EX-99.2 3 suppq409.htm SUPPLEMENTARY FINANCIAL INFORMATION - Q4 2009 BCE Inc. Supplementary Financial Information – Fourth Quarter 2009

EXHIBIT 99.2

 

 

 

 

 

BCE Inc. (1)
Consolidated Operational Data

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

  Q4
2009 		      Q4
2008 		       $ change     % change       Total
2009 		      Total
2008 		      $ change     % change  

Operating revenues

  4,650       4,476       174     3.9 %     17,735       17,661       74     0.4 %

Cost of revenue, exclusive of depreciation and amortization

  (1,258 )     (1,174 )     (84 )   (7.2 %)     (4,525 )     (4,389 )     (136 )   (3.1 %)

Selling, general and administrative expenses (A)

  (1,562 )     (1,521 )     (41 )   (2.7 %)     (5,766 )     (6,018 )     252     4.2 %

Net benefit plans cost

  (93 )     (40 )     (53 )   n.m.       (355 )     (250 )     (105 )   (42.0 %)

EBITDA (3)

  1,737       1,741       (4 )   (0.2 %)     7,089       7,004       85     1.2 %

EBITDA margin (4)

  37.4 %     38.9 %           (1.5 ) pts     40.0 %     39.7 %           0.3  pts

Depreciation

  (704 )     (683 )     (21 )   (3.1 %)     (2,595 )     (2,537 )     (58 )   (2.3 %)

Amortization of intangible assets

  (200 )     (185 )     (15 )   (8.1 %)     (776 )     (727 )     (49 )   (6.7 %)

Restructuring and other

  (82 )     (207 )     125     60.4 %     (527 )     (871 )     344     39.5 %

Operating income

  751       666       85     12.8 %     3,191       2,869       322     11.2 %

Other income (expense)

  28       (283 )     311     n.m.       (18 )     (253 )     235     92.9 %

Interest expense

  (182 )     (207 )     25     12.1 %     (723 )     (791 )     68     8.6 %

Pre-tax earnings from continuing operations

  597       176       421     n.m.       2,450       1,825       625     34.2 %

Income tax expense

  (141 )     (84 )     (57 )   (67.9 %)     (368 )     (469 )     101     21.5 %

Non-controlling interest

  (79 )     (69 )     (10 )   (14.5 %)     (333 )     (323 )     (10 )   (3.1 %)

Earnings from continuing operations

  377       23       354     n.m.       1,749       1,033       716     69.3 %

Discontinued operations

  (1 )     (41 )     40     97.6 %     (11 )     (90 )     79     87.8 %

Net earnings

  376       (18 )     394     n.m.       1,738       943       795     84.3 %

Dividends on preferred shares

  (26 )     (30 )     4     13.3 %     (107 )     (124 )     17     13.7 %

Net earnings applicable to common shares

  350       (48 )     398     n.m.       1,631       819       812     99.1 %

Net earnings per common share – basic

                                                         

Continuing operations

$ 0.46     $ (0.01 )   $ 0.47     n.m.     $ 2.12     $ 1.13     $ 0.99     87.6 %

Discontinued operations

$ -     $ (0.05 )   $ 0.05     100.0 %   $ (0.01 )   $ (0.11 )   $ 0.10     90.9 %

Net earnings

$ 0.46     $ (0.06 )   $ 0.52     n.m.     $ 2.11     $ 1.02     $ 1.09     n.m.  

Net earnings per common share – diluted

                                                         

Continuing operations

$ 0.46     $ (0.01 )   $ 0.47     n.m.     $ 2.12     $ 1.12     $ 1.00     89.3 %

Discontinued operations

$ -     $ (0.05 )   $ 0.05     100.0 %   $ (0.01 )   $ (0.11 )   $ 0.10     90.9 %

Net earnings

$ 0.46     $ (0.06 )   $ 0.52     n.m.     $ 2.11     $ 1.01     $ 1.10     n.m.  

Dividends per common share

$ 0.405     $ 0.365     $ 0.040     11.0 %   $ 1.580     $ 0.730     $ 0.850     n.m.  

Average number of common shares outstanding – basic (millions)

  767.2       806.4                     772.9       805.8                

Average number of common shares outstanding – diluted (millions)

  767.3       806.9                     772.9       807.2                
                                                           

The following items are included in net earnings:

                                                         

Net gains (losses) on investments

                                                         

Continuing operations

  11       (346 )     357     n.m.       48       (358 )     406     n.m.  

Discontinued operations

  -       (26 )     26     100.0 %     (7 )     (62 )     55     88.7 %

Restructuring and other

  (48 )     (117 )     69     59.0 %     (339 )     (572 )     233     40.7 %

Total

  (37 )     (489 )     452     92.4 %     (298 )     (992 )     694     70.0 %

Impact on net earnings per share

$ (0.05 )   $ (0.61 )   $ 0.56     91.8 %   $ (0.39 )   $ (1.23 )   $ 0.84     68.3 %

Adjusted EPS (3)

$ 0.51     $ 0.55     $ (0.04 )   (7.3 %)   $ 2.50     $ 2.25     $ 0.25     11.1 %
                                                           
 
(A)

Excludes net benefit plans cost

n.m. : not meaningful

 

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

BCE Inc.
Consolidated Operational Data - Historical Trend

 

                                                                             

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

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

Operating revenues

  17,735       4,650       4,457       4,297       4,331       17,661       4,476       4,437       4,388       4,360  

Cost of revenue, exclusive of depreciation and amortization

  (4,525 )     (1,258 )     (1,152 )     (1,029 )     (1,086 )     (4,389 )     (1,174 )     (1,087 )     (1,071 )     (1,057 )

Selling, general and administrative
expenses (A)

  (5,766 )     (1,562 )     (1,418 )     (1,389 )     (1,397 )     (6,018 )     (1,521 )     (1,512 )     (1,504 )     (1,481 )

Net benefit plans cost

  (355 )     (93 )     (86 )     (88 )     (88 )     (250 )     (40 )     (69 )     (70 )     (71 )

EBITDA

  7,089       1,737       1,801       1,791       1,760       7,004       1,741       1,769       1,743       1,751  

EBITDA margin

  40.0 %     37.4 %     40.4 %     41.7 %     40.6 %     39.7 %     38.9 %     39.9 %     39.7 %     40.2 %

Depreciation

  (2,595 )     (704 )     (636 )     (630 )     (625 )     (2,537 )     (683 )     (619 )     (612 )     (623 )

Amortization of intangible assets

  (776 )     (200 )     (192 )     (191 )     (193 )     (727 )     (185 )     (173 )     (175 )     (194 )

Restructuring and other

  (527 )     (82 )     (191 )     (146 )     (108 )     (871 )     (207 )     (310 )     (71 )     (283 )

Operating income

  3,191       751       782       824       834       2,869       666       667       885       651  

Other (expense) income

  (18 )     28       (24 )     (23 )     1       (253 )     (283 )     2       6       22  

Interest expense

  (723 )     (182 )     (171 )     (179 )     (191 )     (791 )     (207 )     (193 )     (193 )     (198 )

Pre-tax earnings from continuing operations

  2,450       597       587       622       644       1,825       176       476       698       475  

Income tax (expense) recovery

  (368 )     (141 )     87       (166 )     (148 )     (469 )     (84 )     (82 )     (194 )     (109 )

Non-controlling interest

  (333 )     (79 )     (90 )     (80 )     (84 )     (323 )     (69 )     (91 )     (89 )     (74 )

Earnings from continuing operations

  1,749       377       584       376       412       1,033       23       303       415       292  

Discontinued operations

  (11 )     (1 )     -       (4 )     (6 )     (90 )     (41 )     (23 )     (23 )     (3 )

Net earnings (loss)

  1,738       376       584       372       406       943       (18 )     280       392       289  

Dividends on preferred shares

  (107 )     (26 )     (26 )     (26 )     (29 )     (124 )     (30 )     (32 )     (31 )     (31 )

Net earnings (loss) applicable to common shares

  1,631       350       558       346       377       819       (48 )     248       361       258  

Net earnings (loss) per common share – basic

                                                                             

Continuing operations

$ 2.12     $ 0.46     $ 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

$ 2.11     $ 0.46     $ 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

$ 2.12     $ 0.46     $ 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

$ 2.11     $ 0.46     $ 0.72     $ 0.45     $ 0.48     $ 1.01     $ (0.06 )   $ 0.30     $ 0.45     $ 0.32  

Dividends per common share

$ 1.580     $ 0.405     $ 0.405     $ 0.385     $ 0.385     $ 0.730     $ 0.365     $ -     $ -     $ 0.365  

Average number of common shares outstanding – basic (millions)

  772.9       767.2       767.2       769.0       788.3       805.8       806.4       806.0       805.6       805.3  

Average number of common shares outstanding – diluted (millions)

  772.9       767.3       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

  48       11       36       -       1       (358 )     (346 )     (14 )     4       (2 )

Discontinued operations

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

Restructuring and other

  (339 )     (48 )     (123 )     (98 )     (70 )     (572 )     (117 )     (210 )     (48 )     (197 )

Total

  (298 )     (37 )     (91 )     (101 )     (69 )     (992 )     (489 )     (240 )     (64 )     (199 )

Impact on net earnings per share

$ (0.39 )   $ (0.05 )   $ (0.12 )   $ (0.13 )   $ (0.09 )   $ (1.23 )   $ (0.61 )   $ (0.29 )   $ (0.08 )   $ (0.25 )

Adjusted EPS

$ 2.50     $ 0.51     $ 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 – Fourth Quarter 2009 Page 3

BCE Inc.
Segmented Data (2)

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

Q4
2009 		    Q4
2008 		    $ change     % change     Total
2009 		    Total
2008 		    $ change     % change  

 

                                              

Revenues

                                             

Bell Wireline

2,840     2,726     114     4.2 %   10,666     10,640     26     0.2 %

Bell Wireless

1,198     1,133     65     5.7 %   4,558     4,479     79     1.8 %

Inter-segment eliminations

(56 )   (61 )   5     8.2 %   (204 )   (248 )   44     17.7 %

Total Bell

3,982     3,798     184     4.8 %   15,020     14,871     149     1.0 %

Bell Aliant

785     806     (21 )   (2.6 %)   3,174     3,297     (123 )   (3.7 %)

Inter-segment eliminations

(117 )   (128 )   11     8.6 %   (459 )   (507 )   48     9.5 %

Total BCE Inc.

4,650     4,476     174     3.9 %   17,735     17,661     74     0.4 %

 

                                              

EBITDA

                                             

Bell Wireline

960     937     23     2.5 %   3,907     3,868     39     1.0 %

Margin

33.8 %   34.4 %         (0.6 ) pts   36.6 %   36.4 %         0.2  pts

Bell Wireless

435     444     (9 )   (2.0 %)   1,812     1,770     42     2.4 %

Margin

36.3 %   39.2 %         (2.9 ) pts   39.8 %   39.5 %         0.3  pts

Total Bell

1,395     1,381     14     1.0 %   5,719     5,638     81     1.4 %

Margin

35.0 %   36.4 %         (1.4 ) pts   38.1 %   37.9 %         0.2  pts

Bell Aliant

342     360     (18 )   (5.0 %)   1,370     1,366     4     0.3 %

Margin

43.6 %   44.7 %         (1.1 ) pts   43.2 %   41.4 %         1.8  pts

Total BCE Inc.

1,737     1,741     (4 )   (0.2 %)   7,089     7,004     85     1.2 %

Margin

37.4 %   38.9 %         (1.5 ) pts   40.0 %   39.7 %         0.3  pts

Operating income

                                             

Bell Wireline

280     226     54     23.9 %   1,148     902     246     27.3 %

Bell Wireless

292     294     (2 )   (0.7 %)   1,284     1,241     43     3.5 %

Total Bell

572     520     52     10.0 %   2,432     2,143     289     13.5 %

Bell Aliant

179     146     33     22.6 %   759     726     33     4.5 %

Total BCE Inc.

751     666     85     12.8 %   3,191     2,869     322     11.2 %

 

                                              

Capital expenditures

                                             

Bell Wireline

498     625     127     20.3 %   1,717     1,966     249     12.7 %

Capital Intensity (5)

17.5 %   22.9 %         5.4  pts   16.1 %   18.5 %         2.4  pts

Bell Wireless

142     229     87     38.0 %   673     493     (180 )   (36.5 %)

Capital Intensity

11.9 %   20.2 %         8.3  pts   14.8 %   11.0 %         (3.8 ) pts

Total Bell

640     854     214     25.1 %   2,390     2,459     69     2.8 %

Capital Intensity

16.1 %   22.5 %         6.4  pts   15.9 %   16.5 %         0.6  pts

Bell Aliant

120     167     47     28.1 %   464     527     63     12.0 %

Capital Intensity

15.3 %   20.7 %         5.4  pts   14.6 %   16.0 %         1.4  pts

Total BCE Inc.

760     1,021     261     25.6 %   2,854     2,986     132     4.4 %

Capital Intensity

16.3 %   22.8 %         6.5  pts   16.1 %   16.9 %         0.8  pts
                                                                   

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

BCE Inc.
Segmented Data - Historical Trend

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

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

Revenues

                                                         

Bell Wireline

10,666     2,840     2,659     2,575     2,592     10,640     2,726     2,632     2,627     2,655  

Bell Wireless

4,558     1,198     1,178     1,104     1,078     4,479     1,133     1,175     1,120     1,051  

Inter-segment eliminations

(204 )   (56 )   (49 )   (51 )   (48 )   (248 )   (61 )   (65 )   (64 )   (58 )

Total Bell

15,020     3,982     3,788     3,628     3,622     14,871     3,798     3,742     3,683     3,648  

Bell Aliant

3,174     785     786     785     818     3,297     806     812     829     850  

Inter-segment eliminations

(459 )   (117 )   (117 )   (116 )   (109 )   (507 )   (128 )   (117 )   (124 )   (138 )

Total BCE Inc.

17,735     4,650     4,457     4,297     4,331     17,661     4,476     4,437     4,388     4,360  
                                                           

EBITDA

                                                         

Bell Wireline

3,907     960     973     982     992     3,868     937     953     966     1,012  

Margin

36.6 %   33.8 %   36.6 %   38.1 %   38.3 %   36.4 %   34.4 %   36.2 %   36.8 %   38.1 %

Bell Wireless

1,812     435     475     468     434     1,770     444     474     442     410  

Margin

39.8 %   36.3 %   40.3 %   42.4 %   40.3 %   39.5 %   39.2 %   40.3 %   39.5 %   39.0 %

Total Bell

5,719     1,395     1,448     1,450     1,426     5,638     1,381     1,427     1,408     1,422  

Margin

38.1 %   35.0 %   38.2 %   40.0 %   39.4 %   37.9 %   36.4 %   38.1 %   38.2 %   39.0 %

Bell Aliant

1,370     342     353     341     334     1,366     360     342     335     329  

Margin

43.2 %   43.6 %   44.9 %   43.4 %   40.8 %   41.4 %   44.7 %   42.1 %   40.4 %   38.7 %

Total BCE Inc.

7,089     1,737     1,801     1,791     1,760     7,004     1,741     1,769     1,743     1,751  

Margin

40.0 %   37.4 %   40.4 %   41.7 %   40.6 %   39.7 %   38.9 %   39.9 %   39.7 %   40.2 %

Operating income

                                                         

Bell Wireline

1,148     280     229     290     349     902     226     125     370     181  

Bell Wireless

1,284     292     354     338     300     1,241     294     338     316     293  

Total Bell

2,432     572     583     628     649     2,143     520     463     686     474  

Bell Aliant

759     179     199     196     185     726     146     204     199     177  

Total BCE Inc.

3,191     751     782     824     834     2,869     666     667     885     651  
                                                           

Capital expenditures

                                                         

Bell Wireline

1,717     498     412     455     352     1,966     625     473     479     389  

Capital Intensity

16.1 %   17.5 %   15.5 %   17.7 %   13.6 %   18.5 %   22.9 %   18.0 %   18.2 %   14.7 %

Bell Wireless

673     142     177     224     130     493     229     93     104     67  

Capital Intensity

14.8 %   11.9 %   15.0 %   20.3 %   12.1 %   11.0 %   20.2 %   7.9 %   9.3 %   6.4 %

Total Bell

2,390     640     589     679     482     2,459     854     566     583     456  

Capital Intensity

15.9 %   16.1 %   15.5 %   18.7 %   13.3 %   16.5 %   22.5 %   15.1 %   15.8 %   12.5 %

Bell Aliant

464     120     115     121     108     527     167     139     127     94  

Capital Intensity

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

Total BCE Inc.

2,854     760     704     800     590     2,986     1,021     705     710     550  

Capital Intensity

16.1 %   16.3 %   15.8 %   18.6 %   13.6 %   16.9 %   22.8 %   15.9 %   16.2 %   12.6 %

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

Bell Wireline (2)

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

Q4
2009 		    Q4
2008 		    % change     Total
2009 		    Total
2008 		    % change  

Bell Wireline

                                 

Local & access

775     825     (6.1 %)   3,159     3,360     (6.0 %)

Long distance

265     279     (5.0 %)   1,078     1,165     (7.5 %)

Data

973     1,011     (3.8 %)   3,696     3,723     (0.7 %)

Video

417     375     11.2 %   1,593     1,450     9.9 %

Equipment & other

324     143     n.m.     817     574     42.3 %

Total external revenues

2,754     2,633     4.6 %   10,343     10,272     0.7 %

Inter-segment revenues

86     93     (7.5 %)   323     368     (12.2 %)

Total Bell Wireline operating revenue

2,840     2,726     4.2 %   10,666     10,640     0.2 %

Operating expenses

(1,880 )   (1,789 )   (5.1 %)   (6,759 )   (6,772 )   0.2 %

EBITDA

960     937     2.5 %   3,907     3,868     1.0 %

EBITDA Margin

33.8 %   34.4 %   (0.6 ) pts   36.6 %   36.4 %   0.2  pts

Operating income

280     226     23.9 %   1,148     902     27.3 %
                                   

Capital expenditures

498     625     20.3 %   1,717     1,966     12.7 %

Capital intensity

17.5 %   22.9 %   5.4  pts   16.1 %   18.5 %   2.4  pts
                                   

Local

                                 

Network access services (NAS) (k)

                                 

Residential (A)

3,887     4,221     (7.9 %)   3,887     4,221     (7.9 %)

Business (A)

2,975     3,088     (3.7 %)   2,975     3,088     (3.7 %)

Total

6,862     7,309     (6.1 %)   6,862     7,309     (6.1 %)

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

                                 

Residential (A)

(79 )   (71 )   (11.3 %)   (334 )   (382 )   12.6 %

Business (A)

(29 )   (30 )   3.3 %   (113 )   (54 )   n.m.  

Total

(108 )   (101 )   (6.9 %)   (447 )   (436 )   (2.5 %)

Long Distance (LD)

                                 

Conversation minutes (M)

2,751     3,003     (8.4 %)   11,248     11,771     (4.4 %)

Average revenue per minute ($)

0.079     0.082     (3.7 %)   0.083     0.089     (6.7 %)

Internet

                                 

High Speed Internet net activations (k)

8     8     0.0 %   38     50     (24.0 %)

High Speed Internet subscribers EOP (k) (A)

2,057     2,054     0.1 %   2,057     2,054     0.1 %

Video (DTH and VDSL)

                                 

Video EBITDA

120     82     46.3 %   386     282     36.9 %

Net subscriber activations (k)

41     14     n.m.     113     30     n.m.  

Total subscribers EOP (k) (A)

1,949     1,852     5.2 %   1,949     1,852     5.2 %

ARPU (6) ($/month)

71.12     67.15     5.9 %   69.59     65.37     6.5 %

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

1.3 %   1.3 %   0.0  pts   1.2 %   1.2 %   0.0  pts
 
(A) Following a company-wide review of subscriber metrics, Q1 2008 NAS customer base was reduced by 3K for Residential and 111K for Business, with related adjustments to previously reported NAS net (losses)/activations. Additionally, our Internet and Video customer base were reduced by 35K and 16K, respectively, at the end of Q4 2009.

 

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

Bell Wireline - Historical Trend

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

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

Bell Wireline

                                                         

Local & access

3,159     775     783     796     805     3,360     825     833     845     857  

Long distance

1,078     265     264     271     278     1,165     279     290     298     298  

Data

3,696     973     892     919     912     3,723     1,011     914     894     904  

Video

1,593     417     400     389     387     1,450     375     363     356     356  

Equipment & other

817     324     241     119     133     574     143     135     143     153  

Total external revenues

10,343     2,754     2,580     2,494     2,515     10,272     2,633     2,535     2,536     2,568  

Inter-segment revenues

323     86     79     81     77     368     93     97     91     87  

Total Bell Wireline operating revenue

10,666     2,840     2,659     2,575     2,592     10,640     2,726     2,632     2,627     2,655  

Operating expenses

(6,759 )   (1,880 )   (1,686 )   (1,593 )   (1,600 )   (6,772 )   (1,789 )   (1,679 )   (1,661 )   (1,643 )

EBITDA

3,907     960     973     982     992     3,868     937     953     966     1,012  

EBITDA Margin

36.6 %   33.8 %   36.6 %   38.1 %   38.3 %   36.4 %   34.4 %   36.2 %   36.8 %   38.1 %

Operating income

1,148     280     229     290     349     902     226     125     370     181  
                                                           

Capital expenditures

1,717     498     412     455     352     1,966     625     473     479     389  

Capital intensity

16.1 %   17.5 %   15.5 %   17.7 %   13.6 %   18.5 %   22.9 %   18.0 %   18.2 %   14.7 %
                                                           

Local

                                                         

Network access services (NAS) (k)

                                                         

Residential (A) (C)

3,887     3,887     3,966     4,042     4,143     4,221     4,221     4,292     4,366     4,495  

Business (B) (C)

2,975     2,975     3,004     3,031     3,062     3,088     3,088     3,118     3,119     3,129  

Total

6,862     6,862     6,970     7,073     7,205     7,309     7,309     7,410     7,485     7,624  

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

                                                         

Residential (C)

(334 )   (79 )   (76 )   (101 )   (78 )   (382 )   (71 )   (74 )   (129 )   (108 )

Business (C)

(113 )   (29 )   (27 )   (31 )   (26 )   (54 )   (30 )   (1 )   (10 )   (13 )

Total

(447 )   (108 )   (103 )   (132 )   (104 )   (436 )   (101 )   (75 )   (139 )   (121 )

Long Distance (LD)

                                                         

Conversation minutes (M)

11,248     2,751     2,731     2,915     2,851     11,771     3,003     2,853     2,985     2,930  

Average revenue per minute ($)

0.083     0.079     0.085     0.084     0.085     0.089     0.082     0.093     0.089     0.093  

Internet

                                                         

High Speed Internet net activations (k)

38     8     22     2     6     50     8     33     (1 )   10  

High Speed Internet subscribers EOP (k) (C)

2,057     2,057     2,084     2,062     2,060     2,054     2,054     2,046     2,013     2,014  

Video (DTH and VDSL)

                                                         

Video EBITDA

386     120     83     91     92     282     82     76     47     77  

Net subscriber activations (k)

113     41     40     20     12     30     14     7     8     1  

Total subscribers EOP (k) (C)

1,949     1,949     1,924     1,884     1,864     1,852     1,852     1,838     1,831     1,823  

ARPU ($/month)

69.59     71.12     69.35     68.98     68.84     65.37     67.15     65.20     64.47     64.65  

Churn (%) (average per month)

1.2 %   1.3 %   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.
(C)

Following a company-wide review of subscriber metrics, Q1 2008 NAS customer base was reduced by 3K for Residential and 111K for Business, with related adjustments to previously reported NAS net (losses)/activations. Additionally, our Internet and Video customer base were reduced by 35K and 16K, respectively, at the end of Q4 2009.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2009 Page 7

Bell Wireless (2)

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

Q4
2009 		    Q4
2008 		    % change     Total
2009 		    Total
2008 		    % change  

Bell Wireless

                                 

Revenue

                                 

Service

1,055     1,033     2.1 %   4,102     4,059     1.1 %

Product

129     90     43.3 %   405     375     8.0 %

Total external Bell Wireless revenues

1,184     1,123     5.4 %   4,507     4,434     1.6 %

Inter-segment

14     10     40.0 %   51     45     13.3 %

Total Bell Wireless operating revenues

1,198     1,133     5.7 %   4,558     4,479     1.8 %

Operating expenses

(763 )   (689 )   (10.7 %)   (2,746 )   (2,709 )   (1.4 %)

EBITDA

435     444     (2.0 %)   1,812     1,770     2.4 %

EBITDA margin (Total revenues)

36.3 %   39.2 %   (2.9 ) pts   39.8 %   39.5 %   0.3  pts

EBITDA margin (Service revenues)

41.2 %   43.0 %   (1.8 ) pts   44.2 %   43.6 %   0.6  pts

Operating Income

292     294     (0.7 %)   1,284     1,241     3.5 %
                                   

Capital expenditures

142     229     38.0 %   673     493     (36.5 %)

Capital intensity

11.9 %   20.2 %   8.3  pts   14.8 %   11.0 %   (3.8 ) pts
                                   

Wireless gross activations (k) (A)

523     470     11.3 %   1,794     1,651     8.7 %

Postpaid

300     252     19.0 %   1,056     970     8.9 %

Wireless net activations (k) (A)

163     117     39.3 %   373     351     6.3 %

Postpaid

110     80     37.5 %   331     332     (0.3 %)

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

6,833     6,497     5.2 %   6,833     6,497     5.2 %

Postpaid

5,041     4,745     6.2 %   5,041     4,745     6.2 %

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

51.08     54.22     (5.8 %)   51.70     54.29     (4.8 %)

Prepaid

18.45     16.40     12.5 %   17.15     17.14     0.1 %

Postpaid

62.47     65.69     (4.9 %)   62.87     66.09     (4.9 %)

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

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

Prepaid

3.2 %   3.3 %   0.1  pts   3.2 %   3.1 %   (0.1 ) pts

Postpaid

1.3 %   1.3 %   0.0  pts   1.3 %   1.2 %   (0.1 ) pts

Usage per subscriber (C) (D) (min/month)

281     298     (5.7 %)   287     295     (2.7 %)

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

327     373     12.3 %   350     395     11.4 %

PRO FORMA (E)

                                 

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

51.08     52.56     (2.8 %)   50.88     52.70     (3.5 %)

Prepaid

18.45     17.33     6.5 %   17.53     17.83     (1.7 %)

Postpaid

62.47     65.47     (4.6 %)   62.81     66.02     (4.9 %)

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

1.8 %   1.8 %   0.0  pts   1.8 %   1.7 %   (0.1 ) pts

Prepaid

3.2 %   3.4 %   0.2  pts   3.2 %   3.1 %   (0.1 ) pts

Postpaid

1.3 %   1.3 %   0.0  pts   1.3 %   1.2 %   (0.1 ) pts

Usage per subscriber (D) (E) (min/month)

281     289     (2.8 %)   283     286     (1.0 %)

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

327     347     5.8 %   336     373     9.9 %
 
(A)

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

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.
(D) Following a company-wide review of subscriber metrics, we reduced subscribers by 35K for postpaid and 2K for prepaid as at the end of Q4 2009. The definition of usage per subscriber has been refined and all prior periods have been restated for comparability.
(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 – Fourth Quarter 2009 Page 8

Bell Wireless - Historical Trend

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

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

Bell Wireless

                                                         

Revenue

                                                         

Service

4,102     1,055     1,056     1,005     986     4,059     1,033     1,062     1,008     956  

Product

405     129     106     88     82     375     90     104     99     82  

Total external Bell Wireless revenues

4,507     1,184     1,162     1,093     1,068     4,434     1,123     1,166     1,107     1,038  

Inter-segment

51     14     16     11     10     45     10     9     13     13  

Total Bell Wireless operating revenues

4,558     1,198     1,178     1,104     1,078     4,479     1,133     1,175     1,120     1,051  

Operating expenses

(2,746 )   (763 )   (703 )   (636 )   (644 )   (2,709 )   (689 )   (701 )   (678 )   (641 )

EBITDA

1,812     435     475     468     434     1,770     444     474     442     410  

EBITDA margin (Total revenues)

39.8 %   36.3 %   40.3 %   42.4 %   40.3 %   39.5 %   39.2 %   40.3 %   39.5 %   39.0 %

EBITDA margin (Service revenues)

44.2 %   41.2 %   45.0 %   46.6 %   44.0 %   43.6 %   43.0 %   44.6 %   43.8 %   42.9 %

Operating Income

1,284     292     354     338     300     1,241     294     338     316     293  

 

                                                          

Capital expenditures

673     142     177     224     130     493     229     93     104     67  

Capital intensity

14.8 %   11.9 %   15.0 %   20.3 %   12.1 %   11.0 %   20.2 %   7.9 %   9.3 %   6.4 %

 

                                                          

Wireless gross activations (A) (k)

1,794     523     501     404     366     1,651     470     439     391     351  

Postpaid

1,056     300     302     244     210     970     252     267     253     198  

Wireless net activations (A) (k)

373     163     135     45     30     351     117     117     83     34  

Postpaid

331     110     122     64     35     332     80     113     111     28  

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

6,833     6,833     6,707     6,572     6,527     6,497     6,497     6,449     6,332     6,250  

Postpaid

5,041     5,041     4,966     4,844     4,780     4,745     4,745     4,708     4,595     4,478  

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

51.70     51.08     52.13     52.05     51.52     54.29     54.22     56.30     54.27     52.32  

Prepaid

17.15     18.45     18.36     16.41     15.38     17.14     16.40     18.19     17.48     16.50  

Postpaid

62.87     62.47     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 %   1.8 %   1.7 %   1.6 %   1.6 %   1.7 %   1.6 %   1.6 %   1.6 %

Prepaid

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

Postpaid

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

Usage per subscriber (D) (E) (min/month)

287     281     291     299     279     295     298     294     305     284  

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

350     327     320     356     397     395     373     398     417     396  

PRO FORMA (F)

                                                         

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

50.88     51.08     52.13     50.46     49.84     52.70     52.56     54.63     52.70     50.84  

Prepaid

17.53     18.45     18.36     17.26     16.05     17.83     17.33     18.84     18.05     17.11  

Postpaid

62.81     62.47     64.09     62.48     62.24     66.02     65.47     68.07     66.16     64.27  

Churn (%) (F) (average per month)

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

Prepaid

3.2 %   3.2 %   3.5 %   3.3 %   3.0 %   3.1 %   3.4 %   3.1 %   3.0 %   2.8 %

Postpaid

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

Usage per subscriber (E) (F) (min/month)

283     281     291     290     271     286     289     286     296     275  

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

336     327     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 prepaid 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) Following a company-wide review of subscriber metrics, we reduced subscribers by 35K for postpaid and 2K for prepaid as at the end of Q4 2009. The definition of usage per subscriber has been refined and all prior periods have been restated for comparability.
(F) 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 – Fourth Quarter 2009 Page 9

     BCE Inc.
Net debt and other information (2)

BCE Inc. – Net debt and preferreds

               

 

                

At December 31, 2009

      BCE Inc.        

(unaudited)

               

($ millions, except where otherwise indicated)

               

 

      Bell        

 

Bell     Aliant     BCE Inc.  

Debt due within one year

543     57     600  

Long-term debt

7,541     2,758     10,299  

Securitization of accounts receivable

1,140     165     1,305  

Preferred shares – BCE

2,770     -     2,770  

Cash and cash equivalents

(660 )   (27 )   (687 )

Net debt

11,334     2,953     14,287  

Bell – Balance Sheet Information

                           

(unaudited)

                           

($ millions, except where otherwise indicated)

December 31     September 30     June 30     March 31 *    Dec. 31 * 

 

2009     2009     2009     2009     2008  
                             

Debt due within one year

543     464     1,077     1,788     1,878  

Long-term debt

7,541     7,757     7,825     7,685     7,648  

Securitization of accounts receivable

1,140     1,140     1,140     1,108     1,140  

Preferred shares – BCE

2,770     2,770     2,770     2,770     2,770  

Cash and cash equivalents

(660 )   (1,159 )   (1,749 )   (2,339 )   (3,045 )

Net Debt

11,334     10,972     11,063     11,012     10,391  
                             

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

1.89     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)

8.79     8.52     8.34     8.24     8.33  
 

* Includes $650 million BCE debt.

Cash Flow Information

                                             

(unaudited)

Q4     Q4                 Total     Total              

($ millions, except where otherwise indicated)

2009     2008     $ change     % change     2009     2008     $ change     % change  
                                               

Free Cash Flow (FCF)

                                             

Cash from operating activities

621     1,460     (839 )   (57.5 %)   3,755     4,716     (961 )   (20.4 %)

Capital expenditures

(640 )   (854 )   214     25.1 %   (2,390 )   (2,459 )   69     2.8 %

Other investing activities

(12 )   -     (12 )   n.m.     (93 )   (729 )   636     87.2 %

Dividends paid on preferred shares

(26 )   (31 )   5     16.1 %   (107 )   (129 )   22     17.1 %

Bell Aliant distributions to BCE

72     72     -     0.0 %   291     290     1     0.3 %

FCF

15     647     (632 )   (97.7 %)   1,456     1,689     (233 )   (13.8 %)
                                               

Cash Flow Information - Historical Trend

                                                         

(unaudited)

Total     Q4     Q3     Q2     Q1     Total     Q4     Q3     Q2     Q1  

($ millions, except where otherwise indicated)

2009     2009     2009     2009     2009     2008     2008     2008     2008     2008  

 

                                                          

Free Cash Flow (FCF)

                                                         

Cash from operating activities

3,755     621     1,230     1,181     723     4,716     1,460     1,342     1,193     721  

Capital expenditures

(2,390 )   (640 )   (589 )   (679 )   (482 )   (2,459 )   (854 )   (566 )   (583 )   (456 )

Other investing activities

(93 )   (12 )   (39 )   (28 )   (14 )   (729 )   -     (732 )   -     3  

Dividends paid on preferred shares

(107 )   (26 )   (26 )   (27 )   (28 )   (129 )   (31 )   (31 )   (32 )   (35 )

Bell Aliant distributions to BCE

291     72     73     73     73     290     72     73     74     71  

FCF

1,456     15     649     520     272     1,689     647     86     652     304  
                                                           

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

BCE Inc.
Consolidated Balance Sheet Data

 

December 31     September 30     June 30     March 31     December 31  

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

2009     2009     2009     2009     2008  

ASSETS

                           

Current assets

                           

Cash and cash equivalents

687     1,187     1,761     2,356     3,052  

Accounts receivable

1,605     1,450     1,440     1,667     1,826  

Future income taxes

110     134     88     88     86  

Inventory

448     473     304     268     272  

Prepaid expenses

296     344     413     395     249  

Other current assets

137     73     66     52     54  

Current assets of discontinued operations

1     3     11     45     39  

Total current assets

3,284     3,664     4,083     4,871     5,578  

Capital assets

                           

Property, plant and equipment

19,441     19,392     19,312     19,254     19,406  

Finite-life intangible assets

2,541     2,541     2,624     2,698     2,693  

Indefinite-life intangible assets

3,803     3,778     3,724     3,710     3,697  

Total capital assets

25,785     25,711     25,660     25,662     25,796  

Other long-term assets

3,207     2,530     2,549     2,660     2,610  

Goodwill

5,774     5,820     5,659     5,663     5,659  

Non-current assets of discontinued operations

-     6     13     22     20  

Total assets

38,050     37,731     37,964     38,878     39,663  

LIABILITIES

                           

Current liabilities

                           

Accounts payable and accrued liabilities

3,716     3,361     3,080     3,136     3,528  

Interest payable

113     138     120     167     139  

Dividends payable

354     353     338     345     337  

Debt due within one year

600     560     1,171     2,196     2,201  

Current liabilities of discontinued operations

3     11     18     34     22  

Total current liabilities

4,786     4,423     4,727     5,878     6,227  

Long-term debt

10,299     10,508     10,573     10,133     10,099  

Other long-term liabilities

4,942     4,770     4,939     4,910     4,946  

Total liabilities

20,027     19,701     20,239     20,921     21,272  

Non-controlling interest

1,049     1,061     1,063     1,072     1,080  

SHAREHOLDERS’ EQUITY

                           

Preferred shares

2,770     2,770     2,770     2,770     2,770  

Common shareholders’ equity

                           

Common shares

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

Treasury stock

-     -     -     (95 )   (86 )

Contributed surplus

2,490     2,489     2,488     2,505     2,531  

Accumulated other comprehensive income

92     127     69     102     39  

Deficit

(1,299 )   (1,338 )   (1,586 )   (1,545 )   (1,468 )

Total common shareholders’ equity

14,204     14,199     13,892     14,115     14,541  

Total shareholders’ equity

16,974     16,969     16,662     16,885     17,311  

Total liabilities and shareholders’ equity

38,050     37,731     37,964     38,878     39,663  

Number of common shares outstanding

767.2     767.2     767.2     780.6     803.1  

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

BCE Inc.
Consolidated Cash Flow Data

 

  Q4       Q4               Total       Total          

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

  2009       2008       $ change       2009       2008       $ change  

Cash flows from operating activities

                                             

Net earnings (loss)

  376       (18 )     394       1,738       943       795  

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

  (1 )     (41 )     40       (11 )     (90 )     79  

Earnings from continuing operations

  377       23       354       1,749       1,033       716  

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

                                             

Depreciation and amortization of intangible assets

  904       868       36       3,371       3,264       107  

Net benefit plans cost

  93       40       53       355       250       105  

Restructuring and other

  82       207       (125 )     527       871       (344 )

(Gains) losses on investments

  (11 )     292       (303 )     (49 )     308       (357 )

Future income taxes

  278       127       151       32       129       (97 )

Non-controlling interest

  79       69       10       333       323       10  

Contributions to employee pension plans

  (785 )     (91 )     (694 )     (1,068 )     (232 )     (836 )

Other employee future benefit plan payments

  (24 )     (24 )     -       (96 )     (96 )     -  

Payments of restructuring and other

  (58 )     (168 )     110       (310 )     (305 )     (5 )

Operating assets and liabilities

  13       474       (461 )     40       364       (324 )

 

  948       1,817       (869 )     4,884       5,909       (1,025 )

Bell Aliant distributions to BCE

  72       72       -       291       290       1  

Capital expenditures

  (760 )     (1,021 )     261       (2,854 )     (2,986 )     132  

Other investing activities

  (11 )     1       (12 )     (89 )     (726 )     637  

Cash dividends paid on preferred shares

  (26 )     (31 )     5       (107 )     (129 )     22  

Cash distributions paid by subsidiaries to non-controlling interest

  (92 )     (92 )     -       (369 )     (366 )     (3 )

Bell Aliant Free Cash Flow

  (116 )     (99 )     (17 )     (300 )     (303 )     3  

Free Cash Flow (3)

  15       647       (632 )     1,456       1,689       (233 )

Bell Aliant undistributed Free Cash Flow

  44       27       17       9       13       (4 )

Business acquisitions

  (4 )     (1 )     (3 )     (338 )     (56 )     (282 )

Business dispositions

  1       -       1       11       (10 )     21  

Going-private costs

  -       2       (2 )     (7 )     (163 )     156  

Increase in investments

  (50 )     (3 )     (47 )     (53 )     (8 )     (45 )

Decrease in investments

  58       -       58       113       1       112  

(Decrease) increase in notes payable and bank advances

  (39 )     (40 )     1       (194 )     1       (195 )

Issue of long-term debt

  -       -       -       1,348       50       1,298  

Repayment of long-term debt

  (203 )     (124 )     (79 )     (2,539 )     (502 )     (2,037 )

Cash dividends paid on common shares

  (310 )     -       (310 )     (1,201 )     (587 )     (614 )

Issue of common shares

  -       23       (23 )     2       50       (48 )

Repurchase of common shares

  -       (92 )     92       (894 )     (92 )     (802 )

Other financing activities

  (11 )     45       (56 )     (90 )     16       (106 )

 

  (514 )     (163 )     (351 )     (3,833 )     (1,287 )     (2,546 )

Cash flows (used in) from continuing operations

  (499 )     484       (983 )     (2,377 )     402       (2,779 )

Cash flows used in discontinued operations activities

  (2 )     (2 )     -       (9 )     (22 )     13  

Cash flows (used in) from discontinued investing activities

  -       (1 )     1       11       27       (16 )

Cash flows used in discontinued financing activities

  -       -       -       -       (2 )     2  

Net (decrease) increase in cash and cash equivalents

  (501 )     481       (982 )     (2,375 )     405       (2,780 )

Cash and cash equivalents at beginning of period

  1,189       2,582       (1,393 )     3,063       2,658       405  

Cash and cash equivalents at end of period

  688       3,063       (2,375 )     688       3,063       (2,375 )

Consists of:

                                             

Cash and cash equivalents of continuing operations

  687       3,052       (2,365 )     687       3,052       (2,365 )

Cash and cash equivalents of discontinued operations

  1       11       (10 )     1       11       (10 )

Total

  688       3,063       (2,375 )     688       3,063       (2,375 )
                                               

Other information

                                             

Cash flow per share (9)

$ 0.25     $ 0.99     $ (0.74 )   $ 2.63     $ 3.63     $ (1.00 )

Annualized cash flow yield (10)

  6.5 %     8.4 %     (1.9 ) pts     6.5 %     8.4 %     (1.9 ) pts

Common dividend payout (11)

  79.4 %     66.4 %     13.0  pts     63.2 %     32.4 %     30.8  pts
                                               

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

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

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

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

Cash flows from operating activities

                                                                             

Net earnings (loss)

  1,738       376       584       372       406       943       (18 )     280       392       289  

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

  (11 )     (1 )     -       (4 )     (6 )     (90 )     (41 )     (23 )     (23 )     (3 )

Earnings from continuing operations

  1,749       377       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

  3,371       904       828       821       818       3,264       868       792       787       817  

Net benefit plans cost

  355       93       86       88       88       250       40       69       70       71  

Restructuring and other

  527       82       191       146       108       871       207       310       71       283  

(Gains) losses on investments

  (49 )     (11 )     (36 )     -       (2 )     308       292       14       -       2  

Future income taxes

  32       278       (228 )     (5 )     (13 )     129       127       (23 )     92       (67 )

Non-controlling interest

  333       79       90       80       84       323       69       91       89       74  

Contributions to employee pension plan

  (1,068 )     (785 )     (99 )     (92 )     (92 )     (232 )     (91 )     (49 )     (48 )     (44 )

Other employee future benefit plan payments

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

Payments of restructuring and other

  (310 )     (58 )     (70 )     (105 )     (77 )     (305 )     (168 )     (84 )     (29 )     (24 )

Operating assets and liabilities

  40       13       216       188       (377 )     364       474       251       116       (477 )

 

  4,884       948       1,537       1,474       925       5,909       1,817       1,649       1,539       904  

Bell Aliant distributions to BCE

  291       72       73       73       73       290       72       73       74       71  

Capital expenditures

  (2,854 )     (760 )     (704 )     (800 )     (590 )     (2,986 )     (1,021 )     (705 )     (710 )     (550 )

Other investing activities

  (89 )     (11 )     (38 )     (27 )     (13 )     (726 )     1       (732 )     2       3  

Cash dividends paid on preferred shares

  (107 )     (26 )     (26 )     (27 )     (28 )     (129 )     (31 )     (31 )     (32 )     (35 )

Cash distributions paid by subsidiaries to non-controlling interest

  (369 )     (92 )     (93 )     (92 )     (92 )     (366 )     (92 )     (92 )     (92 )     (90 )

Bell Aliant Free Cash Flow

  (300 )     (116 )     (100 )     (81 )     (3 )     (303 )     (99 )     (76 )     (129 )     1  

Free Cash Flow

  1,456       15       649       520       272       1,689       647       86       652       304  

Bell Aliant undistributed Free Cash Flow

  9       44       27       8       (70 )     13       27       3       55       (72 )

Business acquisitions

  (338 )     (4 )     (313 )     (1 )     (20 )     (56 )     (1 )     -       (24 )     (31 )

Business dispositions

  11       1       10       -       -       (10 )     -       -       -       (10 )

Going-private costs

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

Increase in investments

  (53 )     (50 )     (2 )     (1 )     -       (8 )     (3 )     (1 )     (2 )     (2 )

Decrease in investments

  113       58       55       -       -       1       -       -       1       -  

(Decrease) increase in notes payable and bank advances

  (194 )     (39 )     (5 )     (238 )     88       1       (40 )     26       (50 )     65  

Issue of long-term debt

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

Repayment of long-term debt

  (2,539 )     (203 )     (656 )     (1,586 )     (94 )     (502 )     (124 )     (94 )     (182 )     (102 )

Cash dividends paid on common shares

  (1,201 )     (310 )     (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 )     -       -       -  

Other financing activities

  (90 )     (11 )     (38 )     (31 )     (10 )     16       45       (8 )     (10 )     (11 )

 

  (3,833 )     (514 )     (1,218 )     (1,139 )     (962 )     (1,287 )     (163 )     (211 )     (448 )     (465 )

Cash flows (used in) from continuing operations

  (2,377 )     (499 )     (569 )     (619 )     (690 )     402       484       (125 )     204       (161 )

Cash flows (used in) from discontinued operations activities

  (9 )     (2 )     (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

  (2,375 )     (501 )     (577 )     (599 )     (698 )     405       481       (99 )     199       (176 )

Cash and cash equivalents at beginning of period

  3,063       1,189       1,766       2,365       3,063       2,658       2,582       2,681       2,482       2,658  

Cash and cash equivalents at end of period

  688       688       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

  687       687       1,187       1,761       2,356       3,052       3,052       2,573       2,674       2,475  

Cash and cash equivalents of discontinued operations

  1       1       2       5       9       11       11       9       7       7  

Total

  688       688       1,189       1,766       2,365       3,063       3,063       2,582       2,681       2,482  
                                                                               

Other information

                                                                             

Cash flow per share

$ 2.63    

$

0.25    

$

 1.08    

 $

 0.88    

 $

0.42    

$

3.63    

$

0.99    

 $

 1.17    

 $

 1.03    

  $

 0.44  

Annualized cash flow yield

  6.5 %     6.5 %     10.3 %     8.3 %     8.5 %     8.4 %     8.4 %     5.7 %     8.1 %     7.6 %

Common dividend payout

  63.2 %     79.4 %     48.2 %     66.4 %     67.5 %     32.4 %     66.4 %     0.0 %     0.0 %     64.0 %
 

BCE Inc. Supplementary Financial Information – Fourth 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 – Fourth 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 – Fourth 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 – Fourth Quarter 2009 Page 16