EX-99.2 3 supp_q212.htm SUPPLEMENTARY FINANCIAL INFORMATION - SECOND QUARTER 2012 Supplementary Financial Information

EXHIBIT 99.2

 

 

BCE Inc. (1)
Consolidated Operational Data

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

   Q2
2012		     Q2
2011		       $ change     % change       YTD
2012		     YTD
2011		       $ change   % change  

Operating revenues

   4,923     4,955       (32 )   (0.6 %)     9,832     9,421       411   4.4 %

Operating costs (A)

   (2,820 )   (2,908 )     88     3.0 %     (5,736 )   (5,482 )     (254 ) (4.6 %)

Pension current service costs

   (62 )   (61 )     (1 )   (1.6 %)     (128 )   (120 )     (8 ) (6.7 %)

EBITDA (3)

   2,041     1,986       55     2.8 %     3,968     3,819       149   3.9 %

EBITDA margin (4)

  

41.5

 %  

40.1

 %          

1.4

  pts    

40.4

 %  

40.5

 %        

(0.1

 ) pts

Severance, acquisition and other costs

   (20 )   (219 )     199     90.9 %     (39 )   (280 )     241   86.1 %

Depreciation

   (664 )   (638 )     (26 )   (4.1 %)     (1,308 )   (1,249 )     (59 ) (4.7 %)

Amortization

   (178 )   (183 )     5     2.7 %     (359 )   (362 )     3   0.8 %

Finance costs

                                                    

Interest expense

   (206 )   (226 )     20     8.8 %     (410 )   (417 )     7   1.7 %

Interest on employee benefit obligations

   (242 )   (247 )     5     2.0 %     (485 )   (489 )     4   0.8 %

Expected return on pension plan assets

   268     259       9     3.5 %     535     513       22   4.3 %

Other income

   53     145       (92 )   (63.4 %)     33     123       (90 ) (73.2 %)

Earnings before income taxes

   1,052     877       175     20.0 %     1,935     1,658       277   16.7 %

Income taxes

   (173 )   (194 )     21     10.8 %     (380 )   (393 )     13   3.3 %

Net earnings

   879     683       196     28.7 %     1,555     1,265       290   22.9 %

Net earnings attributable to:

                                                    

Common shareholders

   773     590       183     31.0 %     1,347     1,093       254   23.2 %

Preferred shareholders

   34     31       3     9.7 %     69     60       9   15.0 %

Non-controlling interest

   72     62       10     16.1 %     139     112       27   24.1 %

Net earnings

   879     683       196     28.7 %     1,555     1,265       290   22.9 %

Net earnings per common share - basic

 $ 1.00   $ 0.76     $ 0.24     31.6 %   $ 1.74   $ 1.43     $ 0.31   21.7 %

Net earnings per common share - diluted

 $ 1.00   $ 0.76     $ 0.24     31.6 %   $ 1.74   $ 1.43     $ 0.31   21.7 %
                                                     

Dividends per common share

 $ 0.5425   $ 0.5175     $ 0.025     4.8 %   $ 1.0850   $ 1.0100     $ 0.075   7.4 %

Average number of common shares outstanding - basic (millions)

   773.7     776.6                     774.0     764.8              

Average number of common shares outstanding - diluted (millions)

   774.0     777.1                     774.4     765.3              

Number of common shares outstanding (millions)

   773.9     777.5                     773.9     777.5              
                                                     

Adjusted Net Earnings and EPS

                                                    

Net earnings attributable to common shareholders

   773     590       183     31.0 %     1,347     1,093       254   23.2 %

Severance, acquisition and other costs

   15     162       (147 )   (90.7 %)     29     202       (173 ) (85.6 %)

Net gains on investments

   -     (89 )     89     100.0 %     (8 )   (89 )     81   91.0 %

Adjusted net earnings attributable to common shareholders (3)

   788     663       125     18.9 %     1,368     1,206       162   13.4 %

Impact on net earnings per share

 $ 0.02   $ 0.10     $ (0.08 )   (80.0 %)   $ 0.03   $ 0.15     $ (0.12 ) (80.0 %)

Adjusted EPS (3)

 $ 1.02   $ 0.86     $ 0.16     18.6 %   $ 1.77   $ 1.58     $ 0.19   12.0 %
                                                     

 

(A)

Excludes pension current service costs
n.m. : not meaningful

 

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 2

BCE Inc.
Consolidated Operational Data - Historical Trend

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

   YTD
2012		     Q2 12     Q1 12       Total
2011		       Q4 11     Q3 11     Q2 11     Q1 11  

Operating revenues

   9,832     4,923     4,909       19,497       5,166     4,910     4,955     4,466  

Operating costs (A)

   (5,736 )   (2,820 )   (2,916 )     (11,627 )     (3,238 )   (2,907 )   (2,908 )   (2,574 )

Pension current service costs

   (128 )   (62 )   (66 )     (241 )     (59 )   (62 )   (61 )   (59 )

EBITDA

   3,968     2,041     1,927       7,629       1,869     1,941     1,986     1,833  

EBITDA margin

  

40.4

 %  

41.5

 %  

39.3

 %    

39.1

 %    

36.2

 %  

39.5

 %  

40.1

 %  

41.0

 %

Severance, acquisition and other costs

   (39 )   (20 )   (19 )     (409 )     1     (130 )   (219 )   (61 )

Depreciation

   (1,308 )   (664 )   (644 )     (2,538 )     (661 )   (628 )   (638 )   (611 )

Amortization

   (359 )   (178 )   (181 )     (723 )     (181 )   (180 )   (183 )   (179 )

Finance costs

                                                    

Interest expense

   (410 )   (206 )   (204 )     (842 )     (215 )   (210 )   (226 )   (191 )

Interest on employee benefit obligations

   (485 )   (242 )   (243 )     (984 )     (248 )   (247 )   (247 )   (242 )

Expected return on pension plan assets

   535     268     267       1,032       260     259     259     254  

Other income (expense)

   33     53     (20 )     129       (5 )   11     145     (22 )

Earnings before income taxes

   1,935     1,052     883       3,294       820     816     877     781  

Income taxes

   (380 )   (173 )   (207 )     (720 )     (247 )   (80 )   (194 )   (199 )

Net earnings

   1,555     879     676       2,574       573     736     683     582  

Net earnings attributable to:

                                                    

Common shareholders

   1,347     773     574       2,221       486     642     590     503  

Preferred shareholders

   69     34     35       119       26     33     31     29  

Non-controlling interest

   139     72     67       234       61     61     62     50  

Net earnings

   1,555     879     676       2,574       573     736     683     582  

Net earnings per common share - basic

 $ 1.74   $ 1.00   $ 0.74     $ 2.88     $ 0.62   $ 0.83   $ 0.76   $ 0.67  

Net earnings per common share - diluted

 $ 1.74   $ 1.00   $ 0.74     $ 2.88     $ 0.62   $ 0.83   $ 0.76   $ 0.67  

Dividends per common share

 $ 1.0850   $ 0.5425   $ 0.5425     $ 2.0450     $ 0.5175   $ 0.5175   $ 0.5175   $ 0.4925  

Average number of common shares outstanding - basic (millions)

   774.0     773.7     774.3       771.4       778.1     777.6     776.6     752.9  

Average number of common shares outstanding - diluted (millions)

   774.4     774.0     774.7       771.8       778.7     778.2     777.1     753.5  

Number of common shares outstanding (millions)

   773.9     773.9     773.6       775.4       775.4     778.0     777.5     754.1  
                                                     

Adjusted Net Earnings and EPS

                                                    

Net earnings attributable to common shareholders

   1,347     773     574       2,221       486     642     590     503  

Severance, acquisition and other costs

   29     15     14       282       (2 )   82     162     40  

Net gains on investments

   (8 )   -     (8 )     (89 )     -     -     (89 )   -  

Adjusted net earnings attributable to common shareholders

   1,368     788     580       2,414       484     724     663     543  

Impact on net earnings per share

 $ 0.03   $ 0.02   $ 0.01     $ 0.25     $ -   $ 0.10   $ 0.10   $ 0.05  

Adjusted EPS

 $ 1.77   $ 1.02   $ 0.75     $ 3.13     $ 0.62   $ 0.93   $ 0.86   $ 0.72  

 

(A)

Excludes pension current service costs

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 3

BCE Inc.
Segmented Data (2)

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

 Q2
2012		   Q2
2011		     $ change   % change     YTD
2012		     YTD
2011		     $ change   % change  
                                         

Revenues

                                        

Bell Wireline

 2,528   2,630     (102 ) (3.9 %)   5,107     5,302     (195 ) (3.7 %)

Bell Wireless

 1,361   1,276     85   6.7 %   2,681     2,527     154   6.1 %

Bell Media

 534   529     5   0.9 %   1,046     529     517   97.7 %

Inter-segment eliminations

 (83 ) (73 )   (10 ) (13.7 %)   (161 )   (114 )   (47 ) (41.2 %)

Total Bell

 4,340   4,362     (22 ) (0.5 %)   8,673     8,244     429   5.2 %

Bell Aliant

 687   692     (5 ) (0.7 %)   1,369     1,374     (5 ) (0.4 %)

Inter-segment eliminations

 (104 ) (99 )   (5 ) (5.1 %)   (210 )   (197 )   (13 ) (6.6 %)

Total BCE Inc.

 4,923   4,955     (32 ) (0.6 %)   9,832     9,421     411   4.4 %
                                         

Operating costs

                                        

Bell Wireline

 (1,520 ) (1,559 )   39   2.5 %   (3,096 )   (3,187 )   91   2.9 %

Bell Wireless

 (805 ) (816 )   11   1.3 %   (1,604 )   (1,606 )   2   0.1 %

Bell Media

 (382 ) (406 )   24   5.9 %   (813 )   (406 )   (407 ) n.m.  

Inter-segment eliminations

 83   73     10   13.7 %   161     114     47   41.2 %

Total Bell

 (2,624 ) (2,708 )   84   3.1 %   (5,352 )   (5,085 )   (267 ) (5.3 %)

Bell Aliant

 (362 ) (360 )   (2 ) (0.6 %)   (722 )   (714 )   (8 ) (1.1 %)

Inter-segment eliminations

 104   99     5   5.1 %   210     197     13   6.6 %

Total BCE Inc.

 (2,882 ) (2,969 )   87   2.9 %   (5,864 )   (5,602 )   (262 ) (4.7 %)
                                         

EBITDA

                                        

Bell Wireline

 1,008   1,071     (63 ) (5.9 %)   2,011     2,115     (104 ) (4.9 %)

Margin

39.9

 %

40.7

 %      

(0.8

 ) pts  

39.4

 %  

39.9

 %      

(0.5

 ) pts

Bell Wireless

 556   460     96   20.9 %   1,077     921     156   16.9 %

Margin

40.9

 %

36.1

 %      

4.8

  pts  

40.2

 %  

36.4

 %      

3.8

  pts

Bell Media

 152   123     29   23.6 %   233     123     110   89.4 %

Margin

28.5

 %

23.3

 %      

5.2

  pts  

22.3

 %  

23.3

 %      

(1.0

 ) pts

Total Bell

 1,716   1,654     62   3.7 %   3,321     3,159     162   5.1 %

Margin

39.5

 %

37.9

 %      

1.6

  pts  

38.3

 %  

38.3

 %      

0.0

  pts

Bell Aliant

 325   332     (7 ) (2.1 %)   647     660     (13 ) (2.0 %)

Margin

47.3

 %

48.0

 %      

(0.7

 ) pts  

47.3

 %  

48.0

 %      

(0.7

 ) pts

Total BCE Inc.

 2,041   1,986     55   2.8 %   3,968     3,819     149   3.9 %

Margin

41.5

 %

40.1

 %      

1.4

  pts  

40.4

 %  

40.5

 %      

(0.1

 ) pts
                                         

Capital expenditures

                                        

Bell Wireline

 586   450     (136 ) (30.2 %)   1,118     852     (266 ) (31.2 %)

Capital Intensity (5)

23.2

 %

17.1

 %      

(6.1

 ) pts  

21.9

 %  

16.1

 %      

(5.8

 ) pts

Bell Wireless

 172   168     (4 ) (2.4 %)   308     281     (27 ) (9.6 %)

Capital Intensity

12.6

 %

13.2

 %      

0.6

  pts  

11.5

 %  

11.1

 %      

(0.4

 ) pts

Bell Media

 18   27     9   33.3 %   30     27     (3 ) (11.1 %)

Capital Intensity

3.4

 %

5.1

 %      

1.7

  pts  

2.9

 %  

5.1

 %      

2.2

  pts

Total Bell

 776   645     (131 ) (20.3 %)   1,456     1,160     (296 ) (25.5 %)

Capital Intensity

17.9

 %

14.8

 %      

(3.1

 ) pts  

16.8

 %  

14.1

 %      

(2.7

 ) pts

Bell Aliant

 176   155     (21 ) (13.5 %)   313     274     (39 ) (14.2 %)

Capital Intensity

25.6

 %

22.4

 %      

(3.2

 ) pts  

22.9

 %  

19.9

 %      

(3.0

 ) pts

Total BCE Inc.

 952   800     (152 ) (19.0 %)   1,769     1,434     (335 ) (23.4 %)

Capital Intensity

19.3

 %

16.1

 %      

(3.2

 ) pts  

18.0

 %  

15.2

 %      

(2.8

 ) pts

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 4

BCE Inc.
Segmented Data - Historical Trend

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

 YTD
2012		     Q2 12   Q1 12     Total
2011		     Q4 11   Q3 11   Q2 11   Q1 11  

 

                                      

Revenues

                                      

Bell Wireline

 5,107     2,528   2,579     10,621     2,709   2,610   2,630   2,672  

Bell Wireless

 2,681     1,361   1,320     5,231     1,365   1,339   1,276   1,251  

Bell Media

 1,046     534   512     1,542     578   435   529   -  

Inter-segment eliminations

 (161 )   (83 ) (78 )   (261 )   (76 ) (71 ) (73 ) (41 )

Total Bell

 8,673     4,340   4,333     17,133     4,576   4,313   4,362   3,882  

Bell Aliant

 1,369     687   682     2,775     701   700   692   682  

Inter-segment eliminations

 (210 )   (104 ) (106 )   (411 )   (111 ) (103 ) (99 ) (98 )

Total BCE Inc.

 9,832     4,923   4,909     19,497     5,166   4,910   4,955   4,466  

 

                                      

Operating costs

                                      

Bell Wireline

 (3,096 )   (1,520 ) (1,576 )   (6,466 )   (1,712 ) (1,567 ) (1,559 ) (1,628 )

Bell Wireless

 (1,604 )   (805 ) (799 )   (3,408 )   (944 ) (858 ) (816 ) (790 )

Bell Media

 (813 )   (382 ) (431 )   (1,208 )   (448 ) (354 ) (406 ) -  

Inter-segment eliminations

 161     83   78     261     76   71   73   41  

Total Bell

 (5,352 )   (2,624 ) (2,728 )   (10,821 )   (3,028 ) (2,708 ) (2,708 ) (2,377 )

Bell Aliant

 (722 )   (362 ) (360 )   (1,458 )   (380 ) (364 ) (360 ) (354 )

Inter-segment eliminations

 210     104   106     411     111   103   99   98  

Total BCE Inc.

 (5,864 )   (2,882 ) (2,982 )   (11,868 )   (3,297 ) (2,969 ) (2,969 ) (2,633 )

 

                                      

EBITDA

                                      

Bell Wireline

 2,011     1,008   1,003     4,155     997   1,043   1,071   1,044  

Margin

39.4

 %  

39.9

 %

38.9

 %  

39.1

 %  

36.8

 %

40.0

 %

40.7

 %

39.1

 %

Bell Wireless

 1,077     556   521     1,823     421   481   460   461  

Margin

40.2

 %  

40.9

 %

39.5

 %  

34.8

 %  

30.8

 %

35.9

 %

36.1

 %

36.9

 %

Bell Media

 233     152   81     334     130   81   123   -  

Margin

22.3

 %  

28.5

 %

15.8

 %  

21.7

 %  

22.5

 %

18.6

 %

23.3

 %

n.m.

  

Total Bell

 3,321     1,716   1,605     6,312     1,548   1,605   1,654   1,505  

Margin

38.3

 %  

39.5

 %

37.0

 %  

36.8

 %  

33.8

 %

37.2

 %

37.9

 %

38.8

 %

Bell Aliant

 647     325   322     1,317     321   336   332   328  

Margin

47.3

 %  

47.3

 %

47.2

 %  

47.5

 %  

45.8

 %

48.0

 %

48.0

 %

48.1

 %

Total BCE Inc.

 3,968     2,041   1,927     7,629     1,869   1,941   1,986   1,833  

Margin

40.4

 %  

41.5

 %

39.3

 %  

39.1

 %  

36.2

 %

39.5

 %

40.1

 %

41.0

 %

 

                                      

Capital expenditures

                                      

Bell Wireline

 1,118     586   532     1,973     647   474   450   402  

Capital Intensity

21.9

 %  

23.2

 %

20.6

 %  

18.6

 %  

23.9

 %

18.2

 %

17.1

 %

15.0

 %

Bell Wireless

 308     172   136     619     188   150   168   113  

Capital Intensity

11.5

 %  

12.6

 %

10.3

 %  

11.8

 %  

13.8

 %

11.2

 %

13.2

 %

9.0

 %

Bell Media

 30     18   12     91     36   28   27   -  

Capital Intensity

2.9

 %  

3.4

 %

2.3

 %  

5.9

 %  

6.2

 %

6.4

 %

5.1

 %

n.m.

  

Total Bell

 1,456     776   680     2,683     871   652   645   515  

Capital Intensity

16.8

 %  

17.9

 %

15.7

 %  

15.7

 %  

19.0

 %

15.1

 %

14.8

 %

13.3

 %

Bell Aliant

 313     176   137     573     137   162   155   119  

Capital Intensity

22.9

 %  

25.6

 %

20.1

 %  

20.6

 %  

19.5

 %

23.1

 %

22.4

 %

17.4

 %

Total BCE Inc.

 1,769     952   817     3,256     1,008   814   800   634  

Capital Intensity

18.0

 %  

19.3

 %

16.6

 %  

16.7

 %  

19.5

 %

16.6

 %

16.1

 %

14.2

 %

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 5

Bell Wireline (2)

 

Q2   Q2           YTD   YTD        

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

 2012   2011     % change     2012   2011     % change  

Bell Wireline

                              

Local & access

 665   726     (8.4 %)   1,343   1,455     (7.7 %)

Long distance

 206   227     (9.3 %)   418   461     (9.3 %)

Data (A)

 1,395   1,393     0.1 %   2,813   2,808     0.2 %

Equipment & other

 185   208     (11.1 %)   377   427     (11.7 %)

Total external revenues

 2,451   2,554     (4.0 %)   4,951   5,151     (3.9 %)

Inter-segment revenues

 77   76     1.3 %   156   151     3.3 %

Total Bell Wireline operating revenues

 2,528   2,630     (3.9 %)   5,107   5,302     (3.7 %)

Operating costs

 (1,520 ) (1,559 )   2.5 %   (3,096 ) (3,187 )   2.9 %

EBITDA

 1,008   1,071     (5.9 %)   2,011   2,115     (4.9 %)

EBITDA Margin

39.9

 %

40.7

 %  

(0.8

 ) pts  

39.4

 %

39.9

 %  

(0.5

 ) pts
                               

Capital expenditures

 586   450     (30.2 %)   1,118   852     (31.2 %)

Capital Intensity

23.2

 %

17.1

 %  

(6.1

 ) pts  

21.9

 %

16.1

 %  

(5.8

 ) pts

Local

                              

Network access services (NAS)

                              

Residential

 3,119,575   3,461,121     (9.9 %)   3,119,575   3,461,121     (9.9 %)

Business

 2,766,006   2,854,844     (3.1 %)   2,766,006   2,854,844     (3.1 %)

Total

 5,885,581   6,315,965     (6.8 %)   5,885,581   6,315,965     (6.8 %)

Network access service net (losses)/activations

                              

Residential

 (85,427 ) (83,479 )   (2.3 %)   (156,546 ) (147,766 )   (5.9 %)

Business

 (34,118 ) (17,018 )   n.m.     (59,529 ) (11,974 )   n.m.  

Total

 (119,545 ) (100,497 )   (19.0 %)   (216,075 ) (159,740 )   (35.3 %)

Internet

                              

High Speed Internet net (losses) activations

 (664 ) 1,275     n.m.     11,729   14,436     (18.8 %)

High Speed Internet subscribers EOP (B)

 2,103,528   2,111,762     (0.4 %)   2,103,528   2,111,762     (0.4 %)

TV

                              

Net subscriber activations (C)

 16,758   6,292     n.m.     34,381   14,350     n.m.  

Total subscribers EOP (C) (D)

 2,128,433   2,049,708     3.8 %   2,128,433   2,049,708     3.8 %

 

(A)

Starting in Q1 2012, we have included TV service revenues in data revenues to align with the reporting practices of our peers. As a result, we have restated prior period results within Bell Wireline. Our previously reported Wireline segment and consolidated results did not change as a result of this restatement.
(B)

At the beginning of 2012, our high-speed Internet subscriber base was reduced by 20,953 customers to reflect the decommissioning of our WiMax network and our decision to shut down our cable TV business in Montréal in 2012.
(C)

Our TV customer base was increased by 15,260 customers to include the cable operations of Northwestel at the beginning of Q1 2011.
(D)

At the beginning of 2012, our TV subscriber base was reduced by 9,527 customers following our decision to shut down our cable TV business in Montréal in 2012.

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 6

Bell Wireline - Historical Trend

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

 YTD
2012		     Q2 12   Q1 12     Total
2011		     Q4 11   Q3 11   Q2 11   Q1 11  

Bell Wireline

                                      

Local & access

 1,343     665   678     2,852     687   710   726   729  

Long distance

 418     206   212     903     219   223   227   234  

Data (A)

 2,813     1,395   1,418     5,642     1,450   1,384   1,393   1,415  

Equipment & other

 377     185   192     911     272   212   208   219  

Total external revenues

 4,951     2,451   2,500     10,308     2,628   2,529   2,554   2,597  

Inter-segment revenues

 156     77   79     313     81   81   76   75  

Total Bell Wireline operating revenues

 5,107     2,528   2,579     10,621     2,709   2,610   2,630   2,672  

Operating costs

 (3,096 )   (1,520 ) (1,576 )   (6,466 )   (1,712 ) (1,567 ) (1,559 ) (1,628 )

EBITDA

 2,011     1,008   1,003     4,155     997   1,043   1,071   1,044  

EBITDA Margin

39.4

 %  

39.9

 %

38.9

 %  

39.1

 %  

36.8

 %

40.0

 %

40.7

 %

39.1

 %

 

                                      

Capital expenditures

 1,118     586   532     1,973     647   474   450   402  

Capital Intensity

21.9

 %  

23.2

 %

20.6

 %  

18.6

 %  

23.9

 %

18.2

 %

17.1

 %

15.0

 %

Local

                                      

Network access services (NAS)

                                      

Residential

 3,119,575     3,119,575   3,205,002     3,276,121     3,276,121   3,365,854   3,461,121   3,544,600  

Business

 2,766,006     2,766,006   2,800,124     2,825,535     2,825,535   2,839,482   2,854,844   2,871,862  

Total

 5,885,581     5,885,581   6,005,126     6,101,656     6,101,656   6,205,336   6,315,965   6,416,462  

Network access service net (losses)/activations

                                      

Residential

 (156,546 )   (85,427 ) (71,119 )   (332,766 )   (89,733 ) (95,267 ) (83,479 ) (64,287 )

Business

 (59,529 )   (34,118 ) (25,411 )   (41,283 )   (13,947 ) (15,362 ) (17,018 ) 5,044  

Total

 (216,075 )   (119,545 ) (96,530 )   (374,049 )   (103,680 ) (110,629 ) (100,497 ) (59,243 )

Internet

                                      

High Speed Internet net activations (losses)

 11,729     (664 ) 12,393     15,426     1,091   (101 ) 1,275   13,161  

High Speed Internet subscribers EOP (B)

 2,103,528     2,103,528   2,104,192     2,112,752     2,112,752   2,111,661   2,111,762   2,110,487  

TV

                                      

Net subscriber activations (C)

 34,381     16,758   17,623     68,221     27,702   26,169   6,292   8,058  

Total subscribers EOP (C) (D)

 2,128,433     2,128,433   2,111,675     2,103,579     2,103,579   2,075,877   2,049,708   2,043,416  

 

(A)

Starting in Q1 2012, we have included TV service revenues in data revenues to align with the reporting practices of our peers. As a result, we have restated prior period results within Bell Wireline. Our previously reported Wireline segment and consolidated results did not change as a result of this restatement.
(B) At the beginning of 2012, our high-speed Internet subscriber base was reduced by 20,953 customers to reflect the decommissioning of our WiMax network and our decision to shut down our cable TV business in Montréal in 2012.
(C)

Our TV customer base was increased by 15,260 customers to include the cable operations of Northwestel at the beginning of Q1 2011.
(D)

At the beginning of 2012, our TV subscriber base was reduced by 9,527 customers following our decision to shut down our cable TV business in Montréal in 2012.

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 7

 

Bell Wireless(2)

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

 Q2
2012		   Q2
2011		     % change     YTD
2012		   YTD
2011		     % change  

Bell Wireless

                              

Revenue

                              

Service

 1,248   1,174     6.3 %   2,462   2,319     6.2 %

Product

 99   92     7.6 %   193   191     1.0 %

Total external Bell Wireless revenues

 1,347   1,266     6.4 %   2,655   2,510     5.8 %

Inter-segment

 14   10     40.0 %   26   17     52.9 %

Total Bell Wireless operating revenues

 1,361   1,276     6.7 %   2,681   2,527     6.1 %

Operating costs

 (805 ) (816 )   1.3 %   (1,604 ) (1,606 )   0.1 %

EBITDA

 556   460     20.9 %   1,077   921     16.9 %

EBITDA margin (Total revenues)

40.9

 %

36.1

 %  

4.8

  pts  

40.2

 %

36.4

 %  

3.8

  pts

EBITDA margin (Service revenues)

44.6

 %

39.2

 %  

5.4

  pts  

43.7

 %

39.7

 %  

4.0

  pts
                               

Capital expenditures

 172   168     (2.4 %)   308   281     (9.6 %)

Capital intensity

12.6

 %

13.2

 %  

0.6

  pts  

11.5

 %

11.1

 %  

(0.4

 ) pts

Wireless gross activations

 428,265   474,900     (9.8 %)   816,411   898,699     (9.2 %)

Postpaid

 327,335   341,645     (4.2 %)   620,907   641,302     (3.2 %)

Wireless net activations

 47,208   36,507     29.3 %   25,881   41,799     (38.1 %)

Postpaid

 102,067   94,309     8.2 %   164,643   174,957     (5.9 %)

Wireless subscribers EOP

 7,453,363   7,283,847     2.3 %   7,453,363   7,283,847     2.3 %

Postpaid

 6,139,809   5,716,326     7.4 %   6,139,809   5,716,326     7.4 %

Average revenue per unit (ARPU)($/month) (6)

 55.37   52.99     4.5 %   54.60   52.34     4.3 %

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

 1.7 % 2.0 %  

0.3

  pts   1.8 % 2.0 %  

0.2

  pts

Prepaid

 3.7 % 3.7 %  

0.0

  pts   3.8 % 3.7 %  

(0.1

 ) pts

Postpaid

 1.3 % 1.5 %  

0.2

  pts   1.3 % 1.5 %  

0.2

  pts

Usage per subscriber (min/month)

 303   282     7.4 %   294   271     8.5 %

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

 381   400     4.8 %   389   384     (1.3 %)
                               

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 8

Bell Wireless - Historical Trend

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

 YTD
2012		     Q2 12   Q1 12     Total
2011		     Q4 11   Q3 11   Q2 11   Q1 11  

Bell Wireless

                                      

Revenue

                                      

Service

 2,462     1,248   1,214     4,769     1,222   1,228   1,174   1,145  

Product

 193     99   94     422     129   102   92   99  

Total external Bell Wireless revenues

 2,655     1,347   1,308     5,191     1,351   1,330   1,266   1,244  

Inter-segment

 26     14   12     40     14   9   10   7  

Total Bell Wireless operating revenues

 2,681     1,361   1,320     5,231     1,365   1,339   1,276   1,251  

Operating costs

 (1,604 )   (805 ) (799 )   (3,408 )   (944 ) (858 ) (816 ) (790 )

EBITDA

 1,077     556   521     1,823     421   481   460   461  

EBITDA margin (Total revenues)

40.2

 %  

40.9

 %

39.5

 %  

34.8

 %  

30.8

 %

35.9

 %

36.1

 %

36.9

 %

EBITDA margin (Service revenues)

43.7

 %  

44.6

 %

42.9

 %  

38.2

 %  

34.5

 %

39.2

 %

39.2

 %

40.3

 %
                                       

Capital expenditures

 308     172   136     619     188   150   168   113  

Capital intensity

11.5

 %  

12.6

 %

10.3

 %  

11.8

 %  

13.8

 %

11.2

 %

13.2

 %

9.0

 %

Wireless gross activations

 816,411     428,265   388,146     1,936,396     511,917   525,780   474,900   423,799  

Postpaid

 620,907     327,335   293,572     1,402,965     389,317   372,346   341,645   299,657  

Wireless net activations

 25,881     47,208   (21,327 )   185,434     57,886   85,749   36,507   5,292  

Postpaid

 164,643     102,067   62,576     433,797     131,986   126,854   94,309   80,648  

Wireless subscribers EOP

 7,453,363     7,453,363   7,406,155     7,427,482     7,427,482   7,369,596   7,283,847   7,247,340  

Postpaid

 6,139,809     6,139,809   6,037,742     5,975,166     5,975,166   5,843,180   5,716,326   5,622,017  

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

 54.60     55.37   53.84     53.55     54.50   55.01   52.99   51.68  

Churn (%)(average per month)

 1.8 %   1.7 % 1.8 %   2.0 %   2.1 % 2.0 % 2.0 % 1.9 %

Prepaid

 3.8 %   3.7 % 3.9 %   3.9 %   4.2 % 3.9 % 3.7 % 3.7 %

Postpaid

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

Usage per subscriber (min/month)

 294     303   285     283     299   291   282   256  

Cost of acquisition (COA)($/sub)

 389     381   399     403     450   392   400   366  

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 9

BCE Inc.
Net debt and other information

BCE Inc. - Net debt and preferreds

            

At June 30, 2012

     BCE Inc.      

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

            

 

    Bell      

 

Bell   Aliant   BCE Inc.  

Debt due within one year

 1,179   347   1,526  

Long-term debt

 11,440   2,655   14,095  

Preferred shares - BCE (A)

 1,698   -   1,698  

Cash and cash equivalents

 (769 ) (19 ) (788 )

Net debt

 13,548   2,983   16,531  

 

Bell - Net debt and preferreds

            

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

            

 

June 30   March 31   Dec. 31  

 

2012   2012   2011  
             

Debt due within one year

 1,179   1,980   1,724  

Long-term debt

 11,440   10,030   10,070  

Preferred shares - BCE (A)

 1,698   1,698   1,558  

Cash and cash equivalents

 (769 ) (369 ) (140 )

Net Debt

 13,548   13,339   13,212  
             

Net Debt / Adjusted EBITDA (B)

 2.0   2.0   2.0  

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

 9.1   9.0   9.1  

 

Bell Media Inc. - Proportionate Information

                                

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

 YTD
2012		   Q2 2012   Q1 2012     Total
2011		     Q4 2011   Q3 2011   Q2 2011  
                                 

Proportionate Net Debt

 211   211   188     230     230   220   275  

Proportionate EBITDA

 192   128   64     278     113   62   103  
                                 

 

Cash Flow Information

                                      

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

 Q2
2012		   Q2
2011		     $ change   % change     YTD
2012		   YTD
2011		     $ change   % change  

Free Cash Flow (FCF)

                                      

Cash from operating activities, excluding acquisition costs paid

 1,593   1,065     528   49.6 %   2,598   1,802     796   44.2 %

Capital expenditures

 (776 ) (645 )   (131 ) (20.3 %)   (1,456 ) (1,160 )   (296 ) (25.5 %)

Dividends paid on preferred shares

 (34 ) (28 )   (6 ) (21.4 %)   (67 ) (56 )   (11 ) (19.6 %)

Dividends/distributions paid by subsidiaries to non-controlling interest

 (26 ) (12 )   (14 ) n.m.     (39 ) (12 )   (27 ) n.m.  

Bell Aliant distributions to BCE

 47   47     -   0.0 %   95   118     (23 ) (19.5 %)

FCF

 804   427     377   88.3 %   1,131   692     439   63.4 %
                                       
                                       

 

Cash Flow Information - Historical Trend

                                      

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

 YTD
2012		     Q2
2012		   Q1
2012		     Total
2011		     Q4
2011		   Q3
2011		   Q2
2011		   Q1
2011		  

Free Cash Flow (FCF)

                                      

Cash from operating activities, excluding acquisition costs paid

 2,598     1,593   1,005     4,129     676   1,651   1,065   737  

Capital expenditures

 (1,456 )   (776 ) (680 )   (2,683 )   (871 ) (652 ) (645 ) (515 )

Dividends paid on preferred shares

 (67 )   (34 ) (33 )   (118 )   (31 ) (31 ) (28 ) (28 )

Dividends/distributions paid by subsidiaries to non-controlling interest

 (39 )   (26 ) (13 )   (31 )   (8 ) (11 ) (12 ) -  

Bell Aliant distributions to BCE

 95     47   48     214     48   48   47   71  

FCF

 1,131     804   327     1,511     (186 ) 1,005   427   265  
                                       

 

(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 – Second Quarter 2012 Page 10

BCE Inc.
Consolidated Statements of Financial Position Data

 

  June 30     March 31     December 31  

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

   2012     2012     2011  

ASSETS

                  

Current assets

                  

Cash

   82     130     130  

Cash equivalents

   706     267     45  

Trade and other receivables

   2,699     2,821     3,119  

Current tax receivable

   68     38     43  

Inventory

   366     361     427  

Prepaid expenses

   409     397     262  

Other current assets

   137     128     152  

Total current assets

   4,467     4,142     4,178  

Non-current assets

                  

Property, plant and equipment

   19,792     18,897     18,785  

Intangible assets

   7,859     7,983     8,013  

Deferred tax assets

   309     314     329  

Investments in associates and joint ventures

   322     314     307  

Other non-current assets

   491     576     629  

Goodwill

   7,185     7,185     7,185  

Total non-current assets

   35,958     35,269     35,248  

Total assets

   40,425     39,411     39,426  

LIABILITIES

                  

Current liabilities

                  

Trade payables and other liabilities

   3,637     3,464     4,056  

Interest payable

   156     154     134  

Dividends payable

   433     432     415  

Current tax liabilities

   147     43     47  

Debt due within one year

   1,526     2,386     2,106  

Total current liabilities

   5,899     6,479     6,758  

Non-current liabilities

                  

Long-term debt

   14,095     12,682     12,721  

Deferred tax liabilities

   710     832     881  

Employee benefit obligation

   3,788     3,180     2,966  

Other non-current liabilities

   1,110     1,297     1,341  

Total non-current liabilities

   19,703     17,991     17,909  

Total liabilities

   25,602     24,470     24,667  
                   

EQUITY

                  

Equity attributable to BCE shareholders

                  

Preferred shares

   3,395     3,395     3,115  

Common shares

   13,549     13,540     13,566  

Shares subject to cancellation

   -     -     (50 )

Contributed surplus

   2,547     2,536     2,527  

Accumulated other comprehensive income (loss)

   8     (6 )   5  

Deficit

   (5,573 )   (5,472 )   (5,385 )

Equity attributable to BCE shareholders

   13,926     13,993     13,778  

Non-controlling interest

   897     948     981  

Total equity

   14,823     14,941     14,759  

Total liabilities and equity

   40,425     39,411     39,426  

Number of common shares outstanding

 

773.9

 

 

773.6

 

 

775.4

 

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 11

BCE Inc.
Consolidated Cash Flow Data

 

                                             

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

   Q2
2012		       Q2
2011		       $ change       YTD
2012		       YTD
2011		       $ change  

Net earnings

   879       683       196       1,555       1,265       290  

Adjustments to reconcile net earnings to cash flows from operating activities

                                              

Severance, acquisition and other costs

   20       219       (199 )     39       280       (241 )

Depreciation and amortization

   842       821       21       1,667       1,611       56  

Net employee benefit plans cost

   36       49       (13 )     78       96       (18 )

Net interest expense

   205       212       (7 )     408       401       7  

Gains on investments

   -       (89 )     89       (8 )     (89 )     81  

Income taxes

   173       194       (21 )     380       393       (13 )

Contributions to employee pension plans

   (89 )     (85 )     (4 )     (175 )     (439 )     264  

Payments under other employee future benefit plans

   (25 )     (27 )     2       (49 )     (51 )     2  

Severance and other costs paid

   (42 )     (59 )     17       (134 )     (306 )     172  

Acquisition costs paid

   (32 )     (31 )     (1 )     (57 )     (35 )     (22 )

Interest paid

   (197 )     (216 )     19       (377 )     (383 )     6  

Income taxes paid (net of refunds)

   (46 )     (25 )     (21 )     (150 )     (33 )     (117 )

Operating assets and liabilities

   178       (265 )     443       (77 )     (595 )     518  

Cash flows from operating activities

   1,902       1,381       521       3,100       2,115       985  

Bell Aliant dividends/distributions paid to BCE

   47       47       -       95       118       (23 )

Capital expenditures

   (952 )     (800 )     (152 )     (1,769 )     (1,434 )     (335 )

Cash dividends paid on preferred shares

   (34 )     (28 )     (6 )     (67 )     (56 )     (11 )

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

   (91 )     (77 )     (14 )     (170 )     (168 )     (2 )

Acquisition costs paid

   32       31       1       57       35       22  

Bell Aliant Free Cash Flow

   (100 )     (127 )     27       (115 )     82       (197 )

Free Cash Flow (3)

   804       427       377       1,131       692       439  

Bell Aliant free cash flow, excluding dividends/distributions paid

   53       80       (27 )     20       (200 )     220  

Business acquisitions

   -       (680 )     680       (2 )     (680 )     678  

Acquisition costs paid

   (32 )     (31 )     (1 )     (57 )     (35 )     (22 )

Business dispositions

   -       -       -       -       2       (2 )

Increase in investments

   (1 )     (2 )     1       (2 )     (4 )     2  

Decrease in investments

   1       45       (44 )     11       48       (37 )

Other investing activities

   4       (1 )     5       5       3       2  

Decrease in notes payable and bank advances

   (387 )     (656 )     269       (121 )     (130 )     9  

Reduction in securitized trade receivables

   (13 )     (348 )     335       (25 )     (350 )     325  

Issue of long-term debt

   1,011       1,301       (290 )     1,022       2,303       (1,281 )

Repayment of long-term debt

   (633 )     (1,739 )     1,106       (718 )     (1,815 )     1,097  

Cash dividends paid on common shares

   (420 )     (371 )     (49 )     (823 )     (715 )     (108 )

Issue of common shares

   8       51       (43 )     26       100       (74 )

Repurchase of common shares

   -       -       -       (107 )     -       (107 )

Issue of preferred shares

   -       -       -       280       -       280  

Issue of equity securities by subsidiaries to non-controlling interest

   1       -       1       2       288       (286 )

Other financing activities

   (5 )     28       (33 )     (29 )     (2 )     (27 )

 

  (413 )     (2,323 )     1,910       (518 )     (1,187 )     669  

Net increase (decrease) in cash and cash equivalents

   391       (1,896 )     2,287       613       (495 )     1,108  

Cash and cash equivalents at beginning of period

   397       2,172       (1,775 )     175       771       (596 )

Cash and cash equivalents at end of period

   788       276       512       788       276       512  
                                               

Other information

                                              

Cash flow per share (9)

 $ 1.23     $ 0.76     $ 0.47    

$

 1.72     $ 0.89     $ 0.83  

Annualized cash flow yield (10)

   6.0 %     3.3 %     (2.7 ) pts     6.0 %     3.3 %     (2.7 ) pts
                                               

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 12

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

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

   YTD
2012		       Q2 12       Q1 12       Total
2011		       Q4 11       Q3 11       Q2 11       Q1 11  

Net earnings

   1,555       879       676       2,574       573       736       683       582  

Adjustments to reconcile net earnings to cash flows from operating activities

                                                              

Severance, acquisition and other costs

   39       20       19       409       (1 )     130       219       61  

Depreciation and amortization

   1,667       842       825       3,261       842       808       821       790  

Net employee benefit plans cost

   78       36       42       193       47       50       49       47  

Net interest expense

   408       205       203       821       213       207       212       189  

Gains on investments

   (8 )     -       (8 )     (89 )     -       -       (89 )     -  

Income taxes

   380       173       207       720       247       80       194       199  

Contributions to employee pension plans

   (175 )     (89 )     (86 )     (1,491 )     (961 )     (91 )     (85 )     (354 )

Payments under other employee future benefit plans

   (49 )     (25 )     (24 )     (102 )     (26 )     (25 )     (27 )     (24 )

Severance and other costs paid

   (134 )     (42 )     (92 )     (411 )     (68 )     (37 )     (59 )     (247 )

Acquisition costs paid

   (57 )     (32 )     (25 )     (70 )     (28 )     (7 )     (31 )     (4 )

Interest paid

   (377 )     (197 )     (180 )     (795 )     (234 )     (178 )     (216 )     (167 )

Income taxes paid (net of refunds)

   (150 )     (46 )     (104 )     (130 )     (73 )     (24 )     (25 )     (8 )

Operating assets and liabilities

   (77 )     178       (255 )     (21 )     307       267       (265 )     (330 )

Cash flows from operating activities

   3,100       1,902       1,198       4,869       838       1,916       1,381       734  

Bell Aliant dividends/distributions paid to BCE

   95       47       48       214       48       48       47       71  

Capital expenditures

   (1,769 )     (952 )     (817 )     (3,256 )     (1,008 )     (814 )     (800 )     (634 )

Cash dividends paid on preferred shares

   (67 )     (34 )     (33 )     (118 )     (31 )     (31 )     (28 )     (28 )

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

   (170 )     (91 )     (79 )     (315 )     (72 )     (75 )     (77 )     (91 )

Acquisition costs paid

   57       32       25       70       28       7       31       4  

Bell Aliant Free Cash Flow

   (115 )     (100 )     (15 )     47       11       (46 )     (127 )     209  

Free Cash Flow

   1,131       804       327       1,511       (186 )     1,005       427       265  

Bell Aliant free cash flow, excluding dividends/distributions paid

   20       53       (33 )     (261 )     (59 )     (2 )     80       (280 )

Business acquisitions

   (2 )     -       (2 )     (680 )     -       -       (680 )     -  

Acquisition costs paid

   (57 )     (32 )     (25 )     (70 )     (28 )     (7 )     (31 )     (4 )

Business dispositions

   -       -       -       2       -       -       -       2  

Increase in investments

   (2 )     (1 )     (1 )     (12 )     (6 )     (2 )     (2 )     (2 )

Decrease in investments

   11       1       10       56       6       2       45       3  

Other investing activities

   5       4       1       6       2       1       (1 )     4  

(Decrease) increase in notes payable and bank advances

   (121 )     (387 )     266       30       54       106       (656 )     526  

(Reduction) increase in securitized trade receivables

   (25 )     (13 )     (12 )     (318 )     32       -       (348 )     (2 )

Issue of long-term debt

   1,022       1,011       11       2,314       8       3       1,301       1,002  

Repayment of long-term debt

   (718 )     (633 )     (85 )     (2,350 )     (342 )     (193 )     (1,739 )     (76 )

Cash dividends paid on common shares

   (823 )     (420 )     (403 )     (1,520 )     (403 )     (402 )     (371 )     (344 )

Issue of common shares

   26       8       18       152       37       15       51       49  

Repurchase of common shares

   (107 )     -       (107 )     (143 )     (143 )     -       -       -  

Issue of preferred shares

   280       -       280       345       -       345       -       -  

Issue of equity securities by subsidiaries to non-controlling interest

   2       1       1       403       115       -       -       288  

Other financing activities

   (29 )     (5 )     (24 )     (61 )     (16 )     (43 )     28       (30 )

 

  (518 )     (413 )     (105 )     (2,107 )     (743 )     (177 )     (2,323 )     1,136  

Net increase (decrease) in cash and cash equivalents

   613       391       222       (596 )     (929 )     828       (1,896 )     1,401  

Cash and cash equivalents at beginning of period

   175       397       175       771       1,104       276       2,172       771  

Cash and cash equivalents at end of period

   788       788       397       175       175       1,104       276       2,172  
                                                               

Other information

                                                              

Cash flow per share

 $ 1.72    

$

 1.23    

$

 0.49     $ 2.09      $ (0.23 )  

$

 1.43    

$

 0.76    

  $

 0.13  

Annualized cash flow yield

   6.0 %     6.0 %     5.1 %     4.6 %     4.6 %     3.8 %     3.3 %     4.3 %

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 13

 

Accompanying Notes

(1)

Throughout this report, BCE means BCE Inc., its subsidiaries, joint ventures and associates; Bell means our Bell Wireline, Bell Wireless and Bell Media segments on an aggregate basis; and Bell Aliant means Bell Aliant Inc. and its subsidiaries.
 
(2)

We report our results of operations in four segments: Bell Wireline, Bell Wireless, Bell Media and Bell Aliant. Our reporting structure reflects how we manage our business and how we classify our operations for planning and measuring performance.

Starting in the first quarter of 2012, we have included TV service revenues in data revenues to align with the reporting practices of our peers. As a result, we have restated prior period results within Bell Wireline. The previously reported Wireline segment and consolidated results did not change as a result of this restatement.

In the second quarter of 2011, BCE acquired the remaining 85% of CTV Inc. (CTV) common shares that it did not already own. CTV is a media company that holds specialty television, digital media, conventional TV and radio broadcasting assets. CTV is reported as a new segment, Bell Media. As at the acquisition date, we transferred certain assets from our wireline business segment to this new segment.
 
(3)

Non-GAAP Financial Measures

EBITDA

The term EBITDA does not have any standardized meaning according to IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other companies.

We define EBITDA as operating revenues less operating costs (including pension current service costs). We use EBITDA to evaluate the performance of our businesses as it reflects their ongoing profitability. 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. EBITDA also is one component in the determination of short-term incentive compensation for all management employees. EBITDA has no directly comparable IFRS financial measure. Alternatively, it may be reconciled to net earnings as shown in this document.

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. Therefore, they are 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. We define Adjusted EPS as Adjusted net earnings per BCE common share.

We use Adjusted net earnings and Adjusted EPS, among other measures, to assess the performance of our businesses without the effects of severance, acquisition and other costs, and net (gains) losses on investments, net of tax and 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 EPS.

 

BCE Inc. Supplementary Financial Information – Second Quarter 2012 Page 14

Accompanying Notes

 

Free Cash Flow

The term free cash flow does not have any standardized meaning according to IFRS. Therefore, it is 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 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.
 
(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.
 
(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 – Second Quarter 2012 Page 15