EX-99.3 4 suppq309.htm SUPPLEMENTARY FINANCIAL INFORMATION - THIRD QUARTER 2009 BCE Inc. Supplementary Financial Information – Third Quarter 2009

EXHIBIT 99.3

 

 

 

BCE Inc. (1)
Consolidated Operational Data

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

  Q3
2009 		      Q3
2008 		       $ change     % change       YTD
2009 		      YTD
2008 		      $ change     % change  

Operating revenues

  4,457       4,437       20     0.5 %     13,085       13,185       (100 )   (0.8 %)

Cost of revenue, exclusive of depreciation and amortization

  (1,152 )     (1,087 )     (65 )   (6.0 %)     (3,267 )     (3,215 )     (52 )   (1.6 %)

Selling, general and administrative expenses (A)

  (1,418 )     (1,512 )     94     6.2 %     (4,204 )     (4,497 )     293     6.5 %

Net benefit plans cost

  (86 )     (69 )     (17 )   (24.6 %)     (262 )     (210 )     (52 )   (24.8 %)

EBITDA (3)

  1,801       1,769       32     1.8 %     5,352       5,263       89     1.7 %

EBITDA margin (4)

  40.4 %     39.9 %           0.5  pts     40.9 %     39.9 %           1.0  pt

Depreciation

  (636 )     (619 )     (17 )   (2.7 %)     (1,891 )     (1,854 )     (37 )   (2.0 %)

Amortization of intangible assets

  (192 )     (173 )     (19 )   (11.0 %)     (576 )     (542 )     (34 )   (6.3 %)

Restructuring and other

  (191 )     (310 )     119     38.4 %     (445 )     (664 )     219     33.0 %

Operating income

  782       667       115     17.2 %     2,440       2,203       237     10.8 %

Other (expense) income

  (24 )     2       (26 )   n.m.       (46 )     30       (76 )   n.m.  

Interest expense

  (171 )     (193 )     22     11.4 %     (541 )     (584 )     43     7.4 %

Pre-tax earnings from continuing operations

  587       476       111     23.3 %     1,853       1,649       204     12.4 %

Income tax recovery (expense)

  87       (82 )     169     n.m.       (227 )     (385 )     158     41.0 %

Non-controlling interest

  (90 )     (91 )     1     1.1 %     (254 )     (254 )     -     0.0 %

Earnings from continuing operations

  584       303       281     92.7 %     1,372       1,010       362     35.8 %

Discontinued operations

  -       (23 )     23     100.0 %     (10 )     (49 )     39     79.6 %

Net earnings

  584       280       304     n.m.       1,362       961       401     41.7 %

Dividends on preferred shares

  (26 )     (32 )     6     18.8 %     (81 )     (94 )     13     13.8 %

Net earnings applicable to common shares

  558       248       310     n.m.       1,281       867       414     47.8 %

Net earnings per common share – basic

                                                         

Continuing operations

$ 0.72     $ 0.34     $ 0.38     n.m.     $ 1.66     $ 1.14     $ 0.52     45.6 %

Discontinued operations

$ -     $ (0.03 )   $ 0.03     100.0 %   $ (0.01 )   $ (0.06 )   $ 0.05     83.3 %

Net earnings

$ 0.72     $ 0.31     $ 0.41     n.m.     $ 1.65     $ 1.08     $ 0.57     52.8 %

Net earnings per common share – diluted

                                                         

Continuing operations

$ 0.72     $ 0.33     $ 0.39     n.m.     $ 1.66     $ 1.13     $ 0.53     46.9 %

Discontinued operations

$ -     $ (0.03 )   $ 0.03     100.0 %   $ (0.01 )   $ (0.06 )   $ 0.05     83.3 %

Net earnings

$ 0.72     $ 0.30     $ 0.42     n.m.     $ 1.65     $ 1.07     $ 0.58     54.2 %

Dividends per common share

$ 0.405     $ -     $ 0.405     n.m.     $ 1.175     $ 0.365     $ 0.810     n.m.  

Average number of common shares outstanding – basic (millions)

  767.2       806.0                     774.8       805.6                

Average number of common shares outstanding – diluted (millions)

  767.2       808.3                     774.8       807.4                
                                                           

The following items are included in net earnings:

                                                         

Net gains (losses) on investments

                                                         

Continuing operations

  36       (14 )     50     n.m.       37       (12 )     49     n.m.  

Discontinued operations

  (4 )     (16 )     12     75.0 %     (7 )     (36 )     29     80.6 %

Restructuring and other

  (123 )     (210 )     87     41.4 %     (291 )     (455 )     164     36.0 %

Total

  (91 )     (240 )     149     62.1 %     (261 )     (503 )     242     48.1 %

Impact on net earnings per share

$ (0.12 )   $ (0.29 )   $ 0.17     58.6 %   $ (0.34 )   $ (0.62 )   $ 0.28     45.2 %

Adjusted EPS (3)

$ 0.84     $ 0.60     $ 0.24     40.0 %   $ 1.99     $ 1.70     $ 0.29     17.1 %
                                                           
 
(A)

Excludes net benefit plans cost

n.m. : not meaningful

 

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 2

BCE Inc.
Consolidated Operational Data - Historical Trend

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

  YTD
2009 		      Q3 09       Q2 09       Q1 09       Total
2008 		      Q4 08       Q3 08       Q2 08       Q1 08  

Operating revenues

  13,085       4,457       4,297       4,331       17,661       4,476       4,437       4,388       4,360  

Cost of revenue, exclusive of depreciation and amortization

  (3,267 )     (1,152 )     (1,029 )     (1,086 )     (4,389 )     (1,174 )     (1,087 )     (1,071 )     (1,057 )

Selling, general and administrative expenses (A)

  (4,204 )     (1,418 )     (1,389 )     (1,397 )     (6,018 )     (1,521 )     (1,512 )     (1,504 )     (1,481 )

Net benefit plans cost

  (262 )     (86 )     (88 )     (88 )     (250 )     (40 )     (69 )     (70 )     (71 )

EBITDA

  5,352       1,801       1,791       1,760       7,004       1,741       1,769       1,743       1,751  

EBITDA margin

  40.9 %     40.4 %     41.7 %     40.6 %     39.7 %     38.9 %     39.9 %     39.7 %     40.2 %

Depreciation

  (1,891 )     (636 )     (630 )     (625 )     (2,537 )     (683 )     (619 )     (612 )     (623 )

Amortization of intangible assets

  (576 )     (192 )     (191 )     (193 )     (727 )     (185 )     (173 )     (175 )     (194 )

Restructuring and other

  (445 )     (191 )     (146 )     (108 )     (871 )     (207 )     (310 )     (71 )     (283 )

Operating income

  2,440       782       824       834       2,869       666       667       885       651  

Other (expense) income

  (46 )     (24 )     (23 )     1       (253 )     (283 )     2       6       22  

Interest expense

  (541 )     (171 )     (179 )     (191 )     (791 )     (207 )     (193 )     (193 )     (198 )

Pre-tax earnings from continuing operations

  1,853       587       622       644       1,825       176       476       698       475  

Income tax (expense) recovery

  (227 )     87       (166 )     (148 )     (469 )     (84 )     (82 )     (194 )     (109 )

Non-controlling interest

  (254 )     (90 )     (80 )     (84 )     (323 )     (69 )     (91 )     (89 )     (74 )

Earnings from continuing operations

  1,372       584       376       412       1,033       23       303       415       292  

Discontinued operations

  (10 )     -       (4 )     (6 )     (90 )     (41 )     (23 )     (23 )     (3 )

Net earnings (loss)

  1,362       584       372       406       943       (18 )     280       392       289  

Dividends on preferred shares

  (81 )     (26 )     (26 )     (29 )     (124 )     (30 )     (32 )     (31 )     (31 )

Net earnings (loss) applicable to common shares

  1,281       558       346       377       819       (48 )     248       361       258  

Net earnings (loss) per common share – basic

                                                                     

Continuing operations

$ 1.66     $ 0.72     $ 0.45     $ 0.49     $ 1.13     $ (0.01 )   $ 0.34     $ 0.48     $ 0.32  

Discontinued operations

$ (0.01 )   $ -     $

-

    $ (0.01 )   $ (0.11 )   $ (0.05 )   $ (0.03 )   $ (0.03 )   $ -  

Net earnings

$ 1.65     $ 0.72     $ 0.45     $ 0.48     $ 1.02     $ (0.06 )   $ 0.31     $ 0.45     $ 0.32  

Net earnings (loss) per common share – diluted

                                                                     

Continuing operations

$ 1.66     $ 0.72     $ 0.45     $ 0.49     $ 1.12     $ (0.01 )   $ 0.33     $ 0.48     $ 0.32  

Discontinued operations

$ (0.01 )   $ -     $

-

    $ (0.01 )   $ (0.11 )   $ (0.05 )   $ (0.03 )   $ (0.03 )   $ -  

Net earnings

$ 1.65     $ 0.72     $ 0.45     $ 0.48     $ 1.01     $ (0.06 )   $ 0.30     $ 0.45     $ 0.32  

Dividends per common share

$ 1.175     $ 0.405     $ 0.385     $ 0.385     $ 0.730     $ 0.365     $ -     $ -     $ 0.365  

Average number of common shares outstanding – basic (millions)

  774.8       767.2       769.0       788.3       805.8       806.4       806.0       805.6       805.3  

Average number of common shares outstanding – diluted (millions)

  774.8       767.2       769.0       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

  37       36       -       1       (358 )     (346 )     (14 )     4       (2 )

Discontinued operations

  (7 )     (4 )     (3 )     -       (62 )     (26 )     (16 )     (20 )     -  

Restructuring and other

  (291 )     (123 )     (98 )     (70 )     (572 )     (117 )     (210 )     (48 )     (197 )

Total

  (261 )     (91 )     (101 )     (69 )     (992 )     (489 )     (240 )     (64 )     (199 )

Impact on net earnings per share

$ (0.34 )   $ (0.12 )   $ (0.13 )   $ (0.09 )   $ (1.23 )   $ (0.61 )   $ (0.29 )   $ (0.08 )   $ (0.25 )

Adjusted EPS

$ 1.99     $ 0.84     $ 0.58     $ 0.57     $ 2.25     $ 0.55     $ 0.60     $ 0.53     $ 0.57  
 
(A) Excludes net benefit plans cost

 

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 3

BCE Inc.
Segmented Data (2)

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

Q3
2009 		    Q3
2008 		    $ change     % change     YTD
2009 		    YTD
2008 		    $ change     % change  
                                               

Revenues

                                             

Bell Wireline

2,659     2,632     27     1.0 %   7,826     7,914     (88 )   (1.1 %)

Bell Wireless

1,178     1,175     3     0.3 %   3,360     3,346     14     0.4 %

Inter-segment eliminations

(49 )   (65 )   16     24.6 %   (148 )   (187 )   39     20.9 %

Total Bell

3,788     3,742     46     1.2 %   11,038     11,073     (35 )   (0.3 %)

Bell Aliant

786     812     (26 )   (3.2 %)   2,389     2,491     (102 )   (4.1 %)

Inter-segment eliminations

(117 )   (117 )   -     0.0 %   (342 )   (379 )   37     9.8 %

Total BCE Inc.

4,457     4,437     20     0.5 %   13,085     13,185     (100 )   (0.8 %)
                                               

EBITDA

                                             

Bell Wireline

973     953     20     2.1 %   2,947     2,931     16     0.5 %

Margin

36.6 %   36.2 %         0.4  pts   37.7 %   37.0 %         0.7  pts

Bell Wireless

475     474     1     0.2 %   1,377     1,326     51     3.8 %

Margin

40.3 %   40.3 %         0.0  pts   41.0 %   39.6 %         1.4  pts

Total Bell

1,448     1,427     21     1.5 %   4,324     4,257     67     1.6 %

Margin

38.2 %   38.1 %         0.1  pts   39.2 %   38.4 %         0.8  pts

Bell Aliant

353     342     11     3.2 %   1,028     1,006     22     2.2 %

Margin

44.9 %   42.1 %         2.8  pts   43.0 %   40.4 %         2.6  pts

Total BCE Inc.

1,801     1,769     32     1.8 %   5,352     5,263     89     1.7 %

Margin

40.4 %   39.9 %         0.5  pts   40.9 %   39.9 %         1.0  pts

Operating income

                                             

Bell Wireline

229     125     104     83.2 %   868     676     192     28.4 %

Bell Wireless

354     338     16     4.7 %   992     947     45     4.8 %

Total Bell

583     463     120     25.9 %   1,860     1,623     237     14.6 %

Bell Aliant

199     204     (5 )   (2.5 %)   580     580     -     0.0 %

Total BCE Inc.

782     667     115     17.2 %   2,440     2,203     237     10.8 %
                                               

Capital expenditures

                                             

Bell Wireline

412     473     61     12.9 %   1,219     1,341     122     9.1 %

Capital Intensity (5)

15.5 %   18.0 %         2.5  pts   15.6 %   16.9 %         1.3  pts

Bell Wireless

177     93     (84 )   (90.3 %)   531     264     (267 )   n.m.  

Capital Intensity

15.0 %   7.9 %         (7.1 ) pts   15.8 %   7.9 %         (7.9 ) pts

Total Bell

589     566     (23 )   (4.1 %)   1,750     1,605     (145 )   (9.0 %)

Capital Intensity

15.5 %   15.1 %         (0.4 ) pts   15.9 %   14.5 %         (1.4 ) pts

Bell Aliant

115     139     24     17.3 %   344     360     16     4.4 %

Capital Intensity

14.6 %   17.1 %         2.5  pts   14.4 %   14.5 %         0.1  pts

Total BCE Inc.

704     705     1     0.1 %   2,094     1,965     (129 )   (6.6 %)

Capital Intensity

15.8 %   15.9 %         0.1  pts   16.0 %   14.9 %         (1.1 ) pts
                                               

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 4

BCE Inc.
Segmented Data - Historical Trend

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

YTD
2009 		    Q3 09     Q2 09     Q1 09     Total
2008 		    Q4 08     Q3 08     Q2 08     Q1 08  
                                                     

Revenues

                                                   

Bell Wireline

7,826     2,659     2,575     2,592     10,640     2,726     2,632     2,627     2,655  

Bell Wireless

3,360     1,178     1,104     1,078     4,479     1,133     1,175     1,120     1,051  

Inter-segment eliminations

(148 )   (49 )   (51 )   (48 )   (248 )   (61 )   (65 )   (64 )   (58 )

Total Bell

11,038     3,788     3,628     3,622     14,871     3,798     3,742     3,683     3,648  

Bell Aliant

2,389     786     785     818     3,297     806     812     829     850  

Inter-segment eliminations

(342 )   (117 )   (116 )   (109 )   (507 )   (128 )   (117 )   (124 )   (138 )

Total BCE Inc.

13,085     4,457     4,297     4,331     17,661     4,476     4,437     4,388     4,360  
                                                     

EBITDA

                                                   

Bell Wireline

2,947     973     982     992     3,868     937     953     966     1,012  

Margin

37.7 %   36.6 %   38.1 %   38.3 %   36.4 %   34.4 %   36.2 %   36.8 %   38.1 %

Bell Wireless

1,377     475     468     434     1,770     444     474     442     410  

Margin

41.0 %   40.3 %   42.4 %   40.3 %   39.5 %   39.2 %   40.3 %   39.5 %   39.0 %

Total Bell

4,324     1,448     1,450     1,426     5,638     1,381     1,427     1,408     1,422  

Margin

39.2 %   38.2 %   40.0 %   39.4 %   37.9 %   36.4 %   38.1 %   38.2 %   39.0 %

Bell Aliant

1,028     353     341     334     1,366     360     342     335     329  

Margin

43.0 %   44.9 %   43.4 %   40.8 %   41.4 %   44.7 %   42.1 %   40.4 %   38.7 %

Total BCE Inc.

5,352     1,801     1,791     1,760     7,004     1,741     1,769     1,743     1,751  

Margin

40.9 %   40.4 %   41.7 %   40.6 %   39.7 %   38.9 %   39.9 %   39.7 %   40.2 %

Operating income

                                                   

Bell Wireline

868     229     290     349     902     226     125     370     181  

Bell Wireless

992     354     338     300     1,241     294     338     316     293  

Total Bell

1,860     583     628     649     2,143     520     463     686     474  

Bell Aliant

580     199     196     185     726     146     204     199     177  

Total BCE Inc.

2,440     782     824     834     2,869     666     667     885     651  
                                                     

Capital expenditures

                                                   

Bell Wireline

1,219     412     455     352     1,966     625     473     479     389  

Capital Intensity

15.6 %   15.5 %   17.7 %   13.6 %   18.5 %   22.9 %   18.0 %   18.2 %   14.7 %

Bell Wireless

531     177     224     130     493     229     93     104     67  

Capital Intensity

15.8 %   15.0 %   20.3 %   12.1 %   11.0 %   20.2 %   7.9 %   9.3 %   6.4 %

Total Bell

1,750     589     679     482     2,459     854     566     583     456  

Capital Intensity

15.9 %   15.5 %   18.7 %   13.3 %   16.5 %   22.5 %   15.1 %   15.8 %   12.5 %

Bell Aliant

344     115     121     108     527     167     139     127     94  

Capital Intensity

14.4 %   14.6 %   15.4 %   13.2 %   16.0 %   20.7 %   17.1 %   15.3 %   11.1 %

Total BCE Inc.

2,094     704     800     590     2,986     1,021     705     710     550  

Capital Intensity

16.0 %   15.8 %   18.6 %   13.6 %   16.9 %   22.8 %   15.9 %   16.2 %   12.6 %

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 5

Bell Wireline (2)

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

Q3
2009 		    Q3
2008 		    % change     YTD
2009 		    YTD
2008 		    % change  

Bell Wireline

                                 

Local & access

783     833     (6.0 %)   2,384     2,535     (6.0 %)

Long distance

264     290     (9.0 %)   813     886     (8.2 %)

Data

892     914     (2.4 %)   2,723     2,712     0.4 %

Video

400     363     10.2 %   1,176     1,075     9.4 %

Equipment & other

241     135     78.5 %   493     431     14.4 %

Total external revenues

2,580     2,535     1.8 %   7,589     7,639     (0.7 %)

Inter-segment revenues

79     97     (18.6 %)   237     275     (13.8 %)

Total Bell Wireline operating revenue

2,659     2,632     1.0 %   7,826     7,914     (1.1 %)

Operating expenses

(1,686 )   (1,679 )   (0.4 %)   (4,879 )   (4,983 )   2.1 %

EBITDA

973     953     2.1 %   2,947     2,931     0.5 %

EBITDA Margin

36.6 %   36.2 %   0.4  pts   37.7 %   37.0 %   0.7  pts

Operating income

229     125     83.2 %   868     676     28.4 %
                                   

Capital expenditures

412     473     12.9 %   1,219     1,341     9.1 %

Capital intensity

15.5 %   18.0 %   2.5  pts   15.6 %   16.9 %   1.3  pts
                                   

Local

                                 

Network access services (NAS) (k)

                                 

Residential

3,976     4,303     (7.6 %)   3,976     4,303     (7.6 %)

Business

3,121     3,233     (3.5 %)   3,121     3,233     (3.5 %)

Total

7,097     7,536     (5.8 %)   7,097     7,536     (5.8 %)

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

                                 

Residential

(77 )   (72 )   (6.9 %)   (255 )   (303 )   15.8 %

Business

(26 )   -     n.m.     (84 )   (20 )   n.m.  

Total

(103 )   (72 )   (43.1 %)   (339 )   (323 )   (5.0 %)

Long Distance (LD)

                                 

Conversation minutes (M)

2,731     2,853     (4.3 %)   8,497     8,768     (3.1 %)

Average revenue per minute ($)

0.085     0.093     (8.6 %)   0.085     0.092     (7.6 %)

Internet

                                 

High Speed Internet net activations (k)

22     33     (33.3 %)   30     42     (28.6 %)

High Speed Internet subscribers EOP (k)

2,084     2,046     1.9 %   2,084     2,046     1.9 %

Video (DTH and VDSL)

                                 

Video EBITDA

83     76     9.2 %   266     200     33.0 %

Net subscriber activations (k)

40     7     n.m.     72     16     n.m.  

Total subscribers EOP (k)

1,924     1,838     4.7 %   1,924     1,838     4.7 %

ARPU (6) ($/month)

69.35     65.20     6.4 %   69.06     64.77     6.6 %

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

1.4 %   1.4 %   0.0  pts   1.2 %   1.2 %   0.0  pts

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 6

Bell Wireline - Historical Trend

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

YTD
2009 		    Q3 09     Q2 09     Q1 09     Total
2008 		    Q4 08     Q3 08     Q2 08     Q1 08  

Bell Wireline

                                                   

Local & access

2,384     783     796     805     3,360     825     833     845     857  

Long distance

813     264     271     278     1,165     279     290     298     298  

Data

2,723     892     919     912     3,723     1,011     914     894     904  

Video

1,176     400     389     387     1,450     375     363     356     356  

Equipment & other

493     241     119     133     574     143     135     143     153  

Total external revenues

7,589     2,580     2,494     2,515     10,272     2,633     2,535     2,536     2,568  

Inter-segment revenues

237     79     81     77     368     93     97     91     87  

Total Bell Wireline operating revenue

7,826     2,659     2,575     2,592     10,640     2,726     2,632     2,627     2,655  

Operating expenses

(4,879 )   (1,686 )   (1,593 )   (1,600 )   (6,772 )   (1,789 )   (1,679 )   (1,661 )   (1,643 )

EBITDA

2,947     973     982     992     3,868     937     953     966     1,012  

EBITDA Margin

37.7 %   36.6 %   38.1 %   38.3 %   36.4 %   34.4 %   36.2 %   36.8 %   38.1 %

Operating income

868     229     290     349     902     226     125     370     181  
                                                     

Capital expenditures

1,219     412     455     352     1,966     625     473     479     389  

Capital intensity

15.6 %   15.5 %   17.7 %   13.6 %   18.5 %   22.9 %   18.0 %   18.2 %   14.7 %
                                                     

Local

                                                   

Network access services (NAS) (k)

                                                   

Residential (A)

3,976     3,976     4,053     4,153     4,231     4,231     4,303     4,375     4,500  

Business (B)

3,121     3,121     3,147     3,179     3,205     3,205     3,233     3,233     3,240  

Total

7,097     7,097     7,200     7,332     7,436     7,436     7,536     7,608     7,740  

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

                                                   

Residential

(255 )   (77 )   (100 )   (78 )   (375 )   (72 )   (72 )   (125 )   (106 )

Business (B)

(84 )   (26 )   (32 )   (26 )   (48 )   (28 )   -     (7 )   (13 )

Total

(339 )   (103 )   (132 )   (104 )   (423 )   (100 )   (72 )   (132 )   (119 )

Long Distance (LD)

                                                   

Conversation minutes (M)

8,497     2,731     2,915     2,851     11,771     3,003     2,853     2,985     2,930  

Average revenue per minute ($)

0.085     0.085     0.084     0.085     0.089     0.082     0.093     0.089     0.093  

Internet

                                                   

High Speed Internet net activations (k)

30     22     2     6     50     8     33     (1 )   10  

High Speed Internet subscribers EOP (k)

2,084     2,084     2,062     2,060     2,054     2,054     2,046     2,013     2,014  

Video (DTH and VDSL)

                                                   

Video EBITDA

266     83     91     92     282     82     76     47     77  

Net subscriber activations (k)

72     40     20     12     30     14     7     8     1  

Total subscribers EOP (k)

1,924     1,924     1,884     1,864     1,852     1,852     1,838     1,831     1,823  

ARPU ($/month)

69.06     69.35     68.98     68.84     65.37     67.15     65.20     64.47     64.65  

Churn (%) (average per month)

1.2 %   1.4 %   1.1 %   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 – Third Quarter 2009 Page 7

Bell Wireless (2)

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

Q3
2009 		    Q3
2008 		    % change     YTD
2009 		    YTD
2008 		    % change  

Bell Wireless

                                 
                                   

Revenue

                                 

Service

1,056     1,062     (0.6 %)   3,047     3,026     0.7 %

Product

106     104     1.9 %   276     285     (3.2 %)

Total external Bell Wireless revenues

1,162     1,166     (0.3 %)   3,323     3,311     0.4 %

Inter-segment

16     9     77.8 %   37     35     5.7 %

Total Bell Wireless operating revenues

1,178     1,175     0.3 %   3,360     3,346     0.4 %

Operating expenses

(703 )   (701 )   (0.3 %)   (1,983 )   (2,020 )   1.8 %

EBITDA

475     474     0.2 %   1,377     1,326     3.8 %

EBITDA margin (Total revenues)

40.3 %   40.3 %   0.0  pts   41.0 %   39.6 %   1.4  pts

EBITDA margin (Service revenues)

45.0 %   44.6 %   0.4  pts   45.2 %   43.8 %   1.4  pts

Operating Income

354     338     4.7 %   992     947     4.8 %
                                   

Capital expenditures

177     93     (90.3 %)   531     264     n.m.  

Capital intensity

15.0 %   7.9 %   (7.1 ) pts   15.8 %   7.9 %   (7.9 ) pts
                                   

Wireless gross activations (A) (k)

501     439     14.1 %   1,271     1,181     7.6 %

Post-paid

302     267     13.1 %   756     718     5.3 %

Wireless net activations (A) (k)

135     117     15.4 %   210     234     (10.3 %)

Post-paid

122     113     8.0 %   221     252     (12.3 %)

Wireless subscribers EOP (A) (k)

6,707     6,449     4.0 %   6,707     6,449     4.0 %

Post-paid

4,966     4,708     5.5 %   4,966     4,708     5.5 %

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

52.13     56.30     (7.4 %)   51.90     54.31     (4.4 %)

Pre-paid

18.36     18.19     0.9 %   16.83     17.38     (3.2 %)

Post-paid

64.09     68.17     (6.0 %)   63.00     66.23     (4.9 %)

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

1.8 %   1.6 %   (0.2 ) pts   1.7 %   1.6 %   (0.1 ) pts

Pre-paid

3.5 %   3.2 %   (0.3 ) pts   3.2 %   3.0 %   (0.2 ) pts

Post-paid

1.3 %   1.1 %   (0.2 ) pts   1.3 %   1.2 %   (0.1 ) pts

Usage per subscriber (B) (min/month)

309     302     2.3 %   306     295     3.7 %

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

320     398     19.6 %   352     403     12.7 %

PRO FORMA (C)

                                 

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

52.13     54.63     (4.6 %)   50.80     52.72     (3.6 %)

Pre-paid

18.36     18.84     (2.5 %)   17.22     18.00     (4.3 %)

Post-paid

64.09     68.07     (5.8 %)   62.91     66.17     (4.9 %)

Churn (%) (C) (average per month)

1.8 %   1.7 %   (0.1 ) pts   1.8 %   1.7 %   (0.1 ) pts

Pre-paid

3.5 %   3.1 %   (0.4 ) pts   3.3 %   3.0 %   (0.3 ) pts

Post-paid

1.3 %   1.1 %   (0.2 ) pts   1.3 %   1.2 %   (0.1 ) pts

Usage per subscriber (C) (min/month)

309     294     5.1 %   300     287     4.5 %

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

320     378     15.3 %   340     384     11.5 %
 
(A) Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B) Beginning in Q3 2009, wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect 100% of Virgin’s results due to our acquisition on July 1, 2009 of the remaining 50% not already owned. All prior periods reflect the original 50% ownership.
(C) Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition in the prior years have been restated to include 100% of Virgin Mobile results, rather than 50%.

 

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 8

Bell Wireless - Historical Trend

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

YTD
2009 		    Q3 09     Q2 09     Q1 09     Total
2008 		    Q4 08     Q3 08     Q2 08     Q1 08  

Bell Wireless

                                                   
                                                     

Revenue

                                                   

Service

3,047     1,056     1,005     986     4,059     1,033     1,062     1,008     956  

Product

276     106     88     82     375     90     104     99     82  

Total external Bell Wireless revenues

3,323     1,162     1,093     1,068     4,434     1,123     1,166     1,107     1,038  

Inter-segment

37     16     11     10     45     10     9     13     13  

Total Bell Wireless operating revenues

3,360     1,178     1,104     1,078     4,479     1,133     1,175     1,120     1,051  

Operating expenses

(1,983 )   (703 )   (636 )   (644 )   (2,709 )   (689 )   (701 )   (678 )   (641 )

EBITDA

1,377     475     468     434     1,770     444     474     442     410  

EBITDA margin (Total revenues)

41.0 %   40.3 %   42.4 %   40.3 %   39.5 %   39.2 %   40.3 %   39.5 %   39.0 %

EBITDA margin (Service revenues)

45.2 %   45.0 %   46.6 %   44.0 %   43.6 %   43.0 %   44.6 %   43.8 %   42.9 %

Operating Income

992     354     338     300     1,241     294     338     316     293  
                                                     

Capital expenditures

531     177     224     130     493     229     93     104     67  

Capital intensity

15.8 %   15.0 %   20.3 %   12.1 %   11.0 %   20.2 %   7.9 %   9.3 %   6.4 %
                                                     

Wireless gross activations (A) (k)

1,271     501     404     366     1,651     470     439     391     351  

Post-paid

756     302     244     210     970     252     267     253     198  

Wireless net activations (A) (k)

210     135     45     30     351     117     117     83     34  

Post-paid

221     122     64     35     332     80     113     111     28  

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

6,707     6,707     6,572     6,527     6,497     6,497     6,449     6,332     6,250  

Post-paid

4,966     4,966     4,844     4,780     4,745     4,745     4,708     4,595     4,478  

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

51.90     52.13     52.05     51.52     54.29     54.22     56.30     54.27     52.32  

Pre-paid

16.83     18.36     16.41     15.38     17.14     16.40     18.19     17.48     16.50  

Post-paid

63.00     64.09     62.58     62.34     66.09     65.69     68.17     66.19     64.27  

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

1.7 %   1.8 %   1.7 %   1.6 %   1.6 %   1.7 %   1.6 %   1.6 %   1.6 %

Pre-paid

3.2 %   3.5 %   3.3 %   2.9 %   3.1 %   3.3 %   3.2 %   3.0 %   2.8 %

Post-paid

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

Usage per subscriber (D) (min/month)

306     309     316     293     301     310     302     305     281  

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

352     320     356     397     395     373     398     417     396  

PRO FORMA (E)

                                                   

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

50.80     52.13     50.46     49.84     52.70     52.56     54.63     52.70     50.84  

Pre-paid

17.22     18.36     17.26     16.05     17.83     17.33     18.84     18.05     17.11  

Post-paid

62.91     64.09     62.48     62.24     66.02     65.47     68.07     66.16     64.27  

Churn (%) (E) (average per month)

1.8 %   1.8 %   1.8 %   1.7 %   1.7 %   1.8 %   1.7 %   1.6 %   1.7 %

Pre-paid

3.3 %   3.5 %   3.3 %   3.0 %   3.1 %   3.4 %   3.1 %   3.0 %   2.8 %

Post-paid

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

Usage per subscriber (E) (min/month)

300     309     307     285     292     302     294     296     273  

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

340     320     333     374     373     347     378     400     374  
 
(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)

Beginning in Q3 2009, wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect 100% of Virgin’s results due to our acquisition on July 1, 2009 of the remaining 50% not already owned. All prior periods reflect the original 50% ownership.
(E)

Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition in the prior years have been restated to include 100% of Virgin Mobile results, rather than 50%.

 

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 9

     BCE Inc.
Net debt and other information (2)

BCE Inc. - Net debt and preferreds

               

 

                

At September 30, 2009

BCE Inc. 

(unaudited)

               

($ millions, except where otherwise indicated)

               

 

      Bell        

 

Bell     Aliant    

BCE Inc.

 

Debt due within one year

464     96     560  

Long-term debt

7,757     2,751     10,508  

Securitization of accounts receivable

1,140     165     1,305  

Preferred shares - BCE

2,770     -     2,770  

Cash and cash equivalents

(1,159 )   (28 )   (1,187 )

Net debt

10,972     2,984     13,956  

Bell - Balance Sheet Information

                     

(unaudited)

                     

($ millions, except where otherwise indicated)

September 30     June 30     March 31*     Dec. 31*  

 

2009     2009     2009     2008  

Debt due within one year

464     1,077     1,788     1,878  

Long-term debt

7,757     7,825     7,685     7,648  

Securitization of accounts receivable

1,140     1,140     1,108     1,140  

Preferred shares - BCE

2,770     2,770     2,770     2,770  

Cash and cash equivalents

(1,159 )   (1,749 )   (2,339 )   (3,045 )

Net Debt

10,972     11,063     11,012     10,391  
                       

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

1.83     1.85     1.86     1.75  

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

8.52     8.34     8.24     8.33  
 

* Includes $650 million BCE debt.


Cash Flow Information

                                             

(unaudited)

Q3
2009 		    Q3
2008 		    $ change     % change     YTD
2009 		    YTD
2008 		    $ change     % change  

($ millions, except where otherwise indicated)

                             
                                               

Free Cash Flow (FCF)

                                             

Cash from operating activities

1,230     1,342     (112 )   (8.3 %)   3,134     3,256     (122 )   (3.7 %)

Capital expenditures

(589 )   (566 )   (23 )   (4.1 %)   (1,750 )   (1,605 )   (145 )   (9.0 %)

Other investing activities

(39 )   (732 )   693     94.7 %   (81 )   (729 )   648     88.9 %

Dividends paid on preferred shares

(26 )   (31 )   5     16.1 %   (81 )   (98 )   17     17.3 %

Bell Aliant distributions to BCE

73     73     -     0.0 %   219     218     1     0.5 %

FCF

649     86     563     n.m.     1,441     1,042     399     38.3 %
                                               

Cash Flow Information - Historical Trend

                                                   

(unaudited)

YTD
2009 		    Q3
2009 		    Q2
2009 		    Q1
2009 		    Total
2008 		    Q4
2008 		    Q3
2008 		    Q2
2008 		    Q1
2008 		 

($ millions, except where otherwise indicated)

                                 
                                                     

Free Cash Flow (FCF)

                                                   

Cash from operating activities

3,134     1,230     1,181     723     4,716     1,460     1,342     1,193     721  

Capital expenditures

(1,750 )   (589 )   (679 )   (482 )   (2,459 )   (854 )   (566 )   (583 )   (456 )

Other investing activities

(81 )   (39 )   (28 )   (14 )   (729 )   -     (732 )   -     3  

Dividends paid on preferred shares

(81 )   (26 )   (27 )   (28 )   (129 )   (31 )   (31 )   (32 )   (35 )

Bell Aliant distributions to BCE

219     73     73     73     290     72     73     74     71  

FCF

1,441     649     520     272     1,689     647     86     652     304  
                                                      

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 10

BCE Inc.
Consolidated Balance Sheet Data

 

September 30     June 30     March 31     December 31  

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

2009     2009     2009     2008  

ASSETS

                     

Current assets

                     

Cash and cash equivalents

1,187     1,761     2,356     3,052  

Accounts receivable

1,450     1,440     1,667     1,826  

Future income taxes

134     88     88     86  

Inventory

473     304     268     272  

Prepaid and other expenses

417     479     447     303  

Current assets of discontinued operations

3     11     45     39  

Total current assets

3,664     4,083     4,871     5,578  

Capital assets

                     

Property, plant and equipment

19,392     19,312     19,254     19,406  

Finite-life intangible assets

2,541     2,624     2,698     2,693  

Indefinite-life intangible assets

3,778     3,724     3,710     3,697  

Total capital assets

25,711     25,660     25,662     25,796  

Other long-term assets

2,530     2,549     2,660     2,610  

Goodwill

5,820     5,659     5,663     5,659  

Non-current assets of discontinued operations

6     13     22     20  

Total assets

37,731     37,964     38,878     39,663  

LIABILITIES

                     

Current liabilities

                     

Accounts payable and accrued liabilities

3,361     3,080     3,136     3,528  

Interest payable

138     120     167     139  

Dividends payable

353     338     345     337  

Debt due within one year

560     1,171     2,196     2,201  

Current liabilities of discontinued operations

11     18     34     22  

Total current liabilities

4,423     4,727     5,878     6,227  

Long-term debt

10,508     10,573     10,133     10,099  

Other long-term liabilities

4,770     4,939     4,910     4,946  

Total liabilities

19,701     20,239     20,921     21,272  

Non-controlling interest

1,061     1,063     1,072     1,080  

SHAREHOLDERS’ EQUITY

                     

Preferred shares

2,770     2,770     2,770     2,770  

Common shareholders’ equity

                     

Common shares

12,921     12,921     13,148     13,525  

Treasury stock

-     -     (95 )   (86 )

Contributed surplus

2,489     2,488     2,505     2,531  

Accumulated other comprehensive income

127     69     102     39  

Deficit

(1,338 )   (1,586 )   (1,545 )   (1,468 )

Total common shareholders’ equity

14,199     13,892     14,115     14,541  

Total shareholders’ equity

16,969     16,662     16,885     17,311  

Total liabilities and shareholders’ equity

37,731     37,964     38,878     39,663  

Number of common shares outstanding

767.2     767.2     780.6     803.1  

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 11

BCE Inc.
Consolidated Cash Flow Data

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

  Q3
2009 		      Q3
2008 		      $ change       YTD
2009 		      YTD
2008 		      $ change  

Cash flows from operating activities

                                             

Net earnings

  584       280       304       1,362       961       401  

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

  -       (23 )     23       (10 )     (49 )     39  

Earnings from continuing operations

  584       303       281       1,372       1,010       362  

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

                                             

Depreciation and amortization of intangible assets

  828       792       36       2,467       2,396       71  

Net benefit plans cost

  86       69       17       262       210       52  

Restructuring and other

  191       310       (119 )     445       664       (219 )

(Gains) losses on investments

  (36 )     14       (50 )     (38 )     16       (54 )

Future income taxes

  (228 )     (23 )     (205 )     (246 )     2       (248 )

Non-controlling interest

  90       91       (1 )     254       254       -  

Contributions to employee pension plans

  (99 )     (49 )     (50 )     (283 )     (141 )     (142 )

Other employee future benefit plan payments

  (25 )     (25 )     -       (72 )     (72 )     -  

Payments of restructuring and other

  (70 )     (84 )     14       (252 )     (137 )     (115 )

Operating assets and liabilities

  216       251       (35 )     27       (110 )     137  

 

  1,537       1,649       (112 )     3,936       4,092       (156 )

Bell Aliant distributions to BCE

  73       73       -       219       218       1  

Capital expenditures

  (704 )     (705 )     1       (2,094 )     (1,965 )     (129 )

Other investing activities

  (38 )     (732 )     694       (78 )     (727 )     649  

Cash dividends paid on preferred shares

  (26 )     (31 )     5       (81 )     (98 )     17  

Cash distributions paid by subsidiaries to non-controlling interest

  (93 )     (92 )     (1 )     (277 )     (274 )     (3 )

Bell Aliant Free Cash Flow

  (100 )     (76 )     (24 )     (184 )     (204 )     20  

Free Cash Flow (3)

  649       86       563       1,441       1,042       399  

Bell Aliant undistributed Free Cash Flow

  27       3       24       (35 )     (14 )     (21 )

Business acquisitions

  (313 )     -       (313 )     (334 )     (55 )     (279 )

Business dispositions

  10       -       10       10       (10 )     20  

Going-private costs

  -       (148 )     148       (7 )     (165 )     158  

Increase in investments

  (2 )     (1 )     (1 )     (3 )     (5 )     2  

Decrease in investments

  55       -       55       55       1       54  

(Decrease) increase in notes payable and bank advances

  (5 )     26       (31 )     (155 )     41       (196 )

Issue of long-term debt

  -       -       -       1,348       50       1,298  

Repayment of long-term debt

  (656 )     (94 )     (562 )     (2,336 )     (378 )     (1,958 )

Cash dividends paid on common shares

  (296 )     -       (296 )     (891 )     (587 )     (304 )

Issue of common shares

  -       11       (11 )     2       27       (25 )

Repurchase of common shares

  -       -       -       (894 )     -       (894 )

Issue of equity securities by subsidiaries to non-controlling interest

  -       1       (1 )     -       1       (1 )

Other financing activities

  (38 )     (9 )     (29 )     (79 )     (30 )     (49 )

 

  (1,218 )     (211 )     (1,007 )     (3,319 )     (1,124 )     (2,195 )

Cash flows used in continuing operations

  (569 )     (125 )     (444 )     (1,878 )     (82 )     (1,796 )

Cash flows used in discontinued operations activities

  (2 )     (1 )     (1 )     (7 )     (20 )     13  

Cash flows (used in) from discontinued investing activities

  (6 )     29       (35 )     11       28       (17 )

Cash flows used in discontinued financing activities

  -       (2 )     2       -       (2 )     2  

Net decrease in cash and cash equivalents

  (577 )     (99 )     (478 )     (1,874 )     (76 )     (1,798 )

Cash and cash equivalents at beginning of period

  1,766       2,681       (915 )     3,063       2,658       405  

Cash and cash equivalents at end of period

  1,189       2,582       (1,393 )     1,189       2,582       (1,393 )

Consists of:

                                             

Cash and cash equivalents of continuing operations

  1,187       2,573       (1,386 )     1,187       2,573       (1,386 )

Cash and cash equivalents of discontinued operations

  2       9       (7 )     2       9       (7 )

Total

  1,189       2,582       (1,393 )     1,189       2,582       (1,393 )
                                               

Other information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow per share (9)

$

1.08

 

 

$

1.17

 

 

$

(0.09

)

 

$

2.38

 

 

$

2.64

 

 

$

(0.26

)

Annualized cash flow yield (10)

 

10.3

%

 

 

5.7

%

 

 

4.6

 pts

 

 

10.3

%

 

 

5.7

%

 

 

4.6

 pts

Common dividend payout (11)

 

48.2

%

 

 

0.0

%

 

 

48.2

 pts

 

 

59.0

%

 

 

21.5

%

 

 

37.5

 pts

                                               

BCE Inc. Supplementary Financial Information – Third Quarter 2009 Page 12

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

 

                                                                     

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

  YTD
2009 		      Q3 09       Q2 09       Q1 09       Total
2008 		      Q4 08       Q3 08       Q2 08       Q1 08  

Cash flows from operating activities

                                                                     

Net earnings (loss)

  1,362       584       372       406       943       (18 )     280       392       289  

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

  (10 )     -       (4 )     (6 )     (90 )     (41 )     (23 )     (23 )     (3 )

Earnings from continuing operations

  1,372       584       376       412       1,033       23       303       415       292  

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

                                                                     

Depreciation and amortization of intangible assets

  2,467       828       821       818       3,264       868       792       787       817  

Net benefit plans cost

  262       86       88       88       250       40       69       70       71  

Restructuring and other

  445       191       146       108       871       207       310       71       283  

(Gains) losses on investments

  (38 )     (36 )     -       (2 )     308       292       14       -       2  

Future income taxes

  (246 )     (228 )     (5 )     (13 )     129       127       (23 )     92       (67 )

Non-controlling interest

  254       90       80       84       323       69       91       89       74  

Contributions to employee pension plans

   (283 )     (99 )     (92 )     (92 )     (232 )     (91 )     (49 )     (48 )     (44 )

Other employee future benefit plan payments

   (72 )     (25 )     (23 )     (24 )     (96 )     (24 )     (25 )     (24 )     (23 )

Payments of restructuring and other

  (252 )     (70 )     (105 )     (77 )     (305 )     (168 )     (84 )     (29 )     (24 )

Operating assets and liabilities

  27       216       188       (377 )     364       474       251       116       (477 )

 

  3,936       1,537       1,474       925       5,909       1,817       1,649       1,539       904  

Bell Aliant distributions to BCE

  219       73       73       73       290       72       73       74       71  

Capital expenditures

  (2,094 )     (704 )     (800 )     (590 )     (2,986 )     (1,021 )     (705 )     (710 )     (550 )

Other investing activities

  (78 )     (38 )     (27 )     (13 )     (726 )     1       (732 )     2       3  

Cash dividends paid on preferred shares

  (81 )     (26 )     (27 )     (28 )     (129 )     (31 )     (31 )     (32 )     (35 )

Cash distributions paid by subsidiaries to non-controlling interest

  (277 )     (93 )     (92 )     (92 )     (366 )     (92 )     (92 )     (92 )     (90 )

Bell Aliant Free Cash Flow

  (184 )     (100 )     (81 )     (3 )     (303 )     (99 )     (76 )     (129 )     1  

Free Cash Flow

  1,441       649       520       272       1,689       647       86       652       304  

Bell Aliant undistributed Free Cash Flow

  (35 )     27       8       (70 )     13       27       3       55       (72 )

Business acquisitions

  (334 )     (313 )     (1 )     (20 )     (56 )     (1 )     -       (24 )     (31 )

Business dispositions

  10       10       -       -       (10 )     -       -       -       (10 )

Going-private costs

  (7 )     -       (1 )     (6 )     (163 )     2       (148 )     (8 )     (9 )

Increase in investments

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

Decrease in investments

  55       55       -       -       1       -       -       1       -  

(Decrease) increase in notes payable and bank advances

  (155 )     (5 )     (238 )     88       1       (40 )     26       (50 )     65  

Issue of long-term debt

  1,348       -       1,348       -       50       -       -       50       -  

Repayment of long-term debt

  (2,336 )     (656 )     (1,586 )     (94 )     (502 )     (124 )     (94 )     (182 )     (102 )

Cash dividends paid on common shares

  (891 )     (296 )     (301 )     (294 )     (587 )     -       -       (293 )     (294 )

Issue of common shares

  2       -       1       1       50       23       11       15       1  

Repurchase of common shares

  (894 )     -       (337 )     (557 )     (92 )     (92 )     -       -       -  

Issue of equity securities by subsidiaries to non-controlling interest

  -       -       -       -       1       -       1       -       -  

Other financing activities

  (79 )     (38 )     (31 )     (10 )     15       45       (9 )     (10 )     (11 )

 

  (3,319 )     (1,218 )     (1,139 )     (962 )     (1,287 )     (163 )     (211 )     (448 )     (465 )

Cash flows (used in) from continuing operations

  (1,878 )     (569 )     (619 )     (690 )     402       484       (125 )     204       (161 )

Cash flows (used in) from discontinued operations activities

  (7 )     (2 )     3       (8 )     (22 )     (2 )     (1 )     (5 )     (14 )

Cash flows from (used in) discontinued investing activities

  11       (6 )     17       -       27       (1 )     29       -       (1 )

Cash flows used in discontinued financing activities

  -       -       -       -       (2 )     -       (2 )     -       -  

Net (decrease) increase in cash and cash equivalents

  (1,874 )     (577 )     (599 )     (698 )     405       481       (99 )     199       (176 )

Cash and cash equivalents at beginning of period

  3,063       1,766       2,365       3,063       2,658       2,582       2,681       2,482       2,658  

Cash and cash equivalents at end of period

  1,189       1,189       1,766       2,365       3,063       3,063       2,582       2,681       2,482  

Consists of:

                                                                     

Cash and cash equivalents of continuing operations

  1,187       1,187       1,761       2,356       3,052       3,052       2,573       2,674       2,475  

Cash and cash equivalents of discontinued operations

  2       2       5       9       11       11       9       7       7  

Total

  1,189       1,189       1,766       2,365       3,063       3,063       2,582       2,681       2,482  
                                                                       

Other information

                                                                      

Cash flow per share

$ 2.38     $ 1.08     $ 0.88     $ 0.42       $ 3.63       $ 0.99     $  1.17     $ 1.03     $  0.44  

Annualized cash flow yield

  10.3 %     10.3 %     8.3 %     8.5 %     8.4 %     8.4 %     5.7 %     8.1 %     7.6 %

Common dividend payout

  59.0 %     48.2 %     66.4 %     67.5 %     32.4 %     66.4 %     0.0 %     0.0 %     64.0 %

BCE Inc. Supplementary Financial Information – Third 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 measurement to value companies 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 – Third 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 – Third 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 – Third Quarter 2009 Page 16