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COGECO Announces Strong Financial Results for the Second Quarter of Fiscal 2013

- 35.6% growth of its operating income before depreciation and amortization(1)

MONTREAL, QUEBEC -- (Marketwired) -- 04/11/13 -- Today, COGECO Inc. (TSX:CGO) ("COGECO" or the "Corporation") announced its financial results for the second quarter of fiscal 2013, ended February 28, 2013, in accordance with International Financial Reporting Standards ("IFRS").

For the second quarter and first six months of fiscal 2013, which include three month operating results of Atlantic Broadband ("ABB") and one month for Peer 1 Network Enterprises, Inc. ("PEER 1"):


--  Revenue increased by 32.7% to reach $458.5 million, and by 19.3% to
    reach $825.1 million; 
    
--  Operating income before depreciation and amortization increased by 35.6%
    to $196.0 million when compared to the second quarter of fiscal 2012,
    and by 23.8% to $352.5 million when compared to the first half of the
    prior year; 
    
--  Profit for the period from continuing operations amounted to $56.5
    million in the second quarter when compared to $29.4 million for the
    same period of the previous fiscal year. Profit progression for the
    quarter is mostly attributable to the operating income before
    depreciation and amortization increase coming primarily from the
    acquisitions, in the Cable segment, of ABB and PEER 1, partly offset by
    the acquisition costs and the financial expense increases both related
    to ABB and PEER 1. For the first half of fiscal 2013, profit for the
    period from continuing operations amounted to $103.6 million when
    compared to $74.0 million for the first half of fiscal 2012. The
    increase for the six-month period ended February 28, 2013 is mostly
    attributable to the increase in operating income before depreciation and
    amortization coming primarily from the acquisition of ABB, partly offset
    by the acquisition costs and the financial expense increases both
    related to ABB and PEER 1 and income tax expense increase; 
    
--  Profit for the period amounted to $56.5 million in the second quarter
    when compared to $81.5 million for the same period of the previous
    fiscal year. For the first half of fiscal 2013, profit for the period
    amounted to $103.6 million when compared to $129.4 million for the
    comparable period of prior year. The decline for both periods is mostly
    attributable to the last year's profit from the Portuguese subsidiary,
    Cabovisao - Televisao por Cabo, S.A. ("Cabovisao"), reported as
    discontinued operations and disposed of on February 29, 2012, partly
    offset by the increases of operating income before depreciation and
    amortization, financial expense and acquisition costs all related to ABB
    and PEER 1 and the income tax expense increase; 
    
--  Free cash flow(1) reached $34.4 million for the second quarter compared
    to $18.0 million in the comparable quarter of the prior year. For the
    six months, free cash flow amounted to $53.0 million, compared to $44.3
    million in the first half of fiscal 2012. The increases in free cash
    flow over the prior year are due to the improvement of operating income
    before depreciation and amortization, partly offset by the increase in
    financial expense, the acquisition costs related to ABB and PEER 1
    acquisitions 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
    second quarter of fiscal 2012. Dividend payments in the first six months
    totaled $0.38 per share in fiscal 2013, compared to $0.36 per share in
    fiscal 2012; 
    
--  In the Cable segment, fiscal 2013 second-quarter primary service units
    ("PSU")(1)  grew by 7,463 and by 22,543 in the first six months of
    fiscal 2013. At February 28, 2013, consolidated PSU amounted to
    2,486,350 of which 1,984,555 comes from the Canadian cable services
    segment and 501,795 from the American cable services segment; 
    
--  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. 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. 

"We are satisfied with the favourable results obtained for the second 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, both organic and through acquisition. Results for ABB's first quarter as a part of Cogeco Cable had been in line with expectations. I am confident in this subsidiary's ongoing ability to perform and contribute favourably to Cogeco's objectives," continued Louis Audet.

"Regarding Cogeco Diffusion Inc., we are pleased with our radio business ratings confirming its leadership in the Montreal market and good performance in most of our other markets across the province of Quebec. Furthermore, our transit advertising business, Cogeco Metromedia, is delivering results according to plan," concluded Louis Audet.


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

SHAREHOLDERS' REPORT

Three and six-month periods ended February 28, 2013

FINANCIAL HIGHLIGHTS


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                      Quarters ended              Six months ended          
(in thousands of                                                            
 dollars, except  February  February            February  February          
 PSU growth,           28,       29,                 28,       29,          
 percentages and      2013      2012   Change       2013      2012   Change 
 per share data)         $         $        %          $         $        % 
----------------------------------------------------------------------------
Operations                                                                  
Revenue            458,501   345,613     32.7    825,109   691,636     19.3 
Operating income                                                            
 before                                                                     
 depreciation                                                               
 and                                                                        
 amortization(1)   195,968   144,518     35.6    352,548   284,779     23.8 
Operating income   102,464    58,931     73.9    185,741   133,573     39.1 
Profit for the                                                              
 period from                                                                
 continuing                                                                 
 operations         56,517    29,449     91.9    103,612    73,973     40.1 
Profit for the                                                              
 period from                                                                
 discontinued                                                               
 operations              -    52,047        -          -    55,446        - 
Profit for the                                                              
 period             56,517    81,496    (30.7)   103,612   129,419    (19.9)
Profit for the                                                              
 period                                                                     
 attributable to                                                            
 owners of the                                                              
 Corporation        16,899    25,089    (32.6)    35,386    43,859    (19.3)
----------------------------------------------------------------------------
                                                                            
Cash Flow                                                                   
Cash flow from                                                              
 operating                                                                  
 activities        157,095   126,455     24.2    151,090   136,025     11.1 
Cash flow from                                                              
 operations(1)     140,413   105,153     33.5    242,203   209,892     15.4 
Acquisitions of                                                             
 property, plant                                                            
 and equipment,                                                             
 intangible and                                                             
 other assets      106,019    87,186     21.6    189,174   165,590     14.2 
Free cash                                                                   
 flow(1)            34,394    17,967     91.4     53,029    44,302     19.7 
----------------------------------------------------------------------------
                                                                            
Financial                                                                   
 Condition(2)                                                               
Property, plant                                                             
 and equipment           -         -        -  1,752,195 1,343,904     30.4 
Total assets             -         -        -  5,406,525 3,103,919     74.2 
Indebtedness(3)          -         -        -  3,137,780 1,180,971        - 
Equity                                                                      
 attributable to                                                            
 owners of the                                                              
 Corporation             -         -        -    430,130   397,799      8.1 
----------------------------------------------------------------------------
                                                                            
Primary service                                                             
 units ("PSU")                                                              
 growth(4)           7,463    12,280    (39.2)    22,543    58,459    (61.4)
----------------------------------------------------------------------------
                                                                            
Per Share                                                                   
 Data(5)                                                                    
Earnings per                                                                
 share                                                                      
 attributable to                                                            
 owners of the                                                              
 Corporation                                                                
  From                                                                      
   continuing                                                               
   and                                                                      
   discontinued                                                             
   operations                                                               
    Basic             1.01      1.50    (32.7)      2.12      2.62    (19.1)
    Diluted           1.00      1.49    (32.9)      2.10      2.61    (19.5)
  From                                                                      
   continuing                                                               
   operations                                                               
    Basic             1.01      0.50        -       2.12      1.56     35.9 
    Diluted           1.00      0.50        -       2.10      1.55     35.5 
  From                                                                      
   discontinued                                                             
   operations                                                               
    Basic                -      1.00        -          -      1.07        - 
    Diluted              -      0.99        -          -      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 February 28, 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 six-month periods ended February 28, 2013

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 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 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.

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 sustained corporate growth and continuous improvement of networks and equipment. 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 six-month period ended February 28, 2013, operating income before depreciation and amortization increased by 23.8% when compared to the same period of fiscal 2012 to reach $352.5 million. As a result of the acquisition of Peer 1 Network Enterprises, Inc. ("PEER 1") in the Cable segment, management revised its January 14, 2013 projections for fiscal 2013. Operating income before depreciation and amortization is now expected to reach $782 million from $750 million. For further details, please consult the fiscal 2013 revised projections in the "Fiscal 2013 financial guidelines" section.

FREE CASH FLOW

For the six-month period ended February 28, 2013, COGECO reports free cash flow of $53 million, compared to $44.3 million for the first six months of the previous fiscal year, representing an increase of $8.7 million. This variance is mostly attributable to the improvement of operating income before depreciation and amortization, partly offset by the increase in financial expense, the acquisition costs related to Atlantic Broadband ("ABB") and PEER 1 acquisitions as well as the increase in acquisition of property, plant and equipment. Giving effect to the acquisition of PEER 1, management also revised its free cash flow projections from $175 million to $150 million as a result of acquisitions of property, plant and equipment, intangible and other assets exceeding cash flow generated by PEER 1, additional integration, restructuring and acquisition costs of $9 million as well as additional financial expense of $17 million both related to this acquisition. For further details, please consult the fiscal 2013 revised projections in the "Fiscal 2013 financial guidelines" section.

CABLE SEGMENT

PSU growth and penetration of service offerings

During the six-month period ended February 28, 2013, PSU reach 2,486,350 of which 1,984,555 comes from the Canadian cable services segment and 501,795 from the American cable services segment. In the American cable services segment, PSU increased by 7,121 in the quarter, stemming primarily from the Television and HSI services. In the Canadian cable services segment, PSU increased at a lower pace to 342 when compared to 12,280 PSU for the comparable period of the prior year, mainly as a result of service category maturity and 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 winter 2013 survey in the Montreal 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 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. 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 November 30, 2012, Cogeco Cable completed the acquisition of ABB, an independent cable system operator formed in 2003, serving about 495,000 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.


(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.                                           

OPERATING AND FINANCIAL RESULTS

OPERATING RESULTS


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                      Quarters ended              Six months ended          
                  February  February            February  February          
                       28,       29,                 28,       29,          
                      2013      2012    Change      2013      2012    Change
(in thousands of                                                            
 dollars, except                                                            
 percentages)            $         $         %         $         $         %
----------------------------------------------------------------------------
Revenue            458,501   345,613      32.7   825,109   691,636      19.3
Operating                                                                   
 expenses          262,533   201,095      30.6   472,561   406,857      16.1
----------------------------------------------------------------------------
Operating income                                                            
 before                                                                     
 depreciation                                                               
 and                                                                        
 amortization      195,968   144,518      35.6   352,548   284,779      23.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------

REVENUE

Fiscal 2013 second-quarter revenue increased by $112.9 million or 32.7%, to reach $458.5 million, when compared to the same period last year. For the first six months, revenue amounted to $825.1 million, an increase of $133.5 million, or 19.3% when compared to the first six months of fiscal 2012. Revenue increased for both periods mainly attributable to the operating results of the Cable segment and the revenue generated by Metromedia CMR Plus Inc. ("Metromedia"), acquired during the second quarter of fiscal 2012.

In the Cable segment, fiscal 2013 second-quarter revenue increased by $111.9 million, or 35.2%, to reach $429.7 million, when compared to the same period last year. For the first six months, revenue amounted to $757.6 million, an increase of $124.4 million, or 19.7% 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 second quarter of fiscal 2013, operating expenses increased by $61.4 million, to reach $262.5 million, an increase of 30.6% compared to the prior year. For the first half of the fiscal year, operating expenses amounted to $472.6 million, an increase of $65.7 million, or 16.1%, when compared to the same period of fiscal 2012. The increase in operating expenses is mainly attributable to the Cable segment operating results.

Operating expenses in the Cable segment for the second quarter, increased by $59.3 million, to reach $230.9 million, an increase of 34.5% compared to the prior year. For the first half of the fiscal year, operating expenses amounted to $405.1 million, an increase of $57 million, or 16.4%, 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 grew by $51.5 million, or 35.6%, to reach $196.0 million in the second quarter and by $67.8 million, or 23.8% to reach $352.5 million for the first six 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              Six months ended          
                  February  February            February  February          
                       28,       29,                 28,       29,          
                      2013      2012    Change      2013      2012    Change
(in thousands of                                                            
 dollars, except                                                            
 percentages)            $         $         %         $         $         %
----------------------------------------------------------------------------
Depreciation and                                                            
 amortization       86,014    85,479       0.6   152,055   151,098       0.6
Financial                                                                   
 expense            30,531    16,110      89.5    47,545    33,888      40.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------

For the three and six-month periods ended February 28, 2013, depreciation and amortization expense was essentially the same at $86.0 million and $152.1 million, respectively, compared to $85.5 million and $151.1 million for the same periods of the prior year, respectively, resulting mainly from Cogeco Cable's recent acquisitions of ABB and PEER 1 ("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.

Fiscal 2013 second-quarter financial expense increased by $14.4 million, or 89.5%, at $30.5 million when compared to $16.1 million in fiscal 2012 second-quarter. For the first six months of fiscal 2013, financial expense increased by $13.7 million, or 40.3%, at $47.5 million, compared to $33.9 million in the prior year. Financial expense increased in both periods as a result of the cost of financing related to the recent acquisitions.

INCOME TAXES

For the three and six-month periods ended February 28, 2013, income tax expense amounted to $15.4 million and $34.6 million, respectively, compared to $13.4 million and $25.7 million, respectively, for the comparable periods in the prior year. These increases are mostly attributable to the improvement in operating income before depreciation and amortization and by income taxes reductions, in fiscal 2012, from the implementation of certain tax measures of the 2011 federal budget limiting the tax deferrals for corporations with a significant interest in a partnership, partly offset by the increase in financial expense and by the efficient tax structure resulting from the recent acquisitions in the Cable segment.

PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS

For the three-month period ended February 28, 2013, profit for the period from continuing operations amounted to $56.5 million of which $16.9 million, or $1.01 per share is attributable to owners of the Corporation, compared to a profit for the period from continuing operations of $29.4 million of which $8.4 million or $0.50 per share is attributable to owners of the Corporation for the comparable period. For the six-month period ended February 28, 2013, profit for the period from continuing operations amounted to $103.6 million of which $35.4 million, or $2.12 per share is attributable to owners of the Corporation, compared to a profit for the period from continuing operations of $74.0 million of which $26.0 million, or $1.56 per share is attributable to owners of the corporation for the comparable period. Profit for the period from continuing operations progression for the quarter and the first half of fiscal 2013 is mostly attributable to the increase in operating income before depreciation and amortization, partly offset by the acquisition costs related to the recent acquisitions and the financial expense and income tax expenses increases explained above.

PROFIT FOR THE PERIOD

For the three and six-month periods ended February 28, 2013, profit for the period amounted to $56.5 million and $103.6 million, respectively, compared to $81.5 million and $129.4 million for the comparable periods. Fiscal 2013 second-quarter profit for the period attributable to owners of the Corporation amounted to $16.9 million, or $1.01 per share, compared to $25.1 million, or $1.50 per share, in the second quarter of fiscal 2012. For the six-month period ended February 28, 2013, profit for the period attributable to owners of the Corporation amounted to $35.4 million, or $2.12 per share, compared to $43.9 million, or $2.62 per share for the comparable period of fiscal 2012.The decline for both periods is mostly attributable to last year's profit from the Portuguese subsidiary, Cabovisao - Televisao por Cabo, S.A. ("Cabovisao"), reported as discontinued operations and disposed of on February 29, 2012, partly offset by the increases of operating income before depreciation and amortization, financial expense and acquisition costs all related to the recent acquisitions.

The non-controlling interest represents a participation of approximately 67.9% in Cogeco Cable's results. For the three and six-month periods ended February 28, 2013, profit for the period attributable to non-controlling interest amounted to $39.6 million and $68.2 million, respectively, when compared to $56.4 million and $85.6 million for the comparable periods of fiscal 2012.

CASH FLOW ANALYSIS


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                                 Quarters ended         Six months ended    
                               February    February    February    February 
                                    28,         29,         28,         29, 
                                   2013        2012        2013        2012 
(in thousands of dollars)             $           $           $           $ 
----------------------------------------------------------------------------
Operating activities                                                        
Cash flow from operations       140,413     105,153     242,203     209,892 
Changes in non-cash                                                         
 operating activities            12,757       9,905     (74,751)    (64,781)
Amortization of deferred                                                    
 transaction costs and                                                      
 discounts on long-term debt     (2,861)       (914)     (3,717)     (1,676)
Income taxes paid               (18,211)    (19,093)    (62,459)    (57,077)
Current income tax expense       22,552      25,971      48,664      47,290 
Financial expense paid          (28,086)    (10,677)    (46,395)    (31,511)
Financial expense                30,531      16,110      47,545      33,888 
----------------------------------------------------------------------------
                                157,095     126,455     151,090     136,025 
Investing activities           (735,466)   (118,470) (2,172,678)   (196,669)
Financing activities            610,653      64,401   1,847,625      95,389 
Effect of exchange rate                                                     
 changes on cash and cash                                                   
 equivalents denominated in                                                 
 aforeign currencies                705           -         705           - 
----------------------------------------------------------------------------
Net change in cash and cash                                                 
 equivalents from continuing                                                
 operations                      32,987      72,386    (173,258)     34,745 
Net change in cash and cash                                                 
 equivalents from                                                           
 discontinued operations (1)          -      47,237           -      49,597 
Cash and cash equivalents                                                   
 from continuing and                                                        
 discontinued operations,                                                   
 beginning of year                9,278      19,935     215,523      55,216 
----------------------------------------------------------------------------
Cash and cash equivalents                                                   
 from continuing and                                                        
 discontinued operations,                                                   
 end of year                     42,265     139,558      42,265     139,558 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(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 second-quarter cash flow from operations reached $140.4 million compared to $105.2 million, an increase of $35.3 million or 33.5%, compared to the same period of prior year. For the first six months, cash flow from operations reached $242.2 million compared to $209.9 million for the same period last year, an increase of $32.3 million, or 15.4%. 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 acquisition costs related to ABB and PEER 1 acquisitions. For the second quarter, changes in non-cash operating activities generated cash inflows of $12.8 million compared to $9.9 million in the second quarter of fiscal 2012, mainly as a result of an increase in trade and other payables compared to a decrease in the prior year, partly offset by an increase in trade and other receivables in the prior year. For the first six months, changes in non-cash operating activities generated cash outflows of $74.8 million compared to $64.8 million for the same period in fiscal 2012, mainly as a result of a higher decrease in trade and other payables and by a decrease in provisions compared to an increase in the prior year, partly offset by an increase in deferred and prepaid revenue and other liabilities compared to a decrease in prior year.

INVESTING ACTIVITIES

BUSINESS COMBINATIONS IN FISCAL 2013

On January 31, 2013, the Corporation's subsidiary, 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, Metromedia 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 Metromedia's non-controlling interest acquisition are as follows:


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                              Metromedia     PEER 1         ABB       TOTAL 
                                       $          $           $           $ 
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Consideration                                                               
Paid                                                                        
  Purchase of shares                 462    477,834     337,779     816,075 
  Repayment of secured debts                                                
   and settlement of options                                                
   outstanding                         -    170,872   1,021,854   1,192,726 
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                                     462    648,706   1,359,633   2,008,801 
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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           -         672 
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     602,690   1,024,676 
Deferred tax assets                    -      8,355      33,835      42,190 
Trade and other payables                                                    
 assumed                               -    (26,330)    (27,620)    (53,950)
Provisions                             -          -        (721)       (721)
Income tax liabilities                                                      
 assumed                               -     (4,716)          -      (4,716)
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    (16,962)          -     (16,500)
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                                     462    648,706   1,359,633   2,008,801 
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FISCAL 2013 ADJUSTEMENT RELATED TO FISCAL 2012 BUSINESS COMBINATION

During the second quarter, the Corporation completed the purchase price allocation of Metromedia which was acquired on December 26, 2011. The final purchase price allocation of Metromedia is as follows:


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                                                 Preliminary          Final 
                                                           $              $ 
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Consideration                                                               
Paid                                                                        
  Purchase of shares                                  36,860         36,860 
  Repayment of secured debt                            2,140          2,140 
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                                                      39,000         39,000 
Balance due on a business combination, bank                                 
 prime rate plus 1% and payable in June 2013           2,000          2,000 
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                                                      41,000         41,000 
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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)
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                                                      41,000         41,000 
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ACQUISITIONS OF PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE AND OTHER ASSETS

For the three and six-month periods ended February 28, 2013, acquisition of property, plant an equipment amounted to $101.5 million and $180.0 million, respectively, compared to $84.5 million and $159.0 million for the comparable periods of fiscal 2012 mainly as a results of the following factors in the Cable segment:


--  A decrease in the quarter and an increase for the six-month period ended
    February 28, 2013 in scalable infrastructure and network upgrade and
    rebuild to extend and improve network capacity and to deploy advanced
    technologies such as DOCSIS 3.0 and Switched Digital Video 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 services category maturity in the Canadian operations; and 
--  An increase in data centre facilities capital expenditures in the
    Montreal and Toronto areas in Canada and Portsmouth in England for
    PEER 1 as well as expansion of the fibre in the Toronto area in order to
    fulfill orders from new customers. 

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 second quarter and the first six months of fiscal 2013, the acquisition of intangible and other assets amounted to $4.5 million and $9.1 million, compared to $2.6 million and $6.6 million for the same periods last year, respectively.

FREE CASH FLOW AND FINANCING ACTIVITIES

In the second quarter of fiscal 2013, free cash flow amounted to $34.4 million, $16.4 million higher than in the comparable period of fiscal 2012. For the six-month period, free cash flow amounted to $53.0 million, $8.7 million, or 19.7%, 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, partly offset by the increase in financial expense and acquisition costs both related to ABB and PEER 1 acquisitions, in the Cable segment, as well as the increase in acquisition of property, plant and equipment.

In the second quarter of fiscal 2013, higher Indebtedness level provided for a cash increase of $636.1 million mainly due to drawings of $640.3 million (net of transaction costs of $2.8 million) under new credit facilities amounting approximately to $650 million incurred to finance the acquisition of PEER 1 in the Cable segment. In the second quarter of fiscal 2012, higher Indebtedness level provided a cash increase of $80.8 million mainly due mainly due to the issuance, on February 14, 2012, of $200 million Senior Secured Debentures Series 3 ("Fiscal 2012 debentures") for net proceed of $198.1 million which was used to repay the $84.9 million Term Revolving Facility and $31.7 million of bank indebtedness.

For the six-month period of fiscal 2013, higher Indebtedness level provided for a cash increase of $1.9 billion, mainly due to the draw-down on the existing Term Revolving Facility of $584.2 million (US$588 million) and the new Term Loan Facilities 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 as to drawings of $640.3 million (net of transaction costs of $2.8 million) under new credit facilities amounting approximately to $650 million incurred to finance the acquisition of PEER 1. In the first six months of fiscal 2012, Indebtedness affecting cash increased by $127.8 million mainly due to the issuance of Fiscal 2012 debentures previously described, which was used to repay the $103.7 million Term Revolving Facility.

During the second 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 six months totaled $0.38 per share, or $6.4 million, compared to $0.36 per share, or $6.0 million the year before. In addition, dividends paid by a subsidiary to non-controlling interests in the second quarter amounted to $8.6 million and $17.1 million for the first six months, compared to $8.2 million and $16.5 million, respectively, for the comparable periods of the prior year.

As at February 28, 2013, the Corporation had a working capital deficiency of $151.3 million compared to $18.5 million at August 31, 2012. The increase of $132.8 million in the deficiency is mainly due to the decrease of $173.3 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 $26.0 million in trade and other receivables and by a decrease of $23.9 million in trade and other payables. 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 February 28, 2013, the Corporation had used $78.8 million of its $100 million Term Revolving Facility for a remaining availability of $21.2 million and Cogeco Cable had used $626.5 million of its $750 million Term Revolving Facility for a remaining availability of $123.5 million. Cogeco Cable also benefits, through its subsidiary ABB, from a Revolving Credit Facility of $51.6 million (US$50 million), of which $3.6 million (US$3.5 million) was used at February 28, 2013 for a remaining availability of $48 million. At February 28, 2013, Cogeco Cable also benefits from additional Revolving Credit Facilitiies of $250.9 million incurred as a result of the acquisition of PEER 1, of which $243.6 million was used at February 28, 2013 for a remaining availability of $7.3 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 March 31, 2013 is presented in the table below. Additional details are provided in note 10 of the condensed interim consolidated financial statements.


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                                                                      Amount
                                                    Number of  (in thousands
                                                       shares    of dollars)
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Common shares                                                               
Multiple voting shares                              1,842,860             12
Subordinate voting shares                          14,989,338        121,976
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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.

In connection with the acquisition of PEER 1 on January 31, 2013, the Corporation's subsidiary, 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 GBP 7 million. The Canadian and US Term Facilities are available in Canadian and US dollars and interest rates are based on Bankers' Acceptance, LIBOR Loans, Prime Rate Loans or US Base Rate Loans, plus the applicable margin. 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. Starting on August 31, 2013, the Canadian and US Term Facilities are subject to quarterly amortization of 1.25% in the first year, 1.875% in the second year, 3.125% in the third year and 3.75% in the fourth year, payable on the last business day of each fiscal quarter. 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 the Corporation and most of its subsidiaries except for ABB and its 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 the Corporation but does not cover ABB. 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.

In connection with the acquisition of ABB on November 30, 2012, Cogeco Cable concluded, through two of its US subsidiaries, First Lien Credit Facilities totaling US$710 million with a syndicate of banks and other institutional lenders in three tranche and draw down by an amount of US $660 million of which US$641.5 million was used to repay ABB's prior secured debt and US$18.5 million to pay for some of the transaction costs. The first tranche, a Term Loan A Facility amounting to US$240 million, which will mature on November 30, 2017, the second tranche, a Term Loan B Facility amounting to US$420 million, which will mature on November 30, 2019 and the third tranche, a Revolving Credit Facility of US $50 million, including a swingline of US$15 million, which will mature on November 30, 2017. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin, with a LIBOR floor of 1.00% for the Term Loan B Facility. Starting on December 31, 2013, the Term Loan A Facility is subject to quarterly amortization of 1.25% in the first year, 2.5% in the second year and 3.0% in the third and fourth years. Starting 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 the Corporation, 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.

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 half of fiscal 2013, amounts due under the US$190 million Senior Secured Notes Series A increased by $8.7 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 $7.9 million, of which a decrease of $8.7 million offsets the foreign exchange loss on the debt denominated in US dollars. The difference of $0.7 million was recorded as a decrease of other comprehensive income. During the first half of fiscal 2012, amounts due under the US$190 million Senior Secured Notes Series A increased by $1.9 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 $1.9 million, of which $1.9 million offsets the foreign exchange loss on the debt denominated in US dollars.

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 February 28, 2013, the net investment for ABB amounted to US$472.6 million while long- term debt was of US$323 million. At February 28, 2013, the net investment for PEER 1 amounted to US$368 million and GBP 69.1 million while long-term debt was of $US245 million and GBP 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 February 28, 2013 was $1.0314 per US dollar and $1.5645 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 $28.1 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 April 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 May 8, 2013, to shareholders of record on April 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


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                                Consolidated              US          CANADA
                                                February 28,                
                                                        2013                
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PSU                                2,486,350      501,795(1)       1,984,555
Television service customers       1,100,547         247,840         852,707
HSI service customers                824,144         174,979         649,165
Telephony service customers          561,659          78,976         482,683
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                                                   Consolidated             
                                        -----------------------             
                             Net additions (losses)  Net additions (losses) 
                                     Quarters ended        Six months ended 
                               February    February    February    February 
                                    28,         29,         28,         29, 
                                   2013        2012        2013        2012 
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PSU                               7,463      12,280      22,543      58,459 
Television service customers     (4,896)     (9,111)     (6,972)     (4,659)
HSI service customers             7,125       7,518      17,970      24,803 
Telephony service customers       5,234      13,873      11,545      38,315 
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(1)  Include 494,674 PSU (244,404 Television service, 171,640 HSI service   
     and 78,630 Telephony service customers) from the acquisition of ABB on 
     November 30, 2012.                                                     

Fiscal 2013 second-quarter and first six months, PSU net additions 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 controls and processes. PSU progression comes mainly from the US operations. For the second quarter net customer losses for Television service customers stood at 4,896 compared to 9,111 for fiscal 2012 second-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. Fiscal 2013 second-quarter HSI service customers grew by 7,125 compared to 7,518 in the second quarter of the prior year, and the number of net additions to the Telephony service stood at 5,234 customers compared to 13,873 customers for the same period of the prior year. For the first six months of fiscal 2013, PSU net additions are the results of the recent acquisition of ABB at the end of the first quarter of fiscal 2013.

Operating results


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                       Quarters ended             Six months ended          
                   February  February           February  February          
                   28, 2013  29, 2012    Change 28, 2013  29, 2012    Change
(in thousands of                                                            
 dollars, except                                                            
 percentages)             $         $         %        $         $         %
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Revenue             429,672   317,735      35.2  757,583   633,159      19.7
Operating expenses  230,908   171,649      34.5  405,112   348,108      16.4
Management fees -                                                           
 COGECO Inc.          2,988     2,343      27.5    9,569     9,485       0.9
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Operating income                                                            
 before                                                                     
 depreciation and                                                           
 amortization       195,776   143,743      36.2  342,902   275,566      24.4
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Operating margin       45.6%     45.2%              45.3%     43.5%         
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Revenue

Fiscal 2013 second-quarter revenue increased by $111.9 million, or 35.2%, to reach $429.7 million, when compared to the same period last year. For the first six months, revenue amounted to $757.6 million, an increase of $124.4 million, or 19.7% when compared to the same period of fiscal 2012. Revenue increased for both periods is mainly attributable to the operating results of Cogeco Cable's recent acquisitions.

Operating expenses

For the second quarter of fiscal 2013, operating expenses increased by $59.3 million, to reach $230.9 million, an increase of 34.5% compared to the prior year. For the first half of the fiscal year, operating expenses amounted to $405.1 million, an increase of $57.0 million, or 16.4%, when compared to the same period of fiscal 2012. Operating expenses increased is mostly attributable to Cogeco Cable's recent acquisitions, partly offset by cost reduction initiatives and by 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 second-quarter operating income before depreciation and amortization increased by $52.0 million, or 36.2%, to reach $195.8 million, and by $67.3 million, or 24.4% as a result of the recent acquisitions and the improvement in the Canadian operations. Cogeco Cable's second- quarter operating margin increased to 45.6% from 45.2% and to 45.3% from 43.5% for the first six 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. Revenue is now expected to reach $1.8 billion, an increase of $105 million when compared to the January 14, 2013 projections. Operating income before depreciation and amortization should increase from $750 million to $782 million and financial expense should increase from $101 million to $118 million. Acquisitions of property, plant and equipment, intangible and other assets should increase by approximately $31 million and free cash flow should reach $150 million, a decrease of $25 million from January 14, 2013 projections.


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                                                   Revised           Revised
                                               projections       projections
                                            April 10, 2013  January 14, 2013
                                               Fiscal 2013       Fiscal 2013
(in millions of dollars)                                 $                 $
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Financial guidelines                                                        
Revenue                                              1,835             1,730
Operating income before depreciation and                                    
 amortization                                          782               750
Integration, restructuring and                                              
 acquisition costs                                      16                 7
Financial expense                                      118               101
Current income tax expense                              94                94
Profit for the year                                    207               227
Profit for the year attributable to                                         
 owners of the Corporation                              69                75
Acquisitions of property, plant and                                         
 equipment, intangible and other assets                404               373
Free cash flow(1)                                      150               175
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(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 recent acquisition of PEER 1 on January 31, 2012, the Corporation revised its financial guidelines for the 2013 fiscal year issued on January 14, 2013 to include a seven-month period of PEER 1's financial projections. Management expects revenue to reach $1.70 billion, representing a growth of $105 million, or 6.6%, when compared to those issued on January 14, 2013. Operating income before depreciation and amortization should increase by $32 million to reach $767 million reflecting the PEER 1 acquisition. However, operating margin should decrease from 46.2% to 45.2% as a result of lower margins business activities from PEER 1. Depreciation and amortization of property, plant and equipment and intangible assets should increase from $330 million to $368 million and acquisition of property, plant and equipment, intangible and other assets should increase by $31 million to take into consideration the PEER 1 seven-month operations. Financial expense should amount to $113 million, an increase of $17 million, as a result of the cost of financing related to the PEER 1 acquisition. Fiscal 2013 free cash flow is expected to amount to $145 million, a decrease of $25 million, or 14.7%, when compared to the free cash flow projection issued on January 14, 2013 as a result of acquisitions of property, plant and equipment, intangible and other assets exceeding cash flow generated by PEER 1, additional integration, restructuring and acquisition costs of $9 million as well as additional financial expense of $17 million both related to PEER 1. Profit for the year is expected to amount to $205 million, $20 million lower than the January 14, 2013 projections, mainly as a result of the PEER 1's expected financial results for the seven-month operations.

Fiscal 2013 revised financial guidelines are as follows:


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                                                  Revised           Revised 
                                              projections       projections 
                                           April 10, 2013  January 14, 2013 
                                              Fiscal 2013       Fiscal 2013 
(in millions of dollars, except net                                         
 customer additions and operating                                           
 margin)                                                $                 $ 
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Financial guidelines                                                        
  Revenue                                           1,695             1,590 
  Operating income before depreciation                                      
   and amortization                                   767               735 
  Operating margin                                   45.2%             46.2%
  Integration, restructuring and                                            
   acquisition costs                                   16                 7 
  Depreciation and amortization                       368               330 
  Financial expense                                   113                96 
  Current income tax expense                           92                92 
  Profit for the year                                 205               225 
  Acquisitions of property, plant and                                       
   equipment, intangible and other                                          
   assets                                             401               370 
  Free cash flow(1)                                   145               170 
Net customer addition guidelines                                            
  PSU growth                                       35,000            35,000 
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(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.            

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 Cable'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 February 28, 2013, and have concluded that they are adequate. Furthermore, no significant changes to the internal controls over financial reporting occurred during the quarter ended February 28, 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 April 10, 2013, management was unable to complete its review of the design of Internal Controls Over Financial Reporting ("ICFR") for the newly acquired corporations. At February 28, 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 10% of revenue, 7% of profit for the period, 31% of the total assets, 15% of the current assets, 32% of the non current assets, 11% of the current liabilities and 24% of the non current liabilities of the consolidated condensed interim financial statements for the six-month period ended February 28, 2013. PEER 1 constitutes 2% of revenue, -6% of profit for the period, 14% of the total assets, 16% of the current assets, 14% of the non current assets, 9% of the current liabilities and 2% of the non current liabilities of the consolidated condensed interim financial statements for the six-month period ended February 28, 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 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 segment since August 31, 2012, except for the proposed Astral/Bell amended Arrangement Agreement described below. In addition, risks and uncertainties have been updated to reflect the recent acquisitions of ABB and PEER 1. A detailed description of the uncertainties and main risk factors faced by COGECO can be found in the 2012 Annual Report.

In Canada, following the denial by the CRTC on October 18, 2012 of an application by BCE Inc. ("Bell") to acquire Astral Media Inc. ("Astral"), Astral Bellamended their Arrangement Agreement with a view to submitting a revised proposal to the CRTC for approval of Bell's acquisition of Astral. The closing date of the proposed transaction was extended to June 1, 2013, with Astral and Bell having a further right to postpone the closing date to July 31, 2013. On March 4, 2013, the Commissioner of Competition and Bell announced the signing of a consent agreement and the filing thereof with the Competition Tribunal. The consent agreement provides conditional clearance for the proposed transaction under the Competition Act subject to, inter alia, the divestiture by Bell of Astral's joint venture ownership interests in certain television services and its ownership interest certain additional French-language television services. Also on March 4, 2013, Bell announced that it had concluded an agreement to sell the Astral joint venture ownership interests as well as two Ottawa FM radio stations to Corus Entertainment Inc. ("Corus"), and that it was putting up for sale the remaining properties to be divested and 8 additional English-language radio stations through an auction process. The sale of the joint venture properties to Corus was approved by the Commissioner of Competition on March 15, 2013. In Management's view, if it is ultimately approved by the CRTC, the proposed transaction, as revised, would still significantly increase the level of vertical integration in the Canadian broadcasting and communications industries and leave the opportunity as well as an incentive for Bell to abuse its dominant position in the supply of programming for distribution in the downstream broadcasting distribution market in Canada by non-vertically integrated distributors such as Cogeco Cable. Bell would end up controlling over forty percent (40 %) of Cogeco Cable's programming service affiliation payments at current wholesale rates. The Corporation's businesses and results of operations could thus be adversely affected in the future as affiliation agreements need to be renewed with Bell. In the event of future disputes concerning the terms of affiliation between Cogeco Cable and Bell for services controlled by Bell, the CRTC may however 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.

Uncertainties and risks subsequent to the acquisitions of PEER 1 or ABB

Cogeco Cable acquired PEER 1 and ABB with the expectation that the combination of its businesses and each of PEER 1 and ABB would result in greater long-term potential and value creation than the individual corporations could achieve on their own. These anticipated benefits will depend in part on whether the operations, systems, management and cultures of each of the Corporation's other businesses and those of PEER 1 and ABB can be combined in an effective manner and in part on whether the presumed bases for the combination produce the benefits anticipated. Most operational and strategic decisions, and certain staffing decisions, with respect to the combined entity have not yet been made and may not have been fully identified at this time.

There can be no assurance that the integration of Cogeco Cable's capital investment optimization and equipment purchases with those of PEER 1 and ABB will be timely or effectively accomplished, or ultimately will be successful in achieving the anticipated benefits. The integration process may lead to greater than expected operating costs, customer loss and business disruption for Cogeco Cable's other businesses, PEER 1, ABB or the combined businesses. Similarly, the integration process that may adversely affect the ability of the combined businesses to realize the anticipated benefits of the combination or may materially and adversely affect Cogeco Cable's, PEER 1's, ABB's or the combined entity's businesses, results of operations and/or financial condition.

There may be liabilities and contingencies that Cogeco Cable did not discover in its due diligence review prior to consummation of the PEER 1 and ABB acquisitions and the Corporation may not be indemnified for these liabilities and contingencies. The discovery of any material liabilities or contingencies relating to the business of PEER 1 or ABB following the acquisitions could have a material adverse effect on the Corporation businesses, financial condition and results of operations.

Cogeco Cable currently intends to retain key personnel of PEER 1 and ABB to continue to manage and operate each of PEER 1 and ABB. Cogeco Cable will compete with other potential employers for employees, and may not be successful in keeping the services of executives and other employees that PEER 1 or ABB need. The failure of key personnel to remain as part of the management team of PEER 1 and ABB in the period following the PEER 1 and ABB acquisitions could have a material adverse effect on the Corporation businesses, financial condition and results of operations.

Risks pertaining to markets and competition

In the US, the competition is fragmented and varies by geographical area. ABB's principal competitor for video services is Direct Broadcast Satellite ("DBS") and its principal competitor for High Speed Data ("HSD") services is Direct Subscriber Line ("DSL"). Intensive marketing efforts and aggressive pricing from its competitors and an increase in the presence of local telephone companies and electric utilities competing in its market may have an adverse impact on the Corporation's ability to retain customers. Cogeco Cable's phone service faces competition from the local incumbent local exchange carriers ("ILEC"), as well as other providers such as cellular and Voice over Internet Protocol ("VoIP") providers such as Vonage.

In the US, ABB also currently faces competition from over-the-top services such as Netflix, Google TV, and Apple TV, Hulu and Samsung, which are gaining increased interest by consumers. The availability of these services could cause customers to view television content through their broadband connection rather than through their traditional cable television subscription services, and view less on-demand television content on the video-on-demand ("VOD") or subscription-video-on-demand ("SVOD") platforms of cable television service providers. We may not be able to make up for the loss of revenue associated with this migration.

PEER 1's risks pertaining to markets and competition are similar to Cogeco Data Services risks which can be found in the 2012 Annual Report.

Risk pertaining to Third-Party Service Suppliers

In the US, ABB also depends on third-party suppliers and providers, such as Motorola and Cisco for certain specialized services, hardware and equipment that are critical to their operations. These materials and services include set-top boxes, telephony, cable and telephony modems, servers and routers, fiber-optic cable, telephony switches, inter-city links, support structures, software, the "backbone" telecommunications network for the Internet access and telephony services; and construction services for expansion and upgrades of the cable and telephony networks. These services and equipment are available from a limited number of suppliers.

In addition, ABB depends on third-party plant construction contractors in areas of new homes growth. If no supplier can provide ABB with the equipment or services that it require or that comply with evolving internet and telecommunications standards or that are compatible with ABB's other equipment and software, ABB's cable services businesses, financial condition and results of operations could be materially adversely affected. In addition, if ABB is unable to obtain critical equipment, software, services or other items on a timely basis and at an acceptable cost, its ability to offer its products and services and roll out its advanced services may be delayed, and ABB's businesses, financial condition and results of operations could be materially adversely affected.

In addition, in recent years, the US cable industry has experienced a rapid escalation in the cost of programming, particularly sports programming and retransmission of broadcast programming. This escalation may continue, and ABB may not be able to pass programming cost increases on to its customers. The inability to pass these programming cost increases on to its customers would have an adverse impact on ABB's cash flow and operating margins. In addition, as ABB upgrades the channel capacity of its systems and adds programming to its basic, expanded basic and digital service offerings, ABB may face additional market constraints on its ability to pass programming costs on to its customers. The inability to pass these costs increases on to its customers could materially adversely affect ABB's profitability. ABB is also subject to increasing financial and other demands by broadcasters to obtain the required consent for the transmission of broadcast programming to its subscribers.

Financial risks - currency

Most of the Corporation's financial results are reported in Canadian dollars and a significant portion of its sales and operating costs are realized in currencies other than Canadian dollars, most often US dollars, Euros and pounds sterling. For the purposes of financial reporting, any change in the value of the Canadian dollar against the US dollar or pounds sterling during a given financial reporting period would result in a foreign exchange gain or loss on the translation of any unhedged foreign currency denominated debt into Canadian dollars. Consequently, Cogeco Cable reported earnings and indebtedness could fluctuate materially as a result of foreign-exchange gains or losses. Significant fluctuations in relative currency values against the Canadian dollar could therefore have a significant impact on the Corporation's future profitability.

Risk pertaining to leased facilities

Certain of PEER 1's data centers are located in leased premises, and there can be no assurance that PEER 1 will remain in compliance with its leases and that they will not be terminated or can be renewed at commercially reasonable terms. Termination of a lease could have a material impact on its businesses, results of operations and financial condition.

Regulatory risks - US

US federal, state and local governments extensively regulate the video services industry and may increase the regulation of the Internet services and VoIP phone industries. Current regulation of the cable industry imposes administrative and operational expenses and may limit the revenues of cable systems. Cable operators are subject to, among other things:


--  subscriber privacy regulations; 
--  limited rate regulation; 
--  requirements that, under specified circumstances, a cable system carry a
    local broadcast station or obtain consent to carry a local or distant
    broadcast station; 
--  rules for franchise renewals and transfers; 
--  regulations concerning the content of programming offered to
    subscribers; 
--  the manner in which program packages are marketed to subscribers; 
--  the use of cable system facilities by local franchising authorities, the
    public and unrelated entities; 
--  cable system ownership limitations and program access requirements; 
--  payment of franchise fees to local franchising authorities; 
--  payment of federal universal service assessments for any end user
    revenues from interstate and international telecommunications services
    and telecommunications provided to a third party for a fee, and other
    state and federal telecommunications fees; and 
--  regulations governing other requirements covering a variety of
    operational areas such as equal employment opportunity, technical
    standards and customer service requirements. 

Further US regulation could give rise to increases in cable rates. The Federal Communications Commission ("FCC") and the US Congress continue to be concerned that cable rate increases are exceeding inflation and as a result it is possible that either the FCC or the US Congress will restrict the ability of cable system operators to implement rate increases. If ABB is unable to raise its rates in response to increasing costs, its financial condition and results of operations could be materially adversely affected.

In addition, ABB could be materially disadvantaged if it remains subject to legal and regulatory constraints that do not apply equally to its competitors. The FCC recently adopted rules to ensure that the local franchising process does not unreasonably interfere with competitive entry, and several states have enacted legislation to ease the franchising obligations of new entrants. These changes in regulation by the FCC and several states will benefit ABB's competitors. In addition, both the Congress and the FCC are considering various forms of "network neutrality" regulation which may have the impact of restricting the ABB's ability to manage its network efficiently.

Human Resources

As of February 28, 2013, approximately 26.8% of ABB's employees are represented by several unions under collective bargaining agreements. ABB can neither predict the outcome of current or future negotiations relating to labor disputes, union representation or renewal of collective bargaining agreements, nor be able to avoid future work stoppages, strikes or other forms of labor protests pending the outcome of any current of future negotiations. A prolonged work stoppage, strike or other form of labor protest could have a material adverse effect on its businesses, operations and reputation. Even if ABB does not experience strikes or other forms of labor protests, the outcome of labor negotiations could adversely affect its businesses and results of operations. In addition, its ability to make short-term adjustments to control compensation and benefits costs is limited by the terms of its collective bargaining agreements.

ABB's and PEER 1's success are substantially dependent upon the retention and the continued performance of their executive officers. Many of these executive officers are uniquely qualified in their areas of expertise, making it difficult to replace their services. The loss of the services of any of these officers could adversely affect Cogeco Cable's growth, financial condition and results of operations. In addition, to implement and manage its businesses and operating strategies effectively, ABB and PEER 1 must maintain a high level of efficiency, performance and content quality, continue to enhance its operational and management systems, and continue to effectively attract, train, motivate and manage its employees. If ABB and PEER 1 are not successful in their efforts, it may have a material adverse effect on the Corporation's businesses, prospects, results of operations and financial condition.

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 February 28, 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.

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        Six months ended 
                               February    February    February    February 
                                    28,         29,         28,         29, 
                                   2013        2012        2013        2012 
(in thousands of dollars)             $           $           $           $ 
----------------------------------------------------------------------------
Cash flow from operating                                                    
 activities                     157,095     126,455     151,090     136,025 
Changes in non-cash                                                         
 operating activities           (12,757)     (9,905)     74,751      64,781 
Amortization of deferred                                                    
 transaction costs and                                                      
 discounts on long-term debt      2,861         914       3,717       1,676 
Income taxes paid                18,211      19,093      62,459      57,077 
Current income tax expense      (22,552)    (25,971)    (48,664)    (47,290)
Financial expense paid           28,086      10,677      46,395      31,511 
Financial expense               (30,531)    (16,110)    (47,545)    (33,888)
----------------------------------------------------------------------------
Cash flow from operations       140,413     105,153     242,203     209,892 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Free cash flow is calculated as follows:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                     Quarters ended        Six months ended 
                               February    February    February    February 
                                    28,         29,         28,         29, 
                                   2013        2012        2013        2012 
(in thousands of dollars)             $           $           $           $ 
----------------------------------------------------------------------------
Cash flow from operations       140,413     105,153     242,203     209,892 
Acquisition of property,                                                    
 plant and equipment           (101,526)    (84,540)   (180,040)   (159,000)
Acquisition of intangible                                                   
 and other assets                (4,493)     (2,646)     (9,134)     (6,590)
----------------------------------------------------------------------------
Free cash flow                   34,394      17,967      53,029      44,302 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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    Six months ended
                                      February  February  February  February
                                           28,       29,       28,       29,
                                          2013      2012      2013      2012
(in thousands of dollars, except                                            
 percentages)                                $         $         $         $
----------------------------------------------------------------------------
Operating income                       102,464    58,931   185,741   133,573
Depreciation and amortization           86,014    85,479   152,055   151,098
Integration, restructuring and                                              
 acquisitions costs                      7,490       108    14,752       108
----------------------------------------------------------------------------
Operating income before depreciation                                        
 and amortization                      195,968   144,518   352,548   284,779
----------------------------------------------------------------------------
----------------------------------------------------------------------------

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                February    February                        
Quarters ended                       28,         29,            November 30,
(in thousands of dollars,                                                   
 except percentages and per                                                 
share data)                         2013        2012       2012         2011
                                       $           $          $            $
----------------------------------------------------------------------------
Revenue                          458,501     345,613    366,608      346,023
Operating income before                                                     
 depreciation and                                                           
 amortization                    195,968     144,518    156,580      140,261
Operating income                 102,464      58,931     83,277       74,642
Income taxes                      15,416      13,372     19,168       12,340
Profit for the period from                                                  
 continuing operations            56,517      29,449     47,095       44,524
Profit (loss) for the period                                                
 from discontinued                                                          
 operations                            -      52,047          -        3,399
Profit (loss) for the period      56,517      81,496     47,095       47,923
Profit (loss) for the period                                                
 attributable to owners of                                                  
 the Corporation                  16,899      25,089     18,487       18,770
Cash flow from operating                                                    
 activities                      157,095     126,455     (6,005)       9,570
Cash flow from operations        140,413     105,153    101,790      104,739
Acquisitions of property,                                                   
 plant and equipment,                                                       
 intangible and other assets     106,019      87,186     83,155       78,404
Free cash flow                    34,394      17,967     18,635       26,335
Earnings (loss) per share(1)                                                
  From continuing and                                                       
   discontinued operations                                                  
    Basic                           1.01        1.50       1.11         1.12
    Diluted                         1.00        1.49       1.10         1.11
  From continuing operations                                                
    Basic                           1.01        0.50       1.11         1.06
    Diluted                         1.00        0.50       1.10         1.05
  From discontinued                                                         
   operations                                                               
    Basic                              -        1.00          -         0.07
    Diluted                            -        0.99          -         0.06
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Quarters ended                            August 31,                May 31, 
(in thousands of dollars,                                                   
 except percentages and per                                                 
share data)                        2012         2011        2012       2011 
                                      $            $           $          $ 
----------------------------------------------------------------------------
Revenue                         356,685      331,045     358,032    330,258 
Operating income before                                                     
 depreciation and                                                           
 amortization                   163,617      152,434     158,446    142,025 
Operating income                 95,943      101,304      95,473     90,242 
Income taxes                     33,625       21,804      22,278     19,252 
Profit for the period from                                                  
 continuing operations           44,900       63,870      55,373     54,371 
Profit (loss) for the period                                                
 from discontinued                                                          
 operations                           -        6,219           -   (233,573)
Profit (loss) for the period     44,900       70,089      55,373   (179,202)
Profit (loss) for the period                                                
 attributable to owners of                                                  
 the Corporation                 13,889       23,317      19,303    (56,303)
Cash flow from operating                                                    
 activities                     203,193      217,792     109,546    141,106 
Cash flow from operations       119,612      148,228     117,606    129,327 
Acquisitions of property,                                                   
 plant and equipment,                                                       
 intangible and other assets    124,638      122,441      88,141     63,807 
Free cash flow                   (5,026)      25,787      29,465     65,520 
Earnings (loss) per share(1)                                                
  From continuing and                                                       
   discontinued operations                                                  
    Basic                          0.83         1.39        1.15      (3.36)
    Diluted                        0.83         1.39        1.15      (3.36)
  From continuing operations                                                
    Basic                          0.83         1.27        1.15       1.13 
    Diluted                        0.83         1.27        1.15       1.13 
  From discontinued                                                         
   operations                                                               
    Basic                             -         0.12           -      (4.49)
    Diluted                           -         0.12           -      (4.49)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(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-Rivieres and Rimouski in Canada.

ADDITIONAL INFORMATION

This MD&A was prepared on April 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.                                                                 
Montreal, Quebec                                                            
April 10, 2013                                                              

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 Quebec with complementary radio formats serving a wide range of audiences as well as Cogeco News, its news agency. Cogeco Diffusion also operates Metromedia, an advertising representation house specialized in the public transit sector that holds exclusive advertising rights in the Province of Quebec 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).


Analyst Conference    Thursday, April 11, 2013 at 11:00 a.m. (Eastern       
Call:                 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: 1 866-322-8032              
                      International Access Number: + 1 416-640-3406         
                      Confirmation Code: 4371097 By Internet at             
                      www.cogeco.ca/investors                               
                                                                            
                      A rebroadcast of the conference call will be available
                      until July 11, 2013, by dialing:                      
                                                                            
                      Canada and US access number: 1 888-203-1112           
                      International access number: + 1 647-436-0148         
                      Confirmation code: 4371097                            

Contacts:
Source:
COGECO Inc.
Pierre Gagne
Senior Vice President and Chief Financial Officer
514-764-4700

Information:
Media
Rene Guimond
Vice-President, Public Affairs and Communications
514-764-4700

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Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.