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Cogeco Cable Announces Strong Financial Results for the First Quarter of Fiscal 2013

- 11.6% growth of its operating income before depreciation and amortization(1)

MONTREAL, QUEBEC -- (Marketwire) -- 01/15/13 -- Today, Cogeco Cable Inc. (TSX:CCA) ("Cogeco Cable" or the "Corporation") announced its financial results for the first quarter of fiscal 2013, ended November 30, 2012, in accordance with International Financial Reporting Standards ("IFRS").

For the first quarter of fiscal 2013:


--  Revenue increased by 4% to reach $327.9 million; 
    
--  Operating income before depreciation and amortization increased by 11.6%
    to $147.1 million when compared to the first quarter of fiscal 2012; 
    
--  Operating margin(1) increased to 44.9% from 41.8% in the quarter when
    compared to the same period of the prior year; 
    
--  Profit for the period from continuing operations amounted to $42.2
    million in the first quarter when compared to $39.6 million for the same
    period of the previous fiscal year. Profit progression for the quarter
    is mostly attributable to the increase in operating income before
    depreciation and amortization, partly offset by the acquisition costs
    related to the Atlantic Broadband ("ABB") acquisition and the increase
    in income taxes; 
    
--  Profit for the period amounted to $42.2 million in the first quarter
    when compared to $43 million for the same period of the previous fiscal
    year. This variation is mostly attributable to the increase in income
    taxes, acquisition costs related to the ABB acquisition and last year's
    profit from the disposition of the Portuguese subsidiary, Cabovisao -
    Televisao por Cabo, S.A. ("Cabovisao"), reported as discontinued
    operations and disposed of on February 29, 2012, partly offset by the
    improvement in operating income before depreciation and amortization; 
    
--  Free cash flow(1) reached $17 million for the quarter compared to $19.8
    million in the comparable quarter of the prior year. Free cash flow
    decreased in the first quarter over the prior year due to the increase
    in current income tax expense, the acquisition costs related to ABB
    acquisition as well as the increase in acquisition of property, plant
    and equipment, partly offset by the improvement of operating income
    before depreciation and amortization; 
    
--  A quarterly dividend of $0.26 per share was paid to the holders of
    subordinate and multiple voting shares, an increase of $0.01 per share,
    or 4%, when compared to a dividend of $0.25 per share paid in the first
    quarter of fiscal 2012; 
    
--  Fiscal 2013 first-quarter primary service units ("PSU")(2) grew by
    15,080 in Canada in the Cable services segment. At November 30, 2012,
    the total consolidated PSU amounted to 2,478,887 of which 494,674 comes
    from the conclusion of the acquisition of ABB on November 30th; 
    
--  On December 21, 2012, Cogeco Cable announced an agreement to acquire all
    of the issued and outstanding shares of PEER 1 Network Enterprises Inc.
    ("PEER 1") by way of takeover bid (the "offer") valued at approximately
    $635 million. The offer is supported by a committed financing from the
    National Bank of Canada in the amount of $650 million. PEER 1 is one of
    the world's leading internet infrastructure providers, specializing in
    managed hosting, dedicated servers, cloud services and co-location. This
    acquisition combined with Cogeco Cable's existing data centre facilities
    will increase the scale and scope by adding the capability to serve
    approximately 10,000 additional businesses worldwide through 19 data
    centres and 21 points-of-presence across North America and Europe. PEER
    1's primary network centre and head office are located in Vancouver. The
    offer will be subject to usual closing conditions and the Corporation
    expects the transaction to be completed in the second quarter of fiscal
    2013; 
    
--  On November 30, 2012, the Corporation completed the acquisition of ABB,
    an independent cable system operator formed in 2003, serving about
    495,000 PSU's and providing Analogue and Digital Television, as well as
    HSI and Telephony services. The transaction, valued at US$1.36 billion,
    was financed through a combination of cash on hand, a draw-down on the
    existing Term Revolving Facility of approximately US$588 million and
    US$660 million of borrowings under a new committed non-recourse debt
    financing at ABB. Ranked the 12th-largest cable television system
    operator in the United States, ABB operates cable systems in Western
    Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina. 
    

(1)  The indicated terms do not have standard definitions prescribed by IFRS
     and therefore, may not be comparable to similar measures presented by  
     other companies. For more details, please consult the "Non-IFRS        
     financial measures" section of the Management's discussion and         
     analysis.                                                              
(2)  Represents the sum of Television, High Speed Internet ("HSI") and      
     Telephony service customers.                                           

"Today, the residential telecommunications market is maturing and more competitive than ever. I am very pleased with our overall positive results, clearly demonstrating that the combination of our customer service efforts, our marketing strategies, along with our strong cost control initiatives have produced the expected positive effects on our financial results," declared Louis Audet, President and Chief Executive Officer of Cogeco Cable.

"Cogeco Data Services' ("CDS") results are very encouraging and confirm the growth potential of the investments that we have made in this promising sector."

Louis Audet added: "As for our entry into the American market, it is with great enthusiasm that we concluded the acquisition of ABB on November 30, 2012. ABB and our residential / small and medium business sector of Cogeco Cable have much in common, including the expertise of both our management teams; we foresee good prospects for the future. ABB's first quarterly financial results will be reported next quarter."

FINANCIAL HIGHLIGHTS


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                Quarters ended November 30, 
(in thousands of dollars, except PSU                                        
 growth, percentages and per                                                
share data)                                    2012        2011      Change 
                                                  $           $           % 
----------------------------------------------------------------------------
Operations                                                                  
Revenue                                     327,911     315,424         4.0 
Operating income before depreciation and                                    
 amortization(1)                            147,126     131,823        11.6 
Operating margin(1)                            44.9%       41.8%          - 
Operating income                             75,160      66,999        12.2 
Profit for the period from continuing                                       
 operations                                  42,160      39,567         6.6 
Profit for the period from discontinued                                     
 operations                                       -       3,399           - 
Profit for the period                        42,160      42,966        (1.9)
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Cash Flow                                                                   
Cash flow from operating activities            (280)     13,807           - 
Cash flow from operations(1)                 99,845      97,043         2.9 
Acquisitions of property, plant and                                         
 equipment, intangible and other assets      82,833      77,283         7.2 
Free cash flow(1)                            17,012      19,760       (13.9)
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Financial Condition(2)                                                      
Property, plant and equipment             1,544,806   1,322,093        16.8 
Total assets                              4,331,597   2,908,079        49.0 
Indebtedness(3)                           2,333,766   1,069,112           - 
Shareholders' equity                      1,215,831   1,188,431         2.3 
----------------------------------------------------------------------------
Primary service units ("PSU") growth(4)      15,080      46,179       (67.3)
----------------------------------------------------------------------------
Per Share Data(5)                                                           
Earnings per share                                                          
  From continuing and discontinued                                          
   operations                                                               
    Basic                                      0.87        0.88        (1.1)
    Diluted                                    0.86        0.88        (2.3)
  From continuing operations                                                
    Basic                                      0.87        0.81         7.4 
    Diluted                                    0.86        0.81         6.2 
  From discontinued operations                                              
    Basic                                         -        0.07           - 
    Diluted                                       -        0.07           - 
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(1)  The indicated terms do not have standardized definitions prescribed by 
     International Financial Reporting Standards ("IFRS") and therefore, may
     not be comparable to similar measures presented by other companies. For
     more details, please consult the "Non-IFRS financial measures" section 
     of the Management's discussion and analysis ("MD&A").                  
(2)  At November 30, 2012 and August 31, 2012.                              
(3)  Indebtedness is defined as the total of bank indebtedness, principal on
     long-term debt, balance due on a business acquisition and obligations  
     under derivative financial instruments.                                
(4)  Represents the sum of Television, High Speed Internet ("HSI") and      
     Telephony service customers.                                           
(5)  Per multiple and subordinate voting share.                             

FORWARD-LOOKING STATEMENTS

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

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

CORPORATE OBJECTIVES AND STRATEGIES

Cogeco Cable Inc.'s ("Cogeco Cable" or the "Corporation") objectives are to provide outstanding service to its customers, improve profitability and create shareholder value. To achieve these objectives, the Corporation has developed strategies that focus on expanding its service offering, enhancing its existing services and bundles, The Corporation measures its performance, with regard to these objectives by monitoring operating income before depreciation and amortization(1), operating margin(1), PSU(2) growth and free cash flow(1).

KEY PERFORMANCE INDICATORS

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND OPERATING MARGIN

First-quarter operating income before depreciation and amortization increased by 11.6% when compared to the same period of fiscal 2012 to reach $147.1 million and operating margin increased to 44.9% from 41.8%. As a result of the acquisition of Atlantic Broadband ("ABB"), management revised upwards its November 1, 2012 projections for fiscal 2013. Operating income before depreciation and amortization is now expected to reach $735 million from $614 million and operating margin should increase to 46.2% from 45.5%. For further details, please consult the fiscal 2013 revised projections in the "Fiscal 2013 financial guidelines" section.

FREE CASH FLOW

For the three-month period ended November 30, 2012, Cogeco Cable reports free cash flow of $17 million, compared to $19.8 million for the first three months of the previous fiscal year, representing a decrease of $2.7 million. This variance is mostly attributable to the increase in current income tax expense, the acquisition costs related to Atlantic Broadband ("ABB") acquisition as well as the increase in acquisition of property, plant and equipment, partly offset by the improvement of operating income before depreciation and amortization. Giving effect to the acquisition of ABB, the revised guidelines of operating income before depreciation and amortization and the reduction in acquisition of property, plant and equipment in Canada, management also revised its free cash flow projections from $105 million to $170 million. For further details, please consult the fiscal 2013 revised projections in the "Fiscal 2013 financial guidelines" section.

PSU GROWTH AND PENETRATION OF SERVICE OFFERINGS

During the three-month period ended November 30, 2012, PSU reach 2,478,887 of which 494,674 comes from the recently completed acquisition of ABB. In the Cable Services segment in Canada, PSU increased at a lower pace to 15,080, mainly as a result of a more competitive environment and tightening of customer credit controls, thus containing collection and bad debt expenses. Cogeco Cable maintains targeted marketing initiatives to increase the penetration level of its services and still benefits from the continuing interest for high definition ("HD") television service. Consequently, and combined with the acquisition of ABB, Cogeco Cable revised downwards its guidelines from 50,000 PSU, as issued on November 1, 2012, to 35,000 PSU. PSU growth is expected to stem primarily from HSI and Telephony services, the continued strong interest in Digital Television services, enhanced service offerings, and through promotional activities. For further details, please consult the fiscal 2013 revised projections in the "Fiscal 2013 financial guidelines" section.

BUSINESS DEVELOPMENTS

On December 21, 2012, Cogeco Cable announced an agreement to acquire all of the issued and outstanding shares of PEER 1 Network Enterprises Inc. ("PEER 1") by way of takeover bid (the "offer") valued at approximately $635 million. The offer is supported by a committed financing from the National Bank of Canada in the amount of $650 million. PEER 1 is one of the world's leading internet infrastructure providers, specializing in managed hosting, dedicated servers, cloud services and co-location. This acquisition combined with Cogeco Cable's existing data centre facilities will increase the scale and scope by adding the capability to serve approximately 10,000 additional businesses worldwide through 19 data centres and 21 points-of-presence across North America and Europe. PEER 1's primary network centre and head office are located in Vancouver. The offer will be subject to usual closing conditions and the Corporation expects the transaction to be completed in the second quarter of fiscal 2013.

On November 30, 2012, the Corporation completed the acquisition of ABB, an independent cable system operator formed in 2003, serving about 495,000 PSU's and providing Analogue and Digital Television, as well as HSI and Telephony services. The acquisition is an attractive entry point into the US market, providing a significant increase in PSU base with further growth potential, a high quality network infrastructure and the ability for the Corporation's management to leverage its core knowledge and operational experience. The transaction, valued at US$1.36 billion, was financed through a combination of cash on hand, a draw-down on the existing Term Revolving Facility of approximately US$588 million and US$660 million of borrowings under a new committed non-recourse debt financing at ABB. Ranked the 12th-largest cable television system operator in the United States ("USA"), ABB operates cable systems in Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina.


(1)  The indicated terms do not have standardized definitions prescribed by 
     IFRS and therefore, may not be comparable to similar measures presented
     by other companies. For more details, please consult the "Non-IFRS     
     financial measures" section.                                           
(2)  Represents the sum of Television, High Speed Internet ("HSI") and      
     Telephony service customers.                                           

OPERATING AND FINANCIAL RESULTS

OPERATING RESULTS


----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quarters ended November 30,                    2012        2011      Change 
(in thousands of dollars, except                                            
 percentages)                                     $           $           % 
----------------------------------------------------------------------------
Revenue                                     327,911     315,424         4.0 
Operating expenses                          174,204     176,459        (1.3)
Management fees - COGECO Inc.                 6,581       7,142        (7.9)
----------------------------------------------------------------            
Operating income before depreciation and                                    
 amortization                               147,126     131,823        11.6 
----------------------------------------------------------------            
Operating margin                               44.9%       41.8%            
----------------------------------------------------------------------------
----------------------------------------------------------------------------

REVENUE

Fiscal 2013 first-quarter revenue increased by $12.5 million, or 4%, to reach $327.9 million, when compared to the same period last year, primarily by rate increases implemented in June and July 2012 and PSU growth. For further details on the Corporation's revenue, please refer to the "Cable services" and "Enterprise services" sections.

OPERATING EXPENSES AND MANAGEMENT FEES

For the first quarter of fiscal 2013, operating expenses decreased by $2.3 million, to reach $174.2 million, a decrease of 1.3% compared to the prior year. The decrease in operating expenses is mainly attributable to deployment and support costs incurred in fiscal 2012 related to the migration of Television service customers from analogue to digital, partly offset by PSU growth. For further details on the Corporation's operating expenses, please refer to the "Cable services" and "Enterprise services" sections.

Management fees paid to COGECO Inc. amounted to $6.6 million, 7.9% lower when compared to $7.1 million in fiscal 2012. Management fees have decreased due to the sale of the Portuguese subsidiary, Cabovisao - Televisao por Cabo, S.A. ("Cabovisao"), on February 29, 2012. For further details on the Corporation's management fees, please refer to the "Related party transactions" section.

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND OPERATING MARGIN

Fiscal 2013 first-quarter operating income before depreciation and amortization increased by $15.3 million, or 11.6%, to reach $147.1 million as a result of revenue growth and lower operating expenses. Cogeco Cable's first-quarter operating margin increased to 44.9% from 41.8% in the comparable period of the prior year. For further details on the Corporation's operating income before depreciation and amortization and operating margin, please refer to the "Cable services" and "Enterprise services" sections.

FIXED CHARGES


----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quarters ended November 30                      2012        2011     Change 
(in thousands of dollars, except                                            
 percentages)                                      $           $          % 
----------------------------------------------------------------------------
Depreciation and amortization                 64,666      64,824       (0.2)
Financial expense                             15,600      16,829       (7.3)
----------------------------------------------------------------------------
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For the first quarter of fiscal 2013, depreciation and amortization expense was essentially the same at $64.7 million when compared to $64.8 million for the same period of the prior year resulting, mainly from higher acquisition of property, plant and equipment offset by additional depreciation expense recorded in fiscal 2012 related to the reduction of useful lives for certain home terminal devices.

Fiscal 2013 first-quarter financial expense decreased by $1.2 million, or 7.3%, at $15.6 million, when compared to $16.8 million in the prior year. Financial expense decrease is primarily attributable to the foreign exchange loss of $1.5 million recorded in fiscal 2012.

INCOME TAXES

Fiscal 2013 first-quarter income tax expense amounted to $17.4 million, compared to $10.6 million in the prior year. The increase is mostly attributable to the improvement in operating income before depreciation and amortization and by a reduction in income taxes, in fiscal 2012, from the implementation of certain tax measures of the 2011 federal budget limiting the tax deferrals for corporations with a significant interest in a partnership.

PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS

For the three-month period ended November 30, 2012, profit for the period from continuing operations amounted to $42.2 million, or $0.87 per share compared to $39.6 million, or $0.81 per share for the comparable period of fiscal 2012. The variance for the quarter is mostly attributable to the increase in operating income before depreciation and amortization, partly offset by the acquisition costs related to ABB acquisition and the increase in income taxes explained above.

PROFIT FOR THE PERIOD

For the period ended November 30, 2012, profit for the period amounted to $42.2 million, or $0.87 per share, compared to $43 million, or $0.88 per share, in fiscal 2012. This variation is mostly attributable to the acquisition costs related to ABB acquisition, the increase in income taxes explained above and the profit from the Portuguese subsidiary reported as discontinued operations in fiscal 2012, partly offset by the improvement in operating income before depreciation and amortization.

FINANCING ACTIVITIES

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

In connection with the acquisition of ABB on November 30, 2012, the Corporation concluded, through two of its US subsidiaries, First Lien Credit Facilities totalling US$710 million with a syndicate of banks and other institutional lenders in three tranche and draw down by an amount of US$660 million of which US$641.5 million was used to repay ABB's secured debt and $US18.5 million to pay for some of the transaction costs. The first tranche, a Term Loan A Facility amounting to US$240 million, which will mature on November 30, 2017, the second tranche, a Term Loan B Facility amounting to US$420 million, which will mature on November 30, 2019 and the third tranche, a Revolving Credit Facility of US$50 million unused at November 30, 2012, including a swingline of US$15 million, which will mature on November 30, 2017. Interest rates on the First Lien Credit Facilities are based on LIBOR plus the applicable margin, with a LIBOR floor of 1.00% for the Term Loan B Facility. Starting on December 31, 2013, the Term Loan A Facility is subject to quarterly amortization of 1.25% in the first year, 2.5% in the second year and 3.0% in the third and fourth years. Starting on December 31, 2012, the Term Loan B Facility is subject to quarterly amortization of 0.25% until its maturity date. In addition to the fixed amortization schedule and commencing in the first quarter of fiscal 2015, loans under the Term Loan Facilities shall be prepaid according to a Prepayment Percentage of excess cash flow generated during the prior fiscal year. The First Lien Credit Facilities are non-recourse to the Corporation and its Canadian subsidiaries and are indirectly secured by a first priority fixed and floating charge on substantially all present and future real and personal property and undertaking of every nature and kind of the Corporation's US subsidiaries. The provisions under these facilities provide for restrictions on the operations and activities of the Corporation's US subsidiaries. Generally, the most significant restrictions relate to permitted indebtedness and investments, distributions and maintenance of certain financial ratios.

DIVIDEND DECLARATION

At its January 14, 2013 meeting, the Board of Directors of Cogeco Cable declared a quarterly eligible dividend of $0.26 per share for multiple voting and subordinate voting shares, payable on February 11, 2013, to shareholders of record on January 28, 2013. The declaration, amount and date of any future dividend will continue to be considered and approved by the Board of Directors of the Corporation based upon the Corporation's financial condition, results of operations, capital requirements and such other factors as the Board of Directors, at its sole discretion, deems relevant. There is therefore no assurance that dividends will be declared, and if declared, the amount and frequency may vary.

SEGMENTED OPERATING RESULTS

The Corporation reports its operating results in two operating segments: Cable services and Enterprise services. The reporting structure reflects how the Corporation manages the business activities to make decisions about resources to be allocated to the segment and to assess its performance.

CABLE SERVICES

CUSTOMER STATISTICS


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                                                        CANADA              
                                                    ----------              
                                                                        % of
                                                 Net additions   penetration
                                                      (losses)           (1)
                                                Quarters ended      November
          Consolidated       USA    CANADA        November 30,           30,
                        November                                            
                        30, 2012               2012       2011  2012    2011
----------------------------------------------------------------------------
PSU          2,478,887   494,674 1,984,213   15,080     46,179              
Television                                                                  
 service                                                                    
 customers   1,105,443   244,404   861,039   (2,076)     4,452  52.1    54.2
HSI                                                                         
 service                                                                    
 customers     817,019   171,640   645,379   10,845     17,285  39.0    38.0
Telephony                                                                   
 service                                                                    
 customers     556,425    78,630   477,795    6,311     24,442  28.9    27.2
----------------------------------------------------------------------------
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(1)  As a percentage of homes passed.                                       

Canada

Fiscal 2013 first-quarter PSU net additions were lower than in the comparable period of the prior year mainly as a result of service category maturity, competitive offers and tightening of our customer credit controls and processes. The net customer losses for Television service customers stood at 2,076 compared to 4,452 net additions for the same period of the prior year. Television service customer net losses are mainly due to the promotional offers of competitors for the video service combined with the tightening of our customer credit controls. Fiscal 2013 first-quarter HSI service customers grew by 10,845 compared to 17,285 in the first quarter of the prior year, and the number of net additions to the Telephony service stood at 6,311 customers compared to 24,442 customers for the same period of the prior year. HSI and Telephony net additions continue to stem from the enhancement of the product offering, the impact of the bundled offer (Cogeco Complete Connection) of Television, HSI and Telephony services, and promotional activities.

OPERATING RESULTS


----------------------------------------------------------------------------
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Quarters ended November 30,                    2012        2011      Change 
(in thousands of dollars, except                                            
 percentages)                                     $           $           % 
----------------------------------------------------------------------------
Revenue                                     304,815     293,679         3.8 
Operating expenses                          156,210     159,883        (2.3)
----------------------------------------------------------------            
Operating income before depreciation and                                    
 amortization                               148,605     133,796        11.1 
----------------------------------------------------------------            
Operating margin                               48.8%       45.6%            
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Revenue

Fiscal 2013 first-quarter revenue increased by $11.1 million, or 3.8%, to reach $304.8 million, when compared to the same period last year, primarily due to the PSU growth and rate increases implemented in June and July 2012.

Operating expenses

For the period ended November 30, 2012, operating expenses decreased by $3.7 million, or 2.3%, at $156.2 million. This decrease is mainly attributable to the deployment and support costs incurred in fiscal 2012 related to the migration of Television service customers from analogue to digital, partly offset by PSU growth.

Operating income before depreciation and amortization and operating margin

As a result of revenue growth exceeding the operating expenses, fiscal 2013 first-quarter operating income before depreciation and amortization amounted to $148.6 million, or 11.1% higher than in the same period of the prior year. Operating margin increased to 48.8% from 45.6% when compared to fiscal 2012 first-quarter.

ENTERPRISE SERVICES

OPERATING RESULTS


----------------------------------------------------------------------------
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Quarters ended November 30,                    2012        2011       Change
(in thousands of dollars, except                                            
 percentages)                                     $           $            %
----------------------------------------------------------------------------
Revenue                                      23,500      21,745          8.1
Operating expenses                           13,682      13,180          3.8
----------------------------------------------------------------            
Operating income before depreciation and                                    
 amortization                                 9,818       8,565         14.6
----------------------------------------------------------------            
Operating margin                               41.8%       39.4%            
----------------------------------------------------------------------------
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Revenue

Fiscal 2013 first-quarter revenue increased by $1.8 million, or 8.1%, to reach $23.5 million, when compared to the same period last year, primarily due the organic growth from data centre, managed IT and connectivity services.

Operating expenses

For the first quarter of fiscal 2013, operating expenses increased by $0.5 million, or 3.8%, to $13.7 million. The increase in operating expenses is mainly attributable to servicing new customers.

Operating income before depreciation and amortization and operating margin

As a result of revenue growth exceeding the increase in operating expenses, fiscal 2013 first-quarter operating income before depreciation and amortization amounted to $9.8 million, or 14.6%, higher than the same period of the prior year. Operating margin increased to 41.8% from 39.4% when compared to fiscal 2012 first-quarter.

FISCAL 2013 FINANCIAL GUIDELINES

Giving effect to the recent acquisition of ABB on November 30, 2012, the Corporation revised its financial guidelines for the 2013 fiscal year issued on November 1, 2012 to include a nine-month period of ABB's financial projections. Projections for the Enterprise services were maintained as initially projected. In the Cable services segment in Canada, guidelines remained essentially the same, except for revenue and acquisitions of property, plant and equipment which should be lower than originally expected due to lower PSU growth as a result of current uncertain economic environment, the service category maturity and competitive offers. Nonetheless, management expects revenue to reach $1.590 billion, representing a growth of $240 million, or 17.8%, when compared to those issued on November 1, 2012. PSU progression should reduce from 50,000 to 35,000, including ABB nine-month operations. Operating income before depreciation and amortization should increase by $121 million to reach $735 million reflecting the ABB acquisition and the cost reduction initiatives implemented in Canada during the current fiscal year and, consequently operating margin should increase from 45.5% to 46.2%. Depreciation and amortization of property, plant and equipment and intangible assets should increase from $290 million to $330 million and acquisition of property, plant and equipment, intangible and other assets should increase by $20 million to take into consideration the ABB nine-month operations, partly offset by the reduction in the Cable services segment in Canada. Financial expense should amount to $96 million, an increase of $32 million, as a result of the cost of financing of ABB acquisition. Fiscal 2013 free cash flow is expected to amount to $170 million, an increase of $65 million, or 61.9%, when compared to the free cash flow projection issued on November 1, 2012, stemming primarily from the nine-month operations of ABB combined with the reduction in acquisitions of property, plant and equipment, intangible and other assets explained above. Profit for the year is expected to amount to $225 million, $35 million higher than the November 1, 2012 projections, mainly as a result of the ABB's expected financial results for the nine-month operations.

Fiscal 2013 revised financial guidelines are as follows:


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                                                  Revised          Original 
                                              projections       projections 
                                         January 14, 2013  November 1, 2012 
                                              Fiscal 2013       Fiscal 2013 
(in millions of dollars, except net                                         
 customer additions and operating                                           
 margin)                                                $                 $ 
----------------------------------------------------------------------------
                                                                            
Financial guidelines                                                        
  Revenue                                           1,590             1,350 
  Operating income before depreciation                                      
   and amortization                                   735               614 
  Operating margin                                   46.2%             45.5%
  Depreciation and amortization                       330               290 
  Financial expense                                    96                64 
  Current income tax expense                           92                95 
  Profit for the year                                 225               190 
  Acquisitions of property, plant and                                       
   equipment, intangible and other                                          
   assets                                             370               350 
  Free cash flow(1)                                   170               105 
Net customer addition guidelines                                            
  PSU growth                                       35,000            50,000 
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----------------------------------------------------------------------------
                                                                            
(1)  Free cash flow is calculated as operating income before depreciation   
     and amortization less integration, restructuring and acquisition costs,
     financial expense, current income tax expense and acquisitions of      
     property, plant and equipment, intangible and other assets.            

NON-IFRS FINANCIAL MEASURES

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

CASH FLOW FROM OPERATIONS AND FREE CASH FLOW

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

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


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                Quarters ended November 30, 
                                                       2012            2011 
(in thousands of dollars)                                 $               $ 
----------------------------------------------------------------------------
Cash flow from operating activities                    (280)         13,807 
Changes in non-cash operating activities             81,113          62,668 
Amortization of deferred transaction costs                                  
 and discounts on long-term debt                        740             675 
Income taxes paid                                    42,533          36,182 
Current income tax expense                          (25,091)        (19,490)
Financial expense paid                               16,430          20,030 
Financial expense                                   (15,600)        (16,829)
----------------------------------------------------------------------------
Cash flow from operations                            99,845          97,043 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Free cash flow is calculated as follows:                                    
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                Quarters ended November 30, 
                                                       2012            2011 
(in thousands of dollars)                                 $               $ 
----------------------------------------------------------------------------
Cash flow from operations                            99,845          97,043 
Acquisition of property, plant and equipment        (78,192)        (73,339)
Acquisition of intangible and other assets           (4,641)         (3,944)
----------------------------------------------------------------------------
Free cash flow                                       17,012          19,760 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION AND OPERATING MARGIN

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

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


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                Quarters ended November 30, 
                                                       2012            2011 
(in thousands of dollars, except                                            
 percentages)                                             $               $ 
----------------------------------------------------------------------------
Operating income                                     75,160          66,999 
Depreciation and amortization                        64,666          64,824 
Integration, restructuring and acquisitions                                 
 costs                                                7,300               - 
----------------------------------------------------------------------------
Operating income before depreciation and                                    
 amortization                                       147,126         131,823 
----------------------------------------------------------------------------
Revenue                                             327,911         315,424 
----------------------------------------------------------------------------
Operating margin                                       44.9%           41.8%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION


----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quarters ended                           November 30,            August 31, 
(in thousands of dollars, except                                            
 percentages and per share data)      2012       2011       2012       2011 
                                         $          $          $          $ 
----------------------------------------------------------------------------
Revenue                            327,911    315,424    324,768    305,811 
Operating income before                                                     
 depreciation and amortization     147,126    131,823    160,825    151,579 
Operating margin                      44.9%      41.8%      49.5%      49.6%
Operating income                    75,160     66,999     94,709     97,941 
Income taxes                        17,400     10,603     32,987     20,713 
Profit for the period from                                                  
 continuing operations              42,160     39,567     45,705     62,745 
Profit (loss) for the period                                                
 from discontinued operations            -      3,399          -      6,219 
Profit (loss) for the period        42,160     42,966     45,705     68,964 
Cash flow from operating                                                    
 activities                           (280)    13,807    203,343    211,847 
Cash flow from operations           99,845     97,043    126,946    144,699 
Acquisitions of property, plant                                             
 and equipment, intangible and                                              
 other assets                       82,833     77,283    124,392    120,663 
Free cash flow                      17,012     19,760      2,554     24,036 
Earnings (loss) per share(1)                                                
  From continuing and                                                       
   discontinued operations                                                  
    Basic                             0.87       0.88       0.94       1.42 
    Diluted                           0.86       0.88       0.93       1.42 
  From continuing operations                                                
    Basic                             0.87       0.81       0.94       1.29 
    Diluted                           0.86       0.81       0.93       1.29 
  From discontinued operations                                              
    Basic                                -       0.07          -       0.13 
    Diluted                              -       0.07          -       0.13 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                        February   February 
Quarters ended                                May 31,        29,        28, 
(in thousands of dollars, except                                            
 percentages and per share data)      2012       2011       2012       2011 
                                         $          $          $          $ 
----------------------------------------------------------------------------
Revenue                            319,771    298,211    317,735    293,457 
Operating income before                                                     
 depreciation and amortization     152,661    138,147    143,743    130,399 
Operating margin                      47.7%      46.3%      45.2%      44.4%
Operating income                    90,981     86,995     59,491     80,426 
Income taxes                        21,449     18,747     13,617     15,007 
Profit for the period from                                                  
 continuing operations              53,159     52,352     31,086     41,319 
Profit (loss) for the period                                                
 from discontinued operations            -   (233,573)    52,047     (9,223)
Profit (loss) for the period        53,159   (181,221)    83,133     32,096 
Cash flow from operating                                                    
 activities                        112,275    142,009    120,961     88,420 
Cash flow from operations          113,075    125,923    104,622    114,682 
Acquisitions of property, plant                                             
 and equipment, intangible and                                              
 other assets                       87,459     62,782     86,234     61,079 
Free cash flow                      25,616     63,141     18,388     53,603 
Earnings (loss) per share(1)                                                
  From continuing and                                                       
   discontinued operations                                                  
    Basic                             1.09      (3.73)      1.71       0.66 
    Diluted                           1.09      (3.73)      1.70       0.66 
  From continuing operations                                                
    Basic                             1.09       1.08       0.64       0.85 
    Diluted                           1.09       1.08       0.63       0.85 
  From discontinued operations                                              
    Basic                                -      (4.80)      1.07      (0.19)
    Diluted                              -      (4.80)      1.06      (0.19)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)  Per multiple and subordinate voting share.                             

ABOUT COGECO CABLE

Cogeco Cable (www.cogeco.ca) is a telecommunications corporation and is the second largest hybrid fibre coaxial cable operator in Ontario and Quebec. Through its two-way broadband cable networks, Cogeco Cable provides its residential customers with Analogue and Digital Television, High Speed Internet ("HSI") and Telephony services. Cogeco Cable is also present in the United States through its subsidiary, Atlantic Broadband, whose head office is located in Quincy, Massachusetts. Atlantic Broadband is ranked the 12th largest cable television system operator in the United States and, serves the following areas: Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina. Cogeco Cable provides as well to its commercial customers, through its subsidiary Cogeco Data Services, data networking, e- business applications, video conferencing, hosting services, Ethernet, private line, VoIP, HSI access, data storage, data security, co-location services, managed IT services, cloud services and other advanced communication solutions. Cogeco Cable's subordinate voting shares are listed on the Toronto Stock Exchange (TSX:CCA).

ADDITIONAL INFORMATION

For additional information relating to the Corporation, including its Annual Information Form, and for a detailed analysis of Cogeco Cable's results for the first quarter of 2013, please refer to the Management Discussion and Analysis and condensed consolidated financial statements of Cogeco Cable, available on the SEDAR website at www.sedar.com.


Analyst Conference    Tuesday, January 15, 2013 at 9:30 a.m. (Eastern       
Call:                 Standard Time) Media representatives may attend as    
                      listeners only.                                       
                                                                            
                      Please use the following dial-in number to have access
                      to the conference call by dialling five minutes before
                      the start of the conference:                          
                                                                            
                      Canada/USA Access Number: 1 800-820-0231              
                      International Access Number: + 1 416-640-5926         
                      Confirmation Code: 4571052                            
                      By Internet at www.cogeco.ca/investors                
                                                                            
                      A rebroadcast of the conference call will be available
                      until January 22, 2013, by dialling:                  
                                                                            
                      Canada and US access number: 1 888-203-1112           
                      International access number: + 1 647-436-0148         
                      Confirmation code: 4571052                            

Contacts:
Source:
Cogeco Cable Inc.
Pierre Gagne
Senior Vice President and Chief Financial Officer
514-764-4700

Information:
Media
Rene Guimond
Vice-President, Public Affairs and Communications
514-764-4700

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