ORGANIC GROWTH AND ACQUISITIONS ARE KEY FOR COGECO CABLE IN FISCAL 2008 THIRD-QUARTER

PRESS RELEASE

For immediate release

Organic growth and acquisitions are key for Cogeco Cable

in fiscal 2008 third-quarter

Montreal, July 9, 2008 – Today, Cogeco Cable Inc. (TSX: CCA) announced its financial results for

the third quarter and first nine months ended May 31, 2008.

For the third quarter and first nine months of 2008:

• Consolidated revenue increased by 14.3% to $274.9 million and by 14% to $791.9 million,

respectively;

• Consolidated operating income before amortization grew by 20% to reach $117.5 million

and by 20.9% to $324.3 million, respectively;

• Consolidated net income amounted to $31.1 million, up by $10.8 million in the third quarter,

and to $101.4 million, up by $53.1 million for the first nine months as compared to the prior

year;

• Free cash flow

(1)

reached $36.9 million in the third quarter and $77.8 million for the first nine

months;

• Operating margin grew to 42.7% from 40.7% and to 41% from 38.6%, in the third quarter

and for the first nine months, respectively;

• Revenue-generating units (RGUs)

(2)

grew by 50,889 and 190,109 net additions, respectively,

for a total of 2,675,774 RGUs at May 31, 2008.

External growth:

• In order to further develop its business telecommunications activities, the Corporation

pursued its growth strategy and concluded the acquisition of all the assets of MaXess

Networx®, ENWIN Energy Ltd.’s telecommunications division (City of Windsor’s energy

company). In addition, the Corporation announced the acquisition of all the assets of

FibreWired Burlington Hydro Communications (Burlington Hydro Electric’s

telecommunications division). On June 13, Cogeco Cable announced its entry into the

Greater Toronto Area market through the acquisition of all the shares of Toronto Hydro

Telecom Inc., the telecommunications subsidiary of Toronto Hydro Corporation, subject to

certain conditions, including regulatory approval by the Commissioner of Competition.

(1)

Free cash flow does not have standard definitions prescribed by Canadian generally accepted accounting principles (GAAP) and should be treated

accordingly. For more details, please consult the “Non-GAAP financial measures” section.

(2)

Represents the sum of Basic Cable, High Speed Internet (HSI), Digital Television and Telephony service customers.

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“We are very pleased with our third-quarter results. Cogeco Cable’s internal growth continued at a

steady pace. Consequently, we are on track to attain our revised projections of last April, and expect

that revenue should stand at $1,060 million, operating income before amortization at $440 million, net

income at $123 million and free cash flow at $70 million for fiscal 2008,” declared Louis Audet,

President and CEO of Cogeco Cable. “Cogeco Cable is also pursuing its external growth strategy, as

shown by the acquisitions of MaXess Networx® and FibreWired Burlington Hydro Communications,

which will enhance our Cogeco Business Solutions offering. As for the acquisition of Toronto Hydro

Telecom, this is a great growth opportunity for the Corporation as it provides us the ability to serve

the business telecommunication market through the addition of owned and operated points of

presence throughout the Greater Toronto Area, linked to our other broadband facilities extending

over the dense telecommunications corridor from Windsor to Cornwall in Ontario”.

Fiscal 2009 Preliminary Financial Guidelines:

The Corporation announces its 2009 preliminary guidelines, setting revenue outlook at about

$1,165 million, an increase of $105 million compared to the revised fiscal 2008 projections issued in

April 2008. Operating income before amortization should increase to approximately $495 million, an

improvement of $55 million compared to the revised fiscal 2008 projections, and free cash flow

(1)

should grow by approximately $35 million to reach $105 million.

FINANCIAL HIGHLIGHTS

Quarters ended May 31, Nine months ended May 31,

($000, except percentages and per

share data)

2008 2007 Change 2008 2007 Change

$ $ % $ $ %

(unaudited) (unaudited) (unaudited) (unaudited)

Revenue 274,944 240,612 14.3 791,879 694,566 14.0

Operating income before

amortization

117,490

97,874

20.0

324,308

268,327

20.9

Net income 31,142 20,381 52.8 101,416 48,323 –

Cash flow from operations

(1)

95,829 76,416 25.4 260,855 200,740 29.9

Less:

Capital expenditures and

increase in deferred charges

58,928 57,817 1.9 183,040 185,044 (1.1)

Free cash flow

(1)

36,901 18,599 98.4 77,815 15,696 –

Earnings per share

Basic 0.64 0.45 42.2 2.09 1.14 83.3

Diluted 0.64 0.45 42.2 2.08 1.13 84.1

(1)

Cash flow from operations and free cash flow do not have standardized definitions prescribed by Canadian generally accepted accounting

principles (“GAAP”) and therefore, may not be comparable to similar measures presented by other companies. For more details, please consult

the “Non-GAAP financial measures” section.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking information within the meaning of

securities laws. Forward-looking information may relate to our future outlook and anticipated events, our

business, our operations, our financial performance, our financial condition or our results, and, in some cases,

can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend";

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"estimate"; "predict"; "potential"; "continue"; "foresee", "ensure" or other similar expressions concerning matters

that are not historical facts. In particular, statements regarding our future operating results and economic

performance and our objectives and strategies are forward-looking statements. These statements are based on

certain factors and assumptions, including expected growth, results of operations, performance and business

prospects and opportunities, which we believe are reasonable as of the current date. While we consider these

assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.

Forward-looking information is also subject to certain factors, including risks and uncertainties (described in the

“Uncertainties and main risk factors” section of the Corporation’s 2007 annual MD&A) that could cause actual

results to differ materially from what we currently expect. These factors include technological changes, changes

in market and competition, governmental or regulatory developments, general economic conditions, the

development of new products and services, the enhancement of existing products and services and the

introduction of competing products having technological or other advantages, many of which are beyond our

control. Therefore, future events and results may vary significantly from what we currently foresee. You should

not place undue importance on forward-looking information and should not rely upon this information as of any

other date. While we may elect to, we are under no obligation (and expressly disclaim any such obligation), and

do not undertake, to update or alter thi s inform ation before next quarter.

This analysis should be read in conjunction with the Corporation’s financial statements, and the notes thereto,

prepared in accordance with Canadian GAAP and the MD&A included in the Corporation’s 2007 Annual

Report. Throughout this discussion, all amounts are in Canadian dollars unle s s otherwise indicated.

MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)

CORPORATE STRATEGIES AND OBJECTIVES

Cogeco Cable’s objectives are to improve profitability and create shareholder value. The strategies

for reaching those objectives are sustained growth through the diversification and the improvement of

products and services, as well as of clientele and territories; the continuous improvement of networks

and equipment and tight cost control over business processes. The Corporation measures its

performance, with regard to these objectives, by monitoring revenue growth, RGU

(1)

growth and free

cash flow

(2)

. Below are the recent achievements in furthering of Cogeco Cable’s objectives.

Continuous improvement of the service offering and expansion of the customer base

Canadian operations

• Acquisitions:

o June 30, conclusion of the acquisition of all assets of FibreWired Burlington Hydro

Communications, Burlington Hydro Electric’s telecommunications division (City of

Burlington’s energy company) to expand Cogeco Business Solutions’ commercial

broadband service offering in Burlington, Ontario;

o June 13, announcement of the acquisition of all the shares of Toronto Hydro Telecom

Inc., the telecommunications subsidiary of Toronto Hydro Corporation (City of

Toronto’s energy company); subject to certain conditions, including regulatory

approval by the Commissioner of Competition, in order to further develop Cogeco

Cable’s business telecommunications activities by entering the Greater Toronto Area

market;

March 31, conclusion of the acquisition of all the assets of MaXess Networx®, ENWIN

Energy Ltd.’s telecommunications division (City of Windsor’s energy company) to

strengthen Cogeco Business Solutions’ Data offering in Windsor, Ontario.

• High Speed Internet service:

o June 7, launch of Wi-Fi Internet access at LaSalle Park in Burlington, Ontario;

May 7, launch of Wi-Fi Internet access in Québec with the deployment of the first

seven Québec hotspots in Trois-Rivières.

(1)

See the “Customer statistics” section for detailed explanations.

(2)

See the “Non-GAAP financial measures” section for explanations.

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• Digital Television services:

o June 24, launch of Food Network On Demand, HGTV On Demand and National

Geographic On Demand in Ontario territories;

o May 6, launch of RDI HD and ARTV HD, two new High Definition (HD) channels in

Québec;

March 4, launch of Family On Demand in Ontario, a new On Demand service.

• Telephony service:

o June 24, launch of Telephony in Maitland and Prescott, Ontario;

o June 17, launch of Telephony in Wickham, St-Cyrille-de-Wendover, Morin-Heights,

Shawbridge, St-Germain-de-Grantham and St-Prosper-de-Dorchester, Québec;

o June 4, launch of Telephony in Tillbury, Ontario;

o During the third quarter, the Telephony service was launched in the following cities:

o St-Pie, St-Damase, Ste-Madeleine, Acton Vale, St-Thomas d’Aquin,

St-Dominique-de-Bagot, Val-David, St-Donat-de-Montcalm, St-Faustin,

St-Adolphe-d’Howard, Bic, Ste-Luce, Ste-Blandine, St-Fabien, St-Gédéon and

St-Martin-de-Beauce in Québec;

o Kemptville, Acton, Winona, Smithville, Ridgeway, Huntsville, Bracebridge and

Gravenhurst, in Ontario.

• Customer service:

o Opening of a Cogeco Cable store located in Drummondville, Québec.

European operations

• Digital Television services:

o Cabovisão - Televisão por Cabo, S.A. (“Cabovisão”) continued its Digital Television

service deployment.

• Customer service:

o Opening of two (2) new Cabovisão stores located in Paivas (Seixal) and Castelo

Branco.

Continuous improvement of networks and equipment

• During the first nine months of fiscal 2008, the Corporation has invested approximately

$71.8 million in its infrastructure including headends and upgrade/rebuild.

Tight cost control over business processes

• For the third quarter of 2008, consolidated operating costs increased by 10.3% while revenue

grew by 14.3%;

• The Portuguese cable subsidiary maintained tight control over its costs and continued to

improve its business processes;

• The design of internal controls over financial reporting as per National Instrument 52-109 is

still underway. As discussed in the 2007 annual MD&A, the Corporation had identified certain

material weaknesses in the design of internal controls over financial reporting and there have

been improvements in the design of internal controls on some significant processes during

the quarter. The documentation and remediation of internal controls weaknesses are

progressing normally.

RGU growth

During the first nine months ended May 31, 2008, the consolidated number of RGUs increased by

190,109, or 7.6% to reach 2,675,774 units, which is in line with the Corporation’s revised RGU

growth projections of 225,000 units, representing approximately 9%, for the fiscal year ending August

31, 2008. Please consult the fiscal 2008 revised projections in the “Fiscal 2009 preliminary financial

guidelines” section for further details.

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Revenue growth

Fiscal 2008 third-quarter revenue increased by $34.3 million, or 14.3%, to reach $274.9 million.

During the first nine months of 2008, revenue increased by $97.3 million, or 14%, to reach

$791.9 million. For fiscal 2008, the Corporation expects revenue to reach $1,060 million. Please

consult the fiscal 2008 revised projections in the “Fiscal 2009 preliminary financial guidelines” section

for further details.

Free cash flow

In the third quarter of fiscal 2008, Cogeco Cable generated free cash flow of $36.9 million, compared

to $18.6 million for the same period last year. For the nine-month period ended May 31, 2008, the

Corporation generated free cash flow of $77.8 million compared to $15.7 million the year before. The

free cash flow improvements resulted mainly from an increase in operating income before

amortization and a reduction in financial expense. Fiscal 2008 third-quarter and first nine month

periods capital expenditures and deferred charges remained essentially the same compared to the

corresponding periods of the prior year. Due to the usual higher level of capital expenditures in the

fourth quarter, the Corporation projects free cash flow of $70 million for the fiscal year ending

August 31, 2008. Please consult the fiscal 2008 revised projections in the “Fiscal 2009 preliminary

financial guidelines” section for further details.

OPERATING RESULTS – CONSOLIDATED OVERVIEW

Quarters ended May 31, Nine months ended May 31,

($000,except perc enta ges )

2008 2007 Change 2008

2007 Change

$ $ % $ $ %

(unaudited) (unaudited) (unaudited) (unaudited)

Revenue 274,944 240,612 14.3 791,879 694,566 14.0

Operating costs 157,454 142,738 10.3 458,857 417,671 9.9

Management fees -

COGECO Inc. – – – 8,714 8,568 1.7

Operating income before

amortization

117,490 97,874 20.0 324,308 268,327 20.9

Operating margin 42.7% 40.7% 41.0% 38.6%

Revenue

Fiscal 2008 third-quarter consolidated revenue improved by $34.3 million, or 14.3%, to reach

$274.9 million, and, for the first nine-month period by $97.3 million, or 14% to reach $791.9 million.

Driven by an increased number of RGUs comb ined with rate increases, 2008 third quarter Canadian

operations revenue went up by $28.2 million, or 15.4%, and 2008 first nine-month period by

$86.7 million, or 16.5%.

Fiscal 2008 third-quarter European operations revenue increased by $6.2 million, or 10.7%, to reach

$64 million, and 2008 nine-month period by $10.6 million, or 6.3%, to reach $179.5 million compared

to the same periods last year. European operations implemented rate increases and have generated

lower RGU growth. Furthermore, the strength of the Euro against the Canadian dollar compared with

last year has increased revenue growth when translated to Canadian dollars.

- 6 -

Operating costs

For the third quarter and the first nine months of fiscal 2008, operating costs, excluding management

fees payable to COGECO Inc., increased by $14.7 million, or 10.3% and $41.2 million, or 9.9%,

compared to last year, to reach $157.5 million and $458.9 million, respectively. The increase in

operating costs for the third quarter and first nine-month period of 2008 was mainly attributable to

servicing additional RGUs in Canada and Portugal. In addition, for the first nine-month period,

operating costs were impacted by the timing of certain marketing initiatives in Portugal, including a

major campaign to increase brand awareness, and costs related to the design of internal controls and

review of business processes to comply with National Instrument 52-109.

Operating income before amortization

Fiscal 2008 third-quarter and first nine-month period operating income before amortization increased

by $19.6 million, or 20%, to reach $117.5 million and by $56 million, or 20.9%, to reach

$324.3 million, respectively, as a result of various rate increases and RGU growth generating

additional revenues which outpaced operating cost increases. Cogeco Cable’s 2008 third-quarter

operating margin increased to 42.7% from 40.7% for the third quarter of fiscal 2007. The operating

margin in Canada improved for the third-quarter of 2008 to 44.3% from 43.2% and in Europe to

37.7% from 32.7% compared to the same period of the prior year.

For the first nine months of fiscal 2008, the operating margin improved to 41% from 38.6% due to the

reasons described above with the Canadian operating margin improving to 42.6% from 40.2% and

the European operating margin to 35.4% from 33.7% when compared to the same period the year

before.

RELATED PARTY TRANSACTIONS

Cogeco Cable is a subsidiary of COGECO Inc., which holds 32.3% of the Corporation’s equity

shares, representing 82.7% of the votes attached to the Corporation’s voting shares. Under a

management agreement, the Corporation pays COGECO Inc. monthly management fees equal to

2% of its total revenue for certain executive, administrative, legal, regulatory, strategic and financial

planning and additional services. In 1997, management fees were capped at $7 million per year,

subject to annual upwards adjustments based on increases in the Consumer Price Index in Canada.

Accordingly, for fiscal 2008, management fees have been set at a maximum of $8.7 million, which

was reached in the second quarter, and therefore, no management fees were paid in this third

quarter. For fiscal 2007, management fees were set at a maximum of $8.6 million, and were fully paid

in the first six months of the year.

Furthermore, Cogeco Cable granted 22,683 stock options to COGECO’s employees during the first

nine months of 2008, compared to 319,647 for the same period last year. Of these 319,647 stock

options granted in the first nine months of fiscal 2007, 262,400 were conditional on the achievement

of certain yearly financial objectives by the Portuguese subsidiary over a period of three years.

During the third quarter and first nine months of fiscal 2008, Cogeco Cable charged COGECO Inc. an

amount of $0.1 million and $0.3 million, respectively, with regards to Cogeco Cable’s options granted

to COGECO’s employees. Details regarding the management agreement and stock options granted

to COGECO Inc.’s employees are provided in the MD&A of the Corporation’s 2007 Annual Report.

There were no other material related party transactions during the first nine months of 2008.

- 7 -

FIXED CHARGES

Quarters ended May 31, Nine months ended May 31,

($000, except percentages)

2008 2007 Change 2008 2007 Change

$ $ % $ $ %

(unaudited) (unaudited) (unaudited) (unaudited)

Amortization 58,209 47,278 23.1 166,885 135,159 23.5

Financial expense 17,372 21,273 (18.3)

51,243 66,045 (22.4)

Fiscal 2008 third quarter and first nine-month period amortization amounted to $58.2 million and to

$166.9 million compared to $47.3 million and $135.2 million for the same periods the year before.

Amortization expense increased for both periods mainly due to the following factors: the completion,

in the fourth quarter of fiscal 2007 of the purchase price allocation of the Cabovisão acquisition,

which includes the revaluation of tangible and intangible assets for an additional amortization

expense of approximately $6.2 million and $16.4 million in the third quarter and first nine months,

respectively, and additional capital expenditures arising from the required customer premise

equipment to sustain RGU growth and to support the deployment of the Digital Television service in

Portugal.

Fiscal 2008 third quarter and first nine-month period financial expense decreased by $3.9 million and

$14.8 million, respectively, compared to the same periods in fiscal 2007 due to the reduction of the

level of Indebtedness (defined as bank indebtedness and long-term debt) from the net proceeds of

subordinate voting shares issued during fiscal 2007 as well as free cash flow generated during those

periods. In addition, during the first nine-month period of fiscal 2007, the Corporation recorded a one-

time charge of $2.6 million related to the early repayment of the Second Secured Debentures,

Series A.

INCOME TAXES

Fiscal 2008 third quarter income tax expense amounted to $10.8 million compared to $8.9 million in

fiscal 2007. The effective tax rate for the three months ended Ma y 31, 2008 was 25.7% compared to

30.5% for the same period of 2007, mainly due to lower corporate income tax rates in Canada and to

income tax reductions in European operations resulting from the revaluation of tangible and

intangible assets upon the completion of the Cabovisão purchase price allocation in the fourth

quarter of fiscal 2007.

For the first nine months of fiscal 2008, income tax expense amounted to $4.8 million compared to

$18.8 million in 2007. Included in first nine-month 2008 expense is a recovery of $24 million related

to the reduction in corporate income tax rates announced on October 16, 2007 by the Canadian

federal government in its Economic Statement. According to the new tax initiatives, corporate income

tax rates have been further reduced from 20.5% to 19.5% effective January 1, 2008, from 20% to

19% effective January 1, 2009, from 19% to 18% effective January 1, 2010, from 18.5% to 16.5%

effective January 1, 2011, and to 15% effective January 1, 2012. These corporate income tax rates

were considered substantively enacted on December 14, 2007. The effective tax rates for the first

nine months of 2008 and 2007 were 4.5% and 28%, respectively. Excluding the effect of the tax rate

reductions, the effective tax rate for the first nine months of 2008 was 27.1%.

NET INCOME

Fiscal 2008 third quarter net income amounted to $31.1 million, or $0.64 per share, compared to

$20.4 million, or $0.45 per share, for the same period in 2007, an increase of 52.8% and 42.2%. First

- 8 -

nine-month period net income amounted to $101.4 million, or $2.09 per share. Excluding the effect of

the fiscal 2008 income tax rate reductions of $24 million, net income for the first nine months would

have amounted to $77.4 million, or $1.60 per share, compared to $48.3 million, or $1.14 per share, in

2007, an increase of 60.2% and 40.4%, respectively. Net income progre ssion, excluding the effect of

the income tax rate reductions, has resulted mainly from the growth in operating income before

amortization exceeding that of fixed charges.

CASH FLOW AND LIQUIDITY

Quarters ended May 31, Nine months ended May 31,

($000)

2008 2007 2008 2007

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Operating activities

Cash flow from operations 95,829 76,416 260,855 200,740

Changes in non-cash operating items 16,970 (23,029) (11,720) (101,545)

112,799 53,387 249,135 99,195

Investing activities

(1)

(74,014) (53,548) (196,655) (179,801)

Financing activities

(1)

17,957 (14,920) (36,466) 30,260

Effect of exchange rate changes on cash and cash

equivalents denominated in foreign currencies

1,063 (1,774) 1,265 1,486

Net change in cash and cash equivalents

57,805 (16,855) 17,279 (48,860)

Cash and cash equivalents at beginning

23,682 39,511 64,208 71,516

Cash and cash equivalents at end

81,487 22,656 81,487 22,656

(1)

Excludes assets acquired under capital leases.

Fiscal 2008 third quarter cash flow from operations reached $95.8 million, 25.4% higher than the

comparable period last year, primarily due to the increase in operating income before amortization

and to the reduction in financial expense. Changes in non-cash operating items generated higher

cash inflows compared to the same period last year, mainly as a result of an increase in accounts

payable and accrued liabilities and in income tax liabilities.

Fiscal 2008 first nine-month period cash flow from operations reached $260.9 million, an increase of

29.9% compared to the same period the year before, primarily due to the growth in operating income

before amortization and to the reduction in financial expense. Changes in non-cash operating items

generated lower cash outflows than for the same period last year, mainly as a result of a smaller

decrease in accounts payable and accrued liabilities and an increase in income tax liabilities. The

larger reduction in accounts payable and accrued liabilities in the first nine months of fiscal 2007 was

due to non-recurring payments made by the Portuguese subsidiary in accordance with the terms of

the acquisition.

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Investing activities, including capital expenditures segmented according to the National Cable

Television Association (NCTA) standard reporting categories, are as follows:

Quarters ended May 31, Nine months ended May 31,

($000)

2008

2007 2008 2007

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Customer Premise Equipment

(1)

20,238 18,985 70,477 76,188

Scalable Infrastructure 8,627 10,940 30,726 31,700

Line Extensions 2,160 2,598 7,738 7,798

Upgrade / Rebuild 15,498 13,936 41,105 41,967

Support Capital 5,355 5,358 12,433 8,133

Total Capital Expenditures

(2)

51,878 51,817 162,479 165,786

Deferred charges and Others 7,002 5,571 20,488 18,790

Business acquisition and related adjustments 16,105 (3,279)

16,105 (1,894)

Decrease in restricted cash – – – (88)

Total investing activities 74,985 54,109 199,072 182,594

(1)

Includes mainly new and replacement drops as well as home terminal devices.

(2)

Includes capital leases, which are excluded from the statements of cash flow.

Fiscal 2008 third quarter Total Capital Expenditures amounted to $51.9 million, essentially the same

level when compared to the corresponding last year period, due to the following factors:

• An increase in customer premise equipment capital spending resulted from higher RGU

growth fuelled in part by increased interest for High Definition technology for the Canadian

operations combined with the deployment of Digital Television in Portugal, partly offset by

lower RGU growth in Portugal.

• A decrease in scalable infrastructure capital spending mainly due to the timing of the

expansion and headend improvements, system powering and equipment reliability to sustain

increased customer demand for HSI and Telephony services.

• An increase in capital expenditures associated with network upgrades and rebuilds due to the

construction costs incurred to increase the number of homes passed in Portugal.

Fiscal 2008 first nine-month period Total Capital Expenditures decreased to $162.5 million from

$165.8 million for the same period last year due to the following factors:

• A reduction in customer premise equipment resulted from the timing to acquire such

equipment in fiscal 2007, in the Canadian operations, to ensure the availability of equipment

required to sustain expected RGU growth, partly offset by the deployment of Digital Television

service in Portugal.

• An increase in support capital is due to the improvement in information systems to sustain the

business operations and to the acquisition of vehicles.

Deferred charges and Others are mainly attributable to reconnect costs. Fiscal 2008 third quarter and

first nine-month period capital spending amounted to $7 million and $20.5 million compared to

$5.6 million and $18.8 million for the same periods the year before. The higher reconnect costs

associated with RGUs in Canada combined with the deployment of the Digital Television service in

Portugal explained the increases recorded so far in 2008.

In the third quarter and first nine months of fiscal 2008, the Corporation generated free cash flow

amounting to $36.9 million and $77.8 million, respectively, compared to $18.6 million and

$15.7 million for the same periods of the preceding year. The free cash flow improvements over last

- 10 -

year’s same periods are mainly due to an increase in operating income before amorti zation and to a

reduction in financial expense. The aggregate amount of Total Capital Expenditures and Deferred

charges increased by $1.1 million in the 2008 third quarter and decreased by $2 million for the first

nine-month period compared to the corresponding periods of last year due to the factors explained

above.

Indebtedness increased by $22.7 million in the third quarter of fiscal 2008. This increase is primarily

due to the issuance by the Corporation on March 5, 2008 of a $100 million senior unsecured

debenture by way of a private placement, the proceeds of which were used in part to reimburse the

bank indebtedness of $17.7 million and to finance the acquisition of MaXess Networx® for

$16.1 million. The debenture bears interest at a fixed rate of 5.936%, is redeemable at the

Corporation’s option at any time, in whole or in part, prior to maturity, at 100% of the principal amount

plus a make-whole premium and will mature on March 5, 2018. The increase in Indebtedness was

partly offset by repayments on the revolving credit facility of $58.6 million from the generated free

cash flow of $36.9 million and the increase in non-cash operating items of $17 million. For the same

period last year, Indebtedness decreased by $13.6 million. The reduction was mainly due to the

generated free cash flow of $18.6 million and the net change of $16.9 million in cash and cash

equivalents, partly offset by a decline of $23 million in non-cash operating items. In addition, during

the third quarter of fiscal 2008, a dividend of $0.10 per share was paid to the holders of subordinate

and multiple voting shares, totalling $4.9 million, compared to a dividend of $0.06 per share, or

$2.7 million, for the third quarter of fiscal 2007.

During the first nine months of fiscal 2008, the level of Indebtedness decreased by $25.3 million

mainly due to a net reduction of $123.1 million on the revolving credit facility. This decrease was

partly offset by the issuance of a senior unsecured debenture as discussed above. For the same

period last year, Indebtedness decreased by $153.1 million, mainly due to the completion of a public

offering of 5,000,000 subordinate voting shares for a net proceeds of approximately $184.2 million,

the generated free cash flow of $15.7 million and the net change of $48.9 million in cash and cash

equivalents, partly offset by a decline of $101.5 million in non-cash operating items. In addition,

quarterly dividends of $0.10 per share were paid to the holders of subordinate and multiple voting

shares totalling $14.5 million during the first nine months of fiscal 2008 compared to quarterly

dividends of $0.04 per share in the first quarter and $0.06 per share in the second and third quarters

totalling $6.7 million for the same period the year before.

As at May 31, 2008, the Corporation had a working capital deficiency of $345.9 million compared to

$120.7 million as at August 31, 2007. The greater deficiency is mainly attributable to the

US$ 150 million Senior Secured Notes, Series A and the related derivative financial instruments of

$91.3 million for an aggregate amount of $240.1 million due on October 31, 2008. Due to the nature

of its business, Cogeco Cable maintains a working capital deficiency due to a low level of accounts

receivable since the majority of the Corporation’s customers pay before their services are rendered,

contrary to accounts payable and accrued liabilities, which are paid after products or services are

rendered, thus enabling the Corporation to use cash and cash equivalents to reduce Indebtedness.

As at May 31, 2008, the Corporation had used $366.8 million of its $900 million Term Facility, for a

remaining availability of $533.2 million.

FINANCIAL POSITION

Since August 31, 2007, there have been major changes to the balance of Fixed assets, Cash and

cash equivalents, Accounts payable and accrued liabilities, Income tax liabilities, Accounts

receivable, Future income tax assets, Future income tax liabilities, Goodwill, Accumulated other

comprehensive income (loss), Derivative financial instruments and Indebtedness.

- 11 -

The $55.5 million fixed assets rise is mainly related to increased capital expenditures to sustain RGU

growth and by the appreciation of the Euro over the Canadian dollar. The $17.3 million increase in

cash and cash equivalents is mainly related to the net proceeds of issuance of senior unsecured

debentures, as discussed in the “Cash Flow and Liquidity” section, as well as the free cash flow

generated of $77.8 million, partly offset by the net reduction of the revolving credit facility of

$123.1 million, the acquisition of MaXess Networx® for $16.1 million, and dividends paid of

$14.5 million. The $16.1 million reduction in accounts payable and accrued liabilities is related to the

timing of payments made to suppliers. The $14.2 million increase in income tax liabilities is due to the

utilization of most of the Corporation’s tax losses carry forwards before fiscal 2008. The $5.7 million

accounts receivable increase is essentially due to revenue growth and its related level of receivables.

The $9.8 million reduction in future income tax assets is mainly due to the utilization of tax losses

carried forward from prior years, and the $20.4 million future income tax liabilities reduction is mainly

due to the corporate income tax rate reductions announced by the Canadian federal government and

considered substantively enacted on December 14, 2007. The $25.2 million goodwill increase is due

to the appreciation of the Euro over the Canadian dollar. The $15.1 million increase in accumulated

other comprehensive income (loss) is mainly the result of the appreciation of the Euro over the

Canadian dollar, partly offset by the changes in accounting policies related to financial instruments.

The derivative financial instruments have increased by $91.3 million and Indebtedness has

decreased by $83.4 million as a result of accounting changes and factors previously discussed in the

“Cash Flow and Liquidity” section, net of the unfavourable impact of the appreciation of the Euro over

the Canadian dollar. Please consult “Accounting policies and estimates” section for further details.

A description of Cogeco Cable’s share data as of June 30, 2008 is presented in the table below:

Number of

shares/options

Amount

($000)

Common shares

Multiple voting shares

Subordinate voting shares

15,691,100

32,813,371

98,346

890,228

Options to purchase Subordinate voting shares

Outstanding options

Exercisable options

862,237

332,210

In the normal course of business, Cogeco Cable has incurred financial obligations, primarily in the

form of long-term debt, operating and capital leases and guarantees. Cogeco Cable’s obligations, as

discussed in the 2007 annual MD&A, have not materially changed since August 31, 2007, with the

exception of the new financing discussed in the “Cash Flow and Liquidity” section.

On June 30, 2008, Cogeco Cable completed the acquisition of all the assets of FibreWired Burlington

Hydro Communications, Burlington Hydro Electric’s telecommunications division (City of Burlington’s

energy company) for a total consideration of $12.5 million. FibreWired Burlington Hydro

Communications operates a broadband network equipped with next generation Ethernet technology,

provides Burlington organizations with the broadband capacity they need for data networking, high-

speed Internet access, hosting services, e-business applications, video conferencing and other

advanced communications. Cogeco Cable will use this network to expand its commercial broadband

service offering in the area, which is in Cogeco Cable’s footprint.

On June 13, 2008, Cogeco Cable announced the acquisition of all of the shares of Toronto Hydro

Telecom Inc., the telecommunications subsidiary of Toronto Hydro Corporation (City of Toronto’s

energy company), subject to certain conditions, including regulatory approval by the Commissioner of

Competition. Toronto Hydro Telecom Inc. offers data communications and other telecommunications

services such as Ethernet, private line, Voice-over-Internet protocol (“VoIP”), high-speed Internet

access, dark fibre, data storage, data security and co-location to a wide range of business customers

and organizations throughout the Greater Toronto Area (“GTA”). This agreement will allow Cogeco

Cable to further the development of its business telecommunications activities.

- 12 -

On March 31, 2008, Cogeco Cable completed the acquisition of all the assets of MaXess Networx®,

ENWIN Energy Ltd.’s telecommunications division (City of Windsor’s energy company), for a total

cost, including acquisition costs, of $16.1 million. MaXess Networx® operates a broadband network

equipped with next generation ATM and Ethernet technology and provides organizations in south-

western Ontario with the broadband capacity required for data networking, high-speed Internet

access, e-business applications, video conferencing and other advanced communications.

DIVIDEND DECLARATION

At its July 9, 2008 meeting, the Board of Directors of Cogeco Cable declared a quarterly eligible

dividend of $0.10 per share for subordinate and multiple voting shares, payable on August 6, 2008, to

shareholders of record on July 23, 2008.

FOREIGN EXCHANGE MANAGEMENT

Cogeco Cable has entered into cross-currency swap agreements to set the liability for interest and

principal payments on its US$150 million Senior Secured Notes. These agreements have the effect

of converting the U.S. interest coupon rate of 6.83% per annum to an average Can adian dollar ﬁxed

interest rate of 7.254% per annum. The exchange rate applicable to the principal portion of the debt

has been ﬁxed at CAN$1.5910. Amounts due under the US$150 million Senior Secured Notes,

Series A decreased by CAN$9.5 mi llion at the end of the third quarter compared to August 31, 2007

due to the Canadian dollar’s appreciation. The fair value of cross-currency swaps increased by a net

amount of $7.8 million, of which $9.5 million offsets the foreign exchange gain on the $US debt. The

difference of $1.7 million was recorded as an increase of other comprehensive income.

As noted in the MD&A of the 2007 Annual Report, the Corporation’s investment in the Portuguese

subsidiary, Cabovisão, is exposed to market risk attributable to fluctuations in foreign currency

exchange rates, primarily changes in the values of the Canadian dollar versus the Euro. This risk is

mitigated since the major part of the purchase price for Cabovisão was borrowed directly in Euros.

This debt is designated as a hedge of net investments in self-sustaining foreign subsidiaries and,

accordingly, the Corporation realized a foreign exchange gain of CAN$16.2 million in the first nine

months of 2008, which is presented in other comprehensive income. The exchange rate used to

convert the Euro into Canadian dollars for the balance sheet accounts as at May 31, 2008 was

$1.5448 per Euro compared to $1.4390 per Euro as at August 31, 2007. The average exchange

rates prevailing during the third quarter and first nine months of 2008 used to convert the operating

results of the European operations were $1.5694 and $1.4851 per Euro, respectively, compared to

$1.5202 and $1.4946 per Euro respectively, for the same periods last year.

- 13 -

CANADIAN OPERATIONS

CUSTOMER STATISTICS

Net additions (losses) % of Penetration

(1)

May 31,

Quarters ended

May 31,

Nine months ended

May 31,

2008 2008 2007 2008 2007 2008 2007

RGUs

(2)

1,948,999 36,658 35,768 160,491 192,916

Basic Cable service

customers

858,570 (520)

(2,910)

9,413 18,607

HSI service

customers 464,668 8,480 11,030 48,832 60,393 57.5 50.7

Digital Television

service customers

425,596 11,585 8,583 45,717 43,768 50.4 44.5

Telephony service

customers 200,165 17,113 19,065 56,529 70,148 28.1 18.5

(1)

As a percentage of Basic Cable service customers in areas served.

(2)

Represents the sum of Basic Cable service, HSI service, Digital Television service and Telephony service customers.

Fiscal 2008 third quarter RGU net additions were higher than for the same period last year but the

growth rate reflects an early sign of maturation in some services. The number of net losses for Basic

Cable stood at 520 customers compared to 2,910 customers for the same period last year. Third-

quarter Basic Cable service customer losses are due to the end of the school year for college and

university students. In addition, 2007 third-quarter net losses were unusually high due to an

aggressive promotional offer that ended in the third quarter of fiscal 2007 which resulted in a

significant number of customer disconnections. Telephony customers grew by 17,113 to reach

200,165 compared to 19,065 for the same period last year. The lower growth is mostly attributable to

the increased penetration in areas where the service is already offered and to fewer new areas

where the service was launched. Telephony service coverage, as a percentage of homes passed,

has now reached 83% compared to 77% last year.

The number of HSI net additions stood at 8,480 customers compared to 11,030 customers for the

same period last year. During the third quarter of 2008, the growth in HSI customer net additions

continues to stem from the enhancement of the product offering, the impact of the bundled offer

(Cogeco Complete Connection) of Television, HSI and Telephony services, and promotional

activities.

The Digital Television service net additions stood at 11,585 customers compared to 8,583 customers

for the same period last year due to targeted marketing initiatives in 2008 to improve the penetration

rate. It also reflects the continuing strong interest for High Definition technology.

- 14 -

OPERATING RESULTS

Quarters ended

May 31,

Nine months ended

May 31,

($000, except percentages)

2008 2007 Change 2008 2007 Change

$ $ % $ $ %

(unaudited) (unaudited) (unaudited) (unaudited)

Revenue 210,928 182,763 15.4 612,337 525,620 16.5

Operating costs 117,580 103,778 13.3 342,949 305,733 12.2

Management fees - COGECO Inc. – – – 8,714 8,568 1.7

Operating income before

amortization 93,348 78,985 18.2 260,674 211,319 23.4

Operating margin 44.3% 43.2% 42.6% 40.2%

Revenue

Fiscal 2008 third quarter and first nine months revenue rose by $28.2 million, or 15.4%, and

$86.7 million, or 16.5%, to reach $210.9 million and $612.3 million, respectively. This growth is

explained mainly by an increase in the number of Telephony, Digital Television and HSI service

customers as mentioned in the “Customer Statistics” section, combined with the following rate

increases implemented by the Corporation:

• In the second half of fiscal 2007:

o In March 2007; a monthly rate increase of $3 per Digital Television service customer

in Ontario;

o In April 2007; a monthly rate increase of $3 per Digital Television service customer in

Québec and a rate increase of $1.50 per Analogue Value Pak service customer in

Ontario.

These rate increases represent an average increase of approximately $1.25 per Basic Cable

service customer.

• In the first quarter of fiscal 2008:

o In October 2007 in Québec; a rate increase of between $1 and $2 per Analogue

Basic Cable service customer without a bundle, a rate increase of $0.50 per basic

and tier service customer without a bundle, and rate increases from $2 to $5 per HSI

Lite service customer and $5 per HSI Standard stand-alone service customer;

o In November 2007 in Ontario; a rate increase of between $1 and $2 per Analogue

Basic Cable service customer without a bundle, and rate increases from $2 to $5 per

HSI Lite service customer and $5 per HSI Standard stand-alone service customer.

o Finally, a rebate of $5 per Telephony service customer with two services bundled

offers was also introduced in fiscal 2008 in Ontario and in Québec.

These rate adjustments implemented in fiscal 2008 represent an average increase of

approximately $0.50 per Basic Cable service customer.

Operating costs

Fiscal 2008 third quarter and first nine months operating costs, excluding management fees payable

to COGECO Inc., increased by $13.8 million, or 13.3%, and $37.2 million, or 12.2%, to reach

$117.6 million and $342.9 million, respectively. The operating costs increase is mainly attributable to

servicing additional RGUs.

- 15 -

Operating income before amortization

Fiscal 2008 third quarter and first nine months operating income before amortization rose by

$14.4 million, or 18.2%, to reach $93.3 million and by $49.4 million, or 23.4%, to reach

$260.7 million, respectively. The operating income before amortization has risen due to the increased

revenue outpacing the operating costs growth. Cogeco Cable’s Canadian operations third-quarter

operating margin increased to 44.3% from 43.2%, and for the nine-month period increased to 42.6%

from 40.2%, mainly as a result of RGU growth and implemented rate increases.

EUROPEAN OPERATIONS

CUSTOMER STATISTICS

Net additions (losses) % of Penetration

(1)

May 31,

Quarters ended

May 31,

Nine months ended

May 31,

2008 2008 2007 2008 2007 2008 2007

RGUs

(2)

726,775 14,231 16,666 29,618 58,196

Basic Cable service

customers 300,591 (1,069)

5,694 6,588 19,553

HSI service

customers 164,310 (1,615)

5,424 4,287 20,809 54.7 54.3

Digital Television

service customers 14,470 14,470 – 14,470 – 4.8 –

Telephony service

customers 247,404 2,445 5,548 4,273 17,834 82.3 83.3

(1)

As a percentage of Basic Cable service customers in areas served.

(2)

Represents the sum of Basic Cable service, HSI service and Telephony service customers.

Fiscal 2008 third-quarter and first nine-month periods were marked by an unfavourable economic

environment, aggressive marketing campaigns from competitors, including periodic intense price

competition, and the arrival of multiple triple-play providers in the Portuguese market. Cabovisão was

not matching the competition’s highly discounted offering at all times. These factors were the main

contributors to net customer losses in the Basic Cable and HSI services and lower customer growth

in Telephony services compared to the same period last year. The Digital Television service was

launched in the third quarter of 2008, with net additions of 14,470 customers in that period,

surpassing management expectations. Fiscal 2008 third-quarter Basic Cable service decreased by

1,069 customers compared to a growth of 5,694 in 2007, HSI service decreased by 1,615 customers

compared to an increase of 5,424 in 2007, and Telephony service grew by 2,445 customers

compared to 5,548 for the same period of the preceding year. Management considers the current

competitive dynamics in Portugal to be transitory. Cabovisão’s performance since its acquisition by

Cogeco Cable has exceeded management’s original business plan and growth prospects for the

long-term remain excellent in management’s view.

- 16 -

OPERATING RESULTS

Quarters ended May 31, Nine months ended May 31,

($000, except percentages)

2008

2007 Change 2008 2007 Change

$ $ % $ $ %

(unaudited) (unaudited) (unaudited) (unaudited)

Revenue 64,016 57,849 10.7 179,542 168,946 6.3

Operating costs 39,874 38,960 2.3 115,908 111,938 3.5

Operating income before

amortization

24,142 18,889 27.8 63,634 57,008 11.6

Operating margin 37.7% 32.7% 35.4% 33.7%

Revenue

Fiscal 2008 third-quarter and first nine months revenue increased by $6.2 million and $10.6 million to

reach $64 million and $179.5 million, respectively, an increase of 10.7% and 6.3%, compared to

fiscal 2007. This growth for the third quarter is mainly due to the following monthly rate increases

implemented by Cabovisão: an increase of $1 (€0.65) per Basic Cable service customer effective in

March 2007, an increase averaging $1.50 (€1) per Basic Cable customer and an increase averaging

$0.90 (€0.60) per HSI customer effective in January 2008, and the launch of Digital Television

services. The growth for the first nine-month period is mainly due to the increase in the number of

Basic Cable, HSI and Telephony service customers, and to the monthly rate increases described

above, as well as the launch of Digital Television services. Revenue from the European operations in

its local currency, for the third quarter and first nine months of fiscal 2008, amounted to €40.8 million

and €120.8 million, an increase of €2.7 million, or 7.2%, and €7.9 million, or 6.9%, respectively.

Operating costs

For the third quarter and the first nine months of fiscal 2008, operating costs increased by

$0.9 million and $4 million to reach $39.9 million and $115.9 million, respectively, an increase of

2.3% and 3.5% compared to last year. The increase in operating costs for the third quarter of 2008 is

mainly attributable to the launch of Digital Television services as well as servicing additional RGUs.

The operating costs increase for the nine-month period is due to servicing additional RGUs, timing of

certain marketing initiatives, including a major campaign to increase brand awareness, and costs

related to the design of internal controls and review of business processes to comply with National

Instrument 52-109. Operating costs from the European operations in its local currency, for the third

quarter and first nine months of fiscal 2008, amounted to €25 million and €77.7 million, a decrease of

€0.7 million, or 2.6%, and an increase of €2.8 million, or 3.8%, respectively.

Operating income before amortization

Fiscal 2008 third quarter and first nine months operating income before amortization increased from

$18.9 million to $24.1 million, an increase of 27.8% and from $57 million to $63.6 million, an increase

of 11.6%, respectively. The operating income before amortization increased due to revenue growth

outpacing the rise in operating costs. Fiscal 2008 third quarter European operations operating margin

increased from 32.7% to 37.7%. For the first nine-month period of 2008, the operating margin

increased from 33.7% to 35.4%. Operating income before amortization from the European operations

in its local currency, for the third quarter and first nine months of fiscal 2008, amounted to €15.8

million and €43.1 million, an increase of €3.4 million, or 27.3%, and €5 million, or 13%, respectively.

- 17 -

FISCAL 2009 PRELIMINARY FINA NCIAL GUIDELINES

The fiscal 2009 preliminary financial guidelines exclude the acquisition of Toronto Hydro Telecom

Inc., which is subject to the approval by the Commissioner of Competition. The revised guidelines,

with other changes as required, will be presented upon completion of the transaction and the release

of the 2008 year-end results.

For fiscal 2009, Cogeco Cable expects to grow revenue and operating income before amortization.

The preliminary guidelines take into consideration the global economical slowdown that is occurring

and should continue during 2009. In Canada and Portugal, mortgage interest rate increases and

higher commodity prices are leaving consumers with a lower level of disposable income. In addition,

Portugal’s anticipated gross domestic product growth for 2009 will be negatively impacted as the

Government deficit will be one of the highest of the European Union in recent history, while the

competitive landscape should remain unchanged. Results from this scenario should generate slower

growth when compared to prior years.

The revenue increase of approximately 10% should come from the combined Canadian and

European operations. The Canadian operations revenue should increase by approximately 13% from

continued deployment of Telephony service, by expanded penetration of HSI service and Digital

Television services in fiscal 2008 and 2009 and the impact of the rate increases implemented in fiscal

2008 in Ontario and in Québec, averaging $1.75 per Basic Cable service customer for both divisions.

Cogeco Cable plans to expand its Canadian Basic Cable Service clientele through consistently

effective marketing, competitive product offerings and superior customer service. As the penetration

of HSI, Telephony and Digital Television services increase, the demand for these products should

slow, reflecting maturity. Revenue from European operations should increase by approximately 3.5%

from €162 million to €168 million mainly from rate increases of approximately €1.30 (CDN$2) per

Basic Cable service customer implemented in fiscal 2008, sustained RGU growth from fiscal 2008

and 2009 and from the launch of Digital Television service in the second half of fiscal 2008.

European operations should contribute to approximately 2% in revenue growth due to the effect of

foreign exchange translation. For fiscal 2008, the expected Canadian dollar value of the Euro should

be approximately $1.48 per Euro while for fiscal 2009, it is anticipated that the Euro should be

converted at a rate of approximately $1.44 per Euro.

Growth in revenue and sustained cost control should help achieve a significant increase in operating

income before amortization by approximately 12% to 13%. Cogeco Cable expects to achieve an

operating margin of approximately 42.5%.

Cogeco Cable expects the amortization of capital assets and deferred charges to increase by

$25 million, mainly due to capital expenditures and deferred charges for RGU additions in fiscal 2008

and 2009. Management expects that cash flows generated by operations will finance capital

expenditures and deferred charges, expected to amount to $275 million, essentially the same as for

fiscal 2008. The Corporation expects to generate free cash flow in the order of $105 million, an

increase of approximately $35 million compared to fiscal 2008 projections. Generated free cash flow

should be used primarily to reduce Indebtedness, thus improving the Corporation’s leverage ratios.

Given the anticipated decrease in Indebtedness, financial expense will decline by approximately

$7 million. Net income of approximately $125 million should be achieved as a result of growth in

operating income before amortization exceeding the increase in fixed charges.

- 18 -

Consolidated

($ million, except customer data and operating margin)

Preliminary

Projections

Fiscal 2009

Revised Projections

April 10, 2008

Fiscal 2008

$ $

Financial Guidelines

Revenue 1,165 1,060

Operating income before amortization 495 440

Operating margin 42.5% 41% to 42%

Financial expense 65 72

Amortization 250 225

Net income 125 123

Capital expenditures and deferred charges 275 275

Free cash flow 105 70

Customer Addition Guidelines

RGUs 175,000 225,000

The exchange rate used for the fiscal 2009 preliminary projections is $1.4400 per Euro compared to

$1.4670 per Euro for the April 2008 revised projections.

UNCERTAINTIES AND MAIN RISK FACTORS

There has been no significant change in the risk factors and uncertainties facing Cogeco Cable as

described in the Corporation’s MD&A of the 2007 annual report, except for the Part II Licence Fees

payable to the Canadian Radio-television and Telecommunications Commission (CRTC). On

December 14, 2006, the Federal Court of Canada ruled that the Part II Licence Fees payable to the

CRTC are an unlawful tax. Both the Plaintiffs (the members of the Canadian Association of

Broadcasters, Videotron Ltee and CF Cable TV Inc.) and the Defendant (the Crown) have appealed

this decision to the Federal Court of Appeal. The Defendant was seeking to reverse the Court

decision that Part II Licence Fees are unlawful and the Plaintiffs were seeking a Court order requiring

a refund of past fees paid. The Appeal hearing was held on December 4 and 5 in Ottawa and a

decision was rendered on April 28, 2008 in favour of the Crown, to the effect that the fees are valid

regulatory charges. On June 26 and 27, 2008, the Plaintiffs filed applications for leave to appeal to

the Supreme Court of Canada. The Defendant must respond to these applications within 60 days.

Cogeco Cable has accrued the full amount with respect to these fees for fiscal year 2007 and the first

nine months of fiscal 2008.

ACCOUNTING POLICIES AND ESTIMATES

There has been no significant change in Cogeco Cable’s accounting policies and estimates and

future accounting pronouncements since August 31, 2007, except as described below. A description

of the Corporation’s policies and estimates can be found in the 2007 annual MD&A.

Financial instruments

Effective September 1, 2007, the Corporation adopted the Canadian Institute of Chartered

Accountants (“CICA”) Handbook Section 1530, Comprehensive Income, Section 3855, Financial

Instruments – Recognition and Measurement, Section 3861, Financial Instruments – Disclosure and

Presentation, and Section 3865, Hedges.

- 19 -

Statement of Comprehensive Income

A new statement entitled consolidated statements of comprehensive income was added to the

Corporation’s consolidated financial statements and includes net income as well as other

comprehensive income. Other comprehensive income represents changes in shareholders’ equity

arising from transactions and events from non-owner sources, such as changes in foreign currency

translation adjustments of net investments in self-sustaining foreign subsidiaries and long-term debt

designated as a hedge of net investments in self-sustaining foreign subsidiaries and changes in the

fair value of effective cash flow hedging instruments.

Recognition and Measurement of Financial Instruments

Under these new standards, all financial assets, including derivatives, must be classified as available

for sale, held for trading, held to maturity, or loans and receivables. All financial liabilities, including

derivatives, must be classified as held for trading or other liabilities. All financial instruments classified

as available for sale or held for trading are recognized at fair value on the consolidated balance sheet

while financial instruments classified as loans and receivables or other liabilities will continue to be

measured at amortized cost using the effective interest rate method. The standards allow the

Corporation to designate certain financial instruments, on initial recognition, as held for trading.

All of the Corporation's financial assets are classified as held for trading or loans and receivables.

The Corporation has classified its cash and cash equivalents as held for trading. Accounts receivable

have been classified as loans and receivables. All of the Corporation’s financial liabilities were

classified as other liabilities, except for the cross-currency swaps, which were classified as held for

trading. Held for trading assets and liabilities are carried at fair value on the balance sheet, with

changes in fair value recorded in the consolidated statement of income, except for the changes in fair

value of the cross-currency swaps, which are designated as cash flow hedges of the Senior Secured

Notes, Series A and are recorded in other comprehensive income. Loans and receivables and all

financial liabilities are carried at amortized cost using the effective interest method. Upon adoption,

the Corporation determined that none of its financial assets are classified as available for sale or held

to maturity. Except for the treatment of transaction costs and derivative financial instruments

mentioned below, the provisions of the new accounting standards had no impact on the consolidated

financial statements on September 1, 2007 and May 31, 2008.

Transaction costs

Effective September 1, 2007, transaction costs are capitalized on initial recognition and presented as

a reduction of the related financing, except for transaction costs on the revolving loan and the

swingline facility, which are presented as deferred charges. These costs are amortized over the term

of the related financing using the effective interest rate method, except for transaction costs on the

revolving loan and the swingline facility, which are amortized over the term of the related financing on

a straight-line basis. Previously, all transaction costs were capitalized and amortized on a straight-

line basis over the term of the related financing, over a period not exceeding five years. The impact of

these adjustments reduced deferred charges by $1.2 million, reduced long-term debt by $3.1 million,

increased future income tax liabilities by $0.6 million and increased retained earnings by $1.3 million.

Cash flow hedge

All derivatives are measured at fair value with changes in fair value recorded in the consolidated

statements of income unless they are effective cash flow hedging instruments. The changes in fair

value of cash flow hedging derivatives are recorded in other comprehensive income, to the extent

effective, until the variability of cash flows relating to the hedged asset or liability is recognized in the

consolidated statements of income. Any hedge ineffectiveness is recognized in the consolidated

statement of income immediately. Accordingly, the Corporation’s cross-currency swaps must be

measured at fair value in the consolidated financial statements. Since these cross-currency swaps

- 20 -

are used to hedge cash flows on Senior Secured Notes, Series A denominated in U.S. dollars, the

changes in fair value are recorded in other comprehensive income. The impact of measuring the

cross-currency swaps at fair value on the interim consolidated financial statements on September 1,

2007, increased derivative financial instrument liabilities by $83.5 million, decreased deferred credit

presented in long-term debt by $80.2 million, decreased future income tax liabilities by $1.1 million

and decreased opening accumulated other comprehensive income by $2.2 million. The impact of

measuring the cross-currency swaps at fair value on the interim consolidated financial statements for

the three month period ended May 31, 2008 decreased derivative financial instrument liabilities by

$1.6 million, increased future income tax liabilities by $0.1 million and increased accumulated other

comprehensive income by $0.2 million. The impact of measuring the cross-currency swaps at fair

value on the interim consolidated financial statements for the nine month period ended May 31, 2008

increased derivative financial instrument liabilities by $7.8 million, decreased future income tax

liabilities by $0.6 million and increased accumulated other comprehensive income by $1.1 million.

Net investment hedge

Financial statements of self-sustaining foreign subsidiaries are translated using the rate in effect at

the balance sheet date for asset and liability items, and using the average exchange rates during the

period for revenue and expenses. Adjustments arising from this translation are deferred and recorded

as foreign currency translation adjustments in accumulated other comprehensive income and are

included in income only when a reduction in the investment in these foreign subsidiaries is realized.

Unrealized foreign exchange gains and losses on long-term debt denominated in foreign currencies,

that is designated as a hedge of net investments in self-sustaining foreign subsidiaries are recorded

as foreign currency translation adjustments in accumulated other comprehensive income, net of

income taxes. As a result, an amount of $3.1 million was reclassified as at August 31, 2007 from the

foreign currency translation adjustment to the accumulated other comprehensive income and the

Corporation’s comparative financial statements were restated in accordance with transitional

provisions.

Embedded derivatives

All embedded derivatives that are not closely related to the host contracts, are measured at fair

value, with changes in fair value recorded in the consolidated statement of income. On September 1,

2007, and at May 31, 2008, there are no significant embedded derivatives or non-financial derivatives

that require separate fair value recognition on the consolidated balance sheet. In accordance with the

new standards, the Corporation selected September 1, 2002, as its transition date for adopting the

standard related to embedded derivatives.

Upcoming standards

In 2006, the CICA issued Handbook Section 3862, Financial Instruments – Disclosures, and Section

3863, Financial Instruments – Presentation. These Sections are to be applied to interim and annual

financial statements relating to fiscal years beginning on or after October 1, 2007. The Corporation is

currently evaluating the impact of these new standards.

Accounting changes

In July 2006, the CICA issued Section 1506, Accounting Changes, which modifies certain aspects of

the previous standard. A reporting entity may not change its accounting method unless required by

primary source of GAAP or to provide a more reliable and relevant presentation of the financial

statements. In addition, changes in accounting methods must be applied retroactively and additional

information must be disclosed. This Section applies to interim and annual financial statements

relating to fiscal years beginning on or after January 1, 2007. During the first quarter of fiscal 2008,

the Corporation adopted this new standard and concluded that it had no significant impact on these

consolidated financial statements.

- 21 -

NON-GAAP FINANCIAL MEASURES

This section describes non-GAAP financial measures used by Cogeco Cable throughout this MD&A.

It also provides reconciliations between these non-GAAP measures and the most comparable GAAP

financial measures. These financial measures do not have standard definitions prescribed by

Canadian GAAP and therefore, may not be comparable to similar measures presented by other

companies. These measures include cash flow from operations and free cash flow.

Cash flow from operations

Cash flow from operations is used by Cogeco Cable’s management and investors to evaluate cash

flow generated by operating activities, excluding the impact of changes in non-cash operating items.

This allows the Corporation to isolate the cash flow from operating activities from the impact of cash

management decisions. Cash flow from operations is subsequently used in calculating the non-

GAAP measure, “free cash flow”. Cash flow from operations is calculated as follows:

Quarters ended May 31, Nine months ended May 31,

2008 2007 2008 2007

($000)

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Cash flow from operating activities 112,799 53,387 249,135 99,195

Changes in non-cash operating items (16,970)

23,029 11,720 101,545

Cash flow from operations 95,829 76,416 260,855 200,740

Free cash flow

Free cash flow is used, by Cogeco Cable’s management and investors, to measure its ability to repay

debt, distribute capital to its shareholders and finance its growth. Free cash flow is calculated as

follows:

Quarters ended May 31, Nine months ended May 31,

2008 2007 2008 2007

($000)

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Cash flow from operations 95,829 76,416 260,855 200,740

Acquisition of fixed assets (50,907)

(51,256)

(160,062) (162,993)

Increase in deferred charges (7,050)

(6,000)

(20,561) (19,258)

Assets acquired under capital leases – as per

Note 12b) (971)

(561)

(2,417) (2,793)

Free cash flow 36,901 18,599 77,815 15,696

ADDITIONAL INFORMATION

This MD&A was prepared on July 9, 2008. Additional information relating to the Corporation,

including its Annual Information Form, is available on the SEDAR website at www.sedar.com.

- 22 -

ABOUT COGECO CABLE

Cogeco Cable (www.cogeco.ca), a telecommunications company offering a diverse range of services

to its customers in Canada and Portugal, is the second largest cable operator in Ontario, Québec and

Portugal, in terms of the number of Basic Cable service customers served. Through its two-way

broadband cable networks, Cogeco Cable provides its residential and commercial customers with

Analogue and Digital Television, High Speed Internet and Telephony services. The Corporation

provides approximately 2,676,000 revenue generating units (RGUs) to 2,410,000 homes passed in

its Canadian and Portuguese service territories. Cogeco Cable’s subordinate voting shares are listed

on the Toronto Stock Exchange (TSX: CCA).

– 30 –

Source: Cogeco Cable Inc.

Pierre Gagné

Vice President, Finance and Chief Financial Officer

Tel.: 514 764-4700

Information: Media

Marie Carrier

Director, Corporate Communications

Tel.: 514 764-4700

Analyst Conference Call: Thursday, Jul y 10, 2008 at 11:00 A.M. (EDT)

Media representatives may attend as listeners only.

Please use the following dial-in number to have access to the

conference call by dialing five minutes before the start of the

conference:

Canada/USA Access Number: 1 866 321-8231

International Access Number: + 1 416 642-5213

Confirmation Code: 4152342

By Internet at www.cogeco.ca/investors

A rebroadcast of the conference call will be available until July 17, by

dialing:

Canada and USA access number: 1 888 203-1112

International access number: + 1 647 436-0148

Confirmation code: 4152342

- 23 -

Supplementary Quarterly Financial Information

(unaudited)

Quarters ended May 31, February 29 / 28, November 30, August 31,

2008

(1)

2007

(1)

2008

(1)

2007

(1)

2007

(1)

2006

(1)

2007

(1)

2006

(1)

($000, except percentages and

per share data)

$ $ $ $ $ $ $ $

Revenue 274,944 240,612 265,102 231,952 251,833 222,002 244,314 174,875

Operating income before

amortization

117,490 97,874 108,481 86,791 98,337 83,662 102,426 72,864

Operating margin 42.7% 40.7% 40.9% 37.4% 39.0% 37.7% 41.9% 41.7%

Amortization 58,209 47,278 55,989 43,572 52,687 44,309 54,164 34,801

Financial expense 17,372 21,273 16,959 23,551 16,912 21,221 18,524 16,374

Income taxes 10,767 8,942 (14,378)

4,261 8,375 5,597 (6,630)

(12,298)

Net income 31,142 20,381 49,911 15,407 20,363 12,535 36,368 33,987

Cash flow from operations 95,829 76,416 85,273 62,264 79,753 62,060 83,825 56,714

Earnings per share

Basic 0.64 0.45 1.03 0.37 0.42 0.31 0.79 0.85

Diluted 0.64 0.45 1.02 0.37 0.42 0.31 0.78 0.85

(1)

Include operating results of the cable subsidiary, Cabovisão, since the date of acquisition of control on August 1, 2006.

Cogeco Cable’s operating results are not generally subject to material seasonal ﬂuctuations.

However, the loss of Basic Service customers is usually greater, and the addition of HSI service

customers is generally lower, in the third quarter, mainly due to students leaving campuses at the

end of the school year. Cogeco Cable offers its services in several university and college towns, such

as Kingston, Windsor, St. Catharines, Hamilton, Peterborough, Trois-Rivières and Rimouski in

Canada. Furthermore, the third and fourth quarters’ operating margin is usually higher as lower or no

management fees are paid to COGECO Inc. Under a Management Agreement, Cogeco Cable pays

a fee equal to 2% of its total revenue subject to a maximum amount. For more details, please refer to

the “Related Party Transactions” section.

COGECO CABLE INC. - 24 -

Customer Statistics

May 31, August 31,

2008 2007

Homes Passe

Ontario

(1)

1 023 089 997 498

Québec 498 863 486 592

Canada 1 521 952 1 484 090

Portugal 887 476 859 376

Total 2 409 428 2 343 466

Revenue Generating Unit

Ontario 1 365 81

1 256 244

Québec 583 183 532 264

Canada 1 948 999 1 788 508

Portugal 726 77

697 157

Total 2 675 77

2 485 66

Basic Cable Service Customer

Ontario 600 000 594 889

Québec 258 570 254 268

Canada 858 570 849 157

Portugal 300 591 294 003

Total 1 159 161 1 143 160

Discretionnary Service Customer

Ontario 495 082 468 764

Québec 212 033 204 585

Canada 707 11

673 349

Portugal - -

Total 707 11

673 349

Pay TV Service Customer

Ontario 98 01

88 835

Québec 45 540 42 180

Canada 143 55

131 015

Portugal 57 671 54 723

Total 201 22

185 738

High Speed Internet Service Customer

Ontario 349 27

316 363

Québec 115 39

99 473

Canada 464 668 415 836

Portugal 164 310 160 023

Total 628 978 575 859

Digital Television Service Customers

Ontario 277 274 246 267

Québec 148 322 133 612

Canada 425 596 379 879

Portugal 14 470 -

Total 440 066 379 879

Telephony Service Customer

Ontario 139 268 98 725

Québec 60 897 44 911

Canada 200 16

143 636

Portugal 247 40

243 131

Total 447 569 386 767

(1) An audit of homes passed in Ontario was completed during the first quarter of fiscal 2007 and, as a result,

the number of homes passed was reduced by 42,386

- 25 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF INCOME

Three months ended May 31,

Nine months ended May 31,

(In thousands of dollars, except per share data) 2008

2007

2008

2007

(unaudited)

(unaudited) (unaudited)

(unaudited)

Revenue

Service 273,736

239,862

786,820

691,846

Equipment 1,208

750

5,059

2,720

274,944

240,612

791,879

694,566

Operating costs 157,454

142,738

458,857

417,671

Management fees – COGECO Inc. –

–

8,714

8,568

Operating income before amortization 117,490

97,874

324,308

268,327

Amortization (note 4) 58,209

47,278

166,885

135,159

Operating income 59,281

50,596

157,423

133,168

Financial expense (note 5) 17,372

21,273

51,243

66,045

Income before income taxes 41,909

29,323

106,180

67,123

Income taxes (note 6) 10,767

8,942

4,764

18,800

Net income 31,142

20,381

101,416

48,323

Earnings per share (note 7)

Basic 0.64

0.45

2.09

1.14

Diluted 0.64

0.45

2.08

1.13

- 26 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended May 31,

Nine months ended May 31,

(In thousands of dollars) 2008

2007 2008

2007

(unaudited)

Net income 31,142

20,381

101,416

48,323

Other comprehensive income

Unrealized gains (losses) on derivative financial instruments

designated as cash flow hedges, net of income taxes expense

of $279,000 and income taxes recovery of $908,000

1,272

–

(6,879)

–

Reclassification of realized losses (gains) to net income on

derivative financial instruments designated as cash flow

hedges, net of income taxes recovery of $199,000 and income

taxes expense of $1,465,000

(1,091)

–

8,015

–

Unrealized gains (losses) on translation of net investments in

self-sustaining foreign subsidiaries

23,042

(47,474)

47,432

9,584

Unrealized gains (losses) on translation of long-term debts

designated as hedge of net investments in self-sustaining

foreign subsidiaries (net of income taxes recovery of

$1,703,000 in 2007)

(16,019)

32,813

(31,282)

(8,357)

7,204

(14,661)

17,286

1,227

Comprehensive income 38,346

5,720

118,702

49,550

- 27 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

Nine months ended May 31,

(In thousands of dollars) 2008

2007

(unaudited) (unaudited)

Balance at beginning, as reported 181,952

117,760

Changes in accounting policies (note 1) 1,307

–

Balance at beginning, as restated 183,259

117,760

Net income 101,416

48,323

Subordinate voting shares issue costs, net of related income taxes of $2,560,000 –

(5,729)

Dividends on multiple voting shares (4,707)

(2,510)

Dividends on subordinate voting shares (9,834)

(4,210)

Balance at end 270,134

153,634

- 28 -

COGECO CABLE INC.

CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)

May 31, 2008

August 31, 2007

(unaudited) (audited)

Assets

Current

Cash and cash equivalents 81,487

64,208

Accounts receivable 52,630

46,945

Income taxes receivable 1,186

1,112

Prepaid expenses 6,198

7,606

Future income tax assets 8,145

17,986

149,646

137,857

Income taxes receivable 1,444

1,345

Fixed assets 1,174,975

1,119,498

Deferred charges 56,393

54,645

Intangible assets (note 8) 1,057,287

1,058,410

Goodwill (note 8) 367,772

342,584

2,807,517

2,714,339

Liabilities and Shareholders’ equity

Liabilities

Current

Accounts payable and accrued liabilities 194,385

210,496

Income tax liabilities 15,186

953

Deferred and prepaid income 28,471

29,837

Derivative financial instruments 91,285

–

Current portion of long-term debt (note 9) 166,252

17,292

495,579

258,578

Long-term debt (note 9) 778,231

1,010,634

Deferred and prepaid income 11,765

11,501

Pension plan liabilities and accrued employees benefits 2,561

1,918

Future income tax liabili ties 245,622

266,042

1,533,758

1,548,673

Shareholders’ equity

Capital stock (note 10) 988,574

984,405

Contributed surplus – stock-based compensation 3,106

2,419

Retained earnings 270,134

181,952

Accumulated other comprehensive income (loss) (note 11) 11,945

(3,110)

1,273,759

1,165,666

2,807,517

2,714,339

- 29 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

Three months ended May 31,

Nine months ended May 31,

(In thousands of dollars)

2008

2007

2008

2007

(unaudited) (unaudited) (unaudited) (unaudited)

Cash flow from operating activities

Net income 31,142

20,381

101,416

48,323

Adjustments for:

Amortization (note 4) 58,209

47,278

166,885

135,159

Amortization of deferred financing cos ts 730

532

2,183

1,713

Future income taxes (note 6) 4,782

7,861

(12,480)

13,535

Stock-based compensation 739

803

1,961

2,036

Loss (gain) on disposal of fixed assets 152

(130)

391

(169)

Other 75

(309)

499

143

95,829

76,416

260,855

200,740

Changes in non-cash operating items (note 12a)) 16,970

(23,029)

(11,720)

(101,545)

112,799

53,387

249,135

99,195

Cash flow from investing activities

Acquisition of fixed assets (note 12b)) (50,907)

(51,256)

(160,062)

(162,993)

Increase in deferred charges (7,050)

(6,000)

(20,561)

(19,258)

Decrease in restricted cash –

–

Business acquisition and related adjustments (note 2) (16,105)

3,279

(16,105)

1,894

Other 48

429

468

(74,014)

(53,548)

(196,655)

(179,801)

Cash flow from financing activities

Decrease in bank indebtedness (17,697)

–

Increase in long-term debt 99,759

22,861

99,759

22,861

Repayment of long-term debt (59,317)

(36,475)

(125,038)

(175,947)

Issue of subordinate voting shares 62

1,434

3,354

198,355

Subordinate voting shares issue costs –

(23)

–

(8,289)

Dividends on multiple voting shares (1,569)

(941)

(4,707)

(2,510)

Dividends on subordinate voting shares (3,281)

(1,776)

(9,834)

(4,210)

17,957

(14,920)

(36,466)

30,260

Effect of exchange rate changes on cash and cash equivalents

denominated in foreign currencies

1,063

(1,774)

1,265

1,486

Net change in cash and cash equivalents 57,805

(16,855)

17,279

(48,860)

Cash and cash equivalents at beginning 23,682

39,511

64,208

71,516

Cash and cash equivalents at end 81,487

22,656

81,487

22,656

See supplemental cash flow information in note 12.

- 30 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

1. Basis of Presentation

In the opinion of management, the accompanying unaudited interim consolidated financial statements, prepared in

accordance with Canadian generally accepted accounting principles (“GAAP”), contain all adjustments necessary to

present fairly the financial position of Cogeco Cable Inc. (“the Corporation”) as at May 31, 2008 and August 31, 2007

as well as its results of operations and its cash flow for the three and nine-month periods ended May 31, 2008 and

2007.

While management believes that the disclosures presented are adequate, these unaudited interim consolidated

financial statements and notes should be read in conjunction with Cogeco Cable Inc.’s annual consolidated financial

statements for the year ended August 31, 2007. These unaudited interim consolidated financial statements follow the

same accounting policies as the most recent annual consolidated financial statements, except for the adoption of the

new accounting policies on financial instruments described below.

Financial instruments

Effective September 1, 2007, the Corporation adopted the Canadian Institute of Chartered Accountants (“CICA”)

Handbook Section 1530, Comprehensive Income, Section 3855, Financial Instruments – Recognition and

Measurement, Section 3861, Financial Instruments – Disclosure an d Presentation and Section 3865, Hedges.

Statement of Compreh ensive Income

A new statement, entitled Consolidated Statements of Comprehensive Income, was added to the Corporation’s

consolidated financial statements and includes net income as well as other comprehensive income. Other

comprehensive income represents changes in shareholders’ equity arising from transactions and events from non-

owner sources, such as changes in foreign currency translation adjustments of net investments in self-sustaining

foreign subsidiaries and long-term debt designated as a hedge of net investments in self-sustaining foreign

subsidiaries and changes in the fair value of effective cash flow hedging in struments.

Recognition and Measurement of Financial Instruments

Under these new standards, all financial assets, including derivatives, must be classified as available for sale, held for

trading, held to maturity, or loans and receivables. All financial liabilities, including derivatives, must be classified as

held for trading or other liabilities. All financial instruments classified as available for sale or held for trading are

recognized at fair value on the consolidated balance sheet while financial instruments classified as loans and

receivables or other liabilities will continue to be measured at amortized cost using the effective interest rate method.

The standards allow the Corporation to designate certain financial instruments, on initial recognition, as held for

trading.

All of the Corporation's financial assets are classified as held for trading or loans and receivables. The Corporation

has classified its cash and cash equivalents as held for trading. Accounts receivable has been classified as loans and

receivables. All of the Corporation’s financial liabilities were classified as other liabilities, except for the cross-currency

swaps, which were classified as held for trading. Held for trading assets and liabilities are carried at fair value on the

consolidated balance sheet, with changes in fair value recorded in the consolidated statements of income, except for

the changes in fair value of the cross-currency swaps, which are designated as cash flow hedges of the Senior

Secured Notes Series A and are recorded in other comprehensive income. Loans and receivables and all financial

liabilities are carried at amortized cost using the effective interest method. Upon adoption, the Corporation determined

that none of its financial assets are classified as available for sale or held to maturity. Except for the treatment of

transaction costs and derivative financial instruments mentioned below, the provisions of the new accounting

standards had no impact on the con solidated financial statements on September 1, 2007 a nd May 31, 2008.

- 31 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

1. Basis of Presentation (continued)

Transaction costs

Effective September 1, 2007, transaction costs are capitalized on initial recognition and presented as a reduction of

the related financing, except for transaction costs on the revolving loan and the swingline facility, which are presented

as deferred charges. These costs are amortized over the term of the related financing using the effective interest rate

method, except for transaction costs on the revolving loan and the swingline facility, which are amortized over the

term of the related financing on a straight-line basis. Previously, all transaction costs were capitalized and amortized

on a straight-line basis over the term of the related financing, over a period not exceeding five years. The impact of

these adjustments reduced deferred charges by $1.2 million, reduced long-term debt by $3.1 million, increased future

income tax liabilities by $0.6 million and increased retained earnings by $1.3 million.

Cash flow hedge

All derivatives are measured at fair value with changes in fair value recorded in the consolidated statements of income

unless they are effective cash flow hedging instruments. The changes in fair value of cash flow hedging derivatives

are recorded in other comprehensive income, to the extent effective, until the variability of cash flows relating to the

hedged asset or liability is recognized in the consolidated statements of income. Any hedge ineffectiveness is

recognized in the consolidated statements of income immediately. Accordingly, the Corporation’s cross-currency

swaps must be measured at fair value in the consolidated financial statements. Since these cross-currency swaps are

used to hedge cash flows on Senior Secured Notes Series A denominated in U.S. dollars, the changes in fair value

are recorded in other comprehensive income. The impact of measuring the cross-currency swaps at fair value on the

interim consolidated financial statements on September 1, 2007, increased derivative financial instrument liabilities by

$83.5 million, decreased deferred credit presented in long-term debt by $80.2 million, decreased future income tax

liabilities by $1.1 million and decreased opening accumulated other comprehensive income by $2.2 million. The

impact of measuring the cross-currency swaps at fair value on the interim consolidated financial statements for the

three-month period ended May 31, 2008 decreased derivative financial instrument liabilities by $1.6 million, increased

future income tax liabilities by $0.1 million and increased accumulated other comprehensive income by $0.2 million.

The impact of measuring the cross-currency swaps at fair value on the interim consolidated financial statements for

the nine-month period ended May 31, 2008 increased derivative financial instrument liabilities by $7.8 million,

decreased future income tax liabilities by $0.6 million and increased accumulated other comprehensive income by

$1.1 million.

Net investment hedge

Financial statements of self-sustaining foreign subsidiaries are translated using the rate in effect at the balance sheet

date for asset and liability items, and using the average exchange rates during the period for revenue and expenses.

Adjustments arising from this translation are deferred and recorded as foreign currency translation adjustments in

accumulated other comprehensive income and are included in income only when a reduction in the investment in

these foreign subsidiaries is realized. Unrealized foreign exchange gains and losses on long-term debt denominated

in foreign currency, that is designated as a hedge of net investments in self-sustaining foreign subsidiaries are

recorded as foreign currency translation adjustments in accumulated other comprehensive income, net of income

taxes. As a result, an amount of $3.1 million was reclassified as at August 31, 2007 from the foreign currency

translation adjustment to the accumulated other comprehensive income and the Corporation’s comparative financial

statements were restated in accordance with transitional provisions.

- 32 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

1. Basis of Presentation (continued)

Embedded derivatives

All embedded derivatives that are not closely related to the host contracts are measured at fair value, with changes in

fair value recorded in the consolidated statements of income. On September 1, 2007 and as at May 31, 2008, there

are no significant embedded derivatives or non-financial derivatives that require separate fair value recognition on the

consolidated balance sheet. In accordance with the new standards, the Corporation selected September 1, 2002, as

its transition date for adopting the standard related to embedded derivatives.

Upcoming standards

In 2006, the CICA issued Handbook Section 3862, Financial Instruments – Disclosures, and Section 3863, Financial

Instruments – Presentation. These Sections are to be applied to interim and annual financial statements relating to

fiscal years beginning on or after October 1, 2007. The Corporation is currently evaluating the impact of these new

standards.

Accounting changes

In July 2006, the CICA issued Section 1506, Accounting Changes, which modifies certain aspects of the previous

standard. A reporting entity may not change its accounting method unless required by primary source of GAAP or to

provide a more reliable and relevant presentation of the financial statements. In addition, changes in accounting

methods must be applied retroactively and additional information must be disclosed. This Section applies to interim

and annual financial statements relating to fiscal years beginning on or after January 1, 2007. During the first quarter,

the Corporation adopted this new standard and concluded that it had no significant impact on these consolidated

financial statements.

Future accounting pronouncements

Goodwill and intangible assets

In February 2008, the CICA issued Section 3064, Goodwill and intangible assets, replacing Section 3062, Goodwill

and other intangible assets and Section 3450, Research and development costs. The new Section establishes

standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial

recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from

the standards included in the previous Section 3062. The new Section will be applicable to interim and annual

financial statements relating to fiscal years beginning on or after October 1, 2008. The Corporation is currently

evaluating the impact of the adoption of this new Section on its consolid ated financial statements.

- 33 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

2. Business acquisition

Acquisition of MaXess Networx®

On March 31, 2008, the Corporation completed the acquisition of all the assets of MaXess Networx®, ENWIN Energy

Ltd.’s telecommunications division (City of Windsor’s energy company) for a total consideration of $15.6 million.

MaXess Networx® operates a broadband network equipped with next generation ATM and Ethernet technology and

provides organizations in south-western Ontario with the broadband capacity required for data networking, high-speed

Internet access, e-business applications, video conferencing and other advanced commu nications.

The acquisition was accounted for using the purchase method. The results of MaXess Networx® have been

consolidated as of the acquisition date.

The allocation of the purchase price of the acquisition is as follow:

(unaudited)

Consideration paid

Assets purchase price 15,555

Acquisition costs 550

16,105

Net assets acquired

Accounts receivable 276

Prepaid expenses

511

Fixed assets

13,794

Customer relationships

1,890

Accounts payable and ac c rued lia bilities assume d

(350)

Deferred and prepaid income

(16)

16,105

- 34 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

3. Segmented Information

The Corporation’s activities are comprised of Cable Television, High Speed Internet and Telephony services. The

Corporation considers its Cable Television, High Speed Internet and Telephony activities as a single operating

segment. The Corporation’s activities are carried out in Canada and Europe.

The principal financi al information per business segment is pre sente d in the tables below:

Canada Europe Consolidated

Three months ended May 31,

(unaudited)

2008

2007

2008

2007

2008

2007

Revenue 210,928

182,763

64,016

57,849

274,944

240,612

Operating costs 117,580

103,778

39,874

38,960

157,454

142,738

Operating income before amort iz ati o n 93,348

78,985

24,142

18,889

117,490

97,874

Amortization 38,219

33,624

19,990

13,654

58,209

47,278

Operating income 55,129

45,361

4,152

5,235

59,281

50,596

Financial expens e (revenu e) 17,493

19,191

(121)

2,082

17,372

21,273

Income taxes 12,157

8,629

(1,390)

313

10,767

8,942

Net income 25,479

17,541

5,663

2,840

31,142

20,381

Net assets employed

(1) (2)

1,806,367

1,744,616

685,042

653,681

2,491,409

2,398,297

Total assets

(2)

2,009,214

1,955,218

798,303

759,121

2,807,517

2,714,339

Fixed assets

(2)

855,634

811,982

319,341

307,516

1,174,975

1,119,498

Goodwill

(2)

–

367,772

342,584

367,772

342,584

Acquisition of fixed assets 39,572

43,237

12,306

8,580

51,878

51,817

(1)

Total assets less cash and cash equivalents, accounts payable and accrued liabilities and deferred and prepaid income.

(2)

As at May 31, 2008 and August 31, 2007.

- 35 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

3. Segmented Information (continued)

Canada Europe Consolidated

Nine months ended May 31,

(unaudited)

2008

2007

2008

2007

2008

2007

Revenue 612,337

525,620

179,542

168,946

791,879

694,566

Operating costs 342,949

305,733

115,908

111,938

458,857

417,671

Management fees – COGECO Inc. 8,714

8,568

–

8,714

8,568

Operating income before amort iz ati o n 260,674

211,319

63,634

57,008

324,308

268,327

Amortization 110,990

96,391

55,895

38,768

166,885

135,159

Operating income 149,684

114,928

7,739

18,240

157,423

133,168

Financial expens e (revenu e) 51,327

64,256

(84)

1,789

51,243

66,045

Income taxes 8,341

16,086

(3,577)

2,714

4,764

18,800

Net income 90,016

34,586

11,400

13,737

101,416

48,323

Net assets employed

(1) (2)

1,806,367

1,744,616

685,042

653,681

2,491,409

2,398,297

Total assets

(2)

2,009,214

1,955,218

798,303

759,121

2,807,517

2,714,339

Fixed assets

(2)

855,634

811,982

319,341

307,516

1,174,975

1,119,498

Goodwill

(2)

–

367,772

342,584

367,772

342,584

Acquisition of fixed assets 125,042

136,815

37,437

28,971

162,479

165,786

(1)

Total assets less cash and cash equivalents, accounts payable and accrued liabilities and deferred and prepaid income.

(2)

As at May 31, 2008 and August 31, 2007.

4. Amortization

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited)

(unaudited) (unaudited)

(unaudited)

Fixed assets 49,953 42,268 142,646 120,026

Deferred charges 5,481 5,010 16,473 15,133

Intangible assets 2,775 – 7,766 –

58,209 47,278 166,885 135,159

- 36 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

5. Financial expense

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited)

(unaudited) (unaudited)

(unaudited)

Interest on long-term debt 17,455 17,944 50,534 60,523

Amortization of deferred financing costs 408 532 1,222 1,713

Other (491) 2,797 (513) 3,809

17,372 21,273 51,243 66,045

6. Income Taxes

Three months ended May31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited)

(unaudited) (unaudited)

(unaudited)

Current 5,985 1,081 17,244 5,265

Future 4,782 7,861 (12,480) 13,535

10,767 8,942 4,764 18,800

The following table provides the reconciliation between Canadian statutory federal and provincial income taxes and

the consolidated income tax expense:

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited)

(unaudited) (unaudited)

(unaudited)

Income before income taxes 41,909 29,323 106,180 67,123

Combined income tax rate 33.51 % 34.96 % 33.51 % 34.96 %

Income taxes at combined income tax rate 14,044 10,251 35,581 23,466

Loss or income subject to lower or higher tax rates (1,006) (707) (1,688) (473)

Decrease in future income taxes as a result of decreases

in substantively enacted tax rates

–

(24,002)

–

Income taxes arising from non-deductible expenses 292 193 585 523

Effect of foreign income tax rate differences (2,821) (788) (6,198) (3,037)

Benefit related to prior years’ minimum income taxes paid – – – (1,475)

Other 258 (7) 486 (204)

Income taxes at effective income tax rate 10,767 8,942 4,764 18,800

- 37 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

7. Earnings per Share

The following table provides the recon ciliation between basic and diluted earnings per share:

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Net income 31,142 20,381 101,416 48,323

Weighted average number of multiple voting and subordinate

voting shares outstanding

48,502,621

45,254,307

48,460,946

42,290,852

Effect of dilutive stock options

(1)

247,271 405,175 294,950 323,832

Weighted average number of diluted multiple voting and

subordinate voting shares outstanding

48,749,892

45,659,482

48,755,896

42,614,684

Earnings per share

Basic 0.64 0.45 2.09 1.14

Diluted 0.64 0.45 2.08 1.13

(1)

For t he three and nine-mo nth p eriod s end ed May 31, 2008, 114, 87 9 and 103, 963 s tock opti ons (7 13 an d 47,8 45 in 2007) w ere exc luded from the calculati on

of diluted earnings per share since the exercise price of the options was greater than the average share price of the subordinate voting shares.

8. Goodwill and Other Intangible Assets

May 31, 2008 August 31, 2007

$ $

(unaudited) (audited)

Customer relationships 67,735 68,858

Customer base

989,552 989,552

1,057,287 1,058,410

Goodwill

367,772 342,584

1,425,059 1,400,994

- 38 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

8. Goodwill and Other Intangible Assets (continued)

a) Intangible assets

During the first nine months, intangible assets variations were as follows:

Customer

relationships

Customer

base

Total

$ $ $

(unaudited) (unaudited) (unaudited)

Balance as at August 31, 2007 68,858 989,552 1,058,410

Business acquisition (note 2) 1,890 – 1,890

Amortization (7,766) – (7,766)

Foreign currency translation adjustment 4,753 – 4,753

Balance as at May 31, 2008 67,735 989,552 1,057,287

b) Goodwill

During the first nine months, goodwill variation was as follows:

(unaudited)

Balance as at August 31, 2007 342,584

Foreign currency translation adjustment

25,188

Balance as at May 31, 2008 367,772

- 39 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

9. Long-Term Debt

Maturity Interest rate May 31, 2008 Augus t 31, 20 07

% $

(unaudited)

(audited)

Parent company

Term Facility

Term loan – €104,551,500 2011 5.56

(1)

160,631

150,450

Term loan – €17,358,700 2011 5.06

(1)

26,638

24,979

Revolving loan – €115,500,000 (€196,725,000 as at August 31, 2007) 2011 5.19

(1)

178,424

283,087

Senior Secured Debentures Series 1 2009 6.75 149,753

150,000

Senior – Secured Notes

Series A – US$150 million 2008 6.83

(2)

148,782

158,430

Series B 2011 7.73 174,291

175,000

Senior Unsecured Debenture

(3)

2018 5.94 99,759

–

Deferred credit

(4)

2008 – –

80,220

Subsidiaries

Obligations under capital leases 2012 6.42 – 8.30 6,205

5,760

944,483

1,027,926

Less current portion 166,252

17,292

778,231

1,010,634

(1)

Average interest rate on debt as at May 31, 2008, including stamping fees.

(2)

Cross-currency swap agreements have resulted in an effective interest rate of 7.254% on the Canadian dollar equivalent of the U.S. denominated debt.

(3)

On January 8, 2008, the Corporation and the Solidarity Fund QFL entered into an agreement to issue a $100 million senior unsecured debenture by way of

a private placem ent, subject to usua l market conditions . The debenture is redee mable at the Corporat ion’s option at any ti me, in whole or in part, prior t o

maturity, at 100% of the principal amount plus a make-whole premium.

(4)

The def erred credit represents the amount tha t was deferred for hedge accounting pur poses as at August 31, 2007 under cros s-currency swaps entered

into by the Corpor ation to hedge Senior Secured Notes Series A deno minated in U.S. dollars . In accordance with the stan dards on financ ial instruments,

the Corporation’s cross-currency swaps are now presented as derivative financial instrument liabilities (see note 1).

- 40 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

10. Capital Stock

Authorized, an unlimited number

Class A Preference shares, without voting rights, redeemable by the Corporation and retractable at the option of the

holder at any time at a price of $1 per share, carrying a cumulative preferential cash dividend at a rate of 11% of the

redemption price per year.

Class B Preference shares, without voting rights, could be issued in series.

Multiple voting shares, 10 votes per share.

Subordinate voting shares, 1 vote per share.

May 31, 2008 August 31, 2007

$ $

(unaudited) (audited)

Issued

15,691,100 multiple voting shares 98,346 98,346

32,813,371 subordinate voting shares (32,663,587 as at August 31, 2007) 890,228 886,059

988,574 984,405

During the period, subordinate voting share transactions were as follows:

Nine months ended Twelve months ended

May 31, 2008 August 31, 20 07

Number of shares Amount Number of shares Amount

$ $

(unaudited) (unaudited) (audited) (audited)

Balance at beginning 32,663,587 886,059 24,308,112 532,112

Shares issued for cash consideration – – 8,000,000 345,950

Shares issued for cash under the Employee Stock Purchase Plan and

the Stock Option Plan

149,784

3,354

355,475

7,014

Compensation expense previously recorded in contributed surplus for

options exercised

–

815

–

983

Balance at end 32,813,371 890,228 32,663,587 886,059

- 41 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

10. Capital Stock (continued)

Stock-based plans

The Corporation offers, for the benefit of its employees and those of its subsidiaries, an Employee Stock Purchase

Plan and a Stock Option Plan for certain executives, which are described in the Corporation’s annual consolidated

financial statements. During the first nine months, the Corporation granted 113,084 stock options (201,587 in 2007)

with an exercise price of $41.45 to $49.82 ($26.63 to $44.54 in 2007) of which 22,683 stock options (57,247 in 2007)

were granted to COGECO Inc.’s employees. In 2007, the Corporation also granted 376,000 conditional stock options

with an exercise price of $26.63, of which 262,400 stock options were granted to COGECO Inc.’s employees. These

conditional options vest over a period of three years beginning one year after the day such options are granted and

are exercisable over ten years. The vesting of these options is conditional to the achievement of certain yearly

financial objectives by the Portuguese subsidiary, Cabovisão — Televisão por Cabo, S.A., over a period of three

years. During the three and nine-month periods ended May 31, 2008, the Corporation charged an amount of $99,000

and $280,000 with regards to the Corporation’s options granted to Cogeco Inc.’s employees. The Corporation records

compensation expense for options granted on or after September 1, 2003. As a result, a compensation expense of

$496,000 and $1,222,000 ($538,000 and $1,439,000 in 2007) was recorded for the three and nine-month periods

ended May 31, 2008.

The fair value of stock options granted for the nine-month period ended May 31, 2008 was $12.59 ($7.39 in 2007) per

option. The fair value of each option granted was estimated at the grant date for purposes of determining the stock-

based compensation expense using the binomial option pricing model based on the following assumptions:

2008 2007

% %

(unaudited) (audited)

Expected dividend yield

0.90 1.27

Expected volatility

27 32

Risk-free interest rate

4.25 4.05

Expected life in years

4.0 4.0

As at May 31, 2008, the Corporation had outstanding stock options providing for the subscription of 862,237

subordinate voting shares. These stock options, which include 250,667 conditional stock options, can be exercised at

various prices ranging from $7.05 to $4 9.82 and at various dates up to May 17, 2018.

The Corporation also had a Performance Unit Plan for key employees, which was terminated in June 2007. A

compensation expense of $265,000 and $597,000 was recorded for the three and nine-month periods ended May 31,

2007 related to this plan.

In April 2007, the Corporation established a deferred share unit plan (“DSU Plan”) which is described in the

Corporation’s annual consolidated financial statements. During the first nine months, the Corporation awarded 3,559

deferred share units to the participants in connection with the DSU Plan. A compensation expense of $144,000 was

recorded for the three and nine month p eriods ended May 31, 2008 related to this plan.

- 42 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

11. Accumulated Other Com prehensive Income (Loss)

Translation of net

investments in self-

sustaining foreign

subsidiaries

Cash flow hedges

Total

$ $ $

(unaudited) (unaudited) (unaudited)

Balance as at August 31, 2007 (3,110) – (3,110)

Cumulative effect of changes in accounting policy (note 1) – (2,231) (2,231)

Other comprehensive income 16,150 1,136 17,286

Balance as at May 31, 2008 13,040 (1,095) 11,945

12. Statements of Cash Flow

a) Changes in non-cash operating items

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Accounts receivable (174) 4,665 (4,594) (4,374)

Income taxes receivable 32 1,679 4 (2,586)

Prepaid expenses 1,209 (993) 1,778 (586)

Accounts payable and ac c rued lia bilities 10,133 (28,876) (22,366) (97,382)

Income tax liabilities 5,511 2 14,352 349

Deferred and prepaid income 259 494 (894) 3,034

16,970 (23,029) (11,720) (101,545)

b) Other information

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Fixed asset acquisitions through capital leases 971 561 2,417 2,793

Financial expense paid 20,215 25,098 52,099 69,082

Income taxes paid (received) 524 (681) 2,997 6,983

- 43 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

13. Employee Future Benefits

The Corporation and its Canadian subsidiaries offer their employees contributory defined benefit pension plans, a

defined contribution pension plan or a collective registered retirement savings plan, which are described in the

Corporation’s annual consolidated financial statements. The total expenses rel ated to these plans are as follows:

Three months ended May 31, Nine months ended May 31,

2008 2007 2008 2007

$ $ $ $

(unaudited) (unaudited) (unaudited) (unaudited)

Contributory defined benefit pension plans 283 230 847 690

Defined contribution pension plan and collective registered

retirement savings plan

767

678

2,206

1,703

1,050 908 3,053 2,393

14. Contingent liability

The Canadian Radio-television and Telecommunications Commission (“CRTC”) collects two different types of fees

from broadcast licensees. These are known as Part I and Part II fees. In 2003 and 2004, lawsuits were commenced in

the Federal Court, alleging that the Part II licence fees are taxes rather than fees and that the regulations authorizing

them are unlawful. On December 14, 2006, the Federal Court ruled that the CRTC did not have the jurisdiction to

charge Part II fees. The Court ruled that licensees were not entitled to a refund of past fees paid. Both the Crown and

the applicants have appealed this case to the Federal Court of Appeal. The applicants are seeking an order requiring

a refund of past fees paid. The Crown is seeking to reverse the finding that Part II fees are unlawful. On October 1

2007, the CRTC sent a letter to all broadcast licensees, including Cogeco Cable Inc. The letter stated that the CRTC

will not collect Part II license fees due on November 30, 2007, and subsequent years, unless the Federal Court of

appeal or the Supreme Court of Canada (should the case be appealed to that level) reverses the Federal Court’s

decision. The Appeal hearing was held on December 4

and 5

, 2007 in Ottawa and a decision was rendered on

April 28, 2008 in favour of the Crown, to the effect that the fees are valid regulatory charges. On June 26 and 27,

2008, the Plaintiffs filed applications for leave to appeal to the Supreme Court of Canada. The Defendant must

respond to these applications within 60 days. The Corporation have accrued the full amount with respect to these fees

for fiscal year 2007 and the first nine months of fiscal 2008.

- 44 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

May 31, 2008

(unaudited)

(amounts in tables are in thousands of dollars, except number of shares and per share data)

15. Subsequent events

Acquisition of FibreWired Burlington Hydro Communications

On May 1, 2008, the Corporation announced the acquisition of all the assets of FibreWired Burlington Hydro

Communications, Burlington Hydro Electric's telecommunications division (City of Burlington’s energy company) for a

total purchase price of $12.5 million. FibreWired Burlington Hydro Communications operates a broadband network

equipped with next generation ATM and Ethernet technology. This enables FibreWired Burlington Hydro

Communications to provide organizations in Burlington with the broadband capacity required for data networking,

high-speed Internet access, e-business applications, video conferencing and other advanced communications. The

Corporation, which also offers broadband services to organizations in Burlington, will use this network to expand its

service offering in the area. FibreWired Burlington Hydro Communications customers will also benefit from the

Corporation’s suite of business products and gain access to the Corporation’s extensive fibre network spanning

Ontario and Quebec. The acquisition was completed on June 30, 2008.

Acquisition of Toronto Hydro Telecom Inc.

On June 13, 2008 the Corporation announced the acquisition of all of the shares of Toronto Hydro Telecom Inc.

(“THTI”), the telecommunications subsidiary of Toronto Hydro Corporation (City of Toronto’s energy company) for a

total purchase price of $200 million, subject to certain conditions, including regulatory approval by the Commissioner

of Competition. In addition, the Corporation will assume a working capital deficiency and liabilities of approximately

$4 million.

THTI offers data communications and other telecommunications services such as Ethernet, private line,

Voice-over-Internet protocol (“VoIP”), high-speed Internet access, dark fibre, data storage, data security and co-

location to a wide range of business customers and organizations throughout the Greater Toronto Area (“GTA”). This

agreement will allow the Corporation to further the development of its business telecommunications activities.

16. Comparative figures

Certain comparative figures have been reclassified to conform to the current year’s presentation.

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Press release details

ORGANIC GROWTH AND ACQUISITIONS ARE KEY FOR COGECO CABLE IN FISCAL 2008 THIRD-QUARTER

SUSTAINABILITY

Cogeco Fund

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