EX-2 3 suppq408.htm SUPPLEMENTARY FINANCIAL INFORMATION BCE Q4 Supplementary Financial Information BCE Fourth Quarter 2008

EXHIBIT 2

 

 

BCE Inc. (1)
Consolidated Operational Data

 

  Q4     Q4                   Total       Total                

($ millions, except per share amounts) (unaudited)

  2008     2007       $ change   % change       2008       2007       $ change     % change  

Operating revenues

  4,488     4,518       (30 ) (0.7 %)     17,698       17,752       (54 )   (0.3 %)

Cost of revenue, exclusive of depreciation and amortization

  (1,189 )   (1,144 )     (45 ) (3.9 %)     (4,428 )     (4,095 )     (333 )   (8.1 %)

Selling, general and administrative expenses (A)

  (1,519 )   (1,586 )     67   4.2 %     (6,016 )     (6,253 )     237     3.8 %

Net benefit plans cost

  (40 )   (113 )     73   64.6 %     (250 )     (410 )     160     39.0 %

EBITDA (3)

  1,740     1,675       65   3.9 %     7,004       6,994       10     0.1 %

EBITDA margin (4)

  38.8 %   37.1 %         1.7  pts     39.6 %     39.4 %           0.2  pts

Depreciation

  (683 )   (617 )     (66 ) (10.7 %)     (2,537 )     (2,547 )     10     0.4 %

Amortization of intangible assets

  (187 )   (166 )     (21 ) (12.7 %)     (732 )     (637 )     (95 )   (14.9 %)

Restructuring and other

  (207 )   (146 )     (61 ) (41.8 %)     (871 )     (331 )     (540 )   n.m.  

Operating income

  663     746       (83 ) (11.1 %)     2,864       3,479       (615 )   (17.7 %)

Other (expense) income

  (281 )   2,299       (2,580 ) n.m.       (253 )     2,405       (2,658 )   n.m.  

Interest expense

  (207 )   (211 )     4   1.9 %     (791 )     (859 )     68     7.9 %

Pre-tax earnings from continuing operations

  175     2,834       (2,659 ) (93.8 %)     1,820       5,025       (3,205 )   (63.8 %)

Income taxes

  (84 )   (357 )     273   76.5 %     (469 )     (735 )     266     36.2 %

Non-controlling interest

  (68 )   (65 )     (3 ) (4.6 %)     (320 )     (331 )     11     3.3 %

Earnings from continuing operations

  23     2,412       (2,389 ) (99.0 %)     1,031       3,959       (2,928 )   (74.0 %)

Discontinued operations

  (41 )   (24 )     (17 ) (70.8 %)     (88 )     98       (186 )   n.m.  

Net (loss) earnings

  (18 )   2,388       (2,406 ) n.m.       943       4,057       (3,114 )   (76.8 %)

Dividends on preferred shares

  (30 )   (34 )     4   11.8 %     (124 )     (131 )     7     5.3 %

Net (loss) earnings applicable to common shares

  (48 )   2,354       (2,402 ) n.m.       819       3,926       (3,107 )   (79.1 %)

Net (loss) earnings per common share – basic

                                                     

Continuing operations

$ (0.01 ) $ 2.96     $ (2.97 ) n.m.     $ 1.13   $   4.76     $ (3.63 )   (76.3 %)

Discontinued operations

$ (0.05 ) $ (0.03 )   $ (0.02 ) (66.7 %)   $ (0.11 ) $   0.12     $ (0.23 )   n.m.  

Net earnings

$ (0.06 ) $ 2.93     $ (2.99 ) n.m.     $ 1.02   $   4.88     $ (3.86 )   (79.1 %)

Net (loss) earnings per common share – diluted

                                                     

Continuing operations

$ (0.01 ) $ 2.95     $ (2.96 ) n.m.     $ 1.12   $   4.75     $ (3.63 )   (76.4 %)

Discontinued operations

$ (0.05 ) $ (0.03 )   $ (0.02 ) (66.7 %)   $ (0.11 ) $   0.12     $ (0.23 )   n.m.  

Net earnings

$ (0.06 ) $ 2.92     $ (2.98 ) n.m.     $ 1.01   $   4.87     $ (3.86 )   (79.3 %)

Dividends per common share

$ 0.365   $ 0.365     $ -   0.0 %   $ 0.730   $   1.460     $ (0.730 )   (50.0 %)

Average number of common shares outstanding – basic (millions)

  806.4     805.2                   805.8       804.8                

Average number of common shares outstanding – diluted (millions)

  806.9     808.0                   807.2       806.9                
                                                       

The following items are included in net (loss) earnings:

                                                     

Net (losses) gains on investments

                                                     

Continuing operations

  (346 )   1,883       (2,229 ) n.m.       (358 )     2,125       (2,483 )   n.m.  

Discontinued operations

  (26 )   (13 )     (13 ) n.m.       (62 )     123       (185 )   n.m.  

Restructuring and other

  (117 )   (93 )     (24 ) (25.8 %)     (572 )     (206 )     (366 )   n.m.  

Total

  (489 )   1,777       (2,266 ) n.m.       (992 )     2,042       (3,034 )   n.m.  

Impact on net earnings per share

$ (0.61 ) $ 2.21     $ (2.82 ) n.m.     $ (1.23 ) $   2.54     $ (3.77 )   n.m.  

Adjusted EPS (3)

$ 0.55   $ 0.72     $ (0.17 ) (23.6 %)   $ 2.25   $   2.34     $ (0.09 )   (3.8 %)
                                                       
 
(A) Excludes net benefit plans cost
n.m. : not meaningful

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 2

 

BCE Inc.
Consolidated Operational Data – Historical Trend

($ millions, except per share amounts) (unaudited)

  Total
2008 		      Q4 08     Q3 08     Q2 08     Q1 08       Total
2007 		      Q4 07     Q3 07     Q2 07     Q1 07  

Operating revenues

  17,698       4,488     4,450     4,400     4,360       17,752       4,518     4,465     4,408     4,361  

Cost of revenue, exclusive of depreciation and amortization

  (4,428 )     (1,189 )   (1,098 )   (1,082 )   (1,059 )     (4,095 )     (1,144 )   (991 )   (980 )   (980 )

Selling, general and administrative expenses (A)

  (6,016 )     (1,519 )   (1,513 )   (1,505 )   (1,479 )     (6,253 )     (1,586 )   (1,583 )   (1,549 )   (1,535 )

Net benefit plans cost

  (250 )     (40 )   (69 )   (70 )   (71 )     (410 )     (113 )   (97 )   (98 )   (102 )

EBITDA

  7,004       1,740     1,770     1,743     1,751       6,994       1,675     1,794     1,781     1,744  

EBITDA margin

  39.6 %     38.8 %   39.8 %   39.6 %   40.2 %     39.4 %     37.1 %   40.2 %   40.4 %   40.0 %

Depreciation

  (2,537 )     (683 )   (619 )   (612 )   (623 )     (2,547 )     (617 )   (649 )   (649 )   (632 )

Amortization of intangible assets

  (732 )     (187 )   (175 )   (175 )   (195 )     (637 )     (166 )   (163 )   (155 )   (153 )

Restructuring and other

  (871 )     (207 )   (310 )   (71 )   (283 )     (331 )     (146 )   (78 )   (71 )   (36 )

Operating income

  2,864       663     666     885     650       3,479       746     904     906     923  

Other (expense) income

  (253 )     (281 )   -     6     22       2,405       2,299     (5 )   (21 )   132  

Interest expense

  (791 )     (207 )   (193 )   (193 )   (198 )     (859 )     (211 )   (213 )   (220 )   (215 )

Pre-tax earnings from continuing operations

  1,820       175     473     698     474       5,025       2,834     686     665     840  

Income taxes

  (469 )     (84 )   (81 )   (195 )   (109 )     (735 )     (357 )   (154 )   (11 )   (213 )

Non-controlling interest

  (320 )     (68 )   (90 )   (88 )   (74 )     (331 )     (65 )   (84 )   (86 )   (96 )

Earnings from continuing operations

  1,031       23     302     415     291       3,959       2,412     448     568     531  

Discontinued operations

  (88 )     (41 )   (22 )   (23 )   (2 )     98       (24 )   (8 )   132     (2 )

Net earnings (loss)

   943       (18 )   280     392     289       4,057       2,388     440     700     529  

Dividends on preferred shares

  (124 )     (30 )   (32 )   (31 )   (31 )     (131 )     (34 )   (34 )   (33 )   (30 )

Net earnings (loss) applicable to common shares

  819       (48 )   248     361     258       3,926       2,354     406     667     499  

Net earnings (loss) per common share – basic

                                                                 

Continuing operations

$ 1.13     $ (0.01 ) $ 0.34   $ 0.48   $ 0.32     $ 4.76     $ 2.96   $ 0.51   $ 0.67   $ 0.62  

Discontinued operations

$ (0.11 )   $ (0.05 ) $ (0.03 ) $ (0.03 ) $ -     $ 0.12     $ (0.03 ) $ (0.01 ) $ 0.16   $ -  

Net earnings

$ 1.02     $ (0.06 ) $ 0.31   $ 0.45   $ 0.32     $ 4.88     $ 2.93   $ 0.50   $ 0.83   $ 0.62  

Net earnings (loss) per common share – diluted

                                                                 

Continuing operations

$ 1.12     $ (0.01 ) $ 0.33   $ 0.48   $ 0.32     $ 4.75     $ 2.95   $ 0.51   $ 0.67   $ 0.62  

Discontinued operations

$ (0.11 )   $ (0.05 ) $ (0.03 ) $ (0.03 ) $ -     $ 0.12     $ (0.03 ) $ (0.01 ) $ 0.16   $ -  

Net earnings

$ 1.01     $ (0.06 ) $ 0.30   $ 0.45   $ 0.32     $ 4.87     $ 2.92   $ 0.50   $ 0.83   $ 0.62  

Dividends per common share

$ 0.730     $ 0.365   $ -   $ -   $ 0.365     $ 1.460     $ 0.365   $ 0.365   $ 0.365   $ 0.365  

Average number of common shares outstanding – basic (millions)

  805.8       806.4     806.0     805.6     805.3       804.8       805.2     804.9     803.2     806.0  

Average number of common shares outstanding – diluted (millions)

  807.2       806.9     808.3     807.2     807.1       806.9       808.0     807.8     805.5     806.6  
                                                                   

The following items are included in net earnings (loss):

                                                                 

Net (losses) gains on investments

                                                                 

Continuing operations

  (358 )     (346 )   (14 )   4     (2 )     2,125       1,883     7     132     103  

Discontinued operations

  (62 )     (26 )   (16 )   (20 )   -       123       (13 )   -     135     1  

Restructuring and other

  (572 )     (117 )   (210 )   (48 )   (197 )     (206 )     (93 )   (43 )   (45 )   (25 )

Total

  (992 )     (489 )   (240 )   (64 )   (199 )     2,042       1,777     (36 )   222     79  

Impact on net earnings per share

$ (1.23 )   $ (0.61 ) $ (0.29 ) $ (0.08 ) $ (0.25 )   $ 2.54     $ 2.21   $ (0.04 ) $ 0.27   $ 0.10  

Adjusted EPS

$ 2.25     $ 0.55   $ 0.60   $ 0.53   $ 0.57     $ 2.34     $ 0.72   $ 0.54   $ 0.56   $ 0.52  
 
(A) Excludes net benefit plans cost

 

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 3

 

BCE Inc.
Segmented Data (2)

 

Q4   Q4               Total   Total            

($ millions, except where otherwise indicated) (unaudited)

2008   2007     $ change   % change     2008   2007     $ change   % change  

Revenues

                                     

Bell Wireline

2,726   2,744     (18 ) (0.7 %)   10,640   10,719     (79 ) (0.7 %)

Bell Wireless

1,135   1,109     26   2.3 %   4,481   4,164     317   7.6 %

Inter-segment eliminations

(61 ) (61 )   -   0.0 %   (248 ) (227 )   (21 ) (9.3 %)

Total Bell

3,800   3,792     8   0.2 %   14,873   14,656     217   1.5 %

Bell Aliant

815   851     (36 ) (4.2 %)   3,332   3,347     (15 ) (0.4 %)

Telesat

-   45     (45 ) n.m.     -   458     (458 ) n.m.  

Inter-segment eliminations

(127 ) (170 )   43   25.3 %   (507 ) (709 )   202   28.5 %

Total BCE Inc.

4,488   4,518     (30 ) (0.7 %)   17,698   17,752     (54 ) (0.3 %)

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

937   950     (13 ) (1.4 %)   3,868   3,879     (11 ) (0.3 %)

Margin

34.4 % 34.6 %       (0.2 ) pts   36.4 % 36.2 %       0.2  pts

Bell Wireless

444   391     53   13.6 %   1,770   1,640     130   7.9 %

Margin

39.1 % 35.3 %       3.8  pts   39.5 % 39.4 %       0.1  pts

Total Bell

1,381   1,341     40   3.0 %   5,638   5,519     119   2.2 %

Margin

36.3 % 35.4 %       0.9  pts   37.9 % 37.7 %       0.2  pts

Bell Aliant

359   317     42   13.2 %   1,366   1,299     67   5.2 %

Margin

44.0 % 37.3 %       6.7  pts   41.0 % 38.8 %       2.2  pts

Telesat

-   23     (23 ) n.m.     -   263     (263 ) n.m.  

Inter-segment eliminations

-   (6 )   6   n.m.     -   (87 )   87   n.m.  

Total BCE Inc.

1,740   1,675     65   3.9 %   7,004   6,994     10   0.1 %

Margin

38.8 % 37.1 %       1.7  pts   39.6 % 39.4 %       0.2  pts

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

226   274     (48 ) (17.5 %)   902   1,454     (552 ) (38.0 %)

Bell Wireless

294   283     11   3.9 %   1,241   1,198     43   3.6 %

Total Bell

520   557     (37 ) (6.6 %)   2,143   2,652     (509 ) (19.2 %)

Bell Aliant

143   178     (35 ) (19.7 %)   721   714     7   1.0 %

Telesat

-   12     (12 ) n.m.     -   157     (157 ) n.m.  

Inter-segment eliminations

-   (1 )   1   n.m.     -   (44 )   44   n.m.  

Total BCE Inc.

663   746     (83 ) (11.1 %)   2,864   3,479     (615 ) (17.7 %)

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

625   621     (4 ) (0.6 %)   1,966   1,960     (6 ) (0.3 %)

Capital Intensity (5)

22.9 % 22.6 %       (0.3 ) pts   18.5 % 18.3 %       (0.2 ) pts

Bell Wireless

229   143     (86 ) (60.1 %)   493   455     (38 ) (8.4 %)

Capital intensity

20.2 % 12.9 %       (7.3 ) pts   11.0 % 10.9 %       (0.1 ) pts

Total Bell

854   764     (90 ) (11.8 %)   2,459   2,415     (44 ) (1.8 %)

Capital Intensity

22.5 % 20.1 %       (2.4 ) pts   16.5 % 16.5 %       0.0  pts

Bell Aliant

168   142     (26 ) (18.3 %)   529   541     12   2.2 %

Telesat

-   10     10   n.m.     -   188     188   n.m.  

Total BCE Inc.

1,022   916     (106 ) (11.6 %)   2,988   3,144     156   5.0 %

Capital Intensity

22.8 % 20.3 %       (2.5 ) pts   16.9 % 17.7 %       0.8  pts
                                       

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 4

 

BCE Inc.
Segmented Data – Historical Trend

($ millions, except where otherwise indicated) (unaudited)

Total
2008 		    Q4 08     Q3 08     Q2 08     Q1 08     Total
2007 		    Q4 07     Q3 07     Q2 07     Q1 07  

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

10,640     2,726     2,632     2,627     2,655     10,719     2,744     2,659     2,670     2,646  

Bell Wireless

4,481     1,135     1,180     1,123     1,043     4,164     1,109     1,080     1,016     959  

Inter-segment eliminations

(248 )   (61 )   (65 )   (64 )   (58 )   (227 )   (61 )   (60 )   (60 )   (46 )

Total Bell

14,873     3,800     3,747     3,686     3,640     14,656     3,792     3,679     3,626     3,559  

Bell Aliant

3,332     815     821     838     858     3,347     851     832     817     847  

Telesat

-     -     -     -     -     458     45     130     161     122  

Inter-segment eliminations

(507 )   (127 )   (118 )   (124 )   (138 )   (709 )   (170 )   (176 )   (196 )   (167 )

Total BCE Inc.

17,698     4,488     4,450     4,400     4,360     17,752     4,518     4,465     4,408     4,361  

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

3,868     937     953     966     1,012     3,879     950     945     1,004     980  

Margin

36.4 %   34.4 %   36.2 %   36.8 %   38.1 %   36.2 %   34.6 %   35.5 %   37.6 %   37.0 %

Bell Wireless

1,770     444     474     442     410     1,640     391     447     399     403  

Margin

39.5 %   39.1 %   40.2 %   39.4 %   39.3 %   39.4 %   35.3 %   41.4 %   39.3 %   42.0 %

Total Bell

5,638     1,381     1,427     1,408     1,422     5,519     1,341     1,392     1,403     1,383  

Margin

37.9 %   36.3 %   38.1 %   38.2 %   39.1 %   37.7 %   35.4 %   37.8 %   38.7 %   38.9 %

Bell Aliant

1,366     359     343     335     329     1,299     317     343     323     316  

Margin

41.0 %   44.0 %   41.8 %   40.0 %   38.3 %   38.8 %   37.3 %   41.2 %   39.5 %   37.3 %

Telesat

-     -     -     -     -     263     23     80     93     67  

Inter-segment eliminations

-     -     -     -     -     (87 )   (6 )   (21 )   (38 )   (22 )

Total BCE Inc.

7,004     1,740     1,770     1,743     1,751     6,994     1,675     1,794     1,781     1,744  

Margin

39.6 %   38.8 %   39.8 %   39.6 %   40.2 %   39.4 %   37.1 %   40.2 %   40.4 %   40.0 %

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

902     226     125     370     181     1,454     274     352     403     425  

Bell Wireless

1,241     294     338     316     293     1,198     283     336     288     291  

Total Bell

2,143     520     463     686     474     2,652     557     688     691     716  

Bell Aliant

721     143     203     199     176     714     178     177     181     178  

Telesat

-     -     -     -     -     157     12     47     60     38  

Inter-segment eliminations

-     -     -     -     -     (44 )   (1 )   (8 )   (26 )   (9 )

Total BCE Inc.

2,864     663     666     885     650     3,479     746     904     906     923  

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bell Wireline

1,966     625     473     479     389     1,960     621     482     458     399  

Capital Intensity

18.5 %   22.9 %   18.0 %   18.2 %   14.7 %   18.3 %   22.6 %   18.1 %   17.2 %   15.1 %

Bell Wireless

493     229     93     104     67     455     143     91     80     141  

Capital intensity

11.0 %   20.2 %   7.9 %   9.3 %   6.4 %   10.9 %   12.9 %   8.4 %   7.9 %   14.7 %

Total Bell

2,459     854     566     583     456     2,415     764     573     538     540  

Capital Intensity

16.5 %   22.5 %   15.1 %   15.8 %   12.5 %   16.5 %   20.1 %   15.6 %   14.8 %   15.2 %

Bell Aliant

529     168     139     127     95     541     142     140     144     115  

Telesat

-     -     -     -     -     188     10     50     63     65  

Total BCE Inc.

2,988     1,022     705     710     551     3,144     916     763     745     720  

Capital Intensity

16.9 %   22.8 %   15.8 %   16.1 %   12.6 %   17.7 %   20.3 %   17.1 %   16.9 %   16.5 %

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 5

 

Bell Wireline (2)

 

Q4   Q4           Total   Total        

($ millions, except where otherwise indicated) (unaudited)

2008   2007     % change     2008   2007     % change  

Bell Wireline

                             

Local & access

825   882     (6.5 %)   3,360   3,617     (7.1 %)

Long distance

279   296     (5.7 %)   1,165   1,219     (4.4 %)

Data

1,009   958     5.3 %   3,721   3,574     4.1 %

Video

375   351     6.8 %   1,450   1,317     10.1 %

Equipment & other

145   167     (13.2 %)   576   652     (11.7 %)

Total external revenues

2,633   2,654     (0.8 %)   10,272   10,379     (1.0 %)

Inter-segment revenues

93   90     3.3 %   368   340     8.2 %

Total Bell Wireline operating revenue

2,726   2,744     (0.7 %)   10,640   10,719     (0.7 %)

Operating expenses

(1,789 ) (1,794 )   0.3 %   (6,772 ) (6,840 )   1.0 %

EBITDA

937   950     (1.4 %)   3,868   3,879     (0.3 %)

EBITDA Margin

34.4 % 34.6 %   (0.2 ) pts   36.4 % 36.2 %   0.2  pts

Operating income

226   274     (17.5 %)   902   1,454     (38.0 %)

Capital expenditures

625   621     (0.6 %)   1,966   1,960     (0.3 %)

Capital intensity

22.9 % 22.6 %   (0.3 ) pts   18.5 % 18.3 %   (0.2 ) pts

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network access services (NAS) (k)

                             

Residential (A)

4,231   4,650     (9.0 %)   4,231   4,650     (9.0 %)

Business (B)

3,205   3,526     (9.1 %)   3,205   3,526     (9.1 %)

Total

7,436   8,176     (9.1 %)   7,436   8,176     (9.1 %)

Network access service net (losses)/activations (k)

                              

Residential  

 (72 ) (117 )   38.5 %   (375 ) (511 )   26.6 %

Business (B)

 (28 ) (80 )   65.0 %   (48 ) -     n.m.  

Total

(100 ) (197 )   49.2 %   (423 ) (511 )   17.2 %

ADJUSTED (C)

                             

Network access services (k)

                             

Residential (C)

4,231   4,606     (8.1 %)   4,231   4,606     (8.1 %)

Business (C)

3,205   3,253     (1.5 %)   3,205   3,253     (1.5 %)

Total

7,436   7,859     (5.4 %)   7,436   7,859     (5.4 %)

Network access service net (losses)/activations (k)

                             

Residential

(72 ) (117 )   38.5 %   (375 ) (511 )   26.6 %

Business (D)

(28 ) (22 )   (27.3 %)   (48 ) (69 )   30.4 %

Total

(100 ) (139 )   28.1 %   (423 ) (580 )   27.1 %

Long Distance (LD)

                             

Conversation minutes (M)

3,003   3,049     (1.5 %)   11,771   12,500     (5.8 %)

Average revenue per minute ($)

0.082   0.089     (7.9 %)   0.089   0.091     (2.2 %)

ISP

                             

High Speed Internet net activations (E) (k)

8   29     (72.4 %)   50   124     (59.7 %)

High Speed Internet subscribers EOP (k)

2,054   2,004     2.5 %   2,054   2,004     2.5 %

Video (DTH and VDSL)

                             

Video EBITDA

82   77     6.5 %   282   265     6.4 %

Net subscriber activations (k)

14   2     n.m.     30   2     n.m.  

Total subscribers EOP (k)

1,852   1,822     1.6 %   1,852   1,822     1.6 %

ARPU (6) ($/month)

67.15   63.56     5.6 %   65.37   59.69     9.5 %

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

1.3 % 1.3 %   0.0  pts   1.2 % 1.2 %   0.0  pts
                               
 

(A)

 At the beginning of Q1 2008, an adjustment of 44k was made to our NAS count, reflecting an extensive review of our historical customer account records.

(B)

 In Q1 2008, we adjusted our beginning -of-period business NAS customer base to write-off 273k lines following formal notification received from a major wholesale customer in Q4 2007 that it was in the process of migrating all of its subscribers onto its own network facilities.

(C)

 NAS has been adjusted for 2007 to reflect notes A and B above.

(D)

 NAS net activations/(losses) throughout 2007 have been adjusted to reflect the quarterly impact of note B above.

(E)

 In Q4 2007, we reduced total net activations by 11k to correct for customer churn adjustments in the first three quarters of 2007.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 6

 

Bell Wireline – Historical Trend

($ millions, except where otherwise indicated) (unaudited)

Total
2008 		    Q4 08   Q3 08   Q2 08   Q1 08     Total
2007 		    Q4 07   Q3 07   Q2 07   Q1 07  

Bell Wireline

                                             

Local & access

3,360     825   833   845   857     3,617     882   900   918   917  

Long distance

1,165     279   290   298   298     1,219     296   306   307   310  

Data

3,721     1,009   913   896   903     3,574     958   877   864   875  

Video

1,450     375   363   356   356     1,317     351   330   322   314  

Equipment & other

576     145   136   141   154     652     167   153   175   157  

Total external revenues

10,272     2,633   2,535   2,536   2,568     10,379     2,654   2,566   2,586   2,573  

Inter-segment revenues

368     93   97   91   87     340     90   93   84   73  

Total Bell Wireline operating revenue

10,640     2,726   2,632   2,627   2,655     10,719     2,744   2,659   2,670   2,646  

Operating expenses

(6,772 )   (1,789 ) (1,679 ) (1,661 ) (1,643 )   (6,840 )   (1,794 ) (1,714 ) (1,666 ) (1,666 )

EBITDA

3,868     937   953   966   1,012     3,879     950   945   1,004   980  

EBITDA Margin

36.4 %   34.4 % 36.2 % 36.8 % 38.1 %   36.2 %   34.6 % 35.5 % 37.6 % 37.0 %

Operating income

902     226   125   370   181     1,454     274   352   403   425  

Capital expenditures

1,966     625   473   479   389     1,960     621   482   458   399  

Capital intensity

18.5 %   22.9 % 18.0 % 18.2 % 14.7 %   18.3 %   22.6 % 18.1 % 17.2 % 15.1 %

Local

                                             

Network access services (NAS) (k)

                                             

Residential (A)

4,231     4,231   4,303   4,375   4,500     4,650     4,650   4,767   4,871   5,030  

Business (B) (C)

3,205     3,205   3,233   3,233   3,240     3,526     3,526   3,606   3,653   3,608  

Total

7,436     7,436   7,536   7,608   7,740     8,176     8,176   8,373   8,524   8,638  

Network access service net (losses)/activations (k)

                                             

Residential

(375 )   (72 ) (72 ) (125 ) (106 )   (511 )   (117 ) (104 ) (159 ) (131 )

Business (B) (C)

(48 )   (28 ) -   (7 ) (13 )   -     (80 ) 11   45   24  

Total

(423 )   (100 ) (72 ) (132 ) (119 )   (511 )   (197 ) (93 ) (114 ) (107 )

ADJUSTED (D)

                                             

Network access services (k)

                                             

Residential (D)

4,231     4,231   4,303   4,375   4,500     4,606     4,606   4,723   4,827   4,986  

Business (D)

3,205     3,205   3,233   3,233   3,240     3,253     3,253   3,275   3,288   3,300  

Total

7,436     7,436   7,536   7,608   7,740     7,859     7,859   7,998   8,115   8,286  

Network access service net (losses)/activations (k)

                                             

Residential

(375 )   (72 ) (72 ) (125 ) (106 )   (511 )   (117 ) (104 ) (159 ) (131 )

Business (E)

(48 )   (28 ) -   (7 ) (13 )   (69 )   (22 ) (13 ) (12 ) (22 )

Total

(423 )   (100 ) (72 ) (132 ) (119 )   (580 )   (139 ) (117 ) (171 ) (153 )

Long Distance (LD)

                                             

Conversation minutes (M)

11,771     3,003   2,853   2,985   2,930     12,500     3,049   2,962   3,249   3,240  

Average revenue per minute ($)

0.089     0.082   0.093   0.089   0.093     0.091     0.089   0.097   0.088   0.090  

ISP

                                             

High Speed Internet net activations (F) (k)

50     8   33   (1 ) 10     124     29   29   25   41  

High Speed Internet subscribers EOP (G) (k)

2,054     2,054   2,046   2,013   2,014     2,004     2,004   1,975   1,946   1,932  

Video (DTH and VDSL)

                                             

Video EBITDA

282     82   76   47   77     265     77   65   68   55  

Net subscriber activations (k)

30     14   7   8   1     2     2   3   (7 ) 4  

Total subscribers EOP (k)

1,852     1,852   1,838   1,831   1,823     1,822     1,822   1,820   1,817   1,824  

ARPU ($/month)

65.37     67.15   65.20   64.47   64.65     59.69     63.56   59.95   58.37   56.87  

Churn (%) (average per month)

1.2 %   1.3 % 1.4 % 1.1 % 1.1 %   1.2 %   1.3 % 1.3 % 1.3 % 1.1 %
 

(A)

 At the beginning of Q1 2008, an adjustment of 44k was made to our NAS count, reflecting an extensive review of our historical customer account records.

(B)

 In Q1 2008, we adjusted our beginning -of-period business NAS customer base to write-off 273k lines following formal notification received from a major wholesale customer in Q4 2007 that it was in the process of migrating all of its subscribers onto its own network facilities.

(C)

 The Q3 2007 opening business network access services subscriber base was decreased by 58k to adjust for an overstatement arising from past methodology for calculating local inter-connections.

(D)

 NAS has been adjusted for 2007 to reflect notes A and B above.

(E)

 NAS net activations/(losses) throughout 2007 have been adjusted to reflect the quarterly impact of note B above.

(F)

 In Q4 2007, we reduced total net activations by 11k to correct for customer churn adjustments in the first three quarters of 2007.

(G)

 The Q1 2007 beginning of year High Speed Internet subscriber base was increased by 18k to adjust for prior-year deactivations related to a major upgrade of our order management system. In addition, the Q1 2007 and Q2 2007 beginning of year High Speed Internet subscriber bases were decreased by 4k and 11k respectively to adjust for the removal of customers who had no network usage in 2007.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 7

Bell Wireless (2)

($ millions, except where otherwise indicated) (unaudited)

Q4
2008 		    Q4
2007 		    % change     Total
2008 		    Total
2007 		    % change  

Bell Wireless  

                                 

Revenue  

                                 

Service  

1,033     980     5.4 %   4,058     3,773     7.6 %

Product  

92     112     (17.9 %)   377     332     13.6 %

Total external Bell Wireless revenues

1,125     1,092     3.0 %   4,435     4,105     8.0 %

Inter-segment  

10     17     (41.2 %)   46     59     (22.0 %)

Total Bell Wireless operating revenues

1,135     1,109     2.3 %   4,481     4,164     7.6 %

Operating expenses  

(691 )   (718 )   3.8 %   (2,711 )   (2,524 )   (7.4 %)

EBITDA  

444     391     13.6 %   1,770     1,640     7.9 %

EBITDA margin (Total revenues)

39.1 %   35.3 %   3.8  pts   39.5 %   39.4 %   0.1 pts

EBITDA margin (Service revenues)

43.0 %   39.9 %   3.1  pts   43.6 %   43.5 %   0.1 pts

Operating Income  

294     283     3.9 %   1,241     1,198     3.6 %
                                   

Capital expenditures  

229     143     (60.1 %)   493     455     (8.4 %)

Capital intensity

 20.2 %   12.9 %   (7.3 ) pts   11.0 %   10.9 %   (0.1 ) pts

Wireless gross activations (A) (k)  

470     510     (7.8 %)   1,651     1,640     0.7 %

Post-paid  

252     261     (3.4 %)   970     910     6.6 %

Wireless net activations (A) (k)  

117     195     (40.0 %)   351     408     (14.0 %)

Post-paid  

80     77     3.9 %   332     206     61.2 %

Wireless subscribers EOP (A) (B) (k)

6,497     6,216     4.5 %   6,497     6,216     4.5 %

Post-paid  

4,745     4,450     6.6 %   4,745     4,450     6.6 %

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

54.22     54.65     (0.8 %)   54.29     53.92     0.7 %

Pre-paid  

16.40     17.64     (7.0 %)   17.14     17.11     0.2 %

Post-paid  

65.69     66.75     (1.6 %)   66.09     65.88     0.3 %

Churn (%) (C) (average per month)

1.7 %   1.7 %   0.0  pts   1.6 %   1.7 %   0.1  pts

Pre-paid  

3.3 %   2.7 %   (0.6 ) pts   3.1 %   2.8 %   (0.3 ) pts

Post-paid  

1.3 %   1.4 %   0.1  pts   1.2 %   1.3 %   0.1  pts

Usage per subscriber (C) (min/month)

310     299     3.7 %   301     288     4.5 %

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

373     392     4.8 %   395     404     2.2 %

Paging subscribers (k)  

169     222     (23.9 %)   169     222     (23.9 %)

Paging average revenue per unit ($/month)

12     11     9.1 %   12     11     9.1 %

 

(A)

Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.

(B)

The Q4 2008 Wireless subscriber base reflected the removal of 37k analog subscribers (11k postpaid, 26k prepaid) due to the decommissioning of the analog network. Additionally, the tightening of Virgin Mobile Canada credit and activation processes resulted in 32k Virgin postpaid subscribers being removed from the subscriber base. These adjustments are not included in the net activation or churn metrics.

(C)

Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect only the 50% portion of Virgin Mobile’s results that are consolidated.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 8

 

Bell Wireless – Historical Trend

($ millions, except where otherwise indicated) (unaudited)

Total
2008 		    Q4 08     Q3 08     Q2 08     Q1 08     Total
2007 		    Q4 07     Q3 07     Q2 07     Q1 07  

Bell Wireless

                                                         

Revenue

                                                         

Service

4,058     1,033     1,061     1,008     956     3,773     980     978     925     890  

Product

377     92     109     102     74     332     112     88     75     57  

Total external Bell Wireless revenues

4,435     1,125     1,170     1,110     1,030     4,105     1,092     1,066     1,000     947  

Inter-segment

46     10     10     13     13     59     17     14     16     12  

Total Bell Wireless operating revenues

4,481     1,135     1,180     1,123     1,043     4,164     1,109     1,080     1,016     959  

Operating expenses

(2,711 )   (691 )   (706 )   (681 )   (633 )   (2,524 )   (718 )   (633 )   (617 )   (556 )

EBITDA

1,770     444     474     442     410     1,640     391     447     399     403  

EBITDA margin (Total revenues)

39.5 %   39.1 %   40.2 %   39.4 %   39.3 %   39.4 %   35.3 %   41.4 %   39.3 %   42.0 %

EBITDA margin (Service revenues)

43.6 %   43.0 %   44.7 %   43.8 %   42.9 %   43.5 %   39.9 %   45.7 %   43.1 %   45.3 %

Operating Income

1,241     294     338     316     293     1,198     283     336     288     291  
                                                           

Capital expenditures

493     229     93     104     67     455     143     91     80     141  

Capital intensity

11.0 %   20.2 %   7.9 %   9.3 %   6.4 %   10.9 %   12.9 %   8.4 %   7.9 %   14.7 %

Wireless gross activations (A) (k)

1,651     470     439     391     351     1,640     510     445     389     296  

Post-paid

970     252     267     253     198     910     261     254     228     167  

Wireless net activations (A) (k)

351     117     117     83     34     408     195     137     63     13  

Post-paid

332     80     113     111     28     206     77     76     43     10  

Wireless subscribers EOP (A) (B) (C) (D) (k)

 6,497     6,497     6,449     6,332     6,250     6,216     6,216     6,021     5,884     5,821  

Post-paid

4,745     4,745     4,708     4,595     4,478     4,450     4,450     4,373     4,297     4,254  

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

54.29     54.22     56.30     54.27     52.32     53.92     54.65     55.82     53.59     51.58  

Pre-paid

17.14     16.40     18.19     17.48     16.50     17.11     17.64     18.55     17.06     15.17  

Post-paid

66.09     65.69     68.17     66.19     64.27     65.88     66.75     67.83     65.36     63.56  

Churn (%) (E) (average per month)

1.6 %   1.7 %   1.6 %   1.6 %   1.6 %   1.7 %   1.7 %   1.7 %   1.8 %   1.6 %

Pre-paid

3.1 %   3.3 %   3.2 %   3.0 %   2.8 %   2.8 %   2.7 %   2.7 %   3.1 %   2.9 %

Post-paid

1.2 %   1.3 %   1.1 %   1.1 %   1.3 %   1.3 %   1.4 %   1.4 %   1.4 %   1.2 %

Usage per subscriber (E) (min/month)

301     310     302     305     281     288     299     297     289     266  

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

395     373     398     417     396     404     392     371     442     420  

Paging subscribers (k)

169     169     193     210     216     222     222     236     250     262  

Paging average revenue per unit ($/month)

12     12     11     11     11     11     11     11     11     10  
 
(A)

Total wireless gross activations, net activations and EOP subscribers include 100% of Virgin Mobile’s subscribers.
(B)

The Q1 2007 beginning of year wireless subscriber base was decreased by 146k as a result of a change to our prepaid deactivation policy.
(C)

The Q2 2008 beginning of period wireless subscriber base was decreased by 1k (postpaid increased by 6k while pre-paid decreased by 7k) as a result of the integration of Aliant Mobility’s billing system.
(D)

The Q4 2008 Wireless subscriber base reflected the removal of 37k analog subscribers (11k postpaid, 26k prepaid) due to the decommissioning of the analog network. Additionally, the tightening of Virgin Mobile Canada credit and activation processes resulted in 32k Virgin postpaid subscribers being removed from the subscriber base. These adjustments are not included in the net activation or churn metrics.
(E)

Wireless average revenue per unit, churn, usage per subscriber and cost of acquisition reflect only the 50% portion of Virgin Mobile’s results that are consolidated.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 9

 

 BCE Inc. Net debt and other information (2)

BCE Inc. – Net Debt

               
                 

At December 31, 2008

      BCE Inc.        

(unaudited)

               

($ millions, except where otherwise indicated)

               

 

      Bell        

 

Bell *     Aliant     BCE Inc.  

Debt due within one year

1,878     323     2,201  

Long-term debt

7,648     2,451     10,099  

Securitization of accounts receivable

1,140     165     1,305  

Preferred shares – BCE

2,770     -     2,770  

Cash and cash equivalents

(3,045 )   (14 )   (3,059 )

Net debt

10,391     2,925     13,316  
 

* Includes $650 million BCE debt

 

Bell – Balance Sheet Information

                           

(unaudited)

                           

($ millions, except where otherwise indicated)

Dec. 31     Sep. 30     June 30     March 31     Dec. 31  
  2008     2008     2008     2008     2007  

 

                           

Debt due within one year

1,878     1,088     1,114     452     444  

Long-term debt

7,648     7,632     7,473     8,207     8,260  

Securitization of accounts receivable

1,140     1,140     1,140     1,072     1,112  

Preferred shares – BCE

2,770     2,770     2,770     2,770     2,770  

Cash and cash equivalents

(3,045 )   (2,554 )   (2,667 )   (2,468 )   (2,604 )

Net debt

10,391     10,076     9,830     10,033     9,982  
                             

Net Debt: Trailing 12 month EBITDA, including Bell Aliant distributions to BCE

1.75     1.71     1.68     1.72     1.72  

EBITDA, including Bell Aliant distributions to BCE: Net interest, securitization costs and preferred dividends (trailing 12 month)

8.33     8.19     7.62     7.12     6.69  
 

Cash Flow Information

                                             

(unaudited)

Q4     Q4                 Total     Total              

($ millions, except where otherwise indicated)

2008     2007     $ change     % change     2008     2007     $ change     % change  
                                               

Free Cash Flow (FCF)

                                             

Cash from operating activities

1,460     1,368     92     6.7 %   4,716     4,240     476     11.2 %

Capital expenditures

(854 )   (764 )   (90 )   (11.8 %)   (2,459 )   (2,415 )   (44 )   (1.8 %)

Other investing activities

-     10     (10 )   n.m.     (729 )   12     (741 )   n.m.  

Dividends paid on preferred shares

(31 )   (34 )   3     8.8 %   (129 )   (124 )   (5 )   (4.0 %)

Dividends/distributions paid by subsidiaries to non-controlling interest

-     -     -     0.0 %   -     (35 )   35     n.m.  

Bell Aliant distributions to BCE

72     71     1     1.4 %   290     282     8     2.8 %

FCF

647     651     (4 )   (0.6 %)   1,689     1,960     (271 )   (13.8 %)
                                               

Cash Flow Information – Historical Trend

                                                         

(unaudited)

Total
2008 		    Q4
2008 		    Q3
2008 		    Q2
2008 		    Q1
2008 		    Total
2007 		                         

($ millions, except where otherwise indicated)

                        Q4 07     Q3 07     Q2 07     Q1 07  

Free Cash Flow (FCF)

                                                         

Cash from operating activities

4,716     1,460     1,342     1,193     721     4,240     1,368     1,233     979     660  

Capital expenditures

(2,459 )   (854 )   (566 )   (583 )   (456 )   (2,415 )   (764 )   (573 )   (538 )   (540 )

Other investing activities

(729 )   -     (732 )   -     3     12     10     3     (2 )    1  

Dividends paid on preferred shares

(129 )   (31 )   (31 )   (32 )   (35 )   (124 )   (34 )   (34 )   (33 )   (23 )

Dividends/distributions paid by subsidiaries to non-controlling interest

-     -     -     -     -     (35 )   -     -     (15 )   (20 )

Bell Aliant distributions to BCE

290     72     73     74     71     282     71     71     71     69  

FCF

1,689     647     86     652     304     1,960     651     700     462     147  
                                                           

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 10

 

BCE Inc.
Consolidated Balance Sheet Data

 

December 31     September 30     June 30     March 31     December 31  

($ millions, except where otherwise indicated) (unaudited)

2008     2008     2008     2008     2007  

ASSETS

                           

Current assets

                           

Cash and cash equivalents

3,059     2,578     2,677     2,477     2,652  

Accounts receivable

1,837     1,900     2,002     2,025     1,902  

Future income taxes

86     82     51     95     71  

Inventory

272     366     340     278     264  

Prepaid and other expenses

304     384     439     435     274  

Current assets of discontinued operations

20     41     63     64     61  

Total current assets

5,578     5,351     5,572     5,374     5,224  

Capital assets

                           

Property, plant and equipment

19,407     18,459     18,353     18,380     18,593  

Finite-life intangible assets

2,697     2,631     2,654     2,659     2,475  

Indefinite-life intangible assets

3,697     2,954     2,954     2,954     2,913  

Total capital assets

25,801     24,044     23,961     23,993     23,981  

Other long-term assets

2,613     3,495     2,810     2,972     3,080  

Goodwill

5,659     5,717     5,717     5,688     5,855  

Non-current assets of discontinued operations

12     20     67     89     90  

Total assets

39,663     38,627     38,127     38,116     38,230  

LIABILITIES

                           

Current liabilities

                           

Accounts payable and accrued liabilities

3,538     3,090     2,910     2,741     3,254  

Interest payable

139     168     139     172     145  

Dividends payable

337     43     43     337     337  

Debt due within one year

2,201     1,439     1,353     796     721  

Current liabilities of discontinued operations

12     15     31     33     40  

Total current liabilities

6,227     4,755     4,476     4,079     4,497  

Long-term debt

10,099     10,083     10,028     10,713     10,766  

Other long-term liabilities

4,946     4,956     4,962     4,987     4,630  

Non-current liabilities of discontinued operations

-     -     2     2     2  

Total liabilities

21,272     19,794     19,468     19,781     19,895  

Non-controlling interest

1,080     1,107     1,103     1,087     1,103  

SHAREHOLDERS’ EQUITY

                           

Preferred shares

2,770     2,770     2,770     2,770     2,770  

Common shareholders’ equity

                           

Common shares

13,525     13,565     13,553     13,537     13,536  

Treasury stock

(86 )   -     -     -     -  

Contributed surplus

2,531     2,539     2,538     2,538     2,537  

Accumulated other comprehensive income (loss)

39     (42 )   48     118     68  

Deficit

(1,468 )   (1,106 )   (1,353 )   (1,715 )   (1,679 )

Total common shareholders’ equity

14,541     14,956     14,786     14,478     14,462  

Total shareholders’ equity

17,311     17,726     17,556     17,248     17,232  

Total liabilities and shareholders’ equity

39,663     38,627     38,127     38,116     38,230  

Number of common shares outstanding

803.1     806.2     805.8     805.3     805.3  

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 11

 

BCE Inc.
Consolidated Cash Flow Data

 

  Q4       Q4               Total       Total          

($ millions, except where otherwise indicated) (unaudited)

  2008       2007       $ change       2008       2007       $ change  

Cash flows from operating activities

                                             

Net earnings

  (18 )     2,388       (2,406 )     943       4,057       (3,114 )

less: (Losses) earnings from discontinued operations, net of tax

  (41 )     (24 )     (17 )     (88 )     98       (186 )

Earnings from continuing operations

  23       2,412       (2,389 )     1,031       3,959       (2,928 )

Adjustments to reconcile earnings from continuing operations to cash flows from operating activities

                                              

Depreciation and amortization of intangible assets

  870       783       87       3,269       3,184       85  

Net benefit plans cost

  40       113       (73 )     250       410       (160 )

Restructuring and other

  207       146       61       871       331       540  

Losses (gains) on investments

  292       (2,289 )     2,581       308       (2,414 )     2,722  

Future income taxes

  127       196       (69 )     129       413       (284 )

Non-controlling interest

  68       65       3       320       331       (11 )

Contributions to employee pension plans

  (91 )     (36 )     (55 )     (232 )     (265 )     33  

Other employee future benefit plan payments

  (24 )     (25 )     1       (96 )     (96 )     -  

Payments of restructuring and other

  (168 )     (27 )     (141 )     (305 )     (118 )     (187 )

Operating assets and liabilities

  476       391       85       367       (2 )     369  

 

  1,820       1,729       91       5,912       5,733       179  

Bell Aliant distributions to BCE

  72       71       1       290       282       8  

Capital expenditures

  (1,022 )     (916 )     (106 )     (2,988 )     (3,144 )     156  

Other investing activities

  1       8       (7 )     (726 )     14       (740 )

Cash dividends paid on preferred shares

  (31 )     (34 )     3       (129 )     (124 )     (5 )

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

  (92 )     (88 )     (4 )     (366 )     (404 )     38  

Bell Aliant Free Cash Flow

  (101 )     (104 )     3       (304 )     (399 )     95  

Telesat Free Cash Flow

  -       (15 )     15       -       2       (2 )

Free Cash Flow (3)

   647       651       (4 )     1,689       1,960       (271 )

Bell Aliant undistributed Free Cash Flow

  29       33       (4 )     14       117       (103 )

Telesat Free Cash Flow

  -       15       (15 )     -       (2 )     2  

Business acquisitions

  (1 )     -       (1 )     (56 )     (163 )     107  

Business dispositions

  -       3,123       (3,123 )     (10 )     3,123       (3,133 )

Formation of Bell Aliant

  -       -       -       -       (7 )     7  

Going-private costs

  2       (13 )     15       (163 )     (49 )     (114 )

Increase in investments

  (3 )     (6 )     3       (8 )     (27 )     19  

Decrease in investments

  -       129       (129 )     1       192       (191 )

(Decrease) increase in notes payable and bank advances

  (40 )     (267 )     227       1       211       (210 )

Issue of long-term debt

  -       -       -       50       1,071       (1,021 )

Repayment of long-term debt

  (124 )     (947 )     823       (502 )     (3,048 )     2,546  

Cash dividends paid on common shares

  -       (294 )     294       (587 )     (1,147 )     560  

Issue of common shares

  23       5       18       50       153       (103 )

Repurchase of common shares

  (92 )     -       (92 )     (92 )     (227 )     135  

Issue of equity securities by subsidiaries to non-controlling interest

  -       -       -       1       -       1  

Redemption of equity securities by subsidiaries from non-controlling interest

  -       (4 )     4       -       (333 )     333  

Other financing activities

  45       (13 )     58       15       (66 )     81  

 

  (161 )     1,761       (1,922 )     (1,286 )     (202 )     (1,084 )

Cash flows from continuing operations

  486       2,412       (1,926 )     403       1,758       (1,355 )

Cash flows used in discontinued operations activities

  (5 )     (9 )     4       (25 )     (26 )     1  

Cash flows from (used in) discontinued investing activities

  -       (4 )     4       29       345       (316 )

Cash flows used in discontinued financing activities

  -       -       -       (2 )     -       (2 )

Net increase in cash and cash equivalents

  481       2,399       (1,918 )     405       2,077       (1,672 )

Cash and cash equivalents at beginning of period

  2,582       259       2,323       2,658       581       2,077  

Cash and cash equivalents at end of period

  3,063       2,658       405       3,063       2,658       405  

Consists of:

                                             

Cash and cash equivalents of continuing operations

  3,059       2,652       407       3,059       2,652       407  

Cash and cash equivalents of discontinued operations

  4       6       (2 )     4       6       (2 )

Total

  3,063       2,658       405       3,063       2,658       405  
                                               

Other information

                                             

Cash flow per share (9)

$ 0.99     $ 1.01     $ (0.02 )   $ 3.63     $ 3.22     $ 0.41  

Annualized cash flow yield (10)

  12.8 %     8.2 %     4.6  pts     8.3 %     6.1 %     2.2  pts

Common dividend payout (11)

  66.4 %     50.7 %     15.7  pts     32.4 %     62.4 %     (30.0 ) pts

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 12

 

BCE Inc.
Consolidated Cash Flow Data – Historical Trend

 

  Total
2008 		                                      Total
2007 		                                 

($ millions, except where otherwise indicated) (unaudited)

        Q4 08       Q3 08       Q2 08       Q1 08             Q4 07       Q3 07       Q2 07       Q1 07  

Cash flows from operating activities

                                                                             

Net earnings

  943       (18 )     280       392       289       4,057       2,388       440       700       529  

less: (Losses) earnings from discontinued operations, net of tax

  (88 )     (41 )     (22 )     (23 )     (2 )     98       (24 )     (8 )     132       (2 )

Earnings from continuing operations

  1,031       23       302       415       291       3,959       2,412       448       568       531  

Adjustments to reconcile earnings from continuing operations to cash flows from operating activities

                                                                             

Depreciation and amortization of intangible assets

  3,269       870       794       787       818       3,184       783       812       804       785  

Net benefit plans cost

  250       40       69       70       71       410       113       97       98       102  

Restructuring and other

  871       207       310       71       283       331       146       78       71       36  

Losses (gains) on investments

  308       292       14       -       2       (2,414 )     (2,289 )     (6 )     2       (121 )

Future income taxes

  129       127       (23 )     92       (67 )     413       196       215       (109 )     111  

Non-controlling interest

  320       68       90       88       74       331       65       84       86       96  

Contributions to employee pension plans

  (232 )     (91 )     (49 )     (48 )     (44 )     (265 )     (36 )     (42 )     (79 )     (108 )

Other employee future benefit plan payments

  (96 )     (24 )     (25 )     (24 )     (23 )     (96 )     (25 )     (23 )     (24 )     (24 )

Payments of restructuring and other

  (305 )     (168 )     (84 )     (29 )     (24 )     (118 )     (27 )     (20 )     (19 )     (52 )

Operating assets and liabilities

  367       476       253       117       (479 )     (2 )     391       (36 )     28       (385 )

 

  5,912       1,820       1,651       1,539       902       5,733       1,729       1,607       1,426       971  

Bell Aliant distributions to BCE

  290       72       73       74       71       282       71       71       71       69  

Capital expenditures

  (2,988 )     (1,022 )     (705 )     (710 )     (551 )     (3,144 )     (916 )     (763 )     (745 )     (720 )

Other investing activities

  (726 )     1       (732 )     2       3       14       8       2       1       3  

Cash dividends paid on preferred shares

  (129 )     (31 )     (31 )     (32 )     (35 )     (124 )     (34 )     (34 )     (33 )     (23 )

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

  (366 )     (92 )     (92 )     (92 )     (90 )     (404 )     (88 )     (94 )     (109 )     (113 )

Bell Aliant Free Cash Flow

  (304 )     (101 )     (78 )     (129 )     4       (399 )     (104 )     (63 )     (183 )     (49 )

Telesat Free Cash Flow

  -       -       -       -       -       2       (15 )     (26 )     34       9  

Free Cash Flow

  1,689       647       86       652       304       1,960       651       700       462       147  

Bell Aliant undistributed Free Cash Flow

  14       29       5       55       (75 )     117       33       (8 )     112       (20 )

Telesat Free Cash Flow

  -       -       -       -       -       (2 )     15       26       (34 )     (9 )

Business acquisitions

  (56 )     (1 )     -       (24 )     (31 )     (163 )     -       (14 )     (2 )     (147 )

Business dispositions

  (10 )     -       -       -       (10 )     3,123       3,123       -       -       -  

Formation of Bell Aliant

  -       -       -       -       -       (7 )     -       -       (3 )     (4 )

Going-private costs

  (163 )     2       (148 )     (8 )     (9 )     (49 )     (13 )     (36 )     -       -  

Increase in investments

  (8 )     (3 )     (1 )     (2 )     (2 )     (27 )     (6 )     (5 )     (3 )     (13 )

Decrease in investments

  1       -       -       1       -       192       129       50       6       7  

Increase (decrease) in notes payable and bank advances

  1       (40 )     26       (50 )     65       211       (267 )     (345 )     508       315  

Issue of long-term debt

  50       -       -       50       -       1,071       -       16       30       1,025  

Repayment of long-term debt

  (502 )     (124 )     (94 )     (182 )     (102 )     (3,048 )     (947 )     (89 )     (837 )     (1,175 )

Cash dividends paid on common shares

  (587 )     -       -       (293 )     (294 )     (1,147 )     (294 )     (293 )     (290 )     (270 )

Issue of common shares

  50       23       11       15       1       153       5       16       118       14  

Repurchase of common shares

  (92 )     (92 )     -       -       -       (227 )     -       -       (4 )     (223 )

Issue of equity securities by subsidiaries to non-controlling interest

  1       -       1       -       -       -       -       -       -       -  

Redemption of equity securities by subsidiaries from non-controlling interest

  -       -       -       -       -       (333 )     (4 )     (117 )     (138 )     (74 )

Other financing activities

  15       45       (8 )     (10 )     (12 )     (66 )     (13 )     (3 )     (9 )     (41 )

 

  (1,286 )     (161 )     (208 )     (448 )     (469 )     (202 )     1,761       (802 )     (546 )     (615 )

Cash flows from (used in) continuing operations

  403       486       (122 )     204       (165 )     1,758       2,412       (102 )     (84 )     (468 )

Cash flows (used in) from discontinued operations activities

  (25 )     (5 )     (4 )     (5 )     (11 )     (26 )     (9 )     (4 )     (14 )     1  

Cash flows from (used in) discontinued investing activities

  29       -       29       -       -       345       (4 )     -       352       (3 )

Cash flows used in discontinued financing activities

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

Net increase (decrease) in cash and cash equivalents

  405       481       (99 )     199       (176 )     2,077       2,399       (106 )     254       (470 )

Cash and cash equivalents at beginning of period

  2,658       2,582       2,681       2,482       2,658       581       259       365       111       581  

Cash and cash equivalents at end of period

  3,063       3,063       2,582       2,681       2,482       2,658       2,658       259       365       111  

Consists of:

                                                                             

Cash and cash equivalents of continuing operations

  3,059       3,059       2,578       2,677       2,477       2,652       2,652       254       359       100  

Cash and cash equivalents of discontinued operations

  4       4       4       4       5       6       6       5       6       11  

Total

  3,063       3,063       2,582       2,681       2,482       2,658       2,658       259       365       111  
                                                                               

Other information

                                                                             

Cash flow per share

$ 3.63     $ 0.99     $ 1.17     $ 1.03     $ 0.44     $ 3.22     $ 1.01     $ 1.05     $ 0.85     $ 0.31  

Annualized cash flow yield

  8.3 %     12.8 %     1.2 %     9.1 %     4.4 %     6.1 %     8.2 %     8.7 %     5.7 %     2.2 %

Common dividend payout

  32.4 %     66.4 %     0.0 %     0.0 %     64.0 %     62.4 %     50.7 %     67.6 %     65.2 %     70.2 %

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 13

 

Accompanying Notes

(1)  

Throughout this report, BCE means BCE Inc., its subsidiaries and joint ventures; Bell means our Bell Wireline and Bell Wireless segments on an aggregate basis; and Bell Aliant means Bell Aliant Regional Communications Income Fund and its affiliated entities. We have reclassified some of the amounts for the previous periods in the consolidated financial statements to make them consistent with the presentation for the current period. We have restated financial information for the previous periods to reflect our decisions in 2008 to cease operations and to sell certain of our businesses. They are now shown as discontinued operations. Telesat Canada (Telesat) was sold on October 31, 2007 and we have continuing commercial arrangements between Telesat and Bell Express Vu Limited Partnership (Bell TV) that provide Bell TV continued access to current and expanded satellite capacity. As a result of these arrangements, we have not accounted for Telesat as a discontinued operation.
 
(2)  

We report our results of operations in four segments: Bell Wireline, Bell Wireless, Bell Aliant and Telesat. Our reporting structure reflects how we manage our business and how we classify our operations for planning and measuring performance. Accordingly, we operate and manage our reportable segments as strategic business units organized by products and services.

During the third quarter of 2008, certain elements of our operating segments were realigned to reflect changes in our management accountabilities for operations. Our reportable segments did not change.
 
(3)  

Non-GAAP Financial Measures

EBITDA
The term EBITDA (earnings before interest, taxes, depreciation and amortization of intangible assets) does not have any standardized meaning according to Canadian generally accepted accounting principles (GAAP) . It is therefore unlikely to be comparable to similar measures presented by other companies.

We define EBITDA as operating revenues less cost of revenue, selling, general and administrative expenses and net benefit plans costs, meaning it represents operating income before depreciation, amortization of intangible assets and restructuring and other.

We use EBITDA, among other measures, to assess the operating performance of our ongoing businesses without the effects of depreciation, amortization of intangible assets and restructuring and other. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. We exclude depreciation and amortization of intangible assets because it largely depends on the accounting methods and assumptions a company uses, as well as non-operating factors, such as the historical cost of capital assets. Excluding restructuring and other does not imply they are non-recurring.

EBITDA allows us to compare our operating performance on a consistent basis. We believe that certain investors and analysts use EBITDA to measure a company’s ability to service debt and to meet other payment obligations, or as a common valuation measurement in the telecommunications industry.

The most comparable Canadian GAAP financial measure is operating income.

Adjusted earnings per share (EPS)
The term adjusted EPS does not have any standardized meaning according to Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies.

We define adjusted EPS as EPS before restructuring and other and net losses (gains) on investments.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 14

 

Accompanying Notes

   

We use adjusted EPS among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other and net losses (gains) on investments. 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 Canadian GAAP financial measure is EPS.

FREE CASH FLOW
The term free cash flow does not have any standardized meaning according to Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies.

We define free cash flow as cash from operating activities and distributions received from Bell Aliant less capital expenditures, preferred share dividends, dividends/distributions paid by subsidiaries to non-controlling interest, other investing activities and Bell Aliant free cash flow.

We consider free cash flow to be an important indicator of the financial strength and performance of our business because it shows how much cash is available to repay debt and to reinvest in our company. We present free cash flow on a consistent basis from period to period, which allows us to compare our financial performance on a consistent basis.

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

The most comparable Canadian GAAP financial measure is cash from operating activities.
 
(4)  

EBITDA margin is calculated as follows:

EBITDA
Operating revenues
 
(5)  

Capital Intensity is calculated as follows:

Capital expenditures
Operating revenues
 
(6)  

Average revenue per unit (ARPU) represents the measurement of the average revenue generated by each unit, expressed as a rate per month for the year.
 
(7)  

Churn is the rate at which existing subscribers cancel their services. Churn is calculated as the number of subscribers disconnected divided by the average subscriber base.
 
(8)  

Cost of acquisition (COA) is also referred to as subscriber acquisition costs. This measure is expressed per gross activation. It includes costs associated with acquiring a customer such as hardware subsidies, marketing and distribution costs.

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 15

 

Accompanying Notes

(9)  

Cash flow per share is calculated as follows:

Cash flow from operating activities less capital expenditures
Average number of common shares outstanding
 
(10)  

Annualized cash flow yield is calculated as follows:

Free cash flow
Number of common shares outstanding at end of period multiplied by share price at end of period

Note: to annualize, multiply the most recent quarter’s resultant by 4.
 
(11)  

Common dividend payout is calculated as follows:

Dividends per common share
Adjusted EPS

 

BCE Inc. Supplementary Financial Information – Fourth Quarter 2008  Page 16