EX-99.2 3 supp_q412.htm SUPPLEMENTARY FINANCIAL INFORMATION - FOURTH QUARTER 2012 Supplementary Financial Information

EXHIBIT 99.2

 

BCE Inc. (1)
Consolidated Operational Data

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

   Q4
2012		     Q4
2011		       $ change   % change       Total
2012		       Total
2011		         $ change   % change  

Operating revenues

   5,161     5,166       (5 ) (0.1 %)     19,975       19,497         478   2.5 %

Operating costs (A)

   (3,205 )   (3,238 )     33   1.0 %     (11,867 )     (11,627 )       (240 ) (2.1 %)

Employee benefit plans service cost

   (60 )   (59 )     (1 ) (1.7 %)     (225 )     (241 )       16   6.6 %

EBITDA (3)

   1,896     1,869       27   1.4 %     7,883       7,629         254   3.3 %

EBITDA margin (4)

  

36.7

 %  

36.2

 %        

0.5

  pts    

39.5

 %    

39.1

 %          

0.4

  pts

Severance, acquisition and other costs

   (70 )   1       (71 ) n.m.       (133 )     (409 )       276   67.5 %

Depreciation

   (692 )   (661 )     (31 ) (4.7 %)     (2,674 )     (2,538 )       (136 ) (5.4 %)

Amortization

   (175 )   (181 )     6   3.3 %     (714 )     (723 )       9   1.2 %

Finance costs

                                                      

Interest expense

   (223 )   (218 )     (5 ) (2.3 %)     (865 )     (853 )       (12 ) (1.4 %)

Interest on employee benefit obligations

   (239 )   (245 )     6   2.4 %     (958 )     (973 )       15   1.5 %

Expected return on employee benefit plan assets

   267     260       7   2.7 %     1,069       1,032         37   3.6 %

Other income (expense)

   242     (5 )     247   n.m.       270       129         141   n.m.  

Earnings before income taxes

   1,006     820       186   22.7 %     3,878       3,294         584   17.7 %

Income taxes

   (197 )   (247 )     50   20.2 %     (825 )     (720 )       (105 ) (14.6 %)

Net earnings

   809     573       236   41.2 %     3,053       2,574         479   18.6 %

Net earnings attributable to:

                                                      

Common shareholders

   708     486       222   45.7 %     2,624       2,221         403   18.1 %

Preferred shareholders

   34     26       8   30.8 %     139       119         20   16.8 %

Non-controlling interest

   67     61       6   9.8 %     290       234         56   23.9 %

Net earnings

   809     573       236   41.2 %     3,053       2,574         479   18.6 %

Net earnings per common share - basic

 $ 0.91   $ 0.62     $ 0.29   46.8 %   $ 3.39     $ 2.88     $   0.51   17.7 %

Net earnings per common share - diluted

 $ 0.91   $ 0.62     $ 0.29   46.8 %   $ 3.39     $ 2.88     $   0.51   17.7 %
                                                       

Dividends per common share

 $ 0.5675   $ 0.5175     $ 0.050   9.7 %   $ 2.2200     $ 2.0450     $   0.175   8.6 %
                                                       

Average number of common shares outstanding - basic (millions)

   775.0     778.1                   774.3       771.4                

Average number of common shares outstanding - diluted (millions)

   775.4     778.7                   774.6       771.8                

Number of common shares outstanding (millions)

   775.4     775.4                   775.4       775.4                
                                                       

Adjusted Net Earnings and EPS

                                                      

Net earnings attributable to common shareholders

   708     486       222   45.7 %     2,624       2,221         403   18.1 %

Severance, acquisition and other costs

   46     (2 )     48   n.m.       94       282         (188 ) (66.7 %)

Net gains on investments

   (248 )   -       (248 ) n.m.       (256 )     (89 )       (167 ) n.m.  

Adjusted net earnings attributable to common
shareholders (3)

   506     484       22   4.5 %     2,462       2,414         48   2.0 %

Impact on net earnings per share

 $ (0.26 ) $ -     $ (0.26 ) n.m.     $ (0.21 )   $ 0.25     $   (0.46 ) n.m.  

Adjusted EPS (3)

 $ 0.65   $ 0.62     $ 0.03   4.8 %   $ 3.18     $ 3.13     $   0.05   1.6 %
                                                       

 

(A)

Excludes employee benefit plans service cost
n.m. : not meaningful

 

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

 

BCE Inc.
Consolidated Operational Data - Historical Trend

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

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

Operating revenues

   19,975       5,161     4,982     4,923     4,909       19,497       5,166     4,910     4,955     4,466  

Operating costs (A)

   (11,867 )     (3,205 )   (2,926 )   (2,820 )   (2,916 )     (11,627 )     (3,238 )   (2,907 )   (2,908 )   (2,574 )

Employee benefit plans service cost

   (225 )     (60 )   (37 )   (62 )   (66 )     (241 )     (59 )   (62 )   (61 )   (59 )

EBITDA

   7,883       1,896     2,019     2,041     1,927       7,629       1,869     1,941     1,986     1,833  

EBITDA margin

  

39.5

 %    

36.7

 %  

40.5

 %  

41.5

 %  

39.3

 %    

39.1

 %    

36.2

 %  

39.5

 %  

40.1

 %  

41.0

 %

Severance, acquisition and other costs

   (133 )     (70 )   (24 )   (20 )   (19 )     (409 )     1     (130 )   (219 )   (61 )

Depreciation

   (2,674 )     (692 )   (674 )   (664 )   (644 )     (2,538 )     (661 )   (628 )   (638 )   (611 )

Amortization

   (714 )     (175 )   (180 )   (178 )   (181 )     (723 )     (181 )   (180 )   (183 )   (179 )

Finance costs

                                                                  

Interest expense

   (865 )     (223 )   (226 )   (209 )   (207 )     (853 )     (218 )   (213 )   (228 )   (194 )

Interest on employee benefit obligations

   (958 )     (239 )   (240 )   (239 )   (240 )     (973 )     (245 )   (244 )   (245 )   (239 )

Expected return on employee benefit plan assets

   1,069       267     267     268     267       1,032       260     259     259     254  

Other income (expense)

   270       242     (5 )   53     (20 )     129       (5 )   11     145     (22 )

Earnings before income taxes

   3,878       1,006     937     1,052     883       3,294       820     816     877     781  

Income taxes

   (825 )     (197 )   (248 )   (173 )   (207 )     (720 )     (247 )   (80 )   (194 )   (199 )

Net earnings

   3,053       809     689     879     676       2,574       573     736     683     582  

Net earnings attributable to:

                                                                  

Common shareholders

   2,624       708     569     773     574       2,221       486     642     590     503  

Preferred shareholders

   139       34     36     34     35       119       26     33     31     29  

Non-controlling interest

   290       67     84     72     67       234       61     61     62     50  

Net earnings

   3,053       809     689     879     676       2,574       573     736     683     582  

Net earnings per common share - basic

 $ 3.39     $ 0.91   $ 0.74   $ 1.00   $ 0.74     $ 2.88     $ 0.62   $ 0.83   $ 0.76   $ 0.67  

Net earnings per common share - diluted

 $ 3.39     $ 0.91   $ 0.74   $ 1.00   $ 0.74     $ 2.88     $ 0.62   $ 0.83   $ 0.76   $ 0.67  
                                                                   

Dividends per common share

 $ 2.2200     $ 0.5675   $ 0.5675   $ 0.5425   $ 0.5425     $ 2.0450     $ 0.5175   $ 0.5175   $ 0.5175   $ 0.4925  
                                                                   

Average number of common shares outstanding - basic (millions)

   774.3       775.0     774.2     773.7     774.3       771.4       778.1     777.6     776.6     752.9  

Average number of common shares outstanding - diluted (millions)

   774.6       775.4     774.8     774.0     774.7       771.8       778.7     778.2     777.1     753.5  

Number of common shares outstanding (millions)

   775.4       775.4     774.6     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

   2,624       708     569     773     574       2,221       486     642     590     503  

Severance, acquisition and other costs

   94       46     19     15     14       282       (2 )   82     162     40  

Net gains on investments

   (256 )     (248 )   -     -     (8 )     (89 )     -     -     (89 )   -  

Adjusted net earnings attributable to common shareholders

   2,462       506     588     788     580       2,414       484     724     663     543  

Impact on net earnings per share

 $ (0.21 )   $ (0.26 ) $ 0.02   $ 0.02   $ 0.01     $ 0.25     $ -   $ 0.10   $ 0.10   $ 0.05  
                                                                   

Adjusted EPS

 $ 3.18     $ 0.65   $ 0.76   $ 1.02   $ 0.75     $ 3.13     $ 0.62   $ 0.93   $ 0.86   $ 0.72  

 

(A)

Excludes employee benefit plans service cost

 

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

 

BCE Inc.
Segmented Data (2)

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

 Q4
2012		   Q4
2011		     $ change   % change     Total
2012		   Total
2011		     $ change   % change  
                                       

Revenues

                                      

Bell Wireline

 2,608   2,709     (101 ) (3.7 %)   10,220   10,621     (401 ) (3.8 %)

Bell Wireless

 1,458   1,365     93   6.8 %   5,573   5,231     342   6.5 %

Bell Media

 591   578     13   2.2 %   2,183   1,542     641   41.6 %

Inter-segment eliminations

 (80 ) (76 )   (4 ) (5.3 %)   (334 ) (261 )   (73 ) (28.0 %)

Total Bell

 4,577   4,576     1   0.0 %   17,642   17,133     509   3.0 %

Bell Aliant

 694   701     (7 ) (1.0 %)   2,761   2,775     (14 ) (0.5 %)

Inter-segment eliminations

 (110 ) (111 )   1   0.9 %   (428 ) (411 )   (17 ) (4.1 %)

Total BCE Inc.

 5,161   5,166     (5 ) (0.1 %)   19,975   19,497     478   2.5 %
                                       

Operating costs

                                      

Bell Wireline

 (1,677 ) (1,712 )   35   2.0 %   (6,300 ) (6,466 )   166   2.6 %

Bell Wireless

 (979 ) (944 )   (35 ) (3.7 %)   (3,463 ) (3,408 )   (55 ) (1.6 %)

Bell Media

 (419 ) (448 )   29   6.5 %   (1,622 ) (1,208 )   (414 ) (34.3 %)

Inter-segment eliminations

 80   76     4   5.3 %   334   261     73   28.0 %

Total Bell

 (2,995 ) (3,028 )   33   1.1 %   (11,051 ) (10,821 )   (230 ) (2.1 %)

Bell Aliant

 (380 ) (380 )   -   0.0 %   (1,469 ) (1,458 )   (11 ) (0.8 %)

Inter-segment eliminations

 110   111     (1 ) (0.9 %)   428   411     17   4.1 %

Total BCE Inc.

 (3,265 ) (3,297 )   32   1.0 %   (12,092 ) (11,868 )   (224 ) (1.9 %)
                                       

EBITDA

                                      

Bell Wireline

 931   997     (66 ) (6.6 %)   3,920   4,155     (235 ) (5.7 %)

Margin

35.7

 %

36.8

 %      

(1.1

 ) pts  

38.4

 %

39.1

 %      

(0.7

 ) pts

Bell Wireless

 479   421     58   13.8 %   2,110   1,823     287   15.7 %

Margin

32.9

 %

30.8

 %      

2.1

  pts  

37.9

 %

34.8

 %      

3.1

  pts

Bell Media

 172   130     42   32.3 %   561   334     227   68.0 %

Margin

29.1

 %

22.5

 %      

6.6

  pts  

25.7

 %

21.7

 %      

4.0

  pts

Total Bell

 1,582   1,548     34   2.2 %   6,591   6,312     279   4.4 %

Margin

34.6

 %

33.8

 %      

0.8

  pts  

37.4

 %

36.8

 %      

0.6

  pts

Bell Aliant

 314   321     (7 ) (2.2 %)   1,292   1,317     (25 ) (1.9 %)

Margin

45.2

 %

45.8

 %      

(0.6

 ) pts  

46.8

 %

47.5

 %      

(0.7

 ) pts

Total BCE Inc.

 1,896   1,869     27   1.4 %   7,883   7,629     254   3.3 %

Margin

36.7

 %

36.2

 %      

0.5

  pts  

39.5

 %

39.1

 %      

0.4

  pts
                                       

Capital expenditures

                                      

Bell Wireline

 561   647     86   13.3 %   2,193   1,973     (220 ) (11.2 %)

Capital Intensity (5)

21.5

 %

23.9

 %      

2.4

  pts  

21.5

 %

18.6

 %      

(2.9

 ) pts

Bell Wireless

 177   188     11   5.9 %   637   619     (18 ) (2.9 %)

Capital Intensity

12.1

 %

13.8

 %      

1.7

  pts  

11.4

 %

11.8

 %      

0.4

  pts

Bell Media

 41   36     (5 ) (13.9 %)   93   91     (2 ) (2.2 %)

Capital Intensity

6.9

 %

6.2

 %      

(0.7

 ) pts  

4.3

 %

5.9

 %      

1.6

  pts

Total Bell

 779   871     92   10.6 %   2,923   2,683     (240 ) (8.9 %)

Capital Intensity

17.0

 %

19.0

 %      

2.0

  pts  

16.6

 %

15.7

 %      

(0.9

 ) pts

Bell Aliant

 135   137     2   1.5 %   592   573     (19 ) (3.3 %)

Capital Intensity

19.5

 %

19.5

 %      

0.0

  pts  

21.4

 %

20.6

 %      

(0.8

 ) pts

Total BCE Inc.

 914   1,008     94   9.3 %   3,515   3,256     (259 ) (8.0 %)

Capital Intensity

17.7

 %

19.5

 %      

1.8

  pts  

17.6

 %

16.7

 %      

(0.9

 ) pts

 

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

 

BCE Inc.
Segmented Data - Historical Trend

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

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

Revenues

                                              

Bell Wireline

 10,220     2,608   2,505   2,528   2,579     10,621     2,709   2,610   2,630   2,672  

Bell Wireless

 5,573     1,458   1,434   1,361   1,320     5,231     1,365   1,339   1,276   1,251  

Bell Media

 2,183     591   546   534   512     1,542     578   435   529   -  

Inter-segment eliminations

 (334 )   (80 ) (93 ) (83 ) (78 )   (261 )   (76 ) (71 ) (73 ) (41 )

Total Bell

 17,642     4,577   4,392   4,340   4,333     17,133     4,576   4,313   4,362   3,882  

Bell Aliant

 2,761     694   698   687   682     2,775     701   700   692   682  

Inter-segment eliminations

 (428 )   (110 ) (108 ) (104 ) (106 )   (411 )   (111 ) (103 ) (99 ) (98 )

Total BCE Inc.

 19,975     5,161   4,982   4,923   4,909     19,497     5,166   4,910   4,955   4,466  
                                               

Operating costs

                                              

Bell Wireline

 (6,300 )   (1,677 ) (1,527 ) (1,520 ) (1,576 )   (6,466 )   (1,712 ) (1,567 ) (1,559 ) (1,628 )

Bell Wireless

 (3,463 )   (979 ) (880 ) (805 ) (799 )   (3,408 )   (944 ) (858 ) (816 ) (790 )

Bell Media

 (1,622 )   (419 ) (390 ) (382 ) (431 )   (1,208 )   (448 ) (354 ) (406 ) -  

Inter-segment eliminations

 334     80   93   83   78     261     76   71   73   41  

Total Bell

 (11,051 )   (2,995 ) (2,704 ) (2,624 ) (2,728 )   (10,821 )   (3,028 ) (2,708 ) (2,708 ) (2,377 )

Bell Aliant

 (1,469 )   (380 ) (367 ) (362 ) (360 )   (1,458 )   (380 ) (364 ) (360 ) (354 )

Inter-segment eliminations

 428     110   108   104   106     411     111   103   99   98  

Total BCE Inc.

 (12,092 )   (3,265 ) (2,963 ) (2,882 ) (2,982 )   (11,868 )   (3,297 ) (2,969 ) (2,969 ) (2,633 )
                                               

EBITDA

                                              

Bell Wireline

 3,920     931   978   1,008   1,003     4,155     997   1,043   1,071   1,044  

Margin

38.4

%

 

35.7

%

39.0

%

39.9

%

38.9

%

 

39.1

%

 

36.8

%

40.0

%

40.7

%

39.1

%

Bell Wireless

 2,110     479   554   556   521     1,823     421   481   460   461  

Margin

37.9

%

 

32.9

%

38.6

%

40.9

%

39.5

%

 

34.8

%

 

30.8

%

35.9

%

36.1

%

36.9

%

Bell Media

 561     172   156   152   81     334     130   81   123   -  

Margin

25.7

%

 

29.1

%

28.6

%

28.5

%

15.8

%

 

21.7

%

 

22.5

%

18.6

%

23.3

%

n.m.

 

Total Bell

 6,591     1,582   1,688   1,716   1,605     6,312     1,548   1,605   1,654   1,505  

Margin

37.4

%

 

34.6

%

38.4

%

39.5

%

37.0

%

 

36.8

%

 

33.8

%

37.2

%

37.9

%

38.8

%

Bell Aliant

 1,292     314   331   325   322     1,317     321   336   332   328  

Margin

46.8

%

 

45.2

%

47.4

%

47.3

%

47.2

%

 

47.5

%

 

45.8

%

48.0

%

48.0

%

48.1

%

Total BCE Inc.

 7,883     1,896   2,019   2,041   1,927     7,629     1,869   1,941   1,986   1,833  

Margin

39.5

%

 

36.7

%

40.5

%

41.5

%

39.3

%

 

39.1

%

 

36.2

%

39.5

%

40.1

%

41.0

%
                                               

Capital expenditures

                                              

Bell Wireline

 2,193     561   514   586   532     1,973     647   474   450   402  

Capital Intensity

21.5

%

 

21.5

%

20.5

%

23.2

%

20.6

%

 

18.6

%

 

23.9

%

18.2

%

17.1

%

15.0

%

Bell Wireless

 637     177   152   172   136     619     188   150   168   113  

Capital Intensity

11.4

%

 

12.1

%

10.6

%

12.6

%

10.3

%

 

11.8

%

 

13.8

%

11.2

%

13.2

%

9.0

%

Bell Media

 93     41   22   18   12     91     36   28   27   -  

Capital Intensity

4.3

%

 

6.9

%

4.0

%

3.4

%

2.3

%

 

5.9

%

 

6.2

%

6.4

%

5.1

%

n.m.

 

Total Bell

 2,923     779   688   776   680     2,683     871   652   645   515  

Capital Intensity

16.6

%

 

17.0

%

15.7

%

17.9

%

15.7

%

 

15.7

%

 

19.0

%

15.1

%

14.8

%

13.3

%

Bell Aliant

 592     135   144   176   137     573     137   162   155   119  

Capital Intensity

21.4

%

 

19.5

%

20.6

%

25.6

%

20.1

%

 

20.6

%

 

19.5

%

23.1

%

22.4

%

17.4

%

Total BCE Inc.

 3,515     914   832   952   817     3,256     1,008   814   800   634  

Capital Intensity

17.6

%

 

17.7

%

16.7

%

19.3

%

16.6

%

 

16.7

%

 

19.5

%

16.6

%

16.1

%

14.2

%

 

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

 

Bell Wireline(2)

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

 Q4
2012		   Q4
2011		     % change     Total
2012		   Total
2011		     % change  

Bell Wireline

                              

Local & access

 635   687     (7.6 %)   2,632   2,852     (7.7 %)

Long distance

 191   219     (12.8 %)   801   903     (11.3 %)

Data (A)

 1,448   1,450     (0.1 %)   5,647   5,642     0.1 %

Equipment & other

 255   272     (6.3 %)   827   911     (9.2 %)

Total external revenues

 2,529   2,628     (3.8 %)   9,907   10,308     (3.9 %)

Inter-segment revenues

 79   81     (2.5 %)   313   313     0.0 %

Total Bell Wireline operating revenues

 2,608   2,709     (3.7 %)   10,220   10,621     (3.8 %)

Operating costs

 (1,677 ) (1,712 )   2.0 %   (6,300 ) (6,466 )   2.6 %

EBITDA

 931   997     (6.6 %)   3,920   4,155     (5.7 %)

EBITDA Margin

35.7

 %

36.8

 %  

(1.1

 ) pts  

38.4

 %

39.1

 %  

(0.7

 ) pts

 

                              

Capital expenditures

 561   647     13.3 %   2,193   1,973     (11.2 %)

Capital Intensity

21.5

 %

23.9

 %  

2.4

  pts  

21.5

 %

18.6

 %  

(2.9

 ) pts

Local

                              

Network access services (NAS)

                              

Residential (B)

 2,940,314   3,276,121     (10.3 %)   2,940,314   3,276,121     (10.3 %)

Business

 2,704,625   2,825,535     (4.3 %)   2,704,625   2,825,535     (4.3 %)

Total

 5,644,939   6,101,656     (7.5 %)   5,644,939   6,101,656     (7.5 %)

Network access service net (losses)/activations

                              

Residential (B)

 (87,029 ) (89,733 )   3.0 %   (335,807 ) (332,766 )   (0.9 %)

Business

 (36,641 ) (13,947 )   n.m.     (120,910 ) (41,283 )   n.m.  

Total

 (123,670 ) (103,680 )   (19.3 %)   (456,717 ) (374,049 )   (22.1 %)

Internet

                              

High Speed Internet net activations (losses)

 7,143   1,091     n.m.     32,288   15,426     n.m.  

High Speed Internet subscribers EOP (C) (D)

 2,115,243   2,112,752     0.1 %   2,115,243   2,112,752     0.1 %

TV

                              

Net subscriber activations (E)

 19,218   27,702     (30.6 %)   69,445   68,221     1.8 %

Total subscribers EOP (D) (E) (F)

 2,155,983   2,103,579     2.5 %   2,155,983   2,103,579     2.5 %

 

(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) Residential NAS losses in Q2 2012 were increased by 7,692 lines following a review of customer account records.
(C) At the beginning of 2012, our high-speed Internet subscriber base was reduced by 20,953 customers to reflect the decommissioning of our worldwide interoperability for microwave access (WiMax) network and our decision to shut down our cable TV business in Montréal in 2012.
(D) At the beginning of Q3 2012, our high-speed Internet and TV subscriber base were reduced by 8,844 customers and 7,514 customers respectively, to adjust for customer deactivations.
(E) Our TV customer base was increased by 15,260 customers to include the cable operations of Northwestel Inc. at the beginning of 2011.
(F) 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 – Fourth Quarter 2012 Page 6

 

Bell Wireline - Historical Trend

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

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

Bell Wireline

                                              

Local & access

 2,632     635   654   665   678     2,852     687   710   726   729  

Long distance

 801     191   192   206   212     903     219   223   227   234  

Data (A)

 5,647     1,448   1,386   1,395   1,418     5,642     1,450   1,384   1,393   1,415  

Equipment & other

 827     255   195   185   192     911     272   212   208   219  

Total external revenues

 9,907     2,529   2,427   2,451   2,500     10,308     2,628   2,529   2,554   2,597  

Inter-segment revenues

 313     79   78   77   79     313     81   81   76   75  

Total Bell Wireline operating revenues

 10,220     2,608   2,505   2,528   2,579     10,621     2,709   2,610   2,630   2,672  

Operating costs

 (6,300 )   (1,677 ) (1,527 ) (1,520 ) (1,576 )   (6,466 )   (1,712 ) (1,567 ) (1,559 ) (1,628 )

EBITDA

 3,920     931   978   1,008   1,003     4,155     997   1,043   1,071   1,044  

EBITDA Margin

38.4

 %  

35.7

 %

39.0

 %

39.9

 %

38.9

 %  

39.1

 %  

36.8

 %

40.0

 %

40.7

 %

39.1

 %

 

                                              

Capital expenditures

 2,193     561   514   586   532     1,973     647   474   450   402  

Capital Intensity

21.5

 %  

21.5

 %

20.5

 %

23.2

 %

20.6

 %  

18.6

 %  

23.9

 %

18.2

 %

17.1

 %

15.0

 %

Local

                                              

Network access services (NAS)

                                              

Residential (B)

 2,940,314     2,940,314   3,027,343   3,111,883   3,205,002     3,276,121     3,276,121   3,365,854   3,461,121   3,544,600  

Business

 2,704,625     2,704,625   2,741,266   2,766,006   2,800,124     2,825,535     2,825,535   2,839,482   2,854,844   2,871,862  

Total

 5,644,939     5,644,939   5,768,609   5,877,889   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 (B)

 (335,807 )   (87,029 ) (84,540 ) (93,119 ) (71,119 )   (332,766 )   (89,733 ) (95,267 ) (83,479 ) (64,287 )

Business

 (120,910 )   (36,641 ) (24,740 ) (34,118 ) (25,411 )   (41,283 )   (13,947 ) (15,362 ) (17,018 ) 5,044  

Total

 (456,717 )   (123,670 ) (109,280 ) (127,237 ) (96,530 )   (374,049 )   (103,680 ) (110,629 ) (100,497 ) (59,243 )

Internet

                                              

High Speed Internet net activations (losses)

 32,288     7,143   13,416   (664 ) 12,393     15,426     1,091   (101 ) 1,275   13,161  

High Speed Internet subscribers EOP (C) (D)

 2,115,243     2,115,243   2,108,100   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 (E)

 69,445     19,218   15,846   16,758   17,623     68,221     27,702   26,169   6,292   8,058  

Total subscribers EOP (D) (E) (F)

 2,155,983     2,155,983   2,136,765   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) Residential NAS losses in Q2 2012 were increased by 7,692 lines following a review of customer account records.
(C) At the beginning of 2012, high-speed Internet subscriber base was reduced by 20,953 customers to reflect the decommissioning of our worldwide interoperability for microwave access (WiMax) network and our decision to shut down our cable TV business in Montréal in 2012.
(D) At the beginning of Q3 2012, our high-speed Internet and TV subscriber base were reduced by 8,844 customers and 7,514 customers respectively, to adjust for customer deactivations.
(E) Our TV customer base was increased by 15,260 customers to include the cable operations of Northwestel Inc. at the beginning of 2011.
(F) 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 – Fourth Quarter 2012 Page 7

 

Bell Wireless(2)

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

 Q4
2012		   Q4
2011		     % change     Total
2012		   Total
2011		     % change  

Bell Wireless

                              

Revenue

                              

Service

 1,312   1,222     7.4 %   5,081   4,769     6.5 %

Product

 132   129     2.3 %   438   422     3.8 %

Total external Bell Wireless revenues

 1,444   1,351     6.9 %   5,519   5,191     6.3 %

Inter-segment

 14   14     0.0 %   54   40     35.0 %

Total Bell Wireless operating revenues

 1,458   1,365     6.8 %   5,573   5,231     6.5 %

Operating costs

 (979 ) (944 )   (3.7 %)   (3,463 ) (3,408 )   (1.6 %)

EBITDA

 479   421     13.8 %   2,110   1,823     15.7 %

EBITDA margin (Total revenues)

32.9

 %

30.8

 %  

2.1

  pts  

37.9

 %

34.8

 %  

3.1

  pts

EBITDA margin (Service revenues)

36.5

 %

34.5

 %  

2.0

  pts  

41.5

 %

38.2

 %  

3.3

  pts
                               

Capital expenditures

 177   188     5.9 %   637   619     (2.9 %)

Capital intensity

12.1

 %

13.8

 %  

1.7

  pts  

11.4

 %

11.8

 %  

0.4

  pts

Wireless gross activations

 495,730   511,917     (3.2 %)   1,802,837   1,936,396     (6.9 %)

Postpaid

 394,706   389,317     1.4 %   1,388,187   1,402,965     (1.1 %)

Wireless net activations

 105,005   57,886     81.4 %   260,650   185,434     40.6 %

Postpaid (A)

 143,834   131,986     9.0 %   456,979   433,797     5.3 %

Wireless subscribers EOP

 7,681,032   7,427,482     3.4 %   7,681,032   7,427,482     3.4 %

Postpaid

 6,425,045   5,975,166     7.5 %   6,425,045   5,975,166     7.5 %

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

 56.72   54.50     4.1 %   55.82   53.55     4.2 %

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

 1.7 % 2.1 %  

0.4

  pts   1.7 % 2.0 %  

0.3

  pts

Prepaid

 3.5 % 4.2 %  

0.7

  pts   3.6 % 3.9 %  

0.3

  pts

Postpaid

 1.3 % 1.5 %  

0.2

  pts   1.3 % 1.5 %  

0.2

  pts

Usage per subscriber (min/month)

 311   299     4.0 %   302   283     6.7 %

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

 480   450     (6.7 %)   416   403     (3.2 %)
                               

 

(A)

At the beginning of Q3 2012, our wireless postpaid net activations were reduced by 7,100 customers to adjust for customer deactivations.

 

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

 

Bell Wireless - Historical Trend

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

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

Bell Wireless

                                              

Revenue

                                              

Service

 5,081     1,312   1,307   1,248   1,214     4,769     1,222   1,228   1,174   1,145  

Product

 438     132   113   99   94     422     129   102   92   99  

Total external Bell Wireless revenues

 5,519     1,444   1,420   1,347   1,308     5,191     1,351   1,330   1,266   1,244  

Inter-segment

 54     14   14   14   12     40     14   9   10   7  

Total Bell Wireless operating revenues

 5,573     1,458   1,434   1,361   1,320     5,231     1,365   1,339   1,276   1,251  

Operating costs

 (3,463 )   (979 ) (880 ) (805 ) (799 )   (3,408 )   (944 ) (858 ) (816 ) (790 )

EBITDA

 2,110     479   554   556   521     1,823     421   481   460   461  

EBITDA margin (Total revenues)

37.9

 %  

32.9

 %

38.6

 %

40.9

 %

39.5

 %  

34.8

 %  

30.8

 %

35.9

 %

36.1

 %

36.9

 %

EBITDA margin (Service revenues)

41.5

 %  

36.5

 %

42.4

 %

44.6

 %

42.9

 %  

38.2

 %  

34.5

 %

39.2

 %

39.2

 %

40.3

 %
                                               

Capital expenditures

 637     177   152   172   136     619     188   150   168   113  

Capital intensity

11.4

 %  

12.1

 %

10.6

 %

12.6

 %

10.3

 %  

11.8

 %  

13.8

 %

11.2

 %

13.2

 %

9.0

 %

Wireless gross activations

 1,802,837     495,730   490,696   428,265   388,146     1,936,396     511,917   525,780   474,900   423,799  

Postpaid

 1,388,187     394,706   372,574   327,335   293,572     1,402,965     389,317   372,346   341,645   299,657  

Wireless net activations

 260,650     105,005   129,764   47,208   (21,327 )   185,434     57,886   85,749   36,507   5,292  

Postpaid (A)

 456,979     143,834   148,502   102,067   62,576     433,797     131,986   126,854   94,309   80,648  

Wireless subscribers EOP

 7,681,032     7,681,032   7,576,027   7,453,363   7,406,155     7,427,482     7,427,482   7,369,596   7,283,847   7,247,340  

Postpaid

 6,425,045     6,425,045   6,281,211   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)

 55.82     56.72   57.30   55.37   53.84     53.55     54.50   55.01   52.99   51.68  

Churn (%)(average per month)

 1.7 %   1.7 % 1.6 % 1.7 % 1.8 %   2.0 %   2.1 % 2.0 % 2.0 % 1.9 %

Prepaid

 3.6 %   3.5 % 3.3 % 3.7 % 3.9 %   3.9 %   4.2 % 3.9 % 3.7 % 3.7 %

Postpaid

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

Usage per subscriber (min/month)

 302     311   307   303   285     283     299   291   282   256  

Cost of acquisition (COA)($/sub)

 416     480   397   381   399     403     450   392   400   366  

 

(A)

At the beginning of Q3 2012, our wireless postpaid net activations were reduced by 7,100 customers to adjust for customer deactivations.

 

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

 

 

BCE Inc.
Net debt and other information

BCE Inc. - Net debt and preferreds

            
             

At December 31, 2012

     BCE Inc.      

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

            

 

    Bell      

 

Bell   Aliant   BCE Inc.  

Debt due within one year

 1,681   455   2,136  

Long-term debt

 11,304   2,582   13,886  

Preferred shares - BCE (A)

 1,698   -   1,698  

Cash and cash equivalents

 (108 ) (19 ) (127 )

Net debt

 14,575   3,018   17,593  

 

Bell - Net debt and preferreds

                    

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

                    

 

December 31   September 30   June 30   March 31   Dec. 31  

 

2012   2012   2012   2012   2011  
                     

Debt due within one year

 1,681   1,192   1,179   1,980   1,724  

Long-term debt

 11,304   11,367   11,440   10,030   10,070  

Preferred shares - BCE (A)

 1,698   1,698   1,698   1,698   1,558  

Cash and cash equivalents

 (108 ) (512 ) (769 ) (369 ) (140 )

Net Debt

 14,575   13,745   13,548   13,339   13,212  
                     

Net Debt / Adjusted EBITDA (B)

 2.15   2.04   2.03   2.02   2.02  

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

 8.81   8.88   8.97   8.83   8.94  

 

Bell Media Inc. - Proportionate Information

                                      

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

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

Proportionate Net Debt

 214   214   198   211   188     230   230   220   275  

Proportionate EBITDA

 462   146   124   128   64     278   113   62   103  
                                       

 

Cash Flow Information

                                  

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

 Q4
2012		   Q4
2011		   $ change   % change     Total
2012		   Total
2011		   $ change   % change  

Free Cash Flow (FCF)

                                  

Cash from operating activities, excluding acquisition costs paid

 645   676   (31 ) (4.6 %)   4,613   4,129   484   11.7 %

Capital expenditures

 (779 ) (871 ) 92   10.6 %   (2,923 ) (2,683 ) (240 ) (8.9 %)

Dividends paid on preferred shares

 (39 ) (31 ) (8 ) 25.8 %   (133 ) (118 ) (15 ) (12.7 %)

Dividends/distributions paid by subsidiaries to non-controlling interest

 (20 ) (8 ) (12 )

n.m.

     (78 ) (31 ) (47 ) n.m.  

Bell Aliant distributions to BCE

 48   48   -   0.0 %   191   214   (23 ) (10.7 %)

FCF

 (145 ) (186 ) 41   22.0 %   1,670   1,511   159   10.5 %
                                   

 

Cash Flow Information - Historical Trend

                                              

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

Total
2012		     Q4
2012		   Q3
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

 4,613     645   1,370   1,593   1,005     4,129     676   1,651   1,065   737  

Capital expenditures

 (2,923 )   (779 ) (688 ) (776 ) (680 )   (2,683 )   (871 ) (652 ) (645 ) (515 )

Dividends paid on preferred shares

 (133 )   (39 ) (27 ) (34 ) (33 )   (118 )   (31 ) (31 ) (28 ) (28 )

Dividends/distributions paid by subsidiaries to non-controlling interest

 (78 )   (20 ) (19 ) (26 ) (13 )   (31 )   (8 ) (11 ) (12 ) -  

Bell Aliant distributions to BCE

 191     48   48   47   48     214     48   48   47   71  

FCF

 1,670     (145 ) 684   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 trailing 12 months data.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2012 Page 10

 

BCE Inc.
Consolidated Statements of Financial Position Data

 

December 31     September 30     June 30     March 31     December 31  

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

 2012     2012     2012     2012     2011  

ASSETS

                            

Current assets

                            

Cash

 117     130     82     130     130  

Cash equivalents

 10     418     706     267     45  

Trade and other receivables

 2,910     2,822     2,734     2,846     3,113  

Current tax receivable

 36     72     68     38     43  

Inventory

 392     407     366     361     427  

Prepaid expenses

 301     361     409     397     262  

Other current assets

 145     120     137     128     152  

Total current assets

 3,911     4,330     4,502     4,167     4,172  

Non-current assets

                            

Property, plant and equipment

 20,007     19,916     19,792     18,897     18,785  

Intangible assets

 8,087     7,751     7,859     7,983     8,013  

Deferred tax assets

 244     284     309     314     329  

Investments in associates and joint ventures

 897     780     322     314     307  

Other non-current assets

 637     529     491     576     629  

Goodwill

 7,185     7,185     7,185     7,185     7,185  

Total non-current assets

 37,057     36,445     35,958     35,269     35,248  

Total assets

 40,968     40,775     40,460     39,436     39,420  

LIABILITIES

                            

Current liabilities

                            

Trade payables and other liabilities

 3,915     3,708     3,699     3,516     4,077  

Interest payable

 128     149     156     154     134  

Dividends payable

 453     459     433     432     415  

Current tax liabilities

 113     243     147     43     47  

Debt due within one year

 2,136     1,563     1,526     2,386     2,106  

Total current liabilities

 6,745     6,122     5,961     6,531     6,779  

Non-current liabilities

                            

Long-term debt

 13,886     14,021     14,095     12,682     12,721  

Deferred tax liabilities

 761     630     710     832     881  

Employee benefit obligation

 3,422     4,064     3,541     2,933     2,719  

Other non-current liabilities

 1,429     1,402     1,330     1,517     1,561  

Total non-current liabilities

 19,498     20,117     19,676     17,964     17,882  

Total liabilities

 26,243     26,239     25,637     24,495     24,661  
                             

EQUITY

                            

Equity attributable to BCE shareholders

                            

Preferred shares

 3,395     3,395     3,395     3,395     3,115  

Common shares

 13,611     13,578     13,549     13,540     13,566  

Shares subject to cancellation

 -     -     -     -     (50 )

Contributed surplus

 2,557     2,555     2,547     2,536     2,527  

Accumulated other comprehensive (loss) income

 (6 )   (15 )   8     (6 )   5  

Deficit

 (5,682 )   (5,839 )   (5,573 )   (5,472 )   (5,385 )

Equity attributable to BCE shareholders

 13,875     13,674     13,926     13,993     13,778  

Non-controlling interest

 850     862     897     948     981  

Total equity

 14,725     14,536     14,823     14,941     14,759  

Total liabilities and equity

 40,968     40,775     40,460     39,436     39,420  

Number of common shares outstanding

 775.4     774.6     773.9     773.6     775.4  

 

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

 

BCE Inc.
Consolidated Cash Flow Data

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

   Q4
2012		       Q4
2011		       $ change       Total
2012		       Total
2011		       $ change  

Net earnings

   809       573       236       3,053       2,574       479  

Adjustments to reconcile net earnings to cash flows from operating activities

                                              

Severance, acquisition and other costs

   70       (1 )     71       133       409       (276 )

Depreciation and amortization

   867       842       25       3,388       3,261       127  

Net employee benefit plans cost

   32       44       (12 )     114       182       (68 )

Net interest expense

   222       216       6       859       832       27  

Gains on investments

   (248 )     -       (248 )     (256 )     (89 )     (167 )

Income taxes

   197       247       (50 )     825       720       105  

Contributions to employee benefit plans

   (936 )     (961 )     25       (1,192 )     (1,491 )     299  

Payments under other employee future benefit plans

   (19 )     (19 )     -       (73 )     (75 )     2  

Severance and other costs paid

   (42 )     (75 )     33       (232 )     (438 )     206  

Acquisition costs paid

   (5 )     (28 )     23       (101 )     (70 )     (31 )

Interest paid

   (236 )     (234 )     (2 )     (835 )     (795 )     (40 )

Income taxes paid (net of refunds)

   (91 )     (73 )     (18 )     (280 )     (130 )     (150 )

Operating assets and liabilities

   243       307       (64 )     149       (21 )     170  

Cash flows from operating activities

   863       838       25       5,552       4,869       683  

Bell Aliant dividends/distributions paid to BCE

   48       48       -       191       214       (23 )

Capital expenditures

   (914 )     (1,008 )     94       (3,515 )     (3,256 )     (259 )

Cash dividends paid on preferred shares

   (39 )     (31 )     (8 )     (133 )     (118 )     (15 )

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

   (85 )     (72 )     (13 )     (340 )     (315 )     (25 )

Acquisition costs paid

   5       28       (23 )     101       70       31  

Bell Aliant Free Cash Flow

   (23 )     11       (34 )     (186 )     47       (233 )

Free Cash Flow (3)

   (145 )     (186 )     41       1,670       1,511       159  

Bell Aliant free cash flow, excluding dividends/distributions paid

   (25 )     (59 )     34       (5 )     (261 )     256  

Business acquisitions

   (8 )     -       (8 )     (13 )     (680 )     667  

Acquisition costs paid

   (5 )     (28 )     23       (101 )     (70 )     (31 )

Business dispositions

   -       -       -       -       2       (2 )

Increase in investments

   (192 )     (6 )     (186 )     (593 )     (12 )     (581 )

Decrease in investments

   -       6       (6 )     16       56       (40 )

Other investing activities

   6       2       4       12       6       6  

Increase (decrease) in notes payable and bank advances

   483       54       429       377       30       347  

Increase (reduction) in securitized trade receivables

   -       32       (32 )     (15 )     (318 )     303  

Issue of long-term debt

   22       8       14       1,055       2,314       (1,259 )

Repayment of long-term debt

   (112 )     (342 )     230       (946 )     (2,350 )     1,404  

Cash dividends paid on common shares

   (440 )     (403 )     (37 )     (1,683 )     (1,520 )     (163 )

Issue of common shares

   9       37       (28 )     39       152       (113 )

Repurchase of common shares

   -       (143 )     143       (107 )     (143 )     36  

Issue of preferred shares

   -       -       -       280       345       (65 )

Issue of equity securities by subsidiaries to non-controlling interest

   -       115       (115 )     11       403       (392 )

Other financing activities

   (14 )     (16 )     2       (45 )     (61 )     16  

 

  (276 )     (743 )     467       (1,718 )     (2,107 )     389  

Net (decrease) increase in cash and cash equivalents

   (421 )     (929 )     508       (48 )     (596 )     548  

Cash and cash equivalents at beginning of period

   548       1,104       (556 )     175       771       (596 )

Cash and cash equivalents at end of period

   127       175       (48 )     127       175       (48 )
                                               

Other information

                                              

Cash flow per share (9)

 $ (0.07 )   $ (0.23 )   $ (0.16 )   $ 2.63     $ 2.09     $ 0.54  

Annualized cash flow yield (10)

   5.1 %     4.6 %     0.5  pts     5.1 %     4.6 %     0.5  pts
                                               

 

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

 

BCE Inc.
Consolidated Cash Flow Data - Historical Trend

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

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

Net earnings

   3,053       809     689     879     676       2,574       573     736     683     582  

Adjustments to reconcile net earnings to cash flows from operating activities

                                                                  

Severance, acquisition and other costs

   133       70     24     20     19       409       (1 )   130     219     61  

Depreciation and amortization

   3,388       867     854     842     825       3,261       842     808     821     790  

Net employee benefit plans cost

   114       32     10     33     39       182       44     47     47     44  

Net interest expense

   859       222     223     208     206       832       216     210     214     192  

Gains on investments

   (256 )     (248 )   -     -     (8 )     (89 )     -     -     (89 )   -  

Income taxes

   825       197     248     173     207       720       247     80     194     199  

Contributions to employee benefit plans

   (1,192 )     (936 )   (81 )   (89 )   (86 )     (1,491 )     (961 )   (91 )   (85 )   (354 )

Payments under other employee future benefit plans

   (73 )     (19 )   (18 )   (18 )   (18 )     (75 )     (19 )   (18 )   (20 )   (18 )

Severance and other costs paid

   (232 )     (42 )   (43 )   (49 )   (98 )     (438 )     (75 )   (44 )   (66 )   (253 )

Acquisition costs paid

   (101 )     (5 )   (39 )   (32 )   (25 )     (70 )     (28 )   (7 )   (31 )   (4 )

Interest paid

   (835 )     (236 )   (222 )   (197 )   (180 )     (795 )     (234 )   (178 )   (216 )   (167 )

Income taxes paid (net of refunds)

   (280 )     (91 )   (39 )   (46 )   (104 )     (130 )     (73 )   (24 )   (25 )   (8 )

Operating assets and liabilities

   149       243     (17 )   178     (255 )     (21 )     307     267     (265 )   (330 )

Cash flows from operating activities

   5,552       863     1,589     1,902     1,198       4,869       838     1,916     1,381     734  

Bell Aliant dividends/distributions paid to BCE

   191       48     48     47     48       214       48     48     47     71  

Capital expenditures

   (3,515 )     (914 )   (832 )   (952 )   (817 )     (3,256 )     (1,008 )   (814 )   (800 )   (634 )

Cash dividends paid on preferred shares

   (133 )     (39 )   (27 )   (34 )   (33 )     (118 )     (31 )   (31 )   (28 )   (28 )

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

   (340 )     (85 )   (85 )   (91 )   (79 )     (315 )     (72 )   (75 )   (77 )   (91 )

Acquisition costs paid

   101       5     39     32     25       70       28     7     31     4  

Bell Aliant Free Cash Flow

   (186 )     (23 )   (48 )   (100 )   (15 )     47       11     (46 )   (127 )   209  

Free Cash Flow

   1,670       (145 )   684     804     327       1,511       (186 )   1,005     427     265  

Bell Aliant free cash flow, excluding dividends/distributions paid

   (5 )     (25 )   -     53     (33 )     (261 )     (59 )   (2 )   80     (280 )

Business acquisitions

   (13 )     (8 )   (3 )   -     (2 )     (680 )     -     -     (680 )   -  

Acquisition costs paid

   (101 )     (5 )   (39 )   (32 )   (25 )     (70 )     (28 )   (7 )   (31 )   (4 )

Business dispositions

   -       -     -     -     -       2       -     -     -     2  

Increase in investments

   (593 )     (192 )   (399 )   (1 )   (1 )     (12 )     (6 )   (2 )   (2 )   (2 )

Decrease in investments

   16       -     5     1     10       56       6     2     45     3  

Other investing activities

   12       6     1     4     1       6       2     1     (1 )   4  

Increase (decrease) in notes payable and bank advances

   377       483     15     (387 )   266       30       54     106     (656 )   526  

(Reduction) increase in securitized trade receivables

   (15 )     -     10     (13 )   (12 )     (318 )     32     -     (348 )   (2 )

Issue of long-term debt

   1,055       22     11     1,011     11       2,314       8     3     1,301     1,002  

Repayment of long-term debt

   (946 )     (112 )   (116 )   (633 )   (85 )     (2,350 )     (342 )   (193 )   (1,739 )   (76 )

Cash dividends paid on common shares

   (1,683 )     (440 )   (420 )   (420 )   (403 )     (1,520 )     (403 )   (402 )   (371 )   (344 )

Issue of common shares

   39       9     4     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

   11       -     9     1     1       403       115     -     -     288  

Other financing activities

   (45 )     (14 )   (2 )   (5 )   (24 )     (61 )     (16 )   (43 )   28     (30 )

 

  (1,718 )     (276 )   (924 )   (413 )   (105 )     (2,107 )     (743 )   (177 )   (2,323 )   1,136  

Net (decrease) increase in cash and cash equivalents

   (48 )     (421 )   (240 )   391     222       (596 )     (929 )   828     (1,896 )   1,401  

Cash and cash equivalents at beginning of period

   175       548     788     397     175       771       1,104     276     2,172     771  

Cash and cash equivalents at end of period

   127       127     548     788     397       175       175     1,104     276     2,172  

 

                                                                  

Other information

                                                                  

Cash flow per share

 $ 2.63     $ (0.07 ) $ 0.98   $ 1.23   $ 0.49      $ 2.09     $ (0.23 ) $ 1.43   $ 0.76   $ 0.13  

Annualized cash flow yield

   5.1 %     5.1 %   4.9 %   6.0 %   5.1 %     4.6 %     4.6 %   3.8 %   3.3 %   4.3 %

 

BCE Inc. Supplementary Financial Information – Fourth 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 employee benefit plans 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 – Fourth 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, plus 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 – Fourth Quarter 2012 Page 15