MANAGEMENT’S DISCUSSION  AN D ANALYSIS We assess Media operating expenses in four areas: Adjusted operating profit was down compared to last year mainly because of revenue and expenses changes described above. Excluding the impact of the 2012 NHL lockout and the compressed NHL schedule: GLYPH<129> the cost of broadcast content (including sports programming) GLYPH<129> the cost of retail products sold by The Shopping Channel and Sports Entertainment GLYPH<129> Blue Jays player payroll GLYPH<129> all other expenses involved in day-to-day operations. GLYPH<129> operating revenue would have been 4 % higher this year compared to last year, instead of 5 % higher as reported GLYPH<129> adjusted operating profit would have been 7 % higher this year compared to last year, instead of 15 % lower as reported. GLYPH<129> operating revenue would have been 4 % higher this year compared to last year, instead of 5 % higher as reported GLYPH<129> adjusted operating profit would have been 19 % lower this year compared to last year, instead of 15 % lower as reported. Operating expenses were 8 % higher than 2012, mainly because of higher programming costs at Sportsnet, higher Toronto Blue Jays player salaries, higher merchandise spending at The Shopping Channel and costs associated with our launch of Next Issue Canada. The higher programming costs this year are a combination of lower costs in 2012 because of the NHL player lockout, and higher costs this year because more hockey games than normal were aired because of the compressed NHL hockey schedule due in part to upcoming winter Olympics. Approximately $62 million of Media’s year over year increase in operating expense this year resulted from the 2012 NHL lockout and the timing of games aired in 2013. Player salaries at the Toronto Blue Jays were $34 million higher this year. Excluding the acquisition of theScore: Lower Adjusted Operating Profit Higher Operating Expenses (IN MILLIONS OF DOLLARS) MEDIA ADJUSTED OPERATING PROFIT 2013 2012 2011 $161 $190 $180 2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 49