MANAGEMENT’S DISCUSSION AND ANALYSIS ADDITIONAL GAAP MEASURES NON-GAAP MEASURES We include operating income as an additional GAAP measure in our consolidated statements of income because we believe it is a representative of our normal course operating activities, provides relevant information that can be used to assess our consolidated performance, and is meaningful to investors. We calculate it by taking revenue and deducting operating expenses, including restructuring, acquisition and other expenses, and depreciation and amortization as shown in our consolidated statements of income. We use the following Non-GAAP measures. These are reviewed regularly by management and our Board in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. These measures are also used by investors, lending institutions and credit rating agencies as an indicator of our operating performance, our ability to incur and service debt, and as a measurement to value companies in the telecommunications sector. These are not recognized measures under GAAP and do not have standardized meaning under IFRS, so they may not be a reliable way to compare us to other companies. 84 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT Non- G AAP measure Why we use it How we calculate it Most comparable IFR S financial measure Adjusted operating profit or loss and related margin GLYPH<129> To evaluate the performance of our businesses, and when making decisions about the ongoing operations of the business and our ability to generate cash flows. GLYPH<129> We believe that certain investors and analysts use adjusted operating profit to measure our ability to service debt and to meet other payment obligations. GLYPH<129> We also use it as one component in determining short-term incentive compensation for all management employees. Operating income add back depreciation and amortization, impairment of assets, stock-based compensation expense (recovery) and restructuring, acquisition and other expenses Operating income Adjusted net income Adjusted basic and diluted earnings per share GLYPH<129> To assess the performance of our businesses before the effects of these items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. GLYPH<129> Excluding these items does not imply they are non-recurring. Net income from continuing operations add back stock-based compensation expense (recovery), restructuring, acquisition and other expenses, impairment of assets, gain on spectrum distribution, gain on sale of investment, income tax adjustments on these items including adjustments due to legislative change Net income Earnings per share Pre-tax and after- tax free cash flow GLYPH<129> An important indicator of our financial strength and performance because it shows how much cash we have available to repay debt and reinvest in our company. GLYPH<129> We believe that some investors and analysts use free cash flow to value a business and its underlying assets. Adjusted operating profit minus spending on property, plant and equipment, interest on long-term debt net of interest capitalized Cash flows from operating activities Adjusted net debt GLYPH<129> To conduct valuation-related analysis and make decisions about capital structure. GLYPH<129> We believe this helps investors and analysts analyze our enterprise and equity value and assess various leverage ratios as performance measures. Total long-term debt plus current portion of long-term debt, net Debt Derivatives liabilities, deferred transaction costs, short-term borrowings, minus cash and cash equivalents. Long-term debt