EX-99.2 3 supp_q217.htm SUPPLEMENTARY FINANCIAL INFORMATION - SECOND QUARTER 2017 Supplementary Financial Information

Exhibit 99.2

 

 

BCE (1) (2)
Consolidated Operational Data

(In millions of Canadian dollars, except share amounts) (unaudited)

   Q2
2017		     Q2
2016		      

$ change

  

% change

       YTD
2017		     YTD
2016		      

$ change

  

% change

  

Operating revenues

                                                  

Service

   5,335     4,988       347   7.0 %     10,386     9,896       490   5.0 %

Product

   364     352       12   3.4 %     697     714       (17 ) (2.4 %)

Total operating revenues

   5,699     5,340       359   6.7 %     11,083     10,610       473   4.5 %

Operating costs (A)

   (3,254 )   (3,016 )     (238 ) (7.9 %)     (6,374 )   (6,075 )     (299 ) (4.9 %)

Post-employment benefit plans service cost

   (64 )   (56 )     (8 ) (14.3 %)     (114 )   (104 )     (10 ) (9.6 %)

Adjusted EBITDA (3)

   2,381     2,268       113   5.0 %     4,595     4,431       164   3.7 %

Adjusted EBITDA margin (3)

   41.8 %   42.5 %         (0.7 ) pts     41.5 %   41.8 %         (0.3 ) pts

Severance, acquisition and other costs

   (36 )   (57 )     21   36.8 %     (120 )   (99 )     (21 ) (21.2 %)

Depreciation

   (769 )   (713 )     (56 ) (7.9 %)     (1,491 )   (1,452 )     (39 ) (2.7 %)

Amortization

   (211 )   (156 )     (55 ) (35.3 %)     (396 )   (305 )     (91 ) (29.8 %)

Finance costs

                                                  

Interest expense

   (238 )   (217 )     (21 ) (9.7 %)     (472 )   (436 )     (36 ) (8.3 %)

Interest on post-employment benefit obligations

   (18 )   (21 )     3   14.3 %     (36 )   (41 )     5   12.2 %

Other (expense) income

   (1 )   41       (42 ) n.m.       16     64       (48 ) (75.0 %)

Income taxes

   (297 )   (315 )     18   5.7 %     (560 )   (574 )     14   2.4 %

Net earnings

   811     830       (19 ) (2.3 %)     1,536     1,588       (52 ) (3.3 %)

Net earnings attributable to:

                                                  

Common shareholders

   762     778       (16 ) (2.1 %)     1,441     1,485       (44 ) (3.0 %)

Preferred shareholders

   32     35       (3 ) (8.6 %)     63     72       (9 ) (12.5 %)

Non-controlling interest

   17     17       -   -       32     31       1   3.2 %

Net earnings

   811     830       (19 ) (2.3 %)     1,536     1,588       (52 ) (3.3 %)

Net earnings per common share - basic

$

0.84

 

$

0.89

 

 

 

(0.05

)

(5.6

%)

 

$

1.62

 

$

1.71

 

 

 

(0.09

)

(5.3

%)

Net earnings per common share - diluted

 $ 0.84   $ 0.89       (0.05 ) (5.6 %)   $ 1.62   $ 1.71       (0.09 ) (5.3 %)

Dividends per common share

$

0.7175

 

$

0.6825

 

 

$

0.0350

 

5.1

%

 

$

1.4350

 

$

1.3650

 

 

$

0.0700

 

5.1

%

Average number of common shares outstanding - basic (millions)

   900.1     869.1                   888.0     868.1              

Average number of common shares outstanding - diluted (millions)

   901.0     870.3                   888.8     869.2              

Number of common shares outstanding (millions)

   900.4     869.5                   900.4     869.5              

Adjusted net earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   762     778       (16 ) (2.1 %)     1,441     1,485       (44 ) (3.0 %)

Severance, acquisition and other costs

   27     44       (17 ) (38.6 %)     92     75       17   22.7 %

Net losses (gains) on investments

   -     2       (2 ) (100.0 %)     14     (10 )     24   n.m.  

Early debt redemption costs

   3     -       3   n.m.       3     8       (5 ) (62.5 %)

Adjusted net earnings (3)

   792     824       (32 ) (3.9 %)     1,550     1,558       (8 ) (0.5 %)

Impact on net earnings per share

 $ 0.04   $ 0.05     $ (0.01 ) (20.0 %)   $ 0.13   $ 0.08     $ 0.05   62.5 %

Adjusted EPS (3)

$

0.88

 

$

0.94

 

 

$

(0.06

)

(6.4

%)

 

$

1.75

 

$

1.79

 

 

$

(0.04

)

(2.2

%)

 

(A) Excludes post-employment benefit plans service cost
n.m. : not meaningful

 

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 2

BCE
Consolidated Operational Data - Historical Trend

(In millions of Canadian dollars, except share amounts) (unaudited)   YTD
2017		       Q2 17     Q1 17       TOTAL
2016		       Q4 16     Q3 16     Q2 16     Q1 16  

Operating revenues

                                                      

Service

   10,386       5,335     5,051       20,090       5,169     5,025     4,988     4,908  

Product

   697       364     333       1,629       533     382     352     362  

Total operating revenues

   11,083       5,699     5,384       21,719       5,702     5,407     5,340     5,270  

Operating costs (A)

   (6,374 )     (3,254 )   (3,120 )     (12,707 )     (3,521 )   (3,111 )   (3,016 )   (3,059 )

Post-employment benefit plans service cost

   (114 )     (64 )   (50 )     (224 )     (60 )   (60 )   (56 )   (48 )

Adjusted EBITDA

   4,595       2,381     2,214       8,788       2,121     2,236     2,268     2,163  

Adjusted EBITDA margin

   41.5 %     41.8 %   41.1 %     40.5 %     37.2 %   41.4 %   42.5 %   41.0 %

Severance, acquisition and other costs

   (120 )     (36 )   (84 )     (135 )     (11 )   (25 )   (57 )   (42 )

Depreciation

   (1,491 )     (769 )   (722 )     (2,877 )     (719 )   (706 )   (713 )   (739 )

Amortization

   (396 )     (211 )   (185 )     (631 )     (165 )   (161 )   (156 )   (149 )

Finance costs

                                                      

Interest expense

   (472 )     (238 )   (234 )     (888 )     (225 )   (227 )   (217 )   (219 )

Interest on post-employment benefit obligations

   (36 )     (18 )   (18 )     (81 )     (20 )   (20 )   (21 )   (20 )

Other income (expense)

   16       (1 )   17       21       (30 )   (13 )   41     23  

Income taxes

   (560 )     (297 )   (263 )     (1,110 )     (252 )   (284 )   (315 )   (259 )

Net earnings

   1,536       811     725       3,087       699     800     830     758  

Net earnings attributable to:

                                                      

Common shareholders

   1,441       762     679       2,894       657     752     778     707  

Preferred shareholders

   63       32     31       137       33     32     35     37  

Non-controlling interest

   32       17     15       56       9     16     17     14  

Net earnings

   1,536       811     725       3,087       699     800     830     758  

Net earnings per common share - basic

$

1.62

 

 

$

0.84

 

$

0.78

 

 

$

3.33

 

 

$

0.75

 

$

0.87

 

$

0.89

 

$

0.82

 

Net earnings per common share - diluted

 $ 1.62     $ 0.84   $ 0.78     $ 3.33     $ 0.75   $ 0.87   $ 0.89   $ 0.82  

Dividends per common share

 $ 1.4350     $ 0.7175   $ 0.7175     $ 2.7300     $ 0.6825   $ 0.6825   $ 0.6825   $ 0.6825  

Average number of common shares outstanding - basic (millions)

   888.0       900.1     875.7       869.1       870.5     869.9     869.1     867.1  

Average number of common shares outstanding - diluted (millions)

   888.8       901.0     876.6       870.3       871.6     871.4     870.3     868.1  

Number of common shares outstanding (millions)

   900.4       900.4     899.5       870.7       870.7     870.2     869.5     868.6  

Adjusted net earnings and EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to common shareholders

   1,441       762     679       2,894       657     752     778     707  

Severance, acquisition and other costs

   92       27     65       104       9     20     44     31  

Net losses (gains) on investments

   14       -     14       3       1     12     2     (12 )

Early debt redemption costs

   3       3     -       8       -     -     -     8  

Adjusted net earnings

   1,550       792     758       3,009       667     784     824     734  

Impact on net earnings per share

 $ 0.13     $ 0.04   $ 0.09     $ 0.13     $ 0.01   $ 0.04   $ 0.05   $ 0.03  

Adjusted EPS

$

1.75

 

 

$

0.88

 

$

0.87

 

 

$

3.46

 

 

$

0.76

 

$

0.91

 

$

0.94

 

$

0.85

 

 

(A) Excludes post-employment benefit plans service cost

BCE Supplementary Financial Information - Second Quarter 2017 Page 3

BCE
Segmented Data

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2017		   Q2
2016		     $ change  

% change

     YTD
2017		   YTD
2016		     $ change  

% change

  
                                       

Operating revenues

                                      

Bell Wireless

 1,959   1,735     224   12.9 %   3,773   3,428     345   10.1 %

Bell Wireline

 3,121   2,979     142   4.8 %   6,101   5,962     139   2.3 %

Bell Media

 796   779     17   2.2 %   1,547   1,520     27   1.8 %

Inter-segment eliminations

 (177 ) (153 )   (24 ) (15.7 %)   (338 ) (300 )   (38 ) (12.7 %)

Total

 5,699   5,340     359   6.7 %   11,083   10,610     473   4.5 %
                                       

Operating costs

                                      

Bell Wireless

 (1,108 ) (963 )   (145 ) (15.1 %)   (2,104 ) (1,895 )   (209 ) (11.0 %)

Bell Wireline

 (1,815 ) (1,706 )   (109 ) (6.4 %)   (3,533 ) (3,432 )   (101 ) (2.9 %)

Bell Media

 (572 ) (556 )   (16 ) (2.9 %)   (1,189 ) (1,152 )   (37 ) (3.2 %)

Inter-segment eliminations

 177   153     24   15.7 %   338   300     38   12.7 %

Total

 (3,318 ) (3,072 )   (246 ) (8.0 %)   (6,488 ) (6,179 )   (309 ) (5.0 %)
                                       

Adjusted EBITDA

                                      

Bell Wireless

 851   772     79   10.2 %   1,669   1,533     136   8.9 %

Margin

 43.4 % 44.5 %       (1.1 ) pts   44.2 % 44.7 %       (0.5 ) pts

Bell Wireline

 1,306   1,273     33   2.6 %   2,568   2,530     38   1.5 %

Margin

 41.8 % 42.7 %       (0.9 ) pts   42.1 % 42.4 %       (0.3 ) pts

Bell Media

 224   223     1   0.4 %   358   368     (10 ) (2.7 %)

Margin

 28.1 % 28.6 %       (0.5 ) pts   23.1 % 24.2 %       (1.1 ) pts

Total

 2,381   2,268     113   5.0 %   4,595   4,431     164   3.7 %

Margin

 41.8 % 42.5 %       (0.7 ) pts   41.5 % 41.8 %       (0.3 ) pts
                                       

Capital expenditures

                                      

Bell Wireless

 191   183     (8 ) (4.4 %)   327   345     18   5.2 %

Capital intensity (4)

 9.7 % 10.5 %       0.8  pts   8.7 % 10.1 %       1.4  pts

Bell Wireline

 818   733     (85 ) (11.6 %)   1,509   1,402     (107 ) (7.6 %)

Capital intensity

 26.2 % 24.6 %       (1.6 ) pts   24.7 % 23.5 %       (1.2 ) pts

Bell Media

 33   34     1   2.9 %   58   55     (3 ) (5.5 %)

Capital intensity

 4.1 % 4.4 %       0.3  pts   3.7 % 3.6 %       (0.1 ) pts

Total

 1,042   950     (92 ) (9.7 %)   1,894   1,802     (92 ) (5.1 %)

Capital intensity

 18.3 % 17.8 %       (0.5 ) pts   17.1 % 17.0 %       (0.1 ) pts

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 4

BCE
Segmented Data - Historical Trend

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

 YTD
2017		     Q2 17   Q1 17     TOTAL
2016		     Q4 16   Q3 16   Q2 16   Q1 16  
                                       

Operating revenues

                                      

Bell Wireless

 3,773     1,959   1,814     7,159     1,883   1,848   1,735   1,693  

Bell Wireline

 6,101     3,121   2,980     12,104     3,137   3,005   2,979   2,983  

Bell Media

 1,547     796   751     3,081     845   716   779   741  

Inter-segment eliminations

 (338 )   (177 ) (161 )   (625 )   (163 ) (162 ) (153 ) (147 )

Total

 11,083     5,699   5,384     21,719     5,702   5,407   5,340   5,270  
                                       

Operating costs

                                      

Bell Wireless

 (2,104 )   (1,108 ) (996 )   (4,156 )   (1,209 ) (1,052 ) (963 ) (932 )

Bell Wireline

 (3,533 )   (1,815 ) (1,718 )   (7,062 )   (1,878 ) (1,752 ) (1,706 ) (1,726 )

Bell Media

 (1,189 )   (572 ) (617 )   (2,338 )   (657 ) (529 ) (556 ) (596 )

Inter-segment eliminations

 338     177   161     625     163   162   153   147  

Total

 (6,488 )   (3,318 ) (3,170 )   (12,931 )   (3,581 ) (3,171 ) (3,072 ) (3,107 )
                                       

Adjusted EBITDA

                                      

Bell Wireless

 1,669     851   818     3,003     674   796   772   761  

Margin

 44.2 %   43.4 % 45.1 %   41.9 %   35.8 % 43.1 % 44.5 % 44.9 %

Bell Wireline

 2,568     1,306   1,262     5,042     1,259   1,253   1,273   1,257  

Margin

 42.1 %   41.8 % 42.3 %   41.7 %   40.1 % 41.7 % 42.7 % 42.1 %

Bell Media

 358     224   134     743     188   187   223   145  

Margin

 23.1 %   28.1 % 17.8 %   24.1 %   22.2 % 26.1 % 28.6 % 19.6 %

Total

 4,595     2,381   2,214     8,788     2,121   2,236   2,268   2,163  

Margin

 41.5 %   41.8 % 41.1 %   40.5 %   37.2 % 41.4 % 42.5 % 41.0 %
                                       

Capital expenditures

                                      

Bell Wireless

 327     191   136     733     193   195   183   162  

Capital intensity

 8.7 %   9.7 % 7.5 %   10.2 %   10.2 % 10.6 % 10.5 % 9.6 %

Bell Wireline

 1,509     818   691     2,936     778   756   733   669  

Capital intensity

 24.7 %   26.2 % 23.2 %   24.3 %   24.8 % 25.2 % 24.6 % 22.4 %

Bell Media

 58     33   25     102     22   25   34   21  

Capital intensity

 3.7 %   4.1 % 3.3 %   3.3 %   2.6 % 3.5 % 4.4 % 2.8 %

Total

 1,894     1,042   852     3,771     993   976   950   852  

Capital intensity

 17.1 %   18.3 % 15.8 %   17.4 %   17.4 % 18.1 % 17.8 % 16.2 %

 

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 5

 

 

Bell Wireless (1) (2)

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

 Q2
2017		   Q2
2016		    

% change

     YTD
2017		   YTD
2016		    

% change

  

Bell Wireless

                              

Operating revenues

                              

External service revenues

 1,818   1,610     12.9 %   3,523   3,189     10.5 %

Inter-segment service revenues

 10   10     -     20   19     5.3 %

Total operating service revenues

 1,828   1,620     12.8 %   3,543   3,208     10.4 %

External product revenues

 129   114     13.2 %   228   218     4.6 %

Inter-segment product revenues

 2   1     100.0 %   2   2     -  

Total operating product revenues

 131   115     13.9 %   230   220     4.5 %

Total external revenues

 1,947   1,724     12.9 %   3,751   3,407     10.1 %

Total operating revenues

 1,959   1,735     12.9 %   3,773   3,428     10.1 %

Operating costs

 (1,108 ) (963 )   (15.1 %)   (2,104 ) (1,895 )   (11.0 %)

Adjusted EBITDA

 851   772     10.2 %   1,669   1,533     8.9 %

Adjusted EBITDA margin (Total operating revenues)

 43.4 % 44.5 %   (1.1 ) pts   44.2 % 44.7 %   (0.5 ) pts

Adjusted EBITDA margin (Operating service revenues)

 46.6 % 47.7 %   (1.1 ) pts   47.1 % 47.8 %   (0.7 ) pts

Capital expenditures

 191   183     (4.4 %)   327   345     5.2 %

Capital intensity

 9.7 % 10.5 %   0.8 pts   8.7 % 10.1 %   1.4 pts

Wireless gross activations

 403,418   379,233     6.4 %   751,870   710,856     5.8 %

Postpaid

 339,392   316,977     7.1 %   636,008   592,392     7.4 %

Wireless net activations

 66,916   44,730     49.6 %   67,588   34,862     93.9 %

Postpaid

 88,611   69,848     26.9 %   124,393   95,653     30.0 %

Wireless subscribers end of period (EOP) (A)

 8,901,291   8,280,693     7.5 %   8,901,291   8,280,693     7.5 %

Postpaid (A)

 8,126,264   7,471,069     8.8 %   8,126,264   7,471,069     8.8 %

Average revenue per user (4) (ARPU)($/month)

 67.28   64.32     4.6 %   66.48   63.67     4.4 %

Churn (%) (4)(average per month)

 1.27 % 1.35 %   0.08 pts   1.31 % 1.37 %   0.06 pts

Prepaid

 3.19 % 3.21 %   0.02 pts   3.24 % 3.32 %   0.08 pts

Postpaid

 1.08 % 1.15 %   0.07 pts   1.12 % 1.15 %   0.03 pts

 

(A) As a result of the acquisition of MTS on March 17, 2017, our wireless subscriber base in Q1 2017 increased by 476,932 subscribers (418,427 postpaid). Subsequently, in Q2 2017, Bell’s wireless subscriber base reflected the divestiture of 104,833 postpaid subscribers to TELUS Communications Inc. (TELUS) related to BCE’s acquisition of MTS. Bell’s wireless subscriber base this quarter also reflected the removal of 7,268 subscribers (2,450 postpaid and 4,818 prepaid), due to the decommissioning of the code division multiple access (CDMA) network in western Canada.

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 6

 

Bell Wireless - Historical Trend

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

 YTD
2017		     Q2 17   Q1 17     TOTAL
2016		     Q4 16   Q3 16   Q2 16   Q1 16  

Bell Wireless

                                      

Operating revenues

                                      

External service revenues

 3,523     1,818   1,705     6,602     1,702   1,711   1,610   1,579  

Inter-segment service revenues

 20     10   10     40     11   10   10   9  

Total operating service revenues

 3,543     1,828   1,715     6,642     1,713   1,721   1,620   1,588  

External product revenues

 228     129   99     515     170   127   114   104  

Inter-segment product revenues

 2     2   -     2     -   -   1   1  

Total operating product revenues

 230     131   99     517     170   127   115   105  

Total external revenues

 3,751     1,947   1,804     7,117     1,872   1,838   1,724   1,683  

Total operating revenues

 3,773     1,959   1,814     7,159     1,883   1,848   1,735   1,693  

Operating costs

 (2,104 )   (1,108 ) (996 )   (4,156 )   (1,209 ) (1,052 ) (963 ) (932 )

Adjusted EBITDA

 1,669     851   818     3,003     674   796   772   761  

Adjusted EBITDA margin (Total operating revenues)

 44.2 %   43.4 % 45.1 %   41.9 %   35.8 % 43.1 % 44.5 % 44.9 %

Adjusted EBITDA margin (Operating service revenues)

 47.1 %   46.6 % 47.7 %   45.2 %   39.3 % 46.3 % 47.7 % 47.9 %

Capital expenditures

 327     191   136     733     193   195   183   162  

Capital intensity

 8.7 %   9.7 % 7.5 %   10.2 %   10.2 % 10.6 % 10.5 % 9.6 %

Wireless gross activations

 751,870     403,418   348,452     1,654,882     490,948   453,078   379,233   331,623  

Postpaid

 636,008     339,392   296,616     1,408,030     434,008   381,630   316,977   275,415  

Wireless net activations (losses)

 67,588     66,916   672     223,041     87,923   100,256   44,730   (9,868 )

Postpaid

 124,393     88,611   35,782     315,311     112,393   107,265   69,848   25,805  

Wireless subscribers EOP (A)

 8,901,291     8,901,291   8,946,476     8,468,872     8,468,872   8,380,949   8,280,693   8,235,963  

Postpaid (A)

 8,126,264     8,126,264   8,144,936     7,690,727     7,690,727   7,578,334   7,471,069   7,401,221  

ARPU ($/month)

 66.48     67.28   65.66     65.46     66.69   67.76   64.32   63.02  

Churn (%)(average per month)

 1.31 %   1.27 % 1.36 %   1.44 %   1.60 % 1.41 % 1.35 % 1.38 %

Prepaid

 3.24 %   3.19 % 3.29 %   3.13 %   3.01 % 2.86 % 3.21 % 3.42 %

Postpaid

 1.12 %   1.08 % 1.17 %   1.25 %   1.45 % 1.26 % 1.15 % 1.15 %

 

(A) As a result of the acquisition of MTS on March 17, 2017, our wireless subscriber base in Q1 2017 increased by 476,932 subscribers (418,427 postpaid). Subsequently, in Q2 2017, Bell’s wireless subscriber base reflected the divestiture of 104,833 postpaid subscribers to TELUS related to BCE’s acquisition of MTS. Bell’s wireless subscriber base this quarter also reflected the removal of 7,268 subscribers (2,450 postpaid and 4,818 prepaid), due to the decommissioning of the CDMA network in western Canada.

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 7

 

Bell Wireline (1) (2)

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

 Q2
2017		   Q2
2016		    

% change

     YTD
2017		   YTD
2016		    

% change

  

Bell Wireline

                              

Operating revenues

                              

Data

 1,798   1,685     6.7 %   3,505   3,342     4.9 %

Local & access

 813   781     4.1 %   1,588   1,570     1.1 %

Long distance

 167   183     (8.7 %)   335   374     (10.4 %)

Other services

 55   51     7.8 %   99   98     1.0 %

Total external service revenues

 2,833   2,700     4.9 %   5,527   5,384     2.7 %

Inter-segment service revenues

 50   39     28.2 %   99   78     26.9 %

Total operating service revenues

 2,883   2,739     5.3 %   5,626   5,462     3.0 %

Data

 125   122     2.5 %   248   259     (4.2 %)

Equipment & other

 111   116     (4.3 %)   222   237     (6.3 %)

Total external product revenues

 236   238     (0.8 %)   470   496     (5.2 %)

Inter-segment product revenues

 2   2     -     5   4     25.0 %

Total operating product revenues

 238   240     (0.8 %)   475   500     (5.0 %)

Total external revenues

 3,069   2,938     4.5 %   5,997   5,880     2.0 %

Total operating revenues

 3,121   2,979     4.8 %   6,101   5,962     2.3 %

Operating costs

 (1,815 ) (1,706 )   (6.4 %)   (3,533 ) (3,432 )   (2.9 %)

Adjusted EBITDA

 1,306   1,273     2.6 %   2,568   2,530     1.5 %

Adjusted EBITDA margin

 41.8 % 42.7 %   (0.9 ) pts   42.1 % 42.4 %   (0.3 ) pts

Capital expenditures

818

 

733

 

 

(11.6

%)

 

1,509

 

1,402

 

 

(7.6

%)

Capital intensity

 26.2 % 24.6 %   (1.6 ) pts   24.7 % 23.5 %   (1.2 ) pts

High-speed Internet

                              

High-speed Internet net activations

 1,407   7,539     (81.3 %)   16,396   27,322     (40.0 %)

High-speed Internet subscribers EOP (A) (B)

 3,718,677   3,418,785     8.8 %   3,718,677   3,418,785     8.8 %

TV

                              

Net subscriber (losses) activations

 (13,337 ) 2,101     (734.8 %)   (29,000 ) 12,100     (339.7 %)

Internet protocol television (IPTV)

 16,427   35,255     (53.4 %)   38,829   82,995     (53.2 %)

Total subscribers EOP (A)

 2,824,016   2,750,596     2.7 %   2,824,016   2,750,596     2.7 %

IPTV (A)

 1,481,434   1,265,786     17.0 %   1,481,434   1,265,786     17.0 %

Local

                              

Network access services (NAS) (A)

                              

Residential (A)

 3,332,976   3,397,711     (1.9 %)   3,332,976   3,397,711     (1.9 %)

Business (A)

 3,146,339   3,078,972     2.2 %   3,146,339   3,078,972     2.2 %

Total

 6,479,315   6,476,683     -     6,479,315   6,476,683     -  

NAS net losses

                              

Residential

 (67,005 ) (68,593 )   2.3 %   (140,426 ) (136,021 )   (3.2 %)

Business

 (27,954 ) (20,232 )   (38.2 %)   (57,807 ) (60,436 )   4.4 %

Total

 (94,959 ) (88,825 )   (6.9 %)   (198,233 ) (196,457 )   (0.9 %)

 

(A) As a result of the acquisition of MTS on March 17, 2017, our high-speed Internet, TV and NAS subscriber bases increased by 229,470, 108,107 (104,661 IPTV) and 419,816 (223,663 residential and 196,153 business) subscribers, respectively.
(B) Following a review of customer accounts by a wholesale reseller, we have adjusted our high-speed Internet subscriber base at the beginning of Q1 2017 to remove 3,751 non-revenue generating units.

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 8

 

Bell Wireline - Historical Trend

(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2017		     Q2 17   Q1 17     TOTAL
2016		     Q4 16   Q3 16   Q2 16   Q1 16  

Bell Wireline

                                      

Operating revenues

                                      

Data

 3,505     1,798   1,707     6,791     1,745   1,704   1,685   1,657  

Local & access

 1,588     813   775     3,089     753   766   781   789  

Long distance

 335     167   168     741     178   189   183   191  

Other services

 99     55   44     182     45   39   51   47  

Total external service revenues

 5,527     2,833   2,694     10,803     2,721   2,698   2,700   2,684  

Inter-segment service revenues

 99     50   49     177     49   50   39   39  

Total operating service revenues

 5,626     2,883   2,743     10,980     2,770   2,748   2,739   2,723  

Data

 248     125   123     559     171   129   122   137  

Equipment & other

 222     111   111     555     192   126   116   121  

Total external product revenues

 470     236   234     1,114     363   255   238   258  

Inter-segment product revenues

 5     2   3     10     4   2   2   2  

Total operating product revenues

 475     238   237     1,124     367   257   240   260  

Total external revenues

 5,997     3,069   2,928     11,917     3,084   2,953   2,938   2,942  

Total operating revenues

 6,101     3,121   2,980     12,104     3,137   3,005   2,979   2,983  

Operating costs

 (3,533 )   (1,815 ) (1,718 )   (7,062 )   (1,878 ) (1,752 ) (1,706 ) (1,726 )

Adjusted EBITDA

 2,568     1,306   1,262     5,042     1,259   1,253   1,273   1,257  

Adjusted EBITDA margin

 42.1 %   41.8 % 42.3 %   41.7 %   40.1 % 41.7 % 42.7 % 42.1 %

Capital expenditures

 1,509     818   691     2,936     778   756   733   669  

Capital intensity

 24.7 %   26.2 % 23.2 %   24.3 %   24.8 % 25.2 % 24.6 % 22.4 %

High-speed Internet

                                      

High-speed Internet net activations

 16,396     1,407   14,989     85,099     18,402   39,375   7,539   19,783  

High-speed Internet subscribers EOP (A) (B)

 3,718,677     3,718,677   3,717,270     3,476,562     3,476,562   3,458,160   3,418,785   3,411,246  

TV

                                      

Net subscriber (losses) activations

 (29,000 )   (13,337 ) (15,663 )   6,413     (964 ) (4,723 ) 2,101   9,999  

IPTV

 38,829     16,427   22,402     155,153     35,905   36,253   35,255   47,740  

Total subscribers EOP (A)

 2,824,016     2,824,016   2,837,353     2,744,909     2,744,909   2,745,873   2,750,596   2,748,495  

IPTV (A)

 1,481,434     1,481,434   1,465,007     1,337,944     1,337,944   1,302,039   1,265,786   1,230,531  

Local

                                      

NAS (A)

                                      

Residential (A)

 3,332,976     3,332,976   3,399,981     3,249,739     3,249,739   3,317,124   3,397,711   3,466,304  

Business (A)

 3,146,339     3,146,339   3,174,293     3,007,993     3,007,993   3,041,238   3,078,972   3,099,204  

Total

 6,479,315     6,479,315   6,574,274     6,257,732     6,257,732   6,358,362   6,476,683   6,565,508  

NAS net losses

                                      

Residential

 (140,426 )   (67,005 ) (73,421 )   (283,993 )   (67,385 ) (80,587 ) (68,593 ) (67,428 )

Business

 (57,807 )   (27,954 ) (29,853 )   (131,415 )   (33,245 ) (37,734 ) (20,232 ) (40,204 )

Total

 (198,233 )   (94,959 ) (103,274 )   (415,408 )   (100,630 ) (118,321 ) (88,825 ) (107,632 )

 

(A) As a result of the acquisition of MTS on March 17, 2017, our high-speed Internet, TV and NAS subscriber bases increased by 229,470, 108,107 (104,661 IPTV) and 419,816 (223,663 residential and 196,153 business) subscribers, respectively.
(B) Following a review of customer accounts by a wholesale reseller, we have adjusted our high-speed Internet subscriber base at the beginning of Q1 2017 to remove 3,751 non-revenue generating units.

BCE Supplementary Financial Information - Second Quarter 2017 Page 9

BCE (2)
Net debt and other information

BCE - Net debt and preferred shares            
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)            

 

           

 

June 30
2017		   March 31
2017		   December 31
2016		  

Debt due within one year

5,940

 

6,306

 

4,887

 

Long-term debt

 17,433   17,757   16,572  

Preferred shares - BCE (A)

 2,002   2,002   2,002  

Cash and cash equivalents

 (557 ) (510 ) (853 )

Net debt (3)

 24,818   25,555   22,608  

Net debt leverage ratio (3)

2.77

 

2.89

 

2.57

 

Adjusted EBITDA /net interest expense ratio (3)

 9.22   9.27   9.31  

 

            

 

Cash flow information                                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) Q2
2017		   Q2
2016		   $ change   % change     YTD
2017		   YTD
2016		   $ change   % change  

Free cash flow (FCF) (3)

                                  

Cash flows from operating activities

 2,154   1,890   264   14.0 %   3,467   3,180   287   9.0 %

Capital expenditures

 (1,042 ) (950 ) (92 ) (9.7 %)   (1,894 ) (1,802 ) (92 ) (5.1 %)

Dividends paid on preferred shares

 (30 ) (35 ) 5   14.3 %   (73 ) (71 ) (2 ) (2.8 %)

Dividends paid by subsidiaries to non-controlling interest

 (9 ) (10 ) 1   10.0 %   (21 ) (22 ) 1   4.5 %

Acquisition and other costs paid

 21   39   (18 ) (46.2 %)   104   67   37   55.2 %

FCF

 1,094   934   160   17.1 %   1,583   1,352   231   17.1 %
                                   

 

Cash flow information - Historical trend                                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited) YTD
2017		   Q2
2017		   Q1
2017		     TOTAL
2016		   Q4
2016		   Q3
2016		   Q2
2016		   Q1
2016		  

FCF

                                  

Cash flows from operating activities

 3,467   2,154   1,313     6,643   1,520   1,943   1,890   1,290  

Capital expenditures

 (1,894 ) (1,042 ) (852 )   (3,771 ) (993 ) (976 ) (950 ) (852 )

Dividends paid on preferred shares

 (73 ) (30 ) (43 )   (126 ) (21 ) (34 ) (35 ) (36 )

Dividends paid by subsidiaries to non-controlling interest

 (21 ) (9 ) (12 )   (46 ) (11 ) (13 ) (10 ) (12 )

Acquisition and other costs paid

 104   21   83     126   28   31   39   28  

Voluntary defined benefit pension plan contribution

 -   -   -     400   400   -   -   -  

FCF

 1,583   1,094   489     3,226   923   951   934   418  
                                                     

 

(A) Net debt includes 50% of preferred shares

BCE Supplementary Financial Information - Second Quarter 2017 Page 10

 

BCE (2)
Consolidated Statements of Financial Position

 

June 30

    

March 31

     December 31  

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

 2017     2017     2016  

ASSETS

                

Current assets

                

Cash

 420     439     603  

Cash equivalents

 137     71     250  

Trade and other receivables

 2,845     2,818     2,979  

Inventory

 437     428     403  

Prepaid expenses

 550     540     420  

Assets held for sale

 -     284     -  

Other current assets

 121     152     200  

Total current assets

 4,510     4,732     4,855  

Non-current assets

                

Property, plant and equipment

 23,586     23,450     22,346  

Intangible assets

 13,416     13,356     11,998  

Deferred tax assets

 180     171     89  

Investments in associates and joint ventures

 883     879     852  

Other non-current assets

 634     875     1,010  

Goodwill

 10,383     10,386     8,958  

Total non-current assets

 49,082     49,117     45,253  

Total assets

 53,592     53,849     50,108  

LIABILITIES

                

Current liabilities

                

Trade payables and other liabilities

 4,270     4,044     4,326  

Interest payable

 168     177     156  

Dividends payable

 656     636     617  

Current tax liabilities

 175     62     122  

Debt due within one year

 5,940     6,306     4,887  

Total current liabilities

 11,209     11,225     10,108  

Non-current liabilities

                

Long-term debt

 17,433     17,757     16,572  

Deferred tax liabilities

 2,141     2,158     2,192  

Post-employment benefit obligations

 2,488     2,252     2,105  

Other non-current liabilities

 1,245     1,264     1,277  

Total non-current liabilities

 23,307     23,431     22,146  

Total liabilities

 34,516     34,656     32,254  

EQUITY

 

 

 

 

 

 

 

 

Equity attributable to BCE shareholders

                

Preferred shares

 4,004     4,004     4,004  

Common shares

 20,062     20,023     18,370  

Contributed surplus

 1,145     1,137     1,160  

Accumulated other comprehensive income

 7     37     46  

Deficit

 (6,466 )   (6,324 )   (6,040 )

Total equity attributable to BCE shareholders

 18,752     18,877     17,540  

Non-controlling interest

 324     316     314  

Total equity

 19,076     19,193     17,854  

Total liabilities and equity

 53,592     53,849     50,108  

Number of common shares outstanding (millions)

 900.4     899.5     870.7  

 

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 11

 

BCE (2)
Consolidated Cash Flow Data

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

 Q2
2017		   Q2
2016		     $ change     YTD
2017		   YTD
2016		     $ change  

Net earnings

 811   830     (19 )   1,536   1,588     (52 )

Adjustments to reconcile net earnings to cash flows from operating activities

                              

Severance, acquisition and other costs

 36   57     (21 )   120   99     21  

Depreciation and amortization

 980   869     111     1,887   1,757     130  

Post-employment benefit plans cost

 82   77     5     150   145     5  

Net interest expense

 235   215     20     465   433     32  

Losses (gains) on investments

 -   2     (2 )   12   (14 )   26  

Income taxes

 297   315     (18 )   560   574     (14 )

Contributions to post-employment benefit plans

 (86 ) (80 )   (6 )   (174 ) (170 )   (4 )

Payments under other post-employment benefit plans

 (19 ) (19 )   -     (38 ) (38 )   -  

Severance and other costs paid

 (40 ) (61 )   21     (81 ) (147 )   66  

Interest paid

 (249 ) (221 )   (28 )   (472 ) (442 )   (30 )

Income taxes paid (net of refunds)

 (114 ) (102 )   (12 )   (402 ) (340 )   (62 )

Acquisition and other costs paid

 (21 ) (39 )   18     (104 ) (67 )   (37 )

Net change in operating assets and liabilities

 242   47     195     8   (198 )   206  

Cash flows from operating activities

 2,154   1,890     264     3,467   3,180     287  

Capital expenditures

 (1,042 ) (950 )   (92 )   (1,894 ) (1,802 )   (92 )

Cash dividends paid on preferred shares

 (30 ) (35 )   5     (73 ) (71 )   (2 )

Cash dividends paid by subsidiaries to non-controlling interest

 (9 ) (10 )   1     (21 ) (22 )   1  

Acquisition and other costs paid

 21   39     (18 )   104   67     37  

Free cash flow

 1,094   934     160     1,583   1,352     231  

Business acquisitions

 -   (1 )   1     (1,635 ) (246 )   (1,389 )

Acquisition and other costs paid

 (21 ) (39 )   18     (104 ) (67 )   (37 )

Business dispositions

 -   2     (2 )   -   18     (18 )

Acquisition of spectrum licences

 -   (1 )   1     -   (1 )   1  

Disposition of intangibles and other assets

 323   -     323     323   -     323  

Other investing activities

 (5 ) (14 )   9     (14 ) 21     (35 )

Increase in notes payable and bank advances

 127   173     (46 )   435   898     (463 )

(Reduction) increase in securitized trade receivables

 (360 ) -     (360 )   (10 ) -     (10 )

Issue of long-term debt

 -   -     -     1,496   747     749  

Repayment of long-term debt

 (472 ) (270 )   (202 )   (1,076 ) (1,580 )   504  

Issue of common shares

 41   19     22     89   92     (3 )

Repurchase of shares for settlement of share-based payments

 (45 ) (11 )   (34 )   (141 ) (79 )   (62 )

Cash dividends paid on common shares

 (626 ) (592 )   (34 )   (1,220 ) (1,118 )   (102 )

Other financing activities

 (9 ) (8 )   (1 )   (22 ) (35 )   13  

 

(1,047 ) (742 )   (305 )   (1,879 ) (1,350 )   (529 )

Net increase (decrease) in cash and cash equivalents

 47   192     (145 )   (296 ) 2     (298 )

Cash and cash equivalents at beginning of period

 510   423     87     853   613     240  

Cash and cash equivalents at end of period

 557   615     (58 )   557   615     (58 )

 

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 12

 

 

BCE
Consolidated Cash Flow Data - Historical Trend

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

 YTD
2017		     Q2 17   Q1 17     TOTAL
2016		     Q4 16   Q3 16   Q2 16   Q1 16  

Net earnings

 1,536     811   725     3,087     699   800   830   758  

Adjustments to reconcile net earnings to cash flows from operating activities

                                      

Severance, acquisition and other costs

 120     36   84     135     11   25   57   42  

Depreciation and amortization

 1,887     980   907     3,508     884   867   869   888  

Post-employment benefit plans cost

 150     82   68     305     80   80   77   68  

Net interest expense

 465     235   230     875     220   222   215   218  

Losses (gains) on investments

 12     -   12     (58 )   (10 ) (34 ) 2   (16 )

Income taxes

 560     297   263     1,110     252   284   315   259  

Contributions to post-employment benefit plans

 (174 )   (86 ) (88 )   (725 )   (477 ) (78 ) (80 ) (90 )

Payments under other post-employment benefit plans

 (38 )   (19 ) (19 )   (76 )   (21 ) (17 ) (19 ) (19 )

Severance and other costs paid

 (81 )   (40 ) (41 )   (231 )   (36 ) (48 ) (61 ) (86 )

Interest paid

 (472 )   (249 ) (223 )   (882 )   (221 ) (219 ) (221 ) (221 )

Income taxes paid (net of refunds)

 (402 )   (114 ) (288 )   (565 )   (102 ) (123 ) (102 ) (238 )

Acquisition and other costs paid

 (104 )   (21 ) (83 )   (126 )   (28 ) (31 ) (39 ) (28 )

Net change in operating assets and liabilities

 8     242   (234 )   286     269   215   47   (245 )

Cash flows from operating activities

 3,467     2,154   1,313     6,643     1,520   1,943   1,890   1,290  

Capital expenditures

 (1,894 )   (1,042 ) (852 )   (3,771 )   (993 ) (976 ) (950 ) (852 )

Cash dividends paid on preferred shares

 (73 )   (30 ) (43 )   (126 )   (21 ) (34 ) (35 ) (36 )

Cash dividends paid by subsidiaries to non-controlling interest

 (21 )   (9 ) (12 )   (46 )   (11 ) (13 ) (10 ) (12 )

Acquisition and other costs paid

 104     21   83     126     28   31   39   28  

Voluntary defined benefit pension plan contribution

 -     -   -     400     400   -   -   -  

Free cash flow

 1,583     1,094   489     3,226     923   951   934   418  

Business acquisitions

 (1,635 )   -   (1,635 )   (404 )   (158 ) -   (1 ) (245 )

Acquisition and other costs paid

 (104 )   (21 ) (83 )   (126 )   (28 ) (31 ) (39 ) (28 )

Voluntary defined benefit pension plan contribution

 -     -   -     (400 )   (400 ) -   -   -  

Business dispositions

 -     -   -     18     (2 ) 2   2   16  

Decrease in investments

 -     -   -     107     85   22   -   -  

Acquisition of spectrum licences

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

Loan to related party

 -     -   -     (517 )   (7 ) (510 ) -   -  

Disposition of intangibles and other assets

 323     323   -     -     -   -   -   -  

Other investing activities

 (14 )   (5 ) (9 )   (16 )   (16 ) (21 ) (14 ) 35  

Increase in notes payable and bank advances

 435     127   308     991     89   4   173   725  

(Reduction) increase in securitized trade receivables

 (10 )   (360 ) 350     -     (305 ) 305   -   -  

Issue of long-term debt

 1,496     -   1,496     2,244     -   1,497   -   747  

Repayment of long-term debt

 (1,076 )   (472 ) (604 )   (2,516 )   (124 ) (812 ) (270 ) (1,310 )

Issue of common shares

 89     41   48     99     1   6   19   73  

Repurchase of shares for settlement of share-based payments

 (141 )   (45 ) (96 )   (106 )   (12 ) (15 ) (11 ) (68 )

Cash dividends paid on common shares

 (1,220 )   (626 ) (594 )   (2,305 )   (593 ) (594 ) (592 ) (526 )

Other financing activities

 (22 )   (9 ) (13 )   (54 )   7   (26 ) (8 ) (27 )

 

(1,879 )   (1,047 ) (832 )   (2,986 )   (1,463 ) (173 ) (742 ) (608 )

Net (decrease) increase in cash and cash equivalents

 (296 )   47   (343 )   240     (540 ) 778   192   (190 )

Cash and cash equivalents at beginning of period

 853     510   853     613     1,393   615   423   613  

Cash and cash equivalents at end of period

 557     557   510     853     853   1,393   615   423  

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 13

 

Accompanying Notes

(1) We report our results in three segments: Bell Wireless, Bell Wireline and Bell Media. Our reporting structure reflects how we manage our business and how we classify our results for planning and measuring performance.

Throughout this report, we, us, our, the company and BCE mean, as the context may require, either BCE Inc. or, collectively, BCE Inc., Bell Canada, their subsidiaries, joint arrangements and associates. Bell means, as the context may require, either Bell Canada or, collectively, Bell Canada, its subsidiaries, joint arrangements and associates. MTS means, as the context may require, until March 17, 2017, either Manitoba Telecom Services Inc. or, collectively, Manitoba Telecom Services Inc. and its subsidiaries and Bell MTS means, from March 17, 2017, the combined operations of MTS and Bell Canada in Manitoba.

 
(2) On March 17, 2017, BCE acquired all of the issued and outstanding common shares of MTS. Bell MTS offers wireless, Internet, TV, phone services, security systems and information solutions including unified cloud and managed services to residential and business customers in Manitoba. The results from the acquired MTS operations are included in our Bell Wireline and Wireless segments. For further details see note 3, Business acquisitions and dispositions, of the Q2 2017 financial statements.

 
(3) Non-GAAP Financial Measures

In Q1 2017, we updated our definition of adjusted net earnings and adjusted EPS to also exclude impairment charges as they may affect the comparability of our financial results and could potentially distort the analysis of trends in business performance.

Adjusted EBITDA and adjusted EBITDA margin

The terms adjusted EBITDA and adjusted EBITDA margin do not have any standardized meaning under International Financial Reporting Standards (IFRS). Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

We define adjusted EBITDA as operating revenues less operating costs (including post-employment benefit plans service cost) as shown in BCE’s consolidated income statements. Adjusted EBITDA for BCE’s segments is the same as segment profit as reported in BCE’s consolidated financial statements. We define adjusted EBITDA margin as adjusted EBITDA divided by operating revenues.

We use adjusted EBITDA and adjusted EBITDA margin to evaluate the performance of our businesses as they reflect their ongoing profitability. We believe that certain investors and analysts use adjusted 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. We believe that certain investors and analysts also use adjusted EBITDA and adjusted EBITDA margin to evaluate the performance of our businesses. Adjusted EBITDA also is one component in the determination of short-term incentive compensation for all management employees.

Adjusted EBITDA and adjusted EBITDA margin have no directly comparable IFRS financial measure. Alternatively, adjusted EBITDA 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 under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers.

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 14

 

  We define adjusted net earnings as net earnings attributable to common shareholders before severance, acquisition and other costs, net losses (gains) on investments, impairment charges, and early debt redemption costs. We define adjusted EPS as adjusted net earnings per BCE common share.

We use adjusted net earnings and adjusted EPS, and we believe that certain investors and analysts use these measures, among other ones, to assess the performance of our businesses without the effects of severance, acquisition and other costs, net losses (gains) on investments, impairment charges, and early debt redemption costs, 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, as reconciled in this document.

Free cash flow

The term free cash flow does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.

We define free cash flow as cash flows from operating activities, excluding acquisition and other costs paid (which include significant litigation costs) and voluntary pension funding, less capital expenditures, preferred share dividends and dividends paid by subsidiaries to non-controlling interest. We exclude acquisition and other costs paid and voluntary pension funding 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.

We consider free cash flow to be an important indicator of the financial strength and performance of our businesses because it shows how much cash is available to pay dividends, repay debt and reinvest in our company.

We believe that certain investors and analysts use free cash flow to value a business and its underlying assets and to evaluate the financial strength and performance of our businesses.

The most comparable IFRS financial measure is cash flows from operating activities, as reconciled in this document.

Net debt

The term net debt does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.

We define net debt as debt due within one year plus long-term debt and 50% of preferred shares, less cash and cash equivalents, as shown in BCE’s consolidated statements of financial position. We include 50% of outstanding preferred shares in our net debt as it is consistent with the treatment by certain credit rating agencies.

We consider net debt to be an important indicator of the company’s financial leverage because it represents the amount of debt that is not covered by available cash and cash equivalents. We believe that certain investors and analysts use net debt to determine a company’s financial leverage.

Net debt has no directly comparable IFRS financial measure, but rather is calculated using several asset and liability categories from the statements of financial position, as shown in this document.

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 15

 

  Net debt leverage ratio

The net debt leverage ratio does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We use, and believe that certain investors and analysts use, the net debt leverage ratio as a measure of financial leverage.

The net debt leverage ratio represents net debt divided by adjusted EBITDA. For the purposes of calculating our net debt leverage ratio, adjusted EBITDA is twelve-month trailing adjusted EBITDA.

Adjusted EBITDA to net interest expense ratio

The ratio of adjusted EBITDA to net interest expense does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We use, and believe that certain investors and analysts use, the adjusted EBITDA to net interest expense ratio as a measure of financial health of the company.

The adjusted EBITDA to net interest expense ratio represents adjusted EBITDA divided by net interest expense. For the purposes of calculating our adjusted EBITDA to net interest expense ratio, adjusted EBITDA is twelve-month trailing adjusted EBITDA. Net interest expense is twelve-month trailing net interest expense as shown in our statements of cash flows, plus 50% of declared preferred share dividends as shown in our income statements.

 
(4) Key performance indicators (KPIs)

In addition to the non-GAAP financial measures described previously, we use a number of KPIs to measure the success of our strategic imperatives. These KPIs are not accounting measures and may not be comparable to similar measures presented by other issuers.

Average revenue per user (ARPU) or subscriber is a measure used to track our recurring revenue streams. Wireless blended ARPU is calculated by dividing certain service revenues by the average subscriber base for the specified period and is expressed as a dollar unit per month.

Capital intensity is capital expenditures divided by operating revenues.

Churn is the rate at which existing subscribers cancel their services. It is a measure of our ability to retain our customers. Wireless churn is calculated by dividing the number of deactivations during a given period by the average number of subscribers in the base for the specified period and is expressed as a percentage per month.

Wireless subscriber unit is comprised of an active revenue-generating unit (e.g. mobile device, tablet or wireless Internet products), with a unique identifier (typically International Mobile Equipment Identity (IMEI) number), that has access to our wireless networks. We report wireless subscriber units in two categories: postpaid and prepaid. Prepaid subscriber units are considered active for a period of 120 days following the expiry of the subscriber’s prepaid balance.

Wireline subscriber unit consists of an active revenue-generating unit with access to our services, including Internet, satellite TV, IPTV, and/or NAS. A subscriber is included in our subscriber base when the service has been installed and is operational at the customer premise and a billing relationship has been established.

  • Internet, IPTV and satellite TV subscribers have access to stand-alone services, and are primarily represented by a dwelling unit
  • NAS subscribers are based on a line count and are represented by a unique telephone number

 

BCE Supplementary Financial Information - Second Quarter 2017 Page 16