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COMMUNICATIONS INC. 2013 ANNUAL REPORT

WIRELESS CABLE MEDIA ROGERS.COM AT A GLANCE OUR BUSINESS

Rogers Communications Inc.. is a diversified Canadian telecommunications and mem dia compana y. Rogers Wireeless is CaC nadaa’ss laargeg st wireless voice and data telecommunications seervicese provider and tht e counntry’s onlyy natioi nal carrier operating on the combined world standard GSMM/HSPS A+A /LLTE techc nooloogy platforms. RRogers Cable is a leading Canadian cable services provider, offeringg high-speeed InI ternnett access, cablel television, and telephony products, and together with Rogers Business Solutions, providdese businness tet lecom, networking, hosting, managed services and IP solutions to small, medium and lal rgr e ennterrprise, government and carrier customers. Rogers Media is ’s premier group off categorry-lel ading broadcast, specialty, print and online media assets, with businesses in radio and televisionn broadcasting, televised shopping, sports entertainment, magazine and trade journal publishingg ana d digital media. We are publicly traded on both the TSX and NYSE stock exchanges and are included ini thee S&P& /TSX 60 Index of the largest publicly traded companies in Canada.

DELIVERING ON OUR COMMITMENTS IN 2013

FREE CASH FLOW DIVIDEND OPERATING FAST AND RELIABLE GENERATION GROWTH EFFICIENCIES NETWORKS

WHAT WE SAID: Deliver another WHAT WE SAID: Increase WHAT WE SAID: Implement WHAT WE SAID: Maintain year of significant consolidated cash returns to shareholders productivity improvement Rogers leadership in network pre-tax cash flow. consistently over time. initiatives to capture sustainable technology and innovation. operating efficiencies. WHAT WE DID: Generated WHAT WE DID: Increased the WHAT WE DID: Rogers was $2.0 billion of pre-tax free cash annualized dividend per share WHAT WE DID: Reduced operating named both the fastest wireless flow in 2013, supporting the 10% from $1.58 to $1.74 in 2013. expenses for the combined Wireless network and the fastest significant investments and cash Further increased the dividend and Cable segments, excluding the broadband ISP in Canada we returned to shareholders by 5% to $1.83 in February 2014. cost of wireless equipment sales, by by PCMag.com. during the year. approximately 1% from 2012 levels.

DATA REVENUE HIGHER VALUE EVOLVE AND ENHANCE ENHANCE AND STRENGTHEN GROWTH WIRELESS SUBSCRIBERS TELEVISION PLATFORM THE CORE BUSINESS

WHAT WE SAID: Generate WHAT WE SAID: Continue the WHAT WE SAID: Invest in the WHAT WE SAID: We will make double-digit wireless and growth in our evolution of our current TV strategic investments to expand broadband data growth consistent subscriber base to drive wireless platform and extend our video and strengthen the core with our data usage monetization data revenue and ARPU. offerings to new platforms. business. strategy. WHAT WE DID: Activated nearly WHAT WE DID: Launched NextBox WHAT WE DID: Executed WHAT WE DID: Grew wireless 2.7 million , helping 3.0 delivering a superior TV strategic acquisitions including and broadband data revenues by bring smartphone penetration experience and leveraged the Mountain Cable, data centre and 17% and 16%, respectively over to 75% of postpaid subscriber success of Rogers AnyPlace TV, hosting assets, theScore and 2012 levels. base. our Internet and mobile valuable, high profile sports on-demand TV service. content.

COONTENTS

2 Letetterers to Shareholderse 24 Management’s Discussion and Analysis 91 Consolidated Statemennts of Financial Position 4 Stratetegicc Objecje tives andnd VaV luel Drivers 88 Management’s Responsibility for Financial Reporting 92 Con solidated Statemenmem ts of 5 WhyW Investti in Rogeog rs Changes in Sharehoeh lders’ Equitity 88 Independent Auditors’ Report of 6 Connecn t Likeke Neeverve Before Registered Public Accounting Firm 93 Consololidadated StS atemenents of CasC h Flows 16 Corporaate Sociai l Responson ibiib lity 89 Consolidated Statements of Income 944 Not es to Consolidadatedd Financiac l StStatemt ents 18 Corporate GoG vernance 90 Consolsos idadated Statements of 200 DirDi ectors and Senien or Executivee Officefic rs Comprehensive Incoome 126 Corporrate and Sharh ehoeh lder Infoformation 2013 CONSOLIDATED REVENUE AND ADJUSTED OPERATING PROFIT PROFILE

REVENUE ADJUSTED OPERATING PROFIT

WIRELESS 57% WIRELESS 61%

CABLE 27% $12.7 $5.0 CABLE 33% BILLION BILLION

MEDIA 13% MEDIA 4% BUSINESS SOLUTIONS 3% BUSINESS SOLUTIONS 2%

FOR A DETAILED DISCUSSION OF OUR FINANCIAL AND OPERATING METRICS AND RESULTS, FINANCIAL HIGHLIGHTS 2013 PLEASE SEE THE ACCOMPANYING MD&A LATER IN THIS REPORT.

FINANCIAL HIGHLIGHTS IFRS CDN GAAP

(IN MILLIONS OF DOLLARS, EXCEPT PER SHARE, SUBSCRIBER AND EMPLOYEE DATA) 2013 2012 2011 2010 2009

Revenue $ 12,706 $ 12,486 $ 12,346 $ 11,999 $ 11,537 Adjusted operating profit 1 4,993 4,834 4,739 4,668 4,407 Adjusted operating profit margin 1 39% 39% 38% 39% 38% Adjusted income 1 1,769 1,781 1,736 1,704 1,569 Adjusted diluted earnings per share 1 3.42 3.41 3.17 2.94 2.53 Pre-tax free cash flow per share 1 3.97 3.91 3.63 3.79 3.09 Annualized dividend rate at year-end 1.74 1.58 1.42 1.28 1.16 Total assets 23,601 19,618 18,362 17,033 17,018 Long-term debt (includes current portion) 13,343 10,789 10,034 8,654 8,464 Shareholders’ equity 4,669 3,768 3,572 3,760 4,273 Market capitalization of equity 24,903 23,346 20,736 19,435 19,476

Wireless subscribers (000s) 9,503 9,437 9,335 8,977 8,494 Television subscribers (000s) 2,127 2,214 2,297 2,305 2,296 Internet subscribers (000s) 1,961 1,864 1,793 1,686 1,619 Cable telephony subscribers (000s) 1,153 1,074 1,052 1,003 937 Number of employees 28,026 26,801 28,745 27,971 28,985

1 For a definition of these measures (which are non-GAAP) see “Non-GAAP Measures” in Management’s Discussion and Analysis.

TOTAL SHAREHOLDER RETURN TEN-YEAR COMPARATIVE TOTAL RETURN: 2004–2013 ONE-YEAR COMPARATIVE TOTAL RETURN: 2013

RCI.B RCI.B 470% 11% ON TSX ON TSX

TSX TSX TELECOM 193% TELECOM 11% INDEX INDEX

S&P S&P TELECOM 119% TELECOM 11% INDEX INDEX

S&P/TSX S&P/TSX COMPOSITE 115% COMPOSITE 13% INDEX INDEX

2013 ANNUAL REPORT INC. 01 ROGERS COMMUNICATIONS INC. AT A GLANCE

ROGERS COMMUNICATIONS

Rogers Communications (TSX: RCI; NYSE: RCI) is a diversified Canadian telecommunications and media company. As discussed in the following pages, Rogers Communications is engaged in the telecom and media businesses through its primary operating segments , , Rogers Business Solutions and Rogers Media.

ROGERS COMMUNICATIONS

WIRELESS CABLE BUSINESS SOLUTIONS MEDIA

WIRELESS SEGMENT

Rogers Wireless provides wireless voice and data communications services across Canada to approximately 9.5 million customers under the Rogers Wireless, Fido and brands. Rogers Wireless is Canada’s largest wireless provider and the only national carrier operating on the combined global standard GSM/HSPA+/LTE technology platforms. Rogers Wireless is Canada’s leader in innovative wireless services, and provides customers with the best and latest wireless devices and applications and the fastest network speeds. Rogers Wireless also provides seamless wireless roaming across the U.S. and more than 200 other countries, and is the Canadian leader in the deployment of mobile commerce and machine- to-machine communications.

CABLE AND BUSINESS SOLUTIONS SEGMENTS

Rogers Cable is a leading Canadian cable services provider, whose service territory covers approximately 4.0 million homes in , and Newfoundland representing approximately 30% of the Canadian cable market. Our advanced digital hybrid fibre-coax network provides market leading high- broadband Internet access speeds, the most innovative selection of digital television and online viewing and telephony services to millions of residential and small business customers. Together with Rogers Business Solutions, it also provides scalable carrier-grade business telecom, networking, hosting and managed data services, and IP connectivity and solutions to medium and large enterprise, government and carrier customers.

MEDIA SEGMENT

Rogers Media is Canada’s premier destination for category-leading television and radio broadcasting, sports entertainment, publishing, and digital media properties. Television assets include national City network which reaches more than 80% of Canadians, five multilingual channels, seven regional and national channels, as well as specialty channels FX Canada, OLN, The Biography Channel and G4. Rogers Media also owns The Shopping Channel, Canada’s only nationally televised and online shopping service. It operates more than 50 Canadian radio stations, publishes 50+ well known consumer and business magazines, and owns a suite of digital media properties. Media owns the Blue Jays Baseball Club and , Canada’s largest sports and entertainment facility. Rogers also holds a 37.5% investment in Maple Leaf Sports & Entertainment, owner of NHL Toronto Maple Leafs, NBA Toronto Raptors and MLS Toronto FC. REVENUE ADJUSTED OPERATING PROFIT 2013 REVENUE ($ IN BILLIONS) ($ IN BILLIONS) $12.7 billion

2013 12.7 2013 5.0 WIRELESS 57%

CABLE 27% 2012 12.5 2012 4.8 $12.7 BILLION

MEDIA 13% 2011 12.3 2011 4.7 BUSINESS SOLUTIONS 3%

REVENUE ADJUSTED OPERATING PROFIT 2013 REVENUE ($ IN BILLIONS) ($ IN BILLIONS) $7.3 billion

2013 7.3 2013 3.2 POSTPAID VOICE 46%

DATA 44% 2012 7.3 2012 3.1 $7.3 BILLION

2011 7.1 2011 3.0 EQUIPMENT 7% PREPAID VOICE 3%

REVENUE ADJUSTED OPERATING PROFIT 2013 REVENUE ($ IN BILLIONS) ($ IN BILLIONS) $3.8 billion

2013 0.37 3.5 2013 0.11 1.7 TELEVISION 47% INTERNET 30%

2012 0.35 3.4 2012 0.09 1.6 $3.8 BILLION PHONE 13%

2011 0.41 3.3 2011 0.09 1.5 BUSINESS SOLUTIONS 10% BUSINESS SOLUTIONS / CABLE BUSINESS SOLUTIONS / CABLE

REVENUE ADJUSTED OPERATING PROFIT 2013 REVENUE ($ IN BILLIONS) ($ IN BILLIONS) $1.7 billion TELEVISION 42% 2013 1.70 2013 0.16 THE SHOPPING CHANNEL 17% SPORTS ENTERTAINMENT 14% 2012 1.62 2012 0.19 $1.7 BILLION PUBLISHING 14%

2011 1.61 2011 0.18 RADIO 13% “ROGERS MADE CLEAR PROGRESS ON A NUMBER OF STRATEGIC FRONTS, WHILE CONTINUING TO DELIVER STRONG RETURNS TO SHAREHOLDERS AND BUILDING UPON THE COMPANY’S DEEP-ROOTED FOUNDATIONS FOR THE FUTURE BENEFIT OF ALL OUR STAKEHOLDERS.”

ALAN HORN, CPA, CA

A MESSAGE FROM THE CHAIRMAN

2013 was another solid year in which Rogers made clear progress on a number of competitive markets. Guy is an excellent strategic fronts, while continuing to deliver strong returns to shareholders and fit for this role on many levels and the entire building upon the company’s deep-rooted foundations for the future benefit of all Board look forward to his leadership for our stakeholders. Our management team delivered on their financial guidance many years to come. targets in what continue to be highly competitive and regulatorily intense markets. I would encourage you to review the discussions around our corporate governance, Rogers continued to deliver on the evolution by 10% and return approximately $900 community investments and sustainability and expansion of its core services. It quickly million to our shareholders in the form of initiatives later in this annual report. First class expanded the reach of Canada’s first and dividends and share buybacks. And we corporate governance practices have always fastest LTE wireless network to 73% of the further increased the dividend by 5% in been a strong tenet at Rogers, and as an Canadian population, introduced significant February 2014, continuing a multi-year trend entrepreneur founded and family controlled enhancements to its broadband data speeds of dividend growth. As you read on in this company, our Board takes pride in what is a and cable TV platform, and further added report, you will find many more examples and proactive and disciplined approach to to its leading sports content and digital much detail of the company’s operational and ensuring that our governance practices media assets. financial accomplishments over the past year. continue to justify the confidence of the The company executed several strategic I would like to take the opportunity to thank public capital markets. Giving back to the transactions that support Rogers core growth our recently retired President and Chief communities we serve is also an important strategies, including in the areas of wireless Executive Officer Nadir Mohamed for his part of our culture at Rogers and the Board is spectrum and network sharing, cable footprint leadership and substantial contributions at very proud of the significant initiatives and expansion, and significantly expanding its data Rogers over the past 13 years. Succeeding investments which the company undertook centre, colocation and managed services a founder with professional management over the past year on the corporate social capabilities for businesses. In addition, it struck is always a delicate and important transition responsibility front. a landmark 12 year agreement with the NHL in the life cycle of a company, and Nadir I would like to thank Rogers’ 28,000 for the exclusive national hockey broadcast provided important continuity and solid employees for their ongoing dedication to rights across Canada. leadership as CEO over the course of the our customers and striving to make Rogers Rogers also continued to deliver on its past five years for which the Board and better every day, my fellow Board members innovation agenda, being first to market management team are thankful. for their counsel and drive towards delivering with a series of new services in 2013, Following an extensive international search continued value to our shareholders, and including in the quickly growing areas of process, in September, 2013 the Board you our shareholders for your continued mobile payments, machine-to-machine announced that would become investment in this great company. communications, home monitoring, local President and Chief Executive Officer of digital services, and a new and unique Rogers effective in December 2013. customer loyalty program. Guy brings 30 years of global experience We continued to return increasing amounts in telecom, pay television and media, and is a proven, hands-on executive who has of cash to shareholders. In 2013, the ALANALAN HORN,HORN CPA, CA consistently delivered strong financial and company’s significant cash generation CHAIRMAN OF THE BOARD allowed the Board to increase the dividend operating results in highly complex and ROGERS COMMUNICATIONS INC.

02 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT “WHILE IT IS EARLY DAYS, I BELIEVE WE CAN EVOLVE THE BUSINESS IN A WAY THAT WILL BE EVEN MORE REWARDING FOR OUR CUSTOMERS, OUR SHAREHOLDERS AND EMPLOYEES.”

GUY LAURENCE

A MESSAGE FROM THE PRESIDENT & CEO

As I write these words after recently joining the company, I can say with genuine As CEO, I will work to re-establish our enthusiasm that it’s great to be here at Rogers. I took this post because Rogers leadership position and accelerate our is a remarkable company with a rich history and an unrivalled mix of wireless, growth. This will take time. It is a long- cable and media assets. It is a good match with my background and my experience. term effort that will require a clear strategy, rigorous prioritization and During the recruiting and onboarding While it is early days, I believe we can disciplined execution. It will not be easy, process, I spent considerable time with the evolve the business in a way that will be but it is the job I have signed up for, and it Rogers family, the Board of Directors and even more rewarding for our customers, is a challenge I intend to meet head-on. the leadership team. I am struck by their our shareholders and employees. Our goal I look forward to continuing Ted’s legacy, energy, passion and drive to win, which I is clear – winning on a consistent basis. and to leading Rogers through the next think we can harness to do even greater And while our industry faces the challenge phase of growth and to serving you, our things. I also value the support and longer- of moderating growth and regulatory shareholders. term focus of the founding Rogers family uncertainty, few industries are more Thank you for your continued business, who own significant equity in the company. dynamic and better at leveraging new investment and support. technologies. Since joining, I have criss-crossed Canada meeting my team, external stakeholders To win, we must put our customers’ needs and customers. I have also conducted front and centre in everything we do. This numerous business reviews, overseen the means delivering a better and more 700 MHz and reviewed consistent customer experience. It means the regulatory agenda. All this with the strengthening our value proposition to view to developing a detailed set of make sure our customers can answer the priorities and plans for the company going question “why Rogers?” As a company, we GUY LAURENCE forward. After I complete this review in need to bring our collection of assets PRESIDENT AND CHIEF EXECUTIVE OFFICER the Spring I will outline a detailed strategy together in a way that strengthens and ROGERS COMMUNICATIONS INC. and business plan working with my differentiates Rogers with our customers management team. and our shareholders. We also need to align and focus our investments in key areas Rogers has many strengths and I intend to to accelerate our growth. Internally we capitalize on them. This is a financially need to execute with operational strong company with a solid balance sheet excellence. And we need to focus on and investment grade credit ratings. We clarifying accountabilities and strengthening have highly advanced cable and wireless our teams at all levels of the company. networks and a robust portfolio of media assets. We also have a strong pipeline of new products and services to offer to our customers and some of the most passionate, committed employees I have ever worked with.

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 03 STRATEGIC OBJECTIVES AND VALUE DRIVERS

At Rogers, our purpose is to easily connect customers with what matters most. Our vision is to be known for leading the enablement of seamless, and reliable experiences across any device, place or time.

DELIVER INDUSTRY-LEADING SHAREHOLDER RETURNS

Our mandate is to deliver long-term value and industry-leading shareholder returns. To sustain our lead as the top integrated telecommunications and media company in Canada, our actions and investments are guided by the following six long-term strategic objectives:

DELIVER DIFFERENTIATED MAINTAIN INDUSTRY-LEADING EXPAND OUR SERVICES REACH END-TO-END CUSTOMER NETWORKS EXPERIENCES Focus on evolving our cross-device Reinforce our fastest and most reliable Expand the reach of our networks and integration to enable seamless, networks by expanding our LTE services through new construction and reliable and easy-to-use experiences network to a wider proportion of the targeted acquisitions that complement anytime, anyplace and anywhere; on Canadian population, continuing to our existing platforms; by more widely delivering a differentiated range of increase broadband Internet speeds deploying products and services; and devices and device-related services; to capture and monetize the growth by expanding the reach of key media and on enabling greater integration in data consumption, and further brands nationally and across our digital of our media assets across screens. enhancing our TV platform with next platforms. generation features and functionality.

STRENGTHEN THE IMPROVE PRODUCTIVITY DRIVE FUTURE GROWTH CUSTOMER EXPERIENCE AND COST STRUCTURE OPPORTUNITIES

Constantly improve the experience Continue to focus on cost-optimization Continue to develop targeted new that customers have using our initiatives and organizational efficiency growth areas of our business, including products and services by making it by improving service delivery; reducing machine-to-machine communications, easier for them; providing the tools complexity; focusing on fewer, more mobile commerce and video, sports, and resources customers need to use impactful projects; managing expenses, business communications services, our products with confidence; being and working closely with key suppliers. local and digital media services, attuned to our customers’ evolving and home automation. needs; and continuing to simplify our product offerings.

FOR A DETAILED DISCUSSION OF OUR STRATEGIC GOALS AND OBJECTIVES, SEE THE “OUR STRATEGY” SECTION IN THE ACCOMPANYING MD&A LATER IN THE REPORT.

04 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT WHY INVEST IN ROGERS

Rogers Communications has excellent positions in growing markets, powerful brands that stand for innovation, proven management, a long record of driving growth and shareholder value, and the financial strength to continue to deliver long-term growth.

LEADER IN CANADIAN MUST-HAVE PRODUCTS CATEGORY-LEADING COMMUNICATIONS INDUSTRY AND SERVICES MEDIA ASSETS

Canada’s largest wireless carrier and A leading provider of communications Unique and complementary collection a leading provider, and entertainment products and of leading broadcast radio and offering a “quadruple play” of wireless, services that are increasingly becoming television, specialty TV, sports Internet, television and telephony integrated necessities in today’s world. entertainment, publishing and services to consumers and businesses. digital media assets.

SUPERIOR ASSET MIX STRONG FRANCHISES LEADING NETWORKS AND POWERFUL BRANDS AND INNOVATIVE PRODUCTS

Majority of revenue and cash flow is Strong franchises with nationally Leading wireless and broadband generated from wireless and broadband recognized and highly respected network platforms that deliver the services, the fastest growing segments brands that stand solidly in Canada most innovative communications, of the telecommunications industry. for innovation, choice and value. information and entertainment services.

PROVEN LEADERSHIP AND FINANCIAL STRENGTH HEALTHY TRADING VOLUME ENGAGED EMPLOYEE BASE AND FLEXIBILITY AND GROWING DIVIDENDS

Experienced, performance-oriented Financially strong with an investment RCI common stock actively trades on management and operating teams grade balance sheet, conservative debt the TSX and NYSE, with average daily with solid industry expertise, leverage, and significant available trading volume of approximately supported by the spirit of innovation financial liquidity. 1.6 million shares. Each share pays and an entrepreneurial culture. an annualized dividend of $1.83 per share in 2014.

ANNUALIZED DIVIDENDS PER SHARE: 2008–2013 ADJUSTED NET INCOME AND EARNINGS PER SHARE

$1.74 ADJUSTED NET INCOME ($ IN BILLIONS) $3.42 $1.58 ADJUSTED DILUTED EARNINGS PER SHARE $3.41 $1.42 $3.17 $2.94 $1.28 $1.16 $2.53 $1.8 $1.8 $1.00 $1.99 $1.7 $1.7 $1.6

$1.3

2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 05 WIRELESS EVERYWHERE

ROGERS KNOWS THAT NO MATTER WHERE ITS CUSTOMERS ARE, BEING IN TOUCH WITH FRIENDS, FAMILY AND COLLEAGUES MAKES THEIR LIVES MORE CONNECTED. CANADA’S WIRELESS SMARTPHONES FASTEST WIRELESS AND BEING CONNECTED ANYTIME, ANYWHERE, TO THE VOICE & DATA & TABLETS NETWORK INFORMATION AND ENTERTAINMENT THAT MATTERS MOST MAKES LIFE EASIER AND MORE ENJOYABLE.

MOBILE SOCIAL MEDIA ANYWHERE That’s why, in the city and around the world, millions of Canadians rely INTERNET & NETWORKING TV VIEWING on Rogers to keep them connected, and to put the Internet in their pockets with the most advanced wireless services, blistering-fast speeds, and seamless coverage. And they do so with the flexibility and REMOTE HOME MOBILE VIRTUAL OFFICE MONITORING peace of mind that comes with Rogers Share Everything plans which PAYMENTS CONNECTIVITY & AUTOMATION allow families and businesses to share wireless data between their wireless devices and add additional devices to their plans.

06 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT With Canada’s first and fastest LTE wireless network – the global gold And now, small businesses as well as households can enjoy the flexibility standard in wireless network technology – Rogers makes “place- and value of Rogers new Wireless Home and Small Business Phone shifting” a reality so customers can connect to their communications, products as well. information and entertainment from almost anywhere, easily and Customers know that Rogers makes it easy and seamless to connect seamlessly. With Rogers, watching TV on the train, conducting a virtual with the same personalized information, communications and white-boarding session from the beach, disarming a home monitoring entertainment experiences no matter where they are – at work, at system from a smartphone, or answering a home phone from 5,000 school, at home or away, including when travelling to more than 200 kilometers away are becoming everyday activities. Rogers customers no countries around the world. And they know that only Rogers is there longer have to pick up the phone to check their voicemail; they don’t first with innovative new services, such as mobile TV, remote home need to be in town to catch their local news; and they don’t have to be monitoring, and Rogers One Number, which allows them to switch calls at their PCs to access their e-mail. And with Rogers, businesses no between their wireless device, computer, and home phone without longer need to work in traditional offices because we help them to interruption; manage e-mails, text messages and voicemail; hold live quickly set up virtual workspaces, with complete access to customers, video chats; and combine and sync contacts from across multiple colleagues, files and corporate applications, so they are as productive devices – no matter where they are. on the road as they are in the office.

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 07 CONNECTED HOME

ROGERS CONTINUES TO DEFINE HOW FAMILIES COME TOGETHER AND CONNECT WITH THEIR WORLD. MILLIONS OF CANADIANS DEPEND ON ROGERS TO KEEP THEM INFORMED, BROADBAND HOME WHOLE HOME CONNECTED AND ENTERTAINED WITH A COMBINATION OF INTERNET TELEPHONY PVR THE FASTEST INTERNET SPEEDS AND THE MOST INNOVATIVE TELEVISION, TELEPHONY AND HOME MONITORING SOLUTIONS AVAILABLE. CATEGORY- E-MAIL ANY SCREEN LEADING MEDIA & MESSAGING STREAMING TV CONTENT The core of Rogers connected home strategy is to provide customers with the fastest broadband connections, together with the ability to seamlessly shift – to shift time, to shift screens and to shift places so they CONVERGED HOME ON-DEMAND WIRELESS/ MONITORING access what they want, when they want, on the screen of their choice. VIDEO CONTENT WIRELINE & AUTOMATION Rogers offers the best in on-demand, sports, movies, specialty, episodic and multicultural programming. Customers can schedule, pause, rewind

08 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT and view content on demand. They can search content and control their among their computer, home phone and wireless device without PVR remotely from their smartphone. They can stream programming to interruption; manage e-mails; text messages and voicemail; hold live their tablet anywhere in their home. A single Rogers Nextbox serves as video chats; and combine and sync contacts from across multiple devices. a master PVR for the entire home enabling simultaneous viewing and When they’re not at home, more and more customers also rely on recording of up to eight separate shows and storage of over 250 hours Rogers Smart Home Monitoring, a complete monitoring, automation of high-definition programming. And customers can access television and security solution that includes the most innovative technology and and movie content on-demand from anywhere by laptop, tablet or features available. Smart Home Monitoring lets customers monitor, smartphone using the Rogers Anyplace TV app. control and receive alerts by smartphone or online, staying connected Television has never been this good, this easy, or this simple to control. to their home from almost anywhere, and enjoying the peace of mind And it’s even better when combined with innovative Rogers features, that comes with having the most reliable monitoring solution available. such as the ability to screen phone calls on their TV, listen to voicemail Smart Home Monitoring also gives customers the ability to automate on their tablet, or receive talking text messages on their home phone. lights, appliances, thermostats and more, so they know their homes are Wireless customers can also use Rogers One Number to switch calls not only secure but more energy-efficient and convenient, also.

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 09 BUSINESS SOLUTIONS

IN TODAY’S FAST-PACED DIGITAL WORLD OF BUSINESS, THE ABILITY TO COMMUNICATE AND ACCESS INFORMATION ANYTIME, ANYPLACE IS A COMPETITIVE ADVANTAGE THAT WIRELESS BUSINESS ADVERTISING BUSINESS PROFESSIONALS LOOK TO ROGERS TO PROVIDE. VOICE & DATA TELEPHONY MEDIA SOLUTIONS ROGERS ENSURES THE INFORMATION THAT DRIVES COMMERCE FORWARD IS ALWAYS ON HAND AND HELPS BUSINESSES DEFINE HOW TO WIN IN THE DIGITAL WORLD. MOBILE INTERNET ADVANCED DATA CENTRE & & E-MAIL M2M SOLUTIONS CLOUD SERVICES Rogers provides a single reliable source for advanced business-focused voice, Internet and data networking solutions designed specifically for the most demanding of wireless and wired commercial requirements. BUSINESS IP VIRTUAL DATA SOLUTIONS OFFICE NETWORKING Businesses across Canada rely on Rogers for its national wireless network, world-leading LTE technology, seamless global connectivity, and the broadest array of wireless applications and devices, because they know that their mobility and remote connectivity needs are always covered with the most advanced solutions available. Because Rogers 10 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT knows how businesses work, we also offer a choice of specifically across its fibre-optic network that connects thousands of commercial designed plans and options that allow users to share buckets of voice and municipal buildings. These next generation on-net services for and data, connect directly with team members, establish wireless enterprise customers are backed by dedicated, around-the-clock backup for point-of-sale and other systems, and roam frequently with support and connectivity to Rogers high-speed national fibre-optic cost certainty. backbone that provides redundancy as well as seamless connectivity into the United States and Europe. For hundreds of thousands of smaller businesses located in and around Rogers cable footprint, Rogers offers a compelling set of wired Rogers also provides the most extensive set of advanced wireless telephony and Internet solutions that provide enterprise-grade machine-to-machine connectivity solutions which help businesses to dependability and value. With voice, data, hosting and online security increase productivity, reduce costs and optimize operations. As well, solutions built specifically for business, Rogers provides a single reliable Rogers remains at the forefront of mobile commerce and electronic source for innovative, dependable communications solutions that are payments solutions in the Canadian market. backed up by around-the-clock live agent support. Businesses across Canada also connect with customers through Rogers Larger enterprises also increasingly rely on Rogers to deliver corporate- leading media brands as the one-stop solution for all their local and critical voice, Internet, networking and managed data centre solutions national radio, television, online and print advertising needs.

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 11 LEADING CONTENT

ROGERS IS COMMITTED TO DELIVERING WORLD-CLASS CONTENT AND EXPERIENCES TO CONSUMERS AND ADVERTISING SOLUTIONS TO BUSINESSES. THE COMPANY LEADING NATIONAL CITY NATIONAL SPORTSNET TV RADIO TELEVISION HAS A STRONG LEGACY OF BUILDING POWERFUL MEDIA FRANCHISE PORTFOLIO NETWORK BRANDS WITH COMPELLING CONTENT THAT RESONATES WITH AUDIENCES ACROSS MULTIPLE PLATFORMS ON ANY DEVICE.

OMNI TELEVISED TORONTO MULTICULTURAL SHOPPING BLUE JAYS Today, businesses across Canada connect with customers through Rogers NETWORK NETWORK BASEBALL TEAM category-leading television and radio assets, sports entertainment, televised and online shopping, publishing, and digital media properties as the one-stop solution for all their local and national advertising needs. 37.5% OWNERSHIP ICONIC DIGITAL MEDIA OF LEAFS, MAGAZINE PORTFOLIO RAPTORS & TFC BRANDS Rogers Media is Canada’s premier combination of diversified broadcast, specialty, sports, print and online media assets which together touch nearly 90% of Canadians every week. This includes over 50 popular AM and FM radio stations across Canada. In television, it includes the seven station City network which broadcasts intensely local, urban-oriented 12 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT programming across the country’s largest markets, as well Rogers also publishes many well-known consumer magazines, such as as five OMNI Television stations which deliver multilingual news, Maclean’s, Chatelaine, FLARE, L’actualité, and Canadian Business, and is information and entertainment to Canada’s multiple language the leading publisher of a number of industry, medical and financial communities. publications. Rogers also controls a suite of fast-growing digital media assets, including 90+ owned and 300+ premium partnership online The Sportsnet specialty network provides sports programming across sites, as well as the recently launched Next Issue Canada digital Canada through its four regional television channels and its nationally- magazine platform which provides 100+ of North America’s most distributed , , and celebrated titles on an unlimited anytime, anywhere basis. stations. Rogers also owns other Canadian specialty television channels, including FX Canada, OLN, The Biography Channel and G4. In sports entertainment, Rogers owns the baseball team and Rogers Centre stadium, Canada’s largest sports and The Shopping Channel – Canada’s only nationally televised and entertainment facility and home field of the Blue Jays. Rogers also holds Internet shopping service – is a leading interactive multi-channel a 37.5% investment in Maple Leaf Sports & Entertainment which owns retailer, offering a vast assortment of exclusive products and top brand the NHL Maple Leafs, NBA Raptors, MLS Toronto FC and a number of names. As one of Canada’s most innovative and diversified retailers, other sports related assets. it provides customers with exceptional selections in health/beauty, jewelry, home/lifestyle, fashion/accessories, and electronics. 2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 13 DELIVERING WHAT’S NEXT

INNOVATION AND A DRIVE TO BE FIRST TO DELIVER THE MOST ADVANCED INFORMATION, COMMUNICATIONS, ENTERTAINMENT AND TRANSACTION SERVICES, SOLUTIONS LEADING MACHINE-TO- MOBILE NEXT GENERATION MACHINE AND DEVICES ARE AT THE VERY CORE OF ROGERS. COMMERCE NETWORKS COMMUNICATIONS As one of the first carriers in the world to offer the telecommunications “quadruple play” of wireless, television, Internet and telephony services MOBILE HOME DIGITAL MEDIA STREAMING over its own networks, few have more capabilities or success in enabling AUTOMATION TELEVISION subscribers to enjoy their experiences across multiple screens. Rogers has a long history of firsts, including the first cellular call in Canada,

CONVERGED ENTERPRISE the world’s first high-speed cable modem service, the first digital cellular ADVANCED IP WIRELESS/ MOBILE SOLUTIONS network in North America, Canada’s first video-on-demand and mobile WIRELINE APPLICATIONS TV services, the first HSPA and LTE networks and the first to offer iPhone, Android, BlackBerry and Windows 8 in Canada. With the combination of our advanced next-generation national wireless network, our powerful broadband cable infrastructure and our category-leading media assets, 14 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT we are in a unique position to help Canadians to live like never before. Our new wireless Share Everything plans were Canada’s first to let Rogers continues to be Canada’s innovation leader in rapidly growing individuals, families and small businesses share wireless data and areas such as wireless machine-to-machine communications, remote unlimited nationwide talk and text, with up to 10 wireless devices. home monitoring and automation, mobile payments, in-car Rogers recently further enhanced its exciting One Number service by infotainment and telematics, and digital media. As well, Rogers has introducing smartphone apps which enable customers to use mobile deployed a suite of unique local digital services that create virtual data or Wi-Fi to talk, text and video chat using their existing Rogers marketplaces for bringing consumers and businesses together and wireless number from any device. provide location-based targeted offers. We also keep customers informed and entertained with Rogers next- These are just a few examples of the ways Rogers continues to generation NextBox 3.0 TV experience which allows customers to view innovate and lead the way, introducing wireless, broadband and digital and record up to eight HD programs simultaneously, store hundreds of technologies and services that fundamentally change the way hours of content and enjoy whole-home PVR capability. And with customers stay connected, informed and entertained anywhere they Rogers Anyplace TV, it’s also a wireless experience where viewers can are. Canadians know there’s one thing to be certain of – if they’re with navigate their cable guide, use a virtual remote, set PVR recordings and Rogers, they’ll never miss a thing. stream live or on-demand content from a tablet, smartphone, laptop or gaming console.

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 15 SOCIAL RESPONSIBILITY

ATTAINING LEADERSHIP IN OUR INDUSTRY AND THE PRIVILEGE OF BEING CANADIANS’ COMPANY-OF-CHOICE IS ABOUT DELIVERING THE BEST INNOVATIVE SERVICES WHILE YOUTH ECONOMIC ARTS & BEING A RESPONSIBLE BUSINESS – AIMS THAT ARE DEEPLY EDUCATION CONTRIBUTIONS CULTURE CONNECTED.

Each year we work hard to build a more sustainable business and EMPLOYEE ENVIRONMENTAL ETHICAL contribute to building a more sustainable world. Applying social and EXPERIENCE RESPONSIBILITY SUPPLY CHAIN environmental responsibility throughout Rogers’ daily operations – and beyond our own walls to our supply chain and communities – helps us attract customers, enhance employee recruitment and retention, mitigate COMMUNITY GOOD LOCAL SHELTERS INVESTMENT GOVERNANCE & FOOD BANKS risks and provide value to all of our stakeholders. To create a great workplace, we focus on all aspects of the employee experience – investing millions in employee training and development, providing attractive compensation and benefits, and developing a

16 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT positive health, safety and wellness culture. In 2013, Rogers was And, as a service provider to millions of customers each month, we’ve recognized as one of Canada’s Top 100 Employers and one of the been an early and strong proponent of paperless electronic billing. Best Diversity Employers. In 2013, Rogers was also named one of Canada’s Greenest Employers, an award recognizing companies that lead the nation in incorporating In support of positive change in communities across Canada, Rogers environmental values into their corporate culture. provided cash and in-kind donations to support various organizations and causes, including youth education through our flagship program Across our supply chain, we are committed to ethical procurement Rogers Youth Fund. This fund supports after-school homework clubs, and have a strong framework in place to achieve this. Rogers continually academic tutoring and alternative schooling that help youth excel. works with our partners through our agreements, relationships and As a natural extension of our business, we also contribute significant Supplier Code of Conduct to ensure that we collectively adhere to funding to encourage the development of innovative and creative sound sourcing, production and environmental standards. Canadian content for film, television and wireless mobile devices.

Environmental stewardship is a key pillar of our CSR strategy. With a For a complete description of Rogers CSR priorities and performance, focus on continually improving our environmental performance, we go to rogers.com/csr measure our carbon footprint each year and undertake initiatives to reduce our greenhouse gas emissions, paper consumption and waste. 2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 17 CHAIR • MEMBER BOARD OF DIRECTORS AND ITS COMMITTEES AS OF FEBRUARY 11, 2014 AUDIT CORPORATE NOMINATING HUMAN EXECUTIVE FINANCE PENSION GOVERNANCE RESOURCES

Alan D. Horn, CPA, CA

Peter C. Godsoe, O.C., O. Ont.

C. William D. Birchall

Stephen A. Burch

John H. Clappison, FCPA, FCA

Thomas I. Hull

Guy Laurence

Philip B. Lind, CM

John A. MacDonald

Isabelle Marcoux

The Hon. David R. Peterson, PC, QC

Edward S. Rogers

Loretta A. Rogers

Martha L. Rogers

Melinda M. Rogers

Dr.

John H. Tory, O. Ont.

CORPORATE GOVERNANCE

Rogers Communications’ Board of Directors is strongly committed to our codes of conduct and ethics, full committee charters and Board sound corporate governance and continually reviews its governance member biographies – in the Corporate Governance section within the practices and benchmarks them against acknowledged leaders and Investor Relations section of rogers.com. Also in the Corporate evolving legislation. We are a family-founded and controlled company Governance portion of our website, you will find a summary of the and take pride in our proactive and disciplined approach towards differences between the NYSE corporate governance rules applicable to ensuring that Rogers governance structures and practices are deserving U.S.-based companies and our governance practices as a non-U.S.-based of the confidence of the public capital markets. issuer that is listed on the NYSE.

With the December 2008 passing of Company founder and CEO Ted The Audit Committee reviews the Company’s accounting policies and Rogers, his voting control of Rogers Communications passed to a trust of practices, the integrity of the Company’s financial reporting processes which members of the Rogers family are beneficiaries. This trust holds and procedures, and the financial statements and other relevant public voting control of Rogers Communications for the benefit of successive disclosures to be provided to the public. The Committee also assists the generations of the Rogers family. Board in its oversight of the Company’s compliance with legal and regulatory requirements relating to financial reporting and assesses the As substantial stakeholders, the Rogers family is represented on our systems of internal accounting, financial controls, risk management and Board and brings a long-term commitment to oversight and value the qualifications, independence and work of external auditors and creation. At the same time, we benefit from having outside Directors internal auditors. who are experienced North American business leaders. The Corporate Governance Committee assists and makes The Rogers Communications Board believes that the Company’s recommendations to the Board to ensure the Board of Directors has governance and risk management systems are effective and that the developed appropriate systems and procedures to enable it to exercise appropriate structures and procedures are in place. and discharge its responsibilities. To carry this out, the Corporate The composition of our Board and structure of its various committees are Governance Committee assists the Board in developing, recommending outlined in the table above and on the following page. As well, we make and establishing corporate governance policies and practices and leads available detailed information on our governance structures and practices the Board in its periodic review of the performance of the Board and its – including our complete statement of Corporate Governance practices, committees.

18 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT “Rogers has long benefited from strong, independent voices and Directors in the boardroom and sound governance structures, which ensure that their influence is real. The structure of our Board is very much intended to ensure that the Directors and management act in the interests of all Rogers shareholders – an approach that has helped ensure the continuance of strong, independent, family-founded Canadian companies.”

PETER C. GODSOE, O.C., O. Ont. LEAD DIRECTOR ROGERS COMMUNICATIONS INC.

“ Over the years, the Canadian economy has benefited greatly from family-founded and controlled companies that are able to take a longer-term view of investment horizons and general business management. At Rogers, we have successfully overlaid disciplined corporate governance processes that strike a healthy balance of being supportive of the company’s continued success, making business sense, and benefiting all shareholders.”

ALAN D. HORN, CPA, CA CHAIRMAN OF THE BOARD ROGERS COMMUNICATIONS INC.

The Nominating Committee identifies prospective Director ROGERS GOOD GOVERNANCE PRACTICES nominees for election by the shareholders and for appointment by the Board and also recommends nominees for each committee of FORMAL CORPORATE the Board, including each committee’s Chair. SEPARATION OF CEO INDEPENDENT GOVERNANCE POLICY & CHAIRMAN ROLES LEAD DIRECTOR The Human Resources Committee assists the Board in & CHARTERS monitoring, reviewing and approving compensation and benefit policies and practices. The Committee is responsible for CODE OF BUSINESS recommending senior management compensation and for DIRECTOR SHARE BOARD & COMMITTEE CONDUCT & OWNERSHIP IN CAMERA monitoring succession planning with respect to senior executives. WHISTLEBLOWER GUIDELINES DISCUSSIONS HOTLINE The Executive Committee assists the Board in discharging its responsibilities in the intervals between meetings of the Board, including to act in such areas as specifically designated and AUDIT COMMITTEE ANNUAL REVIEWS ORIENTATION authorized at a preceding meeting of the Board and to consider MEETINGS WITH OF BOARD & DIRECTOR PROGRAM FOR INTERNAL & EXTERNAL matters concerning the Company that may arise from time to time. PERFORMANCE NEW DIRECTORS AUDITORS The Finance Committee reviews and reports to the Board on matters relating to the Company’s investment strategies and general debt and equity structure. COMMITTEE DIRECTOR MATERIAL REGULAR BOARD AUTHORITY TO RELATIONSHIP The Pension Committee supervises the administration of the EDUCATION SESSIONS RETAIN INDEPENDENT STANDARDS Company’s pension plans and reviews the provisions and ADVISORS investment performance of the Company’s pension plans.

For a complete description of Rogers corporate governance structure and practices and biographical information of our Directors and copies of our annual information circular and proxy, go to rogers.com/investors

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 19 DIRECTORS OF ROGERS COMMUNICATIONS INC. AS OF FEBRUARY 11, 2014

1 2

3 4 5 6 7 8

9 10 11 12 13

DIRECTORS

1 Alan D. Horn, CPA, CA 6 Thomas I. Hull 10 Loretta A. Rogers Chairman, President and Chairman and Chief Executive Officer, Company Director Chief Executive Officer, The Hull Group of Companies Rogers Telecommunications Ltd. 11 Martha L. Rogers 18 Philip B. Lind, CM* Doctor of 2 Peter C. Godsoe, O.C., O. Ont. Executive Vice President, Naturopathic Medicine Lead Director, Regulatory and Vice Chairman, Company Director Rogers Communications 23 Melinda M. Rogers* Senior Vice President, 14 Guy Laurence* 7 John A. MacDonald Strategy and Development, President and Chief Executive Officer, Company Director Rogers Communications Rogers Communications 8 Isabelle Marcoux 12 Dr. Charles Sirois 3 Charles William David Birchall Chair, Chief Executive Officer, Vice Chairman, Transcontinental Inc. Telesystem Ltd. Barrick Gold Corporation 9 The Hon. David R. Peterson, PC, QC 13 John H. Tory, O. Ont. 4 Stephen A. Burch Senior Partner and Chairman, Company Director Chairman, Cassels Brock & Blackwell LLP University of Maryland Medical Systems 22 Edward S. Rogers* For detailed biographical 5 John H. Clappison, FCPA, FCA Deputy Chairman and information of Rogers Directors, Company Director Executive Vice President, go to rogers.com/investors Emerging Business, Corporate Development, Rogers Communications

* Management Directors are pictured on the following page.

20 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT SENIOR EXECUTIVE OFFICERS OF ROGERS COMMUNICATIONS INC. AS OF FEBRUARY 11, 2014

14 15 16 17 18 19

20 21 22 23 24 25

SENIOR EXECUTIVE OFFICERS

14 Guy Laurence 20 Keith W. Pelley For detailed biographical information President and Chief President, Rogers Media of Rogers Executive Officers, go to Executive Officer rogers.com/investors 21 Jim M. Reid 15 Robert F. Berner Senior Vice President, Executive Vice President, Human Resources and Network and Chief Technology Officer Chief Human Resources Officer

16 Robert W. Bruce 22 Edward S. Rogers President, Deputy Chairman and Communications Division Executive Vice President, Emerging Business, 17 Linda P. Jojo Corporate Development Executive Vice President, Information Technology and 23 Melinda M. Rogers Chief Information Officer Senior Vice President, Strategy and Development 18 Philip B. Lind, CM Executive Vice President, 24 Anthony Staffieri, FCPA, FCA Regulatory and Vice Chairman Executive Vice President and Chief Financial Officer 19 David P. Miller Senior Vice President, 25 Terrie L. Tweddle Legal and General Counsel Vice President, Corporate Communications

2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 21 POWERFUL LIKE NEVER BEFORE

22 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 23 hareholders’ S ROGERS COMMUNICATIONS INC. Expenses Instruments Purchase Plans tatements of Income tatements of Comprehensive Income tatements of Financial Position tatements of Changes in tatements of Cash Flows S S S S S 2013 ANNUAL REPORT REPORTING ACCOUNTING FIRM Equity 9494 Note 1:102 Note 2: Nature of the Note103 Business 3: Significant Accounting Policies Note103 4: Segmented Information Note103 5: Operating Costs Note104 6: Finance Costs Note105 7: Discontinued Operations Note 8: Business Combinations 106 Restructuring, Acquisition and Other Note107 9: Note107 10: Income Taxes Earnings Note Per107 11: Share Other Note Current108 12: Assets Property, Note Plant109 13: and Equipment Goodwill Note and110 14: Intangible Assets Investments Note110 15: Other Note Long-Term110 16: Assets Accounts Note Receivable111 17: Securitization Provisions Note112 18: Long-Term Note Debt 113 19: Capital Note Risk 20: Management Financial Risk117 Management and Financial Note118 21: Other Note Long-Term120 22: Liabilities Pensions Note121 23: Shareholders’ Note Equity 24: Stock Options,122 Share Units and Share Note123 25: Related Note Party124 26: Transactions Guarantees Note125 27: Commitments Note and 28: Contingent Liabilities Subsequent Events 88 MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL 88 INDEPENDENT AUDITORS’ REPORT OF REGISTERED PUBLIC 89 CONSOLIDATED FINANCIAL89 STATEMENTS Consolidated 90 Consolidated 91 Consolidated 92 Consolidated 93 Consolidated 94 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ummary S to 2012 Guarantor overnance and Risk Management 2627 About Rogers Communications Inc. 2013 Highlights 3031 Our Strengths 32 Industry Trends 33 Our Strategy Financial and Operating Guidance 3435 Summary of Consolidated Results 36 Key Highlights Key Changes in Financial Results37 This Year Compared 41 Wireless 45 Cable 47 Business Solutions 50 Media 51 Additions to Property, Plant and54 Equipment Review of Consolidated Performance 57 Quarterly Results Balance Sheet Overview 5861 Sources and Uses of Cash 62 Financial Condition 65 Financial Risk Management 66 Dividends and Share Information 66 Commitments and Other Contractual Obligations Off-Balance Sheet Arrangements G 7172 Governance at Rogers 74 Risk Management 78 Risks and Uncertainties Affecting Our Business Controls and Procedures 7982 Accounting Policies 84 Key Performance Indicators 84 Additional GAAP Measures 86 Non-GAAP Measures Summary of Financial Results of87 Long-Term Debt Five-Year Summary of Consolidated Financial Results 29 Understanding Our Business 34 2013 Financial Results 58 Managing Our Liquidity and Financial Resources 67 Regulation in71 Our Industry 79 Other Information 2426 MANAGEMENT’S DISCUSSION AND ANALYSIS Executive 2013 Financial Report Management’s Discussion and Analysis FOR THE YEAR ENDED DECEMBER 31, 2013

This Management’s Discussion and Analysis (MD&A) contains important • property, plant and equipment expenditures information about our business and our performance for the year • cash income tax payments ended December 31, 2013. This MD&A is current as of February 12, • free cash flow before and after cash income taxes 2014 and was approved by our Board of Directors. • dividend payments • expected growth in subscribers and the services they subscribe to You should read this MD&A together with our 2013 Audited • the cost of acquiring and retaining subscribers and deployment of Consolidated Financial Statements and Notes, which have been new services prepared in accordance with International Financial Reporting Standards • continued cost reductions and efficiency improvements (IFRS). • the growth of new products and services We report our results of operations in four segments: Wireless, Cable, • all other statements that are not historical facts. Business Solutions and Media. Wireless, Cable and Business Solutions Specific forward-looking information included or incorporated in this are operated by Rogers Communications Partnership and our other document include, but is not limited to, our information and statements wholly owned subsidiaries. Media is operated by our wholly owned under “Financial and Operating Guidance” relating to our 2014 subsidiary Rogers Media Inc. and its subsidiaries. consolidated guidance on adjusted operating profit, property plant and We, us, our, Rogers, Rogers Communications and the Company refer to equipment expenditures and after-tax free cash flow. All other Rogers Communications Inc. and our subsidiaries. statements that are not historical facts are forward-looking statements.

RCI refers to the legal entity Rogers Communications Inc., not including We base our conclusions, forecasts and projections (including the our subsidiaries. RCI also holds interests in various investments and aforementioned guidance) on the following factors, among others: ventures. • general economic and industry growth rates • currency exchange rates We are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and • product pricing levels and competitive intensity RCI.B) and on the New York Stock Exchange (NYSE: RCI). • subscriber growth All amounts are in Canadian dollars unless otherwise stated. All • pricing, usage and churn rates percentage changes are calculated using the rounded numbers as they • changes in government regulation appear in the tables. Charts, graphs and diagrams are included for • technology deployment reference; however, they do not form part of this MD&A. • availability of devices • timing of new product launches In this MD&A, this year refers to the year ended December 31, 2013, • content and equipment costs and last year refers to the year ended December 31, 2012. • the integration of acquisitions • industry structure and stability. ABOUT FORWARD-LOOKING INFORMATION This MD&A includes “forward-looking information” within the meaning Except as otherwise indicated, this MD&A and our forward-looking of applicable securities laws, and assumptions about, among other statements do not reflect the potential impact of any non-recurring or things, our business, operations and financial performance and other special items or of any dispositions, monetizations, mergers, condition approved by management on the date of this MD&A. This acquisitions, other business combinations or other transactions that may forward-looking information and these assumptions include, but are be considered or announced or may occur after the date the statement not limited to, statements about our objectives and strategies to achieve containing the forward-looking information is made. those objectives, and about our beliefs, plans, expectations, anticipations, estimates or intentions. RISKS AND UNCERTAINTIES Actual events and results can be substantially different from what is Forward-looking information and statements: expressed or implied by forward-looking information because of risks, • typically include words like could, expect, may, anticipate, assume, uncertainties and other factors, many of which are beyond our control. believe, intend, estimate, plan, project, guidance, outlook and similar These include but are not limited to: expressions, although not all forward-looking information and • new interpretations and new accounting standards from accounting statements include them standards bodies • include conclusions, forecasts and projections that are based on our • economic conditions current objectives and strategies and on estimates, expectations, • technological change assumptions and other factors, most of which are confidential and • the integration of acquisitions proprietary and that we believe to be reasonable at the time they • unanticipated changes in content or equipment costs were applied but may prove to be incorrect • changing conditions in the entertainment, information and • were approved by our management on the date of this MD&A. communications industries Our forward-looking information and statements include forecasts and • regulatory changes projections related to the following items, among others: • litigation and tax matters • revenue • the level of competitive intensity • adjusted operating profit • the emergence of new opportunities.

24 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 25 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT You can findCircular more and information Annual aboutinvestors), Information us, on Form, SEDAR including (sedar.com) on oure-mail and our Information on us EDGAR website (sec.gov),connected (rogers.com/ or to at these you and can [email protected]. anyis other not websites part Information referenced of in this this MD&A. on document You or can alsogovernance go to practices,glossary rogers.com/investors corporate of for communications information social andinformation about about media our responsibility industry our business. terms, reporting, and additional a FOR MORE INFORMATION BEFORE MAKING AN INVESTMENT DECISION Before making any investment decisionsthe and for risks, a uncertainties detailed and discussionfully of environment review associated “Regulation withManagement”, in our in Our business, this Industry” MD&A,Canadian and as and well “Governance US securities as and regulators ourand Risk which various sec.gov. can other be found filings at with sedar.com These factors can alsoMany affect our of objectives,expectations. strategies these Should and one intentions. factors orfactors more of are materialize, these our risks, beyond objectives,any uncertainties strategies or our other other or intentionsinformation control factors prove change, incorrect, or or or our actualsignificantly assumptions results from our what and we underlying our currently current plans foresee. could the vary Accordingly, forward-looking we warn investorsstatements containing to forward-looking exercise information cautionbe and when unreasonable that considering to itregarding rely our would on future results suchwe or statements plans. expressly We as are disclaim creatingstatements under no any legal containing obligation rights forward-looking such (and assumptions information obligation) underlying or them, to whether thefuture as update factors a events result or or of orforward-looking alter new information information, otherwise, in any this except MD&Astatements is herein. as qualified by required the cautionary by law. All of the MANAGEMENT’S DISCUSSION AND ANALYSIS

Executive Summary ABOUT ROGERS COMMUNICATIONS INC. Rogers Communications is one of Canada’s leading diversified communications and media companies.

We provide a broad range of services: wireless and wired voice and data 2013 CONSOLIDATED REVENUE BY SEGMENT communications, cable television, high-speed Internet, cable telephony, (%) wired telecom and data networking services to consumers and businesses. We also compete in television and radio broadcasting, WIRELESS 57% multi-platform shopping, sports media and entertainment, digital media CABLE 27% and consumer, trade and professional publications. $12.7 Almost all of our operations and sales are in Canada. We have a highly BILLION skilled and diversified workforce of approximately 28,000 employees. MEDIA 13% Our head-office is in Toronto, Ontario and we have numerous offices BUSINESS SOLUTIONS 3% across Canada.

FOUR BUSINESS SEGMENTS We report our results of operations in four segments. 2013 CONSOLIDATED ADJUSTED OPERATING PROFIT BY SEGMENT (%)

Wireless Wireless telecommunications operations WIRELESS 61% for consumers and businesses Cable Cable telecommunications operations, CABLE 33% including cable television, Internet and $5.0 cable telephony for BILLION Canadian consumers and businesses MEDIA 4% BUSINESS SOLUTIONS 2% Business Solutions Network connectivity through our fibre network assets to support a range of voice, data, networking, data centre and cloud-based services for medium and large Canadian businesses, governments, and other telecommunications providers Media A diversified portfolio of media properties, including television and radio broadcasting, digital media, multi- platform shopping, publishing and sports media and entertainment

26 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 27 Chg Chg % % “Non-GAAP te or alternative for % % % % % % % 89 19 2.3 190 (15) 3.323.30 (2) (2) 3.41 – 48 40 2012 2012 8.6 2,766 6 2,0291,649 1 (6) 9,437 1 1,725 (3) 2,214 (4) 3,421 17 3,063 3 1,864 5 1,074 7 1,605 7 45.6 38.7 1.29 47.8 26,801 5 $ 59.79 – Years ended December 31 Years ended December 31 $ 12,486 2 $ 4,834 3 $ 7,280 – $ 3,358 3 $ 1,781 (1) $ 351 7 $ 1,620 5 % % % % 2.4 % % % 54 44 106 161 2013 7.1 3.24 3.22 3.42 9,503 2,127 1,961 1,153 2013 ROGERS COMMUNICATIONS INC. 2,926 2,044 1,548 1.24 1,669 3,990 3,157 1,718 28,026 46.8 39.3 49.4 $ 59.58 $ 12,706 $ 4,993 $ 7,270 $ 3,475 $ 1,769 $ 374 $ 1,704 2013 ANNUAL REPORT 1 1,3 ”. of network revenue % 3 3 1 1 3 2 3 : 1 olutions S Operating profit Operating profit margin Net income Diluted earnings per share 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 As defined. See “Additional GAAP Measures”. As defined. See “Key Performance Indicators As adjusted amounts, pre-tax free cash flow, after-tax cash flow and adjusted net debt are Non-GAAP measures and should not be considered as a substitu Measures” for information about these measures, including how we calculate them. ubscriber counts results (000s) Consolidated Operating revenue As adjusted S (In millions of dollars, except per share amounts) 2 3 1 Wireless blended ARPU Wireless subscribers Wireless churn Key Performance Indicators Net income After-tax free cash flow Wireless Operating revenue Television subscribers 2013 HIGHLIGHTS Key Financial Information Basic earnings per share from continuingDiluted operations earnings per share from continuingCash operations provided by operating activities Adjusted operating profit Internet subscribers Pre-tax free cash flow Adjusted operating profit margin as Phone subscribers Cable Operating revenue Additional Wireless metrics Adjusted operating profit Adjusted operating profit margin Adjusted net debt/adjusted operating profit Employee-related information Total active employees Operating income Dividends as a percentage of pre-taxReturn free on cash assets flow Ratios Dividend payout ratio Business Operating revenue Adjusted operating profit Media Operating revenue Adjusted operating profit MANAGEMENT’S DISCUSSION AND ANALYSIS

Key Achievements Higher Operating Revenue and Adjusted Operating Profit • Ended the year with $4.5 billion of available liquidity, comprised of • Consolidated operating revenue was 2% higher this year compared $2.3 billion cash on hand, $2 billion available under our bank credit to 2012, led by an increase in data revenue at Wireless, higher facility and $0.2 billion available under our $0.9 billion accounts Internet revenue at Cable, higher Next Generation revenue at receivable securitization program. Business Solutions and higher subscriber revenue at Media. Revenue • In May 2013, each of Fitch Ratings and Standard and Poor’s Ratings grew by 3% in Cable, 7% in Business Solutions and 5% in Media, Services upgraded RCI’s senior unsecured debt to BBB+ (from BBB) with while revenue at Wireless remained unchanged as the increase in a stable outlook, while Moody’s Investors Service’s comparable rating is data revenue was offset by the decrease in voice revenue. Baa1 with a stable outlook remained unchanged from last year. • Consolidated adjusted operating profit rose 3% this year to $4,993 million, with consolidated adjusted operating profit margins of 39.3%, Growing Dividends resulting from higher revenue, the realization of cost efficiencies and • We increased our annualized dividend rate in February 2013 by 10% shifts in the mix of revenue from products and services sold. to $1.74 per Class A Voting and Class B Non-Voting share and paid a • Postpaid Wireless subscriber growth continued with net additions of quarterly dividend of $0.435 per share during 2013. We further 228,000 and lower churn of 1.24%. increased our annualized dividend on February 12, 2014, by 5% • Cable high-speed Internet subscribers grew by 97,000 and cable to $1.83. telephony lines grew by 79,000, while television households New CEO decreased by 87,000 compared to 2012. • Guy Laurence joined Rogers in December 2013, as our new President Strong Cash Flow and Chief Executive Officer, succeeding Nadir Mohamed who retired • Pre-tax free cash flow, defined as adjusted operating profit less from Rogers. Mr. Laurence brings 30 years of global experience in spending on property, plant and equipment, and interest on long- the telecommunications and media industries. term debt (net of capitalized interest), increased by 1% compared to Significant Developments 2012 to $2,044 million due to a 3% increase in adjusted operating • Exclusive 12-year licensing agreement to broadcast national NHL profit offset by higher spending on property, plant and equipment. games, beginning with the 2014-2015 season was signed. The After-tax cash flow decreased by 6% from 2012 levels to $1,548 due agreement grants Rogers the exclusive distribution rights of all to a 31% increase in cash taxes. national regular season and playoff games within Canada, in multiple Strong Balance Sheet and Liquidity Position languages, across all platforms. At the same time, we executed • Issued and fully hedged US$2.5 billion of ten and thirty year senior separate agreements to sublicence certain of these broadcasting notes at some of the lowest coupon rates ever achieved for Rogers rights to TVA Sports and CBC. corporate debt, in two separate offerings comprising: • Strategic acquisitions of Inc. (theScore), Mountain – US$500 million of 3.00% senior notes due 2023 and US$500 Ltd. (Mountain Cable), Blackiron Data ULC (Blackiron) million of 4.50% senior notes due 2043 and Pivot Data Centres were completed. – US$850 million of 4.10% senior notes due 2023 and US$650 • Rogers First Rewards, a new loyalty program allowing customers to million of 5.45% senior notes due 2043 earn points on their eligible purchases and redeem them online for a • Our overall weighted average cost of debt was 5.50% at wide selection of Rogers products and services, was launched in the December 31, 2013 compared to 6.10% at December 31, 2012 and Greater Toronto Area, , Kingston, Sudbury and other cities the weighted average term to maturity on our debt was 11.3 years, throughout Ontario. We also received regulatory approval to launch compared to 9.2 years at December 31, 2012. a Rogers credit card which augments this loyalty program and will accelerate the rate at which customers earn points.

REVENUE BY SEGMENT ADJUSTED OPERATING PROFIT BY SEGMENT (IN MILLIONS OF DOLLARS) (IN MILLIONS OF DOLLARS)

2013 $1,704 $374 $3,475 $7,270 2013 $161 $106 $1,718 $3,157

2012 $1,620 $351 $3,358 $7,280 2012 $190 $89 $1,605 $3,063

2011 $1,611 $405 $3,309 $7,138 2011 $180 $86 $1,549 $3,036

Media Business Solutions Cable Wireless Media Business Solutions Cable Wireless

ADDITIONS TO CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT CONSOLIDATED TOTAL ASSETS (IN MILLIONS OF DOLLARS) (IN MILLIONS OF DOLLARS)

2013 $2,240 2013 $23,601

2012 $2,142 2012 $19,618

2011 $2,127 2011 $18,362

28 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 29 MEDIA see page 47 A diversified Canadian media company that engages in television and radio broadcasting, multi-platform shopping, publishing, digital, and sports media and entertainment. ROGERS COMMUNICATIONS INC. S OLUTION 2013 ANNUAL REPORT SS S provides television and radio broadcasting services to end INE S BU see page 45 Provides Canadian enterprises, government and other telecommunications service providers and partners with highly reliable network and data centre solutions. Newfoundland. We alsofibre-optic operate network a that extendsused North over to American 41,000 serve transcontinental routetelecommunications enterprise kilometres service customers, that providers. including In is coast Canada, government the to and network other extends coastelectronics and and systems, includesinfrastructure. hubs, The local network POPs andsouth also and regional extends IP to to fibre, RoutingMinneapolis, the Seattle, transmission and Milwaukee US, from switching from andBuffalo, and the Chicago, Montreal, through and -Minnesotato Albany, to from connect border New Toronto, York Canada’smarkets through City, for through allowing the largest exchange us of markets, data and while voiceMedia traffic. also reachingcustomers key over US bothnetworks traditional as broadcast networks wellpublications and and as sports new media multi-platform digital andthrough entertainment shopping, its experiences, primarily consumer ownershipdriven and of by advertising trade the and, in Torontoby the case Blue additional of TV Jays. revenues broadcastinggenerated and Revenue from publishing by the is monthly sale largely sports subscriptions. of programming, merchandise Revenue and broadcast is event contentand tickets. also (including on Costs TV include air studios,production costs and writers associated with on each medium. fieldWe talent), report our the results of costwe operations manage in of our four operations segments, merchandise and which measure reflect and our how performance. the provides voice and data of the Canadian population % CABLE see page 41 One of Canada’s leading providers of cable television, high-speed Internet and cable telephony services to consumers and businesses. olutions S Business provides voice and data communications, home is to be known for leading the enablement and delivery of seamless, customer-driven communications, Cable provides wireless voice and data communication services, SS communications and advancedsolutions services and cloud including computinglarge data services to businesses, centre a including based wideeither range other wirelessly of service medium or to from providers, over these and our segments government is terrestrialnetwork usage generally network. rates. based Revenue Costs oncustomers, include generated attracting, monthly content, setting-up subscription and and and theunderlying retaining network. costs of upgrading andOur maintaining the wireless networkadvanced independent is high-speed currently wirelesscapable data one of networks of incomputers supporting Canada, the and a wireless most broaddevices. variety extensive services of We machine-to-machine and on and builtnetwork specialized in smartphones, the Canada, reaching first tablets, at nearly Long 73 December Term 31,international carriers Evolution in 2013. more (LTE) than Weroaming operators 200 high and other also have speed countries, network including havecarriers sharing in arrangements 5 with Canada. LTE roaming several agreements with Our expansive fibreservices to and consumers hybrid and businesses fibre in coaxial Ontario, New infrastructure Brunswick delivers and WIRELE see page 37 Canada’s largest provider of wireless communications services. Wireless including machinebusinesses, to machine governmentsproviders. to and both consumer other and telecommunications enterprise service Our vision Understanding Our Business Rogers Communications is one of Canada’s leading diversified communications and media companies. entertainment, information and transactional experiences across any device, place or time. monitoring, televisionconsumers and and businesses. high-speed Internet services to both MANAGEMENT’S DISCUSSION AND ANALYSIS

OUR STRENGTHS

LEADER IN CANADIAN COMMUNICATIONS INDUSTRY SUPERIOR ASSET MIX Canada’s largest wireless carrier and a leading cable television provider, Majority of revenue and cash flow is generated from wireless and offering quad-play services (i.e. wireless, television, Internet and Internet services. telephony) to consumers and businesses. PROVEN LEADERSHIP AND ENGAGED EMPLOYEE BASE POWERFUL BRANDS Experienced performance-oriented management and operating teams, Strong nationally recognized and highly respected premium brands that with highly developed industry expertise, supported by the spirit of we believe evoke innovation, entrepreneurial spirit, choice and value. innovation and an entrepreneurial culture.

LEADING NETWORKS AND INNOVATIVE PRODUCTS FINANCIAL STRENGTH AND FLEXIBILITY Leading Canadian wireless and cable internet network platforms that Financially strong with an investment grade balance sheet, conservative have been recognized as offering fastest speeds upon which to deliver debt leverage and significant available liquidity. the innovative communications, media, information and entertainment HEALTHY TRADING VOLUMES AND HISTORY OF DIVIDEND services. GROWTH MUST-HAVE PRODUCTS AND SERVICES Our common stock actively trades on the TSX and NYSE with an A leading Canadian provider of communications and entertainment average daily trading volume of approximately 1.6 million shares. products and services that are becoming increasingly integrated and Dividends have increased in each of the last 5 years and each share paid necessary in today’s world. an annualized dividend of $1.74 in 2013. In February 2014, we further increased our annualized dividend by 5% to $1.83. CATEGORY-LEADING MEDIA ASSETS Unique and complementary collection of leading Canadian broadcast radio and television, specialty TV, sports media and entertainment, publishing and digital media assets.

30 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 31 S MEDIA TREND Consumer demand for digital media, mobile devices and on- demand content is pushing advertisers to shift some of their spending to digital platforms. Traditional media assets in Canada have become increasingly controlled by a small number of competitors with significant scale and financial resources, while technology has allowed new entrants and even individuals to become media players in their own right. Across both traditional and emerging platforms, many players have become more vertically integrated, as both providers and purchasers of content. Access to premium content has become even more important for acquiring audiences that attract advertisers and subscribers. Ownership of content or long- term agreements with content owners, have also become increasingly important to Media companies. ROGERS COMMUNICATIONS INC. S TREND S OLUTION 2013 ANNUAL REPORT SS S INE S BU Companies are using fibre-based access and cloud computing to capture and share information in more volume and detail. This, combined with the rise of multimedia and Internet-based applications, is driving exponential growth in data demand. Large enterprises and all levelsgovernment of are dramatically transforming data centre infrastructure and moving toward virtual data storage and hosting. This is driving demand foradvanced more network functionality, robust, scalable services and supportive dynamic network infrastructure. In response, carriers are dismantling legacy networks and investing in next generation platforms that converge voice, data and video solutions ontosingle a distribution and access platform. REGULATION Most areas of our businesscompete are with, highly the regulated, programming which weour affects can networks, who offer, we where how andpurchase. how we The we telecommunications use build industryregulation our and is more businesses being reviews of affected and the by current the regulations. more spectrum we ECONOMIC CONDITIONS Our businessesconsumer are confidence affected and spending,where by advertising especially revenue in general is directly our affected economic Media by the segment, conditions economy. and In the mediamedia industry, consumption there by continues consumersspend to more which on-line be versus in a traditional turnmedia media. shift In drives competitors addition, towards advertisers there as on-line are to market, more additional including large on-line global companies. media companies enter the S CABLE TREND Younger generations are increasingly using the Internet and social media as a substitutetraditional for wireline telephone services, and televised content is increasingly available online, both on wireline and on wireless devices. We face new competition from companies like Skype and Vonage, who market Voice over Internet Protocol (VoIP) telephony services, and Netflix and Applewho TV, provide televised content over the Internet. North American cable companies are improving their cable networks and expanding their service offerings to include Internet, digital cable and VoIP telephony services, while competition from telco IPTV deployments and non-facilities based service providers continues to cause pricing pressures which negatively impacts revenue growth. of % % S TREND SS WIRELE More sophisticated wireless networks, devices and applications are making it easier and faster to receive data, driving growth in wireless data services. Wireless providers are investing in the next generation of broadband wireless data networks, such as LTE, to support the growing data demand. Wireless market penetration in Canada is approximately 80 COMPETITION Competition in wireless from nationalsmaller and new regional operators entrants as changesThis well how as puts we downward compete pressureimpacts customer for on churn. wireless pricing services. affecting profitTraditional margins wireline and telephone andover television services the arecompetitors, now and Internet, offered changing howchanging opening traditional the mix providers the of compete.affecting packages profit This and margins door is and pricing customer that churn. to service providers offer, more non-traditional CHANGING TECHNOLOGIES AND CONSUMER DEMANDS Consumer demand for mobilecontent across devices, platforms is digital pushing mediaprovide providers to more and build data networks on-demand faster, that can of cheaper smartphones and and more double easily. digitthis Increased growth adoption in year, our data revenuemessaging reflecting continued and other wireless expanded data. use of applications, mobile video, INDUSTRY TRENDS The telecommunications industry in Canada, and our business segments, is affected by several overarching trends. the population, and is expectedgrow to at an estimated 2 annually. The new CRTC code ofhas conduct limited wireless term contracts to two years from three years. Although the code of conductonly has been in place forwe a believe month, this is currently reducing churn and slowing growth in the wireless marketplace. MANAGEMENT’S DISCUSSION AND ANALYSIS

OUR STRATEGY To achieve our vision and drive our future growth, we have six strategic objectives. We made significant progress this year against each of these, across all business segments. See “Key Highlights” for more detail about individual highlights.

1. DELIVER DIFFERENTIATED END-TO-END We launched new products, including Rogers Smart Home Monitoring, CUSTOMER EXPERIENCES to customers in Ontario’s Golden Horseshoe area and . Focus on evolving our cross-device, multi-screen integration to enable We completed several strategic acquisitions this year that strengthened seamless, reliable and easy-to-use product experiences anytime, our offering of cable television, Internet and telephony services in the anyplace and anywhere; on delivering a differentiated range of devices Hamilton, Ontario area, established Business Solutions as a leader in and device-related services; and on enabling greater integration of our Canadian data centre and hosting services and increased the reach of media assets across screens. our television broadcast network to over 80% of Canadian households.

OUR PROGRESS IN 2013 4. STRENGTHEN THE CUSTOMER EXPERIENCE We continued to evolve our wireless offering this year, redesigning and Constantly improve the experience that customers have using our simplifying wireless offerings and pricing tiers, and introducing products and services by making it easier for them, providing the tools Canada’s first wireless Share Everything plan. We also launched a hybrid and resources customers need to use our products with confidence, wireless home and small business phone solution that operates on our being attuned to our customers’ evolving needs and continuing to national wireless network. simplify our product offerings.

Cable unveiled the next generation of TV experience with NextBox 3.0, OUR PROGRESS IN 2013 and Media made significant progress this year, announcing a landmark We launched several new programs this year to improve the customer exclusive 12-year licensing agreement to broadcast national NHL experience, including Canada’s first Share Everything plans for games, launching a subscription digital magazine service, upgrading individuals, families and small businesses, our “worry free” $7.99 per The Shopping Channel, and including adding a mobile app and social day US wireless data roaming plan, a new suite of simplified travel value media. It also launched Sportsnet 360, and announced a 10-year packs of voice, text and data roaming, and the Rogers First Rewards partnership extension with the Vancouver Canucks. loyalty program, and we received regulatory approval for the Rogers credit card. Connected for Success, our new broadband Internet pilot 2. MAINTAIN INDUSTRY-LEADING NETWORKS project is designed to provide affordable broadband Internet, Reinforce our network’s reliability and speed to capture and monetize computers and software to residents of Toronto Community Housing as the growth in data consumption by expanding our LTE network to a part of the Rogers Youth Fund program. wider proportion of the Canadian population, continuing to increase broadband Internet speeds, and further enhancing our TV platforms 5. IMPROVE PRODUCTIVITY AND COST STRUCTURE with next generation features and functionality. Continue to focus on cost-optimization initiatives and organizational efficiency by improving service delivery, reducing complexity, focusing OUR PROGRESS IN 2013 on fewer projects with more impact, managing expenses and working We continued to expand our high speed wireless LTE broadband more closely with key suppliers. network this year, and offered the largest selection of LTE devices of any carrier in Canada. Our LTE 4G network was the first in Canada, OUR PROGRESS IN 2013 which covered approximately 73% of the Canadian population at We continued to make progress on our cost efficiency initiatives this December 31, 2013. year, which contributed to a 3% increase in consolidated adjusted operating profit and a 6 basis point increase in our consolidated We were also recognized for our networks: PCMag.com named us adjusted operating profit margin to 39.3%, driven mostly by Wireless Canada’s fastest broadband Internet service provider and wireless and Cable. network in October 2013, and SamKnows stated through in-home testing in May 2013, that we delivered, on average, 100% or more of 6. DRIVE FUTURE GROWTH OPPORTUNITIES our advertised download speeds on our most popular Internet Continue to develop targeted new growth areas of our business, packages, better than most providers they tested in the US and Europe. including machine-to-machine (M2M) communications, mobile commerce and video, business communications services, local and 3. EXPAND OUR SERVICES REACH digital media services, home automation and sports. Expand the reach of our networks and services through new OUR PROGRESS IN 2013 construction and targeted acquisitions that complement our existing We made strides in the M2M market this year, demonstrating a single, platforms; by more widely deploying products and services; and by worldwide SIM card with our M2M global alliance partners that will expanding the reach of our key media brands nationally and across our strengthen our M2M offering to multinational customers, and digital platforms. announcing an M2M agreement with Sprint to bring a comprehensive OUR PROGRESS IN 2013 in-car infotainment solution to the Canadian market. We also certified We expanded our wireless network by establishing key network sharing the Suretap wallet, our mobile payment service, for the Android and agreements to bring LTE to more customers at faster speeds to BlackBerry 10 operating smartphone systems. We received a licence to customers in Manitoba, and the Ottawa region, and through operate a bank for the purposes of launching a Rogers’ branded credit our relationship with AT&T to become the first Canadian carrier to offer card. In addition, we expanded our Rogers Smart Home Monitoring LTE roaming for customers travelling to the US. We also secured an footprint, and launched other initiatives such as Outrank, an online site option to buy Shaw’s Advanced Wireless Service (AWS) spectrum for marketing and advertising small business, introduced Rogers Alerts holdings. and other digital opportunities.

32 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 33 2014 uidance G 2,2401,548 2,275 to 2,375 1,425 to 1,500 2013 Actual $4,993 $5,000 to $5,150 2 ROGERS COMMUNICATIONS INC. 1 1 uidance uidance G G 2013 ANNUAL REPORT Additions to property, plant and equipment Adjusted operating profit After-tax free cash flow Adjusted operating profit andshould after-tax not free be cash considered flownot as defined are a terms substitute Non-GAAP under or measuresreliable IFRS, alternative and and for way do GAAP to not measures.information have They compare about standard are these meanings, us measures, including so to howIncludes may we additions not other calculate to be them. property, companies. a plantMedia, See and equipment Business “Non-GAAP expenditures for Measures” Solutions,spectrum Wireless, licences, Cable, for and such as, Corporateplanned but national not segments auction limited in to, the and first the half cost excludes of for 2014. 700MHz purchases spectrum of from a 1 2 Our 2014 full year consolidatedassumptions, guidance are based certain on a ofearnings number release of which issued key on February we 12, 2014. disclosed in our fourth quarter 2014 FULL YEAR CONSOLIDATED GUIDANCE The following tableselected full outlines year 2014 guidance financialset metrics, on ranges forth a consolidated and on basiscurrent that February assumptions we outlook 12, for and 2014,number our which of actual assumptions. takes results Information intoassumptions about for underlying our consideration 2013 our guidance and guidance our including isread are the forward-looking in based and should on conjunction be “Risks a with and “About Forward-Looking Uncertaintiesdisclosure Information” and Affecting and information Ourregulatory about assumptions, Business” various factors economic, andfuture and competitive financial the risks and and operating that related expect. results may to cause differ from our what actual weFull currently Year 2014 (In millions of dollars) Consolidated ✓ ✓ ✓ + 2013 Actual Achievement 2013 uidance G 650 to 700 496 2,150 to 2,2502,030 to 2,090 2,240 2,044 $4,865 to $5,050 $4,993 + 1 2 1 3 Exceeded uidance G ✓ plant and equipment Adjusted operating profit Pre-tax free cash flow Cash income taxes Additions to property, In the third quarterapproximately of 2013, $500 we million reducedinitiatives. our to guidance for reflect cash the income taxes results to of be a number of tax planning Includes additions to property, plantMedia, and Business equipment Solutions, and expenditures Corporate for segments. Wireless, Cable, Adjusted operating profit andshould not pre-tax be free considered cashnot as defined flow a terms substitute are under or Non-GAAPreliable IFRS, alternative measures and for way do GAAP and to not measures.information have They compare about standard are these meanings, us measures, including so to how may we not other calculate be them. companies. a See “Non-GAAP Measures” for Consolidated 2 3 1 Achieved (In millions of dollars) 2013 ACHIEVEMENTS AGAINST GUIDANCE The followingachievements table for the selected outlines full year guidance 2013 financial metrics. ranges, actual results and FINANCIAL AND OPERATING GUIDANCE We provide consolidated annual guidancethe ranges annual for plans selected approved financial by metrics our on Board a of consolidated Directors. basis consistent with MANAGEMENT’S DISCUSSION AND ANALYSIS

2013 Financial Results Please see “Critical Accounting Estimates” and “New Accounting Standards”, in “Accounting Policies” in this MD&A, and the Notes to our 2013 Audited Consolidated Financial Statements for important accounting policies and estimates as they relate to the following discussion. We use several key performance indicators to measure our performance against our strategies and the results of our peers and competitors. Many of these are not defined terms under IFRS and so should not be considered as alternative measures to net income or any other financial measure of performance under IFRS. See “Key Performance Indicators” and “Non-GAAP Measures” for more information.

SUMMARY OF CONSOLIDATED RESULTS Years ended December 31 (In millions of dollars, except per share amounts) 2013 2012 % Chg Operating revenue Wireless $ 7,270 $ 7,280 – Cable 3,475 3,358 3 Business Solutions 374 351 7 Media 1,704 1,620 5 Corporate items and intercompany eliminations (117) (123) (5)

Operating revenue 12,706 12,486 2

Adjusted operating profit Wireless 3,157 3,063 3 Cable 1,718 1,605 7 Business Solutions 106 89 19 Media 161 190 (15) Corporate items and intercompany eliminations (149) (113) 32

Adjusted operating profit 1 $ 4,993 $ 4,834 3

Adjusted operating profit margin 39.3% 38.7%

Operating income 2 2,926 2,766 6

Net income from continuing operations 1,669 1,725 (3) Diluted earnings per share – continuing operations 3.22 3.30 (2)

Net income 1,669 1,693 (1) Diluted earnings per share 3.22 3.24 (1)

Adjusted net income 1 1,769 1,781 (1) Adjusted diluted earnings per share 1 3.42 3.41 –

Additions to property, plant and equipment $ 2,240 $ 2,142 5

Pre-tax free cash flow 1 2,044 2,029 1 After-tax free cash flow 1 1,548 1,649 (6) Cash provided by operating activities 3,990 3,421 17

1 Adjusted operating profit, adjusted net income, adjusted diluted earnings per share, pre-tax free cash flow and after-tax free cash flow are non-GAAP measures and should not be considered as a substitute or alternative 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 As defined. See “Additional GAAP Measures”.

34 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 35 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT year, Business Solutions announcedcolocation it business is in expanding Westerndata Canada its centre in through hosting Edmonton a and centre and newly in . a expanded new flagship data enterprises designed toWAN complement connectivity our services. fibre-baseddata Merging network, Internet voice SIP Trunking services and solutionsas with dynamically allocate needed a bandwidth business tocapacity requirements support during peak voice hoursfor and and/or also provide data next a needs platform applications and generation services. depending upon IP-based video, mobile and productivity games beginning withagreement grants Rogers the the exclusive 2014-2015and distribution in-progress of season regular all season national was andmultiple live playoff signed. games languages, within The Canada,agreements across to in sublicense all certain ofSports platforms. these and broadcasting CBC. We rights to executed TVA separate theScore assets. The acquisition ofapproval in theScore the received first final half regulatory of this year. Vancouver Canucks through the 2022-2023a NHL seasons, 14-year continuing network traditionCanucks as hockey. the The regional new television agreementof broadcaster features a of comprehensive multimedia suite delivering rights up to including 60season. regular Sportsnet season television, Vancouver isrights Canucks online also games holder the each and for officialEdmonton Oilers. regional the mobile, television Toronto broadcast Maple Leafs,digital Calgary magazine service Flames thatunlimited provides and access consumers to a with catalogue exclusiveand of and more US than titles 100 was premium launched.leading Canadian Next publishing Issue Canada brands delivers alongsidemagazine access titles. many to our of the most popular US engaging multi-channel retail experienceonline and a look, refreshed an on-airand and all-new improved mobile shipping. app,Canadian The special-themed multi-channel leading programming interactiveengagement, retailer and also new onlyappearances. national added leading on-air brands social media andextension with more MLB Properties celebritylive and and in-progress MLB guest regular Advancedhighlights season within Media Canada. and to playoff show baseball games and programs based on whatto customers are explore viewing, and helpingindividual Canadians uncover tastes. more programming that appeals to their BUSINESS SOLUTIONS • Following the acquisition of Blackiron and Pivot Data Centres this • SIP Trunking, a new IP-based voice solution, was announced for MEDIA • Exclusive NHL 12-year licensing agreement to broadcast national NHL • Sportsnet 360 was launched, which is comprised of the• rebranded Sportsnet announced a 10-year partnership extension with the • Next Issue Canada, an innovative, all-you-can-read subscription • The Shopping Channel launched a brighter, easier, and more • Sportsnet announced an eight-year multi-platform broadcast rights of % or more of our advertised download speeds on our % most popular Internet packages, betterand than Europe most that providers were in tested. the US was launched on Rogers digitalnetwork television, marking is the firstprogramming time features available this live games,top in news, analysts. highlights, and Canada. the game’s MLBRecommendations Network’s App year-round forpersonalized NextBox, live, givingprogram rental, customers recommendations access on-demandCanadian displayed to cable and industry on first, previously their the recorded application TV recommends similar screens. A system in Hamilton, Ontario was completed. viewers access to recordstore up up to to eight 240 HDincludes hours programs Whole of at Home one HDexperience time content. PVR and allowing The capability NextBox viewers andvirtual 3.0 to remote, becomes experience set navigate PVR a recordingstablet their and wireless or live smartphone cable stream TV while channels at guide, all home from or use a away. a provider and the fastest wirelessby network PCMag.com, in a Canada leading in US October based 2013 technology website. stated through in-home testingaverage, in 100 May 2013 that we delivered, on continued its expansion. Our network covered approximately 73 the Canadian population at Decemberoffer 31, the 2013, largest while selection continuing ofwere to LTE also devices the of first any carrier carrierworld in in to Canada. North offer We America international and LTE one roaming of to the wireless customers. first incomplexity the and serviceadding times for customer our value.complete sales These and wireless support Share innovationsfamilies teams Everything include and and plan Canada’s whichnationwide small first talk allows and businesses individuals, textdevices. and to calling share features across 1 wireless to 10 data, wireless launched, unlimited with twice thedaily daily by data consumers capacity fortext (50 wireless and data MB) Internet, roaming as typically value well packages. used as enhanced voice, launched, that operates on ouris national wireless available network. The in service regionstraditional outside home Rogers’ or cableneed office for territories phone a and landline service or offers Internet and a connection. features withoutinternational the mobile operatorssingle global including SIM Rogers,devices card in demonstrated which multiple countries makes a andour expected it machine-to-machine to easier business. drive further to growth for deploy connected • MLB Network, a 24-hour network dedicated exclusively to baseball • Our TV experience was significantly enriched with the launch of our • Acquisition of Mountain Cable, ’ (Shaw)• cable Next generation TV experience was unveiled with NextBox 3.0 giving • Rogers was named both the fastest• broadband SamKnows, Internet an service independent broadband performance company, CABLE KEY HIGHLIGHTS WIRELESS • Canada’s first and fastest wireless LTE 4G broadband network • Our wireless offerings and pricing tiers were simplified, reducing • Our “worry free” $7.99 per day US wireless data roaming plan was • A hybrid wireless home and small business phone solution was • The M2M World Alliance, an organization comprised of eight leading MANAGEMENT’S DISCUSSION AND ANALYSIS

KEY CHANGES IN FINANCIAL RESULTS THIS YEAR COMPARED TO 2012

(In millions of dollars) Change see page Operating Revenue Operating revenue changes – higher (lower): Wireless network revenue was higher than last year because of higher Network revenue – Wireless $ 29 39 adoption and usage of wireless data services, partially offset by the Equipment sales – Wireless (39) 39 introduction of lower priced roaming plans and pricing changes made Cable 117 42 over this year. Business Solutions 23 45 Media 84 48 Cable operating revenue was higher than last year mainly because of Corporate items and intercompany eliminations 6 growth in Internet and phone revenues and the acquisition of Mountain Higher operating revenue compared to 2012 220 Cable, partially offset by a decline in television revenue related Adjusted operating profit changes – higher (lower): principally from competitive TV subscriber losses. Wireless 94 39 Business Solutions operating revenue was higher than last year mainly Cable 113 42 because we completed the acquisitions of Blackiron Data and Pivot Business Solutions 17 45 Media (29) 48 Data Centres earlier this year combined with the continued growth in Corporate items and intercompany eliminations (36) on-net and next generation services, partially offset by planned decline

Higher adjusted operating profit 1 compared to in legacy voice and data services. 2012 159 Media operating revenue was higher than last year mainly because of Higher stock-based compensation expense (7) 51 revenue growth at Sportsnet, higher attendance at Toronto Blue Jays Lower restructuring, acquisition and other expenses 7 51 games and higher sales at The Shopping Channel. Higher depreciation and amortization (79) 51 Impairment recognized in 2012 80 51 Adjusted Operating Profit Higher operating income 2 compared to 2012 160 Wireless adjusted operating profit was higher this year because of Higher finance costs (71) 52 higher network revenue, our continued cost management and Gain on sale of interest in TVtropolis 47 52 Gain on Inukshuk spectrum distribution in 2012 (233) 52 productivity initiatives implemented across various areas and lower cost Other 17 53 of equipment. Lower income taxes 24 52 Cable adjusted operating profit was higher than last year because of Decrease in net income from continuing the continued growth in revenue combined with a shift in our product operations compared to 2012 (56) Loss from discontinued operations in 2012 32 52 mix towards higher margin Internet and phone products. Decrease in net income compared to 2012 (24) Media’s adjusted operating profit was lower compared to last year. The increase in operating revenue this year was more than offset by the 1 Adjusted operating profit is a Non-GAAP measure and should not be considered as a substitute or alternative for GAAP measure. It is not a defined term under IFRS, combined impact of higher player salaries at the Toronto Blue Jays, the and does not have a standard meaning, so may not be a reliable way to compare NHL player lockout in 2012 and the costs associated with broadcasting us to other companies. See “Non-GAAP Measures” for information about these more NHL hockey games in 2013 because of the condensed 2012-2013 measures, including how we calculate them. 2 As defined. See “Additional GAAP Measures”. season which started in January 2013 and the compressed 2013-2014 season schedule associated with the upcoming winter Olympics. Adjusted operating profit relating to Corporate items and intercompany eliminations was lower compared to last year because of continued investment in growth initiatives such as Rogers’ credit card, Outrank, Rogers Alerts and other digital opportunities.

Operating Income and Net Income Operating income was higher than last year while net income was lower. The increase in operating income is mainly because of the increase in adjusted operating profit. Net income was lower mainly because in 2012 we realized a $233 million gain on spectrum licenses that Inukshuk sold to our non-related venture partner as well as the related income tax benefits we recorded that year.

36 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 37 % 6 4 3% E C E 7% C 44% POSTPAID VOI POSTPAID DATA DATA EQUIPMENT PREPAID VOI PREPAID ROGERS COMMUNICATIONS INC. of the Canadian population at December 31, 2013 BILLION 2013 ANNUAL REPORT % $7.3 3 WIRELESS REVENUE MIX 3 WIRELESS 1 20 (%) broad variety ofother M2M, specialized mobile devices commerce, retail point ofthan sale 73 and more than 200 countries operators in Canada. EXTENSIVE WIRELESS NETWORK Rogers has one ofin the Canada: most extensive and• advanced wireless supports networks wireless services on smartphone, tablets, computers and a • the first LTE high-speed network• in voice Canada, and which data reached roaming more • agreements with network international sharing carriers in arrangements withWe are several continuously enhancingour regional our wireless IP services. service wireless our Advances infrastructure customers in for interact technology all andavailable have of how to transformed they them use how inhas the also their variety changed the personal of way tools and businesses operate. that professional are New lives. technologies Technology allow usNumber, to offer which newsubscribers services, on such makes their as computer, Rogersas enhanced tablet, One an or alternative smartphone wireless to andand fixed can line services be features telephony. used Usersintegrated available across enjoy nature the of same the the to Rogers services network network sharing coverage and partners. those area, of our roaming thanks and to the seamless share of the Canadian wireless market. % sites NATIONAL DISTRIBUTION We distribute our wireless products using• various channels independent including: dealer networks • company-owned Rogers, Fido• and Chatr retail customer stores self-serve rogers.com, fido.ca, chatrwireless.com, ecommerce • Rogers call centres• and outbound telemarketing major retail chains and convenience stores. Rogers istechnologies a and Canadian services.high-speed leader We data in communication provide servicesunder innovative wireless to the voice subscribers new Rogers, across and Fidowith wireless Canada the and advanced best Chatr network and latest brands, wireless• and devices and provide mobile applications high our including: speed• customers Internet access wireless voice and• enhanced voice wireless features home phone • device protection • text messaging • e-mail • global voice and• data roaming machine-to-machine solutions • advanced business solutions • Suretap mobile wallet • Rogers AnyPlace TV • Rogers One Number • Rogers First Rewards Loyalty Program. WIRELESS ROGERS IS CANADA’S LARGESTCOMMUNICATIONS WIRELESS SERVICE PROVIDER As at December 31,• 2013, we approximately had: 9.5 million• subscribers approximately 34 PRODUCTS AND SERVICES MANAGEMENT’S DISCUSSION AND ANALYSIS

SIGNIFICANT SPECTRUM POSITION Our wireless services are supported by our significant spectrum holdings in both high-band and low-band spectrum. As part of our network strategy, we expect to continue making significant capital investments in spectrum to: • support the rapidly growing usage of wireless data services • introduce new innovative network-enabled features and functionality.

Our spectrum holdings include: CURRENT SPECTRUM LICENCES Type of spectrum Rogers licence What it supports

850 MHz 25 MHz across Canada GSM and 3. / 4G HSPA+ subscribers

1900 MHz 60 MHz in all areas of Canada except 40 MHz Northern Quebec, 2G GSM and 3.5G / 4G HSPA+ subscribers 50 MHz in and 40 MHz in the Yukon, Northwest Territories and Nunavut.

AWS spectrum 20 MHz across Canada 4G LTE subscribers

2500 MHz 60 MHz (40 MHz FDD plus 20 MHz TDD) in key population centres 4G LTE subscribers across Canada in Eastern Quebec, Southern Quebec, Southern and , . Outside of these areas, Rogers holds 20 MHz of FDD and 10 MHz of TDD spectrum.

700 MHz Unknown at this time. Participating in the 2014 auction 4G LTE subscribers

We also have access to additional spectrum through network sharing agreements: NETWORK SHARING ARRANGEMENTS Type of spectrum Kind of venture What it supports

2.3 GHz/3.5 GHz range Inukshuk is a joint operation in which we hold a 50% interest. Mobile and fixed wireless subscribers Inukshuk’s primary 2.3 GHz spectrum holdings are licences (20 MHz) in Eastern Canada, including the key population centres in Southern and Eastern Ontario and Southern Quebec, and other holdings across the country. Inukshuk also holds 3.5 GHz (between 50-175 MHz) in most of the major population centres across Canada. The arrangement initially included 2500 MHz spectrum. This spectrum was distributed equally to the partners late in 2012. The mobile and fixed new LTE national network that is being constructed utilizes the jointly held 2.3 GHz and 3.5 GHz spectrum bands.

850 MHz, 1900 MHz AWS spectrum Three network-sharing arrangements to enhance coverage and network capabilities: • with Manitoba Telecom Services, that covers 96 percent of the 3.5G / 4G HSPA+, 4G LTE subscribers population across Manitoba • with , that covers our combined base of customers in 3.5G / 4G HSPA+ subscribers North Western Ontario • with Quebecor (Videotron) to develop LTE network across the 4G LTE subscribers province of Quebec.

We have certain arrangements to buy additional spectrum, subject to regulatory approvals: Type of spectrum Transaction Who it will support

AWS spectrum Acquired an option to buy Shaw’s AWS spectrum holdings in 2014. 4G LTE subscribers Not yet exercised and will require regulatory approvals.

AWS spectrum Part of a larger strategic transaction with Videotron, which could 4G LTE subscribers lead to the acquisition of Videotron’s Toronto AWS spectrum. If a transaction does occur, it will require regulatory approvals.

38 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 39 (0.13)pts (0.05)pts 8,074 7,846 7,574 $67.76 $69.30 $70.26 1.24% 1.29% 1.32% % % 627 (102) 268 (40) 1,429 1,591 1,761 (170) 8 2012 Chg 1,591 (162) 1,4577,846 (48) 228 3.98 1.29 $ 15.84 $$ 59.79 (0.20) $ (0.21) $ 69.30 $ (1.54) Years ended December 31 % % 525 228 (162) 2013 1,429 1,409 8,074 3.85 1.24 $ 15.64 $ 67.76 1, 2 ROGERS COMMUNICATIONS INC. . ” Postpaid 2013 ANNUAL REPORT (ARPU) Prepaid ARPU Total prepaid subscribers Monthly churn Monthly average revenue per user Gross additions Net losses Gross additions Net additions Total postpaid subscribers Monthly churn WIRELESS POSTPAID MONTHLY ARPU ($) 2013 2012 2011 WIRELESS POSTPAID MONTHLY CHURN (%) 2013 2012 2011 WIRELESS POSTPAID AND PREPAID SUBSCRIBERS THOUSANDS) (IN 2013 2012 2011 Does not include subscribers from ourARPU, wireless subscriber home phone counts product. “Key and Performance subscriber Indicators churn are key performance indicators. See Blended ARPU $ 59.58 Operating Revenue Our operating revenue dependsaverage on revenue the per size user of and our revenue from subscriber equipment base,Higher sales. the Network Revenue Network revenue includes revenue derivedfrom from postpaid voice monthly and fees, data airtime,optional services data service usage, long charges, distance inbound charges, certain and outbound fees, roaming as chargesancillary and charges well such as as long distance. prepaid usage for airtime, data and other WIRELESS SUBSCRIBER RESULTS (Subscriber statistics in thousands, except ARPU and churn) 1 2 Prepaid Postpaid Chg % % % 561 (7) $6,748 $6,719 $6,601 41 2012 7,280 – (2,632)(4,217) (2) (2) (1,585) (3) 45.6 $ 2,722 17 $ 1,123 (23) $ 3,063 3 $ 6,719 – % % 522 Years ended December 31 47 2013 (2,578) (4,113) (1,535) 46.8 $ 3,175 $ 865 $ 6,748 1 of network revenue % of network revenue Other operating expenses Equipment sales Network revenue Cost of equipment 2012 2011 (IN MILLIONS OF DOLLARS) (IN 2013 WIRELESS NETWORK REVENUE LTE network cateringand to speed it customers provides. seeking Weall compete the with of Bell, increased whom capacity MTSgrow operate and over , LTE time as networks LTEWe and becomes also the we prevailing compete technology expect with insuch competition these Canada. providers to as and Wind otherproviders regional Mobile, providers that on“hotspots”. use HSPA alternative and wireless GSM technologies, networksTelus. and like We with alsoplayers Wi-Fi and resellers. complete with newer entrants,dealers and various prime locations regional retail for distribution our shelf own space stores outlets. as well as third party across networkslandscape, has and dramatically weConsolidation among transformed expect new entrants this oralter the the with to competitive incumbent landscape competitive carriers for continue could Wireless regionally and or nationally. evenspectrum. intensify. Industry Canadaadditional has 2500 also MHzrestricted announced from spectrum participating an inalready in auction hold 2015 the for more inoutcomes of geographic both than which of these areas 40 we auctions may where MHz increase may competition. we of be 2500 MHz spectrum. The % Includes the cost of equipment sales and direct channel subsidies. Data revenue as Data revenue included in network revenue Adjusted operating profit – WirelessAdjusted operating profit margin as Additions to property, plant and $ equipment 3,157 Operating revenue Operating revenue – WirelessOperating expenses 7,270 1 (In millions of dollars, except percentages) WIRELESS FINANCIAL RESULTS COMPETITION We compete on quality ofsophistication service, of scope wireless of technology, services,of network breadth devices, coverage, of branding and distribution, positioning, selection and price. • Wireless technology: we were the first carrier in Canada to launch an • Product, branding and pricing: we compete nationally with Bell and • Distribution: we compete with other service• providers Wireless networks for and handset both devices: the parity of wireless devices • Spectrum: we are currently participating in an auction for 700 MHz MANAGEMENT’S DISCUSSION AND ANALYSIS

Network revenue was higher this year compared to last year. This was WIRELESS DATA REVENUE the net effect of: (IN MILLIONS OF DOLLARS) • higher data revenue related to an increase in subscriber levels and 2013 $3,175 higher usage of wireless data services • partially offset by our introduction of new lower priced US and 2012 $2,722 international roaming plans and rates which offer consumers more value, and 2011 $2,325 • the continued adoption of customer friendly simplified plans, which often bundle in certain features like voicemail, caller ID and long distance that we have charged for separately in the past. DATA REVENUE PERCENT OF BLENDED ARPU (%) Excluding the decline in US and international roaming revenue this year, network revenue would have increased 1%. 2013 47%

Data revenue was 17% higher this year mainly because of the 2012 41% continued penetration and growing use of smartphones, tablet devices and wireless laptops, which increased the use of e-mail, wireless, 2011 35% Internet access, text messaging and other wireless data services. Data revenue represented approximately 47% of total network revenue this year, compared to approximately 41% last year. Lower Equipment Sales Equipment sales (net of subsidies) include revenue from sales to: Postpaid churn was 1.24% this year, compared to 1.29% in 2012. The • independent dealers, agents and retailers lower churn rate is partly attributable to the new simplified plans and • directly to subscribers through fulfillment by Wireless’ customer the roaming plans we introduced. service groups, websites, telesales and corporate stores. Gross postpaid subscriber additions were 1.4 million this year, or 3% Revenue from equipment sales was lower this year, mainly because lower than last year, which reduced net postpaid subscriber additions to fewer existing subscribers upgraded their devices and there were fewer 228,000, despite a lower postpaid churn. We believe the industry gross activations. transition from three year to two year plans resulting from the recent Lower Operating Expenses adoption of the Canadian Radio-television and Telecommunications We assess operating expenses in two categories: Commission (CRTC) Wireless Code may have slowed our overall • the cost of wireless handsets and equipment wireless subscriber growth from the second half of the year. See • all other expenses involved in day-to-day operations, to service “Regulation in Our Industry” for more information on the Wireless existing subscriber relationships and attract new subscribers. Code. The cost of equipment was $50 million lower than last year, or 3%, We activated and upgraded approximately 2.7 million smartphones this mainly because fewer existing subscribers upgraded hardware and year, compared to approximately 2.9 million in 2012. Approximately fewer new customers were added during the year as discussed above. 34% of these were for new subscribers. The decrease was mainly We activated and upgraded fewer devices compared to 2012. because there was a 10% reduction in hardware upgrades by existing subscribers during the year, which we also believe is at least partly due Total customer retention spending (including subsidies on handset to the move from three to two year contracts and the associated pricing upgrades) was $939 million, 0.3% lower than last year. The reduction changes. was mainly because fewer existing subscribers upgraded their hardware as discussed above, which we partially attribute to the recent shift to The percentage of subscribers with smartphones increased to 75% of two year contracts. our overall postpaid subscriber base, compared to 69% at the end of Other operating expenses (excluding retention spending), were down 2012. Smartphone subscribers typically generate significantly higher slightly from 2012, due to a continued focus on cost productivity ARPU and are less likely to churn. initiatives we are implementing across various functions.

Higher Adjusted Operating Profit SMARTPHONES AS A PERCENTAGE OF POSTPAID SUBSCRIBERS (%) Adjusted operating profit was 3% higher this year compared to last year because of continued growth of wireless data, our improvements 2013 75% in cost management and efficiency and lower volumes of hardware sales and upgrades. Adjusted operating profit margin as a percentage 2012 69% of network revenue increased this year to 46.8% from 45.6% in 2012.

2011 56% WIRELESS ADJUSTED OPERATING PROFIT (IN MILLIONS OF DOLLARS) The decrease in prepaid subscriber net additions was mainly because of 2013 $3,157 increasing competition at the lower end of the wireless market where prepaid products are mainly sold. 2012 $3,063 Blended ARPU was down slightly this year compared to last year because the voice component declined at a faster rate than the data component 2011 $3,036 increased.

40 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 41 52% 33% 5% 1 TELEVISION TELEVISION INTERNET PHONE ROGERS COMMUNICATIONS INC. 3 BILLION 2013 ANNUAL REPORT $.5 3 CABLE SERVICE REVENUE MIX 3 CABLE SERVICE 1 20 (%) homes in each node video protocols technology like switched digital video specifications (DOCSIS 3.0),250 Mbps, setting which the foundation now for even higher offers speeds speedsmore homes directly of to fibre. up to The networkinterconnected at is acable central node. and sub-divided The inbroadband node into services turn is reached are fromcoaxial by cable. smaller delivered the fibre using optic node clusters 860We to MHz continually the of of upgrade home,performance spectrum the homes video, over and network voiceexample, to we introduce and invest improve in: new• capacity, enhance further features segmenting and our network functionality.• nodes For improving to video reduce signal the compression number by• of moving improving to channel more and advanced on-demand• capacity increasing by Internet introducing speed new with data over• cable increasing the service fibre interface to the home (FTTH)In footprint 2012, by connecting wesignals to over began our analog transitioning broadcastup channels customers to significant all-digital still services, freeing services. cable receiving The network television analogstrengthen capacity to the digital customer for experience2015), subscriber additional will and, migration allow once features us will completeand to and continue reclaim (expected reduce significant in network to amounts operatingfrom of analog and network to capacity maintenance digital costs.fitting requires The analog additional migration spending homesanalog because filtering it with equipment. involves digital convertersBroadband Internet and service removing iswhich provided existing using combines thecustomer DOCSIS multiple premise, 3.0 delivering standard RF exceptionalof performance. channels our The bandwidth onto internet10 one service years as offerings accessavailable. we has into bring This increaseddemonstrating the new the 50 track capability technology to fold to deploykey record best in strategies market in to class the ensure of when service wethat is stay last it one competitive investing provide of with becomes other our service internetfacilities. in providers service our into homes networks and and business over copper of % and specialty service subscriptionvideo fees, on demand pay service per fees view service fees and (or tier) service feesthird parties and access fees for use of channel capacity by smartphones, tablets and personal computers. Canadian cable television subscribers Ontario, New Brunswick and Newfoundland. EXTENSIVE NETWORK Rogers hasinfrastructure an that provides expansive consumers,Ontario, businesses fibre and governments New and in communications hybrid Brunswick services, including fibreand and data video, networking. coaxial broadband Newfoundland network Internet,The with voice network is structured a toallow optimize performance for and range the reliability simultaneous andsingle to delivery of platform. of video, Itwith voice is distribution and hubs, generally Internet minimizing over constructed disruptionscuts a that and in other can events. rings result from that fibre interconnect DISTRIBUTION We distribute our cable products• using various channels company-owned including: Rogers retail• stores customer self-serve rogers.com,• ecommerce sites Rogers call centres,• outbound telemarketing, major door-to-door retail agents chains • an extensive network of third party retail locations. Cable Television generates service revenue• from three areas: digital cable – includes digital channel service fees, including premium • analog cable – includes basic cable service fees plus• extended basic rental of digital cable set-top terminals. Internet revenueservice includes revenues from monthly residential, smallaccess subscription subscribers business and and and modem wholesale rental Internet fees. additionalCable use Telephony revenue includesbusiness revenues local from telephony residential service,call and calling waiting, small and features long-distance. such as voicemail and Our advanced digital two-wayleading and hybrid innovative fibre-coaxial selection network ofhigh-speed digital provides broadband television Internet a access, and and online• cable viewing, telephony services: programming includes high-definition• television (HDTV) on-demand, including movies,• television series personal and video events recorders• (PVRs) and time-shifted Whole programming Home PVR • digital specialty, multicultural• and sports Rogers programming Anyplace TV and Anyplace TV Home Edition for viewing on • 2.0 million high-speed Internet• subscribers 1.2 million telephony subscribers • a network that passes approximately 4 million homes in PRODUCTS AND SERVICES CABLE ONE OF CANADA’S LARGESTTELEVISION, PROVIDERS HIGH-SPEED OF INTERNET CABLE AND PHONE SERVICES • 2.1 million television subscribers – approximately 31.4 MANAGEMENT’S DISCUSSION AND ANALYSIS

Voice-over-cable telephony services are provided over a dedicated CABLE FINANCIAL RESULTS DOCSIS network. Our offerings ensure a high quality of service by Years ended December 31 including network redundancy as well as network and customer (In millions of dollars, except percentages) 20131 2012 % Chg premise backup powering. Our cable telephony service includes a rich Operating revenue set of features, such as TV Call Display, three-way calling and Home & Television $ 1,809 $ 1,868 (3) Away™ voicemail that allows customers to be notified of and listen to Internet 1,159 998 16 their voicemail over MMS or the Web. In addition, we offer a wireless Phone 498 477 4 alternative to a fixed-line service. Service revenue 3,466 3,343 4 COMPETITION Equipment sales 9 15 (40) Cable television competes: Operating revenue – Cable 3,475 3,358 3 • increasingly with alternative, Canadian multi-channel Broadcasting Operating expenses Distribution Undertakings (BDUs), including Bell TV, , Cost of equipment (6) (20) (70) satellite TV services, and Internet Protocol television Other operating expenses (1,751) (1,733) 1 • with over-the-air local and regional broadcast television signals received directly through antennas, and the illegal reception of (1,757) (1,753) – US direct broadcast satellite services Adjusted operating profit – Cable $ 1,718 $ 1,605 7 • with television shows and movies streaming over the Internet Adjusted operating profit margin 49.4% 47.8% through providers like Netflix and Apple TV. Additions to property, plant and Cable Internet competes with other ISPs that offer residential and equipment 1,105 832 33 commercial dial-up and high-speed Internet access services. Rogers 1 Results of operations include Mountain Cable’s operating results as of May 1, 2013 Hi-Speed Internet services compete directly with: (the date of acquisition). • Bell’s DSL Internet service in Ontario • ’s DSL/fibre and FTTH Internet services in New Brunswick CABLE SUBSCRIBER RESULTS 1 and Newfoundland Years ended December 31 • various resellers using wholesale telco DSL and cable Third Party (Subscriber statistics in thousands) 2013 2012 Chg Internet Access (TPIA) services in local markets. Cable homes passed 3,978 3,810 168 Television Cable telephony competes with: Net losses (127) (83) (44) • Bell’s wireline phone service in Ontario Total television subscribers 2 2,127 2,214 (87) • Bell Aliant’s wireline phone service in New Brunswick and Internet Newfoundland and Labrador Net additions 63 73 (10) • ILEC local loop resellers (such as Primus) as well as VoIP service Total Internet subscribers 2 1,961 1,864 97 providers (such as Vonage and Skype) riding over the Internet access Phone services of ISPs Net additions 42 23 19 • Wireless home phone products. Total phone subscribers 2 1,153 1,074 79 Total service units 2,3 ACQUISITION Net additions (losses) (22) 13 (35) In January 2013, we announced a multi-part strategic transaction with Total service units 5,241 5,152 89 Shaw to acquire Mountain Cable (Shaw’s cable system in Hamilton, 1 Ontario), and to secure an option to purchase Shaw’s Advanced Subscriber count is a key performance indicator. See “Key Performance Indicators”. 2 On May 1, 2013, we acquired 40,000 television subscribers, 38,000 digital cable Wireless Services spectrum holdings in 2014. As part of the agreement, households, 34,000 cable high-speed Internet subscribers and 37,000 cable telephony we sold our one-third equity interest in the TVtropolis specialty TV lines from our acquisition of Mountain Cable. These subscribers are not included in channel to Shaw. Mountain Cable provides cable television, Internet net additions, but do appear in the ending total balance for December 31, 2013. The and telephony services to an area covering approximately 59,000 acquisition also increased homes passed by 59,000. 3 Includes television, Internet and phone subscribers. homes in and around Hamilton, Ontario. On May 1, 2013, we closed on a portion of the multi-part agreement with Shaw to buy 100% of Mountain Cable, and paid $398 million, according to the terms of the CABLE SUBSCRIBER BREAKDOWN (IN THOUSANDS) agreement. 2013 1,153 1,961 2,127

2012 1,074 1,864 2,214

2011 1,052 1,793 2,297

PhoneInternet Television

42 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 43 9 8 61 8 64 8 ,9 ,7 1 1, 1,793 1 1,76 1,777 for 2012 (IN THOUSANDS) (IN (IN THOUSANDS) % 4% of our total television 8 80% % 77% in 2013, compared to last year, the ROGERS COMMUNICATIONS INC. 49% % 49% at the end of 2012. We believe that the 48% % 2013 ANNUAL REPORT of the homes passed by our cable network; or the same as of our television subscribers, compared to 84 3 3 % % 1 1 20 2012 2011 DIGITAL HOUSEHOLDS AND DIGITAL PENETRATION OF TELEVISION CUSTOMERS % 20 2012 2011 INTERNET SUBSCRIBERS AND INTERNET PENETRATION OF HOMES PASSED % 2012. subscribers, compared to 80 larger selection ofequipment digital combined content, video withinitiative on-demand, the continues HDTV ongoing to and analog contributedigital PVR subscriber to to base digital the as a increasingbase. conversion percentage penetration of of our total the television subscriber Higher Internet and Subscribers Internet revenue increased by 16 result of a larger Internetend subscriber speed base, and general usage movementincrease tiers to and was higher changes in alsoprograms. Internet affected service pricing. by The theOur timing Internet customer and base isInternet approximately mix penetration 2.0 represents: million of subscribers, and promotional •92 •49 The digital cable subscriber base represents 84 $1,809 $1,868 $1,878 $3,475 $3,358 $3,309 $1,159 $998 $926 $498 $477 $478 lower this year, compared to 2012, this year compared to last year, the net % % Television Internet Phone 2011 2012 2013 CABLE SERVICE REVENUE BREAKDOWN MILLIONS OF DOLLARS) (IN 2012 2011 (IN MILLIONS OF DOLLARS) (IN 2013 CABLE TOTAL REVENUE with heightened pay TV competition from IPTV offerings of Mountain Cable. result of: • continued growth in• subscribers for our the Internet May and 2013• phone acquisition products of partially Mountain Cable offset by television subscriber losses. Lower Television Revenue Revenue from television wasthe net 3 result of: • the year-over-year decline• in television the subscribers impact of promotional and• retention pricing partially offset activity by associated pricing increases during the year and theWe acquisition continue toinitiatives to offer transition portions competitive of the strategic subscriber base to bundling term contracts. and retention Higher Operating Revenue Overall Cable revenue grew 3 MANAGEMENT’S DISCUSSION AND ANALYSIS

Higher Cable Telephony Revenue and Growing Subscriber Base • the cost of programming Phone revenue was 4% higher in 2013, compared to last year, the net • all other expenses involved in day-to-day operations, to service result of: existing subscriber relationships and attract new subscribers. • higher phone subscriber base Overall operating expenses increased slightly this year compared to last • partially offset by higher promotional pricing activity. year mainly due to: Phone subscribers grew 7% in 2013, compared to last year and represent: • operating expenses generated by Mountain Cable which we acquired •54% of our television subscribers, compared to 49% last year earlier this year •29% of the homes passed by our cable network, compared to 28% • higher investments in customer care and network last year. • partially offset by savings from improvements in our cost structure and productivity and lower subscriber additions. Lower Equipment Sales Equipment sales include revenues generated from the sale of digital Higher Adjusted Operating Profit cable set-top terminals and Internet modems. Adjusted operating profit was 7% higher this year mainly the net result Lower equipment revenue this year compared to 2012 reflects the of higher service revenue, partially offset by higher operating expenses. reduction of cable boxes sales versus rentals. The increase in the adjusted operating profit margin reflects a continued shift in product mix to the higher margin Internet and phone Discontinued Operations products combined with efficiency gains. This increased our adjusted In 2012, we closed our Video store operations, which offered DVD and operating profit margin to 49.4%, compared to 47.8% in 2012. video game rentals of equipment and sales in many of our corporate- Excluding the results of Mountain Cable which we acquired in the owned retail locations. The results of the Video business were treated as second quarter of 2013: discontinued operations for accounting and reporting purposes. See • revenue would have been 2% higher this year compared to last year, “Review of Consolidated Performance”. instead of 3% higher as reported • adjusted operating profit would have been 5% higher this year Higher Operating Expenses compared to last year, instead of 7% higher as reported. We assess Cable operating expenses in three categories: • the cost of equipment sales (cable digital set-top box and Internet modem equipment)

CABLE TELEPHONY SUBSCRIBERS AND CABLE TELEPHONY CABLE ADJUSTED OPERATING PROFIT PENETRATION OF HOMES PASSED % (IN THOUSANDS) AND CABLE ADJUSTED PROFIT MARGIN % (IN MILLIONS OF DOLLARS)

2013 29% 1,153 2013 49.4% $1,718

2012 28% 1,074 2012 47.8% $1,605

2011 28% 1,052 2011 46.8% $1,549

44 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 45 Chg 3 8 % 1 $2 $162 $12 59% 6 100 % 183345 (19) 5 351 7 3 (262) 2 2012 49 8 1 25.4 $ $1 $271 $8919 $ 162 31 $6175 % 1 4 1 % Y 12 149 362 C Years ended December 31 (268) 2013 28.3 $ 213 $ 107 NEXT GENERATION NEXT GENERATION LEGA ROGERS COMMUNICATIONS INC. olutions 374 S tion a Next Gener BILLION 2013 ANNUAL REPORT y Legacy Next generation $0.36 ac 3 BUSINESS SOLUTIONS SERVICE REVENUE MIX SERVICE REVENUE 3 BUSINESS SOLUTIONS 3 1 1 Leg Service revenue Equipment sales olutions $ 106 20 (%) 2012 2011 BUSINESS SOLUTIONS SERVICE REVENUE BREAKDOWN DOLLARS) MILLIONS OF (IN 20 $198 million on April 17, 2013 S Results of operations includePivot Data Blackiron’s Centres operating as of results October as 1, 2013 of (the April dates of 17, acquisition). 2013 and Adjusted operating profit – Business Adjusted operating profit margin BUSINESS SOLUTIONS FINANCIAL RESULTS 1 ACQUISITIONS We made two major acquisitionsto this further year that enhance allow itscomputing Business Solutions suite services, of enabling enterprise-levelsingle Canadian data provider businesses centre able to andcritical benefit business to cloud applications. from ensure a • end-to-end Blackiron security and (from reliability of Primus• Telecommunications Pivot Data Centres for Canada $158 million on Inc.) October 1, 2013. for (In millions of dollars, except percentages) Operating revenue Operating revenue – Business Operating expenses Additions to property, plant and equipment over multiservice customerscale access and devices add that services(SIP) such allow and as customers cloud private to solutions networking,business which Internet, requirements blend IP seamlessly voice to grow with their (MPLS) services provideprivate scalable networking and that secureapplications metro enable for and and businesses widecentres interconnect or that area critical points have of business Canada one presence (as or well many as offices, cloud applications) data bridging across and back-up connectivity comprehensive service level agreements. financial institutions amongst others A number ofenterprise different network players and infew communications the national services. providers, Canadian There but marketusually are each compete focus market relatively for on hasextensive its the networks. own geographic competitors markets that whereIn they the have wireline the voicenon-facilities-based and most telecommunications data market, servicewhere we providers. compete we with In own facilitiesfibre-based markets network and providers. infrastructure, we Thethere compete are following also with regional are competitors: incumbent • our Ontario: main Bell, competitors,• Data Services but Quebec: and predominantly Allstream Bell• and Videotron Atlantic Canada: Bell• Alliant and Western Eastlink. Canada: Shaw and Telus COMPETITION DISTRIBUTION Our enterprise and carrier wholesaleservices to sales Canadian team sells business Businessextensive and Solutions public network sector telecom ofintegrators, customers. An consultants, third-party local service channelrelationships. providers This and distributors diverse other approach indirect dealand sustains sales gives strong with greater sales growth breadth IT for of next generation coverage services. Business Solutions isbusiness supported by support Rogers networkSolutions networks customers and monitoring with a teamresolution. proactive dedicated network that monitoring provides and Business problem NETWORK • voice, data networking, Internet protocol (IP) and ethernet services • optical wave, Internet, ethernet and multi-protocol label switching • extensive wireless and cable access• networks contracts services for are primary, typically for 1 to 5 year terms, supported by SERVICES THAT MEET THE INCREASINGTODAY’S DEMANDS CRITICAL OF BUSINESS APPLICATIONS BUSINESS SOLUTIONS LEADING-EDGE COMMUNICATIONS SERVICES TO CANADIAN BUSINESSES • sells to medium and large enterprises, governments and • 7,298 on-net fibre connected• buildings fibre passes next to an additional 20,014 near-net buildings. MANAGEMENT’S DISCUSSION AND ANALYSIS

Business Solutions generates revenue from services and equipment Higher Operating Expenses sales. We assess Business Solutions operating expenses in two categories: Next generation revenue is generated by the provision of high-speed, • the cost of operating and maintaining telecom and data networking high-reliability data and voice communications, provided on Rogers equipment advanced IP and Ethernet and Cloud platforms and mainly over the • all other expenses involved in day-to-day operations, to service extensive Rogers fibre, cable and wireless networks. Next generation existing subscriber relationships and attract new subscribers. revenue also includes Data Centre services revenue from the 2013 dates Operating expenses were higher this year, the net result of: of business acquisitions. • higher expenses related to our data centre acquisitions Legacy revenue is generated mainly by long distance, switched voice • partially offset by expected lower legacy service-related costs related services and lower speed data communications, provided over TDM and to lower volumes and customer levels and ongoing initiatives to end of life data platforms with client access primarily delivered through improve costs and productivity. the use of third-party networks and tariffed ILEC services. Higher Adjusted Operating Profit Business Solutions continues to focus mainly on next generation IP- Adjusted operating profit was 19% higher this year because of the based services, and on leveraging higher margin on-net and near-net contribution of new data centres, the ongoing growth in the higher service revenue opportunities, using existing network facilities to margin on-net next generation business and cost efficiencies. expand offerings to the medium and large sized enterprise, public Excluding the impact of the Blackiron and Pivot Data Centres sector and carrier markets. Next generation services now represent 59% acquisitions: of total service revenue. • operating revenue would have been 3% lower this year compared to Revenue from the lower margin off-net legacy business generally last year, instead of 7% higher as reported includes local and long-distance voice services and legacy data services • adjusted operating profit would have been 11% higher this year which often use facilities that are leased rather than owned. compared to last year, instead of 19% higher as reported Following our recent data centre business acquisitions, Business We continue to work on data centre business integration and the Solutions is now also focused on data centre colocation, hosting, cloud optimization of Business Solutions’ overall cost structures. and disaster recovery services.

BUSINESS SOLUTIONS ADJUSTED OPERATING PROFIT Higher Operating Revenue (IN MILLIONS OF DOLLARS) Operating revenue was 7% higher this year compared to last year, the net result of: 2013 $106 • higher revenue from next generation services, which grew by 31%, reflecting the impact of our acquisitions of Blackiron and Pivot Data 2012 $89 Centres 2011 $86 • continued execution of our plan to grow higher margin on-net and next generation IP-based services revenue • partially offset by ongoing decline in the legacy voice and data business, a trend management expects to continue as customers move to faster and more reliable IP services.

46 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 47 7% 4% 1 1 HANNEL HANNEL C 4% 1 42% 3% 1 SPORTS ENTERTAINMENT ENTERTAINMENT SPORTS TELEVISION TELEVISION SHOPPING THE PUBLISHING RADIO ROGERS COMMUNICATIONS INC. of Canadian households % BILLION 2013 ANNUAL REPORT $1.7 3 MEDIA REVENUE MIX 3 MEDIA REVENUE 1 20 (%) markets, including thoseMedia owned and and Shawcoverage operated Media, by some the of CBC, which Bell have greatershifting capacity national available to digital subscribers advertising Television and specialtywith: services compete for• viewers other and advertisers Canadian television stations that broadcast in their• other local specialty channels • other distant Canadian signals and US border stations• given the other time- media, including newspapers, magazines,• radio content and available outdoor on the Internet. Competition in Sports Entertainment includes: • other Toronto professional• teams, for attendance other at Major Blue League• Jays Baseball games teams, for other Blue local Jays sporting players and and special fans event venues. revenues from online sales. Issue Canada digital magazine service offering. 680 News, Sportsnet 590, The FAN, KISS 92.5, JACK FM and• SONiC. City network, which together with affiliated stations, has distribution to over 80 • OMNI multicultural• television stations Specialty channels• that include Outdoor Sportsnet’s Life four Network,• regional The networks Biography and Channel The Sportsnet (Canada), Shopping One, G4 Channel, Sportsnet Canada World Canada’s and and only FX Sportsnet (Canada) national 360 televised shopping channel which generates a significant and growing portion of its • We are• a leading publisher We of also marketing,• have medical, a financial broad and We digital trade deliver presence publications exclusive with and a unlimited number of access online to publications, a and catalogue are of extending more content than across 100 new premium platforms Canadian and US magazine titles through Next subscriptions, and commerce solutions. Toronto Blue Jays’ home games and other professional league games, concerts, trade shows and special events. operator Sirius/XM, the CBC, Bell Media and Corus Entertainment outdoor advertising music downloading,streaming services. portable media players and online music and loyalty. broadcast all national live hockeymultiple games languages within on Canada all in platforms2015 beginning season. with the 2014- COMPETITION Our radio stationsmarkets, but compete they also mainly compete: • with nationally individual with other stations large in radio• local operators, with including other satellite media, radio including newspapers,• magazines, with television and new technologies such as online webThe Shopping information Channel competes services, with: • retail stores, catalogue,• Internet and direct infomercials mail that retailers sell• products on other television television channels, for channel placement,Our viewer magazines attention andadvertisers with: other publications• compete other for Canadian magazines readership• and foreign, mostly US,• titles that sell online in information significant and quantities entertainment websites. in Canada Radio We operate more than 50 AM and FM radio stations in markets across Canada, including popular radio brands such as 98.1 CHFI, A NETWORK OF MEDIA ASSETS THAT REACHES CANADIANS COAST-TO-COAST Television We operate several conventional and specialty television networks: MEDIA DIVERSIFIED CANADIAN MEDIA COMPANY We have asignificantly broad includes: portfolio of• media category-leading television properties, and which radio• broadcasting most multi-platform properties shopping • publishing including Next Issue• Canada digital media • sports media and entertainment • exclusive 12-year licensing agreement with the NHL to Publishing • We publish many well-known consumer magazines such as Maclean’s, Chatelaine, Flare, Hello! Canada and Canadian Business Digital MediaSports Entertainment We own Our the online Toronto and Blue mobile Jays, digital Canada’s media only platforms Major include League digital Baseball advertising team, across and websites the and Rogers mobile Centre platforms, event digital venue, content which hosts the MANAGEMENT’S DISCUSSION AND ANALYSIS

ACQUISITIONS MEDIA FINANCIAL RESULTS • Closed our agreement to acquire Metro 14 Montreal for $10 million Years ended December 31 on February 4, 2013, and relaunched the station as City Montreal, (In millions of dollars, except percentages) 2013 1 2012 % Chg expanding the City broadcast TV network into the largest market in Quebec and increasing the City television network reach to over Operating revenue – Media $ 1,704 $ 1,620 5 80% of Canadian households. • Finalized our purchase of theScore, Canada’s third largest specialty Operating expenses (1,543) (1,430) 8 sports channel, for $167 million. We later rebranded theScore as Adjusted operating profit – Media $ 161 $ 190 (15) Sportsnet 360. Adjusted operating profit margin 9.4% 11.7% Additions to property, plant and equipment $79 $55 44 NHL • Advanced our strategy of delivering highly sought-after sports 1 Results of operations include theScore’s operating results as of April 30, 2013 (the content anywhere, anytime, on any platform and strengthening the date of acquisition). value of our sports brand by entering into an exclusive 12-year licensing agreement with the NHL which begins with the 2014-2015 MEDIA REVENUE season and grants Rogers the following: (IN MILLIONS OF DOLLARS)

- national rights across television broadcasts, wireless and 2013 $1,704 mobile tablets and Internet streaming - national rights to all regular season games, all playoff games 2012 $1,620 and the Stanley Cup Final, and all special events and non- game events (e.g. NHL All-Star Game, NHL Draft) – in multiple 2011 $1,611 languages - out-of-market rights for all regional games - ownership of all linear and digital highlights, including Higher Operating Revenue condensed games and video archives Media generates revenue in five areas: - NHL broadcast assets: Rogers to operate NHL Centre Ice and • advertising sales across its television, radio, publishing and digital NHL Game Centre Live media properties - sponsorship rights to the NHL Shield logo as an official partner • circulation of the NHL • subscriptions - Canadian representation of ad sales for NHL.com • retail product sales - ownership of all commercial inventories for the television • ticket sales, receipts of MLB revenue sharing and concession sales broadcasts associated with Rogers Sports Entertainment. - rights to sublicense broadcasting rights to TVA and CBC Operating revenue was 5% higher this year, mainly because of: - rights to use the brand through the • higher subscription and advertising revenue generated by the CBC sublicense agreement. Sportsnet properties, including the acquisition of theScore, and Through this agreement, Rogers plans to provide Canadians with a overall growth in distribution of our other specialty channels unique viewing experience that will feature expanded pre- and post- • higher advertising revenue of $21 million resulting from timing of game coverage of regular season and playoff games and other NHL hockey games. Advertising revenue last year was lower than enhanced NHL content. We expect this agreement to drive Sportsnet normal due to the NHL player lockout which resulted in no NHL subscriber growth and to provide highly sought after content in games being aired, and higher than normal this year due to the multiple languages across all of Rogers’ platforms. compressed 2012-2013 season which started in January 2013 and the compressed 2013-2014 NHL schedule in advance of the upcoming winter Olympics • higher attendance and merchandise sales at Blue Jays games • higher sales at The Shopping Channel. The increases in revenue were partially offset by continuing volatility in advertising spending across most industry sectors, driven by a continued slow economy.

48 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 49 lower this year higher this year % % higher this year compared higher this year compared % % lower as reported. lower as reported. % % ROGERS COMMUNICATIONS INC. higher as reported higher as reported % % 2013 ANNUAL REPORT compared to last year, instead of 15 compared to last year, instead of 15 to last year, instead of 5 to last year, instead of 5 • adjusted operating profit would have been 19 • adjusted operating profit would haveExcluding been the acquisition of 7 theScore: • operating revenue would have been 4 Lower Adjusted Operating Profit Adjusted operating profitbecause of was revenue and down expenses changes compared describedExcluding above. to the impact last of theschedule: year 2012 NHL mainly lockout and the• compressed NHL operating revenue would have been 4 $161 $190 $180 higher than 2012, mainly because of % 2012 2011 MEDIA ADJUSTED OPERATING PROFIT MILLIONS OF DOLLARS) (IN 2013 Entertainment higher programming costs at Sportsnet,salaries, higher Toronto higher Blue merchandise Jays player costs spending associated at with our The launch of Shopping NextThe Issue Channel Canada. higher and programmingcosts costs in this 2012 year becauseyear of are the because a NHL more player combination hockeythe lockout, of games compressed and than lower higher NHL normal costs hockeyOlympics. this were schedule Approximately aired due $62 because in million of part ofin Media’s to operating year expense upcoming over this winter year yearthe increase resulted timing from of the games 2012Jays NHL aired were lockout in $34 and million 2013. higher Player this year. salaries at the Toronto Blue Higher Operating Expenses We assess Media operating expenses in• four areas: the cost of• broadcast content (including the sports cost programming) of retail products sold by• The Shopping Blue Channel Jays and player• payroll Sports all other expenses involved inOperating day-to-day operations. expenses were 8 MANAGEMENT’S DISCUSSION AND ANALYSIS

ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT Additions to property, plant and equipment include costs associated WIRELESS with acquiring and placing property, plant and equipment into service. Wireless additions were 23% lower this year compared to last year The telecommunications business requires extensive and continual because we invested significantly less in HSPA capacity and spent less investments, including investment in new technologies and expansion on deployment of our LTE network, offset by higher investments to of geographical reach and capacity capital. improve the quality and coverage of the wireless network. Our LTE network reached approximately 73% of Canada’s population as at Management focuses on the planning, funding and management of December 31, 2013. additions to property, plant and equipment, because they are significant, and have a material impact on our cash flow. CABLE Additions to property, plant and equipment before related changes to Cable additions were higher this year compared to last year because of non-cash working capital represent capital assets that we actually took the timing of initiatives related to service enhancements, reflecting title to and were ready for use in the period. We believe that this increasing our investment in improving our video and Internet platforms measure best reflects our cost of property, plant and equipment in a and in customer premise equipment related to the rollout of given period, and is a simpler measure for comparing between periods. NextBox 2.0 and NextBox 3.0 digital set-top boxes and continuation of Year ended December 31 the ongoing analog to digital subscriber migration. (In millions of dollars, except percentages) 2013 2012 % Chg Migrating subscribers from analog to digital will continue to strengthen Additions to property, plant and equipment the customer experience and is allowing us to reclaim significant Wireless $ 865 $ 1,123 (23) amounts of network capacity and reduce network operating and Cable 1,105 832 33 maintenance costs. This effort requires additional spending because it Business Solutions 107 61 75 involves fitting analog homes with digital converters and removing Media 79 55 44 existing analog filtering equipment from the network. Corporate 84 71 18 Total additions to property, plant and BUSINESS SOLUTIONS equipment $ 2,240 $ 2,142 5 Business Solutions additions were higher this year compared to last year Capital intensity 1 17.6% 17.2% 0.4 pts because we spent more on expanding customer specific networks, and

1 Capital intensity is a key performance indicator. See “Key Performance Indicators”. because of capital investments made by Blackiron Data and Pivot Data Centres which we acquired this year.

2013 ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT (%) MEDIA Media additions increased this year compared to last year because of CABLE 49% higher expenditures on digital and broadcast facilities.

$2.2 WIRELESS 39% BILLION

BUSINESS SOLUTIONS 5% MEDIA 4% CORPORATE 3%

50 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 51 Chg % 141 6 2012 $ 1,819 4 $ 1,678 4 Years ended December 31 150 2013 $ 1,748 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT equipment, mostly NextBox 2.0 andare 3.0 set-top now boxes amortized at over Cable;2012, these three which years, also compared contributed to to the five increase years prior to including the launch of our LTE network in various municipalities from our recent acquisitions in Cable, Business Solutions and Media. restructuring of our employee base (2012 – $89 million) Total depreciation and amortization $ 1,898 Amortization (In millions of dollars) Depreciation and amortizationmainly because expense of: were• both our higher significant this investment year and roll out of new customer premise • the timing of readiness of• certain new network property, and plant and system equipment initiatives, and intangible assetsImpairment resulting of Assets There was no impairment$80 of million assets impairment this charge in year.• the In Media 2012, segment $67 that we million included: in recorded• goodwill an $8 million in• broadcast licences $5 million in program rights. Stock-based compensation expense$77 million increased in tomainly 2012. the $84 Stock-based result of compensation millionthe the increase of from vesting in $84 the ofof RCI million share-based this Class options year was B prior and to share units entering price into and during theWe the Equity had Derivatives. first a two liability months million) of $164 related million to at stock-basedincluding December compensation stock 31, recorded options, 2013 restricted at (2012 share its – units $195 fair and deferred value, We share units. paid $101 millionoptions, in restricted 2013 share (2012 – units $76All and million) stock deferred options to holders share holders exercisedshare of units their stock upon appreciation stock exercise. options rights throughtime (SARs). optional to We time use toour derivative manage stock-based compensation our instruments expense. exposure from to market-based fluctuations in Restructuring, Acquisition and Other Expenses Restructuring, acquisition and other expensesaimed associated at improving with our initiatives cost structure• mainly included: $53 million in• severance $32 million in costs acquisition transaction costs associated (2012 –Depreciation $3 and with million). Amortization Expense the targeted Depreciation – Chg $77 $77 2012 % (77) 9 (92)(80) (8) n/m (32) n/m 250 (68) (671) 11 (620) (4) 2012 8 2,766 6 2,345 (3) 1,725 (3) (1,819) 4 $ 4,834 3 $ 1,693 (1) $76 2013 – – 81 (84) (85) (742) (596) Years ended December 31 Years ended December 31 2013 2,926 2,265 (1,898) $ 4,993 1 2 instruments that offset a portionstock-based of the price compensation appreciation risk“Financial for program our Risk startingDerivatives. March Management” 2013. for See information about Equity As defined. See “Additional GAAP Measures”. Adjusted operating profit is asubstitute non-GAAP or measure alternative and for shoulddoes GAAP not not measures. be have It considered a is asother not standard a companies. a meaning, See defined so “Non-GAAP term mayincluding Measures” under how not for we IFRS information be calculate and about them. a these reliable measures, way to compare us to tock-Based Compensation Expense (In millions of dollars) Our stock-based compensationstock appreciation expense rights), for restricted shareis stock units generally and options deferred determined share by: units (including • vesting of stock• options and share changes units in the• market price of offset RCI Class by B shares the impact of the stock-based compensation derivative S Adjusted Operating Profit Please see “2013 Financialadjusted Results” operating profit for this a year. discussion of the increase in 2 n/m: not meaningful. 1 (In millions of dollars) REVIEW OF CONSOLIDATED PERFORMANCE This section discusses ourand consolidated other operating expenses income, thatabove. do net not income form part of the segment discussions Stock-based compensation expense Restructuring, acquisition and other expenses Depreciation and amortization Impairment of assets Operating income Finance costs Other income (expense) Income before income taxes Equity derivatives, net of interest receipt Impact of vesting and change in price Total stock-based compensation expense $ 84 Adjusted operating profit Income tax expense Net income from continuing operationsLoss from discontinued operations Net income 1,669 $ 1,669 MANAGEMENT’S DISCUSSION AND ANALYSIS

We used a combination of value-in-use and fair-value-less-costs-to-sell The 2013 and 2012 effective income tax rates were consistent with the methodologies with pre-tax discount rates of approximately 10% in statutory income tax rates. For both years, this is the net effect of arriving at the impairment amount in 2012. The recoverable amounts of several offsetting adjustments to our income tax expense. The most the cash generating units declined in 2012 mainly because advertising significant adjustments were: revenue was lower in certain markets. • realizing capital gains (of which only 50% are taxable) • recognizing and using losses and other tax attributes that were not Finance Costs previously recognized • offset by a tax charge relating to the revaluation of our net deferred Years ended December 31 tax liability to reflect an increase in tax rates and non-deductible (In millions of dollars) 2013 2012 % Chg stock-based compensation. Interest on long-term debt $ 734 $ 691 6 Interest on pension liability 14 7 100 We paid $116 million more in cash income taxes in 2013 than in 2012, Foreign exchange (gain) loss 23 (9) n/m mainly because we used substantially all of our remaining non-capital Change in fair value of derivative income tax loss carryforwards in 2012. In 2011, legislative changes instruments (16) 1 n/m eliminated the deferral of partnership income, accelerating the payment Capitalized interest (25) (28) (11) of approximately $700 million of previously deferred cash taxes over a Other 12 933five year amortization period, beginning in 2012 at 15%,20% in each Total finance costs $ 742 $ 671 11 of 2013 through 2015, and 25% in 2016. Our cash tax payments for the 2014 to 2016 taxation years will include these additional amounts.

Interest on long-term debt was higher in 2013, the net effect of an While the elimination of the partnership deferral affects the timing of increase in the amount of outstanding debt, partially offset by a decrease cash tax payments, it does not impact our income tax expense for in the weighted average interest rate on our outstanding debt, mainly accounting purposes. related to refinancing activities completed in 2013. See “Managing Our Liquidity and Financial Resources” for more information. The table below shows the difference between income tax expense from continuing operations, and income tax expense computed by In 2013, the foreign exchange loss of $23 million primarily relates to applying the statutory income tax rate to income before income taxes: the depreciation in the Canadian dollar relative to the US dollar and its impact on our US$350 million of senior notes due 2038, which was not Years ended December 31 hedged for accounting purposes prior to March 6, 2013. Most of the (In millions of dollars, except tax rate) 2013 2012 foreign exchange loss was offset by the change in the fair value of the Statutory income tax rate 26.5% 26.4% associated Debt Derivatives as discussed below. We use cross currency Income before income taxes $ 2,265 $ 2,345 interest rate exchange agreements (Debt Derivatives) to hedge the Computed income tax expense using statutory foreign exchange risk on all of our US$ denominated senior notes and income tax rate 600 619 debentures. Revaluation of deferred tax balances due to legislative changes 8 54 The non-cash gain on the fair value of derivative instruments in 2013 Non-taxable portion of capital gains (9) (61) was primarily from the change in fair value of the Debt Derivatives prior Recognition of previously unrecognized deferred tax to March 6, 2013. Subsequently, all Debt Derivatives were designated assets (14) (22) as hedges for accounting purposes. Impairment of goodwill and intangible assets – 11 Non-deductible stock-based compensation 8 9 Other Income Other items 3 10 Other income was lower this year, largely due to a $233 million gain recorded in 2012 related to the sale of spectrum licenses by Inukshuk, a Income tax expense $ 596 $ 620 50% owned joint venture, to the other non-related venture. Effective income tax rate 26.3% 26.4%

Other income of $81 million this year mainly reflects a $47 million gain Cash income taxes paid $ 496 $ 380 from the sale of TVtropolis and certain other investment income. Discontinued Operations Income Taxes As discussed in the Cable segment, the second quarter of 2012 was the Our effective income tax rate was 26.3% for 2013 and 26.4% for last period of operations for our Video business, from which point the 2012. associated results were treated as discontinued operations for accounting and reporting purposes.

52 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 53 from $1,813 million in 2012 due % ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Employees Employee salaries andexpenses. benefits At represent Decemberemployees a 31, across all 2013, material of we portion ourand had operating of the groups, 28,026 including our corporate (2012 sharedemployees services – office. (FTE) 26,801) Totalapproximately $1,940 and salaries million, up and part-time 7 to the benefits increase employees in for theand number full (PTE) of employee employees, higher time benefit baseball inhigher player costs, costs service 2013 an increase costs,expense were due in and to pension a an larger expense increase in increase due our share in to price compared stock-based to 2012. compensation Chg Chg % % 17 100 $1,769 $1,781 $1,736 (32) n/m 3.24 (1) 3.26 (1) 3.30 (2) (671) 11 (580) 7 2012 2012 (1,819) 4 lower compared $ 3.32 (2) $ 1,725$ 1,693 (3) $ (1) $ 3.43$ 3.41 – – $ 4,834 3 $ 1,781 (1) % lower than last year. – 34 Years ended December 31 Years ended December 31 % 3.22 3.24 3.22 (742) (618) 2013 2013 (1,898) $ 3.24 $ 1,669 $ 3.43 $ 3.42 $ 4,993 $ 1,769 1 1 1 3 1 2 Depreciation and amortization Finance costs Other income Income tax expense 2012 2011 CONSOLIDATED ADJUSTED NET INCOME MILLIONS OF DOLLARS) (IN 2013 operations operations Income tax expense excludesthe year $22 ended million December recovery 31, 2013 (2012 related – to adjusted $40 items. million expense) for Other income excludes $47year million gain ended on December thespectrum sale sale 31, for of the 2013. TVtropolis year investment ended Other December for 31, income the 2012. also excludes the $233 gain on Adjusted operating profit, adjustedper net share income, are adjusted non-GAAPalternative basic measures for and and GAAP diluted should measures. earnings have not These be are standard not considered meanings, defined ascompanies. terms so a under See substitute may IFRS, or not and “Non-GAAPincluding how do be we Measures” not calculate a them. for reliable information way to about compare these us measures, to other Diluted earnings per share Basic earnings per share Diluted earnings per share – continuing See “Key Changes infor further Financial details. Results this Year Compared to 2012”, Loss from discontinued operations Net incomeBasic earnings per share – continuing $ 1,669 Adjusted diluted earnings per share Adjusted basic earnings per share Adjusted net income 3 2 1 to 2012, mainlyincome from tax higheramortization. expense, adjusted partially operating profit offset and(In by millions of lower dollars, highershare except amounts) per depreciation and Excluding certain items, adjusted net income was 1 (In millions of dollars,share except amounts) per Net Income Net income from continuing operations was 3 Net income from continuing operations Adjusted operating profit MANAGEMENT’S DISCUSSION AND ANALYSIS

QUARTERLY RESULTS

The table below shows our quarterly consolidated financial results and key performance indicators for 2013 and 2012.

QUARTERLY CONSOLIDATED FINANCIAL SUMMARY

2013 2012 Full Full (In millions of dollars, except per share amounts) Year Q4 Q3 Q2 Q1 Year Q4 Q3 Q2 Q1 Operating revenue Wireless $ 7,270 $ 1,851 $ 1,846 $ 1,813 $ 1,760 $ 7,280 $ 1,920 $ 1,889 $ 1,765 $ 1,706 Cable 3,475 871 873 870 861 3,358 852 838 843 825 Business Solutions 374 98 93 90 93 351 88 86 90 87 Media 1,704 453 440 470 341 1,620 434 392 440 354 Corporate items and intercompany eliminations (117) (30) (28) (31) (28) (123) (33) (29) (32) (29) Total operating revenue 12,706 3,243 3,224 3,212 3,027 12,486 3,261 3,176 3,106 2,943 Adjusted operating profit (loss) Wireless 3,157 696 875 821 765 3,063 687 843 796 737 Cable 1,718 433 425 431 429 1,605 421 403 403 378 Business Solutions 106 29 29 25 23 89 27 22 22 18 Media 161 49 55 64 (7) 190 75 50 79 (14) Corporate items and intercompany eliminations (149) (40) (43) (35) (31) (113) (34) (30) (24) (25) Adjusted operating profit 1 4,993 1,167 1,341 1,306 1,179 4,834 1,176 1,288 1,276 1,094

Stock-based compensation (expense) recovery (84) (18) (7) (1) (58) (77) (57) (26) 12 (6) Restructuring, acquisition and other expenses (85) (24) (38) (14) (9) (92) (10) (7) (33) (42) Depreciation and amortization (1,898) (508) (477) (463) (450) (1,819) (453) (437) (466) (463) Impairment of assets – –––– (80) (80) – – – Operating income 2 2,926 617 819 828 662 2,766 576 818 789 583 Finance costs (742) (196) (180) (185) (181) (671) (183) (169) (159) (160) Other income (expense) 81 14 (3) 60 10 250 241 (6) 7 8 Net income before income taxes 2,265 435 636 703 491 2,345 634 643 637 431 Income tax expense (596) (115) (172) (171) (138) (620) (112) (177) (224) (107) Net income from continuing operations $ 1,669 $ 320 $ 464 $ 532 $ 353 $ 1,725 $ 522 $ 466 $ 413 $ 324 Loss from discontinued operations – –––– (32) – – (13) (19) Net income $ 1,669 $ 320 $ 464 $ 532 $ 353 $ 1,693 $ 522 $ 466 $ 400 $ 305 Earnings per share from continuing operations: Basic $ 3.24 $ 0.62 $ 0.90 $ 1.03 $ 0.69 $ 3.32 $ 1.01 $ 0.90 $ 0.79 $ 0.62 Diluted 3.22 0.62 0.90 0.93 0.68 3.30 1.01 0.90 0.77 0.61 Earnings per share: Basic 3.24 0.62 0.90 1.03 0.69 3.26 1.01 0.90 0.77 0.58 Diluted 3.22 0.62 0.90 0.93 0.68 3.24 1.01 0.90 0.75 0.57 Net income 1,669 320 464 532 353 1,693 522 466 400 305 Loss from discontinued operations – –––– 32––1319 Net income from continuing operations $ 1,669 $ 320 $ 464 $ 532 $ 353 $ 1,725 $ 522 $ 466 $ 413 $ 324 Add (deduct): Stock-based compensation expense (recovery) 84 18 7 1 58 77 57 26 (12) 6 Restructuring, acquisition and other expenses 85 24 38 14 9 92 10 7 33 42 Impairment of assets – –––– 8080––– Gain on sale of TVtropolis (47) – – (47) – ––––– Gain on spectrum distribution – ––––(233) (233) – – – Income tax impact of above items (30) (5) (8) (11) (6) (14) 12 (4) (10) (12) Income tax adjustment, legislative tax change 8 – – 8 – 54 – – 54 – Adjusted net income 1 $ 1,769 $ 357 $ 501 $ 497 $ 414 $ 1,781 $ 448 $ 495 $ 478 $ 360 Adjusted earnings per share from continuing operations 1: Basic $ 3.43 $ 0.69 $ 0.97 $ 0.97 $ 0.80 $ 3.43 $ 0.87 $ 0.96 $ 0.92 $ 0.69 Diluted 3.42 0.69 0.97 0.96 0.80 3.41 0.86 0.96 0.91 0.68 Additions to property, plant and equipment 2,240 703 548 525 464 2,142 707 528 458 449 Pre-tax free cash flow 1 2,044 279 620 602 543 2,029 296 589 656 488 After-tax free cash flow 1 1,548 109 506 505 428 1,649 39 561 633 416 Cash provided by operating activities $ 3,990 $ 1,072 $ 1,052 $ 1,061 $ 805 $ 3,421 $ 668 $ 1,146 $ 1,079 $ 528

1 Adjusted operating profit, adjusted net income, adjusted basic and diluted earnings per share, pre-tax free cash flow and after-tax free cash flow are Non-GAAP measures and should not be considered as a substitute or alternative 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. 2 As defined. See “Additional GAAP Measures”.

54 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 55 ROGERS COMMUNICATIONS INC. olutions 2013 ANNUAL REPORT S plans. products and services changes over the past year. seasonal relocations quarter. QUARTERLY TRENDS Our operating results generally varychanges from in quarter general to quarter economiceach because of conditions of our and business seasonal segments,one which fluctuations, quarter’s have in a operating materialresults impact. results in As a are such, subsequent notunique quarter. seasonal necessarily aspects Wireless, to Cable indicative their businesses. and of MediaFluctuations our each have inattributed net to income losses onor from the repayment losses, quarter of changes debt,income to foreign in and exchange expenses, quarter the gains impairment fair ofexpense. can assets value and also changes of in be derivative income tax instruments, other Wireless The trends in Wireless revenue and• adjusted operating the profit growing reflect: number• of wireless voice decreased and churn data• subscribers higher usage of• wireless data higher handset subsidies• as more consumers a shift slight to decrease smartphones in blended ARPU due toWe changes continue in to wirelesscontributed price target to higher the value significantlysubscribers. heavier postpaid mix subscribers, Growth of whichpenetration postpaid have in versus has resulted prepaid in higher ourretention, costs over credit time customer for and customerhave service, collection; base been offset however, by most gains and in of operating efficiencies. the overallWireless’ cost operating market increases marketing results and promotional expenditures are andadditions higher and influenced levels related of subsidies, subscriber by resultingand in activation-related higher the expenses subscriber in acquisition certain timinggenerally periods. This occurs increased of in activity the thirdbe our accentuated and by fourth the quarters, launch and of can popular new also wireless occur handset or Cable models. The trends in Cableprimarily services due revenue to: and operating• profit increases higher are penetration and usage• of offset Internet, by digital competitive and losses telephony ofCable’s television operating subscribers results are andin affected subscriber pricing additions by and modest disconnections,• typically seasonal caused fluctuations by: university and college• students moving individuals temporarily suspending service for extended• vacations or the concentrated marketing we generally conductBusiness in ourThe fourth trends in Business Solutionsthe operating profit ongoing margin shift primarily from reflect data lower-margin, off-net services legacy longservices. distance to and higher-margin, on-netBusiness Solutions next does not generally generationto have its any business. IP-based unique seasonal aspects . % Operating Income and Net Income Operating income was higherstock-based than compensation the same was quarter lowerimpairment last and year charge we because realizeddepreciation in an and $80 2012. million amortization,expenses. This restructuring, was acquisition partially andNet offset income other this bybecause quarter of higher was lower theoperating than changes income. the Also, in samespectrum in revenue, licenses quarter 2012 that adjusted Inukshuk we last soldand realized year operating to recorded our a the profit non-related related $233 venture income and partner tax million benefits gain thatNet year. on income from continuingwith operations basic was and $320 diluted millionof this earnings $0.62. quarter, per In share theoperations from fourth was continuing $522 quarter operations million, ofoperations basic 2012, earnings net per was income sharecontinuing from from operations continuing continuing was $1.01 $1.01. Thebecause decrease and of this the quarter $233 was dilutedabove. largely million gain earnings on spectrum licenses per in 2012 noted share from Adjusted Operating Profit Wireless adjusted operating profit wasthe higher same this period quarter comparedproductivity last to initiatives year, implemented mainly acrossof various because equipment, areas, offset of including by reduced cost cost network management revenue described and Cable above. adjusted operating profitthe same was period higher last year thismix because towards quarter of higher margin the compared Internet continued to and shift phone in products. ourMedia’s product adjusted operating profitthe was same lower period this last quarterthis year. compared year The to was more increasenumber than in of offset Media’s by games operating thefrom broadcast revenue combined the in impacts NHL the of lockouthockey the fourth games compared lower in quarter with the of fourth having2013-2014 quarter 2012 to of schedule 2013 broadcast resulting because associated more ofExcluding the with NHL compressed the the upcoming impactoperating winter of profit would Olympics. these have increased items, by 22 Media’s consolidated adjusted FOURTH QUARTER 2013 RESULTS Operating Revenue Wireless network revenue was lowerperiod this quarter last compared to year, thepriced mainly same roaming because plans ofprimarily the and associated with recent pricing our new introduction changes simplified of plans. made lower Cable over operating revenue the was past higherperiod this year last quarter year, compared mainly to theof because same of Mountain Internet Cable, growth andwith partially competitive the offset TV acquisition subscriber by losses. a declineBusiness in Solutions television operating revenue revenue wasto higher this the quarter compared sameacquisitions of period Blackiron Data lastcombined and with year, Pivot the Data mainly continuingservices. Centres earlier growth because this in year, we on-net and completedMedia next-generation operating the revenue was higherperiod this quarter last compared to year, the mainlyhigher same sales because at The of Shopping revenue Channel. growth at Sportsnet and MANAGEMENT’S DISCUSSION AND ANALYSIS

Media The trends in Media’s results are generally the result of continual investment in prime-time and specialty programming, higher sports rights costs, higher subscriber fees, and fluctuations in advertising and consumer market conditions.

Seasonal fluctuations relate to periods of increased consumer activity and their impact on advertising and related retail cycles, the MLB season, where revenues and expenses are concentrated in the spring, summer and fall months, and the NHL season, where advertising revenues and programming expenses are concentrated in the fall and winter months.

2012 FULL YEAR RESULTS COMPARED TO 2011

Operating Revenue Consolidated revenue increased in 2012 by $140 million from 2011, Wireless contributed $142 million, Cable contributed $49 million and Media contributed $9 million, partially offset by decreases in revenue of $54 million in Business Solutions and in corporate items and intercompany eliminations of $6 million. The increase was due to overall higher subscriber levels, data revenue and equipment sales at Wireless and higher Internet revenue at Cable, partially offset by lower overall revenue at Business Solutions due to the phased exit of the legacy services business.

Adjusted Operating Profit Consolidated adjusted operating profit increased in 2012 by $95 million from 2011, Wireless contributed $27 million, Cable contributed $56 million, Business Solutions contributed $3 million, and Media contributed $10 million. The increases at Wireless and Cable were due to the revenue growth described above combined with cost efficiencies.

Adjusted Net Income Consolidated adjusted net income increased to $1,781 million in 2012, from $1,736 million in 2011, primarily due to increase in adjusted operating profit of 2%.

56 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 57 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT plant and equipment, goodwill and intangible assets. spectrum auction payment in 2014. scheduled settlements, new transactions,and changes inand interest foreign exchange rates. depreciation. amortization. scheduled settlements, new transactions and changesand in foreign interest exchange rates. Shaw’s AWS spectrum holdings in 2014. (2012 –US$350 million repaid and bought in June 2013). scheduled settlements, new transactions, changes invoting our share Class price B and non- changes in interest and foreign exchange rates. certain sites. October 2013. scheduled settlements, new transactions and changesand in foreign interest exchange rates discount rates. Chg Explanation of significant changes % 8 65 n/m Reflects the change in market values of our derivatives due to 7 0 n/m – 42 106 n/m Reflects the change in market values of our derivatives due to 9831 299 n/m – Increase mainly due to deposits to secure an option to purchase – – 24 (2) (8) – 31 9 29 Increased due to costs associated with exiting and ceasing the use of 464 (26) (6) Mainly from a decrease in income taxes receivable. 348144 822 (81)344 n/m Reflects US$1.1 billion of senior notes maturing (56) in March 2014 Reflects 6 the change in market values of our derivatives due to 2 – 417 (334)458 (80) (130) Reflects the change in market values of our derivatives due to (28) Mainly reflects the decrease in pension liability due to an increase in 2012 $ Chg 1,501 201 13 Mainly reflects additional temporary differences arising from property, 3,768 901 24 Includes changes in retained earnings and equity reserves. 1,536 (27)2,221 (2) Mainly from collection of accounts receivable. 2,100 95 9,576 679 7 Results from property, plant and equipment additions, net of 3,215 536 17 Relates to additions from acquisitions in 2013. 2,951 260 9 Mainly relates to additions from acquisitions in 2013, net of 1,484 3 – – 2,135 209 10 Includes an increase in trade payables due to the timing of payments. 3,002 1,604 53 15,850 3,082 19 10,441 1,732 17 Increased due to issuances of long-term debt in March 2013 and $ 213 2,088 n/m New debt raised in anticipation of both debt coming due and $19,618 3,983 20 $19,618 3,983 20 $ – 650 n/m Reflects January 2013 funding from A/R securitization program. 7 73 31 22 63 40 83 438 148 397 350 328 2013 1,702 4,669 1,509 4,321 3,751 3,211 1,487 2,344 1,170 4,606 18,932 10,255 12,173 $ 2,301 $23,601 $23,601 $ 650 equity ’ instruments instruments Deferred tax liability Cash and cash equivalents Accounts receivable Other current assets Current portion of derivative Property, plant and equipment Goodwill Intangible assets Investments Derivative instruments Other long-term assets Deferred tax assets Short-term borrowings Accounts payable and accrued liabilities Current portion of long-term debt Income taxes payable Current portion of provisions Current portion of derivative Unearned revenue Provisions Long-term debt Derivative instruments Other long-term liabilities Total liabilities Shareholders’ equity Assets Current assets: Total current assets Total liabilities and shareholders’ equity Years ended December 31 (In millions of dollars) BALANCE SHEET OVERVIEW CONSOLIDATED BALANCE SHEETS Total assets Liabilities and shareholders Current liabilities: Total current liabilities MANAGEMENT’S DISCUSSION AND ANALYSIS

Managing Our Liquidity and Financial Resources

SOURCES AND USES OF CASH CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31 (In millions of dollars) 2013 2012 % Chg CASH FROM OPERATIONS Net income for the period $ 1,669 $ 1,693 (1) Depreciation and amortization 1,898 1,819 4 Impairment of assets – 80 n/m Finance costs 742 671 11 Income tax expense 596 610 (2) Gain on sale of TVtropolis (47) – n/m Gain on spectrum distribution – (233) n/m Other 90 89 1

Cash provided by operations before changes in non-cash operating items 4,948 4,729 5 Change in non-cash operating working capital items 238 (248) n/m

5,186 4,481 16 Income taxes paid (496) (380) 31 Interest paid (700) (680) 3

Cash provided by operating activities 3,990 3,421 17

CASHUSED IN INVESTING Additions to property, plant and equipment (2,240) (2,142) 5 Change in non-cash working capital items related to property, plant and equipment (114) 136 n/m Acquisitions and strategic initiatives (1,080) (707) 53 Other (39) (121) (68)

Cash used in investing activities (3,473) (2,834) 23

CASH FROM FINANCING Issuance of long-term debt, net of transaction costs 2,543 2,090 22 Repayment of long-term debt and net settlement of derivatives on termination (725) (1,240) (42) Proceeds on short-term borrowings 650 – n/m Dividends paid and repurchase/issuance of Class B Non-Voting shares (897) (1,167) (23)

Cash provided by (used in) financing activities 1,571 (317) n/m

Increase in cash and cash equivalents $ 2,088 $ 270 n/m

Cash and cash equivalents, end of period $ 2,301 $ 213 n/m

Operating Activities Acquisitions and Strategic Initiatives Cash provided by operations was 17% higher this year compared to We made net investments of $1,080 million this year mainly to acquire 2012. theScore, Blackiron, Mountain Cable and Pivot Data Centres. In 2012, we made net investments of $707 million to acquire our 37.5% interest The changes were the net effect of: in MLSE and for certain deposits related to our acquisition of theScore. •a5% increase in cash from operations before changes in non-cash operating items Financing Activities • net funding provided by non-cash working capital this year Debt Issuances compared to a net investment in 2012 On March 7, 2013 we issued US$1.0 billion of senior notes for total net •a3% increase in interest paid on long-term debt due to an increase proceeds of approximately Cdn$1,015 million (US$985 million), after in the amount of outstanding debt, partially offset by a decrease in deducting the original issue discount and debt issuance costs, with the the weighted-average interest rate proceeds used for general corporate purposes. The notes issued • higher cash income tax payments in 2013. consisted of the following: • US$500 million of 3.0% senior notes due in 2023 (the March 2023 Investing Activities Notes) Property, Plant and Equipment • US$500 million of 4.5% senior notes due in 2043 (the March 2043 We spent $2,240 million this year, excluding $114 million of related Notes). changes in non-cash working capital, compared to $2,142 million in 2012. See “Additions to Property, Plant and Equipment”.

58 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 59 2.4x 2.3x 2.2x ROGERS COMMUNICATIONS INC. senior notes due 2014 and our US $350 % senior notes due 2014. The tender offer consideration % 2013 ANNUAL REPORT RATIO OF DEBT TO ADJUSTED OPERATING PROFIT RATIO OF DEBT TO ADJUSTED 2013 2012 2011 will be US$1,000accrued for and unpaid each interest to,and $1,000 but principal a not including, amount consent theamount of settlement of payment notes. date) notes equal (plus to US$2.50 per US$1,000 principal Debt Tender Offer On January 29,subsidiaries 2014, had we commenced announced cashUS that tender one $750 offers of for million ourmillion any 6.375 5.500 and wholly-owned all of our Accounts Receivable Securitization We received fundingsecuritization of program during $650 2013. We millionthe have under program committed funding up our under to a accountsand maximum receivable retain of $900 substantially million.accounts We all continue receivable of to service we therecognized sold, risks on and and ourreceived rewards therefore, statement is relating the of recorded to receivablesfinancial financial as position. the remain position short-term and borrowings the onThe funding our buyer’s interest statement inour of these interest. secured The buyer tradeour of receivables our ranks other trade ahead assets. receivables of program has The no are terms claim committed on ofexpiry by any our on of the December accounts 31, participating 2015. receivable financial securitization institution until October June 2022 June 2017 5.5% 6.1% 6.2% senior notes. October 2023 % with a weighted average term of the foreign exchange risk on % % senior notes due 2022 (the senior notes due 2017 (the senior notes due in 2043 (the senior notes due in 2023 (the % % % % ). with weighted average term to maturity of 11.3 years at ). ) ) % senior notes due 2013. % 2011 2013 2012 WEIGHTED AVERAGE COST OF LONG-TERM DEBT (%) Notes Notes Notes 2043 Notes Concurrent with this repayment,also the settled associated Debt atsettlement Derivatives of maturity, approximately were $104 resulting million. in anIn September aggregate 2013, net wemillion payment paid ($1,360 million) Cdn$263 on aggregate millionand notional to amount entered terminate of US$1,075 into DebtUS$1,075 Derivatives new million Debt ($1,110lower million) Derivatives under with the prevailingManagement” a for same further notional terms, details. foreign amount but of at exchangeWeighted the Average Cost of rate.Our Debt weighted See averagewas cost 5.5 of “Financial debt,December including 31, Risk 2013, short-term compared borrowings toto maturity 6.1 of 9.2 yearsand at longer December term 31, to 2012.and maturity This primarily thirty lower reflects average year the rate USrates notes, $2.5 issued ever billion of in achieved ten establishment 2013 for of at our Rogers some6.25 securitization of corporate program the debt, and lowest combined coupon the with maturity of the our Each of the notesCommunications issued Partnership in 2013 andsenior and rank unsecured 2012 notes are equally and guaranteed debentures,facilities. with by bank At all December credit Rogers 31, and of 2013, letterour 100 of US$ our credit denominated other senior notesfluctuations and debentures in was hedged foreignforeign against exchange currency, interest and ratesbelow interest and for equity information rates. about compensation” our See as hedging described transactions. “Managing Debt Payments and RelatedIn Derivative Settlements June 2013, weamount repaid of and our bought the US$350 entire million outstanding ($356 principal million) 6.25 • Cdn$600 million of 4.0 On October 2, 2013,net we issued proceeds US$1.5 of billionafter approximately of deducting Cdn$1,528 senior the original million notes issue forproceeds (US$1,481 discount total and million), debt used issuance costs,consisted for with of the following: general• corporate US$850 million purposes. of 4.1 The notes issued • US$650 million of 5.45 In June 2012,proceeds we of issued approximatelyoriginal Cdn$1.1 issue Cdn$1,091 billion discount and senior million,to debt issuance notes repay after costs, for outstanding with deductinggeneral the advances total proceeds the under net used corporate ourfollowing: bank purposes. credit facility The• and for Cdn$500 notes million issued of 3.0 consisted of the MANAGEMENT’S DISCUSSION AND ANALYSIS

Normal Course Issuer Bid Share Purchases of $1.1 billion of debt securities under the Canadian Shelf. We intend In February 2013, we renewed our normal course issuer bid for our to replace these expired shelf prospectuses with a new Canadian Shelf, Class B Non-Voting shares for another 12-month period. This allowed qualifying up to $4 billion of debt securities, and a new US Shelf, us to purchase up to the lesser of 35.8 million Class B Non-Voting qualifying up to US$4 billion of debt securities. We have no immediate shares and the number of Class B Non-Voting shares that can be intention to offer securities pursuant to either of these new shelf purchased by Rogers under the normal course issuer bid for a total prospectuses. The notice set forth in this paragraph does not constitute purchase price of $500 million during a twelve-month period an offer of any securities for sale or an offer to sell or the solicitation of commencing February 25, 2013 and ending February 24, 2014. an offer to buy any securities.

During 2013 we purchased 546,674 Class B Non-Voting shares for Pre-tax and After-tax Free Cash Flow cancellation under the NCIB for a purchase price of $22 million, all of Years ended December 31 which were made through the facilities of the TSX in June 2013. (In millions of dollars) 2013 2012 % Chg

During 2012 we purchased 9,637,230 Class B Non-Voting shares for Adjusted operating profit 1 $ 4,993 $ 4,834 3 cancellation under the NCIB for a purchase price of $350 million. Property, plant and equipment expenditures (2,240) (2,142) 5 Interest on long-term debt, net of capitalization (709) (663) 7 In February 2014, we filed a notice with the TSX of our intention to 1 renew our normal course issuer bid for our Class B Non-Voting shares Pre-tax free cash flow 2,044 2,029 1 for another year. Subject to acceptance by the TSX, this notice gives us Cash income taxes (496) (380) 31 the right to buy up to an aggregate $500 million or 35,780,234 Class B After-tax free cash flow 1 $ 1,548 $ 1,649 (6) Non-Voting shares of RCI, whichever is less, on the TSX, the NYSE and/ or alternate trading systems any time between February 25, 2014 and 1 Pre-tax free cash flow, after-tax cash flow and adjusted operating profit are non- February 24, 2015. The number of Class B Non-Voting shares we GAAP measures and should not be considered as a substitute or alternative for GAAP measures. They are not defined terms under IFRS, and do not have standard actually buy under the normal course issuer bid, if any, and when we meanings, so may not be a reliable way to compare us to other companies. See “Non- buy them, will depend upon our evaluation of market conditions, stock GAAP Measures” for information about these measures, including how we calculate prices, our cash position, alternative uses of cash and other factors. them.

Dividends Pre-tax cash flow was up 1% this year compared to last year due to In 2013, we declared and paid dividends on each of our outstanding higher adjusted operating profit, partially offset by higher additions to Class A Voting and Class B Non-Voting shares. We paid $876 million in property, plant and equipment and higher interest on our long-term cash dividends, an increase of $73 million from 2012. See “Dividend debt. After-tax free cash flow was 6 percent lower than last year and Share Information”. because of higher cash income taxes.

Shelf Prospectuses PRE-TAX FREE CASH FLOW Our two shelf prospectuses expired in January 2014. One shelf (IN MILLIONS OF DOLLARS) prospectus qualified the public offering of our debt securities in each of the provinces of Canada (Canadian Shelf) and the other shelf 2013 $2,044 prospectus (together with a corresponding registration statement filed with the US Securities and Exchange Commission) qualified the public 2012 $2,029 offering of our debt securities in the United States and Ontario (US 2011 $1,973 Shelf). We issued an aggregate of US$2.5 billion of debt securities under the US Shelf during 2013 and, in 2012, we issued an aggregate

60 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 61 6.8x 6.8x 7.1x enior unsecured debt S ROGERS COMMUNICATIONS INC. Corporate credit issuer default rating 2013 ANNUAL REPORT RATIO OF ADJUSTED OPERATING PROFIT TO INTEREST 2013 2012 2011 2013 Standard and Poor’sFitch BBB+ with aMoody’s stable outlook BBB+ with a stable outlook Baa1, BBB+ stable with outlook a stable outlook BBB+ with a stable outlook Baa1, stable outlook Ratings for debtrange instruments from across the AAArepresenting universe the (Standard of highest & qualityPoor’s), composite C Poor’s of rates (Moody’s) and securities and Substantial rated,securities Risk Fitch) rated. (Fitch) to for D or the lowest (Standard quality Aaa of & (Moody’s) Credit ratings are not recommendationsor for sell investors the to rated purchase,investor securities, hold nor suitability. are There they iseffect a for comment no a on assurance given market that periodwithdrawn price of or a entirely time, rating or by will thatwarrant a remain a it. rating in will The rating notPoor’s, ratings Fitch be agency and revised on Moody’s if or are our investment grade it senior ratings. believes debt provided circumstances by Standard & Covenants We are currentlyinstruments. in At December compliance 31,covenants with 2013, in effect all there other were than covenantscredit those no under under facilities financial our (see leverage our bank Terms creditaudited debt and consolidated and letter financial conditions of statements). under Note 18 toCredit the Ratings 2013 Credit ratings provide anissue independent of measure securities, of andlong-term credit can financing quality affect and of our the an lower ability terms the to of credit obtain the ratings short-terminvestment financing. and on If grade, our rating it debt, agencies couldaccess particularly to adversely liquidity a and affect downgrade capital. our below costWe of financing have and engagedService (Moody’s) each and of StandardPoor’s) & Fitch to Poor’s rate Ratings Ratings ourStandard (Fitch), Services public & (Standard debt Poor’s Moody’s & upgraded issues. RCI’s Investors InBBB) senior May with unsecured 2013, debt a to each stable BBB+Baa1 of with (from outlook. Fitch a stable Moody’s and outlook comparably has not equivalent changed rating from last of The year. table below showsfrom the the rating credit agencies as ratings of on December 31, our 2013: borrowings received securitization program (2012 – $0.9 billion). Liquidity We had approximately $4.5 billion2013, of as available compared liquidity to $3.1 at billion• December available 31, at $2.3 December billion 31, in 2012: • cash and cash $2.0 billion equivalents available (2012• under – our $0.2 bank billion) $0.2 credit facility billion (2012 – $2.0 available billion) under the $0.9 billion accounts receivable Bank Credit and Letter ofWe Credit have Facilities $2.5 billion ofthese bank facilities credit is and letter unsecured of andPartnership credit guaranteed facilities. by Each and Rogers of Communications debentures. ranks The terms equally ofparticipating our with bank financial credit all institutions facilityDecember are until of committed 31, it by 2013, our the expires$2.0 there in billion senior were bank July no credit notes 2017. facility$0.5 advances billion and As outstanding and outstanding there under under at were our letters letter our of of credit credit facilities. totalling FINANCIAL CONDITION Capital Resources Our capital resourcescash consist primarily and of cashunder cash equivalents, our flow accounts available from receivablelong-term lines securitization operations, debt. program of and credit, issuances of fundsThis available information is forward-lookingwith and should be “About readUncertainties in conjunction Affecting forward-lookingvarious Our economic, competitive Business” information” andrisks regulatory and assumptions, that factors could and other and causeto disclosure our differ from actual “Risks those about future currently financial expected. and and operatingWe anticipate results generating a netoperations. cash surplus We in expect 2014 from thatsatisfy our we cash our will from cash have funding requirements sufficientdividends in capital 2014, on resources including our to thedebt funding common of shares, and repaymentrequirements, other of taking into maturing financing account long-term ouroperations, activities, opening cash the investing balance, amount cashfacility, activities, from available and our under and accounts our securitizationof other program $2.0 and billion short-term from the bankDecember issuance and, 31, credit 2013, there orof were funds no between long-term Rogers significant and restrictions its debt on subsidiary companies. theWe from flow believe timerequirements by that to issuing additional we debt time.market financing, conditions, which, can depending could At on includeand satisfy restructuring letter our of existing foreseeable credit bankthe facilities, credit terms additional issuing of public our funding equity. accounts or We receivable private may also securitization debt, refinancemarket program amending a conditions or portion issuing and of other existingthat this debt factors. will depending There or on can is be no done. assurance, however, MANAGEMENT’S DISCUSSION AND ANALYSIS

Pension Obligations accrued obligations in the future. See Critical accounting estimates for Our retiree pension plans had a funding deficit of approximately $172 more information. million at December 31, 2013. We have been making special minimum Purchase of Annuities monthly payments in addition to our regular contributions to eliminate From time to time we have made additional lump-sum contributions to the pension liability. During 2013, our funding deficit was reduced by our pension plans, and the pension plans have purchased annuities $162 million. from insurance companies to fund the pension benefit obligations for The special payments, including contributions associated with benefits certain groups of retired employees in the plans. Purchasing the paid from the plans, were approximately $7 million in 2013. We expect annuities relieves us of our primary responsibility for that portion of our total estimated funding requirements to be $96 million in 2014 and the accrued benefit obligations for the retired employees and eliminates to be adjusted annually thereafter, based on various market factors the significant risk associated with the obligations. such as interest rates and expected returns and staffing assumptions. We did not make any additional lump-sum contributions to our pension Changes in factors such as the discount rate, increase in compensation plans in 2013 or 2012, and the pension plans did not purchase and the expected return on plan assets can affect the accrued benefit additional annuities. obligation, pension expense and the deficiency of plan assets over

FINANCIAL RISK MANAGEMENT We normally use three categories of derivative instruments to manage risks related to our business activities:

Categories The risk it manages Types of derivative instruments

Debt Derivatives • Impact of fluctuations in foreign exchange rates on • Cross-currency interest rate exchange agreements principal and interest payments for US denominated • Forward foreign exchange agreements (from time long-term debt to time, as applicable)

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-based • Total return swap agreements compensation expense

We also manage our exposure to fluctuating interest rates and we have All of our Debt Derivatives currently outstanding have been designated fixed the interest rate on 95.3% of our debt including short-term as effective hedges against foreign exchange risk for accounting borrowings at December 31, 2013 (2012 – 100%). purposes as described below and in note 20 to the consolidated financial statements. Debt Derivatives We use cross currency interest exchange agreements (Debt Derivatives), New Debt Derivatives to Hedge Senior Notes Issued In 2013 to hedge the foreign exchange risk on all of the principal and interest US$ Hedging effect obligations of our US dollar denominated senior notes and debentures. US$ Principal/ Fixed Cdn$ At December 31, 2013 we used Debt Derivatives to hedge the foreign notional amount Maturity Coupon hedged Cdn.$ equivalent Effective date (millions) date rate interest rate 1 (millions) exchange risk on 100% of the principal and interest obligations on all March 7, 2013 US$ 500 2023 3.00% 3.60% $ 515 our US dollar denominated debt. We use Debt Derivatives for risk March 7, 2013 US$ 500 2043 4.50% 4.60% $ 515 management purposes only. Subtotal US$ 1,000 $ 1,030 During 2013, we completed Debt Derivatives transactions as follows: • entered into new Debt Derivatives to hedge senior notes issued in October 2, 2013 US$ 850 2023 4.10% 4.59% $ 877 October 2, 2013 US$ 650 2043 5.45% 5.61% $ 671 2013 • terminated existing Debt Derivatives and entered into Debt Subtotal US$ 1,500 $ 1,548

Derivatives with different terms to hedge existing senior notes 1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate. • settled Debt Derivatives related to senior notes that matured during the year.

Terminated and Replaced Existing Debt Derivatives

Terminated Debt Derivatives New Debt Derivatives Hedging effect Fixed Notional Original Cash settlement Derivative New Fixed Cdn$ amount maturity payment amount maturity weighted equivalent Termination date (millions) date (millions) Date entered (millions) date average 1 (millions) 2

Mar 6, 2013 US$ 350 2 2018 Nil Mar 6, 2013 US$ 3502 2038 7.62% $ 356 Sep 27, 2013 US$ 1,075 3,4 2014 – 2015 $ 263 Sep 27, 2013 US$ 1,0753 2014-2015 7.42% $ 1,110

1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate. 2 Converting from a fixed US$ principal amount to a fixed Cdn$ principal amount.

62 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 63 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT from April 2013$1.0341/US$1 through December 2014 at an average rate of Expenditure Derivatives We use foreign currency forwardhedge contracts the (Expenditure Derivatives), foreign to forecasted exchange risk expenditures. onmanagement We purposes the only. notional use amount Expenditure ofIn Derivatives certain 2013, we: for• risk- entered into US$955 million of Expenditure Derivatives• maturing settled US$435 million of Expenditure DerivativesAt for $430 million DecemberDerivatives 31, outstanding 2013, with2014 terms we to to December had 2014 maturity athave ranging an US$900 been average designated from rate as million of January hedges 1.0262/US$, for all of accounting of purposes. which Expenditure Equity Derivatives We use stock-basedhedge compensation the derivatives market price (Equity appreciationshares risk Derivatives), granted of under to the our RCI stock-basedEquity Class compensation Derivatives B programs. for Non-Voting risk-management We purposes use only. In 2013 we enteredNon-Voting into shares Equity Derivatives withEquity for a Derivatives 5.7 weighted have million not RCI averagepurposes, been Class price so designated B of as we hedgescompensation $50.37. record expense for These changes and accounting offset in athe portion their market of price fair the of impact value RCI ofof changes Class as in B a Non-Voting the shares stock-based compensation in programs. the stock-based accrued value compensation liability for our stock-based % % % 6.1 100 100.0 % % % 100.0 11.3 Years 9.2 Years of its Debt Derivatives as hedges % 2 3 1 of US dollar-denominated debt is hedged for accounting purposes compared to on an economic basis. % % Weighted average interest rate on debt 5.5 Weighted average term to maturity Total long-term debtTotal long-term debt at fixed ratesPercent of long-term debt fixed Cdn$ 13,315 Cdn$ 13,315 Cdn$ 11,447 100 Cdn$ 11,447 Hedged with Debt DerivativesHedged exchange ratePercent hedged US$ 6,380 US$ 4,230 1.0447 1.1340 against designated US dollar-denominated100 debt. As a result, on December 31, 2013, 100 Long-term debt includes the effect ofWeighted the average Debt Derivatives. term to2014. maturity excludes US$1.1 billion senior notes due March Pursuant toInstruments: the requirements RecognitionDecember for 31, and hedge 2012, Measurement, RCI accounting accounted on under for 100 IAS December 39, 31, Financial 2013, and 2 3 1 (In millions of dollars)US dollar denominated long-term debt US$ 6,380 December 31, 2013 December 31, 2012 US$ 4,230 Debt Derivatives Settled at Maturity In June 2013, whenmillion) we repaid senior and notes boughtsettled due our at US 2013, maturity, $350 the million resultingmillion. associated ($356 in Debt total Derivatives payments were of approximatelyAt $104 Decemberdenominated 31, senior 2013, noteshedged using and Debt we Derivatives. debentures, had all of US$6.4 which billion had been of US dollar The March 6, 2013the termination US is $350 related toDerivatives million Debt senior Derivatives that notes hedging designated due were as 2038 effective terminated (2038original hedges Notes). term on of for The 10 accounting Debt years Marchhedge to purposes August the 6, 15, and 2018. foreign had Theinterest 2013 new obligations an exchange Debt on Derivatives were the risk 2038on associated Notes not to the with their respective maturity theeffective at hedges dates market principal for rates accounting of purposes. and theThe transactions September and 27, arehedging 2013 senior designated notes termination as scheduled tofixed is mature foreign related in exchange 2014 rate to was andAll changed 2015. Debt other for Only Derivatives terms the the new arereplaced. Debt the Derivatives. same as BeforeSeptember the 27, 2013, terminated changes the Debt incomprehensive Derivatives their income they fair and Debt value were were periodicallyto recorded reclassified in offset Derivatives to other foreign net income modify exchange interest were gains expense to or itsthe hedged losses terminated balance amount. on On in the the the termination hedging on a date, reserve related related debt to $10 these or Debtexchanges Derivatives million to was of loss. interestremaining $1 and life will of million the benet of related of recorded debt this income securities. in taxes Theuntil net related such remaining of time $8 income $1 as to million, the million, over related future will debt the is remain settled. periodic in the hedging reserve Amount of long-term debt at fixed rates MANAGEMENT’S DISCUSSION AND ANALYSIS

Mark-to-Market Value Adjusted Net Debt We record our derivatives using an estimated credit-adjusted, mark-to- We use adjusted net debt to conduct valuation-related analysis and market valuation, in accordance with IFRS. The estimated credit- make capital structure related decisions. Adjusted net debt includes adjusted values of the derivatives are subject to changes in credit long-term debt, net debt derivatives liabilities (assets), short-term spreads between us and our counterparties. The table below shows the borrowings and cash and cash equivalents. net asset of our derivative instruments at December 31, 2013: Years ended December 31 December 31, 2013 (In millions of dollars) 2013 2012 (In millions of dollars, except US$ Exchange Cdn$ Fair Long-term debt 1,2 $ 13,436 $ 10,858 exchange rates) notional rate notional value Net Debt Derivatives liabilities (assets) 2 (51) 524 Debt Derivatives accounted for as cash Short-term borrowings 650 — flow hedges: Cash and cash equivalents (2,301) (213) As assets $ 4,250 1.0285 $ 4,371 $ 184 3 As liabilities 2,130 1.0769 2,294 (133) Adjusted net debt $ 11,734 $ 11,169 Net mark-to-market asset Debt 1 Before deducting any decrease in fair value arising from purchase accounting and Derivatives 51 deferred transaction costs. 2 Includes current and long-term portions. Equity Derivative not accounted for 3 Adjusted net debt is a non-GAAP measure and should not be considered as a as hedges: substitute or alternative for GAAP measures. This is not a defined term under IFRS, As liabilities (13) and does not have a standard meaning, so may not be a reliable way to compare us Expenditure Derivatives accounted for to other companies. See “Non-GAAP Measures” for information about this measure, as cash flow hedges: including how we calculate it. As assets 900 1.0262 923 37 Net mark-to-market asset $ 75

64 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 65 519 522 2012 (in millions) $1.74 $1.58 $1.42 Dividends paid 515 518 2013 Years ended December 31 Dividend per share ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT ANNUALIZED DIVIDENDS PER SHARE AT YEAR END DIVIDENDS PER SHARE ANNUALIZED 2013 2012 2011 ($) We usecalculate the earnings weighted perinformation. average share. number See of “Non-GAAP sharesEnd Measures” of period for outstanding weightedoutstanding average more number to of shares (Number of shares outstanding in millions) Basic weighted average number of sharesDiluted outstanding weighted average number of shares outstanding 2012 8,734,028 4,638,496 112,462,014 402,788,156 515,250,170 2013 4,066,698 6,368,403 402,281,178 514,743,178 112,462,000 hares S 1 Voting shares Holders of ourattend Class shareholder B meetings; however, Non-Voting theyexcept are shares not as are entitled to required entitled vote bypurchase at to outstanding these law receive Class meetings or A notice Voting stipulatedlaw of shares, by or there and stock is our to no constating exchanges. requirementNon-Voting documents If under shares, that applicable an and an offer there offerour be is is constating made no made documents. for If other to the an protectionoffer outstanding offer for available is Class the to made B Class shareholders to Athe purchase under Voting holders both of shares classes Class may of B be Non-Voting shares, made shares. the on different terms than the offer to Outstanding options exercisable Class B Non-Voting Total common shares Options to purchase Class B Non- Outstanding options 1 At December 31 shares outstanding Class A Voting Outstanding Common Record dateMarch 14, 2014June 13, 2014September 12, 2014December 11, 2014 Payment date April 4, 2014 October 3, 2014 July 4, 2014 January 2, 2015 We expect that the recordof and dividends payment to dates for beeach the as quarter 2014 at follows, declaration their subject sole discretion: to the declaration by our Board The table below shows when dividends have been declared andDeclaration paid date on both classes of shares over the past two years: Record date Payment date February 21, 2012April 25, 2012August 15, 2012October 24, 2012February 14, 2013April 23, 2013August 15, 2013October March 19, 23, 2012 2013 June 15, September 2012 14, 2012 December 14, 2012 March 15, 2013 June 14, September 2013 13, 2013 April December 2, 13, 2012 2013 October 3, 2012 January 2, 2013 July 3, 2012 April 2, 2013 October 2, 2013 January 2, 2014 July 3, 2013 $0.395 $0.395 $0.395 $0.395 $0.435 $207 $0.435 $204 $0.435 $204 $0.435 $205 $224 $224 $224 $224 DIVIDENDS AND SHARE INFORMATION Dividends In February 2014,dividend the Board rate approved toshare, an $1.83 a increase per dividend in increase Classper the to A be annualized share. paid Voting individend In and quarterly rate Class amounts from February $1.58 of B to $0.4575 Voting 2013 $1.74 Non-Voting per share. the Class A QuarterlyBoard. Board Voting dividends and Class increased are B Non- only the paid annualized as declared by our Common shares The tableDecember 31, 2013 below and 2012. showsIn 2013, our we purchased acancellation total outstanding of 546,674 Class according B commonapproximately Non-Voting shares for shares to $22consolidated financial million. at our statements for more See information. normal Note course 23 issuer to our bid 2013 for audited MANAGEMENT’S DISCUSSION AND ANALYSIS

COMMITMENTS AND OTHER CONTRACTUAL OBLIGATIONS

Contractual Obligations The table below shows our material obligations under firm contractual arrangements as at December 31, 2013. See Notes 17, 19 and 26 to our 2013 audited consolidated financial statements for more information.

Less than 1-3 4-5 After (In millions of dollars) 1 Year Years Years 5 Years Total

Long-term debt 1 $ 1,170 $ 1,883 $ 1,989 $ 8,394 $ 13,436 Debt derivative instruments 2 13 22 (54) (102) (121) Operating leases 136 194 95 95 520 Player contracts 136 132 33 7 308 Purchase obligations 3 1,670 1,019 149 160 2,998 Program rights 699 1,018 974 3,471 6,162 Pension obligations 4 96 – – – 96 Other long-term liabilities – 14 18 6 38

Total $ 3,920 $ 4,282 $ 3,204 $ 12,031 $ 23,437

1 Principal obligations of long-term debt (including current portion) due at maturity. 2 Net (asset) disbursements due at maturity. US dollar amounts have been translated into Canadian dollars at the Bank of Canada year-end rate. 3 Purchase obligations are the contractual obligations under service, product and handset contracts that we have committed to for at least the next five years. 4 Expected contributions to our pension plans in 2014. Contributions for the year ended December 31, 2015 and beyond cannot be reasonably estimated because they depend on future economic conditions and plan performance and may be affected by future government legislation.

OFF-BALANCE SHEET ARRANGEMENTS

Guarantees Operating Leases As a regular part of our business, we enter into agreements that We have entered into operating leases for the rental of premises, provide for indemnification and guarantees to counterparties in distribution facilities, equipment and wireless towers and other transactions involving business sale and business combination contracts. Terminating any of these lease agreements would not have a agreements, sales of services and purchases and development of assets. material adverse effect on us as a whole. See “Commitments and Other Due to the nature of these indemnifications, we are unable to make a Contractual obligations” and Note 27 to our 2013 audited consolidated reasonable estimate of the maximum potential amount we could be financial statements for quantification and more information. required to pay counterparties. Historically, we have not made any significant payment under these indemnifications or guarantees. See Note 26 to our 2013 audited consolidated financial statements for more information.

66 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 67 (Radiocommunication Act) and ROGERS COMMUNICATIONS INC. of the voting shares and the related votes of the of the voting shares and the related votes of a holding % % 2013 ANNUAL REPORT Radiocommunication Act (Canada) operating licensee company may beindirectly owned by and non-Canadians. controlled directly or systems in Canada. company that has a subsidiaryBroadcasting operating Act, company and licenced under the pectrum Licences can and do, however, affectoffer these the services. terms and conditions under which we S Industry Canada sets technical standardsthe for telecommunications under the Telecommunications Act. It licences• and oversees: the technical aspects• of the operation the of frequency-related operations radio• of and cable television television awarding stations networks and supervising spectrum for wirelessRoyalties communications The Copyrightadministration Board of of copyrightroyalties Canada to royalties be in paid (Copyright forcopyright Canada the Board) use tariff and of oversees certain establishes royaltiesincluding copyrighted cable, works. the the radio, that It television sets and Canadiancollectives. the specialty services, broadcasting pay to undertakings, copyright Billing and Contracts The Quebec Consumer2010, introduced Protection new ActInternet provisions service amendments, applicable contracts. effective These to amendmentscontent wireless, June include of wireline new such rules and contracts, onfees the the that can determination be of chargedthe the to cancellation customers, early and the renewal cancellation use rightsalso of of security the established deposits consumers. new and The amendments provisionsdisclosure of on related costs. the sale ofAmendments prepaid to cards the and Manitoba the September Consumer Protection 2012 Act and tookProtection parallel effect Act. in the Similar changes2012 legislation to also in the came Newfoundland QuebecScotia. into and Consumer A effect Labrador private in and member’sintroduced September in has bill New Brunswick. proposing been similar tabled legislation inIn has Nova April been 2012,introducing the Ontario legislation governmentlegislation addressing announced seeks wireless that to ensure it billsand that would spell contracts and out be are which written contracts.result services in come in plain The with a language the higherbefore basic bill. they fee It renew and requires or which providers amendon would a to contract. obtain the The consent legislation in alsodepending cost writing seeks a of on cap legislation, cancelling the which a circumstances wouldmonths fixed-term affect of after new contract being the contracts, passedthat that would are and contract. amended, would would take renewed also The or effectwas vary extended cover passed six after into existing proposed law that agreements in date. October The 2013. legislation See also “CRTC Wireless Code” section under Wireless Regulation. Foreign Ownership and Control Non-Canadians can own and control• directly or indirectly: up to 33.3 •upto20 Broadcasting Act (Canada) Telecommunications Act (Canada) Minister of Industry (Canada) (together, Industry Canada) (Telecommunications Act) and the (Broadcasting Act). distribute Regulation in Our Industry Our business, except forregulated the by two non-broadcasting groups: operations of• Media, the is Canadian Federal Department• of the Industry on CRTC, behalf of under the the Canadian Broadcasting Operations Our Canadian broadcasting operationssystems, – including radio our and cablelicenced television (or television operated under stations,CRTC an under and exemption the order) Broadcasting specialty Act. and regulated services byThe the – CRTC is are responsible forCanadian regulating and supervising broadcasting all aspectsTelecommunications of system. the Act Itcarriers, for including: is the also• regulation Wireless’ of responsible mobile voice• telecommunications and under data Cable’s operations Internet the and telephone services. Our cable andprice telecommunications retail regulation, servicescompetition for are because these not servicesinterests the provided subject by of to other users, CRTC carriers so to has protect believes the forborne from there regulating them. is Regulations enough Regulation relates to the following,• among other things: wireless spectrum and• broadcasting licensing competition • the cable television• programming wireless services and wireline• interconnection we agreements rates we must, can• charge third and parties the for resale can, access of• to our our networks network roaming on our• networks ownership and operation• of our communications our systems ability to acquire an interestRegulatory in changes other communications or systems. decisionsresults of can operations. adversely affect our consolidated Our costs of providingcomply services may with increase industryprotection from time or to concerns legislative timeinfringement, as initiatives unsolicited we or to commercialaccess. address e-mail, Internet-related consumer cybercrime and issuesGenerally, lawful our like spectrumspecified and term copyright broadcast andlicences. are licences The regulators subject aretime, can to granted and modify they conditions for can these decide fordo licensing a not maintaining to conditions not renew at these comply arevoked, any licence or with when we it may the be expires. fined. If conditions, we The a licences licence have conditions maycomply that be require with us, forfeited amongstlegislation, or other and Canadian we things, are to ownership currentlythe in requirements, we compliance restrictions would with be them.include subject If of losing to a we various licence violate penalties in the and extreme it cases. could applicable Cable, wirelesstransferred without and regulatory approval. broadcasting licences generally cannot be MANAGEMENT’S DISCUSSION AND ANALYSIS

Combined, these limits can enable effective foreign control of up to • To encourage rural deployments, single carriers who win two paired 46.7%. blocks, or two carriers who share their two paired blocks, are required to use their 700 MHz spectrum to provide coverage to 90% The chief executive officer and 80% of the members of the Board of of their HSPA+ territory within five years and 97% within seven Directors of the operating licensee must be resident Canadians. There years. Industry Canada will use Tier 2 licence areas for the 700Mhz are no restrictions on the number of non-voting shares that may be auction. These are 14 large service areas covering all of Canada, and held by non-Canadians at either the holding-company or licensee- are generally the same size as individual provinces. company level. Neither the Canadian carrier nor its parent may be otherwise controlled in fact by non-Canadians. Subject to appeal to the In March 2013, Industry Canada released Licensing Framework for federal Cabinet, the CRTC has the jurisdiction to determine as a Mobile Broadband Services (MBS) – 700 MHz Band. Key things to note: question of fact whether a given licensee is controlled by non- • Industry Canada confirmed that, for the most part, the policy and Canadians. technical framework to auction spectrum in the 700 MHz band are the same as proposed in its March 14, 2012 consultation document. Pursuant to the Telecommunications Act and associated regulations, the • The auction will use a combinatorial clock auction (CCA) format, same rules also apply to Canadian telecommunications carriers such as where bids are made for packages of spectrum licences, rather than Wireless, except that there is no requirement that the chief executive the simultaneous multiple round auction (SMRA) format used in the officer be a resident Canadian. We believe we are in compliance with past, where bids are made on individual licences. the foregoing foreign ownership and control requirements. • Associated entities can apply to bid separately and to have the On June 29, 2012, Bill C-38 amending the Telecommunications Act auction cap applied individually. These bidders must demonstrate passed into law. The amendments exempt telecommunications that they “intend to separately and actively provide services” within a companies with less than 10% of total Canadian telecommunications given licence area for the duration of the spectrum caps (five years market measured by revenue from foreign investment restrictions. after licensing). Industry Canada has determined that no registered Companies that are successful in growing their market shares in excess bidders were associated with each other. of 10% of total Canadian telecommunications market revenues other The auction was initially set to begin on November 19, 2013. In than by way of merger or acquisitions will continue to be exempt from June 2013, Industry Canada moved the application deadline to the restrictions. September 17, 2013, and the auction start to January 14, 2014.

WIRELESS In October 2013, Industry Canada released its consultation paper, seeking comments on licencing considerations related to auction Consultation on the Renewal of Cellular and Personal format, rules and processes, as well as on conditions of licence for Communications Services (PCS) Spectrum Licences spectrum in the 2500–2690 MHz band. The final policy was released on In March 2011, Industry Canada released its decisions about the January 10, 2014. renewal process for cellular and PCS licences that began expiring at that time. Key things to note: Key things to note about 2500–2690 MHz spectrum policy: • At the end of the current licence term, new cellular and PCS licences • Industry Canada adopted a spectrum cap (not an auction cap like in with a 20-year term will be issued to licensees that are in compliance the 700 MHz auction). No carrier participating in the auction may with all licence conditions. possess more than 40 MHz of 2500–2690 MHz spectrum. Rogers is • The previously existing annual fee of $0.0351 per MHz per grandfathered with respect to our holdings in those situations where population of the licenced area will continue to apply to all cellular we already hold more than 40 MHz of this spectrum. We will not be and PCS licences, including those initially assigned by auction. The required to return spectrum. Minister of Industry Canada may review and amend the fees during • There is no special roll-out requirement for 2500–2690 MHz the licence term after further consultation with licensees. spectrum. A general roll-out rule will be determined in the policy. • A determination regarding existing research and development • The auction is set to commence on April 15, 2015. conditions of licence was not released at that time and will be • The 2500MHz auction will use Tier 3 licence areas. released separately. A decision has not been made to date, and until such a time, the current conditions of licence remain in effect. Roaming and Tower Sharing Policy In March 2013, Industry Canada released Revised Frameworks for Consultation on a Policy and Technical Framework for the Mandatory Roaming and Antenna Tower and Site Sharing, concluding a 700Mhz and 2500-2690Mhz Band and Aspects Related to consultation initiated in 2012. It sets out the current rules for roaming Commercial Mobile Spectrum and tower and site sharing. Its key terms are: In March 2012, Industry Canada released its policy and technical • All holders of spectrum licences, radio licences and broadcasting framework for the auction of spectrum in the 700 MHz and 2500–2690 certificates must share towers and antenna sites, where technically MHz spectrum bands. Key things to note: feasible, at commercial rates. • Industry Canada adopted an auction cap for the 700 MHZ (not a set- • All licensees were permitted to request roaming from other licensees aside like in the 2008 Advanced Wireless Services (AWS) spectrum at commercial rates. auction). There are four blocks of spectrum that are considered • The timeframe for negotiating agreements is 60 days, after which “prime”. Large domestic wireless carriers are restricted to a single arbitration according to Industry Canada arbitration rules will begin. block of prime spectrum each, while all other carriers are restricted to • The roaming capabilities must provide connectivity for digital voice two blocks. Rogers, Bell and Telus are considered large carriers and data services regardless of the spectrum band or underlying nationally. SaskTel is considered a large carrier in , and technology used. MTS is considered a large carrier in Manitoba.

68 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 69 (Telecom Notice of Wholesale mobile wireless roaming ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT exclusive tobroadcast their on mobile television,events, or including must Internet hockey bereasonable subscribers. terms. games made Any and available program other to live competitorsmobile customers under provided it fairportal is or and produced a mobile specifically device. for an Internet ensure all distributors, broadcasters andnegotiate online in programming good services faith. Toof protect Canadians a from losingcontinue availability television to service providecontinue the to during offer service it to in negotiations, their subscribers. question broadcasters andthey distributors must have must providedthat consumers with they more canmodels. flexibility In in subscribe the our tomarket services April through, 2012 trial for report,additional we programming we flexibility example, to conducted presented consumers. pick-and-pay the in results London, of a Ontario that provides overnment Announcement Regarding Roaming Rates and CABLE The CRTC considersbecause we our own or Cable control bothIt business programming sets and out distribution to the services. rulessector be for in its vertically vertically Broadcasting integrated Regulatory companies integrated Policy• in CRTC the 2011-601. Does The broadcast policy: not allow companies to make their television programs • Allows companies to offer exclusive programming to their Internet or • Adopts a code of conduct to prevent anti-competitive behaviour and • Required vertically integrated entities to report by April 2012 on how provide the Commission with informationto on assess wireless its roaming in impactindustry and order on the choices the available competitiveness to Canadians”. ofFollowing the the Canadian fact-finding wireless exercise,issued on a December call 12, forin 2013, comments Canada entitled the – CRTC Unjust discrimination/undueConsultation preference CRTC 2013-685). Following itsto earlier fact-finding exercise assessarrangements on the the competitiveness ofthe the Commission impact Canadian initiated wireless industry, this proceeding ofa to question consider of whether fact, wholesale or there not,preference as is with a respect mobile situation to of wholesaleThe unjust roaming wireless discrimination arrangements Commission or in noted Canada. undue in roaming paid particular by Canadian that carriers the werecarriers. wholesale higher In roaming than the rates addition, ratesproceeding paid the in by American Commission earlywholesale intends 2014 mobile to to wireless further roaming initiateon the market examine a competitiveness in of matters the separate Canada related industry. and to the the impact G Enforcement In December,introduce the legislation in federal 2014.would government cap Firstly, wholesale it announced domestic wouldthe roaming enact that rates rates a at the legislation it agovernment carrier rate that charges would no would higher its amendTelecommunications than own Act the retail to Radio-communications customers. permitimpose Secondly, Industry Act monetary Canada the and penalties andregulations. the the in Details CRTC order of to released. the to announced enforce legislation telecommunications have not yet been S contracts, no matter ubordinate Licensing all Framework Relating to S . The Framework lays out the criteria pectrum Licences S when they werecapture three-year entered contracts entered into, intoDecember between which June 2, 3, means 2012 2013.between and it June Anyone will 3, enteringentitled retroactively 2012 into to and a December cancelsubsidy 2, three-year their they 2013 contract received. agreement mayauthority We without to therefore do paying do be not this,and back believe Sasktel and filed the on that an July full appeal theThe of 2, CRTC Court this 2013, retroactivity has has Rogers, provision2014. the granted of Bell, the Telus, leave code. MTS to appeal and will hear the case in not allow anyreduced that competition. result Decisions will in beand “undue will made be spectrum on issued a concentration” publicly case-by-case to and basis increase transparency. agreement that could lead towill a review prospective transfer. the Industry agreement Canada arise as from though it has the been licence made. transfer that could Framework was released, which meanshave the spectrum with agreements we ShawFramework until and 2014. Quebecor will not be reviewed under the including contractrequirements and contract term summaries.device subsidies It and also early length, cancellation lays fees. out the roaming rulesonly for charge caps, thereceived, which outstanding unlocking goes down balance bymore an of than equal amount 24 the every months. month device Thislength over two effectively no years. subsidy makes the they maximum contract December 2, 2013. roamer with a servicesubscribers, or that to the provide carrier athat roamer does the with not roamer’s a network provide service,not carrier or to require does level seamless its communications not of handover. own service, provide. The policy does CRTC Request for Information RegardingWireless Domestic Roaming and U In August 2013, all CanadianCRTC wireless asking carriers that received information a aboutand letter their from retail the and US wholesale domestic September 27, roaming 2013. The rates, Commission stated revenues “The data requested and will agreements be filed by Industry Canada willreviews consider spectrum and licence transfers, thecould including processes arise prospective it from transfers purchase that willthings to or use note: sale when options• it and other Industry agreements. Canada Key will review all spectrum transfer requests, and will • Licensees must ask for a review within 15 days of entering into any • This timing does not apply to agreements madeCRTC before Wireless Code the In June 2013, theKey CRTC things issued to note: its wireless• consumer code The of code conduct. establishes several new obligations on wireless carriers, • Under the code, if a customer cancels a contract early, carriers can • The code applies to• all As contracts of entered June 3, into 2015, or the code renewed will after apply to of In JuneTransfers, 2013, Divisions and Industry Subordinate LicensingCommercial of Canada Mobile Spectrum Licences released Spectrum for • In addition, a host network carrier is neither required to provide a Consultation on Transfers, Divisions and MANAGEMENT’S DISCUSSION AND ANALYSIS

Television Services Distribution Following the CRTC’s approval on May 1, 2013, we closed the portion On October 24, 2013, the CRTC launched a broad-based public of the multi-part agreement with Shaw to buy 100% of Mountain consultation on the subject of television. The consultation covered three Cable, and advanced $398 million, according to the terms of the broad themes, asking what consumers think about: agreement. We will require Industry Canada approval to close the • the television programming available to them spectrum portion of the transaction. • the reception of television programming from service providers and other sources New Media Proceeding Follow-Up • whether they have enough information to make informed choices In February 2012, the Supreme Court of Canada upheld a lower court and seek solutions if they are not satisfied. decision that ISPs cannot be regulated under the Broadcasting Act, related to the CRTC’s authority to levy a tax from ISPs like Rogers to Comments were due on November 22, 2013. On November 14, 2013, fund the creation and promotion of Canadian “webisodes”. The result the Government ordered the CRTC to report by April 30, 2014 on the is that ISPs, when offering connectivity to television and movie websites, steps it will take to maximize Canadians’ ability to subscribe to pay and are not considered to be acting as broadcasters and cannot be specialty services on a pick-and-pay basis. The Government asked that regulated under the Broadcasting Act. the report: • consider the effect on consumers and their ability to access Review of Broadcasting Regulations affordable discretionary TV services In November 2012, the Supreme Court ruled that the CRTC did • consider the effect on industry participants (i.e. programmers, not have the authority to implement the value for signal regime distributors and producers) outlined in Broadcasting Decision 2010-167, consistent with our • ensure that the majority of services received by Canadians remain recommendations. As a result, broadcasters will continue to charge Canadian and that distributors continue to give priority to the rates to broadcasting distribution undertakings under the existing carriage of Canadian services. regulatory framework. The CRTC is expected to launch a regulatory proceeding to explore new approaches at the same time it issues its report to the Government. A MEDIA public hearing is expected to be held in September 2014 and a decision Licence Renewals expected by early 2015. The Consultation will likely look at the The CRTC considers group-based (conventional and discretionary regulatory treatment of over-the-top video services and the evolution of specialty) licence renewal applications for major media companies. The competitive services within the regulated system. Rogers group includes the City and OMNI conventional television stations and specialty channels G4 Canada, Outdoor Life Network, The CRTC Review of Wholesale Internet Service Pricing and Usage- Biography Channel (Canada) and FX (Canada). Based Billing In February 2011, the CRTC initiated a proceeding to review its previous In July 2011, the CRTC renewed the group’s licence for three years, decisions about the pricing of wholesale Internet services, where expiring on August 31, 2014. The terms of the renewal recognize the reselling ISPs would have to pay additional charges when their end group’s differences from the three other large English-language users exceeded specific bandwidth caps. Canadian broadcast groups (Bell Media, Corus Entertainment and Shaw Media). In November 2011, the CRTC released Telecom Regulatory Policy 2011- 703, rejecting additional wholesale charges based on specific end-user Distant Signals traffic volumes. Instead, it put in place a monthly usage-based Conventional television stations have to agree to the carriage of their wholesale fee based on the capacity of the facility connecting the local signals into distant markets. BDUs that want to carry time-shifted facilities-based wholesaler and the reselling ISP. The new rate structure, US signals must therefore get the consent of each of the three large which came into effect in February 2012, includes a usage charge, a English-language networks besides CBC (CTV, Global and City) to carry fixed monthly access fee per end user of the reselling ISP and one-time their signals in those time zones. We are currently negotiating with installation and maintenance fees. In February 2013, the CRTC released various distributors regarding carriage of distant signals. its decisions on seven applications to review and vary the November 2011 CRTC decisions about regulated wholesale Internet service prices. Regulatory Approval of Recent Acquisitions The decisions increased our wholesale rates, but the increase was not as On April 30, 2013, we acquired control of theScore after receiving final high as we had asked for. regulatory approval from the CRTC. theScore, which we have rebranded to Sportsnet 360, was Canada’s third largest specialty sports CRTC Review of Wholesale Telecommunications Services channel. As part of the transaction, we received a 10% interest in Score In October 2013, the CRTC initiated its planned review of the Media’s digital media assets, which were spun out into a separate entity telecommunications essential services rulings it released in March 2008. called Score Digital. The review will culminate with a public hearing expected in November 2014.

Regulatory Approval of Recent Acquisition In January 2013, we announced a multi-part strategic transaction with Shaw to acquire Mountain Cable (Shaw’s cable system in Hamilton, Ontario), and to secure an option to purchase Shaw’s Advanced Wireless Services spectrum holdings in 2014. As part of the agreement, we sold our one-third equity interest in the TVtropolis special channel to Shaw.

70 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 71 – assists the Board so it has ROGERS COMMUNICATIONS INC. – assists the Board in monitoring, – identifies prospective candidates to serve – assists the Board in discharging its – oversees the administration of our retiree – reviews our investment strategies and general 2013 ANNUAL REPORT Corporate Governance Committee appropriate systemsresponsibilities. This and committeepractices and develops recommends procedures them governance tothe the policies board for for and approval, Board andperformance. leads carrying in its outNominating periodic its Committee reviewon our Board. of Nominated directorsat are board either a elected by and meeting, shareholders recommends nominees or committee for appointedcommittee each chair. by Board the committee, including Board.Human each The Resources committee Committee reviewing also and approvingpractices. It compensation is and alsoof responsible benefit for recommending senior policies thesuccession and compensation plan. management andExecutive monitoring Committee theresponsibilities between senior meetings, includingspecifically executive to designated act and authorized into at such consider a areas matters preceding that as board may meeting arise from timeFinance to time. Committee debt and equity structure and reports on themPension to the Board. Committee pension plansprovisions of and the plans. reviews the investment performance and governance rulesgovernance that practices as a apply non-US-based issuer listed to on the NYSE. US-based companies and our • • • • • • You can find moreRelations details section of about our governance website at (rogers.com/governance),• including: Rogers a in complete the statement• of Investor our corporate our governance codes practices of• conduct and ethics full committee charters • director biographies • a summary of the differences between the NYSE corporate of our equity % – reviews our accounting policies and practices, udit Committee the integrity of our financialthe reporting financial processes and statements proceduresto and and the other public.compliance relevant disclosure It with for also legalreporting, release and assists and assesses our the regulatorysystems internal accounting Board requirements and and financial in for theinternal control and its financial external qualifications, auditors. oversight independence of and our work of our overnance Best Practices Board Oversight The Boardcommittees delegates to ensure certain proper oversight and responsibilities accountability: •A to its seven standing G The majority ofmany our best directors practices for are effective governance: • independent and Separation of we CEO have• and chairman adopted Independent roles lead director • Formal corporate governance• policy and Code charters of business• conduct and whistleblower Director hotline share ownership• guidelines Board and committee• in camera discussions Annual reviews of• Board and director Audit performance Committee meetings• with internal Orientation and external programs for auditors • new directors Regular Board education• sessions Committee authority to• retain independent advisors Director material relationship standards. We comply with corporateCanadian governance public guidelines company and listedissuer listed standards on on as the the NYSE a TSX in the and US. as a foreign private as of December 31, 2013. Our Board offamily, Directors and is another madebusiness 13 up leaders directors of who in fourcommitted to bring members North strong oversight a of America. andvalue. mix the the All ongoing Rogers of The creation of of experience shareholder governance, Board as our and as directorsbenchmarks continually a are reviews firmly whole themlegislation. its is against The governance committedeffective Board practices acknowledged to and believes and that sound leaders thereplace. that are corporate Rogers’ and appropriate structures governance and evolving system procedures in is Rogers is apride family-founded, in family-controlled our company,governance proactive and and we structure disciplined take shareholders. approach and to ensuring practices that instil our With the the passing in confidenceTed December 2008 Rogers, of of his our voting foundertrust our control and whose of previous beneficiaries Rogers CEO, areholds Communications members passed voting of to the a controlsuccessive Rogers of family. generations The Rogers of trust substantial Communications the stakeholders, and for Rogers owned the family. approximately 28 benefit The of Rogers family are Governance and Risk Management GOVERNANCE AT ROGERS MANAGEMENT’S DISCUSSION AND ANALYSIS

CHAIR MEMBER BOARD OF DIRECTORS AND ITS COMMITTEES

AS OF FEBRUARY 11, 2014 AUDIT CORPORATE NOMINATING HUMAN EXECUTIVE FINANCEPENSION GOVERNANCE RESOURCES

AlanD.Horn, CPA, CA

Peter C. Godsoe, O.C., O. Ont.

C. William D. Birchall

Stephen A. Burch

John H. Clappison, FCPA, FCA

ThomasI.Hull

Guy Laurence

Philip B. Lind, CM

John A. MacDonald

Isabelle Marcoux

The Hon. David R. Peterson, PC, QC

Edward S. Rogers

Loretta A. Rogers

Martha L. Rogers

Melinda M. Rogers

Dr. Charles Sirois

John H. Tory, O. Ont.

RISK MANAGEMENT

We are committed to continually strengthening our risk management Enterprise Risk Management capabilities to protect and enhance shareholder value. The purpose of Our Enterprise Risk Management program seeks to ensure we identify, risk management is not to eliminate risk but to optimize trade-offs assess, manage, monitor and communicate risk consistently throughout between risk and return to maximize value to the organization. the company and that we manage risk in a way that supports our strategic and business goals. This program supports the Audit Risk Governance Committee and the Board’s responsibility for risk by facilitating a formal The Board has overall responsibility for risk governance and oversees strategic risk assessment process. management in identifying the principal risks we face in our business and implementing appropriate risk assessment processes to manage We carry out an annual strategic risk assessment to identify our these risks. It delegates certain duties to the Audit Committee. principal risks and their potential impact on our ability to achieve our strategic plans. This assessment includes reviewing risk reports, audit The Audit Committee discusses risk policies with management and the reports and industry benchmarks, and interviewing key risk owners. We Board, and assists the Board in overseeing our compliance with legal also conduct a formal survey every two years to get management and regulatory requirements. feedback on the key risks facing the organization and identify emerging The Audit Committee also reviews: risks. Then we prioritize the risks using standard risk assessment criteria. • the adequacy of the internal controls that have been adopted to Enterprise Risk Management reports the results of the strategic risk safeguard assets from loss and unauthorized use, to prevent, deter assessment to the Executive Leadership Team and the Audit Committee. and detect fraud and to verify the accuracy of the financial records The Executive Leadership Team is responsible for approving our • the processes for identifying, assessing and managing risks enterprise risk policies and for identifying and assessing the key risks • our exposure to major risks and trends and management’s that affect our ability to meet our corporate objectives. It is also implementation of risk policies and procedures to monitor and responsible for monitoring these key risks and our action plans to control these exposures mitigate these risks. • our business continuity and disaster recovery plans • any special audit steps adopted due to material weaknesses or Management develops risk management plans. They are responsible for significant deficiencies that may be identified identifying, assessing, managing and monitoring risks in the business • other risk management matters from time to time as determined by units impacting our strategic and business plans, and reporting to the the Committee or directed by the Board. Executive Leadership Team and Enterprise Risk Management.

72 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 73 ngly sport chaser, ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Our Enterprise Risk Managementexpertise methodology and of policies rely ouropportunities, on and the management implement risk and mitigation strategies employees as required. to identify risks and

ARTS & & ARTS ETHICAL ETHICAL CULTURE SUPPLY CHAIN SUPPLY & FOOD BANKS LOCAL SHELTERS of our net earnings before tax annually to charities and other non-profit organizations %

GOOD ECONOMIC to packaging, usage and end-of-life quality, social responsibility and environmental respect work every day programs committing at least 1 supports educational opportunities for at-risk Canadian youth with over 37,000 suppliers across Canada and internationally of corporate social responsibility throughout our supply chain, including compliance with the Rogers Supplier Code of Conduct paper use and divert materials from our operations from landfills GOVERNANCE • focusing on ensuring our products and services meet the expectations of our customer and communities, and our own criteria for • establishing Rogers as a place where employees• feel proud, look providing forward leading to making workplace a initiatives, contribution and from have chance far-reaching to benefits do their to best customized training, development and personal assistance • investing in many worthy causes to help create vibrant, healthy, talent-rich communities. Our flagship program, Rogers Youth Fund, • paying special attention to sound sourcing, production and delivery of supplier products and services by setting strong expectations • measuring our carbon footprint every year• and implementing focusing on a building wide environmental range awareness and of engagement initiatives among our to employees, increase customers our and communities energy efficiency, reduce RESPONSIBILITY CONTRIBUTIONS ENVIRONMENTAL

ocial Responsibility S YOUTH EMPLOYEE EDUCATION EXPERIENCE INVESTMENT COMMUNITY See our annual Corporatecommunity contributions Social and performance. Responsibility report (available on our website rogers.com/csr) for more about our social, environmental and Product stewardship • looking at health, safety, the environment and other issues across the product life cycle – from design, manufacturing and tran Corporate Being a responsible corporate citizen and sustainable business are part of good governance. We believe corporate social responsibility is increasi Annually, Internalcompletion Audit of the facilitates financialpotential fraud fraud in and risk our assessmentdocumented financial and to monitors verified statements controls identify and to areas Management’s mitigate to that of make risk. sure we have important to our growth, competitiveto advantage a and better engagement world. with key stakeholders, andWe we focus strive on to five be general a areas: sustainable business and contribute Employee engagement • working hard to create a culture of employee engagement and encourage and respect diversity Community investment • promoting the principles of corporate citizenship and benchmarks for community investment established by Imagine Canada by Environmental responsibility • proactively managing the environmental aspects of our business Ethical supply chain • reinforcing the importance of an ethical supply chain because it is critical to our reputation and success. Rogers is a large pur MANAGEMENT’S DISCUSSION AND ANALYSIS

RISKS AND UNCERTAINTIES AFFECTING OUR BUSINESS This section describes the principal risks and uncertainties that could TECHNOLOGY RISKS have a material adverse effect on our business and financial results. Competing Technologies GENERAL RISKS Several technologies may affect the way our services are delivered, including: Economic Conditions • broadband Our businesses are affected by general economic conditions and • IP-based voice, data and video delivery services consumer confidence and spending. Recessions, declines in economic • increased use of optical fibre technologies to businesses and, or activity and economic uncertainty can erode consumer and business residences confidence and reduce discretionary spending. Any of these factors can • broadband wireless access and wireless services using a radio negatively affect us through reduced advertising, lower demand for our frequency spectrum that we may have limited access to. products and services, decreased revenue and profitability, higher churn and bad debt expense. A significant portion of our broadcasting, These technologies may also lead to significantly different cost publishing and digital revenues come from the sale of advertising. structures for users and therefore affect the long-term viability of some of our current technologies. Some of the new technologies may allow Poor economic conditions can also have an impact on our pension plans competitors to enter our markets with similar products or services at because there is no assurance that the plans will be able to earn the lower costs, and they may be larger and have greater access to financial assumed rate of return. Capital market volatility may result in changes resources than we have. in the discount rates and other variables, requiring us to make contributions in the future that differ significantly from current Improvements in the quality of streaming video over the Internet, contributions and assumptions being used in the actuarial valuation coupled with the increasing availability of television shows and movies process. online are anticipated to increase competition for Canadian cable television systems. If changes in technology are made to any alternative Substantial Competition Canadian multi-channel broadcasting distribution system, our cable There is no assurance that our current or future competitors will not services may face increased competition. In addition, wireless Internet is, provide services that are superior to ours or at lower prices, adapt more in some instances, replacing traditional wireline Internet as the quickly to evolving industry trends or changing market requirements, technology for wireless Internet continues to develop. enter markets we operate in, or introduce competing services. Any of The growing use of PVRs could affect our ability to generate television these factors could reduce our business market share or revenues, or advertising revenues because viewers can skip advertising aired on the increase churn. television networks. The emergence of subscriber-based satellite and We expect to have ongoing re-pricing of products and services with our digital radio products could change radio audience listening habits and existing subscribers as we extend lower wireless pricing offers to attract have a negative effect on the results of our radio stations. Certain and retain customers. As such, wireless penetration of the population audiences are also migrating to the Internet as more video and audio deepens, new wireless customers may generate lower average monthly content becomes available. revenue and this could slow revenue growth. Dependence on Information Technology Systems Wireless could face increased competition due to recent changes to Our businesses depend on information technology systems for day-to- foreign ownership and control of wireless licences. day operations. If we are unable to operate our systems or make • Foreign telecommunication companies could enter the Canadian enhancements to accommodate customer growth and new products market by acquiring wireless licences or a holder of wireless licences. and services or our systems go down, it could have an adverse effect on If companies with significantly greater capital resources enter the our ability to acquire new subscribers, service customers, manage Canadian market, it could reduce our wireless market share. See subscriber churn, produce accurate and timely subscriber invoices, “Foreign ownership and control” in “Regulation in Our Industry” for generate revenue growth and manage operating expenses. This could details. have an adverse impact on our results and financial position. • Industry Canada’s new policy regarding the transfer of spectrum licenses, combined with 2012 legislation that allows foreign Most of our employees and critical elements of our network ownership of wireless providers with less than 10% market share, infrastructure and information technology systems are concentrated in could make it harder for incumbent wireless carriers to acquire various physical facilities. If we cannot access one or more of these additional spectrum, including the completion of our previously facilities because of a natural or manmade disaster or otherwise, our announced arrangements with Shaw and Videotron, while making it operations may be significantly affected to the extent that it may be less expensive for foreign wireless carriers to enter the Canadian difficult for us to recover without a significant interruption in service or wireless market. This could increase the intensity of competition in negative impact to our revenue or customer base. the Canadian wireless sector. Information Security Risk In addition, the CRTC Broadcasting Distribution Regulations do not Security is essential to maintaining efficient, reliable business processes allow cable operators to obtain exclusive contracts in buildings where it and to enabling sustained business growth. Technology advancements is technically feasible to install two or more systems. and the people using these technologies introduce new information security risks. Cyber threats are maturing with time and their sophistication and effectiveness are increasing. A security breach could result in loss of revenue, reputation, and resources, or handing

74 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 75 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT pectrum pectrum Fees services may be increasedwith from industry time-to-time as or aconcerns legislative result initiatives or of to compliance suchunsolicited address commercial Internet-related consumer e-mail, cybercrime protection issues andwireless lawful as and access. Our copyright broadcasting cable, without licences regulatory infringement, approval. may not generallyGenerally, be our licences transferred are grantedto for conditions a specified on termconditions the and are maintenance may subject ofregulators be these may decide modified licences. not Thesefailure to at renew by licencing a any us licence tolicence when time could comply it result with expires, by in and a thethe revocation any the conditions imposition or of forfeiture on fines. regulators. of the any of The maintenance our of licencesThe or a licences include conditionsownership requiring restrictions of us the tocompliance applicable comply legislation. with We with Canadian arerequirements. currently all However, in if of thesebe subject requirements these to are various violated,the penalties, Canadian loss we possibly of would including, a ownership licence. in the extreme and case, The control Wireless Code The CRTC’s decisionconduct, among to other implementcarriers things, to its effectively move wireless requiresinstead away offer consumer from Canadian two-year offering wireless code contracts,acquisition three-year and and of service retention this costs contracts could andalso and subscriber change churn. sets our The Wireless customer billing Code charges, caps creates on adays’ prohibition data notice on roaming of requiring and cancellation,security customers deposits, and domestic which to could requires provide data also the reduce 30- overage our payment resultsOur of of operations. wireless interest on businessregulation could or be customer materiallyterm behaviour adversely commitments makes affected or it earlythe if difficult service cancellation laws, revenues for we fees us anticipate on from to the customers term impose or commitments. receive S Radio spectrum is onethe of wireless the fundamental business.current assets Our required services ability to and carryfactors, to to on offer continued continue new access toincluding services to offer depends and both and on, deployment the improve acquire among of new other ability spectrum adequate licenses. to spectrum, renewIf current we cannot spectrum acquire andto licenses retain continue needed and to spectrum, offer weservices and may on improve not a our be timely current able that services basis customers and including deploy providing want.customers new competitive As data could speeds ainability be result, to materially our acquire ability andquality adversely retain and to affected. result needed attract in spectrumnetwork In densification higher and could and capital affect addition, other retain related expenditures, network network an as upgrades. a consequenceS of Changes to government spectrumpayments fees could and significantly increaseSpectrum therefore our licences are an materiallyamortize indefinite life them, reduce intangible however, assetfees any our and may we affect potential our do operating increases current not accounting in policies. profit. spectrum licence ervice S overnment Regulations G Unauthorized Access to Digital BoxesWe or use Internet encryption Modems technology developedto and supported protect by our our vendors cableaccess signals to from programming unauthorized basedencryption and on access security subscription and technologies packages. to toour We Internet control prevent service. unauthorized also access use to There is nounauthorized assurance decoding of thatfuture. television we If signals we will ortechnology, are Internet be subscriptions unable access able to to inVOD to digital control the and cable programming, effectively SVOD, access including prevent could with and premium result in our Internet a encryption decline service in revenues our cable may revenues. decrease, which If our networkscircumstances, or result key in networkindefinite period a components and have loss fail, anposition. adverse it of We effect rely could, on service on our in results business forour and partners customers. some financial our to If one carry customers of somecause these traffic for a carriers for has service some an a interruption of servicecould for failure, reroute our it the customers might traffic to also that another would carrier. last until we Substantially all ofCanada our and/or business thecould activities CRTC, adversely are and regulated affect“Regulation any in by Our regulatory our Industry”. Industry changes consolidated or resultsRegulatory decisions of changes operations.adversely or impact See our decisions results ofregulation made operations relates on by to, a among consolidatedcable these basis. television other This programming things, regulators services licencing,and that could competition, we wireline must the interconnection distribute, agreements,provide wireless the access rates we tonetworks may and charge our roaming to on networkof our by networks, communications our third systems operationother and and parties, ownership communications our the ability systems. resale to In of acquire addition, our an the interest in costs of providing Changes in REGULATORY RISKS Impact of Network Failures on Revenue and Customer advantage to aeducation competitor. and continuous Annual improvement investmentsRCI’s help security in to posture. maintain These new are androbust capabilities, focused improve detection on and protection advance and preparationa prevention, and planning to potential help prevent resources breach continue to be from focused in turning this area. We into use atechnology standard crisis. security, industry Risk survivabilitysuccess practices and management partly for disaster depends on recovery.data, network protecting Our and our including ongoing corporateemployees. information business-sensitive personal We information treatprotect it this about from unauthorized informationpolicies access our and as procedures and and compromise. customers intellectualthis information We technology information. property rely and systems If on to and wecustomer protect our do information, not we securestandards may our and not data it could and be result theto in in negative privacy compliance publicity, our of litigation with our and reputation.customers regulatory damage or public Any confidence, or of experience financial losses. these outcomes can cause us to lose MANAGEMENT’S DISCUSSION AND ANALYSIS

Higher Handset Subsidies BUSINESS RISKS Our wireless business model is based substantially on subsidizing the cost of subscriber handsets, similar to other North American wireless Revenue Expectations from New and Advanced Services carriers. This attracts customers and in exchange they commit to a term We expect that a substantial portion of our future revenue growth may with us. We also commit to a minimum subsidy with the supplier of come from new and advanced services, and we continue to invest certain smartphone devices. significant capital resources to develop our networks so we can offer these services. It is possible, however, that there may not be sufficient National Wireless Tower Policy consumer demand, or that we may not anticipate or satisfy demand for The policy affects all parties that plan to install or modify an antenna certain products and services, or be able to offer or market these new system, including PCS, cellular and broadcasting service providers. The products and services successfully to subscribers. If we do not attract policy requires, among other things, that antenna proponents consider subscribers to new products and services profitably or keep pace with using existing antenna structures before proposing new structures and changing consumer preferences, we could experience slower revenue those owners of existing systems respond to requests to share antenna growth and increased churn. This could have a materially adverse effect systems. Antenna proponents must follow a defined process for on our business, results of operations and financial condition. notifying the public and addressing local requirements and concerns. Acquisitions, Divestitures or Investments Certain types of antenna installations, however, are excluded from the Acquiring complementary businesses and technologies, developing consultation requirements with local authorities and the public. strategic alliances and divesting portions of our business are often required to optimally execute our business strategy. Radio Frequency Emissions From time to time the media and other reports have highlighted alleged Services, technologies, key personnel or businesses of companies we links between radio frequency emissions from wireless handsets and acquire may not be effectively assimilated into our business or service various health concerns, including cancer, and interference with various offerings, or our alliances may not be successful. We also may not be medical devices, including hearing aids and pacemakers. This may able to successfully complete any divestitures on satisfactory terms, if at discourage the use of wireless handsets or expose us to potential all. Divestitures may reduce our total revenues and net income by more litigation even though there are no definitive reports or studies stating than offset by the sales price. that these health issues are directly attributable to radio frequency emissions. Inventory Obsolescence Our inventory balance mainly consists of wireless handset devices, It is also possible that future regulatory actions may result in more which generally have relatively short product life cycles due to frequent restrictive standards on radio frequency emissions from low-powered wireless handset introductions. If we cannot effectively manage devices like wireless handsets. We cannot predict the nature or extent inventory levels based on product demand, this may increase the risk of of any restrictions. inventory obsolescence.

Obtaining Access to Support Structures and Municipal Rights Complexity of Our Business of Way Our businesses, technologies, processes and systems are operationally We must have access to support structures and municipal rights of way complex and increasingly interconnected. If we do not execute properly, for our cable facilities. We can apply to the CRTC to obtain a right of or if manmade or natural disasters impact them, customers may have a access under the Telecommunications Act in areas where we cannot negative experience, resulting in increased churn and lower revenue. secure access to municipal rights of way. Failure to obtain access could increase Cable costs and adversely affect our business. Reliance on Third Party Service Providers We have outsourcing arrangements with third parties to provide certain The Supreme Court of Canada ruled in 2003, however, that the CRTC essential components of our business operations to our employees and does not have the jurisdiction to establish the terms and conditions of customers, including payroll, certain facilities or property management accessing the poles of hydroelectric companies. As a result, we obtained functions, call centre support, certain installation and service access under orders from the Ontario Energy Board and the New technicians, certain information technology functions, and invoice Brunswick Public Utilities Board. printing. Interruptions in these services can adversely affect our ability to service our customers. Dependence on Facilities and Services of ILECs Business telephony operations that are outside our cable territory highly Dependence on Certain Key Infrastructure and Handset depend on the availability of facilities and services acquired from Vendors incumbent telecom operators, according to CRTC rules. Changes to Our wireless business has relationships with a relatively small number of these rules could significantly affect the cost of operating these essential network infrastructure and handset vendors. We do not have businesses. operational or financial control over them, and only have limited influence on how they conduct their business with us. Copyright Tariffs Pressures on copyright tariffs continue to affect our services. Any If one of our network infrastructure suppliers fails, it could delay adding increase in fees could negatively affect our results of operations. network capacity or new capabilities and services across the business. Handsets and network infrastructure suppliers can extend delivery times, raise prices and limit supply due to their own shortages and business requirements, among other things. If these suppliers do not develop handsets that satisfy customer demands, or deliver products

76 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 77 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT operations to payfunds dividends, available for interest other andoperations business purposes principal, including which other financial reduce conditions our business and/or industry who mayleverage, have or more financial resourcescapital and, and or capitalpurposes. less expenditures financial and for other general corporate FINANCIAL RISKS Capital Commitments Liquidity, Debt andOur Interest Payments capitalimportant consequences commitments including: and• requiring financing us obligations to dedicate could a have substantial portion of cash• flow from making us more• vulnerable limiting to our flexibility adverse in planning economic for,• and/or and reacting putting to, industry us changes in at a competitive disadvantage compared to competitors • restricting our ability to obtain additional financing to fund working Our ability tooperating satisfy performance our and financial economic,factors, financial, obligations many competitive depends of and on which other generate our are sufficient beyond cash future flow our and control.to future Our financings provide may business not may be sufficientsuccessfully available not execute net our business proceeds strategy. to meetIncome these Tax and obligations Other Taxes orWe to collect, pay andtaxes accrue such significant as amounts federalproperty taxes, of and for and income provincial to and sales various taxation other tax, authorities. We employment have taxes recorded and significant amountsand of current deferred income income tax taxon liabilities expense, substantively and enacted income calculated taxA these rates legislative amounts in change effect based in atamounts the these recorded relevant rates and time. could payable have in a the future. material impactWe on have the also recordedthat the are more benefit likely of thanmeasured not income of at and being sustained the other on taxultimate amount examination settlement and positions expected with are taxation to authorities. be realizedWhile when we believe we we havetax, have paid an our and business provided isinterpreting for tax adequate complex legislation amounts and and of regulations. significantaudit Our by judgement tax the filings is relevant are government subject requiredthe revenue to government in authorities audit and could the materiallyincome change results the of tax amount of expense, ourpayable income actual or taxes receivable payable andcould, or deferred in receivable, income certain other tax circumstances,penalties. result taxes assets in or an liabilities assessment and of interest and industry associations and agencies. Ifmagazine our readership radio levels and decrease televisionvolumes substantially, ratings and or our advertising the sales ratesaffected. that we charge advertisers could be adversely o, Television or Magazine tructure S tructure and Talent S Readership Advertising dollars typically migrate toin media their properties respective that markets are and leaders budgets categories, are particularly tight. when Although advertising mostproperties of currently our radio, perform television wellnot and in magazine continue their in respective thepurchasing markets, future. this Advertisers decisions may base on a substantial ratings part and of their readership data generated by Our Market Position in Radi Migrating from Conventional Media toOur New Media Media business operates incustomers many industries migrating that can from bedriving affected by conventional shifts toalternatives in to digital the conventional media,towards quality media. the which We digital and market have is tonegatively accessibility been limit affected shifting this of risk. if our Our dataadvertising we focus Media dollars are from results and conventional could unsuccessful to be mobile digital in platforms. anticipating the shift in Channel Placement Unfavourable channel placement couldand negatively affect results the tier ofSportsnet, status SportsnetONE, certain Sportsnet World, channels,including and Outdoor our including Life specialty Network, channels, TheCanada, The and Shopping Biography FX (Canada). Channel Channel, (Canada), G4 Organizational Holding Company Increasing Programming Costs Acquiring programmingcommitment is in our the cablesignificantly business. single over Programming the past costs most few havein years, significant increased particularly subscriptions with the to purchasing recentmaterial growth digital cost for specialty Media television channels.could properties. Higher adversely Programming programming affect is costs theunable also to operating pass a results on these of costs to our subscribers. business if we are and services on a timelyour basis, it could business, have ainterruption financial material in adverse effect the condition on affect supply and the of quality equipment results ofexpansion. for our our of service networks or operations. could impede also network Any development and The industryworkforce. is Losing competitive certainrestructuring employees or in or other event attracting changes couldcertain affect in circumstances. our and morale revenue and due retaining profitability in to a a skilled As a holdingdepends company, primarily our ability onintercompany to receiving advances, meet interest rental ourpayments and payments, from financial our principal cash obligations through subsidiaries, dividends payments issuing together debt and and on with equity and other proceeds selling raised assets. Substantially by us allsubsidiaries. of All of our our subsidiariesobligation, are distinct business contingent legal entities or that activitieswhether have no otherwise, by are to dividends,payments, make operated interest funds subject payments, by availableadvances. loans, Any to our to advances of us theserestrictions, or payment payments are other must contingent arrangements meet onare subject statutory the to or earnings on various businesses contractual of and those other intercompany considerations. subsidiaries, and MANAGEMENT’S DISCUSSION AND ANALYSIS

LITIGATION RISKS The plaintiffs intend to seek an order certifying the proceeding as a national class action in Saskatchewan. We have not recorded a liability – Saskatchewan for this contingency. In 2004, a class action commenced against providers of wireless communications in Canada under the Class Actions Act (Saskatchewan). Cellular Devices The class action related to the system access fee wireless carriers In July 2013, a class action was launched in British Columbia against charged to some of their customers. The plaintiffs are seeking providers of wireless communications in Canada and manufacturers of unspecified damages and punitive damages, which would effectively be wireless devices. The class action relates to the alleged adverse health a reimbursement of all system access fees collected. effects incurred by long-term users of cellular devices. The plaintiffs are In 2007, the Saskatchewan Court granted the plaintiffs’ application to seeking unspecified damages and punitive damages, effectively equal to have the proceeding certified as a national, “opt-in” class action where the reimbursement of the portion of revenues the defendants have affected customers outside Saskatchewan must take specific steps to received that can reasonably be attributed to the sale of cellular phones participate in the proceeding. In 2008, our motion to stay the in Canada. We have not recorded a liability for this contingency. proceeding based on the arbitration clause in our wireless service agreements was granted. The Saskatchewan Court directed that its Other Claims order, in respect of the certification of the action, would exclude There are certain other claims and potential claims against us. We do customers who are bound by an arbitration clause from the class of not expect any of these to have a materially adverse effect on our plaintiffs. consolidated financial position.

We appealed the 2007 certification decision, however, it was dismissed The outcome of all the proceedings and claims against us, including the by the Saskatchewan Court of Appeal and leave to appeal to the matters described above, is subject to future resolution that includes the Supreme Court of Canada was denied. uncertainties of litigation. Based on information currently known to us, we believe that it is not probable that the ultimate resolution of any of In 2012, the plaintiffs applied for an order seeking to extend the time these proceedings and claims, individually or in total, will have a they can appeal the “opt-in” decision of the Saskatchewan Court. In material adverse effect on our consolidated financial position or results March 2013, the Saskatchewan Court of Appeal denied the plaintiffs’ of operations. If it becomes probable that we are liable, we will record a application. provision in the period the change in probability occurs and it would be material to our consolidated financial position and results of operations. In August 2009, counsel for the plaintiffs began a second proceeding under the Class Actions Act (Saskatchewan) asserting the same claims OWNERSHIP RISK as the original proceeding. If successful, this second class action would be an “opt-out” class proceeding. This second proceeding was ordered Controlling Shareholder conditionally stayed in 2009 on the basis that it was an abuse of Rogers is a family-founded, family-controlled company. process. Voting control of Rogers Communications is held by Rogers Control In April 2013, the plaintiffs applied for an order to be allowed to Trust whose beneficiaries are members of the Rogers family, several of proceed with the second system access fee class action. In August whom are also directors of our Board. The trust holds voting control 2013, the court denied this application and the second action remains of Rogers Communications Inc. and its subsidiaries for the benefit of conditionally stayed. In December 2013 the plaintiff applied for an successive generations of the Rogers family. The trust also deals with order permitting them to amend the Statement of Claim to reintroduce Rogers on the company’s long-term strategy and direction. The trustee the claims they were not permitted to proceed with in the 2007 is the trust company subsidiary of a Canadian chartered bank. certification decision. We are awaiting the decision of the Saskatchewan Court. We have not recorded a liability for this As of December 31, 2013, private Rogers family holding companies contingency. controlled by the trust owned approximately 90.9% of our outstanding Class A Voting shares and approximately 9.8% of our Class B Non- System Access Fee – British Columbia Voting shares, or in total approximately 28% of the total shares In December 2011, a class action was launched in British Columbia outstanding. Only Class A Voting shares carry the right to vote in most against providers of wireless communications in Canada about the circumstances. As a result, the trust is able to elect all members of our system access fee wireless carriers charge to some of their customers. Board and to control the vote on most matters submitted to a The class action relates to allegations of misrepresentations contrary to shareholder vote. the Business Practices and Consumer Protection Act (British Columbia), among other things. The plaintiffs are seeking unspecified damages and CONTROLS AND PROCEDURES restitution. A certification hearing is scheduled for April 2014. We have not recorded a liability for this contingency. DISCLOSURE CONTROLS AND PROCEDURES We conducted an evaluation of the effectiveness of the design and 911 Fee operation of our disclosure controls and procedures as of December 31, In June 2008, a class action was launched in Saskatchewan against 2013, under the supervision and with the participation of our providers of wireless communications services in Canada. It involves management, including the Chief Executive Officer and Chief Financial allegations of breach of contract, misrepresentation and false Officer, pursuant to Rule 13a-15 promulgated under the US Securities advertising, among other things, in relation to the 911 fee that had Exchange Act of 1934, as amended. Based on this evaluation, our Chief been charged by us and the other wireless communication providers in Executive Officer and Chief Financial Officer concluded that our Canada. The plaintiffs are seeking unspecified damages and restitution. disclosure controls and procedures were effective at that date.

78 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 79 Decrease in Net Income if Life Decreased by 1 year Increase in Net Income if Life Increased by 1 year ROGERS COMMUNICATIONS INC. Period Amortization 2013 ANNUAL REPORT (In millions of dollars) We will change ouruseful depreciation lives methods, if depreciationestimates. they rates are We or asset determined recognizeprospectively. to the be effect different of from these our changes previous Capitalizing in Direct Labour, net Overhead income andCertain Interest direct labour andconstruction, indirect costs development associatedcapitalized with or the to acquisition, property, improvements plantare and of calculated equipment. based our The onnature, capitalized and estimated networks amounts are costs generally of are costs based projects on are a that rate capitalized areproperty, per during capital plant hour. and in In development equipment. addition, Capitalized andthe interest amounts asset construction increase and the result of cost in of a certain higher depreciation expense inImpairment future of periods. Assets Indefinite-lived intangible assets (includingor goodwill broadcast and licences) spectrum and/ andand definite equipment life and assets other intangible (including assets) property, are plant assessed for impairment Brand NamesCustomer RelationshipsRoaming Agreements 3 – 10 yearsMarketing Agreements 5 – 20 years 12 years 3 years $ 19 $ $ 1 3 $ 1 $ (31) $ $ (1) (4) $ (2) Useful Lives We depreciate theestimated cost of useful property, livesspecific plant by factors, and considering including equipment changingthe industry over technologies in-service trends their and period and expectationsestimates of for company- of certain useful assetsensure lives at they annually the or matchrevenue-producing time. perspective. when the We If circumstances reassess anticipated technologicalquickly, change our change or life in to happens a more of differentthe way estimated than the life anticipated, we of technology might property,in have plant from to a and reduce equipment, higher a whichcharge depreciation could result expense to in writemethods, future down depreciation periods the rates orfrom or an value. our asset impairment previous We useful estimates. will Wein lives net recognize change if income the prospectively. effect they our of are depreciation these different changes Our intangible assets have increasedamortize mainly because the of acquisitions. We costestimated useful of lives. We intangibleassets, use judgment analyzing assets to all determine with relevantthe the asset, factors, life finite the of including typical these lives thethe life expected market cycle over demand usage of for their of thegenerate. the asset products and and anticipated services changes that in theWe do asset not helps amortize intangiblebroadcast assets with licences) indefinite because lives (spectrum therethat and is these assets no are foreseeable expected limitreview to generate of to net the the cash competitive, period inflowsview for legal, that us. regulatory these After factors and do otherbroadcast not licences. factors, limit it the useful is lives our of ourThe spectrum table and below shows thefinite-lived impact intangible that changing assets theincome: useful by lives one of the year would have on annual net issued by the Internal Control – Integrated Framework (1992) Fair Value We use considerableand judgment intangible to assets estimate acquiredusing the and liabilities fair assumed the value in offinancial an best markets. acquisition, tangible This may available includeutilize discounted cash information flow key analyses which assumptions includingterminal growth such information rates as todiffer from from discount estimate these future estimates. rates, earnings. attrition Actual results rates, may and ACCOUNTING POLICIES Critical Accounting Estimates Management makes judgments, estimateshow and assumptions accounting that policies affect assets, are liabilities, revenue applied and expenses andcontingent and assets our the and related amounts liabilities. disclosure about Significantincluding we changes in those report our related assumptions, in could to cause our our actual future results to business be materially plansThese different. and cash estimates flows, understanding our results are of operations.judgment We may critical because need of to use theused to additional in sensitivity determining the of our asset, the liability, revenue methods and business and expense amounts. assumptions operations and Other Information There were noreasonably likely to changes materially affect, inreporting. our internal 2013 controls over that financial materially affected, or are CHANGES IN INTERNAL CONTROL OVERREPORTING FINANCIAL AND DISCLOSURE CONTROLS AND PROCEDURES Committee of Sponsoring Organizations(COSO), of the and Treadwayindependent Commission concluded auditor, KPMG that LLP, issuedof it December an 31, audit 2013, was report we statingreporting had in that, effective effective all as internal material at respects, controls based over on financial that theAll same criteria. date. internal control Our have systems, inherent however, limitations, and no evento matter systems how that be have well been effectivepreparation designed, determined and presentation can of financial only statements. provide reasonable assurance about the MANAGEMENT’S REPORT ON INTERNAL CONTROLFINANCIAL OVER REPORTING Management is responsible forinternal establishing controls over and financial maintaining reporting. adequate Our internal control systemBoard is reasonable assurance designed that toand our give fairly financial presented management statements in and are accordancePrinciples. prepared with the Generally The Accepted Accounting management, system assets are assures safeguarded andManagement all financial also records takes are transactions reliable. communication steps is are to effective, and assure authorized monitorscontrol the performance procedures. flow and by our of internal information and Management assessed thefinancial effectiveness reporting of as our ofout internal December in 31, controls the 2013, over based on the criteria set MANAGEMENT’S DISCUSSION AND ANALYSIS

on an annual basis or more often if events or circumstances warrant. A The table below shows what the impact of an increase or decrease in cash generating unit is the smallest identifiable group of assets that the primary assumptions and estimates on our accrued benefit generates cash inflows that are largely independent of the cash inflows obligation and pension expense for 2013 would be: from other assets or groups of assets. Goodwill and indefinite life Accrued benefit Pension intangible assets are allocated to cash generating units (or groups of obligation at end expense cash generating units) based on the level at which management (In millions of dollars) of fiscal 2013 fiscal 2013 monitors goodwill, which is not higher than an operating segment. The Discount rate 5.10% 4.50% allocation involves significant estimates of future cash flows, estimated Impact of: 0.5% increase $ (105) $ (11) periods of use, applicable discount rates and considerable management 0.5% decrease 120 13 judgment, and is made to cash generating units (or groups of cash Rate of compensation increase 3.00% 3.00% generating units) that are expected to benefit from the synergies of the Impact of: 0.25% increase $ 14 $ 3 business combination. If key estimates differ unfavourably in the future, 0.25% decrease (14) (2) we could experience impairment charges that could decrease net Mortality rate income. We did not record an impairment charge in 2013 since the Impact of: 1 year increase $ 26 $ 4 recoverable amounts of the cash generating units exceeded their 1 year decrease (27) (3) carrying values. In 2012, we recorded an impairment charge of $80 million related to certain Media assets, due to the challenging economic Stock-Based Compensation conditions, weakening industry expectations and a decline in Stock Option Plans advertising revenues. Our employee stock option plans attach cash-settled share appreciation rights (SARs) to all new and previously granted options. The SARs Financial Instruments feature allows the option holder to elect to receive in cash an amount The fair values of our Derivatives are recorded using an estimated equal to the intrinsic value, instead of exercising the option and credit-adjusted mark-to-market valuation. If the Derivatives are in an acquiring Class B Non-Voting shares. asset position (i.e., the counterparty owes Rogers), the credit spread for the bank counterparty is added to the risk-free discount rate to We measure stock-based compensation to employees at fair value. We determine the estimated credit-adjusted value. If the Derivatives are in a determine fair value of options using our Class B Non-Voting share liability position (i.e., Rogers owes the counterparty), our credit spread is price and option pricing models, and record all outstanding stock added to the risk-free discount rate. The estimated credit-adjusted value options as liabilities. The liability is marked-to-market in each period and of Derivatives is affected by changes in credit spreads between us and is amortized to expense using a graded vesting approach over the our counterparties. period when employee services are rendered, or over the period to the date an employee is eligible to retire, whichever is shorter. The expense Income and Other Taxes in each period is affected by the change in the price of our Class B Non- We make income and other tax provisions based on information Voting shares during the life of the option. currently available in each of the jurisdictions in which we operate. Restricted Share Unit (RSU) Plan While we believe we have paid and provided for adequate amounts of We record outstanding RSUs as liabilities, measuring our liabilities and tax, our business is complex and significant judgement is required in compensation costs based on the award’s fair value, and recording it as interpreting tax legislation and regulations and estimating future levels a charge to operating costs over the vesting period of the award. If the of taxable income. Our tax filings are subject to audit by the relevant award’s fair value changes after it has been granted and before the government revenue authorities and the results of the government settlement date, we record the resulting changes in the liability as a audit could materially change the amount of our actual income tax charge to operating costs in the year that the change occurs. The expense, income taxes payable or receivable, other taxes payable or payment amount is established as of the vesting date. receivable and deferred income tax assets and liabilities and could, in certain circumstances, result in the assessment of interest and penalties. Deferred Share Unit (DSU) Plan We record outstanding DSUs as liabilities, measuring our liabilities and Pension Benefits compensation costs based on the awards’ fair values at the grant date. When we account for defined benefit pension plans, assumptions are If an award’s fair value changes after it has been granted and before made in determining the valuation of benefit obligations. Assumptions the settlement date, we record the resulting changes in our liability as a and estimates include the discount rate, the rate of compensation charge to operating costs in the year that the change occurs. The increase and the mortality rate. Changes to these primary assumptions payment amount is established as of the exercise date. and estimates would affect the pension expense, pension asset and liability and other comprehensive income. Changes in economic conditions may also have an impact on our pension plan because there is no assurance that the plan will be able to earn the assumed rate of return. Market-driven changes may also result in changes in the discount rates and other variables that would require us to make contributions in the future that differ significantly from the current contributions and assumptions incorporated into the actuarial valuation process.

80 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS 81 – In December On January 1, 2013, we On January 1, 2013, we – In May 2013, the IASB ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT and circumstances. Wejoint have arrangements re-evaluated and ourproportionate have involvement accounted for in consolidationdepending these our on either whether method, the using investmentor the is or defined a as joint amaterial the joint venture, to operation the respectively. current equity or The comparativeIFRS adoption years. 13, method of Fair Value IFRS Measurement 11 (IFRS was 13) not – adopted IFRS 13, on aof prospective guidance basis, which on providesmeasurement a how guidance single contained fair source in individual value IFRSs.value is IFRS and 13 measured, establishes defines fair a replacing frameworkintroduce the for new measuring fair fair fair value value. valueexceptions It measurements to does or not fair eliminatestandards. value the measurements practicability We thatthroughout our currently annual have exist consolidated financial in statements. IAS incorporated 19, certain Employee Benefits the (2011)adopted (IAS IAS 19) 19, fair which – changesor the value basis for expense determining requirements theeliminated related income the to concept(income) of defined and return replaced benefit it on withapplying plan a plans. the net discount assets interest rate This and cost tocost that the interest amendment is takes net calculated cost liability by into (asset).liability The account (asset) net interest any duringbenefit changes the payments. The period in adoption of as thean the amended a increase net standard in result resulted defined in financecomprehensive of benefit costs income, contributions of and for $7income a for million the and net year amaterial effect ended impact decrease December on of in 31, net assets other nil 2012of as the and at in annual did December consolidated not comprehensive 31, financialabout 2012. have statements our See for a pension note more plans. information 22 IAS 36, Impairmentamended IAS of 36 to Asset clarifyamount the (IAS of circumstances assets in 36) which or the cash-generatingto recoverable units is clarify required to be therequirement disclosed, disclosures to required,impairment disclose (or and the reversals) to wherefair discount value the introduce less rate recoverable an costs amounttechnique. used of (based explicit disposal) on in The is determinedbeginning determining using amendments a on present arepermitted. value or We effective early after adoptedmade for the this January required policy disclosures. annual as 1, of periods January 2014, 1, with 2013 and early adoption IAS 32, Financial Instruments:2011, the Presentation IASB (IAS amended 32) entity IAS 32 has to clarifyamendments a the are meaning effective of current for whenJanuary annual an legally 1, periods 2014 beginning enforceable anddo on are not or right required expect after to thisfinancial of be to statements. applied have set-off. retrospectively. a We significantIAS The 39, impact Financial on Instruments: our Recognition– and consolidated Measurement In (IAS 39) Junediscontinuing 2013, an the existing IASB hedgingwas relationship amended not when IAS contemplated a in novation 39 thespecific that to original criteria. hedging provide The documentation relief meets beginning amendments on from or are after January effective 1, for 2014 and annual are required periods to be applied • • • Recent Accounting Pronouncements We are required to adopt theor following after revised January accounting 1, standards 2014. on revised We are assessing standards the impact onstatements. of adopting these our 2014• interim and consolidated financial • Chg Chg % % As a result of $ 1$ 38 200 118 $43 – 2012 2012 Years ended December 31 Years ended December 31 As a result of the adoption of 2013 $3 $83 2013 $43 tandards S the adoptiondetermining of whether we IFRS have controlwe over 10, consolidate and our consequently investees. we whether IFRSthat 10 have is introduces applicable a to new changed control allconsolidation model of investees. our an Among investee other approach if things,de we it facto to control requires circumstances. the the In investeeof accordance on IFRS with the 10, the basis we transitional of re-assessed provisions January the 1, control 2013. We conclusion made forperiod as no our a changes investees result in at of the thisIFRS current assessment. 11, or Joint Arrangements comparative (IFRSIFRS 11) – 11, wearrangements. have changed Under how IFRSarrangements we as evaluate 11, either our joint weon interests operations our classify or in joint right joint our venturesarrangements. to depending interests the When assets instructure and making joint obligations of this for thevehicles, the assessment, the liabilities arrangements, contractual we of terms the the consider of the legal the arrangements form and other of facts any separate IFRS 10, Consolidated Financial Statements (IFRS 10) – paid on premiums for insurance coverage • New Accounting We haveshareholder entered and companies it into controls.formal These transactions agreements certain are approved subject to by transactionspaid the to these with Audit related Committee. partiesoccasional our generally Total business reflects amounts use the controlling of chargesand to aircraft, were Rogers net less for of than $1 other million administrative for services, 2013These and 2012 transactions combined. are measuredamount at agreed the to exchangeconditions and by amount, are reviewed being the by the the related Audit Committee. parties are at marketWe terms adopted and January 1, the 2013, of which following none• had a new material impact on accounting prior periods. standards effective Revenues Purchases (In millions of dollars) Printing, legal services and commission We have entered into certainor transactions senior with officers companies, of the whichcompanies. partners are Directors Total of amounts Rogersindirectly, and/or were paid our as subsidiary follows: to these related parties, directly or (In millions of dollars) Transactions with Related Parties We have enteredbusiness into with related certain partiesamounts transactions in paid to which in these we parties the have were as normal an follows: equity course interest. of The Contingencies Considerable judgement is involvedliabilities. in the Our determination judgement of isus, contingent and based the on probability of informationit the currently ultimate becomes resolution known probable of that to theof a contingencies. If contingent economic liability resources, willchange we result in will in an record outflow consolidated a probability financial position provision and occurs, results in of operations. the and period it the could be material to our MANAGEMENT’S DISCUSSION AND ANALYSIS

retrospectively. We are assessing the impact of this amendment on Cable our consolidated financial statements. • Cable Television and Internet subscribers are represented by a • IFRIC 21, Levies (IFRIC 21) – In May 2013, the IASB issued a new dwelling unit, and cable Phone subscribers are represented by line accounting guidance IFRIC 21, which provides guidance on when to counts. recognize a liability for a levy imposed by a government, both for • When there is more than one unit in one dwelling, like an apartment levies that are accounted for in accordance with IAS 37 Provisions, building, each tenant with cable service is counted as an individual Contingent Liabilities and Contingent Assets and those where the subscriber, whether the service is invoiced separately or included in timing and amount of the levy is certain. The Interpretation identifies the tenant’s rent. Institutional units, like hospitals or hotels, are each the obligating event for the recognition of a liability as the activity considered to be one subscriber. that triggers the payment of the levy in accordance with the relevant • Cable Television, Internet, and Phone subscribers include only those legislation. It provides the following guidance on recognition of a subscribers who have service installed and operating, and who are liability to pay levies (i) the liability is recognized progressively if the being billed accordingly. obligating event occurs over a period of time, and (ii) if an obligation is triggered on reaching a minimum threshold, the liability is Subscriber Churn recognized when that minimum threshold is reached. The standard is Subscriber churn is a measure of the number of subscribers that effective for annual periods beginning on or after January 1, 2014, deactivated as a percentage of the total subscriber base, usually with early adoption permitted. We are assessing the impact of this calculated on a monthly basis. Subscriber churn tells us our success in new standard on our consolidated financial statements. retaining our subscribers. We calculate it by dividing the number of • IFRS 9, Financial Instruments (IFRS 9) – In October 2010, the IASB Wireless subscribers that deactivated (usually in a month) by the issued IFRS 9, which replaces IAS 39, Financial Instruments: aggregate numbers of subscribers at the beginning of the period. When Recognition and Measurement, establishes principles for the financial used or reported for a period greater than one month, subscriber churn reporting of financial assets and financial liabilities that will present represents the sum of the number of subscribers deactivating for each relevant and useful information to users of financial statements for period incurred divided by the sum of the aggregate number of their assessment of the amounts, timing and uncertainty of an subscribers at the beginning of each period incurred. entity’s future cash flows. This new standard also includes a new general hedge accounting standard which will align hedge Average Revenue per User accounting more closely with risk management. It does not Average Revenue per User (ARPU) helps us identify trends and measure fundamentally change the types of hedging relationships or the our success in attracting and retaining higher value subscribers. We requirement to measure and recognize ineffectiveness, however it calculate it by dividing revenue (usually monthly) by the average will provide more hedging strategies that are used for risk number of subscribers in the period. For Wireless, ARPU is calculated management to qualify for hedge accounting and introduce more using network revenue. When used in connection with a particular type judgment to assess the effectiveness of a hedging relationship. The of subscriber, ARPU is monthly revenue generated from those mandatory effective date of IFRS 9 has not yet been communicated subscribers, divided by the average number of those subscribers during by the IASB. We are assessing the impact of this new standard on its the month. consolidated financial statements. Average Revenue per User Calculations – Wireless

KEY PERFORMANCE INDICATORS (In millions of dollars, subscribers in thousands, except ARPU figures and Years ended December 31 We measure the success of our strategy using a number of key adjusted operating profit margin) 2013 2012 performance indicators, which are outlined below. We believe these key Postpaid ARPU (monthly) performance indicators allow us to appropriately measure our Postpaid (voice and data) revenue $ 6,470 $ 6,402 performance against our operating strategy as well as against the Divided by: average postpaid results of our peers and competitors. The following key performance wireless voice and data subscribers 7,957 7,698 indicators are not measurements in accordance with IFRS and should Divided by: twelve months for the year 12 12 not be considered as an alternative to net income or any other measure $ 67.76 $ 69.30 of performance under IFRS. Prepaid ARPU (monthly) Subscriber Counts Prepaid (voice and data) revenue $ 278 $ 317 We determine the number of subscribers to our services based on active Divided by: average prepaid subscribers 1,481 1,667 subscribers. When subscribers are deactivated, either voluntarily or Divided by: twelve months for the year 12 12 involuntarily for non-payment, they are considered to be deactivations $ 15.64 $ 15.84 in the period the services are discontinued. Blended ARPU (monthly) Wireless Voice and data revenue $ 6,748 $ 6,719 • A wireless subscriber is represented by each identifiable telephone Divided by: average wireless voice and number. data subscribers 9,438 9,365 • We report wireless subscribers in two categories: postpaid and Divided by: twelve months for the year 12 12 prepaid. Postpaid and prepaid include voice-only subscribers, data- $ 59.58 $ 59.79 only subscribers, and subscribers with service plans integrating both voice and data. • Wireless prepaid subscribers are considered active for a period of 180 days from the date of their last revenue-generating usage.

82 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS % 83 2.3 2012 2012 8.6 4,834 19,618 $ 1,693 $11,169 % 2.4 2013 2013 7.1 4,993 23,601 $ 1,669 $11,734 Years ended December 31 Years ended December 31 1 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Divided by: total assets as at December 31 Divided by: adjusted operating profit Return on assets Debt/adjusted operating profit Net income Adjusted net debt Adjusted operating profit and adjustednot net be debt are considered Non-GAAPdefined as measures terms and substitutes should under or IFRS,reliable alternatives and way for do GAAP to notinformation measures. compare about have these They a us measures, including are standard to how not we meaning, other calculate so them. companies. may See not be “Non-GAAP a Measures” for Return on Assets We use return on assetsgenerate to measure net our efficiency income. inincome We using for our the calculate assets year to by return total assets on as at assets year by end. (In millions dividing of dollars, net except percentages andReturn ratios) on assets Adjusted Net Debt to AdjustedWe Operating Profit use adjustedmake net capital structure debt related to decisionsdebt divided and conduct by calculate valuation-related adjusted it operating as analysis profit. adjusted and net (In millions of dollars, except percentages andAdjusted ratios) net debt/adjusted operating profit 1 % % 40 48 2012 2,029 1,693 $ 820 $ 820 % % 44 54 2013 2,044 1,669 $ 896 $ 896 Years ended December 31 1 Ratio Dividends declared for the year Divided by: net income Ratio Dividends declared for the year Divided by: pre-tax free cash flow Pre-tax free cash flowsubstitute or is alternative a for Non-GAAPdoes GAAP measure measures. not It and have is a shouldother not standard not companies. a meaning, be See defined so “Non-GAAP term considered mayincluding under Measures” as how not IFRS, for we a and information be calculate about them. a these reliable measures, way to compare us to 1 Dividend payout ratio (In millions of dollars, except percentages and ratios) Dividends as a percentage of pre-tax free cash flow Dividend Payout Ratios We calculate the dividendfor payout the ratio by yearpercentage dividing of by dividends pre-tax free declared net cashdetermining flow income the to dividends conduct for analysis wepercentage and should the assist pay. of with year. We pre-tax calculate Wedivided cash dividends by pre-tax use as flow free a cash dividends as flow for as dividends the year. a declared for the year Capital Intensity Capital intensity allowsproperty, us plant to and compare equipmentsame to the industry. that We level of calculate ofand other it equipment our companies by by within additions dividing operating the calculated additions to revenue. to using For property, Wireless, total plant performance capital of network intensity our assets revenue. is andexpenditures. when We making We decisions believe use about that the itintensity certain capital investors to and to evaluate analystsconstruction use the in capital measure relation to revenue. the performance of asset purchases and MANAGEMENT’S DISCUSSION AND ANALYSIS

ADDITIONAL GAAP MEASURES

We include operating income as an additional GAAP measure in our consolidated statements of income because we believe it is a representative of our normal course operating activities, provides relevant information that can be used to assess our consolidated performance, and is meaningful to investors. We calculate it by taking revenue and deducting operating expenses, including restructuring, acquisition and other expenses, and depreciation and amortization as shown in our consolidated statements of income.

NON-GAAP MEASURES

We use the following Non-GAAP measures. These are reviewed regularly by management and our Board in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. These measures are also used by investors, lending institutions and credit rating agencies as an indicator of our operating performance, our ability to incur and service debt, and as a measurement to value companies in the telecommunications sector. These are not recognized measures under GAAP and do not have standardized meaning under IFRS, so they may not be a reliable way to compare us to other companies. Non-GAAP Most comparable measure Why we use it How we calculate it IFRS financial measure Adjusted operating • To evaluate the performance of our businesses, and when Operating income Operating income profit or loss and making decisions about the ongoing operations of the business add back related margin and our ability to generate cash flows. depreciation and amortization, impairment • We believe that certain investors and analysts use adjusted of assets, stock-based compensation operating profit to measure our ability to service debt and to expense (recovery) and restructuring, meet other payment obligations. acquisition and other expenses • We also use it as one component in determining short-term incentive compensation for all management employees.

Adjusted net • To assess the performance of our businesses before the effects Net income from continuing operations Net income income of these items, because they affect the comparability of our add back financial results and could potentially distort the analysis of stock-based compensation expense Earnings per share Adjusted basic and trends in business performance. (recovery), restructuring, acquisition and diluted earnings per • Excluding these items does not imply they are non-recurring. other expenses, impairment of assets, gain share on spectrum distribution, gain on sale of investment, income tax adjustments on these items including adjustments due to legislative change

Pre-tax and after- • An important indicator of our financial strength and Adjusted operating profit Cash flows from tax free cash flow performance because it shows how much cash we have minus operating activities available to repay debt and reinvest in our company. spending on property, plant and equipment, • We believe that some investors and analysts use free cash flow interest on long-term debt net of interest to value a business and its underlying assets. capitalized

Adjusted net debt • To conduct valuation-related analysis and make decisions about Total long-term debt Long-term debt capital structure. plus • We believe this helps investors and analysts analyze our current portion of long-term debt, net Debt enterprise and equity value and assess various leverage ratios as Derivatives liabilities, deferred transaction performance measures. costs, short-term borrowings, minus cash and cash equivalents.

84 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS – – – 85 69 519 522 348 524 519 522 (213) 2012 10,789 $ 1,781 $ 3.43 $ 1,781 $ 3.41 $ 1,725 $ 1,693 $ 3.32 $ 3.26 $ 1,725 $ 1,725 $ 1,693 $ 1,693 $ 3.30 $ 3.24 $ 10,441 $ 11,169 December 31, 2012 – – 93 (51) Years ended December 31 hare 515 518 650 515 518 2013 S 1,669 1,170 (2,301) 13,343 $ 1,769 $ 3.43 $ 1,769 $ 3.42 $ 1,669 $ 1,669 $ 1,669 $ 3.24 $ 3.24 $ 1,669 $ 1,669 $ 3.22 $ 3.22 $ 12,173 $ 11,734 ROGERS COMMUNICATIONS INC. December 31, 2013 2013 ANNUAL REPORT number of shares outstanding average number of shares outstanding operations (assets) continuing operations number of shares outstanding operations securities securities average number of shares outstanding Adjusted net income Divided by: weighted average Adjusted net income Divided by: diluted weighted Net income from continuing Net income Net Debt Derivatives liabilities Deferred transaction costs Short-term borrowings Diluted net income from Diluted net income Divided by: weighted average Net income from continuing Effect on net income of dilutive Effect on net income of dilutive Divided by: diluted weighted Cash and cash equivalents operations continuing operations Adjusted basic earnings per share: Adjusted basic earnings per share Adjusted diluted earnings per share: Adjusted diluted earnings per share Basic earnings per share: Reconciliation of Adjusted Net Debt (In millions of dollars) Long-term debt Current portion of long-term debt Add (deduct): How We Calculate Adjusted Earnings Per (In millions of dollars,share except amounts; per number ofoutstanding shares in millions) Basic earnings per share – continuing Basic earnings per share Diluted earnings per share: Net income Diluted earnings per share – Diluted earnings per share Adjusted net debt – 92 13 77 80 92 77 80 92 54 (14) 380 680 248 (663) (380) (233) 2012 2012 2012 2,029 1,819 (2,142) $ 3,421 $ 1,649 $ 1,725 $ 2,766 $ 4,834 $ 1,781 – – – 8 85 84 85 84 85 (40) (47) (30) 496 700 (709) (238) (496) 2013 2013 2013 2,044 1,898 Years ended December 31 Years ended December 31 Years ended December 31 (2,240) $ 3,990 $ 1,548 $ 1,669 $ 2,926 $ 4,993 $ 1,769 net of capitalization expenses expenditures expenses expenses Interest on long-term debt expense, Restructuring, acquisition and other Property, plant and equipment Cash income taxes Interest paid Change in non-cash working capital Other adjustments Cash income taxes Stock-based compensation expense Add (deduct): Depreciation and amortization Impairment of assets Restructuring, acquisition and other Stock-based compensation expense Impairment of assets Restructuring, acquisition and other Gain on sale of TVtropolis Gain on spectrum distribution tax change Cash provided by operating activities Add (deduct): Reconciliation of Pre-tax and After-tax Free Cash Flow Net income from continuing operations (In millions of dollars) Reconciliation of Adjusted Net Income Reconciliation of Adjusted Operating Profit Operating income (In millions of dollars) (In millions of dollars) Pre-tax free cash flow After-tax free cash flow Add (deduct): Adjusted operating profit Income tax impact of above items Income tax adjustment, legislative Adjusted net income MANAGEMENT’S DISCUSSION AND ANALYSIS

SUMMARY OF FINANCIAL RESULTS OF LONG-TERM DEBT GUARANTOR

Our outstanding public debt, $2.5 billion bank credit and letter of credit The following table sets forth the selected unaudited consolidating facilities and Derivatives are unsecured obligations of RCI, as obligor, summary financial information for RCI for the periods identified below, and Rogers Communications Partnership (RCP), as either co-obligor or presented with a separate column for: (i) RCI, (ii) RCP, (iii) our non- guarantor, as applicable. guarantor subsidiaries (Other Subsidiaries) on a combined basis, (iv) consolidating adjustments, and (v) the total consolidated amounts.

Years ended December 31 (unaudited) Other Consolidating RCI1, 2 RCP1, 2 Subsidiaries1, 2 Adjustments1, 2 Total (In millions of dollars) 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Selected Statement of Income data measures: Revenue $ 14 $ 5 $ 11,028 $ 10,970 $ 1,822 $ 1,666 $ (158) $ (155) $ 12,706 $ 12,486 Operating income (loss) (207) (166) 3,129 2,959 75 44 (71) (71) 2,926 2,766 Net income (loss) 1,670 1,693 3,093 2,929 772 778 (3,866) (3,707) 1,669 1,693

As at period end December 31 (unaudited) Other Consolidating RCI1, 2 RCP1, 2 Subsidiaries1, 2 Adjustments1, 2 Total (In millions of dollars) 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Selected Balance Sheet data measures: Current assets $ 16,592 $ 1,682 $ 11,035 $ 8,209 $ 3,594 $ 1,905 $ (26,900) $ (9,575) $ 4,321 $ 2,221 Non-current assets 19,464 27,388 12,731 12,232 21,678 6,642 (34,593) (28,865) 19,280 17,397 Current liabilities 14,853 9,717 3,014 2,776 15,269 1,129 (28,530) (10,620) 4,606 3,002 Non-current liabilities 13,018 12,082 293 438 1,186 179 (171) 149 14,326 12,848

1 For the purposes of this table, investments in subsidiary companies are accounted for by the equity method. 2 Amounts recorded in current liabilities and non-current liabilities for RCP do not include any obligations arising as a result of being a guarantor or co-obligor, as the case may be, under any of RCI’s long-term debt.

86 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS % % % % % % 87 8 4 49 38 8.7 1.06 GAAP Canadian % % % % % % 6 4 liable way to compare res and should not be 49 34 8.8 1.18 % % % % % % 2 3 49 39 8.5 1.32 ROGERS COMMUNICATIONS INC. IFRS % % % % % % 89 86 40 35 2.3 2.2 2.1 2.1 2 1 351 405 452 446 190 180 131 119 (123) (117) (77) (75) 3.24 2.86 2.59 2.38 (113) (112) (95) ` (114) 3.30 2.913.41 2.64 3.17 2.41 2.94 2.53 48 40 2012 2011 2010 2009 8.6 1,074 1,052 1,003 937 1,864 1,793 1,686 1,619 2,214 2,297 2,305 2,296 9,437 9,335 8,977 8,494 3,768 3,572 3,760 4,273 3,002 2,549 2,833 2,748 2,392 2,140 1,964 2,597 1,484 1,107 933 563 2,951 2,721 2,591 2,643 3,215 3,280 3,108 3,018 1,620 1,611 1,461 1,407 3,358 3,309 3,190 3,074 1,605 1,549 1,419 1,300 1.29 15,850 14,790 13,273 12,745 $ 1.58 $ 1.42 $ 1.28 $ 1.16 $ 59.79 $ 60.20 $ 62.62 $ 63.59 $ 19,618 $ 18,362 $ 17,033 $ 17,018 $ 12,848 $ 12,241 $ 10,440 $ 9,997 $ 1,693 $ 1,563 $ 1,502 $ 1,478 $ 19,618 $ 18,362 $ 17,033 $ 17,018 $ 12,486 $ 12,346 $ 11,999 $ 11,537 $ 1,725 $ 1,590 $ 1,532 $ 1,499 $ 4,834 $ 4,739 $ 4,668 $ 4,407 $ 3.26 $ 2.88 $$ 2.61 9,576 $ $ 9,114 2.38 $ 8,437 $ 8,197 $ 7,280 $ 7,138 $ 6,973 $ 6,685 $ 2,142 $ 2,127 $ 1,821 $ 1,841 $ 3.32 $ 2.93$ $ 3.43 2.66 $ $ 3.20 2.41 $ 2.96 $ 2.53 $ 3,063 $ 3,036 $ 3,173 $ 3,067 $ 1,781$ 2,029 $ 1,736 $ 1,973 $ 1,704 $ 2,181 $ 1,569 $ 1,919 % % % % % % 2.4 3 2 374 106 161 3.22 3.22 3.42 (117) (149) 54 44 2013 7.1 1,153 1,961 2,127 9,503 4,669 4,606 4,897 1,487 3,211 3,751 1,704 3,475 1,718 1.24 18,932 2013 ANNUAL REPORT $ 1.74 $ 59.58 $ 23,601 $ 14,326 $ 1,669 $ 23,601 $ 12,706 $ 1,669 $ 4,993 $ 3.24 $ 10,255 $ 7,270 $ 2,240 $ 3.24 $ 3.43 $ 3,157 $ 1,769 $ 2,044 1 1 1 1,2 : 2 1 1 1 heet: S Dividend payout ratio Wireless chum Dividends declared per share Wireless blended ARPU Phone subscribers Internet subscribers Television subscribers Wireless subscribers Adjusted operating profit growth Shareholders’ equity Total liabilities Current liabilities Revenue growth Long-term liabilities Other assets Investments Intangible assets Corporate items and intercompany eliminations Diluted Goodwill RBS Media Cable Basic Property, plant and equipment, net RBS Media Corporate items and intercompany eliminations Diluted Diluted Wireless Cable Dividends as a percentage ofReturn pre-tax on free assets cash flow Basic Basic Wireless Adjusted net debt/adjusted operating profit considered as a substitute orus alternative to for other GAAP companies. measures. See These “Non-GAAP are Measures” not for defined information terms about under these IFRS, measures, and including do how not we have calculate standard them. meanings, so may not be a re Adjusted operating profit, adjusted net income, adjusted diluted earnings per share,As defined. pre-tax See free “Key cash Performance Indicators”. flow and adjusted net debt are Non-GAAP measu ubscriber count results (000s) Additional wireless metrics S Adjusted net income from continuing operations Ratios: Liabilities and Shareholders’ Equity Adjusted operating profit Net income Adjusted earnings per share from continuing operations Net income from continuing operations Earnings per share from continuing operations Earnings per share Balance Assets Income and Cash Flow: Revenue Pre-tax free cash flow Property, plant and equipment expenditures 1 2 FIVE-YEAR SUMMARY OF CONSOLIDATED FINANCIAL RESULTS Years Ended December 31 (In millions of dollars, except per share amounts, percentages and ratios) MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING December 31, 2013

The accompanying consolidated financial statements of Rogers The Audit Committee meets regularly with management, as well as the Communications Inc. and its subsidiaries and all the information in internal and external auditors, to discuss internal controls over the Management’s Discussion and Analysis (MD&A) are the responsibility of financial reporting process, auditing matters and financial reporting management and have been approved by the Board of Directors. issues; to satisfy itself that each party is properly discharging its Management has prepared the consolidated financial statements in responsibilities; and to review MD&A, the consolidated financial accordance with International Financial Reporting Standards as issued statements and the external auditors’ report. The Audit Committee by the International Accounting Standards Board. The consolidated reports its findings to the Board of Directors for its consideration when financial statements include certain amounts that are based on approving the consolidated financial statements for issuance to the management’s best estimates and judgments and, in their opinion, shareholders. The Audit Committee also considers the engagement or present fairly, in all material respects, Rogers Communications lnc.‘s re-appointment of the external auditors before submitting it to the financial position, results of operations and cash flows. Management board for review and for shareholder approval. has prepared the financial information presented elsewhere in MD&A The consolidated financial statements have been audited by KPMG LLP, and has ensured that it is consistent with the consolidated financial the external auditors, in accordance with Canadian generally accepted statements. auditing standards and the standards of the Public Company Management has developed and maintains a system of internal controls Accounting Oversight Board (United States) on behalf of the that further enhances the integrity of the consolidated financial shareholders. KPMG LLP has full and free access to the Audit statements. The system of internal controls is supported by the internal Committee. audit function and includes management communication to employees about its policies on ethical business conduct. February 11, 2014 Management believes these internal controls provide reasonable assurance that: • transactions are properly authorized and recorded • financial records are reliable and form a proper basis for the preparation of consolidated financial statements, and • properly account for and safeguard the assets of Rogers Communications Inc. and its subsidiaries. The Board of Directors is responsible for overseeing management’s Guy Laurence Anthony Staffieri, FCPA, FCA responsibility for financial reporting and is ultimately responsible for President and Executive Vice President and reviewing and approving the consolidated financial statements. The Chief Executive Officer Chief Financial Officer Board carries out this responsibility through its Audit Committee. INDEPENDENT AUDITORS’ REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of Rogers Communications Inc.: An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. We have audited the accompanying consolidated financial statements The procedures selected depend on our judgment, including the of Rogers Communications Inc., which comprise the consolidated assessment of the risks of material misstatement of the consolidated statements of financial position as at December 31, 2013 and 2012, the financial statements, whether due to fraud or error. In making those consolidated statements of income, comprehensive income, changes in risk assessments, we consider internal control relevant to the entity’s shareholders’ equity and cash flows for the years ended December 31, preparation and fair presentation of the consolidated financial 2013 and 2012, and notes, comprising a summary of significant statements in order to design audit procedures that are appropriate in accounting policies and other explanatory information. the circumstances. An audit also includes evaluating the Management’s Responsibility for the Consolidated Financial appropriateness of accounting policies used and the reasonableness of Statements accounting estimates made by management, as well as evaluating the Management is responsible for the preparation and fair presentation of overall presentation of the consolidated financial statements. these consolidated financial statements in accordance with International We believe that the audit evidence we have obtained in our audits is Financial Reporting Standards as issued by the International Accounting sufficient and appropriate to provide a basis for our audit opinion. Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated Opinion financial statements that are free from material misstatement, whether In our opinion, the consolidated financial statements present fairly, in all due to fraud or error. material respects, the consolidated financial position of Rogers Communications Inc. as at December 31, 2013 and 2012, and its Auditors’ Responsibility consolidated financial performance and its consolidated cash flows for Our responsibility is to express an opinion on these consolidated the years ended December 31, 2013 and 2012 in accordance with financial statements based on our audits. We conducted our audits in International Financial Reporting Standards as issued by the accordance with Canadian generally accepted auditing standards and International Accounting Standards Board. the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. Chartered Professional Accountants, Licensed Public Accountants February 11, 2014 Toronto, Canada

88 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 89 92 80 (32) 250 (671) (620) (0.06) (0.06) 2012 7,729 1,819 2,766 2,345 1,725 $ 1,693 $ 12,486 $ 3.32 $ 3.30 $ 3.26 $ 3.24 – – – – 85 81 2013 (742) (596) 7,797 1,898 2,926 2,265 1,669 $ 1,669 $ 3.24 $ 3.22 $ 12,706 $ 3.24 $ 3.22 ROGERS COMMUNICATIONS INC. 6 3 4 8 5 9 10 10 10 10 13 Note 12, 13 7, 14, 25 2013 ANNUAL REPORT Earnings per share from continuing operations Operating costs Restructuring, acquisition and other expenses Depreciation and amortization Impairment of assets Loss per share from discontinued operations Loss per share from discontinued operations Earnings per share from continuing operations Net income for the year Earnings per share – basic: Operating revenue The accompanying notes are an integral part of the consolidated financial statements. Operating expenses: Operating income Finance costs Income before income taxes Income tax expense Years ended December 31 Consolidated Statements of Income (In millions of Canadian dollars, except per share amounts) Loss from discontinued operations, net of tax Other income Net income from continuing operations Earnings per share – basic Earnings per share – diluted: Earnings per share – diluted CONSOLIDATED FINANCIAL STATEMENTS

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

Years ended December 31 Note 2013 2012 Net income for the year $ 1,669 $ 1,693

Other comprehensive income (loss):

Items that will not be reclassified to net income: Defined benefit pension plans: Remeasurements 22 134 (237) Related income tax recovery (expense) 22 (36) 64 Items that will not be reclassified to net income 98 (173)

Items that may subsequently be reclassified to net income: Change in fair value of available-for-sale investments: Increase/(decrease) in fair value 181 (216) Related income tax recovery (expense) (23) 26 158 (190) Cash flow hedging derivative instruments: Increase/(decrease) in fair value of derivative instruments 197 (94) Reclassification to net income for foreign exchange (gain)/loss on long-term debt (343) 85 Reclassification to net income for foreign exchange gain on expenditures (19) (9) Reclassification to net income of accrued interest 44 61 Related income tax recovery (expense) 10 (8) (111) 35 Items that may subsequently be reclassified to net income 47 (155) Other comprehensive income (loss) for the year 145 (328) Comprehensive income for the year $ 1,814 $ 1,365

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

90 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 8 7 91 42 98 31 24 31 348 144 344 417 458 464 2012 2,221 9,576 3,002 1,501 3,768 1,536 3,215 2,951 1,484 2,135 10,441 15,850 $ 19,618 $ 213 $ 19,618 $– 7 63 40 83 73 31 22 350 328 438 148 397 2013 4,321 4,606 1,170 1,702 4,669 1,509 3,751 3,211 1,487 2,344 12,173 10,255 18,932 $ 23,601 $ 2,301 $ 650 $ 23,601 ROGERS COMMUNICATIONS INC. 9 9 16 17 18 20 17 18 20 21 23 26 27 11 20 12 13 13 14 20 15 7, 28 Note 16, 20 2013 ANNUAL REPORT John H. Clappison, FCPA, FCA Director Current portion of long-term debt Current portion of derivative instruments Unearned revenue Cash and cash equivalents Accounts receivable Other current assets Short-term borrowings Accounts payable and accrued liabilities Income tax payable Current portion of provisions Current portion of derivative instruments Property, plant and equipment Total current assets Derivative instruments Goodwill Other long-term assets Deferred tax assets Shareholders’ equity Total current liabilities Provisions Other long-term liabilities Total liabilities Total liabilities and shareholders’ equity Guarantees Alan D. Horn, CPA, CA Director On behalf of the Board: Subsequent events The accompanying notes are an integral part of the consolidated financial statements. Commitments and contingent liabilities Assets Current assets: Intangible assets Investments Derivative instruments Total assets Liabilities and shareholders’ equity Current liabilities: Long-term debt December 31 Consolidated Statements of(In Financial millions of Position Canadian dollars) Deferred tax liabilities CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Shareholders’ Equity (In millions of Canadian dollars)

Available- Class A Class B for-sale Voting shares Non-Voting shares financial Total Number Number Share Retained assets Hedging shareholders’ Year ended December 31, 2013 Amount of shares Amount of shares premium earnings reserve reserve equity (000s) (000s) Balances, January 1, 2013 $ 72 112,462 $ 397 402,788 $ – $ 3,046 $ 243 $ 10 $ 3,768 Net income for the year – – – – – 1,669 – – 1,669 Other comprehensive income (loss): Defined benefit pension plans, net of tax – – – – – 98 – – 98 Available-for-sale investments, net of tax – – – – – – 158 – 158 Derivative instruments, net of tax – – – – – – – (111) (111) Total other comprehensive income (loss) – – – – – 98 158 (111) 145 Comprehensive income for the year – – – – – 1,767 158 (111) 1,814 Transactions with shareholders, recorded directly in equity: Repurchase/cancellation of Class B Non-Voting shares (note 23) – – (1) (591) – (21) – – (22) Dividends declared – – – – – (896) – – (896) Shares issued on exercise of stock options – – 5 84 – – – – 5 Total transactions with shareholders – – 4 (507) – (917) – – (913) Balances, December 31, 2013 $ 72 112,462 $ 401 402,281 $ – $ 3,896 $ 401 $ (101) $ 4,669

Available- Class A Class B for-sale Voting shares Non-Voting shares financial Total Number Number Share Retained assets Hedging shareholders’ Year ended December 31, 2012 Amount of shares Amount of shares premium earnings reserve reserve equity (000s) (000s) Balances, January 1, 2012 $ 72 112,462 $ 406 412,395 $ 243 $ 2,443 $ 433 $ (25) $ 3,572 Net income for the year – – – – – 1,693 – – 1,693 Other comprehensive income (loss): Defined benefit pension plans, net of tax – – – – – (173) – – (173) Available-for-sale investments, net of tax – – – – – – (190) – (190) Derivative instruments, net of tax – – – – – – – 35 35 Total other comprehensive income (loss) – – – – – (173) (190) 35 (328) Comprehensive income for the year – – – – – 1,520 (190) 35 1,365 Transactions with shareholders, recorded directly in equity: Repurchase of Class B Non-Voting shares (note 23) – – (10) (9,637) (243) (97) – – (350) Dividends declared – – – – – (820) – – (820) Shares issued on exercise of stock options – – 1 30 – – – – 1 Total transactions with shareholders – – (9) (9,607) (243) (917) – – (1,169) Balances, December 31, 2012 $ 72 112,462 $ 397 402,788 $ – $ 3,046 $ 243 $ 10 $ 3,768

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

92 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS – – – – – – 8 93 80 73 77 (90) (31) (14) (36) (25) (57) 671 610 270 136 (131) (140) (350) (233) (707) (803) (317) (248) (380) (680) 2012 2,090 1,819 4,729 4,481 3,421 (2,142) (2,834) (1,240) $ 1,693 $15 $ (248) $ 360 $ 213 – – – 9 (9) 59 52 84 (29) (69) (37) (21) (47) (32) (14) 180 662 650 742 596 213 238 (356) (876) (114) (496) (700) 2013 2,578 1,898 1,571 2,088 4,948 5,186 3,990 (3,473) (2,240) (1,080) (1,029) $ 1,669 $58 $ 238 $– $ 2,301 7 7 7 5 9 13 12 14 13 18 18 20 20 18 20 23 23 13 13 22 24 25 ROGERS COMMUNICATIONS INC. Note 12,13 2013 ANNUAL REPORT Depreciation and amortization Gain on sale of TVtropolis Program rights amortization Income tax expense Pension contributions, net of expense Stock-based compensation expense Other Impairment of assets Finance costs Gain on spectrum distribution forward contracts forward contracts Adjustments to reconcile net income to net cash flows from operating activities: Other current assets Non-cash acquisition of spectrum licences Net income for the year Accounts receivable Accounts payable and accrued liabilities Unearned revenue Other Transaction costs incurred Proceeds received on short-term borrowings Repurchase of Class B Non-Voting shares, net of issuances Change in non-cash working capital items related to property, plant and equipment Issuance of long-term debt Dividends paid Proceeds on sale of TVtropolis Proceeds on settlement of cross-currency interest rate exchange agreement and debt-related Repayment of long-term debt Additions to program rights Payment on settlement of cross-currency interest rate exchange agreement and debt-related Investments Acquisitions and other strategic transactions, net of cash acquired Change in non-cash operating working capital items Income taxes paid Interest paid Additions to property, plant and equipment Supplemental cash flow disclosure: Cash provided by (used in): Operating activities: Cash and cash equivalents (bankbank advances) advances. As are at defined December as 31, cash 2013 and and 2012, short-term the deposits, balance which of have cash an and original cash maturity equivalents was of comprised less of than cash 90 and days, demand less deposits. The change in non-cash operating working capital items is as follows: Cash used in investing activities The accompanying notes are an integral part of the consolidated financial statements. Financing activities: Years ended December 31 Consolidated Statements of Cash(In millions Flows of Canadian dollars) Cash provided by (used) in financing activities Change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Cash provided by operating activities Investing activities: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Notes to Consolidated Financial Statements

We, us, our, Rogers, Rogers Communications and the Company refer to Basis of Consolidation Rogers Communications Inc. and our subsidiaries. RCI refers to the legal Subsidiaries entity Rogers Communications Inc., not including our subsidiaries. RCI Subsidiaries are entities we control. We include the financial statements also holds interests in various investments and ventures. of our subsidiaries in our consolidated financial statements from the date we gain control of them until our control ceases. We eliminate all NOTE 1: NATURE OF THE BUSINESS intercompany transactions and balances on consolidation. Rogers Communications is a diversified Canadian communications and Business Combinations media group. Substantially all of our operations and sales are in We account for acquisitions of subsidiaries using the acquisition Canada. RCI is incorporated in Canada and its registered office is method of accounting. We calculate the fair value of the consideration located at 333 Bloor Street East, Toronto, Ontario, M4W 1G9. RCI’s paid as the fair value at the acquisition date of the following: shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A • assets given, plus and RCI.B) and on the New York Stock Exchange (NYSE: RCI). • equity instruments issued, less We report our results of operations in four segments: • liabilities incurred or assumed at the date of exchange.

Wireless Wireless telecommunications operations for We measure goodwill as the fair value of the consideration transferred, consumers and businesses less the net recognized amount of the identifiable assets acquired and liabilities assumed, all measured at fair value as of the acquisition date. Cable Cable telecommunications operations, When the excess is negative, a bargain purchase gain is recognized including cable television, Internet and immediately in profit or loss. cable telephony for Canadian consumers and businesses We use estimates and judgment to determine the fair value of assets acquired and liabilities assumed, using the best available information Business Solutions Network connectivity through our fibre including information from financial markets. This may include network assets to support a range of voice, discounted cash flow analyses which utilize key assumptions such as data, networking, data centre and cloud- discount rates, attrition rates, and terminal growth rates to estimate based services for medium and large future earnings. We expense the transaction costs associated with the Canadian businesses, governments, and acquisitions as we incur them. other telecommunications providers Media A diversified portfolio of media properties, See note 7 for information related to business combinations in 2013 including television and radio broadcasting, and 2012. digital media, multi-platform shopping, Use of Estimates and Judgments publishing and sports media and When preparing our financial statements, management makes entertainment judgments, estimates and assumptions that affect how accounting policies are applied and the amounts we report as assets, liabilities, Wireless, Cable and Business Solutions are operated by our subsidiary, revenue and expenses. Significant changes in the assumptions, Rogers Communications Partnership, and our other wholly owned including those related to our future business plans and cash flows, subsidiaries. Media is operated by our wholly owned subsidiary Rogers could materially change the carrying amounts we record. Actual results Media Inc. and its subsidiaries. could be different from these estimates. See note 3 for more information about our operating segments. We use estimates that are inherently uncertain in the following key areas: Statement of Compliance • considering inputs to determine the fair value of assets acquired and We prepared our consolidated financial statements according to liabilities assumed in business combinations (see Basis of International Financial Reporting Standards (IFRS) as issued by the Consolidation, above) International Accounting Standards Board (IASB). Our Board of • considering industry trends and other factors to determine the Directors approved the consolidated financial statements for the years estimated useful lives of property, plant and equipment (see Property, ended December 31, 2013 and 2012 on February 12, 2014. Plant and Equipment, below) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES • capitalizing direct labour, overhead and interest costs to property, plant and equipment (see Property, Plant and Equipment, below) Basis of Presentation • determining the recoverable amount of non-financial assets when All amounts, except per share amounts, are in Canadian dollars, which testing for impairment (see Impairment, below), and is our functional currency, and rounded to the nearest million, unless • measuring the fair value of derivative instruments (see note 20), otherwise noted. We prepare the consolidated financial statements on a pension obligations (see note 22) and stock-based compensation historical cost basis, except for certain financial instruments, liabilities liabilities (see note 24). for cash-settled share-based payments and the net deferred pension liability, which we measure at fair value as described in the notes.

94 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 95 , below) ROGERS COMMUNICATIONS INC. Goodwill and Intangible assets 2013 ANNUAL REPORT useful lives since weforeseeable future believe (see they are likely to betaxes (see renewed note 27), for and the liabilities (see note 27). the independent dealer or subscriber in direct sales activated which is approximately three years the customer contract television stations, is featured indigital our publications properties or displayed on our satellite providers’ subscribers baseball season and goods are sold credit based on the fair valuecan of be the obtained future when goods the and credit services is that redeemed customer and we provide the goods or services to the award credits that we expect to be redeemed • deciding to designate our spectrum licences as assets with indefinite • interpreting tax rules and• regulations determining when we the calculate probability income of loss when we assess contingent • Record revenue as the service is provided • Record revenue as the services or products are delivered • Record a reduction of equipment revenues when the equipment is • We defer and amortize these fees over the• related service period, In Business Solutions we defer and amortize fees over the length of • We record these fees as part of equipment revenue • Record revenue in the month the services are delivered to cable and • Recognize revenue when it can be determined • Record revenue at the time the related games are aired • Estimate the portion of the original sale to allocate to the award • Defer the allocated amount until the awards are• redeemed by the Recognize revenue based on the redemption of award credits relative , below) Property, Plant and Equipment the purpose of impairment testing (see note 13) equipment thatconsumption of we benefitsrepresentative derived believe from of thoseunderlying most the assets assets (see and economic accurately are substance more represent of the the use of the ource of revenue How we recognize it S Monthly subscriber fees for wireless, cable,services, telephony rental and of Internet equipment, network services and media subscriptions Revenue Recognition We recognize revenue when we can estimate its amount and are reasonably assured that we can collect it. Revenue is recorded net of discounts. Revenue from airtime, data services, roaming,services, long-distance pay-per-use and services and optional other sales ofRevenue products from the sale of wireless and cable equipmentEquipment subsidies related to providingsubscribers equipment to new and existing Installation fees charged to subscribers in Cable • Record revenue when the equipment is delivered and acceptedActivation by fees charged to subscribers in WirelessAdvertising revenue • These fees do notMonthly meet subscription the revenues criteria received as by a televisionsubscriptions separate from stations unit cable for of and accounting satellite providers Toronto Blue Jays’ revenue from home game • admission and concessions These fees doToronto not Blue meet Jays’ the • revenue criteria from as Recognize theSharing a revenue Major Agreement separate as League which unit the Baseball redistributes of related Revenue funds accounting games betweenbased are member on played clubs each during club’s the relative revenues Revenue from Toronto Blue Jays, radioagreements and television broadcast Awards granted to customers through customerare loyalty considered programs, a which separately identifiabletransactions component of the sales • Record revenue in the period the advertising airs on our radio or Interest income on credit card receivables • Record revenue as earned using the effective interest rate method We also use significant judgment• in the following determining areas: cash generating units and the allocation• of goodwill choosing for methods for depreciating our property, plant, and NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Multiple Deliverable Arrangements Income Taxes We offer some products and services as part of multiple deliverable Income tax expense includes both current and deferred taxes. We use arrangements. We record these as follows: judgment to interpret tax rules and regulations to calculate the expense • Divide the products and services into separate units of accounting, as recorded each period. We recognize income tax expense in net income long as the delivered elements have stand-alone value to customers unless it relates to an item recognized directly in equity or other and we can determine the fair value of any undelivered elements comprehensive income. objectively and reliably. Current tax expense is tax we expect to pay or receive based on our • Measure and allocate the arrangement consideration among the taxable income or loss during the year. We calculate the current tax accounting units based on their relative fair values and recognize expense using tax rates enacted or substantively enacted at the revenue when the relevant criteria are met for each unit. reporting date, and including any adjustment to taxes payable or Unearned Revenue receivable related to previous years. We record payments we receive in advance of providing goods and Deferred tax assets and liabilities arise from temporary differences services as unearned revenue. Advance payments include subscriber between the carrying amounts of the assets and liabilities we record in deposits, cable installation fees and amounts subscribers pay for services our consolidated statements of financial position and their respective and subscriptions that will be provided in future periods. tax bases. We calculate deferred tax assets and liabilities using enacted or substantively enacted tax rates that will apply in the years the Stock-Based Compensation and Other Stock-Based temporary differences are expected to reverse. Payments Stock Option Plans Deferred tax assets and liabilities are offset if there is a legally Cash-settled share appreciation rights (SARs) are attached to all stock enforceable right to offset current tax liabilities and assets and they options granted under our employee stock option plan. This feature relate to income taxes levied by the same authority on: allows the option holder to choose to receive a cash payment equal to • the same taxable entity, or the intrinsic value of the option (the amount by which the market price • different tax entities where these entities intend to settle current tax of the Class B Non-Voting share exceeds the exercise price of the option liabilities and assets on a net basis or the tax assets and liabilities will on the exercise date) instead of exercising the option to acquire Class B be realized simultaneously. Non-Voting shares. We classify all outstanding stock options as liabilities We recognize a deferred tax asset for unused losses, tax credits and and carry them at their fair value, determined using option valuation deductible temporary differences to the extent that it is probable that techniques that comply with IFRS 2, Share-based Payment. We re- future taxable income will be available to use the asset. We use measure the fair value of the liability each period and amortize it to judgement to evaluate whether we can recover a deferred tax asset operating costs using graded vesting, either over the four-year vesting based on our assessment on existing tax laws, estimates of future period or to the date an employee is eligible to retire (whichever is profitability and tax planning strategies. shorter). We rely on estimates and assumptions when determining the amount Restricted Share Unit (RSU) Plan of current and deferred tax, and take into account the impact of We record outstanding RSUs as liabilities, measuring the liabilities and uncertain tax positions and whether additional taxes and interest may compensation costs based on the award’s fair value, and recording it as be due. If new information becomes available and changes our a charge to operating costs over the vesting period of the award. If the judgment on the adequacy of existing tax liabilities, these changes award’s fair value changes after it has been granted and before the would affect the income tax expense in the period that we make this settlement date, we record the resulting changes in the liability as a determination. charge to operating costs in the year that the change occurs. The payment amount is established as of the vesting date. See note 9 for more information about our income taxes.

Deferred Share Unit (DSU) Plan Foreign Currency Translation We record outstanding DSUs as liabilities, measuring the liabilities and We translate amounts denominated in foreign currencies into Canadian compensation costs based on the award’s fair value at the grant date. If dollars as follows: the award’s fair value changes after it has been granted and before the • monetary assets and monetary liabilities – at the exchange rate in settlement date, we record the resulting changes in our liability as a effect at the date of the consolidated statements of financial position charge to operating costs in the year that the change occurs. The • non-monetary assets, non-monetary liabilities and related payment amount is established as of the exercise date. depreciation and amortization expenses – at the historical exchange rates Employee Share Accumulation Plan • revenue and expenses other than depreciation and amortization – at Employees voluntarily participate in the share accumulation plan by the average rate for the month when the transaction was recorded. contributing a specified percentage of their regular earnings. We match employee contributions up to a certain amount, and record our Financial Instruments contributions as a compensation expense in the year we make them. Recognition See note 24 for more information about our stock-based compensation We initially recognize cash and cash equivalents, accounts receivables, and other stock-based payments. debt securities and accounts payable and accrued liabilities on the date they originate, and apply the criteria noted below. All other financial assets and financial liabilities are initially recognized on the trade date when we become a party to the contractual provision of the instrument.

96 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 97 ROGERS COMMUNICATIONS INC. hare as necessary) S • Cross-currency interest rate• exchange agreements Forward foreign exchange agreements (from time to time • Forward foreign exchange agreements • Total return swap agreements 2013 ANNUAL REPORT attributable to issuing them,effective interest and method. then at amortized cost using the We assess whether an embeddedfrom derivative the is host required contract to andbecome be a accounted separated party for to as the a contract. derivative when we first Earnings Per Fair Value We estimate fair valuesmarket at information a and specificOur information point estimates about in are the time,judgment. subjective based financial and on instruments. Changes involve relevant estimates. uncertainties in and significant assumptions couldCurrent and significantly Non-Current Classification affectWe classify the financial assetsthey and are financial due liabilities in asthe part non-current or when consolidated in statements wholeassets more of and than financial one liabilities, year position. includingwithin from the All the one portion date other year of offinancial financial position, long-term from are liabilities classified the as due current liabilities. dateOffsetting of Financial Assets the andWe Liabilities consolidated offset statements financial of assetsamount in and the financial consolidated liabilitieshave statements a and of legal present right financial therealize to position the net offset when asset them and we and liability simultaneously. intend to settle on a net basis or We calculate basic earnings perattributable share to by our dividing Class the A netnumber and income of B or Class shareholders loss A by and B the shares weighted outstanding average We during calculate the year. diluted earnings perloss share attributable by adjusting to theaverage net number Class income of or A Classall A and dilutive and potential B B common shares. sharesfor shareholders We outstanding calculating use diluted for and the earnings the treasury per the effect stockemployee share, stock method which of weighted options considers and the other impact potentially of dilutive instruments. See note 10 forshare. our calculations of basic and dilutedInventories net income per We measure inventories,and including merchandise handsets, for resale, digital atin, cable the first-out lower basis) equipment of and its costwrite net (determined realizable down on value. a to We first- will netvalue. reverse realizable a previous value if the inventories later increase in and interest payments for US denominated long-term debt US dollar denominated expenditures compensation expense The risk they manage Types of derivative instruments offsetting the changes inhedging, and fair value or cash flows ofand the hedged item item, itstrategy, including is and the theeffectiveness risk of the management methods hedging relationship. objectives we and will use to assess the ongoing private investments. Weplus initially measure transaction these costsrecord assets directly them at on attributable the fair consolidated torecord value statements subsequent of acquiring changes financial them, position. in We their and losses, fair value, in other other thanassets, impairment comprehensive we reclassify income. the Whenthe cumulative available-for-sale we change financial assets in dispose reserve fair to of value net income. recorded the in measure these assetsattributable to at acquiring fair them, andeffective value interest then method, at plus recording amortized changes cost transaction through using net costs income. the directly payable and accruedmeasure these liabilities, liabilities and at long-term fair value debt. plus We transaction costs initially directly Debt DerivativesExpenditure Derivatives • Impact of fluctuations in • foreign exchangeEquity rates Impact Derivatives on of principal fluctuations in foreign exchange rates on forecasted • Impact of fluctuations in share price on stock-based We use derivativespurposes. only to manageWe record risk, all andposition derivatives not on at our for theirestimated consolidated speculative statements estimated fair of fairaccounting financial value hedges value. in of Weitem other derivative impacts record comprehensive net income changes instrumentsincome income. until in Hedge that the immediately. ineffectiveness hedged the derivative Any are is recognized instruments changes effective in thatinstruments in net for have accounting the purposes not areincome. estimated recognized been immediately fair in net designated value as of When we hedging designate a derivativeaccounting instrument purposes, as we: a hedging instrument• for first determine that the hedging instrument will be highly effective in • formally document the relationship between the hedging instrument We assess quarterly whetherhighly the effective in hedging offsetting instrument theof continues the changes item in to it the is be fair hedging. value or cash flows Classification and Measurement We measure financialinitial instruments recognition, by based grouping onWe the them classify purpose into all of of classes thefor-sale our individual on non-derivative or instruments. financial loans assetsliabilities and as as either other receivables. financial available- We liabilities. • classify Available-for-sale non-derivative financial financial assets – include our publicly traded and • Loans and receivables – includes accounts receivable. We initially • Other financial liabilities – includes short-term borrowings, accounts Derivative Instruments We use derivative instruments to manage risks related to certain activities we are involved with. They include: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Transaction Costs We separately calculate our net obligation for each defined benefit plan We defer transaction costs associated with issuing long-term debt and by estimating the amount of future benefits that employees have direct costs we pay to lenders to obtain revolving credit facilities, and earned in return for their service in the current and prior years, and amortize them using the effective interest method over the life of the discounting those benefits to determine their present value. related instrument. We accrue our pension plan obligations as employees provide the Provisions services necessary to earn the pension. We use a discount rate based on We record a provision when a past event creates a legal or constructive market yields on high quality corporate bonds at the measurement date obligation that can be reasonably estimated and is likely to result in an to calculate the accrued pension benefit obligation. Remeasurements of outflow of economic resources. We recognize a provision even when the accrued pension benefit obligation are determined at the end of the the timing or amount of the obligation may be uncertain. year, and include actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling. These are recognized in We make significant estimates when measuring a provision for a other comprehensive income and retained earnings. present obligation, basing the provision on the amount we estimate will be required to settle it, using the most reliable evidence available at the The cost of pensions is actuarially determined and takes into account reporting date and including the risks and uncertainties associated with the following assumptions and methods for pension accounting related the obligations. We then discount our expected future cash flows to the to our defined benefit plans: date of the consolidated statements of financial position at a pre-tax • the expected rates of salary increases for calculating increases in rate that reflects current market assessments of the time value of future benefits money and the risks specific to the liability. • mortality rates for calculating the life expectancy of plan members, and Decommissioning and Restoration Costs • past service costs from plan amendments are immediately expensed We use network and other assets on leased premises in some of our in net income. business activities. We expect to exit these premises in the future, so we make provisions for the costs associated with decommissioning the We recognize contributions to defined contribution plans as an assets and restoring the locations to their original standards when we employee benefit expense in operating costs in the consolidated have a legal or constructive obligation to do so. We calculate these statements of income in the periods the employees provide the related costs based on a current estimate of the costs that will be incurred, services. project those costs into the future based on management’s best See note 22 for more information about our pension plans. estimates of future trends in prices, inflation and other factors, and discount them to their present value. We revise our forecasts when Termination Benefits business conditions or technological requirements change. We recognize termination benefits as an expense when we are committed to a formal detailed plan to terminate employment before When we record a decommissioning liability, we record a the normal retirement date and it is not realistic that we will withdraw it. corresponding asset in property, plant and equipment and depreciate the asset based on its useful life following our depreciation policies for Property, Plant and Equipment property, plant and equipment. We record the accretion of the liability Recognition and Measurement as a charge to finance costs in the consolidated statements of income. We recognize property, plant and equipment at cost, less accumulated Restructuring depreciation and accumulated impairment losses. We make provisions for restructuring when we have approved a Cost includes expenditures that are directly attributable to the detailed and formal restructuring plan, and either the restructuring has acquisition of the asset. The cost of self-constructed assets also started or management has announced the plan’s main features to the includes: employees affected by it. • the cost of materials and direct labour Onerous Contracts • costs directly associated with bringing the assets to a working We make provisions for onerous contracts when the unavoidable costs condition for their intended use of meeting our obligation under the contract exceed the benefits we • costs of dismantling and removing the items and restoring the site expect to realize from it. We measure these provisions at the present where they are located (see Provisions, above), and value of the expected cost of terminating the contract or the expected • borrowing costs on qualifying assets. cost of continuing with the contract (whichever is lower). We recognize We use estimates to determine certain costs that are directly any impairment loss on the assets associated with the contract before attributable to self-constructed assets. These estimates primarily include we make the provision. certain internal and external direct labour associated with the See note 17 for a breakdown of our provisions. acquisition, construction, development or betterment of our network. They also include interest costs, which we capitalize to certain property, Employee Benefits plant and equipment during construction and development. Pension Benefits We use significant estimates to determine the estimated useful lives of We offer contributory and non-contributory defined benefit pension property, plant and equipment, considering industry trends such as plans that provide employees with a lifetime monthly pension on technological advancements, our past experience, our expected use and retirement. our review of asset lives.

98 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 99 below). Impairment, ROGERS COMMUNICATIONS INC. we measure the excess of the carrying 2013 ANNUAL REPORT loans andamount receivables – of the assetexpect over the to present derive valueallowance from of for future it, cash doubtful if flowsincome. accounts, we any. and The recognized difference as is a allocated loss to in an net Brand namesCustomer relationshipsRoaming agreementsMarketing agreementsSee note 7assets. and note 13 for more informationImpairment about our intangible Financial Assets We consider aevidence financial that one assetestimated or to future more cash be events flows,Financial have impaired and assets had the if that a effect areindividually. there 3 negative can significant to All be 10 effect is in other years reliably on financial value objective estimated. the assets its are nature are of tested assessed each for asset. collectively 7 to impairment based 20 on years We 12 measure years impairment for financial assets• 3 as years follows: impairment as intangible assetsfor with multi-year finite sports usefulthe programming lives. games Program arrangements are aired. rights are expensed when Goodwill We record goodwill arisingvalue from of business the combinations separatelylower when identifiable than the the assets consideration fair and weof liabilities paid (including we the the acquired recognized is amount consideration non-controlling transferred is interest, lowerand if than liabilities, the any). we separatelyincome. immediately identified If record assets the the difference fair asSee a note value 7 gain and of in note 13 net for the more information aboutIntangible our Assets goodwill. We record intangible assets wevalue, acquire and in test for business impairment combinations as at required fair (see We do not amortize intangiblebroadcast assets with licences) indefinite because lives (spectrum therethat and is these no assets foreseeable are limituse expected judgment to to to generate the determine net period theall cash indefinite inflows relevant life for of us. factors, thesetypical We assets, including life analyzing the cycledemand expected of for the usage the asset ofAfter products and review the and of anticipated asset, services the changes competitive,our that the legal, in view the regulatory that the and asset these other market factorsand helps factors, do broadcast it generate. not licences. is limit the useful lives ofWe our amortize spectrum intangible assetsbasis with over finite their useful estimated livesreview useful on their lives a useful as straight-line lives, notedat residual in least values once the a and table year. the below. We amortization methods useful life and lease term Straight-line 4 to 10 years and depreciate them over the expected life of the cable customer. Cable customersinstallation and revenues are recorded. amortize them as the related reconnect software Acquired Program Rights Program rights are contractualbroadcast rights we television acquireaccumulated from third programs. amortization parties and to capitalize We program accumulated rights and impairment recordstatements the of losses. related financial them liabilities position We on whenprogram the the at licence consolidated is period begins availablepurchases cost and the in for operating use, less costsover in and the the amortize consolidated expected statements themyears. exhibition of If to income period, programs other are whichrights not external ranges to scheduled, be we from impaired consider one and the related write to program them five off. Otherwise, we test them for Components of an itemdifferent useful of lives. property, We plantdepreciation make significant and methods, estimates depreciation equipment when rates mayrequires determining and have asset taking useful intofactors. lives, We which account review industrycircumstances these trends decisions change. at and Wedepreciation least rates company-specific will once or each changeprevious asset year estimates. useful our or We lives when depreciationincome recognize if prospectively. the they methods, effect are of different these fromWe changes our capitalize in development net recognition expenditures as if an they asset,lives meet and once they amortize the are them criteria available over for for use. their expectedWe expense useful research expenditures andas incurred. maintenance and training costs See note 12equipment. for more information about our property, plant and Customer premise equipmentLeasehold improvements Straight-lineEquipment and vehicles Straight-line 3 to 5 years Diminishing balance Over shorter 3 of to estimated 20 years AssetBuildingsCable and wireless networkComputer equipment and Straight-line 3 to 30 years Basis Diminishing balance 5 to 25 years Estimated useful life We incur costs related to subscriber• acquisition and We retention. capitalize cable installation costs that relate• to the We cable network defer direct incremental installation costs related to• reconnect We expense all other costs asWe incurred. calculate gains andequipment losses by on comparing theitem’s carrying disposal the amount, of proceeds and property, recognizein from the the plant consolidated gain and the statements or of loss disposal income. in with otherDepreciation income the We depreciate property, plant andlife by equipment charging over depreciation its expense estimatedincome to as useful the follows: consolidated statements of NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• available-for-sale financial assets – we measure the excess of the cost If our estimate of the asset’s or cash generating unit’s recoverable to acquire the asset (less any impairment loss we have previously amount is less than its carrying amount, we reduce its carrying amount recognized), over its current fair value, if any. The difference is to the recoverable amount, and recognize the loss in net income. reclassified from the available-for-sale reserve in equity to net We reverse a previously recorded impairment loss if our estimate of a income. previously impaired asset’s or cash generating unit’s recoverable Investments in Associates and Joint Arrangements amount has increased such that the impairment recorded in the At the end of each reporting period, we assess whether there is previous year has reversed. The reversal is recognized by increasing the objective evidence that impairment exists in our investments in asset’s or cash generating unit’s carrying amount to our new estimate associates and joint arrangements. If objective evidence exists, we of its recoverable amount. The new carrying amount cannot be higher compare the carrying amount of the investment to its recoverable than the carrying amount we would have recorded if we had not amount and recognize the excess over the recoverable amount, if any, recognized an impairment loss in previous years. We do not reverse as a loss in net income (see Recognition of Impairment Charge, below). impairment losses recognized for goodwill.

Goodwill and Indefinite-Life Intangible Assets Investments We test goodwill and indefinite-life intangible assets for impairment Investments in Associates and Joint Arrangements once a year, or more frequently if we identify indicators of impairment. An entity is an associate when we have a significant influence on the Goodwill is allocated to cash generating units (or groups of cash entity’s financial and operating policies but do not control it. We are generating units) based on the level at which management monitors generally presumed to have significant influence over an entity when goodwill, which cannot be higher than an operating segment. The we hold more than 20% of the voting power. allocation involves considerable management judgement, and is made to cash generating units (or groups of cash generating units) that are A joint arrangement exists when there is a contractual agreement that expected to benefit from the synergies of the business combination establishes joint control over its activities and requires unanimous from which the goodwill arose. consent for strategic financial and operating decisions. We classify our interests in joint arrangements into one of two categories: A cash generating unit is the smallest identifiable group of assets that • Joint operations, when we have the rights to the assets and generates cash inflows largely independent of the cash inflows from obligations for the liabilities related to the arrangement other assets or groups of assets. • Joint ventures, when we have the rights to the net assets of the Non-Financial Assets with Finite Useful Lives arrangement. Our non-financial assets with finite useful lives include property, plant We use the equity method to account for our investments in associates and equipment, and intangible assets. We test these assets for and joint ventures, and we use the proportionate consolidation method impairment whenever an event or change in circumstances indicates to account for our investments in joint operations. that their carrying amounts may not be recoverable. The asset is impaired if the recoverable amount is less than the carrying amount. If We recognize our investments in associates and joint ventures initially at we cannot estimate the recoverable amount of an individual asset cost, and then increase or decrease the carrying amounts based on our because it does not generate independent cash inflows, we test the share of each entity’s income or loss after initial recognition. entire cash generating unit for impairment. Distributions we receive from these entities reduce the carrying amount of our investments. Recognition of Impairment Charge The recoverable amount of a cash generating unit or asset is the higher We eliminate unrealized gains and losses from our investments in of: associates or joint ventures against our investment, up to the amount of • its fair value less costs to sell, or our interest in the entity. • its value in use. Investments in Publicly Traded and Private Companies We estimate an asset’s (or cash generating unit’s) fair value less costs to We classify our investments in publicly traded and private companies sell using the best information available to estimate the amount we where we have no control or significant influence as available-for-sale could obtain from disposing the asset in an arm’s length transaction, investments, and account for them as follows: less the estimated cost of disposal. • publicly traded companies: we record them at fair value based on publicly quoted prices We estimate value in use by discounting estimated future cash flows • private companies: we record them at fair value using well from a cash generating unit or asset to their present value using a pre- established market or asset based techniques, or projected income tax rate that reflects current market assessments of the time value of valuation techniques, applying them to each investment’s future money and the risks specific to the asset. Estimated cash flows are operating and profitability prospects. based on management’s assumptions and are supported by external information. We record changes in the fair value of these investments in other comprehensive income until we dispose of the investments or they The above concepts used to determine the recoverable amount require become impaired. significant estimates such as: • future cash flows See note 14 for more information about our investments. • terminal growth rate, and • the discount rate applied.

100 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 101 – In December – On January 1, 2013, we – On January 1, 2013, we – In May 2013, the IASB ROGERS COMMUNICATIONS INC. – In June 2013, the IASB amended IAS 39 to provide relief 2013 ANNUAL REPORT IFRS 13, Fair Value Measurementadopted (IFRS IFRS 13) 13,source on of a guidance on prospective howvalue basis, fair measurement value which guidance is contained provides measured,defines replacing in a fair the individual fair single value IFRSs.value. and IFRS 13 establishes It aeliminate does framework the not for practicability measuringthat introduce exceptions currently fair to new exist in fairrelevant fair certain value fair standards. value measurements Wefinancial value statements. measurements have incorporated requirements or the IAS throughout 19, Employee these Benefitsadopted (2011) IAS consolidated (IAS 19, 19) which changesor the basis for expense determining theeliminated related income the to concept(income) of defined and return replaced benefit it on withapplying plan a plans. the net discount assets interest rate This and cost tocost that the interest amendment is takes net calculated cost liability by into (asset).liability The account (asset) net interest any duringbenefit changes the payments. The period in adoption of as thean the amended a increase net standard in result resulted defined in financecomprehensive of benefit costs income, contributions of and for $7income a for million the and net year amaterial effect ended impact decrease December on of in 31, net assets other nil 2012for as more and at in information did about December our not comprehensive 31, pensionIAS 2012. have plans. See a 36, note 22 Impairmentamended IAS of 36 to Assets clarifyamount the (IAS of circumstances assets in 36) which or the cash-generatingto recoverable units is clarify required to be therequirement disclosed, disclosures to required,impairment disclose (or and the reversals) to wherefair discount value the introduce less rate recoverable an costs amounttechnique. used of (based explicit disposal) on in The is determinedbeginning determining using amendments a on present arepermitted. value or We effective early after adoptedmade for the this January required policy disclosures. annual as 1, of periods January 2014, 1, with 2013 and early adoption IAS 32, Financial2011, Instruments: the Presentation IASB (IAS amendedentity IAS 32) 32 has to clarifyamendments a the are meaning effective of current for whenJanuary annual an legally 1, periods 2014 beginning enforceable anddo on are not or right required expect after to thisfinancial of be to statements. applied have set-off. retrospectively. a We significantIAS The impact on 39, our(IAS consolidated 39) Financial Instruments:from discontinuing an Recognition existing hedgingthat relationship and was when a not novation Measurement contemplatedmeets in specific the criteria. originalperiods beginning The hedging on documentation or amendments afterapplied January are 1, 2014 effective retrospectively. and are foramendment required on We to annual our be consolidated financial are statements. assessing the impact of this • • • Recent Accounting Pronouncements The IASB hasstandards. issued These newDecember changes 31, 2013, standards in and could and have• accounting an amendments impact on are future to periods. not existing yet effective at • – As a result of – As a result of the adoption of the adoptiondetermining of IFRS whetherwhether 10, we we we have consolidatecontrol have our model control that investees. changed is applicable over IFRSit to our requires 10 all and the investees. approach consolidation introduces Among ofon other consequently a to an things, investee the new if basis wetransitional control of the provisions investee deconclusion facto of for circumstances. IFRS our Inchanges 10, investees in accordance the with at weassessment. current the January re-assessed or 1, the comparativeIFRS 2013. 11, period Joint control Arrangements We as (IFRSIFRS 11) made a 11, result no we ofarrangements. have this changed Under how IFRSarrangements we as evaluate 11, either our joint weon interests operations our classify or in joint right joint our venturesarrangements. to depending interests the When assets instructure and making joint obligations of this for thevehicles, the assessment, the liabilities arrangements, contractual we of terms theand the consider of circumstances. the legal the arrangements We form andjoint have other arrangements of facts re-evaluated and any ourproportionate have involvement separate accounted for in consolidationdepending these our on either whether method, the using investmentor the is or defined a as joint amaterial the joint venture, to operation the respectively. current equity or The comparative adoption year. method of IFRS 11 was not IFRS 10, Consolidated Financial Statements (IFRS 10) line of business, or • New Accounting Pronouncements Effective inWe 2013 adoptedconsolidated financial the statements on January following 1,• 2013. IFRS accounting 10, Consolidated• Financial Statements changes IFRS 11, Joint for• Arrangements IFRS our 12, Disclosure• of Interest 2013 in IFRS Other 13, Fair Entities • Value Measurement IAS 19, Employee• Benefits (2011) IAS 28, Investments• in Associates and IAS Joint 36, Ventures Impairment of Assets The accounting pronouncements weour adopted financial that results hadfollows: or an impact require on • further explanation are explained as Discontinued Operations A discontinued operationoperations is and cash a flows thatRogers component are and: clearly of distinguished from our the• rest business of represents that a separate has • major line of is business part of a single coordinated• plan is to a subsidiary dispose we of have acquired aWhen with we separate the classify intention major a to re-sell. componentour as a comparative discontinued income operation,operation we and restate had comprehensive beenyear. income discontinued as from though the the startSee of note 6 the for information comparative about discontinued operations. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• IFRIC 21, Levies (IFRIC 21) – In May 2013, the IASB issued IFRIC 21, • IFRS 9, Financial Instruments (IFRS 9) – The IASB issued IFRS 9, which which provides guidance on when to recognise a liability for a levy replaces IAS 39, Financial Instruments: Recognition and imposed by a government, both for levies that are accounted for in Measurement, establishes principles for the financial reporting of accordance with IAS 37 Provisions, Contingent Liabilities and financial assets and financial liabilities that will present relevant and Contingent Assets and those where the timing and amount of the useful information to users of financial statements for their levy is certain. The Interpretation identifies the obligating event for assessment of the amounts, timing and uncertainty of an entity’s the recognition of a liability as the activity that triggers the payment future cash flows. This new standard also includes a new general of the levy in accordance with the relevant legislation. It provides the hedge accounting standard which will align hedge accounting more following guidance on recognition of a liability to pay levies (i) the closely with risk management. It does not fundamentally change the liability is recognised progressively if the obligating event occurs over types of hedging relationships or the requirement to measure and a period of time, and (ii) if an obligation is triggered on reaching a recognize ineffectiveness, however it will provide more hedging minimum threshold, the liability is recognised when that minimum strategies that are used for risk management to qualify for hedge threshold is reached. The standard is effective for annual periods accounting and introduce more judgment to assess the effectiveness beginning on or after January 1, 2014, with early adoption of a hedging relationship. The IASB has not yet communicated the permitted. We are assessing the impact of this new standard on our mandatory effective date of IFRS 9. We are assessing the impact of consolidated financial statements. this new standard on our consolidated financial statements.

NOTE 3: SEGMENTED INFORMATION Our reportable segments are Wireless, Cable, Business Solutions and The Chief Executive Officer and Chief Financial Officer are the chief Media. All four segments operate substantially in Canada. Corporate operating decision makers and regularly review our operations and items and eliminations includes our interests in businesses that are not performance by segment. They review adjusted operating profit as a reportable operating segments, corporate administrative functions and key measure of performance for each segment and to make decisions eliminations of inter-segment revenue and costs. We follow the same about the allocation of resources. Adjusted operating profit is income accounting policies for our segments as those described in note 2 to before restructuring, acquisition and other expenses, stock-based these consolidated financial statements. Segment results include items compensation expense, depreciation and amortization, impairment of directly attributable to a segment as well as those that can be allocated assets, finance costs, other income, and income taxes. This measure of on a reasonable basis. We account for transactions between reportable segment operating results is different from operating income on the segments in the same way we account for transactions with external consolidated statements of income. parties and eliminate them on consolidation.

Information by Segment Corporate Business items and Consolidated Year ended December 31, 2013 Wireless Cable Solutions Media eliminations totals Operating revenue $ 7,270 $ 3,475 $ 374 $ 1,704 $ (117) $ 12,706 Operating costs 1 4,113 1,757 268 1,543 32 7,713 Adjusted operating profit 3,157 1,718 106 161 (149) 4,993

Restructuring, acquisition and other expenses 85 Stock-based compensation expense 1 84 Depreciation and amortization 1,898 Operating income 2,926

Finance costs (742) Other income 81 Income before income taxes $ 2,265 Additions to property, plant and equipment $ 865 $ 1,105 $ 107 $ 79 $ 84 $ 2,240 Goodwill $ 1,146 $ 1,256 $ 426 $ 923 $ – $ 3,751 Total assets $ 9,775 $ 5,527 $ 1,195 $ 2,247 $ 4,857 $ 23,601

1 Included in operating costs on the consolidated statements of income.

102 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 1 9 (9) 77 80 92 (28) 250 103 (671) 2012 2012 totals 1,819 2,766 $ 691 $ 671 $ 2,345 14 23 12 (16) (25) Consolidated 2013 $ 734 $ 742 items and Corporate eliminations ROGERS COMMUNICATIONS INC. Business Solutions Media 2013 ANNUAL REPORT Interest on long-term debt NOTE 6: DISCONTINUED OPERATIONS We discontinued our Video segmentreported in the the second Video quarter results ofthat of 2012 time. and operations as discontinued operations at As of Junerentals 2012, or Rogers’ sales at stores itsserve retail no customers’ locations. wireless longer Certain and cable of offered needs. these stores video continueThe and to game Videooperations segment in didDecember not 2013 31, 2013 have or and 2012.the any Cash segment any flows for from 2013 results significant operating weredid activities nil not from for assets have (2012 any – discontinued cash $2 oryears flows million). ended from December The investing liabilities 31, Video or 2013 financing segment and activities as 2012. for the at NOTE 5: FINANCE COSTS Operating revenueOperating costsRestructuring, acquisition and other expensesLoss before income taxesIncome tax recoveryLoss from discontinued operations for the year (30) $ (32) $ 18 (30) (42) 10 Change in fair value of derivative instruments Interest on pension liability Foreign exchange loss (gain) Capitalized interest Other 4,217 1,753 262 1,430 (10) 7,652 6 15 317 561 998 477 162 183 345 351 784 264 276 296 173 (123) 2012 2012 6,719 7,280 1,868 3,343 3,358 1,620 4,138 1,813 $ 1,605 $ 7,729 $ 6,402 $ 12,486 9 12 278 522 498 213 149 362 374 762 316 305 321 190 (117) 2013 2013 6,748 7,270 1,809 1,159 3,466 3,475 1,704 4,126 1,940 $ 1,541 $ 7,797 $ 6,470 $ 12,706 1 1 compensation Included in operating costs on the consolidated statements of income. Additions to property, plant and equipmentGoodwillTotal assets $ 1,123 $ 832 $ 61 $ 55 $ 1,146 $ 9,769 $ $ 1,000 $ 71 4,719 $ 215 $ $ 835 2,142 $ $ 854 2,157 $ $ 2,138 – $ 19,618 $ 3,215 Depreciation and amortization Impairment of assets Operating income Finance costs Other income Income before income taxes Adjusted operating profitRestructuring, acquisition and other expenses 3,063 1,605 89 190 (113) 4,834 Stock-based compensation expense NOTE 4: OPERATING COSTS 1 Revenue by Product Operating revenueOperating costs $ 7,280 $ 3,358 $ 351 $ 1,620 $ (123) $ 12,486 Year ended December 31, 2012 Wireless Cable Wireless: Postpaid Prepaid Network revenue Equipment sales Total Wireless Cable: Television Internet Cable telephony Service revenue Equipment sales Total Cable Business Solutions: Next generation Legacy Service revenue Equipment sales Total Business Solutions Media: Advertising Subscription Retail Other Total Media Corporate items and intercompany eliminations Cost of equipment sales and direct channel subsidies Merchandise for resale Other external purchases Employee salaries and benefits and stock-based NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7: BUSINESS COMBINATIONS Blackiron Data (Blackiron) We made several acquisitions in 2013, which we describe below. We On April 17, 2013, we closed an agreement to acquire 100% of the accounted for these using the acquisition method of accounting in common shares of Blackiron for cash consideration of $198 million. accordance with IFRS 3, Business Combinations, and included the Blackiron provides Business Solutions the ability to enhance its suite of results of operations of the acquired entities from the dates of enterprise-level data centre and cloud computing services along with acquisition in our consolidated statements of income. Goodwill fibre-based network connectivity services. recognized on these acquisitions is not tax deductible. It represents the expected operational synergies with the business acquired and/or Score Media Inc. (theScore) intangible assets that do not qualify to be recognized separately. On April 30, 2013, we received final regulatory approval to acquire theScore. We had already paid $167 million on October 19, 2012 to Transactions with Shaw Communications Inc. (Shaw) obtain 100% of the common shares of theScore. These shares were In January 2013, we entered into an agreement with Shaw to secure an held in trust until we received regulatory approval and obtained control option to purchase Shaw’s Advanced Wireless Services (AWS) spectrum of the business. The acquisition builds on our sports broadcasting holdings in 2014, and to acquire Mountain Cable, Shaw’s cable system capabilities and reinforces our delivery of premium sports content to its in Hamilton, Ontario. As part of the agreement, Shaw acquired our audiences on their platform of choice. one-third equity interest in TVtropolis. Pivot Data Centres (Pivot) Spectrum Licence Option Deposit On October 1, 2013, we purchased 100% of the common shares of In 2013, we paid total deposits of $250 million for the option to Pivot for cash consideration of $158 million. Pivot further positions purchase Shaw’s AWS spectrum holdings pending regulatory approval, Business Solutions as a leader in Canadian data centre and hosting and included the deposits in other long-term assets in the consolidated services and will enhance Business Solutions’ ability to serve key markets statements of financial position. Under the agreement, $200 million of with enhanced managed and cloud service offering. this balance is refundable if the transaction does not close. We do not expect to exercise the spectrum licence option until late 2014, and it is Other subject to approval by Industry Canada. In 2013, we completed other individually immaterial acquisitions for total cash consideration of $40 million. Acquisition of Mountain Cable On May 1, 2013, we closed the agreement with Shaw to purchase We also paid deposits totalling $45 million in late 2013 related to the 100% of the common shares of Mountain Cable for cash consideration acquisition of certain dealer stores, which closed on January 2, 2014. of $398 million. Mountain Cable delivers a full bundle of advanced This deposit is included in other long-term assets (note 15). The fair cable television, Internet and telephony services over its recently values of the assets acquired and liabilities assumed in this acquisition is upgraded hybrid fibre and coaxial cable network. The acquisition under review and expected to be finalized in the first quarter of 2014. expands our cable business in the Southern Ontario area and will allow us to drive synergies through a larger service area and cost efficiencies.

Sale of TVtropolis In 2013, we closed the transaction to sell our one-third interest in TVtropolis after obtaining regulatory approval from the CRTC. We received proceeds of $59 million and recorded a gain of $47 million in other income.

104 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS es 19 es. 105 $44 $63 2013 As at December 31, 5 Multiple segments f the CRTC’s approval of the Pivot Other Total $ 1 $– $23 Solutions ROGERS COMMUNICATIONS INC. 1 4 ––4 – 3 (2) – – 24 7 3 3 17 22 17 5 Media Business $ 44 $ 27 $ 24 $ 8 3 32 (16) As at $ 53 $ 85 $ (75) 2012 Additions Payments Mountain Cable Blackiron theScore Pivot December 31, Solutions 2013 ANNUAL REPORT –– – – 104 – – (4) – (3) 104 (7) ––522 9 3 4 12 6 – 25 135 45 – 36 17 233 Cable Business $ 256 $ 129 $ 48 $ 78 $ 25 $ 536 Mountain Cable Blackiron theScore 1 2 3 Depreciation and amortization Operating costs Restructuring, acquisition and other costs cost structure (2012 – $89 million), and Excludes acquisition transaction costs. Goodwill related to other acquisitions was allocated to Media and Business Solutions. We paid the $167 millionCustomer related relationships to are theScore amortized on over OctoberBroadcast a 19, licence period 2012. is ranging an from indefinite 5Acquisition life to transaction intangible 10 asset. costs years. for theScore include $17 million related to the CRTC tangible benefits commitments that were required as a condition o transaction. Operating income (loss) Severances resulting from the targeted restructuring of the employee base $ 50 $ 53 $ (59) Acquisition and other costs We expect to pay the remaining liability over the next two years. The remaining liability of $63 million as at December 31, 2013, is included in accounts payable and accrued liabilities and other long-term liabiliti NOTE 8: RESTRUCTURING, ACQUISITION ANDIn OTHER 2013, EXPENSES we incurred: • $53 million of restructuring expenses related to• severances $32 resulting million from of the acquisition targeted transaction restructuring costsThe and of table other our costs below employee (2012 shows – base the $3 and additions million). to to improve liabilities our related to the restructuring, acquisition and other costs and payments made against the liabiliti If all of the$172 above million acquisitions and had incremental operating occurred income on would January haveThe been 1, $3 2013, pro million we for forma 2013. estimate disclosuresindication our of are incremental what based our revenue consolidated from on financial these results estimates acquisitions will and2012 be would in assumptions Acquisitions have the been we future. believeThere were are no reasonable. individually material The business information combinations or provided divestitures is in 2012. not necessarily an in 2013. 1 5 Pro Forma Disclosures The table below showsexpenses the for incremental each acquisition revenue, since operating the income respective dates (loss), of depreciation acquisition and to December amortization 31, and 2013. restructuring, acquisition and other 1 2 3 4 Current liabilitiesOther liabilities Deferred tax liabilitiesFair value of net identifiable assets acquiredGoodwill and liabilities assumedAcquisition transaction costs 142 69 119 80 (5) (44) $ 2 15 (8) (7) $ 1 (6) 425 (7) $ 19 (11) (7) (2) – (28) (69) Final Fair Values of AssetsThe table Acquired below and summarizes Liabilities the final Assumed fair values of the assets acquired and liabilities assumed for all the acquisitions described above. Incremental revenue Operating expenses: Fair value of consideration transferredCash Current assets Property, plant and equipmentCustomer relationships $ 398 $ 198 $ 167 53 $ 158 35 $ 40 11 $ 961 58 1 158 Broadcast licence Goodwill allocated to the following segments NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9: INCOME TAXES Income Tax Expense (Benefit) The table below shows the difference between income tax expense from Years ended December 31 Note 2013 2012 continuing operations, and income tax expense computed by applying the statutory income tax rate to income before income taxes. Continuing operations: Current income tax expense $ 513 $ 428 2013 2012 Deferred tax expense (benefit): Statutory income tax rate 26.5% 26.4% Origination and reversal of temporary differences 89 160 Computed income tax expense $ 600 $ 619 Revaluation of deferred tax Increase (decrease) in income taxes resulting balances due to legislative from: changes 8 54 Revaluation of deferred tax balances due to Recognition of previously legislative changes 8 54 unrecognized deferred tax assets (14) (22) Non-taxable portion of capital gains (9) (61) Recognition of previously unrecognized Total deferred tax expense 83 192 deferred tax assets (14) (22) Income tax expense from continuing Impairment of goodwill and intangible assets – 11 operations 596 620 Non-deductible stock-based compensation 8 9 Income tax expense from discontinued Other items 3 10 operations 6 – (10) Income tax expense from continuing operations $ 596 $ 620 Total income tax expense $ 596 $ 610 Our statutory income tax rate increased from 26.4% in 2012 to 26.5% in 2013 because of changes in Canadian provincial corporate income tax rates.

Deferred Tax Assets and Liabilities 2013 2012 Deferred tax assets $31 $31 Deferred tax liabilities (1,702) (1,501) Net deferred tax liability $ (1,671) $ (1,470)

The table below summarizes the movement of net deferred tax assets and liabilities during 2013 and 2012. Stub period Property, plant and Goodwill and income and equipment and other partnership Non-capital loss Deferred tax assets (liabilities) Inventory intangibles reserve carryforwards Other Total January 1, 2012 $ (484) $ (421) $ (807) $ 104 $ 248 $ (1,360) Benefit (expense) in net income (117) 61 72 (79) (129) (192) Benefit (expense) in other comprehensive income – – – – 82 82 December 31, 2012 (601) (360) (735) 25 201 (1,470) Benefit (expense) in net income (135) (9) 141 19 (99) (83) Benefit (expense) in other comprehensive income – – – – (49) (49) Acquisitions (16) (60) – 2 5 (69) December 31, 2013 $ (752) $ (429) $ (594) $ 46 $ 58 $ (1,671)

As at December 31, 2013 and 2012, we had not recognized deferred There are taxable temporary differences associated with our investment tax assets for the following items. in Canadian domestic subsidiaries. We do not record deferred tax 2013 2012 liabilities for temporary differences when we are able to control the timing of the reversal, and the reversal is not probable in the Capital losses in Canada that can be applied against future capital gains $43 $44 foreseeable future. Reversing these temporary differences would not Tax losses in foreign jurisdictions that expire between 2023 result in any significant tax implications. and 2033 17 34 Deductible temporary differences in foreign jurisdictions 32 45 $92 $ 123

106 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 594 221 376 107 value value value (0.06) (0.06) 2012 6,910 1,522 $ 3.24 $ 3.30 $ 3.26 $ 3.32 Net book Net book Net book $ 632 $ 10,255 – – 2013 $3.22 $3.22 $3.24 $3.24 depreciation Accumulated 407 248 159 3,9721,7641,055 2,644 1,319 1,328 712 445 343 16,805 10,138 6,667 $ 24,897 $ 15,321 $ 9,576 $ 894 $ 260 $ 634 ROGERS COMMUNICATIONS INC. 594 221 376 value Cost 1,522 6,910 Net book $ 10,255 $ 632 (note 7) Depreciation Other Acquisitions December 31, 2013 December 31, 2012 depreciation Accumulated 2013 ANNUAL REPORT Cost Loss per share from discontinued operations Earnings per share from continuing operations Loss per share from discontinued operations Earnings per share from continuing operations value Additions value Additions Acquisitions Depreciation Other Earnings per share – diluted Earnings per share – diluted: Earnings per share – basic Earnings per share – basic: A total of 577,58417,240). options They were were excluded out fromdilutive. of the the calculation since money they for were 2013 anti- (2012 – $ 27,298 $ 17,043 $ 9,576 $ 2,240 $ 158 $ (1,748) $ 29 $ 9,114 $ 2,142 $ – $ (1,678) $ (2) $ 9,576 Net book Net book 3 6 39 (32) 522 519 126 2012 2012 $ 464 $ 293 $ 1,693 $ 1,725 December 31, 2012December 31, 2011 December 31, 2013 December 31, 2012 – 3 2 24 518 515 136 2013 2013 $ 438 $ 276 $ 1,669 $ 1,669 Employee stock options Weighted average number of shares outstanding – basic Loss from discontinued operations Net income for the year from continuing operations Effect of dilutive securities: Weighted average number of shares outstanding – diluted Denominator (in millions): Net income for the year Customer premise equipmentLeasehold improvementsEquipment and vehicles 2,009 492 1,415 1,124 271 748 Computer equipment and software 4,553 3,031 Cable and wireless network 18,197 11,287 Land and buildings $ 923 $ 291 Land and buildingsCable and wireless networkLand and buildingsCable and wireless networkComputer equipment and softwareCustomer premise equipmentLeasehold improvementsEquipment and vehicles 6,667 $ 634 1,235 $ 25 91 $ 3 (1,087) 1,216 $ 4 6,401 (30) $ $ 407 635 364 1,354 – $ 153 30 255 – 345 – 27 $ – 69 – (293) (1,090) $ (2) 2 – (29) (175) $ – (2) 1 (21) 1,328 6,667 (70) – $ 634 (1) 445 159 343 Computer equipment and softwareCustomer premise equipmentLeasehold improvementsEquipment and vehicles 1,328 495 445 159 372 6 343 27 6 86 (310) 44 3 (230) 8 1 (20) 11 (71) 10 Income tax receivable Other Numerator: The tables below summarize the changes in the net carrying amounts of property, plant and equipment during 2013 and 2012. NOTE 12: PROPERTY, PLANT ANDThe EQUIPMENT table below shows property, plant and equipment and accumulated depreciation as at December 31, 2013 and 2012. Cost of equipmentmillion sales (2012 and – $1,707 merchandise million) of for inventory resale costs. includes $1,667 NOTE 11: OTHER CURRENT ASSETS NOTE 10: EARNINGS PER SHARE The table below shows theshare calculation for of 2013 basic and and 2012. diluted earnings per Inventories Prepaid expenses NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, plant and equipment not yet in service and therefore not Depreciation Rates Review depreciated at December 31, 2013 was $882 million (December 31, We reviewed depreciation rates for all of our property, plant and 2012 – $917 million). Capitalized interest on property, plant and equipment in 2013 and made no changes. In 2012, we changed the equipment was recorded at a weighted average rate of approximately estimates of useful lives of certain network, customer premise 5.1% (2012 – 5.8%). equipment, computer equipment and software assets. We accounted for the impact of these changes prospectively, resulting in depreciation expense to be lower by approximately $90 million in 2012 compared to the amount we would have recorded using the previous useful lives.

NOTE 13: GOODWILL AND INTANGIBLE ASSETS Goodwill and Intangible Assets December 31, 2013 December 31, 2012 Cost Cost prior to Accumulated prior to Accumulated impairment Accumulated impairment Net book impairment Accumulated impairment Net book losses amortization losses value losses amortization losses value Goodwill $ 3,972 $ – $ 221 $ 3,751 $ 3,436 $ – $ 221 $ 3,215 Indefinite life intangible assets: Spectrum licences 2,275 – – 2,275 2,231 – – 2,231 Broadcast licences 324 – 99 225 209 – 99 110 Finite life intangible assets: Brand names 438 257 14 167 437 240 14 183 Customer relationships 1,543 1,234 – 309 1,310 1,147 – 163 Roaming agreements 523 400 – 123 523 357 – 166 Marketing agreements 9 8 – 1 63 59 – 4 Acquired program rights 168 52 5 111 162 63 5 94 Total intangible assets 5,280 1,951 118 3,211 4,935 1,866 118 2,951 Total goodwill and intangible assets $ 9,252 $ 1,951 $ 339 $ 6,962 $ 8,371 $ 1,866 $ 339 $ 6,166

The tables below summarize the changes in the net carrying amounts of goodwill and intangible assets in 2013 and 2012.

December 31, 2012 December 31, 2013 Net Net book Acquisitions additions and Current period Net book value (Note 7) disposals Amortization impairment loss value Goodwill $ 3,215 $ 536 $ – $ – $ – $ 3,751 Spectrum licences 2,231 – 44 – – 2,275 Broadcast licences 110 104 11 – – 225 Brand names 183 – – (16) – 167 Customer relationships 163 233 – (87) – 309 Roaming agreements 166 – – (43) – 123 Marketing agreements 4 – 1 (4) – 1 Acquired program rights 94 – 69 (52) – 111 $ 6,166 $ 873 $ 125 $ (202) $ – $ 6,962

December 31, 2011 December 31, 2012 Net Net book additions and Current period Net book value Acquisitions disposals Amortization impairment loss value Goodwill $ 3,280 $ – $ 2 $ – $ (67) $ 3,215 Spectrum licences 1,875 360 (4) – – 2,231 Broadcast licences 116 – 2 – (8) 110 Brand names 200 – 1 (18) – 183 Customer relationships 232 – 1 (70) – 163 Roaming agreements 210 – – (44) – 166 Marketing agreements 12 – 1 (9) – 4 Acquired program rights 76 – 87 (64) (5) 94 $ 6,001 $ 360 $ 90 $ (205) $ (80) $ 6,166

In 2012, we acquired certain 2500 MHz spectrum from Inukshuk Limited Brand names, customer relationships, roaming agreements and Partnership (Inukshuk), a 50% owned joint venture. This resulted in a marketing agreements are all intangible assets with finite lives and we non-cash increase of spectrum licences of $360 million (see note 14). amortize them in depreciation and amortization expense in the consolidated statements of income. This amounted to $150 million in 2013 (2012 – $141 million).

108 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS % 231 855 629 109 2012 Pre-tax $ 624 $ 1,484 discount rates 103 912 575 2013 % $ 809 $ 1,487 Terminal growth rates (years) – we estimate the discounted future ROGERS COMMUNICATIONS INC. Periods used – we estimate the recoverable amount of method Recoverable 2013 ANNUAL REPORT licences spectrum using a perpetuity rate basedgeneral on outlook expected for economic the conditions industry. and a Analyzing discounted cash flows cash flows for periodsgenerating of five unit torecoverable ten amount, and years, and a depending terminalbased on valuation value. the The on cash future method cash oureconomic flows conditions are estimates for and a andunit’s general determining industry. outlook expected Our for the future the discountdebt to cash rates operating equity generating consider ratios market results, andThe certain rates terminal risk of premiums, value among return, unit’s other is operations things. beyond the the value projectedusing time a attributed period perpetuity to rate of based the thegeneral on cash outlook expected flows cash for economic the conditions generating industry. andUsing a a market approach the cash generating unit usingcomparable multiples entities of and operating precedent performance transactions of in that industry. Carrying value of NOTE 14: INVESTMENTS Publicly Traded Companies We hold interests inwe a recorded number unrealized of publicly gainsunrealized traded of losses) with companies. $186 a This million corresponding year income. increase (2012 in – other $225 comprehensive million of We determine its fair value• less costs to sell in one of two ways: • We have madegrowth rates certain to assumptions reflectassumptions variations for in may the expected differ futureconditions discount or cash or other and flows. events. change These It terminal assumptions is quickly therefore may possible negatively depending that affect future future onunits changes and valuations in goodwill, economic of which cash could generating result in impairment losses. Publicly traded companies Private companies Available-for-sale investments Investments in joint arrangements and associates goodwill Carrying value of Life Intangible Assets estimate the discounted futureyears, cash depending on flows the for cash generating periods unit, of and a up terminal to value. future operating five results of theeconomic cash generating conditions unit and after a considering, unit’s general industry. outlook for the cash generating ratios and certain risk premiums, among other things. unit’s operations beyond the projected time period of the cash flows Impairment Losses We did not record anamounts impairment of the charge cash in generating 2013 units since exceeded the theirIn carrying recoverable values. 2012, wevarious recorded cash generating a units in total• the Media impairment segment: $67 charge million in of• goodwill, $80 $8 million million in• for broadcast licences, $5 and million in program rights. The recoverable amounts of2012 these cash than generating 2011 unitscertain mainly were markets. lower due in to the decline in advertising revenue in We test cash generatingallocated units goodwill or and/or groups indefinite life ofas intangible cash at assets generating October for units impairment 1 with there of each is calendar impairment, year. wegenerating When determine unit assessing based whether the on or recoverable theless not amount costs greater to of of sell. its a value cash in useWe or estimate its an asset’s fair value value in• use by: Discounting estimated future cash flows to their present value.• We The future cash flows are based on our estimates• and expected Our discount rates consider market• rates of The return, terminal debt value to is equity the value attributed to the cash generating Impairment Goodwill and Indefinite We amortize the costsperformances of of the acquired related programs, programpurchases recording in rights them operating in over other costs the external inThis amounted expected the to consolidated $52 statements million of in income. 2013 (2012 – $64 million). The table belowgoodwill is or an indefinite life overview intangible assets of that the we consider methods significant. and assumptions we used to determine recoverable amounts for cash generating units with WirelessCable $ 1,146 1,256 $ 2,275 Value in use – Value in use 5 0.5 5 1.0 8.3 9.2 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Private Companies Certain of our joint ventures have non-controlling shareholders that In October 2012, Media completed the purchase of 100% of the have a right to require our joint venture to purchase the non-controlling outstanding shares of theScore for $167 million. The shares were interest at a future date. transferred to an interim CRTC-approved trust which was responsible for the independent management of the business in the normal course NOTE 15: OTHER LONG-TERM ASSETS of operations until final approval by the CRTC was obtained. The shares Note 2013 2012 were accounted for as an investment in a private company as at Spectrum licence deposits 7 $ 250 $– December 31, 2012. Other deposits 7 45 – Long-term receivables 29 19 In 2013, we received final regulatory approval to transfer the Score Deferred installation costs 23 13 Media Inc. business under the control of Rogers and we accounted for Cash surrender value of life insurance 17 16 the acquisition of control under IFRS 3 (note 7). Deferred pension asset 22 8 9 Deferred compensation 8 9 Investments in Joint Arrangements and Associates Other 17 32 We have interests in a number of associates and joint arrangements. $ 397 $98 Certain transactions that occurred in 2012 are described below.

MLSE NOTE 16: ACCOUNTS RECEIVABLE SECURITIZATION MLSE, a sports and entertainment company, owns and operates the Air We entered into an accounts receivable securitization program with a Canada Centre, the NHL’s Toronto Maple Leafs, the NBA’s Toronto Canadian financial institution effective December 31, 2012, which Raptors, the MLS’ Toronto FC, the AHL’s Toronto Marlies and other allows us to sell certain trade receivables into the program. The assets. In August 2012, we, along with BCE Inc., closed the joint proceeds of the sales are committed up to a maximum of $900 million. acquisition of a net 75% equity interest in MLSE. Following a leveraged recapitalization of MLSE, our net cash investment was $540 million, We received funding of $650 million under the program in 2013. We representing a 37.5% equity interest in MLSE. Our investment in MLSE continue to service and retain substantially all of the risks and rewards is a joint venture and is accounted for using the equity method. relating to the accounts receivables we sold, and therefore, the receivables remain recognized on our consolidated statements of Inukshuk financial position and the funding received is recorded as short-term Inukshuk is a joint operation owned 50% by Rogers that was created to borrowings. The buyer’s interest in these trade receivables ranks ahead operate a national fixed wireless telecommunications network to be of our interest. The program restricts us from using the receivables as used by the partners and their subsidiaries. In December 2012, Inukshuk collateral for any other purpose. The buyer of our trade receivables has sold certain spectrum licences and network equipment to its owners at no claim on any of our other assets. The terms of our accounts fair market value. We and the other non-related venturer each receivable securitization program are committed until it expires on purchased 50% of the assets at a fair market value of $1,181 million December 31, 2015. and a carrying value of $250 million. As a result, we recorded: • a gain on investment of $233 million in other income in the As at December 31, 2013, $1,091 million of trade accounts receivables consolidated statement of income, representing our 50% share of were sold to the buyer as security for sale proceeds of $650 million, the Inukshuk gain relating to the assets sold to the other venturer, resulting in an overcollateralization of $441 million. We incurred • spectrum licences of $360 million, which includes a $15 million fee interest costs of $7 million in 2013 (2012 – nil) which we recorded in paid in 2011 to the other venturer to acquire certain blocks of finance costs. spectrum, and network equipment of $13 million representing the fair value of the assets purchased less our share of the Inukshuk gain, and NOTE 17: PROVISIONS • a decrease of $125 million in our investment in Inukshuk, The table below shows our provisions and their classification between representing the carrying value of the assets sold. current and long-term as at December 31, 2012 and 2013.

The following tables provide summary financial information for the joint Decommissioning liabilities Other Total ventures and associates and our portion. We record our investments in December 31, 2012 $ 26 $ 12 $ 38 joint ventures and associates using the equity method. Additions 1 5 6 2013 2012 Adjustment to existing provisions 5 – 5 Current assets $ 153 $ 307 Amounts used (1) (1) (2) Long-term assets 2,434 2,509 December 31, 2013 $ 31 $ 16 $ 47 Current liabilities 334 1,033 Long-term liabilities 1,146 557 Current $ 6 $ 1 $ 7 Long-term 25 15 40 Total net assets $ 1,108 $ 1,226 Our share of net assets $ 554 $ 613 Other provisions include product guarantee provisions, onerous Revenues 648 193 contracts and legal provisions. Expenses (income) 644 (710) Total net income $4$ 903 Our share of net income $2$ 219

110 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . – – – – (1) (68) 348 746 348 547 279 500 500 900 600 199 348 500 800 400 111 (348) 2012 1,000 1,393 1,450 10,858 $ 10,441 $– December 31, tnership (RCP) is an – – (93) 500 500 900 600 532 372 500 800 400 532 798 372 585 298 904 213 691 2013 1,000 1,489 1,450 (1,170) 13,436 $ 12,173 $– December 31, rate Interest ROGERS COMMUNICATIONS INC. Floating amount Principal 2013 ANNUAL REPORT Due date 20162017201820192020 US2021 1,0002022 1,400 5.80% 5002023 6.80% 3.00% 500 US 9002038 1,450 5.38% 2039 4.70% 5.34% 6002040 500 US2041 4.00% 3.00% 2043 350 7.50% US 500 800 6.68% 400 500 6.11% 6.56% 4.50% 201320142014 $US2015 US2015 350 US US 750 6.25% US 350 6.375% 550 5.50% 280 7.50% 6.75% 20232032 US US 850 200 4.10% 2043 8.75% US 650 5.45% 1 2 1 1 2 1 unsecured guarantor. Senior notes and debentures originally issued by RogersSenior notes Cable originally Inc. issued which by Rogers are Wireless now Inc. unsecured which are obligations now of unsecured obligations RCI of and RCI for and for which which Rogers RCP Communications is an Par unsecured co-obligor. enior Notes Less current portion Senior notes Bank credit facility S Interest is paid semi-annually onwhole all or of in our part, senior at notes any and time, debentures. if We we have pay the the option specified to premium. redeem each of our senior notes and debentures, in The interest rate charged on1.00% borrowings to from 2.25% the over bank the credit bankers’ facility acceptance ranges rate from or nil London to Inter-Bank 1.25% Offered per Rate. annum over the bank prime rate or base rate, or Bank Credit and Letter ofWe Credit have Facilities a total ofequally with $2.5 all billion of of our bank senior notes credit and andAs debentures. letter at of December credit 31, facilities.our 2013, letter Each there of of were credit these no facilities facilities totalled advances is $0.5 outstanding billion. unsecured underThe and bank our guaranteed credit $2.0 by facility billion is RCP bank available and credit on ranks a facility fully and revolving letters basis of until credit maturity on outstanding July under 20, 2017 and there are no scheduled reductions prior to maturity 1 2 NOTE 18: LONG-TERM DEBT Deferred transaction costs and discounts Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Senior notes Debentures Senior notes Fair value decrement arising from purchase accounting NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Issuance of Senior Notes The table below provides a summary of the senior notes that we issued in 2013 and 2012.

Discount at Total gross Transaction costs Date Issued Principal amount Due date Interest rate issuance proceeds 1 and discounts 2 2013 Issuances March 7, 2013 US $ 500 2023 3.00% 99.845% March 7, 2013 US $ 500 2043 4.50% 99.055% Subtotal US $ 1,000 Cdn $1,030 Cdn $15 October 2, 2013 US $ 850 2023 4.10% 99.813% October 2, 2013 US $ 650 2043 5.45% 99.401% Subtotal US $ 1,500 Cdn $1,548 Cdn $20 2012 Issuances June 4, 2012 Cdn $ 500 2017 3.00% 99.921% June 4, 2012 Cdn $ 600 2022 4.00% 99.600% Subtotal Cdn $1,100 Cdn $1,100 Cdn $ 9

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

Each of the above senior notes are unsecured and guaranteed by RCP, dividends, all of which are suspended in the event the public debt ranking equally with all of RCI’s other senior notes and debentures, securities are assigned investment grade ratings by at least two of three bank credit and letter of credit facilities. We use derivatives to hedge specified credit rating agencies. As at December 31, 2013, these public the foreign exchange risk associated with the principal and interest debt securities were assigned an investment grade rating by each of the components of all our US dollar denominated senior notes and three specified credit rating agencies and, accordingly, these restrictions debentures (see note 20). have been suspended as long as the investment grade ratings are maintained. Our other senior notes do not have any of these Repayment of Senior Notes and Related Derivative Settlements restrictions, regardless of the related credit ratings. In June 2013, we repaid or bought the entire outstanding principal amount of our US $350 million ($356 million) senior notes due 2013. The repayment dates of certain debt agreements can also be At the same time, the associated Debt Derivatives were also settled at accelerated if there is a change in control of RCI. maturity. See note 20 for more information about our Debt Derivatives. At December 31, 2013 and 2012, we were in compliance with all Principal Repayments financial covenants, financial ratios and all of the terms and conditions The table below shows the principal repayments on our long-term debt of our long-term debt agreements. due in each of the next five years and thereafter as at December 31, 2013.

2014 $ 1,170 NOTE 19: CAPITAL RISK MANAGEMENT 2015 883 Our objectives in managing capital are to ensure we have sufficient 2016 1,000 2017 500 liquidity to meet all of our commitments and to execute our business 2018 1,489 plan. We define capital that we manage as shareholders’ equity Thereafter 8,394 (including issued capital, share premium, retained earnings, hedging reserve and available-for-sale financial assets reserve) and indebtedness $ 13,436 (including current portion of our long-term debt, long-term debt and short-term borrowings). Foreign Exchange We recorded $23 million in foreign exchange losses in 2013 (2012 – We manage our capital structure commitments and maturities and make $9 million gain) in finance costs in the consolidated statements of adjustments based on general economic conditions, financial markets income. These were related to the translation of long-term debt that and operating risks and our investment and working capital was not hedged on an accounting basis. requirements. To maintain or adjust our capital structure, we may, with approval from our Board of Directors, issue or repay debt and/or short- Weighted Average Interest Rate term borrowings, issue shares, repurchase shares, pay dividends or Our effective weighted average rate on all debt and short-term borrowings, undertake other activities as deemed appropriate under the as at December 31, 2013, including the effect of all of the associated Debt circumstances. The board reviews and approves any material transactions Derivative instruments (see note 20), was 5.5% (2012 – 6.1%). that are not part of the ordinary course of business, including proposals Terms and Conditions for acquisitions or other major investments or divestitures, financing The provisions of our $2.0 billion bank credit facility described above transactions and annual capital and operating budgets. impose certain restrictions on our operations and activities, the most We monitor debt leverage ratios such as adjusted net debt to adjusted significant of which are leverage related maintenance tests. operating profit as part of the management of liquidity and The 8.75% debentures due in 2032 contain debt incurrence tests and shareholders’ return to sustain future development of the business, restrictions on additional investments, sales of assets and payment of conduct valuation-related analyses and make decisions about capital.

112 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2 113 (3,244) 5 years More than 2 years 4to5 (1,489) tives. 2 (883) years 1to3 $–$–$– 2 1 ROGERS COMMUNICATIONS INC. 1 year (1,170) $ 650 Less than 2 1 $ 650 cash flows Contractual 2013 ANNUAL REPORT 1 amount Carrying $ 16,300 $ 16,326 $ 4,156 $ 1,919 $ 1,953 $ 8,298 At December 31, 2013,(December we 31, had 2012 – accounts $1,536 receivableaccounts million), net of of of $1,509 an million $104 allowanceDecember for doubtful million 31, 2013, (December $452 millionof 31, (December accounts 2012 31, receivable 2012 – –amounts are $492 $119 outstanding considered million) beyond million). pastthe normal At due, respective credit customers. which terms is and defined conditionsWe as for use variousaccount internal and billing controls, in such advance,services to as when mitigate customers credit credit have risk, checks,violated fully and deposits used will established their suspend on approved paymentprocesses credit limits terms. have or been Whileeliminate effective credit our risk in credit andwill managing there controls continue can credit be to and no risk, bewill assurance effective continue. they that or these cannot that controls our currentCredit credit risk loss related experience toEquity our Debt Derivatives Derivatives, Expenditurecounterparties (Derivatives) Derivatives to and arises the agreements fromassess may the default creditworthiness the on of their the possibilitycounterparty obligations. counterparties default, We to that minimize and the do risk the support not of require the collateral credit orportfolio risk other of security associated to our withStandard & Derivatives these Poor’s rating Derivatives. is (or the The equivalent) held ranging entire from by A-Liquidity to financial Risk AA-. institutionsLiquidity with risk a is theobligations risk as that they we fallcommitments will due. and We not maturities, manage be capital liquidity structure ableoutlined risk and to by financial meet in leverage, managing as our our notemonitoring financial actual 19. and projected We cashsufficient flows also liquidity to to ensure manage meet thatand our we liquidity liabilities will stressed have when risk due,risking conditions, by under damage both to continually without our normal reputation. incurring unacceptable losses or Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar)Cash outflow (Canadian dollar)Cash inflow (Canadian dollar equivalent of US dollar) – – (957) – (957) (6,786) – 923 – 923 6,665 – 1,183 – – 905 – 1,435 3,142 – Net carrying amount of Derivatives (asset) (75) The terms of our accounts receivableRepresents securitization Canadian program dollar are equivalent committed amount until of it US expires dollar on inflows December matched 31, to 2015. an equal amount of US dollar maturities in long-term debt for Debt Deriva Short-term borrowings $ 650 Accounts payable and accrued liabilitiesLong-term debtOther long-term financial liabilitiesExpenditure Derivative instruments: Equity Derivative instrumentsDebt Derivative instruments: 2,344 2,344 38 2,344 13,343 38 – – 13,436 – 1,170 – 13 1,883 14 – 1,989 13 18 8,394 – 6 – – 1 2 December 31, 2013 Credit Risk Credit risk representscounterparty to the a financial financialowing from instrument, loss the in we counterparty, whichterms failed and we could conditions to of have meet its experience an contracts its with amount if obligations us. Our under a credit the risk isbroad primarily customer attributable base to limits our thereceivable in concentration accounts the of receivable. consolidated this Our statements risk.allowances of Our financial for accounts position doubtful are accounts, neton which of management prior estimates based environment. experience Management and uses estimatesfor an to determine assessment doubtful the allowance experience of accounts, in the taking collectionscounterparty current is into past and economic due account and write-offs,our the factors status allowance the of for the such numbercredit account. risk doubtful We associated of as believe with accounts that our days accounts sufficiently our receivable. reflects the the related NOTE 20: FINANCIAL RISK MANAGEMENTINSTRUMENTS AND FINANCIAL We are exposed torisk credit management risk, objective liquidity is riskultimately, to and protect market shareholder our risk. incomemanagement Our strategies value. and discussed primary cash below flows to We ensureexposures and, our are risks consistent design and with the our related business and objectives and risk implement tolerance. the risk The Rogers First100% Rewards owned Credit Card subsidiarySuperintendent of program of Financial (operated Institutions, RCI) which throughlevel requires is of a that regulatory regulated a minimum capital bythat be requirement maintained. the as Rogers at Office December isin 31, in of 2013. the compliance This the with program fourth wasmaterial quarter launched as at of December 31, 2013 2013. andWith the the capital exception requirements ofare are Rogers not not First subject to Rewardsstrategy externally Credit imposed Card capital for program, requirements.December we Our 31, capital 2012. overall risk management has not changed since The tables below setsDecember out 31, the 2013 and undiscounted 2012. contractual maturities of our financial liabilities and the receivable components of our derivatives at NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Carrying Contractual Less than 1to3 4to5 More than December 31, 2012 amount cash flows 1 year years years 5 years Accounts payable and accrued liabilities $ 2,135 $ 2,135 $ 2,135 $ – $ – $ – Long-term debt 10,789 10,858 348 1,920 1,500 7,090 Other long-term financial liabilities 33 33 – 17 10 6 Expenditure Derivative instruments: Cash outflow (Canadian dollar) – 366 231 135 – – Cash inflow (Canadian dollar equivalent of US dollar) – (378) (239) (139) – – Debt Derivative instruments: Cash outflow (Canadian dollar) – 4,797 460 2,338 – 1,999 Cash inflow (Canadian dollar equivalent of US dollar) – (4,208) 2 (348) 2 (1,920) 2 – (1,940) 2 Net carrying amount of Derivatives 511 $ 13,468 $ 13,603 $ 2,587 $ 2,351 $ 1,510 $ 7,155

1 The terms of our accounts receivable securitization program are committed until it expires on December 31, 2015. 2 Represents Canadian dollar equivalent amount of US dollar inflows matched to an equal amount of US dollar maturities in long-term debt for Debt Derivatives.

The tables below shows net interest payments over the life of the long-term debt, including the impact of the associated Debt Derivatives as at December 31, 2013 and 2012: Less than 1to3 4to5 More than December 31, 2013 1 year years years 5 years Interest payments $ 743 $ 1,258 $ 1,093 $ 5,341

Less than 1to3 4to5 More than December 31, 2012 1 year years years 5 years Interest payments $ 686 $ 1,168 $ 901 $ 3,929

Market Risk At December 31, 2013, a $1 change in the market price of our Class B Market risk is the risk that changes in market prices, such as Non-Voting shares would not have any impact on net income or other fluctuations in the market prices of our publicly traded investments, our comprehensive income, including the impact related to our Equity share price, foreign exchange rates and interest rates, will affect our Derivatives. income, cash flows or the value of our financial instruments. The Foreign Exchange and Interest Rates derivative instruments we use to manage this risk are described in We use Debt Derivatives to manage risks from fluctuations in foreign note 2. exchange and interest rates associated with our US dollar denominated Publicly Traded Investments debt instruments, designating the derivatives as hedges of specific debt We manage risk related to fluctuations in the market prices of our instruments for economic and accounting purposes. We use investments in publicly traded companies by regularly reviewing publicly Expenditure Derivatives to manage the foreign exchange risk in our available information related to these investments to ensure that any operations, designating them as hedges for certain of our operational risks are within our established levels of risk tolerance. We do not and capital expenditures. routinely engage in risk management practices such as hedging, At December 31, 2013, all of our outstanding long-term debt was at derivatives or short selling with respect to our publicly traded fixed interest rates and all of our US dollar-denominated long-term debt investments. was hedged against fluctuations in foreign exchange rates using Debt At December 31, 2013, a $1 change in the market price per share of Derivatives. As a result, with respect to the long-term debt and Debt our publicly traded investments would have resulted in a $14 million Derivatives, a one cent change in the Canadian dollar relative to the US change in our other comprehensive income, net of income taxes of dollar would have no effect on net income. $2 million. A one cent change in the Canadian dollar relative to the US dollar Stock-Based Compensation would have resulted in no impact to net income and a $7 million Our liability related to stock-based compensation is marked-to-market change, net of income taxes of $2 million, in other comprehensive each period. Stock-based compensation expense is affected by the income for the year ended December 31, 2013 related to our change in the price of our Class B Non-Voting shares during the life of Expenditure Derivatives. an award, including SARs, RSUs and DSUs. We use Equity Derivatives A portion of our accounts receivable and accounts payable and accrued from time to time to manage our exposure in our stock-based liabilities is denominated in US dollars. Due to the short-term nature of compensation expense. these receivables and payables, there is no significant market risk from fluctuations in foreign exchange rates as at December 31, 2013.

114 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 115 Fixed Canadian equivalent 1 Fixed interest rate hedged Cdn$ rate US $ Hedging effect Coupon date ROGERS COMMUNICATIONS INC. Maturity US$ principal/ notional amount 2013 ANNUAL REPORT during the year, Derivatives with different terms to hedge existing senior notes, and the year. Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate. 1 Debt Derivatives We use crossforeign currency exchange risk interest onour exchange all US of agreements dollar-denominated the senior principal toDerivatives notes and for hedge and interest risk-management debentures. obligations purposes the only. We of use Debt We completedDerivatives in the 2013: following• entered transactions into related new Debt to• Derivatives our terminated to hedge Debt existing senior notes Debt• issued settled Derivatives Debt Derivatives and related to senior entered notes that intoAll matured of during our Debt currentlyas outstanding Debt Derivatives effective have beenpurposes hedges as designated described against below. foreignNew exchange Debt Derivatives risk to Hedge for Senior Notes accounting Issued in 2013 Effective date March 7, 2013March 7, 2013Subtotal US $October 2, US 2013 $ 500October 2, 2013 500 2023Subtotal US $ 3.00% 2043 US US $ $ 850 4.50% 1,000 650 2023 3.60% 4.10% 2043 4.60% 5.45% $ US $ 1,500 $ 515 515 4.59% 5.61% $ $ 877 671 $ 1,030 $ 1,548 42 50 Fair Fair (144) (417) (561) value value 2012 $8 $ (511) (63) (83) 148 221 (146) 2013 Cdn $ Cdn $ $73 $75 notional notional rate rate Exchange Exchange US $ US $ notional notional As assetsAs liabilitiesAs assets $ 1,600 2,280 1.0252 1.2270 $As assets 1,640 2,798 $ 350 34 (561) 1.0258 359 380 3 0.9643 366 13 As assetsAs liabilities $As liabilities 4,250 2,130 1.0285 1.0769As assets $ 4,371 2,294 $ 184 (133) 900 1.0262 923 37 (13) as cash flow hedges: for as cash flow hedges: Derivativesfor as cash flow hedges: (524) as cash flow hedges: Derivativesfor as cash flow hedges: for as cash flow hedges: 51 Debt Derivatives accounted for Debt Derivatives not accounted Net mark-to-market liability Debt Expenditure Derivatives accounted Net mark-to-market liability $ (511) December 31, 2012 Debt Derivatives accounted for Net mark-to-market asset Debt Equity Derivatives not accounted Expenditure Derivatives accounted Net mark-to-market asset $ 75 Current asset Long-term asset Current liability Long-term liability Net mark-to-market asset (liability) In 2013, we recordedhedge ineffectiveness a (2012 – $4 $4 million million decrease). increase to net income related to The table belowinstruments liability shows reflected in derivative ourposition. consolidated instruments statements of financial asset and derivative December 31, 2013 Derivative Instruments At December 31,debt 2013, instruments all were hedged of againstrates fluctuations our for in accounting US purposes foreign (2012 exchange dollar-denominated – 91.7%). long-term The tables belowDecember show 31, our 2013 and Derivatives 2012. net asset (liability) position at NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Terminated and Replaced Existing Debt Derivatives and Entered into New Debt Derivatives Terminated Debt Derivatives New Debt Derivatives Hedging effect Original New Fixed Fixed Notional maturity Cash Date Derivative maturity weighted Canadian Termination date amount date settlement entered amount date average 1 equivalent 2 March 6, 2013 US $ 350 2018 Nil March 6, 2013 US $ 350 2038 7.62% $ 359 Sept. 27, 2013 US $ 1,075 2014-2015 $ 263 Sept. 27, 2013 US $ 1,075 2014-2015 7.42% $ 1,110

1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate. 2 Converting from a fixed US$ principal amount to a fixed Cdn$ principal amount.

The March 6, 2013 termination is related to Debt Derivatives hedging hedged transaction affects net income, equivalent amounts are recycled the US $350 million senior notes due 2038 (2038 Notes). The Debt into net income from the hedging reserve. We settled US $435 million Derivatives that were terminated on March 6, 2013 were not of Expenditure Derivatives in the year ended December 31, 2013 for designated as effective hedges for accounting purposes and had an Cdn $430 million and the Expenditure Derivatives remaining at original term of 10 years to August 15, 2018. The new Debt Derivatives December 31, 2013 have terms to maturity ranging from January 2014 hedge the foreign exchange risk associated with the principal and to December 2014. All of our currently outstanding Expenditure interest obligations on the 2038 Notes to their maturity at market rates Derivatives have been designated as effective hedges against foreign on the respective dates of the transactions and are designated as exchange risk for accounting purposes. effective hedges for accounting purposes. Equity Derivatives The September 27, 2013 termination is related to Debt Derivatives We use stock-based compensation derivatives (Equity Derivatives) to hedging senior notes scheduled to mature in 2014 and 2015. Only the hedge the market price appreciation risk of the RCI Class B shares fixed foreign exchange rate was changed for the new Debt Derivatives. granted under our stock-based compensation programs. We use Equity All other terms are the same as the terminated Debt Derivatives they Derivatives for risk-management purposes only. replaced. Before the Debt Derivatives were terminated on In 2013, we entered into Equity Derivatives to offset the price September 27, 2013, changes in their fair value were recorded in other appreciation risk associated with 5.7 million RCI Class B Non-Voting comprehensive income and were periodically reclassified to net income shares that were granted under our stock-based compensation to offset foreign exchange gains or losses on the related debt or to programs for stock options, RSUs and DSUs (see note 24). The Equity modify interest expense to its hedged amount. On the termination date, Derivatives were entered into at a weighted average price of $50.37 the balance in the hedging reserve related to these Debt Derivatives was with original terms to maturity of one year, extendible for further one a $10 million loss. $1 million of this related to future periodic year periods with the consent of the hedge counterparties. The Equity exchanges of interest and will be recorded in net income over the Derivatives have not been designated as hedges for accounting remaining life of the related debt securities. The remaining $8 million, purposes. We record changes in their fair value as stock-based net of income taxes of $1 million, will remain in the hedging reserve compensation expense, offsetting a portion of the impact of changes in until such time as the related debt is settled. the market price of RCI Class B Non-Voting shares contained in the Repayment of Senior Notes and Related Derivative Settlements recorded amount of the stock-based compensation liability for stock In June 2013, when we repaid or bought our US $350 million options, RSUs and DSUs. ($356 million) senior notes due 2013, the associated Debt Derivatives were settled at maturity, resulting in total payments of approximately Fair Values $104 million. The settlements of these Debt Derivatives did not impact The carrying value of cash and cash equivalents, accounts receivable, net income for the year ended December 31, 2013. short-term borrowings, and accounts payable and accrued liabilities approximate their fair values because of the short-term nature of these At December 31, 2013 we have US $6.4 billion (2012 – US $4.2 billion) financial instruments. of US Dollar denominated senior notes and debentures, all of which have been hedged using Debt Derivatives (2012 – 91.7%). We determine the fair value of each of our publicly traded investments using quoted market values. We determine the fair value of our private Expenditure Derivatives investments by using market values from similar transactions or well We use foreign currency forward contracts (Expenditure Derivatives) to established market, asset based or projected income valuation hedge the foreign exchange risk on the notional amount of certain techniques. These are applied appropriately to each investment forecasted expenditures. We use Expenditure Derivatives for risk- depending on its future operating and profitability prospects. management purposes only. The fair values of each of our public debt instruments are based on the In 2013, we entered into an additional US $955 million of Expenditure year-end trading values. We determine the fair values of our Debt Derivatives maturing from April 2013 through December 2014, at an Derivatives and Expenditure Derivatives (Derivatives) using an estimated average rate of $1.0341/US $1. As at December 31, 2013, we had a credit-adjusted mark-to-market valuation by discounting cash flows to total of US $900 million ($923 million) of Expenditure Derivatives for the measurement date. In the case of Derivatives in an asset position, our forecasted US dollar denominated expenditures at an average rate the credit spread for the financial institution counterparty is added to of $1.0262/US $1 which have been designated as hedges for the risk-free discount rate to determine the estimated credit-adjusted accounting purposes. We record changes in fair value of these value for each derivative. For Derivatives in a liability position, our credit Expenditure Derivatives in other comprehensive income. Once the spread is added to the risk-free discount rate for each derivative.

116 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – – 3 9 9 5 6 13 34 45 28 13 117 2012 2012 $ 561 $ 561 $50 $– $ 343 $ 458 Dec. 31, 9 5 2 49 31 18 12 13 2013 – 13 37 $ 189 $ 328 184 2013 $ 146 $ 133 $ 221 $– 22 22 Note – – – – 2012 $– $– $ 624 $ 624 Dec. 31, Fair value measurements at reporting date ROGERS COMMUNICATIONS INC. – – – – 2013 $– $– $ 809 $ 809 – 3 13 34 2012 $ 561 $ 561 $ 674 $ 624 Dec. 31, 2013 ANNUAL REPORT Carrying value Level 1 Level 2 – using inputs basedindirectly, other on than the observable quoted prices. market data, eitherobservable market directly data. or 13 37 184 Supplemental executive retirement plan NOTE 21: OTHER LONG-TERM LIABILITIES • Financial assets and financial liabilities in Level 2 include• valuations Level 3 valuations are basedThere were on no material inputs financialDecember instruments that 31, categorized 2013 in and Level are 2012. 3 as not at based on Deferred pension liability Restricted share units CRTC commitments Deferred compensation Stock appreciation rights Deferred inducements Program rights liability Other 2013 $ 146 $ 133 $ 1,030 $ 809 1 Fair value 2012 amount Carrying $ 10,789 $ 12,603 1 Fair 2013 value amount Carrying $ 13,343 $ 14,463 Equity Derivatives not accounted for as cash flow hedges Debt Derivatives accounted for as cash flow hedges Expenditure Derivatives accounted for as cash flow hedges Debt Derivatives not accounted for as hedges Debt Derivatives accounted for as cash flow hedges Investments in publicly traded companies Level 1 by referringassets and to liabilities. quoted prices in active markets for identical current portion) Long-term debt (including current portion)value is hierarchy, measured based at on level year-end 2 trading in values the as three-level discussed fair above. Financial liabilities Held-for-trading: Held-for-trading: Financial assets Available-for-sale, measured at fair value: 1 We did notduring have the years any ended December non-derivative 31, held-to-maturity 2013 and financial 2012. assets Long-term debt (including We measure ouramortized long-term cost using debt the effective initially interest method, as at follows. fair value, and then at The fair values of ourvalue Equity of Derivatives RCI’s are Class based B on Non-Voting the shares. quoted market Fair value estimatesrelevant are made market atinstruments. information a The and specificuncertainties point estimates and information matters in of are about judgment. time based subjective theOur on financial in disclosure of nature thethe inputs three-level used and in hierarchy measuring reflects• fair involve value: the We significance determine of fair value of financial assets and financial liabilities in The table below shows the financial instruments carried at fair value by valuation method as at December 31, 2013 and 2012. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 22: PENSIONS The table below sets out the estimated present value of accrued plan We have contributory and non-contributory defined benefit pension benefits and the estimated market value of the net assets available to plans that are made available to most of our employees. The plans provide these benefits for our funded plans at December 31, 2013 and provide pensions based on years of service, years of contributions and 2012. earnings. We do not provide any non-pension post-retirement benefits. 2013 2012 We also provide unfunded supplemental pension benefits to certain Plan assets, at fair value $ 1,037 $ 833 executives. Accrued benefit obligations 1,209 1,167

The assets of the defined benefit pension plans are held in segregated Deficiency of plan assets over accrued benefit obligations (172) (334) Effect of asset ceiling limit (9) – accounts isolated from our assets. We administer the defined benefit pension plans pursuant to applicable regulations, the Statement of Net deferred pension liability $ (181) $ (334) Investment Policies and Procedures and to the mandate of the Pension Consists of: Committee of the Board of Directors. The Pension Committee of the Deferred pension asset $8$9 Board of Directors oversees our administration of the defined benefits Deferred pension liability (189) (343) pension plans, which includes the following principal areas: Net deferred pension liability $ (181) $ (334) • overseeing the funding, administration, communication and investment management of the plans The table below shows our pension fund assets for the years ended • selecting and monitoring the performance of all third parties 2013 and 2012. performing duties in respect of the plans, including audit, actuarial 2013 2012 and investment management services Plan assets, January 1 $ 833 $ 684 • proposing, considering and approving amendments to the defined Interest income 40 40 benefit pension plans Remeasurements, return on plan assets recognized in other • proposing, considering and approving amendments of the Statement comprehensive income and equity 65 37 of Investment Policies and Procedures Contributions by employees 26 22 • reviewing management and actuarial reports prepared in respect of Contributions by employer 101 85 the administration of the defined benefit pension plans Benefits paid (26) (33) • reviewing and approving the audited financial statements of the Administrative expenses paid from plan assets (2) (2) defined benefit pension plan funds. Plan assets, December 31 $ 1,037 $ 833 The assets of the defined benefit pension plans are invested and The table below shows the accrued benefit obligations arising from managed following all applicable regulations and the Statement of funded obligations for the years ended December 31, 2013 and 2012. Investment Policies and Procedures, and reflect the characteristics and 2013 2012 asset mix of each defined benefit pension plan. Investment and market return risk is managed by: Accrued benefit obligations, January 1 $ 1,167 $ 817 Service cost 71 46 • contracting professional investment managers to execute the Interest cost 52 45 investment strategy following the Statement of Investment Policies Benefits paid (26) (33) and Procedures and regulatory requirements Contributions by employees 26 23 • specifying the kinds of investments that can be held in the plans and Remeasurements, recognized in other comprehensive monitoring compliance income and equity (81) 269 • using asset allocation and diversification strategies, and Accrued benefit obligations, December 31 $ 1,209 $ 1,167 • purchasing annuities from time to time. The table below shows the effect of the asset ceiling for the years The funded pension plans are registered with the Office of the ended December 31, 2013 and 2012. Superintendent of Financial Institutions and are subject to the Federal Pension Benefits Standards Act. The plans are also registered with the 2013 2012 Canada Revenue Agency and are subject to the Canada Income Tax Asset ceiling, January 1 $– $– Act. The benefits provided under the plans and the contributions to the Interest income – – plans are funded and administered in accordance with all applicable Remeasurements, change in asset ceiling (excluding interest income) recognized in comprehensive income and equity (9) – legislation and regulations. Effect of changes in foreign exchange rates – – Significant estimates are involved in determining pension related Asset ceiling, December 31 $ (9) $– balances. Actuarial estimates are based on projections of employees’ compensation levels at the time of retirement. Maximum retirement Plan assets are comprised mainly of pooled funds that invest in common benefits are primarily based on career average earnings, subject to stocks and bonds that are traded in an active market. The table below certain adjustments. The most recent actuarial valuations were shows the fair value of the total pension plan assets by major category completed as at January 1, 2013. for the years ended December 31, 2013 and 2012. 2013 2012 Equity securities $ 631 $ 480 Debt securities 403 348 Other – cash 3 5 Total fair value of plan assets $ 1,037 $ 833

118 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9 (3) (4) 119 2012 $ (11) $1 $1 allocation percentage Target asset (2) (3) 13 pension expense 2013 $ (11) $3 $4 Increase/(decrease) in 2012 0.6% 0% to 2% 19.3%38.3% 10% to 29% 29% to 48% 41.8% 38% to 47% 100.0% (15) (28) 110 2012 $ (99) $15 $28 December 31, Employer Employee Total 2013 0.3% benefit obligation 20.1% 40.7% 38.9% (14) (27) 120 Percentage of plan assets 100.0% 2013 ROGERS COMMUNICATIONS INC. $ (105) $14 $26 December 31, Increase/(decrease) in accrued 2013 ANNUAL REPORT 0.5% increase 0.25% increase 1 year increase 0.5% decrease 0.25% decrease 1 year decrease Domestic International Impact of: Impact of: Impact of: increase Equity securities: Debt securities Other – cash We estimate our 2014average employer duration contributions of to2013 the be is 19 $96 defined years. million. benefit The obligationActual at return December 31, on$75 million). plan assets wasWe have $102 recognized a millionand cumulative loss in retained in 2013 other(December earnings 31, comprehensive (2012 2012 income – of $299 – million). $201 million at December 31, 2013 Allocation of Plan Assets Asset category Plan assets consiststocks primarily and bonds. of The pooled pooledour Canadian funds equity equity funds that has securities. investments invest$2 in As million) in of a common the plans’ result,securities. assets approximately are indirectly $3 invested in million ourWe (2012 own make equity – contributionsmembers to and the invest in plansestablished permitted to investments by secure usingassumptions the the on our target an benefits annual ranges basis. of Pension plan The Committee, table which belowyears shows ended reviews the December 31: actual actuarial contributions to the plans for the Sensitivity of Key Assumptions In the sensitivitybenefit obligation analysis using the shown samebenefit method below, used obligation to we calculate we thefinancial determine defined position. recognize the We calculate in defined while sensitivity holding the by the changing others consolidated one constant.obligation assumption The statements will actual likely change of be in different definedlikely from benefit that that shown more in than thesome table, one assumptions since are assumption it correlated. is will change at a time, and that 20132012 $ 101 85 $ 26 $ 127 23 108 Discount rate Rate of future compensation Mortality rate – – 5 2 2 5 2 51 45 (49) (220) 2012 $45 2012 2012 2012 2012 4.5% 3.0% 5.5% 3.0% $ (40) $5 $46 $53 $37 $ (232) 2 2 3 2 (9) 12 83 52 (43) (16) 140 $49 2013 2013 2013 2013 $ (40) $12 $65 $ 137 UP94 Generational UP94 Generational $71 $85 2013 5.1% 3.0% 4.5% 3.0% CPM-RPP2014 Priv UP94 Generational Net interest cost Net pension expense Discount rate Rate of compensation increase Mortality rate Discount rate Rate of compensation increase Mortality rate Service cost Interest income on plan assets Administrative expense Interest cost on plan obligation assumptions: expense (loss) and equity Weighted average of significant Defined benefit obligation Pension expense Certain subsidiaries have definedexpense contribution of plans $2 with million totalemployee in pension salaries 2013 and (2012 benefits – expense. $2 million),Assumptions which is included in There are significantprovided by assumptions our actuaries, that anddetermine are it which is assumptions used the could responsibility in resultdetermining of the in management the accrued a to benefit significant obligations calculations impact andPrincipal when pension Actuarial expense. Assumptions We also provideexecutives. supplemental The unfunded table pensionpension below expense benefits includes included to in our employee certain cost accrued salaries and and benefit other benefits, comprehensive net obligations, income. interest The remeasurement recognizeddetermined as in follows. other comprehensive income, is Net interest cost, afinance costs component and is of outlined the as follows. plan cost above is included in The table below showsDecember our 31, 2013 net and pensioncosts 2012. expense Net and for interest the other costbenefits years expense is pension in ended included the expenses in consolidated statements finance are of income. included in the salaries and Pension expense included in employee salaries and benefits Net interest cost recognized in financeRemeasurement costs recognized in other comprehensive income Accrued benefit obligation Plan cost: Net interest cost: Return on plan assets (excluding interestChange income) in financial assumptions Change in demographic assumptions Total pension cost recognized in net income Effect of experience adjustments Change in asset ceiling Remeasurement recognized in other comprehensive income Net interest cost recognized in finance costs NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23: SHAREHOLDERS’ EQUITY

Capital Stock Number of shares Shares classes authorized for issue Features Voting rights Preferred shares 400 million • Without par value • None • Issuable in series, with rights and terms of each series to be fixed by our board prior to the issue of any series

Class A Voting shares 112,474,388 • Without par value • Each share entitled to • Each share can be converted into one Class B Non-Voting share 50 votes Class B Non-Voting shares 1.4 billion • Without par value • None

RCI’s Articles of Continuance under the Company Act (British In 2013, we repurchased for cancellation a total of 546,674 (2012 – Columbia) impose restrictions on the transfer, voting and issue of the 9,637,230) Class B Non-Voting shares for total proceeds of $22 million Class A Voting and Class B Non-Voting shares to ensure that we remain (2012 – $350 million), resulting in a reduction to Class B Non-Voting qualified to hold or obtain licences required to carry on certain of our share capital, share premium and retained earnings of $1 million, nil business undertakings in Canada. We are authorized to refuse to and $21 million (2012 – $10 million, $243 million and $97 million), register transfers of any of our shares to any person who is not a respectively. All of the 2013 purchases were made in June 2013 and Canadian in order to ensure that Rogers remains qualified to hold the were carried out through the facilities of the TSX. In 2013, we cancelled licences referred to above. 43,993 Class B Non-Voting shares that related to old employee share plans for proceeds of nil. Dividends In 2013 and 2012, we declared and paid the following dividends on our Available-for-Sale Financial Assets Reserve outstanding Class A Voting and Class B Non-Voting shares: We carry available-for-sale investments at fair value on the consolidated Dividend statements of financial position, and record changes in fair value in the Date declared Date paid per share available-for-sale financial assets reserve as a component of equity, February 21, 2012 April 2, 2012 $ 0.395 through other comprehensive income, until the investments are April 25, 2012 July 3, 2012 0.395 disposed of or impaired, at which time we record the change in fair August 15, 2012 October 3, 2012 0.395 value in net income. October 24, 2012 January 2, 2013 0.395 $ 1.58 Hedging Reserve We measure all derivatives at fair value on the consolidated statements February 14, 2013 April 2, 2013 $ 0.435 of financial position, and record changes in fair value of cash flow April 23, 2013 July 3, 2013 0.435 August 15, 2013 October 2, 2013 0.435 hedging derivatives in the fair value reserve as a component of equity October 24, 2013 January 2, 2014 0.435 through other comprehensive income, if the derivatives are effective and until we recognize the hedged asset or liability in net income. $ 1.74

Defined Benefit Pension Plans The holders of Class A shares are entitled to receive dividends at the Our defined benefit pension plan obligation is actuarially determined at rate of up to five cents per share but only after dividends at the rate of the end of the year, and we recognize remeasurements in other five cents per share have been paid or set aside on the Class B shares. comprehensive income and retained earnings. Class A Voting and Class B Non-Voting shares therefore participate equally in dividends.

Normal Course Issuer Bid In February 2013, we renewed our normal course issuer bid. During the 12-month period commencing February 25, 2013 and ending February 24, 2014, we may purchase on the TSX, the NYSE and/or alternative trading systems up to the lesser of 35.8 million Class B Non- Voting shares, representing approximately 10% of the then issued and outstanding Class B Non-Voting shares, and that number of Class B Non-Voting shares that can be purchased under the normal course issuer bid for an aggregate purchase price of $500 million. The actual number of Class B Non-Voting shares purchased, if any, and the timing of such purchases will be determined by considering market conditions, share prices, our cash position, and other factors.

120 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 121 2012 average average Weighted Weighted exercise price exercise price options Number (276,943) 35.53 1,397,751 37.86 8,734,028 $ 32.34 4,638,496 $ 28.94 exercisable Number of (3,075,879) 21.53 10,689,099 $ 28.59 ROGERS COMMUNICATIONS INC. 2013 average Weighted average Weighted exercise price exercise price Options outstanding Options exercisable 2013 ANNUAL REPORT options (457,868) 42.15 (years) 8,734,028 $ 32.34 1,415,482 47.56 6,368,403 $ 37.39 4,066,698 $ 35.08 (3,323,239) 27.78 Number of Weighted tock Options We paid $101 millionoptions, in 2013 RSUs (2012 –average and $76 share million) price to DSUs on holders the date of upon of stock exercise exercise, of $48.18S (2012 representing – $39.42). aStock weighted Option Plans Options to purchase ourbasis Class may B be Non-Voting grantedBoard shares to on of our a employees, DirectorsThere one-for-one directors are or and 65 officers our millionoption by options Management has authorized the a under Compensation term various ofgraded Committee. plans, seven to and ten each vesting years.Compensation The Committee vesting over may period is adjustdate. generally The the four exercise vesting price terms isNon-Voting years, on shares, equal determined to the as the grant the however, fairdate five-day as market average quoted before value on the of the the grant the TSX. Class B Performance Management Options We granted 1,415,482806,100) performance-based to certain options key executives. inover These four options 2013 years vest (2012 provided on that a – after certain graded targeted each basis stock anniversary prices date. are Atperformance met December options on (December 31, or 31, 2013, 2012 we – had 5,435,555) 4,728,959 outstanding. contractual life average remaining – 7 35 $35 $77 2012 8 4 42 Number $30 $84 2013 6,368,403 4.18 $ 37.39 4,066,698 $ 35.08 outstanding Stock options Restricted share units Equity Derivative effect, net of interest receipt Deferred share units The table below showsDecember the 31, range 2013: of exercise prices, the weighted average exercise price and the weighted average remaining contractual life at At December 31, 2013, weof had $164 a million total liability (Decemberbased recorded 31, at compensation, 2012 its – fair including value current $195 stock million) portion related options, to$158 RSUs of stock- million) and and is this included DSUs. in accounts is The payableThe and accrued $128 total liabilities. intrinsic millionbetween value the (December of strike vestedprice 31, price of liabilities, of 2012 the the which RCIawards share-based – is Class at awards December B the and 31, Non-Voting difference $109 2013 the shares million). was for trading $85 all million vested (December share-based 31, 2012 – NOTE 24: STOCK OPTIONS, SHAREPURCHASE UNITS PLANS AND SHARE We measure stock-based compensation todetermine employees fair at value fair using value.Black-Scholes our We Class option B pricing Non-Voting modeldepending share or on price, trinomial the and nature option the of pricing the share-based models, award. The table belowexpense, which is is included in a employee salaries and summary benefits expense: of our stock-based compensation Summary of Stock Options The table below is a summary of the stock option plans, including performance options: Range of exercise prices Stock-based compensation: Outstanding, beginning of year Granted Exercised Forfeited Outstanding, end of year Exercisable, end of year $12.30 – $18.99$19.00 – $29.99$30.00 – $34.99$35.00 – $39.99$40.00 – $48.56 132,332 737,888 1,777,365 2,427,906 1,292,912 0.28 2.13 3.48 2.86 9.19 $ 12.28 29.41 33.97 38.39 47.35 132,332 1,288,612 727,888 1,712,529 205,337 $ 12.28 33.81 29.41 38.62 48.30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unrecognized stock-based compensation expense at December 31, Compensation expense related to the employee share accumulation 2013 related to stock-option plans was $11 million (2012 – plan was $30 million in 2013 (2012 – $26 million), which we included $11 million), and will be recorded in net income over the next four in employee salaries and benefits. years as the options vest. Hedging of Stock-Based Compensation Restricted Share Units We entered into Equity Derivatives to hedge a portion of our stock- RSU Plan based compensation expense in 2013 (see note 20) and recognized a The RSU plan allows employees, officers and directors to participate in $8 million loss in stock-based compensation expense for these the growth and development of Rogers. Under the terms of the plan, derivatives. RSUs are issued to the participant and the units issued cliff vest over a Assumptions period of up to three years from the grant date. Significant management estimates are used to determine the fair value On the vesting date, we will redeem all of the participants’ RSUs in cash of stock options, RSUs and DSUs. The table below shows the weighted- or by issuing one Class B Non-Voting share for each RSU. We have average fair value of stock options granted during the years ended reserved 4,000,000 Class B Non-Voting shares for issue under this plan. December 31, 2013 and 2012, and the principal assumptions used in We granted 871,988 RSUs in 2013 (2012 – 721,005). applying the Black-Scholes model for non performance-based options and trinomial option pricing models for performance-based options to Performance RSUs determine their fair value at grant date: We granted 232,220 performance-based RSUs in 2013 (2012 – 2013 2012 172,779) to certain key executives. The number of units that vest and will be paid three years from the grant date will be within 50% to Weighted average fair value $ 9.68 $ 7.51 150% of the initial number granted based upon the achievement of Risk-free interest rate 1.2% 1.6% certain annual and cumulative three-year non-market targets. Dividend yield 3.4% 4.0% Volatility of Class B Non-Voting shares 26.2% 28.1% Summary of RSUs Weighted average expected life n/a 5.4 years The table below is a summary of the RSUs outstanding, including Weighted average time to vest 2.4 years 2.4 years performance RSUs. Weighted average time to expiry 9.9 years 6.9 years 2013 2012 Employee exit rate 3.3% 3.9% Number of units Suboptimal exercise factor 1.5 2.6 Lattice steps 50 50 Outstanding, beginning of year 2,255,158 1,988,955 Granted 1,104,208 893,784 Volatility has been estimated based on the actual trading statistics of Exercised (681,652) (159,843) our Class B Non-Voting shares. Forfeited (205,324) (467,738)

Outstanding, end of year 2,472,390 2,255,158 NOTE 25: RELATED PARTY TRANSACTIONS Controlling Shareholder Unrecognized stock-based compensation expense at December 31, Our ultimate controlling shareholder is the Rogers Control Trust (the 2013 related to these RSUs was $42 million (2012 – $37 million) and Trust) which holds voting control of Rogers. The beneficiaries of the will be recorded in net income over the next three years as the RSUs Trust are members of the Rogers family. Certain directors, senior vest. executives and corporate officers of Rogers represent the Rogers family.

Deferred Share Unit Plan We entered into certain transactions with the ultimate controlling The DSU plan allows directors and certain key executives to elect to shareholder and private Rogers’ family holding companies controlled by receive certain types of compensation in DSUs, which are classified as a the Trust. These transactions, as summarized below, were recorded at liability on the consolidated statements of financial position. the amount agreed to by the related parties and are subject to the We granted 103,990 DSUs in 2013 (2012 – 115,964). At December 31, terms and conditions of formal agreements approved by the Audit 2013, 700,912 DSUs (2012 – 741,423) were outstanding. Committee. Unrecognized stock-based compensation expense at December 31, Transactions with Key Management Personnel 2013, related to these DSUs was $2 million (2012 – nil) and will be Key management personnel include the directors and our most senior recorded in net income over the next three years as the executive DSUs corporate officers who are primarily responsible for planning, directing vest. All other DSUs are fully vested. and controlling our business activities.

Employee Share Accumulation Plan Compensation Participation in the plan is voluntary. Employees can contribute up to The compensation expense for key management for employee services 10% of their regular earnings through payroll deductions (up to an was included in employee salaries and benefits as follows: annual maximum of $25,000). The plan administrator purchases our 2013 2012 Class B Non-Voting shares on a monthly basis on the open market on behalf of the employee. At the end of each month, we make a Salaries, pension and other short-term contribution of 25% to 50% of the employee’s contribution that employee benefits $11 $10 Stock-based compensation expense 27 35 month, and the plan administrator uses this amount to purchase additional shares on behalf of the employee. We record our $38 $45 contributions made as a compensation expense.

122 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 123 ROGERS COMMUNICATIONS INC. ale and Business Combination Agreements ervices S S 2013 ANNUAL REPORT ales of As part of transactions involvingother business business dispositions, combinations, sales we of mayfor assets be costs or required and to pay lossesand counterparties incurred as a warranties, resultdamages of intellectual to breaches of property, property representations regulations environmental right liabilities, (including changescounterparties, infringement, in contingent loss laws taxreassessments and of or liabilities previous legislation), taxthe of filings business. of the litigation a corporation that disposed carries against on S business the or As part of transactionsto involving sales make of services,representations payments we may and to be(including required counterparties warranties, tax legislation) as or changes litigation against a the in counterparties. result lawsPurchases and of and Development of breaches Assets regulations As part of of transactionswe involving may purchases be and required development toas of pay assets, a counterparties for result costsdamages and to of losses property, incurred breacheslegislation) changes or of in litigation against representations laws the counterparties. and and regulations warranties, (includingIndemnifications loss tax or We indemnify ourreasonably incurred directors, and resulting officers fromto the and performance Rogers. of We their employees have services liabilitythose against insurance of our for claims subsidiaries. our directors and officersWe and are unablepotential amount to we would makeamount be also required a depends to on reasonable pay thewhich outcome to estimate cannot of counterparties. future The of be eventsconsolidated and statements the predicted. conditions, of financial maximum Noindemnifications position amount relating or to has theseHistorically, guarantees types been we of at have accrued notindemnifications in December or made guarantees. the any 31, significant 2013 payments under or these 2012. NOTE 26: GUARANTEES We had the followingpart guarantees of at our normal December course 31, of 2013 business: and 2012Business as 38 $1 $1 2012 2012 December 31, 83 $2 $3 2013 2013 Transaction value Balance outstanding, $43 2012 $43 2013 Transaction value commission paid on premiums for insurance coverage Sales to and purchasesmade from our joint at arrangementstransactions. and terms associates Outstanding are equivalent balancesinterest-free, to and at settled those in year-endrelated cash. that are The outstanding prevail parties unsecured balancesDecember in with 31, and relating these 2013 arm’s wasand $14 to accrued length million liabilities and (December 31, included similar 2012 in – accounts $1 businessIn million payable payable). 2012, we transactions acquiredfrom certain Inukshuk, as network a assets 50% and ownedgain at joint of 2500 $233 venture. MHz million As spectrum in avalue other result, income, over we as recorded the carrying a portion50% of value interest the in related excess the of to spectrum fair licences the (see note other 14). non-related venturer’s Printing, legal services and Subsidiaries, Joint Arrangements and Associates We have the following significant• subsidiaries: Rogers Communications Partnership • Rogers Media Inc. We have 100%subsidiaries ownership are interest incorporated in inperiod for Canada all annual and financial of statements have reporting. these the same subsidiaries.When reporting Our necessary, adjustmentspolicies are with those made of Rogers. toability There are conform of no significant the subsidiaries, restrictionsfunds on accounting to joint the Rogers as arrangements cash dividends and or to associatesWe repay loans to or carried advances. transfer outarrangements the and followingsubsidiaries associates. business have transactions Transactionsdisclosed been in with between this note. our eliminated us joint on and consolidation our and are not Transactions We have enteredpartners into or businesschairman senior transactions and with chief officers executive companiesfor officer are whose of insurance a coverage, directors firm thethat that of senior is partner provides paid Rogers, and commissions legal chairmanprovides including of printing services, services. a the law and firm theWe chairman record of these transactions aparties. at The company the transactions amount that areBoard agreed reviewed of to Directors. by The by the amounts thedue Audit owing related are Committee for unsecured, of interest-free payment and our transaction. in There cash are norelated within parties significant at one December outstanding 31, month balances 2013. from with these the date of the Purchases Revenues NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 27: COMMITMENTS AND CONTINGENT LIABILITIES Commitments The table below shows the future minimum payments under operating leases and other contractual arrangements at December 31, 2013:

Less than After (In millions of dollars) 1 year 1-3 years 4-5 years 5 years Total Operating leases $ 136 $ 194 $ 95 $ 95 $ 520 Player contracts 136 132 33 7 308 Purchase obligations 1,670 1,019 149 160 2,998 Program rights 699 1,018 974 3,471 6,162 $ 2,641 $ 2,363 $ 1,251 $ 3,733 $ 9,988

Operating leases are for office premises and retail outlets across the In April 2013, the plaintiffs applied for an order to be allowed to country. The majority of the lease terms range from five to ten years. proceed with the second system access fee class action. In August Rent expense for 2013 was $198 million (2012 – $189 million). 2013, the court denied this application and the second action remains conditionally stayed. In December 2013 the plaintiff applied for an Player contracts are Blue Jays players’ salary contracts we have entered order permitting them to amend the Statement of Claim to reintroduce into and are contractually obligated to pay. the claims they were not permitted to proceed with in the 2007 Purchase obligations are the contractual obligations under service, certification decision. We are awaiting the decision of the product and handset contracts that we have committed to for at least Saskatchewan Court. We have not recorded a liability for this the next five years. contingency.

Program rights are the agreements we have entered into to acquire System Access Fee – British Columbia broadcasting rights for sports broadcasting programs and films for In December 2011, a class action was launched in British Columbia periods ranging from one to twelve years. against providers of wireless communications in Canada about the system access fee wireless carriers charge to some of their customers. Contingent Liabilities The class action relates to allegations of misrepresentations contrary to We have the following contingent liabilities as at December 31, 2013: the Business Practices and Consumer Protection Act (British Columbia), among other things. The plaintiffs are seeking unspecified damages and System Access Fee – Saskatchewan restitution. A certification hearing is scheduled for April 2014. We have In 2004, a class action commenced against providers of wireless not recorded a liability for this contingency. communications in Canada under the Class Actions Act (Saskatchewan). The class action related to the system access fee wireless carriers 911 Fee charged to some of their customers. The plaintiffs are seeking In June 2008, a class action was launched in Saskatchewan against unspecified damages and punitive damages, which would effectively be providers of wireless communications services in Canada. It involves a reimbursement of all system access fees collected. allegations of breach of contract, misrepresentation and false advertising, among other things, in relation to the 911 fee that had In 2007, the Saskatchewan Court granted the plaintiffs’ application to been charged by us and the other wireless communication providers in have the proceeding certified as a national, “opt-in” class action where Canada. The plaintiffs are seeking unspecified damages and restitution. affected customers outside Saskatchewan must take specific steps to The plaintiffs intend to seek an order certifying the proceeding as a participate in the proceeding. In 2008, our motion to stay the national class action in Saskatchewan. We have not recorded a liability proceeding based on the arbitration clause in our wireless service for this contingency. agreements was granted. The Saskatchewan Court directed that its order, in respect of the certification of the action, would exclude Cellular Devices customers who are bound by an arbitration clause from the class of In July 2013, a class action was launched in British Columbia against plaintiffs. providers of wireless communications in Canada and manufacturers of wireless devices. The class action relates to the alleged adverse health We appealed the 2007 certification decision, however, it was dismissed effects incurred by long-term users of cellular devices. The plaintiffs are by the Saskatchewan Court of Appeal and leave to appeal to the seeking unspecified damages and punitive damages, effectively equal to Supreme Court of Canada was denied. the reimbursement of the portion of revenues the defendants have In 2012, the plaintiffs applied for an order seeking to extend the time received that can reasonably be attributed to the sale of cellular phones they can appeal the “opt-in” decision of the Saskatchewan Court. In in Canada. We have not recorded a liability for this contingency. March 2013, the Saskatchewan Court of Appeal denied the plaintiffs’ Income and Indirect Taxes application. We provide for income and indirect taxes based on all of the In August 2009, counsel for the plaintiffs began a second proceeding information that is currently available and believe that we have under the Class Actions Act (Saskatchewan) asserting the same claims adequately provided these items. The calculation of applicable taxes in as the original proceeding. If successful, this second class action would many cases, however, requires significant judgment in interpreting tax be an “opt-out’ class proceeding. This second proceeding was ordered rules and regulations. Our tax filings are subject to audits, which could conditionally stayed in 2009 on the basis that it was an abuse of materially change the amount of current and deferred income tax assets process. and liabilities and provisions, and could, in certain circumstances, result in the assessment of interest and penalties.

124 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 125 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Normal Course Issuer Bid In February 2014, werenew filed our normal a course noticefor issuer with another bid year. the for Subject TSX our tothe of Class acceptance right by to B our buy the Non-Voting intention up TSX,Non-Voting shares to to this shares an notice aggregate of gives $500 us RCI, millionalternate or whichever 35,780,234 trading is Class less, systems B February on any the 24, time TSX, 2015. between NYSEactually and/or February The buy under 25, number the 2014buy of normal them, and course Class will issuer depend Bprices, bid, our on if Non-Voting cash our any, position, alternative shares and evaluation uses when of of we cash we market and other conditions, factors. stock Cash Tender Offers On January 29,subsidiaries 2014, we commenced announced cashUS that $750 tender one of offers ourUS million for $350 wholly-owned any million 6.375%consideration and 5.500% will all senior be senior of notes USnotes $1,000 our due (plus for notes each 2014. accruedsettlement $1,000 The and due principal date) unpaid tender amountUS and of interest 2014 offer $1,000 principal to, a amount of and but notes. consent not payment our including, equal the to US $2.50 per Increase in Annual Dividend RateDividends and Declaration of In February 2014,annualized dividend the rate, to Board $1.83Non-Voting per share, approved Class effective A immediately an Voting toof share be increase $0.4575. and paid Class in The of B quarterlyFebruary amounts Board 5% 2013, last from in increasedNon-Voting $1.58 the the share. to Dividends annualized are $1.74 dividend payable when per rate declared by Class in In the A Board. February Voting 2014, and theper Board Class Class declared B A a Voting quarterlyApril share 4, dividend and 2014, of Class to $0.4575 B shareholdersfirst Non-Voting of quarterly share, record dividend in on to 2014 March be and 14, paid reflects 2014. the on This new is dividend rate. the NOTE 28: SUBSEQUENT EVENTS The following events2013: occurred after the year ended December 31, Other Claims There are certain othernot claims expect and potential anyconsolidated claims financial of against position. us. these We to do The have outcome of materially all the adversematters proceedings described and above, effect claims is against subject on us,uncertainties to including future of our the resolution litigation. that Based includes onwe the information believe currently that known it to isthese us, not probable proceedings that and thematerial ultimate adverse claims, resolution effect of on individually anyof our of operations. consolidated or If financial it in position becomesprovision probable or total, that in results we the are will period liable, thematerial we have change to will in our record a probability consolidated a occurs, financial position and and it results could of be operations. CORPORATE AND SHAREHOLDER INFORMATION

CORPORATE OFFICES STOCK EXCHANGE LISTINGS COMMON STOCK TRADING AND Rogers Communications Inc. Toronto Stock Exchange (TSX): DIVIDEND INFORMATION 333 Bloor Street East, 10th Floor RCI.b – Class B Non-Voting shares Dividends Closing Price RCI.b on TSX Declared Toronto, ON M4W 1G9 (CUSIP # 775109200) 2013 High Low Close per Share 416-935-7777 RCI.a – Class A Voting shares First Quarter $51.89 $44.37 $51.89 $0.435 (CUSIP # 775109101) CUSTOMER SERVICE AND Second Quarter $52.35 $40.35 $41.20 $0.435 PRODUCT INFORMATION New York Stock Exchange (NYSE): Third Quarter $45.36 $40.35 $44.29 $0.435 888-764-3771 or rogers.com RCI – Class B Non-Voting shares Fourth Quarter $48.59 $43.66 $48.07 $0.435 (CUSIP # 775109200) SHAREHOLDER SERVICES If you are a registered shareholder and Equity Index Inclusions: Shares Outstanding at December 31, 2013 have inquiries regarding your account, wish Dow Jones Canada Titans 60 Index Class A 112,462,000 to change your name or address, or have Dow Jones Telecom Titans 30 Index Class B 402,281,178 questions about lost stock certificates, share FTSE Global Telecoms Index transfers, estate settlements or dividends, FTSE All-World Index Series 2014 Expected Dividend Dates please contact our transfer agent and registrar: FTSE4Good Global Index Jantzi Social Index Record Date*: Payment Date*: CST Trust Company S&P/TSX 60 Index March 14, 2014 April 4, 2014 P.O. Box 700, Postal Station B S&P/TSX Composite Dividend Index June 13, 2014 July 4, 2014 Montreal, QC H3B 3K3, Canada S&P/TSX Composite Index September 12, 2014 October 3, 2014 416-682-3860 or 800-387-0825 S&P/TSX Telecom Services Index December 11, 2014 January 2, 2015 [email protected] * Subject to Board approval Duplicate Mailings If you receive duplicate shareholder mailings Unless indicated otherwise, all dividends paid by Rogers Communications are designated from Rogers Communications, please as “eligible” dividends for the purposes of the contact CST Trust Company as detailed above DEBT SECURITIES Income Tax Act (Canada) and any similar to consolidate your accounts. For details of the public debt securities of the provincial legislation. INVESTOR RELATIONS Rogers companies, please refer to the “Debt Institutional investors, securities analysts Securities” section under rogers.com/investors DIRECT DEPOSIT SERVICE Shareholders may have dividends deposited and others requiring additional financial INDEPENDENT AUDITORS directly into accounts held at financial institutions. information can visit rogers.com/investors KPMG LLP or contact us at: To arrange direct deposit service, please contact ON-LINE INFORMATION CST Trust Company as detailed earlier on 1-855-300-7922 or Rogers is committed to open and full financial this page. 416-935-3551 (outside North America) or disclosure and best practices in corporate DIVIDEND REINVESTMENT PLAN (DRIP) [email protected] governance. We invite you to visit the Investor Rogers offers a convenient dividend reinvestment Relations section of rogers.com/investors where Media inquiries: 416-935-7777 program for eligible shareholders to purchase you will find additional information about our additional Rogers Communications shares by business, including events and presentations, CORPORATE PHILANTHROPY reinvesting their cash dividends without incurring news releases, regulatory filings, governance For information relating to Rogers various brokerage fees or administration fees. For plan practices, corporate social responsibility and our philanthropic endeavours, refer to the information and enrolment materials or to learn continuous disclosure materials, including quarterly “About Rogers” section of rogers.com more about Rogers DRIP, please visit www. financial releases, annual information forms and canstockta.com/en/InvestorServices/Dividend_ SUSTAINABILITY management information circulars. You may also Reinvestment_Plans or contact CST Trust Company Rogers is committed to continuing to grow subscribe to our news by e-mail or RSS feeds as detailed earlier on this page. responsibly and we focus our social and to automatically receive Rogers news releases environmental sustainability efforts where we electronically. ELECTRONIC DELIVERY OF can make the most meaningful impacts on both. SHAREHOLDER MATERIALS FOLLOW ROGERS THROUGH THESE To learn more, please visit rogers.com/csr Registered shareholders can receive electronic SOCIAL MEDIA LINKS notice of financial reports and proxy materials FACEBOOK and utilize the Internet to submit proxies facebook.com/rogers on-line by registering at www.canstockta.com/ en/InvestorServices/Delivery_of_Investor_ TWITTER Materials/Electronic_Consent. This approach gets twitter.com/rogersbuzz information to shareholders more quickly than SCAN THIS GOOGLE + conventional mail and helps Rogers protect the TO LEARN MORE google.com/+Rogers environment and reduce printing and postage costs.

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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 are detailed in the “Risks and Uncertainties That Could Affect our Businesses” and “Caution Regarding Forward-Looking Statements, Risks and Assumptions” sections of the MD&A contained herein, which should be read in conjunction with all sections of this annual report.

The fibre used in the manufacture of the stock comes from well managed forests, © 2014 Rogers controlled sources and recycled wood or fibre. Communications Inc. Other registered trademarks that appear are the property of the respective owners.

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126 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT WHAT’S NEXT? IF YOU’RE WITH ROGERS, YOU’LL BE THE FIRST TO KNOW. WIRELESS CABLE MEDIA ROGERS.COM