MANAGEMENT’S DISCUSSION  AN D ANALYSIS BUSINESS SOLUTIONS LEADING-EDGE COMMUNICATIONS SERVICES TO CANADIAN BUSINESSES GLYPH<129> sells to medium and large enterprises, governments and financial institutions amongst others GLYPH<129> 7,298 on-net fibre connected buildings GLYPH<129> fibre passes next to an additional 20,014 near-net buildings. GLYPH<129> voice, data networking, Internet protocol (IP) and ethernet services over multiservice customer access devices that allow customers to scale and add services such as private networking, Internet, IP voice (SIP) and cloud solutions which blend seamlessly to grow with their business requirements GLYPH<129> optical wave, Internet, ethernet and multi-protocol label switching (MPLS) services provide scalable and secure metro and wide area private networking that enable and interconnect critical business applications for businesses that have one or many offices, data centres or points of presence (as well as cloud applications) across Canada GLYPH<129> extensive wireless and cable access networks services for primary, bridging and back-up connectivity GLYPH<129> contracts are typically for 1 to 5 year terms, supported by comprehensive service level agreements. SERVICES THAT MEET THE INCREASING DEMANDS OF TODAY’S CRITICAL BUSINESS APPLICATIONS NETWORK DISTRIBUTION COMPETITION Business Solutions is supported by Rogers networks and a dedicated business support network monitoring team that provides Business Solutions customers with proactive network monitoring and problem resolution. Our enterprise and carrier wholesale sales team sells Business Solutions services to Canadian business and public sector telecom customers. An extensive network of third-party channel distributors deal with IT integrators, consultants, local service providers and other indirect sales relationships. This diverse approach gives greater breadth of coverage and sustains strong sales growth for next generation services. A number of different players in the Canadian market compete for enterprise network and communications services. There are relatively few national providers, but each market has its own competitors that usually focus on the geographic markets where they have the most extensive networks. In the wireline voice and data market, we compete with facilities and non-facilities-based telecommunications service providers. In markets where we own network infrastructure, we compete with incumbent fibre-based providers. The following are our main competitors, but there are also regional competitors: GLYPH<129> Ontario: Bell, Cogeco Data Services and Allstream GLYPH<129> Quebec: predominantly Bell and Videotron GLYPH<129> Atlantic Canada: Bell Alliant and Eastlink. GLYPH<129> Western Canada: Shaw and Telus ACQUISITIONS We made two major acquisitions this year that allow Business Solutions to further enhance its suite of enterprise-level data centre and cloud computing services, enabling Canadian businesses to benefit from a single provider able to ensure end-to-end security and reliability of critical business applications. GLYPH<129> Blackiron (from Primus Telecommunications Canada Inc.) for $198 million on April 17, 2013 GLYPH<129> Pivot Data Centres for $158 million on October 1, 2013. BUSINESS SOLUTIONS FINANCIAL RESULTS 1 Results of operations include Blackiron’s operating results as of April 17, 2013 and Pivot Data Centres as of October 1, 2013 (the dates of acquisition). 2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 45 $0.36 BILLION (%) 20 1 3 BUSINESS SOLUTIONS SERVICE REVENUE MIX NEXT GENERATION 59% LEGA C Y 4 1 % (IN MILLIONS OF DOLLARS) BUSINESS SOLUTIONS SERVICE REVENUE BREAKDOWN 20 1 3 2012 2011 $ 1 49 $2 1 3 $1 8 3 $162 $271 $12 8 Next Gener a tion Leg ac y Years ended December 31 (In millions of dollars, except percentages) 2013 1 2012 % Chg Operating revenue Next generation $ 213 $ 162 31 Legacy 149 183 (19) Service revenue 362 345 5 Equipment sales 12 6 100 Operating revenue – Business S olutions 374 351 7 Operating expenses (268) (262) 2 Adjusted operating profit – Business S olutions $ 106 $ 89 19 Adjusted operating profit margin 28.3 % 25.4 % Additions to property, plant and equipment $ 107 $ 61 75