EX-99.2 3 supp_q410.htm SUPPLEMENTARY FINANCIAL INFORMATION - FOURTH QUARTER 2010 BCE Inc. Supplementary Financial Information - Fourth Quarter 2010

EXHIBIT 99.2

 

BCE Inc. (1)
Consolidated Operational Data

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

  Q4
2010 		      Q4
2009 		       $ change     % change       Total
2010 		      Total
2009 		      $ change     % change  

Operating revenues

  4,683       4,650       33     0.7 %     18,069       17,735       334     1.9 %

Cost of revenue, exclusive of depreciation and amortization

  (1,415 )     (1,258 )     (157 )   (12.5 %)     (4,949 )     (4,525 )     (424 )   (9.4 %)

Selling, general and administrative expenses (A)

  (1,457 )     (1,562 )     105     6.7 %     (5,706 )     (5,766 )     60     1.0 %

Net benefit plans cost

  (67 )     (93 )     26     28.0 %     (226 )     (355 )     129     36.3 %

EBITDA (3)

  1,744       1,737       7     0.4 %     7,188       7,089       99     1.4 %

EBITDA margin (4)

  37.2 %     37.4 %           (0.2 ) pts     39.8 %     40.0 %           (0.2 ) pts

Depreciation

  (655 )     (704 )     49     7.0 %     (2,542 )     (2,595 )     53     2.0 %

Amortization of intangible assets

  (201 )     (200 )     (1 )   (0.5 %)     (750 )     (776 )     26     3.4 %

Restructuring and other

  (52 )     (82 )     30     (36.6 %)     (224 )     (527 )     303     (57.5 %)

Operating income

  836       751       85     11.3 %     3,672       3,191       481     15.1 %

Other income (expense)

  3       28       (25 )   (89.3 %)     124       (18 )     142     n.m.  

Interest expense

  (174 )     (182 )     8     4.4 %     (670 )     (723 )     53     7.3 %

Pre-tax earnings from continuing operations

  665       597       68     11.4 %     3,126       2,450       676     27.6 %

Income tax expense

  (136 )     (141 )     5     3.5 %     (550 )     (368 )     (182 )   (49.5 %)

Non-controlling interest

  (61 )     (79 )     18     22.8 %     (299 )     (333 )     34     10.2 %

Earnings from continuing operations

  468       377       91     24.1 %     2,277       1,749       528     30.2 %

Discontinued operations

  -       (1 )     1     100.0 %     -       (11 )     11     100.0 %

Net earnings

  468       376       92     24.5 %     2,277       1,738       539     31.0 %

Dividends on preferred shares

  (29 )     (26 )     (3 )   (11.5 %)     (112 )     (107 )     (5 )   (4.7 %)

Net earnings applicable to common shares

  439       350       89     25.4 %     2,165       1,631       534     32.7 %

Net earnings per common share – basic

                                                         

Continuing operations

$ 0.58     $ 0.46     $ 0.12     26.1 %   $ 2.85     $ 2.12     $ 0.73     34.4 %

Discontinued operations

$ -     $ -     $ -     -     $ -     $ (0.01 )   $ 0.01     100.0 %

Net earnings

$ 0.58     $ 0.46     $ 0.12     26.1 %   $ 2.85     $ 2.11     $ 0.74     35.1 %

Net earnings per common share – diluted

                                                         

Continuing operations

$ 0.58     $ 0.46     $ 0.12     26.1 %   $ 2.85     $ 2.12     $ 0.73     34.4 %

Discontinued operations

$ -     $ -     $ -     -     $ -     $ (0.01 )   $ 0.01     100.0 %

Net earnings

$ 0.58     $ 0.46     $ 0.12     26.1 %   $ 2.85     $ 2.11     $ 0.74     35.1 %

Dividends per common share

$ 0.457     $ 0.405     $ 0.052     12.8 %   $ 1.78     $ 1.58     $ 0.20     12.7 %

Average number of common shares outstanding – basic (millions)

  754.1       767.2                     759.0       772.9                

Average number of common shares outstanding – diluted (millions)

  755.0       767.3                     759.5       772.9                

Number of common shares outstanding (millions)

  752.3       767.2                     752.3       767.2                
                                                           

The following items are included in net earnings:

                                                         

Net gains (losses) on investments

                                                         

Continuing operations

  -       11       (11 )   100.0 %     133       48       85     n.m.  

Discontinued operations

  -       -       -     0.0 %     -       (7 )     7     100.0 %

Restructuring and other

  (18 )     (48 )     30     62.5 %     (127 )     (339 )     212     62.5 %

Total

  (18 )     (37 )     19     51.4 %     6       (298 )     304     n.m.  

Impact on net earnings per share

$ (0.02 )   $ (0.05 )   $ 0.03     60.0 %   $ 0.01     $ (0.39 )   $ 0.40     n.m.  

Adjusted EPS (3)

$ 0.60     $ 0.51     $ 0.09     17.6 %   $ 2.84     $ 2.50     $ 0.34     13.6 %
                                                           
 
(A)

Excludes net benefit plans cost

n.m. : not meaningful

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 2

BCE Inc.
Consolidated Operational Data – Historical Trend

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

  Total
2010 		      Q4 10       Q3 10       Q2 10       Q1 10       Total
2009 		      Q4 09       Q3 09       Q2 09       Q1 09  

Operating revenues

  18,069       4,683       4,516       4,438       4,432       17,735       4,650       4,457       4,297       4,331  

Cost of revenue, exclusive of depreciation and amortization

  (4,949 )     (1,415 )     (1,204 )     (1,156 )     (1,174 )     (4,525 )     (1,258 )     (1,152 )     (1,029 )     (1,086 )

Selling, general and administrative expenses (A)

  (5,706 )     (1,457 )     (1,415 )     (1,388 )     (1,446 )     (5,766 )     (1,562 )     (1,418 )     (1,389 )     (1,397 )

Net benefit plans cost

  (226 )     (67 )     (65 )     (66 )     (28 )     (355 )     (93 )     (86 )     (88 )     (88 )

EBITDA

  7,188       1,744       1,832       1,828       1,784       7,089       1,737       1,801       1,791       1,760  

EBITDA margin

  39.8 %     37.2 %     40.6 %     41.2 %     40.3 %     40.0 %     37.4 %     40.4 %     41.7 %     40.6 %

Depreciation

  (2,542 )     (655 )     (647 )     (630 )     (610 )     (2,595 )     (704 )     (636 )     (630 )     (625 )

Amortization of intangible assets

  (750 )     (201 )     (181 )     (185 )     (183 )     (776 )     (200 )     (192 )     (191 )     (193 )

Restructuring and other

  (224 )     (52 )     (135 )     (8 )     (29 )     (527 )     (82 )     (191 )     (146 )     (108 )

Operating income

  3,672       836       869       1,005       962       3,191       751       782       824       834  

Other income (expense)

  124       3       (19 )     20       120       (18 )     28       (24 )     (23 )     1  

Interest expense

  (670 )     (174 )     (165 )     (166 )     (165 )     (723 )     (182 )     (171 )     (179 )     (191 )

Pre-tax earnings from continuing operations

  3,126       665       685       859       917       2,450       597       587       622       644  

Income tax (expense) recovery

  (550 )     (136 )     (51 )     (159 )     (204 )     (368 )     (141 )     87       (166 )     (148 )

Non-controlling interest

  (299 )     (61 )     (79 )     (83 )     (76 )     (333 )     (79 )     (90 )     (80 )     (84 )

Earnings from continuing operations

  2,277       468       555       617       637       1,749       377       584       376       412  

Discontinued operations

  -       -       -       -       -       (11 )     (1 )     -       (4 )     (6 )

Net earnings

  2,277       468       555       617       637       1,738       376       584       372       406  

Dividends on preferred shares

  (112 )     (29 )     (27 )     (27 )     (29 )     (107 )     (26 )     (26 )     (26 )     (29 )

Net earnings applicable to common shares

  2,165       439       528       590       608       1,631       350       558       346       377  

Net earnings per common share – basic

                                                                             

Continuing operations

$ 2.85     $ 0.58     $ 0.70     $ 0.78     $ 0.79     $ 2.12     $ 0.46     $ 0.72     $ 0.45     $ 0.49  

Discontinued operations

$ -     $ -     $ -     $ -     $ -     $ (0.01 )   $ -     $ -     $ -     $ (0.01 )

Net earnings

$ 2.85     $ 0.58     $ 0.70     $ 0.78     $ 0.79     $ 2.11     $ 0.46     $ 0.72     $ 0.45     $ 0.48  

Net earnings per common share – diluted

                                                                             

Continuing operations

$ 2.85     $ 0.58     $ 0.70     $ 0.78     $ 0.79     $ 2.12     $ 0.46     $ 0.72     $ 0.45     $ 0.49  

Discontinued operations

$ -     $ -     $ -     $ -     $ -     $ (0.01 )   $ -     $ -     $ -     $ (0.01 )

Net earnings

$ 2.85     $ 0.58     $ 0.70     $ 0.78     $ 0.79     $ 2.11     $ 0.46     $ 0.72     $ 0.45     $ 0.48  

Dividends per common share

$ 1.78     $ 0.457     $ 0.457     $ 0.435     $ 0.435     $ 1.58     $ 0.405     $ 0.405     $ 0.385     $ 0.385  

Average number of common shares outstanding – basic (millions)

  759.0       754.1       756.7       759.7       765.7       772.9       767.2       767.2       769.0       788.3  

Average number of common shares outstanding – diluted (millions)

  759.5       755.0       757.3       760.1       766.0       772.9       767.3       767.2       769.0       788.3  

Number of common shares outstanding (millions)

  752.3       752.3       755.6       759.1       763.0       767.2       767.2       767.2       767.2       780.6  
                                                                               

The following items are included in net earnings:

                                                                             

Net gains (losses) on investments

                                                                             

Continuing operations

  133       -       -       8       125       48       11       36       -       1  

Discontinued operations

  -       -       -       -       -       (7 )     -       (4 )     (3 )     -  

Restructuring and other

  (127 )     (18 )     (93 )     1       (17 )     (339 )     (48 )     (123 )     (98 )     (70 )

Total

  6       (18 )     (93 )     9       108       (298 )     (37 )     (91 )     (101 )     (69 )

Impact on net earnings per share

$ 0.01     $ (0.02 )   $ (0.12 )   $ 0.01     $ 0.14     $ (0.39 )   $ (0.05 )   $ (0.12 )   $ (0.13 )   $ (0.09 )

Adjusted EPS

$ 2.84     $ 0.60     $ 0.82     $ 0.77     $ 0.65     $ 2.50     $ 0.51     $ 0.84     $ 0.58     $ 0.57  
 
(A)

Excludes net benefit plans cost

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 3

BCE Inc.
Segmented Data (2)

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

Q4
2010 		    Q4
2009 		    $ change     % change     Total
2010 		    Total
2009 		    $ change     % change  

 

                                              

Revenues

                                             

Bell Wireline

2,769     2,840     (71 )   (2.5 %)   10,695     10,666     29     0.3 %

Bell Wireless

1,297     1,198     99     8.3 %   4,934     4,558     376     8.2 %

Inter-segment eliminations

(49 )   (56 )   7     12.5 %   (204 )   (204 )   -     0.0 %

Total Bell

4,017     3,982     35     0.9 %   15,425     15,020     405     2.7 %

Bell Aliant

777     785     (8 )   (1.0 %)   3,071     3,174     (103 )   (3.2 %)

Inter-segment eliminations

(111 )   (117 )   6     5.1 %   (427 )   (459 )   32     7.0 %

Total BCE Inc.

4,683     4,650     33     0.7 %   18,069     17,735     334     1.9 %
                                               

EBITDA

                                             

Bell Wireline

1,026     960     66     6.9 %   4,136     3,907     229     5.9 %

Margin

37.1 %   33.8 %         3.3  pts   38.7 %   36.6 %         2.1  pts

Bell Wireless

385     435     (50 )   (11.5 %)   1,721     1,812     (91 )   (5.0 %)

Margin

29.7 %   36.3 %         (6.6 ) pts   34.9 %   39.8 %         (4.9 ) pts

Total Bell

1,411     1,395     16     1.1 %   5,857     5,719     138     2.4 %

Margin

35.1 %   35.0 %         0.1  pts   38.0 %   38.1 %         (0.1 ) pts

Bell Aliant

333     342     (9 )   (2.6 %)   1,331     1,370     (39 )   (2.8 %)

Margin

42.9 %   43.6 %         (0.7 ) pts   43.3 %   43.2 %         0.1  pts

Total BCE Inc.

1,744     1,737     7     0.4 %   7,188     7,089     99     1.4 %

Margin

37.2 %   37.4 %         (0.2 ) pts   39.8 %   40.0 %         (0.2 ) pts
                                               

Operating income

                                             

Bell Wireline

454     280     174     62.1 %   1,812     1,148     664     57.8 %

Bell Wireless

237     292     (55 )   (18.8 %)   1,160     1,284     (124 )   (9.7 %)

Total Bell

691     572     119     20.8 %   2,972     2,432     540     22.2 %

Bell Aliant

145     179     (34 )   (19.0 %)   700     759     (59 )   (7.8 %)

Total BCE Inc.

836     751     85     11.3 %   3,672     3,191     481     15.1 %
                                               

Capital expenditures

                                             

Bell Wireline

631     498     (133 )   (26.7 %)   1,978     1,717     (261 )   (15.2 %)

Capital Intensity (5)

22.8 %   17.5 %         (5.3 ) pts   18.5 %   16.1 %         (2.4 ) pts

Bell Wireless

229     142     (87 )   (61.3 %)   485     673     188     27.9 %

Capital Intensity

17.7 %   11.9 %         (5.8 ) pts   9.8 %   14.8 %         5.0  pts

Total Bell

860     640     (220 )   (34.4 %)   2,463     2,390     (73 )   (3.1 %)

Capital Intensity

21.4 %   16.1 %         (5.3 ) pts   16.0 %   15.9 %         (0.1 ) pts

Bell Aliant

162     120     (42 )   (35.0 %)   496     464     (32 )   (6.9 %)

Capital Intensity

20.8 %   15.3 %         (5.5 ) pts   16.2 %   14.6 %         (1.6 ) pts

Total BCE Inc.

1,022     760     (262 )   (34.5 %)   2,959     2,854     (105 )   (3.7 %)

Capital Intensity

21.8 %   16.3 %         (5.5 ) pts   16.4 %   16.1 %         (0.3 ) pts
                                               

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 4

BCE Inc.
Segmented Data – Historical Trend

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

Total
2010 		    Q4 10     Q3 10     Q2 10     Q1 10     Total
2009 		    Q4 09     Q3 09     Q2 09     Q1 09  
                                                           

Revenues

                                                         

Bell Wireline

10,695     2,769     2,636     2,632     2,658     10,666     2,840     2,659     2,575     2,592  

Bell Wireless

4,934     1,297     1,274     1,210     1,153     4,558     1,198     1,178     1,104     1,078  

Inter-segment eliminations

(204 )   (49 )   (52 )   (50 )   (53 )   (204 )   (56 )   (49 )   (51 )   (48 )

Total Bell

15,425     4,017     3,858     3,792     3,758     15,020     3,982     3,788     3,628     3,622  

Bell Aliant

3,071     777     762     753     779     3,174     785     786     785     818  

Inter-segment eliminations

(427 )   (111 )   (104 )   (107 )   (105 )   (459 )   (117 )   (117 )   (116 )   (109 )

Total BCE Inc.

18,069     4,683     4,516     4,438     4,432     17,735     4,650     4,457     4,297     4,331  
                                                           

EBITDA

                                                         

Bell Wireline

4,136     1,026     1,026     1,041     1,043     3,907     960     973     982     992  

Margin

38.7 %   37.1 %   38.9 %   39.6 %   39.2 %   36.6 %   33.8 %   36.6 %   38.1 %   38.3 %

Bell Wireless

1,721     385     467     457     412     1,812     435     475     468     434  

Margin

34.9 %   29.7 %   36.7 %   37.8 %   35.7 %   39.8 %   36.3 %   40.3 %   42.4 %   40.3 %

Total Bell

5,857     1,411     1,493     1,498     1,455     5,719     1,395     1,448     1,450     1,426  

Margin

38.0 %   35.1 %   38.7 %   39.5 %   38.7 %   38.1 %   35.0 %   38.2 %   40.0 %   39.4 %

Bell Aliant

1,331     333     339     330     329     1,370     342     353     341     334  

Margin

43.3 %   42.9 %   44.5 %   43.8 %   42.2 %   43.2 %   43.6 %   44.9 %   43.4 %   40.8 %

Total BCE Inc.

7,188     1,744     1,832     1,828     1,784     7,089     1,737     1,801     1,791     1,760  

Margin

39.8 %   37.2 %   40.6 %   41.2 %   40.3 %   40.0 %   37.4 %   40.4 %   41.7 %   40.6 %
                                                           

Operating income

                                                         

Bell Wireline

1,812     454     341     501     516     1,148     280     229     290     349  

Bell Wireless

1,160     237     333     319     271     1,284     292     354     338     300  

Total Bell

2,972     691     674     820     787     2,432     572     583     628     649  

Bell Aliant

700     145     195     185     175     759     179     199     196     185  

Total BCE Inc.

3,672     836     869     1,005     962     3,191     751     782     824     834  
                                                           

Capital expenditures

                                                         

Bell Wireline

1,978     631     513     455     379     1,717     498     412     455     352  

Capital Intensity

18.5 %   22.8 %   19.5 %   17.3 %   14.3 %   16.1 %   17.5 %   15.5 %   17.7 %   13.6 %

Bell Wireless

485     229     121     83     52     673     142     177     224     130  

Capital Intensity

9.8 %   17.7 %   9.5 %   6.9 %   4.5 %   14.8 %   11.9 %   15.0 %   20.3 %   12.1 %

Total Bell

2,463     860     634     538     431     2,390     640     589     679     482  

Capital Intensity

16.0 %   21.4 %   16.4 %   14.2 %   11.5 %   15.9 %   16.1 %   15.5 %   18.7 %   13.3 %

Bell Aliant

496     162     114     125     95     464     120     115     121     108  

Capital Intensity

16.2 %   20.8 %   15.0 %   16.6 %   12.2 %   14.6 %   15.3 %   14.6 %   15.4 %   13.2 %

Total BCE Inc.

2,959     1,022     748     663     526     2,854     760     704     800     590  

Capital Intensity

16.4 %   21.8 %   16.6 %   14.9 %   11.9 %   16.1 %   16.3 %   15.8 %   18.6 %   13.6 %

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 5

Bell Wireline (2)

 

Q4     Q4           Total     Total        

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

2010     2009     % change     2010     2009     % change  

Bell Wireline

                                 

Local & access

733     775     (5.4 %)   3,012     3,159     (4.7 %)

Long distance

234     265     (11.7 %)   932     1,078     (13.5 %)

Data

970     973     (0.3 %)   3,691     3,696     (0.1 %)

Video

450     417     7.9 %   1,749     1,593     9.8 %

Equipment & other

304     324     (6.2 %)   991     817     21.3 %

Total external revenues

2,691     2,754     (2.3 %)   10,375     10,343     0.3 %

Inter-segment revenues

78     86     (9.3 %)   320     323     (0.9 %)

Total Bell Wireline operating revenue

2,769     2,840     (2.5 %)   10,695     10,666     0.3 %

Operating expenses

(1,743 )   (1,880 )   7.3 %   (6,559 )   (6,759 )   3.0 %

EBITDA

1,026     960     6.9 %   4,136     3,907     5.9 %

EBITDA Margin

37.1 %   33.8 %   3.3  pts   38.7 %   36.6 %   2.1  pts

Operating income

454     280     62.1 %   1,812     1,148     57.8 %
                                   

Capital expenditures

631     498     (26.7 %)   1,978     1,717     (15.2 %)

Capital intensity

22.8 %   17.5 %   (5.3 ) pts   18.5 %   16.1 %   (2.4 ) pts
                                   

Local

                                 

Network access services (NAS)

                                 

Residential

3,608,887     3,886,530     (7.1 %)   3,608,887     3,886,530     (7.1 %)

Business

2,866,818     2,974,492     (3.6 %)   2,866,818     2,974,492     (3.6 %)

Total

6,475,705     6,861,022     (5.6 %)   6,475,705     6,861,022     (5.6 %)

Network access service net losses

                                 

Residential

(36,550 )   (79,010 )   53.7 %   (277,643 )   (334,541 )   17.0 %

Business

(27,622 )   (28,493 )   3.1 %   (107,674 )   (112,883 )   4.6 %

Total

(64,172 )   (107,503 )   40.3 %   (385,317 )   (447,424 )   13.9 %

Internet

                                 

High Speed Internet net activations

12,099     7,808     55.0 %   40,335     37,618     7.2 %

High Speed Internet subscribers EOP (A)

2,097,326     2,056,991     2.0 %   2,097,326     2,056,991     2.0 %

Video (DTH and VDSL)

                                 

Net subscriber activations

23,019     40,889     (43.7 %)   71,221     113,315     (37.1 %)

Total subscribers EOP (A)

2,020,098     1,948,877     3.7 %   2,020,098     1,948,877     3.7 %

ARPU (6) ($/month)

74.79     71.12     5.2 %   73.49     69.59     5.6 %

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

1.5 %   1.3 %   (0.2 ) pts   1.4 %   1.2 %   (0.2 ) pts
 
(A)

Following a company-wide review of subscriber metrics, our Internet and Video customer base were reduced by 35,160 and 16,209 respectively, at the end of Q4 2009.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 6

Bell Wireline – Historical Trend

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

Total
2010 		    Q4 10     Q3 10     Q2 10     Q1 10     Total
2009 		    Q4 09     Q3 09     Q2 09     Q1 09  

Bell Wireline

                                                         

Local & access

3,012     733     759     758     762     3,159     775     783     796     805  

Long distance

932     234     227     233     238     1,078     265     264     271     278  

Data

3,691     970     900     909     912     3,696     973     892     919     912  

Video

1,749     450     437     434     428     1,593     417     400     389     387  

Equipment & other

991     304     231     219     237     817     324     241     119     133  

Total external revenues

10,375     2,691     2,554     2,553     2,577     10,343     2,754     2,580     2,494     2,515  

Inter-segment revenues

320     78     82     79     81     323     86     79     81     77  

Total Bell Wireline operating revenue

10,695     2,769     2,636     2,632     2,658     10,666     2,840     2,659     2,575     2,592  

Operating expenses

(6,559 )   (1,743 )   (1,610 )   (1,591 )   (1,615 )   (6,759 )   (1,880 )   (1,686 )   (1,593 )   (1,600 )

EBITDA

4,136     1,026     1,026     1,041     1,043     3,907     960     973     982     992  

EBITDA Margin

38.7 %   37.1 %   38.9 %   39.6 %   39.2 %   36.6 %   33.8 %   36.6 %   38.1 %   38.3 %

Operating income

1,812     454     341     501     516     1,148     280     229     290     349  
                                                           

Capital expenditures

1,978     631     513     455     379     1,717     498     412     455     352  

Capital intensity

18.5 %   22.8 %   19.5 %   17.3 %   14.3 %   16.1 %   17.5 %   15.5 %   17.7 %   13.6 %
                                                           

Local

                                                         

Network access services (NAS)

                                                         

Residential

3,608,887     3,608,887     3,645,437     3,713,920     3,810,912     3,886,530     3,886,530     3,965,540     4,041,926     4,143,305  

Business

2,866,818     2,866,818     2,894,440     2,918,126     2,950,281     2,974,492     2,974,492     3,002,985     3,029,686     3,060,902  

Total

6,475,705     6,475,705     6,539,877     6,632,046     6,761,193     6,861,022     6,861,022     6,968,525     7,071,612     7,204,207  

Network access service net losses

                                                         

Residential

(277,643 )   (36,550 )   (68,483 )   (96,992 )   (75,618 )   (334,541 )   (79,010 )   (76,386 )   (101,379 )   (77,766 )

Business

(107,674 )   (27,622 )   (23,686 )   (32,155 )   (24,211 )   (112,883 )   (28,493 )   (26,701 )   (31,216 )   (26,473 )

Total

(385,317 )   (64,172 )   (92,169 )   (129,147 )   (99,829 )   (447,424 )   (107,503 )   (103,087 )   (132,595 )   (104,239 )

Internet

                                                         

High Speed Internet net activations

40,335     12,099     21,668     (3,899 )   10,467     37,618     7,808     21,531     1,991     6,288  

High Speed Internet subscribers EOP (A)

2,097,326     2,097,326     2,085,227     2,063,559     2,067,458     2,056,991     2,056,991     2,084,343     2,062,812     2,060,821  

Video (DTH and VDSL)

                                                         

Net subscriber activations

71,221     23,019     18,538     9,775     19,889     113,315     40,889     40,665     20,018     11,743  

Total subscribers EOP (A)

2,020,098     2,020,098     1,997,079     1,978,541     1,968,766     1,948,877     1,948,877     1,924,197     1,883,532     1,863,514  

ARPU ($/month)

73.49     74.79     73.34     73.43     72.60     69.59     71.12     69.35     68.98     68.84  

Churn (%) (average per month)

1.4 %   1.5 %   1.6 %   1.3 %   1.1 %   1.2 %   1.3 %   1.4 %   1.1 %   1.1 %
 
(A)

Following a company-wide review of subscriber metrics, our Internet and Video customer base were reduced by 35,160 and 16,209 respectively, at the end of Q4 2009.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 7

Bell Wireless (2)

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

Q4
2010 		    Q4
2009 		    % change     Total
2010 		    Total
2009 		    % change  

Bell Wireless

                                 

Revenue

                                 

Service

1,151     1,055     9.1 %   4,481     4,102     9.2 %

Product

134     129     3.9 %   407     405     0.5 %

Total external Bell Wireless revenues

1,285     1,184     8.5 %   4,888     4,507     8.5 %

Inter-segment revenues

12     14     (14.3 %)   46     51     (9.8 %)

Total Bell Wireless operating revenues

1,297     1,198     8.3 %   4,934     4,558     8.2 %

Operating expenses

(912 )   (763 )   (19.5 %)   (3,213 )   (2,746 )   (17.0 %)

EBITDA

385     435     (11.5 %)   1,721     1,812     (5.0 %)

EBITDA margin (Total revenues)

29.7 %   36.3 %   (6.6 ) pts   34.9 %   39.8 %   (4.9 ) pts

EBITDA margin (Service revenues)

33.4 %   41.2 %   (7.8 ) pts   38.4 %   44.2 %   (5.8 ) pts

Operating Income

237     292     (18.8 %)   1,160     1,284     (9.7 %)
                                   

Capital expenditures

229     142     (61.3 %)   485     673     27.9 %

Capital intensity

17.7 %   11.9 %   (5.8 ) pts   9.8 %   14.8 %   5.0  pts
                                   

Wireless gross activations (A)

552,714     523,739     5.5 %   1,999,482     1,794,237     11.4 %

Postpaid

399,041     300,233     32.9 %   1,332,086     1,056,126     26.1 %

Wireless net activations (A)

116,782     162,859     (28.3 %)   408,746     372,607     9.7 %

Postpaid

156,708     109,921     42.6 %   500,139     330,815     51.2 %

Wireless subscribers EOP (A) (C)

7,242,048     6,833,302     6.0 %   7,242,048     6,833,302     6.0 %

Postpaid

5,541,369     5,041,230     9.9 %   5,541,369     5,041,230     9.9 %

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

52.34     51.08     2.5 %   52.03     51.70     0.6 %

Prepaid

16.96     18.45     (8.1 %)   17.76     17.15     3.6 %

Postpaid

63.47     62.47     1.6 %   63.49     62.87     1.0 %

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

2.0 %   1.8 %   (0.2 ) pts   1.9 %   1.7 %   (0.2 ) pts

Prepaid

3.6 %   3.2 %   (0.4 ) pts   3.5 %   3.2 %   (0.3 ) pts

Postpaid

1.5 %   1.3 %   (0.2 ) pts   1.4 %   1.3 %   (0.1 ) pts

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

277     281     (1.4 %)   274     287     (4.5 %)

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

448     327     (37.0 %)   397     350     (13.4 %)

PRO FORMA (D)

                                 

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

52.34     51.08     2.5 %   52.03     50.88     2.3 %

Prepaid

16.96     18.45     (8.1 %)   17.76     17.53     1.3 %

Postpaid

63.47     62.47     1.6 %   63.49     62.81     1.1 %

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

2.0 %   1.8 %   (0.2 ) pts   1.9 %   1.8 %   (0.1 ) pts

Prepaid

3.6 %   3.2 %   (0.4 ) pts   3.5 %   3.2 %   (0.3 ) pts

Postpaid

1.5 %   1.3 %   (0.2 ) pts   1.4 %   1.3 %   (0.1 ) pts

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

277     281     (1.4 %)   274     283     (3.2 %)

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

448     327     (37.0 %)   397     336     (18.2 %)
 
(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)

Following a company-wide review of subscriber metrics, we reduced subscribers by 34,752 for postpaid and 2,074 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.
(D)

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 2010 Page 8

Bell Wireless – Historical Trend

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

Total
2010 		    Q4 10     Q3 10     Q2 10     Q1 10     Total
2009 		    Q4 09     Q3 09     Q2 09     Q1 09  

Bell Wireless

                                                         

Revenue

                                                         

Service

4,481     1,151     1,160     1,114     1,056     4,102     1,055     1,056     1,005     986  

Product

407     134     103     84     86     405     129     106     88     82  

Total external Bell Wireless revenues

4,888     1,285     1,263     1,198     1,142     4,507     1,184     1,162     1,093     1,068  

Inter-segment revenues

46     12     11     12     11     51     14     16     11     10  

Total Bell Wireless operating revenues

4,934     1,297     1,274     1,210     1,153     4,558     1,198     1,178     1,104     1,078  

Operating expenses

(3,213 )   (912 )   (807 )   (753 )   (741 )   (2,746 )   (763 )   (703 )   (636 )   (644 )

EBITDA

1,721     385     467     457     412     1,812     435     475     468     434  

EBITDA margin (Total revenues)

34.9 %   29.7 %   36.7 %   37.8 %   35.7 %   39.8 %   36.3 %   40.3 %   42.4 %   40.3 %

EBITDA margin (Service revenues)

38.4 %   33.4 %   40.3 %   41.0 %   39.0 %   44.2 %   41.2 %   45.0 %   46.6 %   44.0 %

Operating Income

1,160     237     333     319     271     1,284     292     354     338     300  
                                                           

Capital expenditures

485     229     121     83     52     673     142     177     224     130  

Capital intensity

9.8 %   17.7 %   9.5 %   6.9 %   4.5 %   14.8 %   11.9 %   15.0 %   20.3 %   12.1 %
                                                           

Wireless gross activations (A)

1,999,482     552,714     537,295     480,639     428,834     1,794,237     523,739     500,895     403,751     365,852  

Postpaid

1,332,086     399,041     368,154     300,579     264,312     1,056,126     300,233     301,876     243,886     210,131  

Wireless net activations (A)

408,746     116,782     137,880     98,459     55,625     372,607     162,859     134,737     44,716     30,295  

Postpaid

500,139     156,708     159,465     102,754     81,212     330,815     109,921     121,692     64,181     35,021  

Wireless subscribers EOP (A) (C)

7,242,048     7,242,048     7,125,266     6,987,386     6,888,927     6,833,302     6,833,302     6,707,269     6,572,532     6,527,816  

Postpaid

5,541,369     5,541,369     5,384,661     5,225,196     5,122,442     5,041,230     5,041,230     4,966,061     4,844,369     4,780,188  

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

52.03     52.34     53.54     52.12     50.07     51.70     51.08     52.13     52.05     51.52  

Prepaid

17.76     16.96     18.85     18.35     16.87     17.15     18.45     18.36     16.41     15.38  

Postpaid

63.49     63.47     65.04     63.66     61.72     62.87     62.47     64.09     62.58     62.34  

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

1.9 %   2.0 %   1.9 %   1.8 %   1.8 %   1.7 %   1.8 %   1.8 %   1.7 %   1.6 %

Prepaid

3.5 %   3.6 %   3.4 %   3.4 %   3.4 %   3.2 %   3.2 %   3.5 %   3.3 %   2.9 %

Postpaid

1.4 %   1.5 %   1.4 %   1.3 %   1.2 %   1.3 %   1.3 %   1.3 %   1.3 %   1.2 %

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

274     277     280     284     259     287     281     291     299     279  

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

397     448     392     374     362     350     327     320     356     397  

PRO FORMA (D)

                                                         

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

52.03     52.34     53.54     52.12     50.07     50.88     51.08     52.13     50.46     49.84  

Prepaid

17.76     16.96     18.85     18.35     16.87     17.53     18.45     18.36     17.26     16.05  

Postpaid

63.49     63.47     65.04     63.66     61.72     62.81     62.47     64.09     62.48     62.24  

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

1.9 %   2.0 %   1.9 %   1.8 %   1.8 %   1.8 %   1.8 %   1.8 %   1.8 %   1.7 %

Prepaid

3.5 %   3.6 %   3.4 %   3.4 %   3.4 %   3.2 %   3.2 %   3.5 %   3.3 %   3.0 %

Postpaid

1.4 %   1.5 %   1.4 %   1.3 %   1.2 %   1.3 %   1.3 %   1.3 %   1.3 %   1.3 %

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

274     277     280     284     259     283     281     291     290     271  

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

397     448     392     374     362     336     327     320     333     374  
 
(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)

Following a company-wide review of subscriber metrics, we reduced subscribers by 34,752 for postpaid and 2,074 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.

(D)

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 2010 Page 9

     BCE Inc.
Net debt and other information (2)

BCE Inc. – Net debt and preferreds

               

 

                

At December 31, 2010

      BCE Inc.        

(unaudited)

               

($ millions, except where otherwise indicated)

               

 

      Bell        

 

Bell     Aliant     BCE Inc.  

Debt due within one year

653     676     1,329  

Long-term debt

8,221     2,360     10,581  

Securitization of accounts receivable

1,140     128     1,268  

Preferred shares – BCE (1)

1,385     -     1,385  

Cash and cash equivalents

(752 )   (22 )   (774 )

Net debt

10,647     3,142     13,789  

Bell – Balance Sheet Information

                           

(unaudited)

                           

($ millions, except where otherwise indicated)

December 31     September 30     June 30     March 31     Dec. 31  

 

2010     2010     2010     2010     2009  

 

                            

Debt due within one year

653     527     511     580     543  

Long-term debt

8,221     7,535     7,533     7,543     7,541  

Securitization of accounts receivable

1,140     1,140     1,136     1,140     1,140  

Preferred shares – BCE (1)

1,385     2,770     2,770     2,770     2,770  

Cash and cash equivalents

(752 )   (1,170 )   (916 )   (730 )   (660 )

Net Debt

10,647     10,802     11,034     11,303     11,334  

 

                            

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

1.73     1.76     1.81     1.87     1.89  

EBITDA, including Bell Aliant distributions to BCE: Net interest, securitization costs and preferred dividends (trailing 12 months)(2)

10.70     9.61     9.42     9.17     8.79  

 

                            

Cash Flow Information

                                             

(unaudited)

Q4     Q4                 Total     Total              

($ millions, except where otherwise indicated)

2010     2009     $ change     % change     2010     2009     $ change     % change  
                                               

Free Cash Flow (FCF)

                                             

Cash from operating activities

290     621     (331 )   (53.3 %)   3,756     3,755     1     0.0 %

Capital expenditures

(860 )   (640 )   (220 )   (34.4 %)   (2,463 )   (2,390 )   (73 )   (3.1 %)

Other investing activities

(24 )   (12 )   (12 )   (100.0 %)   (102 )   (93 )   (9 )   (9.7 %)

Dividends paid on preferred shares

(28 )   (26 )   (2 )   (7.7 %)   (108 )   (107 )   (1 )   (0.9 %)

Bell Aliant distributions to BCE

73     72     1     1.4 %   291     291     -     0.0 %

FCF

(549 )   15     (564 )   n.m.     1,374     1,456     (82 )   (5.6 %)
                                               

Cash Flow Information – Historical Trend

                                                         

(unaudited)

Total     Q4     Q3     Q2     Q1     Total     Q4     Q3     Q2     Q1  

($ millions, except where otherwise indicated)

2010     2010     2010     2010     2010     2009     2009     2009     2009     2009  
                                                           

Free Cash Flow (FCF)

                                                         

Cash from operating activities

3,756     290     1,422     1,091     953     3,755     621     1,230     1,181     723  

Capital expenditures

(2,463 )   (860 )   (634 )   (538 )   (431 )   (2,390 )   (640 )   (589 )   (679 )   (482 )

Other investing activities

(102 )   (24 )   (24 )   (32 )   (22 )   (93 )   (12 )   (39 )   (28 )   (14 )

Dividends paid on preferred shares

(108 )   (28 )   (25 )   (27 )   (28 )   (107 )   (26 )   (26 )   (27 )   (28 )

Bell Aliant distributions to BCE

291     73     73     72     73     291     72     73     73     73  

FCF

1,374     (549 )   812     566     545     1,456     15     649     520     272  
                                                           
 
(1)

At December 31, 2010 net debt includes 50% of preferred shares (prior quarters included 100% of preferred shares).
(2)

At December 31, 2010, consistent with our definition of net debt, 50% of preferred dividends are included (prior quarters included 100% of preferred dividends).

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 10

BCE Inc.
Consolidated Balance Sheet Data

 

December 31     September 30     June 30     March 31     December 31  

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

2010     2010     2010     2010     2009  

ASSETS

                           

Current assets

                           

Cash and cash equivalents

774     1,185     928     748     687  

Accounts receivable

1,785     1,475     1,375     1,523     1,605  

Future income taxes

99     143     176     128     110  

Inventory

437     459     417     446     448  

Prepaid expenses

231     308     369     389     296  

Other current assets

205     191     163     146     138  

Total current assets

3,531     3,761     3,428     3,380     3,284  

Capital assets

                           

Property, plant and equipment

19,699     19,444     19,368     19,381     19,441  

Finite-life intangible assets

2,375     2,361     2,415     2,483     2,541  

Indefinite-life intangible assets

3,906     3,885     3,861     3,817     3,803  

Total capital assets

25,980     25,690     25,644     25,681     25,785  

Other long-term assets

3,963     3,214     3,175     3,126     3,207  

Goodwill

5,802     5,771     5,771     5,774     5,774  

Total assets

39,276     38,436     38,018     37,961     38,050  

LIABILITIES

                           

Current liabilities

                           

Accounts payable and accrued liabilities

4,088     3,966     3,545     3,571     3,719  

Interest payable

112     129     108     133     113  

Dividends payable

387     388     373     375     354  

Debt due within one year

1,329     1,139     670     747     600  

Total current liabilities

5,916     5,622     4,696     4,826     4,786  

Long-term debt

10,581     9,899     10,292     10,301     10,299  

Other long-term liabilities

4,586     4,647     4,808     4,808     4,942  

Total liabilities

21,083     20,168     19,796     19,935     20,027  

Non-controlling interest

986     1,013     1,023     1,031     1,049  

SHAREHOLDERS’ EQUITY

                           

Preferred shares

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

Common shareholders’ equity

                           

Common shares

12,691     12,741     12,790     12,851     12,921  

Contributed surplus

2,470     2,473     2,479     2,485     2,490  

Accumulated other comprehensive income

(30 )   1     20     (38 )   92  

Deficit

(694 )   (730 )   (860 )   (1,073 )   (1,299 )

Total common shareholders’ equity

14,437     14,485     14,429     14,225     14,204  

Total shareholders’ equity

17,207     17,255     17,199     16,995     16,974  

Total liabilities and shareholders’ equity

39,276     38,436     38,018     37,961     38,050  

Number of common shares outstanding

752.3     755.6     759.1     763.0     767.2  


 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 11

BCE Inc.
Consolidated Cash Flow Data

 

  Q4       Q4               Total       Total          

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

  2010       2009       $ change       2010       2009       $ change  

Cash flows from operating activities

                                             

Net earnings

  468       376       92       2,277       1,738       539  

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

  -       (1 )     1       -       (11 )     11  

Earnings from continuing operations

  468       377       91       2,277       1,749       528  

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

                                             

Depreciation and amortization of intangible assets

  856       904       (48 )     3,292       3,371       (79 )

Net benefit plans cost

  67       93       (26 )     226       355       (129 )

Restructuring and other

  52       82       (30 )     224       527       (303 )

Gains on investments

  -       (11 )     11       (136 )     (49 )     (87 )

Future income taxes

  264       278       (14 )     238       32       206  

Non-controlling interest

  61       79       (18 )     299       333       (34 )

Contributions to employee pension plans

  (901 )     (785 )     (116 )     (1,315 )     (1,068 )     (247 )

Other employee future benefit plan payments

  (25 )     (24 )     (1 )     (98 )     (96 )     (2 )

Payments of restructuring and other

  (60 )     (58 )     (2 )     (238 )     (310 )     72  

Operating assets and liabilities

  (214 )     13       (227 )     (45 )     40       (85 )

Cash flows from operating activities

  568       948       (380 )     4,724       4,884       (160 )

Bell Aliant distributions to BCE

  73       72       1       291       291       -  

Capital expenditures

  (1,022 )     (760 )     (262 )     (2,959 )     (2,854 )     (105 )

Other investing activities

  (22 )     (11 )     (11 )     (98 )     (89 )     (9 )

Cash dividends paid on preferred shares

  (28 )     (26 )     (2 )     (108 )     (107 )     (1 )

Cash distributions paid by subsidiaries to non-controlling interest

  (93 )     (92 )     (1 )     (370 )     (369 )     (1 )

Bell Aliant Free Cash Flow

  (25 )     (116 )     91       (106 )     (300 )     194  

Free Cash Flow (3)

  (549 )     15       (564 )     1,374       1,456       (82 )

Bell Aliant undistributed Free Cash Flow

  (48 )     44       (92 )     (185 )     9       (194 )

Business acquisitions

  (75 )     (4 )     (71 )     (62 )     (338 )     276  

Business dispositions

  -       1       (1 )     8       11       (3 )

Going-private costs

  -       -       -       -       (7 )     7  

Increase in investments

  (1 )     (50 )     49       (4 )     (53 )     49  

Decrease in investments

  -       58       (58 )     139       113       26  

Increase (decrease) in notes payable and bank advances

  106       (39 )     145       253       (194 )     447  

Issue of long-term debt

  1,016       -       1,016       1,366       1,348       18  

Repayment of long-term debt

  (321 )     (203 )     (118 )     (956 )     (2,539 )     1,583  

Cash dividends paid on common shares

  (346 )     (310 )     (36 )     (1,318 )     (1,201 )     (117 )

Issue of common shares

  11       -       11       39       2       37  

Repurchase of common shares

  (125 )     -       (125 )     (500 )     (894 )     394  

Other financing activities

  (79 )     (11 )     (68 )     (68 )     (90 )     22  

 

  138       (514 )     652       (1,288 )     (3,833 )     2,545  

Cash flows (used in) from continuing operations

  (411 )     (499 )     88       86       (2,377 )     2,463  

Cash flows (used in) from discontinued operations

  (1 )     (2 )     1       -       2       (2 )

Net (decrease) increase in cash and cash equivalents

  (412 )     (501 )     89       86       (2,375 )     2,461  

Cash and cash equivalents at beginning of period

  1,186       1,189       (3 )     688       3,063       (2,375 )

Cash and cash equivalents at end of period

  774       688       86       774       688       86  

Consists of:

                                             

Cash and cash equivalents of continuing operations

  774       687       87       774       687       87  

Cash and cash equivalents of discontinued operations

  -       1       (1 )     -       1       (1 )

Total

  774       688       86       774       688       86  
                                               

Other information

                                             

Cash flow per share (9)

$ (0.59 )   $ 0.25     $ (0.84 )   $ 2.33     $ 2.63     $ (0.30 )

Annualized cash flow yield (10)

  5.2 %     6.5 %     (1.3 ) pts     5.2 %     6.5 %     (1.3 ) pts
                                               


 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 12

BCE Inc.
Consolidated Cash Flow Data – Historical Trend

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

  Total
2010 		      Q4 10       Q3 10       Q2 10       Q1 10        Total
2009 		      Q4 09       Q3 09       Q2 09       Q1 09  

Cash flows from operating activities

                                                                              

Net earnings

  2,277       468       555       617       637        1,738       376       584       372       406  

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

  -       -       -       -       -        (11 )     (1 )     -       (4 )     (6 )

Earnings from continuing operations

  2,277       468       555       617       637        1,749       377       584       376       412  

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

                                                                              

Depreciation and amortization of intangible assets

  3,292       856       828       815       793        3,371       904       828       821       818  

Net benefit plans cost

  226       67       65       66       28        355       93       86       88       88  

Restructuring and other

  224       52       135       8       29        527       82       191       146       108  

Gains on investments

  (136 )     -       (1 )     (10 )     (125 )      (49 )     (11 )     (36 )     -       (2 )

Future income taxes

  238       264       (32 )     (18 )     24        32       278       (228 )     (5 )     (13 )

Non-controlling interest

  299       61       79       83       76        333       79       90       80       84  

Contributions to employee pension plans

  (1,315 )     (901 )     (115 )     (144 )     (155 )      (1,068 )     (785 )     (99 )     (92 )     (92 )

Other employee future benefit plan payments

  (98 )     (25 )     (25 )     (24 )     (24 )      (96 )     (24 )     (25 )     (23 )     (24 )

Payments of restructuring and other

  (238 )     (60 )     (35 )     (49 )     (94 )      (310 )     (58 )     (70 )     (105 )     (77 )

Operating assets and liabilities

  (45 )     (214 )     216       44       (91 )      40       13       216       188       (377 )

Cash flows from operating activities

  4,724       568       1,670       1,388       1,098        4,884       948       1,537       1,474       925  

Bell Aliant distributions to BCE

  291       73       73       72       73        291       72       73       73       73  

Capital expenditures

  (2,959 )     (1,022 )     (748 )     (663 )     (526 )      (2,854 )     (760 )     (704 )     (800 )     (590 )

Other investing activities

  (98 )     (22 )     (24 )     (31 )     (21 )      (89 )     (11 )     (38 )     (27 )     (13 )

Cash dividends paid on preferred shares

  (108 )     (28 )     (25 )     (27 )     (28 )      (107 )     (26 )     (26 )     (27 )     (28 )

Cash distributions paid by subsidiaries to non-controlling interest

  (370 )     (93 )     (92 )     (93 )     (92 )      (369 )     (92 )     (93 )     (92 )     (92 )

Bell Aliant Free Cash Flow

  (106 )     (25 )     (42 )     (80 )     41        (300 )     (116 )     (100 )     (81 )     (3 )

Free Cash Flow

  1,374       (549 )     812       566       545        1,456       15       649       520       272  

Bell Aliant undistributed Free Cash Flow

  (185 )     (48 )     (31 )     8       (114 )      9       44       27       8       (70 )

Business acquisitions

  (62 )     (75 )     -       4       9        (338 )     (4 )     (313 )     (1 )     (20 )

Business dispositions

  8       -       -       8       -        11       1       10       -       -  

Going-private costs

  -       -       -       -       -        (7 )     -       -       (1 )     (6 )

Increase in investments

  (4 )     (1 )     -       (3 )     -        (53 )     (50 )     (2 )     (1 )     -  

Decrease in investments

  139       -       6       123       10        113       58       55       -       -  

Increase (decrease) in notes payable and bank advances

  253       106       33       2       112        (194 )     (39 )     (5 )     (238 )     88  

Issue of long-term debt

  1,366       1,016       350       -       -        1,348       -       -       1,348       -  

Repayment of long-term debt

  (956 )     (321 )     (404 )     (175 )     (56 )      (2,539 )     (203 )     (656 )     (1,586 )     (94 )

Cash dividends paid on common shares

  (1,318 )     (346 )     (329 )     (333 )     (310 )      (1,201 )     (310 )     (296 )     (301 )     (294 )

Issue of common shares

  39       11       15       12       1        2       -       -       1       1  

Repurchase of common shares

  (500 )     (125 )     (125 )     (125 )     (125 )      (894 )     -       -       (337 )     (557 )

Other financing activities

  (68 )     (79 )     (70 )     92       (11 )      (90 )     (11 )     (38 )     (31 )     (10 )

 

  (1,288 )     138       (555 )     (387 )     (484 )      (3,833 )     (514 )     (1,218 )     (1,139 )     (962 )

Cash flows from (used in) continuing operations

  86       (411 )     257       179       61        (2,377 )     (499 )     (569 )     (619 )     (690 )

Cash flows (used in) from discontinued operations

  -       (1 )     -       1       -        2       (2 )     (8 )     20       (8 )

Net increase (decrease) in cash and cash equivalents

  86       (412 )     257       180       61        (2,375 )     (501 )     (577 )     (599 )     (698 )

Cash and cash equivalents at beginning of period

  688       1,186       929       749       688        3,063       1,189       1,766       2,365       3,063  

Cash and cash equivalents at end of period

  774       774       1,186       929       749        688       688       1,189       1,766       2,365  

Consists of:

                                                                              

Cash and cash equivalents of continuing operations

  774       774       1,185       928       748        687       687       1,187       1,761       2,356  

Cash and cash equivalents of discontinued operations

  -       -       1       1       1        1       1       2       5       9  

Total

  774       774       1,186       929       749        688       688       1,189       1,766       2,365  
                                                                                

Other information

                                                                              

Cash flow per share

$ 2.33     $ (0.59 )    

  $

 1.22    

$

 0.95    

$

 0.75     $ 2.63    

$

 0.25    

$

 1.08    

$

 0.88    

$

 0.42  

Annualized cash flow yield

  5.2 %     5.2 %     7.6 %     7.5 %     7.6 %      6.5 %     6.5 %     10.3 %     8.3 %     8.5 %


 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 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 subsidiaries.
 
(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 2010 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 2010 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

BCE Inc. Supplementary Financial Information – Fourth Quarter 2010 Page 16