset by • long distance calling. • the impact of Television service pricing changes, net of promotional pricing. The marginal increase in revenue this year was a result of: • general movement of customers to higher speed and usage Phone revenue tiers of our Ignite broadband Internet offerings; and The 9% decrease in Phone revenue this year was a result of the • a larger Internet subscriber base; partially offset by impact of pricing. • Television subscriber losses over the past year; and Equipment revenue • lower wholesale revenue as a result of a CRTC decision that Equipment revenue includes revenue generated from the sale of reduced wholesale Internet access service rates. Excluding the digital cable set-top boxes and Internet modems. Equipment impact of the CRTC decision, Cable revenue would have revenue this year was in line with 2016. increased by 1% this year.

Internet revenue OPERATING EXPENSES The 7% increase in Internet revenue this year was a result of: We assess Cable operating expenses in three categories: • general movement of customers to higher speed and usage • the cost of programming; tiers of our Ignite broadband Internet offerings; • the cost of equipment revenue (cable digital set-top boxes and • a larger Internet subscriber base, with 54% of our residential Internet modem equipment); and Internet base on plans of 100 megabits per second or higher • all other expenses involved in day-to-day operations, to service (2016 – 46%); and and retain existing subscriber relationships, and to attract new • the impact of changes in Internet service pricing; partially offset subscribers. by • more promotional pricing provided to subscribers; and The 1% decrease in operating expenses this year was a result of: • lower wholesale revenue as a result of a CRTC decision that • various cost efficiency and productivity initiatives; and reduced wholesale Internet access service rates. Excluding this • relative shifts in product mix to higher-margin Internet from impact, Internet revenue would have increased by 9% this year. conventional Television broadcasting; partially offset by • higher costs related to increased revenue, as discussed above.

INTERNET SUBSCRIBERS (IN THOUSANDS) ADJUSTED OPERATING PROFIT The 2% increase in adjusted operating profit this year was a result 2017 2,230 of the revenue and expense changes described above. Excluding the impact of the CRTC decision that reduced wholesale Internet 2016 2,145 access service rates, adjusted operating profit would have 2015 2,048 increased by 4% this year.

CABLE ADJUSTED OPERATING PROFIT >100 Mbps SUBSCRIBERS AS A PERCENTAGE OF (IN MILLIONS OF DOLLARS) OUR RESIDENTIAL INTERNET BASE (%) 2017 1,709

2017 54 2016 1,674

2016 46 2015 1,658

2015 28

48 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 49 128 123 116 85% 15% Next Generation Generation Next Legacy ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT BILLION $0.4 BUSINESS SOLUTIONS ADJUSTED OPERATING PROFIT (IN MILLIONS OF DOLLARS) 2017 2016 2015 2017 BUSINESS SOLUTIONS SERVICE REVENUE MIX SOLUTIONS SERVICE REVENUE 2017 BUSINESS (%) and near-net IP-based services revenue; partially offset by trend we expect togeneration continue on-net as we andmove focus near-net to the more opportunities advanced business and on and cost-effectivesolutions. IP-based next customers services and OPERATING EXPENSES The 1% decrease inlower operating service expenses costs thison-net year and as near was IP-based we offerings. a result continue of to growADJUSTED our OPERATING PROFIT higher-margin The 4% increase inof adjusted the operating revenue profit and expense this changes year discussed above. was a result We intend to redefine our2018 reporting such that, segments the effective results JanuarySolutions of 1, segment, our and existing our Cable segment, Smartbe Business Home Monitoring presented products will retrospectively within amend our a2018 2017 to comparative redefined segment accountBusiness”. Cable results for in this segment. redefinition. We See “Understanding will Our REVENUE The 1% increase in service revenue• this year the was a continued result growth of: of higher margin, next• generation the on-net continued decline in the legacy and off-net voice business, a Next generation services, which include ourrepresented data 85% centre (2016 operations, –year. 81%) of total service revenue during the 58 71 85 617 322 307 288 71 (18) 307 5 146 (10) 378384 1 261 1 123 (1) 4 2016 % Chg 32.0% 1.1 pts 7 58 322 131 380 259 128 387 2017 33.1% Years ended December 31 Next GenerationNext Legacy Next generation Legacy Service revenue Equipment revenue BUSINESS SOLUTIONS SERVICE REVENUE BREAKDOWN (IN MILLIONS OF DOLLARS) 2017 2016 2015 buildings. (In millions of dollars, except margins) Business Solutions generates revenue from thecommunications provision of services wireline andenterprises the sale and oftelecommunications public related carriers equipment sectorSolutions to on also at aadvanced provides retail services, including voice wholesale rates datanetworking, centres, and and basis. professional cloud and services. computing, data fibre Business to communicationsNext other and generation revenuespeed, is high-reliability data generated and voice by communications,Rogers’ the provided on advanced provision IP, ofthrough Ethernet, high- and Rogers’ cloudcentre extensive platforms, infrastructure. and communications mainly networkLegacy and revenue data is generatedlong distance mainly voice by services and circuit-switched legacytime-division local data services, and provided multiplexing over platforms, (TDM) with client andparty access network elements and often prior tariffed ILEC delivered services. generation using leased data third- BUSINESS SOLUTIONS FINANCIAL RESULTS As at December 31, 2017, Business• Solutions: sold to enterprises and• public sector; sold to other carriers• on a had wholesale 10,000 basis; on-net fibre• connected buildings; had and fibre passing close to an additional 25,500 near-net BUSINESS SOLUTIONS LEADING-EDGE WIRELINE TELECOM AND DATA COMMUNICATIONS SERVICES TO CANADIAN BUSINESSES Revenue Capital expenditures Operating expenses Adjusted operating profit Adjusted operating profit margin Revenue MANAGEMENT’S DISCUSSION AND ANALYSIS

MEDIA The marginal increase in revenue this year was a result of: • higher net sports-related revenue, driven by the continued success of Sportsnet and a distribution in the first quarter to the DIVERSIFIED CANADIAN MEDIA COMPANY Toronto Blue Jays from Major League Baseball, partially offset by We have a broad portfolio of media properties, which most the 2016 impacts of the Toronto Blue Jays postseason and the significantly includes: World Cup of Hockey; • sports media and entertainment, such as Sportsnet and the • higher TSC merchandise sales; and • higher conventional broadcast TV advertising revenue; partially Toronto Blue Jays; offset by • our exclusive national 12-year NHL Agreement; • lower publishing-related revenue due to the strategic shift to • category-leading television and radio broadcasting digital media announced last year. properties; • multi-platform televised and online shopping; • digital media; and SPORTS REVENUE AS A PERCENTAGE OF MEDIA REVENUE •publishing. (%) 2017 57 MEDIA FINANCIAL RESULTS 2016 56 Years ended December 31 2015 52 (In millions of dollars, except margins) 2017 2016 % Chg

Revenue 2,153 2,146 – Operating expenses 2,014 1,977 2 OPERATING EXPENSES We assess Media operating expenses by: Adjusted operating profit 139 169 (18) • the cost of broadcast content, including sports programming Adjusted operating profit margin 6.5% 7.9% (1.4 pts) and production; Capital expenditures 83 62 34 • Toronto Blue Jays player payroll; • the cost of retail products sold; and REVENUE • all other expenses involved in day-to-day operations. Media revenue is earned from: The 2% increase in operating expenses this year was a result of: • advertising sales across its television, radio, digital media • higher Toronto Blue Jays player payroll (including the impact of properties, and publishing; foreign exchange); and • subscriptions to televised and OTT products; • higher TSC merchandise costs; partially offset by • ticket sales, fund redistribution and other distributions from MLB, • lower publishing costs due to the strategic shift described above. and concession sales; • retail product sales; and ADJUSTED OPERATING PROFIT • circulation of published products. The 18% decrease in adjusted operating profit this year was a result of the revenue and expense changes described above. MEDIA REVENUE (IN MILLIONS OF DOLLARS) MEDIA ADJUSTED OPERATING PROFIT 2017 2,153 (IN MILLIONS OF DOLLARS)

2016 2,146 2017 139

2015 2,079 2016 169

2015 172

2017 MEDIA REVENUE MIX (%)

Sports 57%

Broadcasting 23% $2.2 BILLION

The Shopping Channel 15% Publishing 5%

50 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 51 2,436 2,352 2,440 6% 10% 33% 3% 48% Cable Cable Wireless Corporate Solutions Business Media ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT BILLION $2.4 CAPITAL EXPENDITURES DOLLARS) (IN MILLIONS OF 2017 2016 2015 BREAKDOWN 2017 CAPITAL EXDENDITURES (%) CAPITAL INTENSITY Capital intensity was stable thisexpenditures year as as discussed a above, result offset by of the the increase higher in capital revenue. BUSINESS SOLUTIONS The decrease in capital expenditureswas in a Business result Solutions of this higher investments year in network infrastructure in 2016. MEDIA The increase in capital expendituresinvestments this in year our was broadcast athis result infrastructure of year, and higher partially the offset Rogersin by Centre 2016. greater investments in digital platforms CORPORATE The decrease in capitalresult expenditures of in higher investments Corporate in this informationimprovements at technology year our and was various premise offices a in 2016. PROCEEDS ON DISPOSITION We sold certain real estatein 2017. assets for total proceeds of $74 million CABLE The increase in capitalhigher expenditures in investments Cable in thisforthcoming network year was infrastructure, Ignite a partially result TV,platform, of related and higher which to customer premise our usespartially equipment additions offset Comcast’s in by 2017, X1product costs in IP-based related 2016. to video coaxial This development infrastructure year, of with we ourDOCSIS additional began legacy fibre upgrading IPTV technology deploymentsenhancements our will and hybrid lower enhancements. the further fibre- numberincorporate of the homes These passed latest perand technologies node an and deployments to even more help reliable customer deliver and experience. more bandwidth –n/m 62 34 702146 15 (10) 357 (11) 17.2% – pts 2016 % Chg 2,352 4 1,085 8 2,352 7 83 (74) Years ended December 31 806 131 318 17.2% 2017 2,436 1,172 2,510 1 2 Wireless Business Solutions Cable Media Corporate disposition Includes additions to property, plantbut and does equipment not net include of expenditures proceeds forAs spectrum on defined. licences. disposition, See “Key Performance Indicators”. Capital intensity (In millions of dollars, except capital intensity) WIRELESS The increase inresult capital of expenditures investments incontinue made Wireless to this delivering upgrade yearcustomers. We our worry-free, was are wireless augmenting a our reliable networktechnology existing investments LTE to network that performance with are 4.5G alsoenvironment. for designed to migrate This our toinfrastructure a 5G year, andspectrum licence made acquired we this year. investments began toIn 2017, upgrading we activate acquired anot the spectrum our included licence in for the AWS-1 $184 tableFinancial radio million, above. Resources”. See which “Managing is Our Liquidity and 1 2 CAPITAL EXPENDITURES Capital expendituresproperty, include plant costs andtelecommunications equipment associated business and with placinginvestments, requires it including acquiring extensive into investmentexpansion and service. in of The continual new capacity and technologiesrelated to geographical and the reach. acquisition the The ofcapital expenditures spectrum expenditures licences and are do notcash not included factor flow in into or theFinancial capital calculation of intensity. free See Resources”,“Non-GAAP “Managing Measures” for Our more information. Liquidity “Key and Capital expenditures Performance are significant andour have Indicators”, a cash material impactplanning, flows, on funding, and and managing therefore them. ourCapital management expenditures before teams relatedcapital changes represent to focus capital non-cash assets working on this to which measure we tookequipment best title. in We reflects believe comparing a between periods. our given cost period of and is property, a plant simpler and measure for Capital expenditures Capital expenditures before proceeds on Proceeds on disposition Capital expenditures MANAGEMENT’S DISCUSSION AND ANALYSIS

REVIEW OF CONSOLIDATED PERFORMANCE We paid $107 million in 2017 (2016 – $69 million) to holders of stock options, RSUs, and DSUs upon exercise. This section discusses our net income and other expenses that do notformpartofthesegmentdiscussionsabove. DEPRECIATION AND AMORTIZATION Years ended December 31 Years ended December 31 (In millions of dollars) 2017 2016 % Chg (In millions of dollars) 2017 2016 % Chg Adjusted operating profit 1 5,379 5,092 6 Depreciation 2,087 2,183 (4) Deduct (add): Amortization 55 93 (41) Stock-based compensation 61 61 – Depreciation and amortization 2,142 2,276 (6) Total depreciation and amortization 2,142 2,276 (6) Gain on disposition of property, plant and equipment (49) –n/mDepreciation and amortization decreased this year primarily as a Restructuring, acquisition and result of certain assets becoming fully amortized. other 152 644 (76) Finance costs 746 761 (2) RESTRUCTURING, ACQUISITION AND OTHER Other (income) expense (19) 191 (110) This year, we incurred $152 million (2016 – $644 million) in Income tax expense 635 324 96 restructuring, acquisition and other expenses. These expenses in 2017 primarily consisted of severance costs associated with the Net income 1,711 835 105 targeted restructuring of our employee base and legal fees 1 Adjusted operating profit is a non-GAAP measure and should not be considered a pertaining to class action lawsuits. substitute or alternative for GAAP measures. It 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 In 2016, these costs were primarily associated with the $484 million other companies. See “Non-GAAP Measures” for information about this measure, asset impairment and onerous contract charges related to a including how we calculate it. change in strategic direction such that we discontinued the internal development of our legacy IPTV product in lieu of a forthcoming ADJUSTED OPERATING PROFIT IPTV product being developed in tandem with Comcast, which was See “Key Changes in Financial Results This Year Compared to classified as impairment of assets and related onerous contract 2016” for a discussion of the increase in adjusted operating profit charges in our 2016 financial statements and reclassified in 2017 to this year. be included in restructuring, acquisition and other expenses. The other restructuring costs primarily consisted of severance costs STOCK-BASED COMPENSATION associated with the targeted restructuring of our employee base Our stock-based compensation, which includes stock options (with and costs related to the wind-down of and changes to certain stock appreciation rights), restricted share units (RSUs), and businesses. deferred share units (DSUs), is generally determined by: • the vesting of stock options and share units; and FINANCE COSTS • changes in the market price of Class B Non-Voting Shares; Years ended December 31 offset by • the impact of certain derivative instruments to hedge a portion of (In millions of dollars) 2017 2016 % Chg the stock price appreciation risk for our stock-based Interest on borrowings 1 740 758 (2) compensation program. See “Financial Risk Management” for Interest on post-employment information about equity derivatives. benefits liability 12 933 Years ended December 31 (Gain) loss on foreign exchange (107) 13 n/m Change in fair value of derivative (In millions of dollars) 2017 2016 instruments 99 (16) n/m Impact of vesting 61 70 Capitalized interest (18) (18) – Impact of change in price 74 24 Other 20 15 33 Equity derivatives, net of interest Total finance costs 746 761 (2) receipt (74) (33) 1 Interest on borrowings includes interest on short-term borrowings and on long-term Total stock-based compensation 61 61 debt.

Stock-based compensation was stable in 2017 (2016 – $61 million) Interest on borrowings as the change in market price of our Class B Non-Voting Shares Interest on borrowings decreased this year as a result of a lower was offset by the change in value of our equity derivatives. amount of debt outstanding compared to 2016. See “Managing We had a liability of $223 million as at December 31, 2017 (2016 – Our Liquidity and Financial Resources” for more information about $189 million) related to stock-based compensation recorded at its our debt and related finance costs. fair value, including stock options, RSUs, and DSUs.

52 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 53 1,711 835 1,342 40 (98) 761 (2) 534 25 835 105 2016 % Chg 2016 % Chg 5,0922,276 6 (6) 1,481 23 $1.62$1.62 105 104 $2.88 23 $2.86 23 1 746 669 2017 1,711 2017 5,379 2,142 1,821 $3.32 $3.31 $3.54 $3.52 Years ended December 31 Years ended December 31 e, and adjusted basic and diluted 1 ROGERS COMMUNICATIONS INC. 1 1 3 1 2 2017 ANNUAL REPORT Other expense Depreciation and amortization Finance costs Income tax expense NET INCOME (IN MILLIONS OF DOLLARS) 2017 2016 2015 earnings per sharesubstitutes are or non-GAAP alternatives for measuresIFRS, GAAP and and do measures. not should These haveus are standard not meanings, to not so be defined may other not considered termsmeasures, companies. be including under how as a See we reliable calculate way “Non-GAAP them. to Measures” compare for information about these Adjusted operating profit, adjusted net incom Other expense for 2017 excludes apertaining $20 million to recovery on the the$11 reversal million of wind-down a net provision loss of onon divestitures the pertaining shomi. wind-down of to our investments Other shomi andIncome joint a venture. tax expense $140 expense excludes million for the loss for $36 2016 the million year recovery ended excludes (2016 December – 31,items. $213 an 2017 million Income related recovery) to tax the expense incomeexpense) also tax for impact excludes for the the adjusted revaluation $2 oftax million deferred rate tax expense changes. balances (2016 as – a $3 result million of legislative income Adjusted net income Basic earnings per share Diluted earnings per share Adjusted diluted earnings per share Deduct (add): Adjusted basic earnings per share 1 2 3 NET INCOME Net income was 105% higherlosses than incurred last year last primarilydevelopment as of year a result our related of shomi, legacy to higher IPTV product adjusted theand and operating discontinuation the amortization profit, of wind-down expense, andexpense. of the lower partially depreciation offset See byCompared to “Key higher 2016” for income more Changes information. tax in Financial Results This Year ADJUSTED NET INCOME Adjusted net income was 23%as higher a compared to result 2016, of primarily and higher adjusted amortization, operating profit, andhigher lower income lower tax depreciation expense. other expense, partially offset by (In millions of dollars, except peramounts) share Net income (In millions of dollars, except per share amounts) Adjusted operating profit – 3 5 (3) (7) 18 324 295 308 2016 1,159 26.6% 28.0% – 2 7 1 9 (10) 475 635 626 2017 2,346 27.1% 26.7% Years ended December 31 tax change available-for-sale investments compensation losses Income tax adjustment, legislative Non-deductible loss on Non-taxable portion of capital gain Other items Non-deductible stock-based Non-deductible portion of equity expense resulting from: Below is a summary ofcomputed the difference by between income applying taxbefore expense the income statutory tax expense income andthe the tax year. actual rate income tax to expense income for INCOME TAX EXPENSE The increase in other income$140 this million year loss was on primarilyAdditionally, the a in wind-down result 2017 of of we shomi recognized the recognizedprovision a pertaining in recovery to 2016. shomi on of the $20 reversal million. of a OTHER (INCOME) EXPENSE Gain on foreign exchange During 2017, all ofdebentures our US were dollar-denominatedexchange senior hedged gains notes recognized and for inUS 2017 CP were accounting primarily programfacility related purposes. borrowings borrowings, to for our and Foreign whichnot US the designated associated dollar-denominated debt as credit derivativesshort-term hedges were nature for accounting ofrecognized purposes the due in borrowings. todenominated credit Foreign the 2016 facility borrowings. exchange were losses See also “Managing Our related Liquidityinformation about and our to debt Financial and related Resources” finance our costs. for more US dollar- Statutory income tax rate (In millions of dollars, except tax rates) Cash income taxes paid Total income tax expense Effectiveincometaxrate Our effective income28.0% tax for rate 2016. The this effectivethan year income the was tax statutory rate 27.1% tax forstock-based compared 2017 rate compensation was to and primarily higher non-deductible ason losses a recognized certain result of ofportion our non-deductible of capital investments, gains partially on the offset sale of by certainCash real the income estate assets. taxes non-taxable paidthe increased impact this that year the primarily 2015our as acquisition 2016 a installment of payments. result of had on reducing Income before income tax expense Computed income tax expense Increase (decrease) in income tax MANAGEMENT’S DISCUSSION AND ANALYSIS

Adjusted operating profit ADJUSTED NET INCOME (IN MILLIONS OF DOLLARS) Consolidated adjusted operating profit increased in 2016 to $5,092 million, reflecting increases in Wireless, Cable and Business 2017 1,821 Solutions, partially offset by a decrease in Media. Wireless adjusted

2016 1,481 operating profit increased 1% as a result of the continued adoption of higher-rate service plans, partially offset by higher service costs 2015 1,479 associated with increased volumes and costs of devices. Cable adjusted operating profit increased by 1% in 2016 as a result of lower service and programming costs, and various cost efficiency EMPLOYEES and productivity initiatives, partially offset by increased advertising Employee salaries and benefits represent a material portion of our related to our Ignite Internet and 4K TV offerings. The increase in expenses. As at December 31, 2017, we had approximately 24,500 Business Solutions was a result of continued growth in the higher- employees (2016 – 25,200) across all of our operating groups, margin on-net, next generation business improvements, partially including shared services and the corporate office. Total salaries offset by continued declines in the legacy, off-net business. Media and benefits for full-time and part-time employees in 2017 were adjusted operating profit decreased primarily as a result of the $2,120 million (2016 – $2,073 million). The increase was primarily a increase in sports-related and digital media costs, partially offset by result of higher Toronto Blue Jays player salaries and higher higher sports-related revenue driven by the strength of Sportsnet pension expenses. and the success of the Toronto Blue Jays.

2016 FULL YEAR RESULTS COMPARED TO 2015 Net income and adjusted net income Revenue Net income decreased to $835 million in 2016 from $1,342 million Consolidated revenue increased by 2% in 2016, reflecting revenue in 2015 primarily as a result of the impairment and related charges growth of 3% in Wireless, 3% in Media and 2% in Business we recognized on our legacy IPTV product as a result of our Solutions, while Cable revenue decreased marginally. Wireless decision to discontinue developing this product and develop a revenue increased as a result of the continued adoption of Rogers long-term relationship with Comcast and deploy their X1 IP-based Share Everything plans. Cable revenue decreased marginally as the video platform, along with higher restructuring, acquisition and increase in Internet revenue from a larger subscriber base and other costs and higher equity losses associated with the wind-down subscriber movement to higher-end speed and usage tiers was of shomi. more than offset by the decrease in Television subscribers and the Adjusted net income increased marginally to $1,481 million in impact of Phone pricing packages. Business Solutions revenue 2016 from $1,479 million in 2015 as a result of a higher adjusted increased primarily as a result of the growth in on-net next operating profit partially offset by higher other expense and higher generation services, including our data centre businesses, which income tax expense. more than offset the continued reduction in lower-margin, off-net legacy revenue. Media revenue increased as a result of higher sports-related revenue, driven by the success of Sportsnet and the Toronto Blue Jays, partially offset by continued softness in publishing and radio advertising.

54 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 55 tbeconsideredas compare us to other 2016 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT ree cash flow are non-GAAP measures and should no 2017 – – – – 11 – 50 – (39) –4) – –––– – –––(49)– (20) – 140 – 140 – – –4) – –––– ––(49)– 2––– 3 –––3 3 20 (31) (11) 191 (4) 220 9 (34) 14 15 19 13 61 16 18 15 12 99 97 96 95 384 96 95 97 96 31 59 34 28 644 518 55 27 44 3239 33 65 32 63 31 (28) 123 169 30 49 31 79 31 90 31 (49) 14 15 19 13 61 16 18 15 12 31 59 34 28 644 518 55 27 44 uding how we calculate them. (53) (40) (59) (54) (193) (52) (38) (58) (45) (11) (18) (1) (6) (213) (143) (56) (9) (5) (40) (39) (37) (42) (159) (47) (40) (35) (37) Q4 Q3 Q2 Q1 Full Year Q4 Q3 Q2 Q1 526 516 637 474 2,146 550 533 615 448 419 467 531 294 835 (9) 220 394 230 841 658 451 486 2,352 604 549 647 552 871 870 870 855 3,449 858 865 870 856 455 523 514 329244 1,481 538 382 626 427 338 427 1,705 245 392 598 495 220 419 467 531 294 835 (9) 220 394 230 449 440 428 392 1,674 435 431 415 393 531 531 535 545 2,276 555 575 572 574 860 964 924 813 3,285 792 884 846 763 158 188 182 107 324 (5) 109 141 79 184 183 189577 190 655 713 761 401 188 1,159 188 (14) 189 329 196 535 309 1,142 1,377 823 596 3,957 1,053 1,185 1,121 598 3,632 3,581 3,592 3,338 13,702 3,510 3,492 3,455 3,245 2,189 2,138 2,048 1,968 7,916 2,058 2,037 1,931 1,890 1,340 1,463 1,410 1,166 5,092 1,259 1,385 1,347 1,101 3,430 3,450 3,466 3,214 13,027 3,306 3,328 3,308 3,085 $ 0.81$ $ 0.81 0.91 $ $ 0.91 1.03 $ $ 1.03 0.57 $ 0.57 $ 1.62 $ ($ 1.62 0.02) $ ($ 0.43 0.04) $ $ 0.43 0.77 $ $ 0.76 0.45 $ 0.44 $ 0.88$ $ 0.88 1.02 $ $ 1.01 1.00 $ $ 1.00 0.64 $ 0.64 $ 2.88 $ $ 2.86 0.74 $ $ 0.74 0.83 $ $ 0.83 0.83 $ $ 0.83 0.48 $ 0.47 – 2 61 61 (20) (49) (36) (49) (19) 152 387 128 139 152 746 635 (206) (158) 3,938 2,153 1,711 2,436 8,343 3,466 1,821 1,746 5,379 1,711 1,709 2,142 3,561 2,346 14,143 13,560 $3.31 $3.32 $3.52 $3.54 Full Year ed basic and diluted earnings per share, and f information about these measures, incl : 2 2 2 1 2 equipment investments equipment Corporate items and intercompany eliminations Restructuring, acquisition and other Stock-based compensation Media Business Solutions Gain on disposition of property, plant and (Recovery) loss on wind-down of shomi Net loss (gain) on divestitures pertaining to Income tax impact of above items Income tax adjustment, legislative tax change Diluted Basic Business Solutions Media Corporate items and intercompany eliminations Diluted Basic Wireless Cable Gain on disposition of property, plant and Cable Stock-based compensation Depreciation and amortization Wireless Restructuring, acquisition and other Finance costs Other (income) loss Income tax expense (recovery) (recovery) substitutes or alternatives for GAAP measures.companies. These See are “Non-GAAP not Measures” for defined terms under IFRS, and do not have standard meanings, so may not be a reliable way to As defined. See “Key Performance Indicators”. Adjusted operating profit, adjusted net income, adjust Free cash flow Add (deduct): Cash provided by operating activities Total service revenue Total revenue Adjusted net income Adjusted earnings per share Net income (loss) Earnings (loss) per share: Adjusted operating profit Capital expenditures 1 2 (In millions of dollars, except per share amounts) QUARTERLY CONSOLIDATED FINANCIAL SUMMARY QUARTERLY RESULTS Below is a summary of our quarterly consolidated financial results and key performance indicators for 2017 and 2016. Revenue Deduct (add): Adjusted operating profit (loss) Net income (loss) Net income (loss) before income tax expense MANAGEMENT’S DISCUSSION AND ANALYSIS

FOURTH QUARTER 2017 RESULTS • higher roaming revenue as a result of customers increasingly Results commentary in “Fourth Quarter 2017 Results” compares utilizing our Roam Like Home and Fido Roam services; partially the fourth quarter of 2017 with the fourth quarter of 2016. offset by • decreasing voice revenue as rate plans increasingly incorporate Higher revenue more monthly minutes and calling features, such as long Consolidated revenue increased 3% in the fourth quarter, largely distance. driven by Wireless service revenue growth of 7%. The trends in Wireless adjusted operating profit reflect: Wireless service revenue increased 7% in the fourth quarter • higher wireless device subsidies that offset the higher wireless primarily as a result of subscriber growth and a greater number of device sales as more consumers shift to higher-cost subscribers on higher-rate plans from our various brands, including smartphones; and Rogers Share Everything plans. • higher voice and data costs related to the increasing number of Cable revenue increased 2% in the fourth quarter as strong Internet subscribers. revenue growth of 9% was partially offset by the decline in We continue to target organic growth in higher-value postpaid Television and Phone revenue. We continue to see an ongoing subscribers. We have maintained a stable mix of postpaid and shift in product mix to higher-margin Internet services. prepaid subscribers. Prepaid plans are evolving to have properties Media revenue decreased 4% in the fourth quarter primarily as a result similar to those of traditional postpaid plans. We believe this of lower revenue from the Toronto Blue Jays, primarily due to the evolution provides Canadians with greater choice of subscribing to postseason success in 2016, and lower publishing-related revenue a postpaid or prepaid service plan. Growth in our customer base due to the strategic shift to digital media announced last year, partially over time has resulted in higher costs for customer service, offset by higher Sportsnet revenue and increased sales at TSC. retention, credit, and collection; however, most of the cost increases have been offset by gains in operating efficiencies. Higher adjusted operating profit Higher consolidated adjusted operating profit in the fourth quarter Wireless operating results are influenced by the timing of our reflects an increase in Wireless adjusted operating profit as a result marketing and promotional expenditures and higher levels of of the strong flow-through of top-line growth described above and subscriber additions and related subsidies, resulting in higher improved Cable performance due to the shift in product mix to subscriber acquisition- and activation-related expenses, typically in higher-margin Internet services. the third and fourth quarters. Conversely, periods with higher activity may adversely impact subscriber churn metrics as a result of Net income and higher adjusted net income heightened competitive activity. The third and fourth quarters Net income increased in the fourth quarter as a result of losses typically experience higher volumes of activity as a result of “back to incurred last year related to the discontinuation of the development school” and holiday season-related consumer behaviour. of our legacy IPTV product and higher adjusted operating profit. Aggressive promotional offers are often advertised during these Adjusted net income increased 19% in the fourth quarter primarily periods and also contribute to the impact on subscriber metrics. In due to higher adjusted operating profit and lower depreciation contrast, we typically see lower subscriber additions in the first and amortization. quarter of the year.

QUARTERLY TRENDS AND SEASONALITY The launch of popular new wireless device models can also affect Our operating results generally vary from quarter to quarter as a the level of subscriber activity. Highly-anticipated device launches result of changes in general economic conditions and seasonal typically occur in the fall season of each year. Wireless roaming fluctuations, among other things, in each of our reporting revenue is dependent on customer travel volumes and timing, segments. This means our results in one quarter are not necessarily which is impacted by the foreign exchange rate of the Canadian indicative of how we will perform in a future quarter. Wireless, dollar and general economic conditions. Cable, and Media each have unique seasonal aspects to, and certain other historical trends in, their businesses. Cable Fluctuations in net income from quarter to quarter can also be The trends in Cable service revenue primarily reflect: attributed to losses on the repayment of debt, foreign exchange • higher Internet subscription fees as customers increasingly gains or losses, changes in the fair value of derivative instruments, upgrade to higher-tier speed plans, including those with other income and expenses, impairment of assets, and changes in unlimited usage; income tax expense. • general pricing increases; and • shift of enterprise customers from lower-margin, off-net legacy Wireless long distance and data services to higher-margin, next The trends in Wireless revenue and adjusted operating profit reflect: generation services and data centre businesses; partially offset • the growing number of wireless voice and data subscribers; by • higher usage of wireless data; • competitive losses of Television subscribers; • higher wireless device sales as more consumers shift to • Television subscribers downgrading their service plans; and smartphones; • lower additional usage of Internet, Television, and Phone • decreasing postpaid churn, which we believe is beginning to products and services as service plans are increasingly bundling reflect the realization of our enhanced customer service efforts; more features, such as unlimited bandwidth or a greater number and of TV channels.

56 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 57 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT and advertising are concentratedfall in the months spring, (generally summer,year), the and second with and postseasonadvertising third games revenue quarters commanding and ofticket additional a the sales revenue premium and from in 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 • revenue related to game day ticket sales, merchandise sales, • 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 • the NHL season, where: Other expenses Depreciation and amortization has beenpast trending upward several over the depreciable years asset as base, relatedand a significantly expansion result to of ourincreasing of our capital recent wireless expenditures an rollout in network. previousworked increase and This to current upgrade is years our in as wireless a network, we boxes, our purchase direct and NextBox roll set-top result general out of Ignitefootprint. Depreciation Gigabit and Internet amortization and has 4Ka decreased result TV of in to certain 2017 our assets as becoming Cable to fully amortized discontinue and our development decision resulted of in a reduction our of assets legacyfuture subject depreciation to IPTV and depreciation. We product, amortization expect expenditures. to which align with ongoing capital fall months (generallyyear); the second and third quarters of the • games played are concentrated in the spring, summer, and advertising and related retail cycles, whichin tend the to fourth be most quarter active duefirst quarter; to holiday spending and slower in the further along in our NHL Agreement; and relating to both ourspecialty broadcast channels (such networks as FX (such (Canada)). as City) and our vacations or seasonal relocations; and quarter. 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 conventional Television to Internet services; partially offset by bundling more value-added offerings into our Cable products. • the MLB season, where: Seasonal fluctuations relate to: • periods of increased consumer activity and their impact on Media The trends in Media’s results are• generally the fluctuations result in of: advertising and• consumer market subscriber conditions; rate increases; • higher sports and rights costs, including• increases continual as investment we move in primetime and specialty programming Cable operating resultsshaving and are cord also cutting,watching which influenced traditional has cable by resulted television, inTelevision as trends fewer well subscribers. subscribers in as In aproducts cord addition, lower and number trends Internet of or inhome social the phone media as products use substitutes haveCable of for resulted results traditional wireless from in our fewer enterpriseany Phone customers unique seasonal subscribers. do aspects. not generally have • individuals temporarily• suspending the concentrated service marketing we generally for conduct in our extended fourth Cable’s operatingfluctuations results in subscriber arecaused additions by: and affected disconnections,• by typically university and modest college seasonal students who live in residences moving The trends in Cable adjusted operating• profit primarily higher reflect: Internet operating margins, as a• result higher of the premium shift supplier from fees in Television as a result of MANAGEMENT’S DISCUSSION AND ANALYSIS

OVERVIEW OF FINANCIAL POSITION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at December 31 (In millions of dollars) 2017 2016 $ Chg % Chg Explanation of significant changes

Assets Current assets: Accounts receivable 2,041 1,949 92 5 Reflects an increase in trade receivables driven by increased revenue. Inventories 313 315 (2) (1) n/m Other current assets 197 215 (18) (8) n/m Current portion of derivative instruments 421 91 330 n/m Primarily reflects the reclassification to current of the debt derivatives associated with the upcoming maturity of our US$1.4 billion senior notes. See “Financial Risk Management”.

Total current assets 2,972 2,570 402 16 Property, plant and equipment 11,143 10,749 394 4 Primarily reflects capital expenditures, partially offset by depreciation expense. See “Capital Expenditures”. Intangible assets 7,244 7,130 114 2 Reflects the acquisition of a spectrum licence, partially offset by amortization of intangible assets. Investments 2,561 2,174 387 18 Primarily reflects fair value increases for certain publicly-traded investments. Derivative instruments 953 1,708 (755) (44) Primarily reflects the reclassification to current of the debt derivatives associated with the upcoming maturity of our US$1.4 billion senior notes and the changes in market value of our debt derivatives as a result of the appreciation of the Cdn$ relative to the US$. See “Financial Risk Management”. Other long-term assets 82 98 (16) (16) n/m Deferred tax assets 3 8 (5) (63) n/m Goodwill 3,905 3,905 – – n/m

Total assets 28,863 28,342 521 2

Liabilities and shareholders’ equity Current liabilities: Bank advances 6 71 (65) n/m See “Sources and Uses of Cash”. Short-term borrowings 1,585 800 785 98 Reflects borrowings under our new US CP program, partially offset by a decrease in borrowings under our securitization program. Accounts payable and accrued liabilities 2,931 2,783 148 5 Primarily reflects an overall increase in trade payables as a result of the timing of payments made. Income tax payable 62 186 (124) (67) Reflects the timing of tax installments. Current portion of provisions 4 134 (130) (97) Primarily reflects payments made for our share of the remaining obligations in our shomi joint venture and a related provision reversal. Unearned revenue 346 367 (21) (6) Reflects customer deposits at the Toronto Blue Jays. Current portion of long-term debt 1,756 750 1,006 134 Reflects the reclassification of our US$1.4 billion senior notes to current, partially offset by the cumulative repayment of $750 million of senior notes in 2017. See “Managing our Liquidity and Financial Resources”. Current portion of derivative instruments 133 22 111 n/m Primarily reflects changes in market values of our expenditure derivatives, as a result of the appreciation of the Cdn$ relative to the US$, and bond forwards, as a result of a change in the Government of Canada interest rates. See “Financial Risk Management”.

Total current liabilities 6,823 5,113 1,710 33 Provisions 35 33 2 6 n/m Long-term debt 12,692 15,330 (2,638) (17) Primarily reflects the reclassification to current of our US$1.4 billion of senior notes, a decrease in our credit facility borrowings, and revaluation due to the appreciationoftheCdn$relativetotheUS$.See“SourcesandUsesofCash”. Derivative instruments 147 118 29 25 Reflects changes in market values of debt derivatives, primarily as a result of the appreciation of the Cdn$ relative to the US$, partially offset by the upcoming maturity of certain bond forwards that are now classified as current. See “Financial Risk Management”. Other long-term liabilities 613 562 51 9 Reflectsanincreaseinlong-termpensionobligations. Deferred tax liabilities 2,206 1,917 289 15 Primarily reflects an increase in temporary differences between the accounting and tax bases for certain assets and liabilities.

Total liabilities 22,516 23,073 (557) (2) Shareholders’ equity 6,347 5,269 1,078 20 Reflects changes in retained earnings and equity reserves.

Total liabilities and shareholders’ equity 28,863 28,342 521 2

58 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo – – – 5 59 11 45 14 (82) (71) (45) (17) (46) 800 800 (988) (538) (103) (295) (756) 2016 2016 4,994 5,008 3,957 (1,583) (2,456) (2,352) – – (6) 65 (71) (79) (60) (59) 858 109 (988) (184) (154) (475) (735) 650 935 2017 5,302 5,148 3,938 2017 (1,243) (1,034) (2,630) (2,436) 1,585 Years ended December 31 Years ended December 31 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT program FINANCING ACTIVITIES We repaid netDecember amounts 31, 2017 ofborrowings, long-term (2016 $255 debt, and – million relatedRisk derivatives. Management” $583 See for for “Financial more million) the informationto on our on year derivative the instruments. cash our flows ended relating short-term Short-term borrowings Our short-term borrowings consistour of accounts amounts receivable outstanding securitization under CP program program. and Below under is ourat a December US summary 31, 2017 of and our 2016. short-term borrowings as (In millions of dollars) Accounts receivable securitization US commercial paper program Total short-term borrowings Transaction costs incurred Other Net proceeds received on short-term borrowings Net payments on settlement of debt derivatives and forward contracts Dividends paid Net repayment of long-term debt Other Acquisitions and other strategic transactions, net of cash acquired Changes in non-cash working capital related to capital expenditures and intangible assets Change in non-cash operating working capital items Additions to program rights Income taxes paid Interest paid Capital expenditures and interest paid (Bank advances) cash and cash equivalents, beginning of period Change in cash and cash equivalents Bank advances, end of period Financing activities: Cash used in financing activities Cash used in investing activities (In millions of dollars) Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, Acquisitions and other strategic transactions In June 2017, upon receipt ofacquired all an necessary AWS-1 regulatory spectrum approvals, licence we fromto Quebecor Inc., pursuant anacquisition, we existing recognized theasset agreement, of spectrum $184 licence million, by which as includedspectrum an directly paying attributable licence intangible costs. provides The $184Greater us Toronto with Area. million. more Weor wireless did other Upon strategic not capacity transactions make in in 2016. any the material acquisitions Capital expenditures We spent a netplant and amount equipment of before $2,436 relatedcapital changes million in items, this non-cash year working Expenditures” which for on more was information. property, 4% higher than 2016. See “Capital INVESTING ACTIVITIES OPERATING ACTIVITIES The marginal decrease in cashyear provided was by operating a activitiescapital this result and higher of cash higher incomeinterest taxes paid. net paid, investment partially offset in by lower non-cash working OPERATING, INVESTING, AND FINANCING ACTIVITIES Managing Our Liquidity and Financial Resources SOURCES AND USES OF CASH Cash provided by operating activities before income taxes paid and interest paid Cash provided by operating activities Investing activities: MANAGEMENT’S DISCUSSION AND ANALYSIS

The table below summarizes the activity relating to our short-term borrowings for the years ended December 31, 2017 and 2016. Year ended December 31, 2017 Year ended December 31, 2016 Notional Exchange Notional Notional Exchange Notional (In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$) Proceeds received from accounts receivable securitization 530 295 Repayment of accounts receivable securitization (680) (295) Net repayment of accounts receivable securitization (150) – Proceeds received from US commercial paper 8,267 1.30 10,712 ––– Repayment of US commercial paper (7,530) 1.30 (9,704) ––– Net proceeds received from US commercial paper 737 1.37 1,008 – Net proceeds received on short-term borrowings 858 –

In March 2017, we entered into a US CP program that allowed us program are unsecured and guaranteed by RCCI, and rank equally to issue up to a maximum aggregate principal amount of in right of payment with all our senior notes and debentures. See US$1 billion. In December 2017, we increased the maximum “Financial Condition” for more information. aggregate principal amount allowed under our US CP program to Concurrent with our commercial paper issuances, we entered into US$1.5 billion. Funds can be borrowed under this program with debt derivatives to hedge the foreign currency risk associated with terms to maturity ranging from 1 to 397 days, subject to ongoing the principal and interest components of the borrowings under the market conditions. Any issuances made under the US CP program US CP program. See “Financial Risk Management” for more will be issued at a discount. The obligations of RCI under the US CP information.

Long-term debt Our long-term debt consists of amounts outstanding under our bank and letter of credit facilities and the senior notes and debentures we have issued. The tables below summarize the activity relating to our long-term debt for the years ended December 31, 2017 and 2016. Year ended December 31, 2017 Year ended December 31, 2016 Notional Exchange Notional Notional Exchange Notional (In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$)

Credit facility borrowings (Cdn$) 1,730 1,140 Credit facility borrowings (US$) 960 1.32 1,269 2,188 1.31 2,877

Total credit facility borrowings 2,999 4,017

Credit facility repayments (Cdn$) (1,830) (1,540) Credit facility repayments (US$) (1,110) 1.31 (1,453) (2,038) 1.32 (2,686)

Total credit facility repayments (3,283) (4,226)

Net repayments under credit facilities (284) (209)

Senior notes issuances (US$) –––500 1.34 671 Senior notes repayments (Cdn$) (750) (1,000)

Net repayment of senior notes (750) (329)

Net repayment of long-term debt (1,034) (538)

Years ended December 31 The revolving credit facility is unsecured, guaranteed by RCCI, and (In millions of dollars) 2017 2016 ranks equally with all of our senior notes and debentures. Long-term debt net of transaction Effective April 1, 2016, we amended our $2.5 billion revolving credit costs, beginning of period 16,080 16,870 facility to, among other things, extend the maturity date from July Net repayment of long-term debt (1,034) (538) Gain on foreign exchange (608) (245) 2019 to September 2020. At the same time, we also amended the Deferred transaction costs incurred (3) (12) $1.0 billion non-revolving credit facility to, among other things, Amortization of deferred transaction extend the maturity date from April 2017 to April 2018. As a result costs 13 5 of the repayments made during 2016, we reduced the amount of Long-term debt net of transaction borrowings available under our non-revolving credit facility from costs, end of period 14,448 16,080 $1.0 billion to $301 million.

60 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 61 2 2.8 3.0 3.1 4.70 4.72 4.82 (Cdn$) and discounts Transaction costs recognized in net income 1 (Cdn$) ROGERS COMMUNICATIONS INC. Total gross proceeds at issuance 2017 ANNUAL REPORT Discount/premium DEBT LEVERAGE RATIO 2017 2016 2015 WEIGHTED AVERAGE COST OF BORROWINGS (%) 2017 2016 2015 Dividends In 2017,outstanding we Class A declared Sharespaid and and $988 Class million paid BInformation” in for Non-Voting more dividends cash information. Shares. dividends. on We See each “Dividends and ofShelf prospectuses Share our We have two shelfsecurities prospectuses from that time qualifypublic to the offering offering time. of of up One tothe debt shelf $4 provinces billion prospectus of of qualifies ourprospectus debt the Canada (together securities with (Canadian in a eachfiled Shelf) corresponding of with registration and the statement the USthe public Securities other offering and shelf of Exchangethe up United Commission) to States qualifies US$4 and Ontarioand billion (US the of Shelf). US our Both Shelf debt theissued will securities Canadian US$500 expire Shelf in million in ($671 AprilUS 2018. million) Shelf. We In of did November debt not 2016, issue securities any we under additional debt the securities in 2017. to convert allCanadian the dollars interest as andManagement” at for principal more December information. payment 31, obligations 2016. to See “Financial Risk There were no debt derivativesrepayments. associated with the 2017 and 2016 rate Interest (Cdn$) Due date Notional amount amount Principal November 4, 2016 US 500 2026 2.900% 98.354% 671 17 May 2016 1,000 March 2017June 2017 250 500 Gross proceeds before transaction costs, discounts,Transaction and premiums. costs, discounts, and premiums are included as deferred transaction costs and discounts in the carrying value of the long-term debt, and using the effective interest method. 2016 issuances Maturity date (In millions of dollars) 2016 repayments 2017 repayments Total for 2017 750 Repayment of senior notes and relatedBelow derivative settlements is a summary2017 of and 2016. the repayment of our senior notes during The senior notesofferings issued in in the US. 2016 were issuedConcurrent pursuant to with public derivatives to the convert all 2016 intereston and principal issuance, the payment obligations Management” senior we for more notes information. entered to into CanadianOn February debt dollars. 8, 2018, See2048 we at issued “Financial a US$750 rate million Risk ofderivatives senior to 4.300%. notes convert At due all the interestto same and time, principal Canadian we payment entered obligations dollars.$938 into debt As million from a thegeneral issuance. result, corporate We we purposes, intend which to receivedmaturity may use of include net these the our funds proceeds repayment outstandingprogram. for at of commercial paper under our USAll CP the notesranking equally issued with are alldebentures, bank unsecured of credit facilities, our and and other letter of guaranteed unsecured credit facilities. senior by notes RCCI, and 1 2 Date Issued Issuance of senior notes and relatedBelow debt is derivatives a summary offacilities and the for senior general notes corporate purposes. that We we did issued not(In in issue millions any 2016, of senior dollars, with notes except the in interest 2017. proceeds rates and used discounts) to repay outstanding advances under our credit As at December 31, 2017,facilities we (2016 had nil – drawn $301 underWe million our had bank ($100 entered credit million into debt and derivatives US$150 related million)). to these borrowings MANAGEMENT’S DISCUSSION AND ANALYSIS

FREE CASH FLOW The 2% increase in free cash flow this year was primarily a result of: • higher adjusted operating profit; partially offset by Years ended December 31 • higher capital expenditures; and (In millions of dollars) 2017 2016 % Chg • higher cash income taxes. Adjusted operating profit 1 5,379 5,092 6 Deduct (add): FREE CASH FLOW Capital expenditures 2 2,436 2,352 4 (IN MILLIONS OF DOLLARS) Interest on borrowings, net of capitalized interest 722 740 (2) 2017 1,746 3 Cash income taxes 475 295 61 2016 1,705 Free cash flow 1 1,746 1,705 2 2015 1,676 1 Adjusted operating profit 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. 2 Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences. 3 Cash income taxes are net of refunds received.

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.

As at December 31, 2017 (In millions of dollars) Total available Drawn Letters of credit US CP program Net available Bank credit facilities: Revolving 3,200 – 9 935 2,256 Outstanding letters of credit 87 – 87 – – Bank advances – 6 – – (6) Total bank credit facilities 3,287 6 96 935 2,250 Accounts receivable securitization 1,050 650 – – 400 Total 4,337 656 96 935 2,650

As at December 31, 2016 (In millions of dollars) Total available Drawn Letters of credit Net available Bank credit facilities: Revolving 2,500 – 9 2,491 Non-revolving 301 301 – – Outstanding letters of credit 59 – 59 – Bank advances – 71 – (71) Total bank credit facilities 2,860 372 68 2,420 Accounts receivable securitization 1,050 800 – 250 Total 3,910 1,172 68 2,670

In addition to the noted sources of available liquidity, we held COVENANTS $1,465 million of marketable securities in publicly-traded The provisions of our $3.2 billion revolving bank credit facility companies as at December 31, 2017 (2016 – $1,047 million). described in “Sources and Uses of Cash” impose certain restrictions on our operations and activities, the most significant of Weighted average cost of borrowings which are leverage-related maintenance tests. As at December 31, Our borrowings had a weighted average cost of 4.70% as at 2017 and 2016, we were in compliance with all financial covenants, December 31, 2017 (2016 – 4.72%) and a weighted average term financial ratios, and all of the terms and conditions of our debt to maturity of 9.9 years (2016 – 10.6 years). agreements. Throughout 2017, these covenants did not impose restrictions of any material consequence on our operations.

62 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 63 3 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT We have engagedMoody’s 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 2017. We madecontributions a to total our definedexpect of benefit pension $145 our plans$141 million this million in year. total (2016 2018 We andon to – various estimated be market adjusted $125 factors, annuallyand such thereafter funding staffing million) based as assumptions. interest of rates, requirements expected returns, Changes to in factors be suchincreases in as compensation, and the the discountcan expected return rate, affect on participation the plan assets rates, accruedthe deficiency benefit of plan obligation, assets pensionSee over “Accounting accrued expense, Policies” obligations for and in more information. the future. In order to manageJune the 30, 2016, rising the cost Rogers of Definedto Benefit our Pension pension Plan new was plans, closed participating effective enrollment. in the Beginning Rogerseligible Defined July for Benefit enrollment Pension 1,Plan. into Plan became a 2016, new employees Defined Contribution not Pension Purchase of annuities From timecontributions to to ourpurchased pension time, plans, annuities and wepension the from benefit obligations pension have for insurance certain plans groupsin have of made retired companies the employees plans. additional toresponsibility Purchasing for the that fund lump-sum portion annuities ofthe the relieves the retired accrued us employees benefit and obligations of eliminates for with the our the significant obligations. primary risk associated We did notpension make plans any additional inpurchase lump-sum 2017 additional annuities. contributions or to 2016, our and the pension plans did not 7.3 6.7 6.6 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 2 RATIO OF ADJUSTED OPERATING PROFIT / INTEREST ON BORROWINGS 2017 2016 2015 Unchanged since the inception of ourWe US did CP not program seek in a the rating first from quarter Fitch of for 2017. our short-term obligations in 2017. Unchanged for the year. IssuanceCorporate credit issuer default rating S&P Moody’s Fitch Senior unsecured debt US commercial paper PENSION OBLIGATIONS Our defined benefitapproximately pension $452 plans million as had atmillion). December a 31, 2017 net During (2016 funding –$65 $387 2017, deficit million of primarily our aswe a used net result to measure of these a funding obligations. decrease in deficit the discount increased rate by 3 Ratings for long-termcomposite rates debt range from AAA instrumentsrepresenting (S&P and across the Fitch) or the highest Aaa (Moody’s), Substantial quality universe Risk of (Fitch), of securities andsecurities C rated, rated. (Moody’s) to forconsidered D Investment-grade the to (S&P), lowest range credit from qualityto BBB- of AAA ratings (S&P (S&P and and are Fitch) Fitch) or or Aaa generally (Moody’s). Baa3 (Moody’s) Ratings for short-termcomposite debt rates instruments ranges(Moody’s), across representing the from the highest quality A-1+(S&P universe of and securities (S&P), of Fitch), rated, to and C F1+securities not prime (Fitch), rated. (Moody’s) for orconsidered the Investment-grade lowest to P-1 quality credit be of (Moody’s) ratings quality ratings of or higher. at are least generally A-3Credit (S&P), ratings F3 are not (Fitch),securities, recommendations or to nor P-3 purchase, are hold,suitability. or they There sell is a no assurance comment thata a on rating given will market period, remain in orentirely price effect for that by or a a investor rating ratingThe agency will ratings if not it be onMoody’s are believes revised investment-grade our ratings. circumstances or warrant withdrawn senior it. debt provided by S&P, Fitch, and 1 2 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. debt, particularly a MANAGEMENT’S DISCUSSION AND ANALYSIS

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 principal and interest payments for US dollar- agreements denominated senior notes and debentures, credit • Forward foreign exchange agreements (from facility borrowings, and commercial paper time to time as necessary) borrowings. Bond forwards • Impact of fluctuations in market interest rates on • Forward interest rate agreements forecasted interest payments for expected long- term debt Expenditure derivatives • Impact of fluctuations in foreign exchange rates on • Forward foreign exchange agreements forecasted US dollar-denominated expenditures Equity derivatives • Impact of fluctuations in share price on stock- • Total return swap agreements based compensation expense

We also manage our exposure to fluctuating interest rates and we Below is a summary of the debt derivatives we entered into and have fixed the interest rate on 89.5% (2016 – 91.2%) of our debt, settled related to our credit facility borrowings and commercial including short-term borrowings, as at December 31, 2017. paper program during 2017 and 2016.

We designate the debt derivatives related to our senior notes and Year ended December 31, 2017 debentures as hedges for accounting purposes against the foreign (In millions of dollars, except exchange Notional Exchange Notional exchange risk associated with specific debt instruments. We do not rates) (US$) rate (Cdn$) designate the debt derivatives related to our credit facility and US CP borrowings as hedges for accounting purposes. Our bond Credit facilities forwards and expenditure derivatives are also designated as Debt derivatives entered 1,610 1.32 2,126 hedges for accounting purposes. Debt derivatives settled 1,760 1.32 2,327 Net cash paid (17) DEBT DERIVATIVES Commercial paper program We use cross-currency interest rate exchange agreements (debt Debt derivatives entered 8,266 1.30 10,711 derivatives) to hedge the foreign exchange risk on all of the interest Debt derivatives settled 7,521 1.29 9,692 and principal payment obligations of our US dollar-denominated Net cash paid (62) senior notes and debentures.

Year ended December 31, 2016 New debt derivatives to hedge new senior notes issued (In millions of dollars, except exchange Notional Exchange Notional US$ Hedging effect rates) (US$) rate (Cdn$) Fixed Credit facilities Principal/ hedged Debt derivatives entered 8,683 1.31 11,360 (In millions of dollars, Notional (Cdn$) Debt derivatives settled 8,533 1.31 11,159 except interest rates) amount Maturity Coupon interest Equivalent Net cash received 8 Effective date (US$) date rate rate 1 (Cdn$)

November 4, 2016 500 2026 2.900% 2.834% 671

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

During 2017, we did not enter into or settle any debt derivatives related to senior notes.

During the year, we entered into debt derivatives related to our credit facility and US CP borrowings as a result of a favourable interest rate spread obtained from borrowing funds in US dollars. We used these derivatives to offset the foreign exchange and interest rate risk on our US dollar-denominated credit facility and commercial paper borrowings. As a result of the short-term nature of these debt derivatives, we have not designated them as hedges for accounting purposes.

64 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 65 500 400 900 2016 (Cdn$) Notional sextendedin 500 400 900 2017 rate 1 Exchange 990840 1.33 1.22 1,318 1,025 Hedged GoC ROGERS COMMUNICATIONS INC. (US$) interest rate as at Notional December 31, 2016 (Cdn$) Notional 2017 ANNUAL REPORT Hedged GoC interest rate as at rate December 31, 2017 Exchange BOND FORWARDS From time to(bond time, forwards) to we hedge use interestwe rate extendible risk on expect bond the debt forward toapproximately instruments $5.6 derivatives issue billion of in ourover outstanding the the public next debt five future. matures yearswe (2016 As will issue – public at $5.9 debt billion)those over December and that maturities we time 31, anticipate to together that fundrequirements. 2017, 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.On 30-year The November 4, bond rate 2016, we on forward exercised a due $500 million January notionalUS$500 4, bond million 2017 senior insettle notes the relation due derivative. to 2026 Thethe the and amount bond paid issuance paid forward represents at $53 of theinto the million time the fair finance of to value settlement costs of andinterest from will rate be the reclassified method hedgingnotes over due reserve 2026. the using life the of effective the US$500 million senior rate of $1.28/US$ranging (2016 from – January2017 to 2018 $1.32/US$), December 2018). to with Ourmaturing outstanding December terms expenditure in derivatives 2019 to 2018 (2016$1.30/US$. maturity are –January hedged at an average exchange rate of summary of the expendituremanage derivatives into foreign which weexpenditures. exchange entered to risk related to certain forecasted amount Notional Year ended December 31, 2017 Year ended December 31, 2016 840930 1.27 1.33 1,070 1,240 (US$) 2016 4.72% 91.2% 1.1070 Notional 100.0% Financial 1 10.6 years US$US$ 6,700 6,700 $$ 15,418 14,067 As at December 31 2017 4.70% 89.5% 1.1070 100.0% 9.9 years US$ 6,700 US$ 6,700 $$ 15,152 13,567 , on December 31, 2017, and 1 3 2 borrowings Weighted average term to maturity Weighted average interest rate on Percent hedged Hedged with debt derivatives Hedged exchange rate Total borrowings Total borrowings at fixed rates Percent of borrowings at fixed rates December 2017 such that its rate will reset in April 2018. Bond forwards with maturity dates beyond December 31, 2017 are subject to GoC rate re-setting from time to time. The $400 million due in December 2018 wa Borrowings include long-term debt,short-term including borrowings the impactsecuritization associated programs. of debt with derivatives, and our US CP and accounts receivable Instruments: RecognitionDecember 31, and 2016, RCI accounted Measurement notes for 100% as of hedges its debt againstDecember derivatives 31, designated related 2017 to US and senior dollar-denominated 2016,for 100% debt. accounting of and As our economic purposes. US a dollar-denominated result, debt is on hedged US dollar-denominated long-term debthedged reflects interest the rate. hedged exchangePursuant rate and to the the requirements for hedge accounting under IAS 39, As at December 31,designated 2017 as we hedges for had accounting $900 purposes. million notional amount of bond forwards outstanding (2016 – $900 million), all of which were (In millions of dollars, except exchange rates, percentages, and years) US dollar-denominated long-term debt The expenditure derivatives noted abovehedges have for been accounting purposes. designated as As at December 31, 2017, wederivatives had US$1,200 outstanding million (2016 of expenditure – US$1,290 million), at an average EXPENDITURE DERIVATIVES We use foreign currency forward contractsto (expenditure derivatives) hedge thecertain foreign forecasted US exchange dollar-denominated risk expenditures. Below on is a the notional amount of 1 GoC term (years) Effective date Maturity date (In millions of dollars, except interest rates) 3 (In millions of dollars, except exchange rates) 1 2 As at Decemberdenominated 31, 2017, senior we noteshedged had using and debt US$6.7 derivatives. debentures, billion of all US of dollar- which were Amount of borrowings at fixed rates Expenditure derivatives entered Expenditure derivatives settled 1030Total December 2014 December 2014 April 30, 2018 December 31, 2018 400 500 2.65% 2.85% 2.62% 900 2.52% MANAGEMENT’S DISCUSSION AND ANALYSIS

EQUITY DERIVATIVES As at December 31, 2016 We use stock-based compensation derivatives (equity derivatives) Notional Notional Fair to hedge the market price appreciation risk of the Class B (In millions of dollars, except amount Exchange amount value Non-Voting Shares granted under our stock-based compensation exchange rates) (US$) rate (Cdn$) (Cdn$) programs. As at December 31, 2017, we had equity derivatives for Debt derivatives accounted for 5.4 million Class B Non-Voting Shares with a weighted average as cash flow hedges: price of $51.44. These derivatives have not been designated as As assets 5,200 1.0401 5,409 1,751 hedges for accounting purposes. We record changes in their fair As liabilities 1,500 1.3388 2,008 (68) value as a stock-based compensation expense, or offset thereto, Short-term debt derivatives not which serves to offset a substantial portion of the impact of accounted for as hedges: changes in the market price of Class B Non-Voting Shares on the As liabilities 150 1.3407 201 – accrued value of the stock-based compensation liability for our Net mark-to-market debt stock-based compensation programs. derivative asset 1,683 During 2017, we settled existing equity derivatives for net proceeds Bond forwards accounted for of $6 million and entered into new derivatives on 1.0 million Class B as cash flow hedges: As liabilities – – 900 (51) Non-Voting Shares with an expiry date of March 2018. Expenditure derivatives We have executed extension agreements for the remaining equity accounted for as cash flow derivative contracts under substantially the same terms and hedges: As assets 990 1.2967 1,284 40 conditions with revised expiry dates to April 2018 (from April 2017). As liabilities 300 1.4129 424 (21) In August 2016, we settled 0.3 million equity derivatives at a Net mark-to-market weighted average price of $58.16 as a result of a reduction in the expenditure derivative asset 19 number of share-based compensation units outstanding. Equity derivatives not accounted for as hedges: MARK-TO-MARKET VALUE As assets – – 270 8 We record our derivatives using an estimated credit-adjusted, Net mark-to-market asset 1,659 mark-to-market valuation, calculated in accordance with IFRS. As at December 31, 2017 ADJUSTED NET DEBT AND DEBT LEVERAGE RATIO Notional Notional Fair We use adjusted net debt and debt leverage ratio to conduct (In millions of dollars, except amount Exchange amount value valuation-related analysis and make capital structure-related exchange rates) (US$) rate (Cdn$) (Cdn$) decisions. Adjusted net debt includes long-term debt, net debt Debt derivatives accounted for derivative assets or liabilities, short-term borrowings, and cash and as cash flow hedges: cash equivalents. As assets 5,200 1.0401 5,409 1,301 As liabilities 1,500 1.3388 2,008 (149) As at Short-term debt derivatives not December 31 accounted for as hedges: (In millions of dollars, except ratios) 2017 2016 As liabilities 746 1.2869 960 (23) 1 Net mark-to-market debt Long-term debt 14,555 16,197 derivative asset 1,129 Net debt derivative assets valued without any adjustment for credit risk 2 (1,146) (1,740) Bond forwards accounted for as Short-term borrowings 1,585 800 cash flow hedges: Bank advances 6 71 As liabilities – – 900 (64) Expenditure derivatives Adjusted net debt 3 15,000 15,328 accounted for as cash flow 3,4 hedges: Debt leverage ratio 2.8 3.0

As assets 240 1.2239 294 5 1 Includes current and long-term portion of long-term debt before deferred As liabilities 960 1.2953 1,243 (44) transaction costs and discounts. See “Reconciliation of adjusted net debt” in the Net mark-to-market section “Non-GAAP Measures” for the calculation of this amount. 2 For purposes of calculating adjusted net debt and debt leverage ratio, we believe expenditure derivative liability (39) including debt derivatives valued without adjustment for credit risk is commonly used Equity derivatives not to evaluate debt leverage and for market valuation and transactional purposes. accounted for as hedges: 3 Adjusted net debt and debt leverage ratio are non-GAAP measures and should not As assets – – 276 68 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 Net mark-to-market asset 1,094 to compare us to other companies. See “Non-GAAP Measures” for information about these measures, including how we calculate them. 4 Debt leverage ratio is measured using adjusted operating profit for the last twelve consecutive months.

66 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 67 515 517 2016 Dividends paid 515 517 2017 (in millions of dollars) Years ended December 31 ROGERS COMMUNICATIONS INC. Dividend per share (dollars) 2017 ANNUAL REPORT shares outstanding shares outstanding As at February 28, 2018,Class 112,407,192 Class B A Non-Voting Shares,Class 402,405,483 Shares, B Non-Voting and Shares were 2,563,019 outstanding. optionsWe to use purchase thecalculate weighted earnings average per share number and adjusted of earnings per shares share. outstanding to (Number of shares in millions) Our adjustedDecember net 31, 2016outstanding debt primarily long-term debt, as decreased partiallyfair a value offset of result by by our net of a debtPosition” derivative reduction for $328 a asset. more in See information. decrease “Overview the of million Financial in our from Basic weighted average number of Diluted weighted average number of 2016 1,770,784 3,732,524 112,411,992 402,396,133 514,808,125 As at December 31 2017 924,562 2,637,890 re is no other protection available to 112,407,192 402,403,433 514,810,625 ass A Shares may be made on different terms 1 exercisable Class B Non-Voting Outstanding options Outstanding options Class A Voting Non-Voting Shares than the offer to the holders of Class B Non-Voting Shares. Holders of our Classattend B Non-Voting shareholder Shares meetings;meetings are except entitled however, as to they required receivemade by notice are law to of or not and purchase stipulatedapplicable to entitled by outstanding stock law to Class exchanges. If oroutstanding vote A Class an B Shares, at our offer Non-Voting is Shares, there these constatingshareholders and is under the documents our no constating that documents.classes requirement If of an an under shares, offer the is offer offer made to for be purchase the both made Cl for the Declaration dateApril 19, 2018 RecordAugust date 16, 2018October 18, 2018 June September 11, 14, 2018 2018 December 11, 2018 Payment October date 3, 2018 January 3, 2019 July 3, 2018 In January 2018, theperClassAShareandClassBNon-VotingShare,tobepaidon Board declared a quarterlyApril dividend 3, of 2018, to $0.48 shareholders of record on MarchWe 12, currently 2018. expect that thefor remaining the record 2018 and declaration paymentthe of dates declaration dividends by the will Board be each as quarter at follows, its subject sole discretion: to January 26, 2017April 18, 2017August 17, 2017October 19, 2017 March 13,January 2017 27, 2016April 18, 2016 June September 12,August 15, 2017 11, 2017 2016 December 11, 2017October 20, 2016 March 13, 2016 June April September 12, 3, 11, 2016 2017 October 2016 3, December 2017 12, 2016 January 2, 2018 July 4, 2017 April 1, 2016 October 3, 2016 January 3, 2017 July 4, 2016 0.48 0.48 0.48 0.48 0.48 0.48 0.48 0.48 247 247 247 247 247 247 247 247 Total common shares Options to purchase Class B 1 OUTSTANDING COMMON SHARES Common shares outstanding Declaration date Record date Payment date 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. DIVIDENDS AND SHARE INFORMATION In addition, as atmarketable December securities in 31, publicly-traded 2017, companiesmillion). we (2016 held – $1,047 $1,465 million of MANAGEMENT’S DISCUSSION AND ANALYSIS

COMMITMENTS AND CONTRACTUAL OBLIGATIONS CONTRACTUAL OBLIGATIONS Below is a summary of our obligations under firm contractual arrangements as at December 31, 2017. See notes 3, 21, and 27 to our 2017 Audited Consolidated Financial Statements for more information.

Less than After (In millions of dollars) 1 Year 1-3 Years 4-5 Years 5Years Total Short-term borrowings 1,585 – – – 1,585 Long-term debt 1 1,756 1,800 2,050 8,949 14,555 Net interest payments 712 1,160 908 5,409 8,189 Debt derivative instruments 2 (299) – – (667) (966) Expenditure derivative instruments 2 39 (7) – – 32 Bond forwards 2 64 – – – 64 Operating leases 202 308 167 294 971 Player contracts 3 111 88 10 7 216 Purchase obligations 4 368 346 167 121 1,002 Property, plant and equipment 94 77 61 66 298 Intangible assets 97 44 – – 141 Program rights 5 546 1,121 1,079 1,886 4,632 Other long-term liabilities 2 3 2 2 9 Total 5,277 4,940 4,444 16,067 30,728

1 Principal obligations of long-term debt (including current portion) due at maturity. 2 Net (receipts) disbursements due at maturity. US dollar amounts have been translated into Canadian dollars at the Bank of Canada year-end rate. 3 Player contracts are Toronto Blue Jays players’ salary contracts into which we have entered and are contractually obligated to pay. 4 Purchase obligations are the contractual obligations under service, product, and wireless device contracts to which we have committed. 5 Program rights are the agreements into which we have entered to acquire broadcasting rights for sports broadcasting programs and films for periods in excess of one year at contract inception.

OFF-BALANCE SHEET ARRANGEMENTS OPERATING LEASES We have entered into operating leases for the rental of premises, GUARANTEES distribution facilities, equipment and wireless towers, and other As a regular part of our business, we enter into agreements that contracts. Terminating any single one of these lease agreements provide for indemnification and guarantees to counterparties in would not have a material adverse effect on us as a whole. See transactions involving business sale and business combination “Commitments and Contractual Obligations” and note 27 to our agreements, sales of services, and purchases and development of 2017 Audited Consolidated Financial Statements for quantification. assets. Due to the nature of these indemnifications, we are unable to make a reasonable estimate of the maximum potential amount we could be required to pay counterparties. Historically, we have not made any significant payment under these indemnifications or guarantees. See note 26 to our 2017 Audited Consolidated Financial Statements.

68 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 69 assists the Board to ensure – ROGERS COMMUNICATIONS INC. reviews our accounting policies and – 2017 ANNUAL REPORT practices, the integrity ofprocedures, our and financial reporting thedisclosure processes for financial and release statements tothe and shareholders Board and other in theregulatory relevant public. its requirements It oversight assists foraccounting of financial and our reporting, compliance financialqualifications, with assesses control independence, legal our systems, andexternal and auditors. and work It evaluates also ofassociated processes reviews the used our risk to manage management major internal risk policies exposures. and and it has appropriate systemsresponsibilities. and This procedures committee forand develops practices, carrying recommends governance them out to its policies leads the Board the for Board approval, and inperformance. its periodic review of Board and committee serve on the Board.shareholders Nominated at directors are acommittee either meeting elected by also orcommittee, appointed including each recommends committee by chair. the nominees Board. for The reviewing, and each approvingand compensation Board practices. and Itcompensation benefit of is policies senior alsoexecutive succession management planning. responsible and for monitoring recommending senior the responsibilities between meetings, including acting inas such areas are specificallyBoard designated meeting to and consider authorizedtime. matters at that may a arise preceding from time to debt, and equity structure and reports on them to the Board. pension plans andprovisions of reviews the plans. the investment performance and governance rules thatgovernance apply practices to as US-basedNYSE. companies a and non-US-based our issuer listed on the BOARD OVERSIGHT The Board delegates certaincommittees to responsibilities ensure to proper oversight its and• accountability: seven Audit standing and Risk Committee • Corporate Governance Committee • Nominating Committee – identifies prospective candidates to • Human Resources Committee – assists the Board in monitoring, • Executive Committee – assists the Board in discharging its • Finance Committee – reviews our investment strategies,• general Pension Committee – oversees the administration of our retiree You can findInvestor more Relations website details (investors.rogers.com), including: about• governance a complete at statement of• Rogers our corporate on our governance codes practices; our of conduct• and ethics; full Board committee charters; • director biographies; and • a summary of the differences between the NYSE corporate auditors; GOVERNANCE BEST PRACTICES The majorityadopted of many best our practices for effective• directors governance, including: an are independent lead director; • independent formal and corporate governance policy• we and charters; a have code of business• conduct and director whistleblower share hotline; ownership guidelines; • Board and committee in• camera discussions; annual reviews of Board• and director Audit performance; and Risk Committee meetings with• internal an and orientation programs external for• new directors; regular Board education sessions; • committee authority to retain• independent advisors; director material relationship standards;• and separation of the CEO and Chair roles. We comply with allstandards relevant as corporate a Canadian governance public guidelines companyforeign and listed private on issuer the listed TSX on and the as NYSE a in the US. Rogers is a family-founded, family-controlled companypride and in we take our proactiveour governance and structure disciplined and practices approachshareholders. instill to the confidence ensuring of that our Voting control of Rogers Communications Inc.beneficiaries is of held which by a are trust, membersholds the voting of control the of Rogers RCI family. forof the The benefit trust the of successive generations Rogersoutstanding Class family A Shares via ofare RCI substantial the (2016 stakeholders – and 91%). trust’s owned Theequity as Rogers approximately ownership at family 27% December of of 31, 2017 our of (2016 91% –27%) a through of its combined ownership Non-Voting the total Shares (2016 of – 141 141 million). million ClassThe Board A is Shares madeanother and up of twelve Class four directors B membersbusiness who of leaders the bring in Rogers a North familycommitted rich to and America. firm mix All governance, of of strongcreation oversight, our of experience and shareholder directors as the value. are ongoing to The firmly Board as sound agovernance whole corporate is committed governanceacknowledged practices leaders and and evolving legislation.that The continually Board and Rogers’ believes reviews governanceappropriate structures system and its procedures benchmarks is in place. effective and them that there are against Governance and Risk Management GOVERNANCE AT ROGERS MANAGEMENT’S DISCUSSION AND ANALYSIS

Board of Directors and its Committees Chair Member

As at March 8, 2018 Audit Corporate Nominating Human Executive Finance Pension and Risk Governance Resources

Edward S. Rogers

Charles Sirois, CM

Bonnie R. Brooks, CM Robert K. Burgess

John H. Clappison, FCPA, FCA Robert Dépatie Robert J. Gemmell

Alan D. Horn, CPA, CA

Philip B. Lind, CM John A. MacDonald Isabelle Marcoux Joe Natale

TheHon.DavidR.Peterson, PC, QC LorettaA.Rogers Martha L. Rogers MelindaM.Rogers

SOCIAL RESPONSIBILITY stewardship programs to manage the proper disposal and recycling of our used products, including Rogers Trade-Up and CORPORATE SOCIAL RESPONSIBILITY FidoTrade. Rogers prides itself on being a good corporate citizen. We aim to • Customer Privacy: Rogers highly values the security, integrity, and foster a culture of sound ethics and transparency; that means sensitivity of our customers’ private information. Rogers’ Privacy putting programs in place that have societal, economic, and Policy outlines our responsibilities and practices regarding the environmental benefits. protection of the personal information of our employees and customers. Our Chief Privacy Officer oversees our compliance The material aspects of our Corporate Social Responsibility with this policy and all applicable laws, and responds to requests platform are grouped into six focus areas that are listed below, from law enforcement for customer data. along with our approaches in addressing them: Employee experience Good governance • Talent Management: We want to attract, develop, and engage • Governance and Ethics: We strive to uphold the highest the best talent in Canada. We continue to invest in employee standards of integrity, ethical behaviour, and good corporate programs including an onboarding program, new training citizenship, underpinned by guidelines and policies that govern programs, a new development planning program, and a revised the actions of our directors and employees and promote employee engagement survey. Our Chief Human Resources responsible conduct. Officer oversees talent management, while the Human Customer experience Resources Committee assists the Board in monitoring, reviewing, • Customer Service and Transparency: Customer service is a core and approving compensation and benefit policies and practices. pillar of our strategy. We are committed to an improved • Inclusion and Diversity: At Rogers, we believe that an inclusive customer experience and have implemented programs to workplace reflective of the diverse communities we serve drives address customer issues, such as a Roam Like Home, Rogers better performance – for our employees, our customers, and our EnRoute, and customer service through social media channels company. Our Inclusion and Diversity Council, comprised of like Facebook Messenger and Twitter. leaders from across the business, oversees the development and • Network Leadership and Innovation: Innovation has always been execution of our inclusion and diversity strategy. a part of our identity, whether it is bringing new products or the • Health, Safety, and Wellness: We have a comprehensive latest network technologies to market. integrated healthy workplace program. Our goal is always to • Product Responsibility: We have programs and policies in place protect people by preventing injuries and we invest millions of to manage a range of product responsibility issues. For instance, dollars as well as thousands of hours in safety training every year. we have policies in place to comply with all relevant safety We have robust programs and practices in place to identify and regulations and codes, have programs and teams to manage minimize potential hazards. We continually monitor those and advise on our accessibility offerings, and operate practices, our sites, and our work to ensure employees remain

70 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 71 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT approximately 24,500 employees; sets out high standards forethics, supplier performance labour in themanagement areas rights, of systems. health WeCooperation (JAC), and are a members group safety,share of common of global environment, suppliers. the telecom Throughshare companies and our audit Joint that participation results among Audit in ouradhere JAC, peers we to ensure that to oursustainability suppliers standards. internationally recognized supply chain and INCOME TAX PAYMENTS Rogers’ total income tax expense ofthe $635 expense million in computed 2017 on israte close its to of accounting 26.7%. income Cash at2017. income the Cash tax statutory payments income totaledshown on $475 tax the million financial payments statements in forrequired various differ timing reasons, of including from payments. the Thetax the primary is reason lower tax our than our cash expense investment tax income expense we is continue a result totelecommunications of make the networks significant in throughout capital oursystems Canada. wireless Similar and throughout to broadband investments tax in the such productivity-enhancingfor assets world, to tax be deducted Canadian purposesfinancial statement purposes. more tax quickly laws than they permit OTHER GOVERNMENT are PAYMENTS depreciatedIn for 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 property (payroll and taxes) business to taxes; • unrecoverable sales taxes and• custom duties; broadcast, and spectrum, and other regulatory fees. INCOME TAX AND OTHER GOVERNMENT PAYMENTS We proactively manage our taxdecisions affairs to enhance and Rogers’ business investment optimize in after-tax ourcomprehensive free business policies cash andcompliant shareholder with and flow all returns. available tax proceduresfiling laws and We making for and all to have reporting income anda requirements, sales ensure tax including timely returns and basis. payments wecooperative on As relationships with revenue a are authorities to parteffort minimize audit of and thisgovernment process, policy reduce we makers pursue onanditsshareholders,employees,customers,andother tax taxation open matters and uncertainty. thatstakeholders. affect Rogers We also engage with See our annualwebsite Corporate (about.rogers.com/responsibility) Socialabout for our Responsibility social and more environmental report performance. on information our success, which is whyselection we processes ensure and thatbusiness management, we have and with strongcompanies that who supplier share we our values. socially Our conduct Supplier Code of Conduct and environmentally responsible customers, create diversebusinesses, and pay well-paying our jobs, fairshareholders. share support of small Beyond taxes, andperformance deliver these dividends produces to directincluding indirect significant economic charitable economic impacts,goods donations and benefits services. and our locally as procured well, of the best ways we canSuccess contribute program to society. provides Our low-cost Connectedsubsidized broadband for tenants Internet within to partnered rent- non-profit organizationshousing and providers. 150,000 Canadian households areInternet eligible for access throughgiving the them Connected the tools forbenefits and of Success connectivity. resources program, needed to experience the and in-kind donationscauses. In to 2017, we support launcheddedicated the various Ted to Rogers organizations Scholarship ensuringCanadians Fund, and the by success helpingacross the of some country future of succeedalso in the generations their support brightest educational of aspirations. ourthrough young We the employees leaders Rogers Employee andemployees Volunteer the opportunity their Program, to which volunteer communityone in gives paid their activities communities day for perensure year. The children Jays Care inprograms Foundation that need also support works make physical to development. activity, positive education, life and life-skill choices through facilities, whichtransmission sites, include power supply stations, owned andas retail stores, and an as well extensive leasedreducing vehicle the associated buildings, fleet. greenhouseconsumption We gas cell by emissions 2025, strive and reflected energy to intargets our of meet company-wide 25% and reduction our 10%, respectively, based goal on 2011 of levels. produce is another important way inenvironmental which footprint. we To are reduce managing and our wasteweproduce,welookforopportunitiestoavoidwaste responsibly manage the generation, run programswork to to recycle increase and employees’award-winning reuse “Get recycling Up materials, and behaviours Get and Green” through program. our safe. We alsobWell, that promotes have health and a wellness at work national and at employee home. wellness program, • Supply Chain Management: Suppliers play a huge role in our Economy and society • Economic Performance: We strive to offer innovative solutions for • Digital Inclusion: Digital inclusion is a priority for Rogers and one Community investment • Community Giving: In 2017, Rogers provided $64 million in cash Environmental responsibility • Energy Use and Climate Change: Rogers operates thousands of • Waste and Recycling: Reducing the amount of waste we MANAGEMENT’S DISCUSSION AND ANALYSIS

As outlined in the table below, the total cost to Rogers of these payments in 2017 was $1,185 million.

(In millions of dollars) Income Non-recoverable Payroll Regulatory and Property and Total taxes and taxes sales taxes taxes spectrum fees 1 business taxes other payments Total payments 475 9 127 521 53 1,185

1 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 2008, 2014, and 2015, respectively.

We also collected on behalf of the government $1,876 million in sales taxes on our products and services and $635 million in employee payroll taxes.

RISK MANAGEMENT level, ERM works with management to provide governance and advice in managing the key risks and associated controls to We strive to continually strengthen our risk management mitigate these risks. ERM works with Internal Audit to monitor the capabilities to protect and enhance shareholder value. The adequacy and effectiveness of controls to reduce risks to an purpose of risk management is not to eliminate risk but to optimize acceptable level. trade-offs between risk and return to maximize value to the ERM carries out an annual strategic risk assessment to identify our organization. key risks in achieving our corporate objectives by identifying corporate-, business unit- and department-level risks and aligning RISK GOVERNANCE business unit and department objectives to the corporate The Board has overall responsibility for risk governance and objectives. Using an aggregate approach, ERM identifies the key oversees management in identifying the key risks we face in our risks and the potential impact on our ability to achieve our business and implementing appropriate risk assessment processes corporate objectives. This assessment includes reviewing risk to manage these risks. It delegates certain risk oversight and reports, audit reports, and industry benchmarks and interviewing management duties to the Audit and Risk Committee. senior management with business unit and department The Audit and Risk Committee discusses risk policies with accountability. ERM reports the results of the annual strategic risk management and the Board and assists the Board in overseeing assessment to the Executive Leadership Team, the Audit and Risk our compliance with legal and regulatory requirements. Committee, and the Board. The Audit and Risk Committee also reviews: Internal Audit is the third line of defence. Internal Audit evaluates • the adequacy of the internal controls that have been adopted to the design and operational effectiveness of the governance safeguard assets from loss and unauthorized use, to prevent, program, internal controls, and risk management. Risks, controls, deter, and detect fraud, and to ensure the accuracy of the and mitigation plans identified through this process are financial records; incorporated into the annual Internal Audit plan. Annually, Internal • the processes for identifying, assessing, and managing risks; Audit also facilitates and monitors management’s completion of • our exposure to major risks and trends and management’s the financial statement fraud risk assessment to identify areas of implementation of risk policies and actions to monitor and potential fraud or misstatement in our financial statements and control these exposures, including cybersecurity; disclosures and to assess whether controls are adequately • the implementation of new major systems and changes to designed and operating effectively. existing major systems; The Executive Leadership Team and the Audit and Risk Committee • our business continuity and disaster recovery plans; are responsible for approving our enterprise risk policies. Our ERM • any special audit steps adopted due to material weaknesses or methodology and policies rely on the expertise of our significant deficiencies that may be identified; and management and employees to identify risks and opportunities • other risk management matters from time to time as determined and implement risk mitigation strategies as required. by the Audit and Risk Committee or directed by the Board.

ENTERPRISE RISK MANAGEMENT RISKS AND UNCERTAINTIES AFFECTING OUR Our Enterprise Risk Management (ERM) program uses the “3 Lines BUSINESS of Defence” framework to identify, assess, manage, monitor, and communicate risks. Our business units and departments, led by the This section describes the principal risks and uncertainties that Executive Leadership Team, are the first line of defence and are could have a material adverse effect on our business and financial accountable for managing or accepting the risks. Together, they results. Any discussion about risks should be read in conjunction identify and assess key risks, define controls and action plans to with “About Forward-Looking Information”. minimize these risks, and enhance our ability to meet our business objectives. GENERAL RISKS ERM is the second line of defence. ERM helps management ECONOMIC CONDITIONS identify the key risks in meeting our business objectives, our risk Our businesses are affected by general economic conditions and appetite, and emerging risks. At the business unit and department consumer confidence and spending. Recessions, declines in

72 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 73 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT IMPACT OF NETWORK FAILURES ON REVENUECUSTOMER AND SERVICE If our networks orcircumstances, key network result components in fail,certain a it periods and could, loss have infinancial an of some position. adverse We service effect rely on on forfor business our certain partners our results to customers. carry If and customers some one our might traffic of for these also carriers cause haswould a a last service until service failure, we it could interruption reroute for the traffic those toWe another work customers carrier. to that protect ourand service from the major impact oflandslides weather natural where disasters it is events necessaryassurances and such that feasible to a do as future so.that such There event ice outages are will would no not not affect storms, our cause revenue. service flooding, outages and or DEPENDENCE ON INFORMATION TECHNOLOGY SYSTEMS Our businesses depend on ITwe systems are for day-to-day unable operations.accommodate to If customer growth operate and new ourif products and systems, our services, or systems make experience enhancementsadverse disruptions to effect or on failures,customers, it our manage could subscriber ability churn, have to produce an subscriber accurate acquire and timely new invoices, subscribers,operating service generate expenses. This revenueresults could and financial have growth, position. an and adverse impact manage on our TECHNOLOGY RISKS INFORMATION SECURITY RISK Our industry is vulnerablefrequency to cyber and risksemploys that complexity. are systems Rogers, growing and incyberattacks, along network both which infrastructure withaccess that may our are include to suppliers, subjectcorruption theft proprietary to of of orcyberattack assets, sensitive data, unauthorized against information, orinfrastructure and destruction our, operational supporting or informationservice or disruption. systems could disruptions, our result Aremediation costs, in and litigation, suppliers’, reputational significant damage. loss criticalManagement has of network committed toprogram customers, an designed information and significant tosecure, cybersecurity reinforce vigilant, the anddepends importance resilient of organization. on Our remaining protectinginformation ongoing a about our success our sensitivesecurity awareness customers data, training, and policies, includingtechnology procedures, employees. systems personal and to We information protectto rely this monitor this information. on risk, Rogersmonitoring, leveraging continues reviewing external best threat practices, and intelligence, implementingrequired internal controls as tocoverage mitigate against cybersecuritybreaches, intrusions, certain risks. and attacks,and amongst We damages other Risk things. Committee have related The ispolicies Audit responsible and insurance associated for to procedures related overseeing to management’s cybersecurity cybersecurity risks. External threats to the network arenoassurancewewillbeabletoprotectthenetworkfromallfuture constantly changing and there is threats. The impact of such attacks may affect our revenue. licences, combined withownership of 2012 wireless providers legislation withcould less that than make 10% it allows market harder share, additional foreign for incumbent wireless spectrum. carriersownership of to wireless acquire providers The couldforeign make wireless it carriers less legislation to expensiveThis for enter could increase the regarding the Canadian intensitywireless wireless sector. of market. competition foreign in the Canadian Canadian market by acquiringwireless wireless licences. licences If or companiesresources a with enter holder significantly of greaterwireless the market capital share. Canadian See “Foreignmore market, Ownership information. and it Control” for could reduce our In addition, the CRTC Broadcastingallow Distribution Regulations cable do not operatorswhere to it obtain is technically exclusivesystems. feasible contracts to in install two buildings or more transmission • ISED Canada’s policy regarding the transfer of spectrum There is no assurance thatprovide our current services or that future are competitorsmore will superior not to quickly ours or torequirements, at lower enter evolving prices, markets adapt industrycompeting in services. trends which Any of we orreduce our these operate, business changing factors market share or could or market revenue. introduce increase churnWe may or have some ongoing re-pricingwe of may products need and to services, extend as customers lower and wireless retain pricing offers existingof to subscribers. the attract As population new wireless deepens, penetration newlower average wireless monthly customers revenue, may which could generate slow revenue growth. Global technology giants continueinto to new ramp up marketscompetition content for such spending our Media as andresult Cable sports business in segments. media, This an may resulting increaseadditional in in supplementary subscriber increased sources churnfrom. of as customers media now content have Wireless to could choose faceforeign ownership increased rules and control competition of• wireless due licences: foreign to changes telecommunication to companies could enter the SUBSTANTIAL COMPETITION economic activity, and economicand uncertainty business can confidence erode and consumer of reduce discretionary 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. Poor of economic conditions can our alsoplans,asthereisnoassurancethattheplanswillbeabletoearn have an impact broadcasting, on ourthe pension assumed rate ofchanges in return. the Capital discount market ratesour and volatility pension other may obligations, variables requiring used result tofuture us in calculate to make that contributionsassumptions in differ being the used in significantly the actuarial valuation from process. current contributions and MANAGEMENT’S DISCUSSION AND ANALYSIS

Most of our employees and critical elements of our network are made to any alternative Canadian multi-channel broadcasting infrastructure and IT systems are concentrated in various physical distribution system, our cable services may face increased facilities. If we cannot access one or more of these facilities as a competition. In addition, as the technology for wireless Internet result of a natural or human-made disaster or otherwise, our continues to develop, it is, in some instances, replacing traditional operations may be significantly affected to the extent that it may be wireline Internet. difficult for us to recover without a significant interruption in service The use of PVRs has affected our ability to generate television or negative impact to our revenue or customer base. advertising revenue as viewers can skip advertising aired on television UNAUTHORIZED ACCESS TO DIGITAL BOXES OR INTERNET networks. The continued emergence and growth of subscriber- MODEMS based satellite and digital radio products could affect AM and FM We use encryption technology developed and supported by our radio audience listening habits and have a negative effect on the vendors to protect our cable signals from unauthorized access and results of our radio stations. Certain audiences are also migrating to control access to programming based on subscription away from traditional broadcast platforms to the Internet as more packages. We also use encryption and security technologies to video and audio content streaming becomes available. prevent unauthorized access to our Internet service. Thereisnoassurancethatwewillbeabletoeffectivelyprevent REGULATORY RISKS unauthorized decoding of television signals or Internet access in the CHANGES IN GOVERNMENT REGULATIONS future. If we are unable to control cable access with our encryption Substantially all of our business activities are regulated by ISED technology, and subscriptions to digital programming, including Canada and/or the CRTC. Any regulatory changes or decisions premium video-on-demand and subscription video-on-demand, this could adversely affect our consolidated results of operations. See could result in a decline in our Cable revenue. “Regulation In Our Industry” for more information.

NEW TECHNOLOGY Regulatory changes or decisions made by these regulators could Our network plans assume the availability of new technology for adversely impact our results on a consolidated basis. This both wireless and wireline networks. While we work with industry regulation relates to, among other things, licensing and related standards bodies and our vendors to ensure timely delivery of new fees, competition, the cable television programming services we technology, there are no assurances these technologies will be must distribute, wireless and wireline interconnection agreements, available as and when required. the rates we may charge to provide access to our network by third COMPETING TECHNOLOGIES parties, the resale of our networks and roaming on our networks, our operation and ownership of communications systems, and our Several technologies have affected the way our services are ability to acquire an interest in other communications systems. In delivered, including: addition, the costs of providing services may be increased from • broadband; time to time as a result of compliance with industry or legislative • IP-based voice, data, and video delivery services; initiatives to address consumer protection concerns or such • increased use of optical fibre technologies to businesses and Internet-related issues as copyright infringement, unsolicited residences; commercial e-mail, cybercrime, and lawful access. • broadband wireless access and wireless services using a radio frequency spectrum to which we may have limited or no access; Generally, our licences are granted for a specified term and are and subject to conditions on the maintenance of these licences. These • applications and services using cloud-based technology, licensing conditions and related fees may be modified at any time independent of carrier or physical connectivity. by the regulators. The regulators may decide not to renew a licence These technologies may also lead to significantly different cost when it expires, and any failure by us to comply with the conditions structures for users and therefore affect the long-term viability of on the maintenance of a licence could result in a revocation or some of our current technologies. Some of the new technologies forfeiture of any of our licences or the imposition of fines. Our have allowed competitors to enter our markets with similar cable, wireless, and broadcasting licences generally may not be products or services at lower costs. These competitors may also be transferred without regulatory approval. larger, have greater access to financial resources, and have fewer The licences include conditions requiring us to comply with regulatory restrictions than Rogers. Canadian ownership restrictions of the applicable legislation. We Accelerated deployments of fibre networks by competitors may are currently in compliance with all of these Canadian ownership lead to an increase in the reach and stability of their wireline-related and control requirements. If these requirements were violated, we services. This could result in an increase in churn pertaining to our would be subject to various penalties, possibly including, in the wireline business segment services. See “Key Performance extreme case, the loss of a licence. Indicators” for more information. Improvements in the quality of streaming video over the Internet, SPECTRUM coupled with increasing availability of television shows and movies Radio spectrum is one of the fundamental assets required to carry online through OTT content providers, has resulted in competition on our Wireless business. Our ability to continue to offer and for viewership and increased competition for Canadian cable improve current services and to offer new services depends on, television service providers. As a result, we have noticed an increase among other factors, continued access to, and deployment of, in cord cutting and cord shaving as consumers continue to adequate spectrum, including the ability to both renew current withdraw from traditional cable services. If advances in technology spectrum licences and acquire new spectrum licences.

74 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 75 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT COPYRIGHT TARIFFS Pressures on copyright tariffsincrease in continue fees could to negatively affect affect our our results of services. operations. Any CRTC LICENCE RENEWALS In May 2017,permit the us CRTC to operate renewed ourperiod. our Media At broadcasting television the properties same licences for time,large that a the five-year CRTC broadcasting renewed the companies,Entertainment. licences of A such other number as ofhave parties Bell appealed from Media the therevenue and creative that broadcasters decisions community Corus must devote inof to the regard creation National of Programs to Interestdecision significantly (PNI). the alters our A percentageto renewals our CRTC on of business terms plans, decision it that could areof is have adverse a negative pending. operations. impact on Ifinformation. our results See the “Regulation InBUSINESS Our RISKS Industry” forREVENUE EXPECTATIONS FROM more NEW AND ADVANCED SERVICES We expect that amay substantial portion come of from our new futureinvest and revenue significant advanced growth capital services, resourcescan and to offer we develop these continue our services. to networks Itbe so is sufficient possible, we consumer however, demand, thatsatisfy or demand there that for may certain we not products mayor and not services or anticipate market be or ablesubscribers. to these If offer we new doservices not products attract profitably subscribers andpreferences, to new or we products services and couldincreased keep successfully churn. experience This pace to slower couldbusiness, have results revenue of a with operations, material growth and financial adverse condition. changing and effect on consumer our OBTAINING ACCESS TO SUPPORT STRUCTURES AND MUNICIPAL RIGHTS OF WAY 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 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 directly attributable to radio frequencyactions emissions. Future may regulatory result in moreemissions restrictive standards from on low-powered radiocannot frequency predict devices the nature or like extent of wireless any restrictions. devices. We RADIO FREQUENCY EMISSIONS 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 or litigation studies even stating that though these there health are issues no are NATIONAL WIRELESS TOWER POLICY The policy affects all parties thatsystem, plan including to install personal or communications modifyand service an antenna (PCS), broadcasting cellular, serviceother providers. things, The policy thatantenna requires, antenna structures among proponents beforeowners proposing consider of existing new using systemssystems. structures respond existing Antenna to and proponents requests those notifying must to share follow the antenna aconcerns. defined public Certain process types for and of antennathe consultation installations addressing requirements are with excluded local local from The authorities and policy requirements the could public. systems and prevent and/or us from expandingaffect installing our our ability certain network, to serve new our which customers. antenna would ultimately 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 customer originally behaviour could maketerm it difficult be commitments for us or toreceive adversely impose early affected the cancellationcommitments. fees if service on laws, revenue customers or we anticipate from the term THE WIRELESS CODE HIGHER DEVICE SUBSIDIES Our wireless business modelthe is cost based of substantially on subscribercarriers. subsidizing devices, This similar to modelcommit other to attracts Canadian a term wireless customers contractsubsidy with per and us. unit We with in also thewe commit supplier are exchange, to of unable to a certain they recover minimum smartphonethe the devices. costs If customer of the contract, subsidies overbusiness, this the results of term could operations, of have and financial an condition. adverse effect on our If we cannot acquireable and retain to needed spectrum, continue wedeploy to may not offer new be andcompetitive services data improve speeds our our on customers current want.to As services a a attract result, and our and timely ability addition, retain an inability basis, customers to acquireaffect could including and network retain quality be and needed providing result spectrum adversely in could higher affected. capital expenditures. Changes In to government spectrum feesour could payments significantly and therefore increase materially reduce our net income. MANAGEMENT’S DISCUSSION AND ANALYSIS

COMPLEXITY OF OUR BUSINESS do not have operational or financial control over them and only Our businesses, technologies, processes, and systems are have limited influence on how they conduct their business with us. operationally complex and increasingly interconnected. If we do Wireless device vendor market share has recently shifted towards not execute properly, or if errors or disasters affect them, customers fewer top suppliers, which will augment this dependency. may have a negative experience, resulting in increased churn and If one of our network infrastructure suppliers fails, it could delay lower revenue. adding network capacity or new capabilities and services. Device and network infrastructure suppliers can extend delivery times, raise STRATEGY AND BUSINESS PLANS prices, and limit supply due to their own shortages and business Our strategy is vital to our long-term success. Changing strategic requirements, among other things. If these suppliers do not priorities or adding new strategic priorities could compromise develop devices that satisfy customer demands, nor deliver existing initiatives and could have a material adverse effect on our products and services on a timely basis, it could have a material business, results of operations, and financial condition. adverse effect on our business, financial condition, and results of We develop business plans, execute projects, and launch new operations. Any interruption in the supply of equipment for our ventures to grow our business. If the expected benefits from these networks could also affect the quality of our service or impede do not materialize, this could have a material adverse effect on our network development and expansion. business, results of operations, and financial condition. Apple has introduced embedded Subscriber Identification Module We are working towards the development and deployment of our (e-SIM) technology to its latest iPads. This technology, when widely new IPTV product, Ignite TV. These activities rely, in part, on certain adopted, will allow customers to switch between carriers without vendors. Should the deployment not proceed as planned, or should the use of a carrier-provided SIM card. If Apple continues to the product not operate as intended, our business and financial introduce, or other major device vendors do introduce, e-SIM to results could be adversely affected. This may result in subscriber their mobile products in Canada, this could have an adverse effect losses, lower Cable revenue, and unfavourable customer satisfaction. on our business, churn, and results of operations, as many customers without subsidized devices are under no contractual RELIANCE ON THIRD-PARTY SERVICE PROVIDERS obligation to remain with Rogers. We have outsourcing and managed service arrangements with third parties to provide certain essential components of our business INCREASE IN BRING YOUR OWN DEVICE (BYOD) operations to our employees and customers, including payroll, CUSTOMERS certain facilities or property management functions, call centre With the CRTC’s Wireless Code limiting wireless term contracts to support, certain installation and service technicians, certain network two years from three years, the number of BYOD customers with and IT functions, and invoice printing. Interruptions in these services no-term contracts has increased. These customers are under no could adversely affect our ability to service our customers. contractual obligation to remain with Rogers, which could have a material adverse effect on our churn and our Wireless revenue. ACQUISITIONS, DIVESTITURES, OR INVESTMENTS Acquiring complementary businesses and technologies, UNLOCKING OF WIRELESS DEVICES developing strategic alliances, and divesting portions of our Effective December 1, 2017, the Wireless Code required us to sell business are often required to optimally execute our business only unlocked devices and to unlock devices owned by our strategy. Some areas of our operations (and adjacent businesses) subscribers for free, should they request it. As a result of this, are subject to rapidly evolving technologies and consumer usage subscribers will not be as restricted to a single wireless service and demand trends. It is possible that we may not effectively provider as previously. If customers increasingly switch providers, forecast the value of consumer demand or risk of competing this could have an effect on our churn and our Wireless revenue. technologies resulting in higher valuations for acquisitions or missed opportunities. INVENTORY OBSOLESCENCE Services, technologies, key personnel, or businesses of companies Our inventories balance mainly consists of wireless devices and we acquire may not be effectively integrated into our business or mobile data devices, which generally have relatively short product service offerings, or our alliances may not be successful. We also lifecycles due to frequent new device introductions. If we cannot may not be able to successfully complete certain divestitures on effectively manage inventory levels based on product demand, this satisfactory terms, if at all. may increase the risk of inventory obsolescence.

ORGANIZATIONAL STRUCTURE AND TALENT ACCESS TO PROGRAMMING RIGHTS The industry is competitive in attracting and retaining a skilled Competition is increasing for content programming rights from workforce. Losing certain employees or changes in morale due to a both traditional linear television broadcasters and online restructuring or other event could affect our revenue and competitors. Online providers are moving towards self-made, self- profitability in certain circumstances. hosted exclusive content, such that traditional broadcasters may not gain access to desirable programming. Additionally, if DEPENDENCE ON CERTAIN KEY INFRASTRUCTURE AND broadcasters and distributors sign longer-term agreements to WIRELESS DEVICE VENDORS secure programming rights, this could affect the availability of Our wireless business has relationships with a relatively small desirable programming rights and result in lower revenue due to a number of essential network infrastructure and device vendors. We lack of access to these rights.

76 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 77 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT by operating activitiesdividends, to which pay interest, reducespurposes, including principal other funds financial amounts, operations; available and 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 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, particularlyINCOME TAXES a AND 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 recordedliabilities significant and amounts currentamounts of income based deferred tax on substantively expense, income enactedat income and the tax tax relevant calculated rates time. A in these legislativematerial effect change effect in on these the rates amounts recorded could and have payable a inWe the future. provide for incomeavailable and indirect information taxesprovided based and for on these all believemany items. currently cases, however, The that requires calculation 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, liabilities, amountcircumstances, result and in of provisions, the assessment and current of interest could, and and in penalties. While certain deferred weamounts believe of tax, we our business isrequired have complex in and interpreting significant how paid judgment tax is legislationus. and and regulations apply provided to for adequate FINANCIAL RISKS CAPITAL COMMITMENTS, LIQUIDITY, DEBT, AND INTEREST PAYMENTS Our capital commitmentsimportant and consequences including: financing obligations• could requiring have us to dedicate a substantial portion of cash provided • 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 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 DECLINE OF PAY TELEVISION SUBSCRIBERS INThe CANADA number of paydecline. television Other households video offerings in available Canadadirect-to-consumer to continues subscription consumers and (for to free example, services), ashave well contributed as piracy, tohave this a trend. material adverse If effect on this our results decline of operations. continues, it could CHANNEL UNBUNDLING Recent CRTC regulatorycertain decisions of havein our been Media unfavourable aprogramming television to properties challengingimplementation and package of operating have flexiblethis channel resulted unbundling year environment. packaging but took onlyceased place CRTC-mandated to impacted operate and earlier a G4 on few August 31, of 2017. our the services. As a result, required we INCREASING PROGRAMMING COSTS Acquiring programming is thecommitment in single our most Cable significant televisionfor business purchasing and is Media a materialprogramming cost rights television to contenttraditional and properties. popular linear properties from television Increasedcontinue both broadcasters to and competition increaseprogramming online costs for competitors the could adversely costour affect business the if of operating we results are programmingthrough unable of to advertising rights. recover programming revenue Higher investments reflect and the market. subscription fee increases that MANAGEMENT’S DISCUSSION AND ANALYSIS

LITIGATION RISKS OTHER CLAIMS There are certain other claims and potential claims against us. We – do not expect any of these, individually or in the aggregate, to have In 2004, a class action was commenced against providers of a material adverse effect on our financial results. wireless communications in Canada under the Class Actions Act (Saskatchewan). The class action relates to the system access fee OUTCOME OF PROCEEDINGS wireless carriers charge to some of their customers. The plaintiffs The outcome of all the proceedings and claims against us, are seeking unspecified damages and punitive damages, which including the matters described above, is subject to future would effectively be a reimbursement of all system access fees resolution that includes the uncertainties of litigation. It is not collected. possible for us to predict the result or magnitude of the claims due In 2007, the Saskatchewan Court granted the plaintiffs’ application to the various factors and uncertainties involved in the legal to have the proceeding certified as a national, “opt-in” class action process. Based on information currently known to us, we believe it where affected customers outside Saskatchewan must take specific is not probable that the ultimate resolution of any of these steps to participate in the proceeding. In 2008, our motion to stay proceedings and claims, individually or in total, will have a material the proceeding based on the arbitration clause in our wireless adverse effect on our business, financial results, or financial service agreements was granted. The Saskatchewan Court directed condition. If it becomes probable that we will be held liable for that its order, in respect of the certification of the action, would claims against us, we will recognize a provision during the period in exclude customers who are bound by an arbitration clause from which the change in probability occurs, which could be material to the class of plaintiffs. our Consolidated Statements of Income or Consolidated Statements of Financial Position. In 2009, counsel for the plaintiffs began a second proceeding under the Class Actions Act (Saskatchewan) asserting the same claims as the original proceeding. If successful, this second class OWNERSHIP RISK action would be an “opt-out” class proceeding. This second CONTROLLING SHAREHOLDER proceeding was ordered conditionally stayed in 2009 on the basis Rogers is a family-founded, family-controlled company. Voting that it was an abuse of process. control of Rogers Communications Inc. is held by the Rogers At the time the Saskatchewan class action was commenced in Control Trust (the Trust) for the benefit of successive generations of 2004, corresponding claims were filed in multiple jurisdictions the Rogers family. The beneficiaries of the Trust are a small group across Canada, although the plaintiffs took no active steps. The of individuals that are members of the Rogers family, several of appeal courts in several provinces dismissed the corresponding whom are also directors of the Board. The trustee is the trust claims as an abuse of process. The claims in all provinces other than company subsidiary of a Canadian chartered bank. Saskatchewan have now been dismissed or discontinued. We have As at December 31, 2017, private, Rogers family holding not recognized a liability for this contingency. companies controlled by the Trust owned approximately 91% of our outstanding Class A Shares (2016 – 91%) and approximately 911 FEE 10% of our Class B Non-Voting Shares (2016 – 10%), or in total In June 2008, a class action was launched in Saskatchewan against approximately 27% of the total shares outstanding (2016 – 27%). providers of wireless communications services in Canada. It involves Only Class A Shares carry the right to vote in most circumstances. allegations of breach of contract, misrepresentation, and false As a result, the Trust is able to elect all members of the Board and advertising, among other things, in relation to the 911 fee that had to control the vote on most matters submitted to a shareholder been charged by us and the other wireless telecommunication vote. providers in Canada. The plaintiffs are seeking unspecified damages and restitution. The plaintiffs intend to seek an order certifying the proceeding as a national class action in CONTROLS AND PROCEDURES Saskatchewan. We have not recognized a liability for this DISCLOSURE CONTROLS AND PROCEDURES contingency. We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as at CELLULAR DEVICES December 31, 2017, under the supervision and with the In July 2013, a class action was launched in British Columbia against participation of our management, including the Chief Executive providers of wireless communications in Canada and Officer and Chief Financial Officer, pursuant to Rule 13a-15 manufacturers of wireless devices. The class action relates to the promulgated under the US Securities Exchange Act of 1934, as alleged adverse health effects incurred by long-term users of amended. Based on this evaluation, our Chief Executive Officer and cellular devices. The plaintiffs are seeking unspecified damages Chief Financial Officer concluded that our disclosure controls and and punitive damages, effectively equal to the reimbursement of procedures were effective at that date. the portion of revenue the defendants have received that can reasonably be attributed to the sale of cellular phones in Canada. We have not recognized a liability for this contingency.

78 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 79 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT the risks related to recognizing revenue under IFRS 15; risks associated withand the five-step revenue recognition model; recognition system to ensure theare inputs, complete processes, and accurate. and outputs CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES There were noreasonably changes likely in 2017 tofinancial reporting. that materially materially affect, affected, our orWe internal are continue controls to implementand over a additions plan thatreporting to as will a require result our of modifications thefrom upcoming transition existing contracts to IFRS with 15, internalperiods Revenue customers, beginning on control or effective after January forrequired over 1, 2018. financial as Changes financial will reports also arecognition be for accounting result system enabling of usWe to the comply believe with these IFRS implementation changes 15. internal will of represent controls a a over material newdesigned financial change in revenue reporting. to our Therecognition address controls requirements. We are risks are being performingand post- pre-implementation associated implementation reviews to with ensuredata the the system necessary captures all and newmaterial that errors. revenue it As a iscontrol result, over designed we financial reporting will appropriately in modify 2018 to• as and follows: prevent add we to will augment our our internal risk assessment process to take• into account we will develop and implement controls designed to• address we will implement controls surrounding our new revenue MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 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 out 31, in 2017, the based Internal Control onby – the Integrated the criteria Framework Committee (2013) 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 financialreport have reporting is issued as included ofStatements an filed in on December SEDAR our (sedar.com). 31, 2017 2017. AuditedAll This internal Consolidated control systems, however, Financial 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’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 • Innovation, Science and Economic Development Canada (ISED provided by other carriers to protect the interests of users and has Canada) on behalf of the Minister of Innovation, Science and forborne from regulating them. Regulations can and do, however, Economic Development; and affect the terms and conditions under which we offer these • the CRTC, under the Telecommunications Act and the services. Broadcasting Act (Canada) (Broadcasting Act). SPECTRUM LICENCES Regulation relates to the following, among other things: ISED Canada sets technical standards for telecommunications • wireless spectrum and broadcasting licensing; under the Radiocommunication Act (Canada) • competition; (Radiocommunication Act) and the Telecommunications Act. It • the cable television programming services we must, and can, licences and oversees: distribute; • the technical aspects of the operation of radio and television • wireless and wireline interconnection agreements; stations; • rates we can charge third parties for access to our network; • the frequency-related operations of cable television networks; • the resale of our networks; and • roaming on our networks and the networks of others; • awarding and supervising spectrum for wireless communications • ownership and operation of our communications systems; and 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, BILLING AND CONTRACTS and lawful access. 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 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. There are no restrictions on the number of non-voting shares that The CRTC is also responsible under the Telecommunications Act may be held by non-Canadians at either the holding company or for the regulation of telecommunications carriers, including: the licensee company level. Neither the Canadian carrier nor its • Wireless’ mobile voice and data operations; and parent may be otherwise controlled in fact by non-Canadians. • Cable’s Internet and telephone services. 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.

80 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 81 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WIRELESS 600 MHZ SPECTRUM LICENCE BAND On August 14, 2015,the ISED Canada reallocation released of amobile spectrum decision regarding licences services. inspectrum Canada the licences as will 600 the MHzauction US, reallocate that following band the the concluded for US in600 600 same MHz 2017. MHz band TV spectrum incentive amount that channelswill will of be currently be given auctioned using a for mobile the provided new services with channel a in minimum the ofCertain new 18 allotment months to plan complete Rogers and thetransitioned. will transition. be over-the-air Rogersconsultation TV during participated channels thestructure of fall will the in of auctionreleased outlined need 2017 on by the August addressing ISED 19, toauction in the 2017. is its written A proposed call be anticipated decision for2019. in on comments industry 2018 the with structure the of auction the likely to3.5 GHZ occur BAND POLICY in CHANGES In December 2014, ISED Canada released3.5 its GHz policy spectrum changes band. to Rogers the Wireless has a Partnership 50% which interest inMHz holds the of (on Inukshuk 3.5 GHz average) spectrum betweenThe in most 100-175 3.5 major urban GHz marketscurrently in band Canada. only will licensed beestablishment for reallocated of fixed for a wirelessmobile mobile new access services services in band will Canada). plan (itband be The and will is the eventually licensing subject be frameworklicensees relicensed of will on for a be a permitted future flexible-usewill to basis consultation. implement determine whereby fixed The the and/or extent mobilegeographic to area. services which in the they band in a given CANADIAN ANTI-SPAM LEGISLATION Canada’s anti-spamDecember 15, 2010 legislation and cameexception into of force was those on July sectionsinstallation 1, passed of of 2014, with the computer the Actforce into programs related on or to January software, law thecome 15, which unsolicited into 2015. came place on A into underdeferred private pending the right further legislation study. of effectivewith We action this July believe legislation. that 1, we are was 2017, in was to compliance fund design, and assessment criteria,proceeding were during addressed 2017. in The a decisionin follow-up on these 2018. items is Implementationfunding anticipated level will of occurincreasing $100 by thereafter million $25 with in millionreach an annually the a annual cap over first of maximum the $200 yearyears million, following four with and of the four five incremental contingent implementation, increases years on in to a to ensure review it of is the being fund managed inpurpose. efficiently the Funds and third will is year be achieving generated its bylevy intended extending on a wireline percent and of wireless revenue noted Internet and that texting the revenue. The revenuecap CRTC percent in charge year atrevenue five the percent charge. would $200 be million annual approximately theThe same CRTC also as established therelated regulatory to current measures wireless to services address accessibilityand for issues online persons tools with for disabilities that consumers were to implemented in easily 2017. manage their data usage 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. • fixed and mobile wireless voice services. Designated highapproximately $100 cost million0.60% in local levy subsidies on in wirelinedecision, voice the 2017 and CRTC wireless determined collected serving that voicewill by the services current a be local revenue. areas voice phased In subsidy access its out, service received is exceptoccur unavailable, where in and reliable 2017 asubsidy. broadband to follow-up proceeding establish Internet would the specificsTo of assist in the extending broadband phase-out intolocations, under-served of rural and the the remote mechanism. CRTC The specifics will of the establish fund, including a guiding principles, new broadband funding 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; CRTC REVIEW OF BASIC TELECOMMUNICATIONS SERVICES On April 9, 2015, the2015-134. CRTC issued Through Telecom Notice an ofthree-week Consultation extensive public hearing proceeding in April culminating 2016,telecommunications the with CRTC examined services a which meaningfully Canadians in requireensuring the to the digital availability participate services economy of to and affordable all Canadians.proceeding the basic The on telecommunications CRTC’s December CRTC 21, releasedCRTC role 2016 2016-496. its in The in decisions CRTC Telecom in set RegulatoryCanadians, as the in Policy its urban universal areas service as objective wellaccess that as to in voice rural services and and remote broadbandboth areas, Internet have access services, fixed on successful achievement and of this mobile objective,several the criteria, including: CRTC wireless has established • networks. 90% To of measure Canadian residential the 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 beOn with June a 29, the to 2012, foregoing Bill resident C-38passed amending the into Telecommunications Canadian 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

Until the future consultation is completed and the related decisions result in more meaningful choices for Canadian consumers, are released, all existing licences that will be renewed will be especially those with low incomes. The specific issue is to limited to the provision of fixed services. Licences will be renewed reconsider the exclusion of public Wi-Fi networks from the where licensees have satisfied all of their conditions of licence and definition of ‘home network’ that disqualifies such networks from renewed licences will have a one-year term. On completion of the roaming rights. The proceeding is to consider whether the impact consultation process and release of related decisions, renewed on investment could be mitigated by imposing conditions, such as licensees will have a high expectation of receiving new licences for ensuring that roaming by customers of providers who offer service 10 or 20 years (depending on consultation outcome). Spectrum primarily over Wi-Fi would be incidental rather than permanent by, associated with existing licences that are not renewed by ISED for example, limiting roaming in amount, subjecting roaming Canada will be made available on a first-come, first-served basis services to a different tariffed wholesale rate, or both. The using an application process. reconsideration is to be completed no later than March 31, 2018. Rogers submitted its comments and reply comments in the WHOLESALE DOMESTIC WIRELESS ROAMING RATES proceeding on September 8, 2017 and December 1, 2017, TERMS & CONDITIONS AND RATES respectively. On June 19, 2014, the federal government enacted legislation to cap wholesale domestic wireless roaming rates carriers can charge TRANSFERS, DIVISIONS, AND SUBORDINATE LICENSING to one another at amounts no higher than the average rates carriers OF SPECTRUM LICENCES charge their own retail customers. The legislation also provided the In June 2013, ISED Canada released Framework Relating to CRTC with the power to set domestic roaming rates between Transfers, Divisions and Subordinate Licensing of Spectrum carriers, regardless of the formula. The CRTC conducted a review Licences for Commercial Mobile Spectrum. The Framework lays into wireless roaming rates and the state of wireless wholesale out the criteria ISED Canada will consider and the processes it will competition with a public hearing, which concluded in early use when it reviews spectrum licence transfers, including October 2014. prospective transfers that could arise from purchase or sale options and other agreements. Key items to note are that: On May 5, 2015, the CRTC released its decision on the regulatory • ISED Canada will review all spectrum transfer requests, and will framework for wholesale mobile wireless services (Telecom not allow any that result in “undue spectrum concentration” and Regulatory Policy 2015-177). The CRTC determined it is necessary reduced competition. Decisions will be made on a case-by-case to regulate the rates that Rogers Communications and two of its basis and will be issued publicly to increase transparency; and competitors ( and Telus Communications) charge • licensees must ask for a review within 15 days of entering into other Canadian wireless carriers for domestic GSM-based any agreement that could lead to a prospective transfer. ISED wholesale roaming. The CRTC directed Rogers, Bell, and Telus to Canada will review the agreement as though the licence transfer each file proposed cost-based tariffs for wholesale roaming on that could arise from it has been made. November 4, 2015. Pending its final determination on the proposed tariffs, the CRTC approved, on an interim basis, a CRTC WIRELESS CODE maximum rate for each of GSM-based voice, text, and data In June 2013, the CRTC issued its Wireless Code. The Wireless wholesale roaming provided by Bell, Rogers, and Telus across their Code imposes several obligations on wireless carriers, including respective networks to other Canadian wireless carriers. This rate is maximum contract term length, roaming bill caps, device unlocking equal to the highest rate charged by each of Rogers, Bell, and Telus requirements, and contract summaries. It also lays out the rules for to any other Canadian wireless carrier for each of GSM-based device subsidies and early cancellation fees. Under the code, if a voice, text, and data wholesale roaming as of the date of the customer cancels a contract early, carriers can only charge the decision. These rates were replaced when the CRTC gave interim outstanding balance of the device subsidy they received, which approval to the proposed cost-based tariffs filed by the carriers on decreases by an equal amount every month over no more than 24 December 3, 2015 and made these interim rates effective months. This effectively makes the maximum contract length two November 23, 2015. The CRTC process to establish final rates years. remains underway. The CRTC committed to a review of the Wireless Code’s The CRTC further determined that it is not appropriate to mandate effectiveness within three years of its implementation. In Telecom wholesale MVNO access. Notice of Consultation CRTC 2016-293, released on July 28, 2016, Finally, the CRTC determined that the regulatory measures the CRTC called for comments on the effectiveness of the Wireless establishedinthedecisionwouldremaininplaceforaminimumof CodeandhowtheWirelessCodeshouldbeupdatedtoreflectthe five years, during which time the CRTC will monitor competitive evolution of the wireless market since the Wireless Code’s conditions in the mobile wireless market. implementation. An oral hearing began on February 6, 2017. On July 20, 2017, prompted by Order in Council P.C. 2017-0557, On June 15, 2017, the CRTC released its decision on the three-year the CRTC initiated a proceeding (Telecom Notice of Consultation review of the CRTC Wireless Code of Conduct that came into effect CRTC 2017-259, Reconsideration of Telecom Decision 2017-56 in December 2013 (Telecom Regulatory Policy CRTC 2017-200). regarding final terms and conditions for wholesale mobile wireless The CRTC determined that as of December 1, 2017, all individual roaming service) to reconsider its earlier decision maintaining the and small business wireless service customers will have the right to integrity of domestic roaming agreements and instead consider have their cellular phones and other mobile devices unlocked, free expanding the scope of the wholesale roaming regime to explore of charge, upon request. In addition, all newly purchased devices innovative business models and technological solutions that could must be provided unlocked from that day forward. The CRTC also

82 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 83 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT CRTC REVIEW OF WHOLESALE WIRELINE TELECOMMUNICATIONS SERVICES In October 2013,telecommunications the essential services CRTC rulings initiated2008. it The its released review in planned March determinedwhat review which terms of wireline and services, the carriers must and conditions, make under facilities-based availableproviders, such to telecommunications as other resellers. Extensive telecommunications submissions2014 service were filed leading during toDecember a 4, 2014. two-week public hearingOn that July 22, concluded 2015, the on framework CRTC released for its decision wholesale onPolicy 2015-326). the The wireline regulatory CRTC determined services thataccess wholesale high-speed services, (Telecom which Regulatory areservices, such used as local to phone, supportcontinue television, to and retail be Internet mandated. competition access, The would for services, provision of however, provincially would aggregated nophased longer be out mandateddisaggregated and in service would be withcentral conjunction offices connections and with at cable companyimplement telephone head-ends. the disaggregated The company requirement wholesale to will implementation high-speed include access of services makingRegulated rates them a will available continuecost to studies. over be based FTTH on access long-run increment facilities. WHOLESALE INTERNET COSTING AND PRICING On March 31, 2016,of the costing CRTC inputs released and its thehigh-speed application decision access process on services for the existing that wholesale provide review forof a interconnection, single provincial but point whichfacilities are not (Telecom availabledetermined over that FTTH Decision access wholesaletelecom providers telecom CRTC were rateswholesale no paid 2016-117). longer high-speed appropriate, by accessstudies and The service competitive with required providers proposed all determined rates CRTC to for that file final all newapproved approval. wholesale were cost The to Internet CRTC be rates madeThe further interim CRTC that as will of were assess theapply the currently date when extent of new the to cost decision. wholesale which, studies high-speed if are access at submitted service all,filed in rates. retroactivity support On will our of June revised 30,proposed new rates. 2016, we cost studiesOn with October 6, the 2016,significantly the CRTC, reducing CRTC existing which issued interim Telecomtariff rates detail Order for component 2016-396, the of our capacity wholesaleapproval charge high-speed access of service final pending immediately. rates. The CRTC Theretroactivity will interim will assess rate apply the whenrates reductions extent are wholesale set to took high-speed on which, effect access2017 a if with final service additional basis. at process Information all, to was follow. filed A on decision October is 30, anticipated in Of these criteria, thewill degree generally to carry which thethat data most all is content weight. and treated The applications agnostically overriding willZero-rating be expectation of treated is account in a management neutral functionsInternet manner. data (e.g., usage monitoring or of thepermitted. payment of bills online) will generally be 2018. treated equally regardless of its source or nature); content providers; arbitration according to ISED Canada arbitration rules will begin. broadcasting certificates mustwhere share technically towers feasible, at and commercial rates; antenna and sites, On May 18,Notice 2016, of the Consultationissues CRTC CRTC surrounding initiated 2016-192) the aCanadian to ISPs use proceeding (i.e., examine zero-rating (Telecom or the oftraffic discounting of policy differential retail by Internet pricing data provision Canadian practices of Internet Internet by application data service plans. made providers) Thispractices proceeding by related used stems to from by severalservice an Videotron the parties when tocommenced concerning offering its the its the week Unlimited mobileNovember of 4, pricing Music 2016. October wireless 31, 2016 customers. andOn The concluded April on oralconsultation. 20, In hearing 2017, its2017-104), the the decision CRTC set CRTC (Telecomdetermine out whether the released Regulatory a evaluation specific criteria Policywith differential its it pricing CRTC will practice subsection decision apply complies case-by-case to 27(2) in basis, as follows: of the • the the degree to Telecommunications which the treatment Act of data is• on agnostic (i.e., whether data a the is offering is exclusive to• certain customers the or impact on certain Internet• openness and whether innovation; there and is financial compensation involved. DIFFERENTIAL PRICING RELATED TO INTERNET DATA PLANS CABLE In Telecom Regulatory Policy 2015-177,CRTC released determined in May that 2015, itwholesale the would tariffs not for mandatedetermined tower that or and its require existing site powers general address sharing. and tower and At processes site are the sharing sufficientconditions. disputes same to related As to time, rates, it a terms,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 • the timeframe for negotiating agreements is 60 days, after which 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 licences, radio licences, and TOWER SHARING POLICY determined that for familyaccount holder or must, shared by default, plansoverage be and (multi-line the data one plans), who roaming the ($50 consents charges and to $100 beyond data per the month,may, established respectively). however, caps Wireless allow service account providers holdersfamily to or authorize shared other plan usersalso to on consent a made to clear additionalaccount charges. that basis, The in regardless CRTC ofplans all and the individual instances, number lines on the of the account. devices, caps for apply multi-line on a per MANAGEMENT’S DISCUSSION AND ANALYSIS

On September 20, 2016, the CRTC released a follow-up decision Telecommunications Act for a vertically integrated company that (Telecom Decision CRTC 2016-379) to Telecom Regulatory Policy offers a Mobile TV service to exempt this service from standard 2015-326, addressing the technical implementation of new, monthly wireless data caps and usage charges generally applicable disaggregated, high-speed access TPIA, a service that will provide to its wireless service. access to FTTH facilities as ordered in the CRTC’s July 22, 2015 ruling. The decision is consistent with the positions submitted by On March 19, 2015, the CRTC released the third of its decisions Rogers in our filings. Proposed tariffs and supporting cost studies related to its Let’s Talk TV proceeding. The CRTC ordered for the new service were filed on January 9, 2017. Further distributors to offer customers an option for a small basic service information was filed on October 30, 2017 with additional process consisting only of Canadian local channels (local radio is optional), to follow. A decision is anticipated in 2018. national mandatory services, community and provincial legislature channels, and, should they wish, US 4+1 networks beginning March 1, 2016. The retail rate for this entry-level service will be CRTC REVIEW OF LOCAL AND COMMUNITY capped at $25 per month (excluding equipment). The CRTC PROGRAMMING adopted phased-in requirements for selling channels to customers On September 14, 2015, the CRTC announced a proceeding to “à la carte” and as part of “pick-packs”. All channels above the basic review the policy framework for local and community programming tier must be offered on an à la carte basis or in smaller, reasonably (Broadcasting Notice of Consultation 2015-421). Comments were priced packages by March 1, 2016. By December 1, 2016, they due October 29, 2015 and an oral hearing concluded on must be offered in both forms. As a BDU, we will be permitted to February 3, 2016. On June 15, 2016, the CRTC released its decision continue to offer our existing basic service and programming regarding local and community television policy (Broadcasting packages. The CRTC will also revise its existing “preponderance” Regulatory Policy CRTC 2016-224). The CRTC created a new model rule so that consumers will have to be offered, but will not have to for BDU contributions to Canadian programming that took effect receive, a majority of Canadian services. on September 1, 2017. Annual contributions will remain at 5% of annual gross broadcasting revenues; however, of that amount, in all The CRTC also proposed several changes to the Wholesale Code licensed cable systems, up to 1.5% (rather than the previous 2%) (formerly the (VI) Code) addressing, amongst can be used to fund community channel programming. Of this other matters, penetration-based rate cards and minimum revenue, 0.3% must now go to a newly-created Independent Local guarantees. All licensed programmers and BDUs will be required News Fund for independently-owned local TV stations, and the to comply with the Wholesale Code, which came into effect on remaining funding will continue to go to the Canada Media Fund January 22, 2016. and independent production funds. This decision provides the The March 19 decision also addressed rules for distribution of flexibility for BDUs that operate community channels in large foreign services authorized for distribution in Canada, including markets (Montreal, Toronto, Edmonton, Calgary, and Vancouver) to requirements that foreign services make their channels available “à now direct their community channel revenues from those markets la carte” and in “pick-packs” or in smaller pre-assembled packages to fund either community channel programming in smaller and abide by the Wholesale Code. Access rules for VI-owned markets, or to fund local news on TV stations (such as City, in the services and independent services, channel packaging, and case of Rogers). Rogers has closed its Toronto community channels buy-through rules for multicultural services were also addressed. and redirected these revenues. On March 26, 2015, in the final decision related to Let’s Talk TV, the TELEVISION SERVICES DISTRIBUTION CRTC announced plans to establish a Television Service Provider On October 24, 2013, the CRTC launched a broad-based public (TVSP) Code of Conduct to govern certain aspects of the consultation (Let’s Talk TV) on the subject of television. The relationship between TVSPs and their customers as well as to allow consultation covered three broad themes, asking what consumers consumers to complain to the Commissioner for Complaints for think about: Telecommunications Services about their providers. On January 8, • the television programming available to them; 2016, the CRTC issued the final version of the TVSP Code, which • the reception of television programming from service providers came into effect on September 1, 2017. Upon launch of the TVSP and other sources; and Code, the Commissioner for Complaints for Telecommunications • whether they have enough information to make informed Services changed its name to Commission for Complaints for choices and seek solutions if they are not satisfied. Telecom-television Services (CCTS). This decision also introduced new requirements related to the provision of service to persons In November 2014, the CRTC released its first decision arising from with disabilities for both BDUs and broadcasters. the Let’s Talk TV hearing ordering the elimination of the 30-day cancellation provision for cable, Internet, and phone services, On March 1, 2016, the first phase of the CRTC’s small basic $25 per effective January 23, 2015. month (excluding equipment) television service mandate came into effect. Effective March 1, 2016, we offer a small basic service On January 29, 2015, the CRTC released decisions requiring local consisting of Canadian local channels, national mandatory services, stations to continue over-the-air transmission under the same community and provincial legislature channels, and the US 4+1 regulatory regime currently in place and maintaining simultaneous networks. We also offer smaller, reasonably priced packages of substitution requirements, except for the NFL Super Bowl, specialty and premium channels. On December 1, 2016, we began beginning in 2017. In a related decision released the same day, the offering all specialty and premium channels on an “à la carte” basis CRTC found that it would be an undue preference under the as well.

84 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 85 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT 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 Call 2017- proceeding forin comments (Broadcasting on Notice Council’s the Governor distribution of models) request to report on forof the distribution programming model a or that models through are whom report Canadians likely will on toextent access to exist which that these future programming; in modelsthat will and the ensure programming the is a future; capable vibrant domestic of howand market supporting and the distribution continuedlanguages, creation, of production, including Canadianprogramming. The original report programming, is due entertainment nofiled in later its Phase than I June and both and 1, Phase 2018.February II Rogers 13, official information submissions 2018, on respectively. December 1, 2017 and On May 18, 2017, the2017-151, CRTC released Broadcasting approving Decision CRTC licences five-year (six renewalsVICELAND, City G4Tech, of Outdoor over-the-air Life,renewals our FX, English were and also FXX). group-based stations, Five-yearlicences approved licence Sportsnet for (Sportsnet our 360, service(RogersonDemand).Tocoincidewiththeexpirydateof mainstream and sports Sportsnet services the One) broadcasting and licence forRegional, our our discussed new below, on-demand discretionary theover-the-air service, broadcasting ethnic OMNI licences OMNI forthree-year television our period in licences five this Broadcasting were Decision. renewed forIn Broadcasting a Decision CRTCthe 2017-152, CRTC released also the approved sameoperate our day, a application discretionary seeking service a calledoperate OMNI new Regional, pursuant licence which to to would acarriage section 9(1)(h) on order, granting the$0.12/subscriber/month it basic mandatory for service aissued with three-year a term. a call The regulatedcompeting (Broadcasting CRTC applications affiliation Notice to further determine fee of whetherits Consultation of OMNI 9(1)(h) should 2017-154) designation retain after for threeshould be years granted or to whether another applicant. the designation On August 14, 2017, theMinister Governor of in Canadian Council, Heritage on through the Order1060, advice in directed of Council the P.C. the 2017- CRTCdecisions to issued reconsider May itsthat, group 15, among licence other 2017 renewal changes, for loweredbroadcasters the large must amount television spend that some broadcasters CRTC on major Programs is of tocontributions National “consider Interest. are The howprograms made of national it interest, to music canshort-form programming, the short documentaries.” be films, and creation Rogers ensuredtheir and and that other presentation significant submissions broadcastersOctober 31, filed of 2017. Reply in comments wereafter filed which on the February CRTC the 2, will 2018, render a decision. reconsideration proceeding on LICENCE RENEWALS In a proceeding initiatedCRTC 2016-225 by released Broadcasting June 15, Noticeour 2016, of Rogers group-based Consultation sought renewal licences of Sportsnet 360, (six VICELAND, G4Tech, City Outdoor Life,five FX, over-the-air and FXX), English our over-the-airmainstream stations, sports ethnic licencesalso OMNI (Sportsnet sought and approval television Sportsnet ofoperate a an One). discretionary licences, application service We called seekingoperate OMNI Regional, a pursuant and which to new would a licencecarriage our section on to 9(1)(h) the basic order service grantinghearing with it was a regulated mandatory held affiliation during fee.written the An reply oral was week filed of on January November 9, 28, 2017. 2016, a final COPYRIGHT RETRANSMISSION OF DISTANT SIGNALS Pursuant to section 31(2)providers are of permitted the to Copyrightover-the-air retransmit Act, television programming television within signals service distant regime. as Rates partestablished of for through a negotiation the compulsoryDistributors or and licensing distribution content set providers by were ofrate unable the for to the the Copyright agree distribution on of Board. current a programming distant new signals agreement after are in theCopyright expiration 2013. of Board, the A proceedingproceeding which was began continued initiatedexpected on into by in 2018. the November 2016 23, andThe 2015. 2017 Collectives The (content withthat providers) is a have approximately proposed decision would double a have the royalty a significant current rate financialcosts rate, impact of approximately on which, $30 Rogers million if with per additional year. certified, MEDIA On May 24,(Broadcasting 2016, Notice of the Consultation CRTCa CRTC 2016-197) released hearing stating a that willapplications notice be of of held consultation commenced in BDUs, on consideration September including 7, ofBDU 2016, Rogers. the reviewed licensees the license in The practicespackaging regard renewal of requirements described all hearing, to above that theMarch which came 1, small 2016. into effect basic on service andOn November flexible 21, 2016, theCRTC CRTC released Broadcasting Decision 2016-458,December 1, 2016 renewingCRTCestablishedwhatitcalledasetofbestpracticesforBDUsthat to November 30, Rogers’serve 2017. to In promote BDU the choicemonitor decision, all for the of licences Canadians these andoffer practices, the stated including from small that how basic itoptions, BDUs service would promote and and and pick-and-pay willexamines and the small take renewal package of any thefull licenses renewal necessary for term. BDUs remedial again Prioroccurred in to action 2017 the for in when a 2017administrative license extension it October, renewal to hearing May7-year term that 31, Rogers’ renewal is 2018. anticipated in A early cable 2018. decision on license the full received an MANAGEMENT’S DISCUSSION AND ANALYSIS

Other Information ACCOUNTING POLICIES capitalized amounts are calculated based on estimated costs of projects that are capital in nature, and are generally based on a CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS per-hour rate. In addition, interest costs are capitalized during development and construction of certain property, plant and Management makes judgments, estimates, and assumptions that equipment. Capitalized amounts increase the cost of the asset and affect how accounting policies are applied, the amounts we report result in a higher depreciation expense in future periods. in assets, liabilities, revenue, and expenses, and our related disclosure about contingent assets and liabilities. Significant IMPAIRMENT OF ASSETS changes in our assumptions, including those related to our future Indefinite-life intangible assets (including goodwill and spectrum business plans and cash flows, could materially change the and/or broadcast licences) are assessed for impairment on an amounts we record. Actual results could be different from these annual basis, or more often if events or circumstances warrant, and estimates. finite-life assets (including property, plant and equipment and These estimates are critical to our business operations and other intangible assets) are assessed for impairment if events or understanding our results of operations. We may need to use circumstances warrant. The recoverable amount of a cash additional judgment because of the sensitivity of the methods and generating unit (CGU) involves significant estimates such as future assumptions used in determining the asset, liability, revenue, and cash flows, terminal growth rates, and discount rates. If key expense amounts. estimates differ unfavourably in the future, we could experience impairment charges that could decrease net income.

ESTIMATES FINANCIAL INSTRUMENTS FAIR VALUE The fair values of our derivatives are recorded using an estimated We use estimates to determine the fair value of assets acquired and credit-adjusted mark-to-market valuation. If the derivatives are in an liabilities assumed in an acquisition, using the best available asset position (i.e. the counterparty owes Rogers), the credit spread information, including information from financial markets. These for the bank counterparty is added to the risk-free discount rate to estimates include key assumptions such as discount rates, attrition determine the estimated credit-adjusted value. If the derivatives are rates, and terminal growth rates for performing discounted cash in a liability position (i.e. Rogers owes the counterparty), our credit flow analyses. spread is added to the risk-free discount rate. The estimated credit- adjusted value of derivatives requires assessment of the credit risk of the parties to the instruments and the instruments’ discount USEFUL LIVES rates. We depreciate the cost of property, plant and equipment over their estimated useful lives by considering industry trends and company- For all derivative instruments where hedge accounting is applied, specific factors, including changing technologies and expectations we are required to ensure that the hedging relationships meet for the in-service period of certain assets at the time. We reassess hedge effectiveness criteria both retrospectively and prospectively. our estimates of useful lives annually, or when circumstances Hedge effectiveness testing requires the use of both judgments change, to ensure they match the anticipated life of the technology and estimates. from a revenue-producing perspective. If technological change PENSION BENEFITS happens more quickly, or in a different way, than anticipated, we When we account for defined benefit pension plans, assumptions might have to reduce the estimated life of property, plant and are made in determining the valuation of benefit obligations. equipment, which could result in a higher depreciation expense in Assumptions and estimates include the discount rate, the rate of future periods or an impairment charge to write down the value. future compensation increase, and the mortality rate. Changes to We monitor and review our depreciation rates and asset useful lives these primary assumptions and estimates would affect the pension at least once a year and change them if they are different from our expense, pension asset and liability, and other comprehensive previous estimates. We recognize the effect of changes in income. Changes in economic conditions, including financial estimates in net income prospectively. markets and interest rates, may also have an impact on our pension plan, as there is no assurance that the plan will be able to earn the CAPITALIZING DIRECT LABOUR, OVERHEAD, AND assumed rate of return. Market-driven changes may also result in INTEREST changes in the discount rates and other variables that could require Certain direct labour, overhead, and interest costs associated with us to make contributions in the future that differ significantly from the acquisition, construction, development, or improvement of our the current contributions and assumptions incorporated into the networks are capitalized to property, plant and equipment. The actuarial valuation process.

86 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 87 ROGERS COMMUNICATIONS INC. nflows that are largely independent 2017 ANNUAL REPORT SEGMENTS 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 operating information performance, andreporting is segments for effective available. January which 1,Our discrete 2018. We Business”. See “Understanding intend to redefineHEDGE ACCOUNTING our We makefinancial significant instruments judgmentsassumptions qualify for in effectiveness valuation for models. determining whether hedge our accounting,INCOME TAXES AND including 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 actual income payable tax expense, or receivable, other taxes payable or IMPAIRMENT OF ASSETS 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 We amortize the cost ofestimated intangible useful assets lives. with We finiteand review lives the their over amortization methods their useful at lives, least once residual a values, We year. do(spectrum, broadcast not licences, and certain amortize brandno names) as foreseeable intangible there is limitexpected assets to to generate the net with cash periodto inflows for determine over indefinite us. that which We makerelevant these lives these judgments assets factors, assets have including are typical indefinite the life lives, cycle expected of analyzing the usagedemand asset, all and of for anticipated the changes the in asset, products theAfter market review and the of services the competitive, theit legal, asset is regulatory, and our helps other view generate. spectrum factors, that and broadcast these licences. factors do notJudgment limit is the also useful applied livesintangible in of choosing our 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 expense in pension Increase (decrease) in accrued benefit obligation Increase (decrease) Impact of 0.5% increaseImpact of 0.5% decreaseImpact of 0.25% increaseImpact of 0.25% decreaseImpact of 1 year increaseImpact of (207) 1 year decrease 237 21 (21) (25) 27 49 (52) 4 (4) 6 (6) increase 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 JUDGMENTS USEFUL LIVES AND DEPRECIATION AND AMORTIZATION METHODS Restricted share unit and deferred shareWe unit recognize plans outstanding 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-BASED COMPENSATION Stock option plans Our employeeappreciation stock rights optionoptions. (SARs) plans The to SAR attachreceive all feature a new cash-settled cash allows paymentinstead and the equal share of to exercising option previously the the holder optionShares. intrinsic granted and value to acquiring of Class elect the B Non-Voting option, to We measure stock-based compensation toWe employees at fair determine value. Non-Voting the Share price fair and optionoutstanding pricing value stock models, and options of recordmarket as all each options liabilities. period The and usingvesting liability is approach amortized is over our to the marked periodare expense Class to during using rendered, which a B employee or graded services eligible to over retire, the whichever isis period shorter. affected The to by expense the the inShares during change each date the period in period. an the price employee of is our Class B Non-Voting (In millions of dollars) Below is a summaryprimary of assumptions the effectaccrued and benefit an obligation and increase estimates pension or expense for would decrease 2017. in have the had on our Discount rate Rate of future compensation Mortality rate MANAGEMENT’S DISCUSSION AND ANALYSIS

receivable, and deferred income tax assets and liabilities and could, These transactions are measured at the amount agreed to by the in certain circumstances, result in the assessment of interest and related parties, which are also reviewed by the Audit and Risk penalties. Committee. The amounts owing are unsecured, interest-free, and due for payment in cash within one month from the date of the CONTINGENCIES transaction. Considerable judgment is involved in the determination of contingent liabilities. Our judgment is based on information NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN currently known to us, and the probability of the ultimate resolution 2017 of the contingencies. If it becomes probable that a contingent liability will result in an outflow of economic resources, we will We adopted the following IFRS amendments in 2017. They did not record a provision in the period the change in probability occurs. have a material effect on our financial statements. The amount of the loss involves judgment based on information • Amendments to IAS 7, Statement of Cash Flows, requiring available at that time. Any provision recognized for a contingent entities to provide additional disclosures that enable financial liability could be material to our consolidated financial position and statement users to evaluate cash flow and non-cash changes in results of operations. liabilities arising from financing activities. • Amendments to IAS 12, Income Taxes, clarifying the ONEROUS CONTRACTS requirements for deferred tax assets for unrealized losses on Significant judgment is required to determine when we are subject debt instruments. to unavoidable costs arising from onerous contracts. These • Amendments to IFRS 12, Disclosure of Interests in Other Entities, judgments may include, for example, whether a certain promise is clarifying the required disclosures regarding an entity’s interest in legally binding or whether we may be successful in negotiations subsidiaries, joint arrangements, and associates that are held for with the counterparty. sale, held for distribution, or classified as discontinued operations. TRANSACTIONS WITH RELATED PARTIES RECENT ACCOUNTING PRONOUNCEMENTS NOT YET We have entered into certain transactions in the normal course of ADOPTED business with related parties in which we have an equity interest. The amounts received from or paid to these parties were as follows: The IASB has issued the following new standards that will become effective in a future year and will have an impact on our Years ended December 31 consolidated financial statements in future periods. (In millions of dollars) 2017 2016 % Chg Revenue 74 50 48% IFRS 15, REVENUE FROM CONTRACTS WITH CUSTOMERS Purchases 198 189 5% (IFRS 15) Effective January 1, 2018, we will adopt IFRS 15. Our first quarter We have entered into business transactions with companies whose 2018 interim financial statements will be our first financial partners or senior officers are Directors of RCI. These Directors are: statements issued in accordance with IFRS 15. IFRS 15 supersedes • the non-executive chairman of a law firm that provides a portion current accounting standards for revenue, including IAS 18, of the Company’s legal services; and Revenue and IFRIC 13, Customer Loyalty Programmes. • the chairman of a company that provides printing services to the Company. IFRS 15 introduces a single model for recognizing revenue from contracts with customers. This standard applies to all contracts with Years ended December 31 customers, with only some exceptions, including certain contracts (In millions of dollars) 2017 2016 accounted for under other IFRSs. The standard requires revenue to be recognized in a manner that depicts the transfer of promised Printing and legal services 17 27 goods or services to a customer and at an amount that reflects the consideration expected to be received in exchange for transferring In addition, during the year ended December 31, 2016, we those goods or services. This is achieved by applying the following announced a strategic change across our publishing business such five steps: that we will focus on digital content through the Internet and mobile applications. As a result, we sold select publishing titles to 1. identify the contract with a customer; the aforementioned printing services company for $5 million. 2. identify the performance obligations in the contract; 3. determine the transaction price; We have also entered into certain transactions with our controlling 4. allocate the transaction price to the performance obligations shareholder and companies it controls. These transactions are in the contract; and subject to formal agreements approved by the Audit and Risk 5. recognize revenue when (or as) the entity satisfies a Committee. Total amounts paid to these related parties generally performance obligation. reflect the charges to Rogers for occasional business use of aircraft, net of other administrative services, and were less than $1 million IFRS 15 also provides guidance relating to the treatment of contract for each of 2017 and 2016. acquisition and contract fulfillment costs.

88 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 2 89 transition naboutthese These are not defined 2017 subsequent to 1 *** 4.8 Year ended December 31 0.2 14.3 0.20.20.2 5.6 1.9 2.0 1.20.2 1.8 3.8 (1.0) 12.6 (1.0) 6.8 transition ROGERS COMMUNICATIONS INC. Estimated effect of See “Non-GAAP Measures” for informatio 5.4 1.8 1.7 7.8 0.6 4.8 3.6 14.1 13.6 2017 2017 ANNUAL REPORT for any timingthe differences amounts between billed to the the customer. revenue recognizedSignificant and judgment isand needed obligations to of a define contractobtains the and control to of enforceable determine the when distinct rights the good or customer service. We plan to retrospectively apply IFRScomplete 15 on to the all date contracts of thatchoice initial are to not application. We restate have each madethe a prior cumulative policy effect period of presentedto initially and the applying will opening IFRS recognize balance 15certain of as practical an equity expedients adjustment as we adopted. at January 1, 2017,We subject have to implementedenable us a to comply newappropriately with allocating revenue the revenue requirements recognitionobligations of between within system IFRS individual different 15, contracts to performance We including for certain revenue have streams. throughout the had transition work period to detailed implement IFRS 15. We data have validation aIFRS team processes 15. dedicatedrequirements, in This to ensuring our team place ensuring datacommunicating our was the collection upcoming was compliance responsible changes appropriate,In with with addition, and for various this stakeholders. team determiningcontrols assisted that in system will the help developmentoperates ensure of our new as new internal intended revenueaccurate. recognition and system the related results are complete and way to compare us to other companies. rics that are impacted by the IFRS 15 conversion are presented. 4 4 3 terms under IFRS and do notmeasures, including have how standard we meanings, calculate so them. may not be a reliable As a result of IFRS 15As being defined. adopted See effective “Key January Performance 1, Indicators”. 2018,Adjusted we operating will profit retrospectively and amend our adjusted 2017 net results income in are our non-GAAP fiscal measures 2018 and financial should filings. not be considered substitutes or alternatives for GAAP measures. Amounts less than $0.1 billion; theseExcludes amounts estimated have effects been of excluded transition from of subtotals. less than $0.1 billion. *** 1 Consolidated Total revenue Total service revenue (In billions of dollars) EFFECT OF TRANSITION TO IFRS 15 Below is a summary of theall estimated of effect which of pertains transition to to our IFRS Wireless 15 segment. on Only our met key financial information for the year ended December 31, 2017, Net income Adjusted net income Wireless Service revenue The application of this new standardour will reported have Wireless significant results, impacts specifically on of with regards recognition to and the timing classificationcosts of revenue, incurred and inrecognition the treatment and acquiring of classification customercontract of contracts. revenue inception, is Theconsideration IFRS affected timing over because, 15 the of at consideration contract to requires all term performance the obligations andon in the the estimation their contract allocation based significantly of of relative that total affectequipment stand-alone and our service selling togetherwill Wireless into prices. result monthly service in arrangementscontract This fees, an inception which and that increase will aover to decrease the most course bundle to equipment of service theof revenue revenue contracts. IFRS We recognized recognized 15 do to not at affectand expect our the cash underlying application flows from economicscustomers. operations through or the which methods we transactThe with treatment of our costsaffected incurred as in IFRS acquiring 15 customer requiresas certain contracts sales contract is commissions) acquisition to costs be (such into recognized as operating an assetexpensed expenses and as amortized incurred. over time. Currently,In addition, such newConsolidated costs assets and are Statements liabilitiescontract will of asset be and Financial recognized contract liability on Position. will our be Specifically, recognized to a account Adjusted operating profit Equipment revenue Operating expenses Adjusted operating profit 2 3 4 MANAGEMENT’S DISCUSSION AND ANALYSIS

As a result of the estimated effect of transition to IFRS 15, the following key financial metrics from our Consolidated Statements of Financial Position as at December 31, 2017 will be affected: As at December 31 Estimated effect of 2017 subsequent to (In billions of dollars) 2017 transition 1 transition 2

Consolidated Total assets 28.9 1.5 30.4 Total liabilities 22.5 0.5 23.0 Shareholders’ equity 6.4 1.0 7.4

1 Excludes estimated effects of transition of less than $0.1 billion. 2 As a result of IFRS 15 being adopted effective January 1, 2018, we will retrospectively amend our 2017 results in our fiscal 2018 financial filings.

The estimated effect discussed above should be read in conjunction with note 2(g) of our 2017 Annual Audited Consolidated Financial Statements.

Free cash flow subsequent to transition their contractual cash flows. IFRS 9 contains three primary We do not expect the application of IFRS 15 to affect our free cash measurement categories for financial assets: measured at flow; however, we will amend our definition of free cash flow to amortized cost, fair value through other comprehensive income include the net change in contract asset and deferred commission (FVTOCI), and fair value through profit and loss (FVTPL). Under IFRS cost asset balances. 9, we will irrevocably elect to present subsequent changes in the fair value of our equity investments that are neither held-for-trading Key performance indicators subsequent to transition nor contingent consideration arising from a business combination We plan to begin disclosing blended average billings per user in other comprehensive income (FVTOCI with no reclassification to (ABPU) as one of our key performance indicators in the first quarter net income). For these equity investments, any impairment on the of 2018. We will use blended ABPU as a measure that instrument will be recorded in other comprehensive income, and approximates the average amount we invoice an individual cumulative gains or losses in other comprehensive income will not subscriber on a monthly basis. This measure will be similar to be reclassified into net income on disposal. blended ARPU under current results. Blended ABPU will help us Under IFRS 9, the loss allowance for trade receivables must be identify trends and measure our success in attracting and retaining calculated using the expected lifetime credit loss and recorded at higher value subscribers. We will calculate blended ABPU by the time of initial recognition. A portion of our trade receivables dividing the sum of service revenue and the transfers from contract require an incremental loss allowance in order to comply with the assets to receivables by the average total number of Wireless requirements of IFRS 9; as a result, we will recognize a $4 million subscribersforthesameperiod. decrease to accounts receivable and a corresponding decrease to retained earnings within shareholders’ equity, effective January 1, FINANCIAL INSTRUMENTS IFRS 9, (IFRS 9) 2018. In addition, the expected loss allowance using the lifetime Effective January 1, 2018, we will adopt IFRS 9. Our first quarter credit loss approach will be applied to contract assets under IFRS 2018 interim financial statements will be our first financial 15. There is no significant effect on the carrying value of our other statements issued in accordance with IFRS 9. In July 2014, the IASB financial instruments under IFRS 9 related to this new requirement. issued the final publication of the IFRS 9 standard, which supersedes IAS 39, Financial Instruments: recognition and The new hedge accounting guidance aligns hedge accounting measurement (IAS 39). IFRS 9 includes revised guidance on the more closely with an entity’s risk management strategies. IFRS 9 classification and measurement of financial instruments, new does not fundamentally change the types of hedging relationships guidance for measuring impairment on financial assets, and new or the requirement to measure and recognize ineffectiveness; hedge accounting guidance. We have made a policy choice to however, it allows more hedging strategies used for risk adopt IFRS 9 on a retrospective basis; however, our 2017 management to qualify for hedge accounting and introduces more comparatives will not be restated because it is not possible to do so judgment to assess the effectiveness of a hedging relationship, without the use of hindsight. primarily from a qualitative standpoint. This is not expected to have an effect on our reported results and will simplify our application of Under IFRS 9, financial assets are classified and measured based on effectiveness tests going forward. the business model in which they are held and the characteristics of

90 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 91 e through other case of investments, is or accounting purposes ately into net income. for accounting purposes, the ROGERS COMMUNICATIONS INC. FVTOCI with no reclassification to net income Amortized cost Amortized cost FVTPL 2017 ANNUAL REPORT 2 2 KEY PERFORMANCE INDICATORS We measure theperformance success of indicators, our which strategythese are using key a outlined numbermeasure below. our performance of performance key against We indicators ouragainst operating believe the strategy results allow as of well our as performance us peers indicators and are competitors. to The not followingIFRS measurements key appropriately and in accordance should with notany be other measure considered of performance alternatives under to IFRS. net income or TOTAL SERVICE REVENUE We useperformance total from service theseparate revenue provision from to of revenueacquired measure from services from our device to themetric manufacturers core is and our sale business our resold. customers of retailwhich Included revenue in are equipment from this also TSC werevenue by core and subtracting have the equipment to revenue Toronto from our total Blue revenue. business. Jays, We calculate total service We are implementing a processthe that requirements will of enable IFRS usto 16 to begin comply on with a a parallel lease-by-leasesystem basis. run in 2018. We under We expect both will have IASwill detailed 17 data continue validation and throughout processes that IFRS thecontinuing 16 to course assess using the of this effect 2018.financial of this As statements standard a on and our result, it consolidated estimate we of is its are not effect. We yeteffects expect possible to of disclose to the the makefinancial estimated statements. financial a adoption reliable of IFRS 16 in our 2018 consolidated commercial paper borrowings have not been designated as hedges f 1 5 nsive income and the ineffective portion of the hedge is recognized immedi (IAS 17) historically or in the future. For derivatives designated as cash flow hedges Leases Held-for-trading FVTOCI and FVTPL 4 (IFRS 16) 3 LEASES Debt derivatives Cash and cash equivalentsAccounts receivableInvestmentsBank advancesShort-term borrowingsAccounts payable Loans and receivablesAccrued liabilitiesLong-term debt Loans and receivablesBond forwardsExpenditure derivatives Available-for-sale Equity derivatives Other financial liabilities Other financial liabilities Other financial liabilities Amortized cost Other financial liabilities Other financial liabilities Amortized cost Held-for-trading Held-for-trading Held-for-trading Amortized cost Amortized cost Amortized cost FVTOCI FVTOCI Financial instrument IAS 39 IFRS 9 Financial liabilities Derivatives Financial assets adjustment to opening equity at the date of initial application. effective portion of the hedge is recognized in accumulated other comprehe and will be classified as fair value through profit and loss (FVTPL). Debt derivatives related to our senior notes and debentures haveSubsequent been changes are designated offset against as stock-based compensation hedges expense or for recovery in accounting operating purposes costs. and will be classified as fair valu Subsequently measured at fair value with changes recognized inSubsequently other measured comprehensive at amortized income. cost The usingThe the net effective derivatives change interest can subsequent method. be to in initial an recognition, asset in or the liability position at a point in time comprehensive income (FVTOCI). Debt derivatives related to our credit facility and reclassified into net income upon disposal of the investment or when the investment becomes impaired. We believe that, as a resultsignificant of adopting increase IFRS 16, to werequired will both to recognize record a assets aliability and right-of-use asset on liabilities, and our a aswell Consolidated corresponding as we Statements lease a will of decrease(due to Financial be operating Position, costs, to as andepreciation increase accretion and to amortization finance of (due costs touse depreciation the asset). of the lease right-of- liability),We have and a team engaged an toThis ensuring our increase compliance with team IFRS to requirements, 16. has ensuring ourcommunicating been the data upcoming collection responsible changesIn with is various addition, for appropriate, stakeholders. thisinternal and determining controls team that is will process and help the assisting ensure related results the in are system accurate. runs the as development intended of new standard. IFRS 16 introduces aand single accounting for model all for leases lessees underlying with a asset term of isrecognize more of than a 12 low right-of-use months,underlying unless asset, value. asset, the and representing A a lease itsmake lessee liability, representing right lease will its payments. to obligation beremain to The use largely the required accounting the same as to treatment under IAS for 17. The lessors standard will is effectiveJanuary for 1, annual 2019. We periods have beginning the• option on to apply or either: IFRS after 16 with• full retrospective recognize effect; the or cumulative effect of initially applying IFRS 16 as an IFRS 16, In January 2016, the IASBstandard, issued the which final will publication supersede of the the IFRS current 16 IAS 17, 4 5 1 2 3 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 MANAGEMENT’S DISCUSSION AND ANALYSIS

SUBSCRIBER COUNT multiple-device accounts. A single Wireless postpaid account We determine the number of subscribers to our services based on typically provides subscribers with the advantage of allowing for the active subscribers. When subscribers are deactivated, either pooling of plan attributes across multiple devices and on a single voluntarily or involuntarily for non-payment, they are considered bill. Each Wireless postpaid account is typically represented by an deactivations in the period the services are discontinued. identifiable billing account number. A single Wireless postpaid account may include more than one identifiable telephone Wireless number and receive monthly Wireless services for a variety of • A wireless subscriber is represented by each identifiable connected devices including smartphones, basic phones, tablets, telephone number. and other devices. Wireless postpaid accounts under our various • We report wireless subscribers in two categories: postpaid and brand names are considered separate accounts. We calculate prepaid. Postpaid and prepaid include voice-only subscribers, Wireless postpaid ARPA by dividing total Wireless postpaid service data-only subscribers, and subscribers with service plans revenue (monthly) by the average number of Wireless postpaid integrating both voice and data. accountsforthesametimeperiod. • Usage and overage charges for postpaid subscribers are billed a month in arrears. Prepaid subscribers cannot incur usage and/or BLENDED AVERAGE REVENUE PER USER overage charges in excess of their plan limits or account balance. Blended average revenue per user (ARPU) helps us identify trends • Wireless prepaid subscribers are considered active for a period and measure our success in attracting and retaining higher value of 180 days from the date of their last revenue-generating usage. subscribers. We calculate blended ARPU by dividing service revenue (monthly) by the average total number of Wireless Cable subscribersforthesametimeperiod. • Cable Television and Internet subscribers are represented by a dwelling unit; Cable Phone subscribers are represented by line CAPITAL INTENSITY counts. Capital intensity allows us to compare the level of our capital • When there is more than one unit in one dwelling, such as an expenditures to that of other companies within the same industry. apartment building, each tenant with cable service is counted as Our capital expenditures do not include expenditures on spectrum an individual subscriber, whether the service is invoiced licences. We calculate capital intensity by dividing capital separately or included in the tenant’s rent. Institutional units, like expenditures by revenue. For Wireless, capital intensity is calculated hospitals or hotels, are each considered one subscriber. using total service revenue. We use it to evaluate the performance • Cable Television, Internet, and Phone subscribers include only of our assets and when making decisions about capital those subscribers who have service installed and operating, and expenditures. We believe that certain investors and analysts use who are being billed accordingly. capital intensity to measure the performance of asset purchases andconstructioninrelationtorevenue. SUBSCRIBER CHURN Subscriber churn (churn) is a measure of the number of subscribers DIVIDEND PAYOUT RATIOS that deactivated during a period as a percentage of the total We calculate the dividend payout ratio by dividing dividends subscriber base, usually calculated on a monthly basis. Subscriber declared for the year by net income or free cash flow for the year. churn measures our success in retaining our subscribers. We We use dividends as a percentage of net income and free cash calculate it by dividing the number of Wireless subscribers that flow to conduct analysis and assist with determining the dividends deactivated (usually in a month) by the aggregate numbers of we should pay. subscribers at the beginning of the period. When used or reported for a period greater than one month, subscriber churn represents RETURN ON ASSETS the sum of the number of subscribers deactivating for each period We use return on assets to measure our efficiency in using our incurred divided by the sum of the aggregate number of assets to generate net income. We calculate return on assets by subscribers at the beginning of each period incurred. dividing net income for the year by total assets as at year-end.

POSTPAID AVERAGE REVENUE PER ACCOUNT Postpaid average revenue per account (ARPA) helps us identify trends and measure our success in attracting and retaining

92 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 93 Long-term debt divided by net income Long-term debt Cash provided by operating activities Net income Basic and diluted earnings per share Net income Most comparable IFRS financial measure ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT Adjusted net debt (defined above) divided by 12-month trailing adjusted operating profit (defined above). Total long-term debt add (deduct) current portion of long-term debt; 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. Adjusted operating profit deduct capital expenditures; interest on borrowings net of capitalized interest; and cash income taxes. Adjusted net income: Net income add (deduct) stock-based compensation; restructuring, acquisition and other; loss (recovery) on sale or windof down 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; 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 divided by basic and diluted weighted average shares outstanding. Adjusted operating profit: Net income add (deduct) income tax expense (recovery); other expense (income); finance costs; restructuring, acquisition and other; loss (gain) on disposition of property, plant and equipment; depreciation and amortization; and stock-based compensation. Adjusted operating profit margin: Adjusted operating profit divided by revenue (service revenue for Wireless). its ability to generate cash flows. Some or all of these s does not imply that they are affect the comparability of our financial capital structure. and equity value and assess our leverage. capital structure. and equity value and assess our leverage. in our company,strength and which performance. is an important indicatorvalue a of business and our its underlying financial assets. noted items, because they results and could potentially distortperformance. the Excluding analysis of these trendsnon-recurring. in item business decisions about theability ongoing to generate operations cash flows. of the businessprofit and our to measurepayment obligations. our ability to service debtcompensation for all and management employees. to meet other • To conduct valuation-related analysis• and We make believe this decisions helps about investors and analysts analyze our enterprise • We believe this helps investors and analysts analyze our enterprise • We believe that some investors and analysts use free cash flow to • To assess the performance of our businesses before the effects of the • To evaluate the performance of our businesses, and• when making We believe that certain investors and analysts use adjusted operating • We also use it as one component in determining short-term incentive Non-GAAP measure Why we use it How we calculate it Adjusted net debt / adjusted operating profit (debt leverage ratio) Adjusted net debt • To conduct valuation-related analysis and make decisions about Free cash flow • To show how much cash we have available to repay debt and reinvest Adjusted net income Adjusted basic and diluted earnings per share Adjusted operating profit Adjusted operating profit margin measures may also be used byability investors, to lending incur institutions, and and credit servicemeasures rating under debt, agencies GAAP and as and indicators as do of not measurements our have to operating standard performance, value meanings of under companies our IFRS, in so may the not telecommunications be sector. reliable These ways to are compare not us to recognized other companies. NON-GAAP MEASURES We use the followingand non-GAAP measures. making These decisions are regarding reviewed the regularly ongoing by management operations and of the our Board business in assessing and our performance MANAGEMENT’S DISCUSSION AND ANALYSIS

Effective January 1, 2018, we will commence using adjusted RECONCILIATION OF ADJUSTED EARNINGS PER SHARE EBITDA as the key measure of profit for the purpose of assessing Years ended December 31 performance for each segment and to make decisions about the (In millions of dollars, except per share amounts; allocation of resources. As such, we plan to introduce adjusted number of shares outstanding in millions) 2017 2016 EBITDA as a new non-GAAP measures in our financial reports Adjusted basic earnings per share: commencing January 1, 2018. This measure will replace our Adjusted net income 1,821 1,481 existing adjusted operating profit non-GAAP measure. We believe Divided by: weighted average number of adjusted EBITDA more fully reflects segment and consolidated shares outstanding 515 515 profitability. The difference between adjusted operating profit and Adjusted basic earnings per share $3.54 $2.88 adjusted EBITDA is that adjusted EBITDA will include stock-based compensation expense. We also believe that our decision-making Adjusted diluted earnings per share: processes will not be significantly affected through the use of Adjusted net income 1,821 1,481 Dividedby:dilutedweightedaveragenumber adjusted EBITDA. Additionally, use of this measure will change our of shares outstanding 517 517 current definition of free cash flow. Adjusted diluted earnings per share $3.52 $2.86 RECONCILIATION OF ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING PROFIT MARGIN RECONCILIATION OF FREE CASH FLOW

Years ended December 31 Years ended December 31

(In millions of dollars) 2017 2016 (In millions of dollars) 2017 2016

Net income 1,711 835 Cash provided by operating activities 3,938 3,957 Add (deduct): Add (deduct): Income tax expense 635 324 Capital expenditures (2,436) (2,352) Other (income) expense (19) 191 Interest on borrowings, net of capitalized Finance costs 746 761 interest (722) (740) Restructuring, acquisition and other 152 644 Restructuring, acquisition and other 152 644 Gain on disposition of property, plant and Impairment of assets and related onerous equipment (49) – contract charges – (484) Depreciation and amortization 2,142 2,276 Interest paid 735 756 Stock-based compensation 61 61 Change in non-cash operating working Adjusted operating profit 5,379 5,092 capital items 154 (14) Other adjustments (75) (62)

Years ended December 31 Free cash flow 1,746 1,705 (In millions of dollars, except percentages) 2017 2016

Adjusted operating profit margin: RECONCILIATION OF DIVIDEND PAYOUT RATIO OF FREE Adjusted operating profit 5,379 5,092 CASH FLOW Divided by: total revenue 14,143 13,702 Years ended December 31 Adjusted operating profit margin 38.0% 37.2% (In millions of dollars, except percentages) 2017 2016

Dividend payout ratio of free cash flow: RECONCILIATION OF ADJUSTED NET INCOME Dividends declared during the year 988 988 Years ended December 31 Divided by: free cash flow 1,746 1,705

(In millions of dollars) 2017 2016 Dividend payout ratio of free cash flow 57% 58%

Net income 1,711 835 Add (deduct): Stock-based compensation 61 61 Restructuring, acquisition and other 152 644 Net loss on divestitures pertaining to investments – 11 (Recovery) loss on wind-down of shomi (20) 140 Gain on disposition of property, plant and equipment (49) – Income tax impact of above items (36) (213) Income tax adjustment, legislative tax change 2 3

Adjusted net income 1,821 1,481

94 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 MANAGEMENT’S DISCUSSION AND ANALYSIS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 95 835 Total Total 2016 2016 2,570 5,113 13,702 25,772 17,960 –n/m 61 – 61 – 835324 105 761 96 (2) 191644 n/m (76) 2017 2017 2016 % Chg 2016 % Chg 2,972 6,823 1,711 2,2764,196 (6) 25 5,031 6 1,705 2 5,092 6 1,644 2 14,143 25,891 15,693 61 61 1,2 1,2 (19) (49) 635 746 152 2017 2017 (227) 1,711 2,142 5,234 5,318 1,746 5,379 1,685 2016 2016 Years ended December 31 Years ended December 31 (1,358) (1,664) (47,293) (51,347) (49,706) r co-obligor, as the case may be, Consolidating Consolidating adjustments adjustments (245) 2017 2017 ROGERS COMMUNICATIONS INC. (1,737) (2,499) (50,811) (50,167) (52,426) 1,2 1,2 75 990 2016 2016 5,805 9,780 5,558 2,173 572 974 subsidiaries subsidiaries 2017 2017 Non-guarantor Non-guarantor 3,521 1,505 9,016 2,190 2017 ANNUAL REPORT 1,2 1,2 674 2016 2016 2,084 38,448 25,190 19,665 11,746 RCCI RCCI equipment 2017 2017 2,390 1,525 Income tax expense Finance costs Depreciation and amortization Other (income) expense Restructuring, acquisition and other Gain on disposition of property, plant and Stock-based compensation 41,993 20,266 27,012 12,195 (In millions of dollars) (In millions of dollars) Net income Add: EBITDA Add (deduct): Adjusted EBITDA Add: Free cash flow as reported: Less: Stock-based compensation Adjusted operating profit Free cash flow calculated with adjusted EBITDA RECONCILIATION OF EBITDA AND ADJUSTED EBITDArespect (with to 2018 FULL-YEAR CONSOLIDATED GUIDANCE) RECONCILIATION OF FREE CASH FLOW (with2018 respect FULL-YEAR to CONSOLIDATED GUIDANCE) 1,2 1,2 10 835 71 2016 2016 3.0 (57) nclude any obligations arising as a result of being a guarantor o 117 800 750 RCI RCI 17,159 22,831 28,812 25,712 2016 2016 5,092 (1,683) 15,328 15,328 15,330 16,197 3 2017 2017 1,711 14,468 24,501 30,544 30,732 6 2.8 (17) As at December 31 As at December 31 107 2017 2017 5,379 1,585 1,756 (1,129) 15,000 15,000 12,692 14,555 operating profit derivative assets Divided by: trailing 12-month adjusted Netdebtderivativeassets Credit risk adjustment related to net debt Short-term borrowings Bank advances Adjusted net debt Non-current liabilities Non-current assets Revenue Net income (loss) Current assets Current liabilities For the purposes of this table,Amounts investments recorded in in subsidiary current companies liabilities are and accounted for non-current by liabilities the for equity RCCI method. do not i under any of RCI’s long-term debt. Debt leverage ratio Deferred transaction costs and discounts Add (deduct): Adjusted net debt Debt leverage ratio (In millions of dollars, except ratios) (In millions of dollars) Current portion of long-term debt Long-term debt 1 2 Years ended December 31 (In millions of dollars, unaudited) SUMMARY OF FINANCIAL RESULTS OF LONG-TERM DEBTOur GUARANTOR outstanding public debt,obligor, $3.2 and RCCI, billion as bank either co-obligor credit or and guarantor, as letterThe applicable. following of table credit sets facilities, forthpresented the and selected derivatives with unaudited are consolidated a summary unsecuredadjustments, financial separate obligations and information (v) of column for the RCI RCI, total for: for consolidated as the amounts. (i) periods identified RCI, below, (ii) RCCI, (iii) our non-guarantor subsidiaries on a combined basis, (iv) consolidating RECONCILIATION OF ADJUSTED NET DEBT ANDLEVERAGE DEBT RATIO Selected Statements of Income data measure: Selected Statements of Financial Position data measure: As at December 31 (In millions of dollars, unaudited) MANAGEMENT’S DISCUSSION AND ANALYSIS

FIVE-YEAR SUMMARY OF CONSOLIDATED FINANCIAL RESULTS

As at or years ended December 31 (In millions of dollars, except per share amounts, subscriber count results, churn, ARPA, ARPU, percentages, and ratios) 2017 2016 2015 2014 2013 Revenue Wireless 8,343 7,916 7,651 7,305 7,270 Cable 3,466 3,449 3,465 3,467 3,475 Business Solutions 387 384 377 382 374 Media 2,153 2,146 2,079 1,826 1,704 Corporate items and intercompany eliminations (206) (193) (158) (130) (117) Total revenue 14,143 13,702 13,414 12,850 12,706 Total service revenue 1,2 13,560 13,027 12,649 Adjusted operating profit 3 Wireless 3,561 3,285 3,239 3,246 3,157 Cable 1,709 1,674 1,658 1,665 1,718 Business Solutions 128 123 116 122 106 Media 139 169 172 131 161 Corporate items and intercompany eliminations (158) (159) (153) (145) (149) Total adjusted operating profit 5,379 5,092 5,032 5,019 4,993 Net income 1,711 835 1,342 1,341 1,669 Adjusted net income 3 1,821 1,481 1,479 1,532 1,769 Cash provided by operating activities 3,938 3,957 3,747 3,698 3,990 Free cash flow 3 1,746 1,705 1,676 1,437 1,548 Capital expenditures 2,436 2,352 2,440 2,366 2,240 Earnings per share Basic $3.32 $ 1.62 $ 2.61 $ 2.60 $ 3.24 Diluted $3.31 $ 1.62 $ 2.60 $ 2.56 $ 3.22 Adjusted earnings per share 3 Basic $3.54 $ 2.88 $ 2.87 $ 2.97 $ 3.43 Diluted $3.52 $ 2.86 $ 2.86 $ 2.96 $ 3.42 Statements of Financial Position: Assets Property, plant and equipment 11,143 10,749 10,997 10,655 10,255 Goodwill 3,905 3,905 3,905 3,897 3,765 Intangible assets 7,244 7,130 7,243 6,588 3,211 Investments 2,561 2,174 2,271 1,898 1,487 Other assets 4,010 4,384 4,773 3,498 4,897 Total assets 28,863 28,342 29,189 26,536 23,615 Liabilities and Shareholders’ Equity Long-term liabilities 15,693 17,960 18,536 16,205 14,410 Current liabilities 6,823 5,113 5,017 4,920 4,606 Total liabilities 22,516 23,073 23,553 21,125 19,016 Shareholders’ equity 6,347 5,269 5,636 5,411 4,599 Total liabilities and shareholders’ equity 28,863 28,342 29,189 26,536 23,615 Subscriber count results (000s) 1 Wireless subscribers 10,482 10,274 9,877 9,450 9,503 Internet subscribers 2,230 2,145 2,048 2,011 1,961 Television subscribers 1,740 1,820 1,896 2,024 2,127 Phone subscribers 1,108 1,094 1,090 1,150 1,153 Additional Wireless metrics 1 Postpaid churn (monthly) 1.20% 1.23% 1.27% 1.27% 1.24% Postpaid ARPA (monthly) 4 $124.75 $ 117.37 $110.74 $106.41 Blended ARPU (monthly) $ 62.31 $ 60.42 $ 59.71 $ 59.41 $ 59.58 Additional consolidated metrics Revenue growth 3% 2% 4% 1% 2% Adjusted operating profit growth 6% 1% 0% 1% 3% Dividends declared per share $1.92 $ 1.92 $ 1.92 $ 1.83 $ 1.74 Dividend payout ratio of net income 1 57.7% 118.3% 73.6% 70.2% 53.7% Dividend payout ratio of free cash flow 1,3 56.6% 57.9% 58.9% 65.6% 57.9% Return on assets 1 5.9% 2.9% 4.6% 5.1% 7.1% Debt leverage ratio 3 2.8 3.0 3.1 2.9 2.3

1 As defined. See “Key Performance Indicators”. 2 Total service revenue has not been presented for periods prior to 2015. We commenced reporting total service revenue as a key performance indicator in the fourth quarter of 2016. See “Key Performance Indicators”. 3 Adjusted operating profit, adjusted net income, adjusted basic and diluted earnings per share, free cash flow, debt leverage ratio, and dividend payout ratio of 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. 4 Postpaid ARPA has not been presented for periods prior to 2014. We commenced reporting postpaid ARPA as a key performance indicator in the first quarter of 2015. See “Key Performance Indicators”.

96 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 97 Anthony Staffieri, FCPA, FCA Chief Financial Officer esponsibility through its Audit ROGERS COMMUNICATIONS INC. and for shareholder approval. 2017 ANNUAL REPORT March 8, 2018 Joe Natale President and Chief Executive Officer Board of Directors carriesand Risk out Committee. this r The Audit and Risk Committeeas meets well regularly with as management, controls the over the internal financial and reportingfinancial process, reporting external auditing issues; matters, auditors, to and satisfydischarging to itself discuss that each its internal partyconsolidated is financial properly statements, responsibilities; and the externalThe and auditors’ Audit report. and Risk toDirectors Committee reports for its review its findingsfinancial to consideration statements MD&A, the for when Board issuance to of approving the the Risk shareholders. the Committee The also Audit consolidated considers and the engagementof or the re-appointment external auditorsthe before Board of submitting Directors its for review recommendation to The consolidated financial statements have beenLLP, audited the by external KPMG auditors,accepted in accordance auditing with standardsCompany Canadian Accounting generally Oversight and Board (United thethe States) on shareholders. standards behalf Our of internal of controlDecember over the financial reporting 31, Public asaccordance at 2017 with hasAccountability Oversight been Board the (Unitedand States). audited free KPMG access standards to LLP the by has Audit full and of Risk KPMG Committee. LLP, the in Public Company olidated financial statements nancial statements of Rogers dAnalysis(MD&A)arethe n all material respects, Rogers ing and is ultimately responsible for preparation of consolidated financial statements; and properly accounted for and safeguarded. The accompanying consolidatedCommunications Inc. fi and its subsidiariesManagement’s and all the information Discussion in an Management’s Responsibility for Financial Reporting December 31, 2017 responsibility of managementBoard and of Directors. have been approvedManagement by has the prepared the cons reviewing and approving the consolidated financial statements. The The Board of Directors is responsibleresponsibility for for overseeing financial management’s report in accordance with Internationalissued Financial Reporting by Standardsconsolidated the as financial statements International include certainbased Accounting amounts on that Standards management’s are their best Board. estimates opinion, The andCommunications judgments present Inc.‘s and, financial position, fairly, in resultscash of i operations, flows. and Managementpresented has elsewhere in prepared MD&A and the haswith the ensured financial consolidated that financial information it statements. is consistent Management has developedcontrols and maintains that a furtherfinancial system enhances statements. The of system the of internal internal integritythe controls is of supported by the internalcommunication consolidated to employees about its auditconduct. policies on ethical business functionManagement and believes these internalassurance that: includes controls provide reasonable • management transactions are properly authorized• and recorded; financial records are reliable and• form the a assets of proper Rogers Communications basis Inc. and for its subsidiaries the are CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

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

Opinion on the Consolidated Financial Statements in accordance with Canadian generally accepted auditing We have audited the accompanying consolidated financial standards and the standards of the Public Company Accounting statements of Rogers Communications Inc., which comprise the Oversight Board (United States) (“PCAOB”). Those standards consolidated statements of financial position as at December 31, require that we plan and perform the audit to obtain reasonable 2017 and December 31, 2016, the consolidated statements of assurance about whether the consolidated financial statements are income, comprehensive income, changes in shareholders’ equity free from material misstatement, whether due to error or fraud. and cash flows for the years then ended, and the related notes, Those standards also require that we comply with ethical comprising a summary of significant accounting policies and other requirements, including independence. We are required to be explanatory information (collectively referred to as the independent with respect to Rogers Communications Inc. in “consolidated financial statements”). accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, the U.S. In our opinion, the consolidated financial statements present fairly, federal securities laws and the applicable rules and regulations of in all material respects, the consolidated financial position of the Securities and Exchange Commission and the PCAOB. We are Rogers Communication Inc. as at December 31, 2017 and a public accounting firm registered with the PCAOB. December 31, 2016, and its consolidated financial performance and its consolidated cash flows for the years then ended in An audit includes performing procedures to assess the risks of accordance with International Financial Reporting Standards as material misstatements of the consolidated financial statements, issued by the International Accounting Standards Board. whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included obtaining and Report on Internal Control Over Financial Reporting examining, on a test basis, audit evidence regarding the amounts We also have audited, in accordance with the standards of the and disclosures in the consolidated financial statements. The Public Company Accounting Oversight Board (United States), procedures selected depend on our judgment, including the Rogers Communications Inc.’s internal control over financial assessment of the risks of material misstatement of the reporting as of December 31, 2017, based on the criteria consolidated financial statements, whether due to fraud or error. In established in Internal Control – Integrated Framework making those risk assessments, we consider internal control (2013) issued by the Committee of Sponsoring Organizations of relevant to Rogers Communications Inc.’s preparation and fair the Treadway Commission (COSO), and our report dated March 8, presentation of the consolidated financial statements in order to 2018 expressed an unqualified (unmodified) opinion on the design audit procedures that are appropriate in the circumstances. effectiveness of Rogers Communications Inc.’s internal control over An audit also includes evaluating the appropriateness of financial reporting. accounting policies and principles used and the reasonableness of accounting estimates made by management, as well as evaluating Basis for Opinion the overall presentation of the consolidated financial statements. A – Management’s Responsibility for the Consolidated Financial Statements We believe that the audit evidence we have obtained in our audits Management is responsible for the preparation and fair is sufficient and appropriate to provide a reasonable basis for our presentation of these consolidated financial statements in audit opinion. accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Chartered Professional Accountants, Licensed Public Accountants We have served as Rogers Communications Inc.‘s auditor since 1969. B – Auditors’ Responsibility Toronto, Canada Our responsibility is to express an opinion on these consolidated March 8, 2018 financial statements based on our audits. We conducted our audits

98 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 99 erstanding of internal control rance regarding the reliability inancial reporting is a process ROGERS COMMUNICATIONS INC. the risk that a material weakness r disposition of the company’s 2017 ANNUAL REPORT Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada March 8, 2018 We conducted our auditPCAOB. in Those accordance with standards theaudit require standards that to of we the obtaininternal plan reasonable and control perform assurance overmaterial the about financial respects. whether reportingreporting Our included effective was obtaining audit an maintainedover of und financial in reporting, internal assessing all exists, control and overeffectiveness testing financial of and internalaudit control evaluating based also the on includedconsidered the design necessary assessed performing and in risk. suchaudit Our the provides operating a other circumstances. reasonable basis We procedures for our believe opinion. as that we our Definition and Limitations of Internal ControlReporting over Financial A company’s internal controldesigned over to provide f reasonable assu of financial reporting and the preparationexternal of financial statements for purposesaccounting principles. in A company’sreporting includes internal accordance those control policies and over proceduresthe with financial that maintenance (1) pertain of to generallyand records fairly that, accepted reflect in thethe reasonable transactions detail, company; and accurately (2) dispositions ofare provide the reasonable recorded assets assurance of statements that as transactions in necessary accordanceprinciples, to and with that permit receipts generally andbeing preparation expenditures of accepted of the made company accounting management financial are and only directorsreasonable assurance of in regarding prevention theunauthorized or accordance timely company; acquisition, detection use, and of assets that with o could (3) have a provide material authorizations effect on theBecause financial statements. of of itsreporting inherent limitations, may internalprojections control of not any over evaluation financial subject of prevent effectiveness to to the or future riskof periods that changes are controls in detect conditions, may or become thatpolicies misstatements. inadequate the or degree because procedures of may compliance deteriorate. Also, with the tors of Rogers Communications Inc. natory information (collectively l control over financial reporting and Analysis for the year ended and cash flows for the years then under the heading Management’s December 31, 2017. Our responsibilityRogers is to express Communications an opinionreporting on based Inc.’s on our audit. internal controlWe are over a publicare financial accounting firm required registeredCommunications with Inc. the to in PCAOB accordance with and laws be the and U.S. the federal applicable independent securities rulesExchange and Commission regulations and with the of PCAOB the andethical Securities in respect and requirements accordance with that the are tostatements relevant in Canada. to Rogers our audit of the financial Report on Internalwithin Management’s Control Discussion over Financial Reporting contained Basis for Opinion Rogers Communications Inc.’smaintaining effective management internal is controlfor over responsible its financial for assessment reportingfinancial and of reporting, the included effectiveness of internal control over Opinion on Internal Control over FinancialWe Reporting have auditedover Rogers financial Communications reporting Inc.’s ascriteria internal of established control December 31, in(2013) 2017, issued Internal based by on Control thethe the Treadway Committee – Commission (COSO). of Integrated Sponsoring Organizations Framework of In our opinion,material Rogers respects, effective Communications interna Inc. maintained, in all ended, and the related notes,accounting comprising policies a and summary other ofreferred expla significant to asreport dated the March 8, “consolidated 2018 expressedopinion financial an on unmodified those statements”) (unqualified) consolidated financial and statements. our Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Direc Report on the Consolidated Financial Statements We also haveaccepted audited, auditing in standardsCompany accordance Accounting and Oversight with Board the (Unitedthe Canadian States) consolidated standards generally (“PCAOB”), financial of statementsInc., of the which Rogers Public Communications position comprise as the at Decemberconsolidated consolidated 31, statements 2017 statements andchanges of December in of 31, financial shareholders’ 2016, equity income, the comprehensive income, as of DecemberInternal 31, Control 2017, based –Committee on Integrated the of FrameworkCommission criteria (COSO). (2013) established Sponsoring issued in Organizations by the of the Treadway CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income (In millions of Canadian dollars, except per share amounts)

Years ended December 31 Note 2017 2016

Revenue 5 14,143 13,702 Operating expenses: Operating costs 6 8,825 8,671 Depreciation and amortization 7, 8 2,142 2,276 Gain on disposition of property, plant and equipment 7 (49) – Restructuring, acquisition and other 7, 9 152 644 Finance costs 10 746 761 Other (income) expense 11 (19) 191

Income before income tax expense 2,346 1,159 Income tax expense 12 635 324

Net income for the year 1,711 835

Earnings per share: Basic 13 $3.32 $1.62 Diluted 13 $3.31 $1.62

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

100 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo (8) (7) 66 27 90 44 101 (23) (74) (15) (69) (39) (80) 618 835 255 (143) (217) (164) (101) (336) 2016 – – 44 40 17 39 (15) (15) (45) (62) (60) (62) 400 355 433 371 591 (566) 2017 2,066 1,711 ROGERS COMMUNICATIONS INC. 22 Note 2017 ANNUAL REPORT d other comprehensive income for equity- accounted investments expenditure derivatives Remeasurements Increase in fair value Share of other comprehensive loss ofReclassification equity-accounted to investments, net net income of of tax realize Related income tax recovery Reclassification to net income for gain on sale of investment Related income tax recovery Related income tax expense Reclassification to net income for accrued interest Reclassification to net income of lossReclassification on to debt net derivatives income or property, plant and equipment of loss (gain) on Unrealized loss in fair value of derivative instruments Defined benefit pension plans: Available-for-sale investments: Equity-accounted investments: Equity-accounted investments Cash flow hedging derivative instruments Available-for-sale investments Cash flow hedging derivative instruments: Items that may subsequently be reclassified to netOther income comprehensive income (loss) for the year Comprehensiveincomefortheyear Other comprehensive income (loss): Items that will not be reclassified to income: Items that may subsequently be reclassified to income: The accompanying notes are an integral part of the consolidated financial statements. Net income for the year Years ended December 31 Consolidated Statements of Comprehensive(In Income millions of Canadian dollars) Items that will not be reclassified to net income CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Financial Position (In millions of Canadian dollars)

As at December 31 Note 2017 2016 Assets Current assets: Accounts receivable 14 2,041 1,949 Inventories 15 313 315 Other current assets 197 215 Current portion of derivative instruments 16 421 91 Total current assets 2,972 2,570

Property, plant and equipment 7 11,143 10,749 Intangible assets 8 7,244 7,130 Investments 17 2,561 2,174 Derivative instruments 16 953 1,708 Other long-term assets 82 98 Deferred tax assets 12 3 8 Goodwill 8 3,905 3,905 Total assets 28,863 28,342

Liabilities and shareholders’ equity Current liabilities: Bank advances 6 71 Short-term borrowings 18 1,585 800 Accounts payable and accrued liabilities 2,931 2,783 Income tax payable 62 186 Current portion of provisions 19 4 134 Unearned revenue 346 367 Current portion of long-term debt 20 1,756 750 Current portion of derivative instruments 16 133 22 Total current liabilities 6,823 5,113

Provisions 19 35 33 Long-term debt 20 12,692 15,330 Derivative instruments 16 147 118 Other long-term liabilities 21 613 562 Deferred tax liabilities 12 2,206 1,917 Total liabilities 22,516 23,073 Shareholders’ equity 23 6,347 5,269 Total liabilities and shareholders’ equity 28,863 28,342

Guarantees 26 Commitments and contingent liabilities 27 Subsequent events 20, 23

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

On behalf of the Board of Directors:

Edward S. Rogers John H. Clappison, FCPA, FCA Director Director

102 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 103 Total Total equity equity shareholders’ shareholders’ Equity Equity reserve reserve hedging hedging investment investment reserve reserve ROGERS COMMUNICATIONS INC. Hedging Hedging sale financial sale financial Available-for- Available-for- assets reserve assets reserve 2017 ANNUAL REPORT earnings earnings Retained Retained (000s) (000s) Number Number of shares of shares Class B Class B Non-Voting Shares Non-Voting Shares (000s) Amount (000s) Amount Number Number of shares of shares Class A Class A Voting Shares Voting Shares of the consolidated financial statements. hedges, net of taxnet of taxdirectly in equity: – – – – – – – – –hedges, net of – – taxnet of tax 44 – –directly in equity: – 44 (15) – (15) – – – – – – – – – – (164) – – – (164) (23) (23) Balances, January 1, 2017Net income for the yearOther comprehensive income (loss): Defined benefit pension plans, netAvailable-for-sale of investments, tax net of taxDerivative instruments accounted for as Share of equity-accounted investments, Total other comprehensive – income 72 (loss) 112,412 –Comprehensive income (loss) for the yearTransactions with 405 shareholders – – recorded 402,396 –Dividends declared 4,247Shares issued – on exercise of –Share – stock class options exchange – –Total transactions with shareholders – 642Balances, December – – 31, 2017 – – (107) – (45) – – – – 10 1,711 – – – – – 5,269 371 – – (45) 72 1,666 112,407 (5) – –Balances, – January 405 1, 2016 402,403 – – 2 –Net 371 income for (5) the 371 4,925 year –Other comprehensive income (loss): –Defined – benefit 44 pension – plans, 7 net – 44 –Available-for-sale of investments, tax 1,013 net of taxDerivative instruments accounted for – (988) as (15) – (63)Share (15) of (45) 5 equity-accounted investments, 371 – (988) 1,711 Total other comprehensive – income 2,066 355 72 (5) (loss) – – 112,439 –Comprehensive income (loss) for the – yearTransactions with 402 shareholders 6,347 – – recorded – 402,308 – –Dividends declared 4,474Shares – issued – on – exercise of –Share – stock class options – exchange – –Total – transactions with shareholders – – 598Balances, December – – 31, 2016 – – – – (988) – 57 (74) – – – – – (988) – 33 835 – – – – – – 3 (74) (27) 44 5,636 72 761 112,412 – – – 61 3 – 405 – (27) 402,396 44 – 44 4,247 88 – (164) – – – (164) – (988) (23) 27 – 642 – (74) (23) – (107) (988) 44 (217) – – 835 618 – 10 – – – 5,269 – – – – 3 (985) – – (988) – Year ended December 31, 2016 Amount Year ended December 31, 2017 Amount The accompanying notes are an integral part Consolidated Statements of Changes(In in millions of Shareholders’ Canadian dollars, Equity except number of shares) CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows (In millions of Canadian dollars)

Years ended December 31 Note 2017 2016 Operating activities: Net income for the year 1,711 835 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 7, 8 2,142 2,276 Program rights amortization 8 64 71 Finance costs 10 746 761 Income tax expense 12 635 324 Stock-based compensation 24 61 61 Post-employment benefits contributions, net of expense 22 4 (3) Net loss on divestitures pertaining to investments – 11 (Recovery) loss on wind-down of shomi 11 (20) 140 Gain on disposition of property, plant and equipment 7 (49) – Impairment of assets and related onerous contract charges 7 – 484 Other 8 34 Cash provided by operating activities before changes in non-cash working capital items, income taxes paid, and interest paid 5,302 4,994 Change in non-cash operating working capital items 28 (154) 14 Cash provided by operating activities before income taxes paid and interest paid 5,148 5,008 Income taxes paid (475) (295) Interest paid (735) (756) Cash provided by operating activities 3,938 3,957 Investing activities: Capital expenditures 7, 28 (2,436) (2,352) Additions to program rights 8 (59) (46) Changes in non-cash working capital related to capital expenditures and intangible assets 109 (103) Acquisitions and other strategic transactions, net of cash acquired 8 (184) – Other (60) 45 Cash used in investing activities (2,630) (2,456) Financing activities: Net proceeds received on short-term borrowings 18 858 – Net repayment of long-term debt 20 (1,034) (538) Net payments on settlement of debt derivatives and forward contracts 16 (79) (45) Transaction costs incurred – (17) Dividends paid 23 (988) (988) Other – 5 Cash used in financing activities (1,243) (1,583) Change in cash and cash equivalents 65 (82) (Bank advances) cash and cash equivalents, beginning of year (71) 11 Bank advances, end of year (6) (71)

Cash and cash equivalents are defined as cash and short-term deposits that have an original maturity of less than 90 days, less bank advances.

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

104 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 105 refers to the RCI ROGERS COMMUNICATIONS INC. Instruments 2017 ANNUAL REPORT 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 8, 2018. these consolidated financial During the year endedBusiness December Solutions 31, were 2017, operated Wireless, byRogers Cable, our and Communications wholly-owned subsidiary, Canadawholly-owned Inc. subsidiaries. (RCCI), Mediaowned and subsidiary, was Rogers certain Media operated Inc., other and by its subsidiaries. ourSee note wholly- 4 forsegments. more information about our reportable operating refer to Rogers Communications Inc. and its subsidiaries. the Company and for Canadian consumers and businesses. including Internet, television, and telephony (phone) services for Canadian consumers and businesses. network and data centre assets toa support range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector, and carrier wholesale markets. including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, digital media, and publishing. Segment Principal activities Page Note Page Note CableBusiness Solutions Cable telecommunications operations, Network connectivity through our fibre Media A diversified portfolio of media properties, Wireless Wireless telecommunications operations 106111 Note 2111 Note 3113 Significant Accounting Policies Note 4114 Capital Risk Note Management 5115 Segmented Information Note 6117 Revenue Note 7120 Operating Costs Note 8121 Property, Plant and Note Equipment 9121 Intangible Assets and Goodwill Note 10121 Restructuring, Acquisition and Note Finance Costs Other 11123 Note 12 Other (Income)123 Expense Note Income Taxes 13 132124 Note Earnings 14 Per Share 134 Note Note 15 17 Accounts Receivable 142 138 139 Inventories Investments Note 18 Note Note Short-Term 23 21 Note Borrowings 22 Shareholders’ Other Benefits Post-Employment Equity Long-Term 136 Liabilities Note 135 20 145 Long-Term Debt Note 19 Note 25 Provisions 143 Related Party Transactions Note 24 147 148 146 Stock-Based Compensation Note Note Note 27 26 28 Commitments Guarantees Supplemental and Cash Contingent Flow Liabilities Information 105 Note 1 Nature of the Business 124 Note 16 Financial Risk Management and Financial legal entity Rogers Communications Inc., not including its subsidiaries. RCI also holds interests in various investments and ventures. Rogers Communicationscommunications and Inc. mediaoperations and sales company. are is in Substantiallyand Canada. its RCI registered all is office a is incorporated of locatedOntario, in M4W at Canada 1G9. 333 our RCI’s Bloor diversified shares Street are East,Stock publicly Toronto, Exchange traded (TSX: on RCI.A Canadian the and Toronto Exchange RCI.B) (NYSE: and RCI). on the New York Stock We report our resultsEach segment of and operations the nature in of its four business reportable is as segments. follows: NOTE 1: NATURE OF THE BUSINESS Notes to Consolidated Financial Statements We, us, our, Rogers, Rogers Communications, NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF PRESENTATION combinations. We possess control over an entity when we All amounts are in Canadian dollars unless otherwise noted. Our conclude we are exposed to variable returns from our involvement functional currency is the Canadian dollar. We prepare the with the acquired entity and we have the ability to affect those consolidated financial statements on a historical cost basis, except returns through our power over the acquired entity. for: We calculate the fair value of the consideration paid as the sum of • certain financial instruments as disclosed in note 16, which are the fair value at the date of acquisition of the assets we transferred measured at fair value; and the equity interests we issued, less the liabilities we assumed to • the net deferred pension liability, which is measured as acquire the subsidiary. described in note 22; and • liabilities for stock-based compensation, which are measured at We measure goodwill as the fair value of the consideration fair value as disclosed in note 24. transferred less the net recognized amount of the identifiable assets acquired and liabilities assumed, which are generally (b) BASIS OF CONSOLIDATION measured at fair value as of the acquisition date. When the excess Subsidiaries are entities we control. We include the financial is negative, a gain on acquisition is recognized immediately in net statements of our subsidiaries in our consolidated financial income. statements from the date we gain control of them until our control We expense the transaction costs associated with acquisitions as ceases. We eliminate all intercompany transactions and balances we incur them. between our subsidiaries on consolidation. (e) NEW ACCOUNTING PRONOUNCEMENTS ADOPTED IN (c) FOREIGN CURRENCY TRANSLATION 2017 We translate amounts denominated in foreign currencies into We adopted the following IFRS amendments prospectively Canadian dollars as follows: beginning on January 1, 2017. • monetary assets and monetary liabilities – at the exchange rate in • Amendments to IAS 7, Statement of Cash Flows, requiring effect as at the date of the Consolidated Statements of Financial entities to provide additional disclosures that enable financial Position; statement users to evaluate cash flow and non-cash changes in • non-monetary assets, non-monetary liabilities, and related liabilities arising from financing activities. depreciation and amortization expenses – at the historical • Amendments to IAS 12, Income Taxes, clarifying the exchange rates; and requirements for deferred tax assets for unrealized losses on • revenue and expenses other than depreciation and debt instruments. amortization – at the average rate for the month in which the • Amendments to IFRS 12, Disclosure of Interests in Other Entities, transaction was recognized. clarifying the required disclosures regarding an entity’s interest in subsidiaries, joint arrangements, and associates that are held for (d) BUSINESS COMBINATIONS sale, held for distribution, or classified as discontinued We account for business combinations using the acquisition operations. method of accounting. Only acquisitions that result in our gaining control over the acquired businesses are accounted for as business The adoption of these amendments did not have a material effect on our consolidated financial statements.

106 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 107 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT have a significant risk ofamounts resulting recognized in in the a consolidated material financial adjustment statements; to the policies that haverecognized the in the most consolidated financial significant statements; and effect on the amounts throughout the notes as identified in• the table information below: about assumptions and estimation uncertainties that • information about judgments made in applying• accounting information on our significant accounting policies. The application of this new standardour will reported have Wireless significant results, impacts specifically on of with regards recognition to and the timing classificationcosts of revenue, incurred and inrecognition the treatment and acquiring of classification customercontract of contracts. revenue inception, is Theconsideration IFRS affected timing over because, 15 the of at consideration contract to requires all term performance the obligations andon in the the estimation their contract allocation based significantly of of relative that total affectequipment stand-alone and our service selling togetherwill Wireless into prices. result monthly service in arrangementscontract This fees, an inception which and that increase will aover to decrease the most course bundle to equipment of service theof revenue revenue contracts. IFRS We recognized recognized 15 do to not at affectand expect our the cash underlying application flows from economicscustomers. operations through or the which methods we transactThe with treatment of our costsaffected incurred as in IFRS acquiring 15 customer requiresas certain contracts sales contract is commissions) acquisition to costs be (such into recognized as operating an assetexpensed expenses and as amortized incurred. over time. Currently,In addition, such newConsolidated costs assets and are Statements liabilitiescontract will of asset be and Financial recognized contractfor liability on Position. any will our timing be Specifically,the differences recognized amounts between billed to a to account the the customer. revenue recognizedSignificant and judgment isand needed obligations to of a define contractobtains the and control to of enforceable determine the when distinct rights the good or customer service. Customer Loyalty Programmes. REVENUE FROM CONTRACTS WITH CUSTOMERS obligations in the contract; and performance obligation. and IFRIC 13, 1. identify2. the contract with a customer; identify3. the performance obligations in the determine4. contract; the transaction price; allocate the5. transaction recognize price revenue to when (or the as) performance the entity satisfies a 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 115 Stock-Based Compensation 111 117 Commitments and Contingent 113 Liabilities Page Accounting Policy X X Use X of Estimates X Use of 123 Judgments 123 121 147 124 139 143 X 124 X X X X X 132 X X 135 X X X X X X X X X X X X X X X IFRS 15 also provides guidance relatingacquisition to and the contract treatment fulfillment of costs. contract IFRS 15 introduces acontracts with single customers. model This standard forcustomers, applies recognizing with to all revenue only contracts some from with accounted exceptions, for including under other certain IFRSs. contracts be The recognized standard requires in revenue a to goods manner or services that to depicts aconsideration the customer expected and transfer to at be of an received promised those amount in that goods exchange reflects or for the services. transferring Thisfive is steps: achieved by applying the following IFRS 15, Effective January 1, 2018,2018 we will interim adoptstatements IFRS issued financial 15. in Our accordance statements first withcurrent IFRS quarter 15. will accounting IFRS 15Revenue be standards supersedes for our revenue, first including financial IAS 18, (IFRS 15) (g) RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED The IASB has issued theeffective following new in standards thatconsolidated a will financial statements become in future future periods. year and will have an impact on our (f) ADDITIONAL SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS 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 in this Furthermore, the following information is disclosed NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We plan to retrospectively apply IFRS 15 to all contracts that are not We have a team dedicated to ensuring our compliance with complete on the date of initial application. We have made a policy IFRS 15. This team was responsible for determining system choice to restate each prior period presented and will recognize requirements, ensuring our data collection was appropriate, and the cumulative effect of initially applying IFRS 15 as an adjustment communicating the upcoming changes with various stakeholders. to the opening balance of equity as at January 1, 2017, subject to In addition, this team assisted in the development of new internal certain practical expedients we adopted. controls that will help ensure our new revenue recognition system operates as intended and the related results are complete and We have implemented a new revenue recognition system to accurate. enable us to comply with the requirements of IFRS 15, including appropriately allocating revenue between different performance obligations within individual contracts for certain revenue streams. We have had detailed data validation processes in place throughout the transition work period to implement IFRS 15.

EFFECT OF TRANSITION TO IFRS 15 Consolidated Statements of Income Below is the estimated effect of transition to IFRS 15 on our Consolidated Statements of Income for the year ended December 31, 2017, all of which pertain to our Wireless segment. Only metrics that are impacted by the IFRS 15 conversion are presented.

Year ended December 31, 2017 Estimated effect of Subsequent to (In billions of dollars) Note 2(g) As reported transition transition 1 Revenue i 14.1 0.2 14.3

Operating expenses: Operating costs ii, iii 8.8 *** 8.8 Other non-operating costs 3.0 – 3.0

Income before income tax expense 2.3 0.2 2.5 Income tax expense 0.6 *** 0.6 Net income for the year 1.7 0.2 1.9

*** Amounts less than $0.1 billion; these amounts have been excluded from subtotals. 1 As a result of IFRS 15 being adopted effective January 1, 2018, we will retrospectively amend our 2017 results in our fiscal 2018 financial filings.

108 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 1 109 transition Subsequent to As at December 31, 2017 transition Estimated effect of As ROGERS COMMUNICATIONS INC. reported 1 transition Subsequent to 2017 ANNUAL REPORT As at January 1, 2017 transition Estimated effect of ii) Deferred commission cost asset Under IFRS 15, we willexternal defer commission representatives costs paid as tocustomers internal as a and deferred commission resultover cost of assets the and obtaining amortize patterncustomer, them contracts which of is with typically the evenlymonths. over transfer either 12 of or 24 goods consecutive andiii) Inventories and services other current to liabilities Under IFRS the 15, significant judgment isthe required customer to determine obtains when controlaffected of transactions, the we distinctsubscriber have good defined and or our determined service.receive customer For possession that as of a they the wirelessactivation. device, obtain end which typically control For occurs when upon certainoperators they transactions and other throughobtains retailers, control third-party of the a franchise timing wirelessto device of will our when be deferred currentwireless the in comparison customer device policy is wheredealer. delivered revenue This and iscorresponding will accepted increase recognized in by other result current when the liabilities. in the independent a greater inventory balance and a – 0.7 0.7 – 0.8 0.8 – 0.4 0.4 – 0.4 0.4 .3 0.9 6.2 6.4 1.0 7.4 As 0.3 0.1 0.4 0.3 0.1 0.4 0.1 0.1 0.2 – 0.1 0.1 0.4 *** 0.4 0.3 *** 0.3 0.2 0.2 0.4 0.2 0.2 0.4 0.1 *** 0.1 0.1 *** 0.1 reported i i i ii ii iii iii Note 2(g) 3 2 lders’ equity 28.3 1.4 29.7 28.9 1.5 30.4 Other current assets Accounts receivableInventories 1.9 *** 1.9 2.0 *** 2.0 Current portion of contract assets Current portion of contract liabilities Remainder of current liabilities 4.6 – 4.6 6.5 – 6.5 Remainder of current assets 0.2 – 0.2 0.5 – 0.5 Other current liabilities Amounts less than $0.1 billion; theseAs amounts a have result been of excluded IFRS from 15 subtotals. Previously being reported adopted as effective “current January portion 1, of 2018,Previously provisions”. we reported will as retrospectively “unearned amend revenue”. our 2017 results in our fiscal 2018 financial filings. The application ofoperating, investing, IFRS or financing 15 activities. will noti) Contract assets affect and liabilities ourContract assets cash arise flows primarily asrevenue from 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 of stand-alone that revenue total reported, selling will with prices. a be largerthe For recognized allocation adoption Wireless to earlier of equipment term revenue revenue. was IFRS than Prior limited 15, to to previously at the the the non-contingent point of consideration amount sale received whenthe allocated recovery contract of was the to contingent remaining upon consideration the equipment in delivery of futureWe services. will record a contractcustomer liability when in we advance receiveaccount payment of for from contract a providing assetsbasis, goods and with liabilities and each on contract services. aasset being contract-by-contract or We presented net contract as will liability a accordingly. single netAll contract contractexpected assets credit losses, will measured in accordance be with IFRS 9. recorded net of an allowance for 1 2 3 *** (in billions of dollars) Assets Current assets: Consolidated Statements of Financial Position Below is the estimated effectDecember of 31, transition 2017. to IFRS 15 on our Consolidated Statements of Financial Position as at January 1, 2017 and as at Total current liabilitiesDeferred tax liabilitiesRemainder of long-term liabilitiesTotal liabilitiesShareholders’ equity 16.0 5.1 1.9 – 5 0.1 23.0 0.4 16.0 5.2 13.5 0.5 2.3 6.8 2.2 23.5 – 22.5 0.1 0.4 13.5 6.9 0.5 2.6 23.0 Total liabilities and shareho Other long-term assets Total current assetsContract assets 2.6 1.0 3.6 3.0 1.1 4.1 Remainder of long-term assetsTotal assetsLiabilities and shareholders’ equity Current liabilities: 25.6 – 28.3 25.6 25.8 1.4 29.7 – 28.9 25.8 1.5 30.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

IFRS 9, FINANCIAL INSTRUMENTS (IFRS 9) comprehensive income, and cumulative gains or losses in other Effective January 1, 2018, we will adopt IFRS 9. Our first quarter comprehensive income will not be reclassified into net income on 2018 interim financial statements will be our first financial disposal. statements issued in accordance with IFRS 9. In July 2014, the IASB Under IFRS 9, the loss allowance for trade receivables must be issued the final publication of the IFRS 9 standard, which calculated using the expected lifetime credit loss and recorded at supersedes IAS 39, Financial Instruments: recognition and the time of initial recognition. A portion of our trade receivables measurement (IAS 39). IFRS 9 includes revised guidance on the require an incremental loss allowance in order to comply with the classification and measurement of financial instruments, new requirements of IFRS 9; as a result, we will recognize a $4 million guidance for measuring impairment on financial assets, and new decrease to accounts receivable and a corresponding decrease to hedge accounting guidance. We have made a policy choice to retained earnings within shareholders’ equity, effective January 1, adopt IFRS 9 on a retrospective basis; however, our 2017 2018. In addition, the expected loss allowance using the lifetime comparatives will not be restated because it is not possible to do so credit loss approach will be applied to contract assets under without the use of hindsight. IFRS 15. There is no significant effect on the carrying value of our Under IFRS 9, financial assets are classified and measured based on other financial instruments under IFRS 9 related to this new the business model in which they are held and the characteristics of requirement. their contractual cash flows. IFRS 9 contains three primary The new hedge accounting guidance aligns hedge accounting measurement categories for financial assets: measured at more closely with an entity’s risk management strategies. IFRS 9 amortized cost, fair value through other comprehensive income does not fundamentally change the types of hedging relationships (FVTOCI), and fair value through profit and loss (FVTPL). Under or the requirement to measure and recognize ineffectiveness; IFRS 9, we will irrevocably elect to present subsequent changes in however, it allows more hedging strategies used for risk the fair value of our equity investments that are neither held-for- management to qualify for hedge accounting and introduces more trading nor contingent consideration arising from a business judgment to assess the effectiveness of a hedging relationship, combination in other comprehensive income (FVTOCI with no primarily from a qualitative standpoint. This is not expected to have reclassification to net income). For these equity investments, any an effect on our reported results and will simplify our application of impairment on the instrument will be recorded in other effectiveness tests going forward. Below is a summary showing the classification and measurement bases of our financial instruments as at January 1, 2018 as a result of adopting IFRS 9 (along with a comparison to IAS 39).

Financial instrument IAS 39 IFRS 9 Financial assets Cash and cash equivalents Loans and receivables Amortized cost Accounts receivable Loans and receivables Amortized cost Investments Available-for-sale 1 FVTOCI with no reclassification to net income Financial liabilities Bank advances Other financial liabilities Amortized cost Short-term borrowings Other financial liabilities 2 Amortized cost Accounts payable Other financial liabilities Amortized cost Accrued liabilities Other financial liabilities Amortized cost Long-term debt Other financial liabilities 2 Amortized cost Derivatives 3 Debt derivatives 4 Held-for-trading FVTOCI and FVTPL Bond forwards Held-for-trading FVTOCI Expenditure derivatives Held-for-trading FVTOCI Equity derivatives Held-for-trading 5 FVTPL 1 Subsequently measured at fair value with changes recognized in other comprehensive income. The net change subsequent to initial recognition, in the case of investments, is reclassified into net income upon disposal of the investment or when the investment becomes impaired. 2 Subsequently measured at amortized cost using the effective interest method. 3 The 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 portion of the hedge is recognized in accumulated other comprehensive income and the ineffective portion of the hedge is recognized immediately into net income. 4 Debt derivatives related to our senior notes and debentures have been designated as hedges for accounting purposes and will be classified as fair value through other comprehensive income (FVTOCI). Debt derivatives related to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes and will be classified as fair value through profit and loss (FVTPL). 5 Subsequent changes are offset against stock-based compensation expense or recovery in operating costs.

IFRS 16, LEASES (IFRS 16) make lease payments. The accounting treatment for lessors will In January 2016, the IASB issued the final publication of the IFRS 16 remain largely the same as under IAS 17. standard, which will supersede the current IAS 17, Leases (IAS 17) The standard is effective for annual periods beginning on or after standard. IFRS 16 introduces a single accounting model for lessees January 1, 2019. We have the option to either: and for all leases with a term of more than 12 months, unless the • apply IFRS 16 with full retrospective effect; or underlying asset is of low value. A lessee will be required to • recognize the cumulative effect of initially applying IFRS 16 as an recognize a right-of-use asset, representing its right to use the adjustment to opening equity at the date of initial application. underlying asset, and a lease liability, representing its obligation to

110 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 111 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT Smart Home Monitoringredefined Cable products segment. willHome Financial Monitoring be results product are related presented currentlyitems reported to within within our Corporate and Smart a amend intercompany our 2017 eliminations. comparativefor segment this results We redefinition. in 2018 will to account retrospectively Effective January 1, 2018,commence our using adjusted chief EBITDA operating asthe decision the purpose key maker measure of will of assessingmake profit decisions for performance about the for allocation eachwill of resources. segment be Adjusted and EBITDA defined to asrestructuring, income acquisition before and depreciation other,(income), and and finance income amortization, tax costs, expense. other expense We follow the same accountingdescribed policies for in our the segments asWe notes those account to for our transactionssame consolidated between way reportable financial segments we statements. ineliminate account them the on for consolidation. transactions with external parties, but internal controls that willand help the ensure related results the are system accurate. runs asWe intended are implementing a processthe that requirements will of enable IFRS usto 16 to begin comply on with a a parallel lease-by-leasesystem basis. run in 2018. We under We expect both will have IASwill detailed 17 data continue validation and throughout processes that IFRS thecontinuing 16 to course assess using the of this effect 2018.financial of this As statements standard a on and our result, it consolidated estimate we of is its are not effect. We yeteffects expect possible to of disclose to the the makefinancial estimated statements. financial a adoption reliable of IFRS 16 in our 2018 consolidated We monitor debtliquidity leverage and ratios shareholders’ as return tothe part sustain of future business, development the of decisions management about conduct of capital. valuation-relatedThe analyses, wholly-owned subsidiary and throughMasterCard which make our and Rogersregulated Fido Platinum by MasterCardInstitutions, the programs which Office are requirescapital be operated that of maintained. a is Rogers’ thethat subsidiary minimum requirement was Superintendent as level in atrequirements December compliance of of are 31, with not regulatory 2017 material Financial to and2017 the 2016. or Company December The as 31, at capital 2016. December 31, With the exceptionFido of MasterCard the programs Rogers and theare Platinum subsidiary MasterCard operated, through which and we they requirements. the Our are overall not strategy fornot subject capital changed risk since to December management 31, has externally-imposed 2016. capital ACCOUNTING POLICY Reportable segments We determine our reportablethings, how segments our based chief operating on, decisionOfficer maker, among the and other Chief Executive Chiefoperations and Financial performance. They Officer review adjustedas of operating profit RCI, the regularlyperformance key for review each measure our segmentallocation and of of to make profit resources.income decisions Adjusted about for the before operating theamortization, profit stock-based restructuring, is purpose defined acquisition compensation, ofother expense as and (income), depreciation and assessing other, income tax expense. and finance costs, We will redefine our reportableas segments effective a January 1, result 2018 between of technological the evolutionBusiness various and Solutions reportable the product segments, increased asresources well offerings overlap as how within we amongst, allocate reportable our segments. and Cable Effective January theexisting and 1, Cable 2018, general the segment, results management Business of our Solutions of, segment, our and our NOTE 4: SEGMENTED INFORMATION NOTE 3: CAPITAL RISK MANAGEMENT Our objectives in managing capitalliquidity are to ensure to we have meetbusiness sufficient plan. all We define of capitalequity our that and we commitments indebtedness manage asterm (including and debt, shareholders’ long-term current to debt, and portion short-term execute of borrowings). our our We long- manage ourand capital make structure, adjustments commitments,financial based and markets, on maturities operating generalworking risks, economic capital conditions, our requirements.structure, investment To we priorities, maintain may, and ordebt with and/or adjust short-term approval borrowings, from issue our ordividends, the repurchase capital shares, or Board, pay issue undertakeunder or other the repay activities circumstances. asannual The deemed capital Board appropriate andtransactions reviews operating that and are budgets, approves notincluding as part the proposals well of the astransactions, for investments, ordinary or any divestitures. acquisitions course material of or business, other major financing We believe that, as a resultsignificant of adopting increase IFRS 16, to werequired will both to recognize record a assets aliability and right-of-use asset on liabilities, and our a aswell Consolidated corresponding as we Statements lease a will of decrease(due to Financial be operating Position, costs, to as andepreciation increase accretion and to amortization finance of (due costs touse depreciation the asset). of the lease right-of- liability),We have and a team engaged an toThis ensuring our increase compliance with team IFRS to requirements, 16. has ensuring ourcommunicating been the data upcoming collection responsible changesIn with is various addition, for appropriate, stakeholders. this and determining team is process assisting in the development of new NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

USE OF ESTIMATES AND JUDGMENT EXPLANATORY INFORMATION JUDGMENTS Our reportable segments are Wireless, Cable, Business Solutions, We make significant judgments in determining our operating and Media (see note 1). All four segments operate substantially in segments. These are components that engage in business activities Canada. Corporate items and eliminations include our interests in from which they may earn revenue and incur expenses, for which businesses that are not reportable operating segments, corporate operating results are regularly reviewed by our chief operating administrative functions, and eliminations of inter-segment revenue decision makers to make decisions about resources to be allocated and costs. Segment results include items directly attributable to a and assess component performance, and for which discrete segment as well as those that can be allocated on a reasonable financial information is available. basis.

INFORMATION BY SEGMENT

Corporate Year ended December 31, 2017 Business items and Consolidated (In millions of dollars) Note Wireless Cable Solutions Media eliminations totals

Revenue 5 8,343 3,466 387 2,153 (206) 14,143 Operating costs 1 4,782 1,757 259 2,014 (48) 8,764 Adjusted operating profit 3,561 1,709 128 139 (158) 5,379

Stock-based compensation 1 24 61 Depreciation and amortization 7, 8 2,142 Gain on disposition of property, plant and equipment 7 (49) Restructuring, acquisition and other 9 152 Finance costs 10 746 Other income 11 (19) Income before income tax expense 2,346

Capital expenditures before proceeds on disposition 2 806 1,172 131 83 318 2,510 Goodwill 1,160 1,379 429 937 – 3,905 Total assets 14,261 6,033 1,196 2,405 4,968 28,863

1 Included in operating costs on the Consolidated Statements of Income. 2 Excludes proceeds on disposition of $74 million (see note 28).

Corporate Year ended December 31, 2016 Business items and Consolidated (In millions of dollars) Note Wireless Cable Solutions Media eliminations totals

Revenue 5 7,916 3,449 384 2,146 (193) 13,702 Operating costs 1 4,631 1,775 261 1,977 (34) 8,610 Adjusted operating profit 3,285 1,674 123 169 (159) 5,092

Stock-based compensation 1 24 61 Depreciation and amortization 7, 8 2,276 Restructuring, acquisition and other 7, 9 644 Finance costs 10 761 Other expense 11 191 Income before income tax expense 1,159

Capital expenditures before proceeds on disposition 702 1,085 146 62 357 2,352 Goodwill 1,160 1,379 429 937 – 3,905 Total assets 14,074 5,288 1,219 2,474 5,287 28,342

1 Included in operating costs on the Consolidated Statements of Income.

112 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 113 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT independent dealer or subscriber in a direct sales channel equipment revenue when the equipment is activated accounting featured in ourproperties publications, or displayed on our digital providers’ subscribers season and when goods are sold allocate to the rewardreward credit credit based onredeemed that the fair can value be of the obtainedredeemed when by the theservices customer credit and is we provide the goods or effective interest method • Astheserviceisprovided • As the service is provided or product is delivered • Equipment subsidies are recognized as a reduction of • These fees do not meet the criteria as a separate unit of • When the services are delivered to cable and satellite • When the related games are played during the baseball • When the amount can be determined • At the time the related games are aired • Estimate the portion of the original sales transaction• Defer to the allocated amount as a liability until the rewards are • wireless airtime and data• services; cable, telephony, and Internet• services; network services; • media subscriptions; and •rentalofequipment Source of revenueMonthly subscriber fees for: How we recognize revenue Revenue from roaming, longoptional or distance, non-subscription pay services and per other sales use, of and products Revenue from other the sale of wireless and cable equipment • When the equipment is delivered and accepted by the Equipment subsidies relatedand to existing subscribers providing equipment to new Activation fees charged to subscribers in Wireless • As part of service revenue upon activation Advertising revenue • When the advertising airs on our radio or television stations, is Monthly subscription revenue receivedsubscriptions by from television cable and stations satellite for providers Toronto Blue Jaysconcessions revenue from home game admission and Toronto Blueincluding fund Jays redistribution and other revenue distributions Revenue from from Toronto Blue Major Jays,agreements radio, League and television broadcast Baseball, Revenue from sublicensing of program rightsRewards grantedprograms, to which customerscomponent of are the sales through transactions considered customer a loyalty separately identifiable • Over the course of the applicable season Interest income on credit card receivables • As it is earned (i.e. upon the passage of time) using the Revenue recognition We recognize revenue when weand can are estimate reasonably its assured amount, that have we delivered can collect on it. our Revenue obligations is within recognized the net revenue-generating of arrangements, discounts. NOTE 5: REVENUE ACCOUNTING POLICY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Multiple deliverable arrangements EXPLANATORY INFORMATION We offer some products and services as part of multiple deliverable arrangements. We recognize these as follows: Years ended December 31 • divide the products and services into separate units of accounting, as long as the delivered elements have stand-alone (In millions of dollars) 2017 2016 valuetocustomersandwecandeterminethefairvalueofany Wireless: undelivered elements objectively and reliably; then Service revenue 7,775 7,258 • measure and allocate the arrangement consideration among the Equipment revenue 568 658 accounting units based on their relative fair values and recognize revenue related to each unit when the relevant criteria are met Total Wireless 8,343 7,916 for each unit individually; however Cable: • when an amount allocated to a delivered item is contingent Internet 1,606 1,495 upon the delivery of additional items or meeting specified Television 1,501 1,562 performance conditions, the amount allocated to the delivered Phone 353 386 item is limited to the non-contingent amount, as applicable. Service revenue 3,460 3,443 Equipment revenue 6 6 Unearned revenue We recognize payments we receive in advance of providing goods Total Cable 3,466 3,449 and services as unearned revenue. Advance payments include Business Solutions: subscriber deposits, cable installation fees, ticket deposits related Next generation 322 307 to Toronto Blue Jays ticket sales, and amounts subscribers pay for Legacy 58 71 services and subscriptions that will be provided in future periods. Service revenue 380 378 Equipment revenue 7 6 Total Business Solutions 387 384 Media: Advertising 838 870 Subscription 511 474 Retail 352 325 Other 452 477 Total Media 2,153 2,146 Corporate items and intercompany eliminations (206) (193) Total revenue 14,143 13,702

NOTE 6: OPERATING COSTS

Years ended December 31 (In millions of dollars) 2017 2016 Cost of equipment sales and direct sales channel subsidies 2,039 1,954 Merchandise for resale 237 209 Other external purchases 4,429 4,435 Employee salaries and benefits and stock-based compensation 2,120 2,073 Total operating costs 8,825 8,671

114 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 115 ful lives at least once a year ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT 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 assetand and use change trends, them review if such theyWe residual are recognize different as from the ourprospectively. effect previous estimates. of changes in estimatesIn 2017, in we net reviewed the income plant depreciation and rates for equipment. allestimated of The our review property, useful resultedinfrastructure in lives an assets. increaseprospectively. of in They did the These not certainstatements have in a of changes material 2017 effectdepreciation and in on our future have they our periods. financial will wireless not beenWe have network use a applied material estimatesattributable effect 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. with the acquisition, construction, A CGU is thecash smallest inflows identifiable largely groupassets of independent or assets groups of of that assets. the generates cash inflows fromRecognition other 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 is CGU 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 estimated useful life or lease term Estimated useful life Straight-line 3 to 5 years Straight-line 3 to 40 years Straight-line 4 to 10 years sites on which they are located (see note 19); and condition for their intended use; software Equipment and vehicles Diminishing balance 3 to 20 years Customer premise equipment Leasehold improvements Straight-line Over shorter of Asset Basis BuildingsCable and wireless network Computer equipment and Diminishing balance 5 to 40 years 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 we test We recognizeretention all in costsinstallation net related costs income tocapitalized that as subscriber and relate incurred, acquisition depreciatedcustomer. over to except and the the connection expected life cable and ofWe network, the calculate Cable which gains andand are 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 • expected costs of decommissioning the items and• restoring the borrowing costs on qualifying assets. We depreciate property, plantuseful and life equipment over byfollows: its charging estimated depreciation expense to net income as Recognition and measurement, including depreciation We measurerecognition at property, cost andasset begin plant is recognizing ready depreciation and when forand the its equipment intended equipment is use.and carried accumulated Subsequently, upon impairment at losses. property, cost plant initial less accumulatedCost depreciation includes expenditures (capitalattributable expenditures) that to are directly constructed the assets includes: acquisition• of the the cost of materials• asset. and direct costs The labour; directly cost associated with of bringing self- the assets to a working NOTE 7: PROPERTY, PLANT AND EQUIPMENT ACCOUNTING POLICY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Furthermore, we use estimates in determining the recoverable methodology described above, while applying assumptions amount of property, plant and equipment. The determination of consistent with those a market participant would make. Future the recoverable amount for the purpose of impairment testing cash flows are based on our estimates of expected future requires the use of significant estimates, such as: operating results of the CGU. Our estimates of future cash flows, • future cash flows; terminal values, and discount rates consider similar factors to • terminal growth rates; and those described above for value in use estimates; or • discount rates. • Usingamarketapproach–weestimatetherecoverableamount of the CGU using multiples of operating performance of We estimate value in use for impairment tests by discounting comparable entities and precedent transactions in that industry. estimated future cash flows to their present value. We estimate the discounted future cash flows for periods of up to five years, Wemakecertainassumptionswhenderivingexpectedfuturecash depending on the CGU, and a terminal value. The future cash flows flows, which may include assumptions pertaining to discount and are based on our estimates and expected future operating results terminal growth rates. These assumptions may differ or change of the CGU after considering economic conditions and a general quickly depending on economic conditions or other events. It is outlook for the CGU’s industry. Our discount rates consider market therefore possible that future changes in assumptions may rates of return, debt to equity ratios, and certain risk premiums, negatively affect future valuations of CGUs and goodwill, which among other things. The terminal value is the value attributed to could result in impairment losses. the CGU’s operations beyond the projected time period of the cash flows using a perpetuity rate based on expected economic JUDGMENTS conditions and a general outlook for the industry. We make significant judgments in choosing methods for We determine fair value less costs to sell in one of the following two depreciating our property, plant and equipment that we believe ways: most accurately represent the consumption of benefits derived • Analyzing discounted cash flows – we estimate the discounted from those assets and are most representative of the economic future cash flows for periods of five to ten years, depending on substance of the intended use of the underlying assets. the CGU, and a terminal value, similar to the value in use

EXPLANATORY INFORMATION

(In millions of dollars) December 31, 2017 December 31, 2016 December 31, 2015 Net Net Net Accumulated carrying Accumulated carrying Accumulated carrying Cost depreciation amount Cost depreciation amount Cost depreciation amount Land and buildings 1,090 (397) 693 1,062 (375) 687 998 (347) 651 Cable and wireless networks 20,252 (13,206) 7,046 20,108 (13,035) 7,073 20,900 (13,579) 7,321 Computer equipment and software 4,996 (2,807) 2,189 4,296 (2,424) 1,872 5,294 (3,421) 1,873 Customer premise equipment 1,565 (1,090) 475 1,560 (1,156) 404 1,658 (1,197) 461 Leasehold improvements 496 (220) 276 457 (193) 264 423 (175) 248 Equipment and vehicles 1,246 (782) 464 1,169 (720) 449 1,311 (868) 443 Total property, plant and equipment 29,645 (18,502) 11,143 28,652 (17,903) 10,749 30,584 (19,587) 10,997

The tables below summarize the changes in the net carrying amounts of property, plant and equipment during 2017 and 2016.

(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.

116 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 117 amount Year ended Net carrying 1 December 31, 2016 d based upon fair value less ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT equipmentonerous contract charges 484 412 Intangible asset Estimated useful life Customer relationshipsRoaming agreements 3 to 10 years 12 years (In millions of dollars) Impairment of property, plant and Onerous contracts and otherTotal impairment of assets and related The $484 million chargesuch related that to we a discontinued changeIPTV the in internal strategic development direction product of ourdeveloped in legacy in lieudetermined tandem of there is with aassets no that were Comcast forthcoming significant impaired as salvagecosts determine Corporation. IPTV value product We of forrepresent any being have the disposal. remaining of contractual the The liabilitiesof 72 for our IPTV the onerous product development andaccrued were contracts recognized in liabilities. accounts chargessegment. payable and All primarily related charges impacted our Cable This charge is included withinon “restructuring, our acquisition Consolidated and Statements other” of Income (see note 9). Indefinite useful lives We do not amortize intangible assetsspectrum licences, with broadcast indefinite licences, lives, and including certain brand names. Finite useful lives We amortizedepreciation and intangible amortization onIncome, assets the Consolidated except Statements with of programmingoperating costs rights, finite on which thestraight-line useful Consolidated are basis Statements over amortized lives of their Income,table into estimated on into useful below. a lives We asvalues, noted monitor and in and the amortizationchange review them methods if the they at arerecognize useful different least from the lives, our once previous effectsprospectively. residual per estimates. We of year changes and in estimates in net income amount Additions Depreciation Impairment Other Net carrying purchase taxes, afterand deducting trade discounts and rebates; intended use. Includes disposals, reclassifications, and other adjustments. 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 • any directly attributable cost of preparing the asset for its ACCOUNTING POLICY RECOGNITION AND MEASUREMENT, INCLUDING AMORTIZATION Land and buildingsCable and wireless networksComputer equipment and softwareCustomer premise equipmentLeasehold improvementsEquipment and vehiclesTotal property, plant and equipment 1,873 7,321 732 461 651 1,173 10,997 248 240 2,352 (522) (1,216) 64 443 46 (2,183) (296) (207) (205) 97 (28) (4) (412) (30) – – (91) 1,872 – (5) 7,073 (1) – 10,749 – – 404 NOTE 8: – INTANGIBLE ASSETS AND GOODWILL 687 – 264 449 During the year endedcharge December of $484 31, million 2016, forrelated we asset impairment recorded to and a our onerous total contracts legacy Internet Protocol television (IPTV) product. IMPAIRMENT OF ASSETS AND RELATED ONEROUS CONTRACT CHARGES 1 Property, plant and equipment notsubject yet in service to and$1,076 therefore not million depreciation (2016interest as – pertaining $949recognized at million). to at During December a(2016 2017, property, – weighted 3.9%). capitalized 31, average plant rate 2017 andIn of 2017, we approximately equipment was disposed of 4.0% carrying certain was land amount and building of assets$74 with $25 million a for net million. these assets, Weon thereby disposition. recognizing received a $49 total million gain proceeds of Annually, we perform an analysisthat to have identify fully been depreciated disposed assets of.to In 2017, cost this and resulted in$3,557 accumulated an million). adjustment depreciation The of disposalsStatements $1,136 had of nil million Income. impact (2016 on the – Consolidated (In millions of dollars) December 31, 2015 December 31, 2016 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Acquired program rights We reverse a previously recognized impairment loss, except in Program rights are contractual rights we acquire from third parties respect of goodwill, if our estimate of the recoverable amount of a to broadcast programs, including rights to broadcast live sporting previously impaired asset or CGU has increased such that the events. We recognize them at cost less accumulated amortization impairment recognized in a previous year has reversed. The and accumulated impairment losses. We capitalize program rights reversal is recognized by increasing the asset’s or CGU’s carrying on the Consolidated Statements of Financial Position when the amount to our new estimate of its recoverable amount. The licence period begins and the program is available for use and carrying amount of the asset or CGU subsequent to the reversal amortize them to other external purchases in operating costs on cannot be greater than its carrying amount had we not recognized the Consolidated Statements of Income over the expected an impairment loss in previous years. exhibition period. If we have no intention to air programs, we consider the related program rights impaired and write them off. USE OF ESTIMATES AND JUDGMENTS Otherwise, we test them for impairment as intangible assets with ESTIMATES finite useful lives. We use estimates in determining the recoverable amount of The costs for multi-year sports and television broadcast rights intangible assets and goodwill. The determination of the agreements are recognized in operating expenses during the recoverable amount for the purpose of impairment testing requires applicable seasons based on the pattern in which the rights are the use of significant estimates, such as: aired or are expected to be consumed. To the extent that • future cash flows; prepayments are made at the commencement of a multi-year • terminal growth rates; and contract towards future years’ rights fees, these prepayments are • discount rates. recognized as intangible assets and amortized to operating We estimate value in use for impairment tests by discounting expenses over the contract term. To the extent that prepayments estimated future cash flows to their present value. We estimate the are made for annual contractual fees within a season, they are discounted future cash flows for periods of up to five years, included in Other current assets on our Consolidated Statements depending on the CGU, and a terminal value. The future cash flows of Financial Position, as the rights will be consumed within the next are based on our estimates and expected future operating results twelve months. of the CGU after considering economic conditions and a general outlook for the CGU’s industry. Our discount rates consider market Goodwill rates of return, debt to equity ratios, and certain risk premiums, We recognize goodwill arising from business combinations when among other things. The terminal value is the value attributed to the fair value of the separately identifiable assets we acquired and the CGU’s operations beyond the projected time period of the liabilities we assumed is lower than the consideration we paid cash flows using a perpetuity rate based on expected economic (including the recognized amount of the non-controlling interest, if conditions and a general outlook for the industry. any). If the fair value of the consideration transferred is lower than that of the separately identified assets and liabilities, we We determine fair value less costs to sell in one of the following two immediately recognize the difference as a gain in net income. ways: • Analyzing discounted cash flows – we estimate the discounted IMPAIRMENT TESTING future cash flows for periods of five to ten years, depending on We test intangible assets with finite useful lives for impairment the CGU, and a terminal value, similar to the value in use whenever an event or change in circumstances indicates that their methodology described above, while applying assumptions carrying amounts may not be recoverable. We test indefinite-life consistent with those a market participant would make. Future intangible assets and goodwill for impairment once per year as at cash flows are based on our estimates of expected future October 1, or more frequently if we identify indicators of operating results of the CGU. Our estimates of future cash flows, impairment. terminal values, and discount rates consider similar factors to those described above for value in use estimates; or If we cannot estimate the recoverable amount of an individual • Usingamarketapproach–weestimatetherecoverableamount intangible asset because it does not generate independent cash of the CGU using multiples of operating performance of inflows, we test the entire CGU to which it belongs for impairment. comparable entities and precedent transactions in that industry. Goodwill is allocated to CGUs (or groups of CGUs) based on the Wemakecertainassumptionswhenderivingexpectedfuturecash level at which management monitors goodwill, which cannot be flows, which may include assumptions pertaining to discount and higher than an operating segment. The allocation of goodwill is terminal growth rates. These assumptions may differ or change made to CGUs (or groups of CGUs) that are expected to benefit quickly depending on economic conditions or other events. It is from the synergies of the business combination from which the therefore possible that future changes in assumptions may goodwill arose. negatively affect future valuations of CGUs and goodwill, which could result in impairment losses. Recognition and measurement of an impairment charge If our estimate of the asset’s or CGU’s recoverable amount is less An intangible asset or goodwill is impaired if the recoverable than its carrying amount, we reduce its carrying amount to the amount is less than the carrying amount. The recoverable amount recoverable amount and recognize the loss in net income of a CGU or asset is the higher of its: immediately. • fair value less costs to sell; and • value in use.

118 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo Net 84 119 194 230 136 amount carrying 7,050 7,244 3,905 6,600 11,149 amount losses Net carrying impairment Accumulated 2 Other seenote6),and$55millionin amortization Accumulated 1 losses ROGERS COMMUNICATIONS INC. impairment Cost prior to Net amount carrying Net losses impairment additions Amortization 2017 ANNUAL REPORT Accumulated 6,921 195 (55) (11) amortization Accumulated amount 10 (10) – – 10 (10) – – generate. After reviewother of factors, it the is competitive, ourlives view of legal, our that spectrum regulatory, these and factors broadcast and do licences. not limitJudgment the is useful also appliedintangible in choosing assets methods ofaccurately and represent amortizing the our consumption program ofrepresentative those assets of rights and the are most economic thatthe substance underlying assets. of we the intended believe useFinally, of most weallocation make of goodwill to judgments CGUsof or impairment groups in testing. of CGUs determining for the purpose CGUs and the 524289 (524) (75) – (5) – 209 523 332 (488) (91) – (5) 35 236 329 – (99) 230 324 – (99) 225 420 (270) (14) 136 420 (270) (14) 136 Net carrying losses 4,126 – (221) 3,905 4,126 – (221) 3,905 6,416 – – 6,4169,597 6,416 (2,349) (118) – 7,130 9,634 – (2,273) 6,416 (118) 7,243 1,609 (1,470) – 139 1,609 (1,414) – 195 13,723 (2,349) (339) 11,035 13,760 (2,273) (339) 11,148 impairment Cost prior to – – 84 Net 230 194 136 3,905 6,600 7,244 amount carrying 11,149 losses impairment Accumulated amortization Accumulated Consolidated Statements of Income. losses impairment Cost prior to Spectrum licencesBroadcast licences 6,600 329Acquired program – rights –Goodwill 263 – (99) (64) (5) 4,126 – (221) Marketing agreements 10 (10) – Brand names 420 (270) (14) Customer relationshipsRoaming agreements 1,609 (1,525) 524 (524) – – goodwill 13,881 (2,393) (339) Of the $119 million of total amortization, $64 million related toIncludes acquired disposals, program writedowns, rights reclassifications, is and included other in adjustments. other external purchases in operating costs ( depreciation and amortization on the Total intangible assets and Acquired program rightsGoodwillTotal intangible assets and goodwill 11,035 209 254 59 3,905 (119) (64) (21) – (10) – – Total intangible assets 7,130 254 (119) (21) Spectrum licencesBroadcast licencesBrand namesCustomer relationships 6,416 230 139 184 136 11 – – – – (55) – (11) – – – 1 2 (In millions of dollars) December 31, 2016 December 31, 2017 The tables below summarize the changes in the net carrying amounts of intangible assets and goodwill in 2017 and 2016. Indefinite-life intangible assets: EXPLANATORY INFORMATION (In millions of dollars) December 31, 2017 December 31, 2016 December 31, 2015 JUDGMENTS We make significant judgments thatintangible affect assets the and measurement goodwill. of our Judgment is appliedand when broadcast licences deciding as assets to withbelieve designate indefinite the useful our lives licences since spectrum we arefuture likely such to that be thereassets renewed is for are no the limit expectedjudgments foreseeable to to to the determine period generateanalyzing that over all net relevant which these factors, these cashasset, assets including the the have inflows. typical expected life indefinite usage We cyclethe of of lives, market the make the demand asset, for and the anticipated products changes and in services the asset helps Total intangible assets 9,755 (2,393) (118) Finite-life intangible assets: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions of dollars) December 31, 2015 December 31, 2016 Net carrying Net Net carrying amount additions Amortization 1 Other 2 amount Spectrum licences 6,416 – – – 6,416 Broadcast licences 225 – – 5 230 Brand names 136 – – – 136 Customer relationships 195 – (58) 2 139 Roaming agreements 35 – (35) – – 7,007 – (93) 7 6,921 Acquired program rights 236 46 (71) (2) 209 Total intangible assets 7,243 46 (164) 5 7,130 Goodwill 3,905 – – – 3,905 Total intangible assets and goodwill 11,148 46 (164) 5 11,035

1 Of the $164 million of total amortization, $71 million related to acquired program rights is included in other external purchases in operating costs (seenote6),and$93millionin depreciation and amortization on the Consolidated Statements of Income. 2 Includes disposals, writedowns, reclassifications, and other adjustments.

There were no acquisitions from business combinations for the years ended December 31, 2017 or 2016.

ANNUAL IMPAIRMENT TESTING For purposes of testing goodwill for impairment, our CGUs, or groups of CGUs, correspond to our operating segments as disclosed in note 4. Below is an overview of the methods and key assumptions we used in 2017 to determine recoverable amounts for CGUs, or groups of CGUs, with indefinite-life intangible assets or goodwill that we consider significant.

(In millions of dollars, except periods used and rates) Carrying value Period of Carrying value of indefinite-life Recoverable projected cash Terminal growth Pre-tax discount of goodwill intangible assets amount method flows (years) rates (%) rates (%) Wireless 1,160 6,733 Value in use 5 0.5 7.9 Cable 1,379 – Value in use 5 1.0 7.6 Media 937 241 Fair value less cost to sell 5 2.0 12.0

Our fair value measurement for Media is classified as Level 3 in the We did not recognize an impairment charge related to our fair value hierarchy. goodwill or intangible assets in 2017 or 2016 because the recoverable amounts of the CGUs exceeded their carrying values.

NOTE 9: RESTRUCTURING, ACQUISITION AND OTHER

During the year ended December 31, 2017, we incurred consisted of severance costs associated with the targeted $152 million (2016 – $644 million) in restructuring, acquisition and restructuring of our employee base and costs related to the wind- other expenses. These expenses in 2017 primarily consisted of down of and changes to certain businesses. In 2017, the severance costs associated with the targeted restructuring of our impairment of assets and related onerous contract charges (see employee base and certain contract termination costs. In 2016, in note 7) has been reported within restructuring, acquisition and addition to the $484 million impairment of assets and related other compared to a separate classification in the Consolidated onerous contract charges (see note 7), these expenses primarily Statements of Income in 2016.

120 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 121 are offset if there is a legally ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT current tax assets andand liabilities liabilities will on be a realized and net settled basis simultaneously. or the tax assets liabilities using enacted orapply substantively in enacted the tax years in ratesto which reverse. that the will temporary differences are expected Deferred tax assetsenforceable and right to liabilities offset currentrelate tax to assets income and taxes levied liabilities by and•thesametaxableentity;or the they same authority on: • different taxable entities where these entities intend to settle We recognize a deferredand tax deductible asset temporary differences forthat to unused future taxable the losses, income extent will tax be it credits, available is to use probable the asset. In 2016, we announced theventure. decision As to wind a down result our$140 shomi of million, joint that which decision,joint was we ventures, associated recorded recognized with a in thethe writedown net losses of loss the from estimated investment of and associates costobligations and of of shomi our2017, (most we share recognized significantly a of $20 videowind-down million the provision content of reversal remaining costs). related shomi, topartnership In contractual the (see which note accompaniedfrom 17). associates and This the joint ventures reversal windup (see note was 19). of recorded in the income primarily attributed topaper our (US USdenominated borrowings dollar-denominated CP) under our commercial banknot credit program hedged facilities for that accounting were borrowings purposesexchange gains (see were note and partially 16). offsetto These by foreign the the the change $99 in millionwhich US loss fair was related value primarily of dollar- attributed derivativespartially to offset (2016 the the –$16 foreign debt million exchangedenominated gain), derivatives risk borrowings. related we In to used these 2016, to USwere these primarily dollar- foreign attributed exchange to the losses USunder dollar-denominated borrowings ouraccounting bank purposes. credit Thesechange in losses fair facilities value in of theour that 2016 derivatives, debt which were derivatives was were that primarily offset a wererisk result related used not of by to to these offset the US hedged the dollar-denominated borrowings. foreign exchange for 9 15 13 11 (16) (18) (36) 761 191 216 758 2016 2016 – (5) 99 20 12 (18) (19) (14) 746 740 (107) 2017 2017 22 17 Note Note Years ended December 31 Years ended December 31 We calculate deferred tax assets and 1 instruments investments joint ventures liability Interest on borrowings includes interestdebt. on short-term borrowings and on long-term Capitalized interest Other Change in fair value of derivative Total finance costs Other investment income Total other (income) expense Net loss on divestitures pertaining to (Gain) loss on foreign exchange ACCOUNTING POLICY Income tax expense includes bothrecognize current income and tax deferred expense taxes. initem net We recognized income directly unless in it equity relatesWe or to provide other an for comprehensive income income. taxescurrently based available. on all of the information that is Current tax expense isour tax taxable we expect incomecurrent to or pay tax or loss receiveenacted expense during as based at on using the the reportingpayable date, year. tax or including receivable any We related adjustment rates to to previous calculate taxes years. enacted the Deferred or tax assets substantively andbetween liabilities arise the from temporary carryingrecognize differences amounts on our ofand Consolidated their the respective Statements tax assets bases. of and Financial liabilities Position we NOTE 12: INCOME TAXES NOTE 11: OTHER (INCOME) EXPENSE FOREIGN EXCHANGE We recognized $107 million in(2016 net foreign exchange – gains in $13 2017 million in net losses). These gains in 2017 were 1 NOTE 10: FINANCE COSTS (Income) losses from associates and (In millions of dollars) (In millions of dollars) Interest on borrowings Interest on post-employment benefits NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

USE OF ESTIMATES AND JUDGMENTS Below is a summary of the difference between income tax expense JUDGMENTS computed by applying the statutory income tax rate to income We make significant judgments in interpreting tax rules and before income tax expense and the income tax expense for the regulations when we calculate income tax expense. We make year. judgments to evaluate whether we can recover a deferred tax asset based on our assessment of existing tax laws, estimates of future Years ended December 31 profitability, and tax planning strategies. (In millions of dollars, except rates) 2017 2016 Statutory income tax rate 26.7% 26.6% EXPLANATORY INFORMATION Income before income tax expense 2,346 1,159

Years ended December 31 Computed income tax expense 626 308 Increase (decrease) in income tax expense (In millions of dollars) 2017 2016 resulting from: Current tax expense: Non-deductible stock-based Total current tax expense 351 386 compensation 9 5 Deferred tax expense (recovery): Non-deductible portion of equity Origination (reversal) of temporary losses – 18 differences 282 (65) Non-deductible loss on Revaluation of deferred tax balances available-for-sale investments 7 – due to legislative changes 2 3 Income tax adjustment, legislative tax change 2 3 Total deferred tax expense (recovery) 284 (62) Non-taxable portion of capital gain (10) (7) Total income tax expense 635 324 Other 1 (3) Total income tax expense 635 324 Effectiveincometaxrate 27.1% 28.0%

DEFERRED TAX ASSETS AND LIABILITIES

As at December 31 (In millions of dollars) 2017 2016 Deferred tax assets 3 8 Deferred tax liabilities (2,206) (1,917) Net deferred tax liability (2,203) (1,909)

Below is a summary of the movement of net deferred tax assets and liabilities during 2017 and 2016.

Property, plant and Goodwill Non-capital Deferred tax assets (liabilities) equipment and other loss (In millions of dollars) and inventory intangibles Investments carryforwards Other Total January 1, 2017 (947) (953) (61) 24 28 (1,909) Expense in net income (113) (117) (3) (6) (45) (284) (Expense) recovery in other comprehensive income – – (62) – 57 (5) Other – (5) – – – (5) December 31, 2017 (1,060) (1,075) (126) 18 40 (2,203)

Property, Stub period plant and Goodwill income and Non-capital Deferred tax assets (liabilities) equipment and other partnership loss (In millions of dollars) and inventory intangibles reserve Investments carryforwards Other Total January 1, 2016 (921) (844) (178) (61) 32 (85) (2,057) (Expense) recovery in net income (26) (109) 178 7 (8) 20 62 (Expense) recovery in other comprehensive income – – – (7) – 93 86 December 31, 2016 (947) (953) – (61) 24 28 (1,909)

122 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 2 123 (59) 553 517 835 515 2016 2016 1,949 1,455 $1.62 $1.62 (61) 587 2 2017 2,041 1,515 517 515 2017 As at December 31 1,711 $3.32 $3.31 Years ended December 31 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT shares outstanding – basic restricted share units Basic Diluted Weighted average number of Employee stock options and outstanding – diluted year millions): Total accounts receivable Allowance for doubtful accounts EXPLANATORY INFORMATION (In millions of dollars) EXPLANATORY INFORMATION (In millions of dollars, except peramounts) share Other accounts receivable Earnings per share: For the twelve489,835 months options out ended of December thecalculation money 31, of (2016 2017, – earnings nil)from there per for the calculation purposes were share. of of These the the were effect anti-dilutive. options of dilutive were securities excluded because they Weighted average number of shares Numerator (basic) – Net income for the Denominator – Number of shares (in Effect of dilutive securities (in millions): Customer accounts receivable There areinvestments taxable in temporaryrecognize differences Canadian deferred tax associated domesticbecause liabilities we with for subsidiaries. are these able our reversal We to temporary is control differences not the do probable timingtaxable in of not the temporary the foreseeable reversal differences future. andsignificant are Reversing tax the these implications. not expected to result in any 1 51 14 36 2016 – 64 23 41 2017 As at December 31 ble initially at fair value, and against future capital gains jurisdictions between 2023 and 2036 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 NOTE 14: ACCOUNTS RECEIVABLE ACCOUNTING POLICY We initiallyoriginate. recognize We measure accounts accounts receiva receivable on the date they We calculate basic earningsor per share loss by attributable dividingNon-Voting the to shareholders net by our income the RCI weightedClass average A Class Voting number A and of RCI RCI and Voting Class Class and B Non-Voting B RCI shares Non-Votingthe (Class Class year. Shares, A B Shares respectively) outstanding during We calculate dilutedincome earnings or loss pershareholders attributable and share the to weighted by Class averageand number adjusting A Class of Class the and B Adilutive Class Non-Voting net Shares B Shares potential outstanding Non-Voting method common for for calculating the shares. diluted effect earnings Wethe per of impact share, of use which all employee considers stock theinstruments. options and other treasury potentially dilutive stock Options with tandemalternatives stock appreciation are rights accountedawards or for can cash be as payment exchangedthey cash-settled for are awards. common considered As sharescalculation potentially of of these the dilutive the Company’s and diluted Company, have net a are earnings dilutive impact per included in share the in if period. they the NOTE 13: EARNINGS PER SHARE ACCOUNTING POLICY Capital losses in Canada that can be applied We have not recognized deferred tax assets for the following items: (In millions of dollars) Total unrecognized temporary differences Deductible temporary differences in foreign Tax losses in foreign jurisdictions that expire NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15: INVENTORIES

ACCOUNTING POLICY EXPLANATORY INFORMATION We measure inventories, including wireless devices and merchandise for resale, at the lower of cost (determined on a As at December 31 first-in, first-out basis) and net realizable value. We reverse a (In millions of dollars) 2017 2016 previous writedown to net realizable value, not to exceed the original recognized cost, if the inventories later increase in value. Wireless devices and accessories 251 236 Other finished goods and merchandise 62 79 Total inventories 313 315

Cost of equipment sales and merchandise for resale includes $2,231 million (2016 – $2,088 million) of inventory costs for 2017.

NOTE 16: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

ACCOUNTING POLICY Recognition We initially recognize cash and cash equivalents, bank advances, accounts receivable, debt securities, and accounts payable and accrued liabilities on the date they originate. All other financial assets and financial liabilities are initially recognized on the trade date when we become a party to the contractual provisions of the instrument.

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 fair value through profit or loss, 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 Measurement method Financial assets Cash and cash equivalents Loans and receivables Amortized cost Accounts receivable Loans and receivables Amortized cost Investments, available-for-sale Available-for-sale 1 Fair value Financial liabilities Bank advances Other financial liabilities Amortized cost Short-term borrowings Other financial liabilities 2 Amortized cost Accounts payable Other financial liabilities Amortized cost Accrued liabilities Other financial liabilities Amortized cost Long-term debt Other financial liabilities 2 Amortized cost

Derivatives 3 Debt derivatives 4 Held-for-trading Fair value Bond forwards Held-for-trading Fair value Expenditure derivatives Held-for-trading Fair value Equity derivatives Held-for-trading 5 Fair value

1 Subsequently measured at fair value with changes recognized in other comprehensive income. The net change subsequent to initial recognition, in the case of investments, is reclassified into net income upon disposal of the investment or when the investment becomes impaired. 2 Subsequently measured at amortized cost using the effective interest method. 3 The 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 portion of the hedge is recognized in accumulated other comprehensive income and the ineffective portion of the hedge is recognized immediately into net income. 4 Debt derivatives related to our credit facility and commercial paper borrowings have not been designated as hedges for accounting purposes. 5 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.

124 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 125 – we measure an impairment ROGERS COMMUNICATIONS INC. – we measure an impairment loss for loans Total return swap agreements Cross-currency interest rate exchange agreements Forward foreign exchange agreements (fromto time time as necessary) Forward interest rate agreements Forward foreign exchange agreements 2017 ANNUAL REPORT • • • • • loans and receivables and receivables as the excess ofover the the carrying present amount of value thefrom of asset it, future cash if flowsdoubtful any. accounts we and The expect recognized as difference to aavailable-for-sale derive loss is in financial allocated net income. assets toloss an on available-for-sale allowance financial for assetsto as acquire the the excess asset of (less therecognized) any cost impairment over loss its we havereclassified current previously fair from value, theequity if available-for-sale to any. net reserve income. The in difference shareholders’ is 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 assessing determining whetherdesignated the whether for forecasted as our transactions materialize hedge hedged as accounting. itemsdesignated forecasted, as effective These in whether hedgesto for qualitatively hedging the accounting be purposes effective, continue hedging relationshipsdetermine and determining the relationships will the methodology fairhedging relationships. to values used in testing the effectiveness of Impairment testing We consider a financial asset impairedthat if one there or is more objective events evidence havefuture had cash a flows negative and effect the onassets effect its can estimated that be reliably estimated. areindividually. Financial All other significant financial assets areon in assessed the collectively nature value based of each asset. are testedWe measure impairment for for financial assets impairment • as follows: • compensation expense principal anddenominated interest long-term debt payments for USforecasted dollar- interest paymentsterm debt for expected long- forecasted US dollar-denominated expenditures Derivative The risk they manage Types of derivative instruments Debt derivatives • Impact of fluctuations in foreign exchange rates on Bond forwardsExpenditure derivatives • • Impact Impact ofEquity of derivatives fluctuations fluctuations in in foreign exchange market rates interest on rates on • Impact of fluctuations in share price on stock-based Available-for-sale financial assets reserve The available-for-saleaccumulated financial change assetsinvestments, less in reserve accumulatedinvestments fair impairment and represents accumulated losses amounts reclassified value related the intoupon net disposal income to of of investments. the our available-for-sale Deferred transaction costs We defer transaction costsand associated with direct issuing long-term costsfacilities debt we and amortize payover them the to life using of lenders the the related instrument. to effective obtain interest method revolving credit 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 We use derivativespurposes. only to manage risk, andWhen not for we speculative instrument designate for accounting ahedging purposes, we derivative instrument firstchanges will instrument determine in that fair be as the valuethen highly or a formally cash effective document flowsinstrument hedging of the in the and relationship item offsetting hedgedobjectives between it and the is item, the strategy hedging. and hedging including theongoing We effectiveness methods of the we the hedging will risk relationship. use to management assessWe the assess, on a quarterlycontinues basis, to be whether highly each effective hedgingvalue in instrument or offsetting cash flows the of changes the in item the it fair isWe hedging. assess host contracts inrequiring order separation to from identify embedded the derivatives hostembedded contracts and account derivatives forbecome these as party to a contract. separate derivatives when we first Derivative instruments We use derivative instruments to manage risks related to certain activities in which we are involved. They include: 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 (In millions of dollars) 2017 2016 discussed below to ensure our risks and the related exposures are Customer accounts receivables (net of consistent with our business objectives and risk tolerance. Below is allowance for doubtful accounts) a summary of our risk exposure by financial instrument. Less than 30 days past billing date 896 849 30-60 days past billing date 303 298 Financial instrument Financial risks 61-90 days past billing date 113 134 Financial assets Greater than 90 days past billing date 73 115 Cash and cash equivalents Credit and foreign exchange Total 1,385 1,396 Accounts receivable Credit and foreign exchange Investments, available-for-sale Liquidity, market price, and foreign exchange Below is a summary of the activity related to our allowance for doubtful accounts. Financial liabilities Bank advances Liquidity Years ended December 31 Short-term borrowings Liquidity, foreign exchange, (In millions of dollars) 2017 2016 and interest rate Accounts payable Liquidity Balance, beginning of year 59 86 Accrued liabilities Liquidity Allowance for doubtful accounts Long-term debt Liquidity, foreign exchange, expense 88 54 and interest rate Net use (86) (81) Balance, end of year 61 59 Derivatives 1 Debt 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. Bond forwards Credit, liquidity, and interest We monitor and take appropriate action to suspend services when rate customers have fully used their approved credit limits or violated Expenditure derivatives Credit, liquidity, and foreign established payment terms. While our credit controls and exchange processes have been effective in managing credit risk, they cannot Equity derivatives Credit, liquidity, and market eliminate credit risk and there can be no assurance that these price controls will continue to be effective or that our current credit loss 1 Derivatives can be in an asset or liability position at a point in time historically or in the experience will continue. future. Credit risk related to our debt derivatives, bond forwards, CREDIT RISK expenditure derivatives, and equity derivatives arises from the Credit risk represents the financial loss we could experience if a possibility that the counterparties to the agreements may default counterparty to a financial instrument, from whom we have an on their obligations. We assess the creditworthiness of the amount owing, failed to meet its obligations under the terms and counterparties to minimize the risk of counterparty default and do conditions of its contracts with us. not require collateral or other security to support the credit risk associated with these derivatives. Counterparties to the entire Our credit risk exposure is primarily attributable to our accounts portfolio of our derivatives are financial institutions with a S&P receivable and to our debt and expenditure derivatives. Our broad Global Ratings (or the equivalent) ranging from A+ to AA-. customer base limits the concentration of this risk. Our accounts receivable on the Consolidated Statements of Financial Position are LIQUIDITY RISK net of allowances for doubtful accounts, which management Liquidity risk is the risk that we will not be able to meet our financial estimates based on prior experience and an assessment of the obligations as they fall due. We manage liquidity risk by managing current economic environment. We believe that our allowance for our commitments and maturities, capital structure, and financial doubtful accounts sufficiently reflects the credit risk associated with leverage (see note 3). We also manage liquidity risk by continually our accounts receivable. As at December 31, 2017, $489 million monitoring actual and projected cash flows to ensure we will have (2016 – $541 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.

126 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 127 5years 5years More than More than years years 4to5 4to5 tives. tives. years years 1to3 1to3 ROGERS COMMUNICATIONS INC. 1year 1year Less than Less than 2017 ANNUAL REPORT cash flows cash flows Contractual Contractual – (8,996)– (201) – (1,880) (201) – – (7,116) – – – (8,405)– (1,756) (934) – (934) – – (6,649) – – 18,093 18,309 4,387 2,684 2,353 8,885 17,885 18,148 6,016 1,796 2,052 8,284 amount amount Carrying Carrying 5years 5years More than More than 1 1 1 1 1year 1to3years 4to5years 1year 1to3years 4to5years 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) – (1,732) (1,249) – (483) 1,708 – 1,240 – 7,417 468 – – – 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) – (1,506) (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) – 201 201 – – – Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar) – 956 956 – – – 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 Bank advancesShort-term borrowingsAccounts payable and accrued liabilitiesLong-term debtOther long-term financial liabilitiesExpenditure derivative instruments: Equity derivative instrumentsDebt derivative instruments accounted for as hedges: 2,783 2,783 18 800 2,783 71 16,080 800 18 – 16,197 71 800 – – – 750 71 – (8) 3,081 12 – 2,350 – (8) – 3 10,016 – – – 3 – – – 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 – – – – – – December 31, 2016 (in millions of dollars) December 31, 2017 (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, 2017 impact and 2016. of the associated debt December 31, 2016 (In millions of dollars) 1 Below is a summary ofas the at undiscounted December contractual 31, maturities 2017 of and 2016. our financial liabilities andDecember 31, the 2017 receivable components of(In our millions derivatives of dollars) Debt derivative instruments not accounted for as hedges: Bond forwardsNet carrying amount of derivatives (asset) (1,659) – 51 – 51 – – odowrs–6464––– Debt derivative instruments not accounted for as hedges: Bondforwards Net carrying amount of derivatives (asset) (1,094) Net interest payments 712Net interest payments 1,160 727 908 1,294 5,409 1,033 5,832 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 available-for-sale term borrowings, senior notes, and bank credit facilities as at investments or our share price will affect our income, cash flows, or December 31, 2017 and 2016 with all other variables held the value of our financial instruments. The derivative instruments we constant. It shows how net income and other comprehensive use 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) 2017 2016 2017 2016 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 traded investments. $1 change – – 14 14 Expenditure derivatives – change in Market price risk – Class B Non-Voting Shares foreign exchange rate Our liability related to stock-based compensation is remeasured at $0.01 change in Cdn$ relative fair value each period. Stock-based compensation expense is to US$ – – 9 9 Short-term borrowings affected by the change in the price of our Class B Non-Voting 1% change in interest rates 12 6 – – Shares during the life of an award, including stock options, Senior notes (floating) restricted share units (RSUs), and deferred share units (DSUs). We 1% change in interest rates – 2 – – use equity derivatives from time to time to manage the exposure in Bank credit facilities (floating) our stock-based compensation liability. As a result of our equity 1% change in interest rates – 2 – – derivatives, a one-dollar change in the price of a Class B Non-Voting Shares would not have a material effect on net income. DERIVATIVE INSTRUMENTS FOREIGN EXCHANGE RISK As at December 31, 2017 and 2016, all of our US dollar- We use debt derivatives to manage risks from fluctuations in denominated long-term debt instruments were hedged against foreign exchange rates associated with our US dollar-denominated fluctuations in foreign exchange rates for accounting purposes. long-term debt and short-term borrowings. We designate the debt Below is a summary of our net asset (liability) position for our derivatives related to our senior notes and senior debentures as various derivatives. hedges for accounting purposes against the foreign exchange risk associated with specific debt instruments. We have not designated the debt derivatives related to our US CP program as hedges for As at December 31, 2017 accounting purposes. We use expenditure derivatives to manage Notional Notional Fair the foreign exchange risk in our operations, designating them as (In millions of dollars, except amount Exchange amount value hedges for certain of our forecasted operational and capital exchange rates) (US$) rate (Cdn$) (Cdn$) expenditures. As at December 31, 2017, all of our US dollar- Debt derivatives accounted for denominated long-term debt and short-term borrowings were as cash flow hedges: hedged against fluctuations in foreign exchange rates using debt As assets 5,200 1.0401 5,409 1,301 derivatives. With respect to our long-term debt and US CP As liabilities 1,500 1.3388 2,008 (149) program, as a result of our debt derivatives, a one-cent change in Short-term debt derivatives not accounted for as hedges: the Canadian dollar relative to the US dollar would have no effect As liabilities 746 1.2869 960 (23) on net income. Net mark-to-market debt A portion of our accounts receivable and accounts payable and derivative asset 1,129 accrued liabilities is denominated in US dollars. Due to the short- Bond forwards accounted for as term nature of these receivables and payables, they carry no cash flow hedges: significant risk from fluctuations in foreign exchange rates as at As liabilities 900 (64) December 31, 2017. Expenditure derivatives accounted for as cash flow hedges: INTEREST RATE RISK As assets 240 1.2239 294 5 We are exposed to risk of changes in market interest rates due to As liabilities 960 1.2953 1,243 (44) the impact this has on interest expense for our short-term Net mark-to-market expenditure borrowings and bank credit facilities. We were previously exposed derivative liability (39) to risk of changes in market interest rates due to our $250 million Equity derivatives not accounted floating rate senior unsecured notes that were repaid this year. As for as hedges: at December 31, 2017, 89.5% of our outstanding long-term debt As assets 276 68 and short-term borrowings was at fixed interest rates (2016 – Net mark-to-market asset 1,094 91.2%).

128 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo – – 129 (53) (45) (671) (280) 2016 Total Total 1,659 1,094 1,374 1,094 11,167 11,167 13,321 (11,159) (11,212) (13,215) instruments instruments – (79) 2017 9,692 2,310 (9,754) (2,327) Equity Equity 12,002 (12,081) derivatives derivatives Years ended December 31 ROGERS COMMUNICATIONS INC. derivatives derivatives Expenditure Expenditure Bond Bond forwards forwards 2017 ANNUAL REPORT Debt Debt derivatives derivatives US commercial paper credit facility borrowings US commercial paper credit facility borrowings contracts forward contracts derivatives and forward contracts (unhedged) (unhedged) Below is a summaryand of forward the contracts. net cash payments on debt derivatives Proceeds on debt derivatives related to Proceeds on debt derivatives related to Total proceeds on debt derivatives Payments on debt derivatives related to Payments on debt derivatives related to Payments on termination of forward Total payments on debt derivatives and (In millions of dollars) Net payments on settlement of debt Debt Debt Fair value (Cdn$) (hedged) (hedged) derivatives derivatives (Cdn$) amount Notional rate As at December 31, 2016 Exchange (US$) amount Notional As assetsAs liabilitiesAs liabilities 5,200 1,500 1.0401 1.3388As liabilities 5,409 2,008 150 1,751 (68) 1.3407As assets 201As liabilities – –As assets – 990 300 1.2967 900 1.4129 1,284 424 (51) 40 (21) – – 270 8 accounted for as hedges: derivative assetcash flow hedges: accounted for as cash flow hedges: derivative assetfor as hedges: 1,683 19 as cash flow hedges: Mark-to-market assetMark-to-market liabilityMark-to-market asset (liability) 1,683 1,751 (68) – – – (51) – (51) 19 (21) 40 8 – 8 1,659 1,799 (140) Derivative instruments, beginning of periodProceeds received from settlement of derivatives 1,683 – (12,002) – – (51)Derivative instruments, beginning of periodProceeds received from settlement of derivativesPayment (1,207) on derivatives entered(Decrease) increase in fair value 19 of derivativesDerivative instruments, end of period (6) 2,028 8 – (345) (11,167) – 1,683 – (91) – 8 (1,116) 11,159 (13) 158 – 53 (2) (48) (51) (15) (12,285) 1,025 2,080 25 19 – (373) 8 12,237 1,659 Payment on derivatives entered(Decrease) increase in fair value of derivatives (531) (102) – (13) 12,081 (91) – 66 1,240 – Derivative instruments, end of periodMark-to-market assetMark-to-market liabilityMark-to-market asset (liability) 1,152 (23) (64) 1,152 1,301 (149) (39) (23) (23) – (64) 68 (64) – (39) (44) 5 68 – 68 Year ended December 31, 2016 (In millions of dollars) Year ended December 31, 2017 (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 1,659 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 2017 and 2016. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Below is a summary of the derivative instruments assets and Year ended December 31, 2016 derivative instruments liabilities reflected on our Consolidated (In millions of dollars, Notional Exchange Notional Statements of Financial Position. except exchange rates) (US$) rate (Cdn$) Credit facilities As at December 31 Debt derivatives entered 8,683 1.31 11,360 (In millions of dollars) 2017 2016 Debt derivatives settled 8,533 1.31 11,159 Net cash received 8 Current asset 421 91 Long-term asset 953 1,708 We did not enter into any debt derivatives related to senior notes in 1,374 1,799 2017. In 2016, we entered into debt derivatives to hedge the Current liability (133) (22) foreign currency risk associated with the principal and interest Long-term liability (147) (118) components of the US dollar-denominated senior notes issued on November 4, 2016 (see note 20). Below is a summary of the debt (280) (140) derivatives we entered into to hedge senior notes issued during Net mark-to-market asset 1,094 1,659 2016.

As at December 31, 2017, US$6.7 billion notional amount of our US$ Hedging effect outstanding debt derivatives have been designated as hedges for (In millions of dollars, except for Fixed accounting purposes (2016 – US$6.7 billion). As at December 31, coupon and Principal/ hedged 2017, 100% of our currently outstanding bond forwards and interest rates) Notional (Cdn$) expenditure derivatives have been designated as hedges for amount Maturity Coupon interest Equivalent accounting purposes (2016 – 100%). In 2017, we recognized a Effective date (US$) date rate rate 1 (Cdn$) $3 million increase to net income related to hedge ineffectiveness November 4, 2016 500 2026 2.900% 2.834% 671 (2016 – $5 million increase). 1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate. Debt derivatives We did not settle any debt derivatives related to senior notes We use cross-currency interest exchange agreements to manage during 2017 and 2016. risks from fluctuations in foreign exchange rates associated with our US dollar-denominated debt instruments, credit facility borrowings, and commercial paper borrowings (see note 18). We designate the debt derivatives related to our senior notes and debentures as hedges for accounting purposes against the foreign exchange risk associated with specific debt instruments. We do not designate the debt derivatives related to our credit facility borrowings or commercial paper borrowings as hedges for accounting purposes. During 2017 and 2016, we entered into and settled debt derivatives related to our credit facility borrowings and US CP program as follows:

Year ended December 31, 2017 (In millions of dollars, except Notional Exchange Notional exchange rates) (US$) rate (Cdn$) Credit facilities Debt derivatives entered 1,610 1.32 2,126 Debt derivatives settled 1,760 1.32 2,327 Net cash paid (17)

Commercial paper program Debt derivatives entered 8,266 1.30 10,711 Debt derivatives settled 7,521 1.29 9,692 Net cash paid (62)

130 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 131 500 400 900 2016 2016 (Cdn$) Notional sextendedin 500 400 900 2017 rate 1 Exchange Years ended December 31 Hedged GoC 840 1.22 1,025 990 1.33 1,318 (US$) ROGERS COMMUNICATIONS INC. interest rate as at Notional December 31, 2016 2017 (Cdn$) Notional Hedged GoC 2017 ANNUAL REPORT interest rate as at rate December 31, 2017 Exchange During 2017, we recognized a$74 recovery, net of million interestcompensation receipts, expense (2016 of related to –equity the change derivative $33 inDecember fair contracts 31, million value 2017, of the net recovery), our fairasset value of of of $68 in the million received equitycurrent (2016 portion derivatives stock-based – of was payments. derivative $8 an instruments. million As asset), which isAs at included at in December 31,for 2017, 5.4 million we (2016 had –weighted 5.4 equity average million) derivatives price Class of outstanding B $51.44 Non-Voting (2016 Shares – with $50.30). 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. accounts We their determine fairinvestments the using values fair quotedvalue market value of values. our of We privatefollow-on determine investments financing each rounds, by the third-party of using sale fair based negotiations, implied or our valuations market- approaches. from publicly-traded investment These depending are onprospects. applied its appropriately future operating to andThe each fair values profitability of eachthe of our period-end public debt estimated instruments are based market on yields, or period-end trading the bond forward at theinto time finance of settlement costs andinterest from will rate be the reclassified method hedgingnotes over due reserve 2026. the using life the of effective the US$500 million senior amount Notional 930 1.33 1,240 840 1.27 1,070 (US$) entered to hedge the underlying Government of Canada (GoC) 10-year rate Notional 1 Bond forwards with maturity dates beyond December 31, 2017 are subject to GoC rate re-setting from time to time. The $400 million due in December 2018 wa December 2017 such that its rate will reset in April 2018. 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 2017, for each we under further of our one-year conditions substantially with equity revised derivative the expiry dates ofThe same April equity 2018 (from committed derivatives April 2017). accounting terms have purposes. not and been designatedDuring as 2017, hedges we settled for existing equityof derivatives $6 for million net and proceeds entered intoNon-Voting new Shares derivatives on with 1.0 million an2016, Class expiry B date we of settledaverage March price 2018. 0.3 of In $58.16 as August millionshare-based a compensation result units equity outstanding. of a derivatives reduction in at the number a of weighted As at December 31, 2017, wederivatives had US$1,200 outstanding million (2016 of expenditure rate – US$1,290 of million), $1.28/US$ranging at an (2016 from average – January2017 to 2018 $1.32/US$), December 2018). to with Ourmaturing outstanding December terms expenditure in derivatives 2019 to 2018 (2016$1.30/US$. maturity are –January hedged at an average exchange rate of Expenditure derivatives settled Expenditure derivatives entered (In millions of dollars, except exchange rates) On November 4, 2016, weforward exercised a due $500 million January notionalUS$500 4, bond million 2017 senior insettle notes the relation due derivative. to 2026 The the and amount paid issuance paid represents $53 of the million the fair to value of 1 for anticipated future debt that were outstanding as at December 31, 2017 and 2016. GoC term (years) Effective date Maturity date Expenditure derivatives Below is a summary ofto the certain expenditure forecasted derivatives expenditures. into which we entered during 2017 and 2016 to manage foreign exchange risk related (In millions of dollars, except interest rates) Bond forwards During 2017 or 2016, we did not enterBelow into is any a new summary bond of forwards. the bond forwards into which we have 1030Total December 2014 December 2014 April 30, 2018 December 31, 2018 400 500 2.65% 2.85% 2.62% 900 2.52% NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

values, where available. We determine the fair values of our debt Our disclosure of the three-level fair value hierarchy reflects the derivatives and expenditure derivatives using an estimated credit- significance of the inputs used in measuring fair value: adjusted mark-to-market valuation by discounting cash flows to the • financial assets and financial liabilities in Level 1 are valued by measurement date. In the case of debt derivatives and expenditure referring to quoted prices in active markets for identical assets derivatives in an asset position, the credit spread for the financial and liabilities; institution counterparty is added to the risk-free discount rate to • financial assets and financial liabilities in Level 2 are valued using determine the estimated credit-adjusted value for each derivative. inputs based on observable market data, either directly or For these debt derivatives and expenditure derivatives in a liability indirectly, other than the quoted prices; position, our credit spread is added to the risk-free discount rate for • Level 3 valuations are based on inputs that are not based on each derivative. observable market data. The fair values of our equity derivatives are based on the There were no material financial instruments categorized in Level 3 period-end quoted market value of Class B Non-Voting Shares. as at December 31, 2017 and 2016 and there were no transfers between Level 1, Level 2, or Level 3 during the respective periods. 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) 2017 2016 2017 2016 2017 2016 Financial assets Available-for-sale, measured at fair value: Investments in publicly-traded companies 1,465 1,047 1,465 1,047 – – Held-for-trading: Debt derivatives accounted for as cash flow hedges 1,301 1,751 – – 1,301 1,751 Expenditure derivatives accounted for as cash flow hedges 5 40 – – 5 40 Equity derivatives not accounted for as cash flow hedges 68 8 – – 68 8 Total financial assets 2,839 2,846 1,465 1,047 1,374 1,799 Financial liabilities Held-for-trading: Debt derivatives accounted for as cash flow hedges 149 68 – – 149 68 Debt derivatives not accounted for as hedges 23 – – – 23 – Bond forwards accounted for as cash flow hedges 64 51 – – 64 51 Expenditure derivatives accounted for as cash flow hedges 44 21 – – 44 21 Total financial liabilities 280 140 – – 280 140

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

As at December 31 (In millions of dollars) 2017 2016 Carrying amount Fair value 1 Carrying amount Fair value 1 Long-term debt (including current portion) 14,448 16,134 16,080 17,628

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, 2017 and 2016.

NOTE 17: INVESTMENTS

ACCOUNTING POLICY • private companies – at fair value using implied valuations from Investments in publicly-traded and private companies follow-on financing rounds, third-party sale negotiations, or We classify our investments in companies where we have no market-based approaches. control or significant influence as available-for-sale investments and account for them as follows: Investments in associates and joint arrangements • publicly-traded companies – at fair value based on publicly An entity is an associate when we have significant influence over the quoted prices; and entity’s financial and operating policies but do not control the entity. We are generally presumed to have significant influence over an entity when we hold more than 20% of the voting power.

132 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 133 834 518 (216) (431) 2016 1,596 1,641 3,391 (2,027) (1,186) (1,082) 14 20 927 515 (825) 2017 1,706 1,775 3,269 (1,686) (1,184) ROGERS COMMUNICATIONS INC. As at or years ended December 31 2017 ANNUAL REPORT One of our jointright ventures to has require a our non-controllinginterest interest joint at a that venture future has to date a at purchase fair that value. non-controlling Our share of net income (loss) Expenses Net income (loss) Our share of net assets Revenue Current liabilities Long-term liabilities Total net assets Current assets Long-term assets (In millions of dollars) INVESTMENTS, ASSOCIATES, AND JOINT VENTURES We have interestssome in of which a include: number of associates andMaple joint Leaf Sports ventures, and Entertainment LimitedMLSE, (MLSE) a sports andthe Air entertainment Canada company, Centre, owns theToronto NHL’s and Raptors, Toronto operates MLS’ Maple Toronto Leafs,the the FC, AHL’s NBA’s the Toronto CFL’s Marlies,Inc. Toronto and (BCE), Argonauts, other jointly assets. ownwith We, an our along indirect portion with net representing a 75% BCE investment 37.5% equity equity in interest interest MLSE in in is MLSE. MLSE equity Our method. accounted for as a joint venture usingGlentel the Glentel is a large,hundred multicarrier Canadian mobile wireless phone50% retail retailer equity distribution with interest outlets. several owned in We by BCE. Glentel, own Our investment a with inventure Glentel using the is the accounted equity remaining for method. as 50% a joint interest shomi shomi was a joint venturepreviously equally owned operated by Rogers aservice and offering Shaw premium movies and and subscription televisionthrough series video-on-demand for cable viewing onlineaccounted and set-top for as boxes. a jointwe venture announced Our using the the decision investment equity to(see method. wind note In in down 11). 2016, our In shomi shomi 2017,were joint the transferred venture remaining was assets to associated theirwas with officially shomi respective wound up. partners and theBelow partnership is asignificant associates summary and joint ventures of and our financial portions thereof. information pertaining to our 169 958 2016 1,047 1,216 2,174 167 929 2017 1,632 2,561 1,465 As at December 31 Private companies Publicly-traded companies arrangement; and obligations for the liabilities related to the arrangement. Investments, available-for-sale Investments, associates and joint ventures Total investments INVESTMENTS, AVAILABLE-FOR-SALE Publicly-traded companies We hold a numberyear of we interests in recognized publicly-traded realized$418 companies. losses This million of nil (2016unrealized and gains) – unrealized with gains nil corresponding of other amounts of comprehensive in income, respectively. realized net income losses and and $81 million of Investments in: EXPLANATORY INFORMATION (In millions of dollars) Impairment in associates and joint ventures At the end ofobjective each evidence reporting that period,associates impairment we and assess exists whether in jointcompare there the our is ventures. carrying investments amount Ifamount of in and the objective recognize investment the to evidenceany, excess its as over recoverable a exists, loss the in recoverable net we amount, income. if We use theassociates equity and method jointinterest to in ventures; the account assets, weoperations. for liabilities, revenue, recognize our and our expenses investments of proportionate our in joint We initially recognizeventures our at investmentscarrying cost amounts in and based associates onloss. subsequently our and Distributions share increase of joint carrying we amounts each or of entity’s our receive investments. decrease income from or the We these eliminate unrealized entities gainsassociates and reduce losses or from the joint ouramount investments of ventures in our interest against in the our entities. investments, up to the A joint arrangement existsthat when establishes there joint is control over aconsent activities contractual for and agreement strategic requires unanimous financialour and interests operating in decisions. joint arrangements We into classify • one of joint two categories: ventures – when we have the• rights to joint the operations net assets – of when the we have the rights to the assets and NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18: SHORT-TERM BORROWINGS Below is a summary of our short-term borrowings as at December 31, 2017 and 2016.

As at December 31 (In millions of dollars) 2017 2016 Accounts receivable securitization program 650 800 US commercial paper program 935 – Total short-term borrowings 1,585 800

Below is a summary of the activity relating to our short-term borrowings for the years ended December 31, 2017 and 2016.

Year ended December 31, 2017 Year ended December 31, 2016 Notional Exchange Notional Notional Exchange Notional (In millions of dollars, except exchange rates) (US$) rate (Cdn$) (US$) rate (Cdn$) Proceeds received from accounts receivable securitization 530 295 Repayment of accounts receivable securitization (680) (295) Net repayment of accounts receivable securitization (150) – Proceeds received from US commercial paper 8,267 1.30 10,712 ––– Repayment of US commercial paper (7,530) 1.29 (9,704) ––– Net proceeds received from US commercial paper 737 1.37 1,008 – Net proceeds received on short-term borrowings 858 –

ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM of Financial Position and the funding received is recognized as short- We participate in an accounts receivable securitization program term borrowings. The buyer’s interest in these trade receivables with a Canadian financial institution that allows us to sell certain ranks ahead of our interest. The program restricts us from using the trade receivables into the program. As at December 31, 2017, the receivables as collateral for any other purpose. The buyer of our proceeds of the sales were committed up to a maximum of trade receivables has no claim on any of our other assets. $1,050 million (2016 – $1,050 million). Effective July 8, 2016, we extended the term of the program from January 1, 2018 to US COMMERCIAL PAPER PROGRAM January 1, 2019. Effective October 27, 2017, we further extended In 2017, we entered into a US CP program that allowed us to issue the term of the program to November 1, 2020. up to a maximum aggregate principal amount of US$1 billion. In December 2017, we increased the maximum aggregate principal amount allowed under our US CP program to US$1.5 billion. As at December 31 Funds can be borrowed under this program with terms to maturity (In millions of dollars) 2017 2016 ranging from 1 to 397 days, subject to ongoing market conditions. Trade accounts receivable sold to Any issuances made under the US CP program will be issued at a buyer as security 1,355 1,460 discount. Borrowings under our US CP program are classified as Short-term borrowings from buyer (650) (800) short-term borrowings on our Consolidated Statements of Financial Position when they are due within one year from the date of the Overcollateralization 705 660 financial statements.

Year ended December 31, 2017 Years ended December 31 (In millions of dollars, Notional Exchange Notional (In millions of dollars) 2017 2016 except exchange rates) (US$) rate (Cdn$) Accounts receivable securitization US commercial paper, program, beginning of period 800 800 beginning of period ––– Net repayment of accounts Net proceeds received from US receivable securitization (150) – commercial paper 737 1.37 1,008 Accounts receivable securitization Discounts on issuance 1 91.3312 program, end of period 650 800 Gain on foreign exchange 1 (85) US commercial paper, end of We continue to service and retain substantially all of the risks and period 746 1.25 935 rewards relating to the accounts receivable we sell, and therefore, the receivables remain recognized on our Consolidated Statements 1 Included in finance costs.

134 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 135 Liabilities shomi Other Total ROGERS COMMUNICATIONS INC. Decommissioning 2017 ANNUAL REPORT provisions 4 – – 4 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) December 31, 2016AdditionsAdjustments to existing ReversalsAmounts usedDecember 31, 2017Current 35Long-term 112 20Decommissioning and 167 restoration costs Cash outflows – associated withgenerally our expected decommissioning to liabilities occurassets are at 35 the to (4) – decommissioning which datestiming of they the and – relate, (92) whichrequired extent for are – these of sites 1 long-term is (17) uncertain. (20) restoration in (113) nature. work The thatshomi 1 4 will –In ultimately 2016, 33 we 39 be announced 2 (20) theventure. decision shomi to was wind down equally ourtherefore owned shomi by responsible joint Rogers – for and our –liabilities Shaw. portion We of (most were any significantly remainingventure. contractual video In content 2016, 2 we costs) recognized 2the a incurred provision remaining by related 35 to the obligationsexpected our share based of future 4 on costs.provision reversal our related In to best the 2017, wind-down of estimate shomi we (see of note 11). recognized the Other a $20Other million provisions include variousto legal be settled claims, within which five years. are expected US CP program (see notederivatives 16). as We hedges have for not accounting designated purposes. these debt 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 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 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 ACCOUNTING POLICY 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 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 2017 2016 Bank credit facilities (Cdn$ portion) Floating – 100 Bank credit facilities (US$ portion) US Floating – 201 Senior notes 2017 250 Floating – 250 Senior notes 2017 500 3.000% – 500 Senior notes 2018 US 1,400 6.800% 1,756 1,880 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% 627 671 Senior notes 2023 US 850 4.100% 1,066 1,141 Senior notes 2024 600 4.000% 600 600 Senior notes 2025 US 700 3.625% 878 940 Senior notes 2026 US 500 2.900% 627 671 Senior debentures 1 2032 US 200 8.750% 251 269 Senior notes 2038 US 350 7.500% 439 470 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% 627 671 Senior notes 2043 US 650 5.450% 816 873 Senior notes 2044 US 1,050 5.000% 1,318 1,410 14,555 16,197 Deferred transaction costs and discounts (107) (117) Less current portion (1,756) (750)

Total long-term debt 12,692 15,330

1 Senior debentures originally issued by Inc. which are unsecured obligations of RCI and for which RCCI was an unsecured guarantor as at December 31, 2017 and 2016.

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, 2017, 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

136 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 137 (209) (329) (538) 4,017 1,140 (1,540) (4,226) (1,000) (Cdn$) Notional rate Exchange 500 1.34 671 (US$) 2,188 1.31 2,877 (2,038) 1.32 (2,686) Notional ROGERS COMMUNICATIONS INC. (284) (750) (750) 2,999 1,730 (Cdn$) (1,830) (3,283) (1,034) Notional rate 2017 ANNUAL REPORT Exchange ––– 960 1.32 1,269 (US$) (1,110) 1.31 (1,453) Year ended December 31, 2017 Year ended December 31, 2016 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 repaidour the non-revolving entire bank balance credit that facility.this was facility As outstanding was a terminated. under result of this repayment, Effective April 1, 2016, we amendedfacility our to, $2.5 billion among revolving other credit 2019 things, to extend September the 2020. At maturity$1.0 the date same from billion time, July we non-revolving alsoextend amended credit the the maturity facility date from to,of April the among 2017 repayments to made other Aprilborrowings during 2018. things, 2016, As available we a under reduced result the$1.0 our billion amount to non-revolving of $301 million. credit facilityAs from at December 31, 2017,facilities we (2016 had nil – drawn $301 underWe million our had bank ($100 credit million entereddenominated and into portion US$150 of debt these million)). borrowings derivatives toand convert related all principal the payment to interest obligations16) the as to at US December Canadian 31, dollar- dollars 2016. (see note As at December 31, 2017,(2016 we – had $2.4 available billion) liquidity underfacilities of our (2016 $2.3 $3.3 billion billion – bank $2.9 and(2016 billion), letter – of of $0.4 which credit billion) we andoutstanding reserved had under $0.9 our utilized billion US $0.1 to CP program billion backstop borrowings amounts (2016 – nil). 5 (12) (538) (245) 2016 16,870 16,080 (3) 13 (608) 2017 (1,034) 16,080 14,448 Years ended December 31 costs, beginning of period costs costs, end of period Credit facility repayments (Cdn$) Total credit facility repayments Senior note issuances (US$) Net repayment of long-term debt Total credit facility borrowings Credit facility repayments (US$) Net repayments under credit facilities Senior note repayments (Cdn$) Net repayment of senior notes BANK CREDIT AND LETTER OF CREDITOur FACILITIES $3.2 billion revolving creditbasis facility is until available maturity on and amaturity. fully there The revolving are interest rate no charged scheduledcredit on reductions borrowings facility from prior ranges the to revolving prime from nil rate to oracceptance 1.25% rate or base per London Inter-Bank rate, annum Offered Rate. over or theIn 0.85% 2017, bank we to amendedthings, our 2.25% revolving extend over credit the facility maturity thefrom to, date among September bankers’ 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 now $3.2 billion. As at December 31,rate 2017, on our all effective debt weighted andall average of short-term interest the borrowings, associated including debt thewas derivative 4.70% effect and (2016 of bond – forward 4.72%). instruments, WEIGHTED AVERAGE INTEREST RATE Credit facility borrowings (US$) Net repayment of long-term debt (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, 2017 and 2016. (In millions of dollars, except exchange rates) Gain on foreign exchange Amortization of deferred transaction Deferred transaction costs incurred Long-term debt net of transaction NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Issuance of senior notes Below is a summary of the senior notes that we issued in 2016. We did not issue any senior notes in 2017.

(In millions of dollars, except interest rates and discounts) Discount/ Total gross Transaction costs Principal premium at proceeds 1 and discounts 2 Date Issued amount Due date Interest rate issuance (Cdn$) (Cdn$) 2016 issuances November 4, 2016 US 500 2026 2.900% 98.354% 671 17

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 2016 issuance, we entered into debt (In millions of dollars) derivatives to convert all interest and principal payment obligations 2018 1,756 to Canadian dollars (see note 16). 2019 900 On February 8, 2018, we issued US$750 million senior notes due 2048 2020 900 at a rate of 4.300%. At the same time, we entered into debt derivatives 2021 1,450 to convert all interest and principal payment obligations to Canadian 2022 600 Thereafter 8,949 dollars. As a result, we received net proceeds of $938 million from the issuance. We intend to use these funds for general corporate Total long-term debt 14,555 purposes, which may include the repayment at maturity of our outstanding commercial paper under our US CP program. TERMS AND CONDITIONS As at December 31, 2017 and 2016, we were in compliance with all Repayment of senior notes and related derivative settlements financial covenants, financial ratios, and all of the terms and Below is a summary of the repayment of our senior notes during conditions of our long-term debt agreements. There were no 2017 and 2016. There were no debt derivatives associated with financial leverage covenants in effect other than those under our these repayments. bank credit and letter of credit facilities. (In millions of dollars) The 8.75% debentures due in 2032 contain debt incurrence tests Notional amount and restrictions on additional investments, sales of assets, and Maturity date (Cdn$) payment of dividends, all of which are suspended in the event the public debt securities are assigned investment-grade ratings by at 2017 repayments March 2017 250 least two of three specified credit rating agencies. As at June 2017 500 December 31, 2017, these public debt securities were assigned an investment-grade rating by each of the three specified credit rating Total for 2017 750 agencies and, accordingly, these restrictions have been suspended 2016 repayments as long as the investment-grade ratings are maintained. Our other May 2016 1,000 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 PRINCIPAL REPAYMENTS of RCI. Below is a summary of the principal repayments on our long-term debt due in each of the next five years and thereafter as at December 31, 2017.

NOTE 21: OTHER LONG-TERM LIABILITIES

As at December 31 (In millions of dollars) Note 2017 2016 Deferred pension liability 22 460 404 Supplemental executive retirement plan 22 66 62 Stock-based compensation 24 66 64 Other 21 32 Total other long-term liabilities 613 562

138 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 4 5 (5) (4) 23 (21) 139 2016 4.1% 3.0% 4.3% 3.0% 2016 expense in pension 4 6 (4) (6) 27 (25) CPM B Scale CPM B Scale 2017 CIA Private with CIA Private with Increase (decrease) 3.7% 3.0% 3.0% 4.1% 18 48 2017 (49) (18) 199 (174) 2016 obligation CPM B Scale CPM B Scale 21 49 (21) (52) 237 ROGERS COMMUNICATIONS INC. CIA Private with CIA Private with (207) 2017 in accrued benefit Increase (decrease) 2017 ANNUAL REPORT increase increase Discount rate Rate of compensation Mortality rate Rate of compensation Mortality rate Discount rate Impact of 0.25% increase Impact of 0.25% decrease Impact of 1 year decrease Impact of 1 year increase Impact of 0.5% decrease Impact of 0.5% increase assumptions: increase Weighted average of significant Defined benefit obligation Significant estimates are involvedbalances. in determining Actuarial pension-related employees’ estimates compensationMaximum are levels retirement based ataverage benefits earnings, on the subject are toactuarial certain projections time valuations primarily adjustments. were completed The as of based of most at recent January 1, on retirement. 2017. career Principal actuarial assumptions Rate of future compensation Mortality rate (In millions of dollars) Pension expense Discount rate 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 future benefits; members; and expensed in net income. 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 PensionOn Plan July 1, 2016,new we members closed the andPlan. defined introduced This benefit change a pension did plans not Definedenrolled impact to in Contribution current any members; Pension of anyearn the employee pension benefits defined and benefit credited service pension in plans their respective continuesWe plan. to recognize a pension expensethe in relation to Defined our contributions to provides Contribution service to the Pension Company. Plan when the employee We recognize ourpension net plans pension and 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 NOTE 22: POST-EMPLOYMENT BENEFITS ACCOUNTING POLICY Post-employment benefits – defined benefit pensionWe plans offerpension contributory plans that andpension on provide retirement. non-contributory employees defined withWe a separately benefit calculate lifetime our net monthly pension obligation 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 to accrue benefits our determine pension 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 mortality calculating rates increases in for• calculating past the service life costs expectancy from plan of amendments plan are immediately NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EXPLANATORY INFORMATION • specifying the kinds of investments that can be held in the plans We sponsor a number of contributory and non-contributory and monitoring compliance; pension arrangements for employees, including defined benefit • using asset allocation and diversification strategies; and and defined contributions plans. We do not provide any • purchasing annuities from time to time. non-pension post-retirement benefits. We also provide unfunded The funded pension plans are registered with the Office of the supplemental pension benefits to certain executives. Superintendent of Financial Institutions and are subject to the The Rogers Defined Benefit Pension Plan provides a defined Federal Pension Benefits Standards Act. Two of the defined pension based on years of service and earnings, with no increases contribution plans are registered with the Financial Services in retirement for inflation. The plan was closed to new members on Commission of Ontario, subject to the Ontario Pension Benefits July 1, 2016. Participation in the plan was voluntary and enrolled Act. The plans are also registered with the Canada Revenue employees are required to make regular contributions into the Agency and are subject to the Income Tax Act (Canada). The plan. In 2009 and 2011, we purchased group annuities for our benefits provided under the plans and the contributions to the then-retirees. Accordingly, the current plan members are primarily plans are funded and administered in accordance with all active Rogers employees as opposed to retirees. An unfunded applicable legislation and regulations. supplemental pension plan is provided to certain senior executives The defined benefit pension plans are subject to certain risks to provide benefits in excess of amounts that can be provided from related to contribution increases, inadequate plan surplus, the defined benefit pension plan under the Income Tax Act unfunded obligations, and market rates of return, which we (Canada)’s maximum pension limits. mitigate through the governance described above. Any significant We also sponsor smaller defined benefit pension plans in addition changes to these items may affect our future cash flows. to the Rogers Defined Benefit Pension Plan. The Pension Plan for Employees of Rogers Communications Inc. and the Rogers Below is a summary of the estimated present value of accrued plan Pension Plan for Selkirk Employees are closed legacy defined benefits and the estimated market value of the net assets available benefit pension plans. The Pension Plan for Certain Federally to provide these benefits for our funded plans. Regulated Employees of Rogers Cable Communications Inc. is similar to the main pension plan but only federally regulated As at December 31 employees from the Cable business were eligible to participate; (In millions of dollars) 2017 2016 this plan was closed to new members on July 1, 2016. Plan assets, at fair value 1,890 1,619 In addition to the defined benefit pension plans, we also provide Accrued benefit obligations (2,342) (2,006) various defined contribution plans to certain groups of employees of the Company and to employees hired after March 31, 2016 who Net deferred pension liability (452) (387) choose to join. Additionally, we provide other tax-deferred savings Consists of: arrangements, including a Group RRSP and a Group TFSA Deferred pension asset 8 17 program, which are accounted for as deferred contribution Deferred pension liability (460) (404) arrangements. Net deferred pension liability (452) (387) The Pension Committee of the Board oversees the administration of our registered pension plans, which includes the following Below is a summary of our pension fund assets. principal areas: • overseeing the funding, administration, communication, and Years ended December 31 investment management of the plans; (In millions of dollars) 2017 2016 • selecting and monitoring the performance of all third parties performing duties in respect of the plans, including audit, Plan assets, beginning of year 1,619 1,432 actuarial, and investment management services; Interest income 72 68 • proposing, considering, and approving amendments; Remeasurements, return on plan assets • proposing, considering, and approving amendments to the recognized in other comprehensive Statement of Investment Policies and Procedures; income (loss) and equity 92 32 • reviewing management and actuarial reports prepared in Contributions by employees 42 35 respect of the administration of the pension plans; and Contributions by employer 145 125 • reviewing and approving the audited financial statements of the Benefits paid (76) (70) Administrative expenses paid from plan pension plan funds. assets (4) (3) The assets of the defined benefit pension plans are held in Plan assets, end of year 1,890 1,619 segregated accounts that are isolated from our assets. They are invested and managed following all applicable regulations and the Statement of Investment Policies and Procedures with the objective of having adequate funds to pay the benefits promised by the plan. Investment and market return risk is managed by: • contracting professional investment managers to execute the investment strategy following the Statement of Investment Policies and Procedures and regulatory requirements;

140 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 3 7 5 2 2 (3) 75 32 56 62 141 (69) (65) (99) (68) 2016 2016 2016 2 3 2 – (3) 9 62 66 16 81 92 (60) (72) 2017 (168) 2017 2017 Years ended December 31 Years ended December 31 Years ended December 31 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT other comprehensive loss and equity finance costs interest income) of year salaries and benefits expense costs other comprehensive income (In millions of dollars) (In millions of dollars) (In millions of dollars) Effect of experience adjustments Change in asset ceiling Remeasurement loss recognized in We also providecertain executives. supplemental Below unfundedobligations, is pension pension a expense benefitsbenefits, included summary net in interest to of cost, employee and other our salaries comprehensive income. accrued and benefit Netinterestcostrecognizedin Change in financial assumptions The remeasurement recognized in theComprehensive Consolidated Income Statements is of determined as follows: Interest cost on plan obligation Interest income on plan assets Return on plan assets (excluding Accrued benefit obligation, beginning Pension expense included in employee Net interest cost, a componentin finance of costs the and plan is cost outlined as above, follows: is included Netinterestcostrecognizedinfinance Remeasurement loss recognized in Benefits paid Accrued benefit obligation, end of year We alsoexpense have of $6 million defined inin 2017 employee contribution (2016 salaries – and $3 benefits plans million), expense. which is with included total pension – – 4 7 3 3 (3) 75 35 (70) 119 134 990 625 119 126 129 2016 2016 2016 2016 1,619 1,713 2,006 – – – – 9 4 81 42 (76) 14 137 152 742 137 146 150 2017 2017 As at December 31 2,006 2,342 2017 2017 1,134 1,890 Years ended December 31 Years ended December 31 Years ended December 31 Service cost Net interest cost Net pension expense Administrative expense of year comprehensive income and equity year income ceiling (excluding interest 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) Asset ceiling, beginning of year Accrued benefit obligations, beginning Service cost Interest cost Contributions by employees Below is a summary of the effect of the asset ceiling. 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 Plan cost: Total pension cost recognized in net Interest Remeasurements, change in asset Asset ceiling, end of year 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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ALLOCATION OF PLAN ASSETS Below is a summary of the actual contributions to the plans.

Target asset Years ended December 31 Allocation of plan assets allocation (In millions of dollars) 2017 2016 2017 2016 percentage Employer contribution 145 125 Equity securities: Employee contribution 42 35 Domestic 11.8% 12.4% 7% to 17% International 48.1% 48.8% 33% to 63% Total contribution 187 160 Debt securities 39.3% 38.5% 30% to 50% Other – cash 0.8% 0.3% 0% to 2% We estimate our 2018 employer contributions to our funded plans Total 100.0% 100.0% to be $141 million. The actual value will depend on the results of the 2018 actuarial funding valuations. The average duration of the Plan assets consist primarily of pooled funds that invest in common defined benefit obligation as at December 31, 2017 is 19 years stocks and bonds. The pooled funds have investments in our equity (2016 –19 years). securities and corporate bonds. As a result, approximately Actual net return on plan assets was $160 million in 2017 (2016 – $7 million (2016 – $2 million) of plan assets are indirectly invested in $97 million). our own securities under our defined benefit plans. We have recognized a cumulative loss in other comprehensive We make contributions to the plans to secure the benefits of plan income and retained earnings of $425 million as at December 31, members and invest in permitted investments using the target 2017 (2016 – $380 million). ranges established by our Pension Committee, which reviews actuarial assumptions on an annual basis.

NOTE 23: SHAREHOLDERS’ EQUITY

CAPITAL STOCK

Number of shares authorized Share class 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 50 •Each share can be 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 DIVIDENDS (British Columbia) impose restrictions on the transfer, voting, and We declared and paid the following dividends on our outstanding issue of Class A Shares and Class B Non-Voting Shares to ensure Class A Shares and Class B Non-Voting Shares: we remain qualified to hold or obtain licences required to carry on certain of our business undertakings in Canada. We are authorized Dividend per share to refuse to register transfers of any of our shares to any person Date declared Date paid (dollars) who is not a Canadian, as defined in RCI’s Articles of Continuance, January 26, 2017 April 3, 2017 0.48 in order to ensure that Rogers remains qualified to hold the April 18, 2017 July 4, 2017 0.48 licences referred to above. August 17, 2017 October 3, 2017 0.48 October 19, 2017 January 2, 2018 0.48 1.92

January 27, 2016 April 1, 2016 0.48 April 18, 2016 July 4, 2016 0.48 August 11, 2016 October 3, 2016 0.48 October 20, 2016 January 3, 2017 0.48 1.92

142 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 61 32 45 50 17 1.5 143 (33) 0.5% 3.7% 3.9% 2016 2016 21.3% 4.8 years 2.4 years 9.9 years $6.20 50 1.4 61 51 51 33 (74) 0.8% 3.2% 3.9% 2017 21.2% 2017 5.5 years 2.3 years 9.9 years $8.52 Years ended December 31 Years ended December 31 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT receipt expense As at December 31, 2017,fair we value had of a totalbased $223 liability million compensation, recognized (2016 at including its The – stock current $189 portion options, of million) this RSUs,is is related and $157 included to million DSUs. (2016 in stock- – accountsterm $125 million) payable portion and and of accruedincluded liabilities. in this other The long-term is liabilities long- (see $66 note 21). million (2016 – $64 million) and is 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 2016 options and grantedBlack-Scholes during the 2017 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. Lattice steps Dividend yield Volatility of Class B Non-Voting Shares Weighted average expected life Weighted average time to vest Weighted average time to expiry Employee exit rate Suboptimal exercise factor Risk-free interest rate Weighted average fair value (In millions of dollars) Stock options On January 24, 2018,$0.48 the per Board Class declared Abe Voting a paid Share quarterly on and dividend April Class of 2018. 3, B 2018, Non-Voting to Share, shareholders to of record on March 12, 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 The holders of Classthe A rate Shares of are up to entitledrate five to cents of receive per five share dividends butClass at cents only B per after Non-Voting dividends Shares. share at ClassShares the A have Shares therefore been and participate Class paid equally Bshare. or Non-Voting in dividends set above aside $0.05 on per the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total intrinsic value of vested liabilities, which is the difference plans; each option has a term of seven to ten years. The vesting between the exercise price of the share-based awards and the period is generally graded vesting over four years; however, the trading price of the Class B Non-Voting Shares for all vested share- Management Compensation Committee may adjust the vesting based awards, as at December 31, 2017 was $69 million (2016 – terms on the grant date. The exercise price is equal to the fair $61 million). market value of the Class B Non-Voting Shares, determined as the five-day average before the grant date as quoted on the TSX. We paid $107 million in 2017 (2016 – $69 million) to holders of stock options, RSUs, and DSUs upon exercise using the cash Performance options settlement feature, representing a weighted average share price on We granted 489,835 performance-based options to certain key the date of exercise of $59.68 (2016 – $51.70). executives in 2017 (2016 – 420,035). These options vest on a graded basis over four years provided that certain targeted stock STOCK OPTIONS prices are met on or after each anniversary date. As at Options to purchase our Class B Non-Voting Shares on a December 31, 2017, we had 1,540,158 performance options one-for-one basis may be granted to our employees, directors, and (2016 – 2,268,102) outstanding. officers by the Board or our Management Compensation Committee. There are 65 million options authorized under various

Summary of stock options Below is a summary of the stock option plans, including performance options.

Year ended December 31, 2017 Year ended December 31, 2016 Weighted average Weighted average (In number of units, except prices) Number of options exercise price Number of options exercise price Outstanding, beginning of year 3,732,524 $43.70 4,873,940 $41.47 Granted 993,740 $59.71 1,054,530 $49.95 Exercised (1,603,557) $42.10 (1,811,727) $40.45 Forfeited (484,817) $50.74 (384,219) $47.80 Outstanding, end of year 2,637,890 $49.42 3,732,524 $43.70 Exercisable, end of year 924,562 $42.32 1,770,784 $40.39

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, 2017.

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 $34.32–$34.99 71,615 0.16 $34.32 71,615 $34.32 $35.00–$39.99 400,247 1.16 $37.96 400,247 $37.96 $40.00–$44.99 582,173 3.96 $44.21 107,756 $43.97 $45.00–$49.99 774,136 5.58 $49.17 344,944 $48.53 $50.00–$59.99 319,884 7.93 $56.70 – – $60.00–$62.82 489,835 9.44 $62.82 – – 2,637,890 5.40 $49.42 924,562 $42.32

Unrecognized stock-based compensation expense as at On the vesting date, we will redeem all of the participants’ RSUs in December 31, 2017 related to stock-option plans was $6 million cash or by issuing one Class B Non-Voting Share for each RSU. We (2016 – $3 million) and will be recognized in net income over the have reserved 4,000,000 Class B Non-Voting Shares for issue under nextfouryearsastheoptionsvest. this plan.

RESTRICTED SHARE UNITS Performance RSUs The RSU plan allows employees, directors, and officers to We granted 133,559 performance-based RSUs to certain key participate in the growth and development of Rogers. Under the executives in 2017 (2016 – 98,889). The number of units that vest terms of the plan, RSUs are issued to the participant and the units and will be paid three years from the grant date will be within 50% issued vest over a period of up to three years from the grant date. to 150% of the initial number granted based upon the achievement of certain annual and cumulative three-year non-market targets.

144 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 5 30 47 12 145 2016 2016 972,894 (132,620) (214,687) 1,770,871 2,396,458 3 19 32 10 2017 2017 735,117 (333,111) (470,817) 2,396,458 2,327,647 Years ended December 31 Years ended December 31 ROGERS COMMUNICATIONS INC. 1 2017 ANNUAL REPORT benefits Stock-based compensation does notClass B include Non-Voting the Shares or effect equity derivatives. of changes in fair value of Total compensation 1 EQUITY DERIVATIVES We have entered into equitystock-based derivatives compensation to expense hedge (see note aa 16) portion $74 and of million recognized our recovery (2016compensation – expense for $33 these million derivatives. recovery) in stock-based 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 $43 made million related in 2017 (2016 as – to $41 million). a the employee share (In number of units) Outstanding, beginning of year Granted and reinvested dividends Exercised Forfeited Outstanding, end of year Unrecognized stock-basedDecember 31, 2017 related to compensation$30 these DSUs million) was and $22 expense million willthree (2016 be – years recognized as as invested. the net executive income at DSUs over vest. the All next other DSUs are fully (In millions of dollars) Compensation The compensation expenseservices for was included key in employee salaries management and benefits for as follows: employee Summary of DSUs Below isperformance DSUs. a summary of the DSUs outstanding, including Salaries and other short-term employee Post-employment benefits Stock-based compensation 2016 763,364 (826,918) (183,766) 2,484,405 2,237,085 2017 826,081 (984,342) (266,979) 2,237,085 1,811,845 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 CONTROLLING SHAREHOLDER 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 2017 and 2016. NOTE 25: RELATED PARTY TRANSACTIONS Performance DSUs We granted 191,875executives in performance-based 2017 (2016 DSUs –and 328,206). may to The be number certain of redeemeddate units by key that will the vest 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 DEFERRED SHARE UNITS 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 Summary of RSUs Below isperformance RSUs. a summary of the RSUs outstanding, including Outstanding, beginning of year (In number of units) Granted and reinvested dividends Exercised Forfeited Outstanding, end of year Unrecognized stock-basedDecember 31, 2017 related compensation to$35 these million) RSUs was and $41 expense willthree million years (2016 be as – the recognized as RSUs in vest. net income at over the next NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Transactions We have 100% ownership interest in these subsidiaries. Our We have entered into business transactions with companies whose subsidiaries are incorporated in Canada and have the same partners or senior officers are Directors of RCI. These directors are: reporting period for annual financial statements reporting. • the non-executive chairman of a law firm that provides a portion When necessary, adjustments are made to conform the accounting of our legal services; and policies of the subsidiaries to those of RCI. There are no significant • the chair of the board of a company that provides printing restrictions on the ability of subsidiaries, joint arrangements, and services to the Company. associates to transfer funds to Rogers as cash dividends or to repay We recognize these transactions at the amount agreed to by the loans or advances, subject to the approval of other shareholders related parties, which are also reviewed by the Audit and Risk where applicable. Committee. The amounts owing are unsecured, interest-free, and We carried out the following business transactions with our due for payment in cash within one month of the date of the associates and joint arrangements. Transactions between us and transaction. Below is a summary of related party activity for the our subsidiaries have been eliminated on consolidation and are not business transactions described above. disclosed in this note. Outstanding Years ended balance as at Years ended December 31 (In millions of dollars) December 31 December 31 (In millions of dollars) 2017 2016 2017 2016 2017 2016 Revenue 74 50 Printing and legal services 17 27 – 3 Purchases 198 189

In addition, during the year ended December 31, 2016, we Outstanding balances at year-end are unsecured, interest-free, and announced a strategic change across our publishing business such settled in cash. that we will focus on digital content through the Internet and mobile applications. As a result, we sold select publishing titles to As at December 31 the aforementioned printing services company for $5 million. (In millions of dollars) 2017 2016 SUBSIDIARIES, ASSOCIATES, AND JOINT ARRANGEMENTS Accounts receivable 80 70 We have the following material operating subsidiaries as at Accounts payable and accrued December 31, 2017 and 2016: liabilities 26 32 • Rogers Communications Canada Inc.; and • Rogers Media Inc. NOTE 26: GUARANTEES

We had the following guarantees as at December 31, 2017 and PURCHASES AND DEVELOPMENT OF ASSETS 2016 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, 2017 or 2016. 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.

146 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 147 excess of one year at After 5Years Total ROGERS COMMUNICATIONS INC. ting programs and films for periods in 2017 ANNUAL REPORT 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 the proceeding basedservice on agreements was the granted. 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 inallegations Saskatchewan Canada. against It of involves breachadvertising, among of other things, contract, inbeen relation to misrepresentation, charged the 911 by and feeproviders us that false had and in thedamages Canada. other and wireless restitution. Thecertifying telecommunication The plaintiffs plaintiffs the intendSaskatchewan. are to proceeding We seek seekingcontingency. an have unspecified as order not a recognized national a class liability for action this in 546 1,121 1,079 1,886 4,632 111368 88 346 10 167 121 7 1,002 216 asting rights for sports broadcas 1 Year 1-3 Years 4-5 Years Less than product, and wireless device contracts to which we have committed. 2 1 3 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 Operating leasesPlayer contracts 202 308 167 294 971 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 theirwould damages customers. effectively The and plaintiffs be punitivecollected. a damages, reimbursement which of all systemIn 2007, access the fees Saskatchewan 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 the proceeding. In 2008, our motion to stay CONTINGENT LIABILITIES We have the2017: following contingent liabilities as at December 31, Operating leases are foroutlets network across sites, the office country.from premises, The five and to majority retail fifteen of(2016 years. the – Rent $223 lease million). expense terms for 2017 range was $228In million addition,commitments were as $298plant million at for and the equipmentintangible December acquisition assets. and of 31, $141 property, million 2017,In for the our addition, acquisitioncommitments related contractual of as towere all $494 at million, of which are our not December included associates in the and above table. 31, joint ventures 2017, our contractual 1 2 3 (In millions of dollars) COMMITMENTS Below is aDecember summary 31, 2017: of the future minimum payments for our contractual commitments that are not recognized as liabilities as at EXPLANATORY INFORMATION 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 Total commitments 1,227 1,863 1,423 2,308 6,821 Purchase obligations Program rights NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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) 2017 2016 (In millions of dollars) 2017 2016 Capital expenditures before proceeds on Accounts receivable (161) (141) disposition 2,510 2,352 Inventories 2 3 Proceeds on disposition (74) – Other current assets 17 (12) Capital expenditures 2,436 2,352 Accounts payable and accrued liabilities 9 182 Unearned revenue (21) (18) Total change in non-cash operating working capital items (154) 14

148 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 NOTES be9e9bd2-8948-400b-8da9-12de6239d759 - WorldReginfo 149 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT Notes Glossary of selected industry terms and helpful links

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

150 ROGERS COMMUNICATIONS INC. 2017 ANNUAL REPORT WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Helpful links

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

2017 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 151 WorldReginfo - be9e9bd2-8948-400b-8da9-12de6239d759 Corporate and shareholder information

CORPORATE OFFICES STOCK EXCHANGE LISTINGS COMMON STOCK TRADING AND Rogers Communications Inc. Toronto Stock Exchange (TSX): DIVIDEND INFORMATION Dividends 333 Bloor Street East, RCI.A – Class A Voting shares Price RCI.b on TSX Declared Toronto, ON M4W 1G9 (CUSIP # 775109101) 2017 High Low Close per Share 416-935-7777 RCI.B – Class B Non-Voting shares First Quarter $59.09 $50.44 $58.80 $0.48 (CUSIP # 775109200) Second Quarter $63.78 $58.34 $61.25 $0.48 CUSTOMER SERVICE AND Third Quarter $66.32 $60.40 $64.34 $0.48 PRODUCT INFORMATION New York Stock Exchange (NYSE): 888-764-3771 or rogers.com RCI – Class B Non-Voting shares Fourth Quarter $70.08 $63.35 $64.05 $0.48 (CUSIP # 775109200) SHAREHOLDER SERVICES Shares Outstanding at December 31, 2017 If you are a registered shareholder and have Class A Voting 112,407,192 inquiries regarding your account, wish to Class B Non-Voting 402,403,433 change your name or address, or have questions about lost stock certificates, share 2018 Expected Dividend Dates transfers, estate settlements or dividends, Record Date*: Payment Date*: please contact our transfer agent and registrar: DEBT SECURITIES March 12, 2018 April 3, 2018 For details of the public debt securities AST Trust Company (Canada) of the Rogers companies, please refer to June 11, 2018 July 3, 2018 P.O. Box 700, Postal Station B the “Debt Securities” section under September 14, 2018 October 3, 2018 Montreal, QC H3B 3K3, Canada investors.rogers.com December 11, 2018 January 3, 2019 416-682-3860 or 800-387-0825 * Subject to Board approval [email protected] INDEPENDENT AUDITORS KPMG LLP Unless indicated otherwise, all dividends paid Duplicate Mailings by Rogers Communications are designated If you receive duplicate shareholder mailings ON-LINE INFORMATION as “eligible” dividends for the purposes of from Rogers Communications, please Rogers is committed to open and full financial the Income Tax Act (Canada) and any similar contact AST Trust Company as detailed disclosure and best practices in corporate provincial legislation. above to consolidate your accounts. governance. We invite you to visit investors. rogers.com where you will find additional DIVIDEND REINVESTMENT PLAN (DRIP) INVESTOR RELATIONS information about our business, including Rogers offers a convenient dividend Institutional investors, securities analysts events and presentations, news releases, reinvestment program for eligible shareholders and others requiring additional financial regulatory filings, governance practices, to purchase additional Rogers Communications information can visit investors.rogers.com corporate social responsibility and our shares by reinvesting their cash dividends or contact us at: continuous disclosure materials, including without incurring brokerage fees or administration fees. For plan information and 844-801-4792 or quarterly financial releases, annual information forms, and management information circulars. enrolment materials or to learn more about 416-935-7777 (outside North America) Rogers’ DRIP, please visit https://ca.astfinancial. or [email protected] You may also subscribe to our news by email or RSS feeds to automatically receive Rogers com/InvestorServices/Search-DRIP or contact CORPORATE PHILANTHROPY news releases electronically. AST Trust Company as detailed earlier on For information relating to Rogers’ various this page. DIRECT DEPOSIT SERVICE philanthropic endeavours, refer to the ELECTRONIC DELIVERY OF “About Rogers” section of rogers.com Shareholders may have dividends deposited directly into accounts held at SHAREHOLDER MATERIALS SUSTAINABILITY financial institutions. To arrange direct Registered shareholders can receive electronic Rogers is committed to continuing to deposit service, please contact AST Trust notice of financial reports and proxy materials grow responsibly and we focus our social Company as detailed earlier on this page. by registering at https://ca.astfinancial.com/ and environmental sustainability efforts edelivery. This approach gets information to where we can make the most meaningful shareholders faster than conventional mail and impacts on both. To learn more, please helps Rogers protect the environment and visit rogers.com/csr reduce printing and postage costs.

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

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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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