EX-3 4 m31337orexv3.htm SUPPLEMENTARY FINANCIAL INFORMATION - FIRST QUARTER 2006

exv3

EXHIBIT 3

BCE Investor Relations
Thane Fotopoulos		514-870-4619		thane.fotopoulos@bell.ca
Victoria Neal		514-870-8366		victoria.neal@bell.ca

BCE Consolidated ⁽¹⁾
Consolidated Operational Data

			Q1					Q1
($ millions, except per share amounts)			2006					2005				$ change				% change
Operating revenues				4,734					4,630				104				2.2	%
Operating expenses				(2,831	)				(2,727	)			(104	)			(3.8	%)
EBITDA (2)				1,903					1,903				—				0.0	%
EBITDA margin (3)				40.2	%				41.1	%						(0.9) pts
Amortization expense				(766	)				(761	)			(5	)			(0.7	%)
Net benefit plans cost				(142	)				(103	)			(39	)			(37.9	%)
Restructuring and other items				(88	)				4				(92	)			n.m.
Operating income				907					1,043				(136	)			(13.0	%)
Other income (expense)				(7	)				8				(15	)			n.m.
Interest expense				(251	)				(245	)			(6	)			(2.4	%)
Pre-tax earnings from continuing operations				649					806				(157	)			(19.5	%)
Income taxes				(183	)				(264	)			81				30.7	%
Non-controlling interest				(53	)				(63	)			10				15.9	%
Earnings from continuing operations				413					479				(66	)			(13.8	%)
Discontinued operations				81					12				69				n.m.
Net earnings				494					491				3				0.6	%
Dividends on preferred shares				(17	)				(17	)			—				0.0	%
Net earnings applicable to common shares				477					474				3				0.6	%
Net earnings per common share — basic
Continuing operations			$	0.43				$	0.50			$	(0.07	)			(14.0	%)
Discontinued operations			$	0.09				$	0.01			$	0.08				n.m.
Net earnings			$	0.52				$	0.51			$	0.01				2.0	%
Net earnings per common share — diluted
Continuing operations			$	0.43				$	0.50			$	(0.07	)			(14.0	%)
Discontinued operations			$	0.09				$	0.01			$	0.08				n.m.
Net earnings			$	0.52				$	0.51			$	0.01				2.0	%
Dividends per common share			$	0.33				$	0.33			$	—				0.0	%
Average number of common shares outstanding — basic (millions)				920.5					926.2
The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations				1					1
Discontinued operations				80					(1	)
Restructuring and other items				(58	)				2
Total				23					2
Impact on net earnings per share			$	0.03				$	—
EPS before restructuring and other items and net gains (losses) on investments (2)			$	0.49				$	0.51			$	(0.02	)			(3.9	%)

n.m. : not meaningful

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 2

BCE Consolidated ⁽¹⁾
Consolidated Operational Data — Historical Trend

						Total
($ millions, except per share amounts)		Q1 06				2005				Q4 05				Q3 05				Q2 05				Q1 05
Operating revenues			4,734				19,105				4,986				4,732				4,757				4,630
Operating expenses			(2,831	)			(11,508	)			(3,128	)			(2,868	)			(2,785	)			(2,727	)
EBITDA (2)			1,903				7,597				1,858				1,864				1,972				1,903
EBITDA margin (3)			40.2	%			39.8	%			37.3	%			39.4	%			41.5	%			41.1	%
Amortization expense			(766	)			(3,114	)			(791	)			(786	)			(776	)			(761	)
Net benefit plans cost			(142	)			(380	)			(65	)			(108	)			(104	)			(103	)
Restructuring and other items			(88	)			(55	)			(23	)			(31	)			(5	)			4
Operating income			907				4,048				979				939				1,087				1,043
Other income (expense)			(7	)			8				(17	)			(2	)			19				8
Interest expense			(251	)			(981	)			(246	)			(245	)			(245	)			(245	)
Pre-tax earnings from continuing operations			649				3,075				716				692				861				806
Income taxes			(183	)			(893	)			(224	)			(187	)			(218	)			(264	)
Non-controlling interest			(53	)			(267	)			(74	)			(57	)			(73	)			(63	)
Earnings from continuing operations			413				1,915				418				448				570				479
Discontinued operations			81				46				12				11				11				12
Net earnings			494				1,961				430				459				581				491
Dividends on preferred shares			(17	)			(70	)			(17	)			(18	)			(18	)			(17	)
Net earnings applicable to common shares			477				1,891				413				441				563				474
Net earnings per common share — basic
Continuing operations		$	0.43			$	1.99			$	0.43			$	0.46			$	0.60			$	0.50
Discontinued operations		$	0.09			$	0.05			$	0.01			$	0.02			$	0.01			$	0.01
Net earnings		$	0.52			$	2.04			$	0.44			$	0.48			$	0.61			$	0.51
Net earnings per common share — diluted
Continuing operations		$	0.43			$	1.99			$	0.43			$	0.46			$	0.60			$	0.50
Discontinued operations		$	0.09			$	0.05			$	0.01			$	0.02			$	0.01			$	0.01
Net earnings		$	0.52			$	2.04			$	0.44			$	0.48			$	0.61			$	0.51
Dividends per common share		$	0.33			$	1.32			$	0.33			$	0.33			$	0.33			$	0.33
Average number of common shares outstanding — basic (millions)			920.5				926.8				927.3				927.0				926.6				926.2
The following items are included in net earnings:
Net gains (losses) on investments Continuing operations			1				29				—				—				28				1
Discontinued operations			80				(1	)			—				—				—				(1	)
Restructuring and other items			(58	)			(38	)			(16	)			(21	)			(3	)			2
Total			23				(10	)			(16	)			(21	)			25				2
Impact on net earnings per share		$	0.03			$	(0.01	)		$	(0.02	)		$	(0.02	)		$	0.03			$	—
EPS before restructuring and other items and net gains (losses) on investments (2)		$	0.49			$	2.05			$	0.46			$	0.50			$	0.58			$	0.51

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 3

BCE Consolidated ⁽¹⁾
Segmented Data

			Q1					Q1
($ millions, except where otherwise indicated)			2006					2005				$ change				% change
Revenues
Residential				1,869					1,856				13				0.7	%
Business				1,509					1,478				31				2.1	%
Aliant				545					524				21				4.0	%
Other Bell Canada				474					479				(5	)			(1.0	%)
Inter-segment eliminations				(127	)				(128	)			1				0.8	%
Total Bell Canada				4,270					4,209				61				1.4	%
Other BCE
Bell Globemedia				394					356				38				10.7	%
Advertising				285					261				24				9.2	%
Subscriber				86					77				9				11.7	%
Production and Sundry				23					18				5				27.8	%
Telesat				118					108				10				9.3	%
Other				12					11				1				9.1	%
Total Other BCE				524					475				49				10.3	%
Inter-segment eliminations				(60	)				(54	)			(6	)			(11.1	%)
Total revenues				4,734					4,630				104				2.2	%
Operating income
Residential				503					526				(23	)			(4.4	%)
Business				205					240				(35	)			(14.6	%)
Aliant				94					87				7				8.0	%
Other Bell Canada				48					129				(81	)			(62.8	%)
Total Bell Canada				850					982				(132	)			(13.4	%)
Other BCE
Bell Globemedia				45					64				(19	)			(29.7	%)
Telesat				39					37				2				5.4	%
Other				(27	)				(40	)			13				32.5	%
Total Other BCE				57					61				(4	)			(6.6	%)
Total operating income				907					1,043				(136	)			(13.0	%)
Capital expenditures (4)
Residential				251					341				90				26.4	%
Business				131					196				65				33.2	%
Aliant				80					82				2				2.4	%
Other Bell Canada				76					47				(29	)			(61.7	%)
Total Bell Canada				538					666				128				19.2	%
Other BCE
Telesat				43					54				11				20.4	%
Other				12					4				(8	)			n.m.
Total capital expenditures				593					724				131				18.1	%

n.m. : not meaningful

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 4

BCE Consolidated ⁽¹⁾
Segmented Data — Historical Trend

						Total
($ millions, except where otherwise indicated)		Q1 06				2005				Q4 05				Q3 05				Q2 05				Q1 05
Revenues
Residential			1,869				7,599				1,924				1,929				1,890				1,856
Business			1,509				6,120				1,627				1,516				1,499				1,478
Aliant			545				2,097				535				520				518				524
Other Bell Canada			474				1,958				494				500				485				479
Inter-segment eliminations			(127	)			(524	)			(123	)			(139	)			(134	)			(128	)
Total Bell Canada			4,270				17,250				4,457				4,326				4,258				4,209
Other BCE
Bell Globemedia			394				1,555				465				335				399				356
Advertising			285				1,148				354				233				300				261
Subscriber			86				320				86				79				78				77
Production and Sundry			23				87				25				23				21				18
Telesat			118				475				118				112				137				108
Other			12				63				13				15				24				11
Total Other BCE			524				2,093				596				462				560				475
Inter-segment eliminations			(60	)			(238	)			(67	)			(56	)			(61	)			(54	)
Total revenues			4,734				19,105				4,986				4,732				4,757				4,630
Operating income
Residential			503				2,001				444				479				552				526
Business			205				910				236				213				221				240
Aliant			94				396				105				105				99				87
Other Bell Canada			48				448				99				111				109				129
Total Bell Canada			850				3,755				884				908				981				982
Other BCE
Bell Globemedia			45				289				101				29				95				64
Telesat			39				157				34				43				43				37
Other			(27	)			(153	)			(40	)			(41	)			(32	)			(40	)
Total Other BCE			57				293				95				31				106				61
Total operating income			907				4,048				979				939				1,087				1,043
Capital expenditures (4)
Residential			251				1,519				350				434				394				341
Business			131				897				206				249				246				196
Aliant			80				363				77				100				104				82
Other Bell Canada			76				343				103				90				103				47
Total Bell Canada			538				3,122				736				873				847				666
Other BCE
Telesat			43				260				62				91				53				54
Other			12				46				33				4				5				4
Total capital expenditures			593				3,428				831				968				905				724

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 5

BCE Consolidated ⁽¹⁾
Consolidated Balance Sheet Data

		March 31				December 31
($ millions, except where otherwise indicated		2006				2005
ASSETS
Current assets
Cash and cash equivalents			878				363
Accounts receivable			1,726				1,766
Other current assets			1,192				1,142
Current assets of discontinued operations			—				402
Total current assets			3,796				3,673
Capital assets			22,062				22,062
Other long-term assets			2,776				2,914
Indefinite-life intangible assets			3,031				3,031
Goodwill			7,902				7,887
Non-current assets of discontinued operations			318				1,063
Total assets			39,885				40,630
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities			3,054				3,435
Interest payable			265				182
Dividends payable			322				343
Debt due within one year			1,210				1,373
Current liabilities of discontinued operations			88				281
Total current liabilities			4,939				5,614
Long-term debt			12,978				12,119
Other long-term liabilities			4,972				5,028
Non-current liabilities of discontinued operations			—				250
Total liabilities			22,889				23,011
Non-controlling interest			2,633				2,898
SHAREHOLDERS’ EQUITY
Preferred shares			1,670				1,670
Common shareholders’ equity
Common shares			16,467				16,806
Treasury stock			(62	)			—
Contributed surplus			1,036				1,081
Deficit			(4,747	)			(4,763	)
Currency translation adjustment			(1	)			(73	)
Total common shareholders’ equity			12,693				13,051
Total shareholders’ equity			14,363				14,721
Total liabilities and shareholders’ equity			39,885				40,630
Number of common shares outstanding (A)			906.2				927.3
Total Net Debt			13,310				13,129
Total Capitalization			30,306				30,748
Key ratios
Net debt : Total Capitalization			43.9	%			42.7	%
Net debt : Trailing 12 month EBITDA			1.75				1.73
EBITDA : Interest (trailing 12 month)			7.70				7.74

^(A) Excludes 2.2 million of treasury stock

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 6

BCE Consolidated
Consolidated Cash Flow Data

			Q1					Q1
($ millions, except where otherwise indicated)			2006					2005				$ change
Cash flows from operating activities
Earnings from continuing operations				413					479				(66	)
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities:
Amortization expense				766					761				5
Net benefit plans cost				142					103				39
Restructuring and other items				88					(4	)			92
Net gains on investments				(2	)				(2	)			—
Future income taxes				200					107				93
Non-controlling interest				53					63				(10	)
Contributions to employee pension plans				(37	)				(94	)			57
Other employee future benefit plan payments				(25	)				(23	)			(2	)
Payments of restructuring and other items				(37	)				(101	)			64
Operating assets and liabilities				(621	)				(373	)			(248	)
				940					916				24
Capital expenditures				(593	)				(724	)			131
Other investing activities				(8	)				(15	)			7
Cash dividends paid on preferred shares				(21	)				(21	)			—
Cash dividends paid by subsidiaries to non-controlling interest				(61	)				(50	)			(11	)
Free Cash Flow from operations, before common dividends (2)				257					106				151
Cash dividends paid on common shares				(305	)				(278	)			(27	)
Free Cash Flow from operations, after common dividends (2)				(48	)				(172	)			124
Business acquisitions				(27	)				(87	)			60
Bell Aliant Regional Communications Income Fund				(22	)				—				(22	)
Increase in investments				(14	)				(128	)			114
Decrease in investments				51					2				49
Free Cash Flow after investments and divestitures				(60	)				(385	)			325
Other financing activities
Decrease in notes payable and bank advances				(58	)				(155	)			97
Issue of long-term debt				1,095					785				310
Repayment of long-term debt				(487	)				(54	)			(433	)
Issue of common shares				1					9				(8	)
Repurchase of common shares cancelled				(525	)				—				(525	)
Issue of equity securities by subsidiaries to non-controlling interest				3					—				3
Redemption of equity securities by subsidiaries from non-controlling interest				—					(17	)			17
Return of capital by subsidiary to non-controlling interest				(279	)				—				(279	)
Other financing activities				(25	)				(14	)			(11	)
				(275	)				554				(829	)
Cash provided by (used in) continuing operations				(335	)				169				(504	)
Cash provided by (used in) discontinued operations				768					(23	)			791
Net increase in cash and cash equivalents				433					146				287
Cash and cash equivalents at beginning of period				445					380				65
Cash and cash equivalents at end of period				878					526				352
Consists of:
Cash and cash equivalents of continuing operations				878					482				396
Cash and cash equivalents of discontinued operations				—					44				(44	)
Total				878					526				352
Other information
Capital expenditures as a percentage of revenues				12.5	%				15.6	%		3.1 pts
Cash flow per share (5)			$	0.38				$	0.21			$	0.17
Annualized cash flow yield (6)				4.0	%				1.5	%		2.5 pts
Common dividend payout				63.9	%				58.6	%		5.3 pts

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 7

BCE Consolidated
Consolidated Cash Flow Data — Historical Trend

						Total
($ millions, except where otherwise indicated)		Q106				2005				Q4 05				Q3 05				Q2 05				Q1 05
Cash flows from operating activities
Earnings from continuing operations			413				1,915				418				448				570				479
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities:
Amortization expense			766				3,114				791				786				776				761
Net benefit plans cost			142				380				65				108				104				103
Restructuring and other items			88				55				23				31				5				(4	)
Net (gains) losses on investments			(2	)			(33	)			1				—				(32	)			(2	)
Future income taxes			200				746				465				111				63				107
Non-controlling interest			53				267				74				57				73				63
Contributions to employee pension plans			(37	)			(226	)			(65	)			(33	)			(34	)			(94	)
Other employee future benefit plan payments			(25	)			(93	)			(24	)			(24	)			(22	)			(23	)
Payments of restructuring and other items			(37	)			(176	)			(23	)			(24	)			(28	)			(101	)
Operating assets and liabilities			(621	)			(390	)			(140	)			195				(72	)			(373	)
			940				5,559				1,585				1,655				1,403				916
Capital expenditures			(593	)			(3,428	)			(831	)			(968	)			(905	)			(724	)
Other investing activities			(8	)			4				32				(3	)			(10	)			(15	)
Cash dividends paid on preferred shares			(21	)			(86	)			(22	)			(21	)			(22	)			(21	)
Cash dividends paid by subsidiaries to non-controlling interest			(61	)			(192	)			(35	)			(47	)			(60	)			(50	)
Free Cash Flow from operations, before common dividends (2)			257				1,857				729				616				406				106
Cash dividends paid on common shares			(305	)			(1,195	)			(306	)			(306	)			(305	)			(278	)
Free Cash Flow from operations, after common dividends (2)			(48	)			662				423				310				101				(172	)
Business acquisitions			(27	)			(228	)			(50	)			(56	)			(35	)			(87	)
Bell Aliant Regional Communications Income Fund			(22	)			—				—				—				—				—
Increase in investments			(14	)			(233	)			(17	)			(75	)			(13	)			(128	)
Decrease in investments			51				19				12				—				5				2
Free Cash Flow after investments and divestitures			(60	)			220				368				179				58				(385	)
Other financing activities
Increase (decrease) in notes payable and bank advances			(58	)			(66	)			(187	)			(65	)			341				(155	)
Issue of long-term debt			1,095				1,190				—				200				205				785
Repayment of long-term debt			(487	)			(1,178	)			(196	)			(209	)			(719	)			(54	)
Issue of common shares			1				25				—				12				4				9
Repurchase of common shares cancelled			(525	)			—				—				—				—				—
Issue of equity securities by subsidiaries to non-controlling interest			3				1				—				1				—				—
Redemption of equity securities by subsidiaries from non-controlling interest			—				(78	)			(18	)			(22	)			(21	)			(17	)
Return of capital by subsidiary to non-controlling interest			(279	)			—				—				—				—				—
Other financing activities			(25	)			(64	)			(19	)			(13	)			(18	)			(14	)
			(275	)			(170	)			(420	)			(96	)			(208	)			554
Cash provided by (used in) continuing operations			(335	)			50				(52	)			83				(150	)			169
Cash provided by (used in) discontinued operations			768				15				22				12				4				(23	)
Net increase (decrease) in cash and cash equivalents			433				65				(30	)			95				(146	)			146
Cash and cash equivalents at beginning of period			445				380				475				380				526				380
Cash and cash equivalents at end of period			878				445				445				475				380				526
Consists of:
Cash and cash equivalents of continuing operations			878				363				363				415				332				482
Cash and cash equivalents of discontinued operations			—				82				82				60				48				44
Total			878				445				445				475				380				526
Other information
Capital expenditures as a percentage of revenues			12.5	%			17.9	%			16.7	%			20.5	%			19.0	%			15.6	%
Cash flow per share (5)		$	0.38			$	2.30			$	0.81			$	0.74			$	0.54			$	0.21
Annualized cash flow yield (6)			4.0	%			7.2	%			11.3	%			8.3	%			6.0	%			1.5	%
Common dividend payout			63.9	%			63.2	%			74.1	%			69.4	%			54.2	%			58.6	%

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 8

Proportionate Net Debt, Preferreds and EBITDA

BCE Corporate and Bell Canada Net debt and preferreds

At March 31, 2006										Bell				Inter-				Total
		Bell Canada								Canada				company				Bell				BCE Inc.
($ millions, except where otherwise indicated)		(excl. Aliant)				Aliant				Statutory				eliminations				Canada				Corporate
Cash and cash equivalents			(605	)			(81	)			(686	)							(686	)			(4	)
Long-term debt			9,208				747				9,955				(327	)			9,628				1,700
Debt due within one year			1,697				109				1,806				(1,080	)			726				300
Long-term note receivable from BCH			(498	)			—				(498	)			498				—				—
PPA fair value increment (7)																			96				—
Net debt			9,802				775				10,577				(909	)			9,764				1,996
Preferred shares — Bell Canada (8)			1,100								1,100								1,100				—
Preferred shares — Aliant (8)							172				172								172				—
Perpetual Preferred shares — BCE			—				—				—								—				1,670
Nortel common shares at market			—				—				—								—				(53	)
Net debt and preferreds			10,902				947				11,849				(909	)			11,036				3,613

Proportionate net debt and preferreds, Trailing EBITDA

For the quarter ended March 31, 2006		%				Proportionate
		owned				net debt and				TOTAL EBITDA																				PROPORTIONATE EBITDA
($ millions, except where otherwise indicated)		by BCE				preferreds				Q1 06				Q4 05				Q3 05				Q2 05				Trailing				Q1 06				Q4 05				Q3 05				Q2 05				Trailing
Bell Canada (excluding Aliant)			100	%			10,089	B			1,598				1,504				1,578				1,618				6,298				1,598				1,504				1,578				1,618				6,298
Aliant			53.1	%			503				220				225				226				221				892				117				120				120				117				474
Total Bell Canada Consolidated							10,592				1,818				1,729				1,804				1,839				7,190				1,715				1,624				1,698				1,735				6,772
Other BCE
Bell Globemedia			68.5	%			898				62				120				46				114				342				36				73				23				68				200
Telesat			100	%			198				70				65				70				71				276				70				65				70				71				276
Corporate and other			100	%			3,622				(26	)			(36	)			(36	)			(39	)			(137	)			(26	)			(36	)			(36	)			(39	)			(137	)
Total Other BCE							4,718				106				149				80				146				481				80				102				57				100				339
Inter-segment eliminations							—				(21	)			(20	)			(20	)			(13	)			(74	)			(21	)			(20	)			(20	)			(13	)			(74	)
Total							15,310				1,903				1,858				1,864				1,972				7,597				1,774				1,706				1,735				1,822				7,037

^B Bell Canada (excl. Aliant) net debt and preferreds of $10,902 million less $909 million of inter-company eliminations plus $96 million upon consolidation (PPA fair value increment).

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 9

Bell Canada Consolidated⁽¹⁾
Operational Data

			Q1					Q1
($ millions, except where otherwise indicated)			2006					2005				$ change				% change
Revenues
Local and access				1,311					1,368				(57	)			(4.2	%)
Long distance				456					538				(82	)			(15.2	%)
Wireless				804					713				91				12.8	%
Data				1,001					951				50				5.3	%
Video				277					221				56				25.3	%
Terminal sales and other				421					418				3				0.7	%
Total operating revenues				4,270					4,209				61				1.4	%
Operating expenses				(2,452	)				(2,394	)			(58	)			(2.4	%)
EBITDA (2)				1,818					1,815				3				0.2	%
EBITDA margin (%) (3)				42.6	%				43.1	%						(0.5		) pts
Amortization expense				(739	)				(732	)			(7	)			(1.0	%)
Net benefit plans cost				(142	)				(106	)			(36	)			(34.0	%)
Restructuring and other items				(87	)				5				(92	)			n.m.
Operating income				850					982				(132	)			(13.4	%)
Other income (expense)				(1	)				11				(12	)			n.m.
Interest expense				(204	)				(206	)			2				1.0	%
Pre-tax earnings				645					787				(142	)			(18.0	%)
Income taxes				(131	)				(229	)			98				42.8	%
Non-controlling interest				(26	)				(16	)			(10	)			(62.5	%)
Net earnings				488					542				(54	)			(10.0	%)
Dividends on preferred shares				(14	)				(14	)			—				0.0	%
Net earnings applicable to common shares				474					528				(54	)			(10.2	%)
Other information
Cash flow information
Free Cash Flow (FCF) (2)
Cash from operating activities				960					860				100				11.6	%
Capital expenditures				(538	)				(666	)			128				19.2	%
Dividends and distributions				(498	)				(422	)			(76	)			(18.0	%)
Other investing items				(2	)				(4	)			2				50.0	%
Total				(78	)				(232	)			154				66.4	%
Capital expenditures as a percentage of revenues (%)				12.6	%				15.8	%						3.2		pts
			March 31					Dec. 31
Balance Sheet Information				2006					2005
Net Debt
Long-term debt				9,955					10,177
Debt due within one year				1,806					836
Less: Cash and cash equivalents				(686	)				(233	)
Total Net Debt				11,075					10,780
Non-controlling interest				1,215					1,212
Total shareholders’ equity				10,191					10,135
Total Capitalization				22,481					22,127
Net Debt: Total Capitalization				49.3	%				48.7	%
Net Debt: Trailing 12 month EBITDA				1.54					1.50
EBITDA : Interest (trailing 12 month)				8.72					8.69

n.m. : not meaningful

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 10

Bell Canada Consolidated ⁽¹⁾
Operational Data — Historical Trend

						Total
($ millions, except where otherwise indicated)		Q1 06				2005				Q4 05				Q3 05				Q2 05				Q1 05
Revenues
Local and access			1,311				5,446				1,343				1,367				1,368				1,368
Long distance			456				2,044				478				510				518				538
Wireless			804				3,097				812				801				771				713
Data			1,001				4,015				1,097				1,001				966				951
Video			277				976				268				251				236				221
Terminal sales and other			421				1,672				459				396				399				418
Total operating revenues			4,270				17,250				4,457				4,326				4,258				4,209
Operating expenses			(2,452	)			(10,063	)			(2,728	)			(2,522	)			(2,419	)			(2,394	)
EBITDA (2)			1,818				7,187				1,729				1,804				1,839				1,815
EBITDA margin (%) (3)			42.6	%			41.7	%			38.8	%			41.7	%			43.2	%			43.1	%
Amortization expense			(739	)			(2,989	)			(755	)			(756	)			(746	)			(732	)
Net benefit plans cost			(142	)			(389	)			(66	)			(110	)			(107	)			(106	)
Restructuring and other items			(87	)			(54	)			(24	)			(30	)			(5	)			5
Operating income			850				3,755				884				908				981				982
Other income (expense)			(1	)			39				—				15				13				11
Interest expense			(204	)			(827	)			(208	)			(207	)			(206	)			(206	)
Pre-tax earnings			645				2,967				676				716				788				787
Income taxes			(131	)			(743	)			(138	)			(198	)			(178	)			(229	)
Non-controlling interest			(26	)			(71	)			(22	)			(16	)			(17	)			(16	)
Net earnings			488				2,153				516				502				593				542
Dividends on preferred shares			(14	)			(55	)			(14	)			(14	)			(13	)			(14	)
Net earnings applicable to common shares			474				2,098				502				488				580				528
Other information
Cash flow information
Free Cash Flow (FCF) (2)
Cash from operating activities			960				5,508				1,630				1,551				1,467				860
Capital expenditures			(538	)			(3,122	)			(736	)			(873	)			(847	)			(666	)
Dividends and distributions			(498	)			(1,747	)			(404	)			(468	)			(453	)			(422	)
Other investing items			(2	)			5				1				4				4				(4	)
Total			(78	)			644				491				214				171				(232	)
Capital expenditures as a percentage of revenues (%)			12.6	%			18.1	%			16.5	%			20.2	%			19.9	%			15.8	%
		March 31				Dec. 31
Balance Sheet Information			2006				2005
Net Debt
Long-term debt			9,955				10,177
Debt due within one year			1,806				836
Less: Cash and cash equivalents			(686	)			(233	)
Total Net Debt			11,075				10,780
Non-controlling interest			1,215				1,212
Total shareholders’ equity			10,191				10,135
Total Capitalization			22,481				22,127
Net Debt: Total Capitalization			49.3	%			48.7	%
Net Debt : Trailing 12 month EBITDA			1.54				1.50
EBITDA : Interest (trailing 12 month)			8.72				8.69

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 11

Bell Canada Consolidated ⁽¹⁾
Statistical Data

			Q1					Q1
			2006					2005				% change
Wireline
Local
Network access services (k)
Residential				7,842					8,332				(5.9	%)
Business				4,600					4,518				1.8	%
Total				12,442					12,850				(3.2	%)
Long Distance (LD)
Conversation minutes (M)				4,582					4,588				(0.1	%)
Average revenue per minute ($)				0.094					0.107				(12.1	%)
Data
Internet subscribers (9) (k)
High Speed Internet net activations (k)				71					128				(44.5	%)
High Speed Internet subscribers (k)				2,266					1,936				17.0	%
Dial-up Internet subscribers (k)				564					696				(19.0	%)
				2,830					2,632				7.5	%
Wireless
Cellular & PCS net activations (k)
Pre-paid				21					42				(50.0	%)
Post-paid				38					(5	)			n.m.
				59					37				59.5	%
Cellular & PCS subscribers (k)
Pre-paid				1,449					1,243				16.6	%
Post-paid				4,051					3,719				8.9	%
				5,500					4,962				10.8	%
Average revenue per unit (ARPU) ($/month)				48					46				4.3	%
Pre-paid				13					11				18.2	%
Post-paid				61					57				7.0	%
Churn (%) (average per month)				1.6	%				1.6	%		0.0		pts
Pre-paid				2.5	%				1.8	%		(0.7		)pts
Post-paid				1.3	%				1.6	%		0.3		pts
Usage per subscriber (min/month)				249					232				7.3	%
Cost of acquisition (COA) (10) ($/sub)				394					373				(5.6	%)
Wireless EBITDA ($ millions)				355					300				18.3	%
Wireless EBITDA margin (11)				43.0	%				41.4	%		1.6		pts
Wireless capital expenditures ($ millions)				69					64				(7.8	%)
Wireless capital expenditures as a percentage of revenue				8.6	%				9.0	%		0.4		pts
Paging subscribers (k)				328					404				(18.8	%)
Paging average revenue per unit ($/month)				10					15				(33.3	%)
Video (DTH and VDSL)
Total subscribers (k)				1,739					1,532				13.5	%
Net subscriber activations (k)				12					29				(58.6	%)
ARPU ($/month)				53					48				10.4	%
Video EBITDA ($ millions)				47					4				n.m.
Churn (%) (average per month)				0.9	%				0.8	%		(0.1		)pts

BCE Inc. Supplementary Financial Information — First Quarter 2006      Page 12

Bell Canada Consolidated ⁽¹⁾
Statistical Data — Historical Trend

						TOTAL
		Q1 06				2005				Q4 05				Q3 05				Q2 05				Q1 05
Wireline
Local
Network access services (k)
Residential			7,842								7,985				8,133				8,189				8,332
Business			4,600								4,596				4,570				4,538				4,518
Total			12,442								12,581				12,703				12,727				12,850
Long Distance (LD)
Conversation minutes (M)			4,582				18,306				4,567				4,484				4,667				4,588
Average revenue per minute ($)			0.094				0.102				0.096				0.105				0.101				0.107
Data
Internet subscribers (9) (k)
High Speed Internet net activations (k)			71				387				61				106				92				128
High Speed Internet subscribers (k)			2,266								2,195				2,134				2,028				1,936
Dial-up Internet subscribers (k)			564								586				621				666				696
			2,830								2,781				2,755				2,694				2,632
Wireless
Cellular & PCS net activations (k)
Pre-paid			21				227				83				73				29				42
Post-paid			38				289				127				50				117				(5	)
			59				516				210				123				146				37
Cellular & PCS subscribers (k)
Pre-paid			1,449								1,428				1,345				1,272				1,243
Post-paid			4,051								4,013				3,886				3,836				3,719
			5,500								5,441				5,231				5,108				4,962
Average revenue per unit (ARPU) ($/month)			48				49				51				51				50				46
Pre-paid			13				14				14				14				16				11
Post-paid			61				61				64				63				61				57
Churn (%) (average per month)			1.6	%			1.6	%			1.5	%			1.5	%			1.6	%			1.6	%
Pre-paid			2.5	%			1.9	%			2.2	%			1.6	%			2.1	%			1.8	%
Post-paid			1.3	%			1.4	%			1.3	%			1.5	%			1.4	%			1.6	%
Usage per subscriber (min/month)			249				255				261				265				262				232
Cost of acquisition (COA) (10) ($/sub)			394				406				409				432				401				373
Wireless EBITDA ($ millions)			355				1,307				311				363				333				300
Wireless EBITDA margin (11)			43.0	%			41.2	%			37.1	%			44.0	%			42.4	%			41.4	%
Wireless capital expenditures ($ millions)			69				343				58				103				118				64
Wireless capital expenditures as a percentage of revenue			8.6	%			11.1	%			7.1	%			12.9	%			15.3	%			9.0	%
Paging subscribers (k)			328								347				364				385				404
Paging average revenue per unit ($/month)			10				11				10				10				10				15
Video (DTH and VDSL)
Total subscribers (k)			1,739								1,727				1,677				1,595				1,532
Net subscriber activations (k)			12				224				50				82				63				29
ARPU ($/month)			53				50				52				51				50				48
Video EBITDA ($ millions)			47				45				23				12				6				4
Churn (%) (average per month)			0.9	%			0.9	%			1.0	%			1.0	%			0.9	%			0.8	%

BCE Inc. Supplementary Financial Information — First Quarter 2006     Page 13

Accompanying Notes

(1)		We have reclassified some of the figures for the comparative period to make them consistent with the current period’s presentation.
(2)		Non-GAAP Financial Measures
		EBITDA
		The term, EBITDA (earnings before interest, taxes, depreciation and amortization), does not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP). It is therefore unlikely to be comparable to similar measures presented by other companies. EBITDA is presented on a consistent basis from period to period.
		We define EBITDA as operating revenues less operating expenses, which means it represents operating income before amortization expense, net benefit plans cost, and restructuring and other items.
		We use EBITDA, among other measures, to assess the operating performance of our ongoing businesses without the effects of amortization expense, net benefit plans cost, and restructuring and other items. We exclude amortization expense and net benefit plans cost because they largely depend on the accounting methods and assumptions a company uses, as well as non-operating factors, such as the historical cost of capital assets and the fund performance of a company’s pension plans. Excluding restructuring and other items does not imply they are necessarily 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.
		EBITDA should not be confused with net cash flows from operating activities. The most comparable Canadian GAAP financial measure is operating income.
		EPS before restructuring and other items and net gains (losses) on investments
		The term, EPS (earnings per share) before net gains (losses) on investments and restructuring and other items, does not have any standardized meaning prescribed by GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies.
		We use EPS before net gains (losses) on investments and restructuring and other items, among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other items and net 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. The exclusion of these items does not imply they are necessarily 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 prescribed by Canadian GAAP. It is therefore unlikely to be comparable to similar measures presented by other companies. Free cash flow is presented on a consistent basis from period to period, which allows us to compare our financial performance on a consistent basis.
		We define free cash flow as cash from operating activities after capital expenditures, total dividends and other investing activities.
		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 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.

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 14

Accompanying Notes (continued)

(3)		EBITDA margin is calculated as follows:
		EBITDA
		Operating revenues
(4)		Effective Q2 2005 the total Wireless capital expenditures are segregated between the Residential and Business segments. Prior quarters have been restated accordingly.
(5)		Cash flow per share is calculated as follows:
		Cash flow from operations less capital expenditures Average number of common shares outstanding during the period
(6)		Annualized cash flow yield is calculated as follows:
		Free cash flow from operations before common dividends
		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.
(7)		Reflects an increase in the total Bell Canada debt as a result of the completion of the purchase price allocation (PPA) relating to the repurchase of SBC’s 20% interest in Bell Canada, which resulted in an increase in long-term debt of $165 million. This increase in long-term debt will be applied against interest expense ($3 million in Q1 2006) over the remaining terms of the related long-term debt.
(8)		At the BCE Consolidated level, Third Party Preferred Shares reflected in the financial statements of subsidiaries are included in non-controlling interest on the balance sheet.
(9)		High Speed Internet subscribers include Residential, Business and Wholesale. Dial-up Internet subscribers include Residential and Business.
(10)		Includes allocation of selling costs from Bell Canada and excludes costs of migrating from analog to digital. Cost of Acquisition (COA) per subscriber is reflected on a consolidated basis.
(11)		Wireless EBITDA margins are calculated based on total Wireless operating revenues (i.e. external revenues as shown on pages 10 and 11 plus inter-company revenues).

BCE Inc. Supplementary Financial Information — First Quarter 2006 Page 15