EX-3 4 supp_finan.htm SUPPLEMENTARY FINANCIAL INFORMATION Q1 2009 Supplementary Financial Information - First Quarter 2009

EXHIBIT 3

 

 

BCE Inc. (1)
Consolidated Operational Data

 

  Q1       Q1                

($ millions, except per share amounts) (unaudited)

  2009       2008       $ change     % change  

Operating revenues

  4,342       4,360       (18 )   (0.4 %)

Cost of revenue, exclusive of depreciation and amortization

  (1,097 )     (1,059 )     (38 )   (3.6 %)

Selling, general and administrative expenses (A)

  (1,400 )     (1,479 )     79     5.3 %

Net benefit plans cost

  (88 )     (71 )     (17 )   (23.9 %)

EBITDA (3)

  1,757       1,751       6     0.3 %

EBITDA margin (4)

  40.5 %     40.2 %           0.3  pts

Depreciation

  (626 )     (623 )     (3 )   (0.5 %)

Amortization of intangible assets

  (193 )     (195 )     2     1.0 %

Restructuring and other

  (109 )     (283 )     174     61.5 %

Operating income

  829       650       179     27.5 %

Other income

  2       22       (20 )   (90.9 %)

Interest expense

  (191 )     (198 )     7     3.5 %

Pre-tax earnings from continuing operations

  640       474       166     35.0 %

Income taxes

  (147 )     (109 )     (38 )   (34.9 %)

Non-controlling interest

  (82 )     (74 )     (8 )   (10.8 %)

Earnings from continuing operations

  411       291       120     41.2 %

Discontinued operations

  (5 )     (2 )     (3 )   n.m.  

Net earnings

  406       289       117     40.5 %

Dividends on preferred shares

  (29 )     (31 )     2     6.5 %

Net earnings applicable to common shares

  377       258       119     46.1 %

Net earnings per common share - basic

                           

Continuing operations

$ 0.48     $ 0.32     $ 0.16     50.0 %

Discontinued operations

$ -     $ -     $ -     0.0 % 

Net earnings

$ 0.48     $ 0.32     $ 0.16     50.0 %

Net earnings per common share - diluted

                           

Continuing operations

$ 0.48     $ 0.32     $ 0.16     50.0 %

Discontinued operations

$ -     $ -     $ -     0.0 % 

Net earnings

$ 0.48     $ 0.32     $ 0.16     50.0 %

Dividends per common share

$ 0.385     $ 0.365     $ 0.020     5.5 %

Average number of common shares outstanding - basic (millions)

  788.3       805.3                

Average number of common shares outstanding - diluted (millions)

  788.3       807.1                

 

                            

The following items are included in net earnings:

                           

Net gains (losses) on investments

                           

Continuing operations

  1       (2 )     3     n.m.  

Restructuring and other

  (70 )     (197 )     127     64.5 %

Total

  (69 )     (199 )     130     65.3 %

Impact on net earnings per share

$ (0.09 )   $ (0.25 )   $ 0.16     64.0 %

Adjusted EPS (3)

$ 0.57     $ 0.57     $ -     0.0 %

 

                            


(A) Excludes net benefit plans cost
n.m. : not meaningful

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 2

BCE Inc.
Consolidated Operational Data - Historical Trend

 

          Total                                  

($ millions, except per share amounts) (unaudited)

  Q1 09       2008       Q4 08       Q3 08       Q2 08       Q1 08  

Operating revenues

  4,342       17,698       4,488       4,450       4,400       4,360  

Cost of revenue, exclusive of depreciation and amortization

  (1,097 )     (4,428 )     (1,189 )     (1,098 )     (1,082 )     (1,059 )

Selling, general and administrative expenses (A)

  (1,400 )     (6,016 )     (1,519 )     (1,513 )     (1,505 )     (1,479 )

Net benefit plans cost

  (88 )     (250 )     (40 )     (69 )     (70 )     (71 )

EBITDA

  1,757       7,004       1,740       1,770       1,743       1,751  

EBITDA margin

  40.5 %     39.6 %     38.8 %     39.8 %     39.6 %     40.2 %

Depreciation

  (626 )     (2,537 )     (683 )     (619 )     (612 )     (623 )

Amortization of intangible assets

  (193 )     (732 )     (187 )     (175 )     (175 )     (195 )

Restructuring and other

  (109 )     (871 )     (207 )     (310 )     (71 )     (283 )

Operating income

  829       2,864       663       666       885       650  

Other income (expense)

  2       (253 )     (281 )     -       6       22  

Interest expense

  (191 )     (791 )     (207 )     (193 )     (193 )     (198 )

Pre-tax earnings from continuing operations

  640       1,820       175       473       698       474  

Income taxes

  (147 )     (469 )     (84 )     (81 )     (195 )     (109 )

Non-controlling interest

  (82 )     (320 )     (68 )     (90 )     (88 )     (74 )

Earnings from continuing operations

  411       1,031       23       302       415       291  

Discontinued operations

  (5 )     (88 )     (41 )     (22 )     (23 )     (2 )

Net earnings (loss)

  406       943       (18 )     280       392       289  

Dividends on preferred shares

  (29 )     (124 )     (30 )     (32 )     (31 )     (31 )

Net earnings (loss) applicable to common shares

  377       819       (48 )     248       361       258  

Net earnings (loss) per common share - basic

                                             

Continuing operations

$ 0.48     $ 1.13     $ (0.01 )   $ 0.34     $ 0.48     $ 0.32  

Discontinued operations

$ -     $ (0.11 )   $ (0.05 )   $ (0.03 )   $ (0.03 )   $ -  

Net earnings

$ 0.48     $ 1.02     $ (0.06 )   $ 0.31     $ 0.45     $ 0.32  

Net earnings (loss) per common share - diluted

                                             

Continuing operations

$ 0.48     $ 1.12     $ (0.01 )   $ 0.33     $ 0.48     $ 0.32  

Discontinued operations

$ -     $ (0.11 )   $ (0.05 )   $ (0.03 )   $ (0.03 )   $ -  

Net earnings

$ 0.48     $ 1.01     $ (0.06 )   $ 0.30     $ 0.45     $ 0.32  

Dividends per common share

$ 0.385     $ 0.730     $ 0.365     $ -     $ -     $ 0.365  

Average number of common shares outstanding - basic (millions)

  788.3       805.8       806.4       806.0       805.6       805.3  

Average number of common shares outstanding - diluted (millions)

  788.3       807.2       806.9       808.3       807.2       807.1  
                                               

The following items are included in net earnings (loss):

                                             

Net gains (losses) on investments

                                             

Continuing operations

  1       (358 )     (346 )     (14 )     4       (2 )

Discontinued operations

  -       (62 )     (26 )     (16 )     (20 )     -  

Restructuring and other

  (70 )     (572 )     (117 )     (210 )     (48 )     (197 )

Total

  (69 )     (992 )     (489 )     (240 )     (64 )     (199 )

Impact on net earnings per share

$ (0.09 )   $ (1.23 )   $ (0.61 )   $ (0.29 )   $ (0.08 )   $ (0.25 )

Adjusted EPS

$ 0.57     $ 2.25     $ 0.55     $ 0.60     $ 0.53     $ 0.57  


(A) Excludes net benefit plans cost

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 3

BCE Inc.
Segmented Data (2)

 

Q1     Q1              

($ millions, except where otherwise indicated) (unaudited)

2009     2008     $ change     % change  
                       

Revenues

                     

Bell Wireline

2,592     2,655     (63 )   (2.4 %)

Bell Wireless

1,079     1,043     36     3.5 %

Inter-segment eliminations

(48 )   (58 )   10     17.2 %

Total Bell

3,623     3,640     (17 )   (0.5 %)

Bell Aliant

828     858     (30 )   (3.5 %)

Inter-segment eliminations

(109 )   (138 )   29     21.0 %

Total BCE Inc.

4,342     4,360     (18 )   (0.4 %)
                       

EBITDA

                     

Bell Wireline

992     1,012     (20 )   (2.0 %)

Margin

38.3 %   38.1 %         0.2  pts

Bell Wireless

434     410     24     5.9 %

Margin

40.2 %   39.3 %         0.9  pts

Total Bell

1,426     1,422     4     0.3 %

Margin

39.4 %   39.1 %         0.3  pts

Bell Aliant

331     329     2     0.6 %

Margin

40.0 %   38.3 %         1.7  pts

Total BCE Inc.

1,757     1,751     6     0.3 %

Margin

40.5 %   40.2 %         0.3  pts

Operating income

                     

Bell Wireline

349     181     168     92.8 %

Bell Wireless

300     293     7     2.4 %

Total Bell

649     474     175     36.9 %

Bell Aliant

180     176     4     2.3 %

Total BCE Inc.

829     650     179     27.5 %
                       

Capital expenditures

                     

Bell Wireline

352     389     37     9.5 %

Capital Intensity (5)

13.6 %   14.7 %         1.1  pts

Bell Wireless

130     67     (63 )   (94.0 %)

Capital intensity

12.0 %   6.4 %         (5.6 ) pts

Total Bell

482     456     (26 )   (5.7 %)

Capital Intensity

13.3 %   12.5 %         (0.8 ) pts

Bell Aliant

108     95     (13 )   (13.7 %)

Capital Intensity

13.0 %   11.1 %         (1.9 ) pts

Total BCE Inc.

590     551     (39 )   (7.1 %)

Capital Intensity

13.6 %   12.6 %         (1.0 ) pt
                       

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 4

BCE Inc.
Segmented Data - Historical Trend

 

      Total                          

($ millions, except where otherwise indicated) (unaudited)

Q1 09     2008     Q4 08     Q3 08     Q2 08     Q1 08  
                                   

Revenues

                                 

Bell Wireline

2,592     10,640     2,726     2,632     2,627     2,655  

Bell Wireless

1,079     4,481     1,135     1,180     1,123     1,043  

Inter-segment eliminations

(48 )   (248 )   (61 )   (65 )   (64 )   (58 )

Total Bell

3,623     14,873     3,800     3,747     3,686     3,640  

Bell Aliant

828     3,332     815     821     838     858  

Inter-segment eliminations

(109 )   (507 )   (127 )   (118 )   (124 )   (138 )

Total BCE Inc.

4,342     17,698     4,488     4,450     4,400     4,360  
                                   

EBITDA

                                 

Bell Wireline

992     3,868     937     953     966     1,012  

Margin

38.3 %   36.4 %   34.4 %   36.2 %   36.8 %   38.1 %

Bell Wireless

434     1,770     444     474     442     410  

Margin

40.2 %   39.5 %   39.1 %   40.2 %   39.4 %   39.3 %

Total Bell

1,426     5,638     1,381     1,427     1,408     1,422  

Margin

39.4 %   37.9 %   36.3 %   38.1 %   38.2 %   39.1 %

Bell Aliant

331     1,366     359     343     335     329  

Margin

40.0 %   41.0 %   44.0 %   41.8 %   40.0 %   38.3 %

Total BCE Inc.

1,757     7,004     1,740     1,770     1,743     1,751  

Margin

40.5 %   39.6 %   38.8 %   39.8 %   39.6 %   40.2 %

Operating income

                                 

Bell Wireline

349     902     226     125     370     181  

Bell Wireless

300     1,241     294     338     316     293  

Total Bell

649     2,143     520     463     686     474  

Bell Aliant

180     721     143     203     199     176  

Total BCE Inc.

829     2,864     663     666     885     650  
                                   

Capital expenditures

                                 

Bell Wireline

352     1,966     625     473     479     389  

Capital Intensity

13.6 %   18.5 %   22.9 %   18.0 %   18.2 %   14.7 %

Bell Wireless

130     493     229     93     104     67  

Capital intensity

12.0 %   11.0 %   20.2 %   7.9 %   9.3 %   6.4 %

Total Bell

482     2,459     854     566     583     456  

Capital Intensity

13.3 %   16.5 %   22.5 %   15.1 %   15.8 %   12.5 %

Bell Aliant

108     529     168     139     127     95  

Capital Intensity

13.0 %   15.9 %   20.6 %   16.9 %   15.2 %   11.1 %

Total BCE Inc.

590     2,988     1,022     705     710     551  

Capital Intensity

13.6 %   16.9 %   22.8 %   15.8 %   16.1 %   12.6 %

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 5

Bell Wireline (2)

 

Q1     Q1        

($ millions, except where otherwise indicated) (unaudited)

2009     2008     % change  

Bell Wireline

               

Local & access

805     857     (6.1 %)

Long distance

278     298     (6.7 %)

Data

905     903     0.2 %

Video

387     356     8.7 %

Equipment & other

140     154     (9.1 %)

Total external revenues

2,515     2,568     (2.1 %)

Inter-segment revenues

77     87     (11.5 %)

Total Bell Wireline operating revenue

2,592     2,655     (2.4 %)

Operating expenses

(1,600 )   (1,643 )   2.6 %

EBITDA

992     1,012     (2.0 %)

EBITDA Margin

38.3 %   38.1 %   0.2  pts

Operating income

349     181     92.8 %
                 

Capital expenditures

352     389     9.5 %

Capital intensity

13.6 %   14.7 %   1.1  pts
                 

Local

               

Network access services (NAS) (k)

               

Residential (A)

4,153     4,500     (7.7 %)

Business (B)

3,179     3,240     (1.9 %)

Total

7,332     7,740     (5.3 %)

Network access service net (losses)/activations (k)

               

Residential

(78 )   (106 )   26.4 %

Business (B)

(26 )   (13 )   (100.0 %)

Total

(104 )   (119 )   12.6 %

Long Distance (LD)

               

Conversation minutes (M)

2,851     2,930     (2.7 %)

Average revenue per minute ($)

0.085     0.093     (8.6 %)

Internet

               

High Speed Internet net activations (k)

6     10     (40.0 %)

High Speed Internet subscribers EOP (k)

2,060     2,014     2.3 %

Video (DTH and VDSL)

               

Video EBITDA

92     77     19.5 %

Net subscriber activations (k)

12     1     n.m.  

Total subscribers EOP (k)

1,864     1,823     2.2 %

ARPU (6) ($/month)

68.84     64.65     6.5 %

Churn (7) (%) (average per month)

1.1 %   1.1 %   0.0  pts
                 
 
(A)

At the beginning of Q1 2008, an adjustment of 44k was made to our NAS count, reflecting an extensive review of our historical customer account records.

(B)

In Q1 2008, we adjusted our beginning -of-period business NAS customer base to write-off 273k lines following formal notification received from a major wholesale customer in Q4 2007 that it was in the process of migrating all of its subscribers onto its own network facilities.

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 6

Bell Wireline - Historical Trend

 

      Total                          

($ millions, except where otherwise indicated) (unaudited)

Q1 09     2008     Q4 08     Q3 08     Q2 08     Q1 08  

Bell Wireline

                                 

Local & access

805     3,360     825     833     845     857  

Long distance

278     1,165     279     290     298     298  

Data

905     3,721     1,009     913     896     903  

Video

387     1,450     375     363     356     356  

Equipment & other

140     576     145     136     141     154  

Total external revenues

2,515     10,272     2,633     2,535     2,536     2,568  

Inter-segment revenues

77     368     93     97     91     87  

Total Bell Wireline operating revenue

2,592     10,640     2,726     2,632     2,627     2,655  

Operating expenses

(1,600 )   (6,772 )   (1,789 )   (1,679 )   (1,661 )   (1,643 )

EBITDA

992     3,868     937     953     966     1,012  

EBITDA Margin

38.3 %   36.4 %   34.4 %   36.2 %   36.8 %   38.1 %

Operating income

349     902     226     125     370     181  
                                   

Capital expenditures

352     1,966     625     473     479     389  

Capital intensity

13.6 %   18.5 %   22.9 %   18.0 %   18.2 %   14.7 %
                                   

Local

                                 

Network access services (NAS) (k)

                                 

Residential (A)

4,153     4,231     4,231     4,303     4,375     4,500  

Business (B)

3,179     3,205     3,205     3,233     3,233     3,240  

Total

7,332     7,436     7,436     7,536     7,608     7,740  

Network access service net (losses)/activations (k)

                                 

Residential

(78 )   (375 )   (72 )   (72 )   (125 )   (106 )

Business (B)

(26 )   (48 )   (28 )   -     (7 )   (13 )

Total

(104 )   (423 )   (100 )   (72 )   (132 )   (119 )

Long Distance (LD)

                                 

Conversation minutes (M)

2,851     11,771     3,003     2,853     2,985     2,930  

Average revenue per minute ($)

0.085     0.089     0.082     0.093     0.089     0.093  

Internet

                                 

High Speed Internet net activations (k)

6     50     8     33     (1 )   10  

High Speed Internet subscribers EOP (k)

2,060     2,054     2,054     2,046     2,013     2,014  

Video (DTH and VDSL)

                                 

Video EBITDA

92     282     82     76     47     77  

Net subscriber activations (k)

12     30     14     7     8     1  

Total subscribers EOP (k)

1,864     1,852     1,852     1,838     1,831     1,823  

ARPU ($/month)

68.84     65.37     67.15     65.20     64.47     64.65  

Churn (%) (average per month)

1.1 %   1.2 %   1.3 %   1.4 %   1.1 %   1.1 %
 
(A)

At the beginning of Q1 2008, an adjustment of 44k was made to our NAS count, reflecting an extensive review of our historical customer account records.

(B) In Q1 2008, we adjusted our beginning -of-period business NAS customer base to write-off 273k lines following formal notification received from a major wholesale customer in Q4 2007 that it was in the process of migrating all of its subscribers onto its own network facilities.

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 7

Bell Wireless (2)

 

Q1     Q1        

($ millions, except where otherwise indicated) (unaudited)

2009     2008     % change  

Bell Wireless

               

Revenue

               

Service

986     956     3.1 %

Product

83     74     12.2 %

Total external Bell Wireless revenues

1,069     1,030     3.8 %

Inter-segment

10     13     (23.1 %)

Total Bell Wireless operating revenues

1,079     1,043     3.5 %

Operating expenses

(645 )   (633 )   (1.9 %)

EBITDA

434     410     5.9 %

EBITDA margin (Total revenues)

40.2 %   39.3 %   0.9  pts

EBITDA margin (Service revenues)

44.0 %   42.9 %   1.1  pts

Operating Income

300     293     2.4 %
                 

Capital expenditures

130     67     (94.0 %)

Capital intensity

12.0 %   6.4 %   (5.6 ) pts
                 

Wireless gross activations (A) (k)

366     351     4.3 %

Post-paid

210     198     6.1 %

Wireless net activations (A) (k)

30     34     (11.8 %)

Post-paid

35     28     25.0 %

Wireless subscribers EOP (A) (k)

6,527     6,250     4.4 %

Post-paid

4,780     4,478     6.7 %

Average revenue per unit (ARPU) (B) ($/month)

51.52     52.32     (1.5 %)

Pre-paid

15.38     16.50     (6.8 %)

Post-paid

62.34     64.27     (3.0 %)

Churn (%) (B) (average per month)

1.6 %   1.6 %   0.0  pts

Pre-paid

2.9 %   2.8 %   (0.1 ) pts

Post-paid

1.2 %   1.3 %   0.1  pts

Usage per subscriber (B) (min/month)

293     281     4.3 %

Cost of acquisition (COA) (B) (8) ($/sub)

397     396     (0.3 %)
 
(A)

Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)

Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect only the 50% portion of Virgin Mobile’s results that are consolidated.

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 8

Bell Wireless - Historical Trend

 

      Total                          

($ millions, except where otherwise indicated) (unaudited)

Q1 09     2008     Q4 08     Q3 08     Q2 08     Q1 08  

Bell Wireless

                                 

Revenue

                                 

Service

986     4,058     1,033     1,061     1,008     956  

Product

83     377     92     109     102     74  

Total external Bell Wireless revenues

1,069     4,435     1,125     1,170     1,110     1,030  

Inter-segment

10     46     10     10     13     13  

Total Bell Wireless operating revenues

1,079     4,481     1,135     1,180     1,123     1,043  

Operating expenses

(645 )   (2,711 )   (691 )   (706 )   (681 )   (633 )

EBITDA

434     1,770     444     474     442     410  

EBITDA margin (Total revenues)

40.2 %   39.5 %   39.1 %   40.2 %   39.4 %   39.3 %

EBITDA margin (Service revenues)

44.0 %   43.6 %   43.0 %   44.7 %   43.8 %   42.9 %

Operating Income

300     1,241     294     338     316     293  
                                   

Capital expenditures

130     493     229     93     104     67  

Capital intensity

12.0 %   11.0 %   20.2 %   7.9 %   9.3 %   6.4 %
                                   

Wireless gross activations (A) (k)

366     1,651     470     439     391     351  

Post-paid

210     970     252     267     253     198  

Wireless net activations (A) (k)

30     351     117     117     83     34  

Post-paid

35     332     80     113     111     28  

Wireless subscribers EOP (A) (B) (C) (k)

6,527     6,497     6,497     6,449     6,332     6,250  

Post-paid

4,780     4,745     4,745     4,708     4,595     4,478  

Average revenue per unit (ARPU) (D) ($/month)

51.52     54.29     54.22     56.30     54.27     52.32  

Pre-paid

15.38     17.14     16.40     18.19     17.48     16.50  

Post-paid

62.34     66.09     65.69     68.17     66.19     64.27  

Churn (%) (D) (average per month)

1.6 %   1.6 %   1.7 %   1.6 %   1.6 %   1.6 %

Pre-paid

2.9 %   3.1 %   3.3 %   3.2 %   3.0 %   2.8 %

Post-paid

1.2 %   1.2 %   1.3 %   1.1 %   1.1 %   1.3 %

Usage per subscriber (D) (min/month)

293     301     310     302     305     281  

Cost of acquisition (COA) (D) ($/sub)

397     395     373     398     417     396  
 
(A)

Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)

The Q2 2008 beginning of period wireless subscriber base was decreased by 1k (postpaid increased by 6k while pre-paid decreased by 7k) as a result of the integration of Aliant Mobility’s billing system.
(C)

The Q4 2008 Wireless subscriber base reflected the removal of 37k analog subscribers (11k postpaid, 26k prepaid) due to the decommissioning of the analog network. Additionally, the tightening of Virgin Mobile Canada credit and activation processes resulted in 32k Virgin postpaid subscribers being removed from the subscriber base. These adjustments are not included in the net activation or churn metrics.
(D)

Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect only the 50% portion of Virgin Mobile’s results that are consolidated.

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 9

     BCE Inc.
Net debt and other information (2)

BCE Inc. - Net debt and preferreds

               

 

                

At March 31, 2009

      BCE Inc.        

(unaudited)

               

($ millions, except where otherwise indicated)

               

 

      Bell
Aliant 		       

 

Bell *        BCE Inc.  

Debt due within one year

1,788     408     2,196  

Long-term debt

7,685     2,448     10,133  

Securitization of accounts receivable

1,108     165     1,273  

Preferred shares - BCE

2,770     -     2,770  

Cash and cash equivalents

(2,339 )   (24 )   (2,363 )

Net debt

11,012     2,997     14,009  

 

* Includes $650 million BCE debt.

 

Bell - Balance Sheet Information

         

(unaudited)

         

($ millions, except where otherwise indicated)

March 31     Dec. 31  

 

2009     2008  

Debt due within one year

1,788     1,878  

Long-term debt

7,685     7,648  

Securitization of accounts receivable

1,108     1,140  

Preferred shares - BCE

2,770     2,770  

Cash and cash equivalents

(2,339 )   (3,045 )

Net Debt

11,012     10,391  
           

Net Debt: Trailing 12 month EBITDA, including Bell Aliant distributions to BCE

1.86     1.75  

EBITDA, including Bell Aliant distributions to BCE: Net interest, securitization costs and preferred dividends (trailing 12 months)

8.24     8.33  

Cash Flow Information

                     

(unaudited)

                     

($ millions, except where otherwise indicated)

Q1     Q1              

 

 2009     2008     $ change     % change  

Free Cash Flow (FCF)

                     

Cash from operating activities

723     721     2     0.3 %

Capital expenditures

(482 )   (456 )   (26 )   (5.7 %)

Other investing activities

(14 )   3     (17 )   n.m.  

Dividends paid on preferred shares

(28 )   (35 )   7     20.0 %

Bell Aliant distributions to BCE

73     71     2     2.8 %

FCF

272     304     (32 )   (10.5 %)

Cash Flow Information - Historical Trend

                                 

(unaudited)

                                 

($ millions, except where otherwise indicated)

Q1     Total     Q4     Q3     Q2     Q1  
 

2009

    

2008

     2008     2008     2008     2008  

Free Cash Flow (FCF)

                                 

Cash from operating activities

723     4,716     1,460     1,342     1,193     721  

Capital expenditures

(482 )   (2,459 )   (854 )   (566 )   (583 )   (456 )

Other investing activities

(14 )   (729 )   -     (732 )   -     3  

Dividends paid on preferred shares

(28 )   (129 )   (31 )   (31 )   (32 )   (35 )

Bell Aliant distributions to BCE

73     290     72     73     74     71  

FCF

272     1,689     647     86     652     304  
                                   

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 10

BCE Inc.
Consolidated Balance Sheet Data

 

March 31     December 31  

($ millions, except where otherwise indicated) (unaudited)

2009     2008  

ASSETS

         

Current assets

         

Cash and cash equivalents

2,363     3,059  

Accounts receivable

1,678     1,837  

Future income taxes

88     86  

Inventory

268     272  

Prepaid and other expenses

443     304  

Current assets of discontinued operations

31     20  

Total current assets

4,871     5,578  

Capital assets

         

Property, plant and equipment

19,255     19,407  

Finite-life intangible assets

2,701     2,697  

Indefinite-life intangible assets

3,710     3,697  

Total capital assets

25,666     25,801  

Other long-term assets

2,662     2,613  

Goodwill

5,663     5,659  

Non-current assets of discontinued operations

14     12  

Total assets

38,876     39,663  

LIABILITIES

         

Current liabilities

         

Accounts payable and accrued liabilities

3,145     3,538  

Interest payable

167     139  

Dividends payable

345     337  

Debt due within one year

2,196     2,201  

Current liabilities of discontinued operations

25     12  

Total current liabilities

5,878     6,227  

Long-term debt

10,133     10,099  

Other long-term liabilities

4,908     4,946  

Total liabilities

20,919     21,272  

Non-controlling interest

1,072     1,080  

SHAREHOLDERS’ EQUITY

         

Preferred shares

2,770     2,770  

Common shareholders’ equity

         

Common shares

13,148     13,525  

Treasury stock

(95 )   (86 )

Contributed surplus

2,505     2,531  

Accumulated other comprehensive income

102     39  

Deficit

(1,545 )   (1,468 )

Total common shareholders’ equity

14,115     14,541  

Total shareholders’ equity

16,885     17,311  

Total liabilities and shareholders’ equity

38,876     39,663  

Number of common shares outstanding

780.6     803.1  

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 11

BCE Inc.
Consolidated Cash Flow Data

 

  Q1       Q1          

($ millions, except where otherwise indicated) (unaudited)

  2009       2008       $ change  

Cash flows from operating activities

                     

Net earnings

  406       289       117  

Less: Losses from discontinued operations, net of income taxes and non-controlling interest

   (5 )     (2 )     (3 )

Earnings from continuing operations

  411       291       120  

Adjustments to reconcile earnings from continuing operations to cash flows from operating activities

                     

Depreciation and amortization of intangible assets

  819       818       1  

Net benefit plans cost

  88       71       17  

Restructuring and other

  109       283       (174 )

(Gains) losses on investments

  (2 )     2       (4 )

Future income taxes

  (13 )     (67 )     54  

Non-controlling interest

  82       74       8  

Contributions to employee pension plans

  (92 )     (44 )     (48 )

Other employee future benefit plan payments

  (24 )     (23 )     (1 )

Payments of restructuring and other

  (77 )     (24 )     (53 )

Operating assets and liabilities

  (377 )     (479 )     102  

 

  924       902       22  

Bell Aliant distributions to BCE

  73       71       2  

Capital expenditures

  (590 )     (551 )     (39 )

Other investing activities

  (13 )     3       (16 )

Cash dividends paid on preferred shares

  (28 )     (35 )     7  

Cash distributions paid by subsidiaries to non-controlling interest

  (92 )     (90 )     (2 )

Bell Aliant Free Cash Flow

  (2 )     4       (6 )

Free Cash Flow (3)

  272       304       (32 )

Bell Aliant undistributed Free Cash Flow

  (71 )     (75 )     4  

Business acquisitions

  (20 )     (31 )     11  

Business dispositions

  -       (10 )     10  

Going-private costs

  (6 )     (9 )     3  

Increase in investments

  -       (2 )     2  

Increase in notes payable and bank advances

  88       65       23  

Repayment of long-term debt

  (94 )     (102 )     8  

Cash dividends paid on common shares

  (294 )     (294 )     -  

Issue of common shares

  1       1       -  

Repurchase of common shares

  (557 )     -       (557 )

Other financing activities

  (10 )     (12 )     2  

 

  (963 )     (469 )     (494 )

Cash flows used in continuing operations

  (691 )     (165 )     (526 )

Cash flows used in discontinued operations activities

  (7 )     (11 )     4  

Net decrease in cash and cash equivalents

  (698 )     (176 )     (522 )

Cash and cash equivalents at beginning of period

  3,063       2,658       405  

Cash and cash equivalents at end of period

  2,365       2,482       (117 )

Consists of:

                     

Cash and cash equivalents of continuing operations

  2,363       2,477       (114 )

Cash and cash equivalents of discontinued operations

  2       5       (3 )

Total

  2,365       2,482       (117 )
                       

Other information

                     

Cash flow per share (9)

$ 0.42     $ 0.44     $ (0.02 )

Annualized cash flow yield (10)

  8.5 %     7.6 %     0.9  pts

Common dividend payout (11)

  67.5 %     64.0 %     3.5  pts
                       

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 12

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

 

          Total                                  

($ millions, except where otherwise indicated) (unaudited)

  Q1 09       2008       Q4 08       Q3 08       Q2 08       Q1 08  

Cash flows from operating activities

                                             

Net earnings

  406       943       (18 )     280       392       289  

Less: Losses from discontinued operations, net of income taxes and non-controlling interest

  (5 )     (88 )     (41 )     (22 )     (23 )     (2 )

Earnings from continuing operations

  411       1,031       23       302       415       291  

Adjustments to reconcile earnings from continuing operations to cash flows from operating activities

                                             

Depreciation and amortization of intangible assets

  819       3,269       870       794       787       818  

Net benefit plans cost

  88       250       40       69       70       71  

Restructuring and other

  109       871       207       310       71       283  

(Gains) losses on investments

  (2 )     308       292       14       -       2  

Future income taxes

  (13 )     129       127       (23 )     92       (67 )

Non-controlling interest

  82       320       68       90       88       74  

Contributions to employee pension plans

  (92 )     (232 )     (91 )     (49 )     (48 )     (44 )

Other employee future benefit plan payments

  (24 )     (96 )     (24 )     (25 )     (24 )     (23 )

Payments of restructuring and other

  (77 )     (305 )     (168 )     (84 )     (29 )     (24 )

Operating assets and liabilities

  (377 )     367       476       253       117       (479 )

 

  924       5,912       1,820       1,651       1,539       902  

Bell Aliant distributions to BCE

  73       290       72       73       74       71  

Capital expenditures

  (590 )     (2,988 )     (1,022 )     (705 )     (710 )     (551 )

Other investing activities

  (13 )     (726 )     1       (732 )     2       3  

Cash dividends paid on preferred shares

  (28 )     (129 )     (31 )     (31 )     (32 )     (35 )

Cash distributions paid by subsidiaries to non-controlling interest

  (92 )     (366 )     (92 )     (92 )     (92 )     (90 )

Bell Aliant Free Cash Flow

  (2 )     (304 )     (101 )     (78 )     (129 )     4  

Free Cash Flow

  272       1,689       647       86       652       304  

Bell Aliant undistributed Free Cash Flow

  (71 )     14       29       5       55       (75 )

Business acquisitions

  (20 )     (56 )     (1 )     -       (24 )     (31 )

Business dispositions

  -       (10 )     -       -       -       (10 )

Going-private costs

  (6 )     (163 )     2       (148 )     (8 )     (9 )

Increase in investments

  -       (8 )     (3 )     (1 )     (2 )     (2 )

Decrease in investments

  -       1       -       -       1       -  

Increase (decrease) in notes payable and bank advances

  88       1       (40 )     26       (50 )     65  

Issue of long-term debt

  -       50       -       -       50       -  

Repayment of long-term debt

  (94 )     (502 )     (124 )     (94 )     (182 )     (102 )

Cash dividends paid on common shares

  (294 )     (587 )     -       -       (293 )     (294 )

Issue of common shares

  1       50       23       11       15       1  

Repurchase of common shares

  (557 )     (92 )     (92 )     -       -       -  

Issue of equity securities by subsidiaries to non-controlling interest

  -       1       -       1       -       -  

Other financing activities

  (10 )     15       45       (8 )     (10 )     (12 )

 

  (963 )     (1,286 )     (161 )     (208 )     (448 )     (469 )

Cash flows (used in) from continuing operations

  (691 )     403       486       (122 )     204       (165 )

Cash flows used in discontinued operations activities

  (7 )     (25 )     (5 )     (4 )     (5 )     (11 )

Cash flows from discontinued investing activities

  -       29       -       29       -       -  

Cash flows used in discontinued financing activities

  -       (2 )     -       (2 )     -       -  

Net (decrease) increase in cash and cash equivalents

  (698 )     405       481       (99 )     199       (176 )

Cash and cash equivalents at beginning of period

  3,063       2,658       2,582       2,681       2,482       2,658  

Cash and cash equivalents at end of period

  2,365       3,063       3,063       2,582       2,681       2,482  

Consists of:

                                             

Cash and cash equivalents of continuing operations

  2,363       3,059       3,059       2,578       2,677       2,477  

Cash and cash equivalents of discontinued operations

  2       4       4       4       4       5  

Total

  2,365       3,063       3,063       2,582       2,681       2,482  
                                               

Other information

                                             

Cash flow per share

$ 0.42    

$

3.63    

$

0.99    

$

1.17       $ 1.03    

$

0.44  

Annualized cash flow yield

  8.5 %     8.4 %     8.4 %     5.7 %     8.1 %     7.6 %

Common dividend payout

  67.5 %     32.4 %     66.4 %     0.0 %     0.0 %     64.0 %
 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 13

 

Accompanying Notes

(1)

Throughout this report, BCE means BCE Inc., its subsidiaries and joint ventures; Bell means our Bell Wireline and Bell Wireless segments on an aggregate basis; and Bell Aliant means Bell Aliant Regional Communications Income Fund and its affiliated entities.
 
(2)

We report our results of operations in three segments: Bell Wireline, Bell Wireless and Bell Aliant. Our reporting structure reflects how we manage our business and how we classify our operations for planning and measuring performance. Accordingly, we operate and manage our reportable segments as strategic business units organized by products and services.

During the third quarter of 2008, certain elements of our operating segments were realigned to reflect changes in our management accountabilities for operations. Our reportable segments did not change.
 
(3)

Non-GAAP Financial Measures

EBITDA
The term EBITDA (earnings before interest, taxes, depreciation and amortization of intangible assets) does not have any standardized meaning according to Canadian generally accepted accounting principles (GAAP). It is therefore unlikely to be comparable to similar measures presented by other companies.

We define EBITDA as operating revenues less cost of revenue, selling, general and administrative expenses and net benefit plans costs, meaning it represents operating income before depreciation, amortization of intangible assets and restructuring and other.

We use EBITDA, among other measures, to assess the operating performance of our ongoing businesses without the effects of depreciation, amortization of intangible assets and restructuring and other. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. We exclude depreciation and amortization of intangible assets because it largely depends on the accounting methods and assumptions a company uses, as well as non-operating factors, such as the historical cost of capital assets. Excluding restructuring and other does not imply they are non-recurring.

EBITDA allows us to compare our operating performance on a consistent basis. We believe that certain investors and analysts use EBITDA to measure a company’s ability to service debt and to meet other payment obligations, or as a common valuation measurement in the telecommunications industry.

The most comparable Canadian GAAP financial measure is operating income.

Adjusted earnings per share (EPS)
The term adjusted EPS does not have any standardized meaning according to Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies.

We define adjusted EPS as EPS before restructuring and other and net losses (gains) on investments.

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 14

Accompanying Notes

 

 

We use adjusted EPS among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other and net losses (gains) on investments. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring.

The most comparable Canadian GAAP financial measure is EPS.

FREE CASH FLOW
The term free cash flow does not have any standardized meaning according to Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies.

We define free cash flow as cash from operating activities and distributions received from Bell Aliant less capital expenditures, preferred share dividends, distributions paid by subsidiaries to non-controlling interest, other investing activities and Bell Aliant free cash flow.

We consider free cash flow to be an important indicator of the financial strength and performance of our business because it shows how much cash is available to repay debt and to reinvest in our company. We present free cash flow on a consistent basis from period to period, which allows us to compare our financial performance on a consistent basis.

We believe that certain investors and analysts use free cash flow when valuing a business and its underlying assets.

The most comparable Canadian GAAP financial measure is cash from operating activities.
 
(4)

EBITDA margin is calculated as follows:

EBITDA
Operating revenues
 
(5)

Capital Intensity is calculated as follows:

Capital expenditures
Operating revenues
 
(6)

Average revenue per unit (ARPU) represents the measurement of the average revenue generated by each unit, expressed as a rate per month for the year.
 
(7)

Churn is the rate at which existing subscribers cancel their services. Churn is calculated as the number of subscribers disconnected divided by the average subscriber base.
 
(8)

Cost of acquisition (COA) is also referred to as subscriber acquisition costs. This measure is expressed per gross activation. It includes costs associated with acquiring a customer such as hardware subsidies, marketing and distribution costs.
 

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 15

 

Accompanying Notes

(9)

Cash flow per share is calculated as follows:

Cash flow from operating activities less capital expenditures
Average number of common shares outstanding
 
(10)

Annualized cash flow yield is calculated as follows:

Trailing 12 month free cash flow
Number of common shares outstanding at end of period multiplied by share price at end of period
 
(11)

Common dividend payout is calculated as follows:

Dividends per common share
Adjusted EPS

 

BCE Inc. Supplementary Financial Information - First Quarter 2009  Page 16