Converging Networks

Week of March 31, 2014

Converging Networks
INVESTING IN TELCOS, CELLCOS, AND CABLECOS

Inside

Is It Time to Re-evaluate Some of Our Wireless Industry Assumptions? Industry News Calendar of Events Regulatory Events to Watch Price Performance Charts Valuation Comparables Net Asset Valuations

1 5 7 8 10 15 18

Is It Time to Re-evaluate Some of Our Wireless Industry Assumptions?

Over the past few weeks, all three Canadian wireless incumbents have implemented price changes. Although there were some reductions on certain data plans (i.e., lower price per MB) and the elimination of less-popular data plans, the common denominator was that they all implemented a $5 increase per month per device in data sharing plans for new subscribers. Hence, new single-line customers will pay $5 more per month, new two-device customers (i.e., multi-device or family plans) will pay $10 more per month, and so on. The move also helps recover the higher-than-expected cost of the 700 MHz auction. Normally, we would accept these price increases and move on, as the action reaffirms our positive view on the Canadian wireless sector, and in particular the wireless incumbents, and, therefore, should support margins and return on investment. However, recent trends make us wonder whether the Canadian market will simply absorb the price increases and whether industry pricing power is as strong as it has been historically. The latest quarterly results suggest the market has not yet adjusted to the price increases from last summer when incumbents raised monthly prices after the three-year contract ban under the Wireless Code of Conduct (WCOC). In a previous edition of Converging Networks (from February 18, 2014, available on ScotiaView), we showed that smartphone penetration growth slowed in the second half of 2013 after the price increases were implemented. Since then, Wind and Quebecor have also reported their 2013 year-end results. As shown in Exhibits 1 and 2, wireless subscriber growth and wireless penetration growth slowed at an accelerating rate in Q4/13. At this pace, we are trending toward no subscriber growth and no penetration growth in 2014.

Jeff Fan, CPA, CA, CFA (416) 863-7780 Scotia Capital Inc. Canada jeff.fan@scotiabank.com

Jay Oduwole (416) 945-4249 Scotia Capital Inc. Canada Shay Nulman (416) 862-3721 Scotia Capital Inc. Canada

Telecommunication Services & Cable

For Reg AC Certification and important disclosures see Appendix A of this report. Analysts employed by non-U.S. affiliates are not registered/qualified as research analysts withFINRA in the U.S.

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Week of March 31, 2014

Exhibit 1: Canadian Wireless (Postpaid and Prepaid)Subscriber Growth YOY (Quarterly)

9.0% 8.1% 7.5% 7.0% 7.0% 6.7% 6.3% 6.3% 6.0% 2009: Pre-new entrants 5.0% 2010-2011: New entrants driven penetration gain 4.0% 5.5% 4.9% 4.6% 4.2% 4.0% 3.3% 3.0% 2.7% 2.0% Mid 2013: Prices increased after implementation of WCOC. 1.4% 6.7% 6.3% 7.1%

8.0%

7.9% 7.9%

7.7% 7.0%

1.0%

0.0%

Source: Company reports; Scotiabank GBM.

Exhibit 2: Canadian Wireless Penetratrion Growth YOY

5.0% 4.5% 4.0% 3.7% 3.5% 3.0% 2.5% 2.0% 1.7% 1.5% 1.2% 1.0% 0.5% 0.0% Mid 2013: Prices increased after implementation of WCOC. 0.2% 2009: Pre-new entrants 2010-2011: New entrants driven penetration gain 2.8% 2.6% 2.3% 2.2% 3.5% 3.4% 3.3% 3.3% 3.3% 3.6% 4.0% 3.7% 4.6% 4.6% 4.5% 4.2%

3.1%

Source: Company reports; Scotiabank GBM.

It is not just about subscriber trends slowing, revenue growth has also slowed (see February 18, 2014, edition of Converging Networks, available on ScotiaView). The price increases had a slowing effect on service revenue growth and data revenue growth. This was primarily caused by slower smartphone subscriber and smartphone penetration growth (see Exhibits 5 and 6), which fuel data revenue growth. As smartphone subscriber and smartphone penetration growth slow, so does data revenue growth. This brings us to the recent price increases, which are an attempt to offset the slower smartphone subscriber growth by lifting smartphone ARPU (the $5 per month per device increase in data sharing plans for new subscribers).

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Week of March 31, 2014

Exhibit 3: Annual Canadian Wireless Subscriber Growth YOY

9.0% 8.0% 7.4% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.4% 1.0% 0.0% 2009 2010 Canadian total subscriber growth 2011 2012 Incumbent postpaid subscriber growth 2013 4.2% 3.3% 6.3% 7.9% 7.3% 6.3% 6.0%

5.8%

Source: Company reports; Scotiabank GBM.

Exhibit 4: Annual Canadian Wireless Penetratrion

90.0% 80.0% 72.5% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2008 2009 2010 2011 2012 2013 64.7% +3.3% 68.0% +4.6% +3.7% 76.2% +2.3% 78.5% +0.2% 78.8%

Source: Company reports; Scotiabank GBM.

Incumbents are preparing for 2H/14 and 2015. We believe the incumbents are effectively assuming that the price increases will be absorbed in the second half of 2014. We presume they believe that by then the market will have adjusted to the new reality of the higher two-year price plans. Furthermore, we think they believe that subscribers will eventually upgrade to newer smartphones, which would migrate them to the new price plans. For some carriers, customers can stay on their existing plans only if they bring their own device (BYOD bring your own device) or pay the full price for a new smartphone. Looking out to 2015, if customers continue to delay their upgrades, there is a great chance that the industry will experience a double cohort on contract expiry and upgrade volume. This is because both the three-year contract customers (who have the option to exit at the two-year anniversary in 2015) and the two-year contract customers who signed up in 2013 have the option to exit in the same year. The higher prices should help offset the higher cost of acquisition (COA) and cost of retention (COR) due to higher gross addition and upgrade volume in 2015. An important assumption is that all three incumbents will remain disciplined on the policy of eliminating legacy plans and moving customers to the new plans. We are not saying the price increases will not be absorbed by the market. If the incumbents stick to their policies, and the market absorbs the price increases, we will likely see wireless revenue growth reaccelerate. This would assure the market that the pricing power in Canadian wireless remains strong and that the revenue growth slowdown in 2H/13 and 1H/14 would simply be temporary.

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Week of March 31, 2014

However, if the price increases are not absorbed, then we believe some of the long-standing industry assumptions may have to be re-evaluated. This would include our long-term wireless penetration assumption (current assumption is that it should track the United States) and, more importantly, our smartphone penetration assumption (current assumption is that it should reach 100%). How could subscribers not absorb the price increase? Is it possible that subscribers could reduce their data bucket purchases to keep the monthly service fee at par? This may be easier in Western Canada where Shaws Wi-Fi network now has more than 30,000 hotspots and is seeing average Wi-Fi data usage near the current average usage for smartphones. Wireless spending (and communications spending overall) as a percentage of GDP has risen sharply over the past several years; have we finally reached the peak? We believe the 2H/14 results will provide us the insights. On EBITDA and cash flow, incumbents generated strong margins due to the slower subscriber volume in 2H/13 and we expect this will continue in the first half of 2014. Hence, even if wireless revenue growth continues to slow in the first half of 2014, we expect EBITDA growth to remain healthy for the industry overall. However, while rising margins is easily achievable in the short term due to lower volume, it would be difficult to sustain over the medium to long term without sustainable revenue growth.
Exhibit 5: Annual Canadian Smartphone Penetratrion (Percentage of Postpaid Subscribers)
80% 70% 60% 50% +17% 40% 30% 20% 10% 0% 2008
Source: Company reports; Scotiabank GBM.

75% 67% +14% +8%

53%

36% 23% 15% +8% +12%

2009

2010

2011

2012

2013

Exhibit 6: Annual Canadian Smartphone Penetratrion (Percentage of Total Subscribers)

70% 60% 50% 43% 40% +15% 30% 20% 12% 10% 0% 2008
Source: Company reports; Scotiabank GBM.

65% 56% +13% +9%

28% 19% +7% +10%

2009

2010

2011

2012

2013

Converging Networks

Week of March 31, 2014

Industry News
TELUS Announces Leadership Progression
(March 31 TELUS) Effective as of TELUS (T-T) upcoming Annual General Meeting on May 8, 2014, TELUS is pleased to announce board and management leadership appointments that have been fostered through the companys robust succession planning process. These changes will ensure the continuity of TELUS national growth strategy and the companys top priority of always putting customers first. Brian Canfield will retire following 58 years of exemplary service with TELUS and BC TEL. Mr. Canfield has served as TELUS non-executive chair since 1999, upon completion of the merger of BC TEL and TELUS. Darren Entwistle is being appointed executive chair of TELUS. Since 2000, TELUS has become a recognized global leader in shareholder value creation, technology innovation, human capital development and employee engagement, and corporate social responsibility.

Joe Natale is being appointed president and CEO of TELUS. Mr. Natale joined TELUS in 2003 as an executive vice president and has progressed through increasingly expansive roles, including president of TELUS Business Solutions and president of TELUS Consumer Solutions. Since 2010, Mr. Natale has served as TELUS chief commercial officer, leading a team of more than 25,000.
Cheaper iPhone Plans Come to Quebec
(March 29 Global News) Videotron (OBR.B-T), the scrappy cable company that launched cellphone services across Quebec a few years ago has at last landed the vaunted iPhone, which continues to be the most popular wireless device on the planet. The launch of the device isnt so much the big news its the monthly pricing thats come along with it. Videotron is substantially undercutting the plans offered by Bell (BCE-T), Rogers (RCI.B-T), and TELUS (T-T) in the province, offering monthly rates that are as much as 36% less expensive than what the Big Three incumbents charge for iPhone-eligible plans.

Videotron is charging $74.95 a month for unlimited Canada-wide calling, text message, and 4 GB of data. The equivalent incumbent plans are $110/month which Bell, Rogers, and Telus uniformly charge their subscribers. For $80 a month, Videotron iPhone subscribers can get the same deal and a total of 6 GB of data, a plan that costs Rogers, Bell, and TELUS subscribers $125 a month currently, according to analysts. Videotrons pricing is clearly designed to win over droves of new customers in a hurry.

Charter Challenges Comcast-Time Warner Cable Deal in Proxy Fight

(March 28 Bloomberg) Charter (CHTR-Q) urged Time Warner Cable (TWC-N) investors not to endorse a takeover by Comcast (CMCSA-Q) signalling its not backing down in its pursuit of Time Warner Cable without a fight. Comcast, which outbid Charter this year with a $45 billion stock offer, is too susceptible to regulatory hurdles because its the biggest in the cable industry, Charter said today in a filing. Time Warner Cable, meanwhile, refused to engage with Charter to develop a merger deal, Charter said.

Charter, the fourth-largest U.S. cable company, had offered to buy Time Warner Cable the secondlargest U.S. cable company for $37 billion in cash and stock, a bid rejected as too low by Time Warner Cable Chief Executive Officer Rob Marcus. Although Comcasts shares have declined about 10% since the acquisition agreement was announced, they would need to drop at least another 8% to fall to the levels of Charters proposal.

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Week of March 31, 2014

We are fully committed to our merger with Comcast, which we believe is in the best interests of shareholders, Time Warner Cable said today. John Demming, a Comcast spokesman, said the company declined to comment.

Billionaire Ergen Revisits Dish-DirecTV as Options Run Out

(March 28 Bloomberg) Billionaire Charlie Ergen, who scrapped plans 11 years ago to merge his Dish satellite business with DirecTV because of regulatory concerns, is at it again.

The cable rivals of Ergens Dish Network (DISH-Q) are getting bigger, with Comcast (CMCSA-Q) and Time Warner Cable (TWC-N) preparing for a $45 billion merger. Potential partners in the wireless business have spurned the company. Furthermore, a host of new competitors, from phone companies to Internet-video providers, are luring away the companys subscribers.

Thats all putting increasing pressure on Ergen, a former professional gambler from Oak Ridge, Tennessee, to coax a skittish DirecTV into a deal. At the same time, he has to convince regulators that a satellite merger wouldnt harm competition. Youve got a whole different dynamic than 10 years ago, he said in a 2012 interview. I would be relatively optimistic you could put a deal together if there was a desire with DirecTV that makes sense for the government to approve. Ergen, 61, recently reached out to Mike White, DirecTVs chief executive officer, to discuss a combination of the two largest satellite TV providers, according to several people with knowledge of the matter, Bloomberg News reported this week. While White hasnt ruled out a deal, hes reluctant to push forward with formal talks out of concern that regulators would block the combination again, the same sources said. Government regulators forced Ergen to scrap the merger in late 2002.

TELUS Decision to Shut Public Mobile Angers Consumers

(March 27 The Globe and Mail) TELUS (T-T) is preparing to shut down Public Mobiles wireless network, a move that will force the discount carriers roughly 280,000 customers to buy new cellphones in order to maintain service. Although TELUS is planning to migrate Public Mobiles customers onto its faster 4G (fourth-generation) national network, its decision is sparking a firestorm of criticism from consumer advocates and is raising the eyebrows of federal officials, including Industry Minister James Moore. Thats because Public Mobile largely caters to low-income Canadians who are least able to afford the cost of purchasing new cellphones.

Since those consumers often opt for ultra-cheap talk-and-text plans, broader questions are being raised about the state of competition in the $20 billion wireless market at a time when the two remaining independent carriers, Mobilicity and Wind Mobile, appear to be on weaker footing.
For a large majority of the customers, this is actually an incredibly beneficial move, said Kevin Banderk, general manager of Public Mobile and the head of TELUS Koodo brand. To move from where they are today and, generally speaking, keep the price points where they are today onto a network that is of the latest and greatest technology much more reliable, much faster data speeds and national in scope is actually a good thing. We understand that the transition is a bit tricky and were doing everything we can to make that as easy as possible. Industry Minister James Moore questioned the wisdom of TELUS move. Seems like an odd business decision to alienate thousands of Public Mobile users as you absorb Public Mobile itself, Mr. Moore told The Globe and Mail, while on a trade mission in Germany. Ultimately its a business decision Ill leave for Telus to explain.

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Week of March 31, 2014

Calendar of Events
Exhibit 7: Upcoming Events

March 31

April 1

2 Scotiabank

3
Jeff Fan marketing in Boston

4
Jeff Fan marketing in Boston

Scotiabank

7 Quebec General Election National Assoc. of Broadcasters Show

Las Vegas April 7 - 10

8 Comcast Senate Hearing

9
Call 11:00 a.m. ET Dial: 1-800-820-0231 Code: 8125587 Call 3:30 p.m. ET Dial: 866-321-6651 Code: 1639706

10 CCA Q2/14

11

SJR Q2/14

14

15

16

17 Good Friday
Bank closed

18

21
Call 4:30 p.m. ET Dial 416-644-3414 Code: N/A

22
Call 8:30 a.m. ET Dial 1-800-263-8495 Code: 10792182

23
Call 8:30 a.m. ET Dial 1-888-455-3018 Code: VERIZON

24 VZ Q1/14

25

RCI Q1/14

Comcast Q1/14

Call 4:30 p.m. ET Dial 1-866-232-4457 Code: N/A

AT&T Q1/14

28
Los Angeles April 29- May 1

29 NCTA Cable Show

Call 4:30 p.m. ET Dial 866-696-5910 Code: 2743188

30 BA Q1/14

May 1

5 BCE Q1/14
Tentative

7 TELUS Q1/14
Tentative

12 MTS Q1/14
Tentative

13 QBR Q1/14
Tentative

14

15

16

Source: Company reports; Industry Canada; CRTC; Scotiabank GBM.

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Week of March 31, 2014

Regulatory Events to Watch

Supreme Court of Canada (SCC)

Industry Canada

CRTC

On January 31, 2014, the Supreme Court of Canada reinstated a lower court ruling on a lawsuit regarding the administration of one of MTSs pension plans following the companys 1997 privatization. Pension benefits are expected to be increased by $43 million, plus interest calculated at a rate equal to the pension plans rate of return since 1997, which could increase pension benefits by up to $147 million. The implications of the ruling are complex and require further discussions and negotiations with plaintiffs before the definitive impacts on the MTS pension plan and the company are known with certainty. See SCC Case 34763. Final results for the auction for 68 MHz of 700 MHz were announced on February 19, 2014. Ten companies participated in the auction and 97 of 98 licences were awarded to eight of those participants, with a total value of $5.27 billion. Winning bidders had until March 5, 2014, to submit 20% of their total final payment. The remaining 80% of their total final payment is due April 2, 2014. On January 10, 2014, Industry Canada announced the 2,500 MHz auction will take place on April 14, 2015. On December 18, 2013, the Government of Canada announced plans to cap wireless wholesale roaming rates paid by new entrants to incumbents at a rate no higher than the incumbents retail rates. The legislature was included in the federal budget released February 11, 2014. On June 28, 2013, Industry Canada issued its framework relating to spectrum transfers, which essentially reiterates the then Industry Ministers comments on June 4, 2013, and clarifies in writing that spectrum transfer requests will be reviewed and those that would result in undue spectrum concentration and therefore diminish competition will not be permitted. Decisions on transfer requests will be made on a case-by-case basis and will be issued publicly to increase transparency. The new framework does not apply to prior agreements and will override the existing five-year limit on AWS licence transfer to incumbents. The new framework will be tested as the five-year limit on Videotrons AWS spectrum expired on December 22, 2013, and Mobilicitys on February 10, 2014. Winds licences will expire on March 12, 2014, and Shaws on September 1, 2014. On February 27, 2014, Industry Canada blocked a request to transfer 83 wireless spectrum licences from NextWave to Inukshuk, which is owned by Rogers and BCE. Canadas Industry Minister, James Moore, said in a brief statement that the sale of the 2.3 GHz airwave licences would have created unacceptable levels of concentration of spectrum in the hands of incumbent carriers. In mid-2013, the CRTC undertook a fact-finding exercise to assess the competitive impact of existing wholesale wireless roaming arrangements between Canadian carriers. A proceeding to further analyze whether the current wholesale roaming regime is placing new entrants at an unfair competitive disadvantage is scheduled for September 29, 2014. In addition to comments in the October 2013 Throne Speech regarding pickand-pay programming, the federal government has asked the CRTC to provide a formal review of so-called pick-and-pay TV services. The CRTC has until April 30, 2014, to deliver the report, including steps the commission plans to take toward breaking up TV programming bundles. The CRTC will hold proceedings to look into whether incumbent Internet service providers (ISPs) should be required to give smaller competitors wholesale access to their fibre-to-the-home networks. The proceeding will include a public hearing, which will begin on October 27, 2014. See Telecom Notice of Consultation CRTC 2013-551.

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Week of March 31, 2014

U.S.

On September 28, 2012, the FCC launched an incentive auction process seeking public comment on repurposing 600 MHz or broadcast TV spectrum for mobile broadband. On December 6, 2013, FCC Chairman Tom Wheeler said the commission is moving the start of the 600 MHz broadcast TV spectrum incentive auctions to mid-2015 from a previously scheduled start of sometime in 2014 to make sure the agency gets the technology and policy correct. On March 14, 2013, the FCC auction of licences in the 1,915-1,920 MHz (Lower H Block) and 1,995-2,000 MHz (Upper H Block) bands ended, with total bids of $1.56 billion, exactly the auction reserve price. The licences were secured by Dish Network. On July 23, 2013, the FCC proposed new rules to allocate and license four Advanced Wireless Services (AWS) bands by February 2015. The four bands, which are jointly referred to as AWS-3, are in the 1,695-1,710; 1,755-1,780; 2,025-2,155; and 2,155-2,180 MHz bands. Comments were due September 18, 2013, and reply comments were due October 16, 2013. See GN Docket No. 13185. On November 21, 2013, the FCC announced a proposal to expand consumer access for mobile services on commercial flights. In its open meeting on December 12, 2013, the FCC voted three to two to consider lifting its ban on inflight cell phone use. The Commission will now seek to solicit public input on the proposal, and will carefully review input from consumers and stakeholders before taking any final action. See WT Docket No. 13-301. On February 13, 2014, Comcast announced a proposed $45.2 billion takeover of Time Warner Cable. The U.S. Senate will hold a hearing on March 26, 2014, to access the impact of the merger on consumers. In addition, Comcast is targeting the end of March to submit its application to the FCC. Companies typically have 30 business days to file with the FCC after a deals announcement. Around the same time, Comcast will also submit documents asking antitrust regulators for approval. The FTC and Justice Department will then determine which agency will take the lead on the review.

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Week of March 31, 2014

Price Performance Charts

Exhibit 8: Telecom Total Return Performance

115 110 105 100 95 90

4 4 4 4 4 4 4 4 4 14 14 14 14 -1 -1 -1 -1 -1 -1 -1 -1 -1 bbbbar ar ar ar e e e e an an an an an J J J J J -M -M -M -F -M -F -F -F 24 31 03 10 17 14 21 28 28 07 07 14 21
Dividends included in calculations. Source: Bloomberg; FactSet.

Bell Aliant BCE Inc. MTS TELUS Verizon AT&T Inc.

Exhibit 9: Canadian Wireless Total Return Performance

115 110 105 100 95 90 85

4 4 4 4 4 4 4 4 14 14 14 14 14 -1 -1 -1 -1 -1 -1 -1 -1 nnnnnar ar ar eb Feb eb Feb Mar Ja Ja Ja Ja Ja M M M F F 03 10 31 17 24 14 21 07 28 28 14 21 07
Dividends included in calculations. Source: Bloomberg; FactSet.

Rogers TELUS Corporation BCE Inc.

10

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Week of March 31, 2014

Exhibit 10: U.S. Wireless Total Return Performance

110 105 100 95 90 85 80 75 70 65

4 4 4 4 14 14 14 14 14 14 14 14 14 r-1 r-1 r-1 r-1 nnnnnbbbba a a a e e e e a a a a a -J -J -J -J -J -F -F -F -F -M -M -M -M 03 10 24 17 31 07 14 21 28 07 14 28 21
Dividends included in calculations. Source: Bloomberg; FactSet.

Verizon AT&T Inc. Sprint Corp. T-Mobile US, Inc. US Cellular

Exhibit 11: Canadian Cable Total Return Performance

120 115 110 105 100 95 90 85

Cogeco Cable Shaw Rogers Quebecor

03

n Ja

4 -1 10

n Ja

4 -1 17

n Ja

4 -1 24

n Ja

4 -1 31

n Ja

4 -1 07

bFe

14 14

bFe

14 21

bFe

14 28

bFe

14 -M 07

ar

-1

-M 14

ar

-1

-M 21

ar

-1

-M 28

ar

-1

Dividends included in calculations. Source: Bloomberg; FactSet.

11

Converging Networks

Week of March 31, 2014

Exhibit 12: U.S. Cable Total Return Performance

110 105 100 95 90 85

Cable Vision Charter Comcast Time Warner Cable

03

n Ja

4 -1 10

n Ja

4 4 4 4 4 4 14 -14 r-14 r-14 r-14 r-14 -1 n-1 n-1 n-1 b-1 b-1 ba a a a e e e eb a a a -J -J -J 7-F 4-F -F 8-F 7-M 4-M 1-M 8-M 7 4 1 1 1 2 3 0 2 1 2 0 1 2 2

Dividends included in calculations. Source: Bloomberg; FactSet.

Exhibit 13: Canadian Telecom, Wireless, and Cable Total Return Performance

108 106 104 102 100 98 96 94 Cdn Cable Cdn Telecos Cdn Wireless S&P/TSX Composite

4 4 4 4 4 4 4 4 4 4 4 4 4 -1 -1 -1 -1 -1 -1 -1 -1 -1 r-1 ar-1 ar-1 ar-1 a n Ja n Feb Feb Feb Feb Ma a n Ja n Ja n J J M M M 24 31 07 03 14 10 21 17 28 07 14 21 28

Canadian Telcos: Equal weighting BA, BCE, MBT, and T. Canadian Wireless: BCE, RCI.B, and T. Canadian Cable: Equal weighting CCA, RCI.B, QBR.B, and SJR.B. Dividends included in calculations. Source: Bloomberg; FactSet.

12

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Week of March 31, 2014

Exhibit 14: U.S. Telecom, Wireless, and Cable Total Return Performance

104 102 100 98 96 94 92 90 88 U.S. Telecos U.S. Wireless U.S. Cable S&P 500

4 4 4 4 4 4 4 4 4 4 4 4 4 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 ar ar ar ar eb eb eb eb an an an an an M M M M F F J J F J F J J 21 28 14 07 28 21 24 31 14 17 07 10 03
U.S. Telcos: Equal weighting T and VZ. U.S. Wireless: T, VZ, S, USM, TMUS. U.S. Cable: Equal weighting CHTR, CMCSA, CVC, TWC. Dividends included in calculations. Source: Bloomberg; FactSet.

Exhibit 15: Mexican Telecom Total Return Performance

105 100 95 90 85 80 75
4 4 4 4 14 14 14 14 14 14 14 14 14 r-1 r-1 r-1 r-1 nnnnnbbbba a a a e e e e a a a a a -J -J -J -J -J -M -M -M -F -M -F -F -F 31 24 10 17 03 21 28 14 28 07 21 14 07
MEXBOL = Mexican Bolsa Index or IPC (ndice de Precios y Cotizaciones); IBOV = Brazil BOVESPA stock index. Returns are in local currency. Source: Bloomberg; FactSet.

America Movil MEXBOL IBOV

13

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Week of March 31, 2014

Exhibit 16: Total Return Performance: One Month Rolling to March 31, 2014 T-N BCE-T BA-T MBT-T VZ-N T-T USM-A S-N TMUS-N QBR.B-T RCI.B-T CVC-N SJR.B-T CMCSA-O CCA-T CGO-T TWC-N S&P/TSX S&P 500 -5% 0% 5% 10% 15%

Exhibit 17: Total Return Performance: Three Months Rolling to March 31, 2014 MBT-T T-T VZ-N BCE-T T-N BA-T TMUS-N USM-A S-N CMCSA-O CGO-T QBR.B-T TWC-N CCA-T RCI.B-T SJR.B-T CVC-N S&P/TSX S&P 500 -20% -10% 0% 10% 20%

Dividends included in calculations. Source: FactSet.

Dividends included in calculations. Source: FactSet.

Exhibit 18: Total Return Performance: Six Months Rolling to March 31, 2014 T-T BCE-T BA-T MBT-T VZ-N T-N S-N TMUS-N USM-A TWC-N CMCSA-O QBR.B-T CGO-T SJR.B-T RCI.B-T CVC-N CCA-T S&P/TSX S&P 500 -20%-10% 0% 10% 20% 30% 40% 50%
Dividends included in calculations. Source: FactSet.

Exhibit 19: Total Return Performance: One Year Rolling to March 31, 2014 T-T BA-T BCE-T VZ-N T-N MBT-T S-N* TMUS-N USM-A TWC-N CGO-T CCA-T QBR.B-T CMCSA-O CVC-N SJR.B-T RCI.B-T S&P/TSX S&P 500
-20% 0% 20% 40% 60% 80% 100%120%140% *One-year returns not available for Sprint given re-listing on 07/08/13 post-Softbank transaction Dividends included in calculations. Source: FactSet.

14

15

Converging Networks

Exhibit 20: Valuation Comparables

(C$ and US$ millions, except per share data)

One-year TKR BCE-CA BA-CA CCA-CA MBT-CA QBR.B-CA RCI.B-CA SJR.B-CA T-CA Scotiabank GBM Rating Sector Perform Sector Outperform Sector Outperform Sector Underperform Focus Stock Sector Outperform Sector Outperform Sector Outperform Price 3/28/14 $47.45 $27.03 $56.24 $30.23 $26.90 $45.85 $26.25 $40.35 Target Price $48.00 $27.00 $63.00 $31.00 $33.50 $46.00 $29.00 $39.00 ROR 6.4% 6.9% 14.2% 8.2% 24.9% 4.3% 14.7% 0.2% High 52-week Low $40.58 $24.79 $41.59 $28.18 $20.13 $40.18 $22.23 $29.52 Dividend Rate Yield $2.47 $1.90 $1.20 $1.70 $0.10 $1.83 $1.10 $1.44 5.2% 7.0% 2.1% 5.6% 0.4% 4.0% 4.2% 3.6% Market Cap. 35,932 6,192 2,758 2,125 3,892 23,704 11,891 25,622 Net Debt 21,172 3,111 2,866 1,036 3,802 12,393 5,147 8,116 Other* 3,298 143 235 (305) 0 (1,323) (5) 0 Enterprise Value 60,402 9,446 5,859 2,856 7,695 34,774 17,033 33,738 '13E-'15E EPS CAGR 7.4% -6.3% 11.9% 0.5% 15.8% 0.6% 6.6% 10.4% 2014E PEG 2.1 x n.m. 1.0 x n.m. 0.8 x n.m. 2.2 x 1.6 x

Canadian BCE Inc. Bell Aliant Cogeco Cable Manitoba Tel Quebecor Inc. Rogers Comm. Shaw Comm. TELUS Corp.

$48.90 $29.26 $56.90 $36.60 $27.40 $52.75 $26.31 $40.53

LatAm ** AMX NII Holdings, Inc. AMX-US NIHD-US Sector Perform Sector Outperform $19.26 $1.16 $19.20 $3.00 1.5% 158.6% $23.75 $9.82 $18.40 $0.83 $0.35 $0.00 1.8% 0.0% 69,618 199 33,300 4,373 3,039 0 105,957 4,572 6.9% n.m. 1.2 x n.m.

U.S. AT&T Comcast Corp. Time Warner Cable Verizon Comm.

1

T-US CMCSA-US TWC-US VZ-US

Sector Underperform Sector Outperform Tender Sector Outperform

$35.07 $49.56 $135.87 $47.42

$35.00 $62.00 $138.00 $55.00

5.0% 26.9% 3.8% 20.5%

$39.00 $55.28 $147.28 $54.31

$31.74 $38.75 $89.81 $45.08

$1.84 $0.90 $3.00 $2.12

5.2% 1.8% 2.2% 4.5%

185,170 131,433 39,348 196,129

74,852 46,129 23,906 106,172

(8,235) (2,342) (1,664) (1,201)

251,787 175,220 61,590 301,100

-2.6% 16% 12% 15%

n.m. 0.9 x 1.4 x 0.8 x

Canadian BCE Inc. Bell Aliant Cogeco Cable Manitoba Tel Quebecor Inc. Rogers Comm. Shaw Comm. TELUS Corp. Cap Wgt Avg LatAm ** AMX NII Holdings, Inc. Cap Wgt Avg U.S. AT&T Comcast Corp. Time Warner Cable Verizon Comm. Cap Wgt Avg

2013 7.8 x 7.3 x 6.7 x 5.7 x 6.6 x 7.5 x 8.2 x 8.0 x 7.7 x

EV/EBITDA 2014E 7.3 x 7.7 x 6.7 x 5.6 x 7.0 x 6.9 x 8.0 x 7.8 x 7.4 x

2015E 7.3 x 7.9 x 6.3 x 5.6 x 6.6 x 6.7 x 7.7 x 7.4 x 7.2 x

2013 14.7 x 13.3 x 13.8 x 15.0 x 12.1 x 13.6 x 15.1 x 16.8 x 14.8 x

EV/Cash EBIT 2014E 13.3 x 13.3 x 12.9 x 13.6 x 14.0 x 12.8 x 16.6 x 16.4 x 14.3 x

2015E 13.1 x 12.9 x 11.0 x 13.0 x 12.3 x 12.2 x 14.2 x 14.7 x 13.3 x

2013 17.7 x 16.4 x 11.8 x 17.5 x 16.7 x 14.1 x 16.2 x 18.1 x 16.6 x

P/E 2014E 15.8 x 17.8 x 12.3 x 18.6 x 14.5 x 13.8 x 14.1 x 17.6 x 15.6 x

2015E 15.8 x 18.9 x 11.8 x 17.7 x 12.7 x 13.3 x 14.4 x 16.4 x 15.2 x

2013 5.7% 6.2% 7.1% -0.2% 5.9% 5.3% 5.7% 4.0% 5.2%

FCF Yield 2014E 5.5% 4.9% 7.8% 6.3% 5.4% 5.9% 3.0% 4.1% 5.0%

2015E 5.8% 6.7% 12.2% 6.1% 7.2% 6.2% 4.1% 4.9% 5.8%

Target Multiples EV/EBITDA P/E EV/Cash EBIT FCF Yield 7.4 x 7.9 x 6.7 x 5.9 x 6.6 x 8.1 x 8.1 x 7.7 x 7.6 x 15.9 x 16.0 x 12.4 x 17.9 x 15.7 x 15.5 x 14.0 x 15.9 x 15.6 x 13.2 x 12.9 x 11.1 x 13.7 x 12.2 x 14.9 x 14.8 x 14.8 x 14.0 x 5.8% 6.8% 10.8% 5.9% 6.1% 5.5% 4.4% 5.2% 5.6%

4 5

5.9 x 13.8 x 5.9 x

5.0 x 6.2 x 5.0 x

4.8 x 4.0 x 4.8 x

12.1 x n.m. 12.1 x

10.1 x 20 x 10.1 x

9.3 x 6.1 x 9.3 x

11.4 x n.m. 11.4 x

8.7 x n.m. 8.7 x

8.2 x n.m. 8.2 x

6.2% n.m. 6.2%

7.8% n.m. 7.8%

9.0% n.m. 9.0%

5.7 x 6.6 x 5.7 x

8.7 x n.m. 8.6 x

11.5 x 21.6 x 11.5 x

7.9% n.m. 7.9%

6.3 x 8.7 x 8.0 x 7.4 x 7.4 x

5.9 x 7.7 x 7.4 x 7.2 x 6.9 x

6.1 x 7.2 x 7.2 x 6.8 x 6.7 x

12.8 x 12.7 x 13.4 x 12.6 x 12.7 x

11.8 x 11.3 x 13.3 x 11.1 x 11.5 x

12.6 x 10.4 x 12.6 x 10.3 x 11.3 x

14.1 x 21.4 x 20.5 x 17.2 x 17.4 x

13.7 x 18.1 x 18.0 x 13.8 x 15.1 x

14.8 x 15.1 x 16.5 x 12.5 x 14.2 x

4.3% 5.7% 5.2% 6.7% 5.5%

6.0% 5.9% 5.8% 7.1% 6.3%

5.5% 6.9% 5.9% 7.9% 6.7%

6.0 x 7.5 x 7.1 x 6.9 x 6.8 x

14.8 x 16.4 x 16.0 x 14.2 x 15.1 x

12.3 x 10.8 x 12.4 x 11.0 x 11.5 x

5.6% 6.3% 6.1% 6.3% 6.0%

Week of March 31, 2014

March 28, 2014

* ** 1 2 3 4 5

Includes minority interest, working capital deficit, and tax shields. Note: AMX and NIHD are also covered by Andres Coello EV and valuation metrics are pro-forma Verizon Wireless transaction BCE, BA, QBR, RCI, T, T.N, TWC, CMCSA, and VZ FCF yields are fully taxed. BA, BCE, MBT, T.TO, TWC, and VZ FCF yields include voluntary pension contributions. AMX excludes acquisition of KPN and Telekom Austria stakes Using NTM estimates, one year forward EBITDA includes wireless equipment subsidies EBITDA and Cash EBIT represents QBR's proportionate share of TVA and QMI

Normalized Adjusted Earnings used. BA EPS excludes customer relationship amortization expense. U.S. and International companies stated in US$ Sources: Scotiabank GBM estimates, Company reports, Factset

16

Converging Networks

Exhibit 20: Valuation Comparables (Continued)

(C$ and US$ millions, except per share data)

Canadian BCE Inc. Bell Aliant Cogeco Cable Manitoba Tel Quebecor Inc. Rogers Comm. Shaw Comm. TELUS Corp.
1 1 2 4

Revenue (Cons.) 2013 2014E 2015E 20,400 2,759 1,692 1,634 4,339 12,706 5,142 11,404 20,987 2,715 1,918 1,629 4,380 13,065 5,274 11,930 21,156 2,659 1,992 1,620 4,447 13,407 5,315 12,259

EBITDA (Cons.) 2013 2014E 2015E 7,694 1,274 781 479 1,069 4,980 2,042 4,018 8,252 1,229 878 510 1,098 5,039 2,140 4,310 8,285 1,198 927 510 1,162 5,225 2,203 4,543

Cash EBIT (Cons.) 2013 2014E 2015E 4,072 704 373 183 586 2,740 1,111 1,908 4,538 709 453 210 550 2,725 1,024 2,057 4,611 733 531 219 628 2,857 1,196 2,291

Normalized EPS 2013 2014E 2015E $2.61 $1.63 $3.80 $1.70 $1.58 $3.42 $1.60 $2.02 $3.01 $1.52 $4.56 $1.63 $1.85 $3.33 $1.86 $2.29 $3.01 $1.43 $4.77 $1.71 $2.12 $3.46 $1.82 $2.46

2013 $2.64 $1.65 $3.10 -$0.06 $1.55 $2.57 $1.48 $1.45

FCFPS 6 2014E $2.60 $1.32 $4.39 $1.90 $1.46 $2.70 $0.79 $1.66

2015E $2.78 $1.80 $6.88 $1.86 $1.94 $2.82 $1.09 $1.97

LatAm ** AMX NII Holdings, Inc. 62,781 4,855 66,230 5,741 68,774 6,183 20,491 351 21,290 735 22,115 1,154 9,977 (625) 10,497 225 11,431 754 $2.05 ($9.60) $2.22 ($4.63) $2.34 ($2.39) $1.46 -$1.63 $1.51 -$1.32 $1.73 -$3.44

U.S. AT&T Comcast Corp. Time Warner Cable Verizon Comm.

128,752 64,657 22,120 120,550

131,634 69,169 22,915 124,172

131,555 72,031 23,554 127,424

41,290 21,434 7,980 42,064

42,389 22,839 8,347 44,173

41,001 24,316 8,577 46,141

20,346 14,630 4,782 25,460

21,389 15,522 4,643 27,181

20,001 16,915 4,874 29,156

$2.50 $2.43 $6.61 $2.85

$2.56 $2.74 $7.55 $3.45

$2.37 $3.28 $8.24 $3.80

$1.50 $2.96 $7.10 $3.30

$2.10 $2.91 $7.82 $3.35

$1.94 $3.41 $7.98 $3.72

Canadian BCE Inc. Bell Aliant Cogeco Cable Manitoba Tel Quebecor Inc. Rogers Comm. Shaw Comm. TELUS Corp. Cap Wgt Avg LatAm ** AMX NII Holdings, Inc. Cap Wgt Avg U.S. AT&T Comcast Corp. Time Warner Cable Verizon Comm. Cap Wgt Avg
** 1 2 3 4 5 6 7

Revenue Growth, Organic 2013 2014E 2015E

1 1 2 4 5

EBITDA Growth, Organic 2013 2014E 2015E 1.9% -1.3% 7.1% -5.8% 4.4% 2.1% 3.9% 4.6% 2.7% 1.3% -3.5% 4.0% 6.2% 3.7% 0.6% 3.4% 3.8% 1.9% 0.1% -2.5% 5.6% 0.4% 5.2% 3.7% 2.5% 7.9% 3.1%

Cash EBIT Growth 2013 2014E 2015E -3.4% 0.7% 23.9% -2% 4.3% 1.1% 4.8% 2% 0.9% 7.6% 0.8% 10% 14.7% -6.0% -1.2% -7.9% 0.0% 1.7% 1.0% 3.4% 17% 4.2% 14.1% 4.9% 16.9% 0.0% 4.3%

2013 -4.1% -0.4% 2% -16.9% 11.0% -0.9% -1.0% 10% 0.7%

EPS Growth 2014E 2015E 17.1% -6.6% 19.9% -3.9% 16.9% -2.6% 16.1% 13% 10.3% 1.3% -6.0% 4.4% 5.1% 14.8% 3.9% -2.1% 7% 3.1%

FCFPS Growth 7 2013 2014E 2015E 15% -1% -2.1% 0% 105% 4% 31.3% -16% 9% -1.5% -20% 42% 15% -6% 5% -47% 14.7% -1.1% 6.9% 37% 57% 4% 33% 5% 38% 18.4% 16.2%

0.7% -0.1% 3.9% -4.1% 0.8% 0.9% 3.1% 4.6% 1.8%

0.8% -1.6% 3.3% -0.3% 2.4% 2.3% 3.0% 3.8% 2.0%

0.8% -2.1% 3.9% -0.6% 1.5% 2.6% 0.8% 3.8% 1.8%

6.6% -20.2% 6.5%

5.5% 18.3% 5.5%

3.8% 7.7% 3.9%

1.9% -62% 1.7%

3.9% 109% 4.2%

3.9% 57% 4.0%

-1.9% n.m. -1.9%

5.2% n.m. 5.2%

8.9% 236% 9.5%

19.2% n.m. 19.2%

8.1% n.m. 8.1%

5.7% n.m. 5.7%

10.2% n.m. 10.2%

3.5% n.m. 3.5%

14.4% n.m. 14.4%

1.8% 5.8% 2.6% 4.1% 3.6%

2.2% 5.6% 3.1% 3.0% 3.4%

-0.1% 5.1% 2.8% 2.6% 2.3%

0.6% 7.9% 1.2% 11.3% 6.2%

2.7% 6.6% 3.9% 5.0% 4.5%

-3.3% 6.5% 2.8% 4.5% 2.2%

-5.7% 5.4% 0.3% 17% 5.5%

5.1% 4.6% -2.9% 6.8% 5.0%

-6.5% 9.0% 5.0% 7.3% 2.9%

8.5% 26% 15% 23% 18%

2.2% 13% 14% 21.0% 12.3%

-7.2% 19% 9% 10.3% 6.5%

-47% 24% 2% 17% -3.9%

39.9% -2% 10% 1.5% 14.2%

-7.2% 17% 2% 19.9% 8.9%

Week of March 31, 2014

Note: AMX and NIHD are also covered by Andres Coello EBITDA, Cash EBIT and EPS includes restructuring. Figures are pro forma sale of Portugal operation. Growth rates except EPS are pro forma Atlantic Broadband and Peer 1 acquisitions. EBITDA includes deferred charges.

March 28, 2014 Page 2 of 3

EBITDA includes wireless equipment subsidies (which are capitalized by MTS but not by its peers) and adjusted for IAS19 adoption. EBITDA growth rates before wireless SAC but include restructuring. EBITDA and Cash EBIT represents QBR's proportionate share of TVA and QMI Proportionate FCF. BCE, BA, QBR, RCI, T, T.N, TWC, CMCSA, VZ figures are fully taxed. AMX F12 figure excludes acquisition of KPN and Telekom Austria stakes. BCE, Bell Aliant, TELUS, MBT, SJR, TWC, and VZ growth rates exclude voluntary pension contributions.

Normalized Adjusted Earnings used. BA EPS excludes customer relationship amortization expense. U.S. and International companies stated in US$ Sources: Scotiabank GBM estimates, Company reports, Factset

17

Converging Networks

Exhibit 20: Valuation Comparables (Continued)

(C$ and US$ millions, except per share data)

Canadian BCE Inc. Bell Aliant Cogeco Cable Manitoba Tel Quebecor Inc. Rogers Comm. Shaw Comm. TELUS Corp. Cap Wgt Avg LatAm ** AMX NII Holdings, Inc. Wgt Avg U.S. AT&T Comcast Corp. Time Warner Cable Verizon Comm. Cap Wgt Avg
3

Capex/Revenue (Cons.) 2013 2014E 2015E 17.5% 20.7% 24.1% 18.1% 15.0% 17.6% 17.1% 18.5% 18.0% 17.4% 20.6% 22.1% 18.4% 16.9% 17.7% 20.0% 18.4% 18.3% 17.1% 17.5% 19.9% 18.0% 15.1% 17.7% 17.9% 17.9% 17.5%

Deprec./Revenue (Cons.) 2013 2014E 2015E 16.6% 22.3% 22.6% 18.9% 15.4% 14.9% 16.6% 15.8% 16.5% 16.7% 22.7% 24.4% 21.2% 15.5% 15.3% 13.9% 15.6% 16.4% 16.7% 22.5% 23.5% 20.8% 15.4% 15.3% 14.4% 15.9% 16.5%

Net Debt/EBITDA (Cons.) 2013 2014E 2015E 2.7 x 2.5 x 3.6 x 1.7 x 3.1 x 2.2 x 2.2 x 1.9 x 2.4 x 2.5 x 2.7 x 3.2 x 1.6 x 3.1 x 2.8 x 2.1 x 2.1 x 2.5 x 2.5 x 2.8 x 2.8 x 1.5 x 2.8 x 2.8 x 1.9 x 2.2 x 2.4 x

2013

Net Debt (Cons.) 2014E 2015E 20,305 3,281 2,830 814 4,684 14,131 4,503 9,179 20,304 3,298 2,555 779 4,445 14,598 4,168 9,799

20,588 3,157 2,866 835 4,584 10,967 4,546 7,552

16.7% 20.1% 17.0%

16.3% 8.9% 16.1%

15.5% 6.5% 14.9%

12.3% 15.4% 13.1%

13.0% 12.9% 13.4%

13.4% 10.6% 13.6%

1.6 x 12.4 x 1.7 x

1.6 x 7.2 x 1.6 x

1.5 x 5.1 x 1.5 x

33,300 4,373

33,146 5,310

33,326 5,926

16.3% 10.2% 14.5% 13.8% 13.8%

16.0% 10.6% 16.2% 13.7% 13.9%

16.0% 10.3% 15.7% 13.3% 13.7%

14.3% 12.2% 14.8% 13.8% 13.6%

14.2% 11.9% 14.8% 13.5% 13.4%

14.5% 11.2% 14.8% 13.1% 13.2%

1.7 x 2.2 x 3.1 x 1.5 x 1.8 x

1.7 x 1.9 x 3.1 x 2.2 x 2.0 x

1.8 x 1.6 x 3.1 x 2.0 x 1.9 x

71,449 46,129 24,527 38,697

73,472 42,377 25,863 97,986

73,563 40,121 26,693 91,906

Week of March 31, 2014

** 1 2 3

Note: AMX and NIHD are also covered by Andres Coello F12 pro forma sale of Portugal operation. F13 pro forma Atlantic Broadband and Peer 1 acquisitions. Capex excludes deferred charges. Net debt and leverage are pro-forma Verizon Wireless transaction. U.S. and International companies stated in US$ Sources: Scotiabank GBM estimates, Company reports, Factset

March 28, 2014 Page 3 of 3

Converging Networks

Week of March 31, 2014

Net Asset Valuations

Pricing in this section as at March 28, 2014.

Exhibit 21: AT&T Net Asset Valuation

(US$ millions, except per share data) Share Price Consolidated EV/cash EBIT Multiple EV/EBITDA Multiple P/E Multiple FCF Yield (NTM, fully taxed) 1-Year ROR

Current $35.07 12.0 x 6.0 x 14.0 x 5.9%

1-Year Target $35.00 12.2 x 6.0 x 14.8 x 5.7% 5.1%

Current
EBITDA 2012 2013E 2014E 2015E 2016E EV/EBITDA Multiple

Value per Share

1-Year Target
EV/EBITDA Multiple

Value per Share

Value

Value +

Wireline Wireless Other Total Telecom

18,408 23,595 (692) 41,311

17,176 25,391 (1,277) 41,290

16,095 27,070 (776) 42,389

14,807 26,968 (775) 41,001

14,870 26,780 (773) 40,877

4.25 x 7.00 x 6.00 x

67,127 189,312 (4,653) 251,787

$12.71 $35.85 -$0.88 $47.69

4.00 x 7.00 x 6.00 x

59,292 188,450 (4,646) 243,096

$11.44 $36.37 -$0.90 $46.91

Other

Tax Shields (discounted 25%) Equity investments Total Other

8,235 8,235

$0.00 $1.56 $1.56

0.0 8,235 8,235

$0.00 $1.59 $1.59

Total Gross Asset Value Less: Total Net Debt (Cash) FD Shares Outstanding (M) NET ASSET VALUE DCF

260,022 74,852

$49.25 $14.18 5,280

251,331 73,494

$48.50 $14.18 5,182

185,170

$35.07

177,837

$34.32 $35.55

Average of DCF and NAV

$34.94

March 28, 2014

+

Enterprise Values calculated using 12 month forward values

Source: Company reports; FactSet; Scotiabank GBM estimates.

18

Converging Networks

Week of March 31, 2014

Exhibit 22: BCE Net Asset Valuation

(C$ Millions, except per share data) Share Price P/E Multiple on BCE Consolidated EV/EBITDA (NTM) FCF Yield (NTM, fully taxed) FCF Yield (NTM, actual tax) Consolidated Cash EBIT multiple (NTM) ROR EBITDA 2014E 2015E Current EV/EBITDA Mult. NTM or Share Price Value+ Current $47.45 15.8x 7.3x 5.6% 6.3% 13.3x 1-Year Target $48.00 15.9x 7.4x 5.8% 5.8% 13.2x 6.4%

2013E Bell Canada Bell Canada - Wireline/Other Bell Canada - Wireless Bell Media MLSE Q9 Less: Bell Net Debt 2 Total Bell Canada Other/Corp Bell Aliant (BA) * Total Gross Asset Value Less: Bell working capital deficit Bell Preferred Shares (50%) Total Net Debt (Cash) Plus: NPV of Tax shield Less: 30% Discount on Inukshuk Shares Outstanding (M) Net Asset Value
1

2016E

Shares Owned

Value per Share

1-Year Target NTM EV/EBITDA Mult or Share Price Value+

Value per Share

3,410 2,340 683

3,621 2,636 766

3,555 2,710 821

3,499 2,786 845

100% 100% 82% 28% 30%

6.6x 7.8x 10.0x

23,938 20,571 6,422 400 185 15,693 35,823

$30.85 $26.51 $8.28 $0.52 $0.24 $20.23 $46.17

6.5x 8.0x 10.0x

23,018 21,832 6,808 400 185 15,217 37,026

$29.67 $28.14 $8.77 $0.52 $0.24 $19.61 $47.72

100 M

27.03

2,713 38,536

$3.50 $49.67

$27.00

2,710 39,736

$3.49 $51.21

507 1,698 2,204 484 -

$0.65 $2.19 $2.84 $0.62 $0.00 775.9

393 1,698 2,090 -

$0.51 $2.19 $2.69 $0.00 $0.00 775.9

36,816

$47.45

37,646

$48.52 $48.29

Target Price Calculation (Average of NAV and DCF) * Reflects Bell Canada's proportionate interest in Bell Aliant. 1 EBITDA estimates are consolidated. Ownership % reflects Bell's proportionate share.
2

Reflects Bell's proportionate share of CTVgm debt. + Enterprise Values calculated using 12 month forward values.

Source: FactSet; company reports; Scotiabank GBM estimates.

19

Converging Networks

Week of March 31, 2014

Exhibit 23: Bell Aliant Net Asset Valuation

(C$ millions, except per share data) Bell Aliant Share Price EV/EBITDA multiple (NTM) P/E multiple (NTM) - fully taxed 1 FCF yield (NTM) - fully taxed 2 FCF yield (NTM) - actual tax 2 Cash EBIT (NTM) multiple 1-Year ROR

Current $27.03 7.7 x 18.1 x 5.2% 5.4% 13.2 x

1-Year Target $27.00 7.9 x 16.0 x 6.8% 6.8% 12.9 x 6.9%

EBITDA 3 2011 2012 2013E 2014E 2015E 2016E

Current
EV/EBITDA Multiple

Value per Share

1-Year Target
EV/EBITDA Multiple

Value

Value

Value +

per Share

Telecom Other

Telecom

1,290

1,291

1,274

1,229

1,198

1,215

7.73 x

9,446

$41.23

7.25 x

8,717

$38.03

NPV of tax shield

-53 0 9,393 3,201

-$0.23 $0.00 $41.00 $13.97 229.1

0 0 8,717 3,368

$0.00 $0.00 $38.03 $14.70 229.2

Pension deficit 4 Total Gross Asset Value Less: Total Net Debt 5 FD Shares Outstanding (000) NET ASSET VALUE

6,192

$27.03

5,349 Average of NAV and DCF

$23.34
26.56

+ 1 2 3 4 5

Enterprise Value calculated using 12 month forward EBITDA P/E excludes purchase price amortization expense of ~$80M per annum, pre-tax Includes $65M-60M one-time cash tax payment in 2014 for change in partnership income deferral rules. EBITDA includes restructuring and pension current service cost. Pension solvency deficit (~$700M in early F13) not included as pension cost has been included in EBITDA. Includes non-cash working capital deficit and preferred shares accorded 50% equity treatment.

Source: FactSet; company reports; Scotiabank GBM estimates.

20

Converging Networks

Week of March 31, 2014

Exhibit 24: Comcast Corp. Net Asset Valuation

(US$ millions, except per share data) Share Price Cons. EV/EBITDA Multiple P/E Multiple FCF Yield (NTM, cons.) Cons. EV/Cash EBIT Multiple 1-Year ROR Current $49.34 7.5 x 17.0 x 6.1% 11.0 x 1-Year Target $62.00 8.1 x 18.0 x 5.7% 11.6 x 27.5%

Current
EBITDA 2012 2013E 2014E 2015E 2016E EV/EBITDA Multiple

Value per Share

1-Year Target
EV/EBITDA Multiple

Value per Share

Value +

Value +

Cable Communications NBCUniversal (100%) Corporate, Other and Eliminations Total

16,255 4,107 -385

19,977

17,205 4,732 -503

21,434

18,219 5,157 -537

22,839

19,197 5,683 -564

24,316

20,273 6,146 -599

25,819

6.80 x 10.00 x 7.00 x

125,562 52,869 (3,807) 174,623 1,400 471 471 2,342

$47.35 $19.94 -$1.44 $65.85 $0.53 $0.18 $0.18 $0.88

7.50 x 10.00 x 7.00 x

145,972 57,978 (4,008) 199,943 1,400 471 471 2,342

$56.00 $22.24 -$1.54 $76.71 $0.54 $0.18 $0.18 $0.90

Other

NBCU real estate Comcast Spectacor Equity investments Total Other

Total Gross Asset Value Less: Consolidated Net Debt (Cash) Minority Interest FD Shares Outstanding (M) NET ASSET VALUE DCF

176,965 46,129

$66.73 $17.39 2,652

202,285 41,819

$77.60 $16.04 2,607

130,836

$49.34

160,466

$61.56 $64.51

Average of DCF and NAV

$62.04

March 28, 2014

+

Enterprise Values calculated using 12 month forward values

Source: FactSet; company reports; Scotiabank GBM estimates.

21

Converging Networks

Week of March 31, 2014

Exhibit 25: Cogeco Cable Net Asset Valuation

(C$ thousands, except per share data) Cogeco Cable Inc. (CCA) Share Price EV/EBITDA Multiple (NTM) P/E Multiple (NTM) FCF Yield (NTM) FCF Yield, fully taxed (NTM) EV/Cash EBIT Multiple (NTM) 1-Year ROR Current $56.24 6.7 x 12.0 x 10.4% 10.4% 11.8 x 1-Year Target $63.00 6.5 x 11.8 x 11.2% 10.2% 10.9 x 14.2%

EBITDA 2014E 2015E 2016E

EV/EBITDA Multiple Value +

Value per Share

EV/EBITDA Multiple Value +

Value per Share

Cogeco Cable

Residential CDS Management fees and intersegment Cable & Internet - Canada Cable & Internet - U.S. Less: Net Debt 1

622,914 653,818 111,945 124,819 (27,443) (28,108) 707,416 701,047 170,462 176,831

677,567 138,237 (29,022) 745,382 181,978

4% 11%

3%

5.50 x 11.39 x 5.50 x 6.90 x 5.75 x

3,524,749 1,485,801 -153,062 4,857,488 1,001,426 3,101,266 2,757,648

$71.88 $30.30 -$3.12 $99.06 $20.42 $63.25 $56.24

5.50 x 9.50 x 5.50 x 6.57 x 5.75 x

3,671,866 1,259,819 -157,512 4,774,173 1,033,966 2,808,034 3,000,104

$74.98 $25.73 -$3.22 $97.49 $21.11 $57.34 $61.26 $63.28 48,971

March 28, 2014

NET ASSET VALUE

Avg of NAV and DCF Shares Outstanding ('000)

+ 1

49,034

Enterprise Value calculated using 12 month forward EBITDA Includes US$1.36B for Atlantic Broadband acquisition and $635M for Peer 1 acquisition.

Source: FactSet; company reports; Scotiabank GBM estimates.

22

Converging Networks

Week of March 31, 2014

Exhibit 26: Manitoba Telecom Services Net Asset Valuation

(C$ thousands, except per share data) Share Price Consolidated EV/EBITDA Mult. 2 Consolidated P/E Mult. FCF Yield (NTM) EV/Cash EBIT Mult. 2 1-Year ROR Current $30.23 5.6 x 18.3 x 6.3% 13.5 x 1-Year Target $31.00 5.9 x 17.9 x 5.9% 13.7 x 8.2%

Current
EBITDA 2013E 2014E 2015E 2016E EV/EBITDA Multiple

Value per Share

1-Year Target
EV/EBITDA Multiple

Value per Share

Value

Value +

Telecom
MTS (Manitoba) 1 Allstream (National) Total Telecom 399,400 79,700 479,100 403,657 106,123 509,780 403,715 106,349 510,064 399,526 111,112 510,638 6.02 x 4.00 x 2,431,153 424,716 2,855,869 $34.58 $6.04 $40.62 6.25 x 4.00 x 2,516,740 430,112 2,946,851 $34.47 $5.89 $40.36

Tax Shield and Legal Liab

Tax Shield Value Pension Cost 3 Total Gross Asset Value Less: Total Net Debt (Cash) FD Shares Outstanding ('000) NET ASSET VALUE DCF Value Average of DCF and NAV
1
2 3

305,000

$4.34 $0.00

247,978 0 3,194,829 987,884

$3.40 $0.00 $43.75 $13.53 73,019

3,160,869 1,035,700

$44.96 $14.73 70,300

2,125,169

$30.23

2,206,945

$30.22
$32.25 $31.24

Net of wireless deferred costs and restructuring.

Excludes tax shield value. Pension service costs are included in EBITDA and hence deficit is not included in the NAV calculation. However, on a take-out of the MTS unit, we believe pension solvency deficit of approx. $300M, reflecting all 2013 voluntary contributions, will have to be included. Enterprise Values calculated using 12 month forward values

March 28, 2014

Source: FactSet; company reports; Scotiabank GBM estimates.

23

Converging Networks

Week of March 31, 2014

Exhibit 27: Quebecor Inc. Net Asset Valuation

C$ thousands, except per share data

Share Price Prop. EV/EBITDA Multiple P/E Multiple FCF Yield (NTM) 1 Prop. EV/cash EBIT Multiple FCF Yield (NTM) fully taxed 2 1-Year ROR

Current $26.90 6.9 x 14.9 x 5.9% 13.5 x 5.9%

1-Year Target $33.50 6.6 x 15.6 x 6.1% 12.1 x 6.1% 24.9%

EBITDA 2012 2013E 1,291,100 2014E 1,363,085 2015E 1,438,884 2016E 1,504,095

Shares Owned

EV/EBITDA Multiple 7.20 x

Current Value + 9,954,919

Value per share $68.80

EV/EBITDA Multiple 6.75 x

1-yr Target Value + 9,821,452

Value per share $80.38

Cable (Videotron, including wireless)

1,213,400

Newspapers

81,100 32,800 35,807

84,000 20,600 48,100

53,116 19,452 45,966

61,858 17,905 49,536

65,582 16,981 53,345 23.8 M

4.0 x 5.0 x 4.2 x $9.02 6.9 x

221,121 95,347 196,036 (18,378) 214,414 10,467,422 4,274,100 6,193,322

$1.53 $0.66 $1.35 ($0.13) $1.48 $72.34 $29.54 $42.80 $0.72 $42.08 $10.35 $31.73 $4.49 ($0.34) 144,700

4.0 x 5.0 x 3.6 x $9.02 6.5 x

251,119 88,382 176,607 (35,573) 212,180 10,337,560 4,300,302 6,037,258

$2.06 $0.72 $1.45 ($0.29) $1.74 $84.60 $35.19 $49.41 $0.85 $48.56 $11.94 $36.61 $5.32 ($0.49) 122,189

Other (Leisure & Entertainment + NURUN + Portals) TVA gross asset value

TVA net asset value

Less: Net debt (cash) + w/c deficit (surplus)

QMI Cons. Gross Asset Value

1,359,707

1,450,700

1,489,945

1,578,765

1,652,236

Less: QMI Cons. Net Debt + W/C Deficit QMI Equity Less: TVA Minority Interest QBR and CDP share of QMI Equity Less: CDP Minority Interest QBR share of QMI Equity Less: QBR Corporate Debt QBR Corporate FD Shares Outstanding ('000) QBR Net Asset Value
5 4

11.6 M

$9.02

104,205 6,089,117 1,497,923 4,591,194 649,900

$9.02

104,205 5,933,053 1,459,531 4,473,522 649,900

3,400

(6,900)

(8,326)

(10,582)

(12,233)

5.5 x

(48,864)

5.5 x

(60,448)

3,892,430

$26.90

3,763,174
Average NAV and DCF

$30.80 33.49

March 28, 2014 + 1 2 3 4 5

Enterprise Value calculated using 12 month forward values Assumes two years of cash taxes (F12 and F13) are paid in 2013. Assumes 2012 cash taxes are paid in 2012, not in 2013. Includes News Media severance expense. 24.6% of QMI held by CDP Includes $500M of convertible debentures at Quebecor Inc.

Source: FactSet; company reports; Scotiabank GBM estimates.

24

Converging Networks

Week of March 31, 2014

Exhibit 28: Rogers Communications Net Asset Valuation

(C$ thousands, except per share data) Share Price EV/Cash EBIT Multiple (net of tax shield) EV/EBITDA Multiple (net of tax shield) P/E Multiple (NTM) Free Cash Flow Yield (NTM actual tax) Free Cash Flow Yield (NTM fully taxed) 1-Year ROR Current $45.85 12.6 x 6.8 x 13.6 x 6.3% 5.9% 1-Year Target $46.00 13.2 x 7.2 x 13.0 x 6.5% 6.3% 4.4%

Current
EBITDA 2012 2013E 2014E 2015E 2016E Shares Owned EV/EBITDA Mult. or Share Price

Value *

Value per Share

1-Year Target
EV/EBITDA Mult. or Share Price

Value *

Value per Share

Rogers Wireless
Rogers Wireless Inukshuk Less: Wireless Debt Total Rogers Wireless 3,063,000 3,157,000 3,193,181 3,285,188 3,408,331 6.98 x 22,458,244 1,642,333 20,815,911 $43.44 $3.18 $40.26 6.50 x 21,551,911 881,333 20,670,578 $42.29 $1.73 $40.56

0.9%

3.1%

1.1%

2.9%

3.7%

Rogers Cable Inc.

Rogers Cable Less: Cable Debt Total Rogers Cable

1,694,000
3.6%

1,816,000
5.0%

1,870,654
2.2%

1,942,589
3.7%

2,027,388
3.8%

6.5 x

12,275,024 2,787,667 9,487,358

$23.74 $5.39 $18.35

6.5 x

12,763,305 2,123,967 10,639,338

$25.05 $4.17 $20.88

Rogers Media Inc.

Broadcasting (incl Citytv) Publishing BlueJays/SkyDome Less: Media Debt Total Rogers Media

220,196 182 -30,378

190,000 5.6%

204,845 6,390 -55,235

156,000 -21.8%

214,191 24,758 -60,274

178,675 9.3%

242,614 25,501 -62,082

206,033 15.3%

249,893 26,266 -63,945

212,214 3.0%

7.0 x 5.5 x 5.5 x 7.3 x 6.0 M 10.7 M $54.35 $56.24 30.0%

1,548,600 137,183 -333,970 0 1,351,813 324,436 601,089 860,000 535,658 1,249,868 -1,331,249 7,963,000 (9,294,249)
23,610,700

$3.00 $0.27 -$0.65 $0.00 $2.61 $0.63 $1.16 $1.66 $1.04 $2.42 -$2.57 $15.40 -$17.98 $45.67 $0.18

7.0 x 5.5 x 5.5 x 8.1 x $54.35 $40.00 30.0%

1,710,916 141,299 -343,989 0 1,508,226 324,436 427,517 860,000 483,586 1,128,367 -1,364,002 12,715,681 (14,079,683)
19,773,076

$3.36 $0.28 -$0.68 $0.00 $2.96 $0.64 $0.84 $1.69 $0.95 $2.21 -$2.68 $24.95 -$27.63 $38.80 $0.18

Investments

Cogeco Inc. (CGO) Cogeco Cable (CCA) 37.5% stake in MLSE and other investments Less: Holding Company Discount Total Investments (149,000) (203,542) (208,654) (213,472)

Corporate Corporate Expense and Elim. (113,000) Less: Corporate Debt Net of Cash Total Corporate

6.5 x

6.5 x

NAV Excluding Tax Shields Plus: Present Value of Tax Shields (Discounted 25%) NET ASSET VALUE Shares Outstanding ('000)

93,750 23,704,450

$45.85
517,000

93,750 19,866,826

$38.99

509,591 Average of DCF and NAV $46.19

* Enterprise Value calculated using 12 month forward EBITDA or Revenue

Source: FactSet; company reports; Scotiabank GBM estimates.

25

Converging Networks

Week of March 31, 2014

Exhibit 29: Shaw Communications Net Asset Valuation

(C$ thousands, except per share data) Share Price EV/EBITDA Multiple (NTM) P/E Multiple (NTM) Cash EBIT Multiple (NTM) FCF Yield (NTM) 1-Year ROR

Current $26.25 7.8 x 14.3 x 15.2 x 3.7%

1-Year Target $29.00 8.1 x 15.6 x 14.8 x 4.0% 14.6%

EBITDA 2012 2013E 2014E

Current
EV/EBITDA Mult. 2015E 2016E or Share Price

Value +

Value per Share

1-Year Target
EV/EBITDA Mult. or Share Price

Value +

Value per Share

Cable

Cable and Internet Total Cable Enmax Business-to-Business Shaw Direct Canwest/Media (Proportionate)

1,426,000

1,503,996

1,578,521

1,646,684

1,711,833

7.9 x

12,780,156 12,780,156 187,364 195,000 751,279 3,132,785 4,266,428

$28.21 $28.21 $0.41 $0.43 $1.66 $6.92 $9.42 -$0.02 $37.61 $11.36 453,000

7.5 x

12,634,424 12,634,424 203,834 234,000 850,162 3,179,428 4,467,423 0 17,101,847 4,921,516

$27.50 $27.50 $0.44 $0.51 $1.85 $6.92 $9.72 $0.00 $37.22 $10.71 459,507

20,455 39,000 166,000 307,000 39,000 161,000 325,000

19,674 39,000 157,846 344,831

21,641 39,000 144,800 350,428

23,372 39,000 139,461 355,312

9.0 x 5.0 x 5.0 x 9.0 x

9.0 x 6.0 x 6.0 x 9.0 x

Tax Shield (discounted 25%) Total Gross Asset Value Less: Total Net Debt (Cash) 2 FD Shares Outstanding ('000) NET ASSET VALUE

-8,333 17,038,250 5,147,000

11,891,250

$26.25

12,180,331 Average (DCF, NAV)

$26.51 28.78
March 28, 2014

+ Enterprise Value calculated using 12 month forward values

1 2

Includes equipment subsidies. Includes working capital deficit and preferred shares accorded 50% equity treatment.

Source: FactSet; company reports; Scotiabank GBM estimates.

26

Converging Networks

Week of March 31, 2014

Exhibit 30: Time Warner Cable Net Asset Valuation

(US$ millions, except per share data) Share Price Cash EBIT Multiple EV/EBITDA Multiple P/E Multiple FCF Yield (NTM, fully taxed) 1-Year ROR Current $135.87 13.1 x 7.3 x 17.3 x 5.8% 1-Year Target $138.00 12.4 x 7.1 x 16.0 x 6.1% 3.9%

Current
EBITDA 2011 2012 2013E 2014E 2015E 2016E EV/EBITDA Multiple

Value per Share

1-Year Target
EV/EBITDA Multiple

Value per Share

Value

Value +

Cable Other Total Telecom

7,226 7,226

7,824 7,824

7,980 7,980

8,347 8,347

8,577 8,577

8,974 8,974

7.33 x

61,590 0 61,590

$212.67 $0.00 $212.67

7.00 x

60,728 0 60,728

$226.24 $0.00 $226.24

Other

Adelphia Tax Shields Equity investments Total Other

1,664 0 1,664

$5.74 $0.00 $5.74

1,480 0 1,480

$5.51 $0.00 $5.51

Total Gross Asset Value Less: Total Net Debt (Cash) FD Shares Outstanding (M) NET ASSET VALUE DCF

63,254 23,906

$218.42 $82.55 290

62,208 26068.79989

$231.76 $97.12 268

39,348

$135.87

36,139

$134.64 $146.23

Average of DCF and NAV

$138.43

March 28, 2014

+

Enterprise Values calculated using 12 month forward values

Sources: FactSet; company reports; Scotiabank GBM estimates.

27

Converging Networks

Week of March 31, 2014

Exhibit 31: TELUS Net Asset Valuation

(C$ millions, except per share data) Share Price Consolidated EV/Cash EBIT Multiple Consolidated EV/EBITDA Multiple Consolidated P/E Multiple FCF Yield (NTM, fully taxed) FCF Yield (NTM, actual tax) 1-Year ROR

Current $40.35 16.0 x 7.8 x 17.3 x 4.3% 4.0%

1-Year Target $39.00 14.5 x 7.6 x 15.5 x 5.3% 5.3% 0.5%

Current
EV/EBITDA 2013E 2014E 2015E 2016E Multiple

Value per Share

1-Year Target
EV/EBITDA Multiple

Value per Share

Value +

Value +

Wireline 1 Wireless Total Telecom

1,384 2,634 4,018

1,477 2,777 4,254

1,544 2,942 4,487

1,646 3,055 4,701

7.53 x 8.00 x

11,247 22,543 33,790

$17.71 $35.50 $53.21

6.00 x 8.00 x

9,417 23,760 33,177

$15.24 $38.44 $53.68

Other

Tax Shields (discounted 25%)

-52.2

-$0.08

0.0

$0.00

Total Gross Asset Value Less: Total Net Debt (Cash) Implied Holding Company Discount FD Shares Outstanding (M) NET ASSET VALUE DCF
2

33,738 8,116 0.0

$53.13 $12.78 $0.00 635

33,177 10,256 0.0

$53.68 $16.59 $0.00 618

0.0%

0.0%

25,622

$40.35

22,921

$37.08 $42.03

Average of DCF and NAV

1 2 +

$38.56

Excludes pension interest expense and pension return on assets. Includes working capital deficit. Enterprise Values calculated using 12 month forward values

March 28, 2014

Sources: FactSet; company reports; Scotiabank GBM estimates.

28

Converging Networks

Week of March 31, 2014

Exhibit 32: Verizon Net Asset Valuation

(US$ millions, except per share data) Share Price EV/Cash EBIT Multiple EV/EBITDA Multiple P/E Multiple FCF Yield (NTM, fully taxed) 1-Year ROR Current $47.42 10.9 x 6.7 x 13.4 x 7.3% 1-Year Targ $55.00 11.0 x 6.9 x 14.2 x 6.3% 20.6%

Current
EBITDA 2011A 2012 2013 2014E 2015E 2016E EV/EBITDA Multiple

Value per Share $5.45 $68.30 -$0.96 $72.80

1-Year Target
EV/EBITDA Multiple

Value per Share $9.66 $69.28 -$0.96 $77.98

Value + 22,556 282,504 -3,960 301,100

Value + 39,976 286,783 -3,960 322,799

Wireline Wireless Other Total Telecom

9,417 26,489 -576 35,330

8,803 29,728 -746 37,785

8,700 34,199 -835 42,064

8,789 35,984 -600 44,173

8,867 37,874 -600 46,141

8,934 39,344 -600 47,678

2.59 x 7.75 x 6.60 x

4.50 x 7.50 x 6.60 x

Other

Equity Investments Total Other

1,201 1,201

$0.29 $0.29

1,201 1,201

$0.29 $0.29

Total Gross Asset Value Less: Total Net Debt (Cash) FD Shares Outstanding (M) NET ASSET VALUE DCF

302,301 106,172

$73.09 $25.67 4,136

324,000 96,481

$78.27 $23.31 4,140

196,129

$47.42

227,520

$54.96 $55.16

Average of DCF and NAV

$55.06

March 28, 201

+

Enterprise Values calculated using 12 month forward values

Sources: FactSet; company reports; Scotiabank GBM estimates.

29

.Appendix A: Important Disclosures

Company America Movil BCE Inc. Bell Aliant Inc. Cogeco Cable Inc. Manitoba Telecom Services Inc. NII Holdings, Inc. Quebecor Inc. Rogers Communications Inc. Shaw Communications Inc. TELUS Corporation Verizon Communications Inc. Ticker AMX BCE BA CCA MBT NIHD QBR.B RCI.B SJR.B T VZ Disclosures (see legend below)* M4, T B26, B8, G, S, T, U G, I, T, U G, N1, T, U B9, G, I, S, T, U M4, T I, T G, N1, S, T, U G, S, T, U G, I, J, T, U H.P.230

The following analysts certify that (1) the views expressed in this report in connection with securities or issuers they analyze accurately reflect their personal views and (2) no part of their compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by them in this report: Andres Coello, and Jeff Fan. This research report was prepared by employees of Scotia Capital Inc. and/or its affiliates who have the title of Analyst. All pricing of securities in reports is based on the closing price of the securities principal marketplace on the night before the publication date, unless otherwise explicitly stated. All Equity Research Analysts report to the Head of Equity Research. The Head of Equity Research reports to the Managing Director, Head of Institutional Equity Sales, Trading and Research, who is not and does not report to the Head of the Investment Banking Department. Scotiabank, Global Banking and Markets has policies that are reasonably designed to prevent or control the sharing of material non-public information across internal information barriers, such as between Investment Banking and Research. The compensation of the research analyst who prepared this report is based on several factors, including but not limited to, the overall profitability of Scotiabank, Global Banking and Markets and the revenues generated from its various departments, including investment banking. Furthermore, the research analyst's compensation is charged as an expense to various Scotiabank, Global Banking and Markets departments, including investment banking. Research Analysts may not receive compensation from the companies they cover. Non-U.S. analysts may not be associated persons of Scotia Capital (USA) Inc. and therefore may not be subject to FINRA Rule 2711 restrictions on communications with subject company, public appearances and trading securities held by the analysts. For Scotiabank, Global Banking and Markets Research analyst standards and disclosure policies, please visit http://www.gbm.scotiabank.com/disclosures Scotiabank, Global Banking and Markets Research, 40 King Street West, 33rd Floor, Toronto, Ontario, M5H 1H1. * B26 B8 B9 G H.P.230 I J M4 Legend Thomas C. O'Neill is a director of BCE Inc. and is a director of The Bank of Nova Scotia. Ronald Brenneman is a director of BCE Inc and is a director of The Bank of Nova Scotia. N. Ashleigh Everett is a director of Manitoba Telecom Services Inc. and is a director of The Bank of Nova Scotia. Scotia Capital (USA) Inc. or its affiliates has managed or co-managed a public offering in the past 12 months. Jay Oduwole, a member of Jay Oduwole's household and/or an account related to Jay Oduwole own securities of this issuer. Scotia Capital (USA) Inc. or its affiliates has received compensation for investment banking services in the past 12 months. Scotia Capital (USA) Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services in the next 3 months. Andres Coello, an analyst, prepared this report and is an employee of the Research Department of

Scotiabank Inverlat, S.A., Institucion de Banca Multiple which forms a part of Grupo Financiero Scotiabank Inverlat. N1 S T U Scotia Capital (USA) Inc. had an investment banking services client relationship during the past 12 months. Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes of the issued and outstanding equity securities of this issuer. The Fundamental Research Analyst/Associate has visited material operations of this issuer. Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to, this issuer.

General Disclosures
This report has been prepared by analysts who are employed by the Research Department of Scotiabank, Global Banking and Markets. Scotiabank, together with Global Banking and Markets, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including Scotia Capital Inc. All other trademarks are acknowledged as belonging to their respective owners and the display of such trademarks is for informational use only. Scotiabank, Global Banking and Markets Research produces research reports under a single marketing identity referred to as Globally-branded research under U.S. rules. This research is produced on a single global research platform with one set of rules which meet the most stringent standards set by regulators in the various jurisdictions in which the research reports are produced. In addition, the analysts who produce the research reports, regardless of location, are subject to one set of policies designed to meet the most stringent rules established by regulators in the various jurisdictions where the research reports are produced. Scotia Capital Inc. or an affiliate thereof owns or controls an equity interest in TMX Group Limited and in excess of 1% of the issued and outstanding equity securities thereof. In addition, an affiliate of Scotia Capital Inc. is a lender to TMX Group Limited under its credit facilities. As such, Scotia Capital Inc. may be considered to have an economic interest in TMX Group Limited. This report is provided to you for informational purposes only. This report is not, and is not to be construed as, an offer to sell or solicitation of an offer to buy any securities and/or commodity futures contracts. The securities mentioned in this report may neither be suitable for all investors nor eligible for sale in some jurisdictions where the report is distributed. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, however, Scotiabank, Global Banking and Markets makes no representation or warranty, express or implied, as to their accuracy or completeness. Scotiabank, Global Banking and Markets has policies designed to make best efforts to ensure that the information contained in this report is current as of the date of this report, unless otherwise specified. Any prices that are stated in this report are for informational purposes only. Scotiabank, Global Banking and Markets makes no representation that any transaction may be or could have been effected at those prices. Any opinions expressed herein are those of the author(s) and are subject to change without notice and may differ or be contrary from the opinions expressed by other departments of Scotiabank, Global Banking and Markets or any of its affiliates. Neither Scotiabank, Global Banking and Markets nor its affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. Equity research reports published by Scotiabank, Global Banking and Markets are available electronically via: Bloomberg, Thomson Financial/First Call - Research Direct, Reuters, Capital IQ, and FactSet. Institutional clients with questions regarding distribution of equity research should contact us at 1-800-208-7666. This report and all the information, opinions, and conclusions contained in it are protected by copyright. This report may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions contained in it be referred to without the prior express consent of Scotiabank, Global Banking and Markets.

Additional Disclosures
Canada: This report is distributed by Scotia Capital Inc., a subsidiary of The Bank of Nova Scotia. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Chile: This report is distributed by Scotia Corredora de Bolsa Chile S.A., a subsidiary of The Bank of Nova Scotia. Hong Kong: This report is distributed by The Bank of Nova Scotia Hong Kong Branch, which is authorized by the Securities and Future Commission to conduct Type 1, Type 4 and Type 6 regulated activities and regulated by the Hong Kong Monetary Authority. Mexico: This report is distributed by Scotia Inverlat Casa de Bolsa S.A. de C.V., a subsidiary of the Bank of Nova Scotia. Peru: This report is distributed by Scotia Sociedad Agente de Bolsa S.A., a subsidiary of The Bank of Nova Scotia. Singapore: This report is distributed by The Bank of Nova Scotia Asia Limited, a subsidiary of The Bank of Nova Scotia. The Bank of Nova Scotia Asia Limited is authorised and regulated by the Monetary Authority of Singapore, and exempted under Section 99(1)(a),and (b), (c) and (d) of the Securities and Futures Act to conduct regulated activities. United Kingdom and the rest of Europe: Except as otherwise specified herein, this report is distributed by Scotiabank Europe plc, a subsidiary of The Bank of Nova Scotia. Scotiabank Europe plc is authorized by the Prudential Regulation Authority (PRA) and regulated by the PRA and the Financial Conduct Authority (FCA). Scotiabank Europe plc complies with all FCA requirements concerning research and the associated disclosures and these are indicated on the research where applicable. United States: This report is distributed by Scotia Capital (USA) Inc., a subsidiary of Scotia Capital Inc., and a registered U.S. broker-dealer. All transactions by a U.S. investor of securities mentioned in this report must be effected through Scotia Capital (USA) Inc. Non-U.S. investors wishing to effect a transaction in the securities discussed in this report should contact a Scotiabank, Global Banking and Markets entity in their local jurisdiction unless governing law permits otherwise.

Definition of Scotiabank, Global Banking and Markets Equity Research Ratings & Risk Rankings We have a four-tiered rating system, with ratings of Focus Stock, Sector Outperform, Sector Perform, and Sector Underperform. Each analyst assigns a rating that is relative to his or her coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Our risk ranking system provides transparency as to the underlying financial and operational risk of each stock covered. Statistical and judgmental factors considered are: historical financial results, share price volatility, liquidity of the shares, credit ratings, analyst forecasts, consistency and predictability of earnings, EPS growth, dividends, cash flow from operations, and strength of balance sheet. The Director of Research and the Supervisory Analyst jointly make the final determination of all risk rankings. The rating assigned to each security covered in this report is based on the Scotiabank, Global Banking and Markets research analysts 12-month view on the security. Analysts may sometimes express to traders, salespeople and certain clients their shorter-term views on these securities that differ from their 12-month view due to several factors, including but not limited to the inherent volatility of the marketplace.
Ratings Risk Rankings

Focus Stock (FS) The stock represents an analysts best idea(s); stocks in this category are expected to significantly outperform the average 12-month total return of the analysts coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Sector Outperform (SO) The stock is expected to outperform the average 12-month total return of the analysts coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Sector Perform (SP) The stock is expected to perform approximately in line with the average 12-month total return of the analysts coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Sector Underperform (SU) The stock is expected to underperform the average 12-month total return of the analysts coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Other Ratings Tender Investors are guided to tender to the terms of the takeover offer. Under Review The rating has been temporarily placed under review, until sufficient information has been received and assessed by the analyst.

Low Low financial and operational risk, high predictability of financial results, low stock volatility. Medium Moderate financial and operational risk, moderate predictability of financial results, moderate stock volatility. High High financial and/or operational risk, low predictability of financial results, high stock volatility. Speculative Exceptionally high financial and/or operational risk, exceptionally low predictability of financial results, exceptionally high stock volatility. For risktolerant investors only.

Scotiabank, Global Banking and Markets Equity Research Ratings Distribution*

Distribution by Ratings and Equity and Equity-Related Financings*

Percentage of companies covered by Scotiabank, Global Banking and Markets Equity Research within each rating category. Percentage of companies within each rating category for which Scotiabank, Global Banking and Markets has undertaken an underwriting liability or has provided advice for a fee within the last 12 months.

Source: Scotiabank GBM.

For the purposes of the ratings distribution disclosure FINRA requires members who use a ratings system with terms different than buy, hold/neutral and sell, to equate their own ratings into these categories. Our Focus Stock, Sector Outperform, Sector Perform, and Sector Underperform ratings are based on the criteria above, but for this purpose could be equated to strong buy, buy, neutral and sell ratings, respectively.

Scotiabank, Global Banking and Markets Equity Research Team

HEAD OF EQUITY RESEARCH John Henderson, P.Eng. .............................. (416) 945-7393 john.henderson@scotiabank.com HEAD OF BUSINESS MANAGEMENT Erika Osmond ............................................... (416) 945-4529 erika.osmond@scotiabank.com CONSUMER DISCRETIONARY Cable Jeff Fan, CPA, CA, CFA ............................... (416) 863-7780 jeff.fan@scotiabank.com Media Paul Steep .................................................... (416) 945-4310 paul.steep@scotiabank.com CONSUMER STAPLES Retailing Patricia Baker, Ph.D. .................................... (514) 287-4535 patricia.baker@scotiabank.com ENERGY Oil & Gas Integrated and E&P Jason Bouvier, CFA...................................... (403) 213-7345 jason.bouvier@scotiabank.com Oil & Gas International E&P Gavin Wylie................................................... (403) 213-7333 gavin.wylie@scotiabank.com Oil & Gas E&P Patrick Bryden, CFA ..................................... (403) 213-7750 patrick.bryden@scotiabank.com William Lee, P.Eng. ...................................... (403) 213-7331 william.lee@scotiabank.com Cameron Bean ............................................. (403) 218-6786 cameron.bean@scotiabank.com Energy & Equipment Services Vladislav C. Vlad, MBA, P.Eng. .................. (403) 213-7759 vladislav.vlad@scotiabank.com ENERGY INFRASTRUCTURE Matthew Akman, MBA .................................. (416) 863-7798 matthew.akman@scotiabank.com FINANCIALS Banks Sumit Malhotra, CFA .................................... (416) 863-2874 sumit.malhotra@scotiabank.com Diversified Financials Phil Hardie, CFA, P.Eng. .............................. (416) 863-7430 phil.hardie@scotiabank.com Insurance Joanne Smith, CFA ...................................... (212) 225-5071 Joanne.smith@scotiabank.com Phil Hardie, CFA, P.Eng. .............................. (416) 863-7430 phil.hardie@scotiabank.com INDUSTRIALS Diversified Industrials Mark Neville, CFA......................................... (514) 350-7756 mark.neville@scotiabank.com

Transportation & Aerospace Turan Quettawala, CFA ................................ (416) 863-7065 turan.quettawala@scotiabank.com INFORMATION TECHNOLOGY Hardware & Equipment Daniel Chan, MBA ....................................... (416) 863-7237 daniel.chan@scotiabank.com Software & Services Paul Steep. (416) 945-4310 paul.steep@scotiabank.com LATIN AMERICA Banks, Americas Claudia Benavente A....................................56 (2) 692-6568 claudia.benavente@scotiabank.cl (Scotia Corredores de Bolsa Chile) Construction Paul Figueroa Mantero M.Sc......... 51-(1)-211-6040 x16474 paul.figueroa@scotiabank.com.pe (Scotia Sociedad Agente de Bolsa S.A.) LatAm Telecom & Media Andres Coello. ........................................... 52-55-5123-2852 andres.coello@scotiabank.com (Scotiabank Inverlat) LatAm Consumer Products / Airports Rodrigo Echagaray. ...................................... (416) 945-4405 rodrigo.echagaray@scotiabank.com (Scotia Inverlat Casa de Bolsa) LatAm Utilities Ezequiel Fernndez Lpez.......................... 56-9-9991-9152 ezequiel.fernandez@scotiabank.cl (Scotia Corredores de Bolsa Chile) LatAm Metals & Mining Alfonso Salazar, MSc ............................ 52 (55) 5123 2869 alfonso.salazar@scotiabank.com (Scotiabank Inverlat) MATERIALS Agriculture Christine Healy, CPA, CA ............................. (416) 863-7902 christine.healy@scotiabank.com Global Fertilizers Ben Isaacson, CFA ....................................... (416) 945-5310 ben.isaacson@scotiabank.com Gold & Precious Minerals Tanya Jakusconek, M.Sc ............................. (416) 945-4083 tanya.jakusconek@scotiabank.com Trevor Turnbull, M.Sc ................................... (416) 863-7427 trevor.turnbull@scotiabank.com Ovais Habib .................................................. (416) 863-7141 ovais.habib@scotiabank.com Mike Hocking M.Sc, P.Geo. ......................... (416) 945-5228 ovais.habib@scotiabank.com Metals & Mining Orest Wowkodaw, CPA, CA, CFA. ............. (416) 945-4526 orest.wowkodaw@scotiabank.com Mark Turner, P.Eng. ..................................... (416) 863-7484 mark.turner@scotiabank.com Ben Isaacson, CFA ....................................... (416) 945-5310 ben.isaacson@scotiabank.com Paper & Forest Products Benoit Laprade, CPA, CA, CFA ................... (514) 287-3627 benoit.laprade@scotiabank.com

PORTFOLIO STRATEGY Vincent Delisle, CFA ..................................... (514) 287-3628 vincent.delisle@scotiabank.com Hugo Ste-Marie, CFA ................................... (514) 287-4992 hugo.ste-marie@scotiabank.com REAL ESTATE & REITS Mario Saric, CPA, CA, CFA .......................... (416) 863-7824 mario.saric@scotiabank.com Pammi Bir, CPA, CA, CFA ........................... (416) 863-7218 pammi.bir@scotiabank.com SPECIAL SITUATIONS Anthony Zicha ............................................... (514) 350-7748 anthony.zicha@scotiabank.com George Doumet ........................................... (514) 350-7788 george.doumet@scotiabank.com TELECOMMUNICATION SERVICES Jeff Fan, CPA, CA, CFA ............................... (416) 863-7780 jeff.fan@scotiabank.com ECONOMICS Warren Jestin ................................................ (416) 866-6136 Aron Gampel ................................................. (416) 866-6259 Pablo Brard ................................................. (416) 862-3876 Derek Holt ..................................................... (416) 863-7707 Patricia Mohr ................................................. (416) 866-4210 Mary Webb.................................................... (416) 866-4202 PORTFOLIO ADVISORY GROUP (PAG) (SCOTIAMCLEOD) Chief Investment Officer & Co-Head of PAG Shane Jones ................................................. (416) 945-5332 Co-Head of PAG: Stewart Hunt ................................................. (416) 863-2855 Trading Elliott Fishman .............................................. (416) 863-7860 Dave Stephens ............................................. (416) 862-3115 Tara Quinn .................................................... (416) 863-7149 Portfolio Manager: Shane Jones ................................................. (416) 945-5332 Caroline Escott, CFA ................................... (416) 945-5332 Equity Advisory Himalaya Jain, CFA ...................................... (416) 863-7604 Marco Martin ................................................ (416) 863-7921 Warren Hastings ........................................... (416) 865-6354 Fixed Income Advisory Andrew Mystic............................................... (416) 863-7474 INSTITUTIONAL EQUITY SALES & TRADING Toronto .......................................................... (416) 863-2885 1-888-251-4484 Montreal ........................................................ (514) 287-4513 New York.................................................. (212) 225-6605/04 1-800-262-4060 Boston ........................................................... (617) 330-1477 Mexico City, MX ................................ 011-52-55-9179-5181 (Scotia Inverlat Casa de Bolsa) London, U.K. ..................................... 011-44-207-826-5919 Singapore...................................................... (65) 6305-8350 (65) 6305-8347

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