Inc. 2008 Activity report

Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC.

TABLE OF CONTENTS Reaching out to the world 3 Investing in the Future 4 Strategies that work 6 Message to Shareholders 10 You, our customers, our public 14 At your service 15 A true Partner 15 Radio... Tuned in 17 Cable that delivers 18 Customers focus 20 A Powerful Network 21 Five-Year Financial Statement 22 Customer Statistics 24 Experienced Management 26 Seasoned directors 28 Investor Information 30 Other Information 32

GLOSSARY ARPU Average Monthly Service Revenue per Basic Cable service customer CAGR Compound annual growth rate DOCSIS Data Over Cable Service Interface Specifications DTA Digital Terminal Adaptor DVR Digital Video Recorder E Euro currency EU European Union HD High Definition HSI High Speed Internet IP Internet Protocol Kbps Kilobits per second Mbps Megabits per second MHz Megahertz RGU Revenue-Generating Units include Basic Cable, HSI, Digital Television and Telephony service customers SVOD Subscription Video On Demand service VOD Video On Demand service WI-FI Wireless Fidelity

this activity report should be read in conjunction with the COGECO’s 2008 annual Management’s Discussion and Analysis (“MD&A”).

SUMMARY DISCLAIMER WITH RESPECT TO FORWARD LOOKING STATEMENTS Certain statements in this report may constitute forward-looking information. Forward- looking information relate to our future outlook and anticipated events, our business, our operations, our financial performance, our financial condition or our results that are not historical facts. Forward-looking information is subject to certain factors, including risks and uncertainties (described in the “Uncertainties and main risk factors” section in COGECO’s 2008 annual MD&A) that could cause actual results to differ materially from what we currently expect, although we consider that these assumptions are reasonable. This document is also covered by the disclaimer regarding forward-looking statements in COGECO’s 2008 annual MD&A. Therefore, we invite the reader not to place undue importance on forward-looking information. Throughout this document, all amounts are in Canadian dollars unless otherwise indicated.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 1 We aim to make your investment profitable . Our ability in satisfying customers and listeners is one of your greatest assets. Our commitment to the community makes us your partner . That ’s the way we build value and growth for you.

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Date COgeco INC 2

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 3

Reaching out to the world COGECO focuses on serving consumer and announcer communication needs through both cable telecommunications and . Our target: maximize shareholder value through increased profitability and continuing growth. Radio Our radio subsidiary, Cogeco Diffusion, wholly owns and operates the RYTHME FM network, with stations in Montréal, Québec City, the Mauricie and the Eastern Townships. It also owns and operates Québec City’s 933. Cable Cogeco Cable, the cable subsidiary, offers Analogue and Digital Television, HSI and Telephony services to residential and business customers in and in Portugal. It is the second largest basic cable service distributor in Ontario, Québec and Portugal in terms of number of Basic Cable customers served. In all, Cogeco Cable operates a total of 2,716,874 RGU in 2,427,534 homes passed in its territory.

RGU (1) RGU (1) Breakdown by service Breakdown by territory Cable sector Cable sector

17.1% Telephony 26.7% 42.4% Portugal 17.2% Basic Cable 51.1% Digital Ontario Television 22.2% 23.3% Québec HSI

(1) As At august 31, 2008.

Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC. 4

INVESTING IN THE FUTURE In business for over 50 years, we are a sound Company focusing on internal and external growth. Our balance sheets are solid and healthy, due primarily to continued growth in revenue, operating income before amortization (“EBITDA”) and free cash flow. we are growing strongly with a CAGR over the last 5 years of 19.6% for revenue, 21.4% for EBITDA and 23.5% for free cash flow. we closely monitor our financial leverage (net Indebtedness/EBITDA), which makes it possible to support our internal and external growth strategy. we continually improve our service offering in the cable sector to maximize growth by investing in our networks and equipments as well as in new technology. Radio, with solid programming aligned with listener and advertiser tastes, aims to gaining market share, and maximize profitability. Our innovative management team takes a bold, disciplined approach to managing the business and seeking growth opportunities in order to create long-term value for our shareholders.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 5

REVENUE EBITDA FROM $ 000 CONTINUING OPERATIONS $ 000

2004 541,205 2004 207,038 ➔ 19. 6 % ➔ 2 1. 4 % 2005 572,691 2005 229,117 CAGR CAGR (1) 2006(1) 646,750 2006 259,517 2007 969,335 2007 371,235 (2) (2) 2008 1,108,900 2008 448,894 0 0 250,000 500,000 500,000 1,000,000

FREE NET INCOME CASH FLOW (LOSS) PER SHARE $ 000 $ 2004 (0.65)

2004 43,182 2005 (1.21)

➔ 2 3 . 5 % (1) 2005 44,344 2006 1.40 CAGR 2006(1) 34,266 2007 4.50 (2) 2007 29,424 2008 1.50 2008(2) 100,436 (2) (1) 0 1 2 3 4 5 0 50,000 100,000

OPERATING NET INDEBTEDNESS (4)/ MARGIN (3) EBITDA FROM CONTINUING % OPERATIONS

2004 38.3 RATIO 2005 40 2004 2.6 2006(1) 40.1 2005 3.1 2007 38.3 2006(1) 4.9 2008(2) 40.5 2007 2.7 2008(2) 2.5 0 25 50 0 1 2 3 4 5

(1) INCLUDES THE RESULTS OF CABOVISÃO SINCE THE DATE OF ACQUISITION OF CONTROL ON AUGUST 1, 2006. (2) Includes the results of Cogeco Data Services (“CDS”) since the date OF ACQUISITION Of control on July 31, 2008. (3) EBITDA/REVENUE. (4) INDEBTEDNESS NET OF CASH AND CASH EQUIVALENTS.

Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC. 6

Strategies That work All of COGECO’s business objectives focus on maximizing shareholder value through increased profitability and continuing growth. Tight control over costs and business processes Operating costs are up 10.4% from fiscal 2007 compared with a 14.4% rise in revenue. Applying Bill 198 and its regulations is a strategic project that sparks continuous improvement. existing controls have been documented; new controls over financial reporting for many processes were designed and implemented in Canada and are currently being implemented in Portugal. modifications to the segregation of duties related to access controls over various databases and automated controls are being implemented. Cable Sustained corporate growth Acqusition of MaXess Networx ® in Windsor (Q3-2008). Acqusition of FibreWired Burlington Hydro Communications in Burlington (Q3-2008). Acquisition of Toronto Hydro Telecom, now known as Cogeco Data Services in Toronto (Q4-2008). Increase of 231,209 RGU, an increase of 9.3% compared to the end of last fiscal year.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 7

Cable – CONTINUOUS IMPROVEMENT OF NETWORKS AND EQUIPMENT $233.9 million invested in customer premise equipment, line extensions, upgrade and rebuild, support capital and scalable infrastructure. In Canada, test period underway for phased deployment of the DOCSIS 3.0 standard in 2009. In Canada, test period underway for phased deployment of switched digital video in 2009. Currently assessing the applicability of DTA technology. Radio – ENHANCED PROGRAMMING TO GAIN MARKET SHARE AND IMPROVE PROFITABILITY rythme FM remained the Montréal market leader among women aged 25 to 54. strategic enhancements made to RYTHME FM programming. 933 positioned as one of Québec City’s most listened to stations in 2008.

Cogeco Inc. anglais (sommaire 08)

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Date COgeco Strategies INC.C That Work 8

KEY PERFORMANCE INDICATORS

2008 Objectives (1) 2008 Results (2) Target 2009 Objectives

Revenue 1,190 1,109 – 1,243 EBITDA 425 449 513 Net income 30 43 35 Free cash flow 65 100 95

In millions of dollars. (1) As described in COGECO’s 2007 annual MD&A. (2) Excluding discontinued operations.

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Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 9

2008 Objectives (1) 2008 Results (2) Target 2009 Objectives

Revenue 1,190 1,109 – 1,243 EBITDA 425 449 513 Net income 30 43 35 Free cash flow 65 100 95

Exceeded Achieved Not achieved –

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Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC. 10

For you Message TO SHAREHOLDERS

Dear friends,

Fiscal 2008 was a year of changes that saw COGECO Inc. post resounding results for our shareholders. Our performance met our expectations. Revenue grew by 14.4%, EBITDA by 20.9%, operating margin by 2.2% and free cash flow more than tripled. These financial results are primarily due to decisions focussed on profitability and on developing the Company. It was this perspective that guided us in disposing of our investment in TQS Group. That decision, a matter of hard reflection, arose from changes in the general television market that rendered any involvement in that sector not profitable for us. After several years through which we attempted – bringing to bear all of our creativity, our effort and our financial commitment – to maintain the network’s market shares, revenue remained insufficient. In the interest of our shareholders, we made the decision to withdraw from the sector, which continues to experience structural problems. Accordingly, we recorded a loss from discontinued operations of $18.1 million for fiscal 2008 and we reflected the reclassification of the results ofT QS Group as discontinued operations in fiscal 2007 comparative figures. The radio sector, however, is doing well. RYTHME FM undertook a strategic shift in 2008 with changes to its programming schedule, aligning it ever more closely with listener and advertiser tastes. The result is that RYTHME FM Montréal has maintained its lead position in the Montréal market in the main categories – 12 and older, adults 25-54 and women 25-54. RYTHME FM has been the uncontested listening favourite of Montrealers since 2004. Most of the other RYTHME FM stations also hold an enviable place in the hearts of their own listeners. 933 recaptured Québec City. After several difficult years, 933 is once again in the leading group. Its Opinions and Classic Rock formula fills a need for people in Québec City for radio that’s real – but respectful.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 11

In the cable sector, on a consolidated basis, the number of homes passed, RGU, and customers subscribing to our services moved upward. Canadian operations saw more subscribers than projected, except for the HS I service, which still grew by 13.9%. In Europe, the financial performance was satisfactory despite lower-than-projected growth in the number of subscribers, except for the new Digital Television service. Fiscal 2008 was a very busy year filled with promising business opportunities in Canada. In the third quarter, Cogeco Cable, our cable subsidiary, acquired MaXess Networx, the telecommunications division of EnWin Energy Ltd. (the city of Windsor’s energy company) as well as FibreWired Burlington Hydro Communications, the tele­ com­munications division of Burlington Hydro Electric Inc. (the city of Burlington’s energy company). These acquisitions in our territories are an important addition to our Cogeco Business Solutions offering. In the fourth quarter, an all new market opened to Cogeco Cable with the acquisition of Toronto Hydro Telecom Inc., serving busi­ nesses in the Greater Toronto Area, the largest local market for business telecommunications services in Canada. With this company, which has become Cogeco Data Services, we envision interesting growth opportunities in the foreseeable future. These acquisitions fit perfectly into Cogeco Cable’s external growth strategy and are as important steps in our cable subsidiary’s service offering to business customers. They give us access to additional expertise and markets that should contribute to our future growth and development. However, Cogeco Cable did not participate in the bidding for the wireless communications industry. Reaching record levels, this bidding will result in new players in the industry. We made the decision to abstain because our business models for wireless network implementation showed negative returns and cash flows for several years after launch – in an increasingly competitive environment. Cogeco Cable’s choice of development strategy is clear and straightforward. Aimed at a more certain return on investment, it is to acquire communication and cable systems at home and abroad. Expertise will be focused on strength – providing customers with the finest cable telecommunications products backed by attentive, client-facing service. That being said, the position can be reviewed if customer demand to bundle wireless services into the broader offering becomes urgent. Cogeco Cable has continued to enrich its services offerings with the launch of Digital Television in Portugal, and with better Digital, HD and VOD offerings, continued deployment of Telephony and its Wi-Fi service in Canada. However, growth is tapering off in both Canada and Europe. Our neighbours to the south are experiencing trying times that might impact the global economy and Canadians. In the Iberian Peninsula, the real estate sector has been severely impacted by a surplus housing, and rising oil and food prices have squeezed consumer’ disposable income. Increased competition with new competitors in all product categories in Portugal has

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Date COgeco Message TO INC. SHAREHOLDERS 12

These financial results are primarily due to decisions focussed on profitability and on developing the Company.

1. 2.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 13

already had an unfavourable impact on Cabovisão’s growth rate for 2008, which could persist into 2009. Still, Cabovisão has all the advantages to adapt to the situation and, in our estimation, the low market penetration rate bodes well for sustained growth in the These financial medium and long terms. From a technology standpoint, the future is ripe with opportunity. Changing consumer habits and the different styles by new gene­ rations of consumers are pushing Cogeco Cable to reinvent itself. results are In addition to constantly modernizing its systems, Cogeco Cable is currently testing technologies to better meet the growing demand for capacity and content. CableLabs Internet standard DOCSIS 3.0 will position us as an innovative company and leader in the area of high-speed services. With it, we will be able to use more bandwidth primarily due on the hybrid fibre-coaxial network and offer speeds of up to 160 Mbps. Switched digital video is also being very seriously considered, enabling us to offer greater flexibility in the use of our equipment. Last we are currently in the process of assessing the applicability of to decisions DTA technology. This technology allows conversion of digital television signals to analogue signals locally in viewers’ homes through a device installed on the television set. Deployment of this technology would allow for a broader use of Digital Television services. focussed on The foundation of our success is customer satisfaction, and customer service is the cornerstone. With our superior quality products and services, combined with attentive listening and clear processes, we rank among the best in customer service. This past year, Cogeco Cable’s customer service call centres in Canada, located in Trois-Rivières in profitability Québec and Burlington in Ontario, received two of the most prestigious honours, including the Highest Customer Satisfaction award (for the telecommunications industry) presented by the Service Quality Measurement Group Inc., an international firm that measures and evaluates call centres from different industries. We intend to build and on on this strength and retain this title. COGECO – in your image, looking ahead to growth in 2009 and beyond. The path to getting there lies in our employees – their loyalty, their know-how, their thirst for learning – and in our disciplined management developing team, and experienced board. We’d like to thank them. We keep on the Company. getting better for you. For you…and for our future.

1. Louis Audet 2. Jan Peeters president and Chief Executive Officer board Chair

Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC. 14

You, our customers, our public

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 15

With communications fuelling the world, our customers’ needs for entertainment, information and communicating are constantly increasing. COGECO – radio or cable – is all about giving customers what they want. Radio that reaches listeners and advertisers, competitive and diversified cable services with straightforward pricing, outstanding customer service, professionalism… everything for you. At your service Our team is committed to providing our customers the best and ensuring increasing returns to our shareholders. Our employees make full use of their expertise and knowledge to ensure our customers’ well-being and work continuously to grow and make a difference. Our employees are key to our growth and success, and together we can look to the future with optimism. Loyal employees support a committed and disciplined management team and an experienced board: the ingredients for growth for COGECO in 2009 and the years to come. A true Partner We are involved in the communities we serve, so we find it completely natural to share our success with them. We invest in and support local causes and events, small and large, in education, in the arts, in social and community issues. Our employees offer their time, talent and enthusiasm for a range of worthy causes – they are active partners in their environment. TVCOGECO, Cogeco Cable’s community television, offers programm­ ing that reflects the concerns of its different communities and reaches out to customers in their homes.

To our customers, COGECO is a committed corporate citizen they can count on.

Cogeco Inc. anglais (sommaire 08)

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Date COgeco You, our INC. customers, 16 our public

RADIO... TUNED IN Many people rely on radio to navigate their day – rise and shine, the ride to work, lunch and munch, the long way home, and then, finally, feet up and heads back. Despite the proliferation of media and communication technologies, radio continues to be a preferred choice of consumers according to a study(1) carried out in 2007 by Canadian Internet Project. While the demise of radio was predicted only a few years ago, adults 18 and over listened to an average 9 hours of radio per week in 2007 compared with 9.3 hours in 2004. In spite of the slight dip in listening time, use of radio among traditional media grew by 2% over the same period from 18% in 2004 to 20% in 2007. It continues to be a big part of peoples’ lives. That means for COGECO, radio will stay tuned in going forward. The RYTHME FM network and radio station 933 boast a solid programming schedule, seasoned and popular hosts, the hottest promotions and music that rocks to attract listeners, win market share – and bring more advertisers into the fold. On the air across Québec, RYTHME FM is a winner. In Montréal and Trois-Rivières, it holds the top spot in its target group of women 25-54. 933’s Opinions and Classic Rock formula has put the station in 2nd place in the highly competitive Québec City market among its target group of men aged 25-54.

Station Market target Market share rank group (target group) (target group)

105.7 Montréal women 18.6% 1st RYTHME fm 25-54 100.1 Mauricie women 27.9% 1st RYTHME fm 25-54 933 Québec men 15.3% 2nd City 25-54 93.7 Estrie women 13.9% 3rd RYTHME fm 25-54 91.9 Québec women 7.8% 6th RYTHME FM City 25-54

* BBM surveys conducted from January 7 through March 2, 2008.

(1) Zamaria, Charles and Fred Fletcher. Canada Online! The Internet, media and emerging technologies: Uses, attitudes, trends and international comparisons 2007. Canadian Internet Project, 2008. Toronto: p.149.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 17

Cogeco Inc. anglais (sommaire 08)

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Date COgeco You, our INC. customers, 18 our public

cable that delivers Television A wide range of channels with attractive packages – the power of choosing. Analogue Television. digital Television. hd Television in Canada. vOD and SVOD in Canada. packages for all tastes and budgets.

HSI Online games or videos, photo sharing, browsing or chatting online – we open up the world for our clients. several packages to satisfy our customers’ needs. Complete suite of security products. In Canada, service regularly recognized as one of the 10 fastest in by independent web site www.broadbandreports.com. Complementary Wi-Fi service for our Canadian customers.

Telephony Nothing is nicer than talking to friends and family. No one understands that better than Cogeco Cable. Calls channelled through our secure private network. turnkey offering with the five most popular features in Canada. several packages to meet the different needs of our customers in Portugal.

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Date 2008 Activity report 19

Two or three With Cogeco Complete Connection in Canada, and the Duo and Triplo in Portugal. Option to bundle two or three services to save money. simplicity of single billing. bundled offerings stimulate cross-selling and promote retention.

In business In our traditional footprint. Custom packages for unique needs. B usiness services line in all our territories. T elevision, HSI, Telephony and data services. Attentive and available sales and support team.

In the Greater Toronto Area Cogeco Data Services. E nhanced service offering for Greater Toronto Area businesses. F acility-based network with built-in redundancy for more security, reliability and performance as well as more scalable services. E thernet, private line, VOIP, HSI access, dark fibre cables, data storage, data security and co-location services. R eliable state-of-the-art network. H igh level of service. Over 500 km of wholly owned fibre optic network. S peeds up to 1 Gigabit per second.

Cogeco Inc. anglais (sommaire 08)

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Date COgeco You, our INC. customers, 20 our public

Customers focus Cogeco Cable’s top priority? Customers, of course! Since its beginnings, Cogeco Cable has strived to know, satisfy and surprise its customers – to go that extra mile to meet their needs. Everyone knows that happy customers are loyal, excellent ambassadors, and reflect success and prosperity. In 2007 and 2008, Cogeco Cable’s call centres in Canada received top ranking awards. Awards that testify to the innovativeness and leadership of Cogeco Cable’s call centres and to its commit­ment to making customers its top priority.

SQM – Service Quality Measurement Inc. International firm that measures and evaluates call centres in different sectors. Highest Customer Satisfaction – 2007 and 2008. First Call Resolution or Customer Satisfaction Improvement Merit – Best improvement (2007 and 2008).

RMA – Relationship Marketing Association, Québec Not-for-profit organization that promotes direct, interactive and relational marketing in Québec. 2007 Flèche d’argent award (Customer Contact Centre “Tool box”, Québec). 2007 Personality of the year award (Vice President, Customer Services and Residential Sales, Québec). 2008 finalist in the E“ mployer / Contact Centre of the year” category.

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 21

A powerful network Cogeco Cable’s network evolves constantly in line with customer needs. The company keeps on investing to modernize and upgrade its networks and equipment, and to integrate state-of-the-art technologies to improve and broaden its offering. For Cogeco Cable, investing in its networks is key since it signifies investing in customer satistaction and, ultimately, in the company’s prosperity.

Being tested or assessed by Cogeco Cable in Canada DOCSIS 3.0, Internet standard from CableLabs, a cable telecommunications industry R&D consortium. E nables better utilization of bandwidth. S peeds up to 160 Mbps. Switched digital video. B etter utilization of our equipment. G reater personalization of our services. DTA Allows conversion of digital television signals to analogue signals. Allows broader use of Digital Television.

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Date COgeco INC. 22

(2) – $ 1.7% 1.7 2.6 3.5 982 38.3% 12.6% 0.06 2004 (0.71) (0.65) 6,964 12.67 59,377 43,182 (10,600) (11,582) 541,205 148,162 325,047 540,577 207,038 104,980 692,316 1,616,520 1,763,066 16,372,356 16,343,673

(2) – $ 3.0% 2.4 3.1 4.0 40.0% 14.1% 0.64 2005 (1.84) (1.21) 13.95 45,872 10,473 57,196 44,344 (19,813) (30,286) 572,691 172,644 302,589 717,019 229,117 128,300 701,975

1,634,226 1,801,874 16,450,004 16,419,584 (3) (2)

$ 4.8% 4.0 4.9 4.4 40.1% 13.4% 1.69 1.40 (0.29) 2006 15.72 (4,833) 23,101 78,053 27,934 58,869 34,266 646,750 199,166 319,259 259,517 164,900 577,431 2,248,522 1,337,860 2,649,263 1,025,770 16,552,456 16,507,666 (2) $ 6.3% 2.5 2.7 4.3 38.3% 15.9% 5.16 4.50 2007 (0.66) 22.36 (1,265) 74,740 93,958 85,623 86,056 29,424 (10,883) 969,335 283,565 392,460 371,235 254,141 2,427,883 1,053,583 2,836,759 1,123,270 16,672,652 16,605,828

(1) $ 8.7% 2.7 2.5 6.4 40.5% 17.5% 2.59 1.50 2008 (1.08) 26.90 25,108 43,165 70,669 (18,057) 362,788 148,501 421,026 448,894 262,352 229,723 100,436 2,707,951 1,108,900 1,164,006 3,059,481 1,261,610 16,740,446 16,684,809 T IO NS T IO NS

T IO NS (8) T IO NS T IO NS T IO NS T IO N T IO N TED A D J USTMENTS ) T I NG F I N A CIA L E X PENSE / AX ES A ND I NG

T IO NS (6)

(5) O PER A SH A REH O LDERS ’ E Q U I TY

/ / T IO N T IO N

(4)

(7) (11) (11) (9)(10) VER A GE NET SSETS EMPL O YED VER A GE NUMBER A ND I NG SH RES T IO NS BEF O RE A M RT IZA T IO NS BEF O RE A M RT IZA T I NG N CO ME FR O M NT NU T I NG N CO ME FR O M NT NU T I NG N CO ME FR O M NT NU PER A T I NG M A RG N T F I S CA L YE A R - END E-YEAR A L SSETS O PER A O PER A A ND I N C RE SE DEFERRED H RGES I N CO ME ( L O SS ) FR M NT NU NG PER A A A ND O THER I TEMS I N CO ME ( L O SS ) FR M D S NT NUED PER A O F UST V O PER A RETURN O N A (in thousands of dollars, except other

RETURN O N E Q U I TY T O O PER A OPERATIONS REVENUE statistics, per share data and ratios) statistics, per share FINANCIAL RATIOS NET I NDEBTEDNESS I N CO ME FR O M NT NU NG PER A bef O RE A M RT IZA FREE CASH FLOW CA SH FL O W FR M PER A ACQ U I S T IO NS O F IX ED A SSETS NET I N CO ME ( L O SS ) I N CO ME ( L O SS ) FR M D S NT NUED PER A I N CO ME ( L O SS ) FR M NT NU NG PER A E A RN I NGS OTHER STATISTICS NUMBER O F SH A RES UTST

SH A REH O LDERS ’ E Q U I TY I NDEBTEDNESS F I N A CIA L E X PENSE I N CO ME BEF O RE T O PER A bef O RE A M RT IZA BUS I NESS ACQ U S T IO NS (A ND REL A FREE CA SH FL O W FINANCIAL CONDITION F IX ED A SSETS NET A SSETS EMPL O YED

WE I GHTED A NET I NDEBTEDNESS RETURN RATIOS O PER A net I N CO ME ( L O SS ) PER SHARE DATA (BASIC) PER SHARE DATA FI FINANCIAL HIGHLIGHTS

Cogeco Inc. anglais (sommaire 08)

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Date 2008 Activity report 23

(2) – $ 1.7% 1.7 2.6 3.5 982 38.3% 12.6% 0.06 2004 (0.71) (0.65) 6,964 12.67 59,377 43,182 (10,600) (11,582) 541,205 148,162 325,047 540,577 207,038 104,980 692,316 1,616,520 1,763,066 16,372,356 16,343,673

(2) – $ 3.0% 2.4 3.1 4.0 40.0% 14.1% 0.64 2005 (1.84) (1.21) 13.95 45,872 10,473 57,196 44,344 BLE (19,813) (30,286) 572,691 172,644 302,589 717,019 229,117 128,300 701,975 A ND Y

A 1,634,226 1,801,874 P A I 16,450,004 16,419,584 (3) (2)

$ UNTS P 19 TE 19 4.8% 4.0 4.9 4.4 O RTNERSH 40.1% 13.4% 1.69 1.40 (0.29) A 2006 15.72 . (4,833) 23,101 78,053 27,934 58,869 34,266 , ACCO O N L P TY 646,750 199,166 319,259 259,517 164,900 577,431 A I U 2,248,522 1,337,860 2,649,263 1,025,770 Q 16,552,456 16,507,666 ’ E (2) F GENER $ SE REFER T A 6.3% 2.5 2.7 4.3 LDERS 38.3% 15.9% 5.16 4.50 NDEBTEDNESS SS O O 2007 (0.66)

22.36 . PLE O (1,265) S 74,740 93,958 85,623 86,056 29,424 NK I (10,883) REH NS 969,335 283,565 392,460 371,235 254,141 A A CO’ IO 2,427,883 1,053,583 2,836,759 1,123,270 , B T GE 16,672,652 16,605,828 N N THE L A IO GE SH T RE I

PER A

A N CO A (1) “ I PE VER $ , SH UGUST 2006. 1, N 8.7% 2.7 2.5 6.4 NUED O I IO N A SURES 40.5% 17.5% 2.59 1.50 RES /A 2008 (1.08) A 26.90 NUED O NT A I L O LUT I 25,108 43,165 70,669 O . (18,057) . CO NT 31, 2008. 31, ULY L ME 362,788 148,501 421,026 448,894 262,352 229,723 100,436 S I RT N D ES I NG SH CO 2,707,951 1,108,900 1,164,006 3,059,481 1,261,610 N J NTR O CIA I T . S I F D T I 16,740,446 16,684,809 N L I SS O O L O A B F CO N O YED O N O L REP I IA O A TE V IO R L P F N O A T NTR T IO NS T IO NS O THE D N I IO AA

NNU N O ICA T T IO NS G I THER L F - AI (8) RD I F CO S I T IO NS N TED T O U , G SS A O A N O ND O T IO NS SSETS EMPL N L IO C T CO 2008 A I F ACQ ND SUB S ME A I . SEE “ . GE NTEREST U . CO SSETS REL TE O GE NET A N A RES A T IO NS T THE RE T IO N T IO N A F CO NG I , A I A . C D I TED A D J USTMENTS ) F ACQ . LENTS LL LS AI VER A REVENUE O UTMENTS RE AI V / J I /A A LENTS E THE D TE O N U D NG SH N I A A C NTR T I NG DET Q V T

I N IO I O . I O F I N A CIA L E X PENSE U T T ND PREP TEMENTS O NG A / -CO NG SH Q I NS AX ES A ND I NG A I

SH E L 2008 REFLE IZA IZA N T E DE D ÃO S IO T IO NS (6) PLE V O C O S T I URR RT RT CA

I L ST SH E N A S V C FURTHER I O O I , N

(5) O PER A SH A REH O LDERS ’ E Q U I TY

O R ND CA TE V M M CIA RE / / T IO N T IO N B ES

- F (4)

PER A O N DS S F N N A I ND CA (7) AX O MULT SH A O (11) (11) RE A RE A (9)(10) N , DEFERRED A F C F CA I &A O O RD ES I O SH A ME T F CA T BLE T NUED O MD I

I GURES O I L TED F I LUDE N CO RT A NT B ICA N ME BEF ME BEF O D XC VER A GE NET SSETS EMPL O YED I VE F IA I L ND SUB VER A GE NUMBER CO PPL A ND I NG SH RES T CO CO RE I S O REP I A

N N O NS E L R T IO NS BEF O RE A M RT IZA T IO NS BEF O RE A M RT IZA NS A A IO PLE A ME A M D I RUED L T NG I NG I SSETS LESS CA I I O A MP CO T T NNU T I NG N CO ME FR O M NT NU T I NG N CO ME FR O M NT NU T I NG N CO ME FR O M NT NU PER A T I NG M A RG N A A ME BEF L A UL N A C LUDES THE RESULTS O LUDES THE RESULTS O T F I S CA L YE A R - END L T SS FR C C CO A L SSETS F THE CO PER PER ND ACC O O PER A O PER A A ND I N C RE SE DEFERRED H RGES I N CO ME ( L O SS ) FR M NT NU NG PER A A A ND O THER I TEMS I N CO ME ( L O SS ) FR M D S NT NUED PER A O F UST O N N N NDEBTEDNESS NET O CO THE  I O  I  I L T A MULT PER  O  O I NET  CA 2008A  I

(2) O PER A RETURN O N A (in thousands of dollars, except other (1) RETURN O N E Q U I TY T O O PER A OPERATIONS REVENUE statistics, per share data and ratios) statistics, per share FINANCIAL RATIOS NET I NDEBTEDNESS I N CO ME FR O M NT NU NG PER A bef O RE A M RT IZA FREE CASH FLOW CA SH FL O W FR M PER A ACQ U I S T IO NS O F IX ED A SSETS NET I N CO ME ( L O SS ) I N CO ME ( L O SS ) FR M D S NT NUED PER A I N CO ME ( L O SS ) FR M NT NU NG PER A E A RN I NGS OTHER STATISTICS NUMBER O F SH A RES UTST

SH A REH O LDERS ’ E Q U I TY I NDEBTEDNESS F I N A CIA L E X PENSE I N CO ME BEF O RE T O PER A bef O RE A M RT IZA BUS I NESS ACQ U S T IO NS (A ND REL A FREE CA SH FL O W FINANCIAL CONDITION F IX ED A SSETS NET A SSETS EMPL O YED

WE I GHTED A NET I NDEBTEDNESS RETURN RATIOS O PER A net I N CO ME ( L O SS ) (3) PER SHARE DATA (BASIC) PER SHARE DATA (4) (5) (6) (8) (7) (9) (10) (11)

Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC. 24

cable CUSTOMER STATISTICS As at August 31, HOMES PASSED

2,500,000

2,000,000

1,500,000

1,000,000 2004 2005 2006(1) 2007 2008

REVENUE-GENERATING UNITS

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000 2004 2005 2006(1) 2007 2008

BASIC CABLE SERVICE CUSTOMERS

1,500,000

1,250,000

1,000,000

750,000

500,000 2004 2005 2006(1) 2007 2008

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Date 2008 Activity report 25

HSI SERVICE CUSTOMERS

700,000

600,000

500,000

400,000

300,000

200,000 2004 2005 2006(1) 2007 2008

DIGITAL TELEVISION SERVICE CUSTOMERS

500,000

400,000

300,000

200,000 2004 2005 2006(1) 2007 2008

TELEPHONY SERVICE CUSTOMERS

500,000

400,000

300,000

200,000

100,000

0 2004 2005 2006(1) 2007 2008

(1) Includes the results of cabovisÃo since the date of acquisition of control on august 1, 2006.

Cogeco Inc. anglais (sommaire 08)

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Date COgeco INC. 26

Seasoned MANAGEMENT Backed by competent, dedicated employees, the COGECO management is a complementary team, blending new ideas and sound experience.

1 louis Audet 1 5 President and Chief Executive Officer With COGECO since 1981

2 elizabeth Alves Senior Director, Internal Audit With COGECO since 2008

3 Marie Carrier Director, Corporate Communications With COGECO since 2003

2 6 4 pierre Gagné Vice President, Finance and Chief Financial Officer With COGECO since 1995

5 christian Jolivet Chief Legal Officer and Secretary With COGECO since 1997

6 Yves Mayrand Vice President, Corporate Affairs With COGECO since 1988 3 7 7 Éric Simon Director, Financial Planning With COGECO since 2006

8 alex Tessier Treasurer With COGECO since 2007

4 8

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Date 2008 Activity report 27

Subsidiaries

COGECO CABLE COGECO DIFFUSION

J. François Audet Richard Lachance Vice President, Vice President, Radio Telecommunications RYTHME FM NETWORK François Beaulieu André St-Amand Vice President and Vice President, Programming Chief Information Officer 105.7 RYTHME FM Denis Bélanger Laval/Montréal (Québec) Vice President, Richard Lachance Technology Development General Manager

Jacques Gravel 91.9 RYTHME FM Vice President, Network Services Québec (Québec) and Québec Operations Jean-Paul Lemire General Manager Jules Grenier Vice President, Portugal 93.7 RYTHME FM Estrie (Québec) René Guimond André David Vice President, Development, General and Sales Manager New Media 100.1 RYTHME FM Chris MacFarlane Mauricie (Québec) Vice President, Richard Lachance Corporate Engineering Acting General Manager

Ron A. Perrotta 933 Vice President, Marketing Québec (Québec) and Strategic Planning Jean-Paul Lemire General Manager Louise St-Pierre Vice President, Customer Services and Ontario Operations

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Date COgeco INC. 28

Experienced DIRECTORS COGECO’s strategic direction and ongoing operations are governed by a seasoned Board of Directors made up of independent members who base their decisions on their experience and knowledge of the industry and the business world, to assure COGECO of continued development within its regulatory and legal framework.

1 Jan Peeters 5 andré Brousseau, B.A., B.Péd., L.Péd.L. Montréal (Québec) Trois-Rivières (Québec) President and Chief Executive Corporate Director Officer and Board Chair, Director Olameter Inc. Committee: Audit Board Chair Committees: Audit, Human Resources, 6 pierre L. Comtois, B. Sc. Com., Adm. A. Corporate Governance, Strategic Montréal (Québec) Opportunities (Chair) Vice-Chairman of the Board and Chief Investment Officer, 2 louis Audet, Eng., MBA Optimum Asset Management Inc. Westmount (Québec) Director President and Chief Executive Officer Committees: Audit (Chair), Corporate COGECO Inc. and Cogeco Cable Inc. Governance Director Committee: Strategic Opportunities 7 claude A. Garcia, B.A., B. Com Montréal (Québec) 3 Mario Bertrand Corporate Director Monaco Director Managing Partner Committees: Human Resources (Chair), OMC Ltd and Wolfgang Strategic Opportunities Entertainment Inc. Director 8 germaine Gibara, MA, CFA Committee: Strategic Opportunities Montréal (Québec) President, 4 Jacqueline L. Boutet, C.M., M.M., ICD-D Avvio Management Inc. Montréal (Québec) Director President, Committees: Human Resources, Jacqueline L. Boutet Inc. Strategic Opportunities Director Committees: Audit, Human Resources, 9 david McAusland, B.C.L., LL.B. Corporate Governance Beaconsfield (Québec) Lawyer and Corporate Director Director Committees: Corporate Governance (Chair), Strategic Opportunities

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Date 2008 Activity report 29

1 6

2 7

3 8

4 9

5

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Date COgeco INC. 30

INVESTOR INFORMATION

CONSOLIDATED CAPITALIZATION

As at August 31, 2008 (1) 2007 2006 (2) (in thousands of dollars) $ $ $

INDEBTEDNESS 1,164,006 1,053,583 1,337,860 SHAREHOLDERS’ EQUITY 421,026 392,460 319,259 TOTAL 1,585,032 1,446,043 1,657,119

SHARE INFORMATION Number of shares outstanding as at September 30, 2008

Multiple voting shares 1,842,860 Subordinate voting shares 14,897,586

Monthly changes in COGECO’s closing share price From September 2007 to August 2008

50

40

30

20 S O N D J F M A M J J A

(1) INCLUDES THE RESULTS OF CDS SINCE THE DATE OF ACQUISITION OF CONTROL ON July 31, 2008. (2) INCLUDES THE RESULTS OF CABOVISÃO SINCE THE DATE OF ACQUISITION OF CONTROL ON August 1, 2006.

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Date 2008 Activity report 31

Yearly changes in COGECO’s closing share price since 1986 As at August 31, $ 40

30

40

20

30

10

20

0

10 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0.08 0 changes in dividends paid

to COGECO1986 1987 1988 shareholders1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0.06$ 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.08 0.0625 0.0625 0.0625 0.0625 0.0625 0.0625 0.04 0.0525 0.0525 0.0525

0.06 0.07 0.07 0.07 0.07 0.07 0.07 0.07

0.02 0.0625 0.0625 0.0625 0.0625 0.0625 0.0625 0.04 0.0525 0.0525 0.0525 0

0.02 Q1-2005 Q2-2005 Q3-2005 Q4-2005 Q1-2006 Q2-2006 Q3-2006 Q4-2006 Q1-2007 Q2-2007 Q3-2007 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008 0 Q1-2005 Q2-2005 Q3-2005 Q4-2005 Q1-2006 Q2-2006 Q3-2006 Q4-2006 Q1-2007 Q2-2007 Q3-2007 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008

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Date COgeco INC. 32

OTHER INFORMATION ANNUAL MEETING INQUIRIES The Annual Shareholders The Annual Report, Annual Meeting will be held at 4 p.m. Information Form and Quarterly on Wednesday, December 17, 2008, Reports are available in the at the Stock Exchange Tower, Investor Relations section of 800 Square Victoria, 4th floor, the www.cogeco.ca website Montréal (Québec) or upon request by calling 514 764-4700. AUDITORS Samson Bélair/Deloitte & Touche Des versions françaises du rapport 1, Place Ville Marie annuel, de la notice annuelle et des Suite 3000 rapports trimestriels sont disponibles Montréal (Québec) à la section Relations avec les H3B 4T9 investisseurs du site Internet www.cogeco.ca ou sur demande LEGAL COUNSEL au 514 764-4700. Fraser Milner Casgrain LLP 1, Place Ville Marie INVESTORS Suite 3900 AND ANALYSTS Montréal (Québec) For financial information about H3B 4M7 COGECO, please contact the Department of Finance. QUARTER ENDS November, February, May CONTACT US 5, Place Ville Marie YEAR-END Suite 1700 August 31 Montréal (Québec) H3B 0B3 Tel.: 514 764-4700 Fax: 514 874-2625 www.cogeco.ca

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Date Printed in Canada c a i n. www.nol Design:

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Date