EX-99.2 3 supp_q111.htm SUPPLEMENTARY FINANCIAL INFORMATION Q1 2011 BCE Inc. Supplementary Financial Information – First Quarter 2011

EXHIBIT 99.2

 

 

 

BCE Inc. (1)
Consolidated Operational Data

 

  Q1       Q1              

($ millions of Canadian dollars, except per share amounts) (unaudited)

  2011       2010       $ change   % change  

Operating revenues

  4,466       4,433       33   0.7 %

Operating costs (A)

  (2,574 )     (2,627 )     53   2.0 %

Pension current service costs

  (59 )     (53 )     (6 ) (11.3 %)

EBITDA (3)

  1,833       1,753       80   4.6 %

EBITDA margin (5)

  41.0 %     39.5 %         1.5  pts

Depreciation

  (611 )     (586 )     (25 ) (4.3 %)

Amortization of intangible assets

  (179 )     (180 )     1   0.6 %

Severance, acquisition and other costs

  (61 )     (32 )     (29 ) (90.6 %)

Finance costs

                         

Interest expense

  (191 )     (172 )     (19 ) (11.0 %)

Interest on employee benefit obligations

  (242 )     (248 )     6   2.4 %

Interest on fund unit liability

  -       (92 )     92   100.0 %

Expected return on pension plan assets

  254       225       29   12.9 %

Other (expense) income

  (22 )     269       (291 ) n.m.  

Earnings before income taxes

  781       937       (156 ) (16.6 %)

Income taxes

  (199 )     (203 )     4   2.0 %

Net earnings

  582       734       (152 ) (20.7 %)

Net earnings attributable to:

                         

Common shareholders

  503       706       (203 ) (28.8 %)

Preferred shareholders

  29       29       -   -  

Non-controlling interest

  50       (1 )     51   n.m.  

Net earnings

  582       734       (152 ) (20.7 %)

Net earnings per common share - basic

$ 0.67     $ 0.92     $ (0.25 ) (27.2 %)

Net earnings per common share - diluted

$ 0.67     $ 0.92     $ (0.25 ) (27.2 %)

Dividends per common share

$ 0.493     $ 0.435     $ 0.058   13.3 %

Average number of common shares outstanding - basic (millions)

  752.9       765.7              

Average number of common shares outstanding - diluted (millions)

  753.5       766.0              

Number of common shares outstanding (millions)

  754.1       763.0              

Adjusted Net Earnings and EPS 		                         

Net earnings attributable to common shareholders

  503       706       (203 ) (28.7 %)

Severance, acquisition and other costs

  40       25       15   60.0 %

Net gains on investments

  -       (125 )     125   n.m.  

Fair value adjustment on fund unit liability

  -       (147 )     147   n.m.  

Adjustment to reflect interest on fund unit liability as non-controlling interest

  -       8       (8 ) n.m.  

Adjusted net earnings attributable to common shareholders

  543       467       76   16.3 %

Impact on net earnings per share

$ 0.05     $ (0.31 )   $ 0.36   n.m.  

Adjusted EPS (4)

$ 0.72     $ 0.61     $ 0.11   18.0 %
                           
 
(A) Excludes pension current service costs
n.m. : not meaningful

 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 2

BCE Inc.
Consolidated Operational Data - Historical Trend

 

          Total
2010 		                           

($ millions of Canadian dollars, except per share amounts) (unaudited)

  Q1 11             Q4 10     Q3 10     Q2 10     Q1 10  

Operating revenues

  4,466       18,069       4,679     4,517     4,440     4,433  

Operating costs (A)

  (2,574 )     (10,684 )     (2,882 )   (2,627 )   (2,548 )   (2,627 )

Pension current service costs

  (59 )     (200 )     (49 )   (49 )   (49 )   (53 )

EBITDA

  1,833       7,185       1,748     1,841     1,843     1,753  

EBITDA margin

  41.0 %     39.8 %     37.4 %   40.8 %   41.5 %   39.5 %

Depreciation

  (611 )     (2,388 )     (607 )   (600 )   (595 )   (586 )

Amortization of intangible assets

  (179 )     (737 )     (193 )   (181 )   (183 )   (180 )

Severance, acquisition and other costs

  (61 )     (262 )     (86 )   (129 )   (15 )   (32 )

Finance costs

                                       

Interest expense

  (191 )     (685 )     (174 )   (169 )   (170 )   (172 )

Interest on employee benefit obligations

  (242 )     (992 )     (248 )   (248 )   (248 )   (248 )

Interest on fund unit liability

  -       (370 )     (93 )   (92 )   (93 )   (92 )

Expected return on pension plan assets

  254       898       224     225     224     225  

Other (expense) income

  (22 )     173       (68 )   (67 )   39     269  

Earnings before income taxes

  781       2,822       503     580     802     937  

Income taxes

  (199 )     (632 )     (159 )   (98 )   (172 )   (203 )

Net earnings

  582       2,190       344     482     630     734  

Net earnings attributable to:

                                       

Common shareholders

  503       2,083       318     454     605     706  

Preferred shareholders

  29       112       29     27     27     29  

Non-controlling interest

  50       (5 )     (3 )   1     (2 )   (1 )

Net earnings

  582       2,190       344     482     630     734  

Net earnings per common share - basic

$ 0.67     $ 2.74     $ 0.42   $ 0.60   $ 0.80   $ 0.92  

Net earnings per common share - diluted

$ 0.67     $ 2.74     $ 0.42   $ 0.60   $ 0.80   $ 0.92  

Dividends per common share

$ 0.493     $ 1.78     $ 0.457   $ 0.457   $ 0.435   $ 0.435  

Average number of common shares outstanding - basic (millions)

  752.9       759.0       754.1     756.7     759.7     765.7  

Average number of common shares outstanding - diluted (millions)

  753.5       759.5       755.0     757.3     760.1     766.0  

Number of common shares outstanding (millions)

  754.1       752.3       752.3     755.6     759.1     763.0  

Adjusted Net Earnings and EPS 		                                       

Net earnings attributable to common shareholders

  503       2,083       318     454     605     706  

Severance, acquisition and other costs

  40       189       67     91     6     25  

Net gains on investments

  -       (133 )     -     -     (8 )   (125 )

Fair value adjustment on fund unit liability

  -       (49 )     58     56     (16 )   (147 )

Adjustment to reflect interest on fund unit liability as non-controlling interest

  -       29       3     10     8     8  

Adjusted net earnings attributable to common shareholders

  543       2,119       446     611     595     467  

Impact on net earnings per share

$ 0.05     $ 0.05     $ 0.17   $ 0.21   $ (0.02 ) $ (0.31 )

Adjusted EPS

$ 0.72     $ 2.79     $ 0.59   $ 0.81   $ 0.78   $ 0.61  
 
(A) Excludes pension current service costs

 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 3

BCE Inc.
Segmented Data (2)

 

Q1   Q1            

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

2011   2010     $ change   % change  

Revenues

                 

Bell Wireline

2,672   2,747     (75 ) (2.7 %)

Bell Wireless

1,251   1,146     105   9.2 %

Inter-segment eliminations

(41 ) (48 )   7   14.6 %

Total Bell

3,882   3,845     37   1.0 %

Bell Aliant

682   689     (7 ) (1.0 %)

Inter-segment eliminations

(98 ) (101 )   3   3.0 %

Total BCE Inc.

4,466   4,433     33   0.7 %

Operating costs

                 

Bell Wireline

(1,628 ) (1,743 )   115   6.6 %

Bell Wireless

(790 ) (735 )   (55 ) (7.5 %)

Inter-segment eliminations

41   48     (7 ) (14.6 %)

Total Bell

(2,377 ) (2,430 )   53   2.2 %

Bell Aliant

(354 ) (351 )   (3 ) (0.9 %)

Inter-segment eliminations

98   101     (3 ) (3.0 %)

Total BCE Inc.

(2,633 ) (2,680 )   47   1.8 %

EBITDA

                 

Bell Wireline

1,044   1,004     40   4.0 %

Margin

39.1 % 36.5 %       2.6  pts

Bell Wireless

461   411     50   12.2 %

Margin

36.9 % 35.9 %       1.0  pts

Total Bell

1,505   1,415     90   6.4 %

Margin

38.8 % 36.8 %       2.0  pts

Bell Aliant

328   338     (10 ) (3.0 %)

Margin

48.1 % 49.1 %       (1.0 ) pts

Total BCE Inc.

1,833   1,753     80   4.6 %

Margin

41.0 % 39.5 %       1.5  pts

Capital expenditures

                 

Bell Wireline

402   388     (14 ) (3.6 %)

Capital Intensity (6)

15.0 % 14.1 %       (0.9 ) pts

Bell Wireless

113   53     (60 ) n.m.  

Capital Intensity

9.0 % 4.6 %       (4.4 ) pts

Total Bell

515   441     (74 ) (16.8 %)

Capital Intensity

13.3 % 11.5 %       (1.8 ) pts

Bell Aliant

119   94     (25 ) (26.6 %)

Capital Intensity

17.4 % 13.6 %       (3.8 ) pts

Total BCE Inc.

634   535     (99 ) (18.5 %)

Capital Intensity

14.2 % 12.1 %       (2.1 ) pts
                   
 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 4

BCE Inc.
Segmented Data - Historical Trend

        Total
2010 		                   
($ millions of Canadian dollars, except where otherwise indicated) (unaudited) Q1 11         Q4 10   Q3 10   Q2 10   Q1 10  

Revenues

                           

Bell Wireline

2,672     10,948     2,822   2,694   2,685   2,747  

Bell Wireless

1,251     4,906     1,289   1,268   1,203   1,146  

Inter-segment eliminations

(41 )   (185 )   (46 ) (46 ) (45 ) (48 )

Total Bell

3,882     15,669     4,065   3,916   3,843   3,845  

Bell Aliant

682     2,808     716   703   700   689  

Inter-segment eliminations

(98 )   (408 )   (102 ) (102 ) (103 ) (101 )

Total BCE Inc.

4,466     18,069     4,679   4,517   4,440   4,433  

Operating costs

                           

Bell Wireline

(1,628 )   (6,854 )   (1,803 ) (1,668 ) (1,640 ) (1,743 )

Bell Wireless

(790 )   (3,188 )   (905 ) (801 ) (747 ) (735 )

Inter-segment eliminations

41     185     46   46   45   48  

Total Bell

(2,377 )   (9,857 )   (2,662 ) (2,423 ) (2,342 ) (2,430 )

Bell Aliant

(354 )   (1,435 )   (371 ) (355 ) (358 ) (351 )

Inter-segment eliminations

98     408     102   102   103   101  

Total BCE Inc.

(2,633 )   (10,884 )   (2,931 ) (2,676 ) (2,597 ) (2,680 )

EBITDA

                           

Bell Wireline

1,044     4,094     1,019   1,026   1,045   1,004  

Margin

39.1 %   37.4 %   36.1 % 38.1 % 38.9 % 36.5 %

Bell Wireless

461     1,718     384   467   456   411  

Margin

36.9 %   35.0 %   29.8 % 36.8 % 37.9 % 35.9 %

Total Bell

1,505     5,812     1,403   1,493   1,501   1,415  

Margin

38.8 %   37.1 %   34.5 % 38.1 % 39.1 % 36.8 %

Bell Aliant

328     1,373     345   348   342   338  

Margin

48.1 %   48.9 %   48.2 % 49.5 % 48.9 % 49.1 %

Total BCE Inc.

1,833     7,185     1,748   1,841   1,843   1,753  

Margin

41.0 %   39.8 %   37.4 % 40.8 % 41.5 % 39.5 %

Capital expenditures

                           

Bell Wireline

402     2,019     646   521   464   388  

Capital Intensity

15.0 %   18.4 %   22.9 % 19.3 % 17.3 % 14.1 %

Bell Wireless

113     485     225   123   84   53  

Capital Intensity

9.0 %   9.9 %   17.5 % 9.7 % 7.0 % 4.6 %

Total Bell

515     2,504     871   644   548   441  

Capital Intensity

13.3 %   16.0 %   21.4 % 16.4 % 14.3 % 11.5 %

Bell Aliant

119     494     163   113   124   94  

Capital Intensity

17.4 %   17.6 %   22.8 % 16.1 % 17.7 % 13.6 %

Total BCE Inc.

634     2,998     1,034   757   672   535  

Capital Intensity

14.2 %   16.6 %   22.1 % 16.8 % 15.1 % 12.1 %
                             
 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 5

Bell Wireline (2)

 

Q1   Q1        

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

2011   2010     % change  

Bell Wireline

             

Local & access

729   762     (4.3 %)

Long distance

234   236     (0.8 %)

Data

955   1,015     (5.9 %)

Video

460   428     7.5 %

Equipment & other

219   227     (3.5 %)

Total external revenues

2,597   2,668     (2.7 %)

Inter-segment revenues

75   79     (5.1 %)

Total Bell Wireline operating revenue

2,672   2,747     (2.7 %)

Operating costs

(1,628 ) (1,743 )   6.6 %

EBITDA

1,044   1,004     4.0 %

EBITDA Margin

39.1 % 36.5 %   2.6  pts
               
Capital expenditures 402   388     (3.6 %)

Capital intensity

15.0 % 14.1 %   (0.9 ) pts
               

Local

             

Network access services (NAS)

             

Residential

3,544,600   3,810,912     (7.0 %)

Business

2,871,862   2,950,281     (2.7 %)

Total

6,416,462   6,761,193     (5.1 %)

Network access service net (losses)/activations

             

Residential

(64,287 ) (75,618 )   15.0 %

Business

5,044   (24,211 )   n.m.  

Total

(59,243 ) (99,829 )   40.7 %

Internet

             

High Speed Internet net activations

13,161   10,467     25.7 %

High Speed Internet subscribers EOP

2,110,487   2,067,458     2.1 %

Video (DTH and VDSL)

             

Net subscriber activations

7,663   19,889     (61.5 %)

Total subscribers EOP

2,027,761   1,968,766     3.0 %

ARPU (7) ($/month)

75.76   72.60     4.4 %

Churn (8) (%) (average per month)

1.4 % 1.1 %   (0.3 ) pts
 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 6

Bell Wireline - Historical Trend

 

      Total
2010 		                   

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

Q1 11         Q4 10   Q3 10   Q2 10   Q1 10  

Bell Wireline

                           

Local & access

729     3,012     733   759   758   762  

Long distance

234     923     232   224   231   236  

Data

955     3,985     1,035   972   963   1,015  

Video

460     1,749     450   437   434   428  

Equipment & other

219     962     292   223   220   227  

Total external revenues

2,597     10,631     2,742   2,615   2,606   2,668  

Inter-segment revenues

75     317     80   79   79   79  

Total Bell Wireline operating revenue

2,672     10,948     2,822   2,694   2,685   2,747  

Operating costs

(1,628 )   (6,854 )   (1,803 ) (1,668 ) (1,640 ) (1,743 )

EBITDA

1,044     4,094     1,019   1,026   1,045   1,004  

EBITDA Margin

39.1 %   37.4 %   36.1 % 38.1 % 38.9 % 36.5 %
                             
Capital expenditures 402     2,019     646   521   464   388  

Capital intensity

15.0 %   18.4 %   22.9 % 19.3 % 17.3 % 14.1 %
                             

Local

                           

Network access services (NAS)

                           

Residential

3,544,600     3,608,887     3,608,887   3,645,437   3,713,920   3,810,912  

Business

2,871,862     2,866,818     2,866,818   2,894,440   2,918,126   2,950,281  

Total

6,416,462     6,475,705     6,475,705   6,539,877   6,632,046   6,761,193  

Network access service net (losses)/activations

                           

Residential

(64,287 )   (277,643 )   (36,550 ) (68,483 ) (96,992 ) (75,618 )

Business

5,044     (107,674 )   (27,622 ) (23,686 ) (32,155 ) (24,211 )

Total

(59,243 )   (385,317 )   (64,172 ) (92,169 ) (129,147 ) (99,829 )

Internet

                           

High Speed Internet net activations

13,161     40,335     12,099   21,668   (3,899 ) 10,467  

High Speed Internet subscribers EOP

2,110,487     2,097,326     2,097,326   2,085,227   2,063,559   2,067,458  

Video (DTH and VDSL)

                           

Net subscriber activations

7,663     71,221     23,019   18,538   9,775   19,889  

Total subscribers EOP

2,027,761     2,020,098     2,020,098   1,997,079   1,978,541   1,968,766  

ARPU ($/month)

75.76     73.49     74.79   73.34   73.43   72.60  

Churn (%) (average per month)

1.4 %   1.4 %   1.5 % 1.6 % 1.3 % 1.1 %
 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 7

Bell Wireless (2)

 

Q1     Q1        

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

2011     2010     % change  

Bell Wireless

               

Revenue

               

Service

1,145     1,053     8.7 %

Product

99     86     15.1 %

Total external Bell Wireless revenues

1,244     1,139     9.2 %

Inter-segment

7     7     -  

Total Bell Wireless operating revenues

1,251     1,146     9.2 %

Operating costs

(790 )   (735 )   (7.5 %)

EBITDA

461     411     12.2 %

EBITDA margin (Total revenues)

36.9 %   35.9 %   1.0  pts

EBITDA margin (Service revenues)

40.3 %   39.0 %   1.3  pts
                 

Capital expenditures

113     53     n.m.  

Capital intensity

9.0 %   4.6 %   (4.4 ) pts
                 

Wireless gross activations

423,799     428,834     (1.2 %)

Postpaid

299,657     264,312     13.4 %

Wireless net activations

5,292     55,625     (90.5 %)

Postpaid

80,648     81,212     (0.7 %)

Wireless subscribers EOP

7,247,340     6,888,927     5.2 %

Postpaid

5,622,017     5,122,442     9.8 %

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

51.68     50.07     3.2 %

Prepaid

15.36     16.87     (9.0 %)

Postpaid

62.51     61.72     1.3 %

Churn (%) (average per month)

1.9 %   1.8 %   (0.1 ) pts

Prepaid

3.7 %   3.4 %   (0.3 ) pts

Postpaid

1.4 %   1.2 %   (0.2 ) pts

Usage per subscriber (min/month)

256     259     (1.2 %)

Cost of acquisition (COA) (9) ($/sub) (A)

366     321     (14.0 %)
 
(A)

In Q1 2011, we changed our methodology for calculating Wireless COA to better align with Canadian industry practice. All prior periods have been restated for comparability.

 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 8

Bell Wireless - Historical Trend

 

      Total
2010 		                   

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

Q1 11         Q4 10   Q3 10   Q2 10   Q1 10  

Bell Wireless

                           
                             

Revenue

                           

Service

1,145     4,469     1,148   1,157   1,111   1,053  

Product

99     407     134   103   84   86  

Total external Bell Wireless revenues

1,244     4,876     1,282   1,260   1,195   1,139  

Inter-segment

7     30     7   8   8   7  

Total Bell Wireless operating revenues

1,251     4,906     1,289   1,268   1,203   1,146  

Operating costs

(790 )   (3,188 )   (905 ) (801 ) (747 ) (735 )

EBITDA

461     1,718     384   467   456   411  

EBITDA margin (Total revenues)

36.9 %   35.0 %   29.8 % 36.8 % 37.9 % 35.9 %

EBITDA margin (Service revenues)

40.3 %   38.4 %   33.4 % 40.4 % 41.0 % 39.0 %
                             

Capital expenditures

113     485     225   123   84   53  

Capital intensity

9.0 %   9.9 %   17.5 % 9.7 % 7.0 % 4.6 %
                             

Wireless gross activations

423,799     1,999,482     552,714   537,295   480,639   428,834  

Postpaid

299,657     1,332,086     399,041   368,154   300,579   264,312  

Wireless net activations

5,292     408,746     116,782   137,880   98,459   55,625  

Postpaid

80,648     500,139     156,708   159,465   102,754   81,212  

Wireless subscribers EOP

7,247,340     7,242,048     7,242,048   7,125,266   6,987,386   6,888,927  

Postpaid

5,622,017     5,541,369     5,541,369   5,384,661   5,225,196   5,122,442  

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

51.68     52.03     52.34   53.54   52.12   50.07  

Prepaid

15.36     17.76     16.96   18.85   18.35   16.87  

Postpaid

62.51     63.49     63.47   65.04   63.66   61.72  

Churn (%)(average per month)

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

Prepaid

3.7 %   3.5 %   3.6 % 3.4 % 3.4 % 3.4 %

Postpaid

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

Usage per subscriber (min/month)

256     274     277   280   284   259  

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

366     358     411   355   335   321  
 
(A)

In Q1 2011, we changed our methodology for calculating Wireless COA to better align with Canadian industry practice. All prior periods have been restated for comparability.

 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 9

     BCE Inc.
Net debt and other information

BCE Inc. - Net debt and preferreds

           

 

            

At March 31, 2011

    BCE Inc.      

(unaudited)

           

($ millions of Canadian dollars, except where otherwise indicated)

           

 

    Bell      

 

Bell   Aliant   BCE Inc.  

Debt due within one year

2,279   770   3,049  

Long-term debt

9,189   2,367   11,556  

Preferred shares - BCE (A)

1,385   -   1,385  

Cash and cash equivalents

(2,147 ) (25 ) (2,172 )

Net debt

10,706   3,112   13,818  

Bell - Net debt and preferreds

       

(unaudited)

       

($ millions of Canadian dollars, except where otherwise indicated)

March 31   Dec. 31  

 

2011   2010  

Debt due within one year

2,279   1,766  

Long-term debt

9,189   8,221  

Preferred shares - BCE (A)

1,385   1,385  

Cash and cash equivalents

(2,147 ) (749 )

Net Debt

10,706   10,623  
         

Net Debt / Adjusted EBITDA (B)

1.73   1.74  

Adjusted EBITDA (B) / Net interest, excluding interest on employee benefit obligations and interest expense on fund unit liability and including 50% of preferred dividends

10.46   10.67  

Cash Flow Information

               

(unaudited)

Q1   Q1          

($ millions of Canadian dollars, except where otherwise indicated)

2011   2010   $ change   % change  
                 

Free Cash Flow (FCF)

               

Cash from operating activities, excluding acquisition costs paid

745   956   (211 ) (22.1 %)

Capital expenditures

(515 ) (441 ) (74 ) (16.8 %)

Dividends paid on preferred shares

(28 ) (28 ) -   -  

Bell Aliant distributions to BCE

63   73   (10 ) (13.7 %)

FCF

265   560   (295 ) (52.7 %)
                 

Cash Flow Information - Historical Trend

                           

(unaudited)

Q1     Total     Q4   Q3   Q2   Q1  

($ millions of Canadian dollars, except where otherwise indicated)

2011     2010     2010   2010   2010   2010  
                             

Free Cash Flow (FCF)

                           

Cash from operating activities, excluding acquisition costs paid

745     3,758     295   1,402   1,105   956  

Capital expenditures

(515 )   (2,504 )   (871 ) (644 ) (548 ) (441 )

Dividends paid on preferred shares

(28 )   (108 )   (28 ) (25 ) (27 ) (28 )

Bell Aliant distributions to BCE

63     291     73   73   72   73  

FCF

265     1,437     (531 ) 806   602   560  
                             
 
(A)

Net debt includes 50% of preferred shares.
(B)

Adjusted EBITDA is defined as EBITDA including dividends / distributions from Bell Aliant to BCE and is based on trailling 12 months data.

 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 10

BCE Inc.
Consolidated Statements of Financial Position Data

 

March 31     December 31  

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

2011     2010  

ASSETS

         

Current assets

         

Cash

2,069     129  

Cash equivalents

103     642  

Trade and other receivables

2,580     2,885  

Current tax receivable

97     139  

Inventory

424     431  

Prepaid expenses

450     224  

Other current assets

106     205  

Total current assets

5,829     4,655  

Non-current assets

         

Property, plant and equipment

17,582     17,775  

Intangible assets

6,288     6,201  

Deferred tax assets

437     501  

Investments in associates and joint ventures

313     303  

Other non-current assets

669     652  

Goodwill

5,806     5,806  

Total non-current assets

31,095     31,238  

Total assets

36,924     35,893  

LIABILITIES

         

Current liabilities

         

Trade and other payables

3,232     3,815  

Interest payable

135     143  

Dividends payable

383     356  

Current tax liabilities

78     37  

Other current liabilities

51     33  

Debt due within one year

3,049     2,570  

Total current liabilities

6,928     6,954  

Non-current liabilities

         

Long-term debt

11,556     10,581  

Fund unit liability

-     3,060  

Deferred tax liabilities

579     526  

Employee benefit obligation

2,786     3,302  

Other non-current liabilities

1,280     1,302  

Total non-current liabilities

16,201     18,771  

Total liabilities

23,129     25,725  
           

Equity

         

Equity attributable to owners

         

Preferred shares

2,770     2,770  

Common shares

12,745     12,691  

Contributed surplus

2,536     2,579  

Accumulated other comprehensive income

48     66  

Deficit

(4,970 )   (7,952 )

Total equity attributable to owners

13,129     10,154  

Non-controlling interest

666     14  

Total equity

13,795     10,168  

Total liabilities and equity

36,924     35,893  

Number of common shares outstanding

754.1     752.3  

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 11

BCE Inc.
Consolidated Cash Flow Data

 

  Q1       Q1          

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

  2011       2010       $ change  

Net earnings

  582       734       (152 )

Adjustments to reconcile net earnings to cash flows from operating activities

                     

Depreciation and amortization of intangible assets

  790       766       24  

Net employee benefit plans cost

  47       76       (29 )

Severance, acquisition and other costs

  61       32       29  

Net interest expense

  189       262       (73 )

Gains on investments

  -       (125 )     125  

Income taxes

  199       203       (4 )

Contributions to employee pension plans

  (354 )     (155 )     (199 )

Payments under other employee future benefit plans

  (24 )     (24 )     -  

Severance and other costs paid

  (247 )     (94 )     (153 )

Acquisition costs paid

  (4 )     (4 )     -  

Interest paid

  (167 )     (250 )     83  

Income taxes paid (net of refunds)

  (8 )     (24 )     16  

Operating assets and liabilities

  (330 )     (393 )     63  

Cash flows from operating activities

  734       1,004       (270 )

Bell Aliant dividends/distributions paid to BCE

  63       73       (10 )

Capital expenditures

  (634 )     (535 )     (99 )

Cash dividends paid on preferred shares

  (28 )     (28 )     -  

Cash dividends/distributions paid by subsidiaries to non-controlling interest

  (91 )     -       (91 )

Acquisition costs paid

  4       4       -  

Bell Aliant Free Cash Flow

  217       42       175  

Free Cash Flow (4)

  265       560       (295 )

Bell Aliant free cash flow, excluding dividends/distributions paid

  (280 )     (115 )     (165 )

Business acquisitions, net of cash acquired

  -       9       (9 )

Acquisition costs paid

  (4 )     (4 )     -  

Business dispositions

  2       -       2  

Increase in investments

  (2 )     (8 )     6  

Decrease in investments

  3       10       (7 )

Other investing activities

  4       3       1  

Increase in notes payable and bank advances

  526       108       418  

Sale of trade receivables

  (2 )     -       (2 )

Issue of long-term debt

  1,002       -       1,002  

Repayment of long-term debt

  (76 )     (56 )     (20 )

Cash dividends paid on common shares

  (344 )     (310 )     (34 )

Issue of common shares

  49       1       48  

Repurchase of common shares

  -       (125 )     125  

Issue of equity securities by subsidiaries to non-controlling interest

  288       -       288  

Other financing activities

  (30 )     (11 )     (19 )

 

  1,136       (498 )     1,634  

Net increase in cash and cash equivalents

  1,401       62       1,339  

Cash and cash equivalents at beginning of period

  771       684       87  

Cash and cash equivalents at end of period

  2,172       746       1,426  
                       

Other information

                     

Cash flow per share (10)

$ 0.13     $ 0.73     $ (0.60 )

Annualized cash flow yield (11)

  4.3 %     7.7 %     (3.4 ) pts

 

                      

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 12

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

 

          Total
2010 		                                 

($ millions of Canadian dollars, except where otherwise indicated) (unaudited)

  Q1 11             Q4 10       Q3 10       Q2 10       Q1 10  

Net earnings

  582       2,190       344       482       630       734  

Adjustments to reconcile net earnings to cash flows from operating activities

                                             

Depreciation and amortization of intangible assets

  790       3,125       800       781       778       766  

Net employee benefit plans cost

  47       294       73       72       73       76  

Severance, acquisition and other costs

  61       262       86       129       15       32  

Net interest expense

  189       1,049       265       260       262       262  

Gains on investments

  -       (135 )     -       -       (10 )     (125 )

Income taxes

  199       632       159       98       172       203  

Contributions to employee pension plans

  (354 )     (1,315 )     (901 )     (115 )     (144 )     (155 )

Payments under other employee future benefit plans

  (24 )     (98 )     (25 )     (25 )     (24 )     (24 )

Severance and other costs paid

  (247 )     (238 )     (60 )     (35 )     (49 )     (94 )

Acquisition costs paid

  (4 )     (24 )     (12 )     (6 )     (2 )     (4 )

Interest paid

  (167 )     (1,092 )     (292 )     (245 )     (305 )     (250 )

Income taxes paid (net of refunds)

  (8 )     (129 )     (54 )     (15 )     (36 )     (24 )

Operating assets and liabilities

  (330 )     (154 )     108       170       (39 )     (393 )

Cash flows from operating activities

  734       4,367       491       1,551       1,321       1,004  

Bell Aliant dividends/distributions paid to BCE

  63       291       73       73       72       73  

Capital expenditures

  (634 )     (2,998 )     (1,034 )     (757 )     (672 )     (535 )

Cash dividends paid on preferred shares

  (28 )     (108 )     (28 )     (25 )     (27 )     (28 )

Cash dividends/distributions paid by subsidiaries to non-controlling interest

  (91 )     -       -       -       -       -  

Acquisition costs paid

  4       24       12       6       2       4  

Bell Aliant Free Cash Flow

  217       (139 )     (45 )     (42 )     (94 )     42  

Free Cash Flow

  265       1,437       (531 )     806       602       560  

Bell Aliant free cash flow, excluding dividends/distributions paid

  (280 )     (152 )     (28 )     (31 )     22       (115 )

Business acquisitions, net of cash acquired

  -       (60 )     (73 )     -       4       9  

Acquisition costs paid

  (4 )     (24 )     (12 )     (6 )     (2 )     (4 )

Business dispositions

  2       8       -       -       8       -  

Increase in investments

  (2 )     (44 )     (4 )     (7 )     (25 )     (8 )

Decrease in investments

  3       139       -       6       123       10  

Other investing activities

  4       7       1       -       3       3  

Increase (decrease) in notes payable and bank advances

  526       250       104       47       (9 )     108  

Sale of trade receivables

  (2 )     (37 )     (22 )     4       (19 )     -  

Issue of long-term debt

  1,002       1,366       1,016       350       -       -  

Repayment of long-term debt

  (76 )     (956 )     (321 )     (404 )     (175 )     (56 )

Cash dividends paid on common shares

  (344 )     (1,318 )     (346 )     (329 )     (333 )     (310 )

Issue of common shares

  49       39       11       15       12       1  

Repurchase of common shares

  -       (500 )     (125 )     (125 )     (125 )     (125 )

Issue of equity securities by subsidiaries to non-controlling interest

  288       -       -       -       -       -  

Other financing activities

  (30 )     (68 )     (80 )     (67 )     90       (11 )

 

  1,136       (1,350 )     121       (547 )     (426 )     (498 )

Net increase (decrease) in cash and cash equivalents

  1,401       87       (410 )     259       176       62  

Cash and cash equivalents at beginning of period

  771       684       1,181       922       746       684  

Cash and cash equivalents at end of period

  2,172       771       771       1,181       922       746  
                                               

Other information

                                             

Cash flow per share

$ 0.13     $ 2.29     $ (0.59 )   $ 1.17     $ 0.98     $ 0.73  

Annualized cash flow yield

  4.3 %     5.4 %     5.4 %     7.8 %     7.7 %     7.7 %

BCE Inc. Supplementary Financial Information – First Quarter 2011  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 Inc. 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.

In the first quarter of 2011, Bell acquired xwave, a division of Bell Aliant, specializing in IT professional services and advanced technology solutions. As a result, we have restated prior period results for Bell Wireline and Bell Aliant to reflect the change of ownership in xwave between Bell and Bell Aliant. Our reportable segments and consolidated results did not change as a result of this restatement.
 
(3)

EBITDA

We define EBITDA as operating revenues less operating costs, as shown in the consolidated income statements. We use EBITDA to evaluate the performance of our businesses as it reflects their ongoing profitability. EBITDA also is used as a component in the determination of short-term incentive compensation for all management employees. EBITDA is referred to as an additional GAAP measure because it is displayed on the face of our income statements.
 
(4)

Non-GAAP Financial Measures

Adjusted net earnings and Adjusted earnings per share (EPS)
The terms Adjusted net earnings and Adjusted EPS do not have any standardized meaning according to IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies.

We define Adjusted net earnings as net earnings attributable to common shareholders before severance, acquisition and other costs, and net gains/losses on investments. For 2010, Adjusted net earnings also excludes the fair value adjustments on the fund unit liability and adjusts earnings to reflect the interest on the fund unit liability as non-controlling interest. We define Adjusted EPS as Adjusted net earnings per BCE Inc. common share.

We use Adjusted net earnings and Adjusted EPS, among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax and non-controlling interest severance, acquisition and other costs, and net gains/losses on investments. For 2010, we also exclude the effects of the fair value adjustments on the fund unit liability and we adjust earnings to reflect the interest on the fund unit liability as non-controlling interest. 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 IFRS financial measures are net earnings attributable to common shareholders and earnings per share.

Free Cash Flow
The term free cash flow does not have any standardized meaning according to IFRS. It is therefore unlikely to be comparable to similar measures presented by other companies.

We define free cash flow as cash flows from operating activities, excluding acquisition costs paid, and dividends/distributions received from Bell Aliant less capital expenditures, preferred share dividends, dividends/distributions paid by subsidiaries to non-controlling interest 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 reinvest in our company. We present free cash flow consistently from period to period, which allows us to compare our

 

 

BCE Inc. Supplementary Financial Information – First Quarter 2011  Page 14

 

 

financial performance on a consistent basis.

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

The most comparable IFRS financial measure is cash from operating activities.
 
(5)

EBITDA margin is calculated as follows:

EBITDA
Operating revenues
 
(6)

Capital Intensity is calculated as follows:

Capital expenditures
Operating revenues
 
(7)

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.
 
(8)

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.
 
(9)

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.
 
(10)

Cash flow per share is calculated as follows:

Cash flow from operating activities less capital expenditures
Average number of common shares outstanding
 
(11)

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 – First Quarter 2011  Page 15