SOLID GROWTH IN CANADIAN OPERATIONS LEAD COGECO CABLE TO STRONG RESULTS DESPITE A NON-CASH IMPAIRMENT IN ITS EUROPEAN OPERATIONS INTANGIBLE ASSETS

PRESS RELEASE

For immediate release

Solid growth in Canadian operations lead Cogeco Cable to strong results despite

a non-cash impairment in its European operations intangible assets

Montréal, April 9, 2009 – Today, Cogeco Cable Inc. (TSX: CCA) (“Cogeco Cable” or the “Corporation”) announced its

financial results for the second quarter and first six m onths of fiscal 2009, ended February 28, 2009.

For the second quarter and first six months of fiscal 2009:

• Consolidated revenue incre ased by 15% to $304.9 million, and by 16.9% to $604.4 million, respectively;

• Consolidated operating income before amortization

(1)

grew by 15.5% to reach $125.5 million, and by 19% to

reach $245.2 million, respectively;

• In the second quarter of fiscal 2009, a non-cash impairment loss of the Corporation’s investment in Cabovisão

was recorded in the amount of $399.6 million as a result of recurring competitive pressure resulting in subscriber

losses that are significantly more important than originally anticipated. Net of related income taxes, the

impairment loss amounted to $383.6 million;

• Consolidated net loss amounted to $358.6 million in the second quarter compared to net income of $49.9 million

for the same period of the prior year, and net loss amounted to $335 million for the first six months compared to

net income of $70.3 million in the prior year. Excluding the impairment loss described above and the income tax

adjustment of $24 million related to the reduction of federal enacted income tax rates in the second quarter of

the prior year

(1)

, consolidated net income would have amounted to $25.1 million and $48.6 million for the quarter

and first six months, respectively, a decrease of $0.8 million, or 3.3% compared to $25.9 million for second

quarter of fiscal 2008, and an increase of $2.3 million, or 5.1%, compared to $46.3 million for the first six months

of the prior year;

• Free cash flow

(1)

reached $31 million for the quarter and $48.8 million for the first six months, increases of

60.4% and 19.2%, respectively, over the same perio ds of the prior year;

• Operating margin

(1)

remained essentially the same for the quarter at 41.1% compared to 41% in the prior year,

and increased to 40.6% from 39.8% for the first six months of the fiscal year;

• Revenue-generating units (“RGU”)

(2)

grew by 25,626 and 78,340 net additions in the quarter and first six

months, for a total of 2,795,214 RGU at February 28, 2009.

“Our performance in the second quarter rests on the solid performance of our Canadian operations as we have

maintained our focus and increased the number of RGU by 47,577 units in the quarter, for total net additions of

113,040 RGU so far this year. Our commercial activities, the results of which are in line with our expectations, continue to

constitute a wonderful growth opportunity for Cogeco Cable as shown by the 10-year, $39 million deal with the Toronto

District School Board announced in December 2008 by Cogeco Data Services. However, in our European operations,

Cabovisão’s competitive position continued to deteriorate in the second quarter due to the unfavourable economic climate

and recurring intense customer promotions and advertising initiatives from competitors in the Portuguese market during

the latter part of the second quarter. In accordance with current accounting standards, management considers that this

situation, as evidenced by the RGU and revenue decline, is more significant and persistent than expected, resulting in a

(1)

The indicated terms do not have standard 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 of the

Management’s discussion and analysis.

(2)

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

- 2 -

decrease in the value of Cogeco Cable’s investment in the Portuguese subsidiary. Consequently, the Corporation

recorded a non-cash impairment loss of $399.6 million on the net value of the assets acquired. Cogeco Cable is in the

process of implementing new marketing and other operating initiatives to improve the results of the European operations”,

declared Louis Audet, Pre s ident and CEO of Cogeco Cable.

FINANCIAL HIGHLIGHTS

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008

(1)

Change 2009 2008

(1)

Change

($000, except percentages and per share data) $ $ % $ $ %

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

Revenue 304,920 265,102 15.0 604,358 516,935 16.9

Operating income before amort iz ati o n

(2)

125,461 108,658 15.5 245,184 205,960 19.0

Operating income 58,817 52,669 11.7 114,618 97,284 17.8

Impairment of goodwill and intan gi bl e ass ets 399,648 – – 399,648 – –

Net income (l oss) (358,569) 49,911 – (335,018) 70,274 –

Net income excluding the impairment loss and the

income tax adjustment

(2)

25,061 25,909 (3.3) 48,612 46,272 5.1

Cash flow from operating activities 118,440 90,991 30.2 146,914 136,336 7.8

Cash flow from operations

(2)

99,086 85,273 16.2 190,696 165,026 15.6

Capital expenditures and increase in deferred charges 68,121 65,968 3.3 141,934 124,112 14.4

Free cash flow

(2)

30,965 19,305 60.4 48,762 40,914 19.2

Earnings (loss) per share

Basic (7.39) 1.03 – (6.90) 1.45 –

Diluted (7.39) 1.02 – (6.90) 1.44 –

Earnings per share excluding the impairment loss and

the income tax adjustment

(2)

Basic 0.52 0.53 (1.9) 1.00 0.96 4.2

Diluted 0.51 0.53 (3.8) 1.00 0.95 5.3

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

(2)

The indicated terms do not have standardiz ed def inition s prescr ibed by Canadia n Generally Acc epted Accounting Pri nciples (“GAAP ”) and therefo re, may not be

comparable to similar measures presented by other companies. For more details, please consult the “Non-GAAP financial measures” section of the

Management’s discussion and analysis.

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 Cogeco Cable’s future outlook and anticipated events, business, operations,

financial performance, financial condition or results and, in so me 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 current adverse

economic conditions ma ke 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 downturn 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 2008 annual Management’s Discussion and Analysis

(MD&A) that could cause actual results to differ materially from what Cogeco Cable currently expects. These factors

- 3 -

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, future 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 doe s not undertake to update or alter this information before the next quarter.

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

thereto, prepared in accordance with Canadian Generally Accepted Accounting Principles and the MD&A included in the

Corporation’s 2008 Annual Report. Throughout this discussion, all amounts are in Canadian dollars unless otherwise

indicated.

- 4 -

MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)

CORPORATE STRATEGI ES AND OBJECTIVES

Cogeco Cable Inc.’s (“Cogeco Cable” or the “Corporation”) 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, services, clientele and territories, as well as the continuous improvement of networks and equipment and tigh t

controls over costs and business processes. The Corporation measures its performance, with regard to these objectives

by monitoring revenue growth, revenue-generating units (“RGU”)

(1)

growth and free cash flow

(2)

. Below are the recent

achievements in furthering Cogeco Cable’s objectives.

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

Canadian operations

• Digital Television service:

o During the second quarter, the following Digital and High Definition (“HD”) Television services were

launched:

• TSN2 HD, Teletoon Retro and Sportsnet East HD in Québec.

• Telephony service:

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

• Callander, Ingleside, Long Sault and Lancaster, Ontario;

• Daveluyville, Chambord, Desbiens, Lac Bouchette, Metabetchouan, Normandin, St-Ferdinand-

d'Halifax, St-Gédéon, Tring Jonction, Amqui, Batiscan, Causapscal, Lac-au-Saumon, St-

Stanislas, St-Ulric, Ste-Anne-de-la-Pérade, Sayabec et Val-Brillant, Québec.

• High Speed Internet service :

o Launch of a new High Speed Internet (“HSI”) package, HSI Lite Plus, in Ontario and in Québec with

download speeds of up to 3 Mbps and a monthly load bit capacity of 20 GB.

• Cogeco Data Services:

o During the second quarter, announcement of a 10-year, $39 million contract with the Toronto District

School Board (“TDSB”).

European operations

• Bundled offers:

o Cabovisão - Televisão por Cabo, S.A. (“Cabovisão”) realigned some of its bundle offers for certain

customers and is currently assessing improvements to its retention strategies;

• Digital Television service:

o Continued deployment of Cabovisã o’s Digital Television service;

o Launch of SET channel, Sony Entertainment, Animax, Benfica TV, Disney Channel and Disney

Cinemagic;

o Launch of a new HD Set Top Box with Digital Video recording cap abilities (HD + DVR).

• High Speed Internet service:

o During the second quarter, Cabovisão ceased charging for excess consumption for HSI customers.

Continuous improv ement of networks and equipment

• During the first six months of fiscal 2009, the Corporation invested approximately $48.3 million in its infrastructure

including head-ends and upgrades and rebuilds.

Tight control over costs and business processes

• For the first six months of the 2009 fiscal year, consolidated operating costs excluding management fees payable

to COGECO Inc. increased by 15.8%, while revenue grew by 16.9% for the same period s;

• Cabovisão continued to improve its business processes, and at the end of the second quarter, reinforced controls

over its doubtful accounts;

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

discussed in the 2008 annual MD&A, the Corporation had identified certain material weaknesses in the design of

internal controls over financial reporting and has been working to improve the design and efficiency of internal

controls on some significant processes during the quarter. The documentation and remediation of key internal

controls are progressi ng normally.

(1)

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

(2)

Free cash flow does not have a s tandardized definition pre scribed by Canadian Generally Accepted Accounting Principles (“GAA P”) and therefore, may not be

comparable to similar measures presented by other companies. For more details, please consult the “Non-GAAP financial measures” section.

- 5 -

Effective management of capital

• On January 22, 2009, the Corporation entered into a swap agreement with a financial institution to fix the floating

benchmark interest rate with respect to the Euro-denominated Term Loan facilities for a notional amount of

€111.5 million. The interest rate swap to hedge the Term Loans has been fixed at 2.08% until their maturity on

July 28, 2011. The notional value of the swap will decrease in line with the amortization schedule of the Term

Loans. In addition to this fixed interest rate, Cogeco Cable will continue to pay the applicable margin on these

Term Loans in accordance with its Term Facility. At February 28, 2009, 76% of Cogeco Cable’s debt is at fixed

interest rates;

• On October 1, 2008, the Corporation completed, pursuant to a private placement, the issue of 7.00% Senior

Secured Notes Series A for US$190 million maturing October 1, 2015, and 7.60% Senior Secured Notes Series B

for $55 million maturing October 1, 2018. The Corporation also entered into cross-currency swap agreements to

fix the liability for interest and principal payments on the total of its Senior Secured Notes Series A. Interest on the

Notes is payable semi-annually on April 1 and October 1 of each year commencing April 1, 2009. The aggregate

gross proceeds from the issuance of these Notes amounted to approximately $257 million. Net proceeds of

approximately $255 million, after underwriters’ fees and other expenses, were used to repay maturing debt and

reduce bank indebtedness.

RGU gro wth

During the first six months ended February 28, 2009, the consolidated number of RGU increased by 78,340, or 2.9%, to

reach 2,795,214 RGU, on target to attain the Corporation’s RGU growth projections of 100,000 net additions issued on

October 29, 2008 and revised on April 8, 2009, which represents approximately 3.7%, for the fiscal year ending

August 31, 2009. Please consult the “Fiscal 2009 financial guidelines” se ction for further details.

Revenue growth

Second-quarter revenue increased by $39.8 million, or 15%, when compared to the same period of the prior year, to

reach $304.9 million. During the first six months of 2009, revenue increased by $87.4 million, or 16.9%, to reach

$604.4 million. Due to the difficult environment in the Portuguese market, management has revised downward its

guidelines and now expect that revenue should reach $1,205 million a decrease of $5 million compared to its original

guidelines. Please consult the “Fiscal 2009 financial guidelines” section for furthe r details.

Free cash flow

In the second quarter and first six months, Cogeco Cable generated free cash flows of $31 million and of $48.8 million

compared to $19.3 million and $40.9 million, respectively, for the same periods last year, representing increases of 60.4%

and 19.2%. These free cash flow increases resulted mainly from an increase in cash flow from operations

(1)

, resulting

primarily from the improvement of the Corporation’s operating income before amortization

(1)

, partly offset by an increase in

capital expenditures and by the impact of the rapid appreciation of the US dollar over the Canadian dollar in the first six

months of the year. Due to the difficult environment in the Portuguese market partly offset by the appreciation of the Euro

currency over the Canadian dollar, management has revised downward its guidelines and now expect that free cash flow

should reach $80 million, a decrease of $10 million compared to its original guidelines. Please consult the “Fiscal 2009

financial guidelines” section for furthe r details.

IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS

In the second quarter of fiscal 2009, the competitive position of Cabovisão in the Iberian Peninsula further deteriorated

due to the continuing unfavourable economic climate and recurring intense customer promotions and advertising

initiatives from competitors in the Portuguese market at the end of the second quarter. Please refer to “European

operations” section for further details. In accordance with current accounting standards, management considers that the

continued RGU and local currency revenue decline are more significant and persistent than expected, resulting in a

decrease in the value of the Corporation’s investment in the Portuguese subsidiary. As a result, the Corporation tested

goodwill and all long-lived assets for impairment at February 28, 2009.

(1)

The indicated terms do not have standardized definitions prescribed by Canadian 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.

- 6 -

Goodwill has to be tested for impairment using a two step approach. The first step consists of determining whether the fair

value of the reporting unit exceeds the net carrying amount of that reporting unit, including goodwill. In the event that the

net carrying amount exceeds the fair value, a second step is performed in order to determine the amount of the

impairment loss. The Corporation has completed its impairment tests on goodwill and has concluded that goodwill was

impaired at February 28, 2009. As a result, a non-cash impairment loss of $339.2 million was recorded in the second

quarter. Fair value of the reporting unit was determined using the discounted cash flow method. Future cash flows are

based on internal forecasts and consequently, considerable management judgement is necessary to estimate future cash

flows. Significant changes in assumptions could result in further impairments of goodwill.

Intangible assets with definite lives, such as customer relationships, must be tested for impairment by comparing the

carrying amount of the asset or group of assets to the expected future undiscounted cash flow to be generated by the

asset or group of assets. Accordingly, the Corporation has completed its impairment test on customer relationships at

February 28, 2009, and has determined that the carrying value of customer relationships exceeds its fair value. As a

result, a non-cash impairment loss of $60.4 million was recorded in the second quarter.

The impairment loss affected the Corporation’s goodwill and customer relationship asset balances as follows at

February 28, 2009:

($000) $

(unaudited)

Goodwill 339,206

Customer relationships 60,442

Future income taxes (16,018)

Impairment loss net of related income taxes 383,630

OPERATING RESULTS – CONSOLIDATED OVERVIEW

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008

(1)

Change 2009 2008

(1)

Change

($000,except perc enta ges ) $ $ % $ $ %

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

Revenue 304,920 265,102 15.0 604,358 516,935 16.9

Operating costs 176,421 152,765 15.5 350,155 302,261 15.8

Management fees - COGECO Inc. 3,038 3,679 (17.4)

9,019 8,714 3.5

Operating income before amort iz ati o n 125,461 108,658 15.5 245,184 205,960 19.0

Operating margin

(2)

41.1% 41.0% 40.6% 39.8%

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

(2)

Operating margin does not have a standardize d definition prescribed by Canadia n GAAP and therefore, may not be comparable to simi lar measures presented

by other companies. For more details, please consult the “Non-GAAP financial measur es” section.

Revenue

Fiscal 2009 second-quarter consolidated revenue improved by $39.8 million, or 15%, to reach $304.9 million, and first six-

month consolidated revenue by $87.4 million, or 16.9%, to reach $604.4 million, when compared to the prior year. Driven

by an increased number of RGU combined with rate increases and the acquisition of MaXess Networx®, FibreWired

Burlington Hydro Communications and Cogeco Data Services (the “recent acquisitions”) in the second half of fiscal 2008,

second-quarter Canadian operations revenue went up by $38.5 million, or 18.8%, and for the first six months by

$79.6 million, or 19.8%.

- 7 -

Fiscal 2009 second-quarter European operations revenue increased by $1.3 million, or 2.2%, to reach $61.2 million, and

first six month revenue by $7.8 million, or 6.7%, to reach $123.3 million, compared to the same period last year. The

increase is due to the strength of the Euro against the Canadian dollar, despite a RGU loss in the first six months of the

year. Revenue from the European operations in the local currency for the second quarter amounted to €37.6 million, a

decrease of €3 million, or 7.4%, and to €77.8 million, a decrease of €2.3 million, or 2.8%, for the first six months.

Operating costs

For the second quarter and first six months of fiscal 2009, operating costs, excluding management fees payable to

COGECO Inc., increased by $23.7 million and $47.9 million to reach $176.4 million and $350.2 million, respectively,

increases of 15.5% and 15.8% compared to the prior year. Operating costs increased due to the servicing of additional

RGU and the impact of the recent acquisitions in Canada, and in Europe, due to the appreciation of the Euro over the

Canadian dollar and an increase in the level of uncollectible customer accounts.

Operating income before amortization

Fiscal 2009 second quarter and first six-month operating income before amortization increased by $16.8 million, or 15.5%,

to reach $125.5 million, and by $39.2 million, or 19%, to reach $245.2 million, respectively, as a result of various rate

increases, recent acquisitions, and RGU growth generating additional revenues which outpaced operating cost increases.

Cogeco Cable’s second quarter operating margin remained essentially the same at 41.1% compared to 41% for the same

period of the prior year. The operating margin in Canada improved to 44.2% from 42.3% which offset the decrease in the

European operating margi n to 29.1% from 36.6%.

For the first six months of fiscal 2009, the consolidated operating margin improved to 40.6% from 39.8% with the

Canadian operating margin improving to 42.9% from 41.5% and the European operating margin decreasing to 31.4% from

34% the year before.

RELATED PARTY TRAN SACTIONS

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 2009, management fees have been set at a maximum of $9 million, which was reached in the

second quarter. For fiscal 2008, management fees were set at a maximum of $8.7 million, and were fully paid in the first

six months of the year.

Furthermore, Cogeco Cable granted 29,711 stock options to COGECO Inc.’s employees during the first six months of

fiscal 2009, compared to 22,683 for the same period last year. During the second quarter Cogeco Cable charged

COGECO Inc. an amount of $0.1 million with regards to Cogeco Cable’s options granted to COGECO Inc.’s employees,

for a total charge of $0.1 million in the first six months of the year, compared to $0.1 million and $0.2 million, for the same

periods of the prior year. Details regarding the management agreement and stock options granted to COGECO Inc.’s

employees are provided in the MD&A of the Corporation’s 2008 Annual Report. There were no other material related party

transactions during the quarter.

FIXED CHARGES

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008

(1)

Change 2009 2008

(1)

Change

($000, except percentages) $ $ % $ $ %

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

Amortization 66,644 55,989 19.0 130,566 108,676 20.1

Financial expens e 17,988 17,136 5.0 41,382 33,013 25.4

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

- 8 -

The second-quarter and first six months of 2009 amortization amounted to $66.6 million and $130.6 million, respectively,

compared to $56 million and $108.7 million for the same periods the year before. The increase is mainly due to additional

capital expenditures arising from customer premise equipment acquisitions to sustain RGU growth, to the recent

acquisitions in Canada a nd to the appreciation of the Euro currency over the Canadian dollar.

Second-quarter and first six-month period financial expense increased by $0.9 million and $8.4 million compared to the

same periods in 2008 due to the rapid appreciation of the US dollar and the Euro over the Canadian dollar in the first six

months of the year and the increase in the level of Indebtedness (defined as bank indebtedness, derivative financial

instruments and long-term debt). More specifically, financial expense was adversely impacted by foreign exchange losses

amounting to $0.6 million and $4.4 million in the second quarter and first half of fiscal 2009, respectively, as the majority of

customer premise equipment is purchased and subsequently paid in US dollars. The losses in the first half of the year

were essentially due to the unusually high US dollar volatility with the Bank of Canada closing rate fluctuating from

CA$1.0620 per US dollar at August 31, 2008 to CA$1.2723 per US dollar at February 27, 2009, reaching a high of

CA$1.2935 per US dollar on November 20, 2008. For the corresponding periods of the prior year, the Corporation

recorded foreign exchange losses of $0.2 million and foreign exchange gains of $0.9 million, respectively.

INCOME TAXES

Fiscal 2009 second-quarter income tax expense recovery amounted to $0.3 million compared to a recovery of

$14.4 million in fiscal 2008, and for the first six months, the income tax expense amounted to $8.6 million compared to a

recovery of $6 million in the prior year. The income tax recoveries for the current year include a future income tax

recovery of $16 million related to the impairment loss recorded in the second quarter. Prior year income tax amounts

include the impact of the reduction in corporate income tax rates announced on October 16, 2007 by the Canadian federal

government in its Economic Statement and considered substantively enacted on December 14, 2007 (the “income tax

adjustment”). The reduction of these corporate income tax rates reduced future income tax expense by $24 million in the

second quarter and first six months of fiscal 2008. Excluding the effect of the impairment loss in the current year and the

tax rate reductions in the prior year, income tax expense would have amounted to $15.8 million and $24.6 million for the

second quarter and first six months of fiscal 2009, compared to $9.6 million for the second quarter and $18 million for the

first half of fiscal 2008. The increases in income tax expense for fiscal 2009 are mainly due to the increase in operating

income before amortization surpassing that of the fixed charges.

NET INCOME (LOSS)

Fiscal 2009 second quarter net loss amounted to $358.6 million, or $7.39 per share, compared to a net income of

$49.9 million, or $1.03 per share, for the same period in 2008. For the first half of fiscal 2009, net loss amounted to

$335 million, or $6.90 per share, compared to a net income of $70.3 million, or $1.45 per share. Fiscal 2009 net losses

are due to the impairment loss net of related income taxes of $383.6 million recorded in the second quarter of the year, as

described in the “Impairment of goodwill and intangible assets” section. Furthermore, 2008 second quarter net income

included the income tax adjustment of $24 million described above. Excluding the effect of the impairment loss and the

income tax adjustment

(1)

, net income would have amounted to $25.1 million, or $0.52 per share

(1)

, and $48.6 million, or

$1.00 per share, for the quarter and first six months ended February 28, 2009, respectively, compared to $25.9 million, or

$0.53 per share, representing decreases of 3.3% and 1.9%, and $46.3 million, or $0.96 per share, representing increases

of 5.1% and 4.2%, respectively, for the second quarter and first six months of the 2008 fiscal year. Net income reduction

for the quarter has resulted from the deterioration of the financial results of the European operations and by the

appreciation of the Euro currency over the Canadian dollar, partly offset by the improvement of the Canadian operations.

Net income progression for the first six months has resulted mainly from the growth in operating income before

amortization exceeding that of fixed charges from the Canadian operations, partly offset by the reduction in operating

income before amortization, the increase in fixed charges and the unfavourable impact of the Euro currency over the

Canadian dollar for the European operations.

(1)

The indicated terms do not have standardized definitions prescribed by Canadian 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.

- 9 -

CASH FLOW AND LIQUIDITY

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008 2009 2008

($000) $ $ $ $

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

Operating activities

Cash flow from operations

(1)

99,086 85,273 190,696 165,026

Changes in non-cash operating items 19,354 5,718 (43,782) (28,690)

118,440 90,991 146,914 136,336

Investing activities

(2)

(67,857) (64,571) (140,715) (122,641)

Financing activities

(2)

(34,623) (20,022) 4,797 (54,423)

Effect of exchange rate changes on cash and cash equivalents denominated

in foreign currencies 641 355 1,328 202

Net change in cash and cash equivalents

16,601 6,753 12,324 (40,526)

Cash and cash equivalents, beginning of period

32,094 16,929 36,371 64,208

Cash and cash equivalents, end of period

48,695 23,682 48,695 23,682

(1)

Cash flow from operations does not have a standardized definition prescribed by Canadian 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.

(2)

Excludes assets acquired under capital leases.

Fiscal 2009 second quarter cash flow from operations reached $99.1 million, 16.2% higher than the comparable period

last year, primarily due to the increase in operating income before amortization. Changes in non-cash operating items

generated greater cash inflows compared to the same period last year, mainly as a result of increases in accounts

payable and accrued liabilities, and a slight decrease in accounts receivable in the second quarter of fiscal 2009

compared to an increase in accounts receivable in the second quarter of the prior year, partly offset by an increase in

income taxes receivable.

For the first six months of fiscal 2009, cash flow from operations reached $190.7 million, 15.6% higher than in the prior

year, primarily due to the increase in operating income before amortization, partly offset by the increase in financial

expense and current income taxes. Changes in non-cash operating items generated greater cash outflows compared to

the same period last year, mainly as a result of a decrease in income tax liabilities in the current year compared to an

increase in the prior year and a higher increase in income taxes receivable in the first half of the year compared to the

prior year, partly offset by a lower decrease in accounts payable and accrued liabilities and an increase in accounts

receivable in the prior year.

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

(“NCTA”) standard re porting categories, are as follows:

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008 2009 2008

($000) $ $ $ $

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

Customer premise equipmen t

(1)

23,308 26,443 55,132 50,240

Scalable infrastructure 15,050 12,275 27,592 22,098

Line extensions 5,290 2,989 9,577 5,578

Upgrade / Rebuild 10,246 13,745 20,688 25,607

Support capital 8,448 4,422 15,959 7,078

Total capital expenditures

(2)

62,342 59,874 128,948 110,601

Deferred charges and others 5,734 6,070 12,925 13,486

Total investing activities

(2)

68,076 65,944 141,873 124,087

(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 flows.

- 10 -

Fiscal 2009 second quarter total capital expenditures amounted to $62.3 million, an increase of 4.1%, when compared to

the corresponding period of last year, due to the following factors:

• An increase in support capital spending due to improvements in the information systems to sustain the business

activities and the acquisition of a new facility in the Canadian operations;

• An increase in scalable infrastructure capital spending mainly due to the timing of the expansion and head-end

improvements, system powering and equipment reliability to sustain increased customer demand for HSI and

Telephony services in Canada;

• An increase in line extensions due to the expansion of the networks in Canada;

• An increase from the appreciation of the US dollar and the Euro o v er the Canadian dollar;

• These increases were partly offset by a decrease in customer premise equipment spending which reflect lower

RGU growth in Canadian operations and net RGU losses in European operations;

• A decrease in capital expenditures associated with network upgrades and rebuilds due to the timing of these

initiatives.

Total capital expenditures in the first six months of fiscal 2009 amounted to $128.9 million, an increase of 16.6%, when

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

• An increase in support capital spending due to improvements in the information systems to sustain the business

activities and the acquisition of a new facility in the Canadian operations, and to the acquisition of a power

generator for Cogeco Data Service s in th e first quarter of the year;

• An increase in customer premise equipment capital spending resulting from RGU growth in Canadian operations

fuelled in part by continued interest for the HD Television service, combined with the deployment of Digital

Television in Portugal, net of RGU losses in the other services in European operations;

• An increase in scalable infrastructure capital spending mainly due to the timing of the expansion and head-end

improvements, system powering and equipment reliability to sustain increased customer demand for HSI and

Telephony services in Canada;

• An increase in line extensions due to the expansion of the networks in Canada;

• An increase from the appreciation of the US dollar and the Euro o v er the Canadian dollar;

• Partly offsetting these increases, capital expenditures associated with network upgrades and rebuilds decreased

due to the timing of these initiatives.

Deferred charges and others are mainly attributable to reconnect costs. For the second quarter, the increase in deferred

charges and others amounted to $5.7 million compared to $6.1 million for the same period of the prior year. For the first

half of fiscal 2009, the Corporation increased deferred charges and others by $12.9 million compared to an increase of

$13.5 million the year before. Slower RGU growth explained the lower increases recorded in fiscal 2009.

In the second quarter and first six months, the Corporation generated free cash flows amounting to $31 million and

$48.8 million, respectively, compared to $19.3 million and $40.9 million in the preceding year. The free cash flow

increases over the same periods of the prior year are mainly due to an increase in cash flow from operations, resulting

primarily from the improvement of the Corporation’s operating income before amortization, partly offset by an increase in

capital expenditures. The aggregate amount of total capital expenditures and deferred charges increased by $2.2 million

for the quarter ended February 28, 2009, and by $17.8 million for the first half of fiscal 2009 compared to the

corresponding periods of the prior year due to the factors explai ned above.

In the second quarter of 2009, Indebtedness affecting cash decreased by $29.5 million due to the free cash flow of

$31 million and the increase of non-cash operating items of $19.4 million, net of the increase in cash and cash equivalents

of $16.6 million and the dividend payment of $5.8 million described below. During the second quarter of fiscal 2008, the

level of Indebtedness affecting cash decreased by $15.4 million, mainly due to the free cash flow of $19.3 million, partly

offset by a $4.9 million dividend payment described below.

During the second quarter of fiscal 2009, a dividend of $0.12 per share was paid to the holders of subordinate and

multiple voting shares, totalling $5.8 million, compared to a dividend of $0.10 per sha re, or $ 4.9 million the year before.

For the first six months of fiscal 2009, Indebtedness affecting cash increased by $15.5 million due to the reduction of non-

cash operating items of $43.8 million, the increase in cash and cash equivalents of $12.3 million and the payment of

dividends totalling $11.6 million, partly offset by the free cash flow of $48.8 million. Indebtedness was increased through

the issuance on October 1, 2008 of Senior Secured Notes, Series A and Series B, maturing October 1, 2015 and

October 1, 2018, respectively, for net proceeds of approximately $255 million, and by an increase of $24.3 million in bank

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

instrument of $56.2 million, both maturing on October 31, 2008, for a total of $238.7 million, and of net repayments on the

Corporation’s revolving loans of $23 million. During the first half of fiscal 2008, the level of Indebtedness affecting cash

- 11 -

decreased by $48 million, mainly due to the free cash flow of $40.9 million, the reduction of $40.5 million in cash and cash

equivalents partly used to offset the $28.7 million reduction in non-cash operating items and the increase of $3.3 million in

capital stock from the exercise of stock options. These factors have been partly offset by a dividend payment of

$9.7 million described below.

During the first half of fiscal 2009, quarterly dividends of $0.12 per share were paid to the holders of subordinate and

multiple voting shares, totalling $11.6 million, compared to quarterly dividends of $0.10 per share, or $9.7 million the year

before.

As at February 28, 2009, the Corporation had a working capital deficiency of $343.9 million compared to $607.8 million as

at August 31, 2008. The decrease in the deficiency is mainly attributable to the repayment of the US$150 million Senior

Secured Notes, Series A and the related derivative financial instrument for a total of $238.7 million on October 31, 2008,

using the proceeds of issuance of the Senior Secured Notes Series A and B. As part of the usual conduct of its business,

Cogeco Cable maintains a working capital deficiency due to a low level of accounts receivable as a large portion of the

Corporation’s customers pay before their services are rendered, unlike accounts payable and accrued liabilities, which are

paid after products are delivered or services are rendered, thus enabling the Corporation to use cash and cash

equivalents to reduce Indebtedness.

At February 28, 2009, the Corporation had us ed $476.8 million of its $885 million Term Facility for a remaining availability

of $408.2 million.

On October 1, 2008, the Corporation completed, pursuant to a private placement, the issue of US$190 million Senior

Secured Notes Series A maturing October 1, 2015, and $55 million Senior Secured Notes Series B maturing

October 1, 2018. The Senior Secured Notes Series B bear interest at the coupon rate of 7.60% per annum, payable semi-

annually. The Corporation has entered into cross-currency swap agreements to fix the liability for interest and principal

payments on the Senior Secured Notes Series A in the amount of US$190 million, which bear interest at the coupon rate

of 7.00% per annum, payable semi-annually. Taking into account these agreements, the effective interest rate on the

Senior Secured Notes Series A is 7.24% and the exchange rate applicable to the principal portion of the US dollar-

denominated debt has been fixed at CA$1.0625 per US dollar.

FINANCIAL POSITION

Since August 31, 2008, there have been major changes to the balances of “fixed assets”, “intangible assets”, “goodwill”,

“accounts payable and accrued liabilities”, “future income tax assets” “income taxes receivable”, “income tax liabilities”,

“future income tax liabilities”, “cash and cash equivalents” and “Indebtedness”.

The $28.2 million increase in fixed assets is mainly related to increases in capita l expenditures to sustain RGU growth, to

the recent acquisitions in Canada and to the appreciation of the Euro and the US dollar over the Canadian dollar. The

$66.2 million and $326.1 million reductions in intangible assets and goodwill and the $13.9 million decrease in future

income tax liabilities are due to the impairment loss recorded on the Corporation’s investment in Cabovisão in the second

quarter of the year as described in the “Impairment of goodwill and intangible assets” section, net of the appreciation of

the Euro over the Canadian dollar. The $25 million decrease in accounts payable and accrued liabilities and the $12.3

million increase in cash and cash equivalents are related to the timing of payments made to suppliers and the fluctuations

of the Euro currency over the Canadian dollar. The $5.6 million reduction in future income tax assets is due to the

utilization of Ontario minimum tax credits and tax loss carry forwards to reduce current income taxes. The $7 million

increase in income taxes receivable and the $9.9 million decrease in income tax liabilities are due to income tax payments

relating to fiscal 2008 that were made in the first quarter of fiscal 2009. Indebtedness has increased by $35.2 million as a

result of the factors previously discussed in the “Cash Flow and Liquidity” section and the unfavourable impact of the

appreciation of the US dollar and the Euro over the Canadian dollar, partly offset by the increase of $34.3 million in the fair

value of the cross-currency swaps related to the Senior Secured Notes Series A issued on October 1, 2008.

- 12 -

A description of Cogeco Cable’s share data as of March 31, 2009 is presented in the table be low:

Number of shares/options Amount

($000)

Common shares

Multiple voting shares

Subordinate voting shares

15,691,100

32,867,426

98,346

891,715

Options to purchase Subordinate voting shares

Outstanding options

Exercisable options

902,925

521,747

On April 6, 2009, the Corporation cancelled 206,180 options which had been conditionally granted in relation with the

acquisition of Cabovisão, at a price of $26.63 per share, subject to performance criteria of Cabovisão being met. Of these

options, 93,518 were exercisable.

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 2008 annual MD&A, have

not materially changed since August 31, 2008 except for the new financing discussed in the “Cash Flow and Liquidity”

section.

DIVIDEND DECLARATION

At its April 8, 2009 meeting, the Board of Directors of Cogeco Cable declared a quarterly eligible dividend of $0.12 per

share for subordinate and multiple voting shares, payable on May 6, 2009, to shareholders of record on April 22, 2009.

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 periodicity may vary.

FINANCIAL MANAGEME NT

On January 22, 2009, the Corporation entered into a swap agreement with a financial institution to fix the floating

benchmark interest rate with respect to the Euro-denominated Term Loan facilities for a notional amount of €111.5 million.

The interest rate swap to hedge the Term Loans has been fixed at 2.08% until their maturity at July 28, 2011. The notional

value of the swap will decrease in line with the amortization schedule of the Term Loans. In addition to the interest rate

swap of 2.08%, Cogeco Cable will continue to pay the applicable margin on these Term Loans in accordance with its

Term Facility. Since the issuance on January 22, 2009, the fair value of interest rate swap liability increased by

$1.3 million, which is recorded as a decrease of other comprehensive income net of income taxes of $0.4 million.

On October 1, 2008, Cogeco Cable entered into cross-currency swap agreements to set the liability for interest and

principal payments on its US$190 million Senior Secured Notes, Series A maturing in October 1, 2015. These agreements

have the effect of converting the U.S. interest coupon rate of 7.00% per annum to an average Canadian dollar interest

rate of 7.24% per annum. The exchange rate applicable to the principal portion of the debt has been ﬁxed at CA$1.0625

per US dollar. Since the issuance on October 1, 2008, amounts due under the US$190 million Senior Secured Notes

Series A increased by $39.9 million due to the US dollar’s appreciation over the Canadian dollar. The fair value of cross-

currency swaps increased by a net amount of $35.5 million, of which $39.9 million offsets the foreign exchange loss on

the debt denominated in US dollars. The difference of $4.3 million was recorded as a decrease of other comprehensive

income, net of income taxes of $1.2 million.

The Corporation’s net investment in the self-sustaining foreign 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 the net investment in self-sustaining foreign subsidiaries and accordingly,

the Corporation realized a foreign exchange gain of $11.4 million in the first six months of fiscal 2009 which is presented

in other comprehensive income. The exchange rate used to convert the Euro into Canadian dollars for the balance sheet

accounts at February 28, 2009 was $1.6129 per Euro compared to $1.5580 per Euro at August 31, 2008. The average

exchange rates prevailing during the second quarter and first six months used to convert the operating results of the

European operations were $1.6265 per Euro and $1.5864 per Euro, respectively, compared to $1.4741 and $1.4430 per

Euro for the same periods of the prior year.

- 13 -

The following table shows the Canadian dollar impact of a 10% change in the average exchange rate of the Euro currency

into Canadian dollars on European operating results for the first six months ended February 28, 2009:

Six months ended February 28, 2009 As reported

Exchange rate

impact

($000) $ $

(unaudited) (unaudited)

Revenue 123,304 12,330

Operating income before amort iz ati o n 38,678 3,868

Net loss (385,773)

(38,577)

The Corporation is also impacted by foreign currency exchange rates, primarily changes in the values of the US dollar

relative to the Canadian dollar with regards to purchases of equipment, as the majority of customer premise equipment is

purchased and subsequently paid in US dollars. Please consult the “Fixed charges” section of this MD&A and the Foreign

Exchange Risk section in note 14 of the consolidated financial statements for further details.

CANADIAN OPERATION S

CUSTOMER STATISTICS

Net additions % of Penetration

(1)

Quarters ended Six months ended

February 28, February 28, February 29, February 28, February 29, February 28, February 29,

2009 2009 2008 2009 2008 2009 2008

RGU 2,104,948 47,577 51,007 113,040 123,833 – –

Basic Cable service customers 867,882 1,955 1,869 10,788 9,933 – –

HSI service customers

(2)

503,494 10,518 15,058 30,027 40,352 60.7 56.4

Digital Television service customers 478,659 18,693 17,879 36,913 34,132 56.0 49.1

Telephony service customers

(3)

254,913 16,411 16,201 35,312 39,416 33.1 27.5

(1)

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

(2)

Customers subscribing to the HSI service without the Basic Cable service totalled 78,203 as at February 28, 2009 compared to 73,336 as at February 29, 2008.

(3)

Customers subscr ibin g to t he Tel ephony serv ice with out th e Basic Cabl e s ervice tota lled 22,488 as at F ebruar y 28, 20 09 co mpa red t o 13,327 as at Fe bruary 29,

2008.

Fiscal 2009 second quarter and first six-month RGU net additions were lower than for the same periods last year and

reflect an early sign of maturation in some services. The number of net additions for Basic Cable stood at 1,955

customers for the quarter and 10,788 customers for the first six months, compared to 1,869 and 9,933 customers,

respectively, for the same periods of the prior year. This increase is primarily due to continuous improvements to the

service offering, targeted marketing activities and an upswing in subscription activity in border markets due to the

impending over-the-air digital conversion in the United States. In the quarter, Telephony customers grew by 16,411

compared to a growth of 16,201 for the same period last year. For the first six months, Telephony customers grew by

35,312 compared to a growth of 39,416 for the first six months of the prior year. The lower growth for the six month period

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 89%

compared to 80% at February 29, 2008. The number of net additions to HSI service stood at 10,518 customers for the

quarter and 30,027 customers for the first half of fiscal 2009, compared to 15,058 and 40,352 customers for the same

periods last year. 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 18,693 customers compared to 17,879

customers for the second quarter, and at 36,913 customers compared to 34,132 customer s for the first six months of the

prior year, due to targeted marketing initiatives in the second half of fiscal 2008 and in 2009 to improved penetration and

to the continuing strong intere st for the HD Television service.

- 14 -

OPERATING RESULTS

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008

(1)

Change 2009 2008

(1)

Change

($000, except percentages) $ $ % $ $ %

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

Revenue 243,680 205,168 18.8 481,054 401,409 19.8

Operating costs 133,002 114,751 15.9 265,529 226,054 17.5

Management fees – COGECO Inc. 3,038 3,679 (17.4) 9,019 8,714 3.5

Operating income before amort iz ati o n 107,640 86,738 24.1 206,506 166,641 23.9

Operating margin 44.2% 42.3% 42.9% 41.5%

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

Revenue

Second-quarter revenue rose by $38.5 million, or 18.8%, to reach $243.7 million, and first six month revenue increased by

$79.6 million, or 19.8%, to reach $481.1 million mainly due to RGU growth mentioned in the “Customer Statistics” section,

combined with the impact of the recent acquisitions as well as the various rate increases implemented by the Corporation

during fiscal 2008. These rate increases represent an average of approximately $1.60 per Basic Cable se rvice customer.

Operating costs

2009 second-quarter and first six-month operating costs, excluding management fees payable to COGECO Inc.,

increased by $18.3 million, or 15.9%, to reach $133 million, and by $39.5 million, or 17.5%, to reach $265.5 million,

respectively. The increase in operating costs is mainly attributable to servicing additional RGU and to the impact of the

recent acquisitions.

Operating income before amortization

Operating income before amortization rose by $20.9 million, or 24.1%, to reach $107.6 million in the second quarter, and

by $39.9 million, or 23.9%, to reach $206.5 million in the first six months of fiscal 2009. The operating income before

amortization has risen due to the increased revenue outpacing the operating costs growth including the impact of the

recent acquisitions. Cogeco Cable’s Canadian operations’ second-quarter operating margin increased to 44.2% compared

to 42.3% for the same period in the prior year, and to 42.9% from 41.5% for the first six months.

- 15 -

EUROPEAN OPERATIONS

CUSTOMER STATISTICS

Net additions (losses) % of Penetration

(1)

Quarters ended Six months ended

February 28, February 28, February 29, February 28, February 29, February 28, February 29,

2009 2009 2008 2009 2008 2009 2008

RGU 690,266 (21,951)

5,189 (34,700)

15,387 – –

Basic Cable service customers 276,192 (11,908)

2,724 (19,943)

7,657 – –

HSI service customers

(2)

146,604 (7,488)

2,096 (12,697)

5,902 53.1 55.0

Digital Tele vision service customers

(3)

36,258 6,409 – 11,806 – 13.1 –

Telephony service customers

(4)

231,212 (8,964)

369 (13,866)

1,828 83.7 81.2

(1)

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

(2)

Customers subscribing to the HSI service without the Basic Cable service totalled 7,284 as at February 28, 2009 compared to 8,409 as at February 29, 2008.

(3)

The Digital Television service was launched in the third quarter of fiscal 2008.

(4)

Customers subscr ibing to the Telephony servic e without the Basic Cable servic e totalled 8,621 as at February 28, 2009 compared to 8,727 as at February 29,

2008.

Fiscal 2009 second quarter and first six months were marked by a continuing unfavourabl e economic environment in the

Iberian Peninsula, recurri ng intense customer promotions and adv ertising initiatives from competitors for their new

respective third leg of the triple-play service during the latter part of the second quarter in the Portuguese market. The s e

factors were the main contributors to net customer losses in the Basic Cable, HSI and Telephony services compa red to

the same periods of the prior year. The Digital Television service was launched in the third quarter of 2008, with net

additions in fiscal 2009 of 6,409 customers in the second quarter and 11,806 customers in the first six months. Fiscal

2009 second quarter and first six month period Basic Cable service customers decreased by 11,908 and 19,943

customers, respectively, compared to a growth of 2,724 and 7,657 cu stomers in 2008. HSI service customers decreased

by 7,488 and 12,697 customers compared to increases of 2,096 and 5,902 for the corresponding pe riods in fiscal 2008.

Telephony service decreased by 8,964 and 13,866 customers compared to a growth of 369 and 1,828 customers for the

same periods of the preceding year.

In addition to the launch of new channels and retention strategies during the quarter, new marketing and other operating

initiatives are in the process of being implemented, the result of which should help in reducing customer attrition in the

upcoming quarters.

OPERATING RESULTS

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008

(1)

Change 2009 2008

(1)

Change

($000, except percentages) $ $ % $ $ %

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

Revenue 61,240 59,934 2.2 123,304 115,526 6.7

Operating costs 43,419 38,014 14.2 84,626 76,207 11.0

Operating income before amort iz ati o n 17,821 21,920 (18.7) 38,678 39,319 (1.6)

Operating margin 29.1% 36.6% 31.4% 34.0%

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

Revenue

Fiscal 2009 second-quarter and first six months revenue increased by $1.3 million to reach $61.2 million and by

$7.8 million to reach $123.3 million, increases of 2.2% and 6.7%, respectively, when compared to fiscal 2008. The growth

is due to the favourable impact of the appreciation of the Euro over the Canadian dollar and to monthly rate increases

implemented by Cabovisão averaging $2.00 (€1.30) per Basic Cable customer in January 2008, net of decreases in

overall RGU in the second quarter and first six months of fiscal 2009. Revenue from the European operations in the local

- 16 -

currency for the second quarter amounted to €37.6 million, a decrease of €3 million, or 7.4%, and to €77.8 million, a

decrease of €2.3 million, or 2.8% for the first six months.

Operating costs

For the second quarter, operating costs increased by $5.4 million to reach $43.4 million, an increase of 14.2% compared

to the prior year. In the first half of fiscal 2009, operating costs increased by $8.4 million to reach $84.6 million, an

increase of 11%. The increases in operating costs are mainly attributable to the unfavourable impact of the appreciation of

the Euro over the Canadian dollar. Operating costs from the European operations in the local currency for the second

quarter and first six months of fiscal 2009 amounted to €26.7 million and €53.3 million, respectively, increases of

€0.9 million, or 3.5%, and €0.5 million, or 0.9% compared to the prior year. The operating costs increased in local

currency mainly due to an increase in the amount of bad debts recorded in the quarter and first six months of the year.

However, Cabovisão has put together initiatives at the end of the second quarter of 2009 to better manage its collection

process whic h should have a favourable impact on the level of bad debts in the coming months.

Operating income before amortization

For the second quarter operating income before amortization decreased to $17.8 million from $21.9 million, and to

$38.7 million from $39.3 million in the first six months of fiscal 2009, representing decreases of 18.7% and 1.6%,

respectively, mainly due to increases in operating costs outpacing the revenue growth. European operations’ operating

margin decreased for the second quarter to 29.1% from 36.6%, and for the first six months to 31.4% from 34% in the prior

year. Operating income before amortization in the local currency amounted to €10.9 million for the second quarter, a

decrease of €3.9 million, or 26.4%, and to €24.4 million, a decrease of €2.7 million, or 10.1% for the first half of the year.

FISCAL 2009 FINANCIAL GUIDELINES

As a result of the continuing unfavourable economic climate and the renewal of marketing initiatives from competitors in

the Portuguese market, Cogeco Cable recorded a non-cash impairment loss amounting to $399.6 million on its net

investment in its Portuguese subsidiary, Cabovisão, in the second quarter of fiscal 2009. Net of the related income taxes,

the impairment loss had an unfavourable impact of $383.6 million on net income in the second quarter of 2009. For further

details, please see the “Impairment of goodwill and intangible assets” section. Furthermore, the European operations

financial results have been revised downwards to take into consideration the current situation in the Portuguese market

described above and the exchange rate used for the fiscal 2009 revised projections for the European operations has been

increased to $1.60 per Euro compared to $1.50 per Euro for the original guidelines.

Finally, Canadian operations continue to show solid results and management expects to meet its initial projections for this

segment for the 2009 fiscal year.

Consolidated

Revised projections

April 8, 2009 Projections

Fiscal 2009 Fiscal 2009

(in millions of dollars, except net customer additions and operating margin) $ $

Financial guidelines

Revenue 1,205 1,210

Operating income before amort iz ati o n 500 508

Operating margin 42% 42%

Financial expens e 70 70

Amortization 270 275

Current income taxes 50 50

Net income (l oss) (275) 107

Capital expenditures and deferred charges 300 300

Free cash flow 80 90

Net customer additions guidelines

RGU 100,000

100,000

- 17 -

UNCERTAINTIES AND M AIN RISK FACTORS

There has been no significant change in the uncertainties and main risk factors faced by the Corporation since

August 31, 2008, except as described below. A detailed description of the uncertainties and main risk factors faced by

Cogeco Cable can be found in the 2008 annual MD&A.

Cogeco Cable’s footprint includes certain regions in Ontario (Burlington and Windsor) and in Portugal (Palmela) where the

automobile industry is a significant driver of economic activity. The sharp downturn experienced by the automobile

industry in recent months may have an adverse impact on the level of economic activity and consumer expenditures on

goods and services within those communities. In previous recessionary periods, demand for cable telecommunications

services has generally proved to be resilient. However, there is no assurance that demand will remain resilient in a

prolonged global recession.

Despite Cogeco Cable’s strong balance sheet and the proactive management of debt maturities, the present situation in

financial markets and the credit crisis may result in reduced availability of capital in both the debt and equity markets in

the coming years. As Cogeco Cable’s current credit facilities and other sources of financing reach their respective

maturities, the terms of bank and other debt facilities may be less favourable upon renewal.

Market conditions may also have an impact on the Corporation’s defined benefit pension plans as there is no assurance

that the actual rate of return on plan assets will approximate the assumed rate of return used in the most recent actuarial

valuation. Market driven changes may impact the assumptions used in future actuarial valuations and could result in the

Corporation being required to make contributions in the future that differ significantly from the current contributions to the

Corporation’s defined benefit pension pl ans.

The Corporation is exposed to interest rate risks for both fixed interest rate and ﬂoating interest rate instruments.

Fluctuations in interest rates will have an effect on the valuation and the collection or repayment of these instruments

which could result in a significant impact on the Corporation’s financial expense. At February 28, 2009, 76% of Cogeco

Cable’s debt is at fixed interest rates.

The current volatility of currency exchange and interest rate in the financial markets is unusually high and could lead to an

increase in the level of risk on hedging instruments to which Cogeco Cable is a party should one or more of the

counterparts to these instruments become financially distressed and unable to meet their obligations.

It is anticipated that digital terrestrial television services will be launched in Portugal in the second half of the current year.

This development may result in some attrition of Basic Cable television service customers, and consequently have an

adverse impact on RGU.

ACCOUNTING POLICIES AND ESTIMATES

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

pronouncements since August 31, 2008, except as described below. A description of the Corporation’s policies and

estimates can be found in the 2008 annual MD&A.

Capital disclosures and financial instruments

Effective September 1, 2008, the Corporation adopted the Canadian Institute of Chartered Accountants (“CICA”)

Handbook Section 1535, Capital Disclosures, Section 3862, Financial Instruments – Disclosures and Section 3863,

Financial Instruments – Prese ntation .

Capital disclosures

Section 1535 of the CICA Handbook requires that an entity disclose information that enables users of its financial

statements to evaluate the entity’s objectives, policies and processes for managing capital, including disclosures of any

externally imposed capital requirements and the consequences for non-compliance. These new disclosures are included

in note 14 of the Corporation’s interim consolidated financial statements.

Financial instruments

Section 3862 on financial instrument disclosures requires the disclosure of information about the significance of financial

instruments for the entity's financial position and performance and the nature and extent of risks arising from financial

instruments to which the entity is exposed during the period and at the balance sheet date, and how the entity manages

those risks.

- 18 -

Section 3863 establishes standards for pr esentation of financial instruments and non-financial derivatives. It deals with the

classification of financial instruments, fr om the perspective of the issuer, between liabilities and equities, the classification

of related interest, dividends, gains and losses, and circumstances in which financial assets and financial liabilities are

offset.

The adoption of these standards did not have any impact on the classification and measurements of the Corporation’s

financial instruments. The new disclosures pursuant to these new Sections are included in note 14 of the Corporation’s

interim consolidated financial statement s.

Credit risk and fair value of financial assets and financial liabilities

On January 20, 2009, the Emerging Issues Committee (“EIC”) of the Canadian Accounting Standards Board issued EIC

Abstract 173, Credit Risk and Fair Value of Financial Assets and Financial Liabilities, which establishes guidance

requiring an entity to consider its own credit risk as well as the credit risk of the counterparty in determining the fair value

of financial assets and financial liabilities, including derivative instruments. EIC 173 is applicable to all financial assets and

liabilities measured at fair value in interim and annual financial statements for periods ending on or after January 20, 2009

and is applicable to the Corporation for its second quarter of fiscal 2009 with retrospective application, without restatement

of prior periods, to the beginning of its current fiscal year. The adoption of this new abstract during the second quarter

decreased derivative financial instruments assets by $3.5 million, decreased future income tax liabilities by $1 million and

decreased accumulated other comprehensive income by $2.6 million at December 1, 2008 and had no significant impact

on the consolidated balan ce sheet at September 1, 2008.

General standards of financial sta tement presentation

The CICA amended Section 1400 of the CICA Handbook, General Standards of Financial Statement Presentation, to

include a requirement for management to make an assessment of the entity’s ability to continue as a going concern when

preparing financial statements. These changes, including the related disclosure requirements, were adopted by the

Corporation on September 1, 2008 and had no impact on the interim consolidated financial statements.

FUTURE ACCOUNTING PRO NOUN CEMENTS

Business combinations, consolidated financial statements and non-controlling interests

During January 2009, the CICA issued Handbook Section 1582, Business Combinat ions, which replaces Section 1581 of

the same name, and Sections 1601, Consolidated Financial Statements and 1602, Non-Controlling Interests, which

together replace Section 1600, Consolidated Financial Statements. These new Sections harmonize significant aspects of

Canadian accounting standards with the International Financial Reporting Standards (“IFRS”) that will be mandated for

entities with fiscal year beginning on or a fter January 1, 2011.

Section 1582 requires that all business acquisitions be measured at the fair value of the acquired entity at the acquisition

date even if the business combination is achieved in stages, or if less than 100 percent of the equity interest in the

acquiree is owned at the acquisition date, and expands the definition of a business subject to an acquisition. The Section

also establishes new guidance on the measurement of consideration given and the recognition and measurement of

assets acquired and liabilities assumed in a business combination. Furthermore, under this new guidance, acquisition

costs, which were previously included as a component of the consideration given, and any negative goodwill resulting

from the allocation of the purchase price, which was allocated as a reduction of non-current assets acquired under the

previous standard, will be recorded in earnings in the current period. This new Section will be applied prospectively and

will only impact the Corporation’s consolidated financial statements for future acquisitions concluded in periods

subsequent to the date of adoption.

Sections 1601 and 1602 dealing with consolidated financial statements require an entity to measure non-controlling

interest upon acquisition either at fair value or at the non-controlling interest's proportionate share of the acquiree's

identifiable net assets. The new Sections also require non-controlling interest to be presented as a separate component of

shareholders' equity.

The new standards will apply as of the beginning of the first annual reporting period begin ning on or after January 1, 2011,

with simultaneous early adoption permitted. Early adoption may reduce the amount of restatement required upon

conversion to IFRS. The Corporation is currently assessing the impact of these new Sections on its consolidated financial

statements.

- 19 -

Harmonization of Canadian and International accounting standards

In March 2006, the Accounting Standards Board of the CICA released its new strategic plan, which proposed to abandon

Canadian GAAP and effect a complete convergence to the IFRS for publicly accountable entities.

In April 2008, the CICA published an exposure draft as guidance which requires the transition to IFRS to replace

Canadian GAAP as currently employed by Canadian publicly accountable enterprises. The changeover will occur no later

than fiscal years beginning on or after January 1, 2011. Accordingly, the Corporation expects that its first interim

consolidated financial statements presented in accordance with IFRS will be for the three-month period ending

November 30, 2011, and its first annual consolidated financial statements presented in accordance with IFRS will be for

the year ending August 31, 2012.

IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences in recognition,

measurement and disclosure requirements. The Corporation has established a project team including representatives

from various areas of the organization to plan and complete the transition to IFRS. This team reports periodically to the

Audit Committee, who oversees the IFRS implementation project on behalf of the Board of Directors. The Corporation will

be assisted by external advisors as required.

The implementation project consists of three primary phases, which may occur concurrently as IFRS are applied to

specific areas of operations:

• Scoping and diagnostic phase —This phase involves performing a high-level impact assessment to identify key

areas that are expected to be impacted by the transition to IFRS. The result of these procedures is the ranking of

IFRS impacts in order of priority to assess the timing and complexity of transition efforts that will be required in

subsequent phases.

• Impact analysis, evaluation and design phase — In this phase, each area identified from the scoping and

diagnostic phase will be addressed in order of descending priority, with project teams established as deemed

necessary. This phase involves specification of changes required to existing accounting policies, information

systems and business processes, together with an analysis of policy choices permitted under IFRS and the

development of draft IFRS financial statement content.

• Implementation and review phase — This phase includes execution of changes to information systems and

business processes, completing formal authorization processes to approve recommended accounting policy

changes and training programs across the organization, as necessary. It will culminate in the collection of

financial information necessary to compile IFRS-compliant financial statements, embedding IFRS in business

processes, eliminating any unnecessary data collection processes and finally the approval by the Audit

Committee of the IFRS financial statements. Implementation also involves additional staff training with the

deployment of revised systems.

The Corporation completed the scoping and diagnostic phase in February 2009, and is now conducting the impact

analysis, evaluation and design phase. As implications of the conversion are identified, impact on information technology,

data systems and business activities will be assessed. The Corporation’s analysis of the IFRS and the comparison with

currently applied accounting principles has identified a number of differences that may require information system

changes or which are likely to have a material impa ct on the financial statements of the Corporation.

Set out below are the main areas where changes in accounting policies are expected to have a significant impact on the

Corporation’s consolidated financial statements. The list below should not be regarded as a complete list of changes that

will result from transition to the IFRS. It is intended to highlight areas that the Corporation believes to be the most

significant; however, analysis of changes is still in process and the selection of accounting policies where choices are

available under IFRS has not been completed. We note that the regulatory bodies that promulgate the Canadian GAAP

and the IFRS have significant ongoing projects that could affect the ultimate differences between Canadian GAAP and

IFRS and their impact on the Corporation’s consolidated financial statements in future years. The future impacts of the

IFRS will also depend on the particular circumstances prevailing in those years. The standards listed below are those

existing based on current Canadian GAAP and IFRS. At this stage, the Corporation is not able to reliably quantify the

expected impacts of these difference s o n its consolidated financial statements. They are a s follows:

• Presentation of Financial Statements (IAS 1)

• Income Taxes (IAS 12)

• Property, Plant and Equipment (IAS 16)

• Revenue (IAS 18)

• Impairment of Assets (IAS 36)

• Business Combinations (IFRS 3)

Furthermore, IFRS 1, First-Time Adoption of International Financial Reporting Standards, provides entities adopting IFRS

- 20 -

for the first time with a number of optional exemptions and mandatory exceptions to the general requirement for full

retrospective application of IFRS which may differ from the requirements of the sections listed above. The Corporation is

analyzing the various accounting policy choices available and will implement those determined to be most appropriate in

the Corporation’s circumstances. The Corporation has not yet determined the aggregate financial impact of adopting IFRS

1 on its consolidated financial statemen ts.

The conversion project is progressing according to the establish ed plan.

NON-GAAP FINANCI AL 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”, “free cash flow”,

“operating income before amortization”, “operating margin”, “net income excluding the impairment loss and the income tax

adjustment” and “earnings per share excluding the impairment loss and the income tax adjustment”.

Cash flow from operations and fr ee 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 items. 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-GAAP 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.

Cash flow from operations is calculated as follows:

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008 2009 2008

($000) $ $ $ $

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

Cash flow from operating activities 118,440 90,991 146,914 136,336

Changes in non-cash operating items (19,354)

(5,718)

43,782 28,690

Cash flow from operations 99,086 85,273 190,696 165,026

Free cash flow is calculated as follows:

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008 2009 2008

($000) $ $ $ $

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

Cash flow from operations 99,086 85,273 190,696 165,026

Acquisition of fixed assets (62,123)

(58,501)

(127,790)

(109,155)

Increase in deferred charges (5,779)

(6,094)

(12,986)

(13,511)

Assets acquired under capital leases – as per note 12 b) (219)

(1,373)

(1,158)

(1,446)

Free cash flow 30,965 19,305 48,762 40,914

Operating income before amortization and opera ting margin

Operating income before 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 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 left over, before income

- 21 -

taxes, to pay for its fixed costs, such as interest on Indebtedness. Operating margin is calculated by dividing operating

income before amortizatio n by revenue.

The most comparable Canadian GAAP financial measure is operating income. Operating income before amortization and

operating margin are calculated as follows:

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008

(1)

2009 2008

(1)

($000, except percentages) $ $ $ $

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

Operating income 58,817 52,669 114,618 97,284

Amortization 66,644 55,989 130,566 108,676

Operating income before amortization 125,461 108,658 245,184 205,960

Revenue 304,920 265,102 604,358 516,935

Operating Margin 41.1% 41.0% 40.6% 39.8%

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

Net income excluding the impairment loss and the income tax adjustment and earnings per share excluding the

impairment loss and the income tax adjustment

Net income excluding the impairment loss and the income tax adjustment and earnings per share excluding the

impairment loss and the income tax adjustment are used by Cogeco Cable’s management and investors to evaluate what

would have been the net income and earnings per share excluding these adjustments. This allows the Corporation to

isolate the unusual adjust m ents in order to evaluate the net income and earnings per share from ongoing activities.

The most comparable Canadian GAAP financial measures are net income and earnings per share. Net income excluding

the impairment loss and the income tax adjustment and earnings per share excluding the impairment loss and the income

tax adjustment per share are calculated as follows:

Quarters ended Six months ended

February 28, February 29, February 28, February 29,

2009 2008 2009 2008

($000) $ $ $ $

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

Net income (loss) (358,569)

49,911 (335,018)

70,274

Adjustments:

Impairment loss net of related income taxes 383,630 – 383,630 –

Income tax adju stment – (24,002)

– (24,002)

Net income excluding the impairment loss and the income tax

adjustment 25,061 25,909 48,612 46,272

Weighted average number of multiple voting and subordinate voting

shares outstanding

48,540,013

48,499,406

48,531,846

48,439,880

Effect of dilutive stock options

158,317 300,010 185,596 318,789

Weighted average number of diluted multiple voting and subordinate

voting shares outstanding

48,698,330

48,799,416

48,717,442

48,758,669

Earnings per share excluding the impairment loss and the

income tax adjustment

Basic 0.52 0.53 1.00 0.96

Diluted 0.51 0.53 1.00 0.95

- 22 -

ADDITIONAL INFORMATION

This MD&A was prepared on April 8, 2009. Additional information relating to the Corporation, including its Annual

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

ABOUT COGE CO CABLE

Cogeco Cable (www.cogeco.ca) is a telecommunications company, 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 customers with Audio, Analogue and Digital Television, as well as HSI

and Telephony services. Cogeco Cable also provides, to its commercial customers, data networking, e-business

applications, video conferencing, hosting services, Ethernet, private line, VoIP, HSI access, dark fibre, data storage, date

security and co-location services and other advanced communication solutions. 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, April 9, 2009 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 Nu mber: 1 800-820-0231

International Access Number: +1 416-640-5926

Confirmation Code: 7471071

By Internet at www.cogeco.ca/investors

A rebroadcast of the conference call will be available until April 17, by dialing:

Canada and USA access number: 1 888-203-1112

International access number: +1 6 47-436-0148

Confirmation code: 7471071

- 23 -

Supplementary Quarterly Financial Information

(unaudited)

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

2009 2008

(1)

2008 2007

(1)

2008

(1)

2007

(1)(3)

2008

(1)

2007

(1)

($000, except percentages and

per share data) $ $ $ $ $ $ $ $

Revenue 304,920 265,102 299,438 251,833 284,908 244,314 274,944 240,612

Operating income before

amortization

(2)

125,461 108,658 119,723 97,302 122,000 102,586 117,492 96,616

Operating margin

(2)

41.1% 41.0% 40.0% 38.6% 42.8% 42.0% 42.7% 40.2%

Amortization 66,644 55,989 63,922 52,687 61,414 54,164 58,209 47,278

Operating income 58,817 52,669 55,801 44,615 60,586 48,422 59,283 49,338

Financial expens e 17,988 17,136 23,394 15,877 18,752 18,684 17,374 20,015

Impairment of goodwill and

intangible assets 399,648 – – – – – – –

Income taxes (250) (14,378) 8,856 8,375 9,968 (6,630) 10,767 8,942

Net income (l oss) (358,569) 49,911 23,551 20,363 31,866 36,368 31,142 20,381

Net income excluding the

impairment loss and the income

tax adjustment

(2)

25,061 25,909 23,551 20,363 31,866 21,647 31,142 20,381

Cash flow from operations

(2)

99,086 85,273 91,610 79,753 99,547 83,825 95,829 76,416

Cash flow from operating

activities 118,440 90,991 28,474 45,345 143,748 112,615 112,799 53,387

Free cash flow

(2)

30,965 19,305 17,797 21,609 21,075 14,861 36,901 18,599

Earnings (loss) per share

Basic (7.39) 1.03 0.49 0.42 0.66 0.79 0.64 0.45

Diluted (7.39) 1.02 0.48 0.42 0.65 0.78 0.64 0.45

Earnings per share excluding

the impairment loss and the

income tax adjustment

(2)

Basic 0.52 0.53 0.49 0.42 0.66 0.47 0.64 0.45

Diluted 0.51 0.53 0.48 0.42 0.65 0.47 0.64 0.45

(1)

Certain comparativ e figures hav e be en reclas sified to c onfor m to the c urrent year’s pres ent ation to ref lect the reclas sification of foreign ex chan ge gains or loss es

from operating costs to financial expense.

(2)

The indicated terms do not have standardiz ed def inition s prescr ibed by Canadia n Generally Acc epted Accounting Pri nciples (“GAAP ”) and therefo re, may not be

comparable to similar measures presented by other companies. For more details, please consult the “Non-GAAP financial measures” section of the

Management’s discussion and analysis.

(3)

Net income for the quarter ended August 31, 2007 has been adjusted to remove income tax adjustments of $14.7 million related to the recognition of benefits

stemming from prior years’ income tax losses and minimum income tax paid, and a reduction of Canadian federal enacted income tax rates in addition to the

adjustments described in the “Non-GAAP financial measures” section of the Management’s discussion and analysis.

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, and Aveiro, Covilhã, Evora, Guarda and Coimbra in Portugal. 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

February 28, August 31,

2009 2008

Homes Passe

Ontario

1,039,95

5 1,029,121

Québec 509,701 502,490

Canada 1,549,65

6 1,531,611

Portugal 902,570 895,923

Total 2,452,22

6 2,427,534

Revenue Generating Unit

Ontario 1,458,928 1,387,054

Québec 646,020 604,854

Canada 2,104,948 1,991,908

Portugal 690,266 724,966

Total 2,795,21

4 2,716,874

Basic Cable Service Customer

Ontario 602,552 596,229

Québec 265,330 260,865

Canada 867,882 857,094

Portugal 276,192 296,135

Total 1,144,07

4 1,153,229

Discretionnary Service Customer

Ontario 496,416 493,858

Québec 223,190 215,820

Canada 719,606 709,678

Portugal - -

Total 719,606 709,678

Pay TV Service Customer

Ontario 108,279 97,753

Québec 51,639 47,075

Canada 159,918 144,828

Portugal 70,710 57,715

Total 230,628 202,543

High Speed Internet Service Customer

Ontario 371,572 352,553

Québec 131,922 120,914

Canada 503,494 473,467

Portugal 146,604 159,301

Total 650,098 632,768

Digital Television Service Customers

Ontario 313,886 288,345

Québec 164,773 153,401

Canada 478,659 441,746

Portugal 36,258 24,452

Total 514,917 466,198

Telephony Service Customer

Ontario 170,918 149,927

Québec 83,995 69,674

Canada 254,913 219,601

Portugal 231,212 245,078

Total 486,12

5 464,679

- 25 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited)

Three months ended

Six months ended

(In thousands of dollars, except per share data) February 28, 2009

February 29, 2008

February 28, 2009

February 29, 2008

Revenue

Service 302,409

262,678

599,802

513,084

Equipment 2,511

2,424

4,556

3,851

304,920

265,102

604,358

516,935

Operating costs 176,421

152,765

350,155

302,261

Management fees – COGECO Inc. 3,038

3,679

9,019

8,714

Operating income before amortization 125,461

108,658

245,184

205,960

Amortization (note 3) 66,644

55,989

130,566

108,676

Operating income 58,817

52,669

114,618

97,284

Financial expense (note 4) 17,988

17,136

41,382

33,013

Impairment of goodwill and intangible assets (note 5) 399,648

─

399,648

─

Income (loss) before income taxes (358,819)

35,533

(326,412)

64,271

Income taxes (note 6) (250)

(14,378)

8,606

(6,003)

Net income (loss) (358,569)

49,911

(335,018)

70,274

Earnings (loss) per share (note 7)

Basic (7.39)

1.03

(6.90)

1.45

Diluted (7.39)

1.02

(6.90)

1.44

- 26 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

Three months ended

Six months ended

(In thousands of dollars) February 28, 2009

February 29, 2008

February 28, 2009

February 29, 2008

Net income (loss) (358,569)

49,911

(335,018)

70,274

Other comprehensive income

Unrealized gains (losses) on derivative financial instruments

designated as cash flow hedges, net of income tax expense

of $1,401,000 and $3,836,000 (income tax recovery of

$44,000 and $1,187,000 in 2008)

7,249

(1,498)

30,449

(8,151)

Reclassification to net income of realized losses (gains) on

derivative financial instruments designated as cash flow

hedges, net of income tax expense of $902,000 and

$5,225,000 (income tax recovery of $319,000 and $1,664,000

in 2008)

(5,805)

2,021

(34,196)

9,106

Unrealized gain on translation of a net investment in self-

sustaining foreign subsidiaries

18,229

14,050

24,309

24,390

Unrealized losses on translation of long-term debts designated

as hedges of a net investment in self-sustaining foreign

subsidiaries

(9,557)

(8,887)

(12,916)

(15,263)

10,116

5,686

7,646

10,082

Comprehensive income (loss) (348,453)

55,597

(327,372)

80,356

- 27 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT)

(unaudited)

Six months ended

(In thousands of dollars) February 28, 2009

February 29, 2008

Balance at beginning, as previously reported 297,150

181,952

Changes in accounting policies ─

1,307

Balance at beginning, as restated 297,150

183,259

Net income (loss) (335,018)

70,274

Dividends on multiple voting shares (3,766)

(3,138)

Dividends on subordinate voting shares (7,883)

(6,553)

Balance at end (49,517)

243,842

- 28 -

COGECO CABLE INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands of dollars)

February 28, 2009

August 31, 2008

Assets

Current

Cash and cash equivalents 48,695

36,371

Accounts receivable 59,430

59,582

Income taxes receivable 9,262

2,267

Prepaid expenses 12,900

12,892

Future income tax assets 4,254

8,661

134,541

119,773

Fixed assets 1,286,150

1,257,965

Deferred charges 58,120

57,751

Intangible assets (note 8) 1,024,822

1,091,042

Goodwill (note 8) 161,669

487,805

Derivative financial instruments 34,285

─

Future income tax assets 3,577

4,819

2,703,164

3,019,155

Liabilities and Shareholders’ equity

Liabilities

Current

Bank indebtedness 34,562

10,302

Accounts payable and accrued liabilities 222,599

247,638

Income tax liabilities 10,360

20,212

Deferred and prepaid income 32,496

32,859

Derivative financial instruments ─

79,791

Current portion of long-term debt (note 9) 178,403

336,807

478,420

727,609

Long-term debt (note 9) 1,001,623

718,234

Deferred and prepaid income and other liabilities 12,636

11,859

Pension plan liabilities and accrued employees benefits 3,823

3,139

Future income tax liabilities 239,365

253,235

1,735,867

1,714,076

Shareholders’ equity

Capital stock (note 10) 990,061

988,889

Contributed surplus 3,753

3,686

Retained earnings (deficit) (49,517)

297,150

Accumulated other comprehensive income (note 11) 23,000

15,354

967,297

1,305,079

2,703,164

3,019,155

- 29 -

COGECO CABLE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Three months ended

Six months ended

(In thousands of dollars) February 28, 2009

February 29, 2008

February 28, 2009

February 29, 2008

Cash flow from operating activities

Net income (loss) (358,569)

49,911

(335,018)

70,274

Adjustments for:

Amortization (note 3) 66,644

55,989

130,566

108,676

Amortization of deferred transaction costs 643

731

1,291

1,453

Impairment of goodwill and intangible assets (note 5) 399,648

─

399,648

─

Future income taxes (note 6) (9,879)

(22,448)

(6,968)

(17,262)

Stock-based compensation 377

986

433

1,222

Loss (gain) on disposal of fixed assets (5)

(103)

218

239

Other 227

207

526

424

99,086

85,273

190,696

165,026

Changes in non-cash operating items (note 12 a)) 19,354

5,718

(43,782)

(28,690)

118,440

90,991

146,914

136,336

Cash flow from investing activities

Acquisition of fixed assets (note 12 b)) (62,123)

(58,501)

(127,790)

(109,155)

Increase in deferred charges (5,779)

(6,094)

(12,986)

(13,511)

Other 45

(67,857)

(64,571)

(140,715)

(122,641)

Cash flow from financing activities

Increase in bank indebtedness 2,629

17,697

24,260

17,697

Net repayments under the term facility (31,300)

(32,473)

(23,003)

(64,466)

Issuance of long-term debt, net of transaction costs ─

─

254,771

─

Repayments of long-term debt and settlement of derivative financial

instruments

(812)

(632)

(240,546)

(1,255)

Issue of subordinate voting shares 686

236

964

3,292

Dividends on multiple voting shares (1,883)

(1,569)

(3,766)

(3,138)

Dividends on subordinate voting shares (3,943)

(3,281)

(7,883)

(6,553)

(34,623)

(20,022)

4,797

(54,423)

Effect of exchange rate changes on cash and cash equivalents

denominated in foreign currencies

641

355

1,328

202

Net change in cash and cash equivalents 16,601

6,753

12,324

(40,526)

Cash and cash equivalents at beginning 32,094

16,929

36,371

64,208

Cash and cash equivalents at end 48,695

23,682

48,695

23,682

See supplemental cash flow information in note 12.

- 30 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(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”), present fairly the financial position of

Cogeco Cable Inc. (“the Corporation”) at February 28, 2009 and August 31, 2008 as well as its results of operations

and its cash flows for the three and six month peri ods ended February 28, 2009 and February 29, 2008.

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, 2008. 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 described below.

Adoption of new accounting policies

Capital disclosures and financial instruments

Effective September 1, 2008, the Corporation adopted the Canadian Institute of Chartered Accountants (“CICA”)

Handbook Section 1535, Capital Disclosures, Section 3862, Financial Instruments – Disclosures and Section 3863,

Financial Instruments – Prese ntation .

Capital disclosures

Section 1535 of the CICA Handbook requires that an entity disclose information that enables users of its financial

statements to evaluate the entity’s objectives, policies and processes for managing capital, including disclosures of

any externally imposed capital requirements and the consequences for non-compliance. These new disclosures are

included in note 14.

Financial instruments

Section 3862 on financial instrument disclosures requires the disclosure of information about the significance of

financial instruments for the entity's financial position and performance and the nature and extent of risks arising from

financial instruments to which the entity is exposed during the period and at the balance sheet date, and how the

entity manages those risks.

Section 3863 establishes standards for presentation of financial instruments and non-financial derivatives. It deals

with the classification of financial instruments, from the perspective of the issuer, between liabilities and equities, the

classification of rela ted interest, dividends, gains and losses, and circumstances in which financial assets and financial

liabilities are offset.

The adoption of these standards did not have any impact on the classification and measurements of the Corporation’s

financial instruments. The new disclosures pursuant to these new Sections are included in note 14.

General standards of financial statement presentation

The CICA amended Section 1400 of the CICA Handbook, General Standards of Financial Statement Presentation, to

include a requirement for management to make an assessment of the entity’s ability to continue as a going concern

when preparing financial statements. These changes, including the related disclosure requirements, were adopted by

the Corporation on September 1, 2008 and had no impact on the interim consolidated financial statements.

- 31 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

1. Basis of Presentation (continued)

Credit risk and fair value of financial assets and financial liabilities

On January 20, 2009, the Emerging Issues Committee (“EIC”) of the Canadian Accounting Standards Board issued

EIC Abstract 173, Credit Risk and Fair Value of Financial Assets and Financial Liabilities, which establishes guidance

requiring an entity to consider its own credit risk as well as the credit risk of the counterparty in determining the fair

value of financial assets and financial liabilities, including derivative instruments. EIC 173 is applicable to all financial

assets and liabilities measured at fair value in interim and annual financial statements for periods ending on or after

January 20, 2009 and is applicable to the Corporation for its second quarter of fiscal 2009 with retrospective

application, without restatement of prior periods, to the beginning of its current fiscal year. The adoption of this new

abstract during the second quarter decreased derivative financial instruments assets by $3.5 million, decreased future

income tax liabilities by $1 million and decreased accumulated other comprehensive income by $2.6 million at

December 1, 2008 and had no significant impact on th e consolidate d balance sheet at September 1, 2008.

Future accounting pronouncemen ts

Business combinations, consolidated financial statements and non-controlling interests

During January 2009, the CICA issued Handbook Section 1582, Business Combinations, which replaces Section

1581 of the same name, and Sections 1601, Consolidated Financial Statements and 1602, Non-Controlling Interests,

which together replace Section 1600, Consolidated Financial Statements. These new Sections harmonize significant

aspects of Canadian accounting standards with the International Financial Reporting Standards (“IFRS”) that will be

mandated for entities with fiscal year beginning on or after January 1, 2011.

Section 1582 requires that all business acquisitions be measured at the fair value of the acquired entity at the

acquisition date even if the business combination is achieved in stages, or if less than 100 percent of the equity

interest in the acquiree is owned at the acquisition date, and expands the definition of a business subject to an

acquisition. The Section also establishes new guidance on the measurement of consideration given and the

recognition and measurement of assets acquired and liabilities assumed in a business combination. Furthermore,

under this new guidance, acquisition costs, which were previously included as a component of the consideration

given, and any negative goodwill resulting from the allocation of the purchase price, which was allocated as a

reduction of non-current assets acquired under the previous standard, will be recorded in earnings in the current

period. This new Section will be applied prospectively and will only impact the Corporation’s consolidated financial

statements for future acqui sitions concluded in period s subsequent to the date of adoption.

Sections 1601 and 1602 dealing with consolidated financial statements require an entity to measure non-controlling

interest upon acquisition either at fair value or at the non-controlling interest's proportionate share of the acquiree's

identifiable net assets. The new Sections also require non-controlling interest to be presented as a separate

component of shareholders' equity.

The new standards will apply as of the beginning of the first annual reporting period beginning on or after January 1,

2011, with simultaneous early adoption permitted. Early adoption may reduce the amount of restatement required

upon conversion to IFRS. The Corporation is currently assessing the impact of these new Sections on its consolidated

financial statements.

- 32 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

1. Basis of Presentation (continued)

Harmonization of Canadian and Intern ational accounting standards

In March 2006, the Accounting Standards Board of the CICA released its new strategic plan, which proposed to

abandon Canadian GAAP and effect a complete convergence to the IFRS for publicly accountable entities.

In April 2008, the CICA published an exposure draft as guidance which requires the transition to IFRS to replace

Canadian GAAP as currently employed by Canadian publicly accountable enterprises. The changeover will occur no

later than fiscal years beginning on or after January 1, 2011. Accordingly, the Corporation expects that its first interim

consolidated financial statements presented in accordance with IFRS will be for the three-month period ending

November 30, 2011, and its first annual consolidated financial statements presented in accordance with IFRS will be

for the year ending August 31, 2012.

IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences in recognition,

measurement and disclosure requirements. The Corporation has established a project team including representatives

from various areas of the organization to plan and complete the transition to IFRS. This team reports periodically to

the Audit Committee, who oversees the IFRS implementation project on behalf of the Board of Directors. The

Corporation will be assisted by external advisors as required.

The implementation project consists of three primary phases, which may occur concurrently as IFRS are applied to

specific areas of operations:

• Scoping and diagnostic phase — This phase involves performing a high-level impact assessment to identify key

areas that are expected to be impacted by the transition to IFRS. The result of these procedures is the ranking of

IFRS impacts in order of priority to assess the timing and complexity of transition efforts that will be required in

subsequent phases.

• Impact analysis, evaluation and design phase — In this phase, each area identified from the scoping and

diagnostic phase will be addressed in order of descending priority, with project teams established as deemed

necessary. This phase involves specification of changes required to existing accounting policies, information

systems and business processes, together with an analysis of policy choices permitted under IFRS and the

development of draft IFRS financial statement content.

• Implementation and review phase — This phase includes execution of changes to information systems and

business processes, completing formal authorization processes to approve recommended accounting policy

changes and training programs across the organization, as necessary. It will culminate in the collection of financial

information necessary to compile IFRS-compliant financial statements, embedding IFRS in business processes,

eliminating any unnecessary data collection processes and finally the approval by the Audit Committee of the

IFRS consolidated financial statements. Implementation also involves additional staff training with the deployment

of revised systems.

The Corporation completed the scoping and diagnostic phase in February 2009, and is now conducting the impact

analysis, evaluation and design phase. As implications of the conversion are identified, impact on information

technology, data systems and business activities will be assessed. The Corporation’s analysis of the IFRS and the

comparison with currently applied accounting principles has identified a number of differences that may require

information system changes or which are likely to have a material impact on the consolidated financial statements of

the Corporation.

- 33 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

1. Basis of Presentation (continued)

Set out below are the main areas where changes in accounting policies are expected to have a significant impact on

the Corporation’s consolidated financial statements. The list below should not be regarded as a complete list of

changes that will result from transition to the IFRS. It is intended to highlight areas that the Corporation believes to be

the most significant; however, analysis of changes is still in process and the selection of accounting policies where

choices are available under IFRS has not been completed. We note that the regulatory bodies that promulgate the

Canadian GAAP and the IFRS have significant ongoing projects that could affect the ultimate differences between

Canadian GAAP and IFRS and their impact on the Corporation’s consolidated financial statements in future years.

The future impacts of the IFRS will also depend on the particular circumstances prevailing in those years. The

standards listed below are those existing based on current Canadian GAAP and IFRS. At this stage, the Corporation

is not able to reliably quantify the expected impacts of these differences on its consolidated financial statements. They

are as follows:

• Presentation of Financial Statements (IAS 1)

• Income Taxes (IAS 12)

• Property, Plant and Equipment (IAS 16)

• Revenue (IAS 18)

• Impairment of Assets (IAS 36)

• Business Combinations (IFRS 3)

Furthermore, IFRS 1, First-Time Adoption of International Financial Reporting Standards, provides entities adopting

IFRS for the first time with a number of optional exemptions and mandatory exceptions to the general requirement for

full retrospective application of IFRS which may differ from the requirements of the sections listed above. The

Corporation is analyzing the various accounting policy choices available and will implement those determined to be

most appropriate in the Corporation’s circumstances. The Corporation has not yet determined the aggregate financial

impact of adopting IFRS 1 on its consolidated financial statements.

The conversion project is progressing according to the establish ed plan.

- 34 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

2. 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 an d in Europ e.

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

Canada Europe Consolidated

Three months ended

February 28,

2009

February 29,

2008

February 28,

2009

February 29,

2008

February 28,

2009

February 29,

2008

$ $

Revenue 243,680

205,168

61,240

59,934 304,920

265,102

Operating costs 133,002

114,751

43,419

38,014 176,421

152,765

Management fees − COGECO Inc. 3,038

3,679

─

─ 3,038

3,679

Operating income before amortization 107,640

86,738

17,821

21,920 125,461

108,658

Amortization 45,041

36,892

21,603

19,097 66,644

55,989

Operating income (loss) 62,599

49,846

(3,782)

2,823 58,817

52,669

Financial expense (revenue) 18,088

17,206

(100)

(70)

17,988

17,136

Impairment of goodwill and intangible assets ─

─

399,648

─ 399,648

─

Income taxes 15,553

(13,130)

(15,803)

(1,248)

(250)

(14,378)

Net income (loss) 28,958

45,770

(387,527)

4,141 (358,569)

49,911

Total assets

(1)

2,288,806

2,214,840

414,358

804,315 2,703,164

3,019,155

Fixed assets

(1)

975,994

940,683

310,156

317,282 1,286,150

1,257,965

Intangible assets

(1)

1,024,822

1,027,268

─

63,774 1,024,822

1,091,042

Goodwill

(1)

116,890

44,779

370,915 161,669

487,805

Acquisition of fixed assets

(2)

54,447

47,177

7,895

12,697 62,342

59,874

(1)

At February 28, 2009 and August 31, 2008.

(2)

Includes capital leases that are excluded from the statements of cash flows.

- 35 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

2. Segmented Information (continued)

Canada Europe Consolidated

Six months ended

February 28,

2009

February 29,

2008

February 28,

2009

February 29,

2008

February 28,

2009

February 29,

2008

$ $

Revenue 481,054

401,409

123,304

115,526 604,358

516,935

Operating costs 265,529

226,054

84,626

76,207 350,155

302,261

Management fees − COGECO Inc. 9,019

8,714

─

─ 9,019

8,714

Operating income before amortization 206,506

166,641

38,678

39,319 245,184

205,960

Amortization 88,317

72,771

42,249

35,905 130,566

108,676

Operating income (loss) 118,189

93,870

(3,571)

3,414 114,618

97,284

Financial expense (revenue) 41,493

33,149

(111)

(136)

41,382

33,013

Impairment of goodwill and intangible assets ─

─

399,648

─ 399,648

─

Income taxes 25,941

(3,816)

(17,335)

(2,187)

8,606

(6,003)

Net income (loss) 50,755

64,537

(385,773)

5,737 (335,018)

70,274

Total assets

(1)

2,288,806

2,214,840

414,358

804,315 2,703,164

3,019,155

Fixed assets

(1)

975,994

940,683

310,156

317,282 1,286,150

1,257,965

Intangible assets

(1)

1,024,822

1,027,268

─

63,774 1,024,822

1,091,042

Goodwill

(1)

116,890

44,779

370,915 161,669

487,805

Acquisition of fixed assets

(2)

110,198

85,470

18,750

25,131 128,948

110,601

(1)

At February 28, 2009 and August 31, 2008.

(2)

Includes capital leases that are excluded from the statements of cash flows.

- 36 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

3. Amortization

Three months ended

Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Fixed assets 56,514 47,819 110,784 92,693

Deferred charges 6,066 5,622 11,849 10,992

Intangible assets 4,064 2,548 7,933 4,991

66,644 55,989 130,566 108,676

4. Financial expense

Three months ended

Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Interest on long-term debt 16,863 16,554 36,890 33,079

Foreign exchange losses (gains) 619 177 4,403 (858)

Amortization of deferred transaction costs 407 407 814 814

Other 99 (2)

(725)

(22)

17,988 17,136 41,382 33,013

- 37 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

5. Impairment of goodwill and intangible assets

Three months ended

Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Impairment of goodwill 339,206 ─ 339,206 ─

Impairment of intangible assets 60,442 ─ 60,442 ─

399,648 ─ 399,648 ─

In the second quarter of fiscal 2009, the competitive position of Cabovisão in the Iberian Peninsula further deteriorated

due to the continuing unfavourable economic climate and recurring intense customer promotions and advertising

initiatives from competitors in the Portuguese market at the end of the second quarter. In accordance with current

accounting standards, management considers that the continued RGU and local currency revenue decline are more

significant and persistent than expected, resulting in a decrease in the value of the Corporation’s investment in the

Portuguese subsidiary. As a result, the Corporation tested goodwill and all long-lived assets for impairment at

February 28, 2009.

Goodwill has to be tested for impairment using a two step approach. The first step consists of determining whether the

fair value of the reporting unit exceeds the net carrying amount of that reporting unit, including goodwill. In the event

that the net carrying amount exceeds the fair value, a second step is performed in order to determine the amount of

the impairment loss. The Corporation has completed its impairment tests on goodwill and has concluded that goodwill

was impaired at February 28, 2009. As a result, an impairment loss of $339.2 million was recorded in the second

quarter. Fair value of the reporting unit was determined using the discounted cash flow method. Future cash flows are

based on internal forecasts and consequently, considerable management judgement is necessary to estimate future

cash flows. Significant changes in assumptions could result in further impairments of goodwill.

Intangible assets with definite lives, such as customer relationships, must be tested for impairment by comparing the

carrying amount of the asset or group of assets to the expected future undiscounted cash flow to be generated by the

asset or group of assets. Accordingly, the Corporation has completed its impairment test on customer relationships at

February 28, 2009, and has determined that the carrying value of customer relationships exceeds its fair value. As a

result, an impairment loss of $60.4 million was reco rded in the second quarter.

- 38 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

6. Income Taxes

Three months ended

Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Current 9,629 8,070 15,574 11,259

Future (9,879)

(22,448)

(6,968)

(17,262)

(250)

(14,378)

8,606 (6,003)

The following table provides a reconciliation between Canadian statutory federal and provincial income taxes and the

consolidated income tax expen se:

Three months ended

Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Income (loss) before income taxes (358,819)

35,533 (326,412)

64,271

Combined income tax rate 32.56 % 32.97 % 32.56 % 33.51 %

Income taxes at combined income tax rate (116,831)

11,717 (106,279)

21,537

Adjustment for loss or income subject to lower or higher

tax rates

(331)

(297)

(558)

(682)

Decrease in future income taxes as a result of decreases in

substantively enacted tax rates

─

(24,002)

─

(24,002)

Decrease in income tax recovery arising from the non-

deductible impairment of goodwill

89,890

─

89,890

─

Decrease in income tax recovery arising from non-

deductible expenses

192

172

293

Effect of foreign income tax rate differences 25,632 (2,213)

24,028 (3,377)

Other 1,295 225 1,353 228

Income taxes at effective income tax rate (250)

(14,378)

8,606 (6,003)

- 39 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(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 a recon ciliation between basic and diluted earnings per share:

Three months ended

Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Net income (loss) (358,569)

49,911 (335,018)

70,274

Weighted average number of multiple voting and

subordinate voting shares outstanding

48,540,013

48,499,406

48,531,846

48,439,880

Effect of dilutive stock options

(1)

─ 300,010 ─ 318,789

Weighted average number of diluted multiple voting and

subordinate voting shares outstanding

48,540,013

48,799,416

48,531,846

48,758,669

Earnings (loss) per share

Basic (7.39)

1.03 (6.90)

1.45

Diluted (7.39)

1.02 (6.90)

1.44

(1)

The weighted average dilutive potential number of subordinate voting share, which were antidilutive for the three and six month periods ended February 28,

2009 amounted to 158,317 and 185,596. For the three and six month periods ended February 28, 2009, 240,859 and 175,178 stock options (99,797 and

98,506 in 2008) were excluded from the calculation of diluted earnings per share as the exercise price of the options was greater than the average share

price of the subordinate voting shares.

8. Goodwill and Intangible Assets

February 28, 2009 August 31, 2008

$ $

Customer relationships 35,270 101,490

Customer base

989,552 989,552

1,024,822 1,091,042

Goodwill

161,669 487,805

1,186,491 1,578,847

- 40 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

8. Goodwill and Intangible Assets (continued)

a) Intangible assets

During the first six months, intangible assets variation s we re as follows:

Customer

relationships

Customer

base

Total

$ $ $

Balance at August 31, 2008 101,490 989,552 1,091,042

Amortization (7,933) ─ (7,933)

Foreign currency translation adjustment 2,155 ─ 2,155

Impairment (note 5) (60,442) ─ (60,442)

Balance at February 28, 2009 35,270 989,552 1,024,822

b) Goodwill

During the first six months, goodwill variation wa s as follows:

Balance at August 31, 2008 487,805

Foreign currency translation adjustment 13,070

Impairment (note 5) (339,206)

Balance at February 28, 2009 161,669

- 41 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

9. Long-Term Debt

Maturity

Interest rate February 28, 2009 August 31, 2008

% $

Parent company

Term Facility

Term loan – €94,096,350 2011

2.31

(1)(4)

151,173

145,832

Term loan – €17,358,700 2011

2.31

(1)(4)

27,862

26,881

Revolving loan – €117,500,000 (€126,000,000 at August 31, 2008) 2011

2.44

(1)

189,516

196,308

Revolving loan 2011

1.86

(1)

84,839

94,375

Senior Secured Debentures Series 1 2009

6.75 149,931

149,814

Senior Secured Notes

Series A – US$150 million 2008

6.83

(2)

─

159,233

Series B 2011

7.73 174,434

174,338

Senior Secured Notes

(3)

Series A – US$190 million 2015

7.00 240,180

─

Series B 2018

7.60 54,560

─

Senior Unsecured Debenture 2018

5.94 99,777

99,768

Subsidiaries

Obligations under capital leases 2013

6.47 – 9.93 7,754

8,492

1,180,026

1,055,041

Less current portion 178,403

336,807

1,001,623

718,234

(1)

Average interest rate on debt at February 28, 2009, 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 US denominated debt.

(3)

On October 1, 2008, the Corporation issued US$190 million Senior Secured Notes Series A maturing October 1, 2015, and $55 million Senior Secured

Notes Series B maturing October 1, 2018, net of transaction costs of $2.1 million. The Senior Secured Notes Series B bear interest at the coupon rate of

7.60% per annum, payable semi-annually. The Corporation has entered into cross-currency swap agreements to fix the liability for interest and principal

payments on the Senior Secured Notes Series A in the amount of US$190 million, which bear interest at the coupon rate of 7.00% per annum, payable

semi-annually. Taking into account these agreements, the effective interest rate on the Senior Secured Notes Series A is 7.24% and the exchange rate

applicable to the principal portion of the US dollar-denominated debt has been fixed at $1.0625.

(4)

On January 22, 2009, the Corporation entered into a swap agreement with a financial institution to fix the floating benchmark interest rate with respect to

the Euro-denominated Term Loan facilities for a notional amount of €111.5 million. The interest swap rate to hedge the Term Loans has been fixed at

2.08% until their maturity of July 28, 2011. The notional value of the swap will decrease in line with the amortization schedule of the Term Loans. In

addition to the interest swap rate of 2.08%, the Corporation will continue to pay the applicable margin on these Term Loans in accordance with the Term

Facility.

- 42 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(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, non-voting, 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, non-voting, issuable in series.

Multiple voting shares, 10 votes per share.

Subordinate voting shares, 1 vote per share.

February 28, 2009 August 31, 2008

$ $

Issued

15,691,100 multiple voting shares 98,346 98,346

32,867,426 subordinate voting shares (32,826,611 at August 31, 2008) 891,715 890,543

990,061 988,889

During the first six months, subordinate voting share tran sactions were as follows:

Number of shares Amount

Balance at August 31, 2008 32,826,611 890,543

Shares issued for cash under the Employee Stock Purchase Plan and Stock Option Plan 40,815 964

Compensation expense previously recorded in contributed surplus for options exercised ─ 208

Balance at February 28, 2009 32,867,426 891,715

- 43 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(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 six months, the Corporation granted 133,381 stock options (99,084 in 2008) with

an exercise price of $34.46 ($45.59 to $49.82 in 2008) of which 29,711 stock options (22,6 83 in 2008) were granted to

COGECO Inc.’s employees. During the three and six month periods ended February 28, 2009, the Corporation

charged an amount of $79,000 and $91,000 ($97,000 and $181,000 in 2008) 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 $95,000 and $184,000 ($490,000 and $726,000 in

2008) was recorded for the three and six month periods ended Feb ruary 28, 2009.

The fair value of stock options granted for the six month period ended February 28, 2009 was $8.96 ($12.86 in 2008)

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:

2009 2008

% %

Expected dividend yield

1.40 0.90

Expected volatility

29 27

Risk-free interest rate

4.22 4.25

Expected life in years

4.0 4.0

At February 28, 2009, the Corporation had outstanding stock options providing for the subscription of 905,492

subordinate voting shares. These stock options, which include 123,067 conditional stock options, can be exercised at

various prices ranging from $7.05 to $49.82 and at various dates up to October 29, 2018. On April 6, 2009, the

Corporation cancelled 206,180 stock options which had been conditionally granted in relation with the acquisition of

Cabovisão, at a price of $26.63 per share, subject to performance criteria of Cabovisão being met. Of these options,

112,662 were conditional.

The Corporation also offers a deferred share unit plan (“DSU Plan”) which is described in the Corporation’s annual

consolidated financial statements. During the first six months, 6,282 deferred share units were awarded to the

participants in connection with the DSU Plan. Expenses of $203,000 and $158,000 were recorded for the three and

six month periods ended February 28, 2009 for the liability related to this plan.

- 44 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

11. Accumulated Other Comprehensive Income

Translation of a net

investment in self-

sustaining foreign

subsidiaries

Cash flow hedges

Total

$ $ $

Balance at August 31, 2008 15,660 (306) 15,354

Other comprehensive income (loss) 11,393 (3,747) 7,646

Balance at February 28, 2009 27,053 (4,053) 23,000

12. Statements of Cash Flows

a) Changes in non-cash operating items

Three months ended Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $ $

Accounts receivable 2,257 (3,977)

692 (4,420)

Income taxes receivable (3,083)

(129)

(6,916)

(28)

Prepaid expenses (1,387)

(766)

10 569

Accounts payable and accrued liabilities 15,366 6,493 (28,093)

(32,499)

Income tax liabilities 7,029 6,225 (9,873)

8,841

Deferred and prepaid income and other liabilities (828)

(2,128)

398 (1,153)

19,354 5,718 (43,782)

(28,690)

b) Other information

Three months ended Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $ $

Fixed asset acquisitions through capital leases 219 1,373 1,158 1,446

Interest paid 12,217 10,962 33,714 31,884

Income taxes paid 5,680 2,473 32,366 2,473

- 45 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

13. Employees 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 related to these plans are as follows:

Three months ended Six months ended

February 28, 2009 February 29, 2008 February 28, 2009 February 29, 2008

$ $

Contributory defined benefit pension plans 346 282 692 564

Defined contribution pension plan and collective registered

retirement savings plan

880

749

1,776

1,439

1,226 1,031 2,468 2,003

14. Financial and Capital Management

a) Financial management

Management’s objectives are to protect Cogeco Cable Inc. and its subsidiaries against material economic exposures

and variability of results, and against certain financial risks including credit risk, liquidity risk, interest rate risk and

foreign exchange risk.

Credit risk

Credit risk represe nts the risk of financial lo ss for the C orpor ation if a customer or counterpart to a financial asset fails

to meet its contractual obligations. The Corporation is exposed to credit risk arising from the derivative financial

instruments, cash and cash equivalents and trade accounts receivable, the maximum exposure of which is

represented by the carrying amounts reported on the balance sheet.

Credit risk from the derivative financial instruments arises from the possibility that counterparts to the cross-currency

swap and interest rate swap agreements may default on their obligations in instances where these agreements have

positive fair values for the Corporation. The Corporation reduces this risk by completing transactions with financial

institutions that carry a credit rating equal to or superior to its own credit rating. The Corporation assesses the

creditworthiness of the counterparts in order to minimize the risk of counterparts default under the agreements. At

February 28, 2009, management believes that the credit risk relating to its swaps is minimal, since the lowest credit

rating of the counterparts to the agreements is A

Cash and cash equivalents consist mainly of highly liquid investments, such as money market deposits. The

Corporation has deposited the cash and cash equivalents with reputable financial institutions, from which

management believes the risk of loss to be remote.

- 46 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

14. Financial and Capital Management (continued )

The Corporation is also exposed to credit risk in relation to its trade accounts receivable. In the current global

economic environment, the Corporation’s credit exposure is higher but it is difficult to predict the impact this could

have on the Corporation’s accounts receivable balances. To mitigate such risk, the Corporation continuously monitors

the financial condition of its customers and reviews the credit history or worthiness of each new major customer. At

February 28, 2009, no customer balance represents a significant portion of the Corporation’s consolidated trade

receivables. The Corporation establishes an allowance for doubtful accounts based on specific credit risk of its

customers by examining such factors as the number of overdue days of the customer’s balance outstanding as well

as the customer’s collection history. The Corporation believes that its allowance for doubtful accounts is sufficient to

cover the related credit risk. The Corporation has credit policies in place and has established various credit controls,

including credit checks, deposits on accounts and advance billing, and has also established procedures to suspend

the availability of services when customers have fully ut ilized approved credit limits or have violated existing payment

terms. Since the Corporation has a large and diversified clientele dispersed throughout in it’s market area in Canada

and Portugal, there is no significant concentration of credit risk. The following table provides further details on the

Corporation’s accounts receivable balances:

February 28, 2009 August 31, 2008

$ $

Trade accounts receivable 71,071 66,559

Allowance for doubtful accounts

(16,172) (12,357)

54,899 54,202

Other accounts receivable

4,531 5,380

59,430 59,582

The following table provides further details on trade accounts receivable, net of allowance for doubtful accounts.

Trade accounts receivable past due is defined as amount outstanding beyond normal credit terms and conditions for

the respective customers. A large portion of the Corporation’s customers are billed in advance and are requ ired to pay

before their services are rendered. The Corporation considers amount outstanding at the due date as trade accounts

receivable past due.

February 28, 2009 August 31, 2008

$ $

Net trade accounts receivable not past due 40,416 40,945

Net trade accounts receivable past due

14,483 13,257

54,899 54,202

- 47 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

14. Financial and Capital Management (continued )

Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The

Corporation manages liquidity risk through the management of its capital structure and access to different capital

markets. It also manages liquidity risk by continuously monitoring actual and projected cash flows to ensure sufficient

liquidity to meet its obligations when due. At February 28, 2009, the available amount of the Corporation’s Term

Facility was $408.2 million. Management believes that the committed Term Facility will, until its maturity in July 2011,

provide sufficient liquidity to manage its long-term debt maturities and support working capital requirements.

The following table summa rize s the contractual maturities of the financial liabilities and related capital amounts:

2009 2010 2011 2012 2013 Thereafter Total

(six months) (twelve months) (twelve months) (twelve months) (twelve months)

$ $ $ $ $ $ $

Bank indebtedness 34,562 − − − − − 34,562

Accounts payable and accrued liabilities 222,599 − − − − − 222,599

Long-term debt

(1)

175,295 42,158 386,829 175,000 − 396,737 1,176,019

Derivative financial instruments

Cash outflows (Canadian dollar) − − − − − 201,875 201,875

Cash inflows (Canadian dollar

equivalent of US dollar)

−

(241,737)

Obligations under capital leases

(2)

2,323 3,197 1,992 1,258 50 − 8,820

434,779 45,355 388,821 176,258 50 356,875 1,402,138

(1)

Principal excluding obligations under capital leases.

(2)

Including interest.

The following table is a summary of interest payable on long-term debt (excluding interest on capital leases) that are

due for each of the next five years and thereafter, based on the principal and interest rate prevailing on the current

debt at February 28, 2009 and their resp ective maturities:

2009 2010 2011 2012 2013 Thereafter Total

(six months) (twelve months) (twelve months) (twelve months) (twelve months)

$ $ $ $ $ $ $

Interest payments on long-term debt 27,943 50,256 48,629 29,292 27,038 83,214 266,372

Interest payments on derivative

financial instruments

9,787

18,880

17,523

14,614

30,445

105,863

Interest receipts on derivative financial

instruments

(10,490)

(20,412)

(19,302)

(16,922)

(35,253)

(119,301)

27,240 48,724 46,850 26,984 24,730 78,406 252,934

- 48 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

14. Financial and Capital Management (continued )

Interest rate risk

The Corporation is exposed to interest rate risks for both fixed interest rate and ﬂoating interest rate instruments.

Fluctuations in interest rates will have an effect on the valuation and collection or repayment of these instruments. At

February 28, 2009, all of the Corporation’s long-term debt was at fixed rate, except for the Corporation’s Term Facility.

On January 22, 2009, the Corporation entered into a swap agreement with a financial institution to fix the floating

benchmark interest rate with respect to the Euro-denominated Term Loan facilities for a notional amount of

€111.5 million. The interest swap rate to hedge the Term Loans has been fixed at 2.08% until their maturity of July 28,

2011. The notional value of the swap will decrease in line with the amortization schedule of the Term Loans. In

addition to the interest swap rate of 2.08%, the Corporation will continue to pay the applicable margin on these Term

Loans in accordance with the Term Facility. The Corporation elected to apply cash flow hedge accounting on this

derivative financial instrument. The sensitivity of the Corporation’s annual financial expense to a variation of 1% in the

interest rate applicable to the Term Facility is approximately $2.7 million based on the current debt at February 28,

2009 and taking into consi deration the effect of the interest rate swap agreemen t.

Foreign exchange risk

The Corporation is exposed to foreign exchange risk related to its long-term debt denominated in US dollars. In order

to mitigate this risk, the Corporation has established guidelines whereby currency swap agreements can be used to fix

the exchange rates applicable to its US dollar denominated long-term debt. All such agreements are exclusively used

for hedging purposes. Accordingly, on October 2, 2008, the Corporation entered into cross-currency swap agreements

to set the liability for interest and principal payments on its US$190 million Senior Secured Notes Series A issued on

October 1, 2008. These agreements have the effect of converting the US interest coupon rate of 7.00% per annum to

an average Canadian dollar interest rate of 7.24% per annum. The exchange rate applicable to the principal portion of

the debt has been fixed at $1.0625. The Corporation elected to apply cash flow hedge accounting on these derivative

financial instruments.

The Corporation is also exposed to foreign exchange risk on cash and cash equivalents, bank indebtedness and

accounts payable denominated in US dollars or Euros. At February 28, 2009, bank indebtedness denominated in US

dollars amounted to US$1,451,000 (US$286,000 at August 31, 2008) while accounts payable denominated in US

dollars amounted to US$7,580,000 (US$16,121,000 at August 31, 2008). At February 28, 2009, Euro-denominated

cash and cash equivalents amounted to €736,000 (€219,000 at August 31, 2008) while accounts payable

denominated in Euros amounted to €134,000 (€163,000 at August 31, 2008). Due to their short-term nature, the risk

arising from fluctuations in foreign exchange rates is usually not significant, except for the unusual high volatility of the

US dollar compared to the Canadian dollar during the first six months of fiscal 2009. During the six month period

ended February 28, 2009, the exchange rate increased from $1.0620 at August 31, 2008, to $1.2723 at

February 27, 2009, reaching a high of $1.2935 on November 20, 2008. The impact of a 10% change in the foreign

exchange rates (US dollar and Euros) would change financial expe nse by approximately $1.1 million.

Furthermore, the Corporation’s net investment in self-sustaining foreign subsidiaries is exposed to market risk

attributable to fluctuations in foreign currency exchange rates, primarily changes in the values of the Canadian dollar

versus the Euro. This risk is mitigated since the major part of the purchase price for Cabovisão-Televisão por Cabo,

S.A. was borrowed directly in Euros. At February 28, 2009, the net investment amounted to €196,758,000

(€446,051,000 at August 31, 2008) while long-term debt denominated in Euros amounted to €228,955,000

(€237,455,000 at August 31, 2008). The exchange rate used to convert the Euro currency into Canadian dollars for

the balance sheet accounts at February 28, 2009 was $1.6129 per Euro compared to $1.5580 per Euro at August 31,

2008. The impact of a 10% change in the exchange rate of the Euro into Canadian dollars would change financial

expense by approximately $1.0 million and other comprehensive income by approximately $5.2 million.

- 49 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

14. Financial and Capital Management (continued )

Fair value

Fair value is the amount at which willing parties would accept to exchange a financial instrument based on the current

market for instruments with the same risk, principal and remaining maturity. Fair values are estimated at a specific

point in time, by discounting expected cash flows at rates for debts of the same remaining maturities and conditions.

These estimates are subjective in nature and involve uncertainties and matters of significant judgement, and

therefore, cannot be determined with precision. In addition, income taxes and other expenses that would be incurred

on disposition of these financial instruments are not reflected in the fair values. As a result, the fair values are not

necessarily the net amounts that would be realized if these instruments were settled. The carrying value of all of the

Corporation’s financial instruments appro x imates fair value, except as otherwise noted in the following table:

February 28, 2009 August 31, 2008

Carrying value Fair value Carrying value Fair value

Long-term debt 1,180,026 1,149,318 1,055,041 1,049,329

b) Capital management

The Corporation’s objectives in managing capital are to ensure sufficient liquidity to support the capital requirements

of its various businesses, including growth opportunities. The Corporation manages its capital structure and makes

adjustments in light of general economic conditions, the risk characteristics of the underlying assets and the

Corporation’s working capital requirements. Management of the capital structure involves the issuance of new debt,

the repayment of existing debts using cash generated by operations and the level of distribution to shareholders.

The capital structure of the Corporation is composed of shareholders’ equity, bank indebtedness, long-term debt and

assets or liabilities related to derivative financial instruments.

The provisions under the Term Facility provide for restrictions on the operations and activities of the Corporation.

Generally, the most significant restrictions relate to permitted investments and dividends on multiple and subordinate

voting shares, as well as incurrence and maintenance of certain financial ratios primarily linked to the operating

income before amortization, financial expense and total Indebtedness. At February 28, 2009, the Corporation was in

compliance with all of its debt covenants and was not subject to any other externally imposed capital requirements.

- 50 -

COGECO CABLE INC.

Notes to Consolidated Financial Statements

February 28, 2009

(unaudited)

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

14. Financial and Capital Management (continued )

The following table summarizes certain of the key ratios used by management to monitor and manage the

Corporation’s capital structure:

February 28, 2009 August 31, 2008

Net indebtedness

(1)

/ Shareholders’ equity 1.2 0.8

Net indebtedness

(1)

/ Operating income before amortization

(2)

2.3 2.5

Operating income before amortization / Financial expense

(3)

5.9 6.4

(1)

Net indebtedness is defined as the total of bank indebtedness, long-term debt and derivative financial instrument liability, less cash and cash equivalents and

assets related to derivative financial instruments.

(2)

Calculation based on operating income before amortization for the last twelve month period ended February 28, 2009.

(3)

Calculation based on operating income before amortization for the six month period ended February 28, 2009 and twelve month period ended August 31,

2008.

15. Comparative figures

Certain comparative figures have been reclassified to conform to the current year’s presentation to reflect the

reclassification of foreign exchan ge gains or losses from operating costs to financial expense.

Back to press release

Press release details

SOLID GROWTH IN CANADIAN OPERATIONS LEAD COGECO CABLE TO STRONG RESULTS DESPITE A NON-CASH IMPAIRMENT IN ITS EUROPEAN OPERATIONS INTANGIBLE ASSETS

SUSTAINABILITY

Cogeco Fund

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