EX-99.2 3 d916938dex992.htm SUPPLEMENTARY FINANCIAL INFORMATION - FIRST QUARTER 2020 SUPPLEMENTARY FINANCIAL INFORMATION - FIRST QUARTER 2020

Exhibit 99.2

 

   LOGO
 Q1   

Supplementary

Financial Information

First Quarter 2020

BCE Investor Relations

Thane Fotopoulos

514-870-4619

thane.fotopoulos@bell.ca

   LOGO


BCE (1) (2)

Consolidated Operational Data

 

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

Q1

2020

   

Q1

2019

        $ change     % change  
   

Operating revenues

            

Service

     5,058       5,045         13       0.3%  

Product

     622       689         (67     (9.7%)  

Total operating revenues

     5,680       5,734         (54     (0.9%)  

Operating costs (A)

     (3,163     (3,256       93       2.9%  

Post-employment benefit plans service cost

     (75     (69       (6     (8.7%)  

Adjusted EBITDA (3)

     2,442       2,409         33       1.4%  
   

Adjusted EBITDA margin (3)

     43.0%       42.0%           1.0 pts  

Severance, acquisition and other costs

     (16     (24       8       33.3%  

Depreciation

     (868     (882       14       1.6%  

Amortization

     (234     (221       (13     (5.9%)  

Finance costs

            

Interest expense

     (279     (283       4       1.4%  

Interest on post-employment benefit obligations

     (12     (16       4       25.0%  

Other (expense) income

     (55     101         (156     n.m.  

Income taxes

     (245     (293       48       16.4%  

Net earnings

     733       791         (58     (7.3%)  

Net earnings attributable to:

            

Common shareholders

     680       740         (60     (8.1%)  

Preferred shareholders

     38       38         -       -  

Non-controlling interest

     15       13         2       15.4%  

Net earnings

     733       791         (58     (7.3%)  
   

Net earnings per common share - basic and diluted

   $ 0.75     $ 0.82       $ (0.07     (8.5%)  
   

Dividends per common share

   $ 0.8325     $ 0.7925       $ 0.04       5.0%  
   

Weighted average number of common shares outstanding - basic (millions)

     904.1       898.4        

Weighted average number of common shares outstanding - diluted (millions)

     904.5       898.7        

Number of common shares outstanding (millions)

     904.3       898.8                    
   

Adjusted net earnings and EPS

                                  

Net earnings attributable to common shareholders

     680       740         (60     (8.1%)  
   

Severance, acquisition and other costs

     12       18         (6     (33.3%)  
   

Net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans

     20       (73       93       n.m.  

Net (gains) losses on investments

     (9     4         (13     n.m.  

Early debt redemption costs

     12       -         12       n.m.  

Impairment charges

     5       3         2       66.7%  
   

Adjusted net earnings (3)

     720       692         28       4.0%  
   

Impact on net earnings per share

   $ 0.05     $ (0.05     $ 0.10       n.m.  
   

Adjusted EPS (3)

   $ 0.80     $ 0.77       $ 0.03       3.9%  

n.m. : not meaningful

(A) Excludes post-employment benefit plans service cost

 

BCE Supplementary Financial Information - First Quarter 2020 Page 2


BCE

Consolidated Operational Data - Historical Trend

 

(In millions of Canadian dollars, except share amounts) (unaudited)    Q1 20          TOTAL
2019
         Q4 19     Q3 19     Q2 19     Q1 19  

Operating revenues

                  

Service

     5,058          20,737          5,276       5,185       5,231       5,045  

Product

     622          3,227          1,040       799       699       689  

Total operating revenues

     5,680          23,964          6,316       5,984       5,930       5,734  

Operating costs (A)

     (3,163        (13,611        (3,748     (3,330     (3,277     (3,256

Post-employment benefit plans service cost

     (75        (247        (60     (60     (58     (69

Adjusted EBITDA

     2,442          10,106          2,508       2,594       2,595       2,409  

Adjusted EBITDA margin

     43.0%          42.2%          39.7%       43.3%       43.8%       42.0%  

Severance, acquisition and other costs

     (16        (114        (28     (23     (39     (24

Depreciation

     (868        (3,496        (865     (861     (888     (882

Amortization

     (234        (902        (228     (230     (223     (221

Finance costs

                  

Interest expense

     (279        (1,132        (286     (282     (281     (283

Interest on post-employment benefit obligations

     (12        (63        (16     (16     (15     (16

Other (expense) income

     (55        (13        (119     61       (56     101  

Income taxes

     (245        (1,133        (243     (321     (276     (293

Net earnings

     733          3,253          723       922       817       791  

Net earnings attributable to:

                  

Common shareholders

     680          3,040          672       867       761       740  

Preferred shareholders

     38          151          38       37       38       38  

Non-controlling interest

     15          62          13       18       18       13  

Net earnings

     733          3,253          723       922       817       791  

Net earnings per common share - basic and diluted

   $ 0.75        $ 3.37        $ 0.74     $ 0.96     $ 0.85     $ 0.82  

Dividends per common share

   $  0.8325        $ 3.1700        $ 0.7925     $ 0.7925     $ 0.7925     $ 0.7925  

Weighted average number of common shares outstanding - basic (millions)

     904.1          900.8          903.8       901.4       899.5       898.4  

Weighted average number of common shares outstanding - diluted (millions)

     904.5          901.4          904.8       902.2       900.3       898.7  

Number of common shares outstanding (millions)

     904.3          903.9          903.9       903.7       900.1       898.8  

Adjusted net earnings and EPS

                                                      

Net earnings attributable to common shareholders

     680          3,040          672       867       761       740  

Severance, acquisition and other costs

     12          83          20       17       28       18  

Net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans

     20          (101        45       (64     (9     (73

Net (gains) losses on investments

     (9        44          (13     -       53       4  

Early debt redemption costs

     12          13          -       -       13       -    

Impairment charges

     5          74          70       -       1       3  

Adjusted net earnings

     720          3,153          794       820       847       692  

Impact on net earnings per share

   $ 0.05        $ 0.13        $ 0.14     $ (0.05   $ 0.09     $ (0.05

Adjusted EPS

   $ 0.80        $ 3.50        $ 0.88     $ 0.91     $ 0.94     $ 0.77  

(A) Excludes post-employment benefit plans service cost    

 

BCE Supplementary Financial Information - First Quarter 2020 Page 3


BCE (1) (2)

Segmented Data

 

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    Q1
2020
    Q1
2019
         $ change     % change  
             

Operating revenues

             

Bell Wireless

     2,035       2,077          (42     (2.0%)  

Bell Wireline

     3,076       3,097          (21     (0.7%)  

Bell Media

     752       745          7       0.9%  

Inter-segment eliminations

     (183     (185        2       1.1%  

Total

     5,680       5,734          (54     (0.9%)  
             

Operating costs

             

Bell Wireless

     (1,107     (1,185        78       6.6%  

Bell Wireline

     (1,717     (1,745        28       1.6%  

Bell Media

     (597     (580        (17     (2.9%)  

Inter-segment eliminations

     183       185          (2     (1.1%)  

Total

     (3,238     (3,325        87       2.6%  
             

Adjusted EBITDA

             

Bell Wireless

     928       892          36       4.0%  

Margin

     45.6%       42.9%            2.7 pts  

Bell Wireline

     1,359       1,352          7       0.5%  

Margin

     44.2%       43.7%            0.5 pts  

Bell Media

     155       165          (10     (6.1%)  

Margin

     20.6%       22.1%                  (1.5) pts  

Total

     2,442       2,409          33       1.4%  

Margin

     43.0%       42.0%            1.0 pts  
             

Capital expenditures

             

Bell Wireless

     130       148          18       12.2%  

Capital intensity (4)

     6.4%       7.1%            0.7 pts  

Bell Wireline

     628       677          49       7.2%  

Capital intensity

     20.4%       21.9%            1.5 pts  

Bell Media

     25       25          -       -  

Capital intensity

     3.3%       3.4%                  0.1 pts  

Total

     783       850          67       7.9%  

Capital intensity

     13.8%       14.8%            1.0 pts  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 4


BCE

Segmented Data - Historical Trend

 

                                                                                               
         TOTAL                  
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    Q1 20       2019              Q4 19              Q3 19          Q2 19              Q1 19  

 

   

 

 

 

 

 

 

 

    

            

Operating revenues

            

Bell Wireless

     2,035       9,001       2,454       2,310       2,160       2,077  

Bell Wireline

     3,076       12,488       3,176       3,101       3,114       3,097  

Bell Media

     752       3,217       879       751       842       745  

Inter-segment eliminations

     (183     (742     (193     (178     (186     (185
  

 

 

 

 

 

 

 

 

 

 

 

Total

                 5,680                 23,964               6,316       5,984       5,930       5,734  
  

 

 

 

 

 

 

 

 

 

 

 

    

            

Operating costs

            

Bell Wireless

     (1,107     (5,210     (1,523     (1,310     (1,192     (1,185

Bell Wireline

     (1,717     (7,023     (1,804     (1,733     (1,741     (1,745

Bell Media

     (597     (2,367     (674     (525     (588     (580

Inter-segment eliminations

     183       742       193       178       186       185  
  

 

 

 

 

 

 

 

 

 

 

 

Total

     (3,238     (13,858     (3,808     (3,390     (3,335     (3,325
  

 

 

 

 

 

 

 

 

 

 

 

    

            

Adjusted EBITDA

            

Bell Wireless

     928       3,791       931       1,000       968       892  

Margin

     45.6%       42.1%       37.9%       43.3%       44.8%       42.9%  

Bell Wireline

     1,359       5,465       1,372       1,368       1,373       1,352  

Margin

     44.2%       43.8%       43.2%       44.1%       44.1%       43.7%  

Bell Media

     155       850       205       226       254       165  

Margin

     20.6%       26.4%       23.3%       30.1%       30.2%       22.1%  
  

 

 

 

 

 

 

 

 

 

 

 

Total

     2,442       10,106       2,508       2,594       2,595       2,409  
  

 

 

 

 

 

 

 

 

 

 

 

Margin

     43.0%       42.2%       39.7%       43.3%       43.8%       42.0%  

    

            

Capital expenditures

            

Bell Wireless

     130       671       203       161       159       148  

Capital intensity

     6.4%       7.5%       8.3%       7.0%       7.4%       7.1%  

Bell Wireline

     628       3,209       913       830       789       677  

Capital intensity

     20.4%       25.7%       28.7%       26.8%       25.3%       21.9%  

Bell Media

     25       108       37       22       24       25  

Capital intensity

     3.3%       3.4%       4.2%       2.9%       2.9%       3.4%  
  

 

 

 

 

 

 

 

 

 

 

 

Total

     783       3,988       1,153       1,013       972       850  
  

 

 

 

 

 

 

 

 

 

 

 

Capital intensity

     13.8%       16.6%       18.3%       16.9%       16.4%       14.8%  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 5


Bell Wireless (1) (2)

 

     Q1     Q1             
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    2020     2019           % change  

Bell Wireless

           

Operating revenues

           

External service revenues

     1,535       1,528          0.5%  

Inter-segment service revenues

     12       12          -  

Total operating service revenues

     1,547       1,540          0.5%  

External product revenues

     487       536          (9.1%)  

Inter-segment product revenues

     1       1          -  

Total operating product revenues

     488       537          (9.1%)  

Total external revenues

     2,022       2,064          (2.0%)  

Total operating revenues

     2,035       2,077          (2.0%)  

Operating costs

     (1,107     (1,185        6.6%  

Adjusted EBITDA

     928       892          4.0%  

Adjusted EBITDA margin (Total operating revenues)

     45.6%       42.9%          2.7 pts  
 

Capital expenditures

     130       148          12.2%  

Capital intensity

     6.4%       7.1%          0.7 pts  

Wireless subscriber gross activations (4)

     406,419       410,301          (0.9%)  

Postpaid

     282,412       320,558          (11.9%)  

Prepaid

     124,007       89,743          38.2%  

Wireless subscriber net activations (losses)

     19,595       38,282          (48.8%)  

Postpaid

     23,650       50,204          (52.9%)  

Prepaid

     (4,055     (11,922        66.0%  

Wireless subscribers end of period (EOP)

     9,977,557       9,480,835          5.2%  

Postpaid

     9,183,590       8,808,189          4.3%  

Prepaid

     793,967       672,646          18.0%  

Blended average billing per user (ABPU)($/month) (4)(A)

     65.53       67.35          (2.7%)  

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

     1.30%       1.31%          0.01 pts  

Postpaid

     0.97%       1.07%          0.10 pts  

Prepaid

     5.03%       4.49%          (0.54) pts  

 

(A)

In Q1 2020, we updated our definition of ABPU to include monthly billings related to device financing receivables owing from customers on contract. Consequently, we restated previously reported 2019 ABPU for comparability. See Note 4, Key performance indicators (KPIs), for the definition of ABPU.

 

BCE Supplementary Financial Information - First Quarter 2020 Page 6


Bell Wireless - Historical Trend

 

                TOTAL                               
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    Q1 20          2019          Q4 19     Q3 19     Q2 19     Q1 19  

Bell Wireless

                        

Operating revenues

                  

External service revenues

     1,535          6,323          1,582       1,633       1,580       1,528  

Inter-segment service revenues

     12          49          12       13       12       12  

Total operating service revenues

     1,547          6,372          1,594       1,646       1,592       1,540  

External product revenues

     487          2,623          857       664       566       536  

Inter-segment product revenues

     1          6          3       -       2       1  

Total operating product revenues

     488          2,629          860       664       568       537  

Total external revenues

     2,022          8,946          2,439       2,297       2,146       2,064  

Total operating revenues

     2,035          9,001          2,454       2,310       2,160       2,077  

Operating costs

     (1,107        (5,210        (1,523     (1,310     (1,192     (1,185

Adjusted EBITDA

     928          3,791          931       1,000       968       892  

Adjusted EBITDA margin (Total operating revenues)

     45.6%          42.1%          37.9%       43.3%       44.8%       42.9%  

Capital expenditures

     130          671          203       161       159       148  

Capital intensity

     6.4%          7.5%          8.3%       7.0%       7.4%       7.1%  

Wireless subscriber gross activations

     406,419          2,117,517          596,019       593,547       517,650       410,301  

Postpaid

     282,412          1,568,729          455,111       417,966       375,094       320,558  

Prepaid

     124,007          548,788          140,908       175,581       142,556       89,743  

Wireless subscriber net activations (losses)

     19,595          515,409          123,582       204,067       149,478       38,282  

Postpaid

     23,650          401,955          121,599       127,172       102,980       50,204  

Prepaid

     (4,055        113,454          1,983       76,895       46,498       (11,922

Wireless subscribers EOP

     9,977,557          9,957,962          9,957,962       9,834,380       9,630,313       9,480,835  

Postpaid

     9,183,590          9,159,940          9,159,940       9,038,341       8,911,169       8,808,189  

Prepaid

     793,967          798,022          798,022       796,039       719,144       672,646  

Blended ABPU ($/month)(A)

     65.53          68.36          67.35       69.94       68.79       67.35  

Churn (%)(average per month)

     1.30%          1.39%          1.60%       1.34%       1.29%       1.31%  

Postpaid

     0.97%          1.13%          1.28%       1.12%       1.06%       1.07%  

Prepaid

     5.03%          4.44%          5.14%       3.89%       4.20%       4.49%  

 

(A)

In Q1 2020, we updated our definition of ABPU to include monthly billings related to device financing receivables owing from customers on contract. Consequently, we restated previously reported 2019 ABPU for comparability. See Note 4, Key performance indicators (KPIs), for the definition of ABPU.

 

BCE Supplementary Financial Information - First Quarter 2020 Page 7


Bell Wireline (1) (2)

 

     Q1     Q1             
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    2020     2019          % change  

Bell Wireline

              

Operating revenues

           

Data

     1,931       1,911          1.0%  

Voice

     872       907          (3.9%)  

Other services

     62       59          5.1%  

Total external service revenues

     2,865       2,877          (0.4%)  

Inter-segment service revenues

     76       67          13.4%  

Total operating service revenues

     2,941       2,944          (0.1%)  

Data

     123       142          (13.4%)  

Equipment and other

     12       11          9.1%  

Total external product revenues

     135       153          (11.8%)  

Inter-segment product revenues

     -       -          -  

Total operating product revenues

     135       153          (11.8%)  

Total external revenues

     3,000       3,030          (1.0%)  

Total operating revenues

     3,076       3,097          (0.7%)  

Operating costs

     (1,717     (1,745        1.6%  

Adjusted EBITDA

     1,359       1,352          0.5%  

Adjusted EBITDA margin

     44.2%       43.7%          0.5 pts  
 

Capital expenditures

     628       677          7.2%  

Capital intensity

     20.4%       21.9%          1.5 pts  

Retail high-speed Internet subscribers (4)

           

Retail net activations

     22,595       22,671          (0.3%)  

Retail subscribers EOP

     3,578,196       3,442,411          3.9%  

Retail TV subscribers (4)

           

Retail net subscriber (losses) activations

     (18,555     (1,560        n.m.  

Internet protocol television (IPTV)

     2,852       20,916          (86.4%)  

Satellite

     (21,407     (22,476        4.8%  

Total retail subscribers EOP

     2,753,909       2,764,851          (0.4%)  

IPTV

     1,770,034       1,696,622          4.3%  

Satellite

     983,875       1,068,229          (7.9%)  

Retail residential network access services (NAS) (4)

           

Retail residential NAS lines net losses

     (61,595     (66,779        7.8%  

Retail residential NAS lines

     2,635,888       2,894,029          (8.9%)  

n.m. : not meaningful

 

BCE Supplementary Financial Information - First Quarter 2020 Page 8


Bell Wireline - Historical Trend

 

                  TOTAL                                 
(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    Q1 20             2019             Q4 19     Q3 19     Q2 19     Q1 19  

Bell Wireline

                  

Operating revenues

                  

Data

     1,931          7,788          1,966       1,956       1,955       1,911  

Voice

     872          3,564          879       881       897       907  

Other services

     62          251          69       61       62       59  

Total external service revenues

     2,865          11,603          2,914       2,898       2,914       2,877  

Inter-segment service revenues

     76          281          79       68       67       67  

Total operating service revenues

     2,941          11,884          2,993       2,966       2,981       2,944  

Data

     123          556          166       125       123       142  

Equipment and other

     12          48          17       10       10       11  

Total external product revenues

     135          604          183       135       133       153  

Inter-segment product revenues

     -          -          -       -       -       -  

Total operating product revenues

     135          604          183       135       133       153  

Total external revenues

     3,000          12,207          3,097       3,033       3,047       3,030  

Total operating revenues

     3,076          12,488          3,176       3,101       3,114       3,097  

Operating costs

     (1,717        (7,023        (1,804     (1,733     (1,741     (1,745

Adjusted EBITDA

     1,359          5,465          1,372       1,368       1,373       1,352  

Adjusted EBITDA margin

     44.2%          43.8%          43.2%       44.1%       44.1%       43.7%  

Capital expenditures

     628          3,209          913       830       789       677  

Capital intensity

     20.4%          25.7%          28.7%       26.8%       25.3%       21.9%  

Retail high-speed Internet subscribers

                  

Retail net activations

     22,595          135,861          35,639       58,137       19,414       22,671  

Retail subscribers EOP

     3,578,196          3,555,601          3,555,601       3,519,962       3,461,825       3,442,411  

Retail TV subscribers

                  

Retail net subscriber (losses) activations

     (18,555        6,053          421       4,842       2,350       (1,560

IPTV

     2,852          91,476          22,039       31,746       16,775       20,916  

Satellite

     (21,407        (85,423        (21,618     (26,904     (14,425     (22,476

Total retail subscribers EOP

     2,753,909          2,772,464          2,772,464       2,772,043       2,767,201       2,764,851  

IPTV

     1,770,034          1,767,182          1,767,182       1,745,143       1,713,397       1,696,622  

Satellite

     983,875          1,005,282          1,005,282       1,026,900       1,053,804       1,068,229  

Retail residential network access services (NAS)

                  

Retail residential NAS lines net losses

     (61,595        (263,325        (58,110     (65,656     (72,780     (66,779

Retail residential NAS lines

     2,635,888          2,697,483          2,697,483       2,755,593       2,821,249       2,894,029  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 9


BCE

Net debt and other information

 

BCE - Net debt and preferred shares

                                                

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

              
               March 31       December 31  
               2020       2019  
     

Debt due within one year

             4,209       3,881   

Long-term debt

             25,513       22,415   

50% of preferred shares

             2,002       2,002   

Cash and cash equivalents

             (2,679     (145)  

Net debt (3)

             29,045       28,153   
     

Net debt leverage ratio (3)

             2.86       2.79   

Adjusted EBITDA /net interest expense ratio (3)

             8.61       8.54   
                                                  
            

Cash flow information

                                                

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

         Q1       Q1        
                  2020     2019     $ change     % change  

Free cash flow (FCF) (3)

                

Cash flows from operating activities

         1,451       1,516       (65     (4.3%)  

Capital expenditures

         (783     (850     67       7.9%  

Cash dividends paid on preferred shares

         (36     (26     (10     (38.5%)  

Cash dividends paid by subsidiaries to non-controlling interest

         (14     (27     13       48.1%  

Acquisition and other costs paid

         9       29       (20     (69.0%)  

FCF

         627       642       (15     (2.3%)  
                                                  
            

Cash flow information - Historical trend

                                                

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

     Q1       TOTAL       Q4       Q3       Q2       Q1  
       2020       2019       2019       2019       2019       2019  

FCF

                

Cash flows from operating activities

     1,451       7,958       2,091       2,258       2,093       1,516   

Capital expenditures

     (783     (3,988     (1,153     (1,013     (972     (850)  

Cash dividends paid on preferred shares

     (36     (147     (37     (47     (37     (26)  

Cash dividends paid by subsidiaries to non-controlling interest

     (14     (65     (14     (12     (12     (27)  

Acquisition and other costs paid

     9       60       7       3       21       29   

FCF

     627       3,818       894       1,189       1,093       642   
                                                  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 10


BCE

Consolidated Statements of Financial Position

 

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

March 31

2020

       

December 31

2019

 

ASSETS

      

Current assets

      

Cash

     943         141  

Cash equivalents

     1,736         4  

Trade and other receivables

     2,990         3,038  

Inventory

     487         427  

Contract assets

     1,037         1,111  

Contract costs

     416         415  

Prepaid expenses

     280         194  

Other current assets

     419         190  

Total current assets

     8,308         5,520  

Non-current assets

      

Contract assets

     452         533  

Contract costs

     363         368  

Property, plant and equipment

     27,432         27,636  

Intangible assets

     13,513         13,352  

Deferred tax assets

     90         98  

Investments in associates and joint ventures

     730         698  

Other non-current assets

     3,960         1,274  

Goodwill

     10,667         10,667  

Total non-current assets

     57,207         54,626  

Total assets

     65,515         60,146  

LIABILITIES

      

Current liabilities

      

Trade payables and other liabilities

     3,335         3,954  

Contract liabilities

     725         683  

Interest payable

     192         227  

Dividends payable

     767         729  

Current tax liabilities

     186         303  

Debt due within one year

     4,209         3,881  

Total current liabilities

     9,414         9,777  

Non-current liabilities

      

Contract liabilities

     211         207  

Long-term debt

     25,513         22,415  

Deferred tax liabilities

     4,444         3,561  

Post-employment benefit obligations

     1,603         1,907  

Other non-current liabilities

     906         871  

Total non-current liabilities

     32,677         28,961  

Total liabilities

     42,091         38,738  

EQUITY

      

Equity attributable to BCE shareholders

      

Preferred shares

     4,004         4,004  

Common shares

     20,386         20,363  

Contributed surplus

     1,156         1,178  

Accumulated other comprehensive income

     528         161  

Deficit

     (2,990       (4,632

Total equity attributable to BCE shareholders

     23,084         21,074  

Non-controlling interest

     340         334  

Total equity

     23,424         21,408  

Total liabilities and equity

     65,515         60,146  

Number of common shares outstanding (millions)

     904.3         903.9  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 11


BCE

Consolidated Cash Flow Data

 

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

Q1

2020

   

Q1

2019

        $ change  
 

Net earnings

     733       791         (58

Adjustments to reconcile net earnings to cash flows from operating activities

          

Severance, acquisition and other costs

     16       24         (8

Depreciation and amortization

     1,102       1,103         (1

Post-employment benefit plans cost

     87       85         2  

Net interest expense

     272       278         (6

Losses on investments

     1       4         (3

Income taxes

     245       293         (48

Contributions to post-employment benefit plans

     (79     (81       2  

Payments under other post-employment benefit plans

     (17     (18       1  

Severance and other costs paid

     (35     (66       31  

Interest paid

     (318     (267       (51

Income taxes paid (net of refunds)

     (233     (289       56  

Acquisition and other costs paid

     (9     (29       20  

Net change in operating assets and liabilities

     (314     (312       (2

Cash flows from operating activities

     1,451           1,516         (65

Capital expenditures

     (783     (850       67  

Cash dividends paid on preferred shares

     (36     (26       (10

Cash dividends paid by subsidiaries to non-controlling interest

     (14     (27       13  

Acquisition and other costs paid

     9       29         (20

Free cash flow

     627       642         (15

Acquisition and other costs paid

     (9     (29       20  

Other investing activities

     (7     (24       17  

(Decrease) increase in notes payable

     (230     567         (797

Increase in securitized trade receivables

     400       31         369  

Issue of long-term debt

     3,281       -         3,281  

Repayment of long-term debt

     (711     (204       (507

Issue of common shares

     22       20         2  

Purchase of shares for settlement of share-based payments

     (94     (76       (18

Cash dividends paid on common shares

     (716     (678       (38

Other financing activities

     (29     (6       (23
       1,907       (399       2,306  

Net increase in cash and cash equivalents

     2,534       243             2,291  

Cash and cash equivalents at beginning of period

     145       425         (280

Cash and cash equivalents at end of period

         2,679       668         2,011  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 12


BCE

Consolidated Cash Flow Data - Historical Trend

 

(In millions of Canadian dollars, except where otherwise indicated) (unaudited)    Q1 20         

TOTAL

2019

         Q4 19     Q3 19     Q2 19     Q1 19  

Net earnings

     733          3,253          723       922       817       791  

Adjustments to reconcile net earnings to cash flows from operating activities

                  

Severance, acquisition and other costs

     16          114          28       23       39       24  

Depreciation and amortization

     1,102          4,398          1,093       1,091       1,111       1,103  

Post-employment benefit plans cost

     87          310          76       76       73       85  

Net interest expense

     272          1,108          282       275       273       278  

Losses on investments

     1          (13        (17     -       -       4  

Income taxes

     245          1,133          243       321       276       293  

Contributions to post-employment benefit plans

     (79        (290        (77     (62     (70     (81

Payments under other post-employment benefit plans

     (17        (72        (18     (17     (19     (18

Severance and other costs paid

     (35        (168        (23     (46     (33     (66

Interest paid

     (318        (1,087        (264     (286     (270     (267

Income taxes paid (net of refunds)

     (233        (725        (221     (88     (127     (289

Acquisition and other costs paid

     (9        (60        (7     (3     (21     (29

Net change in operating assets and liabilities

     (314        57          273       52       44       (312

Cash flows from operating activities

     1,451          7,958          2,091       2,258       2,093       1,516  

Capital expenditures

     (783        (3,988        (1,153     (1,013     (972     (850

Cash dividends paid on preferred shares

     (36        (147        (37     (47     (37     (26

Cash dividends paid by subsidiaries to non-controlling interest

     (14        (65        (14     (12     (12     (27

Acquisition and other costs paid

     9          60          7       3       21       29  

Free cash flow

     627          3,818          894       1,189       1,093       642  

Business acquisitions

     -          (51        -       (1     (50     -  

Acquisition and other costs paid

     (9        (60        (7     (3     (21     (29

Other investing activities

     (7        3          (9     4       32       (24

(Decrease) increase in notes payable

     (230        (1,073        (851     (1,066     277       567  

Increase in securitized trade receivables

     400          131          100       -       -       31  

Issue of long-term debt

     3,281          1,954          -       549       1,405       -  

Repayment of long-term debt

     (711        (2,228        (199     (226     (1,599     (204

Issue of common shares

     22          240          15       161       44       20  

Purchase of shares for settlement of share-based payments

     (94        (142        (42     (14     (10     (76

Cash dividends paid on common shares

     (716        (2,819        (716     (713     (712     (678

Other financing activities

     (29        (53        (6     (8     (33     (6
       1,907          (4,098        (1,715     (1,317     (667     (399

Net increase (decrease) increase in cash and cash equivalents

     2,534          (280        (821     (128     426       243  

Cash and cash equivalents at beginning of period

     145          425          966       1,094       668       425  

Cash and cash equivalents at end of period

     2,679          145          145       966       1,094       668  

 

BCE Supplementary Financial Information - First Quarter 2020 Page 13


Accompanying Notes

 

(1)

Our results are reported in three segments: Bell Wireless, Bell Wireline and Bell Media. Our segments reflect how we manage our business and how we classify our operations for planning and measuring performance.

Throughout this report, we, us, our, BCE and the company 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.

 

(2)

To align with changes in how we manage our business and assess performance, the operating results of our public safety land radio network business are now included within our Bell Wireline segment effective January 1, 2020, with prior periods restated for comparative purposes. Previously, these results were included within our Bell Wireless segment. Our public safety land radio network business, which builds and manages land mobile radio networks primarily for the government sector, is now managed by our Bell Business Markets team in order to better serve our customers with end-to-end communications solutions.

 

(3)

Non-GAAP Financial Measures

Adjusted EBITDA and adjusted EBITDA margin

The terms adjusted EBITDA and adjusted EBITDA margin do not have any standardized meaning under 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.

We define adjusted net earnings as net earnings attributable to common shareholders before severance, acquisition and other costs, net mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net losses (gains) on investments, early debt redemption costs and impairment charges, net of tax and non-controlling interest (NCI). We define adjusted EPS as adjusted net earnings per BCE common share.

     

 

BCE Supplementary Financial Information - First Quarter 2020 Page 14


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 mark-to-market losses (gains) on derivatives used to economically hedge equity settled share-based compensation plans, net losses (gains) on investments, early debt redemption costs and impairment charges, net of tax and NCI. 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 NCI. 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 on common shares, 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.

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.

     

 

BCE Supplementary Financial Information - First Quarter 2020 Page 15


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 billing per user (ABPU) or subscriber approximates the average amount billed to customers on a monthly basis, including monthly billings related to device financing receivables owing from customers on contract, which is used to track our recurring billing streams. Wireless blended ABPU is calculated by dividing certain customer billings 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 90 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 retail 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.

 

   

Retail Internet, IPTV and satellite TV subscribers have access to stand-alone services, and are primarily represented by a dwelling unit

   

Retail NAS subscribers are based on a line count and are represented by a unique telephone number

     

 

BCE Supplementary Financial Information - First Quarter 2020 Page 16