MANAGEMENT’S DISCUSSION AND ANALYSIS Adjusted Net Debt Mark-to-Market Value We use adjusted net debt to conduct valuation-related analysis and make capital structure related decisions. Adjusted net debt includes long-term debt, net debt derivatives liabilities (assets), short-term borrowings and cash and cash equivalents. We record our derivatives using an estimated credit-adjusted, mark-to- market valuation, in accordance with IFRS. The estimated credit- adjusted values of the derivatives are subject to changes in credit spreads between us and our counterparties. The table below shows the net asset of our derivative instruments at December 31, 2013: 1 Before deducting any decrease in fair value arising from purchase accounting and deferred transaction costs. 2 Includes current and long-term portions. 3 Adjusted net debt is a non-GAAP measure and should not be considered as a substitute or alternative for GAAP measures. This is not a defined term under IFRS, and does not have a standard meaning, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures” for information about this measure, including how we calculate it. 64 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT December 31, 2013 (In millions of dollars, except exchange rates) U S $ notional Exchange rate Cdn$ notional Fair value Debt Derivatives accounted for as cash flow hedges: As assets $ 4,250 1.0285 $ 4,371 $ 184 As liabilities 2,130 1.0769 2,294 (133) Net mark-to-market asset Debt Derivatives 51 Equity Derivative not accounted for as hedges: As liabilities (13) Expenditure Derivatives accounted for as cash flow hedges: As assets 900 1.0262 923 37 Net mark-to-market asset $ 75 Years ended December 31 (In millions of dollars) 2013 2012 Long-term debt 1,2 $ 13,436 $ 10,858 Net Debt Derivatives liabilities (assets) 2 (51) 524 Short-term borrowings 650 — Cash and cash equivalents (2,301) (213) Adjusted net debt 3 $ 11,734 $ 11,169