UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 20-F







| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2014

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period
fromto

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report

For the transition period from  to

Commission file number: 333-13792





QUEBECOR
MEDIA INC.

(Exact name of Registrant as specified in its charter)





Province of Québec, Canada

(Jurisdiction of incorporation or organization)

612 St-Jacques Street

Montréal, Québec, Canada H3C 4M8

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.



|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|None                |  | None                                     

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

53/4% Senior Notes due January 2023 (issued October 11, 2012)

(Title of Class)





Indicate the number of
outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.

103,251,500 Common Shares

430,000 Cumulative First Preferred Shares,
Series G

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.   ̈  Yes  x  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.   ̈  Yes  x  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  x  Yes   ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                       
|-------------------------- |  | -------------------- |  | ----------------------
|Large accelerated filer   ̈ |  | Accelerated filer   ̈ |  | Non-accelerated filerx

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in
this filing:



|             |  |                                                                                                          |  |         
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | --------
|U.S. GAAP   ̈ |  | International Financial Reporting Standards as
issued  x by the International Accounting Standards
Board |  | Other   ̈

If Other has been checked in response to the previous question, indicate by check mark which financial
statement item the registrant has elected to follow.   ̈  Item 17   ̈  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ̈  Yes  x  No









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TABLE OF CONTENTS



|                                                                                       |  |      |     | 
|-------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                       |  | Page |    
|                                                                                       | 
|Explanatory Notes                                                                      |  |      | ii  | 
|                                                                                       | 
|Industry and Market Data                                                               |  |      | ii  | 
|                                                                                       | 
|Presentation of Financial Information                                                  |  |      | ii  | 
|                                                                                       | 
|Exchange Rate Information                                                              |  |      | iv  | 
|                                                                                       | 
|Cautionary Statement Regarding Forward-Looking Statements                              |  |      | v   | 
|                                                                                       | 
|PART I                                                                                 |  |      | 1   | 
|                                                                                       | 
|ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                         |  |      | 1   | 
|ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE                                       |  |      | 1   | 
|ITEM 3  KEY INFORMATION                                                               |  |      | 1   | 
|ITEM 4  INFORMATION ON THE CORPORATION                                                |  |      | 22  | 
|ITEM 4AUNRESOLVED STAFF COMMENTS                                                      |  |      | 68  | 
|ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                  |  |      | 69  | 
|ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                    |  |      | 120 | 
|ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                             |  |      | 130 | 
|ITEM 8  FINANCIAL INFORMATION                                                         |  |      | 133 | 
|ITEM 9  THE OFFER AND LISTING                                                         |  |      | 134 | 
|ITEM 10  ADDITIONAL INFORMATION                                                       |  |      | 135 | 
|ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  |      | 157 | 
|ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  |      | 159 | 
|                                                                                       | 
|PART II                                                                                |  |      | 160 | 
|                                                                                       | 
|ITEM 13  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  |      | 160 | 
|ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS |  |      | 160 | 
|ITEM 15  CONTROLS AND PROCEDURES                                                      |  |      | 160 | 
|ITEM 16  [RESERVED]                                                                   |  |      | 161 | 
|ITEM 16A  AUDIT COMMITTEE FINANCIAL EXPERT                                            |  |      | 161 | 
|ITEM 16B  CODE OF ETHICS                                                              |  |      | 161 | 
|ITEM 16C  PRINCIPAL ACCOUNTANT FEES AND SERVICES                                      |  |      | 161 | 
|ITEM 16D  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  |  |      | 162 | 
|ITEM 16E  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS      |  |      | 162 | 
|ITEM 16F  CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT                               |  |      | 162 | 
|ITEM 16G  CORPORATE GOVERNANCE                                                        |  |      | 162 | 
|                                                                                       | 
|PART III                                                                               |  |      | 163 | 
|                                                                                       | 
|ITEM 17  FINANCIAL STATEMENTS                                                         |  |      | 163 | 
|ITEM 18  FINANCIAL STATEMENTS                                                         |  |      | 163 | 
|ITEM 19  EXHIBITS                                                                     |  |      | 163 | 
|                                                                                       | 
|Signature                                                                              |  |      | 169 | 
|                                                                                       | 
|Index to Consolidated Financial Statements                                             |  |      | F-1 | 



---

EXPLANATORY NOTES

In this annual report, unless otherwise specified, the terms we, our, us, the Corporation
and Quebecor Media refer to Quebecor Media Inc., a corporation under the Business Corporations Act (Québec) and its consolidated subsidiaries, collectively. All references in this annual report to Videotron are
references to our wholly-owned subsidiary Videotron Ltd. and its subsidiaries; all references in this annual report to Sun Media are references to our indirect wholly-owned subsidiary Sun Media Corporation and its subsidiaries; all
references in this annual report to Le SuperClub Vidéotron are references to our wholly-owned subsidiary Le SuperClub Vidéotron ltée; all references in this annual report to TVA Group are references to
our public subsidiary TVA Group Inc. and its subsidiaries; all references in this annual report to Archambault Group are references to our wholly-owned subsidiary Archambault Group Inc. and its subsidiaries; all references to
Quebecor Media Printing are references to our wholly-owned subsidiary Quebecor Media Printing Inc.; and all references to Quebecor Media Network are references to our wholly-owned subsidiary Quebecor Media Network Inc. All
references in this annual report to Quebecor or our parent corporation are references to Quebecor Inc., all references to Capital CDPQ are refererences to CDP Capital dAmérique Investissements inc.
and all references to CDPQ are references to Caisse de dépôt et de placement du Québec.

In
this annual report, all references to the CRTC are references to the Canadian Radio-television and Telecommunications Commission.

In this annual report, all references to our Senior Notes are references to, collectively, our
73/8% Senior Notes due 2021 originally issued on January 5, 2011, our 53/4% Senior Notes due 2023 originally issued on October 11, 2012 and our 65/8% Senior Notes due 2023 originally issued on October 11, 2012.

INDUSTRY AND MARKET DATA

Industry statistics and market data used throughout this annual report were obtained from internal surveys, market
research, publicly available information and industry publications, including the CRTC, Numeris, the National Cable & Telecommunications Association (NCTA), A.C. Nielsen Media Research, SNL Kagan, Newspapers Canada, the
Audit Bureau of Circulations, NADbank® Inc. (NADbank®) and ComScore Media Metrix. Industry publications generally state that the information they contain has been
obtained from sources believed to be reliable, but that the accuracy and completeness of this information is not guaranteed. Cable penetration and market share data contained in this annual report is generally based on sources published in the first
quarter of 2015.

Paid circulation is defined as average sales of a newspaper per issue. Readership (as
opposed to paid circulation) is an estimate of the number of people who read or looked into an average issue of a newspaper and is measured by an independent survey conducted by NADbank® According to the 2013
NADbank® study (the
NADbank® Study), the most recent available survey, readership estimates are based upon the number of people responding to the Newspaper Audience
Databank survey circulated by NADbank® who report having read or looked into one or more issues of a given
newspaper during a given period equal to the publication interval of the newspaper.

Information contained in this document
concerning the media industry, our general expectations concerning this industry and our market positions and market shares may also be based on estimates and assumptions made by us based on our knowledge of the industry and which we believe to be
reliable. We believe, however, that this data is inherently imprecise, although generally indicative of relative market positions and market shares. Industry and company data is approximate and may reflect rounding in certain cases.

PRESENTATION OF FINANCIAL INFORMATION

IFRS and Functional Currency

Our audited consolidated financial statements
for the years ended December 31, 2014, 2013, 2012, 2011 and 2010 have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

In this annual report, references to Canadian Dollars, CAN$ or $ are to the lawful currency of Canada, our functional currency, and
references to US Dollars or US$ are to the currency of the United States.



ii



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Non-IFRS Measures

In this annual report, we use certain financial measures that are not calculated in accordance with IFRS. We use these non-IFRS financial measures, such as average monthly revenue per user
(ARPU), adjusted operating income, cash flows from segment operations and free cash flows from continuing operating activities, because we believe that they are meaningful measures of our performance. Our method of calculating
these non-IFRS financial measures may differ from the methods used by other companies and, as a result, the non-IFRS financial measures presented in this annual report may not be comparable to other similarly titled measures disclosed by other
companies.

We provide a definition of adjusted operating income, cash flows from segment operations, free cash flows from
continuing operating activities and ARPU under Item 5. Operating and Financial Review and Prospects  Non-IFRS Financial Measures. We also provide a definition of adjusted operating
income, and a reconciliation of adjusted operating income to the most directly comparable financial measure under IFRS in footnote 3 to the tables under Item 3. Key Information  A. Selected Financial Data. When we discuss cash
flow from segment operations in this annual report, we provide the detailed calculation of the measure in the same section. When we discuss free cash flow from continuing operations in this annual report, we provide a reconciliation to the most
directly comparable IFRS financial measure in Item 5. Operating and Financial Review and Prospects.

Unless
otherwise indicated, information provided in this annual report, including all operating data presented, is as of December 31, 2014.



iii



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EXCHANGE RATE INFORMATION

The following table sets forth, for the periods indicated, the average, high, low and end of period noon rates published by the Bank of
Canada. Such rates are presented as U.S. dollars per CAN$1.00. On March 19, 2015, the noon rate was CAN$1.00 equals US$0.7847. We do not make any representation that Canadian dollars could have been converted into U.S. dollars at the rates shown or
at any other rate. You should note that the rates set forth below may differ from the actual rates used in our accounting processes and in the preparation of our consolidated financial statements.



|                                    |  |            |        |  |      |  |        |     |  |  |            |  |  |  |        | 
|----------------------------------- |  | ---------- | ------ |  | ---- |  | ------ | --- |  |  | ---------- |  |  |  | ------ | 
|Year Ended:                         |  | Average(1) |        |  | High |  |        | Low |  |  | Period End | 
|December 31, 2014                   |  |            | 0.9054 |  |      |  | 0.9422 |     |  |  | 0.8589     |  |  |  | 0.8620 | 
|December 31, 2013                   |  |            | 0.9710 |  |      |  | 1.0164 |     |  |  | 0.9348     |  |  |  | 0.9402 | 
|December 31, 2012                   |  |            | 1.0004 |  |      |  | 1.0299 |     |  |  | 0.9599     |  |  |  | 1.0051 | 
|December 31, 2011                   |  |            | 1.0111 |  |      |  | 1.0583 |     |  |  | 0.9430     |  |  |  | 0.9833 | 
|December 31, 2010                   |  |            | 0.9709 |  |      |  | 1.0054 |     |  |  | 0.9278     |  |  |  | 1.0054 | 
|                                    |  |            |        | 
|Month Ended:                        |  | Average(2) |        |  | High |  |        | Low |  |  | Period End | 
|                                    |  |            |        | 
|March 2015 (through March 19, 2015) |  |            | 0.7907 |  |      |  | 0.8039 |     |  |  | 0.7811     |  |  |  | 0.7847 | 
|February 28, 2015                   |  |            | 0.8000 |  |      |  | 0.8063 |     |  |  | 0.7915     |  |  |  | 0.7995 | 
|January 31, 2015                    |  |            | 0.8254 |  |      |  | 0.8527 |     |  |  | 0.7863     |  |  |  | 0.7863 | 
|December 31, 2014                   |  |            | 0.8671 |  |      |  | 0.8815 |     |  |  | 0.8589     |  |  |  | 0.8620 | 
|November 30, 2014                   |  |            | 0.8829 |  |      |  | 0.8900 |     |  |  | 0.8751     |  |  |  | 0.8751 | 
|October 31, 2014                    |  |            | 0.8919 |  |      |  | 0.8980 |     |  |  | 0.8858     |  |  |  | 0.8869 | 
|September 30, 2014                  |  |            | 0.9081 |  |      |  | 0.9206 |     |  |  | 0.8922     |  |  |  | 0.8922 | 



|(1) | The average of the daily noon rates for each day during the applicable year.
|--- | ----------------------------------------------------------------------------

|(2) | The average of the daily noon rates for each day during the applicable month.
|--- | -----------------------------------------------------------------------------



iv



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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements with respect to our financial condition, results of operations,
business and certain of our plans and objectives. These forward-looking statements are made pursuant to the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate as well as beliefs and assumptions made by our management. Such statements include, in particular, statements about our
plans, prospects, financial position and business strategies. Words such as may, will, expect, continue, intend, estimate, anticipate, plan,
foresee, believe or seek or the negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although we believe that the expectations reflected
in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: our
anticipated business strategies; anticipated trends in our business; anticipated reorganizations of any of our segments or businesses, and any related restructuring provisions or impairment charges; and our ability to continue to control costs. We
can give no assurance that these estimates and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences
may be material. Some important factors that could cause actual results to differ materially from those expressed in these forward-looking statements include, but are not limited to:



| |  |  | our ability to successfully continue developing our network and facilities-based mobile offering;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | general economic, financial or market conditions and variations in the businesses of our local, regional or national newspapers and broadcasting
advertisers;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the intensity of competitive activity in the industries in which we operate;
| | - |  | ----------------------------------------------------------------------------



| |  |  | fragmentation of the media landscape;
| | - |  | -------------------------------------



| |  |  | new technologies that might change consumer behaviour towards our product suite;
| | - |  | --------------------------------------------------------------------------------



| |  |  | unanticipated higher capital spending required to deploy our network or to address continued development of competitive alternative technologies, or
the inability to obtain additional capital to continue the development of our business;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to implement successfully our business and operating strategies and manage our growth and expansion;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | our ability to successfully restructure our newspaper operations to optimize their efficiency in the context of the changing newspaper industry;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | disruptions to the network through which we provide our digital television, Internet access and telephony services, and our ability to protect such
services from piracy;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | labour disputes or strikes;
| | - |  | ---------------------------



| |  |  | changes in our ability to obtain services and equipment critical to our operations;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | changes in laws and regulations, or in their interpretations, which could result, among other things, in the loss (or reduction in value) of our
licenses or markets or in an increase in competition, compliance costs or capital expenditures;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our substantial indebtedness, the tightening of credit markets, and the restrictions on our business imposed by the terms of our debt; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | interest rate fluctuations that affect a portion of our interest payment requirements on long-term debt.
| | - |  | --------------------------------------------------------------------------------------------------------



v



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We caution you that the above list of cautionary statements is not exhaustive. These
and other factors are discussed in further detail elsewhere in this annual report, including under Item 3. Key Information  Risk Factors of this annual report. Each of these forward-looking statements speaks only as of the date of
this annual report. We disclaim any obligation to update these statements unless applicable securities laws require us to do so. We advise you to consult any documents we may file or furnish with the U.S. Securities and Exchange Commission
(SEC), as described under Item 10. Additional Information  Documents on Display of this annual report.



vi



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PART I

ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3  KEY INFORMATION

A - Selected Financial Data

The following tables present selected
consolidated financial information for our business presented in accordance with IFRS for each of the years ended December 31, 2014, 2013, 2012, 2011 and 2010. We derived this selected consolidated financial information from our audited
consolidated financial statements, which are comprised of consolidated balance sheets as at December 31, 2014, 2013, 2012, 2011 and 2010 and the related consolidated statements of income, comprehensive income, equity and cash flows for each of
the years in the five-year period ended December 31, 2014. The selected consolidated financial information presented below should be read in conjunction with the information contained in Item 5. Operating and Financial Review and
Prospects and our audited consolidated financial statements as at December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 and notes thereto contained in Item 18. Financial Statements of
this annual report (beginning on page F-1). Our audited consolidated financial statements as at December 31, 2012, 2011 and 2010 and for the years ended December 31, 2011 and 2010, are not included in this annual report. Our consolidated
financial statements as at December 31, 2014, 2013, 2012, 2011 and 2010 and for the years ended December 31, 2014, 2013, 2012, 2011 and 2010, prepared in accordance with IFRS, have been audited by Ernst & Young LLP, an independent
registered public accounting firm. Ernst & Young LLPs report on our consolidated financial statements as at December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 is included in this annual
report.

Our historical results are not necessarily indicative of our future financial condition or results of operations.



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SELECTED FINANCIAL DATA



|                                                                                           |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|------------------------------------------------------------------------------------------ |  | ----------------------- | --------------------------- | - | ------ | - | -------- | ------ |  | - | -------- | - |  | ------ | -------- | - |  | - | -------- | -
|                                                                                           |  | Year Ended December 31, |                            
|                                                                                           |  | 2014                    |                             |   | 2013   |   |          | 2012   |  |   | 2011     |   |  | 2010   |         
|                                                                                           |  |                         |                             |   | (1)(2) |   |          | (1)(2) |  |   | (1)(2)   |   |  | (1)(2) |         
|                                                                                           |  |                         | (in millions, except ratio) |  
|STATEMENT OF INCOME DATA:                                                                  |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Revenues                                                                                   |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Telecommunications                                                                         |  | $                       | 2,965.0                     |   |        | $ | 2,860.5  |        |  | $ | 2,758.8  |   |  | $      | 2,560.0  |   |  | $ | 2,358.3  |  
|Media                                                                                      |  |                         | 807.7                       |   |        |   | 828.3    |        |  |   | 844.8    |   |  |        | 855.2    |   |  |   | 857.8    |  
|Sports and Entertainment                                                                   |  |                         | 60.9                        |   |        |   | 70.2     |        |  |   | 76.9     |   |  |        | 79.9     |   |  |   | 63.1     |  
|Inter-segment                                                                              |  |                         | (117.5                      | ) |        |   | (111.5   | )      |  |   | (127.2   | ) |  |        | (117.2   | ) |  |   | (108.6   | )
|                                                                                           |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|                                                                                           |  |                         | 3,716.1                     |   |        |   | 3,647.5  |        |  |   | 3,553.3  |   |  |        | 3,377.9  |   |  |   | 3,170.6  |  
|                                                                                           |  |                         |                             |   |       
|Employee costs                                                                             |  |                         | (682.2                      | ) |        |   | (692.8   | )      |  |   | (696.3   | ) |  |        | (636.2   | ) |  |   | (567.4   | )
|Purchase of goods and services                                                             |  |                         | (1,639.6                    | ) |        |   | (1,577.5 | )      |  |   | (1,564.1 | ) |  |        | (1,547.8 | ) |  |   | (1,416.1 | )
|Amortization                                                                               |  |                         | (664.2                      | ) |        |   | (628.1   | )      |  |   | (552.0   | ) |  |        | (465.0   | ) |  |   | (349.1   | )
|Financial expenses                                                                         |  |                         | (324.2                      | ) |        |   | (360.8   | )      |  |   | (335.5   | ) |  |        | (316.6   | ) |  |   | (301.1   | )
|(Loss) gain on valuation and translation of financial instruments                          |  |                         | (3.1                        | ) |        |   | (244.4   | )      |  |   | 136.9    |   |  |        | 52.0     |   |  |   | 46.1     |  
|Restructuring of operations, impairment of assets and other special items                  |  |                         | (54.4                       | ) |        |   | (11.6    | )      |  |   | 11.3     |   |  |        | (18.7    | ) |  |   | (21.2    | )
|Impairment of goodwill and intangible assets                                               |  |                         | (81.0                       | ) |        |   | (35.3    | )      |  |   | (43.0    | ) |  |        |         |   |  |   |         |  
|Loss on debt refinancing                                                                   |  |                         | (18.7                       | ) |        |   | (18.9    | )      |  |   | (6.3     | ) |  |        | (4.0     | ) |  |   | (12.3    | )
|Income taxes                                                                               |  |                         | (96.4                       | ) |        |   | (36.7    | )      |  |   | (143.0   | ) |  |        | (128.3   | ) |  |   | (136.5   | )
|(Loss) income from discontinued operations                                                 |  |                         | (65.5                       | ) |        |   | (193.8   | )      |  |   | (129.6   | ) |  |        | 64.3     |   |  |   | 72.0     |  
|                                                                                           |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|                                                                                           |  |                         |                             |   |       
|Net income (loss)                                                                          |  | $                       | 86.8                        |   |        | $ | (152.4   | )      |  | $ | 231.7    |   |  | $      | 377.6    |   |  | $ | 485.0    |  
|                                                                                           |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Income (loss) from continuing operations attributable to:                                  |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Shareholders                                                                               |  |                         | 173.1                       |   |        |   | 34.2     |        |  |   | 364.2    |   |  |        | 301.3    |   |  |   | 394.9    |  
|Non-controlling interests                                                                  |  |                         | (20.8                       | ) |        |   | 7.2      |        |  |   | (2.9     | ) |  |        | 12.0     |   |  |   | 18.1     |  
|Net income (loss) attributable to:                                                         |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Shareholders                                                                               |  |                         | 107.6                       |   |        |   | (159.6   | )      |  |   | 234.6    |   |  |        | 365.6    |   |  |   | 466.9    |  
|Non-controlling interests                                                                  |  |                         | (20.8                       | ) |        |   | 7.2      |        |  |   | (2.9     | ) |  |        | 12.0     |   |  |   | 18.1     |  
|                                                                                           |  |                         |                             |   |       
|OTHER FINANCIAL DATA AND RATIO:                                                            |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Adjusted operating income(3)(unaudited)                                                    |  | $                       | 1,394.3                     |   |        | $ | 1,377.2  |        |  | $ | 1,292.9  |   |  | $      | 1,193.9  |   |  | $ | 1,187.1  |  
|Additions to property, plant, equipment and intangible assets other than spectrum licenses |  |                         | 745.4                       |   |        |   | 624.1    |        |  |   | 790.4    |   |  |        | 855.9    |   |  |   | 767.5    |  
|Additions to spectrum licenses                                                             |  |                         | 217.4                       |   |        |   | 15.9     |        |  |   |         |   |  |        |         |   |  |   |         |  
|Comprehensive income (loss)                                                                |  |                         | 28.7                        |   |        |   | (103.5   | )      |  |   | 238.2    |   |  |        | 311.7    |   |  |   | 486.0    |  
|Comprehensive income (loss) attributable to:                                               |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Shareholders                                                                               |  |                         | 53.8                        |   |        |   | (123.3   | )      |  |   | 242.3    |   |  |        | 306.6    |   |  |   | 469.7    |  
|Non-controlling interests                                                                  |  |                         | (25.1                       | ) |        |   | 19.8     |        |  |   | (4.1     | ) |  |        | 5.1      |   |  |   | 16.3     |  
|                                                                                           |  |                         |                             |   |       
|Ratio of earnings to fixed charges or coverage deficiency(4)(unaudited)                    |  |                         | 1.6x                        |   |        |   | (119.0   | )      |  |   | 2.1x     |   |  |        | 2.6x     |   |  |   | 3.0x     |  
|                                                                                           | 
|                                                                                           |  | As at December 31,      |                            
|                                                                                           |  | 2014                    |                             |   | 2013   |   |          | 2012   |  |   | 2011     |   |  | 2010   |         
|                                                                                           |  |                         | (in millions)               |  
|BALANCE SHEET DATA:                                                                        |  |                         |                             |   |        |   |          |        |  |   |          |   |  |        |          |   |  |   |          |  
|Cash and cash equivalents                                                                  |  | $                       | 395.3                       |   |        | $ | 476.6    |        |  | $ | 228.7    |   |  | $      | 143.5    |   |  | $ | 241.2    |  
|Total assets                                                                               |  |                         | 9,036.7                     |   |        |   | 8,970.3  |        |  |   | 8,960.8  |   |  |        | 8,998.7  |   |  |   | 8,556.4  |  
|Total debt (current and long-term portions)                                                |  |                         | 5,201.8                     |   |        |   | 4,976.0  |        |  |   | 4,428.7  |   |  |        | 3,697.9  |   |  |   | 3,513.4  |  
|Capital stock                                                                              |  |                         | 4,116.1                     |   |        |   | 4,116.1  |        |  |   | 4,116.1  |   |  |        | 1,752.4  |   |  |   | 1,752.4  |  
|Equity attributable to shareholders                                                        |  |                         | 1,759.4                     |   |        |   | 1,805.7  |        |  |   | 2,029.0  |   |  |        | 2,887.1  |   |  |   | 2,684.1  |  
|Dividends                                                                                  |  |                         | 100.0                       |   |        |   | 100.0    |        |  |   | 100.0    |   |  |        | 100.0    |   |  |   | 87.5     |  
|Number of common shares outstanding                                                        |  |                         | 103.3                       |   |        |   | 103.3    |        |  |   | 103.3    |   |  |        | 123.6    |   |  |   | 123.6    |  



|(1) | In 2014, the Corporation ceased its door-to-door distribution of flyers, sold its weekly newspapers operations in the province of Québec, sold its Nurun Inc.
subsidiary, and announced a transaction whereby it will sell all of its English-language newspaper operations in Canada. The results of operations related to these businesses were reclassified as discontinued operations. Refer to note 8 of our
consolidated financial statements for more details.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In 2014, the Corporation changed its organisational structure and its operations are now managed through the following three segments:
Telecommunications, Media, and Sports and Entertainment. The reorganization consisted in (a) the creation of the new Media segment, which includes all activities of the previous News
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | Media and Broadcasting segments, as well as the book publishing and distribution activities previously included in the Leisure and Entertainment segment, (b) the creation of the new Sports
and Entertainment segment, which includes all operating, production, distribution and management activities of the previous Leisure and Entertainment segment relating to music, entertainment, sports and the future Québec City Arena, and
(c) the transfer of the retail businesses from the previous Leisure and Entertainment segment to the Telecommunications segment. Accordingly, prior period figures in the Corporations segmented information have been reclassified to reflect
these changes.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Adjusted operating income and ratios based on this measure are not required by or recognized under IFRS. We define adjusted operating income, as reconciled to net
income (loss), as net income (loss) before amortization, financial expenses, (loss) gain on valuation and translation of financial instruments, restructuring of operations, impairment of assets and other special items, impairment of goodwill and
intangible assets, loss on debt refinancing, income taxes and (loss) income from discontinued operations. Adjusted operating income, and ratios using this measure, are not intended to be regarded as alternatives to other financial operating
performance measures or to the consolidated statement of cash flows as a measure of liquidity and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Our parent corporation,
Quebecor, uses adjusted operating income in order to assess the performance of its investment in Quebecor Media. Our management and Board of Directors use this measure in evaluating our consolidated results as well as results of our operating
segments. As such, this measure eliminates the significant level of non-cash depreciation of tangible assets and amortization of certain intangible assets, and it is unaffected by the capital structure or investment activities of Quebecor Media and
of its segments. Adjusted operating income is also relevant because it is a significant component of our annual incentive compensation programs. A limitation of this measure, however, is that it does not reflect the periodic costs of capitalized
tangible and intangible assets used in generating revenues in our segments. We use other measures that do reflect such costs, such as cash flows from segment operations and free cash flows from continuing operating activities. Our definition of
adjusted operating income may not be the same as similarly titled measures reported by other companies therefore limiting its usefulness as a comparative measure. See Presentation of Financial Information  Non-IFRS Measures. Our
adjusted operating income is calculated from and reconciled to net income (loss) under IFRS for the years ended December 31, 2014, 2013, 2012, 2011 and 2010 in the table below:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                          |  |                         |               |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------- |  | ----------------------- | ------------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                                          |  | Year Ended December 31, |              
|                                                                          |  | 2014                    |               |   | 2013 |   |         | 2012 |  |   | 2011    |   |  | 2010 |        
|                                                                          |  |                         | (in millions) |  
|Reconciliation of adjusted operating income to net income (loss)          |  |                         |               |   |      |   |         |      |  |   |         |   |  |      |         |  
|                                                                          |  |                         |               |  
|Adjusted operating income                                                 |  |                         |               |   |      |   |         |      |  |   |         |   |  |      |         |  
|Telecommunications                                                        |  | $                       | 1,354.9       |   |      | $ | 1,294.2 |      |  | $ | 1,220.2 |   |  | $    | 1,090.7 |   |  | $ | 1,039.1 |  
|Media                                                                     |  |                         | 46.5          |   |      |   | 84.0    |      |  |   | 62.2    |   |  |      | 96.2    |   |  |   | 138.9   |  
|Sports and Entertainment                                                  |  |                         | (3.4          | ) |      |   | (1.1    | )    |  |   | 2.3     |   |  |      | 3.3     |   |  |   | 2.5     |  
|Head office                                                               |  |                         | (3.7          | ) |      |   | 0.1     |      |  |   | 8.2     |   |  |      | 3.7     |   |  |   | 6.6     |  
|                                                                          |  |                         |               |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|                                                                          |  |                         | 1,394.3       |   |      |   | 1,377.2 |      |  |   | 1,292.9 |   |  |      | 1,193.9 |   |  |   | 1,187.1 |  
|Amortization                                                              |  |                         | (664.2        | ) |      |   | (628.1  | )    |  |   | (552.0  | ) |  |      | (465.0  | ) |  |   | (349.1  | )
|Financial expenses                                                        |  |                         | (324.2        | ) |      |   | (360.8  | )    |  |   | (335.5  | ) |  |      | (316.6  | ) |  |   | (301.1  | )
|(Loss) gain on valuation and translation of financial instruments         |  |                         | (3.1          | ) |      |   | (244.4  | )    |  |   | 136.9   |   |  |      | 52.0    |   |  |   | 46.1    |  
|Restructuring of operations, impairment of assets and other special items |  |                         | (54.4         | ) |      |   | (11.6   | )    |  |   | 11.3    |   |  |      | (18.7   | ) |  |   | (21.2   | )
|Impairment of goodwill and intangible assets                              |  |                         | (81.0         | ) |      |   | (35.3   | )    |  |   | (43.0   | ) |  |      |        |   |  |   |        |  
|Loss on debt refinancing                                                  |  |                         | (18.7         | ) |      |   | (18.9   | )    |  |   | (6.3    | ) |  |      | (4.0    | ) |  |   | (12.3   | )
|Income taxes                                                              |  |                         | (96.4         | ) |      |   | (36.7   | )    |  |   | (143.0  | ) |  |      | (128.3  | ) |  |   | (136.5  | )
|(Loss) income from discontinued operations                                |  |                         | (65.5         | ) |      |   | (193.8  | )    |  |   | (129.6  | ) |  |      | 64.3    |   |  |   | 72.0    |  
|                                                                          |  |                         |               |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|                                                                          |  |                         |               |   |     
|Net income (loss)                                                         |  | $                       | 86.8          |   |      | $ | (152.4  | )    |  | $ | 231.7   |   |  | $    | 377.6   |   |  | $ | 485.0   |  
|                                                                          |  |                         |               |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  



|(4) | For the purpose of calculating the ratio of earnings to fixed charges under IFRS, (i) earnings consist of net (loss) income, plus income taxes, fixed charges,
amortized capitalized interest, less interest capitalized and (ii) fixed charges consist of interest expensed and capitalized, plus premiums and discounts amortization, financing fees amortization and an estimate of the interest within rental
expense.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B - Risk Factors

This section describes some of the risks that could materially affect our business, revenues, results of operations and financial condition, as well as the market value of our Senior Notes. The factors
below should be considered in connection with any forward-looking statements in this document and with the cautionary statements contained in the section Cautionary Statement Regarding Forward-Looking Statements at the forepart of this
annual report. The risks below are not the only ones that we face. Some risks may not yet be known to us and some that we do not currently believe to be material could later turn out to be material.



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Risks Relating to Our Business

We operate in highly competitive industries that are experiencing rapid technological developments, and our inability to compete successfully could have a material adverse effect on our business,
prospects, revenues, financial condition and results of operations.

In our cable business, we compete against
incumbent local exchange carriers (or ILECs) the primary of which in our market holds a regional license to provide terrestrial broadcasting distribution in Montréal and several other communities in the Province of
Québec. Such primary ILEC launched its own Internet protocol television (or IPTV) service in Montréal (including a portion of the greater Montréal area), in Québec City and in other locations in the
Province of Québec and also secured licenses to launch video distribution services using video digital subscriber line (or VDSL) technology. We also compete against providers of direct broadcast satellite (or
DBS, which in Canada are also referred to as DTH for direct-to-home satellite providers), multichannel multipoint distribution systems (or MMDS), and satellite master antenna
television systems. The direct access to some broadcasters websites that provide streaming of video-on-demand content is also available for some of the channels we offer in our television programming. In addition, third-party Internet access
providers could launch IP video services in our footprint.

We also face competition from illegal providers of cable
television services and illegal access to non-Canadian DBS (also called grey market piracy), as well as from signal theft of DBS that enables customers to access programming services from U.S. and Canadian DBS without paying any fees (also called
black market piracy). Competitors in the video business also include emerging content delivery platforms. Furthermore, over-the-top (or OTT) content providers, such as Netflix and Apple TV, compete for viewership.

Due to ongoing technological developments, the distinction between traditional platforms (broadcasting, Internet and telephony) is fading
rapidly. For instance, the Internet, through wired and mobile devices, is becoming an important broadcasting and distribution platform. In addition, mobile operators, with the development of their respective 4G and Long Term Evolution (also known as
LTE) networks, are now offering wireless and fixed wireless Internet services. In addition, our VoIP telephony service also competes with Internet-based solutions.

In our Internet access business, we compete against other Internet service providers (or ISPs) offering residential
and commercial Internet access services as well as WiMAX and open Wi-Fi networks in some cities. The main competitors are the ILECs that offer Internet access through digital subscriber line (or DSL), fibre to the node and fibre
to the home technologies, often offering comparable download speeds to ours. In addition, satellite operators such as Xplornet are increasing their existing high-speed Internet access (or HSIA) capabilities with the launch of
high-throughput satellites, targeting households in rural and remote locations and claiming future download speeds comparable to our low and medium download speeds. The CRTC also requires cable and ILEC network providers, including ourselves, to
offer wholesale access to our high-speed Internet systems to third party ISP competitors for the purpose of providing retail Internet access services. These third party ISP competitors may also provide telephony and networking applications.

Our cable telephony business has numerous competitors, including ILECs, competitive local exchange carriers (or
CLECs), mobile telephony service operators and other providers of telephony, VoIP and Internet communications, including competitors that are not facility-based and therefore have a much lower infrastructure cost. In addition,
Internet protocol-based (IP-based) products and services are generally subject to downward pricing pressure, lower margins and technological evolution, all of which could have an adverse effect on our business, prospects and
results of operation.

In our mobile telephony business, we compete against a mix of market participants, some of them active
in some or all of the products we offer, with others offering only mobile telephony services. In addition, users of mobile voice and data systems may find their communication needs satisfied by other current or developing adjunct technologies, such
as Wi-Fi, WiMax, hotspots or trunk radio systems, which have the technical capability to handle mobile data communication and mobile telephone calls. There can be no assurance that current or future competitors will not provide network
capacity and/or services comparable or superior to those we provide or may in the future provide, or at lower prices, or adapt more quickly to evolving industry trends or changing market requirements, or introduce competing services. For instance,
some providers of mobile telephony services (including most of the incumbent carriers as well as at least one other new entrant) have launched lower-cost mobile telephony services in order to acquire additional market share. Also, we may not be able
to compete successfully in the future against existing or potential competitors, and increased competition could have a material adverse effect on our business, prospects, revenues, financial condition and results of operations.



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Finally, a few of our competitors are offering special discounts to customers who subscribe
to two or more of their services (cable television or IPTV, Internet, residential phone and mobile telephony services). As a result, should we fail to keep our existing customers and lose them to such competitors, we may end up losing up to one
subscriber for each of our services. This could have an adverse effect on our business, prospects, revenues, financial condition and results of operation.

We have entered into roaming agreements with other mobile operators in order to provide worldwide coverage to our mobile telephony customers. Our inability to extend our worldwide coverage or to
renew, or substitute for, these roaming agreements at their respective terms and on acceptable terms may place us at a competitive disadvantage, which could adversely affect our ability to operate our mobile business successfully and profitably.

We have entered into roaming agreements with multiple carriers around the world (including Canada, the United States
and Europe), and have established worldwide coverage. Our inability to extend our worldwide coverage or to renew, or substitute for, these roaming agreements at their respective or better terms or on acceptable terms, may place us at a competitive
disadvantage, which could adversely affect our ability to operate our mobile business successfully and profitably.

In
addition, various aspects of mobile communication operations, including the ability of mobile providers to enter into interconnection agreements with traditional landline telephone companies and the ability of mobile providers to manage data traffic
on their networks, are subject to regulation by the CRTC. Regulations adopted or actions taken by the government agencies having jurisdiction over any mobile business that we may develop could adversely affect our mobile business and operations,
including actions that could increase competition or our costs.

Our reputation may be negatively impacted, which could have a material
adverse effect on our business, financial condition and results of operations.

We have generally enjoyed a good
reputation among the public. Our ability to maintain our existing customer relationships and to attract new customers depends to a large extent on our reputation. While we have put in place certain mechanisms to mitigate the risk that our reputation
may be tarnished, including good governance practices and a Code of Ethics, we cannot be assured that we will continue to enjoy a good reputation nor can we be assured that events that are beyond our control will not cause our reputation to be
negatively impacted. The loss or tarnishing of our reputation could have a material adverse effect on our business, prospects, financial condition and results of operations.

Our inventory may become obsolete.

Our wireless handset devices
inventory generally has a relatively short product life cycles due to frequent wireless handset introductions. If we cannot effectively manage inventory levels based on product demand, this may increase the risk of inventory obsolescence.

We are regularly required to make capital expenditures to remain technologically and economically competitive. We may not be able to
obtain additional capital to implement our business strategies and make capital expenditures.

Our strategy of
maintaining a leadership position in the suite of products and services we offer and launching new products and services requires capital investments in our network and infrastructure to support growth in our customer base and demands for increased
bandwidth capacity and other services. In this regard, we have in the past required substantial capital for the upgrade, expansion and maintenance of our network and the launch and deployment of new or additional services. We expect that additional
capital expenditures will continue to be required in the short and medium term in order to expand and maintain our systems and services, including expenditures relating to advancements in Internet access and high definition television
(HDTV), as well as the cost of our mobile services infrastructure deployment.



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The demand for wireless data services has been growing at unprecedented rates and it is
projected that this demand will further accelerate, driven by the following increases: levels of broadband penetration; need for personal connectivity and networking; affordability of smartphones and Internet-only devices (e.g., high-usage data
devices such as mobile Internet keys, tablets and electronic book readers); multimedia-rich services and applications; wireless competition; and unlimited data plans. The anticipated levels of data traffic will represent a growing challenge to
the current mobile networks ability to serve this traffic. We may have to acquire additional spectrum, if available and if economically reasonable, in order to address this increased demand. The ability to acquire additional spectrum (if
needed) is dependent on the timing and the rules established by Industry Canada. If we are not successful in acquiring additional spectrum we may need on reasonable terms, it could have a material adverse effect on our business, prospects and
financial condition. See also Item 4. Information on the Corporation  Regulation  Canadian Telecommunications Services  Regulatory Framework for Mobile Wireless Services.

Developing our LTE network requires capital expenditures to remain competitive and to comply with our obligations under the agreement
with our partner governing the joint built-out of our LTE network. In addition, we may be required to make further capital expenditures in the future on our LTE network to remain competitive and in order to comply with our obligations. See also
Item 4. Information on the Corporation  History and Development of Quebecor Media. A geographical expansion of our LTE network may require us to incur significant costs and to make significant capital expenditures.

There can be no assurance that we will be able to generate or otherwise obtain the funds to finance any portion of these capital
improvement programs, new strategies and services or other capital expenditure requirements, whether through cash from operations, additional borrowings or other sources. If we are unable to generate sufficient funds or obtain additional financing
on acceptable terms, we may be unable to implement our business strategies or proceed with the capital expenditures and investments required to maintain our leadership position, and our business, financial condition, results of operations,
reputation and prospects could be materially adversely affected. Even if we are able to obtain adequate funding, the period of time required to upgrade our network could have a material adverse effect on our ability to successfully compete in
the future. Moreover, additional investments in our business may not translate into incremental revenues, cash flows or profitability.

See also the risk factors  We operate in highly competitive industries that are experiencing rapid technological developments, and our inability to compete successfully could have a material
adverse effect on our business, prospects, revenues, financial condition and results of operations and  Risks Relating to our Senior Notes and our Capital Structure  We may be required from time to time to refinance certain
of our indebtedness. Our inability to do so on favorable terms, or at all, could have a material adverse effect on us.

We may
need to support increasing costs in securing access to support structures needed for our cable network.

We require
access to the support structures of hydroelectric and telephone utilities and need municipal rights of way to deploy our cable network. Where access to the structures of telephone utilities cannot be secured, we may apply to the CRTC to obtain a
right of access under the Telecommunications Act (Canada) (the Telecommunications Act). We have entered into comprehensive support structure access agreements with all of the major hydroelectric companies and all of the
major telecommunications companies in our service territory. In the event that we seek to renew or to renegotiate these agreements, we cannot guarantee that these agreements will continue to be available on favourable terms.

We may not successfully implement our business and operating strategies.

Our business strategies are based on leveraging an integrated platform of media assets. Our strategies include offering multi-platform
advertising solutions, generating and distributing content across a spectrum of media properties and assets, launching and deploying additional value-added products and services, pursuing cross-promotional opportunities, maintaining our advanced
broadband network, pursuing enhanced content development to reduce costs, further integrating the operations of our subsidiaries, leveraging geographic clustering and maximizing customer satisfaction. We may not be able to fully implement these
strategies or realize their anticipated results without incurring significant costs or not implement them at all. In addition, our ability to successfully implement these strategies could be adversely affected by a number of factors beyond our
control, including operating difficulties, increased ongoing operating costs, regulatory developments, general or local economic conditions, increased competition, technological



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changes and other factors described in this Risk Factors section. While the centralization of certain business operations and processes has the advantage of standardizing our
practices, thereby reducing costs and increasing effectiveness, it also represents a risk in itself should a business solution implemented by a centralized office throughout the organization fail to produce the intended results. We may also be
required to make capital expenditures or other investments, that may affect our ability to implement our business strategies if we are unable to secure additional financing on acceptable terms or to generate sufficient funds internally to cover
those requirements. Any material failure to implement our strategies could have a material adverse effect on our reputation, business, financial condition, prospects and results of operations, as well as on our ability to meet our obligations,
including our ability to service our indebtedness.

As part of our strategy, in recent years, we have entered into certain
agreements with third-parties under which we are committed to making significant operating expenditures in the future. We can provide no assurance that we will be successful in developing new activities in relation to these new engagements,
including the development of new revenue sources.

We could be adversely impacted by consumers trend to substitute cable telephony
and television services.

The recent trend toward mobile substitution or cord-cutting (when users cancel
their landline telephony services and opt for mobile telephony services only) is largely the result of the increasing mobile penetration rate in Canada and the various unlimited offers launched by mobile operators. In addition, there is also a
consumer trend to substitute wire and cable television for Internet access services in order to stream directly from broadcasters and over-the-top content providers. We may not be successful in converting our existing cable telephony subscriber base
to our mobile telephony services or in attracting customers to our over-the-top entertainment platforms (such as Club illico), which could have a material adverse effect on our business, our results of operation and our financial condition.

We could be adversely affected by the rapid growth of traffic volumes on the Internet.

Internet users are downloading an increasing amount of data each year and households are now connected to the Internet through a
combination of several computers, tablets and other mobile devices, leading to simultaneous flows per home, which constitutes a departure from the past, when a majority of households were connected to the Internet through a single computer. In
addition, some content on the Internet, such as videos, is now available at a higher bandwidth for which high-definition (or HD), as opposed to standard definition, is gradually becoming the norm. There has therefore been an
increase in data consumption and an intensification of Internet traffic during peak periods, which calls for increased bandwidth capacity to address the needs of our customers.

Equipment costs are under pressure in an effort to counterbalance customers demand for bandwidth. While we can relay some of this
pressure on costs to our manufacturers, adopt new technologies that allow cost reduction and implement other cost reduction initiatives, our inability to fully meet our increasing need for bandwidth may result in price hikes or in reduced
profitability.

We compete, and will continue to compete, with alternative technologies and we may be required to invest a significant
amount of capital to address continuing technological evolution and development.

The media industry is experiencing
rapid and significant technological changes, which have resulted in alternative means of program and content transmission. The continued growth of the Internet has presented alternative content distribution options that compete with traditional
media. Furthermore, in our video distribution markets, industry regulators have authorized DTH, microwave services and VDSL services and may authorize other alternative methods of transmitting television and other content with improved speed and
quality. We may not be able to successfully compete with existing or newly developed alternative technologies, such as IPTV, or we may be required to acquire, develop or integrate new technologies. The cost of the acquisition, development or
implementation of new technologies could be significant and our ability to fund such implementation may be limited, which could have a material adverse effect on our ability to successfully compete in the future. Any such difficulty or inability to
compete could have a material adverse effect on our business, reputation, prospects, financial condition or results of operations.

The continuous technological improvements to the Internet, combined with higher download speeds and cost reductions for customers, may divert a portion of our existing television subscriber base from our
video-on-demand services to new video-over-the-Internet model. While having a positive impact on the demand for our Internet services, video-over-the-Internet could adversely impact the demand for our video-on-demand services.



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If we do not effectively manage our growth, our business, results of operations and financial
condition could be adversely affected.

We have experienced substantial growth in our business and have significantly
expanded our operations over the years. We have sought in the past, and may, in the future, seek to further expand the types of businesses in which we participate, under appropriate conditions. We can provide no assurance that we will be successful
in either developing or fulfilling the objectives of any such business expansion.

In addition, our expansion may require us
to incur significant costs or divert significant resources, and may limit our ability to pursue other strategic and business initiatives, which could have an adverse effect on our business, financial condition, prospects or results of operations.
Furthermore, if we are not successful in managing our growth, or if we are required to incur significant or unforeseen costs, our business, results of operations and financial condition could be adversely affected.

We may not be successful in the development of our Sports and Entertainment business.

We have recently made and are continuing to make significant investments in an effort to develop our Sports and Entertainment business.
Some of these investments require significant capital expenditures, investments and management attention. The success of such investments involves numerous risks that could adversely affect our growth and profitability, including the following: the
risk that management may not be able to successfully manage the development of our Sports and Entertainment business; the risk that the development of the Sports and Entertainment business may place significant demands on management, diverting
attention from existing operations; the risk that investments may require substantial financial resources that otherwise could be used in the development of our other businesses; the risk that we will not be able to achieve the benefits we expect
from our investments in the development of our Sports and Entertainment business; the risk associated with a failure to make continued investments in our Sports and Entertainment business to respond to consumer trends and demands which could
adversely affect our ability to compete in the sports and entertainment industry.

The implementation of changes to the structure of our
business may be more expensive than expected and we may not gain all the anticipated benefits.

We have and we will
continue to implement changes to the structure of our business due to many factors such as the necessity of a corporate restructuring, a system replacement and upgrade, a process redesign and the integration of business acquisitions or existing
business units. These changes must be managed carefully to ensure that we capture the intended benefits. The implementation process may lead to greater-than-expected operational challenges and costs, expenses, customer loss and business disruption
for us, which could adversely affect our business and our ability to gain our anticipated benefits.



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We depend on key personnel and our inability to retain skilled employees may have an adverse effect on
our financial condition and results of operations.

Our success depends to a large extent on the continued services of
our senior management and our ability to retain skilled employees. There is intense competition for qualified management and skilled employees, and our failure to recruit, train and retain such employees could have a material adverse effect on our
business, financial condition and results of operations. In addition, in order to implement and manage our businesses and operating strategies effectively, we must sustain a high level of efficiency and performance and maintain content quality, we
must continually enhance our operational and management systems, and continue to effectively attract, train, motivate and manage our employees. If we are not successful in these efforts, it may have a material adverse effect on our business,
prospects, results of operations and financial condition.

Our Media segment faces substantial competition for advertising and
circulation revenues/audience.

Advertising revenue is the primary source of revenue for our Media segment. Our
revenues and operating results in these businesses depend on the relative strength of the economy in our principal newspaper and television markets, as well as the strength or weakness of local, regional and national economic factors. These economic
factors affect the levels of retail, national and classified newspaper advertising revenue, as well as television advertising revenue. Since a significant portion of our advertising revenue is derived from retail and automotive sector advertisers,
weakness in these sectors and in the real estate industry has had, and may continue to have, an adverse impact on the revenues and results of operations of our Media segment. Continuing or deepening softness in the Canadian or U.S. economy could
further adversely affect key national advertising revenues.

Advertising revenues for our Media segment are also driven by
readership and circulation levels, as well as by market demographics, price, service and advertiser results. Readership and circulation levels tend to be based on the content of the newspaper, service, availability and price. A prolonged decline in
readership and circulation levels in our newspaper business and lack of audience acceptance of our content would have a material effect on the rate and volume of our newspaper advertising revenues (as rates reflect circulation and readership, among
other factors), and could also affect our ability to institute circulation price increases for our print products, all of which could have a material adverse effect on our business, prospects, results of operations and financial condition.

The newspaper industry is experiencing structural changes, including the growing availability of free access to media,
shifting readership habits, digital transferability, the advent of real-time information and secular changes in the advertising industry as well as the declining frequency of regular newspaper buying, particularly among young people, who
increasingly rely on non-traditional media as a source for news. As a result, competition for advertising spend and circulation revenues comes not only from other newspapers and traditional media, but also from digital media technologies, which have
introduced a wide variety of media distribution platforms (including, most significantly, the Internet and distribution over wireless devices and e-readers) to readers and advertisers.

While we continue to pursue initiatives to offer value-added advertising solutions to our advertisers and to maintain our circulation
base, such as investments in the re-design and overhaul of our newspaper websites and the publication of e-editions of a number of our newspapers, we may not be successful in retaining our historical share of advertising revenues or in transferring
our audience to our new digital products. The ability of our Media segment to grow and succeed over the long-term depends on various factors, including our ability to attract advertisers and readers (including subscribers) to our online sites. Our
new initiatives developed to generate additional revenues from our websites (such as digital platform advertising and/or our paywall revenue model) may not be accepted by users and consequently, may negatively affect online traffic. In addition, we
can provide no assurance that we will be able to recover the costs associated with the implementation of these initiatives through increased circulation, advertising and digital revenues.

In broadcasting, the proliferation of television channels, progress in mobile and wireless technology, the migration of television
audiences to the Internet and the viewing publics increased control over the manner, content and timing of their media consumption through personal video recording devices, have all contributed to the fragmentation of the television viewing
audience and in a more challenging advertising sales environment. For example, the increased availability of personal video recording devices and video programming on the Internet, as well as the increased access to various media through mobile
devices, may all have the potential to reduce the viewing of our content through traditional



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distribution outlets. Some of these new technologies also give consumers greater flexibility to watch programming on a time-delayed or on-demand basis, or to fast-forward or skip advertisements
within our programming, which may adversely impact the advertising revenues we receive. Delayed viewing and advertisement skipping have the potential to become more common as the penetration of personal video recording devices increases and content
becomes increasingly available via Internet sources. If the broadcasting market continues to fragment, our audience share levels and our advertising revenues, results of operations, financial condition, business and prospects could be materially
adversely affected.

Our financial performance could be materially adversely affected if we cannot continue to distribute a wide range
of television programming on commercially reasonable terms.

The financial performance of our cable and mobile
services depends in large part on our ability to distribute a wide range of appealing, conveniently-scheduled television programming at reasonable rates. We obtain television programming rights from suppliers pursuant to programming contracts. In
recent years, these suppliers have become vertically integrated and are now more limited in number. The quality and amount of television programming we offer affect the attractiveness of our services to customers and, accordingly, the rates we can
charge for these services. We may be unable to maintain key programming contracts at commercially reasonable rates for television programming. Loss of programming contracts, our inability to obtain programming at reasonable rates or our inability to
pass-through rate increases to our customers could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, our ability to attract and retain cable customers depends, to a certain extent, on our capacity to offer quality content, high-definition programming, an appealing variety of programming
choices and packages, as well as multiplatform distribution and on-demand content, at competitive prices. If the number of specialty channels being offered does not increase at the level and pace comparable to our competitors, if the content offered
on such channels does not receive audience acceptance, or if we are unable to offer multiplatform availability, high definition programming and on-demand content, for capacity reasons among others, this may have a negative impact on revenues from
our cable operations.

The multiplication of foreign and deregulated content providers (often global players on the Internet)
puts pressure on the viability of our current business model for television distribution. Substantial capital expenditures on our infrastructure and in our research and development may be required to remain competitive.

We may be adversely affected by variations in our costs, quality and variety of our television programming.

The most significant costs in television broadcasting are programming and production costs. Increased competition in the television
broadcasting industry, developments affecting producers and distributors of programming content, the vertical integration of distributors and broadcasters, changes in viewer preferences and other developments could impact both the availability and
the costs of programming content, as well as the costs of production. Future increases or volatility in programming and production costs could adversely affect our operating results. Developments in cable, satellite or other forms of distribution
could also affect both the availability and the cost of programming and production and increase competition for advertising expenditures. As well, the value of royalties payable pursuant to the Copyright Actare frequently decided by the
Copyright Board of Canada during or even after the applicable period, which can cause retroactive increases in content costs.

We may be
adversely affected by variations in the cost of newsprint. In addition, our newspaper operations are labour-intensive, resulting in a relatively high fixed-cost structure.

Newsprint, which is the basic raw material used to publish newspapers, has historically been and may continue to be subject to
significant price volatility. Newsprint represents our single largest raw material expense and one of our Media segments most significant operating costs. Changes in the price of newsprint could significantly affect our income, and volatile or
increased newsprint costs have had, and may in the future have, a material adverse effect on our results of operations.

In
order to obtain more favourable pricing, we source substantially all of our newsprint from a single newsprint producer (our Newsprint Supplier). Pursuant to the terms of our agreement with our Newsprint Supplier, we obtain



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newsprint at a discount to market prices, receive additional volume rebates if certain thresholds are met and benefit from a ceiling on the unit cost of newsprint. On the expiry of our agreement
with our Newsprint Supplier, there can be no assurance that we will be able to renew this agreement or that our Newsprint Supplier will continue to supply newsprint to us on favourable terms, or at all, after the expiry of our agreement. If we are
unable to continue to source newsprint from our Newsprint Supplier on favourable terms, or if we are unable to otherwise source sufficient newsprint on terms acceptable to us, our costs could increase significantly, which could materially adversely
affect the profitability of our newspaper business and our results of operations. We also rely on our Newsprint Supplier for deliveries of newsprint. The availability of our newsprint supply, and therefore our operations, may be adversely affected
by various factors, including labour disruptions affecting our Newsprint Supplier or the cessation of operations of our Newsprint Supplier.

In addition, since our newspaper operations are labour intensive and located across Canada, our newspaper business has a relatively high fixed-cost structure. During periods of economic contraction, our
revenues may decrease while certain costs remain fixed, resulting in reduced earnings.

The launch of new specialty services may not be
as profitable as anticipated.

We are investing in the launch of new specialty services in our Broadcasting
operations. During the period immediately following the launch of a new specialty service, subscription revenues are always relatively modest, while initial operating expenses may prove more substantial. Furthermore, although we believe in the
potential associated with this strategy, there is a possibility that the anticipated profitability could take several years to materialize or may never materialize.

We may be adversely affected by the loss of key customers.

Our
Media segments businesses are based primarily on customer satisfaction with reliability, timeliness, quality and price and, in general, we do not have long-term or exclusive service agreements with our customers. We are unable to predict if,
or when, our customers will purchase our services. There can be no assurance that the revenues generated from key customers, individually or in the aggregate, will reach or exceed historical levels in any future period, or that we will be able to
develop relationships with new customers. We cannot assure you that we will continue to maintain favorable relationships with these customers or that they will not be adversely affected by economic conditions.

We provide our digital television, Internet access and cable telephony services through a single clustered network, which may be more vulnerable to
widespread disruption.

We provide our digital television, Internet access and cable telephony services through a
primary headend and our analog television services through twelve additional regional headends in our single clustered network. Despite available emergency backup or replacement sites, a failure in our primary headend, including exogenous threats,
such as natural disasters, sabotage or terrorism, or dependence on certain external infrastructure providers (such as electric utilities), could prevent us from delivering some of our products and services throughout our network until the failure
has been resolved, which may result in significant customer dissatisfaction, loss of revenues and potential civil litigation.

We are
dependent upon our information technology systems and those of certain third-parties. The inability to enhance our systems, or to protect them from a security breach, disaster or cyber-security threat, could have an adverse impact on our financial
results and operations.

The day-to-day operation of our business is highly dependent on information technology
systems, including those of certain third-party suppliers. An inability to maintain and enhance our existing information technology systems or obtain new systems to accommodate additional customer growth or to support new products and services could
have an adverse impact on our ability to acquire new subscribers, retain existing customers, produce accurate and timely billing, generate revenue growth and manage operating expenses, all of which could adversely impact our financial results and
position. In addition, although we use industry standard networks and established information technology security and



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survivability/disaster recovery practices, a security breach, disaster, cyber-security threat or a violation of our Internet security could have a material adverse effect on our reputation,
business, prospects, financial condition and results of operations.

We may not be able to protect our services from piracy, which may
have an adverse effect on our customer base and lead to a possible decline in revenues.

In our cable, Internet access
and telephony business, we may not be able to protect our services and data from piracy. We may be unable to prevent electronic attacks to gain unauthorized access to our network, analog and digital programming, and our Internet access services. We
use encryption technology to protect our cable signals from unauthorized access and to control programming access based on subscription packages. We may not be able to develop or acquire adequate technology to prevent unauthorized access to our
network, programming and data, which may have an adverse effect on our customer base and lead to a possible decline in our revenues as well as significant remediation costs and legal claims.

Malicious and abusive Internet practices could impair our cable data services.

Our cable data customers utilize our network to access the Internet and, as a consequence, we or they may become a victim of common malicious and abusive Internet activities, such as unsolicited mass
advertising (or spam) and dissemination of viruses, worms and other destructive or disruptive software. These activities could have adverse consequences on our network and our customers, including deterioration of service, excessive call volume
to call centers and damage to our customers equipment and data or ours. Significant incidents could lead to customer dissatisfaction and, ultimately, to loss of customers or revenues, in addition to increased costs to service our customers and
protect our network. Any significant loss of cable data, customers or revenue, or a significant increase in the costs of serving those customers could adversely affect our reputation, growth, business, prospects, financial condition and results of
operations.

We depend on third-party suppliers and providers for services, information and other items critical to our operations.

We depend on third-party suppliers and providers for certain services, hardware and equipment that are critical to
our operations and network evolution. These materials and services include set-top boxes, mobile telephony handsets and network equipment, cable and telephony modems, servers and routers, fibre-optic cable, telephony switches, inter-city links,
support structures, software, the backbone telecommunications network for our Internet access and telephony services, and construction services for expansion and upgrades of our cable and mobile networks. These services and equipment are
available from a limited number of suppliers and therefore we face the risks of supplier disruption, including business difficulties, restructuring or supply-chain issues. If no supplier can provide us with the equipment or services that we require
or that comply with evolving Internet and telecommunications standards or that are compatible with our other equipment and software, our business, financial condition and results of operations could be materially adversely affected. In addition, if
we are unable to obtain critical equipment, software, services or other items on a timely basis and at an acceptable cost, our ability to offer our products and services and roll out our advanced services may be delayed, and our business, financial
condition and results of operations could be materially adversely affected.

In addition, we obtain proprietary content
critical to our operations through licensing arrangements with content providers. Some providers may seek to increase fees for providing their proprietary content. If we are unable to renegotiate commercially acceptable arrangements with these
content providers or find alternative sources of equivalent content, our Media operations may be adversely affected.

We may be
adversely affected by litigation and other claims.

In the normal course of business, we are
involved in various legal proceedings and other claims relating to the conduct of our business. Although, in the opinion of our management, the outcome of current pending claims and other litigation is not expected to have a material adverse effect
on our reputation, results of operations, liquidity or financial position, a negative outcome in respect of any such claim or litigation could have such an adverse effect. Moreover, the cost of defending against lawsuits and diversion of
managements attention could be significant. See also Item 8. Financial Information  Legal Proceedings in this annual report.



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We may be adversely affected by strikes and other labour protests.

At December 31, 2014, approximately 45% of our employees were represented by collective bargaining agreements. Through our
subsidiaries, we are currently party to 77 collective bargaining agreements.

We currently have no labour disputes nor do we
currently anticipate any such labour dispute in the near future.

We can neither predict the outcome of current or future
negotiations relating to labour disputes, if any, union representation or renewal of collective bargaining agreements, nor guarantee that we will not experience future work stoppages, strikes or other forms of labour protests pending the outcome of
any current or future negotiations. If our unionized workers engage in a strike or any other form of work stoppage, we could experience a significant disruption to our operations, damage to our property and/or interruption to our services, which
could adversely affect our business, assets, financial position, results of operations and reputation. Even if we do not experience strikes or other forms of labour protests, the outcome of labour negotiations could adversely affect our business and
results of operations. Such could be the case if current or future labour negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. In addition, our ability to make short-term adjustments to control
compensation and benefits costs is limited by the terms of our collective bargaining agreements.

Our defined benefit pension plans are
currently underfunded and our pension funding requirements could increase significantly due to a reduction in funded status as a result of a variety of factors.

The economic cycle and employee demographics could have a negative impact on the funding of our defined benefit pension plans and related expenditures. There is no guarantee that the expenditures and
contributions required to fund these pension plans will not increase in the future and therefore negatively impact our operating results and financial position. Risks related to the funding of defined benefit plans may materialize if total
obligations with respect to a pension plan exceed the total value of its trust fund. Shortfalls may arise due to lower-than-expected returns on investments, changes in the discount rate used to assess the pension plans obligations, and
actuarial losses.

We may be adversely affected by exchange rate fluctuations.

Most of our revenues and expenses are denominated in Canadian dollars. However, certain expenditures, such as the purchase of set-top
boxes and cable modems, mobile devices (handsets) and certain capital expenditures, including certain costs related to the development and maintenance of our mobile network, are paid in U.S. dollars. Also, a substantial portion of our debt is
denominated in U.S. dollars, and interest, principal and premium, if any, are payable in U.S. dollars. For the purposes of financial reporting, any change in the value of the Canadian dollar against the U.S. dollar during a given
financial reporting period would result in a foreign exchange gain or loss on the translation of any unhedged U.S. dollar-denominated debt into Canadian dollars. Consequently, our reported earnings and
debt could fluctuate materially as a result of foreign-exchange gains or losses. Although we have entered into transactions to hedge the exchange rate risk with respect to our U.S. dollar-denominated debt outstanding at
December 31, 2014, and we intend in the future to enter into such transactions for new U.S. dollar-denominated debt, these hedging transactions could, in certain circumstances, prove economically ineffective and may not be successful in
protecting us against exchange rate fluctuations, or we may in the future be required to provide cash and other collateral to secure our obligations with respect to such hedging transactions, or we may in the future be unable to enter into such
transactions on favorable terms, or at all.

In addition, certain cross-currency interest rate swaps entered into by us and
our subsidiaries include an option that allows each party to unwind the transaction on a specific date at the then settlement amount.

The fair value of the derivative financial instruments we are party to is estimated using period-end market rates and reflects the amount we would receive or pay if the instruments were terminated and
settled at those dates, as adjusted for counterparties non-performance risk. At December 31, 2014, the net aggregate fair value of our cross-currency interest rate swaps and foreign-exchange
forward contracts was in a net asset position of $298.1 million on a consolidated basis. See also Item 11. Quantitative and Qualitative Disclosures About Market Risk of this annual report.



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Certain of the commodities we consume in our daily operations are traded on commodities
exchanges or are negotiated on their respective markets in U.S. dollars and, therefore, although we pay our suppliers in Canadian dollars, the prices we pay for such commodities may be affected by fluctuations in the exchange rate. We may in
the future enter into transactions to hedge the exchange rate risk related to the prices of some of those commodities. However, fluctuations of the exchange rate for our commodities purchases that are not hedged could affect the prices we pay for
such commodities and could have an adverse effect on our results of operations.

The volatility and disruptions in the capital and
credit markets could adversely affect our business, including the cost of new capital, our ability to refinance our scheduled debt maturities and meet our other obligations as they become due.

The capital and credit markets have experienced significant volatility and disruption over the last several years, resulting in periods
of upward pressure on the cost of new debt capital and severe restrictions in credit availability for many companies. In such periods, the disruptions in the capital and credit markets have also resulted in higher interest rates or greater credit
spreads on issuance of debt securities and increased costs under credit facilities. Disruptions in the capital and credit markets could increase our interest expense, thereby adversely affecting our results of operations and financial position.

Our access to funds under our existing credit facilities is dependent on the ability of the financial institutions that are
parties to those facilities to meet their funding commitments. Those financial institutions may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing
requests within a short period of time. Moreover, the obligations of the financial institutions under our credit facilities are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the
others.

Extended periods of volatility and disruptions in the capital and credit markets as a result of uncertainty, changing
or increased regulation of financial institutions, reduced financing alternatives or failures of significant financial institutions could adversely affect the availability and the affordability of funding needed for our businesses in the longer
term. Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Market disruptions and broader economic
challenges may lead to lower demand for certain of our products and increased incidences of customer inability to pay or timely pay for the services or products that we provide. Events such as these could adversely impact our results of operations,
cash flows, financial position and prospects.

A failure to adopt an ethical business conduct may adversely affect our reputation.

Any failure or perceived failure to adhere to our policies, the law or ethical business practices could significantly
affect our reputation and brands and could therefore negatively impact our financial performance. Our framework for managing ethical business conduct includes the adoption of a Code of Ethics which our directors and employees are required to
acknowledge and agree to on a regular basis, and as part of an independent audit and security function, maintenance of a whistle-blowing hotline. There can be no assurance that these measures will be effective to prevent violations or perceived
violations of law or ethical business practices.

Subject to the realization of various conditions and factors, we may have to record,
in the future, asset impairment charges, which could be material and could adversely affect our future reported results of operations and equity.

We have recorded in the past asset impairment charges which, in some cases, have been material. Subject to the realization of various factors, including, but not limited to, weak economic or market
conditions, we may be required to record in the future, in accordance with IFRS accounting valuation principles, additional non-cash impairment charges if the carrying value of an asset in our financial statements is in excess of its recoverable
value. Any such asset impairment charge could be material and may adversely affect our future reported results of operations and equity, although such charges would not affect our cash flow.



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We perform acquisitions, dispositions, business combinations, or joint ventures from time to time
which may involve significant risks and uncertainties.

From time to time, we engage in discussions and activities
with respect to possible acquisitions, dispositions, business combinations, or joint ventures intended to complement or expand our business, some of which may be significant transactions for us and involve significant risks and uncertainties. We may
not realize the anticipated benefit from any of the transactions we pursue, and may have difficulty incorporating or integrating any acquired business. Regardless of whether we consummate any such transaction, the negotiation of a potential
transaction (including associated litigation), as well as the integration of any acquired business, could require us to incur significant costs and cause diversion of managements time and resources and disrupt our business operations. We could
face several challenges in the consolidation and integration of information technology, accounting systems, personnel and operations.

If we determine to sell individual properties or other assets or businesses, we will benefit from the net proceeds realized from such sales. However, our revenues may suffer in the long term due to the
disposition of a revenue generating asset, or the timing of such dispositions may be poor, causing us to fail to realize the full value of the disposed asset, all of which may diminish our ability to repay our indebtedness at maturity.

Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and
prospects.

The competition for retail locations and the consolidation of independent retailers may adversely affect the expansion of
our Telecommunications business sale network.

The competition to offer products in the best available retail
commercial spaces is fierce in the telecommunications business. Some of our Telecommunications business competitors have pursued a strategy to sell their products through independent retailers to extend their presence on the market and some of
our competitors have also acquired certain independent retailers and created new distribution networks. This may result in limiting the expansion of our retail network and may contribute to isolate us from our competitors, which could have an
adverse effect on our business, prospects and results of operation.

Risks Relating to Regulation

We are subject to extensive government regulation and policy-making. Changes in government regulation or policies could adversely affect our
business, financial condition, prospects and results of operations.

Our operations are subject to extensive
government regulation and policy-making in Canada. Laws and regulations govern the issuance, amendment, renewal, transfer, suspension, revocation and ownership of broadcast programming and distribution licenses. With respect to distribution,
regulations govern, among other things, the distribution of Canadian and non-Canadian programming services and the maximum fees to be charged to the public in certain circumstances. There are significant restrictions on the ability of non-Canadian
entities to own or control broadcasting licenses and telecommunications carriers in Canada, although the federal government recently eliminated the foreign ownership restrictions on telecommunications companies with less than 10 percent of total
Canadian telecommunications market revenues. Our broadcasting distribution and telecommunications operations (including Internet access service) are regulated respectively by the Broadcasting Act (Canada) (the Broadcasting
Act) and the Telecommunications Act and regulations thereunder. The CRTC, which administers the Broadcasting Act and the Telecommunications Act, has the power to grant, amend, suspend, revoke and renew broadcasting licenses, approve
certain changes in corporate ownership and control, and make regulations and policies in accordance with the Broadcasting Act and the Telecommunications Act, subject to certain directions from the federal cabinet. For instance, the CRTC recently
adopted a new Wireless Code which regulates numerous aspects of the provision of retail wireless services. Our wireless and cable operations are also subject to technical requirements, license conditions and performance standards under the
Radiocommunication Act(Canada) (the Radiocommunication Act), which is administered by Industry Canada.

In addition, laws relating to communications, data protection, e-commerce, direct marketing and digital advertising and the use of public records have become more prevalent in recent years. Existing and
proposed legislation



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and regulations, including changes in the manner in which such legislation and regulations are interpreted by courts in Canada, the United States and other jurisdictions may impose limits on our
collection and use of certain kinds of information. On December 17, 2014, an amendment to the Telecommunications Act and the Radiocommunication Act was adopted to give to the CRTC and Industry Canada the power to impose monetary sanctions for
failure to comply with current regulations. For a more extensive description of the regulatory environment affecting our business, see Item 4. Information on the Corporation  Regulation.

Changes to the laws, regulations and policies governing our operations, the introduction of new laws, regulations, policies or terms of
license, the issuance of new licenses, including additional spectrum licenses to our competitors or changes in the treatment of the tax deductibility of advertising expenditures could have a material adverse effect on our business (including how we
provide products and services), financial condition, prospects and results of operations. In addition, we may incur increased costs in order to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. It is
difficult to predict in what form laws and regulations will be adopted or how they will be construed by the relevant courts, or the extent to which any changes might adversely affect us.

We may be adversely affected if we do not qualify for government programs or if such programs do not constitute sufficient incentives to producers.

We take advantage of several government programs designed to support production and distribution of televisual and cinematographical
products and magazine publishing in Canada, including federal and provincial refundable tax credits. There can be no assurance that the local cultural incentive programs which we may access in Canada will continue to be available in the future or
will not be reduced, amended or eliminated. Any future reductions or other changes in the policies or rules of application in Canada or in any of its provinces in connection with these government incentive programs, including any change in the
Québec or the federal programs providing for refundable tax credits, could increase the cost of acquiring and producing Canadian programs which are required to be broadcasted and may have a material adverse effect on our financial condition
and results of operations. Canadian content programming is also subject to certification by various agencies of the federal government. If programming fails to so qualify, we would not be able to use the programs to meet Canadian content programming
obligations and might not qualify for certain Canadian tax credits and government incentives.

To ensure that we maintain
minimum levels of Canadian ownership under the Broadcasting Act and other legislation under which it derives the benefit of tax credits and industry incentives, we have placed constraints on the issue and transfer of the shares of certain of our
subsidiaries.

In addition, the Canadian and provincial governments currently provide grants and incentives to attract foreign
producers and support domestic film and television production. Many of the major studios and other key customers of our Studios, Equipment and Post-Production Business, as well as content producers for our television broadcasting and production
operations, finance a portion of their production budgets through Canadian governmental incentive programs, including federal and provincial tax credits. There can be no assurance that the government grants and incentive programs presently being
offered to participants in the film and television production industry will continue at their present levels or at all. If such grants or incentives are reduced or discontinued, the level of activity in the motion picture and television industries
may be reduced, as a result of which our results of operations and financial condition might be adversely affected.

The
successful tax credit model of Québec and other provinces in Canada has been copied by other jurisdictions around the world, including by many states in the United States of America. Some producers may select locations other than
Québec to take advantage of tax credit programs they may conclude to be more or as attractive as those Québec offers. Other factors such as director or star preference may also have the effect of productions being shot in a location
other than Québec, may have a material adverse effect on our business, financial condition and results of operations.

Industry
Canada may not renew Videotrons AWS or 700 MHz licenses on acceptable terms, or at all.

Videotrons AWS
licenses were issued in December 2008 for a 10-year term. At least two years before the end of this term, and any subsequent term, Videotron may apply for a renewed license for a term of up to 10 years. AWS license renewal, including whether license
fees should apply for a subsequent license term, will be subject to a public consultation process initiated in the eighth year of the license.



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Videotrons 700 MHz licenses were issued in April 2014 for a 20-year term. At the end
of this term, Videotron expects that new licenses will be issued for a subsequent term through a renewal process, unless a breach of license condition by Videotron has occurred, a fundamental reallocation of spectrum to a new service is required, or
in the event that an overriding policy need arises. The process for issuing or renewing licenses after this term, including the terms and conditions of the new licenses and whether license fees should apply for a subsequent license term, are
expected to be determined by the Minister of Industry (Canada) following a public consultation.

We are required to provide third-party
ISPs with access to our cable systems, which may result in increased competition.

The largest cable operators in
Canada, including Videotron, have been required by the CRTC to provide third-party ISPs with access to their cable systems at mandated cost-based rates. Several third-party ISPs are interconnected to our cable network and are thereby providing
retail Internet access services.

The CRTC also requires large cable carriers, such as us, to allow third party ISPs to
provide telephony and networking (LAN/VPN) applications in addition to retail Internet access services. As a result of these requirements, we may experience increased competition for retail cable Internet and residential telephony customers.

In a notice of consultation issued on October 15, 2013, the CRTC initiated a comprehensive review of wholesale services
and associated policies. Among the issues considered in this proceeding are whether to extend mandatory wholesale high-speed access services to include fibre-to-the-premises (FTTP) services, or alternatively whether the CRTC should forbear from
regulating any existing wholesale services, as well as the approaches and principles the CRTC relies on to set rates for wholesale services. A public hearing on these matters took place in November and December, 2014, and a ruling is expected by
April 2015. As a result of this proceeding, we may experience increased competition for retail cable Internet and telephony customers. In addition, because our third-party Internet access rates are regulated by the CRTC, we could be limited in our
ability to recover our costs associated with providing this access.

We are subject to a variety of environmental laws and regulations.

We are subject to a variety of environmental laws and regulations. Some of our facilities are subject to federal,
provincial, state and municipal laws and regulations concerning, for example, emissions to the air, water and sewer discharge, the handling and disposal of hazardous materials and waste, recycling, soil remediation of contaminated sites, or
otherwise relating to the protection of the environment. In addition, laws and regulations relating to workplace safety and worker health, which, among other things, regulate employee exposure to hazardous substances in the workplace, also govern
our operations. Failure to comply with present or future laws or regulations could result in substantial liability for us.

Environmental laws and regulations and their interpretation have changed rapidly in recent years and may continue to do so in the future.
For instance, most Canadian provinces have recently implemented Extended Producer Responsibility (EPR) regulations in order to encourage sustainability practices such as the Ecological recovery and reclamation of electronic products,
which sets certain recovery targets and which may require us to monitor and adjust our practices in the future.

Our
properties, as well as areas surrounding those properties, particularly those in areas of long-term industrial use, may have had historic uses, or may have current uses, in the case of surrounding properties, which may affect our properties and
require further study or remedial measures. We cannot provide assurance that all environmental liabilities have been determined, that any prior owner of our properties did not create a material environmental condition not known to us, that a
material environmental condition does not otherwise exist on any of our properties, or that expenditure will not be required to deal with known or unknown contamination.

We own, through one of our subsidiaries, certain studios and vacant lots, some of which are located on a former landfill, with the presence of gas-emitting waste. As a result, the operation and ownership
of these studios and vacant lots carries an inherent risk of environmental and health and safety liabilities for personal injuries, property damage, release of hazardous materials, remediation and clean-up costs and other environmental damages
(including potential civil actions, compliance or remediation orders, fines and other penalties), and may result in being involved from time to time in administrative and judicial proceedings relating to such matters, which could have a material
adverse effect on our business, financial condition and results of operations.



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Concerns about alleged health risks relating to radiofrequency emissions may adversely affect our
business.

Some studies have alleged links between radiofrequency emissions from certain wireless devices and cell
sites and various health problems or possible interference with electronic medical devices, including hearing aids and pacemakers. All our cell sites comply with applicable laws and we rely on our suppliers to ensure that the network equipment and
customer equipment supplied to us meets all applicable safety requirements. While there is no definitive evidence of harmful effects from exposure to radiofrequency emissions when the limits imposed by applicable laws and regulations are complied
with, additional studies of radiofrequency emissions are ongoing and we cannot be sure that the results of any such future studies will not demonstrate a link between radiofrequency emissions and health problems.

The current concerns over radiofrequency emissions or perceived health risks of exposure to radiofrequency emissions could lead to
additional governmental regulation, diminished use of wireless services, including Videotrons, or expose us to potential litigation. Any of these could have a material adverse effect on our business, prospects, revenues, financial condition
and results of operations.

Risks Relating to our Senior Notes and our Capital Structure

Our indebtedness and significant interest payment requirements could adversely affect our financial condition and therefore make it more difficult
for us to fulfill our obligations, including our obligations under our Senior Notes.

We currently have a substantial
amount of debt and significant interest payment requirements. As at December 31, 2014, we had $5.21 billion of consolidated long-term debt (long-term debt plus bank borrowings). Our indebtedness could have significant consequences,
including the following:



| |  |  | increase our vulnerability to general adverse economic and industry conditions;
| | - |  | -------------------------------------------------------------------------------



| |  |  | require us to dedicate a substantial portion of our cash flow from operations to making interest and principal payments on our indebtedness, reducing
the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | place us at a competitive disadvantage compared to our competitors that have less debt or greater financial resources; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | limit, along with the financial and other restrictive covenants in our indebtedness, our ability to, among other things, borrow additional funds on
commercially reasonable terms, if at all.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Although we have significant indebtedness, as at
December 31, 2014, we had approximately $1.03 billion available for additional borrowings under our existing credit facilities on a consolidated basis, and the indentures governing our outstanding Senior Notes permit us to incur
substantial additional indebtedness in the future. If we or our subsidiaries incur additional debt, the risks we now face as a result of our leverage could intensify. For more information regarding our long-term debt and its maturities, refer to
Note 20 to our audited consolidated financial statements for the year ended December 31, 2014 included under Item 18. Financial Statements of this annual report. See also the risk factor  Restrictive
covenants in our outstanding debt instruments may reduce our operating and financial flexibility, which may prevent us from capitalizing on certain business opportunities.

Restrictive covenants in our outstanding debt instruments may reduce our operating and financial flexibility, which may prevent us from capitalizing on certain business opportunities.

Our senior secured credit facilities and the respective indentures governing our Senior Notes contain a number of
operating and financial covenants restricting our ability to, among other things:



| |  |  | incur indebtedness;
| | - |  | -------------------



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| |  |  | create liens;
| | - |  | -------------



| |  |  | pay dividends on or redeem or repurchase our stock;
| | - |  | ---------------------------------------------------



| |  |  | make certain types of investments;
| | - |  | ----------------------------------



| |  |  | restrict dividends or other payments from restricted subsidiaries;
| | - |  | ------------------------------------------------------------------



| |  |  | enter into transactions with affiliates;
| | - |  | ----------------------------------------



| |  |  | issue guarantees of debt; and
| | - |  | -----------------------------



| |  |  | sell assets or merge with other companies.
| | - |  | ------------------------------------------

If we are unable to comply with these covenants and are unable to obtain waivers from our creditors, we would be unable to make additional borrowings under our credit facilities, our indebtedness under
these agreements would be in default and that could, if not cured or waived, result in an acceleration of such indebtedness and cause cross-defaults under our other debt, including our Senior Notes. If our indebtedness is accelerated, we may not be
able to repay our indebtedness or borrow sufficient funds to refinance it, and any such prepayment or refinancing could adversely affect our financial condition. In addition, if we incur additional debt in the future or refinance existing debt, we
may be subject to additional covenants, which may be more restrictive than those to which we are currently subject. Even if we are able to comply with all applicable covenants, the restrictions on our ability to manage our business in our sole
discretion could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that we believe would be beneficial to us.

We are a holding company and depend on our subsidiaries to generate sufficient cash flow to meet our debt service obligations, including payments
on our Senior Notes.

We are a holding company and a substantial portion of our assets are the capital stock of our
subsidiaries. As a holding company, we conduct substantially all of our business through our subsidiaries, which generate substantially all of our revenues. Consequently, our cash flow and ability to service our debt obligations, including our
outstanding Senior Notes, are dependent on the cash flow of our existing and future subsidiaries and the distribution of this cash flow to us, or on loans, advances or other payments made by these entities to us. The ability of these entities to pay
dividends or make loans, advances or payments to us will depend on their operating results and will be subject to applicable laws and contractual restrictions contained in the instruments governing their debt. Videotron has several series of debt
securities outstanding and both Videotron and TVA Group have credit facilities that limit their ability to distribute cash to us. In addition, if our existing or future subsidiaries incur additional debt in the future or refinance existing debt, we
may be subject to additional contractual restrictions contained in the instruments governing that debt, which may be more restrictive than those to which we are currently subject to.

The ability of our subsidiaries to generate sufficient cash flow from operations to allow us to make scheduled payments on our debt
obligations will depend on their future financial performance, which will be affected by a range of economic, competitive and business factors as well as structural changes, many of which are outside of our or their control. If the cash flow and
earnings of our operating subsidiaries and the amount that they are able to distribute to us, as dividends or otherwise, are not sufficient for us, we may not be able to satisfy our debt obligations. If we are unable to satisfy our debt obligations,
we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments, or seeking to raise additional capital. We can provide no assurance that any such
alternative refinancing would be possible, that any assets could be sold, or, if sold, of the timing of the sales and the amount of proceeds realized from those sales, that additional financing could be obtained on acceptable terms, if at all, or
that additional financing would be permitted under the terms of our various debt instruments then in effect. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance these obligations on commercially reasonable
terms, could have a material adverse effect on our business, financial condition, results of operations and prospects.



19



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We may be required from time to time to refinance certain of our indebtedness. Our inability to do so
on favorable terms, or at all, could have a material adverse effect on us.

We may be required from time to time to
refinance certain of our existing debt at or prior to maturity. Our ability and our subsidiaries ability to obtain additional financing to repay such existing debt at maturity will depend upon a number of factors, including prevailing market
conditions, credit availability and our operating performance. There can be no assurance that any such financing will be available to us on favorable terms, or at all. See also the risk factor  The volatility and disruptions in the
capital and credit markets could adversely affect our business, including the cost of new capital, our ability to refinance our scheduled debt maturities and meet our other obligations as they become due.

There is no public market for our Senior Notes.

There is currently no established trading market for our issued and outstanding Senior Notes and we do not intend to apply for listing of any of our Senior Notes on any securities exchange or to arrange
for any quotation on any automated dealer quotation systems. No assurance can be given as to the prices or liquidity of, or trading markets for, any series of our Senior Notes. The liquidity of any market for our Senior Notes will depend upon the
number of holders of our Senior Notes, the interest of securities dealers in making a market in our Senior Notes, prevailing interest rates, the market for similar securities and other factors, including general economic conditions, our financial
condition and performance and our prospects. The absence of an active market for our Senior Notes could adversely affect their market price and liquidity.

In addition, the market for non-investment grade debt has historically been subject to disruptions that have caused volatility in prices of securities. It is possible that the market for our Senior Notes
will be subject to such disruptions. Any such disruptions may have a negative effect on a holders ability to sell our Senior Notes, regardless of our prospects and financial performance.

We may not be able to finance an offer to purchase our Senior Notes following a change of control as required by the respective indentures
governing our Senior Notes because we may not have sufficient funds at the time of the change of control or our senior secured credit facilities may not allow the repurchases.

If we experience certain change of control events, as specified in the respective indentures governing our Senior Notes, we may be
required to make an offer to repurchase all of our Senior Notes prior to maturity. We can provide no assurance that we will have sufficient funds or be able to arrange for additional financing to repurchase our Senior Notes following such change of
control. There is no sinking fund with respect to our outstanding Senior Notes.

In addition, a change of control would be an
event of default under our senior secured credit facilities. Any future credit agreement or other agreements relating to our senior indebtedness to which we become a party may contain similar provisions. Our failure to repurchase our Senior Notes if
required upon a change of control would, pursuant to the terms of the respective indentures governing our outstanding Senior Notes, constitute an event of default under such indentures. Any such default could, in turn, constitute an event of default
under future indebtedness, any of which may cause the related debt to be accelerated after the expiry of any applicable notice or grace periods. If debt were to be accelerated, we may not have sufficient funds to repurchase our Senior Notes and
repay the debt.

Canadian bankruptcy and insolvency laws may impair the trustees ability to enforce remedies under the indentures
governing our Senior Notes or the Senior Notes themselves.

The rights of the trustees, who represent the holders of
our Senior Notes, to enforce remedies could be delayed by the restructuring provisions of applicable Canadian federal bankruptcy, insolvency and other restructuring legislation if the benefit of such legislation is sought with respect to us. For
example, both the Bankruptcy and Insolvency Act(Canada) and the Companies Creditors Arrangement Act (Canada) (the CCAA) contain provisions enabling an insolvent person to obtain a stay of proceedings against
its creditors and to file a proposal to be voted on by the various classes of its affected creditors. A restructuring proposal, if accepted by the requisite majorities of each affected class of creditors, and if approved by the relevant
Canadian court, would be binding on all creditors within each affected class, including those creditors that did not vote to accept the proposal. Moreover, this legislation, in certain instances, permits the insolvent debtor to retain possession and
administration of its property, subject to court oversight, even though it may be in default under the applicable debt instrument, during the period that the stay against proceedings remains in place. In addition, it may be possible in certain
circumstances to restructure certain debt obligations under the corporate governing statute applicable to the debtor.



20



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The powers of the court under the Bankruptcy and Insolvency Act (Canada) and
particularly under the CCAA have been interpreted and exercised broadly so as to protect a restructuring entity from actions taken by creditors and other parties. Accordingly, we cannot predict whether payments under our outstanding Senior Notes
would be made during any proceedings in bankruptcy, insolvency or other restructuring, whether or when the trustees could exercise their respective rights under the respective indentures governing each series of our Senior Notes or whether and to
what extent holders of our Senior Notes would be compensated for any delays in payment, if any, of principal, interest and costs, including the fees and disbursements of the respective trustees.

Non-U.S. holders of our Senior Notes are subject to restrictions on the transfer or resale of our Senior Notes.

Although we have registered certain series of our Senior Notes under the Securities Act, we did not, and we do not intend to, qualify our
Senior Notes by prospectus in Canada, and, accordingly, the Senior Notes remain subject to restrictions on resale and transfer in Canada. In addition, non-U.S. holders remain subject to restrictions imposed by the jurisdiction in which the holder is
resident.

U.S. investors in our Senior Notes may have difficulties enforcing civil liabilities.

We are incorporated under the laws of the Province of Québec. Substantially all of our directors, controlling persons and officers
are residents of Canada or other jurisdictions outside the United States, and all or a substantial portion of their assets and substantially all of our assets are located outside the United States. We have agreed, in accordance with the terms
of the respective indentures governing each series of our Senior Notes (other than our Canadian-dollar denominated Senior Notes), to accept service of process in any suit, action or proceeding with respect to the indentures or such Senior Notes
brought in any federal or state court located in New York City by an agent designated for such purpose, and to submit to the jurisdiction of such courts in connection with such suits, actions or proceedings. However, it may be difficult for
holders of our Senior Notes to effect service of process within the United States upon directors, controlling persons, officers and experts who are not residents of the United States or to enforce against us or them in the United States
upon judgments of courts of the United States predicated upon civil liability under United States federal or state securities laws or other laws of the United States. In addition, there is doubt as to the enforceability in Canada of
liabilities predicated solely upon United States federal or state securities laws against us or against our directors, controlling persons, officers and experts who are not residents of the United States, in original actions or in actions
for enforcement of judgments of courts of the United States.

Although our Senior Notes are referred to as senior notes,
they are effectively subordinated to our secured indebtedness and structurally subordinated to the liabilities of our subsidiaries.

Our Senior Notes are unsecured and, therefore, are effectively subordinated to any secured indebtedness that we may incur to the extent of the assets securing such indebtedness. In the event of a
bankruptcy or similar proceeding involving us, the assets that serve as collateral for any secured indebtedness will be available to satisfy the obligations under the secured indebtedness before any payments are made on the Senior Notes. The Senior
Notes are effectively subordinated to any borrowings under our senior secured credit facilities. In addition, our senior secured credit facilities and the respective indentures governing our Senior Notes permit us to incur additional secured
indebtedness in the future, which could be significant.

Our subsidiaries do not guarantee the Senior Notes and have no
obligation, contingent or otherwise, to pay amounts due under the Senior Notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment. Holders of Senior Notes do not have a claim as a creditor
against our subsidiaries. The Senior Notes are, therefore, structurally subordinated to all indebtedness and other obligations of our subsidiaries. In the event of insolvency, liquidation, reorganization, dissolution or other winding up of any such
subsidiary, all of such subsidiarys creditors (including trade creditors) would be entitled to payment in full out of such subsidiarys assets before the holders of our Senior Notes would be entitled to any payment.



21



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ITEM 4  INFORMATION ON THE CORPORATION

A - History and Development of Quebecor Media

Our legal and commercial name is Quebecor Media Inc. Our registered office is located at 612 St-Jacques Street, Montréal, Québec, Canada H3C 4M8, and our telephone number is
(514) 380-1999. Our corporate website may be accessed through the URL http://www.quebecor.com. The information found on our corporate website or on any other website to which we refer in this annual report does not, however, form part of this
annual report and is not incorporated by reference herein. Our agent for service of process in the United States is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.

Quebecor Media was incorporated in Canada on August 8, 2000 under Part 1A of the Companies Act (Québec) (since
February 14, 2011, the Business Corporations Act (Québec)).

Since December 31, 2011, we have
undertaken and/or completed several business acquisitions, combinations, divestitures and business development projects and financing transactions through our direct and indirect subsidiaries, including, among others, the following:



| |  |  | We have continued to actively pursue the roll-out of Videotrons mobile network. As of December 31, 2014, Videotrons mobile telephony
services covered the Province of Québec (7.4 million persons) and Eastern Ontario. During 2014, we activated 128,452 net new lines on our advanced mobile network at a pace of approximately 10,704 net new lines per month, bringing our total
mobile customer base to 632,766 activated lines.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 20, 2015, TVA Group announced the closing of its rights offering in each of the provinces of Canada pursuant to a short form prospectus
dated February 4, 2015, in which all holders of TVAs outstanding Class A common shares and Class B non-voting shares (Class B Non-Voting Shares), subject to applicable law, received rights to subscribe for Class B
Non-Voting Shares on an equitable and proportional basis (the TVA Rights Offering) for aggregate gross proceeds of approximately $110.0 million. In accordance with a standby commitment agreement entered into with TVA Group on
January 16, 2015, TVA Group paid to Quebecor Media a standby commitment fee of $1.1 million, representing 1% of the aggregate gross proceeds of the TVA Rights Offering.In connection with the TVA Rights Offering, Quebecor Media
subscribed for 17,300,259 additional Class B Non-Voting Shares of TVA Group.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 11, 2015, Videotron announced that it had issued a notice of redemption for all of its outstanding 63/8% Senior Notes due December 15, 2015. The redemption is anticipated to be completed on April 10, 2015.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 11, 2015, Videotron announced a transaction whereby it acquired 4Degrees Colocation and its data centre, the largest in Québec
City, for cash consideration of $31.5 million, which could increase to $35.5 million if certain targets are reached. 4Degrees Colocation is one of the few data centres in the Province of Québec to be Tier III certified by the Uptime
Institute, an international standard that recognizes maximum reliability and operational sustainability.
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| |  |  | On March 6, 2015, Industry Canada announced that Videotron was the successful bidder for four 30 MHz licenses in the auction for AWS-3 commercial
mobile spectrum. We obtained the 30 MHz licenses for Eastern Québec, Southern Québec, Northern Québec and Eastern Ontario / Outaouais, covering 100% of Québecs population and that of the Ottawa region, for a total
price of $31.8 million.
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| |  |  | On February 12, 2015, Quebecor Media announced the entering into of a 10-year agreement with Société de transport de
Lévis pursuant to which we will install, maintain, manage and advertise on Société de transport de Lévis transit and bus shelters. On July 23, 2014, Quebecor Media announced the entering into of a
20-year agreement with Société de transport de Lavalwhich began on August 1, 2014, pursuant to which we will install, maintain, manage and advertise on Société de transport de Lavals bus
shelters.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | This followed Quebecor Medias selection on June 21, 2012, following an invitation to tender, to install, maintain and manage the advertising on Société de transport de
Montréal (STM) bus shelters for the next 20 years.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On February 3, 2015, Quebecor Media announced a strategic partnership for the operation of the new Québec City multipurpose arena (the
Québec City Arena) with (i) Live Nation Entertainment, including two of its main divisions, namely Live Nation Concerts, the global market leader in concert production, and the Ticketmaster ticketing service, which
operates in the Province of Québec under the name Admission, and (ii) Levy Restaurants, with an emphasis on building a world class culinary experience with a local food and beverage program.
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| |  |  | On December 30, 2014, TVA Group closed its acquisition of substantially all of the assets of A.R. Global Vision Ltd. (which amalgamated with
Vision Globale Services Créatifs Inc. on November 19, 2014) (the VG Acquisition), which assets are used in carrying on a business operating a high end spectrum of services for the film and television industries,
including complete studio services, soundstage and equipment leasing services, post-production, visual effects and 3D animation, production and management of assets for distribution and broadcast through film, television, Internet and mobile
networks, providing for a one-stop shop for the film and television industry (the Studios, Equipment and Post-Production Business). For the acquisition of the Studios, Equipment and Post-Production Business, TVA Group paid cash
consideration of $116.1 million, subject to certain adjustments.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On November 27, 2014, we acquired a Québec Major Junior Hockey League (QMJHL) franchise, the Remparts de
Québec.
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | On November 17, 2014, TVA Group announced a transaction whereby it acquired from Transcontinental Inc. companies and participations in companies
that publish 15 magazines, operate websites and a custom publishing business in the Province of Québec, for cash consideration of $55.5 million (the Transcontinental Transaction). The Transcontinental Transaction was
authorized by the Competition Bureau on March 2, 2015. The closing of this transaction is expected to take place within a few weeks of such authorization.
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| |  |  | On November 3, 2014, TVA Group amended its bank credit facilities to (i) increase the amount available under its revolving facility from
$100.0 million to $150.0 million, (ii) extend the maturity of its revolving credit facility from February 2017 to February 2019 and (iii) create a new $75.0 million term facility maturing November 3, 2019 to replace its
previous term facility at its maturity on December 11, 2014.
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| |  |  | On October 6, 2014, Quebecor Media announced the sale of 175 English-language newspapers and publications to Postmedia Network Canada Corporation
for cash consideration of $316.0 million, which transaction includes the Sun chain of dailies, namely the Ottawa Sun, Toronto Sun, Winnipeg Sun, Edmonton Sun and Calgary Sun, as well as The London Free Press, the 24 Hours dailies in Toronto and
Vancouver, and community dailies and weeklies, buyers guides and specialty publications as well as the Canoe portals English-Canadian operations and eight printing plants, including the Islington (Ontario) plant (the
Postmedia Transaction). Our French-language newspapers and publications, including Le Journal de Montréal, Le Journal de Québec and the 24 Heures (Montréal), are not included
in the Postmedia Transaction. The Postmedia Transaction is subject to approval by regulatory authorities, specifically the Competition Bureau.
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| |  |  | On September 10, 2014, Videotron launched its LTE mobile network, which reaches nearly 90% of the population of the Province of Québec and
supports speed of up to 150 mbps.
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| |  |  | On September 2, 2014, Quebecor Media announced the closing of a transaction whereby it sold Nurun Inc. to Publicis Groupe for cash consideration
of $125.0 million.
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| |  |  | On July 31, 2014, Quebecor Media announced the creation of its Media Group, a new segment dedicated to entertainment and news media which includes
the operations of TVA Group, Sun Media, QMI Agency, Quebecor Media Out-of-Home, Quebecor Media Sales (QMI Sales), Quebecor Media Network,
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23



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| | Quebecor Media Printing, Sogides Group Inc. and CEC Publishing Inc. The Media Group has activities in broadcasting, magazine publishing, book distribution and publishing, newspaper publishing and
other media related operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On June 1, 2014, Quebecor Media closed the transaction whereby it sold to Transcontinental Interactive Inc., a subsidiary of Transcontinental
Inc., its 74 Québec weeklies for cash consideration of $75.0 million (the TC Transaction).
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| |  |  | On April 9, 2014, Videotron announced the closing of the offering and sale of 53/8% Senior Notes, maturing on June 15, 2024, in the aggregate principal amount of US$600.0 million for net proceeds of $654.5 million (net of financing expenses). The proceeds of this offering were
used on April 24, 2014 to finance the early redemption and withdrawal of US$260.0 million aggregate principal amount of Videotrons outstanding
91/8% Senior Notes, issued on March 5, 2009 and maturing in April 15, 2018, to repay borrowings under its revolving credit facility, to pay related fees and expenses and the remainder for general
corporate purposes.
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| |  |  | In March and April, 2014, Quebecor Media repurchased and retired US$380.0 million aggregate principal amount of its 73/4% Senior Notes issued on October 5, 2007 and due March 15, 2016 and settled the related hedging contracts.
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| |  |  | On April 3, 2014, after final payment was made on the spectrum awarded in the auction ended February 19, 2014, Industry Canada issued seven
700 MHz licenses to Videotron. The operating licenses, acquired for $233.3 million, cover the entire provinces of Québec, Ontario (except Northern Ontario), Alberta and British Columbia, for a total covered population of more than
28 million, representing approximately 80% of Canadas population.
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| |  |  | On November 26, 2013, Quebecor announced an agreement with Rogers Communications Inc. and the National Hockey League (NHL)
whereby TVA Sports became the NHLs official French-language broadcaster in Canada. The 12-year agreement has begun with the 2014-15 season. Among other things, TVA Sports obtained broadcast rights to 22 Montréal Canadiens regular
season games, exclusive French-language broadcast rights to all playoff games (including those involving the Montréal Canadiens) and the Stanley Cup final, broadcast rights to all national games involving Canadian teams and up to
160 games between American NHL teams, and a number of NHL special events, including the all-star game and the draft.
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| |  |  | On August 30, 2013, Quebecor Media redeemed US$265.0 million in aggregate principal amount of its outstanding 73/4% Senior Notes issued on January 17, 2006 and due in March 2016, and settled the related hedging contracts.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On August 29, 2013, Quebecor Media issued a US$350.0 million senior secured term loan B at a price of 99.50% for net proceeds of
$358.4 million (net of financing expenses). This term loan bears interest at the U.S. London Interbank Offered Rate (LIBOR), subject to a LIBOR floor of 0.75%, plus a premium of 2.50%. It provides for quarterly amortization
payments totalling 1.00% per annum of the original principal amount, with the balance payable on August 17, 2020.
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| |  |  | On July 18, 2013, TVA Group announced the acquisition of Les Publications Charron & Cie inc., publisher of La Semaine magazine,
and of Charron Éditeur inc., which was subsequently transferred to Sogides Group Inc., a subsidiary in our Media segment.
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| |  |  | On June 17, 2013, Videotron announced the closing of the offering and sale of 55/8% Senior Notes, maturing on June 15, 2025, in the aggregate principal amount of $400.0 million for net proceeds of $394.8 million (net of financing expenses). The proceeds of this offering were
used on July 2, 2013 to finance the early redemption and withdrawal of US$380.0 million aggregate principal amount of Videotrons outstanding
91/8% Senior Notes, issued on April 15, 2008 and maturing in April 2018 and to settle the related hedging contracts.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24



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| |  |  | In June 2013, Videotron amended its $575.0 million secured revolving credit facility to extend the maturity date to July 2018 and to amend
some of the terms and conditions of the facility.
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| |  |  | In June 2013, Quebecor Media amended its bank credit facilities to extend the maturity of its $300.0 million revolving credit facility to
January 2017 and to amend its terms and conditions.
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| |  |  | On May 31, 2013, Quebecor Media sold its specialized web sites Jobboom and Réseau Contact to Mediagrif Interactive Technologies
(Mediagrif) for a total consideration of $65.0 million. The dispositions of Jobboom and Réseau Contact were completed on June 1, 2013, and November 29, 2013, respectively.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On May 29, 2013, Videotron announced an agreement with Rogers Communications Partnership (Rogers) for the cooperation and
collaboration in the build-out and operation of a shared LTE wireless network in the Province of Québec and the Ottawa region (the Rogers LTE Agreement). Both Videotron and Rogers will maintain their business independence,
including product and service portfolios, billing systems and customer data. As part of the Rogers LTE Agreement, Rogers and Videotron will provide each other with services for which Videotron will receive $93.0 million and Rogers will receive
$200.0 million, payable over a period of 10 years. In addition to the LTE network build-out and sharing agreement, Videotron and Rogers have also come to an agreement regarding Videotrons unused AWS spectrum in the Greater Toronto Area.
Videotron has the option to transfer its Toronto spectrum license to Rogers since January 1, 2014, for an aggregate consideration of $180.0 million.
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| |  |  | On May 24, 2013, Quebecor announced the acquisition of Event Management Gestev Inc. (Gestev), a Québec City sports and
cultural events manager. Gestev was founded in 1992 and has produced numerous high-profile events such as the Red Bull Crashed Ice extreme race, the Vélirium (International Mountain Bike Festival and World Cup), the Transat Québec
Saint-Malo sailing race, Sprint Québec (FIS Cross-Country World Cup), and the Snowboard Jamboree (including the FIS Snowboard World Championships).
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| |  |  | On December 17, 2012, Quebecor Media prepaid the outstanding balance of its term loan B for a cash consideration of $153.9 million.
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| |  |  | On October 11, 2012, we repurchased 20,351,307 of our common shares held by CDP Capital for an aggregate purchase price of $1.0 billion, paid in
cash, and, concurrently, with that transaction, Quebecor purchased 10,175,653 of our common shares held by CDP Capital. Following completion of these transactions, Quebecors interest in Quebecor Media increased from 54.7% to 75.4% and CDP
Capitals interest decreased from 45.3% to 24.6%.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Also on October 11, 2012, Quebecor Media issued US$850.0 million aggregate principal amount of its 53/4% Senior Notes due 2023 for net proceeds of $820.7 million (net of financing expenses) and $500.0 million aggregate principal amount of its 6 5/8% Senior Notes due 2023 for net proceeds of $493.8 million (net of financing expenses). Quebecor Media used the proceeds of these offerings to finance: (i) the repurchase for cancellation from
CDP Capital of 20,351,307 of its common shares for an aggregate purchase price of $1.0 billion, (ii) the redemption and retirement of US$320.0 million aggregate principal amount of its issued and outstanding 7 3/4% Senior Notes due 2016 issued in 2007 and (iii) for the payment of related transaction fees and expenses.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In March and April 2012, Quebecor Media repurchased and retired US$260.0 million aggregate principal amount of its 73/4% Senior Notes due 2016 issued in 2006 and settled the related hedging contracts.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 14, 2012, Videotron issued US$800.0 million aggregate principal amount of its 5% Senior Notes due 2022 for net proceeds of
$787.6 million (net of financing expenses). Videotron used the proceeds to repurchase and retire all US$395.0 million aggregate principal amount of its outstanding 67/8% Senior Notes due 2014, to fully repay the borrowings under its revolving credit facility, to pay related fees and expenses and the remainder for general corporate purposes.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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B - Business Overview

Overview

We are one of Canadas leading media companies, with
activities in cable distribution, telecommunications, newspaper publishing and distribution, Internet portals and specialized websites services, television broadcasting, studio, soundstage and equipment leasing services, post-production, visual
effects and 3D animation, book and magazine retailing, publishing and distribution, video and console games rental and distribution, music recording, production, distribution and streaming, production of shows and events, video game development, out
of home advertising, two QMJHL teams and sporting and cultural events management. Through our subsidiary Videotron, we are a premier cable and mobile communications service provider. We hold leading positions in the creation, promotion and
distribution of news, entertainment and Internet-related services that are designed to appeal to audiences in every demographic category. We continue to pursue a convergence strategy to capture synergies within our portfolio of media properties.

During the third quarter of 2014, the Corporation changed its organisational structure and its operations are now managed
through the following three segments: (i) Telecommunications, (ii) Media and (iii) Sports and Entertainment. The reorganization consisted in (a) the creation of the new Media segment, which includes all activities of the previous
News Media and Broadcasting segments, as well as the book publishing and distribution activities previously included in the Leisure and Entertainment segment, (b) the creation of the new Sports and
Entertainment segment, which includes all operating, production, distribution and management activities of the previous Leisure and Entertainment segment relating to music, entertainment, sports and the future Québec City Arena,
and (c) the transfer of the retail businesses from the previous Leisure and Entertainment segment to the Telecommunications segment. Accordingly, prior period figures in the Corporations segmented information presented in this
annual report have been reclassified to reflect these changes.

On October 6, 2014, we announced that Quebecor Media had
entered into the Postmedia Transaction. The Postmedia Transaction is subject to approval by regulatory authorities, specifically the Competition Bureau. While the Postmedia Transaction is under review and pending the approval from the regulatory
authorities, Quebecor Media will continue publishing the 175 newspapers and publications sold as part of the Postmedia Transaction, including the Sun chain of dailies, namely the Ottawa Sun, Toronto Sun, Winnipeg Sun, Edmonton Sun and Calgary Sun,
as well as The London Free Press, the 24 Hours dailies in Toronto and Vancouver, and community dailies and weeklies, buyers guides and specialty publications as well as the Canoe portals English-Canadian operations and eight
printing plants, including the Islington (Ontario) plant. The numbers and percentages presented in this section in connection with Sun Medias operations as of December 31, 2014 and comparative years do not reflect the sale of the 175
newspapers and publications sold as part of the Postmedia Transaction, as the Corporation continues to operate the assets sold as part of the Postmedia Transaction until the approval from the regulatory authorities. However, the businesses sold
pursuant to the Postmedia Transaction are treated as discontinued operations in our audited consolidated financial statements for the year ended December 31, 2014 and comparative years as well as in the managements discussion and analysis
of financial condition and results of operations for such period, which are included in Item 18. Financial Statements and in Item 5. Operating and Financial Review and Prospects of this annual report, respectively. For more
information, refer to Note 8 to our audited consolidated financial statements for the year ended December 31, 2014 included under Item 18. Financial Statements of this annual report.

Competitive Strengths

Leading
Market Positions

In our Telecommunications segment, we are the largest cable operator in the Province of Québec
and the third largest in Canada, in each case based on the number of cable customers. We believe that our strong market position has enabled us to launch and deploy new products and services more effectively. For example, since the introduction of
our cable Internet access service, we estimate that we have become the largest provider of such service in the areas we serve. Our extensive proprietary and third-party retail distribution network of stores and points of sale, including both the Le
SuperClub Vidéotron stores and our Videotron branded stores and kiosks, assist us in marketing and distributing our



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advanced telecommunications services, such as cable Internet access, digital television and cable and mobile telephony, on a large scale basis. Sun Media operates Le Journal de
Montréal and Le Journal de Québec, both of which are ranked first in their market based on paid weekly readership of non-national newspapers data published by the NADbank® Study. Through TVA Group, we are the largest private-sector broadcaster of French-language entertainment,
information and public affairs programs in North America in terms of market share.

Diverse Media Platform

Our diverse media platform allows us to extend our market reach and cross-promote our brands, programs and other content. In addition, it
allows us to provide advertisers with an integrated solution for local, regional and national multi-platform advertising. We can leverage our content, management, sales and marketing and production resources to provide superior information and
entertainment services to our customers.

Differentiated Bundled Services

Through our technologically advanced fixed and mobile network, we offer a differentiated, bundled suite of entertainment, information and
communication services and products, including digital television, cable Internet access, video-on-demand and other interactive television services, as well as residential and commercial cable telephony services using VoIP technology, and mobile
telephony services. In addition, we deliver high-quality services and products, including, for example, our standard cable Internet access service that enables our customers to download data at a higher speed than currently offered by standard
digital subscriber line or DSL technology. We also offer the widest range of French-language programming in Canada including content from our illico-on-Demand service available on our illico Digital TV, illico.tv, illico.tv tablet app (for Android
and iPad) and illico mobile platforms. Customers can interrupt and resume programming at will on any of these four illico platforms.

Advanced Broadband Network

We are able to leverage our advanced broadband network, substantially all of which is bi-directional, to offer a wide range of advanced services on the same media, such as digital television,
video-on-demand, cable Internet access and cable telephony services. We are committed to maintaining and upgrading our network capacity and, to that end, we currently anticipate that ongoing capital expenditures will be required to accommodate the
evolution of our products and services and to meet the demand for increased capacity.

Focused and Highly Reliable Network Cluster

Our single hybrid fibre coaxial clustered network covers approximately 79% of the Province of Québecs
total addressable market and nine of the provinces top ten urban areas. We believe that our single cluster and network architecture provides many benefits, including a higher quality and more reliable network, the ability to launch and deploy
new products and services such as illico TV new generation, and a lower cost structure through reduced maintenance and technical support costs.

Strong, Market-Focused Management Team

We have a strong, market-focused management team that has extensive experience and expertise in a range of areas, including marketing, finance, technology, telecommunications, media, sports and
entertainement. Under the leadership of our senior management team, we have, among other things, improved penetration of our HSIA offering, our VoIP telephony services, our cable products and our mobile telephony services, including through the
successful build-out and launch of our mobile telephony network.

Our Strategy

Our objective is to increase our revenues and profitability by leveraging the convergence and growth opportunities presented by our
portfolio of leading media assets. We attribute our strong historical results and positive outlook for growth and profitability to an ability to develop and execute forward-looking business strategies. The key elements of our strategy include:



| |  |  | Leverage growth opportunities and convergence of content, platforms and operations. We are the largest private sector French-language
programming broadcaster in North America, a leading producer of
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | French-language programming, the leading newspaper publisher in the Province of Québec for daily paid and unpaid newspapers and a leading French-language Internet news and information
portal in Canada. As a result, we are able to generate and distribute content across a spectrum of media properties and platforms. In addition, these multi-platform media assets enable us to provide advertisers with integrated advertising solutions.
We are able to provide flexible, bundled advertising packages that allow advertisers to reach local, regional and national markets, as well as special interest and specific demographic groups. We continue to explore and implement initiatives to
leverage growth and convergence opportunities, including efforts to accelerate the migration of content generated by our various publications and television channels to our other media platforms, the sharing of editorial content between our Media
segment and QMI Agency, the acquisition and subsequent sharing of content between our various businesses through QMI Content, the development of a strong live event-oriented segment through the new Québec City Arena, the acquisition of our
two QMJHL hockey franchises, the NHL Broadcasting Agreement and the related broadcast of hockey games on our TVA Sports channels as well as our efforts to obtain a National Hockey League franchise for Québec City, and the integration
of advertising assets with the creation of our sales services through QMI Sales, aimed at developing global, integrated and multi-platform advertising and marketing solutions.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Build on our position as a telecommunications leader with our mobile telephony network. We provide an offering of advanced mobile
telecommunications services to consumers and small and medium businesses that are based on effective, reliable technology, diverse and convergent content and unambiguous business policies. Our new LTE Network is the cornerstone of a corporate
business strategy geared toward harnessing all of our creative resources and providing consumers with access to technology, services and information.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Introduce new and enhanced products and services. We expect a significant portion of the revenue growth in our Telecommunications segment to be
driven by the introduction of new products and services (such as Wideband Internet technology and products and services leveraging our new mobile network) and by the continuing penetration of our existing suite of products and services such as
digital cable services, cable Internet access, cable and mobile telephony services, as well as high-definition television, video-on-demand, subscription video-on-demand (SvOD) and interactive television content of our digital television, Internet
and mobile platforms. We believe that the continued penetration rate of our digital television, cable Internet access, telephony and mobile voice and data services will result in increased ARPU, and we are focusing sales and marketing efforts on the
bundling of these value-added products and services.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Cross-promote brands, programs and other content. The geographic overlap of our telecommunications, broadcasting, newspaper and magazine
publishing, music and video store chains, and Internet platforms enables us to cost effectively promote and co-brand media properties. We will continue to promote initiatives to advance these cross-promotional activities, including the
cross-promotion of various businesses, cross-divisional advertising and shared infrastructures.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Leverage geographic clustering. Our Videotron subsidiary holds cable licenses that cover approximately 79% of the Province of
Québecs estimated 3.5 million residential and commercial premises. Geographic clusters facilitate bundled service offerings and, in addition, allow us to tailor our offerings to certain demographic markets. We aim to leverage the
highly clustered nature of our systems to enable us to use marketing dollars more efficiently and to enhance customer awareness, increase use of products and services and build brand loyalty.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Maximize customer satisfaction and build customer loyalty. Across our media platform, we believe that maintaining a high level of customer
satisfaction is critical to future growth and profitability. An important factor in our historical growth and profitability has been our ability to attract and satisfy customers with high quality products and services. We will continue our efforts
to maximize customer satisfaction and build customer loyalty.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Manage expenses through success driven capital spending and technology improvements. In our Telecommunications segment, we support the growth in
our customer base and bandwidth requirements through strategic success driven modernizations of our network and increases in network capacity. In our Media segment, we have undertaken restructurings of certain printing facilities and news production
operations, and invested in certain technology improvements with a view to modernizing our operations and improving our cost structure. In addition, we continuously seek to manage our salaries and benefits expenses, which comprise a significant
portion of our costs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Diversification of Revenues. In our Media segment, we believe that diversifying our revenue streams, which are heavily dependent on the
advertising carried by our over-the-air television network, is critical to future growth and profitability and we will thus continue to explore investments in businesses that are expected to diversify our revenue streams as a growth strategy.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Telecommunications

Through Videotron we are the largest cable operator in the Province of Québec and the third largest in Canada, in each case based on the number of cable customers, as well as an Internet service
provider and a provider of cable and mobile telephony services in the Province of Québec. Our cable network covers approximately 79% of the Province of Québecs approximately 3.5 million residential and commercial
premises. The deployment of our LTE network and our enhanced offering of mobile communication services for residential and business customers allow us to consolidate our position as a provider of integrated telecommunication services.

Videotron Business Solutions is a premier full-service telecommunications provider serving small-, medium- and large-sized businesses, as
well as telecommunications carriers. In recent years, we have significantly grown our customer base and have become an important player in the business telecommunication segment in the Province of Québec. Products and services include
Internet, television, telephony, mobile services, and business solutions products such as hosting, private network connectivity, WIFI, audio and video transmission. Through 4Degrees Colocation, we operate a data centre in Québec City which is
one of the few data centres in the Province of Québec to be Tier III certified by the Uptime Institute, an international standard that recognizes maximum reliability and operational sustainability.

We own a 100% voting and 100% equity interest in Videotron.

We are also engaged in retail and rental of DVDs, Blu-ray discs and console games through our Le SuperClub Videotron subsidiary and its franchise network.

The retail sector also includes Archambault Group, one of the largest chains of music and book stores in the Province of Québec
with 15 retail locations, consisting of 14 Archambault megastores and one Paragraph bookstore. Archambault Group also offers a variety of games, toys and other gift ideas.

Products and Services

Videotron currently offers its customers
cable services, mobile telephony services and business telecommunications services.

Cable Services

i. Advanced Cable-Based Products and Services

Our cables large bandwidth is a key factor in the successful delivery of advanced products and services. Several emerging technologies and increasing Internet usage by our customers have presented
us with significant opportunities to expand our sources of revenue. We currently offer a variety of advanced products and services, including cable Internet (Hybrid Fibre) access, digital television, residential telephony and selected interactive
services. In 2012, we launched illico TV new generation, offering a new interface with entirely redesigned ergonomics for fluid, intuitive navigation, as well as additional value-added features. As of December 31, 2014, 65.8% of our digital
customers were using illico TV new generation. In 2014, we introduced on the market the very latest in technology: illico X8. This high-tech PVR has a processor 4 times more powerful than the previous generation, thus allowing the customers to
program up to eight simultaneous recordings and keep up to 230 hours of HD recording. We intend to continue to develop and deploy additional value-added services to further broaden our service offering.



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| |  |  | Cable Internet Access. Leveraging our advanced cable infrastructure, we offer cable Internet access to our customers primarily via cable modems.
We provide this service at download speeds of up to 60 Mbps and in nearly half of the network up to 200 Mbps. As of December 31, 2014, we had 1,537,532 cable Internet access customers, representing 86.3% of our basic customers and 55.4% of our
total homes passed. Based on internal estimates, we are the largest provider of Internet access services in the areas we serve with an estimated market share of 54.4% as of December 31, 2014.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Digital Television. We have installed headend equipment through an hybrid optical fibre and coax network capable of delivering digitally encoded
transmissions to a two-way digital set-top box in the customers home and premises. This digital connection provides significant advantages. In particular, it increases channel capacity, which allows us to increase both programming and service
offerings while providing increased flexibility in packaging our services and a high definition quality. All of our television packages include 52 basic television channels, audio services providing digital-quality music, 21 FM radio channels and an
interactive programming guide. Our extended digital television offering allows customers to customize their choices with the ability to choose between custom or pre-assembled packages with a selection of more than 300 additional channels, including
U.S. super-stations and other special entertainment programs. This also offers customers significant programming flexibility including the option of French-language only, English-language only or a combination of French- and English-language
programming, as well as many foreign-language channels. As of December 31, 2014, we had 1,561,692 customers for our digital television service, representing 87.6% of our total basic customers and 56.2% of our total homes passed.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Cable Telephony. We offer cable telephony service using VoIP technology. We offer discounts to our customers who subscribe to more than one of
our services. As of December 31, 2014, we had 1,349,010 subscribers to our cable telephony service, representing a penetration rate of 75.7% of our basic cable subscribers and 48.6% of our homes passed.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Video-On-Demand. Video-on-demand service enables digital cable customers to rent content from a library of movies, documentaries and other
programming through their digital set-top box, computer, tablet or mobile phone respectively through illico Digital TV, illico.tv, our illico tablet app and illico mobile. Our digital cable customers are able to rent their video-on-demand selections
for a period of up to 24 hours, which they are then able to watch at their convenience with full stop, rewind, fast forward, pause and replay functionality during their rental period. In addition, customers can now resume viewing on-demand
programming that was paused on either the television, illico.tv, the illico tablet app, or illico mobile. Moreover, we also launched a new application for iPad in 2014. This application features a customizable, intuitive interface that brings up
selections of content based on the customers individual settings and enhances the experience by suggesting personalized themed content. This iPad application smartly and swiftly highlights any content available from the entire illico catalog,
including video-on-demand titles, live television broadcasts or recorded shows, and allows the customer to transfer it directly and seamlessly from their iPad to their television. We sometimes group movies, events or TV programs available on
video-on-demand and offer them, when available, for a period of seven days. We also offer a substantial amount of video-on-demand content free of charge to our digital cable customers, comprised predominantly of previously aired television programs
and youth-oriented programming. In March of 2013, we introduced Club illico (formerly Club Unlimited), a flat-fee plan offering a rich and varied selection of unlimited, on-demand content (movies, television shows, childrens shows,
documentaries, comedy performances and concerts). Club illico began in late 2013 co-producing television series and offering them in their first broadcast window, prior to their linear broadcast. On December 31, 2014, the Club illico service
had already reached 177,700 subscribers. In addition, we offer pay television channels on a subscription basis that permits our customers to access and watch most of the movies available on the linear pay TV channels these customers subscribe to.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Pay-Per-View (Indigo). Indigo is a group of pay-per-view channels that allows our digital customers to order live events and movies based
on a pre-determined schedule.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ii. Traditional Cable Television Services

Customers subscribing to our traditional analog basic and analog extended basic services generally receive a
line-up of 42 channels of television programming, depending on the bandwidth capacity of their local cable system. We are no longer offering this service to new customers.

As of December 31, 2014, we had 220,550 customers for our analog television service, representing 12.4% of our total basic customers.

Mobile Services

On September 9, 2010, we launched our High Speed Packet Access (HSPA) mobile communication network (3G) which was upgraded to HSPA+ (4G), on June 30, 2011.

Under an arrangement with Industry Canada, Videotron offers fixed wireless Internet access in selected rural areas of the Province of
Québec. Powered by our HSPA+ network, this service allows thousands of households and businesses that had no access to high speed cable Internet to benefit from a reliable and professionally installed high speed Internet. As a result, we
extended our residential and business Internet footprint to dozens of previously underserved municipalities across the Province of Québec.

In 2013, Videotron signed a 20-year agreement with Rogers for the cooperation and collaboration in the build-out and operation of a shared LTE network to bring LTE to even more customers in the Province
of Québec and the Ottawa region. In September 2014, Videotron launched its shared LTE wireless network, with Rogers. This shared network delivers an optimal user experience for consumers and businesses and yields the expected capital and
operating savings, allowing Videotron to reinvest in its customers and networks. Videotron maintains its business independence throughout this agreement, including its product and service portfolios, billing systems and customer data.

In April 2014, Videotron added Apples mobile devices, including the iPhone, to its extensive line-up of mobile hardware, thus
enabling Videotron to reach a significantly untapped segment of its addressable market, in particular the young mobile users. Subsequently, Videotron launched new illico applications for iPhone (4, 5C, 5S, 6) and iPad.

In the 700 MHz auction held in 2014, Videotron acquired a package of seven spectrum licenses consisting of a single paired 5+5 MHz
spectrum block in the upper 700 MHz band over a geographic territory which encompasses the provinces of Québec, Ontario (excluding the region of Northern Ontario), Alberta and British Columbia, for a total covered population of more than
28 million. The 700 MHz band presents certain superior propagation characteristics and benefits from well-developed LTE equipment and device ecosystems in North America. Ownership of the licenses acquired during the auction held in 2014
enhances Videotrons ability to maintain a leading edge, high capacity wireless network in Québec and in the Ottawa region, and provides Videotron with a number of options to maximize the value of its investment in the rest of Ontario,
Alberta and British Columbia. As of December 31, 2014, most households and businesses on our cable footprint had access to our advanced mobile services. As of December 31, 2014, there were 632,766 lines activated on our mobile network, representing
a year-over-year increase of 128,452 lines (25.5%).

In the Industry Canada auction for AWS-3 commercial mobile spectrum held
on March 3, 2015, Videotron acquired four 30 MHz licenses for Eastern Québec, Southern Québec, Northern Québec and Eastern Ontario / Outaouais, covering 100% of Québecs population and that of the Ottawa region.
This spectrum, which supports LTE technology, will further enhance Videotrons ability to maintain a leading-edge, high-capacity wireless network in Québec and in the Ottawa region.

Business Telecommunications Services

Videotron Business Solutions is a premier telecommunications service provider, offering reliable and state-of-the-art mobile telephony, Internet, cable telephony, data and cable television solutions to
all business segments: small and medium-sized companies, large corporations and other telecommunications carriers. Through 4Degrees Colocation, we operate a data centre in Québec City which is one of the few data centres in the Province of
Québec to be Tier III certified by the Uptime Institute, an international standard that recognizes maximum reliability and operational sustainability.



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Videotron serves customers with dedicated sales and customer service teams with solid
expertise in business services. Videotron Business Solutions relies on its extensive coaxial, fiber optic and LTE wireless networks to provide the best possible customized solutions to all of its customers.

Customer Statistics Summary

The following table summarizes our customer statistics for our suit of advanced products and services:



|                         |  |                    |           |  |      |  |           |      |  |  |           |  |  |      |           |  |  |  |           | 
|------------------------ |  | ------------------ | --------- |  | ---- |  | --------- | ---- |  |  | --------- |  |  | ---- | --------- |  |  |  | --------- | 
|                         |  | As of December 31, |          
|                         |  | 2014               |           |  | 2013 |  |           | 2012 |  |  | 2011      |  |  | 2010 |          
|Homes passed(1)          |  |                    | 2,777,264 |  |      |  | 2,742,476 |      |  |  | 2,701,242 |  |  |      | 2,657,315 |  |  |  | 2,612,406 | 
|Cable Television         |  |                    |           |  |      |  |           |      |  |  |           |  |  |      |           |  |  |  |           | 
|Basic customers(2)       |  |                    | 1,782,242 |  |      |  | 1,825,081 |      |  |  | 1,854,981 |  |  |      | 1,861,477 |  |  |  | 1,811,570 | 
|Penetration(3)           |  |                    | 64.2%     |  |      |  | 66.5%     |      |  |  | 68.7%     |  |  |      | 70.1%     |  |  |  | 69.3%     | 
|Digital customers        |  |                    | 1,561,692 |  |      |  | 1,531,361 |      |  |  | 1,484,589 |  |  |      | 1,400,814 |  |  |  | 1,219,599 | 
|Penetration(4)           |  |                    | 87.6%     |  |      |  | 83.9%     |      |  |  | 80.0%     |  |  |      | 75.3%     |  |  |  | 67.3%     | 
|Cable Internet           |  |                    |           |  |      |  |           |      |  |  |           |  |  |      |           |  |  |  |           | 
|Cable Internet customers |  |                    | 1,537,532 |  |      |  | 1,505,992 |      |  |  | 1,443,992 |  |  |      | 1,359,600 |  |  |  | 1,268,083 | 
|Penetration(3)           |  |                    | 55.4%     |  |      |  | 54.9%     |      |  |  | 53.5%     |  |  |      | 51.2%     |  |  |  | 48.5%     | 
|Telephony Services       |  |                    |           |  |      |  |           |      |  |  |           |  |  |      |           |  |  |  |           | 
|Cable telephony lines    |  |                    | 1,349,010 |  |      |  | 1,348,520 |      |  |  | 1,316,327 |  |  |      | 1,245,893 |  |  |  | 1,145,063 | 
|Penetration(3)           |  |                    | 48.6%     |  |      |  | 49.2%     |      |  |  | 48.7%     |  |  |      | 46.9%     |  |  |  | 43.8%     | 
|Mobile telephony lines   |  |                    | 632,766   |  |      |  | 504,314   |      |  |  | 403,804   |  |  |      | 290,742   |  |  |  | 136,111   | 



|(1) | Homes passed means the number of residential premises, such as single dwelling units or multiple dwelling units, and commercial premises passed by our cable television
distribution network in a given cable system service area in which the programming services are offered.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Basic customers are customers who receive basic cable service in either the analog or digital mode.
|--- | ---------------------------------------------------------------------------------------------------

|(3) | Represents customers as a percentage of total homes passed.
|--- | -----------------------------------------------------------

|(4) | Represents customers for the digital service as a percentage of basic customers.
|--- | --------------------------------------------------------------------------------

Industry Overview

Cable Television Industry

Industry Data

Cable television has been available in Canada for more than 50 years and is a well-developed market. As of August 31, 2013, the most recent date for which
data is available, there were approximately 8.8 million cable television customers in Canada. For the twelve months ended August 31, 2013 (the most recent data available), total industry revenue was estimated to be over $12.3 billion
and is expected to grow in the future based on the fact that Canadian cable operators have aggressively upgraded their networks and broadened their offerings of products and services. The following table summarizes the most recent available annual
key statistics for the Canadian cable television industry.



|                         |  |                                                             |      |  |      |   |      |      |  |   |      |  |  |      |      |  |         |   |     |  |  |  |     |  
|------------------------ |  | ----------------------------------------------------------- | ---- |  | ---- | - | ---- | ---- |  | - | ---- |  |  | ---- | ---- |  | ------- | - | --- |  |  |  | --- | -
|                         |  | Twelve Months Ended August 31,                              |     
|                         |  | 2013                                                        |      |  | 2012 |   |      | 2011 |  |   | 2010 |  |  | 2009 |      |  | CAGR(1) |  
|                         |  | (Dollars in billions and basic cable customers in millions) |     
|Canada                   |  |                                                             |      |  |      |   |      |      |  |   |      |  |  |      |      |  |         |   |     |  |  |  |     |  
|Industry Revenue(2)      |  | $                                                           | 12.3 |  |      | $ | 11.5 |      |  | $ | 10.9 |  |  | $    | 10.1 |  |         | $ | 9.2 |  |  |  | 6.0 | %
|Basic Cable Customers(2) |  |                                                             | 8.8  |  |      |   | 8.7  |      |  |   | 8.5  |  |  |      | 8.3  |  |         |   | 8.1 |  |  |  | 1.7 | %



Source
of Canadian data: CRTC.



|(1) | Compounded Canadian annual growth rate from 2009 through 2013.
|--- | --------------------------------------------------------------

|(2) | Including IPTV.
|--- | ---------------



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Mobile Telephony Industry

In terms of wireless penetration rate (i.e., the number of active SIM cards and/or connected lines versus total population, expressed as a
percentage), the Canadian mobile telephony market is relatively under-developed. As of December 31, 2013 (the most recent data available), the Province of Québec had a penetration rate under the Canadian average (66.6% vs. 79.1%
according to the CRTC). As of September 30, 2014, incumbents were still dominant in the industry in Canada, with market share of approximately 91% in the Province of Québec, according to the CRTC.

With an increasing number of regional operators competing on price, coverage, handset offers and technological reliability, the Canadian
wireless industry is highly competitive. With the deployment of advanced wireless networks throughout the country and the increasing penetration rate among younger customers, the demand for technologically advanced bandwidth-hungry devices
(smartphones, tablets, etc.) is increasing rapidly. As of September 30, 2014, there were more than 28.5 million subscribers in Canada.

Pricing of our Products and Services

Our revenues are derived from
the monthly fees our customers pay for cable television, Internet and telephony and mobile services. The rates we charge vary based on the market served and the level of service selected. Rates are usually adjusted annually. We also offer discounts
to our customers who subscribe to more than one of our services, when compared to the sum of the prices of the individual services provided to these customers. As of December 31, 2014, the average monthly invoice on recurring subscription fees
per residential customer was $109.22 (representing a 6% year-over-year increase) and approximately 81% of our customers were bundling two services or more. A one-time installation fee, which may be waived in part during certain promotional periods,
is charged to new customers. In 2014, we introduced the possibility for customers to get the complete optimization of their Wi-Fi signal, including the installation of up to two Wi-Fi optimizers, if necessary. Monthly fees for rented equipment, such
as set-top boxes or Wi-Fi routers, are also charged to customers.

Although our service offerings vary by market, because of
differences in the bandwidth capacity of the cable systems in each of our markets and other factors, our services are typically offered at monthly price ranges, which reflect discounts for bundled service offerings.

Our Network Technology

Cable

As of December 31, 2014, our cable system consisted of
32,930 km of fibre-optic cable and 45,992 km of coaxial cable, covering approximately 2.8 million homes and serving approximately 2.2 million customers. Our network is the largest broadband network in the Province of Québec covering
approximately 79% of households and, according to our estimates, more than 77% of the businesses located in the major metropolitan areas of the Province of Québec. Our extensive network supports direct connectivity with networks in Ontario,
the Maritimes and the United States.

Our cable television networks are comprised of four distinct parts including signal
acquisition networks, main headends, distribution networks and subscriber drops. The signal acquisition network picks up a wide variety of television, radio and multimedia signals. These signals and services originate from either a local source or
content provider or are picked up from distant sites chosen for satellite or over-the-air reception quality and transmitted to the main headends by way of fibre-optic relay systems. Each main headend processes, modulates, scrambles and combines the
signals in order to distribute them throughout the network. Each main headend is connected to the primary headend in order to receive the digital MPEG2 signals and the IP backbone for the Internet services. The first stage of this distribution
consists of a fibre-optic link which distributes the signals to distribution or secondary headends. After that, the signal uses the hybrid fibre coaxial cable network made of wide-band optical nodes, amplifiers and coaxial cables capable of serving
up to 30 km in radius from the distribution or secondary headends to the subscriber drops. The subscriber drop brings the signal into the customers television set directly or, depending on the area or the services selected, through various
types of customer equipment including set-top boxes and cable modems.

We have adopted the hybrid fibre coaxial
(HFC) network architecture as the standard for our ongoing system upgrades. HFC network architecture combines the use of both fibre-optic and coaxial cables. Fibre-optic cable has good



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broadband frequency characteristics, noise immunity and physical durability and can carry hundreds of video and data channels over extended distances. Coaxial cable is less expensive and requires
greater signal amplification in order to obtain the desired transmission levels for delivering channels. In most systems, we deliver our signals via fibre-optic cable from the headend to a group of optical nodes and then via coax to the homes passed
served by the nodes. Traditionally, our system design provided for cells of approximately 500 homes each to be served by fibre-optic cable. To allow for this configuration, secondary headends were put into operation in the Greater Montréal
Area, in the Greater Québec City Area and in the Greater Gatineau City Area. Remote secondary headends must also be connected with fibre-optic links. From the secondary headends to the homes, the customer services are provided through the
transmission of a radiofrequency (RF) signal which contains both downstream and upstream information (two-way). The loop structure of the two-way HFC networks brings reliability through redundancy, the cell size improves
flexibility and capacity, while the reduced number of amplifiers separating the home from the headend improves signal quality and reliability. The HFC network design provided us with significant flexibility to offer customized programming to
individual cells of approximately 500 homes, which is critical to our advanced services, such as video-on-demand, Switched Digital Video Broadcast and the continued expansion of our interactive services. Starting in 2008, we began an extensive
network modernization effort in the Greater Montréal Area in order to meet the ever expanding service needs of the customer in terms of video, telephony and Internet services. This ongoing modernization implies an extension of the upper
limit of the RF spectrum available for service offerings and a deep fibre deployment, which significantly extends the fibre portion in the HFC network (thereby reducing the coax portion). Additional optical nodes were systematically deployed to
increase the segmentation of customer cells, both for upstream and downstream traffic. This modernization initiative results in (i) a network architecture where the segmentation for the upstream traffic is for 125 homes while that for the
downstream traffic is set to 250 (which can evolve to 125 homes), and (ii) the availability of a 1 GHz spectrum for service offerings. The robustness of the network is greatly enhanced (much less active equipment in the network such as RF
amplifiers for the coax portion), the service offering potential and customization to the customer base is significantly improved (through the extension of the spectrum to 1 GHz and the increased segmentation) and allows much greater speeds of
transmission for Internet services which are presently unrivalled. The overall architecture employs Division Wavelength Multiplexing (DWM), which allows us to limit the amount of fibre required, while providing an effective
customization potential. As such, in addition to the broadcast information, up to 24 wavelengths can be combined on a transport fibre from the secondary headend to a 3,000 home aggregation point. Each of these wavelengths is dedicated to the
specific requirements of 125 homes. The RF spectrum is set with analog content (to be phased out eventually) and digital information using quadrature amplitude modulation. MPEG video compression techniques and the Data over Cable Service Interface
Specification (DOCSIS) protocol allow us to provide a great service offering of standard definition and high definition video, as well as complete voice and Internet services. This modernization project gives us flexibility to
meet customer needs and future network evolution requirements. The modernization of the Greater Montréal Area network is scheduled to be completed by 2020.

Our strategy of maintaining a leadership position in respect of the suite of products and services that we offer and launching new products and services requires investments in our network to support
growth in our customer base and increases in bandwidth requirements. Approximately 99.85% of our network in the Province of Québec has been upgraded to a bandwidth of 750 MHz or greater. Also, in light of the greater availability of HDTV
programming, the ever increasing speed of Internet access and increasing demand for our cable telephony service, further investment in our network will be required.

Mobile Telephony

As of December 31, 2014, our shared network
reached approximately 90% of the population of the Province of Québec and the Greater Ottawa Area, allowing the vast majority of our potential clients to have access to the latest mobile services. The vast majority of our towers and
transmission equipment being linked through our fibre-optic network using a multiple label switching  or MPLS  protocol, our network is designed to support important customer growth in coming years as well as rapidly evolving
mobile technologies.

Our strategy in the coming years is to build on our position as a telecommunication leader with our LTE
mobile services and to keep the technology at the cutting edge as it continues to evolve rapidly and new market standards such as LTE-Advanced (LTE A) are being commercialized. The Rogers LTE Agreement provides and allows Rogers
and Videotron to continue the evolution of the shared network. Videotrons spectrum contribution, as well as that of Rogers, will allow them to continue to exploit LTE technologies and to provide their subscribers with high throughput data
connections.



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During 2014, Videotron maintained its HSPA+ network throughout the Province of Québec
and over the Greater Ottawa Area.

Marketing and Customer Care

Our long term marketing objective is to increase our cash flow through deeper market penetration of our services, development of new
services and revenue and operating margin growth per customer. We believe that customers will come to view their cable connection as the best distribution channel to their home for a multitude of services. To achieve this objective, we are pursuing
the following strategies:



| |  |  | develop attractive bundle offers to encourage our customers to subscribe to two or more products, which increases average revenue per user  or
ARPU  customer retention and operating margins;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | continue to rapidly deploy advanced products on all our services  cable, Internet, telephony, content and mobile  to maintain and increase
our leadership and offer competitive mobile rate plans and products to gain additional market share;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | design product offers that provide greater opportunities for customer entertainment and information;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | develop targeted marketing programs to attract former customers and households that have never subscribed to certain of our services and customers of
alternative or competitive services as well as target specific market segments;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | enhance the relationship between customer service representatives and our customers by training and motivating customer service representatives to
promote advanced products and services;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | leverage the retail presence of Le SuperClub Vidéotron, our Videotron-branded stores and kiosks, Archambault stores and third-party commercial
retailers;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintain and promote our leadership in content and entertainment by leveraging the wide variety of services offered within the Quebecor Media group to
our existing and future customers;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | introduce new value added packages of products and services, which we believe will increase ARPU and improve customer retention; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | leverage our business market, using our network and expertise with our commercial customer base, to offer additional bundled services to our customers.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

We continue to invest time, effort and financial resources in marketing new and existing services. To
increase both customer penetration and the number of services used by our customers, we use integrated marketing techniques, including door-to-door solicitation, telemarketing, drive-to-store, media advertising, e-marketing and direct mail
solicitation. Those initiatives are also strongly supported by business intelligence tools such as predictive churn models.

Maximizing customer satisfaction is a key element of our business strategy. In support of our commitment to customer satisfaction, we are
now offering the service of dedicated, knowledgeable and well-trained technical experts which we call our PROS, the primary mission of which is to support our customers by helping them get the most out of what Videotron has to offer.
Through personalized demonstration sessions, the PROS provide customers with continued customer service after subscription has been made. We continue to provide a 24-hour customer service hotline seven days a week across most of our systems, in
addition to our web-based customer service capabilities. All of our customer service representatives and technical support staff are trained to assist customers with all of our products and services, which in turn allows our customers to be served
more efficiently and seamlessly. Our customer care representatives continue to receive extensive training to perfect their product knowledge and skills, which contributes to retention of customers and higher levels of customer service. We utilize
surveys, focus groups and other research tools to assist us in our marketing efforts and anticipate customer needs. To increase customer loyalty, we are also starting to leverage strategic partnerships to offer exclusive promotions, privileges and
contests which contribute in expanding our value proposition to our customers.



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Programming

We believe that offering a wide variety of conveniently scheduled programming is an important factor in influencing a customers decision to subscribe to and retain our cable services. We devote
resources to obtaining access to a wide range of programming that we believe will appeal to both existing and potential customers. We rely on extensive market research, customer demographics and local programming preferences to determine our channel
and package offerings. The CRTC currently regulates the distribution of foreign content in Canada and, as a result, we are limited in our ability to provide such programming to our customers. We obtain basic and premium programming from a number of
suppliers, including all major Canadian media groups.

Our programming contracts generally provide for a fixed term of up to
five years, and are subject to negotiated renewal. Programming tends to be made available to us for a flat fee per customer. Our overall programming costs have increased in recent years and may continue to increase due to factors including, but not
limited to, additional programming being provided to customers as a result of system rebuilds that increase channel capacity, increased costs to produce or purchase specialty programming, inflationary or negotiated annual increases, the
concentration of broadcasters following recent acquisitions in the market and the significant increased costs of sports content rights.

Competition

We
operate in a competitive business environment in the areas of price, product and service offerings and service reliability. We compete with other providers of television signals and other sources of home entertainment. Due to ongoing technological
developments, the distinctions among traditional platforms (broadcasting, Internet, and telecommunications) are fading rapidly. The Internet as well as mobile devices are becoming important broadcasting and distribution platforms. In addition,
mobile operators, with the development of their respective mobile networks, are now offering wireless and fixed wireless Internet services and our VoIP telephony service is also competing with Internet-based solutions.



| |  |  | Providers of Other Entertainment. Cable systems face competition from alternative methods of distributing and receiving television signals and
from other sources of entertainment such as live sporting events, movie theatres and home video products, including digital recorders, OTT content providers, such as Netflix and Apple TV, DVD players and video games. The extent to which a cable
television service is competitive depends in significant part upon the cable systems ability to provide a greater variety of programming, superior technical performance and superior customer service than are available through competitive
alternative delivery sources. Our introduction of Club illico, a flat-fee plan offering a rich and varied selection of unlimited, on-demand content, aims to reduce the effect of competition from alternative delivery sources.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | DSL.The deployment of digital subscriber line technology (DSL) provides customers with Internet access at data transmission
speeds greater than that available over conventional telephone lines. DSL service provides access speeds that are comparable to low-to-medium speeds of cable-modem Internet access but that decreases with the distance between the DSL modem and the
line card.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | FTTN and FTTH.Fibre to the neighborhood (FTTN) technology addresses the distance limitation by bringing the fibre closer to
the end user. The last mile is provided by the DSL technology. Fibre to the home (FTTH) brings the fibre up to the end user location. The speed is then limited by the end equipment rather than the medium (fibre) itself. It
provides speeds comparable to high speeds of cable-modem Internet access. Because of the cost involved with FTTH and FTTN, deployment of these technologies is progressive. The main competition for cable-modem Internet access comes from a provider of
DSL and Fibre to the x (FTTx) services.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Internet Video Streaming. The continuous technology improvement of the Internet, combined with higher download speeds, contributes to the
emergence of alternative technologies such as IPTV digital content (movies, television shows and other video programming) offered on various Internet streaming platforms. While having a positive impact on the demand for our Internet services, this
model could adversely impact the demand for our cable television services.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | VDSL. VDSL technology increases the available capacity of DSL lines, thereby allowing the distribution of digital video. Multi-system operators
are now facing competition from ILECs, which have been granted licenses to launch video distribution services using this technology, which operates over copper phone lines. The transmission capabilities of VDSL will be significantly boosted with the
deployment of technologies such as vectoring (the reduction or elimination of the effects of far-end crosstalk) and twisted pair bonding (use of additional twisted pairs to increase data carriage capacity). Certain ILECs have already started
replacing many of their main feeds with fibre-optic cable and positioning VDSL transceivers, a VDSL gateway, in larger multiple-dwelling units, in order to overcome the initial distance limitations of VDSL. With this added capacity, along with the
evolution of compression technology, VDSL-2 will offer significant opportunities for services and increase its competitive threat against other multi-system operators.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Direct Broadcast Satellite. DBS is also a competitor to cable systems. DBS delivers programming via signals sent directly to receiving dishes
from medium and high-powered satellites, as opposed to cable delivery transmissions. This form of distribution generally provides more channels than some of our television systems and is fully digital. DBS service can be received virtually anywhere
in Canada through the installation of a small rooftop or side-mounted antenna. Like digital cable distribution, DBS systems use video compression technology to increase channel capacity and digital technology
to improve the quality of the signals transmitted to their customers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Mobile Telephony Services. With our mobile network, we compete against a mix of participants, some of them being active in some or all the
products we offer, while others only offer mobile telephony services in our market. The Canadian incumbents have deployed their LTE networks and this technology is deemed to become an industry standard. Videotron launched its LTE network on
September 10, 2014.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Private Cable. Additional competition is posed by satellite master antenna television systems known as SMATV systems serving multi
dwelling units, such as condominiums, apartment complexes, and private residential communities.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Wireless Distribution. Cable television systems also compete with wireless program distribution services such as MMDS. This technology uses
microwave links to transmit signals from multiple transmission sites to line-of-sight antennas located within the customers premises.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Grey and Black Market Providers. Cable and other distributors of television signals continue to face competition from the use of access codes
and equipment that enable the unauthorized decoding of encrypted satellite signals, from unauthorized access to our analog and digital cable signals (black market) and from the reception of foreign signals through subscriptions to foreign satellite
television providers that are not lawful distributors in Canada (grey market).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Telephony Service. Our cable telephony service competes against other telephony service providers, including the incumbent telephone service
provider in most of the Province of Québec, which used to control a significant portion of the telephony market in the Province of Québec, VoIP telephony service providers and mobile telephony service providers.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other Internet Service Providers. In the Internet access business, cable operators compete against other Internet service providers offering
residential and commercial Internet access services. The CRTC requires the large Canadian incumbent cable operators to offer access to their high-speed Internet network to competitive Internet service providers at mandated rates.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Retail Sector

Archambault Group is one of the largest chains of music and book stores in the Province of Québec with 15 retail locations, consisting of 14 Archambault megastores and one Paragraph
bookstore. Archambault Group also offers a variety of games, toys and other gift ideas. Archambault Groups products are also distributed through its website archambault.ca. Archambault Group also operates music and books downloading
services with per-item fees.



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Through Le SuperClub Vidéotron, we are the franchisor of the largest chain of video
and video game rental stores in the Province of Québec and among the largest of such chains in Canada. We had a total of 157 retail locations as of December 31, 2014. With the majority of these retail locations also offering
our suite of telecommunication services and products, Le SuperClub Vidéotron is both a showcase and a valuable and cost-effective distribution network for Videotrons growing array of advanced products and services, such as cable
Internet access, digital television and cable and mobile telephony.

Media

On July 31, 2014, we announced the creation of Media Group, a new segment dedicated to entertainment and news media which includes
the operations of TVA Group, Sun Media, QMI Agency, Quebecor Media Out-of-Home, QMI Sales, Quebecor Media Network, Quebecor Media Printing, Sogides Group Inc. and CEC Publishing. The Media Group has activities in broadcasting, magazine publishing,
book distribution and publishing, newspaper publishing and other media related operations.

Quebecor Media owns 100% of the
voting and equity interests of Sun Media, Quebecor Media Printing, CEC Publishing and Sogides Group. Quebecor Media also owns 68.37% of the equity interest and controls 99.97% of the voting power in TVA Group.

Broadcasting

Through TVA Group, we operate the largest French-language private television network in North America. TVA Group is the sole
owner of six of the ten television stations composing Réseau TVA (TVA Network) and a portfolio of specialty channels, namely LCN, TVA Sports, TVA Sports II, TVA Sports III, addikTV, Argent, Prise 2,
Yoopa, CASA and MOI&cie. TVA Group also holds interests in two other TVA Network affiliates and the Évasion specialty channel. TVA Groups TVA Accès Inc. subsidiary is engaged in commercial production and
its TVA Films division is engaged in the distribution of films and television programs.

According to data published by
Numeris (which is based on a measurement methodology using audiometry), we had a 31.9% market share of French-speaking viewers in the Province of Québec for the period from January 1, 2014 through November 30, 2014 and, according to
the Canadian TVB Report for the period from December 31, 2013 through November 30, 2014, our share of the Province of Québecs French-language broadcast television advertising market was 40.1%.

For the period from January 1, 2014 through December 31, 2014, we aired 17 of the 30 most popular TV programs in the Province
of Québec, including La Voix and LÉté indien. In addition, for the same period in 2013, the TVA Network had also 17 of the top 30 French-language prime time television shows in the Province of Québec,
according to Numeris data. Since May 1999, the TVA Network, which consists of ten stations, has been included in the basic channel line-up of most cable and satellite providers across Canada, enabling us to reach a significant portion of the
French-speaking population of Canada outside the Province of Québec.

Until February 13, 2015, the Media segment
also operated the English-language news and opinion specialty channel Sun News, which discontinued its operations on that date. The Media segments operating results presented in this report include Sun News financial data.

The Studios, Equipment and Post-Production Business includes soundstage and equipment leasing services, post-production services,
expertise in visual effects services and proprietary online transaction and distribution platforms for video-on-demand and digital cinema (DCI) and, in addition, property rights on technologies being used for digital image restoration and for 2D
conversion into 3D stereoscopic images. Our Studios, Equipment and Post-Production Businesss software, GeneSys, uses advanced algorithms for 2D to 3D contents conversion for the large screen and television.

As part of its assets, the Studios, Equipment and Post-Production Business includes movie and television studios of approximately 225,000
square feet in Montréal and St-Hubert, Québec, which have cutting-edge equipment, including Canadas largest and most up-to-date pool of cameras, lighting and specialized equipment.

Canadian Television Industry Overview

Canada has a well-developed television market that provides viewers with a range of viewing alternatives. The television market has been affected by audience fragmentation across the various content
delivery platforms, including the Internet and video-on-demand, as well as the arrival of a large number of specialized services.



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There are three main French-language broadcast networks in the Province of Québec:
Société Radio-Canada, V and TVA Network. In addition to French-language programming, there are three English-language national broadcast networks in the Province of Québec: the Global Television Network, CTV and the
Canadian Broadcasting Corporation, known as CBC. Global Television Network, V and CTV are privately held and are commercial networks. CBC and Société Radio-Canada are government owned and financed by a combination of federal government
grants and advertising revenue. French-language viewers in the Province of Québec also have access to certain U.S. networks. In the area of speciatly television broadcasting in the Province of Québec, our main competitors are Bell
Media, CBC and Corus.

The following table sets forth the market share of French speaking viewers in the Province of
Québec as of December 31, 2014:



|                                                      |  |                                       |      |  
|----------------------------------------------------- |  | ------------------------------------- | ---- | -
|Network                                               |  | Share of Provinceof Québec Television |     
|TVA Network                                           |  |                                       | 22.7 | %
|Société Radio-Canada                                  |  |                                       | 13.0 | %
|V                                                     |  |                                       | 7.9  | %
|TVA Groups French-language specialty TV              |  |                                       | 9.2  | %
|Various French-language specialty and pay cable TV(1) |  |                                       | 39.2 | %
|Others                                                |  |                                       | 8.0  | %



Source:
Numeris for the period between January 1, 2014 and December 31, 2014.



|(1) | Bell Media (19.3%), Corus (7.3%), Société Radio-Canada (4.7%) and others (7.9%).
|--- | --------------------------------------------------------------------------------

Television Broadcast Network

Our French-language network of ten stations, which consists of six owned and four affiliated stations, is available to a significant portion of the French speaking population in Canada.

Our owned and operated stations include: CFTM-TV in Montréal, CFCM-TV in Québec City, CHLT-TV in Sherbrooke, CHEM-TV in
Trois-Rivières, CFER-TV in Rimouski Matane-Sept-Iles and CJPM-TV in Saguenay/Lac-St-Jean. Our four affiliated stations are CFEM-TV in Rouyn, CHOT-TV in Gatineau, CHAU-TV in Carleton and CIMT-TV in Rivière-du-Loup. We own a 45% interest
of the latter two. A substantial portion of our networks broadcast schedule is originated from our main station in Montréal. Our signal is transmitted from transmission and retransmission sites authorized by Industry Canada and licensed
by the CRTC and is also retransmitted by satellite elsewhere in Canada as a distant signal by various modes of authorized distribution: cable, direct-to-home satellite distribution and MMDS.

TVA Groups website is accessible at groupetva.ca.

Television Specialty Broadcasting

Through various subsidiaries, we
control or participate in the following 11 specialty services: LCN, a French-language all news service, TVA Sports, TVA Sports II and TVA Sports III, French-language specialty television services devoted to sports, Évasion, a
French-language travel and tourism service, Argent, a French-language economic, business and personal finance news service, addikTV, a national French-language specialty television service dedicated to the presentation of popular
Canadian and American movies and television series, Prise 2, a French-language specialty television service devoted to the Province of Québec and American television classics, MOI&cie, a French-language specialty television
service dedicated to style, beauty and the well-being of Québec women, CASA, a French-language specialty television service devoted to real estate, renovation, decoration and cooking, YOOPA, a French-language specialty
television service aimed exclusively at preschoolers. Each of TVA Groups specialty channels has its own dedicated website.

Until February 13, 2015, the Media segment also operated the English-language news and opinion specialty channel Sun News, which discontinued its operations on that date. The Media segments
operating results presented in this annual report include Sun News financial data.



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|                                       |  |          |  |                
|-------------------------------------- |  | -------- |  | ---------------
|Type of Service                        |  | Language |  | Voting Interest
|Category A Digital Specialty Services: |  |          |  |                
|       addikTV                        |  | French   |  | 100.0%         
|       Argent (LCNAffaires)          |  | French   |  | 100.0%         
|       Évasion                        |  | French   |  | 8.3%           
|Category B Digital Specialty Services: |  |          |  |                
|       Prise 2                        |  | French   |  | 100.0%         
|       CASA                           |  | French   |  | 100.0%         
|       YOOPA                          |  | French   |  | 100.0%         
|       MOI&cie                        |  | French   |  | 100.0%         
|Category C Digital Specialty Services: |  |          |  |                
|       LCN  Le Canal Nouvelles       |  | French   |  | 100.0%         
|       TVA Sports                     |  | French   |  | 100.0%         
|       TVA Sports II                  |  | French   |  | 100.0%         
|       TVA Sports III                 |  | French   |  | 100.0%         

Advertising Sales and Revenue

We derive a majority of our revenues from the sale of air-time to national, regional and local advertisers. For the twelve-month period
ended December 31, 2014, we derived approximately 72% of our advertising revenues from national advertisers and 28% from regional and local advertisers.

Programming

We produce a variety of French-language programming,
including a broad selection of entertainment, news and public affairs programming. We actively promote our programming and seek to develop viewer loyalty by offering a consistent programming schedule.

A part of our programming is produced by our wholly-owned subsidiary, TVA Productions Inc. Through TVA Productions Inc. (and its
affiliate TVA Productions II inc.), we produced approximately 1,500 hours of original programming in 2014, consisting primarily of morning and general interest shows, reality shows, variety shows and quiz shows.

The remainder of our programming is comprised of foreign and Canadian independently produced programming.

Magazine Publishing

TVA Publications Inc. (TVA Publications) and Les Publications Charron & Cie Inc. (Publications Charron) publish more than 50 French-language magazines in
various fields such as arts, entertainment, television, fashion and decoration. They also market digital products associated with the different magazine brands. Together, TVA Publications and Publications Charron magazines hold 54% of cumulative
monthly Québec French-language readership, according to data compiled by the PMB (Print Measurement Bureau - Fall 2014). TVA Publications is the leading magazine publisher in the Province of Québec and our objective is to
leverage its focus on entertainment across our television and Internet programming.

In addition, subject to and upon closing
of the Transcontinental Transaction, TVA Group will add to its portfolio the 11 following titles: Coup de pouce, Canadian Living, Véro Magazine, Décormag, Style at Home, Fleurs Plantes Jardins, Canadian
Gardening, Québec Vert, The Hockey News, MaisonNeuves.com, Condo Maison Direct, along with therecettes.qc.ca, Quoi manger, and On the Table websites. The Corporation will also hold an effective 51% share in
Les Publications Transcontinental-Hearst Inc., publisher of Elle Canada and Elle Québec magazines, in partnership with Hearst Group, which holds a 49% share. As well, TVA Group and Bayard Group will each hold a 50% share in
Publications Senior Inc., publisher of Le Bel Âge and Good Times magazines. The Transcontinental Transaction was authorized by the Competition Bureau on March 2, 2015. The closing of this transaction is expected to take place
within a few weeks of such authorization.



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Book Distribution and Publishing

We are also involved in book publishing and distribution through academic publisher CEC Publishing Inc. (CEC Publishing), 18
general literature publishers under the Groupe Sogides Inc. (Sogides Group) umbrella, and Messageries A.D.P. Inc. (Messageries ADP). Through Sogides Group and the academic publisher CEC Publishing, we are involved in
French-language book publishing and we form one of the Province of Québecs largest book publishing groups. In 2014, we published or reissued a total of 675 titles in paper format and 427 titles in digital format.

Through Messageries ADP, our book distribution company, we are the exclusive distributor for 195 Québec and European
French-language publishers. We distribute French-language books to approximately 3,300 retail outlets in Canada. In addition, Messageries ADP distributes approximately 14,500 digital books.

Newspaper Publishing

As of December 31, 2014, our Media
segment published 35 paid-circulation dailies, three free commuter dailies and 140 community weekly newspapers, magazines, buyers guides, farm publications and other specialty publications. Our publications have an established presence on the
Internet and offer classified and local advertising, as well as other services for local advertisers and readers.

On
October 6, 2014, Quebecor Media announced that it had entered into the Postmedia Transaction. The Postmedia Transaction is subject to approval by regulatory authorities, specifically the Competition Bureau. While the Postmedia Transaction is
under review and pending the approval from the regulatory authorities, Quebecor Media will continue publishing the 175 newspapers and publications sold as part of the Postmedia Transaction, including the Sun chain of dailies, namely the Ottawa Sun,
Toronto Sun, Winnipeg Sun, Edmonton Sun and Calgary Sun, as well as The London Free Press, the 24 Hours dailies in Toronto and Vancouver, and community dailies and weeklies, buyers guides and specialty publications as well as the Canoe
portals English-Canadian operations and eight printing plants, including the Islington (Ontario) plant. Our French-language newspapers and publications, including Le Journal de Montréal,Le Journal de
Québec and the 24 Heures (Montréal) are not included in the Postmedia Transaction. The numbers and percentages presented in this section in connection with Sun Medias operations as of December 31, 2014 and comparative
years do not reflect the sale of the 175 newspapers and publications sold as part of the Postmedia Transaction, as the Corporation continues to operate the assets sold as part of the Postmedia Transaction until the approval from the regulatory
authorities. However, the businesses sold pursuant to the Postmedia Transaction are treated as discontinued operations in our audited consolidated financial statements for the year ended December 31, 2014 and comparative years as well as in the
managements discussion and analysis of financial condition and results of operations for such period, which are included in Item 18. Financial Statements and in Item 5. Operating and Financial Review and Prospects of
this annual report, respectively. For more information, refer to Note 8 to our audited consolidated financial statements for the year ended December 31, 2014 included under Item 18. Financial Statements of this annual report.

On June 1, 2014, we closed the TC Transaction. The numbers and percentages presented in this annual report in connection
with Sun Medias operations as of December 31, 2014 and comparative years reflect the sale of the 74 Québec weeklies pursuant to the TC Transaction. The newspapers sold pursuant to the TC Transaction are treated as discontinued
operations in our audited consolidated financial statements for the year ended December 31, 2014 and comparative years. For more information, refer to Note 8 to our audited consolidated financial statements for the year ended December 31,
2014 included under Item 18. Financial Statements of this annual report.

Canadian Newspaper Publishing
Industry Overview

Newspaper publishing is the oldest segment of the advertising based media industry in Canada. The
industry is mature and is dominated by a small number of major newspaper publishers largely segmented in different markets and geographic areas. As of December 31, 2014, our newspapers publishing activities combined average weekly circulation
(paid and unpaid) was approximately 9.1 million copies, according to internal statistics. In addition, according to the Newspapers Canada Circulation Data, Sun Medias 28.7% market share of weekly average circulation for Canadian daily
paid newspapers makes our newspaper publishing operations the largest newspaper publisher in Canada in terms of weekly average circulation.



41



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According to the Newspapers Canada Circulation Data, there are approximately 93 paid
circulation daily newspapers, numerous paid non-daily publications and free-distribution daily and non-daily publications. Of the 93 paid circulation daily newspapers, 18 have average daily circulation in excess of 50,000 copies. These include 12
English-language metropolitan newspapers, four French-language daily newspapers and two national daily newspapers. In addition to daily newspapers, both paid and unpaid non-daily newspapers are distributed nationally and locally across Canada.
Newspaper publishers may also produce and distribute niche publications that target specific readers with customized editorial content and advertising. The newspaper market consists primarily of two segments, broadsheet and tabloid newspapers, which
vary in format. With the exception of the broadsheet the London Free Press, all of Sun Medias urban paid daily newspapers are tabloids.

Newspaper publishers derive revenue primarily from the sale of retail, classified, national and insert advertising, and to a lesser extent through paid subscriptions and single copy sales of newspapers.
The mature nature of the Canadian newspaper industry has resulted in limited growth, if any, for traditional newspaper publishers, for many years, and the newspaper industry is now undergoing fundamental changes. As a result, the newspaper industry
is facing challenges to retain its revenues and circulation/readership, as advertisers and readers become increasingly fragmented in the increasingly populated media landscape.

Advertising and Circulation

Advertising revenue is the largest source of revenue for our newspaper operations, representing 63.2% of our newspaper operations total revenues in 2014. Advertising rates are based upon the size of
the market in which each newspaper operates, circulation, readership, demographic composition of the market and the availability of alternative advertising media. Our strategy is to maximize advertising revenue by providing advertisers with a range
of pricing and marketing alternatives to better enable them to reach their target audience. Our newspapers offer a variety of advertising alternatives, including full-run advertisements in regular sections of the newspaper targeted to different
readers (including automotive, real estate and travel), geographically targeted inserts, special interest pullout sections and advertising supplements.

The principal categories of advertising revenues in our newspaper operations are retail and national advertising. Most of our retail advertisers are department stores, electronics stores and furniture
stores. National advertising is display advertising primarily from advertisers promoting products or services on a national basis, and sold through our national sales force.

In the smaller community papers, substantially all of the advertising revenues are derived from local retailers and classified advertisers.

Circulation sales are our newspaper operations second-largest source of revenue and represented 20.4% of total revenues of our
newspaper operations in 2014. In the large urban markets, our paid daily newspapers are available through newspaper boxes and retail outlets Monday through Sunday, except the London Free Press, which does not publish a Sunday edition. We
offer daily home delivery in each of our newspaper markets. We derive our circulation revenues from single copy sales and subscription sales.

Digital revenues represented 4.2% of total revenues for our newspaper operations in 2014. Digital revenues are generated from advertising on our websites, digital subscriptions to the e-editions of our
newspapers and more recently through paywalls launched in our urban daily newspaper websites. Through our newspaper operations, we operate over 150 websites, which include publication websites to complement each of its urban and community paid daily
newspaper publications. Revenues from digital products represent a potential growth opportunity for our newspaper operations.

Throughout 2014, Sun Media announced and implemented restructuring initiatives, including head count reductions to further streamline and
optimize the segments operations to focus on its core competencies.

Newspaper Operations

We operate our newspaper business through our Sun Media subsidiary in urban and community markets principally through two groups of
products:



| |  |  | the Urban Daily Group; and
| | - |  | --------------------------



| |  |  | the Community Newspaper Group.
| | - |  | ------------------------------



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A majority of Sun Medias newspapers in the Community Newspaper Group are clustered
around our eight paid urban dailies in the Urban Daily Group. Sun Media has strategically established its community newspapers near regional printing facilities in suburban and rural markets across Canada. This geographic clustering enables us to
realize operating efficiencies and economic synergies through sharing of management, production, printing, and distribution functions.

The Urban Daily Group

Sun Medias Urban Daily Group is
comprised of eight paid daily newspapers, three free daily commuter publications and one free weekly publication.

We are
number one in the Province of Québec for daily paid and unpaid newspapers with a weekly circulation of 3.8 million newspapers.

Paid daily newspapers

Sun Medias paid daily newspapers are published
seven days a week and are all tabloids with the exception of the broadsheet the London Free Press which is also not published on Sundays. These are mass circulation newspapers that provide succinct and complete news coverage with an emphasis
on local news, sports and entertainment. The tabloid format makes extensive use of color, photographs and graphics. Each newspaper contains inserts that feature subjects of interest such as fashion, lifestyle and special sections.

For the year 2014, on a combined weekly basis, the eight paid daily newspapers in Sun Medias Urban Daily Group had a circulation of
approximately 4.1 million copies, according to internal statistics. These newspapers hold either the number one or number two position among non-national paid dailies in each of their respective markets in terms of weekly readership.

Paid circulation is defined as average sales of a newspaper per issue. Readership (as opposed to paid
circulation) is an estimate of the number of people who read or looked into an average issue of a newspaper and is measured by an independent survey conducted by NADbank® Inc. According to the 2013
NADbank® study (the
NADbank® Study), the most recent available survey, readership estimates are based upon the number of people responding to the Newspaper Audience
Databank survey circulated by NADbank® Inc. who report having read or looked into one or more issues of a given
newspaper during a given period equal to the publication interval of the newspaper.

The following table
lists Sun Medias paid daily newspapers and their respective readership in 2013 as well as their market position versus other paid daily newspapers by weekly readership during that period, based on information provided in the NADbank® Study:



|                         |  |                         |           |  |                                 |  |           |         |  |  |           |  |  |  |     | 
|------------------------ |  | ----------------------- | --------- |  | ------------------------------- |  | --------- | ------- |  |  | --------- |  |  |  | --- | 
|                         |  | 2013 AVERAGE READERSHIP |           |  | MARKET POSITIONBY READERSHIP(1) | 
|NEWSPAPER                |  | SATURDAY                |           |  | SUNDAY                          |  |           | MON-FRI |  | 
|Le Journal de Montréal   |  |                         | 601,700   |  |                                 |  | 389,100   |         |  |  | 566,500   |  |  |  | 1st | 
|Le Journal de Québec     |  |                         | 176,500   |  |                                 |  | 127,600   |         |  |  | 176,800   |  |  |  | 1st | 
|Toronto Sun              |  |                         | 414,600   |  |                                 |  | 452,000   |         |  |  | 451,100   |  |  |  | 2nd | 
|London Free Press        |  |                         | 143,500   |  |                                 |  | n/a       |         |  |  | 135,500   |  |  |  | 1st | 
|Ottawa Sun               |  |                         | 90,900    |  |                                 |  | 77,500    |         |  |  | 92,900    |  |  |  | 2nd | 
|Winnipeg Sun             |  |                         | 79,200    |  |                                 |  | 63,000    |         |  |  | 95,500    |  |  |  | 2nd | 
|Edmonton Sun             |  |                         | 115,700   |  |                                 |  | 135,700   |         |  |  | 131,100   |  |  |  | 2nd | 
|Calgary Sun              |  |                         | 134,700   |  |                                 |  | 136,600   |         |  |  | 122,900   |  |  |  | 2nd | 
|                         |  |                         |           |  |                                 |  |           |         |  |  |           |  |  |  |     | 
|Total Average Readership |  |                         | 1,756,800 |  |                                 |  | 1,381,500 |         |  |  | 1,772,300 |  |  |  |     | 
|                         |  |                         |           |  |                                 |  |           |         |  |  |           |  |  |  |     | 



|(1) | Based on paid weekly readership of non-national newspapers data published by the NADbank® Study.
|--- | ------------------------------------------------------------------------------------------------



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The following table lists Sun Medias paid daily newspapers and their respective
average daily paid circulation in 2014:



|                               |  |                               |         |  |        |  |         |         |  |  |         | 
|------------------------------ |  | ----------------------------- | ------- |  | ------ |  | ------- | ------- |  |  | ------- | 
|                               |  | 2014 AVERAGE PAID CIRCULATION |        
|NEWSPAPER                      |  | SATURDAY                      |         |  | SUNDAY |  |         | MON-FRI | 
|Le Journal de Montréal         |  |                               | 212,900 |  |        |  | 199,100 |         |  |  | 201,500 | 
|Le Journal de Québec           |  |                               | 104,900 |  |        |  | 96,800  |         |  |  | 97,300  | 
|Toronto Sun                    |  |                               | 110,500 |  |        |  | 139,900 |         |  |  | 120,200 | 
|London Free Press              |  |                               | 71,800  |  |        |  | n/a     |         |  |  | 67,700  | 
|Ottawa Sun                     |  |                               | 28,600  |  |        |  | 30,000  |         |  |  | 33,100  | 
|Winnipeg Sun                   |  |                               | 17,500  |  |        |  | 18,500  |         |  |  | 16,700  | 
|Edmonton Sun                   |  |                               | 32,800  |  |        |  | 44,600  |         |  |  | 34,800  | 
|Calgary Sun                    |  |                               | 38,300  |  |        |  | 48,600  |         |  |  | 36,400  | 
|                               |  |                               |         |  |        |  |         |         |  |  |         | 
|Total Average Paid Circulation |  |                               | 617,300 |  |        |  | 577,500 |         |  |  | 607,700 | 
|                               |  |                               |         |  |        |  |         |         |  |  |         | 



Source:
Internal Statistics

Le Journal de Montréal.Le Journal de Montréal is published seven days
a week and is distributed by Quebecor Media Network Inc. The main competitors of Le Journal de Montréal are La Presse and The Montréal Gazette. Its website is accessible at www.journaldemontreal.com.

Le Journal de Québec.Le Journal de Québec is published seven days a week and is
distributed by Quebecor Media Network. The main competitor of Le Journal de Québecis Le Soleil. Its website is accessible at www.lejournaldequebec.com.

Toronto Sun.The Toronto Sun is published seven days a week throughout the greater metropolitan Toronto area. The
main competitors of the Toronto Sun are the Toronto Star, the Globe & Mail and the National Post. As a tabloid newspaper, the Toronto Sun has a unique format compared to these broadsheet competitors. Its website
is accessible at www.torontosun.com.

London Free Press. The London Free Press, one of
Canadas oldest daily newspapers, emphasizes national and local news, sports and entertainment and is distributed throughout the London area. It is the only local daily paid newspaper in its market and is published six days a week, Monday
through Saturday. Its website is accessible at www.lfpress.com.

Ottawa Sun.The Ottawa Sun is
published seven days a week and is distributed throughout the Ottawa region. It competes daily with the English-language broadsheet, the Ottawa Citizen, and also with the French-language paper, Le Droit. Its website is accessible at
www.ottawasun.com.

Winnipeg Sun.The Winnipeg Sun is published seven days a week and serves the
metropolitan Winnipeg area. The Winnipeg Sun competes with the Winnipeg Free Press. Its website is accessible at www.winnipegsun.com.

Edmonton Sun.The Edmonton Sun is published seven days a week and is distributed throughout Edmonton. The Edmonton Sun competes with Edmontons broadsheet daily, the
Edmonton Journal. Its website is accessible at www.edmontonsun.com.

Calgary Sun.The
Calgary Sun is published seven days a week and is distributed throughout Calgary. The Calgary Sun competes with Calgarys broadsheet daily, the Calgary Herald. Its website is accessible at www.calgarysun.com.

Free daily newspapers

Sun Media publishes free daily commuter publications in three urban markets: Toronto, Montréal and Vancouver. The editorial content of these free daily commuter publications concentrates on the
greater metropolitan area of each of these cities, respectively.



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The following table reflects the average weekday circulation of our free daily commuter
publications for 2014:



|                                 |  |                               |         | 
|-------------------------------- |  | ----------------------------- | ------- | 
|                                 |  | 2014 Average DailyCirculation |        
|FREE DAILY COMMUTER PUBLICATIONS |  | Mon-Fri                       |        
|24 Hours  Toronto               |  |                               | 187,100 | 
|24 Heures  Montréal             |  |                               | 137,200 | 
|24 Hours  Vancouver             |  |                               | 112,600 | 
|                                 |  |                               |         | 
|Total Average Daily Circulation  |  |                               | 436,900 | 
|                                 |  |                               |         | 



Source:
Internal Statistics

Competition

The newspaper industry is seeing secular changes, including the growing availability of free access to media, shifting readership habits, digital transferability, the advent of real-time information and
secular changes in the advertising market, all of which affect the nature of competition in the newspaper industry. Competition increasingly comes not only from other newspapers (including other national, metropolitan (both paid and free) and
suburban newspapers), magazines and more traditional media platforms, such as broadcasters, cable systems and networks, satellite television and radio, direct marketing and solo and shared mail programs, but also from digital media technologies,
which have introduced a wide variety of media distribution platforms (including, most significantly, the Internet, digital readers (e-readers) and distribution over wireless devices) to consumers and advertisers.

We believe that the high cost associated with starting a major daily newspaper operation represents a barrier to entry to potential new
competitors of Sun Medias Urban Daily Group.

The Community Newspaper Group

Sun Medias Community Newspaper Group consists of 27 paid daily community newspapers and, 140 community weekly newspapers, shopping
guides, agricultural and other specialty publications. The total average weekly circulation of the publications in Sun Medias Community Newspaper Group for the year ended December 31, 2014 was approximately 1.6 million free copies
and approximately 1.2 million paid copies, according to internal statistics. Our community newspaper publications offer news, sports and special features, with an emphasis on local information.

The table below sets forth the average daily paid circulation and geographic location of the daily newspapers published by Sun
Medias Community Newspaper Group for the year ended December 31, 2014:



|                             |  |                          |  |                               |        | 
|---------------------------- |  | ------------------------ |  | ----------------------------- | ------ | 
|NEWSPAPER (1)                |  | LOCATION                 |  | AVERAGE DAILY PAIDCIRCULATION |       
|The Kingston Whig-Standard   |  | Kingston, Ontario        |  |                               | 16,700 | 
|The Standard                 |  | St. Catherines, Ontario  |  |                               | 13,900 | 
|The Expositor                |  | Brantford, Ontario       |  |                               | 12,800 | 
|The Peterborough Examiner    |  | Peterborough, Ontario    |  |                               | 10,100 | 
|The Sun Times                |  | Owen Sound, Ontario      |  |                               | 10,000 | 
|The Sault Star               |  | Sault Ste Marie, Ontario |  |                               | 9,900  | 
|The Sudbury Star             |  | Sudbury, Ontario         |  |                               | 9,400  | 
|The Observer                 |  | Sarnia, Ontario          |  |                               | 9,300  | 
|North Bay Nugget             |  | North Bay, Ontario       |  |                               | 8,400  | 
|Niagara Falls Review         |  | Niagara Falls, Ontario   |  |                               | 8,200  | 
|Cornwall Standard Freeholder |  | Cornwall, Ontario        |  |                               | 7,600  | 
|The Tribune                  |  | Welland, Ontario         |  |                               | 7,600  | 
|The Intelligencer            |  | Belleville, Ontario      |  |                               | 7,100  | 
|The Recorder & Times         |  | Brockville, Ontario      |  |                               | 6,000  | 
|Beacon Herald                |  | Stratford, Ontario       |  |                               | 6,000  | 
|The Chatham Daily News       |  | Chatham, Ontario         |  |                               | 5,500  | 
|The Daily Press              |  | Timmins, Ontario         |  |                               | 4,800  | 
|Packet & Times               |  | Orillia, Ontario         |  |                               | 3,800  | 
|The Barrie Examiner          |  | Barrie, Ontario          |  |                               | 3,700  | 



45



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|                                     |  |                         |  |                                |         | 
|------------------------------------ |  | ----------------------- |  | ------------------------------ | ------- | 
|NEWSPAPER (1)                        |  | LOCATION                |  | AVERAGE DAILY 
PAIDCIRCULATION |        
|Simcoe Reformer                      |  | Simcoe, Ontario         |  |                                | 3,600   | 
|Daily Herald Tribune                 |  | Grande Prairie, Alberta |  |                                | 3,400   | 
|Sentinel Review                      |  | Woodstock, Ontario      |  |                                | 3,200   | 
|The Daily Observer                   |  | Pembroke, Ontario       |  |                                | 3,000   | 
|St. Thomas Times-Journal             |  | St. Thomas, Ontario     |  |                                | 3,000   | 
|Northumberland Today                 |  | Northumberland, Ontario |  |                                | 2,800   | 
|Kenora Daily Miner & News            |  | Kenora, Ontario         |  |                                | 1,500   | 
|Fort McMurray Today                  |  | Fort McMurray, Alberta  |  |                                | 1,400   | 
|                                     |  |                         |  |                                |         | 
|Total Average Daily Paid Circulation |  |                         |  |                                | 182,700 | 



Source:
Internal Statistics



|(1) | The listed newspapers are published at least five days per week, except for the Kenora Daily Miner & News which is published four days per week.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------

As at December 31, 2014, our community newspaper operations included 115 publications, in Ontario and 38
in Alberta.

Competition

Our community publications are generally located in small towns and are typically the only daily or weekly newspapers of general circulation published in their respective communities, although some face
competition from daily or weekly publications published in nearby locations and circulated in the markets where we publish our daily or weekly publications.

Internet/Portals

The Canoe Network includes
information and service sites for the general public. As such, it is one of the most popular Internet destinations in Canada, in both the English and French speaking markets, and a key vehicle for Internet users and advertisers alike. Advertising
revenues constitute a large portion of the Canoe Networks annual revenues.

Media Properties

The Media segment, excluding TVA Group and its subsidiaries, operates the following portals and destination sites:



| |  |  | Canoe Network (canoe.ca), a bilingual portal which logs over 10.3 million unique visitors per month in Canada, including more than
5.5 million in the Province of Québec (according to ComScore Media Metrix figures for December 2014);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sun Media dedicated websites for its corresponding weekly and daily newspapers (such as www.torontosun.com, www.edmontonsun.com,
www.journaldequebec.com and www.journalde montreal.com), which provide local and national news; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Canoe.tv, the first Canadian web broadcaster with unique content commissioned by Canoe.tv in addition to video content from traditional
sources including Quebecor Media, the Sun Media network of newspapers and various external partners.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

E-commerce Properties

The following e-commerce properties are included under the Canoe Network umbrella:



| |  |  | Autonet.ca, one of Canadas leading Internet sites devoted entirely to automobiles;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | Our local classified sites attached to our large urban newspaper brands;
| | - |  | ------------------------------------------------------------------------



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| |  |  | YourLifeMoments.ca, Sun Medias premier site for announcing, celebrating, sharing all of lifes special moments; and
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | Micasa.ca, one of the leading real-estate listing sites in the Province of Québec, providing comprehensive property listing services
available to all real estate brokers as well as individual homeowners.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Distribution Network

Quebecor Media Network distributes dailies, weeklies, magazines and print media and reaches approximately 225,000
households and 12,375 retail outlets through its operations in the Province of Québec.

Commercial Printing

Sun Medias owns printing facilities, including eight printing facilities for its urban and community
publications which are located in five provinces. Through our wholly-owned subsidiary Quebecor Media Printing, we operate two printing facilities located in Islington, Ontario, and Mirabel, Québec. The 24 Hours in Toronto, the
Toronto Sun and a number of Ontario community publications are printed in Islington, Ontario. Le Journal de Montréal, the Ottawa Sunand the 24 Heures (Montréal) are printed in Mirabel, Québec.
Eight of our printing facilities, including the Islington (Ontario) facility, are in the process of being sold as part of the Postmedia Transaction.

We also offer third party commercial printing services, which provides us with an additional revenue source that leverages existing equipment with excess capacity. In our third party commercial printing
operations, we compete with other newspaper publishing companies as well as with commercial printers. Our competitive strengths in this area include our modern equipment, our status in some of our markets as the only local provider of commercial
printing services and our ability to price projects on a variable cost basis, as our core newspaper business covers overhead expenses.

Seasonality and Cyclicality

Canadian newspaper publishing companies
operating results tend to follow a recurring seasonal pattern with higher advertising revenue in the spring and in the fall. Accordingly, the second and fourth fiscal quarters are typically our strongest quarters, with the fourth quarter generally
being the strongest. Due to the seasonal retail decline and generally poor weather, the first quarter has historically been our weakest quarter.

Our newspaper business is cyclical in nature. Our operating results are sensitive to prevailing local, regional and national economic conditions because of our dependence on advertising sales for a
substantial portion of our revenue. Expenditures by advertisers tend to be cyclical reflecting overall economic conditions, as well as budgeting and buying patterns and priorities. In addition, a substantial portion of our advertising revenue is
derived from retail and automotive advertisers, who have historically been sensitive to general economic cycles, and our operating results have in the past been materially adversely affected by extended downturns in the Canadian retail and
automotive sectors. Similarly, since a substantial portion of our advertising revenue is derived from local advertisers, our operating results in individual markets could be adversely affected by local or regional economic downturns.

Raw Materials

Newsprint, which is the basic raw material used to publish newspapers, has historically been and may continue to be subject to significant price volatility. Changes in the price of newsprint could
significantly affect our earnings, and volatile or increased newsprint costs have had, and may in the future have, a material adverse effect on our results of operations and our financial condition. We manage the effects of newsprint price increases
through a combination of, among other things, waste management, technology improvements, web width reduction, inventory management, and by controlling the mix of editorial versus advertising content.

In order to obtain more favourable pricing, we source substantially all of our newsprint from a single newsprint producer (our
Newsprint Supplier). Pursuant to the terms of our agreement with our Newsprint Supplier, we obtain newsprint at a discount to market prices, receive additional volume rebates for purchases above certain thresholds, and benefit
from a ceiling on the unit cost of newsprint.

Other Operations

We are involved in out-of-home-advertising through the installation, maintenance and management of out-of-home advertisement, including on
transit and bus shelters. In relation thereto, we entered into a 10-year agreement with Société de transport de Lévis, a 20-year agreement with Société de transport de Laval, and a 20-year agreement with
Société de transport de Montréal(STM). Also, through QMI Agency, we provide content to external customers as well as to certain of our subsidiaries and divisions and, through QMI Sales, we offer integrated, diversified and
complete advertising services to our clients.



47



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Sports and Entertainment

Our activities in the Sports and Entertainment segment consist primarily of show distribution, sporting and cultural events management, music production, distribution and streaming, the operation of two
QMJHL teams and the operation and management of the future Québec City Arena.

Quebec City Arena

The construction of the Québec City Arena has begun in September 2012 and is scheduled to be completed in July
2015, with a currently expected public opening in September 2015. The Québec City Arena will have approximately 18,400 seats and will host the Remparts de Québec as well as a variety of events and shows by local and
international artists. Through a 25-year agreement entered into with Québec City, we will have usage and naming rights for the Québec City Arena until 2040. In anticipation of the opening of the Québec City Arena, we have
entered into a strategic partnership for the operation of the Québec City Arena with Live Nation Entertainment, including two of its main divisions, namely Live Nation Concerts, the global market leader in concert production, and the
Ticketmaster ticketing service, which operates in the Province of Québec under the name Admission. We have also entered into a strategic partnership with Levy Restaurants, with an emphasis on building a world class
culinary experience in the Québec City Arena through a local food and beverage program.

QMJHL Hockey Teams

We own two QMJHL franchises, namely LArmada de Blainville-Boisbriand and the Remparts de
Québec. As part of transaction relating to the acquisition of the Remparts de Québec, we also obtained rights to organize a womens professional tennis tournament (namely, the Coupe Banque
Nationale) as well as the 2015 Memorial Cup, which will be hosted by the Remparts de Québec.

Events Production and Management

Through Gestev, a sports and cultural events manager, we produce numerous high-profile events such as the Red Bull Crashed Ice extreme race, the Vélirium (International Mountain Bike Festival and
World Cup), the Transat Québec Saint-Malo sailing race, Sprint Québec (FIS Cross-Country World Cup), and the Snowboard Jamboree (including the FIS Snowboard World Championships).

Music Distribution

Through certain divisions and subsidiaries of Archambault Group, we distribute CDs, DVDs, Blu-ray discs, online music by way of file transfer and we offer services in the following areas: music streaming,
music recording, video production, recording of live concerts, production of live-event video shows, television advertising, music shows and concerts.

Archambault Group is one of the largest independent music distributors in Canada with 21% of the Province of Québec market and 54% of the Province of Québec French market. Archambault Group
has a catalogue of over 7,800 different CDs, LPs or other audio formats and over 1,500 DVDs, VHS or other video formats, a large number of which are from French-speaking artists. In addition, Archambault Group is a digital aggregator of downloadable
products with a selection of approximately 101,000 songs available through 196 retailers worldwide.

We own 100% of the issued
and outstanding capital stock of Gestev, Québecor Sports et Divertissements Inc., (which owns the Remparts de Québec) and Archambault Group.



48



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Intellectual Property

We use a number of trademarks for our products and services. Many of these trademarks are registered by us in the appropriate jurisdictions. In addition, we have legal rights in the unregistered marks
arising from their use. We have taken affirmative legal steps to protect our trademarks and we believe our trademarks are adequately protected.

Television programming and motion pictures are granted legal protection under the copyright laws of the countries in which we operate, and there are substantial civil and criminal sanctions for
unauthorized duplication and exhibition. The content of our newspapers and websites is similarly protected by copyright. We own copyright in each of our publications as a whole, and in all individual content items created by our employees in the
course of their employment, subject to very limited exceptions. We have entered into licensing agreements with wire services, freelancers and other content suppliers on terms that we believe are sufficient to meet the needs of our publishing
operations. We believe we have taken appropriate and reasonable measures to secure, protect and maintain our rights or obtain agreements from licensees to secure, protect and maintain copyright protection of content produced or distributed by us.

We have registered a number of domain names under which we operate websites associated with our television, publishing and
Internet operations. As every Internet domain name is unique, our domain names cannot be registered by other entities as long as our registrations are valid.

Insurance

Quebecor Media is exposed to a variety of operational risks in
the normal course of business, the most significant of which are transferred to third parties by way of insurance agreements. Quebecor Media maintains insurance coverage through third parties for property and casualty losses. Quebecor Media believes
that it has a combination of third-party insurance and self-insurance sufficient to provide adequate protection against unexpected losses, while minimizing costs.

Environment

Some of our operations are subject to Canadian, provincial and
municipal laws and regulations concerning, among other things, emissions to the air, water and sewer discharge, handling and disposal of hazardous materials, the recycling of waste, the soil remediation of contaminated sites, or otherwise relating
to the protection of the environment. Laws and regulations relating to workplace safety and worker health, which among other things, regulate employee exposure to hazardous substances in the workplace, also govern our operations.

Compliance with these laws has not had, and management does not expect it to have, a material effect upon our capital expenditures, net
income or competitive position. Environmental laws and regulations and the interpretation of such laws and regulations, however, have changed rapidly in recent years and may continue to do so in the future. We have monitored the changes closely and
have modified our practices where necessary or appropriate. For example, Québecs regulation on the recovery and reclamation of products by enterprises officially came into force on July 13, 2011. This regulation requires
certain subsidiaries of Quebecor Media, specifically Videotron, to implement a recycling program or to become member of a program from an organization accredited by Recyc-Québec. Recovery rates are stipulated for different categories of
products commercialized by companies to which this regulation applies. Starting in 2020, penalties will be imposed upon those companies that have failed to achieve the recovery targets between 2015 and 2020 as set forth in the regulation and will
vary as a function of the amount of products commercialized and the actual recovery rates of the company, with potential penalties reaching up to $600,000 annually and with fines for non compliance ranging between $5,000 and $250,000.

Our past and current properties, as well as areas surrounding those properties, particularly those in areas of long-term
industrial use, may have had historic uses, or may have current uses, in the case of surrounding properties, which may affect our properties and require further study or remedial measures. As part of our Studios, Equipment and Post-Production
Business, we own certain studios and vacant lots, some of which are located on a former landfill, with the presence of gas emitting waste.

We are not currently conducting or planning any material study or remedial measure. Furthermore, we cannot provide assurance that all environmental liabilities have been determined, that any prior owner
of our properties did not create a material environmental condition not known to us, that a material environmental condition does not otherwise exist as to any such property, or that expenditure will not be required to deal with known or unknown
contamination.



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C - Organizational Structure

The following chart illustrates the relationship among Quebecor Media and its significant operating subsidiaries and holdings as of March 20, 2015 and indicates the jurisdiction of incorporation
of each entity. In each case, unless otherwise indicated, Quebecor Media owns a 100% equity and voting interest in its subsidiaries (where applicable, the number on the top indicates the percentage of voting rights held by Quebecor Media and the
number on the bottom indicates the percentage of equity owned directly and indirectly by Quebecor Media).





LOGO

Quebecor, a communications holding company, owns 75.4% of Quebecor Media and CDP Capital, a
wholly-owned subsidiary of CDPQ, owns the other 24.6% of Quebecor Media. Quebecors primary asset is its interest in Quebecor Media. The CDPQ is one of Canadas largest pension fund managers.

D - Property, Plants and Equipment

Our corporate offices are located in leased space at 612 St-Jacques Street, Montréal, Québec, Canada H3C 4M8.

Telecommunications

Videotrons corporate offices are located in
leased space at 612 St-Jacques Street, Montréal, Québec, Canada H3C 4M8, (187,592 square feet) in the same building as Quebecor Medias head office. Videotron also owns several buildings in Montréal, the largest building of
which is located at 2155 Pie IX Street in Montréal (approximately 128,000 square



50



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feet). Videotron also owns a building located at 150 Beaubien Street in Montréal (approximately 72,000 square feet). Videotron leases approximately 52,000 square feet of office space in a
building located at 800 de la Gauchetière Street in Montréal to accommodate staffing growth. Videotron also leases approximately 54,000 square feet in a building located at 4545 Frontenac Street in Montréal and 49,000 square
feet in a building located at 888 De Maisonneuve Street in Montréal. In Québec City, Videotron owns a building of approximately 40,000 square feet located at 2200 Jean-Perrin Street where its regional headend for the Québec City
region is situated. Videotron also owns or leases a significant number of smaller locations for signal reception sites, customer service and business offices.

Media

Sun Medias corporate offices are located at 612 St-Jacques
Street, Montreal, Québec, Canada, H3C 4M8, in the same building as Quebecor Medias head office.

The
following table presents the addresses, the square footage and primary use of the main facilities and other buildings of our newspaper operations. No other single property currently used in our newspaper operations exceeds 50,000 square feet. Unless
stated otherwise, we own all of the properties listed below.



|                                          |  |                                                                                             |  |                               |         | 
|----------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | ----------------------------- | ------- | 
|Address                                   |  | Use of Property                                                                             |  | Floor Space Occupied(sq. ft.) |        
|                                          |  |                                                                                            
|Islington, Ontario
2250 Islington Avenue  |  | Operations building,
including printing plant  Toronto
Sun 24 Hours (Toronto)              |  |                               | 546,900 | 
|                                          |  |                                                                                            
|Mirabel, Québec
12800 Brault Street       |  | Operations building,
including printing plant  Le Journal de
Montréal 24 Heures (Montréal) |  |                               | 235,000 | 
|                                          |  |                                                                                            
|London, Ontario
369 York Street           |  | Operations building,
including printing plant  London Free
Press                           |  |                               | 146,900 | 
|                                          |  |                                                                                            
|Montréal, Québec
4545 Frontenac Street(2) |  | Operations building 
Le Journal de Montréal                                                |  |                               | 138,200 | 
|                                          |  |                                                                                            
|Calgary, Alberta
2615-12 Street NE        |  | Operations building,
including printing plant  Calgary
Sun                                 |  |                               | 90,000  | 
|                                          |  |                                                                                            
|Toronto, Ontario
333 King Street East     |  | Operations building 
Toronto Sun (leased until
2020)                                       |  |                               | 71,700  | 
|                                          |  |                                                                                            
|Winnipeg, Manitoba
1700 Church Avenue     |  | Operations building,
including printing plant  Winnipeg
Sun                                |  |                               | 63,000  | 
|                                          |  |                                                                                            
|Vanier, Québec
450 Bechard Avenue         |  | Operations building,
including printing plant  Le Journal de
Québec                        |  |                               | 56,900  | 
|                                          |  |                                                                                            
|Edmonton, Alberta
9300-47 Street          |  | Printing plant 
Edmonton Sun                                                               |  |                               | 50,700  | 





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The following table presents the addresses, the square footage and primary use of the main
facilities and other buildings of our television broadcasting operations. No other single property currently used in our television broadcasting operations exceeds 50,000 square feet. Unless stated otherwise, we own all of the properties listed
below.



|                                                       |  |                         |  |                               |         | 
|------------------------------------------------------ |  | ----------------------- |  | ----------------------------- | ------- | 
|Address                                                |  | Use of Property         |  | Floor Space Occupied(sq. ft.) |        
|                                                       |  |                        
|Montréal, Québec
1600 De Maisonneuve Boulevard East(1) |  | Television Broadcasting |  |                               | 650,000 | 



|(1) | Our television broadcasting operations are mainly carried out in Montréal at 1600 De Maisonneuve Boulevard East in a complex of four buildings owned by us
which represent a total of approximately 650,000 square feet. We also own buildings in Québec City, Chicoutimi, Trois-Rivières, Rimouski, and Sherbrooke for local broadcasting and lease space in Longueuil for TVA Publications.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table presents the addresses, the square footage and primary use of the main facilities and other
buildings of our Studios, Equipment and Post-Production Business. No other single property currently used in our newspaper operations exceeds 50,000 square feet.



|                                                                               |  |                   |  |                               |         | 
|------------------------------------------------------------------------------ |  | ----------------- |  | ----------------------------- | ------- | 
|Address                                                                        |  | Use of Property   |  | Floor Space Occupied(sq. ft.) |        
|                                                                               |  |                  
|Montréal, Québec
2170, Pierre-Dupuy Avenue and
1701-1777, Carrie-Derick Street |  | Production studio |  |                               | 314,000 | 
|                                                                               |  |                  
|St-Hubert, Québec
4801, Leckie Street                                          |  | Production studio |  |                               | 115,000 | 

Sports and Entertainment

We generally lease space for the business offices and warehousing activities for the operation of our Sports and Entertainment segment.

Liens and charges

Borrowings under our senior secured credit facilities
and under eligible derivative instruments are secured by a first-ranking hypothec and security agreement (subject to certain permitted encumbrances) on all of our movable property (chattels). Our subsidiaries credit facilities are generally
secured by first-ranking charges over all of their respective assets. TVA Groups credit facilities, which were previously unsecured, have been amended on November 3, 2014 and, as a result of such amendments, are now secured by charges on
its movable property and an immovable hypothec on its properties located at 1600 de Maisonneuve Boulevard East, 1405, 1425 and 1475 Alexandre-De-Sève Street, 1420 and 1470 de Champlain Street, and 1500 Papineau Avenue, Montréal,
Québec.

E - Regulation

Foreign Ownership Restrictions Applicable under the Telecommunications Act

On June 29, 2012, the Government of Canadas omnibus budget implementation bill (C-38) received Royal Assent. Included in the bill were provisions to exempt telecommunications companies with
less than 10% of total Canadian telecommunications market revenues from foreign investment restrictions under the Telecommunications Act. Companies that are successful in growing their market shares in excess of 10% of total Canadian
telecommunications market revenues other than by way of merger or acquisition will continue to be exempt from the restrictions.



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Ownership and Control of Canadian Broadcast Undertakings

The Governor in Council, through an Order-in-Council referred to as the Direction to the CRTC (Ineligibility of Non-Canadians), has
directed the CRTC not to issue, amend or renew a broadcasting license to an applicant that is a non-Canadian. Canadian, a defined term in the Direction, means, among other things, a citizen or a permanent resident of Canada, a qualified corporation,
a Canadian government, a non-share capital corporation of which a majority of the directors are appointed or designated by statute, regulation or specified governmental authorities, or a qualified mutual insurance company, qualified pension fund
society or qualified cooperative of which not less than 80% of the directors or members are Canadian. A qualified corporation is one incorporated or continued in Canada, of which the chief executive officer (or if there is no chief executive
officer, the person performing functions similar to those performed by a chief executive officer) and not less than 80% of the directors are Canadian, and not less than 80% of the issued and outstanding voting shares and not less than 80% of the
votes are beneficially owned and controlled, directly or indirectly, by Canadians. In addition to the above requirements, Canadians must beneficially own and control, directly or indirectly, not less than 66.6% of the issued and outstanding voting
shares and not less than 66.6% of the votes of the parent corporation that controls the subsidiary, and neither the parent corporation nor its directors may exercise control or influence over any programming decisions of the subsidiary if Canadians
beneficially own and control less than 80% of the issued and outstanding shares and votes of the parent corporation, if the chief executive officer of the parent corporation is a non-Canadian or if less than 80% of the parent corporations
directors are Canadian. There are no specific restrictions on the number of non-voting shares which may be owned by non-Canadians. Finally, an applicant seeking to acquire, amend or renew a broadcasting license must not otherwise be controlled in
fact by non-Canadians, a question of fact which may be determined by the CRTC in its discretion. Control is defined broadly in the Direction to mean control in any manner that results in control in fact, whether directly through the ownership of
securities or indirectly through a trust, agreement or arrangement, the ownership of a corporation or otherwise. Videotron, TVA Group and Sun Media are qualified Canadian corporations.

Regulations made under the Broadcasting Act require the prior approval of the CRTC for any transaction that directly or indirectly
results in (i) a change in effective control of the licensee of a broadcasting distribution undertaking or a television programming undertaking (such as a conventional television station, network or pay or specialty undertaking service),
(ii) a person or a person and its associates acquiring control of 30% or more of the voting interests of a licensee or of a person who has, directly or indirectly, effective control of a licensee, or (iii) a person or a person and its
associates acquiring 50% or more of the issued common shares of the licensee or of a person who has direct or indirect effective control of a licensee. In addition, if any act, agreement or transaction results in a person or a person and its
associates acquiring control of at least 20% but less than 30% of the voting interests of a licensee, or of a person who has, directly or indirectly, effective control of the licensee, the CRTC must be notified of the transaction. Similarly, if any
act, agreement or transaction results in a person or a person and its associates acquiring control of 40% or more but less than 50% of the voting interests of a licensee, or a person who has directly or indirectly effective control of the licensee,
the CRTC must be notified.

Diversity of Voices

The CRTCs Broadcasting Public Notice CRTC 2008-4, entitled Diversity of Voices, sets forth the CRTCs
policies with respect to cross-media ownership; the common ownership of television services, including pay and specialty services; the common ownership of broadcasting distribution undertakings (BDUs); and the common ownership of
over-the-air (OTA) television and radio undertakings. Pursuant to these policies, the CRTC will generally permit ownership by one person of no more than one conventional television station in one language in a given market. The
CRTC, as a general rule, will not approve applications for a change in the effective control of broadcasting undertakings that would result in the ownership or control, by one person, of a local radio station, a local television station and a local
newspaper serving the same market. Where a person that controls a local radio station and a local television station acquires a local newspaper serving the same market, the CRTC will, at the earliest opportunity, require the licensee to explain why,
in light of this policy, its radio or television license(s) should be renewed. The CRTC, as a general rule, will not approve applications for a change in effective control that would result in the control, by one person, of a dominant position in
the delivery of television services to Canadians that would impact on the diversity of programming available to television audiences. In terms of BDUs, the CRTC, as a general rule, will not approve applications for a change in the effective control
of BDUs in a market that would result in one person being in a position to effectively control the delivery of programming services in that market. The CRTC is not prepared to allow one person to control all BDUs in any given market.



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Jurisdiction Over Canadian Broadcast Undertakings

Videotrons cable distribution undertakings and TVA Groups broadcasting activities are subject to the Broadcasting Act and
regulations made under the Broadcasting Act that empower the CRTC, subject to directions from the Governor in Council, to regulate and supervise all aspects of the Canadian broadcasting system in order to implement the policy set out in the
Broadcasting Act. Certain of Videotrons and TVA Groups undertakings are also subject to the Radiocommunication Act, which empowers Industry Canada to establish and administer the technical standards that networks and transmitters must
comply with, namely, maintaining the technical quality of signals.

The CRTC has, among other things, the power under the
Broadcasting Act and regulations promulgated thereunder to issue, subject to appropriate conditions, amend, renew, suspend and revoke broadcasting licenses, approve certain changes in corporate ownership and control, and establish and oversee
compliance with regulations and policies concerning broadcasting, including various programming and distribution requirements, subject to certain directions from the Federal Cabinet.

Canadian Broadcasting Distribution (Cable Television)

Licensing of Canadian
Broadcasting Distribution Undertakings

A cable distribution undertaking distributes broadcasting services to customers
predominantly over closed transmission paths. A license to operate a cable distribution undertaking gives the cable television operator the right to distribute television programming services in its licensed service area. Broadcasting licenses may
be issued for periods not exceeding seven years and are usually renewed, except in particular circumstances or in cases of a serious breach of the conditions attached to the license or the regulations of the CRTC. The CRTC is required to hold a
public hearing in connection with the issuance, suspension or revocation of a license. Videotron operates 53 cable systems pursuant either to the issuance of a license or of an order that exempts certain network operations from the obligation to
hold a license.

Cable systems with 20,000 customers or fewer and operating their own local headend are exempted from the
obligation to hold a license pursuant to exemption orders issued by the CRTC on February 15, 2010 (Broadcasting Order CRTC 2009-544). These cable systems are required to comply with a number of programming carriage requirements set out in
the exemption order and comply with the Canadian ownership and control requirements in the Direction to the CRTC. Pursuant to Decision CRTC 2010-87, Videotron remains with only 8 cable distribution licenses.

In order to conduct our business, we must maintain our broadcasting distribution undertaking licenses in good standing. Failure to meet
the terms of our licenses may result in their short-term renewal, suspension, revocation or non-renewal. We have never failed to obtain a license renewal for any cable systems.

On August 30, 2013, Videotron filed a request to amend its distribution licenses of Montréal, Montréal West and
Terrebonne, in order to allocate up to 2% of their required contribution to Canadian programming to an English-language community channel. On February 4, 2015, in Broadcasting Decision CRTC 2015-32, the CRTC approved in part the application
filed by Videotron to amend the broadcasting licenses for Videotrons broadcasting distribution undertakings serving Montréal, Montréal West and Terrebonne. Specifically, Videotron is seeking to launch a separate English-language
community channel to be known as MYtv in its services area. Given that the introduction of English-language community programming would allow the Anglophone community and various other cultural communities of Montréal to benefit from a new
outlet for local expression, the CRTC authorized Videotron to launch MYtv. However, Videotron also asked to be authorized to reallocate up to 2% of its gross annual revenues from its broadcasting activities to the new English-language channel in
addition to what it is currently authorized to allocate to its French-language community channel MAtv. The CRTC denied this part of the application given that Videotron is operating MAtv in non-compliance with regulatory requirements relating to
access programming and local programming (as noted in Broadcasting Decision 2015-31) and that an additional 2% contribution to MYtv would deprive the Canada Media Fund and other funds of significant funding.

As noted in Broadcasting Decision CRTC 2015-31, the CRTC directs Videotron to take concrete steps to bring MAtv into compliance by August
2015, the time of Videotrons next licence renewal. Moreover, the CRTC expects Videotron to form, by March 15, 2015, a citizen advisory board that will take into account the views of different members of the community, including
volunteers, to determine the mix, scope and types of programs that would best serve the needs and interests of the greater Montréal community, and to provide evidence in regard to the above by no later than April 1, 2015.



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On November 27, 2013 the CRTC issued administrative renewals, until August 31,
2015, for the following cable distribution licenses: Gatineau and surrounding areas (Aylmer, Gatineau, Hull), Montreal, Montreal (West), Québec and Terrebonne (Broadcasting Decision CRTC 2013-633).

Distribution of Canadian Content

The Broadcasting Distribution Regulations issued by the CRTC pursuant to the Broadcasting Act mandate the types of Canadian and non-Canadian programming services that may be distributed by
BDUs, including cable television systems. For example, local television stations are subject to must carry rules which require terrestrial distributors, such as cable and MMDS operators, to carry these signals and, in some instances,
those of regional television stations as part of their basic service. The guaranteed carriage enjoyed by local television broadcasters under the must carry rules is designed to ensure that the signals of local broadcasters reach cable
households. Furthermore, cable operators, direct-to-home (DTH) operators and MMDS operators must offer their customers more Canadian programming than non-Canadian programming services. In summary, each cable
television system is required to distribute all of the Canadian programming services that the CRTC has determined are appropriate for the market it serves, which includes local and regional television stations, certain specialty channels and pay
television channels, and a pay-per-view service, but does not include Category B and mainstream sports Category C digital services.

Broadcasting Distribution Regulations

The Broadcasting Distribution Regulations which came into force in 1998 (the 1998 Regulations), apply to broadcasting distribution undertakings in Canada. The 1998 Regulations
promote competition among broadcasting distribution undertakings and the development of new technologies for the distribution of such services while ensuring that quality Canadian programs are broadcast. The 1998 Regulations introduced important new
rules, including the following:



| |  |  | Competition and Carriage Rules. The 1998 Regulations provide equitable opportunities for all distributors of broadcasting services. Similar to
the signal carriage and substitution requirements that are imposed on existing cable television systems, under the 1998 Regulations, new broadcasting distribution undertakings are also subject to carriage and substitution requirements. The 1998
Regulations prohibit a distributor from giving an undue preference to any person, including itself, or subjecting any person to an undue disadvantage. This gives the CRTC the ability to address complaints of anti-competitive behaviour on the part of
certain distributors.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Signal Substitution. A significant aspect of television broadcasting in Canada is simultaneous program substitution, or simulcasting, a
regulatory requirement under which Canadian distribution undertakings, such as cable television systems with over 2,000 customers and DTH satellite operators, are required to substitute the foreign programming service, with local Canadian signal,
including Canadian commercials, for broadcasts of identical programs by a U.S. station when both programs are exhibited at the same time. These requirements are designed to protect the program rights that Canadian broadcasters acquire for their
respective local markets. On January 29, 2015, the CRTC issued Broadcasting Regulatory Policy CRTC 2015-25. The CRTC will continue to allow the practice of simultaneous substitution for the time being. However, to ensure that simultaneous
substitution is executed in a seamless fashion, the CRTC is introducing meaningful consequences should broadcasters and distributors make errors. Further, distributors will no longer be allowed to perform simultaneous substitution for the Super Bowl
as of the end of the 2016 NFL season (which represents the January/February 2017 broadcast of the Super Bowl). On March 2, 2015, Bell Canada filed a motion for leave to appeal with the Federal Court of Appeal regarding this Regulatory Policy.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Contribution to local expression, Canadian programming and community television. All distributors, except systems with fewer than 2,000
customers, are required to contribute at least 5% of their gross annual broadcast revenues to the creation and presentation of Canadian programming including community programming.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Inside Wiring Rules. The CRTC determined that the inside wiring portion of cable networks creates a bottleneck facility that could affect
competition if open access is not provided to other distributors. Incumbent cable companies may retain the ownership of the inside wiring but must allow usage by competitive undertakings to which the cable company may charge a just and
reasonable fee for the use of the inside wire. On September 3, 2002, the CRTC established a fee of $0.52 per customer per month for the use of cable inside wire in multiple-dwelling units. In Broadcasting Regulatory Policy CRTC 2011-774, the
CRTC found that it was appropriate to amend the Broadcasting Distribution Regulations to permit access by subscribers and competing broadcasting distribution undertakings to inside wire in commercial and institutional properties. Therefore, the CRTC
directed all licensees to negotiate appropriate terms and conditions, including a just and reasonable rate, for the use by competitors of the inside wire such licensees own in commercial and institutional properties. If the inside wire configuration
resembles that in a multi-unit dwelling, the CRTC would expect that the established $0.52 per subscriber per month rate would be reasonable. If parties cannot come to an agreement, either party may apply to the CRTC for dispute resolution.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Mandatory distribution of emergency alert messages. On August 29, 2014, in Broadcasting Regulatory Policy CRTC 2014-444, the CRTC required
broadcasters and distributors to fully participate in Canadas National Public Alerting System. By March 31, 2015, radio and television broadcasters, as well as BDUs and video-on-demand (VOD) undertakings in Canada will be required to
alert Canadians of imminent threats to life. As a result, Canadians across the country who are listening to radio or watching television will receive notification of imminent emergencies issued by public officials so that they can take appropriate
action. Alert messages include messages relating to events such as tornadoes, floods, forest fires, industrial disasters and tsunamis.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Rates

Our revenue related to cable television is derived mainly
from (a) monthly subscription fees for basic cable service; (b) fees for premium services such as specialty services, pay-television, pay-per-view television and video-on-demand; and (c) installation and additional outlets charges.

The CRTC does not regulate the fees charged by cable or non-cable broadcast distribution undertakings.

Vertical Integration

In September 2011, the CRTC released Broadcasting Regulatory Policy CRTC 2011-601 (the Policy) setting out its decisions on the regulatory framework for vertical integration. Vertical
integration refers to the ownership or control by one entity of both programming services, such as conventional television stations or pay and specialty services, as well as distribution services, such as cable systems or DTH satellite services. The
Policy: (i) prohibits companies from offering television programs on an exclusive basis to their mobile or Internet subscribers in a manner that they are dependent on the subscription to a specific mobile or retail Internet access service. Any
program broadcast on television, including hockey games and other live events, must be made available to competitors under fair and reasonable terms; (ii) allows companies to offer exclusive programming to their Internet or mobile customers
provided that it is produced specifically for an Internet portal or a mobile device; and (iii) adopts a code of conduct to prevent anti-competitive behaviour and ensure all distributors, broadcasters and online programming services negotiate in
good faith (to protect Canadians from losing a television service during a dispute, broadcasters must continue to provide the service in question and distributors must continue to offer it to their subscribers on the same terms and conditions as it
did before the dispute.)

On July 26, 2012, the CRTC published Broadcasting Regulatory Policy CRTC 2012-407 and announced
amendments to the Television Broadcasting Regulations, the Pay Television Regulations, the Specialty Services Regulations, and the Broadcasting Distribution Regulations. These amendments, related to the distribution of Category B services, the
no head start rule, the prohibition against tied selling, the standstill provisions and dispute resolution provisions, implement determinations made by the CRTC in Regulatory framework relating to vertical integration, Broadcasting
Regulatory Policy CRTC 2011-601, September 21, 2011.

On July 26, 2012, the CRTC published Broadcasting Order
CRTC 2012-408. The CRTC amended the terms and conditions of the exemption order for terrestrial broadcasting distribution undertakings serving fewer than 20,000 subscribers. These amendments implement determinations made by the CRTC in Regulatory
framework relating to vertical integration, Broadcasting Regulatory Policy CRTC 2011-601, September 21, 2011.



56



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Pay-Per-View License

On October 23, 2013, the CRTC published a revised regulatory framework for pay-per-view services, Broadcasting Regulatory Policy CRTC 2013-561, October 23, 2013. The revised framework
simplifies the CRTCs policy and makes it more consistent with the regulatory framework for video-on-demand services, with which pay-per-view services compete. On June 25, 2014, the pay-per-view license of Canal Indigo was renewed until
August 31, 2019. Canal Indigo has to adhere to the standard conditions of license set out in Broadcasting Regulatory Policy CRTC 2013-561. On September 30, 2014, the CRTC approved the application by Videotron to amend the broadcasting
license for the French-language pay-per-view television service Canal Indigo to make it a bilingual service. On October 14, 2014, an amendment request was filed with the CRTC in order to modify the condition of license regarding the number of
English-language signals. Canal Indigo is requesting to maintain a French-to-English ratio of 4:1, including a minimum of two English-language signals instead of three. On February 20, 2015, in Broadcasting Decision CRTC 2015-60, the CRTC
approved Canal Indigos request.

Video-on-demand (VOD) License

In Broadcasting Regulatory Policy CRTC 2015-86 issued on March 12, 2015, the CRTC considered appropriate to authorize a third
category of VOD services based on a hybrid regulatory approach. The CRTC will authorize these hybrid services to operate with the same flexibility as those services operating under the Digital Media Exemption Order (DMEO), provided certain
conditions are met. In this regard, the CRTC will amend and expand the current exemption order for VOD services in order to include hybrid VOD services as a new type of exempt undertaking. The hybrid VOD services will benefit from the following
incentives:



| |  |  | the ability to offer exclusive programming in the same manner as services operating under the DMEO; and
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | the ability to offer their service on a closed BDU network in the same manner as traditional VOD services without the regulatory requirements relating
to financial contributions to and shelf space for Canadian programming that would normally be imposed on those traditional VOD services.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

However, in order to be eligible for exemption under the expanded order, the services must also be offered on the Internet to all Canadians without authentication to a BDU subscription. Therefore, Club
illico qualifies as a hybrid VOD service.

New Media Broadcasting Undertakings

On October 22, 2009, the CRTC amended the Exemption Order applying to new media broadcasting undertakings (Appendix A to the Public
Notice CRTC 1999-197). As such, the description of a new media broadcasting undertaking was amended to encompass all Internet-based and mobile point-to-point broadcasting services, to introduce an undue preference provision for new media
broadcasting undertakings, and to introduce a reporting requirement for such undertakings (Broadcasting Order CRTC 2009-660).

On July 28, 2009, in Broadcasting Regulatory Policy CRTC 2009-329 entitled Review of Broadcasting in New Media, the CRTC
set out its determinations in its proceeding on Canadian broadcasting in new media. However, the CRTC did not determine the legal issue as to whether Internet access providers carry on, in whole or in part, broadcasting undertakings
pursuant to the Broadcasting Act when they provide access to broadcasting through the Internet. Instead, the CRTC stated that it would refer the matter to the Federal Court of Appeal. Hence, the CRTC referred this question to the Federal Court of
Appeal for hearing and determination in its Broadcasting Order CRTC 2009-452. On July 7, 2010, the Federal Court of Appeal determined that ISPs play a content-neutral role in the transmission of data and do not carry on broadcasting
activities. On February 9, 2012, the Supreme Court of Canada subsequently upheld the Federal Court of Appeals decision.



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On July 26, 2012, the CRTC amended the Exemption Order for new media broadcasting
undertakings / Digital Media Exemption Order, Broadcasting Order CRTC 2012-409. These amendments implement determinations made by the CRTC in regulatory framework relating to vertical integration (Broadcasting Regulatory Policy CRTC 2011-601).
As such, the CRTC implemented the following :



| |  |  | A no head start rule, where the CRTC expects that digital media broadcasting undertakings that intend to provide exclusive access to
television programming in a manner that restricts access based on a consumers specific mobile or retail Internet access service will provide other digital media broadcasting undertakings with appropriate notice in order to allow these
undertakings to exercise their options;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A provision to preclude undertakings operating under that exemption order from providing exclusive access to programming designed primarily for
conventional television, specialty, pay or VOD services in situations where such access to the programming was restricted on the basis of a consumers specific mobile or retail Internet access service;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A standstill rule whereby an undertaking that was in a dispute with another undertaking concerning the terms of carriage of programming or any right or
obligation under the Broadcasting Act would be required to continue providing or distributing the service that was subject to the dispute on the same terms and conditions that prevailed before the dispute; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A dispute resolution mechanism.
| | - |  | -------------------------------

Copyright Board Proceedings

Certain copyrights in radio,
television, Internet and pay audio content are administered collectively by copyright societies according to tariffs set by the Copyright Board of Canada (the Copyright Board). Tariffs certified by the Copyright Board are
generally applicable until a public process is held and a decision of the Copyright Board is rendered for a renewed tariff. Renewed tariffs are often applicable retroactively.

Royalties for the Retransmission of Distant Signals

Following the
implementation in 1989 of the Canada-U.S. Free Trade Agreement, the Copyright Act (Canada) was amended to require retransmitters, including Canadian cable television operators, to pay royalties in respect of the retransmission of distant television
and radio signals.

Since this legislative amendment, the Copyright Act (Canada) empowers the Copyright Board to quantify the
amount of royalties payable to retransmit these signals and to allocate them among collective societies representing the holders of copyright in the works thus retransmitted. Such royalties might be a component of an application for a basic cable
service rate charged by cable television operators.

For 2013, the royalties have been set to between $0.41 and $0.98
per customer per month depending on the number of customers receiving the signal. For 2014-2018, the collective societies are demanding substantive increases representing more than 7% for 2014. All the proposed tariffs have been opposed.

Royalties for the Transmission of Pay and Specialty Services

In 1989, the Copyright Act (Canada) was amended, in particular, to define copyright as including the exclusive right to communicate works to the public by telecommunication. Prior to the
amendment, it was generally believed that copyright holders did not have an exclusive right to authorize the transmission of works carried on radio and television station signals when these signals were not broadcasted but rather transmitted
originally by cable television operators to their customers. In 1996, at the request of the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the Copyright Board approved Tariff 17A, which required the payment
of royalties by broadcasting distribution undertakings, including cable television operators, that transmit musical works to their customers in the course of transmitting television services on a subscription basis. Through a series of industry
agreements, this liability was shared with the pay and specialty programming services.



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Royalties for Commercial Television and Specialty Services for Communication to the Public

Tariffs 2A and 17 of the SOCAN require the payment of a royalty to SOCAN by the commercial television stations and by
the specialty services in compensation for the right to communicate to the public by telecommunication in Canada the musical works forming part of SOCANs repertoire and contained in the audiovisual works broadcast. The tariffs represent a
percentage of the gross income of the stations and services. In January 1998, the Copyright Board reduced the applicable rate under Tariff 2.A from 2.1% to 1.8%, and fixed a modified blanket license, allowing television stations to
withdraw from the standard blanket license regarding certain broadcasts. The same changes were applied to Tariff 17 by Copyright Board in February 2001. Both decisions made such changes retroactively applicable as of January 1,
1997.

SOCAN Tariff 2A has been fixed at the following percentages of the gross incomes of the relevant channels, according to
the definitions of the applicable regulations, and subject to the exceptions and special conditions of application of such Tariff: 1.8% from 1997 to 2001, and 1.9 % from 2002 to 2008. SOCAN Tariff 17 has been fixed at the following percentages
of the gross income of the relevant channels, according to the definitions of the applicable regulations, subject to the exceptions and special conditions of application of such Tariff and subject to sharing of the royalties with the broadcasting
distribution undertakings distributing the specialty channels: 1.8% from 1997 to 2000, 1.78% in 2001, and 1.9 % from 2002 to 2008.

SOCAN has filed proposed Tariffs 2.A and 17 before the Copyright Board for the years 2009 to 2015, proposing royaty rates at 1.9% for the 2009-2012 period and an increase to 2,1% for the years 2013 to
2015. All such proposed Tariffs have been opposed by commercial television stations and specialty services. As none of these proposed Tariffs have yet been approved by the Copyright Board, royalties payable to SOCAN since 2008 remain at a rate of
1.9%.

Webcasting of SOCANs repertoire is governed by Tariff 22 D 1, which currently represents 1.9% of the gross income
coming from this platform, subject to the exceptions and special conditions of application of the Tariff. The proposed increase from the current rate to 2.1% for 2014 and 2015 has been opposed.

Royalties for Pay Audio Services

The royalties payable by distribution undertakings for the communication to the public by telecommunication of musical works in SOCANs repertoire in connection with the transmission of a pay audio
signal other than retransmitted signals are as follows: a monthly fee of 12.35% of the affiliation payments payable by a distribution undertaking for the transmission for private or domestic use of a pay audio signal, or an annual fee of 6.175% of
the affiliation payments payable where the distribution undertaking is a small cable transmission system, an unscrambled low power or very low power television station or an equivalent small transmission system. SOCAN has filed a proposed Pay Audio
Tariff for the years 2008 through 2015 that proposes to maintain those rates.

For its part, Re:Sound filed a proposed Pay
Audio Tariff for the period 2012-2016 asking for a monthly fee of 15% of the affiliation payments payable by a distribution undertaking for the transmission for private or domestic use of a pay audio signal, or an annual fee of 7.5% of the
affiliation payments payable where the distribution undertaking is a small cable transmission system, an unscrambled low power or very low power television station or an equivalent small transmission system. The proposed rates have been opposed.

Royalties by Online Music Services

Archambault Group operates an online music streaming service, known as archambault.ca, with per-track fees and an online music streaming service known as Zik.ca. These services, as well as services
relating to permanent or temporary downloads of music, are subject to certain tariffs certified by the Copyright Board, including with respect to the communication to the public by telecommunication of musical works by online music services
(SOCANs Tariff 22.A (2007-2010)), with respect to the reproduction of musical works by online music services (CMRRA-SODRAC Inc. (CSI) Tariff (2008-2010)), and with respect to the communication to the public by
telecommunication of published sound recordings embodying musical works and performers performances of such works through non-interactive and semi-interactive webcasts (Re:Sounds Tariff 8 (2009-2012)).



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In 2007, the Copyright Board rendered two decisions regarding the tariffs proposed
by, on one hand, CSI, for the royalties to be paid by online music services with regards to the reproduction of musical works in CSIs repertoire (CSI Tariff) and, on the other hand, SOCAN for the royalties to be paid for the
public performance of musical works in SOCANs repertoire (SOCAN Tariff) for the purposes of communicating and transmitting the musical works to Canadian consumers via the Internet and authorizing such consumers to further
reproduce the musical work for their own personal use.

The certified tariffs, which resulted from those two
decisions, cover a number of years (2005 to 2006 for the CSI Tariff and 1996 to 2007 for the SOCAN Tariff) and establish different formulae for the calculation of royalties payable by online music services that only offer on-demand streams or
limited downloads with or without on-demand streams. With respect to services relating to on-demand streams, the combined royalty payable was 10.9% of the monthly amount paid by the consumer for such service, subject to a minimum combined monthly
royalty of $0.696 per subscriber. With respect to services relating to permanent downloads, the combined royalty payable is 11% of the amount paid by the consumer for the download, subject to a minimum of $0.56 per permanent download
within a bundle of 13 or more files and a minimum of $0.74 per permanent download in all other cases. With respect to services relating to limited downloads (with or without on-demand streams), the combined royalty payable was 11% of the amount
monthly paid by the consumer for the service, subject to a minimum combined monthly royalty of $1.061 per consumer, if portable limited downloads were allowed ($0.69 monthly royalty per consumer if they were not). Finally, with respect to services
relating to permanent downloads, the combined royalty payable is 11% of the amount paid by the consumer for the download, subject to a combined minimum royalty of $0.56 per permanent download within a bundle of 13 or more files and a minimum of
$0.74 per permanent download in all other cases.

In June 2009, CSI and SOCAN filed proposed tariffs which would
double the royalty. The new tariffs have been contested by the industry. In July 2012, the Supreme Court of Canada issued decisions with respect to the Copyright Act (Canada) in which the court decided that permanent download of a musical
work does not constitute a telecommunication of the work in question to the public and is therefore not subject to the payment of any royalty. The Supreme Court of Canada decided, however, that music streaming is subject to payment of a royalty but
not the reproduction of short previews.

As a result of the decisions rendered by the Supreme Court of Canada in July
2012, SOCANs Tariff 22.A currently only covers on-demand streams (excluding limited and permanent downloads) and varies depending if the services offering is free or not between 10.2% and 12.78% (subject to a combined minimum of $0.85 monthly
per user). For services relating to free on-demand streams, the combined monthly royalty payable to SOCAN and CSI is the lesser of $0.852 per unique visitor or $0.22 per free on-demand stream received by that unique visitor in that month. As for
services relating to limited downloads with or without on-demand streams, the monthly royalty payable to CSI is 9.9% of the monthly amounts paid by subscribers, subject to a minimum monthly royalty of $0.99 per subscriber, if portable limited
downloads are allowed, ($0.66 monthly royalty per subscriber if they are not). Finally, with respect to services relating to permanent downloads, the royalty payable to CSI is 9.9 % of the amount paid by the end user for the download, subject
to minimum royalty of $0.392 per permanent download within a bundle of 13 or more files and a minimum of $0.686 per permanent download in all other cases.

Royalties for Online Music

It is expected that copyright
collectives will try to certify tariffs for online music not part of an online music downloading service. This could result in higher costs for operating websites containing online music content.

Royalties for Ringtones

Since 2006, Videotron sells ringtones directly to cellular phone users. After negotiating a proposed increase, SOCAN and the industry, including Videotron, came to an agreement on a new Tariff 24 for the
period July 1, 2006 to and including the year 2013, the rate is 6% with a minimum royalty of six cents for the period 2006 to 2009, and 5% with a minimum royalty of five cents for the period 2009 to and including 2013.

In July 2012, the Supreme Court of Canada issued decisions in five copyright cases in which the court ruled that songwriters and music
publishers (represented by SOCAN) are not entitled to royalties for certain downloads and samples. Pursuant to those rulings, the industry has filed a lawsuit seeking a refund of the royalties paid and the



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annulment of Tariff 24. The Supreme Court of Canada concluded that no royalty for the communication of musical work to the public by telecommunication was payable for the downloading of
ringtones, but the Federal Court of Canada has concluded on March 6, 2015, that SOCAN has legal reasons to keep royalties paid pursuant to Tariff 24. A Notice to Appeal has been filed on March 16, 2015, before the Federal Court of Appeal
of Canada asking to set aside such decision and for the reimbursement of all royalties paid to SOCAM under Tariff 24. It is thus expected that this matter will continue to be litigated.

ISP Liability

In 1996, SOCAN proposed a tariff to be applied against ISPs,
in respect of composers/publishers rights in musical works communicated over the Internet to ISPs customers. SOCANs proposed tariff was challenged by a number of industry groups and companies. In 1999, the Copyright Board
decided that ISPs should not be liable for the communication of musical works by their customers, although they might be liable if they themselves operated a musical website. In June 2004, the Supreme Court of Canada upheld this portion of the
decision of the Copyright Board and determined that ISPs do not incur liability for copyright content when they engage in normal intermediary activities, including web hosting for third parties and caching. As a consequence, ISPs may, however, be
found liable if their conduct leads to the inference that they have authorized a copyright violation. At the end of 2012, amendments to the Copyright Act (Canada) received royal assent. These amendments clarify ISPs liability with respect to
acts other than communication to the public by telecommunication, such as reproductions, implements safe harbours for the benefit of ISPs, and further put in place a notice and notice process to be followed by ISPs, meaning
that copyright infringement notices must now be sent to the Internet end-users by ISPs.

Canadian Broadcast Programming (Off the Air
Stations and Specialty Services)

Programming of Canadian Content

CRTC regulations require licensees of television stations to maintain a specified percentage of Canadian content in their
programming. A private license is required to devote not less than 55% of the broadcast year, and not less than 50% of the evening broadcast period (6:00 p.m. to midnight) to the broadcast of Canadian programs. Specialty services also have to
maintain a specified percentage of Canadian content in their programming which is generally set forth in the conditions of their respective license(s). In Broadcasting Regulatory Policy CRTC 2015-86 issued on March 12, 2015, the CRTC decided to
abolish the requirement of 55% of Canadian content during a given broadcast year, but decided to maintain the requirement of 50% during the evening broadcast period. Moreover, all pay and specialty services will have to devote only 35% of their
content to Canadian content during a given broadcast year. However, as an exception to this policy, the CRTC will maintain all exhibition requirements for those services that benefit from mandatory distribution under section 9(1)(h) of the
Act.

Genre Protection

In Broadcasting Regulatory Policy CRTC 2015-86 issued on March 12, 2015, the CRTC will eliminate the genre exclusivity policy and related protections for all English- and French-language
discretionary services including Canadian VOD services. As an exception to the general rule of elimination of genre protections, the CRTC will retain the conditions of license relating to nature of service for those services that benefit from a
mandatory distribution order under section 9(1)(h) of the Act, for national news services and for sports services. New or existing services that wish to offer programming from formerly protected genres may do so immediately. Other existing
discretionary services may apply to delete conditions of license relating to their nature of service immediately. Their nature of service will then be replaced with requirements to provide the CRTC with, among others, the name and a brief
description of the relevant updated service.

Broadcasting License Fees

Broadcasting licensees are subject to annual license fees payable to the CRTC. The license fees consist of two separate fees. One fee
allocates the CRTCs regulatory costs for the year to licensees based on a licensees proportion of the gross revenue derived during the year from the licensed activities of all licensees whose gross revenues exceed specific exemption
levels (Part I fee). The other fee, also called the Part II license fee, for broadcasting undertakings that licensed activity exceeds $1,500,000. The total annual amount to be assessed by the CRTC is the lower of: i)



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$100,000,000; and ii) 1.365% multiplied by the aggregate fee revenues for the return year terminating during the previous calendar year of all licensees whose fee revenues exceed the applicable
exemption levels, less the aggregate exemption level for all those licensees for that return year.

Tangible Benefits

On September 5, 2014, the CRTC published its revised approach to tangible benefits and determining the value of
the transaction, Broadcasting Regulatory Policy CRTC 2014 -459. Specifically, to ensure that future tangible benefits for television transactions are streamlined and directed mainly to the production of Canadian programming, the CRTC will generally
require that at least 80% of such benefits be allocated to the Canada Media Fund (CMF) or to various certified independent production funds, unless a compelling case is made that other measures could better meet the public interest. Of this amount,
at least 60% shall be directed to the CMF. For tangible benefits from radio ownership transactions, the CRTC maintains its current approach, including the allocation levels to the various funds supporting the creation, marketing and promotion of
English- and French-language Canadian music. Further, the CRTC finds it appropriate to require that tangible benefits generally be provided for changes to the effective control of all radio and television programming services. The current exemptions
to the application of the tangible benefits policy shall no longer apply. Where a request for an exception is sought, the onus will be on the applicant to show that the exception is in the public interest and meets the criteria for an exception set
out in this policy. The CRTC also generally maintains its current approach for calculating the value of the transaction, with modifications to exclude working capital elements not to be transferred upon closing and to include only the value of
assumed leases for real property (buildings, studios and offices) as well as transmission facilities calculated over five years. Finally, with regard to transactions involving a mix of radio, television or other assets, the CRTC adopts a simplified
method based on revenues to allocate the value between these assets.

Standard Clauses for Non-Disclosure Agreements and Provisions
Governing the Conduct of Audits of Subscriber Information Held by Broadcasting Distribution Undertakings

On
October 31, 2013, the CRTC published two distinct policies regarding the standard clauses for non-disclosure agreements and the provisions governing the conduct of audits of subscriber information held by broadcasting distribution undertakings,
Broadcasting Regulatory Policy CRTC 2013-578.

Thus, the CRTC decided to establish standard non-disclosure clauses and will
require undertakings that negotiate or commit to distribution relationships to sign non-disclosure agreements containing these clauses in order to counter inappropriate use of information regarding the competition.

The revised policy on audits of subscriber information clarifies the manner in which audits are conducted by programming undertakings to
ensure a proper verification of the subscriber information held by broadcasting distribution undertakings.

Renewal of TVAs
Licenses

Following the public hearing held by the CRTC with regards to the renewal of TVAs licenses (TVA network
and associated conventional television stations, along with several TVA specialty services), the CRTC published, on April 26, 2012, the Broadcasting Decision CRTC 2012-242 including, notably, the following determinations:



| |  |  | The CRTC imposed a condition of license to the effect that TVA shall, in each broadcast year, devote to the acquisition of or investment in Canadian
programming at least 80% of the current broadcast years programming expenditures of the network and all conventional television stations of TVA. Moreover, the CRTC did not consider it necessary to impose a condition of license with respect to
either the broadcast of priority programs or to programs of national interest (PNI).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The CRTC chose to continue to require for the local TVA station in Québec City, that, of the 18 hours of local programming per broadcast week, 9
hours must focus specifically on the Québec region, including the 5 hours and 30 minutes of local newscasts (including two newscasts on weekends). The CRTC deemed it unnecessary that the remaining 3 hours and 30 minutes be broadcast
exclusively in the local Québec market and considered that it may be broadcast on the TVA network.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | The CRTC chose to maintain the current Canadian programming expenditures (CPE) requirement for Addik TV at 40% of its revenues of the previous year.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

The conditions of license came into force on September 1, 2012 and will remain applicable until
August 31, 2016 (administrative renewal Broadcasting Decision CRTC 2015-44).

In Broadcasting Regulatory Policy CRTC
2015-86 issued on March 12, 2015, with respect to the French-language market, the CRTC will encourage commonly owned services to apply as groups upon these license renewal. The CRTC will establish on a case-by-case basis the level at which
these services should contribute financially towards Canadian programming.

Canadian Telecommunications Services

Jurisdiction

The
provision of telecommunications services in Canada is regulated by the CRTC pursuant to the Telecommunications Act. The Telecommunications Act provides for the regulation of facilities-based telecommunications common carriers under federal
jurisdiction. With certain exceptions, companies that own or operate transmission facilities in Canada that are used to offer telecommunications services to the public for compensation are deemed telecommunications common carriers under
the Telecommunications Act administered by the CRTC and are subject to regulation. Cable operators offering telecommunications services are deemed Broadcast Carriers.

In the Canadian telecommunications market, Videotron operates as a CLEC and a Broadcast Carrier. Videotron also operates its own
4G mobile wireless network and offers services over this network as a Wireless Service Provider (WSP).

The issuance of licenses for the use of radiofrequency spectrum in Canada is administered by Industry Canada under the Radiocommunication Act. Use of spectrum is governed by conditions of license which
address such matters as license term, transferability and divisibility, technical compliance, lawful interception, research and development requirements, and requirements related to antenna site sharing and mandatory roaming.

Our AWS licenses were issued on December 23, 2008, for a term of ten years. At a minimum of two years before the end of this term,
and any subsequent terms, we may apply for license renewal for an additional license term of up to ten years. AWS license renewal, including whether license fees should apply for a subsequent license term, will be subject to a public consultation
process initiated in year eight. Our 700 MHz licenses were issued on April 3, 2014, for a term of 20 years. At the end of this term, we will have a high expectation that new licenses will be issued for a subsequent term through a renewal
process unless a breach of license condition has occurred, a fundamental reallocation of spectrum to a new service is required, or an overriding policy need arises. The process for issuing licenses after this term and any issues relating to renewal,
including the terms and conditions of the new licenses, will be determined by the Minister of Industry Canada following a public consultation. Our AWS-3 licenses are expected to be issued on or after April 21, 2015, upon final payment of our
winning bids, and will have a term of 20 years. License renewal at the end of this term will be governed by conditions identical to those just described for our 700 MHz licenses.

Application of Canadian Telecommunications Regulation

In a series
of decisions, the CRTC has determined that the carriage of non-programming services by a cable company results in that company being regulated as a carrier under the Telecommunications Act. This applies to a company serving its own
customers, or allowing a third party to use its distribution network to provide non-programming services to customers, such as providing access to cable Internet services.

In addition, the CRTC regulates the provision of telephony services in Canada.

Elements of the CRTCs local telecommunications regulatory framework to which Videotron is subject include: interconnection
standards and inter-carrier compensation arrangements; the mandatory provision of equal access (i.e. customer choice of long distance provider); standards for the provision of 911 service, message relay service and certain privacy features;
the obligation not to prevent other local exchange carriers from accessing end-users on a timely basis



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under reasonable terms and conditions in multi dwelling units where Videotron provides service; and the payment of contribution on VoIP revenues for the purposes of the revenue-based contribution
regime established by the CRTC to subsidize residential telephone services in rural and remote parts of Canada.

As a CLEC,
Videotron is not subject to retail price regulation. ILECs remain subject to retail price regulation in those geographic areas where facilities-based competition is insufficient to protect the interests of consumers. Videotrons ILEC
competitors have requested and been granted forbearance from regulation of local exchange services in the vast majority of residential markets in which Videotron competes, as well as in a large number of business markets, including all of the
largest metropolitan markets in the Province of Québec.

Right to Access to Telecommunications and Support Structures

The CRTC has concluded that some provisions of the Telecommunications Act may be characterized as encouraging joint
use of existing support structures of telephone utilities to facilitate efficient deployment of cable distribution undertakings by Canadian carriers. We access these support structures in exchange for a tariff that is regulated by the CRTC. If it
were not possible to agree on the use or conditions of access with a support structure owner, we could apply to the CRTC for a right of access to a supporting structure of a telephone utility. The Supreme Court of Canada, however, held on
May 16, 2003 that the CRTC does not have jurisdiction under the Telecommunications Act to establish the terms and conditions of access to the support structures of hydro-electricity utilities. Terms of access to the support structures of
hydro-electricity utilities must therefore be negotiated with those utilities.

Videotron has entered into comprehensive
support structure access agreements with all of the major hydro-electric companies and all of the major telecommunications companies in its service territory.

Right to Access to Municipal Rights-of-Way

Pursuant to
sections 42, 43 and 44 of the Telecommunications Act, the CRTC possesses certain construction and expropriation powers related to the installation, operation and maintenance of telecommunication facilities. In the past, most notably in Telecom
Decision CRTC 2001-23 (the Ledcor Decision), the CRTC has used these powers to grant Canadian carriers access to municipal rights-of-way under terms and conditions set out in a municipal access agreement.

On September 23, 2011, the CRTC initiated a public proceeding to consider the development of a model agreement for access by
Canadian carriers to municipal rights-of-way, such as street crossings and other municipal property. As part of this proceeding, an ad hoc working group, including representatives from Canadian municipalities and the telecommunication
industry, was tasked with developing a model agreement based on the principles established in the Ledcor Decision.

On November 21, 2013, the CRTC issued its ruling in this proceeding in the form of Telecom Decision CRTC 2013-618. This
ruling approved a partial model agreement incorporating consensus recommendations from the ad hoc working group on matters such as the use of rights-of-way, permitting practices and the manner of work. At the same time, the CRTC declined to
rule on a series of non-consensus items including the treatment of incorrectly located equipment, indemnification clauses, the definition of causal costs and the reimbursement of collocation costs. In declining to rule on these items, the CRTC
stated its expectation that they be negotiated between individual carriers and municipalities. Should negotiations fail, the CRTC retains the power to resolve disputes.

Videotron has outstanding disputes with several Québec municipalities related to the use of municipal rights-of-way. Should these disputes not be resolved to the mutual satisfaction of the parties,
and should they be referred to the CRTC for resolution, the outcome of which could have a material impact on Videotrons costs for municipal access for its wireline facilities.

Access by Third Parties to Cable Networks

In Canada, access to the
Internet is a telecommunications service. While Internet access services are not regulated on a retail (price and terms of service) basis, Internet access for third-party ISPs is mandated and tariffed according to conditions approved by the CRTC for
cable operators.



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The largest cable operators in Canada, including Videotron, have been required by the
CRTC to provide third-party ISPs with access to their cable systems at mandated cost-based rates. In a decision issued on August 30, 2010, the CRTC reaffirmed the network model underlying the cable operators third-party Internet
access (or TPIA) services, and also reaffirmed its directive that, at the same time we offer any new retail Internet service speed, we file proposed revisions to our TPIA tariff to include this new speed offering. TPIA tariff
items have been filed and approved for all Videotron Internet service speeds. Several third party ISPs are interconnected to our cable network and are thereby providing retail Internet access services.

The CRTC also requires the large cable carriers, such as us, to allow third party ISPs to provide telephony and networking (LAS/VPN)
applications services in addition to retail Internet access services. The CRTC has also approved technical solutions for the provision of static IP addresses under TPIA.

In a decision dated November 15, 2011, the CRTC made substantial changes to the practices that may be employed by incumbent telephone companies and cable operators to bill third parties for the
access to and use of their underlying networks. The objective of these changes was to grant third parties greater flexibility to bring pricing discipline, innovation and consumer choice to the retail Internet service market. The new rules, which
entered into force on February 1, 2012, required Videotron to replace its former end-user usage-based billing model by a new aggregate capacity-based billing model, for the vast majority of Videotrons third party customers. On
February 21, 2013, the CRTC ruled on a series of disputes related to the new wholesale regime. These rulings did not fundamentally alter the nature of the new regime.

In a notice of consultation issued on October 15, 2013, the CRTC initiated a comprehensive review of wholesale services and associated policies. Among the issues considered in this proceeding are
whether to extend mandatory wholesale high-speed access services to include fibre-to-the-premises (FTTP) services, or alternatively whether the CRTC should forbear from regulating any existing wholesale services, as well as the approaches and
principles the CRTC relies on to set rates for wholesale services. A public hearing on these matters took place in November and December, 2014 and a ruling is expected by April 2015. As a result of this proceeding, we may experience increased
competition for retail cable Internet and telephony customers. In addition, because our third-party Internet access rates are regulated by the CRTC, we could be limited in our ability to recover our costs associated with providing this access.

Internet Traffic Management Practices

On October 21, 2009, the CRTC issued a regulatory policy regarding the Internet traffic management practices (ITMPs) of ISPs. The policy attempts to balance the freedom of Canadians to use the
Internet for various purposes with the legitimate interests of ISPs to manage the traffic thus generated on their networks, consistent with legislation, including privacy legislation. Among other things, the policy sets rules for ensuring
transparency in the use of economic and technical ITMPs, and establishes an ITMP framework that provides a structured approach to evaluating whether existing and future ITMPs are in compliance with the prohibition on unjust discrimination (e.g. as
against specific applications or content) found in the Telecommunications Act. Specific rules are also established to ensure that wholesale customers are not subjected to unjust discrimination.

On June 30, 2010, the CRTC determined that the policy framework regarding ITMPs applies to the use of mobile wireless data
services to provide Internet access.

While we consider Videotrons current ITMPs to be fully compliant with the policy,
we note that the policy may limit the range of ITMPs Videotron could choose in the future, thereby potentially constraining our ability to recover our costs associated with providing access to our network.

Regulatory Framework for Mobile Wireless Services

On March 14, 2012, the Government of Canada announced its policy framework for the auction of spectrum in the 700 MHz and 2500 MHz bands, both of which are considered attractive candidates for the
deployment of LTE A mobile wireless technology. The policy framework includes several measures intended to sustain competition and robust investment in wireless telecommunications and promote the timely availability of advanced services,
including:



| |  |  | Foreign investment restrictions have been lifted for companies that initially have a market share of less than 10% of the Canadian telecommunications
market.
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| |  |  | Spectrum caps have been and will be employed in both the 700 MHz and the 2500 MHz auctions to ensure that in each region of Canada no fewer than four
operators gain access to prime spectrum.
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| |  |  | Tower sharing and roaming policies have been improved and extended.
| | - |  | -------------------------------------------------------------------



| |  |  | Obligations have been imposed on 700 MHz license holders to ensure advanced wireless services are quickly delivered to rural Canadians.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------

In the context of the 700 MHz spectrum auction concluded on February 19, 2014, we were declared the
provisional winner of a package of seven spectrum licenses for a final price of $233.3 million. Eligibility documentation and payment equal to 20% of the final price was submitted to Industry Canada on March 5, 2014. Payment equal to the
remaining 80% of the final price was submitted on April 2, 2014. Our licenses were issued on April 3, 2014.

On
January 10, 2014, the Government of Canada announced the final rules for the upcoming 2500 MHz spectrum auction, which is scheduled to begin on April 14, 2015. Videotron will be studying the detailed auction format and rules in depth and
will be setting its auction strategy accordingly. On January 30, 2015, Videotron filed an application to participate in the auction. Videotron was declared a qualified bidder on February 13, 2015.

On December 18, 2014, the Government of Canada published its final technical, policy and licensing framework for the auction of
spectrum licenses in the AWS-3 band. The AWS-3 band is adjacent to the initial AWS band (also referred to as the AWS-1 band), and is considered a key component for future deployment of LTE technology. The final rules included the set-aside of a
single 30 MHz block (of a total 50 MHz available) in each of fourteen regions of Canada. Eligibility to bid on the set-aside block in each region was limited to new entrant wireless carriers already offering commercial mobile wireless services over
their own network in that region. The auction took place on March 3, 2015, and Videotron was declared the successful bidder for four 30 MHz licenses, one in each of Eastern Québec, Southern Québec, Northern Québec and
Eastern Ontario / Outaouais, for a final price of $31.8 million. Eligibility documentation and a payment equal to 20% of the final price must be submitted to Industry Canada on March 20, 2015. Payment equal to the remaining 80% of the final
price must be submitted on April 21, 2015.

In June 2013, Industry Canada published its new framework relating to
transfers, divisions and subordinate licensing of spectrum licenses for commercial mobile spectrum. The framework sets out a series of considerations and criteria for reviewing license transfers and prospective transfers, while refraining from
imposing specific quantitative or other approval thresholds. Among the considerations and criteria are: the current license holdings of the applicants in the licensed area, the overall distribution of holdings in the band and other commercial mobile
bands in the licensed area, the availability of alternative spectrum, and the degree to which the applicants have deployed networks. The framework also sets out review procedures and timelines (normally 12 weeks from the time of receipt of all
required information) and establishes a definition of deemed transfers subject to review. The new framework applies to license transfers and prospective transfers on or after the date of publication, and therefore will apply if and when
Videotron exercises its option to sell its Toronto AWS license to Rogers under the Rogers LTE Agreement.

The CRTC also
regulates mobile wireless services under the Telecommunications Act. On August 12, 1994, the CRTC released a decision forbearing from the exercise of most of its powers under the Telecommunications Act as they relate to mobile wireless service.
However, the CRTC did maintain its ability to require conditions governing customer confidential information and to place other general conditions on the provision of mobile wireless service. Since 1994, the CRTC has exercised this power, for
example, to mandate wireless number portability, and to require all WSPs to upgrade their networks to more precisely determine the location of a person using a mobile phone to call 911.

On October 11, 2012, the CRTC released a decision determining that the conditions for forbearance have not changed sufficiently to
require the CRTC to regulate rates or interfere in the competitiveness of the retail mobile wireless voice and data services market. However, on the same date, to ensure that consumers are able to participate in the competitive market in an informed
and effective manner, and to fulfill the policy objectives of the Telecommunications Act, the CRTC initiated a public proceeding to establish a mandatory code for mobile wireless service providers to address the clarity and content of mobile
wireless service contracts and related issues for consumers.



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The new Wireless Code was published on June 3, 2013 and came into force on
December 2, 2013. It includes, among other things, a limit on early cancellation fees to ensure customers can take advantage of competitive offers at least every two years, as well as measures requiring service providers to unlock wireless
devices, to offer a trial period for wireless contracts, and to set default caps on data overage charges and data roaming charges.

On December 12, 2013 the CRTC initiated a proceeding to consider whether or not there is a situation of unjust discrimination or undue preference with respect to inter-carrier wireless roaming
arrangements in Canada and, if so, what remedies would be appropriate. The CRTC issued its decision on July 31, 2014, ruling that there were clear instances of unjust discrimination and undue preference by one incumbent wireless carrier, and
taking action to prohibit exclusivity provisions in wholesale mobile wireless roaming agreements between Canadian carriers for service in Canada. On February 20, 2014, the CRTC also initiated a broader proceeding to determine whether the
wholesale mobile wireless services market is sufficiently competitive and whether greater regulatory oversight, including mandating access to any existing or potential wholesale mobile wireless service, would be appropriate. In this regard, the CRTC
is examining the market conditions for wholesale roaming and wholesale tower and site sharing, as well as the market conditions for other wholesale mobile wireless services. A public hearing on these matters took place in September and October 2014,
and a ruling is not expected before March 20, 2015.

On June 19, 2014, the Government of Canadas first omnibus
budget implementation bill for 2014 (C-31) received Royal Assent. This bill amends the Telecommunications Act by putting a cap on domestic wireless roaming rates, preventing wireless providers from charging other companies more than they charge
their own customers for mobile voice, data and text services. This measure will be in place until such time as the CRTC makes a decision on roaming rates.

On December 17, 2014, the Government of Canadas second omnibus budget implementation bill for 2014 (C-43) received Royal Assent. This bill amends both the Telecommunications Act and the
Radiocommunication Act to give the CRTC and Industry Canada the option to impose monetary penalties on companies that violate established rules such as the Wireless Code and those related to the deployment of spectrum, services to rural areas and
tower sharing.

The remedies or measures that result from the CRTCs wholesale wireless proceeding or the
Governments legislative amendments could have an impact on Videotrons cost structure for domestic roaming or tower sharing and hence on Videotrons competitiveness in the wireless market.

Municipal Siting Processes for Wireless Antenna Systems

On February 28, 2013, the Canadian Wireless Telecommunications Association, of which Videotron is a member, and the Federation of Canadian Municipalities signed a joint protocol on the siting process
for wireless antenna systems. The protocol establishes a more comprehensive notification and consultation process than current regulations, and emphasizes the need for meaningful pre-consultation to ensure local land use priorities and sensitivities
are fully reflected in the location and design of new antenna systems. Telecommunications carriers have agreed for the first time to notify municipalities of all antennas being installed before their construction, regardless of height, and to
undertake full public consultation for towers under 15 meters-whenever deemed necessary by the municipality.

Effective
implementation of the joint protocol requires a willingness on the part of both carriers and municipalities to engage in constructive discussions related to antenna siting within the framework of current Industry Canada regulations. Any efforts by
municipalities to refrain from constructive discussions or to impose requirements that fall outside of the framework of current Industry Canada regulations could have a material impact on Videotrons ability to expand its existing HSPA+ network
or its LTE network on a timely and cost-effective basis.

On June 26, 2014, the Minister of Industry (Canada) announced
changes to the policy guiding the installation of new antenna towers, most notably to require companies to consult communities on all commercial tower installations regardless of height and to ensure residents are well informed of upcoming
consultations. These changes are largely consistent with the joint protocol cited above.



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Canadian Publishing

Federal and provincial laws do not directly regulate the publication of newspapers in Canada. There are, however, indirect restrictions on the foreign ownership of Canadian newspapers by virtue of
certain provisions of the Income Tax Act (Canada), which limits the deductibility by Canadian taxpayers of advertising expenditures which are made in a newspaper other than, subject to limited exceptions, a Canadian issue of a
Canadian newspaper. For any given publication to qualify as a Canadian issue of a Canadian newspaper, the entity that publishes it, if publicly traded on a prescribed stock exchange in Canada, must ultimately be controlled, in law and in
fact, by Canadian citizens and, if a private company, must be at least 75% owned, in vote and in value, and controlled in fact by Canadians. In addition, the publication must be printed and published in Canada and edited in Canada by individuals
resident in Canada. All of our newspapers qualify as Canadian issues of Canadian newspapers (or otherwise fall outside of the limitation on deductibility of advertising expenses) and, as a result, our commercial advertisers
generally have the right to deduct their advertising expenditures with us for Canadian tax purposes.

ITEM 4A - UNRESOLVED STAFF COMMENTS

None.



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ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following Management Discussion and Analysis provides information concerning the operating results and financial condition of Quebecor
Media Inc. (Quebecor Media or the Corporation). This discussion should be read in conjunction with the consolidated financial statements and accompanying notes. The Corporations consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

All amounts are in Canadian dollars (CAN dollars), unless otherwise indicated. This discussion contains forward-looking statements, which are subject to
a variety of factors that could cause actual results to differ materially from those contemplated by these statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed under
Cautionary Statement Regarding Forward-Looking Statements and in Item 3. Key Information  Risk Factors.

OVERVIEW

Quebecor Media is one of Canadas leading media companies, with activities
in cable distribution, telecommunications, newspaper publishing and distribution, Internet portals and specialized websites service, television broadcasting, studio, soundstage, equipment leasing and
post-production services, visual effects and 3D animation, book and magazine retailing, publishing and distribution, video and console games rental and distribution, music recording, production, distribution,
retailing and streaming, production of shows and events, video game development, out of home advertising, two Quebec Major Junior Hockey League (QMJHL) teams and sporting and cultural events management. Through its Videotron Ltd.
subsidiary, Quebecor Media is a premier cable and mobile communications service provider. Quebecor Media holds leading positions in the creation, promotion and distribution of news, entertainment and Internet-related services that are designed to
appeal to audiences in every demographic category. Quebecor Media continues to pursue a convergence strategy to capture synergies within its portfolio of media properties.

Quebecor Medias operating subsidiaries primary sources of revenue include: subscriptions for cable television, Internet access, cable and mobile telephony services and business solutions;
newspaper and Internet/portal advertising and subscription; television broadcasting advertising, subscription and distribution; book and magazine publishing and distribution; retailing, distribution (physical and digital distribution) and production
of music products (CDs, DVDs and Blu-ray discs, musical instruments, music recording and live event promotion and production); and rental and sale of videos and games.

The major components of Quebecor Medias subsidiaries costs are comprised of employee costs and purchase of goods and services costs, which
include royalties, rights and creation costs, cost of retail products, marketing, circulation and distribution expenses, service and printing contracts, and paper, ink and printing supplies.

QUEBECOR MEDIAS SEGMENTS

Quebecor Medias subsidiaries operate in the following
business segments: Telecommunications, Media and Sports and Entertainment.

During the third quarter of 2014, the Corporation changed its
organizational structure and its operations are now managed through the following three segments: Telecommunications, Media, and Sports and Entertainment. The reorganization consisted in (a) the creation of the new Media segment, which includes
all activities of the previous News Media and Broadcasting segments, as well as the book publishing and distribution activities previously included in the Leisure and Entertainment segment, (b) the creation of the new Sports and Entertainment
segment, which includes all operating, production, distribution and management activities of the previous Leisure and Entertainment segment relating to music, entertainment, sports and the future Québec City Arena (the Arena), and
(c) the transfer of the retail businesses from the previous Leisure and Entertainment segment to the Telecommunications segment. Accordingly, prior period figures in the Corporations segmented information have been reclassified to reflect
these changes.



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TREND INFORMATION

Competition continues to be intense in the cable and alternative multichannel broadcast distribution industry and in the mobile telephony market. The significant subscriber growth recorded in the
Telecommunications sector in past years is not necessarily representative of future growth, due to the penetration rates currently reached.

Moreover, the Telecommunications segment has in the past required substantial capital for the upgrade, expansion and maintenance of its cable and mobile
networks, the launch and expansion of new or additional services to support growth in its customer base, and demands for increased bandwidth capacity and other services. The Corporation expects that additional capital expenditures will be required
in the short and medium term in order to expand and maintain the Telecommunications segments systems and services, including expenditures relating to the cost of its mobile services infrastructure upgrade, as well as costs relating to
advancements in Internet access and high definition television (HDTV). In addition, the demand for wireless data services has been growing at unprecedented rates and it is projected that this demand will further increase in the future.
The anticipated levels of data traffic will represent a growing challenge to the current mobile networks ability to serve this traffic. The Telecommunications segment may have to acquire additional spectrum in the future, as available.

Some of Quebecor Medias lines of business are cyclical in nature. They are dependent on advertising and, in the Media segment in
particular, on circulation sales. Operating results are therefore sensitive to prevailing economic conditions.

In the Media segment,
newspaper circulation, measured in terms of copies sold, has been generally declining in the industry over the past several years. Also, the traditional run of press advertising for major multimarket retailers has been declining over the past few
years due to consolidation in the retail industry, combined with a shift in marketing strategy toward other media. In order to respond to such competition, the Media segments operations continue to develop their Internet presence through
branded websites, including French-language portals and specialized sites.

The broadcasting industry
is undergoing a period of significant change. Television audiences are fragmenting as viewing habits shift not only toward specialty channels, but also toward content delivery platforms that allow users greater control over content and timing, such
as the Internet, video-on-demand and mobile devices. Audience fragmentation has prompted many advertisers to review their strategies. The Media segment is taking steps
to adjust to the profound changes occurring in the broadcasting industry so as to maintain its leadership position and offer audiences and advertisers alike the best available content, when they want it and on the media platform they want.

QUEBECOR MEDIAS INTEREST IN SUBSIDIARIES

Table 1 shows Quebecor Medias equity interest in its main subsidiaries as of December 31, 2014.

Table 1

Quebecor Medias interest (direct and indirect) in its main subsidiaries

December 31, 2014



|                             |  |                   |       |   |                     |  |       |  
|---------------------------- |  | ----------------- | ----- | - | ------------------- |  | ----- | -
|                             |  | Percentageof vote |       |   | Percentageof equity | 
|                             |  |                  
|Videotron Ltd.               |  |                   | 100.0 | % |                     |  | 100.0 | %
|TVA Group Inc.               |  |                   | 99.9  |   |                     |  | 51.5  |  
|Sun Media Corporation        |  |                   | 100.0 |   |                     |  | 100.0 |  
|Quebecor Media Printing Inc. |  |                   | 100.0 |   |                     |  | 100.0 |  
|Archambault Group Inc.       |  |                   | 100.0 |   |                     |  | 100.0 |  
|                             |  |                   |       |   |                     |  |       |  

Quebecor Medias interest in its subsidiaries has not varied significantly over the past three years.



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On June 30, 2012, Sun Media Corporation bought a 2% interest in SUN News General Partnership
(SUN News) from TVA Group Inc. (TVA Group), bringing its interest to 51%.

On March 18, 2015,
TVA Group announced the completion of its rights offering, whereby TVA Group will receive aggregate gross proceeds of approximately $110.0 million from the issuance of 19,434,629 Class B Non-Voting Shares of TVA Group. The closing of the rights
offering will be on March 20, 2015. Under the rights offering, Quebecor Media will subscribe to 17,300,259 Class B Non-Voting Shares of TVA Group at a total cost of $97.9 million and its aggregate equity
interest in TVA Group will increase from 51.5% to 68.4%.

DISCONTINUED OPERATIONS

On October 6, 2014, Quebecor Media announced the sale of its English-language newspaper businesses in Canada  175 newspapers and
publications, the Canoe portal in English Canada, and 8 printing plants, including the Islington, Ontario plant  for a cash consideration of $316.0 million. The transaction will be paid in cash, subject to certain adjustments,
including a $10.0 million adjustment with respect to real estate holdings disposed of by Quebecor Media after the transaction date. The transaction is subject to Competition Bureau authorization. While the sale is under review by the Bureau,
Quebecor Media will continue operating the businesses in question. The operating results and cash flows related to those businesses have been reclassified as discontinued operations in the consolidated statements of income and cash flows.

On September 2, 2014, Quebecor Media closed the sale of its Nurun Inc. (Nurun) subsidiary to the French company Publicis
Groupe for a cash consideration of $125.0 million, less disposed-of cash in the amount of $18.1 million. An amount of $8.2 million was also received in connection with certain adjustments as part of the transaction. The
results of operations and cash flows related to that business, as well as the $41.5 million gain on the sale, have been reclassified as discontinued operations in the consolidated statements of income and cash flows.

On June 1, 2014, Quebecor Media finalized the sale of 74 Québec weeklies to Transcontinental Interactive Inc., (Transcontinental
Interactive), a subsidiary of Transcontinental Inc. (Transcontinental), for a cash consideration of $75.0 million. $4.7 million was also received in 2014 in connection with certain adjustments to transferred
working capital items. The transaction has been authorized by the competent regulatory authorities, specifically the Competition Bureau. The results of operations and cash flows related to those businesses, as well as the $7.9 million gain on
the sale, have been reclassified as discontinued operations in the consolidated statements of income and cash flows.

Quebecor Media announced
that it was abandoning door-to-door distribution of community newspapers and flyers in Québec and discontinuing distribution of the Le Sac Plus doorknob bag as of January 2014. The operating results and cash flows related to those businesses
have been reclassified as discontinued operations in the consolidated statements of income and cash flows.

On June 1, 2013, Quebecor
Media sold its specialized website Jobboom for a cash consideration of $52.1 million, net of disposed-of cash in the amount of $5.4 million, and on November 29, 2013, it sold its
specialized website Réseau Contact for a cash consideration of $7.1 million, net of disposed-of cash in the amount of $0.4 million. The operating results and cash flows related to those businesses, as well as the
$37.6 million gain on the sale of the two websites, were reclassified as discontinued operations in the consolidated statements of income and cash flows.

In this Management Discussion and Analysis, only continuing operating activities of Quebecor Media are included in the analysis of segmented operating results.

HIGHLIGHTS SINCE END OF 2013



| |  | Quebecor Medias sales totalled $3.72 billion in 2014, an increase of $68.6 million (1.9%) compared with 2013.
|- |  | --------------------------------------------------------------------------------------------------------------



| |  | Since the end of 2013, Quebecor Inc. (Quebecor) has announced major management changes at the Corporation and its subsidiaries.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | On April 28, 2014, Pierre Dion was appointed President and Chief Executive Officer of Quebecor and Quebecor Media. On May 7, 2014,
Manon Brouillette was named President and Chief Executive Officer of Videotron.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On June 19, 2014, at Quebecors Annual Meeting of Shareholders, the Right Honourable Brian Mulroney was named Chairman of the Board of
Quebecor and Quebecor Media, succeeding Pierre Karl Péladeau, who resigned all his positions on the Boards of Directors of Quebecor and its subsidiaries on March 9, 2014, following his decision to enter politics. On
March 10, 2014, Sylvie Lalande was appointed Chairperson of the Board of TVA Group.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On July 30, 2014, Benoît Robert was appointed President and Chief Executive Officer of Sports and Entertainment Group.
| | - |  | ----------------------------------------------------------------------------------------------------------------------



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| |  |  | On July 31, 2014, Quebecor created Media Group, a new segment dedicated to entertainment and news media. Media Group includes the operations of
TVA Group, Sun Media Corporation, QMI Agency, Quebecor Media Out of Home, Quebecor Media Sales, Messageries Dynamiques, Quebecor Media Printing, Sogides Group Inc., CEC Publishing Inc. (CEC Publishing)
and Readbooks S.A.S. (Readbooks). Julie Tremblay was appointed President and Chief Executive Officer of the new segment. She also serves as President and Chief Executive Officer of TVA Group.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Telecommunications



| |  | In 2014, the Telecommunications segment grew its revenues by $104.5 million (3.7%) and its adjusted operating income
by $60.7 million (4.7%).
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  | Videotron recorded strong revenue increases at two of its services in 2014: mobile telephony ($67.0 million or 30.4%) and Internet
access ($49.9 million or 6.1%).
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Net increase of 117,700 revenue-generating units1(2.3%) in 2014.
|- |  | ----------------------------------------------------------------



| |  | Net increase of 128,500 subscriber connections for the mobile telephone service, the largest annual increase since 2011.
|- |  | ------------------------------------------------------------------------------------------------------------------------



| |  | On March 11, 2015, Videotron Ltd. (Videotron) announced the acquisition of 4Degrees Colocation and its data centre, the largest in
Québec City, for a cash consideration of $31.5 million, which may increase to $35.5 million if certain criteria are satisfied. The acquisition will enable Videotron to meet its business customers growing technological and hosting needs.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 6, 2015, the Québec Court of Appeal ruled in favour of Videotron and TVA Group, and ordered Bell ExpressVu Limited Partnership
(Bell ExpressVu), a subsidiary of Bell, to pay compensation totalling $137.0 million for having deliberately neglected to implement an appropriate security system to prevent piracy of the signals broadcast by its satellite television
service between 1999 and 2005. The judgment stated that Bell ExpressVu knew and must have foreseen that this practice would cause serious harm to its competitors, including Videotron, its main rival in Québec.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 6, 2015, Quebecor Media announced that its Videotron subsidiary was the successful bidder for four 30 MHz licences in Industry
Canadas auction for AWS-3 commercial mobile spectrum. Quebecor Media obtained the licences for Eastern Québec, Southern Québec, Northern Québec and Eastern Ontario /Outaouais,
covering 100% of Québecs population and the Ottawa area, for a total price of $31.8 million.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On September 10, 2014, Videotron launched its LTE mobile network (LTE network), which reaches nearly 90% of Québecs
population and supports speeds of up to 150 mbps, enabling Québec consumers and business people to use their mobile devices to their full potential.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On August 27, 2014, Videotron launched the new X8 multi-room HD recorder, designed to deliver the best entertainment experience on the market.
With a 2 TB storage capacity and state-of-the-art functionalities, the X8 multi-room HD recorder can record up to 8 television shows simultaneously.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 28, 2014, Apple products were added to the extensive selection of mobile devices Videotron offers its customers. Subsequently, Videotron
launched new illico apps for iPhone (4, 5C, 5S, 6) and iPad. The free apps, featuring customizable, intuitive user interfaces, make thousands of hours of French- and English-language programming from some 50 television channels available to
subscribers to Videotrons cable television service.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On April 3, 2014, after the final instalment was paid on the spectrum won in the auction ended February 19, 2014, Industry Canada issued
seven 700 MHz licences to Videotron. The operating licences, acquired for $233.3 million, cover the entire provinces of Québec, Ontario (except Northern Ontario), Alberta and British Columbia. They make it possible to reach
approximately 80% of Canadas population, more than 28 million people.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Media



| |  | In December 2014, TVA Group closed the acquisition of substantially all of the assets of A.R. Global Vision Ltd. and its subsidiary
(Global Vision), a Canadian provider of film- and television-related services, for a cash consideration of $116.1 million, subject to certain adjustments. Global Vision offers studio, soundstage and equipment leasing and post-production services. Its properties include the Mels La Cité du cinéma studios in Montréal and the Melrose studio in Saint-Hubert, which are
used for both local and foreign film and television productions. On December 30, 2014, TVA Group obtained Competition Bureau authorization of the transaction.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1 | The sum of cable television and cable Internet access subscriptions, cable telephone lines and subscriber connections to the mobile telephony service.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | On November 17, 2014, TVA Group reached an agreement with Transcontinental to acquire 15 magazines for a cash consideration
of $55.5 million. The transaction was authorized by the Competition Bureau on March 2, 2015. Upon closing, TVA Group will become sole owner of 11 of the acquired titles: Coup de pouce, Canadian Living,Véro Magazine, Décormag,Style at Home,Fleurs Plantes Jardins,Canadian Gardening,Québec Vert,The Hockey News,MaisonNeuves.com,Condo Maison Direct and the
recettes.qc.ca,Quoi mangerandOn the table websites. TVA Group will also hold a 51% effective interest in Les Publications Transcontinental-Hearst inc., which operates the magazines Elle CanadaandElle Québec. As well, TVA Group will hold 50% of the shares of Publications Senior inc., which publishes Le Bel ÂgeandGood Times magazines.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | During the September 1 to December 7, 2014 period, TVA Group and its specialty channels had a total television audience market share
of 33.2% in Québec, compared with 31.6% during the previous year (source: Numeris, Fall 2014). TVA Network held its status as the market leader with a 23.9% market share, more than its main
over-the-air rivals combined. Due in part to the success of TVA Sports, TVA Groups specialty channels passed the 10-million-subscriber mark in the fall of 2014.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On October 8, 2014, TVA Sports drew an average audience of 925,000 television viewers and a 25.5% market share for the Montréal
Canadiens season opener. Since TVA Sports began carrying National Hockey League (NHL) hockey, its subscriber base has swelled to 2.0 million. As previously reported, on July 1, 2014, TVA Sports became the
NHLs official French-language broadcaster for the next 12 years. During the 2014-2015 season, TVA Sports will broadcast more than 275 NHL games, among them all Canadiens Saturday night games and all playoff games, including
Canadiens games and the Stanley Cup final.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The second season of La Voixachieved exceptional ratings throughout its run from January 19 to April 13, 2014. The weekly gala
attracted an average audience of more than 2.6 million and an average market share of 56.9%. The creation of value-added multiplatform content around this high-quality television program illustrates
Quebecors successful convergence strategy, which benefits all its media properties.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Since August 1, 2014, Quebecor Media has been responsible for installing, maintaining, managing and advertising on Société de
transport de Laval bus shelters under a 20-year agreement. Quebecor Media made a similar agreement with the Société de transport de Montréal in 2012.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 2014, the Corporation performed impairment tests on its Newspapers and Broadcasting cash generating units (CGUs), which continue to be
impacted by the shift toward digital and by challenging market conditions in the print media and television industries. Accordingly, a $199.3 million non-cash goodwill impairment charge (without any tax consequences), including
$160.0 million presented under discontinued operations, and a $41.7 million non-cash impairment charge (including $20.9 million without any tax consequences) on broadcasting licences were
recorded.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sports and Entertainment



| |  | On February 3, 2015, Quebecor Media announced a strategic partnership with Live Nation Entertainment, including an alliance with Live Nation
Concerts, the global market leader in concert production, and the Ticketmaster ticketing service, which operates in Québec under the name Réseau Admission. On the same date, Quebecor Media formed a strategic partnership with Levy
Restaurants for management of food service operations at the Arena.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On November 27, 2014, Quebecor Media acquired the Remparts de Québec, a QMJHL team. The team plans to move into the Arena in
September 2015.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------

Financing

The following financial operations were carried out in 2014 and at the beginning of 2015.



| |  | On April 9, 2014, Videotron issued US$600.0 million aggregate principal amount of 5.375% Senior Notes maturing on June 15, 2024,
for net proceeds of $654.5 million, net of financing fees of $7.8 million. Strong demand enabled Videotron to upsize the offering with favorable pricing, which clearly demonstrates the strength of its business and credit profile. Videotron
fully hedged the exchange risk on the new Senior Notes by means of cross-currency interest rate swaps. It also converted the fixed interest rate on a US$158.6 million tranche of its Senior Notes to a floating rate.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Videotron used the proceeds from the April 9, 2014 issuance of Senior Notes to prepay and withdraw, on April 24, 2014,
US$260 million principal amount of its outstanding 9.125% Senior Notes, issued on March 5, 2009 and maturing on April 15, 2018, to repay drawings under its revolving credit facility, to pay transaction fees and expenses, and
for general corporate purposes.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | On April 25, 2014, Quebecor Media completed the redemption and early repayment of all of its outstanding 7.75% Senior Notes in the
aggregate principal amount of US$380.0 million, issued on October 5, 2007 and maturing on March 15, 2016, and settled the related hedges.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On November 3, 2014, TVA Group modified the terms and conditions of its bank credit facilities to increase the size of its revolving credit
facility from $100.0 million to $150.0 million; to extend their term by two years until February 24, 2019; and to replace the existing $75.0 million term loan maturing on December 11, 2014 by a new term loan of an
equivalent amount maturing on November 3, 2019. TVA Group also amended some terms and conditions to increase its financial flexibility. Accordingly, TVA Group granted a security on all of its movable assets and an immovable
hypothec on its Head Office building.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 11, 2015, Videotron issued a notice of redemption for all of its outstanding 6.375% Senior Notes due December 15, 2015 in aggregate
principal amount of US$175.0 million at a redemption price of 100.000% of their principal amount. The redemption date is April 10, 2015.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 18, 2015, TVA Group announced the completion of its rights offering, whereby TVA Group will receive aggregate gross proceeds of approximately
$110.0 million from the issuance of 19,434,629 Class B Non-Voting Shares of TVA Group. The closing of the rights offering will be on March 20, 2015. Under the rights offering, Quebecor Media will subscribe to 17,300,259 Class B Non-Voting
Shares of TVA Group at a total cost of $97.9 million and its aggregate equity interest in TVA Group will increase from 51.5% to 68.4%.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NON-IFRS FINANCIAL MEASURES

The financial measures not standardized under IFRS that are
used by the Corporation to assess its financial performance, such as adjusted operating income, cash flows from segment operations, free cash flows from continuing operating activities, and average monthly revenue per user (ARPU), are
not calculated in accordance with or recognized by IFRS. The Corporations method of calculating these non-IFRS financial measures may differ from the methods used by other companies and, as a result, the
non-IFRS financial measures presented in this document may not be comparable to other similarly titled measures disclosed by other companies.

Adjusted Operating Income

In its analysis of operating results, the Corporation defines
adjusted operating income, as reconciled to net income (loss) under IFRS, as net income (loss) before depreciation and amortization, financial expenses, (loss) gain on valuation and translation of financial instruments, charge for restructuring
of operations, impairment of assets and other special items, impairment of goodwill and intangible assets, loss on debt refinancing, income taxes, and income (loss) from discontinued operations. Adjusted operating income as defined above is not a
measure of results that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. It should not be considered in
isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Corporations parent company, Quebecor, uses adjusted operating income in order to assess the performance of its investment in Quebecor Media.
The Corporations management and Board of Directors use this measure in evaluating its consolidated results as well as the results of its operating segments. This measure eliminates the significant level of impairment and
depreciation/amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of Quebecor Media and its segments. Adjusted operating income is also relevant because it is a significant component of
the Corporations annual incentive compensation programs. A limitation of this measure, however, is that it does not reflect the periodic costs of tangible and intangible assets used in generating revenues in the Corporations segments.
Quebecor Media uses other measures that do reflect such costs, such as cash flows from segment operations and free cash flows from continuing operating activities. Quebecor Medias definition of adjusted operating income may not be the
same as similarly titled measures reported by other companies.

Table 2 below provides a reconciliation of adjusted operating income to net
income (loss) as disclosed in the Corporations consolidated financial statements. The consolidated income statement data for the three-month periods ended December 31, 2014 and 2013 presented in Table 2 below is derived from the
unaudited consolidated statements for such periods not included in this annual report.



74



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Table 2

Reconciliation of the adjusted operating income measure used in this report to the net income (loss) measure used in the consolidated financial statements

(in millions of CAN dollars)



|                                                                          |  |                        |         |   |                               |   |         |      |  |   |         |   |  |      |        |   |  |   |        |  
|------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ----------------------------- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------ | - |  | - | ------ | -
|                                                                          |  | Year ended December 31 |         |   | Three monthsended
December 31 |  
|                                                                          |  | 2014                   |         |   | 2013                          |   |         | 2012 |  |   | 2014    |   |  | 2013 |       
|Adjusted operating (loss) income:                                         |  |                        |         |   |                               |   |         |      |  |   |         |   |  |      |        |   |  |   |        |  
|Telecommunications                                                        |  | $                      | 1,354.9 |   |                               | $ | 1,294.2 |      |  | $ | 1,220.2 |   |  | $    | 348.6  |   |  | $ | 328.7  |  
|Media                                                                     |  |                        | 46.5    |   |                               |   | 84.0    |      |  |   | 62.2    |   |  |      | 9.1    |   |  |   | 31.6   |  
|Sports and Entertainment                                                  |  |                        | (3.4    | ) |                               |   | (1.1    | )    |  |   | 2.3     |   |  |      | 0.6    |   |  |   | 0.8    |  
|Head Office                                                               |  |                        | (3.7    | ) |                               |   | 0.1     |      |  |   | 8.2     |   |  |      | (4.2   | ) |  |   | (1.7   | )
|                                                                          |  |                        |         |   |                               |   |         |      |  |   |         |   |  |      |        |   |  |   |        |  
|                                                                          |  |                        | 1,394.3 |   |                               |   | 1,377.2 |      |  |   | 1,292.9 |   |  |      | 354.1  |   |  |   | 359.4  |  
|Depreciation and amortization                                             |  |                        | (664.2  | ) |                               |   | (628.1  | )    |  |   | (552.0  | ) |  |      | (173.7 | ) |  |   | (163.2 | )
|Financial expenses                                                        |  |                        | (324.2  | ) |                               |   | (360.8  | )    |  |   | (335.5  | ) |  |      | (77.7  | ) |  |   | (86.7  | )
|(Loss) gain on valuation and translation of financial instruments         |  |                        | (3.1    | ) |                               |   | (244.4  | )    |  |   | 136.9   |   |  |      | (5.2   | ) |  |   | (32.1  | )
|Restructuring of operations, impairment of assets and other special items |  |                        | (54.4   | ) |                               |   | (11.6   | )    |  |   | 11.3    |   |  |      | (47.7  | ) |  |   | (2.8   | )
|Impairment of goodwill and intangible assets                              |  |                        | (81.0   | ) |                               |   | (35.3   | )    |  |   | (43.0   | ) |  |      |       |   |  |   |       |  
|Loss on debt refinancing                                                  |  |                        | (18.7   | ) |                               |   | (18.9   | )    |  |   | (6.3    | ) |  |      |       |   |  |   |       |  
|Income taxes                                                              |  |                        | (96.4   | ) |                               |   | (36.7   | )    |  |   | (143.0  | ) |  |      | (24.9  | ) |  |   | (23.7  | )
|Income (loss) from discontinued operations                                |  |                        | (65.5   | ) |                               |   | (193.8  | )    |  |   | (129.6  | ) |  |      | 19.4   |   |  |   | 14.3   |  
|                                                                          |  |                        |         |   |                               |   |         |      |  |   |         |   |  |      |        |   |  |   |        |  
|Net income (loss)                                                         |  | $                      | 86.8    |   |                               | $ | (152.4  | )    |  | $ | 231.7   |   |  | $    | 44.3   |   |  | $ | 65.2   |  
|                                                                          |  |                        |         |   |                               |   |         |      |  |   |         |   |  |      |        |   |  |   |        |  

Cash Flows from Segment Operations

Cash flows from segment operations represents adjusted operating income, less additions to property, plant and equipment and to intangible assets (excluding disbursements for licence acquisitions and
renewals), plus proceeds from disposal of assets. The Corporation uses cash flows from segment operations as a measure of the liquidity generated by its segments. Cash flows from segment operations represents funds available for interest and income
tax payments, expenditures related to restructuring programs, business acquisitions, licence acquisitions and renewals, the payment of dividends, and the repayment of long-term debt. Cash flows from segment operations is not a measure of liquidity
that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. Cash flows from segment operations is used by the
Corporations management and Board of Directors to evaluate cash flows generated by its segments operations. When cash flows from segment operations is reported, a reconciliation to adjusted operating income is provided in the same
section of the report.

Free Cash Flows from Continuing Operating Activities

Free cash flows from continuing operating activities consists of cash flows provided by continuing operating activities calculated in accordance with IFRS, less additions to property, plant and
equipment and to intangible assets (excluding disbursements for licence acquisitions and renewals), plus proceeds from disposal of assets. The Corporation uses free cash flows from continuing operating activities as a measure of total liquidity
generated on a consolidated basis. Free cash flows from continuing operating activities represents funds available for business acquisitions, licence acquisitions and renewals, the payment of dividends and the repayment of long-term debt. Free cash flows from continuing operating activities is not a measure of liquidity that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating
performance measures or to the statement of cash flows as a measure of liquidity. The Corporations definition of free cash flows from continuing operating activities may not be identical to similarly titled measures reported by other
companies.



75



---

Table 7 provides a reconciliation of free cash flows from continuing operating activities of the Corporation
to cash flows provided by continuing operating activities reported in the consolidated financial statements.

Average Monthly Revenue per
User

ARPU is an industry metric that the Corporation uses to measure its monthly cable television, Internet access, cable and mobile
telephony revenues per average basic cable customer. ARPU is not a measurement that is consistent with IFRS and the Corporations definition and calculation of ARPU may not be the same as identically titled measurements reported by other
companies. The Corporation calculates ARPU by dividing its combined cable television, Internet access and cable and mobile telephony revenues by the average number of basic customers during the applicable period, and then dividing the resulting
amount by the number of months in the applicable period.



76



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2014/2013 FINANCIAL YEAR COMPARISON

Analysis of consolidated results of Quebecor Media

Revenues:$3.72 billion, a $68.6 million (1.9%) increase.



| |  | Revenues increased in Telecommunications ($104.5 million or 3.7% of segment revenues).
|- |  | --------------------------------------------------------------------------------------



| |  | Revenues decreased in Media ($20.6 million or -2.5%) and Sports & Entertainment ($9.3 million
or -13.2%).
|- |  | ---------------------------------------------------------------------------------------------------------

Adjusted operating income:$1.39 billion, a
$17.1 million (1.2%) increase.



| |  | Adjusted operating income increased in Telecommunications ($60.7 million or 4.7% of segment adjusted operating income).
|- |  | -----------------------------------------------------------------------------------------------------------------------



| |  | Adjusted operating income decreased in Media ($37.5 million or -44.6%), Sports and Entertainment ($2.3 million) and Head Office
($3.8 million).
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  | The change in the fair value of Quebecor Media stock options resulted in a $2.5 million unfavourable variance in the stock-based compensation charge in 2014 compared with 2013. The change in the fair value of Quebecor stock options and the impact of various transactions on the options issued under this program resulted in an
$8.8 million favourable variance in the Corporations stock-based compensation charge in 2014.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net income attributable to shareholders:$107.6 million in 2014 compared with a $159.6 million net loss attributable to shareholders in 2013, a $267.2 million favourable
variance.



| |  | The favourable variance was due primarily to:
|- |  | ---------------------------------------------



| |  |  | $241.3 million favourable variance in gains and losses on valuation and translation of financial instruments;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | $128.3 million favourable variance in losses from discontinued operations;
| | - |  | --------------------------------------------------------------------------



| |  |  | $36.6 million decrease in financial expenses;
| | - |  | ---------------------------------------------



| |  |  | $17.1 million increase in adjusted operating income.
| | - |  | ----------------------------------------------------

Partially offset by:



| |  |  | $45.7 million unfavourable variance in non-cash charge for impairment of goodwill and intangible assets (including $19.5 million without any
tax consequences), minus related non-controlling interest;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $42.8 million unfavourable variance in the charge for restructuring of operations, impairment of assets and other special items (including
$34.3 million without any tax consequences);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $36.1 million increase in the depreciation and amortization charge.
| | - |  | -------------------------------------------------------------------

Depreciation and amortization charge:$664.2 million in 2014, a $36.1 million increase essentially due to the impact of capital expenditures in the Telecommunications segment, including
amortization of expenditures related to the promotional strategy focused on equipment leasing, to investments in the LTE network, and to modernization and expansion of the wired and wireless networks.

Financial expenses:$324.2 million, a $36.6 million decrease caused mainly by the impact of lower interest rates on long-term debt due to debt refinancing at lower rates and by lower indebtedness.

Loss on
valuation and translation of financial instruments:$3.1 million in 2014 compared with $244.4 million in 2013. The $241.3 million favourable variance was mainly due to the variance in the fair value of early settlement
options caused by fluctuations in valuation assumptions, including interest rates and credit premiums implicit in the adjusted prices of the underlying instruments, and to losses on reversal of embedded derivatives recognized in 2013 in connection
with debt redemption.



77



---

Charge for restructuring of operations, impairment of assets and other special items:$54.4 million in 2014 compared with $11.6 million in 2013, an unfavourable variance of $42.8 million.



| |  | In 2014, the Telecommunications segment recorded a $3.3 million restructuring charge ($1.8 million in 2013) and a $3.4 million
impairment charge on assets. The segment also recorded a $34.3 million charge (without any tax consequences), including interest, following a trial judgment against Videotron.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 2014, a $6.5 million net charge for restructuring of operations was recorded in the Media segment with respect to staff-reduction programs ($6.7 million in 2013). In connection with those initiatives, a $0.1 million loss on disposal of assets was recognized in 2014 ($0.1 million gain in 2013) and a
$2.1 million impairment charge on certain assets was also recognized in 2013. In 2014, the Media segment also recognized a $3.3 million asset impairment charge on its broadcasting assets and a $2.6 million other special
charge, primarily attributable to business acquisitions.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The other segments recorded a net charge for restructuring of operations, impairment of assets and other special items of $0.9 million
in 2014 ($1.1 million in 2013).
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Charge for impairment of goodwill and intangible assets:$81.0 million in 2014, compared with $35.3 million in the same period of 2013, an unfavourable variance of $45.7 million.



| |  | In the second quarter of 2014, the Corporation performed annual impairment tests on its CGUs. It concluded that the recoverable amount based on
fair value less disposal costs was less than the carrying amount of its Newspapers CGU, which continues to be affected by the shift to digital and challenging market conditions in the newspaper industry. Accordingly, the Media segment recorded
a $30.0 million non-cash goodwill impairment charge, without any tax consequences.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In the third quarter of 2014, the Corporation completed its annual review of its three-year strategic plan. In view of market conditions in the
television industry, the Corporation performed an impairment test on its Broadcasting CGU. The Corporation concluded that the recoverable amount, based on fair value less disposal costs, was less than the carrying amount of this CGU.
Accordingly, a $41.7 million non-cash impairment charge on broadcasting licences (including $20.9 million without any tax consequences) and a $9.3 million non-cash goodwill impairment charge (including $3.9 million without any
tax consequences) were recorded.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In the third quarter of 2013, Quebecor Media performed impairment tests on the Newspapers, Books and Music CGUs. Accordingly, the following
impairment charges were recorded:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Media segment recognized a $14.5 million non-cash goodwill impairment charge, without any tax consequences, in its Newspapers CGU and an
$11.9 million non-cash goodwill impairment charge, without any tax consequences, in its Books CGU;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Quebecor Media recorded an $8.9 million non-cash goodwill impairment charges without any tax consequences in its Music CGU.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------

Loss on debt refinancing:$18.7 million in 2014 compared with $18.9 million in 2013.



| |  | In accordance with a notice issued on March 26, 2014, Videotron redeemed on April 24, 2014 US$260.0 million aggregate principal amount
of its outstanding 9.125% Senior Notes issued on March 5, 2009 and maturing on April 15, 2018 at a redemption price of 103.042% of their principal amount. A $21.4 million net loss was recorded in the consolidated statement of income
in the first quarter of 2014 in connection with this redemption, including a $1.7 million loss previously recorded in Other comprehensive income.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In accordance with a notice issued on March 26, 2014, Quebecor Media redeemed on April 25, 2014 the entirety of its outstanding
7.75% Senior Notes issued on October 5, 2007 and maturing on March 15, 2016, in the aggregate principal amount of US$380.0 million, at a redemption price of 100.00% of their principal amount, and settled the related
hedges. A $2.7 million net gain was recorded in the consolidated statement of income in the first quarter of 2014 in connection with this redemption, including a $12.5 million gain previously recorded in Other comprehensive
income.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On June 3, 2013, Videotron issued a notice for the redemption on July 2, 2013 of US$380.0 million aggregate principal amount of its
issued and outstanding 9.125% Senior Notes due in April 2018 at a redemption price of 104.563% of their principal amount, and settled the related hedges. As a result, a total $18.9 million loss was recorded in the consolidated statement of
income in the second quarter of 2013, including a $6.5 million gain previously recorded in Other comprehensive income.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



78



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Income tax expense:$96.4 million in 2014 (effective tax rate of 28.5%) compared with
$36.7 million in 2013 (effective tax rate of 32.4%), a $59.7 million unfavourable variance. The effective tax rate is calculated considering only taxable and deductible items.



| |  | The unfavourable variance in the income tax expense was mainly due to the impact of the increase in taxable income.
|- |  | -------------------------------------------------------------------------------------------------------------------



| |  | The variance in the effective tax rates was due to the impact of the tax rate mix on the various components of the gain or loss on valuation and
translation of financial instruments, and losses on debt refinancing.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



79



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SEGMENTED ANALYSIS

Telecommunications

In Quebecor Medias Telecommunications segment, Videotron is the
largest cable operator in Québec and the third-largest in Canada by customer base. Its state-of-the-art network passes 2,777,300 homes and businesses. In addition to analog cable television and
digital cable television (illico Digital TV) services, Videotron offers Internet access, cable telephony and advanced mobile telephony services, including high-speed Internet access, mobile television and many other functionalities
supported by smartphones. Videotron also includes Videotron Business Solutions, a full-service business telecommunications provider that offers telephony, high-speed data transmission, Internet access,
hosting, and cable television services.

The Corporations operations in the Telecommunications segment also include retail sales of CDs,
books, DVDs, Blu-ray discs, musical instruments, games and toys, video games, gift ideas and magazines through the chain of stores operated by Archambault Group Inc. (Archambault Group)
and the archambault.ca e-commerce site, as well as online sales of downloadable music and books.

The segment is also engaged in retail
sales and rentals of DVDs, Blu-ray discs and console games through the Le SuperClub Vidéotron ltée subsidiary (Le SuperClub Vidéotron) and its franchise network.

2014 operating results

Revenues:$2.97 billion, a $104.5 million (3.7%) increase.



| |  | Combined revenues from all cable television services decreased $15.5 million (-1.4%) to
$1.08 billion, due primarily to the impact of the net decrease in the customer base and the decrease in video-on-demand, pay-per-view and pay TV orders,
partially offset by higher revenues from the leasing of digital set-top boxes and higher per-subscriber revenues.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from Internet access services increased $49.9 million (6.1%) to $868.3 million. The favourable variance was mainly due to
increased usage, higher revenues from Internet access resellers, customer base growth, and higher per-subscriber revenues.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from the cable telephony service increased $1.3 million (0.3%) to $475.1 million, primarily as a result of increases in per-subscriber revenues and in the number of business lines, partially offset by a decrease in long-distance revenues.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from mobile telephony service increased $67.0 million (30.4%) to $287.7 million, essentially due to customer growth.
|- |  | -----------------------------------------------------------------------------------------------------------------------------



| |  | Revenues of Videotron Business Solutions increased $2.1 million (3.3%) to $65.6 million.
|- |  | ----------------------------------------------------------------------------------------



| |  | Revenues from customer equipment sales increased $9.1 million (24.9%) to $45.6 million, mainly because of the growth in the number of
subscriber connections to the mobile service and increased sales of more powerful equipment.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from retail sales decreased by $10.8 million (-7.2%) to $138.3 million because of decreased sales at Archambault Group stores,
including lower sales of videos, CDs and books, and lower revenues at Le SuperClub Vidéotron, including lower franchise fees and store closings.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Other revenues increased $0.9 million (10.3%) to $9.6 million.
|- |  | --------------------------------------------------------------

ARPU:$125.16 in 2014 compared with $118.03 in 2013, an increase of $7.13 (6.0%).

Customer statistics

Revenue-generating units As of December 31, 2014,
the total number of revenue-generating units stood at 5,301,600, a 117,700-unit (2.3%) increase in 2014, compared with a 164,800-unit increase in 2013
(Table 3). Revenue-generating units are the sum of cable television and cable Internet access subscriptions, cable telephone lines and subscriber connections to the mobile telephony service.

Cable television The combined customer base for all of Videotrons cable television services decreased by 42,800 (-2.3%) in 2014, compared with a decrease of 29,900 in 2013 (Table 3). As of December 31, 2014, Videotron had 1,782,300 subscribers to its cable television services. The household and
business penetration rate (number of subscribers as a proportion of the total 2,777,300 homes and businesses passed by Videotrons network as of the end of December 2014, up from 2,742,500 one year earlier) was 64.2%
versus 66.5% a year earlier.



80



---

| |  | As of December 31, 2014, the number of subscribers to the illico Digital TV service stood at 1,561,700, an increase of 30,300
(2.0%) in 2014, compared with a 46,800-subscriber increase in 2013. As of December 31, 2014, illico Digital TV had a household and business penetration rate of 56.2% versus 55.8% a year earlier.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The customer base for analog cable television services decreased by 73,100 in 2014, compared with a decrease of 76,700 in 2013, partly as a
result of customer migration to illico Digital TV.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cable Internet access The number of subscribers to cable
Internet access services stood at 1,537,500 at December 31, 2014, an increase of 31,500 (2.1%) in 2014, compared with an increase of 62,000 in 2013 (Table 3). At December 31, 2014, Videotrons cable Internet
access services had a household and business penetration rate of 55.4% compared with 54.9% a year earlier.

Cable telephony service
The number of cable telephone lines stood at 1,349,000 as of December 31, 2014, an increase of 500 from the end of 2013, compared with an increase of 32,200 in 2013 (Table 3). At December 31, 2014, the
cable telephony service had a household and business penetration rate of 48.6% versus 49.2% a year earlier.

Mobile telephony
service As of December 31, 2014, the number of subscriber connections to the mobile telephony service stood at 632,800, an increase of 128,500 (25.5%) in 2014, compared with an increase of 100,500 in 2013
(Table 3).

Table 3

Telecommunications segment year-end customer numbers1 (2010-2014)

(in thousands of customers)



|                                 |  |      |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|-------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | ---- | ------- |  |  |  | ------- | 
|                                 |  | 2014 |         |  | 2013 |  |         | 2012 |  |  | 2011    |  |  | 2010 |        
|                                 |  |      |         |  |     
|Cable television:                |  |      |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|Analog                           |  |      | 220.6   |  |      |  | 293.7   |      |  |  | 370.4   |  |  |      | 460.7   |  |  |  | 592.0   | 
|Digital                          |  |      | 1,561.7 |  |      |  | 1,531.4 |      |  |  | 1,484.6 |  |  |      | 1,400.8 |  |  |  | 1,219.6 | 
|                                 |  |      |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|                                 |  |      | 1,782.3 |  |      |  | 1,825.1 |      |  |  | 1,855.0 |  |  |      | 1,861.5 |  |  |  | 1,811.6 | 
|Cable Internet                   |  |      | 1,537.5 |  |      |  | 1,506.0 |      |  |  | 1,444.0 |  |  |      | 1,359.6 |  |  |  | 1,268.1 | 
|Cable telephony2                 |  |      | 1,349.0 |  |      |  | 1,348.5 |      |  |  | 1,316.3 |  |  |      | 1,245.9 |  |  |  | 1,145.1 | 
|Mobile telephony2                |  |      | 632.8   |  |      |  | 504.3   |      |  |  | 403.8   |  |  |      | 290.7   |  |  |  | 136.1   | 
|                                 |  |      |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|Total (revenue-generating units) |  |      | 5,301.6 |  |      |  | 5,183.9 |      |  |  | 5,019.1 |  |  |      | 4,757.7 |  |  |  | 4,360.9 | 
|                                 |  |      |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 

|1 | Customer statistics have been restated for 2014 and previous years to reflect certain adjustments to product definitions.
|- | -------------------------------------------------------------------------------------------------------------------------

|2 | Thousands of connections.
|- | -------------------------

Adjusted operating income:$1.35 billion, a $60.7 million (4.7%) increase caused primarily by:



| |  |  | impact of higher revenues;
| | - |  | --------------------------



| |  |  | $7.2 million favourable retroactive adjustment arising from a correction to the subscription fee calculation method.
| | - |  | --------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | impact of the higher number of mobile devices sold at a loss;
| | - |  | -------------------------------------------------------------



| |  |  | favourable impact on the 2013 results of one-time adjustments, including a provision for Canadian
Radio-television and Telecommunications Commission (CRTC) licence fees in order to align with the CRTCs billing period;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increases in some operating expenses, including advertising, marketing and customer service expenses.
| | - |  | -----------------------------------------------------------------------------------------------------

Cost/revenue ratio:Operating costs for all Telecommunications segment operations, expressed as a percentage of revenues, were 54.3%
in 2014 compared with 54.8% in 2013. The decrease was mainly due to the impact of revenue growth (as the fixed component of operating costs does not fluctuate in proportion to revenues), partially offset by the impact of the higher number of
mobile devices sold at a loss and the increase in some operating expenses, including advertising and marketing expenses.



81



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Cash flows from operations

Cash flows from segment operations:$665.5 million in 2014 compared with $722.1 million in 2013 (Table 4).



| |  | The $56.6 million decrease reflects a $109.9 million increase in additions to property, plant and equipment and to intangible assets, due
mainly to increased capital expenditures on the LTE network and a $7.4 million decrease in proceeds from disposal of assets, partially offset by the $60.7 million increase in adjusted operating income.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Table 4: Telecommunications

Cash
flows from operations

(in millions of CAN dollars)



|                                           |  |      |         |   |      |   |         |      |  |   |         |  
|------------------------------------------ |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                           |  | 2014 |         |   | 2013 |   |         | 2012 | 
|                                           |  |      |        
|Adjusted operating income                  |  | $    | 1,354.9 |   |      | $ | 1,294.2 |      |  | $ | 1,220.2 |  
|Additions to property, plant and equipment |  |      | (607.5  | ) |      |   | (532.9  | )    |  |   | (672.8  | )
|Additions to intangible assets             |  |      | (87.3   | ) |      |   | (52.0   | )    |  |   | (77.2   | )
|Proceeds from disposal of assets           |  |      | 5.4     |   |      |   | 12.8    |      |  |   | 7.1     |  
|                                           |  |      |         |   |      |   |         |      |  |   |         |  
|Cash flows from segment operations         |  | $    | 665.5   |   |      | $ | 722.1   |      |  | $ | 477.3   |  
|                                           |  |      |         |   |      |   |         |      |  |   |         |  

Media

The Media segment of Quebecor Media operates two paid-circulation daily newspapers, Le Journal de
Montréal and Le Journal de Québec, and a free daily, 24 heures Montréal.According to corporate figures, the aggregate circulation
of the Media segments paid and free newspapers was approximately 2.9 million copies per week as of December 31, 2014.

The paid-circulation newspapers disseminate information in traditional print form, as well as through two urban daily news portals, journaldemontreal.com and journaldequebec.com. The Media
segment also operates a number of websites, including canoe.ca and canoe.tv, as well as the e-commerce sites micasa.ca (real estate) and autonet.ca (automobiles). The Media segments portals log 2.9 million
unique visitors per month (according to corporate figures).

Also in the Media segment, TVA Group operates the largest
French-language private television network in North America. TVA Group is the sole owner of 6 of the 10 television stations in the TVA Network and the specialty channels LCN, TVA Sports, addikTV, Argent, Prise 2, Yoopa, CASA and MOI&cie. TVA Group also
holds interests in two other TVA Network affiliates and the Évasion specialty channel. TVA Groups TVA Accès division is engaged in commercial production and its TVA Films division in the distribution of films and
television programs. Through its subsidiaries TVA Publications inc. and Les Publications Charron & Cie inc. (Les Publications Charron & Cie), TVA Group publishes more than
50 magazines in the general interest and entertainment categories. It is the largest publisher of French-language magazines in Québec.

Until February 13, 2015, the Media segment also operated the English-language news and opinion specialty channel SUN News, which discontinued its operations on that date. The Media
segments operating results presented in this report include SUN News financial data.

TVA Group also closed the acquisition
of substantially all of the assets of Global Vision in December 2014. Global Vision provides studio, soundstage and equipment leasing and post-production services to the film and television industries.

The Media segment is also engaged in the distribution of newspapers and magazines, commercial printing and outdoor advertising. In addition, the segment
includes QMI Agency, a news agency that provides content to all Quebecor Media properties and outside customers, as well as Quebecor Media Sales, which offers its customers integrated, diversified, complete advertising services.

Finally, the Media segment is also engaged in academic publishing through CEC Publishing, general literature through 18 publishing houses, physical
and digital distribution of books through Messageries ADP inc., the exclusive distributor for approximately 200 Québec and European French-language publishers, and e-books through Readbooks.



82



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2014 operating results

Revenues:$807.7 million in 2014, a $20.6 million (-2.5%) decrease.



| |  | Newspaper publishing revenues decreased by $16.1 million (-5.9%).
|- |  | -----------------------------------------------------------------



| |  |  | Advertising revenues decreased 7.3%; circulation revenues decreased 2.5%; digital revenues increased 5.1%; combined revenues from commercial
printing and other sources decreased 7.0%.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Revenues decreased 5.4% at the urban dailies and 6.7% at the portals.
| | - |  | ---------------------------------------------------------------------



| |  | Broadcasting revenues decreased by $4.2 million (-1.1%), mainly because of:
|- |  | ---------------------------------------------------------------------------



| |  |  | lower advertising revenues at TVA Network;
| | - |  | ------------------------------------------



| |  |  | $6.1 million favourable adjustment in 2013 resulting from retroactive adjustment to royalties for the retransmission of the over-the-air stations signals to markets located outside their local service areas (retransmission royalties) for the years 2009 to 2012;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | discontinuation of operations of TVA Boutiques in 2013.
| | - |  | -------------------------------------------------------

Partially offset by:



| |  |  | increased subscription revenues at the specialty services, including TVA Sports, mainly because of the addition of programming dedicated to NHL hockey,
and SUN News, due to an adjustment to royalty rates;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increased advertising revenues at the specialty services, mainly TVA Sports.
| | - |  | ----------------------------------------------------------------------------



| |  | Magazine publishing revenues increased by $0.7 million (1.0%), mainly because of the favourable impact on revenues of the acquisition of
Les Publications Charron & Cie in July 2013, partially offset by the decrease in advertising revenues on a same-store basis and the impact of the closing of some publications.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Quebecor Media Out of Homes revenues increased $1.6 million (20.7%), mainly because of new digital advertising revenues.
|- |  | -------------------------------------------------------------------------------------------------------------------------



| |  | Book distribution and publishing revenues increased by $0.8 million (0.8%), primarily as a result of increased bookstore volume.
|- |  | --------------------------------------------------------------------------------------------------------------------------------

Adjusted operating income:$46.5 million in 2014, a $37.5 million (-44.6%) decrease.



| |  | Adjusted operating income from newspaper publishing decreased $5.0 million (-16.9%) due to:
|- |  | -------------------------------------------------------------------------------------------



| |  |  | impact of decrease in revenues;
| | - |  | -------------------------------



| |  |  | higher employee compensation costs;
| | - |  | -----------------------------------



| |  |  | $2.8 million favourable impact in 2013 of adjustments to the cost of post-retirement benefits.
| | - |  | ----------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | $7.8 million favourable impact of restructuring initiatives and other reductions in operating expenses.
| | - |  | -------------------------------------------------------------------------------------------------------



| |  | Adjusted operating income from broadcasting operations decreased by $34.2 million (-82.7%), mainly as a
result of:
|- |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | higher content costs, partially as a result of increased spending on TVA Sports and adjustments to the cost of certain
prior-year broadcasting rights related to indemnification clauses;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | impact of decrease in TVA Networks advertising revenues;
| | - |  | ---------------------------------------------------------



| |  |  | favourable impact of $6.1 million retroactive adjustment to retransmission royalties in 2013;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | favourable impact on second quarter 2013 results of an adjustment to the provision for CRTC licence fees to align with the CRTCs billing period.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | impact of higher subscription and advertising revenues at the specialty channels.
| | - |  | ---------------------------------------------------------------------------------



| |  | Adjusted operating income from magazine publishing increased by $2.2 million (28.5%), mainly as a result of:
|- |  | ------------------------------------------------------------------------------------------------------------



| |  |  | impact of acquisition of Les Publications Charron & Cie;
| | - |  | --------------------------------------------------------



83



---

| |  |  | reductions in some operating costs, including printing and production costs.
| | - |  | ----------------------------------------------------------------------------

Partially offset by:



| |  |  | impact of decrease in advertising revenues on a same-store basis.
| | - |  | -----------------------------------------------------------------



| |  | Adjusted operating income from book distribution and publishing decreased by $0.7 million (-7.0%), due
primarily to increases in some operating expenses, partly reflecting an unfavourable adjustment to government tax credits.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost/revenue ratio:Employee costs and purchases of goods and services for the Media segments operations, expressed as a percentage of
revenues, were 94.2% in 2014 compared with 89.9% in 2013. The increase was mainly due to the impact of higher television content costs, the revenue decrease (as the fixed component of operating costs does not fluctuate in proportion to the decrease
in revenues), and the favourable impact on the 2013 results of the retroactive adjustment to retransmission royalties.

Cash flows from
operations

Cash flows from segment operations:$5.0 million in 2014, compared with $49.4 million in 2013
(Table 5). The $44.4 million decrease was mainly due to the $37.5 million decline in adjusted operating income.

Table 5:
Media

Cash flows from operations

(in millions of CAN dollars)



|                                           |  |      |       |   |      |   |       |      |  |   |       |  
|------------------------------------------ |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                           |  | 2014 |       |   | 2013 |   |       | 2012 | 
|Adjusted operating income                  |  | $    | 46.5  |   |      | $ | 84.0  |      |  | $ | 62.2  |  
|Additions to property, plant and equipment |  |      | (32.2 | ) |      |   | (26.2 | )    |  |   | (25.8 | )
|Additions to intangible assets             |  |      | (9.3  | ) |      |   | (8.8  | )    |  |   | (10.9 | )
|Proceeds from disposal of assets           |  |      |      |   |      |   | 0.4   |      |  |   | 21.2  |  
|                                           |  |      |       |   |      |   |       |      |  |   |       |  
|Cash flows from segment operations         |  | $    | 5.0   |   |      | $ | 49.4  |      |  | $ | 46.7  |  
|                                           |  |      |       |   |      |   |       |      |  |   |       |  

Sports and Entertainment

The Corporations activities in the Sports and Entertainment segment include distribution of CDs and videos (Distribution Select); distribution of music to Internet download services (Select
Digital); music recording and video production (Musicor); recording of live concerts, production of concert videos and television commercials (Les Productions Select TV inc.), and concert promotion (Musicor Spectacles).

The Sports and Entertainment segment also includes two QMJHL hockey teams, the Armada de Blainville-Boisbriand
and the Remparts de Québec, as well as Event Management Gestev Inc. (Gestev), a Québec City sports and cultural events manager.

As well, the segment includes the activities of the Arena following ratification in 2011 of a 25-year agreement between Quebecor Media and Québec City
with respect to usage and naming rights to the Arena.

2014 operating results

Revenues:$60.9 million, a $9.3 million (-13.2%) decrease compared with 2013, due primarily to:



| |  | 16.3% decrease in music distribution revenues, primarily as a result of lower video and CD sales;
|- |  | -------------------------------------------------------------------------------------------------



| |  | 26.4% decrease in music production and promotion revenues due to the larger number of successful concerts and albums produced in 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  | Favourable revenue impact of the acquisition of Gestev on May 24, 2013, including its sporting events management, site management and marketing
activities.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



84



---

Adjusted operating loss:$3.4 million in 2014 compared with $1.1 million in 2013. The
$2.3 million unfavourable variance was due to the impact of the revenue decrease and the startup of new performance hall management operations.

Cash flows from operations

Cash flows from segment operations:Negative
$9.0 million in 2014 compared with negative $1.7 million in 2013 (Table 6). The $7.3 million unfavourable variance was due to the $4.9 million increase in additions to property, plant and equipment, partly reflecting
the impact of new performance hall management operations, and the $2.3 million increase in the adjusted operating loss.

Table 6:
Sports and Entertainment

Cash flows from operations

(in millions of CAN dollars)



|                                           |  |      |      |   |      |   |      |      |  |   |      |  
|------------------------------------------ |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                           |  | 2014 |      |   | 2013 |   |      | 2012 | 
|Adjusted operating (loss) income           |  | $    | (3.4 | ) |      | $ | (1.1 | )    |  | $ | 2.3  |  
|Additions to property, plant and equipment |  |      | (5.5 | ) |      |   | (0.6 | )    |  |   | (1.7 | )
|Additions to intangible assets             |  |      | (0.1 | ) |      |   |     |      |  |   |     |  
|                                           |  |      |      |   |      |   |      |      |  |   |      |  
|Cash flows from segment operations         |  | $    | (9.0 | ) |      | $ | (1.7 | )    |  | $ | 0.6  |  
|                                           |  |      |      |   |      |   |      |      |  |   |      |  



85



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2014/2013 FOURTH QUARTER COMPARISON

Analysis of consolidated results of Quebecor Media

Revenues:$989.4 million, a
$28.1 million (2.9%) increase.



| |  | Revenues increased in Telecommunications ($34.2 million or 4.6% of segment revenues) and in Media ($1.7 million or 0.8%).
|- |  | -------------------------------------------------------------------------------------------------------------------------



| |  | Revenues decreased in Sports and Entertainment ($1.3 million or -5.3%).
|- |  | -----------------------------------------------------------------------

Adjusted operating income:$354.1 million, a $5.3 million (-1.5%) decrease.



| |  | Adjusted operating income decreased in Media ($22.5 million or -71.2% of segment adjusted operating income) and at Head Office (-$2.5 million).
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  | Adjusted operating income increased in Telecommunications ($19.9 million or 6.1%).
|- |  | ----------------------------------------------------------------------------------



| |  | The change in the fair value of Quebecor Media stock options resulted in a $0.8 million unfavourable variance in the stock-based compensation charge in the fourth quarter of 2014 compared with the same period of 2013. The change in the fair value of Quebecor stock options resulted in a $1.2 million favourable variance in
the Corporations stock-based compensation charge in the fourth quarter of 2014.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net income attributable to shareholders:$46.6 million in the fourth quarter of 2014, compared with $61.3 million in the same
period of 2013, a $14.7 million decrease.



| |  | The decrease was due primarily to:
|- |  | ----------------------------------



| |  |  | $44.9 million unfavourable variance in the charge for restructuring of operations, impairment of assets and other special items (including $34.3
million without any tax consequences);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $10.5 million increase in the depreciation and amortization charge;
| | - |  | -------------------------------------------------------------------



| |  |  | $5.3 million decrease in adjusted operating income.
| | - |  | ---------------------------------------------------

Partially offset by:



| |  |  | $26.9 million favourable variance in gains and losses on valuation and translation of financial instruments;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | $9.0 million decrease in financial expenses;
| | - |  | --------------------------------------------



| |  |  | $5.1 million favourable variance in gains and losses from discontinued operations.
| | - |  | ----------------------------------------------------------------------------------

Depreciation and amortization charge:$173.7 million, a $10.5 million increase due essentially to the same factors as those noted above
in the 2014/2013 financial year comparison.

Financial expenses:$77.7 million, a $9.0 million decrease due essentially
to the same factors as those noted above in the 2014/2013 financial year comparison.

Loss on valuation and translation of
financial instruments:$5.2 million in the fourth quarter of 2014 compared with $32.1 million in the same period of 2013. The $26.9 million favourable variance was mainly due to the variance in the fair value of
early settlement options due to fluctuations in valuation assumptions, including interest rates and credit premiums implicit in the adjusted prices of the underlying instruments.

Charge for restructuring of operations, impairment of assets and other special items:$47.7 million in the fourth quarter of 2014, compared with $2.8 million in the same period of
2013, a $44.9 million unfavourable variance.



| |  | In the fourth quarter of 2014, the Telecommunications segment recorded a $1.0 million restructuring charge ($1.0 million in the same
period of 2013) and a $3.4 million charge for impairment of assets. The segment also recorded a $34.3 million charge (without any tax consequences), including interest, following a trial judgment against Videotron.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In the fourth quarter of 2014, a $2.3 million net charge for restructuring of operations was recorded in the Media segment in connection with staff-reduction programs ($1.5 million in the same period of 2013). In connection with these initiatives, a $0.1 million loss on disposal of assets was recognized in the fourth quarter of 2014
($0.6 million in the same period of 2013)
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



86



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| | and a $0.2 million reversal of the impairment charge on certain assets was also recognized in fourth quarter of 2013. The Media segment also recognized a $3.3 million asset
impairment charge on its broadcasting assets and a $2.6 million other special charge, primarily attributable to business acquisitions.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The other segments recorded a $0.7 million net charge for restructuring of operations, impairment of assets and other special items in the fourth
quarter of 2014 ($0.1 million reversal in the same period of 2013).
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income tax expense:$24.9 million in
the fourth quarter of 2014 (effective tax rate of 29.6%) compared with $23.7 million in the same period of 2013 (effective tax rate of 31.8%), a $1.2 million unfavourable variance. The effective tax rate is calculated considering
only taxable and deductible items.



| |  | The increase in the income tax expense was mainly due to the impact of the increase in taxable income.
|- |  | ------------------------------------------------------------------------------------------------------



| |  | The variance in the effective tax rate was due to the impact of the tax rate mix on the various components of the loss on valuation and translation of
financial instruments.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



87



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SEGMENTED ANALYSIS

Telecommunications

Revenues:$778.2 million, a $34.2 million
(4.6%) increase essentially due to the same factors as those noted above in the 2014/2013 financial year comparison.



| |  | Combined revenues from all cable television services decreased $8.1 million (-2.9%) to
$268.2 million.
|- |  | ------------------------------------------------------------------------------------------------------



| |  | Revenues from Internet access services increased $12.3 million (5.9%) to $222.2 million.
|- |  | ----------------------------------------------------------------------------------------



| |  | Revenues from cable telephony service increased $1.9 million (1.6%) to $120.6 million.
|- |  | --------------------------------------------------------------------------------------



| |  | Revenues from mobile telephony service increased $23.9 million (40.1%) to $83.5 million.
|- |  | ----------------------------------------------------------------------------------------



| |  | Revenues of Videotron Business Solutions increased $1.0 million (6.3%) to $16.8 million.
|- |  | ----------------------------------------------------------------------------------------



| |  | Revenues from customer equipment sales increased $5.8 million (54.2%) to $16.5 million.
|- |  | ---------------------------------------------------------------------------------------



| |  | Revenues from retail sales decreased $2.8 million (-5.5%) to $48.0 million.
|- |  | ---------------------------------------------------------------------------



| |  | Other revenues increased $0.3 million (13.6%) to $2.5 million.
|- |  | --------------------------------------------------------------

ARPU:$129.36 in fourth quarter 2014, compared with $121.22 in the same period of 2013, an $8.14 (6.7%) increase.

Customer statistics

Revenue-generating units 25,100 (0.5%) unit increase in the fourth quarter of 2014 compared with an increase of 46,700 in the same
period of 2013.

Cable television 14,000 (-0.8%) decrease in combined customer base for all of Videotrons cable
television services in the fourth quarter of 2014 compared with a decrease of 5,300 in the same period of 2013.



| |  | illico Digital TV: 12,700 (0.8%) subscriber increase in the fourth quarter of 2014 compared with an increase of 13,800 in the same period
of 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Analog cable TV: 26,700 subscriber decrease in the fourth quarter of 2014 compared with a decrease of 19,100 in the same period of 2013.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------

Cable Internet access 3,700 (0.2%) customer increase in the fourth quarter of 2014 compared with an increase
of 19,300 in the same period of 2013.

Cable telephony 7,000 (-0.5%) subscriber decrease in the fourth quarter of 2014
compared with an increase of 7,500 in the same period of 2013.

Mobile telephony service 42,400 (7.2%) increase
in subscriber connections in the fourth quarter of 2014 compared with an increase of 25,200 in the same period of 2013.

Adjusted
operating income:$348.6 million, a $19.9 million (6.1%) increase due primarily to:



| |  | impact of the revenue increase and the $7.2 million favourable retroactive adjustment arising from a correction to the subscription fee
calculation method, partially offset by the impact of the increase in the number of mobile devices sold at a loss and the increases in some operating expenses.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost/revenue ratio:Employee costs and purchases of goods and services for the Telecommunications segments operations, expressed as a percentage of revenues, were 55.2% in the fourth quarter
of 2014 compared with 55.8% in the same period of 2013. The decrease was mainly due to the impact of revenue growth (as the fixed component of operating costs does not fluctuate in proportion to revenues), partially offset by the impact of the
higher number of mobile devices sold at a loss.



88



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Media

Revenues:$227.0 million in the fourth quarter of 2014, an increase of $1.7 million (0.8%).



| |  | Newspaper publishing revenues decreased by $5.0 million (-7.0%).
|- |  | ----------------------------------------------------------------



| |  |  | Advertising revenues decreased 7.9%; circulation revenues decreased 4.6%; digital revenues decreased 15.0%; combined revenues from commercial
printing and other sources decreased 5.5%.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Revenues decreased by 5.9% at the urban dailies and by 25.9% at the portals.
| | - |  | ----------------------------------------------------------------------------



| |  | Broadcasting revenues increased by $12.0 million (11.3%), mainly because of:
|- |  | ----------------------------------------------------------------------------



| |  |  | increased subscription and advertising revenues at the specialty services, including TVA Sports, mainly because of the addition of NHL hockey
broadcasts;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | lower advertising revenues at TVA Network.
| | - |  | ------------------------------------------



| |  | Magazine publishing revenues decreased by $0.7 million (-4.2%), partly because of the impact of the decrease in advertising revenues and the
closure of some publications.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues of Quebecor Media Out of Home increased by $0.6 million (27.0%), primarily because of higher advertising revenues, including new digital
revenues.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Book distribution and publishing revenues increased by $2.0 million mainly due to:
|- |  | ----------------------------------------------------------------------------------



| |  |  | increased distribution revenues and increased volume in general literature and academic publishing.
| | - |  | ---------------------------------------------------------------------------------------------------

Adjusted operating income:$9.1 million in the fourth quarter of 2014, a $22.5 million
(-71.2%) decrease.



| |  | Adjusted operating income from newspaper publishing decreased by $9.0 million (-63.8%), primarily as a
result of:
|- |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | impact of decrease in revenues;
| | - |  | -------------------------------



| |  |  | $2.8 million favourable impact in 2013 of adjustments to the cost of post-retirement benefits;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | increased employee compensation.
| | - |  | --------------------------------



| |  | Adjusted operating income from broadcasting operations decreased by $13.5 million (-87.4%), mainly as a result of:
|- |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | increased content costs, partly as a result of higher expenditures at TVA Sports;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | impact of decrease in TVA Networks revenues.
| | - |  | ---------------------------------------------

Partially offset by:



| |  |  | impact of higher subscription and advertising revenues at the specialty channels.
| | - |  | ---------------------------------------------------------------------------------



| |  | Adjusted operating income from magazine publishing decreased by $0.2 million (-10.6%), mainly because of
the impact of the revenue decrease, partially offset by reductions in some operating expenses, including printing and production costs.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The operating loss of Quebecor Media Out of Home decreased by $0.4 million as a result of the increase in revenues.
|- |  | -------------------------------------------------------------------------------------------------------------------



| |  | Adjusted operating income from book distribution and publishing increased by $0.9 million, primarily as a result of the increase in revenues.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

Cost/revenue ratio:Employee costs and purchases of goods and services for the Media segments operations,
expressed as a percentage of revenues, were 96.0% in the fourth quarter of 2014 compared with 86.0% in the same period of 2013. The increase was mainly due to the impact of the revenue decrease (as the fixed component of operating costs
does not fluctuate in proportion to the decrease in revenues), the favourable adjustment to post-retirement benefits in 2013, and higher broadcasting content costs.



89



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Sports & Entertainment

Revenues:$23.2 million in the fourth quarter of 2014, a $1.3 million (-5.3%) decrease.



| |  | Revenues from music production and promotion decreased by 52.4% due to the impact of the cancellation of the 2014 edition of the Les Stars
chantent Noël concert and the larger number of successful albums released in the fourth quarter of 2013.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 2.0% decrease in music distribution revenues, primarily as a result of lower CD sales.
|- |  | --------------------------------------------------------------------------------------

Adjusted operating income:$0.6 million in the fourth quarter of 2014, a $0.2 million decrease due primarily to the impact of the
revenue decrease and the startup of new performance hall management operations.



90



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2013/2012 FINANCIAL YEAR COMPARISON

Analysis of consolidated results of Quebecor Media

Revenues:$3.65 billion, a
$94.2 million (2.7%) increase.



| |  | Revenues increased in Telecommunications ($101.7 million or 3.7% of segment revenues).
|- |  | --------------------------------------------------------------------------------------



| |  | Revenues decreased in Media ($16.5 million or -2.0%) and Sports and Entertainment
($6.7 million or -8.7%).
|- |  | ----------------------------------------------------------------------------------------------------------

Adjusted operating income:$1.38 billion, an $84.3 million (6.5%) increase.



| |  | Adjusted operating income increased in Telecommunications ($74.0 million or 6.1% of segment adjusted operating income) and Media
($21.8 million or 35.0%).
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Adjusted operating income decreased in Sports and Entertainment ($3.4 million) and at Head Office ($8.1 million). The decrease at Head Office
was due primarily to the unfavourable variance in the fair value of stock options.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The change in the fair value of Quebecor Media stock options resulted in a $0.2 million favourable variance in the
stock-based compensation charge in 2013 compared with 2012. The change in the fair value of Quebecor stock options resulted in a $4.8 million unfavourable variance in the Corporations stock-based
compensation charge in 2013.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net loss attributable to shareholders:$159.6 million in 2013, compared with
net income attributable to shareholders of $234.6 million in 2012, a $394.2 million unfavourable variance.



| |  | The unfavourable variance was due primarily to:
|- |  | -----------------------------------------------



| |  |  | $381.3 million unfavourable variance in losses and gains on valuation and translation of financial instruments;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | $76.1 million increase in the depreciation and amortization charge;
| | - |  | -------------------------------------------------------------------



| |  |  | $64.2 million unfavourable variance in the loss related to discontinued operations;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | $25.3 million increase in financial expenses;
| | - |  | ---------------------------------------------



| |  |  | $22.9 million unfavourable variance in the charge for restructuring of operations, impairment of assets and other special items;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | $12.6 million unfavourable variance in losses on debt refinancing.
| | - |  | ------------------------------------------------------------------

Partially offset by:



| |  |  | $84.3 million increase in adjusted operating income;
| | - |  | ----------------------------------------------------



| |  |  | $7.7 million favourable variance in the charge for impairment of goodwill and intangible assets.
| | - |  | ------------------------------------------------------------------------------------------------

Depreciation and amortization charge:$628.1 million in 2013, a $76.1 million increase essentially due to the impact of the significant
capital expenditures made since 2011 in the Telecommunications segment, including depreciation of capital expenditures related to cable Internet access services and modernization of the wired network, plus the impact of promotional strategies
focused on equipment leasing.

Financial expenses:$360.8 million, a $25.3 million increase due mainly to higher indebtedness
resulting from the leveraged repurchase in October 2012 of Quebecor Media shares held by CDP Capital dAmérique Investissement inc., a subsidiary of Caisse de dépôt et placement du Québec. This factor was
partially offset by the impact of lower interest rates on long-term debt as a result of debt refinancing at more advantageous rates.

Loss on valuation and translation of financial instruments:$244.4 million in 2013 compared with a $136.9 million gain in 2012. The $381.3 million unfavourable variance was
mainly due to the variance in the fair value of early settlement options caused by fluctuations in valuation assumptions, including interest rates and credit premiums implicit in the adjusted prices of the underlying instruments. The variance was
also due to the reversal of the fair value of early settlement options on the Videotron Senior Notes redeemed on July 2, 2013 and the Quebecor Media Senior Notes redeemed on August 30, 2013.

Charge for restructuring of operations, impairment of assets and other special items:$11.6 million in 2013, compared with an
$11.3 million reversal in 2012, a $22.9 million unfavourable variance.



91



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| |  | In 2013, the Telecommunications segment recorded a $1.8 million restructuring charge ($1.0 million in 2012).
|- |  | ------------------------------------------------------------------------------------------------------------



| |  | In 2013, a $6.7 million net charge for restructuring of operations was recorded in the Media segment with respect to staff-reduction programs ($0.3 million in 2012). As part of those initiatives, a $0.1 million gain on disposal of assets was recorded in 2013 ($0.1 million loss in 2012), and a
$2.1 million charge for impairment of assets was also recorded in 2013.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 2012, the Media segment recorded a $12.9 million gain on disposal of businesses as a result of the sale by TVA Group of its interest in
the specialty channels mysteryTV and The Cave.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The other segments recorded a net charge for restructuring of operations, impairment of assets and other special items of $1.1 million
in 2013 ($0.2 million in 2012).
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Charge for impairment of goodwill and intangible assets:$35.3 million in 2013 compared with $43.0 million in 2012, a $7.7 million favourable variance.



| |  | In the third quarter of 2013, Quebecor Media performed impairment tests on the Newspapers, Books and Music CGUs. Accordingly, the following
impairment charges were recorded:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Media segment recognized a $14.5 million non-cash goodwill impairment charge, without any tax consequences, in its Newspapers CGU and an
$11.9 million non-cash goodwill impairment charge, without any tax consequences, in its Books CGU;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Quebecor Media recorded an $8.9 million non-cash goodwill impairment charges without any tax consequences in its Music CGU.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  | In the third quarter of 2012, Quebecor Media performed impairment tests on its Newspapers, Music and Book Publishing & Distribution CGUs,
in view of the difficult market conditions in those industries. Accordingly, the Media segment recorded a $16.5 million non-cash goodwill impairment charge in its Newspaper CGU (without any tax
consequences), and Quebecor Media recorded a $12.0 million non-cash goodwill impairment charge (without any tax consequences) in its Music CGU.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | As well, the magazine publishing operating costs were adversely affected by new tariffs adopted in 2012 with respect to business contributions for
costs related to waste recovery services provided by Québec municipalities. Accordingly, the Corporation reviewed its business plan for the segment and determined that goodwill was no longer fully recoverable. A $14.5 million non-cash goodwill impairment charge (without any tax consequences) was therefore recorded in 2012.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Loss on debt refinancing:$18.9 million in 2013 compared with $6.3 million in 2012, a $12.6 million unfavourable variance.



| |  | On July 2, 2013, Videotron redeemed US$380.0 million principal amount of its outstanding 9.125% Senior Notes, issued on
April 15, 2008 and maturing in April 2018, and settled the related hedges. On August 30, 2013, Quebecor Media redeemed US$265.0 million principal amount of its outstanding 7.75% Senior Notes, issued in January 2006 and
maturing in March 2016, and settled the related hedges. As a result, a total loss of $18.9 million was recorded in the consolidated statement of income in 2013, including a $14.5 million gain previously recorded in Other
comprehensive income.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 2012, Videotron redeemed all of the 6.875% Senior Notes issued in October 2003 and November 2004, and maturing in January 2014, in the
aggregate principal amount of US$395.0 million. During the same period, Quebecor Media redeemed US$580.0 million principal amount of its 7.75% Senior Notes, issued in January 2006 and October 2007, and maturing in March 2016, and
settled some of the related hedges. Finally, Quebecor Media prepaid the outstanding balance of its term loan B credit facility for a cash consideration of $153.9 million and settled the related hedges in January 2013. The
transactions generated a total $6.3 million loss on debt refinancing.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



92



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Income tax expense:$36.7 million in 2013 (effective tax rate of 32.4%) compared with
$143.0 million (effective tax rate of 26.1%) in 2012, a $106.3 million favourable variance. The effective tax rate is calculated considering only taxable and deductible items.



| |  | The favourable variance in the income tax expense was mainly due to the decrease in taxable income for tax purposes.
|- |  | --------------------------------------------------------------------------------------------------------------------



| |  | The variance in the effective tax rate was due to the impact of the tax rate mix on the various components of the gain or loss on valuation and
translation of financial instruments and the loss on debt refinancing.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



93



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SEGMENTED ANALYSIS

Telecommunications

Revenues:$2.86 billion, a $101.7 million
(3.7%) increase.



| |  | Combined revenues from all cable television services increased $11.0 million (1.0%) to $1.09 billion, due primarily to higher revenues
from the leasing of digital set top boxes, increased subscriptions to the HDTV service and increased pay-per-view orders, partially offset by the impact of the net
decrease in the customer base.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from Internet access services increased $45.9 million (5.9%) to $818.4 million. The favourable variance was mainly due to
customer growth, higher revenues from Internet access resellers, increased usage and other related revenues.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from cable telephony service increased $18.9 million (4.2%) to $473.8 million, primarily as a result of customer growth,
increases in some rates and growth in the number of business lines.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from mobile telephony service increased $49.1 million (28.6%) to $220.7 million, essentially due to customer growth.
|- |  | -----------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from Videotron Business Solutions decreased $1.4 million (-2.2%) to $63.5 million.
|- |  | -------------------------------------------------------------------------------------------



| |  | Revenues from equipment sales to customers decreased $6.9 million (-15.9%) to $36.5 million, mainly because of campaigns promoting cable
television equipment leasing, partially offset by increased revenues from mobile telephony equipment.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues from retail sales decreased by $12.4 million (-7.7%) to $149.1 million due to decreased sales at Archambault Group stores, partly as
a result of lower sales of CDs and videos, and at Le SuperClub Vidéotron, partly as a result of lower fees from franchises and store closures.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Other revenues were down $2.5 million (-22.3%) to $8.7 million.
|- |  | ---------------------------------------------------------------

ARPU:$118.03 in 2013 compared with $111.57 in 2012, a $6.46 (5.8%) increase.

Customer statistics

Revenue-generating units As of December 31, 2013, the total number of revenue-generating units stood at 5,183,900, an increase
of 164,800 (3.3%) from the end of 2012 (Table 3). In 2012, the number of revenue-generating units increased by 261,400.

Cable television The combined customer base for all of Videotrons cable television services decreased by 29,900 (-1.6%) in 2013 (compared with a decrease of 6,500 in 2012) (Table 3). As of December 31, 2013, Videotron had 1,825,100 subscribers to its cable television services. The household and
business penetration rate (number of subscribers as a proportion of the total 2,742,500 homes and businesses passed by Videotrons network as of the end of December 2013, up from 2,701,200 one year earlier) was 66.5%
versus 68.7% a year earlier.



| |  | As of December 31, 2013, the number of subscribers to the illico Digital TV service stood at 1,531,400, an increase of 46,800
or 3.2% in 2013, compared with an increase of 83,800 in 2012. As of December 31, 2013, illico Digital TV had a household and business penetration rate of 55.8% versus 55.0% a year earlier.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The customer base for analog cable television services decreased by 76,700 (-20.7%) in 2013 (compared with a decrease of 90,300
in 2012), partly as a result of customer migration to illico Digital TV.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cable Internet access The
number of subscribers to cable Internet access services stood at 1,506,000 at December 31, 2013, an increase of 62,000 (4.3%) in 2013, compared with an increase of 84,400 in 2012 (Table 3). At December 31, 2013,
Videotrons cable Internet access services had a household and business penetration rate of 54.9%, compared with 53.5% a year earlier.

Cable telephony service The number of subscribers to cable telephony service stood at 1,348,500 at December 31, 2013, an increase of 32,200 (2.4%) in 2013, compared with
an increase of 70,400 in 2012 (Table 3). At December 31, 2013, the cable telephony service had a household and business penetration rate of 49.2% versus 48.7% a year earlier.



94



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Mobile telephony service As of December 31, 2013, the number of subscriber connections to
the mobile telephony service stood at 504,300, an increase of 100,500 (24.9%) in 2013, compared with an increase of 113,100 in 2012 (Table 3).

Adjusted operating income:$1.29 billion, a $74.0 million (6.1%) increase.



| |  | The increase in adjusted operating income was mainly due to:
|- |  | ------------------------------------------------------------



| |  |  | impact of higher revenues;
| | - |  | --------------------------



| |  |  | adjustment to provision for CRTC licence fees to align with the CRTCs billing period.
| | - |  | --------------------------------------------------------------------------------------



| |  |  | $3.8 million decrease in stock-based compensation charge.
| | - |  | ---------------------------------------------------------

Partially offset by:



| |  |  | increases in some operating expenses, mainly related to engineering costs and customer support costs;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | decrease in adjusted operating income from retail operations due to the decrease in revenues;
| | - |  | ---------------------------------------------------------------------------------------------

Cost/revenue ratio:Employee costs and purchases of goods and services for the Telecommunications segments operations, expressed as a
percentage of revenues, were 54.8% in 2013 compared with 55.8% in 2012.



| |  | The decrease was mainly due to the impact of revenue growth (as the fixed component of operating costs does not fluctuate in proportion to revenues)
and the impact of adjustment to CRTC licence fees.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cash flows from segment operations:$722.1 million in 2013
compared with $477.3 million in 2012 (Table 4).



| |  | The $244.8 million increase was primarily due to a $165.1 million decrease in additions to property, plant and equipment and in additions to
intangible assets, mainly reflecting lower investment in the 4G network and in cable network modernization, and the $74.0 million increase in adjusted operating income.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Media

Revenues:$828.3 million in 2013, a $16.5 million (-2.0%) decrease.



| |  | Newspaper publishing revenues decreased by $32.7 million (-10.7%).
|- |  | ------------------------------------------------------------------



| |  |  | Revenues decreased by $7.2 million because of the closure of specialty publications under restructuring initiatives.
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | On a same-store basis, advertising revenues decreased 11.0%; circulation revenues decreased 2.2%; digital revenues decreased 16.4%; combined
revenues from commercial printing and other sources decreased 5.5%.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Revenues decreased by 8.5% at the urban dailies and by 31.2% at the portals.
| | - |  | ----------------------------------------------------------------------------



| |  | Broadcasting revenues decreased by $5.0 million (-1.3%) due to:
|- |  | ---------------------------------------------------------------



| |  |  | lower advertising revenues at TVA Network;
| | - |  | ------------------------------------------



| |  |  | discontinuation of operations of TVA Boutiques in the third quarter of 2013.
| | - |  | ----------------------------------------------------------------------------

Partially offset by:



| |  |  | $6.1 million favourable retroactive adjustment resulting from the adjustment to retransmission royalties for the years 2009
to 2013;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increased subscription revenues at the specialty channels, attributable largely to the LCN, TVA Sports, MOI&cie, SUN News, addikTVand Prise 2 channels;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increased advertising revenues at the specialty channels, including addikTV, Prise 2 and CASA.
| | - |  | ----------------------------------------------------------------------------------------------



| |  | Magazine publishing revenues decreased by $0.3 million (-0.5%). The decrease in newsstand and advertising revenues was partially offset by the
favourable impact on revenues of the acquisition of Les Publications Charron & Cie in July 2013.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Revenues of Quebecor Media Out of Home, which began operations in August 2012, increased by $7.2 million in 2013.
|- |  | -----------------------------------------------------------------------------------------------------------------



95



---

| |  | Book distribution and publishing revenues were flat.
|- |  | ----------------------------------------------------



| |  |  | The addition of Charron Éditeur sales and the increase in academic sales were offset by lower revenues from distribution to mass retailers and
bookstores.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted operating income:$84.0 million in 2013, a $21.8 million (35.0%) increase.



| |  | Adjusted operating income from newspaper publishing increased by $6.2 million (26.5%), primarily as a result of:
|- |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | $15.6 million favourable impact on adjusted operating income of restructuring initiatives and other reductions in operating expenses;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $2.8 million favourable impact in 2013 of adjustments to the cost of post-retirement benefits.
| | - |  | ----------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | impact of decrease in revenues on a same-store basis.
| | - |  | -----------------------------------------------------



| |  | Adjusted operating income from broadcasting operations increased by $10.3 million (33.1%), mainly as a result of:
|- |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | favourable impact of retroactive adjustment of retransmission royalties;
| | - |  | ------------------------------------------------------------------------



| |  |  | decrease in SUN News adjusted operating loss due primarily to reduced labour and content costs;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | decrease in TVA Networks operating costs due to containment of content, production and other costs, and an adjustment to provision for CRTC
licence fees to align with the CRTCs billing period.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | impact of decrease in TVA Networks revenues.
| | - |  | ---------------------------------------------



| |  | Adjusted operating income from magazine publishing increased by $3.7 million, mainly as a result of:
|- |  | ----------------------------------------------------------------------------------------------------



| |  |  | favourable impact on 2013 comparative analysis of recognition in the first quarter of 2012 of a $2.3 million charge for the years 2010
and 2011 related to business contributions to costs related to waste recovery services;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | impact of acquisition of Les Publications Charron & Cie.
| | - |  | --------------------------------------------------------



| |  | Activities of Quebecor Media Out of Home, which began operations in August 2012, generated a $1.9 million increase in adjusted operating loss due
to start-up costs.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Adjusted operating income from book distribution and publishing increased by $2.4 million (34.9%), due primarily to decreases in some book
distribution and publishing operating expenses.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost/revenue ratio:Employee costs and purchases of goods and
services for the Media segments operations, expressed as a percentage of revenues, were 89.9% in 2013 compared with 92.6% in 2012. The decrease was mainly due to the favourable impact on the 2013 results of operating cost-reduction
initiatives, the favourable retroactive adjustment in 2013 to retransmission royalties, the favourable impact in 2013 of post-retirement benefit costs, and recognition in 2012 of retroactive costs related to waste recovery services, partially
offset by the impact of the fixed component of operating costs, which does not fluctuate in proportion to the decrease in revenues.



96



---

Cash flows from segment operations:$49.4 million in 2013 compared with $46.7 million in
2012 (Table 5).



| |  | The $2.7 million increase was mainly due to a $21.8 million increase in adjusted operating income, partially offset by a $20.8 million
decrease in proceeds from disposal of assets.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sports and Entertainment

Revenues:$70.2 million in 2013, a $6.7 million (-8.7%) decrease compared with 2012.



| |  | 10.9% decrease in distribution revenues, mainly because of lower CD sales;
|- |  | --------------------------------------------------------------------------



| |  | 22.2% decrease in music production and promotion revenues, mainly reflecting the greater number of concerts produced in 2012.
|- |  | -----------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  | Favourable revenue impact of the acquisition of Gestev on May 24, 2013, including its sporting events management, site management and marketing
activities.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted operating loss:$1.1 million in 2013 compared with $2.3 million adjusted operating
income in 2012. The $3.4 million unfavourable variance was mainly due to the impact of the revenue decrease and the startup of new performance hall management operations.

Cash flows from segment operations:Negative $1.7 million in 2013 compared with positive $0.6 million in 2012 (Table 6).



| |  | The $2.3 million unfavourable variance was caused by the $3.4 million unfavourable variance in adjusted operating income, partially offset by
the $1.1 million decrease in additions to property, plant and equipment.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



97



---

CASH FLOWS AND FINANCIAL POSITION

This section provides an analysis of sources and uses of cash flows, as well as a financial position analysis as of the balance sheet date. This section should be read in conjunction with the discussions
on trends under Trend Information above and on the Corporations financial risks under Financial Instruments and Financial Risk below.

Operating activities

2014 financial year

Cash flows provided by operating activities:$990.3 million in 2014, compared with $923.4 million in 2013.



| |  | The $66.9 million favourable variance was mainly due to:
|- |  | --------------------------------------------------------



| |  |  | $88.8 million favourable net change in non-cash balances related to operations, mainly because of a favourable variance in accounts payable and
accrued liabilities, and an increase in the provision for a legal dispute, partially offset by an unfavourable variance in current income taxes payable;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $60.7 million increase in adjusted operating income in the Telecommunications segment;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | $33.3 million decrease in the cash portion of financial expenses.
| | - |  | -----------------------------------------------------------------

Partially offset by:



| |  |  | $38.9 million increase in the cash portion of the charge for restructuring of operations, impairment of assets and other special items;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $37.5 million decrease in adjusted operating income in the Media segment;
| | - |  | -------------------------------------------------------------------------



| |  |  | $33.7 million unfavourable variance in current income taxes.
| | - |  | ------------------------------------------------------------

In 2014, the favourable impact of the timing of transactions on non-cash items related to operating activities, increased profitability in the Telecommunications segment and the refinancing of some debt
at lower interest rates had a favourable impact on cash flows. However, cash flows provided by the Media segment continued to be affected by the impact of the shift to digital and challenging market conditions. Reduced tax benefits available for the
deferral of income tax disbursements also had a negative impact on cash flows.

2013 financial year

Cash flows provided by operating activities:$923.4 million in 2013 compared with $1.06 billion in 2012.



| |  | The $133.1 million unfavourable variance was mainly due to:
|- |  | -----------------------------------------------------------



| |  |  | $139.7 million unfavourable net change in non-cash balances related to operations, mainly because of unfavourable variances in accounts payable
and accrued charges at Videotron, as well as provisions for restructuring of operations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $38.0 million unfavourable variance in current income taxes;
| | - |  | ------------------------------------------------------------



| |  |  | $27.7 million increase in cash portion of financial expenses.
| | - |  | -------------------------------------------------------------

Partially offset by:



| |  |  | $74.0 million increase in adjusted operating income in the Telecommunications segment;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | $21.8 million increase in adjusted operating income in the Media segment.
| | - |  | -------------------------------------------------------------------------

The unfavourable impact of the timing of transactions on non-cash items related to operating activities, combined with a reduction in tax benefits
available for the deferral of income tax disbursements, negatively affected cash flows provided by operating activities. Interest disbursements on higher indebtedness resulting from the repurchase of Quebecor Media shares in the fourth quarter
of 2012 also had a negative impact. However, profit growth in the Telecommunications and Media segments and the refinancing of some debt at lower rates had a favourable impact on cash flows.

Working capital:$105.0 million at December 31, 2014, compared with $95.2 million at December 31, 2013, a
$9.8 million increase. The impact of the recognition of assets held for sale under current assets (mainly reflecting the sale of the



98



---

English-language newspaper businesses) was offset by the matching reduction in non-cash balances related to operating activities. Similarly, recognition of
long-term debt maturing in 2015 under short-term liabilities as at December 31, 2014 was offset by recognition of debt and financial instruments maturing in 2014 under short-term liabilities as at December 31, 2013.

Investing activities

2014
financial year

Additions to property, plant and equipment:$645.5 million in 2014 compared with $562.2 million
in 2013. Spending on the LTE network in the Telecommunications segment essentially accounted for the $83.3 million increase.

Additions to intangible assets:$317.3 million in 2014, compared with $77.8 million in 2013, a $239.5 million increase. The
Telecommunications segment accounted for most of the increase, mainly reflecting payments totalling $217.4 million in 2014 for the acquisition of 700 MHz spectrum licences, compared with $15.9 million in 2013.

Proceeds from disposal of assets: $5.4 million in 2014 compared with $13.2 million in 2013.



| |  | The Telecommunications segment accounted for most of the proceeds from disposal of assets recorded in 2014 and 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------

Business acquisitions:$132.3 million in 2014 compared with $7.7 million in 2013.



| |  | Business acquisitions in 2014 reflect, among other things, acquisition of substantially all of the assets of Global Vision in the Media segment, and of
the Remparts de Québec, a QMJHL hockey team, in the Sports and Entertainment segment.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Business acquisitions in 2013 mainly reflect acquisition of Les Publications Charron & Cie and Charron Éditeur in the Media segment and
acquisition of Gestev in the Sports and Entertainment segment.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Disposal of businesses:$193.5 million in 2014
compared with $59.2 million in 2013.



| |  | Disposals of businesses in 2014 consisted of the sale of the Nurun subsidiary to the French company Publicis Groupe for $125.0 million in cash,
less disposed-of cash in the amount of $18.1 million. $8.2 million was also received in connection with certain adjustments to the transaction. Also, Quebecor Media closed the sale of the
74 Québec community weeklies to Transcontinental Interactif for a total cash consideration of $78.4 million.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Disposal of businesses: $59.2 million in 2013 from the sale of Jobboom and Réseau Contact to Mediagrif Interactive
Technologies Inc.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------

2013 financial year

Additions to property, plant and equipment:$562.2 million in 2013 compared with $701.8 million in 2012. The $139.6 million decrease was due primarily to:



| |  | $139.9 million decrease in additions to property, plant and equipment in the Telecommunications segment, mainly related to lower spending on the
4G network and cable network modernization.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Additions to intangible assets:$77.8 million in 2013 compared
with $88.6 million in 2012. The Telecommunications segment accounted for the largest part of the $10.8 million decrease.

Proceeds from disposal of assets:$13.2 million in 2013 compared with $28.3 million in 2012.



| |  | The Telecommunications segment accounted for most of the $13.2 million in proceeds from disposal of assets recorded in 2013.
|- |  | ----------------------------------------------------------------------------------------------------------------------------



| |  | The 2012 figure included $21.0 million recorded in the Broadcasting segment in connection with the sale of TVA Groups interest in the
specialty channels mysteryTV and The Cave.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Business acquisitions:$7.7 million in 2013, consisting mainly of
the acquisition of Les Publications Charron & Cie and Charron Éditeur in the Media segment and the acquisition of Gestev in the Sports and Entertainment segment, compared with $1.6 million in 2012.



99



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Disposal of businesses: $59.2 million in 2013, reflecting the sale of Jobboom and
Réseau Contact to Mediagrif Interactive Technologies, compared with $0.8 million in 2012.

Free cash flows from
continuing operating activities

2014 financial year

Free cash flows from continuing operating activities:$250.3 million in 2014, compared with $312.5 million in 2013 (Table 7).



| |  | The $62.2 million unfavourable variance was due to:
|- |  | ---------------------------------------------------



| |  |  | $83.3 million increase in additions to property, plant and equipment;
| | - |  | ---------------------------------------------------------------------



| |  |  | $38.0 million increase in additions to intangible assets (excluding acquisition of spectrum licences);
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | $7.8 million decrease in proceeds from disposal of assets.
| | - |  | ----------------------------------------------------------

Partially offset by:



| |  |  | $66.9 million favourable variance in cash flows provided by continuing operating activities.
| | - |  | --------------------------------------------------------------------------------------------

2013 financial year

Free cash flows
from continuing operating activities:$312.5 million in 2013, compared with $294.4 million in 2012 (Table 7).



| |  | The $18.1 million favourable variance was due to:
|- |  | -------------------------------------------------



| |  |  | $139.6 million decrease in additions to property, plant and equipment;
| | - |  | ----------------------------------------------------------------------



| |  |  | $26.7 million decrease in additions to intangible assets (excluding acquisition of spectrum licences).
| | - |  | ------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | $133.1 million unfavourable variance in cash flows provided by continuing operating activities;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | $15.1 million decrease in proceeds from disposal of assets.
| | - |  | -----------------------------------------------------------



100



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Table 7

Cash flows provided by continuing operating activities reported in the consolidated financial statements and free cash flows from continuing operating activities

(in millions of CAN dollars)



|                                                                                                                                                                  |  |      |         |   |      |   |         |      |  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                                                                                                  |  | 2014 |         |   | 2013 |   |         | 2012 | 
|Adjusted operating income:                                                                                                                                        |  |      |         |   |      |   |         |      |  |   |         |  
|Telecommunications                                                                                                                                                |  | $    | 1,354.9 |   |      | $ | 1,294.2 |      |  | $ | 1,220.2 |  
|Media                                                                                                                                                             |  |      | 46.5    |   |      |   | 84.0    |      |  |   | 62.2    |  
|Sports and Entertainment                                                                                                                                          |  |      | (3.4    | ) |      |   | (1.1    | )    |  |   | 2.3     |  
|Head Office                                                                                                                                                       |  |      | (3.7    | ) |      |   | 0.1     |      |  |   | 8.2     |  
|                                                                                                                                                                  |  |      |         |   |      |   |         |      |  |   |         |  
|                                                                                                                                                                  |  |      | 1,394.3 |   |      |   | 1,377.2 |      |  |   | 1,292.9 |  
|Cash interest expense1                                                                                                                                            |  |      | (315.6  | ) |      |   | (348.9  | )    |  |   | (321.2  | )
|Cash portion of charge for restructuring of operations, impairment of assets and other special items2                                                             |  |      | (47.6   | ) |      |   | (8.7    | )    |  |   | (1.5    | )
|Current income taxes                                                                                                                                              |  |      | (117.1  | ) |      |   | (83.4   | )    |  |   | (45.4   | )
|Other                                                                                                                                                             |  |      | (0.6    | ) |      |   | (0.9    | )    |  |   | 3.9     |  
|Net change in non-cash balances related to operations                                                                                                             |  |      | 76.9    |   |      |   | (11.9   | )    |  |   | 127.8   |  
|                                                                                                                                                                  |  |      |         |   |      |   |         |      |  |   |         |  
|Cash flows provided by continuing operating activities                                                                                                            |  |      | 990.3   |   |      |   | 923.4   |      |  |   | 1,056.5 |  
|                                                                                                                                                                  |  |      |        
|Additions to property, plant and equipment and additions to intangible assets, less proceeds from disposal of assets (excluding
spectrum licences acquisitions) : |  |      |         |   |      |   |         |      |  |   |         |  
|Telecommunications                                                                                                                                                |  |      | (689.4  | ) |      |   | (572.1  | )    |  |   | (742.9  | )
|Media                                                                                                                                                             |  |      | (41.5   | ) |      |   | (34.6   | )    |  |   | (15.5   | )
|Sports and Entertainment                                                                                                                                          |  |      | (5.6    | ) |      |   | (0.6    | )    |  |   | (1.7    | )
|Head Office                                                                                                                                                       |  |      | (3.5    | ) |      |   | (3.6    | )    |  |   | (2.0    | )
|                                                                                                                                                                  |  |      |         |   |      |   |         |      |  |   |         |  
|                                                                                                                                                                  |  |      | (740.0  | ) |      |   | (610.9  | )    |  |   | (762.1  | )
|                                                                                                                                                                  |  |      |         |   |      |   |         |      |  |   |         |  
|Free cash flows from continuing operating activities                                                                                                              |  | $    | 250.3   |   |      | $ | 312.5   |      |  | $ | 294.4   |  
|                                                                                                                                                                  |  |      |         |   |      |   |         |      |  |   |         |  

|1 | Interest on long-term debt, interest on net defined benefit liability, impact of foreign currency translation on short-term monetary items and other
financial expenses (see note 4 in the consolidated financial statements).
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Restructuring of operations and other (see note 6 in the consolidated financial statements).
|- | --------------------------------------------------------------------------------------------

Financing activities

2014
financial year

Consolidated debt(long-term debt plus bank borrowings): $230.3 million increase in 2014. $349.5 million
favourable net variance in assets and liabilities related to derivative financial instruments.



| |  | Summary of debt increases in 2014:
|- |  | ----------------------------------



| |  |  | issuance by Videotron on April 9, 2014 of US$600.0 million aggregate principal amount of Senior Notes for net proceeds
of $654.5 million, net of financing fees of $7.8 million. The Notes bear interest at 5.375% and mature on June 15, 2024;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | estimated $266.9 million unfavourable impact of exchange rate fluctuations. The increase in this item is offset by a decrease in the liability (or
increase in the asset) related to cross-currency swap agreements entered under Derivative financial instruments;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $11.9 million increase in debt due to changes in fair value related to hedged interest rate risk and the variance in the fair value of early
settlement options.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



101



---

| |  | Summary of year-to-date debt reductions:
|- |  | ----------------------------------------



| |  |  | early redemption and withdrawal by Videotron on April 24, 2014 of US$260.0 million aggregate principal amount of 9.125% Senior Notes
issued on March 5, 2009 and maturing on April 15, 2018;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | redemption and early repayment by Quebecor Media on April 25, 2014 of its outstanding 7.75% Senior Notes issued on October 5, 2007
and maturing on March 15, 2016, in the aggregate principal amount of US$380.0 million;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | current payments totalling $25.0 million on Quebecor Medias and Videotrons credit facilities.
| | - |  | -----------------------------------------------------------------------------------------------



| |  | Assets and liabilities related to derivative financial instruments totalled a net asset of $298.1 million at December 31, 2014, compared
with a net liability of $51.4 million at December 31, 2013, a $349.5 million net favourable variance due to:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | favourable impact of exchange rate fluctuations on the value of derivative financial instruments;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | settlement at maturity on January 15, 2014 of liabilities related to Videotrons hedges, which had been repurposed to cover a portion of the
term of 5.0% Senior Notes in the notional amount of US$543.1 million issued on March 14, 2012 and maturing in 2022.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | unwinding of Quebecor Medias hedging contracts in an asset position in connection with the redemption and early withdrawal on
April 25, 2014 of US$380.0 million aggregate principal amount of 7.75% Senior Notes;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | unfavourable impact of interest rate trends in Canada, compared with the United States, on the fair value of derivative financial instruments.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  | On November 3, 2014, TVA Group modified the terms and conditions of its bank credit facilities to increase the size of its revolving credit
facility from $100.0 million to $150.0 million, to extend their term by two years until February 24, 2019, and to replace the existing $75.0 million term loan maturing on December 11, 2014 by a new term loan of an
equivalent amount maturing on November 3, 2019. TVA Group also amended some terms and conditions to increase its financial flexibility. Accordingly, TVA Group granted a security on all of its movable assets and an immovable hypothec
on its Head Office building.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 11, 2015, Videotron issued a notice of redemption for all of its outstanding 6.375% Senior Notes due December 15, 2015 in aggregate
principal amount of US$175.0 million at a redemption price of 100.000% of their principal amount. The redemption date is April 10, 2015.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 18, 2015, TVA Group announced the completion of its rights offering, whereby TVA Group will receive aggregate gross proceeds of approximately
$110.0 million from the issuance of 19,434,629 Class B Non-Voting Shares of TVA Group. The closing of the rights offering will be on March 20, 2015. Under the rights offering, Quebecor Media will subscribe to 17,300,259 Class B Non-Voting
Shares of TVA Group at a total cost of $97.9 million and its aggregate equity interest in TVA Group will increase from 51.5% to 68.4%.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2013 financial year

Consolidated debt(long-term debt plus bank borrowings):
$547.3 million increase in 2013. $211.5 million favourable net variance in assets and liabilities related to derivative financial instruments.



| |  | Summary of debt increases in 2013:
|- |  | ----------------------------------



| |  |  | $400.0 million aggregate principal amount of Senior Notes issued by Videotron on June 17, 2013 for net proceeds
of $394.8 million, net of financing fees of $5.2 million. The Notes bear 5.625% interest and mature on June 15, 2025;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | US$350 million senior secured term loan B entered into by Quebecor Media on August 1, 2013 and issued at a price
of 99.50% on August 29, 2013 for net proceeds of $358.4 million, net of financing fees of $1.9 million. The term loan bears interest at London Interbank Offered Rate (LIBOR), subject to a LIBOR floor
of 0.75%, plus a 2.50% premium. It provides for quarterly amortization payments totalling 1.00% per annum of the original principal amount, with the balance payable on August 17, 2020;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $245.6 million increase in debt due to the reduction in the fair value of early settlement options, which are presented on the balance sheet as a
reduction of debt. The reduction in fair value was due to fluctuations in valuation assumptions, including interest rates and credit premiums implicit in the adjusted prices of the underlying instruments, as well as to the reversal of the fair value
of early settlement options on the Videotron Senior Notes redeemed on July 2, 2013, and on the Quebecor Media Senior Notes redeemed on August 30, 2013;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



102



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| |  |  | Estimated $228.8 million unfavourable impact of exchange rate fluctuations. The increase in this item was offset by a decrease in the liability
(or increase in the asset) related to cross-currency swap agreements entered under Derivative financial instruments.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Summary of main debt reductions in 2013:
|- |  | ----------------------------------------



| |  |  | Early redemption and withdrawal by Videotron on July 2, 2013 of US$380.0 million principal amount of 9.125% Senior Notes issued on
April 15, 2008 and maturing in April 2018;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Early redemption by Quebecor Media on August 30, 2013 of US$265.0 million aggregate principal amount of its outstanding 7.75% Senior
Notes issued on January 17, 2006 and maturing in March 2016;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Current payments totalling $22.2 million on Quebecor Medias and Videotrons credit facilities.
| | - |  | -----------------------------------------------------------------------------------------------



| |  | Assets and liabilities related to derivative financial instruments totalled a net liability of $262.9 million at December 31, 2012,
compared with a net liability of $51.4 million at December 31, 2013. The $211.5 million net favourable variance was due to:
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Favourable impact of exchange rate fluctuations on the value of derivative financial instruments;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | Settlement at maturity of liabilities related to Quebecor Medias foreign currency exposure hedges on its term loan B credit
facility, which was prepaid in full in December 2012;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Settlement of liability related to Quebecor Medias hedging contracts in connection with the redemption on August 30, 2013 of
US$265.0 million aggregate principal amount of Quebecor Medias 7.75% Senior Notes.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Partially offset by:



| |  |  | Unfavourable impact of interest rate trends in Canada, compared with the United States, on the fair value of derivative financial instruments;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Unwinding of Videotrons hedging contracts in an asset position in connection with the redemption on July 2, 2013 of
US$380.0 million principal amount of 9.125% Senior Notes.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On April 16, 2013, Quebecor Media announced a public exchange offer for the exchange of the entirety of its outstanding 5.75% Senior Notes
maturing on January 15, 2023 for an equivalent principal amount of Notes registered pursuant to the Securities Act of 1933. The exchange of almost all the Notes (99.9%) was completed by May 14, 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In June 2013, Quebecor Media amended its $300.0 million revolving credit facility to extend the maturity date to January 2017 and amend
certain terms and conditions.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In June 2013, Videotron also amended its $575.0 million revolving credit facility to extend the maturity date to July 2018 and amend certain
terms and conditions.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial position

Net available liquidity:$1.27 billion at December 31, 2014 for Quebecor Media and its wholly owned subsidiaries, consisting of $390.3 million in cash and $874.7 million in
available unused lines of credit.

Consolidated debt:$5.21 billion at December 31, 2014, a $230.3 million increase
compared with December 31, 2013; $349.5 million favourable net variance in assets and liabilities related to derivative financial instruments (see Financing activities above).



| |  | Consolidated debt essentially consisted of Videotrons $2.93 billion debt ($2.40 billion at December 31, 2013),
TVA Groups $78.2 million debt ($74.6 million at December 31, 2013) and Quebecor Medias $2.20 billion debt ($2.50 billion at December 31, 2013).
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



103



---

At December 31, 2014, minimum principal payments on long-term debt in the coming years were as follows:

Table 8

Minimum
principal payments on Quebecor Medias long-term debt

12 months ending December 31

(in millions of CAN dollars)



|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2015                |  | $ | 229.1   | 
|2016                |  |   | 18.6    | 
|2017                |  |   | 20.9    | 
|2018                |  |   | 105.5   | 
|2019                |  |   | 56.9    | 
|2020 and thereafter |  |   | 4,819.0 | 
|                    |  |   |         | 
|Total               |  | $ | 5,250.0 | 
|                    |  |   |         | 

The weighted average term of Quebecor Medias consolidated debt was approximately 7.3 years as of
December 31, 2014 (7.0 years as of December 31, 2013). The debt consisted of approximately 83.2% fixed-rate debt (82.6% as of December 31, 2013) and
16.8% floating-rate debt (17.4% as of December 31, 2013).

Management of the
Corporation believes that cash flows and available sources of financing should be sufficient to cover committed cash requirements for capital investments, working capital, interest payments, debt repayments, pension plan contributions, and dividend
payments (or distribution of capital). The Corporation has access to cash flows generated by its subsidiaries through dividends (or distributions) and cash advances paid by its wholly owned subsidiaries. The Corporation believes it will be able
to meet future debt maturities, which are fairly staggered over the coming years.

Pursuant to their financing agreements, the Corporation and
its subsidiaries are required to maintain certain financial ratios. The key indicators listed in these financing agreements include debt service coverage ratio and debt ratio (long-term debt over adjusted
operating income). At December 31, 2014, the Corporation and its subsidiaries were in compliance with all required financial ratios.

Dividends:Total of $100.0 million in dividends declared and paid by the Board of Directors of Quebecor Media in 2014
($100.0 million in 2013).

2500 MHz and AWS-3 spectrum auction

In January 2015, Videotron contracted new unsecured on-demand credit facilities, under which letters of credit were issued and filed with Industry Canada as pre-auction financial deposits in respect to
its application to participate to the 2500 MHz and AWS-3 spectrum auctions. Under Industry Canadas published rules with respect to communications during the auction process, it is strictly forbidden
for the Corporation to disclose the amount of the letters of credit, which may be withdrawn by Videotron at any time prior to the auctions commencement.

On March 6, 2015, Quebecor Media and its Videotron subsidiary announced that they had acquired four 30 MHz licences in the auction for AWS-3
commercial mobile spectrum at a total price of $31.8 million. The process will resume on April 14, 2015 with the auction for spectrum in the 2500 MHz band.



104



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Analysis of consolidated balance sheet at December 31, 2014

Table 9

Consolidated balance sheet of
Quebecor Media

Analysis of main variances between December 31, 2014 and December 31, 2013

(in millions of CAN dollars)



|                                                                   |  |                  |         |   |                  |   |         |            |  |   |                            |   |  |                                                                                                                                      
|------------------------------------------------------------------ |  | ---------------- | ------- | - | ---------------- | - | ------- | ---------- |  | - | -------------------------- | - |  | -------------------------------------------------------------------------------------------------------------------------------------
|                                                                   |  | December 31,2014 |         |   | December 31,2013 |   |         | Difference |  |   | Main reason for difference
|                                                                   |  |                  |         |  
|Assets                                                             |  |                  |         |   |                  |   |         |            |  |   |                            |   |  |                                                                                                                                      
|                                                                   |  |                  |         |  
|Cash and cash equivalents                                          |  | $                | 395.3   |   |                  | $ | 476.6   |            |  | $ | (81.3                      | ) |  | Cash flows used in investing and financing activities exceeded cash flows provided by operating activities                           
|Accounts receivable                                                |  |                  | 448.4   |   |                  |   | 565.7   |            |  |   | (117.3                     | ) |  | Impact of current variances in activity and impact of recognition of net assets held for sale                                        
|Net assets held for sale1                                          |  |                  | 300.2   |   |                  |   | 67.9    |            |  |   | 232.3                      |   |  | Sale of English-language newspaper businesses, offset by the closing of the sale of 74 Québec community weeklies in the Media segment
|Property, plant and equipment                                      |  |                  | 3,382.9 |   |                  |   | 3,382.4 |            |  |   | 0.5                        |   |  | Additions to property, plant and equipment were offset by depreciation and reclassification of net assets held for sale              
|Intangible assets                                                  |  |                  | 945.8   |   |                  |   | 824.8   |            |  |   | 121.0                      |   |  | Purchase of 700 MHz spectrum licences by Videotron, minus impairment of broadcasting licence in the Media segment                    
|Goodwill                                                           |  |                  | 2,714.6 |   |                  |   | 3,061.5 |            |  |   | (346.9                     | ) |  | Impairment of goodwill in the Media segment and impact of recognition of net assets held for sale                                    
|                                                                   |  |                  |         |  
|Liabilities                                                        |  |                  |         |   |                  |   |         |            |  |   |                            |   |  |                                                                                                                                      
|                                                                   |  |                  |         |  
|Long-term debt, including short-term portion and bank indebtedness |  |                  | 5,206.3 |   |                  |   | 4,976.0 |            |  |   | 230.3                      |   |  | See Financing activities                                                                                                           
|Derivative financial instruments2                                  |  |                  | (298.1  | ) |                  |   | 51.4    |            |  |   | (349.5                     | ) |  | See Financing activities                                                                                                           



|1 | Current assets less current liabilities.
|- | ----------------------------------------

|2 | Current and long-term liabilities less long-term assets.
|- | --------------------------------------------------------



105



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ADDITIONAL INFORMATION

Contractual Obligations

At December 31, 2014, material contractual obligations of
operating activities included: capital repayment and interest payments on long-term debt; operating lease arrangements; capital asset purchases and other commitments; and obligations related to derivative
financial instruments, less estimated future receipts on derivative financial instruments. Table 10 below shows a summary of these contractual obligations.

Table 10

Contractual obligations of Quebecor Media as of December 31, 2014

(in millions of CAN dollars)



|                                                                 |  |       |         |   |             |   |       |           |  |   |           |  |  |                |       |   |  |   |         |  
|---------------------------------------------------------------- |  | ----- | ------- | - | ----------- | - | ----- | --------- |  | - | --------- |  |  | -------------- | ----- | - |  | - | ------- | -
|                                                                 |  | Total |         |   | Under1 year |   |       | 1-3 years |  |   | 3-5 years |  |  | 5 yearsor more |      
|Long-term debt1                                                  |  | $     | 5,250.0 |   |             | $ | 229.1 |           |  | $ | 39.5      |  |  | $              | 162.4 |   |  | $ | 4,819.0 |  
|Interest payments2                                               |  |       | 2,179.5 |   |             |   | 264.4 |           |  |   | 578.6     |  |  |                | 561.4 |   |  |   | 775.1   |  
|Operating leases                                                 |  |       | 328.6   |   |             |   | 53.9  |           |  |   | 83.0      |  |  |                | 56.2  |   |  |   | 135.5   |  
|Additions to property, plant and equipment and other commitments |  |       | 1,465.4 |   |             |   | 274.9 |           |  |   | 361.9     |  |  |                | 199.3 |   |  |   | 629.3   |  
|Derivative financial instruments3                                |  |       | (308.9  | ) |             |   | 4.7   |           |  |   | 51.0      |  |  |                | (8.2  | ) |  |   | (356.4  | )
|                                                                 |  |       |         |   |             |   |       |           |  |   |           |  |  |                |       |   |  |   |         |  
|Total contractual obligations                                    |  | $     | 8,914.6 |   |             | $ | 827.0 |           |  | $ | 1,114.0   |  |  | $              | 971.1 |   |  | $ | 6,002.5 |  
|                                                                 |  |       |         |   |             |   |       |           |  |   |           |  |  |                |       |   |  |   |         |  



|1 | The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest rate risk,
embedded derivatives and financing fees.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Estimated interest payable on long-term debt, based on interest rates, hedging of interest rates and hedging of foreign exchange rates as of
December 31, 2014.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|3 | Estimated future receipts, net of disbursements, related to foreign exchange hedging using derivative financial instruments.
|- | ----------------------------------------------------------------------------------------------------------------------------

Significant commitments included in Table 10

Videotron leases sites for its LTE network under operating lease arrangements and has contracted long-term commitments to acquire equipment for a total future
consideration of $184.3 million.

In 2011, Quebecor Media announced an agreement with Québec City for the construction and
management of the Arena. As at December 31, 2014, the balance of these commitments stood at $111.8 million.

In 2012 and 2014,
Quebecor Media signed 20-year agreements to install, maintain and advertise on bus shelters belonging to the Montréal and Laval transit commissions. As at December 31, 2014, the balance of these commitments stood
at $110.0 million.

In May 2013, Videotron and Rogers Communications announced a 20-year agreement to build out and operate an
LTE network in Québec and in the Ottawa area. As at December 31, 2014, the balance of these commitments stood at $193.3 million.

In the normal course of business, the Media segment, through TVA Group, contracts commitments regarding broadcast rights for television programs, sporting events and films, as well as distribution rights
for audiovisual content. As at December 31, 2014, the balance of these commitments stood at $901.8 million.

In November 2014,
the Media segment, through TVA Group, reached an agreement to acquire 15 magazines in Canada for a cash consideration of $55.5 million. The transaction was authorized by the Competition Bureau on March 2, 2015.



106



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Pension plan contributions

The expected employer contributions to the Corporations defined benefit pension plans and post-retirement benefits plans will be $48.3 million in 2015 (contributions of
$60.6 million were paid in 2014).

Related Party Transactions

The following describes transactions in which the Corporation and its directors, executive officers and affiliates are involved. The Corporation believes that each of the transactions described below was
on terms no less favourable to Quebecor Media than could have been obtained from independent third parties.

Operating transactions

During the year ended December 31, 2014, the Corporation and its subsidiaries made purchases and incurred rent charges with the
parent corporation and affiliated corporations in the amount of $11.7 million ($12.1 million in 2013 and $14.4 million in 2012), which are included in purchase of goods and services. The Corporation and its subsidiaries made
sales to affiliated corporations in the amount of $3.3 million ($3.5 million in 2013 and $3.8 million in 2012). These transactions were accounted for at the consideration agreed between the parties.

Corporate reorganization

On
June 28, 2012, the CRTC approved the sale of a 2% interest in SUN News by TVA Group to Sun Media Corporation. The transaction closed on June 30, 2012 and, as a result, Sun Media Corporation holds a 51% interest and TVA Group a
49% interest in SUN News.

Management arrangements

The parent corporation has entered into management arrangements with the Corporation. Under these management arrangements, the parent corporation and the Corporation provide management services to each
other on a cost-reimbursement basis. The expenses subject to reimbursement include the salaries of the Corporations executive officers, who also serve as executive officers of the parent corporation.

In 2014, the Corporation received an amount of $2.2 million, which is included as a reduction in employee costs
($1.8 million in 2013 and $1.7 million in 2012), and incurred management fees of $2.0 million ($2.0 million in 2013 and $1.1 million in 2012) with its shareholders.

Tax transactions

In 2014, the parent
corporation transferred $12.5 million of non-capital losses ($29.0 million in 2013 and $43.4 million in 2012) to the Corporation and its subsidiaries in exchange for a total cash consideration of $3.1 million
($6.9 million in 2013 and $10.2 million in 2011). This transaction was concluded on terms equivalent to those that prevail on an arms length basis and was accounted for at the consideration agreed between the parties. As a
result, the Corporation recorded a reduction of $0.3 million in its income tax expense in 2014 ($0.9 million in 2013 and $1.5 million in 2012).

Off-Balance Sheet Arrangements

Guarantees

In the normal course of business, the Corporation enters into numerous agreements containing guarantees, including the following:

Operating leases

The Corporation has
guaranteed a portion of the residual values of certain assets under operating leases for the benefit of the lessor. Should the Corporation terminate these leases prior to term (or at the end of the lease terms) and should the fair value of the
assets be less than the guaranteed residual value, then the Corporation must, under certain conditions, compensate the lessor for a portion of the shortfall. In addition, the Corporation has provided guarantees to the lessor of certain premises
leases with expiry dates through 2018. Should the lessee default under the agreement, the Corporation must, under certain conditions, compensate the lessor. As of December 31, 2014, the maximum exposure with respect to these
guarantees was $14.5 million and no liability has been recorded in the consolidated balance sheet.



107



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Business and asset disposals

In the sale of all or part of a business or an asset, in addition to possible indemnification relating to failure to perform covenants and breach of representations or warranties, the Corporation may
agree to indemnify against claims related to the past conduct of the business. Typically, the term and amount of such indemnification will be limited by the agreement. The nature of these indemnification agreements prevents the Corporation from
estimating the maximum potential liability it could be required to pay to guaranteed parties. The Corporation has not accrued any amount in respect of these items in the consolidated balance sheet.

Outsourcing companies and suppliers

In
the normal course of its operations, the Corporation enters into contractual agreements with outsourcing companies and suppliers. In some cases, the Corporation agrees to provide indemnifications in the event of legal procedures initiated against
them. In other cases, the Corporation provides indemnification to counterparties for damages resulting from the outsourcing companies and suppliers. The nature of the indemnification agreements prevents the Corporation from estimating the maximum
potential liability it could be required to pay. No amount has been accrued in the consolidated balance sheet with respect to these indemnifications.

Other

One subsidiary of the Corporation, acting as a franchiser, has provided guarantees
should franchisees, in their retail activities, default certain purchase agreements. The nature of the indemnification agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay. No amount has
been accrued in the consolidated balance sheet with respect to these guarantees.

Financial Instruments and Financial Risk Management

The Corporations financial risk management policies have been established in order to identify and analyze the risks faced by the
Corporation, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and in the Corporations activities.

The Corporation uses a number of financial instruments, mainly cash and cash equivalents, accounts receivable,
long-term investments, bank indebtedness, trade payables, accrued liabilities, long-term debt and derivative financial instruments. As a result of their use of financial instruments, the Corporation and its
subsidiaries are exposed to credit risk, liquidity risk and market risks relating to foreign exchange fluctuations and interest rate fluctuations.

In order to manage its foreign exchange and interest rate risks, the Corporation and its subsidiaries use derivative financial instruments (i) to set in CAN dollars future payments on debts
denominated in U.S. dollars (interest and principal) and certain purchases of inventories and other capital expenditures denominated in a foreign currency, (ii) to achieve a targeted balance of fixed- and floating-rate debts, and
(iii) to lock-in the value of certain derivative financial instruments through offsetting transactions. The Corporation and its subsidiaries do not intend to settle their derivative financial instruments prior to their maturity as none of these
instruments is held or issued for speculative purposes.



108



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Table 11

Description of derivative financial instruments

As of December 31, 2014

(in millions of dollars)

Foreign exchange forward contracts



|                 |  |                                                   |        |  |                     |     |       |                      |  |     |       | 
|---------------- |  | ------------------------------------------------- | ------ |  | ------------------- | --- | ----- | -------------------- |  | --- | ----- | 
|Maturity         |  | CAN dollaraverage exchangerate per oneU.S. dollar |        |  | Notionalamount sold |     |       | Notionalamountbought | 
|Quebecor Media   |  |                                                   |        |  |                     |     |       |                      |  |     |       | 
|20161            |  |                                                   | 1.0154 |  |                     | US$ | 320.0 |                      |  | $   | 324.9 | 
|Videotron        |  |                                                   |        |  |                     |     |       |                      |  |     |       | 
|Less than 1 year |  |                                                   | 1.1198 |  |                     | $   | 106.3 |                      |  | US$ | 94.9  | 
|20172            |  |                                                   | 1.1204 |  |                     | US$ | 260.0 |                      |  | $   | 291.3 | 

Interest rate swaps



|              |  |                |      |  |             |  |                           |           |  |  |              |   |  |  |                            | 
|------------- |  | -------------- | ---- |  | ----------- |  | ------------------------- | --------- |  |  | ------------ | - |  |  | -------------------------- | 
|Maturity      |  | Notionalamount |      |  | Pay/receive |  |                           | Fixedrate |  |  | Floatingrate |  
|TVA Group     |  |                |      |  |             |  |                           |           |  |  |              |   |  |  |                            | 
|December 2017 |  | $              | 44.0 |  |             |  | Pay fixed/Receivefloating |           |  |  | 2.03         | % |  |  | Bankersacceptances1 month | 

Cross-currency interest rate swaps



|                              |  |                    |              |  |                      |     |       |                                                    |  |  |                                                                            |   |  |  |        | 
|----------------------------- |  | ------------------ | ------------ |  | -------------------- | --- | ----- | -------------------------------------------------- |  |  | -------------------------------------------------------------------------- | - |  |  | ------ | 
|Hedged item                   |  | Hedging instrument |             
|                              |  | Period covered     |              |  | Notional      amount |     |       | Annualinterest rateon notionalamount inCAN dollars |  |  | CAN dollarexchange rateon interest andcapital paymentsper 
one U.S. dollar |  
|Quebecor Media                |  |                    |              |  |                      |     |       |                                                    |  |  |                                                                            |   |  |  |        | 
|5.750% Senior Notes due 20231 |  |                    | 2007 to 2016 |  |                      | US$ | 320.0 |                                                    |  |  | 7.69                                                                       | % |  |  | 0.9977 | 
|5.750% Senior Notes due 2023  |  |                    | 2016 to 2023 |  |                      | US$ | 431.3 |                                                    |  |  | 7.27                                                                       | % |  |  | 0.9792 | 
|5.750% Senior Notes due 2023  |  |                    | 2012 to 2023 |  |                      | US$ | 418.7 |                                                    |  |  | 6.85                                                                       | % |  |  | 0.9759 | 
|Term loan B                 |  |                    | 2013 to 2020 |  |                      | US$ | 345.6 |                                                    |  |  | Bankersacceptances3 months
+2.77                                          | % |  |  | 1.0346 | 



109



---

Cross-currency interest rate swaps (continued)



|                              |  |                    |              |  |                |     |  |                                                     |  |  |                                                                            |  |  |  |                                   |   |  |  |        | 
|----------------------------- |  | ------------------ | ------------ |  | -------------- | --- |  | --------------------------------------------------- |  |  | -------------------------------------------------------------------------- |  |  |  | --------------------------------- | - |  |  | ------ | 
|Hedged item                   |  | Hedging instrument |             
|                              |  | Periodcovered      |              |  | Notionalamount |     |  | Annual interestrate on notionalamount inCAN dollars |  |  | CAN dollarexchange rateon interest andcapital paymentsper 
one U.S. dollar | 
|Videotron                     |  |                    |              |  |                |     |  |                                                     |  |  |                                                                            |  |  |  |                                   |   |  |  |        | 
|6.375% Senior Notes due 2015  |  |                    | 2005 to 2015 |  |                | US$ |  |                                                     |  |  | 175.0                                                                      |  |  |  | 5.98                              | % |  |  | 1.1781 | 
|9.125% Senior Notes due 2018  |  |                    | 2008 to 2018 |  |                | US$ |  |                                                     |  |  | 75.0                                                                       |  |  |  | 9.64                              | % |  |  | 1.0215 | 
|5.000% Senior Notes due 2022  |  |                    | 2014 to 2022 |  |                | US$ |  |                                                     |  |  | 543.1                                                                      |  |  |  | 6.01                              | % |  |  | 0.9983 | 
|5.000% Senior Notes due 2022  |  |                    | 2012 to 2022 |  |                | US$ |  |                                                     |  |  | 256.9                                                                      |  |  |  | 5.81                              | % |  |  | 1.0016 | 
|5.375% Senior Notes due 20242 |  |                    | 2008 to 2017 |  |                | US$ |  |                                                     |  |  | 260.0                                                                      |  |  |  | 9.21                              | % |  |  | 1.2965 | 
|5.375% Senior Notes due 2024  |  |                    | 2014 to 2024 |  |                | US$ |  |                                                     |  |  | 158.6                                                                      |  |  |  | Bankersacceptances3 months
+2.67 | % |  |  | 1.1034 | 
|5.375% Senior Notes due 2024  |  |                    | 2017 to 2024 |  |                | US$ |  |                                                     |  |  | 441.4                                                                      |  |  |  | 5.62                              | % |  |  | 1.1039 | 



|1 | The Corporation initially entered into these cross-currency interest rate swaps to hedge the foreign currency risk exposure under its 7.75% Senior
Notes due 2016 redeemed in 2012. These swaps are now used to set in CAN dollars all coupon payments through 2016 on US$431.3 million of notional amount under its 5.75% Senior Notes due 2023 and issued on October 11, 2012. In
conjunction with the repurposing of these swaps, the Corporation has entered into US$320.0 million offsetting foreign exchange forward contracts to lock-in the value of its hedging position related to the
March 15, 2016 notional exchange.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2 | Videotron initially entered into these cross-currency interest rate swaps to hedge the foreign currency risk exposure under its 9.125% Senior
Notes due 2018 redeemed in 2014. These swaps are now used to set in CAN dollars all coupon payments through 2017 on US$441.4 million of notional amount under its 5.375% Senior Notes due 2024 and issued on April 9, 2014. In conjunction
with the repurposing of these swaps, Videotron has entered into US$260.0 million offsetting foreign exchange forward contracts to lock-in the value of its hedging position related to the December 15, 2017 notional exchange.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Certain cross-currency interest rate swaps entered into by the Corporation and its subsidiaries include an option that
allows each party to unwind the transaction on a specific date at the then settlement amount.

The gains on valuation and translation of
financial instruments for 2014, 2013 and 2012 are summarized in Table 12.

Table 12

Loss (gain) on valuation and translation of financial instruments

(in millions of CAN dollars)



|                                                                                                                                          |  |      |      |   |      |   |       |      |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                                                                                                                          |  | 2014 |      |   | 2013 |   |       | 2012 | 
|Loss (gain) on embedded derivatives related to long term debt and derivative financial instruments for which hedge accounting is
not used |  | $    | 7.9  |   |      | $ | 173.2 |      |  | $ | (197.5 | )
|(Gain) loss on reversal of embedded derivatives upon debt redemption                                                                      |  |      | (1.1 | ) |      |   | 72.9  |      |  |   | 61.4   |  
|Gain on the ineffective portion of cash flow hedges                                                                                       |  |      | (0.5 | ) |      |   | (1.7  | )    |  |   | (1.1   | )
|(Gain) loss on the ineffective portion of fair value hedges                                                                               |  |      | (3.2 | ) |      |   |      |      |  |   | 0.3    |  
|                                                                                                                                          |  |      |      |   |      |   |       |      |  |   |        |  
|                                                                                                                                          |  | $    | 3.1  |   |      | $ | 244.4 |      |  | $ | (136.9 | )
|                                                                                                                                          |  |      |      |   |      |   |       |      |  |   |        |  

A $14.2 million gain on cash flow hedges was recorded under Other comprehensive income in relation to
cash flow hedging relationships in 2014 (loss of $45.1 million in 2013 and a gain of $33.1 million in 2012).



110



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Fair value of financial instruments

The fair value of long-term debt is estimated based on quoted market prices when available or on valuation models. When the Corporation uses valuation models, the fair value is estimated using discounted
cash flows using year-end market yields or the market value of similar instruments with the same maturity.

The fair value of derivative financial instruments recognized on the consolidated balance sheets is estimated as per the Corporations valuation models. These models project future cash flows and
discount the future amounts to a present value using the contractual terms of the derivative instrument and factors observable in external market data, such as period-end swap rates and foreign exchange rates.
An adjustment is also included to reflect non-performance risk impacted by the financial and economic environment prevailing at the date of the valuation in the recognized measure of the fair value of the derivative instruments by applying a credit
default premium estimated using a combination of observable and unobservable inputs in the market to the net exposure of the counterparty or the Corporation.

The fair value of early settlement options recognized as embedded derivatives is determined by option pricing models using market inputs, including volatility, discount factors and underlying instruments
adjusted implicit interest rate and credit premium.

The carrying value and fair value of long-term debt and derivative financial instruments
as of December 31, 2014 and 2013 are as follows:

Table 13

Fair value of long-term debt and derivative financial instruments

(in millions of CAN
dollars)



|                                    |  |                   |          |   |                   |   |          |               |  |   |           |   |  |   |          |  
|----------------------------------- |  | ----------------- | -------- | - | ----------------- | - | -------- | ------------- |  | - | --------- | - |  | - | -------- | -
|                                    |  | December 31, 2014 |          |   | December 31, 2013 |  
|Asset (liability)                   |  | Carryingvalue     |          |   | Fairvalue         |   |          | Carryingvalue |  |   | Fairvalue |  
|Long-term debt1,2                   |  | $                 | (5,250.0 | ) |                   | $ | (5,368.1 | )             |  | $ | (5,040.2  | ) |  | $ | (5,099.6 | )
|Derivative financial instruments3   |  |                   |          |   |                   |   |          |               |  |   |           |   |  |   |          |  
|Early settlement options            |  |                   | 8.2      |   |                   |   | 8.2      |               |  |   | 14.5      |   |  |   | 14.5     |  
|Foreign exchange forward contracts4 |  |                   | 4.2      |   |                   |   | 4.2      |               |  |   | 1.8       |   |  |   | 1.8      |  
|Interest rate swaps                 |  |                   | (0.5     | ) |                   |   | (0.5     | )             |  |   |          |   |  |   |         |  
|Cross-currency interest rate swaps4 |  |                   | 294.4    |   |                   |   | 294.4    |               |  |   | (53.2     | ) |  |   | (53.2    | )



|1 | The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest risk,
embedded derivatives and financing fees.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | The fair value of the long-term debt does not include the fair value of early settlement options, which is presented separately in the table.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------

|3 | The fair value of derivative financial instruments designated as hedges is an asset position of $298.6 million as of December 31, 2014
(an asset position of $18.6 million as of December 31, 2013).
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4 | The value of foreign exchange forward contracts entered into to lock-in the value of existing hedging positions is netted from the value of the offset
financial instruments.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Due to the judgment used in applying a wide range of acceptable techniques and estimates in
calculating fair value amounts, fair values are not necessarily comparable among financial institutions or other market participants and may not be realized in an actual sale or on the immediate settlement of the instrument.

Credit risk management

Credit risk is
the risk of financial loss to the Corporation if a customer or counterparty to a financial asset fails to meet its contractual obligations.

In the normal course of business, the Corporation continuously monitors the financial condition of its customers and reviews the credit history of each
new customer. As of December 31, 2014, no customer balance represented a significant portion of the Corporations consolidated trade receivables. The Corporation establishes an allowance for doubtful accounts based on the specific
credit risk of its customers and historical trends. As of December 31, 2014, 8.5% of trade receivables were 90 days past their billing date (9.8% as of December 31, 2013) of which 57.3% had an allowance for doubtful
accounts (46.5% as of December 31, 2013).



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The following table shows changes to the allowance for doubtful accounts for the years ended
December 31, 2014 and 2013:



|                                         |  |      |       |   |      |   |       |  
|---------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                                         |  | 2014 |       |   | 2013 |  
|Balance as of beginning of year          |  | $    | 28.4  |   |      | $ | 29.6  |  
|Charged to income                        |  |      | 32.1  |   |      |   | 41.3  |  
|Utilization                              |  |      | (34.5 | ) |      |   | (42.5 | )
|Reclassification to assets held for sale |  |      | (4.2  | ) |      |   |      |  
|                                         |  |      |       |   |      |   |       |  
|Balance as of end of year                |  | $    | 21.8  |   |      | $ | 28.4  |  
|                                         |  |      |       |   |      |   |       |  

The Corporation believes that its product lines and the diversity of its customer base are instrumental in reducing its
credit risk, as well as the impact of fluctuations in product-line demand. The Corporation does not believe that it is exposed to an unusual level of customer credit risk.

As a result of their use of derivative financial instruments, the Corporation and its subsidiaries are exposed to the risk of non-performance by a third party. When
the Corporation and its subsidiaries enter into derivative contracts, the counterparties (either foreign or Canadian) must have credit ratings at least in accordance with the Corporations risk management policy and are subject to concentration
limits. These credit ratings and concentration limits are monitored on an ongoing basis but at least quarterly.

Liquidity risk management

Liquidity risk is the risk that the Corporation and its subsidiaries will not be able to meet their financial obligations as they fall due
or the risk that those financial obligations will have to be met at excessive cost. The Corporation and its subsidiaries manage this exposure through staggered debt maturities. The weighted average term of the Corporations consolidated debt
was approximately 7.3 years as of December 31, 2014 (7.0 years as of December 31, 2013) (see also Contractual Obligations above).

Market risk

Market risk is the risk that changes in market prices due to foreign exchange
rates, interest rates and/or equity prices will affect the value of the Corporations financial instruments. The objective of market risk management is to mitigate and control exposures within acceptable parameters while optimizing the return
on risk.

Foreign currency risk

Most of the Corporations consolidated revenues and expenses, other than interest expense on U.S.-dollar-denominated
debt, purchases of set-top boxes, handsets and cable modems and certain capital expenditures, are received or denominated in CAN dollars. A significant portion of the interest, principal and premium, if
any, payable on its debt is payable in U.S. dollars. The Corporation and its subsidiaries have entered into transactions to hedge the foreign currency risk exposure on their
U.S.-dollar-denominated debt obligations outstanding as of December 31, 2014, to hedge their exposure on certain purchases of
set-top boxes, handsets, cable modems and capital expenditures, and to lock-in the value of certain derivative financial instruments through offsetting transactions. Accordingly, the Corporations
sensitivity to variations in foreign exchange rates is economically limited.



112



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The following table summarizes the estimated sensitivity on income and Other comprehensive income, before
income tax, of a variance of $0.10 in the year-end exchange rate of a CAN dollar per one U.S. dollar as of December 31, 2014:



|                                                                                                |  |        |      |   |                          |   |       |  
|----------------------------------------------------------------------------------------------- |  | ------ | ---- | - | ------------------------ | - | ----- | -
|Increase (decrease)                                                                             |  | Income |      |   | Othercomprehensiveincome |  
|                                                                                                |  |       
|Increase of $0.10                                                                               |  |        |      |   |                          |   |       |  
|U.S.-dollar-denominated accounts payable                                                        |  | $      | (1.0 | ) |                          | $ |      |  
|Gain on valuation and translation of financial instruments and derivative financial instruments |  |        | 2.7  |   |                          |   | 49.5  |  
|                                                                                                |  |       
|Decrease of $0.10                                                                               |  |        |      |   |                          |   |       |  
|U.S.-dollar-denominated accounts payable                                                        |  |        | 1.0  |   |                          |   |      |  
|Gain on valuation and translation of financial instruments and derivative financial instruments |  |        | (2.7 | ) |                          |   | (49.5 | )

Interest rate risk

Some of the Corporations and its subsidiaries bank credit facilities bear interest at floating rates based on the following reference rates: (i) Bankers acceptance rate,
(ii) LIBOR, (iii) Canadian prime rate, and (iv) U.S. prime rate. The Senior Notes issued by the Corporation and its subsidiaries bear interest at fixed rates. The Corporation and its subsidiaries have entered into cross-currency interest rate swap agreements in order to manage cash flow risk exposure. As of December 31, 2014, after taking into account the hedging instruments,
long-term debt was comprised of 83.2% fixed-rate debt (82.6% in 2013) and 16.8% floating-rate debt (17.4% in 2013).

The estimated sensitivity on interest payments, of a 100 basis-point variance in the year-end Canadian Bankers acceptance rate as of December 31, 2014 is $8.2 million.

The estimated sensitivity on income and Other comprehensive income, before income tax, of a 100 basis-point
variance in the discount rate used to calculate the fair value of financial instruments as of December 31, 2014, as per the Corporations valuation models, is as follows:



|                             |  |        |      |   |                          |   |       |  
|---------------------------- |  | ------ | ---- | - | ------------------------ | - | ----- | -
|Increase (decrease)          |  | Income |      |   | Othercomprehensiveincome |  
|Increase of 100 basis points |  | $      | 0.8  |   |                          | $ | (22.2 | )
|Decrease of 100 basis points |  |        | (0.8 | ) |                          |   | 22.2  |  

Capital management

The Corporations primary objective in managing capital is to maintain an optimal capital base in order to support the capital requirements of its various businesses, including growth opportunities.

In managing its capital structure, the Corporation takes into account the asset characteristics of its subsidiaries and planned requirements
for funds, leveraging their individual borrowing capacities in the most efficient manner to achieve the lowest cost of financing. Management of the capital structure involves the issuance of new debt, the repayment of existing debt using cash flows
generated by operations, and the level of distributions to shareholders. The Corporation has not significantly changed its strategy regarding the management of its capital structure since the last financial year.

The Corporations capital structure is composed of equity, bank indebtedness, long-term debt, net assets and liabilities related to derivative
financial instruments, less cash and cash equivalents. The capital structure as of December 31, 2014 and 2013 is as follows:



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Table 14

Capital structure of Quebecor Media

(in millions of CAN dollars)



|                                 |  |      |         |   |      |   |         |  
|-------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                 |  | 2014 |         |   | 2013 |  
|Bank indebtedness                |  | $    | 4.5     |   |      | $ |        |  
|Long-term debt                   |  |      | 5,201.8 |   |      |   | 4,976.0 |  
|Derivative financial instruments |  |      | (298.1  | ) |      |   | 51.4    |  
|Cash and cash equivalents        |  |      | (395.3  | ) |      |   | (476.6  | )
|                                 |  |      |         |   |      |   |         |  
|Net liabilities                  |  |      | 4,512.9 |   |      |   | 4,550.8 |  
|Equity                           |  | $    | 1,885.3 |   |      | $ | 1,956.8 |  
|                                 |  |      |         |   |      |   |         |  

The Corporation is not subject to any externally imposed capital requirements other than certain restrictions under the
terms of its borrowing agreements, which relate, among other things, to permitted investments, inter-corporation transactions, the declaration and payment of dividends or other distributions.

Contingencies

In February 2012, a
settlement was reached in legal proceedings against some of the Corporations subsidiaries, initiated by another corporation in relation to printing contracts, including the cancellation of printing contracts. The settlement did not have a
material impact on the Corporations financial statements.

In addition, a number of other legal proceedings against the Corporation and
its subsidiaries are pending. In the opinion of the management of the Corporation and its subsidiaries, the outcome of these proceedings is not expected to have a material adverse effect on Corporations results or on its financial position.

Critical Accounting Policies and Estimates

Revenue recognition

The Corporation recognizes operating revenues when the following
criteria are met:



| |  | the amount of revenue can be measured reliably;
|- |  | -----------------------------------------------



| |  | the receipt of economic benefits associated with the transaction is probable;
|- |  | -----------------------------------------------------------------------------



| |  | the costs incurred or to be incurred in respect of the transaction can be measured reliably;
|- |  | --------------------------------------------------------------------------------------------



| |  | the stage of completion can be measured reliably where services have been rendered; and
|- |  | ---------------------------------------------------------------------------------------



| |  | significant risks and rewards of ownership, including effective control, have been transferred to the buyer where goods have been sold.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------

The portion of revenue that is unearned is recorded under Deferred revenue when customers are invoiced.

Revenue recognition policies for each of the Corporations main activities are as follows:

Telecommunications

The
Telecommunications segment provides services under arrangements with multiple deliverables, for which there are two separate accounting units: one for subscriber services (cable television, Internet, cable telephony or mobile telephony, including
connection costs and rental of equipment); the other for equipment sales to subscribers. Components of multiple deliverable arrangements are separately accounted for, provided the delivered elements have
stand-alone value to the customer and the fair value of any undelivered elements can be objectively and reliably determined. Arrangement consideration is allocated among the separate accounting units based on
their relative fair values.

Cable connection revenues are deferred and recognized as revenues over the estimated average period that
subscribers are expected to remain connected to the network. The incremental and direct costs related to cable connection costs, in an amount not exceeding the revenue, are deferred and recognized as an operating expense over the same period. The
excess of those costs over the related revenues is recognized immediately in income. Operating revenues from cable and other services, such as Internet access, cable and mobile telephony, are recognized when services are rendered. Promotional offers
and rebates are accounted for as a reduction in the service revenue to which they relate. Revenues from equipment sales to subscribers and their costs are



114



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recognized in income when the equipment is delivered. Promotional offers related to equipment, with the exclusion of mobile devices, are accounted for as a reduction of related equipment sales on
delivery, while promotional offers related to the sale of mobile devices are accounted for as a reduction of related equipment sales on activation. Operating revenues related to service contracts are recognized in income over the life of the
specific contracts on a straight-line basis over the period in which the services are provided.

Revenues from the retail activities are recognized at the time of delivery, net of provisions for estimated returns based on historical rate of returns.

Media

Advertising revenues
derived from the sale of advertising airtime are recognized when the advertisement has been broadcast on television. Advertising revenues derived from newspaper and magazine publishing activities are recognized when the publication is delivered.
Website advertising is recognized when advertisements are placed on websites.

Revenues derived from subscriptions to specialty television
channels are recognized on a monthly basis at the time service is rendered.

Revenues from the sale or distribution of newspapers, magazines
and books are recognized upon delivery, net of provisions for estimated returns based on historical rate of returns.

Revenues derived from
subscription to online publications are recognized over the period of the subscription.

Sports and Entertainment

Revenues derived from entertainment product distribution are recognized on delivery of the products, net of provisions for estimated returns based on
historical rate of returns.

Revenues derived from show production and sporting and cultural event management are recognized once the event or
production occurs or when the services are rendered.

Impairment of assets

For the purposes of assessing impairment, assets are grouped in CGUs, which represent the lowest levels for which there are separately identifiable cash inflows generated by those assets. At each balance
sheet date, the Corporation reviews whether events or circumstances have occurred to indicate that the carrying amounts of its long-lived assets with finite useful lives may be less than their recoverable
amounts. Goodwill, other intangible assets having an indefinite useful life, and intangible assets not yet available for use are tested for impairment each financial year, as well as whenever there is an indication that the carrying amount of the
asset, or the CGU to which an asset has been allocated, exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and the value in use of the asset or CGU. Fair value less costs to sell represents
the amount an entity could obtain at the valuation date from the assets disposal in an arms length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The value in use represents the present value
of the future cash flows expected to be derived from the asset or CGU.

The Corporation uses the discounted cash flow method to estimate the
recoverable amount consisting of future cash flows derived mainly from the most recent budget and three-year strategic plan approved by the Corporations management and presented to the Board of Directors. These forecasts consider each
CGUs past operating performance and market share as well as economic trends, along with specific and market industry trends and corporate strategies. A perpetual growth rate is used for cash flows beyond this
three-year period. The discount rate used by the Corporation is a pre-tax rate derived from the weighted average cost of capital pertaining to each CGU, which reflects the current market assessment of
(i) the time value of money, and (ii) the risk specific to the assets for which the future cash flow estimates have not been risk-adjusted. The perpetual growth rate has been determined with regard to the specific markets in which the CGUs
participate.

An impairment loss is recognized in the amount by which the carrying amount of an asset or a CGU exceeds its recoverable
amount. When the recoverable amount of a CGU to which goodwill has been allocated is lower than the CGUs carrying amount, the related goodwill is first impaired. Any excess amount of impairment is recognized and attributed to assets in
the CGU, prorated to the carrying amount of each asset in the CGU.

An impairment loss recognized in prior periods for long-lived assets
with finite useful lives and intangible assets having an indefinite useful life, other than goodwill, can be reversed through the consolidated statement of income to the extent that the resulting carrying value does not exceed the carrying value
that would have been the result had no impairment losses been recognized previously.



115



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The determination of CGUs requires judgment when determining the lowest level for which there are separately
identifiable cash inflows generated by the asset category.

In addition, when determining the recoverable amount of an asset or CGU,
assessment of the information available at the valuation date is based on managements judgment and may involve estimates and assumptions. Furthermore, the discounted cash flow method used in determining the recoverable amount of an asset or
CGU relies on the use of estimates such as the amount and timing of cash flows, expected variations in the amount or timing of those cash flows, the time value of money as represented by the risk-free rate,
and the risk premium associated with the asset or CGU.

Therefore, the judgment used in determining the recoverable amount of an asset or CGU
may affect the amount of the impairment loss to be recorded to an asset or CGU, as well as the potential reversal of the impairment charge in the future.

Based on the data and assumptions used in its last impairment test, the Corporation believes that there are no significant amounts of long-lived assets with finite
useful lives, or goodwill and intangible assets with indefinite useful lives on its books at this time that present a significant risk of impairment in the near future. However, since impairment charges were recorded in 2014 in the Newspaper
and Broadcasting CGUs, any negative change in the future in the assumptions used for the purpose of realizing the impairment test in these CGUs could result in an additional impairment charge.

The net book value of goodwill as at December 31, 2014 was $ 2.71 billion, and the net book value of intangible assets with indefinite
useful lives as at December 31, 2014 was $ 60.5 million.

Derivative financial instruments and hedge accounting

The Corporation uses various derivative financial instruments to manage its exposure to fluctuations in foreign currency exchange rates
and interest rates. The Corporation does not hold or use any derivative financial instruments for speculative purposes. Under hedge accounting, the Corporation documents all hedging relationships between hedging items and hedged items, as well as
its strategy for using hedges and its risk management objective. It also designates its derivative financial instruments as either fair value hedges or cash flow hedges when they qualify for hedge accounting. The Corporation assesses the
effectiveness of derivative financial instruments when the hedge is put in place and on an ongoing basis.

The Corporation generally enters
into the following types of derivative financial instruments:



| |  | The Corporation uses foreign exchange forward contracts to hedge foreign currency rate exposure on anticipated equipment or inventory purchases in a
foreign currency. The Corporation also uses offsetting foreign exchange forward contracts in combination with cross-currency interest rate swaps to hedge foreign currency rate exposure on interest and principal payments on foreign currency
denominated debt. These foreign exchange forward contracts are designated as cash flow hedges.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Corporation uses cross-currency interest rate swaps to hedge (i) foreign currency rate exposure on interest and principal payments on foreign
currency denominated debt and/or (ii) fair value exposure on certain debt resulting from changes in interest rates. The cross-currency interest rate swaps that set all future interest and principal
payments on U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting an interest rate from a floating rate to a floating rate or from a fixed rate to a fixed rate, are designated as cash
flow hedges. The cross-currency interest rate swaps are designated as fair value hedges when they set all future interest and principal payments on
U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting the interest rate from a fixed rate to a floating rate.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Corporation uses interest rate swaps to manage fair value exposure on certain debt resulting from changes in interest rates. These swap agreements
require a periodic exchange of payments without the exchange of the notional principal amount on which the payments are based. These interest rate swaps are designated as fair value hedges when they convert the interest rate from a fixed rate to a
floating rate, or as cash flow hedges when they convert the interest rate from a floating rate to a fixed rate.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under hedge
accounting, the Corporation applies the following accounting policies:



| |  | For derivative financial instruments designated as fair value hedges, changes in the fair value of the hedging derivative recorded in income are
substantially offset by changes in the fair value of the hedged item to the extent that the hedging relationship is effective. When a fair value hedge is discontinued, the carrying value of the hedged item is no longer adjusted and the cumulative
fair value adjustments to the carrying value of the hedged item are amortized to income over the remaining term of the original hedging relationship.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



116



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| |  | For derivative financial instruments designated as cash flow hedges, the effective portion of a hedge is reported in other comprehensive income until
it is recognized in income during the same period in which the hedged item affects income, while the ineffective portion is immediately recognized in income. When a cash flow hedge is discontinued, the amounts previously recognized in accumulated
other comprehensive income are reclassified to income when the variability in the cash flows of the hedged item affects income.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any change in the fair value of these derivative financial instruments recorded in income is included in gain or loss on valuation and translation of financial instruments. Interest expense on hedged
long-term debt is reported at the hedged interest and foreign currency rates.

Derivative financial instruments that do not qualify for hedge
accounting, including derivatives that are embedded in financial or non-financial contracts that are not closely related to the host contracts, such as early settlement options on long term-debt, are reported on a fair value basis in the consolidated balance sheets. Any change in the fair value of these derivative financial instruments is recorded in income as a gain or loss on valuation and
translation of financial instruments.

Early settlement options are accounted for separately from the debt when the corresponding option
exercise price is not approximately equal to the amortized cost of the debt.

The judgment used in determining the fair value of derivative
financial instrument including embedded derivatives, using valuation and pricing models, may have a significant effect on the value of the gain or loss on valuation and translation of financial instruments recorded in the consolidated statements of
income, and the value of the gain or loss on derivative financial instruments recorded in the consolidated statements of comprehensive income. Also, valuation and financial models are based on a number of assumptions including future cash flows,
period-end swap rates, foreign exchange rates, credit default premium, volatility, discount factors and underlying instrument adjusted implicit interest rate and credit premium.

In addition, judgment is required to determine if an option exercise price is not approximately equal to the amortized cost of the debt. This determination may have a significant impact on the amount of
gains or losses on valuation and translation of financial instruments recorded in the consolidated statements of income.

Pension and
postretirement benefits

The Corporation offers defined contribution pension plans and defined benefit pension plans to some of its
employees.

Quebecor Medias defined benefit obligations with respect to defined benefit pension plan and postretirement benefits plan
are measured at present value and assessed on the basis of a number of economic and demographic assumptions, which are established with the assistance of Quebecor Medias actuaries. Key assumptions relate to the discount rate, the rate of
increase in compensation, retirement age of employees, healthcare costs, and other actuarial factors. Defined benefit pension plan assets are measured at fair value and consist of equities and corporate and government
fixed-income securities.

Re-measurements of the net defined benefit liability or asset are recognized
immediately in other comprehensive income.

Recognition of a net benefit asset is limited under certain circumstances to the amount
recoverable, which is primarily based on the present value of future contributions to the plan to the extent to which the Corporation can unilaterally reduce those future contributions. In addition, an adjustment to the net benefit asset or the net
benefit liability can be recorded to reflect a minimum funding liability in a certain number of the Corporations pension plans. The assessment of the amount recoverable in the future, for the purpose of calculating the limit on the net benefit
asset, is based on a number of assumptions, including future service costs and reductions in future plan contributions.

The Corporation
considers all the assumptions used to be reasonable in view of the information available at this time. However, variances from certain of these assumptions may have a significant impact on the costs and obligations of pension plans and
postretirement benefits in future periods.

Stock-based compensation

Stock-based awards to employees that call for settlement in cash or other assets at the option of the employee are accounted for at fair value and classified as a liability. The compensation cost is
recognized in expenses over the vesting period. Changes in the fair value of stock-based awards between the grant date and the measurement date result in a change in the liability and compensation cost.

Estimates of the fair value of stock option awards are determined by applying an option-pricing
model, taking into account the terms and conditions of the grant and assumptions such as the risk-free interest rate, the dividend yield, the expected volatility and the expected remaining life of the option.



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The judgment and assumptions used in determining the fair value of liability classified stock-based awards may have an effect on the compensation cost recorded in the statements of income.

Provisions

Provisions are recognized
when (i) the Corporation has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation, and when (ii) the amount of the
obligation can be reliably estimated. Restructuring costs, comprised primarily of termination benefits, are recognized when a detailed plan for the restructuring exists and a valid expectation has been raised in those affected, that the plan will be
carried out.

Provisions are reviewed at each balance sheet date and changes in estimates are reflected in the consolidated statements of
income in the reporting period in which changes occur.

The amount recognized as a provision is the best estimate of the expenditures required
to settle the present obligation at the balance sheet date or to transfer it to a third party at that time, and is adjusted for the effect of time value when material. The amount recognized for onerous contracts is the lower of the cost necessary to
fulfill the obligations, net of expected economic benefits deriving from the contracts, and any indemnity or penalty arising from failure to fulfill those obligations.

No amounts are recognized for obligations that are possible but not probable or for those for which an amount cannot be reasonably estimated.

Allowance for doubtful accounts

The Corporation maintains an allowance for doubtful
accounts to cover anticipated losses from customers who are unable to pay their debts. The allowance is reviewed periodically and is based on an analysis of specific significant accounts outstanding, the age of the receivable, customer
creditworthiness, and historical collection experience.

Business combinations

A business combination is accounted for by the acquisition method. The cost of an acquisition is measured at the fair value of the consideration given in exchange for control of the business acquired at
the acquisition date. This consideration can be comprised of cash, assets transferred, financial instruments issued, or future contingent payments. The identifiable assets and liabilities of the business acquired are recognized at their fair value
at the acquisition date. Goodwill initially arising from a business acquisition is measured and recognized as the excess of the fair value of the consideration paid over the fair value of the recognized identifiable assets acquired and liabilities
assumed. The judgments made in determining the estimated fair value and the expected useful life of each acquired asset, and the estimated fair value of each assumed liability, can significantly impact net income.

Determining the fair value of certain acquired assets, assumed liabilities and future contingent considerations requires judgment and involves complete
absolute reliance on estimates and assumptions. The Corporation primarily uses the discounted future cash flows approach to estimate the value of acquired intangible assets.

The estimates and assumptions used in the allocation of the purchase price at the date of acquisition may also have an impact on the amount of an impairment charge to be recognized, if any, after the date
of acquisition, as discussed above under Impairment of assets.

Income taxes

Deferred income taxes are accounted for using the liability method. Under this method, deferred income tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax bases. Deferred income tax assets and liabilities are
measured using enacted or substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is
recognized in income in the period that includes the substantive enactment date. A deferred tax asset is recognized initially when it is probable that future taxable income will be sufficient to use the related tax benefits and may be subsequently
reduced, if necessary, to an amount that is more likely than not to be realized.

The assessment of deferred income taxes is judgmental in
nature and is dependent on assumptions and estimates as to the availability and character of future taxable income. The ultimate amount of deferred income tax assets realized could be slightly different from that recorded, since it is influenced by
the Corporations future operating results.



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The Corporation is at all times under audit by various tax authorities in each of the jurisdictions in which
it operates. A number of years may elapse before a particular matter for which management has established a reserve is audited and resolved. The number of years between each tax audit varies depending on the tax jurisdiction. Management believes
that its estimates are reasonable and reflect the probable outcome of known tax contingencies, although the final outcome is difficult to predict.

Changes in Accounting Policies

On January 1, 2014, the Corporation adopted
retrospectively IFRIC 21  Levies, which clarifies the timing of accounting for a liability in relation with outflow of resources that is imposed by governments in accordance with legislation, based on the activity that triggers the
payment. The adoption of this interpretation did not have a material impact on the consolidated financial statements.

Recent accounting
pronouncements

The Corporation has not yet completed its assessment of the impact of the adoption of these pronouncements on its
consolidated financial statements.



|(i) | IFRS 9  Financial Instruments is required to be applied retrospectively for annual periods beginning on or after January 1, 2018, with early
adoption permitted.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS 9 simplifies the measurement and classification of financial assets by reducing the
number of measurement categories in IAS 39, Financial Instruments: Recognition and Measurement. The new standard also provides for a fair value option in the designation of a non-derivative
financial liability and its related classification and measurement, as well as for a new hedge accounting model more closely aligned with risk management activities undertaken by entities.



|(ii) | IFRS 15  Revenue from Contracts with Customers is required to be applied retrospectively for annual periods beginning on or after
January 1, 2017, with early adoption permitted.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS 15 specifies how and when an entity will
recognize revenue as well as requiring such entities to provide users of financial statements with more informative disclosures. The standard provides a single, principles based five-step model to be applied
to all contracts with customers.



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ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A - Directors and Senior Management

The following table sets forth certain information concerning our directors and executive officers at March 20, 2015:



|                                                                         |  |     |  |                                                                     
|------------------------------------------------------------------------ |  | --- |  | --------------------------------------------------------------------
|Name and Municipality of Residence                                       |  | Age |  | Position                                                            
|                                                                         |  |    
|THE RIGHT HONOURABLE BRIAN
MULRONEY, P.C., C.C., LL.D. Westmount,
Québec |  | 75  |  | Director and Chair of the Board                                     
|                                                                         |  |    
|JEAN LA COUTURE, FCPA, FCA(1)(2)
Montréal, Québec                        |  | 68  |  | Director and Chair of the Audit Committee                           
|                                                                         |  |    
|SYLVIE LALANDE(3) Lachute,
Québec                                        |  | 64  |  | Director                                                            
|                                                                         |  |    
|PIERRE LAURIN(3) Nuns
Island, Québec                                    |  | 75  |  | Vice Chairman and Lead Director                                     
|                                                                         |  |    
|A. MICHEL LAVIGNE, FCPA, FCA(1)(2)(3)
Laval, Québec                      |  | 64  |  | Director and Chair of the Human Resources and Compensation Committee
|                                                                         |  |    
|GENEVIÈVE MARCON Lac
Beauport, Québec                                    |  | 46  |  | Director                                                            
|                                                                         |  |    
|ROBERT PARÉ(1) Westmount,
Québec                                         |  | 60  |  | Director                                                            
|                                                                         |  |    
|NORMAND PROVOST(2) Brossard,
Québec                                      |  | 60  |  | Director                                                            
|                                                                         |  |    
|PIERRE DION Saint-Bruno,
Québec                                          |  | 50  |  | President and Chief Executive Officer                               



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|                                            |  |     |  |                                                                                         
|------------------------------------------- |  | --- |  | ----------------------------------------------------------------------------------------
|Name and Municipality of Residence          |  | Age |  | Position                                                                                
|                                            |  |    
|MANON BROUILLETTE
Montréal, Québec          |  | 46  |  | President and Chief Executive Officer, Videotron Ltd.                                   
|                                            |  |    
|BENOÎT ROBERT
Omaha, Nebraska, USA          |  | 54  |  | President and Chief Executive Officer, Sports and Entertainment Group                   
|                                            |  |    
|JULIE TREMBLAY
Westmount, Québec            |  | 55  |  | President and Chief Executive Officer, Media Group                                      
|                                            |  |    
|JEAN-FRANÇOIS PRUNEAU
Repentigny, Québec    |  | 44  |  | Senior Vice President and Chief Financial Officer                                       
|                                            |  |    
|MARC M. TREMBLAY
Westmount, Québec          |  | 54  |  | Senior Vice President and Chief Legal Officer and Public Affairs and Corporate Secretary
|                                            |  |    
|FRANCE LAUZIÈRE
Town of Mount-Royal, Québec |  | 48  |  | Senior Vice President, QMI Content                                                      
|                                            |  |    
|J. SERGE SASSEVILLE
Montréal, Québec        |  | 56  |  | Senior Vice President, Corporate and Institutional Affairs                              
|                                            |  |    
|DONALD LIZOTTE
Kirkland, Québec             |  | 48  |  | Executive Vice President, National Sales                                                
|                                            |  |    
|ISABELLE LECLERC
Montréal, Québec           |  | 46  |  | Vice President, Human Resources                                                         
|                                            |  |    
|CHLOÉ POIRIER
Nuns Island, Québec          |  | 45  |  | Vice President and Treasurer                                                            
|                                            |  |    
|CAROLINE ROY
Town of Mount Royal, Québec    |  | 36  |  | Vice President, Research and Digital Development, QMI Digital                           
|                                            |  |    
|DENIS SABOURIN
Verdun, Québec               |  | 54  |  | Vice President and Corporate Controller                                                 



|(1) | Member of the Executive Committee
|--- | ---------------------------------

|(2) | Member of the Audit Committee
|--- | -----------------------------

|(3) | Member of the Human Resources and Compensation Committee
|--- | --------------------------------------------------------

The Right Honourable Brian Mulroney, P.C., C.C., LL.D, Director and Chairman of the Board. Mr. Mulroney has been a Director of Quebecor Media since January 31, 2001. He
also served as Vice Chairman of the Board of Quebecor from November 2009 to June 2014 and as Vice-Chairman of the Board of Quebecor Media from March 2014 to June 2014. He was appointed Chairman of the Board of Quebecor, Quebecor Media and Videotron
on June 19, 2014. Mr. Mulroney has also served as Chairman of the Board of Directors of Quebecor World Inc. from April 2002 to July 2009. Mr. Mulroney served as Chairman of the Board of Directors of Sun Media Corporation
from January 2000 to June 2001. Since 1993, Mr. Mulroney has been a Senior Partner with the law firm Norton Rose Fulbright Canada LLP (formerly Ogilvy Renault LLP) in Montréal, Québec. Prior to that, Mr. Mulroney
was the Prime Minister of Canada from 1984 until 1993. Mr. Mulroney practiced law in Montréal and served as President of The Iron Ore Company of Canada before entering politics in 1983. Mr. Mulroney serves as a Director of a number
of public corporations, including Wyndham Worldwide Corporation (New Jersey), The Blackstone Group LP (New York) and Lion Capital (London). He is also Chairman of the International Advisory Board of Barrick Gold Corporation. He is Companion of the
Order of Canada as well as Grand Officier de lOrdre national du Québec.



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Jean La Couture, FCPA, FCA, Director and Chair of the Audit Committee.
Mr. La Couture has been a Director of Quebecor Media and the Chair of its Audit Committee since May 5, 2003 and is also a Director and Chair of the Audit Committee of Quebecor and Videotron. Mr. La Couture was Director of
Quebecor World Inc. from December 2007 to December 2008. Mr. La Couture, a Fellow Chartered Professional Accountant, is President of Huis Clos Ltée., a management and mediation firm. He is also President of the Regroupement des
assureurs de personnes à charte du Québec (RACQ), a position he has held since August 1995. He headed Le Groupe Mallette (an accounting firm) before becoming, from 1990 to 1994, President and Chief Executive Officer of The
Guarantee Company of North America. He is Chairman of the Board of Innergex Renewable Energy Inc., Chairman of the Board of Groupe Pomerleau (a Quebec-based construction company) and Director and Chair of the Investment and Risk Management Committee
of CDPQ.

Sylvie Lalande,Director and member of the Human Resources and Compensation Committee.Ms. Lalande is a Director of Quebecor Media since May 2013. She has served as a Director of Quebecor since May 2011 and of Videotron since July 2014. She is a member of the Human Resources and Compensation Committee of Quebecor and Quebecor
Media since June 2014. She is a Director of TVA Group since December 2001, and was appointed as Chair of the Board on March 10, 2014. She also serves as Chair of the Human Resources and Corporate Governance Committee since May 2013.
Ms. Lalande held several senior positions in the media, marketing, communication marketing and company communications sectors. Until October 2001, she was Chief Communications Officer of Bell Canada. From 1994 to 1997, she was President and
Chief Executive Officer of UBI Consortium, a consortium formed to develop and manage interactive and transactional communication services. From 1987 to 1994, she occupied several senior positions within TVA Group and Le Groupe Vidéotron
ltée. Ms. Lalande began her career in the radio industry, after which she founded her own consultation firm. In 2006, Ms. Lalande earned a degree in corporate governance from the Collège des administrateurs de
sociétés. In November 2013, Ms. Lalande was appointed Chair of the Board of the Collège des administrateurs de sociétés (CAS) of Université Laval.

Pierre Laurin, Vice Chairman and Lead Director and member of the Human Resources and Compensation Committee.
Mr. Laurin is a Director and member of the Human Resources and Compensation Committee of Quebecor Media since May 2013. He was appointed Vice Chairman and Lead Director on June 19, 2014. Mr. Laurin also served as a member of the Audit
Committee from May 2013 to June 2014. Mr. Laurin has served as a Director of Quebecor since 1991. He also serves as a member of the Corporate Governance and Nominating Committee and of the Human Resources and Compensation Committee of Quebecor.
He was Chair of the Corporate Governance and Nominating Committee and a member of the Audit Committee of Quebecor until June 2014. He was also Director and member of the Audit Committee of Videotron from May 2013 to June 2014. Mr. Laurin was
Chairman of the Board of Atrium Innovations Inc. from its beginning in 2000 until it was privatised in 2014. For a major part of his career, Pierre Laurin headed HEC Montréal (previously known as lÉcole des Hautes Études
Commerciales) after which he moved over to the position of Vice-President, Planning and Administration, at Aluminium Company of Canada. He was then founding President of SOCCRENT, a venture capital company, and thereafter, President of Merrill
Lynch, Quebec. He is an Officer of the Order of Canada and a Chevalier de lOrdre du Mérite de la République française.

A. Michel Lavigne, FCPA, FCA, Director and member of the Audit Committee and Chair of the Human Resources and Compensation Committee. Mr. Lavigne has served as a Director and
member of the Audit Committee and the Human Resources and Compensation Committee of Quebecor Media since June 30, 2005. He was appointed Chair of the Human Resources and Compensation Committee in June 2014. Since June 30, 2005,
Mr. Lavigne has also served as a Director and a member of the Audit Committee of TVA Group and as a Director and member of the Audit Committee of Videotron. Since May 2013, he is also a member of the Human Resources and Corporate Governance
Committee of TVA Group. He also is a Director and member of the Audit Committee and of the Human Resources and Compensation Committee of Quebecor since May 2013 and as Chair of the latter committee since June 2014. Mr. Lavigne is a Director, a
member of the Audit Committee and Chair of the Pension Committee of Canada Post, a Director and member of the Audit Committee of Laurentian Bank of Canada and the Chair of the Board of Directors and of the Audit Committee of Teraxion Inc. Until May
2005, he served as President and Chief Executive Officer of Raymond Chabot Grant Thornton in Montréal, Québec, as Chairman of the Board of Grant Thornton Canada and as a member of the Board of Governors of Grant Thornton International.
Mr. Lavigne is a Fellow Chartered Professional Accountant of the Ordre des comptables professionnels agréés du Québecand a member of the Canadian Institute of Chartered Accountants since 1973.

Geneviève Marcon,Director.Ms. Marcon is a Director of Quebecor Media since May 2013. She has served as
a Director of Quebecor since May 2012 and as member of the Corporate Governance and Nominating Committee since June 2014. Ms. Marcon is President of GM Developpement Inc., a company operating in the real-estate sector as owner,



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developer and manager of properties. Ms. Marcon is associated with the revitalization of the Saint-Roch neighbourhood in Québec City, where she conducted several restoration and
construction projects for the transformation of this neglected neighbourhood into an attractive urban centre. Ms. Marcon, who has a background in industrial relations from Université Laval, has also made her mark in the retail
business sector. Convinced of her vision for the development of Saint-Roch, she opened the Benjo store in 1995 which has since become a benchmark in the toy sector. Ms. Marcon is a member of the Board of Directors of Quebec International, a
regional economic development agency. Recognized for her involvement in the community, Ms. Marcon is active in several social and cultural organizations.

Robert Paré,Director.Mr. Paré is a Director of Quebecor and Quebecor Media since June 19, 2014. He is a corporate lawyer and senior partner at Fasken
Martineau DuMoulin LLP since February 1987. Mr. Paré is a member of the Board and Chair of the Investment Committee of Groupe BMTC inc. since 1989, a member of the Board and of the Compensation, Nominating and Corporate Governance
Committee of Group ADF inc. since 2009 and a member of the Board of Essilor Canada Ltd. since 1995. He is also a member of the Board and of the Nominating and Governance Committee and of the Human Resources and Compensation Committee of RONA Inc.
since 2009. Mr. Paré is also a member of the Board and of the Executive Committee of the Montreal Institute Heart Foundation, as well as a member of the Board of the Institute of Corporate Directors  Quebec Chapter.

Normand Provost, Director. Mr. Provost has been a Director of Quebecor Media since July 2004 and a
Director of Quebecor since May 2013. He also serves as a member of the Audit Committee of Quebecor, Quebecor Media and Videotron Ltd. since June 2014. Since May 2014, Mr. Provost is Assistant to the President of CDPQ, one of the largest
institutional fund managers in Canada and North America. Mr. Provost joined CDPQ in 1980 and has held various management positions during his time there. He served as President of CDP Capital Americas from 1995 to 2003. He has served as
Executive Vice President, Private Equity, of CDPQ from October 2003 until May 2014. In addition to his responsibilities in the investment sector, Mr. Provost served as Chief Operations Officer of CDPQ from April 2009 to March 2012.
Mr. Provost is a Director of the Fondation de lEntrepreneurship.

Pierre Dion,President
and Chief Executive Officer. Mr. Dion was appointed President and Chief Executive Officer of Quebecor and Quebecor Media on April 28, 2014. He was President and Chief Executive Officer of TVA Group from March 2005 to July 2014. He
joined TVA Group in September 2004 as Executive Vice President and Chief Operating Officer. Prior to that date, Mr. Dion was at Sélection du Readers Digest (Canada) during eight years, four of which as President and Chief
Executive Officer. From 1990 to 1996, he held various management positions with Le Groupe Vidéotron ltée.

Manon Brouillette,President and Chief Executive Officer, Videotron Ltd. In May 2014, Ms. Brouillette was
promoted President and Chief Executive Officer of Videotron. From May 2013 to May 2014, she acted as President and Chief Operating Officer of Videotron and from January 2012 to May 2013 as President, Consumer Market. She acted as Executive Vice
President, Strategy and Market Development of Videotron from March 2009 to January 2012. From January 2011 to May 2012, she also acted as Vice President and Chief Digital Officer of Quebecor Media. From June 2008 to March 2009, she acted as Senior
Vice President, Strategic Development and Market Development of Quebecor Media. She joined Videotron in July 2004 and acted as Vice President, Marketing, from July 2004 to January 2005, as Vice President, New Product Development, from
January 2005 to August 2006 and as Senior Vice President, Marketing, Content and New Product Development, from September 2006 to June 2008. Before joining Videotron, Ms. Brouillette was Vice President, Marketing and Communications of the
San Francisco Group from April 2003 to February 2004. She was also responsible for the national and regional accounts of the Blitz division of Groupe Cossette Communication Marketing from April 2002 to April 2003. From
September 1998 to April 2002, she worked at Publicité Martin inc. Ms. Brouillette holds a Bachelors degree in communications with a minor in marketing from Université Laval.

Benoît Robert,President and Chief Executive Officer, Sports and Entertainment Group.Mr. Robert was
appointed President and Chief Executive Officer, Sports and Entertainment Group on August 18, 2014. Mr. Robert earned a Master of Business Administration (MBA) with a specialization in marketing from the University of New Haven in
Connecticut, where he also earned a hockey scholarship. After completing his MBA, Mr. Robert worked in finance for three years, occupying several positions at Nortel Networks Financial Management Program, including Regional Sales Manager.
He then decided to focus his career on business development, sales and management, working for major companies such as Qualcomm and Ericsson. In 2008, he joined the Los Angeles Kings and AEG, a world leader in the management of large sports and
entertainment venues, as Vice President, Business Development. In 2009, he tackled the challenge of reviving the fortunes of the Omaha Lancers, a major junior hockey team of which be became owner and president.



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Julie Tremblay, President and Chief Executive Officer, Media Group.
Julie Tremblay was appointed President and Chief Executive Officer of Media Group on July 30, 2014, On that date, she was also appointed President and Chief Executive Officer of TVA Group. In September 2013, Ms. Julie Tremblay was promoted
President and Chief Executive of Sun Media Corporation. From June 2011 to September 2013, she acted as Chief Operating Officer of Sun Media Corporation. She is also President of Sun News General Partnership since May 2013. Ms. Tremblay held
different positions within the Quebecor group of companies since 1989, including the position of Vice President, Human Resources of Quebecor, a position she held over a period of 8 years. Prior to joining Quebecor, she practiced law in a private law
firm. She has been a member of the Barreau du Québec since 1984 and holds a Bachelor degree of Arts with a minor in Political Science from McGill University.

Jean-François Pruneau, Senior Vice President and Chief Financial Officer. Mr. Pruneau has served as Vice President, Finance of the Corporation from May 2009 to November
2010 and was then promoted Chief Financial Officer. He also serves as Senior Vice President and Chief Financial Officer of Quebecor and as Vice President of Videotron and Sun Media. From October 2005 to May 2009, Mr. Pruneau served as Treasurer
of the Corporation, Sun Media and Videotron. From February 2007 to May 2009, he also served as Treasurer of Quebecor. Prior to that, Mr. Pruneau served as Director, Finance and Assistant Treasurer Corporate Finance of Quebecor Media. Before
joining Quebecor Media in May 2001, Mr. Pruneau was Associate Director of BCE Media from 1999 to 2001. From 1997 to 1999, he served as Corporate Finance Officer at Canadian National Railway. He has been a member of the CFA Institute, formerly
the Association for Investment Management and Research, since 2000.

Marc M. Tremblay, Senior Vice President
and Chief Legal Officer and Public Affairs and Corporate Secretary. Mr. Tremblay was promoted Senior Vice President and Chief Legal Officer and Public Affairs and Corporate Secretary of Quebecor and Quebecor Media in September 2014. Prior
to that date, he was Senior Vice President and Chief Legal Officer and Public Affairs of Quebecor Media, a position he held from October 2013. Prior to that date, Mr. Tremblay was Senior Vice President, Legal Affairs, a position he held from
March 2012. Prior to that date, he was Vice President, Legal Affairs of Quebecor Media, a position he held from March 2007. Prior to that date, Mr. Tremblay practiced law at Ogilvy Renault LLP (now Norton Rose Fulbright Canada LLP) for 22
years. He has been a member of the Barreau du Québec since 1983.

France Lauzière,Senior Vice President, QMI Content. France Lauzière was appointed to her current position in January 2013. She also serves as Vice President, Programming of TVA Group since February 2006. Ms. Lauzière first joined
the TVA Group in 2001 as manager of Variety Programming before taking on the position of General Manager, Programming. In 2007, she also took the responsibilities of managing TVA Productions. Two years later, she established a division called TVA
Création.

J. Serge Sasseville,Senior Vice President, Corporate and Institutional Affairs.
Mr. Sasseville was promoted Senior Vice President, Corporate and Institutional Affairs in March 2012 from his previous position as Vice President, Corporate and Institutional Affairs of Quebecor Media, a position he held since November 2008.
Mr. Sasseville joined the Quebecor Group in 1987 and has served in many capacities both as a lawyer and manager, including Vice President, Legal Affairs and Secretary of Videotron and its subsidiaries and President, Music Sector of Archambault
Group. Mr. Sasseville is a member of the Boards of Directors of Archambault Group and the Quebecor Fund. He is also a member of the Executive Committee and the Vice-Chair of the Board of Directors of CWTA (Canadian Wireless Telecommunications
Association) and a member of the Board of Directors of CPAC (Cable Public Affairs Channel). He has been a member of the Barreau du Québec since 1981 and practiced law at the law firm Stein, Monast in Québec City from 1981 to
1987.

Donald Lizotte,Executive Vice President, National Sales.Donald Lizotte was promoted Executive
Vice President, National Sales in August 2014 from his previous position as President and Chief Executive Officer, Retail and Book Sectors, a position he held since August 2013. From 2010 to 2013, Mr. Lizotte served as Vice President,
Operations, Retail Division of Quebecor Media. Mr. Lizotte joined Videotron in January 2005 as Vice-President, Sales, Videotron, and was promoted in September 2006 to the position of President, Le SuperClub Vidéotron and Vice President,
Retail Sales Videotron. From 2000 to 2005, Mr. Lizotte held various positions in sales and distribution for Molson Breweries, Canadas largest brewing company, including General Manager Key Accounts as well as Regional Manager. Prior to
his



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tenure at Molson Breweries, Mr. Lizotte spent nine years in Toronto, Ontario where he held various sales management positions, including National Sales Manager for the Perrier Group, a
division of Nestlé, from 1998 to 2000. He started his career in 1989 at Heinz Canada where he spent 8 years starting from a sales representative and moved to General Manager ECR. Mr. Lizotte has a bachelors degree in Management
from the Université du Québecin Montréal.

Isabelle Leclerc, Vice President,
Human Resources. Ms. Leclerc was promoted to her current position in June 2011. From 2007 to her appointment, Ms. Leclerc served as Director, Human Resources and, Senior Director, Talent Management. From 2003 to 2007, Ms. Leclerc
held several functions within Quebecor World Inc. Prior to joining Quebecor, Ms. Leclerc was a compensation consultant for 10 years with Towers Perrin (now Towers Watson) and then with Aon Consulting Group (now Aon Hewitt). She is a member of
the North American professional association World@Work. She holds an executive MBA from Landsbridge University, New Brunswick.

Chloé Poirier, Vice President and Treasurer. Ms. Poirier was promoted Vice President and Treasurer in
June 2013 from her previous position as Treasurer of Quebecor Media, a position she held since July 2009. She also serves as Vice President and Treasurer of Quebecor and Videotron, and as Treasurer of Sun Media. Ms. Poirier joined the
Corporation in 2001 as Director, Treasury / Assistant Treasurer, Treasury Operations. Prior to that, she was Analyst, Treasury and Finance with Natrel inc./Agropur from 1997 to 2001 and a trader at the Caisse de dépôt et placement du
Québec from 1995 to 1997. She is a Chartered Financial Analyst (CFA) and holds a Bachelor degree in Actuarial Science and an MBA from Université Laval.

Caroline Roy,Vice President, Research and Digital Development, QMI Digital. Caroline Roy was appointed to her
current position in August 2013. She has been with Quebecor since 2010. She was previously Vice President, Digital of Sun Media Corporation. Before that, she distinguished herself as Director of TVA Interactif, where she demonstrated her abilities
by giving TVAs brands a digital dimension and developing and implementing TVAs mobile strategy. Prior to joining Quebecor, Ms. Roy held management positions in the telecommunications and new media industry.

Denis Sabourin,CPA, CA, Vice President and Corporate Controller. Mr. Sabourin was appointed Vice President and
Corporate Controller of Quebecor Media in March 2004. Prior to that date, he held the position of Senior Manager, Control. Mr. Sabourin is also Vice President and Corporate Controller of Quebecor. Prior to joining Quebecor Media,
Mr. Sabourin served as corporate controller of Compagnie Unimédia (previously known as Unimédia Inc.) from 1994 to 2001 and as Operating Controller for the Hotel Group Auberges des Gouverneurs Inc. from
1990 to 1994. He also spent seven years with Samson Bélair/Deloitte & Touche, Chartered Accountants. Mr. Sabourin is a Chartered Professional Accountant and is a member of the Ordre des comptables professionnels
agréés du Québec.

B - Compensation

Compensation of Directors

Our Directors who are also employees of
Quebecor Media are not entitled to receive any additional compensation for serving as our Directors. Since July 1, 2013, following a restructuring of the Boards of Directors of Quebecor and Quebecor Media, all Directors of Quebecor are also
acting as Directors of Quebecor Media. Fees are now borne on a pro rata basis between the two corporations. Since July 1, 2013, each Director is entitled to receive an annual directors fee of $60,000. The Chair of the Audit Committee
receives additional fees of $60,000 per year and the Chair of the Human Resources and Compensation Committee receives additional fees of $16,000 per year. Each Audit Committee member, other than the Chairman, also receives additional fees of $30,000
per year. Each Human Resources and Compensation Committee member, other than the Chair, also receives additional fees of $11,000. From July 1, 2013 to June 18, 2014, each Director was entitled to receive an annual attendance fee of $14,000
and each Executive Committee member received additional fees of $3,000 per year. On June 19, 2014, the attendance fee was increased to $20,000 per year and each Executive Committee member receives additional fees of $5,000 per year. All of our
Directors are reimbursed for travel and other reasonable expenses incurred in attending meetings of the Board of Directors or of one of its committees. Mr. Pierre Karl Péladeau, who served as Chairman of the Board until March 9,
2014, has received compensation from us for acting in such capacity.

From January 1 to December 31, 2014, the
amount of compensation (including benefits in kind) paid to our Directors (including Pierre Karl Péladeau for the period during which he was a Director) for services in all capacities to Quebecor Media and its subsidiaries (other than TVA
Group) was $1,598,198. None of our Directors have contracts with us or any of our subsidiaries that provide for benefits upon termination of employment.



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Compensation of Executive Officers

Compensation of our senior executive officers is composed primarily of base salary and the payment of short-term and mid-term cash
bonuses. Cash bonuses are generally tied to the achievement of financial performance indicators and strategic objectives, and they may vary from 30% to 100% of base salary depending upon the level of responsibilities of the senior executive officer.
Our executive compensation package is also complemented by long-term incentives in the form of stock options.

For the
financial year ended December 31, 2014, our senior executive officers, as a group, received aggregate compensation of $4,425 million for services they rendered in all capacities during 2014, which amount includes base salary, bonuses,
benefits in kind and deferred compensation payable to such senior executive officers.

Quebecor Medias Stock Option Plan

We maintain a stock option plan to attract, retain and motivate our Directors, executive officers and key
contributors, as well as those of our subsidiaries. The Human Resources and Compensation Committee is responsible for the administration of this stock option plan and, as such, designates the participants under the stock option plan and determines
the number of options granted, the vesting schedule, the expiration date and any other terms and conditions relating to the options.

Under this stock option plan, 6,180,140 common shares of Quebecor Media (representing 6% of all of the outstanding common shares of Quebecor Media) have been set aside for directors, officers, senior
employees, and other key employees of Quebecor Media and its subsidiaries. Each option may be exercised within a maximum period of ten years following the date of grant at an exercise price not lower than, as the case may be, the fair market value
of the common shares of Quebecor Media at the date of grant, as determined by our Board of Directors (if the common shares of Quebecor Media are not listed on a stock exchange at the time of the grant) or the 5-day weighted average closing price
ending on the day preceding the date of the grant of the common shares of Quebecor Media on the stock exchange(s) where such shares are listed at the time of grant. For so long as the shares of Quebecor Media are not listed on a recognized stock
exchange, optionees may exercise their vested options during one of the following annual periods: from March 1 to March 30, from June 1 to June 29, from September 1 to September 29 and from December 1 to
December 30. Holders of options under the plan have the choice at the time of exercising their options to receive an amount in cash equal to the difference between the fair market value of the common shares, as determined by our Board of
Directors, and the exercise price of their vested options or, subject to certain stated conditions, purchase common shares of Quebecor Media at the exercise price. Except under specific circumstances, and unless our Human Resources and Compensation
Committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by our Human Resources and Compensation Committee at the time of grant: (i) equally over five years with
the first 20% vesting on the first anniversary of the date of the grant; (ii) equally over four years with the first 25% vesting on the second anniversary of the date of grant; and (iii) equally over three years with the first 331/3% vesting on the third anniversary of the date of grant. Pursuant to the terms of this plan, no optionee may hold options representing more than 5% of the outstanding common shares of Quebecor Media.

During the year ended December 31, 2014, an aggregate total of 271,000 options were granted under this plan
to officers and employees of Quebecor Media and its subsidiaries, with a weighted average exercise price of $63.96 per share, as determined by Quebecor Medias Human Resources and Compensation Committee. During the year ended
December 31, 2014, a total of 218,750 options were exercised by officers and employees of Quebecor Media and its subsidiaries, for aggregate gross value realized of $3.6 million. The value realized on option exercises represents the
difference between the option exercise price and the fair market value of Quebecor Media common shares (as determined as set forth above) at the date of exercise. As of December 31, 2014, an aggregate total of 1,631,959 options were
outstanding (of which 263,823 were vested as at that date), with a weighted average exercise price of $55.15 per share, as determined by Quebecor Medias Human Resources and Compensation Committee. For more information on this stock option
plan, see Note 23 to our audited consolidated financial statements included under Item 18. Financial Statements of this annual report.



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Quebecors Stock Option Plan

Under a stock option plan established by Quebecor, 13,000,000 Quebecor Class B Shares have been set aside for
Directors, officers, senior employees and other key employees of Quebecor and its subsidiaries, including Quebecor Media. The exercise price of each option is equal to the weighted average trading price of Quebecor Class B Shares on the Toronto
Stock Exchange over the last five trading days immediately preceding the grant of the option. Each option may be exercised during a period not exceeding ten years from the date granted. Options usually vest as follows: 1/3after one year, 2/3after two years, and 100% three years after the original grant. Holders of options under the Quebecor stock option plan
have the choice, when they want to exercise their options, to acquire Quebecor Class B Shares at the corresponding option exercise price or to receive a cash payment from Quebecor equivalent to the difference between the market value of the
underlying shares and the exercise price of the option. The Board of Directors of Quebecor may, at its discretion, affix different vesting periods at the time of each grant.

During the year ended December 31, 2014, a total of 1,010,000 options to purchase Quebecor Class B Shares, with a weighted
average exercise price of $26.30 per share, were granted to three senior executive officers of Quebecor Media. As of December 31, 2014, a total of 1,310,000 options to purchase Quebecor Class B Shares, with a weighted average exercise
price of $25.36 per share, were held by senior executive officers of Quebecor Media for acting in such capacity. The closing sale price of the Quebecor Class B Shares on the TSX on December 31, 2014 was $31.94.

Pension Benefits

Quebecor Media and its subsidiaries maintain a pension plan for their executive officers. The benefits under the Quebecor Media plan equal
2.0% of the average salary over the best five consecutive years of salary (including bonuses), multiplied by the number of years of membership in the plan as an executive officer. The pension so calculated is payable at the normal retirement age,
which is 65 years of age, or sooner at the election of the executive officer, and, from age 61, without early retirement reduction. In addition, the pension may be deferred, but not beyond the age limit under the provisions of the Income Tax
Act(Canada), in which case the pension is adjusted to take into account the delay in payment thereof in relation to the normal retirement age. The maximum pension payable under such pension plan is as prescribed by the Income Tax Act
(Canada) and is based on a maximum salary of $140,945. An executive officer contributes to the plan an amount equals to 5% of his or her salary up to a maximum of $7,047 in respect of 2015. Quebecor Media closed this pension plan to all new
employees hired on and after December 27, 2008. New employees are eligible to enroll in a retirement savings plan.

The
total amount contributed by Quebecor Media in 2014 to provide the pension benefits was $75.9 million on a consolidated basis. For a description of the amount set aside or accrued for pension plans and post-retirement benefits by Quebecor Media
see Note 29 to our audited consolidated financial statements.

The table below indicates the annual pension benefits that
would be payable at the normal retirement age of 65 years:



|                 |  |                        |        |  |    |   |        |    |  |   |        |  |  |    |        |  |  |   |        | 
|---------------- |  | ---------------------- | ------ |  | -- | - | ------ | -- |  | - | ------ |  |  | -- | ------ |  |  | - | ------ | 
|                 |  | Years of Participation |       
|Compensation     |  | 10                     |        |  | 15 |   |        | 20 |  |   | 25     |  |  | 30 |       
|$140,945 or more |  | $                      | 28,189 |  |    | $ | 42,283 |    |  | $ | 56,378 |  |  | $  | 70,472 |  |  | $ | 84,567 | 

C - Board Practices

In accordance with our charter, our Board of Directors may consist of at least one Director and no more than 20 Directors. Our Board of Directors currently consists of nine Directors. Each Director serves
a one-year term and holds office until the next annual general shareholders meeting or until the election of his or her successor, unless he or she resigns or his or her office becomes vacant by reason of death, removal or other cause.
Pursuant to a Consolidated and Amended Shareholders Agreement, dated as of December 11, 2000, as amended, among Quebecor, certain wholly owned subsidiaries of Quebecor, Capital Communications CDPQ Inc. (now Capital CDPQ) and Quebecor
Media (the Corporations Shareholders Agreement), our Board of Directors is comprised of nominees of each of Quebecor and of Capital CDPQ. In May 2013, the size of our Board of Directors was increased from eight to nine
directors, and our shareholders established that Quebecor would be entitled to nominate seven directors and Capital CDPQ would be entitled to nominate two directors. See Item 7. Major Shareholders and Related Party Transactions  Major
Shareholders below for a description of the Corporations Shareholders Agreement.



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Reference is made to A. Directors and Senior Management above for the current
term of office, if applicable, and the period during which our directors and senior management have served in that office.

Executive
Committee

The Executive Committee of our Board of Directors is currently composed of three members, namely
Messrs. Jean La Couture, A. Michel Lavigne and Robert Paré. Mr. La Couture is the Chairman of our Executive Committee. Subject to the provisions of the Corporations Shareholders Agreement, the Committee has and may exercise all the
powers of the Board of Directors, subject to the restrictions that shall be imposed by the Board of Directors from time to time and by the Business Corporations Act (Québec). However, the Committee does not have the power to grant
options, which power has already been delegated by the Board of Directors to its Human Resources and Compensation Committee.

Audit Committee

Our Audit Committee is currently composed of three Directors, namely Messrs. Jean La Couture, Normand Provost and A. Michel
Lavigne. Mr. La Couture is the Chairman of our Audit Committee and our Board of Directors has determined that Mr. La Couture is an audit committee financial expert as defined under SEC rules. See Item 16A  Audit
Committee Financial Expert. Our Board of Directors has adopted the mandate of our Audit Committee in light of the Sarbanes-Oxley Act of 2002 and related SEC rulemaking. Our Audit Committee assists our Board of Directors in overseeing
our financial controls and reporting. Our Audit Committee also oversees our compliance with financial covenants and legal and regulatory requirements governing financial disclosure matters and financial risk management.

The current mandate of our Audit Committee provides, among other things, that our Audit Committee reviews our annual and quarterly
financial statements before they are submitted to our Board of Directors, as well as the financial information contained in our annual reports on Form 20-F, our managements discussion and analysis of financial condition and results of
operations, our quarterly reports furnished to the SEC under cover of Form 6-K and other documents containing similar information before their public disclosure or filing with regulatory authorities; reviews our accounting policies and practices;
and discusses with our independent auditors the scope of their audit, as well as our auditors recommendations and observations with respect to the audit, our accounting policies and financial reporting, and the responses of our management with
respect thereto. Our Audit Committee is also responsible for ensuring that we have in place adequate and effective internal control and management information systems to monitor our financial information and to ensure that our transactions with
related parties are made on terms that are fair for us. Our Audit Committee pre-approves all audit services and permitted non-audit services and pre-approves all the fees pertaining to those services that are payable to our independent auditor, and
submits the appropriate recommendations to our Board of Directors in connection with these services and fees. Our Audit Committee also reviews the scope of the audit and the results of the examinations conducted by our internal audit department. In
addition, our Audit Committee recommends the appointment of our independent auditors, subject to our shareholders approval. At least every five years, our Audit Committee carries out an assessment of the external auditor. It also reviews and
approves our Code of Ethics for the Chief Executive Officer, Chief Financial Officer, controller, principal financial officer and other persons performing similar functions.

Human Resources and Compensation Committee

Our Human Resources and
Compensation Committee is composed of Ms. Sylvie Lalande and Messrs. Pierre Laurin and A. Michel Lavigne. Mr. Lavigne is the Chair of our Human Resources and Compensation Committee. Our Human Resources and Compensation Committee was formed
with the mandate to examine and decide upon the global compensation and benefits policies of us and those of our subsidiaries that do not have a Human Resources and Compensation Committee, and to formulate appropriate recommendations to the Board of
Directors, among other things, concerning long-term compensation in the form of stock option grants. Our Human Resources and Compensation Committee is also responsible for the review, on an annual basis, of the compensation of our Directors.



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Liability Insurance

Quebecor carries liability insurance for the benefit of its Directors and officers, as well as for the Directors and officers of its subsidiaries, including Quebecor Media and our subsidiaries, against
certain liabilities incurred by them in such capacity. These policies are subject to customary deductibles and exceptions. The premiums in respect of this insurance are entirely paid by Quebecor, which is then reimbursed by Quebecor Media and its
subsidiaries for their ratable portion thereof.

D - Employees

At December 31, 2014, we had approximately 13,835 employees on a consolidated basis. At December 31, 2013 and 2012, we had approximately 15,110 and 16,865 employees on a consolidated basis,
respectively. A number of our employees work part-time. The following table sets forth certain information relating to our employees in each of our operating segments as of December 31, 2014.



|                         |  |                                     |        |  |                                                            |  |       |                                |  |  |    | 
|------------------------ |  | ----------------------------------- | ------ |  | ---------------------------------------------------------- |  | ----- | ------------------------------ |  |  | -- | 
|Operations               |  | Approximate totalnumberof employees |        |  | Approximate number ofemployees under collective agreements |  |       | Number ofcollective agreements | 
|Telecommunications       |  |                                     | 7,090  |  |                                                            |  | 4,145 |                                |  |  | 13 | 
|Videotron                |  |                                     | 6,190  |  |                                                            |  | 3,695 |                                |  |  | 4  | 
|Other                    |  |                                     | 900    |  |                                                            |  | 450   |                                |  |  | 9  | 
|                         |  |                                     |        |  |                                                            |  |       |                                |  |  |    | 
|Media                    |  |                                     | 6,260  |  |                                                            |  | 2,135 |                                |  |  | 64 | 
|Sun Media                |  |                                     | 2,285  |  |                                                            |  | 930   |                                |  |  | 44 | 
|TVA Group                |  |                                     | 2,275  |  |                                                            |  | 860   |                                |  |  | 13 | 
|Other                    |  |                                     | 1,700  |  |                                                            |  | 345   |                                |  |  | 7  | 
|                         |  |                                     |        |  |                                                            |  |       |                                |  |  |    | 
|Sports and Entertainment |  |                                     | 220    |  |                                                            |  |      |                                |  |  |   | 
|                         |  |                                     |        |  |                                                            |  |       |                                |  |  |    | 
|Corporate(1)             |  |                                     | 265    |  |                                                            |  |      |                                |  |  |   | 
|                         |  |                                     |        |  |                                                            |  |       |                                |  |  |    | 
|Total                    |  |                                     | 13,835 |  |                                                            |  | 6,280 |                                |  |  | 77 | 



|(1) | Includes QMI Digital, QMI Content and Bloobuzz.
|--- | -----------------------------------------------

At December 31, 2014, approximately 45% of our employees were represented by collective bargaining agreements. Through our subsidiaries, we are currently a party to 77 collective bargaining
agreements:



| |  |  | Videotron is party to four collective bargaining agreements representing approximately 3,695 unionized employees. Negotiations regarding one of the
most important collective bargaining agreement covering unionized employees in the Montréal region are still in progress; an agreement in principle has been reached, which remains subject to ratification. There are also three collective
bargaining agreements covering unionized employees in the Saguenay, Gatineau and Québec regions, with terms running through December 31, 2019, August 31, 2015 and December 31, 2018 respectively.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Archambault Retails is now party to eight collective bargaining agreements representing approximately 380
unionized employees. Negotiations are still in progress for the Berri store and negotiations will be undertaken in 2015 for the Place des Arts store as well as for the Customer Contact Center. Of the other collective bargaining agreements, one will
expire on April 1, 2015.

One other collective bargaining agreement covering approximately 70 employees of our SETTE inc.
subsidiary will expire by the end of the year on December 31, 2015.



| |  |  | Sun Media is party to 44 collective bargaining agreements, representing approximately 930 unionized employees. Of all the collective bargaining
agreements, three have expired by the end of 2014, representing approximately 55 employees, and three others will expire in 2015 representing approximately 30 employees. The others will expire on various dates through December 2019.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | TVA Group is party to 13 collective bargaining agreements, representing approximately 860 unionized employees. Of this number, eight collective
bargaining agreements, representing approximately 180 unionized employees or 21% of its unionized workforce, have expired in 2014. Negotiations regarding these collective bargaining agreements are in progress or will be undertaken in 2015. Two
collective bargaining agreements representing approximately 40 unionized employees will expire in 2015. The other collective bargaining agreements will expire on various dates through December 2018.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Of the other seven collective bargaining agreements, representing approximately 345 unionized employees, one collective bargaining agreement
representing approximately 30 unionized employees is expired and three others will expire in 2015. Negotiations regarding these collective bargaining agreements will be undertaken in 2015. The other collective bargaining agreements will expire
between February 2016 and December 2017.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We currently have no labour disputes nor do we currently
anticipate any such labour dispute in the near future.

We can neither predict the outcome of current or future negotiations
relating to labour disputes, if any, union representation or renewal of collective bargaining agreements, nor guarantee that we will not experience further work stoppages, strikes or other forms of labour protests pending the outcome of any current
or future negotiations. If our unionized workers engage in a strike or any other form of work stoppage, we could experience a significant disruption to our operations, damage to our property and/or interruption to our services, which could adversely
affect our business, assets, financial position, results of operations and reputation. Even if we do not experience strikes or other forms of labour protests, the outcome of labour negotiations could adversely affect our business and results of
operations. Such could be the case if current or future labour negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. In addition, our ability to make short-term adjustments to control
compensation and benefits costs is limited by the terms of our collective bargaining agreements.

E - Share Ownership

Except as disclosed under Item 7. Major Shareholders and Related Party Transactions  Major Shareholders of this annual
report, none of our equity securities are held by any of our Directors or senior executive officers. For a description of Quebecor Medias stock option plan, see B. Compensation above.

ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A - Major Shareholders

As of December 31, 2014, Capital CDPQ indirectly held 25,439,134 shares of our Corporation, representing a 24.6% interest in
Quebecor Media (excluding dilution from options under Quebecor Medias stock option plan) and Quebecor held, directly and indirectly, 77,812,366 common shares of our Corporation, representing a 75.4% voting and equity interest in us. The
primary asset of Quebecor, a communications holding company, is its interest in us. Capital CDPQ is a wholly owned subsidiary of the CDPQ, one of Canadas largest pension fund managers.

To the knowledge of our Directors and officers and according to public information available, the only persons or companies which, as at
March 19, 2015, beneficially owned or exercised control or direction over more than 10% of the shares of any class of voting shares of Quebecor were: Pierre Karl Péladeau, and Beutel, Goodman & Co. Ltd.



|                           |  |                              |            |  |                         |  |       |                             |  |  |                         |  |  |                                                             |       |   |  |  |       |  
|-------------------------- |  | ---------------------------- | ---------- |  | ----------------------- |  | ----- | --------------------------- |  |  | ----------------------- |  |  | ----------------------------------------------------------- | ----- | - |  |  | ----- | -
|Name                       |  | Number of Class A Sharesheld |            |  | % of Class A Sharesheld |  |       | Number ofClass B Sharesheld |  |  | % of Class B Sharesheld |  |  | % of voting rightsattached tooutstandingClass A and BShares |      
|Pierre Karl Péladeau       |  |                              | 34,936,928 |  |                         |  | 89.68 | %                           |  |  | 414,520                 |  |  |                                                             | 0.49  | % |  |  | 73.87 | %
|Beutel, Goodman & Co. Ltd. |  |                              |           |  |                         |  |      |                             |  |  | 12,249,418              |  |  |                                                             | 14.60 | % |  |  | 2.59  | %



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B - The Corporations Shareholders Agreement

We entered into a shareholders agreement, dated October 23, 2000, with Quebecor and certain of its wholly owned
subsidiaries, and Capital CDPQ, as consolidated and amended by a shareholders agreement dated December 11, 2000, which sets forth the rights and obligations of Quebecor and Capital CDPQ as our shareholders. Except as specifically provided
in the Corporations Shareholders Agreement, the rights thereunder apply only to shareholders holding at least 10% of our equity shares, which we refer to as QMI Shares, on a fully-diluted basis.

The Corporations Shareholders Agreement provides, among other things, for:



| | (a) | standard rights of first refusal with respect to certain transfers of QMI Shares;
| | --- | ---------------------------------------------------------------------------------



| | (b) | standard preemptive rights which permit shareholders to maintain their respective holdings of QMI Shares on a fully diluted basis in the event of issuances of
additional QMI Shares or our convertible securities;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | rights of representation on our Board of Directors in proportion to shareholdings, with Quebecor initially having five nominees and Capital CDPQ having four nominees to
our Board of Directors;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | consent rights in certain circumstances with respect to matters relating to us and our non-reporting issuer (public) subsidiaries, including (1) a substantial
change in the nature of our business and our subsidiaries taken as a whole, (2) an amendment to our articles or certain of our subsidiaries, (3) the merger or amalgamation of us or certain of our subsidiaries with a person other than an
affiliate, (4) the issuance by us or certain of our subsidiaries of shares or of securities convertible into shares except in the event of an initial public offering of QMI Shares, (5) any transaction having a value of more than
$75,000,000, other than the sale of goods and services in the normal course of business, and (6) a business acquisition in a business sector unrelated to sectors in which we and certain of our subsidiaries are involved;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | standard rights of first refusal in favor of Capital CDPQ with respect to the sale of all or substantially all of the shares or assets of TVA Group or Videotron; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | a non-competition covenant by Quebecor in respect of it and its affiliates pursuant to which Quebecor and its affiliates shall not compete with Quebecor Media and its
subsidiaries in their areas of activity so long as Quebecor has de jure or de facto control of us, subject to certain limited exceptions.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Corporations Shareholders Agreement provides that once we become a reporting issuer and have a 20% public float of
QMI Shares, certain provisions of the Corporations Shareholders Agreement will cease to apply, including the consent rights described under subsections (d)(4) and (f) in the description of the Corporations Shareholders
Agreement above.

In a separate letter agreement, dated December 11, 2000, Quebecor and Capital CDPQ agreed, subject to
applicable laws, fiduciary obligations and existing agreements, to attempt to apply the same board representation and consent rights as set forth in the Corporations Shareholders Agreement to our reporting issuer (public) subsidiaries so long
as Capital CDPQ holds at least 20% of the QMI Shares on a fully diluted basis or, in the case of TVA Group only, 10%.

In
connection with the October 2012 agreement with CDPQ regarding a partial sale of Capital CDPQs interest in Quebecor Media and the transactions contemplated thereunder, our shareholders agreed to amend the Corporations Shareholders
Agreement and entered into an amending agreement among Quebecor, certain of Quebecors wholly owned subsidiaries, CDPQ and Capital CDPQ providing for, among other things:



| | (a) | the addition of demand registration rights and piggyback registration rights in favour of Capital CDPQ, effective from and after January 1, 2019;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the addition of exit rights, effective on or after January 1, 2019, including the right of Capital CDPQ to require Quebecor Media to carry out an initial public
offering and the right of Capital CDPQ to sell its remaining interest in Quebecor Media to a financial third party, without providing any right of first refusal or first offer to Quebecor or Quebecor Media; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (c) | the addition of consent rights in respect of the declaration or payment of cumulative dividends by Quebecor Media in any financial year exceeding the greater of
(i) 25% of its consolidated net earnings in the immediately preceding financial year and (ii) $225 million.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On June 19, 2014, our shareholders, acting by written resolution, fixed the size of our Board of Directors to eight directors and established that Quebecor would be entitled to nominate six directors
and Capital CDPQ would be entitled to nominate two directors.

C - Certain Relationships and Related Party Transactions

Related Party Transactions

The following describes transactions in which the Corporation and its directors, executive officers and affiliates are involved. The Corporation believes that each of the transactions described below was
on terms no less favourable to Quebecor Media than could have been obtained from independent third parties.

Operating
transactions

During the year ended December 31, 2014, the Corporation and its subsidiaries made purchases and
incurred rent charges with the parent corporation and affiliated companies in the amount of $11.7 million ($12.1 million in 2013 and $14.4 million in 2012), which are included in purchase of goods and services. During the year ended
December 31, 2014, the Corporation and its subsidiaries made sales to an affiliated corporation in the amount of $3.3 million ($3.5 million in 2013 and $3.8 million in 2012). These transactions were accounted for at the
consideration agreed between parties.

Corporate reorganization

On June 28, 2012, the CRTC approved the sale of a 2% interest in SUN News by TVA Group to Sun Media. The transaction closed on
June 30, 2012 and, as a result, Sun Media holds a 51% interest and TVA Group holds a 49% interest in SUN News.

Management arrangements

The parent corporation has entered into management arrangements with the Corporation. Under these management arrangements, the parent corporation and the Corporation provide management services to each
other on a cost-reimbursement basis. The expenses subject to reimbursement include the salaries of the Corporations executive officers, who also serve as executive officers of the parent corporation.

In 2014, the Corporation received an amount of $2.2 million, which is included as a reduction in employee costs ($1.8 million
in 2013 and $1.7 million in 2012), and incurred management fees of $2.0 million ($2.0 million in 2013 and $1.1 million in 2012) with the Corporations shareholders.

Tax transactions

In 2014, the parent corporation transferred $12.5 million of non-capital losses ($29.0 million in 2013, $43.4 million in 2012 and none in 2011) to the Corporation and its subsidiaries in
exchange for a total cash consideration of $3.1 million ($6.9 million in 2013, $10.2 million in 2012 and none in 2011). This transaction was concluded on terms equivalent to those that prevail on an arms length basis and was
accounted for at the consideration agreed to between the parties. As a result, the Corporation recorded a reduction of $0.3 million in its income tax expense in 2014 ($0.9 million in 2013, $1.5 million in 2012 and none in 2011).

Bridge Financing and Standby Commitment Agreement

On December 30, 2014, the Corporation provided TVA Group with an unsecured $100 million bridge funding facility (the Bridge
Facility) bearing a maturity date of March 30, 2015, with an option to extend for a further 90-day period at



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the request of TVA Group, in order to fund the purchase price of the VG Acquisition. The Bridge Facility was unsecured. The Bridge Facility bore interest at the CDOR Rate plus 2.375% per
annum on drawn amounts, subject to an increase of the interest rate to the CDOR Rate plus 2.625% for a 90-day extension period, if applicable. No fee, other than the interests described herein, was payable by the TVA Group to QMI pursuant to the
bridge credit agreement governing the Bridge Facility (including, without limitation, any origination fee, facility fee, stand-by fee or administration fee). The net proceeds of the TVA Rights Offering have been used, in part, to repay all of the
amounts outstanding under the Bridge Facility on March 20, 2015.

On January 16, 2015, Quebecor Media entered into a
standby commitment agreement with TVA Group whereby Quebecor Media provided a standby commitment pursuant to which it was required to acquire any Class B Non-Voting Shares not subscribed for under the TVA Rights Offering, subject to certain
conditions, in consideration of a standby commitment fee of 1% of the aggregate gross proceeds of the Rights Offering payable by Groupe TVA to Quebecor Media.

On March 20, 2015, the closing of the TVA Rights Offering took place and an amount of $1.1 million was paid to Quebecor Media pursuant to the standby commitment agreement.

The TVA Rights Offering is currently expected to close on or about March 20, 2015.

D - Interests of Experts and Counsel

Not applicable.

ITEM 8  FINANCIAL INFORMATION

A - Consolidated Statements and Other Financial Information

The consolidated balance sheets of Quebecor Media as at December 31, 2014 and 2013, and the consolidated statements of income,
comprehensive income, equity and cash flows of Quebecor Media for each of the years in the three-year period ended December 31, 2014, as well as the Report of Independent Registered Public Accounting Firm thereon, are presented in Item
18. Financial Statements of this annual report (beginning on page F-1).

B - Legal
Proceedings

In February 2012, a settlement was reached in legal proceedings against some of our subsidiaries, initiated by
another corporation in relation to printing contracts, including the cancellation of printing contracts. The settlement did not have a material impact on our financial statements. In addition, we and our subsidiaries are involved in a number of
other legal proceedings against us which are pending. In the opinion of our management, the outcome of these proceedings is not expected to have a material adverse effect on our results or financial position.

C - Dividend Policy and Dividends

Dividend Policies and Payments

Our authorized share capital consists of (i) common shares, (ii) Cumulative First Preferred Shares, consisting of Series A Shares, Series B Shares, Series C Shares, Series D
Shares, Series F Shares and Series G Shares, and (iii) Preferred Shares, Series E. As of December 31, 2014, our issued and outstanding share capital was as follows:



| |  |  | 103,251,500 common shares outstanding, of which 77,812,366 were held by Quebecor and 25,439,134 were held by Capital CDPQ; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



133



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| |  |  | 430,000 Cumulative First Preferred Shares, Series G, outstanding, all of which were held by 9101-0835 Québec Inc., an indirect wholly-owned
subsidiary of Quebecor Media.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Holders of our common shares are entitled, subject to the rights of the
holders of any Preferred Shares, to receive such dividends as our Board of Directors shall determine in its discretion. In 2014, the Board of Directors of Quebecor Media declared and paid aggregate cash dividends on our common shares of $100
million. In 2013, the Board of Directors of Quebecor Media declared and paid aggregate cash dividends on our common shares of $100 million. In 2012, the Board of Directors of Quebecor Media declared and paid aggregate cash dividends on our common
shares of $100 million. We currently expect, to the extent permitted by our Articles of Incorporation, the terms of our indebtedness and applicable law, to continue to pay dividends to our shareholders or reduce paid-up capital in the future.

Holders of our Series A Shares are entitled to receive fixed cumulative preferred dividends at a rate of 12.5% per share
per annum. The dividends declared on the Series A Shares are payable semi-annually on a cumulative basis on January 14 and July 14 of each year. No dividends may be paid on any shares ranking junior to the Series A Shares unless all
dividends which shall have become payable on the Series A Shares have been paid or set aside for payment.

Holders of our
Series B Shares are entitled to receive a cumulative cash dividend, when, as and if declared by the Board of Directors. The dividend shall be payable only upon conversion of the Series B Shares into Common shares. Dividends are determined by the
Board of Directors in accordance with our Articles of Incorporation.

Holders of our Series C Shares are entitled to receive
fixed cumulative preferred dividends at a rate of 11.25% per share per annum. The dividends declared on the Series C Shares are payable semi-annually on a cumulative basis on June 20 and December 20 of each year. No dividends may be
paid on any shares ranking junior to the Series C Shares unless all dividends which shall have become payable on the Series C Shares have been paid or set aside for payment.

Holders of our Series D Shares are entitled to receive fixed cumulative preferred dividends at a rate of 11.0% per share per annum.
The dividends declared on the Series D Shares are payable semi-annually on a cumulative basis on June 20 and December 20 of each year. No dividends may be paid on any shares ranking junior to the Series D Shares unless all dividends
which shall have become payable on the Series D Shares have been paid or set aside for payment.

Holders of our Series E
Shares are entitled to receive a maximum non-cumulative preferred monthly dividend at a rate of 1.25% per month, calculated on the redemption price of the Series E Shares when, as and if declared by the Board of Directors. The Series E Shares
rank senior to the common shares but junior to the Series A Shares, Series B Shares, Series C Shares and Series D Shares.

Holders of our Series F Shares are entitled to receive fixed cumulative preferred dividends at a rate of 10.85% per annum per share.
The dividends declared on the Series F Shares are payable semi-annually on a cumulative basis on January 14 and July 14 of each year. No dividends may be paid on any shares ranking junior to the Series F Shares unless all dividends
which shall have become payable on the Series F Shares have been paid or set aside for payment.

Holders of our Series G
Shares are entitled to receive fixed cumulative preferred dividends at a rate of 10.85% per annum per share. The dividends declared on the Series G Shares are payable semi-annually on a cumulative basis on June 20 and December 20 of
each year. No dividends may be paid on any shares ranking junior to the Series G Shares unless all dividends which shall have become payable on the Series G Shares have been paid or set aside for payment.

D - Significant Changes

Except as otherwise disclosed in this annual report (including under Item 5. Operating and Financial Review and Prospects),
there has been no significant change in our financial position since December 31, 2014.

ITEM 9 
THE OFFER AND LISTING

A - Offer and Listing Details

Not applicable.



134



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B - Plan of Distribution

Not applicable.

C - Markets

Outstanding Notes

On October 11, 2012, we
issued and sold CAN$500.0 million aggregate principal amount of our 65/8% Senior Notes due 2023 and US$850.0 million aggregate principal amount of our 53/4% Senior Notes due 2023 in private placements exempt from the registration requirement of the Securities Act and prospectus requirements of applicable Canadian securities laws. Our 53/4% Senior Notes due 2023 and our 65/8% Senior Notes due 2023 are unsecured and are due on January 15, 2023, with cash interest payable
semi-annually in arrears on June 15 and December 15 of each year. In connection with the private placement of the
53/4% Senior Notes due 2023, we filed a registration statement on Form F-4 with the SEC on April 10, 2013 and completed the registered exchange offer on May 21, 2013. As a result of this exchange
offer, our 53/4% Senior Notes due 2023 issued on October 11, 2012 have been registered under the Securities Act. Our
65/8% Senior Notes due 2023 were not and will not be registered under the Securities Act or under the laws of any other jurisdiction.

On January 5, 2011, we issued and sold CAN$325.0 million aggregate principal amount of our 73/8% Senior Notes due 2021 in private placements exempt from the registration requirement of the Securities Act and prospectus requirements of applicable Canadian securities laws. Our 73/8% Senior Notes due 2021 are unsecured and are due on January 15, 2021, with cash interest payable semi-annually in arrears on June 15 and December 15 of each year. Our 73/8% Senior Notes due 2021 were not and will not be registered under the Securities Act or under the laws of any other jurisdiction.

There is currently no established trading market for our Senior Notes. There can be no assurance as to the liquidity
of any market that may develop for our outstanding Senior Notes, the ability of the holders of any such Senior Notes to sell them or the prices at which any such sales may be made. We have not and do not presently intend to apply for a listing of
our outstanding Senior Notes on any exchange or automated dealer quotation system. The record holder of our
53/4% Senior Notes due 2023 is Cede & Co., a nominee of The Depository Trust Company, and the record holder of our
73/8% Senior Notes due 2021 and our 65/8% Senior Notes due 2023 is CDS Clearing and Depository Services Inc.

D - Selling Shareholders

Not applicable.

E -
Dilution

Not applicable.

F - Expenses of the Issuer

Not applicable.

ITEM 10  ADDITIONAL INFORMATION

A - Share Capital

In addition to our common shares, our authorized share
capital is comprised of (i) Cumulative First Preferred Shares, Series A, or Series A Shares; (ii) Cumulative First Preferred Shares, Series B, or Series B Shares; (iii) Cumulative First Preferred Shares,
Series C, or Series C Shares; (iv) Cumulative First Preferred Shares, Series D, or Series D Shares; (v) Preferred Shares, Series E, or Series E Shares; (vi) Cumulative First Preferred Shares,
Series F, or Series F Shares; and (vii) Cumulative First Preferred Shares, Series G, or Series G Shares. As of December 31, 2014, there were no issued and outstanding preferred shares, other than the Series G Shares.



135



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As of December 31, 2014, there were 430,000 of our Series G Shares issued and
outstanding, all of which are held by 9101-0835 Québec Inc., one of our indirect wholly-owned subsidiaries. These Series G Shares have been issued in connection with transactions that consolidate
tax losses within the Quebecor Media group. The Series G Shares are non-voting shares. Holders of Series G Shares are entitled to a cumulative annual dividend of 10.85% per annum per share. Holders may require us to redeem the Series G Shares
at any time at a price of $1,000 per share plus any accumulated and unpaid dividends. In addition, we may, at our option, redeem the Series G Shares at a price of $1,000 per share plus any accumulated and unpaid dividends.

B - Memorandum and Articles of Association

On January 17, 2013, our Articles of Incorporation and the various Articles of Amendment were consolidated, as permitted by the Business Corporations Act (Quebec). These Articles of
Consolidation are filed as an exhibit to this annual report. In this description, we refer to our Articles of Consolidation as the Articles. The following is a summary of certain provisions of our Articles and our by-laws.

We were incorporated, in Canada, under Part IA of the Companies Act (Quebec) as 9093-9687 Québec Inc. on
August 8, 2000 under registration number 1149501992. Since its coming into force on February 14, 2011, we are governed by the Business Corporations Act (Quebec). On August 18, 2000, a Certificate of Amendment was filed to
change our name to Media Acquisition Inc. Our name was further changed to Quebecor Media on September 26, 2000. Our Articles do not describe our object and purpose.



|   |  |     |  |                                                                                                                                                                                                                                                                                        |  |    |  |                                                                               
|-- |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -- |  | ------------------------------------------------------------------------------
|1. |  | (a) |  | Our by-laws provide that a director must disclose the nature and value of any interest he has in a contract or transaction to which our Corporation is a party. A
director must also disclose a contract or transaction to which the Corporation and any of the following are a party:
|   |  |     |  |                                                                                                                                                                                                                                                                                       
|   |  |     |  |                                                                                                                                                                                                                                                                                        |  | a) |  | an associate of the director;                                                 
|   |  |     |  |                                                                                                                                                                                                                                                                                       
|   |  |     |  |                                                                                                                                                                                                                                                                                        |  | b) |  | a group of which the director is a director;                                  
|   |  |     |  |                                                                                                                                                                                                                                                                                       
|   |  |     |  |                                                                                                                                                                                                                                                                                        |  | c) |  | a group in which the director or an associate of the director has an interest.
|   |  |    
|   |  |     |  | No director may vote on a resolution to approve, amend or terminate the contract or transaction, or be present during deliberations concerning the approval, amendment or
termination of such a contract or transaction unless the contract or transaction:                           



| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |    |  |                                                                                                                                                                                                                                
| |  | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | a) |  | relates primarily to the remuneration of the director or an associate of the director as a director of the Corporation or an affiliate of the Corporation;                                                                     
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | b) |  | relates primarily to the remuneration of the director or an associate of the director as an officer, employee or mandatary of the Corporation or an affiliate of the Corporation, if
the Corporation is not a reporting issuer;
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | c) |  | is for the indemnification of the directors in certain circumstances or liability insurance taken out by the Corporation;                                                                                                      
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | d) |  | is with an affiliate of the Corporation, and the sole interest of the director is as a director or officer of the affiliate.                                                                                                   
| |  |    
| |  | (b) |  | Neither the Articles nor our by-laws contain provisions with respect to directors power, in the absence of an independent quorum, to determine their
remuneration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |    
| |  | (c) |  | Subject to any restriction which may from time to time be included in the Articles or our by-laws, or the terms, rights or restrictions of any of our shares or
securities outstanding, our directors may authorize us to borrow money and obtain advances upon the credit of our Corporation, from any bank, corporation, firm, association or person, upon such terms and conditions, in all respects, as they think
fit. The directors may authorize the issuance of bonds or other evidences of indebtedness of our Corporation, and may authorize the pledge or sale of the same upon such terms and conditions, in all respects, as they think
fit.



136



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| |  |  |  |                                                                                                                                                                                                                                                                 |  |  |  | 
| |  |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
| |  |  |  | The directors are also authorized to hypothecate the property, undertaking and assets, movable or immovable, of our Corporation to secure payment for any bonds or other
evidences of indebtedness or otherwise give guarantees to secure the payment of loans.

Neither the Articles nor our by-laws contain any provision with respect to (i) the retirement or
non-retirement of our directors under an age limit requirement or (ii) the number of shares, if any, required for the qualification of our directors.



|2. | The rights, preferences and restrictions attaching to our common shares, Cumulative First Preferred Shares (consisting of the Series A Shares, the Series B Shares, the
Series C Shares, the Series D Shares, the Series F Shares and the Series G Shares) and our Preferred Shares, Series E are set forth below:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Common Shares



| | (a) | Dividend rights: Subject to the rights of the holders of our Preferred Shares, each common share shall be entitled to receive such dividends as our Board
of Directors shall determine.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: The holders of our common shares shall be entitled to receive notice of any meeting of our shareholders and to attend and vote on all
matters to be voted on by our shareholders, except at meetings at which only the holders of another specified series or class of shares are entitled to vote. At each such meeting, each common share shall entitle the holder thereof to one vote.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Other than as provided in paragraph (a) above (the holders of our common shares are entitled to receive dividends as
determined by our Board of Directors) and paragraph (d) below (the holders of our common shares are entitled to participation in our remaining property and assets available for distribution in the event of our liquidation, dissolution or
reorganization), none.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding up our affairs, whether voluntarily or involuntarily, the holders of our common shares shall be entitled, subject to the rights of the holders of Preferred Shares, to participate equally, share for share, in our remaining
property and assets available for distribution to our shareholders, without preference or distinction.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: None
| | --- | ---------------------------



| | (f) | Sinking fund provisions: None
| | --- | -----------------------------



| | (g) | Liability to capital calls by Quebecor Media: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to
time, accept subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the
Business Corporations Act (Quebec) and as determined by the Board of Directors. Our directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of common shares as a result of such holder owning a substantial number of shares:None
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------

For a description of the Corporations Shareholders Agreement among the holders of our common
stock, see Item 7. Major Shareholders and Related Party Transactions  Major Shareholders in this annual report.

Cumulative First Preferred Shares

Our Board of Directors may issue Cumulative First Preferred Shares at any time and from time to time in one or more series. Unless the Articles otherwise provide, the Cumulative First Preferred Shares of
each series shall rank on parity with the Cumulative First Preferred Shares of every other series with respect to priority in the payment of dividends, return of capital and in the distribution of our assets in the event of our liquidation or
dissolution. Unless the Articles otherwise provide, the Cumulative First Preferred Shares shall be entitled to priority over our common shares and any other class of our shares, with respect to priority in the payment of dividends, return of capital
and in the distribution of our assets in the event of liquidation or dissolution.



137



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As long as there are Cumulative First Preferred Shares outstanding, we shall not,
unless consented to by the holders of the Cumulative First Preferred Shares and upon compliance with the provisions of the Business Corporations Act (Quebec), (a) create any other class of shares ranking pari passuor in priority
to any outstanding series of the Cumulative First Preferred Shares, (b) voluntarily liquidate or dissolve our Corporation or execute any decrease of capital involving the distribution of assets on any other shares of our capital stock or
(c) repeal, amend or otherwise alter any provisions of the Articles relating to any series of the Cumulative First Preferred Shares.

Cumulative First Preferred Shares, Series A (Series A Shares)



| | (a) | Dividend rights: The holders of record of the Series A Shares shall be entitled to receive in each fiscal year fixed cumulative preferred dividends
at the rate of 12.5% per share per annum. No dividends may be paid on any shares ranking junior to the Series A Shares unless all dividends which shall have become payable on the Series A Shares have been paid or set aside for payment.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: Holders of Series A Shares shall not, as such, be entitled to receive notice of, or attend or vote at, any meeting of our shareholders
unless we shall have failed to pay certain semi-annual dividends on the Series A Shares. In that event and only for so long as the dividend remains in arrears, the holders of Series A Shares shall be entitled to receive notice of, and to attend and
vote at, all shareholders meetings, except meetings at which only holders of another specified series or class of shares are entitled to vote. At each such meeting, each Series A Share shall entitle the holder thereof to one vote.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (the holders of Series A Shares are entitled to receive a 12.5% cumulative
preferential dividend) and paragraph (d) below (the holders of Series A Shares are entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series A Share and any accumulated and unpaid dividends with
respect thereto in the event of our liquidation, dissolution or reorganization), none.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series A Shares shall be entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series A Share and any accumulated
and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: Holders of Series A Shares may require us to redeem the Series A preferred shares at any time at a price of $1,000 per share plus
any accumulated and unpaid dividends with respect thereto. In addition, we may, at our option, redeem the Series A Shares at a price of $1,000 per share plus any accumulated and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by us: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to time, accept
subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the Business
Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series A Shares as a result of such holders owning a substantial number of shares:
None.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



138



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Cumulative First Preferred Shares, Series B (Series B Shares)



| | (a) | Dividend rights: The holders of record of the Series B Shares shall be entitled to receive a single cumulative dividend, payable in cash, in an amount to
be determined by our Board of Directors in accordance with the Articles, which dividend, once determined by our Board of Directors, shall be paid on the date of conversion of the Series B Shares into our common shares. No dividends may be paid on
any shares ranking junior to the Series B Shares unless all dividends which shall have become payable on the Series B Shares have been paid or set aside for payment.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: Holders of Series B Shares, as such, shall not be entitled to receive notice of, and to attend or vote at, any meeting of our shareholders,
unless we shall have failed to pay the dividend due to such holders. In that event and only for so long as the said dividend remains in arrears, the holders of Series B Shares shall be entitled to receive notice of, and to attend and vote at, all
shareholders meetings, except meetings at which only holders of another specified series or class of shares are entitled to vote. At each such meeting, each Series B Share shall entitle the holder thereof to one vote.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (the holders of Series B Shares are entitled to receive the dividend
referred to in paragraph (a) above) and paragraph (d) below (the holders of the Series B Shares are entitled to receive, in preference to the holders of common shares, an amount equal to $1.00 per Series B Share and the dividend referred
to in paragraph (a) above in the event of liquidation, dissolution or reorganization), none.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series B Shares shall be entitled to receive, in preference to the holders of common shares, an amount equal to $1.00 per Series B Share held and the
dividend referred to in paragraph (a) above.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: Holders of Series B Shares may require us to redeem the Series B Shares at any time at a price of $1.00 per share plus the dividend
referred to in paragraph (a) above. In addition, we may, at our option, redeem the Series B Shares at a price of $1.00 per share plus the dividend referred to in paragraph (a) above.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by us: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to time, accept
subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the Business
Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series B Shares as a result of such holders owning a substantial number of shares:
None.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Cumulative First Preferred Shares, Series C (Series C Shares)



| | (a) | Dividend rights: The holders of record of the Series C Shares shall be entitled to receive in each fiscal year fixed cumulative preferred dividends at the
rate of 11.25% per share per annum. No dividends may be paid on any shares ranking junior to the Series C Shares unless all dividends which shall have become payable on the Series C Shares have been paid or set aside for payment.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: Holders of Series C Shares shall not, as such, be entitled to receive notice of, or attend or vote at, any meeting of our shareholders
unless we shall have failed to pay certain dividends on the Series C Shares. In that event and only for so long as the dividend remains in arrears, the holders of Series C Shares shall be entitled to receive notice of, and to attend and vote at, all
shareholders meetings, except meetings at which only holders of another specified series or class of shares are entitled to vote. At each such meeting, each Series C Share shall entitle the holder thereof to one vote.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



139



---

| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (the holders of Series C Shares are entitled to receive a 11.25% cumulative
preferential dividend) and paragraph (d) below (the holders of Series C Shares are entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series C Share and any accumulated and unpaid dividends with
respect thereto in the event of our liquidation, dissolution or reorganization), none.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series C Shares shall be entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series C Share and any accumulated
and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: Holders of Series C Shares may require us to redeem the Series C preferred shares at any time at a price of $1,000 per share plus
any accumulated and unpaid dividends with respect thereto. In addition, we may, at its option, redeem the Series C Shares at a price of $1,000 per share plus any accumulated and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by us: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to time, accept
subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the Business
Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series C Shares as a result of such holders owning a substantial number of shares:
None.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Cumulative First Preferred Shares, Series D (Series D Shares)



| | (a) | Dividend rights: The holders of record of the Series D Shares shall be entitled to receive in each fiscal year fixed cumulative preferred dividends at the
rate of 11.0% per share per annum. No dividends may be paid on any shares ranking junior to the Series D Shares unless all dividends which shall have become payable on the Series D Shares have been paid or set aside for payment.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: Holders of Series D Shares shall not, as such, be entitled to receive notice of, or attend or vote at, any meeting of our shareholders
unless we shall have failed to pay certain dividends on the Series D Shares. In that event and only for so long as the dividend remains in arrears, the holders of Series D Shares shall be entitled to receive notice of, and to attend and vote at, all
shareholders meetings, except meetings at which only holders of another specified series or class of shares are entitled to vote. At each such meeting, each Series D Share shall entitle the holder thereof to one vote.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (the holders of Series D Shares are entitled to receive a 11.0% cumulative
preferential dividend) and paragraph (d) below (the holders of Series D Shares are entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series D Share and any accumulated and unpaid dividends with
respect thereto in the event of our liquidation, dissolution or reorganization), none.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for the purpose
of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series D Shares shall be entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series D Share and any accumulated and unpaid
dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



140



---

| | (e) | Redemption provisions: Holders of Series D Shares may require us to redeem the Series D preferred shares at any time at a price of $1,000 per share plus
any accumulated and unpaid dividends with respect thereto. In addition, we may, at its option, redeem the Series D Shares at a price of $1,000 per share plus any accumulated and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by us: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to time, accept
subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the Business
Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series D Shares as a result of such holders owning a substantial number of shares:
None.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Cumulative First Preferred Shares, Series F (Series F Shares)



| | (a) | Dividend rights: The holders of record of the Series F Shares shall be entitled to receive in each fiscal year fixed cumulative semi-annual dividends at
the rate of 10.85% per share per annum. No dividends may be paid on any shares ranking junior to the Series F Shares unless all dividends which shall have become payable on the Series F Shares have been paid or set aside for payment.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: Holders of Series F Shares shall not, as such, be entitled to receive notice of, or attend or vote at, any meeting of our shareholders
unless we shall have failed to pay eight semi-annual dividends on the Series F Shares. In that event and only for so long as the dividend remains in arrears, the holders of Series F Shares shall be entitled to receive notice of, and to attend and
vote at, all shareholders meetings, except meetings at which only holders of another specified series or class of shares are entitled to vote. At each such meeting, each Series F Share shall entitle the holder thereof to one vote.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (holders of Series F Shares are entitled to receive a 10.85% cumulative
preferential semi-annual dividend) and paragraph (d) below (the holders of Series F Shares are entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series F Share and any accumulated and unpaid
dividends with respect thereto in the event of our liquidation, dissolution or reorganization), none.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series F Shares shall be entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series F Share and any accumulated
and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: Holders of Series F Shares may require us to redeem the Series F preferred shares at any time at a price of $1,000 per share plus
any accumulated and unpaid dividends with respect thereto. In addition, we may, at our option, redeem the Series F Shares at a price of $1,000 per share plus any accumulated and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by Quebecor Media: Our by-laws and the Business Corporations Act (Quebec) provide that our directors
may, from time to time, accept subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | terms and conditions, for such consideration not contrary to law or to the Business Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to
time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series F Shares as a result of such holders owning a substantial number of shares:None.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

Cumulative First Preferred Shares, Series G (Series G Shares)



| | (a) | Dividend rights: The holders of record of the Series G Shares shall be entitled to receive in each fiscal year fixed cumulative semi-annual dividends at
the rate of 10.85% per share per annum. No dividends may be paid on any shares ranking junior to the Series G Shares unless all dividends which shall have become payable on the Series G Shares have been paid or set aside for payment.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Voting rights: Holders of Series G Shares shall not, as such, be entitled to receive notice of, or attend or vote at, any meeting of our shareholders
unless we shall have failed to pay eight semi-annual dividends on the Series G Shares. In that event and only for so long as the dividend remains in arrears, the holders of Series G Shares shall be entitled to receive notice of, and to attend and
vote at, all shareholders meetings, except meetings at which only holders of another specified series or class of shares are entitled to vote. At each such meeting, each Series G Share shall entitle the holder thereof to one vote.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (holders of Series G Shares are entitled to receive a 10.85% cumulative
preferential semi-annual dividend) and paragraph (d) below (the holders of Series G Shares are entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series G Share and any accumulated and unpaid
dividends with respect thereto in the event of our liquidation, dissolution or reorganization), none.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series G Shares shall be entitled to receive, in preference to the holders of common shares, an amount equal to $1,000 per Series G Share and any accumulated
and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: Holders of Series G Shares may require us to redeem the Series G preferred shares at any time at a price of $1,000 per share plus
any accumulated and unpaid dividends with respect thereto. In addition, we may, at our option, redeem the Series G Shares at a price of $1,000 per share plus any accumulated and unpaid dividends with respect thereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by Quebecor Media: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to
time, accept subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the
Business Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series G Shares as a result of such holders owning a substantial number of shares:
None.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Preferred Shares

Preferred Shares, Series E (Series E Shares)



| | (a) | Dividend rights: The holders of record of the Series E Shares shall be entitled to receive a maximum non-cumulative preferential monthly dividend at the
rate of 1.25% per share per month, which dividend shall be calculated based on the redemption price (the amount equal to the aggregate consideration for such share). The Series E Shares rank senior to the common shares but junior to the Series
A Shares, Series B Shares, Series C Shares and Series D Shares.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (b) | Voting rights: Holders of Series E Shares shall not, as such, be entitled to receive notice of, or attend or vote at, any meeting of our shareholders.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Rights to share in our profits: Except as provided in paragraph (a) above (the holders of Series E Shares are entitled to receive a 1.25% maximum
non-cumulative preferential monthly dividend) and paragraph (d) below (the holders of Series E Shares are entitled to receive, in preference to the holders of common shares, but subsequent to the holders of Series A Shares, Series B Shares,
Series C Shares and Series D Shares, an amount equal to the redemption price of the Series E Shares and the amount of any declared but unpaid dividends on the Series E Shares referred to in paragraph (a) above), none.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Rights upon liquidation: In the event of our liquidation, dissolution or reorganization or any other distribution of our assets among our shareholders for
the purpose of winding-up our affairs, whether voluntarily or involuntarily, the holders of Series E Shares shall be entitled to receive, in preference to the holders of common shares, but subsequent to the holders of Series A Shares, Series B
Shares, Series C Shares and Series D Shares, an amount equal to the redemption price of the Series E Shares held and the amount of any declared but unpaid dividends on the Series E Shares referred to in paragraph (a) above.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Redemption provisions: Holders of Series E Shares may require us to redeem the Series E preferred shares at any time at a price equal to the redemption
price plus an amount equal to any dividends declared thereon but unpaid up to the date of redemption. The redemption price shall be equal to the aggregate consideration received for such share.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Sinking fund provisions: None.
| | --- | ------------------------------



| | (g) | Liability to capital calls by Quebecor Media: Our by-laws and the Business Corporations Act (Quebec) provide that our directors may, from time to
time, accept subscriptions, allot, issue, grant options in respect of or otherwise dispose of the whole or any part of the unissued shares of our share capital on such terms and conditions, for such consideration not contrary to law or to the
Business Corporations Act (Quebec) and as determined by the Board of Directors. The directors may, from time to time, make calls upon the shareholders in respect of any moneys unpaid upon their shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | Provisions discriminating against existing or prospective holders of Series E Shares: None.
| | --- | -------------------------------------------------------------------------------------------



|3. | Actions necessary to change the rights of shareholders: For a description of the action necessary to change the rights of
holders of our Cumulative First Preferred Shares, see Cumulative First Preferred Shares in section 2 above. As regards our Preferred Shares, Series E, we will not, unless consented to by the holders of the Series E Shares and upon
compliance with the provisions of the Business Corporations Act (Quebec), repeal, amend or otherwise alter any provisions of the Articles relating to the Series E Shares. Under the general provisions of the Business Corporations Act
(Quebec), (i) our Articles may be amended by the affirmative vote of the holders of two-thirds (2/3) of the votes cast by the shareholders at a special meeting, and (ii) our by-laws may be amended by our Board of
Directors and ratified by a majority of the votes cast by the shareholders at the next shareholders meeting. Unless they are rejected by the shareholders at the close of the meeting or not submitted to the shareholders, the amended by-laws are
effective as of the date of the resolution of the Board of Directors approving them. However, by-laws amendments relating to procedural matters with respect to shareholders meetings take effect only once they have received shareholders approval.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | Shareholder Meetings: Our by-laws and the Business Corporations Act (Québec) provide that the annual meeting of our shareholders shall be
held within fifteen (15) months after the last preceding annual meeting. All shareholders meetings shall be held within the province of Québec at the place and time determined by our Board of Directors and may be called by order of our
Board of Directors.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Our by-laws provide that notice specifying the place, date, time and purpose of any meeting
of our shareholders shall be sent to all the shareholders entitled to vote and to each director at least 21 days but not more than 60 days before the meeting by any means providing proof of the date of sending at the addresses indicated in our
records.

Our chairman of the board or, in his absence, our vice-chair of the board, if any, or in his absence, our president
and chief executive officer or any other person that may be named by the board shall preside at all meetings of our shareholders. If the person who is to chair the meeting is not present at the meeting within 15 minutes after the time appointed for
the meeting, the shareholders present choose one of their own to chair of the board the meeting.

Our by-laws provide that a
quorum of shareholders is present at a shareholders meeting if, at the opening of the meeting, one or several holders of 50% or more of the shares that carry the right to vote at the meeting are present in person or represented by proxy.



|5. | Limitations on right to own securities: There are regulations related to the ownership and control of Canadian broadcast undertakings as
described under Item 4  Information on the Corporation  Regulation. There is no limitation imposed by Canadian law or by the Articles or our other constituent documents on the right of non-residents or foreign owners to hold
or vote shares, other than as provided in the Investment Canada Act (Canada) and the Radiocommunication Act. The Investment Canada Act (Canada) requires non-Canadian (as defined in the Investment Canada Act (Canada))
individuals, governments, corporations and other entities who wish to acquire control of a Canadian business (as defined in the Investment Canada Act (Canada)) to file either an application for review (when certain asset value
thresholds are met) or a post closing notification with the Director of Investments appointed under the Investment Canada Act (Canada), unless a specific exemption applies. The Investment Canada Act (Canada) requires that, when an
acquisition of control of a Canadian business by a non-Canadian is subject to review, it must be approved by the Minister responsible for the Investment Canada Act (Canada) on the basis that the Minister is satisfied that the
acquisition is likely to be of net benefit to Canada, having regard to criteria set forth in the Investment Canada Act (Canada). Radio licenses may be issued under the Radiocommunication Act to radiocommunication service providers
(Service Providers) that meet the eligibility criteria of Canadian ownership and control set forth in theCanadian Telecommunications Common Carrier Ownership and Control Regulations (the CTCCOCR).
Under the CTCCOCR, the holding corporation of a Service Provider may refuse to accept any subscription for or register the transfer of any of its voting shares unless it receives a declaration that such subscription or transfer would not result in
the percentage of the total voting shares of the holding corporation of the Service Provider that are beneficially owned and controlled by non-Canadians exceeding
331/3%.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. | Provisions that could have the effect of delaying, deferring or preventing a change of control: The Articles provide that none of our shares may be
transferred without the consent of the directors expressed in a resolution duly adopted by them.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A register of
transfers containing the date and particulars of all transfers of shares of our share capital shall be kept either at our head office or at any other place designated by the Board of Directors.



|7. | Not applicable.
|-- | ---------------



|8. | Not applicable.
|-- | ---------------



|9. | Not applicable.
|-- | ---------------

C- Material Contracts

The following is a summary of each material contract, other than contracts entered into in the ordinary course of
business, to which we or any of our subsidiaries is a party, for the two years preceding publication of this annual report.



| | (a) | Indenture relating to CAN$500,000,000 of our
65/8% Senior Notes due January 15, 2023, dated as of October 11, 2012, by and between Quebecor Media, and Computershare Trust Company of Canada, as trustee.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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On October 11, 2012, we issued CAN$500,000,000 aggregate principal
amount of our 65/8% Senior Notes due January 15, 2023 pursuant to an Indenture, dated as of October 11, 2012, by and between Quebecor Media and Computershare Trust Company of Canada, as trustee. These senior
notes are unsecured and mature on January 15, 2023. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are not guaranteed by our subsidiaries. These
senior notes are redeemable, at our option, under certain circumstances and at the make-whole redemption price set forth in the indenture. This indenture contains customary restrictive covenants with respect to Quebecor Media and certain
of its subsidiaries and customary events of default. If an event of default occurs and is continuing, other than our bankruptcy or insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior
notes may declare all the senior notes to be due and payable immediately. The senior notes issued pursuant to this indenture were not and will not be registered under the Securities Act or under the laws of any other jurisdiction.



| | (b) | Indenture relating to US$850,000,000 of our
53/4% Senior Notes due January 15, 2023 dated as of October 11, 2012, by and between Quebecor Media, and U.S. Bank National Association, as trustee.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On October 11, 2012, we issued US$850,000,000 aggregate principal amount of our 53/4% Senior Notes due January 15, 2023 pursuant to an Indenture dated as of October 11, 2012, by and between Quebecor Media and U.S. Bank National Association, as trustee. These senior notes are
unsecured and mature on January 15, 2023. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are not guaranteed by our subsidiaries. These senior
notes are redeemable, at our option, under certain circumstances and at the make-whole redemption price set forth in the indenture. The indenture contains customary restrictive covenants with respect to Quebecor Media and certain of its
subsidiaries and customary events of default. If an event of default occurs and is continuing, other than our bankruptcy or insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes
may declare all the senior notes to be due and payable immediately.



| | (c) | Indenture relating to CAN$325,000,000 of our
73/8% Senior Notes due January 15, 2021, dated as of January 5, 2011, by and between Quebecor Media, and Computershare Trust Company of Canada, as trustee.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On January 5, 2011, we issued CAN$325,000,000 aggregate principal
amount of our 73/8% Senior Notes due January 15, 2021 pursuant to an Indenture, dated as of January 5, 2011, by and between Quebecor Media and Computershare Trust Company of Canada, as trustee. These senior
notes are unsecured and mature on January 15, 2021. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are not guaranteed by our subsidiaries. These
senior notes are redeemable, at our option, under certain circumstances and at the redemption prices set forth in this indenture. This indenture contains customary restrictive covenants with respect to Quebecor Media and certain of its subsidiaries
and customary events of default. If an event of default occurs and is continuing, other than our bankruptcy or insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare
all the senior notes to be due and payable immediately. The senior notes issued pursuant to this indenture were not and will not be registered under the Securities Act or under the laws of any other jurisdiction.



| | (d) | Indenture relating to US$700,000,000 of our
73/4% Senior Notes due March 15, 2016, dated as of October 5, 2007, by and between Quebecor Media, and U.S. Bank National Association, as trustee.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On October 5, 2007, we issued US$700,000,000 aggregate principal amount of our 7 3/4% Senior Notes due March 15, 2016 pursuant to an Indenture, dated as of October 5, 2007, by and between Quebecor Media and U.S. Bank National Association, as trustee. These senior notes
were unsecured, bearing a maturity date of March 15, 2016. Interest on these senior notes was payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes were not guaranteed by our
subsidiaries. These senior notes were redeemable, at our option, under certain circumstances and at the redemption prices set forth in this indenture. The indenture contained customary restrictive covenants with respect to Quebecor Media and certain
of its subsidiaries and customary events of default. If an event of default occurred and was continuing,



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other than our bankruptcy or insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes could declare all the senior notes to be
due and payable immediately. These senior notes were issued under a different indenture from, and did not form a single series and were not fungible with, our
73/4% Senior Notes due 2016 which we issued in 2006, as described in paragraph (e) below. On November 2, 2012, Quebecor Media redeemed and retired US$320,000,000 aggregate principal amount of its
outstanding 73/4% Senior Notes due 2016. On April 25, 2014, Quebecor Media redeemed and retired the entire remaining principal amount outstanding of its 73/4% Senior Notes issued on October 5, 2007.



| | (e) | Indenture relating to US$525,000,000 of our
73/4% Senior Notes due March 15, 2016, dated as of January 17, 2006, by and between Quebecor Media, and U.S. Bank National Association, as trustee.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On January 17, 2006, we issued US$525,000,000 aggregate principal amount of our 73/4% Senior Notes due March 15, 2016 pursuant to an Indenture, dated as of January 17, 2006, by and between Quebecor Media and U.S. Bank National Association, as trustee. These senior notes
were unsecured, bearing a maturity date of March 15, 2016. Interest on these senior notes was payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes were not guaranteed by our
subsidiaries. These senior notes were redeemable, at our option, under certain circumstances and at the redemption prices set forth in this indenture. The indenture contained customary restrictive covenants with respect to Quebecor Media and certain
of its subsidiaries and customary events of default. If an event of default occurred and was continuing, other than our bankruptcy or insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding
senior notes could declare all the senior notes to be due and payable immediately. These senior notes were issued under a different indenture from, and did not form a single series and were not fungible with, our 73/4% Senior Notes due 2016 which we issued in 2007, as described in the previous paragraph. On August 30, 2013, Quebecor Media redeemed and retired the entire remaining principal amount outstanding of
its 73/4% Senior Notes issued on January 17, 2006.



| | (f) | Amended and Restated Credit Agreement, dated as of June 14, 2013, as amended, by and among Quebecor Media, as borrower, the financial institutions party thereto
from time to time, as lenders, and Bank of America, N.A., as administrative agent.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our senior secured credit
facilities are comprised of a $300,000,000 revolving credit facility (Revolving Facility) that matures on January 15, 2017 and a US$350,000,000 term credit facility (Facility B) that matures on August 17, 2020.
Our senior secured credit facilities also provide us with the ability to borrow up to an additional amount of $800,000,000 (minus the equivalent amount in Canadian dollars of Facility B as of August 1, 2013) under an uncommitted
incremental facility (or increase to the Revolving Facility or Facility B), subject to absence of default and lenders being willing to fund the incremental amount. We may draw letters of credit under our Revolving Facility. The proceeds of our
senior secured credit facilities may be used for our general corporate purposes.

Borrowings under the Revolving Facility bear
interest at the Canadian prime rate, the U.S. prime rate, the bankers acceptance rate or U.S. LIBOR, plus, in each case, an applicable margin. With regard to Canadian prime rate advances and U.S. prime rate advances under the Revolving
Facility, the applicable margin is determined by our Leverage Ratio (as defined in our senior secured credit facilities) and ranges from 1.125% when this ratio is less than or equal to 2.75x to 2.00% when this ratio is greater than 4.5x. With regard
to bankers acceptances and letters of credit under the Revolving Facility, the applicable margin ranges from 2.125% when our Leverage Ratio is less than or equal to 2.75x to 3.00% when this ratio is greater than 4.5x. With regard to
U.S. LIBOR advances under the Revolving Facility, the applicable margin ranges from 2.125% when our Leverage Ratio is less than or equal to 2.75x to 3.00% when this ratio is greater than 4.5x. Specified commitment fees or drawing fees may also
be payable. Borrowings under Facility B bear interest at the U.S. prime rate or U.S. LIBOR, plus, in each case, an applicable margin. With regard to U.S. prime rate advances under Facility B, the applicable margin is 1.5% and with regard
to U.S. LIBOR advances under Facility B, the applicable margin is 2.5%. Borrowings under the Revolving Facility are repayable in full on January 15, 2017 and those under Facility B are repayable in full on August 17, 2020.



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Borrowings under our senior secured credit facilities and under eligible derivative
instruments are secured by a first-ranking hypothec and security agreement (subject to certain permitted encumbrances) on all of our movable property and first-ranking pledges of all of the shares (subject to certain permitted encumbrances) of
Videotron.

Our senior secured credit facilities contain customary covenants that restrict and limit our ability to, among
other things, enter into merger or amalgamation transactions, grant encumbrances, sell assets, pay dividends or make other distributions, incur indebtedness and enter into related party transactions. In addition, our senior secured credit facilities
contain customary financial covenants solely for the benefit of lenders under the Revolving Facility. Our senior secured credit facilities contain customary events of default including the non-payment of principal or interest, the breach of any
financial covenant, the failure to perform or observe any other covenant, certain bankruptcy events relating to Quebecor Media and its material subsidiaries (including Videotron), and the occurrence of a change of control.



| | (g) | Indenture relating to US$175,000,000 of Videotrons
63/8% Senior Notes due December 15, 2015, dated as of September 16, 2005, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On September 16, 2005, Videotron issued US$175,000,000 aggregate
principal amount of its 63/8% Senior Notes due December 15, 2015, pursuant to an Indenture, dated as of September 16, 2005, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank, National
Association, as trustee. These senior notes are unsecured and mature on December 15, 2015. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are
guaranteed on a senior unsecured basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under certain circumstances and at the redemption prices set forth in the indenture. The
indenture contains customary restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default occurs and is continuing, other than Videotrons bankruptcy or insolvency, the
trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable immediately. On March 11, 2015, Videotron announced that it had issued a notice
of redemption for all of its outstanding
63/8% Senior Notes due December 15, 2015. The redemption is anticipated to be completed on April 10, 2015.



| | (h) | Indenture relating to US$715,000,000 of Videotrons
91/8% Senior Notes due April 15, 2018, dated as of April 15, 2008, as supplemented, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On April 15, 2008, Videotron issued US$455,000,000 aggregate principal
amount of its 91/8% Senior Notes due April 15, 2018, pursuant to an Indenture, dated as of April 15, 2008, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank, National
Association, as trustee. On March 5, 2009, Videotron issued an additional US$260,000,000 aggregate principal amount of these
91/8% Senior Notes due 2018. These senior notes, which form a single series and class, are unsecured and mature on April 15, 2018. Interest on these senior notes is payable in cash semi-annually in
arrears on June 15 and December 15 of each year. These senior notes are guaranteed on a senior unsecured basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under
certain circumstances and at the redemption prices set forth in the indenture. The indenture contains customary restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default
occurs and is continuing, other than Videotrons bankruptcy or insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable
immediately. On July 2, 2013 Videotron redeemed and retired US$380,000,000 aggregate principal amount of Videotrons outstanding 91/8% Senior Notes due 2018. On April 24, 2014, Videotron redeemed and retired
US$260,000,000 aggregate principal amount of Videotrons outstanding 91/8% Senior Notes due 2018.



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| | (i) | Indenture relating to CAN$300,000,000 of Videotrons
71/8% Senior Notes due January 15, 2020, dated as of January 13, 2010, as supplemented, by and among Videotron, the guarantors party thereto, and Computershare Trust Company of Canada, as
trustee.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On January 13, 2010, Videotron issued CAN$300,000,000
aggregate principal amount of its
71/8% Senior Notes due January 15, 2020, pursuant to an Indenture, dated as of January 13, 2010, by and among Videotron, the guarantors party thereto, and Computershare Trust Company of Canada,
as trustee. These senior notes are unsecured and mature on January 15, 2020. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are guaranteed on a
senior unsecured basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under certain circumstances and at the redemption prices set forth in the indenture. The indenture contains
customary restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default occurs and is continuing, other than Videotrons bankruptcy or insolvency, the trustee or the
holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable immediately. The senior notes issued pursuant to this indenture were not and will not be registered
under the Securities Act or under the laws of any other jurisdiction.



| | (j) | Indenture relating to CAN$300,000,000 of Videotrons
67/8% Senior Notes due July 15, 2021, dated as of July 5, 2011, as supplemented, by and among Videotron, the guarantors party thereto, and Computershare Trust Company of Canada, as trustee.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On July 5, 2011, Videotron issued CAN$300,000,000 aggregate principal
amount of its 67/8% Senior Notes due July 15, 2021, pursuant to an Indenture, dated as of July 5, 2011, by and among Videotron, the guarantors party thereto, and Computershare Trust Company of Canada, as trustee.
These senior notes are unsecured and mature on July 15, 2021. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are guaranteed on a senior unsecured
basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under certain circumstances and at the redemption prices set forth in the indenture. The indenture contains customary
restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default occurs and is continuing, other than Videotrons bankruptcy or insolvency, the trustee or the holders of at
least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable immediately. The senior notes issued pursuant to this indenture were not and will not be registered under the
Securities Act or under the laws of any other jurisdiction.



| | (k) | Indenture relating to US$800,000,000 of Videotrons 5% Senior Notes due July 15, 2022, dated as of March 14, 2012, by and among Videotron, the
guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On March 14,
2012, Videotron issued US$800,000,000 aggregate principal amount of its 5% Senior Notes due July 15, 2022, pursuant to an Indenture, dated as of March 14, 2012, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank,
National Association, as trustee. These senior notes are unsecured and mature on July 15, 2022. Interest on these senior notes is payable in cash semi-annually in arrears on January 15 and July 15 of each year. These senior notes are
guaranteed on a senior unsecured basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under certain circumstances and at the make-whole redemption price set forth in the
indenture. This indenture contains customary restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default occurs and is continuing, other than Videotrons bankruptcy or
insolvency, the trustee or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable immediately.



| | (l) | Indenture relating to CAN$400,000,000 of Videotrons
55/8% Senior Notes due June 15, 2025, dated as of June 17, 2013, by and among Videotron, the guarantors party thereto, and Computershare Trust Company of Canada, as trustee.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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On June 17, 2013, Videotron issued CAN$400,000,000 aggregate
principal amount of its 55/8% Senior Notes due June 15, 2025, pursuant to an Indenture, dated as of June 17, 2013, by and among Videotron, the guarantors party thereto, and Computershare Trust Company of Canada, as
trustee. These senior notes are unsecured and mature on June 15, 2025. Interest on these senior notes is payable in cash semi-annually in arrears on April 15 and October 15 of each year. These senior notes are guaranteed on a senior
unsecured basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under certain circumstances and at the make-whole redemption price set forth in the indenture. The indenture
contains customary restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default occurs and is continuing, other than Videotrons bankruptcy or insolvency, the trustee
or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable immediately. The senior notes issued pursuant to this indenture have not been and will not be
registered under the Securities Act or under the laws of any other jurisdiction.



| | (m) | Indenture relating to US$600,000,000 of Videotrons
53/8% Senior Notes due June 15, 2024, dated as of April 9, 2014, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On April 9, 2014, Videotron issued US$600,000,000 aggregate principal
amount of its 53/8% Senior Notes due June 15, 2024, pursuant to an Indenture, dated as of April 9, 2014, by and among Videotron, the guarantors party thereto, and Wells Fargo Bank, National Association, as
trustee. These senior notes are unsecured and mature on June 15, 2024. Interest on these senior notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year. These senior notes are guaranteed on a senior
unsecured basis by most, but not all, of Videotrons subsidiaries. These senior notes are redeemable, at Videotrons option, under certain circumstances and at the make-whole redemption price set forth in the indenture. The indenture
contains customary restrictive covenants with respect to Videotron and certain of its subsidiaries, and customary events of default. If an event of default occurs and is continuing, other than Videotrons bankruptcy or insolvency, the trustee
or the holders of at least 25% in principal amount at maturity of the then-outstanding senior notes may declare all the senior notes to be due and payable immediately. The senior notes issued pursuant to this indenture have not been and will not be
registered under the Securities Act or under the laws of any other jurisdiction.



| | (n) | Credit Agreement originally dated as of November 28, 2000, as amended and restated as of July 20, 2011, by and among Videotron, as borrower, the guarantors
party thereto, the financial institutions party thereto from time to time, as lenders, and Royal Bank of Canada, as administrative agent, as amended on June 14, 2013.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Videotrons $650,000,000 senior secured credit facilities provide for a $575,000,000 secured revolving credit facility that matures
on July 19, 2018 and a $75,000,000 secured export financing facility providing for a term loan that matures on June 15, 2018. The proceeds of the revolving credit facility can be used for general corporate purposes including, without
limitation, to issue letters of credit and to pay dividends to Quebecor Media subject to certain conditions. The proceeds of the term loan were used for payments and reimbursement of payments of export equipment and local services in relation to
Videotrons contracts for mobile infrastructure equipment with an affiliate of Nokia Corporation and also for the financing of the Finnvera guarantee fee (Finnvera plc being a specialized financing company owned by the State of Finland
which is providing an export buyer credit guarantee in favor of the lenders under the export financing facility covering political and commercial risks).

Advances under Videotrons revolving credit facility bear interest at the Canadian prime rate, the U.S. prime rate (solely under the swingline commitment) or the bankers acceptance rate plus,
in each instance, an applicable margin determined by the Leverage Ratio (as defined in Videotrons credit agreement) of the Relevant Group (as defined in such credit agreement). The applicable margin for Canadian prime rate advances and U.S.
prime rate advances ranges from 0.325% when this ratio is less than 1.5x, to 1.625% when this ratio is greater than or equal to 4.5x. The applicable margin for bankers acceptance advances or letters of credit fees ranges from 1.325% when this
ratio is less than 1.5x, to 2.625% when this ratio is greater than or equal to 4.5x. Videotron has also agreed to pay a specified commitment fee. Advances under Videotrons export financing facility bear interest at the bankers acceptance
rate plus a margin at a rate of 0.875%.



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The revolving credit facility will be repayable in full on July 19, 2018. Drawdowns
under the export financing facility are repayable by way of seventeen equal and consecutive semi-annual payments that commenced on June 15, 2010.

Borrowings under Videotrons senior secured credit facilities and under eligible derivative instruments are secured by a first-ranking hypothec or security interest (subject to certain permitted
encumbrances) on all current and future assets of Videotron and of the guarantors under the credit facilities (which include most, but not all of Videotrons subsidiaries), guarantees by such guarantors, pledges of shares by Videotron and such
guarantors and other security.

Videotrons senior secured credit facilities contain customary covenants that restrict and
limit the ability of Videotron and the members of the VL Group (as defined in the credit agreement to mean Videotron and all of its wholly-owned subsidiaries) to, among other things, enter into merger or amalgamation transactions or liquidate or
dissolve, grant encumbrances, sell assets, pay dividends or make other distributions, issue shares of capital stock, incur indebtedness and enter into related party transactions. In addition, Videotrons senior secured credit facilities contain
customary financial covenants and customary events of default including the non-payment of principal or interest, the breach of any financial covenant, the failure to perform or observe any other covenant, certain bankruptcy events relating to
Videotron or any member of the VL Group (other than an Immaterial Subsidiary, as defined in the credit agreement), and the occurrence of a change of control.



| | (o) | Purchase Agreement dated as of October 6, 2014, by and among Sun Media, as seller, and Postmedia Network Canada Corporation, as purchaser.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------

Sun Medias purchase agreement with Postmedia Network Canada Corporation relates to the sale of 175
English-language newspapers and publications by Sun Media to Postmedia (Postmedia) for cash consideration of $316.0 million, subject to customary adjustments and to a $10.0 million adjustment, related primary to real estate
properties to be disposed of by Sun Media prior to closing and to be credited to Postmedia at closing. The Postmedia Transaction is subject to approval by regulatory authorities, specifically the Competition Bureau.

D- Exchange Controls

There are currently no laws, decrees, regulations or other legislation in Canada that restrict the export or import of capital, or affect
the remittance of dividends, interest or other payments to non-resident holders of the Corporations securities, other than withholding tax requirements. Canada has no system of exchange controls.

There is no limitation imposed by Canadian law or by the Articles of Incorporation or other charter documents of the Corporation
on the right of a non-resident to hold voting shares of the Corporation, other than as provided by the Investment Canada Act, as amended (the Investment Act), as amended by the North American Free Trade
Agreement Implementation Act(Canada), and the World Trade Organization (WTO) Agreement Implementation Act. The Investment Act requires notification and, in certain cases, advance review and approval by the Government of Canada of the
acquisition by a non-Canadian of control of a Canadian business, all as defined in the Investment Act. Generally, the threshold for review will be higher in monetary terms for a member of the WTO or NAFTA.

In addition, there are regulations related to the ownership and control of Canadian broadcast undertakings. See Item 4 
Information on the Corporation  Regulation.

E - Taxation

Certain U.S. Federal Income Tax Considerations

The following discussion is a summary of certain U.S. federal income tax consequences applicable to the
purchase, ownership and disposition of our
73/8% Senior Notes due 2021 issued on January 5, 2011 (the 2011 C$ notes),



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our 53/4% Senior Notes due 2023 issued on October 11, 2012 (the 2012 US$ notes) and our 65/8% Senior Notes due 2023 issued on October 11, 2012 (the 2012 C$ notes) (and collectively with our 2011 C$ notes and 2012 US$ notes, the notes) by a U.S. Holder
(as defined below), but does not purport to be a complete analysis of all potential U.S. federal income tax effects. This summary is based on the Internal Revenue Code of 1986, as amended (the Code), U.S. Treasury regulations
promulgated thereunder, Internal Revenue Service (IRS) rulings and judicial decisions now in effect. All of these are subject to change, possibly with retroactive effect, or different interpretations.

This summary does not address all aspects of U.S. federal income taxation that may be relevant to
particular U.S. Holders in light of their specific circumstances (for example, U.S. Holders subject to the alternative minimum tax provisions of the Code or U.S. Holders subject to the 3.8% Medicare tax on net investment income) or to U.S. Holders
that may be subject to special rules under U.S. federal income tax law, including:



| |  |  | dealers in stocks, securities or currencies;
| | - |  | --------------------------------------------



| |  |  | persons using a mark-to-market accounting method;
| | - |  | -------------------------------------------------



| |  |  | banks and financial institutions;
| | - |  | ---------------------------------



| |  |  | insurance companies;
| | - |  | --------------------



| |  |  | regulated investment companies;
| | - |  | -------------------------------



| |  |  | real estate investment trusts;
| | - |  | ------------------------------



| |  |  | tax-exempt organizations;
| | - |  | -------------------------



| |  |  | persons holding notes as part of a hedging or conversion transaction or a straddle;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | persons deemed to sell notes under the constructive sale provisions of the Code;
| | - |  | --------------------------------------------------------------------------------



| |  |  | persons who or that are, or may become, subject to the expatriation provisions of the Code;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | persons whose functional currency is not the U.S. dollar; and
| | - |  | -------------------------------------------------------------



| |  |  | direct, indirect or constructive owners of 10% or more of our outstanding voting shares.
| | - |  | ----------------------------------------------------------------------------------------

The summary also does not discuss any aspect of state, local or non-U.S., or U.S. federal estate and gift tax law as applicable to U.S.
Holders. Moreover, this discussion is limited to U.S. Holders who acquire and hold the notes as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). In addition, this summary
assumes that the notes are properly characterized as debt that is not contingent debt for U.S. federal income tax purposes.

For purposes of this summary, U.S. Holder means the beneficial holder of a note who or that for U.S. federal
income tax purposes is:



| |  |  | an individual citizen or resident alien of the United States;
| | - |  | -------------------------------------------------------------



| |  |  | a corporation or other entity treated as such formed in or under the laws of the United States, any state thereof or the District of Columbia;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | a trust, if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more U.S.
persons (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or if a valid election is in effect to be treated as a U.S. person.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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We have not sought and will not seek any rulings from the IRS with respect to the matters
discussed below. There can be no assurance that the IRS will not take a different position concerning the tax consequences of the purchase, ownership or disposition of the notes or that any such position will not be sustained.

If a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes holds the notes, the U.S.
federal income tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Such partner should consult its own tax advisor as to the tax consequences of the partnership purchasing, owning and
disposing of the notes.

PROSPECTIVE U.S. INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH REGARD TO THE APPLICATION OF
THE TAX CONSEQUENCES DESCRIBED BELOW TO THEIR PARTICULAR SITUATIONS AS WELL AS THE APPLICATION OF ANY STATE, LOCAL, NON-U.S. OR OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS.

Interest on the Notes

Interest on the 2011 C$ notes, 2012 US$
note and 2012 C$ notes

Payments of stated interest on the 2011 C$ notes, 2012 US$ notes and our 2012 C$ notes
generally will be taxable to a U.S. Holder as ordinary income at the time that such payments are received or accrued, in accordance with the U.S. Holders method of accounting for U.S. federal income tax purposes.

Our 2011 C$ notes and our 2012 C$ notes (collectively, the C$ notes) are denominated in Canadian dollars.
Interest on these notes will be included in a U.S. Holders gross income in an amount equal to the U.S. dollar value of the Canadian dollar amount, regardless of whether the Canadian dollars are converted into U.S. dollars. Generally, a
U.S. Holder that uses the cash method of tax accounting will determine such U.S. dollar value using the spot rate of exchange on the date of receipt. A cash method U.S. Holder generally will not realize foreign currency gain or loss on the receipt
of the interest payment but may have foreign currency gain or loss attributable to the actual disposition of the Canadian dollars received.

Generally, a U.S. Holder of C$ notes that uses the accrual method of tax accounting will determine the U.S. dollar value of accrued interest income using the average rate of exchange for the accrual
period (or, with respect to an accrual period that spans two taxable years, at the average rate for the partial period within the U.S. Holders taxable year). Alternatively, an accrual basis U.S. Holder may make an election (which must be
applied consistently to all debt instruments from year to year and cannot be changed without the consent of the IRS) to translate accrued interest income at the spot rate of exchange on the last day of the accrual period (or the last day of the
taxable year in the case of a partial accrual period) or the spot rate on the date of receipt, if that date is within five business days of the last day of the accrual period. A U.S. Holder that uses the accrual method of accounting for tax purposes
will recognize foreign currency gain or loss on the receipt of an interest payment if the exchange rate in effect on the date payment is received differs from the rate applicable to an accrual of that interest. The amount of foreign currency gain or
loss to be recognized by such U.S. Holder will be an amount equal to the difference between the U.S. dollar value of the Canadian dollar interest payment (determined on the basis of the spot rate on the date the interest income is received) in
respect of the accrual period and the U.S. dollar value of the interest income that has accrued during the accrual period (as determined above). This foreign currency gain or loss will be ordinary income or loss and generally will not be treated as
an adjustment to interest income or expense.

Foreign currency gain or loss generally will be U.S. source provided that the
residence of a taxpayer is considered to be the United States for purposes of the rules regarding foreign currency gain or loss.

Market
Discount, Acquisition Premium, and Bond Premium

Market Discount

If a U.S. Holder purchases notes for an amount less than their revised issue price, this difference is treated as market discount.
Subject to a de minimis exception, gain realized on the maturity, sale, exchange or retirement of a market discount note will be treated as ordinary income to the extent of any accrued market discount not previously recognized



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(including, in the case of a note exchanged for a registered note pursuant to a registration offer, any market discount accrued on the related outstanding note). A U.S. Holder may elect to
include market discount in income currently as it accrues, on either a ratable or constant yield method. In that case, such U.S. Holders tax basis in the notes will increase by such income inclusions. An election to include market discount in
income currently, once made, will apply to all market discount obligations acquired by the U.S. Holder during the taxable year of the election and thereafter, and may not be revoked without the consent of the IRS. If a U.S. Holder does not make such
an election, in general, all or a portion of the interest expense on any indebtedness incurred or continued in order to purchase or carry notes may be deferred until the maturity of the notes, or certain earlier dispositions. Unless a U.S. Holder
elects to accrue market discount under a constant yield method, any market discount will accrue ratably during the period from the date of acquisition of the related note to its maturity date.

In the case of C$ note, market discount is accrued in Canadian dollars, and the amount includible in income by a U.S. Holder upon a sale
of a C$ note in respect of accrued market discount will be the U.S. dollar value of the amount accrued. Such U.S. dollar value is generally calculated at the spot rate of exchange on the date the C$ note is sold. Any market discount on a C$ note
that is currently includible in income under the election noted above will be translated into U.S. dollars at the average exchange rate for the accrual period or portion of such accrual period within the U.S. Holders taxable year. In such
case, a U.S. Holder generally will recognize foreign currency gain or loss with respect to accrued market discount under the rules similar to those that apply to accrued interest on a note received by an accrual basis U.S. Holder, as described
above.

Bond Premium

If a U.S. Holder purchases notes for an amount greater than the sum of all amounts (other than qualified stated interest) payable with respect to the notes after the date of acquisition, the U.S. Holder
is treated as having purchased the related notes with amortizable bond premium. A U.S. Holder generally may elect to amortize the premium from the purchase date to the maturity date of the notes under a constant yield method. Amortizable premium
generally may be deducted against interest income on such notes and generally may not be deducted against other income. A U.S. Holders basis in a note will be reduced by any premium amortization deductions. An election to amortize premium on a
constant yield method, once made, generally applies to all debt obligations held or subsequently acquired by such U.S. Holder during the taxable year of the election and thereafter, and may not be revoked without IRS consent. For a U.S. Holder that
did not elect to amortize bond premium, the amount of such premium will be included in such U.S. Holders tax basis upon the sale of a note. In the case of a C$ note, premium is computed in Canadian dollars. At the time amortized bond premium
offsets interest income, foreign currency gain or loss (taxable as ordinary income or loss) will be realized on such amortized bond premium based on the difference between the spot rate of exchange on the date or dates such premium is recovered
through interest payments on the C$ note and the spot rate of exchange on the date on which the U.S. Holder acquired the C$ note. For a U.S. Holder that did not elect to amortize bond premium, the amount of such premium will be included in such U.S.
Holders tax basis upon the sale of a C$ note.

The market discount and bond premium rules are complicated, and U.S.
Holders are urged to consult their own tax advisors regarding the tax consequences of owning and disposing of notes with market discount, or bond premium, including the availability of certain elections.

Other

Interest
on the notes will constitute income from sources outside the United States and generally, with certain exceptions, will be passive category income, which is treated separately from other income for purposes of computing the foreign tax
credit allowable to a U.S. Holder under the federal income tax laws. Due to the complexity of the foreign tax credit rules, U.S. Holders should consult their own tax advisors with respect to the amount of foreign taxes that may be claimed as a
credit.

In certain circumstances we may be obligated to pay amounts in excess of stated interest or principal on the notes or
may make payments or redeem the notes in advance of their expected maturity. According to U.S. Treasury regulations, the possibility that any such payments or redemptions will be made will not affect the amount of interest income a U.S. Holder
recognizes if there is only a remote chance as of the date the notes were issued that such payments will be made, or if such payments are incidental. We believe the likelihood that we will make any such payments is remote and/or incidental.
Therefore, we do not intend to treat the potential payments or redemptions pursuant to the



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provisions related to changes in Canadian laws or regulations applicable to tax-related withholdings or deductions, any registration rights provisions, or the other redemption and repurchase
provisions as part of the yield to maturity of the notes or as affecting the tax treatment of the notes. Our determination that these contingencies are remote and/or incidental is binding on a U.S. Holder unless such holder discloses its contrary
position in the manner required by applicable U.S. Treasury regulations. Our determination is not, however, binding on the IRS, and if the IRS were to challenge this determination, a U.S. Holder may be required to accrue income on its notes in
excess of interest that would otherwise accrue and to treat as ordinary income rather than capital gain any income realized on the taxable disposition of a note before the resolution of the contingencies. In the event a contingency occurs, it would
affect the amount and timing of the income recognized by a U.S. Holder. If we pay additional amounts on the notes, U.S. Holders will be required to recognize such amounts as income.

Sale, Exchange or Retirement of a Note

A U.S. Holder generally will
recognize gain or loss upon the sale, exchange (other than pursuant to a tax-free transaction), redemption, retirement or other taxable disposition of a note, equal to the difference, if any, between:



| |  |  | the amount realized (less any portion allocable to the payment of accrued interest not previously included in income, which amount will be taxable as
ordinary interest income); and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the U.S. Holders adjusted tax basis in the note.
| | - |  | -------------------------------------------------

Except with respect to gains or losses attributable to changes in exchange rates, as described below, any such gain or loss generally will be capital gain or loss (except as described under 
Market Discount, and Bond Premium above) and generally will be long-term capital gain or loss if the note has been held or deemed held for more than one year at the time of the disposition. Long-term capital gains of noncorporate U.S. Holders,
including individuals, may be taxed at lower rates than items of ordinary income. The ability of a U.S. Holder to offset capital losses against ordinary income is limited. Any capital gain or loss recognized by a U.S. Holder on the sale or other
disposition of a note generally will be treated as income from sources within the United States or loss allocable to income from sources within the United States. U.S. Holders should consult their own tax advisors regarding the source of gain
attributable to market discount.

A U.S. Holders adjusted tax basis in a note generally will equal the U.S.
Holders cost therefor, increased by any market discount previously included in income and reduced by any payments (other than payments constituting qualified stated interest) received on the notes, any amount treated as a return of
pre-issuance accrued interest excluded from income, and the amount of amortized bond premium, if any, previously taken into account with respect to the note. If a U.S. Holder purchases a C$ note with Canadian dollars, the U.S. dollar cost of the C$
note will generally be the U.S. dollar value of the purchase price upon the date of purchase calculated at the spot rate of exchange on that date. The amount realized upon the disposition of a C$ note will generally be the U.S. dollar value of the
amount received on the date of the disposition calculated at the spot rate of exchange on that date. However, if the C$ note is traded on an established securities market, a cash basis U.S. Holder (and, if it so elects, an accrual basis U.S. Holder)
will determine the U.S. dollar value of the cost of or amount received on the C$ note, as applicable, by translating the amount paid or received at the spot rate of exchange on the settlement date of the purchase or disposition. The election
available to accrual basis U.S. Holders in respect of the purchase and disposition of C$ notes traded on an established securities market must be applied consistently to all debt instruments from year to year and cannot be changed without the
consent of the IRS.

Gain or loss recognized by a U.S. Holder on the sale, exchange or retirement of a C$ note that is
attributable to changes in the rate of exchange between the U.S. dollar and foreign currency generally will be treated as U.S. source ordinary income or loss. Such foreign currency gain or loss will equal the difference between (i) the U.S.
dollar value of the U.S. Holders Canadian dollar purchase price for the C$ note calculated at the spot rate of exchange on the date of the sale, exchange, retirement or other disposition and (ii) the U.S. dollar value of the U.S.
Holders Canadian dollar purchase price for the C$ note calculated at the spot rate of exchange on the date of purchase of the C$ note. If the C$ note is traded on an established securities market, with respect to a cash basis U.S. Holder (and,
if it so elects, an accrual basis U.S. Holder), such foreign currency gain or loss will equal the difference between (x) the U.S. dollar value of the U.S. Holders Canadian dollar purchase price for the C$ note calculated at the spot rate
of exchange on the settlement date of the disposition and (y) the U.S. dollar value of the U.S. Holders Canadian dollar purchase price for the C$ note calculated at the spot rate of exchange on the settlement date of the purchase of the
C$ note. Such foreign currency gain or loss is



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recognized on the sale or retirement of such note only to the extent of total gain or loss recognized on the sale or retirement of such note. Prospective investors should consult their own tax
advisors regarding certain foreign currency translation elections that may be available with respect to a sale, exchange, or redemption of the C$ notes.

Transactions in Foreign Currency

Foreign currency received as a
payment of interest on, or on the sale or retirement of, a C$ note will have a tax basis equal to its U.S. dollar value at the time such interest is received or at the time the note is disposed of or payment is received in consideration of such sale
or retirement (as applicable). The amount of gain or loss recognized on a subsequent sale or other disposition of such foreign currency will be equal to the difference between (i) the amount of U.S. dollars, or the fair market value in U.S.
dollars of the other currency or property received in such sale or other disposition, and (ii) the tax basis of the recipient in such foreign currency. A U.S. Holder who acquires such note with previously owned foreign currency will recognize
ordinary income or loss in an amount equal to the difference, if any, between such U.S. Holders tax basis in the foreign currency and the U.S. dollar fair market value of the note on the date of acquisition. Such gain or loss generally will be
treated as income or loss from sources within the United States for foreign tax credit limitation purposes.

Reportable Transaction
Reporting

Under certain U.S. Treasury Regulations, U.S. Holders that participate in reportable
transactions (as defined in the regulations) must attach to their U.S. federal income tax returns a disclosure statement on IRS Form 8886. Under the relevant rules, a U.S. Holder may be required to treat a foreign currency exchange loss from
the C$ note as a reportable transaction if this loss exceeds the relevant threshold in the regulations. For individuals and trusts, this loss threshold is US$50,000 in any single year. U.S. Holders should consult their own tax advisors as to the
possible obligation to file IRS Form 8886 with respect to the ownership or disposition of the C$ notes, or any related transaction, including without limitation, the disposition of any non-U.S. currency received as interest or as proceeds from the
sale, exchange, retirement or other disposition of the C$ notes.

Information Reporting and Backup Withholding

In general, information reporting requirements may apply to payments of principal and interest on a note and to the proceeds of the sale
or other disposition of a note made to U.S. Holders other than certain exempt recipients (such as corporations). A U.S. Holder of the notes may be subject to backup withholding with respect to certain reportable payments,
including interest payments and, under certain circumstances, principal payments on the notes or upon the receipt of proceeds upon the sale or other disposition of such notes. These backup withholding rules apply if the U.S. Holder, among other
things:



| |  |  | fails to furnish a social security number or other taxpayer identification number (TIN) certified under penalty of perjury within a
reasonable time after the request for the TIN;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | furnishes an incorrect TIN;
| | - |  | ---------------------------



| |  |  | is notified by the IRS that it has failed to report properly interest or dividends; or
| | - |  | --------------------------------------------------------------------------------------



| |  |  | under certain circumstances, fails to provide a certified statement, signed under penalties of perjury, that the TIN furnished is the correct number
and that such holder is not subject to backup withholding.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A U.S. Holder that does not provide us with its
correct TIN also may be subject to penalties imposed by the IRS. Any amount withheld from a payment to a U.S. Holder under the backup withholding rules is creditable against the U.S. Holders federal income tax liability, provided that the
required information is timely furnished to the IRS. Backup withholding will not apply, however, with respect to payments made to certain exempt U.S. Holders, including corporations and tax-exempt organizations, provided their exemptions from backup
withholding are properly established.

In addition, U.S. individuals that hold specified foreign financial assets (including
stock and securities of a foreign issuer) with an aggregate value in excess of US$50,000 on the last day of the taxable year or US$75,000 at any time during the taxable year are required to report their holdings, along with other information, on
their tax returns, with certain exceptions. Holders should consult their own tax advisors to determine the scope of these disclosure responsibilities.



155



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Certain Canadian Material Federal Income Tax Considerations for Residents of the United States

The following is, at the date hereof, a summary of the principal Canadian federal income tax considerations generally
applicable to a holder who acquires, as beneficial owner, the Senior Notes, including entitlement to all payments thereunder, pursuant to this offering and who, at all relevant times and for the purposes of the Income Tax Act (Canada) (the
Tax Act) and the regulations thereunder, (i) is not, and is not deemed to be, resident in Canada (including as a consequence of the Canada-United States Income Tax Convention (1980), as amended), (ii) deals at arms
length with Quebecor Media and with any transferee resident or deemed resident in Canada to whom the holder disposes of Senior Notes, (iii) does not use or hold and is not deemed to use or hold the Senior Notes in or in the course of carrying
on business in Canada, (iv) does not receive any payment of interest (including any amounts deemed to be interest) on the Senior Notes in respect of a debt or other obligation to pay an amount to a person with whom Quebecor Media does not deal
at arms length, (v) is not an authorized foreign bank, as defined in the Tax Act, (vi) is not a registered non-resident insurer, as defined in the Tax Act, (vii) is not an insurer carrying on an insurance
business in Canada and elsewhere, and (viii) is not a, and deals at arms length with any, specified shareholder of Quebecor Media for purposes of the thin capitalization rules in the Tax Act (a Non-Resident
Holder). A specified shareholder for these purposes generally includes a person who (either alone or together with persons with whom that person is not dealing at arms length for the purposes of the Tax Act) owns or has
the right to acquire or control or is otherwise deemed to own 25% or more of Quebecor Medias shares determined on a votes or fair market value basis.

This summary is based on the current provisions of the Tax Act and the regulations thereunder and the current administrative and assessing practices and policies of the Canada Revenue Agency published in
writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and the regulations thereunder announced by or on behalf of the Minister of Finance of Canada prior to the date hereof (the
Proposed Amendments) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that the Proposed Amendments will be enacted as proposed or at all. This summary does not
otherwise take into account or anticipate any changes in law or any administrative or assessing practice, whether by judicial, governmental, regulatory or legislative decision or action, nor does it take into account provincial, territorial or
foreign income tax considerations which may differ from the Canadian federal income tax considerations described herein.

THIS
SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT EXHAUSTIVE OF ALL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS THAT MAY BE RELEVANT TO A PARTICULAR HOLDER. THIS SUMMARY IS NOT INTENDED TO BE, AND SHOULD NOT BE INTERPRETED AS, LEGAL OR TAX ADVICE TO ANY
PARTICULAR HOLDER, AND NO REPRESENTATION WITH RESPECT TO THE INCOME TAX CONSEQUENCES TO ANY PARTICULAR HOLDER IS MADE. ACCORDINGLY, YOU SHOULD CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO YOUR PARTICULAR CIRCUMSTANCES.

No Canadian withholding tax will apply to interest (including any amounts deemed to be interest), principal or premium paid or credited
by Quebecor Media on the Senior Notes to a Non-Resident Holder, or to the proceeds received by a Non-Resident Holder on a disposition of a Senior Note, including a redemption, payment on maturity, repurchase or purchase for cancellation.

No other taxes on income or gains will be payable under the Tax Act by a Non-Resident Holder on interest (including any amounts deemed to
be interest), principal or premium or on the proceeds received by such Non-Resident Holder on the disposition of a Senior Note, including a redemption, payment on maturity, repurchase or purchase for cancellation.

F - Dividends and Paying Agents

Not applicable.

G - Statement By Experts

Not applicable.



156



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H - Documents on Display

We file periodic reports and other information with the SEC. You may read and copy this information at the public reference room of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, or
obtain copies of this information by mail from the public reference room at prescribed rates. The SEC also maintains an Internet website that contains reports and other information about issuers like us who file electronically with the SEC. The URL
of that website is http://www.sec.gov.

In addition, you may obtain a copy of the documents to which we refer you in this
annual report without charge upon written or oral request to: Quebecor Media Inc., 612 St-Jacques Street, Montréal, Québec, Canada, H3C 4M8, Attention: Investor Relations. Our telephone number is (514) 380-1999.

I - Subsidiary Information

Not applicable.

ITEM 11  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

We use certain financial instruments, such as interest rate swaps, cross-currency swaps and
foreign exchange forward contracts, to manage interest rate and foreign exchange risk exposures. These instruments are used solely to manage the financial risks associated with our obligations and are not used for trading or speculation purposes.

Foreign Currency Risk and Interest Rate Risk

Most of the Corporations consolidated revenues and expenses, other than interest expense on U.S. dollar-denominated debt, purchases of set-top boxes, handsets and cable modems and certain capital
expenditures, are received or denominated in CAN dollars. A significant portion of the interest, principal and premium, if any, payable on its debt is payable in U.S. dollars. The Corporation and its subsidiaries have entered into transactions to
hedge the foreign currency risk exposure on their U.S. dollar-denominated debt obligations outstanding as of December 31, 2014, to hedge their exposure on certain purchases of set-top boxes, handsets, cable modems, and capital expenditures, and
to lock-in the value of certain derivative financial instruments through offsetting transactions. Accordingly, the Corporations sensitivity to variations in foreign exchange rates is economically limited.

Some of the Corporations and its subsidiaries bank credit facilities bear interest at floating rates based on the following
reference rates: (i) Bankers acceptance rate, (ii) LIBOR, (iii) Canadian prime rate and (iv) U.S. prime rate. The Senior Notes issued by the Corporation and its subsidiaries bear interest at fixed rates. The Corporation and
its subsidiaries have entered into cross-currency interest rate swap agreements in order to manage interest rate risk exposure. As of December 31, 2014, after taking into account the hedging instruments, long-term debt was comprised of
83.2 % fixed-rate debt (82.6% in 2013) and 16.8% floating-rate debt (17.4% in 2013).

The estimated sensitivity on
interest payments of a 100 basis-point variance in the year-end Canadian Bankers acceptance rate as of December 31, 2014 is $8.2 million.

Commodity Price Risk

Newsprint, which is the basic raw material used to
publish newspapers, has historically been and may continue to be subject to significant price volatility. Changes in the price of newsprint could significantly affect our income, and volatile or increased newsprint costs have had, and may in the
future have, a material adverse effect on our results of operations.

In order to obtain more favourable pricing, we source
substantially all of our newsprint from a single newsprint producer (our Newsprint Supplier). Pursuant to the terms of our agreement with our Newsprint Supplier, we obtain newsprint at a discount to market prices, receive
additional volume rebates if certain thresholds are met and benefit from a ceiling on the unit cost of newsprint. Our agreement with our Newsprint Supplier expires on December 31, 2015 and there can be no assurance that we will be able to renew
this agreement or that our Newsprint Supplier will continue to supply newsprint to us on favourable terms or at all after the expiry of our agreement. If we are unable to continue to source newsprint from our Newsprint Supplier on favourable terms,
or if we are unable to otherwise source sufficient newsprint



157



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on terms acceptable to us, our costs could increase materially, which could materially adversely affect the profitability of our newspaper business and our results of operations. We also rely on
our Newsprint Supplier for deliveries of newsprint. The availability of our newsprint supply, and therefore our operations, may be adversely affected by various factors, including labor disruptions affecting our Newsprint Supplier or the cessation
of operations of our Newsprint Supplier.

In addition, since our newspaper operations are labour intensive and located across
Canada, our newspaper business has a relatively high fixed-cost structure. During periods of economic contraction, our revenue may decrease while certain costs remain fixed, resulting in decreased earnings.

Credit Risk

Credit risk
is the risk of financial loss to the Corporation if a customer or counterparty to a financial asset fails to meet its contractual obligations.

In the normal course of business, the Corporation continuously monitors the financial condition of its customers and reviews the credit history of each new customer. As of December 31, 2014, no
customer balance represented a significant portion of the Corporations consolidated trade receivables. The Corporation establishes an allowance for doubtful accounts based on the specific credit risk of its customers and historical trends. As
of December 31, 2014, 8.5% of trade receivables were 90 days past their billing date (9.8% as of December 31, 2013) of which 57.3% had an allowance for doubtful accounts (46.5% as of December 31, 2013).

The Corporation believes that its product lines and the diversity of its customer base are instrumental in reducing its credit risk, as
well as the impact of fluctuations in product-line demand. The Corporation does not believe that it is exposed to an unusual level of customer credit risk.

As a result of their use of derivative financial instruments, the Corporation and its subsidiaries are exposed to the risk of non-performance by a third party. When the Corporation and its subsidiaries
enter into derivative contracts, the counterparties (either foreign or Canadian) must have credit ratings at least in accordance with the Corporations risk management policy and are subject to concentration limits. These credit ratings and
concentration limits are monitored on an ongoing basis but at least quarterly.

Fair Value of Financial Instruments

See Item 5  Operating and Financial Review and Prospects  Additional Information  Financial Instruments and
Financial Risks  Fair Value of Financial Instruments in this annual report.

Material Limitations

Fair value estimates are made at a specific point in time and are based on relevant market information about the financial instruments.
These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Principal Repayments

As
of December 31, 2014, the aggregate amount of minimum principal payments on long-term debt required in each of the next five years and thereafter, based on borrowing levels as at that date, are as follows:



|                                        |  |   |         | 
|--------------------------------------- |  | - | ------- | 
|Twelve month period ending December 31, |  |   |        
|(in millions)                           |  |   |        
|2015                                    |  | $ | 229.1   | 
|2016                                    |  |   | 18.6    | 
|2017                                    |  |   | 20.9    | 
|2018                                    |  |   | 105.5   | 
|2019                                    |  |   | 56.9    | 
|2020 and thereafter                     |  |   | 4,819.0 | 
|                                        |  |   |         | 
|Total                                   |  | $ | 5,250.0 | 



158



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ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.



159



---

PART II

ITEM 13  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

A- None.

B- Not applicable.

ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

A- Material Modifications to the Rights of Security Holders

There have been no material modifications to the rights of security holders.

B- Use of Proceeds

Not applicable.

ITEM 15  CONTROLS AND PROCEDURES

As at the end of the period covered by this report, Quebecor Medias President and Chief Executive Officer and Quebecor Medias Chief Financial Officer, together with members of Quebecor
Medias senior management, have carried out an evaluation of the effectiveness of our disclosure controls and procedures. These are defined (in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as
controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act is recorded, processed, summarized and reported within specified time periods. As of the date of the
evaluation, Quebecor Medias President and Chief Executive Officer and Quebecor Medias Chief Financial Officer concluded that Quebecor Medias disclosure controls and procedures were effective to ensure that information required to
be disclosed in the reports that the Corporation files or submits under the Securities Exchange Act is accumulated and communicated to management, including the Corporations principal executive and principal financial officer, to allow
timely decisions regarding disclosure.

Quebecor Medias management is responsible for establishing and maintaining
adequate internal control over financial reporting of the Corporation (as defined by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). Quebecor Medias internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with International Financial Reporting Standards (IFRS). Quebecor
Medias internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of Quebecor
Medias assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), and that
receipts and expenditures of Quebecor Media are being made only in accordance with authorizations of management and directors of Quebecor Media; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of Quebecor Medias assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

Quebecor Medias management conducted an evaluation of the effectiveness of internal control over financial
reporting based on the revised framework in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in May 2013 (COSO 2013). Based on this evaluation, management concluded
that Quebecor Medias internal control over financial reporting was effective as of December 31, 2014.

Pursuant to the DoddFrank Wall Street Reform and Consumer Protection Act of 2010 and related SEC rules, Quebecor Media is
not required to include in its annual report an attestation report of Quebecor Medias registered public accounting firm regarding our internal control over financial reporting. Our managements report regarding the effectiveness of our
internal control over financial reporting was therefore not subject to attestation procedures by our registered public accounting firm.



160



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There have been no changes in Quebecor Medias internal control over financial
reporting (as defined in Rule 13a-15 or 15d-15 under the Exchange Act) that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, Quebecor Medias internal control
over financial reporting.

ITEM 16  [RESERVED]

ITEM 16A  AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. La Couture is an audit committee financial expert (as defined in
Item 16A of Form 20-F) serving on our Audit Committee. Our Board of Directors has determined that Mr. La Couture is an independent director, as defined under SEC rules.

ITEM 16B  CODE OF ETHICS

We have a Code of Ethics that applies to all directors, officers and employees of Quebecor Media, including our Chief Executive Officer,
Chief Financial Officer, principal accounting officer, controller and persons performing similar functions. Our Code of Ethics is included as an exhibit to this annual report on Form 20-F.

ITEM 16C  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Ernst & Young LLP has served as our independent registered public accounting firm for the fiscal years ended December 31, 2014, 2013 and 2012. The audited consolidated financial statements
for each of the fiscal years in the three-year period ended December 31, 2014 are included in this annual report on Form 20-F.

Our Audit Committee establishes the independent auditors compensation. The Audit Committee adopted a policy relating to the pre-approval of services to be rendered by its independent auditors. The
Audit Committee pre-approves all audit services, determines which non-audit services the independent auditors are prohibited from providing, and authorizes permitted non-audit services to be performed by the independent auditors to the extent those
services are permitted by the Sarbanes-Oxley Act and Canadian law. For each of the years ended December 31, 2014, 2013 and 2012, none of the non-audit services described below were approved by the Audit Committee of our Board of
Directors pursuant to the de minimis exception to the pre-approval requirement for non-audit services. The following table presents the aggregate fees billed for professional services and other services rendered by our
independent auditor, Ernst & Young LLP, for the fiscal years ended December 31, 2014, 2013 and 2012.



|                      |  |      |            |  |      |   |           |      |  |   |           | 
|--------------------- |  | ---- | ---------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|                      |  | 2014 |            |  | 2013 |   |           | 2012 | 
|Audit Fees(1)         |  |      | $2,532,993 |  |      | $ | 2,584,782 |      |  | $ | 2,810,841 | 
|Audit related Fees(2) |  |      | 722,819    |  |      |   | 585,064   |      |  |   | 245,103   | 
|Tax Fees(3)           |  |      | 43,994     |  |      |   | 60,413    |      |  |   | 74,685    | 
|All Other Fees(4)     |  |      | 3,675      |  |      |   |          |      |  |   | 82,316    | 
|                      |  |      |            |  |      |   |           |      |  |   |           | 
|Total                 |  |      | $3,303,481 |  |      | $ | 3,230,259 |      |  | $ | 3,212,945 | 



|(1) | Audit Fees consist of fees approved for the annual audit of the Corporations consolidated financial statements and quarterly reviews of interim financial
statements of the Corporation with the SEC, including required assistance or services that only the external auditor reasonably can provide and accounting consultations on specific issues and translation. It also includes audit and attestation
services required by statute or regulation, such as comfort letters and consents, SEC prospectus and registration statements, other filings and other offerings, including annual reports and SEC forms and statutory audits.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit related Fees consist of fees billed for assurance and related services that are traditionally performed by the external auditor, and include consultations
concerning financial accounting and reporting standards on proposed transactions, due diligence or accounting work related to acquisitions; employee benefit plan audits, and audit or attestation services not required by statute or regulation.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax Fees include fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refunds, tax consultations, such
as assistance and representation in connection with tax audits and appeals, tax advice related to mergers, acquisitions and divestitures, transfer pricing, and requests for advance tax rulings or technical interpretations.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | All Other Fees include fees billed for forensic accounting and occasional training services, assistance with respect to internal controls over financial reporting and
disclosure controls and procedures.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



161



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ITEM 16D  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES

Not applicable.

ITEM 16E  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F  CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G  CORPORATE GOVERNANCE

Not applicable.



162



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PART III

ITEM 17  FINANCIAL STATEMENTS

Not applicable.

ITEM 18  FINANCIAL STATEMENTS

Our consolidated balance sheets as at December 31, 2014 and 2013 and the related consolidated statements of income,
comprehensive income, equity and cash flows for each of the years in the three-year period ended December 31, 2014, including the notes thereto and together with the report of the Independent Registered Public Accounting Firm, are included
beginning on page F-1 of this annual report.

ITEM 19  EXHIBITS

EXHIBITS

The following
documents are filed as exhibits to this annual report on Form 20-F:



|              |  |                                                                                                                                                                                                                                                                                                                                                                                                
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                    
|              | 
|1.1           |  | Certificate and Articles of Incorporation of Quebecor Media as of January 17, 2013 (incorporated by reference to Exhibit 1.1 to Quebecor Medias Annual Report on Form 20-F for
the fiscal year ended December 31, 2012, filed on March 20, 2013, Commission file No. 333-13792).                                                                                                              
|              | 
|1.2           |  | By-laws of Quebecor Media (translation) (incorporated by reference to Exhibit 1.3 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31,
2011, filed on March 22, 2012, Commission file No. 333-13792).                                                                                                                                                         
|              | 
|1.3           |  | By-law number 2004-1 of Quebecor Media (translation) (incorporated by reference to Exhibit 1.7 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended
December 31, 2004, filed on March 31, 2005, Commission file No. 333-13792).                                                                                                                                            
|              | 
|1.4           |  | By-law number 2004-2 of Quebecor Media (translation) (incorporated by reference to Exhibit 1.8 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended
December 31, 2004, filed on March 31, 2005, Commission file No. 333-13792).                                                                                                                                            
|              | 
|1.5           |  | By-law number 2005-1 of Quebecor Media (translation) (incorporated by reference to Exhibit 1.10 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended
December 31, 2005, filed on March 31, 2006, Commission file No. 333-13792).                                                                                                                                           
|              | 
|1.6           |  | By-law number 2007-1 of Quebecor Media (translation) (incorporated by reference to Exhibit 1.12 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended
December 31, 2006, filed on March 30, 2007, Commission file No. 333-13792).                                                                                                                                           
|              | 
|1.7           |  | By-law number 2007-2 of Quebecor Media (translation) (incorporated by reference to Exhibit 1.14 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended
December 31, 2007, filed on March 27, 2008, Commission file No. 333-13792).                                                                                                                                           
|              | 
|1.8           |  | By-law number 2008-1 of Quebecor Media (translation) (incorporated by reference to Exhibit 1.15 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended
December 31, 2008, filed on March 12, 2009, Commission file No. 333-13792).                                                                                                                                           
|              | 
|2.1           |  | Indenture relating to Quebecor Medias 73/8% Senior Notes due January 15, 2021, dated as of January 5, 2011, by and between Quebecor Media and
Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 2.6 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March 21, 2011, Commission file
No. 333-13792).



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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|2.2  |  | Form of 73/8% Senior Notes due January 15, 2021 of Quebecor Media (incorporated by reference to Exhibit A to Exhibit 2.6 of
Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March 21, 2011, Commission file No. 333-13792).                                                                                                                                                                                  
|     | 
|2.3  |  | Indenture relating to Quebecor Medias 73/8% Senior Notes due January 15, 2021, dated as of January 5, 2011, by and between Quebecor Media and
Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 2.6 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March 21, 2011, Commission file No.
333-13792).                                                                
|     | 
|2.4  |  | Form of 65/8% Senior Notes due January 15, 2023 of Quebecor Media (incorporated by reference to Exhibit A to Exhibit 2.8 to
Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed on March 20, 2013, Commission file No. 333-13792).                                                                                                                                                                                  
|     | 
|2.5  |  | Indenture, relating to Quebecor Medias 65/8% Senior Notes due January 15, 2023, dated as of October 11, 2012, by and between Quebecor Media, and
Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 2.8 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed on March 20, 2013, Commission file
No. 333-13792).                                                             
|     | 
|2.6  |  | Form of 53/4% Senior Notes due January 15, 2023 of Quebecor Media (incorporated by reference to Exhibit A to Exhibit 2.10 to
Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed on March 20, 2013, Commission file No. 333-13792).                                                                                                                                                                                 
|     | 
|2.7  |  | Indenture, relating to Quebecor Medias 53/4% Senior Notes due January 15, 2023, dated as of October 11, 2012, by and between Quebecor Media, and U.S.
Bank National Association, as trustee (incorporated by reference to Exhibit 2.10 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed on March 20, 2013, Commission file
No. 333-13792).                                                                   
|     | 
|2.8  |  | Supplemental Indenture, dated as of March 14, 2014, by and among Quebecor Media, and U.S. Bank National Association, as trustee, to the Indenture dated as of October 11,
2012.                                                                                                                                                                                                                                                                                
|     | 
|2.9  |  | Form of 63/8% Senior Notes due December 15, 2015 of Videotron (incorporated by reference to Exhibit A to Exhibit 4.3 to
Videotrons Registration Statement on Form F-4, dated October 14, 2005, Registration Statement No. 333-128998).                                                                                                                                                                                                                        
|     | 
|2.10 |  | Form of Notation of Guarantee by the subsidiary guarantors of Videotrons
63/8% Senior Notes due 2015 (incorporated by reference to Exhibit E to Exhibit 4.3 to Videotrons Registration Statement on Form F-4, dated October 14, 2005, Registration Statement
No. 333-128998).                                                                                                                                                                                
|     | 
|2.11 |  | Indenture relating to Videotron 63/8% Senior Notes, dated as of September 16, 2005, by and among Videotron Ltd., the subsidiary guarantors signatory thereto,
and Wells Fargo, National Association, as trustee (incorporated by reference to Exhibit 4.3 of Videotrons Registration Statement on Form F-4, dated October 14, 2005, Registration Statement
No. 333-128998).                                                                                   
|     | 
|2.12 |  | Supplemental Indenture, dated as of April 15, 2008, by and among Videotron, Videotron US Inc., as guarantor, and Wells Fargo Bank, National Association, as trustee, to the Indenture
dated as of September 16, 2005 (incorporated by reference to Exhibit 2.10 of Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2008, filed on March 6, 2009, Commission file No. 033-51000).                                                 
|     | 
|2.13 |  | Supplemental Indenture, dated as of September 29, 2010, by and among Videotron Ltd., 9227-2590 Québec inc., as guarantor, and Wells Fargo Bank, National Association, as
trustee, to the Indenture dated as of September 16, 2005 (incorporated by reference to Exhibit 2.14 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March 21, 2011, Commission file
No. 033-51000).                                   
|     | 
|2.14 |  | Supplemental Indenture, dated as of December 22, 2010, by and among Videotron Ltd., Videotron G.P., Videotron L.P. and 9230-7677 Québec inc., as guarantors, and Wells
Fargo Bank, National Association, as trustee, to the Indenture dated as of September 16, 2005 (incorporated by reference to Exhibit 2.15 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on
March 21, 2011, Commission file No. 033-51000).



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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|2.15 |  | Supplemental Indenture, dated as of May 2, 2011, by and among Videotron Ltd., Jobboom inc., as guarantor, and Wells Fargo Bank, National Association, as trustee, to the
Indenture dated as of September 16, 2005 (incorporated by reference to Exhibit 2.19 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file
No. 033-51000).                                               
|     | 
|2.16 |  | Form of 91/8% Senior Notes due April 15, 2018 of Videotron (incorporated by reference to Exhibit A to Exhibit 2.14 of
Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2008, filed on March 6, 2009, Commission file No. 033-51000).                                                                                                                                                                                          
|     | 
|2.17 |  | Form of Notation of Guarantee by the subsidiary guarantors of the 91/8% Senior Notes of Videotron due April 15, 2018 of Videotron Ltd. (incorporated by
reference to Exhibit E to Exhibit 2.13 of Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2008, filed on March 6, 2009, Commission file No. 033-51000).                                                                                                              
|     | 
|2.18 |  | Indenture, dated as of April 15, 2008, by and among Videotron Ltd., the subsidiary guarantors signatory thereto and Wells Fargo Bank, National Association, as trustee (incorporated
by reference to Exhibit 2.14 of Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2008, filed on March 6, 2009, Commission file No. 033-51000).                                                                                           
|     | 
|2.19 |  | Supplemental Indenture, dated as of March 5, 2009, by and among Videotron Ltd., Le SuperClub Vidéotron Ltée, CF Cable TV Inc., Videotron US Inc. and 9193-2926
Québec inc., as guarantors, and Wells Fargo Bank, National Association, as trustee, to the Indenture dated as of April 15, 2008 (incorporated by reference to Exhibit 2.16 to Videotrons Annual Report on Form 20-F for the fiscal
year ended December 31, 2009, filed on March 16, 2010). 
|     | 
|2.20 |  | Supplemental Indenture, dated as of September 29, 2010, by and among Videotron Ltd., 9227-2590 Québec inc., as guarantor, and Wells Fargo Bank, National Association, as
trustee, to the Indenture dated as of April 15, 2008 (incorporated by reference to Exhibit 2.21 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March 21, 2011, Commission file
No. 033-51000).                                   
|     | 
|2.21 |  | Supplemental Indenture, dated as of December 22, 2010, by and among Videotron Ltd., Videotron G.P., Videotron L.P. and 9230-7677 Québec inc., as guarantors, and Wells
Fargo Bank, National Association, as trustee, to the Indenture dated as of April 15, 2008 (incorporated by reference to Exhibit 2.22 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March
21, 2011, Commission file No. 033-51000).
|     | 
|2.22 |  | Supplemental Indenture, dated as of May 2, 2011, by and among Videotron Ltd., Jobboom inc., as guarantor, and Wells Fargo Bank, National Association, as trustee, to the Indenture
dated as of April 15, 2008 (incorporated by reference to Exhibit 2.29 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012).                                                                                  
|     | 
|2.23 |  | Form of 71/8% Senior Notes due January 15, 2020 of Videotron (incorporated by reference to Exhibit A to Exhibit 2.17 to
Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2009, filed on March 16, 2010).                                                                                                                                                                                                                      
|     | 
|2.24 |  | Form of Notation of Guarantee by the subsidiary guarantors of the 71/8% Senior Notes due January 15, 2020 of Videotron (incorporated by reference to
Exhibit E to Exhibit 2.17 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2009, filed on March 16, 2010).                                                                                                                                                            
|     | 
|2.25 |  | Indenture relating to Videotron 71/8% Senior Notes, dated as of January 13, 2010, by and among Videotron Ltd., the subsidiary guarantors signatory
thereto and Computershare Trust Company of Canada, as trustee (incorporated by reference to Exhibit 2.17 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2009, filed on March 16, 2010, Commission
file No. 033-51000).                                                



165



---

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|2.26 |  | Supplemental Indenture, dated as of September 29, 2010, by and among Videotron Ltd., 9227-2590 Québec inc., as guarantor, and Computershare Trust Company of Canada,
as trustee, to the Indenture dated as of January 13, 2010 (incorporated by reference to Exhibit 2.24 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed on March 21, 2011,
Commission file No. 033-51000).                                   
|     | 
|2.27 |  | Supplemental Indenture, dated as of December 22, 2010, by and among Videotron Ltd., Videotron G.P., Videotron L.P. and 9230-7677 Québec inc., as guarantors, and
Computershare Trust Company of Canada, as trustee, to the Indenture dated as of January 13, 2010 (incorporated by reference to Exhibit 2.25 to Videotrons Annual Report on Form 20-F for the fiscal year ended
December 31, 2010, filed on March 21, 2011, Commission file No. 033-51000).
|     | 
|2.28 |  | Supplemental Indenture, dated as of May 2, 2011, by and among Videotron Ltd., Jobboom inc., as guarantor, and Computershare Trust Company of Canada, as trustee, to the Indenture
dated as of January 13, 2010 (incorporated by reference to Exhibit 2.37 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file
No. 033-51000).                                                   
|     | 
|2.29 |  | Form of 6 7/8% Senior Notes due July 15, 2021 of Videotron Ltd. (incorporated by reference to Exhibit A to Exhibit 2.42 to
Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                                                                                                                     
|     | 
|2.30 |  | Form of Notation of Guarantee of the subsidiary guarantors of the 6 7/8% Senior Notes due July 15, 2021 of Videotron Ltd. (incorporated by reference to
Exhibit E to Exhibit 2.42 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                                                           
|     | 
|2.31 |  | Indenture, dated as of July 5, 2011, by and among Videotron Ltd., the subsidiary guarantors signatory thereto and Computershare Trust Company of Canada, as trustee (incorporated by
reference to Exhibit 2.42 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file
No. 033-51000).                                                                                              
|     | 
|2.32 |  | Form of 5% Senior Notes due July 15, 2022 of Videotron (incorporated by reference to Exhibit A to Exhibit 2.47 to Videotrons Annual Report on Form 20-F for the fiscal
year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                                                                                                                              
|     | 
|2.33 |  | Form of Notation of Guarantee by the subsidiary guarantors of the 5% Senior Notes due July 15, 2022 of Videotron Ltd. (incorporated by reference to Exhibit E to Exhibit 2.47 to
Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                                                               
|     | 
|2.34 |  | Indenture, dated as of March 14, 2012, by and among Videotron Ltd., the subsidiary guarantors signatory thereto and Wells Fargo Bank, National Association, as trustee (incorporated
by reference to Exhibit 2.47 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                           
|     | 
|2.35 |  | Form of 5 5/8% Senior Notes due June 15, 2025 of Videotron Ltd. (incorporated by reference to Exhibit A to Exhibit 2.40 to
Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed on March 20, 2014, Commission file No. 033-51000).                                                                                                                                                                                     
|     | 
|2.36 |  | Form of Notation of Guarantee of the subsidiary guarantors of the 5 5/8% Senior Notes due June 15, 2025 of Videotron Ltd. (incorporated by reference to
Exhibit E to Exhibit 2.40 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed on March 20, 2014, Commission file No. 033-51000).                                                                                                                           



166



---

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|2.37 |  | Indenture, dated as of June 17, 2013, by and among Videotron Ltd., the subsidiary guarantors party thereto, and Computershare Trust Company of Canada, as trustee (incorporated
by reference to Exhibit 2.40 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed on March 20, 2014, Commission file
No. 033-51000).                                                                                                                                                                                                                                                                                                                
|     | 
|2.38 |  | Form of 53/8% Senior Notes due June 15, 2024 of Videotron Ltd. (incorporated by reference to Exhibit A to Exhibit
2.40).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | 
|2.39 |  | Form of Notation of Guarantee of the subsidiary guarantors of the 53/8% Senior Notes due June 15, 2024 of Videotron Ltd. (incorporated by reference to
Exhibit E to Exhibit 2.40).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | 
|2.40 |  | Indenture, dated as of April 9, 2014, by and among Videotron Ltd., the subsidiary guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|3.1  |  | Shareholders Agreement dated December 11, 2000 by and among Quebecor Inc., Capital Communications CDPQ inc. (now known as Capital dAmérique CDPQ inc.) and
Quebecor Media, together with a summary thereof in the English-language (incorporated by reference to Exhibit 9.1 to Quebecor Medias Registration Statement on Form F-4, dated September 5, 2001, Registration Statement
No. 333-13792).                                                                                                                                                                                                                                                                      
|     | 
|3.2  |  | Letter Agreement dated December 11, 2000 between Quebecor Inc. and Capital Communications CDPQ inc. (now known as Capital dAmérique CDPQ inc.) (translation)
(incorporated by reference to Exhibit 9.2 to Quebecor Medias Registration Statement on Form F-4, dated September 5, 2001 Registration Statement 333-13792).                                                                                                                                                                                                                                                                                                                                                  
|     | 
|3.3  |  | Written resolution adopted by the Shareholders of Quebecor Media on May 25, 2011 relating to the decrease in the size of the Board of Directors of Quebecor Media
(translation) (incorporated by reference to Exhibit 3.5 to Quebecor Mediaa Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 22, 2012, Commission file
No. 333-13792).                                                                                                                                                                                                                                                                                              
|     | 
|3.4  |  | Amendment Agreement, dated as of October 11, 2012, amending the Shareholders Agreement dated December 11, 2000 by and among Quebecor Inc., Capital Communications CDPQ inc.
(now known as Capital dAmérique CDPQ inc.) and Quebecor Media (incorporated by reference to Exhibit 3.4 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed on March 20, 2013,
Commission file No. 333-13792).                                                                                                                                                                                                                                  
|     | 
|4.1  |  | First Amendment to the Amended and Restated Credit Agreement, dated as of August 1, 2013, amending the Amended and Restated Credit Agreement, dated as of June 14, 2013, by and
among Quebecor Media, as Borrower, the financial institutions party thereto from time to time, as Lenders, and Bank of America, N.A., as Administrative Agent. (incorporated by reference to Exhibit 4.1 to Quebecor Medias Annual Report on Form
20-F for the fiscal year ended December 31, 2013, filed on March 20, 2014, Commission file No. 333-13792)                                                                                                                                
|     | 
|4.2  |  | Amended and Restated Credit Agreement, dated as of June 14, 2013, by and among Quebecor Media, as Borrower, the financial institutions party thereto from time to time, as Lenders,
and Bank of America, N.A., as Administrative Agent. (incorporated by reference to Exhibit 4.2 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed on March 20, 2014, Commission file No.
333-13792)                                                                                                                                                                                                                                       
|     | 
|4.3  |  | First Amending Agreement, dated as of June 14, 2013, amending the Amended and Restated Credit Agreement, dated as of July 20, 2011, by and among Videotron, Royal Bank of
Canada, as administrative agent, and the financial institutions signatory thereto and acknowledged by Le SuperClub Videotron, Videotron Infrastructures Inc., Videotron US Inc., 9227-2590 Québec Inc.,
9230-7677 Québec Inc., Videotron G.P., Videotron L.P. and 8487782 Canada Inc. as guarantors. (incorporated by reference to Exhibit 4.3 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed on
March 20, 2014, Commission file No. 333-13792)
|     | 
|4.4  |  | Credit Agreement, dated as of April 7, 2006, by and between Société Générale (Canada), as lender, and Quebecor Media, as borrower (incorporated by
reference to Exhibit 10.3 of Quebecor Medias Registration Statement on Form F-4, dated November 20, 2007, Registration Statement No. 333-147551).                                                                                                                                                                                                                                                                                                                                                                       



167



---

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|4.5  |  | First Amending Agreement, dated as of December 7, 2007, amending the Credit Agreement dated as of April 7, 2006 among Quebecor Media, as borrower, and
Société Générale (Canada), as lender (incorporated by reference to Exhibit 4.4 of Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2009, filed on March 16, 2010,
Commission file No. 333-13792).                                                                                                                                                                                                      
|     | 
|4.6  |  | Amended and Restated Credit Agreement, dated as of July 20, 2011, by and among Videotron, Royal Bank of Canada, as administrative agent, and the financial institutions signatory
thereto and acknowledged by Le SuperClub Videotron, Videotron Infrastructures Inc., Jobboom Inc., Videotron US Inc., 9227-2590 Québec Inc., 9230-7677 Québec Inc., Videotron G.P., and Videotron L.P., as guarantors (incorporated by
reference to Exhibit 4.1 to Videotrons Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).
|     | 
|4.7  |  | Form of Guarantee of the Guarantors of the Credit Agreement (incorporated by reference to Schedule D of Exhibit 4.1 to Videotrons Annual Report on Form 20-F for the
fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                                                                                                                                                                                                                                                             
|     | 
|4.8  |  | Form of Share Pledge of the shares of Videotron Ltd. and the Guarantors of the Credit Agreement (incorporated by reference to Schedule E of Exhibit 4.1 to Videotrons
Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed on March 21, 2012, Commission file No. 033-51000).                                                                                                                                                                                                                                                                                         
|     | 
|4.9  |  | Purchase Agreement dated as of October 6, 2014, by and among Sun Media, as seller, and Postmedia Network Canada Corporation, as Purchaser.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | 
|7.1  |  | Statement regarding calculation of ratio of earnings to fixed charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | 
|8.1  |  | Subsidiaries of Quebecor Media.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | 
|11.1 |  | Code of Ethics (incorporated by reference to Exhibit 11.1 to Quebecor Medias Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed on March 20,
2013, Commission file No. 333-13792).                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|12.1 |  | Certification of Pierre Dion, President and Chief Executive Officer of Quebecor Media, pursuant to 15 U.S.C. Section 78(m)(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                            
|     | 
|12.2 |  | Certification of Jean-François Pruneau, Senior Vice President and Chief Financial Officer of Quebecor Media, pursuant to 15 U.S.C. Section 78(m)(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                      
|     | 
|13.1 |  | Certification of Pierre Dion, President and Chief Executive Officer of Quebecor Media, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                 
|     | 
|13.2 |  | Certification of Jean-François Pruneau, Senior Vice President and Chief Financial Officer of Quebecor Media, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Actof 2002.                                                                                                                                                                                                                                                                                                                                                                            



168



---

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.



QUEBECOR MEDIA INC.By:

/s/ Jean-François PruneauName: Jean-François PruneauTitle:   Senior Vice President and Chief             Financial Officer


Dated: March 20, 2015



169



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2014, 2013 and 2012





|                                                        |  |  |      | 
|------------------------------------------------------- |  |  | ---- | 
|                                                        | 
|Report of Independent Registered Public Accounting Firm |  |  | F-2  | 
|                                                        | 
|Consolidated financial statements                       |  |  |      | 
|                                                        | 
|Consolidated statements of income                       |  |  | F-3  | 
|                                                        | 
|Consolidated statements of comprehensive income         |  |  | F-4  | 
|                                                        | 
|Consolidated statements of equity                       |  |  | F-5  | 
|                                                        | 
|Consolidated statements of cash flows                   |  |  | F-6  | 
|                                                        | 
|Consolidated balance sheets                             |  |  | F-8  | 
|                                                        | 
|Segmented information                                   |  |  | F-10 | 
|                                                        | 
|Notes to consolidated financial statements              |  |  | F-14 | 



F-1



---

Report of Independent Registered Public Accounting Firm

To the Board of Directors and to the shareholders of

Quebecor Media Inc.

We have audited the accompanying consolidated balance sheets of Quebecor
Media Inc. and its subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2014.
These consolidated financial statements are the responsibility of the Corporations management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. We were not engaged to perform an audit of the Corporations internal control over
financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Corporations internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Quebecor Media Inc. and its subsidiaries at December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in
conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.



|                 |  |                         
|---------------- |  | ------------------------
|Montréal, Canada |  | /s/ Ernst & Young LLP(1)

March 19, 2015



|1 | CPA auditor, CA, public accountancy permit no. A107913
|- | ------------------------------------------------------



F-2



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Years
ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------- |  | ---- | -- |  | ---- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                          |  | Note |    |  | 2014 |   |         | 2013 |  |   | 2012    |  
|                                                                          |  |      |    | 
|Revenues                                                                  |  |      | 2  |  |      | $ | 3,716.1 |      |  | $ | 3,647.5 |   |  | $ | 3,553.3 |  
|                                                                          |  |      |    | 
|Employee costs                                                            |  |      | 3  |  |      |   | 682.2   |      |  |   | 692.8   |   |  |   | 696.3   |  
|Purchase of goods and services                                            |  |      | 3  |  |      |   | 1,639.6 |      |  |   | 1,577.5 |   |  |   | 1,564.1 |  
|Depreciation and amortization                                             |  |      |    |  |      |   | 664.2   |      |  |   | 628.1   |   |  |   | 552.0   |  
|Financial expenses                                                        |  |      | 4  |  |      |   | 324.2   |      |  |   | 360.8   |   |  |   | 335.5   |  
|Loss (gain) on valuation and translation of financial instruments         |  |      | 5  |  |      |   | 3.1     |      |  |   | 244.4   |   |  |   | (136.9  | )
|Restructuring of operations, impairment of assets and other special items |  |      | 6  |  |      |   | 54.4    |      |  |   | 11.6    |   |  |   | (11.3   | )
|Impairment of goodwill and intangible assets                              |  |      | 7  |  |      |   | 81.0    |      |  |   | 35.3    |   |  |   | 43.0    |  
|Loss on debt refinancing                                                  |  |      | 9  |  |      |   | 18.7    |      |  |   | 18.9    |   |  |   | 6.3     |  
|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|Income before income taxes                                                |  |      |    |  |      |   | 248.7   |      |  |   | 78.1    |   |  |   | 504.3   |  
|Income taxes (recovery):                                                  |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|Current                                                                   |  |      | 11 |  |      |   | 117.1   |      |  |   | 83.4    |   |  |   | 45.4    |  
|Deferred                                                                  |  |      | 11 |  |      |   | (20.7   | )    |  |   | (46.7   | ) |  |   | 97.6    |  
|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  |      |    |  |      |   | 96.4    |      |  |   | 36.7    |   |  |   | 143.0   |  
|                                                                          |  |      |    | 
|Income from continuing operations                                         |  |      |    |  |      |   | 152.3   |      |  |   | 41.4    |   |  |   | 361.3   |  
|Loss from discontinued operations                                         |  |      | 8  |  |      |   | (65.5   | )    |  |   | (193.8  | ) |  |   | (129.6  | )
|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss)                                                         |  |      |    |  |      | $ | 86.8    |      |  | $ | (152.4  | ) |  | $ | 231.7   |  
|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  |      |    | 
|Income (loss) from continuing operations attributable to                  |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|Shareholders                                                              |  |      |    |  |      | $ | 173.1   |      |  | $ | 34.2    |   |  | $ | 364.2   |  
|Non-controlling interests                                                 |  |      |    |  |      |   | (20.8   | )    |  |   | 7.2     |   |  |   | (2.9    | )
|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  |      |    | 
|Net income (loss) attributable to                                         |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  
|Shareholders                                                              |  |      |    |  |      | $ | 107.6   |      |  | $ | (159.6  | ) |  | $ | 234.6   |  
|Non-controlling interests                                                 |  |      |    |  |      |   | (20.8   | )    |  |   | 7.2     |   |  |   | (2.9    | )
|                                                                          |  |      |    |  |      |   |         |      |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.



F-3



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                       |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------- |  | ---- | -- |  | ---- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                       |  | Note |    |  | 2014 |   |       | 2013 |  |   | 2012   |  
|                                                                       |  |      |    | 
|Income from continuing operations                                      |  |      |    |  |      | $ | 152.3 |      |  | $ | 41.4   |   |  | $ | 361.3  |  
|                                                                       |  |      |    | 
|Other comprehensive (loss) income from continuing operations:          |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Items that may be reclassified to income:                              |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Cash flows hedges:                                                     |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Gain (loss) on valuation of derivative financial instruments           |  |      |    |  |      |   | 14.2  |      |  |   | (45.1  | ) |  |   | 33.1   |  
|Deferred income taxes                                                  |  |      |    |  |      |   | (21.3 | )    |  |   | (1.2   | ) |  |   | 2.9    |  
|Items that will not be reclassified to income:                         |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Defined benefit plans:                                                 |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Re-measurement (loss) gain                                             |  |      | 29 |  |      |   | (45.1 | )    |  |   | 109.7  |   |  |   | (17.9  | )
|Deferred income taxes                                                  |  |      |    |  |      |   | 12.1  |      |  |   | (29.4  | ) |  |   | 4.7    |  
|Reclassification to income:                                            |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Gain related to cash flows hedges                                      |  |      | 9  |  |      |   | (10.8 | )    |  |   | (14.5  | ) |  |   | (15.3  | )
|Deferred income taxes                                                  |  |      |    |  |      |   | 0.4   |      |  |   | 1.1    |   |  |   | 0.5    |  
|                                                                       |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|                                                                       |  |      |    |  |      |   | (50.5 | )    |  |   | 20.6   |   |  |   | 8.0    |  
|                                                                       |  |      |    | 
|Comprehensive income from continuing operations                        |  |      |    |  |      |   | 101.8 |      |  |   | 62.0   |   |  |   | 369.3  |  
|                                                                       |  |      |    | 
|Loss from discontinued operations                                      |  |      | 8  |  |      |   | (65.5 | )    |  |   | (193.8 | ) |  |   | (129.6 | )
|Other comprehensive (loss) income from discontinued operations         |  |      | 8  |  |      |   | (7.6  | )    |  |   | 28.3   |   |  |   | (1.5   | )
|                                                                       |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|Comprehensive income (loss)                                            |  |      |    |  |      | $ | 28.7  |      |  | $ | (103.5 | ) |  | $ | 238.2  |  
|                                                                       |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|                                                                       |  |     
|Comprehensive income (loss) from continuing operations attributable to |  |      |    |  |      |   |       |     
|Shareholders                                                           |  |      |    |  |      | $ | 126.9 |      |  |   | 42.2   |   |  |   | 373.4  |  
|Non-controlling interests                                              |  |      |    |  |      |   | (25.1 | )    |  |   | 19.8   |   |  |   | (4.1   | )
|                                                                       |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  
|                                                                       |  |     
|Comprehensive income (loss) attributable to                            |  |      |    |  |      |   |       |     
|Shareholders                                                           |  |      |    |  |      | $ | 53.8  |      |  | $ | (123.3 | ) |  | $ | 242.3  |  
|Non-controlling interests                                              |  |      |    |  |      |   | (25.1 | )    |  |   | 19.8   |   |  |   | (4.1   | )
|                                                                       |  |      |    |  |      |   |       |      |  |   |        |   |  |   |        |  

See accompanying notes to consolidated financial statements.



F-4



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

Years
ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                             |  |                                     |         |   |                    |   |          |         |  |   |                                             |   |  |                                               |       |   |             |   |       |   |  |   |          |  
|-------------------------------------------- |  | ----------------------------------- | ------- | - | ------------------ | - | -------- | ------- |  | - | ------------------------------------------- | - |  | --------------------------------------------- | ----- | - | ----------- | - | ----- | - |  | - | -------- | -
|                                             |  | Equity attributable to shareholders |         |   |                    |   |          |         | 
|                                             |  | Capitalstock(note 22)               |         |   | Contributedsurplus |   |          | Deficit |  |   | Accumulatedothercomprehensive loss(note 24) |   |  | Equityattributableto non-controllinginterests |       |   | Totalequity |  
|                                             |  |                                     |         |   |                    |  
|Balance as of December 31, 2011              |  | $                                   | 1,752.4 |   |                    | $ | 3,176.6  |         |  | $ | (1,967.1                                    | ) |  | $                                             | (74.8 | ) |             | $ | 135.7 |   |  | $ | 3,022.8  |  
|Net income (loss)                            |  |                                     |        |   |                    |   |         |         |  |   | 234.6                                       |   |  |                                               |      |   |             |   | (2.9  | ) |  |   | 231.7    |  
|Other comprehensive income (loss)            |  |                                     |        |   |                    |   |         |         |  |   |                                            |   |  |                                               | 7.7   |   |             |   | (1.2  | ) |  |   | 6.5      |  
|Acquisition of non-controlling interests     |  |                                     |        |   |                    |   | (0.3     | )       |  |   |                                            |   |  |                                               |      |   |             |   | 0.3   |   |  |   |         |  
|Reclassification of stated capital (note 22) |  |                                     | 3,175.0 |   |                    |   | (3,175.0 | )       |  |   |                                            |   |  |                                               |      |   |             |   |      |   |  |   |         |  
|Repurchase of shares (note 22)               |  |                                     | (811.3  | ) |                    |   |         |         |  |   | (188.8                                      | ) |  |                                               |      |   |             |   |      |   |  |   | (1,000.1 | )
|Dividends                                    |  |                                     |        |   |                    |   |         |         |  |   | (100.0                                      | ) |  |                                               |      |   |             |   | (0.5  | ) |  |   | (100.5   | )
|                                             |  |                                     |         |   |                    |   |          |         |  |   |                                             |   |  |                                               |       |   |             |   |       |   |  |   |          |  
|Balance as of December 31, 2012              |  |                                     | 4,116.1 |   |                    |   | 1.3      |         |  |   | (2,021.3                                    | ) |  |                                               | (67.1 | ) |             |   | 131.4 |   |  |   | 2,160.4  |  
|Net (loss) income                            |  |                                     |        |   |                    |   |         |         |  |   | (159.6                                      | ) |  |                                               |      |   |             |   | 7.2   |   |  |   | (152.4   | )
|Other comprehensive income                   |  |                                     |        |   |                    |   |         |         |  |   |                                            |   |  |                                               | 36.3  |   |             |   | 12.6  |   |  |   | 48.9     |  
|Dividends                                    |  |                                     |        |   |                    |   |         |         |  |   | (100.0                                      | ) |  |                                               |      |   |             |   | (0.4  | ) |  |   | (100.4   | )
|Business acquisition                         |  |                                     |        |   |                    |   |         |         |  |   |                                            |   |  |                                               |      |   |             |   | 0.3   |   |  |   | 0.3      |  
|                                             |  |                                     |         |   |                    |   |          |         |  |   |                                             |   |  |                                               |       |   |             |   |       |   |  |   |          |  
|Balance as of December 31, 2013              |  |                                     | 4,116.1 |   |                    |   | 1.3      |         |  |   | (2,280.9                                    | ) |  |                                               | (30.8 | ) |             |   | 151.1 |   |  |   | 1,956.8  |  
|Net income (loss)                            |  |                                     |        |   |                    |   |         |         |  |   | 107.6                                       |   |  |                                               |      |   |             |   | (20.8 | ) |  |   | 86.8     |  
|Other comprehensive loss                     |  |                                     |        |   |                    |   |         |         |  |   |                                            |   |  |                                               | (53.8 | ) |             |   | (4.3  | ) |  |   | (58.1    | )
|Dividends                                    |  |                                     |        |   |                    |   |         |         |  |   | (100.0                                      | ) |  |                                               |      |   |             |   | (0.2  | ) |  |   | (100.2   | )
|Business acquisition                         |  |                                     |        |   |                    |   |         |         |  |   | (0.1                                        | ) |  |                                               |      |   |             |   | 0.1   |   |  |   |         |  
|                                             |  |                                     |         |   |                    |   |          |         |  |   |                                             |   |  |                                               |       |   |             |   |       |   |  |   |          |  
|Balance as of December 31, 2014              |  | $                                   | 4,116.1 |   |                    | $ | 1.3      |         |  | $ | (2,273.4                                    | ) |  | $                                             | (84.6 | ) |             | $ | 125.9 |   |  | $ | 1,885.3  |  
|                                             |  |                                     |         |   |                    |   |          |         |  |   |                                             |   |  |                                               |       |   |             |   |       |   |  |   |          |  

See accompanying notes to consolidated financial statements.



F-5



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|------------------------------------------------------------------ |  | ---- | -- |  | ---- | - | ------ | ---- |  | - | ------ | - |  | - | -------- | -
|                                                                   |  | Note |    |  | 2014 |   |        | 2013 |  |   | 2012   |  
|                                                                   |  |      |    | 
|Cash flows related to operating activities                         |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Income from continuing operations                                  |  |      |    |  |      | $ | 152.3  |      |  | $ | 41.4   |   |  | $ | 361.3    |  
|Adjustments for:                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Depreciation of property, plant and equipment                      |  |      | 14 |  |      |   | 538.8  |      |  |   | 502.0  |   |  |   | 434.9    |  
|Amortization of intangible assets                                  |  |      | 15 |  |      |   | 125.4  |      |  |   | 126.1  |   |  |   | 117.1    |  
|Loss (gain) on valuation and translation of financial instruments  |  |      | 5  |  |      |   | 3.1    |      |  |   | 244.4  |   |  |   | (136.9   | )
|Loss (gain) on disposal of assets                                  |  |      | 6  |  |      |   | 0.1    |      |  |   | 0.8    |   |  |   | (12.8    | )
|Impairment of assets                                               |  |      | 6  |  |      |   | 6.7    |      |  |   | 2.1    |   |  |   |         |  
|Impairment of goodwill and intangible assets                       |  |      | 7  |  |      |   | 81.0   |      |  |   | 35.3   |   |  |   | 43.0     |  
|Loss on debt refinancing                                           |  |      | 9  |  |      |   | 18.7   |      |  |   | 18.9   |   |  |   | 6.3      |  
|Amortization of financing costs and long-term debt discount        |  |      | 4  |  |      |   | 8.6    |      |  |   | 11.9   |   |  |   | 14.3     |  
|Deferred income taxes                                              |  |      | 11 |  |      |   | (20.7  | )    |  |   | (46.7  | ) |  |   | 97.6     |  
|Other                                                              |  |      |    |  |      |   | (0.6   | )    |  |   | (0.9   | ) |  |   | 3.9      |  
|                                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|                                                                   |  |      |    |  |      |   | 913.4  |      |  |   | 935.3  |   |  |   | 928.7    |  
|Net change in non-cash balances related to operating activities    |  |      |    |  |      |   | 76.9   |      |  |   | (11.9  | ) |  |   | 127.8    |  
|                                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Cash flows provided by continuing operating activities             |  |      |    |  |      |   | 990.3  |      |  |   | 923.4  |   |  |   | 1,056.5  |  
|                                                                   |  |      |    | 
|Cash flows related to investing activities                         |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Business acquisitions                                              |  |      | 10 |  |      |   | (132.3 | )    |  |   | (7.7   | ) |  |   | (1.6     | )
|Business disposals                                                 |  |      | 8  |  |      |   | 193.5  |      |  |   | 59.2   |   |  |   | 0.8      |  
|Additions to property, plant and equipment                         |  |      | 14 |  |      |   | (645.5 | )    |  |   | (562.2 | ) |  |   | (701.8   | )
|Additions to intangible assets                                     |  |      | 15 |  |      |   | (317.3 | )    |  |   | (77.8  | ) |  |   | (88.6    | )
|Proceeds from disposals of assets                                  |  |      | 6  |  |      |   | 5.4    |      |  |   | 13.2   |   |  |   | 28.3     |  
|Acquisition of tax deductions from the parent corporation          |  |      | 28 |  |      |   | (3.1   | )    |  |   | (6.9   | ) |  |   | (10.2    | )
|Other                                                              |  |      |    |  |      |   | 0.5    |      |  |   | 1.7    |   |  |   | (1.4     | )
|                                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Cash flows used in continuing investing activities                 |  |      |    |  |      |   | (898.8 | )    |  |   | (580.5 | ) |  |   | (774.5   | )
|                                                                   |  |      |    | 
|Cash flows related to financing activities                         |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Net change in bank indebtedness                                    |  |      |    |  |      |   | 4.5    |      |  |   |       |   |  |   | (4.0     | )
|Net change under revolving facilities                              |  |      |    |  |      |   |       |      |  |   |       |   |  |   | (19.7    | )
|Issuance of long-term debt, net of financing fees                  |  |      | 20 |  |      |   | 728.3  |      |  |   | 752.6  |   |  |   | 2,102.1  |  
|Repayments of long-term debt                                       |  |      | 9  |  |      |   | (814.7 | )    |  |   | (722.8 | ) |  |   | (1,202.3 | )
|Settlement of hedging contracts                                    |  |      | 9  |  |      |   | (65.4  | )    |  |   | (29.7  | ) |  |   | (43.6    | )
|Repurchase of Common Shares                                        |  |      | 22 |  |      |   |       |      |  |   |       |   |  |   | (1,000.1 | )
|Dividends                                                          |  |      |    |  |      |   | (100.0 | )    |  |   | (100.0 | ) |  |   | (100.0   | )
|Dividends paid to non-controlling interests                        |  |      |    |  |      |   | (0.2   | )    |  |   | (0.4   | ) |  |   | (0.5     | )
|Other                                                              |  |      |    |  |      |   |       |      |  |   |       |   |  |   | 0.1      |  
|                                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Cash flows used in continuing financing activities                 |  |      |    |  |      |   | (247.5 | )    |  |   | (100.3 | ) |  |   | (268.0   | )
|                                                                   |  |      |    |  |      |   |        |      |  |   |        |   |  |   |          |  
|Net change in cash and cash equivalents from continuing operations |  |      |    |  |      | $ | (156.0 | )    |  | $ | 242.6  |   |  | $ | 14.0     |  



F-6



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ---- | - |  | ---- | - | ------ | ---- |  | - | ----- | - |  | - | ----- | -
|                                                                                                                           |  | Note |   |  | 2014 |   |        | 2013 |  |   | 2012  |  
|                                                                                                                           |  |      |   | 
|Net change in cash and cash equivalents from continuing operations                                                         |  |      |   |  |      | $ | (156.0 | )    |  | $ | 242.6 |   |  | $ | 14.0  |  
|Cash flows provided by discontinued operations                                                                             |  |      | 8 |  |      |   | 74.7   |      |  |   | 5.3   |   |  |   | 71.2  |  
|Cash and cash equivalents at beginning of year                                                                             |  |      |   |  |      |   | 476.6  |      |  |   | 228.7 |   |  |   | 143.5 |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|Cash and cash equivalents at end of year                                                                                   |  |      |   |  |      | $ | 395.3  |      |  | $ | 476.6 |   |  | $ | 228.7 |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   | 
|Additional information on the consolidated statements of cash flows                                                        |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   | 
|Cash and cash equivalents consist of                                                                                       |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|Cash                                                                                                                       |  |      |   |  |      | $ | 155.9  |      |  | $ | 207.3 |   |  | $ | 76.0  |  
|Cash equivalents                                                                                                           |  |      |   |  |      |   | 239.4  |      |  |   | 269.3 |   |  |   | 152.7 |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   |  |      | $ | 395.3  |      |  | $ | 476.6 |   |  | $ | 228.7 |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   | 
|Changes in non-cash balances related to operating activities (excluding the effect of business acquisitions and
disposals) |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|Accounts receivable                                                                                                        |  |      |   |  |      | $ | 8.1    |      |  | $ | (2.1  | ) |  | $ | 13.5  |  
|Inventories                                                                                                                |  |      |   |  |      |   | 12.4   |      |  |   | 10.3  |   |  |   | 19.2  |  
|Accounts payable, accrued charges and provisions                                                                           |  |      |   |  |      |   | 34.3   |      |  |   | (59.8 | ) |  |   | 71.3  |  
|Income taxes                                                                                                               |  |      |   |  |      |   | 9.4    |      |  |   | 48.7  |   |  |   | 58.3  |  
|Stock-based compensation                                                                                                   |  |      |   |  |      |   | 0.6    |      |  |   | 3.1   |   |  |   | (8.0  | )
|Deferred revenues                                                                                                          |  |      |   |  |      |   | 8.8    |      |  |   | (4.0  | ) |  |   | (3.7  | )
|Defined benefit plans                                                                                                      |  |      |   |  |      |   | (19.7  | )    |  |   | (19.6 | ) |  |   | (6.3  | )
|Other                                                                                                                      |  |      |   |  |      |   | 23.0   |      |  |   | 11.5  |   |  |   | (16.5 | )
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   |  |      | $ | 76.9   |      |  | $ | (11.9 | ) |  | $ | 127.8 |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   | 
|Non-cash investing activities                                                                                              |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|Net change in additions to property, plant and equipment and intangible assets financed with accounts payable              |  |      |   |  |      | $ | 2.4    |      |  | $ | 2.2   |   |  | $ | 52.8  |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                           |  |      |   | 
|Interest and taxes reflected as operating activities                                                                       |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  
|Cash interest payments                                                                                                     |  |      |   |  |      | $ | 312.3  |      |  | $ | 336.8 |   |  | $ | 301.2 |  
|Cash income tax payments (net of refunds)                                                                                  |  |      |   |  |      |   | 124.9  |      |  |   | 49.4  |   |  |   | 5.1   |  
|                                                                                                                           |  |      |   |  |      |   |        |      |  |   |       |   |  |   |       |  

See accompanying notes to consolidated financial statements.



F-7



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2014 and 2013

(in millions of
Canadian dollars)





|                                           |  |      |    |  |      |   |         |      |  |   |         | 
|------------------------------------------ |  | ---- | -- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                                           |  | Note |    |  | 2014 |   |         | 2013 | 
|                                           |  |      |   
|Assets                                     |  |      |    |  |      |   |         |      |  |   |         | 
|                                           |  |      |   
|Current assets                             |  |      |    |  |      |   |         |      |  |   |         | 
|Cash and cash equivalents                  |  |      |    |  |      | $ | 395.3   |      |  | $ | 476.6   | 
|Accounts receivable                        |  |      | 12 |  |      |   | 448.4   |      |  |   | 565.7   | 
|Income taxes                               |  |      |    |  |      |   | 6.7     |      |  |   | 18.0    | 
|Amounts receivable from parent corporation |  |      |    |  |      |   | 7.3     |      |  |   | 6.7     | 
|Inventories                                |  |      | 13 |  |      |   | 212.2   |      |  |   | 239.4   | 
|Prepaid expenses                           |  |      |    |  |      |   | 37.8    |      |  |   | 47.9    | 
|Assets held for sale                       |  |      | 8  |  |      |   | 398.1   |      |  |   | 76.9    | 
|                                           |  |      |    |  |      |   |         |      |  |   |         | 
|                                           |  |      |    |  |      |   | 1,505.8 |      |  |   | 1,431.2 | 
|                                           |  |      |   
|Non-current assets                         |  |      |    |  |      |   |         |      |  |   |         | 
|Property, plant and equipment              |  |      | 14 |  |      |   | 3,382.9 |      |  |   | 3,382.4 | 
|Intangible assets                          |  |      | 15 |  |      |   | 945.8   |      |  |   | 824.8   | 
|Goodwill                                   |  |      | 16 |  |      |   | 2,714.6 |      |  |   | 3,061.5 | 
|Derivative financial instruments           |  |      | 27 |  |      |   | 400.9   |      |  |   | 142.1   | 
|Deferred income taxes                      |  |      | 11 |  |      |   | 7.8     |      |  |   | 26.6    | 
|Other assets                               |  |      | 17 |  |      |   | 78.9    |      |  |   | 101.7   | 
|                                           |  |      |    |  |      |   |         |      |  |   |         | 
|                                           |  |      |    |  |      |   | 7,530.9 |      |  |   | 7,539.1 | 
|                                           |  |      |    |  |      |   |         |      |  |   |         | 
|Total assets                               |  |      |    |  |      | $ | 9,036.7 |      |  | $ | 8,970.3 | 
|                                           |  |      |    |  |      |   |         |      |  |   |         | 



F-8



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

December 31, 2014 and 2013

(in millions of
Canadian dollars)





|                                     |  |      |        |  |      |   |          |      |  |   |          |  
|------------------------------------ |  | ---- | ------ |  | ---- | - | -------- | ---- |  | - | -------- | -
|                                     |  | Note |        |  | 2014 |   |          | 2013 | 
|                                     |  |      |       
|Liabilities and equity               |  |      |        |  |      |   |          |      |  |   |          |  
|                                     |  |      |       
|Current liabilities                  |  |      |        |  |      |   |          |      |  |   |          |  
|Bank indebtedness                    |  |      |        |  |      | $ | 4.5      |      |  | $ |         |  
|Accounts payable and accrued charges |  |      | 18     |  |      |   | 643.2    |      |  |   | 693.2    |  
|Provisions                           |  |      | 19     |  |      |   | 56.7     |      |  |   | 39.4     |  
|Deferred revenue                     |  |      |        |  |      |   | 283.0    |      |  |   | 288.8    |  
|Income taxes                         |  |      |        |  |      |   | 85.5     |      |  |   | 89.2     |  
|Derivative financial instruments     |  |      | 27     |  |      |   | 0.9      |      |  |   | 116.2    |  
|Current portion of long-term debt    |  |      | 20     |  |      |   | 229.1    |      |  |   | 100.2    |  
|Liabilities held for sale            |  |      | 8      |  |      |   | 97.9     |      |  |   | 9.0      |  
|                                     |  |      |        |  |      |   |          |      |  |   |          |  
|                                     |  |      |        |  |      |   | 1,400.8  |      |  |   | 1,336.0  |  
|                                     |  |      |       
|Non-current liabilities              |  |      |        |  |      |   |          |      |  |   |          |  
|Long-term debt                       |  |      | 20     |  |      |   | 4,972.7  |      |  |   | 4,875.8  |  
|Derivative financial instruments     |  |      | 27     |  |      |   | 101.9    |      |  |   | 77.3     |  
|Other liabilities                    |  |      | 21     |  |      |   | 173.6    |      |  |   | 155.8    |  
|Deferred income taxes                |  |      | 11     |  |      |   | 502.4    |      |  |   | 568.6    |  
|                                     |  |      |        |  |      |   |          |      |  |   |          |  
|                                     |  |      |        |  |      |   | 5,750.6  |      |  |   | 5,677.5  |  
|                                     |  |      |       
|Equity                               |  |      |        |  |      |   |          |      |  |   |          |  
|Capital stock                        |  |      | 22     |  |      |   | 4,116.1  |      |  |   | 4,116.1  |  
|Contributed surplus                  |  |      |        |  |      |   | 1.3      |      |  |   | 1.3      |  
|Deficit                              |  |      |        |  |      |   | (2,273.4 | )    |  |   | (2,280.9 | )
|Accumulated other comprehensive loss |  |      | 24     |  |      |   | (84.6    | )    |  |   | (30.8    | )
|                                     |  |      |        |  |      |   |          |      |  |   |          |  
|Equity attributable to shareholders  |  |      |        |  |      |   | 1,759.4  |      |  |   | 1,805.7  |  
|Non-controlling interests            |  |      |        |  |      |   | 125.9    |      |  |   | 151.1    |  
|                                     |  |      |        |  |      |   |          |      |  |   |          |  
|                                     |  |      |        |  |      |   | 1,885.3  |      |  |   | 1,956.8  |  
|Commitments and contingencies        |  |      | 19, 25 |  |      |   |          |      |  |   |          |  
|Guarantees                           |  |      | 26     |  |      |   |          |      |  |   |          |  
|Subsequent events                    |  |      | 31     |  |      |   |          |      |  |   |          |  
|                                     |  |      |        |  |      |   |          |      |  |   |          |  
|Total liabilities and equity         |  |      |        |  |      | $ | 9,036.7  |      |  | $ | 8,970.3  |  
|                                     |  |      |        |  |      |   |          |      |  |   |          |  

See accompanying notes to consolidated financial statements.

On March 19, 2015, the Board of Directors approved the consolidated financial statements for the years ended December 31, 2014, 2013 and 2012.

On behalf of the Board of Directors,



|                                                                                                |  |                                              
|----------------------------------------------------------------------------------------------- |  | ---------------------------------------------
|/s/ Brian Mulroney The
Right Honourable Brian Mulroney, P.C., C.C., LL.D.,Chairman of the Board |  | /s/ Jean La Couture
Jean La Couture, Director



F-9



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

SEGMENTED INFORMATION

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)



Quebecor Media Inc. (Quebecor Media or
the Corporation) is incorporated under the laws of Québec and is a subsidiary of Quebecor Inc. (Quebecor or the parent corporation). The Corporations head office and registered office is located at
612 rue Saint-Jacques, Montréal (Québec), Canada. The percentages of voting rights and of equity in its major subsidiaries are as follows:



|                             |  |          |       |   |          |  |       |  
|---------------------------- |  | -------- | ----- | - | -------- |  | ----- | -
|                             |  | % voting |       |   | % equity | 
|Videotron Ltd.               |  |          | 100.0 | % |          |  | 100.0 | %
|TVA Group Inc.               |  |          | 99.9  | % |          |  | 51.5  | %
|Sun Media Corporation        |  |          | 100.0 | % |          |  | 100.0 | %
|Quebecor Media Printing Inc. |  |          | 100.0 | % |          |  | 100.0 | %
|Archambault Group Inc.       |  |          | 100.0 | % |          |  | 100.0 | %

The Corporation operates, through its subsidiaries, in the following industry segments: Telecommunications, Media, and
Sports and Entertainment. The Telecommunications segment offers television distribution, Internet, business solutions, cable and mobile telephony services in Canada and is engaged in the rental of movies, televisual products and console games
through its video-on-demand service and rentals stores. This segment also operates retail stores specialized in the sale of cultural and entertainment products, and
offers online sales of downloadable music and books in Québec. The operations of the Media segment in Québec include the printing, publishing and distribution of daily newspapers, the printing of commercial inserts, the operation of an
over-the-air television network, the operation of television specialty services, the operation of studio, soundstage and equipment leasing and post-production services
for the film and television industries, the operation of Internet portals and specialized sites, the publishing of books and magazines, the distribution of books, magazines and movies and the operation of an out-of-home advertising business. The activities of the Sports and Entertainment segment in Québec encompass show production, sporting and cultural events management, music production, distribution and
streaming, the operation of two Quebec Major Junior Hockey League (QMJHL) teams, and the operation and management of the future Québec City amphitheatre.

In 2014, the Corporation changed its organisational structure and its operations are now managed through the following three segments: Telecommunications, Media, and Sports and Entertainment. The
reorganization consisted in (a) the creation of the new Media segment, which includes all activities of the previous News Media and Broadcasting segments, as well as the book publishing and distribution activities previously included in the
Leisure and Entertainment segment, (b) the creation of the new Sports and Entertainment segment, which includes all operating, production, distribution and management activities of the previous Leisure and Entertainment segment relating to
music, entertainment, sports and the future Québec City amphitheatre, and (c) the transfer of the retail businesses from the previous Leisure and Entertainment segment to the Telecommunications segment. Accordingly, prior period figures
in the Corporations segmented information have been reclassified to reflect these changes.

These segments are managed separately since
they all require specific market strategies. The accounting policies of each segment are the same as the accounting policies used for the consolidated financial statements. Segment income includes income from sales to third parties and inter-segment sales. Transactions between segments are measured at exchange amounts between the parties.



F-10



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

SEGMENTED INFORMATION (continued)

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   |         | 
|------------------------------------------------------------------------- |  | ------------------ | ------- |  | ----- | - | ----- | ----------------------- |  | - | ---------------------------- | - |  | ----- | ------ | - |  | - | ------- | 
|                                                                          |  | Telecommunications |         |  | Media |   |       | Sports andEntertainment |  |   | Head 
officeandIntersegments |   |  | Total |       
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                              |   |  | 2014  |       
|                                                                          |  |                    |         |  |      
|Revenues                                                                  |  | $                  | 2,965.0 |  |       | $ | 807.7 |                         |  | $ | 60.9                         |   |  | $     | (117.5 | ) |  | $ | 3,716.1 | 
|Employee costs                                                            |  |                    | 367.1   |  |       |   | 263.5 |                         |  |   | 9.1                          |   |  |       | 42.5   |   |  |   | 682.2   | 
|Purchase of goods and services                                            |  |                    | 1,243.0 |  |       |   | 497.7 |                         |  |   | 55.2                         |   |  |       | (156.3 | ) |  |   | 1,639.6 | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   |         | 
|Adjusted operating income1                                                |  |                    | 1,354.9 |  |       |   | 46.5  |                         |  |   | (3.4                         | ) |  |       | (3.7   | ) |  |   | 1,394.3 | 
|                                                                          |  |                    |         |  |      
|Depreciation and amortization                                             |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   | 664.2   | 
|Financial expenses                                                        |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   | 324.2   | 
|Loss on valuation and translation of financial instruments                |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   | 3.1     | 
|Restructuring of operations, impairment of assets and other special items |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   | 54.4    | 
|Impairment of goodwill and intangible assets                              |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   | 81.0    | 
|Loss on debt refinancing                                                  |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   | 18.7    | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   |         | 
|Income before income taxes                                                |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  | $ | 248.7   | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   |         | 
|Additions to property, plant and equipment                                |  | $                  | 607.5   |  |       | $ | 32.2  |                         |  | $ | 5.5                          |   |  | $     | 0.3    |   |  | $ | 645.5   | 
|Additions to intangible assets                                            |  |                    | 304.7   |  |       |   | 9.3   |                         |  |   | 0.1                          |   |  |       | 3.2    |   |  |   | 317.3   | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                              |   |  |       |        |   |  |   |         | 

See accompanying notes to consolidated financial statements.



F-11



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

SEGMENTED INFORMATION (continued)

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   |         | 
|------------------------------------------------------------------------- |  | ------------------ | ------- |  | ----- | - | ----- | ----------------------- |  | - | --------------------------- | - |  | ----- | ------ | - |  | - | ------- | 
|                                                                          |  | Telecommunications |         |  | Media |   |       | Sports andEntertainment |  |   | Head officeandIntersegments |   |  | Total |       
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |   |  | 2013  |       
|                                                                          |  |                    |         |  |      
|Revenues                                                                  |  | $                  | 2,860.5 |  |       | $ | 828.3 |                         |  | $ | 70.2                        |   |  | $     | (111.5 | ) |  | $ | 3,647.5 | 
|Employee costs                                                            |  |                    | 372.8   |  |       |   | 269.6 |                         |  |   | 8.4                         |   |  |       | 42.0   |   |  |   | 692.8   | 
|Purchase of goods and services                                            |  |                    | 1,193.5 |  |       |   | 474.7 |                         |  |   | 62.9                        |   |  |       | (153.6 | ) |  |   | 1,577.5 | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   |         | 
|Adjusted operating income1                                                |  |                    | 1,294.2 |  |       |   | 84.0  |                         |  |   | (1.1                        | ) |  |       | 0.1    |   |  |   | 1,377.2 | 
|                                                                          |  |                    |         |  |      
|Depreciation and amortization                                             |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   | 628.1   | 
|Financial expenses                                                        |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   | 360.8   | 
|Loss on valuation and translation of financial instruments                |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   | 244.4   | 
|Restructuring of operations, impairment of assets and other special items |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   | 11.6    | 
|Impairment of goodwill and intangible assets                              |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   | 35.3    | 
|Loss on debt refinancing                                                  |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   | 18.9    | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   |         | 
|Income before income taxes                                                |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  | $ | 78.1    | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   |         | 
|Additions to property, plant and equipment                                |  | $                  | 532.9   |  |       | $ | 26.2  |                         |  | $ | 0.6                         |   |  | $     | 2.5    |   |  | $ | 562.2   | 
|Additions to intangible assets                                            |  |                    | 67.9    |  |       |   | 8.8   |                         |  |   |                            |   |  |       | 1.1    |   |  |   | 77.8    | 
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |   |  |       |        |   |  |   |         | 

See accompanying notes to consolidated financial statements.



F-12



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

SEGMENTED INFORMATION (continued)

Years ended December 31, 2014, 2013 and 2012

(in millions of Canadian dollars)





|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------ | ------- |  | ----- | - | ----- | ----------------------- |  | - | --------------------------- |  |  | ----- | ------ | - |  | - | ------- | -
|                                                                          |  | Telecommunications |         |  | Media |   |       | Sports andEntertainment |  |   | Head officeandIntersegments |  |  | Total |       
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |  |  | 2012  |       
|                                                                          |  |                    |         |  |      
|Revenues                                                                  |  | $                  | 2,758.8 |  |       | $ | 844.8 |                         |  | $ | 76.9                        |  |  | $     | (127.2 | ) |  | $ | 3,553.3 |  
|Employee costs                                                            |  |                    | 365.1   |  |       |   | 298.3 |                         |  |   | 7.5                         |  |  |       | 25.4   |   |  |   | 696.3   |  
|Purchase of goods and services                                            |  |                    | 1,173.5 |  |       |   | 484.3 |                         |  |   | 67.1                        |  |  |       | (160.8 | ) |  |   | 1,564.1 |  
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   |         |  
|Adjusted operating income1                                                |  |                    | 1,220.2 |  |       |   | 62.2  |                         |  |   | 2.3                         |  |  |       | 8.2    |   |  |   | 1,292.9 |  
|                                                                          |  |                    |         |  |      
|Depreciation and amortization                                             |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   | 552.0   |  
|Financial expenses                                                        |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   | 335.5   |  
|Gain on valuation and translation of financial instruments                |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   | (136.9  | )
|Restructuring of operations, impairment of assets and other special items |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   | (11.3   | )
|Impairment of goodwill and intangible assets                              |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   | 43.0    |  
|Loss on debt refinancing                                                  |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   | 6.3     |  
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   |         |  
|Income before income taxes                                                |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  | $ | 504.3   |  
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   |         |  
|Additions to property, plant and equipment                                |  | $                  | 672.8   |  |       | $ | 25.8  |                         |  | $ | 1.7                         |  |  | $     | 1.5    |   |  | $ | 701.8   |  
|Additions to intangible assets                                            |  |                    | 77.2    |  |       |   | 10.9  |                         |  |   |                            |  |  |       | 0.5    |   |  |   | 88.6    |  
|                                                                          |  |                    |         |  |       |   |       |                         |  |   |                             |  |  |       |        |   |  |   |         |  



|1 | The Chief Executive Officer uses adjusted operating income as the measure of profit to assess the performance of each segment. Adjusted operating
income is referred as a non-International Financial Reporting Standards (IFRS) measure and is defined as net income (loss) before depreciation and amortization, financial expenses, loss (gain) on valuation and translation of financial
instruments, restructuring of operations, impairment of assets and other special items, impairment of goodwill and intangible assets, loss on debt refinancing, income taxes and loss from discontinued operations.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.



F-13



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2014, 2013 and 2012





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



| | (a) | Basis of presentation
| | --- | ---------------------

The consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards
Board.

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial
instruments (note 1(k)), the liability related to stock-based compensation (note 1(u)) and the net defined benefit liability (note 1(v)), and are presented in Canadian dollars (CAN dollars), which is the currency of the primary
economic environment in which the Corporation and its subsidiaries operate (functional currency).

Comparative
figures for the years ended December 31, 2013 and 2012 have been restated to conform to the presentation adopted for the year ended December 31, 2014.



| | (b) | Changes in accounting policies
| | --- | ------------------------------

On January 1, 2014, the Corporation adopted retrospectively IFRIC 21  Levies, which clarifies the timing of accounting for a liability in relation with outflow of resources that is
imposed by governments in accordance with legislation, based on the activity that triggers the payment. The adoption of this interpretation did not have a material impact on the consolidated financial statements.



| | (c) | Consolidation
| | --- | -------------

The
consolidated financial statements include the accounts of the Corporation and its subsidiaries. Intercompany transactions and balances are eliminated on consolidation.

A subsidiary is an entity controlled by the Corporation. Control is achieved when the Corporation is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity.

Non-controlling interests in the net assets and results of
consolidated subsidiaries are identified separately from the parents ownership interest in them. Non-controlling interests in the equity of a subsidiary consist of the amount of non-controlling interests
calculated at the date of the original business combination and their share of changes in equity since that date. Changes in non-controlling interests in a subsidiary that do not result in a loss of control by the Corporation are accounted for
as equity transactions.



| | (d) | Business combinations
| | --- | ---------------------

A
business combination is accounted for by the acquisition method. The cost of an acquisition is measured at the fair value of the consideration given in exchange for control of the business acquired at the acquisition date. This consideration can be
comprised of cash, assets transferred, financial instruments issued, or future contingent payments. The identifiable assets and liabilities of the business acquired are recognized at their fair value at the acquisition date. Results of operations of
a business acquired are included in the Corporations consolidated financial statements from the date of the business acquisition. Business acquisition and integration costs are expensed as incurred.

Non-controlling interests in an entity acquired are presented in the consolidated balance sheet within equity, separately from the equity
attributable to shareholders and are initially measured at fair value.



F-14



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (e) | Foreign currency translation
| | --- | ----------------------------

Financial statements of the foreign operations disposed in 2014 (note 8) were translated using the rate in effect at the balance sheet date for assets and liabilities, and using the average exchange rates
during the period for revenues and expenses. Adjustments arising from foreign currency translation since January 1, 2010 were recorded in other comprehensive income.

Foreign currency transactions are translated to the functional currency by applying the exchange rate prevailing at the date of the transactions. Translation gains and losses on assets and liabilities
denominated in a foreign currency are included in financial expenses, or in gain or loss on valuation and translation of financial instruments, unless hedge accounting is used.



| | (f) | Revenue recognition
| | --- | -------------------

The
Corporation recognizes operating revenues when the following criteria are met:



| |  |  | the amount of revenue can be measured reliably;
| | - |  | -----------------------------------------------



| |  |  | the receipt of economic benefits associated with the transaction is probable;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the costs incurred or to be incurred in respect of the transaction can be measured reliably;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | the stage of completion can be measured reliably where services have been rendered; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | significant risks and rewards of ownership, including effective control, have been transferred to the buyer where goods have been sold.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------

The portion of revenue that is unearned is recorded under Deferred revenue when customers are
invoiced.

Revenue recognition policies for each of the Corporations main activities are as follows:

Telecommunications

The Telecommunications segment provides services under arrangements with multiple deliverables, for which there are two separate accounting units: one for subscriber services (cable television, Internet,
cable telephony or mobile telephony, including connection costs and rental of equipment); the other for equipment sales to subscribers. Components of multiple deliverable arrangements are separately accounted for, provided the delivered elements
have stand-alone value to the customer and the fair value of any undelivered elements can be objectively and reliably determined. Arrangement consideration is allocated among the separate accounting units
based on their relative fair values.

Cable connection revenues are deferred and recognized as revenues over the estimated
average period that subscribers are expected to remain connected to the network. The incremental and direct costs related to cable connection costs, in an amount not exceeding the revenue, are deferred and recognized as an operating expense over the
same period. The excess of those costs over the related revenues is recognized immediately in income. Operating revenues from cable and other services, such as Internet access, cable and mobile telephony, are recognized when services are rendered.
Promotional offers and rebates are accounted for as a reduction in the service revenue to which they relate. Revenues from equipment sales to subscribers and their costs are recognized in income when the equipment is delivered. Promotional offers
related to equipment, with the exclusion of mobile devices, are accounted for as a reduction of related equipment sales on delivery, while promotional offers related to the sale of mobile devices are accounted for as a reduction of related equipment
sales on activation. Operating revenues related to service contracts are recognized in income over the life of the specific contracts on a straight-line basis over the period in which the services are
provided.

Revenues from the retail activities are recognized at the time of delivery, net of provisions for estimated returns
based on historical rate of returns.



F-15



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (f) | Revenue recognition (continued)
| | --- | -------------------------------



Media

Advertising revenues derived from the sale of advertising airtime are recognized when the advertisement has been broadcast on television. Advertising revenues derived from the newspapers and magazines
publishing activities are recognized when the publication is delivered. Website advertising is recognized when advertisements are placed on websites.

Revenues derived from subscriptions to specialty television channels are recognized on a monthly basis at the time service is rendered.

Revenues from the sale or distribution of newspapers, magazines and books are recognized upon delivery, net of provisions for estimated
returns based on historical rate of returns.

Revenues derived from subscription to online publications are recognized over the
period of the subscription.

Sports and Entertainment

Revenues derived from entertainment products distribution are recognized on delivery of the products, net of provisions for estimated
returns based on historical rate of returns.

Revenues derived from show production and sporting and cultural event management
are recognized once the event or production occurs or when services are rendered.



| | (g) | Impairment of assets
| | --- | --------------------

For
the purposes of assessing impairment, assets are grouped in cash-generating units (CGUs), which represent the lowest levels for which there are separately identifiable cash inflows generated by those assets. The Corporation reviews at
each balance sheet date whether events or circumstances have occurred to indicate that the carrying amounts of its long-lived assets with finite useful lives may be less than their recoverable amounts.
Goodwill, other intangible assets having an indefinite useful life, and intangible assets not yet available for use are tested for impairment each financial year, as well as whenever there is an indication that the carrying amount of the asset, or
the CGU to which an asset has been allocated, exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and the value in use of the asset or the CGU. Fair value less costs to sell represents the amount
an entity could obtain at the valuation date from the assets disposal in an arms length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The value in use represents the present value of the
future cash flows expected to be derived from the asset or the CGU.

An impairment loss is recognized in the amount by which
the carrying amount of an asset or a CGU exceeds its recoverable amount. When the recoverable amount of a CGU to which goodwill has been allocated is lower than the CGUs carrying amount, the related goodwill is first impaired. Any excess
amount of impairment is recognized and attributed to assets in the CGU, prorated to the carrying amount of each asset in the CGU.

An impairment loss recognized in prior periods for long-lived assets with finite useful lives and intangible assets having an indefinite useful life, other than goodwill, can be reversed through the
consolidated statement of income to the extent that the resulting carrying value does not exceed the carrying value that would have been the result if no impairment losses had been previously recognized.



F-16



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (h) | Barter transactions
| | --- | -------------------

In
the normal course of operations, the Media segment principally offer advertising in exchange for goods and services. Revenues thus earned and expenses incurred are accounted for on the basis of the fair value of the goods and services provided.

For the year ended December 31, 2014, the Corporation recorded $14.5 million of barter advertising revenues
($15.2 million in 2013 and $16.9 million in 2012).



| | (i) | Income taxes
| | --- | ------------

Current
income taxes are recognized with respect to amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheet date.

Deferred income taxes are accounted for using the liability method. Under this method, deferred income tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the consolidated financial statements and their respective tax bases. Deferred income tax assets and
liabilities are measured using enacted or substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and
liabilities is recognized in income in the period that includes the substantive enactment date. A deferred tax asset is recognized initially when it is probable that future taxable income will be sufficient to use the related tax benefits and may be
subsequently reduced, if necessary, to an amount that is more likely than not to be realized. A deferred tax expense or benefit is recognized in other comprehensive income or otherwise directly in equity to the extent that it relates to items that
are recognized in other comprehensive income or directly in equity in the same or a different period.

In the course of the
Corporations operations, there are a number of uncertain tax positions due to the complexity of certain transactions and due to the fact that related tax interpretations and legislation are continually changing. When a tax position is
uncertain, the Corporation recognizes an income tax benefit or reduces an income tax liability only when it is probable that the tax benefit will be realized in the future or that the income tax liability is no longer probable.



| | (j) | Leases
| | --- | ------

Assets under
leasing agreements are classified at the inception of the lease as (i) finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee, or as (ii) operating leases for
all other leases.

Operating lease rentals are recognized in the consolidated statement of income on a straight-line basis over the period of the lease. Any lessee incentives are deferred and then recognized evenly over the lease term.



F-17



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (k) | Financial instruments
| | --- | ---------------------

Classification, recognition and measurement

Financial instruments are classified as held-for-trading, available-for-sale, held-to-maturity, loans and receivables, or as other financial liabilities, and measurement in subsequent periods depends on
their classification. The Corporation has classified its financial instruments (except derivative financial instruments) as follows:



Held-for-trading

Loans and receivables

Available-for-sale

Other liabilities    Cash and cash equivalents
    Bank indebtedness

    Accounts receivable
    Amounts receivable from parent corporation
    Loans and other long-term receivables included in Other
assets

    Other portfolio investments included in Other assets

    Accounts payable and accrued charges
    Provisions
    Long-term debt
    Other long-term financial liabilities included in Other
liabilities


Financial instruments held-for-trading are measured at fair value with changes recognized in income
as a gain or loss on valuation and translation of financial instruments. Available-for-sale portfolio investments are measured at fair value or at cost in the case of equity investments that do not have a quoted market price in an active market and
where fair value is insufficiently reliable, and changes in fair value are recorded in other comprehensive income. Financial assets classified as loans and receivables and financial liabilities classified as other liabilities are initially measured
at fair value and subsequently measured at amortized cost, using the effective interest rate method of amortization. Liabilities recognized as a result of contingent consideration arising from a business acquisition and included in other
liabilities, are initially recorded at their acquisition-date fair value and re-measured at fair value in subsequent periods. These changes in fair value are recorded in income as other special items.

Derivative financial instruments and hedge accounting

The Corporation uses various derivative financial instruments to manage its exposure to fluctuations in foreign currency exchange rates
and interest rates. The Corporation does not hold or use any derivative financial instruments for speculative purposes. Under hedge accounting, the Corporation documents all hedging relationships between hedging items and hedged items, as well as
its strategy for using hedges and its risk management objective. It also designates its derivative financial instruments as either fair value hedges or cash flow hedges when they qualify for hedge accounting. The Corporation assesses the
effectiveness of derivative financial instruments when the hedge is put in place and on an ongoing basis.



F-18



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (k) | Financial instruments (continued)
| | --- | ---------------------------------



Derivative financial instruments and hedge accounting (continued)



The Corporation generally enters into the following types of derivative financial
instruments:



| |  |  | The Corporation uses foreign exchange forward contracts to hedge foreign currency rate exposure on anticipated equipment or inventory purchases in a
foreign currency. The Corporation also uses offsetting foreign exchange forward contracts in combination with cross-currency interest rate swaps to hedge foreign currency rate exposure on interest and principal payments on foreign currency
denominated debt. These foreign exchange forward contracts are designated as cash flow hedges.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Corporation uses cross-currency interest rate swaps to hedge (i) foreign currency rate exposure on interest and principal payments on foreign
currency denominated debt and/or (ii) fair value exposure on certain debt resulting from changes in interest rates. The cross-currency interest rate swaps that set all future interest and principal payments on U.S.-dollar-denominated debt in
fixed CAN dollars, in addition to converting an interest rate from a floating rate to a floating rate or from a fixed rate to a fixed rate, are designated as cash flow hedges. The cross-currency interest rate swaps are designated as fair value
hedges when they set all future interest and principal payments on U.S.-dollar-denominated debt in fixed CAN dollars, in addition to converting the interest rate from a fixed rate to a floating rate.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Corporation uses interest rate swaps to manage fair value exposure on certain debt resulting from changes in interest rates. These swap agreements
require a periodic exchange of payments without the exchange of the notional principal amount on which the payments are based. These interest rate swaps are designated as fair value hedges when they convert the interest rate from a fixed rate to a
floating rate, or as cash flow hedges when they convert the interest rate from a floating rate to a fixed rate.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under hedge accounting, the Corporation applies the following accounting policies:



| |  |  | For derivative financial instruments designated as fair value hedges, changes in the fair value of the hedging derivative recorded in income are
substantially offset by changes in the fair value of the hedged item to the extent that the hedging relationship is effective. When a fair value hedge is discontinued, the carrying value of the hedged item is no longer adjusted and the cumulative
fair value adjustments to the carrying value of the hedged item are amortized to income over the remaining term of the original hedging relationship.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | For derivative financial instruments designated as cash flow hedges, the effective portion of a hedge is reported in other comprehensive income until
it is recognized in income during the same period in which the hedged item affects income, while the ineffective portion is immediately recognized in income. When a cash flow hedge is discontinued, the amounts previously recognized in accumulated
other comprehensive income are reclassified to income when the variability in the cash flows of the hedged item affects income.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any change in the fair value of these derivative financial instruments recorded in income is included in gain or loss on valuation and translation of financial instruments. Interest expense on hedged long-term debt is reported at the hedged interest and foreign currency rates.

Derivative
financial instruments that do not qualify for hedge accounting, including derivatives that are embedded in financial or non-financial contracts that are not closely related to the host contracts, such as early
settlement options on long term-debt, are reported on a fair value basis in the consolidated balance sheets. Any change in the fair value of these derivative financial instruments is recorded in income as a gain or loss on valuation and translation
of financial instruments.

Early settlement options are accounted for separately from the debt when the corresponding option
exercise price is not approximately equal to the amortized cost of the debt.



F-19



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (l) | Financing fees
| | --- | --------------

Financing
fees related to long-term debt are capitalized in reduction of long-term debt and amortized using the effective interest rate method.



| | (m) | Tax credits and government assistance
| | --- | -------------------------------------

The Corporation has access to several government programs designed to support production and distribution of televisual products and movies, as well as music products, magazine and book publishing in
Canada. In addition, the Corporation receives tax credits mainly related to its research and development activities, publishing activities and digital activities. Government financial assistance is accounted for as revenue or as a reduction in
related costs, whether capitalized and amortized or expensed, in the year the costs are incurred and when management has reasonable assurance that the conditions of the government programs are met.



| | (n) | Cash and cash equivalents
| | --- | -------------------------

Cash and cash equivalents include highly liquid investments purchased three months or less from maturity and are recorded at fair value.
These highly liquid investments consisted mainly of Bankers acceptances and term deposits.



| | (o) | Trade receivables
| | --- | -----------------

Trade
receivables are stated at their nominal value, less an allowance for doubtful accounts and an allowance for sales returns. The Corporation establishes an allowance for doubtful accounts based on the specific credit risk of its customers and
historical trends. Individual accounts receivables are written off when management deems them not collectible.



| | (p) | Inventories
| | --- | -----------

Inventories
are valued at the lower of cost, determined by the first-in, first-out method or the weighted-average cost method, and net realizable value. Net realizable value represents the estimated selling price in the
ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. When the circumstances that previously caused inventories to be written down below cost no longer exist, the amount of the write-down is reversed.

In particular, inventories related to broadcasting activities, which
primarily are comprised of programs and broadcast and distribution rights, are accounted for as follows:



| | (i) | Programs produced and productions in progress
| | --- | ---------------------------------------------

Programs produced and productions in progress related to broadcasting activities are accounted for at the lesser of cost and net realizable value. Cost includes direct charges for goods and services and
the share of labour and general expenses related to each production. The cost of each program is charged to operating expenses when the program is broadcast.



| | (ii) | Broadcast rights
| | ---- | ----------------

Broadcast
rights are essentially contractual rights allowing the limited or unlimited broadcast of televisual products or movies. The Corporation records the broadcast rights acquired as inventory and the obligations incurred under a license agreement as a
liability when the broadcast period begins and all of the following conditions have been met: (a) the cost of each program, movies, series or right to broadcast a live event is known or can be reasonably determined; (b) the programs,
movies or series have been accepted or the live event is broadcast in accordance with the conditions of the broadcast license agreement; (c) the programs, movies or series are available for first showing or telecast or the live event is
broadcasted.

Amounts paid for broadcast rights before all of the above conditions are met are recorded as prepaid broadcast
rights.



F-20



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (p) | Inventories (continued)
| | --- | -----------------------



| | (ii) | Broadcast rights (continued)
| | ---- | ----------------------------



Broadcast rights are classified as current or long-term, based on managements
estimate of the broadcast period. These rights are charged to operating expenses when televisual products and movies are broadcast over the contract period, using a method based on the manner future economic benefits from these rights will be
generated. Broadcast rights payable are classified as current or long-term liabilities based on the payment terms included in the license.



| | (iii) | Distribution rights
| | ----- | -------------------

Distribution rights include costs to acquire distribution rights for televisual products and movies and other operating costs incurred
that generate future economic benefits. The Corporation records an inventory and a liability for the distribution rights and obligations incurred under a license agreement when (a) the cost of the license is known or can be reasonably
estimated, (b) the televisual product and movie has been accepted in accordance with the conditions of the license agreement, and (c) the televisual product or movie is available for distribution.

Amounts paid for distribution rights before all of the above conditions are met are recorded as prepaid distribution rights. Distribution
rights are charged to operating expenses using the individual film forecast computation method based on actual revenues realized over total future economic benefits expected.

Estimates of future revenues used to determine net realizable values of inventories related to the broadcasting or distribution of television products and movies, are examined periodically by management
and revised as necessary. The carrying value of programs produced and productions in progress, broadcast rights and distribution rights is reduced to net realizable value, as necessary, based on this assessment.



| | (q) | Long-term investments
| | --- | ---------------------

Investments in companies subject to significant influence are accounted for using the equity method. Under the equity method, the share of
the results of operations of the associated corporation is recorded in the consolidated statement of income. Carrying values of investments are reduced to estimated fair values if there is objective evidence that the investment is impaired.



| | (r) | Property, plant and equipment
| | --- | -----------------------------

Property, plant and equipment are stated at cost. Cost represents the acquisition costs, net of government grants and investment tax credits, or construction costs, including preparation, installation and
testing costs. In the case of projects to construct cable and mobile networks, the cost includes equipment, direct labour and related overhead costs. Projects under development may also be comprised of advance payments made to suppliers for
equipment under construction.

Borrowing costs are also included in the cost of property, plant and equipment when the
development of the asset commenced after January 1, 2010. Expenditures, such as maintenance and repairs, are expensed as incurred.

Depreciation is calculated on a straight-line basis over the following estimated useful lives:



|                                     |  |                       |                | 
|------------------------------------ |  | --------------------- | -------------- | 
|Assets                               |  | Estimated useful life |               
|                                     | 
|Buildings and leasehold improvements |  |                       | 10 to 40 years | 
|Machinery and equipment              |  |                       | 3 to 20 years  | 
|Telecommunication networks           |  |                       | 3 to 20 years  | 



F-21



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (r) | Property, plant and equipment (continued)
| | --- | -----------------------------------------



Depreciation methods, residual values, and the useful lives of significant property,
plant and equipment are reviewed at each financial year-end. Any change is accounted for prospectively as a change in accounting estimate.

Leasehold improvements are depreciated over the shorter of the term of the lease and economic life.

The Corporation does not record any decommissioning obligations in connection with its cable distribution networks. The Corporation expects to renew all of its agreements with utility companies to access
their support structures in the future, making the retirement date so far into the future that the present value of the restoration costs is insignificant for these assets. A decommissioning obligation is however recorded for the rental of sites
related to the advanced mobile network.

Videotron Ltd. (Videotron) is engaged in an agreement to operate a shared
Long Term Evolution mobile network in the Province of Québec and in the Ottawa region.



| | (s) | Goodwill and intangible assets
| | --- | ------------------------------

Goodwill

For all business acquisitions entered into since January 1,
2010, goodwill initially arising from a business acquisition is measured and recognized as the excess of the fair value of the consideration paid over the fair value of the recognized identifiable assets acquired and liabilities assumed. When the
Corporation acquires less than 100% of the equity interests in the business acquired at the acquisition date, goodwill attributable to the non-controlling interests is also recognized at fair value.

For business acquisitions that occurred prior to January 1, 2010, goodwill represented the excess of the cost of
acquisition over the Corporations interest in the fair value of the identifiable assets and liabilities of the business acquired at the date of acquisition. No goodwill attributable to non-controlling interests was recognized for these
business acquisitions.

Goodwill is allocated as at the date of a business acquisition to a CGU for purposes of impairment
testing (note 1(g)). The allocation is made to the CGU or group of CGUs expected to benefit from the synergies of the business acquisition.

Intangible assets

Broadcasting licenses and mastheads have indefinite
useful lives and are not amortized. In particular, given the low cost of renewal of broadcasting licenses, management believes it is economically compelling to renew the licenses and to comply with all rules and conditions attached to those
licenses.

Internally generated intangible assets are mainly comprised of internal costs in connection with the development of
software to be used internally or for providing services to customers. These costs are capitalized when the development stage of the software application begins and costs incurred prior to that stage are recognized as expenses.

Borrowing costs directly attributable to the acquisition, development or production of an intangible asset that commenced after
January 1, 2010 are also included as part of the cost of that asset during the development phase.



F-22



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (s) | Goodwill and intangible assets (continued)
| | --- | ------------------------------------------



Intangible assets (continued)



Intangible assets with finite useful lives are amortized over their useful lives using
the straight-line method over the following periods:



|                                 |  |                       |               | 
|-------------------------------- |  | --------------------- | ------------- | 
|Assets                           |  | Estimated useful life |              
|                                 | 
|Spectrum licenses                |  |                       | 10 years      | 
|Software                         |  |                       | 3 to 7 years  | 
|Customer relationships and other |  |                       | 3 to 10 years | 

Amortization methods, residual values, and the useful lives of significant intangible assets are reviewed
at each financial year-end. Any change is accounted for prospectively as a change in accounting estimate.



| | (t) | Provisions
| | --- | ----------

Provisions
are recognized when (i) the Corporation has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation, and when (ii) the amount
of the obligation can be reliably estimated. Restructuring costs, comprised primarily of termination benefits, are recognized when a detailed plan for the restructuring exists and a valid expectation has been raised in those affected, that the plan
will be carried out.

Provisions are reviewed at each balance sheet date and changes in estimates are reflected in the
consolidated statement of income in the reporting period in which changes occur.



| | (u) | Stock-based compensation
| | --- | ------------------------

Stock-based awards to employees that call for settlement in cash or other assets at the option of the employee are accounted for at fair
value and classified as a liability. The compensation cost is recognized in expenses over the vesting period. Changes in the fair value of stock-based awards between the grant date and the measurement date result in a change in the liability and
compensation cost.

Estimates of the fair value of stock option awards are determined by applying an option pricing model,
taking into account the terms and conditions of the grant. Key assumptions are described in note 23.



F-23



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (v) | Pension plans and postretirement benefits
| | --- | -----------------------------------------

The Corporation offers defined contribution pension plans and defined benefit pension plans to some of its employees.



| | (i) | Defined contribution pension plans
| | --- | ----------------------------------

Under its defined contribution pension plans, the Corporation pays fixed contributions to participating employees pension plans and has no legal or constructive obligation to pay any further
amounts. Obligations for contributions to defined contribution pension plans are recognized as employee benefits in the consolidated statements of income when the contributions become due.



| | (ii) | Defined benefit pension plans and postretirement plans
| | ---- | ------------------------------------------------------

Defined benefit pension plan costs are determined using actuarial methods and are accounted for using the projected unit credit method, which incorporates managements best estimates of future salary
levels, other cost escalations, retirement ages of employees, and other actuarial factors. Defined benefit pension costs, recognized in the consolidated statements of income as employee costs, mainly include the following:



| |  |  | service costs provided in exchange for employee services rendered during the period;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | prior service costs recognized at the earlier of (a) when the employee benefit plan is amended or (b) when restructuring costs are
recognized;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | curtailment or settlement gain or loss.
| | - |  | ---------------------------------------

Interest on net defined benefit liability or asset, recognized in the consolidated statements of income as financial expenses, is determined by multiplying the net defined benefit liability or asset by
the discount rate used to determine the defined benefit obligation.

Re-measurements of the net defined benefit liability or
asset are recognized immediately in other comprehensive income and in accumulated other comprehensive income. Re-measurements are comprised of the following:



| |  |  | actuarial gains and losses arising from changes in financial and demographic actuarial assumptions used to determine the defined benefit obligation or
from experience adjustments on liabilities;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the difference between actual return on plan assets and interest income on plan assets anticipated as part of the interest on net defined benefit
liability or asset calculation;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in the net benefit asset limit or in the minimum funding liability.
| | - |  | ---------------------------------------------------------------------------

Recognition of a net benefit asset is limited under certain circumstances to the amount recoverable, which is primarily based on the
present value of future contributions to the plan, to the extent to which the Corporation can unilaterally reduce those future contributions. In addition, an adjustment to the net benefit asset or the net benefit liability can be recorded to reflect
a minimum funding liability in a certain number of the Corporations pension plans.

The Corporation also offers rebate
on telecommunication services, health, life and dental insurance plans to some of its retired employees. The cost of postretirement benefits is determined using an accounting methodology similar to that for defined benefit pension plans. The
benefits related to these plans are funded by the Corporation as they become due.



F-24



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (w) | Use of estimates and judgments
| | --- | ------------------------------

The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities,
related amounts of revenues and expenses, and disclosure of contingent assets and liabilities. Although these estimates are based on managements best judgment and information available at the time of the assessment date, actual results could
differ from these estimates.

The following significant areas represent managements most difficult, subjective or complex
estimates:



| | (i) | Recoverable amount of an asset or a CGU
| | --- | ---------------------------------------

When an impairment test is performed on an asset or a CGU, management estimates the recoverable amount of the asset or CGU based on its fair value less costs to sell or its value in use. These estimates
are based on valuation models requiring the use of a number of assumptions such as pre-tax discount rate (WACC) and perpetual growth rate. These assumptions have a significant impact on the results of impairment tests and on the impairment charge,
as the case may be, recorded in the consolidated statement of income. A description of key assumptions used in the goodwill impairment tests and a sensitivity analysis of recoverable amounts are presented in note 16.



| | (ii) | Fair value of derivative financial instruments, including embedded derivatives
| | ---- | ------------------------------------------------------------------------------

Derivative financial instrument must be accounted for at their fair value, which is estimated using valuation models based on a number of assumptions such as future cash flows, period-end swap rates,
foreign exchange rates, and credit default premium. Also, the fair value of embedded derivatives related to early settlement options on debt is determined with option pricing models using market inputs, including volatility, discount factors and
underlying instruments adjusted implicit interest rate and credit premium. The assumptions used in the valuation models have a significant impact on the gain or loss on valuation and translation of financial instruments recorded in the consolidated
statement of income, the gain or loss on valuation of financial instruments recorded in the consolidated statement of comprehensive income, and the carrying value of derivative financial instruments in the consolidated balance sheet. A description
of valuation models used and sensitivity analysis on key assumptions are presented in note 27.



| | (iii) | Costs and obligations related to pension and postretirement benefit plans
| | ----- | -------------------------------------------------------------------------

Estimates of costs and obligations related to pension and postretirement benefit obligations are based on a number of assumptions, such as the discount rate, the rate of increase in compensation, the
retirement age of employees, health care costs, and other actuarial factors. Certain of these assumptions may have a significant impact on employee costs and financial expenses recorded in the consolidated statement of income, the re-measurement
gain or loss on defined benefit plans recorded in the consolidated statement of comprehensive income, and on the carrying value of other assets or other liabilities in the consolidated balance sheet. Key assumptions and sensitivity analysis on the
discount rate are presented in note 29.



| | (iv) | Provisions
| | ---- | ----------

The recognition of
provisions requires management to estimate expenditures required to settle a present obligation or to transfer it to third parties at the date of assessment. An assessment of the probable outcomes of legal proceedings or other contingency is also
required. A description of the main provisions, including management expectations on the potential effect on the consolidated financial statements of the possible outcomes of legal disputes, is presented in note 19.



F-25



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|-- | ------------------------------------------------------



| | (w) | Use of estimates and judgments (continued)
| | --- | ------------------------------------------



The following areas represent managements most significant judgments, apart from
those involving estimates:



| | (i) | Determination of useful life periods for the depreciation and amortization of assets with finite useful lives
| | --- | -------------------------------------------------------------------------------------------------------------

For each class of assets with finite useful lives, management has to determine over which period the Corporation will consume the
assets future economic benefits. The determination of a useful life period involves judgment and has an impact on the depreciation and amortization charge recorded in the consolidated statements of income.



| | (ii) | Determination of CGUs for the purpose of impairment test
| | ---- | --------------------------------------------------------

The determination of CGUs requires judgment when determining the lowest level for which there are separately identifiable cash inflows generated by the group of assets. In identifying assets to group in
CGUs, the Corporation considers, among other factors, offering bundled services, sharing telecommunication or broadcasting networks infrastructure, integration of media assets, geographical proximity, similarity on exposure to market risk, and
materiality. The determination of CGUs could affect the results of impairment tests and, as the case may be, the impairment charge recorded in the consolidated statement of income.



| | (iii) | Determination if early settlement options are not closely related to their debt contract
| | ----- | ----------------------------------------------------------------------------------------

Early settlement options are not considered closely related to their debt contract when the corresponding option exercise price is not
approximately equal to the amortized cost of the debt. Judgment is required to determine if an option exercise price is not approximately equal to the amortized cost of the debt. This determination may have a significant impact on the amount of
gains or losses on valuation and translation of financial instruments recorded in the consolidated statement of income.



| | (iv) | Interpretation of laws and regulations
| | ---- | --------------------------------------

Interpretation of laws and regulation, including tax regulations, requires judgment from management that could have an impact on the recognition of provisions for legal litigation and income taxes in the
consolidated financial statements.



| | (x) | Recent accounting pronouncements
| | --- | --------------------------------

The Corporation has not yet completed its assessment of the impact of the adoption of these pronouncements on its consolidated financial statements.



| | (i) | IFRS 9 Financial Instrumentsis required to be applied retrospectively for annual periods beginning on or after January 1, 2018, with early adoption
permitted.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS 9 simplifies the measurement and classification of financial assets by reducing the number of
measurement categories in IAS 39, Financial Instruments: Recognition and Measurement. The new standard also provides for a fair value option in the designation of a non-derivative financial liability and
its related classification and measurement, as well as for a new hedge accounting model more closely aligned with risk management activities undertaken by entities.



| | (ii) | IFRS 15 Revenue from Contracts with Customersis required to be applied retrospectively for annual periods beginning on or after January 1, 2017,
with early adoption permitted.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS 15 specifies how and when an entity will recognize revenue as well as
requiring such entities to provide users of financial statements with more informative disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers.



F-26



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|2. | REVENUES
|-- | --------

The breakdown
of revenues between services rendered and product sales is as follows:



|                  |  |      |         |  |      |   |         |      |  |   |         | 
|----------------- |  | ---- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                  |  | 2014 |         |  | 2013 |   |         | 2012 | 
|                  |  |      |        
|Services rendered |  | $    | 3,252.1 |  |      | $ | 3,168.8 |      |  | $ | 3,049.8 | 
|Product sales     |  |      | 464.0   |  |      |   | 478.7   |      |  |   | 503.5   | 
|                  |  |      |         |  |      |   |         |      |  |   |         | 
|                  |  | $    | 3,716.1 |  |      | $ | 3,647.5 |      |  | $ | 3,553.3 | 
|                  |  |      |         |  |      |   |         |      |  |   |         | 



|3. | EMPLOYEE COSTS AND PURCHASE OF GOODS AND SERVICES
|-- | -------------------------------------------------

The main components are as follows:



|                                                                                        |  |      |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                        |  | 2014 |         |   | 2013 |   |         | 2012 | 
|                                                                                        |  |      |        
|Employee costs                                                                          |  | $    | 838.9   |   |      | $ | 838.2   |      |  | $ | 840.5   |  
|Less: Employee costs capitalized to property, plant and equipment and intangible assets |  |      | (156.7  | ) |      |   | (145.4  | )    |  |   | (144.2  | )
|                                                                                        |  |      |         |   |      |   |         |      |  |   |         |  
|                                                                                        |  |      | 682.2   |   |      |   | 692.8   |      |  |   | 696.3   |  
|Purchase of goods and services                                                          |  |      |         |   |      |   |         |      |  |   |         |  
|Royalties, rights and creation costs                                                    |  |      | 666.5   |   |      |   | 649.1   |      |  |   | 647.9   |  
|Cost of retail products                                                                 |  |      | 323.9   |   |      |   | 289.5   |      |  |   | 286.4   |  
|Marketing, circulation and distribution expenses                                        |  |      | 82.2    |   |      |   | 82.5    |      |  |   | 97.6    |  
|Service and printing contracts                                                          |  |      | 151.4   |   |      |   | 163.1   |      |  |   | 171.0   |  
|Paper, ink and printing supplies                                                        |  |      | 46.9    |   |      |   | 49.1    |      |  |   | 54.3    |  
|Other                                                                                   |  |      | 368.7   |   |      |   | 344.2   |      |  |   | 306.9   |  
|                                                                                        |  |      |         |   |      |   |         |      |  |   |         |  
|                                                                                        |  |      | 1,639.6 |   |      |   | 1,577.5 |      |  |   | 1,564.1 |  
|                                                                                        |  |      |         |   |      |   |         |      |  |   |         |  
|                                                                                        |  | $    | 2,321.8 |   |      | $ | 2,270.3 |      |  | $ | 2,260.4 |  
|                                                                                        |  |      |         |   |      |   |         |      |  |   |         |  



|4. | FINANCIAL EXPENSES
|-- | ------------------



|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|----------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                  |  | 2014 |       |   | 2013 |   |       | 2012 | 
|                                                                  |  |      |      
|Interest on long-term debt                                        |  | $    | 313.5 |   |      | $ | 340.5 |      |  | $ | 311.7 |  
|Amortization of financing costs and long-term debt discount       |  |      | 8.6   |   |      |   | 11.9  |      |  |   | 14.3  |  
|Interest on net defined benefit liability                         |  |      | 4.6   |   |      |   | 10.8  |      |  |   | 10.7  |  
|Loss on foreign currency translation on short-term monetary items |  |      | 4.0   |   |      |   | 2.7   |      |  |   | 3.2   |  
|Other                                                             |  |      | (6.5  | ) |      |   | (5.1  | )    |  |   | (4.4  | )
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|                                                                  |  | $    | 324.2 |   |      | $ | 360.8 |      |  | $ | 335.5 |  
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  



F-27



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|5. | LOSS (GAIN) ON VALUATION AND TRANSLATION OF FINANCIAL INSTRUMENTS
|-- | -----------------------------------------------------------------



|                                                                                                                                          |  |      |      |   |      |   |       |      |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                                                                                                                          |  | 2014 |      |   | 2013 |   |       | 2012 | 
|                                                                                                                                          |  |      |     
|Loss (gain) on embedded derivatives related to long term debt and derivative financial instruments for which hedge accounting is
not used |  | $    | 7.9  |   |      | $ | 173.2 |      |  | $ | (197.5 | )
|(Gain) loss on reversal of embedded derivatives upon debt redemption                                                                      |  |      | (1.1 | ) |      |   | 72.9  |      |  |   | 61.4   |  
|Gain on the ineffective portion of cash flow hedges                                                                                       |  |      | (0.5 | ) |      |   | (1.7  | )    |  |   | (1.1   | )
|(Gain) loss on the ineffective portion of fair value hedges                                                                               |  |      | (3.2 | ) |      |   |      |      |  |   | 0.3    |  
|                                                                                                                                          |  |      |      |   |      |   |       |      |  |   |        |  
|                                                                                                                                          |  | $    | 3.1  |   |      | $ | 244.4 |      |  | $ | (136.9 | )
|                                                                                                                                          |  |      |      |   |      |   |       |      |  |   |        |  



|6. | RESTRUCTURING OF OPERATIONS, IMPAIRMENT OF ASSETS AND OTHER SPECIAL ITEMS
|-- | -------------------------------------------------------------------------



|                                   |  |      |      |  |      |   |      |      |  |   |       |  
|---------------------------------- |  | ---- | ---- |  | ---- | - | ---- | ---- |  | - | ----- | -
|                                   |  | 2014 |      |  | 2013 |   |      | 2012 | 
|                                   |  |      |     
|Restructuring of operations        |  | $    | 10.5 |  |      | $ | 8.7  |      |  | $ | 1.5   |  
|Loss related to a legal litigation |  |      | 34.3 |  |      |   |     |      |  |   |      |  
|Impairment of assets               |  |      | 6.7  |  |      |   | 2.1  |      |  |   |      |  
|Loss (gain) on disposal of assets  |  |      | 0.1  |  |      |   | 0.8  |      |  |   | (12.8 | )
|Other                              |  |      | 2.8  |  |      |   |     |      |  |   |      |  
|                                   |  |      |      |  |      |   |      |      |  |   |       |  
|                                   |  | $    | 54.4 |  |      | $ | 11.6 |      |  | $ | (11.3 | )
|                                   |  |      |      |  |      |   |      |      |  |   |       |  

Telecommunications

In 2014, the Telecommunications segment recorded a charge for restructuring costs of $3.3 million ($1.8 million in 2013 and $1.0 million in 2012) and a charge for impairment of assets
of $3.4 million (none in 2013 and 2012).

Also in 2014, the Telecommunications segment recorded a charge of $34.3 million,
including interest, as a result of an unfavorable judgment against Videotron in a legal action. Videotron intends to appeal this judgment.

Media

In recent years, the Media segment has implemented various
restructuring initiatives to reduce operating costs. As a result of these initiatives, restructuring costs of $6.5 million, mainly for the reduction of positions, were recorded in 2014 ($6.7 million in 2013 and $0.3 million
in 2012). As part of these restructuring initiatives, a loss on disposal of assets of $0.1 million was recorded in 2014 (a gain of $0.1 million in 2013 and a loss of $0.1 million in 2012), while a charge for impairment of assets of $2.1 million
was recorded in 2013.

In 2014, the Media segment also recorded a charge for impairment of assets of $3.3 million related to
broadcasting assets and other special charges of $2.6 million mainly related to business acquisitions (none in 2013 and 2012).

Finally in 2012, the Media segment disposed of its interests in two specialized channels, The Cave and mysteryTV, for a total cash
consideration of $21.0 million, resulting in a gain of $12.9 million.



F-28



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|6. | RESTRUCTURING OF OPERATIONS, IMPAIRMENT OF ASSETS AND OTHER SPECIAL ITEMS (continued)
|-- | -------------------------------------------------------------------------------------



Other segments

In 2014, other segments recorded a charge for restructuring costs of $0.7 million ($0.2 million in 2013 and $0.2 million in 2012) and
other special charges of $0.2 million (none in 2013 and 2012). A loss on disposal of assets of $0.9 million was recorded in 2013.



|7. | IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS
|-- | --------------------------------------------

2014

During the second quarter of 2014, the Corporation performed its
annual impairment tests on its CGUs. The Corporation concluded that the recoverable amount based on fair value less costs of disposal was less than the carrying amount of its Newspapers CGU, which revenues continued to be negatively affected by the
digital transformation and weak market conditions in the newspaper industry. Accordingly, the Media segment recorded a non-cash goodwill impairment charge of $190.0 million (without any tax consequence), of
which $160.0 million is presented as part of discontinued operations.

During the third quarter of 2014, the Corporation
completed its annual review of its three-year strategic plan. Market conditions in the television industry led the Corporation to perform an impairment test on its Broadcasting CGU. The Corporation concluded that the recoverable amount based on fair
value less costs of disposal was less than the carrying amount of the CGU. Accordingly, a non-cash impairment charge of $41.7 million on broadcasting licenses (including $20.9 million without
any tax consequence) and a non-cash goodwill impairment charge of $9.3 million (including $3.9 million without any tax consequence) were recorded in the Media segment.

2013

During the third quarter of 2013, the Corporation performed impairment tests on its Newspapers, Music and Book CGUs due to weak market
conditions in their respective industries. Accordingly, the Media segment recorded a non-cash goodwill impairment charges of $229.0 million for its Newspaper CGU (without any tax consequence), of which
$214.5 million is presented as part of discontinued operations. A non-cash impairment charge of $56.0 million on mastheads and customer relationships assets was also recorded as part of discontinued
operations. A non-cash goodwill impairment charge of $11.9 million for the Book CGU (without any tax consequence) and of $8.9 million for the Music CGU (without any tax consequence) was also recorded by
the Corporation.

2012

During the first quarter of 2012, as a result of new tariffs adopted with respect to business contributions for costs related to waste recovery services provided by Québec municipalities, the
Corporation reviewed its business plan for the magazine publishing activities and performed an impairment test on the Magazine publishing CGU included in the Media segment. Accordingly, the Corporation recorded a goodwill impairment charge of
$14.5 million (without any tax consequence).

During the third quarter of 2012, the Corporation performed impairment tests
on its Newspapers, Music and Entertainment events and Book publishing and distribution CGUs due to weak market conditions in their respective industries. Accordingly, the Media segment recorded a non-cash goodwill impairment charges of $145.0
million for its Newspaper CGU (without any tax consequence), of which $128.5 million is presented as part of discontinued operations. A non-cash impairment charge of $30.0 million on its mastheads and customer relationships assets was also
recorded as part of discontinued operations. The Corporation recorded a non-cash goodwill impairment charge of $12.0 million for the Music CGU (without any tax consequence).



F-29



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|8. | DISCONTINUED OPERATIONS
|-- | -----------------------

2014



| |  |  | In January 2014, the Corporation ceased its door-to-door distribution of flyers and weekly newspapers in the Province of Québec.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | On June 1, 2014, the Corporation sold its 74 Québec weeklies for a cash consideration of $75.0 million, of which $1.3 million is
receivable as of December 31, 2014. An amount of $4.7 million was also received in 2014 relating to adjustments of working capital items transferred.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On September 2, 2014, the Corporation sold its Nurun Inc. (Nurun) subsidiary for a cash consideration consisting of $125.0 million,
less cash disposed of $18.1 million. An amount of $8.2 million was also received relating to certain transaction adjustments.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On October 6, 2014, the Corporation announced a transaction whereby it will sell all of its
English-language newspaper operations in Canada, consisting of 175 newspapers and publications, the Canoe English portal and 8 printing plants, including the Islington, Ontario plant, for a cash
consideration of $316.0 million. The transaction price will be payable in cash, subject to the customary adjustments and a $ 10.0 million adjustment, related primarily to real estate properties disposed by the Corporation subsequent to
this transaction. The transaction is subject to authorization by the Competition Bureau. While the transaction is under review, Quebecor Media continues to operate all the businesses involved in the transaction.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2013



| |  |  | On June 1, 2013, the Corporation sold its specialized Web site Jobboomfor a cash consideration of $57.5 million, less cash disposed of
$5.4 million.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On November 29, 2013, the Corporation also sold its specialized Web site Réseau Contactfor a cash consideration of $7.5 million,
less cash disposed of $0.4 million.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-30



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|8. | DISCONTINUED OPERATIONS (continued)
|-- | -----------------------------------



The results of operations and cash flows related to these businesses were reclassified
as discontinued operations in the consolidated statements of income, comprehensive income and cash flows as follows:

Consolidated statements of income and comprehensive income



|                                                                          |  |      |       |   |      |   |        |      |  |   |        |  
|------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                          |  | 2014 |       |   | 2013 |   |        | 2012 | 
|Revenues                                                                  |  | $    | 586.1 |   |      | $ | 765.5  |      |  | $ | 848.5  |  
|Employee costs                                                            |  |      | 231.8 |   |      |   | 313.8  |      |  |   | 344.4  |  
|Purchase of goods and services                                            |  |      | 259.7 |   |      |   | 357.1  |      |  |   | 397.8  |  
|Depreciation and amortization                                             |  |      | 25.1  |   |      |   | 36.8   |      |  |   | 45.6   |  
|Financial expenses                                                        |  |      | 0.8   |   |      |   | 2.0    |      |  |   | 1.5    |  
|Restructuring of operations, impairment of assets and other special items |  |      | 8.5   |   |      |   | 20.0   |      |  |   | 40.8   |  
|Impairment of goodwill and intangible assets                              |  |      | 160.0 |   |      |   | 270.5  |      |  |   | 158.5  |  
|                                                                          |  |      |       |   |      |   |        |      |  |   |        |  
|Loss before income taxes                                                  |  |      | (99.8 | ) |      |   | (234.7 | )    |  |   | (140.1 | )
|Current income taxes                                                      |  |      | 14.2  |   |      |   | 13.2   |      |  |   | 13.7   |  
|Deferred income taxes                                                     |  |      | 1.0   |   |      |   | (16.5  | )    |  |   | (24.2  | )
|Gain on disposal of businesses                                            |  |      | 49.5  |   |      |   | 37.6   |      |  |   |       |  
|                                                                          |  |      |       |   |      |   |        |      |  |   |        |  
|Loss from discontinued operations                                         |  | $    | (65.5 | ) |      | $ | (193.8 | )    |  | $ | (129.6 | )
|                                                                          |  |      |      
|Other comprehensive (loss) income:                                        |  |      |       |   |      |   |        |      |  |   |        |  
|(Loss) gain on translation of net investments in foreign operations       |  |      | (1.7  | ) |      |   | 4.4    |      |  |   | (1.4   | )
|Defined benefits plans:                                                   |  |      |       |   |      |   |        |      |  |   |        |  
|Re-measurement (loss) gain                                                |  |      | (7.9  | ) |      |   | 31.9   |      |  |   | (0.1   | )
|Deferred income taxes                                                     |  |      | 2.0   |   |      |   | (8.0   | )    |  |   |       |  
|                                                                          |  |      |       |   |      |   |        |      |  |   |        |  
|                                                                          |  |      | (7.6  | ) |      |   | 28.3   |      |  |   | (1.5   | )
|                                                                          |  |      |       |   |      |   |        |      |  |   |        |  
|Comprehensive loss from discontinued operations                           |  | $    | (73.1 | ) |      | $ | (165.5 | )    |  | $ | (131.1 | )
|                                                                          |  |      |       |   |      |   |        |      |  |   |        |  

Consolidated statements of cash flows



|                                               |  |      |      |  |      |   |       |      |  |   |       |  
|---------------------------------------------- |  | ---- | ---- |  | ---- | - | ----- | ---- |  | - | ----- | -
|                                               |  | 2014 |      |  | 2013 |   |       | 2012 | 
|Cash flows related to operating activities     |  | $    | 72.3 |  |      | $ | 19.0  |      |  | $ | 85.6  |  
|Cash flows related to investing activities     |  |      | 2.4  |  |      |   | (13.7 | )    |  |   | (14.4 | )
|                                               |  |      |      |  |      |   |       |      |  |   |       |  
|Cash flows provided by discontinued operations |  | $    | 74.7 |  |      | $ | 5.3   |      |  | $ | 71.2  |  
|                                               |  |      |      |  |      |   |       |      |  |   |       |  



F-31



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|8. | DISCONTINUED OPERATIONS (continued)
|-- | -----------------------------------



Components of assets and liabilities classified as held for sale in the consolidated
balance sheet are as follows:



|                              |  |      |       |   |      |   |      |  
|----------------------------- |  | ---- | ----- | - | ---- | - | ---- | -
|                              |  | 2014 |       |   | 2013 |  
|                              |  |     
|Current assets                |  | $    | 70.6  |   |      | $ | 9.0  |  
|Property, plant and equipment |  |      | 171.4 |   |      |   | 1.7  |  
|Intangible assets             |  |      | 26.1  |   |      |   | 17.6 |  
|Goodwill                      |  |      | 130.0 |   |      |   | 48.6 |  
|                              |  |      |       |   |      |   |      |  
|Assets held for sale          |  |      | 398.1 |   |      |   | 76.9 |  
|Current liabilities           |  |      | (61.0 | ) |      |   | (9.0 | )
|Long-term liabilities         |  |      | (36.9 | ) |      |   |     |  
|                              |  |      |       |   |      |   |      |  
|Liabilities held for sale     |  |      | (97.9 | ) |      |   | (9.0 | )
|                              |  |      |       |   |      |   |      |  
|Net assets held for sale      |  | $    | 300.2 |   |      | $ | 67.9 |  
|                              |  |      |       |   |      |   |      |  



|9. | LOSS ON DEBT REFINANCING
|-- | ------------------------

2014



| |  |  | In April 2014, Quebecor Media redeemed all of its issued and outstanding 7.75% Senior Notes due March 2016 in aggregate principal amount of US$380.0
million and settled its related hedging contracts for a total cash consideration of $367.8 million.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In April 2014, Videotron redeemed US$260.0 million in aggregate principal amount of its issued and outstanding 9.125% Senior Notes due April 2018 for a
total cash consideration of $295.4 million.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These transactions resulted in a total loss of $18.7
million in 2014, including a gain of $10.8 million previously reported in other comprehensive income.

2013



| |  |  | In July 2013, Videotron redeemed US$380.0 million in aggregate principal amount of its issued and outstanding 9.125% Senior Notes due April 2018 and
settled its related hedging contracts for a total cash consideration of $399.6 million.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In August 2013, Quebecor Media redeemed US$265.0 million in aggregate principal amount of its issued and outstanding 7.75% Senior Notes due March
2016 and settled its related hedging contracts for a total cash consideration of $306.1 million.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These
transactions resulted in a total loss of $18.9 million in 2013, including a gain of $14.5 million previously reported in other comprehensive income.



F-32



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|9. | LOSS ON DEBT REFINANCING (continued)
|-- | ------------------------------------



2012



| |  |  | In March 2012, Videotron redeemed all of its 6.875% Senior Notes due January 2014 in an aggregate principal amount of US$395.0 million for a total
cash consideration of $394.1 million.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In March and April 2012, Quebecor Media redeemed US$260.0 million in aggregate principal amount of its 7.75% Senior Notes due March 2016 and settled
hedging contracts for a total cash consideration of $304.9 million.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In November 2012, Quebecor Media redeemed US$320.0 million in aggregate principal amount of its 7.75% Senior Notes due March 2016 for a total
cash consideration of $327.1 million.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In December 2012, Quebecor Media prepaid the balance outstanding under its term loan B credit facility for a cash consideration of $153.9
million. The related hedging contracts were settled for a consideration of $28.5 million in January 2013.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These transactions resulted in a total loss of $6.3 million in 2012, including a gain of $15.3 million previously reported in other
comprehensive income.



|10. | BUSINESS ACQUISITIONS
|--- | ---------------------

2014



| |  |  | In December 2014, the Media segment acquired, through TVA Group Inc. (TVA Group), substantially all of the assets (including certain
operational liabilities assumed) of Global Vision A.R. Ltd. and its subsidiary (Global Vision) for a purchase price of $116.1 million in cash. The purchase price is subject to a post-closing adjustment on working capital items. Global
Vision operates in the film and television industry by offering soundstage and equipment leasing and post-production services. The assets acquired include Mels La Cité du Cinéma in Montréal and Studio Melrose in Saint-Hubert, which facilities are used for both local and foreign film and television production, including American blockbusters. The purpose of this acquisition was to invest in sectors that are a good fit with
the Media segment activities, with the effect of diversifying the segment revenues. Goodwill related to this acquisition arised principally from the reputation of assembled workforce, future growth and expected synergies.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In 2014, the Corporation also acquired other businesses such as les Remparts de Québec, a hockey team from the QMJHL.
| | - |  | ---------------------------------------------------------------------------------------------------------------------



F-33



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|10. | BUSINESS ACQUISITIONS (continued)
|--- | ---------------------------------



The preliminary purchase price allocation between the fair value of identifiable assets
and liabilities related to business acquisitions in 2014 is summarized as follows:



|                                  |  |      |       |  
|--------------------------------- |  | ---- | ----- | -
|                                  |  | 2014 |      
|                                  | 
|Assets acquired                   |  |      |       |  
|Non-cash current assets           |  | $    | 9.6   |  
|Property, plant and equipment     |  |      | 96.4  |  
|Intangible assets                 |  |      | 17.1  |  
|Goodwill                          |  |      | 18.0  |  
|                                  |  |      |       |  
|                                  |  |      | 141.1 |  
|Liabilities assumed               |  |      |       |  
|Non-cash current liabilities      |  |      | (7.0  | )
|Other long-term liabilities       |  |      | (1.3  | )
|                                  |  |      |       |  
|                                  |  |      | (8.3  | )
|                                  |  |      |       |  
|Net assets acquired at fair value |  | $    | 132.8 |  
|                                  |  |      |       |  
|                                  | 
|Consideration                     |  |      |       |  
|Cash                              |  | $    | 132.3 |  
|Balance payable                   |  |      | 0.5   |  
|                                  |  |      |       |  
|                                  |  | $    | 132.8 |  
|                                  |  |      |       |  

The pro forma revenues and net income in 2014 would not have been significantly different than actual
figures, if all business acquisitions had occurred at the beginning of the year.

The amount of goodwill that is deductible for
tax purposes is $18.0 million in 2014 (none in 2013 and $0.6 million in 2012).

2013



| |  |  | In May 2013, the Sports and Entertainment segment acquired a Québec City sporting and cultural event management company.
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | In July 2013, the Media segment acquired, through TVA Group, a magazine publisher and a book publisher in the Province of Québec.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



F-34



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|11. | INCOME TAXES
|--- | ------------

The
following table reconciles income taxes at the Corporations domestic statutory tax rate of 26.9% in 2014 (26.9% in 2013 and 2012), and income taxes in the consolidated statements of income:



|                                                                                                          |  |      |      |   |      |   |      |      |  |   |       |  
|--------------------------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ----- | -
|                                                                                                          |  | 2014 |      |   | 2013 |   |      | 2012 | 
|                                                                                                          |  |      |     
|Income taxes at domestic statutory tax rate                                                               |  | $    | 66.9 |   |      | $ | 21.0 |      |  | $ | 135.7 |  
|(Reduction) increase resulting from:                                                                      |  |      |      |   |      |   |      |      |  |   |       |  
|Effect of provincial tax rate differences                                                                 |  |      | (0.8 | ) |      |   | (0.2 | )    |  |   | (0.5  | )
|Effect of non-deductible charges, non-taxable income and differences between current and future tax rates |  |      | 17.7 |   |      |   | 0.2  |      |  |   | 2.3   |  
|Change in benefit arising from the recognition of current and prior year tax losses                       |  |      | 2.2  |   |      |   | 5.5  |      |  |   | (8.4  | )
|Effect of tax consolidation transactions with the parent corporation                                      |  |      | (0.3 | ) |      |   | (0.9 | )    |  |   | (1.5  | )
|Non-deductible impairment of goodwill                                                                     |  |      | 9.0  |   |      |   | 9.5  |      |  |   | 11.6  |  
|Other                                                                                                     |  |      | 1.7  |   |      |   | 1.6  |      |  |   | 3.8   |  
|                                                                                                          |  |      |      |   |      |   |      |      |  |   |       |  
|Income taxes                                                                                              |  | $    | 96.4 |   |      | $ | 36.7 |      |  | $ | 143.0 |  
|                                                                                                          |  |      |      |   |      |   |      |      |  |   |       |  

The significant items comprising the Corporations net deferred income tax liability and their
impact on the deferred income tax expense are as follows:



|                                                                   |  |                            |        |   |                               |   |        |      |  |   |       |   |  |      |       |   |  |   |      |  
|------------------------------------------------------------------ |  | -------------------------- | ------ | - | ----------------------------- | - | ------ | ---- |  | - | ----- | - |  | ---- | ----- | - |  | - | ---- | -
|                                                                   |  | Consolidatedbalance sheets |        |   | Consolidatedincome statements |  
|                                                                   |  | 2014                       |        |   | 2013                          |   |        | 2014 |  |   | 2013  |   |  | 2012 |      
|                                                                   |  |                            |        |   |                              
|Loss carryforwards                                                 |  | $                          | 4.3    |   |                               | $ | 14.9   |      |  | $ | 6.7   |   |  | $    | 14.9  |   |  | $ | 44.2 |  
|Accounts payable, accrued charges, provisions and deferred revenue |  |                            | 5.4    |   |                               |   | 7.3    |      |  |   | 1.9   |   |  |      | 1.4   |   |  |   | 2.8  |  
|Defined benefit plans                                              |  |                            | 33.2   |   |                               |   | 24.0   |      |  |   | 4.9   |   |  |      | 1.6   |   |  |   | 1.1  |  
|Property, plant and equipment                                      |  |                            | (432.6 | ) |                               |   | (427.7 | )    |  |   | 4.9   |   |  |      | 15.6  |   |  |   | 11.5 |  
|Goodwill, intangible assets and other assets                       |  |                            | (75.6  | ) |                               |   | (93.4  | )    |  |   | (13.2 | ) |  |      | (18.9 | ) |  |   | 1.8  |  
|Long-term debt and derivative financial instruments                |  |                            | (8.7   | ) |                               |   | 17.9   |      |  |   | 5.7   |   |  |      | (66.8 | ) |  |   | 18.3 |  
|Benefits from a general partnership                                |  |                            | (56.5  | ) |                               |   | (87.4  | )    |  |   | (30.9 | ) |  |      | (14.0 | ) |  |   | (7.2 | )
|Other                                                              |  |                            | 1.8    |   |                               |   | 2.4    |      |  |   | 0.3   |   |  |      | 3.0   |   |  |   | 0.9  |  
|                                                                   |  |                            |        |   |                               |   |        |      |  |   |       |   |  |      |       |   |  |   |      |  
|                                                                   |  | $                          | (528.7 | ) |                               | $ | (542.0 | )    |  | $ | (19.7 | ) |  | $    | (63.2 | ) |  | $ | 73.4 |  
|                                                                   |  |                            |        |   |                               |   |        |      |  |   |       |   |  |      |       |   |  |   |      |  



F-35



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|11. | INCOME TAXES (continued)
|--- | ------------------------



Changes in the net deferred income tax liability are as follows:



|                                                                    |  |      |    |  |      |   |        |      |  |   |        |  
|------------------------------------------------------------------- |  | ---- | -- |  | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                    |  | Note |    |  | 2014 |   |        | 2013 | 
|Balance as of beginning of the year                                 |  |      |    |  |      | $ | (542.0 | )    |  | $ | (570.2 | )
|Recognized in income as continuing operations                       |  |      |    |  |      |   | 20.7   |      |  |   | 46.7   |  
|Recognized in income as discontinued operations                     |  |      | 8  |  |      |   | (1.0   | )    |  |   | 16.5   |  
|Recognized in other comprehensive income as continuing operations   |  |      |    |  |      |   | (8.8   | )    |  |   | (29.5  | )
|Recognized in other comprehensive income as discontinued operations |  |      | 8  |  |      |   | 2.0    |      |  |   | (8.0   | )
|Business acquisitions and disposals                                 |  |      |    |  |      |   | (2.4   | )    |  |   | (4.2   | )
|Acquisition of tax deductions                                       |  |      | 28 |  |      |   | 3.1    |      |  |   | 6.9    |  
|Other                                                               |  |      |    |  |      |   | (0.3   | )    |  |   | (0.2   | )
|                                                                    |  |      |    |  |      |   |        |      |  |   |        |  
|Balance as of the end of the year                                   |  |      |    |  |      | $ | (528.7 | )    |  | $ | (542.0 | )
|                                                                    |  |      |    |  |      |   |        |      |  |   |        |  
|                                                                    |  |      |   
|Deferred income tax asset                                           |  |      |    |  |      | $ | 7.8    |      |  | $ | 26.6   |  
|Deferred income tax liability                                       |  |      |    |  |      |   | (502.4 | )    |  |   | (568.6 | )
|Deferred income tax liability included in liabilities held for sale |  |      |    |  |      |   | (34.1  | )    |  |   |       |  
|                                                                    |  |      |    |  |      |   |        |      |  |   |        |  
|                                                                    |  |      |    |  |      | $ | (528.7 | )    |  | $ | (542.0 | )
|                                                                    |  |      |    |  |      |   |        |      |  |   |        |  

As of December 31, 2014, the Corporation had loss carryforwards for income tax purposes of $32.0
million available to reduce future taxable income, including $19.3 million that will expire between 2031 and 2034, and $12.7 million that can be carried forward indefinitely. Of these losses, an amount of $15.0 million has not been recognized.
The Corporation also had capital losses of $861.2 million that can be carried forward indefinitely and applied only against future capital gains, of which none were recognized.

There are no income tax consequences attached to the payment of dividends in 2014, 2013 or 2012 by the Corporation to its shareholders.



|12. | ACCOUNTS RECEIVABLE
|--- | -------------------



|      |  |      |    |     |      |   |       |      |  |   |       | 
|----- |  | ---- | -- | --- | ---- | - | ----- | ---- |  | - | ----- | 
|      |  | Note |    |     | 2014 |   |       | 2013 | 
|Trade |  |      | 27 | (c) |      | $ | 397.8 |      |  | $ | 492.4 | 
|Other |  |      |    |     |      |   | 50.6  |      |  |   | 73.3  | 
|      |  |      |    |     |      |   |       |      |  |   |       | 
|      |  |      |    |     |      | $ | 448.4 |      |  | $ | 565.7 | 
|      |  |      |    |     |      |   |       |      |  |   |       | 



F-36



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|13. | INVENTORIES
|--- | -----------



|                                            |  |      |       |  |      |   |       | 
|------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                                            |  | 2014 |       |  | 2013 |  
|Raw materials and supplies                  |  | $    | 21.0  |  |      | $ | 26.7  | 
|Finished goods                              |  |      | 115.7 |  |      |   | 140.8 | 
|Programs, broadcast and distribution rights |  |      | 73.3  |  |      |   | 60.5  | 
|Work in progress                            |  |      | 2.2   |  |      |   | 11.4  | 
|                                            |  |      |       |  |      |   |       | 
|                                            |  | $    | 212.2 |  |      | $ | 239.4 | 
|                                            |  |      |       |  |      |   |       | 

Cost of inventories included in purchase of goods and services amounted to $873.4 million in 2014 ($830.2
million in 2013 and $872.7 million in 2012), of which $155.2 million is presented as part of discontinued operations in 2014 ($181.5 million in 2013 and 197.9$ in 2012). Write-downs of inventories
totalling $4.4 million were recognized in purchase of goods and services in 2014 ($5.1 million in 2013 and $6.4 million in 2012).



|14. | PROPERTY, PLANT AND EQUIPMENT
|--- | -----------------------------

For the years ended December 31, 2014 and 2013, changes in the net carrying amount of property, plant and equipment are as follows:



|                                                       |  |                                         |        |   |                       |   |         |                            |  |   |                          |   |  |       |        |   |  |   |         |  
|------------------------------------------------------ |  | --------------------------------------- | ------ | - | --------------------- | - | ------- | -------------------------- |  | - | ------------------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                       |  | Land,buildings andleaseholdimprovements |        |   | Machineryandequipment |   |         | Telecommunicationsnetworks |  |   | Projectsunderdevelopment |   |  | Total |       
|Cost                                                   |  |                                         |        |   |                       |   |         |                            |  |   |                          |   |  |       |        |   |  |   |         |  
|                                                       |  |                                         |        |   |                      
|Balance as of December 31, 2012                        |  | $                                       | 476.7  |   |                       | $ | 1,246.6 |                            |  | $ | 4,281.8                  |   |  | $     | 50.6   |   |  | $ | 6,055.7 |  
|Additions                                              |  |                                         | 26.9   |   |                       |   | 177.0   |                            |  |   | 293.8                    |   |  |       | 64.5   |   |  |   | 562.2   |  
|Net change in additions financed with accounts payable |  |                                         |       |   |                       |   | (2.8    | )                          |  |   | (5.0                     | ) |  |       | 3.0    |   |  |   | (4.8    | )
|Reclassification                                       |  |                                         | 0.3    |   |                       |   | 20.8    |                            |  |   | 51.0                     |   |  |       | (72.1  | ) |  |   |        |  
|Reclassification to assets held for sale               |  |                                         |       |   |                       |   | (3.6    | )                          |  |   |                         |   |  |       |       |   |  |   | (3.6    | )
|Retirement, disposals and other1                       |  |                                         |       |   |                       |   | (10.4   | )                          |  |   | (66.7                    | ) |  |       |       |   |  |   | (77.1   | )
|                                                       |  |                                         |        |   |                       |   |         |                            |  |   |                          |   |  |       |        |   |  |   |         |  
|Balance as of December 31, 2013                        |  |                                         | 503.9  |   |                       |   | 1,427.6 |                            |  |   | 4,554.9                  |   |  |       | 46.0   |   |  |   | 6,532.4 |  
|Additions                                              |  |                                         | 34.8   |   |                       |   | 170.3   |                            |  |   | 289.1                    |   |  |       | 151.3  |   |  |   | 645.5   |  
|Net change in additions financed with accounts payable |  |                                         |       |   |                       |   | 1.7     |                            |  |   | (1.2                     | ) |  |       | (0.3   | ) |  |   | 0.2     |  
|Reclassification                                       |  |                                         | 0.5    |   |                       |   | 34.3    |                            |  |   | 119.1                    |   |  |       | (153.9 | ) |  |   |        |  
|Business acquisitions and disposals                    |  |                                         | 54.6   |   |                       |   | 24.5    |                            |  |   |                         |   |  |       |       |   |  |   | 79.1    |  
|Reclassification to assets held for sale               |  |                                         | (118.0 | ) |                       |   | (191.8  | )                          |  |   |                         |   |  |       | (1.9   | ) |  |   | (311.7  | )
|Retirement, disposals and other1                       |  |                                         | (11.8  | ) |                       |   | (68.9   | )                          |  |   | (80.8                    | ) |  |       | (3.5   | ) |  |   | (165.0  | )
|                                                       |  |                                         |        |   |                       |   |         |                            |  |   |                          |   |  |       |        |   |  |   |         |  
|Balance as of December 31, 2014                        |  | $                                       | 464.0  |   |                       | $ | 1,397.7 |                            |  | $ | 4,881.1                  |   |  | $     | 37.7   |   |  | $ | 6,780.5 |  
|                                                       |  |                                         |        |   |                       |   |         |                            |  |   |                          |   |  |       |        |   |  |   |         |  



F-37



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|14. | PROPERTY, PLANT AND EQUIPMENT (continued)
|--- | -----------------------------------------



|                                               |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  
|---------------------------------------------- |  | --------------------------------------- | ----- | - | --------------------- | - | ------ | -------------------------- |  | - | ------------------------ | - |  | ----- | ---- |  |  | - | ------- | -
|                                               |  | Land,buildings andleaseholdimprovements |       |   | Machineryandequipment |   |        | Telecommunicationsnetworks |  |   | Projectsunderdevelopment |   |  | Total |     
|                                               |  |                                         |       |   |                      
|Accumulated depreciation and impairment losses |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  
|                                               |  |                                         |       |   |                      
|Balance as of December 31, 2012                |  | $                                       | 167.4 |   |                       | $ | 518.1  |                            |  | $ | 2,017.0                  |   |  | $     |     |  |  | $ | 2,702.5 |  
|Depreciation                                   |  |                                         | 15.9  |   |                       |   | 163.8  |                            |  |   | 322.3                    |   |  |       |     |  |  |   | 502.0   |  
|Reclassification to assets held for sale       |  |                                         |      |   |                       |   | (1.9   | )                          |  |   |                         |   |  |       |     |  |  |   | (1.9    | )
|Retirement, disposals and other1               |  |                                         | 5.6   |   |                       |   | 7.5    |                            |  |   | (65.7                    | ) |  |       |     |  |  |   | (52.6   | )
|                                               |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  
|Balance as of December 31, 2013                |  |                                         | 188.9 |   |                       |   | 687.5  |                            |  |   | 2,273.6                  |   |  |       |     |  |  |   | 3,150.0 |  
|Depreciation                                   |  |                                         | 16.8  |   |                       |   | 188.8  |                            |  |   | 333.2                    |   |  |       |     |  |  |   | 538.8   |  
|Business disposals                             |  |                                         | (3.3  | ) |                       |   | (9.0   | )                          |  |   |                         |   |  |       |     |  |  |   | (12.3   | )
|Reclassification to assets held for sale       |  |                                         | (32.9 | ) |                       |   | (107.4 | )                          |  |   |                         |   |  |       |     |  |  |   | (140.3  | )
|Retirement, disposals and other1               |  |                                         | (7.2  | ) |                       |   | (51.5  | )                          |  |   | (79.9                    | ) |  |       |     |  |  |   | (138.6  | )
|                                               |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  
|As of December 31, 2014                        |  | $                                       | 162.3 |   |                       | $ | 708.4  |                            |  | $ | 2,526.9                  |   |  | $     |     |  |  | $ | 3,397.6 |  
|                                               |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  
|                                               |  |                                         |       |   |                      
|Net carrying amount                            |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  
|                                               |  |                                         |       |   |                      
|As of December 31, 2013                        |  | $                                       | 315.0 |   |                       | $ | 740.1  |                            |  | $ | 2,281.3                  |   |  | $     | 46.0 |  |  | $ | 3,382.4 |  
|As of December 31, 2014                        |  | $                                       | 301.7 |   |                       | $ | 689.3  |                            |  | $ | 2,354.2                  |   |  | $     | 37.7 |  |  | $ | 3,382.9 |  
|                                               |  |                                         |       |   |                       |   |        |                            |  |   |                          |   |  |       |      |  |  |   |         |  



|1 | Includes also the net change in assets related to discontinued operations.
|- | --------------------------------------------------------------------------



F-38



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|15. | INTANGIBLE ASSETS
|--- | -----------------

For
the years ended December 31, 2014 and 2013, changes in the net carrying amount of intangible assets are as follows:



|                                                       |  |                       |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |        |       |  |   |       |   |  |   |         |  
|------------------------------------------------------ |  | --------------------- | ----- |  | -------- | - | ----- | ------------------------------ |  | - | -------------------- | - |  | --------- | ----- |  | ------------------------ | - | ------ | ----- |  | - | ----- | - |  | - | ------- | -
|                                                       |  | Spectrumlicenses1, 
2 |       |  | Software |   |       | Customerrelationshipsand other |  |   | Broadcastinglicenses |   |  | Mastheads |       |  | Projectsunderdevelopment |   |        | Total | 
|                                                       |  |                       |       |  |          |   |      
|Cost                                                   |  |                       |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |        |       |  |   |       |   |  |   |         |  
|                                                       |  |                       |       |  |          |   |      
|Balance as of December 31, 2012                        |  | $                     | 554.6 |  |          | $ | 543.0 |                                |  | $ | 224.9                |   |  | $         | 103.0 |  |                          | $ | 110.8  |       |  | $ | 27.3  |   |  | $ | 1,563.6 |  
|Additions                                              |  |                       | 15.9  |  |          |   | 37.2  |                                |  |   | 4.0                  |   |  |           |      |  |                          |   |       |       |  |   | 20.7  |   |  |   | 77.8    |  
|Net change in additions financed with accounts payable |  |                       |      |  |          |   | 2.4   |                                |  |   |                     |   |  |           |      |  |                          |   |       |       |  |   | 0.2   |   |  |   | 2.6     |  
|Reclassification                                       |  |                       |      |  |          |   | 32.4  |                                |  |   |                     |   |  |           |      |  |                          |   |       |       |  |   | (32.4 | ) |  |   |        |  
|Reclassification to assets held for sale               |  |                       |      |  |          |   |      |                                |  |   | (16.4                | ) |  |           |      |  |                          |   | (7.0   | )     |  |   |      |   |  |   | (23.4   | )
|Retirement, disposals and other3                       |  |                       |      |  |          |   | (32.2 | )                              |  |   | (3.6                 | ) |  |           |      |  |                          |   | (0.5   | )     |  |   |      |   |  |   | (36.3   | )
|                                                       |  |                       |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |        |       |  |   |       |   |  |   |         |  
|Balance as of December 31, 2013                        |  |                       | 570.5 |  |          |   | 582.8 |                                |  |   | 208.9                |   |  |           | 103.0 |  |                          |   | 103.3  |       |  |   | 15.8  |   |  |   | 1,584.3 |  
|Additions                                              |  |                       | 217.4 |  |          |   | 66.7  |                                |  |   | 4.0                  |   |  |           |      |  |                          |   |       |       |  |   | 29.2  |   |  |   | 317.3   |  
|Net change in additions financed with accounts payable |  |                       |      |  |          |   | (0.8  | )                              |  |   |                     |   |  |           |      |  |                          |   |       |       |  |   | (1.8  | ) |  |   | (2.6    | )
|Reclassification                                       |  |                       |      |  |          |   | 34.0  |                                |  |   |                     |   |  |           |      |  |                          |   |       |       |  |   | (34.0 | ) |  |   |        |  
|Business acquisitions and disposals                    |  |                       |      |  |          |   | (3.3  | )                              |  |   | 3.5                  |   |  |           |      |  |                          |   |       |       |  |   |      |   |  |   | 0.2     |  
|Reclassification to assets held for sale               |  |                       |      |  |          |   | (37.2 | )                              |  |   | (110.9               | ) |  |           |      |  |                          |   | (103.3 | )     |  |   | (1.9  | ) |  |   | (253.3  | )
|Retirement, disposals and other3                       |  |                       |      |  |          |   | (17.9 | )                              |  |   | (3.0                 | ) |  |           |      |  |                          |   |       |       |  |   | 0.1   |   |  |   | (20.8   | )
|                                                       |  |                       |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |        |       |  |   |       |   |  |   |         |  
|Balance as of December 31, 2014                        |  | $                     | 787.9 |  |          | $ | 624.3 |                                |  | $ | 102.5                |   |  | $         | 103.0 |  |                          | $ |       |       |  | $ | 7.4   |   |  | $ | 1,625.1 |  
|                                                       |  |                       |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |        |       |  |   |       |   |  |   |         |  



F-39



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|15. | INTANGIBLE ASSETS (continued)
|--- | -----------------------------



|                                               |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  
|---------------------------------------------- |  | ---------------- | ----- |  | -------- | - | ----- | ------------------------------ |  | - | -------------------- | - |  | --------- | ----- |  | ------------------------ | - | ----- | ----- |  | - | ---- |  |  | - | ------ | -
|                                               |  | Spectrumlicenses |       |  | Software |   |       | Customerrelationshipsand other |  |   | Broadcastinglicenses |   |  | Mastheads |       |  | Projectsunderdevelopment |   |       | Total | 
|                                               |  |                  |       |  |          |   |      
|Accumulated amortization and impairment losses |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  
|                                               |  |                  |       |  |          |   |      
|Balance as of December 31, 2012                |  | $                | 122.5 |  |          | $ | 276.2 |                                |  | $ | 142.6                |   |  | $         | 0.8   |  |                          | $ | 64.8  |       |  | $ |     |  |  | $ | 606.9  |  
|Amortization                                   |  |                  | 55.6  |  |          |   | 53.3  |                                |  |   | 17.2                 |   |  |           |      |  |                          |   |      |       |  |   |     |  |  |   | 126.1  |  
|Impairment (note 7)                            |  |                  |      |  |          |   |      |                                |  |   | 28.1                 |   |  |           |      |  |                          |   | 27.9  |       |  |   |     |  |  |   | 56.0   |  
|Reclassification to assets held for sale       |  |                  |      |  |          |   |      |                                |  |   | (5.8                 | ) |  |           |      |  |                          |   |      |       |  |   |     |  |  |   | (5.8   | )
|Retirement, disposals and other3               |  |                  |      |  |          |   | (18.7 | )                              |  |   | (5.0                 | ) |  |           |      |  |                          |   |      |       |  |   |     |  |  |   | (23.7  | )
|                                               |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  
|Balance as of December 31, 2013                |  |                  | 178.1 |  |          |   | 310.8 |                                |  |   | 177.1                |   |  |           | 0.8   |  |                          |   | 92.7  |       |  |   |     |  |  |   | 759.5  |  
|Amortization                                   |  |                  | 55.7  |  |          |   | 64.1  |                                |  |   | 5.6                  |   |  |           |      |  |                          |   |      |       |  |   |     |  |  |   | 125.4  |  
|Impairment (note 7)                            |  |                  |      |  |          |   |      |                                |  |   |                     |   |  |           | 41.7  |  |                          |   |      |       |  |   |     |  |  |   | 41.7   |  
|Business disposals                             |  |                  |      |  |          |   | (3.8  | )                              |  |   | (4.4                 | ) |  |           |      |  |                          |   |      |       |  |   |     |  |  |   | (8.2   | )
|Reclassification to assets held for sale       |  |                  |      |  |          |   | (28.0 | )                              |  |   | (106.5               | ) |  |           |      |  |                          |   | (92.7 | )     |  |   |     |  |  |   | (227.2 | )
|Retirement, disposals and other3               |  |                  |      |  |          |   | (10.3 | )                              |  |   | (1.6                 | ) |  |           |      |  |                          |   |      |       |  |   |     |  |  |   | (11.9  | )
|                                               |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  
|Balance as of December 31, 2014                |  | $                | 233.8 |  |          | $ | 332.8 |                                |  | $ | 70.2                 |   |  | $         | 42.5  |  |                          | $ |      |       |  | $ |     |  |  | $ | 679.3  |  
|                                               |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  
|                                               |  |                  |       |  |          |   |      
|Net carrying amount                            |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  
|                                               |  |                  |       |  |          |   |      
|As of December 31, 2013                        |  | $                | 392.4 |  |          | $ | 272.0 |                                |  | $ | 31.8                 |   |  | $         | 102.2 |  |                          | $ | 10.6  |       |  | $ | 15.8 |  |  | $ | 824.8  |  
|As of December 31, 2014                        |  | $                | 554.1 |  |          | $ | 291.5 |                                |  | $ | 32.3                 |   |  | $         | 60.5  |  |                          | $ |      |       |  | $ | 7.4  |  |  | $ | 945.8  |  
|                                               |  |                  |       |  |          |   |       |                                |  |   |                      |   |  |           |       |  |                          |   |       |       |  |   |      |  |  |   |        |  



|1 | Videotron has the option, effective as of January 1, 2014, to sell its unused AWS spectrum licence in the Toronto region to Rogers Communications
Partnership for a price of $180.0 million. The spectrum licence was purchased at a cost of $96.4 million in 2008.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | In 2014, Videotron acquired seven 700 MHz spectrum licences, covering the entirety of the provinces of Québec, Ontario (except Northern
Ontario), Alberta and British Columbia, for a total price of $233.3 million, for which Videotron made a cash deposit of $15.9 million in 2013 and paid the balance in 2014.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3 | Includes also the net change in assets related to discontinued operations.
|- | --------------------------------------------------------------------------

The cost of internally generated intangible assets, mainly composed of software, was $415.8 million as of December 31, 2014
($364.1 million as of December 31, 2013). For the year ended December 31, 2014, the Corporation recorded additions of internally generated intangible assets of $62.0 million ($45.2 million in 2013 and
$52.9 million in 2012).



F-40



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|15. | INTANGIBLE ASSETS (continued)
|--- | -----------------------------



The accumulated amortization and impairment losses of internally generated intangible
assets, mainly composed of software, was $209.8 million as of December 31, 2014 ($174.1 million as of December 31, 2013). For the year ended December 31, 2014, the Corporation recorded $44.8 million of amortization
for its internally generated intangible assets ($42.1 million in 2013 and $41.2 million in 2012). The net carrying value of internally generated intangible assets was $206.0 million as of December 31, 2014
($190.0 million as of December 31, 2013).

Broadcasting licenses are allocated to the Broadcasting CGU and
mastheads are allocated to the Newspaper CGU, both part of the Media Segment.



|16. | GOODWILL
|--- | --------

For the years
ended December 31, 2014 and 2013, changes in the net carrying amount of goodwill are as follows:



|                                               |  |   |          |  
|---------------------------------------------- |  | - | -------- | -
|Cost                                           |  |   |          |  
|                                               | 
|Balance as of December 31, 2012                |  | $ | 6,993.2  |  
|Business acquisitions                          |  |   | 5.7      |  
|Business disposals                             |  |   | (19.5    | )
|Reclassification to assets held for sale       |  |   | (118.6   | )
|Other                                          |  |   | 2.1      |  
|                                               |  |   |          |  
|Balance as of December 31, 2013                |  |   | 6,862.9  |  
|Business acquisitions                          |  |   | 18.0     |  
|Business disposals                             |  |   | (93.9    | )
|Reclassification to assets held for sale       |  |   | (1,203.0 | )
|Other                                          |  |   | 0.3      |  
|                                               |  |   |          |  
|Balance as of December 31, 2014                |  | $ | 5,584.3  |  
|                                               |  |   |          |  
|                                               | 
|Accumulated amortization and impairment losses |  |   |          |  
|                                               | 
|Balance as of December 31, 2012                |  | $ | 3,621.6  |  
|Impairment loss (note 7)                       |  |   | 249.8    |  
|Reclassification to assets held for sale       |  |   | (70.0    | )
|                                               |  |   |          |  
|Balance as of December 31, 2013                |  |   | 3,801.4  |  
|Impairment loss (note 7)                       |  |   | 199.3    |  
|Business disposals                             |  |   | (58.0    | )
|Reclassification to assets held for sale       |  |   | (1,073.0 | )
|                                               |  |   |          |  
|Balance as of December 31, 2014                |  | $ | 2,869.7  |  
|                                               |  |   |          |  
|                                               | 
|Net carrying amount                            |  |   |          |  
|                                               | 
|As of December 31, 2013                        |  | $ | 3,061.5  |  
|As of December 31, 2014                        |  | $ | 2,714.6  |  
|                                               |  |   |          |  



F-41



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|16. | GOODWILL (continued)
|--- | --------------------



The net carrying amount of goodwill as of December 31, 2014 and 2013 is allocated
to the following significant groups of CGUs:



|                         |  |                                        |  |      |         |  |      |   |         | 
|------------------------ |  | -------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                         |  |                                        |  | 2014 |         |  | 2013 |  
|Industry segment         |  | Group of CGUs                          |  |      |         |  |      |  
|                         |  |                                        | 
|Telecommunications       |  | Telecommunications                     |  | $    | 2,570.3 |  |      | $ | 2,570.3 | 
|Media                    |  | Newspapers                             |  |      | 85.0    |  |      |   | 405.0   | 
|                         |  | Magazines                              |  |      | 35.8    |  |      |   | 35.8    | 
|                         |  | Specialty film and television services |  |      | 12.3    |  |      |   |        | 
|                         |  | Broadcasting                           |  |      |        |  |      |   | 9.3     | 
|                         |  | Book publishing and distribution       |  |      | 4.4     |  |      |   | 4.4     | 
|Sports and Entertainment |  | Sports and Entertainment               |  |      | 6.8     |  |      |   | 1.0     | 
|Disposed business1       |  |                                        |  |      |        |  |      |   | 35.7    | 
|                         |  |                                        |  |      |         |  |      |   |         | 
|Total                    |  |                                        |  | $    | 2,714.6 |  |      | $ | 3,061.5 | 
|                         |  |                                        |  |      |         |  |      |   |         | 



|1 | The goodwill in 2013 related to the Nurun subsidiary sold in September 2014 (note 8).
|- | -------------------------------------------------------------------------------------

Recoverable amounts

Recoverable amounts of CGUs were determined based on the higher of a value in use or a fair value less costs of disposal with respect to the impairment tests performed. The Corporation uses the discounted
cash flow method to estimate the recoverable amount, consisting of future cash flows derived primarily from the most recent budget and three-year strategic plan approved by the Corporations management
and presented to the Board of Directors. These forecasts considered each CGUs past operating performance and market share as well as economic trends, along with specific and market industry trends and corporate strategies. In particular,
specific assumptions are used for each type of revenues generated by a CGU or for each nature of expenses as well as for future capital expenditures. As such, assumptions will consider, among many other factors, subscribers, readership and viewer
statistics, advertising market trends, competitive landscape, evolution of products and services offerings, wireless penetration growth, proliferation of media platforms, technology evolution, broadcasting programming strategy, bargaining
agreements, Canadian GDP rates and operating cost structures.

A perpetual growth rate is used for cash flows beyond the
strategic plan three-year period. The discount rate used by the Corporation is a pre-tax rate derived from the weighted average cost of capital pertaining to each CGU, which reflects the current market
assessment of (i) the time value of money, and (ii) the risk specific to the assets for which the future cash flow estimates have not been risk-adjusted. The perpetual growth rate was determined with regard to the specific markets in which
the CGUs participate. In certain circumstances, the Corporation can also estimate the fair value less cost of disposal with a market approach that consists of estimating the recoverable amount by using multiples of operating performance of
comparable entities, transactions metrics and other financial information available, instead of using primarily the discounted cash flow method.



F-42



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|16. | GOODWILL (continued)
|--- | --------------------



Recoverable amounts (continued)



The following key assumptions were used to determine recoverable amounts in the most
recent impairment tests performed on the Corporations significant group of CGUs:



|                                  |  |                             |      |   |                      |  |     |                             |  |  |                      |   |  |  |     |  
|--------------------------------- |  | --------------------------- | ---- | - | -------------------- |  | --- | --------------------------- |  |  | -------------------- | - |  |  | --- | -
|                                  |  | 2014                        |      |   | 2013                 | 
|Group of CGUs                     |  | Pre-tax discountrate (WACC) |      |   | Perpetualgrowth rate |  |     | Pre-tax discountrate (WACC) |  |  | Perpetualgrowth rate |  
|                                  |  |                             |      |  
|Telecommunications:               |  |                             |      |   |                      |  |     |                             |  |  |                      |   |  |  |     |  
|Telecommunications1               |  |                             | 8.9  | % |                      |  | 2.5 | %                           |  |  | 9.0                  | % |  |  | 3.0 | %
|Media                             |  |                             |      |   |                      |  |     |                             |  |  |                      |   |  |  |     |  
|Newspapers2                       |  |                             | 11.4 |   |                      |  | 0.0 |                             |  |  | 12.7                 |   |  |  | 0.0 |  
|Magazines1                        |  |                             | 15.9 |   |                      |  | 1.0 |                             |  |  | 16.4                 |   |  |  | 1.0 |  
|Broadcasting2                     |  |                             | 11.1 |   |                      |  | 1.0 |                             |  |  | 11.3                 |   |  |  | 1.0 |  
|Book publishing and distribution1 |  |                             | 15.8 |   |                      |  | 1.0 |                             |  |  | 15.4                 |   |  |  | 0.5 |  



|1 | The recoverable amounts of these CGUs were based on value in use in 2014.
|- | -------------------------------------------------------------------------

|2 | The recoverable amounts of these CGUs were based on fair value less costs of disposal in 2014 using a discounted cash flow method, except for the
English newspapers activities, for which the fair value less costs of disposal was based on the metrics of an announced transaction (note 8). These fair values are classified as level 3 in the fair value hierarchy described in note 27(b).
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sensitivity of recoverable amounts

The following table presents, for each principal group of CGUs, the change in the discount rate or in the perpetual growth rate used for
the tests performed that would have been required in order for the recoverable amount to equal the carrying value of the CGU as of the most recent impairment tests in 2014:



|                                 |  |                                                     |     |   |                                             |  |      |  
|-------------------------------- |  | --------------------------------------------------- | --- | - | ------------------------------------------- |  | ---- | -
|Group of CGUs1                   |  | Incremental increasein pre-tax discount 
rate(WACC) |     |   | Incremental decreasein perpetualgrowth rate | 
|                                 |  |                                                    
|Telecommunications               |  |                                                     | 4.8 | % |                                             |  | 5.2  | %
|Media                            |  |                                                     |     |   |                                             |  |      |  
|Magazines                        |  |                                                     | 4.0 |   |                                             |  | 5.7  |  
|Book publishing and distribution |  |                                                     | 8.4 |   |                                             |  | 12.7 |  



|1 | No sensitivity tests were performed for CGUs on which impairment charges were recorded in the latest impairment tests.
|- | ----------------------------------------------------------------------------------------------------------------------



F-43



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|17. | OTHER ASSETS
|--- | ------------



|                                            |  |      |    |  |      |   |      |      |  |   |       | 
|------------------------------------------- |  | ---- | -- |  | ---- | - | ---- | ---- |  | - | ----- | 
|                                            |  | Note |    |  | 2014 |   |      | 2013 | 
|                                            |  |      |   
|Programs, broadcast and distribution rights |  |      |    |  |      | $ | 32.0 |      |  | $ | 32.0  | 
|Deferred connection costs                   |  |      |    |  |      |   | 24.3 |      |  |   | 31.6  | 
|Defined benefit plans                       |  |      | 29 |  |      |   | 3.3  |      |  |   | 11.4  | 
|Other                                       |  |      |    |  |      |   | 19.3 |      |  |   | 26.7  | 
|                                            |  |      |    |  |      |   |      |      |  |   |       | 
|                                            |  |      |    |  |      | $ | 78.9 |      |  | $ | 101.7 | 
|                                            |  |      |    |  |      |   |      |      |  |   |       | 



|18. | ACCOUNTS PAYABLE AND ACCRUED CHARGES
|--- | ------------------------------------



|                               |  |      |       |  |      |   |       | 
|------------------------------ |  | ---- | ----- |  | ---- | - | ----- | 
|                               |  | 2014 |       |  | 2013 |  
|Trade and accruals             |  | $    | 465.9 |  |      | $ | 496.5 | 
|Salaries and employee benefits |  |      | 125.3 |  |      |   | 146.9 | 
|Interest payable               |  |      | 37.4  |  |      |   | 37.6  | 
|Stock-based compensation       |  |      | 14.6  |  |      |   | 12.2  | 
|                               |  |      |       |  |      |   |       | 
|                               |  | $    | 643.2 |  |      | $ | 693.2 | 
|                               |  |      |       |  |      |   |       | 



F-44



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|19. | PROVISIONS AND CONTINGENCIES
|--- | ----------------------------



|                                                |  |                            |       |   |                                       |   |      |       |  |   |       |  
|----------------------------------------------- |  | -------------------------- | ----- | - | ------------------------------------- | - | ---- | ----- |  | - | ----- | -
|                                                |  | Restructuringof operations |       |   | Contingencies,legal disputesand other |   |      | Total | 
|                                                |  |                            |      
|Balance as of December 31, 2013                 |  | $                          | 25.5  |   |                                       | $ | 17.5 |       |  | $ | 43.0  |  
|Recognized in income as continuing operations   |  |                            | 10.5  |   |                                       |   | 37.4 |       |  |   | 47.9  |  
|Recognized in income as discontinued operations |  |                            | 7.7   |   |                                       |   |     |       |  |   | 7.7   |  
|Payments                                        |  |                            | (34.8 | ) |                                       |   | (1.9 | )     |  |   | (36.7 | )
|Reclassification to liabilities held for sale   |  |                            | (3.4  | ) |                                       |   |     |       |  |   | (3.4  | )
|Other                                           |  |                            | (0.2  | ) |                                       |   | 3.1  |       |  |   | 2.9   |  
|                                                |  |                            |       |   |                                       |   |      |       |  |   |       |  
|Balance as of December 31, 2014                 |  | $                          | 5.3   |   |                                       | $ | 56.1 |       |  | $ | 61.4  |  
|                                                |  |                            |       |   |                                       |   |      |       |  |   |       |  
|                                                |  |                            |      
|Current portion                                 |  | $                          | 5.3   |   |                                       | $ | 51.4 |       |  | $ | 56.7  |  
|Non-current portion                             |  |                            |      |   |                                       |   | 4.7  |       |  |   | 4.7   |  
|                                                |  |                            |       |   |                                       |   |      |       |  |   |       |  

The recognition of provisions, in terms of both timing and amounts, requires the exercise of judgment
based on relevant circumstances and events that can be subject to change over time. Provisions are primarily comprised of the following:

Restructuring of operations

Provisions for restructuring activities
primarily cover severance payments related to initiatives to eliminate positions in the Media segment.

Contingencies
and legal disputes

There are a number of legal proceedings against the Corporation and its subsidiaries that are pending.
In the opinion of the management of the Corporation and its subsidiaries, the outcome of those proceedings is not expected to have a material adverse effect on the Corporations results or on its financial position. Management of the
Corporation, after taking legal advice, has established provisions for specific claims or actions considering the facts of each case. The Corporation cannot determine when and if a payment related to these provisions will be made.

Other

Other provisions are principally related to contingent liability on business acquisition and decommissioning obligation.



F-45



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|20. | LONG-TERM DEBT
|--- | --------------



|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------- |  | -------------------------------------------- | ---- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                          |  | Effective interestrate as ofDecember 31,2014 |      |   | 2014 |   |         | 2013 | 
|                                                          |  |                                              |     
|Quebecor Media                                            |  |                                              |      |   |      |   |         |      |  |   |         |  
|Bank credit facilities (i)                                |  |                                              | 3.25 | % |      | $ | 400.0   |      |  | $ | 371.9   |  
|Other credit facility (ii)                                |  |                                              | 1.72 | % |      |   | 10.6    |      |  |   | 21.2    |  
|Senior Notes (iii) (note 9)                               |  |                                              | (iii | ) |      |   | 1,813.0 |      |  |   | 2,133.1 |  
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|                                                          |  |                                              |      |   |      |   | 2,223.6 |      |  |   | 2,526.2 |  
|Videotron(iv)                                             |  |                                              |      |   |      |   |         |      |  |   |         |  
|Bank credit facilities (v)                                |  |                                              | 2.78 | % |      |   | 37.5    |      |  |   | 48.2    |  
|Senior Notes (iii) (note 9)                               |  |                                              | (iii | ) |      |   | 2,913.5 |      |  |   | 2,390.3 |  
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|                                                          |  |                                              |      |   |      |   | 2,951.0 |      |  |   | 2,438.5 |  
|TVA Group(iv)                                             |  |                                              |      |   |      |   |         |      |  |   |         |  
|Bank credit facilities (vi)                               |  |                                              | 3.54 | % |      |   | 74.8    |      |  |   | 75.0    |  
|Other                                                     |  |                                              |      |   |      |   | 0.6     |      |  |   | 0.5     |  
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|Total long-term debt                                      |  |                                              |      |   |      |   | 5,250.0 |      |  |   | 5,040.2 |  
|                                                          |  |                                              |     
|Change in fair value related to hedged interest rate risk |  |                                              |      |   |      |   | 8.2     |      |  |   |        |  
|Adjustments related to embedded derivatives               |  |                                              |      |   |      |   | (5.2    | )    |  |   | (8.9    | )
|Financing fees, net of amortization                       |  |                                              |      |   |      |   | (51.2   | )    |  |   | (55.3   | )
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|                                                          |  |                                              |      |   |      |   | (48.2   | )    |  |   | (64.2   | )
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|                                                          |  |                                              |      |   |      |   | 5,201.8 |      |  |   | 4,976.0 |  
|Less current portion                                      |  |                                              |      |   |      |   | (229.1  | )    |  |   | (100.2  | )
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  
|                                                          |  |                                              |      |   |      | $ | 4,972.7 |      |  | $ | 4,875.8 |  
|                                                          |  |                                              |      |   |      |   |         |      |  |   |         |  



F-46



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|20. | LONG-TERM DEBT (continued)
|--- | --------------------------





| | (i) | The bank credit facilities of Quebecor Media are comprised of (a) a US$350.0 million secured term loan B facility issued in August 2013,
bearing interest at U.S. London Interbank Offered Rate (LIBOR), subject to a LIBOR floor of 0.75%, plus a premium of 2.50% and (b) a $300.0 million secured revolving credit facility, bearing interest at Bankers acceptance
rate, LIBOR, Canadian prime rate or U.S. prime rate, plus a premium determined by a leverage ratio, and maturing in January 2017. The term loan B facility provides for quarterly amortization payments totaling 1.00% per annum of
the original principal amount, with the balance payable on August 17, 2020. These credit facilities contain covenants such as maintaining certain financial ratios, limitations on the Corporations ability to incur additional indebtedness,
pay dividends and make other distributions. They are secured by liens on all of the movable property and assets of the Corporation (primarily shares of its subsidiaries), now owned or hereafter acquired. As of December 31, 2014, the credit
facilities of the Corporation were secured by assets with a carrying value of $4,707.1 million ($4,668.4 million in 2013). As of December 31, 2014 and 2013, no amount was drawn on the revolving credit facility,
while the balance of the term loan B was $400.0 million ($371.9 million in 2013).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | The long-term credit facility for the CAN dollar equivalent of 59.4 million, bears interest at Bankers acceptance rate, plus a premium, and
matures in July 2015. The facility is secured by all the property and assets of the Corporation, now owned and hereafter acquired. This facility mostly contains the same covenants as the revolving credit facility described in (i).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | The Senior Notes are unsecured and contain certain restrictions on the respective issuers, including limitations on their ability to incur additional
indebtedness, pay dividends or make other distributions. Some notes are redeemable at the option of the issuer, in whole or in part, at a price based on a make-whole formula during the first five years of the term of the notes and at a decreasing
premium thereafter, while the remaining notes are redeemable at a price based on a make-whole formula at any time prior to maturity. The notes issued by Videotron are guaranteed by specific subsidiaries of
Videotron. The following table summarizes the terms of the outstanding Senior Notes as of December 31, 2014:
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                 |  |                             |       |   |                                                               |  |       |               |  |  |                                   |  |  |  |                      | 
|---------------- |  | --------------------------- | ----- | - | ------------------------------------------------------------- |  | ----- | ------------- |  |  | --------------------------------- |  |  |  | -------------------- | 
|Principal amount |  | Annual nominalinterest rate |       |   | Effective interest rate(after discount orpremium at issuance) |  |       | Maturity date |  |  | Interest payableevery 6 months on | 
|                 |  |                             |       |  
|Quebecor Media   |  |                             |       |   |                                                               |  |       |               |  |  |                                   |  |  |  |                      | 
|$ 325.0          |  |                             | 7.375 | % |                                                               |  | 7.375 | %             |  |  | January 15, 2021                  |  |  |  | June and December 15 | 
|US$ 850.01       |  |                             | 5.750 | % |                                                               |  | 5.750 | %             |  |  | January 15, 2023                  |  |  |  | June and December 15 | 
|$ 500.01         |  |                             | 6.625 | % |                                                               |  | 6.625 | %             |  |  | January 15, 2023                  |  |  |  | June and December 15 | 
|                 |  |                             |       |  
|Videotron        |  |                             |       |   |                                                               |  |       |               |  |  |                                   |  |  |  |                      | 
|US$ 175.0        |  |                             | 6.375 | % |                                                               |  | 6.444 | %             |  |  | December 15, 2015                 |  |  |  | June and December 15 | 
|US$   75.0       |  |                             | 9.125 | % |                                                               |  | 9.375 | %             |  |  | April 15, 2018                    |  |  |  | June and December 15 | 
|$ 300.0          |  |                             | 7.125 | % |                                                               |  | 7.125 | %             |  |  | January 15, 2020                  |  |  |  | June and December 15 | 
|$ 300.0          |  |                             | 6.875 | % |                                                               |  | 6.875 | %             |  |  | July 15, 2021                     |  |  |  | June and December 15 | 
|US$ 800.02       |  |                             | 5.000 | % |                                                               |  | 5.000 | %             |  |  | July 15, 2022                     |  |  |  | January and July 15  | 
|US$ 600.03       |  |                             | 5.375 | % |                                                               |  | 5.375 | %             |  |  | June 15, 2024                     |  |  |  | June and December 15 | 
|$ 400.04         |  |                             | 5.625 | % |                                                               |  | 5.625 | %             |  |  | June 15, 2025                     |  |  |  | April and October 15 | 



| | 1 | The notes were issued in October 2012 for net proceeds of $1,314.5 million, net of financing fees of $16.5 million.
| | - | -------------------------------------------------------------------------------------------------------------------

| | 2 | The notes were issued in March 2012 for net proceeds of $787.6 million, net of financing fees of $11.9 million.
| | - | ---------------------------------------------------------------------------------------------------------------

| | 3 | The notes were issued in April 2014 for net proceeds of $654.5 million, net of financing fees of $7.8 million.
| | - | --------------------------------------------------------------------------------------------------------------

| | 4 | The notes were issued in June 2013 for net proceeds of $394.8 million, net of financing fees of $5.2 million.
| | - | -------------------------------------------------------------------------------------------------------------



F-47



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|20. | LONG-TERM DEBT (continued)
|--- | --------------------------



| | (iv) | The debts of these subsidiaries are non-recourse to Quebecor Media.
| | ---- | -------------------------------------------------------------------



| | (v) | The bank credit facilities provide for a $575.0 million secured revolving credit facility that matures in July 2018 and a $75.0 million secured export
financing facility providing for a term loan that matures in June 2018. The revolving credit facility bears interest at Bankers acceptance rate, Canadian prime rate or U.S. prime rate, plus a margin, depending on Videotrons leverage
ratio. Advances under the export financing facility bear interest at Bankers acceptance rate plus a margin. The bank credit facilities are secured by a first ranking hypothec on the universality of all tangible and intangible assets, current
and future, of Videotron and most of its wholly owned subsidiaries. As of December 31, 2014, the bank credit facilities were secured by assets with a carrying value of $6,238.3 million ($7,013.7 million in 2013). The
bank credit facilities contain covenants such as maintaining certain financial ratios, limitations on Videotrons ability to incur additional indebtedness, pay dividends and make other distributions. As of December 31, 2014 and 2013, no
amount was drawn on the revolving credit facility. As of December 31, 2014, $37.5 million ($48.2 million in 2013) was outstanding on the export financing facility.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (vi) | The bank credit facilities of TVA Group are comprised of a secured revolving credit facility in the amount of $150.0 million, maturing in February 2019, and
a secured term loan in the amount of $75.0 million, maturing in November 2019. TVA Groups revolving credit facility bears interest at floating rates based on Bankers acceptance rate, LIBOR, Canadian prime rate or U.S. prime
rate plus a premium determined by a leverage ratio. The term loan bears interest at floating rates based on Bankers acceptance rate or Canadian prime rate plus a premium determined by a leverage ratio. The term loan provides for quarterly
amortization payments commencing on December 20, 2015. The bank credit facilities contain covenants such as maintaining certain financial ratios, limitations on TVA Groups ability to incur additional indebtedness, pay dividends and
make other distributions. They are secured by liens on all of its movable assets and an immovable hypothec on its head office building. The term loan has replaced the previous term loan at its maturity on December 11, 2014. As of
December 31, 2014 and 2013, no amount was drawn on the revolving credit facility, and as of December 31, 2014, $74.8 million was outstanding on the term loan ($75.0 million in 2013).
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On December 31, 2014, the Corporation and its subsidiaries were in compliance with all debt covenants.

Principal repayments of long-term debt over the coming years are as follows:



|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2015                |  | $ | 229.1   | 
|2016                |  |   | 18.6    | 
|2017                |  |   | 20.9    | 
|2018                |  |   | 105.5   | 
|2019                |  |   | 56.9    | 
|2020 and thereafter |  |   | 4,819.0 | 



F-48



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|21. | OTHER LIABILITIES
|--- | -----------------



|                          |  |      |    |  |      |   |       |      |  |   |       | 
|------------------------- |  | ---- | -- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                          |  | Note |    |  | 2014 |   |       | 2013 | 
|                          |  |      |   
|Defined benefit plans     |  |      | 29 |  |      | $ | 124.3 |      |  | $ | 101.2 | 
|Deferred revenue          |  |      |    |  |      |   | 25.7  |      |  |   | 33.8  | 
|Stock-based compensation1 |  |      | 23 |  |      |   | 6.9   |      |  |   | 8.7   | 
|Other                     |  |      |    |  |      |   | 16.7  |      |  |   | 12.1  | 
|                          |  |      |    |  |      |   |       |      |  |   |       | 
|                          |  |      |    |  |      | $ | 173.6 |      |  | $ | 155.8 | 
|                          |  |      |    |  |      |   |       |      |  |   |       | 



|1 | The current portion of $14.6 million of stock-based compensation is included in accounts payable and accrued charges ($12.2 million in 2013)
(note 18).
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------



|22. | CAPITAL STOCK
|--- | -------------



| | (a) | Authorized capital stock
| | --- | ------------------------

An unlimited number of Common Shares, without par value;

An unlimited number of non-voting Cumulative First Preferred Shares, without par value; the number of preferred shares in each series and the related characteristics, rights and privileges are determined
by the Board of Directors prior to each issue:



| |  |  | An unlimited number of Cumulative First Preferred Shares, Series A (Preferred A Shares), carrying a 12.5% annual fixed cumulative
preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An unlimited number of Cumulative First Preferred Shares, Series B (Preferred B Shares), carrying a fixed cumulative preferential dividend
generally equivalent to the Corporations credit facility interest rate, redeemable at the option of the holder and retractable at the option of the Corporation;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An unlimited number of Cumulative First Preferred Shares, Series C (Preferred C Shares), carrying an 11.25% annual fixed cumulative
preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An unlimited number of Cumulative First Preferred Shares, Series D (Preferred D Shares), carrying an 11.0% annual fixed cumulative
preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An unlimited number of Cumulative First Preferred Shares, Series F (Preferred F Shares), carrying a 10.85% annual fixed cumulative
preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An unlimited number of Cumulative First Preferred Shares, Series G (Preferred G Shares), carrying a 10.85% annual fixed cumulative
preferential dividend, redeemable at the option of the holder and retractable at the option of the Corporation;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

An unlimited number of non-voting Preferred Shares, Series E (Preferred E Shares), carrying a non-cumulative dividend subsequent to the holders of
Cumulative First Preferred Shares, redeemable at the option of the holder and retractable at the option of the Corporation.



F-49



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|22. | CAPITAL STOCK (continued)
|--- | -------------------------



| | (b) | Issued and outstanding capital stock
| | --- | ------------------------------------



|                                               |  |               |             |  |        |   |         | 
|---------------------------------------------- |  | ------------- | ----------- |  | ------ | - | ------- | 
|                                               |  | Common Shares |            
|                                               |  | Number        |             |  | Amount |  
|Balance as of December 31, 2012, 2013 and 2014 |  |               | 103,251,500 |  |        | $ | 4,116.1 | 
|                                               |  |               |             |  |        |   |         | 

On September 27, 2012, the Board of Directors approved a special resolution to increase the stated
capital of the Corporations Common Shares by $3,175.0 million and to reduce the contributed surplus of the Corporation by the same amount.

On October 11, 2012, the Corporation repurchased 20,351,307 of its Common Shares held by CDP Capital dAmérique Investissement inc., a subsidiary of Caisse de dépôt et
placement du Québec, for an aggregate purchase price of $1.0 billion paid in cash. All repurchased shares were cancelled. Transaction fees of $0.1 million and the excess of $188.7 million of the purchase price over the carrying value of
the Common Shares repurchased were recorded in increase to the deficit.



| | (c) | Cumulative First Preferred Shares
| | --- | ---------------------------------

All Cumulative First Preferred Shares are owned by subsidiaries of the Corporation and are eliminated on consolidation. As of December 31, 2014, 430,000 Preferred G Shares were issued and outstanding
for an amount of $430.0 million (1,630,000 Preferred G Shares for an amount of $1,630.0 million in 2013 and 2012).



F-50



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|23. | STOCK-BASED COMPENSATION PLANS
|--- | ------------------------------



| | (a) | Quebecor plans
| | --- | --------------



| | (i) | Stock option plan
| | --- | -----------------

Under a
stock option plan established by the parent corporation, 13,000,000 of Class B Shares of the parent corporation have been set aside for directors, officers, senior employees, and other key employees of the parent corporation and its
subsidiaries. The exercise price of each option is equal to the weighted average trading price of the parent corporations Class B Shares on the Toronto Stock Exchange over the last five trading days immediately preceding the granting of
the option. Each option may be exercised during a period not exceeding 10 years from the date granted. Options usually vest as follows: 1/3 after one year, 2/3 after two years, and 100% three years after the original grant. Holders of
options under the stock option plan have the choice, when they exercise their options, of acquiring the Class B Shares at the corresponding option exercise price, or receiving a cash payment equivalent to the difference between the market value
of the underlying shares and the exercise price of the option. The Board of Directors of the parent corporation may, at its discretion, affix different vesting periods at the time of each grant.

The following table gives details on changes to outstanding options for the years ended December 31, 2014 and 2013:



|                              |  |         |           |   |                               |   |       |         |  |  |                               |  |  |   |       | 
|----------------------------- |  | ------- | --------- | - | ----------------------------- | - | ----- | ------- |  |  | ----------------------------- |  |  | - | ----- | 
|                              |  | 2014    |           |   | 2013                          |  
|                              |  | Options |           |   | Weightedaverageexercise price |   |       | Options |  |  | Weightedaverageexercise price | 
|                              |  |         |           |  
|Balance at beginning of year  |  |         | 1,070,443 |   |                               | $ | 21.22 |         |  |  | 247,484                       |  |  | $ | 17.86 | 
|Granted                       |  |         | 530,000   |   |                               |   | 26.26 |         |  |  | 822,959                       |  |  |   | 22.23 | 
|Exercised                     |  |         | (149,456  | ) |                               |   | 17.68 |         |  |  |                              |  |  |   |      | 
|Cancelled                     |  |         | (770,987  | ) |                               |   | 21.71 |         |  |  |                              |  |  |   |      | 
|                              |  |         |           |   |                               |   |       |         |  |  |                               |  |  |   |       | 
|Balance at end of year        |  |         | 680,000   |   |                               | $ | 25.37 |         |  |  | 1,070,443                     |  |  | $ | 21.22 | 
|                              |  |         |           |   |                               |   |       |         |  |  |                               |  |  |   |       | 
|                              |  |         |           |  
|Vested options at end of year |  |         |          |   |                               | $ |      |         |  |  | 149,456                       |  |  | $ | 17.68 | 
|                              |  |         |           |   |                               |   |       |         |  |  |                               |  |  |   |       | 

During the year ended December 31, 2014, 149,456 stock options of Quebecor were exercised for a cash
consideration of $1.4 million (none in 2013).

The following table gives summary information on outstanding options as of
December 31, 2014:



|                        |  |                     |         |  |                                  |  |      |                               |  |   |        |  |  |                               |   |  |  |   |   | 
|----------------------- |  | ------------------- | ------- |  | -------------------------------- |  | ---- | ----------------------------- |  | - | ------ |  |  | ----------------------------- | - |  |  | - | - | 
|                        |  | Outstanding options |         |  | Vested options                   | 
|Range of exercise price |  | Number              |         |  | Weightedaverage yearsto maturity |  |      | Weightedaverageexercise price |  |   | Number |  |  | Weightedaverageexercise price |  
|$22.23 to 30.24         |  |                     | 680,000 |  |                                  |  | 9.18 |                               |  | $ | 25.37  |  |  |                               |  |  |  | $ |  | 
|                        |  |                     |         |  |                                  |  |      |                               |  |   |        |  |  |                               |   |  |  |   |   | 



F-51



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|23. | STOCK-BASED COMPENSATION PLANS (continued)
|--- | ------------------------------------------



| | (a) | Quebecor plans (continued)
| | --- | --------------------------



| | (ii) | Mid-term stock-based compensation plan
| | ---- | --------------------------------------

Under the mid-term stock-based compensation plan, participants are entitled to receive a cash payment at the end of a three-year period based on the appreciation of
the Quebecor Class B Share price, and subject to the achievement of certain non-market performance criteria. The following table provides details of changes to outstanding units in the mid-term
stock-based compensation plan for the years ended December 31, 2014 and 2013:



|                             |  |       |            |   |                               |   |       |       |  |  |                               |   |  |   |       | 
|---------------------------- |  | ----- | ---------- | - | ----------------------------- | - | ----- | ----- |  |  | ----------------------------- | - |  | - | ----- | 
|                             |  | 2014  |            |   | 2013                          |  
|                             |  | Units |            |   | Weightedaverageexercise price |   |       | Units |  |  | Weightedaverageexercise price |  
|                             |  |       |            |  
|Balance at beginning of year |  |       | 1,131,758  |   |                               | $ | 19.92 |       |  |  | 878,573                       |   |  | $ | 15.99 | 
|Granted                      |  |       | 694,224    |   |                               |   | 26.47 |       |  |  | 590,409                       |   |  |   | 22.08 | 
|Exercised                    |  |       | (240,074   | ) |                               |   | 18.76 |       |  |  | (337,224                      | ) |  |   | 13.46 | 
|Cancelled                    |  |       | (1,184,149 | ) |                               |   | 21.86 |       |  |  |                              |   |  |   |      | 
|                             |  |       |            |   |                               |   |       |       |  |  |                               |   |  |   |       | 
|Balance at end of year       |  |       | 401,759    |   |                               | $ | 26.22 |       |  |  | 1,131,758                     |   |  | $ | 19.92 | 
|                             |  |       |            |   |                               |   |       |       |  |  |                               |   |  |   |       | 

During the year ended December 31, 2014, a cash consideration of $1.8 million was paid upon exercise
of 240,074 units ($1.9 million for 337,224 units in 2013).



| | (b) | Quebecor Media stock option plan
| | --- | --------------------------------

Under a stock option plan established by the Corporation, 6,180,140 Common Shares of the Corporation have been set aside for officers, senior employees, directors, and other key employees of the
Corporation and its subsidiaries. Each option may be exercised within a maximum period of 10 years following the date of grant at an exercise price not lower than, as the case may be, the fair market value of the Common Shares of Quebecor Media at
the date of grant, as determined by its Board of Directors (if the Common Shares of Quebecor Media are not listed on a stock exchange at the time of the grant), or the five-day weighted average market
price ending on the day preceding the date of grant of the Common Shares of the Corporation on the stock exchange(s) where such shares are listed at the time of grant. As long as the Common Shares of Quebecor Media are not listed on a recognized
stock exchange, optionees may exercise their vested options during one of the following periods: from March 1 to March 30, from June 1 to June 29, from September 1 to September 29, and from December 1 to
December 30. Holders of options under the plan have the choice at the time of exercising their options of receiving an amount in cash (equal to the difference between either the five-day weighted average
market price ending on the day preceding the date of exercise of the Common Shares of the Corporation on the stock exchange(s) where such shares are listed at the time of exercise or the fair market value of the Common Shares, as determined by the
Corporations Board of Directors, and the exercise price of their vested options) or, subject to certain stated conditions, exercise their options to purchase Common Shares of Quebecor Media at the exercise price. Except under specific
circumstances, and unless the Human Resources and Compensation Committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by the
Human Resources and Compensation Committee at the time of grant: (i) equally over five years with the first 20% vesting on the first anniversary of the date of the grant; (ii) equally over four years with the first 25% vesting on the
second anniversary of the date of grant; and (iii) equally over three years with the first 33 1/3% vesting on the third anniversary of the date of grant.



F-52



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|23. | STOCK-BASED COMPENSATION PLANS (continued)
|--- | ------------------------------------------



| | (b) | Quebecor Media stock option plan (continued)
| | --- | --------------------------------------------



The following table gives details on changes to outstanding options granted as of
December 31, 2014 and 2013:



|                              |  |         |           |   |                               |   |       |         |  |  |                               |   |  |   |       | 
|----------------------------- |  | ------- | --------- | - | ----------------------------- | - | ----- | ------- |  |  | ----------------------------- | - |  | - | ----- | 
|                              |  | 2014    |           |   | 2013                          |  
|                              |  | Options |           |   | Weightedaverageexercise price |   |       | Options |  |  | Weightedaverageexercise price |  
|                              |  |         |           |  
|Balance at beginning of year  |  |         | 1,647,309 |   |                               | $ | 52.67 |         |  |  | 1,349,007                     |   |  | $ | 45.02 | 
|Granted                       |  |         | 271,000   |   |                               |   | 63.96 |         |  |  | 921,711                       |   |  |   | 57.60 | 
|Exercised                     |  |         | (218,750  | ) |                               |   | 46.28 |         |  |  | (554,309                      | ) |  |   | 42.43 | 
|Cancelled                     |  |         | (67,600   | ) |                               |   | 58.85 |         |  |  | (69,100                       | ) |  |   | 51.03 | 
|                              |  |         |           |   |                               |   |       |         |  |  |                               |   |  |   |       | 
|Balance at end of year        |  |         | 1,631,959 |   |                               | $ | 55.15 |         |  |  | 1,647,309                     |   |  | $ | 52.67 | 
|                              |  |         |           |   |                               |   |       |         |  |  |                               |   |  |   |       | 
|                              |  |         |           |  
|Vested options at end of year |  |         | 263,823   |   |                               | $ | 46.74 |         |  |  | 186,298                       |   |  | $ | 45.12 | 
|                              |  |         |           |   |                               |   |       |         |  |  |                               |   |  |   |       | 

During the year ended December 31, 2014, 218,750 of the Corporations stock options were
exercised for a cash consideration of $3.6 million (554,309 stock options for $8.8 million in 2013).

The following
table gives summary information on outstanding options as of December 31, 2014:



|                        |  |                     |           |  |                                  |  |      |                               |  |   |        |  |  |                               |         |  |  |   |       | 
|----------------------- |  | ------------------- | --------- |  | -------------------------------- |  | ---- | ----------------------------- |  | - | ------ |  |  | ----------------------------- | ------- |  |  | - | ----- | 
|                        |  | Outstanding options |           |  | Vested options                   | 
|Range of exercise price |  | Number              |           |  | Weightedaverage yearsto maturity |  |      | Weightedaverageexercise price |  |   | Number |  |  | Weightedaverageexercise price |        
|                        |  |                     |           |  |                                 
|$30.47 to 44.45         |  |                     | 71,663    |  |                                  |  | 3.28 |                               |  | $ | 40.03  |  |  |                               | 71,663  |  |  | $ | 40.03 | 
|$45.82 to 64.89         |  |                     | 1,560,296 |  |                                  |  | 7.85 |                               |  |   | 55.84  |  |  |                               | 192,160 |  |  |   | 49.24 | 
|                        |  |                     |           |  |                                  |  |      |                               |  |   |        |  |  |                               |         |  |  |   |       | 
|$30.47 to 64.89         |  |                     | 1,631,959 |  |                                  |  | 7.65 |                               |  | $ | 55.15  |  |  |                               | 263,823 |  |  | $ | 46.74 | 
|                        |  |                     |           |  |                                  |  |      |                               |  |   |        |  |  |                               |         |  |  |   |       | 



F-53



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|23. | STOCK-BASED COMPENSATION PLANS (continued)
|--- | ------------------------------------------





| | (c) | TVA Group stock option plan
| | --- | ---------------------------

Under this stock option plan, 2,200,000 Class B Shares, non-voting, participating, without par value of TVA Group (Class B Non-Voting Shares of
TVA Group) have been set aside for senior executives and directors of TVA Group and its subsidiaries. The terms and conditions of options granted are determined by TVA Groups Human Resources and Corporate Governance
Committee. The subscription price of an option cannot be less than the closing price of Class B Shares on the Toronto Stock Exchange the day before the option is granted. Options granted prior to January 2006 usually vest equally over a
four-year period, with the first 25% vesting on the second anniversary date of the date of grant. Beginning January 2006, and unless the Human Resources and Corporate Governance Committee decides otherwise, options vest over a five-year period in accordance with one of the following vesting schedules as determined by the Human Resources and Corporate Governance Committee at the time of grant: (i) equally over five years with the
first 20% vesting on the first anniversary of the date of the grant; (ii) equally over four years with the first 25% vesting on the second anniversary of the date of grant; and (iii) equally over three years with the first 33 1/3%
vesting on the third anniversary of the date of grant. The term of an option cannot exceed 10 years. Holders of options under the plan have the choice, at the time of exercising their options, of receiving a cash payment from TVA Group equal to
the number of shares corresponding to the options exercised, multiplied by the difference between the market value of the Class B Non-Voting Shares of TVA Group and the exercise price of the option
or, subject to certain conditions, exercise their options to purchase Class B Non-Voting Shares of TVA Group at the exercise price. The market value is defined as the average closing market price of the Class B Non-Voting Shares of TVA Group for the last five trading days preceding the date on which the option was exercised.

The following table gives details on changes to outstanding options for the years ended December 31, 2014 and 2013:



|                              |  |         |          |   |                               |   |       |         |  |  |                               |   |  |   |       | 
|----------------------------- |  | ------- | -------- | - | ----------------------------- | - | ----- | ------- |  |  | ----------------------------- | - |  | - | ----- | 
|                              |  | 2014    |          |   | 2013                          |  
|                              |  | Options |          |   | Weightedaverageexercise price |   |       | Options |  |  | Weightedaverageexercise price |  
|                              |  |         |          |  
|Balance at beginning of year  |  |         | 691,076  |   |                               | $ | 16.54 |         |  |  | 819,421                       |   |  | $ | 16.34 | 
|Granted                       |  |         | 30,000   |   |                               |   | 8.90  |         |  |  |                              |   |  |   |      | 
|Cancelled                     |  |         | (69,208  | ) |                               |   | 15.32 |         |  |  | (128,345                      | ) |  |   | 15.29 | 
|Expired                       |  |         | (126,500 | ) |                               |   | 20.75 |         |  |  |                              |   |  |   |      | 
|                              |  |         |          |   |                               |   |       |         |  |  |                               |   |  |   |       | 
|Balance at end of year        |  |         | 525,368  |   |                               | $ | 15.25 |         |  |  | 691,076                       |   |  | $ | 16.54 | 
|                              |  |         |          |   |                               |   |       |         |  |  |                               |   |  |   |       | 
|                              |  |         |          |  
|Vested options at end of year |  |         | 495,368  |   |                               | $ | 15.63 |         |  |  | 691,076                       |   |  | $ | 16.54 | 
|                              |  |         |          |   |                               |   |       |         |  |  |                               |   |  |   |       | 

The following table gives summary information on outstanding options as of December 31, 2014:



|                        |  |                     |         |  |                                  |  |      |                               |  |   |        |  |  |                               |         |  |  |   |       | 
|----------------------- |  | ------------------- | ------- |  | -------------------------------- |  | ---- | ----------------------------- |  | - | ------ |  |  | ----------------------------- | ------- |  |  | - | ----- | 
|                        |  | Outstanding options |         |  | Vested options                   | 
|Range of exercise price |  | Number              |         |  | Weightedaverage yearsto maturity |  |      | Weightedaverageexercise price |  |   | Number |  |  | Weightedaverageexercise price |        
|                        |  |                     |         |  |                                 
|$8.90                   |  |                     | 30,000  |  |                                  |  | 9.58 |                               |  | $ | 8.90   |  |  |                               |        |  |  | $ |      | 
|$14.50 to 21.38         |  |                     | 495,368 |  |                                  |  | 2.15 |                               |  |   | 15.63  |  |  |                               | 495,368 |  |  |   | 15.63 | 
|                        |  |                     |         |  |                                  |  |      |                               |  |   |        |  |  |                               |         |  |  |   |       | 
|$8.90 to 21.38          |  |                     | 525,368 |  |                                  |  | 2.57 |                               |  | $ | 15.25  |  |  |                               | 495,368 |  |  | $ | 15.63 | 
|                        |  |                     |         |  |                                  |  |      |                               |  |   |        |  |  |                               |         |  |  |   |       | 



F-54



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|23. | STOCK-BASED COMPENSATION PLANS (continued)
|--- | ------------------------------------------





| | (d) | Assumptions in estimating the fair value of stock-based awards
| | --- | --------------------------------------------------------------

The fair value of stock-based awards under the stock option plans of the parent corporation, Quebecor Media and TVA Group was estimated using the Black-Scholes option pricing model. The following weighted-average assumptions were used to estimate the fair value of all outstanding stock options under the stock option plans as of December 31, 2014 and 2013:



|                        |  |          |           |   |                |  |            |           |  |  |           |  
|----------------------- |  | -------- | --------- | - | -------------- |  | ---------- | --------- |  |  | --------- | -
|December 31, 2014       |  | Quebecor |           |   | Quebecor Media |  |            | TVA Group | 
|                        |  |          |          
|Risk-free interest rate |  |          | 1.69      | % |                |  | 1.38       | %         |  |  | 1.07      | %
|Dividend yield          |  |          | 0.31      | % |                |  | 1.37       | %         |  |  |          | %
|Expected volatility     |  |          | 26.85     | % |                |  | 18.99      | %         |  |  | 32.61     | %
|Expected remaining life |  |          | 6.0 years |   |                |  | 3.58 years |           |  |  | 1.21 year |  



|                        |  |          |           |   |                |  |           |           |  |  |          |  
|----------------------- |  | -------- | --------- | - | -------------- |  | --------- | --------- |  |  | -------- | -
|December 31, 2013       |  | Quebecor |           |   | Quebecor Media |  |           | TVA Group | 
|                        |  |          |          
|Risk-free interest rate |  |          | 2.02      | % |                |  | 1.75      | %         |  |  | 1.05     | %
|Dividend yield          |  |          | 0.38      | % |                |  | 1.55      | %         |  |  |         | %
|Expected volatility     |  |          | 28.34     | % |                |  | 23.26     | %         |  |  | 32.56    | %
|Expected remaining life |  |          | 4.9 years |   |                |  | 4.0 years |           |  |  | 1.0 year |  

Except for Quebecor Media, the expected volatility is based on the historical volatility of the underlying
share price for a period equivalent to the expected remaining life of the options. Since the Common Shares of Quebecor Media are not publicly traded on a stock exchange, expected volatility is derived from the implied volatility of Quebecors
stock. The expected remaining life of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate over the expected remaining life of the option is
based on the Government of Canada yield curve in effect at the time of the valuation. Dividend yield is based on the current average yield.



| | (e) | Liability of vested options
| | --- | ---------------------------

As of December 31, 2014, the liability for all vested options was $6.3 million as calculated using the intrinsic value ($4.7 million as of December 31, 2013).



| | (f) | Consolidated compensation charge
| | --- | --------------------------------

For the year ended December 31, 2014, a consolidated charge related to all stock-based compensation plans was recorded in the amount of $8.0 million
($13.9 million in 2013 and $8.7 million in 2012), of which a charge of $0.9 million ($0.5 million in 2013 and net reversal of the consolidated charge $0.1 million in 2012) is presented as part of discontinued operations.



F-55



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|24. | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|--- | ---------------------------------------------



|                                  |  |                                                    |      |   |                 |   |       |                      |  |   |        |   |  |   |       |  
|--------------------------------- |  | -------------------------------------------------- | ---- | - | --------------- | - | ----- | -------------------- |  | - | ------ | - |  | - | ----- | -
|                                  |  | Translation of netinvestments inforeign operations |      |   | Cash flowhedges |   |       | Definedbenefit plans |  |   | Total  |  
|Balance as of December 31, 2011   |  | $                                                  | (1.3 | ) |                 | $ | 16.6  |                      |  | $ | (90.1  | ) |  | $ | (74.8 | )
|Other comprehensive (loss) income |  |                                                    | (1.4 | ) |                 |   | 21.2  |                      |  |   | (12.1  | ) |  |   | 7.7   |  
|                                  |  |                                                    |      |   |                 |   |       |                      |  |   |        |   |  |   |       |  
|Balance as of December 31, 2012   |  |                                                    | (2.7 | ) |                 |   | 37.8  |                      |  |   | (102.2 | ) |  |   | (67.1 | )
|Other comprehensive (loss) income |  |                                                    | 4.4  |   |                 |   | (59.7 | )                    |  |   | 91.6   |   |  |   | 36.3  |  
|                                  |  |                                                    |      |   |                 |   |       |                      |  |   |        |   |  |   |       |  
|Balance as of December 31, 2013   |  |                                                    | 1.7  |   |                 |   | (21.9 | )                    |  |   | (10.6  | ) |  |   | (30.8 | )
|Other comprehensive income (loss) |  |                                                    | (1.7 | ) |                 |   | (17.5 | )                    |  |   | (34.6  | ) |  |   | (53.8 | )
|                                  |  |                                                    |      |   |                 |   |       |                      |  |   |        |   |  |   |       |  
|Balance as of December 31, 2014   |  | $                                                  |     |   |                 | $ | (39.4 | )                    |  | $ | (45.2  | ) |  | $ | (84.6 | )
|                                  |  |                                                    |      |   |                 |   |       |                      |  |   |        |   |  |   |       |  

No significant amount is expected to be reclassified in income over the next 12 months in connection
with derivatives designated as cash flow hedges. The balance is expected to reverse over a 9 1/2-year period.



|25. | COMMITMENTS
|--- | -----------

Leases
and other commitments

The Corporation rents premises and equipment under operating leases and has entered into long-term commitments to purchase services, capital equipment, broadcasting rights, and to pay royalties. Rent payments include an amount of $65.6 million for future payments to the parent company. The
operating leases have various terms, escalation clauses, purchase options and renewal rights. The minimum payments for the coming years are as follows:



|                    |  |                       |       |  |                         |   |       |        |  |   |                  |  |  |   |     | 
|------------------- |  | --------------------- | ----- |  | ----------------------- | - | ----- | ------ |  | - | ---------------- |  |  | - | --- | 
|                    |  | Continuing operations |       |  | Discontinued operations |  
|                    |  | Leases                |       |  | Othercommitments        |   |       | Leases |  |   | Othercommitments | 
|2015                |  | $                     | 53.9  |  |                         | $ | 274.9 |        |  | $ | 5.7              |  |  | $ | 1.4 | 
|2016 to 2019        |  |                       | 139.2 |  |                         |   | 561.2 |        |  |   | 11.5             |  |  |   | 2.1 | 
|2020 and thereafter |  |                       | 135.5 |  |                         |   | 629.3 |        |  |   | 1.2              |  |  |   |    | 

The Corporation and its subsidiaries operating lease expenses amounted to $73.6 million in 2014
($76.9 million in 2013 and $76.8 million in 2012), of which $7.2 million ($9.9 million in 2013 and $8.8 million in 2012) is presented as part of discontinued operations.

Business acquisition

In November 2014, the Media segment, through TVA Group, reached an agreement to acquire 15 magazine titles in Canada for a cash consideration of $55.5 million, subject to authorization by the
Competition Bureau, which was received on March 2, 2015.



F-56



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|26. | GUARANTEES
|--- | ----------

In the normal
course of business, the Corporation enters into numerous agreements containing guarantees, including the following:

Operating leases

The Corporation has guaranteed a portion of the residual values of certain assets under operating leases for the benefit of the lessor. Should the Corporation terminate these leases prior to term (or at
the end of the lease terms) and should the fair value of the assets be less than the guaranteed residual value, then the Corporation must, under certain conditions, compensate the lessor for a portion of the shortfall. In addition, the Corporation
has provided guarantees to the lessor of certain premises leases with expiry dates through 2018. Should the lessee default under the agreement, the Corporation must, under certain conditions, compensate the lessor. As of
December 31, 2014, the maximum exposure with respect to these guarantees was $14.5 million and no liability has been recorded in the consolidated balance sheet.

Business and asset disposals

In the sale of all or part of a business or
an asset, in addition to possible indemnification relating to failure to perform covenants and breach of representations or warranties, the Corporation may agree to indemnify against claims related to the past conduct of the business. Typically, the
term and amount of such indemnification will be limited by the agreement. The nature of these indemnification agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay to guaranteed parties. The
Corporation has not accrued any amount in respect of these items in the consolidated balance sheet.

Outsourcing companies
and suppliers

In the normal course of its operations, the Corporation enters into contractual agreements with outsourcing
companies and suppliers. In some cases, the Corporation agrees to provide indemnifications in the event of legal procedures initiated against them. In other cases, the Corporation provides indemnification to counterparties for damages resulting from
the outsourcing companies and suppliers. The nature of the indemnification agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay. No amount has been accrued in the consolidated balance sheet
with respect to these indemnifications.

Other

One of the subsidiary of the Corporation as a franchiser has provided guarantees should franchisees, in their retail activities, default certain purchase agreements. The nature of the indemnification
agreements prevents the Corporation from estimating the maximum potential liability it could be required to pay. No amount has been accrued in the consolidated balance sheet with respect to these guarantees.



F-57



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
|--- | ---------------------------------------------------

The Corporations financial risk management policies have been established in order to identify and analyze the risks faced by the Corporation, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and in the Corporations activities.

The Corporation uses a number of financial instruments, mainly cash and cash equivalents, accounts receivable, long-term investments, bank indebtedness, trade payables, accrued liabilities, long-term debt
and derivative financial instruments. As a result of their use of financial instruments, the Corporation and its subsidiaries are exposed to credit risk, liquidity risk and market risks relating to foreign exchange fluctuations and interest rate
fluctuations.

In order to manage its foreign exchange and interest rate risks, the Corporation and its subsidiaries use
derivative financial instruments (i) to set in CAN dollars future payments on debts denominated in U.S. dollars (interest and principal) and certain purchases of inventories and other capital expenditures denominated in a foreign
currency, (ii) to achieve a targeted balance of fixed- and floating-rate debts, and (iii) to lock-in the value of certain derivative financial instruments through offsetting transactions. The Corporation and its subsidiaries do not intend
to settle their derivative financial instruments prior to their maturity as none of these instruments is held or issued for speculative purposes.



| | (a) | Description of derivative financial instruments
| | --- | -----------------------------------------------



| | (i) | Foreign exchange forward contracts
| | --- | ----------------------------------



|                 |  |                                                  |        |  |                     |     |       |                       |  |     |       | 
|---------------- |  | ------------------------------------------------ | ------ |  | ------------------- | --- | ----- | --------------------- |  | --- | ----- | 
|Maturity         |  | CAN dollaraverageexchange rateper one U.S.dollar |        |  | Notionalamount sold |     |       | Notionalamount bought | 
|                 |  |                                                  |       
|Quebecor Media   |  |                                                  |        |  |                     |     |       |                       |  |     |       | 
|20161            |  |                                                  | 1.0154 |  |                     | US$ | 320.0 |                       |  | $   | 324.9 | 
|                 |  |                                                  |       
|Videotron        |  |                                                  |        |  |                     |     |       |                       |  |     |       | 
|Less than 1 year |  |                                                  | 1.1198 |  |                     | $   | 106.3 |                       |  | US$ | 94.9  | 
|20172            |  |                                                  | 1.1204 |  |                     | US$ | 260.0 |                       |  | $   | 291.3 | 



| | (ii) | Interest rate swaps
| | ---- | -------------------



|              |  |                |      |  |             |  |                           |           |  |  |               |   |  |  |                            | 
|------------- |  | -------------- | ---- |  | ----------- |  | ------------------------- | --------- |  |  | ------------- | - |  |  | -------------------------- | 
|Maturity      |  | Notionalamount |      |  | Pay/receive |  |                           | Fixedrate |  |  | Floating rate |  
|              |  |                |      | 
|TVA Group     |  |                |      |  |             |  |                           |           |  |  |               |   |  |  |                            | 
|December 2017 |  | $              | 44.0 |  |             |  | Pay fixed/Receivefloating |           |  |  | 2.03          | % |  |  | Bankersacceptances1 month | 



F-58



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------



| | (a) | Description of derivative financial instruments (continued)
| | --- | -----------------------------------------------------------



| | (iii) | Cross-currency interest rate swaps
| | ----- | ----------------------------------





|                              |  |                    |              |  |                |     |       |                                                    |  |  |                                                                          |  |  |  |        | 
|----------------------------- |  | ------------------ | ------------ |  | -------------- | --- | ----- | -------------------------------------------------- |  |  | ------------------------------------------------------------------------ |  |  |  | ------ | 
|Hedged item                   |  | Hedging instrument |             
|                              |  | Period covered     |              |  | Notionalamount |     |       | Annualinterest rateon notionalamount inCAN dollars |  |  | CAN dollarexchange rateon interestand
capitalpayments perone U.S. dollar | 
|                              |  |                    |              | 
|Quebecor Media                |  |                    |              |  |                |     |       |                                                    |  |  |                                                                          |  |  |  |        | 
|5.750% Senior Notes due 20231 |  |                    | 2007 to 2016 |  |                | US$ | 320.0 |                                                    |  |  | 7.69%                                                                    |  |  |  | 0.9977 | 
|5.750% Senior Notes due 2023  |  |                    | 2016 to 2023 |  |                | US$ | 431.3 |                                                    |  |  | 7.27%                                                                    |  |  |  | 0.9792 | 
|5.750% Senior Notes due 2023  |  |                    | 2012 to 2023 |  |                | US$ | 418.7 |                                                    |  |  | 6.85%                                                                    |  |  |  | 0.9759 | 
|Term loan B                 |  |                    | 2013 to 2020 |  |                | US$ | 345.6 |                                                    |  |  | Bankersacceptances3 months +2.77%                                       |  |  |  | 1.0346 | 



| | 1 | The Corporation initially entered into these cross-currency interest rate swaps to hedge the foreign currency risk exposure under its 7.75% Senior
Notes due in 2016 redeemed in 2012. These swaps are now used to set in CAN dollars all coupon payments through 2016 on US$431.3 million of notional amount under its 5.75% Senior Notes due 2023 and issued on October 11, 2012. In conjunction with
the repurposing of these swaps, the Corporation has entered into US$320.0 million offsetting foreign exchange forward contracts to lock-in the value of its hedging position related to the March 15, 2016 notional exchange.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-59



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------



| | (a) | Description of derivative financial instruments (continued)
| | --- | -----------------------------------------------------------



| | (iii) | Cross-currency interest rate swaps (continued)
| | ----- | ----------------------------------------------





|                              |  |                    |              |  |                |     |       |                                                    |  |  |                                                                          |   |  |  |        | 
|----------------------------- |  | ------------------ | ------------ |  | -------------- | --- | ----- | -------------------------------------------------- |  |  | ------------------------------------------------------------------------ | - |  |  | ------ | 
|Hedged item                   |  | Hedging instrument |             
|                              |  | Periodcovered      |              |  | Notionalamount |     |       | Annualinterest rateon notionalamount inCAN dollars |  |  | CAN dollarexchange rateon
interestand capitalpayments
perone U.S. dollar |  
|                              |  |                    |              | 
|Videotron                     |  |                    |              |  |                |     |       |                                                    |  |  |                                                                          |   |  |  |        | 
|6.375% Senior Notes due 2015  |  |                    | 2005 to 2015 |  |                | US$ | 175.0 |                                                    |  |  | 5.98                                                                     | % |  |  | 1.1781 | 
|9.125% Senior Notes due 2018  |  |                    | 2008 to 2018 |  |                | US$ | 75.0  |                                                    |  |  | 9.64                                                                     | % |  |  | 1.0215 | 
|5.000% Senior Notes due 2022  |  |                    | 2014 to 2022 |  |                | US$ | 543.1 |                                                    |  |  | 6.01                                                                     | % |  |  | 0.9983 | 
|5.000% Senior Notes due 2022  |  |                    | 2012 to 2022 |  |                | US$ | 256.9 |                                                    |  |  | 5.81                                                                     | % |  |  | 1.0016 | 
|5.375% Senior Notes due 20242 |  |                    | 2008 to 2017 |  |                | US$ | 260.0 |                                                    |  |  | 9.21                                                                     | % |  |  | 1.2965 | 
|5.375% Senior Notes due 2024  |  |                    | 2014 to 2024 |  |                | US$ | 158.6 |                                                    |  |  | Bankersacceptances3 months + 2.67                                       | % |  |  | 1.1034 | 
|5.375% Senior Notes due 2024  |  |                    | 2017 to 2024 |  |                | US$ | 441.4 |                                                    |  |  | 5.62                                                                     | % |  |  | 1.1039 | 



| | 2 | Videotron initially entered into these cross-currency interest rate swaps to hedge the foreign currency risk exposure under its 9.125% Senior Notes due
2018 redeemed in 2014. These swaps are now used to set in CAN dollars all coupon payments through 2017 on US$441.4 million of notional amount under its 5.375% Senior Notes due 2024 and issued on April 9, 2014. In conjunction with the
repurposing of these swaps, Videotron has entered into US$260.0 million offsetting foreign exchange forward contracts to lock-in the value of its hedging position related to the December 15, 2017 notional exchange.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Certain cross-currency interest rate swaps entered into by the Corporation and its subsidiaries include an option that allows each party
to unwind the transaction on a specific date at the then settlement amount.



| | (b) | Fair value of financial instruments
| | --- | -----------------------------------

In accordance with IFRS 7, Financial Instruments: Disclosures, the Corporation has considered the following fair value hierarchy that reflects the significance of the inputs used in measuring its
other financial instruments accounted for at fair value in the consolidated balance sheets:



|                  |  |                                                                                                                                                                                     
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        Level 1: |  | quoted prices (unadjusted) in active markets for identical assets or liabilities;                                                                                                   
|                  | 
|        Level 2: |  | inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices);
and
|                  | 
|        Level 3: |  | inputs that are not based on observable market data (unobservable inputs).                                                                                                          

The fair value of long-term debt is estimated based on quoted market prices when available or on valuation
models using level 1 and level 2 inputs. When the Corporation uses valuation models, the fair value is estimated using discounted cash flows using year-end market yields or the market value of similar
instruments with the same maturity.



F-60



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------



| | (b) | Fair value of financial instruments (continued)
| | --- | -----------------------------------------------



The fair value of cash equivalents and bank indebtedness classified as held for trading
and accounted for at their fair value on the consolidated balance sheets, is determined using level 2 inputs.

The fair
value of derivative financial instruments recognized on the consolidated balance sheets is estimated as per the Corporations valuation models. These models project future cash flows and discount the future amounts to a present value using the
contractual terms of the derivative instrument and factors observable in external market data, such as period-end swap rates and foreign exchange rates (level 2 inputs). An adjustment is also included to
reflect non-performance risk impacted by the financial and economic environment prevailing at the date of the valuation in the recognized measure of the fair value of the derivative instruments by applying a
credit default premium estimated using a combination of observable and unobservable inputs in the market (level 3 inputs) to the net exposure of the counterparty or the Corporation. Derivative financial instruments are classified as
level 2.

The fair value of early settlement options recognized as embedded derivatives is determined by option pricing
models using level 2 market inputs, including volatility, discount factors and underlying instruments adjusted implicit interest rate and credit premium.

The carrying value and fair value of long term debt and derivative financial instruments as of December 31, 2014 and 2013 are as follows:



|                                    |  |               |          |   |            |   |          |               |  |   |            |   |  |   |          |  
|----------------------------------- |  | ------------- | -------- | - | ---------- | - | -------- | ------------- |  | - | ---------- | - |  | - | -------- | -
|                                    |  | 2014          |          |   | 2013       |  
|Asset (liability)                   |  | Carryingvalue |          |   | Fair value |   |          | Carryingvalue |  |   | Fair value |  
|                                    |  |               |          |  
|Long-term debt1 2                   |  | $             | (5,250.0 | ) |            | $ | (5,368.1 | )             |  | $ | (5,040.2   | ) |  | $ | (5,099.6 | )
|                                    |  |               |          |  
|Derivative financial instruments3   |  |               |          |   |            |   |          |               |  |   |            |   |  |   |          |  
|Early settlement options            |  |               | 8.2      |   |            |   | 8.2      |               |  |   | 14.5       |   |  |   | 14.5     |  
|Foreign exchange forward contracts4 |  |               | 4.2      |   |            |   | 4.2      |               |  |   | 1.8        |   |  |   | 1.8      |  
|Interest rate swaps                 |  |               | (0.5     | ) |            |   | (0.5     | )             |  |   |           |   |  |   |         |  
|Cross-currency interest rate swaps4 |  |               | 294.4    |   |            |   | 294.4    |               |  |   | (53.2      | ) |  |   | (53.2    | )



| | 1 | The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest risk,
embedded derivatives and financing fees.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2 | The fair value of the long-term debt does not include the fair value of early settlement options, which is presented separately in the table.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 3 | The fair value of derivative financial instruments designated as hedges is an asset position of $298.6 million as of December 31, 2014 (an asset
position of $18.6 million as of December 31, 2013).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4 | The value of foreign exchange forward contracts entered into to lock-in the value of existing hedging positions is netted from the value of the offset
financial instruments.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-61



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------





| | (c) | Credit risk management
| | --- | ----------------------

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial asset fails to meet its
contractual obligations.

In the normal course of business, the Corporation continuously monitors the financial condition of
its customers and reviews the credit history of each new customer. As of December 31, 2014, no customer balance represented a significant portion of the Corporations consolidated trade receivables. The Corporation establishes an
allowance for doubtful accounts based on the specific credit risk of its customers and historical trends. As of December 31, 2014, 8.5% of trade receivables were 90 days past their billing date (9.8% as of
December 31, 2013) of which 57.3% had an allowance for doubtful accounts (46.5% as of December 31, 2013).

The
following table shows changes to the allowance for doubtful accounts for the years ended December 31, 2014 and 2013:



|                                         |  |      |       |   |      |   |       |  
|---------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                                         |  | 2014 |       |   | 2013 |  
|                                         |  |     
|Balance as of beginning of year          |  | $    | 28.4  |   |      | $ | 29.6  |  
|Charged to income                        |  |      | 32.1  |   |      |   | 41.3  |  
|Utilization                              |  |      | (34.5 | ) |      |   | (42.5 | )
|Reclassification to assets held for sale |  |      | (4.2  | ) |      |   |      |  
|                                         |  |      |       |   |      |   |       |  
|Balance as of end of year                |  | $    | 21.8  |   |      | $ | 28.4  |  
|                                         |  |      |       |   |      |   |       |  

The Corporation believes that its product lines and the diversity of its customer base are instrumental in
reducing its credit risk, as well as the impact of fluctuations in product-line demand. The Corporation does not believe that it is exposed to an unusual level of customer credit risk.

As a result of their use of derivative financial instruments, the Corporation and its subsidiaries are exposed to the risk of non-performance by a third party. When the Corporation and its subsidiaries enter into derivative contracts, the counterparties (either foreign or Canadian) must have credit ratings at least in accordance with the
Corporations risk management policy and are subject to concentration limits. These credit ratings and concentration limits are monitored on an ongoing basis but at least quarterly.



F-62



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------





| | (d) | Liquidity risk management
| | --- | -------------------------

Liquidity risk is the risk that the Corporation and its subsidiaries will not be able to meet their financial obligations as they fall due
or the risk that those financial obligations will have to be met at excessive cost. The Corporation and its subsidiaries manage this exposure through staggered debt maturities. The weighted average term of the Corporations consolidated debt
was approximately 7.3 years as of December 31, 2014 (7.0 years as of December 31, 2013).

The
Corporations management believes that cash flows and available sources of financing should be sufficient to cover committed cash requirements for capital investments, working capital, interest payments, debt repayments, pension plan
contributions, and dividends in the future. The Corporation has access to cash flows generated by its subsidiaries through dividends (or distributions) and cash advances paid by its wholly owned subsidiaries.

As of December 31, 2014, material contractual obligations related to financial instruments included capital repayment and interest on
long-term debt and obligations related to derivative instruments, less estimated future receipts on derivative instruments. These obligations and their maturities are as follows:



|                                     |  |       |         |   |                 |   |         |           |  |   |           |  |  |                |       |   |  |   |         |  
|------------------------------------ |  | ----- | ------- | - | --------------- | - | ------- | --------- |  | - | --------- |  |  | -------------- | ----- | - |  | - | ------- | -
|                                     |  | Total |         |   | Less than1 year |   |         | 1-3 years |  |   | 3-5 years |  |  | 5 yearsor more |      
|                                     |  |       |         |   |                
|Bank indebtedness                    |  | $     | 4.5     |   |                 | $ | 4.5     |           |  | $ |          |  |  | $              |      |   |  | $ |        |  
|Accounts payable and accrued charges |  |       | 643.2   |   |                 |   | 643.2   |           |  |   |          |  |  |                |      |   |  |   |        |  
|Long-term debt1                      |  |       | 5,250.0 |   |                 |   | 229.1   |           |  |   | 39.5      |  |  |                | 162.4 |   |  |   | 4,819.0 |  
|Interest payments2                   |  |       | 2,179.5 |   |                 |   | 264.4   |           |  |   | 578.6     |  |  |                | 561.4 |   |  |   | 775.1   |  
|Derivative instruments3              |  |       | (308.9  | ) |                 |   | 4.7     |           |  |   | 51.0      |  |  |                | (8.2  | ) |  |   | (356.4  | )
|                                     |  |       |         |   |                 |   |         |           |  |   |           |  |  |                |       |   |  |   |         |  
|Total                                |  | $     | 7,768.3 |   |                 | $ | 1,145.9 |           |  | $ | 669.1     |  |  | $              | 715.6 |   |  | $ | 5,237.7 |  
|                                     |  |       |         |   |                 |   |         |           |  |   |           |  |  |                |       |   |  |   |         |  



| | 1 | The carrying value of long-term debt excludes adjustments to record changes in the fair value of long-term debt related to hedged interest risk,
embedded derivatives and financing fees.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2 | Estimate of interest payable on long-term debt, based on interest rates, hedging of interest rates and hedging of foreign exchange rates as of
December 31, 2014.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3 | Estimated future receipts, net of future disbursements, on derivative financial instruments related to foreign exchange hedging.
| | - | --------------------------------------------------------------------------------------------------------------------------------



| | (e) | Market risk
| | --- | -----------

Market risk
is the risk that changes in market prices due to foreign exchange rates, interest rates and/or equity prices will affect the value of the Corporations financial instruments. The objective of market risk management is to mitigate and control
exposures within acceptable parameters while optimizing the return on risk.

Foreign currency risk

Most of the Corporations consolidated revenues and expenses, other than interest expense on U.S.-dollar-denominated debt, purchases of set-top boxes, handsets and cable modems and certain capital expenditures, are received or denominated in CAN dollars. A
significant portion of the interest, principal and premium, if any, payable on its debt is payable in U.S. dollars. The Corporation and its subsidiaries have entered into transactions to hedge the foreign currency risk exposure on their U.S.-dollar-denominated debt obligations outstanding as of December 31, 2014, to hedge their exposure on certain purchases of
set-top boxes, handsets, cable modems and capital expenditures, and to lock-in the value of certain derivative financial instruments through offsetting transactions. Accordingly, the Corporations
sensitivity to variations in foreign exchange rates is economically limited.



F-63



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------



| | (e) | Market risk (continued)
| | --- | -----------------------



Foreign currency risk (continued)



The following table summarizes the estimated sensitivity on income and other
comprehensive income, before income tax, of a variance of $0.10 in the year-end exchange rate of a CAN dollar per one U.S. dollar as of December 31, 2014:



|                                                                                                |  |        |      |   |                          |   |       |  
|----------------------------------------------------------------------------------------------- |  | ------ | ---- | - | ------------------------ | - | ----- | -
|Increase (decrease)                                                                             |  | Income |      |   | Othercomprehensiveincome |  
|                                                                                                |  |       
|Increase of $0.10                                                                               |  |        |      |   |                          |   |       |  
|U.S.-dollar-denominated accounts payable                                                        |  | $      | (1.0 | ) |                          | $ |      |  
|Gain on valuation and translation of financial instruments and derivative financial instruments |  |        | 2.7  |   |                          |   | 49.5  |  
|                                                                                                |  |       
|Decrease of $0.10                                                                               |  |        |      |   |                          |   |       |  
|U.S.-dollar-denominated accounts payable                                                        |  |        | 1.0  |   |                          |   |      |  
|Gain on valuation and translation of financial instruments and derivative financial instruments |  |        | (2.7 | ) |                          |   | (49.5 | )

Interest rate risk

Some of the Corporations and its subsidiaries bank credit facilities bear interest at floating rates based on the following reference rates: (i) Bankers acceptance rate,
(ii) LIBOR, (iii) Canadian prime rate, and (iv) U.S. prime rate. The Senior Notes issued by the Corporation and its subsidiaries bear interest at fixed rates. The Corporation and its subsidiaries have entered into cross-currency
interest rate swap agreements in order to manage interest rate risk exposure. As of December 31, 2014, after taking into account the hedging instruments, long-term debt was comprised of 83.2%
fixed-rate debt (82.6% in 2013) and 16.8% floating-rate debt (17.4% in 2013).

The estimated sensitivity on interest
payments, of a 100 basis-point variance in the year-end Canadian Bankers acceptance rate as of December 31, 2014 is $8.2 million.

The estimated sensitivity on income and other comprehensive income, before income tax, of a
100 basis-point variance in the discount rate used to calculate the fair value of financial instruments as of December 31, 2014, as per the Corporations valuation models, is as follows:



|                             |  |        |      |   |                          |   |       |  
|---------------------------- |  | ------ | ---- | - | ------------------------ | - | ----- | -
|Increase (decrease)          |  | Income |      |   | Othercomprehensiveincome |  
|                             |  |       
|Increase of 100 basis points |  | $      | 0.8  |   |                          | $ | (22.2 | )
|Decrease of 100 basis points |  |        | (0.8 | ) |                          |   | 22.2  |  



F-64



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|27. | FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
|--- | ---------------------------------------------------------------



| | (f) | Capital management
| | --- | ------------------

The
Corporations primary objective in managing capital is to maintain an optimal capital base in order to support the capital requirements of its various businesses, including growth opportunities.

In managing its capital structure, the Corporation takes into account the asset characteristics of its subsidiaries and planned
requirements for funds, leveraging their individual borrowing capacities in the most efficient manner to achieve the lowest cost of financing. Management of the capital structure involves the issuance of new debt, the repayment of existing debt
using cash flows generated by operations, and the level of distributions to shareholders. The Corporation has not significantly changed its strategy regarding the management of its capital structure since the last financial year.

The Corporations capital structure is composed of equity, bank indebtedness, long-term debt, net assets and liabilities related to
derivative financial instruments, less cash and cash equivalents. The capital structure as of December 31, 2014 and 2013 is as follows:



|                                 |  |      |         |   |      |   |         |  
|-------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                 |  | 2014 |         |   | 2013 |  
|                                 |  |     
|Bank indebtedness                |  | $    | 4.5     |   |      | $ |        |  
|                                 |  |     
|Long-term debt                   |  |      | 5,201.8 |   |      |   | 4,976.0 |  
|Derivative financial instruments |  |      | (298.1  | ) |      |   | 51.4    |  
|Cash and cash equivalents        |  |      | (395.3  | ) |      |   | (476.6  | )
|                                 |  |      |         |   |      |   |         |  
|Net liabilities                  |  |      | 4,512.9 |   |      |   | 4,550.8 |  
|Equity                           |  | $    | 1,885.3 |   |      | $ | 1,956.8 |  
|                                 |  |      |         |   |      |   |         |  

The Corporation is not subject to any externally imposed capital requirements other than certain
restrictions under the terms of its borrowing agreements, which relate, among other things, to permitted investments, inter-corporation transactions, the declaration and payment of dividends or other
distributions.



|28. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

Key management personnel compensation

Key management personnel comprise members of the Board of Directors and key senior management of the Corporation and its main subsidiaries. Their compensation is as follows:



|                                 |  |      |      |  |      |   |      |      |  |   |      | 
|-------------------------------- |  | ---- | ---- |  | ---- | - | ---- | ---- |  | - | ---- | 
|                                 |  | 2014 |      |  | 2013 |   |      | 2012 | 
|                                 |  |      |     
|Salaries and short-term benefits |  | $    | 10.4 |  |      | $ | 9.2  |      |  | $ | 7.7  | 
|Share-based compensation         |  |      | 1.2  |  |      |   | 10.6 |      |  |   | 5.3  | 
|Other long-term benefits         |  |      | 7.0  |  |      |   | 2.5  |      |  |   | 2.7  | 
|                                 |  |      |      |  |      |   |      |      |  |   |      | 
|                                 |  | $    | 18.6 |  |      | $ | 22.3 |      |  | $ | 15.7 | 
|                                 |  |      |      |  |      |   |      |      |  |   |      | 



F-65



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|28. | RELATED PARTY TRANSACTIONS (continued)
|--- | --------------------------------------



Operating transactions

During the year ended December 31, 2014, the Corporation and its subsidiaries made purchases and incurred rent charges with the
parent corporation and affiliated companies in the amount of $11.7 million ($12.1 million in 2013 and $14.4 million in 2012), which are included in purchase of goods and services. The Corporation and its subsidiaries made sales to an
affiliated corporation in the amount of $3.3 million ($3.5 million in 2013 and $3.8 million in 2012). These transactions were accounted for at the consideration agreed between parties.

Management arrangements

The parent corporation has entered into management arrangements with the Corporation. Under these management arrangements, the parent corporation and the Corporation provide management services to each
other on a cost-reimbursement basis. The expenses subject to reimbursement include the salaries of the Corporations executive officers, who also serve as executive officers of the parent corporation. In
2014, the Corporation received an amount of $2.2 million, which is included as a reduction in employee costs ($1.8 million in 2013 and $1.7 million in 2012), and incurred management fees of $2.0 million ($2.0 million
in 2013 and $1.1 million in 2012) with the shareholders.

Tax transactions

In 2014, the parent corporation transferred $12.5 million of non-capital losses ($29.0 million in 2013 and $43.4 million in 2012) to the
Corporation and its subsidiaries in exchange for a total cash consideration of $3.1 million ($6.9 million in 2013 and $10.2 million in 2012). This transaction was concluded on terms equivalent to those that prevail on an arms length basis
and was accounted for at the consideration agreed between the parties. As a result, the Corporation recorded a reduction of $0.3 million in its income tax expense in 2014 ($0.9 million in 2013 and $1.5 million in 2012).



|29. | PENSION PLANS AND POSTRETIREMENT BENEFITS
|--- | -----------------------------------------

The Corporation maintains various flat-benefit plans, various final-pay plans with indexation features from zero to 2%, and defined contribution plans. The Corporation also provides postretirement
benefits to eligible retired employees. The pension plans of the Corporation are registered with a Québec or federal regulatory authority.

The Corporations funding policy for its funded pension plans is to maintain its contribution at a level sufficient to cover benefits and to meet requirements of the applicable regulations and plan
provisions that govern the funding of the plans. These provisions establish, among others, the future payment of amortization payments when the degree of solvability of the pension plans is less than 100% as defined by the relevant Québec and
federal laws. Payments are determined by an actuarial report performed by an independent company at least every three years or annually, according to the applicable laws and in accordance with provisions of plans.



F-66



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|29. | PENSION PLANS AND POSTRETIREMENT BENEFITS (continued)
|--- | -----------------------------------------------------



By their design, the defined benefit plans expose the Corporation to the typical risks
faced by defined benefit plans, such as investment performance, changes to the discount rates used to value the obligation, longevity of plan participants, and future inflation. The administration of the plans is assured by pension committees
composed of members of the plans, independent members of the Corporations management, or the Corporation in accordance with the provisions of the plans. Under the Corporations rules of governance, the approbation and oversight of the
defined benefit plan policies are performed at different levels through the pension committees, the Corporations management, or the Audit Committee. The risk management of pension plans is also performed under the leadership of these
committees at various levels. The custody of securities and management of securities transactions are assigned to trustees within a mandate given by the pension committee or the Corporation, as the case may be. Policies include those on investment
objectives, risk mitigation strategies and the mandate to hire investment fund managers and monitor their work and performance. The benefit pension plans are monitored on an ongoing basis to assess the benefit, funding and investment policies,
financial status, and the Corporations funding requirement.

The following tables show a reconciliation of the changes in
the plans benefit obligations and the fair value of plan assets for the years ended December 31, 2014 and 2013:



|                                               |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|---------------------------------------------- |  | ---------------- | ------- | - | ----------------------- | - | ------- | ---- |  | - | ---- | - |  | - | ---- | -
|                                               |  | Pension benefits |         |   | Postretirement benefits |  
|                                               |  | 2014             |         |   | 2013                    |   |         | 2014 |  |   | 2013 |  
|                                               |  |                  |         |  
|Change in benefit obligations                  |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|Benefit obligations at beginning of year       |  | $                | 979.6   |   |                         | $ | 1,006.5 |      |  | $ | 54.3 |   |  | $ | 60.6 |  
|Service costs                                  |  |                  | 31.4    |   |                         |   | 38.6    |      |  |   | 1.1  |   |  |   | 1.3  |  
|Interest costs                                 |  |                  | 50.3    |   |                         |   | 49.3    |      |  |   | 2.6  |   |  |   | 2.5  |  
|Plan participants contributions               |  |                  | 14.6    |   |                         |   | 15.0    |      |  |   |     |   |  |   |     |  
|Actuarial loss (gain) arising from:            |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|Demographic assumptions                        |  |                  | 12.1    |   |                         |   | 25.9    |      |  |   | 0.4  |   |  |   | 2.1  |  
|Financial assumptions                          |  |                  | 136.1   |   |                         |   | (89.4   | )    |  |   | 4.8  |   |  |   | (5.5 | )
|Participant experience                         |  |                  | (2.4    | ) |                         |   | (13.0   | )    |  |   | 3.5  |   |  |   | (2.5 | )
|Benefits and settlements paid                  |  |                  | (53.5   | ) |                         |   | (54.4   | )    |  |   | (1.5 | ) |  |   | (1.4 | )
|Plan amendments and other                      |  |                  | 1.1     |   |                         |   | 1.1     |      |  |   |     |   |  |   | (2.8 | )
|                                               |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|Benefit obligations at end of year             |  | $                | 1,169.3 |   |                         | $ | 979.6   |      |  | $ | 65.2 |   |  | $ | 54.3 |  
|                                               |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|                                               |  |                  |         |  
|Change in plan assets                          |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|Fair value of plan assets at beginning of year |  | $                | 976.7   |   |                         | $ | 815.6   |      |  | $ |     |   |  | $ |     |  
|Actual return on plan assets                   |  |                  | 118.7   |   |                         |   | 129.5   |      |  |   |     |   |  |   |     |  
|Employer contributions                         |  |                  | 59.1    |   |                         |   | 71.0    |      |  |   | 1.5  |   |  |   | 1.4  |  
|Plan participants contributions               |  |                  | 14.6    |   |                         |   | 15.0    |      |  |   |     |   |  |   |     |  
|Benefits and settlements paid                  |  |                  | (53.5   | ) |                         |   | (54.4   | )    |  |   | (1.5 | ) |  |   | (1.4 | )
|                                               |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  
|Fair value of plan assets at end of year       |  | $                | 1,115.6 |   |                         | $ | 976.7   |      |  | $ |     |   |  | $ |     |  
|                                               |  |                  |         |   |                         |   |         |      |  |   |      |   |  |   |      |  



F-67



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|29. | PENSION PLANS AND POSTRETIREMENT BENEFITS (continued)
|--- | -----------------------------------------------------



As of December 31, 2014, the weighted average duration of defined benefit
obligation was 16.7 years (15.7 years in 2013). The Corporation expects future benefit payments of $53.8 million in 2015.

The
Corporations investment strategy for plan assets takes into account a number of factors, including the time horizon of the pension plans obligations and the investment risk. For each of the plans, an allocation range by asset class is
developed, whereby a mix of equities and fixed-income investments is used to optimize the risk-return profile of plan assets and to mitigate asset-liability mismatch.

Plan assets are comprised of:



|                   |  |      |       |   |      |  |       |  
|------------------ |  | ---- | ----- | - | ---- |  | ----- | -
|                   |  | 2014 |       |   | 2013 | 
|Equity securities: |  |      |       |   |      |  |       |  
|Canadian           |  |      | 22.4  | % |      |  | 24.0  | %
|Foreign            |  |      | 32.3  |   |      |  | 34.3  |  
|Debt securities    |  |      | 41.8  |   |      |  | 38.6  |  
|Other              |  |      | 3.5   |   |      |  | 3.1   |  
|                   |  |      |       |   |      |  |       |  
|                   |  |      | 100.0 | % |      |  | 100.0 | %
|                   |  |      |       |   |      |  |       |  

The fair value of plan assets is principally based on quoted prices in an active market.

Where funded plans have a net defined benefit asset, the Corporation determines if potential reductions in future contributions are
permitted by applicable regulations and by collective bargaining agreements. When a defined benefit asset is created, it cannot exceed the future economic benefit that the Corporation can expect to obtain from the asset. The future economic benefit
represents the value of reductions in future contributions and expenses payable to the pension fund. It does not reflect gains that could be generated in the future that would allow reductions in contributions by the Corporation. When there is a
minimum funding requirement, this could also limit the amount recognized in the balance sheet. A minimum funding requirement represents the present value of amortization payments based on the most recent actuarial financing reports filed.

The reconciliation of funded status to the net amount recognized in the consolidated balance sheets is as follows:



|                                           |  |                  |          |   |                         |   |        |      |  |   |       |   |  |   |       |  
|------------------------------------------ |  | ---------------- | -------- | - | ----------------------- | - | ------ | ---- |  | - | ----- | - |  | - | ----- | -
|                                           |  | Pension benefits |          |   | Postretirement benefits |  
|                                           |  | 2014             |          |   | 2013                    |   |        | 2014 |  |   | 2013  |  
|                                           |  |                  |          |  
|Benefit obligations                        |  | $                | (1,169.3 | ) |                         | $ | (979.6 | )    |  | $ | (65.2 | ) |  | $ | (54.3 | )
|Fair value of plan assets                  |  |                  | 1,115.6  |   |                         |   | 976.7  |      |  |   |      |   |  |   |      |  
|                                           |  |                  |          |   |                         |   |        |      |  |   |       |   |  |   |       |  
|Plan deficit                               |  |                  | (53.7    | ) |                         |   | (2.9   | )    |  |   | (65.2 | ) |  |   | (54.3 | )
|Asset limit and minimum funding adjustment |  |                  | (4.4     | ) |                         |   | (32.6  | )    |  |   |      |   |  |   |      |  
|                                           |  |                  |          |   |                         |   |        |      |  |   |       |   |  |   |       |  
|Net amount recognized1                     |  | $                | (58.1    | ) |                         | $ | (35.5  | )    |  | $ | (65.2 | ) |  | $ | (54.3 | )
|                                           |  |                  |          |   |                         |   |        |      |  |   |       |   |  |   |       |  



|1 | The net amount recognized for 2014 consists of a liability of $124.3 million ($101.2 million in 2013) included in other liabilities (note 21), an asset
of $3.3 million ($11.4 million in 2013) included in other assets (note 17), and a liability of $2.3 million included with liabilities held for sale.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-68



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|29. | PENSION PLANS AND POSTRETIREMENT BENEFITS (continued)
|--- | -----------------------------------------------------



Components of re-measurements are as follows:



|                                                                                                                        |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  
|----------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------ | - | ----------------------- | - | ----- | ---- |  | - | ----- | - |  | ---- | ---- | - | ---- | - | ---- | - |  | - | ---- | -
|                                                                                                                        |  | Pension benefits |        |   | Postretirement benefits |  
|                                                                                                                        |  | 2014             |        |   | 2013                    |   |       | 2012 |  |   | 2014  |   |  | 2013 |      |   | 2012 |  
|                                                                                                                        |  |                  |        |   |                         |  
|Actuarial (loss) gain on benefit obligations                                                                            |  | $                | (145.8 | ) |                         | $ | 76.5  |      |  | $ | (50.7 | ) |  | $    | (8.7 | ) |      | $ | 5.9  |   |  | $ | (3.4 | )
|Actual return on plan assets, less interest income anticipated as part of the interest on net defined benefit
liability |  |                  | 71.7   |   |                         |   | 91.8  |      |  |   | 36.1  |   |  |      |     |   |      |   |     |   |  |   |     |  
|Asset limit and minimum funding adjustment                                                                              |  |                  | 29.8   |   |                         |   | (32.6 | )    |  |   |      |   |  |      |     |   |      |   |     |   |  |   |     |  
|                                                                                                                        |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  
|Re-measurements recorded in other comprehensive income                                                                  |  | $                | (44.3  | ) |                         | $ | 135.7 |      |  | $ | (14.6 | ) |  | $    | (8.7 | ) |      | $ | 5.9  |   |  | $ | (3.4 | )
|                                                                                                                        |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  
|                                                                                                                        |  |                  |        |   |                         |  
|Components of the net benefit costs are as follows:                                                                     |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  
|                                                                                                                        |  |                 
|                                                                                                                        |  | Pension benefits |        |   | Postretirement benefits |  
|                                                                                                                        |  | 2014             |        |   | 2013                    |   |       | 2012 |  |   | 2014  |   |  | 2013 |      |   | 2012 |  
|                                                                                                                        |  |                  |        |   |                         |  
|Employee costs:                                                                                                         |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  
|Service costs                                                                                                           |  | $                | 31.4   |   |                         | $ | 38.6  |      |  | $ | 35.1  |   |  | $    | 1.1  |   |      | $ | 1.3  |   |  | $ | 1.2  |  
|Curtailment loss (gain) and other                                                                                       |  |                  | 3.7    |   |                         |   | 2.5   |      |  |   | 3.7   |   |  |      |     |   |      |   | (2.9 | ) |  |   | (0.2 | )
|Interest on net defined benefit liability                                                                               |  |                  | 2.1    |   |                         |   | 9.8   |      |  |   | 9.7   |   |  |      | 2.5  |   |      |   | 2.5  |   |  |   | 2.6  |  
|                                                                                                                        |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  
|Net benefit costs1                                                                                                      |  | $                | 37.2   |   |                         | $ | 50.9  |      |  | $ | 48.5  |   |  | $    | 3.6  |   |      | $ | 0.9  |   |  | $ | 3.6  |  
|                                                                                                                        |  |                  |        |   |                         |   |       |      |  |   |       |   |  |      |      |   |      |   |      |   |  |   |      |  



|1 | Net benefit costs of $5.1 million in 2014 were presented as part of discontinued operations ($7.7 million in 2013 and $8.0 million in 2012).
|- | --------------------------------------------------------------------------------------------------------------------------------------------



F-69



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|29. | PENSION PLANS AND POSTRETIREMENT BENEFITS (continued)
|--- | -----------------------------------------------------



The expense related to defined contribution pension plans amounted to $15.3 million in
2014 ($15.1 million in 2013 and $14.1 million in 2012), of which $1.5 million ($1.5 million in 2013 and 2012) is presented as part of discontinued operations.

The expected employer contributions to the Corporations defined benefit pension plans and post-retirement benefits plans will be
$48.3 million in 2015 based on the most recent financial actuarial reports filed and the expected transaction described in note 8 (contributions of $60.6 million were paid in 2014).

Assumptions

The Corporation determines its assumption for the discount rate to be used for purposes of computing annual service and interest costs based on an index of high-quality corporate bond-yield and
matched-funding yield curve analysis as of the measurement date.

The actuarial assumptions used in measuring the
Corporations benefit obligations as of December 31, 2014, 2013 and 2012 and current periodic benefit costs are as follows:



|                                |  |                  |      |   |                         |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|------------------------------- |  | ---------------- | ---- | - | ----------------------- |  | ---- | ---- |  |  | ---- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|                                |  | Pension benefits |      |   | Postretirement benefits | 
|                                |  | 2014             |      |   | 2013                    |  |      | 2012 |  |  | 2014 |   |  | 2013 |      |   | 2012 | 
|                                |  |                  |      |   |                         | 
|Benefit obligations             |  |                  |      |   |                         |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|Rates as of year-end:           |  |                  |      |   |                         |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|Discount rate                   |  |                  | 4.10 | % |                         |  | 4.90 | %    |  |  | 4.40 | % |  |      | 4.10 | % |      |  | 4.90 | % |  |  | 4.40 | %
|Rate of compensation increase   |  |                  | 3.00 |   |                         |  | 3.00 |      |  |  | 3.25 |   |  |      | 3.00 |   |      |  | 3.00 |   |  |  | 3.25 |  
|                                |  |                  |      |   |                         | 
|Current periodic costs          |  |                  |      |   |                         |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|Rates as of preceding year-end: |  |                  |      |   |                         |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|Discount rate                   |  |                  | 4.90 | % |                         |  | 4.40 | %    |  |  | 4.75 | % |  |      | 4.90 | % |      |  | 4.40 | % |  |  | 4.75 | %
|Rate of compensation increase   |  |                  | 3.00 |   |                         |  | 3.25 |      |  |  | 3.25 |   |  |      | 3.00 |   |      |  | 3.25 |   |  |  | 3.25 |  

The assumed average retirement age of participants used was of 62 years in 2014, 2013 and 2012.

The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligations was 8.5% at the
end of 2014. These costs, as per the estimate, are expected to decrease gradually over the next 10 years to 6.0% and to remain at that level thereafter.

Sensitivity analysis

A decrease of 10 basis points in the discount rate
would have had the following impacts, before income tax, for the year ended December 31, 2014:



|                    |  |                           |      |  |                         |   |      |                          |  |   |                           |   |  |        |     |  |                          |   |   |  |  |   |      |  
|------------------- |  | ------------------------- | ---- |  | ----------------------- | - | ---- | ------------------------ |  | - | ------------------------- | - |  | ------ | --- |  | ------------------------ | - | - |  |  | - | ---- | -
|                    |  | Pension benefits          |      |  | Postretirement benefits |  
|Increase (decrease) |  | Obligationin balancesheet |      |  | Income                  |   |      | Othercomprehensiveincome |  |   | Obligationin balancesheet |   |  | Income |     |  | Othercomprehensiveincome |  
|                    |  |                           |      |  |                         |  
|Discount rate       |  | $                         | 19.5 |  |                         | $ | (1.5 | )                        |  | $ | (19.5                     | ) |  | $      | 1.3 |  |                          | $ |  |  |  | $ | (1.3 | )
|                    |  |                           |      |  |                         |   |      |                          |  |   |                           |   |  |        |     |  |                          |   |   |  |  |   |      |  



F-70



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|29. | PENSION PLANS AND POSTRETIREMENT BENEFITS (continued)
|--- | -----------------------------------------------------



There are limitations to the above sensitivity analysis since it only considers the
impacts of a decrease of 10 basis points in the discount rate assumption (at the beginning of the year having an impact on income and at the end of the year having an impact on comprehensive income) without changing any other assumptions. No
sensitivity analysis was performed on other assumptions as a similar change to these assumptions would not have a significant impact on the consolidated financial statements.



|30. | NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION
|--- | --------------------------------------------------------

The Corporation has access to the cash flows generated by its subsidiaries by way of dividends declared by its public subsidiaries and dividends and advances from its private subsidiaries. However, some
of the Corporations subsidiaries have restrictions, based on contractual debt obligations and corporate solvency tests, regarding the amounts of dividends and advances that can be paid to the Corporation.

The U.S Securities and Exchange Commission requires that the non-consolidated financial statements of the parent corporation be presented
when its subsidiaries have restrictions that may limit the amount of cash that can be paid to the parent corporation. These non-consolidated and condensed financial statements, as prepared under IFRS, are shown below.

Non-consolidated condensed statements of income and comprehensive income



|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|----------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                  |  | 2014 |       |   | 2013 |   |       | 2012 | 
|                                                                  |  |      |      
|Revenues:                                                         |  |      |       |   |      |   |       |      |  |   |       |  
|Dividends                                                         |  | $    | 445.0 |   |      | $ | 411.9 |      |  | $ | 821.0 |  
|Interest                                                          |  |      | 0.7   |   |      |   | 0.4   |      |  |   | 1.1   |  
|Management fees                                                   |  |      | 57.2  |   |      |   | 59.4  |      |  |   | 58.5  |  
|Other                                                             |  |      | 52.1  |   |      |   | 52.1  |      |  |   | 43.6  |  
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|                                                                  |  |      | 555.0 |   |      |   | 523.8 |      |  |   | 924.2 |  
|General and administrative expenses                               |  |      | 117.8 |   |      |   | 117.0 |      |  |   | 102.2 |  
|Depreciation and amortization                                     |  |      | 1.1   |   |      |   | 0.9   |      |  |   | 6.4   |  
|Financial expenses                                                |  |      | 145.1 |   |      |   | 171.0 |      |  |   | 144.7 |  
|(Gain) loss on debt refinancing                                   |  |      | (2.7  | ) |      |   |      |      |  |   | 14.1  |  
|(Gain) loss on valuation and translation of financial instruments |  |      | (0.4  | ) |      |   | 80.7  |      |  |   | (61.0 | )
|Gain on disposal of subsidiaries                                  |  |      | (18.0 | ) |      |   |      |      |  |   |      |  
|Other                                                             |  |      | 5.7   |   |      |   | 1.4   |      |  |   |      |  
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|Income before income taxes                                        |  |      | 306.4 |   |      |   | 152.8 |      |  |   | 717.8 |  
|Income taxes                                                      |  |      | 10.9  |   |      |   | (2.4  | )    |  |   | 16.6  |  
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|Net income                                                        |  |      | 295.5 |   |      |   | 155.2 |      |  |   | 701.2 |  
|Other comprehensive loss                                          |  |      | (17.8 | ) |      |   | (24.6 | )    |  |   | (2.7  | )
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  
|Comprehensive income                                              |  | $    | 277.7 |   |      | $ | 130.6 |      |  | $ | 698.5 |  
|                                                                  |  |      |       |   |      |   |       |      |  |   |       |  



F-71



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|30. | NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION (continued)
|--- | --------------------------------------------------------------------



Non-consolidated and condensed statements of cash flows



|                                                                                              |  |      |          |   |      |   |        |      |  |   |          |  
|--------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | ------ | ---- |  | - | -------- | -
|                                                                                              |  | 2014 |          |   | 2013 |   |        | 2012 | 
|                                                                                              |  |      |         
|Cash flows related to operations                                                              |  |      |          |   |      |   |        |      |  |   |          |  
|Net income                                                                                    |  | $    | 295.5    |   |      | $ | 155.2  |      |  | $ | 701.2    |  
|Depreciation of plant, property and equipment                                                 |  |      | 1.1      |   |      |   | 0.9    |      |  |   | 6.4      |  
|(Gain) loss on valuation and translation of financial instruments                             |  |      | (0.4     | ) |      |   | 80.7   |      |  |   | (61.0    | )
|Amortization of financing costs and long-term debt discount                                   |  |      | 3.8      |   |      |   | 6.4    |      |  |   | 8.3      |  
|(Gain) loss on debt refinancing                                                               |  |      | (2.7     | ) |      |   |       |      |  |   | 14.1     |  
|Deferred income taxes                                                                         |  |      | 8.4      |   |      |   | (4.2   | )    |  |   | 16.6     |  
|Gain on disposal of subsidiaries                                                              |  |      | (18.0    | ) |      |   |       |      |  |   |         |  
|Other                                                                                         |  |      |         |   |      |   | 1.0    |      |  |   | 5.9      |  
|                                                                                              |  |      |         
|Net change in non-cash balances related to operations                                         |  |      | (41.3    | ) |      |   | 7.0    |      |  |   | (42.2    | )
|                                                                                              |  |      |          |   |      |   |        |      |  |   |          |  
|Cash flows provided by operations                                                             |  |      | 246.4    |   |      |   | 247.0  |      |  |   | 649.3    |  
|                                                                                              |  |      |         
|Cash flows related to investing activities                                                    |  |      |          |   |      |   |        |      |  |   |          |  
|Net change in investments in subsidiaries                                                     |  |      | (20.5    | ) |      |   | (109.7 | )    |  |   | (30.0    | )
|Proceeds from disposal of subsidiaries                                                        |  |      | 211.7    |   |      |   | 64.7   |      |  |   |         |  
|Acquisition of tax deductions from the parent corporation                                     |  |      | (3.1     | ) |      |   | (6.9   | )    |  |   | (10.2    | )
|Other                                                                                         |  |      | (13.5    | ) |      |   | (8.8   | )    |  |   | (3.5     | )
|                                                                                              |  |      |          |   |      |   |        |      |  |   |          |  
|Cash flows provided by (used in) investing activities                                         |  |      | 174.6    |   |      |   | (60.7  | )    |  |   | (43.7    | )
|                                                                                              |  |      |         
|Cash flows related to financing activities                                                    |  |      |          |   |      |   |        |      |  |   |          |  
|Repayment of long-term debt                                                                   |  |      | (433.7   | ) |      |   | (294.2 | )    |  |   | (760.1   | )
|Settlement of hedging contracts                                                               |  |      | 53.8     |   |      |   | (49.1  | )    |  |   | (40.0    | )
|Issuance of long-term debt, net of financing fees                                             |  |      |         |   |      |   | 358.6  |      |  |   | 1,313.3  |  
|Repurchase of Common Shares                                                                   |  |      |         |   |      |   |       |      |  |   | (1,000.1 | )
|Repurchase of redeemable preferred shares issued to subsidiaries                              |  |      | (1,200.0 | ) |      |   |       |      |  |   |         |  
|Dividends                                                                                     |  |      | (100.0   | ) |      |   | (100.0 | )    |  |   | (100.0   | )
|Net change in subordinated loans from subsidiaries                                            |  |      | 20.0     |   |      |   | 190.0  |      |  |   | 735.0    |  
|Net change in convertible obligations, subordinated loans and notes receivable  subsidiaries |  |      | 1,076.0  |   |      |   | (194.1 | )    |  |   | (733.8   | )
|Net change in advances to or from subsidiaries                                                |  |      | 82.3     |   |      |   |       |      |  |   | 10.6     |  
|                                                                                              |  |      |          |   |      |   |        |      |  |   |          |  
|Cash flows used in financing activities                                                       |  |      | (501.6   | ) |      |   | (88.8  | )    |  |   | (575.1   | )
|                                                                                              |  |      |         
|Net change in cash and cash equivalents                                                       |  |      | (80.6    | ) |      |   | 97.5   |      |  |   | 30.5     |  
|Cash and cash equivalents at beginning of year                                                |  |      | 141.7    |   |      |   | 44.2   |      |  |   | 13.7     |  
|                                                                                              |  |      |          |   |      |   |        |      |  |   |          |  
|Cash and cash equivalents at end of year                                                      |  | $    | 61.1     |   |      | $ | 141.7  |      |  | $ | 44.2     |  
|                                                                                              |  |      |          |   |      |   |        |      |  |   |          |  



F-72



---

QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|30. | NON-CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION (continued)
|--- | --------------------------------------------------------------------



Non-consolidated and condensed balance sheets



|                                                                                |  |      |         |  |      |   |         | 
|------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                |  | 2014 |         |  | 2013 |  
|                                                                                |  |     
|Assets                                                                          |  |      |         |  |      |   |         | 
|Current assets                                                                  |  | $    | 265.2   |  |      | $ | 203.2   | 
|Investments in subsidiaries at cost                                             |  |      | 4,225.8 |  |      |   | 4,320.5 | 
|Advances to subsidiaries                                                        |  |      | 91.1    |  |      |   | 269.4   | 
|Convertible obligations, subordinated loans and notes receivable  subsidiaries |  |      | 1,631.3 |  |      |   | 2,807.3 | 
|Other assets                                                                    |  |      | 216.1   |  |      |   | 144.7   | 
|                                                                                |  |      |         |  |      |   |         | 
|                                                                                |  | $    | 6,429.5 |  |      | $ | 7,745.1 | 
|                                                                                |  |      |         |  |      |   |         | 
|                                                                                |  |     
|Liabilities and equity                                                          |  |      |         |  |      |   |         | 
|Current liabilities                                                             |  | $    | 154.0   |  |      | $ | 75.6    | 
|Long-term debt                                                                  |  |      | 2,188.7 |  |      |   | 2,487.5 | 
|Advances from subsidiaries                                                      |  |      | 175.7   |  |      |   | 271.7   | 
|Other liabilities                                                               |  |      | 33.6    |  |      |   | 30.5    | 
|Subordinated loan from subsidiaries                                             |  |      | 1,190.0 |  |      |   | 1,170.0 | 
|Redeemable preferred shares issued to subsidiaries                              |  |      | 430.0   |  |      |   | 1,630.0 | 
|Equity attributable to shareholders                                             |  |      | 2,257.5 |  |      |   | 2,079.8 | 
|                                                                                |  |      |         |  |      |   |         | 
|                                                                                |  | $    | 6,429.5 |  |      | $ | 7,745.1 | 
|                                                                                |  |      |         |  |      |   |         | 



|31. | SUBSEQUENT EVENTS
|--- | -----------------

In
January 2015, Videotron entered into new unsecured on demand credit facilities, under which letters of credit were issued and filed with Industry Canada as pre-auction financial deposits in respect to its application to participate to the
2500 MHz and AWS-3 spectrum auctions. Under Industry Canadas published rules respecting restrictions on communications during the auction process, it is strictly forbidden for the Corporation
to disclose the amount of the letters of credit, which can be withdrawn by Videotron at any time prior to the auction commencement. On March 6, 2015, Quebecor Media and its subsidiary Videotron announced that it had acquired four 30 MHz
licences in the auction for AWS-3 commercial mobile spectrum at a total price of $31.8 million. The process will resume on April 14, 2015 with the auction for spectrum in the 2500 MHz band.

On March 6, 2015, the Québec Court of Appeal ruled in favour of Videotron and TVA Group, and ordered Bell
ExpressVu Limited Partnership (Bell ExpressVu), a subsidiary of Bell, to pay compensation totalling $137.0 million for having deliberately neglected to implement an appropriate security system to prevent piracy of the signals broadcast
by its satellite television service between 1999 and 2005. The judgement stated that Bell ExpressVu knew and must have foreseen that this practice would cause serious harm to its competitors, including Videotron, its main rival in Québec.



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QUEBECOR MEDIA INC. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years ended December 31, 2014, 2013 and 2012

(tabular amounts in millions of Canadian dollars, except for option data)





|31. | SUBSEQUENT EVENTS (continued)
|--- | -----------------------------



On March 11, 2015, Videotron issued a notice of redemption for all of its
outstanding 6.375% Senior Notes due December 15, 2015 in aggregate principal amount of US$175.0 million at a redemption price of 100.000% of their principal amount. The redemption date is April 10, 2015.

On March 18, 2015, TVA Group announced the completion of its rights offering, whereby TVA Group will receive aggregate gross proceeds of
approximately $110.0 million from the issuance of 19,434,629 Class B Non-Voting Shares of TVA Group. The closing of the rights offering will be on March 20, 2015. Under the rights offering, Quebecor Media will subscribe to 17,300,259 Class B
Non-Voting Shares of TVA Group at a total cost of $97.9 million and its aggregate equity interest in TVA Group will increase from 51.5% to 68.4%.



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