Condensed Interim Consolidated Financial Statements (Unaudited)

CBC/RADIO-CANADA’S COMMITMENT TO TRANSPARENCY AND ACCOUNTABILITY As the national public broadcaster, we take very seriously our obligation to be transparent and accountable to Canadians. To meet our responsibilities, we provide access on our corporate website to information about our activities and the way we manage our public resources. RESPONSES TO ACCESS TO HR COMPLIANCE INFORMATION AND PRIVACY (ATIP) REQUESTS CORPORATE REPORTS POLICIES AND PRACTICES APPEARANCES BEFORE PARLIAMENTARY COMMITTEES OMBUDSMEN REPORTS OFFICE OF THE AUDITOR GENERAL (OAG) PROACTIVE DISCLOSURE REPORTING TO THE CRTC ANNUAL PUBLIC MEETING CBC/Radio-Canada Third Quarter Financial Report 2017-2018 2 MANAGEMENT DISCUSSION AND ANALYSIS In addition to filing an annual report, we are required – like most Canadian federal Crown corporations – to file quarterly financial reports for the first three quarters of each fiscal year. The following Management Discussion and Analysis (MD&A) aims to provide readers with an overview of our activities and performance for the third quarter of 2017-2018 and should be read in conjunction with our most recent Annual Report. In keeping with our commitment to transparency and effective oversight of public funds, we are pleased to present this quarterly report for the third quarter ended December 31, 2017. We have organized our MD&A in the following key sections: FINANCIAL HIGHLIGHTS ................................................................................................................................................................................. 4 BUSINESS HIGHLIGHTS .................................................................................................................................................................................. 5 PERFORMANCE UPDATE ................................................................................................................................................................................. 7 DISCUSSION OF RESULTS............................................................................................................................................................................. 15 CAPITAL RESOURCES, FINANCIAL CONDITION AND LIQUIDITY ................................................................................................................ 19 RISK UPDATE ................................................................................................................................................................................................. 21 FINANCIAL REPORTING DISCLOSURE ......................................................................................................................................................... 22 STATEMENT OF MANAGEMENT RESPONSIBILITY BY SENIOR OFFICIALS ............................................................................................... 23 To help you understand this MD&A, note the following: Quarterly reporting - The Condensed Interim Consolidated Financial Statements have not been reviewed by our auditor. Seasonality - The majority of our self-generated revenue comes from advertising, which follows seasonal patterns based on the programming schedule. It also varies according to market and general economic conditions, as well as schedule performance. Subscriber-based revenue is more stable on a quarter-by-quarter basis. Operating expenses also tend to follow a seasonal pattern because they are also influenced by the programming schedule. Government appropriations are recognized in income based on the annual budget, which reflects seasonal impacts on expenditures and self-generated revenue. Forward-looking statements - This report contains forward-looking statements about strategy, objectives, and expected financial and operational results. Forward-looking statements are typically identified by words such as “may,” “should,” “could,” “would” and “will,” as well as expressions such as “believe,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “estimate” and other similar expressions. Forward-looking statements are based on the following broad assumptions: CBC/Radio-Canada’s government funding remains consistent with amounts announced in the federal budget, and the broadcasting regulatory environment will not change significantly. Key risks and uncertainties are described in the Risk Update section of this report. However, some risks and uncertainties are by definition difficult to predict and are beyond our control. They include, but are not limited to, economic, financial, advertising market, technical and regulatory conditions. These and other factors may cause actual results to differ substantially from the expectations stated or implied in forward-looking statements. Performance indicators - We rely on data from both internal tools and third parties to measure our performance metrics. While these data are based on what we believe to be reasonable calculations for the applicable periods of measurement, there are inherent challenges in collecting this information, particularly as the media industry undergoes a digital transformation. For example, Canadians now consume media content on multiple devices from an ever-growing array of content providers. As media consumption habits change, audience measurement suppliers and the Corporation are refining methodologies and introducing new measurement technologies to ensure the accuracy and completeness of data gathered. As a result, changes in the way data are collected could result in certain information provided in future periods not being comparable with information disclosed in prior periods. Since some of these data are used to measure our strategic and operational indicators, we may be required to make adjustments to targets and historical results to enhance comparability of the data and follow industry best practices. Non-IFRS measure - This report includes the measure Results on a Current Operating Basis, which does not have any standardized meaning according to International Financial Reporting Standards (IFRS). It is therefore unlikely to be comparable to similar measures presented by other companies. Refer to the Discussion of Results section for further details. CBC/Radio-Canada Third Quarter Financial Report 2017-2018 3 FINANCIAL HIGHLIGHTS THIRD QUARTER PERFORMANCE 2017-2018: $139.9M Our revenue increased by 1.3% this quarter, mostly driven by higher Radio-Canada 2016-2017: $138.0M advertising revenue on all platforms. TOTAL INCREASE This growth in advertising revenue was partly offset by lower subscriber fees as Canadians continue to reduce their subscription packages (“cord-shaving trend”). $1.9M or 1.3% Total government appropriations will increase by a further $75.0 million this year. 2017-2018: $303.6M This will bring the total reinvestment in the public broadcaster to $150.0 million 2016-2017: $288.8M annually, as announced by the federal government in March 2016. TOTAL INCREASE The 5.1% increase in government funding this quarter reflects part of this year’s GOVERNMENT $14.8M or 5.1% FUNDING increase in funding. 2017-2018: $458.2M Total expenses were up by 2.9% as we continued to broadcast more original 2016-2017: $445.1M content across our platforms this fall. In particular, we aired more original Arts and Entertainment programming and provided more local services. In addition, we TOTAL INCREASE continued our investment in our digital capabilities. $13.1M or 2.9% CONSOLIDATED RESULTS For the three months ended December 31 For the nine months ended December 31 (in thousands of Canadian dollars) 2017 2016 % change 2017 2016 % change Revenue 139,852 138,045 1.3 372,254 429,476 (13.3) Government funding 303,550 288,777 5.1 834,834 767,966 8.7 Expenses 458,189 445,132 2.9 1,242,796 1,229,689 1.1 Results before non-operating items (14,787) (18,310) 19.2 (35,708) (32,247) (10.7) Non-operating items 577 (93) N/M 46,173 (2,214) N/M Net results under IFRS for the period (14,210) (18,403) 22.8 10,465 (34,461) N/M Results on a Current Operating Basis1 11,379 8,757 29.9 56,581 3,286 N/M N/M = not meaningful 1 Results on a Current Operating Basis is a non-IFRS measure. This excludes items that do not generate or require funds from operations. A reconciliation of net results to Results on a Current Operating Basis is provided in the Discussion of Results section of this report. Net results under IFRS were a loss of $14.2 million this quarter, compared to $18.4 million last year, an improvement mainly due to higher levels of government funding recognized and higher revenue. Partly offsetting these items was an increase in our expenses as we broadcast more original content. Results on a Current Operating Basis were a gain of $11.4 million this quarter, an improvement of $2.6 million when compared to the same period last year. After nine months, our net results under IFRS and Results on a Current Operating Basis have further improved relative to last year, largely due to the sale of our investment in Sirius XM Canada Holdings Inc. during the first quarter. Our nine month results in the prior year also include additional revenue and operating expenses associated with broadcasting the Rio 2016 Olympic Games. CBC/Radio-Canada Third Quarter Financial Report 2017-2018 4 BUSINESS HIGHLIGHTS Both CBC and Radio-Canada continued to offer a selection of premium content across platforms, with an especially strong showing on our digital platforms this quarter. CONTENT AND SERVICES In a major milestone, CBC/Radio-Canada doubled its digital reach two and a half

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