MANAGEMENT’S DISCUSSION AND ANALYSIS Managing Our Liquidity and Financial Resources SOURCES AND USES OF CASH Years ended December 31 (In millions of dollars) 2013 2012 % Chg CA S H FROM OPERATION S Net income for the period $ 1,669 $ 1,693 (1) Depreciation and amortization 1,898 1,819 4 Impairment of assets – 80 n/m Finance costs 742 671 11 Income tax expense 596 610 (2) Gain on sale of TVtropolis (47) – n/m Gain on spectrum distribution – (233) n/m Other 90 89 1 Cash provided by operations before changes in non-cash operating items 4,948 4,729 5 Change in non-cash operating working capital items 238 (248) n/m 5,186 4,481 16 Income taxes paid (496) (380) 31 Interest paid (700) (680) 3 Cash provided by operating activities 3,990 3,421 17 CA S HU S ED IN INVE S TIN G Additions to property, plant and equipment (2,240) (2,142) 5 Change in non-cash working capital items related to property, plant and equipment (114) 136 n/m Acquisitions and strategic initiatives (1,080) (707) 53 Other (39) (121) (68) Cash used in investing activities (3,473) (2,834) 23 CA S H FROM FINANCIN G Issuance of long-term debt, net of transaction costs 2,543 2,090 22 Repayment of long-term debt and net settlement of derivatives on termination (725) (1,240) (42) Proceeds on short-term borrowings 650 – n/m Dividends paid and repurchase/issuance of Class B Non-Voting shares (897) (1,167) (23) Cash provided by (used in) financing activities 1,571 (317) n/m Increase in cash and cash equivalents $ 2,088 $ 270 n/m Cash and cash equivalents, end of period $ 2,301 $ 213 n/m Operating Activities Financing Activities Debt Issuances Investing Activities Property, Plant and Equipment Acquisitions and Strategic Initiatives Cash provided by operations was 17 % higher this year compared to 2012. We made net investments of $1,080 million this year mainly to acquire theScore, Blackiron, Mountain Cable and Pivot Data Centres. In 2012, we made net investments of $707 million to acquire our 37.5 % interest in MLSE and for certain deposits related to our acquisition of theScore. The changes were the net effect of: On March 7, 2013 we issued US$1.0 billion of senior notes for total net proceeds of approximately Cdn$1,015 million (US$985 million), after deducting the original issue discount and debt issuance costs, with the proceeds used for general corporate purposes. The notes issued consisted of the following: Notes ) Notes ). We spent $2,240 million this year, excluding $114 million of related changes in non-cash working capital, compared to $2,142 million in 2012. See “Additions to Property, Plant and Equipment”. GLYPH<129>a5 % increase in cash from operations before changes in non-cash operating items GLYPH<129> net funding provided by non-cash working capital this year compared to a net investment in 2012 GLYPH<129>a3 % increase in interest paid on long-term debt due to an increase in the amount of outstanding debt, partially offset by a decrease in the weighted-average interest rate GLYPH<129> higher cash income tax payments in 2013. GLYPH<129> US$500 million of 3.0 % senior notes due in 2023 (the March 2023 GLYPH<129> US$500 million of 4.5 % senior notes due in 2043 (the March 2043 58 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT CONSOLIDATED STATEMENTS OF CASH FLOWS