COGECO announces solid financial results for the third quarter of fiscal 2013

PRESS RELEASE

For immediate release

• 39.2% growth of its operating income before depreciation and amortization

(1)

;

• Over half of Cogeco Cable's total indebtedness is refinanced to extend maturity and take advantage

of historically low interest rates;

• Quarterly dividend increased by 5.6%.

Montréal, July 10, 2013 – Today, COGECO Inc. (TSX: CGO) (“COGECO” or the “Corporation”) announced its financial results

for the third quarter of fiscal 2013, ended May 31, 2013, in accordance with International Financial Reporting Standards (“IFRS”).

For the third quarter and first nine months of fiscal 2013, which include six months operating results of Atlantic Broadband ("ABB")

and four months operating results for Peer 1 Network Enterprises, Inc. (“PEER 1”):

• Third quarter revenue increased by 40.9% to reach $504.4 million and by 26.7% for the first nine months to reach $1.3

billion when compared to the same periods of the prior year;

• Operating income before depreciation and amortization increased by 39.2% to $220.6 million when compared to the

third quarter of fiscal 2012, and by 29.3% to $573.1 million when compared to the first nine months of the prior year.

Operating income before depreciation and amortization increases for both periods are mainly attributable to the

acquisitions of ABB and PEER 1 ("recent acquisitions") as well as the improvement in the financial results of the

Canadian operations in the Cable segment;

• Profit for the period from continuing operations amounted to $55.1 million in the third quarter compared to $55.4 million

for the same period of the previous fiscal year. Profit for the period from continuing operations decreased slightly during

the quarter mostly due to acquisition costs, additional depreciation and amortization and financial expense, including

costs of approximately $3.5 million to refinance certain long-term debt with respect to the recent acquisitions, partly

offset by operating income before depreciation and amortization generated by the Canadian operations and by the

recent acquisitions in the Cable segment. For the first nine months of fiscal 2013, profit for the period from continuing

operations amounted to $158.7 million compared to $129.3 million for the same period of fiscal 2012. Profit progression

for the nine-month period is mostly attributable to the factors described above and by additional income tax expense;

• Profit for the period amounted to $55.1 million in the third quarter when compared to $55.4 million for the same period

of the previous fiscal year due to the factors described in the paragraph above. For the first nine months of fiscal 2013,

profit for the period amounted to $158.7 million when compared to $184.8 million for the same period of fiscal 2012

mostly attributable to the improvement of the Canadian operations in the Cable segment and by the recent acquisitions'

financial results, offset by last year’s profit from the Portuguese subsidiary, Cabovisão – Televisão por Cabo, S.A.

(“Cabovisão”), reported as discontinued operations and disposed of on February 29, 2012 in the Cable segment;

• Free cash flow

(1)

reached $45.0 million for the third quarter compared to $29.5 million in the comparable quarter of the

prior year. For the first nine months, free cash flow amounted to $98.0 million, compared to $73.8 million in the same

period of fiscal 2012. The increase for both periods is mostly attributable to the Cable segment by the improvement

of operating income before depreciation and amortization, partly offset by the increase in financial expense, the recent

acquisition costs as well as the increase in acquisition of property, plant and equipment;

(1) The indicated terms do not have standard definitions prescribed by IFRS and therefore, may not be comparable to similar measures presented by other

companies. For more details, please consult the "Non-IFRS financial measures" section of the Management's discussion and analysis.

• A quarterly dividend of $0.19 per share was paid to the holders of subordinate and multiple voting shares, an increase

of $0.01 per share, or 5.6%, when compared to a dividend of $0.18 per share paid in the third quarter of fiscal 2012.

Dividend payments in the first nine months totaled $0.57 per share in fiscal 2013, compared to $0.54 per share in fiscal

2012;

• In the Cable segment, fiscal 2013 third-quarter primary service units (“PSU”)

(1)

decreased by 3,331 and increased by

15,851 for the first nine months of fiscal 2013. At May 31, 2013, consolidated PSU amounted to 2,470,164 of which

1,981,290 come from the Canadian operations and 488,874 from the American operations;

• On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the

Term Loan A Facility was converted into the Revolving Facility resulting in amounts borrowed under these two tranches

of US$190 million and of US$100 million, respectively, while the Term Loan B Facility remained the same. Interest

rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin, with a LIBOR floor for the Term

Loan B Facility. The applicable margin was reduced by 0.625% for the Revolving Facility and for the Term Loan A

Facility and by 1.00% for the Term Loan B Facility. In addition, the LIBOR floor for the Term Loan B Facility was reduced

from 1.00% to 0.75%. All other terms and conditions remained the same. In connection with the amendment, transaction

costs of $US 6.2 million were incurred;

• On May 27, 2013, Cogeco Cable completed pursuant to a public debt offering, the issue of $300 million Senior Secured

Debentures Series “4” (the “Debentures”) for a net proceed of $297.1 million net of transaction costs of $2.9 million.

The net proceeds from this offering were used to reduce indebtedness. These Debentures mature on May 26, 2023

and bear interest at 4.175% per annum payable semi-annually. These Debentures are indirectly secured by a first

priority fixed and floating charge and a security interest on substantially all present and future real and personal property

and undertaking of every nature and kind of Cogeco Cable and its subsidiaries except for ABB and certain immaterial

subsidiaries (the "unrestricted subsidiaries"). The provisions under these Debentures provide for restrictions on the

operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the

most significant restrictions relate to permitted indebtedness, dispositions and maintenance of certain financial ratios.

• On April 23, 2013, Cogeco Cable completed a private placement of $410.4 million (US$400 million) aggregate principal

amount of Senior Unsecured Notes (the “2020 Notes”) for a net proceed of $402.6 million (US$392.4 million), net of

transaction costs of $7.8 million (US$7.6 million). The net proceeds from this offering were used to reduce indebtedness.

These 2020 Notes mature on May 1, 2020 and bear interest at 4.875% per annum payable semi-annually. These 2020

Notes are guaranteed on a senior unsecured basis, jointly and severally, by its subsidiaries except for the unrestricted

subsidiaries. The provisions under these 2020 Notes provide for restrictions on the operations and activities of Cogeco

Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to

permitted indebtedness, investments and distributions.

“We are satisfied with the favourable results obtained for the third quarter of fiscal 2013,” declared Louis Audet, President and

Chief Executive Officer of Cogeco Inc. “The cable subsidiary continues along a path of steady growth and profitability, as per

expectations. In the last three months, we successfully refinanced over half of Cogeco Cable's indebtedness in order to take

advantage of historically low interest rates. Average maturity was extended from 4.6 years to 6.1 years and fixed rate debt

increased from 35% to 66%. Cogeco Cable is well positioned going forward,” continued Louis Audet.

“Regarding our media business, Cogeco Diffusion Inc.'s radio business ratings continue to lead in many of its markets and we

are pleased to see continued appetite for radio and transit advertising from our customers. Our media business is delivering

results according to plan,” concluded Louis Audet.

ABOUT COGECO

COGECO is a diversified communications corporation. Through its Cogeco Cable subsidiary, COGECO provides to its residential and business

customers Analogue and Digital Television, High Speed Internet («HSI») and Telephony services. Cogeco Cable operates in Canada under the

Cogeco Cable brand name in Quebec and Ontario, and in the United States through its subsidiary Atlantic Broadband in Western Pennsylvania,

Southern Florida, Maryland, Delaware and South Carolina. Through its subsidiaries Cogeco Data Services and PEER 1 Hosting, Cogeco Cable

provides to its commercial customers, a suite of IT hosting, information and communications technology services (Data Centre, Co-location,

Managed Hosting, Cloud Infrastructure and Connectivity), with 23 data centres, extensive fibre networks in Montreal and Toronto as well as

points-of-presence in North America and Europe. Through its subsidiary Cogeco Diffusion, COGECO owns and operates 13 radio stations across

most of Québec with complementary radio formats serving a wide range of audiences as well as Cogeco News, its news agency. Cogeco Diffusion

also operates Métromédia, an advertising representation house specialized in the public transit sector that holds exclusive advertising rights in

the Province of Québec where it also represents its business partners active across other Canadian markets. COGECO's subordinate voting

shares are listed on the Toronto Stock Exchange (TSX: CGO). The subordinate voting shares of Cogeco Cable are also listed on the Toronto

Stock Exchange (TSX: CCA).

(1) Represents the sum of Television, High Speed Internet ("HSI") and Telephony service customers.

- 30 -

Source: COGECO Inc.

Pierre Gagné

Senior Vice President and Chief Financial Officer

Tel.: 514-764-4700

Information: Media

René Guimond

Vice-President, Public Affairs and Communications

Tel.: 514-764-4700

Analyst Conference Call: Thursday, July 11, 2013 at 11:00 a.m. (Eastern Daylight Time) Media representatives may attend as

listeners only.

Please use the following dial-in number to have access to the conference call by dialing five minutes

before the start of the conference:

Canada/USA Access Number: 1 866-321-6651

International Access Number: + 1 416-642-5212

Confirmation Code: 7336653

By Internet at www.cogeco.ca/investors

A rebroadcast of the conference call will be available until October 11, 2013, by dialing:

Canada and US access number: 1 888-203-1112

International access number: + 1 647-436-0148

Confirmation code: 7336653

SHAREHOLDERS’ REPORT

Three and nine-months periods ended May 31, 2013

COGECO INC. Q3 2013 2

FINANCIAL HIGHLIGHTS

Quarters ended Nine months ended

(in thousands of dollars, except PSU growth, percentages and

per share data)

May 31,

2013

May 31,

2012 Change

May 31,

2013

May 31,

2012 Change

$ $ % $ $ %

Operations

Revenue 504,434 358,032 40.9 1,329,543 1,049,668 26.7

Operating income before depreciation and amortization

(1)

220,574 158,446 39.2 573,122

443,225

29.3

Operating income 113,609 95,473 19.0 299,350

229,046

30.7

Profit for the period from continuing operations 55,116 55,373 (0.5) 158,728

129,346

22.7

Profit for the period from discontinued operations — — — — 55,446 –

Profit for the period 55,116 55,373 (0.5) 158,728

184,792

(14.1)

Profit for the period attributable to owners of the Corporation 18,902 19,303 (2.1) 54,288 63,162 (14.0)

Cash Flow

Cash flow from operating activities 167,641 109,546 53.0 318,731

245,571

29.8

Cash flow from operations

(1)

158,461 117,606 34.7 400,664

327,498

22.3

Acquisitions of property, plant and equipment, intangible and

other assets 113,492 88,141 28.8 302,666

253,731

19.3

Free cash flow

(1)

44,969 29,465 52.6 97,998 73,767 32.8

Financial Condition

(2)

Property, plant and equipment — — — 1,772,871 1,343,904 31.9

Total assets — — — 5,435,992 3,103,919 75.1

Indebtedness

(3)

— — — 3,139,507 1,180,971 –

Equity attributable to owners of the Corporation — — — 450,267

397,799

13.2

Primary service units (“PSU”) growth

(4)

(3,331) 6,246 — 15,851 64,705 (75.5)

Per Share Data

(5)

Earnings per share attributable to owners of the Corporation

From continuing and discontinued operations

Basic 1.13 1.15 (1.7) 3.25 3.78 (14.0)

Diluted 1.12 1.15 (2.6) 3.22 3.75 (14.1)

From continuing operations

Basic 1.13 1.15 (1.7) 3.25 2.71 19.9

Diluted 1.12 1.15 (2.6) 3.22 2.69 19.7

From discontinued operations

Basic — — — — 1.07 –

Diluted — — — — 1.06 –

(1) The indicated terms do not have standardized definitions prescribed by International Financial Reporting Standards (“IFRS”) and therefore, may not be

comparable to similar measures presented by other companies. For more details, please consult the “Non-IFRS financial measures” section of the

Management’s discussion and analysis (“MD&A”).

(2) At May 31, 2013 and August 31, 2012.

(3) Indebtedness is defined as the total of bank indebtedness, principal on long-term debt, balance due on business combinations and obligations under derivative

financial instruments.

(4) Represents the sum of Television, High Speed Internet (“HSI”) and Telephony service customers.

(5) Per multiple and subordinate voting share.

MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)

Three and nine-months periods ended May 31, 2013

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 4

FORWARD-LOOKING STATEMENTS

Certain statements in this Management’s Discussion and Analysis (“MD&A”) may constitute forward-looking information within the meaning of

securities laws. Forward-looking information may relate to COGECO’s future outlook and anticipated events, business, operations, financial

performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan";

"anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee", "ensure" or other similar expressions concerning matters

that are not historical facts. In particular, statements regarding the Corporation’s future operating results and economic performance and its

objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected

growth, results of operations, performance and business prospects and opportunities, which COGECO believes are reasonable as of the current

date. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may

prove to be incorrect. The Corporation cautions the reader that the economic downturn experienced over the past few years makes forward-

looking information and the underlying assumptions subject to greater uncertainty and that, consequently, they may not materialize, or the results

may significantly differ from the Corporation’s expectations. It is impossible for COGECO to predict with certainty the impact that the current

economic uncertainties may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties

(described in the “Uncertainties and main risk factors” section of the Corporation’s 2012 annual MD&A, the Corporation's MD&A for the period

ended February 28, 2013 as well as in the present MD&A) that could cause actual results to differ materially from what COGECO currently

expects. These factors include risks pertaining to markets and competition, technology, regulatory developments, operating costs, information

systems, disasters or other contingencies, financial risks related to capital requirements, human resources, controlling shareholder and holding

structure, many of which are beyond the Corporation’s control. Therefore, future events and results may vary significantly from what management

currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as

of any other date. While management may elect to, the Corporation is under no obligation and does not undertake to update or alter this information

at any particular time, except as may be required by law.

All amounts are stated in Canadian dollars unless otherwise indicated. This report should be read in conjunction with the Corporation’s condensed

interim consolidated financial statements and the notes thereto, prepared in accordance with the International Financial Reporting Standards

(“IFRS”) and the MD&A included in the Corporation’s 2012 Annual Report.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 5

CORPORATE OBJECTIVES AND STRATEGIES

COGECO's objectives are to provide outstanding service to its customers and maximize shareholder value by increasing profitability and ensuring

continued revenue growth. The strategies employed to reach these objectives, supported by tight controls over costs and business processes,

are specific to each segment. The main strategies used to reach COGECO's objectives in the Cable segment focus on expanding its service

offering, enhancing its existing services and bundles, improving customer experience and business processes as well as keeping a sound capital

management and a strict control over spending. The radio activities focus on continuous improvement of its programming in order to increase its

market share and thereby its profitability. The Corporation measures its performance, with regard to these objectives by monitoring operating

income before depreciation and amortization

(1)

, PSU

(2)

growth and free cash flow

(1)

KEY PERFORMANCE INDICATORS

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION

For the nine-month period ended May 31, 2013, operating income before depreciation and amortization increased by 29.3% when compared to

the same period of fiscal 2012 to reach $573.1 million. As a result of the improvement of operating income before depreciation and amortization

in the Cable segment resulting essentially from cost reduction initiatives, management revised its April 10, 2013 projections for fiscal 2013.

Operating income before depreciation and amortization is now expected to reach $795 million from $782 million. For further details, please consult

the fiscal 2013 revised projections in the “Fiscal 2013 financial guidelines” section.

FREE CASH FLOW

For the nine-month period ended May 31, 2013, COGECO reports free cash flow of $98 million, compared to $73.8 million for the first nine months

of the previous fiscal year, representing an increase of $24.2 million. This variance is mostly attributable to the improvement of operating income

before depreciation and amortization in the Cable segment, partly offset by the increase in financial expense, the acquisition costs related to

Atlantic Broadband (“ABB”) and Peer 1 Network Enterprises, Inc. ("PEER 1") acquisitions (the "recent acquisitions") as well as the increase in

acquisition of property, plant and equipment.

CABLE SEGMENT

PSU growth and penetration of service offerings

During the nine-month period ended May 31, 2013, PSU reached 2,470,164 of which 1,981,290 come from the Canadian operations and 488,874

from the American operations. PSU for the American operations increased by 3,694 stemming primarily from additional HSI services, partly offset

by losses in Television services. PSU for the Canadian operations increased by 12,157 when compared to an increase of 64,705 PSU for the

comparable period of the prior year, mainly as a result of service category maturity and a more competitive environment in the Television services.

Cogeco Cable maintains targeted marketing initiatives to increase the penetration level of its services.

BUSINESS DEVELOPMENTS AND OTHER

BBM Canada's spring 2013 survey in the Montréal region, conducted with the Portable People Meter (“PPM”), reported that 98.5 FM is the leading

radio station in the Montreal French market amongst all listeners and men two years old and over (“2+”), while Rythme FM has maintained its

leadership position in the female 2+ segment among the musical stations. Regarding the Montreal English market, The Beat is the leading radio

station in the female 35-64 segment. In the other Quebec regions, our radio stations registered good ratings.

On July 5, 2013, Cogeco Cable reduced its Term Revolving Facility from $750 million to $600 million and its Revolving Facility of its Secured

Credit Facilities from $240 million to $190 million.

On June 27, 2013, Cogeco Cable completed, pursuant to a private placement, the issuance of US$215 million Senior Secured Notes bearing

interest at 4.30% payable semi-annually and maturing on June 16, 2025. The net proceeds from this offering along with drawings under the

Corporation's credit facilities will be used to repay, on July 29, 2013, all the outstanding amount of $300 million Senior Secured Debentures Series

1, due on June 9, 2014.

On January 31, 2013, Cogeco Cable completed the acquisition of 96.57% of the issued and outstanding shares of PEER 1 by way of takeover

bid (the “offer”) valued at approximately $649 million. On April 3, 2013, Cogeco Cable completed the acquisition of the remaining 3.43% of the

issued and outstanding shares of PEER 1 for a cash consideration of $17 million pursuant to the compulsory acquisition provisions in Section

300 of the Business Corporations Act ("British Columbia"). In connection with the completion of the offer, Cogeco Cable has entered into secured

credit facilities in the amount of approximately $650 million and maturing in 2017, with a syndicate of lenders. PEER 1 is one of the world’s leading

internet infrastructure providers, specializing in managed hosting, dedicated servers, cloud services and co-location. This acquisition enhances

Cogeco Cable footprint and builds on its strategic initiatives by increasing scale in an attractive industry segment with significant growth prospects

in the state of the art data center platforms. Cogeco Cable will also serve additional businesses worldwide, in addition to approximately 11,000

customers currently served, through 23 data centres and 21 points-of-presence across North America and Europe. PEER 1's primary network

centre and head office remain located in Vancouver.

(1) The indicated terms do not have standardized definitions prescribed by IFRS and therefore, may not be comparable to similar measures presented by other

companies. For more details, please consult the "Non-IFRS financial measures" section.

(2) Represents the sum of Television, High Speed Internet ("HSI") and Telephony service customers.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 6

On November 30, 2012, Cogeco Cable completed the acquisition of ABB, an independent cable system operator formed in 2003, serving about

485,000 PSU’s and providing Analogue and Digital Television, as well as HSI and Telephony services. The acquisition is an attractive entry point

into the United States of America ("US") market, providing a significant increase in PSU base with further growth potential, a high quality network

infrastructure and the ability for the Corporation’s management to leverage its core knowledge and operational experience. The transaction,

valued at US$1.36 billion, was financed through a combination of cash on hand, a draw-down on the existing Term Revolving Facility of

approximately US$588 million and US$660 million of borrowings under a new committed non-recourse debt financing at ABB. Ranked the 12th-

largest cable television system operator in the US, ABB operates cable systems in Western Pennsylvania, Southern Florida, Maryland, Delaware

and South Carolina.

OPERATING AND FINANCIAL RESULTS

OPERATING RESULTS

Quarters ended Nine months ended

May 31,

2013

May 31,

2012 Change

May 31,

2013

May 31,

2012 Change

(in thousands of dollars, except percentages) $ $ % $ $ %

Revenue

504,434

358,032 40.9 1,329,543 1,049,668 26.7

Operating expenses

283,860

199,586 42.2 756,421

606,443

24.7

Operating income before depreciation and amortization

220,574

158,446 39.2 573,122

443,225

29.3

REVENUE

Fiscal 2013 third-quarter revenue increased by $146.4 million or 40.9%, to reach $504.4 million, when compared to the same period last year.

For the first nine months, revenue amounted to $1.3 billion, an increase of $279.9 million, or 26.7% when compared to the first nine months of

fiscal 2012. Revenue increases for both periods are mainly attributable to the operating results of the Cable segment and the revenue generated

by Métromédia CMR Plus Inc. ("Métromédia"), acquired during the second quarter of fiscal 2012.

In the Cable segment, fiscal 2013 third-quarter revenue increased by $144.7 million, or 45.3%, to reach $464.5 million, when compared to the

same period last year. For the first nine months, revenue amounted to $1.2 billion, an increase of $269.2 million, or 28.2% when compared to

the same period of fiscal 2012. For further details on the Cable segment's revenue, please refer to the “Cable segment” section.

OPERATING EXPENSES

For the third quarter of fiscal 2013, operating expenses increased by $84.3 million, or 42.2%, to reach $283.9 million. For the first nine months

of the fiscal year, operating expenses amounted to $756.4 million, an increase of $150.0 million, or 24.7%, when compared to the same period

of fiscal 2012. The increase in operating expenses is mainly attributable to the Cable segment operating results.

Fiscal 2013 third quarter operating expenses in the Cable segment increased by $82.3 million, or 49.2%, to reach $249.4 million. For the first

nine months of the fiscal year, operating expenses amounted to $654.5 million, an increase of $139 million, or 27.0%, when compared to the

same period of fiscal 2012. For further details on the Cable segment's revenue, please refer to the “Cable segment” section.

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION

Mainly as a result of higher growth from revenue than operating expenses stemming primarily from the Cable segment, operating income before

depreciation and amortization increased by $62.1 million, or 39.2%, to reach $220.6 million in the third quarter and by $129.9 million, or 29.3%

to reach $573.1 million for the first nine months of fiscal 2013, when compared to the same periods of the previous year. For further details on

Cogeco Cable's operating results, please refer to the “Cable segment” section.

FIXED CHARGES

Quarters ended Nine months ended

May 31,

2013

May 31,

2012 Change

May 31,

2013

May 31,

2012 Change

(in thousands of dollars, except percentages) $ $ % $ $ %

Depreciation and amortization 104,805 62,973 66.4 256,860 214,071 20.0

Financial expense 36,487 17,822 — 84,032 51,710 62.5

For the three and nine-month periods ended May 31, 2013, depreciation and amortization expense reached $104.8 million and $256.9 million,

respectively, compared to $63.0 million and $214.1 million for the same periods of the prior year, respectively, resulting mainly from Cogeco

Cable's recent acquisitions and from additional acquisition of property, plant and equipment offset by higher fiscal 2012 depreciation expense

related to the reduction of useful lives for certain home terminal devices in the Cable segment.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 7

Fiscal 2013 third-quarter financial expense increased by $18.7 million to reach $36.5 million compared to $17.8 million in fiscal 2012 third-quarter.

For the first nine months of fiscal 2013, financial expense increased by $32.3 million, or 62.5%, at $84.0 million, compared to $51.7 million in the

prior year. Financial expense increased in both periods as a result of the cost of financing related to the recent acquisitions, including costs of

approximately $3.5 million to refinance certain long-term debt with respect to these recent acquisitions.

INCOME TAXES

For the three and nine-month periods ended May 31, 2013, income tax expense amounted to $22.0 million and $56.6 million, respectively,

compared to $22.3 million and $48.0 million, respectively, for the comparable periods in the prior year. The increase in the first nine months is

mostly attributable to the improvement in operating income before depreciation and amortization, partly offset by the increase in depreciation and

amortization and financial expense.

PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS

For the three-month period ended May 31, 2013, profit for the period from continuing operations amounted to $55.1 million of which $18.9 million,

or $1.13 per share is attributable to owners of the Corporation, compared to a profit for the period from continuing operations of $55.4 million of

which $19.3 million or $1.15 per share is attributable to owners of the Corporation for the comparable period. Profit for the period from continuing

operations decreased slightly during the quarter mostly due to acquisition costs, additional depreciation and amortization and financial expense,

including costs of approximately $3.5 million to refinance certain long-term debt with respect to the recent acquisitions, partly offset by operating

income before depreciation and amortization generated by the Canadian operations and by the recent acquisitions in the Cable segment. For

the nine-month period ended May 31, 2013, profit for the period from continuing operations amounted to $158.7 million of which $54.3 million,

or $3.25 per share is attributable to owners of the Corporation, compared to a profit for the period from continuing operations of $129.3 million

of which $45.3 million, or $2.71 per share is attributable to owners of the corporation for the comparable period. Profit progression for the period

from continuing operations for the first nine months of fiscal 2013 is mostly due to the Cable segment and is attributable to the increase in operating

income before depreciation and amortization, partly offset by the recent acquisitions costs and by the depreciation and amortization, financial

expense and income tax increases explained above.

PROFIT FOR THE PERIOD

For the three and nine-month periods ended May 31, 2013, profit for the period amounted to $55.1 million and $158.7 million, respectively,

compared to $55.4 million and $184.8 million for the comparable periods. Fiscal 2013 third-quarter profit for the period attributable to owners of

the Corporation amounted to $18.9 million, or $1.13 per share, compared to $19.3 million, or $1.15 per share, in the third quarter of fiscal 2012.

For the nine-month period ended May 31, 2013, profit for the period attributable to owners of the Corporation amounted to $54.3 million, or $3.25

per share, compared to $63.2 million, or $3.78 per share for the comparable period of fiscal 2012. The decline for the quarter is due to the factors

described above and for the nine-month period to last year's profit from the Portuguese subsidiary, Cabovisão - Televisão por Cabo, S.A.

(“Cabovisão”), reported as discontinued operations and disposed of on February 29, 2012 and by the increases in depreciation and amortization,

financial expense and acquisition costs all related to the recent acquisitions in the Cable segment, partly offset by the improvement in operating

income before depreciation and amortization generated by the Cable segment.

The non-controlling interest represents a participation of approximately 67.9% in Cogeco Cable's results. For the three and nine-month periods

ended May 31, 2013, profit for the period attributable to non-controlling interest amounted to $36.2 million and $104.4 million, respectively, when

compared to $36.1 million and $121.6 million for the comparable periods of fiscal 2012.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 8

CASH FLOW ANALYSIS

Quarters ended Nine months ended

May 31,

2013

May 31,

2012

May 31,

2013

May 31,

2012

(in thousands of dollars)

$ $ $ $

Operating activities

Cash flow from operations 158,461 117,606

400,664 327,498

Changes in non-cash operating activities (5,443) (20,507) (80,194) (85,288)

Amortization of deferred transaction costs and discounts on long-term debt (3,520) (1,681)

(7,237

)

(3,357

)

Income taxes paid (17,031) (10,634) (79,490) (67,711)

Current income tax expense 27,563 25,016 76,227 72,306

Financial expense paid (28,876) (18,076) (75,271) (49,587)

Financial expense 36,487 17,822 84,032 51,710

167,641 109,546

318,731 245,571

Investing activities (135,812) (87,543) (2,308,490) (284,212)

Financing activities (35,540) (8,464) 1,812,085 86,925

Effect of exchange rate changes on cash and cash equivalents denominated in foreign

currencies 1,089 —

1,794

—

Net change in cash and cash equivalents from continuing operations (2,622) 13,539 (175,880) 48,284

Net change in cash and cash equivalents from discontinued operations

(1)

— — — 49,597

Cash and cash equivalents from continuing and discontinued operations, beginning of

year 42,265 139,558

215,523

55,216

Cash and cash equivalents from continuing and discontinued operations, end of year 39,643 153,097 39,643

153,097

(1) For further details on the Corporation’s cash flows attributable to discontinued operations, please refer to the “Disposal of subsidiary and discontinued operations”

on note 14 of the condensed interim consolidated financial statements.

OPERATING ACTIVITIES

Fiscal 2013 third-quarter cash flow from operations reached $158.5 million compared to $117.6 million, an increase of $40.9 million or 34.7%,

compared to the same period of prior year. For the first nine months, cash flow from operations reached $400.7 million compared to $327.5 million

for the same period last year, an increase of $73.2 million, or 22.3%. Increases for both periods are primarily due to the improvement of operating

income before depreciation and amortization, partly offset by financial expense increase and by the recent acquisition costs. For the third quarter,

changes in non-cash operating activities generated cash outflows of $5.4 million compared to $20.5 million in the third quarter of fiscal 2012,

mainly as a result of a lower decrease in trade and other payables compared to the prior year. For the first nine months, changes in non-cash

operating activities generated cash outflows of $80.2 million compared to $85.3 million for the same period in fiscal 2012, mainly as a result of a

decrease in provisions compared to an increase in prior year, partly offset by an increase in deferred and prepaid revenue and other liabilities

compared to a decrease in the prior year.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 9

INVESTING ACTIVITIES

BUSINESS COMBINATIONS IN FISCAL 2013

On March 6, 2013, the Corporation's subsidiary, Cogeco Cable, completed the working capital adjustments in relation to the ABB acquisition,

which increased income tax receivable by $3.4 million and goodwill by $0.6 million, and decreased trade and other payables assumed by $1.5

million and income tax liabilities assumed by $0.1 million. In addition, on April 3, 2013, Cogeco Cable completed the acquisition of the remaining

3.43% of the issued and outstanding shares of PEER 1 for a cash consideration of $17 million. The acquisition of non-controlling interest has not

changed the purchase price allocation. On January 31, 2013, Cogeco Cable, completed the acquisition of PEER 1 and on November 30, 2012,

the acquisition of ABB. These acquisitions were accounted for using the purchase method. In addition, in the second quarter of fiscal 2013,

Métromédia also completed the acquisition of a non-controlling interest participation of 27.5% in one of its subsidiaries for a cash consideration

of approximately $0.5 million.

The preliminary purchase price allocation of these acquisitions, pending the completion of the valuation of the net assets acquired as well as

Métromédia's non-controlling interest acquisition are as follows:

Métromédia PEER 1 ABB TOTAL

$ $ $ $

Consideration

Paid

Purchase of shares 462

494,796 337,779 833,037

Working capital adjustments — —

5,415 5,415

Repayment of secured debts and settlement of options outstanding —

170,872

1,021,854 1,192,726

462

665,668

1,365,048 2,031,178

Net assets acquired

Cash and cash equivalents — 10,840

5,480 16,320

Restricted cash —

8,729 — 8,729

Trade and other receivables — 12,772

9,569 22,341

Prepaid expenses and other —

3,855 1,370 5,225

Income tax receivable — 672

3,418 4,090

Other assets —

3,328 — 3,328

Property, plant and equipment —

150,206 205,353 355,559

Intangible assets —

139,703 763,084 902,787

Goodwill —

421,986 603,254

1,025,240

Deferred tax assets —

8,355 33,835 42,190

Trade and other payables assumed — (26,330)

(26,134

)

(52,464

)

Provisions — —

(721

)

(721

)

Income tax liabilities assumed —

(4,716

) (53)

(4,769

)

Deferred and prepaid revenue and other liabilities assumed —

(3,315

)

(5,254

)

(8,569

)

Long-term debt assumed —

(1,735

)

— (1,735

)

Deferred tax liabilities — (58,682) (228,153) (286,835)

Non-controlling interest 462 —

— 462

462

665,668

1,365,048 2,031,178

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 10

FISCAL 2013 ADJUSTEMENT RELATED TO FISCAL 2012 BUSINESS COMBINATION

During the second quarter of fiscal 2013, the Corporation completed the purchase price allocation of Métromédia which was acquired on December

26, 2011. The final purchase price allocation of Métromédia is as follows:

Preliminary Final

$ $

Consideration

Paid

Purchase of shares

36,860 36,860

Repayment of secured debt

2,140 2,140

39,000 39,000

Balance due on a business combination, bank prime rate plus 1% and payable in June 2013

2,000 2,000

41,000 41,000

Net assets acquired

Cash and cash equivalents

3,265 3,265

Trade and other receivables

7,242 7,364

Prepaid expenses and other

57 57

Income tax receivable

234 132

Property, plant and equipment

4,764 4,645

Intangible assets

14,747 14,747

Goodwill

20,171 20,540

Trade and other payables assumed

(4,615

)

(4,786

)

Income tax liabilities

(142

)

—

Deferred and prepaid revenue and other liabilities assumed

(374

)

(615

)

Deferred tax liabilities

(3,887

)

(3,887

)

Non-controlling interest

(462

)

(462

)

41,000 41,000

ACQUISITIONS OF PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE AND OTHER ASSETS

For the three and nine-month periods ended May 31, 2013, acquisition of property, plant an equipment amounted to $109.0 million and $289.0

million, respectively, compared to $84.2 million and $243.2 million for the comparable periods of fiscal 2012 mainly as a results of the recent

acquisitions and the following factors in the Cable segment:

• A decrease in scalable infrastructure due to the timing of initiatives to improve network capacity in existing areas served;

• A decrease in customer premise equipment, mainly due to the achievement in fiscal 2012 of the first phase in the conversion of Television

service customers from analogue to digital and the lower PSU growth as a result of service maturity;

• An increase in network upgrade and rebuild to deploy advanced technologies such as DOCSIS 3.0 and Switched Digital Video in

existing areas served; and

• An increase in data centre facilities capital expenditures mainly due to the construction of a new data centre facility in Barrie, Ontario,

opened last June, and by the expansion of data centre facilities in Toronto, Canada and in Portsmouth, England as well as the fiber

expansion in the Toronto area in order to fulfill orders from new customers demand.

Acquisition of intangible and other assets are mainly attributable to reconnect and additional service activation costs as well as other customer

acquisition costs. For the third quarter and the first nine months of fiscal 2013, the acquisition of intangible and other assets amounted to $4.5

million and $13.7 million, compared to $4.0 million and $10.6 million for the same periods last year, respectively.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 11

FREE CASH FLOW AND FINANCING ACTIVITIES

In the third quarter of fiscal 2013, free cash flow amounted to $45.0 million, $15.5 million, or 52.6%, higher than in the comparable period of fiscal

2012. For the first nine months period, free cash flow amounted to $98.0 million, $24.2 million, or 32.8%, higher than the same period of last year.

Free cash flow increase for both periods over the prior year are due to the improvement of operating income before depreciation and amortization

in the Canadian operation in the Cable segment as well as the recent acquisitions, partly offset by the increase in financial expense, the recent

acquisition costs as well as the increase in acquisition of property, plant and equipment.

In the third quarter of fiscal 2013, higher Indebtedness level provided for a cash increase of $22.0 million mainly due to the issuance, in the Cable

segment, of $300 million Senior Secured Debentures Series “4” (the “Debentures”) for a net proceed of $297.1 million, net of transaction costs

of $2.9 million and the issuance of a private placement of $410.4 million (US$400 million) Senior Unsecured Notes (the “2020 Notes”) for a net

proceed of $402.6 million (US$392.4 million), net of transaction costs of $7.8 million (US$7.6 million). In addition, the net proceeds under the

Debentures and the 2020 Notes were used to repay the Canadian Term Facility amounting to $175 million, the US Term Facility amounting to

$230.8 million (US$225 million), the $114.7 Revolving loan in connection with the financing of the acquisition of PEER 1 in the Cable segment

and $192.4 million Term Revolving Facility. In the third quarter of fiscal 2012, Indebtedness remained essentially the same.

For the first nine months of fiscal 2013, higher Indebtedness level provided for a cash increase of $1.9 billion, mainly due to the issuance of the

2020 Notes and the Debentures, described above, as well as draw-down on the existing Term Revolving Facility of $411.9 million (US$420 million)

including the repayment made during the quarter explained above and the new First Lien Credit of $637.4 million (US$660 million for a net proceed

of US$641.5 million, net of transaction costs of US$18.5 million) to finance the acquisition of ABB as well to drawings of $125.1 million, under

Secured Credit Facilities to finance the acquisition of PEER 1, net of the repayment made during the third quarter explained above. In the first

nine months of fiscal 2012, Indebtedness affecting cash increased by $129.9 million mainly due to the issuance, on February 14, 2012, of $200

million Senior Secured Debentures Series 3 (“Fiscal 2012 debentures”) and on November 7, 2011, of Unsecured Notes for net proceeds of $198.1

million and $34.6 million, respectively, which was used to repay the $107.7 million Term Revolving Facilities.

During the third quarter of fiscal 2013, quarterly dividends of $0.19 per share were paid to the holders of subordinate and multiple voting shares,

totaling $3.2 million, compared to quarterly dividends of $0.18 per share for a total of $3.0 million the year before. Dividend payments in the first

nine months totaled $0.57 per share, or $9.5 million, compared to $0.54 per share, or $9.0 million the year before. In addition, dividends paid by

a subsidiary to non-controlling interests in the third quarter amounted to $8.6 million and $25.7 million for the first nine months, compared to $8.2

million and $24.7 million, respectively, for the comparable periods of the prior year.

As at May 31, 2013, the Corporation had a working capital deficiency of $146.7 million compared to $18.5 million at August 31, 2012. The increase

of $128.2 million in the deficiency is mainly due to the decrease of $175.9 million million in cash and cash equivalents, primarily used for the

acquisition of ABB in the Cable segment. The deficiency was also impacted by an increase of $29.3 million in trade and other receivables, a

decrease of $23.7 million in trade and other payables and by an increase of $14.7 million in deferred and prepaid revenue. As part of the usual

conduct of its business, Cogeco Cable maintains a working capital deficiency due to a low level of accounts receivable as a large portion of the

Corporation’s customers pay before their services are rendered, unlike trade and other payables, which are paid after products are delivered or

services are rendered, thus enabling the Corporation to use cash and cash equivalents to reduce Indebtedness.

At May 31, 2013, the Corporation had used $76.1 million of its $100 million Term Revolving Facility for a remaining availability of $23.9 million

and Cogeco Cable had used $439.9 million of its $750 million Term Revolving Facility for a remaining availability of $310.1 million. In addition,

Cogeco Cable also benefits from additional Revolving Facilities of $251 million as a result of the acquisition of PEER 1, of which $131.7 million

was used at May 31, 2013 for a remaining availability of $119.3 million. Two subsidiaries of Cogeco Cable also benefits from a Revolving Facility

of $103.7 million (US$100 million) related to the acquisition of ABB, of which $55.7 million (US$53.7 million) was used at May 31, 2013 for a

remaining availability of $48 million (US$46.3 million).

FINANCIAL POSITION

As a result of the acquisition of ABB and PEER 1 in the Cable segment, most financial position balances have changed significantly since

August 31, 2012. For further details on the preliminary allocation of the purchase price of the acquisitions, please refer to the investing activities

under the “Cash flow analysis” section.

OUTSTANDING SHARE DATA

A description of COGECO’s share data at June 30, 2013 is presented in the table below. Additional details are provided in note 10 of the condensed

interim consolidated financial statements.

Number of

Amount

(in thousands

of dollars)

Common shares

Multiple voting shares 1,842,860

Subordinate voting shares 14,989,338

121,976

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 12

FINANCING

In the normal course of business, COGECO has incurred financial obligations, primarily in the form of long-term debt, operating and finance

leases and guarantees. COGECO’s obligations, as discussed in the 2012 Annual Report, have not materially changed since August 31, 2012,

except as mentioned below.

On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the Term Loan A Facility was

converted into the Revolving Facility resulting in amounts borrowed under these two tranches of US$190 million and of US$100 million, respectively,

while the Term Loan B Facility remained the same. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin,

with a LIBOR floor for the Term Loan B Facility. The applicable margin was reduced by 0.625% for the Revolving Facility and for the Term Loan

A Facility and by 1.00% for the Term Loan B Facility. In addition, the LIBOR floor for the Term Loan B Facility was reduced from 1.00% to 0.75%.

All other terms and conditions remained the same. In connection with the amendment, transaction costs of US$6.2 million were incurred. In

connection with the acquisition of ABB on November 30, 2012, the Corporation initially concluded, through two of its US subsidiaries, First Lien

Credit Facilities totaling US$710 in three tranches for a net proceed of US$641.5 million net of transaction costs of US$18.5 million. The first

tranche, a Term Loan A Facility will mature on November 30, 2017, the second tranche, a Term Loan B Facility will mature on November 30, 2019

and the third tranche, a Revolving Credit Facility will mature on November 30, 2017. Effective on December 31, 2013, the Term Loan A Facility

is subject to quarterly amortization of $3 million in the first year, $6 million in the second year and $7.2 million in the third and fourth years. Effective

on December 31, 2012, the Term Loan B Facility is subject to quarterly amortization of 0.25% until its maturity date. In addition to the fixed

amortization schedule and commencing in the first quarter of fiscal 2015, loans under the Term Loan Facilities shall be prepaid according to a

Prepayment Percentage of excess cash flow generated during the prior fiscal year. The First Lien Credit Facilities are non-recourse to Cogeco

Cable, its Canadian subsidiaries and PEER 1's subsidiaries and are indirectly secured by a first priority fixed and floating charge on substantially

all present and future real and personal property and undertaking of every nature and kind of ABB and its subsidiaries. The provisions under

these facilities provide for restrictions on the operations and activities of ABB and its subsidiaries. Generally, the most significant restrictions relate

to permitted indebtedness and investments, distributions and maintenance of certain financial ratios.

On May 27, 2013, Cogeco Cable completed pursuant to a public debt offering, the issue of $300 million Senior Secured Debentures Series “4” (the

“Debentures”) for a net proceed of $297.1 million,net of transaction costs of $2.9 million. These Debentures mature on May 26, 2023 and bear

interest at 4.175% per annum payable semi-annually. These Debentures are indirectly secured by a first priority fixed and floating charge and a

security interest on substantially all present and future real and personal property and undertaking of every nature and kind of the Corporation

and its subsidiaries except for ABB and certain immaterial subsidiaries ("unrestricted subsidiaries"). The provisions under these Debentures

provide for restrictions on the operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally,

the most significant restrictions relate to permitted indebtedness, dispositions and maintenance of certain financial ratios.

On April 23, 2013, Cogeco Cable completed a private placement of $410.4 million (US$400 million) aggregate principal amount of Senior Unsecured

Notes (the “2020 Notes”) for a net proceed of $402.6 million (US$392.4 million) net of transaction costs of $7.8 million (US$7.6 million). These

2020 Notes mature on May 1, 2020 and bear interest at 4.875% per annum payable semi-annually. These 2020 Notes are guaranteed on a senior

unsecured basis, jointly and severally, by its subsidiaries except for the unrestricted subsidiaries. The provisions under these 2020 Notes provide

for restrictions on the operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most

significant restrictions relate to permitted indebtedness, investments and distributions.

On April 23, 2013, the Corporation's subsidiary, Cogeco Cable, reimbursed the Canadian Term Facility of $175 million and the US Term Facility

of US$225 million in connection with the financing for the acquisition of PEER 1. As a result of the acquisition of PEER 1 on January 31, 2013,

Cogeco Cable concluded Secured Credit Facilities totaling approximately $650 million with a syndicate of lenders in four tranches for a net proceed

of $640.3 million net of transaction costs of $2.8 million. The first tranche, a Canadian Term Facility amounting to $175 million, the second tranche,

a US Term Facility amounting to US$225 million, the third tranche, a Revolving Facility of $240 million and the fourth tranche, a UK Revolving

Facility of £7 million. The Revolving Facility is available in Canadian dollars, US dollars, British Pounds and Euros and interest rates are based

on Bankers' Acceptance, LIBOR Loans in US dollars, British Pounds or Euros, Prime Rate Loans or US and British Pounds Base Rate Loans,

plus the applicable margin. The UK Revolving Facility is available in British Pounds and interest rates are based on British Pounds Base Rate

Loans or British Pounds LIBOR Loans. The Secured Credit Facilities will mature on January 31, 2017. The Secured Credit Facilities are indirectly

secured by a first priority fixed and floating charge on substantially all present and future real and personal property and undertaking of every

nature and kind of Cogeco Cable and most of its subsidiaries except for the unrestricted subsidiaries, and provides for certain permitted

encumbrances, including purchased money obligations, existing funded obligations and charges granted by any subsidiary prior to the date when

it becomes a subsidiary, subject to a maximum amount. The provisions under this facility provides for restrictions on the operations and activities

of Cogeco Cable except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted investments and dividends

on multiple and subordinate voting shares, as well as incurrence and maintenance of certain financial ratios primarily linked to operating income

before amortization, financial expense and total indebtedness.

FINANCIAL MANAGEMENT

Cogeco Cable has entered into cross-currency swap agreements to set the liability for interest and principal payments on its US$190 million

Senior Secured Notes Series A maturing on October 1, 2015. These agreements have the effect of converting the U.S. interest coupon rate of

7.00% per annum to an average Canadian dollar interest rate of 7.24% per annum. The exchange rate applicable to the principal portion of the

debt has been fixed at $1.0625 per US dollar. Cogeco Cable elected to apply cash flow hedge accounting on these derivative financial instruments.

During the first nine months of fiscal 2013, amounts due under the US$190 million Senior Secured Notes Series A increased by $9.7 million due

to the US dollar’s appreciation relative to the Canadian dollar. The fair value of cross-currency swaps liability decreased by a net amount of $9.3

million, of which a decrease of $9.7 million offsets the foreign exchange loss on the debt denominated in US dollars. The difference of $0.4 million

was recorded as a decrease of other comprehensive income. During the first nine months of fiscal 2012, amounts due under the US$190 million

Senior Secured Notes Series A increased by $10.2 million due to the US dollar’s appreciation over the Canadian dollar. The fair value of cross-

currency swaps liability decreased by a net amount of $11.4 million, of which $10.2 million offsets the foreign exchange loss on the debt denominated

in US dollars.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 13

Furthermore, Cogeco Cable’s net investment in foreign subsidiaries is exposed to market risk attributable to fluctuations in foreign currency

exchange rates, primarily changes in the values of the Canadian dollar versus the US dollar and British Pound. This risk was mitigated since the

major part of the purchase prices for ABB and PEER 1 were borrowed directly in US dollars and British Pounds. These debts were designated

as hedges of net investments in foreign operations. At May 31, 2013, the net investment for ABB and for PEER 1 amounted to US$1.1 billion and

£66.6 million while long-term debt was amounted to US$841.7 million and £69.1 million. The exchange rate used to convert the US dollar currency

and British Pound currency into Canadian dollars for the statement of financial position accounts at May 31, 2013 was $1.0368 per US dollar and

$1.5752 per British Pound. The impact of a 10% change in the exchange rate of the US dollar and British Pound into Canadian dollars would

change other comprehensive income by approximately $27.5 million.

The Corporation is also impacted by foreign currency exchange rates, primarily changes in the values of the US dollar relative to the Canadian

dollar with regards to purchases of certain equipment, as the majority of customer premise equipment is purchased and subsequently paid in US

dollars. Please consult the “Foreign Exchange Risk” section in Note 13 of the condensed interim consolidated financial statements for further

details.

DIVIDEND DECLARATION

At its July 10, 2013 meeting, the Board of Directors of COGECO declared a quarterly eligible dividend of $0.19 per share for multiple voting and

subordinate voting shares, payable on August 7, 2013, to shareholders of record on July 24, 2013. The declaration, amount and date of any

future dividend will continue to be considered and approved by the Board of Directors of the Corporation based upon the Corporation’s financial

condition, results of operations, capital requirements and such other factors as the Board of Directors, at its sole discretion, deems relevant.

There is therefore no assurance that dividends will be declared, and if declared, the amount and frequency may vary.

CABLE SEGMENT

CUSTOMER STATISTICS

Consolidated

Net additions (losses) Net additions (losses)

Consolidated US

(1)

CANADA Quarters ended Nine months ended

May 31, 2013 May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

PSU 2,470,164 488,874 1,981,290 (3,331) 6,246 15,851 64,705

Television service customers 1,079,285 233,941

845,344

(8,407) (4,453) (21,143)

(9,112

)

HSI service customers 826,495 176,170

650,325

2,351 2,835 22,408 27,638

Telephony service customers 564,384 78,763

485,621

2,725 7,864 14,586 46,179

(1) Include 485,180 PSU (237,313 Television service, 169,553 HSI service and 78,314 Telephony service customers) from the acquisition of ABB. In the third quarter

of fiscal 2013, PSU from ABB at November 30, 2012 and February 28, 2013 have been adjusted downwards to comply with Cogeco Cable's and Canadian practices

mostly related to reporting the number of hotels and hotel units.

Fiscal 2013 third-quarter and first nine months, PSU net additions for the Canadian operations were lower than in the comparable period of the

prior year mainly as a result of service category maturity, competitive offers and tightening of our customer credit qualifications. PSU net additions

for the American operations were also lower than the last quarter resulting mainly from snowbirds returning home for the summer in its Miami

cluster. For the third quarter net customer losses for Television service customers stood at 8,407 compared to 4,453 for fiscal 2012 third-quarter.

Television service customer net losses are mainly due to the promotional offers of competitors for the video service combined with the tightening

of our customer credit controls in Canada. Fiscal 2013 third-quarter HSI service customers grew by 2,351 compared to 2,835 in the third quarter

of the prior year, and the number of net additions to the Telephony service stood at 2,725 customers compared to 7,864 customers for the same

period of the prior year. For the nine-month periods, PSU net additions are stemming primarily from additional HSI services, partly offset by losses

in Television services for both Canadian and American operations.

OPERATING RESULTS

Quarters ended Nine months ended

May 31,

2013

May 31,

2012 Change

May 31,

2013

May 31,

2012 Change

(in thousands of dollars, except percentages) $ $ % $ $ %

Revenue 464,497 319,771 45.3 1,222,080 952,930 28.2

Operating expenses 249,365 167,110 49.2 654,477 515,218 27.0

Management fees – COGECO Inc. — — — 9,569 9,485

0.9

Operating income before depreciation and amortization 215,132 152,661 40.9 558,034 428,227 30.3

Operating margin 46.3% 47.7% 45.7% 44.9%

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 14

Revenue

Fiscal 2013 third-quarter revenue increased by $144.7 million, or 45.3%, to reach $464.5 million, when compared to the same period last year.

For the first nine months, revenue amounted to $1.2 billion, an increase of $269.2 million, or 28.2% when compared to the same period of fiscal

2012. Revenue increases for both periods are mainly attributable to the operating results of the recent acquisitions as well as rate increases

implemented in June and July 2012 in the Canadian operations.

Operating expenses

For the third quarter of fiscal 2013, operating expenses increased by $82.3 million, or 49.2%, to reach $249.4 million. For the first nine months

of the fiscal year, operating expenses amounted to $654.5 million, an increase of $139 million, or 27.0%, when compared to the same period of

fiscal 2012. These additional operating expenses are mostly attributable to the recent acquisitions, partly offset by cost reduction initiatives and

the reduction in operating expenses in the Canadian operations related to the deployment and support costs incurred in fiscal 2012 for the

migration of Television service customers from analogue to digital.

Operating income before depreciation and amortization and operating margin

Fiscal 2013 third-quarter operating income before depreciation and amortization increased by $62.5 million, or 40.9%, to reach $215.1 million,

and by $129.8 million, or 30.3%, to reach $558.0 million in the first nine months as a result of the recent acquisitions and the improvement in the

Canadian operations. Cogeco Cable’s third-quarter operating margin decreased to 46.3% from 47.7% mainly due to lower margins generated

by PEER 1 acquisition and increased to 45.7% from 44.9% for the first nine months of fiscal 2013 when compared to the comparable periods of

the prior year.

FISCAL 2013 FINANCIAL GUIDELINES

As a result of revised projections in the Cable segment described below, the Corporation revised its consolidated projections for the 2013 fiscal

year. Operating income before depreciation and amortization should increase from $782 million to $795 million and financial expense should

increase from $118 million to $131 million.

Revised

projections

July 10, 2013

Revised

projections

April 10, 2013

Fiscal 2013 Fiscal 2013

(in millions of dollars) $ $

Financial guidelines

Revenue 1,835

1,835

Operating income before depreciation and amortization 795 782

Integration, restructuring and acquisition costs

17 16

Financial expense 131 118

Current income tax expense

94 94

Profit for the year 207 207

Profit for the year attributable to owners of the Corporation

69 69

Acquisitions of property, plant and equipment, intangible and other assets 404 404

Free cash flow

(1)

150 150

(1) Free cash flow is calculated as operating income before depreciation and amortization less integration, restructuring and acquisition costs, financial expense,

current income tax expense and acquisitions of property, plant and equipment, intangible and other assets.

CABLE SEGMENT

Giving effect to the improvement of the Cogeco Cable's financial performance in the Canadian operations with regards to the operating income

before depreciation and amortization mainly as a result of costs reduction initiatives, management revised upwards its operating income before

depreciation and amortization projections issued on April 10, 2013 from $767 million to $780 million which should contribute to increase the

operating margin from 45.2% to 46.0%. PSU growth should decline from 35,000 to 15,000 as a consequence of a more competitive environment

in the Canadian operations combined with service category maturity and tighter customer credit qualification. However, revenue projections should

remain the same as a result of the rate increases implemented in June 2013 in Quebec and Ontario. Furthermore, Cogeco Cable will use the

net proceeds of the issuance of US$215 million Senior Secured Notes, under a private placement, on June 27, 2013, and borrow under its credit

facilities to repay, on July 29, 2013, all the outstanding amount of $300 million Senior Secured Debentures Series 1, due on June 9, 2014.

Therefore, financial expense should reach $125 million, an increase of $12 million, mainly as a result of the estimated make-whole premium on

the early repayment of the Senior Secured Debentures Series 1.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 15

Fiscal 2013 revised financial guidelines are as follows:

Revised

projections

July 10, 2013

Revised

projections

April 10, 2013

Fiscal 2013 Fiscal 2013

(in millions of dollars, except net customer additions and operating margin) $ $

Financial guidelines

Revenue 1,695 1,695

Operating income before depreciation and amortization 780 767

Operating margin 46.0% 45.2%

Integration, restructuring and acquisition costs 17 16

Depreciation and amortization 368 368

Financial expense 125 113

Current income tax expense 92 92

Profit for the year 205 205

Acquisitions of property, plant and equipment, intangible and other assets 401 401

Free cash flow

(1)

145 145

Net customer addition guidelines

PSU growth 15,000 35,000

(1) Free cash flow is calculated as operating income before depreciation and amortization less integration, restructuring and acquisition costs, financial expense,

current income tax expense and acquisitions of property, plant and equipment, intangible and other assets.

FISCAL 2014 PRELIMINARY FINANCIAL GUIDELINES

For fiscal 2014, COGECO expects revenue to reach $2.1 billion and operating income before depreciation and amortization should reach $900

million, as a result of Cogeco Cable’s 2014 preliminary guidelines and the projected results of the radio and transit advertising activities. Free

cash flow should generate approximately $230 million and profit for the year attributable to the owners of the Corporation should reach $82 million.

Preliminary

projections

Revised

projections

July 10, 2013

Fiscal 2014 Fiscal 2013

(in millions of dollars) $ $

Financial guidelines

Revenue 2,075

1,835

Operating income before depreciation and amortization 900 795

Integration, restructuring and acquisition costs —

Financial expense 134 131

Current income tax expense 106

Profit for the year 250 207

Profit for the year attributable to owners of the Corporation

82 69

Acquisitions of property, plant and equipment, intangible and other assets 430 404

Free cash flow

(1)

230 150

(1) Free cash flow is calculated as operating income before depreciation and amortization less integration, restructuring and acquisition costs, financial expense,

current income tax expense and acquisitions of property, plant and equipment, intangible and other assets.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 16

CABLE SEGMENT

The fiscal 2014 preliminary financial guidelines take into consideration the current uncertain global economic environment. These preliminary

guidelines also take into consideration the competitive environment that prevails in Canada, the deployment of new technologies such as Fibre

to the Home ("FTTH"), Fibre to the Node (“FTTN”) and Internet Protocol Television (“IPTV”) by the incumbent telecommunications providers.

For fiscal 2014, Cogeco Cable expects to achieve revenue of $1.935 billion, representing growth of $240 million, or 14.2% when compared to

the revised fiscal 2013 projections issued on July 10, 2013. Revenue should increase as a result of the full year impact from the recent acquisitions.

In the Cable services segment, revenue should stem primarily from targeted marketing initiatives to improve penetration rates of the Digital

Television, HSI and Telephony services. Furthermore, the Digital Television service should continue to benefit from the customers' ongoing strong

interest in the Corporation's growing HD service offerings. Revenue will also benefit, in the Canadian cable services, from the impact of rate

increases implemented in June 2013 in Quebec and Ontario, ranging on average between $2 to $3 per HSI and Telephony service customers.

Cogeco Cable's strategies include consistently effective marketing to residential and business customers, competitive product offerings and

superior customer service, which combined, lead to the expansion and loyalty of the Television service clientele. As the penetration of residential

HSI, Telephony and Digital Television services increase, the new demand for these products should slow in the Canadian cable services, reflecting

service category maturity. However, growth in the commercial and business sector is expected to continue at a consistent pace in the Cable

services segment. In the Enterprise services segment, revenue growth should stem primarily from the hosting services and the opening of the

Barrie data centre facility.

As a result of the full year impact from the recent acquisitions, the increased costs to service additional customers, inflation and manpower

increases, as well as the continuation of the marketing initiatives and retention strategies, operating expenses are expected to expand by

approximately $135 million, or 14.8% in the 2014 fiscal year when compared to the revised 2013 projections.

For fiscal 2014, Cogeco cable expects operating income before depreciation and amortization of $885 million, an increase of $105 million, or

13.5% when compared to the revised projections for 2013. The operating margin is expected to reach approximately 45.7% in fiscal 2014,

compared to the revised projections for the 2013 fiscal year of 46.0%, reflecting operating expenses growth slightly higher than the revenue

growth as well as lower margins business activities from the Enterprise services segment.

Cogeco Cable expects the depreciation and amortization of property, plant and equipment and intangible assets to increase by $67 million for

fiscal 2014, mainly from the full year impact of recent acquisitions. Cash flows from operations should finance capital expenditures and the

increase in intangible assets amounting to $425 million, an increase of $24 million when compared to the revised 2013 projections. Capital

expenditures projected for the 2014 fiscal year are mainly due to scalable infrastructure for product enhancements and the deployment of new

technologies, line extensions to expand existing territories, support capital to improve business information systems and support facility

requirements and expansion for the Enterprise services segment in order to fulfill orders from new customers.

Fiscal 2014 free cash flow is expected to amount to $225 million, an increase of $80 million, or 55.2% when compared to the projected free cash

flow of $145 million for fiscal 2013, resulting from the growth in operating income before depreciation and amortization, partly offset by additional

capital expenditures and financial expense from the full year impact of the recent acquisitions of ABB and PEER 1 and by an increase in current

income taxes. Generated free cash flow will reduce Indebtedness net of cash and cash equivalent, thus improving the Corporation's net leverage

ratios. Financial expense should amount to $130 million an increase of $5 million related to ABB's and PEER 1's acquisition financing. As a result,

profit for the year of approximately $245 million should be achieved compared to $205 million for the revised projections for fiscal 2013.

Fiscal 2014 preliminary financial guidelines are as follows:

Preliminary

projections

Revised

projections July

10, 2013

Fiscal 2014 Fiscal 2013

(in millions of dollars, except operating margin) $ $

Financial guidelines

Revenue 1,935 1,695

Operating income before depreciation and amortization 885 780

Operating margin 45.7% 46.0%

Integration, restructuring and acquisition costs — 17

Depreciation and amortization 435 368

Financial expense 130 125

Current income tax expense 105 92

Profit for the year 245 205

Acquisitions of property, plant and equipment, intangible and other assets 425 401

Free cash flow

(1)

225 145

(1) Free cash flow is calculated as operating income before depreciation and amortization less integration, restructuring and acquisition costs, financial expense,

current income tax expense and acquisitions of property, plant and equipment, intangible and other assets.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 17

CONTROLS AND PROCEDURES

The President and Chief Executive Officer (“CEO”) and the Senior Vice President and Chief Financial Officer (“CFO”), together with Management,

are responsible for establishing and maintaining adequate disclosure controls and procedures and internal controls over financial reporting, as

defined in National Instrument 52-109. COGECO’s internal control framework is based on the criteria published in the report Internal Control-

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and is designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with

IFRS.

The CEO and CFO, supported by Management, evaluated the design of the Corporation’s disclosure controls and procedures and internal controls

over financial reporting as of May 31, 2013, and have concluded that they are adequate. Furthermore, no significant changes to the internal

controls over financial reporting occurred during the quarter ended May 31, 2013, except as described below with respect to ABB and PEER 1.

On November 30, 2012, the Corporation's subsidiary, Cogeco Cable, completed the acquisition of ABB and, subsequently on January 31, 2013

and April 3, 2013, the Corporation acquired 100% of the issued and outstanding shares of PEER 1. Due to the short period of time between those

acquisition dates and the certification date on July 10, 2013, management was unable to complete its review of the design of Internal Controls

Over Financial Reporting ("ICFR") for the recent acquisitions. At May 31, 2013, risks were however mitigated as management was fully apprised

of any material events affecting these recent acquisitions. In addition, all the assets and liabilities acquired were valued and recorded in the

condensed interim consolidated financial statements as part of the preliminary purchase price allocation process and both ABB and PEER 1

results of operations were also included in the Corporation's consolidated results. ABB constitutes 13% of revenue, 13% of profit of the period,

32% of the total assets, 18% of the current assets, 32% of the non current assets, 13% of the current liabilities and 32% of the non current liabilities

of the consolidated condensed interim financial statements for the nine-month period ended May 31, 2013. PEER 1 constitutes 4% of revenue,

-8% of profit of the period, 14% of the total assets, 9% of the current assets, 14% of the non current assets, 9% of the current liabilities and 10%

of the non current liabilities of the consolidated condensed interim financial statements for the nine-month period ended May 31, 2013. In the

upcoming quarters, management will complete its review of the design of ICFR for ABB and PEER 1 and assess its effectiveness. The business

combinations of fiscal 2013 under the "Cash flow analysis" section of this MD&A presents summary financial information about the preliminary

purchase price allocation, assets acquired and liabilities assumed as well as other financial information about ABB and PEER 1 business impact

on the consolidated results of the Corporation. Other financial information about ABB can be found in the Business Acquisition Report filed by

the Corporation on www.sedar.com, on February 13, 2013.

UNCERTAINTIES AND MAIN RISK FACTORS

The uncertainties and main risk factors faced by the Corporation have not changed significantly for its Canadian cable services since August 31,

2012, except for the proposed Astral/Bell amended Arrangement Agreement described below. A detailed description of the uncertainties and main

risk factors faced by COGECO can be found in the 2012 Annual Report and the Corporation's MD&A for the period ended February 28, 2013

filed on SEDAR, available at www.sedar.com.

On June 27, 2013, the CRTC approved the application by Astral Media Inc. (“Astral”) to transfer the control of Astral to BCE Inc. (“Bell”). The

CRTC concluded that the transaction as modified is in the public interest and advances the objectives set out for the Canadian broadcasting.

Specific measures have been imposed by the CRTC to ensure that the transaction benefits Canadians and the Canadian broadcasting system.

As a part of the conditions, BCE will have to sell 10 of the radio stations it acquired in the deal as well as 11 specialty TV channels and be subject

to greater increase of regulatory oversight with respect to affiliation agreements. Bell will control over forty percent (40 %) of Cogeco Cable's

programming service affiliation payments at current wholesale rates. In the event of future disputes concerning the terms of affiliation between

Cogeco Cable and Bell for services controlled by Bell, the CRTC may set such terms at either party's request following a dispute resolution

process, and the services may not be interrupted by either party while such dispute resolution process is pending.

FUTURE ACCOUNTING DEVELOPMENTS IN CANADA

A number of new standards, interpretations and amendments to existing standards were issued by the International Accounting Standard Board

(“IASB”) that are mandatory but not yet effective for the period ended May 31, 2013 and have not been applied in preparing the condensed interim

consolidated financial statements. These standards are described under “Future accounting developments in Canada” in the Corporation’s 2012

annual MD&A, available at www.sedar.com and www.cogeco.ca.

CHANGES IN CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There has been no significant change in COGECO’s accounting policies, estimates and future accounting pronouncements since August 31,

2012. A description of the Corporation’s policies and estimates can be found in the 2012 Annual Report, available at www.sedar.com and

www.cogeco.ca.

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 18

NON-IFRS FINANCIAL MEASURES

This section describes non-IFRS financial measures used by COGECO throughout this MD&A. It also provides reconciliations between these

non-IFRS measures and the most comparable IFRS financial measures. These financial measures do not have standard definitions prescribed

by IFRS and therefore, may not be comparable to similar measures presented by other companies. These measures include “cash flow from

operations”, “free cash flow” and “operating income before depreciation and amortization”.

CASH FLOW FROM OPERATIONS AND FREE CASH FLOW

Cash flow from operations is used by COGECO’s management and investors to evaluate cash flows generated by operating activities, excluding

the impact of changes in non-cash operating activities, amortization of deferred transaction costs and discounts on long-term debt, income taxes

paid, current income tax expense, financial expense paid and financial expense. This allows the Corporation to isolate the cash flows from

operating activities from the impact of cash management decisions. Cash flow from operations is subsequently used in calculating the non-IFRS

measure, “free cash flow”. Free cash flow is used, by COGECO’s management and investors, to measure its ability to repay debt, distribute

capital to its shareholders and finance its growth.

The most comparable IFRS measure is cash flow from operating activities. Cash flow from operations is calculated as follows:

Quarters ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

(in thousands of dollars) $ $ $ $

Cash flow from operating activities 167,641 109,546

318,731 245,571

Changes in non-cash operating activities 5,443 20,507 80,194 85,288

Amortization of deferred transaction costs and discounts on long-term debt 3,520 1,681

7,237 3,357

Income taxes paid 17,031 10,634 79,490 67,711

Current income tax expense (27,563) (25,016) (76,227) (72,306)

Financial expense paid 28,876 18,076 75,271 49,587

Financial expense (36,487) (17,822) (84,032) (51,710)

Cash flow from operations 158,461 117,606

400,664 327,498

Free cash flow is calculated as follows:

Quarters ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

(in thousands of dollars) $ $ $ $

Cash flow from operations 158,461 117,606 400,664

327,498

Acquisition of property, plant and equipment (108,976) (84,161) (289,016) (243,161)

Acquisition of intangible and other assets (4,516) (3,980) (13,650) (10,570)

Free cash flow 44,969 29,465 97,998 73,767

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION

Operating income before depreciation and amortization is used by COGECO’s management and investors to assess the Corporation’s ability to

seize growth opportunities in a cost effective manner, to finance its ongoing operations and to service its debt. Operating income before depreciation

and amortization is a proxy for cash flows from operations excluding the impact of the capital structure chosen, and is one of the key metrics

used by the financial community to value the business and its financial strength.

The most comparable IFRS financial measure is operating income. Operating income before depreciation and amortization is calculated as

follows:

Quarters ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

(in thousands of dollars, except percentages)

$ $ $ $

Operating income 113,609 95,473

299,350

229,046

Depreciation and amortization 104,805 62,973

256,860

214,071

Integration, restructuring and acquisitions costs 2,160 — 16,912 108

Operating income before depreciation and amortization 220,574 158,446

573,122

443,225

Management's discussion and analysis (“MD&A”) COGECO INC. Q3 2013 19

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

Quarters ended May 31,

February

28,

February

29,

November 30, August 31,

(in thousands of dollars, except per share data)

2013 2012 2013 2012 2012 2011 2012 2011

$ $ $ $ $ $ $ $

Revenue 504,434 358,032

458,501 345,613 366,608 346,023 356,685 331,045

Operating income before depreciation and amortization 220,574 158,446

195,968 144,518 156,580 140,261 163,617 152,434

Operating income 113,609 95,473

102,464

58,931 83,277 74,642

95,943 101,304

Income taxes 22,006 22,278 15,416 13,372 19,168 12,340

33,625 21,804

Profit for the period from continuing operations 55,116 55,373 56,517 29,449 47,095 44,524

44,900 63,870

Profit for the period from discontinued operations — — — 52,047 —

3,399 — 6,219

Profit for the period 55,116 55,373 56,517 81,496 47,095 47,923

44,900 70,089

Profit for the period attributable to owners of the

Corporation 18,902 19,303 16,899 25,089 18,487 18,770

13,889 23,317

Cash flow from operating activities 167,641 109,546

157,095 126,455 (6,005

)

9,570 203,193 217,792

Cash flow from operations 158,461 117,606

140,413 105,153 101,790 104,739 119,612 148,228

Acquisitions of property, plant and equipment, intangible

and other assets

113,492 88,141

106,019

87,186 83,155 78,404

124,638 122,441

Free cash flow 44,969 29,465 34,394 17,967 18,635 26,335

(5,026

)

25,787

Earnings per share

(1)

From continuing and discontinued operations

Basic 1.13 1.15 1.01 1.50 1.11 1.12 0.83 1.39

Diluted 1.12 1.15 1.00 1.49 1.10 1.11 0.83 1.39

From continuing operations

Basic 1.13 1.15 1.01 0.50 1.11 1.06 0.83 1.27

Diluted 1.12 1.15 1.00 0.50 1.10 1.05 0.83 1.27

From discontinued operations

Basic — — — 1.00 — 0.07

—

0.12

Diluted — — — 0.99 — 0.06

—

0.12

(1) Per multiple and subordinate voting share.

SEASONAL VARIATIONS

Cogeco Cable’s operating results are not generally subject to material seasonal fluctuations except as follows. The customer growth in the

Television service customers and HSI service are generally lower in the second half of the fiscal year as a result of a decrease in economic activity

due to the beginning of the vacation period, the end of the television season, and students leaving their campuses at the end of the school year.

Cogeco Cable offers its services in several university and college towns such as Kingston, Windsor, St.Catharines, Hamilton, Peterborough,

Trois-Rivières and Rimouski in Canada. In the American operations, the customer growth in the Television service customers and HSI service

are also generally lower in the second half of the fiscal year as a result of a decrease in economic activity due to the snowbirds leaving for the

summer season essentially in the Miami area.

ADDITIONAL INFORMATION

This MD&A was prepared on July 10, 2013. Additional information relating to the Corporation, including its Annual Information Form, is available

on the SEDAR website at www.sedar.com.

/s/ Jan Peeters /s/ Louis Audet

Jan Peeters Louis Audet

Chairman of the Board President and Chief Executive Officer

COGECO Inc.

Montréal, Québec

July 10, 2013

CONDENSED INTERIM CONSOLIDATED FINANCIAL

STATEMENTS

Three and nine-months periods ended May 31, 2013

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 21

COGECO INC.

INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

(unaudited)

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

(In thousands of Canadian dollars, except per share data) $ $ $ $

Revenue 504,434 358,032 1,329,543 1,049,668

Operating expenses (note 4) 283,860 199,586

756,421

606,443

Integration, restructuring and acquisition costs (note 2) 2,160 — 16,912 108

Depreciation and amortization (note 5) 104,805 62,973

256,860

214,071

Operating income 113,609 95,473

299,350

229,046

Financial expense (note 6) 36,487 17,822 84,032 51,710

Profit before income taxes 77,122 77,651

215,318

177,336

Income taxes (note 7) 22,006 22,278 56,590 47,990

Profit for the period from continuing operations 55,116 55,373

158,728

129,346

Profit for the period from discontinued operations (note 14) — — — 55,446

Profit for the period 55,116 55,373

158,728

184,792

Profit for the period attributable to:

Owners of the Corporation 18,902 19,303 54,288 63,162

Non-controlling interest 36,214 36,070

104,440

121,630

55,116 55,373

158,728

184,792

Earnings per share (note 8)

Basic

Profit for the period from continuing operations 1.13 1.15 3.25 2.71

Profit for the period from discontinued operations — — — 1.07

Profit for the period 1.13 1.15 3.25 3.78

Diluted

Profit for the period from continuing operations 1.12 1.15 3.22 2.69

Profit for the period from discontinued operations — — — 1.06

Profit for the period 1.12 1.15 3.22 3.75

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 22

COGECO INC.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

(In thousands of Canadian dollars) $ $ $ $

Profit for the period 55,116 55,373

158,728 184,792

Other comprehensive income (loss)

Cash flow hedging adjustments

Net change in fair value of hedging derivative financial instruments 1,343 9,566

9,288

11,446

Net change in fair value of hedging derivative financial instruments reclassified to

financial expense (1,026) (8,246)

(9,709

) (10,165)

Income tax expense on cash flow hedging adjustments (119) (518)

(304

)

(663

)

198 802

(725

) 618

Foreign currency translation adjustments

Net foreign currency translation differences on net investments in foreign operations 2,394 — 31,487

(745

)

Net changes in unrealized adjustments on translation of long-term debts designated

as hedges of net investments in foreign operations (712) — (19,517) —

Reclassification to profit and loss of accumulated realized foreign currency translation

gain of a net investment in foreign operations — — — (19,817)

1,682 — 11,970 (20,562)

Defined benefit pension plans actuarial adjustments

Net change in defined benefit pension plans actuarial adjustments 5,461 (3,357)

7,392 (7,411

)

Income tax recovery (expense) on defined benefit pension plans actuarial adjustments (1,469) 903

(1,988

)

1,993

3,992 (2,454)

5,404 (5,418

)

Other comprehensive income (loss) for the period 5,872 (1,652) 16,649 (25,362)

Comprehensive income for the period 60,988 53,721

175,377 159,430

Comprehensive income for the period attributable to:

Owners of the Corporation 22,758 17,637 62,017 52,452

Non-controlling interest 38,230 36,084

113,360 106,978

60,988 53,721

175,377 159,430

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 23

COGECO INC.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited)

Equity attributable to owners of the Corporation

capital

Share-based

compensation

reserve

Accumulated

other

comprehensive

income

Retained

earnings

Equity

attributable

to non-

controlling

interest

Total

shareholders'

equity

(In thousands of Canadian dollars) $ $ $ $ $ $

(note 10)

Balance at August 31, 2011 119,318

3,912

7,290 212,005

701,155

1,043,680

Profit for the period — — — 63,162

121,630 184,792

Other comprehensive loss for the period — — (6,412) (4,298) (14,652) (25,362)

Comprehensive income for the period — — (6,412) 58,864

106,978 159,430

Share based compensation —

1,445

— —

1,138 2,583

Issuance of subordinate voting shares by a subsidiary to non-

controlling interest —

(121

) — —

1,416 1,295

Dividends on multiple voting shares — — — (995) —

(995

)

Dividends on subordinate voting shares — — — (8,040) (24,723) (32,763)

Effect of changes in ownership of a subsidiary on non-

controlling interest — — — 109

(109

) —

Acquisition of subordinate voting shares held in trust under the

Incentive Share Unit Plan (1,740) — — — —

(1,740

)

Disposal of subordinate voting shares held in trust under the

Incentive Share Unit Plan 33 — — 17 —

Distribution to employees of subordinate voting shares held in

trust under the Incentive Share Unit Plan 325

(442

) — 117 — —

Acquisition by a subsidiary from non-controlling interests of

subordinate voting shares held in trust under the Incentive

Share Unit Plan — — — —

(3,049

)

(3,049

)

Disposal by a subsidiary to non-controlling interest of

subordinate voting shares held in trust under the Incentive

Share Unit Plan — — — 55 638 693

Non-controlling interest acquired as a result of a business

combination (note 2) — — — — 462 462

Total contributions by and distributions to shareholders (1,382) 882 — (8,737) (24,227) (33,464)

Balance at May 31, 2012 117,936

4,794

878 262,132

783,906

1,169,646

Balance at August 31, 2012 117,936

5,338

1,036 273,489

806,606

1,204,405

Profit for the period — — — 54,288

104,440 158,728

Other comprehensive income for the period — — 3,613 4,116

8,920

16,649

Comprehensive income for the period — — 3,613 58,404

113,360 175,377

Share-based compensation —

1,757

— —

1,596 3,353

Issuance of subordinate voting shares by a subsidiary to non-

controlling interest — (81) — — 798 717

Dividends on multiple voting shares — — — (1,050) —

(1,050

)

Dividends on subordinate voting shares — — — (8,484) (25,703) (34,187)

Effect of change in ownership of a subsidiary of non-

controlling interest — — — (36)

—

Acquisition of subordinate voting shares held in trust under the

Incentive Share Unit Plan (1,201) — — — —

(1,201

)

Distribution to employees of subordinate voting shares held in

trust under the Incentive Share Unit Plan 1,034

(1,041

) — 7 — —

Acquisition by a subsidiary from non-controlling interest of

subordinate voting shares held in trust under the Incentive

Share Unit Plan — — — —

(4,076

)

(4,076

)

Distribution by a subsidiary to non-controlling interest of

subordinate voting shares held in trust under the Incentive

Share Unit Plan —

(457

) — 3 454 —

Non-controlling interest acquired as a result of a business

combination (note 2)

— — — — 16,962 16,962

Acquisition of non-controlling interest (note 2) — — — — (17,424) (17,424)

Total contributions by and distributions to shareholders (167) 178 — (9,560) (27,357) (36,906)

Balance at May 31, 2013 117,769

5,516

4,649 322,333

892,609

1,342,876

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 24

COGECO INC.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited)

May 31, 2013 August 31, 2012

(In thousands of Canadian dollars) $ $

Assets

Current

Cash and cash equivalents (note 11 b)) 39,643

215,523

Trade and other receivables (note 13 a)) 127,894 98,627

Income taxes receivable 15,388 13,614

Prepaid expenses and other 17,773 12,920

200,698

340,684

Non-current

Other assets 14,460

7,133

Property, plant and equipment 1,772,871 1,343,904

Intangible assets 2,057,398 1,133,816

Goodwill 1,310,459

249,198

Deferred tax assets 80,106 29,184

5,435,992 3,103,919

Liabilities and Shareholders’ equity

Liabilities

Current

Bank indebtedness — 741

Trade and other payables 225,110

248,822

Provisions 10,363 10,567

Income tax liabilities 40,389 41,908

Deferred and prepaid revenue 57,636 42,920

Balance due on business combinations, bank prime rate plus 1% and payable in June 2013 (February and June

2013 at August 31, 2012)

2,000

13,400

Current portion of long-term debt (note 9) 11,945 855

347,443

359,213

Non-current

Long-term debt (note 9) 3,082,978 1,144,814

Balance due on a business combination, bank prime rate plus 1% and payable in July 2014 875 —

Derivative financial instruments

2,380

11,668

Deferred and prepaid revenue and other liabilities 20,635 17,891

Pension plan liabilities and accrued employees benefits 17,866 32,975

Deferred tax liabilities 620,939

332,953

4,093,116 1,899,514

Shareholders’ equity

Equity attributable to owners of the Corporation

Share capital (note 10) 117,769

117,936

Share-based compensation reserve

5,516 5,338

Accumulated other comprehensive income

4,649 1,036

Retained earnings 322,333

273,489

450,267

397,799

Non-controlling interest 892,609

806,606

1,342,876 1,204,405

5,435,992 3,103,919

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 25

COGECO INC.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

(In thousands of Canadian dollars)

$ $ $ $

Cash flow from operating activities

Profit for the period from continuing operations 55,116 55,373

158,728 129,346

Adjustments for:

Depreciation and amortization (note 5) 104,805 62,973

256,860 214,071

Income taxes (note 7) 22,006 22,278 56,590 47,990

Financial expense (note 6) 36,487 17,822 84,032 51,710

Share-based compensation (note 10) 1,693 1,124

4,149 2,839

Loss on disposals and write-offs of property, plant and equipment 13 177

1,837

907

Defined benefit pension plans contributions, net of expense (1,129) (984)

(8,272

)

1,294

Other — —

(238

) —

218,991 158,763

553,686 448,157

Changes in non-cash operating activities (note 11 a)) (5,443) (20,507) (80,194) (85,288)

Income taxes paid (17,031) (10,634) (79,490) (67,711)

Financial expense paid (28,876) (18,076) (75,271) (49,587)

167,641 109,546

318,731 245,571

Cash flow from investing activities

Acquisition of property, plant and equipment (108,976) (84,161) (289,016) (243,161)

Acquisition of intangible and other assets (4,516) (3,980) (13,650) (10,570)

Business combinations, net of cash and cash equivalents acquired (note 2) (22,377) (337) (2,006,129) (36,072)

Disposal of subsidiaries, net of cash and cash equivalents disposed — — —

4,509

Other 57 935 305

1,082

(135,812) (87,543) (2,308,490) (284,212)

Cash flow from financing activities

Increase (decrease) in bank indebtedness (3,993) 6,641

(741

)

6,641

Net increases (repayments) under the revolving facilities (305,691) (3,975)

547,488

(107,678)

Issuance of long-term debts, net of discounts and transaction costs 694,651 — 1,728,617

232,715

Repayments of long-term debt (406,956) (531) (408,640)

(1,747

)

Increase in deferred transaction costs (1,960) (41)

(4,317

)

(1,497

)

Repayment of balance due on a business combination — — (10,525) —

Repayment of promissory note payable — — —

(5,000

)

Acquisition of subordinate voting shares held in trust under the Incentive

Share Unit Plan (note 10) — —

(1,201

)

(1,740

)

Disposal of subordinate voting shares held in trust under the Incentive Share Unit Plan — — —

Dividends paid on multiple voting shares (350) (332)

(1,050

)

(995

)

Dividends paid on subordinate voting shares (2,807) (2,678)

(8,484

)

(8,040

)

Issuance of subordinate voting shares by a subsidiary to non-controlling interest 130 — 717

1,295

Acquisition by a subsidiary from non-controlling interest of subordinate voting shares

held in trust under the Incentive Share Unit Plan — —

(4,076

)

(3,049

)

Disposal by a subsidiary to non-controlling interest of subordinate voting shares held in

trust under the Incentive Share Unit Plan

— 693 — 693

Dividends paid on subordinate voting shares by a subsidiary to non-controlling interest (8,564) (8,241) (25,703) (24,723)

(35,540) (8,464) 1,812,085 86,925

Effect of exchange rate changes on cash and cash equivalents denominated in

foreign currencies 1,089 —

1,794

—

Net change in cash and cash equivalents from continuing operations (2,622) 13,539 (175,880) 48,284

Net change in cash and cash equivalents from discontinued operations (note 14) — — — 49,597

Cash and cash equivalents, beginning of the period 42,265 139,558

215,523

55,216

Cash and cash equivalents, end of the period 39,643 153,097 39,643

153,097

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 26

NATURE OF OPERATIONS

COGECO Inc. (the “Corporation” or the “Parent Corporation”) is a Canadian public corporation whose shares are listed on the Toronto Stock

Exchange (“TSX”). The Corporation is engaged in Cable Television, High Speed Internet (“HSI”), Telephony, managed information technology

and infrastructure, and other telecommunications services to its residential and commercial customers in Canada, in the United States of America

(“US”), in the United Kingdom ("UK") and in France through Cogeco Cable Inc., and in Radio broadcasting through Cogeco Diffusion Acquisitions

Inc. (“Cogeco Diffusion”) and operates an advertising public transit business through Métromédia CMR Plus Inc. (“Métromédia”) (see note 3).

The Corporation's registered office is located at 5 Place Ville Marie, Suite 1700, Montréal, Québec, H3B 0B3.

1. Basis of Presentation

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standards

(“IAS”) 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements. Certain information

and footnote disclosure normally included in annual financial statements were omitted or condensed where such information is not considered

material to the understanding of the Corporation's interim financial information. As such, these condensed interim consolidated financial

statements should be read in conjunction with the Corporation's 2012 annual consolidated financial statements.

These condensed interim consolidated financial statements have been prepared with the accounting policies the Corporation adopted in its

2012 annual consolidated financial statements. The accounting policies have been applied consistently to all periods presented in the

condensed interim consolidated financial statements unless otherwise indicated.

The condensed interim consolidated financial statements have been prepared on a going concern basis using historical cost except for

derivative financial instruments and cash-settled share-based payment arrangements, which are measured at fair value and for the pension

plan liabilities and accrued employee benefits, which are measured at present value.

Financial information is presented in Canadian dollars, which is the functional currency of COGECO Inc.

The results of operations for the interim period are not necessarily indicative of the results of operations for the full year. The Corporation

does not expect seasonality to be a material factor in quarterly results except that the customer growth in the Cable Television and HSI

service are generally lower in the second half of the fiscal year as a result of a decrease in economic activity due to the beginning of the

vacation period, the end of the television season, and students leaving their campuses at the end of the school year in Canada, and in the

US, snowbirds leaving for the summer season in the Miami area.

The condensed interim consolidated financial statements were approved by the Board of Directors of COGECO Inc. at its meeting held on

July 10, 2013.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 27

2. Business Combinations

Business Combinations in fiscal 2013

On November 30, 2012, the Corporation's subsidiary, Cogeco Cable, completed the acquisition of all the outstanding shares of Atlantic

Broadband ("ABB"), an independent cable system operator formed in 2003, serving about 485,000 primary service units and providing

Analogue and Digital Television, as well as HSI and Telephony services. The acquisition is an attractive entry point into the US market,

providing a significant increase in Primary Service Units base with further growth potential, a high quality network infrastructure and the

ability for the Corporation’s management to leverage its core knowledge and operational experience. The transaction, valued at US$1.36

billion, was financed through a combination of cash on hand, a draw-down on the existing Term Revolving Facility of approximately US$588

million and US$660 million of borrowings under a new committed non-recourse debt financing at ABB (see note 9 d)). Ranked the 12th-

largest cable television system operator in the US, ABB operates cable systems in Western Pennsylvania, Southern Florida, Maryland,

Delaware and South Carolina.

On January 31, 2013, the Corporation's subsidiary, Cogeco Cable, acquired approximately 96.57% of the issued and outstanding shares

of Peer 1 Network Enterprises, Inc. (“PEER 1”). The transaction, valued at approximately $649 million, was financed by new secured

revolving credit facilities in the amount of approximately $250 million as well as new secured term credit facilities in the amount of approximately

$400 million both having a maturity of four years (see note 9 a)). PEER 1 is one of the world's leading internet infrastructure providers,

specializing in managed hosting, dedicated servers, cloud services and collocation. This acquisition enhances Cogeco Cable's footprint and

builds on its strategic initiatives by increasing scale in an attractive industry segment with significant growth prospects in the state of the art

data center platforms. The Corporation will also serve additional businesses worldwide, in addition to approximately 11,000 customers

currently served, through 23 data centres and 21 points-of-presence across North America and Europe. PEER 1's primary network centre

and head office remain located in Vancouver.

On March 6, 2013, the Corporation's subsidiary, Cogeco Cable, completed the working capital adjustments in relation to the ABB acquisition,

which increased Income tax receivable by $3.4 million and goodwill by $0.6 million, and decreased trade and other payables assumed by

$1.5 million and income tax liabilities assumed by $0.1 million.

On April 3, 2013, Cogeco Cable Inc. completed the acquisition of the remaining 3.43% of the issued and outstanding shares of PEER 1

pursuant to the compulsory acquisition provisions in Section 300 of the Business Corporations Act ("British Columbia") for a cash consideration

of $17 million. The acquisition of non-controlling interest resulted in no changes to the preliminary purchase price allocation.

In addition, Métromédia also completed the acquisition of a non-controlling interest participation of 27.5% in one of its subsidiaries for a

cash consideration of approximately $0.5 million.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 28

The preliminary purchase price allocation of these acquisitions, pending the completion of the valuation of the net assets acquired as well

as Metromedia's non-controlling interest acquisition are as follows:

Métromédia PEER 1 ABB TOTAL

$ $ $ $

Consideration

Paid

Purchase of shares 462 494,796 337,779

833,037

Working capital adjustments — — 5,415

5,415

Repayment of secured debts and settlement of options outstanding — 170,872 1,021,854 1,192,726

462 665,668 1,365,048 2,031,178

Net assets acquired

Cash and cash equivalents — 10,840 5,480 16,320

Restricted cash — 8,729 —

8,729

Trade and other receivables — 12,772 9,569 22,341

Prepaid expenses and other — 3,855 1,370

5,225

Income tax receivable — 672 3,418

4,090

Other assets — 3,328 —

3,328

Property, plant and equipment — 150,206 205,353

355,559

Intangible assets — 139,703 763,084

902,787

Goodwill — 421,986 603,254 1,025,240

Deferred tax assets — 8,355 33,835 42,190

Trade and other payables assumed — (26,330) (26,134) (52,464)

Provisions — —

(721

)

(721

)

Income tax liabilities assumed — (4,716) (53)

(4,769

)

Deferred and prepaid revenue and other liabilities assumed — (3,315) (5,254)

(8,569

)

Long-term debt assumed — (1,735) —

(1,735

)

Deferred tax liabilities — (58,682) (228,153) (286,835)

Non-controlling interest 462 — — 462

462 665,668 1,365,048 2,031,178

ABB

The amount of goodwill, none of which is expected to be deductible for tax purposes, is mainly attributable to revenue and operating income

before depreciation and amortization growth, future market development related to the entry of the Corporation's subsidiary, Cogeco Cable,

in the US market, expected benefits from the corporate tax structure and from the future utilization of tax losses carryforward and to the

strength of ABB assembled workforce.

In connection with this acquisition, the Corporation's subsidiary, Cogeco Cable, incurred acquisition-related costs of $11.1 million of which

$9.4 million have been recognized in the current year as “Integration, restructuring and acquisition costs” in the Corporation’s consolidated

statements of profit or loss.

PEER 1

The amount of goodwill, none of which is expected to be deductible for tax purposes, is mainly attributable to revenue and operating income

before depreciation and amortization growth in the Enterprise service segment, future development of service suite for businesses across

the Canadian, US and European markets, to the expected benefits from the corporate tax structure and to the strength of PEER 1's assembled

workforce.

In connection with this acquisition, the Corporation's subsidiary, Cogeco Cable, incurred acquisition-related costs of $7.4 million which have

been recognized in the current year as “Integration, restructuring and acquisition costs” in the Corporation's consolidated statements of profit

or loss.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 29

Impact of acquisitions on the results of COGECO Inc.

Revenue and profit for the period for the three and nine-month periods ended May 31, 2013, include revenue of $90.4 million and $176.2 million

and profit for the period of $13.3 million and $20.1 million, respectively, attributable to the additional operations generated by ABB and

revenue of $44.2 million and $58.5 million and loss for the period of $9.6 million and $15.5 million, respectively, attributable to the additional

operations generated by PEER 1.

Had the business combinations been effective at September 1, 2012, the consolidated revenue of the Corporation would have been $1.5

billion and the profit for the year would have been $158.1 million. Management considers these “pro-forma” numbers to represent an

approximate measure of the performance of the combined group and to provide a reference point for comparison in future periods. In

determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the dates

of acquisitions would have been the same, in all material respects, as if the acquisition had occurred on September 1, 2012.

Business Combination in fiscal 2012

During the second quarter, the Corporation completed the purchase price allocation of Métromédia which was acquired on December 26,

2011. Accordingly, the final purchase price allocation is as follows:

Preliminary Final

$ $

Consideration

Paid

Purchase of shares 36,860 36,860

Repayment of secured debt 2,140

2,140

39,000 39,000

Balance due on a business combination, bank prime rate plus 1% and payable in June 2013 2,000

2,000

41,000 41,000

Net assets acquired

Cash and cash equivalents 3,265

3,265

Trade and other receivables 7,242

7,364

Prepaid expenses and other 57

Income tax receivable 234 132

Property, plant and equipment 4,764

4,645

Intangible assets 14,747 14,747

Goodwill 20,171 20,540

Trade and other payables assumed (4,615)

(4,786

)

Income tax liabilities (142) —

Deferred and prepaid revenue and other liabilities assumed (374)

(615

)

Deferred tax liabilities (3,887)

(3,887

)

Non-controlling interest (462)

(462

)

41,000 41,000

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 30

3. Operating Segments

The Corporation's profit for the year are reported in two operating segments: Cable and other.

The Cable segment provides a wide range of Analogue and Digital Television, HSI and Telephony services primarily to residential customers.

It also provides business solutions, including data networking, Ethernet, hosting, HSI access and Voice over Internet Protocol (“VoIP”)

services, to small and medium sized businesses. The segment also provides data centre, managed IT and connectivity services for medium

and large enterprises and public sector customers, and high-performance Ethernet broadband connectivity services to carriers. This

segment's offerings includes the provision of physical space and power within its high security data centres and a new suite of managed IT

and infrastructure services as well as a full suite of connectivity services provisioned over its wholly-owned optical networks.

The Other segment is comprised of radio, advertising transit businesses sector, head office activities as well as inter-segment eliminations.

The activities of the Cable segment are carried out in Canada, in the US and in Europe, mostly in the UK, and the activities of the Other

segment are carried out in Canada.

The Corporation assesses the performance of each segment based on segment profit or loss. Transactions between segments are measured

at amounts agreed to between the parties.

The principal financial information per operating segment is presented in the table below:

Three months ended

Cable Other Consolidated

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $ $ $

Revenue

(1)

464,497

319,771

39,937 38,261

504,434 358,032

Operating expenses 249,365

167,110

34,495 32,476

283,860 199,586

Integration, restructuring and acquisition costs 2,101 — 59 —

2,160

—

Depreciation and amortization 103,383 61,680 1,422 1,293

104,805

62,973

Operating income 109,648 90,981 3,961 4,492

113,609

95,473

Financial expense 35,032 16,373 1,455 1,449 36,487 17,822

Income taxes 21,358 21,449 648 829 22,006 22,278

Profit for the period 53,258 53,159 1,858 2,214 55,116 55,373

Acquisition of property, plant and equipment 108,325 83,479 651 682

108,976

84,161

Acquisition of intangible and other assets 4,516

3,980

— —

4,516 3,980

(1) Revenue by geographic market includes $381,388 in Canada, $115,931 in the US and $7,115 in Europe.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 31

Nine months ended

Cable Other Consolidated

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $ $ $

Revenue

(1)

1,222,080

952,930

107,463 96,738 1,329,543 1,049,668

Operating expenses 654,477

515,218

101,944 91,225 756,421

606,443

Management fees – COGECO Inc. 9,569 9,485 (9,569) (9,485) — —

Integration, restructuring and acquisition costs 16,865 — 47 108 16,912 108

Depreciation and amortization 252,640

210,756

4,220 3,315 256,860

214,071

Operating income 288,529

217,471

10,821 11,575 299,350

229,046

Financial expense 79,726 47,990 4,306 3,720 84,032 51,710

Income taxes 54,927 45,669 1,663 2,321 56,590 47,990

Profit for the period from continuing operations 153,876

123,812

4,852 5,534 158,728

129,346

Profit for the period from discontinued operations — 55,446 — — — 55,446

Profit for the period 153,876

179,258

4,852 5,534 158,728

184,792

Total assets

(2)

5,233,590 2,908,079 202,402 195,840 5,435,992 3,103,919

Property, plant and equipment

(2)

1,751,785 1,322,093 21,086 21,811 1,772,871 1,343,904

Intangible assets

(2)

1,964,499 1,039,982 92,899 93,834 2,057,398 1,133,816

Goodwill

(2)

1,271,334

210,442

39,125 38,756 1,310,459

249,198

Acquisition of property, plant and equipment 286,457

240,406

2,559 2,755 289,016

243,161

Acquisition of intangible and other assets 13,650 10,570 — — 13,650 10,570

(1) Revenue by geographic market includes $1,110,256 in Canada, $209,851 in the US and $9,436 in Europe.

(2) At May 31, 2013 and August 31, 2012.

The following table sets out certain geographic market information at May 31, 2013:

Canada US Europe Total

$ $ $ $

Property, plant and equipment 1,433,425 292,962 46,484 1,772,871

Intangible assets 1,181,795 863,570 12,033 2,057,398

Goodwill 358,370 892,907 59,182 1,310,459

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 32

4. Operating Expenses

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Salaries, employee benefits and outsourced services 96,811 68,115 256,093

207,896

Service delivery costs

(1)

141,135

98,031 373,739

291,776

Customer related costs

(2)

20,713 14,456 54,764 47,606

Other external purchases

(3)

25,201 18,984 71,825 59,165

283,860

199,586 756,421

606,443

(1) Include cost of equipment sold, content and programming costs, payment to other carriers, data center expenses, franchise fees and network costs.

(2) Include advertising and marketing expenses, selling costs, billing expenses, bad debts and collection expenses.

(3) Include office building expenses, professional service fees, Canadian Radio-television and Telecommunications Commission (“CRTC”) fees and other

administrative expenses.

5. Depreciation and Amortization

Three months ended

Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Property, plant and equipment 91,496 57,561 227,805 198,371

Intangible assets 13,309 5,412 29,055 15,700

104,805

62,973 256,860 214,071

6. Financial Expense

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Interest on long-term debt 36,993 17,150 83,216 47,782

Net foreign exchange losses 186 81 924

1,091

Amortization of deferred transaction costs

(141

) 449 1,038

1,373

Capitalized borrowing costs

(995

) (492) (2,792)

(1,225

)

Other 444 634 1,646

2,689

36,487 17,822 84,032 51,710

7. Income Taxes

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Current 27,563 25,016 76,227 72,306

Deferred

(5,557

) (2,738) (19,637) (24,316)

22,006 22,278 56,590 47,990

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 33

The following table provides the reconciliation between income tax expense at the Canadian statutory federal and provincial income tax

rates and the consolidated income tax expense:

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Profit before income taxes 77,122 77,651 215,318 177,336

Combined income tax rate 25.47% 27.03% 26.60% 27.03%

Income tax expense at combined income tax rate 19,645 20,989 57,275 47,934

Adjustment for losses or profit subject to lower or higher tax rates 3,191 422 2,798 780

Decrease in income taxes from changes in tax legislation on partnership

income — — — (3,450)

Income taxes arising from non-deductible expenses 819 178 5,241 619

Tax impacts related to investments in foreign operations (3,501) — (6,908) —

Changes in valuation allowance (76) — (3,198) —

Other 1,928 689 1,382 2,107

Income tax expense at effective income tax rate 22,006 22,278 56,590 47,990

8. Earnings Per Share

The following table provides the reconciliation between basic and diluted earnings per share:

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Profit for the period from continuing operations attributable to owners of the

Corporation 18,902 19,303 54,288 45,337

Profit for the period from discontinued operations attributable to owners of the

Corporation — — — 17,825

Profit for the period attributable to owners of the Corporation 18,902 19,303 54,288 63,162

Weighted average number of multiple and subordinate voting shares

outstanding

16,725,074

16,719,727 16,725,745

16,725,519

Effect of dilutive incentive share units

107,124

112,471 107,810

109,097

Weighted average number of diluted multiple and subordinate voting shares

outstanding

16,832,198

16,832,198 16,833,555

16,834,616

Earnings per share

Basic

Profit for the period from continuing operations 1.13 1.15 3.25 2.71

Profit for the period from discontinued operations — — — 1.07

Profit for the period 1.13 1.15 3.25 3.78

Diluted

Profit for the period from continuing operations 1.12 1.15 3.22 2.69

Profit for the period from discontinued operations — — — 1.06

Profit for the period 1.12 1.15 3.22 3.75

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 34

9. Long-Term Debt

Maturity Interest rate May 31, 2013 August 31, 2012

% $ $

Parent Corporation

Term Revolving Facility

Revolving loans February 2017

(1)

3.22

(2)

75,870

73,848

Unsecured Notes November 2021 6.50 34,698

34,671

Finance lease January 2017 3.23

99 118

Subsidiaries

Term Revolving Facility

Revolving loan – US$420 million November 2017

(3)

2.03

(2)

435,456

—

Secured Credit Facilities

Revolving Facility

—

Revolving loan – £65 million January 2017 2.49

(2)

102,388

—

Revolving loan – US$21.7 million January 2017 2.19

(2)

22,499

—

UK Revolving Facility – £4.1 million January 2017 3.00

(2)

6,458 —

Senior Secured Notes

—

Series A – US$190 million October 2015 7.00

(4)

196,191 186,244

Series B October 2018 7.60 54,659 54,619

Senior Secured Debentures Series 1 June 2014 5.95 299,234 298,694

Senior Secured Debentures Series 2 November 2020 5.15 198,649 198,539

Senior Secured Debentures Series 3 February 2022 4.93 198,389 198,249

Senior Secured Debentures Series 4

May 2023 4.18 297,083

—

Senior Unsecured Debenture March 2018 5.94 99,821 99,850

Senior Unsecured Notes – US$400 million

May 2020 4.88 407,026

—

First Lien Credit Facilities

Term Loan A Facility – US$190 million November 2017 2.57 191,788

—

Term Loan B Facility – US$417.9 million November 2019 3.25 417,748

—

Revolving Facility – US$52.5 million November 2017 2.67 54,432

—

Finance leases March 2013 to January 2015 3.94

(5)

2,435 837

3,094,923 1,145,669

Less current portion 11,945 855

3,082,978 1,144,814

(1) On November 30, 2012, the Corporation amended its Term Revolving Facility. Under the term of the amendment, the maturity was extended by an

additional year and consequently, the Term Revolving Facility will mature on February 1, 2017.

(2) Interest rate on debt as at May 31, 2013, including applicable margin.

(3) On October 26, 2012, the Corporation's subsidiary, Cogeco Cable Inc., amended its Term Revolving Facility. Under the term of the amendment, the maturity

will be extended by an additional year and consequently the Term Revolving Facility will mature on November 22, 2017.

(4) Cross-currency swap agreements have resulted in an effective interest rate of 7.24% on the Canadian dollar equivalent of the US denominated debt.

(5) Weighted average interest rate on finance leases.

a) As a result of the acquisition of PEER 1 on January 31, 2013, the Corporation's subsidiary, Cogeco Cable Inc., concluded Secured

Credit Facilities totaling approximately $650 million with a syndicate of lenders in four tranches for a net proceed of $640.3 million

net of transaction costs of $2.8 million. The first tranche, a Canadian Term Facility amounting to $175 million, the second tranche,

a US Term Facility amounting to US$225 million, the third tranche, a Revolving Facility of $240 million and the fourth tranche, a

UK Revolving Facility of £7 million. The Revolving Facility is available in Canadian dollars, US dollars, British Pounds and Euros

and interest rates are based on Bankers' Acceptance, LIBOR Loans in US dollars, British Pounds or Euros, Prime Rate Loans or

Base Rate Loans in US dollars or British Pounds, plus the applicable margin. The UK Revolving Facility is available in British Pounds

and interest rates are based on British Pounds Base Rate Loans or British Pounds LIBOR Loans. The Secured Credit Facilities

will mature on January 27, 2017. The Secured Credit Facilities are indirectly secured by a first priority fixed and floating charge on

substantially all present and future real and personal property and undertaking of every nature and kind of Cogeco Cable and most

of its subsidiaries excluding ABB and its subsidiaries and certain immaterial subsidiaries (the "unrestricted subsidiaries"), and

provides for certain permitted encumbrances, including purchased money obligations, existing funded obligations and charges

granted by any subsidiary prior to the date when it becomes a subsidiary, subject to a maximum amount. The provisions under this

facility provides for restrictions on the operations and activities of Cogeco Cable but does not cover the unrestricted subsidiaries.

Generally, the most significant restrictions relate to permitted investments and dividends on multiple and subordinate voting shares,

as well as incurrence and maintenance of certain financial ratios primarily linked to operating income before amortization, financial

expense and total indebtedness.

On April 23, 2013, the Corporation's subsidiary, Cogeco Cable, reimbursed the Canadian Term Facility amounting $175 million and

the US Term Facility amounting US$225 million.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 35

b) On May 27, 2013, the Corporation's subsidiary, Cogeco Cable completed pursuant to a public debt offering, the issue of $300

million Senior Secured Debentures Series “4” (the “Debentures”) for a net proceed of $297.1 million net of transaction costs of $2.9

million. These Debentures mature on May 26, 2023 and bear interest at 4.175% per annum payable semi-annually. These Debentures

are indirectly secured by a first priority fixed and floating charge and a security interest on substantially all present and future real

and personal property and undertaking of every nature and kind of the Corporation and its subsidiaries except for the unrestricted

subsidiaries. The provisions under these Debentures provide for restrictions on the operations and activities of Cogeco Cable and

its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness,

dispositions and maintenance of certain financial ratios.

c) On April 23, 2013, the Corporation's subsidiary, Cogeco Cable completed a private placement of $410.4 million (US$400 million)

aggregate principal amount of Senior Unsecured Notes (the “2020 Notes”) for a net proceed of $402.6 million (US$392.4 million)

net of transaction costs of $7.8 million (US$7.6 million). These 2020 Notes mature on May 1, 2020 and bear interest at 4.875% per

annum payable semi-annually. These 2020 Notes are guaranteed on a senior unsecured basis, jointly and severally, by its

subsidiaries except for the unrestricted subsidiaries. The provisions under these 2020 Notes provide for restrictions on the operations

and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions

relate to permitted indebtedness, investments and distributions.

d) In connection with the acquisition of ABB by the Corporation's subsidiary, Cogeco Cable Inc., on November 30, 2012, Cogeco

Cable Inc., concluded through two of its US subsidiaries, First Lien Credit Facilities totaling US$710 in three tranches for a net

proceed of US$641.5 million net of transaction costs of US$18.5 million. The first tranche, a Term Loan A Facility will mature on

November 30, 2017, the second tranche, a Term Loan B Facility will mature on November 30, 2019 and the third tranche, a Revolving

Credit Facility will mature on November 30, 2017. Effective on December 31, 2013, the Term Loan A Facility is subject to quarterly

amortization of US$3 million in the first year, US$6 million in the second year and US$7.2 million in the third and fourth years.

Effective on December 31, 2012, the Term Loan B Facility is subject to quarterly amortization of 0.25% until its maturity date. In

addition to the fixed amortization schedule and commencing in the first quarter of fiscal 2015, loans under the Term Loan Facilities

shall be prepaid according to a Prepayment Percentage of excess cash flow generated during the prior fiscal year defined as

follows:

(i) 50% if the Consolidated First Lien Leverage Ratio is greater than or equal to 4.00 to 1.00;

(ii) 25% if the Consolidated First Lien Leverage Ratio is greater than or equal to 3.00 to 1.00 but less than 4.00

to 1.00; and

(iii) 0% if the Consolidated First Lien Leverage Ratio is less than 3.00 to 1.00.

The First Lien Credit Facilities are non-recourse to Cogeco Cable and its Canadian subsidiaries and PEER 1's subsidiaries and

are indirectly secured by a first priority fixed and floating charge on substantially all present and future real and personal property

and undertaking of every nature and kind of ABB and its subsidiaries. The provisions under these facilities provide for restrictions

on the operations and activities of ABB and its subsidiaries. Generally, the most significant restrictions relate to permitted

indebtedness and investments, distributions and maintenance of certain financial ratios.

On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the Term Loan A

Facility was converted into the Revolving Facility resulting in amounts borrowed under the two tranches of US$190 million and of

US$100 million, respectively, while the Term Loan B Facility remained the same. Interest rates on the First Lien Credit Facilities

are based on LIBOR plus the applicable margin, with a LIBOR floor for the Term Loan B Facility. The applicable margin was reduced

by 0.625% for the Revolving Facility and for the Term Loan A Facility and by 1.00% for the Term Loan B Facility. In addition, the

LIBOR floor for the Term Loan B Facility was reduced from 1.00% to 0.75%. All other terms and conditions remained the same. In

connection with the amendment, transaction costs of US$6.2 million were incurred.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 36

10. Share Capital

Authorized

Unlimited number of:

Preferred shares of first and second rank, issuable in series and non-voting, except when specified in the Articles of Incorporation of the

Corporation or in the Law.

Multiple voting shares, 20 votes per share.

Subordinate voting shares, 1 vote per share.

Issued and paid

May 31, 2013 August 31, 2012

$ $

1,842,860 multiple voting shares 12

14,989,338 subordinate voting shares 121,976

121,976

121,988

107,124 subordinate voting shares held in trust under the Incentive Share Unit Plan (112,471 at

August 31, 2012)

(4,219)

(4,052

)

117,769

117,936

During the first nine months of fiscal 2013, subordinate voting shares held in trust under the Incentive Share Unit Plan transactions were as

follows:

Number of shares Amount

Balance at August 31, 2012 112,471

4,052

Subordinate voting shares acquired 35,630

1,201

Subordinate voting shares distributed to employees (40,977)

(1,034

)

Balance at May 31, 2013 107,124

4,219

Dividends

For the nine-month period ended May 31, 2013, quarterly dividends of $0.19 per share, for a total of $0.57 per share, were paid to the holders

of multiple and subordinate voting shares, totaling $9.5 million, compared to quarterly dividends of $0.18 per share, for a total of $0.54 per

share or $9 million for the nine-month period ended May 31, 2012.

Share-based payment plans

The Corporation and its subsidiary, Cogeco Cable Inc., offer for certain executives Stock Option Plans, which are described in the Corporation’s

annual consolidated financial statements. During the nine-month periods ended May 31, 2013 and May 31, 2012, no stock options were

granted to employees by COGECO. Under the Stock Option Plan of the Corporation, no options were outstanding at May 31, 2013 and

August 31, 2012. However, for the nine-month period ended May 31, 2013, the Corporation's subsidiary, Cogeco Cable Inc., granted 207,142

stock options (91,961 in 2012) with an exercise price of $38.08 to $45.60 ($48.02 to $48.15 in 2012) of which 71,233 stock options (47,729

in 2012) were granted to COGECO’s employees. These options vest equally over a period of five years beginning one year after the day

such options are granted and are exercisable over ten years. During the three and nine-month periods ended May 31, 2013, Cogeco Cable

Inc. charged COGECO an amount of $99,000 and $275,000 ($83,000 and $232,000 in 2012) with respect to its options granted to COGECO’s

employees. As a result, a compensation expense of $200,000 and $549,000 ($168,000 and $483,000 in 2012) was recorded for the three

and nine-month periods ended May 31, 2013.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 37

The weighted average fair value of stock options granted by Cogeco Cable for the nine-month period ended May 31, 2013 was $7.77 ($11.30

in 2012) per option. The weighted average fair value of each option granted was estimated at the grant date for purposes of determining

stock-based compensation expense using the Black-Scholes option pricing model based on the following assumptions:

2013 2012

% %

Expected dividend yield 2.60 1.66

Expected volatility 26.59 26.85

Risk-free interest rate 1.49 1.74

Expected life (in years) 6.2 6.1

Under the Stock Option Plan of Cogeco Cable, the following options were granted and are outstanding at May 31, 2013:

Options

Weighted

average

exercise

price

Outstanding at August 31, 2012 609,686 34.80

Granted 207,142

39.19

Exercised

(1)

(32,447)

22.09

Cancelled (20,420)

42.18

Balance at May 31, 2013 763,961 36.33

Exercisable at May 31, 2013 436,344

33.19

(1) The weighted average share price for options exercised during the period was $42.03.

The Corporation and its subsidiary, Cogeco Cable Inc., also offer senior executive and designated employee Incentive Share Unit Plans (“ISU

Plans”), which are described in the Corporation’s annual consolidated financial statements. For the nine-month period ended May 31, 2013,

35,630 (35,542 in 2012) and 103,947 (60,479 in 2012) incentive share units (“ISUs”) were granted by the Corporation and its subsidiary,

respectively. The Corporation and its subsidiary establish the value of the compensation related to the ISUs granted based on the fair value

of the subordinate voting shares at the date of grant and a compensation expense is recognized over the vesting period, which is three years

less one day. Two trusts were created for the purpose of purchasing these shares on the stock market in order to protect against stock price

fluctuation. The Corporation and its subsidiary instructed the trustee to purchase 35,630 (35,542 in 2012) and 101,047 (61,815 in 2012)

subordinate voting shares on the stock market. These shares were purchased for cash consideration aggregating $1,201,000 ($1,740,000

in 2012) and $4,076,000 ($3,049,000 in 2012) and are held in trust for the participants until they are fully vested. The trusts, considered as

a special purpose entities, are consolidated in the Corporation’s financial statements with the value of the acquired shares presented as

subordinate voting shares held in trust under the ISU Plans in reduction of share capital or non-controlling interest. A compensation expense

of $978,000 and $2,804,000 ($848,000 and $2,100,000 in 2012) was recorded for the three and nine-month periods ended May 31, 2013,

respectively, related to these plans. During the three and nine-month periods ended May 31, 2013, Cogeco Cable Inc. charged COGECO

Inc. an amount of $117,000 and $336,000 ($105,000 and $285,000 in 2012), respectively, with respect to ISUs granted to COGECO's

employees.

Under the ISU Plan of the Corporation, the following ISUs were granted and are outstanding at May 31, 2013:

Outstanding at August 31, 2012

112,471

Granted 35,630

Distributed (40,977)

Outstanding at May 31, 2013

107,124

Under the ISU Plan of Cogeco Cable Inc., the following ISUs were granted and are outstanding at May 31, 2013:

Outstanding at August 31, 2012

149,802

Granted

103,947

Distributed (44,141)

Cancelled

(8,400

)

Outstanding at May 31, 2013

201,208

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 38

The Corporation and its subsidiary, Cogeco Cable Inc., offer Deferred Share Unit Plans (“DSU Plans”) for members of the Board of directors

which are described in the Corporation’s annual consolidated financial statements. For the nine-month period ended May 31, 2013, the

Corporation and its subsidiary issued respectively 8,139 and 5,573 deferred share units (“DSUs”) (6,435 and 4,446 in 2012) to the participants

in connection with the DSU Plans. A compensation expense of $275,000 and $556,000 ($108,000 and $256,000 in 2012) was recorded for

the three and nine-month periods ended May 31, 2013, respectively, for the increase in liability related to this plan.

Under the DSU Plan of the Corporation, the following DSUs were issued and are outstanding at May 31, 2013:

Outstanding at August 31, 2012 29,312

Issued

8,139

Redeemed

(7,174

)

Dividend equivalents 455

Outstanding at May 31, 2013 30,732

Under the DSU Plan of Cogeco Cable Inc., the following DSUs were issued and are outstanding at May 31, 2013:

Outstanding at August 31, 2012 20,491

Issued

5,573

Redeemed

(2,868

)

Dividend equivalents 424

Outstanding at May 31, 2013 23,620

11. Statements of Cash Flows

a) Changes in non-cash operating activities

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Trade and other receivables

(3,835

) (2,150) (6,942)

(4,770

)

Prepaid expenses and other

(378

) (1,705) 427

(2,212

)

Trade and other payables

(3,862

) (20,850) (80,722) (87,952)

Provisions 122 3,907 (960) 12,404

Deferred and prepaid revenue and other liabilities

2,510

291 8,003

(2,758

)

(5,443

) (20,507) (80,194) (85,288)

b) Cash and cash equivalents

May 31, 2013 August 31, 2012

$ $

Cash 39,643 65,574

Cash equivalents

(1)

— 149,949

39,643 215,523

(1) At August 31, 2012, Banker’s acceptances for a total of $149.9 million, bearing interest of 1.10% with maturity dates ranging from September 4, 2012 to

September 17, 2012.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 39

12. Employee Benefits

The Corporation and its subsidiaries offer their employees contributory defined benefit pension plans, defined contribution pension plans or

a collective registered retirement savings plans, which are described in the Corporation’s annual consolidated financial statements. The

total expense related to these plans is as follows:

Three months ended Nine months ended

May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012

$ $ $ $

Contributory defined benefit pension plans

1,193

974 3,566

4,013

Defined contribution pension plans and collective registered retirement

savings plans

1,709

2,238 5,335 4,912

2,902

3,212 8,901 8,925

13. Financial instruments

a) Financial risk management

Management’s objectives are to protect COGECO Inc. and its subsidiaries against material economic exposures and variability of results,

and against certain financial risks including credit, liquidity, interest rate and foreign exchange risk.

Credit risk

Credit risk represents the risk of financial loss for the Corporation if a customer or counterparty to a financial asset fails to meet its contractual

obligations. The Corporation is exposed to credit risk arising from the derivative financial instruments, cash and cash equivalents and trade

accounts receivable, the maximum exposure of which is represented by the carrying amounts reported on the statement of financial position.

Credit risk from derivative financial instruments arises from the possibility that counterparties to the cross-currency swaps may default on

their obligations in instances where these agreements have positive fair values for the Corporation. The Corporation reduces this risk by

completing transactions with financial institutions that carry a credit rating equal to or superior to its own credit rating. The Corporation

assesses the creditworthiness of the counterparties in order to minimize the risk of counterparties default under the agreements. At May 31,

2013, management believes that the credit risk relating to its derivative financial instruments is minimal, since the lowest credit rating of the

counterparties to the agreements is “BBB+” by Standard & Poor’s rating services (“S&P”) and “A (high)” by Dominion Bond Rating Services

(“DBRS”).

Cash and cash equivalents consist mainly of highly liquid money market short-term investments. The Corporation has deposited the cash

and cash equivalents with reputable financial institutions, for which management believes the risk of loss to be remote. At May 31, 2013,

management believes that the credit risk relating to its short-term investments is minimal, since the credit rating related to such investment

is “A-1+” by S&P.

The Corporation is also exposed to credit risk in relation to its trade accounts receivable. To mitigate such risk, the Corporation continuously

monitors the financial condition of its customers and reviews the credit history or worthiness of each new large customer. At May 31, 2013

and August 31, 2012, no customer balance represented a significant portion of the Corporation’s consolidated trade accounts receivable.

The Corporation establishes an allowance for doubtful accounts based on specific credit risk of its customers by examining such factors as

the number of overdue days of the customer’s balance outstanding as well as the customer’s collection history. The Corporation believes

that its allowance for doubtful accounts is sufficient to cover the related credit risk. The Corporation has credit policies in place and has

established various credit controls, including credit checks, deposits on accounts and advance billing, and has also established procedures

to suspend the availability of services when customers have fully utilized approved credit limits or have violated existing payment terms.

Since the Corporation has a large and diversified clientele dispersed throughout its market areas in Canada, in the US and in Europe, there

is no significant concentration of credit risk.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 40

The following table provides further details on the Corporation's trade accounts receivable, net of allowance for doubtful accounts:

May 31, 2013 August 31, 2012

$ $

Trade accounts receivable 113,340 95,170

Allowance for doubtful accounts (6,303)

(4,156

)

107,037 91,014

Other accounts receivable 20,857

7,613

127,894 98,627

Trade accounts receivable past due is defined as amount outstanding beyond normal credit terms and conditions for the respective customers.

A large portion of the Corporation’s customers are billed and pay before their services are rendered. The Corporation considers amount

outstanding at the due date as trade accounts receivable past due. The following table provides further details on trade accounts receivable

past due net of allowance for doubtful accounts at May 31, 2013 and August 31, 2012:

May 31, 2013 August 31, 2012

$ $

Less than 60 days overdue 35,642 23,906

60 to 90 days overdue 2,084 2,828

More than 90 days overdue 1,307 1,745

39,033 28,479

Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The Corporation manages

liquidity risk through the management of its capital structure and access to different capital markets. It also manages liquidity risk by

continuously monitoring actual and projected cash flows to ensure sufficient liquidity to meet its obligations when due. At May 31, 2013, the

available amount of the Corporation’s Term Revolving Facility and Cogeco Cable Inc.'s revolving credit facilities was $23.9 million and $429.3

million, respectively. Management believes that the committed revolving credit facilities will, until their maturities in January, February and

November 2017, provide sufficient liquidity to manage its long-term debt maturities and support working capital requirements. Two subsidiaries

of Cogeco Cable Inc. also benefits from a Revolving Facility of US$100 million related to the acquisition of ABB, of which US$53.7million

($55.7 million) was used at May 31, 2013.

The following table summarizes the contractual maturities of the financial liabilities and related capital amounts:

Contractual cash flows

Carrying

amount

2013

2014

2015

2016

2017

Thereafter

Total

Trade and other payables

(1)

204,879 204,879 — — — — —

204,879

Long-term debt

(2)

3,092,389 1,089

313,686

26,127 229,962 241,559 2,316,792 3,129,215

Balance due on business combinations

2,875 2,000 875 — — — —

2,875

Other liabilities

2,714 —

1,263

1,253 1,253 1,253

44 5,066

Derivative financial instruments

2,380 — — — 4,883 — —

4,883

Finance leases

(3)

2,534 420

1,347

808 29 10 —

2,614

3,307,771 208,388

317,171

28,188 236,127 242,822 2,316,836 3,349,532

(1) Excluding accrued interest.

(2) Principal excluding finance leases.

(3) Including interest.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 41

The following table is a summary of interest payable on long-term debt (excluding interest on finance leases) that is due for each of the

next five years and thereafter, based on the principal amount and interest rate prevailing on the outstanding debt at May 31, 2013 and

their respective maturities:

2013 2014 2015 2016 2017 Thereafter Total

$ $ $ $ $ $ $

Interest payments on long-term debt 22,621 131,818

113,413

105,703 94,585 271,807

739,947

Interest receipts on derivative financial

instruments

— (13,789) (13,789) (6,895) — — (34,473)

Interest payments on derivative financial

instruments

— 14,614 14,614 7,307 — — 36,535

22,621 132,643

114,238

106,115 94,585 271,807

742,009

Interest rate risk

The Corporation is exposed to interest rate risks for both fixed interest rate and floating interest rate instruments. Fluctuations in interest

rates will have an effect on the valuation and collection or repayment of these instruments. At May 31, 2013, all of the Corporation’s long-

term debt was at fixed rate, except for the Corporation’s term and revolving facilities. The sensitivity of the Corporation’s annual financial

expense to a variation of 1% in the interest rate applicable to term and revolving facilities is approximately $10.9 million based on the current

debt at May 31, 2013.

Foreign exchange risk

The Corporation is exposed to foreign exchange risk related to its long-term debt denominated in US dollars and British Pounds. In order

to mitigate this risk, the Corporation has established guidelines whereby currency swap agreements can be used to fix the exchange rates

applicable to its US dollar denominated long-term debt. All such agreements are exclusively used for hedging purposes. Accordingly, on

October 2, 2008, the Corporation's subsidiary, Cogeco Cable Inc., entered into cross-currency swap agreements to set the liability for interest

and principal payments on its US$190 million Senior Secured Notes Series A issued on October 1, 2008. These agreements have the effect

of converting the US interest coupon rate of 7.00% per annum to an average Canadian dollar interest rate of 7.24% per annum. The exchange

rate applicable to the principal portion of the debt has been fixed at $1.0625. The Corporation elected to apply cash flow hedge accounting

on these derivative financial instruments. The impact of a 10% change in the exchange rate of the US dollar and British Pounds into Canadian

dollars would change financial expense by approximately $3.3 million based on the current debt at May 31, 2013.

The Corporation is also exposed to foreign exchange risk on cash and cash equivalents, bank indebtedness and trade and other payables

denominated in US dollars, Euros or British Pounds. The Corporation’s exposure to foreign currency risk is as follows:

May 31, 2013 August 31, 2012

US Euro

British

Pound

US Euro

$ $ $ $ $

Financial assets (liabilities)

Cash and cash equivalents 4,922 1,260 147 3,630

1,243

Trade and other payables and provisions (6,360) (24) — (21,569)

(7,068

)

(1,438) 1,236 147 (17,939)

(5,825

)

Due to their short-term nature, the risk arising from fluctuations in foreign exchange rates is usually not significant. The impact of a 10%

fluctuation in the foreign exchange rates (US dollar, Euro and British Pound) would would not change financial expense.

Furthermore, Cogeco Cable’s net investment in foreign operations is exposed to market risk attributable to fluctuations in foreign currency

exchange rates, primarily changes in the values of the Canadian dollar versus the US dollar and British Pound. This risk was mitigated since

the major part of the purchase price for ABB and PEER 1 were borrowed directly in US dollars and British Pounds. These debts were

designated as hedges of net investments in foreign operations. At May 31 2013, the net investment for ABB and for PEER 1 amounted to

US$1.1 billion and £66.6 million while long-term debt was of US$841.7 million and £69.1 million.The exchange rate used to convert the US

dollar currency and British Pound currency into Canadian dollars for the statement of financial position accounts at May 31, 2013 was

$1.0368 per US dollar and $1.5752 per British Pound. The impact of a 10% change in the exchange rate of the US dollar and British Pound

into Canadian dollars would change other comprehensive income by approximately $27.5 million.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 42

b) Fair value of financial instruments

Fair value is the amount at which willing parties would accept to exchange a financial instrument based on the current market for instruments

with the same risk, principal and remaining maturity. Fair values are estimated at a specific point in time, by discounting expected cash flows

at rates for debts of the same remaining maturities and conditions. These estimates are subjective in nature and involve uncertainties and

matters of significant judgement, and therefore, cannot be determined with precision. In addition, income taxes and other expenses that

would be incurred on disposition of these financial instruments are not reflected in the fair values. As a result, the fair values are not necessarily

the net amounts that would be realized if these instruments were settled. The Corporation has determined the fair value of its financial

instruments as follows:

a) The carrying amount of cash and cash equivalents, trade and other receivables, bank indebtedness, trade and other payables and

balance due on business combinations approximates fair value because of the short-term nature of these instruments.

b) Interest rates under the terms of the Corporation’s term and revolving facilities are based on Bankers’ acceptance, LIBOR, EURIBOR,

bank prime rate loan or US or British Pounds base rate loan plus applicable margin. Therefore, the carrying value approximates fair

value for the term and revolving facilities, since these facilities have conditions similar to those currently available to the Corporation.

c) The fair value of the Senior Secured Debentures Series 1, 2, 3, and 4, Senior Secured Notes Series A and B, Senior Unsecured Notes

and Senior Unsecured Debenture are based upon current trading values for similar financial instruments.

d) The fair values of finance leases are not significantly different from their carrying amounts.

The carrying value of all the Corporation’s financial instruments approximates fair value, except as otherwise noted in the following table:

May 31, 2013 August 31, 2012

Carrying value Fair value Carrying value Fair value

$ $ $ $

Long-term debt 3,094,923 3,215,827 1,145,669 1,228,324

All financial instruments recognized at fair value on the consolidated statement of financial position must be measured based on the three

fair value hierarchy levels, which are as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices)

or indirectly (i.e., derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Corporation considers that its derivative financial instruments are classified as Level 2 under the fair value hierarchy. The fair value of

derivative financial instruments are estimated using valuation models that reflect projected future cash flows over contractual terms of the

derivative financial instruments and observable market data, such as interest and currency exchange rate curves.

c) Capital management

The Corporation’s objectives in managing capital are to ensure sufficient liquidity to support the capital requirements of its various businesses,

including growth opportunities. The Corporation manages its capital structure and makes adjustments in light of general economic conditions,

the risk characteristics of the underlying assets and the Corporation’s working capital requirements. Management of the capital structure

involves the issuance of new debt, the repayment of existing debts using cash generated by operations and the level of distribution to

shareholders.

The capital structure of the Corporation is composed of shareholders’ equity, cash and cash equivalents, bank indebtedness, long-term debt,

balance due on business combinations and assets or liabilities related to derivative financial instruments.

The provisions of the financing agreements provide for restrictions on the operations and activities of the Corporation. Generally, the most

significant restrictions relate to permitted investments and dividends on multiple and subordinate voting shares, as well as the maintenance

of certain financial ratios primarily linked to the operating income before depreciation and amortization, financial expense and total

indebtedness. At May 31, 2013 and August 31, 2012 the Corporation was in compliance with all of its debt covenants and was not subject

to any other externally imposed capital requirements.

COGECO INC.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(unaudited)

(amounts in tables are in thousands of Canadian dollars, except number of shares and per share data)

Condensed Interim Consolidated Financial Statements COGECO INC. Q3 2013 43

The following table summarizes certain of the key ratios used to monitor and manage the Corporation’s capital structure:

May 31, 2013 August 31, 2012

Net senior indebtedness

(1)(2)

/ operating income before depreciation and amortization

(3)

2.9 1.3

Net indebtedness

(2)(4)

/ operating income before depreciation and amortization

(3)

3.7 1.6

Operating income before depreciation and amortization

(3)

/ financial expense

(3)

7.7 8.8

(1) Net senior indebtedness is defined as the total of bank indebtedness, principal on long-term debt and obligations under derivative financial instruments,

less cash and cash equivalents and principal on Senior Unsecured Debenture and Senior Unsecured Notes.

(2) Excluding ABB’s cash and cash equivalents and non-recourse First Lien Credit Facilities at May 31, 2013.

(3) Calculation based on operating income before depreciation and amortization and financial expense for the twelve-month period ended May 31, 2013

and August 31, 2012 excluding ABB and including PEER 1 results for the four-month period ended May 31, 2013.

(4) Net indebtedness is defined as the total of bank indebtedness, principal on long-term debt, balance due on business combinations and obligations

under derivative financial instruments, less cash and cash equivalents.

14. Disposal of Subsidiary and Discontinued Operations

On February 29, 2012, the Corporation's subsidiary, Cogeco Cable Inc., completed the sale of its Portuguese subsidiary, Cabovisão –

Televisão por Cabo, S.A. As a result of the sale and in accordance with IFRS 5 – Non-Current Assets Held for Sale and Discontinued

Operations, the Corporation reclassified the prior year results and cash flows of these operations, up to the date of disposal, as discontinued

operations.

The profit or loss of the discontinued operations for the nine-month period ended May 31, 2012 were as follows:

Revenue 80,546

Operating expenses 70,247

Depreciation and amortization 2,814

Operating income 7,485

Financial income 155

Gain on disposal 48,215

Profit before income taxes 55,855

Income taxes 409

Profit for the period 55,446

The cash flows of the discontinued operations for the nine-month period ended May 31, 2012 were as follows:

Net cash flows from operating activities 13,637

Net cash flows from investing activities 36,826

Effect of exchange rate changes on cash and cash equivalents denominated in a foreign currency

(866

)

Net increase in cash and cash equivalents 49,597

15. Subsequent Events

On July 5, 2013, the Corporation's subsidiary, Cogeco Cable Inc., reduced its Term Revolving Facility from $750 million to $600 million and

its Revolving Facility of its Secured Credit Facilities from $240 million to $190 million.

On June 27, 2013, the Corporation's subsidiary, Cogeco Cable Inc., completed, pursuant to a private placement, the issuance of US$215

million Senior Secured Notes bearing interest at 4.30% payable semi-annually and maturing on June 16, 2025. The net proceeds from this

offering along with drawings under Cogeco Cable Inc.'s credit facilities will be used to repay, on July 29, 2013, all the outstanding amount

of $300 million Senior Secured Debentures Series 1, due on June 9, 2014.

Cable segment customer statistics COGECO INC. Q3 2013 44

CABLE SEGMENT CUSTOMER STATISTICS

May 31,

2013

February 28,

2013

November 30,

2012

August 31,

2012

May 31,

2012

Primary service units

(1)

2,470,164 2,473,495 2,469,393 1,969,133 1,962,174

CANADA

1,981,290 1,984,555 1,984,213 1,969,133 1,962,174

488,874 488,940

(2)

485,180

(2)

0 0

Television service customers

1,079,285 1,087,692 1,098,352 863,115 868,873

CANADA

845,344 852,707 861,039 863,115 868,873

Penetration as a percentage of homes passed 50.7% 51.4% 52.1% 52.4% 52.9%

US 233,941 234,985 237,313 0 0

Penetration as a percentage of homes passed 45.3% 45.5% 46.0% 0 0

Digital Television service customers

924,155 922,703 922,576 771,503 765,585

CANADA 779,950 778,728 780,724 771,503 765,585

Penetration as a percentage of homes passed

46.8% 46.9% 47.2% 46.8% 46.6%

144,205 143,975 141,852 0 0

Penetration as a percentage of homes passed

27.9% 27.9% 27.5% 0 0

Analogue Television service customers

155,130 164,989 175,776 91,612 103,288

CANADA

65,394 73,979 80,315 91,612 103,288

Penetration as a percentage of homes passed

3.9% 4.5% 4.9% 5.6% 6.3%

89,736 91,010 95,461 0 0

Penetration as a percentage of homes passed 17.4% 17.6% 18.5% 0 0

High Speed Internet service customers

826,495 824,144 814,932 634,534 628,852

CANADA

650,325 649,165 645,379 634,534 628,852

Penetration as a percentage of homes passed

39.0% 39.1% 39.0% 38.5% 38.3%

176,170 174,979 169,553 0 0

Penetration as a percentage of homes passed

34.1% 33.9% 32.9% 0 0

Telephony service customers

564,384 561,659 556,109 471,484 464,449

CANADA 485,621 482,683 477,795 471,484 464,449

Penetration as a percentage of homes passed

29.1% 29.1% 28.9% 28.6% 28.3%

78,763 78,976 78,314 0 0

Penetration as a percentage of homes passed

15.2% 15.3% 15.2% 0 0

(1) Represents the sum of Television, High Speed Internet (“HSI”) and Telephony service customer.

(2) In the third quarter of fiscal 2013, PSU from ABB at November 30, 2012 and February 28, 2013 have been adjusted downwards to comply with Cogeco Cable's

and Canadian practices mostly related to reporting the number of hotels and hotel units.

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Press release details

COGECO announces solid financial results for the third quarter of fiscal 2013

SUSTAINABILITY

Cogeco Fund

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