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• A quarterly dividend of $0.26 per share was paid to the holders of subordinate and multiple voting shares, an increase of $0.01 per share, or 4%, when compared to a dividend of $0.25 per share paid in the third quarter of fiscal 2012. Dividend payments in the first nine months totaled $0.78 per share in fiscal 2013, compared to $0.75 per share in fiscal 2012;
  
  

• Fiscal 2013 third-quarter primary service units ("PSU")⁽¹⁾ decreased by 3,331 and increased by 15,851 for the first nine months of fiscal 2013. At May 31, 2013, consolidated PSU amounted to 2,470,164 of which 1,981,290 come from the Canadian cable services segment and 488,874 from the American cable services segment;

• On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the Term Loan A Facility was converted into the Revolving Facility resulting in amounts borrowed under these two tranches of US$190 million and of US$100 million, respectively, while the Term Loan B Facility remained the same. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin, with a LIBOR floor for the Term Loan B Facility. The applicable margin was reduced by 0.625% for the Revolving Facility and for the Term Loan A Facility and by 1.00% for the Term Loan B Facility. In addition, the LIBOR floor for the Term Loan B Facility was reduced from 1.00% to 0.75%. All other terms and conditions remained the same. In connection with the amendment, transaction costs of $US 6.2 million were incurred;
  
  

• On May 27, 2013, Cogeco Cable completed pursuant to a public debt offering, the issue of $300 million Senior Secured Debentures Series "4" (the "Debentures") for a net proceed of $297.1 million net of transaction costs of $2.9 million. The net proceeds from this offering were used to reduce indebtedness. These Debentures mature on May 26, 2023 and bear interest at 4.175% per annum payable semi-annually. These Debentures are indirectly secured by a first priority fixed and floating charge and a security interest on substantially all present and future real and personal property and undertaking of every nature and kind of the Corporation and its subsidiaries except for ABB and certain immaterial subsidiaries (the "unrestricted subsidiaries"). The provisions under these Debentures provide for restrictions on the operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness, dispositions and maintenance of certain financial ratios;
  
  

• On April 23, 2013, Cogeco Cable completed a private placement of $410.4 million (US$400 million) aggregate principal amount of Senior Unsecured Notes (the "2020 Notes") for a net proceed of $402.6 million (US$392.4 million), net of transaction costs of $7.8 million (US$7.6 million). The net proceeds from this offering were used to reduce indebtedness. These 2020 Notes mature on May 1, 2020 and bear interest at 4.875% per annum payable semi-annually. These 2020 Notes are guaranteed on a senior unsecured basis, jointly and severally, by its subsidiaries except for the unrestricted subsidiaries. The provisions under these 2020 Notes provide for restrictions on the operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness, investments and distributions.
  
  

"We are pleased with our third quarter results. Our business should deliver better projections as we remain focused on generating sustained profitability while maintaining our rigor on cost controls thus generating free cash flow to reduce indebtedness," declared Louis Audet, President and Chief Executive Officer of Cogeco Cable. "The results generated from our subsidiaries ABB and PEER1 are in line with what we had expected," Louis Audet added.

"In the last three months, we successfully refinanced over half of Cogeco Cable's indebtedness in order to take advantage of historically low interest rates. In the process, we extended average maturity from 4.6 years to 6.1 years and increased its fixed rate debt from 35% to 66%. We are pleased with the financial market's reception and furthermore confident that Cogeco Cable is well positioned going forward," concluded Louis Audet.

ABOUT COGECO CABLE

Cogeco Cable (www.cogeco.ca) is a telecommunications corporation and is the11th largest hybrid fiber coaxial cable operator in North America operating in Canada under the Cogeco Cable brand name in Quebec and Ontario, and in the United States through its subsidiary Atlantic Broadband in Western Pennsylvania, South Florida, Maryland, Delaware and South Carolina. Its two-way broadband cable networks provide to its residential and small business customers Analogue and Digital Television, High Speed Internet («HSI») and Telephony services. Through its subsidiaries Cogeco Data Services and PEER 1 Hosting, Cogeco Cable provides its commercial customers a suite of IT hosting, information and communications technology services (Data Centre, Co-location, Managed Hosting, Cloud Infrastructure and Connectivity), with 23 data centres, extensive fiber networks in Montreal and Toronto as well as points-of-presence in North America and Europe. Cogeco Cable's subordinate voting shares are listed on the Toronto Stock Exchange (CCA.TO). For more information about Cogeco Cable and its subsidiaries visit www.cogeco.ca, cogecodata.com, peer1.com and peer1hosting.co.uk.

SHAREHOLDERS' REPORT

Three and nine-month periods ended May 31, 2013

FINANCIAL HIGHLIGHTS

MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)

Three and nine-month periods ended May 31, 2013

FORWARD-LOOKING STATEMENTS

Certain statements in this Management's Discussion and Analysis ("MD&A") may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco Cable's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee", "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the Corporation's future operating results and economic performance and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which Cogeco Cable believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. The Corporation cautions the reader that the economic downturn experienced over the past few years makes forward- looking information and the underlying assumptions subject to greater uncertainty and that, consequently, they may not materialize, or the results may significantly differ from the Corporation's expectations. It is impossible for Cogeco Cable to predict with certainty the impact that the current economic uncertainties may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties (described in the "Uncertainties and main risk factors" section of the Corporation's 2012 annual MD&A, the Corporation's MD&A for the period ended February 28, 2013 as well as in the present MD&A) that could cause actual results to differ materially from what Cogeco Cable currently expects. These factors include risks pertaining to markets and competition, technology, regulatory developments, operating costs, information systems, disasters or other contingencies, financial risks related to capital requirements, human resources, controlling shareholder and holding structure, many of which are beyond the Corporation's control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, the Corporation is under no obligation and does not undertake to update or alter this information at any particular time, except as may be required by law.

All amounts are stated in Canadian dollars unless otherwise indicated. This report should be read in conjunction with the Corporation's condensed interim consolidated financial statements and the notes thereto, prepared in accordance with the International Financial Reporting Standards ("IFRS") and the MD&A included in the Corporation's 2012 Annual Report.

CORPORATE OBJECTIVES AND STRATEGIES

Cogeco Cable Inc.'s ("Cogeco Cable" or the "Corporation") objectives are to provide outstanding service to its customers, improve profitability and create shareholder value. To achieve these objectives, the Corporation has developed strategies that focus on expanding its service offering, enhancing its existing services and bundles, improving customer experience and business processes as well as keeping a sound capital management and a strict control over spending.The Corporation measures its performance, with regard to these objectives by monitoring operating income before depreciation and amortization⁽¹⁾, operating margin⁽¹⁾, PSU⁽²⁾ growth and free cash flow⁽¹⁾.

KEY PERFORMANCE INDICATORS

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND OPERATING MARGIN

For the nine-month period ended May 31, 2013, operating income before depreciation and amortization increased by 30.3% when compared to the same period of fiscal 2012 to reach $558.0 million and operating margin increased to 45.7% from 44.9%. As a result of the improvement of operating income before depreciation and amortization in the Canadian Cable services segment resulting essentially from cost reduction initiatives, management revised its April 10, 2013 projections for fiscal 2013. Operating income before depreciation and amortization is now expected to reach $780 million from $767 million and operating margin should increase to 46.0% from 45.2%. For further details, please consult the fiscal 2013 revised projections in the "Fiscal 2013 financial guidelines" section.

FREE CASH FLOW

For the nine-month period ended May 31, 2013, Cogeco Cable reports free cash flow of $96.2 million, compared to $63.8 million for the same period of the previous fiscal year, an increase of $32.5 million. This variance is mostly attributable to the improvement of operating income before depreciation and amortization from the Canadian cable services segment and Atlantic Broadband ("ABB") and Peer 1 Network Enterprises, Inc. ("PEER 1") acquisitions (the "recent acquisitions"), partly offset by the increase in financial expense, the recent acquisition costs as well as the increase in acquisition of property, plant and equipment.

PSU GROWTH AND PENETRATION OF SERVICE OFFERINGS

During the nine-month period ended May 31, 2013, PSU reached 2,470,164 of which 1,981,290 come from the Canadian cable services segment and 488,874 from the American cable services segment. PSU for the American cable services segment increased by 3,694 stemming primarily from additional HSI services, partly offset by losses in Television services. PSU for the Canadian cable services segment increased by 12,157 when compared to an increase of 64,705 PSU for the comparable period of the prior year, mainly as a result of service category maturity and a more competitive environment in the Television services. Cogeco Cable maintains targeted marketing initiatives to increase the penetration level of its services.

BUSINESS DEVELOPMENTS AND OTHER

On July 5, 2013, Cogeco Cable reduced its Term Revolving Facility from $750 million to $600 million and its Revolving Facility of its Secured Credit Facilities from $240 million to $190 million.

On June 27, 2013, Cogeco Cable completed, pursuant to a private placement, the issuance of US$215 million Senior Secured Notes bearing interest at 4.30% payable semi-annually and maturing on June 16, 2025. The net proceeds from this offering along with drawings under the Corporation's credit facilities will be used to repay, on July 29, 2013, all the outstanding amount of $300 million Senior Secured Debentures Series 1, due on June 9, 2014.

On January 31, 2013, Cogeco Cable completed the acquisition of 96.57% of the issued and outstanding shares of PEER 1 by way of takeover bid (the "offer") valued at approximately $649 million. On April 3, 2013, Cogeco Cable completed the acquisition of the remaining 3.43% of the issued and outstanding shares of PEER 1 for a cash consideration of $17 million pursuant to the compulsory acquisition provisions in Section 300 of the Business Corporations Act ("British Columbia"). In connection with the completion of the offer, Cogeco Cable has entered into secured credit facilities in the amount of approximately $650 million and maturing in 2017, with a syndicate of lenders. PEER 1 is one of the world's leading internet infrastructure providers, specializing in managed hosting, dedicated servers, cloud services and co-location. This acquisition enhances Cogeco Cable's footprint and builds on its strategic initiatives by increasing scale in an attractive industry segment with significant growth prospects in the state of the art data center platforms. The Corporation will also serve additional businesses worldwide, in addition to approximately 11,000 customers currently served, through 23 data centres and 21 points-of-presence across North America and Europe. PEER 1's primary network centre and head office remain located in Vancouver. For the purpose of segmented operating results, operating results from PEER 1 acquisition are incorporated in the Enterprise services segment. For further details on PEER 1 operating results, please refer to the "Enterprise services" section.

On November 30, 2012, the Corporation completed the acquisition of ABB, an independent cable system operator formed in 2003, serving about 485,000 PSU's and providing Analogue and Digital Television, as well as HSI and Telephony services. The acquisition is an attractive entry point into the United States of America ("US") market, providing a significant increase in PSU base with further growth potential, a high quality network infrastructure and the ability for the Corporation's management to leverage its core knowledge and operational experience. The transaction, valued at US$1.36 billion, was financed through a combination of cash on hand, a draw-down on the existing Term Revolving Facility of approximately US$588 million and US$660 million of borrowings under a new committed non-recourse debt financing at ABB. Ranked the 12th- largest cable television system operator in the US, ABB operates cable systems in Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina. For the purpose of segmented operating results, operating results from ABB acquisition are presented in the American cable services operations. For further details on ABB's operating results, please refer to the "American cables services" section.

OPERATING AND FINANCIAL RESULTS

OPERATING RESULTS

REVENUE

Fiscal 2013 third-quarter revenue increased by $144.7 million, or 45.3%, to reach $464.5 million, when compared to the same period last year. For the first nine months, revenue amounted to $1.2 billion, an increase of $269.2 million, or 28.2% when compared to the same period of fiscal 2012. Revenue increases for both periods are mainly attributable to the operating results of the recent acquisitions as well as rate increases implemented in June and July 2012 in the Canadian cable services segment. For further details on the Corporation's revenue, please refer to the "Canadian cable services", "American cable services" and "Enterprise services" sections.

OPERATING EXPENSES

For the third quarter of fiscal 2013, operating expenses increased by $82.3 million, or 49.2%, to reach $249.4 million. For the first nine months of the fiscal year, operating expenses amounted to $654.5 million, an increase of $139.3 million, or 27.0%, when compared to the same period of fiscal 2012. These additional operating expenses are mostly attributable to the recent acquisitions, partly offset by cost reduction initiatives and the reduction in operating expenses in the Canadian cable services related to the deployment and support costs incurred in fiscal 2012 for the migration of Television service customers from analogue to digital. For further details on the Corporation's operating expenses, please refer to the "Canadian cable services", "American cable services" and "Enterprise services" sections.

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND OPERATING MARGIN

Fiscal 2013 third-quarter operating income before depreciation and amortization increased by $62.5 million, or 40.9%, to reach $215.1 million, and by $129.8 million, or 30.3%, to reach $558.0 million in the first nine months as a result of the recent acquisitions and the improvement in the Canadian cable services segment. Cogeco Cable's third-quarter operating margin decreased to 46.3% from 47.7% mainly due to lower margins generated by PEER 1 acquisition and increased to 45.7% from 44.9% for the first nine months of fiscal 2013 when compared to the comparable periods of the prior year. For further details on the Corporation's operating income before depreciation and amortization and operating margin, please refer to the "Canadian cable services", "American cable services" and "Enterprise services" sections.

CUSTOMER STATISTICS

Fiscal 2013 third-quarter and first nine months, PSU net additions for the Canadian cable services segment were lower than in the comparable period of the prior year mainly as a result of service category maturity, competitive offers and tightening of our customer credit controls and processes. PSU net additions for the American cable services segment were also lower than the last quarter resulting mainly from snowbirds returning home for the summer in its Miami cluster. For the third quarter net customer losses for Television service customers stood at 8,407 compared to 4,453 for fiscal 2012 third-quarter. Television service customer net losses are mainly due to the promotional offers of competitors for the video service combined with the tightening of our customer credit controls in Canada. Fiscal 2013 third-quarter HSI service customers grew by 2,351 compared to 2,835 in the third quarter of the prior year, and the number of net additions to the Telephony service stood at 2,725 customers compared to 7,864 customers for the same period of the prior year. For the nine-month periods, PSU net additions are stemming primarily from additional HSI services, partly offset by losses in Television services for both Canadian and American cable services segment. For further details on the Corporation's customer statistics, please refer to the "Canadian cable services" and "American cable services" sections.

RELATED PARTY TRANSACTIONS

Cogeco Cable Inc. is a subsidiary of COGECO Inc., which holds 32.1% of the Corporation's equity shares, representing 82.6% of the Corporation's voting shares. On September 1, 1992, Cogeco Cable Inc. executed a management agreement with COGECO Inc. under which the parent company agreed to provide certain executive, administrative, legal, regulatory, strategic and financial planning services and additional services to the Corporation and its subsidiaries (the "Management Agreement"). These services are provided by COGECO Inc.'s senior executives, including the President and Chief Executive Officer, the Senior Vice President and Chief Financial Officer, the Vice President Corporate Affairs, the Vice President Chief Legal Officer and Secretary, the Vice President Corporate Development, the Vice President and Treasurer, the Vice President Public Affairs and Communications and the Vice President Internal Audit. No direct remuneration is payable to such senior executives by the Corporation. However, the Corporation granted 71,233 stock options (47,729 in 2012) to these senior executives as executives of Cogeco Cable during the first nine months of fiscal year 2013. During the third quarter and first nine months of fiscal 2013, the Corporation charged COGECO Inc. an amount of $99,000 and $275,000 ($83,000 and $232,000 in 2012) with regards to the Corporation's stock options to these employees.

During the first nine months of fiscal 2013, the Corporation also granted 12,280 (11,006 in 2012) Incentive Share Units ("ISUs") to these senior executives as executives of Cogeco Cable. During the third quarter and first nine months of fiscal 2013, the Corporation charged COGECO Inc. an amount of $117,000 and $336,000 ($105,000 and $285,000 in 2012) with regards to the Corporation's ISUs granted to these employees.

Under the Management Agreement, the Corporation pays monthly fees equal to 2% of its total revenue to COGECO Inc. for the above-mentioned services. In 1997, the management fee was capped at $7 million per year, subject to annual upward adjustment based on increases in the Consumer Price Index in Canada. This limit can be increased under certain circumstances upon request to that effect by COGECO Inc. For fiscal year 2013, management fees have been set at a maximum of $9.6 million ($9.5 million in 2012), which was paid within the first six months of the fiscal year. For fiscal year 2012, management fees were also fully paid in the first half of the year. In addition, the Corporation reimburses COGECO Inc.'s out-of-pocket expenses incurred with respect to services provided to the Corporation under the Management Agreement.

Details regarding the Management Agreement and stock options and ISUs granted to COGECO Inc.'s employees are provided in the Corporation's 2012 Annual Report.

There were no other material related party transactions during the periods covered.

FIXED CHARGES

For the three and nine-month periods ended May 31, 2013, depreciation and amortization expense reached $103.4 million and $252.6 million, respectively compared to $61.7 million and $210.8 million for the same periods of the prior year, respectively. The increases result mainly from the recent acquisitions and from additional acquisition of property, plant and equipment in the Enterprise services segment, offset by higher fiscal 2012 depreciation expense related to the reduction of useful lives for certain home terminal devices for the Canadian cable services segment.

Fiscal 2013 third-quarter financial expense increased by $18.7 million to reach $35.0 million compared to $16.4 million in fiscal 2012 third-quarter. For the first nine months of fiscal 2013, financial expense increased by $31.7 million, or 66.1%, to reach $79.7 million, compared to $48.0 million in the prior year. Financial expense increased in both periods as a result of the cost of financing the recent acquisitions, including costs of approximately $3.5 million to refinance certain long-term debt with respect to these recent acquisitions.

INCOME TAXES

For the three and nine-month periods ended May 31, 2013, income tax expense amounted to $21.4 million and $54.9 million, respectively, compared to $21.4 million and $45.7 million, respectively, for the comparable periods in the prior year. The increase in the first nine months is mostly attributable to the improvement in operating income before depreciation and amortization, partly offset by the increase in depreciation and amortization and the financial expense.

PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS

For the three and nine-month periods ended May 31, 2013, profit for the period from continuing operations amounted to $53.3 million and $153.9 million, respectively, compared to a profit for the period from continuing operations of $53.2 million and $123.8 million for the comparable periods in fiscal 2012. Profit for the period attributable to owners of the Corporation for the three-month period reached $53.1 million, or $1.09 per share compared to $53.2 million, or $1.09 per share in fiscal 2012 and $153.9 million, or $3.16 per share compared to $123.8 million, or $2.54 per share for the nine-month period. Profit for the period from continuing operations increased slightly during the quarter mostly due to the operating income before depreciation and amortization generated by the Canadian cable services segment and by the recent acquisitions, partly offset by the acquisition costs, additional depreciation and amortization and financial expense, including costs of approximately $3.5 million to refinance certain long-term debt with respect to the recent acquisitions. Profit progression for the period from continuing operations for the first nine months of fiscal 2013 is mostly attributable to the increase in operating income before depreciation and amortization generated by the Canadian cable services segment and by the recent acquisitions, partly offset by the recent acquisitions costs and by the depreciation and amortization, financial expense and income tax increases explained above.

PROFIT FOR THE PERIOD

For the three and nine-month periods ended May 31, 2013, profit for the period amounted to $53.3 million and $153.9 million, respectively, compared to $53.2 million and $179.3 million for the comparable periods. Fiscal 2013 third-quarter profit for the period attributable to owners of the Corporation amounted to $53.1 million, or $1.09 per share, compared to $53.2 million, or $1.09 per share, in the third quarter of fiscal 2012. The increase in the quarter is attributable to the factors described above. For the nine-month period ended May 31, 2013, profit for the period attributable to owners of the Corporation amounted to $153.9 million or $3.16 per share, compared to $179.3 million, or $3.68 per share for the comparable period of fiscal 2012. The decline for the period is mostly attributable to last year's profit from the Portuguese subsidiary, Cabovisão - Televisão por Cabo, S.A. ("Cabovisão"), reported as discontinued operations and disposed of on February 29, 2012 and by the increases in depreciation and amortization, financial expense and acquisition costs all related to the recent acquisitions, partly offset by the operating income before depreciation and amortization generated by the Canadian cable services segment and by the recent acquisitions.

CASH FLOW ANALYSIS

OPERATING ACTIVITIES

Fiscal 2013 third-quarter cash flow from operations reached $156.0 million compared to $113.1 million, an increase of $42.9 million, or 37.9%, compared to the same period of prior year. For the first nine months, cash flow from operations reached $396.3 million compared to $314.7 million for the same period last year, an increase of $81.6 million, or 25.9%. Increases for both periods are primarily due to the improvement of operating income before depreciation and amortization, partly offset by financial expense increase and by the recent acquisition costs. For the third quarter, changes in non-cash operating activities generated cash outflows of $2.5 million compared to $12.1 million in the third quarter of fiscal 2012, mainly as a result of a lower decrease in trade and other payables, partly offset by a lower increase in provisions. For the first nine months, changes in non-cash operating activities generated cash outflows of $78.7 million compared to $71.6 million for the same period in fiscal 2012, mainly as a result of a decrease in provisions compared to an increase in prior year, partly offset by an increase in deferred and prepaid revenue and other liabilities compared to a decrease in the prior year.

INVESTING ACTIVITIES

BUSINESS COMBINATIONS IN FISCAL 2013

On March 6, 2013, Cogeco Cable, completed the working capital adjustments in relation to the ABB acquisition, which increased income tax receivable by $3.4 million and goodwill by $0.6 million, and decreased trade and other payables assumed by $1.5 million and income tax liabilities assumed by $0.1 million. In addition, on April 3, 2013, Cogeco Cable completed the acquisition of the remaining 3.43% of the issued and outstanding shares of PEER 1 for a cash consideration of $17 million. The acquisition of non-controlling interest resulted has not changed the purchase price allocation. On January 31, 2013, the Corporation completed the acquisition of PEER 1 and on November 30, 2012, the acquisition of ABB. These acquisitions were accounted for using the purchase method.

The preliminary purchase price allocation of these acquisitions, pending the completion of the valuation of the net assets acquired, is as follows:

ACQUISITIONS OF PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE AND OTHER ASSETS

Investing activities, including acquisition of property, plant and equipment segmented according to the National Cable Television Association ("NCTA") standard reporting categories, are as follows:

For the three and nine-month periods ended May 31, 2013, acquisition of property, plant and equipment amounted to $108.3 million and $286.5 million, respectively, compared to $83.5 million and $240.4 million for the comparable periods of fiscal 2012. In the Canadian cable services, fiscal 2013 third-quarter acquisition of property, plant and equipment amounted to $47.6 million, a decrease of 31.1% when compared to $69.1 million in the third quarter of the prior year. For the nine-month period ended May 31, 2013, acquisition of property, plant and equipment amounted to $163.4 million, a decrease of 21.8% when compared to the prior year. For the three and nine-month periods ended May 31, 2013, acquisition of property, plant and equipment in the American cable services segment amounted $13.3 million and $26.5 million, respectively. The decreases in the Canadian cable services segment are mainly attributable to the following factors:

• A decrease in scalable infrastructure due to the timing of initiatives to improve network capacity in existing areas served;

• A decrease in customer premise equipment, mainly due to the achievement in fiscal 2012 of the first phase in the conversion of Television service customers from analogue to digital and the lower PSU growth as a result of service maturity; and

• An increase in network upgrade and rebuild to deploy advanced technologies such as DOCSIS 3.0 and Switched Digital Video in existing areas served;

Fiscal 2013 third-quarter and first nine months acquisition of property, plant and equipment in the Enterprise services segment, including the capital expenditures of the recent acquisition of PEER 1, amounted to $47.4 million and $96.6 million compared to $14.4 million and $31.5 million in the comparable periods of fiscal 2012, respectively. The increases for both periods are mainly due to the construction of a new data centre facility in Barrie, Ontario, opened last June, and by the expansion of data centre facilities in Toronto, Canada and in Portsmouth, England as well as the fiber expansion in the Toronto area in order to fulfill orders from new customers demand.

Acquisition of intangible and other assets are mainly attributable to reconnect and additional service activation costs as well as other customer acquisition costs. For the third quarter and the first nine months of fiscal 2013, the acquisition of intangible and other assets amounted to $4.5 million and $13.7 million, compared to $4.0 million and $10.6 million for the same periods last year, respectively.

FREE CASH FLOW AND FINANCING ACTIVITIES

In the third quarter of fiscal 2013, free cash flow amounted to $43.1 million, $17.5 million, or 68.4%, higher than in the comparable period of fiscal 2012. For the nine-month period, free cash flow amounted to $96.2 million, $32.5 million, or 50.9%, higher than the same period of last year. Free cash flow increase for both periods over the prior year are due to the improvement of operating income before depreciation and amortization in the Canadian cable services segment and the recent acquisitions, partly offset by the increase in financial expense, the recent acquisition costs as well as the increase in acquisition of property, plant and equipment.

In the third quarter of fiscal 2013, higher Indebtedness level provided for a cash decrease of $17.2 million, mainly due to the issuance of $300 million Senior Secured Debentures Series "4" (the "Debentures") for a net proceed of $297.1 million, net of transaction costs of $2.9 million and the issuance of a private placement of $410.4 million (US$400 million) Senior Unsecured Notes (the "2020 Notes") for a net proceed of $402.6 million (US$392.4 million), net of transaction costs of $7.8 million (US$7.6 million). In addition, Cogeco Cable used the net proceeds under the Debentures and the 2020 Notes to repay the Canadian Term Facility amounting to $175 million, the US Term Facility amounting to $230.8 million (US$225 million), the $114.7 Revolving loan in connection with the financing of the acquisition of PEER 1 and the $192.4 million Term Revolving Facility. In the third quarter of fiscal 2012, Indebtedness remained essentially the same.

For the nine-month period of fiscal 2013, higher Indebtedness level provided for a cash increase of $1.9 billion, mainly due to the issuance of the 2020 Notes and the Debentures, described above, as well as draw-down on the existing Term Revolving Facility of $411.9 million (US$420 million) including the repayment made during the quarter explained above and the new First Lien Credit Facilities of $637.4 million (US$660 million for a net proceed of US$641.5 million, net of transaction costs of US$18.5 million) to finance the acquisition of ABB as well to drawings of $125.1 million, under Secured Credit Facilities to finance the acquisition of PEER 1, net of the repayment made during the third quarter explained above. In the first nine months of fiscal 2012, Indebtedness affecting cash increased by $86.3 million mainly due to the issuance, on February 14, 2012, of $200 million Senior Secured Debentures Series 3 ("Fiscal 2012 debentures") for net proceeds of $198.1 million which was used to repay the $110 million Term Revolving Facility.

During the third quarter of fiscal 2013, a quarterly dividend of $0.26 per share was paid to the holders of subordinate and multiple voting shares, totaling $12.6 million, when compared to a dividend paid of $0.25 per share, or $12.2 million in the third quarter of fiscal 2012. Dividend payments in the first nine months totaled $0.78 per share, or $37.9 million, compared to $0.75 per share, or $36.5 million the year before.

As at May 31, 2013, the Corporation had a working capital deficiency of $149.7 million compared to $17.2 million at August 31, 2012. The increase of $132.5 million in the deficiency is mainly due to the decrease of $177.5 million in cash and cash equivalents, primarily used for the acquisition of ABB. The deficiency was also impacted by an increase of $22.0 million in trade and other receivables, a decrease of $29.8 million in trade and other payables and by an increase of $14.7 million in deferred and prepaid revenue. As part of the usual conduct of its business, Cogeco Cable maintains a working capital deficiency due to a low level of accounts receivable as a large portion of the Corporation's customers pay before their services are rendered, unlike trade and other payables, which are paid after products are delivered or services are rendered, thus enabling the Corporation to use cash and cash equivalents to reduce Indebtedness.

At May 31, 2013, the Corporation had used $439.9 million of its $750 million Term Revolving Facility for a remaining availability of $310.1 million. In addition, the Corporation also benefits from additional Revolving Facilities of $251 million as a result of the acquisition of PEER 1, of which $131.7 million was used at May 31, 2013 for a remaining availability of $119.3 million. Two subsidiaries of the Corporation also benefits from a Revolving Facility of $103.7 million (US$100 million) related to the acquisition of ABB, of which $55.7 million (US$53.7 million) was used at May 31, 2013 for a remaining availability of $48 million (US$46.3 million).

FINANCIAL POSITION

As a result of the acquisition of ABB and PEER 1, most financial position balances have changed significantly since August 31, 2012. For further details on the preliminary allocation of the purchase price of the acquisitions, please refer to the investing activities under the "Cash flow analysis" section.

OUTSTANDING SHARE DATA

A description of Cogeco Cable's share data at June 30, 2013 is presented in the table below. Additional details are provided in note 10 of the condensed interim consolidated financial statements.

FINANCING

In the normal course of business, Cogeco Cable has incurred financial obligations, primarily in the form of long-term debt, operating and finance leases and guarantees. Cogeco Cable's obligations, as discussed in the 2012 Annual Report, have not materially changed since August 31, 2012, except as mentioned below.

On May 28, 2013, the First Lien Credit Facilities were amended. Pursuant to the amendment, US$50 million of the Term Loan A Facility was converted into the Revolving Facility resulting in amounts borrowed under these two tranches of US$190 million and of US$100 million, respectively, while the Term Loan B Facility remained the same. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin, with a LIBOR floor for the Term Loan B Facility. The applicable margin was reduced by 0.625% for the Revolving Facility and for the Term Loan A Facility and by 1.00% for the Term Loan B Facility. In addition, the LIBOR floor for the Term Loan B Facility was reduced from 1.00% to 0.75%. All other terms and conditions remained the same. In connection with the amendment, transaction costs of US$6.2 million were incurred. In connection with the acquisition of ABB on November 30, 2012, the Corporation initially concluded, through two of its US subsidiaries, First Lien Credit Facilities totaling US$710 in three tranches for a net proceed of US$641.5 million net of transaction costs of US$18.5 million. The first tranche, a Term Loan A Facility will mature on November 30, 2017, the second tranche, a Term Loan B Facility will mature on November 30, 2019 and the third tranche, a Revolving Credit Facility will mature on November 30, 2017. Effective on December 31, 2013, the Term Loan A Facility is subject to quarterly amortization of $3 million in the first year, $6 million in the second year and $7.2 million in the third and fourth years. Effective on December 31, 2012, the Term Loan B Facility is subject to quarterly amortization of 0.25% until its maturity date. In addition to the fixed amortization schedule and commencing in the first quarter of fiscal 2015, loans under the Term Loan Facilities shall be prepaid according to a Prepayment Percentage of excess cash flow generated during the prior fiscal year. The First Lien Credit Facilities are non-recourse to the Corporation, its Canadian subsidiaries and PEER 1's subsidiaries and are indirectly secured by a first priority fixed and floating charge on substantially all present and future real and personal property and undertaking of every nature and kind of ABB and its subsidiaries. The provisions under these facilities provide for restrictions on the operations and activities of ABB and its subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness and investments, distributions and maintenance of certain financial ratios.

On May 27, 2013, Cogeco Cable completed pursuant to a public debt offering, the issue of $300 million Senior Secured Debentures Series "4" (the "Debentures") for a net proceed of $297.1 million, net of transaction costs of $2.9 million. These Debentures mature on May 26, 2023 and bear interest at 4.175% per annum payable semi-annually. These Debentures are indirectly secured by a first priority fixed and floating charge and a security interest on substantially all present and future real and personal property and undertaking of every nature and kind of the Corporation and its subsidiaries except for ABB and certain immaterial subsidiaries (the "unrestricted subsidiaries"). The provisions under these Debentures provide for restrictions on the operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness, dispositions and maintenance of certain financial ratios.

On April 23, 2013, Cogeco Cable completed a private placement of $410.4 million (US$400 million) aggregate principal amount of Senior Unsecured Notes (the "2020 Notes") for a net proceed of $402.6 million (US$392.4 million) net of transaction costs of $7.8 million (US$7.6 million). These 2020 Notes mature on May 1, 2020 and bear interest at 4.875% per annum payable semi-annually. These 2020 Notes are guaranteed on a senior unsecured basis, jointly and severally, by its subsidiaries except for the unrestricted subsidiaries. The provisions under these 2020 Notes provide for restrictions on the operations and activities of Cogeco Cable and its subsidiaries except for the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness, investments and distributions.

On April 23, 2013, Cogeco Cable reimbursed the Canadian Term Facility of $175 million and the US Term Facility of US$225 million in connection with the financing for the acquisition of PEER 1. As a result of the acquisition of PEER 1 on January 31, 2013, the Corporation concluded Secured Credit Facilities totaling approximately $650 million with a syndicate of lenders in four tranches for a net proceed of $640.3 million net of transaction costs of $2.8 million. The first tranche, a Canadian Term Facility amounting to $175 million, the second tranche, a US Term Facility amounting to US$225 million, the third tranche, a Revolving Facility of $240 million and the fourth tranche, a UK Revolving Facility of £7 million. The Revolving Facility is available in Canadian dollars, US dollars, British Pounds and Euros and interest rates are based on Bankers' Acceptance, LIBOR Loans in US dollars, British Pounds or Euros, Prime Rate Loans or US and British Pounds Base Rate Loans, plus the applicable margin. The UK Revolving Facility is available in British Pounds and interest rates are based on British Pounds Base Rate Loans or British Pounds LIBOR Loans.

The Secured Credit Facilities will mature on January 31, 2017. The Secured Credit Facilities are indirectly secured by a first priority fixed and floating charge on substantially all present and future real and personal property and undertaking of every nature and kind of the Corporation and most of its subsidiaries except for the unrestricted subsidiaries, and provides for certain permitted encumbrances, including purchased money obligations, existing funded obligations and charges granted by any subsidiary prior to the date when it becomes a subsidiary, subject to a maximum amount. The provisions under this facility provide for restrictions on the operations and activities of the Corporation but do not cover the unrestricted subsidiaries. Generally, the most significant restrictions relate to permitted investments and dividends on multiple and subordinate voting shares, as well as incurrence and maintenance of certain financial ratios primarily linked to operating income before amortization, financial expense and total indebtedness.

FINANCIAL MANAGEMENT

The Corporation has entered into cross-currency swap agreements to set the liability for interest and principal payments on its US$190 million Senior Secured Notes Series A maturing on October 1, 2015. These agreements have the effect of converting the U.S. interest coupon rate of 7.00% per annum to an average Canadian dollar interest rate of 7.24% per annum. The exchange rate applicable to the principal portion of the debt has been fixed at $1.0625 per US dollar. The Corporation elected to apply cash flow hedge accounting on these derivative financial instruments. During the first nine months of fiscal 2013, amounts due under the US$190 million Senior Secured Notes Series A increased by $9.7 million due to the US dollar's appreciation relative to the Canadian dollar. The fair value of cross-currency swaps liability decreased by a net amount of $9.3 million, of which a decrease of $9.7 million offsets the foreign exchange loss on the debt denominated in US dollars. The difference of $0.4 million was recorded as a decrease of other comprehensive income. During the first nine months of fiscal 2012, amounts due under the US$190 million Senior Secured Notes Series A increased by $10.2 million due to the US dollar's appreciation over the Canadian dollar. The fair value of cross- currency swaps liability decreased by a net amount of $11.4 million, of which $10.2 million offsets the foreign exchange loss on the debt denominated in US dollars.

Furthermore, the Corporation's net investment in foreign subsidiaries is exposed to market risk attributable to fluctuations in foreign currency exchange rates, primarily changes in the values of the Canadian dollar versus the US dollar and British Pound. This risk was mitigated since the major part of the purchase prices for ABB and PEER 1 were borrowed directly in US dollars and British Pounds. These debts were designated as hedges of net investments in foreign operations. At May 31, 2013, the net investment for ABB and for PEER 1 amounted to US$1.1 billion and £66.6 million while long-term debt amounted to US$841.7 million. and £69.1 million.The exchange rate used to convert the US dollar currency and British Pound currency into Canadian dollars for the statement of financial position accounts at May 31, 2013 was $1.0368 per US dollar and $1.5752 per British Pound. The impact of a 10% change in the exchange rate of the US dollar and British Pound into Canadian dollars would change other comprehensive income by approximately $27.5 million.

The Corporation is also impacted by foreign currency exchange rates, primarily changes in the values of the US dollar relative to the Canadian dollar with regards to purchases of certain equipment, as the majority of customer premise equipment is purchased and subsequently paid in US dollars. Please consult the "Foreign Exchange Risk" section in Note 13 of the condensed interim consolidated financial statements for further details.

DIVIDEND DECLARATION

At its July 10, 2013 meeting, the Board of Directors of Cogeco Cable declared a quarterly eligible dividend of $0.26 per share for multiple voting and subordinate voting shares, payable on August 7, 2013, to shareholders of record on July 24, 2013. The declaration, amount and date of any future dividend will continue to be considered and approved by the Board of Directors of the Corporation based upon the Corporation's financial condition, results of operations, capital requirements and such other factors as the Board of Directors, at its sole discretion, deems relevant. There is therefore no assurance that dividends will be declared, and if declared, the amount and frequency may vary.

SEGMENTED OPERATING RESULTS

The Corporation reports its operating results in three operating segments: Canadian cable services, American cable services and Enterprise services. The reporting structure reflects how the Corporation manages the business activities to make decisions about resources to be allocated to the segment and to assess its performance. For the purpose of segmented operating results, operating results from the ABB acquisition are presented in the American cable services and operating results from the PEER 1 acquisition are included in the Enterprise services segment.

CANADIAN CABLE SERVICES

CUSTOMER STATISTICS

Fiscal 2013 third-quarter and first nine months PSU net additions were lower than in the comparable periods of the prior year mainly as a result of service category maturity, competitive offers and tightening of our customer qualifications. For the third quarter and the first nine months net customer losses for Television service customers stood at 7,363 and 17,771, respectively, compared to 4,453 and 9,112 for the same periods of the prior year. Television service customer net losses are mainly due to the promotional offers of competitors for the video service combined with the tightening of our customer credit controls. Fiscal 2013 third-quarter HSI service customers grew by 1,160 compared to 2,835 in the third quarter of the prior year, and the number of net additions to the Telephony service stood at 2,938 customers compared to 7,864 customers for the same period of the prior year. For the first nine months of fiscal 2013, net additions for HSI service customers stood at 15,791 and Telephony net additions at 14,137 compared to 27,638 and 46,179, respectively, for the comparable periods of the prior year. HSI and Telephony net additions continue to stem from the enhancement of the product offering, the impact of the bundled offer (Cogeco Complete Connection) of Television, HSI and Telephony services, and promotional activities.

OPERATING RESULTS

Revenue

Fiscal 2013 third-quarter revenue increased by $8.8 million, or 3.0%, to reach $306.4 million, when compared to the same period last year. For the first nine months, revenue amounted to $917.4 million, an increase of 3.5% when compared to the first nine months of fiscal 2012. These increases are primarily due to rate increases implemented in June and July 2012 in Quebec and Ontario.

Operating expenses

For the period ended May 31, 2013, operating expenses increased by $4.0 million, or 2.7%, to $153.3 million. For the first nine months, operating expenses amounted to $465.4 million, a decrease of $0.6 million when compared to the same period of prior year. Operating expenses increased during the third quarter as a result of additional personnel to manage the PSU base, programming costs increases and incentives programs such as bonus, partly offset by cost reduction initiatives.

Operating income before depreciation and amortization and operating margin

As a result of revenue growth exceeding operating expenses, fiscal 2013 third-quarter operating income before depreciation and amortization amounted to $153.1 million, or 3.2% higher than in the same period of the prior year. For the first nine months of fiscal 2013, operating income before depreciation and amortization amounted to $452.0 million, or 7.4% higher than in the same period of the prior year. Operating margin increased to 50.0% from 49.8% when compared to fiscal 2012 third-quarter and from 47.5% to 49.3% for the first nine months of fiscal 2013 when compared to prior year.

AMERICAN CABLE SERVICES

On November 30, 2012, the Corporation completed the acquisition of ABB, an independent cable system operator formed in 2003 and providing Analogue and Digital Television, as well as HSI and Telephony services. ABB operates cable systems in Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina. Fiscal 2013 nine-month period included six months of operations of ABB.

CUSTOMER STATISTICS

Fiscal 2013 third-quarter, PSU net losses stood at 66 compared to net additions of 3,694 for the first nine months. The decrease in PSU for the quarter is mainly attributable to seasonal variations in the Miami area due to snowbirds leaving for the summer, partly offset by the increases in residential HSI subscribers. PSU increases for the first nine months is mostly attributable to the increase in residential HSI subscribers through additional marketing focus on bundle package offerings and increased overall demand given the higher speed offerings with the rollout of DOCSIS 3.0 capabilities in 2012 to a majority of ABB's markets, as well as increased commercial HSI and Telephony growth driven by improved sales focus and resources.

OPERATING RESULTS

Fiscal 2013 third-quarter revenue reached $90.4 million mainly as a result of (i) an increase in HSI revenue from continued marketing focus for this service offering driving HSI subscriber growth; (ii) an increase in Telephony revenue generated by increases in subscriber level and an increase in commercial revenue as ABB continues to expand its non-residential customer base through targeted marketing efforts. Fiscal 2013 third-quarter operating expenses amounted to $49.1 million and operating income before depreciation and amortization reached $41.2 million, and consequently, operating margin stood at 45.6%. ABB's operating results are in line with management's expectations.

ENTERPRISE SERVICES

OPERATING RESULTS

Revenue

Fiscal 2013 third-quarter revenue reached $68.1 million compared to $22.7 million for the same period last year. For the first nine months, revenue amounted to $129.6 million, an increase of 94.3% when compared to the first nine months of fiscal 2012. Revenue increased for both periods primarily due to the four months results of PEER 1 recently acquired as well as the organic growth of Cogeco Data Services ("CDS").

Operating expenses

For the third quarter of fiscal 2013, operating expenses increased by $31.5 million to $44.7 million. For the first nine months, operating expenses amounted to $82.1 million, an increase of $42.3 million when compared to the first nine months of fiscal 2012. Operating expenses increased for both periods primarily due to PEER 1 recently acquired as well as CDS's organic growth.

Operating income before depreciation and amortization and operating margin

As a result of revenue growth exceeding the increase in operating expenses, fiscal 2013 third-quarter operating income before depreciation and amortization increased by $14.0 million to reach $23.4 million and by $20.6 million, or 76.6%, for the first nine months to reach $47.5 million, when compared to the same periods of the prior year. Operating margin decreased to 34.4% from 41.6% in the third quarter and to 36.7% from 40.4% for first nine months compared to the comparable periods of fiscal 2012 as a result of lower margins business activities from PEER 1.

FISCAL 2013 FINANCIAL GUIDELINES

Giving effect to the improvement of the Corporation's financial performance in the Canadian Cable services segment with regards to the operating income before depreciation and amortization mainly as a result of costs reduction initiatives, management revised upwards its operating income before depreciation and amortization projections issued on April 10, 2013 from $767 million to $780 million which should contribute to increase the operating margin from 45.2% to 46.0%. PSU growth should decline from 35,000 to 15,000 as a consequence of a more competitive environment in the Canadian services segment combined with service category maturity and tighter customer credit qualification. However, revenue projections should remain the same as a result of the rate increases implemented in June 2013 in Quebec and Ontario. Furthermore, the Corporation will use the net proceeds of the issuance of US$215 million Senior Secured Notes, under a private placement, on June 27, 2013, and borrow under its credit facilities to repay, on July 29, 2013, all the outstanding amount of $300 million Senior Secured Debentures Series 1, due on June 9, 2014. Therefore, financial expense should reach $125 million, an increase of $12 million, mainly as a result of the estimated make-whole premium on the early repayment of the Senior Secured Debentures Series 1.

Fiscal 2013 revised financial guidelines are as follows:

FISCAL 2014 PRELIMINARY FINANCIAL GUIDELINES

The fiscal 2014 preliminary financial guidelines take into consideration the current uncertain global economic environment. These preliminary guidelines also take into consideration the competitive environment that prevails in Canada, the deployment of new technologies such as Fibre to the Home ("FTTH"), Fibre to the Node ("FTTN") and Internet Protocol Television ("IPTV") by the incumbent telecommunications providers.

For fiscal 2014, Cogeco Cable expects to achieve revenue of $1.935 billion, representing growth of $240 million, or 14.2% when compared to the revised fiscal 2013 projections issued on July 10, 2013. Revenue should increase as a result of the full year impact from the recent acquisitions. In the Cable services segment, revenue should stem primarily from targeted marketing initiatives to improve penetration rates of the Digital Television, HSI and Telephony services. Furthermore, the Digital Television service should continue to benefit from the customers' ongoing strong interest in the Corporation's growing HD service offerings. Revenue will also benefit, in the Canadian cable services, from the impact of rate increases implemented in June 2013 in Quebec and Ontario, ranging on average between $2 to $3 per HSI and Telephony service customers. Cogeco Cable's strategies include consistently effective marketing to residential and business customers, competitive product offerings and superior customer service, which combined, lead to the expansion and loyalty of the Television service clientele. As the penetration of residential HSI, Telephony and Digital Television services increase, the new demand for these products should slow in the Canadian cable services, reflecting service category maturity. However, growth in the commercial and business sector is expected to continue at a consistent pace in the Cable services segment. In the Enterprise services segment, revenue growth should stem primarily from the hosting services and the opening of the Barrie data centre facility.

As a result of the full year impact from the recent acquisitions, the increased costs to service additional customers, inflation and manpower increases, as well as the continuation of the marketing initiatives and retention strategies, operating expenses are expected to expand by approximately $135 million, or 14.8% in the 2014 fiscal year when compared to the revised 2013 projections.

For fiscal 2014, the Corporation expects operating income before depreciation and amortization of $885 million, an increase of $105 million, or 13.5% when compared to the revised projections for 2013. The operating margin is expected to reach approximately 45.7% in fiscal 2014, compared to the revised projections for the 2013 fiscal year of 46.0%, reflecting operating expenses growth slightly higher than the revenue growth as well as lower margins business activities from the Enterprise services segment.

Cogeco Cable expects the depreciation and amortization of property, plant and equipment and intangible assets to increase by $67 million for fiscal 2014, mainly from the full year impact of recent acquisitions. Cash flows from operations should finance capital expenditures and the increase in intangible assets amounting to $425 million, an increase of $24 million when compared to the revised 2013 projections. Capital expenditures projected for the 2014 fiscal year are mainly due to scalable infrastructure for product enhancements and the deployment of new technologies, line extensions to expand existing territories, support capital to improve business information systems and support facility requirements and expansion for the Enterprise services segment in order to fulfill orders from new customers.

Fiscal 2014 free cash flow is expected to amount to $225 million, an increase of $80 million, or 55.2% when compared to the projected free cash flow of $145 million for fiscal 2013, resulting from the growth in operating income before depreciation and amortization, partly offset by additional capital expenditures and financial expense from the full year impact of the recent acquisitions of ABB and PEER 1 and by an increase in current income taxes. Generated free cash flow will reduce Indebtedness net of cash and cash equivalent, thus improving the Corporation's net leverage ratios. Financial expense should amount to $130 million an increase of $5 million related to ABB's and PEER 1's acquisition financing. As a result, profit for the year of approximately $245 million should be achieved compared to $205 million for the revised projections for fiscal 2013.

Fiscal 2014 preliminary financial guidelines are as follows:

CONTROLS AND PROCEDURES

The President and Chief Executive Officer ("CEO") and the Senior Vice President and Chief Financial Officer ("CFO"), together with Management, are responsible for establishing and maintaining adequate disclosure controls and procedures and internal controls over financial reporting, as defined in National Instrument 52-109. Cogeco Cable's internal control framework is based on the criteria published in the report Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

The CEO and CFO, supported by Management, evaluated the design of the Corporation's disclosure controls and procedures and internal controls over financial reporting as of May 31, 2013, and have concluded that they are adequate. Furthermore, no significant changes to the internal controls over financial reporting occurred during the quarter ended May 31, 2013, except as described below with respect to ABB and PEER 1.

On November 30, 2012, the Corporation completed the acquisition of ABB and, subsequently on January 31, 2013 and on April 3, 2013, the Corporation acquired 100% of the issued and outstanding shares of PEER 1. Due to the short period of time between those acquisition dates and the certification date on July 10, 2013, management was unable to complete its review of the design of Internal Controls Over Financial Reporting ("ICFR") for the recent acquisitions. At May 31, 2013, risks were however mitigated as management was fully apprised of any material events affecting these recent acquisitions. In addition, all the assets and liabilities acquired were valued and recorded in the condensed interim consolidated financial statements as part of the preliminary purchase price allocation process and both ABB and PEER 1 results of operations were also included in the Corporation's consolidated results. ABB constitutes 14% of revenue, 13% of profit of the period, 33% of the total assets, 23% of the current assets, 33% of the non current assets, 14% of the current liabilities and 25% of the non current liabilities of the consolidated condensed interim financial statements for the nine-month period ended May 31, 2013. PEER 1 constitutes 5% of revenue, -8% of profit of the period, 15% of the total assets, 12% of the current assets, 15% of the non current assets, 10% of the current liabilities and 10% of the non current liabilities of the consolidated condensed interim financial statements for the nine-month period ended May 31, 2013. In the upcoming quarters, management will complete its review of the design of ICFR for ABB and PEER 1 and assess its effectiveness. The business combinations of fiscal 2013 under the "Cash flow analysis" section of this MD&A presents summary financial information about the preliminary purchase price allocation, assets acquired and liabilities assumed as well as other financial information about ABB and PEER 1 business impact on the consolidated results of the Corporation. Other financial information about ABB can be found in the Business Acquisition Report filed by the Corporation on www.sedar.com, on February 13, 2013.

UNCERTAINTIES AND MAIN RISK FACTORS

The uncertainties and main risk factors faced by the Corporation have not changed significantly for its Canadian cable services since August 31, 2012, except for the proposed Astral/Bell amended Arrangement Agreement described below. A detailed description of the uncertainties and main risk factors faced by Cogeco Cable can be found in the 2012 Annual Report and the Corporation's MD&A for the period ended February 28, 2013 filed on SEDAR, available at www.sedar.com.

On June 27, 2013, the CRTC approved the application by Astral Media Inc. ("Astral") to transfer the control of Astral to BCE Inc. ("Bell"). The CRTC concluded that the transaction as modified is in the public interest and advances the objectives set out for the Canadian broadcasting. Specific measures have been imposed by the CRTC to ensure that the transaction benefits Canadians and the Canadian broadcasting system. As a part of the conditions, BCE will have to sell 10 of the radio stations it acquired in the deal as well as 11 specialty TV channels and be subject to greater increase of regulatory oversight with respect to affiliation agreements. Bell will control over forty percent (40 %) of Cogeco Cable's programming service affiliation payments at current wholesale rates. In the event of future disputes concerning the terms of affiliation between Cogeco Cable and Bell for services controlled by Bell, the CRTC may set such terms at either party's request following a dispute resolution process, and the services may not be interrupted by either party while such dispute resolution process is pending.

FUTURE ACCOUNTING DEVELOPMENTS IN CANADA

A number of new standards, interpretations and amendments to existing standards were issued by the International Accounting Standard Board ("IASB") that are mandatory but not yet effective for the period ended May 31, 2013 and have not been applied in preparing the condensed interim consolidated financial statements. These standards are described under "Future accounting developments in Canada" in the Corporation's 2012 annual MD&A, available at www.sedar.com and www.cogeco.ca.

CHANGES IN CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There has been no significant change in Cogeco Cable's accounting policies, estimates and future accounting pronouncements since August 31, 2012. A description of the Corporation's policies and estimates can be found in the 2012 Annual Report, available at www.sedar.com and www.cogeco.ca.

NON-IFRS FINANCIAL MEASURES

This section describes non-IFRS financial measures used by Cogeco Cable throughout this MD&A. It also provides reconciliations between these non-IFRS measures and the most comparable IFRS financial measures. These financial measures do not have standard definitions prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies. These measures include "cash flow from operations", "free cash flow", "operating income before depreciation and amortization" and "operating margin".

CASH FLOW FROM OPERATIONS AND FREE CASH FLOW

Cash flow from operations is used by Cogeco Cable's management and investors to evaluate cash flows generated by operating activities, excluding the impact of changes in non-cash operating activities, amortization of deferred transaction costs and discounts on long-term debt, income taxes paid, current income tax expense, financial expense paid and financial expense. This allows the Corporation to isolate the cash flows from operating activities from the impact of cash management decisions. Cash flow from operations is subsequently used in calculating the non-IFRS measure, "free cash flow". Free cash flow is used, by Cogeco Cable's management and investors, to measure its ability to repay debt, distribute capital to its shareholders and finance its growth.

The most comparable IFRS measure is cash flow from operating activities. Cash flow from operations is calculated as follows:

Free cash flow is calculated as follows:

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND OPERATING MARGIN

Operating income before depreciation and amortization is used by Cogeco Cable's management and investors to assess the Corporation's ability to seize growth opportunities in a cost effective manner, to finance its ongoing operations and to service its debt. Operating income before depreciation and amortization is a proxy for cash flows from operations excluding the impact of the capital structure chosen, and is one of the key metrics used by the financial community to value the business and its financial strength. Operating margin is a measure of the proportion of the Corporation's revenue which is available, before income taxes, to pay for its fixed costs, such as interest on Indebtedness. Operating margin is calculated by dividing operating income before depreciation and amortization by revenue.

The most comparable IFRS financial measure is operating income. Operating income before depreciation and amortization and operating margin are calculated as follows:

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

SEASONAL VARIATIONS

Cogeco Cable's operating results are not generally subject to material seasonal fluctuations except as follows. In the Canadian cable services segment, the customer growth in the Television service customers and HSI service are generally lower in the second half of the fiscal year as a result of a decrease in economic activity due to the beginning of the vacation period, the end of the television season, and students leaving their campuses at the end of the school year. Cogeco Cable offers its services in several university and college towns such as Kingston, Windsor, St.Catharines, Hamilton, Peterborough, Trois-Rivières and Rimouski in Canada. In the American cable services segment, the customer growth in the Television service customers and HSI service are also generally lower in the second half of the fiscal year as a result of a decrease in economic activity due to the snowbirds leaving for the summer season essentially in the Miami area. Furthermore, the third and fourth quarter's operating margin is usually higher as no management fees are paid to COGECO Inc. Under the Management Agreement, Cogeco Cable pays a fee equal to 2% of its total revenue subject to a maximum amount. As the maximum amount has been reached in the second quarter of fiscal 2013, Cogeco Cable will not pay management fees in the second half of fiscal 2013. Similarly, as the maximum amount was paid in the first six months of fiscal 2012, Cogeco Cable paid no management fees in the second half of the previous fiscal year.

ADDITIONAL INFORMATION

This MD&A was prepared on July 10, 2013. Additional information relating to the Corporation, including its Annual Information Form, is available on the SEDAR website at www.sedar.com.

CUSTOMER STATISTICS