EX-3 11 suppfinancial.htm SUPPLEMENTARY FINANCIAL INFORMATION

Supplementary Financial Information

EXHIBIT 3

BCE Consolidated ⁽¹⁾
Consolidated Operational Data

		Q1				Q1
($ millions, except per share amounts) (unaudited)		2007				2006				$ change		% change
Operating revenues		4,385				4,343				42		1.0%
Operating expenses		(2,543	)			(2,509	)			(34	)	(1.4%	)
Net benefit plan costs		(102	)			(136	)			34		25.0%
EBITDA (3)		1,740				1,698				42		2.5%
EBITDA margin (4)		39.7%				39.1%						0.6 pts
Amortization expense		(787	)			(756	)			(31	)	(4.1%	)
Restructuring and other items		(36	)			(88	)			52		59.1%
Operating income		917				854				63		7.4%
Other income (expense)		132				(9	)			141		n.m.
Interest expense		(215	)			(232	)			17		7.3%
Pre-tax earnings from continuing operations		834				613				221		36.1%
Income taxes		(213	)			(169	)			(44	)	(26.0%	)
Non-controlling interest		(95	)			(41	)			(54	)	n.m.
Earnings from continuing operations		526				403				123		30.5%
Discontinued operations		3				91				(88	)	(96.7%	)
Net earnings		529				494				35		7.1%
Dividends on preferred shares		(30	)			(17	)			(13	)	(76.5%	)
Net earnings applicable to common shares		499				477				22		4.6%
Net earnings per common share – basic
Continuing operations	$	0.62			$	0.42			$	0.20		47.6%
Discontinued operations	$	–			$	0.10			$	(0.10	)	n.m.
Net earnings	$	0.62			$	0.52			$	0.10		19.2%
Net earnings per common share – diluted
Continuing operations	$	0.62			$	0.42			$	0.20		47.6%
Discontinued operations	$	–			$	0.10			$	(0.10	)	n.m.
Net earnings	$	0.62			$	0.52			$	0.10		19.2%
Dividends per common share	$	0.365			$	0.33			$	0.04		12.1%
Average number of common shares outstanding – basic (millions)		806.0				920.5
Average number of common shares outstanding – diluted (millions)		806.6				920.9
The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		103				1				102		n.m.
Discontinued operations		1				80				(79	)	(98.8%	)
Restructuring and other items		(25	)			(58	)			33		56.9%
Total		79				23				56		n.m.
Impact on net earnings per share	$	0.10			$	0.03			$	0.07		n.m.
EPS before restructuring and other items, net gains on investments, and costs incurred to form Bell Aliant (3)	$	0.52			$	0.49			$	0.03		6.1%
n.m.: not meaningful

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 2

BCE Consolidated ⁽¹⁾
Consolidated Operational Data – Historical Trend

						Total
($ millions, except per share amounts) (unaudited)		Q1 07				2006				Q4 06				Q3 06				Q2 06				Q1 06
Operating revenues		4,385				17,656				4,532				4,407				4,374				4,343
Operating expenses		(2,543	)			(10,363	)			(2,770	)			(2,577	)			(2,507	)			(2,509	)
Net benefit plan costs		(102	)			(511	)			(123	)			(118	)			(134	)			(136	)
EBITDA		1,740				6,782				1,639				1,712				1,733				1,698
EBITDA margin		39.7%				38.4%				36.2%				38.8%				39.6%				39.1%
Amortization expense		(787	)			(3,128	)			(796	)			(787	)			(789	)			(756	)
Restructuring and other items		(36	)			(355	)			(91	)			(126	)			(50	)			(88	)
Operating income		917				3,299				752				799				894				854
Other income (expense)		132				(188	)			(29	)			(114	)			(36	)			(9	)
Interest expense		(215	)			(940	)			(237	)			(244	)			(227	)			(232	)
Pre-tax earnings from continuing operations		834				2,171				486				441				631				613
Income taxes		(213	)			(74	)			329				(81	)			(153	)			(169	)
Non-controlling interest		(95	)			(217	)			(101	)			(38	)			(37	)			(41	)
Earnings from continuing operations		526				1,880				714				322				441				403
Discontinued operations		3				127				3				(20	)			53				91
Net earnings		529				2,007				717				302				494				494
Dividends on preferred shares		(30	)			(70	)			(18	)			(17	)			(18	)			(17	)
Net earnings applicable to common shares		499				1,937				699				285				476				477
Net earnings per common share – basic
Continuing operations	$	0.62			$	2.10			$	0.83			$	0.38			$	0.47			$	0.42
Discontinued operations	$	–			$	0.15			$	0.01			$	(0.02	)		$	0.06			$	0.10
Net earnings	$	0.62			$	2.25			$	0.84			$	0.36			$	0.53			$	0.52
Net earnings per common share – diluted
Continuing operations	$	0.62			$	2.10			$	0.83			$	0.38			$	0.47			$	0.42
Discontinued operations	$	–			$	0.15			$	0.01			$	(0.02	)		$	0.06			$	0.10
Net earnings	$	0.62			$	2.25			$	0.84			$	0.36			$	0.53			$	0.52
Dividends per common share	$	0.365			$	1.32			$	0.33			$	0.33			$	0.33			$	0.33
Average number of common shares outstanding – basic (millions)		806.0				861.4				811.6				818.8				896.4				920.5
Average number of common shares outstanding – diluted (millions)		806.6				861.6				812.1				819.0				896.7				920.9
The following items are included in net earnings:
Net gains (losses) on investments
Continuing operations		103				419				410				8				–				1
Discontinued operations		1				106				2				(11	)			35				80
Restructuring and other items		(25	)			(222	)			(66	)			(71	)			(27	)			(58	)
Cost incurred to form Bell Aliant		–				(42	)			–				(28	)			(14	)			–
Total		79				261				346				(102	)			(6	)			23
Impact on net earnings per share	$	0.10			$	0.30			$	0.40			$	(0.12	)		$	(0.01	)		$	0.03
EPS before restructuring and other items, net gains on investments, and costs incurred to form Bell Aliant	$	0.52			$	1.95			$	0.44			$	0.48			$	0.54			$	0.49

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 3

BCE Consolidated ⁽¹⁾
Segmented Data ⁽²⁾

	Q1		Q1
($ millions, except where otherwise indicated) (unaudited)	2007		2006		$ change		% change
Revenues
Bell Wireline	2,638		2,696		(58	)	(2.2%	)
Bell Wireless	952		881		71		8.1%
Inter-segment eliminations	(11	)	(13	)	2		15.4%
Total Bell	3,579		3,564		15		0.4%
Bell Aliant	851		823		28		3.4%
Telesat	122		118		4		3.4%
Inter-segment eliminations	(167	)	(162	)	(5	)	(3.1%	)
Total BCE	4,385		4,343		42		1.0%
EBITDA
Bell Wireline	974		996		(22	)	(2.2%	)
Margin	36.9%		36.9%				(0.0) pts
Bell Wireless	405		330		75		22.7%
Margin	42.5%		37.5%				5.0 pts
Total Bell	1,379		1,326		53		4.0%
Margin	38.5%		37.2%				1.3 pts
Bell Aliant	316		323		(7	)	(2.2%	)
Margin	37.1%		39.2%				(2.1) pts
Telesat	67		69		(2	)	(2.9%	)
Inter-segment eliminations	(22	)	(20	)	(2	)	(10.0%	)
Total BCE	1,740		1,698		42		2.5%
Margin	39.7%		39.1%				0.6 pts
Operating income
Bell Wireline	416		436		(20	)	(4.6%	)
Bell Wireless	295		218		77		35.3%
Total Bell	711		654		57		8.7%
Bell Aliant	177		169		8		4.7%
Telesat	38		39		(1	)	(2.6%	)
Inter-segment eliminations	(9	)	(8	)	(1	)	(12.5%	)
Total BCE	917		854		63		7.4%
Capital expenditures
Bell Wireline	403		349		(54	)	(15.5%	)
Capital Intensity (5)	15.3%		12.9%				(2.4) pts
Bell Wireless	139		77		(62	)	(80.5%	)
Capital Intensity	14.6%		8.7%				(5.9) pts
Total Bell	542		426		(116	)	(27.2%	)
Capital Intensity	15.1%		12.0%				(3.1) pts
Bell Aliant	115		112		(3	)	(2.7%	)
Telesat	65		43		(22	)	(51.2%	)
Total BCE	722		581		(141	)	(24.3%	)
Capital Intensity	16.5%		13.4%				(3.1) pts

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 4

BCE Consolidated ⁽¹⁾
Segmented Data – Historical Trend ⁽²⁾

			Total
($ millions, except where otherwise indicated) (unaudited)	Q1 07		2006		Q4 06		Q3 06		Q2 06		Q1 06
Revenues
Bell Wireline	2,638		10,763		2,745		2,646		2,676		2,696
Bell Wireless	952		3,827		1,016		993		937		881
Inter-segment eliminations	(11	)	(49	)	(11	)	(11	)	(14	)	(13	)
Total Bell	3,579		14,541		3,750		3,628		3,599		3,564
Bell Aliant	851		3,301		838		825		815		823
Telesat	122		479		128		113		120		118
Inter-segment eliminations	(167	)	(665	)	(184	)	(159	)	(160	)	(162	)
Total BCE	4,385		17,656		4,532		4,407		4,374		4,343
EBITDA
Bell Wireline	974		3,845		892		952		1,005		996
Margin	36.9%		35.7%		32.5%		36.0%		37.6%		36.9%
Bell Wireless	405		1,435		373		383		349		330
Margin	42.5%		37.5%		36.7%		38.6%		37.2%		37.5%
Total Bell	1,379		5,280		1,265		1,335		1,354		1,326
Margin	38.5%		36.3%		33.7%		36.8%		37.6%		37.2%
Bell Aliant	316		1,333		336		340		334		323
Margin	37.1%		40.4%		40.1%		41.2%		41.0%		39.2%
Telesat	67		263		63		61		70		69
Inter-segment eliminations	–22		–94		–25		–24		–25		–20
Total BCE	1,740		6,782		1,639		1,712		1,733		1,698
Margin	39.7%		38.4%		36.2%		38.8%		39.6%		39.1%
Operating income
Bell Wireline	416		1,494		269		340		449		436
Bell Wireless	295		998		265		276		239		218
Total Bell	711		2,492		534		616		688		654
Bell Aliant	177		699		195		162		173		169
Telesat	38		142		32		32		39		39
Inter-segment eliminations	(9	)	–34		–9		–11		–6		–8
Total BCE	917		3,299		752		799		894		854
Capital expenditures
Bell Wireline	403		1,931		609		452		521		349
Capital Intensity	15.3%		17.9%		22.2%		17.1%		19.5%		12.9%
Bell Wireless	139		480		163		133		107		77
Capital Intensity	14.6%		12.5%		16.0%		13.4%		11.4%		8.7%
Total Bell	542		2,411		772		585		628		426
Capital Intensity	15.1%		16.6%		20.6%		16.1%		17.4%		12.0%
Bell Aliant	115		517		131		131		143		112
Telesat	65		205		32		44		86		43
Total BCE	722		3,133		935		760		857		581
Capital Intensity	16.5%		17.7%		20.6%		17.2%		19.6%		13.4%

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 5

 

Bell Wireline ^{(1) (2)}

	Q1		Q1
($ millions, except where otherwise indicated) (unaudited)	2007		2006		% change
Bell Wireline
Local & access	910		961		(5.3%	)
Long distance	310		341		(9.1%	)
Data	893		887		0.7%
Video	314		277		13.4%
Equipment & other	170		186		(8.6%	)
Total external revenues	2,597		2,652		(2.1%	)
Inter-segment revenues	41		44		(6.8%	)
Total Bell Wireline operating revenue	2,638		2,696		(2.2%	)
Operating expenses	(1,664	)	(1,700	)	2.1%
EBITDA	974		996		(2.2%	)
EBITDA Margin	36.9%		36.9%		(0.0) pts
Operating income	416		436		(4.6%	)
Capital expenditures	403		349		(15.5%	)
Capital intensity	15.3%		12.9%		(2.4) pts
Local
Network access services (k)
Residential	5,030		5,562		(9.6%	)
Business	3,608		3,513		2.7%
Total	8,638		9,075		(4.8%	)
Long Distance (LD)
Conversation minutes (M)	3,240		3,268		(0.9%	)
Average revenue per minute ($)	0.090		0.096		(6.3%	)
ISP
High Speed Internet net activations (k)	43		37		16.2%
High Speed Internet subscribers EOP (A) (k)	1,941		1,760		10.3%
Video (DTH and VDSL)
Video EBITDA	55		41		34.1%
Net subscriber activations EOP (k)	4		12		(66.7%	)
Total subscribers (k)	1,824		1,739		4.9%
ARPU (9) ($/month)	57		53		7.5%
Churn (10) (%) (average per month)	1.1%		0.9%		(0.2) pts

^(A)    The Q1 2007 beginning of year High Speed Internet subscriber base was increased by 18k to adjust for an overstatement in deactivations in Q4 2006.

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 6

 

Bell Wireline – Historical Trend ^{(1) (2)}

			Total
($ millions, except where otherwise indicated) (unaudited)	Q1 07		2006		Q4 06		Q3 06		Q2 06		Q1 06
Bell Wireline
Local & access	910		3,757		925		926		945		961
Long distance	310		1,327		316		334		336		341
Data	893		3,627		968		891		881		887
Video	314		1,150		298		289		286		277
Equipment & other	170		726		190		164		186		186
Total external revenues	2,597		10,587		2,697		2,604		2,634		2,652
Inter-segment revenues	41		176		48		42		42		44
Total Bell Wireline operating revenue	2,638		10,763		2,745		2,646		2,676		2,696
Operating expenses	(1,664	)	(6,918	)	(1,853	)	(1,694	)	(1,671	)	(1,700	)
EBITDA	974		3,845		892		952		1,005		996
EBITDA Margin	36.9%		35.7%		32.5%		36.0%		37.6%		36.9%
Operating income	416		1,494		269		340		449		436
Capital expenditures	403		1,931		609		452		521		349
Capital intensity	15.3%		17.9%		22.2%		17.1%		19.5%		12.9%
Local
Network access services (k)
Residential	5,030				5,161		5,310		5,400		5,562
Business	3,608				3,584		3,577		3,546		3,513
Total	8,638				8,745		8,887		8,946		9,075
Long Distance (LD)
Conversation minutes (M)	3,240		13,256		3,369		3,266		3,353		3,268
Average revenue per minute ($)	0.090		0.092		0.085		0.095		0.092		0.096
ISP
High Speed Internet net activations (k)	43		157		34		61		25		37
High Speed Internet subscribers EOP (A) (k)	1,941				1,880		1,846		1,785		1,760
Video (DTH and VDSL)
Video EBITDA	55		163		25		41		56		41
Net subscriber activations EOP (k)	4		93		32		30		19		12
Total subscribers (k)	1,824		1,820		1,820		1,788		1,758		1,739
ARPU ($/month)	57		54		55		54		54		53
Churn (%) (average per month)	1.1%		1.0%		1.0%		1.0%		1.0%		0.9%

^(A)    The Q1 2007 beginning of year High Speed Internet subscriber base was increased by 18k to adjust for an overstatement in deactivations in Q4 2006. 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 7

 

Bell Wireless ^{(1) (2)}

	Q1		Q1
($ millions, except where otherwise indicated) (unaudited)	2007		2006		% change
Bell Wireless
Revenue
Network	887		793		11.9%
Equipment	56		77		(27.3%	)
Total external Bell Wireless revenues	943		870		8.4%
Inter-segment	9		11		(18.2%	)
Total Bell Wireless operating revenues	952		881		8.1%
Operating expenses	(547	)	(551	)	0.7%
EBITDA	405		330		22.7%
EBITDA margin (Total revenues)	42.5%		37.5%		5.0 pts
EBITDA margin (Network revenues)	45.7%		41.6%		4.1 pts
Operating Income	295		218		35.3%
Capital expenditures	139		77		(80.5%	)
Capital intensity	14.6%		8.7%		(5.9) pts
Wireless gross activations (A) (k)	296		342		(13.5%	)
Post-paid	167		213		(21.6%	)
Wireless net activations (A) (k)	13		76		(82.9%	)
Post-paid	10		37		(73.0%	)
Wireless subscribers EOP (A) (B) (k)	5,821		5,517		5.5%
Post-paid	4,254		3,988		6.7%
Average revenue per unit (ARPU) (C) ($/month)	52		48		8.3%
Pre-paid	15		13		15.4%
Post-paid	64		61		4.9%
Churn (C) (%) (average per month)	1.6%		1.6%		0.0 pts
Pre-paid	2.9%		2.5%		(0.4) pts
Post-paid	1.2%		1.3%		0.1 pts
Usage per subscriber (C) (min/month)	266		250		6.4%
Cost of acquisition (COA) (C) (11) ($/sub)	420		391		(7.4%	)
Paging subscribers (k)	262		323		(18.9%	)
Paging average revenue per unit ($/month)	10		10		0.0%

^(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)    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 – FIRST QUARTER 2007   PAGE 8

Bell Wireless – Historical Trend ^{(1) (2)}

			Total
($ millions, except where otherwise indicated) (unaudited)	Q1 07		2006		Q4 06		Q3 06		Q2 06		Q1 06
Bell Wireless
Revenue
Network	887		3,453		913		902		845		793
Equipment	56		333		93		81		82		77
Total external Bell Wireless revenues	943		3,786		1,006		983		927		870
Inter-segment revenue	9		41		10		10		10		11
Total Bell Wireless operating revenues	952		3,827		1,016		993		937		881
Operating expenses	(547	)	(2,392	)	(643	)	(610	)	(588	)	(551	)
EBITDA	405		1,435		373		383		349		330
EBITDA margin (Total revenues)	42.5%		37.5%		36.7%		38.6%		37.2%		37.5%
EBITDA margin (Network revenues)	45.7%		41.6%		40.9%		42.5%		41.3%		41.6%
Operating Income	295		998		265		276		239		218
Capital expenditures	139		480		163		133		107		77
Capital intensity	14.6%		12.5%		16.0%		13.4	%	11.4%		8.7%
Wireless gross activations (A) (k)	296		1,531		437		385		367		342
Post-paid	167		911		218		237		243		213
Wireless net activations (A) (k)	13		513		212		128		97		76
Post-paid	10		293		65		91		100		37
Wireless subscribers EOP (A) (B) (k)	5,821				5,954		5,742		5,614		5,517
Post-paid	4,254				4,244		4,180		4,088		3,988
Average revenue per unit (ARPU) (C) ($/month)	52		51		53		53		51		48
Pre-paid	15		14		15		16		14		13
Post-paid	64		64		66		66		63		61
Churn (%) (C) (average per month)	1.6%		1.5%		1.3%		1.5%		1.6%		1.6%
Pre-paid	2.9%		2.6%		1.8%		2.8%		3.2%		2.5%
Post-paid	1.2%		1.1%		1.1%		1.1%		1.1%		1.3%
Usage per subscriber (C) (min/month)	266		274		291		277		277		250
Cost of acquisition (COA) (C) ($/sub)	420		420		445		415		425		391
Paging subscribers (k)	262		277		277		293		310		323
Paging average revenue per unit ($/month)	10		10		10		10		10		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)    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 – FIRST QUARTER 2007   PAGE 9

   

BCE Consolidated ⁽¹⁾
Net debt and other information ⁽²⁾

BCE – Net debt and preferreds
At March 31, 2007	BCE Inc.
(unaudited)
($ millions, except where otherwise indicated)							Inter-
			Bell				segment
	Bell		Aliant		Telesat		eliminations		BCE Inc.
Cash and cash equivalents	(23	)	(40	)	(43	)	–		(106	)
Debt due within one year	1,867		15		29		(272	)	1,639
Long-term debt	8,389		2,959		251		(272	)	11,327
Net debt	10,233		2,934		237		(544	)	12,860
Preferred shares – BCE	2,770		–		–		–		2,770
Net debt and preferreds	13,003		2,934		237		(544	)	15,630

 

Bell – Balance Sheet Information
(unaudited)
($ millions, except where otherwise indicated)	March 31		Dec. 31
	2007		2006
Net Debt
Long-term debt	8,389		9,171
Debt due within one year	1,867		1,150
Less: Cash and cash equivalents	(23	)	442
Total Net Debt	10,233		10,763
Non-controlling interest	1,167		1,193
Total shareholders' equity	14,756		15,266
Total Capitalization	26,156		27,222
Net Debt: Total Capitalization	39.1%		39.5%
Net Debt: Trailing 12 month EBITDA	1.94		2.04
EBITDA: Interest (trailing 12 month)	6.53		6.20

 

BCE – Cash Flow Information
(unaudited)	Q1		Q1
($ millions, except where otherwise indicated)	2007		2006		$ change		% change
Free Cash Flow (FCF) (3)
Cash from operating activities	655		612		43		7.0%
Capital expenditures	(542	)	(426	)	(116	)	(27.2%	)
Dividends and distributions	(314	)	(340	)	26		7.6%
Other investing items	1		(2	)	3		n.m.
BELL FCF	(200	)	(156	)	(44	)	(28.2%	)
Bell Aliant FCF	50		99		(49	)	(49.5%	)
Telesat FCF	3		44		(41	)	(93.2%	)
Inter-segment eliminations	(12	)	(10	)	(2	)	(20.0%	)
Total BCE FCF	(159	)	(23	)	(136	)	n.m.

 

BCE – Cash Flow Information – Historical Trend
(unaudited)			YTD
($ millions, except where otherwise indicated)	Q1 07		2006		Q4 06		Q3 06		Q2 06		Q1 06
Free Cash Flow (FCF)
Cash from operating activities	655		4,056		1,211		1,359		874		612
Capital expenditures	(542	)	(2,411	)	(772	)	(585	)	(628	)	(426	)
Dividends and distributions	(314	)	(1,310	)	(301	)	(329	)	(340	)	(340	)
Other investing items	1		(5	)	10		(5	)	(8	)	(2	)
BELL FCF	(200	)	330		148		440		(102	)	(156	)
Bell Aliant FCF	50		383		49		9		226		99
Telesat FCF	3		24		17		7		(44	)	44
Inter-segment eliminations	(12	)	(52	)	(14	)	(14	)	(14	)	(10	)
Total BCE FCF	(159	)	685		200		442		66		(23	)

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 10

BCE Consolidated ⁽¹⁾
Consolidated Balance Sheet Data

	March 31		December 31
($ millions, except where otherwise indicated) (unaudited)	2007		2006
ASSETS
Current assets
Cash and cash equivalents	106		569
Accounts receivable	1,961		1,864
Other current assets	1,214		1,226
Current assets of discontinued operations	20		25
Total current assets	3,301		3,684
Capital assets	22,033		22,079
Other long-term assets	3,256		3,030
Indefinite-life intangible assets	2,913		2,902
Goodwill	5,906		5,475
Non-current assets of discontinued operations	26		1
Total assets	37,435		37,171
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	2,994		3,234
Interest payable	188		165
Dividends payable	342		315
Debt due within one year	1,639		986
Current liabilities of discontinued operations	4		2
Total current liabilities	5,167		4,702
Long-term debt	11,327		11,781
Other long-term liabilities	5,025		5,139
Non-current liabilities of discontinued operations	2		2
Total liabilities	21,521		21,624
Non-controlling interest	1,167		2,180
SHAREHOLDERS’ EQUITY
Preferred shares	2,770		1,670
Common shareholders’ equity
Common shares	13,382		13,487
Treasury stock	(4	)	–
Contributed surplus	2,546		2,555
Accumulated other comprehensive income	282		(2	)
Deficit	(4,229	)	(4,343	)
Total common shareholders’ equity	11,977		11,697
Total shareholders’ equity	14,747		13,367
Total liabilities and shareholders’ equity	37,435		37,171
Number of common shares outstanding	800.9		807.6
Total Net Debt	12,860		12,198
Total Capitalization	28,774		27,745
Key ratios
Net debt: Total Capitalization	44.7%		44.0%
Net debt: Trailing 12 month EBITDA	1.88		1.80
EBITDA: Interest (trailing 12 month)	7.39		7.21

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 11

BCE Consolidated ⁽¹⁾
Consolidated Cash Flow Data

		Q1			Q1
($ millions, except where otherwise indicated) (unaudited)		2007			2006			$ change
Cash flows from operating activities
Earnings from continuing operations		526			403			123
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities:
Amortization expense		787			756			31
Net benefit plans cost		102			136			(34	)
Restructuring and other items		36			88			(52	)
Net (gains) on investments		(121	)		(2	)		(119	)
Future income taxes		111			198			(87	)
Non-controlling interest		95			41			54
Contributions to employee pension plans		(108	)		(31	)		(77	)
Other employee future benefit plan payments		(24	)		(25	)		1
Payments of restructuring and other items		(52	)		(36	)		(16	)
Operating assets and liabilities		(385	)		(580	)		195
		967			948			19
Capital expenditures		(722	)		(581	)		(141	)
Other investing activities		2			(3	)		5
Cash dividends paid on preferred shares		(23	)		(21	)		(2	)
Cash dividends/distributions paid by subsidiaries to non-controlling interest		(113	)		(61	)		(52	)
Free Cash Flow from operations, before common dividends		111			282			(171	)
Cash dividends paid on common shares		(270	)		(305	)		35
Free Cash Flow from operations, after common dividends		(159	)		(23	)		(136	)
Business acquisitions		(147	)		(27	)		(120	)
Bell Aliant		(4	)		(22	)		18
Increase in investments		(13	)		(14	)		1
Decrease in investments		7			51			(44	)
Free Cash Flow after investments and divestitures		(316	)		(35	)		(281	)
Other financing activities
Increase (decrease) in notes payable and bank advances		315			(67	)		382
Issue of long-term debt		1,025			–			1,025
Repayment of long-term debt		(1,175	)		(297	)		(878	)
Issue of common shares		14			1			13
Repurchase of common shares		(223	)		(525	)		302
Issue of equity securities by subsidiaries to non-controlling interest		–			3			(3	)
Redemption of equity securities by subsidiaries from non-controlling interest		(74	)		–			(74	)
Other financing activities		(41	)		(14	)		(27	)
		(159	)		(899	)		740
Cash used in continuing operations		(475	)		(934	)		459
Cash provided by discontinued operations		5			1,367			(1,362	)
Net (decrease) increase in cash and cash equivalents		(470	)		433			(903	)
Cash and cash equivalents at beginning of period		581			445			136
Cash and cash equivalents at end of period		111			878			(767	)
Consists of:
Cash and cash equivalents of continuing operations		106			873			(767	)
Cash and cash equivalents of discontinued operations		5			5			–
Total		111			878			(767	)
Other information
Cash flow per share (6)	$	0.30		$	0.40		$	(0.10	)
Annualized cash flow yield (7)		1.7%			4.4%			(2.7) pts
Common dividend payout (8)		70.2%			67.3%			2.9 pts

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 12

BCE Consolidated ⁽¹⁾
Consolidated Cash Flow Data – Historical Trend

					Total
($ millions, except where otherwise indicated) (unaudited)		Q1 07			2006			Q4 06			Q3 06			Q2 06			Q1 06
Cash flows from operating activities
Earnings from continuing operations		526			1,880			714			322			441			403
Adjustments to reconcile earnings from continuing operations to cash flows from operating activities:
Amortization expense		787			3,128			796			787			789			756
Net benefit plans cost		102			511			123			118			134			136
Restructuring and other items		36			355			91			126			50			88
Net (gains) losses on investments		(121	)		26			36			(8	)		–			(2	)
Future income taxes		111			(13	)		(359	)		43			105			198
Non-controlling interest		95			217			101			38			37			41
Contributions to employee pension plans		(108	)		(172	)		(51	)		(49	)		(41	)		(31	)
Other employee future benefit plan payments		(24	)		(96	)		(24	)		(25	)		(22	)		(25	)
Payments of restructuring and other items		(52	)		(225	)		(31	)		(124	)		(34	)		(36	)
Operating assets and liabilities		(385	)		(245	)		124			368			(157	)		(580	)
		967			5,366			1,520			1,596			1,302			948
Capital expenditures		(722	)		(3,133	)		(935	)		(760	)		(857	)		(581	)
Other investing activities		2			(2	)		13			(4	)		(8	)		(3	)
Cash dividends paid on preferred shares		(23	)		(84	)		(22	)		(21	)		(20	)		(21	)
Cash dividends/distributions paid by subsidiaries to non-controlling interest		(113	)		(293	)		(108	)		(75	)		(49	)		(61	)
Free Cash Flow from operations, before common dividends		111			1,854			468			736			368			282
Cash dividends paid on common shares		(270	)		(1,169	)		(268	)		(294	)		(302	)		(305	)
Free Cash Flow from operations, after common dividends		(159	)		685			200			442			66			(23	)
Business acquisitions		(147	)		(71	)		(5	)		(27	)		(12	)		(27	)
Business dispositions		–			–			–			–			–			–
Bell Aliant		(4	)		(255	)		(30	)		(152	)		(51	)		(22	)
Increase in investments		(13	)		(304	)		(24	)		(161	)		(105	)		(14	)
Decrease in investments		7			64			–			–			13			51
Free Cash Flow after investments and divestitures		(316	)		119			141			102			(89	)		(35	)
Other financing activities
Increase (decrease) in notes payable and bank advances		315			(57	)		(302	)		80			232			(67	)
Issue of long-term debt		1,025			4,392			675			3,419			298			–
Repayment of long-term debt		(1,175	)		(4,767	)		(2,016	)		(1,925	)		(529	)		(297	)
Issue of common shares		14			29			10			17			1			1
Repurchase of common shares		(223	)		(1,241	)		(133	)		(114	)		(469	)		(525	)
Issue of equity securities by subsidiaries to non-controlling interest		–			13			–			–			10			3
Redemption of equity securities by subsidiaries from non-controlling interest		(74	)		(305	)		(50	)		–			(255	)		–
Other financing activities		(41	)		(157	)		(35	)		(93	)		(15	)		(14	)
		(159	)		(2,093	)		(1,851	)		1,384			(727	)		(899	)
Cash (used in) provided by continuing operations		(475	)		(1,974	)		(1,710	)		1,486			(816	)		(934	)
Cash provided by (used in) discontinued operations		5			2,110			(2	)		695			50			1,367
Net (decrease) increase in cash and cash equivalents		(470	)		136			(1,712	)		2,181			(766	)		433
Cash and cash equivalents at beginning of period		581			445			2,293			112			878			445
Cash and cash equivalents at end of period		111			581			581			2,293			112			878
Consists of:
Cash and cash equivalents of continuing operations		106			569			569			2,284			129			873
Cash and cash equivalents (bank indebtedness) of discontinued operations		5			12			12			9			(17	)		5
Total		111			581			581			2,293			112			878
Other information
Cash flow per share	$	0.30		$	2.59		$	0.72		$	1.02		$	0.50		$	0.40
Annualized cash flow yield		1.7%			7.3%			7.4%			12.0%			6.3%			4.4%
Common dividend payout		70.2%			67.7%			75.0%			68.8%			61.1%			67.3%

 

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 13

Accompanying Notes

(1)		Throughout this report, the following definition applies: Bell refers to BCE Inc. excluding Bell Aliant and Telesat. We have reclassified some of the figures for the comparative 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 the sale of Aliant Directory Services (ADS) which is shown as discontinued operations.
(2)		In the first quarter of 2007, our management structure changed and our results of operations now are reported in four segments: Bell Wireline, Bell Wireless, Bell Aliant and Telesat. We have restated prior periods to reflect these new segments. Our reporting structure reflects how we manage our business and how we classify our operations for planning and measuring performance.
(3)		Non-GAAP Financial Measures EBITDA We define EBITDA as operating revenues less operating expenses, which means it represents operating income before amortization expense, and restructuring and other items. The term EBITDA (earnings before interest, taxes, depreciation and amortization), 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 use EBITDA, among other measures, to assess the operating performance of our ongoing businesses without the effects of amortization expense and restructuring and other items. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis trends in business performance. We exclude amortization expense 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 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. The most comparable Canadian GAAP financial measure is operating income. Earnings per share (EPS) before restructuring and other items, net gains on investments and costs incurred to form the Bell Aliant Regional Communications Income Fund (Bell Aliant) The term EPS before restructuring and other items, net gains on investments, and costs incurred to form Bell Aliant, 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 use EPS before restructuring and other items, net gains on investments, and costs incurred to form Bell Aliant, among other measures, to assess the operating performance of our ongoing businesses without the effects of after-tax restructuring and other items, net gains on investments, and costs incurred to form Bell Aliant. 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 necessarily non-recurring. The most comparable Canadian GAAP financial measure is EPS. FREE CASH FLOW We define free cash flow as cash from operating activities after capital expenditures, total dividends and other investing activities. 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 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.

BCE INC. SUPPLEMENTARY FINANCIAL INFORMATION – FIRST QUARTER 2007   PAGE 144

Accompanying Notes (continued)

		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)		Cash flow per share is calculated as follows: Cash flow from operating activities less capital expenditures Average number of common shares outstanding
(7)		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.
(8)		Common dividend payout is calculated as follows: Dividends per common share EPS before restructuring and other items, net gains on investments, and costs incurred to form Bell Aliant
(9)		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.
(10)		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.
(11)		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 – FIRST QUARTER 2007   PAGE 155