Cogeco Câble inc.
TSX : CCA

April 11, 2005 08:53 ET

Cogeco Cable Inc. Continues to Improve its Operating Margin, Reports Strong Free Cash Flow and Increasing Net Income

MONTREAL, April 11 - Cogeco Cable Inc. (TSX: CCA.SV)
disclosed its financial results for the second quarter of fiscal 2005, ended
February 28, 2005.

Strong digital-service customer expansion
-----------------------------------------

"Our customers are continuously looking for new digital services. With
the addition of Fox News in Ontario, the integration of Sony Pictures
Television International's movie library on our video-on-demand service and
the launch of high definition television service in Québec, Cogeco Cable
customers enjoy an enriched product offering, in line with consumer
expectations for more on demand services", said Mr. Louis Audet, President and
CEO, Cogeco Cable Inc.

Continued high-speed Internet growth
------------------------------------

Cogeco Cable's high-speed Internet services continue to show significant
growth due to an enhanced offering. Our high-speed Internet service includes
F-Secure, the best security products available on the market, and the fastest
Internet speed. "Results indicate that our clients are pleased to have access,
free of charge, to this new security product", added Mr. Audet.

Operating margin on the rise
----------------------------

"Our financial performance is progressing as expected. The 40 % margin
leads to strong net income growth and continued Free Cash Flow. Our
development is on track and our new digital telephony services offering should
fulfill customer expectations soon", concluded Mr. Audet.



FINANCIAL HIGHLIGHTS


($000s, except Three months ended Six months ended
percentages (unaudited) (unaudited)
and per
share data)
February February % Change February February % Change
28, 2005 29, 2004 28, 2005 29, 2004
(restated (restated
(1)) (1))
--------- --------- --------- --------- --------- ----------
Revenue $138,389 $ 131,574 5.2 $ 274,155 $ 261,063 5.0
Operating
income
before 55,297 50,413 9.7 108,491 97,627 11.1
amortiza-
tion
Net income
(loss) 5,613 588 -- 9,440 (40,515) --

Cash flow
from
operations $ 41,675 $ 35,278 18.1 $ 80,867 $ 67,160 20.4
Less:
Capital
expendi-
tures and
increase
in defer-
red
charges 29,941 22,357 33.9 53,720 42,561 26.2
------ ------ ------ ------
Free Cash
Flow (2) 11,734 12,921 (9.2) 27,147 24,599 10.4

Per share
data
Basic net
income
(net loss) $ 0.14 $ 0.01 -- $ 0.24 $ (1.02) --
Cash flow
from
operations 1.04 0.88 18.2 2.02 1.68 20.2



(1) During the third quarter of fiscal 2004, Cogeco Cable adopted new
accounting standards regarding the timing of revenue recognition and
certain related costs and the classification of certain items such as
revenue, expense or capitalized costs. These changes were made on a
retroactive basis in accordance with Abstracts 141 and 142 issued by
the Canadian Institute of Chartered Accountants' (CICA) Emerging
Issues Committee (EIC). See "Accounting Policies and Estimates" of
the accompanying Management's Discussion and Analysis (MD&A) for a
detailed description of these new accounting standards implemented on
a retroactive basis.
(2) Free Cash Flow is defined as cash flow from operations less capital
expenditures (including assets acquired under capital leases - as per
Note 7 b) in the accompanying Financial Statements - not reflected in
the statements of cash flow) and increase in deferred charges. Free
Cash Flow is not a defined term under Generally Accepted Accounting
Principles (GAAP) and should be treated accordingly.


MANAGEMENT'S DISCUSSION AND ANALYSIS

Certain statements in this analysis may constitute forward-looking
statements that involve risks and uncertainties. Future results will be
affected by a number of factors with respect to technology, markets,
competition and regulations including factors described in the section
"Uncertainties and main risk factors" of this MD&A and the Corporation's 2004
annual MD&A. Therefore, actual results may be materially different from those
expressed or implied by such forward-looking statements.

This analysis should be read in conjunction with the Corporation's
financial statements and the notes thereto prepared in accordance with
Canadian GAAP and the MD&A included in the Corporation's Annual Report.
Throughout this discussion, all amounts are in Canadian dollars unless
otherwise indicated.



CUSTOMER STATISTICS

Net additions (losses)
Second quarter First six months
ended ended
---------------- -----------------
February 28,
2005 2005 2004 2005 2004
--------- --------- --------- --------- ----------
Revenue-generating
units (2) 1,343,673 24,419 26,008 66,356 63,568
Basic-service
customers 830,847 (751) 1,552 6,992 8,791
High-speed Internet
customers (3) 274,606 12,781 12,610 29,580 30,049
Digital terminals (4) 279,223 17,310 14,781 39,152 30,398


% of Penetration (1)
--------------------
February February
28, 2005 29, 2004
--------- ----------
Revenue-generating
units (2)
Basic-service
customers
High-speed Internet
customers (3) 37.9 32.3
Digital terminals (4) 34.3 26.3


(1) As a percentage of basic-service customers in areas served.
(2) Including basic-service, Internet-service and digital-service
customers.
(3) Including pending orders, the number would amount to 276,682 as at
February 28, 2005 compared to 264,064 as at November 30, 2004.
Customers subscribing only to Internet services amounted to 56,824 as
at February 28, 2005 compared to 54,584 customers as at November 30,
2004.
(4) 74% of terminals as at February 28, 2005 were purchased compared to
84% a year earlier.


During the second quarter, revenue-generating units grew as a result of
strong demand for digital and high-speed Internet services. The stronger-than-
expected growth in digital-service customers is mainly attributable to the
success of an attractive digital terminal rental plan launched in the fourth
quarter of fiscal 2004 and the launch of subscription video-on-demand, free of
charge, to most digital pay television customers last November and December.
Management has revised upward its digital terminal additions, as further
discussed in the "Fiscal 2005 Financial Guidance" section, in light of the
strong demand in the first six months and the following enhancements to the
digital offering:



- In January, Fox News was added to the digital channel line-up in
Ontario.

- In February, High Definition (HD) programming was launched in Québec
and is now offered to 88% of Cogeco Cable's customer base.

- In February, Cogeco Cable announced a multi-year agreement with Sony
Pictures Television International which, along with other video-on-
demand programming providers, gives access to nearly 50% of domestic
box-office receipts.

The addition of High-speed Internet customers in the second quarter was
slightly higher than last year due to the following initiatives:

- The Lite service was launched in Ontario last July and in Québec last
January to new and more cost-conscious customers.

- Internet security services are now offered free of charge to all
standard and pro Internet customers in Ontario and will be offered to
Québec customers during the third quarter.

In the second quarter, basic service customers decreased slightly.
However, Cogeco Cable is maintaining its fiscal 2005 guideline of adding up to
2,500 basic service customers given that it gained 6,992 customers for the
first six months.


ACCOUNTING POLICIES AND ESTIMATES

Revenue Recognition

During the third quarter of fiscal 2004, Cogeco Cable adopted the CICA's
EIC Abstracts 141 and 142 issued in December 2003, regarding the timing of
revenue recognition and certain related costs and the classification of
certain items such as revenue, expense or capitalized costs. Consequently,
Cogeco Cable adopted the following changes on a retroactive basis:

- Installation revenues are now deferred and amortized over the average
life of a customer subscription, which is four years. Previously, these
revenues were recognized immediately as they were considered a partial
recovery of direct selling costs incurred. Upon billing, the portion of
unearned revenue is now recorded as deferred and prepaid income.

- The costs to reconnect customers are now recorded as deferred charges
up to a maximum amount not exceeding the revenue generated by the
reconnect activity, which are included in installation revenues, and
amortized over the average life of a customer subscription, which is
four years. Previously, these costs, which include materials, direct
labour and certain overhead charges, were capitalized to fixed assets
and generally amortized over a period of five years.

- Revenue from the sale of home terminal devices at a subsidized price,
which were recorded as a partial recovery of costs, are now recorded as
equipment revenue with an equal amount included in operating costs.

- The portion of advertising expense incurred to expand the digital and
high-speed Internet customer base that used to be recorded as a
deferred charge is now recorded as an operating cost.

The above changes had the following impact on our financial results for
the second quarter and first six months of fiscal 2004:


Periods ended
February 29, 2004 Three months Six months
----------------------- ----------------------
($000s, except
percentages and Before After Before After
per share data) restatement restatement restatement restatement
----------- ----------- ----------- -----------
Revenue $ 129,039 $ 131,574 $ 257,111 $ 261,063
Operating income before
amortization 51,897 50,413 102,129 97,627
Operating margin 40.2% 38.3% 39.7% 37.4%
Amortization 31,314 32,355 73,594 75,668
Income taxes 3,495 2,703 36,809 32,802
Net income (net loss) 2,321 588 (37,946) (40,515)
Basic net income
(net loss) per share 0.06 0.01 (0.95) (1.02)


Amortization of Long-term Assets

In the first quarter of fiscal 2004, the Corporation reviewed the useful
life of its digital terminals, cable modems and certain other long-term
assets. The useful life of digital terminals was reduced from seven to five
years, while the useful life of cable modems was reduced from seven to three
years. These changes in accounting estimates, applied prospectively, increased
amortization expense by $14 million for the first quarter of fiscal 2004.

Asset Retirement Obligations

In March 2003, the CICA issued Handbook section 3110, Asset Retirement
Obligations, which provides guidance for the recognition, measurement and
disclosure of liabilities for asset retirement obligations and the associated
asset retirement costs. Some of Cogeco Cable's lease agreements contain
provisions requiring the Corporation to restore facilities or remove equipment
in the event that the lease agreement is not renewed. However, Cogeco Cable
expects to renew most of its lease agreements related to the continued
operation of the cable business and consequently, the liabilities related to
the removal provisions on non-renewed leases, if any, are considered not
material to the consolidated financial statements. In addition, in the
unlikely event that some of these lease agreements are not renewed, the
liability would be difficult to estimate since there is a wide range of
potential expiration dates for these lease agreements.

Variable Interest Entities

In June 2003, the CICA issued Accounting Guideline 15 ("AcG-15"),
Consolidation of Variable Interest Entities, which defines Variable Interest
Entities ("VIE") as entities that have insufficient equity or whose equity
investors lack one or more specified essential characteristics of a
controlling financial interest. The standard provides guidance for determining
when an entity is a VIE and who, if anyone, should consolidate the VIE. During
the second quarter, the Corporation completed its evaluation and concluded
that it had no VIE.

No other significant changes in critical accounting policies and
estimates occurred since August 31, 2004 and such policies and estimates are
described in the Corporation's 2004 annual MD&A.

RELATED PARTY TRANSACTIONS

Cogeco Cable is a subsidiary of COGECO, which holds 39.3% of the
Corporation's equity shares. Under a management agreement, the Corporation
pays to COGECO monthly fees equal to 2% of its total revenue for certain
executive, administrative, legal, regulatory, strategic and financial planning
services and additional services. For fiscal 2005, the management fee has been
set at a maximum of $8.2 million. Cogeco Cable granted 38,397 stock options to
COGECO Inc.'s employees during the first quarter of fiscal 2005 and none
during the second quarter of fiscal 2005 compared to 34,237 and 13,800 during
the first and second quarters of fiscal 2004, respectively. Further details
regarding the management agreement and stock options granted to COGECO Inc.'s
employees are provided in the Corporation's 2004 annual MD&A. There were no
other material related party transactions during the first six months of
fiscal 2004 and 2005.



OPERATING RESULTS

($000s, except Three months ended Six months ended
percentages)
February February % Change February February % Change
28, 2005 29, 2004 28,2005 29,2004
(restated) (restated)
--------- --------- --------- --------- --------- ----------
Revenue $ 138,389 $ 131,574 5.2 $ 274,155 $ 261,063 5.0

Operating
costs 80,328 78,576 2.2 160,185 158,289 1.2
Management
fees -
COGECO Inc. 2,764 2,585 6.9 5,479 5,147 6.5

Operating
income
before
amortization 55,297 50,413 9.7 108,491 97,627 11.1

Operating
margin 40.0% 38.3% 39.6% 37.4%


Revenue

Revenue for the second quarter rose by $6.8 million or 5.2% compared to
the same period last year. Revenue growth for the second quarter and first six
months is mainly attributable to rate increases implemented effective last
June 15 in Ontario and August 1st 2004 in Québec and the improved high-speed
Internet access penetration rate, as mentioned in the "Customer Statistics"
section. An average monthly rate increase of approximately $0.74 per basic-
analog-service customer was implemented in both Ontario and Québec. A monthly
digital basic rate hike of $4 was implemented in Québec. In addition, the
monthly rate for the pay television package rose by $3, and other limited
selective tier service rate increases have been implemented in Ontario.

Operating Costs

For the second quarter and first six months, network fees declined
compared to the same periods in fiscal 2004. This decline is partly
attributable to lower IP (Internet Protocol) transport costs despite double-
digit growth in high-speed Internet customers.

Other operating costs have increased in the second quarter and first six
months compared to the same periods last year. Higher customer care expenses
were incurred in the first and second quarters to service a 7.6% and 7.3% year-
over-year expansion of revenue-generating units, respectively. In the second
quarter, additional sales and marketing expenditures were incurred to further
promote Cogeco Cable's services.

Operating Income before Amortization

Operating income before amortization improved by 9.7% in the second
quarter compared to the same period in fiscal 2004, as a result of revenue
growth and lower network fees. Cogeco Cable's operating margin increased from
38.3% to 40%.



FIXED CHARGES

Three months ended Six months ended
($000s, except
percentages)
February February % Change February February % Change
28,2005 29,2004 28,2005 29,2004
(restated) (restated)
--------- --------- --------- --------- --------- ----------
Amortization $ 31,988 $ 32,355 (1.1)$ 64,232 $ 75,668 (15.1)

Financial
expense $ 13,840 $ 14,767 (6.3)$ 27,734 $ 29,672 (6.5)


Amortization in first six months amounted to $64.2 million compared to
$61.7 million for the same period last year, excluding the effect of an
increase in amortization related to a revision in the estimated useful lives
of home terminal devices and certain other long-term assets. Increased
amortization in the first six months stemmed mainly from capital expenditures
linked to digital services.

The decline in financial expense was mainly related to lower levels of
Indebtedness (defined as bank indebtedness and long-term debt) during the
first six months compared to the same period last year as a result of Free
Cash Flow generated.

INCOME TAXES

Income taxes in the second quarter amounted to $3.9 million compared to
$2.7 million for the same period last year. Income taxes in the first six
months amounted to $7.1 million compared to $5.2 million for the same period
last year, excluding the effect of non-cash income tax adjustments described
below. The income tax increases were mainly attributable to growth in
operating income before amortization.

During the first quarter of fiscal 2004, the Ontario government announced
that corporate income tax rates would increase to 14% effective January 1,
2004. Prior to this announcement the tax rate was to decline from 11% in 2004
to 8% in 2007. As a result, a $32.5 million non-cash adjustment was recorded
in the first quarter of fiscal 2004 for future income tax liabilities. This
amount was partly offset by a non-cash reduction of future income taxes of
$4.9 million for the first quarter of fiscal 2004. This reduction of future
income taxes was related to the decline in carrying value of home terminal
devices and certain other long-term assets.

NET INCOME (LOSS)

Net income for the second quarter amounted to $5.6 million, or $0.14 per
share, compared to $0.6 million, or $0.01 per share, for the same period last
year. The $40.5 million net loss for the first six months of fiscal 2004 was
attributable to the non-cash adjustments for amortization and income taxes
totaling $41.6 million as previously discussed. Excluding these elements, the
Corporation would have recorded a net income of $1.1 million in the first six
months of fiscal 2004 compared to $9.4 million for the first six months of
fiscal 2005.



CASH FLOW AND LIQUIDITY

Three months ended Six months ended
($000s)
February February February February
28,2005 29,2004 28,2005 29,2004
(restated) (restated)
----------- ----------- ----------- -----------
Operating Activities
Cash flow from
operations $ 41,675 $ 35,278 $ 80,867 $ 67,160
Net changes in
non-cash working
capital items and
long-term deferred
and prepaid income 10,552 3,384 (22,454) (28,662)
----------- ----------- ----------- -----------
$ 52,227 $ 38,662 $ 58,413 $ 38,498
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Investing Activities (1) $ (29,916) $ (22,330) $ (53,693) $ (42,435)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Financing Activities $ (22,311) $ (16,332) $ (4,720) $ 3,937
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------



(1) Excludes assets acquired under capital leases.

During the second quarter, cash flow from operations was greater than
last year by $6.4 million or 18.1% mainly due to growth in operating income
before amortization. Cash inflows from changes in non-cash working capital
items and long-term deferred and prepaid income were greater than the same
period last year, as accounts payable and accrued liabilities increased by a
greater amount.

Investing activities, including capital expenditures segmented according
to the National Cable Television Association (NCTA) standard reporting
categories, are as follows:


Three months ended Six months ended
($000s)
February February February February
28,2005 29,2004 28,2005 29,2004
(restated) (restated)

----------- ----------- ----------- -----------
Customer Premise
Equipment (1) $ 15,386 $ 3,844 $ 26,690 $ 10,216
Scalable Infrastructure 2,801 4,780 5,206 6,093
Line Extensions 1,991 2,723 4,768 4,943
Upgrade / Rebuild 5,938 4,027 10,384 7,902
Support Capital 693 1,661 1,335 2,629
----------- ----------- ----------- -----------
Total Capital
Expenditures (2) $ 26,809 $ 17,035 $ 48,383 $ 31,783
----------- ----------- ----------- -----------
Deferred charges 3,132 5,322 5,337 10,778
Others (25) -- (27) --
----------- ----------- ----------- -----------
Total investing
activities $ 29,916 $ 22,357 $ 53,693 $ 42,561
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------


(1) Includes mainly digital terminals and cable modems but also new and
replacement drops.
(2) Includes capital leases, which are excluded from the statements of
cash flow.


The number of digital terminals rented by Cogeco Cable's customers
increased as a result of various initiatives described under the "Customer
Statistics" section above. Consequently, lower deferred charges were
attributable to lower equipment subsidies given that most of the new digital
customers have decided to rent their terminals and higher capital expenditures
were mainly related to increased purchases of digital terminals rented to
customers.

Free Cash Flow of $11.7 million and $27.1 million was generated during
the second quarter and first six months, respectively, as a result of
increasing cash flow from operations partly offset by increased capital
expenditures.

During the second quarter, long-term debt and bank indebtedness declined
by $21.8 million mainly due to generated Free Cash Flow of $11.7 million and
an increase in non-cash working capital items and long-term deferred and
prepaid income of $10.6 million. For the same period last year, long-term debt
and bank indebtedness declined by $16.5 million essentially due to generated
Free Cash Flow of $12.9 million and an increase in non-cash working capital
items and long-term deferred and prepaid income of $3.4 million. A dividend of
$0.02 per share for subordinate and multiple voting shares, totaling
$0.8 million, was paid during the second quarter of fiscal 2005 and no
dividends were paid in fiscal 2004.

During the first six months, long-term debt and bank indebtedness
declined by $3.8 million mainly due to generated Free Cash Flow of
$27.1 million partly offset by a decline in non-cash working capital items and
long-term deferred and prepaid income of $22.5 million. For the same period
last year, long-term debt and bank indebtedness increased by $3.8 million
essentially due to a decrease in non-cash working capital items and long-term
deferred and prepaid income of $28.7 million partly offset by generated Free
Cash Flow of $24.6 million. Dividends totaling $1.6 million were paid during
the first six months of fiscal 2005 and no dividends were paid in fiscal 2004.

As at February 28, 2005, the Corporation had utilized $45 million of its
$270 million Term Facility. Based on existing bank covenants, Cogeco Cable had
access to the entire committed amount under the Term Facility. Going forward,
Cogeco Cable expects to generate higher Free Cash Flow and thus further reduce
its leverage ratios.

DIVIDEND DECLARATION

At its April 8, 2005 meeting, the Board of Directors of Cogeco Cable
declared a quarterly dividend of $0.02 per share for subordinate and multiple
voting shares, payable on May 6, 2005, to shareholders on record on April 22,
2005.

FINANCIAL POSITION

Since August 31, 2004, significant changes in the balance sheet include
accounts payable and accrued liabilities. Accounts payable and accrued
liabilities declined by $24.7 million as use of working capital was managed
tightly at fiscal year-end.

A description of Cogeco Cable's share data as of February 28, 2005 is
presented in the table below:


Number
of shares/ Amount
options ($000s)
----------- -----------
Common Shares
Multiple voting shares 15,691,100 98,346
Subordinate voting shares 24,285,114 531,743

Options to Purchase Subordinate
Voting Shares
Outstanding options 599,095
Exercisable options 323,000


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 have not materially changed
since August 31, 2004 and are described in the 2004 annual MD&A.

FOREIGN EXCHANGE MANAGEMENT

Cogeco Cable has entered into cross-currency swap agreements to fix the
liability for interest and principal payments on its US$150 million Senior
Secured Notes. These agreements have the effect of converting the US interest
coupon rate of 6.83% per annum to an average Canadian dollar fixed interest
rate of 7.254% per annum. The exchange rate applicable to the principal
portion of the debt has been fixed at CDN$1.5910. Amounts due under the
US$150 million Senior Secured Notes Series A increased by CDN$7.1 million
during the second quarter due to the Canadian dollar's depreciation. Since the
Senior Secured Notes Series A are fully hedged, the increase is fully offset
by a decline in deferred credit described in Note 4 in the second quarter
interim financial statements. The $53.6 million deferred credit represents the
difference between the quarter-end exchange rate and the exchange rate on the
cross-currency swap agreements, which determines the liability for interest
and principal payments on the Senior Secured Notes Series A.

FISCAL 2005 FINANCIAL GUIDELINES

Given the strong demand for digital terminals during the first six months
and various service enhancements offered recently, Cogeco Cable has revised
upward its guideline for digital terminal additions from a range of 40,000 to
45,000 to a new range of 55,000 to 60,000. As a result, Cogeco Cable will have
to purchase more digital terminals and is raising its capital expenditures
guideline from $114 million to $119 million. About a third of the expected
increase in demand should come from HD/DVR (Digital Video Recorder) terminals.

During the fourth quarter, Cogeco Cable will implement monthly rate
increases of up to $2.50 per customer that will result in an average of
approximately $0.50 per basic-service customer in Ontario and Québec. Rate
increases are not expected to have a significant impact in fiscal 2005.
Furthermore, since economic and industry factors described in the 2004 annual
MD&A remain substantially unchanged, management is maintaining its fiscal 2005
financial results guidance as well as its basic-service and high-speed
Internet customer forecast. Cogeco Cable is also maintaining its guideline for
generated Free Cash Flow of $45 to $50 million.

Cogeco Cable plans to launch digital telephony by the fourth quarter of
fiscal 2005 in selected markets. Since the business plan has not been
finalized, this service's revenue and operating expense are not included in
the financial guidelines. However, initial capital expenditures of $5 million
have been included in the guidelines

RISK FACTORS AND UNCERTAINTIES

In 2004, the Canadian Radio-television and Telecommunications Commission
modified the carriage status of TSN (The Sports Network) and RDS (Réseau des
sports). Following this decision, Cogeco Cable signed in March 2005 a new
multi-year affiliation agreement to continue carriage of these specialty
television services as part of the basic cable tier on its systems
respectively for TSN in Ontario and for RDS in Québec. New affiliated terms
for these services will not cause any channel disruption or materially affect
the overall level of network fees paid by Cogeco Cable.

After years of negotiations and litigation with electric distribution
utilities in Ontario, the Canadian Cable Television Association had applied on
behalf of its members to the Ontario Energy Board (OEB) to have pole rates set
for electric distribution utilities that the OEB regulates in Ontario. In
March 2005, the OEB ruled that the rental fee for each attachment would be
$22.35 per year. This decision will not materially affect the overall level of
operating expenses.

There have been no other significant changes in the risk factors and
uncertainties facing Cogeco Cable as described in the Corporation's 2004
annual MD&A.

ADDITIONAL INFORMATION

This MD&A was prepared on April 8, 2005. Additional information relating
to the Corporation, including its Annual Information Form, is available on the
SEDAR Web site at www.sedar.com .

ABOUT COGECO CABLE

Cogeco Cable is the second largest cable operator in both Ontario and
Québec, and ranks fourth in Canada in terms of the number of basic-service
customers served. Cogeco Cable provides about 1,344,000 revenue-generating
units to approximately 1,435,000 households in its service territory. Through
its two-way broadband cable infrastructure, Cogeco Cable provides its
residential and commercial customers with analog and digital video and audio
services, as well as high-speed Internet access. Cogeco Cable's subordinate
voting shares are listed on the Toronto Stock Exchange (CCA.SV).



Analyst Conference Call: Monday April 11, 2005, at 11:00 a.m. ET
By the Internet at www.cogeco.ca/investors
By telephone: 1-800-289-0496,
confirmation No. 2502413
Media are invited to participate on a listen
mode only.
Re-broadcast of the call available until
April 18th: 1-888-203-1112,
confirmation No. 2502413


Supplementary Quarterly Financial Information

Quarters ended February 28, February 29, November 30,
------------------------ -----------------------
2005 2004 2004 2003
($000, except percentages (restated) (restated)
and per share data)

Revenue $ 138,389 $ 131,574 $ 135,766 $ 129,489
Operating income before
amortization 55,297 50,413 53,194 47,214
Operating margin 40.0% 38.3% 39.2% 36.5%
Amortization 31,988 32,355 32,244 43,313
Financial expense 13,840 14,767 13,894 14,905
Income taxes 3,856 2,703 3,229 30,099
Net income (net loss) 5,613 588 3,827 (41,103)

Cash flow from operations 41,675 35,278 39,192 31,882

Net income (net loss)
per share $ 0.14 $ 0.01 $ 0.10 $ (1.03)




Quarters ended August 31, May 31,
----------------------- -----------------------
2004 2003 2004 2003
($000, except percentages (restated) (restated)
and per share data)

Revenue $ 133,053 $ 126,483 $ 132,364 $ 122,473
Operating income before
amortization 54,290 48,249 51,329 44,513
Operating margin 40.8% 38.1% 38.8% 36.3%
Amortization 32,476 28,989 32,070 27,614
Financial expense 13,871 14,704 14,414 15,396
Income taxes 1,474 2,390 2,993 1,471
Net income (net loss) 6,469 2,166 1,852 32

Cash flow from operations 41,025 32,573 36,593 28,722

Net income (net loss)
per share $ 0.16 $ 0.05 $ 0.05 $ 0.00



Cogeco Cable's operating results are not generally subject to material
seasonal fluctuations. However, the loss in basic-service customers is usually
greater, and the addition of high-speed Internet customers is generally lower
in the third quarter, mainly because students leave their campus 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. Furthermore, the fourth quarter's
operating margin is usually higher as lower 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. Since the maximum amount was
reached early in the fourth quarter of fiscal 2004 and 2003, Cogeco Cable paid
lower management fees as a result.

The large net loss in the first quarter of fiscal 2004 was attributable
to non-cash adjustments for amortization and income taxes totaling
$41.6 million. These non-cash adjustments are discussed in the "Fixed Charges"
and "Income Taxes" sections.



COGECO CABLE INC.
Customer Statistics
February 28, August 31,
2005 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Homes Passed
Ontario 979,964 972,964
Québec 454,945 450,292
-------------------------------------------------------------------------
1,434,909 1,423,256
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Revenue-Generating Units
Ontario 974,646 923,046
Québec 369,027 354,271
-------------------------------------------------------------------------
1,343,673 1,277,317
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic-Service Customers
Ontario 589,881 584,686
Québec 240,966 239,169
-------------------------------------------------------------------------
830,847 823,855
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Discretionnary-Service Customers
Ontario 469,049 463,217
Québec 181,753 178,022
-------------------------------------------------------------------------
650,802 641,239
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Pay-TV Service Customers
Ontario 80,661 80,567
Québec 35,381 32,246
-------------------------------------------------------------------------
116,042 112,813
-------------------------------------------------------------------------
-------------------------------------------------------------------------
High-Speed Internet Service Customers
Ontario 227,492 203,692
Québec 47,114 41,334
-------------------------------------------------------------------------
274,606 245,026
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Digital Customers
Ontario 157,273 134,668
Québec 80,947 73,768
-------------------------------------------------------------------------
238,220 208,436
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Digital Terminals
Ontario 192,361 161,731
Québec 86,862 78,340
-------------------------------------------------------------------------
279,223 240,071
-------------------------------------------------------------------------
-------------------------------------------------------------------------


COGECO CABLE INC.
CONSOLIDATED STATEMENTS OF INCOME


Three months ended Six months ended
-------------------------------------------------------------------------
(In thousands of
dollars, except per February February February February
share data) 28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Revenue
Service $ 137,415 $ 129,241 $ 272,125 $ 256,689
Equipment 974 2,333 2,030 4,374
-------------------------------------------------------------------------
138,389 131,574 274,155 261,063

Operating costs 80,328 78,576 160,185 158,289
Management fees -
COGECO Inc. 2,764 2,585 5,479 5,147
-------------------------------------------------------------------------

Operating income before
amortization 55,297 50,413 108,491 97,627
Amortization 31,988 32,355 64,232 75,668
-------------------------------------------------------------------------

Operating income 23,309 18,058 44,259 21,959
Financial expense 13,840 14,767 27,734 29,672
-------------------------------------------------------------------------

Income (loss) before
income taxes 9,469 3,291 16,525 (7,713)
Income taxes (note 3) 3,856 2,703 7,085 32,802
-------------------------------------------------------------------------

Net income (loss) $ 5,613 $ 588 $ 9,440 $ (40,515)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings (loss) per
share (note 6)
Basic and diluted $ 0.14 $ 0.01 $ 0.24 $ (1.02)
-------------------------------------------------------------------------
-------------------------------------------------------------------------


COGECO CABLE INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS


Six months ended
-------------------------------------------------------------------------
February February
(In thousands of dollars) 28, 2005 29, 2004
(restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited)

Balance at beginning
As previously reported $ 33,880 $ 95,677
Changes in accounting policies (note 2d)) - (29,603)
-------------------------------------------------------------------------
As restated 33,880 66,074
Net income (loss) 9,440 (40,515)
Dividends on multiple voting shares (628) -
Dividends on subordinate voting shares (970) -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Balance at end $ 41,722 $ 25,559
-------------------------------------------------------------------------
-------------------------------------------------------------------------


COGECO CABLE INC.
CONSOLIDATED BALANCE SHEETS

-------------------------------------------------------------------------
(In thousands of dollars) February August
28, 2005 31, 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (audited)

Assets

Current
Accounts receivable $ 32,174 $ 31,039
Prepaid expenses 3,840 4,535
-------------------------------------------------------------------------
36,014 35,574
-------------------------------------------------------------------------

Fixed assets 683,555 687,960
Deferred charges 41,711 48,293
Customer base 989,552 989,552
-------------------------------------------------------------------------
$1,750,832 $1,761,379
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities and Shareholders' equity

Liabilities

Current
Bank indebtedness $ 15,185 $ 5,410
Accounts payable and accrued liabilities 84,750 109,402
Income tax liabilities 59 844
Deferred and prepaid income 25,005 22,778
Current portion of long-term debt (note 4) 2,375 2,455
127,374 140,889

Long-term debt (note 4) 736,811 750,268
Deferred and prepaid income 10,855 9,659
Pension plan liabilities and accrued
employee benefits 1,899 1,506
Future income tax liabilities 201,658 195,523
-------------------------------------------------------------------------
1,078,597 1,097,845
-------------------------------------------------------------------------

Shareholders' equity

Capital stock (note 5) 630,089 629,416
Retained earnings 41,722 33,880
Contributed surplus - stock-based compensation 424 238
672,235 663,534
-------------------------------------------------------------------------
$1,750,832 $1,761,379
-------------------------------------------------------------------------
-------------------------------------------------------------------------


COGECO CABLE INC.
CONSOLIDATED STATEMENTS OF CASH FLOW


Three months ended Six months ended
-------------------------------------------------------------------------
(In thousands of dollars) February February February February
28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Cash flow from operating
activities
Net income (loss) $ 5,613 $ 588 $ 9,440 $ (40,515)
Items not affecting cash
and cash equivalents
Amortization 31,988 32,355 64,232 75,668
Amortization of
deferred financing
costs 241 327 475 653
Future income taxes
(note 3) 3,531 1,795 6,135 30,969
Other 302 213 585 385
-------------------------------------------------------------------------
Cash flow from operations 41,675 35,278 80,867 67,160
Changes in non-cash working
capital items and
long-term deferred
and prepaid income
(note 7a) 10,552 3,384 (22,454) (28,662)
-------------------------------------------------------------------------
52,227 38,662 58,413 38,498
-------------------------------------------------------------------------

Cash flow from investing
activities
Acquisition of fixed
assets (note 7b) (26,809) (17,008) (48,383) (31,657)
Increase in deferred
charges (3,132) (5,322) (5,337) (10,778)
Other 25 - 27 -
-------------------------------------------------------------------------
(29,916) (22,330) (53,693) (42,435)
-------------------------------------------------------------------------

Cash flow from financing
activities
Increase (decrease) in
bank indebtedness (11,553) (6,312) 9,775 9,148
Repayment of long-term
debt (10,270) (10,186) (13,537) (5,393)
Issue of subordinate
voting shares 311 166 640 182
Dividends on multiple
voting shares (314) - (628) -
Dividends on subordinate
voting shares (485) - (970) -
-------------------------------------------------------------------------
(22,311) (16,332) (4,720) 3,937
-------------------------------------------------------------------------

Net change in cash and
cash equivalents and
cash and cash
equivalents at end $ - $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------

See supplemental cash flow information in note 7.


COGECO CABLE INC.
Notes to Consolidated Financial Statements
February 28, 2005
(amounts in tables are in thousands of dollars, except 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, contain all adjustments necessary to
present fairly the financial position of Cogeco Cable Inc. as at
February 28, 2005 and August 31, 2004 as well as its results of operations and
its cash flow for the three and six month periods ended February 28, 2005 and
February 29, 2004.

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. These unaudited interim consolidated financial statements follow
the same accounting policies as the most recent annual consolidated financial
statements.

These interim consolidated financial statements have not been subject to
a review by the Corporation's external auditors.



2. Recent accounting pronouncements and changes in accounting policies

a) Asset retirement obligations

In March 2003, the Canadian Institute of Chartered Accountants ("CICA")
issued Handbook section 3110, Asset Retirement Obligations, which
provides guidance for the recognition, measurement and disclosure of
liabilities for asset retirement obligations and the associated asset
retirement costs. The standard applies to legal or contractual
obligations associated with the retirement of a tangible long-lived asset
that result from acquisition, construction, development or normal
operations. The standard requires the Corporation to record the fair
value of a liability for an asset retirement obligation in the year in
which it is incurred and when a reasonable estimate of fair value can be
made. The standard describes the fair value of a liability for an asset
retirement obligation as the amount at which that liability could be
settled in a current transaction between willing parties, that is, other
than in a forced or liquidation transaction. The Corporation is
subsequently required to allocate that asset retirement cost to the
expense using a systematic and rational method over the asset's useful
life. The standard applies to fiscal years beginning on or after
January 1, 2004. Certain of our lease agreements contain provision
requiring us to restore facilities or remove equipment in the event that
the lease agreement is not renewed. However, we expect to renew most of
our lease agreements related to the continued operation of our cable
business and consequently, the liabilities related to the removal
provisions on non-renewed lease, if any, are considered not material to
these consolidated financial statements. In addition, in the unlikely
event that some of these lease agreements are not renewed, the liability
would be difficult to estimate since there is a wide range of potential
expiration dates for these lease agreements.

b) Variable Interest Entities

In June 2003, the CICA issued Accounting Guideline 15 ("AcG-15"),
Consolidation of Variable Interest Entities, which defines Variable
Interest Entities as entities that have insufficient equity or their
equity investors lack one or more specified essential characteristics of
a controlling financial interest. The standard provides guidance for
determining when an entity is a Variable Interest Entity and who, if
anyone, should consolidate the Variable Interest Entity. The Guideline
applies to all annual and interim periods beginning on or after
November 1, 2004. During the second quarter, the Corporation completed
its evaluation and concluded that it has no Variable Interest Entities.

c) Amortization of long-term assets

In 2003, the Corporation reviewed the useful life of its decoders and
modems, commonly referred to as home terminal devices, and of certain
other long-term assets. The useful life of decoders was changed from
seven to five years while the useful life of modems was changed from
seven to three years. These changes in accounting estimates, applied
prospectively, increased amortization expense by $14.0 million for the
six month period ended February 29, 2004.

d) Revenue recognition

On December 17, 2003, the Emerging Issues Committee issued EIC-141,
Revenue recognition, which provides general interpretative guidance on
the application of CICA 3400, Revenue, and summarizes the principles set
forth in "Staff Accounting Bulletin" No. 101 ("SAB 101") published in the
United States. In addition, EIC-141 also provides additional guidance on
the capitalization of direct incremental costs in connection with
up-front revenues. At the same time, the committee also issued EIC-142,
Revenue arrangements with multiple deliverables, which addresses how to
determine when an arrangement involving multiple deliverables contains
more than one unit of accounting and if so, how the arrangement
consideration should be measured and allocated among each separate unit
of accounting.
During the third quarter of last fiscal year, the Corporation applied
these new recommendations and determined that it has multiple revenue
arrangements comprised of installation services, sales of home terminal
devices and related subscription services. Based on the criteria of
EIC-142, the Corporation determined that the sale of home terminal
devices is considered a single unit of accounting of a multiple element
arrangement, while installation and related subscription services must be
assessed as an integrated package. In addition, certain direct
incremental costs in connection with installation revenues may be
deferred over the same term as the related revenue. Accordingly, the
following changes were adopted retroactively:

- Installation revenues are now deferred and amortized over the average
life of a customer subscription, which is four years. Previously, these
revenues were recognized immediately as they were considered as a
partial recovery of direct selling costs incurred. Upon billing, the
portion of unearned revenue is now recorded as deferred and prepaid
income;

- The costs to reconnect customers are now recorded as deferred charges
up to a maximum amount not exceeding the revenues generated by the
reconnect activity, which are included in installation revenues, and
amortized over the average life of a customer subscription, which is
four years. Previously, these costs, which include materials, direct
labor and certain overhead charges were capitalized to fixed assets and
generally amortized over a period of five years;

- Revenue from the sale of home terminal devices at a subsidized price,
which were recorded as a partial recovery of costs, are now recorded as
equipment revenue with an equal amount included in operating costs;

- The portion of advertising expense incurred to expand the digital and
high-speed Internet customer base that used to be recorded as deferred
charges is now recorded as operating costs.

These changes have been applied retroactively and had the following
impact on the Corporation's consolidated statements of income for the three
and six month periods ended February 29, 2004:



-------------------------------------------------------------------------
Three months ended Six months ended
-------------------------------------------------------------------------
February 29, 2004 February 29, 2004
-------------------------------------------------------------------------
Before After Before After
restatement restatement restatement restatement
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Revenue $ 129,039 $ 131,574 $ 257,111 $ 261,063
Operating costs 74,557 78,576 149,835 158,289
Amortization 31,314 32,355 73,594 75,668
Income taxes 3,495 2,703 36,809 32,802
Net Income (loss) 2,321 588 (37,946) (40,515)
-------------------------------------------------------------------------
Earnings (loss) per share
Basic and diluted $ 0.06 $ 0.01 $ (0.95) $ (1.02)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Also, retained earnings have been reduced by $29.6 million as at
September 1, 2003 following these changes.

3. Income taxes

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Current $ 325 $ 908 $ 950 $ 1,833
Future 3,531 1,795 6,135 30,969
-------------------------------------------------------------------------
$ 3,856 $ 2,703 $ 7,085 $ 32,802
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The following table provides the reconciliation between statutory federal
and provincial income taxes and the effective consolidated income tax rate:

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Income tax at combined
income tax rate of 34.96%
(35.32 % in 2004) $ 3,310 $ 1,217 $ 5,777 $ (2,724)
Loss or income subject
to lower or higher
tax rates 171 415 265 477
Increase in income taxes
as a result of change
in substantially enacted
tax rates - - - 32,483
Large corporation tax 325 925 950 1,850
Other 50 146 93 716
-------------------------------------------------------------------------
Income tax at effective
income tax rate $ 3,856 $ 2,703 $ 7,085 $ 32,802
-------------------------------------------------------------------------
-------------------------------------------------------------------------

4. Long-term debt

-------------------------------------------------------------------------
Maturity Interest February 28, August 31,
rate 2005 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (audited)
Parent company
Term Facility 2007 3.69%(1) $ 45,000 $ 58,000
Senior Secured Debentures
Series 1 2009 6.75 150,000 150,000
Senior - Secured Notes
Series A - US $150 million 2008 6.83 (2) 185,025 196,950
Series B 2011 7.73 175,000 175,000
Second Secured Debentures
Series A 2007 8.44 125,000 125,000
Deferred credit (3) 2008 - 53,625 41,700

Subsidiaries
Obligations under capital
leases 2008 5.87-9.11 2,616 3,153
Preferred shares (4) 2006 - 2,920 2,920
-------------------------------------------------------------------------
739,186 752,723
Less current portion 2,375 2,455
-------------------------------------------------------------------------
$ 736,811 $ 750,268
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(1) Average interest rate on debt as of February 28, 2005, including
stamping fees.
(2) Cross-currency swap agreements have resulted in an effective interest
rate of 7.254% on the Canadian dollar equivalent of the U.S.
denominated debt.
(3) The deferred credit represents the amount which would have been
payable as at February 28, 2005 and August 31, 2004 under cross-
currency swaps entered into by the Corporation to hedge Senior
Secured Notes Series A denominated in US dollars.
(4) 2,920,000 preferred shares, 5.5% cumulative dividend, redeemable and
retractable to a maximum of $1,400,000 annually.

5. Capital Stock

Authorized, an unlimited number

Class A Preference shares, without voting rights, redeemable by the
Corporation and retractable at the option of the holder at any time at a price
of $1 per share, carrying a cumulative preferential cash dividend at a rate of
11% of the redemption price per year.

Class B Preference shares, without voting rights, issuable in series.
Multiple voting shares, 10 votes per share.
Subordinate voting shares, 1 vote per share.

-------------------------------------------------------------------------
February 28, August 31,
2005 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (audited)
Issued

15,691,100 multiple voting shares $ 98,346 $ 98,346
24,285,114 subordinate voting shares
(24,232,815 as at August 31, 2004) 531,743 531,070
-------------------------------------------------------------------------

$ 630,089 $ 629,416
-------------------------------------------------------------------------
-------------------------------------------------------------------------

During the period, subordinate voting shares transactions were as
follows:

Six months ended Twelve months ended
February 28, August 31,
2005 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (audited)
-------------------------------------------------------------------------
Number of Number of
shares Amount shares Amount
-------------------------------------------------------------------------

Balance at beginning 24,232,815 $ 531,070 24,190,043 $ 530,669
Shares issued for cash
under the Employee Stock
Purchase Plan and the
Stock Option Plan 52,299 673 42,772 401
-------------------------------------------------------------------------
Balance at end 24,285,114 $ 531,743 24,232,815 $ 531,070
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Stock-based plans

The Corporation established 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 financial statements for the
year ended August 31, 2004. During the first two quarters, the Corporation
granted 140,766 stock options (159,580 in 2004) with an exercise price of
$21.50 ($15.70 to $18.12 in 2004) of which 38,397 stock options (48,037 in
2004) were granted to COGECO Inc. employees. The Corporation records
compensation expense for options granted on or after September 1, 2003. As a
result, a compensation expense of $121,000 and $219,000 ($63,000 and $112,000
in 2004) was recorded for the three and six month periods ended February 28,
2005. If compensation cost had been recognized using the fair value-based
method at the grant date for options granted between September 1, 2001 and
August 31, 2003, the Corporation's net income (loss) and earnings (loss) per
share for the three and six month periods ended February 28, 2005 and
February 29, 2004 would have been reduced (increased) to the following pro
forma amounts:

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net income (loss)
As reported $ 5,613 $ 588 $ 9,440 $ (40,515)
Pro forma 5,517 492 9,248 (40,707)

Basic and diluted earnings
(loss) per share
As reported $ 0.14 $ 0.01 $ 0.24 $ (1.02)
Pro forma 0.14 0.01 0.23 (1.02)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The fair value of each option granted was estimated on the grant date for
purposes of determining stock-based compensation expense and pro forma
disclosures using the Binomial option pricing model based on the following
assumptions:

-------------------------------------------------------------------------
2005 2004
-------------------------------------------------------------------------
Expected dividend yield 1.27% 1.27%
Expected volatility 43% 49%
Risk-free interest rate 3.70% 4.04%
Expected life in years 4.0 3.9
-------------------------------------------------------------------------

The fair value of stock options granted for the six month period ended
February 28, 2005 was $7.46 per option ($6.53 in 2004).

As at February 28, 2005, the Corporation had outstanding stock options
providing for the subscription of 599,095 subordinate voting shares. These
stock options can be exercised at various prices ranging from $7.05 to $40.75
and at various dates up to October 14, 2014.

6. Earnings (loss) per share

The following table provides a reconciliation between basic and diluted
earnings (loss) per share:

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Net income (loss) $ 5,613 $ 588 $ 9,440 $ (40,515)

Weighted average number
of multiple voting and
subordinate voting
shares outstanding 39,963,076 39,887,681 39,949,327 39,886,354
Effect of dilutive
stock options (1) 160,067 104,499 137,415 -
-------------------------------------------------------------------------
Weighted average number
of diluted multiple
voting and subordinate
voting shares
outstanding 40,123,143 39,992,180 40,086,742 39,886,354
-------------------------------------------------------------------------

Earnings (loss) per share
Basic and diluted $ 0.14 $ 0.01 $ 0.24 $ (1.02)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(1) The weighted average dilutive potential number of subordinate voting
shares, which were antidilutive for the six month period ended
February 29, 2004 amounted to 95,835 shares. Stock options to
purchase 19,906 shares (208,681 in 2004) in the six month period
ended February 28, 2005 were outstanding, but were not included in
the computation of diluted earnings per share since the exercise
price of the stock options was greater than the average share price
of the subordinate voting shares and, therefore, the effect would
have been antidilutive.


7. Statements of cash flow

a) Changes in non-cash working capital items and long-term deferred and
prepaid income

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
(restated) (restated)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Accounts receivable $ (464) $ (390) $ (1,135) $ 521
Prepaid expenses 92 (57) 695 472
Accounts payable and
accrued liabilities 11,759 3,185 (24,652) (31,993)
Income tax liabilities (721) (46) (785) 752
Deferred and prepaid income (114) 692 3,423 1,586
-------------------------------------------------------------------------
$ 10,552 $ 3,384 $ (22,454) $ (28,662)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

b) Other information

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Fixed assets
acquisitions through
capital leases $ - $ 27 $ - $ 126
Interest paid 11,237 11,979 27,357 29,027
Income taxes paid 1,046 954 1,735 1,081
-------------------------------------------------------------------------
-------------------------------------------------------------------------


8. Employees future benefits

The Corporation and its subsidiaries offer their employees contributory
defined benefit pension plans, a defined contribution pension plan or a
collective registered retirement savings plans which are described in the
financial statements for the year ended August 31, 2004. The total expenses
related to these plans are as follows:

Three months ended Six months ended
-------------------------------------------------------------------------
February February February February
28, 2005 29, 2004 28, 2005 29, 2004
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Defined benefit pension
plans $ 204 $ 171 $ 296 $ 246
Defined contribution
pension plan and
collective registered
retirement savings plan 322 356 662 716
-------------------------------------------------------------------------
$ 526 $ 527 $ 958 $ 962
-------------------------------------------------------------------------
-------------------------------------------------------------------------


9. Comparative figures

Certain comparative figures have been reclassified in order to conform
with the presentation adopted in the current period.

Contact Information

  • Media: Marie Carrier, Director, Corporate
    Communications, (514) 874-2600; Source: Cogeco Cable Inc., Pierre Gagné, Vice
    President, Finance and Chief Financial Officer, (514) 874-2600