Cogeco Communications Inc. - Interim / Quarterly Report 2021

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MANAGEMENT'S DISCUSSION AND ANALYSIS ("MD&A") Three and nine-month periods ended May 31, 2021

1. FORWARD-LOOKING STATEMENTS

Certain statements contained 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 Communications Inc.'s ("Cogeco Communications" or the "Corporation") 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. Particularly, statements regarding the Corporation's financial guidelines, future operating results and economic performance, objectives and strategies are forwardlooking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which Cogeco Communications believes are reasonable as of the current date. Refer in particular to the "Corporate objectives and strategies" and "Fiscal 2021 financial guidelines" sections of the Corporation's 2020 annual MD&A, and the "Fiscal 2021 revised financial guidelines" and "Fiscal 2022 preliminary financial guidelines" sections of the current MD&A for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Cogeco Communications currently expects. These factors include risks such as competitive risks, business risks (including potential disruption to our supply chain), regulatory risks, public health crisis and emergencies such as the current COVID-19 pandemic, technology risks (including cybersecurity risk), financial risks (including variations in currency and interest rates), economic conditions, human-caused and natural threats to our network, infrastructure and systems, community acceptance risks, ethical behavior risks, ownership risks and litigation risks, many of which are beyond the Corporation's control. For more exhaustive information on these risks and uncertainties, the reader should refer to the "Uncertainties and main risk factors" sections of the Corporation's 2020 annual MD&A and of the current MD&A. These factors are not intended to represent a complete list of the factors that could affect Cogeco Communications and future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forwardlooking information contained in this MD&A which represent Cogeco Communications' expectations as of the date of this MD&A (or as of the date they are otherwise stated to be made) and are subject to change after such date. While management may elect to do so, the Corporation is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as 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 for the three and nine-month periods ended May 31, 2021 prepared in accordance with the International Financial Reporting Standards ("IFRS") and the Corporation's 2020 Annual Report.

In preparing this MD&A, the Corporation has taken into account information available up to July 14, 2021, the date of this MD&A, unless otherwise indicated. Additional information relating to the Corporation, including its Annual Report and Annual Information Form, is available on the SEDAR website at www.sedar.com or on the Corporation's website at corpo.cogeco.com.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 4

2. CORPORATE OBJECTIVES AND STRATEGIES

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COGECO COMMUNICATIONS INC. Q3 2021 MD&A 5

Each Business Unit of the Corporation has in turn elaborated a strategic plan that is aligned to the growth pillars defined above. For further details on the key areas of focus of those strategic plans, please refer to the Corporation's 2020 Annual Report available on www.sedar.com or on the Corporation's website at corpo.cogeco.com.

The Corporation measures its financial performance, with regards to these objectives, by monitoring revenue, adjusted EBITDA[(1)] , free cash flow[(1)] and capital intensity[(1)] on a constant currency basis[(1)] .

2.1 KEY PERFORMANCE INDICATORS

Overall, fiscal 2021 third-quarter financial results were in line with Cogeco Communications' revised financial guidelines as issued on January 14, 2021. Accordingly, Cogeco Communications maintains its fiscal 2021 revised financial guidelines.

Please refer to the "Fiscal 2021 revised financial guidelines" section for further details.

REVENUE

For the first nine months of fiscal 2021, revenue increased by 5.5% (8.1% in constant currency) resulting from:

growth of 3.2% (8.8% in constant currency) in the American broadband services segment; and
an increase of 7.5% (7.5% in constant currency) in the Canadian broadband services segment, mainly from revenue generated from the DERYtelecom acquisition completed on December 14, 2020; partly offset by
a retroactive adjustment of $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates during the third quarter of fiscal 2021, within the Canadian broadband services segment.

Excluding the acquisitions of DERYtelecom and Thames Valley Communications, and the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates, revenue in constant currency increased by 5.0% for the first nine months of fiscal 2021.

For further details on the Corporation's revenue, please refer to the "Segmented operating and financial results" section.

ADJUSTED EBITDA[(1)]

For the first nine months of fiscal 2021, adjusted EBITDA increased by 7.1% (9.4% in constant currency) as a result of:

an increase of 9.0% (8.8% in constant currency) in the Canadian broadband services segment, mainly resulting from revenue growth and the impact of the DERYtelecom acquisition, partly offset by a retroactive adjustment of $4.6 million recognized as a reduction of revenue during the third quarter following the CRTC's decision on aggregated wholesale Internet rates; and
an increase of 5.2% (10.8% in constant currency) in the American broadband services segment, mainly resulting from revenue growth and the impact of the Thames Valley Communications acquisition, partly offset by a non-recurring gain on disposal of property, plant and equipment amounting to US$1.7 million recorded during the third quarter of fiscal 2020.

In addition, adjusted EBITDA for the first nine months of fiscal 2021 was favorably impacted by the timing of certain sales and marketing activities deferred, in both the Canadian and American broadband services segments, in the context of the COVID-19 pandemic.

Excluding the acquisitions of DERYtelecom and Thames Valley Communications, the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates, and the non-recurring gain on disposal of property, plant and equipment of US$1.7 million, adjusted EBITDA in constant currency increased by 7.0% for the first nine months of fiscal 2021.

For further details on the Corporation's adjusted EBITDA, please refer to the "Segmented operating and financial results" section.

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY[(1)]

For the first nine months of fiscal 2021, acquisition of property, plant and equipment remained comparable to same period of the prior year, with an overall increase of 0.6% (4.6% in constant currency) resulting from:

higher capital expenditures in the American broadband services segment in order to support the segment's revenue growth driven by increased demand for the high-speed Internet product, combined with equipment upgrades, the timing of certain initiatives and accelerated purchases of certain equipment to prevent potential supply chain shortages given the impact of the COVID-19 pandemic; partly offset by
lower capital expenditures in the Canadian broadband services segment, resulting mainly from the timing of certain initiatives.

For the first nine months of fiscal 2021, capital intensity reached 19.1% compared to 20.0% for the same period of the prior year, mainly as a result of revenue growth combined with lower capital expenditures in the Canadian broadband services segment, partly offset by higher capital expenditures in the American broadband services segment.

For further details on the Corporation's capital expenditures, please refer to the "Cash flows analysis" section.

(1) The indicated terms do not have standardized definitions prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-IFRS financial measures" section of the MD&A.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 6

FREE CASH FLOW[(1)]

For the first nine months of fiscal 2021, free cash flow increased by 20.7% (21.1% in constant currency) mainly due to the following:

higher adjusted EBITDA; and
the decrease in financial expense, when excluding the fiscal 2020 non-cash gain on debt modification of $22.9 million; partly offset by
higher capital expenditures.

2.2 FISCAL 2021 REVISED FINANCIAL GUIDELINES AND FISCAL 2022 PRELIMINARY

FINANCIAL GUIDELINES

The following sections contains forward-looking statements concerning the business outlook for Cogeco Communications. For a description of risk factors that could cause actual results to differ materially from what Cogeco Communications expects, please refer to the "Uncertainties and main risk factors" section of the present MD&A and of the Corporation's 2020 annual MD&A.

FISCAL 2021 REVISED FINANCIAL GUIDELINES

Cogeco Communications maintains its fiscal 2021 revised financial guidelines as issued on January 14, 2021.

During the first quarter of fiscal 2021, Cogeco Communications revised its fiscal 2021 financial guidelines as issued on October 27, 2020 to incorporate the impact from the acquisition of DERYtelecom which was completed on December 14, 2020, and considering the strong fiscal 2021 first-quarter financial results. The financial guidelines exclude the impact from the acquisition of WideOpenWest's Ohio broadband systems and related transaction costs, which is expected to close during the first quarter of fiscal 2022, and other potential acquisitions. Capital intensity and free cash flow definitions do not include the acquisition of spectrum licenses (refer to section "Non-IFRS financial measures"). The projections take into consideration the experience gained while operating during the COVID-19 pandemic so far, but exclude potential unexpected significant material impacts from it.

The following table outlines fiscal 2021 revised financial guidelines on a consolidated basis, compared to the fiscal 2021 financial guidelines as issued on October 27, 2020:

	January 14, 2021		October 27, 2020
	Revised projections		Original projections
	Fiscal 2021 (constant currency)	(1)	Fiscal 2021 (constant currency)
Financial guidelines
Revenue	Mid to high single-digit percentage growth	(2)	Low single-digit percentage growth
Adjusted EBITDA	Mid to high single-digit percentage growth	(2)	Low single-digit percentage growth
Capital intensity	Approximately 20%		Approximately 20%
Free cash flow	Low double-digit percentage growth	(3)	Low single-digit percentage growth

(1) Fiscal 2021 financial guidelines are based on a USD/CDN constant exchange rate of 1.3456 USD/CDN.

(2) The acquisition of DERYtelecom is expected to have a positive impact of approximately 3% on fiscal 2021 revenue and adjusted EBITDA.

(3) The assumed current income tax effective rate is approximately 11%.

FISCAL 2022 PRELIMINARY FINANCIAL GUIDELINES

The Corporation presents its preliminary financial guidelines on a constant currency basis and believes this presentation enables an improved understanding of the Corporation's underlying financial performance, undistorted by the effects of changes in a foreign currency rate. Measures on a constant currency basis are considered non-IFRS measures and do not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies. The preliminary financial guidelines exclude the impact from the acquisition of WideOpenWest's Ohio broadband systems and related transactions costs, which is expected to close during the first quarter of fiscal 2022, and other possible acquisitions. Capital intensity and free cash flow definitions do not include the acquisition of spectrum licenses (refer to section "Non-IFRS financial measures"). The projections take into consideration the experience gained while operating during the COVID-19 pandemic so far, but exclude potential unexpected significant material impacts from it.

(1) The indicated terms do not have standardized definitions prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-IFRS financial measures" section of the MD&A.

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On a constant currency and consolidated basis, Cogeco Communications expects fiscal 2022 revenue to grow between 3.5% and 5.5%, mainly as a result of organic growth in the American broadband services segment, expected continued demand for the residential Internet product resulting from the Broadband First strategy and growth in the business sector in a post-pandemic environment. In the Canadian broadband services segment, revenue growth should stem primarily from strong demand for the residential Internet product, the upselling of customers to higher tiers of service, the recent launch of the IPTV product, as well as the full-year impact of the DERYtelecom acquisition.

On a constant currency and consolidated basis, fiscal 2022 adjusted EBITDA should grow between 3.5% and 5.5%, mainly as a result of revenue growth exceeding operating expenses in both the American and Canadian broadband services segments.

Acquisition of property, plant and equipment should amount between $690 and $720 million, including approximately $230 to $240 million in network expansion projects net of government subsidies, resulting in capital intensity of approximately 27%, or 18% excluding growthoriented network expansion projects. The Canadian broadband services segment expects higher capital intensity primarily due to government sponsored network expansion projects which will increase the Corporation's footprint in the provinces of Québec and Ontario and, to a lesser extent, investments in DERYtelecom's infrastructure in order to offer higher Internet speeds and the IPTV product. The American broadband services segment also expects higher capital intensity entirely due to network expansion projects which will increase the Corporation's footprint in several areas adjacent to its network. Since the projects will take most of the fiscal year to build, both business segments expect growth in homes passed towards the end of the year and to benefit from additional revenue in the following fiscal year.

Free cash flow on a constant currency and consolidated basis should decrease between 30% and 35%, mainly due to the growth of adjusted EBITDA more than offset by higher capital intensity, financial expense and current income taxes. Excluding the fiscal year 2022 growthoriented network expansion projects, free cash flow on a constant currency and consolidated basis would otherwise increase between 13% and 18%.

The following table outlines the Corporation's fiscal 2022 preliminary financial guidelines ranges on a consolidated basis:

	Preliminary projections	(1)
	Fiscal 2022
(In millions of dollars, except percentages)	(constant currency)
Financial guidelines
Revenue	Increase of 3.5% to 5.5%	(2)
Adjusted EBITDA	Increase of 3.5% to 5.5%	(2)
Acquisition of property, plant and equipment	$690 to $720	(3)
Capital intensity	Approximately 27%
Free cash flow	Decrease of 30% to 35%	(4)

(1) Fiscal 2022 preliminary financial guidelines presented as percentages reflect increases over projections for fiscal 2021.

(2) The acquisition of DERYtelecom is expected to have a positive impact of approximately 1% on fiscal 2022 revenue and adjusted EBITDA.

(3) Fiscal 2022 preliminary financial guidelines are based on a USD/CDN constant exchange rate of 1.2700 USD/CDN.

(4) The assumed current income tax effective rate is approximately 13%.

2.3 UPDATE ON THE IMPACT OF THE COVID-19 PANDEMIC ON OPERATIONS AND RESULTS

The COVID-19 pandemic continues to impact our day-to-day operations although public health restrictions are starting to be lifted in part as vaccines are continuing to be rolled out, in both Canada and the United States. Our priority remains on ensuring the well-being of our employees, customers and business partners. During the first nine months of fiscal 2021, we continued to experience some of the trends from past quarters. Those primarily relate to sustained demand for our residential high-speed Internet product, due to customers spending more time at home for work, online education and entertainment purposes, and a reduction of certain expenses due to a more stable customer base (fewer connections and disconnections) and not being able to use all usual sales channels. In these unusual circumstances, we have also decided to delay during the first half of fiscal 2021, certain sales and marketing expenses to the second half of the year in both countries.

We expect that the current "work-from-home" trend will continue after the COVID-19 pandemic, where more workers will work from home than pre-pandemic on a partial or full-time basis. This trend should benefit our various network expansion projects, especially in underserved and unserved areas.

Although we are pleased with the financial results to date under the circumstances, we remain cautious in our management of this situation as uncertainties remain on the potential human, operating and financial impact of the pandemic. The Corporation's results discussed herein may not be indicative of future operational trends and financial performance. Please refer to the "Fiscal 2021 revised financial guidelines" and the "Fiscal 2022 preliminary financial guidelines" sections for more details.

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3. BUSINESS AND REGULATORY DEVELOPMENTS

Acquisition of WideOpenWest's Ohio broadband systems

On June 30, 2021, Cogeco Communications announced that Atlantic Broadband had entered into a definitive agreement with WideOpenWest, Inc. ("WOW") to purchase all of its broadband systems located in Ohio ("Ohio broadband systems"). The Ohio broadband systems are valued at US$1.125 billion, plus transaction and financing costs. The Ohio broadband systems pass approximately 688,000 homes and businesses in Cleveland and Columbus and served approximately 196,000 Internet, 61,000 video and 35,000 telephony customers, as of March 31, 2021. The acquisition represents a strong strategic fit for Cogeco Communications as it is complementary to Atlantic Broadband's existing footprint and capitalizes on its existing platform.

The purchase price and transaction costs will be financed through US$900 million of committed secured debt financing provided to Atlantic Broadband, and excess cash on hand. The acquisition is subject to regulatory approvals along with other customary closing conditions and is expected to close in the first quarter of fiscal 2022.

Atlantic Broadband has entered into a Transition Service Agreement with WOW, which will ensure a smooth transition period and allow Atlantic Broadband to further upgrade the network and launch its products and services, including a state-of-the-art IPTV platform. In conjunction with the acquisition, Atlantic Broadband expects to realize tax benefits with a present value of approximately US$140 million. These benefits are mostly due to the tax amortization of intangible assets in an asset purchase transaction where such intangible assets are stepped up to current market value.

Final rates for aggregated wholesale Internet access services

On May 27, 2021, the Canadian Radio-television and Telecommunications Commission ("CRTC") released Telecom Decision 2021-181, which ruled on applications by cable carriers (including the Corporation) and telecommunications carriers to review and vary Telecom Order 2019-288, in which the CRTC had set new rates for aggregated wholesale Internet access services. In this decision, the CRTC overturned the 2019 rate reductions and made the interim rates it had previously established in 2016, with certain adjustments, final. The CRTC's decision provides a more stable regulatory environment, pending its review of the methodology to establish these rates, which helps ensure continuity in current investments aimed at increasing access to high-speed Internet in underserved and unserved areas. As a result of this decision, the Corporation will be required to make retroactive payments to wholesale Internet access customers for the period of March to October 2016 and has recognized an amount of $4.6 million as a reduction of revenue during the third quarter of fiscal 2021.

On May 28, 2021, TekSavvy Solutions Inc. ("TekSavvy") petitioned the Governor in Council to overturn Telecom Decision 2021-181 and reinstate the CRTC's 2019 rate decision. The Governor in Council has yet to issue its decision on this petition. On June 28, 2021, TekSavvy filed a motion for leave to appeal the decision before the Federal Court of Appeal, which is currently pending.

Federal Communications Commission's Emergency Broadband Benefit Program

On May 12, 2021, Atlantic Broadband announced it will provide broadband connectivity at discounted prices for financially struggling households through the Federal Communications Commission's Emergency Broadband Benefit ("EBB") program. Under the program, Atlantic Broadband will provide a discount of up to US$50 per month towards broadband services for eligible households (and up to US$75 per month for households on qualifying Tribal lands) so that they can be connected for distance learning, work from home, telehealth and other critical online destinations during the COVID-19 pandemic. New, existing and prior customers that meet financial eligibility requirements may choose from various Internet packages with speeds designed to meet a range of household needs. Atlantic Broadband will receive reimbursement for each eligible EBB customer who is credited during the EBB period, in accordance with the program, starting in July 2021 and until the program closes.

Wireless developments

CRTC MVNO framework

On April 15, 2021, the CRTC issued Telecom Regulatory Policy 2021-130, Review of mobile wireless services , which aims to provide Canadians with greater wireless choice, better services and affordable prices. This decision requires Bell, Rogers, TELUS and SaskTel to provide mobile virtual network operator ("MVNO") access to regional carriers that invest in infrastructure and spectrum. These national carriers must give access to regional wireless carriers in areas where they have Tier 4 spectrum licences or higher. Cogeco Connexion currently has Tier 4 spectrum in 37 of the 55 Tier 4 areas where it currently offers service in Ontario and Québec. MVNO access is for a period of seven years and rates are to be commercially negotiated, with final offer arbitration by the CRTC as a last resort.

The new framework provides more clarity as we develop our plans to offer mobile wireless services.

3500 MHz spectrum auction

Cogeco Connexion is a qualified bidder in the auction for spectrum licences in the 3500 MHz band, which started on June 15, 2021 and is still ongoing. 200 MHz of spectrum are available in the 3500 MHz band with 50 MHz set aside for smaller and regional competitors. In April 2021, Cogeco Connexion contracted a new unsecured letter of credit which was submitted to Innovation, Science and Economic Development ("ISED") Canada as a pre-auction deposit, with the application to bid. In accordance with the rules of confidentiality established by ISED Canada respecting communications during the auction process, the Corporation is forbidden from disclosing the amount of this letter of credit. The results of the auction are expected to be released in the next few weeks.

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Canadian tax

The last federal budget introduced on April 19, 2021 included certain international measures relating to the Organisation for Economic Cooperation and Development's ("OECD") Base Erosion and Profit Shifting ("BEPS") project. Specifically, the budget includes proposals for new interest deductibility limits and anti-hybrid rules. From the limited information available, the new interest deductibility limits should not affect Cogeco Communications. The Corporation will monitor the release in the coming months of the draft rules, to assess any potential adverse impact on its global tax situation, which, if any, is not expected to occur before 2023.

United States tax

The US administration intends to increase the corporate tax rate and potentially add a minimum corporate tax on book income. If the changes related to corporate tax rates were to be implemented, the Corporation would incur a one-time non-cash deferred tax expense on the reevaluation of the deferred tax liabilities and its future tax expenses would increase. With regards to the minimum corporate tax on book income, based on the most recent information available, the Corporation does not expect it will have any impact on its business.

Acceleration of Cogeco Connexion's high-speed Internet network expansion in Québec in collaboration with the provincial and federal governments

On March 22, 2021, Cogeco Communications announced that Cogeco Connexion will carry out 13 high-speed Internet network expansion projects in several regions of Québec, in collaboration with the provincial and federal governments. These regional infrastructure projects represent an investment of approximately $240 million, of which $208 million will come from the provincial and federal governments, in the form of government subsidies.

Once these projects are completed, more than 54,000 homes and businesses will be connected to Cogeco Connexion's high-speed Internet services. These digital infrastructure investment projects are scheduled to be completed by September 2022. On March 26, 2021, Cogeco Connexion received $187.5 million of the $208 million expected government subsidies, to be used to pay for a portion of the expansion projects, with the remainder expected to be received upon completion of the projects. The amount of subsidies may vary depending on actual construction scope and costs. The projects are also subject to penalties, except for events out of Cogeco Connexion's control, if their delivery extends beyond September 2022.

Acquisition of DERYtelecom

On December 14, 2020, Cogeco Connexion completed the acquisition of DERYtelecom, the third largest cable operator in the province of Québec, for a purchase price of $403 million, subject to customary post-closing adjustments. The transaction was executed essentially through an asset purchase. This acquisition enables Cogeco Connexion to expand its activities in more than 200 municipalities in Québec and adds approximately 100,000 customers to its customer base. The purchase price was financed through a combination of cash on hand and borrowings under Cogeco Communications' Term Revolving Facility. As the transaction was executed essentially through an asset purchase, Cogeco Connexion expects to realize tax benefits with a present value of approximately $40 million. These benefits are due to the tax amortization of tangible and intangible assets which are both stepped up to current market value in an asset purchase transaction.

4. OPERATING AND FINANCIAL RESULTS

4.1 OPERATING RESULTS

4.1 OPERATING RESULTS
						Three months		ended May 31,
						Change in		Foreign
						constant		exchange
	2021		(1)	2020	Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)		$		$	%	%		$
Revenue	624,308			605,821	3.1	8.8		(34,874)
Operating expenses	321,457			304,921	5.4	12.0		(20,174)
Management fees – Cogeco Inc.	5,852			6,183	(5.4)	(5.4)		—
Adjusted EBITDA	296,999			294,717	0.8	5.8		(14,700)
Adjusted EBITDA margin	47.6	%		48.6 %

(1) For the three-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2399 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3994 USD/CDN.

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						Nine months ended May 31,	Nine months ended May 31,	Nine months ended May 31,
						Change in		Foreign
						constant		exchange
	2021		(1)	2020	Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)		$		$	%	%		$
Revenue	1,877,769			1,779,115	5.5	8.1		(45,642)
Operating expenses	945,126			907,694	4.1	7.0		(26,240)
Management fees – Cogeco Inc.	17,557			17,227	1.9	1.9		—
Adjusted EBITDA	915,086			854,194	7.1	9.4		(19,402)
Adjusted EBITDA margin	48.7	%		48.0 %

(1) For the nine-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2771 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3466 USD/CDN.

REVENUE

				Three months	ended May 31,
				Change in	Foreign
				constant	exchange
	2021	2020	Change	currency	impact
(In thousands of Canadian dollars, except percentages)	$	$	%	%	$
Canadian broadband services	353,336	320,547	10.2	10.2	—
American broadband services	270,972	285,274	(5.0)	7.2	(34,874)
	624,308	605,821	3.1	8.8	(34,874)

				Nine months	ended May 31,
				Change in	Foreign
				constant	exchange
	2021	2020	Change	currency	impact
(In thousands of Canadian dollars, except percentages)	$	$	%	%	$
Canadian broadband services	1,036,247	963,575	7.5	7.5	—
American broadband services	841,522	815,540	3.2	8.8	(45,642)
	1,877,769	1,779,115	5.5	8.1	(45,642)

For the third quarter and the first nine months of fiscal 2021, revenue increased by 3.1% and 5.5% (8.8% and 8.1% in constant currency), respectively, resulting mainly from:

organic growth in both the Canadian broadband services and the American broadband services segments, resulting mainly from growth in Internet service customers given the increased demand for high-speed offerings in the context of the COVID-19 pandemic, and rate increases implemented for certain services; and
the DERYtelecom acquisition completed on December 14, 2020, which contributed to the revenue growth in the Canadian broadband services segment; partly offset by
a retroactive adjustment of $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates during the third quarter of fiscal 2021, within the Canadian broadband services segment.

For the first nine months of fiscal 2021, the increase is also explained by the Thames Valley Communications acquisition completed on March 10, 2020, which contributed to the revenue growth in the American broadband services segment.

Excluding the acquisition of DERYtelecom and the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates, revenue in constant currency increased by 5.0% for the third quarter of fiscal 2021. Excluding the acquisitions of DERYtelecom and Thames Valley Communications, and the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates, revenue in constant currency increased by 5.0% for the first nine months of fiscal 2021.

For further details on the Corporation's revenue, please refer to the "Segmented operating and financial results" section.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 11

OPERATING EXPENSES

				Three months	ended May 31,
				Change in	Foreign
				constant	exchange
	2021	2020	Change	currency	impact
(In thousands of Canadian dollars, except percentages)	$	$	%	%	$
Canadian broadband services	164,351	143,809	14.3	14.9	(897)
American broadband services	149,458	155,843	(4.1)	8.3	(19,277)
Corporate and eliminations	7,648	5,269	45.2	45.2	—
	321,457	304,921	5.4	12.0	(20,174)

				Nine months	ended May 31,
				Change in	Foreign
				constant	exchange
	2021	2020	Change	currency	impact
(In thousands of Canadian dollars, except percentages)	$	$	%	%	$
Canadian broadband services	471,440	445,510	5.8	6.1	(1,162)
American broadband services	451,953	445,243	1.5	7.1	(25,078)
Corporate and eliminations	21,733	16,941	28.3	28.3	—
	945,126	907,694	4.1	7.0	(26,240)

For the third quarter of fiscal 2021, operating expenses increased by 5.4% (12.0% in constant currency), mainly resulting from:

higher operating expenses in the Canadian broadband services segment resulting from the DERYtelecom acquisition;
higher marketing and advertising expense, in both the Canadian broadband services and the American broadband services segments, to support our overall customer base growth, as these planned expenses were deferred during the first half of fiscal 2021 in the context of the COVID-19 pandemic; and
higher operating expenses in the American broadband services segment driven by the revenue growth, combined with annual video programming rate increases.

For the first nine months of fiscal 2021, operating expenses increased by 4.1% (7.0% in constant currency), mainly resulting from:

higher operating expenses in the Canadian broadband services segment resulting from the DERYtelecom acquisition; and
higher operating expenses in the American broadband services segment driven by the revenue growth, including higher operating expenses resulting from the Thames Valley Communications acquisition, combined with annual video programming rate increases.

For further details on the Corporation's operating expenses, please refer to the "Segmented operating and financial results" section.

MANAGEMENT FEES

For the third quarter and the first nine months of fiscal 2021, management fees paid to Cogeco Inc. ("Cogeco") reached $5.9 million and $17.6 million, respectively, compared to $6.2 million and $17.2 million for the same periods of fiscal 2020. For further details on the Corporation's management fees, please refer to the "Related party transactions" section.

ADJUSTED EBITDA

				Three months	ended May 31,
				Change in	Foreign
				constant	exchange
	2021	2020	Change	currency	impact
(In thousands of Canadian dollars, except percentages)	$	$	%	%	$
Canadian broadband services	188,985	176,738	6.9	6.4	897
American broadband services	121,514	129,431	(6.1)	5.9	(15,597)
Corporate and eliminations	(13,500)	(11,452)	17.9	17.9	—
	296,999	294,717	0.8	5.8	(14,700)

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 12

				Nine months	ended May 31,
				Change in	Foreign
				constant	exchange
	2021	2020	Change	currency	impact
(In thousands of Canadian dollars, except percentages)	$	$	%	%	$
Canadian broadband services	564,807	518,065	9.0	8.8	1,162
American broadband services	389,569	370,297	5.2	10.8	(20,564)
Corporate and eliminations	(39,290)	(34,168)	15.0	15.0	—
	915,086	854,194	7.1	9.4	(19,402)

For the third quarter and the first nine months of fiscal 2021, adjusted EBITDA increased by 0.8% and 7.1% (5.8% and 9.4% in constant currency), respectively, as a result of:

an increase in the Canadian broadband services segment mainly resulting from revenue growth and the impact of the DERYtelecom acquisition, partly offset by a retroactive adjustment of $4.6 million recognized as a reduction of revenue during the third quarter following the CRTC's decision on aggregated wholesale Internet rates; and
an increase in the American broadband services segment, mainly resulting from revenue growth, partly offset by a non-recurring gain on disposal of property, plant and equipment amounting to US$1.7 million recorded during the third quarter of fiscal 2020.

In addition, adjusted EBITDA for the first nine months of fiscal 2021 was favorably impacted by the timing of certain sales and marketing activities deferred, in both countries, in the context of the COVID-19 pandemic and the impact of the Thames Valley Communications acquisition within the American broadband services segment.

Excluding the acquisition of DERYtelecom, the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates and the previous year's non-recurring gain on disposal of property, plant and equipment of US$1.7 million, adjusted EBITDA in constant currency increased by 3.7% for the third quarter of fiscal 2021. Excluding the acquisitions of DERYtelecom and Thames Valley Communications, the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates, and the nonrecurring gain on disposal of property, plant and equipment of US$1.7 million, adjusted EBITDA in constant currency increased by 7.0% for the first nine months of fiscal 2021.

For further details on the Corporation's adjusted EBITDA, please refer to the "Segmented operating and financial results" section.

4.2 INTEGRATION, RESTRUCTURING AND ACQUISITION COSTS

For the third quarter and first nine months of fiscal 2021, integration, restructuring and acquisition costs amounted to $1.2 million and $4.8 million, respectively, mostly related to due diligence costs related to the acquisition of WideOpenWest's Ohio broadband systems, announced on June 30, 2021, and costs related to the acquisition and integration of DERYtelecom, which was completed on December 14, 2020.

For the third quarter and first nine months of fiscal 2020, integration, restructuring and acquisition costs amounted to nil and $5.5 million, respectively, resulting from organizational changes initiated across the Corporation resulting in cost optimization, as well as costs related to the acquisition and integration of Thames Valley Communications.

4.3 DEPRECIATION AND AMORTIZATION

		Three months ended May 31,	Three months ended May 31,		Nine months ended May 31,	Nine months ended May 31,
Years ended August 31,	2021	2020	Change	2021	2020	Change
(In thousands of Canadian dollars, except percentages)	$	$	%	$	$	%
Depreciation of property, plant and equipment(1)	118,489	113,952	4.0	345,097	330,750	4.3
Amortization of intangible assets	9,667	15,089	(35.9)	34,163	43,663	(21.8)
	128,156	129,041	(0.7)	379,260	374,413	1.3

(1) Includes depreciation of right-of-use assets amounting to $1.5 million and $4.4 million ($1.8 million and $5.1 million in 2020) for the three and nine-month periods of fiscal 2021.
For the third quarter of fiscal 2021, depreciation and amortization expense decreased by 0.7%, mainly due to:
the depreciation of the US dollar against the Canadian dollar compared to the same period of the prior year; and
lower amortization of intangible assets related to previously acquired customer relationships; partly offset by
an increase of depreciation of property, plant and equipment as a result of the acquisition of DERYtelecom combined with a higher level of capital expenditures.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 13

For the first nine months of fiscal 2021, depreciation and amortization expense increased by 1.3%, mainly due to:

an increase of depreciation of property, plant and equipment as a result of the acquisition of DERYtelecom combined with a higher level of capital expenditures; partly offset by
the depreciation of the US dollar against the Canadian dollar compared to the same period of the prior year; and
lower amortization of intangible assets in respect to previously acquired customer relationships.

4.4 FINANCIAL EXPENSE

4.4 FINANCIAL EXPENSE
		Three months ended May 31,			Nine months ended May 31,
Years ended August 31,	2021	2020	Change	2021	2020	Change
(In thousands of Canadian dollars, except percentages)	$	$	%	$	$	%
Interest on long-term debt, excluding interest on lease
liabilities	30,282	39,484	(23.3)	95,688	118,531	(19.3)
Interest on lease liabilities	326	391	(16.6)	988	1,150	(14.1)
Gain on debt modification	—	—	—	—	(22,898)	(100.0)
Net foreign exchange loss	1,669	348	—	992	379	—
Amortization of deferred transaction costs	183	218	(16.1)	579	893	(35.2)
Capitalized borrowing costs	(41)	(169)	(75.7)	(132)	(462)	(71.4)
Other	1,087	84	—	2,440	(5,802)	—
	33,506	40,356	(17.0)	100,555	91,791	9.5

For the third quarter of fiscal 2021, financial expense decreased by 17.0%, mainly due to:

lower interest expense on the Senior Secured Term Loan B Facility resulting from the decrease in the interest rate and in the principal amount outstanding;
the early redemption of the Senior Secured Debentures Series 2 in July 2020; and
the depreciation of the US dollar against the Canadian dollar compared to the same period of the prior year; partly offset by
lower interest revenue resulting from investments given lower excess cash.

For the first nine months of fiscal 2021, financial expense increased by 9.5%, mainly due to:

the $22.9 million non-cash gain on debt modification recognized during the second quarter of fiscal 2020 related to the amendment made to the Senior Secured Term Loan B Facility on February 3, 2020 resulting from the reduction of the interest rate by 0.25%; and
lower interest revenue resulting from investments given lower excess cash; partly offset by
lower interest expense on the Senior Secured Term Loan B Facility resulting from the decrease in the interest rate and in the principal amount outstanding;
the early redemption of the Senior Secured Debentures Series 2 in July 2020; and
the depreciation of the US dollar against the Canadian dollar compared to the same period of the prior year.

4.5 INCOME TAXES

4.5 INCOME TAXES
		Three months ended May 31,			Nine months ended May 31,
Years ended August 31,	2021	2020	Change	2021	2020	Change
(In thousands of Canadian dollars, except percentages)	$	$	%	$	$	%
Current	6,504	15,845	(59.0)	44,739	43,919	1.9
Deferred	24,822	12,739	94.9	57,521	38,097	51.0
	31,326	28,584	9.6	102,260	82,016	24.7

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 14

		Three months ended May 31,	Three months ended May 31,		Nine months ended May 31,	Nine months ended May 31,
Years ended August 31,	2021	2020	Change	2021	2020	Change
(In thousands of Canadian dollars, except percentages)	$	$	%	$	$	%
Profit before income taxes	134,112	125,308	7.0	430,501	382,459	12.6
Combined Canadian income tax rate	26.5 %	26.5 %	—	26.5 %	26.5 %	—
Income taxes at combined Canadian income tax rate	35,540	33,207	7.0	114,083	101,352	12.6
Difference in operations' statutory income tax rates	600	626	(4.2)	2,366	1,633	44.9
Impact on income taxes arising from non-deductible
expenses and non-taxable profit	351	385	(8.8)	680	(760)	—
Tax impacts related to foreign operations	(4,765)	(5,610)	(15.1)	(14,800)	(18,223)	(18.8)
Other	(400)	(24)	—	(69)	(1,986)	(96.5)
Income taxes at effective income tax rate	31,326	28,584	9.6	102,260	82,016	24.7
Effective income tax rate	23.4 %	22.8 %	2.6	23.8 %	21.4 %	11.2

For the third quarter and the first nine months of fiscal 2021, income taxes expense increased by 9.6% and 24.7%, respectively, mainly due to the increase in profit before income taxes. In addition, current income taxes were favorably impacted by a retroactive adjustment of $7.1 million recognized during the third quarter of fiscal 2021, and $4.1 million for the first nine months, following the harmonization of the Québec tax legislation with the federal's accelerated tax depreciation measure, which was considered substantively enacted on March 10, 2021.

4.6 PROFIT FOR THE PERIOD

4.6 PROFIT FOR THE PERIOD
		Three months ended May 31,			Nine months ended May 31,
Years ended August 31,	2021	2020	Change	2021	2020	Change
(In thousands of Canadian dollars, except percentages and
earnings per share)	$	$	%	$	$	%
Profit for the period	102,786	96,724	6.3	328,241	300,443	9.3
Profit for the period attributable to owners of the Corporation	95,702	90,771	5.4	305,317	284,340	7.4
Profit for the period attributable to non-controlling interest(1)	7,084	5,953	19.0	22,924	16,103	42.4
Basic earnings per share	2.02	1.89	6.9	6.42	5.84	9.9

(1) The non-controlling interest relates to the 21% ownership of Caisse de dépôt et placement du Québec ("CDPQ") in Atlantic Broadband.

Fiscal 2021 third-quarter profit for the period and profit for the period attributable to owners of the Corporation increased by 6.3% and 5.4%, respectively, as a result of:

higher adjusted EBITDA; and
lower financial expense; partly offset by
the depreciation of the US dollar; and
higher income taxes expense.

For the first nine months of fiscal 2021, profit for the period and profit for the period attributable to owners of the Corporation increased by 9.3% and 7.4%, respectively, as a result of:

higher adjusted EBITDA; partly offset by
higher income taxes expense; and
higher financial expense, mainly due to the $22.9 million non-cash gain on debt modification recognized during the second quarter of fiscal 2020, partly offset by lower interest expense.

5. RELATED PARTY TRANSACTIONS

The Corporation is a subsidiary of Cogeco, which as of May 31, 2021 held 33.2% of the Corporation's equity shares, representing 83.3% of the votes attached to the Corporation's voting shares.

Cogeco provides executive, administrative, financial, strategic planning and additional services to the Corporation under a Management Services Agreement (the "Agreement"). The methodology used to establish the management fees is based on the costs incurred by Cogeco plus a reasonable mark-up. Provision is made for future adjustments upon the request of either Cogeco or the Corporation from time to time during the term of the Agreement. For the third quarter and the first nine months of fiscal 2021, management fees paid to Cogeco amounted to $5.9 million and $17.6 million, respectively, compared to $6.2 million and $17.2 million for the same periods of fiscal 2020.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 15

No direct remuneration is payable to Cogeco's executive officers by the Corporation. However, during the first nine months of fiscal 2021 and 2020, the Corporation granted stock options and performance share units ("PSUs") to these executive officers, as executive officers of Cogeco Communications, and issued deferred share units ("DSUs") to Board directors of Cogeco, as shown in the following table:

	Nine months	ended May 31,
(In number of units)	2021	2020
Stock options	69,200	110,875
PSUs	10,375	14,375
DSUs	792	1,847

The following table shows the amounts that the Corporation charged Cogeco with regards to the Corporation's stock options, incentive share units ("ISUs") and PSUs granted to these executive officers, as well as DSUs issued to Board directors of Cogeco:

	Three months ended May 31,	Three months ended May 31,	Nine months ended May 31,	Nine months ended May 31,
Years ended August 31,	2021	2020	2021	2020
(In thousands of Canadian dollars)	$	$	$	$
Stock options	274	331	885	901
ISUs	—	8	6	30
PSUs	233	351	358	1,048
DSUs	61	6	249	149
	568	696	1,498	2,128

6. CASH FLOWS ANALYSIS

6. CASH FLOWS ANALYSIS
		Three months ended	May 31,	Nine	months ended	May 31,
Years ended August 31,	2021	2020	Change	2021	2020	Change
(In thousands of Canadian dollars, except percentages)	$	$	%	$	$	%
Cash flows from operating activities	264,621	282,229	(6.2)	737,512	663,074	11.2
Cash flows used in investing activities	(126,002)	(200,113)	(37.0)	(749,910)	(430,376)	74.2
Cash flows used in financing activities	(85,565)	(93,204)	(8.2)	(27,570)	(300,685)	(90.8)
Effect of exchange rate changes on cash and cash equivalents
denominated in a foreign currency	(13,787)	2,987	—	(21,089)	5,277	—
Net change in cash and cash equivalents	39,267	(8,101)	—	(61,057)	(62,710)	(2.6)
Cash and cash equivalents, beginningof theperiod	266,173	501,895	(47.0)	366,497	556,504	(34.1)
Cash and cash equivalents, end of the period	305,440	493,794	(38.1)	305,440	493,794	(38.1)

6.1 OPERATING ACTIVITIES

Fiscal 2021 third-quarter cash flows from operating activities decreased by 6.2%, mainly due to:

the increase in income taxes paid, mainly due to the timing of income tax instalments; and
the depreciation of the US dollar; partly offset by
the decrease in interest paid.

For the first nine months of fiscal 2021, cash flows from operating activities increased by 11.2% mainly from:

higher adjusted EBITDA;
changes in non-cash operating activities primarily due to timing of the payment of trade and other payables;
the decrease in interest paid; partly offset by
the depreciation of the US dollar; and
the increase in income taxes paid, mainly due to the timing of year-end income tax instalments.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 16

6.2 INVESTING ACTIVITIES

For the third quarter of fiscal 2021, cash flows used in investing activities decreased by 37.0%, mainly as a result of the acquisitions of Thames Valley Communications and iTéract completed during the third quarter last year.

For the first nine months of fiscal 2021, cash flows used in investing activities increased by 74.2%, mainly due to the acquisition of DERYtelecom completed during the second quarter of fiscal 2021, partly offset by cash flows used in connection with the acquisitions of Thames Valley Communications and iTéract last year.

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY

The acquisition of property, plant and equipment, as well as the capital intensity per operating segment are as follows:

			Three	Three	months ended May 31,	months ended May 31,				Nine	Nine	months ended May 31,	months ended May 31,
						Change in							Change in
						constant							constant
	2021		2020		Change	currency	(1)	2021		2020		Change	currency	(2)
(In thousands of Canadian dollars, except
percentages)		$		$	%	%			$		$	%	%
Canadian broadband services	57,230		61,217		(6.5)	(2.6)		180,294		202,108		(10.8)	(9.2)
Capital intensity	16.2	%	19.1	%				17.4	%	21.0	%
American broadband services	67,579		61,184		10.5	24.7		174,485		151,965		14.8	22.0
Capital intensity	24.9	%	21.4	%				20.7	%	18.6	%
Corporate and eliminations	1,761		1,252		40.7	40.7		3,227		1,722		87.4	87.4
Consolidated	126,570		123,653		2.4	11.3		358,006		355,795		0.6	4.6
Capital intensity	20.3	%	20.4	%				19.1	%	20.0	%

(1) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3994 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3466 USD/CDN.

Fiscal 2021 third-quarter acquisition of property, plant and equipment increased by 2.4% (11.3% in constant currency), and for the first nine months of fiscal 2021, remained comparable to same period of the prior year, with an overall increase of 0.6% (4.6% in constant currency), mainly due to:

higher capital expenditures in the American broadband services segment in order to support the segment's revenue growth driven by increased demand for the high-speed Internet product, combined with equipment upgrades, the timing of certain initiatives and accelerated purchases of certain equipment to prevent potential supply chain shortages given the impact of the COVID-19 pandemic; partly offset by
lower capital expenditures in the Canadian broadband services segment, resulting mainly from the timing of certain initiatives.

For the third quarter and the first nine months of fiscal 2021, capital intensity reached 20.3% and 19.1%, respectively, compared to 20.4% and 20.0% for the same periods of the prior year. Capital intensity decreases for both periods are explained mainly as a result of revenue growth combined with lower capital expenditures in the Canadian broadband services segment, partly offset by higher capital expenditures in the American broadband services segment.

For further details on the Corporation's acquisition of property, plant and equipment, please refer to the "Segmented operating and financial results" section.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 17

6.3 FINANCING ACTIVITIES

ISSUANCE AND REPAYMENT OF DEBT

For the third quarter and the first nine months of fiscal 2021, changes in cash flows from the issuance and repayment of debt are mainly explained as follows:

	Three months ended May 31,	Three months ended May 31,	Nine months ended May 31,	Nine months ended May 31,
Years ended August 31,	2021	2020	2021	2020	Explanations
(In thousands of Canadian dollars)	$	$	$	$
Increase (decrease) in bank	6,384	—	(1,226)	—	Timing of payments made to suppliers.
indebtedness
Net (decrease) increase under the	(8,740)	—	171,772	—	Related to the DERYtelecom acquisition, which was
revolving facilities					financed in part through the Corporation's Term Revolving
					Facility. A portion was repaid during the third quarter
					as a result of free cash flow generated.
Repayment of notes, debentures and	(5,158)	(5,859)	(16,112)	(63,603)	Mainly related to a repayment of US$35 million on the
credit facilities					Senior Secured Term Loan B Facility during the second
					quarter of fiscal 2020.
Repayment of lease liabilities	(1,196)	(1,352)	(3,339)	(3,762)	Comparable.
Repayment of balance due on	—	—	(1,258)	(3,228)	Repayment of the balance related to the FiberLight
business combinations					acquisition.
	(8,710)	(7,211)	149,837	(70,593)

DIVIDENDS

During the third quarter of fiscal 2021, a quarterly eligible dividend of $0.64 per share was paid to the holders of multiple and subordinate voting shares, totalling $30.2 million, compared to a quarterly eligible dividend of $0.58 per share or $27.8 million, in the third quarter of fiscal 2020. Dividend payment in the first nine months of fiscal 2021 totalled $1.92 per share or $91.2 million compared to $1.74 or $84.6 million in the prior year.

NORMAL COURSE ISSUER BID ("NCIB")

On April 30, 2021, the Corporation announced that the TSX accepted the renewal of its notice of intention for a NCIB, enabling it to acquire for cancellation up to 2,068,000 subordinate voting shares from May 4, 2021 to May 3, 2022. Under its previous NCIB that commenced on May 4, 2020 and ended on May 3, 2021, the Corporation could purchase for cancellation a maximum of 1,809,000 subordinate shares.

On September 2, 2020, Cogeco Communications ceased repurchasing shares under the NCIB as a result of an unsolicited proposal to acquire the Corporation. During the second quarter of fiscal 2021, Cogeco Communications resumed the repurchasing of shares.

The NCIB purchases were as follows:

	Three months	ended May 31,	Nine months	ended May 31,
	2021	2020	2021	2020
(In thousands of Canadian dollars, except number of shares and weighted average
purchasepriceper share)	$	$	$	$
Subordinate voting shares purchased and cancelled	414,000	601,900	742,600	1,397,400
Weighted average purchase price per share	118.28	98.73	115.13	104.41
Purchase costs	48,967	59,425	85,492	145,902

The Corporation entered into an automatic share purchase plan (the "ASPP") with a designated broker to allow for the purchase of subordinate voting shares under the NCIB at times when the Corporation would ordinarily not be permitted to purchase shares due to regulatory restrictions or self-imposed blackout periods. Such purchases are executed by the broker on parameters established by the Corporation prior to the preestablished ASPP period.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 18

6.4 FREE CASH FLOW

					Three months ended May 31,	Three months ended May 31,	Three months ended May 31,
					Change in		Foreign
					constant		exchange
	2021	(1)	2020	Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)	$		$	%	%		$
Adjusted EBITDA(3)	296,999		294,717	0.8	5.8		(14,700)
Amortization of deferred transaction costs and discounts on long-term
debt	2,334		2,383	(2.1)	9.0		(264)
Share-based payment	2,177		1,864	16.8	16.8		—
Gain on disposals and write-offs of property, plant and equipment	(863)		(1,593)	(45.8)	(45.8)		—
Defined benefit plans expense, net of contributions	424		5	—	—		—
Integration, restructuring and acquisition costs	(1,225)		(12)	—	—		110
Financial expense	(33,506)		(40,356)	(17.0)	(9.1)		3,160
Current income taxes	(6,504)		(15,845)	(59.0)	(58.1)		140
Acquisition of property, plant and equipment	(126,570)		(123,653)	2.4	11.3		11,093
Repayment of lease liabilities	(1,196)		(1,352)	(11.5)	(6.0)		75
Free cash flow(3)	132,070		116,158	13.7	14.0		(386)

(1) For the three-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2399 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3994 USD/CDN.

(3) The indicated terms do not have standardized definitions prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-IFRS financial measures" section, including reconciliation to the most comparable IFRS financial measures.

					Nine months ended May 31,	Nine months ended May 31,	Nine months ended May 31,
					Change in		Foreign
					constant		exchange
	2021	(1)	2020	Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)	$		$	%	%		$
Adjusted EBITDA(3)	915,086		854,194	7.1	9.4		(19,402)
Amortization of deferred transaction costs and discounts on long-term
debt	6,935		7,159	(3.1)	1.7		(344)
Share-based payment	5,931		5,821	1.9	1.9		—
Gain on disposals and write-offs of property, plant and equipment	(607)		(338)	79.6	79.6		—
Defined benefit plans contributions, net of expense	(482)		924	—	—		—
Integration, restructuring and acquisition costs	(4,770)		(5,531)	(13.8)	(11.4)		130
Financial expense(4)	(100,555)		(114,689)	(12.3)	(8.7)		4,159
Current income taxes	(44,739)		(43,919)	1.9	2.1		101
Acquisition of property, plant and equipment	(358,006)		(355,795)	0.6	4.6		14,187
Repayment of lease liabilities	(3,339)		(3,762)	(11.2)	(8.6)		99
Free cash flow(3)	415,454		344,064	20.7	21.1		(1,070)

(1) For the nine-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2771 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3466 USD/CDN.

(4) Excludes the non-cash gain on debt modification of $22.9 million recognized during the second quarter of fiscal 2020.

Fiscal 2021 third-quarter free cash flow increased by 13.7% (14.0% in constant currency) mainly due to the following:

higher adjusted EBITDA;
the decrease in current income taxes, mainly following the harmonization of the Québec tax legislation with the federal's accelerated tax depreciation measure, which favorably impacted our current income taxes expense during the third quarter as legislation became substantively enacted on March 10, 2021; and
the decrease in financial expense; partly offset by

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 19

higher capital expenditures.
For the first nine months of fiscal 2021, free cash flow increased by 20.7% (21.1% in constant currency) mainly due to the following:
higher adjusted EBITDA; and
the decrease in financial expense, when excluding the fiscal 2020 non-cash gain on debt modification of $22.9 million; partly offset by
higher capital expenditures.

6.5 DIVIDEND DECLARATION

At its July 14, 2021 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.64 per share for multiple and subordinate voting shares, payable on August 11, 2021 to shareholders of record on July 28, 2021. 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.

7. SEGMENTED OPERATING AND FINANCIAL RESULTS

The Corporation reports its operating results in two operating segments: Canadian broadband services and American broadband services. The reporting structure reflects how the Corporation manages its business activities, makes decisions about resources to be allocated to the segments and assesses their performance.

7.1 CANADIAN BROADBAND SERVICES

OPERATING AND FINANCIAL RESULTS

							Three months	ended May 31,	ended May 31,
							Change in		Foreign
							constant		exchange
Three months ended August 31,	2021		(1)	2020		Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)		$			$	%	%		$
Revenue	353,336			320,547		10.2	10.2		—
Operatingexpenses	164,351			143,809		14.3	14.9		(897)
Adjusted EBITDA	188,985			176,738		6.9	6.4		897
Adjusted EBITDA margin	53.5	%		55.1	%
Acquisition of property, plant and equipment	57,230			61,217		(6.5)	(2.6)		(2,392)
Capital intensity	16.2	%		19.1	%

(1) For the three-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2399 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3994 USD/CDN.

							Nine months	ended May 31,	ended May 31,
							Change in		Foreign
							constant		exchange
	2021		(1)	2020		Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)		$			$	%	%		$
Revenue	1,036,247			963,575		7.5	7.5		—
Operatingexpenses	471,440			445,510		5.8	6.1		(1,162)
Adjusted EBITDA	564,807			518,065		9.0	8.8		1,162
Adjusted EBITDA margin	54.5	%		53.8	%
Acquisition of property, plant and equipment	180,294			202,108		(10.8)	(9.2)		(3,296)
Capital intensity	17.4	%		21.0	%

(1) For the nine-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2771 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3466 USD/CDN.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 20

REVENUE

For the third quarter and first nine months of fiscal 2021, revenue increased by 10.2% and 7.5%, respectively, as reported and in constant currency mainly as a result of:

the DERYtelecom acquisition completed on December 14, 2020;
the cumulative effect of sustained demand for residential high-speed Internet since the beginning of the pandemic due to customers spending more time at home for work, online education and entertainment purposes, resulting in customer additions and a higher product mix for the overall base; and
rate increases implemented for certain services; partly offset by
a retroactive adjustment of $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates during the third quarter of fiscal 2021; and
a decline in video and telephony service customers as some customers have migrated to Internet-only services.

OPERATING EXPENSES

For the third quarter and first nine months of fiscal 2021, operating expenses increased by 14.3% and 5.8% (14.9% and 6.1% in constant currency), respectively, mainly due to higher operating expenses resulting from the DERYtelecom acquisition. For the third quarter of fiscal 2021, the operating expenses increase is also due to:

higher marketing and advertising expense to support our overall customer base growth, as these planned expenses were deferred during the first half of fiscal 2021 in the context of the COVID-19 pandemic; partly offset by
lower bad debt expenses compared to the third quarter of fiscal 2020 resulting from increased customers credit risk at the beginning of the COVID-19 pandemic following our commitment to not disconnect non-paying customers during that time.

ADJUSTED EBITDA

For the third quarter and first nine months of fiscal 2021, adjusted EBITDA increased by 6.9% and 9.0% (6.4% and 8.8% in constant currency), respectively, mainly resulting from:

revenue growth; and
the impact of the DERYtelecom acquisition; partly offset by
a retroactive adjustment of $4.6 million recognized as a reduction of revenue during the third quarter following the CRTC's decision on aggregated wholesale Internet rates.

In addition, adjusted EBITDA for the first nine months of fiscal 2021 was favorably impacted by the timing of certain sales and marketing activities deferred in the context of the COVID-19 pandemic.

Excluding the acquisition of DERYtelecom and the impact of the $4.6 million recognized following the CRTC's decision on aggregated wholesale Internet rates, adjusted EBITDA in constant currency increased by 1.6% and 5.0%, respectively, for the third quarter and the first nine months of fiscal 2021.

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY

For the third quarter and first nine months of fiscal 2021, acquisition of property, plant and equipment decreased by 6.5% and 10.8% (2.6% and 9.2% in constant currency), respectively, resulting mainly from:

lower purchases of customer premise equipment due to the timing of certain initiatives; and
lower costs for network congestion management; partly offset by
higher costs related to the maintenance, growth and expansion of our network infrastructure and additional costs related to DERYtelecom's network infrastructure, as well as other purchases of property, plant and equipment related to the recent DERYtelecom acquisition.

For the first nine months of fiscal 2021, the acquisition of property, plant and equipment decrease is also explained by lower capitalized installations costs due to increased self installations in the context of the COVID-19 pandemic.

For the third quarter and first nine months of fiscal 2021, capital intensity reached 16.2% and 17.4% compared to 19.1% and 21.0% for the same periods of fiscal 2020. Capital intensity decreases for both periods is explained mainly by lower capital expenditures combined with the revenue growth.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 21

PRIMARY SERVICE UNIT AND CUSTOMER STATISTICS

May 31, 2021	Net additions (losses) Three months ended May 31,	Net additions (losses) Nine months ended May 31,	% of penetration(1) May 31, 2021 May 31, 2020
	2021 2020 (2) (4)	2021 (3) 2020 (2) (4)
Primary service units 2,002,736 Internet service customers 909,901 Video service customers 680,456 Telephony service customers 412,379	(7,313) (11,736) 4,580 5,252 (7,030) (11,406) (4,863) (5,582)	(21,009) (9,962) 12,243 12,959 (19,011) (22,156) (14,241) (765)	45.9 45.3 34.3 35.4 20.8 21.0

(1) As a percentage of homes passed.

(2) Net of a provision related to non-paying customers who had not been disconnected as at May 31, 2020 in the context of the COVID-19 pandemic.

(3) Excludes 224,039 primary service units (85,642 Internet services, 80,218 video services and 58,179 telephony services) from the acquisition of DERYtelecom completed in the second quarter of fiscal 2021.

(4) Excludes 2,227 primary service units (1,871 Internet services, 181 video services and 175 telephony services) from the acquisition of iTéract Inc. completed in the third quarter of fiscal 2020.

INTERNET

For the third quarter and first nine months of fiscal 2021, Internet service customers net additions amounted to 4,580 and 12,243, respectively, compared to 5,252 and 12,959 for the same periods of the prior year. The net additions for both periods of fiscal 2021 were mainly resulting from:

the ongoing interest in high-speed offerings due to customers spending more time at home for work, online education and entertainment purposes in the context of the COVID-19 pandemic; partly offset by
competitive offers in the industry.

VIDEO

For the third quarter and first nine months of fiscal 2021, video service customers net losses amounted to 7,030 and 19,011, respectively, compared to 11,406 and 22,156 for the same periods of the prior year. The net losses for both periods of fiscal 2021 were mainly due to certain customers deciding to not subscribe to video services, while subscribing to Internet services, partly offset by the EPICO roll-out.

TELEPHONY

For the third quarter and first nine months of fiscal 2021, telephony service customers net losses amounted to 4,863 and 14,241, respectively, compared to 5,582 and 765, respectively, for the same periods of the prior year. The net losses for both periods of fiscal 2021 were mainly due to increasing mobile wireless penetration in Canada and various unlimited offers launched by mobile wireless operators causing some customers to cancel their landline telephony services for mobile wireless telephony services only.

In addition, the lower net losses in the first nine months of last year included unusual telephony additions as a result of more telephony bundles being actively marketed during the first half of the year.

DISTRIBUTION OF CUSTOMERS

At May 31, 2021, 68% of the Canadian broadband services segment's customers subscribed to "double play" or "triple play" bundled services.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 22

7.2 AMERICAN BROADBAND SERVICES

OPERATING AND FINANCIAL RESULTS

							Three months	ended May 31,	ended May 31,
							Change in		Foreign
							constant		exchange
Three months ended August 31,	2021		(1)	2020		Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)		$			$	%	%		$
Revenue	270,972			285,274		(5.0)	7.2		(34,874)
Operatingexpenses	149,458			155,843		(4.1)	8.3		(19,277)
Adjusted EBITDA	121,514			129,431		(6.1)	5.9		(15,597)
Adjusted EBITDA margin	44.8	%		45.4	%
Acquisition of property, plant and equipment	67,579			61,184		10.5	24.7		(8,701)
Capital intensity	24.9	%		21.4	%

(1) For the three-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2399 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3994 USD/CDN.

							Nine months	ended May 31,	ended May 31,
							Change in		Foreign
							constant		exchange
	2021		(1)	2020		Change	currency	(2)	impact	(2)
(In thousands of Canadian dollars, except percentages)		$			$	%	%		$
Revenue	841,522			815,540		3.2	8.8		(45,642)
Operatingexpenses	451,953			445,243		1.5	7.1		(25,078)
Adjusted EBITDA	389,569			370,297		5.2	10.8		(20,564)
Adjusted EBITDA margin	46.3	%		45.4	%
Acquisition of property, plant and equipment	174,485			151,965		14.8	22.0		(10,891)
Capital intensity	20.7	%		18.6	%

(1) For the nine-month period ended May 31, 2021, the average foreign exchange rate used for translation was 1.2771 USD/CDN.

(2) Fiscal 2021 actuals are translated at the average foreign exchange rate of fiscal 2020, which was 1.3466 USD/CDN.

REVENUE

For the third quarter and first nine months of fiscal 2021, revenue decreased by 5.0% (increased by 7.2% in constant currency) and increased by 3.2% (8.8% in constant currency), respectively. In local currency, revenue amounted to US$218.6 million and US$658.9 million compared to US$203.9 million and US$605.5 million for the same periods of fiscal 2020. The increases in constant currency resulted mainly from:

a higher Internet service customer base;
rate increases implemented for certain services; and
last year's temporary waiving of late fees charged to customers as a relief measure in the context of the COVID-19 pandemic, which were reinstated in all states by September 2020.

For the first nine months of fiscal 2021, the increase is also explained by revenue growth resulting from the Thames Valley Communications acquisition completed on March 10, 2020.

Excluding the acquisition of Thames Valley Communications, revenue in constant currency increased by 7.8% for the first nine months of fiscal 2021.

OPERATING EXPENSES

For the third quarter of fiscal 2021, operating expenses decreased by 4.1% (increased by 8.3% in constant currency). The increase in constant currency is mainly due to:

higher video services costs resulting from annual video programming rate increases;
a non-recurring gain on disposal of property, plant and equipment amounting to US$1.7 million recorded during the third quarter of fiscal 2020; and
overall higher operating expenses to drive and support continued customer growth, including higher marketing and advertising expense to support our overall customer base growth, as these planned expenses were deferred during the first half of fiscal 2021 in the context of the COVID-19 pandemic; partly offset by

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 23

lower bad debt expenses compared to the third quarter of fiscal 2020 resulting from increased customers credit risk at the beginning of the COVID-19 pandemic following our commitment to not disconnect non-paying customers during that time.

For the first nine months of fiscal 2021, operating expenses increased by 1.5% (7.1% in constant currency), mainly due to:

higher video services costs resulting from annual video programming rate increases;
higher operating expenses resulting from the Thames Valley Communications acquisition;
a non-recurring gain on disposal of property, plant and equipment amounting to US$1.7 million recorded during the third quarter of fiscal 2020;
increase in high-speed Internet direct costs given increased customer levels and higher bandwidth usage; and
overall higher operating expenses to drive and support continued customer growth.

ADJUSTED EBITDA

For the third quarter and first nine months of fiscal 2021, adjusted EBITDA decreased by 6.1% (increased by 5.9% in constant currency) and increased by 5.2% (10.8% in constant currency), respectively. In local currency, adjusted EBITDA amounted to US$98.0 million and US$304.8 million compared to US$92.5 million and US$274.9 million for the same periods of fiscal 2020. The increases in constant currency in both periods are mainly resulting from:

revenue growth driven by a continued increase in customer demand for high-speed offerings Internet service and by rate increases implemented for certain services; partly offset by
a non-recurring gain on disposal of property, plant and equipment amounting to US$1.7 million recorded during the third quarter of fiscal 2020.

In addition, adjusted EBITDA for the first nine months of fiscal 2021 was favorably impacted by the timing of certain sales and marketing activities deferred in the context of the COVID-19 pandemic and the impact of the Thames Valley Communications acquisition.

Excluding the non-recurring gain on disposal of property, plant and equipment of US$1.7 million, adjusted EBITDA in constant currency increased by 8.0% for the third quarter of fiscal 2021. Excluding the acquisition of Thames Valley Communications and the non-recurring gain on disposal of property, plant and equipment of US$1.7 million, adjusted EBITDA in constant currency increased by 10.6% for the first nine months of fiscal 2021.

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY

For the third quarter and first nine months of fiscal 2021, acquisition of property, plant and equipment increased by 10.5% and 14.8% (24.7% and 22.0% in constant currency), respectively, resulting mainly from:

higher purchases of customer premise equipment and other related costs in order to support increased demand for the high-speed Internet product, combined with equipment upgrades and the timing of certain initiatives; and
accelerated purchases of certain equipment to prevent potential supply chain shortages given the impact of the COVID-19 pandemic.

For the third quarter and first nine months of fiscal 2021, capital intensity reached 24.9% and 20.7% compared to 21.4% and 18.6% for the same periods of fiscal 2020. Capital intensity increases for both periods are explained mainly by higher capital expenditures.

PRIMARY SERVICE UNIT AND CUSTOMER STATISTICS

May 31, 2021	Net additions (losses) Three months ended May 31, 2021 2020 (2) (3)	Net additions (losses) Nine months ended May 31, 2021 2020 (2) (3)	% of penetration(1) May 31, 2021 May 31, 2020
Primary service units 973,655 Internet service customers 517,851 Video service customers 309,242 Telephony service customers 146,562	1,302 14,088 6,847 12,379 (4,349) 482 (1,196) 1,227	15,730 19,849 25,639 23,475 (8,145) (5,821) (1,764) 2,195	55.4 52.2 33.1 34.0 15.7 16.0

(1) As a percentage of homes passed.

(2) Net of a provision related to non-paying customers who had not been disconnected as at May 31, 2020 in the context of the COVID-19 pandemic.

(3) Excludes 15,977 primary service units (9,077 Internet services, 5,111 video services and 1,789 telephony services) from the acquisition of Thames Valley Communications completed in the third quarter of fiscal 2020.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 24

INTERNET

For the third quarter and first nine months of fiscal 2021, Internet service customers net additions amounted to 6,847 and 25,639, respectively, compared to 12,379 and 23,475 for the same periods of the prior year. The net additions for both periods of fiscal 2021 were mainly resulting from:

growth in the residential sector primarily resulting from the increased demand for high-speed offerings due to customers spending more time at home for work, online education and entertainment purposes in the context of the COVID-19 pandemic, as well as sales effort activities being resumed in certain sales channels impacted by the pandemic combined with increased marketing effort towards Internet led offerings under the Broadband First strategy; and
growth in the commercial sector.

VIDEO

For the third quarter and first nine months of fiscal 2021, video service customers net losses amounted to 4,349 and 8,145, respectively, compared to net additions and net losses of 482 and 5,821 for the same periods of the prior year. The net losses for both periods of fiscal 2021 were mainly due to:

a new emphasis since the beginning of the second quarter of fiscal 2021 on offers that are Internet led and the cessation of non-bulk residential video-only new offer;
certain customers deciding to not subscribe to video services, while subscribing to Internet services; and
competitive offers in the industry; partly offset by
continued growth in the bulk residential customers' activations related to the Florida expansion initiatives.

TELEPHONY

For the third quarter and first nine months of fiscal 2021, telephony service customers net losses amounted to 1,196 and 1,764, respectively, compared to net additions of 1,227 and 2,195 for the same periods of the prior year. The net losses for both periods of fiscal 2021 were mainly due to:

a new emphasis since the beginning of the second quarter of fiscal 2021 on offers that are Internet led; partly offset by
growth in the business sector mainly driven by Hosted Voice product offerings following the launch of its Hosted Voice 2.0 in January 2021.

DISTRIBUTION OF CUSTOMERS

At May 31, 2021, 47% of the American broadband services segment's customers subscribed to "double play" or "triple play" bundled services.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 25

8. FINANCIAL POSITION

8.1 WORKING CAPITAL

As part of the usual conduct of its business, Cogeco Communications generally maintains a working capital deficiency, when excluding cash and cash equivalents and bank indebtedness, due to a low level of trade and other receivables since a large proportion of the Corporation's customers pay before their services are rendered, while trade and other payables are usually paid after products are delivered or services are rendered.

The variations are as follows:

	May 31,	August 31,
	2021	2020	Change	Explanations
(In thousands of Canadian
dollars)	$	$	$
Current assets
Cash and cash equivalents	305,440	366,497	(61,057)	Refer to the "Cash flows analysis" section. Mainly due to the acquisition of
				DERYtelecom completed during the second quarter of fiscal 2021, which was
				financed through a combination of cash on hand and borrowings under the
				Term Revolving Facility, partly offset by free cash flow generated from
				operations.
Restricted cash	161,008	—	161,008	Mainly related to government	subsidies received in advance in connection with
				Cogeco Connexion's high-speed Internet network expansion projects.
Trade and other receivables	83,022	83,013	9	Not significant.
Income taxes receivable	3,495	3,283	212	Not significant.
Prepaid expenses and other	35,580	29,266	6,314	Mainly related to the increase in prepayments for annual maintenance
				agreements during the first quarter of fiscal 2021.
Derivative financial	1,178	—	1,178	Not significant.
instruments
	589,723	482,059	107,664
Current liabilities
Bank indebtedness	6,384	7,610	(1,226)	Timing of payments made to suppliers.
Trade and other payables	234,164	211,052	23,112	Mainly related to timing of payments made to suppliers and a higher level of
				trade and other payables resulting from the DERYtelecom acquisition.
Provisions	26,414	33,864	(7,450)	Mainly related to a contract renegotiation with a content provider.
Income tax liabilities	8,149	39,897	(31,748)	Related to the payment of income tax instalments, partly offset by the current
				income taxes expense for the	nine-month period.
Contract liabilities and other	54,214	47,162	7,052	Mainly from the DERYtelecom acquisition.
liabilities
Government subsidies	161,008	—	161,008	Mainly related to government	subsidies received in advance in connection with
received in advance				Cogeco Connexion's high-speed Internet network expansion projects.
Derivative financial	—	3,834	(3,834)	Not significant.
instruments
Current portion of long-term	225,933	29,569	196,364	Mainly related to the Senior Secured Debentures Series 3 maturing in February
debt				2022, which were classified as current.
	716,266	372,988	343,278
Working capital (deficiency) surplus	(126,543)	109,071	(235,614)

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 26

8.2 OTHER SIGNIFICANT CHANGES

	May 31,	August 31,
	2021	2020	Change	Explanations
(In thousands of Canadian
dollars)	$	$	$
Non-current assets
Restricted cash	27,000	—	27,000	Related to government subsidies received in advance in connection with Cogeco
				Connexion's high-speed Internet network expansion projects.
Property, plant and	2,263,435	2,088,930	174,505	Mainly related to capital investments during the first nine months of fiscal 2021
equipment				and the acquisition of DERYtelecom, partly offset by the depreciation expense of
				the period, as well as the depreciation of the US dollar against the Canadian dollar.
Intangible assets	2,675,708	2,800,401	(124,693)	Related to the depreciation of the US dollar against the Canadian dollar and
				amortization for the period, partly offset by intangible assets acquired as part of the
				acquisition of DERYtelecom.
Goodwill	1,417,285	1,381,024	36,261	Related to the DERYtelecom acquisition, partly offset by the depreciation of the US
				dollar against the Canadian dollar.
Non-current liabilities
Long-term debt	2,851,405	3,087,033	(235,628)	Mainly related to the classification of the Senior Secured Debentures Series 3 as
				current portion of long-term debt combined with the depreciation of the US dollar
				against the Canadian dollar and the quarterly repayment on the Senior Secured
				Term Loan B Facility, partly offset by the acquisition of DERYtelecom which was
				financed in part with the Corporation's Term Revolving Facility.
Derivative financial	45,080	67,375	(22,295)	Increase in market interest rates and the depreciation of the US dollar against the
instruments				Canadian dollar.
Government subsidies	27,000	—	27,000	Related to government subsidies received in advance in connection with Cogeco
received in advance				Connexion's high-speed Internet network expansion projects.
Pension plan liabilities	6,866	13,490	(6,624)	Actuarial gains recorded in the first nine months of fiscal 2021.
and accrued employee
benefits
Deferred tax liabilities	648,864	610,596	38,268	Timing of reversals of temporary differences, partly offset by the depreciation of the
				US dollar against the Canadian dollar.

8.3 OUTSTANDING SHARE DATA

A description of Cogeco Communications' share data at June 30, 2021 is presented in the table below. Additional details are provided in note 13 B) of the condensed interim consolidated financial statements.

	Number of	Amount
(In thousands of Canadian dollars, except number of shares/options)	shares/options	$
Common shares
Multiple voting shares	15,691,100	98,346
Subordinate voting shares	31,349,898	880,921
Options to purchase subordinate voting shares
Outstanding options	840,699
Exercisable options	377,679

8.4 FINANCING

In the normal course of business, Cogeco Communications has incurred financial obligations, primarily in the form of long-term debt, lease contracts and guarantees. Cogeco Communications' obligations, as reported in the 2020 Annual Report, have not materially changed since August 31, 2020.

At May 31, 2021, the Corporation had used $167.0 million of its $750 million Term Revolving Facility for a remaining availability of $583.0 million. In addition, two subsidiaries related to Atlantic Broadband benefit from a Senior Secured Revolving Facility of $181.1 million (US$150 million), of which $2.9 million (US$2.4 million) was used at May 31, 2021 for a remaining availability of $178.2 million (US$147.6 million).

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 27

8.5 CREDIT RATINGS

The table below shows Cogeco Communications' and Atlantic Broadband's credit ratings:

At May31, 2021	S&P	DBRS	Moody's
Cogeco Communications
Senior Secured Notes and Debentures	BBB-	BBB (low)	NR
Atlantic Broadband
First Lien Credit Facilities	BB	NR	B1

NR : Not rated

Our ability to access debt capital markets and bank credit markets and the cost and amount of funding available partly depends on the quality of our credit ratings. Obligations rated in the "BBB" category are considered investment grade and their cost of funding is typically lower relative to the "BB/B" rating category. In addition, obligations with "BBB" ratings generally have greater access to funding than those with "BB/B" ratings.

8.6 FINANCIAL RISK MANAGEMENT

Management's objectives are to protect the Corporation and its subsidiaries against material economic exposures and variability of results, and against certain financial risks including credit, liquidity, interest rate, foreign exchange and market risks, which are described in the Corporation's annual consolidated financial statements.

Credit risk

The Corporation is exposed to credit risk arising from the derivative financial instruments, cash and cash equivalents, restricted cash, and trade accounts receivable, the maximum exposure of which is represented by the carrying amounts reported on the condensed interim consolidated statements of financial position.

The Corporation reduces the credit risk with regards to the derivative financial instruments by completing transactions with financial institutions that carry a credit rating equal to or superior to its own credit rating. At May 31, 2021, management believes this credit risk to be minimal, since the lowest credit rating of the counterparties to the agreements is "A" by Standard & Poor's rating services ("S&P").

Cash equivalents consist mainly of highly liquid money market short-term investments. The Corporation has deposited the cash and cash equivalents, and the restricted cash with reputable financial institutions, for which management believes the risk of loss to be remote.

To mitigate the credit risk in relation to its trade accounts receivable, the Corporation continuously monitors the financial condition of its customers and reviews the credit history or worthiness of each new large customer. The Corporation has credit policies in place and has established various credit controls, including credit checks, deposits on accounts and advance billing, and has also established procedures to suspend the availability of services when customers have fully utilized approved credit limits or have violated existing payment terms. Furthermore, a large portion of the Corporation's customers are billed and pay before the services are rendered. The Corporation believes that its allowance for doubtful accounts is sufficient to cover the related credit risk. Since the Corporation has a large and diversified clientele dispersed throughout its market areas in Canada and the United States, there is no significant concentration of credit risk.

Liquidity risk

Refer to sub-section "Financing".

Interest rate risk

The Corporation is exposed to interest rate risk on its floating interest rate instruments. Interest rate fluctuations will have an effect on the repayment of these instruments. At May 31, 2021, all of the Corporation's long-term debt was at fixed rate, except for the amounts drawn under the Term Revolving Facility and First Lien Credit Facilities which are subject to floating interest rates.

To reduce the risk on the floating interest rate instruments and mitigate the impact of interest rate variations, the Corporation's US subsidiary entered into fixed interest rate swap agreements. The following table shows the interest rate swaps outstanding at May 31, 2021:

Type	of hedge	Notional amount(1)	Receive interest rate	Payinterest rate	Maturity	Hedged item
Cash	flow	US$770 million	US LIBOR base rate	2.017% - 2.262%	January 2023 - November 2024	Senior Secured Term Loan B

(1) Two tranches amounting to US$330 million have matured on January 31, 2021.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 28

The sensitivity of the Corporation's annual financial expense to an increase of 1% in the interest rate applicable to the unhedged portion of these facilities would represent an increase of approximately $11.8 million based on the outstanding debt and swap agreements at May 31, 2021.

Foreign exchange risk

The Corporation is exposed to foreign exchange risk with respect to the interest associated with its notes, debentures and credit facilities denominated in US dollars. The impact of a 10% increase in the exchange rate of the US dollar into Canadian dollars would increase the annual financial expense by approximately $8.0 million based on the outstanding debt and swap agreements at May 31, 2021.

Furthermore, a foreign currency exposure arises from the Corporation's net investment in its US subsidiary, as a result of the translation of the net investment into the Corporation's functional currency. A portion of the Corporation's net investment in its US subsidiary is hedged by the Corporation's US dollar denominated Senior Secured Notes, which the Corporation has designated as hedges of the net investment, while a portion is economically hedged by its subsidiary's US dollar denominated First Lien Credit Facilities.

The exchange rate used to translate the US dollar currency into Canadian dollars for the consolidated statement of financial position accounts at May 31, 2021 was $1.2072 ($1.3042 at August 31, 2020) per US dollar. A 10% decrease in the exchange rate of the US dollar into Canadian dollar would decrease other comprehensive income by approximately $91 million.

8.7 FOREIGN CURRENCY

For the three and nine-month periods ended May 31, 2021, the average rates prevailing used to convert the operating results of the American broadband services segment were as follows:

		Three	months ended	May 31,		Nine	months ended	May 31,
Years ended August 31,	2021	2020	Change	Change	2021	2020	Change	Change
	$	$	$	%	$	$	$	%
US dollar vs Canadian dollar	1.2399	1.3994	(0.16)	(11.4)	1.2771	1.3466	(0.07)	(5.2)

The following table highlights in Canadian dollars, the impact of a $0.07 variation of the Canadian dollar against the US dollar on Cogeco Communications' segmented and consolidated operating results for the nine-month period ended May 31, 2021:

	Canadian broadband services	American broadband services	Consolidated
	Exchange	Exchange	Exchange
Nine months ended May 31, 2021	rate impact	rate impact	rate impact
(In thousands of Canadian dollars)	$	$	$
Revenue	—	(45,642)	(45,642)
Operating expenses	(1,162)	(25,078)	(26,240)
Management fees - Cogeco Inc.			—
Adjusted EBITDA	1,162	(20,564)	(19,402)
Acquisition of property, plant and equipment	(3,296)	(10,891)	(14,187)
Free cash flow			(1,070)

(1) The consolidated results do not correspond to the addition of the operating segment's results as the "Corporate and eliminations" information is not presented.

8.8 CONTRACTUAL OBLIGATIONS

Capital investments

During the nine-month period ended May 31, 2021, the Corporation entered into service contracts in connection with its high-speed Internet expansion projects. In addition, the Corporation has accelerated the purchases of certain equipment in order to avoid potential supply chain shortages and to support its network expansion projects. As at May 31, 2021, the Corporation's contractual commitments related to these capital investments amounted to approximately $201.6 million. The Corporation may terminate certain of these contracts by giving formal notice prior to an agreed upon period.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 29

9. CONTROLS AND PROCEDURES

Internal control over financial reporting ("ICFR") is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. 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 ("DC&P") and ICFR, as defined in National Instrument 52-109. Cogeco Communications' internal control framework is based on the criteria published in the updated version released in May 2013 of the report Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission .

On September 1, 2020, the Corporation's subsidiary, Atlantic Broadband, implemented a new financial system. In addition, a new human capital management system was implemented on January 1, 2021 by the Corporation and its subsidiaries. These implementations resulted in changes to internal controls related to financial reporting for the nine-month period ended May 31, 2021. No significant changes to the internal controls over financial reporting occurred during the three-month period ended May 31, 2021.

The CEO and CFO, supported by management, evaluated the design of the Corporation's DC&P and ICFR at May 31, 2021, and concluded that they are adequate.

10. UNCERTAINTIES AND MAIN RISK FACTORS

A detailed description of the uncertainties and main risk factors faced by Cogeco Communications can be found in the 2020 Annual Report, available at www.sedar.com and corpo.cogeco.com. The following update should be read together with the uncertainties and main risk factors described in the 2020 Annual Report, which are hereby incorporated by reference.

Mobile wireless services

As mentioned under the section "Business and regulatory developments", we are interested in offering mobile wireless services to complement our service offerings to customers and should we conclude that this is financially attractive, we would expect to make investments over time, in addition to making use of the MVNO regime. Launching a mobile wireless operation includes significant risks as investments would include the acquisition of spectrum licenses (including making use of past spectrum acquisitions), network infrastructure and systems, handheld devices, start-up costs, and MVNO rates which are still unknown. This may result in downward pressure on adjusted EBITDA, margins, profits and free cash flow. In the long term, a mobile wireless operation may not meet profitability expectations.

Internet wholesale rates

As mentioned under the section "Business and regulatory developments", TekSavvy petitioned the Governor in Council to overturn the CRTC's Telecom Decision 2021-181, which made the 2016 interim Internet wholesale rates final, and reinstate the CRTC's 2019 final rate decision. TekSavvy also filed a motion seeking leave to appeal the decision before the Federal Court of Appeal. Decisions on the petition and the motion for leave to appeal are pending. Any adverse decision could have a material adverse effect on our business and results of operations, and on our ability to further invest in network upgrades and expansions.

11. ACCOUNTING POLICIES

11.1 ADOPTION OF NEW ACCOUNTING STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS

Amendments to IFRS 3

In October 2018, the IASB amended IFRS 3, Business combinations , to clarify the definition of a business, with the objective of assisting entities in determining whether a transaction should be accounted for as a business combination or as an asset acquisition. Effective September 1, 2020, the Corporation adopted these amendments, which had no impact on the consolidated financial statements. The effects, if any, of these amendments, will be dependent on the facts and circumstances of any future acquisitions and they may affect whether those future acquisitions are accounted for as business combinations or as asset acquisitions, along with the allocation of the purchase price between the net identifiable assets acquired and goodwill.

11.2 NEW ACCOUNTING STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

Amendments to IAS 12

In May 2021, the IASB amended IAS 12, Income taxes , to clarify how companies should account for deferred tax on certain transactions that on initial recognition give rise to equal taxable and deductible temporary differences (e.g. leases and decommissioning provisions). The amendments narrow the scope of the initial recognition exemption so that it does not apply to these transactions. As a result, companies will need to recognize both a deferred tax asset and a deferred tax liability when accounting for such transactions. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted. The Corporation does not expect any impact on its consolidated financial statements upon adoption of these amendments.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 30

Amendments to IAS 1

In February 2021, the IASB amended IAS 1, Presentation of financial statements, to require entities to disclose their material accounting policy information rather than their significant accounting policies. Further amendments to IAS 1 are made to explain how an entity can identify a material accounting policy. The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with earlier application permitted. The Corporation is in the process of determining the extent of the impact on its consolidated financial statements disclosure.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 31

12. NON-IFRS FINANCIAL MEASURES

This section describes non-IFRS financial measures used by Cogeco Communications throughout this MD&A. These financial measures are reviewed in assessing the performance of the Corporation and used in the decision-making process with regards to our business units. Reconciliations between "free cash flow", "adjusted EBITDA", "adjusted EBITDA margin" and "capital intensity" and the most comparable IFRS financial measures are also provided. These financial measures do not have standard definitions prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies.

This MD&A also makes reference to key performance indicators on a constant currency basis, including revenue, "adjusted EBITDA", acquisition of property, plant and equipment and "free cash flow". Measures on a constant currency basis are considered non-IFRS financial measures and do not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies.

						Most comparable
Non-IFRS financial						IFRS financial
measures	Application	Calculation				measures
Adjusted EBITDA	Adjusted EBITDA and adjusted EBITDA margin are	Adjusted EBITDA:				Profit for the
and adjusted EBITDA margin	key measures commonly reported and used in the telecommunications industry, as they allow comparisons between companies that have	- Profit for the period add:				period
	different capital structures and are more current measures since they exclude the impact of historical investments in assets. Adjusted EBITDA is one of the key metrics employed by the financial	- Income taxes; - Financial expense; - Depreciation and amortization;		and
	community to value a business and its financial strength.	- Integration, restructuring and acquisition			costs.
	Adjusted EBITDA for Cogeco Communications'
	business units is equal to the segment profit (loss)
	reported in Note 4 of the condensed interim
	consolidated financial statements.
		Adjusted EBITDA margin:				No comparable
		- Adjusted EBITDA				IFRS financial measure
		divided by:
		- Revenue
Free cash flow	Management and investors use free cash flow to	Free cash flow:				Cash flows from
	measure Cogeco Communications' ability to repay debt, distribute capital to its shareholders and finance its growth.	- Adjusted EBITDA add:				operating activities
		- Amortization of deferred transaction costs and
		discounts on long-term debt;
		- Share-based payment;
		- Loss (gain) on disposals and write-offs of property,
		plant and equipment; and
		- Defined benefit plans expense,		net of
		contributions;
		deduct:
		- Integration, restructuring and acquisition			costs;
		- Financial expense(1);
		- Current income taxes;
		- Acquisition of property, plant and equipment(2);
		and
		- Repayment of lease liabilities.
Constant	Revenue, operating expenses, adjusted EBITDA,	Constant currency basis is	obtained by translating			No comparable
currency basis	acquisition of property, plant and equipment and	financial results from	the	current	periods	IFRS financial
	free cash flow are measures presented on a	denominated in US dollars	at the foreign		exchange	measure
	constant currency basis to enable an improved	rates of the comparable periods of the prior year.
	understanding of the Corporation's underlying
	financial performance, undistorted by the effects
	of changes in foreign exchange rates.
Capital intensity	Capital intensity is used by Cogeco	Capital intensity:				No comparable
	Communications' management and investors to assess the Corporation's investment in capital expenditures in order to support a certain level of	- Acquisition of property, plant and equipment(2) divided by:				IFRS financial measure
	revenue.	- Revenue

(1) Excludes the non-cash gain on debt modification of $22.9 million recognized in the second quarter of fiscal 2020.

(2) Excludes the non-cash acquisition of right-of-use assets and the purchases of spectrum licenses.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 32

12.1 ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN RECONCILIATION

The reconciliation of adjusted EBITDA to the most comparable IFRS financial measure and the calculation of adjusted EBITDA margin are as follows:

	Three months	Three months	ended May 31,	ended May 31,	Nine months	Nine months	ended May 31,	ended May 31,
	2021		2020		2021		2020
(In thousands of Canadian dollars, except percentages)		$		$		$		$
Profit for the period	102,786		96,724		328,241		300,443
Income taxes	31,326		28,584		102,260		82,016
Financial expense	33,506		40,356		100,555		91,791
Depreciation and amortization	128,156		129,041		379,260		374,413
Integration, restructuringand acquisition costs	1,225		12		4,770		5,531
Adjusted EBITDA	296,999		294,717		915,086		854,194
Revenue	624,308		605,821		1,877,769		1,779,115
Adjusted EBITDA margin	47.6	%	48.6	%	48.7	%	48.0	%

12.2 FREE CASH FLOW RECONCILIATION

The reconciliation of free cash flow to the most comparable IFRS financial measure is as follows:

	Three months	ended May 31,	Nine months	ended May 31,
	2021	2020	2021	2020
(In thousands of Canadian dollars)	$	$	$	$
Cash flows from operating activities	264,621	282,229	737,512	663,074
Amortization of deferred transaction costs and discounts on long-term debt	2,334	2,383	6,935	7,159
Changes in non-cash operating activities	(15,536)	(19,512)	9,779	56,310
Income taxes paid (received)	18,085	(6,552)	76,395	27,414
Current income taxes	(6,504)	(15,845)	(44,739)	(43,919)
Interest paid	30,342	38,816	91,472	108,272
Financial expense(1)	(33,506)	(40,356)	(100,555)	(114,689)
Acquisition of property, plant and equipment	(126,570)	(123,653)	(358,006)	(355,795)
Repayment of lease liabilities	(1,196)	(1,352)	(3,339)	(3,762)
Free cash flow	132,070	116,158	415,454	344,064

(1) Excludes the non-cash gain on debt modification of $22.9 million recognized during the second quarter of fiscal 2020.

12.3 CAPITAL INTENSITY RECONCILIATION

The calculation of capital intensity is as follows:

	Three months	Three months	ended May 31,	ended May 31,	Nine months	Nine months	ended May 31,	ended May 31,
	2021		2020		2021		2020
(In thousands of Canadian dollars, except percentages)		$		$		$		$
Acquisition ofproperty,plant and equipment	126,570		123,653		358,006		355,795
Revenue	624,308		605,821		1,877,769		1,779,115
Capital intensity	20.3	%	20.4	%	19.1	%	20.0	%

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 33

13. SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION

					Fiscal 2021	Fiscal 2021							Fiscal 2020	Fiscal 2020	Fiscal 2019	Fiscal 2019
	May 31,		February 28,		November 30,		August 31,		May 31,		February 29,		November 30,		August 31,
Three months ended	2021		2021		2020		2020		2020		2020		2019		2019
(In thousands of Canadian dollars,
except percentages and per
share data)		$		$		$		$		$		$		$		$
Operations
Revenue	624,308		634,548		618,913		605,168		605,821		586,467		586,827		583,673
Adjusted EBITDA	296,999		306,994		311,093		294,535		294,717		277,372		282,105		275,610
Adjusted EBITDA margin	47.6	%	48.4	%	50.3	%	48.7	%	48.6	%	47.3	%	48.1	%	47.2	%
Integration, restructuring and
acquisition costs	1,225		2,330		1,215		3,955		12		5,458		61		712
Profit for the period from
continuing operations	102,786		110,559		114,896		96,148		96,724		114,011		89,708		92,403
Profit for the period from
discontinued operations	—		—		—		—		—		—		—		1,920
Profit for the period	102,786		110,559		114,896		96,148		96,724		114,011		89,708		94,323
Profit for the period from
continuing operations
attributable to owners of the
Corporation	95,702		102,936		106,679		90,834		90,771		109,391		84,178		87,850
Profit for the period attributable to
owners of the Corporation	95,702		102,936		106,679		90,834		90,771		109,391		84,178		89,770
Cash flow
Cash flows from operating
activities	264,621		231,166		241,725		254,745		282,229		231,653		149,192		304,702
Acquisition of property, plant and
equipment	126,570		115,214		116,222		128,195		123,653		110,840		121,302		145,099
Free cash flow(1)	132,070		142,768		140,616		111,372		116,158		125,062		102,844		84,250
Capital intensity	20.3	%	18.2	%	18.8	%	21.2	%	20.4	%	18.9	%	20.7	%	24.9	%
Per share data(2)
Earnings per share
Basic
From continuing operations	2.02		2.16		2.24		1.90		1.89		2.24		1.71		1.78
From discontinued operations	—		—		—		—		—		—		—		0.04
From continuing and
discontinued operations	2.02		2.16		2.24		1.90		1.89		2.24		1.71		1.82
Diluted
From continuing operations	2.01		2.14		2.22		1.88		1.87		2.22		1.70		1.77
From discontinued operations	—		—		—		—		—		—		—		0.04
From continuing and
discontinued operations	2.01		2.14		2.22		1.88		1.87		2.22		1.70		1.80
Dividends per share	0.64		0.64		0.64		0.58		0.58		0.58		0.58		0.525

(1) Excludes the non-cash gain on debt modification of $22.9 million recognized during the second quarter of fiscal 2020.

(2) Per multiple and subordinate voting share.

13.1 SEASONAL VARIATIONS

Cogeco Communications' operating results are not generally subject to material seasonal fluctuations except as follows. In the Canadian and American broadband services segments, the number of Internet and video services customers are generally lower in the second half of a fiscal year as a result of 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 Communications offers its services in several towns with educational institutions. In the American broadband services segment, certain areas are also subject to seasonal fluctuations during the winter and summer seasons.

COGECO COMMUNICATIONS INC. Q3 2021 MD&A 34

AI assistant

Cogeco Communications Inc. — Interim / Quarterly Report 2021

43017_rns_2021-07-14_c4e69e98-4d01-4058-93fe-2fbd9626af2a.pdf

1. FORWARD-LOOKING STATEMENTS

2. CORPORATE OBJECTIVES AND STRATEGIES

2.1 KEY PERFORMANCE INDICATORS

REVENUE

ADJUSTED EBITDA[(1)]

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY[(1)]

FREE CASH FLOW[(1)]

2.2 FISCAL 2021 REVISED FINANCIAL GUIDELINES AND FISCAL 2022 PRELIMINARY

FINANCIAL GUIDELINES

FISCAL 2021 REVISED FINANCIAL GUIDELINES

FISCAL 2022 PRELIMINARY FINANCIAL GUIDELINES

2.3 UPDATE ON THE IMPACT OF THE COVID-19 PANDEMIC ON OPERATIONS AND RESULTS

3. BUSINESS AND REGULATORY DEVELOPMENTS

Acquisition of WideOpenWest's Ohio broadband systems

Final rates for aggregated wholesale Internet access services

Federal Communications Commission's Emergency Broadband Benefit Program

Wireless developments

CRTC MVNO framework

3500 MHz spectrum auction

Canadian tax

United States tax

Acceleration of Cogeco Connexion's high-speed Internet network expansion in Québec in collaboration with the provincial and federal governments

Acquisition of DERYtelecom

4. OPERATING AND FINANCIAL RESULTS

4.1 OPERATING RESULTS

REVENUE

MANAGEMENT FEES

ADJUSTED EBITDA

4.2 INTEGRATION, RESTRUCTURING AND ACQUISITION COSTS

4.3 DEPRECIATION AND AMORTIZATION

4.4 FINANCIAL EXPENSE

4.5 INCOME TAXES

4.6 PROFIT FOR THE PERIOD

5. RELATED PARTY TRANSACTIONS

6. CASH FLOWS ANALYSIS

6.1 OPERATING ACTIVITIES

6.2 INVESTING ACTIVITIES

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY

6.3 FINANCING ACTIVITIES

ISSUANCE AND REPAYMENT OF DEBT

DIVIDENDS

NORMAL COURSE ISSUER BID ("NCIB")

6.4 FREE CASH FLOW

6.5 DIVIDEND DECLARATION

7. SEGMENTED OPERATING AND FINANCIAL RESULTS

7.1 CANADIAN BROADBAND SERVICES

OPERATING AND FINANCIAL RESULTS

REVENUE

OPERATING EXPENSES

ADJUSTED EBITDA

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY

PRIMARY SERVICE UNIT AND CUSTOMER STATISTICS

INTERNET

VIDEO

TELEPHONY

DISTRIBUTION OF CUSTOMERS

7.2 AMERICAN BROADBAND SERVICES

OPERATING AND FINANCIAL RESULTS

REVENUE

OPERATING EXPENSES

ADJUSTED EBITDA

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND CAPITAL INTENSITY

PRIMARY SERVICE UNIT AND CUSTOMER STATISTICS

INTERNET

VIDEO

TELEPHONY

DISTRIBUTION OF CUSTOMERS

8. FINANCIAL POSITION

8.1 WORKING CAPITAL

8.2 OTHER SIGNIFICANT CHANGES

8.3 OUTSTANDING SHARE DATA

8.4 FINANCING

8.5 CREDIT RATINGS

NR : Not rated

8.6 FINANCIAL RISK MANAGEMENT

Credit risk

Liquidity risk

Cogeco Communications Inc. Interim / Quarterly Report 2021