MANAGEMENT’S DISCUSSION  AN D ANALYSIS Reconciliation of Adjusted Operating Profit Reconciliation of Adjusted Net Debt Reconciliation of Adjusted Net Income How We Calculate Adjusted Earnings Per S hare Reconciliation of Pre-tax and After-tax Free Cash Flow 2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 85 (In millions of dollars, except per share amounts; number of shares outstanding in millions) Years ended December 31 2013 2012 Adjusted basic earnings per share: Adjusted net income $ 1,769 $ 1,781 Divided by: weighted average number of shares outstanding 515 519 Adjusted basic earnings per share $ 3.43 $ 3.43 Adjusted diluted earnings per share: Adjusted net income $ 1,769 $ 1,781 Divided by: diluted weighted average number of shares outstanding 518 522 Adjusted diluted earnings per share $ 3.42 $ 3.41 Basic earnings per share: Net income from continuing operations $ 1,669 $ 1,725 Net income 1,669 $ 1,693 Divided by: weighted average number of shares outstanding 515 519 Basic earnings per share – continuing operations $ 3.24 $ 3.32 Basic earnings per share $ 3.24 $ 3.26 Diluted earnings per share: Net income from continuing operations $ 1,669 $ 1,725 Effect on net income of dilutive securities – – Diluted net income from continuing operations $ 1,669 $ 1,725 Net income $ 1,669 $ 1,693 Effect on net income of dilutive securities – – Diluted net income $ 1,669 $ 1,693 Divided by: diluted weighted average number of shares outstanding 518 522 Diluted earnings per share – continuing operations $ 3.22 $ 3.30 Diluted earnings per share $ 3.22 $ 3.24 (In millions of dollars) December 31, 2013 December 31, 2012 Long-term debt $ 12,173 $ 10,441 Current portion of long-term debt 1,170 348 13,343 10,789 Add (deduct): Net Debt Derivatives liabilities (assets) (51) 524 Deferred transaction costs 93 69 Short-term borrowings 650 – Cash and cash equivalents (2,301) (213) Adjusted net debt $ 11,734 $ 11,169 Years ended December 31 (In millions of dollars) 2013 2012 Operating income $ 2,926 $ 2,766 Add (deduct): Depreciation and amortization 1,898 1,819 Impairment of assets – 80 Stock-based compensation expense 84 77 Restructuring, acquisition and other expenses 85 92 Adjusted operating profit $ 4,993 $ 4,834 Years ended December 31 (In millions of dollars) 2013 2012 Net income from continuing operations $ 1,669 $ 1,725 Add (deduct): Stock-based compensation expense 84 77 Restructuring, acquisition and other expenses 85 92 Impairment of assets – 80 Gain on sale of TVtropolis (47) – Gain on spectrum distribution – (233) Income tax impact of above items (30) (14) Income tax adjustment, legislative tax change 8 54 Adjusted net income $ 1,769 $ 1,781 Years ended December 31 (In millions of dollars) 2013 2012 Cash provided by operating activities $ 3,990 $ 3,421 Add (deduct): Property, plant and equipment expenditures (2,240) (2,142) Interest on long-term debt expense, net of capitalization (709) (663) Restructuring, acquisition and other expenses 85 92 Cash income taxes 496 380 Interest paid 700 680 Change in non-cash working capital (238) 248 Other adjustments (40) 13 Pre-tax free cash flow 2,044 2,029 Cash income taxes (496) (380) After-tax free cash flow $ 1,548 $ 1,649