NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Issuance of Senior Notes The table below provides a summary of the senior notes that we issued in 2013 and 2012. Date Issued Principal amount Due date Interest rate Discount at issuance Total gross proceeds 1 Transaction costs and discounts 2 2013 Issuances March 7, 2013 US $ 500 2023 3.00% 99.845% March 7, 2013 US $ 500 2043 4.50% 99.055% Subtotal US $ 1,000 Cdn $1,030 Cdn $15 October 2, 2013 US $ 850 2023 4.10% 99.813% October 2, 2013 US $ 650 2043 5.45% 99.401% Subtotal US $ 1,500 Cdn $1,548 Cdn $20 2012 Issuances June 4, 2012 Cdn $ 500 2017 3.00% 99.921% June 4, 2012 Cdn $ 600 2022 4.00% 99.600% Subtotal Cdn $1,100 Cdn $1,100 Cdn $ 9 1 Gross proceeds before transaction costs and discounts. 2 Transaction costs and discounts are included as deferred transaction costs in the carrying value of the long-term debt, and recognized in net income using the effective interest method. Each of the above senior notes are unsecured and guaranteed by RCP, ranking equally with all of RCI’s other senior notes and debentures, bank credit and letter of credit facilities. We use derivatives to hedge the foreign exchange risk associated with the principal and interest components of all our US dollar denominated senior notes and debentures (see note 20). Repayment of Senior Notes and Related Derivative Settlements In June 2013, we repaid or bought the entire outstanding principal amount of our US $350 million ($356 million) senior notes due 2013. At the same time, the associated Debt Derivatives were also settled at maturity. See note 20 for more information about our Debt Derivatives. The table below shows the principal repayments on our long-term debt due in each of the next five years and thereafter as at December 31, 2013. At December 31, 2013 and 2012, we were in compliance with all financial covenants, financial ratios and all of the terms and conditions of our long-term debt agreements. The repayment dates of certain debt agreements can also be accelerated if there is a change in control of RCI. dividends, all of which are suspended in the event the public debt securities are assigned investment grade ratings by at least two of three specified credit rating agencies. As at December 31, 2013, these public debt securities were assigned an investment grade rating by each of the three specified credit rating agencies and, accordingly, these restrictions have been suspended as long as the investment grade ratings are maintained. Our other senior notes do not have any of these restrictions, regardless of the related credit ratings. Our objectives in managing capital are to ensure we have sufficient liquidity to meet all of our commitments and to execute our business plan. We define capital that we manage as shareholders’ equity (including issued capital, share premium, retained earnings, hedging reserve and available-for-sale financial assets reserve) and indebtedness (including current portion of our long-term debt, long-term debt and short-term borrowings). We manage our capital structure commitments and maturities and make adjustments based on general economic conditions, financial markets and operating risks and our investment and working capital requirements. To maintain or adjust our capital structure, we may, with approval from our Board of Directors, issue or repay debt and/or short- term borrowings, issue shares, repurchase shares, pay dividends or undertake other activities as deemed appropriate under the circumstances. The board reviews and approves any material transactions that are not part of the ordinary course of business, including proposals for acquisitions or other major investments or divestitures, financing transactions and annual capital and operating budgets. We monitor debt leverage ratios such as adjusted net debt to adjusted operating profit as part of the management of liquidity and shareholders’ return to sustain future development of the business, conduct valuation-related analyses and make decisions about capital. The 8.75% debentures due in 2032 contain debt incurrence tests and restrictions on additional investments, sales of assets and payment of The provisions of our $2.0 billion bank credit facility described above impose certain restrictions on our operations and activities, the most significant of which are leverage related maintenance tests. Our effective weighted average rate on all debt and short-term borrowings, as at December 31, 2013, including the effect of all of the associated Debt Derivative instruments (see note 20), was 5.5% (2012 – 6.1%). We recorded $23 million in foreign exchange losses in 2013 (2012 – $9 million gain) in finance costs in the consolidated statements of income. These were related to the translation of long-term debt that was not hedged on an accounting basis. NOTE 19: CAPITAL RISK MANAGEMENT Principal Repayments Foreign Exchange Weighted Average Interest Rate Terms and Conditions 112 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT 2014 $ 1,170 2015 883 2016 1,000 2017 500 2018 1,489 Thereafter 8,394 $ 13,436